Rule: Courts have the responsibility to determine whether forum selection clauses

in form passage contracts are fair.

Carnival Cruise Lines, Inc. v. Shute 499 U.S. 585 (1991)
Facts. Defendant Shute purchased passage for a seven day cruise on the Tropicale,
a ship owned by Plaintiff, through a Washington travel agent. The face of each
ticket contained terms and conditions of passage, which included an agreement
that all matters disputed or litigated subject to the travel agreement, would be
before a Florida court. Defendant boarded the ship in California, which then sailed
to Puerto Vallarta, Mexico before returning to Los Angeles. While the ship was in
international waters, Defendant Eulala Shute was injured from slipping on a deck
mat. Defendants filed suit in Federal District Court in Washington. Defendant filed a
motion for summary judgment, alleging that the clause in the tickets required
Defendants to bring their suit in Florida.
Issue. Whether the court should enforce a forum-selection clause forcing
individuals to submit to jurisdiction in a particular state.
Held. Yes. The Supreme Court of the United States held that the Court of Appeals
erred in refusing to enforce the forum-selection clause.
Forum-selection clauses contained in form passage contracts are subject to judicial
scrutiny for fundamental fairness, but where they are not lacking in fairness, they
will be enforced.

Analysis: The Court says that the ticket contract was a routine commercial
passage contract. It was not negotiated, and the parties did not have equal
bargaining power.
The Court enumerates several good reasons for a forum selection clause in a cruise
ticket contract:
1.
A cruise will have passengers from all over the country, and absent a forum
selection clause, the cruise company could be subject to suit in all sorts of places.
2.
A forum selection clause eliminates uncertainty about the forum and avoids
costly pretrial motions.
3.
Forum selection clauses mean lower fares for passengers because the cruise
company passes along savings from limiting the forums where the company must
defend itself.
The Court says that the key question is whether the clause is fair. In evaluating the
fairness of such clauses, the Court must consider whether Carnival was, in bad
faith, discouraging legitimate claims from its passengers. The Court says that
because Carnival does business primarily in Florida and has a lot of cruises that
depart from Florida, they didnt include the clause in bad faith.

Dissent. Justice Stevens dissented, in which he was joined by Justice Marshall.

Essentially Justice Stevens feels that adhesion contracts, particularly forumselection clauses, are void as contrary to public policy if they were not freely
bargained for, create additional expense for one party, or deny one party a remedy.

Stevens, in his dissent, refers to two strands of contract law that come into play
in this case.

Discussion. In reaching its decision, the court noted that there is no evidence that
Plaintiff set Florida as the forum as a means of discouraging cruise passengers from
pursuing their claims. Such a suggestion is negated by the fact that Plaintiff has its
headquarters in Florida, and many of its cruises depart from Florida.

2.
At least in the past, forum selection clauses have been found to be counter to
public policy. In particular, they are not enforced if they (1) were not freely
bargained for, (2) create additional expense for one party, or (3) deny one
party a remedy.

1.
Courts look closer at contracts made between parties with unequal
bargaining power, especially take it or leave it contracts.

Notes and Problems

Facts: The Shutes went on a cruise. On the ticket, there was a forum selection
clause that said any litigation related to the cruise must be tried in Florida. They
departed for their cruise from Los Angeles and the ship sailed to Mexico and back
to Los Angeles. Mrs. Shute slipped on the ship and hurt herself. The Shutes sued
in Washington and Carnival moved for summary judgment due to the forum
selection clause. At trial, the Shutes conceded that they had notice of the forum
selection clause.

Procedural Posture: The suit was first brought in the Western District of
Washington. The Ninth Circuit refused to enforce the clause, and the cruise line
appealed to the United States Supreme Court.

Issue: Is the forum selection clause enforceable?

a.

It is most likely that the suit would either be brought in Florida or Washington.

b.
In Florida, there would be no problem. Florida courts have general jurisdiction
over Carnival because thats their principal place of business. Thus, any federal
court located in Florida would have personal jurisdiction over
Carnival. In Washington, however, Carnival would try to argue that it doesnt have
sufficient minimum contacts. If Carnival only solicits business through travel
agents and doesnt have TV commercials (hmmmm.) then they might have a
case for no jurisdiction inWashington.
a.

So theres a contract law issue.

b.

So theres a public policy issue.

c.
The majority spends more time on the enforceability issue. They argue that
the contract clause is enforceable even though the passengers were not allowed to

negotiate it. The court gives three reasons why this is acceptable: (1) the diversity
of Carnivals passengers could subject them to suit in a variety of jurisdictions; (2)
a forum selection clause reduces the uncertainty, time and money involved in
determining a forum; and (3) forum selection clauses have benefits for Carnival
that they pass along to their customers as lower fares.
d.
The majority implies that they would not enforce a forum selection clause that
is intended to discourag[e] cruise passengers from pursuing legitimate
claims. They also would not enforce a forum selection clause that was obtained
by fraud or overreaching.
a.
A forum selection clause will only help in cases that involve a contractual
relationship. In Pennoyer, I suppose Mitchell could have included a forum selection
clause in his service contract with Neff such that Neff agreed to appoint an agent
in Oregon to accept service of process. Then there would be no question
aboutOregon having personal jurisdiction over Neff. In Shoe, there was no
contractual relationship between the state of Washington and International Shoe,
but instead was a statutory question. Shaffer was essentially also a statutory
question. McGee did involve a contract for life insurance. If the life insurance
policy included a forum selection clause allowing McGee to bring suit in California,
then hed be good to go; but the insurance company would never agree to
that. In Hanson, perhaps Mrs. Donner could have put some forum selection
language in the documents establishing her trust. In World-Wide, there was no
contract. In Asahi, its highly unlikely that the two overseas companies would have
agreed to go to court in the United States to settle their differences. In Burger
King, there was a choice of law clausebut explicitly not a forum selection clause
in the franchise contract. In Washington Equipment, there could have been a
forum selection clause in the contract between Washington Equipment and
Concrete Placing which would have settled things. In Burnham, theres no help.
b.
I dont know what constitutes malpractice, but I suppose a lawyer ought to
study contracts so far as the benefits outweigh the costs. Its tempting to say that
lawyers must study every clause exhaustively (charging zillions of dollars in fees
while doing so), but I think theres a cutoff.

