G.R. No.

L-18164 January 23, 1967

WILLIAM F. GEMPERLE, plaintiff-appellant, vs. HELEN SCHENKER and

PAUL SCHENKER as her husband, defendants-appellees.

CONCEPCION, C. J.:

Appeal, taken by plaintiff, William F. Gemperle, from a decision of the Court of First
Instance of Rizal dismissing this case for lack of jurisdiction over the person of
defendant Paul Schenker and for want of cause of action against his wife and co-
defendant, Helen Schenker said Paul Schenker "being in no position to be joined with
her as party defendant, because he is beyond the reach of the magistracy of the
Philippine courts."

The record shows that sometime in 1952, Paul Schenker-hereinafter referred to as

Schenker — acting through his wife and attorney-in-fact, Helen Schenker — herein-
after referred to as Mrs. Schenker — filed with the Court of First Instance of Rizal, a
complaint — which was docketed as Civil Case No. Q-2796 thereof — against herein
plaintiff William F. Gemperle, for the enforcement of Schenker's allegedly initial
subscription to the shares of stock of the Philippines-Swiss Trading Co., Inc. and the
exercise of his alleged pre-emptive rights to the then unissued original capital stock of
said corporation and the increase thereof, as well as for an accounting and damages.
Alleging that, in connection with said complaint, Mrs. Schenker had caused to be
published some allegations thereof and other matters, which were impertinent,
irrelevant and immaterial to said case No. Q-2796, aside from being false and
derogatory to the reputation, good name and credit of Gemperle, "with the only
purpose of attacking" his" honesty, integrity and reputation" and of bringing him "into
public hatred, discredit, disrepute and contempt as a man and a businessman",
Gemperle commenced the present action against the Schenkers for the recovery of
P300,000 as damages, P30,000 as attorney's fees, and costs, in addition to praying for
a judgment ordering Mrs. Schenker "to retract in writing the said defamatory
expressions". In due course, thereafter, the lower court, rendered the decision above
referred to. A reconsiderating thereof having been denied, Gemperle interposed the
present appeal.

The first question for determination therein is whether or not the lower court had
acquired jurisdiction over the person of Schenker. Admittedly, he, a Swiss citizen,
residing in Zurich, Switzerland, has not been actually served with summons in the
Philippines, although the summons address to him and Mrs. Schenker had been served
personally upon her in the Philippines. It is urged by plaintiff that jurisdiction over the
person of Schenker has been secured through voluntary appearance on his part, he not
having made a special appearance to assail the jurisdiction over his person, and an
answer having been filed in this case, stating that "the defendants, by counsel,
answering the plaintiff's complaint, respectfully aver", which is allegedly a general
appearance amounting to a submission to the jurisdiction of the court, confirmed,
according to plaintiff, by a P225,000 counterclaim for damages set up in said answer;
but this counterclaim was set up by Mrs. Schenker alone, not including her husband.
Moreover, said answer contained several affirmative defenses, one of which was lack
of jurisdiction over the person of Schenker, thus negating the alleged waiver of this
defense. Nevertheless, We hold that the lower court had acquired jurisdiction over
said defendant, through service of the summons addressed to him upon Mrs. Schenker,
it appearing from said answer that she is the representative and attorney-in-fact of her
husband aforementioned civil case No. Q-2796, which apparently was filed at her
behest, in her aforementioned representative capacity. In other words, Mrs. Schenker
had authority to sue, and had actually sued on behalf of her husband, so that she was,
also, empowered to represent him in suits filed against him, particularly in a case, like
the of the one at bar, which is consequence of the action brought by her on his behalf.

Inasmuch as the alleged absence of a cause of action against Mrs. Schenker is

premised upon the alleged lack of jurisdiction over the person of Schenker, which
cannot be sustained, it follows that the conclusion drawn therefore from is, likewise,
untenable.

Wherefore, the decision appealed from should be, is hereby, reversed, and the case
remanded to the lower court for proceedings, with the costs of this instance
defendants-appellees. It is so ordered.
G.R. No. 46631 November 16, 1939

IDONAH SLADE PERKINS, petitioner, vs. ARSENIO P. DIZON, Judge of First

Instance of Manila, EUGENE ARTHUR PERKINS, and BENGUET
CONSOLIDATED MINING COMPANY, respondents.

MORAN, J.:

On July 6, 1938, respondent, Eugene Arthur Perkins, instituted an action in the Court
of First Instance of Manila against the Benguet Consolidated Mining Company for
dividends amounting to P71,379.90 on 52,874 shares of stock registered in his name,
payment of which was being withheld by the company; and, for the recognition of his
right to the control and disposal of said shares, to the exclusion of all others. To the
complaint, the company filed its answer alleging, by way of defense, that the
withholding of such dividends and the non-recognition of plaintiff's right to the
disposal and control of the shares were due to certain demands made with respect to
said shares by the petitioner herein, Idonah Slade Perkins, and by one George H.
Engelhard. The answer prays that the adverse claimants be made parties to the action
and served with notice thereof by publication, and that thereafter all such parties be
required to interplead and settle the rights among themselves. On September 5, 1938,
the trial court ordered respondent Eugene Arthur Perkins to include in his complaint
as parties defendant petitioner, Idonah Slade Perkins, and George H. Engelhard. The
complaint was accordingly amended and in addition to the relief prayed for in the
original complaint, respondent Perkins prayed that petitioner Idonah Slade Perkins
and George Engelhard be adjudged without interest in the shares of stock in question
and excluded from any claim they assert thereon. Thereafter, summons by publication
were served upon the non-resident defendants, Idonah Slade Perkins and George H.
Engelhard, pursuant to the order of the trial court. On December 9, 1938, Engelhard
filed his answer to the amended complaint, and on December 10, 1938, petitioner
Idonah Slade Perkins, through counsel, filed her pleading entitled "objection to venue,
motion to quash, and demurrer to jurisdiction" wherein she challenged the jurisdiction
of the lower court over her person. Petitioner's objection, motion and demurrer having
been overruled as well as her motion for reconsideration of the order of denial, she
now brought the present petition for certiorari, praying that the summons by
publication issued against her be declared null and void, and that, with respect to her,
respondent Judge be permanently prohibited from taking any action on the case.

