OIL AND NATURAL GAS COMMISSION v Court of Appeals

FACTS:

This proceeding involves the enforcement of a foreign judgment rendered by the Civil Judge of Dehra Dun, India in favor of the petitioner,
against the private respondent, PACIFIC CEMENT COMPANY, INCORPORATED. The petitioner is a foreign corporation owned and controlled
by the Government of India while the private respondent is a private corporation duly organized and existing under the laws of the Philippines.

The conflict between the petitioner and the private respondent rooted from the failure of the respondent to deliver 43,000 metric tons of oil well
cement to the petitioner even it had already received payment and despite petitioner’s several demands. The petitioner then informed the
private respondent that it was referring its claim to an arbitrator pursuant to Clause 16 of their contract which stipulates that he venue for
arbitration shall be at Dehra dun.
The chosen arbitrator, one Shri N.N. Malhotra, resolved the dispute in favour of the petitioner setting forth the arbitral award. To enable the
petitioner to execute the above award, it filed a Petition before the Court of the Civil Judge in Dehra Dun. India praying that the decision of the
arbitrator be made "the Rule of Court" in India. This was objected by the respondent but foreign court refused to admit the private respondent's
objections for failure to pay the required filing fees. Despite notice sent to the private respondent of the foregoing order and several demands
by the petitioner for compliance therewith, the private respondent refused to pay the amount adjudged by the foreign court as owing to the
petitioner.

The petitioner filed a complaint with Branch 30 of the Regional Trial Court (RTC) of Surigao City for the enforcement of the aforementioned
judgment of the foreign court. The private respondent moved to dismiss the complaint. RTC dismissed the complaint for lack of a valid cause
of action. The petitioner then appealed to the respondent Court of Appeals which affirmed the dismissal of the complaint. In its decision, the
appellate court concurred with the RTC's ruling that the arbitrator did not have jurisdiction over the dispute between the parties, thus, the foreign
court could not validly adopt the arbitrator's award. The petitioner filed this petition for review on certiorari,

ISSUE:

Whether or not the arbitrator had jurisdiction over the dispute between the petitioner and the private respondent under Clause 16 of the contract.

RULING:

The constitutional mandate that no decision shall be rendered by any court without expressing therein dearly and distinctly the facts and the
law on which it is based does not preclude the validity of "memorandum decisions" which adopt by reference the findings of fact and conclusions
of law contained in the decisions of inferior tribunals.

Furthermore, the recognition to be accorded a foreign judgment is not necessarily affected by the fact that the procedure in the courts of the
country in which such judgment was rendered differs from that of the courts of the country in which the judgment is relied on. If the procedure
in the foreign court mandates that an Order of the Court becomes final and executory upon failure to pay the necessary docket fees, then the
courts in this jurisdiction cannot invalidate the order of the foreign court simply because our rules provide otherwise.

WHEREFORE, the instant petition is GRANTED, and the assailed decision of the Court of Appeals sustaining the trial court's dismissal of the
OIL AND NATURAL GAS COMMISSION's complaint before Branch 30 of the RTC of Surigao City is REVERSED,

NATIONAL IRRIGATION ADMINISTRATION (NIA), petitioner, vs. HONORABLE COURT OF APPEALS (4th Division), CONSTRUCTION
INDUSTRY ARBITRATION COMMISSION, and HYDRO RESOURCES CONTRACTORS CORPORATION, respondents.

DAVIDE, JR., C.J.:

In this special civil action for certiorari under Rule 65 of the Rules of Court, the National Irrigation Administration (hereafter NIA), seeks to annul
and set aside the Resolutions[1]of the Court of Appeals in CA-GR. SP No. 37180 dated 28 June 1996 and 24 February 1997, which dismissed
respectively NIAs petition for certiorari and prohibition against the Construction Industry Arbitration Commission (hereafter CIAC), and the
motion for reconsideration thereafter filed.
Records show that in a competitive bidding held by NIA in August 1978, Hydro Resources Contractors Corporation (hereafter HYDRO) was
awarded Contract MPI-C-2 for the construction of the main civil works of the Magat River Multi-Purpose Project. The contract provided that
HYDRO would be paid partly in Philippine pesos and partly in U.S. dollars. HYDRO substantially completed the works under the contract in
1982 and final acceptance by NIA was made in 1984. HYDRO thereafter determined that it still had an account receivable from NIA representing
the dollar rate differential of the price escalation for the contract. [2]
After unsuccessfully pursuing its case with NIA, HYDRO, on 7 December 1994, filed with the CIAC a Request for Adjudication of the aforesaid
claim. HYDRO nominated six arbitrators for the arbitration panel, from among whom CIAC appointed Engr. Lauro M. Cruz. On 6 January 1995,
NIA filed its Answer wherein it questioned the jurisdiction of the CIAC alleging lack of cause of action, laches and estoppel in view of HYDROs
alleged failure to avail of its right to submit the dispute to arbitration within the prescribed period as provided in the contract. On the same date,
NIA filed a Compliance wherein it nominated six arbitrators, from among whom CIAC appointed Atty. Custodio O. Parlade, and made a
counterclaim for P1,000,000 as moral damages; at least P100,000 as exemplary damages; P100,000 as attorneys fees; and the costs of the
arbitration.[3]
The two designated arbitrators appointed Certified Public Accountant Joven B. Joaquin as Chairman of the Arbitration Panel. The parties were
required to submit copies of the evidence they intended to present during the proceedings and were provided the draft Terms of Reference.[4]
At the preliminary conference, NIA through its counsel Atty. Joy C. Legaspi of the Office of the Government Corporate Counsel, manifested
that it could not admit the genuineness of HYDROs evidence since NIAs records had already been destroyed. NIA requested an opportunity
to examine the originals of the documents which HYDRO agreed to provide. [5]
After reaching an accord on the issues to be considered by the arbitration panel, the parties scheduled the dates of hearings and of submission
of simultaneous memoranda.[6]
On 13 March 1995, NIA filed a Motion to Dismiss [7]alleging lack of jurisdiction over the disputes. NIA contended that there was no agreement
with HYDRO to submit the dispute to CIAC for arbitration considering that the construction contract was executed in 1978 and the project
completed in 1982, whereas the Construction Industry Arbitration Law creating CIAC was signed only in 1985; and that while they have agreed
to arbitration as a mode of settlement of disputes, they could not have contemplated submission of their disputes to CIAC. NIA further argued
that records show that it had not voluntarily submitted itself to arbitration by CIAC citing TESCO Services, Inc. v. Hon. Abraham Vera, et al.,[8]
wherein it was ruled:
CIAC did not acquire jurisdiction over the dispute arising from the sub-contract agreement between petitioner TESCO and private respondent
LAROSA. The records do not show that the parties agreed to submit the disputes to arbitration by the CIAC xxxx. While both parties in the
sub-contract had agreed to submit the matter to arbitration, this was only between themselves, no request having been made by both with
the CIAC. Hence, as already stated, the CIAC, has no jurisdiction over the dispute. xxxx. Nowhere in the said article (sub-contract) does it
mention the CIAC, much less, vest jurisdiction with the CIAC.
On 11 April 1995, the arbitral body issued an order [9] which deferred the determination of the motion to dismiss and resolved to proceed with
the hearing of the case on the merits as the grounds cited by NIA did not seem to be indubitable. NIA filed a motion for reconsideration of the
aforesaid Order. CIAC in denying the motion for reconsideration ruled that it has jurisdiction over the HYDROs claim over NIA pursuant to E.O
1008 and that the hearing should proceed as scheduled. [10]
On 26 May 1996, NIA filed with the Court of Appeals an original action of certiorari and prohibition with prayer for restraining order and/or
injunction, seeking to annul the Orders of the CIAC for having been issued without or in excess of jurisdiction. In support of its petition NIA
alleged that:
A
RESPONDENT CIAC HAS NO AUTHORITY OR JURIDICTION TO HEAR AND TRY THIS DISPUTE BETWEEN THE HEREIN PARTIES AS
E.O. NO. 1008 HAD NO RETROACTIVE EFFECT.
B
THE DISPUTE BETWEEN THE PARTIES SHOULD BE SETTLED IN ACCORDANCE WITH GC NO. 25, ART. 2046 OF THE CIVIL CODE
AND R.A. NO. 876 THE GOVERNING LAWS AT THE TIME CONTRACT WAS EXECUTED AND TERMINATED.
C
E.O. NO. 1008 IS A SUBSTANTIVE LAW, NOT MERELY PROCEDURAL AS RULED BY THE CIAC.
D
AN INDORSEMENT OF THE AUDITOR GENERAL DECIDING A CONTROVERSY IS A DECISION BECAUSE ALL THE ELEMENTS FOR
JUDGMENT ARE THERE; THE CONTROVERSY, THE AUTHORITY TO DECIDE AND THE DECISION. IF IT IS NOT APPEALED
SEASONABLY, THE SAME BECOMES FINAL.
E
NIA HAS TIMELY RAISED THE ISSUE OF JURISDICTION. IT DID NOT WAIVE NOR IS IT ESTOPPED FROM ASSAILING THE SAME.
F
THE LEGAL DOCTRINE THAT JURISDICTION IS DETERMINED BY THE STATUTE IN FORCE AT THE TIME OF THE
COMMENCEMENT OF THE ACTION DOES NOT ONLY APPLY TO THE INSTANT CASE.[11]
The Court of Appeals, after finding that there was no grave abuse of discretion on the part of the CIAC in issuing the aforesaid Orders, dismissed
the petition in its Resolution dated 28 June 1996. NIAs motion for reconsideration of the said decision was likewise denied by the Court of
Appeals on 26 February 1997.
On 2 June 1997, NIA filed before us an original action for certiorari and prohibition with urgent prayer for temporary restraining order and writ
of preliminary injunction, praying for the annulment of the Resolutions of the Court of Appeals dated 28 June 1996 and 24 February 1997. In
the said special civil action, NIA merely reiterates the issues it raised before the Court of Appeals. [12]

We take judicial notice that on 10 June 1997, CIAC rendered a decision in the main case in favor of HYDRO. [13] NIA assailed the said decision
with the Court of Appeals. In view of the pendency of the present petitions before us the appellate court issued a resolution dated 26 March
1998 holding in abeyance the resolution of the same until after the instant petitions have been finally decided. [14]

At the outset, we note that the petition suffers from a procedural defect that warrants its outright dismissal. The questioned resolutions of the
Court of Appeals have already become final and executory by reason of the failure of NIA to appeal therefrom. Instead of filing this petition for
certiorari under Rule 65 of the Rules of Court, NIA should have filed a timely petition for review under Rule 45.

There is no doubt that the Court of Appeals has jurisdiction over the special civil action for certiorari under Rule 65 filed before it by NIA. The
original jurisdiction of the Court of Appeals over special civil actions for certiorari is vested upon it under Section 9(1) of B.P. 129. This jurisdiction
is concurrent with the Supreme Court[15] and with the Regional Trial Court.[16]

Thus, since the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its
jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari.[17] If the aggrieved
party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the
writ of certiorari, his predicament being the effect of his deliberate inaction.[18]

The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of
the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. [19] Rule 45 is clear that decisions, final orders
or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceedings involved, may be appealed to this
Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. [20] Under Rule 45 the
reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration. [21]
In the instant case the Resolution of the Court of Appeals dated 24 February 1997 denying the motion for reconsideration of its Resolution
dated 28 June 1997 was received by NIA on 4 March1997. Thus, it had until 19 March 1997 within which to perfect its appeal. NIA did not
appeal.What it did was to file an original action for certiorari before this Court, reiterating the issues and arguments it raised before the Court
of Appeals.

For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy
in the ordinary course of law against its perceived grievance.[22] A remedy is considered plain, speedy and adequate if it will promptly relieve
the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. [23] In this case, appeal was not only available
but also a speedy and adequate remedy.

Obviously, NIA interposed the present special civil action of certiorari not because it is the speedy and adequate remedy but to make up for
the loss, through omission or oversight, of the right of ordinary appeal. It is elementary that the special civil action of certiorari is not and cannot
be a substitute for an appeal, where the latter remedy is available, as it was in this case. A special civil action under Rule 65 of the Rules of
Court will not be a cure for failure to timely file a petition for review on certiorari under Rule 45 of the Rules of Court. [24] Rule 65 is an independent
action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45, [25] especially if such loss
or lapse was occasioned by ones own neglect or error in the choice of remedies. [26]

For obvious reasons the rules forbid recourse to a special civil action for certiorari if appeal is available, as the remedies of appeal and certiorari
are mutually exclusive and not alternative or successive. [27] Although there are exceptions to the rules, none is present in the case at bar. NIA
failed to show circumstances that will justify a deviation from the general rule as to make available a petition for certiorari in lieu of taking an
appropriate appeal.

Based on the foregoing, the instant petition should be dismissed.

In any case, even if the issue of technicality is disregarded and recourse under Rule 65 is allowed, the same result would be reached since a
review of the questioned resolutions of the CIAC shows that it committed no grave abuse of discretion.

Contrary to the claim of NIA, the CIAC has jurisdiction over the controversy. Executive Order No.1008, otherwise known as the Construction
Industry Arbitration Law which was promulgated on 4 February 1985, vests upon CIAC original and exclusive jurisdiction over disputes arising
from, or connected with contracts entered into by parties involved in construction in the Philippines, whether the dispute arises before or after
the completion of the contract, or after the abandonment or breach thereof. The disputes may involve government or private contracts. For the
Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration. [28]

The complaint of HYDRO against NIA on the basis of the contract executed between them was filed on 7 December 1994, during the effectivity
of E.O. No. 1008. Hence, it is well within the jurisdiction of CIAC. The jurisdiction of a court is determined by the law in force at the time of the
commencement of the action.[29]
NIAs argument that CIAC had no jurisdiction to arbitrate on contract which preceded its existence is untenable. E.O. 1008 is clear that the
CIAC has jurisdiction over all disputes arising from or connected with construction contract whether the dispute arises before or after the
completion of the contract. Thus, the date the parties entered into a contract and the date of completion of the same, even if these occurred
before the constitution of the CIAC, did not automatically divest the CIAC of jurisdiction as long as the dispute submitted for arbitration arose
after the constitution of the CIAC. Stated differently, the jurisdiction of CIAC is over the dispute, not the contract; and the instant dispute having
arisen when CIAC was already constituted, the arbitral board was actually exercising current, not retroactive, jurisdiction. As such, there is no
need to pass upon the issue of whether E.O. No. 1008 is a substantive or procedural statute.

NIA also contended that the CIAC did not acquire jurisdiction over the dispute since it was only HYDRO that requested for arbitration. It asserts
that to acquire jurisdiction over a case, as provided under E.O. 1008, the request for arbitration filed with CIAC should be made by both parties,
and hence the request by one party is not enough.

It is undisputed that the contracts between HYDRO and NIA contained an arbitration clause wherein they agreed to submit to arbitration any
dispute between them that may arise before or after the termination of the agreement. Consequently, the claim of HYDRO having arisen from
the contract is arbitrable. NIAs reliance with the ruling on the case of Tesco Services Incorporated v. Vera, [30] is misplaced.

The 1988 CIAC Rules of Procedure which were applied by this Court in Tesco case had been duly amended by CIAC Resolutions No. 2-91
and 3-93, Section 1 of Article III of which read as follows:

Submission to CIAC Jurisdiction - An arbitration clause in a construction contract or a submission to arbitration of a construction contract or a
submission to arbitration of a construction dispute shall be deemed an agreement to submit an existing or future controversy to CIAC
jurisdiction, notwithstanding the reference to a different arbitration institution or arbitral body in such contract or submission. When a contract
contains a clause for the submission of a future controversy to arbitration, it is not necessary for the parties to enter into a submission
agreement before the claimant may invoke the jurisdiction of CIAC.
Under the present Rules of Procedure, for a particular construction contract to fall within the jurisdiction of CIAC, it is merely required that the
parties agree to submit the same to voluntary arbitration. Unlike in the original version of Section 1, as applied in the Tesco case, the law as it
now stands does not provide that the parties should agree to submit disputes arising from their agreement specifically to the CIAC for the latter
to acquire jurisdiction over the same. Rather, it is plain and clear that as long as the parties agree to submit to voluntary arbitration, regardless
of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such that, even if they specifically choose another
forum, the parties will not be precluded from electing to submit their dispute before the CIAC because this right has been vested upon each
party by law, i.e., E.O. No. 1008.[31]

Moreover, it is undeniable that NIA agreed to submit the dispute for arbitration to the CIAC. NIA through its counsel actively participated in the
arbitration proceedings by filing an answer with counterclaim, as well as its compliance wherein it nominated arbitrators to the proposed panel,
participating in the deliberations on, and the formulation of, the Terms of Reference of the arbitration proceeding, and examining the documents
submitted by HYDRO after NIA asked for the originals of the said documents. [32]

As to the defenses of laches and prescription, they are evidentiary in nature which could not be established by mere allegations in the pleadings
and must not be resolved in a motion to dismiss. Those issues must be resolved at the trial of the case on the merits wherein both parties will
be given ample opportunity to prove their respective claims and defenses. [33] Under the rule[34] the deferment of the resolution of the said issues
was, thus, in order. An allegation of prescription can effectively be used in a motion to dismiss only when the complaint on its face shows that
indeed the action has already prescribed.[35] In the instant case, the issue of prescription and laches cannot be resolved on the basis solely of
the complaint. It must, however, be pointed that under the new rules, [36] deferment of the resolution is no longer permitted. The court may either
grant the motion to dismiss, deny it, or order the amendment of the pleading.
WHEREFORE, the instant petition is DISMISSED for lack of merit. The Court of Appeals is hereby DIRECTED to proceed with reasonable
dispatch in the disposition of C.A. G.R. No. 44527 and include in the resolution thereof the issue of laches and prescription.
SO ORDERED.

G.R. No. L-27113 November 19, 1974

SABINA BASA, BONIFACIO BASA, BONIFACIO CABALHIN and PRIMITIVO GALLARDO, plaintiffs-appellees, vs.FEDERACION
OBRERA DE LA INDUSTRIA TABAQUERA Y OTROS TRABAJADORES DE FILIPINAS (FOITAF) and LA DICHA LA PAZ Y BUEN
VIAJE CIGAR AND CIGARETTE FACTORY defendants. FEDERACION OBRERA DE LA INDUSTRIA TABAQUERA Y OTROS
TRABAJADORES DE FILIPINAS (FOITAF), defendant-appellant.
Eliseo M. Cruz for plaintiffs-appellees.
Teofilo C. Villarico for defendant-appellant.

ANTONIO, J.:p
Appeal from the decision, dated March 31, 1966, of the Court of First Instance, Branch IV, Quezon City, (1) enjoining defendant La Dicha La
Paz y Buen Viaje Cigar and Cigarette Factory from dismissing plaintiffs-appellees Sabina Basa, Bonifacio Basa, Bonifacio Cabalhin and
Primitivo Gallardo from their employment in said company; and (2) ordering both the company and defendant-appellant Federacion Obrera de
la Industria Tabaquera y Otros Trabajadores de Filipinos(FOITAF) to reimburse all union dues and assessments collected from plaintiffs-
appellees from the date of their resignation as members in defendant union until the date of the last collection, to pay attorney's fees in the
amount of P900.00 and the costs of suit.

The records show that plaintiffs-appellees Sabina Basa, Bonifacio Basa, Bonifacio Cabalhin and Primitivo Gallardo, who are members of
"Iglesia ni Cristo", have been employed with the defendant company, La Dicha La Paz y Buen Viaje Cigar and Cigarette Factory, since 1949,
1952, 1960 and 1957, respectively, and were therefore employees of that company on April 21, 1961, when the collective bargaining contract
between the company and the defendant union, Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas (FOITAF) was
executed. This agreement provided for a union shop clause, thus:
RECOGNITION AND UNION SECURITY: (2) All workers and laborers who are members of the FOITAF shall remain and maintain their
membership in good standing in the Union as a condition of their continued employment with the Company. New workers whom the
Management may employ shall, as a condition of continued employment with the company, become members of the FOITAF after 60 working
days of continuous employment.

The plaintiffs-appellees were members in good standing of the labor union until August 28, 1964, when they formally resigned from the Union
(Annex "A", Complaint), invoking their constitutional right to freedom of religion, the free exercise of which exempts them from being compelled
to join any labor organization, when such is contrary to their religious beliefs and convictions, as provided by Republic Act No. 3350,1 which
became a law on June 18, 1961. In its answer dated August 31, 1964, to the resignation of the plaintiffs-appellees (Annex "B", ibid.), the Union,
through its president Severino Tabalno, gave them fifteen (15) days from receipt of said letter to reconsider their resignation, otherwise it would
ask the Company to enforce the above-quoted union shop agreement. Thereafter, or on October 14, 1964, the Company, through its president
Bienvenido A. Tan, Jr., formally gave the plaintiffs-appellees up to October 23, 1964 within which to re-affiliate with the Union on pain of
dismissal (Annex "C", ibid.). Instead of reconsidering their resignation, the plaintiffs-appellees filed on October 20, 1964 the present action for
injunction, which was amended on January 30, 1965, alleging, among others, that (1) they have a right to remain in their employment, which
is properly within the meaning of constitutional guarantees, 2 for they cannot be legally dismissed by defendant Company for failing to maintain
their membership in the defendant Union, being old employees of the former; 3 (2) their resignation from the labor Union is but an exercise of
their right to freedom of religion guaranteed by the Constitution, which guarantee is implemented by Republic Act No. 3350; and (3) being no
longer members of the labor Union, they were no longer obliged to pay said dues and assessments through payroll deductions; 4Plaintiffs-
appellees, therefore, prayed that judgment be rendered (1) to enjoin immediately ex-parte the defendants from dismissing plaintiffs from their
employment, and from collecting union dues and assessments through payroll deduction from plaintiffs' earned wages; (2) to order defendants
to reimburse, jointly and severally, all union dues and assessments collected from plaintiffs since their resignation from defendant Union and
to pay moral and exemplary damages, attorney's fees of P900.00 and costs.

Both defendants filed their respective answers. In its answer with special and affirmative defenses, dated November 13, 1964, defendant
Company averred, among others, that (1) there is an existing working agreement between defendant Union and defendant Company providing
for a "Closed shop"; (2) plaintiffs resigned from the Union; (3) defendant Union insists that defendant Company comply with the contract
recognizing a closed shop; and (4) if defendant Company does not comply with the collective bargaining agreement with the Union, it will be
subjected to a suit for damages or risk the possibility of a strike for violation of the collective bargaining agreement. Defendant Company then
prayed that plaintiffs and defendant Union be required to interplead their respective cases and that judgment be rendered in favor of
whomsoever is entitled to just relief as may be proper under the circumstances.

Defendant-appellant Union, in its amended answer with affirmative and special defenses, dated March 26, 1965, to the amended complaint,
alleged, among others, that the plaintiffs are covered by the collective bargaining contract as Republic Act No. 3350 under which they seek
exemption from membership in the Union, is unconstitutional for it (1) impairs the obligations of contracts (Sec. 1[10], Art. III, 1935 Constitution);
(2) denies to workers the right to equal protection of the laws (Sec. 1[1], Art. III, id.); (3) abridges the freedom of workers to form associations
(Sec. 1[6], Art. III, id.); and (4) contravenes the constitutional mandate that the State shall afford protection to labor (Sec. 6, Art. XIV, id.); and
that this Act was declared unconstitutional by the Court of Industrial Relations in the case of National Labor Union vs. Hacienda Luisita, et al.,
Case No. 49-IPA. Defendant-appellant Union then prayed that the complaint be dismissed.
Subsequently, or on March 31, 1966, the lower court rendered the aforementioned decision. From the aforesaid decision, defendant Union has
appealed to this Court, contending that the lower court erred in not declaring Republic Act No. 3350 as unconstitutional, reiterating the
arguments it advanced before the court a quo.

We find the appeal to be without merit.

To begin with, House Bill No. 5859, which later became Republic Act No. 3350, was enacted into law with the explicit purpose of safeguarding
and maintaining inviolate the religious freedom of all individuals. 5
In this appeal, appellant labor union contends that Republic Act No. 3350 is violative of the fundamental charter, as (a) it infringes on the
constitutional bar against a law respecting an establishment of religion or a religious test for the exercise of civil and political rights (Sec. 1[7]
of Article III, 1935 Constitution, (b) impairs the obligation of contracts (Sec. 1[10], Art. III, id.), (c) denies the equal, protection of the laws (Sec.
1[1], Art. III, id.), (d) abridges the freedom to form associations not contrary to law (Sec. 1[6], Art. III, id.), and (e) impairs the constitutional
mandate that the State shall afford protection to labor (Sec. 5, Art. III; Sec. 6, Art. XIV, id.).

Recently, in Benjamin Victoriano Elizalde Rope Workers' Union, et al.,6 a unanimous Court sustained the constitutionality of Republic Act No.
3350. In rejecting the arguments advanced by appellant labor union, imputing to said statute alleged constitutional infirmities similar to those
now asserted by the defendant-appellant in the case at bar, We declared:

Both the Constitution and Republic Act No. 875 recognized freedom of association. Section 1[6] of Article III of the Constitution of 1935, as well
as Section 7 of Article IV of the Constitution of 1973, provide that the right to form associations or societies for purposes not contrary to law
shall not be abridged. Section 3 of Republic Act No. 875 provides that employees shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the purpose of collective bargaining and to engage in concerted activities for the purpose
of collective bargaining and other mutual aid or protection. What the Constitution and the Industrial Peace Act recognize and guarantee is the
"right" to form or join associations. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the
nature and contents of a "right", it can be safely said that whatever theory one subscribes to, a right comprehends at least two broad notions,
namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being prevented by law;
and second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is, therefore, the employee who
should decide for himself whether he should join or not an association; and should he choose to join, he himself makes up his mind as to which
association he would join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said
organization at any time. It is clear, therefore, that the right to join a union includes the right to abstain from joining any union. Inasmuch as
what both the Constitution and the Industrial Peace Act have recognized, and guaranteed to the employee, is the "right" to join associations of
his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law
does not enjoin an employee to sign up with any association.

The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection
granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed
shop, by virtue of which the employer may employ only members of the collective bargaining union, and the employees must continue to be
members of the union for the duration of the contract in order to keep their jobs. Thus Section 4[a] (4) of the Industrial Peace Act, before its
amendment by Republic Act No. 3350, provides that although it would be an unfair labor practice for an employer "to discriminate in regard to
hire or tenure of employment or any term or condition of employment to encourage or discouraged membership in any labor organization" the
employer is, however, not precluded "from making an agreement with a labor organization to require as a condition of employment membership
therein, if such labor organization is the representative of the employees". By virtue, therefore, of a closed shop agreement, before the
enactment of Republic Act No. 3350, if any person, regardless of his religious beliefs, wishes to be employed or to keep his employment, he
must become a member of the collective bargaining union. Hence, the right of said employee not to join the labor union is curtailed and
withdrawn.

To that all-embracing coverage of the closed shop arrangement, Republic Act No. 3350 introduced an exception, when it added to Section 4[al
(4) of the Industrial Peace Act the following proviso: "but such agreement shall not cover members of any religious sects which prohibit affiliation
of their members in any such labor organization". Republic Act No. 3350 merely excludes ipso jure from the application and coverage of the
closed shop agreement the employees belonging to any religious sects which prohibit affiliation of their members with any labor organization.
What the exception provides, therefore, is that members of said religious sects cannot be compelled or coerced to join labor unions even when
said unions have closed shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sects
cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. It
is clear, therefore, that the assailed Act, far from infringing the constitutional provision on freedom of association, upholds and reinforces it. It
does not prohibit the members of said religious sects from affiliating with labor unions. It still leaves to said members the liberty and the power
to affiliate, or not to affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of said religious sects prefer to sign up
with the labor union, they can do so. If in deference and fealty to their religious faith, they refuse to sign up, they can do so; the law does not
coerce them to join; neither does the law prohibit them from joining; and neither may the employer or labor union compel them to join. Republic
Act No. 3350, therefore, does not violate the constitutional provision on freedom of association.