FACTS:
-The German corporation contracted with the United States corporation to move an
oil rig from Louisiana to the Adriatic Sea.
During transportation, the rig was damaged and was towed to Tampa, Florida.
-The United States corporation filed suit in Tampa.
-The German corporation, however, asked the district court to enforce the forumselection clause that was contained in the contract. This placed jurisdiction in
England.
-The district court refused to enforce the clause and the lower appellate court
affirmed the district court's ruling.
HOLDING:
-The court held that the forum-selection clause should be enforced unless the party
resisting the clause could show that enforcement of the clause would be
unreasonable.
ANALYSIS:
-The argument that such clauses ousted a court of jurisdiction was found not to be
valid.
-The German corporation did not waive operation of the clause by appearing in the
federal court.
-As a result, the court stated that the forum selection clause was valid.
-The case was remanded for a determination of whether enforcement was
unreasonable.
RULES:
Forum-selection clauses are prima facie valid and should be enforced unless
enforcement is shown by the resisting party to be unreasonable under the
circumstances. This is the correct doctrine to be followed by federal district courts
sitting in admiralty.
OUTCOME: The court vacated the lower appellate court's judgment and remanded
this case for a determination of whether the enforcement of the forum-selection
clause was unreasonable or reasonable

a.
This kind of clause says well use the laws of such-and-such a forum, even if
we dont do the trial in that particular forum.
b.
This one says we definitely can do the suit in forum X, but not
necessarily only forum X.
c.

Here were doing any and all suits in forum X and only forum X.

Conclusion: The forum selection clause is enforceable.

M/S Bremen v. Zapata Off-Shore Co.

407 U.S. 1
SYNOPSIS:
The petitioner sought review of the court by certiorari regarding a judgment that
was entered by the Fifth Circuit court of appeals.
A forum selection cause in a contract between a German corporation and the
United States respondent corporation was held invalid by the lower court.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S. Ct. 2174, 85 L. Ed.
2d 528 (1985).
Facts
Rudzewicz (D) and MacShara entered into a franchise contract with Burger King
Corp. (P) to open a restaurant in Michigan. Burger King was incorporated in Florida
and a choice of law clause in the contract indicated that Florida law was controlling.
The contract allowed Rudzewicz to use Burger Kings trademarks and service marks
for 20 years in Michigan. All financial obligations owed to Burger King were sent to
Florida and D received training in Florida. An economic downturn led to decreased
sales and Rudzewicz failed to meet his obligations under the contract.
Burger King brought a diversity suit against Rudzewicz in the Southern District of
Florida. Rudzewicz and MacShara moved to dismiss on the grounds that the court
did not have personal jurisdiction over them because they did not have sufficient
minimum contacts with the state. The court denied Rudzewicz motion and ruled
that jurisdiction was proper under Floridas long arm statute. The court entered
judgment in favor of Burger King and Rudzewicz appealed.

On appeal, the court held that while Rudzewicz had sufficient contacts with the
state of Florida to satisfy the states long arm statute, the exercise of personal
jurisdiction was fundamentally unfair and was a violation of due process. Burger
King appealed.

Reasonable anticipation is demonstrated when a party purposefully avails itself of

the privilege of conducting activities within the forum thus invoking the benefits
and protections of its laws. See Hanson v. Denckla. Once purposeful availment and
minimum contacts are satisfied, the four World Wide factors must be analyzed.

Issues

Establishing that the defendant has minimum contacts creates a rebuttable

presumption that it is fair to require him to defend there. The burden shifts to the
defendant to show that it would be unfair to defend in the state. The question of
fairness requires a balancing of: the forums interest in the litigation, the plaintiffs
interest in efficient and convenient relief, the demands of the federal system as a
whole, the best interests of the federal system, and the defendants interest in not
having to defend a suit in a remote or disadvantageous forum.

Must a plaintiff show that an out of state defendant has both minimum contacts
with the forum state and that it is fair and equitable to require a defendant to
defend a suit in the state?
What factors must the court balance in addressing reasonableness in jurisdictional
analysis?
Holding and Rule (Brennan)
No. A plaintiff need not show that an out of state defendant has both minimum
contacts with the forum state and that it is fair and equitable to require the
defendant to defend a suit in the state.
The factors the court must balance in addressing reasonableness in an analysis
of personal jurisdiction are:
(1) the extent of a defendants purposeful interjection in the forum state;
(2) the burden on the defendant in defending in the forum;
(3) the extent of conflict with the sovereignty of the defendants state;
(4) the forum states interest in adjudicating the dispute;
(5) the most efficient judicial resolution of the controversy;
(6) the importance of the forum to the plaintiffs interest in convenient and
effective relief; and
(7) the existence of an alternative forum.
The court held that jurisdiction is proper when the defendants contact proximately
results from actions by the defendant such that they create a substantial
connection with the forum state.
Due Process protects an individuals liberty interests in not being bound by
judgments of a forum in which he has established no meaningful contacts, ties, or
relations. See International Shoe Co. v. Washington.
The court held that there must be fair warning that a particular activity may subject
a party to suit in another jurisdiction. SeeShaffer v. Heitner. The fair warning
requirement is satisfied when a party has purposefully directed his activities at the
forum. See Keeton v. Hustler Magazine, Inc. Parties who reach out and create
continuing relationships and obligations in another state are subject to regulation
and sanctions in that state for the consequences of their activities. The
foreseeability that is critical for due process is that the defendants conduct and
connection with the forum are such that he would reasonably anticipate being
haled into court there. See World-Wide Volkswagen Corp. v. Woodson.

The court held that in this case the franchise agreement with Burger King allowed
Rudzewicz to benefit from an association with a Florida corporation for twenty
years. Rudzewicz had continuing and direct contacts with Burger King. The fact that
Rudzewiczs contacts were purposeful allowed the state to exercise personal
jurisdiction despite that those contacts were minimal. The contract indicated that
Florida law would apply. It cannot be a shock that Burger King would sue Rudzewicz
there for a breach of the contract in light of the clear contractual terms of the
agreement.
Rudzewicz had not shown that he would be unfairly prejudiced or harmed by a trial
in Florida and the purposeful involvement of Rudzewicz in the contract met the
minimum contact requirements.
Disposition
Judgment for defendant Rudzewicz reversed.
Dissent (Stevens)
It is unfair to require a franchisee to defend a case of this kind in a forum chosen by
the franchisor. Rudzewicz did no business in the state of Florida. The principal
contacts were in Michigan with the local office of Burger King. Rudzewicz had a
local operation with far less resources than Burger King. It would be fundamentally
unfair for Rudzewicz to be required to defend in Florida.
Note: It is important to remember that the contract had choice of law clause, but
not a forum selection clause.

SWEET LINES, INC., petitioner, vs. HON. BERNARDO TEVES, Presiding

Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR., and
ROGELIO TIRO, respondents.