The controlling issue here involved is whether or not the Court of First Instance of
Manila has acquired jurisdiction over the person of the present petitioner as a non-
resident defendant, or, notwithstanding the want of such jurisdiction, whether or not
said court may validly try the case. The parties have filed lengthy memorandums
relying on numerous authorities, but the principles governing the question are well
settled in this jurisdiction.

Section 398 of our Code of Civil Procedure provides that when a non-resident
defendant is sued in the Philippine courts and it appears, by the complaint or by
affidavits, that the action relates to real or personal property within the Philippines in
which said defendant has or claims a lien or interest, actual or contingent, or in which
the relief demanded consists, wholly or in part, in excluding such person from any
interest therein, service of summons maybe made by publication.

We have fully explained the meaning of this provision in El Banco Español Filipino
vs. Palanca, 37 Phil., 921, wherein we laid down the following rules:

(1) In order that the court may validly try a case, it must have jurisdiction over
the subject-matter and over the persons of the parties. Jurisdiction over the
subject-matter is acquired by concession of the sovereign authority which
organizes a court and determines the nature and extent of its powers in general
and thus fixes its jurisdiction with reference to actions which it may entertain
and the relief it may grant. Jurisdiction over the persons of the parties is acquired
by their voluntary appearance in court and their submission to its authority, or by
the coercive power of legal process exerted over their persons.

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

(3) The general rule, therefore, is that a suit against a non-resident cannot be
entertained by a Philippine court. Where, however, the action is in rem or quasi
in rem in connection with property located in the Philippines, the court acquires
jurisdiction over the res, and its jurisdiction over the person of the non-resident
is non-essential. In order that the court may exercise power over the res, it is not
necessary that the court should take actual custody of the property, potential
custody thereof being sufficient. There is potential custody when, from the
nature of the action brought, the power of the court over the property is
impliedly recognized by law. "An illustration of what we term potential
jurisdiction over the res, is found in the proceeding to register the title of land
under our system for the registration of land. Here the court, without taking
actual physical control over the property , assumes, at the instance of some
person claiming to be owner, to exercise a jurisdiction in rem over the property
and to adjudicate the title in favor of the petitioner against all the world."

(4) As before stated, in an action in rem or quasi in rem against a non-resident

defendant, jurisdiction over his person is non-essential, and if the law requires in
such case that the summons upon the defendant be served by publication, it is
merely to satisfy the constitutional requirement of due process. If any be said, in
this connection, that "may reported cases can be cited in which it is assumed that
the question of the sufficiency of publication or notice in the case of this kind is
a question affecting the jurisdiction of the court, and the court is sometimes said
to acquire jurisdiction by virtue of the publication. This phraseology was
undoubtedly originally adopted by the court because of the analogy between
service by publication and personal service of process upon the defendant; and,
as has already been suggested, prior to the decision of Pennoyer v. Neff (supra),
the difference between the legal effects of the two forms of service was obscure.
It is accordingly not surprising that the modes of expression which had already
been moulded into legal tradition before that case was decided have been
brought down to the present day. But it is clear that the legal principle here
involved is not affected by the peculiar languages in which the courts have
expounded their ideas."lawphi1.net
The reason for the rule that Philippine courts cannot acquire jurisdiction over the
person of a non-resident, as laid down by the Supreme Court of the United States
in Pennoyer v. Neff, supra, may be found in a recognized principle of public law to the
effect that "no State can exercise direct jurisdiction and authority over persons or
property without its territory. Story, Confl. L., ch. 2; Wheat, Int. L., pt. 2, ch. 2. The
several States are of equal dignity and authority, and the independence of one implies
the exclusion of power from all others. And so it is laid down by jurists, as an
elementary principle, that the laws of one State have no operation outside of its
territory, except so far as is allowed by comity; and that no tribunal established by it
can extend its process beyond that territory so as to subject either persons or property
to its decisions. "Any exertion of authority of this sort beyond this limit," says Story,
"is a mere nullity, and incapable of binding such persons or property in any other
tribunals." Story, Confl. L., sec. 539." (Pennoyer v. Neff, 95 U.S., 714; 24 Law. ed.,
565, 568-569.).

When, however, the action relates to property located in the Philippines, the
Philippine courts may validly try the case, upon the principle that a "State, through its
tribunals, may subject property situated within its limits owned by non-residents to the
payment of the demand of its own citizens against them; and the exercise of this
jurisdiction in no respect infringes upon the sovereignty of the State where the owners
are domiciled. Every State owes protection to its citizens; and, when non-residents
deal with them, it is a legitimate and just exercise of authority to hold and appropriate
any property owned by such non-residents to satisfy the claims of its citizens. It is in
virtue of the State's jurisdiction over the property of the non-resident situated within
its limits that its tribunals can inquire into the non-resident's obligations to its own
citizens, and the inquiry can then be carried only to the extent necessary to control the
disposition of the property. If the non-resident has no property in the State, there is
nothing upon which the tribunals can adjudicate." (Pennoyer v. Neff, supra.)

In the instant case, there can be no question that the action brought by Eugene Arthur
Perkins in his amended complaint against the petitioner, Idonah Slade Perkins, seeks
to exclude her from any interest in a property located in the Philippines. That property
consists in certain shares of stocks of the Benguet Consolidated Mining Company,
a sociedad anonima, organized in the Philippines under the provisions of the Spanish
Code of Commerce, with its principal office in the City of Manila and which conducts
its mining activities therein. The situs of the shares is in the jurisdiction where the
corporation is created, whether the certificated evidencing the ownership of those
shares are within or without that jurisdiction. (Fletcher Cyclopedia Corporations,
Permanent ed. Vol. 11, p. 95). Under these circumstances, we hold that the action thus
brought is quasi in rem, for while the judgement that may be rendered therein is not
strictly a judgment in rem, "it fixes and settles the title to the property in controversy
and to that extent partakes of the nature of the judgment in rem." (50 C.J., p 503). As
held by the Supreme Court of the United States in Pennoyer v. Neff (supra);

It is true that, in a strict sense, a proceeding in rem is one taken directly against
property, and has for its object the disposition of the property, without reference
to the title of individual claimants; but , in a large and more general sense, the
terms are applied to actions between parties, where the direct object is to reach
and dispose of property owned by them, or of some interest therein.

