MHC AND MHICL vs.

NLRC et al
G.R. No. 120077
October 13, 2000
FACT: private respondent Santos was an overseas worker employed as a printer at the Mazoon
Printing Press, Sultanate of Oman. Subsequently he was diretly hired by the Palae !otel,
"ei#ing, People$s %epubli of &hina and later terminated due to retrenhment.
Petitioners are the Manila !otel &orporation '(M!&)* and the Manila !otel +nternational
&ompany, ,imited '(M!+&,)*.
-hen the ase was filed in .//0, M!& was still a government1owned and ontrolled orporation
duly organized and e2isting under the laws of the Philippines. M!+&, is a orporation duly
organized and e2isting under the laws of !ong 3ong. M!& is an (inorporator) of M!+&,,
owning 405 of its apital stok.
"y virtue of a (management agreement) with the Palae !otel, M!+&, trained the personnel
and staff of the Palae !otel at "ei#ing, &hina.
6ow the fats.
7uring his employment with the Mazoon Printing Press, respondent Santos reeived a letter from
Mr. Shmidt, 8eneral Manager, Palae !otel, "ei#ing, &hina. Mr. Shmidt informed respondent
Santos that he was reommended by one "uenio, a friend of his. Mr. Shmidt offered respondent
Santos the same position as printer, but with a higher monthly salary and inreased benefits.
%espondent Santos wrote to Mr. Shmidt and signified his aeptane of the offer.
9he Palae !otel Manager, Mr. !enk mailed a ready to sign employment ontrat to respondent
Santos. Santos resigned from the Mazoon Printing Press. Santos wrote the Palae !otel and
aknowledged Mr. !enk$s letter. 9he employment ontrat stated that his employment would be
for a period of two years. !e then started to work at the Palae !otel.
Subsequently, respondent Santos signed an amended (employment agreement) with the Palae
!otel. +n the ontrat, Mr. Shmidt represented the Palae !otel. 9he :ie President 'Operations
and 7evelopment* of petitioner M!+&, &ergueda signed the employment agreement under the
word (noted).
;fter working in the Palae hotel for less than . year, the Palae !otel informed respondent
Santos by letter signed by Mr. Shmidt that his employment at the Palae !otel print shop would
be terminated due to business reverses brought about by the politial upheaval in &hina. 9he
Palae !otel terminated the employment of Santos and paid all benefits due him, inluding his
plane fare bak to the Philippines. Santos was repatriated to the Philippines.
Santos filed a omplaint for illegal dismissal with the ;rbitration "ranh, 6&%, 6,%&. !e
prayed for an award of ;7, <7 and ;= for. 9he omplaint named M!&, M!+&,, the Palae
!otel and Mr. Shmidt as respondents. 9he Palae !otel and Mr. Shmidt were not served with
summons and neither partiipated in the proeedings before the ,;.
9he ,; deided the ase against petitioners. Petitioners appealed to the 6,%&, arguing that the
PO<;, not the 6,%& had #urisdition over the ase. 9he 6,%& promulgated a resolution,
stating that the appealed 7eision be delared null and void for want of #urisdition
Santos moved for reonsideration of the afore1quoted resolution. !e argued that the ase was not
ognizable by the PO<; as he was not an (overseas ontrat worker. 9he 6,%& granted the
motion and reversed itself. 9he 6,%& direted another ,; to hear the ase on the question of
whether private respondent was retrenhed or dismissed. 9he ,a found that Santos was illegally
dismissed from employment and reommended that he be paid atual damages equivalent to his
salaries for the une2pired portion of his ontrat. 9he 6,%& ruled in favor of private respondent.
Petitioners filed an M% arguing that the ,;$s reommendation had no basis in law and in fat,
however it was denied. !ene, this petition.
I!": +s the 6,%& a proper forum to deide this ase>
!<,7: petition granted? the orders and resolutions of the 6,%& are annulled.
NO
=orum 6on1&onveniens
9he 6,%& was a seriously inonvenient forum.