2. Appellant Union also contends that the Act is unconstitutional for impairing the obligation of its contract, specifically, the "union security
clause" embodied in its Collective Bargaining Agreement with the Company, by virtue of which "membership in the union was required as a
condition for employment for all permanent employees workers". This agreement was already in existence at the time Republic Act No. 3350
was enacted on June 18, 1961, and it cannot, therefore, be deemed to have been incorporated into the agreement. But by reason of this
amendment, Appellee, as well as others similarly situated, could no longer be dismissed from his job even if he should cease to be a member,
or disaffiliate from the Union, and the Company could continue employing him notwithstanding his disaffiliation from the Union. The Act,
therefore, introduced a change into the express terms of the union security clause; the Company was partly absolved by law from the contractual
obligation it had with the Union of employing only Union members in Permanent Positions. It cannot be denied, therefore, that there was indeed
an impairment of said union security clause. .

xxx xxx xxx

"It should not be overlooked, however, that the prohibition to impair the obligation of contracts is not absolute and unqualified. The prohibition
is general, affording a broad outline and requiring construction to fill in the details. The prohibition is not to be read with literal exactness like a
mathematical formula, for it prohibits unreasonable impairment only. In spite of the constitutional prohibition, the State continues to possess
authority to safeguard the vital interests of its people. Legislation appropriate to safeguarding said interests may modify or abrogate contracts
already in effect. For not only are existing laws read into contracts in order to fix the obligations as between the parties, but the reservation of
essential attributes of sovereign power is also read into contracts as a postulate of the legal order. All contracts made with reference to any
matter that is subject to regulation under the police power must be understood as made in reference to the possible exercise of that power.
Otherwise, important and valuable reforms may be precluded by the simple device of entering into contracts for the purpose of doing that which
otherwise may be prohibited. The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of
which contractual relations are worthwhile — a government which retains adequate authority to secure the peace and good order of society.
The contract clause of the Constitution must, therefore, be not only in harmony with, but also in subordination to, in appropriate instances, the
reserved power of the state to safeguard the vital interests of the people. It follows that not all legislations, which have the effect of impairing a
contract are obnoxious to the constitutional prohibition as to impairment, and a statute passed in the legitimate exercise of police power,
although it incidentally destroys existing contract rights, must be upheld by the courts. This has special application to contracts regulating
relations between capital and labor which are not merely contractual, and said labor contracts, for being impressed with public interest, must
yield to the common good.
xxx xxx xxx
In order to determine whether legislation unconstitutionally impairs contract obligations, no unchanging yardstick, applicable at all times and
under all circumstances, by which the validity of each statute may be measured or determined, has been fashioned, but every case must be
determined upon its own circumstances. Legislation impairing the obligation of contracts can be sustained when it is enacted for the promotion
of the general good of the people, and when the means adopted to secure that end are reasonable. Both the end sought and the means
adopted must be legitimate, i.e., within the scope of the reserved power of the state construed in harmony with the constitutional limitation of
that power.
What then was the purpose sought to be achieved by Republic Act No. 3350? Its purpose was to insure freedom of belief and religion, and to
promote the general welfare by; preventing discrimination against those members of religious sects which prohibit their members from joining
labor unions, confirming thereby their natural statutory and constitutional right to work, the fruits of which work are usually the only means
whereby they can maintain their own life and the life of their dependents. It cannot be gainsaid that said purpose is legitimate.

The questioned Act also provides protection to members of said religious sects against two aggregates of group strength from which the
individual needs protection. The individual, employee, at various times in his working life, is confronted by two aggregates of power collective
labor directed by a union, and collective capital, directed by management. The union, an institution develop to organize labor into a collective
force and thus protect the individual employee from the power of collective capital, is, paradoxically, both the champion of employee rights, and
a new source of their frustration. Moreover, when the Union interacts with management, it produces yet a third aggregate of group strength
from which the individual also needs protection — the collective bargaining relationship.

It may not be amiss to point out here that the free exercise of religious profession or belief is superior to contract rights. In case of conflict, the
latter must, therefore, yield to the former. The Supreme Court of the United States has also declared on several occasions that the rights in the
First Amendment, which include freedom of religion, enjoy a preferred position in the constitutional system. Religious freedom, although not
unlimited, is a fundamental personal right and liberty, and has a preferred position in the hierarchy of values. Contractual rights, therefore, must
yield to freedom of religion. It is only where unavoidably necessary to prevent an immediate and grave danger to the security and welfare of
the community that infringement of religious freedom may be justified, and only to the smallest extent necessary to avoid the danger.

3. In further support of its contention that Republic Act No. 3350 is unconstitutional, appellant Union averred that said Act discriminates
in favor of members of said religious sects in violation of Section 1[7] of Article III of the 1935 Constitution, and which is now Section 8 of Article
IV of the 1973 Constitution, which provides:
No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof, and the free exercise and enjoyment of
religious profession and worship, without discrimination and preference, shall forever be allowed. No religious test shall be required for the
exercise of civil or political rights.
The constitutional provision not only prohibits legislation for the support of any religious tenets or the modes of worship of any sect, thus
forestalling compulsion by law of the acceptance of any creed or the practice of any form of worship, but also assures the free exercise of one's
chosen form of religion within limits of utmost amplitude. It has been said that the religion clauses of the Constitution are all designed to protect
the broadest possible liberty of conscience, to allow each man to believe as his conscience directs, to profess his beliefs, and to live as he
believes he ought to live, consistent with the liberty of others and with the common good. Any legislation whose effect or purpose is to impede
the observance of one or all religions, or to discriminate inviciously between the religions, is invalid, even though the burden may be
characterized as being only indirect. But if the state regulates conduct by enacting, within its power, a general law which has for its purpose
and effect to advance the state's secular goals, the statute is valid despite its indirect burden on religious observance, unless the state can
accomplish its purpose without imposing such burden.

In Aglipay v. Ruiz, this Court had occasion to state that the government precluded from pursuing valid objectives secular in character even if
the incidental result would be favorable to a religion or sect. It has likewise been held that the statute, in order to withstand the strictures of
constitutional prohibition, must have a secular legislative purpose and a primary effect that neither advances nor inhibits religion. Assessed by
these criteria, Republic Act No. 3350 cannot be said to violate the constitutional inhibition of the "no establishment" (of religion) clause of the
Constitution.

The purpose of Republic Act No. 3350 is secular, wordly, and temporal, not spiritual or religious or holy and eternal. It was intended to serve
the secular purpose of advancing the constitutional right to the free exercise of religion, by averting that certain persons be refused work, or be
dismissed from work, or be dispossessed of their right to work and of being impeded to pursue a modest means of livelihood, by reason of
union security agreements. To help its citizens to find gainful employment whereby they can make a living to support themselves and their
families is a valid objective of the state. In fact, the state is enjoined, in the 1935 Constitution, to afford protection to labor, and regulate the
relations between labor and capital and industry. More so now in the 1973 Constitution where it is mandated that "the State shall afford
protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race or creed and
regulate the relation between workers and employers.

The primary effects of the exemption from closed shop agreements in favor of members of religious sects that prohibit their members from
affiliating with a labor organization, is the protection of said employees against the aggregate force of the collective bargaining agreement, and
relieving certain citizens of a burden on their religious beliefs; and by eliminating to a certain extent economic insecurity due to unemployment,
which is a serious menace to the health, morals, and welfare of the people of the State, the Act also promotes the well-being of society. It is
our view that the exemption from the effects of closed shop agreement does not directly advance, or diminish, the interests of any particular
religion. Although the exemption may benefit those who are members of religious sects that prohibit their members from joining labor unions,
the benefit upon the religious sects is merely incidental and indirect. The "establishment clause" (of religion) does not ban regulation on conduct
whose reason or effect merely happens to coincide or harmonize with the tenets of some or all religions. The free exercise cl ause of the
Constitution has been interpreted to require that religious exercise be preferentially aided.

We believe that in enacting Republic Act No. 3350, Congress acted consistently with the spirit of the constitutional provision. It acted merely to
relieve the exercise of religion, by certain persons, of a burden that is imposed by union security agreements. It was Congress itself that
imposed that burden when it enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it so deems advisable, could take
away the same burden. It is certain that not every conscience can be accomodated by all the laws of the land; but when general laws conflict
with scrupples of conscience, exemptions ought to be granted unless some "compelling state interest" intervenes. In the instant case, We see
no such compelling state interest to withhold the exemption.

Appellant bewails that while Republic Act No. 3350 protects members of certain religious sects, it leaves no right to, and is silent as to the
protection of, labor organizations. The purpose of Republic Act No. 3350 was not to grant rights to labor unions. The rights of labor unions are
amply provided for in Republic Act No. 875 and the new Labor Code. As to the lamented silence of the Act regarding the rights and protection
of labor unions, suffice it to say, first, that the validity of a statute is determined by its provisions, not by its silence; and, second, the fact that
the law may work hardship does not render it unconstitutional.

It would not be amiss to state, regarding this matter, that to compel persons to join and remain members of a union to keep their jobs in violation
of their religious scrupples, would hurt, rather than help, labor unions. Congress has seen it fit to exempt religious objectors lest their resistance
spread to other workers, for religious objections have contagious potentialities more than political and philosophic objections.

Furthermore, let it be noted unity and loyalty even to the country, and a fortiorari to a labor union — assuming that such unity and loyalty can
be attained through coercion — is not a goal that is constitutionally obtainable at the expense of religious liberty. A desirable end cannot be
promoted by prohibited means.
4. Appellant's fourth contention, that Republic Act No. 3350 violates the constitutional prohibition against requiring a religious test for the
exercise of a civil right or a political right, is not well taken. The Act does not require as a qualification, or condition, for joining any lawful
association membership in any particular religion or in any religious sect; neither does the Act require affiliation with a religious sect that
prohibits its members from joining a labor union as a condition or qualification for withdrawing from a labor union. Joining or withdrawing from
a labor union requires a positive act. Republic Act No. 3350 only exempts members with such religious affiliation from the coverage of closed
shop agreements. So, under this Act, a religious objector is not required to do a positive act — to exercise the right to join or to resign from the
union. He is exempted ipso jure without need of any positive act on his part. A conscientious religious objector need not perform a positive act
or exercise the right of resigning from the labor union — he is exempted from the coverage of any closed shop agreement that a labor union
may have entered into. How then can there be a religious test required for the exercise of a right when no right need be exercised?
xxx xxx xxx
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a discriminatory legislation, inasmuch as it grants to the members of
certain religious sects undue advantages over other workers, thus violating Section 1 of Article III of the 1935 Constitution which forbids the
denial to any person of the equal protection of the laws.

The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state. It is not,
therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child should be affected
alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as such, but on persons according
to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which are
different in fact be treated in law as though they were the same. The equal protection clause does not forbid discrimination as to things that are
different. It does not prohibit legislation which is limited either in the object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of knowledge
or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid
because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality
in no manner determines the matter of constitutionality. All that is required of a valid classification is that it be reasonable, which means that
the classification should be based on substantial distinctions which make for real differences; that it must be germane to the purpose of the
law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. This Court has held that
the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary.
In the exercise of its power to make classifications for the purpose of enacting laws over matters within its jurisdiction, the state is recognized
as enjoying a wide range of discretion. It is not necessary that the classification be based on scientific or marked differences of things or in their
relation. Neither is it necessary that the classification be made with mathematical nicety. Hence legislative classification may in many cases
properly rest on narrow distinctions, for the equal protection guaranty does not preclude the legislature from recognizing degrees of evil or
harm, and legislation is addressed to evils as they may appear.

We believe that Republic Act No. 3350 satisfies the aforementioned requirements. The Act classifies employees and workers, as to the effect
and coverage of union shop security agreements, into those who by reason of their religious beliefs and convictions cannot sign up with a labor
union, and those whose religion does not prohibit membership in labor unions. The classification rests on real or substantial, not merely
imaginary or whimsical, distinctions. There is such real distinction in the beliefs, feelings and sentiments of employees. Employees do not
believe in the same religious faith and different religions differ in their dogmas and canons. Religious beliefs, manifestations and practices,
though they are found in all places, and in all times, take so many varied forms as to be almost beyond imagination. There are many views that
comprise the broad spectrum of religious beliefs among the people. There are diverse manners in which beliefs, equally paramount in the lives
of their possessors, may be articulated. Today the country is far more heterogenous in religion than before, differences in religion do exist, and
these differences are important and should not be ignored.

Even from the psychological point of view, the classification is based on real and important differences. Religious beliefs are not mere beliefs,
mere ideas existing only in the mind, for they carry with them practical consequences and are the motives of certain rules of human conduct
and the justification of certain acts. Religious sentiment makes a man view things and events in their relation to his God. It gives to human life
its distinctive character, its tone, its happiness, or unhappiness, its enjoyment or irksomeness. Usually, a strong and passionate desire is
involved in a religious belief. To certain persons, no single factor of their experience is more important to them than their religion, or their not
having any religion. Because of differences in religious belief and sentiments, a very poor person may consider himself better than the rich,
and the man who even lacks the necessities of life may be more cheerful than the one who has all possible luxuries. Due to th eir religious
beliefs people, like the martyrs, became resigned to the inevitable and accepted cheerfully even the most painful and excruciating pains.
Because of differences in religious beliefs, the world has witnessed turmoil, civil strife, persecution, hatred, bloodshed and war, generated to a
large extent by members of sects who were intolerant of other religious beliefs. The classification, introduced by Republic Act No. 3350,
therefore, rests on substantial distinctions.

The classification introduced by said Act is also germane to its purpose. The purpose of the law is precisely to avoid those who cannot, because
of their religious belief, join labor unions, from being deprived of their right to work and from being dismissed from their work because of union
shop security agreements.
xxx xxx xxx
6. Appellant's further contention that Republic Act No. 3350 violates the constitutional provision on social justice is also baseless. Social
justice is intended to promote the welfare of all the people. Republic Act No. 3350 promotes that welfare insofar as it looks after the welfare of
those who, because of their religious belief, cannot join labor unions; the Act prevents their being deprived of work and of the means of
livelihood. In determining whether any particular measure is for public advantage, it is not necessary that the entire state be directly benefited
— it is sufficient that a portion of the state be benefited thereby.

Social justice also means the adoption by the Government of measures calculated to insure economic stability of all component elements of
society, through the maintenance of a proper economic and social equilibrium in the inter-relations of the members of the community. Republic
Act No. 3350 insures economic stability to the members of a religious sect, like the Iglesia ni Cristo, who are also component elements of
society, for it insures security in their employment, notwithstanding their failure to join a labor union having a closed shop agreement with the
employer. The Act also advances the proper economic and social equilibrium between labor unions and employees who cannot join labor
unions, for it exempts the latter from the compelling necessity of joining labor unions that have closed shop agreements, and equalizes, in so
far as opportunity to work is concerned, those whose religion prohibits membership in labor unions with those whose religion does not prohibit
said membership. Social justice does not imply social equality, because social inequality will always exist as long as social relations depend
on personal or subjective proclivities. Social justice does not require legal equality because legal equality, being a relative term, is necessarily
premised on differentiations based on personal or natural conditions. Social justice guarantees equality of opportunity, and this is precisely
what Republic Act No. 3350 proposes to accomplish — it gives laborers, irrespective of their religious scrupples, equal opportunity for work.

xxx xxx xxx

As comprehensively observed by Justice Fernando in his concurring opinion in that case:
3. There is, however, the question of whether such an exception possesses an implication that lessens the effectiveness of state efforts
to protect labor, likewise, as noted, constitutionally ordained. Such a view, on the surface, may not be lacking in plausibility, but upon closer
analysis, it cannot stand scrutiny. Thought must be given to the freedom of association, likewise an aspect of intellectual liberty. For the late
Professor Howe, constitutionalist and in his lifetime the biographer of the great Holmes, it even partakes of the political theory of pluralistic
sovereignty. So great is the respect for the autonomy accorded voluntary societies. Such a right implies at the very least that one can determine
for himself whether or not he should join or refrain from joining a labor organization, an institutional device for promoting the welfare of the
working man. A closed shop, on the other hand, is inherently coercive. That is why, as is unmistakably reflected in our decisions, the latest of
which is Guijarno v. Court of Industrial Relations, it is far from being a favorite of the law. For a statutory provision then to further curtail its
operation, is precisely to follow the dictates of sound public policy.

Plaintiffs-appellees cannot, therefore, be summarily dismissed from their employment in the defendant Company as a result of their resignation
from the appellant notwithstanding the existence of a union shop clause in the labor union collective bargaining agreement, as Republic Act
No. 3350 exempts them from joining any labor organization, when such is contrary to their religious beliefs and convictions. We have also
previously held that a member of a labor union may leave and cancel his membership with the union at anytime. When an employee or laborer
joins a labor union, he does not make any commitment or assume an undertaking to continue his membership therein for any fixed period of
time, much less indefinitely. The moment he has resigned or separated from the Union, he is no longer obliged to pay his dues and assessments
to said organization. 7 We find, therefore, no error in the trial court's order, requiring both the company and defendant-appellant labor Union to
reimburse all union dues and assessments collected from plaintiffs-appellees from the date of their resignations as members of the Union until
the date of the last collection.
WHEREFORE, the appealed decision is hereby affirmed, with costs against the defendant-appellant.
Fernando (Chairman), Barredo, Fernandez and Aquino, JJ., concur.

General Milling Corporation vs. Torres

G.R No. 9366, April 22, 1991

FACTS:
Earl Timothy Cone is a US citizen, who was hired by General Milling as a sports consultant and assistant coach. He possessed an alien
employment permit which was changed to pre-arranged employee by the Board of Special Inquiry of the Commission on Immigration and
Deportation. GMC requested that Cone’s employment permit be changed to a full-fledged coach, which was contested by The Basketball
Coaches Association of the Philippines. Alleging that GMC failed to show that there is no competent person in the Philippines to do the coaching
job. Secretary of Labor cancelled Cone’s employment permit.

ISSUE:
Whether or not the Secretary of Labor act with grave abuse of discretion in revoking Cone’s Alien Employment Permit?

HELD:
The Secretary of Labor did not act with grave abuse of discretion in revoking Cone’s Alien Employment Permit. GMC’s claim that hiring of a
foreign coach is an employer’s prerogative has no legal basis. Under Section 40 of the Labor Code, an employer seeking employment of an
alien must first obtain an employment permit from the Department of labor. GMC’s right to choose whom to employ is limited by the statutory
requirement of an employment permit.
 The Labor Code empowers the Labor Secretary to determine as to the availability of the services of a “person in the Philippines who
is competent, able and willing at the time of the application to perform the services for which an alien is desired.”

PHILROCK V. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (G.R. NO. 132848-49)

Facts:
The Cid spouses, herein private respondents, were purchasers of ready-mix concrete from petitioner herein, PhilRock, Inc. The concrete
delivered by the latter turned out to be of substandard quality, and as a result the structures built using such cement developed cracks and
honey combs. Respondents, thus, filed a Complaint for Damages against petitioner with the RTC of Quezon City, which then issued an order
dismissing the case and referring the same to CIAC because the spouses and petitioner had filed an Agreement to Arbitrate. Since no common
ground can be reached by the parties, they requested the case be remanded back again to court, to which it had declared it no longer had
jurisdiction over the case and ordered the records of the case to be remanded back again to CIAC. Petitioner while contending the supposed
jurisdiction of CIAC, the latter rendered a decision in favor of the spouses. Thus, petitioner filed a Petition for Review before the CA, to which
the latter dismissed. Hence this petition.
Issue:
Whether or not the CIAC could take jurisdiction over the case of respondent spouses and petitioner after it had been dismissed by both the
RTC and CIAC.

Ruling:
The petition has no merit. Section 4 of EO 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising from or
connected with construction contracts entered into by parties that have agreed to submit their disputes to voluntary arbitration. Further, petitioner
continued participating in the arbitration even after the CIAC order has been issued as evidenced by their concluding and signing of the Terms
of Reference. The Court will not countenance any effort of any party to subvert or defeat the objective of voluntary arbitration for its own private
motives. Petitioner is stopped from assailing the jurisdiction of the CIAC, merely because the latter rendered an adverse decision.
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Augusto Santos III vs Northwest Orient Airlines

Augusto Benedicto Santos III is a minor represented by his dad. In October 1986, he bought a round trip ticket from Northwest Orient Airlines
(NOA) in San Francisco. His flight would be from San Francisco to Manila via Tokyo and back to San Francisco. His scheduled flight was in
December. A day before his departure he checked with NOA and NOA said he made no reservation and that he bought no ticket. The next
year, due to the incident, he sued NOA for damages. He sued NOA in Manila. NOA argued that Philippine courts have no jurisdiction over the
matter pursuant to Article 28(1) of the Warsaw Convention, which provides that complaints against international carriers can only be instituted
in:
1. the court of the domicile of the carrier (NOA’s domicile is in the USA);
2. the court of its principal place of business (which is San Francisco, USA);
3. the court where it has a place of business through which the contract had been made (ticket was purchased in San Francisco so that’s
where the contract was made);
4. the court of the place of destination (Santos bought a round trip ticket which final destination is San Francisco).
The lower court ruled in favor of NOA. Santos III averred that Philippine courts have jurisdiction over the case and he questioned the
constitutionality of Article 28 (1) of the Warsaw Convention.
ISSUE: Whether or not Philippine courts have jurisdiction over the matter to conduct judicial review.
HELD: No. The Supreme Court ruled that they cannot rule over the matter for the SC is bound by the provisions of the Warsaw Convention
which was ratified by the Senate. Until & unless there would be amendment to the Warsaw Convention, the only remedy for Santos III is to sue
in any of the place indicated in the Convention such as in San Francisco, USA.
The SC cannot rule upon the constitutionality of Article 28(1) of the Warsaw Convention. In the first place, it is a treaty which was a joint act by
the legislative and the executive. The presumption is that it was first carefully studied and determined to be constitutional before it was adopted
and given the force of law in this country. In this case, Santos was not able to offer any compelling argument to overcome the presumption.

Philippine Aluminum Wheels vs FASGI Enterprises

GR 137378; 12 October 2000

Facts:

On 01 June 1978, FASGI Enterprises Incorporated (“FASGI”), a corporation organized and existing under and by virtue of the laws of the State
of California, United States of America, entered into a distributorship arrangement with Philippine Aluminum Wheels, Incorporated (“PAWI”), a
Philippine corporation, and Fratelli Pedrini Sarezzo S.P.A. (“FPS”), an Italian corporation. The agreement provided for the purchase, importation
and distributorship in the United States of aluminium wheels manufactured by PAWI. FASGI then paid PAWI the FOB value of the wheels.
Unfortunately, FASGI later found the shipment to be defective and in non-compliance with the contract.

On 21 September 1979, FASGI instituted an action against PAWI and FPS for breach of contract and recovery of damages in the amount of
US$2,316,591.00 before the United States District Court for the Central District of California. In the interim, two agreements were entered by
the parties but PAWI kept on failing to discharge its obligations therein. Irked by PAWI’s persistent default, FASGI filed with the US District
Court of the Central District of California the agreements for judgment against PAWI.

On 24 August 1982, FASGI filed a notice of entry of judgment. Unable to obtain satisfaction of the final judgment within the United States,
FASGI filed a complaint for “enforcement of foreign judgment”, before RTC Makati. The Makati court, however, dismissed the case, on the
ground that the decree was tainted with collusion, fraud, and clear mistake of law and fact. The lower court ruled that the foreign judgment
ignored the reciprocal obligations of the parties. While the assailed foreign judgment ordered the return by PAWI of the purchase amount, no
similar order was made requiring FASGI to return to PAWI the third and fourth containers of wheels. This situation amounted to an unjust
enrichment on the part of FASGI. Furthermore, the RTC said, agreements which the California court had based its judgment were a nullity for
having been entered into by Mr. Thomas Ready, counsel for PAWI, without the latter’s authorization. However, the Court of Appeals reversed
this decision.

Issue: WON the Philippine Court may enforce the said foreign judgment.

Held:

In this jurisdiction, a valid judgment rendered by a foreign tribunal may be recognized insofar as the immediate parties and the underlying cause
of action are concerned so long as it is convincingly shown that there has been an opportunity for a full and fair hearing before a court of
competent jurisdiction; that trial upon regular proceedings has been conducted, following due citation or voluntary appearance of the defendant
and under a system of jurisprudence likely to secure an impartial administration of justice; and that there is nothing to indicate either a prejudice
in court and in the system of laws under which it is sitting or fraud in procuring the judgment. PAWI claims that its counsel, Mr. Ready, has
acted without its authority. Verily, in this jurisdiction, it is clear that an attorney cannot, without a client’s authorization, settle the action or subject
matter of the litigation even when he honestly believes that such a settlement will best serve his client’s interest. However, PAWI failed to
substantiate this complain with sufficient evidence. Hence, the foreign judgment must be enforced.

Even if PAWI assailed that fraud tainted the agreements which the US Court based its judgment, this cannot prevent the enforcement of said
judgment. PAWI claimed that there was collusion and fraud in the signing of the agreements. Although the US Court already adjudicated on
this matter, PAWI insisted on raising it again in this Court. Fraud, to hinder the enforcement within this jurisdiction of a foreign judgment, must
be extrinsic, i.e., fraud based on facts not controverted or resolved in the case where judgment is rendered, or that which would go to the
jurisdiction of the court or would deprive the party against whom judgment is rendered a chance to defend the action to which he has a
meritorious case or defense. In fine, intrinsic fraud, that is, fraud which goes to the very existence of the cause of action – such as fraud in
obtaining the consent to a contract – is deemed already adjudged, and it, therefore, cannot militate against the recognition or enforcement of
the foreign judgment.

Bank of America vs American Realty Corporation

GR 133876 December 29, 1999
Facts:
Petitioner granted loans to 3 foreign corporations. As security, the latter mortgaged a property located in the Philippines owned by herein
respondent ARC. ARC is a third party mortgagor who pledged its own property in favor of the 3 debtor-foreign corporations.

The debtors failed to pay. Thus, petitioner filed collection suits in foreign courts to enforce the loan. Subsequently, it filed a petition in the Sheriff
to extra-judicially foreclose the said mortgage, which was granted.

On 12 February 1993, private respondent filed before the Pasig RTC, Branch 159, an action for damages against the petitioner, for the latter’s
act of foreclosing extra-judicially the real estate mortgages despite the pendency of civil suits before foreign courts for the collection of the
principal loan.

Issue:
WON petitioner’s act of filing a collection suit against the principal debtors for the recovery of the loan before foreign courts constituted a waiver
of the remedy of foreclosure.

Held: Yes.
1. Loan; Mortgage; remedies:
In the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor either a personal action or debt
or a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies, but not both. By such election, his cause
of action can by no means be impaired, for each of the two remedies is complete in itself.
In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative. Notably, an election of one
remedy operates as a waiver of the other. For this purpose, a remedy is deemed chosen upon the filing of the suit for collection or upon the
filing of the complaint in an action for foreclosure of mortgage. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage
creditor upon filing of the petition not with any court of justice but with the Office of the Sheriff of the province where the sale is to be made.
In the case at bar, petitioner only has one cause of action which is non-payment of the debt. Nevertheless, alternative remedies are available
for its enjoyment and exercise. Petitioner then may opt to exercise only one of two remedies so as not to violate the rule against splitting a
cause of action.

Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency of filing four civil suits before foreign courts, necessarily
abandoned the remedy to foreclose the real estate mortgages constituted over the properties of third-party mortgagor and herein private
respondent ARC. Moreover, by filing the four civil actions and by eventually foreclosing extra-judicially the mortgages, petitioner in effect
transgressed the rules against splitting a cause of action well-enshrined in jurisprudence and our statute books.

2. Conflicts of Law
Incidentally, petitioner alleges that under English Law, which according to petitioner is the governing law with regard to the principal agreements,
the mortgagee does not lose its security interest by simply filing civil actions for sums of money.
We rule in the negative.

In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that there is no judicial notice of any foreign law. A
foreign law must be properly pleaded and proved as a fact. Thus, if the foreign law involved is not properly pleaded and proved, our courts will
presume that the foreign law is the same as our local or domestic or internal law. This is what we refer to as the doctrine of processual
presumption.

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved in said foreign law would still not
find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment
or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a
foreign country.

The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the splitting up of a single
cause of action.

Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum. To
give justice is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental
principles of Conflict of Laws.
Clearly then, English Law is not applicable.