TOPIC: IN ADHESION CONTRACTS, STIPULATION VOID IF CONTRARY TO PUBLIC

POLICY

NATURE OF THE CASE: This case was elevated to the SC to restrain the CFI of
Misamis Oriental to proceed in the complaint filed by Tandog and Tiro against
Sweet Lines on the ground that the venue was improperly laid
FACTS:
Sweet Lines is a shipping company which transports inter-island passengers
and cargoes at Cagayan de Oro City. Rogelio Tiro, a contractor, and Atty. Leovigildo
Tandog bought tickets from Sweet Lines and were bound to Bohol. When they were
about to board M/S Sweet Hope which was bound for Tagbilaran City via the port
of Cebu, they were informed that the vessel will not proceed to Bohol because most
of the passengers were bound to Surigao. They were advised to relocate and board
to M/S Sweet Town. However, the said vessel was already full and they were
forced to agree to hide at the cargo section to avoid inspection of the officers of
the Philippine Coastguard." Private respondents alleged that they were, during the
trip," "exposed to the scorching heat of the sun and the dust coming from the
ship's cargo of corn grits. Further, the tickets they bought at Cagayan de Oro City
for Tagbilaran were not honored and they were constrained to pay for other tickets.
Thus, Tandog and Tiro filed a complaint against Sweet Lines for damages and
breach of contract of carriage in the CFI of Misamis Oriental (Cagayan de Oro is the
capital of Misamis Oriental).
SWEET LINES: It moved to dismiss the complaint on the ground of improper venue.
This was based on the condition printed at the back of the tickets purchased by
Tandog and Tiro which reads:
14. It is hereby agreed and understood that any and all actions arising out of the
conditions and provisions of this ticket, irrespective of where it is issued, shall be
filed in the competent courts in the City of Cebu.
CFI: Denied the motion to dismiss.
Sweet Lines: Motion for Reconsideration.
CFI: Denied the motion for reconsideration.
---Hence, this petition.
ISSUE: WON a common carrier engaged in inter-island shipping may stipulate thru
condition printed at the back of passage tickets to its vessels that any and all
actions arising out of the contract of carriage should be filed only in a particular
province or city, in this case the City of Cebu, to the exclusion of all others.
WON the venue of the action should be in the City of Cebu as stipulated by the
condition in the ticket bought by Tandog and Tiro.
SWEET LINES: The condition is valid and enforceable since Tandog and Tiro acceded
to it when they purchased the tickets at its Cagayan de Oro branch office and took
its vessel M/S "Sweet Town" for passage to Tagbilaran, Bohol. Moreover, venue may
be validly waived and it is clear that the ticket stipulates that the condition had
fixed the venue in the City of Cebu. Thus, the orders of the CFI Judge are an
unwarranted departure from established jurisprudence governing the case; and
that he acted without or in excess of his jurisdiction in is the orders complained of.
TANDOG AND TIRO: The condition in the ticket is not valid as it is not an essential
element of the contract of carriage, being in itself a different agreement which
requires the mutual consent of the parties to it. Tandog and Tiro had no say in its

preparation, the existence of which they could not refuse, hence, they had no
choice but to pay for the tickets and to avail of petitioner's shipping facilities out of
necessity. Further, the carrier "has been exacting too much from the public by
inserting impositions in the passage tickets too burdensome to bear," and the
condition which was printed in fine letters is an imposition on the riding public and
does not bind respondents. Lastly, while venue of actions may be transferred from
one province to another, such arrangement requires the "written agreement of the
parties", not to be imposed unilaterally; and that assuming that the condition is
valid, it is not exclusive and does not, therefore, exclude the filing of the action in
Misamis Oriental.
HELD: No, the actuations of Sweet Lines (putting a condition at the back of its
tickets fixing the venue for any complaints filed against them in the City of Cebu) is
contrary to public policy. Thus, the venue was not improperly laid in the CFI of
Misamis Oriental.
There is no question that there was a valid contract of carriage entered into by
petitioner and private respondents and that the passage tickets, upon which the
latter based their complaint, are the best evidence thereof. All the essential
elements of a valid contract, i.e., consent, cause or consideration and object, are
present.
However, with respect to the condition which is in issue in this case printed at
the back of the passage tickets, these are commonly known as "contracts of
adhesion," the validity and/or enforceability of which will have to be determined by
the peculiar circumstances obtaining in each case and the nature of the conditions
or terms sought to be enforced. For, "(W)hile generally, stipulations in a contract
come about after deliberate drafting by the parties thereto, ... there are certain
contracts almost all the provisions of which have been drafted only by one party,
usually a corporation. Such contracts are called contracts of adhesion, because the
only participation of the party is the signing of his signature or his 'adhesion'
thereto. Insurance contracts, bills of lading, contracts of make of lots on the
installment plan fall into this category"
By the peculiar circumstances under which contracts of adhesion are entered into
namely, that it is drafted only by one party, usually the corporation, and is
sought to be accepted or adhered to by the other party, in this instance the
passengers, private respondents, who cannot change the same and who are thus
made to adhere thereto on the "take it or leave it" basis certain guidelines in the
determination of their validity and/or enforceability have been formulated in order
to that justice and fair play characterize the relationship of the contracting parties.
To the same effect and import, and, in recognition of the character of contracts of
this kind, the protection of the disadvantaged is expressly enjoined in Art. 24 of the
New Civil Code
In all contractual property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance indigence, mental
weakness, tender age and other handicap, the courts must be vigilant for his
protection.
Considered in the light Of the foregoing norms and in the context of circumstances
prevailing in the inter-island shipping industry in the country today, the SC declared
the condition at the back of the passage to be void and unenforceable. First, under
circumstances obligation in the inter-island shipping industry, it is not just and fair
to bind passengers to the terms of the conditions printed at the back of the
passage tickets. Second, the condition subverts the public policy on transfer of
venue of proceedings of this nature, since the same will prejudice rights and

interests of innumerable passengers in different s of the country who, under the

said condition, will have to file suits against petitioner only in the City of Cebu.
Moreover, it is hardly just and proper to expect the passengers to examine their
tickets received from crowded/congested counters, more often than not during rush
hours, for conditions that may be printed much charge them with having consented
to the conditions, so printed, especially if there are a number of such conditions m
fine print, as in this case. Thus, passengers cannot be expected to read all the
conditions much less consider the public policies that the conditions therein violate.
Additionally, although venue may be changed or transferred from one province to
another by agreement of the parties in writing t to Rule 4, Section 3, of the Rules of
Court, such an agreement will not be held valid where it practically negates the
action of the claimants, such as the private respondents herein. The philosophy
underlying the provisions on transfer of venue of actions is the convenience of the
plaintiffs as well as his witnesses and to promote the ends of justice. Considering
the expense and trouble a passenger residing outside of Cebu City would incur to
prosecute a claim in the City of Cebu, he would most probably decide not to file the
action at all. The condition will thus defeat, instead of enhance, the ends of justice.
Upon the other hand, petitioner has branches or offices in the respective ports of
call of its vessels and can afford to litigate in any of these places. Hence, the filing
of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not
cause inconvenience to, much less prejudice, petitioner.
Public policy is ". . . that principle of the law which holds that no subject or citizen
can lawfully do that which has a tendency to be injurious to the public or against
the public good ... 22Under this principle" ... freedom of contract or private dealing
is restricted by law for the good of the public. Clearly, the subject condition, if
enforced, will be subversive of the public good or interest, since it will frustrate in
meritorious cases, actions of passenger cants outside of Cebu City, thus placing
petitioner company at a decided advantage over said persons, who may have
perfectly legitimate claims against it. The said condition should, therefore, be
declared void and unenforceable, as contrary to public policy to make the courts
accessible to all who may have need of their services.
Thus, PETITION IS DENIED.

