Conflicts of Law Cases

4S CONLICT OF LAWS DIGESTS
CHOICE OF FORUM
SWEET LINES INC. vs. TEVES
G.R. No. L-37750, May 19, 1978
Santos, J.
FACTS:
Private respondents Atty. Leovigildo Tandog and

Rogelio Tiro, a contractor by profession, bought tickets Nos.
0011736 and 011737 for Voyage 90 on December 31, 1971 at
the branch office of Sweet Lines, Inc., a shipping company
transporting inter-island passengers and cargoes, at Cagayan
de Oro City. Tandog and Tiro were to board petitioner's
vessel, M/S "Sweet Hope" bound for Tagbilaran City via the
port of Cebu. Upon learning that the vessel was not
proceeding to Bohol, since many passengers were bound for
Surigao, private respondents per advice, went to the branch
office for proper relocation to M/S "Sweet Town". Because the
said vessel was already filled to capacity, they were forced to
agree "to hide at the cargo section to avoid inspection of the
officers of the Philippine Coastguard." Private respondents
alleged that they were, during the trip," "exposed to the
scorching heat of the sun and the dust coming from the ship's
cargo of corn grits," and that the tickets they bought at
Cagayan de Oro City for Tagbilaran were not honored and
they were constrained to pay for other tickets.
In view thereof, private respondents sued
petitioner for damages and for breach of contract of carriage
in the alleged sum of P10,000.00 before respondents Court of
First Instance of Misamis Oriental. Petitioner moved to
dismiss the complaint on the ground of improper venue. The
motion was premised on Condition No. 14 at the back of the
tickets, which reads:
14. It is hereby agreed and understood that
any and all actions arising out of the
conditions and provisions of this ticket,
irrespective of where it is issued, shall be
filed in the competent courts in the City of
Cebu.
Said motion, however, was denied by the trial court. Sweet
Lines filed a motion for reconsideration but to no avail.
Hence, the petition.
ISSUE:
Is Condition No. 14 printed at the back of the

Sweet Lines passage tickets, limiting the venue of actions
arising from the contract of carriage to the Court of First
Instance of Cebu, valid and enforceable?
HELD:
No. Considered in the light of the foregoing
norms and in the context of circumstances prevailing in the
inter-island shipping industry in the country today, We find
and hold that Condition No. 14 printed at the back of the
passage tickets should be held as void and unenforceable for
the following reasons: first, under circumstances obligation
in the inter-island shipping industry, it is not just and fair to
bind passengers to the terms of the conditions printed at the
back of the passage tickets, on which Condition No. 14 is
printed in fine letters; and second, Condition No. 14 subverts
the public policy on transfer of venue of proceedings of this
nature, since the same will prejudice rights and interests of
innumerable passengers in different parts of the country who,
under Condition No. 14, will have to file suits against
petitioner only in the City of Cebu.
1. It is a matter of public knowledge, of which We can take
judicial notice, that there is a dearth of and acute shortage in
inter- island vessels plying between the country's several
islands, and the facilities they offer leave much to be desired.
Thus, even under ordinary circumstances, the piers are
congested with passengers and their cargo waiting to be
transported. The conditions are even worse at peak and/or
the rainy seasons, when Passengers literally scramble to
whatever accommodations may be availed of, even through
circuitous routes, and/or at the risk of their safety their
immediate concern, for the moment, being to be able to board
vessels with the hope of reaching their destinations. The
schedules are as often as not if not more so delayed or
altered. This was precisely the experience of private
respondents when they were relocated to M/S "Sweet Town"
from M/S "Sweet Hope" and then any to the scorching heat of
the sun and the dust coming from the ship's cargo of corn
grits, " because even the latter was filled to capacity.
Under these circumstances, it is hardly just and proper to
expect the passengers to examine their tickets received from
crowded/congested counters, more often than not during
rush hours, for conditions that may be printed much charge
them with having consented to the conditions, so printed,
especially if there are a number of such conditions m fine
print, as in this case.
Again, it should be noted that Condition No. 14 was prepared
solely at the ms of the petitioner, respondents had no say in
its preparation. Neither did the latter have the opportunity to
take them into account prior to the purpose chase of their
tickets. For, unlike the small print provisions of contracts
the common example of contracts of adherence which are
entered into by the insured in his awareness of said
conditions, since the insured is afforded the op to and co the
same, passengers of inter-island do not have the same chance,
since their alleged adhesion is presumed only from the fact

that they purpose chased the tickets.
It should also be stressed that slapping companies are
franchise holders of certificates of public convenience and
therefore, posses a virtual monopoly over the business of
transporting passengers between the ports covered by their
franchise. This being so, shipping companies, like petitioner,
engaged in inter-island shipping, have a virtual monopoly of
the business of transporting passengers and may thus dictate
their terms of passage, leaving passengers with no choice but
to buy their tickets and avail of their vessels and facilities.
Finally, judicial notice may be taken of the fact that the bulk
of those who board these inter-island vested come from the
low-income groups and are less literate, and who have little or
no choice but to avail of petitioner's vessels.
2. Condition No. 14 is subversive of public policy on transfers
of venue of actions. For, although venue may be changed or
transferred from one province to another by agreement of the
parties in writing t to Rule 4, Section 3, of the Rules of Court,
such an agreement will not be held valid where it practically
negates the action of the claimants, such as the private
respondents herein. The philosophy underlying the provisions
on transfer of venue of actions is the convenience of the
plaintiffs as well as his witnesses and to promote the ends of
justice. Considering the expense and trouble a passenger
residing outside of Cebu City would incur to prosecute a claim
in the City of Cebu, he would most probably decide not to file
the action at all. The condition will thus defeat, instead of
enhance, the ends of justice. Upon the other hand, petitioner
has branches or offices in the respective ports of call of its
vessels and can afford to litigate in any of these places. Hence,
the filing of the suit in the CFI of Misamis Oriental, as was
done in the instant case, will not cause inconvenience to,
much less prejudice, petitioner.
HONGKONG AND SHANGHAI BANKING
CORPORATION vs. JACK ROBERT SHERMAN,
DEODATO RELOJ AND THE INTERMEDIATE
APPELLATE COURT,.
G.R. No. 72494. August 11, 1989.]MEDIALDEA, J
FACTS:
This is a petition for review on certiorari of the decision of the
Intermediate Appellate Court dated August 2, 1985, which
reversed the order of the Regional Trial Court dated February
28, 1985 denying the Motion to Dismiss filed by private
respondents Jack Robert Sherman and Deodato Reloj.

2
A complaint for collection of a sum of money was filed by

petitioner Hongkong and Shanghai Banking Corporation
against private respondents Jack Robert Sherman and
Deodato Reloj, before the Regional Trial Court of Quezon
City, Branch 84.
It appears that sometime in 1981, Eastern Book Supply
Service PTE, Ltd., a company incorporated in Singapore
applied with, and was granted by, the' Singapore branch of
petitioner BANK an overdraft facility in the maximum
amount of Singapore dollars 200,000.00 (which amount was
subsequently increased to Singapore dollar 375,000.00) with
interest at 3% over petitioner BANK's prime rate, payable
monthly, on amounts due under said overdraft facility; as a
security for the repayment by the COMPANY of sum
advanced by petitioner BANK to it through the aforesaid
overdraft facility, on October 7, 1982, both private
respondents and a certain Robin de Clive Lowe, all of whom
were directors of the COMPANY at such time, executed a
Joint and Several Guarantee in favor of petitioner BANK
whereby private respondents and Lowe agreed to pay, jointly
and severally, on demand all sums owed by the COMPANY to
petitioner BANK under the a forestated overdraft facility.
The Joint and Several Guarantee provides, inter alia, that:
"This guarantee and all rights, obligations and liabilities
arising hereunder shall be construed and determined under
and may be enforced in accordance with the laws of the
Republic of Singapore. We hereby agree that the Courts of
Singapore shall have jurisdiction overall disputes arising
under this guarantee . . ."
The COMPANY failed to pay its obligation. Thus, petitioner
BANK demanded payment of the obligation from private
respondents, conformably with the provisions of the Joint and
Several Guarantee. Inasmuch as the private respondents still
failed to pay, petitioner BANK filed the abovementioned
complaint.
On December 14, 1984, private respondents filed a motion to
dismiss which was opposed by petitioner BANK. Acting on the
motion, the trial court issued an order dated February 28,
1985, which read as follows:
"In a Motion to Dismiss filed on December 14, 1984, the
defendants seek the dismissal of the complaint on two
grounds, namely:
"1.That the court has no jurisdiction over the subject matter of
the complaint; and
"2.That the court has no jurisdiction over the persons of the

defendants.
ISSUE:
Whether or not Philippine courts have jurisdiction over the
suit.
"In the light of the Opposition thereto filed by plaintiff, the

Court finds no merit in the motion.
"On the first ground, defendants claim that by virtue of the
provision in the Guarantee (the actionable document) which
reads
"This guarantee and all rights, obligations and liabilities
Republic of Singapore. We hereby agree that the courts in
Singapore shall have jurisdiction over all disputes arising
under this guarantee,'
the Court has no jurisdiction over the subject matter of the

case. The Court finds and concludes otherwise. There is
nothing in the Guarantee which says that the courts of
Singapore shall have jurisdiction to the exclusion of the courts
of other countries or nations. Also, it has long been
established in law and jurisprudence that jurisdiction of
courts is fixed by law; it cannot be conferred by the will,
submission or consent of the parties.
"On the second ground, it is asserted that defendant Robert

Sherman is not a citizen nor a resident of the Philippines. This
argument holds no water. Jurisdiction over the persons of
defendants is acquired by service of summons and copy of the
complaint on them. There has been a valid service of
summons on both defendants and in fact the same is admitted
when said defendants filed a 'Motion for Extension of Time to
File Responsive Pleading' on December 5, 1984.
"WHEREFORE, the Motion to Dismiss is hereby DENIED.

A motion for reconsideration of the said order was filed by
private a respondent which was, however, denied. Private
respondents then filed before the respondent Intermediate
Appellate Court a petition for prohibition with preliminary
injunction and/or prayer for a restraining order which was
granted on August 2, 1985. The motion for reconsideration
was denied, hence, the present petition.
HELD:
The decision of the respondent Court is hereby
REVERSED and the decision of the Regional Trial
Court is REINSTATED, with costs against private
respondents.
While it is true that "the transaction took place in
Singaporean setting" and that the Joint and Several
Guarantee contains a choice-of-forum clause, the very essence
of due process dictates that the stipulation that "[t]his
guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may
be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts in Singapore shall
have jurisdiction over all disputes arising under this
guarantee" be liberally construed. One basic principle
underlies all rules of jurisdiction in International Law: a State
does not have jurisdiction in the absence of some reasonable
basis for exercising it, whether the proceedings are in rem,
quasi in rem or in personam. To be reasonable, the
jurisdiction must be based on some minimum contacts that
will not offend traditional notions of fair play and substantial
justice. Indeed, as pointed-out by petitioner BANK at the
outset, the instant case presents a very odd situation. In the
ordinary habits of life, anyone would be disinclined to litigate
before a foreign tribunal, with more reason as a defendant.
However, in this case, private respondents are Philippine
residents (a fact which was not disputed by them) who would
rather face a complaint against them before a foreign court
and in the process incur considerable expenses, not to
mention inconvenience, than to have a Philippine court try
and resolve the case. Private respondents' stance is hardly
comprehensible, unless their ultimate intent is to evade, or at
least delay, the payment of a just obligation.
The defense of private respondents that the complaint should
have been filed in Singapore is based merely on technicality.
They did not even claim, much less prove, that the filing of the
action here will cause them any unnecessary trouble, damage,
or expense. On the other hand, there is no showing that
petitioner BANK filed the action here just to harass private
respondents.
In the case of Polytrade Corporation vs. Blanco, G.R. No. L27033, October 31, 1969, 30 SCRA 187, it was ruled:

3
". . . An accurate reading, however, of the stipulation, "The

parties agree to sue and be sued in the Courts of Manila,' does
not preclude the filing of suits in the residence of plaintiff or
defendant. The plain meaning is that the parties merely
consented to be sued in Manila. Qualifying or restrictive
words which would indicate that Manila and Manila alone is
the venue are totally absent therefrom. We cannot read into
that clause that plaintiff and defendant bound themselves to
file suits with respect to the last two transactions in question
only or exclusively in Manila. For, that agreement did not
change or transfer venue. It simply is permissive. The parties
solely agreed to add the courts of Manila as tribunals to which
they may resort. They did not waive their right to pursue
remedy in the courts specifically mentioned in Section 2(b) of
Rule 4. Renuntiatio non praesumitur."
This ruling was reiterated in the case of Neville Y. Lamis
Ents., et al. v. Lagamon, etc., et al., G.R. No. 57250, October
30, 1981, 108 SCRA 740, where the stipulation was "(i)n case
of litigation, jurisdiction shall be vested in the Court of Davao
City." We held:
"Anent the claim that Davao City had been stipulated as the
venue, suffice it to say that a stipulation as to venue does not
preclude the filing of suits in the residence of plaintiff or
defendant under Section 2 (b), Rule 4, Rules of Court, in the
absence of qualifying or restrictive word a in the agreement
which would indicate that the place named is the only venue
agreed upon by the parties."
Applying the foregoing to the case at bar, the parties did not
thereby stipulate that only the courts of Singapore, to the
exclusion of all the rest, has jurisdiction. Neither did the
clause in question operate to divest Philippine courts of
jurisdiction, In International Law, jurisdiction is often
defined as the right of a State to exercise authority over
persons and things within its boundaries subject to certain
exceptions. Thus, a State does not assume jurisdiction over
travelling
sovereigns,
ambassadors
and
diplomatic
representatives of other States, and foreign military units
stationed in or marching through State territory with the
permission of the latter's authorities. This authority, which
finds its source in the concept of sovereignty, is exclusive
within and throughout the domain of the State. A State is
competent to take hold of any judicial matter it sees fit by
making its courts and agencies assume jurisdiction over all
kinds of cases brought before them.
As regards the issue on improper venue, petitioner BANK
avers that the objection to improper venue has been waived.
However, We agree with the ruling of the respondent Court
that:
"While in the main, the motion to dismiss fails to categorically

use with exactitude the words 'improper venue' it can be
perceived from the general thrust and context of the motion
that what is meant is improper venue. The use of the word
'jurisdiction' was merely an attempt to copy-cat the same
word employed in the guarantee agreement but conveys the
concept of `venue.' Brushing aside all technicalities, it would
appear that jurisdiction was used loosely as to be synonymous
with venue. It is in this spirit that this Court must view the
motion to dismiss. . . .".
At any rate, this issue is now of no moment because We hold
that venue here was properly laid for the same reasons
discussed above.
The respondent Court likewise ruled that (pp. 36-37, Rollo):
" . . .In a convict problem, a court will simply refuse to
entertain the case if it is not authorized by law to exercise
jurisdiction. And even if it is so authorized, it may still refuse
to entertain the case by applying the principle of forum non
conveniens. . . ."
However, whether a suit should be entertained or dismissed
on the basis of the principle of forum non conveniens
depends largely upon the facts of the particular case and is
addressed to the, sound discretion of the trial court. Thus, the
respondent Court should not have relied on such principle.
Although the Joint and Several Guarantee prepared by
petitioner BANK is a contract of adhesion and that
consequently, it cannot be permitted to take a stand contrary
to the stipulations of the contract, substantial bases exist for
petitioner BANK's choice of forum, as discussed earlier.
Bengzon, J.
FACTS:
Amos G. Bellis, born in Texas, was "a citizen of the State of
Texas and of the United States." By his first wife, Mary E.
Mallen, whom he divorced, he had five legitimate children
and by his second wife, Violet Kennedy, who survived him, he
had three legitimate children and finally, he had three
illegitimate children. On August 5, 1952, Amos
G. Bellis executed a will in the Philippines, in which he
directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be
divided, in trust, in the following order and manner: (a)
$240,000.00 to his first wife, Mary E. Mallen; (b)
P120,000.00 to his three illegitimate children, Amos Bellis,
Jr., Maria Cristina Bellis, and Miriam Palma Bellis, or
P40,000.00 each and (c) after the foregoing two items have
been satisfied, the remainder shall go to his seven surviving
children by his first and second wives, namely: Edward
A. Bellis,
Henry
A. Bellis,
Alexander Bellis,
and
Anna Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and
Dorothy E. Bellis, in equal shares.
Subsequently, or on July 8, 1958, Amos G. Bellis died, a
resident of San Antonio, Texas, U.S.A.
ISSUE:
Whether or not it is the Philippine law that will govern the
disposition of the estate.
Lastly, private respondents allege that neither the petitioner

based at Hongkong nor its Philippine branch is involved in
the transaction sued upon. This is a vain attempt on their part
to further thwart the proceedings below inasmuch as wellknown is the rule that a defendant cannot plead any defense
that has not been interposed in the court below.
Whether or not the children are entitled to their legitimes.
Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur.
The RTC ruled that that the Texas Law will govern applying
Article 16 of the Civil Code and under that law there can be no
legitimes for under such law there are no legitimes. The
Supreme Court also held that a provision in a foreigner's will
to the effect that his properties shall be distributed in
accordance with Philippine law and not with his national law,
is illegal and void for his national law cannot be ignored in
regard to those matters that Article 10 now Article 16 of
the Civil Code states said national law should govern. The
parties admit that the decedent, Amos G.Bellis, was a citizen
of the State of Texas, U.S.A., and that under the laws of Texas,
CHOICE OF LAW
BELLIS vs. BELLIS
G.R. No.: 23678
June 6, 1967
HELD:

4
there are no forced heirs or legitimates. Accordingly, since the

intrinsic validity of the provision of the will and the amount of
successional rights are to be determined under Texas law, the
Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.
No, since it is the Texas Law that will apply, there can be no
legitimes for under such law there are no legitimes.
TAYAG RENATO vs. BENGUET

CONSOLIDATION, INC
G.R. no. L-23145, November 29, 1990
FACTS:
Idonah Slade Perkins, an American citizen who died in New
York City, left among others, two stock certificates issued by
Benguet Consolidated, a corporation domiciled in the
Philippines. As ancillary administrator of Perkins estate in
the Philippines, Tayag now wants to take possession of
these stock certificates but County Trust Company of New
York, the domiciliary administrator, refused to part with
them. Thus, the probate court of the Philippines was forced to
issue an order declaring the stock certificates as lost and
ordering Benguet Consolidated to issue new stock
certificatesrepresenting
Perkins
shares.
Benguet
Consolidated appealed the order, arguing that the stock
certificates are not lost as they are in existence and currently
in the possession of County Trust Company of New York.
ISSUE:
Whether or not the order of the lower court is proper
administration of an estate. When a person dies intestate

owning property in the country of his domicile as well as in
a foreign country, administration is had in both countries.
That which is granted in the jurisdiction of decedent's last
domicile is termed the principal administration, while any
other administration is termed the ancillary administration.
The reason for the latter is because a grant of administration
does not ex proprio vigore have any effect beyond the limits of
the country in which it is granted. Hence, an administrator
appointed in a foreign state has no authority in the
[Philippines]. The ancillary administration is proper,
whenever a person dies, leaving in a country other than that
of his last domicile, property to be administered in the nature
of assets of the deceased liable for his individual debts or to be
distributed
among
his
heirs."
Probate court has authority to issue the order enforcing the
ancillary administrators right to the stock certificates when
the actual situs of the shares of stocks is in the Philippines.
It would follow then that the authority of the probate court to
require that ancillary administrator's right to "the stock
certificates covering the 33,002 shares ... standing in her
name in the books of [appellant] Benguet Consolidated,
Inc...." be respected is equally beyond question. For appellant
is a Philippine corporation owing full allegiance and subject to
the unrestricted jurisdiction of local courts. Its shares of
stock cannot therefore be considered in any wise as immune
from
lawful
court
orders.
Our holding in Wells Fargo Bank and Union v. Collector of
Internal Revenue finds application. "In the instant case, the
actual situs of the shares of stock is in the Philippines, the
corporation being domiciled [here]." To the force of the above
undeniable proposition, not even appellant is insensible. It
does not dispute it. Nor could it successfully do so even if it
were so minded.
PAKISTAN INTERNATIONAL AIRLINES vs.

OPLE
190 SCRA 1990
HELD:
The
FACTS:
appeal
lacks merit.
Tayag, as ancillary administrator, has the power to gain

control and possession of all assets of the decedent within the
jurisdiction
of
the
Philippines
It is to be noted that the scope of the power of the ancillary
administrator was, in an earlier case, set forth by Justice
Malcolm. Thus: "It is often necessary to have more than one
Dec. 2, 1978: PIA, a foreign corp. licensed to do business in

the Philippines, executed in Manila 2 separate contracts of
employments with Farrales and Mamasig. Terms of the
contract are as follows:
Term #5 Duration of Employment & Penalty:

agreement is for a period of 3yrs. but can be
extended by mutual consent of the parties
Term #6 Termination: PIA has right to terminate

the agreement by giving the Employee notice in
writing in advance 1 month before the intended

termination or in lieu thereof, by paying
the employee wages equivalent to 1 months
salary.
Term
#10 Applicable
Law: Agreement will
be construed & governed under & by the law
of Pakistan and only the courts of Karachi,
Pakistan shall have jurisdiction to consider any
matter arising out of or under agreement.
Farrales and Mamasig were hired as flight attendants
after undergoing training. Base station was in Manila.
Aug. 2, 1980: roughly 1 yr & 4mos prior to the expiration
of the contracts, PIA sent separate letters to the 2 employees
informing them that they will be terminated effective Sept.
1, 1980.
Employees: filed a complaint for illegal dismissal & nonpayment of company benefits & bonuses with the Ministry of
Labor & Employment (MOLE).
PIA submitted a position paper claiming the employees were
habitual absentees & they had the habit of bringing in from
abroad large quantities of personal effects and the company
has been warned by custom officials to advise employees to
discontinue that practice. PIA likewise invoked the contract
of employment.
MOLE Regional director Estrella made the following findings:
Employees should be reinstated w/full backwages

or in the alternative, amounts equivalent to
their salaries for the remaining period of the 3yr employment agreement should be paid
The company should pay Mamasig an amount

equivalent to the value of a round trip ticket
Manila-USA-Manila
PIA should pay each employee a bonus equivalent

to their one-month salary.
3-yr period null & void since it violates the Labor

Code rule on regular &casual employment.
Employees were regular employees after they had
rendered more than 1 yr of continued service.
Dismissal was illegal because it was carried out

w/o the requisite clearance from the MOLE.
MOLE Deputy Minister Leogardo affirmed Estrellas decision
except the alternative in finding #1.
ISSUE:
WON MOLE had jurisdiction over the case.
WON only Pakistans laws & courts should govern.

5
HELD:
YES. Labor Code Art. 278: termination of the services of
employees w/at least 1yr of service cant be done w/o prior
clearance from the DOLE.
Rule XIV, Book No. 5 of the Labor Code Implementing Rules
& Regulations (IRR) provides that if the termination was done
w/o the necessary clearance, the REGIONAL DIRECTOR was
authorized to order the reinstatement & payment of
backwages. This is likewise provided for in Policy Instruction
No. 14 issued by the Sec. of Labor.
NO. Philippine Courts & administrative agencies are the
proper forums for the resolution of the contractual dispute.
The relationship between PIA & its employees in this case is
very much affected w/public interest that the applicable RP
laws cant be rendered illusory by the parties agreeing that
some other law should govern their relationship.
Contract was executed and performed (partially) in RP.
Employees are Philippine citizens & residents and were based
in the Philippines.
PIA, although a foreign corp., is licensed to do business in the
RP.
PIA did not plead & prove the applicable Pakistani laws on the
matter. Thus, its presumed that these laws are the same as
the RP laws.
Holding:
Petition dismissed for lack of merit. MOLE order affirmed
&modified.
Employees were illegally dismissed.
MOLE did not commit any gadalej.
Employees are entitled to 3 yrs. backwages w/o qualification
or deduction.
Petitioners should be reinstated. Should reinstatement not be
feasible in view of the length of time w/c has gone by, PIA
should pay separation pays to employees amounting to
1 months salary for ever year of service rendered by them
including the 3 yrs service putatively rendered.
ZALAMEA vs. CA and TRANSWORLD