Benguet Consolidated Mining Co. vs Mariano Pineda

Benguet Consolidated Mining Company was organized in 1903 under the Spanish Code of Commerce of 1886 as a sociedad anonima. It was
agreed by the incorporators that Benguet Mining was to exist for 50 years.
In 1906, Act 1459 (Corporation Law) was enacted which superseded the Code of Commerce of 1886. Act 1459 essentially introduced the
American concept of a corporation. The purpose of the law, among others, is to eradicate the Spanish Code and make sociedades anonimas
obsolete.
In 1953, the board of directors of Benguet Mining submitted to the Securities and Exchange Commission an application for them to be allowed
to extend the life span of Benguet Mining. Then Commissioner Mariano Pineda denied the application as it ruled that the extension requested
is contrary to Section 18 of the Corporation Law of 1906 which provides that the life of a corporation shall not be extended by amendment
beyond the time fixed in their original articles.
Benguet Mining contends that they have a vested right under the Code of Commerce of 1886 because they were organized under said law;
that under said law, Benguet Mining is allowed to extend its life by simply amending its articles of incorporation; that the prohibition in Section
18 of the Corporation Code of 1906 does not apply to sociedades anonimas already existing prior to the Law’s enactment; that even assuming
that the prohibition applies to Benguet Mining, it should be allowed to be reorganized as a corporation under the said Corporation Law.
ISSUE: Whether or not Benguet Mining is correct.
HELD: No. Benguet Mining has no vested right to extend its life. It is a well settled rule that no person has a vested interest in any rule of law
entitling him to insist that it shall remain unchanged for his benefit. Had Benguet Mining agreed to extend its life prior to the passage of the
Corporation Code of 1906 such right would have vested. But when the law was passed in 1906, Benguet Mining was already deprived of such
right.
To allow Benguet Mining to extend its life will be inimical to the purpose of the law which sought to render obsolete sociedades anonimas. If
this is allowed, Benguet Mining will unfairly do something which new corporations organized under the new Corporation Law can’t do – that is,
exist beyond 50 years. Plus, it would have reaped the benefits of being a sociedad anonima and later on of being a corporation. Further, under
the Corporation Code of 1906, existing sociedades anonimas during the enactment of the law must choose whether to continue as such or be
organized as a corporation under the new law. Once a sociedad anonima chooses one of these, it is already proscribed from choosing the
other. Evidently, Benguet Mining chose to exist as a sociedad anonima hence it can no longer elect to become a corporation when its life is
near its end.
LAUSAN AYOG, ET.AL., vs. JUDGE VICENTE N. CUSI
G.R. No. L-46729
November 19, 1982
FACTS:

On January 21, 1953, the Director of Lands, after bidding, awarded to Biñan Development Co., Inc. a parcel of land with an area of
about two hundred fifty hectares. The occupants of said land, herein petitioners, were ordered to vacate the same. Upon the refusal of the
occupants of the said, the corporation filed an ejectment suit. After an investigation, the Director of Lands found out that the occupants entered
the land only after it was awarded to the corporation. Thus, they could not be regarded as bona fide occupants. On July 18, 1961, the corporation
fully paid the purchase price for the land. More than thirteen years later, the Sales Patent was issued to the corporation with a reduced area of
175.3 hectares.
The petitioners contested that the adoption of the Constitution which took effect on January 17, 1973, was a supervening fact which
render it legally impossible to execute the trial court’s judgment of awarding the land in question to the corporation. They invoked the
constitutional prohibition, already mentioned, that "no private corporation or association may hold alienable lands of the public domain except
by lease not to exceed one thousand hectares in area."
The Director of Lands pointed out that the corporation had complied with the said requirements long before the effectivity of the
Constitution and that the applicant had acquired a vested right to its issuance.

ISSUE:

Whether the 1973 Constitution is an obstacle to the implementation of the trial court’s 1964 judgment ejecting the petitioners.

RULING:

NO; The Constitutional prohibition has no retroactive application to the sales application of Binan Development Co., Inc. because it
had already acquired a vested right to the land applied at the time the 1973 Constitution took effect. Moreover, the corporation’s compliance
with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the said land from the public domain.

EUGENE PERKINS v. BCMC

FACTS:
 Perkins filed an action for recovery of dividends due her as a stockholder of Benguet Consolidated Mining (“BCM”). BCM has been
carrying on in Ohio a continuous and systematic but limited part of its general business.
 Its president, while engaged in doing such business in Ohio, has been served with summons in this proceeding.
 The cause of action did not arise in Ohio and does not relate to the corporation’s activities there. Thus, the trial court sustained a
motion to quash service of summons on BCM.

HELD:
Ohio court has jurisdiction. The service of summons is valid. If an authorized representative of a foreign corporation is physically present in the
state of forum and be there engaged in activities appropriate to accepting service or receiving notice on its behalf, there is no unfairness in
subjecting the corporation to the jurisdiction of courts of that state through such service of process upon the representative. This has been
squarely held to be so in a proceeding in personam against such a corporation, at least in relation to a cause of action arising out of the
corporation’s activities within the state of the forum. The amount and kind of activities, however, which must be carried on by the foreign
corporation in the state of the forum so as to make it reasonable and just to subject the corporation to the jurisdiction of that state are to be
determined in each case.

HANG LUNG BANK, LTD., petitioner,

vs.
HON. FELINTRIYE G. SAULOG, Presiding Judge, Regional Trial Court, National Capital Judicial Region, Branch CXLII, Makati,
Metro Manila, and CORDOVA CHIN SAN, respondents.
Belo, Abiera & Associates for petitioner.
Castelo Law Office for private respondent.

FERNAN, C.J.:
Challenged in this petition for certiorari which is anchored on grave abuse of discretion, are two orders of the Regional Trial Court, Branch
CXLII of Makati, Metro Manila dismissing the complaint for collection of a sum of money and denying the motion for reconsideration of the
dismissal order on the ground that petitioner, a Hongkong-based bank, is barred by the General Banking Act from maintaining a suit in this
jurisdiction.

The records show that on July 18, 1979, petitioner Hang Lung Bank, Ltd., which was not doing business in the Philippines, entered into two (2)
continuing guarantee agreements with Cordova Chin San in Hongkong whereby the latter agreed to pay on demand all sums of money which
may be due the bank from Worlder Enterprises to the extent of the total amount of two hundred fifty thousand Hongkong dollars (HK $250,000).
Worlder Enterprises having defaulted in its payment, petitioner filed in the Supreme Court of Hongkong a collection suit agai nst Worlder
Enterprises and Chin San. Summonses were allegedly served upon Worlder Enterprises and Chin San at their addresses in Hongkong but
they failed to respond thereto. Consequently, the Supreme Court of Hongkong issued the following:

JUDGMENT
THE 14th DAY OF JUNE, 1984
No notice of intention to defend having been given by the 1st and 2nd Defendants herein, IT IS THIS DAY ADJUDGED that: —
(1) the 1st Defendant (Ko Ching Chong Trading otherwise known as the Worlder Enterprises) do pay the Plaintiff the sum of
HK$1,117,968.36 together with interest on the respective principal sums of HK$196,591.38, HK$200,216.29, HK$526,557.63, HK$49,350.00
and HK$3,965.50 at the rates of 1.7% per month (or HK$111.40 per day), 18.5% per annum (or HK$101.48 per day), 1.85% per month (or
HK$324.71 per day), 1.55% per month (or HK$25.50 per day) and 1.7% per month (or HK$2.25 per day) respectively from 4th May 1984 up to
the date of payment; and
(2) the 2nd Defendant (Cordova Chin San) do pay the Plaintiff the sum of HK$279,325.00 together with interest on the principal sum of
HK$250,000.00 at the rate of 1.7% per month (or HK$141.67 per day) from 4th May 1984 up to the date of payment.
AND IT IS ADJUDGED that the 1st and 2nd Defendants do pay the Plaintiff the sum of HK$970.00 fixed costs.
N.J. BARNETT
Registrar
Thereafter, petitioner through counsel sent a demand letter to Chin San at his Philippine address but again, no response was made thereto.
Hence, on October 18, 1984, petitioner instituted in the court below an action seeking "the enforcement of its just and valid claims against
private respondent, who is a local resident, for a sum of money based on a transaction which was perfected, executed and consummated
abroad."2
In his answer to the complaint, Chin San raised as affirmative defenses: lack of cause of action, incapacity to sue and improper venue.

Pre-trial of the case was set for June 17, 1985 but it was postponed to July 12, 1985. However, a day before the latter pre-trial date, Chin San
filed a motion to dismiss the case and to set the same for hearing the next day. The motion to dismiss was based on the grounds that petitioner
had no legal capacity to sue and that venue was improperly laid.

Acting on said motion to dismiss, on December 20, 1985, the lower court 4 issued the following order:
On defendant Chin San Cordova's motion to dismiss, dated July 10, 1985; plaintiff's opposition, dated July 12, 1985; defendant's reply, dated
July 22, 1985; plaintiff's supplemental opposition, dated September 13, 1985, and defendant's rejoinder filed on September 23, 1985, said
motion to dismiss is granted.
Section 14, General Banking Act provides:

"No foreign bank or banking corporation formed, organized or existing under any laws other than those of the Republic of the Philippines, shall
be permitted to transact business in the Philippines, or maintain by itself any suit for the recovery of any debt, claims or demands whatsoever
until after it shall have obtained, upon order of the Monetary Board, a license for that purpose."

Plaintiff Hang Lung Bank, Ltd. with business and postal address at the 3rd Floor, United Centre, 95 Queensway, Hongkong, does not do
business in the Philippines. The continuing guarantee, Annexes "A" and "B" appeared to have been transacted in Hongkong. Plaintiff's Annex
"C" shows that it had already obtained judgment from the Supreme Court of Hongkong against defendant involving the same claim on June
14, 1984.

The cases of Mentholatum Company, Inc. versus Mangaliman, 72 Phil. 524 and Eastern Seaboard Navigation, Ltd. versus Juan Ysmael &
Company, Inc., 102 Phil. 1-8, relied upon by plaintiff, deal with isolated transaction in the Philippines of foreign corporation. Such transaction
though isolated is the one that conferred jurisdiction to Philippine courts, but in the instant case, the transaction occurred in Hongkong.
Case dismissed. The instant complaint not the proper action.

SO ORDERED.5

Petitioner filed a motion for the reconsideration of said order but it was denied for lack of merit.6 Hence, the instant petition for certiorari seeking
the reversal of said orders "so as to allow petitioner to enforce through the court below its claims against private respondent as recognized by
the Supreme Court of Hongkong."7
Petitioner asserts that the lower court gravely abused its discretion in: (a) holding that the complaint was not the proper action for purposes of
collecting the amount guaranteed by Chin San "as recognized and adjudged by the Supreme Court of Hongkong;" (b) interpreting Section 14
of the General Banking Act as precluding petitioner from maintaining a suit before Philippine courts because it is a foreign corporation not
licensed to do business in the Philippines despite the fact that it does not do business here; and (c) impliedly sustaining private respondent's
allegation of improper venue.

We need not detain ourselves on the issue of improper venue. Suffice it to state that private respondent waived his right to invoke it when he
forthwith filed his answer to the complaint thereby necessarily implying submission to the jurisdiction of the court. 8

The resolution of this petition hinges on a determination of whether petitioner foreign banking corporation has the capacity to file the action
below.

Private respondent correctly contends that since petitioner is a bank, its capacity to file an action in this jurisdiction is governed by the General
Banking Act (Republic Act No. 337), particularly Section 14 thereof which provides:

SEC. 14. No foreign bank or banking corporation formed, organized or existing under any laws other than those of the Republic of the
Philippines shall be permitted to transact business in the Philippines, or maintain by itself or assignee any suit for the recovery of any debt,
claims, or demand whatsoever, until after it shall have obtained, upon order of the Monetary Board, a license for that purpose from the Securities
and Exchange Commissioner. Any officer, director or agent of any such corporation who transacts business in the Philippines without the said
license shall be punished by imprisonment for not less than one year nor more than ten years and by a fine of not l ess than one thousand
pesos nor more than ten thousand pesos. (45 O.G. No. 4, 1647, 1649-1650)

In construing this provision, we adhere to the interpretation given by this Court to the almost identical Section 69 of the old Corporation Law
(Act No. 1459) which reads:

SEC. 69. No foreign corporation or corporation formed, organized, or existing under any laws other than those of the Philippines shall
be permitted to transact business in the Philippines or maintain by itself or assignee any suit for the recovery of any debt, claim, or demand
whatever, unless it shall have the license prescribed in the section immediately preceding. Any officer, director or agent of the corporation or
any person transacting business for any foreign corporation not having the license prescribed shall be punished by imprisonment for not less
than six months nor more than two years or by a fine of not less than two hundred pesos nor more than one thousand pesos, or by both such
imprisonment and fine, in the discretion of the Court.

In a long line of cases, this Court has interpreted this last quoted provision as not altogether prohibiting a foreign corporation not licensed to do
business in the Philippines from suing or maintaining an action in Philippine courts. 9What it seeks to prevent is a foreign corporation doing
business in the Philippines without a license from gaining access to Philippine courts. As elucidated in Marshall-Wells Co. vs. Elser & Co., 46
Phil. 70:

The object of the statute was to subject the foreign corporation doing business in the Philippines to the jurisdiction of its courts. The object of
the statute was not to prevent it from performing single acts but to prevent it from acquiring a domicile for the purpose of business without
taking the steps necessary to render it amenable to suit in the local courts. The implication of the law is that it was never the purpose of the
Legislature to exclude a foreign corporation which happens to obtain an isolated order for business from the Philippines from securing redress
from Philippine courts, and thus, in effect, to permit persons to avoid their contract made with such foreign corporation. The effect of the statute
preventing foreign corporations from doing business and from bringing actions in the local courts, except on compliance with elaborate
requirements, must not be unduly extended or improperly applied. It should not be construed to extend beyond the plain meaning of its terms,
considered in connection with its object, and in connection with the spirit of the entire law.

The fairly recent case of Universal Shipping Lines vs. Intermediate Appellate Court,10 although dealing with the amended version of Section 69
of the old Corporation Law, Section 133 of the Corporation Code (Batas Pambansa Blg. 68), but which is nonetheless apropos, states the rule
succinctly: "it is not the lack of the prescribed license (to do business in the Philippines) but doing business without license, which bars a foreign
corporation from access to our courts."

Thus, we have ruled that a foreign corporation not licensed to do business in the Philippines may file a suit in this country due to the collision
of two vessels at the harbor of Manila and for the loss of goods bound for Hongkong but erroneously discharged in Manila.

Indeed, the phraseologies of Section 14 of the General Banking Act and its almost identical counterpart Section 69 of the old Corporation Law
are misleading in that they seem to require a foreign corporation, including a foreign bank or banking corporation, not licensed to do business
and not doing business in the Philippines to secure a license from the Securities and Exchange Commission before it can bring or maintain an
action in Philippine courts. To avert such misimpression, Section 133 of the Corporation Code is now more plainly worded thus:

No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or
intervene in any action, suit or proceeding in any court or administrative agency of the Philippines.

Under this provision, we have ruled that a foreign corporation may sue in this jurisdiction for infringement of trademark and unfair competition
although it is not doing business in the Philippines13 because the Philippines was a party to the Convention of the Union of Paris for the
Protection of IndustrialProperty.14
We even went further to say that a foreign corporation not licensed to do business in the Philippines may not be denied the right to file an action
in our courts for an isolated transaction in this country.15

Since petitioner foreign banking corporation was not doing business in the Philippines, it may not be denied the privilege of pursuing its claims
against private respondent for a contract which was entered into and consummated outside the Philippines. Otherwise we will be hampering
the growth and development of business relations between Filipino citizens and foreign nationals. Worse, we will be allowing the law to serve
as a protective shield for unscrupulous Filipino citizens who have business relationships abroad.
In its pleadings before the court, petitioner appears to be in a quandary as to whether the suit below is one for enforcement or recognition of
the Hongkong judgment. Its complaint states:

COMES NOW Plaintiff, by undersigned counsel, and to this Honorable Court, most respectfully alleges that:

1. Plaintiff is a corporation duly organized and existing under and by virtue of the laws of Hongkong with business and postal address at
the 3rd Floor, United Centre, 95 Queensway, Hongkong, not doing business in the Philippines, but is suing for this isolated transaction, but for
purposes of this complaint may be served with summons and legal processes of this Honorable Court, at the 6th Floor, Cibeles Building, 6780
Ayala Avenue, Makati, Metro Manila, while defendant Cordova Chin San, may be served with summons and other legal processes of this
Honorable Court at the Municipality of Moncada, Province of Tarlac, Philippines;

2. On July 18, 1979 and July 25, 1980, the defendant executed Continuing Guarantees, in consideration of plaintiff's from time to time
making advances, or coming to liability or discounting bills or otherwise giving credit or granting banking facilities from time to time to, or on
account of the Wolder Enterprises (sic), photocopies of the Contract of Continuing Guarantees are hereto attached as Annexes "A" and "B",
respectively, and made parts hereof;
3. In June 1984, a complaint was filed by plaintiff against the Wolder Enterprises (sic) and defendant Cordova Chin San, in The Supreme
Court of Hongkong, under Case No. 3176, and pursuant to which complaint, a judgment dated 14th day of July, 1984 was rendered by The
Supreme Court of Hongkong ordering to (sic) defendant Cordova Chin San to pay the plaintiff the sum of HK$279,325.00 together with interest
on the principal sum of HK$250,000.00 at the rate of HK$1.7% per month or (HK$141.67) per day from 4th May, 1984 up to the date the said
amount is paid in full, and to pay the sum of HK$970.00 as fixed cost, a photocopy of the Judgment rendered by The Supreme Co urt of
Hongkong is hereto attached as Annex "C" and made an integral part hereof.

4. Plaintiff has made demands upon the defendant in this case to pay the aforesaid amount the last of which is by letter dated July 16,
1984 sent by undersigned counsel, a photocopy of the letter of demand is hereto attached as Annex "D" and the Registry Return Card hereto
attached as Annex "E", respectively, and made parts hereof. However, this notwithstanding, defendant failed and refused and still continue to
fail and refuse to make any payment to plaintiff on the aforesaid amount of HK$279,325.00 plus interest on the principal sum of HK$250,000.00
at the rate of (HK$141.67) per day from May 4, 1984 up to the date of payment;

5. In order to protect and safeguard the rights and interests of herein plaintiff, it has engaged the services of undersigned counsel, to file
the suit at bar, and for whose services it has agreed to pay an amount equivalent to 25% of the total amount due and owing, as of and by way
of attorney's fees plus costs of suit.

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that judgment be rendered ordering the defendant:

a) To pay plaintiff the sum of HK$279,325.00 together with interest on the principal sum of HK$260,000.00 at the rate of HK$1.7% (sic) per
month (or HK$141.67 per day) from May 4, 1984 until the aforesaid amount is paid in full;
b) To pay an amount equivalent to 25% of the total amount due and demandable as of and by way of attorney's fees; and
c) To pay costs of suit, and
Plaintiff prays for such other and further reliefs, to which it may by law and equity, be entitled.16
The complaint therefore appears to be one of the enforcement of the Hongkong judgment because it prays for the grant of the affirmative relief
given by said foreign judgment.17 Although petitioner asserts that it is merely seeking the recognition of its claims based on the contract sued
upon and not the enforcement of the Hongkong judgment18it should be noted that in the prayer of the complaint, petitioner simply copied the
Hongkong judgment with respect to private respondent's liability.

However, a foreign judgment may not be enforced if it is not recognized in the jurisdiction where affirmative relief is being sought. Hence, in
the interest of justice, the complaint should be considered as a petition for the recognition of the Hongkong judgment under Section 50 (b),
Rule 39 of the Rules of Court in order that the defendant, private respondent herein, may present evidence of lack of jurisdiction, notice,
collusion, fraud or clear mistake of fact and law, if applicable.

WHEREFORE, the questioned orders of the lower court are hereby set aside. Civil Case No. 8762 is reinstated and the lower court is directed
to proceed with dispatch in the disposition of said case. This decision is immediately executory. No costs.
SO ORDERED.

IDONAH PERKINS vs. ROXAS ET AL.

FACTS:
July 5, 1938, respondent Eugene Perkins filed a complaint in the CFI- Manila against the Benguet Consolidated Mining Company for the
recovery of a sum consisting of dividends which have been declared and made payable on shares of stock registered in his name, payment of
which was being withheld by the company, and for the recognition of his right to the control and disposal of said shares to the exclusion of all
others. The company alleged, by way of defense that the withholding of plaintiff’s right to the disposal and control of the shares was due to
certain demands made with respect to said shares by the petitioner Idonah Perkins, and by one Engelhard.
Eugene Perkins included in his modified complaint as parties defendants petitioner, Idonah Perkins, and Engelhard. Eugene Perkins prayed
that petitioner Idonah Perkins and H. Engelhard be adjudged without interest in the shares of stock in question and excluded from any claim
they assert thereon. Summons by publication were served upon the nonresident defendants Idonah Perkins and Engelhard. Engelhard filed
his answer. Petitioner filed her answer with a crosscomplaint in which she sets up a judgment allegedly obtained by her against respondent
Eugene Perkins, from the SC of the State of New York, wherein it is declared that she is the sole legal owner and entitled to the possession
and control of the shares of stock in question with all the cash dividends declared thereon by the Benguet Consolidated Mining Company.
Idonah Perkins filed a demurrer thereto on the ground that “the court has no jurisdiction of the subject of the action,” because the alleged
judgment of the SC of the State of New York is res judicata. Petitioner’s demurrer was overruled, thus this petition.

ISSUE:
WON in view of the alleged judgment entered in favor of the petitioner by the SC of New York and which is claimed by her to be res judicata
on all questions raised by the respondent, Eugene Perkins, the local court has jurisdiction over the subject matter of the action.

RULING:
By jurisdiction over the subject matter is meant the nature of the cause of action and of the relief sought, and this is conferred by the sovereign
authority which organizes the court, and is to be sought for in general nature of its powers, or in authority specially conferred. In the present
case, the amended complaint filed by the respondent, Eugene Perkins alleged calls for the adjudication of title to certain shares of stock of the
Benguet Consolidated Mining Company and the granting of affirmative reliefs, which fall within the general jurisdiction of the CFI- Manila.
Similarly CFI- Manila is empowered to adjudicate the several demands contained in petitioner’s crosscomplaint.

Idonah Perkins in her crosscomplaint brought suit against Eugene Perkins and the Benguet Consolidated Mining Company upon the alleged
judgment of the SC of the State of New York and asked the court below to render judgment enforcing that New York judgment, and to issue
execution thereon. This is a form of action recognized by section 309 of the Code of Civil Procedure (now section 47, Rule 39, Rules of Court)
and which falls within the general jurisdiction of the CFI- Manila, to adjudicate, settle and determine.

The petitioner expresses the fear that the respondent judge may render judgment “annulling the final, subsisting, valid judgment rendered and
entered in this petitioner’s favor by the courts of the State of New York, which decision is res judicata on all the questions constituting the
subject matter of civil case” and argues on the assumption that the respondent judge is without jurisdiction to take cognizance of the cause.
Whether or not the respondent judge in the course of the proceedings will give validity and efficacy to the New York judgment set up by the
petitioner in her cross-complaint is a question that goes to the merits of the controversy and relates to the rights of the parties as between each
other, and not to the jurisdiction or power of the court. The test of jurisdiction is whether or not the tribunal has power to enter upon the inquiry,
not whether its conclusion in the course of it is right or wrong. If its decision is erroneous, its judgment can be reversed on appeal; but its
determination of the question, which the petitioner here anticipates and seeks to prevent, is the exercise by that court and the rightful exercise
of its jurisdiction.
Petition denied.

PHILSEC INVESTMENT et al vs.CA et al

G.R. No. 103493
June 19, 1997

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 Ducat’s
obligation under an Agreement, whereby 1488, Inc. executed a Warranty Deed with Vendor’s 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.

The trial court granted Ducat’s 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.

Petitioners appealed to the CA, arguing that the trial court erred in applying the principle of litis pendentia and forum non conveniens.
The CA affirmed the dismissal of Civil Case against Ducat, 1488, Inc., and Daic on the ground of litis pendentia.

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 court’s 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 court’s desistance.
TIME, INC., petitioner, vs. HON. ANDRES REYES, as Judge of the Court of First Instance of Rizal, ELISEO S. ZARI, as Deputy Clerk
of Court, Branch VI, Court of First Instance of Rizal, ANTONIO J. VILLEGAS and JUAN PONCE ENRILE, respondents.

REYES, J.B.L., J.:

Petition for certiorari and prohibition, with preliminary injunction, to annul certain orders of the respondent Court of First Instance of Rizal,
issued in its Civil Case No. 10403, entitled "Antonio J. Villegas and Juan Ponce Enrile vs. Time, Inc., and Time-Life International, Publisher of
'Time' Magazine (Asia Edition)", and to prohibit the said court from further proceeding with the said civil case.

Upon petitioner's posting a bond of P1,000.00, this Court, as prayed for, ordered, on 15 April 1968, the issuance of a writ of preliminary
injunction.

The petition alleges that petitioner Time, Inc., 1 is an American corporation with principal offices at Rocketfeller Center, New York City, N. Y.,
and is the publisher of "Time", a weekly news magazine; the petition, however, does not allege the petitioner's legal capacity to sue in the
courts of the Philippine.2
In the aforesaid Civil Case No. 10403, therein plaintiffs (herein respondents) Antonio J. Villegas and Juan Ponce Enrile seek to recover from
the herein petitioner damages upon an alleged libel arising from a publication of Time (Asia Edition) magazine, in its issue of 18 August 1967,
of an essay, entitled

"Corruption in Asia", which, in part, reads, as follows:

The problem of Manila's mayor, ANTONIO VILLEGAS, is a case in point. When it was discovered last year that the mayor's coffers contained
far more pesos than seemed reasonable in the light of his income, an investigation was launched. Witnesses who had helped him out under
curious circumstance were asked to explain in court. One government official admitted lending Villegas P30,000 pesos ($7,700) without interest
because he was the mayor's compadre. An assistant declared he had given Villegas loans without collateral because he regarded the boss as
my own son. A wealthy Manila businessman testified that he had lent Villegas' wife 15,000 pesos because the mayor was like a brother to me.
With that, Villegas denounced the investigation as an invasion of his family's privacy. The case was dismissed on a technicality, and Villegas
is still mayor.3
More specifically, the plaintiffs' complaint alleges, inter alia that:
(4) Defendants, conspiring and confederating, published a libelous article, publicly, falsely and maliciously imputing to Plaintiffs the
commission of the crimes of graft, corruption and nepotism; that said publication particularly referred to Plaintiff Mayor Antonio J. Villegas as a
case in point in connection with graft, corruption and nepotism in Asia; that said publication without any doubt referred to co-plaintiff Juan Ponce
Enrile as the high government official who helped under curious circumstances Plaintiff Mayor Antonio J. Villegas in lending the latter
approximately P30,000.00 ($7,700.00) without interest because he was the Mayor's compadre; that the purpose of said Publications is to cause
the dishonor, discredit and put in public contempt the Plaintiffs, particularly Plaintiff Mayor Antonio J. Villegas.

On motion of the respondents-plaintiffs, the respondent judge, on 25 November 1967, granted them leave to take the depositions "of Mr.
Anthony Gonzales, Time-Life international", and "Mr. Cesar B. Enriquez, Muller & Phipps (Manila) Ltd.", in connection with the activities and
operations in the Philippines of the petitioner, and, on 27 November 1967, issued a writ of attachment on the real and personal estate of
Time, Inc.

Petitioner received the summons and a copy of the complaint at its offices in New York on 13 December 1967 and, on 27 December 1967, it
filed a motion to dismiss the complaint for lack of jurisdiction and improper venue, relying upon the provisions of Republic Act 4363. Private
respondents opposed the motion.
In an order dated 26 February 1968, respondent court deferred the determination of the motion to dismiss until after trial of the case on the
merits, the court having considered that the grounds relied upon in the motion do not appear to be indubitable.

Petitioner moved for reconsideration of the deferment private respondents again opposed.
On 30 March 1968, respondent judge issued an order re-affirming the previous order of deferment for the reason that "the rule laid down under
Republic Act. No. 4363, amending Article 360 of the Revised Penal Code, is not applicable to actions against non-resident defendants, and
because questions involving harassment and inconvenience, as well as disruption of public service do not appear indubitable. ..."

Failing in its efforts to discontinue the taking of the depositions, previously adverted to, and to have action taken, before trial, on its motion to
dismiss, petitioner filed the instant petition for certiorari and prohibition.
The orders for the taking of the said depositions, for deferring determination of the motion to dismiss, and for reaffirming the deferment, and
the writ of attachment are sought to be annulled in the petition..