-e note that the main aspets of the ase transpired in two foreign #urisditions and the ase
involves purely foreign elements. 9he only link that the Philippines has with the ase is that
Santos is a =ilipino itizen. 9he Palae !otel and M!+&, are foreign orporations. 6ot all ases
involving our itizens an be tried here.
9he employment ontrat. @ %espondent Santos was hired diretly by the Palae !otel, a
foreign employer, through orrespondene sent to the Sultanate of Oman, where respondent
Santos was then employed. !e was hired without the intervention of the PO<; or any authorized
reruitment ageny of the government.
Ander the rule of forum non onveniens, a Philippine ourt or ageny may assume #urisdition
over the ase if it hooses to do so provided: '.* that the Philippine ourt is one to whih the
parties may onveniently resort to? 'B* that the Philippine ourt is in a position to make an
intelligent deision as to the law and the fats? and 'C* that the Philippine ourt has or is likely to
have power to enfore its deision. 9he onditions are unavailing in the ase at bar.
6ot &onvenient. @ -e fail to see how the 6,%& is a onvenient forum given that all the
inidents of the ase @ from the time of reruitment, to employment to dismissal ourred
outside the Philippines. 9he inonveniene is ompounded by the fat that the proper defendants,
the Palae !otel and M!+&, are not nationals of the Philippines. 6either .are they (doing
business in the Philippines.) ,ikewise, the main witnesses, Mr. Shmidt and Mr. !enk are non1
residents of the Philippines.
6o power to determine appliable law. @ 6either an an intelligent deision be made as to the
law governing the employment ontrat as suh was perfeted in foreign soil. 9his alls to fore
the appliation of the priniple of le2 loi ontratus 'the law of the plae where the ontrat was
made*.
9he employment ontrat was not perfeted in the Philippines. Santos signified his aeptane
by writing a letter while he was in the %epubli of Oman. 9his letter was sent to the Palae !otel
in the People$s %epubli of &hina.
6o power to determine the fats. @ 6either an the 6,%& determine the fats surrounding the
alleged illegal dismissal as all ats omplained of took plae in "ei#ing, People$s %epubli of
&hina. 9he 6,%& was not in a position to determine whether the 9iannamen Square inident
truly adversely affeted operations of the Palae !otel as to #ustify Santos$ retrenhment.
Priniple of effetiveness, no power to e2eute deision. @ <ven assuming that a proper
deision ould be reahed by the 6,%&, suh would not have any binding effet against the
employer, the Palae !otel. 9he Palae !otel is a orporation inorporated under the laws of
&hina and was not even served with summons. Durisdition over its person was not aquired.
9his is not to say that Philippine ourts and agenies have no power to solve ontroversies
involving foreign employers. 6either are we saying that we do not have power over an
employment ontrat e2euted in a foreign ountry. +f Santos were an (overseas ontrat
worker), a Philippine forum, speifially the PO<;, not the 6,%&, would protet him. !e is not
an (overseas ontrat worker) a fat whih he admits with onvition.
EE
<ven assuming that the 6,%& was the proper forum, even on the merits, the 6,%&$s deision
annot be sustained.
++. M!& 6ot ,iable
<ven if we assume two things: '.* that the 6,%& had #urisdition over the ase, and 'B* that
M!+&, was liable for Santos$ retrenhment, still M!&, as a separate and distint #uridial entity
annot be held liable.
9rue, M!& is an inorporator of M!+&, and owns 405 of its apital stok. !owever, this is not
enough to piere the veil of orporate fition between M!+&, and M!&. +n 9raders %oyal "ank
v. &;, we held that (the mere ownership by a single stokholder or by another orporation of all
or nearly all of the apital stok of a orporation is not of itself a suffiient reason for
disregarding the fition of separate orporate personalities.)
+t is basi that a orporation has a personality separate and distint from those omposing it as
well as from that of any other legal entity to whih it may be related. &lear and onvining
evidene is needed to piere the veil of orporate fition. +n this ase, we find no evidene to
show that M!+&, and M!& are one and the same entity.
