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CONFLICT OF LAWS 1st SET DIGEST

SAUDI ARABIAN AIRLINES vs. CA (1998) - "State of
the most significant relationship" rule
FACTS: defendant SAUDIA hired plaintiff as a Flight
Attendant for its airlines based in Jeddah, Saudi Arabia.
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 te (sic) 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.
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.
SAUDIA allowed plaintiff to return to Jeddah but barred
her from the Jakarta flights. The Indonesian authorities
agreed to deport Thamer and Allah after two weeks of
detention. Eventually, they were again put in service by
defendant SAUDI. Defendant SAUDIA transferred
plaintiff to Manila. 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. One year and a half later, 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. Plaintiff then

returned to Manila. Defendant SAUDIA summoned

plaintiff to report to Jeddah once again and see
Miniewy for further investigation. Plaintiff did so
after receiving assurance from SAUDIA's Manila
manager, Aslam Saleemi, that the investigation was
routinary and that it posed no danger to her. 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. To her astonishment and shock, the court
rendered a decision, translated to her in English,
sentencing her to 5 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.
Private respondent sought the help of her employer,
petitioner SAUDIA. Unfortunately, she was denied any
assistance. Because she was wrongfully convicted, the
Prince of Makkah dismissed the case against her and
allowed her to leave Saudi Arabia. She was terminated
from the service by SAUDIA, without her being
informed of the cause. Morada filed a Complaint for
damages against SAUDIA, and Khaled Al-Balawi ("AlBalawi"), its country manager. SAUDIA 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.
HELD: Petitioner SAUDIA claims that before us is a
conflict of laws that must be settled at the outset. It
maintains that private respondent's 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. 34 Private respondent contends
that since her Amended Complaint is based on Articles
19 35 and 21 36 of the Civil Code, then the instant case is
properly a matter of domestic law. 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

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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 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. 42In 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. A conflicts problem presents itself
here, and the question of jurisdiction 43 confronts the
court a quo.
Article 19 of the New Civil Code provides: 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.
Article 21 of the New Civil Code provides: Any person
who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or
public policy shall compensate the latter for damages.
(RTC) of Quezon City possesses jurisdiction over the
subject matter of the suit. 48 Its authority to try and hear
the case is provided for under Section 1 of Republic Act
No. 7691, to wit: Sec. 1. Section 19 of Batas Pambansa
Blg. 129, otherwise known as the "Judiciary
Reorganization Act of 1980", is hereby amended to
read as follows: Jurisdiction in Civil Cases. Regional
Trial Courts shall exercise exclusive jurisdiction: (8) In
all other cases in which demand, exclusive of interest,
damages of whatever kind, attorney's fees, litigation
expenses, and cots or the value of the property in
controversy exceeds One hundred thousand pesos
(P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the above-mentioned
items exceeds Two hundred Thousand pesos
(P200,000.00). (Emphasis ours)
And following Section 2 (b), Rule 4 of the Revised
Rules of Court the venue, Quezon City, is
appropriate: Venue in Courts of First Instance. [Now
Regional Trial Court] (b) Personal actions. All other
actions may be commenced and tried where the
defendant or any of the defendants resides or may be
found, or where the plaintiff

Pragmatic considerations, including the convenience of

the parties, also weigh heavily in favor of the RTC
Quezon City assuming jurisdiction. Paramount 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. 49
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. 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
voluntary submitted herself to the jurisdiction of the
court. Petitioner SAUDIA has effectively submitted to
the trial court's jurisdiction by praying for the dismissal
of the Amended Complaint on grounds other than lack
of jurisdiction. If his motion is for any other purpose
than to object to the jurisdiction of the court over his
person, he thereby submits himself to the jurisdiction of
the court.
Clearly, petitioner had submitted to the jurisdiction of
the Regional Trial Court of Quezon City. Thus, we find
that the trial court has jurisdiction over the case and
that its exercise thereof, justified.
As to the choice of applicable law, we note that choiceof-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. 53
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." 55 The purpose of
"characterization" is to enable the forum to select the
proper law. 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

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as the situs of the res, the place of celebration, the
place of performance, or the place of wrongdoing.
There is reasonable basis for private respondent's
assertion that although 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. 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. Petitioner's purported act
contributed to and amplified or even proximately
caused additional humiliation, misery and suffering of
private respondent.
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. That certain acts or parts of the injury
allegedly occurred in another country is of no
moment. 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.
"State of the most significant relationship" rule
(ICDR) - 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.

There is basis for the claim that over-all 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, that the
Philippines is the situs of the tort complained of
and the place "having the most interest in the
problem", 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.
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. 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 country's
system of law and justice in a transnational setting.
Milagros P. Morada vs. Saudi Arabia Airlines" is hereby
REMANDED to Regional Trial Court of Quezon City,
CHRISTENSEN vs. AZNAR (1963) California,
international football, renvoi
FACTS: Edward S. Christensen, though born in New
York, migrated to California where he resided and
consequently was considered a California Citizen for a
period of nine years to 1913. 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 as a citizen of California. In his will, executed on
March 5, 1951, he instituted an acknowledged natural
daughter, Maria Lucy Christensen as his only heir but
left a legacy of some money in favor of Helen
Christensen Garcia who, in a decision rendered by the
Supreme Court had been declared as an acknowledged
natural daughter of his. Counsel of Helen claims that
under Art. 16 (2) of the civil code, California law should
be applied, the matter is returned back to the law of
domicile, that Philippine law is ultimately applicable,
that the share of Helen must be increased in view of
successional rights of illegitimate children under
Philippine laws. On the other hand, counsel for
daughter Maria , in as much that it is clear under Art, 16
(2) of the Mew Civil Code, the national of the deceased
must apply, our courts must apply internal law of
California on the matter. Under California law, there are

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no compulsory heirs and consequently a testator should
dispose any property possessed by him in absolute
dominion. Whether Philippine Law or California Law
should apply.
HELD: The Supreme Court deciding to grant more
successional rights to Helen Christensen Garcia said in
effect that there be two rules in California on the matter.
1. The conflict rule which should apply to Californians
outside the California, and 2. The internal Law which
should apply to California domiciles in califronia.
The California conflict rule, found on Art. 946 of the
California Civil code States that if there is no law to the
contrary in the place where personal property is
situated, it is deemed to follow the decree of its owner
and is governed by the law of the domicile.
Christensen being domiciled outside california, the law
of his domicile, the Philippines is ought to be followed.
Wherefore, the decision appealed is reversed and case
is remanded to the lower court with instructions that
partition be made as that of the Philippine law provides
It is argued on appellees' behalf 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. This contention can not be
sustained. As explained in the various authorities cited
above 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 can not
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.
GIBBS vs. THE GOVERNMENT OF THE PHILIPPINE
ISLANDS (1933) California, inheritance tax
FACTS: Allison D. Gibbs has been continuously, since
the year 1902, a citizen of the State of California and
domiciled therein. He and Eva Johnson Gibbs were
married at Columbus, Ohio, in July 1906. There was no
antenuptial marriage contract between the parties.
During the existence of said marriage the spouses
acquired lands in the Philippine Islands as conjugal
property. Eva Johnson Gibbs later died intestate in Palo
Alto, California, on November 28, 1929. At the time of
her death she and her husband were citizens of the
State of California and domiciled therein. Allison D.
Gibbs was appointed administrator of the estate of his
said deceased wife. Allison D. Gibbs filed an ex parte
petition in which he alleged that his wife, a citizen and
resident of California, died on November 28,1929; that
in accordance with the law of California, the community
property of spouses who are citizens of California, upon
the death of the wife previous to that of the husband,
belongs absolutely to the surviving husband without
administration; that the conjugal partnership of Allison
D. Gibbs and Eva Johnson Gibbs, deceased, has no
obligations or debts and no one will be prejudiced by
adjucating said parcels of land to the absolute property
of the said Allison D. Gibbs as sole owner. The court
granted said petition and entered a decree adjucating
Allison D. Gibbs to be the sole and absolute owner of
said lands, applying section 1401 of the Civil Code of
California. Gibbs presented this decree to the register
of deeds of Manila and demanded that the latter issue
to him a "transfer certificate of title".
Section 1547 of Article XI of Chapter 40 of the
Administrative Code provides in part that: Registers of
deeds shall not register in the registry of property any
document transferring real property or real rights
therein or any chattel mortgage, by way of gifts mortis
causa, legacy or inheritance, unless the payment of the
tax fixed in this article and actually due thereon shall be
shown. And they shall immediately notify the Collector
of Internal Revenue or the corresponding provincial

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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 and refused to
register the transfer of title of the said conjugal property
to Allison D. Gibbs, on the ground that the
corresponding inheritance tax had not been paid.
Allison D. Gibbs filed in the said court a petition for an
order requiring the said register of deeds "to issue the
corresponding titles" to the petitioner without requiring
previous payment of any inheritance tax. After due
hearing of the parties, the court reaffirmed said order.
Supreme 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. 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: Was Eva Johnson Gibbs at the time of her death
the owner of a descendible interest in the Philippine
lands above-mentioned?
Contention of the Appellee: The appellee contends
that the law of California should determine the nature
and extent of the title, if any, that vested in Eva Johnson
Gibbs under the three 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 second
paragraph of article 10 of the Civil Code.
Appellant's chief argument and the sole basis of the
lower court's decision rests upon the second 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.
Decision: 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. The argument of the
appellee apparently leads to this dilemma: If he takes
nothing by succession from his deceased wife, how can
the second paragraph of article 10 be invoked? Can the
appellee be heard to say that there is a legal
succession under the law of the Philippine Islands and
no legal succession under the law of California?
It seems clear that the second 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. The
second 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 vs. 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

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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 the appellee and his
wife. Under the law of the Philippine Islands, she
was vested of a title equal to that of her husband.
Article 1407 of the Civil Code provides: All the property
of the spouses shall be deemed partnership property in
the absence of proof that it belongs exclusively to the
husband or to the wife. Article 1395 provides:
"The conjugal partnership shall be governed by the
rules of law applicable to the contract of partnership in
all matters in which such rules do not conflict with the
express provisions of this chapter." Article 1414
provides that "the husband may dispose by will of his
half only of the property of the conjugal partnership."
Article 1426 provides that upon dissolution of the
conjugal partnership and after inventory and liquidation,
"the net remainder of the partnership property shall be
divided share and share alike between the husband
and wife, or their respective heirs." Under the provisions
of the Civil Code and the jurisprudence prevailing here,
the wife, upon the acquisition of any conjugal
property, becomes immediately vested with an
interest and title therein equal to that of her
husband, subject to the power of management and
disposition which the law vests in the husband.
Immediately upon her death, if there are no
obligations of the decedent, as is true in the
present case, her share in the conjugal property is
transmitted to her heirs by succession. It results
that the wife of the appellee was, by the law of the
Philippine Islands, vested of a descendible interest,
equal to that of her husband, in the Philippine lands
covered by certificates of title Nos. 20880, 28336 and
28331, from the date of their acquisition to the date of
her death. That appellee himself believed that his wife
was vested of such a title and interest in manifest from
the second of said certificates, No. 28336, dated May
14, 1927, introduced by him in evidence, in which it is
certified that "the spouses Allison D. Gibbs and Eva
Johnson Gibbs are the owners in fee simple of the
conjugal lands therein described."

