You are on page 1of 7

HSBC vs SHERMAN 176 SCRA 331 (1989) traditional notions of fair play and substantial

justice
Facts: Eastern Book & Supply Service
(Singapore) was granted by HSBC Singapore an
it has long been established in law and
overdraft facility.
Sherman, et. al. and directors of Eastern Book jurisprudence that jurisdiction of courts is fixed
executed a Joint and Several Guarantee in favor by law; it cannot be conferred by the will,
of HSBC. Eastern Book defaulted. Hence, HSBC submission or consent of the parties.
filed a suit for collection against them before
the Regional Trial Court of Quezon
City. Sherman filed a Motion to Dismiss on the
ground of lack of jurisdiction over the complaint
and persons of the defendants. The guarantee
provides: This guarantee and all rights, SALVACION vs CENTRAL BANK 278 SCRA 27
obligations and liabilities arising hereunder shall FACTS:
be construed and determined under and may
be enforced in accordance with the laws of
Greg Bartelli, an American tourist, was arrested
the Republic of Singapore.
for committing four counts of rape and serious
illegal detention against Karen Salvacion. Police
Held: Philippine courts have jurisdiction over recovered from him several dollar checks and a
the suit. The stipulation shall be liberally dollar account in the China Banking Corp. He
construed. A stipulation as to venue does not was, however, able to escape from prison. In a
preclude the filing of suits in the residence of civil case filed against him, the trial court
plaintiff or defendant under Sec 2 (b), Rule 4 of awarded Salvacion moral, exemplary and
the Rules of Court, in the absence of qualifying attorneys fees amounting to almost
or restrictive words in the agreement which P1,000,000.00.
indicate that the place named is the only venue
agreed upon by the parties. The parties did not
Salvacion tried to execute the judgment on the
thereby stipulate that only the courts
of Singapore, to the exclusion of all the rest, dollar deposit of Bartelli with the China Banking
have jurisdiction. Neither did the clause in Corp. but the latter refused arguing that Section
question operate to divest Philippine courts of 11 of Central Bank Circular No. 960 exempts
jurisdiction. In International Law, jurisdiction is foreign currency deposits from attachment,
often defined as the right of a state to exercise garnishment, or any other order or process of
authority over persons and things within its any court, legislative body, government agency
boundaries subject to certain exceptions. This or any administrative body whatsoever.
authority, which finds its source in the concept Salvacion therefore filed this action for
of sovereignty, is exclusive within and declaratory relief in the Supreme Court.
throughout the domain of the state. A state is
competent to take hold of any judicial matter it
ISSUE:
sees fit by making its courts and agencies
assume jurisdiction over all kinds of cases
brought before them. Should Section 113 of Central Bank Circular No.
While it is true that "the transaction took place 960 and Section 8 of Republic Act No. 6426, as
in Singaporean setting" and that the Joint and amended by PD 1246, otherwise known as the
Several Guarantee contains a choice-of-forum Foreign Currency Deposit Act be made
clause, the very essence of due process dictates applicable to a foreign transient?
that the stipulation that "[t]his guarantee and
HELD: The provisions of Section 113 of
all rights, obligations and liabilities arising
Central Bank Circular No. 960 and PD No. 1246,
hereunder shall be construed and determined
insofar as it amends Section 8 of Republic Act
under and may be enforced in accordance with
No. 6426, are hereby held to be INAPPLICABLE
the laws of the Republic of Singapore. We
to this case because of its peculiar
hereby agree that the Courts in Singapore shall circumstances. Respondents are hereby
have jurisdiction over all disputes arising under required to comply with the writ of execution
this guarantee" be liberally construed. One issued in the civil case and to release to
basic principle underlies all rules of jurisdiction petitioners the dollar deposit of Bartelli in such
in International Law: a State does not have amount as would satisfy the judgment.
jurisdiction in the absence of some reasonable
basis for exercising it, whether the proceedings RATIO:
are in rem quasi in rem or in personam. To be Supreme Court ruled that the questioned law
reasonable, the jurisdiction must be based on makes futile the favorable judgment and award
some minimum contacts that will not offend of damages that Salvacion and her parents fully
deserve. It then proceeded to show that the Appellees argue that what Article 16 of the Civil
economic basis for the enactment of RA No. Code of the Philippines pointed out as
6426 is not anymore present; and even if it still the national law is the internal law of California.
