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Saudi Arabian Airlines V. CA
G.R. No. 122191 October 8, 1998
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
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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
o SAUDIA is a resident foreign corporation
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
Forms of foreign element:
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:
o private interest of the litigant
o enforceability of a judgment if one is obtained
o relative advantages and obstacles to a fair trial
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.

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:
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.
Before a choice can be made, it is necessary for us to
determine under what category a certain set of facts or rules fall
o "characterization" or the "doctrine of qualification
process of deciding whether or not the facts relate to the kind
of question specified in a conflicts rule
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:
(1) The nationality of a person, his domicile, his residence, his
place of sojourn, or his origin
(2) the seat of a legal or juridical person, such as a corporation
(3) the situs of a thing, that is, the place where a thing is, or is
deemed to be situated. In particular, the lex situs is decisive
when real rights are involved
(4) the place where an act has been done, the locus actus,
such as the place where a contract has been made, a marriage
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celebrated, a will signed or a tort committed. The lex loci actus
is particularly important in contracts and torts
(5) the place where an act is intended to come into effect,
e.g., the place of performance of contractual duties, or the place
where a power of attorney is to be exercised
(6) the intention of the contracting parties as to the law that
should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are
instituted or done. The lex 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
(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:
(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
(d) the place where the relationship, if any, between the
parties is centered
v private respondent is a resident Filipina national, working here
v a resident foreign corporation engaged here in the business of
international air carriage
COMMUNICATION MATERIALS AND DESIGN, INC et al
vs.CA et al.
G.R. No. 102223
August 22, 1996
FACTS: Petitioners COMMUNICATION MATERIALS AND DESIGN,
INC., (CMDI) and ASPAC MULTI-TRADE INC., (ASPAC) are both
domestic corporations.. Private Respondents ITEC, INC. and/or
ITEC, INTERNATIONAL, INC. (ITEC) are corporations duly
organized and existing under the laws of the State of Alabama,
USA. There is no dispute that ITEC is a foreign corporation not
licensed to do business in the Philippines.
ITEC entered into a contract with ASPAC referred to as
Representative Agreement. Pursuant to the contract, ITEC
engaged ASPAC as its exclusive representative in the
Philippines for the sale of ITECs products, in consideration of
which, ASPAC was paid a stipulated commission. Through a
License Agreement entered into by the same parties later on,
ASPAC was able to incorporate and use the name ITEC in its
own name. Thus , ASPAC Multi-Trade, Inc. became legally and
publicly known as ASPAC-ITEC (Philippines).
One year into the second term of the parties Representative
Agreement, ITEC decided to terminate the same, because
petitioner ASPAC allegedly violated its contractual commitment
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as stipulated in their agreements. ITEC charges the petitioners
and another Philippine Corporation, DIGITAL BASE
COMMUNICATIONS, INC. (DIGITAL), the President of which is
likewise petitioner Aguirre, of using knowledge and information
of ITECs products specifications to develop their own line of
equipment and product support, which are similar, if not
identical to ITECs own, and offering them to ITECs former
customer.
The complaint was filed with the RTC-Makati by ITEC, INC.
Defendants filed a MTD the complaint on the following grounds:
(1) That plaintiff has no legal capacity to sue as it is a foreign
corporation doing business in the Philippines without the
required BOI authority and SEC license, and (2) that plaintiff is
simply engaged in forum shopping which justifies the application
against it of the principle of forum non conveniens. The MTD
was denied.
Petitioners elevated the case to the respondent CA on a Petition
for Certiorari and Prohibition under Rule 65 of the Revised ROC.
It was dismissed as well. MR denied, hence this Petition for
Review on Certiorari under Rule 45.
ISSUE:
1. Did the Philippine court acquire jurisdiction over the person of
the petitioner corp, despite allegations of lack of capacity to sue
because of non-registration?
2. Can the Philippine court give due course to the suit or dismiss
it, on the principle of forum non convenience?
HELD: petition dismissed.
1. YES; We are persuaded to conclude that ITEC had been
engaged in or doing business in the Philippines for some
time now. This is the inevitable result after a scrutiny of the
different contracts and agreements entered into by ITEC with its
various business contacts in the country. Its arrangements, with
these entities indicate convincingly that ITEC is actively
engaging in business in the country.
A foreign corporation doing business in the Philippines may sue
in Philippine Courts although not authorized to do business here
against a Philippine citizen or entity who had contracted with
and benefited by said corporation. To put it in another way, a
party is estopped to challenge the personality of a corporation
after having acknowledged the same by entering into a contract
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with it. And the doctrine of estoppel to deny corporate existence the matter of the present forum not being the most
applies to a foreign as well as to domestic corporations. One who convenient as a ground for the suits dismissal, deserves scant
has dealt with a corporation of foreign origin as a corporate consideration.
entity is estopped to deny its corporate existence and capacity.
In Antam Consolidated Inc. vs. CA et al. we expressed our
chagrin over this commonly used scheme of defaulting local
companies which are being sued by unlicensed foreign
companies not engaged in business in the Philippines to invoke
the lack of capacity to sue of such foreign companies. Obviously,
the same ploy is resorted to by ASPAC to prevent the injunctive
action filed by ITEC to enjoin petitioner from using knowledge
possibly acquired in violation of fiduciary arrangements between
the parties.
2. YES; Petitioners insistence on the dismissal of this action due
to the application, or non application, of the private international
law rule of forum non conveniens defies well-settled rules of fair
play. According to petitioner, the Philippine Court has no venue
to apply its discretion whether to give cognizance or not to the
present action, because it has not acquired jurisdiction over the
person of the plaintiff in the case, the latter allegedly having no
personality to sue before Philippine Courts. This argument is
misplaced because the court has already acquired jurisdiction
over the plaintiff in the suit, by virtue of his filing the original
complaint. And as we have already observed, petitioner is not at
liberty to question plaintiffs standing to sue, having already
acceded to the same by virtue of its entry into the HONGKONG SHANGAI BANKING CORPORATION v.
Representative Agreement referred to earlier. SHERMAN
Thus, having acquired jurisdiction, it is now for the Philippine G.R. No. 72494 August 11, 1989
Court, based on the facts of the case, whether to give due
course to the suit or dismiss it, on the principle of forum non FACTS
convenience. Hence, the Philippine Court may refuse to assume In 1981, Eastern Book Supply Service PTE, Ltd., (Eastern) a
jurisdiction in spite of its having acquired jurisdiction. company incorporated in Singapore applied w/, & was granted
Conversely, the court may assume jurisdiction over the case if it by the Singapore branch of HSBC an overdraft facility in the max
chooses to do so; provided, that the following requisites are met: amount of Singapore $200,000 (w/c amount was subsequently
1) That the Philippine Court is one to which the parties may increased to Singapore $375,000) w/ interest at 3% over HSBC
conveniently resort to; prime rate, payable monthly, on amounts due under said
2) That the Philippine Court is in a position to make an intelligent overdraft facility. As a security for the repayment by Eastern of
decision as to the law and the facts; and, sums advanced by HSBC to it through the aforesaid overdraft
3) That the Philippine Court has or is likely to have power to facility, in 1982, Jack Sherman, Dodato Reloj, and a Robin de
enforce its decision. Clive Lowe, all of whom were directors of Eastern at such time,
The aforesaid requirements having been met, and in view of the executed a Joint and Several Guarantee in favor of HSBC
courts disposition to give due course to the questioned action, whereby Sherman, Reloj and Lowe agreed to pay, jointly and