The descendible interest of Eva Johnson Gibbs in

the lands aforesaid was transmitted to her heirs by
virtue of inheritance and this transmission plainly
falls within the language of section 1536 of Article
XI of Chapter 40 of the Administrative Code which
levies a tax on inheritances. The record does not
show what the proper amount of the inheritance tax in
this case would be nor that the appellee (petitioner
below) in any way challenged the power of the
Government to levy an inheritance tax or the validity of
the statute under which the register of deeds refused to
issue a certificate of transfer reciting that the appellee is
the exclusive owner of the Philippine lands included in
the three certificates of title here involved.
CADALIN, vs. POEA (1994) - amiri decree, bahrain
FACTS: In 1984, Bienvenido M.. Cadalin, et.al, 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 (POEA) for money
claims arising from their recruitment by AIBC and
employment by BRII. It appears that the complainantsappellants allege that they were recruited by
respondent-appellant AIBC for its accredited foreign
principal, Brown & Root, on various dates from 1975 to
1983. They were all deployed at various projects
undertaken by Brown & Root in several countries in the
Middle East, such as Saudi Arabia, Libya, United Arab
Emirates and Bahrain, as well as in Southeast Asia, in
Indonesia and Malaysia 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 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

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In the State of Bahrain, where some of the individual
complainants were deployed, His Majesty Isa Bin
Salman Al Kaifa, Amir of Bahrain, issued his Amiri
Decree No. 23 on June 16, 1976, otherwise known as
the Labour Law for the Private Sector (Records, Vol.
18). This decree took effect on August 16, 1976. Some
of the provisions of Amiri Decree No. 23 that are
relevant to the claims of the complainants-appellants.
On January 30, 1989, the POEA Administrator rendered
his decision in POEA Case No. L-84-06-555 and the
other consolidated cases, which awarded the amount of
$824,652.44 in favor of only 324 complainants. AIBC
and BRII appealed the decision to the NLRC. NLRC
affirmed the decision of the POEA with modifications. It
held that the Amiri Decree No. 23 applied only to the
claimants, who worked in Bahrain, and set aside
awards of the POEA Administrator in favor of the
claimants, who worked elsewhere. It ruled that the
prescriptive period for the filing of the claims of the
complainants was three years, as provided in Article
291 of the Labor Code of the Philippines, and not ten
years as provided in Article 1144 of the Civil Code of
the Philippines nor one year as provided in the Amiri
Decree No. 23 of 1976.
ISSUE: 1. 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 2. Whether the claimants are entitled to
the benefits provided by Amiri Decree No. 23
HELD:
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. 10502931, 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(By
its own inherent force.) 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

8
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.
NLRC applied the Amiri Decree No. 23 of 1976, which
provides for greater benefits than those stipulated in the
overseas-employment contracts of the claimants. It was
of the belief that "where the laws of the host country are
more favorable and beneficial to the workers, then the
laws of the host country shall form part of the overseas
employment contract." It quoted with approval the
observation of the POEA Administrator that ". . . in labor
proceedings, all doubts in the implementation of the
provisions of the Labor Code and its implementing
regulations shall be resolved in favor of labor" (Rollo,
pp. 90-94). AIBC and BRII claim that NLRC acted
capriciously and whimsically when it refused to enforce
the overseas-employment contracts, which became the
law of the parties. They contend that the principle that a
law is deemed to be a part of a contract applies only to
provisions of Philippine law in relation to contracts
executed in the Philippines.
The overseas-employment contracts, which were
prepared by AIBC and BRII themselves, provided that
the laws of the host country became applicable to said
contracts if they offer terms and conditions more
favorable that those stipulated therein. While a part
thereof provides that the compensation to the employee
may be "adjusted downward so that the total
computation (thereunder) plus the non-waivable
benefits shall be equivalent to the compensation"
therein agreed, another part of the same provision
categorically states "that total remuneration and
benefits do not fall below that of the host country
regulation and custom."
Any ambiguity in the overseas-employment contracts
should be interpreted against AIBC and BRII, the
parties that drafted it (Eastern Shipping Lines, Inc. v.
Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).
Article 1377 of the Civil Code of the Philippines

provides: The interpretation of obscure words or

stipulations in a contract shall not favor the party who
caused the obscurity. Said rule of interpretation is
applicable to contracts of adhesion where there is
already a prepared form containing the stipulations of
the employment contract and the employees merely
"take it or leave it." The presumption is that there was
an imposition by one party against the other and that
the employees signed the contracts out of necessity
that reduced their bargaining power (Fieldmen's
Insurance Co., Inc. v. Songco, 25 SCRA 70 [1968]).
Applying the said legal precepts, we read the overseasemployment contracts in question as adopting the
provisions of the Amiri Decree No. 23 of 1976 as part
and parcel thereof.
VAN DORN vs. ROMILLO (1985) divorce, Nevada,
accounting & management of business as conjugal
property, no standing to sue as husband after
divorce
FACTS: Alice Van Dorn is a citizen of the Philippines
while Richard Upton is a citizen of the United States.
They were married in Hongkong in 1972 and they
established their residence in the Philippines. Alice and
Richard had two children. But then the parties were
divorced in Nevada, United States, in 1982. Alice Van
Dorn has re-married also in Nevada, this time to
Theodore Van Dorn. Upton filed suit against petitioner
in Civil Case No. 1075-P of the Regional Trial Court, in
Pasay City, stating that petitioner's business in Ermita,
Manila, (the Galleon Shop), is conjugal property of the
parties, and asking that petitioner be ordered to render
an accounting of that business, and that private
respondent be declared with right to manage the
conjugal property. Van Dorn moved to dismiss the case
on the ground that the cause of action is barred by
previous judgment in the divorce proceedings before
the Nevada Court wherein Upton 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 divorce obtain by the parties
in Nevada is valid
Ruling: Yes, the divorce obtain in Nevada is valid. The
Nevada District Court, which decreed the divorce, had

9
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 as No. 381 Bush Street, San
Francisco, California, 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. There can be no question as to
the validity of that Nevada divorce in any of the States
of the United States. 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.
Issue: whether or not the divorce is valid and binding in
this jurisdiction, the same being contrary to local law
and public policy.
Ruling: Yes, it is valid in the Philippines. It is true that
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 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. 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. 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. As he is
bound by the Decision of his own country's Court, which
validly exercised jurisdiction over him, and whose
decision he does not repudiate, he is estopped by his
own representation before said Court from asserting his
right over the alleged conjugal property. To maintain, as
private respondent does, that, under our laws, petitioner
has to be considered still married to private respondent
and still subject to a wife's obligations under Article 109,
et. seq. of the Civil Code cannot be just. The
Respondent should not continue to be one of her heirs
with possible rights to conjugal property. She should not
be discriminated against in her own country if the ends
of justice are to be served.

PILAPIL vs. IBAY-SOMERA (1989) no legal

standing to sue for adultery after divorce, capacity
determined at TIME OF FILING COMPLAINT
FACTS: In 1979, petitioner Imelda Manalaysay Pilapil,
a Filipino citizen, and private respondent Erich
Ekkehard Geiling, a German national, were married
before the Registrar of Births, Marriages and Deaths at
Friedensweiler in the Federal Republic of Germany. On
January 15, 1986, Division 20 of the Schoneberg Local
Court, Federal Republic of Germany, promulgated a
decree of divorce on the ground of failure of marriage of
the spouses. The records show that under German law
said court was locally and internationally competent for
the divorce proceeding and that the dissolution of said
marriage was legally founded on and authorized by the
applicable law of that foreign jurisdiction. 4 On January
27, 1986, private respondent filed two complaints for
adultery before CFI of Manila, alleging that while still
married to him, petitioner had affairs with two other
men. The petition is anchored on the main ground that
the court is without jurisdiction to try and decide the
charge of adultery which is a private offense that cannot
be prosecuted de oficio since the purported
complainant, a foreigner, does not qualify as an
offended spouse having obtained a final decree of
divorce under his national law prior to the filing of the
criminal complaint.
Is the divorce obtained by private respondent valid here
in the Philippines?
Does the private respondent have the legal standing to
sue for adultery?
HELD:
I. YES. The fact that private respondent obtained a
valid divorce in the Federal Republic of Germany is
admitted. Said divorce and its legal effects may be
recognized here in the Philippines insofar as private
respondent is concerned following the nationality
principle in our civil law on the matter of status of
persons. It is true that 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, which may be recognized
in the Philippines, provided they are valid according to
their national law. Thus, pursuant to his national law,
private respondent is no longer the husband of
petitioner.