The action being in quasi in rem, The Court of First Instance of Manila has
jurisdiction over the person of the non-resident. In order to satisfy the constitutional
requirement of due process, summons has been served upon her by publication. There
is no question as to the adequacy of publication made nor as to the mailing of the
order of publication to the petitioner's last known place of residence in the United
States. But, of course, the action being quasi in rem and notice having be made by
publication, the relief that may be granted by the Philippine court must be confined to
the res, it having no jurisdiction to render a personal judgment against the non-
resident. In the amended complaint filed by Eugene Arthur Perkins, no money
judgment or other relief in personam is prayed for against the petitioner. The only
relief sought therein is that she be declared to be without any interest in the shares in
controversy and that she be excluded from any claim thereto.

Petitioner contends that the proceeding instituted against her is one of interpleading
and is therefore an action in personam. Section 120 of our Code of Civil Procedure
provides that whenever conflicting claims are or may be made upon a person for or
relating to personal property, or the performance of an obligation or any portion
thereof, so that he may be made subject to several actions by different persons, such
person may bring an action against the conflicting claimants, disclaiming personal
interest in the controversy, and the court may order them to interplead with one
another and litigate their several claims among themselves, there upon proceed to
determine their several claims. Here, The Benguet Consolidated Mining Company, in
its answer to the complaint filed by Eugene Arthur Perkins, averred that in connection
with the shares of stock in question, conflicting claims were being made upon it by
said plaintiff, Eugene Arthur Perkins, his wife Idonah Slade Perkins, and one named
George H. Engelhard, and prayed that these last two be made parties to the action and
served with summons by publication, so that the three claimants may litigate their
conflicting claims and settle their rights among themselves. The court has not issued
an order compelling the conflicting claimants to interplead with one another and
litigate their several claims among themselves, but instead ordered the plaintiff to
amend his complaint including the other two claimants as parties defendant. The
plaintiff did so, praying that the new defendants thus joined be excluded fro any
interest in the shares in question, and it is upon this amended complaint that the court
ordered the service of the summons by publication. It is therefore, clear that the
publication of the summons was ordered not in virtue of an interpleading, but upon the
filing of the amended complaint wherein an action quasi in rem is alleged.

Had not the complaint been amended, including the herein petitioner as an additional
defendant, and had the court, upon the filing of the answer of the Benguet
Consolidated Mining Company, issued an order under section 120 of the Code of
Civil Procedure, calling the conflicting claimants into court and compelling them to
interplead with one another, such order could not perhaps have validly been served by
publication or otherwise, upon the non-resident Idonah Slade Perkins, for then the
proceeding would be purely one of interpleading. Such proceeding is a personal action,
for it merely seeks to call conflicting claimants into court so that they may interplead
and litigate their several claims among themselves, and no specific relief is prayed for
against them, as the interpleader have appeared in court, one of them pleads
ownership of the personal property located in the Philippines and seeks to exclude a
non-resident claimant from any interest therein, is a question which we do not decide
not. Suffice it to say that here the service of the summons by publication was ordered
by the lower court by virtue of an action quasi in rem against the non-resident
defendant.

Respondents contend that, as the petitioner in the lower court has pleaded over the
subject-matter, she has submitted herself to its jurisdiction. We have noticed, however,
that these pleas have been made not as independent grounds for relief, but merely as
additional arguments in support of her contention that the lower court had no
jurisdiction over the person. In other words, she claimed that the lower court had no
jurisdiction over her person not only because she is a non-resident, but also because
the court had no jurisdiction over the subject-matter of the action and that the issues
therein involved have already been decided by the New York court and are being
relitigated in the California court. Although this argument is obviously erroneous, as
neither jurisdiction over the subject-matter nor res adjudicata nor lis pendens has
anything to do with the question of jurisdiction over her person, we believe and so
hold that the petitioner has not, by such erroneous argument, submitted herself to the
jurisdiction of the court. Voluntary appearance cannot be implied from either a
mistaken or superflous reasoning but from the nature of the relief prayed for.

For all the foregoing, petition is hereby denied, with costs against petitioner.
G.R. No. 162894 February 26, 2008

RAYTHEON INTERNATIONAL, INC., petitioner, vs. STOCKTON W.

ROUZIE, JR., respondent.

DECISION

TINGA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules
of Civil Procedure which seeks the reversal of the Decision1 and Resolution2 of the
Court of Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil case filed by
respondent against petitioner with the trial court.

As culled from the records of the case, the following antecedents appear:

Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized
and existing under the laws of the State of Connecticut, United States of America, and
respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract
whereby BMSI hired respondent as its representative to negotiate the sale of services
in several government projects in the Philippines for an agreed remuneration of 10%
of the gross receipts. On 11 March 1992, respondent secured a service contract with
the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected
by the Mt. Pinatubo eruption and mudflows.3

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor
Relations Commission (NLRC) a suit against BMSI and Rust International, Inc.
(RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of
commissions, illegal termination and breach of employment contract.4 On 28
September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering
BMSI and RUST to pay respondent’s money claims.5 Upon appeal by BMSI, the
NLRC reversed the decision of the Labor Arbiter and dismissed respondent’s
complaint on the ground of lack of jurisdiction.6 Respondent elevated the case to this
Court but was dismissed in a Resolution dated 26 November 1997. The Resolution
became final and executory on 09 November 1998.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for

damages before the Regional Trial Court (RTC) of Bauang, La Union. The
Complaint,7 docketed as Civil Case No. 1192-BG, named as defendants herein
petitioner Raytheon International, Inc. as well as BMSI and RUST, the two
corporations impleaded in the earlier labor case. The complaint essentially reiterated
the allegations in the labor case that BMSI verbally employed respondent to negotiate
the sale of services in government projects and that respondent was not paid the
commissions due him from the Pinatubo dredging project which he secured on behalf
of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself
had combined and functioned as one company.