severally, on demand all sums owed by Eastern to HSBC under
the aforestated overdraft facility.
The Joint and Several Guarantee provides that: This guarantee
and all rights, obligations and liabilities arising hereunder shall
be construed and determined under and may be enforced in
accordance with the laws of the Republic of Singapore. We
hereby agree that the Courts of Singapore shall have jurisdiction
over all disputes arising under this guarantee.
Eastern failed to pay its obligation. Thus, HSBC demanded
payment of the obligation from Sherman & Reloj, conformably w/
the provisions of the Joint and Several Guarantee. Inasmuch as
Sherman & Reloj still failed to pay, HSBC filed a complaint for
collection of a sum of money against them. Sherman & Reloj
filed a motion to dismiss on the grounds that (1) the court has
no jurisdiction over the subject matter of the complaint, and (2)
the court has no jurisdiction over the person of the defendants.
ISSUE
W/N Philippine courts should have jurisdiction over the suit.
RULING
YES. While it is true that "the transaction took place in
Singaporean setting" and that the Joint and Several Guarantee
contains a choice-of-forum clause, the very essence of due
process dictates that the stipulation that "this guarantee and all
rights, obligations & liabilities arising hereunder shall be
construed & determined under & may be enforced in accordance
w/ the laws of the Republic of Singapore. We hereby agree that
the Courts in Singapore shall have jurisdiction over all disputes
arising under this guarantee" be liberally construed. One basic
principle underlies all rules of jurisdiction in International Law: a
State does not have jurisdiction in the absence of some
reasonable basis for exercising it, whether the proceedings are
in rem quasi in rem or in personam. To be reasonable, the
jurisdiction must be based on some minimum contacts that will
not offend traditional notions of fair play and substantial justice.
Indeed, as pointed-out by HSBC at the outset, the instant case
presents a very odd situation. In the ordinary habits of life,
anyone would be disinclined to litigate before a foreign tribunal,
w/ more reason as a defendant. However, in this case, Sherman
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& Reloj are Philippine residents (a fact which was not disputed
by them) who would rather face a complaint against them before
a foreign court and in the process incur considerable expenses,
not to mention inconvenience, than to have a Philippine court try
and resolve the case. Their stance is hardly comprehensible,
unless their ultimate intent is to evade, or at least delay, the
payment of a just obligation.
The defense of Sherman & Reloj 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 Sherman & Reloj.
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 w/in 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 w/ the permission of the latter's
authorities. This authority, which finds its source in the concept
of sovereignty, is exclusive w/in 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.
Bank Of America V. CA (2003)
G.R. No. 120135 March 31, 2003
Lessons Applicable: forum non conveniens (conflicts of laws)
FACTS:
Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas)
were engaged in the shipping business owning 2 vessels:
Don Aurelio and El Champion