10
II. NO. The status of the complainant vis--vis the
accused must be determined as of the time the
complainant was filed. Thus, the person who
initiates the adultery case must be the offended
spouse, and by this is meant that he is still married
to the accused spouse; at the time of the filing of the
complaint. The allegation of private respondent that he
could not have brought this case before the decree of
divorce for lack of knowledge, even if true, is of no legal
significance or consequence in this case. When said
respondent initiated the divorce proceeding, he
obviously knew that there would no longer be a family
nor marriage vows to protect once a dissolution of the
marriage is decreed. Therefore, it is indispensable that
the status and capacity of the complainant to
commence the action be definitely established and, as
already demonstrated, such status or capacity must
indubitably exist as of the time he initiates the action. It
would be absurd if his capacity to bring the action would
be determined by his status before or subsequent to the
commencement thereof, where such capacity or status
existed prior to but ceased before, or was acquired
subsequent to but did not exist at the time of, the
institution of the case. We would thereby have the
anomalous spectacle of a party bringing suit at the very
time when he is without the legal capacity to do so.

LLORENTE vs. CA divorce, will, new york, renvoi,

intrinsic validity of wills governed by foreign law
(national law of testator), extrinsic validity by phil.
Law (place of execution)
FACTS: Lorenzo N. Llorente, an enlisted serviceman
of the United States and husband of Paula Llorente
was admitted to United States citizenship. When
Lorenzo 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.
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
United States and filed for divorce. The Superior Court
of the State of California, for the County of San Diego
found all factual allegations to be true and issued an
interlocutory judgment of divorce. One year after, the
divorce decree became final.
In 1958, Lorenzo married Alicia F. Llorente in Manila.
Their (25) year union produced three children, Raul,
Luz and Beverly, all surnamed Llorente. In 1981,
Lorenzo executed a Last Will and Testament. In the
will, Lorenzo bequeathed all his property to Alicia and
their three children. In 1983, Lorenzo filed 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. Finding that the will
was duly executed, the trial court admitted the will to
probate. But 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. Without terminating
the testate proceedings, the trial court gave due course
to Paulas petition.
The Regional Trial Court decided that the divorce
decree granted to the late Lorenzo Llorente is void and
inapplicable in the Philippines, therefore the marriage
he contracted with Alicia Fortunato is likewise void.
This being so the petition of Alicia F. Llorente for the
issuance of letters testamentary was denied. She was
not entitled to receive any share from the estate even if
the will especially said so her relationship with Lorenzo
having gained the status of paramour which is under
Art. 739 (1). Also, the court declared the intrinsic
disposition of the will of Lorenzo Llorente as void and
declared Paula entitled as conjugal partner and entitled
to one-half of their conjugal properties, and as primary

11
compulsory heir, also entitled to one-third of the estate
and then one-third should go to the illegitimate children,
Raul, Luz and Beverly, all surname (sic) Llorente, for
them to partition in equal shares and also entitled to the
remaining free portion in equal shares. Alicia Llorente
appealed to the Court of Appeals, which affirmed the
lower courts decision with modification that Alicia is
declared as co-owner of whatever properties she and
the deceased may have acquired during the (25) years
of cohabitation.
Issue: Was the divorce valid?
Ruling: Yes. The fact that the late Lorenzo N. Llorente
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.
The Civil Code clearly provides:
Art. 15. Laws relating to family rights and duties, or to
the status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even
though living abroad.
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 succession, 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
wherein said property may be found. (emphasis ours)
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 Court of Appeals did not
admit the foreign law. The Court of Appeals and the
trial court 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. We
note that 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 United States. 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 trial court held that the will was intrinsically invalid
since it contained dispositions in favor of Alice, who in
the trial courts opinion was a mere paramour. The trial
court threw the will out, leaving Alice, and her two
children, Raul and Luz, with nothing. The Court of
Appeals also disregarded the will. It declared Alice
entitled to one half (1/2) of whatever property she and
Lorenzo acquired during their cohabitation, applying
Article 144 of the Civil Code of the Philippines. 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.
Validity of the Foreign Divorce
In Van Dorn v. Romillo, Jr. we held that 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. In the same case, the Court ruled that aliens
may obtain divorces abroad, provided they are valid
according to their national law. Citing this landmark
case, the Court held in Quita v. Court of Appeals, that
once proven that respondent was no longer a Filipino
citizen when he obtained the divorce from petitioner, the
ruling in Van Dorn would become applicable and
petitioner could very well lose her right to inherit from
him. In Pilapil v. Ibay-Somera, we recognized the
divorce obtained by the respondent in his country, the
Federal Republic of Germany. There, we stated that
divorce and its legal effects may be recognized in the

12
Philippines insofar as respondent is concerned in view
of the nationality principle in our civil law on the status
of persons. For failing to apply these doctrines, the
decision of the Court of Appeals must be reversed. We
hold that the divorce obtained by Lorenzo H. Llorente
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.
Validity of the Will
The Civil Code provides:
Art. 17. The forms and solemnities of contracts,
wills, and other public instruments shall be governed by
the laws of the country in which they are executed.
When the acts referred to are executed before the
diplomatic or consular officials of the Republic of the
Philippines in a foreign country, the solemnities
established by Philippine laws shall be observed in their
execution. (underscoring ours)
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. We do not wish to frustrate his
wishes, since he was a foreigner, 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. As a guide however, the trial
court should note that whatever public policy or good
customs may be involved in our system of legitimes,
Congress did not intend to extend the same to the
succession of foreign nationals. Congress specifically
left the amount of successional rights to the decedent's
national law. Court REMANDS the cases to the court of
origin for determination of the intrinsic validity of
Lorenzo N. Llorentes will and determination of the
parties successional rights allowing proof of foreign law
with instructions that the trial court shall proceed with all
deliberate dispatch to settle the estate of the deceased
within the framework of the Rules of Court.

GARCIA vs. RECIO (2001) Australia divorce, party

pleading foreign divorce decree, must prove: (1) the
foreign law allowing absolute divorce and (2) the
alleged divorce decree itself, absolute divorce vs
limited divorce, bigamy
FACTS: Respondent Recio (Filipino citizen at that time)
was married to Samson (Australian citizen) in Malabon
in 1987. They lived together as husband and wife in
Australia. In 1989, a decree of divorce was issued by
an Australian family court. In 1992, respondent became
an Australian citizen. Petitioner Garcia (Filipina) and
respondent were married in 1994 in Cabanatuan
City. In their application for a marriage license,
respondent was declared as "single" and "Filipino."
Starting 1995, petitioner and respondent lived
separately without prior judicial dissolution of their
marriage. In 1998, petitioner filed a Complaint for
Declaration of Nullity of Marriage in the court a quo, on
the ground of bigamy respondent allegedly had a
prior subsisting marriage at the time he married her in
1994. She claimed that she learned of respondent's
marriage to Samson only in 1997. Respondent averred
that, as far back as 1993, he had revealed to petitioner
his prior marriage and its subsequent dissolution. He
contended that his first marriage to an Australian citizen
had been validly dissolved by a divorce decree
obtained in Australian in 1989; thus, he was legally
capacitated to marry petitioner in 1994. In 1998 (while
the suit for declaration of nullity was pending)
respondent was able to secure a divorce decree from a
family court in Australia.
The trial court declared the marriage dissolved on the
ground that the divorce issued in Australia was valid
and recognized in the Philippines. Hence, this Petition.
HELD: 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. Philippine law does not provide
for absolute divorce; hence, our courts cannot grant
it. A marriage between two Filipinos cannot be

13
dissolved even by a divorce obtained abroad, because
of Articles 15 and 17 of the Civil Code. In mixed
marriages involving a Filipino and a foreigner, Article
26 of the Family Code allows the former to contract a
subsequent marriage in case the divorce is "validly
obtained abroad by the alien spouse capacitating him
or her to remarry." A divorce obtained abroad by a
couple, who are both aliens, may be recognized in the
Philippines, provided it is consistent with their
respective national laws. Before a foreign divorce
decree can be recognized by our courts, the party
pleading it must prove: (1) the foreign law allowing
absolute divorce and (2) the alleged divorce decree
itself.
Divorce as a Question of Fact
Before a foreign judgment is given presumptive
evidentiary value (authenticity and due execution), the
document (divorce decree) must first be presented and
admitted in evidence.30 A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best
evidence of a judgment is the judgment itself.
Under Sections 24 and 25 of Rule 132, on the other
hand, a writing or document may be proven as a
public or official record of a foreign country by
either (1) an official publication or (2) a copy thereof
attested by the officer having legal custody of the
document. If the record is not kept in the Philippines,
such copy must be (a) accompanied by a certificate
issued by the proper diplomatic or consular officer
in the Philippine foreign service stationed in the
foreign country in which the record is kept and (b)
authenticated by the seal of his office. Compliance
with the aforementioned rules on evidence must be
demonstrated.
Fortunately for respondent, when the 1989 divorce
decree was submitted in evidence, counsel for
petitioner objected, not to its admissibility, but only to
the fact that it had not been registered in the Local Civil
Registry (as required by Art. 52 of the Family
Code). Petitioner's failure to object properly rendered
the divorce decree admissible as a written act of the
Family Court of Australia.
Compliance with Articles 11, 13 and 52 (registration
requirements) of the Family Code (as contended by
petitioner) is not necessary; respondent was no longer

bound by Philippine personal laws after he acquired

Australian citizenship in 1992. By becoming an
Australian (naturalization), respondent severed his
allegiance to the Philippines and the vinculum juris that
had tied him to Philippine personal laws. Since the
divorce was a defense (in action for Declaration of
Nullity of Marriage on the ground of bigamy) raised by
respondent, the burden of proving the pertinent
Australian law validating it falls squarely upon him. Our
courts cannot take judicial notice of foreign laws. Like
any other facts, they must be alleged and proved.
Respondent's Legal Capacity to Remarry
Divorces are of different types. The two basic ones are
(1) absolute divorce or a vinculo matrimonii and (2)
limited divorce or a mensa et thoro. The first kind
terminates the marriage, while the second suspends
it and leaves the bond in full force. There is no
showing in the case at bar which type of divorce was
procured by respondent. Respondent 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."
This quotation bolsters our contention that the divorce
obtained by respondent may have been restricted.
It did not absolutely establish his legal capacity to
remarry according to his national law. Hence, we
find no basis for the ruling of the trial court, which
erroneously assumed that the Australian divorce ipso
facto restored respondent's capacity to remarry despite
the paucity of evidence on this matter.
Significance of the Certificate of Legal Capacity (as
required by Article 21 of the Family Code)
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 respondent, had he duly presented it in
court. A duly authenticated and admitted certificate is