In its Answer,8 petitioner alleged that contrary to respondent’s claim, it was a foreign
corporation duly licensed to do business in the Philippines and denied entering into
any arrangement with respondent or paying the latter any sum of money. Petitioner
also denied combining with BMSI and RUST for the purpose of assuming the alleged
obligation of the said companies.9 Petitioner also referred to the NLRC decision which
disclosed that per the written agreement between respondent and BMSI and RUST,
denominated as "Special Sales Representative Agreement," the rights and obligations
of the parties shall be governed by the laws of the State of Connecticut.10 Petitioner
sought the dismissal of the complaint on grounds of failure to state a cause of action
and forum non conveniens and prayed for damages by way of compulsory
counterclaim.11

On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based
on Affirmative Defenses and for Summary Judgment12 seeking the dismissal of the
complaint on grounds of forum non conveniens and failure to state a cause of action.
Respondent opposed the same. Pending the resolution of the omnibus motion, the
deposition of Walter Browning was taken before the Philippine Consulate General in
Chicago.13

In an Order14 dated 13 September 2000, the RTC denied petitioner’s omnibus motion.
The trial court held that the factual allegations in the complaint, assuming the same to
be admitted, were sufficient for the trial court to render a valid judgment thereon. It
also ruled that the principle of forum non conveniens was inapplicable because the
trial court could enforce judgment on petitioner, it being a foreign corporation
licensed to do business in the Philippines.15

Petitioner filed a Motion for Reconsideration16 of the order, which motion was
opposed by respondent.17 In an Order dated 31 July 2001,18 the trial court denied
petitioner’s motion. Thus, it filed a Rule 65 Petition19 with the Court of Appeals
praying for the issuance of a writ of certiorari and a writ of injunction to set aside the
twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin
the trial court from conducting further proceedings.20
On 28 August 2003, the Court of Appeals rendered the assailed Decision21 denying
the petition for certiorari for lack of merit. It also denied petitioner’s motion for
reconsideration in the assailed Resolution issued on 10 March 2004.22

The appellate court held that although the trial court should not have confined itself to
the allegations in the complaint and should have also considered evidence aliunde in
resolving petitioner’s omnibus motion, it found the evidence presented by petitioner,
that is, the deposition of Walter Browning, insufficient for purposes of determining
whether the complaint failed to state a cause of action. The appellate court also stated
that it could not rule one way or the other on the issue of whether the corporations,
including petitioner, named as defendants in the case had indeed merged together
based solely on the evidence presented by respondent. Thus, it held that the issue
should be threshed out during trial.23 Moreover, the appellate court deferred to the
discretion of the trial court when the latter decided not to desist from assuming
jurisdiction on the ground of the inapplicability of the principle of forum non
conveniens.

Hence, this petition raising the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO

DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF
ACTION AGAINST RAYTHEON INTERNATIONAL, INC.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO

DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON
CONVENIENS.24

Incidentally, respondent failed to file a comment despite repeated notices. The

Ceferino Padua Law Office, counsel on record for respondent, manifested that the
lawyer handling the case, Atty. Rogelio Karagdag, had severed relations with the law
firm even before the filing of the instant petition and that it could no longer find the
whereabouts of Atty. Karagdag or of respondent despite diligent efforts. In a
Resolution25 dated 20 November 2006, the Court resolved to dispense with the filing
of a comment.

The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI
included a valid choice of law clause, that is, that the contract shall be governed by the
laws of the State of Connecticut. It also mentions the presence of foreign elements in
the dispute – namely, the parties and witnesses involved are American corporations
and citizens and the evidence to be presented is located outside the Philippines – that
renders our local courts inconvenient forums. Petitioner theorizes that the foreign
elements of the dispute necessitate the immediate application of the doctrine of forum
non conveniens.

Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases

involved in judicial resolution of conflicts-of-laws problems, namely: jurisdiction,
choice of law, and recognition and enforcement of judgments. Thus, in the
instances27 where the Court held that the local judicial machinery was adequate to
resolve controversies with a foreign element, the following requisites had to be proved:
(1) that the Philippine Court is one to which the parties may conveniently resort; (2)
that the Philippine Court is in a position to make an intelligent decision as to the law
and the facts; and (3) that the Philippine Court has or is likely to have the power to
enforce its decision.28

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed
in a Philippine court and where the court has jurisdiction over the subject matter, the
parties and the res, it may or can proceed to try the case even if the rules of conflict-
of-laws or the convenience of the parties point to a foreign forum. This is an exercise
of sovereign prerogative of the country where the case is filed.29

Jurisdiction over the nature and subject matter of an action is conferred by the
Constitution and the law30 and by the material allegations in the complaint,
irrespective of whether or not the plaintiff is entitled to recover all or some of the
claims or reliefs sought therein.31 Civil Case No. 1192-BG is an action for damages
arising from an alleged breach of contract. Undoubtedly, the nature of the action and
the amount of damages prayed are within the jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein
respondent (as party plaintiff) upon the filing of the complaint. On the other hand,
jurisdiction over the person of petitioner (as party defendant) was acquired by its
voluntary appearance in court.32

That the subject contract included a stipulation that the same shall be governed by the
laws of the State of Connecticut does not suggest that the Philippine courts, or any
other foreign tribunal for that matter, are precluded from hearing the civil action.
Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers
whether it is fair to cause a defendant to travel to this state; choice of law asks the
further question whether the application of a substantive law which will determine the
merits of the case is fair to both parties.33 The choice of law stipulation will become
relevant only when the substantive issues of the instant case develop, that is, after
hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may
refuse impositions on its jurisdiction where it is not the most "convenient" or available
forum and the parties are not precluded from seeking remedies
elsewhere.34 Petitioner’s averments of the foreign elements in the instant case are not
sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG
and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non
conveniens requires a factual determination; hence, it is more properly considered as a
matter of defense. While it is 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.35

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected
its conclusion that it can assume jurisdiction over the dispute notwithstanding its
foreign elements. In the same manner, the Court defers to the sound discretion of the
lower courts because their findings are binding on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a
cause of action against petitioner. Failure to state a cause of action refers to the
insufficiency of allegation in the pleading.36 As a general rule, the elementary test for
failure to state a cause of action is whether the complaint alleges facts which if true
would justify the relief demanded.37

The complaint alleged that petitioner had combined with BMSI and RUST to function
as one company. Petitioner contends that the deposition of Walter Browning rebutted
this allegation. On this score, the resolution of the Court of Appeals is instructive, thus:

x x x Our examination of the deposition of Mr. Walter Browning as well as other

documents produced in the hearing shows that these evidence aliunde are not
quite sufficient for us to mete a ruling that the complaint fails to state a cause of
action.

Annexes "A" to "E" by themselves are not substantial, convincing and

conclusive proofs that Raytheon Engineers and Constructors, Inc. (REC)
assumed the warranty obligations of defendant Rust International in the Makar
Port Project in General Santos City, after Rust International ceased to exist after
 being absorbed by REC. Other documents already submitted in evidence are
likewise meager to preponderantly conclude that Raytheon International, Inc.,
Rust International[,] Inc. and Brand Marine Service, Inc. have combined into
one company, so much so that Raytheon International, Inc., the surviving
company (if at all) may be held liable for the obligation of BMSI to respondent
Rouzie for unpaid commissions. Neither these documents clearly speak
otherwise.38

As correctly pointed out by the Court of Appeals, the question of whether petitioner,
BMSI and RUST merged together requires the presentation of further evidence, which
only a full-blown trial on the merits can afford.