AIRLINES
November 18, 1993
QUIASON, J.
FACTS:
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea,
and their daughter, Liana Zalamea, purchased three (3)
airline tickets from the Manila agent of respondent
TransWorld Airlines, Inc. for a flight from New York to Los
Angeles on June 6, 1984. The tickets of petitioners-spouses
were purchased at a discount of 75% while that of their
daughter was a full fare ticket. All three tickets represented
confirmed reservations.
While in New York, on June 4, 1984, petitioners received
notice of the reconfirmation of their reservations for said
flight. On the appointed date, however, petitioners checked in
at 10:00 a.m., an hour earlier than the scheduled flight at
11:00 a.m. but were placed on the wait-list because the
number of passengers who had checked in before them had
already taken all the seats available on the flight. Mr.
Zalamea was able to fly to Los Angeles while the 2 other
Zalameas were not. Full fare tickets passengers were given
priority. It was only later when he discovered that he was
holding his daughters full-fare ticket.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and
her daughter, could not be accommodated because it was fully
booked. Thus, they were constrained to book in another flight
and purchased two tickets from American Airlines at a cost of
Nine Hundred Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners tiled an
action for damages based on breach of contract of air carriage
before the Regional Trial Court of Makati.
ISSUE:
Whether or not the U.S. Code of Federal Regulations is
applicable to the case at bar.
HELD:
Even if the claimed U.S. Code of Federal Regulations does
exist, the same is not applicable to the case at bar in
accordance with the principle of lex loci contractus which
requires that the law of the place where the airline ticket was
issued should be applied by the court where the passengers
are residents and nationals of the forum and the ticket is
issued in such State by the defendant airline. Since the tickets
were sold and issued in the Philippines, the applicable law in
this case would be Philippine law.
CADALIN vs. POEA ADMINISTRATION

GR No. 104776, December 5,1994.
FACTS:
This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS
in the Supreme Court for Certiorari.
On June 6, 1984, Cadalin, Amul and Evangelista, in their own
behalf and on behalf of 728 other OCWs instituted a class suit
by filing an Amended Complaint with the POEA for money
claims arising from their recruitment by ASIA
INTERNATIONAL BUILDERS CORPORATION (AIBC) and
employment by BROWN & ROOT INTERNATIONAL, INC
(BRI) which is a foreign corporation with headquarters in
Houston, Texas, and is engaged in construction; while AIBC is
a domestic corporation licensed as a service contractor to
recruit, mobilize and deploy Filipino workers for overseas
employment on behalf of its foreign principals.
The amended complaint sought the payment of the unexpired
portion of the employment contracts, which was terminated
prematurely, and secondarily, the payment of the interest of
the earnings of the Travel and Reserved Fund; interest on all
the unpaid benefits; area wage and salary differential pay;
fringe benefits; reimbursement of SSS and premium not
remitted to the SSS; refund of withholding tax not remitted to
the BIR; penalties for committing prohibited practices; as
well as the suspension of the license of AIBC and the
accreditation of BRII
On October 2, 1984, the POEA Administrator denied the
Motion to Strike Out of the Records filed by AIBC but
required the claimants to correct the deficiencies in the
complaint pointed out.
AIB and BRII kept on filing Motion for Extension of Time to
file their answer. The POEA kept on granting such motions.
On November 14, 1984, claimants filed an opposition to the
motions for extension of time and asked that AIBC and BRII
declared in default for failure to file their answers.
On December 27, 1984, the POEA Administrator issued an
order directing AIBC and BRII to file their answers within ten
days from receipt of the order.
On June 19, 1987, AIBC finally submitted its answer to the
complaint. At the same hearing, the parties were given a
period of 15 days from said date within which to submit their
respective position papers. On February 24, 1988, AIBC and
BRII submitted position paper. On October 27, 1988, AIBC
and BRII filed a Consolidated Reply, POEA Administrator
rendered his decision which awarded the amount of $824,
652.44 in favor of only 324 complainants. Claimants
submitted their Appeal Memorandum For Partial Appeal
from the decision of the POEA. AIBC also filed its MR and/or
appeal in addition to the Notice of Appeal filed earlier.
NLRC promulgated its Resolution, modifying the decision of
the POEA. The resolution removed some of the benefits
awarded in favor of the claimants. NLRC denied all the MR.

6
Hence, these petitions filed by the claimants and by AlBC and

BRII.
The case rooted from the Labor Law enacted by Bahrain
where most of the complainants were deployed. His Majesty
Ise Bin Selman Al Kaifa, Amir of Bahrain, issued his Amiri
Decree No. 23 on June 16, 1176, otherwise known re the Labor
Law for the Private Sector. Some of the provision of Amiri
Decree No. 23 that are relevant to the claims of the
complainants-appellants are as follows:
Art. 79: x x x A worker shall receive payment for each extra
hour equivalent to his wage entitlement increased by a
minimum of twenty-rive per centurn thereof for hours worked
during the day; and by a minimum off fifty per centurn
thereof for hours worked during the night which shall be
deemed to being from seven oclock in the evening until seven
oclock in the morning .
Art. 80: Friday shall be deemed to be a weekly day of rest on
full
pay.
If employee worked, 150% of his normal wage shall be paid to
him x x x.
Art. 81; x x x When conditions of work require the worker to
work on any official holiday, he shall be paid an additional
sum equivalent to 150% of his normal wage.
Art. 84: Every worker who has completed one years
continuous service with his employer shall be entitled to Laos
on full pay for a period of not less than 21 days for each year
increased to a period not less than 28 days after five
continuous years of service.
A worker shall be entitled to such leave upon a quantum
meruit in respect of the proportion of his service in that year.
Art. 107: A contract of employment made for a period of
indefinite duration may be terminated by either party thereto
after giving the other party prior notice before such
termination, in writing, in respect of monthly paid workers
and fifteen days notice in respect of other workers. The party
terminating a contract without the required notice shall pay to
the other party compensation equivalent to the amount of
wages payable to the worker for the period of such notice or
the unexpired portion thereof.
Art. Ill: x x x the employer concerned shall pay to such
worker, upon termination of employment, a leaving
indemnity for the period of his employment calculated on the
basis of fifteen days wages for each year of the first three
years of service and of one months wages for each year of
service thereafter. Such worker shall be entitled to payment of
leaving indemnity upon a quantum meruit in proportion to
the period of his service completed within a year.
ISSUE:
1. Whether or not the foreign law should govern or the
contract of the parties
2. Whether or not the Bahrain Law should apply in the case.
3. Whether or not the instant cases qualify as a class suit
HELD:
1. NLRC set aside Section 1, Rule 129 of the 1989 Revised
Rules on Evidence governing the pleading and proof of a
foreign law and admitted in evidence a simple copy of the
Bahrains Amiri Decree No. 23 of 1976 (Labor Law for the
Private Sector).
NLRC applied the Amiri Deere, No. 23 of 1976, which
provides for greater benefits than those stipulated in the
overseas-employment contracts of the claimants. It was of the
belief that where the laws of the host country are more
favorable and beneficial to the workers, then the laws of the
host country shall form part of the overseas employment
contract. It approved the observation of the POEA
Administrator that in labor proceedings, all doubts in the
implementation of the provisions of the Labor Code and its
implementing regulations shall be resolved in favor of labor.
The overseas-employment contracts, which were prepared by
AIBC and BRII themselves, provided that the laws of the host
country became applicable to said contracts if they offer terms
and conditions more favorable than those stipulated therein.
However there was a part of the employment contract which
provides that the compensation of the employee may be
adjusted downward so that the total computation plus the
non-waivable benefits shall be equivalent to the
compensation therein agree, another part of the same
provision categorically states that total remuneration and
benefits do not fall below that of the host country regulation
and custom.
Any ambiguity in the overseas-employment contracts should
be interpreted against AIBC and BRII, the parties that drafted
it. Article 1377 of the Civil Code of the Philippines provides:
The interpretation of obscure words or stipulations in a
contract shall not favor the party who caused the obscurity.
Said rule of interpretation is applicable to contracts of
adhesion where there is already a prepared form containing
the stipulations of the employment contract and the
employees merely take it or leave it. The presumption is that
there was an imposition by one party against the other and
that the employees signed the contracts out of necessity that
reduced
their
bargaining
power.
We read the overseas employment contracts in question as
adopting the provisions of the Amiri Decree No. 23 of 1976 as
part and parcel thereof. The parties to a contract may select
the law by which it is to be governed. In such a case, the
foreign law is adopted as a system to regulate the relations
of the parties, including questions of their capacity to enter
into the contract, the formalities to be observed by them,
matters of performance, and so forth. Instead of adopting the
entire mass of the foreign law, the parties may just agree that
specific provisions of a foreign statute shall be deemed
incorporated into their contract as a set of terms. By such
reference to the provisions of the foreign law, the contract

does not become a foreign contract to be governed by the
foreign law. The said law does not operate as a statute but as a
set of contractual terms deemed written in the contract.
A basic policy of contract is to protect the expectation of the
parties. Such party expectation is protected by giving effect to
the parties own choice of the applicable law. The choice of
law must, however, bear some relationship the parties or their
transaction. There is no question that the contracts sought to
be enforced by claimants have a direct connection with the
Bahrain law because the services were rendered in that
country.
2. NLRC ruled that the prescriptive period for the filing of the
claims of the complainants was 3 years, as provided in Article
291 of the Labor Code of the Philippines, and not ten years as
provided in Article 1144 of the Civil Code of the Philippines
nor one year as provided in the Amiri Decree No. 23 of 1976.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not
actionable after the lapse of one year from the date of the
expiry of the Contract.
As a general rule, a foreign procedural law will not be applied
in the forum (local court), Procedural matters, such as service
of process, joinder of actions, period and requisites for appeal,
and so forth, are governed by the laws of the forum. This is
true even if the action is based upon a foreign substantive law.
A law on prescription of actions is sui generis in Conflict of
Laws in the sense that it may be viewed either as procedural
or substantive, depending on the characterization given such
a law. In Bournias v. Atlantic Maritime Company (220 F. 2d.
152, 2d Cir. [1955]), where the issue was the applicability of
the Panama Labor Code in a case filed in the State of New
York for claims arising from said Code, the claims would have
prescribed under the Panamanian Law but not under the
Statute of Limitations of New York. The U.S. Circuit Court of
Appeals held that the Panamanian Law was procedural as it
was not specifically intended to be substantive, hence, the
prescriptive period provided in the law of the forum should
apply. The Court observed: . . . we are dealing with a statute
of limitations of a foreign country, and it is not clear on the
face of the statute that its purpose was to limit the
enforceability, outside as well as within the foreign country
concerned, of the substantive rights to which the statute
pertains. We think that as a yardstick for determining
whether that was the purpose, this test is the most satisfactory
one.
The Court further noted: Applying that test here it appears to
us that the libellant is entitled to succeed, for the respondents
have failed to satisfy us that the Panamanian period of
limitation in question was specifically aimed against the
particular rights which the libellant seeks to enforce. The

7
Panama Labor Code is a statute having broad objectives. The

American court applied the statute of limitations of New York,
instead of the Panamanian law, after finding that there was no
showing that the Panamanian law on prescription was
intended to be substantive. Being considered merely a
procedural law even in Panama, it has to give way to the law
of the forum (local Court) on prescription of actions.
However the characterization of a statute into a procedural or
substantive law becomes irrelevant when the country of the
forum (local Court) has a borrowing statute. Said statute
has the practical effect of treating the foreign statute of
limitation as one of substance. A borrowing statute directs
the state of the forum (local Court) to apply the foreign statute
of limitations to the pending claims based on a foreign law.
While there are several kinds of borrowing statutes, one
form provides that an action barred by the laws of the place
where it accrued will not be enforced in the forum even
though the local statute was not run against it.
Section 48 of Code of Civil Procedure is of this kind. It
provides: If by the laws of the state or country where the
cause of action arose, the action is barred, it is also barred in
the Philippine Islands.
Section 48 has not been repealed or amended by the Civil
Code of the Philippines. In the light of the 1987 Constitution,
however, Section 48 cannot be enforced ex proprio vigore
insofar as it ordains the application in this jurisdiction of
Section 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum (local Court) will not enforce any
foreign claim obnoxious to the forums public policy. To
enforce the one-year prescriptive period of the Amiri Decree
No. 23 of 1976 as regards the claims in question would
contravene the public policy on the protection to labor.
In the Declaration of Principles and State Policies, the 1987
Constitution emphasized that:The state shall promote social
justice in all phases of national development (Sec. 10).
The state affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare
(Sec. 18).
In Article XIII on Social Justice and Human Rights, the 1987
Constitution
provides:
Sec. 3. The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for
all.
Thus, the applicable law on prescription is the Philippine law.
3. NO. A class suit is proper where the subject matter of the
controversy is one of common or general interest to many and
the parties are so numerous that it is impracticable to bring
them all before the court. When all the claims are for benefits
granted under the Bahrain law many of the claimants worked
outside Bahrain. Some of the claimants were deployed in
Indonesia under different terms and condition of
employment.
Inasmuch as the First requirement of a class suit is not

present (common or general interest based on the Amiri
Decree of the State of Bahrain), it is only logical that only
those who worked in Bahrain shall be entitled to rile their
claims in a class suit.
While there are common defendants (AIBC and BRII) and the
nature of the claims is the same (for employees benefits),
there is no common question of law or fact. While some
claims are based on the Amiri Law of Bahrain, many of the
claimants never worked in that country, but were deployed
elsewhere. Thus, each claimant is interested only in his own
demand and not in the claims of the other employees of
defendants. A claimant has no concern in protecting the
interests of the other claimants as shown by the fact, that
hundreds of them have abandoned their co-claimants and
have entered into separate compromise settlements of their
respective claims. The claimants who worked in Bahrain
cannot be allowed to sue in a class suit in a judicial
proceeding.
WHEREFORE, all the three petitions are DISMISSED.
United Airlines vs. Court of Appeals