14
prima facie evidence of legal capacity to marry on the
part of the alien applicant for a marriage license.
There is absolutely no evidence that proves
respondent's legal capacity to marry petitioner. We
cannot conclude that respondent, who was then a
naturalized Australian citizen, was legally capacitated to
marry petitioner in 1994. Court a quo erred in finding
that the divorce decree ipso facto clothed respondent
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 grant petitioner's prayer to declare her
marriage to respondent null and void on the ground of
bigamy. After all, it may turn out that under Australian
law, he was really capacitated to marry petitioner as a
direct result of the divorce decree. Hence, we believe
that the most judicious course is to REMAND this case
to the trial court to receive evidence, if any, which show
petitioner's legal capacity to marry petitioner. Failing in
that, then the court a quo may declare a nullity of the
parties' marriage on the ground of bigamy, there being
already in evidence two existing marriage certificates,
which were both obtained in the Philippines, one in
Malabon, Metro Manila dated 1987 and the other, in
Cabanatuan City dated 1994.
REPUBLIC vs. IYOY (2005) - Fely herself admitted in
her Answer filed before the RTC: obtained divorce
in 1984, she married her American husband in 1985,
American citizen ONLY since 1988. At the time she
filed for divorce, Fely was still a Filipino citizen,
pursuant to the nationality principle embodied in
Article 15 of the Civil Code, she was still bound by
Philippine laws
FACTS: The proceedings before the RTC commenced
with the filing of a Complaint for declaration of nullity of
marriage by respondent Crasus in 1997. According to
the said Complaint, respondent Crasus married Fely in
1961 in Cebu City. In 1984, Fely left the Philippines for
the United States, leaving all of their five children, to the
care of respondent Crasus. Sometime in 1985,
respondent Crasus learned, through the letters sent by
Fely to their children, that Fely got married to an
American, with whom she eventually had a child. At the
time the Complaint was filed, it had been 13 years since

Fely left and abandoned respondent Crasus, and there

was no more possibility of reconciliation between them.
Respondent Crasus finally alleged in his Complaint that
Felys acts brought danger and dishonor to the family,
and clearly demonstrated her psychological incapacity
to perform the essential obligations of marriage. Such
incapacity, being incurable and continuing, constitutes a
ground for declaration of nullity of marriage under
Article 36, in relation to Articles 68, 70, and 72, of the
Family Code. Not long after, RTC promulgated its
Judgment declaring the marriage of respondent Crasus
and Fely null and void ab initio.
The RTC rendered the decision rationating, to wit:
Article 26 of the Family Code provides: Art. 26. All
marriages solemnized outside the Philippines in
accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited
under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
WHERE A MARRIAGE BETWEEN A FILIPINO
CITIZEN AND A FOREIGNER IS VALIDLY
CELEBRATED AND A DIVORCE IS THEREAFTER
VALIDLY OBTAINED ABROAD BY THE ALIEN
SPOUSE CAPACITATING HIM OR HER TO
REMARRY, THE FILIPINO SPOUSE SHALL LIKEWISE
HAVE CAPACITY TO REMARRY UNDER PHILIPPINE
LAW. The rationale behind the second paragraph of
the above-quoted provision is to avoid the absurd and
unjust situation of a Filipino citizen still being married to
his or her alien spouse, although the latter is no longer
married to the Filipino spouse because he or she has
obtained a divorce abroad. In the case at bench, the
defendant has undoubtedly acquired her American
husbands citizenship and thus has become an alien as
well. This Court cannot see why the benefits of Art. 26
aforequoted can not be extended to a Filipino citizen
whose spouse eventually embraces another citizenship
and thus becomes herself an alien. CA affirmed the
decision of the RTC.
Issue: Whether or not par. 2 of Art. 26 of the Family
Code is finds application to the case at bar.
HELD: As it is worded, Article 26, paragraph 2, refers to
a special situation wherein one of the couple getting
married is a Filipino citizen and the other a foreigner at
the time the marriage was celebrated. By its plain and
literal interpretation, the said provision cannot be
applied to the case of respondent Crasus and his

15
wife Fely because at the time Fely obtained her
divorce, she was still a Filipino citizen. Although the
exact date was not established, Fely herself admitted
in her Answer filed before the RTC that she
obtained a divorce from respondent Crasus
sometime after she left for the United States in
1984, after which she married her American
husband in 1985. In the same Answer, she alleged
that she had been an American citizen since 1988.
At the time she filed for divorce, Fely was still a
Filipino citizen, and pursuant to the nationality
principle embodied in Article 15 of the Civil Code of
the Philippines, she was still bound by Philippine
laws on family rights and duties, status, condition, and
legal capacity, even when she was already living
abroad. Philippine laws, then and even until now, do
not allow and recognize divorce between Filipino
spouses. Thus, Fely could not have validly obtained a
divorce from respondent Crasus.

Paragraph 2 of Article 26 to a marriage between two

Filipino citizens where one later acquired alien
citizenship, obtained a divorce decree, and remarried
while in the U.S.A. The interests of the parties are also
adverse, as petitioner representing the State asserts its
duty to protect the institution of marriage while
respondent, a private citizen, insists on a declaration of
his capacity to remarry.

REPUBLIC vs. ORBECIDO - Paragraph 2 of Article

26 should be interpreted to include cases involving
parties who, at the time of the celebration of the
marriage were Filipino citizens, but later on, one of
them becomes naturalized as a foreign citizen and
obtains a divorce decree. The Filipino spouse
should likewise be allowed to remarry as if the
other party were a foreigner at the time of the
solemnization of the marriage.
FACTS: In 1981, Cipriano Orbecido III married Lady
Myros M. Villanueva in Ozamis City. In 1986,
Ciprianos wife left for the United States. A few years
later, Cipriano discovered that his wife had been
naturalized as an American citizen. Sometime in 2000,
Cipriano learned from his son that his wife had obtained
a divorce decree and then married a certain Innocent
Stanley. Cipriano thereafter filed with the trial court a
petition for authority to remarry invoking Paragraph 2 of
Article 26 of the Family Code. No opposition was filed.
Finding merit in the petition, the court granted the
same. The Republic, herein petitioner, through the
(OSG), sought reconsideration but it was denied. The
OSG contends that Paragraph 2 of Article 26 of the
Family Code is not applicable to the instant case
because it only applies to a valid mixed marriage; that
is, a marriage celebrated between a Filipino citizen and
an alien. Furthermore, the OSG argues there is no law
that governs respondents situation. The OSG posits
that this is a matter of legislation and not of judicial
determination. This case concerns the applicability of

HELD: ART. 26. All marriages solemnized outside the

Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there as
such, shall also be valid in this country, except those
prohibited under Articles 35(1), (4), (5) and (6), 36, 37
and 38. Where a marriage between a Filipino citizen
and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law.
(Emphasis supplied)

Issue: Does Paragraph 2 of Article 26 of the Family

Code apply to the case of respondent? Pero ang issue
nga related sa atong subject kay murag related sa how
can a foreign divorce decree be recognized in our
courts? Para conflict2x of laws kunuhay. Given a valid
marriage between two Filipino citizens, where one party
is later naturalized as a foreign citizen and obtains a
valid divorce decree capacitating him or her to remarry,
can the Filipino spouse likewise remarry under
Philippine law?

The instant case is one where at the time the

marriage was solemnized, the parties were two
Filipino citizens, but later on, the wife was
naturalized as an American citizen and
subsequently obtained a divorce granting her
capacity to remarry, and indeed she remarried an
American citizen while residing in the U.S.A.
Records of the proceedings of the Family Code
deliberations showed that the intent of Paragraph 2 of
Article 26, according to Judge Sempio-Dy, is to avoid
the absurd situation where the Filipino spouse
remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the
Filipino spouse. We hold that Paragraph 2 of Article
26 should be interpreted to include cases involving
parties who, at the time of the celebration of the
marriage were Filipino citizens, but later on, one of
them becomes naturalized as a foreign citizen and

16
obtains a divorce decree. The Filipino spouse
should likewise be allowed to remarry as if the
other party were a foreigner at the time of the
solemnization of the marriage. To rule otherwise
would be to sanction absurdity and injustice. Where the
interpretation of a statute according to its exact and
literal import would lead to mischievous results or
contravene the clear purpose of the legislature, it
should be construed according to its spirit and reason,
disregarding as far as necessary the letter of the law. A
statute may therefore be extended to cases not within
the literal meaning of its terms, so long as they come
within its spirit or intent.
In view of the foregoing, we state the twin elements
for the application of Paragraph 2 of Article 26 as
follows:
1. There is a valid marriage that has been
celebrated between a Filipino citizen and a
foreigner; and
2. A valid divorce is obtained abroad by the
alien spouse capacitating him or her to
remarry.
The reckoning point is not the citizenship of the
parties at the time of the celebration of the marriage,
but their citizenship at the time a valid divorce is
obtained abroad by the alien spouse capacitating the
latter to remarry. In this case, when Ciprianos wife
was naturalized as an American citizen, there was still a
valid marriage that has been celebrated between her
and Cipriano. As fate would have it, the naturalized
alien wife subsequently obtained a valid divorce
capacitating her to remarry. Clearly, the twin requisites
for the application of Paragraph 2 of Article 26 are both
present in this case. Thus Cipriano, the divorced
Filipino spouse, should be allowed to remarry.
However, we note that the records are bereft of
competent evidence duly submitted by respondent
concerning the divorce decree and the naturalization of
respondents wife. It is settled rule that one who
alleges a fact has the burden of proving it and mere
allegation is not evidence. Accordingly, for his plea to
prosper, respondent herein must prove his
allegation that his wife was naturalized as an
American citizen. Likewise, before a foreign
divorce decree can be recognized by our own
courts, the party pleading it must prove the divorce
as a fact and demonstrate its conformity to the