There is no dispute that at the time of the publication of the allegedly offending essay, private respondents Antonio Villegas and Juan Ponce
Enrile were the Mayor Of the City of Manila and Undersecretary of Finance and concurrently Acting Commissioner of Customs, respectively,
with offices in the City of Manila. The issues in this case are:
1. Whether or not, under the provisions of Republic Act No. 4363 the respondent Court of First Instance of Rizal has jurisdiction to take
cognizance of the civil suit for damages arising from an allegedly libelous publication, considering that the action was instituted by public officers
whose offices were in the City of Manila at the time of the publication; if it has no jurisdiction, whether or not its erroneous assumption of
jurisdiction may be challenged by a foreign corporation by writ of certiorari or prohibition; and
2. Whether or not Republic Act 4363 is applicable to action against a foreign corporation or non-resident defendant.
Provisions of Republic Act No. 4363, which are relevant to the resolution of the foregoing issues, read, as follows:
Section 1. Article three hundred sixty of the Revised Penal Code, as amended by Republic Act Numbered Twelve hundred and eighty-
nine, is further amended to read as follows:
'ART. 360. Persons responsible. — Any person who shall publish, exhibit, or cause the publication or exhibition of any defamation in
writing or by similar means, shall be responsible for the same.
The author or editor of a book or pamphlet, or the editor or business manager of a daily newspaper, magazine or serial public ation, shall be
responsible for the defamations contained therein to the extent as if he were the author thereof.
The criminal and civil action for damages in cases of written defamations as provided for in this chapter, shall be filed sim ultaneously or
separately with the court of first instance of the province or city where the libelous article is printed and first published or where any of the
offended parties actually resides at the time of the commission of the offense; Provided, however, That where one of the offended parties is a
public officer whose office is in the City of Manila at the time of the commission of the offense, the action shall be filed in the Court of First
Instance of the City of Manila or of the city or province where the libelous article is printed and first published, and in case such public officer
does not hold office in the City of Manila, the action shall be filed in the Court of First Instance of the province or city where he held office at
the time of the commission of the offense or where the libelous article is printed and first published and in case one of the offended parties is
a private individual, the action shall be filed in the Court of First Instance of the province or city where he actually resides at the time of the
commission of the offense or where the libelous matter is printed and first published; Provided,further, That the civil action shall be filed in the
same court where the criminal action is filed and vice versa; Provided, furthermore, That the court where the criminal action or civil action for
damages is first filed, shall acquire jurisdiction to the exclusion of other courts; And provided finally, That this amendment shall not apply to
cases of written defamations, the civil and/or criminal actions which have been filed in court at the time of the effectivity of the law
xxx xxx xxx
xxx xxx xxx
Sec. 3. This Act shall take effect only if and when, within thirty days from its approval, the newspapermen in the Philippines shall organize, and
elect the members of, a Philippine Press Council, a private agency of the said newspapermen, whose function shall be to promulgate a Code
of Ethics for them and the Philippine press investigate violations thereof, and censure any newspaperman or newspaper guilty of any violation
of the said Code, and the fact that such Philippine Press Council has been organized and its members have been duly elected in accordance
herewith shall be ascertained and proclaimed by the President of the Philippines.
Under the first proviso in section 1, the venue of a civil action for damages in cases of written defamations is localized upon the basis of, first,
whether the offended party or plaintiff is a public officer or a private individual; and second, if he is a public officer, whether his office is in
Manila or not in Manila, at the time of the commission of the offense. If the offended party is a public officer in the office in the City of Manila,
the proviso limits him to two (2) choices of venue, namely, in the Court of First instance of the City of Manila or in the city or province where
the libelous article is printed and first published ..."
The complaint lodged in the court of Rizal by respondents does not allege that the libelous article was printed and first published in the province
of Rizal and, since the respondents-plaintiffs are public officers with offices in Manila at the time of the commission of the alleged offense, it is
clear that the only place left for them wherein to file their action, is the Court of First Instance of Manila.
The limitation of the choices of venue, as introduced into the Penal Code through its amendments by Republic Act 4363, was intended "to
minimize or limit the filing of out-of-town libel suits" to protect an alleged offender from "hardships, inconveniences and harassments" and,
furthermore, to protect "the interest of the public service" where one of the offended parties is a public officer." 4 The intent, of the law is clear:
a libeled public official might sue in the court of the locality where he holds office, in order that the prosecution of the action should interfere as
little as possible with the discharge of his official duties and labors. The only alternative allowed him by law is to prosecute those responsible
for the libel in the place where the offending article was printed and first published. Here, the law tolerates the interference with the libeled
officer's duties only for the sake of avoiding unnecessary harassment of the accused. Since the offending publication was not printed in the
Philippines, the alternative venue was not open to respondent Mayor Villegas of Manila and Undersecretary of Finance Enrile, who were the
offended parties.
But respondents-plaintiffs argue that Republic Act No. 4363 is not applicable where the action is against non-existent defendant, as petitioner
Time, Inc., for several reasons. They urge that, in enacting Republic Act No. 4363, Congress did not intend to protect non-resident defendants
as shown by Section 3, which provides for the effectivity of the statute only if and when the "newspapermen in the Philippines" have organized
a "Philippine Press Council" whose function shall be to promulgate a Code of Ethics for "them" and "the Philippine press"; and since a non-
resident defendant is not in a position to comply with the conditions imposed for the effectivity of the statute, such defendant may not invoke
its provisions; that a foreign corporation is not inconvenienced by an out-of-town libel suit; that it would be absurd and incongruous, in the
absence of an extradition treaty, for the law to give to public officers with office in Manila the second option of filing a criminal case in the court
of the place where the libelous article is printed and first published if the defendant is a foreign corporation and that, under the "single publication"
rule which originated in the United States and imported into the Philippines, the rule was understood to mean that publications in another state
are not covered by venue statutes of the forum.

The implication of respondents' argument is that the law would not take effect as to non-resident defendants or accused. We see nothing in the
text of the law that would sustain such unequal protection to some of those who may be charged with libel. The official proclamation that a
Philippine Press Council has been organized is made a pre-condition to the effectivity of the entire Republic Act No. 4363, and no terms are
employed therein to indicate that the law can or will be effective only as to some, but not all, of those that may be charged with libeling our
public officers.

The assertion that a foreign corporation or a non-resident defendant is not inconvenienced by an out-of-town suit is irrelevant and untenable,
for venue and jurisdiction are not dependent upon convenience or inconvenience to a party; and moreover, venue was fixed unde r Republic
Act No. 4363, pursuant to the basic policy of the law that is, as previously stated, to protect the interest of the public service when the offended
party is a public officer, by minimizing as much as possible any interference with the discharge of his duties.

That respondents-plaintiffs could not file a criminal case for libel against a non-resident defendant does not make Republic Act No. 4363
incongruous of absurd, for such inability to file a criminal case against a non-resident natural person equally exists in crimes other than libel. It
is a fundamental rule of international jurisdiction that no state can by its laws, and no court which is only a creature of the state, can by its
judgments or decrees, directly bind or affect property or persons beyond the limits of the state. 5 Not only this, but if the accused is a corporation,
no criminal action can lie against it,6 whether such corporation or resident or non-resident. At any rate, the case filed by respondents-plaintiffs
is case for damages.

50 Am. Jur. 2d 659 differentiates the "multiple publication" and "single publication" rules (invoked by private respondents) to be as follows:
The common law as to causes of action for tort arising out of a single publication was to the effect that each communication of written or printed
matter was a distinct and separate publication of a libel contained therein, giving rise to a separate cause of action. This rule ('multiple
publication' rule) is still followed in several American jurisdictions, and seems to be favored by the American Law Institute. Other jurisdictions
have adopted the 'single publication' rule which originated in New York, under which any single integrated publication, such as one edition of
a newspaper, book, or magazine, or one broadcast, is treated as a unit, giving rise to only one cause of action, regardless of the number of
times it is exposed to different people. ...
These rules are not pertinent in the present scheme because the number of causes of action that may be available to the respondents-plaintiffs
is not here in issue. We are here confronted by a specific venue statute, conferring jurisdiction in cases of libel against Public officials to
specified courts, and no other. The rule is that where a statute creates a right and provides a remedy for its enforcement, the remedy is
exclusive; and where it confers jurisdiction upon a particular court, that jurisdiction is likewise exclusive, unless otherwise provided. Hence, the
venue provisions of Republic Act No. 4363 should be deemed mandatory for the party bringing the action, unless the question of venue should
be waived by the defendant, which was not the case here. Only thus can the policy of the Act be upheld and maintained. Nor is there any
reason why the inapplicability of one alternative venue should result in rendering the other alternative, also inapplicable.

The dismissal of the present petition is asked on the ground that the petitioner foreign corporation failed to allege its capacity to sue in the
courts of the Philippines. Respondents rely on section 69 of the Corporation law, which provides:
SEC. 69. No foreign corporation or corporations formed, organized, or existing under any laws other than those of the Philippines shall
be permitted to ... maintain by itself or assignee any suit for the recovery of any debt, claim, or demand whatever, unless it shall have the
license prescribed in the section immediately preceding. ..." ...;
They also invoke the ruling in Marshall-Wells Co. vs. Elser & Co., Inc.7 that no foreign corporation may be permitted to maintain any suit in the
local courts unless it shall have the license required by the law, and the ruling in Atlantic Mutual Ins. Co., Inc. vs. Cebu Stevedoring Co., Inc.8
that "where ... the law denies to a foreign corporation the right to maintain suit unless it has previously complied with a certain requirement,
then such compliance or the fact that the suing corporation is exempt therefrom, becomes a necessary averment in the complaint." We fail to
see how these doctrines can be a propos in the case at bar, since the petitioner is not "maintaining any suit" but is merely defending one against
itself; it did not file any complaint but only a corollary defensive petition to prohibit the lower court from further proceeding with a suit that it had
no jurisdiction to entertain.

Petitioner's failure to aver its legal capacity to institute the present petition is not fatal, for ...
A foreign corporation may, by writ of prohibition, seek relief against the wrongful assumption of jurisdiction. And a foreign corporation seeking
a writ of prohibition against further maintenance of a suit, on the ground of want of jurisdiction in which jurisdiction is not bound by the ruling of
the court in which the suit was brought, on a motion to quash service of summons, that it has jurisdiction.9

It is also advanced that the present petition is premature, since respondent court has not definitely ruled on the motion to dismiss, nor held
that it has jurisdiction, but only argument is untenable. The motion to dismiss was predicated on the respondent court's lack of jurisdiction to
entertain the action; and the rulings of this Court are that writs of certiorari or prohibition, or both, may issue in case of a denial or deferment
of action on such a motion to dismiss for lack of jurisdiction.

If the question of jurisdiction were not the main ground for this petition for review by certiorari, it would be premature because it seeks to have
a review of an interlocutory order. But as it would be useless and futile to go ahead with the proceedings if the court below had no jurisdiction
this petition was given due course.' (San Beda vs. CIR, 51 O.G. 5636, 5638).

'While it is true that action on a motion to dismiss may be deferred until the trial and an order to that effect is interlocutory, still where it clearly
appears that the trial judge or court is proceeding in excess or outside of its jurisdiction, the remedy of prohibition would lie since it would be
useless and a waste of time to go ahead with the proceedings. (Philippine International Fair, Inc., et al. vs. Ibañez, et al., 50 Off. Gaz. 1036;
Enrique v. Macadaeg, et al., 47 Off. Gaz. 1207; see also San Beda College vs. CIR, 51 Off. Gaz. 5636.)' (University of Sto. Tomas v. Villanueva,
L-13748, 30 October 1959.).
Similarly, in Edward J. Nell Co. vs. Cubacub, L-20843, 23 June 1965, 14 SCRA 419, this Court held:
'.......................................................... It is a settledrule that the jurisdiction of a court over the subject-matter is determined by the allegations in
the complaint; and when a motion to dismiss is filed for lack of jurisdiction those allegations are deemed admitted for purposes of such motion,
so that it may be resolved without waiting for the trial. Thus it has been held that the consideration thereof may not be pos tponed in the hope
that the evidence may yield other qualifying or concurring data which would bring the case under the court's jurisdiction.'

To the same effect are the rulings in: Ruperto vs. Fernando, 83 Phil. 943; Administrator of Hacienda Luisita Estate vs. Alberto, L-12133, 21
October 1958.

Summing up, We hold:

(1) The under Article 360 of the Revised Penal Code, as amended by Republic Act No. 4363, actions for damages by public officials for
libelous publications against them can only be filed in the courts of first instance ofthe city or province where the offended functionary held
office at the time ofthe commission of the offense, in case the libelous article was first printed or published outside the Philippines.
(2) That the action of a court in refusing to rule, or deferring its ruling, on a motion to dismiss for lack of jurisdiction over the subject matter,
or for improper venue, is in excess of jurisdiction and correctable by writ of prohibition or certiorari sued out in the appellate Court, even before
trial on the merits is had.
WHEREFORE, the writs applied for are granted: the respondent Court of First Instance of Rizal is declared without jurisdiction to take
cognizance of its Civil Case No. 10403; and its orders issued in connection therewith are hereby annulled and set aside,. Respondent court is
further commanded to desist from further proceedings in Civil case No. 10403 aforesaid. Costs against private respondents, Antonio J. Villegas
and Juan Ponce Enrile.
The writ of preliminary injunction heretofore issued by this Supreme Court is made permanent.

LAUREL V. GARCIA
187 SCRA 797

FACTS:
The subject Roppongi property is one of the properties acquired by the Philippines from Japan pursuant to a Reparations Agreemen t.
The property is where the Philippine Embassy was once located, before it transferred to the Nampeidai property. It was decided that
the properties would be
available to sale or disposition. One of the first properties opened up for public auction was the Roppongi property, despite numerous
oppositions from different sectors.

HELD:

The Roppongi property was acquired together with the other properties through reparation agreements. They were assigned to the
government sector and that the Roppongi property was specifically designated under the agreement to house the Philippine embassy.

It is of public dominion unless it is convincingly shown that the property has become patrimonial. The respondents have failed to do
so.

As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special
collective ownership for general use and payment, in application to the satisfaction of collective needs, and resides in the social group.
The purpose is not to serve the State as the juridical person but the citizens; it is intended for the common and public welfare and
cannot be the object of appropriation.

The fact that the Roppongi site has not been used for a long time for actual Embassy service doesn’t automatically convert it to patrimonial
property. Any such conversion happens only if the property is withdrawn from public use. A property continues to be part of the public domain,
not available for
private appropriation or ownership until there is a formal declaration on the part of the government to withdraw it from being such.

American Inter-Fashion Corporation vs. Office of the President, Garments and Textile Export Board and Glorious Sun Fashion
Garments Manufacturing Co. (G.R. No. 92422)

Facts:
Glorious Sun Fashion was found guilty by GTEB of dollar salting and mis-declaration of importations. As a result, its export quotas were
cancelled. After GTEB rendered its decision, Glorious filed with the Court a petition for certiorari and prohibition contending that its right to due
process of law was violated and that GTEB decision was not supported by substantial evidence. The Court then issued a resolution ordering
GTEB to conduct further proceedings. However, on July 25, 1984, Glorious filed a manifestation of its intention to withdraw the petition. The
Court granted the motion for withdrawal. Glorious filed another motion to dismiss with prejudice which the Court duly noted.

After two years, Glorious filed with GTEB a petition for restitution of its export quota allocation and requested for a reconsideration of the GTEB
decision dated April 27, 1984. Glorious once again alleged that the charges against them were not supported by evidence. Moreover, it alleged
that the GTEB decision cancelling its export quota was rendered as a result of duress, threats, intimidation and undue influence exercised by
former Minister Roberto V. Ongpin in order to transfer Glorious export quotas to “Marcos crony-owned” corporations. Glorious further alleged
that it was coerced by Mr. Roberto Ongpin to withdraw its petition in G.R. No. 67180 and to enter into joint venture agreements paving the way
for the creation of De Soleil Apparel and AIFC.

On Sept. 4, 1987, GTEB denied the petition of Glorious. An appeal was then taken on Oct. 5, 1987 to the Office of the President. AIFC filed its
opposition to Glorious’ appeal claiming that the GTEB decision dated April 27, 1984 has long been final. The Office of the President ruled in
favor of Glorious and remanded the case to GTEB for further proceedings. The motion for reconsideration of AIFC was subsequently denied.
Hence, this petition.

Issue:
1. W/N the previous GTEB decision constituted res judicata to the instant case on the ground that the former decision was a final judgment on
the merits. – NO
2. W/N Glorious was accorded due process in relation to the 1984 GTEB decision. – NO

Held:
The petitioner contends that in entertaining the appeal of private respondent Glorious, the Office of the President “had unwittingly made itself
a tool in a cunning move to resurrect a decision which had become final and executory more than three years earlier. The petitioner asseverates
resolution dismissing G.R. No. 67180 was res judicata on the matter.

The Supreme Court said that one of the requirements for a judgment to be a bar to a subsequent case is that the it must be a judgment on the
merits. A judgment is upon the merits when it amounts to a declaration of the law as to the respective rights and duties of the parties, based
upon the ultimate fact or state of facts disclosed by the pleadings and evidence, and upon which the right of recovery depends, irrespective of
formal, technical or dilatory objection or contentions. Certainly, the dismissal of G.R. No. 67180 cannot be categorized as a judgment on the
merits. The action in 1984 did not resolve anything. In fact, when the court heard the parties during the oral arguments, GTEB was not able to
present any showing of mis-declaration if imports. The motion to withdraw te petition arose from the fears of Mr. Nemesio Co that not only
Glorious Sun but his other businesses would be destroyed by the martial law regime. The resolution dismissing G.R. No. 67180 was based
solely on the notice of withdrawal by the private respondent. The dismissal of the petition was clearly based on a technical matter rather than
on the merits of the petition. Hence, it cannot constitute res judicata.

With regards to the second issue, the Petitioner contend that Glorious Sun was not denied due process. Although AIFC admits that the 1984
GTEB decision failed to disclose to Glorious vital evidence used by GTEB in arriving at its conclusion that Glorious was guilty of dollar-salting,
it contends that the subsequent disclosure in 1987, where relevant documents were given to Glorious and that the latter was given an
opportunity to comment thereon, cured the defect. This contention by AIFC, the court holds, is MISLEADING. The SC recognized that the
instant petition involves the 1984 resolution of the GTEB. AIFC cannot use as an excuse the subsequent disclosure of the evidence used by
the GTEB to Glorious in 1987 to justify the 1984 GTEB resolution. The glaring fact is that Glorious was denied due process when GTEB failed
to disclose evidence used by it in rendering a resolution against Glorious. Moreover, the documents disclosed to Glorious by GTEB in 1987
enhanced the charge that the former was denied due process.

Attention was also brought to the Puno affidavit, wherein Puno, the Chairman of the Investigating Panel created by the Ministry of Trade and
Industry admitted that he was pressured by Minister Ongpin to look for ways and means to remove the quotas from Glorious. AIFC claims that
it is an inconsequential matter in that the GTEB Board did not give credence to it and also, none of the members of the committee would agree
that there was any pressure or instruction from Minister Ongpin.

The Supreme Court said that the fact that the other members would not agree that there was pressure from Ongpin does not mean that Puno
was not telling the truth. Mr. Puno stated that he was pressured. He did not state that the members of the investigating panel were pressured.
Mr. Puno was the Chairman of the Investigating Panel. Hence, it is plausible that in view of his position he was the one pressured by Minister
Ongpin. There is every reason to suspect that even before Glorious Sun was investigated, a decision to strip it of its quotas and to award them
to friends of their administration had already been made.

The Supreme Court also held that although factual findings of administrative agencies are generally accorded respect, such factual findings
may be disregarded if they are not supported by evidence; where the findings are initiated by fraud, imposition or collusion; where the
procedures which lead to the factual findings are irregular; when palpable errors are committed; or when grave abuse of discretion arbitrariness
or capriciousness is manifest.

Contrary to the petitioners posture, the record clearly manifests that in cancelling the export quotas of the private respondent GTEB violated
the private respondent’s constitutional right to due process. Before the cancellation in 1984, Glorious had been enjoying export quotas granted
to it since 1977. In effect the private respondent’s export quota allocation which initially was a privilege evolved into some form of property right
which should not be removed from it arbitrarily and without due process only to hurriedly confer it on another.

The motion for reconsideration was GRANTED. The instant petition is DISMISSED.

[G.R. No. 45193. April 6, 1939.]

EMILIE ELMIRA RENEE BOUDARD, RAYMOND ANTONIN BOUDARD, GINETTE ROSE ADELAIDE BOUDARD and MONIQUE VICTOIRE
BOUDARD, Plaintiffs-Appellants, v. STEWART EDDIE TAIT, Defendant-Appellee.

Plaintiffs appeal from a judgment of the Court of First Instance of Manila dismissing the case instituted by them, thereby overruling their
complaint, and sentencing them to pay the costs. They now contend in their brief that:jgc:chanrobles.com.ph

"I. The lower court erred in not admitting Exhibits D, E, F and H to M-1 of plaintiffs.
"II. The lower court erred in declaring that it was indispensable for the defendant to be served with summons in Hanoi.
"III. The lower court erred in declaring that service by publication, with personal notice by the French Consul in Manila, was not sufficient.
"IV. The lower court erred in declaring that the Court of Hanoi had no jurisdiction over the person of the defendant.
"V. The lower court erred in dismissing this case, instead of sentencing the defendant to pay to the plaintiffs the amounts claimed in the
complaint as adjudged by the Court of Hanoi; and

"VI. The lower court erred in denying the motion for new trial on the ground that the decision is contrary to the law and the evidence."cralaw
virtua1aw library

Briefly stated, the pertinent facts of the case, that we glean from the records, are as follows: The appellant Emilie Elmira Renee Boudard, in
her capacity as widow of Marie Theodore Jerome Boudard and as guardian of her coappellants, her children born during her marriage with the
deceased, obtained a judgment in their favor from the civil division of the Court of First Instance of Hanoi, French Indo-China, on June 27,
1934, for the sum of 40,000 piastras, equivalent, according to the rate of exchange at the time of the rendition of the judgment, to P56,905.77,
Philippine currency, plus interest the amount or rate of which is not given. The judgment was rendered against Stewart Eddie Tait who had
been declared in default for his failure to appear at the trial before said court.

Appellants’ action, by virtue of which they obtained the foregoing judgment, was based on the fact that Marie Theodore Jerome Boudard, who
was an employee of Stewart Eddie Tait, was killed in Hanoi by other employees of said Tait, although "outside of the fulfillment of a duty",
according to the English translation of a certified copy of the decision in French, presented by the appellants. The dismissal of appellants’
complaint by the lower court was based principally on the lack of jurisdiction of the Court of Hanoi to render the judgment in question, for the
execution of which this action was instituted in this jurisdiction. The lack of jurisdiction was discovered in the decision itself of the Court of Hanoi
which states that the appellee was not a resident of, nor had a known domicile in, that country.

The evidence adduced at the trial conclusively proves that neither the appellee nor his agent or employees were ever in Hanoi, French Indo-
China; and that the deceased Marie Theodore Jerome Boudard had never, at any time, been his employee. The appellee’s first intimation of
his having been sued and sentenced to pay a huge sum by the civil division of the Court of First Instance of Hanoi was when he was served
with summons in the present case.

Passing now to the consideration on the errors assigned by the appellants, we must say that it was really unnecessary for the lower court to
admit Exhibits D, E, F and H to M-1, nor can these exhibits be admitted as evidence, for, as to the first point, the appellants failed to show that
the proceedings against the appellee in the Court of Hanoi were in accordance with the laws of France then in force;-and as to the second
point, it appears that said documents are not of the nature mentioned in sections 304 and 305 of Act No. 190. They are not copies of the judicial
record of the proceedings against the appellee in the Court of Hanoi, duly certified by the Proper authorities there, whose signatures should be
authenticated by the Consul or some consular agent of the United States in said country. The appellants argue that the papers are the original
documents and that the Honorable French Consul in the Philippines has confirmed this fact. Such argument is not sufficient to authorize a
deviation from a rule established and sanctioned by law. To comply with the rule, the best evidence of foreign judicial proceedings is a certified
copy of the same with all the formalities required in said sections 304 and 305 for only thus can one be absolutely sure of t he authenticity of
the record. On the other hand, said exhibits or documents, if admitted, would only corroborate and strengthen the evidence of the appellee
which in itself is convincing, and the conclusion of the lower court that the appellee is not liable for the amount to which he was sentenced, as
alleged for he was not du]v tried or even summoned in conformity with the law. It is said that the French law regarding summons, according to
its English translation presented by the appellants, is of the following tenor:jgc:chanrobles.com.ph

"SEC. 69 (par. 8). Those who have no known residence in France, in the place of their present residence: if the place is unknown, the writ shall
be posted at the main door of the hall of the court where the complaint has been filed; a second copy shall be given to the Attorney-General of
the Republic who shall visae the original." But then, Exhibits E, E-1, F and F-1 show that the summons alleged to have been addressed to the
appellee, was delivered in Manila on September 18, 1933, to J. M. Shotwell, a representative or agent of Churchill & Tait Inc., which is an entity
entirely different from the appellee.

Moreover, the evidence of record shows that the appellee was not in Hanoi during the time mentioned in the complaint of the appellants, nor
were his employees or representatives. The rule in matters of this nature is that judicial proceedings in a foreign country, regarding payment of
money, are only effective against a party if summons is duly served on him within such foreign country before the proceedings.

"The fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain a money judgment, must be based upon personal
service within the state which renders the judgment. (Pennoyer v. Neff, 95 U. S., 714; 24 Law. ed., 565; Twining v. New Jersey, 211 U. S., 78;
29 S. Ct., 14; 53 Law. ed., 97; Continental National Bank of Boston v. Thurber, 143 N. Y., 648; 37 N. E., 828.)

"The process of a court of one state cannot run into another and summon a party there domiciled to respond to proceedings against him. (Hess
v. Pawloski, 274 U. S., 352, 355; 47 S. Ct., 632, 633 [71 Law. ed., 109].) Notice sent outside the state to a nonresident is unavailing to give
jurisdiction in an action against him personally for money recovery. (Pennoyer v. Neff, 95 U. S., 714 [24 Law. ed., 565].) There must be actual
service within the State of notice upon him or upon some one authorized to accept service for him. (Goldey v. Morning News, 156 U. S., 518
[15 S. Ct., 559; 39 Law. ed., 517].) A personal judgment rendered against a nonresident, who has neither been served with process nor
appeared in the suit, is without validity. (McDonald v. Mabee, 243 U. S., 90 [37 S. Ct. . 343; 61 Law. ed., 608; L. R. A. 1917F, 458].) The mere
transaction of business in a state by nonresident natural persons does not imply consent to be bound by the process of its courts. (Flexner v.
Farson, 2’18 U. S., 289 [39 S. Ct., 97; 63 Law. ed., 250] .)" (Cited in Skandinaviska Granit Aktiebolaget v. Weiss, 234 N. Y. S., 202, 206, 207.)

"The process of a court has no extraterritorial effect, and no jurisdiction is acquired over the person of the defendant by serving him beyond
the boundaries of the state. Nor has a judgment of a court of a foreign country against a resident of this country having no property in such
foreign country based on process served here, any effect here against either the defendant personally or his property situated here." (5 R. C.
L., 912.)

"Process issuing from the courts of one state or country cannot run into another, and although a nonresident defendant may have been
personally served with such process in the state or country of his domicile, it will not give such jurisdiction as to authorize a personal judgment
against him." (23 Cyc., 688.)

It can not be said that the decision rendered by the Court of Hanoi should be conclusive to such an extent that it cannot be contested, for it
merely constitutes, from the viewpoint of our laws, prima facie evidence of the justness of appellants’ claim, and, as such, naturally admits
proof to the contrary. This is precisely the provision of section 311 of Act No. 190, as interpreted in the case of Ingenohl v. Walter E. Olsen &
Co. (47 Phil., 189):jgc:chanrobles.com.ph

"The effect of a judgment of any other tribunal of a foreign country, having jurisdiction to pronounce the judgment, is as
follows:jgc:chanrobles.com.ph

"1. In case of a judgment against a specific thing, the judgment is conclusive upon the title to the thing;

"2. 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." (Sec. 311 of Act No. 190.)

In view of the foregoing considerations, our conclusion is that we find no merit in the errors assigned to the lower court and the appealed
judgment is in accordance with the law. Wherefore, the judgment is affirmed, with costs against the appellants. So ordered.