The Joint and Several Guarantee provides, inter alia, that:

This guarantee and all rights, obligations and liabilities arising hereunder shall be
construed and determined under and may be enforced in accordance with the laws
of the Republic of Singapore. We hereby agree that the Courts of Singapore shall
have jurisdiction over all disputes arising under this guarantee.
The COMPANY failed to pay its obligation. Thus, HSBC demanded payment and
inasmuch as the private respondents still failed to pay, HSBC filed A complaint for
collection of a sum of money against private respondents Sherman and Reloj before
RTC of Quezon City.
Private respondents filed an MTD on the ground of lack of jurisdiction over the
subject matter. The trial court denied the motion. They then filed before the
respondent IAC a petition for prohibition with preliminary injunction and/or prayer
for a restraining order. The IAC rendered a decision enjoining the RTC Quezon City
from taking further cognizance of the case and to dismiss the same for filing with
the proper court of Singapore which is the proper forum. MR denied, hence this
petition.
ISSUE: Do Philippine courts have jurisdiction over the suit, vis-a-vis the Guarantee
stipulation regarding jurisdiction?
HELD: YES
One basic principle underlies all rules of jurisdiction in International Law: a State
does not have jurisdiction in the absence of some reasonable basis for exercising it,
whether the proceedings are in rem quasi in rem or in personam. To be reasonable,
the jurisdiction must be based on some minimum contacts that will not offend
traditional notions of fair play and substantial justice
The defense of private respondents that the complaint should have been filed in
Singapore is based merely on technicality. They did not even claim, much less
prove, that the filing of the action here will cause them any unnecessary trouble,
damage, or expense. On the other hand, there is no showing that petitioner BANK
filed the action here just to harass private respondents.
**
In the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., where the stipulation
was [i]n case of litigation, jurisdiction shall be vested in the Court of Davao City.
We held:

HONGKONG AND SHANGHAI BANKING CORPORATION (HSBC) vs. SHERMAN

et al
G.R. No. 72494
August 11, 1989
FACTS: It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd.
(COMPANY), a company incorporated in Singapore applied with and was granted by
HSBC Singapore branch an overdraft facility in the maximum amount of Singapore
dollars 200,000 with interest at 3% over HSBC prime rate, payable monthly, on
amounts due under said overdraft facility.
As a security for the repayment by the COMPANY of sums advanced by HSBC to it
through the aforesaid overdraft facility, in 1982, both private respondents and a
certain Lowe, all of whom were directors of the COMPANY at such time, executed a
Joint and Several Guarantee in favor of HSBC whereby private respondents and
Lowe agreed to pay, jointly and severally, on demand all sums owed by the
COMPANY to petitioner BANK under the aforestated overdraft facility.

Anent the claim that Davao City had been stipulated as the venue, suffice it to say
that a stipulation as to venue does not preclude the filing of suits in the residence
of plaintiff or defendant under Section 2 (b), Rule 4, ROC, in the absence of
qualifying or restrictive words in the agreement which would indicate that the place
named is the only venue agreed upon by the parties.
Applying the foregoing to the case at bar, the parties did not thereby stipulate that
only the courts of Singapore, to the exclusion of all the rest, has jurisdiction.
Neither did the clause in question operate to divest Philippine courts of jurisdiction.
In International Law, jurisdiction is often defined as the light of a State to exercise
authority over persons and things within its boundaries subject to certain
exceptions. Thus, a State does not assume jurisdiction over travelling sovereigns,
ambassadors and diplomatic representatives of other States, and foreign military
units stationed in or marching through State territory with the permission of the
latters authorities. This authority, which finds its source in the concept of
sovereignty, is exclusive within and throughout the domain of the State. A State is
competent to take hold of any judicial matter it sees fit by making its courts and
agencies assume jurisdiction over all kinds of cases brought before them

NOTES:
The respondent IAC likewise ruled that:
In a conflict problem, a court will simply refuse to entertain the case if it is not
authorized by law to exercise jurisdiction. And even if it is so authorized, it may still
refuse to entertain the case by applying the principle of forum non conveniens.
However, whether a suit should be entertained or dismissed on the basis of the
principle of forum non conveniens depends largely upon the facts of the particular
case and is addressed to the sound discretion of the trial court. Thus, the IAC
should not have relied on such principle.

White v. Tennant.
[790] 1. Domicile Change of Residence Intent.
Where a person entirely abandons his former residence in one State with no
intention of resuming it and goes with his family to another residence, which he has
rented in another State, with the intention of making the latter his residence for an
indefinite time, the latter State is his domicile notwithstanding the fact, that, after
he and his family arrive at the new residence, which is only about a half a mile from
the State line, they go on the same day on a visit to spend the night with a
neighbor in the former State intend-[791]-ing to return in the morning of the next
day, but he is detained there by sickness, until he dies, and never does in fact
return to his new home. (pp. 796, 797.)
2. Domicile Conflict of Laws Distribution of Property.
The laws of the State, in which the domicile of a decedent is at the time of his
death, control and govern the distribution of his personal estate, although he may
die in another State. (p. 797.)
P. II Keek and J. M. Pagans for appellants.
Berkshire, Sturgiss & Baker and A. F. Haymond for ap-peliees.
Snyder, Judge:
This is a suit brought December, 1886, in the Circuit Court of Monongalia county by
William L. White and others against Emrod Tennant, administrator of Michael White
deceased and Lucinda White, the widow of said Michael White, to set aside the
settlement and distribution made by the administrator of the personal estate of
said decedent, and to have the same settled and distributed according to the laws
of the State of Pennsylvania, which State it is claimed was the domicile of said
decedent at the time of his death. The plaintiffs are the brothers and sisters of the
decedent, who died in this State intestate. On October 28, 1887, the court entered
a decree dismissing the plaintiffs' bill, and they have appealed.
The sole question presented for our determination is, whether the said Michael
White at the time of his death, in May, 1885, had his legal domicile in this State or
in the State of Pennsylvania. It is admitted to be the settled law, that the law of the
State, in which the decedent had his domicile at the time of his death, will control
the succession and distribution of his personal estate. Before referring to the facts