Because their business where doing well, Bank of
America (BA) offered them to take a loan for them to
increase their ships.
BA acquired through them as borrowers four more ships:
(a) El Carrier; (b) El General; (c) El Challenger; and (d) El
Conqueror. The registration, operation, income, funds,
possession of the vessel belonged to the corporation.
May 10, 1993: Litonjuas filed a complaint to the RTC Pasig
claming that during its operations and the foreclosure
sale, BA as trutees failed to fully render an account of the
income. They lost all their 6 vessels and 10% of their
personal funds and they still have an unpaid balance of
their loans.
BA NT&SA, and BA international filed a Motion to Dismiss
on grounds of forum non conveniens and lack of cause of
action against them
RTC and CA: Dismissed
ISSUE:
1. W/N there is grounds of forum non conveniens
2. W/N there is litis pendentia
HELD: Denied
1. NO.
The doctrine of forum non-conveniens, literally meaning
'the forum is inconvenient', emerged in private
international law to deter the practice of global forum
shopping
Under this doctrine, a court, in conflicts of law cases, may
refuse impositions on its jurisdiction where it is not the
most "convenient" or available forum and the parties are
not precluded from seeking remedies elsewhere.
Whether a suit should be entertained or dismissed on the
basis of said doctrine depends largely upon the facts of
the particular case and is addressed to the sound
discretion of the trial court.
Philippine Court may assume jurisdiction over the case if
it chooses to do so; provided, that the following requisites
are met:
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(1) that the Philippine Court is one to which the parties
may conveniently resort to; - present
(2) that the Philippine Court is in a position to make an
intelligent decision as to the law and the facts; and, -
present
(3) that the Philippine Court has or is likely to have power
to enforce its decision - present
This Court further ruled that while it is within the
discretion of the trial court to abstain from assuming
jurisdiction on this ground, it should do so only after vital
facts are established, to determine whether special
circumstances require the court's desistance; and that
the propriety of dismissing a case based on this principle
of forum non conveniens requires a factual
determination, hence it is more properly considered a
matter of defense
2. NO.
litis pendentia to be a ground for the dismissal of an
action there must be:
(a) identity of the parties or at least such as to represent
the same interest in both actions -present
(b) identity of rights asserted and relief prayed for, the
relief being founded on the same acts - not shown
(c) the identity in the two cases should be such that the
judgment which may be rendered in one would,
regardless of which party is successful, amount to res
judicata in the other - not shown
It merely mentioned that civil cases were filed in
Hongkong and England