GR no. 124110, April 20, 2001
FACTS:
Private respondent Aniceto Fontanilla purchased from
petitioner United Airlines, through the Philippine Travel
Bureau in Manila three (3) "Visit the U.S.A." tickets, San
Francisco Washington Chicago Los Angeles. All flights
had been confirmed previously by United Airlines. The
Fontanillas proceeded to the United States as planned, where
they used the first coupon from San Francisco to Washington.
On April 24, 1989, Aniceto Fontanilla bought two (2)
additional coupons each for himself, his wife and his son from
petitioner at its office in Washington Dulles Airport. After
paying the penalty for rewriting their tickets, the Fontanillas
were issued tickets with corresponding boarding passes with
the words "CHECK-IN REQUIRED," for United Airlines
Flight No. 1108, set to leave from Los Angeles to San
Francisco at 10:30 a.m. on May 5, 1989. The cause of the
non-boarding of the Fontanillas on United Airlines Flight No.
1108 makes up the bone of contention of this controversy.
Private respondents version:
Aniceto Fontanilla, upon their arrival at the Los Angeles
Airport for their flight, proceeded to united Airlines counter
attended by an employee "Linda. She examined their tickets,
punched something into her computer and then told them

that boarding would be in fifteen minutes.When the flight was
called, the Fontanillas proceeded to the plane. To their
surprise, the stewardess at the gate did not allow them to
board the plane, as they had no assigned seat numbers. They
were then directed to go back to the "check-in" counter where
Linda subsequently informed them that the flight had been
overbooked and asked them to wait.
The Fontanillas tried to explain to Linda the special
circumstances of their visit. The Fontanillas then complained
to Linda, who in turn gave them an ugly stare and made
rude. Such rude statements were made in front of other
people in the airport causing the Fontanillas to suffer shame,
humiliation and embarrassment. After some time, Linda,
without any explanation, offered the Fontanillas $50.00 each.
She simply said "Take it or leave it." This, the Fontanillas
declined.The Fontanillas then proceeded to the United
Airlines customer service counter to plead their case. The
male employee at the counter reacted by shouting that he was
ready for it and left without saying anything. The Fontanillas
were not booked on the next flight, which departed for San
Francisco at 11:00 a.m. It was only at 12:00 noon that they
were able to leave Los Angeles on United Airlines Flight No.
803.
Petitioner United Airlines version:.
According to United Airlines, the Fontanillas did not initially
go to the check-in counter to get their seat assignments for
UA Flight 1108. They instead proceeded to join the queue
boarding the aircraft without first securing their seat
assignments as required in their ticket and boarding passes.
Having no seat assignments, the stewardess at the door of the
plane instructed them to go to the check-in counter. When the
Fontanillas proceeded to the check-in counter, Linda Allen,
informed them that the flight was overbooked. She booked
them on the next available flight and offered them denied
boarding compensation. Allen vehemently denies uttering the
derogatory and racist words attributed to her by the
Fontanillas.14
The incident prompted the Fontanillas to file Civil Case No.
89-4268 for damages before the Regional Trial Court of
Makati. After trial on the merits, the trial court rendered a
decision dismissing the complaint and counterclaim as it
appears that plaintiffs were not actuated by legal malice when
they filed the instant complaint.
On appeal, the Court of Appeals ruled in favor of the
Fontanillas. The appellate court found that there was an
admission on the part of United Airlines that the Fontanillas
did in fact observe the check-in requirement. It ruled further
that even assuming there was a failure to observe the check-in
requirement, United Airlines failed to comply with the
procedure laid down in cases where a passenger is denied

8
boarding. The appellate court likewise gave credence to the

claim of Aniceto Fontanilla that the employees of United
Airlines were discourteous and arbitrary and, worse,
discriminatory. In light of such treatment, the Fontanillas
were entitled to moral damages.
Notably, the appellate court relied on the Code of Federal
Regulation Part on Oversales which states:
250.6 Exceptions to eligibility for denied boarding
compensation.
A passenger denied board involuntarily from an oversold
flight shall not be eligible for denied board compensation if:
a
The passenger does not comply with
the carriers contract of carriage or
tariff provisions regarding ticketing,
reconfirmation,
check-in,
and
acceptability for transformation.
ISSUE:
Whether or not the appellate court erred in applying the laws
of the United States in the case at bar.
HELD:
The appellate court, however, erred in applying the laws of
the United States as, in the case at bar, Philippine law is the
applicable law. Although, the contract of carriage was to be
performed in the United States, the tickets were purchased
through petitioners agent in Manila. It is true that the tickets
were "rewritten" in Washington, D.C. however, such fact did
not change the nature of the original contract of carriage
entered into by the parties in Manila.
In the case of Zalanea vs. Court of Appeals, this Court applied
the doctrine of lex loci contractus. According to the doctrine,
as a general rule, the law of the place where a contract is made
or entered into governs with respect to its nature and validity,
obligation and interpretation. This has been said to be the
rule even though the place where the contract was made is
different from the place where it is to be performed, and
particularly so, if the place of the making and the place of
performance are the same. Hence, the court should apply the
law of the place where the airline ticket was issued, when the
passengers are residents and nationals of the forum and the
ticket is issued in such State by the defendant airline.
The law of the forum on the subject matter is Economic
Regulations No. 7 as amended by Boarding Priority and
Denied Board Compensation of the Civil Aeronautics Board
which provides that the check-in requirement be complied
with before a passenger may claim against a carrier for being
denied boarding:
Sec. 5. Amount of Denied Boarding Compensation Subject to
the exceptions provided hereinafter under Section 6, carriers
shall pay to passengers holding confirmed reserved space and

who have presented themselves at the proper place and time
and fully complied with the carriers check-in and
reconfirmation procedures and who are acceptable for
carriage under the Carriers tariff but who have been denied
boarding for lack of space, a compensation at the rate of: xxx
GRACE J. GARCIA v REDERICK A. RECIO

G.R. No. 138322 October 2, 2001
Procedural History
A divorce obtained abroad by an alien may be recognized in
our jurisdiction, provided such decree is valid according to the
national law of the foreigner. However, the divorce decree
and the governing personal law of the alien spouse who
obtained the divorce must be proven. Our courts do not take
judicial notice of foreign laws and judgments; hence, like any
other facts, both the divorce decree and the national law of
the alien must be alleged and proven according to our law on
evidence.
FACTS:
Rederick A. Recio, a Filipino, was married to Editha Samson,
an Australian Citizen, in Malabon, Rizal on March 1, 1987.
They lived as husband and wife in Australia. However, an
Australian family court issued purportedly a decree of
divorce, dissolving the marriage of Rederick and Editha on
May 18, 1989.
On January 12, 1994, Rederick married Grace J. Garcia where
it was solemnized at Our Lady of Perpetual Help Church,
Cabanatuan City. Since October 22, 1995, the couple lived
separately without prior judicial dissolution of their
marriage. As a matter of fact, while they were still in
Australia, their conjugal assets were divided on May 16, 1996,
in accordance with their Statutory Declarations secured in
Australia.
Grace filed a Complaint for Declaration of Nullity of Marriage
on the ground of bigamy on March 3, 1998, claiming that she
learned only in November 1997, Redericks marriage with
Editha Samson.
ISSUE:
Whether or not the decree of divorce submitted by Rederick
Recio is admissible as evidence to prove his legal capacity to
marry petitioner and absolved him of bigamy.
HELD:
The nullity of Redericks marriage with Editha as shown by
the divorce decree issued was valid and recognized in the
Philippines since the respondent is a naturalized Australian.
However, there is absolutely no evidence that proves

respondents legal capacity to marry petitioner though the
former presented a divorce decree. The said decree, being a
foreign document was inadmissible to court as evidence
primarily because it was not authenticated by the consul/
embassy of the country where it will be used.
Under Sections 24 and 25 of Rule 132, a writing or document
may be proven as a public or official record of a foreign
country by either:
(1) an official publication or
(2) a copy thereof attested by the officer having legal custody
of the document. If the record is not kept in the Philippines,
such copy must be:
(a) accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign service
stationed in the foreign country in which the record is kept
and
(b) authenticated by the seal of his office.
Thus, the Supreme Court remands the case to the Regional
Trial Court of Cabanatuan City to receive or trial evidence that
will conclusively prove respondents legal capacity to marry
petitioner and thus free him on the ground of bigamy.
ASIAVEST MERCHANT BANKERS (M)

BERHAD vs. COURT OF APPEALS and
PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION
G.R. No. 110263. July 20, 2001
DE LEON, JR., J.:
FACTS:
Sometime in 1983, petitioner initiated a suit for collection
against private respondent, then known as Construction and
Development Corporation of the Philippines (CDCP), before
the High Court of Malaya in Kuala Lumpur entitled "Asiavest
Merchant Bankers (M) Berhad v. Asiavest CDCP Sdn. Bhd.
and Construction and Development Corporation of the
Philippines.
Petitioner sought to recover the indemnity of the performance
bond it had put up in favor of private respondent to guarantee
the completion of the Felda Project and the nonpayment of
the loan it extended to Asiavest-CDCP Sdn. Bhd. for the
completion of Paloh Hanai and Kuantan By Pass Project.
Following unsuccessful attempts to secure payment from
private respondent under the judgment, petitioner initiated
on September 5, 1988 the complaint before Regional Trial
Court of Pasig, Metro Manila, to enforce the judgment of the
High Court of Malaya.
CDCP contended that judgment of the High Court of Malaya
should be denied recognition or enforcement since on in face,

9
it is tainted with want of jurisdiction, want of notice to private

respondent, collusion and/or fraud, and there is a clear
mistake of law or fact
ISSUES:
1. Whether or not enforcement of said judgment be allowed
considering that the procedure followed by the Malaysian
Court is allegedly different from our procedural laws?
2. Whether or not enforcement of said judgment be allowed
considering that the judgment by the Malayan Court lacks
statement of facts and laws upon which the judgment was
based?
HELD:
The enforcement should be granted.
Generally, in the absence of a special compact, no sovereign is
bound to give effect within its dominion to a judgment
rendered by a tribunal of another country; however, the rules
of comity, utility and convenience of nations have established
a usage among civilized states by which final judgments of
foreign courts of competent jurisdiction are reciprocally
respected and rendered efficacious under certain conditions
that may vary in different countries.
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 the 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.
A foreign judgment is presumed to be valid and binding in the
country from which it comes, until a contrary showing, on the
basis of a presumption of regularity of proceedings and the
giving of due notice in the foreign forum Under Section 50(b),
Rule 39 of the Revised Rules of Court, which was the
governing law at the time the instant case was decided by the
trial court and respondent appellate court, a judgment,
against a person, of a tribunal of a foreign country having
jurisdiction to pronounce the same is presumptive evidence of
a right as between the parties and their successors in interest
by a subsequent title. The judgment may, however, be assailed
by evidence of want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact. In
addition, under Section 3(n), Rule 131 of the Revised Rules of
Court, a court, whether in the Philippines or elsewhere, enjoys
the presumption that it was acting in the lawful exercise of its