+++. M!+&, not ,iable
Santos prediates M!+&,$s liability on the fat that M!+&, (signed) his employment ontrat
with the Palae !otel. 9his fat fails to persuade us.
=irst, we note that the :ie President 'Operations and 7evelopment* of M!+&,, &ergueda
signed the employment ontrat as a mere witness. !e merely signed under the word (noted).
-hen one (notes) a ontrat, one is not e2pressing his agreement or approval, as a party would.
+n Sihango v. "oard of &ommissioners of +mmigration, the &ourt reognized that the term
(noted) means that the person so noting has merely taken ognizane of the e2istene of an at
or delaration, without e2erising a #udiious deliberation or rendering a deision on the matter.
Seond, and more importantly, there was no e2isting employer1employee relationship between
Santos and M!+&,. +n determining the e2istene of an employer1employee relationship, the
following elements are onsidered:
('.* the seletion and engagement of the employee?
('B* the payment of wages?
('C* the power to dismiss? and
('F* the power to ontrol employee$s ondut.)
M!+&, did not have and did not e2erise any of the aforementioned powers. +t did not selet
respondent Santos as an employee for the Palae !otel. !e was referred to the Palae !otel by
his friend, "uenio. M!+&, did not engage respondent Santos to work. 9he terms of employment
were negotiated and finalized through orrespondene between Santos, Mr. Shmidt and Mr.
!enk, who were offiers and representatives of the Palae !otel and not M!+&,. 6either did
Santos addue any proof that M!+&, had the power to ontrol his ondut. =inally, it was the
Palae !otel, through Mr. Shmidt and not M!+&, that terminated respondent Santos$ servies.
,ikewise, there is no evidene to show that the Palae !otel and M!+&, are one and the same
entity. 9he fat that the Palae !otel is a member of the (Manila !otel 8roup) is not enough to
piere the orporate veil between M!+&, and the Palae !otel.
&onsidering that the 6,%& was forum non1onveniens and onsidering further that no
employer1employee relationship e2isted between M!+&,, M!& and Santos, the ,; learly had
no #urisdition over respondent$s laim in the 6,%& ase. +n all the ases under the e2lusive
and original #urisdition of the ,;, an employer1employee relationship is an indispensable
#urisditional requirement.
#HIL"C IN$"TM"NT et al vs.CA et al
G.R. No. 103%&3
'()e 1&, 1&&7
FACT: Private respondent 7uat obtained separate loans from petitioners ;yala +nternational
=inane ,imited ';G;,;* and Philse +nvestment &orp 'P!+,S<&*, seured by shares of stok
owned by 7uat.
+n order to failitate the payment of the loans, private respondent .FHH, +n., through its
president, private respondent 7ai, assumed 7uat$s obligation under an ;greement, whereby
.FHH, +n. e2euted a -arranty 7eed with :endor$s ,ien by whih it sold to petitioner ;thona
!oldings, 6.:. ';9!O6;* a parel of land in 9e2as, A.S.;., while P!+,S<& and ;G;,;
e2tended a loan to ;9!O6; as initial payment of the purhase prie. 9he balane was to be paid
by means of a promissory note e2euted by ;9!O6; in favor of .FHH, +n. Subsequently, upon
their reeipt of the money from .FHH, +n., P!+,S<& and ;G;,; released 7uat from his
indebtedness and delivered to .FHH, +n. all the shares of stok in their possession belonging to
7uat.
;s ;9!O6; failed to pay the interest on the balane, the entire amount overed by the note
beame due and demandable. ;ordingly, private respondent .FHH, +n. sued petitioners
P!+,S<&, ;G;,;, and ;9!O6; in the Anited States for payment of the balane and for
damages for breah of ontrat and for fraud allegedly perpetrated by petitioners in
misrepresenting the marketability of the shares of stok delivered to .FHH, +n. under the
;greement.
-hile the &ivil &ase was pending in the Anited States, petitioners filed a omplaint (=or Sum of
Money with 7amages and -rit of Preliminary ;ttahment) against private respondents in the
%9& Makati. 9he omplaint reiterated the allegation of petitioners in their respetive
ounterlaims in the &ivil ;tion in the Anited States 7istrit &ourt of Southern 9e2as that
private respondents ommitted fraud by selling the property at a prie F00 perent more than its
true value.