RAYTHEON INTERNATIONAL VS ROUZIE GR 162894
FACTS
Brand Marine Services, Inc. (BMSI), a corporation duly organized
& existing under the laws of Connecticut, &Stockton Rouzie, Jr.,
an American citizen, entered into a contract
BMSI hired Rouzie as its representative to negotiate the sale of
services in several government projects in thePhilippines for an
agreed remuneration of 10% of the gross receipts.
Rouzie secured a service contract w/ the Rep. of Phil. on behalf
of BMSI for the dredging of rivers affected by the Mt.Pinatubo
eruption & mudflows.
Rouzie filed before the NLRC a suit against BMSI and Rust
International (Rust) for alleged nonpayment of commissions,
illegal termination, & breach of employment contract.
The Labor Arbiter order
ed BMSI & Rust to pay Rouzies money claims.
Upon appeal, the NLRC reversed & dismissed Rouzies complaint
on the ground of lack of jurisdiction.
Rouzie filed an action for damages before the RTC of La Union
(where he was a resident) against Raytheon International. He
reiterated that he was not paid the commissions due him from
the Pinatubo dredging project w/c hesecured on behalf of BMSI.
The complaint also averred that BMSI, RUST and Raytheon had
combined & functioned as 1 company.
RAYTHEON SOUGHT THE DISMISSAL OF THE COMPLAINT ON THE
GROUNDS OF FAILURE TO STATE ACAUSE OF ACTION & FORUM
NON CONVENIENS & PRAYED FOR DAMAGES BY WAY OF
COMPULSORY
COUNTERCLAIM. THE RTC DENIED RAYTHEONS MOTION. THE CA
AFFIRMED.
Raytheons contention: The written contract between Rouzie &
BMSI included a valid choice of law clause, that is, that the
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contract shall be governed by the laws of the State of
Connecticut. It also mentions the presence of foreign elements
in the dispute, namely that the parties & witnesses involved are
American corporations & citizens & the evidence to be presented
is located outside the Philippines, that renders our local courts
inconvenient forums. The foreign elements of the dispute
necessitate the immediate application of the doctrine of forum
non conveniens.
ISSUES
(a) W/N the RTC had jurisdiction.(b) W/N the complaint should be
dismissed on the ground of forum non conveniens.
RULING
(a) YES.
On the matter of jurisdiction over a conflicts-of-laws problem
where the case is filed in a Philippine court and where the court
has jurisdiction over the subject matter, the parties and the res,
it may or can proceed to try the case even if the rules of conflict-
of-laws or the convenience of the parties point to a foreign
forum. This is an exercise of sovereign prerogative of the country
where the case is filed.
Jurisdiction over the nature and subject matter of an action is
conferred by the Constitution and the law & by the material
allegations in the complaint, irrespective of w/n the plaintiff is
entitled to recover all or some of the claims or reliefs sought
therein. The case file was an action for damages arising from an
alleged breach of contract. Undoubtedly, the nature of the action
and the amount of damages prayed are w/in the jurisdiction of
the RTC.
As regards jurisdiction over the parties, the RTC acquired
jurisdiction over Rouzi upon the filing of the complaint. On the
other hand, jurisdiction over the person of Raytheon was
acquired by its voluntary appearance in court.
That THE SUBJECT CONTRACT INCLUDED A STIPULATION THAT
THE SAME SHALL BE GOVERNED BYTHE LAWS OF THE STATE OF
CONNECTICUT DOES NOT SUGGEST THAT THE PHILIPPINE
COURTS, OR ANY OTHER FOREIGN TRIBUNAL FOR THAT MATTER,
ARE PRECLUDED FROM HEARING THE CIVIL ACTION.