exists, the questioned law still denies those But as above explained the laws of California
entitled to due process of law for being have prescribed two sets of laws for its citizens,
unreasonable and oppressive. The intention of one for residents therein and another for those
the law may be good when enacted. The law domiciled in other jurisdictions. Reason
failed to anticipate the iniquitous effects demands that We should enforce the California
producing outright injustice and inequality such internal law prescribed for its citizens residing
as the case before us. therein, and enforce the conflict of laws rules
The SC adopted the comment of the Solicitor for the citizens domiciled abroad. If we must
General who argued that the Offshore Banking
enforce the law of California as in comity we are
System and the Foreign Currency Deposit
bound to go, as so declared in Article 16 of our
System were designed to draw deposits from
Civil Code, then we must enforce the law of
foreign lenders and investors and,
California in accordance with the express
subsequently, to give the latter protection.
However, the foreign currency deposit made by mandate thereof and as above explained, i.e.,
a transient or a tourist is not the kind of deposit apply the internal law for residents therein, and
encouraged by PD Nos. 1034 and 1035 and its conflict-of-laws rule for those domiciled
given incentives and protection by said laws abroad.
because such depositor stays only for a few
days in the country and, therefore, will maintain It is argued on appellees' behalf that the clause
his deposit in the bank only for a short time. "if there is no law to the contrary in the place
Considering that Bartelli is just a tourist or a where the property is situated" in Sec. 946 of
transient, he is not entitled to the protection of the California Civil Code refers to Article 16 of
Section 113 of Central Bank Circular No. 960 the Civil Code of the Philippines and that the
and PD No. 1246 against attachment, law to the contrary in the Philippines is the
garnishment or other court processes. provision in said Article 16 that the national
law of the deceased should govern. This
Further, the SC said: In fine, the application of contention can not be sustained. As explained
the law depends on the extent of its justice. in the various authorities cited above the
Eventually, if we rule that the questioned national law mentioned in Article 16 of our Civil
Section 113 of Central Bank Circular No. 960
Code is the law on conflict of laws in the
which exempts from attachment, garnishment,
California Civil Code, i.e., Article 946, which
or any other order or process of any court,
authorizes the reference or return of the
legislative body, government agency or any
question to the law of the testator's domicile.
administrative body whatsoever, is applicable to
The conflict of laws rule in California, Article
a foreign transient, injustice would result
especially to a citizen aggrieved by a foreign 946, Civil Code, precisely refers back the case,
guest like accused Greg Bartelli. This would when a decedent is not domiciled in California,
negate Article 10 of the New Civil Code to the law of his domicile, the Philippines in the
which provides that in case of doubt in case at bar. The court of the domicile can not
the interpretation or application of laws, it and should not refer the case back to California;
is presumed that the lawmaking body such action would leave the issue incapable of
intended right and justice to prevail. determination because the case will then be like
a football, tossed back and forth between the
AZNAR V. GARCIA two states, between the country of which the
decedent was a citizen and the country of his
Edward E. Christensen was a citizen of the
domicile. The Philippine court must apply its
United States and of the State of California at
the time of his death. But there is also no own law as directed in the conflict of laws rule
question that at the time of his death he was of the state of the decedent, if the question has
domiciled in the Philippines to be decided, especially as the application of
the internal law of California provides no
Renvoi doctrine- a jural matter is presented legitime for children while the Philippine law,
which the conflict-of-laws rule of the forum Arts. 887(4) and 894, Civil Code of the
refers to a foreign law, the conflict-of-laws rule
Philippines, makes natural children legally
of which, in turn, refers the matter back again
to the law of the forum. According to this theory acknowledged forced heirs of the parent
'the law of a country' means the whole of its recognizing them.
law.