jurisdiction. Hence, once the authenticity of the foreign
judgment is proved, the party attacking a foreign judgment, is
tasked with the burden of overcoming its presumptive
validity.
In the instant case, petitioner sufficiently established the
existence of the money judgment of the High Court of Malaya
by the evidence it offered.
Having thus proven, through the foregoing evidence, the
existence and authenticity of the foreign judgment, said
foreign judgment enjoys presumptive validity and the burden
then fell upon the party who disputes its validity, herein
private respondent, to prove otherwise.
1. Private respondent relied solely on the testimony of its two
(2) witnesses, namely, Mr. Alfredo. Calupitan, an accountant
of private respondent, and Virginia Abelardo, Executive
Secretary and a member of the staff of the Corporate
Secretariat Section of the Corporate Legal Division, of private
respondent, both of whom failed to shed light and amplify its
defense or claim for non-enforcement of the foreign judgment
against it.
Mr. Calupitan's testimony centered on the following: that
from January to December 1982 he was assigned in Malaysia
as Project Comptroller of the Pahang Project Package A and B
for road construction under the joint venture of private
respondent and Asiavest Holdings; that under the joint
venture, Asiavest Holdings would handle the financial aspect
of the project, which is fifty-one percent (51 %) while private
respondent would handle the technical aspect of the project,
or forty-nine percent (49%); and, that Cora Deala was not
authorized to receive summons for and in behalf of the private
respondent. Ms. Abelardo's testimony, on the other hand,
focused on the following: that there was no board resolution
authorizing Allen and Gledhill to admit all the claims of
petitioner in the suit brought before the High Court of
Malaya, though on cross-examination she admitted that Allen
and Gledhill were the retained lawyers of private respondent
in Malaysia.
The foregoing reasons or grounds relied upon by private
respondent in preventing enforcement and recognition of the
Malaysian judgment primarily refer to matters of remedy and
procedure taken by the Malaysian High Court relative to the
suit for collection initiated by petitioner. Needless to stress,
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. Ultimately, matters of remedy and
procedure such as those relating to the service of summons or
court process upon the defendant, the authority of counsel to
appear and represent a defendant and the formal
requirements in a decision are governed by the lex fori or the

internal law of the forum, i.e., the law of Malaysia in this case.
In this case, it is the procedural law of Malaysia where the
judgment was rendered that determines the validity of the
service of court process on private respondent as well as other
matters raised by it. As to what the Malaysian procedural law
is, remains a question of fact, not of law. It may not be taken
judicial notice of and must be pleaded and proved like any
other fact. Sections 24 and 25 of Rule 132 of the Revised Rules
of Court provide that it may be evidenced by an official
publication or by a duly attested or authenticated copy
thereof. It was then incumbent upon private respondent to
present evidence as to what that Malaysian procedural law is
and to show that under it, the assailed service of summons
upon a financial officer of a corporation, as alleged by it, is
invalid. It did not. Accordingly, the presumption of validity
and regularity of service of summons and the decision
thereafter rendered by the High Court of Malaya must stand.
2. Lastly, there is no merit to the argument that the foreign
judgment is not enforceable in view of the absence of any
statement of facts and law upon which the award in favor of
the petitioner was based. As aforestated, the lex fori or the
internal law of the forum governs matters of remedy and
procedure. Considering that under the procedural rules of the
High Court of Malaya, a valid judgment may be rendered even
without stating in the judgment every fact and law upon
which the judgment is based, then the same must be accorded
respect and the courts in the jurisdiction cannot invalidate the
judgment of the foreign court simply because our rules
provide otherwise.
All in all, private respondent had the ultimate duty to
demonstrate the alleged invalidity of such foreign judgment,
being the party challenging the judgment rendered by the
High Court of Malaya. But instead of doing so, private
respondent merely argued, to which the trial court agreed,
that the burden lay upon petitioner to prove the validity of the
money judgment. Such is clearly erroneous and would render
meaningless the presumption of validity accorded a foreign
judgment were the party seeking to enforce it be required to
first establish its validity.
CORPUZ vs. STO. TOMAS
RAYTHEM INTERNATION vs. ROUZIE
MINIMUM CONTRACT
HONGKONG AND SHANGHAI BANKING
CORPORATION vs. JACK ROBERT SHERMAN,

10
DEODATO RELOJ and THE INTERMEDIATE

APPELLATE COURT
August 11, 1989
FACTS:
Eastern Book Supply Service PTE, Ltd., a company
incorporated in Singapore, was granted by petitioners
Singapore branch an overdraft facility of $200,000.00 (which
was subsequently increased to 375,000.00) with 3% interest
payable monthly. As a security the directors of the company,
which included private respondents, executed a Joint and
Several Guarantee in favor of petitioner whereby they agreed
to pay, jointly and severally, on demand what is owed by the
company to petitioner under the overdraft facility.
The Joint and Several Guarantee provides that:
This guarantee and all rights, obligations and liabilities
Republic of Singapore. We hereby agree that the Courts of
Singapore shall have jurisdiction over all disputes arising
under this guarantee.
The company failed to pay. Petitioner demanded payment
from private respondents in accordance to the Joint and
Several Guarantee. When private respondents still failed to
pay, petitioner filed a complaint for collection of a sum of
money.
Trial court denied private respondents motion to dismiss,
holding that there is nothing in the Guarantee which says that
the courts of Singapore shall have jurisdiction to the exclusion
of the courts of other countries or nations. Furthermore
jurisdiction of courts is fixed by law; it cannot be conferred by
the will, submission or consent of the parties.
A motion for reconsideration was also denied.
Private respondents then filed before the respondent
Intermediate Appellate Court (now Court of Appeals) a
petition for prohibition with preliminary injunction and/or
prayer for a restraining order, which was granted.
The motion for reconsideration was denied, hence, the
present petition.
ISSUE:
Whether or not Philippine courts have jurisdiction over the
suit
HELD:
The decision of the respondent Court is hereby REVERSED
and the decision of the Regional Trial Court is REINSTATED.
While it is true that "the transaction took place in

Singaporean setting" and that the Joint and Several
Guarantee contains a choice-of-forum clause, the very essence
of due process dictates that the stipulation that "[t]his
guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may
be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts in Singapore shall
have jurisdiction over all disputes arising under this
guarantee" be liberally construed.
Private respondents are Philippine residents who would
rather face a complaint against them before a foreign court
and in the process incur considerable expenses, not to
mention inconvenience, than to have a Philippine court try
and resolve the case. Private respondents' stance is hardly
comprehensible, unless their intent is to evade, or at least
delay, the payment of a just obligation.
The defense of private respondents that the complaint should
have been filed in Singapore is based merely on technicality.
They did not even claim, much less prove, that the filing of the
action here will cause them any unnecessary trouble, damage,
or expense. On the other hand, there is no showing that
petitioner filed the action here just to harass private
respondents.
Polytrade Corporation vs. Blanco, and Neville Y. Lamis
Ents., et al. vs. Lagamon, etc., et al., has held that a
stipulation as to venue does not preclude the filing of suits in
the residence of plaintiff or defendant under Section 2 (b),
Rule 4, Rules of Court, in the absence of qualifying or
restrictive words in the agreement which would indicate that
the place named is the only venue agreed upon by the parties.
In instant case, the parties did not thereby stipulate that only
the courts of Singapore, to the exclusion of all the rest, has
jurisdiction. Neither did the clause in question operate to
divest Philippine courts of jurisdiction. In International Law,
jurisdiction is often defined as the light of a State to exercise
authority over persons and things within its boundaries
subject to certain exceptions. Thus, a State does not assume
jurisdiction over travelling sovereigns, ambassadors and
diplomatic representatives of other States, and foreign
military units stationed in or marching through State territory
with the permission of the latter's authorities. This authority,
which finds its source in the concept of sovereignty, is
exclusive within and throughout the domain of the State. A
State is competent to take hold of any judicial matter it sees fit
by making its courts and agencies assume jurisdiction over all
kinds of cases brought before them.
As regards the issue on improper venue, petitioner avers that
the objection to improper venue has been waived. However,
We agree with the ruling of the respondent Court that while
the motion to dismiss fails to use the words 'improper venue'
it can be perceived from the general thrust and context of the
motion that what is meant is improper venue, the use of the

word 'jurisdiction' which is same word employed in the
guarantee agreement but conveys the concept of venue.
At any rate, this issue is now of no moment because We hold
that venue here was properly laid.
The respondent Court ruled that in a conflict problem, a court
will simply refuse to entertain the case if it is not authorized
by law to exercise jurisdiction. And even if it is so authorized,
it may still refuse to entertain the case by applying the
principle of forum non conveniens.
However, whether a suit should be entertained or dismissed
on the basis of the principle of forum non conveniens
depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court. Thus, the
respondent Court should not have relied on such principle.
Although the Joint and Several Guarantee is a contract of
adhesion and that consequently, it cannot be permitted to
take a stand contrary to the stipulations of the contract,
substantial bases exist for petitioner's choice of forum, as
discussed earlier.
Lastly, private respondents allege that neither the petitioner
based at Hongkong nor its Philippine branch is involved in
the transaction sued upon. This is a vain attempt on their part
to further thwart the proceedings below inasmuch as wellknown is the rule that a defendant cannot plead any defense
that has not been interposed in the court below.
SAUDI ARABIAN AIRLINES v. CA

October 8, 1998
FACTS:
Saudia hired Milagros Morada as a flight Attendant for its
airlines based in Jeddah, Saudi Arabia. While on a lay-over in
Jakarta, Morada went to a disco dance w/ fellow crew
members Thamer & Allah, 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 the room, Allah left, and thats when
Thamer attempted to rape Morada. Fortunately, a roomboy &
several security personnel heard her cries for help & rescued
her. The Indonesian police came & arrested Thamer & Allah.
Saudia officials interrogated Morada about the Jakarta
incident. They tried to pressure her in making a statement to
drop the case against Thamer & Allah, but Morada refused to
cooperate. Indonesian authorities agreed to deport Thamer &
Allah after 2 weeks of detention, & they were again employed
by Saudia.

11
1 years later, in Riyadh, a few minutes before the departure

of her flight to Manila, Morada was not allowed to board the
plane & instead ordered to take a later flight to Jeddah to see
Mr. Miniewy, the Chief Legal Officer of Saudia. When she did,
she was brought to a Saudi court where she was asked to sign
a document written in Arabic. They told her this was
necessary to close the case against Thamer & Allah. As it
turned out, Morada signed a notice to her to appear before the
court. Morada returned to Manila.
Later on, Morada was brought to the same Saudi court, & she
was informed that the investigation was merely routinary &
posed no danger to her. A Saudi judge interrogated her
through an interpreter about the Jakarta incident. When her
plane was about to take off, a Saudia officer told her that the
airline had forbidden her to take flight. She was escorted to
the same court where the judge rendered a decision
sentencing her to 5 months imprisonment & to 286 lashes. It
was then that she realized that the Saudi court tried her,
together w/ Thamer & Allah, for the Jakarta incident. The
court found Morada guilty of
1
adultery,
2
going to a disco, dancing & listening to the music
in violation of Islamic laws
3
socializing w/ the male crew, in contravention of
Islamic tradition
Because she was wrongfully convicted, the Prince of Makkah
dismissed the case against her & allowed her to leave Saudi
Arabia. She was terminated from the service by Saudia, w/o
her being informed of the cause. Morada filed a Complaint for
Damages against Saudia. Saudia filed a MTD.
Saudias contention: The trial court has no jurisdiction to try
the case. Moradas claim for alleged abuse of rights occurred
in Saudi. The existence of a foreign element qualifies the
instant case for the application of the law of Saudi, by virtue
of the lex loci delicti commissi rule.
Moradas contention: Since her complaint is based on Arts. 19
and 21 of the NCC, then the instant case is properly a matter
of domestic law.
ISSUE:
(a) W/N the instant case is a matter of domestic law.
(b) W/N Philippine courts have jurisdiction to hear & try the
case.
(c) W/N Philippine law should govern.
HELD:
(a) NO. A factual situation that cuts across territorial lines &
is affected by the diverse laws of 2 or more states is said to
contain a foreign element. In the instant case, the foreign
element consisted in the fact that Morada is a resident