proved in this cause, we shall endeavor to determine what in law is meant by "
domicile."
Dr. Wharton says:" ' Domicile ' is a residence acquired as a final abode. To
constitute it there must be (1) residence, actual or inchoate; (2) the non-existence
of any intention to make a domicile elsewhere." Whart. Conn. Law 21. "'Domicile'
is that place or country, either (1) in [792] which a person in fact resides with an
intention of residence, animus manendi; or (2) in which, having so resided, he
continues actually to reside, though no longer retaining the intention of
residence, animus manendi; or (3) with regard to which, having so resided there, he
retains the intention of residence,-animus manendi, though he in fact no longer
resides there." Dicey Dom. 44. Two things must concur to establish domicile, the
fact of residence, and the intention of remaining. These two must exist, or must
have existed, in combination. There must have been an actual residence. The
character of the residence is of no importance; and, if domicile has once existed,
mere temporary absence will not destroy it, however long
continued. Munro v. Munro, 7 01. & Fin. 842. The original domicile continues until it
is fairly changed for another. It is a legal maxim that every person must have a
domicile somewhere; and he can have but one at a time for the same purpose.
From this it follows that one can not be lost or extinguished until another is
acquired. Baird v. Byrne, 3 Wall. Jr. 1. When one domicile is definitely abandoned
and a new one selected and entered upon, length of time is not important; one day
will be sufficient, provided the animus exists. Even when the point of destination is
not reached, domicile may shift in itinere, if the abandonment of the old domicile
and the setting out for the new are plainly shown. Munroe v.Douglass, 5 Madd. 405.
Thus a constructive residence seems to be sufficient to give domicile, though an
actual residence may not have begun. Whart. Conn. Law, 58. A change of
domicile does not depend so much upon the intention to remain in the new place
for a definite or indefinite period as upon its being without an intention to return.
An intention to return however at a remote or indefinite period to the former place
of actual residence will not control, if the other facts, which constitute domicile, all
give the new residence the character of a permanent home or place of abode. The
intention and actual fact of residence must concur, where such residence is not in
its nature temporary. Hallet v. Bassett, 100 Mass. 170, 171; Long v. Ryan, 30 Gratt,
718. InBradley v. Lowery, 1 Speer Eq. 1, it is held, that " change of domicile is
consummated when one leaves the [793] State where he has hitherto resided,
avowing his intention not to return, and enters another State intending to
permanently settle there." A domicile once acquired remains until a new one is
acquired elsewhere,facto et animo. Story Conn. Law, 47; Hart v. Lindsey, 17 N. II.
235. Where a person removes from one State to another and establishes a fixed
residence in the latter, it will become his domicile, although there may be a floating
intention to return to his former place of abode at some future
period. Ringgold v. Barley, 5 Md. 186." If a man intending to remove with his family
visits the place of removal beforehand, to make arrangements, or even sleeps
there occasionally for convenience and then transfers his family, the change of
domicile takes effect from the time of removing with the family; but if he has
definitely changed his residence and taken up his abode permanently in a new
place, the fact, that his family remains behind, until lie can remove them
conveniently, and that he visits them occasionally, will not prevent the new place
being his domicile." Guier v. O'Daniel, Amer. Lead. Cas. (753,)
903; Cambridge v. Charlestown, 13 Mass. 501.
The material facts in the case at bar are as follows: Joseph S. White, the father of
the plaintiffs and Michael White, died intestate in Monongalia county seized of a
tract of about 240 acres of land, of which about forty acres lay in Greene county,
Pa., the whole constituting but one tract or farm. The mansion-house in which the
father resided was located on the West Virginia side of the farm, and there was also
a dwelling-house generally occupied by tenants on the Pennsylvania part of the

farm. After the death of the father, his widow and the plaintiffs remained together
and occupied the home-farm, residing in the mansion-house in West Virginia.
Michael White several years before his death married the defendant, Lucinda
White, a daughter of the defendant, Em rod Tennant, and about that time
purchased a farm on Day's run, in Monongalia county, some fifteen miles from the
home-place, to which he moved, and at which he and his wife resided. It is
conceded, that Michael was born and had his domicile in West Virginia all his life,
until about April 1, 1885.
[794] In the winter of 1884-85, Michael sold his Day's run farm, and then rented or
made an arrangement with his mother and brothers and sisters, the plaintiffs, to
occupy the forty acres of the home-farm, in which he still had an undivided interest,
and to live in the house on said forty acres in Greene county, Pa. He was to give to
the purchaser the possession of Ms Day's run farm on April 1, 1885, and to have
possession of the Pennsylvania house and forty acres at the same time. In March,
1885, he moved part of his household-goods into the Pennsylvania house, and put
them into one of the rooms by permission of the tenant, who then occupied it, and
who did not vacate it until between the middle and last of March, 1885. About the
same time he moved an organ and some grain to the old homestead, until he could
get possession of the Pennsylvania house.
On the morning of April 2, 1885, he finally left the Day's run house with the
remainder of his goods and his wife, he having no children, with the declared intent
and purpose of making the Pennsylvania house his home that evening. He with his
team, wife and goods and live-stock passed into the State of Pennsylvania several
miles before he reached said house and continued in said State thence to said
Pennsylvania house, where they arrived that evening about sundown, and then and
there unloaded their goods and put them in the house, setting up one bed and
turning the fowls and other live-stock loose at the house.
The said house had been vacated for several days. It was a damp, cool day, and
the house was found to be damp and uncomfortable. The wife was complaining of
feeling unwell, and in consequence of that fact and the uncomfortable condition of
the house, on the invitation of her brother-inlaw and others of the family who then
resided at the mansion-house, but a short distance therefrom, the said Michael and.
his wife went to the mansion-house in West Virginia to stay all night and return in
the morning. Before leaving the Pennsylvania house the wife had gotten out of the
buggy at the house, and the said Michael after putting into it his household-goods
locked the door and took the key with him. On the following morning, the wife still
feeling unwell, and the brother who was to return the team, which [795] they had
used in moving their goods, having taken sick, the wife after going to the
Pennsylvania house to milk returned to the mansion-house, and Michael took the
team hack to Day's run.
On the return of Michael from this trip he found his wife so sick with typhoid fever,
that it was impossible to move her, in consequence of which both he and she
remained at the mansion-house, she because she was unable to get away, and he
to wait on her, but he went daily over to the Pennsylvania house to look after it,
and to feed his stock there, calling it his " home." In ten or fifteen days, and before
the wife had sufficiently recovered to leave her bed, Michael was attacked with
typhoid fever, and about ten days thereafter died intestate in the same house. The
wife recovered, and the defendant, Emrod Tennant, her father, administered on the
estate of Michael, taking out letters of administration in Monongalia county, W. Ya.
The administrator settled his accounts before a commissioner of said county, and
distributed the estate according to the laws of West Virginia; that is, by paying over
to the widow the whole personal estate remaining after the payment of the debts of
the decedent. It is admitted, that, if the distribution had been according to the laws