We therefore find that as the domicile of the Bahrains Amiri Decree No. 23 of 1976 (Labour
deceased Christensen, a citizen of California, is Law for the Private Sector).
the Philippines, the validity of the provisions of
his will depriving his acknowledged natural NLRC applied the Amiri Deere, No. 23 of 1976,
child, the appellant, should be governed by the which provides for greater benefits than those
Philippine Law, the domicile, pursuant to Art. stipulated in the overseas-employment
946 of the Civil Code of California, not by the contracts of the claimants. It was of the belief
internal law of California.. that where the laws of the host country are
more favorable and beneficial to the workers,
CADALIN V. POEA ADMINISTRATOR then the laws of the host country shall form part
of the overseas employment contract. It
On June 6, 1984, Cadalin, Amul and Evangelista, approved the observation of the POEA
in their own behalf and on behalf of 728 other Administrator that in labor proceedings, all
OCWs instituted a class suit by filing an doubts in the implementation of the provisions
Amended Complaint with the POEA for money of the Labor Code and its implementing
claims arising from their recruitment by ASIA regulations shall be resolved in favor of labor.
INTERNATIONAL BUILDERS CORPORATION
(AIBC) and employment by BROWN & ROOT The overseas-employment contracts, which
INTERNATIONAL, INC (BRI) which is a foreign were prepared by AIBC and BRII themselves,
corporation with headquarters in Houston, provided that the laws of the host country
Texas, and is engaged in construction; while became applicable to said contracts if they offer
AIBC is a domestic corporation licensed as a terms and conditions more favorable than those
service contractor to recruit, mobilize and stipulated therein. However there was a part of
deploy Filipino workers for overseas the employment contract which provides that
employment on behalf of its foreign principals. the compensation of the employee may be
adjusted downward so that the total
The amended complaint sought the payment of computation plus the non-waivable benefits
the unexpired portion of the employment shall be equivalent to the compensation
contracts, which was terminated prematurely, therein agree, another part of the same
and secondarily, the payment of the interest of provision categorically states that total
the earnings of the Travel and Reserved Fund; remuneration and benefits do not fall below that
interest on all the unpaid benefits; area wage of the host country regulation and custom.
and salary differential pay; fringe benefits;
reimbursement of SSS and premium not Any ambiguity in the overseas-employment
remitted to the SSS; refund of withholding tax contracts should be interpreted against AIBC
not remitted to the BIR; penalties for and BRII, the parties that drafted it. Article 1377
committing prohibited practices; as well as the of the Civil Code of the Philippines provides:
suspension of the license of AIBC and the The interpretation of obscure words or
accreditation of BRII stipulations in a contract shall not favor the
party who caused the obscurity.
ISSUE:
Said rule of interpretation is applicable to
1. WON the foreign law should govern or the contracts of adhesion where there is already a
contract of the parties.(WON the complainants prepared form containing the stipulations of the
who have worked in Bahrain are entitled to the employment contract and the employees
above-mentioned benefits provided by Amiri merely take it or leave it. The presumption is
Decree No. 23 of Bahrain). that there was an imposition by one party
against the other and that the employees
2. WON the Bahrain Law should apply in the signed the contracts out of necessity that
case. (Assuming it is applicable WON reduced their bargaining power.
complainants claim for the benefits provided We read the overseas employment contracts in
therein have prescribed.) question as adopting the provisions of the Amiri
Decree No. 23 of 1976 as part and parcel
RULING:
thereof. The parties to a contract may select the
1. NLRC set aside Section 1, Rule 129 of the law by which it is to be governed. In such a
1989 Revised Rules on Evidence governing the case, the foreign law is adopted as a system
pleading and proof of a foreign law and to regulate the relations of the parties, including
admitted in evidence a simple copy of the questions of their capacity to enter into the
contract, the formalities to be observed by not specifically intended to be substantive,
them, matters of performance, and so forth. hence, the prescriptive period provided in the
Instead of adopting the entire mass of the law of the forum should apply. The Court
foreign law, the parties may just agree that observed: . . . we are dealing with a statute of
specific provisions of a foreign statute shall be limitations of a foreign country, and it is not
deemed incorporated into their contract as a clear on the face of the statute that its purpose
set of terms. By such reference to the was to limit the enforceability, outside as well
provisions of the foreign law, the contract does as within the foreign country concerned, of the
not become a foreign contract to be governed substantive rights to which the statute pertains.
by the foreign law. The said law does not We think that as a yardstick for determining
operate as a statute but as a set of contractual whether that was the purpose, this test is the
terms deemed written in the contract. most satisfactory one.