JURISDICTION & CHOICE OF LAW ARE 2 DISTINCT CONCEPTS.
Jurisdiction considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further question
whether the application of a substantive law which will
determine the merits of the case is fair to both parties. The
choice of law stipulation will be come relevant only when the
substantive issues of the instant case develop, that is, after
hearing on the merits proceeds before the trial court.
(b) NO.
UNDER THE DOCTRINE OF FORUM NON CONVENIENS, A COURT,
IN CONFLICTS-OF-LAWS CASES, MAY
REFUSE IMPOSITIONS ON ITS JURISDICTION WHERE IT IS NOT
THE MOST CONVENIENT OR
AVAILABLE FORUM AND THE PARTIES ARE NOT PRECLUDED
FROM SEEKING REMEDIES ELSEWHERE.
Raytheons averments of the foreign elements are not sufficient
to oust the RTC of its jurisdiction over the case and the parties
involved.
Moreover, the propriety of dismissing a case based on the
principle of forum non conveniens requires a factual
determination; hence, it is more properly considered as a matter
of defense. While it is w/c the discretion of the trial court to
abstain from assuming jurisdiction on this ground, it should do
so only after vital facts are established, to determine whether
special circumstances require the courts desistance.
9
SAUDI ARABIA AIRLINES vs. REBESENCIO
The Facts of the Case.
In this case, Respondents (complainants before the Labor
Arbiter) were recruited and hired by Saudia as Temporary Flight
Attendants with the accreditation and approval of the Philippine
Overseas Employment Administration. After undergoing
seminars required by the Philippine Overseas Employment
Administration for deployment overseas, as well as training
modules offered by Saudia (e.g., initial flight attendant/training
course and transition training), and after working as Temporary
Flight Attendants, respondents became Permanent Flight
Attendants. They then entered into Cabin Attendant contracts
with Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on May 16,
1990; Montassah B. Sacar-Adiong (Montassah) and Rouen Ruth
A. Cristobal (Rouen Ruth) on May 22, 1993; and Loraine
Schneider-Cruz (Loraine) on August 27, 1995.
Respondents continued their employment with Saudia until they
were separated from service on various dates in 2006.
Respondents contended that the termination of their
employment was illegal. They alleged that the termination was
made solely because they were pregnant.
Saudia anchored its disapproval of respondents maternity
leaves and demand for their resignation on its Unified
Employment Contract for Female Cabin Attendants (Unified
Contract). Under the Unified Contract, the employment of a
Flight Attendant who becomes pregnant is rendered void. It
provides:
(H) Due to the essential nature of the Air Hostess functions to be
physically fit on board to provide various services required in
normal or emergency cases on both domestic/international
flights beside her role in maintaining continuous safety and

security of passengers, and since she will not be able to
maintain the required medical fitness while at work in case of
pregnancy, accordingly, if the Air Hostess becomes pregnant at
any time during the term of this contract, this shall render her
employment contract as void and she will be terminated due to
lack of medical fitness.(Emphasis supplied)
On November 8, 2007, respondents filed a Complaint against
Saudia and its officers for illegal dismissal and for underpayment
of salary, overtime pay, premium pay for holiday, rest day,
premium, service incentive leave pay, 13th month pay,
separation pay, night shift differentials, medical expense
reimbursements, retirement benefits, illegal deduction, lay-over
expense and allowances, moral and exemplary damages, and
attorneys fees.
The issue to be resolved in the instant case is whether or
not there was an illegal dismissal of the respondents?
The Supreme Court's Decision.
Yes, the respondents were illegally dismissed.
The initial issue here was whether or not the Philippine courts
have jurisdiction over the case. Petitioner Saudia states that the
Philippine courts have no jurisdiction and that the law that
should be applied in the instant case is Saudi Arabia law. The
Court stated that this is incorrect. The Court has jurisdiction in
this case.
The Court stated in the case;
Saudia asserts that stipulations set in the Cabin Attendant
contracts require the application of the laws of Saudi Arabia. It
insists that the need to comply with these stipulations calls into
operation the doctrine of forum non conveniens and, in turn,
makes it necessary for Philippine tribunals to refrain from
exercising jurisdiction. Forum non conveniens, like the rules of
forum shopping, litis pendentia, and res judicata, is a means of
addressing the problem of parallel litigation. While the rules of
forum shopping, litis pendentia, and res judicata are designed to
address the problem of parallel litigation within a single
jurisdiction, forum non conveniens is a means devised to
address parallel litigation arising in multiple jurisdictions.
10
On the matter of pleading forum non conveniens, we state the
rule, thus: Forum non conveniens must not only be clearly
pleaded as a ground for dismissal; it must be pleaded as such at
the earliest possible opportunity. Otherwise, it shall be deemed
waived.
It further stated:
Forum non conveniens finds no application and does not operate
to divest Philippine tribunals of jurisdiction and to require the
application of foreign law. Saudia invokes forum non conveniens
to supposedly effectuate the stipulations of the Cabin Attendant
contracts that require the application of the laws of Saudi Arabia.
xxx
So informed and animated, we emphasize the glaringly
discriminatory nature of Saudias policy. As argued by
respondents, Saudias policy entails the termination of
employment of flight attendants who become pregnant. At the
risk of stating the obvious, pregnancy is an occurrence that
pertains specifically to women. Saudias policy excludes from
and restricts employment on the basis of no other consideration
but sex.
We do not lose sight of the reality that pregnancy does present
physical limitations that may render difficult the performance of
functions associated with being a flight attendant. Nevertheless,
it would be the height of iniquity to view pregnancy as a
disability so permanent and immutable that it must entail the
termination of ones employment. It is clear to us that any
individual, regardless of gender, may be subject to exigencies
that limit the performance of functions. However, we fail to
appreciate how pregnancy could be such an impairing
occurrence that it leaves no other recourse but the complete
termination of the means through which a woman earns a living.
Oddly enough, the petitioner Saudia themselves stated that the
Saudi law does not allow the termination of employment of
women who take maternity leaves;
 11