WHEREFORE, the instant petition for review on certiorari is DENIED. The

Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 67001 are
hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
G.R. No. 122191 October 8, 1998

SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF APPEALS,

MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as
Presiding Judge of Branch 89, Regional Trial Court of Quezon City, respondents.

QUISUMBING, J.:

This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul
and set aside the Resolution1dated September 27, 1995 and the Decision2 dated
April 10, 1996 of the Court of Appeals3 in CA-G.R. SP No. 36533,4 and the
Orders5 dated August 29, 1994 6 and February 2, 19957 that were issued by the
trial court in Civil Case No. Q-93-18394.8

The pertinent antecedent facts which gave rise to the instant petition, as stated in
the questioned Decision9, are as follows:

On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight

Attendant for its airlines based in Jeddah, Saudi Arabia. . . .

On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff

went to a disco dance with fellow crew members Thamer Al-Gazzawi
and Allah Al-Gazzawi, both Saudi nationals. Because it was almost
morning when they returned to their hotels, they agreed to have
breakfast together at the room of Thamer. When they were in te (sic)
room, Allah left on some pretext. Shortly after he did, Thamer
attempted to rape plaintiff. Fortunately, a roomboy and several
security personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi,
the latter as an accomplice.

When plaintiff returned to Jeddah a few days later, several SAUDIA

officials interrogated her about the Jakarta incident. They then
requested her to go back to Jakarta to help arrange the release of
Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad
and base manager Baharini negotiated with the police for the
immediate release of the detained crew members but did not succeed
because plaintiff refused to cooperate. She was afraid that she might
be tricked into something she did not want because of her inability to
understand the local dialect. She also declined to sign a blank paper
and a document written in the local dialect. Eventually, SAUDIA
allowed plaintiff to return to Jeddah but barred her from the Jakarta
flights.

Plaintiff learned that, through the intercession of the Saudi Arabian

government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDI (sic). In September 1990, defendant
SAUDIA transferred plaintiff to Manila.

On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors requested her to see
Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi
Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and
allowed her to catch the afternoon flight out of Jeddah.

One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia,
a few minutes before the departure of her flight to Manila, plaintiff
was not allowed to board the plane and instead ordered to take a later
flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of
SAUDIA. When she did, a certain Khalid of the SAUDIA office
brought her to a Saudi court where she was asked to sign a document
written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993. Plaintiff
then returned to Manila.

Shortly afterwards, defendant SAUDIA summoned plaintiff to report

to Jeddah once again and see Miniewy on June 27, 1993 for further
investigation. Plaintiff did so after receiving assurance from
SAUDIA's Manila manager, Aslam Saleemi, that the investigation was
routinary and that it posed no danger to her.

In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi

court on June 27, 1993. Nothing happened then but on June 28, 1993, a
Saudi judge interrogated plaintiff through an interpreter about the
Jakarta incident. After one hour of interrogation, they let her go. At
the airport, however, just as her plane was about to take off, a
 SAUDIA officer told her that the airline had forbidden her to take
flight. At the Inflight Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her passport and told her
to remain in Jeddah, at the crew quarters, until further orders.

On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the

same court where the judge, to her astonishment and shock, rendered
a decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the
Saudi court had tried her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff guilty of (1) adultery;
(2) going to a disco, dancing and listening to the music in violation of
Islamic laws; and (3) socializing with the male crew, in contravention
of Islamic tradition. 10

Facing conviction, private respondent sought the help of her employer, petitioner
SAUDIA. Unfortunately, she was denied any assistance. She then asked the
Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile,
to pay for her upkeep, she worked on the domestic flight of SAUDIA, while
Thamer and Allah continued to serve in the international
flights. 11

Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila, 12 she was terminated from the service by SAUDIA, without her being
informed of the cause.

On November 23, 1993, Morada filed a Complaint 13 for damages against

SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country manager.

On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which

raised the following grounds, to wit: (1) that the Complaint states no cause of
action against Saudia; (2) that defendant Al-Balawi is not a real party in interest;
(3) that the claim or demand set forth in the Complaint has been waived,
abandoned or otherwise extinguished; and (4) that the trial court has no
jurisdiction to try the case.

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) 15.
Saudia filed a reply 16 thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi
was dropped as party defendant. On August 11, 1994, Saudia filed its
Manifestation and Motion to Dismiss Amended Complaint 18.

The trial court issued an Order 19 dated August 29, 1994 denying the Motion to
Dismiss Amended Complaint filed by Saudia.

From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA
filed on September 20, 1994, its Motion for Reconsideration 21 of the Order dated
August 29, 1994. It alleged that the trial court has no jurisdiction to hear and try
the case on the basis of Article 21 of the Civil Code, since the proper law
applicable is the law of the Kingdom of Saudi Arabia. On October 14, 1994,
Morada filed her Opposition 22(To Defendant's Motion for Reconsideration).

In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged
that since its Motion for Reconsideration raised lack of jurisdiction as its cause of
action, the Omnibus Motion Rule does not apply, even if that ground is raised for
the first time on appeal. Additionally, SAUDIA alleged that the Philippines does
not have any substantial interest in the prosecution of the instant case, and hence,
without jurisdiction to adjudicate the same.

Respondent Judge subsequently issued another Order 24 dated February 2, 1995,

denying SAUDIA's Motion for Reconsideration. The pertinent portion of the
assailed Order reads as follows:

Acting on the Motion for Reconsideration of defendant Saudi Arabian

Airlines filed, thru counsel, on September 20, 1994, and the Opposition
thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well
as the Reply therewith of defendant Saudi Arabian Airlines filed, thru
counsel, on October 24, 1994, considering that a perusal of the
plaintiffs Amended Complaint, which is one for the recovery of actual,
moral and exemplary damages plus attorney's fees, upon the basis of
the applicable Philippine law, Article 21 of the New Civil Code of the
Philippines, is, clearly, within the jurisdiction of this Court as regards
the subject matter, and there being nothing new of substance which
might cause the reversal or modification of the order sought to be
reconsidered, the motion for reconsideration of the defendant, is
DENIED.

SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or
Temporary Restraining Order 26 with the Court of Appeals.

Respondent Court of Appeals promulgated a Resolution with Temporary

Restraining Order 27 dated February 23, 1995, prohibiting the respondent Judge
from further conducting any proceeding, unless otherwise directed, in the
interim.

In another Resolution 28 promulgated on September 27, 1995, now assailed, the

appellate court denied SAUDIA's Petition for the Issuance of a Writ of
Preliminary Injunction dated February 18, 1995, to wit:

The Petition for the Issuance of a Writ of Preliminary Injunction is

hereby DENIED, after considering the Answer, with Prayer to Deny
Writ of Preliminary Injunction (Rollo, p. 135) the Reply and
Rejoinder, it appearing that herein petitioner is not clearly entitled
thereto (Unciano Paramedical College, et. Al., v. Court of Appeals,
et. Al., 100335, April 7, 1993, Second Division).

SO ORDERED.

On October 20, 1995, SAUDIA filed with this Honorable Court the instant
Petition 29 for Review with Prayer for Temporary Restraining Order dated
October 13, 1995.

However, during the pendency of the instant Petition, respondent Court of

Appeals rendered the Decision 30dated April 10, 1996, now also assailed. It ruled
that the Philippines is an appropriate forum considering that the Amended
Complaint's basis for recovery of damages is Article 21 of the Civil Code, and
thus, clearly within the jurisdiction of respondent Court. It further held
that certiorari is not the proper remedy in a denial of a Motion to Dismiss,
inasmuch as the petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal.

On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer
for Temporary Restraining Order 31 dated April 30, 1996, given due course by
this Court. After both parties submitted their Memoranda, 32 the instant case is
now deemed submitted for decision.

Petitioner SAUDIA raised the following issues:

 I

The trial court has no jurisdiction to hear and try Civil Case No. Q-93-
18394 based on Article 21 of the New Civil Code since the proper law
applicable is the law of the Kingdom of Saudi Arabia inasmuch as this
case involves what is known in private international law as a "conflicts
problem". Otherwise, the Republic of the Philippines will sit in
judgment of the acts done by another sovereign state which is
abhorred.

II

Leave of court before filing a supplemental pleading is not a

jurisdictional requirement. Besides, the matter as to absence of leave
of court is now moot and academic when this Honorable Court
required the respondents to comment on petitioner's April 30, 1996
Supplemental Petition For Review With Prayer For A Temporary
Restraining Order Within Ten (10) Days From Notice Thereof.
Further, the Revised Rules of Court should be construed with
liberality pursuant to Section 2, Rule 1 thereof.

III

Petitioner received on April 22, 1996 the April 10, 1996 decision in
CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon.
Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental
Petition For Review With Prayer For A Temporary Restraining Order
on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period
as provided for under Section 1, Rule 45 of the Revised Rules of Court.
Therefore, the decision in CA-G.R. SP NO. 36533 has not yet become
final and executory and this Honorable Court can take cognizance of
this case. 33

From the foregoing factual and procedural antecedents, the following issues
emerge for our resolution:

I.

WHETHER RESPONDENT APPELLATE COURT ERRED IN

HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON
CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO.
 Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI
ARABIAN AIRLINES".

II.

WHETHER RESPONDENT APPELLATE COURT ERRED IN

RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD
GOVERN.

Petitioner SAUDIA claims that before us is a conflict of laws that must be settled
at the outset. It maintains that private respondent's claim for alleged abuse of
rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a
foreign element qualifies the instant case for the application of the law of the
Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule. 34

On the other hand, private respondent contends that since her Amended
Complaint is based on Articles 19 35 and 21 36 of the Civil Code, then the instant
case is properly a matter of domestic law. 37

Under the factual antecedents obtaining in this case, there is no dispute that the
interplay of events occurred in two states, the Philippines and Saudi Arabia.

As stated by private respondent in her Amended Complaint 38 dated June 23,

1994:

2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign

airlines corporation doing business in the Philippines. It may be served
with summons and other court processes at Travel Wide Associated
Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo
Village, Makati, Metro Manila.

xxx xxx xxx

6. Plaintiff learned that, through the intercession of the Saudi Arabian

government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDIA. In September 1990, defendant SAUDIA
transferred plaintiff to Manila.

7. On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors reauested her to see MR.
Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi Arabia.
When she saw him, he brought her to the police station where the
police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and
allowed her to catch the afternoon flight out of Jeddah.

8. One year and a half later or on June 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal
Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA
office brought her to a Saudi court where she was asked to sigh a
document written in Arabic. They told her that this was necessary to
close the case against Thamer and Allah. As it turned out, plaintiff
signed a notice to her to appear before the court on June 27,
1993. Plaintiff then returned to Manila.

9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report

to Jeddah once again and see Miniewy on June 27, 1993 for further
investigation. Plaintiff did so after receiving assurance from SAUDIA's
Manila manger, Aslam Saleemi, that the investigation was routinary and
that it posed no danger to her.

10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same

Saudi court on June 27, 1993. Nothing happened then but on June 28,
1993, a Saudi judge interrogated plaintiff through an interpreter
about the Jakarta incident. After one hour of interrogation, they let
her go. At the airport, however, just as her plane was about to take off,
a SAUDIA officer told her that the airline had forbidden her to take
that flight. At the Inflight Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her passport and told her
to remain in Jeddah, at the crew quarters, until further orders.

11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to

the same court where the judge, to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to five
months imprisonment and to 286 lashes. Only then did she realize that
the Saudi court had tried her, together with Thamer and Allah, for
what happened in Jakarta. The court found plaintiff guilty of (1)
 adultery; (2) going to a disco, dancing, and listening to the music in
violation of Islamic laws; (3) socializing with the male crew, in
contravention of Islamic tradition.

12. Because SAUDIA refused to lend her a hand in the case, plaintiff
sought the help of the Philippines Embassy in Jeddah. The latter helped
her pursue an appeal from the decision of the court. To pay for her
upkeep, she worked on the domestic flights of defendant SAUDIA
while, ironically, Thamer and Allah freely served the international
flights. 39

Where the factual antecedents satisfactorily establish the existence of a foreign

element, we agree with petitioner that the problem herein could present a
"conflicts" case.