of the State of Pennsylvania, the wife would have been entitled to the one half only
of said estate, and the plaintiffs would have been entitled to the other half.
As the law of the State, in which the decedent had his domicile at the time of his
death, must govern the distribution of his estate, the important question is, where,
according to the foregoing facts, was the domicile of Michael at the time of his
death? It is unquestionable, that prior to the 2d day of April, 1885, his domicile was
and had been in the State of West Virginia. Did he on that day or at any subsequent
day change his domicile to the State of Pennsylvania? According to the authorities
hereinbefore cited, if it is shown, that a person has entirely abandoned his former
domicile in one State with the intention of making his home at a fixed place in
another State with no intention of returning to his former domicile and then
establishes a residence in the new place for any period of time, however brief, that
will be in [796] law a change of domicile, and the latter will remain his domicile
until changed in like manner.
The facts in this case conclusively prove, that Michael White, the decedent,
abandoned his residence in West Virginia with the intention and purpose not only of
not returning to it, but for the expressed purpose of making a fixed place in the
State of Pennsylvania his home for an indefinite time. This fact is shown by all the
circumstances as well as by his declarations and acts. He had sold his residence in
West Virginia and surrendered its possession to the purchaser, and thereby made it
impossible for him to return to it and make it his home. He rented a dwelling in
Pennsylvania, for which he had no use except to live in and make it his home. In
addition to all this, he had moved a part of his household goods into this house,
and then, on the 2d of April, 1885, he with his family and the remainder of his
goods and stock finally left his former home and the State of West Virginia, and
moved into the State of Pennsylvania to his house In that State, and there put his
goods in the house, and turned his stock loose on the premises. At the time he left
his former home on that morning, and while he was on the way to his new home,
his declared purpose and intention were to make that his home from that very day,
and to occupy it that night. He arrived in Pennsylvania and at his new home with
that intention; and it was only after he arrived there and for reasons not before
known, which had no effect to change his purpose of making that his future home,
that he failed to remain there from that time. There was no change in his purpose,
except that after he arrived at his new home and unloaded and left his property
there, he concluded on account of the condition of the house and the illness of his
wife, that it would be better to go with his wife to remain one night with his
relatives and return the next morning.
When he left his former home without any intention of returning and in pursuance
of that intention did in fact move with his family and effects to his new home with
the intention of making it his residence for an indefinite time, it is my opinion, that,
when he and his wife arrived at his new home, it became eo instanti his domicile,
and that his leaving there under the circumstances with the intention of returning
the [797] next day did not change the fact. The concurrence of his intention to
make the Pennsylvania house his permanent residence with the fact, that he had
actually abandoned his former residence and moved to and put his goods in the
new one, made the latter his domicile. According to the authorities hereinbefore
referred to he must of necessity have had a domicile somewhere. If he did not have
one in Pennsylvania, where did he have one? The fact, that he left the Pennsylvania
house, after he had moved to it with his family and goods, to spend the night, did
not revive his domicile at his former residence on Day's run, because he had sold
that, and left it without any purpose of returning there. By going from his new
home to the house of his relatives to spend the night he certainly did not make the
house thus visited his domicile; therefore, unless the, Pennsylvania house was on
the evening of April 2, 1885, his domicile, he was in the anomalous position of
being without a domicile anywhere, which, as we have seen, is a legal impossibility;

and, that house having become his domicile, there is nothing in this case to show,
that he ever did in fact change or intend to change it or to establish a domicile
elsewhere.
It follows, therefore, that that house remained his domicile up to and at the time of
his death; and, that house being in the State of Pennsylvania, the laws of that State
must control the distribution of his personal estate notwithstanding the fact, that
he died in State of West Virginia.
For these reasons the decree of the Circuit Court must be reversed, and the cause
must be remanded to that court to be there further proceeded in according to the
principles announced in this opinion and the rules of courts of equity.
Reversed. Remanded.

YAMADA VS. YASUDA

Industrial pump manufacturer Yamada sued its insurer Yasuda for its failure to
provide a defense and indemnity in a case filed against Yamada in the Cook County
Circuit Court by CWC Fluids, Inc., d/b/a Culligan Water Conditioning where the
pump failed causing hydrochloric acid to spill throughout the plant ruining plaintiff's
regeneration system. Yasuda denied Yamada's tender of defense based on the
absolute pollution exclusion contained within the commercial liability insurance
policy issued by Yasuda to Yamada. The case had a tortured history as Yasuda had
filed a declaratory judgment action in Japan against Yamada asserting that it had
no duty of defense.
Kane County Circuit Judge Dunn granted Yamada's motion to enjoin Yasuda from
proceeding on its declaratory judgment action filed in the Tokyo, Japan District
Court. Yasuda filed an interlocutory appeal on the trial court's injunction which was
affirmed by the Second District Appellate Court. Judge Dunn then granted
defendant's motion to dismiss plaintiff's complaint based upon the insurance
policy's forum selection clause contained at endorsement 11 to the policy. On
plaintiff's motion to reconsider, Judge Dunn denied defendant's motion for
summary judgment finding that the forum selection clause was unenforceable.
Judge Dunn retired and the case was assigned to Judge Dixon. Judge Dixon asked
the parties to provide further briefing on the forum selection clause, denied
Yasuda's petition for interlocutory appeal on Judge Dunn's decision finding the
forum selection clause unenforceable and finally granted Yamada's motion for
summary judgment. The Second District Appellate Court then reversed Judge
Dixon's order, finding that the forum selection clause was enforceable ignoring the
fact that no Japanese court had ever interpreted a pollution exclusion clause. The
Second District also refused to acknowledge that the protection of insureds and
injured third-parties was a fundamental public policy of the State of Illinois.

In re In re Union Carbide Corp. Gas Plant Disaster at Bhopal, India, in Dec.

1984
Citation: 17 ELR 20580
No. Nos. 86-7517 et al., 809 F.2d 195/(2d Cir., 01/14/1987)

The court holds that the district court did not abuse its discretion by granting Union
Carbide's motion to dismiss 145 consolidated personal injury actions arising out of
the release of methyl isocyanate gas in December 1984 from Union Carbide's
Bhopal plant on the grounds of forum non conveniens. Soon after the accident, the
first of 145 class actions, involving approximately 200,000 plaintiffs, was filed in a
federal district court. The complaints were consolidated in the Southern District of
New York in June 1985. In the meantime, India enacted the Bhopal Gas Leak
Disaster (Processing of Claims) Act in March 1985, granting the Union of India (UOI)
the exclusive right to represent the victims. In April 1985, the UOI filed a complaint
in the Southern District of New York on behalf of all victims of the accident. In May
1986, the district court dismissed the consolidated complaints on the grounds of
forum non conveniens, subject to three conditions. The appellate court first
determines that plaintiffs' choice of a United States forum is entitled to little or no
deference, since all but a few of the 200,000 plaintiffs are Indian citizens who have
replaced their American counsel with the UOI, which now wishes to proceed in
Indian courts. The district court's finding that Indian courts provide a reasonably
adequate alternative forum was not clearly erroneous. Plaintiffs' contention that the
district court should retain jurisdiction because Union Carbide has its principal
place of business in the United States is not persuasive, since Union Carbide has
consented to Indian jurisdiction. Plaintiffs' assertion that the most probative
evidence on negligence and causation is located in the United States is not
supported by the record. The principal witnesses and documents are located
almost entirely in India. The court rejects plaintiffs' argument that transfer of the
cases to India will jeopardize a $350 million settlement being negotiated by
plaintiffs' American counsel. The settlement has never been finalized and the UOI,
which is itself a plaintiff in addition to representing the individual plaintiffs, is firmly
opposed to the settlement.
The court holds that Union Carbide may seek appellate review of the conditions
imposed by the district court on its forum non conveniens dismissal, since it
expressly reserved its right to appeal and it has made a sufficient showing of
prejudice from the second and third conditions. The court upholds the condition
requiring Union Carbide to consent to the Indian court's personal jurisdiction over it
and waive the statute of limitations as a defense. The court holds, however, that
the district court erred in conditioning its dismissal on Union Carbide's consent to
the enforceability in theUnited States of an Indian judgment. The district court
erroneously assumed that absent this condition, plaintiffs might not be able to
enforce an Indian judgment in the United States. The New York Foreign Country
Money Judgments Law provides that a foreign country judgment will generally be
recognized as conclusive between the parties, except in certain situations not
applicable here. The court rejects Union Carbide's argument that the court should
protect it against potential denials of due process by the Indian courts by
authorizing the district court to monitor the Indian proceedings and rectify any
abuses. The district court loses all further jurisdiction over the cases when it
dismisses on the grounds of forum non conveniens. Any denial of due process by
the Indian courts can be raised as a defense to any attempts to enforce an Indian
judgment in United States courts. Further, the language of the district court's
condition, which requires that the judgment "comport with minimal requirements of
due process," may be misconstrued as providing for a lesser standard than
American courts would otherwise require. The court holds that the district court
also erred in requiring Union Carbide to consent to discovery by plaintiffs in
accordance with the Federal Rules of Civil Procedure when Union Carbide is
confined to the more limited discovery under Indian law. Basic justice requires that
both sides have equal access to evidence.