Philippine national, & that Saudia is a resident foreign
corporation. Also, by virtue of the employment of Morada w/
Saudia as a flight stewardess, events did transpire during her
many occasions of travel across national borders, particularly
from Manila to Jeddah & vice versa, that caused a conflicts
situation to arise.
(b) YES. The RTC of QC possesses jurisdiction over the
subject matter of the suit. Pragmatic considerations, including
the convenience of the parties, also weigh heavily in favor the
RTC of QC assuming jurisdiction. Paramount is the private
interest of the litigant. Enforceability of a judgment if one is
obtained is quite obvious. Relative advantages & obstacles to a
fair trial are equally important. Saudia may not, by choice of
an inconvenient form, vex, harass or oppress Morada, i.e.
inflicting upon him needless expense or disturbance. But
unless the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be disturbed.
Weighing the relative claims of the parties, QC RTC found it
best to hear the case in the Philippines. Had it refused to take
cognizance of the case, it would be forcing Morada to seek
remedial action elsewhere, i.e. in Saudi 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 Morada should be upheld.
Similarly, the QC RTC also possesses jurisdiction over the
persons of the parties. By filing her Complaint w/ QC RTC,
Morada has voluntary submitted herself to the jurisdiction of
the court. The records show that Saudia filed several motions
praying for the dismissal of Moradas Complaint. Saudia also
filed an Answer In Ex Abundante Cautelam. What is very
patent and explicit from the motions filed, is that Saudia
prayed for other reliefs under the premises. Undeniably,
Saudia has effectively submitted to QC RTCs jurisdiction by
praying for the dismissal of the Complaint on grounds other
than lack of jurisdiction.
(c) YES. Considering that the complaint in the court a quo is
one involving torts, the connecting factor or point of
contact could be the place where the tortuous conduct or lex
loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as
situs of the tort (the place where the alleged tortuous conduct
took place). This is because it is in the Philippines where
Saudia allegedly deceived Morada, a Filipina residing &
working here. That certain acts or parts of the injury allegedly
occurred in another country is of no moment. What is
important is the place where the overall harm or the fatality of
the alleged injury to the person, reputation, social standing &
human rights of complainant, had lodged, according to the

Morada.
Also, 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.
There is basis for the claim that over-all injury occurred and
lodged in the Philippines. There is likewise no question that
Morada is a resident Filipina national, working w/ Saudia, 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.
HASEGAWA vs. KITAMURA

November 23, 2007
FACTS:
The petitioner Nippon Engineering Consultants Co. is a
Japanese consultancy firm which provides technical and
management support in the infrastructure project of foreign
governments. It entered into a Independent Contractor
Agreement (ICA) with respondent Kitamura, a Japanese
national permanently residing in the Philippines. Under the
ICA, the respondent will extend professional services to the
petitioner for a year.
Subsequently Kitamura was assigned as project manager of
STAR project in 1999. In 2000, he was informed by the
petitioner that it will no longer renew the ICA and that he will
be retained until its expiration. Kitamura filed a civil casefor
specific performance before the RTC of Lipa and damages.
The lower court ruled that it has jurisdiction over the dispute
and denied the petitioner's motion to dismiss since
accordingly, it is vested by law with the power to entertain
and hear the civil case filed by Kitamura. The Court of
Appeals upheld the lower court's decision.
ISSUE:
Whether or not the RTC has jurisdiction over the case
HELD:

12
YES
The only issue is the jurisdiction, hence, choice-of-law rules as
raised by the petitioner is inapplicable and not yet called for
(reference to lex loci, lex contractus, or state of most
significant rule). The petitioner prematurelyinvoked the said
rules before pointing out any conflict between the laws of
Japan and the Philippines.
The doctrine on forum non conveniens cannot be invoked to
deprive the RTC of its jurisdiction. Dismissing the case on this
ground requires a factual determination hence the principle is
considered to be more a matter of defense.
JURISDICTION OVER PERSON

PHILSEC INVESTMENT CORP. vs. COURT OF
APPEALS
G.R. No 103493. June 19, 1997
(3) failure to state a cause of action. Ducat contended that the

action being in personam, extraterritorial service of summons
by publication was ineffectual and did not vest the court with
jurisdiction over 1488 Inc., which is a non-resident foreign
corporation, and Daic, who is a non-resident alien. The trial
court granted Ducat's motion to dismiss.
Petitioners appealed to the Court of Appeals , which affirmed
dismissal.
The U.S. case and the case at bar arose from only one main
transaction, and involve foreign elements, to wit: 1) the
property subject matter of the sale is situated in Texas, U.S.A.;
2) the seller, 1488 Inc. is a non-resident foreign corporation;
3) although the buyer, Athona, a foreign corporation which
does not claim to be doing business in the Philippines, is
wholly owned by Philsec, a domestic corporation, Athona is
also owned by BPI-IFL, also a foreign corporation; 4) the
Warranty Deed was executed in Texas, U.S.A.
ISSUE/S:
1
2
FACTS:
Private respondent Ducat obtained separate loans from
petitioners Ayala International (Ayala) and Philsec
Investment (Philsec) secured by the shares of stock owned by
Ducat. To facilitate the payment, private respondent Daic,
president of 1488 Inc, assumed the obligation by which it sold
to petitioner Athona Holdings (Athona) a parcel of land in
Texas, while Philsec and Ayala extended a loan to Athona as
initial payment of the purchase price. The balance was to be
paid by a promissory note executed by Athona in favor of
1488 Inc. Subsequently, upon their receipt from 1488, Inc.,
petitioners 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 became due and demandable. Accordingly, 1488 Inc.
sued petitioners and Athona in the United States for payment
of the balance and for damages for breach of contract and for
fraud in misrepresenting the marketability of the shares of
stock delivered to 1488, Inc. under the Agreement.
While the case was pending in the United States, petitioners
filed a complaint against private respondents in the Regional
Trial Court of Makati. Petitioners claimed that, as a result of
private respondents' fraudulent misrepresentations, Athona,
Philsec and Ayala were induced to enter into the Agreement
and to purchase the Houston property.
Private respondent Ducat moved to dismiss the on the
grounds of (1) litis pendentia (2) forum non conveniens, and
WON the case in the RTC is barred by the

judgment of the US Court.
WON forum non conveniens is applicable to the
case at bar.
WON jurisdiction over 1488 Inc and Daic were
obtained by the court.
HELD:
1
No, the foreign judgment cannot be given the

effect of res judicata without giving them an
opportunity to impeach it on grounds stated in the
Rules of Court. 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, have been given ample opportunity
to repel them on grounds allowed under the
law. What is essential is that there is opportunity
to challenge the foreign judgment, in order for the
court to properly determine its efficacy. 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.
No. First, a motion to dismiss is limited to the
grounds under Rule 16 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.
No. It was error to hold that jurisdiction over
1488, Inc. and Daic could not be obtained because
this is an action in personam and summons were
served by extraterritorial service. Rule 14 on
extraterritorial service provides that service of
summons on a non-resident defendant may be
effected out of the Philippines by leave of Court
where, among others, "the property of the
defendant has been attached within the
Philippines." It is not disputed that the
properties, real and personal, of the private
respondents had been attached prior to service of
summons under the Order of the trial court.
Pantaleon vs. Asuncion

1105 Phil 761
FACTS:
Pantaleon instituted an action against Asuncion for recovery
of a sum of money. Summons was issued but was returned
since according to reliable information, Asuncion is residing
in B-24 Tala Estate, Caloocan, Rizal. Hence, alias summons
was issued. However, such summons was returned unserved
since the Sheriff found out that Asuncion was no longer
residing in that address and diligent effort served no purpose.
Upon Pantaleons motion, the court declared that Asuncion
shall be summoned by publication. Having failed to appear,
the court declared him in default and rendered a decision
against him. It was only 46 days after rendition of the decision
that Asuncion learned of the complaint as well as of the
adverse decision. Aggrieved, Asuncion filed a petition for
relief alleging that he had not been summoned or notified of
the hearing; no copy of the summons and publication were
sent since he had not received any; and his nonappearance is
excusable it being due to the mistake of the authorities.
ISSUE:
WON the summons was served and thus conferred
jurisdiction upon the lower court.
HELD:
The summons was not served. Rule 7, Sec. 21 is applicable but
such was not complied.

13
Section 21 is unqualified. It prescribes the proof of service by

publication, regardless of whether the defendant is a resident
of the Philippines or not. Section 16 must be read in relation
to section 21, which complements it. Then, too, there is no
reason why copy of the summons and of the order for its
publication should be mailed to non-resident defendants, but
not to resident defendants.
period. Petitioner appeals to the CA via a petition for

certiorari but failed and even sustained the trial courts
decision and ordered the former to pay the amount plus legal
interest and cost of suit. Hence, this petition.
JURISDICTION OVER THE RES

ISSUES:
Considering that strict compliance with the terms of the

statute is necessary to confer jurisdiction through service by
publication the conclusion is inescapable that the lower court
had no authority whatsoever to issue the order declaring
Asuncion in default and to render decision against Asuncion,
and that both are null and void ad initio.
(1) Whether or not there is lack of jurisdiction

over the petitioner due to improper service of summons.
(2) Whether or not the rule on service by
publication under Section 14, Rule 14 of the Rules of Court
applies only to actions in rem, not actions in personam.
(3) Whether or not the affidavit of service of the
copy of the summons should have been prepared by the clerk
of court and not respondents messenger.
It is also constitutionally required that in action strictly in

personam, like the case at bar, personal service of summons,
within the forum, is essential to the acquisition of jurisdiction
over the person of the defendant, who does not voluntarily
submit himself to the authority of the court.
HELD:
SANTOS vs. PNOC

September 23, 2008
FACTS:
PNOC Exploration Corporation, respondent, filed a complaint
for a sum of money against petitioner Pedro Santos Jr. in the
RTC of Pasig. The amount sought to be collected was the
petitioners unpaid balance of the car loan advanced to him by
respondent when he was still a member of its board of
directors. Personal service of summons were made to
petitioner but failed because the latter cannot be located in his
last known address despite earnest efforts to do so.
Subsequently, on respondents motion, the trial court allowed
service of summons by publication. Respondent caused the
publication of the summons in Remate, a newspaper of
general circulation in the Philippines. Thereafter, respondent
submitted the affidavit of publication and the affidavit of
service of respondents employee to the effect that he sent a
copy of the summons by registered mail to petitioners last
known address. Petitioner still failed to answer within the
prescribed period despite the publication of summons. Hence,
respondent filed a motion for the reception of its evidence ex
parte. Trial court granted said motion and proceeded with the
ex parte presentation and formal offer of its evidence.
Petitioner filed an Omnibus Motion for Reconsideration and
to Admit Attached Answer, alleging that the affidavit of
service submitted by respondent failed to comply with Section
19, Rule 14 of the Rules of Court as it was not executed by the
clerk of court. Trial court denied the said motion and held
that the rules did not require such execution with the clerk of
court. It also denied the motion to admit petitioners answer
because the same was filed way beyond the reglementary
duty to make the complementary service by registered mail is

imposed on the party who resorts to service by publication.
(1) Section 14, Rule 14 provides that in any action

where the defendant is designated as an unknown owner or
the like or when his whereabouts are unknown and cannot be
ascertained by diligent inquiry, service may, by leave of court,
be effected upon him by publication in a newspaper of general
circulation and in such places and for such times as the court
may order. Since petitioner could not be personally served
with summons despite diligent efforts to locate his
whereabouts, respondent sought and was granted leave of
court to effect the service of summons upon him by
publication in a newspaper of general circulation. Thus,
petitioner was proper served with summons by publication
and that there is jurisdiction over his person.
(2) The in rem/in personam distinction was
significant under the old rule because it was silent as to the
kind of action to which the rule was applicable but this has
been changed, it now applies to any action. The present rule
expressly states that it applies in any action where the
defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be
ascertained by diligent inquiry. Hence, the petitioners
contention that the complaint filed against him is not covered
by the said rule because the action for recovery of sum of
money is an action in personam is not applicable anymore.
(3) The service of summons by publication is
complemented by service of summons by registered mail to
defendants last known address. This complementary service
is evidenced by an affidavit showing the deposit of a copy of
the summons and order for publication in the post office,
postage for prepaid, directed to the defendant by registered
mail to his last known address. The rules, however, do not
require that the affidavit of complementary service be
executed by the clerk of court. While the trial court ordinarily
does the mailing of copies of its orders and processes, the
EL BLANCO ESPANOL-FILINO vs. VICENTE

PALANCA
Gr No. L-11390
FACTS:
The original defendant Engracio Palanca executed a
mortgage upon various parcels of real property with El Blanco
Espanol, as a security for a debt owing by him to the bank.
The debt amounted to P218,294. At that time the estimanted
value of the property was P292,558; which was about in
excess of Engracios indebtedness. After the execution of the
mortgage, Engracio returned to China, which appears to be
his native country and there he died without returning to the
Philippines.
As Engracio was a non-resident at the time of the institution
of the action, an order for publication was made in due form
in a newspaper of the city of Manila. At the same time, the
court directed a copy of the summons and complaint to the
defendants last place of residence in the city of Amoy, China.
Afterwards, sale by public auction was held with the bank as
the highest bidder. The sale was confirmed by the court.
However, about seven years after the confirmation of the sale,
a motion was made by Vicente Palanca as administrator of the
estate of Engracio. He requested that the court set aside the
order of default likewise the judgment and to vacate all the
proceeding subsequent thereto. He further stated that the
order of default and the judgment rendered was void because
the court never acquired jurisdiction over the person of the
defendant or over the subject of the action.
ISSUE:
WON the lower court acquired jurisdiction over the
defendant and the subject matter of the action.
HELD:
Yes. Where the defendant in a mortgage foreclosure lives out
of the Islands and refuses to appear otherwise submit himself
to the authority of the court, the jurisdiction of the latter is
limited to the mortgaged property, with respect to which the
jurisdiction of the court is based upon the fact that the
property is located within the district and that the court,
under the provisions of law applicable in such cases, is vested
with the power to subject the property to the obligation
created by the mortgage. In such case personal jurisdiction