A factual situation that cuts across territorial lines and is affected by the diverse
laws of two or more states is said to contain a "foreign element". The presence of
a foreign element is inevitable since social and economic affairs of individuals
and associations are rarely confined to the geographic limits of their birth or
conception. 40

The forms in which this foreign element may appear are many. 41 The foreign
element may simply consist in the fact that one of the parties to a contract is an
alien or has a foreign domicile, or that a contract between nationals of one State
involves properties situated in another State. In other cases, the foreign element
may assume a complex form. 42

In the instant case, the foreign element consisted in the fact that private
respondent Morada is a resident Philippine national, and that petitioner
SAUDIA is a resident foreign corporation. Also, by virtue of the employment of
Morada with the petitioner Saudia as a flight stewardess, events did transpire
during her many occasions of travel across national borders, particularly from
Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a
"conflicts" situation to arise.

We thus find private respondent's assertion that the case is purely domestic,
imprecise. A conflicts problem presents itself here, and the question of
jurisdiction 43 confronts the court a quo.
After a careful study of the private respondent's Amended Complaint, 44 and the
Comment thereon, we note that she aptly predicated her cause of action on
Articles 19 and 21 of the New Civil Code.

On one hand, Article 19 of the New Civil Code provides:

Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice give everyone his due and
observe honesty and good faith.

On the other hand, Article 21 of the New Civil Code provides:

Art. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for damages.

Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this Court held
that:

The aforecited provisions on human relations were intended to expand

the concept of torts in this jurisdiction by granting adequate legal
remedy for the untold number of moral wrongs which is impossible
for human foresight to specifically provide in the statutes.

Although Article 19 merely declares a principle of law, Article 21 gives flesh to its
provisions. Thus, we agree with private respondent's assertion that violations of
Articles 19 and 21 are actionable, with judicially enforceable remedies in the
municipal forum.

Based on the allegations 46 in the Amended Complaint, read in the light of the
Rules of Court on jurisdiction 47 we find that the Regional Trial Court (RTC) of
Quezon City possesses jurisdiction over the subject matter of the suit. 48 Its
authority to try and hear the case is provided for under Section 1 of Republic Act
No. 7691, to wit:

Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the

"Judiciary Reorganization Act of 1980", is hereby amended to read as
follows:

Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall

exercise exclusive jurisdiction:
 xxx xxx xxx

(8) In all other cases in which demand, exclusive of interest,

damages of whatever kind, attorney's fees, litigation expenses,
and cots or the value of the property in controversy exceeds
One hundred thousand pesos (P100,000.00) or, in such other
cases in Metro Manila, where the demand, exclusive of the
above-mentioned items exceeds Two hundred Thousand
pesos (P200,000.00). (Emphasis ours)

xxx xxx xxx

And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue,
Quezon City, is appropriate:

Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial

Court]

(a) xxx xxx xxx

(b) Personal actions. — All other actions may be commenced and tried
where the defendant or any of the defendants resides or may be found,
or where the plaintiff or any of the plaintiff resides, at the election of
the plaintiff.

Pragmatic considerations, including the convenience of the parties, also weigh

heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the
private interest of the litigant. Enforceability of a judgment if one is obtained is
quite obvious. Relative advantages and obstacles to a fair trial are equally
important. Plaintiff may not, by choice of an inconvenient forum, "vex",
"harass", or "oppress" the defendant, e.g. by inflicting upon him needless
expense or disturbance. But unless the balance is strongly in favor of the
defendant, the plaintiffs choice of forum should rarely be disturbed. 49

Weighing the relative claims of the parties, the court a quo found it best to hear
the case in the Philippines. Had it refused to take cognizance of the case, it would
be forcing plaintiff (private respondent now) to seek remedial action
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains
substantial connections. That would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of
the plaintiff (now private respondent) should be upheld.

Similarly, the trial court also possesses jurisdiction over the persons of the
parties herein. By filing her Complaint and Amended Complaint with the trial
court, private respondent has voluntary submitted herself to the jurisdiction of
the court.

The records show that petitioner SAUDIA has filed several motions 50 praying
for the dismissal of Morada's Amended Complaint. SAUDIA also filed an
Answer In Ex Abundante Cautelam dated February 20, 1995. What is very patent
and explicit from the motions filed, is that SAUDIA prayed for other reliefs
under the premises. Undeniably, petitioner SAUDIA has effectively submitted to
the trial court's jurisdiction by praying for the dismissal of the Amended
Complaint on grounds other than lack of jurisdiction.

As held by this Court in Republic vs. Ker and Company, Ltd.: 51

We observe that the motion to dismiss filed on April 14, 1962, aside
from disputing the lower court's jurisdiction over defendant's person,
prayed for dismissal of the complaint on the ground that plaintiff's
cause of action has prescribed. By interposing such second ground in
its motion to dismiss, Ker and Co., Ltd. availed of an affirmative
defense on the basis of which it prayed the court to resolve controversy
in its favor. For the court to validly decide the said plea of defendant
Ker & Co., Ltd., it necessarily had to acquire jurisdiction upon the
latter's person, who, being the proponent of the affirmative defense,
should be deemed to have abandoned its special appearance and
voluntarily submitted itself to the jurisdiction of the court.

Similarly, the case of De Midgely vs. Ferandos, held that;

When the appearance is by motion for the purpose of objecting to the

jurisdiction of the court over the person, it must be for the sole and
separate purpose of objecting to the jurisdiction of the court. If his
motion is for any other purpose than to object to the jurisdiction of the
court over his person, he thereby submits himself to the jurisdiction of
the court. A special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will be held to
be a general appearance, if the party in said motion should, for
 example, ask for a dismissal of the action upon the further ground that
the court had no jurisdiction over the subject matter. 52

Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court
of Quezon City. Thus, we find that the trial court has jurisdiction over the case
and that its exercise thereof, justified.