foreign law allowing it. Such foreign law must also

be proved as our courts cannot take judicial notice
of foreign laws. Like any other fact, such laws must
be alleged and proved. Furthermore, respondent
must also show that the divorce decree allows his
former wife to remarry as specifically required in
Article 26. Otherwise, there would be no evidence
sufficient to declare that he is capacitated to enter
into another marriage.
PERKINS vs. DIZON (1939)
FACTS: On July 6, 1938, respondent, Eugene Arthur
Perkins, instituted an action in the Court of First
Instance of Manila against the Benguet Consolidated
Mining Company for dividends amounting to
P71,379.90 on 52,874 shares of stock registered in his
name, payment of which was being withheld by the
company; and, for the recognition of his right to the
control and disposal of said shares, to the exclusion of
all others. To the complaint, the company filed its
answer alleging, by way of defense, that the withholding
of such dividends and the non-recognition of plaintiff's
right to the disposal and control of the shares were due
to certain demands made with respect to said shares by
the petitioner herein, Idonah Slade Perkins, and by one
George H. Engelhard. The answer prays that the
adverse claimants be made parties to the action and
served with notice thereof by publication, and that
thereafter all such parties be required to interplead and
settle the rights among themselves. On September 5,
1938, the trial court ordered respondent Eugene Arthur
Perkins to include in his complaint as parties defendant
petitioner, Idonah Slade Perkins, and George H.
Engelhard. The complaint was accordingly amended
and in addition to the relief prayed for in the original
complaint, respondent Perkins prayed that petitioner
Idonah Slade Perkins and George Engelhard be
adjudged without interest in the shares of stock in
question and excluded from any claim they assert
thereon. Thereafter, summons by publication were
served upon the non-resident defendants, Idonah Slade
Perkins and George H. Engelhard, pursuant to the
order of the trial court. On December 9, 1938,
Engelhard filed his answer to the amended complaint,
and on December 10, 1938, petitioner 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. Petitioner's objection,
motion and demurrer having been overruled as well as

17
her motion for reconsideration of the order of denial,
she now brought the present petition for certiorari,
praying that the summons by publication issued against
her be declared null and void, and that, with respect to
her, respondent Judge be permanently prohibited from
taking any action on the
case.chanroblesvirtuallawlibrary chanrobles virtual law
library
The controlling issue here involved is whether or not the
Court of First Instance of Manila has acquired
jurisdiction over the person of the present petitioner as
a non-resident defendant, or, notwithstanding the want
of such jurisdiction, whether or not said court may
validly try the case. The parties have filed lengthy
memorandums relying on numerous authorities, but the
principles governing the question are well settled in this
jurisdiction.chanroblesvirtuallawlibrary chanrobles
virtual law library
HELD: Section 398 of our 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.chanroblesvirtuallawlibrary chanrobles
virtual law library
We have fully explained the meaning of this provision in
El Banco Espaol Filipino vs. Palanca, 37 Phil., 921,
wherein we laid down the following rules:
(1) In order that the court may validly try a
case, it must have jurisdiction over the subjectmatter and over the persons of the parties.
Jurisdiction over the subject-matter is acquired
by concession of the sovereign authority which
organizes a court and determines the nature
and extent of its powers in general and thus
fixes its jurisdiction with reference to actions
which it may entertain and the relief it may
grant. Jurisdiction over the persons of the
parties is acquired by their voluntary
appearance in court and their submission to its
authority, or by the coercive power of legal
process exerted over their
persons.chanroblesvirtuallawlibrary chanrobles
virtual law library

(2) When the defendant is a non-resident and

refuses to appear voluntary, the court cannot
acquire jurisdiction over his person even if the
summons be served by publication, for he is
beyond the reach of judicial process. No
tribunal established by one State can extend its
process beyond its territory so as to subject to
its decisions either persons or property located
in another State. "There are many expressions
in the American reports from which it might be
inferred that the court acquires personal
jurisdiction over the person of the defendant by
publication and notice; but such is not the case.
In truth, the proposition that jurisdiction over the
person of a non-resident cannot be acquired by
publication and notice was never clearly
understood even in the American courts until
after the decision had been rendered by the
Supreme Court of the United States in the
leading case of Pennoyer v. Neff (95 U.S., 714;
24 Law. ed., 565). In the light of that decisions
which have subsequently been rendered in that
and other courts, the proposition that
jurisdiction over the person cannot be thus
acquired by publication and notice is no longer
open to question; and it is now fully established
that a personal judgment upon constructive or
substituted service against a non-resident who
does not appear is wholly invalid. This doctrine
applies to all kinds of constructive or
substituted process, including service by
publication and personal service outside of the
jurisdiction in which the judgment is rendered;
and the only exception seems to be found in
the case where the non-resident defendant has
expressly or impliedly consented to the mode
of service. (Note to Raher vs. Raher, 35 L. R.
A. [N. S.], 292; see also L.R.A. 585; 35 L.R.A.
[N.S.], 312.) chanrobles virtual law library
(3) The general rule, therefore, is that a suit
against a non-resident cannot be entertained
by a Philippine court. Where, however, the
action is in rem or quasi in rem in connection
with property located in the Philippines, the
court acquires jurisdiction over the res, and its
jurisdiction over the person of the non-resident
is non-essential. In order that the court may
exercise power over the res, it is not necessary
that the court should take actual custody of the
property, potential custody thereof being

18
sufficient. There is potential custody when, from
the nature of the action brought, the power of
the court over the property is impliedly
recognized by law. "An illustration of what we
term potential jurisdiction over the res, is found
in the proceeding to register the title of land
under our system for the registration of land.
Here the court, without taking actual physical
control over the property , assumes, at the
instance of some person claiming to be owner,
to exercise a jurisdiction in rem over the
property and to adjudicate the title in favor of
the petitioner against all the world." chanrobles
virtual law library
(4) As before stated, in an action in rem or
quasi in rem against a non-resident defendant,
jurisdiction over his person is non-essential,
and if the law requires in such case that the
summons upon the defendant be served by
publication, it is merely to satisfy the
constitutional requirement of due process. If
any be said, in this connection, that "may
reported cases can be cited in which it is
assumed that the question of the sufficiency of
publication or notice in the case of this kind is a
question affecting the jurisdiction of the court,
and the court is sometimes said to acquire
jurisdiction by virtue of the publication. This
phraseology was undoubtedly originally
adopted by the court because of the analogy
between service by publication and personal
service of process upon the defendant; and, as
has already been suggested, prior to the
decision of Pennoyer v. Neff (supra), the
difference between the legal effects of the two
forms of service was obscure. It is accordingly
not surprising that the modes of expression
which had already been moulded into legal
tradition before that case was decided have
been brought down to the present day. But it is
clear that the legal principle here involved is not
affected by the peculiar languages in which the
courts have expounded their ideas."
The reason for the rule that Philippine courts cannot
acquire jurisdiction over the person of a non-resident,
as laid down by the Supreme Court of the United States
in Pennoyer v. Neff, supra, may be found in a
recognized principle of public law to the effect that "no
State can exercise direct jurisdiction and authority over
persons or property without its territory. Story, Confl. L.,

ch. 2; Wheat, Int. L., pt. 2, ch. 2. The several States are
of equal dignity and authority, and the independence of
one implies the exclusion of power from all others. And
so it is laid down by jurists, as an elementary principle,
that the laws of one State have no operation outside of
its territory, except so far as is allowed by comity; and
that no tribunal established by it can extend its process
beyond that territory so as to subject either persons or
property to its decisions. "Any exertion of authority of
this sort beyond this limit," says Story, "is a mere nullity,
and incapable of binding such persons or property in
any other tribunals." Story, Confl. L., sec. 539."
(Pennoyer v. Neff, 95 U.S., 714; 24 Law. ed., 565, 568569.).chanroblesvirtuallawlibrary chanrobles virtual law
library
When, however, the action relates to property located in
the Philippines, the Philippine courts may validly try the
case, upon the principle that a "State, through its
tribunals, may subject property situated within its limits
owned by non-residents to the payment of the demand
of its own citizens against them; and the exercise of this
jurisdiction in no respect infringes upon the sovereignty
of the State where the owners are domiciled. Every
State owes protection to its citizens; and, when nonresidents deal with them, it is a legitimate and just
exercise of authority to hold and appropriate any
property owned by such non-residents to satisfy the
claims of its citizens. It is in virtue of the State's
jurisdiction over the property of the non-resident
situated within its limits that its tribunals can inquire into
the non-resident's obligations to its own citizens, and
the inquiry can then be carried only to the extent
necessary to control the disposition of the property. If
the non-resident has no property in the State, there is
nothing upon which the tribunals can adjudicate."
(Pennoyer v. Neff, supra.) chanrobles virtual law library
In the instant case, there can be no question that the
action brought by Eugene Arthur Perkins in his
amended complaint against the petitioner, Idonah Slade
Perkins, seeks to exclude her from any interest in a
property located in the Philippines. That property
consists in certain shares of stocks of the Benguet
Consolidated Mining Company, a sociedad anonima,
organized in the Philippines under the provisions of the
Spanish Code of Commerce, with its principal office in
the City of Manila and which conducts its mining
activities therein. 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. (Fletcher

19
Cyclopedia Corporations, Permanent ed. Vol. 11, p. 95).
Under these circumstances, we hold that the action
thus brought is quasi in rem, for while the judgement
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." (50 C.J., p 503). As held by the
Supreme Court of the United States in Pennoyer v. Neff
(supra);
It is true that, in a strict sense, a proceeding in
rem is one taken directly against property, and
has for its object the disposition of the property,
without reference to the title of individual
claimants; but , in a large and more general
sense, the terms are applied to actions
between parties, where the direct object is to
reach and dispose of property owned by them,
or of some interest therein.
The action being in quasi in rem, The Court of First
Instance of Manila has jurisdiction over the person of
the non-resident. In order to satisfy the constitutional
requirement of due process, summons has been served
upon her by publication. There is no question as to the
adequacy of publication made nor as to the mailing of
the order of publication to the petitioner's last known
place of residence in the United States. But, of course,
the action being quasi in rem and notice having be
made by publication, the relief that may be granted by
the Philippine court must be confined to the res, it
having no jurisdiction to render a personal judgment
against the non-resident. In the amended complaint
filed by Eugene Arthur Perkins, no money judgment or
other relief in personam is prayed for against the
petitioner. The only relief sought therein is that she be
declared to be without any interest in the shares in
controversy and that she be excluded from any claim
thereto.chanroblesvirtuallawlibrary chanrobles virtual
law library
Petitioner contends that the proceeding instituted
against her is one of interpleading and is therefore an
action in personam. Section 120 of our Code of Civil
Procedure 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.