14
over the nonresident defendant is nonessential and in fact

cannot be acquired. Furthermore, the failure of the clerk to
send notice by mail to the nonresident defendant in a
foreclosure proceeding, as required by an order of the court,
does not defeat the jurisdiction of the court over the
mortgaged property.
PERKINS vs. DIZON

GR no. 46631
November 16, 1939
FACTS:
Respondent, Eugene Arthur Perkins, instituted an
action in the CFI 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 nonrecognition 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 Perkins, and by one George 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. The trial court ordered respondent
Eugene to include in his complaint as parties
defendant petitioner, Idonah and George. The
complaint was accordingly amended and in addition
to the relief prayed for in the original complaint,
respondent Eugene prayed that petitioner Idonah and
George 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 and George, pursuant to the order of the trial
court. George filed his answer to the amended
complaint, and petitioner Idonah, 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.
against the nonresident. In the amended complaint

filed by Eugene, 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.
ISSUE:
ASSUMPTION OF JURISDICTION vs. FORUM

NON-CONVENIENS
WON the lower court acquired jurisdiction over the

person of Idonah Perkins.
HELD:
In the instant case, there can be no question that the
action brought by Eugene in his amended complaint
against the petitioner, Idonah seeks to exclude her
from any interest in a property located in the
Philippines. That property consists in certain shares
of stock 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
certificates evidencing the ownership of those shares
are within or without that jurisdiction. Under these
circumstances, the action thus brought is quasi in
rem, for, while the judgment 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."
The action being quasi in rem, the CFI of Manila has
jurisdiction to try the same even if it can acquire no
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
the 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 been
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
K.K. SHELL SEKIYU OSAKA HATSUBAISHO

and FUNG HING OIL CO. Ltd vs. CA
COMMUNICATIONS MATERIALS and
DESIGN vs. CA
FIRST PHILIPPINE INTERNATIONAL BANK
(Formerly Producers Bank of the Philippines)
and MERCURIO RIVERA vs. COURT OF
APPEALS, CARLOS EJERCITO, in substitution
of DEMETRIO DEMETRIA, and JOSE JANOLO
322 Phil 280
FACTS:
In the course of its banking operations, the defendant
Producer Bank of the Philippines (now First Philippine
International Bank) acquired six parcels of land with a total
area of 101 hectares located at Don Jose, Sta. Rosa, Laguna,
and covered by Transfer Certificates of Title Nos. T-106932 to
T-106937. The property used to be owned by BYME
Investment and Development Corporation which had them
mortgaged with the bank as collateral fora loan. The original
plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted to
purchase the property and thus initiated negotiations for that
purposeThe Bank had an agreement with Demetrio Demetria
and Jose Janolo for the two to purchase the parcels of land for
a purchase price of P5.5 million pesos. The said agreement
was made by Demetria and Janolo with the Banks manager,
Mercurio Rivera. Later however, the Bank, through its
conservator, Leonida Encarnacion, sought the repudiation of
the agreement as it alleged that Rivera was not authorized to
enter into such an agreement, hence there was no valid
contract of sale.
On May 16, 1988, plaintiffs filed a suit for specific
performance with damages against the bank, its Manager
Rivera and Acting Conservator Encarnacion. The basis of the
suit was that the transaction had with the bank resulted in a

15
perfected contract of sale. The defendants took the position

that there was no such perfected sale because the defendant
Rivera is not authorized to sell the property, and that there
was no meeting of the minds as to the price.
On March 14, 1991, Henry L. Co (the brother of Luis Co),
through counsel Sycip Salazar Hernandez and Gatmaitan,
filed a motion to intervene in the trial court, alleging that as
owner of 80% of the Banks outstanding shares of stock, he
had a substantial interest in resisting the complaint. On July
8, 1991, the trial court issued an order denying the motion to
intervene on the ground that it was filed after trial had
already been concluded. It also denied a motion for
reconsideration filed thereafter. From the trial courts
decision, the Bank, petitioner Rivera and conservator
Encarnacion appealed to the Court of Appeals which
subsequently affirmed with modification the said judgment.
Henry Co did not appeal the denial of his motion for
intervention.
In the course of the proceedings in the respondent Court,
Carlos Ejercito was substituted in place of Demetria and
Janolo, in view of the assignment of the latters rights in the
matter in litigation to said private respondent.
On July 11, 1992, during the pendency of the proceedings in
the Court of Appeals, Henry Co and several other
stockholders of the Bank, through counsel Angara Abello
Concepcion Regala and Cruz, filed an action (hereafter, the
Second Case) -purportedly a derivative suit - with the
Regional Trial Court of Makati, Branch 134, docketed as Civil
Case No. 92-1606, against Encarnacion, Demetria and Janolo
to declare any perfected sale of the property as unenforceable
and to stop Ejercito from enforcing or implementing the
sale.In his answer, Janolo argued that the Second Case was
barred by litis pendentia by virtue of the case then pending in
the Court of Appeals. During the pre-trial conference in the
Second Case, plaintiffs filed a Motion for Leave of Court to
Dismiss the Case Without Prejudice. Private respondent
opposed this motion on the ground, among others, that
plaintiffs act of forum shopping justifies the dismissal of both
cases, with prejudice. Private respondent, in his
memorandum, averred that this motion is still pending in the
Makati RTC.
ISSUE:
Whether or not there is forum shopping.
HELD:
Yes. The test for determining whether a party violated the rule
against forum-shopping has been laid down in the 1986 case
of Buan vs. Lopez, also by Chief Justice Narvasa, and that is,
forum-shopping exists where the elements of litis pendentia
are present or where a final judgment in one case will amount

to res judicata in the other, as follows:
There thus exists between the action before this Court and
RTC Case No. 86-36563 identity of parties, or at least such
parties as represent the same interests in both actions, as well
as identity of rights asserted and relief prayed for, the relief
being founded on the same facts, and the identity on the two
preceding particulars is such that any judgment rendered in
the other action, will, regardless of which party is successful,
amount to res adjudicata in the action under consideration:
all the requisites, in fine, of auter action pendant.
Consequently, where a litigant (or one representing the same
interest or person) sues the same party against whom another
action or actions for the alleged violation of the same right
and the enforcement of the same relief is/are still pending,
the defense of litis pendencia in one case is a bar to the
others; and, a final judgment in one would constitute res
judicata and thus would cause the dismissal of the rest. In
either case, forum shopping could be cited by the other party
as a ground to ask for summary dismissal of the two (or more)
complaints or petitions, and for the imposition of the other
sanctions, which are direct contempt of court, criminal
prosecution, and disciplinary action against the erring lawyer.
Applying the foregoing principles in the case before us and
comparing it with the Second Case, it is obvious that there
exist identity of parties or interests represented, identity of
rights or causes and identity of reliefs sought.
Very simply stated, the original complaint in the court a quo
which gave rise to the instant petition was filed by the buyer
(herein private respondent and his predecessors-in-interest)
against the seller (herein petitioners) to enforce the alleged
perfected sale of real estate. On the other hand, the complaint
in the Second Case seeks to declare such purported sale
involving the same real property as unenforceable as against
the Bank, which is the petitioner herein. In other words, in
the Second Case, the majority stockholders, in representation
of the Bank, are seeking to accomplish what the Bank itself
failed to do in the original case in the trial court. In brief, the
objective or the relief being sought, though worded
differently, is the same, namely, to enable the petitioner Bank
to escape from the obligation to sell the property to
respondent. In Danville Maritime, Inc. vs. Commission on
Audit, this Court ruled that the filing by a party of two
apparently different actions, but with the same objective,
constituted forum shopping.
THE MANILA HOTEL CORP. AND MANILA

HOTEL INTL. LTD. vs. NATIONAL LABOR
RELATIONS COMMISSION, ARBITER
CEFERINA J. DIOSANA AND MARCELO G.
SANTOS
October 13, 2000
FACTS:
Petitioners are the Manila Hotel Corporation (hereinafter
referred to as MHC) and the Manila Hotel International
Company, Limited (hereinafter referred to as MHICL).
When the case was filed in 1990, MHC was still a
government-owned and controlled corporation duly
organized and existing under the laws of the Philippines.
MHICL is a corporation duly organized and existing under the
laws of Hong Kong. MHC is an incorporator of MHICL,
owning 50% of its capital stock.
By virtue of a management agreement with the Palace Hotel
(Wang Fu Company Limited), MHICL trained the personnel
and staff of the Palace Hotel at Beijing, China.
Marcelo Santos was an overseas worker, a printer at the
Mazoon Printing Press, Sultanate of Oman when he was
directly hired by the Palace Hotel, Beijing by its GM Gerhard
Shmidt as he was recommended by Nestor Buenio, his friend.
Santos resigned from Mazoon and thereafter signed an
employment contract mailed to him. The contract stated it
would be for a period of 2 years.
After a short vacation in the Philippines and barely a year into
the contract, Santos was terminated from his job due to
retrenchment, and repatriated to the Philippines. Santos,
through his lawyer, demanded full compensation pursuant to
the employment agreement which Shmidt denied. Santos
then filed a complaint with the NLRC against MHC, MHICL,
the Palace Hotel & Shmidt for illegal dismissal.
The Labor Arbiter grants payment of damages to Santos
which was vacated on appeal by the NLRC. On an MR, the
NLRC found Santos illegally dismissed & recommended that
he be paid actual damages equivalent to his salaries for the
unexpired portion of his contract. MRs were denied, hence
this petition.
ISSUE:
Whether or not the rule of forum non conveniens may apply
HELD:
Yes. The NLRC was a seriously inconvenient forum.

16
We note that the main aspects of the case transpired in two

foreign jurisdictions and the case involves purely foreign
elements. The only link that the Philippines has with the case
is that respondent Santos is a Filipino citizen. The Palace
Hotel and MHICL are foreign corporations. Not all cases
involving our citizens can be tried here. The employment
contract.-- Respondent Santos was hired directly by the
Palace Hotel, a foreign employer, through correspondence
sent to the Sultanate of Oman, where respondent Santos was
then employed. He was hired without the intervention of the
POEA or any authorized recruitment agency of the
government.
Under the rule of forum non conveniens, a Philippine court or
agency may assume jurisdiction over the case if it chooses to
do so provided: (1) that the Philippine court is one to which
the parties may conveniently resort to; (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 power to enforce its decision. The conditions are
unavailing in the case at bar.
Not Convenient.The Supreme Court failed to see how the
NLRC is a convenient forum given that all the incidents of the
case - from the time of recruitment, to employment to
dismissal occurred outside the Philippines. The inconvenience
is compounded by the fact that the proper defendants, the
Palace Hotel and MHICL are not nationals of the Philippines.
Neither are they doing business in the Philippines. Likewise,
the main witnesses, Mr. Shmidt and Mr. Henk are nonresidents of the Philippines.
No power to determine applicable law.-- Neither can an
intelligent decision be made as to the law governing the
employment contract as such was perfected in foreign soil.
This calls to fore the application of the principle of lex loci
contractus (the law of the place where the contract was
made). The employment contract was not perfected in the
Philippines. Respondent Santos signified his acceptance by
writing a letter while he was in the Republic of Oman. This
letter was sent to the Palace Hotel in the Peoples Republic of
China.
corporation incorporated under the laws of China and was not

even served with summons. Jurisdiction over its person was
not acquired.
petition meritorious. Applying the four-fold test of

determining an employer-employee relationship, the CA
declared that respondent was an employee of PPI.
This is not to say that Philippine courts and agencies have no

power to solve controversies involving foreign employers.
Neither are we saying that we do not have power over an
employment contract executed in a foreign country. If Santos
were an overseas contract worker, a Philippine forum,
specifically the POEA, not the NLRC, would protect him. He is
not an overseas contract worker a fact which he admits with
conviction.
Even assuming that the NLRC was the proper forum, even on
the merits, the NLRCs decision cannot be sustained.
ISSUE:
PACIFIC CONSULTANTS INTERNATIONAL