7uat moved to dismiss the &ivil &ase in the %9&1Makati on the grounds of '.* litis pendentia,
vis1a1vis the &ivil ;tion in the A.S., 'B* forum non onveniens, and 'C* failure of petitioners
P!+,S<& and "P+1+=, to state a ause of ation.
9he trial ourt granted 7uat$s M97, stating that (the evidentiary requirements of the
ontroversy may be more suitably tried before the forum of the litis pendentia in the A.S., under
the priniple in private international law of forum non onveniens,) even as it noted that 7uat
was not a party in the A.S. ase.
Petitioners appealed to the &;, arguing that the trial ourt erred in applying the priniple of litis
pendentia and forum non onveniens.
9he &; affirmed the dismissal of &ivil &ase against 7uat, .FHH, +n., and 7ai on the ground of
litis pendentia.
I!": is the &ivil &ase in the %9&1Makati barred by the #udgment of the A.S. ourt>
H"LD: &; reversed. &ase remanded to %9&1Makati
NO
-hile this &ourt has given the effet of res #udiata to foreign #udgments in several ases, it was
after the parties opposed to the #udgment had been given ample opportunity to repel them on
grounds allowed under the law. 9his is beause in this #urisdition, with respet to ations in
personam, as distinguished from ations in rem, a foreign #udgment merely onstitutes prima
faie evidene of the #ustness of the laim of a party and, as suh, is sub#et to proof to the
ontrary. %ule C/, I40 provides:
Se. 40. <ffet of foreign #udgments. @ 9he effet of a #udgment of a tribunal of a foreign
ountry, having #urisdition to pronoune the #udgment is as follows:
'a* +n ase of a #udgment upon a speifi thing, the #udgment is onlusive upon the title to the
thing?
'b* +n ase of a #udgment against a person, the #udgment is presumptive evidene of a right as
between the parties and their suessors in interest by a subsequent title? but the #udgment may
be repelled by evidene of a want of #urisdition, want of notie to the party, ollusion, fraud, or
lear mistake of law or fat.
+n the ase at bar, it annot be said that petitioners were given the opportunity to hallenge the
#udgment of the A.S. ourt as basis for delaring it res #udiata or onlusive of the rights of
private respondents. 9he proeedings in the trial ourt were summary. 6either the trial ourt nor
the appellate ourt was even furnished opies of the pleadings in the A.S. ourt or apprised of the
evidene presented thereat, to assure a proper determination of whether the issues then being
litigated in the A.S. ourt were e2atly the issues raised in this ase suh that the #udgment that
might be rendered would onstitute res #udiata.
Seond. 6or is the trial ourt$s refusal to take ognizane of the ase #ustifiable under the
priniple of forum non onveniens:
=irst, a M97 is limited to the grounds under %ule .J, se.., whih does not inlude forum non
onveniens. 9he propriety of dismissing a ase based on this priniple requires a fatual
determination, hene, it is more properly onsidered a matter of defense.
Seond, while it is within the disretion of the trial ourt to abstain from assuming #urisdition on
this ground, it should do so only after (vital fats are established, to determine whether speial
irumstanes) require the ourt$s desistane.
H*C $. H"RMAN
HONG+ONG AND HANGHAI *AN+ING COR#ORATION ,H*C- vs. H"RMAN et
al
G.R. No. 72%&%
A(.(st 11, 1&/&
FACT: +t appears that sometime in ./H., <astern "ook Supply Servie P9<, ,td.
'&OMP;6G*, a ompany inorporated in Singapore applied with and was granted by !S"&
Singapore branh an overdraft faility in the ma2imum amount of Singapore dollars B00,000
with interest at C5 over !S"& prime rate, payable monthly, on amounts due under said
overdraft faility.