Here, The Benguet Consolidated Mining Company, in
its answer to the complaint filed by Eugene Arthur
Perkins, averred that in connection with the shares of
stock in question, conflicting claims were being made
upon it by said plaintiff, Eugene Arthur Perkins, his wife
Idonah Slade Perkins, and one named George H.
Engelhard, and prayed that these last two be made
parties to the action and served with summons by
publication, so that the three claimants may litigate their
conflicting claims and settle their rights among
themselves. 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
parties defendant. The plaintiff did so, praying that the
new defendants thus joined be excluded fro any interest
in the shares in question, and it is upon this amended
complaint that the court ordered the service of the
summons by publication. It is therefore, clear that 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.chanroblesvirtuallawlibrary chanrobles virtual
law library
Had not the complaint been amended, including the
herein petitioner as an additional defendant, and had
the court, upon the filing of the answer of the Benguet
Consolidated Mining Company, issued an order under
section 120 of the Code of Civil Procedure, calling the
conflicting claimants into court and compelling them to
interplead with one another, such order could not
perhaps have validly been served by publication or
otherwise, upon the non-resident Idonah Slade Perkins,
for then the proceeding would be purely one of
interpleading. Such proceeding is a personal action, for
it merely seeks to call conflicting claimants into court so
that they may interplead and litigate their several claims
among themselves, and no specific relief is prayed for
against them, as the interpleader have appeared in
court, one of them pleads ownership of the personal
property located in the Philippines and seeks to exclude
a non-resident claimant from any interest therein, is a
question which we do not decide not. Suffice it to say
that here the service of the summons by publication
was ordered by the lower court by virtue of an action
quasi in rem against the non-resident
defendant.chanroblesvirtuallawlibrary chanrobles virtual
law library

20
Respondents contend that, as the petitioner in the lower
court has pleaded over the subject-matter, she has
submitted herself to its jurisdiction. We have noticed,
however, that these pleas have been made not as
independent grounds for relief, but merely as additional
arguments in support of her contention that the lower
court had no jurisdiction over the person. In other
words, she claimed that the lower court had no
jurisdiction over her person not only because she is a
non-resident, but also because the court had no
jurisdiction over the subject-matter of the action and
that the issues therein involved have already been
decided by the New York court and are being relitigated
in the California court. Although this argument is
obviously erroneous, as neither jurisdiction over the
subject-matter nor res adjudicata nor lis pendens has
anything to do with the question of jurisdiction over her
person, we believe and so hold that the petitioner has
not, by such erroneous argument, submitted herself to
the jurisdiction of the court. Voluntary appearance
cannot be implied from either a mistaken or superflous
reasoning but from the nature of the relief prayed for.
PHILSEC INVESTMENT CORP. vs. CA (1997) - effect
of a judgment of a tribunal of a foreign country: (a)
In case of a judgment upon a specific thing, the
judgment is conclusive upon the title to the thing;
(b) In case of a judgment against a person, the
judgment is presumptive evidence of a right as
between the parties and their successors in interest
by a subsequent title; but the judgment 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; extraterritorial service
provides that service of summons on a nonresident 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

FACTS: In order to facilitate the payment of the loans

which the original debtor Ventura Ducat obtained from
AYALA and Philsec, private respondent 1488, Inc.
assumed Ducats obligation under an Agreement, dated
1983, whereby 1488, Inc. (assumed Ducats obligation)
executed a Warranty Deed with Vendors Lien by which
it sold to petitioner Athona Holdings a parcel of land in

Harris County, Texas, U.S.A., for US$2,807,209.02,

while PHILSEC and AYALA extended a loan to
ATHONA in the amount of US$2,500,000.00 as initial
payment of the purchase price. The balance of
US$307,209.02 was to be paid by means of a
promissory note executed by ATHONA in favor of 1488,
Inc. As ATHONA failed to pay the interest on the
balance of US$307,209.02, the entire amount covered
by the note became due and demandable. Accordingly,
in 1985, private respondent 1488, Inc. sued
petitioners PHILSEC, AYALA, and ATHONA in the
United States for payment of the balance of
US$307,209.02 and for damages for breach of contract
and for fraud allegedly perpetrated by petitioners in
misrepresenting the marketability of the shares of stock
delivered to 1488, Inc. under the Agreement. The case
was docketed as Case No. 85-57746.
ATHONA filed an answer with counterclaim, impleading
private respondents herein as counterdefendants, for
allegedly conspiring in selling the property at a price
over its market value. ATHONA sought the recovery of
damages and excess payment allegedly made to 1488,
Inc. and, in the alternative, the rescission of sale of the
property. For their part, PHILSEC and AYALA filed a
motion to dismiss on the ground of lack of jurisdiction
over their person, but, as their motion was denied.
In 1987, while Civil Case No. H-86-440 was pending
in the United States, petitioners PHILSEC and
ATHONA filed a complaint For Sum of Money with
Damages and Writ of Preliminary Attachment
against private respondents in the Regional Trial
Court of Makati, where it was docketed as Civil
Case No. 16563. The complaint reiterated the
allegation of petitioners in their respective
counterclaims in Civil Action No. H-86-440 of the United
States District Court of Southern Texas that private
respondents committed fraud by selling the property at
a price 400 percent more than its true value of
US$800,000.00. Petitioners claimed that, as a result of
private respondents fraudulent misrepresentations,
ATHONA, PHILSEC, and AYALA were induced to enter
into the Agreement and to purchase the Houston
property. Petitioners prayed that private respondents be
ordered to return to ATHONA the excess payment of
US$1,700,000.00 and to pay damages. On April 20,
1987, the trial court issued a writ of preliminary
attachment against the real and personal properties of
private respondents.

21
Private respondent Ducat moved to dismiss Civil Case
No. 16563 on the grounds of (1) litis pendentia, vis-avis Civil Action No. H-86-440 filed by 1488, Inc. and
Daic in the U.S., (2) forum non conveniens. On the
other hand, private respondents 1488, Inc. and its
president Daic filed a joint Special Appearance and
Qualified Motion to Dismiss, contending that the action
being in personam, 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, and Daic, who is a non-resident
alien.
trial court granted Ducats motion to dismiss, stating
that the evidentiary requirements of 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, even as it
noted that Ducat was not a party in the U.S. case. The
trial court 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
trial court subsequently lifted the writ of attachment it
had earlier issued against the shares of stocks of 1488,
Inc. and Daic. Court of Appeals affirmed the dismissal of
Civil Case No. 16563 against Ducat, 1488, Inc., and
Daic on the ground of litis pendentia.
Issues:
1. Whether or not the doctrine of pendency of
another action between the same parties for the
same cause (litis pendentia) relied upon by the
court of appeals in affirming the trial courts
dismissal of the civil action is applicable.
2. Whether or not the principle of forum non
conveniens also relied upon by the court of
appeals in affirming the dismissal by the trial court
of the civil action is likewise applicable.
HELD: While the present case was pending in the
Court of Appeals, the United States District Court
for the Southern District of Texas rendered
judgment in the case before it. The judgment,
which was in favor of private respondents, was
affirmed on appeal by the Circuit Court of Appeals.
Thus, the principal issue to be resolved in this
case is whether Civil Case No. 16536 is barred by
the judgment of the U.S. court. Private

respondents contend that for a foreign judgment to

be pleaded as res judicata, a judgment admitting
the foreign decision is not necessary. On the other
hand, petitioners argue that the 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.
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. Rule 39, 50
provides:
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
thing;
(b) In case of a judgment against a person, the
judgment is presumptive evidence of a right as
between the parties and their successors in interest
by a subsequent title; but the judgment 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.
Thus, in the case of General Corporation of the
Philippines v. Union Insurance Society of Canton,
Ltd.,which private respondents invoke for claiming
conclusive effect for the foreign judgment in their favor,
the foreign judgment was considered res judicata
because this Court found from the evidence as well as
from appellants own pleadings that the foreign court

22
did not make a clear mistake of law or fact or that its
judgment was void for want of jurisdiction or because of
fraud or collusion by the defendants. Trial had been
previously held in the lower court and only afterward
was a decision rendered, declaring the judgment of the
Supreme Court of the State of Washington to have the
effect of res judicata in the case before the lower court.
In the same vein, in Philippine International Shipping
Corp. v. Court of Appeals, this Court held that the
foreign judgment was valid and enforceable in the
Philippines there being no showing that it was vitiated
by want of notice to the party, collusion, fraud or clear
mistake of law or fact. The prima facie presumption
under the Rule had not been rebutted.
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. As
the trial court stated in its disputed order dated March 9,
1988:
On the plaintiffs claim in its Opposition that the
causes of action of this case and the pending
case in the United States are not identical,
precisely the Order of January 26, 1988 never
found that the causes of action of this case and
the case pending before the USA Court, were
identical. (emphasis added) It was error
therefore for the Court of Appeals to summarily
rule that petitioners action is barred by the
principle of res judicata. Petitioners in fact
questioned the jurisdiction of the U.S. court
over their persons, but their claim was brushed
aside by both the trial court and the Court of
Appeals.
Moreover, the Court notes that on April 22, 1992, 1488,
Inc. and Daic filed a petition for the enforcement of
judgment in the Regional Trial Court of Makati, where it
was docketed as Civil Case No. 92-1070 and assigned
to Branch 134, although the proceedings were

suspended because of the pendency of this case. To

sustain the appellate courts ruling that the foreign
judgment constitutes res judicata and is a bar to the
claim of petitioners would effectively preclude
petitioners from repelling the judgment in the case for
enforcement. An absurdity could then arise: a foreign
judgment is not subject to challenge by the plaintiff
against whom it is invoked, if it is pleaded to resist a
claim as in this case, but it may be opposed by the
defendant if the foreign judgment is sought to be
enforced against him in a separate proceeding. This is
plainly untenable. It has been held therefore that: [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 Hongkong
judgment under Section 50 (b), Rule 39 of the Rules of
Court in order that the defendant, private respondent
herein, may present evidence of lack of jurisdiction,
notice, collusion, fraud or clear mistake of fact and
law, if applicable. Accordingly, to insure the orderly
administration of justice, this case and Civil Case No.
92-1070 (petition for the enforcement of judgment)
should be consolidated. After all, the two have been
filed in the Regional Trial Court of Makati, albeit in
different salas, this case being assigned to Branch 56
(Judge Gorospe), while Civil Case No. 92-1070 is
pending in Branch 134 of Judge Capulong. In such
proceedings, petitioners should have the burden of
impeaching the foreign judgment and only in the event
they succeed in doing so may they proceed with their
action against private respondents.
Second. Nor is the trial courts refusal to take
cognizance of the case 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.i
[16]
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