A basic policy of contract is to protect the The Court further noted: Applying that test
expectation of the parties. Such party here it appears to us that the libellant is entitled
expectation is protected by giving effect to the to succeed, for the respondents have failed to
parties own choice of the applicable law. The satisfy us that the Panamanian period of
choice of law must, however, bear some limitation in question was specifically aimed
relationship the parties or their transaction. against the particular rights which the libellant
There is no question that the contracts sought seeks to enforce. The Panama Labor Code is a
to be enforced by claimants have a direct statute having broad objectives. The American
connection with the Bahrain law because the court applied the statute of limitations of New
services were rendered in that country. York, instead of the Panamanian law, after
finding that there was no showing that the
2. NLRC ruled that the prescriptive period for Panamanian law on prescription was intended to
the filing of the claims of the complainants was be substantive. Being considered merely a
3 years, as provided in Article 291 of the Labor procedural law even in Panama, it has to give
Code of the Philippines, and not ten years as way to the law of the forum (local Court) on
provided in Article 1144 of the Civil Code of the prescription of actions.
Philippines nor one year as provided in the
Amiri Decree No. 23 of 1976. However the characterization of a statute into a
procedural or substantive law becomes
Article 156 of the Amiri Decree No. 23 of 1976 irrelevant when the country of the forum (local
provides: Court) has a borrowing statute. Said statute
A claim arising out of a contract of employment has the practical effect of treating the foreign
shall not actionable after the lapse of one year statute of limitation as one of substance. A
from the date of the expiry of the Contract. borrowing statute directs the state of the
forum (local Court) to apply the foreign statute
As a general rule, a foreign procedural law will
of limitations to the pending claims based on a
not be applied in the forum (local court),
foreign law. While there are several kinds of
Procedural matters, such as service of process,
borrowing statutes, one form provides that an
joinder of actions, period and requisites for
action barred by the laws of the place where it
appeal, and so forth, are governed by the laws
accrued will not be enforced in the forum even
of the forum. This is true even if the action is
though the local statute was not run against it.
based upon a foreign substantive law.
Section 48 of Code of Civil Procedure is of this
A law on prescription of actions is sui generis in
kind. It provides: If by the laws of the state or
Conflict of Laws in the sense that it may be
country where the cause of action arose, the
viewed either as procedural or substantive,
action is barred, it is also barred in the
depending on the characterization given such a
Philippine Islands.
law. In Bournias v. Atlantic Maritime Company
(220 F. 2d. 152, 2d Cir. [1955]), where the issue Section 48 has not been repealed or amended
was the applicability of the Panama Labor Code by the Civil Code of the Philippines. In the light
in a case filed in the State of New York for of the 1987 Constitution, however, Section 48
claims arising from said Code, the claims would cannot be enforced ex proprio vigore insofar as
have prescribed under the Panamanian Law but it ordains the application in this jurisdiction of
not under the Statute of Limitations of New Section 156 of the Amiri Decree No. 23 of 1976.
York. The U.S. Circuit Court of Appeals held that
the Panamanian Law was procedural as it was
The courts of the forum (local Court) will not indicative of such intention. Domicile denotes a
enforce any foreign claim obnoxious to the fixed permanent residence to which when
forums public policy. To enforce the one-year absent for business or pleasure, or for like
prescriptive period of the Amiri Decree No. 23 of reasons, one intends to return.
1976 as regards the claims in question would
contravene the public policy on the protection Article 50 of the Civil Code decrees that "[f]or
to labor. the exercise of civil rights and the fulfillment of
civil obligations, the domicile of natural persons
In the Declaration of Principles and State is their place of habitual residence." In Ong
Policies, the 1987 Constitution emphasized vs. Republic 20 this court took the concept of
that:The state shall promote social justice in all domicile to mean an individual's "permanent
phases of national development (Sec. 10). home", "a place to which, whenever absent for
The state affirms labor as a primary social business or for pleasure, one intends to return,
economic force. It shall protect the rights of and depends on facts and circumstances in the
workers and promote their welfare (Sec. 18). sense that they disclose intent." 21 Based on the
foregoing, domicile includes the twin elements
In Article XIII on Social Justice and Human of "the fact of residing or physical presence in a
Rights, the 1987 Constitution provides: fixed place" and animus manendi, or the
Sec. 3. The State shall afford full protection to intention of returning there permanently.
labor, local and overseas, organized and
unorganized, and promote full employment and Uytengsu vs. Republic: Residence is not
equality of employment opportunities for all. domicile, but domicile is residence coupled with
the intention to remain for an unlimited time. A
Thus, the applicable law on prescription is the man can have but one domicile for the same
Philippine law. purpose at any time, but he may have
numerous places of residence. His place of
The next question is whether the prescriptive
residence is generally his place of domicile, but
period governing the filing of the claims is 3
it is not by any means necessarily so since no
years, as provided by the Labor Code or 10
length of residence without intention of
years, as provided by the Civil Code of the
remaining will constitute domicile.