Saudi Arabian Airlines V. CA

Laws Applicable: Art 19 and 21 of Civil Code
Lessons Applicable: Conflict of Laws, factual situation, connecting factor,
characterization, choice of law, State of the most significant relationship
FACTS:
Saudi Arabian Airlines (SAUDIA), foreign airlines corporation doing business in the
Philippines and may be served summons in agent in Makati, hired Milagros P.
Morada as a flight attendant for its airlines based in Jeddah, Saudi Arabia.
April 27, 1990: While on a lay-over in Jakarta, Indonesia, Morada went to a disco
dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both
Saudi nationals. It was almost morning when they returned to their hotels so they
agreed to have breakfast together at the room of Thamer. Shortly after Allah left
the room, Thamer attempted to rape Morada. Fortunately, a roomboy and several
security personnel heard her cries for help and rescued her. Indonesian police
arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.
When Morada returned to Jeddah, SAUDIA officials interrogated her about the
Jakarta incident and requested her to go back to Jakarta to help arrange the release
of Thamer and Allah. In Jakarta, SAUDIA Legal Officers negotiated with the police
for the immediate release of the detained crew members but did not succeed.
Afraid that she might be tricked into something she did not want because of her
inability to understand the local dialect, Morado refused to cooperate and declined
to sign a blank paper and a document written in the local dialect. Eventually,
SAUDIA allowed Morada to return to Jeddah but barred her from the Jakarta flights.
Indonesian authorities agreed to deport Thamer and Allah and they were again put
in service. While, Morada was transferred to Manila.
January 14, 1992: Morada was asked to see Mr. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. He brought her to the police station where the
police took her passport and questioned her about the Jakarta incident. The police
pressured her to drop the case against Thamer and Allah. Not until she agreed to
do so did the police return her passport and allowed her to catch the afternoon
flight out of Jeddah.
June 16, 1993: Morada, while in Riyadh Saudi Arabia, was not allowed to board the
plane to Manila and instead ordered to take a later flight to Jeddah to see Mr.
Miniewy. 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 but it was actually a notice for her to
appear before the court on June 27, 1993. Plaintiff then returned to Manila.
June 27, 1993: SAUDIA's Manila manager, Aslam Saleemi, assured Morada that the
investigation was routinary and that it posed no danger to her so she reported to
Miniewy in Jeddah for further investigation. She was brought to the Saudi court.
June 28, 1993: Saudi judge interrogated Morada through an interpreter about the
Jakarta incident for an hour and let her go. SAUDIA officers forbidden her to take
flight. She was told to go the Inflight Service Office where her passport was taken
and they told her to remain in Jeddah, at the crew quarters, until further orders.

July 3, 1993: She was brought to court again and to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. The court tried her, together with Thamer and
Allah, and found her 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.
Failing to seek the assistance of her employer, SAUDIA, she asked the Philippine
Embassy in Jeddah to help her while her case is on appeal. She continued to
workon the domestic flight of SAUDIA, while Thamer and Allah continued to serve in
the international flights.
Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Before her return to Manila, she
was terminated from the service by SAUDIA, without her being informed of the
cause.
November 23, 1993: Morada filed a Complaint for damages against SAUDIA, and
Khaled Al-Balawi, its country manager.
January 19, 1994: SAUDIA filed an Omnibus Motion To Dismiss on following
grounds: (1) that the Complaint states no cause of action against SAUDIA (2) that
defendant Al-Balawi is not a real party in interest (3) that the claim or demand set
forth in the Complaint has been waived, abandoned or otherwise extinguished and
(4) that the trial court has no jurisdiction to try the case.
After opposition to the motion to dismiss by Morada and reply by SAUDIA, Morada
filed an Amended Complaint dropping Al-Balawi. SAUDIA filed its Manifestation,
Motion to Dismiss Amended Complaint, subsequently motion for reconsideration
which were all denied.
SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of
Writ of Preliminary Injunction and/or Temporary Restraining Order with the Court of
Appeals. TRO was granted but Writ of Preliminary Injunction was denied.
CA: Philippines is an appropriate forum considering that the Amended Complaint's
basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly
within the jurisdiction of respondent Court. It further held that certiorari is not the
proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should
have proceeded to trial, and in case of an adverse ruling, find recourse in an
appeal.
SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary
Restraining Order:
o

It is a conflict of laws that must be settled at the outset:

Morada's claim for alleged abuse of rights occurred in the Kingdom of Saudi
Arabia.
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.
Morada: Amended Complaint is based on Articles 19 and 21 of the Civil Code which
is a matter of domestic law

ISSUE: W/N the RTC of Quezon City has jurisdiction over the case and it is the
proper forum for recovery of damages under Art. 21 of the Civil Code which should
govern.