Consistent with lex loci intentionis, to the extent that it is proper

and practicable (i.e., to make an intelligent decision),
Philippine tribunals may apply the foreign law selected by the
parties. In fact, (albeit without meaning to make a
pronouncement on the accuracy and reliability of respondents
citation) in this case, respondents themselves have made
averments as to the laws of Saudi Arabia. In their Comment,
respondents write:

Under the Labor Laws of Saudi Arabia and the Philippines[,] it is

illegal and unlawful to terminate the employment of any woman
by virtue of pregnancy. The law in Saudi Arabia is even more
harsh and strict [sic] in that no employer can terminate the
employment of a female worker or give her a warning of the
same while on Maternity Leave, the specific provision of Saudi
Labor Laws on the matter is hereto quoted as follows: An
employer may not terminate the employment of a female worker
or give her a warning of the same while on maternity leave. Fabre vs. Court of Appeals
(Article 155, Labor Law of the Kingdom of Saudi Arabia, Royal 259 SCRA 426
Decree No. M/51.) G.R. No. 111127
July 26, 1996

Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of
a Mazda minibus. They used the bus principally in connection
with a bus service for school children which they operated in
Manila. It was driven by Porfirio Cabil.

On November 2, 1984 private respondent Word for the World

Christian Fellowship Inc. (WWCF) arranged with the petitioners
for the transportation of 33 members of its Young Adults Ministry
from Manila to La Union and back in consideration of which
private respondent paid petitioners the amount of P3,000.00.

The usual route to Caba, La Union was through Carmen,

Pangasinan. However, the bridge at Carmen was under repair, so
that petitioner Cabil, who was unfamiliar with the area (it being
his first trip to La Union), was forced to take a detour through the
town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night,
petitioner Cabil came upon a sharp curve on the highway. The
road was slippery because it was raining, causing the bus, which
was running at the speed of 50 kilometers per hour, to skid to
the left road shoulder. The bus hit the left traffic steel brace and
 12

sign along the road and rammed the fence of one Jesus Escano, of the general population. We think that Article 1732 deliberately
then turned over and landed on its left side, coming to a full stop refrained from making such distinctions.
only after a series of impacts. The bus came to rest off the road.
A coconut tree which it had hit fell on it and smashed its front
portion. Because of the mishap, several passengers were injured
particularly Amyline Antonio.

Criminal complaint was filed against the driver and the spouses
were also made jointly liable. Spouses Fabre on the other hand
contended that they are not liable since they are not a common
carrier. The RTC of Makati ruled in favor of the plaintiff and the
defendants were ordered to pay jointly and severally to the
plaintiffs. The Court of Appeals affirmed the decision of the trial
court.

Issue: Whether the spouses Fabre are common carriers?

Held: Petition was denied. Spouses Fabre are common carriers.

The Supreme Court held that this case actually involves a

contract of carriage. Petitioners, the Fabres, did not have to be
engaged in the business of public transportation for the
provisions of the Civil Code on common carriers to apply to
them. As this Court has held: 10 Art. 1732, Common carriers are
persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or
both, by land, water, or air for compensation, offering their
services to the public.
The above article makes no distinction between one whose
principal business activity is the carrying of persons or goods or
both, and one who does such carrying only as an ancillary
activity (in local idiom, as "a sideline"). Article 1732 also
carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general
public," i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment
Air France vs Rafael Carrascoso
In March 1958, Rafael Carrascoso and several other Filipinos
were tourists en route to Rome from Manila. Carrascoso was
issued a first class round trip ticket by Air France. But during a
stop-over in Bangkok, he was asked by the plane manager of Air
France to vacate his seat because a white man allegedly has a
better right than him. Carrascoso protested but when things
got heated and upon advise of other Filipinos on board,
Carrascoso gave up his seat and was transferred to the planes
tourist class.
After their tourist trip when Carrascoso was already in the
Philippines, he sued Air France for damages for the
embarrassment he suffered during his trip. In court, Carrascoso
testified, among others, that he when he was forced to take the
tourist class, he went to the planes pantry where he was
approached by a plane purser who told him that he noted in the
planes journal the following:
First-class passenger was forced to go to the tourist class against
his will, and that the captain refused to intervene