Philippines.
In Nuval vs. Guray, 24 the Court held that "the
Article 1144 of the Civil Code of the Philippines
term residence. . . is synonymous with domicile
provides:
which imports not only intention to reside in a
The following actions must be brought within
fixed place, but also personal presence in that
ten years from the time the right of action
place, coupled with conduct indicative of such
accross:
intention.
(1) Upon a written contract; (2) Upon an
It stands to reason therefore, that petitioner
obligation created by law; (3) Upon a judgment
merely committed an honest mistake in jotting
the word "seven" in the space provided for the
In this case, the claim for pay differentials is residency qualification requirement.
primarily anchored on the written contracts
That an individual does not lose his domicile
between the litigants, the ten-year prescriptive
even if he has lived and maintained residences
period provided by Art. 1144(l) of the New Civil
in different places.
Code should govern.
Faypon vs. Quirino:
G.R. No. 119976 September 18, 1995
A citizen may leave the place of his birth to look
IMELDA ROMUALDEZ-MARCOS, petitioner,
for "greener pastures," as the saying goes, to
vs.
improve his lot, and that, of course includes
COMMISSION ON ELECTIONS and CIRILO
study in other places, practice of his avocation,
ROY MONTEJO, respondents.
or engaging in business. When an election is to
In election cases, the term "residence" has be held, the citizen who left his birthplace to
always been considered as synonymous with improve his lot may desire to return to his
"domicile" which imports not only the intention native town to cast his ballot but for
to reside in a fixed place but also personal professional or business reasons, or for any
presence in-that place, coupled with conduct other reason, he may not absent himself from
his professional or business activities; so there with one of her own choosing (domicilium
he registers himself as voter as he has the voluntarium).
qualifications to be one and is not willing to give
up or lose the opportunity to choose the officials
who are to run the government especially in
national elections. Despite such registration, [G.R. No. 157013. July 10, 2003]
the animus revertendi to his home, to his ATTY. ROMULO B. MACALINTAL, petitioner,
domicile or residence of origin has not forsaken vs. COMMISSION ON ELECTIONS, HON.
him. This may be the explanation why the ALBERTO ROMULO, in his official capacity
registration of a voter in a place other than his as Executive Secretary, and HON. EMILIA T.
residence of origin has not been deemed BONCODIN, Secretary of the Department
of Budget and Management, respondents.
sufficient to constitute abandonment or loss of
such residence. It finds justification in the
natural desire and longing of every person to Republic Act No. 9189 (The Overseas Absentee
return to his place of birth. This strong feeling of Voting Act of 2003)
attachment to the place of one's birth must be
overcome by positive proof of abandonment for Petitioner posits that Section 5(d) is
another. unconstitutional because it violates Section 1,
Article V of the 1987 Constitution which requires
Petitioner held various residences for different that the voter must be a resident in the
purposes during the last four decades. None of Philippines for at least one year and in the place
these purposes unequivocally point to an where he proposes to vote for at least six
intention to abandon her domicile of origin in months immediately preceding an election.
Tacloban, Leyte. Moreover, while petitioner was
born in Manila, as a minor she naturally Section 1, Article V of the Constitution
followed the domicile of her parents. She grew specifically provides that suffrage may be
up in Tacloban, reached her adulthood there exercised by (1) all citizens of the Philippines,
(2) not otherwise disqualified by law, (3) at least
and eventually established residence in
eighteen years of age, (4) who are residents in
different parts of the country for various the Philippines for at least one year and in the
reasons. place where they propose to vote for at least six
months immediately preceding the
First, minor follows the domicile of his parents. election. Under Section 5(d) of R.A. No. 9189,
As domicile, once acquired is retained until a one of those disqualified from voting is an
new one is gained, it follows that in spite of the immigrant or permanent resident who is
fact of petitioner's being born in Manila, recognized as such in the host country unless
Tacloban, Leyte was her domicile of origin by he/she executes an affidavit declaring that
he/she shall resume actual physical permanent
operation of law.