;s a seurity for the repayment by the &OMP;6G of sums advaned by !S"& to it through the
aforesaid overdraft faility, in ./HB, both private respondents and a ertain ,owe, all of whom
were diretors of the &OMP;6G at suh time, e2euted a Doint and Several 8uarantee in favor
of !S"& whereby private respondents and ,owe agreed to pay, #ointly and severally, on demand
all sums owed by the &OMP;6G to petitioner ";63 under the aforestated overdraft faility.
9he Doint and Several 8uarantee provides, inter alia, that:
9his guarantee and all rights, obligations and liabilities arising hereunder shall be onstrued and
determined under and may be enfored in aordane with the laws of the %epubli of
Singapore. -e hereby agree that the &ourts of Singapore shall have #urisdition over all disputes
arising under this guarantee. K
9he &OMP;6G failed to pay its obligation. 9hus, !S"& demanded payment and inasmuh as
the private respondents still failed to pay, !S"& filed ; omplaint for olletion of a sum of
money against private respondents Sherman and %elo# before %9& of Luezon &ity.
Private respondents filed an M97 on the ground of lak of #urisdition over the sub#et matter.
9he trial ourt denied the motion. 9hey then filed before the respondent +;& a petition for
prohibition with preliminary in#untion andMor prayer for a restraining order. 9he +;& rendered a
deision en#oining the %9& Luezon &ity from taking further ognizane of the ase and to
dismiss the same for filing with the proper ourt of Singapore whih is the proper forum. M%
denied, hene this petition.
I!": 7o Philippine ourts have #urisdition over the suit, vis1a1vis the 8uarantee stipulation
regarding #urisdition>
H"LD: G<S
One basi priniple underlies all rules of #urisdition in +nternational ,aw: a State does not have
#urisdition in the absene of some reasonable basis for e2erising it, whether the proeedings
are in rem quasi in rem or in personam. 9o be reasonable, the #urisdition must be based on some
minimum ontats that will not offend traditional notions of fair play and substantial #ustie
9he defense of private respondents that the omplaint should have been filed in Singapore is
based merely on tehniality. 9hey did not even laim, muh less prove, that the filing of the
ation here will ause them any unneessary trouble, damage, or e2pense. On the other hand,
there is no showing that petitioner ";63 filed the ation here #ust to harass private respondents.
NN
+n the ase of 6eville G. ,amis <nts., et al. v. ,agamon, et., where the stipulation was (OiPn ase
of litigation, #urisdition shall be vested in the &ourt of 7avao &ity.) -e held:
;nent the laim that 7avao &ity had been stipulated as the venue, suffie it to say that a
stipulation as to venue does not prelude the filing of suits in the residene of plaintiff or
defendant under Setion B 'b*, %ule F, %O&, in the absene of qualifying or restritive words in
the agreement whih would indiate that the plae named is the only venue agreed upon by the
parties.
;pplying the foregoing to the ase at bar, the parties did not thereby stipulate that only the ourts
of Singapore, to the e2lusion of all the rest, has #urisdition. 6either did the lause in question
operate to divest Philippine ourts of #urisdition. +n +nternational ,aw, #urisdition is often
defined as the light of a State to e2erise authority over persons and things within its boundaries
sub#et to ertain e2eptions. 9hus, a State does not assume #urisdition over travelling
sovereigns, ambassadors and diplomati representatives of other States, and foreign military
units stationed in or marhing through State territory with the permission of the latter$s
authorities. 9his authority, whih finds its soure in the onept of sovereignty, is e2lusive
within and throughout the domain of the State. ; State is ompetent to take hold of any #udiial
matter it sees fit by making its ourts and agenies assume #urisdition over all kinds of ases
brought before them
NOT":
9he respondent +;& likewise ruled that:
K +n a onflit problem, a ourt will simply refuse to entertain the ase if it is not authorized by
law to e2erise #urisdition. ;nd even if it is so authorized, it may still refuse to entertain the ase
by applying the priniple of forum non onveniens. K
!owever, whether a suit should be entertained or dismissed on the basis of the priniple of forum
non onveniens depends largely upon the fats of the partiular ase and is addressed to the
sound disretion of the trial ourt. 9hus, the +;& should not have relied on suh priniple.