The said testimony was admitted in favor of Carrascoso. The trial
court eventually awarded damages in favor of Carrascoso. This
was affirmed by the Court of Appeals.
Air France is assailing the decision of the trial court and the CA.
It avers that the issuance of a first class ticket to Carrascoso was
not an assurance that he will be seated in first class because
allegedly in truth and in fact, that was not the true intent
between the parties.
Air France also questioned the admissibility of Carrascosos
testimony regarding the note made by the purser because the
said note was never presented in court.
ISSUE 1: Whether or not Air France is liable for damages and on
what basis.
ISSUE 2: Whether or not the testimony of Carrasoso regarding
the note which was not presented in court is admissible in
evidence.
HELD 1: Yes. It appears that Air Frances liability is based on
culpa-contractual and on culpa aquiliana.
Culpa Contractual
There exists a contract of carriage between Air France and
Carrascoso. There was a contract to furnish Carrasocoso a first
class passage; Second, That said contract was breached when
Air France failed to furnish first class transportation at Bangkok;
and Third, that there was bad faith when Air Frances employee
compelled Carrascoso to leave his first class accommodation
berth after he was already, seated and to take a seat in the
tourist class, by reason of which he suffered inconvenience,
embarrassments and humiliations, thereby causing him mental
anguish, serious anxiety, wounded feelings and social
humiliation, resulting in moral damages.
The Supreme Court did not give credence to Air Frances claim
that the issuance of a first class ticket to a passenger is not an
assurance that he will be given a first class seat. Such claim is
simply incredible.
13
Culpa Aquiliana
Here, the SC ruled, even though there is a contract of carriage
between Air France and Carrascoso, there is also a tortuous act
based on culpa aquiliana. Passengers do not contract merely for
transportation. They have a right to be treated by the carriers
employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from
such employees. So it is, that any rule or discourteous conduct
on the part of employees towards a passenger gives the latter
an action for damages against the carrier. Air Frances contract
with Carrascoso is one attended with public duty. The stress of
Carrascosos action is placed upon his wrongful expulsion. This is
a violation of public duty by the Air France a case of quasi-
delict. Damages are proper.
HELD: 2: Yes. The testimony of Carrascoso must be admitted
based on res gestae. The subject of inquiry is not the entry, but
the ouster incident. Testimony on the entry does not come within
the proscription of the best evidence rule. Such testimony is
admissible. Besides, when the dialogue between Carrascoso and
the purser happened, the impact of the startling occurrence was
still fresh and continued to be felt. The excitement had not as
yet died down. Statements then, in this environment, are
admissible as part of the res gestae. The utterance of the purser
regarding his entry in the notebook was spontaneous, and
related to the circumstances of the ouster incident. Its
trustworthiness has been guaranteed. It thus escapes the
operation of the hearsay rule. It forms part of the res gestae.
Ganzon vs. Court of Appeals
(161 SCRA 646)
Facts: Gelacio Tumambing contracted the services of Mauro B.
Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to
the port of Manila on board the lighter LCT "Batman." Pursuant
to this agreement, Mauro B. Ganzon sent his lighter "Batman" to
Mariveles where it docked in 3 feet of water. Then, Gelacio
Tumambing delivered the scrap iron to Filomeno Niza, captain of