Northwest Orient Airlines, Inc. V. CA (1995)

FACTS:
■ Northwest Airlines (Northwest) and C.F. Sharp & Company (C.F.), through its Japan branch, entered into an International
Passenger Sales Agency Agreement, whereby the Northwest authorized the C.F. to sell its air transportation tickets
■ March 25, 1980: Unable to remit the proceeds of the ticket sales, Northwest sued C.F. in Tokyo, Japan, for collection of the
unremitted proceeds of the ticket sales, with claim for damages
■ April 11, 1980: writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan
■ The attempt to serve the summons was unsuccessful because Mr. Dinozo was in Manila and would be back on April
24, 1980
■ April 24, 1980: Mr. Dinozo returned to C.F. Office to serve the summons but he refused to receive claiming that he no longer an
employee
■ After the 2 attempts of service were unsuccessful, Supreme Court of Japan sent the summons together with the other legal
documents to the Ministry of Foreign Affairs of Japan> Japanese Embassy in Manila>Ministry (now Department) of Foreign
Affairs of the Philippines>Executive Judge of the Court of First Instance (now Regional Trial Court) of Manila who ordered Deputy
Sheriff Rolando Balingit>C.F. Main Office
 ■ August 28, 1980: C.F. received from Deputy Sheriff Rolando Balingit the writ of summons but failed to appear at the scheduled
hearing.
■ January 29, 1981: Tokyo Court rendered judgment ordering the C.F. to pay 83,158,195 Yen and damages for delay at the rate
of 6% per annum from August 28, 1980 up to and until payment is completed
■ March 24, 1981: C.F. received from Deputy Sheriff Balingit copy of the judgment. C.F. did not appeal so it became final and
executory
■ May 20, 1983: Northwest filed a suit for enforcement of the judgment a RTC
■ July 16, 1983: C.F. averred that the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction
having been rendered without due and proper notice and/or with collusion or fraud and/or upon a clear mistake of law and fact.
The foreign judgment in the Japanese Court sought in this action is null and void for want of jurisdiction over the person of the
defendant considering that this is an action in personam. The process of the Court in Japan sent to the Philippines which is
outside Japanese jurisdiction cannot confer jurisdiction over the defendant in the case before the Japanese Court of the case at
bar
■ CA sustained RTC: Court agrees that if the C.F. in a foreign court is a resident in the court of that foreign court such court could
acquire jurisdiction over the person of C.F. but it must be served in the territorial jurisdiction of the foreign court
ISSUE: W/N the Japanese Court has jurisdiction over C.F.

HELD: YES. instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it denied NORTHWEST's claims for
attorneys fees, litigation expenses, and exemplary damages
■ Consequently, the party attacking (C.F.) a foreign judgment has the burden of overcoming the presumption of its validity
■ Accordingly, the presumption of validity and regularity of the service of summons and the decision thereafter rendered by the
Japanese court must stand.
■ Applying it, the Japanese law on the matter is presumed to be similar with the Philippine law on service of summons on a private
foreign corporation doing business in the Philippines. Section 14, Rule 14 of the Rules of Court provides that if the defendant is
a foreign corporation doing business in the Philippines, service may be made:
■ (1) on its resident agent designated in accordance with law for that purpose, or,
■ (2) if there is no such resident agent, on the government official designated by law to that effect; or
■ (3) on any of its officers or agents within the Philippines.
■ If the foreign corporation has designated an agent to receive summons, the designation is exclusive, and service of
summons is without force and gives the court no jurisdiction unless made upon him.
■ Where the corporation has no such agent, service shall be made on the government official designated by law, to wit:
■ (a) the Insurance Commissioner in the case of a foreign insurance company
■ (b) the Superintendent of Banks, in the case of a foreign banking corporation
■ (c) the Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do
business in the Philippines. Whenever service of process is so made, the government office or official served
shall transmit by mail a copy of the summons or other legal proccess to the corporation at its home or principal
office. The sending of such copy is a necessary part of the service.
■ The service on the proper government official under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the
Corporation Code
■ Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed to do business here, to the status
of domestic corporations
■ We think it would be entirely out of line with this policy should we make a discrimination against a foreign corporation, lik e the
petitioner, and subject its property to the harsh writ of seizure by attachment when it has complied not only with every requirement
of law made specially of foreign corporations, but in addition with every requirement of law made of domestic corporations
■ In as much as SHARP was admittedly doing business in Japan through its four duly registered branches at the time the collection
suit against it was filed, then in the light of the processual presumption, SHARP may be deemed a resident of Japan, and, as
such, was amenable to the jurisdiction of the courts therein and may be deemed to have assented to the said courts' lawful
methods of serving process.
■ Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual
presumption but also because of the presumption of regularity of performance of official duty.

JAIME PELEJO and BELEN C. ZABALLERO, petitioners,

vs.
THE HONORABLE COURT OF APPEALS, PATERNO C. ZABALLERO and AURORA GONZALES, respondents.
Domingo M. Ballon and Ernesto U. Plantilla for petitioners.
Reynaldo Aralar for private respondent.

RELOVA, J.:
In Our decision which was promulgated on August 31, 1982, We stated the following:
On July 3, 1979, herein petitioners filed Civil Case No. 124771 for Annulment of Deed, Title, Reconveyance and Damages. According to
petitioners, respondents Paterno C. Zaballero and his wife Aurora Gonzales Zaballero approached them sometime in 1974 for assistance.
They borrowed the title TCT No. T-49125, covering the property so that they could have a collateral for a loan from the Monte de Piedad Bank,
the proceeds of which would finance respondents' rice mill business in San Juan, Batangas. To accommodate herein private respondents, who
are the brother and sister-in-law, respectively, of petitioner Belen C. Zaballero, a simulated Deed of Absolute Sale with Assumption of Mortgage
was executed in favor of Mr. and Mrs. Paterno C. Zaballero. The Zaballeros took the Deed of Sale to mean what it stated and had the title
transferred to their names. As a consequence, TCT No. T-49125 was cancelled and TCT No. 130117 was issued in the names of the Zaballeros.
In their answer to the complaint, respondents denied the allegations of simulated sale and claimed that the Deed of Absolute Sale was properly
executed in good faith before a notary public of the Philippine National Bank: that the P400,000.00 stated in the deed was paid to herein
petitioners while the P200,000.00 PNB Mortgage was eventually paid to the bank; that the P600,000.00 was a fair price for the properties in
1974 when the conveyance was executed; that petitioner Belen Zaballero, an older sister of respondent Paterno Zaballero, now regrets having
sold the property for only P600,000.00 because a relative volunteered to help her negotiate a one-million peso loan on the property as collateral.

On August 22, 1980, the trial court issued an order dismissing the complaint but allowing the petitioners to file an amended complaint within
ten (10) days. The original complaint was dismissed upon motion of the private respondents on the ground that it did not state a cause of action,
and assuming there was a cause of action, it was already barred by statute. The petitioners filed their amended complaint after September 18,
1980 which was beyond the ten-day period.

On October 14, 1980, the trial judge denied the admission of the amended complaint in an order which reads:

Acting on the Motion to Admit Amended Complaint as well as the opposition thereto, and it appearing that said amendment is studiedly not in
accordance with what the parties have agreed upon in open Court, which is inimitably for collection of a Sum of Money, the same should be,
as it is hereby, DENIED.

This order dismissing the complaint in Civil Case No. 124771 was not appealed or otherwise elevated to an appellate court. Instead, petitioners
filed a new complaint for "Annulment of Deed, Title, Reconveyance and Damages" which was docketed as Civil Case No. 140996. and assigned
to another branch of the Manila Court of First Instance.

On September 9, 1981, Judge Fidel P. Purisima of Branch XX dismissed the new case (Civil Case No. 140996) on the ground that the dismissal
of Civil Case No. 124771 and the subsequent denial of the Motion to Admit Complaint amounted to res judicata barring the new complaint.

The dismissal of the second case (Civil Case No. 140996) was appealed to the Court of Appeals where it is still pending resolution.

In the meantime, respondents Paterno Zaballero and Aurora Gonzales Zaballero filed Civil Case No. 144435, captioned 'Accion
Reinvendicatoria or Publiciana, with Collection and Damages, but the same was dismissed by Court of First Instance Judge Maximo A. Maceren
on February 4, 1982 on the ground that it was actually an action for illegal detainer which is not within the jurisdiction of his court.
The dismissal of said Civil Case No. 144435 was appealed by private respondents to this Court where it is still pending action.

Thereafter, herein private respondents filed a motion for the issuance of a Writ of Possession in Civil Case No. 124771. On March 30, 1982,
Judge Abelardo Dayrit of the Court of First Instance granted the motion and issued a Writ of Possession 'ordering the Sheriff of the City of
Manila to place in possession the herein defendants Paterno C. Zaballero and Aurora Gonzales Zaballero, in the premises at 541 M. V. delos
Santos Street, Sampaloc, Manila, and eject therefrom the herein plaintiffs Jaime Pelejo and Belen Zaballero Pelejo, and all persons g under
said plaintiffs.

As a consequence, on April 6, 1982, the possession of the property in question was turned over to herein respondents when the City Sheriff of
Manila enforced the writ of possession, dated March 30, 1982, issued in Civil Case No. 124771.

In Our decision, dated August 31, 1982, We found merit in instant petition because the order of the lower court dated August 22, 1980, was a
dismissal of the complaint (Civil Case No. 124771) on the grounds alleged in defendants' motion to dismiss. However, on grounds of justice
and equity, We set aside this decision based on the following grounds:

1. The writ of possession has already been implemented;

2. In the complaint filed by herein petitioners (Civil Case No. 124771 for Annulment of Deed, Title, Reconveyance and Damages) they
admitted that subject property is now covered by TCT No. T-130117 in the names of private respondents, spouses Paterno C. Zaballero and
Aurora Gonzales. Likewise, the Court of Appeals, in its decision, dated April 29, 1982, stated that "the lot and buildings are now covered by
TCT #130117 in the names of the respondents."

3. A mandatory injunction is granted only on a showing that (a) the invasion of the right is material and substantial; (b) the right of
complainant is clear and unmistakable; and (c) there is an urgent and permanent necessity for the writ to prevent serious damages. Petitioners'
right over the property is not clear. As stated above, the title to the property in question is already in the names of private respondents who,
therefore, have better right to the possession thereof.
4. The procedural error incurred by private respondents in not asking for affirmative relief in the dispositive portion of the lower court's
order dismissing the case and which led to the dispute surrounding the propriety of the issuance of the writ of possession is a mere technicality
which would not prevail over considerations of substantial justice. There is no point in prolonging the litigation when private respondents are
the owners of the property and therefore are entitled to its possession. It would be an injustice to allow petitioners to continue holding subject
property.

ACCORDINGLY, We reconsider and set aside Our decision dated August 31, 1982 and hereby DISMISS instant petition.
SO ORDERED.

Racoma v. Camarines, 368 SCRA 447 (2001)

BELLOSILLO, J.:
A kindred fellow seeks our intervention to collect what he claims is justly due him.

Respondent Camarines Norte Water District (CNWD) engaged the legal services of Atty. Winston C. Racoma to prevent the takeover of its
operation, facilities and properties by its creditor the Local Water Utilities Administration (LWUA). This problem was precipitated by allegations
of default and unfair unilateral increase in interest rate on the part of CNWD in the payment of its loans from LWUA. As LWUA eventually took
over the CNWD and installed an Interim Board of Directors and General Manager on 4 October 1991, Atty. Racoma filed a complaint for specific
performance and damages with prayer for preliminary injunction against LWUA, docketed as Civil Case No. 6030. 1The following day petitioner
obtained for CNWD a temporary restraining order preventing LWUA from further managing and operating his client's services.

On 17 October 1991 the Board of Directors of CNWD passed three (3) resolutions revising the original contract of legal services of petitioner
Racoma. In this regard, CNWD paid him P20,000.00 on 17 October 1991 and P15,000.00 on 23 October 1991.

After the expiration of the temporary restraining order, LWUA (purportedly in behalf of CNWD) moved to discharge Atty. Racoma as CNWD's
counsel. This was followed by LWUA's motion to dismiss Civil Case No. 6030. Thereafter, the trial court issued an order requiring petitioner to
file a compliance manifestation to both motions and denied the application for preliminary injunction. 4 As instructed, petitioner filed the
compliance manifestation.5 On 17 January 1992 the trial court issued a Resolution-Order granting the motion for the discharge of petitioner as
counsel for CNWD and ordered the payment of his legal fees "in accordance with the 'quantum meruit' rule in relation [to] his up-to-date
professional services rendered under the contract of legal services dated September 1, 1991, particularly paragraph IV, as his last pleading
submitted."

Petitioner appealed the Resolution-Order to the Court of Appeals which however dismissed the appeal on 8 January 1993 due to his failure to
file the corresponding brief.7 On 3 February 1993 the dismissal became final and executory, and entry of judgment was made on 19 April 1993. 8
On 30 March 1998 petitioner moved for execution of the Resolution-Order,9 which the trial court granted on 4 June 1998.10 However, on 9 June
1998 the trial court amended its order instructing payment to petitioner of P250,000.00 as his legal fees. 11 On 19 June 1998 CNWD moved for
reconsideration of the amended order.12 But the trial court denied the motion, explaining that the amount of P250,000.00 was the result of the
reference of the Resolution-Order to the "contract of legal services dated September 1, 1991, particularly paragraph IV, as his last pleading
submitted," which was inclusive of the P100,000.00 filing charge for the memorandum that petitioner had filed. 13 On 6 July 1998 however the
trial court held in abeyance the issuance of a writ of execution due to the pendency of a petition for certiorari with application for injunction
and/or restraining order before the Court of Appeals.

On 8 September 1998 CNWD filed a petition with the Court of Appeals to review the Order of Execution and the alleged Writ of Execution
issued by the trial court in Civil Case No. 6030. On 5 April 2000 the appellate court nullified these processes on the ground that the dispositive
portion of the Resolution-Order that was to be executed did not indicate the exact amount of legal fees payable to petitioner. 15 On 21 June
2000 petitioner's motion for reconsideration was denied. Hence this petition seeking to overturn these resolutions.
Petitioner argues that the Resolution-Order is not fatally vague. He says that this order in fact resolved in his favor his entitlement to legal fees
and the amount thereof on the basis of the provisions of the contract for legal services of 1 September 1991, particularly paragraph IV of the
last pleading filed. In arriving at the precise amount of legal fees due him, petitioner invokes the power of the court to amend and control its
processes as well as the general supervisory control of the tribunal which rendered the decision over the process of execution. He avers in
addition that no writ of execution was ever issued by the trial court in Civil Case No. 6030.

We rule for petitioner. As a matter of record, the trial court did not issue any writ of execution that the Court of Appeals thought the court a quo
had. This is clear from the Order of the trial court of 6 July 1998 holding in abeyance the execution of the Resolution-Order. It is also a matter
of record that the dispositive portion of the Resolution-Order unequivocally set the parameters for the determination of the precise amount of
petitioner's legal fees. For purposes of a strait-jacketed enforcement of a writ of execution, this specification of parameters is enough.

As early as Locsin v. Paredes16 we ruled that the trial judge may clarify omissions and set forth specificities that can be ascertained from the
allegation of the complaint, the prayer thereof, the evidence and the conclusions of fact and law. 17 With more reason should this rule apply in
the instant case considering that the dispositive portion of the Resolution-Order itself carries the standard by which to determine petitioner's
legal fees, and the failure to specify the amount so collectible is a mere omission that the court may correct even at finality of judgment by
supplemental or amended order.

Seavan Carrier, Inc. v. GTI Sportswear Corp.19 is instructive. This case similarly involves a judgment that failed to state the actual amount to
be satisfied. We then ruled: "Hence, the trial court, pursuant to its supervisory control over the execution of the judgment, should have ordered
a hearing on the motion to determine the actual amount to be recovered by the private respondent, for the full satisfaction of the judgment."20
So must we rule now. Verily, there is no reason to abandon this ruling and in the process unjustly deprive petitioner of the fruits of his efforts
as it were and the wherewithal to maintain an honorable profession. To stress all that the trial court has to do in the present case is to compute
the amount owing him following the guidelines set in the Resolution-Order itself.

But we have to correct the elementary computation of legal fees done by the trial court. In the 19 June 1998 Order, the court a quo assessed
P250,000.00 in petitioner's favor. Said the trial court: "x x x the Resolution-Order have (sic) even noted the last pleading submitted which is
paragraph IV of the contract which is for P100,000.00 for filing and submission of memorandum and it would follow that the previous actual
services rendered were for a successful application for a preliminary injunction order for P80,000.00, paragraph III, filing of the case in court
for P40,000.00, paragraph II, and signing of the agreement for P30,000.00, paragraph I, or a total of P250,000.00 is what the Resolution-Order
want to be the payment in quantum meruit."

While in truth the last pleading filed by petitioner in connection with Civil Case No. 6030 was the compliance manifestation as narrated above,22
we will nonetheless assume that the trial court consulted all relevant circumstances and acted in compliance with law 23 when it ruled that the
memorandum was indeed the last pleading filed by him. It must be stressed that under Sec. 24, Rule 138, of the Rules of Court the trial court
has wide discretion to ordain the payment of reasonable legal fees of a lawyer.

But the award of P80,000.00 in connection with his application for preliminary injunction must be reduced by fifty percent (50%) or P40,000.00
it appearing that hearings were conducted on the application although no preliminary injunction was issued in the end.24 Moreover, he had
been previously paid P20,000.00 and P15,000.00. The total legal fees pegged at P250,000.00 must accordingly be whittled down. Recomputing
what is due him: P30,000.00 upon signing of the contract, plus P40,000.00 upon filing of the case in court, plus P100,000.00 upon filing of the
memoranda plus P40,000.00 for the application for preliminary injunction less P35,000.00 previously paid, results in a collectible amount of
P175,000.00 only. The kind spirit in petitioner should see this amount as reasonable compensation for his legal services in behalf of CNWD.
WHEREFORE, the petition is GRANTED although the professional legal fee of petitioner Atty. Winston C. Racoma is reduced to One Hundred
Seventy-Five Thousand Pesos (P175,000.00). The 9 June 1998 Amended Order of Execution of the 17 January 1992 Resolution-Order is
accordingly MODIFIED.

G.R. No. L-3693 July 29, 1950

MARGARET QUERUBIN, recurrente-apelante,

vs.
SILVESTRE QUERUBIN, recurrido-apelado.

Manuel A. Argel en representacion del recurrente y apelante.

Maximino V. Bello en representacion del recurrido y apelado.

PABLO, J.:

Silvestre Querubin es de Caoayan, Ilocos Sur, de padres filipinos. En 1926 se marcho a los Estados Unidos con el objeto de estudiar pero
con el proposito de volver despues a su pais natal. Obtuvo el titulo de "Master of Arts and Sciences" en la "University of Southern California,"
institucion domiciliada en los Angeles, California, en donde el recurrido empezo a vivir desde 1934.

En 20 de octubre de 1943, Silvestre Querubin contrajo matrimonio con la recurrente, Margaret Querubin, en Albuquerque, New Mexico.
Como fruto de este matrimonio nacio Querubina Querubin, quien, al tiempo de la vista de la causa en el Juzgado de primera instancia de
Ilocos Sur, tenia cuatro años de edad poco mas o menos.

La recurrente entablo en 1948 una demanda de divorcio contra el recurrido, fundada en "crueldad mental." En 7 de febrero de 1948 el
divorcio fue concedido al marido en virtud de una contrademanda presentada por el y fundada en la infidelidad de su esposa. En 5 de abril
de 1949, y a peticion del demandado y contrademandante, (recurrido enesta actuacion de habeas corpus) el Juzgado superior de Los
Angeles dicto una orden interlocutoria disponiendo lo siguiente:

It is therefore ordered, adjudged and decreed that the interlocutory judgment of divorce hereinbefore entered on February 27, 1948,
in Book 1891, page 319, be and the same is hereby modified in the following particulars in connection with the custody of the minor
child of the parties only:

(1) The care, custody and control of the minor child of the parties, Querubina Querubin, is hereby awarded to defendant and cross-
complainants;

(2) Said child is to be maintained in a neutral home, subject to the right of reasonable visitation on the part of both parties to this
action;

(3) Each party shall have the right to take said child away from said neutral home but plaintiff and cross-defendant is restrained from
taking said child to her place of residence;

(4) Each party is restrained from molesting the other, or in any way interfering with the other's right of reasonable visitation of said
child;

(5) Each party is restrained from removing the child from the State of California without first securing the permission of the court;
said parties are further restrained from keeping the child out of the County of Los Angeles for more than one day without first
securing the consent of the court.

El recurrido salio de San Francisco en 7 de noviembre de 1949, arribando a Manila en 25 del mismo mes. En 27 de susodicho mes llego a
Caoayan, Ilocos Sur, donde vive actualmente, llevandose consigo a la niña Querubina, a quien trajo a Filipinas porque, en su calidad de
padre, queria evitar que llegase a conocimiento de ella la conducta indecorosa de su propia madre. El recurrido queria que su hija fuera
educada en un ambiente de elevada moralidad.

A peticion de la recurrente Margaret, el Juzgado superior de los Angeles, California, en 30 de noviembre de 1949 modifico su orden de 5 de
abril de 1949, disponiendo lo siguiente:

Under interlocutory decree of March 7, 1949, the child, a girl now 3 1/2 years old, was granted to deft husband, but the child was to
be kept in a neutral home; both parties were given reasonable visitation and both were restrained from removing the child out of the
state. Deft has taken the child with him to the Philippine Islands. At time of trial custody was apparently denied pft because she was
then living with another man. She is now married to this man and they have a well equipped home. Ptf appears to be a devoted
mother. She has one child, the issue of her present marriage, and is also caring for a child that was abandoned by certain friends of
hers. Ptf's husband is regularly and permanently employed. Witnesses testified in behalf of the ptf in reference to her motherly
qualities and the condition of her home. She visited the child in question sufficiently when the child was in the neutral home and
brought her toys and other articles. Service of the order to show cause was made on deft's attorneys of record.
 The interlocutory decree is modified so as to provide that custody of the child shall be awarded to ptf and deft shall have the right of
reasonable visitation. Deft shall pay ptf for the support of the child $30 each month on the 1st day thereof, commencing Jan. 1950.

En el dia de la vista de esta causa de habeas corpus en Ilocos Sur, el recurrido declaro que nunca intento cambiar su ciudadania; que
cuando vino al pais tenia unos P2,000 de ahorro; que tres semanas despues de su arribo recibio oferta para enseñar con sueldo P250
mensual en el colegio establecido por el Dr. Sobrepeña en Villasis, Pangasinan; que nunca se le ha privado de patria potestad por sentencia
judicial, ni declarado ausente de Filipinas, ni sujeto a interdiccion civil. Segun el juzgado a quo, el recurrido es de irreprochable conducta.

En 10 de febrero de 1950 la recurrente Margaret Querubin, por medio de su abogado, presento en el Juzgado de primera instancia de Ilocos
Sur una solicitud de habeas corpus reclamando la custodia de su hija Querubina, alegando como fundamento el decreto interlocutorio del
juzgado de California que concedio a ella dicha custodia. Despues de la vista correspondiente, el Juzgado a quo, en 28 de febrero de 1950
denego la solicitud. La recurrente acude en apelacion ante este Tribunal.

La recurrente sostiene que bajo el articulo 48 de la Regla 39, el decreto Exhibit A-1 del Juzgado de los Angeles, California, debe cumplirse
en Filipinas. Su parte dispositiva dice textualmente:

The interlocutory decree is modified so as to the provide that custody of the child shall be awarded to ptf and deft shall have the
right to reasonable visitation. Deft shall pay ptf for the support of the child $30 each month on the 1st day thereof, commencing Jan.
1950.

Un decreto interlocutorio sobre la custodia de un menor no es una decision final. Por su naturaleza no es firme. Esta sujeto a cambios como
cambian las circunstancias. En el primer decreto se dio al padre la custodia de la menor. A peticion del padre, se dicto el decreto de 5 de
abril prohibiendo a la madre que llavase a la menos a su casa porque estaba otra vez en relaciones adulterinas con otro hombre. Cuando ya
no estaba el recurrido en Los Angeles, porque ya habian venido a Filipinas, se enmendo la ultima orden y se dispuso que la custodia
estuviese encomendada a la recurrente, pagando a ella el recurrido $30 al mes para la manutencion de la menor. La pension no es fija y se
aumenta o disminuye como aumentan o disminuyen las necesidades del pensionista o como exijan las condiciones economicasdel que la
da.

Porque el decreto interlocutorio, Exhibit A-1, no constituye decision final, no cabe pedir su cumplimiento en Filipinas. En los mismos Estados
Unidos no puede pedirse el cumplimiento de una orden interlocutoria en el juzgado de otro estado.

The rule is of common knowledge that the definitive judgment of a court of another state between the same parties on the same
cause of action, on the merits of the case is conclusive, but it must be a definitive judgment on the merits only. Where the judgment
is merely interlocutory, the determination of the question by the court which rendered it did not settle and adjudge finally the rights of
the parties." (National Park Bank vs.Old Colony Trust Co., 186 N.Y.S., 717.)

As already stated the Minnesota decree, to the extent that it is final and not subject to modification, is entitled to the protection of the
full faith and credit clause of the federal Constitution and must be enforced in this state. If, however, a part of the Minnesota decree
in not final, but is subject to modification by the court which rendered it, then neither the United States Constitution nor the principle
of comity compels the courts of this state to enforce that part of the decree; for no court other than the one granting the original
decree could undertake to administer relief without bringing about a conflict of authority. (Levine vs. Levine, 187 Pac., 609.)

A judgment rendered by a competent court, having jurisdiction in one state, is conclusive on the merits in the courts of every other
state, when made the basis of an action and the merits cannot be reinvestigated. Our own Supreme Court so holds.
Cook vs. Thornhill, 13 Tex. 293, 65 Am. Dec. 63. But before such a judgment rendered in one state is entitled to acceptance, in the
courts of another state, as conclusive on the merits, it must be a final judgment and not merely an interlocutory decree. Freeman on
Judgment, Sec. 575; Baugh vs.Baugh, 4 Bibb (7 Ky.) 556; Brinkley vs. Brinkley, 50 N.Y. 184, 10 Am. Rep. 460; Griggs, vs. Becker,
87 Wis. 313, 58 N.W. 396. (Walker vs. Garland et al., 235 S.W., 1078.)

En general, un decreto de divorcio encomendando la custodia de un hijo del matrimonio a uno de los conyuges se respeta por los juzgados
de otros estados "at the time and under the circumstances of its rendition but that such a decree has no controlling effects in another state as
to facts or conditions arising subsequently to the date of the decree; and the courts of the latter state may, in proper proceedings, award the
custody otherwise upon proof of matters subsequent to the decree which justify the change in the interest of the child." (20 A.L.R., 815.)

En el caso presente las circunstancias han cambiado. Querubina ya no esta en los Angeles sino en Caoayan, Ilocos Sur. Esta bajo el
cuidado de su padre. Hay una distancia enorme desde Los Angeles y el presente domicilio de la menor y el costo del pasaje hasta aquella
ciudad seria muy elevado, y aun es posible que este fuera del alcance de la recurrente. No hay pruebas de que ella esta en condiciones de
pagar los gastos de viaje de la menor y del que la acompañe. Ella no es un paquete de cigarrillos que se puede enviar por correo a Los
Angeles.

No consta que las circunstancias que se daban en noviembre de 1949 en Los Angeles, prevalecian en el mismo estado hasta el momento
en que se vio la causa en el Juzgado de primera instancia de Ilocos Sur. Tampoco hay pruebas de que la recurrente dispone de suficientes
fondos para costear el viaje de la niña Querubina desde Caoayan, Ilocos Sur, hasta Los Angeles, California, y para responder de su
alimentacion, cuidado y educacion, y constando en autos que el padre, mas que nadie, esta interesado en el cuidado y educacion de su hija,
y que tiene ahorros de mas de P2,000 depositados en un banco, creemos que el Juzgado a quo no erro al denegar la solicitud.
El Juzgado no podia, sin prueba satisfactoria, disponer sin remordimiento de conciencia la entrega de la niña al abogado de la recurrente: es
su obligacion velar por la seguridad y bienestar de ella. No se trata solo de resolver el derecho preferente del padre y de la madre en la
custodia. La vital y trascendental cuestion del porvenir de la niña es superior a toda consideracion. El Estado vela por sus ciudadanos. El
articulo 171 del Codigo Civil dispone que "Los Tribunales podran privar a los padres de la patria potestad, o suspender el ejercicio de esta, si
trataren a sus hijos con dureza excesiva, o si les dieren ordenes, consejos o ejemplos corrutores." En Cortes contra Castillo y otra (41 Jur.
Fil., 495), este Tribunal declaro que no erro el Juzgado de primera instancia al nombrar a la abuela, como tutora de dos menores, en vez de
su madre que fue condenada por adulterio.