23
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,
and that it was the extinguishment of the latters debt
which was the object of the transaction under litigation.
The trial court arbitrarily dismissed the case even
after finding that Ducat was not a party in the U.S. case.
Third. It was error we think 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.ii[18] It is not disputed that the properties,
real and personal, of the private respondents had been
attached prior to service of summons under the Order
of the trial court. WHEREFORE, the decision of the
Court of Appeals is REVERSED and Civil Case No.
16563 (Sum of Money with Damages and Writ of
Preliminary Attachment - 1987) is REMANDED to the
Regional Trial Court of Makati for consolidation with
Civil Case No. 92-1070 and for further proceedings in
accordance with this decision.
RAYTHEON INTERNATIONAL vs. ROUZIE (2008) 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; 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
FACTS: Sometime in 1990, Brand Marine Services,
Inc. (BMSI), a corporation duly organized and existing
under the laws of the State of Connecticut, United
States of America, and respondent Stockton W. Rouzie,
Jr., an American citizen, entered into a contract
whereby BMSI hired respondent 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. In 1992, respondent

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. In
1994, respondent filed before 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. In 1995, Labor Arbiter Pablo C.
Espiritu, Jr. rendered judgment ordering BMSI and
RUST to pay respondents money claims. NLRC
reversed the decision of the Labor Arbiter and
dismissed respondents complaint on the ground of lack
of jurisdiction. Respondent elevated the case to this
Court but was dismissed. The Resolution became final
and executory in 1998.
In 1999, respondent, then a resident of La Union,
instituted an action for damages before the (RTC). The
Complaint, docketed as Civil Case No. 1192-BG,
named as defendants herein petitioner 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 respondent to
negotiate the sale of services in government projects
and that respondent 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 petitioner itself had
combined and functioned as one company.
In its Answer, petitioner alleged that contrary to
respondents claim, it was a foreign corporation duly
licensed to do business in the Philippines and denied
entering into any arrangement with respondent or
paying the latter any sum of money. Petitioner also
denied combining with BMSI and RUST for the purpose
of assuming the alleged obligation of the said
companies. Petitioner 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. Petitioner 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.

24
WHETHER OR NOT THE COURT OF APPEALS
ERRED IN REFUSING TO DISMISS THE COMPLAINT
ON THE GROUND OF FORUM NON CONVENIENS.
HELD: The instant petition lacks merit. Petitioner mainly
asserts that the written contract between respondent
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. Petitioner 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
three 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.
On the matter of jurisdiction over a conflicts-oflaws 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.

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. 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.
MANILA HOTEL CORP. vs. NLRC (2000) - Under the
rule of forum non conveniens, a Philippine court or
agency may assume jurisdiction over the case if it
chooses to do so provided: (1) that the Philippine
court is one to which the parties may conveniently
resort to; (2) that the Philippine court is in a position
to make an intelligent decision as to the law and the
facts; and (3) that the Philippine court has or is likely
to have power to enforce its decision.37
FACTS: Private respondent Marcelo Santos was an
overseas worker employed as a printer at the Mazoon
Printing Press, Sultanate of Oman. Subsequently, he
was directly hired by the Palace Hotel, Beijing, People's
Republic of China and later terminated due to
retrenchment. Petitioners are the Manila Hotel Corp.
(MHC) and the Manila Hotel International Co. Ltd.
(MHICL). MHICL is a corporation duly organized and
existing under the laws of Hong Kong. MHC is an
"incorporator" of MHICL, owning 50% of its capital
stock. By virtue of a "management agreement" 9 with the
Palace Hotel (Wang Fu Company Limited), MHICL 10
trained the personnel and staff of the Palace Hotel at
Beijing, China. During his employment with the Mazoon
Printing Press in the Sultanate of Oman, respondent
Santos received a letter from Mr. Shmidt, General
Manager, Palace Hotel, Beijing, China. Mr. Schmidt

25
informed respondent Santos that he was recommended
by one Nestor Buenio, a friend of his. Mr. Shmidt
offered respondent Santos the same position as printer,
but with a higher monthly salary and increased benefits.
Respondent Santos wrote to Mr. Shmidt and signified
his acceptance of the offer. Respondent Santos left for
Beijing, China. He started to work at the Palace Hotel.
On August 10, 1989, the Palace Hotel informed
respondent Santos by letter signed by Mr. Shmidt that
his employment at the Palace Hotel print shop would be
terminated due to business reverses brought about by
the political upheaval in China.
Respondent Santos filed a complaint for illegal
dismissal with the NLRC. NLRC ruled in favor of
Santos.
HELD: The NLRC was a seriously inconvenient forum.
We note that the main aspects of the case transpired
in two foreign jurisdictions and the case involves
purely foreign elements. The only link that the
Philippines has with the case is that respondent
Santos is a Filipino citizen. The Palace Hotel and
MHICL are foreign corporations. Not all cases
involving our citizens can be tried here.
The employment contract. Respondent Santos was
hired directly by the Palace Hotel, a foreign employer,
through correspondence sent to the Sultanate of Oman,
where respondent Santos was then employed. He was
hired without the intervention of the POEA or any
authorized recruitment agency of the government. 36
Under the rule of forum non conveniens, a
Philippine court or agency may assume jurisdiction
over the case if it chooses to do so provided: (1)
that the Philippine court is one to which the parties
may conveniently resort to; (2) that the Philippine
court is in a position to make an intelligent decision
as to the law and the facts; and (3) that the
Philippine court has or is likely to have power to
enforce its decision.37 The conditions are unavailing
in the case at bar.
Not Convenient. We fail to see how the NLRC is a
convenient forum given that all the incidents of the case
from the time of recruitment, to employment to
dismissal occurred outside the Philippines. The
inconvenience is compounded by the fact that the
proper defendants, the Palace Hotel and MHICL are
not nationals of the Philippines. Neither .are they
"doing business in the Philippines." Likewise, the
main witnesses, Mr. Shmidt and Mr. Henk are nonresidents of the Philippines.

No power to determine applicable law. Neither can

an intelligent decision be made as to the law
governing the employment contract as such was
perfected in foreign soil. This calls to fore the
application of the principle of lex loci contractus
(the law of the place where the contract was made).
The employment contract was not perfected in the
Philippines. Respondent Santos signified his
acceptance by writing a letter while he was in the
Republic of Oman. This letter was sent to the Palace
Hotel in the People's Republic of China.
No power to determine the facts. Neither can the
NLRC determine the facts surrounding the alleged
illegal dismissal as all acts complained of took
place in Beijing, People's Republic of China. The
NLRC was not in a position to determine whether
the Tiannamen Square incident truly adversely
affected operations of the Palace Hotel as to justify
respondent Santos' retrenchment.
Principle of effectiveness, no power to execute
decision. Even assuming that a proper decision
could be reached by the NLRC, such would not
have any binding effect against the employer, the
Palace Hotel. The Palace Hotel is a corporation
incorporated under the laws of China and was not
even served with summons. Jurisdiction over its
person was not acquired.
BANK OF AMERICA vs. AMERICAN REALTY CORP.
(1999) English law, mortgage, doctrine of
processual presumption, 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.
FACTS: Petitioner Bank of America (BANTSA) is an
international banking and financing institution duly
licensed to do business in the Philippines, organized
and existing under and by virtue of the laws of the State
of California, United States of America while private
respondent American Realty Corporation (ARC) is a
domestic corporation. Bank of America International
Limited (BAIL), on the other hand, is a limited liability
company organized and existing under the laws of
England.
BANTSA and BAIL on several occasions granted three
major multi-million United States (US) Dollar loans to
the following corporate borrowers: (1) Liberian
Transport Navigation; (2) El Challenger and (3) Eshley