HELD: YES. petition for certiorari is hereby DISMISSED. REMANDED to RTC of

Quezon City, Branch 89 for further proceedings

Trial court possesses jurisdiction over the persons of the parties

o By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court
o 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.
As to the choice of applicable law, it seeks to answer 2 important questions:

Where the factual antecedents satisfactorily establish the existence of a foreign

element, the problem could present a "conflicts" case
A factual situation that cuts across territorial lines and is affected by the diverse
laws of two or more states is said to contain a "foreign element".
o

Morada is a resident Philippine national

SAUDIA is a resident foreign corporation

o (1) What legal system should control a given situation where some of the
significant facts occurred in two or more states
o

(2) to what extent should the chosen legal system regulate the situation

Although ideally, all choice-of-law theories should intrinsically advance both notions
of justice and predictability, they do not always do so. The forum is then faced with
the problem of deciding which of these two important values should be stressed.

o by virtue of the employment of Morada with the SAUDIA as a flight stewardess,

events did transpire during her many occasions of travel across national borders,
particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that
caused a "conflicts" situation to arise

Before a choice can be made, it is necessary for us to determine under what

category a certain set of facts or rules fall

Forms of foreign element:

process of deciding whether or not the facts relate to the kind of question
specified in a conflicts rule

o Simple: 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
o

Complex

Violations of Articles 19 and 21 are actionable, with judicially enforceable remedies

in the municipal forum. RTC of Quezon City possesses jurisdiction over the subject
matter of the suit.
Pragmatic considerations, including the convenience of the parties, also weigh
heavily in favor of the RTC Quezon City assuming jurisdiction:

"characterization" or the "doctrine of qualification

purpose: to enable the forum to select the proper law

Choice-of-law rules invariably consist of: (essential element of conflict rules)
o factual situation/relationship or operative fact (such as property right, contract
claim); and
starting point of analysis
o test or connecting factor or point of contact (such as the situs of the res, the
place of celebration, the place of performance, or the place of wrongdoing) could
be:

private interest of the litigant

enforceability of a judgment if one is obtained

(1) The nationality of a person, his domicile, his residence, his place of sojourn, or
his origin

relative advantages and obstacles to a fair trial

(2) the seat of a legal or juridical person, such as a corporation

Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or

"oppress" the defendant, e.g. by inflicting upon him needless expense or
disturbance. but unless the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be disturbed.
Weighing the relative claims of the parties, the court a quo found it best to hear the
case in the Philippines. Had it refused to take cognizance of the case, it would be
forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in
the Kingdom of Saudi Arabia where she no longer maintains substantial
connections. That would have caused a fundamental unfairness to her. Moreover,
by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties.

(3) the situs of a thing, that is, the place where a thing is, or is deemed to be
situated. In particular, the lex situs is decisive when real rights are involved
(4) the place where an act has been done, the locus actus, such as the place
where a contract has been made, a marriage celebrated, a will signed or a tort
committed. The lex loci actus is particularly important in contracts and torts
(5) the place where an act is intended to come into effect, e.g., the place of
performance of contractual duties, or the place where a power of attorney is to be
exercised

 (6) the intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis;

v a resident foreign corporation engaged here in the business of international air

carriage

(7) the place where judicial or administrative proceedings are instituted or done.
The lex fori the law of the forum is particularly important because, as we have
seen earlier, matters of "procedure" not going to the substance of the claim
involved are governed by it; and because the lex fori applies whenever the content
of the otherwise applicable foreign law is excluded from application in a given case
for the reason that it falls under one of the exceptions to the applications of foreign
law; and

PHILSEC INVESTMENT et al vs.CA et al

G.R. No. 103493
June 19, 1997

(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of affreightment
Note that one or more circumstances may be present to serve as the possible test
for the determination of the applicable law.
Based on pleadings on record, including allegations in the Amended Complaint:
o Morada was made to face trial for very serious charges, including adultery and
violation of Islamic laws and tradition
o SAUDIA may have acted beyond its duties as employer by handing over the
person of Morada to Jeddah officials which contributed to and amplified or even
proximately caused additional humiliation, misery and suffering. It also took
advantage of the trust, confidence and faith in the guise of authority as employer.
o Conviction and imprisonment was wrongful but injury or harm was inflicted
upon her person and reputation which must be compensated or redress for the
wrong doing
Complaint involving torts
"connecting factor" or "point of contact" - place or places where the tortious
conduct or lex loci actus occurred = Philippines where SAUDIA deceived Morada, a
Filipina residing and working here.
"State of the most significant relationship" applied
o taken into account and evaluated according to their relative importance with
respect to the particular issue:

FACTS: Private respondent Ducat obtained separate loans from petitioners Ayala
International Finance Limited (AYALA) and Philsec Investment Corp (PHILSEC),
secured by shares of stock owned by Ducat.
In order to facilitate the payment of the loans, private respondent 1488, Inc.,
through its president, private respondent Daic, assumed Ducats obligation under
an Agreement, whereby 1488, Inc. executed a Warranty Deed with Vendors Lien by
which it sold to petitioner Athona Holdings, N.V. (ATHONA) a parcel of land in Texas,
U.S.A., while PHILSEC and AYALA extended a loan to ATHONA as initial payment of
the purchase price. The balance was to be paid by means of a promissory note
executed by ATHONA in favor of 1488, Inc. Subsequently, upon their receipt of the
money from 1488, Inc., PHILSEC and AYALA released Ducat from his indebtedness
and delivered to 1488, Inc. all the shares of stock in their possession belonging to
Ducat.
As ATHONA failed to pay the interest on the balance, the entire amount covered by
the note became due and demandable. Accordingly, private respondent 1488, Inc.
sued petitioners PHILSEC, AYALA, and ATHONA in the United States for payment of
the balance 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.
While the Civil Case was pending in the United States, petitioners filed a complaint
For Sum of Money with Damages and Writ of Preliminary Attachment against
private respondents in the RTC Makati. The complaint reiterated the allegation of
petitioners in their respective counterclaims in the Civil Action in 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.
Ducat moved to dismiss the Civil Case in the RTC-Makati on the grounds of (1) litis
pendentia, vis-a-vis the Civil Action in the U.S., (2) forum non conveniens, and (3)
failure of petitioners PHILSEC and BPI-IFL to state a cause of action.

(b) the place where the conduct causing the injury occurred

The trial court granted Ducats MTD, 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.

(c) the domicile, residence, nationality, place of incorporation and place of

business of the parties

Petitioners appealed to the CA, arguing that the trial court erred in applying the
principle of litis pendentia and forum non conveniens.

(d) the place where the relationship, if any, between the parties is centered

The CA affirmed the dismissal of Civil Case against Ducat, 1488, Inc., and Daic on
the ground of litis pendentia.

(a) the place where the injury occurred

v private respondent is a resident Filipina national, working here

ISSUE: is the Civil Case in the RTC-Makati barred by the judgment of the U.S. court?

HELD: CA reversed. Case remanded to RTC-Makati

NO
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. 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.
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.
Second. Nor is the trial courts refusal to take cognizance of the case justifiable
under the principle of forum non conveniens:
First, a MTD is limited to the grounds under Rule 16, sec.1, which does not include
forum non conveniens. The propriety of dismissing a case based on this principle
requires a factual determination, hence, it is more properly considered a matter of
defense.
Second, while it is within the discretion of the trial court to abstain from assuming
jurisdiction on this ground, it should do so only after vital facts are established, to
determine whether special circumstances require the courts desistance.
Brief Fact Summary. Plaintiff Carnival Cruise Lines, Inc. opposes a suit by a
passenger injured on one of their cruise ships, because the cruise tickets contained
an agreement that all matters relating to the cruise would be litigated before a
Florida court.
Synopsis of Rule of Law. Forum-selection clauses forcing individuals to agree to
submit to jurisdiction in a particular place are enforceable so long as they pass the
test for judicial fairness.