El articulo 154 del Codigo Civil dispone que "El padre, y en su defecto la madre, tienen potestad sobre sus hijos legitimos no emancipados."
Con todo, si se hace indebido ejercicio de esta facultad, los tribunales, como ya hemos dicho, pueden privarie de ella y encomendar el
cuidadano del menor a otras instituciones, como dispone el articulo 6 de la Regla 100, que es reproduccion del articulo 771 de la Ley No.
190. En el asunto de Lozano contra Martinez y De Vega (36 Jur. Fil., 1040), en que el primero, en un recurso de habeas corpus, reclamaba
contra su esposa la custodia de su hijo menor de 10 años, este Tribunal, en apelacion, declaro que el juzgado a quo no abuso de la
discrecion conferida a el por el articulo 771 del Codigo de procedimiento civil al denegar la solicitud. Esta interpretacion del articulo en
cuanto al debido ejercicio de la discrecion de un Juzgado de primera instancia ha sido reafirmada en el asunto de Pelayo contra Lavin (40
Jur. Fil., 529).

En la solicitud presentada, no hay siquiera alegacion de que el juzgado a quo haya abusado de su discrecion. Este Tribunal no debe revocar
su actuacion.

En la vista de la causa en el Juzgado de Primera Instancia de Ilocos Sur, el recurrido declaro que habia traido su hija a Filipinas porque
queria evitar que ella tuviera conocimiento de la conducta impropia y de la infidelidad cometida por la madre, impidiendo que la viese
convivir con el hombre que habia ofendido a su padre. El recurrido dijo que queria que su hija se criase en un ambiente de elevada moral, y
que no se sancionara indirectamente la infidelidad de la esposa. Bajo la Ley de Divorcio No. 2710, el conyuge culpable no tiene derecho a la
custodia de los hijos menores. La legislacion vigente, las buenas costumbres y los interesesdel orden publico aconsejan que la niña debe
estar fuera del cuidado de una madre que ha violado el juramento de fidelidad a su marido. Creemos que este Tribunal no debe hacer
cumplir un decreto dictado por un tribunal extranjero, que contraviene nuestras leyes y los sanos principios de moralidad que informan
nuestra estructura social sobre relaciones familiares.

En el asunto de Manuela Barretto Gonzales contra Augusto Gonzales (58 Jur. Fil., 72), se pidio por la demandante que el divorcio obtenido
por el demandado en Reno, Nevada, en 28 de noviembre de 1927, fuera confirmado y ratificado por el Juzgado de primera instancia de
Manila. Este juzgado dicto sentencia a tenor de la peticion. Teniendo en cuenta el articulo 9 del Codigo civil que dispone que "Las leyes
relativas a los derechos y deberes de familia, o al estado, condicion y capacidad legal de las personas, obligan a los espanoles (filipinos)
aunque residan en pais extranjero" y el articulo 11 del mismo codigo que dice en parte qye ". . . las leyes prohibitivas concernientes a las
personas, sus actos o sus bienes, y las que tienen por objeto el orden publico y las buenas costumbres, no quedaran sin efecto por leyes o
sentencias dictadas, ni por disposiciones o convenciones acordades en pais extranjero," este Tribunal, en apelacion, declaro: "Los litigantes,
mediante convenio mutuo, no pueden obligar a los tribunales a que aprueben sus propios actos, ni que permitan que las relaciones
personales de los ciudadanos de estas Islas queden afectadas por decretos de paises extranjeros en una forma que nuestro Gobierno cree
que es contraria al orden publico y a la recta moral," y revoco la decision del juzgado inferior.

Las sentencias de tribunales extranjeros no pueden properse en vigor en Filipinas si son contrarias a la leyes, costumbres y orden publico.
Si dichas decisiones, por la simple teoria de reciprocidad, cortesia judicial y urbanidad internacional son base suficiente para que nuestros
tribunales decidan a tenor de las mismas, entonces nuestros juzgados estarian en la pobre tesitura de tener que dictar sentencias contrarias
a nuestras leyes, costumbres y orden publico. Esto es absurdo.

En Ingenohl contra Olsen & Co. (47 Jur. Fil., 199), se discutio el alcanse de la cortesia internacional. El articulo 311 del Codigo de
Procedimiento Civil que es hoy el articulo 48, Regla 39, fue la base de la accion presentada por Ingenohl. Pidio en su demanda que el
Juzgado de primera instancia de Manila dictase sentencia de acuerdo con la dictada por el Tribunal Supremo de Hongkong. Despues de la
vista correspondiente, el juzgado dicto sentencia a favor del demandante con intereses legales y costas. En apelacion, se alego que el
juzgado inferior erro al no declarar que la decision y sentencia del Tribunal Supremo de Hongkong se dicto y registro como resultado de un
error manifiesto de hecho y de derecho. Este Tribunal declaro que "Es principio bien sentado que, a falta de un tratado o ley, y en virtud de
la cortesia y del derecho internacional, una sentencia dictada por un tribunal de jurisdiccion competente de un pais extranjero, en el que las
partes han comparecido y discutido un asunto en el fondo, sera reconocido y puesta en vigor en cualquier otro pais extranjero." Pero
teniendo en cuenta el articulo 311 del Codigo de Procedimiento Civil que dispone que "la sentencia puede ser rechazada mediante prueba
de falta de competencia, o de haber sido dictada sin la previa notificacion a la parte, o que hubo connivencia, fraude o error manifiesto de
derecho o de hecho," concluyo: "En virtud de esa Ley cuando una persona trata de hacer cumplir una sentencia extranjera, el demandado
tiene derecho a ejercitar cualquier defensa de esas, y si se llegara a demostrar que existe propiamente alguna de ellas, destruira los efectos
de la sentencia." Revoco la decision del juzgado inferior y declaro y fallo que "la sentencia dictada por el Tribunal de Hongkong, contra la
demandada, constituyo un error manifesto de hecho y de derecho, y, por tal razon, no debe exigirse su cumplimiento en las Islas Filipinas."

Si se concede la solicitud, la menor estaria bajo el cuidadode su madre que fued declarada judicialmente culpable de infidelidad conyugal;
viviria bajo un techo juntamente con el hombre que deshonro a su madre y ofendio a su padre; jugaria y creceria con el fruto del amor
adulterino de su madre; llegaria a la pubertad con la idea de que una mujer que fue infiel a su marido tiene derecho a custodiar a su hija. En
semejante medio ambiente no puede criarse a una niña de una manera adecuada: si llegara a saber durante su adolescencia que su padre
ha sido traicionado por su madre con el hombre con quien vive, esa niña viviria bajo una impresion de inferioridad moral de incalculables
consecuencias, y por ello nunca seria feliz; y si, bajo la influencia de su madre, llegara a creer que la infidelidad de una esposa es solo un
incidente tan pasajero como cambiar de tocado, la niña iria por el camino de la perdicion. Y la educacion moral que puede darle su padrasto
dificilmente puede ser mejor.
Si se deniega la solicitud, la niña viviria con su padre con el beneficio de un cuidado paternal exclusivo, y no con la dividida atencion de una
madre que tiene que atender a su esposo, a sus dos hijas y a una tercera niña, la protegida. Para el bienestar de la menor Querubina, que
es lo que mas importa en el caso presente, su custodia por el padre debe considerarse preferente.

En los mismos Estados Unidos, el punto cardinal que tienen en cuenta los juzgados, no es la reclamacion de las partes o la fuerza del
decreto interlocutorio, sino el bienestar del menor.

A consideration of all the facts and circumstances leads to the conclusion that comity does not require the courts of this state,
regardless of the well-being of the child, to lend their aid to the enforcement of the Iowa decree by returning Winifred to the custody
of her grandmother. A child is not a chattel to which title and the right of possession may be secured by the decree of any court. If
the decree had been rendered by a domestic court of competent jurisdiction, it would not have conclusively established the right to
the custody of the child. In a contest between rival claimants, this court would have been free, notwithstanding the decree, to award
the custody solely with an eye to the child's welfare. (State ex rel. Aldridge vs. Aldridge, 204 N.W. 324.)

On habeas corpus by the mother to obtain possession from the father of two children aged four and six years, whose custody she
alleged had been awarded her in divorce proceedings in another state, it appeared that the mother was without property, and had
no means of support save her personal earnings of $15 per month, was in poor health, and lived with her mother, in immoral
surroundings, and that the father was an industrious and sober man, earnings $100 per month. Held, that the welfare of the children
was the only thing to be considered, and a judgment awarding their custody to the mother should be reversed.
(Kentzler vs. Kentzler, 28 Pac., 370.)

La recurrente, como ultimo recurso, invoca la comity of nations. La reciprocidad, la cortesia entre naciones no es absoluta. Rige cuando hay
tratado y hay igualdad de legislacion. Se adopta la doctrina de reciprocidad cuando el tribunal extranjero tiene jurisdiccion para conocer de la
causa, las partes han comparecido y discutido el asunto en el fondo. Algunas veces se concede como privilegio pero no como estricto
derecho. La cortesia pedida no ha sido reconocida por este Tribunal cuando declaro que los derechos y deberes de familia, estado,
condicion y capacidad legal de las personas se rigen por las leyes de Filipinas y no por las de America (Gonzales contra Gonzales, supra) y
no dio validez a la decision del Tribunal Supremo de Hongkong porque era erronea en sus conclusiones de hecho y de derecho
(Ingenohl contra Olsen y Co., supra).

La reciprocidad entre los estados de la Union Americana no es absoluta. No es regla inquebrantable. Los varios casos citados mas arriba lo
demuestran. He ahi otro caso:

On the question of comity, this court said in the habeas corpus case of In re Stockman, 71 Mich. 180, 38 N.W. 876:

"Comity cannot be considered in a case like this, when the future welfare of the child is the vital question in the case. The good of
the child is superior to all other considerations. It is the polar star to guide to the conclusion in all cases of infants, whether the
question is raised upon a writ of habeas corpus or in a court of chancery." (Ex parte Leu, 215 N.W., 384.)

Ya hemos visto que la orden interlocutoria cediendo la custodia de la menor a la recurrente esta en pugna con las disposiciones expresas de
la legislacion vigente en Filipinas. En el primer decreto y en el enmendatorio se encomendo la custodia de la menor al padre y se prohibio,
en la orden enmendada, a la madre llevar a la menor a su casa porque estaba otra vez en relaciones ilegales con otro hombre. Pero el
ultimo decreto enmendatorio, contrario al sentido de justicia, a la ley, y a las buenas costumbres, encomendo la custodia de la menor a la
que fue esposa infiel porque ya estaba casada con quien cometio adulterio. Y bajo la doctrina de la comity of nations, la recurrente contiende
que debe cumplirse en Filipinas ese decreto. Opinamos que por las varias razones arriba expuestas, la pretension es insostenible.

Se confirma la sentencia apelada. La recurrente pagara las costas.

Ozaeta, Bengzon, Montemayor and Reyes, MM., estan conformes.

Tuason, J., concurs in the result.

PASTOR B. TENCHAVEZ vs. VICENTA F. ESCAÑO, ET AL

RESOLUTION
REYES, J.B.L., J.:
Not satisfied with the decision of this Court, promulgated on 29 November 1965, in the above-entitled case, plaintiff-appellant Pastor B.
Tenchavez and defendant-appellee Vicenta F. Escaño, respectively, move for its reconsideration; in addition, Russell Leo Moran, whom said
defendant married in the United States, has filed, upon leave previously granted, a memorandum in intervention.

Movant Tenchavez poses the novel theory that Mamerto and Mina Escaño are undeserving of an award for damages because they are guilty
of contributory negligence in failing to take up proper and timely measures to dissuade their daughter Vicenta from leaving her husband
Tenchavez obtaining a foreign divorce and marrying another man (Moran). This theory cannot be considered: first, because this was not raised
in the court below; second, there is no evidence to support it; third, it contradicts plaintiff's previous theory of alienation of affections in that
contributory negligence involves an omission to perform an act while alienation of affection involves the performance of a positive act.

The prayer of appellant Tenchavez in his motion for reconsideration to increase the damages against Vicenta (P25,000 for damages and
attorney's fees were awarded to Tenchavez in the decision) should, likewise, be denied, all factors and circumstances in the case having been
duly considered in the main decision.
In seeking a reexamination of the decision, defendant-appellee Vicenta Escaño, in turn, urges a comparison between the two marriages,
stating, in plainer terms, that the Tenchavez-Escano marriage was no more than a ceremony, and a faulty one at that, while the Moran-Escaño
marriage fits the concept of a marriage as a social institution because publicly contracted, recognized by both civil and ecclesiastical authorities,
and blessed by three children. She concludes that, since the second marriage is the better one, it deserves the laws recognition and protection
over the other. This is a dangerous proposition: it legalizes a continuing polygamy by permitting a spouse to just drop at pleasure her consort
for another in as many jurisdictions as would grant divorce on the excuse that the new marriage is better than the previous one; and, instead
of fitting the concept of marriage as a social institution, the proposition altogether does away with the social aspects of marriage in favor of its
being a matter of private contract and personal adventure.
The said appellee claims that state recognition should be accorded the Church's disavowal of her marriage with Tenchavez. On this point, our
main decision limited itself to the statement, "On 10 September 1954, Vicenta sought papal dispensation of her marriage (Exh. P-2)", without
stating that papal dispensation was actually granted, the reason being that Vicenta's claim that dispensation was granted was not indubitable,
and her counsel, during the trial in the lower court, did not make good his promise to submit the document evidencing the papal dispensation;
in fact, no such document appears on record. The Church's disavowal of the marriage, not being sufficiently established, it cannot be
considered. Vicenta's belated appeal to Canon law, after she had sought and failed to obtain annulment in the civil courts, and after she had
flaunted its principles by obtaining absolute divorce, does not, and can not, sound convincing. Particularly when account is taken of the
circumstances that she obtained the Nevada divorce in 1950 and only sought ecclesiastical release from her marriage to Tenchavez in 1954.

The award of moral damages against Vicenta Escaño is assailed on the ground that her refusal to perform her wifely duties, her denial of
consortium and desertion of her husband are not included in the enumeration of cases where moral damages may lie. The argument is
untenable. The acts of Vicenta (up to and including her divorce, for grounds not countenanced by our law, which was hers at the time) constitute
a wilful infliction of injury upon plaintiff's feelings in a manner "contrary to morals, good customs or public policy" (Civ. Code, Art. 21) for which
Article 2219 (10) authorizes an award of moral damages. Neither the case of Ventanilla vs. Centeno, L-14333, 28 January 1961 (which was a
suit filed by a client against his lawyer for failure to perfect an appeal on time), nor the case of Malonzo vs. Galang, L-13851, 27 July 1960
(wherein the precise ruling was that moral damages may not be recovered for a clearly unfounded civil action or proceeding), now invoked by
the said defendant-appellee, is in point.

It is also argued that, by the award of moral damages, an additional effect of legal separation has been added to Article 106. Appellee obviously
mistakes our grant of damages as an effect of legal separation. It was plain in the decision that the damages attached to her wrongful acts
under the codal article (Article 2176) expressly cited.

Appellee-movant commits a similar mistake by citing Arroyo vs. Arroyo, 42 Phil. 54, and Ramirez-Cuaderno vs. Cuaderno, L-20043, 28
November 1964, to support her argument that moral damages did not attach to her failure to render consortium because the sanction therefor
is spontaneous mutual affection, and not any legal mandate or court order. The Arroyo case did rule that "it is not within the province of courts
of this country to attempt to compel one of the spouses to cohabit with, and render conjugal rights to, the other", but it referred to physically
coercive means, the Court declaring that —
We are disinclined to sanction the doctrine that an order, enforcible by process of contempt, may be entered to compel prostitution of the purely
personal right of consortism. (Cas cit., p. 60) (Emphasis supplied)
But economic sanctions are not held in our law to be incompatible with the respect accorded to individual liberty in civil cases. Thus, a consort
who unjustifiably deserts the conjugal abode can be denied support (Art. 178, Civil Code of the Phil.). And where the wealth of the deserting
spouse renders this remedy illusory, there is no cogent reason why the court may not award damage as it may in cases of breach of other
obligations to do intuitu personae even if in private relations physical coercion be barred under the old maxim "Nemo potest precise cogi and
factum".

For analogous reasons, the arguments advanced against the award of attorney's fees must be rejected as devoid of merit.

Contrary to intervenor Moran's contention, the decision did not impair appellee's constitutional liberty of abode and freedom of locomotion, as,
in fact, Vicenta Escaño did exercise these rights, and even abused them by stating in her application for a passport that she was "single", the
better to facilitate her flight from the wrongs she had committed against her husband. The right of a citizen to transfer to a foreign country and
seek divorce in a diverse forum is one thing, and the recognition to be accorded to the divorce decree thus obtained is quite another; and the
two should not be confused.

Intervenor reiterates that recognition of Vicenta's divorce in Nevada is a more enlightened view. The argument should be addressed in the
legislature. As the case presently stands, the public policy of this forum is clearly adverse to such recognition, as was extensively discussed in
the decision. The principle is well-established, in private international law, that foreign decrees cannot be enforced or recognized if they
contravene public policy (Nussbaum, Principles of Private International Law, p. 232).

It is thoroughly established as a broad general rule that foreign law or rights based therein will not be given effect or enforced if opposed to the
settled public policy of the forum. (15 C.J.S. 853)

SEC. 6. Limitations. — In the recognition and enforcement of foreign laws the Courts are slow to overrule the positive law of the forum, and
they will never give effect to a foreign law where to do so would prejudice the state's own rights or the rights of its citizens or where the
enforcement of the foreign law would contravene the positive policy of the law of the forum whether or not that policy is reflected in statutory
enactments. (11 Am. Jur., 300-301).

A judgment affecting the status of persons, such as a decree confirming or dissolving a marriage, is recognized as valid in every country, unless
contrary to the policy of its own law. Cottington's Case, 2 Swan St. 326, note; Roach vs. Garvan, I Ves St. 157; Harvey vs. Farnie, LR 8 App.
Cas. 43; Cheely vs. Clayton, 110 U.S. 701 [28:298]. (Hilton vs. Guyot 159 U.S. 113, 167; 40 L. Ed. 95, 110) (Emphasis supplied)

It is, therefore, error for the intervenor to ask that "private international law — rather than Philippine civil law — should decide the instant case",
as if the two branches of the law contradicted one another.
In a consolidated paper (intervenor's rejoinder and appellee Vicenta Escaño's supplemental motion for reconsideration), the issue is raised that
"the Supreme Court cannot reverse the decision of the lower court dismissing the complaint nor sentence Vicenta Escaño to pay damages,
without resolving the question of lack of jurisdiction over her person".

A resolution by the Supreme Court of the issue of jurisdiction over the person of appellee Vicenta Escaño, and which was disallowed by the
court below, was unnecessary because the matter was not properly brought to us for resolution, either on appeal or by special remedy which
could have been availed of by the appellee when the lower court, on 1 June 1957, overruled her challenge to its jurisdiction. Neither was the
alleged error of the lower court put in issue in her brief as appellee, as it was incumbent upon her to do (Relativo vs. Castro, 76 Phil. 563;
Lucero vs. De Guzman, 45 Phil. 852). Not affecting the jurisdiction over the subject matter, the court properly ignored the point (Rev. Rule 51,
section 7).

SEC. 7. Questions that may be decided. — No error which does not affect the jurisdiction over the subject matter will be considered unless
stated in the assignment of errors and properly argued in the brief, save as the court, at its option, may notice plain errors not specified, and
also clerical errors.

At any rate,
... .When, however, the action against the non-resident defendant affects the personal status of the plaintiff, as, for instance, an action for
separation or for annulment of marriage, ..., Philippine courts may validly try and decide the case, because, then, they have jurisdiction over
the res, and in that event their jurisdiction over the person of the non-resident defendant is not essential. The res is the personal status of the
plaintiff domiciled in the Philippines, ... . (1 Moran 411, 1963 Ed., citing Mabanag vs. Gallemore, 81 Phil. 254)

The award of damages, in the present case, was merely incidental to the petition for legal separation. For all these reasons, and because she
filed a counterclaim against plaintiff (Rec. App. pp. 205-206), Vicenta should be deemed to have withdrawn the objection to the lower court's
jurisdiction over her person, even though she had stated in the counterclaim that she was not waiving her special defense of lack of jurisdiction.

It is urged that the actions for legal separation and for quasi-delict have prescribed: the first, because it was not filed within one year from and
after the date on which the plaintiff became cognizant of the cause; and, the second, because it was not filed within four years since the
Tenchavez-Escaño marriage in 1948.
The argument on both points is untenable.

The action for legal separation was filed on 31 May 1956. Although in a letter, under date of 10 December 1954, the Department of Foreign
Affairs informed plaintiff Tenchavez that "According to information, she (appellee) secured a decree of divorce on October 21, 1950 ... and
married an American citizen, Russel Leo Moran, on September 13, 1954", there is no satisfactory and convincing evidence as to the time when
plaintiff Tenchavez, received the said letter; nor was she duty-bound to act immediately upon hearsay information. Since prescription is an
affirmative defense, the burden lay on the defendant to clearly prove it, and her proof on it was inadequate.

On the argument about the action on tort having prescribed, the basis thereof is erroneous: the marriage was not the cause of appellee's
wrongful conduct. Her denial of cohabitation, refusal to render consortium and desertion of her husband started right after their wedding but
such wrongs have continued ever since. She never stopped her wrongdoings to her husband, so that the period of limitation has never been
completed.

Finally, we see no point in discussing the question of appellee Escaño's criminal intent, since nothing in the main decision was designed or
intended to prejudge or rule on the criminal aspect of the case, if any, or any of its constituent elements. It is to be noted that in this civil case
only a preponderance of evidence is required, and not proof beyond reasonable doubt. While much could be said as to the circumstances
surrounding the divorce of the appellee, we prefer to abstain from so doing in order not to influence in any way the criminal case, should any
be instituted.

For the reasons above cited, all motions for reconsideration are hereby denied.

G.R. No. L-45193 April 5, 1939

EMILIE ELMIRA RENEE BOUDARD, RAYMOND ANTONIN BOUDARD, GINETTE ROSE ADELAIDE BOUDARD and MONIQUE VICTOIRE
BOUDARD, plaintiffs-appellants, vs. STEWART EDDIE TAIT,

Plaintiffs appeal from a judgment of the Court of First Instance of Manila dismissing the case instituted by them, thereby overruling their
complaint, and sentencing them to pay the costs. They now contend in their brief that:
I. The lower court erred in not admitting Exhibits D, E, F and H to M-1 of plaintiffs.
II. The lower court erred in declaring that it was indispensable for the defendant to be served with summons in Hanoi.
III. The lower court erred in declaring that service by publication, with personal notice by the French Consul in Manila, was not sufficient.
IV. The lower court erred in declaring that the Court of Hanoi had no jurisdiction over the person of the defendant.
V. The lower court erred in dismissing this case, instead of sentencing the defendant to pay to the plaintiffs the amounts claimed in the complaint
as adjudged by the Court of Hanoi; and
VI. The lower court erred in denying the motion for new trial on the ground that the decision is contrary to the law and the evidence.

Briefly stated, the pertinent facts of the case, that we glean from the records, are as follows: The appellant Emilie Elmira Renee Boudard, in
her capacity as widow of Marie Theodore Jerome Boudard and as guardian of her coappellants, her children born during her marriage with the
deceased, obtained a judgment in their favor from the civil division of the Court of First Instance of Hanoi, French Indo-China, on June 27,
1934, for the sum of 40,000piastras, equivalent, according to the rate of exchange at the time of the rendition of the judgment, to P56,905.77,
Philippine currency, plus interest the amount or rate of which is not given. The judgment was rendered against Stewart Eddie Tait who had
been declared in default for his failure to appear at the trial before said court.

Appellants' action, by virtue of which they obtained the foregoing judgment, was based on the fact that Marie Theodore Jerome Boudard, who
was an employee of Stewart Eddie Tait, was killed in Hanoi by other employees of said Tait, although "outside of the fulfillment of a duty",
according to the English translation of a certified copy of the decision in French, presented by the appellants. The dismissa l of appellants'
complaint by the lower court was based principally on the lack of jurisdiction of the Court of Hanoi to render the judgment in question, for the
execution of which this action was instituted in this jurisdiction. The lack of jurisdiction was discovered in the decision itself of the Court of Hanoi
which states that the appellee was not a resident of, nor had a known domicile in, that country.

The evidence adduced at the trial conclusively proves that neither the appellee nor his agent or employees were ever in Hanoi, French Indo-
China; and that the deceased Marie Theodore Jerome Boudard had never, at any time, been his employee. The appellee's first intimation of
his having been sued and sentenced to pay a huge sum by the civil division of the Court of First Instance of Hanoi was when he was served
with summons in the present case.

Passing now to the consideration of the errors assigned by the appellants, we must say that it was really unnecessary for the lower court to
admit Exhibit D, E, F and H to M-1, nor can these exhibits be admitted as evidence, for, as to the first point, the appellants failed to show that
the proceedings against the appellee in the Court of Hanoi were in accordance with the laws of France then in force; and as to the second
point, it appears that said documents are not of the nature mentioned in sections 304 and 305 of Act No. 190. They are not copies of the judicial
record of the proceedings against the appellee in the Court of Hanoi, duly certified by the proper authorities there, whose signatures should be
authenticated by the Consul or some consular agent of the United States in said country. The appellants argue that the papers are the original
documents and that the Honorable French Consul in the Philippines had confirmed this fact. Such argument is not sufficient to authorize a
deviation from a rule established and sanctioned by law. To comply with the rule, the best evidence of foreign judicial proceedings is a certified
copy of the same with all the formalities required in said sections 304 and 305 for only thus can one be absolutely sure of the authenticity of
the record. On the other hand said exhibits or documents, if admitted, would only corroborate and strengthen the evidence of the appellee
which in itself is convincing, and the conclusion of the lower court that the appellee is not liable for the amount to which he was sentenced, as
alleged, for he was not duly tried or even summoned in conformity with the law. It is said that the French law regarding summons, according to
its English translation presented by the appellants, is of the following tenor:
"SEC. 69 (par. 8). Those who have no known residence in France, in the place of their present residence: if the place is unknown, the writ shall
be posted at the main door of the hall of the court where the complaint has been filed; a second copy shall be given to the Attorney-General of
the Republic who shall visae the original." But then, Exhibits E, E-1, F and F-1 show that the summons alleged to have been addressed to the
appellee, was delivered in Manila on September 18, 1933, to J. M. Shotwell, a representative or agent of Churchill & Tait Inc., which is an entity
entirely different from the appellee.

Moreover, the evidence of record shows that the appellee was not in Hanoi during the time mentioned in the complaint of the appellants, nor
were his employees or representatives. The rule in matters of this nature is that judicial proceedings in a foreign country, regarding payment of
money, are only effective against a party if summons is duly served on him within such foreign country before the proceedings.

The fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain a money judgment, must be based upon personal
service within the state which renders the judgment. (Pennoyer vs. Neff, 95 U. S., 714; 24 Law. ed., 565; Twining vs. New Jersy, 211 U. S., 78;
29 S. Ct., 14; 53 Law. ed., 97; Continental National Bank of Boston vs. Thurber, 143 N. Y., 648; 37 N. E., 828.)

The process of a court of one state cannot run into another and summon a party there domiciled to respond to proceedings against him. (Hess
vs. Pawloski, 274 U. S., 352, 355; 47 S. Ct., 632, 633 [71 Law. ed., 109].) Notice sent outside the state to a nonresident is unavailing to give
jurisdiction in an action against him personally for money recovery. (Pennoyer vs. Neff, 95 U. S., 741 [24 Law. ed., 565].) There must be actual
service within the State of notice upon him or upon some one authorized to accept service for him. (Goldey vs. Morning News, 156 U. S., 518
[15 S. Ct., 559; 39 Law. ed., 517].) A personal judgment rendered against a nonresident, who has neither been served with process nor
appeared in the suit, is without validity. (McDonald vs. Mabee, 243 U. S., 90 [37 S. Ct., 343; 61 Law, ed., 608; L. R. A. 1917F, 485].) The mere
transaction of business in a state by nonresident natural persons does not imply consent to be bound by the process of its courts. (Flexner vs.
Farson, 248 U. S., 289 [39 S. Ct., 97; 63 Law. ed., 250].)" (Cited in Skandinaviska Granit Aktiebolaget vs. Weiss, 234 N. Y. S., 202, 206, 207.)