residence in the Philippines not later than three
years from approval of his/her registration
Second, domicile of origin is not easily lost. To
under said Act.
successfully effect a change of domicile, one
must demonstrate: 37 The Constitution is the fundamental and
paramount law of the nation to which all other
1. An actual removal or an actual change of laws must conform and in accordance with
domicile; which all private rights must be determined and
all public authority administered.[23] Laws that
2. A bona fide intention of abandoning the do not conform to the Constitution shall be
stricken down for being unconstitutional.
former place of residence and establishing a
new one; and Generally, however, all laws are presumed to be
constitutional.
3. Acts which correspond with the purpose.
Ordinarily, an absentee is not a resident
In the case at bench, the evidence adduced by and vice versa; a person cannot be at the same
private respondent plainly lacks the degree of time, both a resident and an absentee.
[30]
persuasiveness required to convince this court However, under our election laws and the
that an abandonment of domicile of origin in countless pronouncements of the Court
pertaining to elections, an absentee remains
favor of a domicile of choice indeed occurred. To
attached to his residence in the Philippines as
effect an abandonment requires the voluntary residence is considered
act of relinquishing petitioner's former domicile synonymous with domicile.
with an intent to supplant the former domicile
In Romualdez-Marcos,[31] the Court there is no sense for the framers of the
enunciated: Constitution to mandate Congress to establish a
system for absentee voting.
Article 50 of the Civil Code decrees that [f]or Contrary to the claim of petitioner, the
the exercise of civil rights and the fulfillment of execution of the affidavit itself is not the
civil obligations, the domicile of natural persons enabling or enfranchising act. To repeat, the
is their place of habitual residence. In Ong vs. affidavit is required of immigrants and
Republic, this court took the concept of domicile permanent residents abroad because by their
to mean an individuals permanent home, a status in their host countries, they are
place to which, whenever absent for business or presumed to have relinquished their intent to
for pleasure, one intends to return, and depends return to this country; thus, without the
on facts and circumstances in the sense that affidavit, the presumption of abandonment of
they disclose intent. Based on the foregoing, Philippine domicile shall remain.
domicile includes the twin elements of the fact
of residing or physical presence in a fixed place Contrary to petitioners claim that Section
and animus manendi, or the intention of 5(d) circumvents the Constitution, Congress
returning there permanently. enacted the law prescribing a system of
overseas absentee voting in compliance with
Aware of the domiciliary legal tie that links an the constitutional mandate. Such mandate
overseas Filipino to his residence in this expressly requires that Congress provide a
system of absentee voting that necessarily
country, the framers of the Constitution
presupposes that the qualified citizen of the
considered the circumstances that impelled Philippines abroad is not physically present in
them to require Congress to establish a system the country. The provisions of Sections 5(d) and
for overseas absentee voting. 11 are components of the system of overseas
absentee voting established by R.A. No.
As finally approved into law, Section 5(d) of 9189. The qualified Filipino abroad who
R.A. No. 9189 specifically disqualifies executed the affidavit is deemed to have
an immigrant or permanent resident who is retained his domicile in the Philippines. He is
recognized as such in the host country because presumed not to have lost his domicile by his
immigration or permanent residence in another physical absence from this country. His having
country implies renunciation of ones residence become an immigrant or permanent resident of
in his country of origin. However, same Section his host country does not necessarily imply an
allows an immigrant and permanent resident abandonment of his intention to return to his
abroad to register as voter for as long as he/she domicile of origin, the Philippines. Therefore,
executes an affidavit to show that he/she has under the law, he must be given the
not abandoned his domicile in pursuance of the opportunity to express that he has not actually
constitutional intent expressed in Sections 1 abandoned his domicile in the Philippines by
and 2 of Article V that all citizens of the executing the affidavit required by Sections 5(d)
Philippines not otherwise disqualified by law and 8(c) of the law.
must be entitled to exercise the right of suffrage
and, that Congress must establish a system for
absentee voting; for otherwise, if actual,
physical residence in the Philippines is required,

You might also like