the lighter, for loading which was actually begun on the same
date by the crew of the lighter under the captain's supervision.
When about half of the scrap iron was already loaded, Mayor
Jose Advincula of Mariveles, Bataan, arrived and demanded
P5,000.00 from Gelacio Tumambing. The latter resisted the
shakedown and after a heated argument between them, Mayor
Jose Advincula drew his gun and fired at Gelacio Tumambing.
The gunshot was not fatal but Tumambing had to be taken to a
hospital in Balanga, Bataan, for treatment. After sometime, the
loading of the scrap iron was resumed. But on 4 December 1956,
Acting Mayor Basilio Rub, accompanied by 3 policemen, ordered
captain Filomeno Niza and his crew to dump the scrap iron
where the lighter was docked. The rest was brought to the
compound of NASSCO. Later on Acting Mayor Rub issued a
receipt stating that the Municipality of Mariveles had taken
custody of the scrap iron.
Tumambing instituted with CFI Manila an action against Ganzon
for damages based on culpa contractual. The trial court
rendered a decision absolving Ganzon from liability. On appeal,
however, the appellate court reversed and set aside the decision
appealed. Hence, the petition for review on certiorari.
Held: Now the petitioner is changing his theory to caso fortuito.
Such a change of theory on appeal we cannot, however, allow. In
any case, the intervention of the municipal officials was not In
any case, of a character that would render impossible the
fulfillment by the carrier of its obligation. The petitioner was not
duty bound to obey the illegal order to dump into the sea the
scrap iron. Moreover, there is absence of sufficient proof that the
issuance of the same order was attended with such force or
intimidation as to completely overpower the will of the
petitioner's employees. The mere difficulty in the fullfilment of
the obligation is not considered force majeure. We agree with
the private respondent that the scraps could have been properly
unloaded at the shore or at the NASSCO compound, so that after
the dispute with the local officials concerned was settled, the
scraps could then be delivered in accordance with the contract
of carriage.
14
Compania Maritima vs Court of Appeals and Vicente
Concepcion
(162 SCRA 685)
Facts: Vicente Concepcion is doing business under the name of
Consolidated Construction. Being a Manila based contractor,
Concepcion had to ship his construction equipment to Cagayan
de Oro. On August 28, 1964, Concepcion shipped 1 unit pay
loader, 4 units of 6x6 Roe trucks, and 2 pieces of water tanks.
The aforementioned equipment was loaded aboard the MV Cebu,
which left Manila on August 30, 1964 and arrived at Cagayan de
Oro on September 1, 1964. The Reo trucks and water tanks were
safely unloaded however the pay loader suffered damage while
being unloaded. The damaged pay loader was taken to the
petitioners compound in Cagayan de Oro.
Consolidated Construction thru Vicente Concepcion wrote
Compania Maritima to demand a replacement of the broken pay
loader and also asked for damages. Unable to get a response,
Concepcion sent another demand letter. Petitioner meanwhile,
sent the damaged payloader to Manila, it was weighed at San
Miguel Corporation, where it was found that the payloader
actually weighed 7.5 tons and not 2.5 tons as declared in its bill
of lading. Due to this, petitioner denied the claim for damages of
Consolidated Construction. Consolidated then filed an action for
damages against petitioner with the Court of First Instance of
Manila. The Court of First Instance dismissed the complaint
stating that the proximate cause of the fall of the payloader
which caused its damage was the act or omission of Vicente
Concepcion for misrepresenting the weight of the payloader as
2.5 tons instead of its true weight of 7.5 tons. On appeal, the
Court of Appeals, reversed the decision of the Court of First
Instance and ordered the plaintiff to pay Concepcion damages.
Hence this petition.
Issue: Whether or not the act of respondent Concepcion of
misdeclaring the true weight of the payloader the proximate and
only cause of the damage of the payloader?
Held: No, Compania Maritima is liable for the damage to the
payloader. The General rule under Articles 1735 and 1752 of the
Civil Code is that common carriers are presumed to be at fault or

to have acted negligently in case the goods transported by them
are lost, destroyed, or had deteriorated. To overcome the
presumption of liability for the loss destruction or deterioration
common carriers must prove that they have exercised
extraordinary diligence as required by Article 1733 of the Civil
Code.
Extraordinary Diligence in the vigilance over the goods tendered
for shipment requires the common carrier to know and follow the
required precaution fro avoiding damage or destruction of the
goods entrusted to it for safe carriage and delivery. It requires
common carriers to render service with the greatest skill and
foresight and to use all reasonable means to ascertain the
15
nature and characteristics of goods tendered for shipment and
to exercise due care in the handling and stowage including such
methods as their nature requires.
The Supreme Court further held that the weight in a bill of lading
are prima facie evidence of the amount received and the fact
that the weighing was done by another will not relieve the
common carrier where it accepted such weight and entered it in
on the bill of lading. The common carrier can protect themselves
against mistakes in the bill of lading as to weight by exercising
extraordinary diligence before issuing such.