The process of a court has no extraterritorial effect, and no jurisdiction is acquired over the person of the defendant by serving him beyond the
boundaries of the state. Nor has a judgment of a court of a foreign country against a resident of his country having no property in such foreign
country based on process served here, any effect here against either the defendant personally or his property situated here. (5 R. C. L., 912.)

Process issuing from the courts of one state or country cannot run into another, and although a nonresident defendant may have been
personally served with such process in the state or country of his domicile, it will not give such jurisdiction as to authorize a personal judgment
against him. (23 Cyc., 688.)

It can not be said that the decision rendered by the Court of Hanoi should be conclusive to such an extent that it cannot be contested, for it
merely constitutes, from the viewpoint of our laws, prima facie evidence of the justness of appellants' claim, and, as such, naturally admits
proof to the contrary. This is precisely the provision of section 311 of Act No. 190, as interpreted in the case of Ingenohl vs. Walter E. Olsen &
Co. (47 Phil., 189):0

The effect of a judgment of any other tribunal of a foreign country, having jurisdiction to pronounce the judgment, is as follows:
1. In case of a judgment against a specific thing, the judgment is conclusive upon the title to the thing;
2. 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. (Sec. 311 of Act No. 190.)

In view of the foregoing considerations, our conclusion is that we find no merit in the errors assigned to the lower court and the appealed
judgment is in accordance with the law.

Wherefore, the judgment is affirmed, with costs against the appellants. So ordered.
SOORAJMULL NAGARMULL v. BINALBAGAN-ISABELA SUGAR COMPANY

Topic: Foreign Judgment

Ponente: J. Dizon
Date: 28 May 1970

DOCTRINE: Under the provisions of Section 50 of Rule 39, Rules of Court, a judgment for a sum of money rendered by a foreign court is
presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. But when suit for its enforcement
is brought in a Philippine court, said 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.

QUICK FACTS: Soorajmull Nagarmull (seller) entered into a contract with Binalbagan-Isabela Sugar Company (buyer). The seller was to ship
Hessian bags from India to the Philippines for the benefit of the buyer. However, Nagarmull incurred delay in the shipment of goods. After the
supposed date of delivery, the Indian government imposed higher export taxes on jute products, affecting Nagarmull’s shipment. Nagarmull
then demanded from Binalbagan-Isabela a higher price for the goods, which demand was refused. The Indian courts ruled in favor of
Nagarmull. The Philippine Supreme Court found a clear mistake of law and denied enforcement of the judgment in the country.

FACTS:

In May 1949, Soorajmull Nagarmull, a foreign corporation based in Calcutta, agreed to sell to Binalbagan-Isabela Sugar Company, a domestic
corporation, Hessian bags, shipment of which was to be made in equal installments of 425 bales per month for July, August, September, and
October 1949. However, Nagarmull was unable to deliver the complete amount of goods, resulting in a balance of 154 bales for July, August,
and September. Binalbagan-Isabela then sent a letter dated 29 September asking for the shipment of the shortage.

On 01 October 1949, the Indian Government increased the export duty of jute bags from 80 to 350 rupees per ton, prompting Nagarmull to ask
Binalbagan-Isabela to increase its letter of credit to cover the goods that were due and will be shipped that same month. Binalbagan agreed.
Subsequently, Nagarmull asked Binalbagan-Isabela to further increase its letter of credit to cover the 154 bales from July, August, and
September, which it will also be shipping. This time, Binalbagan-Isabela refused.

In February 1951, Nagarmull put forth its claim against Binalbagan-Isabela with the Bengal Chamber of Commerce, Tribunal for Arbitration in
Calcutta. There, Binalbagan-Isabela, represented by the Philippine Consulate General, contended that if the goods had been delivered by
Nagarmull on time pursuant to the terms of the contract, there would have been no increased export taxes to pay because said increased taxes
became effective only in October 1949. The Bengal Chamber of Commerce ruled in favor of Nagarmull and ordered Binalbagan-Isabela to pay
the sum of 18,562 rupees and 8 annas. The Calcutta High Court affirmed the award.

Nagarmull sought to enforce its claim by filing an action with the Court of First Instance of Manila, which ruled in its favor. The case was elevated
to the Court of Appeals, which forwarded the same to the Supreme Court as it involved only questions of law.

ISSUE: Whether or not the decision of the Bengal Chamber of Commerce, Tribunal of Arbitration , as affirmed by the Calcutta High Court, is
enforceable in the Philippines.

HELD: No, it is not enforceable.

RATIO:

It is true that under the provisions of Section 50 of Rule 39, Rules of Court, a judgment for a sum of money rendered by a foreign court "is
presumptive evidence of a right as between the parties and their successors in interest by a subsequent title", but when suit for its enforcement
is brought in a Philippine court, said 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".

There is no question at all that Nagarmull was guilty of a breach of contract when it failed to deliver 154 Hessian bales which, according to the
contract entered into with Binalbagan-Isabela, should have been delivered to the latter in the months of July, August and September. Had these
154 bales been delivered in accordance with the contract, the increase in the export taxes due upon them would not have been imposed
because said increased export tax became effective only on 01 October 1949.

To avoid its liability for the aforesaid increase in the export tax, Nagarmull claims that Binalbagan-Isabela should be held liable on the strength
of its letter of 29 September 1949 asking Nagarmull to ship the shortage. This argument is unavailing. When Binalbagan-Isabela demanded
that Nagarmull deliver the shortage of 154 bales, it did nothing more than to demand that to which it was entitled as a matter of right.

Strait Times v. CA, 294 SCRA 714 (1998)

Viloria v. Administration of Veterans Affair, 101 Phil 762 (1957)

In Special Proceedings No. 163 of the Court of First Instance of La Union, appellee Severo Viloria was, on October 27, 1948, appointed
guardian of the person and estate of the minor Roy Reginald Lelina, beneficiary of arrears pay, insurance, and other benefits from the U.S
Veterans Administration due to the death of his late father Constancio Lelina, supposedly a member of the U.S. Armed Forces during the
war. On March 31, 1950, the court authorized the guardian to withdraw from the estate of his ward the sum of not to exceed P30 a month for
the boy's support and other expenditures.

On March 20, 1952, the U. S. Veterans Administration filed a motion in the guardianship proceedings, alleging receipt of certain letters from
its central office in Washington, D. C., to the effect that the minor's deceased father had not guerrilla or other service in the armed forces of
the United States, and that consequently, his heir was not entitled to the payment of gratuitous National Service Life Insurance, and prayed
that the guardian be ordered to stop further payment of monthly allowances to the minor. The court found the motion well-founded and
granted the same. A few years later, on February 15, 1955, the Administrator of Veterans Affairs again filed a motion in the same
guardianship proceedings for a refund to the U.S. Veterans Administration of the sum of $2,879.68, the balance of gratuitous insurance
benefits allegedly wrongfully paid to the minor Roy Reginald Lelina, which was still on deposit with the Philippine National Bank, San
Fernando, La Union Branch. Upon opposition of the guardian, who submitted evidence of the service record of the minor's deceased father
duly recognized by both the Philippine and U.S. Armies, the motion for refund was denied. Then on April 27, 1955, the guardian moved to be
allowed to withdraw P4,000 from the minor's estate to meet the minor's needs. This motion was opposed by the Administrator of Veterans
Affairs, arguing that the minors right to National Service Life Insurance benefits is governed exclusively by the S.S. Code Annotated, which
provides (Tit. 38, section 808) that decisions of the Administrator —

shall be final and conclusive on all questions of law or fact and no other official of the United States, except a judge or judges of the
Unite States courts, shall have jurisdiction to review any such decisions;

In the same motion, the Administrator prayed for the setting aside of the court's order denying the refund of the money in the hands of the
minor's guardian, on the ground of "lack of jurisdiction".

Acting on the pending motions of the guardian and the Administrator, the lower court held:

If the legal provisions alleged in the petition of the veterans Administration is correct, and should be taken into account, this Court
may not have the right to order the return of the amount of $2,879.68 at present credited as funds of the minor, and deposited in the
name of the said minor with the Philippine National Bank. Precisely, the issue now pending in this guardianship proceeding is
whether or not, the father of the minor deceased Constancio Lelina, has a valid military service to justify the payment to him or to his
heirs of the National Life Services Insurance benefits.

The minor Reginald Lelina through his guardian and his counsel claims that his father had rendered services as shown by certain
papers submitted in this case to support that claim. As a matter of fact, the said minor was granted and paid those benefits as
shown by the statements of accounts submitted and duly approved by this court up to and including March 31, 1954, in the order of
Judge Primitivo L. Gonzales dated April 22, 1954. On that other hand the Attorneys of the Veterans Administration now claim that
such payment was an error because the deceased Constancio Lelina had no recognized military services or was he a member of
the Commonwealth Army in the service of the Armed Forces of the United States Government. This is, therefore, a matter that
should be determined in an appropriate action filed the complete court. This being the case, until this issue is, finally determined by
the competent court in an appropriate action, the balance of the amount now deposited in the name of the minor through his
guardian could not be disposed by this Court one way or another. In this proceeding, the matter at issue cannot be finally
determined. Hence, this Court believes and so holds, that in the meantime, the status quo should be maintain with respect to funds
now existing and deposited with the Philippine National Bank, La Union Branch in the name of the herein minor. (Rec. on Appeal,
pp. 47-49)

and denied both the guardian's motion to withdraw from the minor's deposits, and the Administrator's position for refund. The Administrator of
Veterans Affairs sought reconsideration of the above order, which was denied; wherefore, it appealed to this Court.

We are of the opinion that the appeal should be rejected. The provisions of the U.S. Code, invoked by the appellant, make the decisions of
the U.S. Veteran Administrator final and conclusive when made on claims properly submitted to him for resolution; but they are not applicable
to the present case, where the Administrator is not acting as a judge but as a litigant. There is a great difference between actions against the
Administrator (which must be filed strictly in accordance with the conditions that are imposed by the Veterans' Act, including the exclusive
review by United States courts), and those actions where the veterans' Administrator seeks a remedy from our courts and submits to their
jurisdiction by filing actions therein. Our attention has not been called to any law or treaty that would make the findings of the Veterans'
Administrator, in actions where he is a party, conclusive on our courts. That in effect, would deprive our tribunals or judicial discretion and
render them mere subordinate instrumentalities of the veterans' Administrator.

In an analogous case, we have ruled:

By filing this action of partition in the court a quo, the Philippine Alien Property Administrator has submitted to its jurisdiction and put
in issue the legality of his vesting order. He can not therefore now dispute this power. (Brownell vs. Bautista, 50 Off. Gaz., 4772.)

From the time the amounts now sought to be recovered where paid to the appellee guardian, for the ward's benefit, the latter became their
lawful possessor and he can not be deprived thereof on the sole allegation of the Veterans' Administrator that the money was erroneously
paid. The burden lies upon him to satisfy the court that the alleged mistake was really committed; and the Philippine courts' determination of
the question is as binding upon the Veterans' Administrator as upon any other litigant.

Concerning the claim itself, we agree with the court below that it was not properly filed in the guardianship proceedings, since the latter are
solely concerned with the ward's care a custody and the proper administration or management of his properties. Conflicts regarding
ownership or title to the property in the hands of the guardian, in his capacity as such, should be litigated in a separate proceeding.

The order of the court below, dated 22 June 1955, is hereby affirmed, with costs against the appellant. So ordered.
 Nicos Industrial v. CA, 201 SCRA 127 (1992)

FACTS:

(1) The order is assailed by the petitioners on the principal ground that it violates the aforementioned constitutional requirement of Article 8
Section 14 of the Constitution. The petitioners claim that it is not a reasoned decision and does not clearly and
distinctly explain how it was reached by the trial court. Petitioners complain that there was no analysis of their testimonial evidence
or of their 21 exhibits, the trial court merely confining itself to the pronouncement that the sheriff's sale was valid and that it had no
jurisdiction over the derivative suit. There was therefore no adequate factual or legal basis for the decision that could justify its review and
affirmance by the Court of Appeals.

(2) January 24, 1980, NICOS Industrial Corporation obtained a loan of P2,000,000.00 from private respondent United Coconut Planters Bank
and to secure payment thereof executed a real estate mortgage on two parcels of land located at Marilao, Bulacan. The mortgage was
foreclosed for the supposed non-payment of the loan, and the sheriff's sale was held on July 11, 1983, without re-publication of the required
notices after the original date for the auction was changed without the knowledge or consent of the mortgagor.
(3) CA decision: We hold that the order appealed from as framed by the court a quo while leaving much to be desired, substantially complies
with the rules.

ISSUE:
Whether or not the trial court’s decision is unconstitutional

HELD:
WHEREFORE, the challenged decision of the Court of Appeals is SET ASIDE for lack of basis. This case is REMANDED to
the Regional Trial Court of Bulacan, Branch 10, for revision, within 30 days from notice, of the Order of June 6, 1986,
conformably to the requirements of Article VIII, Section 14, of the Constitution, subject to the appeal thereof, if desired, in accordance
with law.

RATIO:
(1) The questioned order is an over-simplification of the issues, and violates both the letter and spirit of Article VIII, Section 14, of the
Constitution.
(2) It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an explanation of the
factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is rendered in favor of X and
against Y and just leave it at that without any justification whatsoever for its action. The losing party is entitled to know why he lost, so
he may appeal to a higher court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly and
distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially
prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal.
(3) Brevity is doubtless an admirable trait, but it should not and cannot be substituted for substance. As the ruling on this second ground was
unquestionably a judgment on the merits, the failure to state the factual and legal basis thereof was fatal to the order.
(4) Kilometric decisions without much substance must be
avoided, to be sure, but the other extreme, where substance is also lost in the wish to be brief, is no less
unacceptable either. The ideal decision is that which, with welcome economy of words, arrives at the factual findings reaches
the legal conclusions renders its ruling and having done so ends.

Air France v. Carrascoso, 18 SCRA 155 (1966)

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 plane’s 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 plane’s pantry
where he was approached by a plane purser who told him that he noted in the plane’s 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 Carrascoso’s 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 France’s 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 France’s 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 France’s 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.
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 carrier’s 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 France’s contract with Carrascoso is one attended with public duty. The stress of Carrascoso’s
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.

Yao v. CA, 344 SCRA 202 (2000)

FACTS

George Yao’s legal dilemma commenced when the Philippine Electrical Manufacturing Company (PEMCO) noticed the proliferation
locally of General Electric (GE) lamp starters. As the only local subsidiary of GE-USA, Remandaman was able to purchase from TCC fifty (50)
pieces of fluorescent lamp starters with the GE logo and design. Assessing that these products were counterfeit, PEMCO applied for the
issuance of a search warrant. This was issued by the MeTC, Branch 49, Caloocan City. Eight boxes, each containing 15,630 starters, were
thereafter seized from the TCC warehouse in Caloocan City.

The indictment charged YAO and Roxas of having mutually and in conspiracy sold fluorescent lamp starters which have the General
Electric (GE) logo, design and containers, making them appear as genuine GE fluorescent lamp starters; and inducing the public to believe
them as such.. Both accused pleaded not guilty. The MeTC acquitted Roxas but convicted YAO. In acquitting Roxas, the trial court declared
that the prosecution failed to prove that he was still one of the Board of Directors at the time the goods were seized.

YAO filed a motion for reconsideration, which the MeTC denied. He then appealed to the Regional Trial Court of Caloocan City (RTC).
Judge Adoracion Angeles rendered a one-page Decision which affirmed in toto the MeTC decision.

YAO filed a motion for reconsideration and assailed the decision as violative of Section 2, Rule 20 of the Rules of Court. The RTC
denied the motion for reconsideration as devoid of merit and reiterated that the findings of the trial court are entitled to great weight on appeal
and should not be disturbed on appeal unless for strong and cogent reasons.

YAO appealed to the Court of Appeals by filing a notice of appeal. The Court of Appeals granted YAO an extension of twenty (20)
days to file the Appellant's Brief. However, the Court of Appeals promulgated a Resolution declaring that the decision of RTC has long become
final and executory and ordering the records of the case remanded to said court for the proper execution of judgment.

YAO filed an Urgent Motion to Set Aside Entry of Judgment contending that the resolution did not specifically dismiss the appeal but
the Court of Appeals denied the Urgent Motion to Set Aside the Entry of Judgment for lack of merit.

ISSUES

Whether or not Yao was denied due process?

RULINGS

Yes he was. The decision of the RTC affirming the conviction of YAO transgressed Section 14, Article VIII of the Constitution, which
states:

SECTION 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on
which it is based.

The Court finds that the RTC decision at bar miserably failed to meet them and, therefore, fell short of the constitutional injunction.
The RTC decision achieved nothing and attempted at nothing, not even at a simple summation of facts which could easily be done. The Court
cannot consider or affirm said RTC decision as a memorandum decision because it failed to comply with the measures of validity. It merely
affirmed in toto the MeTC decision without saying more. A decision or resolution, especially one resolving an appeal, should directly meet the
issues for resolution; otherwise, the appeal would be pointless.
 Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is indisputably a paramount component of due
process and fair play. It is likewise demanded by the due process clause of the Constitution. The parties to litigation should be informed of how
it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The losing party is entitled to know
why he lost, so he may appeal to the higher court, if permitted, should he believe that the decision should be reversed.

While he indeed resorted to the wrong mode of appeal and his right to appeal is statutory, it is still an essential part of the judicial
system that courts should proceed with caution so as not to deprive a party of the prerogative, but instead afford every party-litigant the amplest
opportunity for the proper and just disposition of his case, freed from the constraints of technicalities.

A party-litigant is to be given the fullest opportunity to establish the merits of his complaint or defense rather than for him to lose life,
liberty, honor or property on mere technicalities. The Court withhold legal approbation on the RTC decision at bar for its palpable failure to
comply with the constitutional and legal mandates thereby denying YAO of his day in court and reminding also all magistrates to heed the
demand of Section 14, Article VIII of the Constitution.

Francisco v. Permskul, 173 SCRa 324 (1989)

FACTS:
Permskul, lessee of an apartment, deposited Php 9,000 to lessor Francisco. After a year, and 10 days he vacated the property and
requested the refund of his deposit minus Php 1,000 for the 10 days occupancy after the expiration of the lease. Francisco refused and alleged
that Permskul still owed him for electricity and water bills and Php 2,500 for the repainting of the leased premises. After a summary of judgement,
METTC ordered Francisco to return Php 7,750 after deducting only the water and electricity bills. RTC affirmed this by a memorandum decision
reading in full as follows: “After a careful and thorough perusal, evaluation and study of the records of this case, this Court hereby adopts by
reference the findings of facts and conclusions of law in the decision of METTC of Makati, Br. 63 and finds that there is no cogent reason to
disturb the same. Wherefore the judgment appealed from is hereby affirmed in toto.” Francisco challenged the constitutionality of memorandum
decisions.

ISSUES:
1. Whether or not the memorandum decisions are valid.
2. Whether the incorporation by reference was a valid act that effectively elevated the decision of METTC for examination by the CA.

HELD:
1. YES. The purpose by the Constitution in requiring that decisions shall express clearly and distinctly the facts and the law on which
it is based, is to inform the person reading the decision especially the parties of how it was reached by the court after consideration
of the pertinent facts and examination of the applicable laws. It will also give the losing party an opportunity to analyze the decision,
then appeal or be persuaded to accept the decision. Third, it will serve as precedent in the resolution of future controversies and
to expedite the termination of litigations for the benefit of the parties as well as the courts.

2. YES. Though merely incorporated by reference in the memorandum decision of the RTC, RTC judge’s decision was available to
the CA. It is this circumstance that spared this case from constitutional infirmity. The same circumstance moved the SC to lay
down a requirement as a condition for the proper application of Sec. 40, which is: “The memo decision to be valid, cannot
incorporate the findings of facts and conclusions of law of the lower court only by remote (challenged decision not immediately
available to the person reading the memo decision) reference. Incorporation by reference must provide for direct access to the
facts and the law being adopted, which must be contained in the statement attached to the said decision.

Asiawest v. CA, 361 SCRA 489 (2001)

In 1985, the High Court of Malaysia ordered the Philippine National Construction Corporation (PNCC) to pay $5.1 million to Asiavest Merchant
Bankers (M) Berhad. This was the result of a recovery suit filed by Asiavest against PNCC in Malaysia for PNCC’s failure to complete a
construction project there despite due payment from Asiavest. Despite demand, PNCC failed to comply with the judgment in Malaysia hence
Asiavest filed a complaint for the enforcement of the Malaysian ruling against PNCC in the Philippines. The case was filed with the Pasig RTC
which eventually denied the complaint. The Court of Appeals affirmed the decision of the RTC.
Asiavest appealed. In its defense, PNCC alleged that the foreign judgment cannot be enforced here because of want of jurisdiction, want of
notice to PNCC, collusion and/or fraud, and there is a clear mistake of law or fact. Asiavest assailed the arguments of PNCC on the ground
that PNCC’s counsel participated in all the proceedings in the Malaysian Court.
ISSUE: Whether or not the Malaysian Court judgment should be enforced against PNCC in the Philippines.
HELD: Yes. PNCC failed to prove and substantiate its bare allegations of want of jurisdiction, want of notice, collusion and/or fraud, and mistake
of fact. On the contrary, Asiavest was able to present evidence as to the validity of the proceedings that took place in Malaysia. Asiavest
presented the certified and authenticated copies of the judgment and the order issued by the Malaysian Court. It also presented
correspondences between Asiavest’s lawyers and PNCC’s lawyers in and out of court which belied PNCC’s allegation that the Malaysian court
never acquired jurisdiction over it. PNCC’s allegation of fraud is not sufficient too, further, it never invoked the same in the Malaysian Court.
The Supreme Court notes, to assail a foreign judgment the party must present evidence of want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact. Otherwise, the judgment enjoys the presumption of validity so long as it was duly certified and
authenticated. In this case, PNCC failed to present the required evidence.
Wright v. CA, 235 SCRA 341 (1994)
FACTS:

To suppress crimes, Australia and the Government of the Philippines entered into a Treaty of Extradition on the 7th of March 1988. It
was ratified in accordance with the provisions of Section 21, Article VII of the 1987 Constitution in a Resolution adopted by the Senate on
September 10, 1990 and became effective 30 days after both States notified each other in writing that the respective requirements for the
entry into force of the Treaty have been complied with. The Treaty adopts a "non-list, double criminality approach" which provides for
broader coverage of extraditable offenses between the 2 countries and embraces crimes punishable by imprisonment for at least 1 year. It
also allows extradition for crimes committed prior to the treaty's date of effectivity, provided that these crimes were in the statute books of the
requesting State at the time of their commission.

Under the Treaty, each contracting State agrees to extradite “persons wanted for prosecution of the imposition or enforcement of a sentence
in the Requesting State for an extraditable offense." A request for extradition requires, if the person is accused of an offense, the furnishing
by the requesting State of either a warrant for the arrest or a copy of the warrant of arrest of the person, or, where appropriate, a copy of the
relevant charge against the person sought to be extradited.

The Treaty defined extraditable offenses to include all offenses "punishable under the Laws of both Contracting States by imprisonment for a
period of at least 1 year, or by a more severe penalty." For the purpose of the definition, the Treaty states that:

(a) an offense shall be an extraditable offense whether or not the laws of the Contracting States place the offense within the same category
or denominate the offense by the same terminology;

(b) the totality of the acts or omissions alleged against the person whose extradition is requested shall be taken into account in determining
the constituent elements of the offense.

On March 17, 1993, Assistant Secretary Sime D. Hidalgo of the Department of Foreign Affairs indorsed to the Department of Justice
Diplomatic Note No. 080/93 dated February 19, 1993 from the Government of Australia to the Department of Justice through Attorney
General Michael Duffy seeking to indict Paul Joseph Wright, an Australian Citizen for:

a. 1 count of Obtaining Property by Deception contrary to Section 81(1) of the Victorian Crimes Act of 1958 because he and Herbert
Lance Orr's, dishonestly obtaining $315,250 from Mulcahy, Mendelson and Round Solicitors, secured by a mortgage on the property in
Bangholme, Victoria owned by Ruven Nominees Pty. Ltd., a company controlled by a Rodney and a Mitchell, by falsely representing that all
the relevant legal documents relating to the mortgage had been signed by Rodney and Janine Mitchell

b. 13 counts of Obtaining Properties by Deception contrary to Section 81(1) of the Victorian Crimes Act of 1958 because he and Mr. John
Carson Craker's received approximately 11.2 in commission (including $367,044 in bonus commission) via Amazon Bond Pty. Ltd., by
submitting 215 false life insurance proposals, and paying premiums thereon o the Australian Mutual Provident Society through the Office of
Melbourne Mutual Insurance, where he is an insurance agent

c. 1 count of Attempting to Obtain Property by Deception contrary to Section 321(m) of the Victorian Crimes Act of 1958 because he and
Mr. Craker's attempted to cause the payment of $2,870.68 commission to a bank account in the name of Amazon Bond Pty. Ltd. by
submitting 1 false proposal for Life Insurance to the AMP Society based on an inexistent policy-holder

d. 1 count of Perjury contrary to Section 314 of Victorian Crimes Act of 1958 because he and Mr. Craker's signed and swore before a
Solicitor holding a current practicing certificate pursuant to the Legal Profession Practice Act (1958), a Statutory Declaration attesting to the
validity of 29 of the most recent Life Insurance proposals of AMP Society and containing 3 false statements

In accordance to Section 5 of PD No. 1069 (September 10, 1990), an extradition proceedings was initiated on April 6, 1993 before the
Regional Trial Court of Makati. The Regional Trial Court on June 14, 1993 granted the petition for extradition requested by the Government
of Australian concluding that the extradition could be granted irrespective of when the offense was committed. The extradition proceeding
resulted in an order of his deportation. The decision was sustained and Motion for Reconsideration was denied by the Court of
Appeals. Wright filed a review on certiorari to set aside the order of deportation contending that the provision of the Treaty giving retroactive
effect to the extradition treaty amounts to an ex post facto law which violates Section 21 of Article VI of the Constitution. Moreover, he
argues that the trial court's decision ordering his extradition is based on evidence that failed to show that he is wanted for prosecution in his
country.

ISSUES:

a. Whether or NOT the Regional Trial Court committed an order in granting the extradition proceeding.

b. Whether or NOT enforcement of Article 18 of the Treaty states a prohibition for the retroactive application of offenses committed prior to
the date of its effectivity

c. whether or not such retroactive application is in violation of the Constitution for being an ex post facto law

HELD: AFFIRM the decision of the Court of Appeals and DENY the instant petition for lack of merit

i. NO.

Complying with Article 2, Section 2 of the Treaty, the crimes for which the Mr. Wright was charged and for which warrants for his arrest were
issued in Australia were offenses in the Requesting State at the time they were alleged to have been committed. The trial court correctly
determined the offenses under our penal laws are Articles 315(2) and 183 of the Revised Penal Code on swindling/estafa and false
testimony/perjury, respectively.

The provisions of the Treaty was properly complied with. The signature and official seal of the Attorney-General of Australia were sufficient
to authenticate all the documents annexed to the Statement of the Acts and Omissions, including the statement itself. The last requirement
was accomplished by the certification made by the Philippine Consular Officer in Canberra, Australia.

The relevant provisions merely requires "a warrant for the arrest or a copy of the warrant for the arrest of the person sought to be
extradited.” It does not limited the phrase "wanted for prosecution" to a person charged with an information or a criminal complaint as it will
render the Treaty ineffective over individuals who abscond for the purpose of evading arrest and prosecution. Moreover, the “Charge and
Warrant of Arrest Sheets” shows that he is not only wanted for prosecution but has absconded to evade arrest and criminal
prosecution. Since a charge or information under the Treaty is required only when appropriate such as in cases where an individual charged
before a competent court in the Requesting State thereafter absconds to the Requested State, a charge or a copy thereof is not required if
the offender has already absconded before a criminal complaint could be filed.

ii. YES.

Article 18 states: “ENTRY INTO FORCE AND TERMINATION

This Treaty shall enter into force thirty (30) days after the date on which the Contracting States have notified each other in writing that their
respective requirements for the entry into force of this Treaty have been complied with.

Either contracting State may terminate this Treaty by notice in writing at any time and it shall cease to be in force on the one hundred and
eightieth day after the day on which notice is given.”

The first paragraph of Article 18 refers to the Treaty's date of effectivity and the second paragraph pertains to its termination. There is no
prohibition for its retroactive effect.