As to the choice of applicable law, we note that choice-of-law problems seek to

answer two important questions: (1) What legal system should control a given
situation where some of the significant facts occurred in two or more states; and
(2) to what extent should the chosen legal system regulate the situation. 53

Several theories have been propounded in order to identify the legal system that
should ultimately control. Although ideally, all choice-of-law theories should
intrinsically advance both notions of justice and predictability, they do not
always do so. The forum is then faced with the problem of deciding which of
these two important values should be stressed. 54

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

category a certain set of facts or rules fall. This process is known as
"characterization", or the "doctrine of qualification". It is the "process of
deciding whether or not the facts relate to the kind of question specified in a
conflicts rule." 55The purpose of "characterization" is to enable the forum to
select the proper law. 56

Our starting point of analysis here is not a legal relation, but a factual situation,
event, or operative fact. 57An essential element of conflict rules is the indication of
a "test" or "connecting factor" or "point of contact". Choice-of-law rules
invariably consist of a factual relationship (such as property right, contract claim)
and a connecting factor or point of contact, such as the situs of the res, the place
of celebration, the place of performance, or the place of wrongdoing. 58

Note that one or more circumstances may be present to serve as the possible test
for the determination of the applicable law. 59 These "test factors" or "points of
contact" or "connecting factors" could be any of the following:

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

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

 (3) the situs of a thing, that is, the place where a thing is, or is deemed
to be situated. In particular, the lex situs is decisive when real rights
are involved;

(4) the place where an act has been done, the locus actus, such as the
place where a contract has been made, a marriage celebrated, a will
signed or a tort committed. The lex loci actus is particularly important in
contracts and torts;

(5) the place where an act is intended to come into effect, e.g., the place
of performance of contractual duties, or the place where a power of
attorney is to be exercised;

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

(7) the place where judicial or administrative proceedings are

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

(8) the flag of a ship, which in many cases is decisive of practically all
legal relationships of the ship and of its master or owner as such. It
also covers contractual relationships particularly contracts of
affreightment. 60 (Emphasis ours.)

After a careful study of the pleadings on record, including allegations in the

Amended Complaint deemed admitted for purposes of the motion to dismiss, we
are convinced that there is reasonable basis for private respondent's assertion
that although she was already working in Manila, petitioner brought her to
Jeddah on the pretense that she would merely testify in an investigation of the
charges she made against the two SAUDIA crew members for the attack on her
person while they were in Jakarta. As it turned out, she was the one made to face
trial for very serious charges, including adultery and violation of Islamic laws
and tradition.
There is likewise logical basis on record for the claim that the "handing over" or
"turning over" of the person of private respondent to Jeddah officials, petitioner
may have acted beyond its duties as employer. Petitioner's purported act
contributed to and amplified or even proximately caused additional humiliation,
misery and suffering of private respondent. Petitioner thereby allegedly
facilitated the arrest, detention and prosecution of private respondent under the
guise of petitioner's authority as employer, taking advantage of the trust,
confidence and faith she reposed upon it. As purportedly found by the Prince of
Makkah, the alleged conviction and imprisonment of private respondent was
wrongful. But these capped the injury or harm allegedly inflicted upon her
person and reputation, for which petitioner could be liable as claimed, to provide
compensation or redress for the wrongs done, once duly proven.

Considering that the complaint in the court a quo is one involving torts, the
"connecting factor" or "point of contact" could be the place or places where the
tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort (the
place where the alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had honestly believed that
petitioner would, in the exercise of its rights and in the performance of its duties,
"act with justice, give her due and observe honesty and good faith." Instead,
petitioner failed to protect her, she claimed. That certain acts or parts of the
injury allegedly occurred in another country is of no moment. For in our view
what is important here is the place where the over-all harm or the totality of the
alleged injury to the person, reputation, social standing and human rights of
complainant, had lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the Philippines as the situs
of the alleged tort.

Moreover, with the widespread criticism of the traditional rule of lex loci delicti
commissi, modern theories and rules on tort liability 61 have been advanced to
offer fresh judicial approaches to arrive at just results. In keeping abreast with
the modern theories on tort liability, we find here an occasion to apply the "State
of the most significant relationship" rule, which in our view should be
appropriate to apply now, given the factual context of this case.

In applying said principle to determine the State which has the most significant
relationship, the following contacts are to be taken into account and evaluated
according to their relative importance with respect to the particular issue: (a) the
place where the injury occurred; (b) the place where the conduct causing the
injury occurred; (c) the domicile, residence, nationality, place of incorporation
and place of business of the parties, and (d) the place where the relationship, if
any, between the parties is centered. 62

As already discussed, there is basis for the claim that over-all injury occurred
and lodged in the Philippines. There is likewise no question that private
respondent is a resident Filipina national, working with petitioner, a resident
foreign corporation engaged here in the business of international air carriage.
Thus, the "relationship" between the parties was centered here, although it
should be stressed that this suit is not based on mere labor law violations. From
the record, the claim that the Philippines has the most significant contact with
the matter in this dispute, 63 raised by private respondent as plaintiff below
against defendant (herein petitioner), in our view, has been properly established.

Prescinding from this premise that the Philippines is the situs of the tort
complained of and the place "having the most interest in the problem", we find,
by way of recapitulation, that the Philippine law on tort liability should have
paramount application to and control in the resolution of the legal issues arising
out of this case. Further, we hold that the respondent Regional Trial Court has
jurisdiction over the parties and the subject matter of the complaint; the
appropriate venue is in Quezon City, which could properly apply Philippine law.
Moreover, we find untenable petitioner's insistence that "[s]ince private
respondent instituted this suit, she has the burden of pleading and proving the
applicable Saudi law on the matter." 64As aptly said by private respondent, she
has "no obligation to plead and prove the law of the Kingdom of Saudi Arabia
since her cause of action is based on Articles 19 and 21" of the Civil Code of the
Philippines. In her Amended Complaint and subsequent pleadings, she never
alleged that Saudi law should govern this case. 65 And as correctly held by the
respondent appellate court, "considering that it was the petitioner who was
invoking the applicability of the law of Saudi Arabia, then the burden was on it
[petitioner] to plead and to establish what the law of Saudi Arabia is". 66

Lastly, no error could be imputed to the respondent appellate court in upholding

the trial court's denial of defendant's (herein petitioner's) motion to dismiss the
case. Not only was jurisdiction in order and venue properly laid, but appeal after
trial was obviously available, and expeditious trial itself indicated by the nature
of the case at hand. Indubitably, the Philippines is the state intimately concerned
with the ultimate outcome of the case below, not just for the benefit of all the
litigants, but also for the vindication of the country's system of law and justice in
a transnational setting. With these guidelines in mind, the trial court must
proceed to try and adjudge the case in the light of relevant Philippine law, with
due consideration of the foreign element or elements involved. Nothing said
herein, of course, should be construed as prejudging the results of the case in any
manner whatsoever.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil

Case No. Q-93-18394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is
hereby REMANDED to Regional Trial Court of Quezon City, Branch 89 for
further proceedings.

SO ORDERED.