26
Compania Naviera (borrowers), all of which are existing
under and by virtue of the laws of the Republic of
Panama and are foreign affiliates of private respondent.
Due to the default in the payment of the loan
amortizations, BANTSA and the corporate borrowers
signed and entered into restructuring agreements. As
additional security for the restructured loans,
private respondent ARC as third party mortgagor
executed two real estate mortgages. The corporate
borrowers defaulted in the payment of the restructured
loans prompting petitioner BANTSA to file civil actions
before foreign courts for the collection of the principal
loan.
In the civil suits instituted before the foreign courts,
private respondent ARC, being a third party mortgagor,
was private not impleaded as party-defendant. In 1992,
petitioner BANTSA filed before the Office of the
Provincial Sheriff of Bulacan, Philippines an application
for extrajudicial foreclosure of real estate mortgage. In
1993, after due publication and notice, the mortgaged
real properties were sold at public auction in an
extrajudicial foreclosure sale, with Integrated Credit and
Corporation Services Co (ICCS) as the highest bidder
for the sum of (P24M).
In 1993, private respondent filed before the Pasig
Regional Trial Court, an action for damages against
the petitioner, for the latter's act of foreclosing
extrajudicially the real estate mortgages despite the
pendency of civil suits before foreign courts for the
collection of the principal loan. In its answer
petitioner alleged that the rule prohibiting the
mortgagee from foreclosing the mortgage after an
ordinary suit for collection has been filed, is not
applicable in the present case, claiming that: a) The
plaintiff, being a mere third party mortgagor and not a
party to the principal restructuring agreements, was
never made a party defendant in the civil cases filed in
Hongkong and England; b) There is actually no civil
suit for sum of money filed in the Philippines since
the civil actions were filed in Hongkong and
England. As such, any decisions (sic) which may be
rendered in the abovementioned courts are not (sic)
enforceable in the Philippines unless a separate
action to enforce the foreign judgments is first filed
in the Philippines, pursuant to Rule 39, Section 50
of the Revised Rules of Court. c) 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.
ISSUE: Whether or not the petitioner's act of filing a
collection suit against the principal debtors for the
recovery of the loan before foreign courts constituted a
waiver of the remedy of foreclosure.
HELD: In our jurisdiction, the remedies available to
the mortgage creditor are deemed alternative and
not cumulative. Notably, an election of one remedy
operates as a waiver of the other. For this purpose, a
remedy is deemed chosen upon the filing of the suit for
collection or upon the filing of the complaint in an action
for foreclosure of mortgage, pursuant to the provision of
Rule 68 of the of the 1997 Rules of Civil Procedure. As
to extrajudicial foreclosure, such remedy is deemed
elected by the mortgage creditor upon filing of the
petition not with any court of justice but with the Office
of the Sheriff of the province where the sale is to be
made, in accordance with the provisions of Act No.
3135, as amended by Act No. 4118. Accordingly,
applying the foregoing rules, we hold that petitioner, by
the expediency of filing four civil suits before
foreign courts, necessarily abandoned the remedy
to foreclose the real estate mortgages constituted
over the properties of third-party mortgagor and
herein private respondent ARC. Moreover, by filing
the four civil actions and by eventually foreclosing
extra-judicially the mortgages, petitioner in effect
transgressed the rules against splitting a cause of
action well-enshrined in jurisprudence and our
statute books.
BANTSA alleges that under English Law, which
according to petitioner is the governing law with
regard to the principal agreements, the mortgagee
does not lose its security interest by simply filing
civil actions for sums of money. We rule in the
negative. This argument shows desperation on the part
of petitioner to rivet its crumbling cause. In the case at
bench, Philippine law shall apply notwithstanding
the evidence presented by petitioner to prove the
English law on the matter. In a long line of
decisions, this Court adopted the well-imbedded
principle in our jurisdiction that there is no judicial
notice of any foreign law. A foreign law must be
properly pleaded and proved as a fact. Thus, if the
foreign law involved is not properly pleaded and
proved, our courts will presume that the foreign law

27
is the same as our local or domestic or internal law.
This is what we refer to as the doctrine of
processual presumption.
In the instant case, assuming arguendo that the English
Law on the matter were properly pleaded and proved in
accordance with Section 24, Rule 132 of the Rules of
Court and the jurisprudence laid down in Yao Kee, et al.
vs.
Sy-Gonzales, said foreign law would still not find
applicability. Thus, 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. 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. Clearly then, English
Law is not applicable.

YAO KEE vs. SY-GONZALES (1988) - 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 here in the
Philippines when her alleged marriage to Sy Mat
was celebrated it therefore follows that her
marriage to Sy Kiat, even if true, cannot be
recognized in this jurisdiction.
FACTS: Sy Kiat, a Chinese national died 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. Thereafter, Aida SyGonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo
Sy filed a petition for the grant of letters of
administration alleging among others that (a) they are
the children of the deceased with Asuncion Gillego; (b)
to their knowledge Sy Mat 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 on January 19, 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.
After hearing, the probate court held in favor of the
oppositors and appointed Sze Sook Wah as the
administratrix of the intestate estate of the deceased .
On appeal the Court of Appeals rendered a decision
modifying that of the probate court, declaring oppositors
Sze Sook Wah, Sze Lai Chu and Sze Chun Yen, the
acknowledged natural children of the deceased Sy Kiat
with his Chinese wife Yao Kee, also known as Yui Yip,
since the legality of the alleged marriage of Sy Mat to
Yao Kee in China had not been proven to be valid to
the laws of the Chinese People's Republic of China.
Hence, this petition.
ISSUE: Whether or not Yao Kee has conclusively
proven her marriage to Sy Kiat to be in accordance with
Chinese law and custom and thus recognized in this
jurisdiction.
HELD: No, she has not conclusively proven her
marriage to Sy Kiat to be in accordance with Chinese
law and custom and therefore not recognized in this
jurisdiction. The evidence that Yao Kee has presented
may very well prove the fact of marriage between Yao
Kee and Sy Kiat. However, the same do not suffice to
establish the validity of said marriage in accordance
with Chinese law or custom. Custom is defined as "a
rule of conduct formed by repetition of acts, uniformly
observed (practiced) as a social rule, legally binding
and obligatory" The law requires that "a custom must
be proved as a fact, according to the rules of evidence"
[Article 12, Civil Code.] On this score the Court had
occasion to state that "a local custom as a source of
right can not be considered by a court of justice unless
such custom is properly established by competent
evidence like any other fact" The same evidence, if not
one of a higher degree, should be required of a foreign
custom.

28
The law on foreign marriages is provided by Article 71
of the Civil Code which states that: Art. 71. All
marriages performed outside 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, except bigamous,
Polygamous, or incestuous marriages, as
determined by Philippine law. (Emphasis supplied.)
*** Construing this provision of law the Court has held
that to establish a valid foreign marriage two things
must be proven, namely: (1) the existence of the
foreign law as a question of fact; and (2) the alleged
foreign marriage by convincing evidence
In proving a foreign law the procedure is provided in the
Rules of Court. With respect to an unwritten foreign law,
Rule 130 section 45 states that: SEC. 45. Unwritten
law.The oral testimony of witnesses, skilled therein, is
admissible as evidence of the unwritten law of a foreign
country, as are also printed and published books of
reports of decisions of the courts of the foreign country,
if proved to be commonly admitted in such courts.
Proof of a written foreign law, on the other hand, is
provided for under Rule 132 section 25, thus: SEC. 25.
Proof of public or official record.An official record or
an entry therein, when admissible for any purpose, may
be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of
the record, or by his deputy, and accompanied, if the
record is not kept in the Philippines, with a certificate
that such officer has the custody. If the office in which
the record is kept is in a foreign country, the certificate
may be made by a secretary of 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. The
Court has interpreted section 25 to include competent
evidence like the testimony of a witness to prove the
existence of a written foreign law.
In the case at bar petitioners did not present any
competent evidence relative to the law and custom
of China on marriage. The testimonies of Yao and
Gan Ching cannot be considered as proof of
China's law or custom on marriage not only
because they are self-serving evidence, but more
importantly, there is no showing that they are
competent to testify on the subject matter. For failure
to prove the foreign law or custom, and

consequently, the validity of the marriage in

accordance with said law or custom, the marriage
between Yao Kee and Sy Kiat cannot be recognized
in this jurisdiction. Well-established in this
jurisdiction is the principle that Philippine courts
cannot take judicial notice of foreign laws. They
must be alleged and proved as any other fact 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 here in the
Philippines when her alleged marriage to Sy Mat
was celebrated it therefore follows that her
marriage to Sy Kiat, even if true, cannot be
recognized in this jurisdiction.
RECTO vs. HARDEN (1956) attorneys fees,
FACTS: Sometime in July, 1941, Appellant, Mrs.
Harden, and Appellee, Claro M. Recto, executed a
contract of professional service whereby Mrs. Harden
will file against her husband, Fred M. Harden, for the
purpose of securing an increase in the amount of
support being received by her from the conjugal
partnership of herself and said Fred M. Harden, and for
the purpose likewise of protecting and preserving her
rights in the properties of the said conjugal partnership,
in contemplation of the divorce suit which she intent to
file against him in the competent Court of California and
of the liquidation of the conjugal partnership between
them. One of the condition in the said contract states
3. That as full and complete satisfaction of the fees of
Attorney Claro M. Recto in connection with the case
above referred to, I hereby agree to pay said Attorney
Claro M. Recto (20%) per cent of the value of the share
and participation which I may receive in the funds and
properties of the said conjugal partnership. In
compliance therewith, on July 12, 1941, the Appellee,
as counsel for Mrs. Harden, commenced Civil Case No.
59634 of the Court of First Instance of Manila, entitled
Esperanza P. de Harden vs. Fred M. Harden and Jose
Salumbides.
Subsequently, the Philippines was invaded by the
Japanese and placed under military occupation. Then
came the liberation, in the course of which the records
of this case were destroyed. On October 23, 1946, said
records were reconstituted at the instance of Appellee
herein. Thereafter, the proceedings were resumed and,
in due course, the Court of First Instance of Manila

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rendered in favour of Mrs. Harden. The Defendants
appealed from said decision to this Court. While the
appeal was thus pending before us, herein Appellee
filed a manifestation and a motion stating that Mrs.
Harden had instructed him, by letter, to discontinue all
proceedings relative to said case, vacate all orders
and judgments rendered therein, and abandon and
nullify all her claims to the conjugal partnership existing
between her and Mr. Harden, and executed without the
knowledge, advise and consent of said Appellee, as
counsel for Mrs. Harden. It was further asserted, in
Appellees manifestation, that the purpose of the said
instruments, executed by Mr. and Mrs. Harden, was to
defeat the claim of the former for attorneys fees.
Validity of the above-quoted contract of services, which
the Appellants assail as void, mainly, upon the ground:
(1) that Mrs. Harden cannot bind the conjugal
partnership without her husbands consent; (2) that
Article 1491 of the Civil Code of the Philippines in effect
prohibits contingent fees (3) that the contract in
question has for its purpose to secure a decree of
divorce, allegedly in violation of Articles 1305, 1352 and
1409 of the Civil Code of the Philippines; and (4) that
the terms of said contract are harsh, inequitable and
oppressive.
HELD: The third objection is not borne out, either by
the language of the contract between them, or by the
intent of the parties thereto. Its purpose was not to
secure a divorce, or to facilitate or promote the
procurement of a divorce. It merely sought to
protect the interest of Mrs. Harden in the conjugal
partnership, during the pendency of a divorce suit
she intended to file in the United States. What is
more, inasmuch as Mr. and Mrs. Harden are
admittedly citizens of the United States, their status
and the dissolution thereof are governed
pursuant to Article 9 of the Civil Code of Spain (which
was in force in the Philippines at the time of the
execution of the contract in question) and Article 15 of
the Civil Code of the Philippines by the laws of the
United States, which sanction divorce. In short, the
contract of services, between Mrs. Harden and
herein Appellee, is not contrary to law, morals,
good customs, public order or public policy.

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