Furthermore, Article 2(4) of the Treaty unequivocally provides that: “4. Extradition may be granted pursuant to provisions of this Treaty
irrespective of when the offense in relation to which extradition is requested was committed, provided that:

(a) it was an offense in the Requesting State at the time of the acts or omissions constituting the offense; and

(b) the acts or omissions alleged would, if they had taken place in the Territory of the Requested State at the time of the making of the
request for extradition, have constituted an offense against the laws in force in that state.”

iii. NO.

Calder vs. Bull concluded that the concept of ex post facto laws in our Constitution was limited only to penal and criminal statutes which
affects the substantial rights of the accused. As concluded by the Court of Appeals, the Treaty is neither a piece of criminal legislation nor a
criminal procedural statute. "It merely provides for the extradition of persons wanted for prosecution of an offense or a crime which offense or
crime was already committed or consummated at the time the treaty was ratified."

Cuevas v. Munoz, 348 SCRA 542 (2000)

Facts: The Hong Kong Magistrate’s Court at Eastern Magistracy issued a warrant for the arrest of respondent Juan Antonio Muñoz for seven
(7) counts of accepting an advantage as an agent and seven(7) counts of conspiracy to defraud, contrary to the common law of Hong Kong
The Department of Justice received a request for the provisional arrest of the respondent from the Mutual Legal Assistance Unit, International
Law Division of the Hong Kong Department of Justice pursuant to Article 11(1) of the RP-Hong Kong Extradition Agreement. Upon application
of the NBI, RTC of Manila issued an Order granting the application for provisional arrest and issuing the corresponding Order of Arrest.
Consequently, respondent was arrested pursuant to the said order, and is currently detained at the NBI detention cell. Respondent filed with
the Court of Appeals, a petition for certiorari, prohibition and mandamus with application for preliminary mandatory injunction and/or writ
of habeas corpus assailing the validity of the Order of Arrest. The Court of Appeals rendered a decision declaring the Order of Arrest null and
void on the grounds, among others that the request for provisional arrest and the accompanying warrant of arrest and summary of facts were
unauthenticated and mere facsimile copies which are insufficient to form a basis for the issuance of the Order of Arrest. Thus, petitioner Justice
Serafin R. Cuevas, in his capacity as the Secretary of the Department of Justice lost no time in filing the instant petition.

Issue:
Whether or not the request for provisional arrest of respondent and its accompanying documents must be authenticated.

Held:
The request for provisional arrest of respondent and its accompanying documents is valid despite lack of authentication. There is no requirement
for the authentication of a request for provisional arrest and its accompanying documents. The enumeration in the provision of RP-Hong Kong
Extradition Agreement does not specify that these documents must be authenticated copies. This may be gleaned from the fact that while
Article 11(1) does not require the accompanying documents of a request for provisional arrest to be authenticated, Article 9 of the same
Extradition Agreement makes authentication a requisite for admission in evidence of any document accompanying a request for surrender or
extradition. In other words, authentication is required for the request for surrender or extradition but not for the request for provisional arrest. The
RP-Hong Kong Extradition Agreement, as they are worded, serves the purpose sought to be achieved by treaty stipulations for provisional
arrest. The process of preparing a formal request for extradition and its accompanying documents, and transmitting them through diplomatic
channels, is not only time-consuming but also leakage-prone. There is naturally a great likelihood of flight by criminals who get an intimation of
the pending request for their extradition. To solve this problem, speedier initial steps in the form of treaty stipulations for provisional arrest were
formulated. Thus, it is an accepted practice for the requesting state to rush its request in the form of a telex or diplomatic cable. Respondent’s
reliance on Garvida v. Sales, Jr. is misplaced. The proscription against the admission of a pleading that has been transmitted by facsimile
machine has no application in the case at bar for obvious reasons. First, the instant case does not involve a pleading; and second, unlike the
COMELEC

Secretary of Justice v. Lantion, 343 SCRA 377 (2000)

Facts: On June 18, 1999 the Department of Justice received from the Department of Foreign Affairs a request for the extradition of private
respondent Mark Jimenez to the U.S. The Grand Jury Indictment, the warrant for his arrest, and other supporting documents for said
extradition were attached along with the request. Charges include:
1. Conspiracy to commit offense or to defraud the US
2. Attempt to evade or defeat tax
3. Fraud by wire, radio, or television
4. False statement or entries
5. Election contribution in name of another

The Department of Justice (DOJ), through a designated panel proceeded with the technical evaluation and assessment of the extradition
treaty which they found having matters needed to be addressed. Respondent, then requested for copies of all the documents included in the
extradition request and for him to be given ample time to assess it.

The Secretary of Justice denied request on the ff. grounds:

1. He found it premature to secure him copies prior to the completion of the evaluation. At that point in time, the DOJ is in the process of
evaluating whether the procedures and requirements under the relevant law (PD 1069—Philippine Extradition Law) and treaty (RP-US
Extradition Treaty) have been complied with by the Requesting Government. Evaluation by the DOJ of the documents is not a preliminary
investigation like in criminal cases making the constitutionally guaranteed rights of the accused in criminal prosecution inapplicable.
2. The U.S. requested for the prevention of unauthorized disclosure of the information in the documents.
3. Finally, country is bound to Vienna convention on law of treaties such that every treaty in force is binding upon the parties.

The respondent filed for petition of mandamus, certiorari, and prohibition. The RTC of NCR ruled in favor of the respondent. Secretary of
Justice was made to issue a copy of the requested papers, as well as conducting further proceedings.

Issues:
1. WON private is respondent entitled to the two basic due process rights of notice and hearing
Yes. §2(a) of PD 1086 defines extradition as “the removal of an accused from the Philippines with the object of placing him at the disposal of
foreign authorities to enable the requesting state or government to hold him in connection with any criminal investigation directed against him
in connection with any criminal investigation directed against him or the execution of a penalty imposed on him under the penal or criminal
law of the requesting state or government.” Although the inquisitorial power exercised by the DOJ as an administrative agency due to the
failure of the DFA to comply lacks any judicial discretion, it primarily sets the wheels for the extradition process which may ultimately result in
the deprivation of the liberty of the prospective extradite. This deprivation can be effected at two stages: The provisional arrest of the
prospective extradite pending the submission of the request & the temporary arrest of the prospective extradite during the pendency of the
extradition petition in court. Clearly, there’s an impending threat to a prospective extraditee’s liberty as early as during the evaluation stage.
Because of such consequences, the evaluation process is akin to an administrative agency conducting an investigative proceeding, the
consequences of which are essentially criminal since such technical assessment sets off or commences the procedure for & ultimately the
deprivation of liberty of a prospective extradite. In essence, therefore, the evaluation process partakes of the nature of a criminal
investigation. There are certain constitutional rights that are ordinarily available only in criminal prosecution. But the Court has ruled in other
cases that where the investigation of an administrative proceeding may result in forfeiture of life, liberty, or property, the administrative
proceedings are deemed criminal or penal, & such forfeiture partakes the nature of a penalty. In the case at bar, similar to a preliminary
investigation, the evaluation stage of the extradition proceedings which may result in the filing of an information against the respondent, can
possibly lead to his arrest, & to the deprivation of his liberty. Thus, the extraditee must be accorded due process rights of notice & hearing
according to A3 §14(1) & (2), as well as A3 §7—the right of the people to information on matters of public concern & the corollary right to
access to official records & documents

The court held that the evaluation process partakes of the nature of a criminal investigation, having consequences which will result in
deprivation of liberty of the prospective extradite. A favorable action in an extradition request exposes a person to eventual extradition to a
foreign country, thus exhibiting the penal aspect of the process. The evaluation process itself is like a preliminary investigation since both
procedures may have the same result – the arrest and imprisonment of the respondent.

The basic rights of notice & hearing are applicable in criminal, civil & administrative proceedings. Non-observance of these rights will
invalidate the proceedings. Individuals are entitled to be notified of any pending case affecting their interests, & upon notice, may claim the
right to appear therein & present their side.

Rights to notice and hearing: Dispensable in 3 cases:

a. When there is an urgent need for immediate action (preventive suspension in administrative charges, padlocking filthy restaurants,
cancellation of passport).
b. Where there is tentativeness of administrative action, & the respondent isn’t prevented from enjoying the right to notice & hearing at a later
time (summary distraint & levy of the property of a delinquent taxpayer, replacement of an appointee)
c. Twin rights have been offered, but the right to exercise them had not been claimed.

2. WON this entitlement constitutes a breach of the legal commitments and obligation of the Philippine Government under the RP-US Treaty?
No. The U.S. and the Philippines share mutual concern about the suppression and punishment of crime in their respective jurisdictions. Both
states accord common due process protection to their respective citizens. The administrative investigation doesn’t fall under the three
exceptions to the due process of notice and hearing in the Sec. 3 Rules 112 of the Rules of Court.
3. WON there’s any conflict between private respondent’s basic due process rights & provisions of RP-US Extradition treaty
No. Doctrine of incorporation under international law, as applied in most countries, decrees that rules of international law are given equal
standing with, but are not superior to national legislative acts. Treaty can repeal statute and statute can repeal treaty. No conflict. Veil of
secrecy is lifted during trial. Request should impose veil at any stage.

Judgment: Petition dismissed for lack of merit.

Banco Filipino v. Purisima, 161 SCRA 576 (1988)

The inquiry into illegally acquired property – or property not legitimately acquired –, under the exception under RA 1405 extends to
cases where such property is concealed by being held by or recorded in the name of other persons. This proposition is made clear
by RA 3019 which quite categorically states that the term “legitimately acquired property of a public officer or employee shall not
include … property unlawfully acquired by the respondent, but its ownership is concealed by its being recorded in the name of, of
held by, respondent’s spouse, ascendants, descendants, relatives or any other persons.
Facts: The Bureau of Internal Revenue accused Customs special agent Manuel Caturla before the Tanodbayan of having illegal acquired
property manifestly out of proportion to his salary and other lawful income. During the preliminary investigation, the Tanodbayan issued a
subpoena duces tecum to the Banco Filipino Savings and Mortgage Bank, commanding its representative to appear at a specified time at the
Office of the Tanodbayan and furnish the latter with duly certified copies of the records in all its branches and extension offices of the loans,
savings and time deposits and other banking transactions, in the names of Caturla, his wife, Purita, their children, and/or Pedro Escuyos.

Caturla moved to quash the subpoena for violating Sections 2 and 3 of RA 1405 which was denied by the Tanodbayan. In fact, the Tanodbayan
issued another subpoena which expanded its scope including the production of bank records not only of the persons enumerated above but of
additional persons and entities as well. The Banco Filipino filed an action for declaratory relief with the CFI of Manila which was denied by the
lower court.

Issue: Whether or not the Law on Secrecy of Bank Deposits precludes production by subpoena duces tecumof bank records of transactions
by or in the names of the wife, children and friends of a special agent of the Bureau of Customs accused before the Tanodbayan of having
allegedly acquired property manifestly out of proportion to his salary and other lawful income in violation of RA 3019.
Held: The inquiry into illegally acquired property – or property not legitimately acquired – extends to cases where such property is concealed
by being held by or recorded in the name of other persons. This proposition is made clear by RA 3019 which quite categorically states that the
term “legitimately acquired property of a public officer or employee shall not include … property unlawfully acquired by the respondent, but its
ownership is concealed by its being recorded in the name of, of held by, respondent’s spouse, ascendants, descendants, relatives or any other
persons.

In PNB v. Gancayco, we ruled that: “while Section 2 of Republic Act No. 1405 provides that bank deposits are “absolutely confidential … and,
therefore, may not be examined, inquired or looked into,” except in those cases enumerated therein, Section 8 of Republic Act No. 3019 (Anti-
graft law) directs in mandatory terms that bank deposits “shall be taken into consideration in the enforcement of this section, notwithstanding
any provision of law to the contrary.” The only conclusion possible is that Section 8 of the Anti-Graft Law is intended to amend Section 2 of
Republic Act No. 1405 by providing an additional exception to the rule against the disclosure of bank deposits.”

To sustain the petitioner’s theory, and restrict the inquiry only to property held by or in the name of the government official or employee, or his
spouse and unmarried children is unwarranted in the light of the provisions of the statutes in question, and would make available to persons in
government who illegally acquire property an easy and fool-proof means of evading investigation and prosecution; all they have to do would
be to simply place the property in the possession or name of persons other than their spouse and unmarried children. This is an absurdity that
we will not ascribe to the lawmakers.

China Bank v. Ortega, 49 SCRA 355 (1973)

Facts:
Petitioner refuses to comply with a court process garnishing the bank deposit of a judgment debtor by invoking the provisions of Republic Act
No. 1405 (Secrecy of Bank Deposits Act) which allegedly prohibits the disclosure of any information relative to bank deposits.

Issue:
Whether or not a banking institution may validly refuse to comply with a court process garnishing the bank deposit of a judgment debtor, by
invoking the provisions of Republic Act No. 1405.

Held:
No. It is sufficiently clear from the foregoing discussion of the conference committee report of the two houses of Congress that the prohibition
against examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its being garnished to insure satisfaction of
a judgment. Indeed there is no real inquiry in such a case, and if the existence of the deposit is disclosed the disclosure is purely incidental to
the execution process. It is hard to conceive that it was ever within the intention of Congress to enable debtors to evade payment of their just
debts, even if ordered by the Court, through the expedient of converting their assets into cash and depositing the same in a bank

Salvacion v. Central Bank, 278 SCRA 27 (1997)

FACTS: Greg Bartelli, an American tourist, was arrested for committing four counts of rape and serious illegal detention against Karen
Salvacion. Police recovered from him several dollar checks and a dollar account in the China Banking Corp. He was, however, able to
escape from prison. In a civil case filed against him, the trial court awarded Salvacion moral, exemplary and attorney’s fees amounting to
almost P1,000,000.00.
Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. but the latter refused arguing that
Section 11 of Central Bank Circular No. 960 exempts foreign currency deposits from attachment, garnishment, or any other order or process
of any court, legislative body, government agency or any administrative body whatsoever. Salvacion therefore filed this action for declaratory
relief in the Supreme Court.

ISSUE: Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No. 6426, as amended by PD 1246, otherwise
known as the Foreign Currency Deposit Act be made applicable to a foreign transient?
HELD: NO.
The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of Republic Act No. 6426,
are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Respondents are hereby required to comply with
the writ of execution issued in the civil case and to release to petitioners the dollar deposit of Bartelli in such amount as would satisfy the
judgment.

Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages that Salvacion and her parents fully
deserve. It then proceeded to show that the economic basis for the enactment of RA No. 6426 is not anymore present; and even if it still
exists, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the law
may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case
before us.

The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and the Foreign Currency Deposit
System were designed to draw deposits from foreign lenders and investors and, subsequently, to give the latter protection. However, the
foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged by PD Nos. 1034 and 1035 and given
incentives and protection by said laws because such depositor stays only for a few days in the country and, therefore, will maintain his
deposit in the bank only for a short time. Considering that Bartelli is just a tourist or a transient, he is not entitled to the protection of Section
113 of Central Bank Circular No. 960 and PD No. 1246 against attachment, garnishment or other court processes.
Further, the SC said: “In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section
113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice would result especially to a
citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that “in
case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail.”

The Holy See v. Rosario, Jr. 238 SCRA 524 (1994)

FACTS: Petition arose from a controversy over a parcel of land. Lot 5-A, registered under the name Holy See, was contiguous to Lot 5-B and
5-D under the name of Philippine Realty Corporation (PRC). The land was donated by the Archdiocese of Manila to the Papal Nuncio, which
represents the Holy See, who exercises sovereignty over the Vatican City, Rome, Italy, for his residence.

Said lots were sold through an agent to Ramon Licup who assigned his rights to respondents Starbright Sales Enterprises, Inc.

When the squatters refuse to vacate the lots, a dispute arose between the two parties because both were unsure whose responsibility was it
to evict the squatters from said lots. Respondent Starbright Sales Enterprises Inc. insists that Holy See should clear the property while Holy
See says that respondent corporation should do it or the earnest money will be returned. With this, Msgr. Cirilios, the agent, subsequently
returned the P100,000 earnest money.

The same lots were then sold to Tropicana Properties and Development Corporation.

Starbright Sales Enterprises, Inc. filed a suit for annulment of the sale, specific performance and damages against Msgr. Cirilios, PRC as well
as Tropicana Properties and Development Corporation. The Holy See and Msgr. Cirilos moved to dismiss the petition for lack of jurisdiction
based on sovereign immunity from suit. RTC denied the motion on ground that petitioner already "shed off" its sovereign immunity by entering
into a business contract. The subsequent Motion for Reconsideration was also denied hence this special civil action for certiorari was forwarded
to the Supreme Court.

ISSUE: Whether or not Holy See can invoke sovereign immunity.

HELD: The Court held that Holy See may properly invoke sovereign immunity for its non-suability. As expressed in Sec. 2 Art II of the 1987
Constitution, generally accepted principles of International Law are adopted by our Courts and thus shall form part of the laws of the land as a
condition and consequence of our admission in the society of nations.

It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic Relations that diplomatic envoy shall be granted immunity from civil
and administrative jurisdiction of the receiving state over any real action relating to private immovable property. The Department of Foreign
Affairs (DFA) certified that the Embassy of the Holy See is a duly accredited diplomatic missionary to the Republic of the Philippines and is
thus exempted from local jurisdiction and is entitled to the immunity rights of a diplomatic mission or embassy in this Court.
Furthermore, it shall be understood that in the case at bar, the petitioner has bought and sold lands in the ordinary course of real estate
business, surely, the said transaction can be categorized as an act jure gestionis. However, petitioner has denied that the acquisition and
subsequent disposal of the lot were made for profit but claimed that it acquired said property for the site of its mission or the Apostolic Nunciature
in the Philippines.

The Holy See is immune from suit because the act of selling the lot of concern is non-propriety in nature. The lot was acquired through a
donation from the Archdiocese of Manila, not for a commercial purpose, but for the use of petitioner to construct the official place of residence
of the Papal Nuncio thereof. The transfer of the property and its subsequent disposal are likewise clothed with a governmental (non-proprietal)
character as petitioner sold the lot not for profit or gain rather because it merely cannot evict the squatters living in said property.

In view of the foregoing, the petition is hereby GRANTED and the complaints were dismissed accordingly.

Republic of Indonesia v. Vinzon, GR No. 154705, June 26, 2003

Facts:

This is a petition for review of the decision made by Court of Appeals in ruling that the Republic of Indonesia gave its consent to be sued and
voluntarily submitted itself to the laws and jurisdiction of Philippine courts and that petitioners Ambassador Soeratmin and Minister Counsellor
Kasim waived their immunity from suit.

Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a Maintenance Agreement with respondent James
Vinzon, sole proprietor of Vinzon Trade and Services. The equipment covered by the Maintenance Agreement are air conditioning units and
was to take effect in a period of four years.

When Indonesian Minister Counsellor Kasim assumed the position of Chief of Administration, he allegedly found respondent’s work and
services unsatisfactory and not in compliance with the standards set in the Maintenance Agreement. Hence, the Indonesian Embassy
terminated the agreement.

The respondent claims that the aforesaid termination was arbitrary and unlawful. Hence, he filed a complaint against the petitioners which
opposed by invoking immunity from suit.

Issues:

1. Whether or not the Republic of Indonesia can invoke the doctrine of sovereign immunity from suit.
2. Whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim may be sued herein in their private capacities.

Discussions:

The rule that a State may not be sued without its consent is a necessary consequence of the principles of independence and equality of
States. The practical justification for the doctrine of sovereign immunity is that there can be no legal right against the authority that makes the
law on which the right depends. In the case of foreign States, the rule is derived from the principle of the sovereign equality of States, as
expressed in the maxim par in parem non habet imperium. All states are sovereign equals and cannot assert jurisdiction over one another.] A
contrary attitude would “unduly vex the peace of nations”.

The rules of International Law, however, are not unbending or immune to change. The increasing need of sovereign States to enter into
purely commercial activities remotely connected with the discharge of their governmental functions brought about a new concept of sovereign
immunity. This concept, the restrictive theory, holds that the immunity of the sovereign is recognized only with regard to public acts or
acts jure imperii (public acts of the government of a state), but not with regard to private acts or acts jure gestionis (the commercial activities
of a state.)

Rulings:

1. The Supreme Court ruled that the republic of Indonesia cannot be deemed to have waived its immunity to suit. The mere entering into a
contract by a foreign state with a private party cannot be construed as the ultimate test of whether or not it is an act juri imperii or juri
gestionis. Such act is only the start of the inquiry. There is no dispute that the establishment of a diplomatic mission is an act juri imperii.
The state may enter into contracts with private entities to maintain the premises, furnishings and equipment of the embassy. The
Republic of Indonesia is acting in pursuit of a sovereign activity when it entered into a contract with the respondent. The maintenance
agreement was entered into by the Republic of Indonesia in the discharge of its governmental functions. It cannot be deemed to have
waived its immunity from suit.
2. Article 31 of the Vienna Convention on Diplomatic Relations provides that a diplomatic agent shall enjoy immunity from the criminal
jurisidiction of the receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction, except in the case of:
o a real action relating to private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the
sending State for the purposes of the mission;
 o an action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or legatee as a private
person and not on behalf of the sending State;
o an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his
official functions.

The Solicitor General believes that said act may fall under subparagraph (c) thereof, but said provision clearly applies only to a situation
where the diplomatic agent engages in any professional or commercial activity outside official functions, which is not the case herein.

Minucher v. CA, GR No. 142396, February 11, 2003

Facts

Violation of the “Dangerous Drugs Act of 1972,” was filed against Minucher following a “buy-bust operation” conducted by Philippine police
narcotic agents accompanied by Scalzo in the house of Minucher, an Iranian national, where heroin was said to have been seized. Minucher
was later acquitted by the court.

Minucher later on filed for damages due to trumped-up charges of drug trafficking made by Arthur Scalzo.

Scalzo on his counterclaims that he had acted in the discharge of his official duties as being merely an agent of the Drug Enforcement
Administration of the United States Department of Justice.

Scalzo subsequently filed a motion to dismiss the complaint on the ground that, being a special agent of the United States Drug Enforcement
Administration, he was entitled to diplomatic immunity. He attached to his motion Diplomatic Note of the United States Embassy addressed to
DOJ of the Philippines and a Certification of Vice Consul Donna Woodward, certifying that the note is a true and faithful copy of its original.
Trial court denied the motion to dismiss.

ISSUE

Whether or not Arthur Scalzo is indeed entitled to diplomatic immunity.

RULLING

YES.

A foreign agent, operating within a territory, can be cloaked with immunity from suit as long as it can be established that he is acting within the
directives of the sending state.

The consent or imprimatur of the Philippine government to the activities of the United States Drug Enforcement Agency, however, can be
gleaned from the undisputed facts in the case.

 The official exchanges of communication between agencies of the government of the two countries
 Certifications from officials of both the Philippine Department of Foreign Affairs and the United States Embassy
 Participation of members of the Philippine Narcotics Command in the “buy-bust operation” conducted at the residence of Minucher at the
behest of Scalzo

These may be inadequate to support the “diplomatic status” of the latter but they give enough indication that the Philippine government has
given its imprimatur, if not consent, to the activities within Philippine territory of agent Scalzo of the United States Drug Enforcement Agency.

The job description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers and, after having ascertained the target, to
inform local law enforcers who would then be expected to make the arrest.

In conducting surveillance activities on Minucher, later acting as the poseur-buyer during the buy-bust operation, and then becoming a principal
witness in the criminal case against Minucher,

Scalzo hardly can be said to have acted beyond the scope of his official function or duties.

Southeast Asian v. NLRC, 241 SCRA 580 (1995)

FACTS:

Two labor cases were filed by the herein private respondents against the petitioner, Southeast Asian Fisheries Development Center
(SEAFDEC), before the National Labor Relations Commission (NLRC), Regional Arbitration Branch, Iloilo City. In these cases, the private
respondents claim having been wrongfully terminated from their employment by the petitioner.

The petitioner, who claims to be an international inter-government organization composed of various Southeast Asian countries, filed a
Motion to Dismiss, challenged the jurisdiction of the public respondent in taking cognizance of the above cases.

The private respondents, as well as respondent labor arbiter, allege that the petitioner is not immune from suit and assuming that if, indeed, it
is an international organization, it has, however, impliedly, if not expressly, waived its immunity by belatedly raising the issue of jurisdiction.

ISSUE:

Whether or not the petitioner is immune from suit.

HELD:

The Court ruled for the petitioner. It is beyond question that petitioner SEAFDEC is an international agency enjoying diplomatic immunity. It
has already been held in Southeast Asian Fisheries Development Center-Aquaculture Department vs. National Labor Relations Commission
(G.R. No. 86773, 206 SCRA 283/1992). Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-
AQD) is an international agency beyond the jurisdiction of public respondent NLRC.

Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional independence and freedom from
control of the state in whose territory its office is located. One of the basic immunities of an international organization is immunity from local
jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The obvious
reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which
the host government may interfere in their operations or even influence or control its policies and decisions of the organization; besides, such
objection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-
states.

Larkins v. NLRC, 241 SCRA 598 (1995)

FACTS:
Private respondents filed a complaint with the Regional Arbitration of the National Labor Relation Commission against petitioner and Lt. Col.
Frankhauser for illegal dismissal and underpayment of wages.

ISSUE(S):
Whether or not the doctrine of nonsuability applies.

HELD:
YES. Private respondents were dismissed by Lt. Col. Frankhauser acting for and in behalf of the U.S. government.

International v. Calleja, 190 SCRA 130 (1990)

FACTS:

ICMC an accredited refugee processing center in Morong Bataan, is a non-profit agency involved in international humanitarian and voluntary
work. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative status II. It has the
activities parallel to those of the International Committee for Migrtion (ICM) and the International Committee of the Red Cross (ICRC).

On July 14, 1986, Trade Union of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and Employment a
Petition for Certification Election among the rank and file members employed by the ICMC. The latter opposed the petition on the ground that
it enjoys diplomatic immunity.

On Februaury 5, 1987 Med – Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition of TUPAS for lack of jurisdiction.

On appeal, The Director of the Bureau of Labor Relations reversed the Med – Arbiter’s Decisionand ordered the immediate conduct of a
certification election.

This present Petition for Certiorari with Preliminary Injunction assailing the BLR Order.

ISSUE:

Whether or not the grant of diplomatic privileges and immunities to ICMC extends to immunity from the application of Philippine labor laws.

HELD:

The Petition is GRANTED, the order of the Bureau of Labor Relations for Certification election is SET ASIDE, and the Temporary Restraining
Order earlier issued is made PERMANENT.
It is a recognized principle of international law and under our system of separation of powers that diplomatic immunity is essentially a political
question and courts should refuse to look beyond a determination by the executive branch of the government, and where the plea of
diplomatic immunity is recognized and affirmed by the executive branch of the government as in the case at bar, it is then the duty of the
courts to accept the claim of immunity upon appropriate suggestion by the principal law officer of the government . . . or other officer acting
under his direction. Hence, in adherence to the settled principle that courts may not so exercise their jurisdiction . . . as to embarrass the
executive arm of the government in conducting foreign relations, it is accepted doctrine that in such cases the judicial department of (this)
government follows the action of the political branch and will not embarrass the latter by assuming an antagonistic jurisdiction.

BASIS:

Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that ICMC shall have a status “similar to
that of a specialized agency.”
Article III, Section 4. The specialized agencies, their property and assets, wherever located and by whomsoever held, shall enjoy immunity
from every form of legal process except in so far as in any particular case they have expressly waived their immunity. It is, however,
understood that no waiver of immunity shall extend to any measure of execution.

Liang v. People, 355 SCRA 125 (2001)

Facts:
Two criminal informations for grave oral defamation were filed against Liang, a Chinese national who was employed as an Economist by the
Asian Development Bank (ADB), by his secretary Joyce Cabal, before the MeTC Mandaluyong City. The MeTC, acting pursuant to an advice
from the DFA that Liang enjoyed immunity from legal processes, dismissed the criminal informations against him. The RTC Pasig City
annulled and set aside the MeTC’s dismissal. Hence, Liang filed a petition for review before the SC which was denied ruling that the
immunity granted to officers and staff of the ADB is not absolute; it is limited to acts performed in an official capacity. Hence, the present MR.

Issue:
WON Liang is immune from suit

Held:
No.
Ratio:
The Court found no reason to disturb the earlier decision.
The slander of a person, by any stretch, cannot be considered as falling within the purview of the immunity granted to ADB officers and
personnel. The issue of whether or not Liang’ s utterances constituted oral defamation is still for the trial court to determine