ASIA, INC. vs. KLAUS K. SCHONFELD
G.R. No. 166920, February 19, 2007
Callejo, Sr., J.:
FACTS:
Pacicon Philippines, Inc. (PPI) is a corporation duly
established and incorporated in accordance with the laws of
the Philippines. It is a subsidiary of Petitioner Pacific
Consultants International of Japan (PCIJ) located in Tokyo,
Japan. In 1997, PCIJ decided to engage in consultancy
services
for
water
and
sanitation
in
the Philippines. Thereafter, respondent, who is a Canadian
citizen, was employed by PCIJ as Sector Manager of PPI in its
Water and Sanitation Department in the Philippines. His
salary was to be paid partly by PPI and PCIJ. Unfortunately,
Respondent filed with PPI several money claims, which the
latter only partially settled. As a result, respondent filed a
complaint for Illegal Dismissal against petitioners PPI with
the Labor Arbiter.
No power to determine the facts.-- Neither can the

NLRC determine the facts surrounding the alleged illegal
dismissal as all acts complained of took place in Beijing,
Peoples Republic of China. The NLRC was not in a position to
determine whether the Tiannamen Square incident truly
adversely affected operations of the Palace Hotel as to justify
respondent Santos retrenchment.
In turn, Petitioners filed a Motion to dismiss the complaint on

the following grounds: (1) the Labor Arbiter had no
jurisdiction over the subject matter; and (2) venue was
improperly laid. It argued that since respondents cause of
action was based on his letter of employment executed
in Tokyo, Japan, under the principle of lex loci contractus, the
complaint should have been filed there. Moreover, under
Section 12 of the General Conditions of Employment
appended to the letter of employment, complainant and PCIJ
had agreed that any employment-related dispute should be
brought before the London Court of Arbitration.
Principle of effectiveness, no power to execute

decision.-- Even assuming that a proper decision could be
reached by the NLRC, such would not have any binding effect
against the employer, the Palace Hotel. The Palace Hotel is a
The Labor Arbiter found, among others, that the contract of

employment between respondent and PCIJ was controlling.
The NLRC agreed with the Labor Arbiter and affirmed the
latters decision in toto. However on appeal, the CA found the
Whether or not the labor arbiter has jurisdiction over

respondents claim.
HELD:
YES. Using the four-fold test, there is substantial evidence on
record which would erase any doubt that the respondent
company PPI is the true employer of petitioner. In the case at
bar, the power to control and supervise petitioners work
performance, as well as the power to terminate the
employment relationship devolved upon the respondent
company.
With respect to the arbitration clause, the Court ruled that it
should be considered merely as an additional forum, not as
limiting venue to the specified place. If the intention of the
parties were to restrict venue, there must be accompanying
language to that effect. In the instant case, no restrictive
words like only, or solely, were stated in the contract.
Lastly, Petitioners insistence on the application of the
principle of forum non conveniens must be rejected. First, the
Labor Code of the Philippines does not include forum non
conveniens as a ground for the dismissal of the complaint.
Second, the propriety of dismissing a case based on this
principle requires a factual determination; hence, it is
properly considered as defense. Third, it is settled that the
Philippine Court may assume jurisdiction over the case if it
chooses to do so; provided, that the following requisites are
met: (1) that the Philippine Court is one to which the parties
may conveniently resort to; (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
power to enforce its decision. Admittedly, all the foregoing
requisites are present in this case.
WHICH/WHAT LAW THE ASSUMING COURT

WILL APPLY
AZNAR vs. GARCIA
GR No. L- 16749,
January 31, 1963
Labrador, J.
FACTS:

17
Edward Christensen, citizen of California, died and had

executed a will in Manila. The will declared that he only had 1
child named Lucy Christensen and no other living
ascendants/descendants. In his will, he bequeathed unto
Helen Christensen P3,900 to be deposited at PNB. With this,
he also stated in the will that although they have the same
surname, they were not related to each other.
Helen, on the other hand, opposed on the approval of the
partition because according to her, she was deprived of her
legitime as an acknowledged natural child. She was declared
as an acknowledged natural child by the court in GR No. L11483-84 and she is deemed to be legitimate from the time of
her birth for all intents and purposes.
The court ruled that as Edward was a citizen of US and of the
State of California at the time of his death, the successional
rights and intrinsic validity of the provisions in his will are to
be governed by the law of California.
In accordance with which a testator has the right to dispose of
his property in the way he desires. Helen , through counsel,
filed various MR but these were denied. Hence this appeal.
California; such action would leave the issue incapable of

determination because the case will then be like a football,
tossed back and forth between the two states, between the
country of which the decedent was a citizen and the country of
his domicile. The Philippine court must apply its own laws as
directed in the conflict of law rule of the state of the decedent,
if the question has to be decided especially as the application
of the internal law of California provides no legitime for
children while the Philippine law makes natural children
legally acknowledged forced heirs of the parents recognizing
them.
We therefore find that as the domicile of the deceased
Edward, a citizen of California is the Philippines, the validity
of the provisions of his will depriving his acknowledged
natural child, the appellant, should be governed by the
Philippine law, the domicile pursuant to Art. 946 of the Civil
Code of California , not the internal law of California.
CADALIN vs POEA ADMINISTRATOR

238 SCRA 721
ISSUE:
FACTS:
Whether or not the lower court erred in failing to recognize

that under the international law, particularly under the renvoi
doctrine, the intrinsic validity of the testamentary disposition
or the distribution of the estate of the deceased Edward
should be governed by the Philippine law.
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul

and Donato B. Evangelista, in their own behalf and on behalf
of 728 other overseas contract workers (OCWs) instituted a
class suit by filing an "Amended Complaint" with the
Philippine Overseas Employment Administration (POEA) for
money claims arising from their recruitment by AIBC and
employment by BRII (POEA Case No. L-84-06-555). The
claimants were represented by Atty. Gerardo del Mundo.
HELD:
There is no question that Edward was a citizen of US and of
State of California at the time of his death. Under the Civil
Code Art. 16. *** However, intestate and testamentary
successions both with respect to the order of succession and
to the amount of successional rights and to the intrinsic
validity of testamentary provisions, shall be regulated by the
national law of the person whose succession is under
consideration , whatever may be the nature of the property
and regardless of the country wherein said property may be
found.*** Considering that he was a citizen of US and of State
of California, Art. 946 of the Civil Code of California states
that *** If theres no law to the contrary, in the place where
personal property is situated, it is deemed to follow the
person of its owner and is governed by the law of his
domicile***
The conflict of law rule in California refers back the case,
when a decedent is not domiciled in California, to the law of
his domicile, the Philippines in the case at bar. The court of
domicile cannot and should not refer the case back to
BRII is a foreign corporation with headquarters in Houston,

Texas, and is engaged in construction; while AIBC is a
domestic corporation licensed as a service contractor to
recruit, mobilize and deploy Filipino workers for overseas
employment on behalf of its foreign principals.
The amended complaint principally sought the payment of
the unexpired portion of the employment contracts, which
was terminated prematurely, and secondarily, the payment of
the interest of the earnings of the Travel and Reserved Fund,
interest on all the unpaid benefits; area wage and salary
differential pay; fringe benefits; refund of SSS and premium
not remitted to the SSS; refund of withholding tax not
remitted to the BIR; penalties for committing prohibited
practices; as well as the suspension of the license of AIBC and
the accreditation of BRII. Plaintiffs have worked in Bahrain
for BRII and they filed the class suit after 1 year from the
termination of their employment contract.
On January 30, 1989, the POEA Administrator rendered his

decision in POEA Case No. L-84-06-555 and the other
consolidated cases, which awarded the amount of
$824,652.44 in favor of only 324 complainants.
On appeal, , NLRC set aside Section 1, Rule 129 of the 1989
Revised Rules on Evidence governing the pleading and proof
of a foreign law and admitted in evidence a simple copy of the
Bahrain's Amiri Decree No. 23 of 1976 (Labour Law for the
Private Sector). NLRC invoked Article 221 of the Labor Code
of the Philippines, vesting on the Commission ample
discretion to use every and all reasonable means to ascertain
the facts in each case without regard to the technicalities of
law or procedure. NLRC agreed with the POEA Administrator
that the Amiri Decree No. 23, being more favorable and
beneficial to the workers, should form part of the overseas
employment contract of the complainants.
NLRC, however, held that the Amiri Decree No. 23 applied
only to the claimants, who worked in Bahrain, and set aside
awards of the POEA Administrator in favor of the claimants,
who worked elsewhere.
NLRC ruled that the prescriptive period for the filing of the
claims of the complainants was three years, as provided in
Article 291 of the Labor Code of the Philippines, and not ten
years as provided in Article 1144 of the Civil Code of the
Philippines nor one year as provided in the Amiri Decree No.
23 of 1976.
Plaintiffs contend that their action has not yet expired
following the 10 year prescriptive period under Art. 114 NCC.
POEA holds the same but NLRC views that the 3 year
prescriptive period under the Labor Code Art.291 should be
applied. The Solicitor General is of the view that the Amiri
Decree be applied.
ISSUE:
WON the petition has already expired?
HELD:
NO. The period to be applied is the 3 years under the Labor
Code since the claim arises from labor employment.
First to be determined is whether it is the Bahrain law on
prescription of action based on the Amiri Decree No. 23 of
1976 or a Philippine law on prescription that shall be the
governing law.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not be
actionable after the lapse of one year from the date of the
expiry of the contract. (G.R. Nos. 105029-31, Rollo, p. 226).

18
As a general rule, a foreign procedural law will not be applied

in the forum. Procedural matters, such as service of process,
joinder of actions, period and requisites for appeal, and so
forth, are governed by the laws of the forum. This is true even
if the action is based upon a foreign substantive law
(Restatement of the Conflict of Laws, Sec. 685; Salonga,
Private International Law, 131 [1979]).
However, the characterization of a statute into a procedural or
substantive law becomes irrelevant when the country of the
forum has a "borrowing statute." Said statute has the practical
effect of treating the foreign statute of limitation as one of
substance (Goodrich, Conflict of Laws 152-153 [1938]). A
"borrowing statute" directs the state of the forum to apply the
foreign statute of limitations to the pending claims based on a
foreign law (Siegel, Conflicts, 183 [1975]). While there are
several kinds of "borrowing statutes," one form provides that
an action barred by the laws of the place where it accrued, will
not be enforced in the forum even though the local statute has
not run against it (Goodrich and Scoles, Conflict of Laws, 152153 [1938]). Section 48 of our Code of Civil Procedure is of
this kind. Said Section provides:
If by the laws of the state or country where the cause of action
arose, the action is barred, it is also barred in the Philippines
Islands.
Section 48 has not been repealed or amended by the Civil
Code of the Philippines. Article 2270 of said Code repealed
only those provisions of the Code of Civil Procedures as to
which were inconsistent with it. There is no provision in the
Civil Code of the Philippines, which is inconsistent with or
contradictory to Section 48 of the Code of Civil Procedure
(Paras, Philippine Conflict of Laws 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48
cannot be enforced ex proprio vigore insofar as it ordains the
application in this jurisdiction of Section 156 of the Amiri
Decree No. 23 of 1976.
The courts of the forum will not enforce any foreign claim
obnoxious to the forum's public policy (Canadian Northern
Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed.
713 [1920]). To enforce the one-year prescriptive period of the
Amiri Decree No. 23 of 1976 as regards the claims in question
would contravene the public policy on the protection to labor.
Having determined that the applicable law on prescription is
the Philippine law, the next question is whether the
prescriptive period governing the filing of the claims is three
years, as provided by the Labor Code or ten years, as provided
by the Civil Code of the Philippines. It is decided that the
Labor code shall apply, since the claim arose from a labor
employment.

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4S CONLICT OF LAWS DIGESTS

Private respondents Atty. Leovigildo Tandog and

Is Condition No. 14 printed at the back of the

since their alleged adhesion is presumed only from the fact

4S CONLICT OF LAWS DIGESTS

A complaint for collection of a sum of money was filed by

"2.That the court has no jurisdiction over the persons of the

"In the light of the Opposition thereto filed by plaintiff, the

the Court has no jurisdiction over the subject matter of the

"On the second ground, it is asserted that defendant Robert

"WHEREFORE, the Motion to Dismiss is hereby DENIED.

4S CONLICT OF LAWS DIGESTS

". . . An accurate reading, however, of the stipulation, "The

"While in the main, the motion to dismiss fails to categorically

Lastly, private respondents allege that neither the petitioner

Whether or not the children are entitled to their legitimes.

Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur.

4S CONLICT OF LAWS DIGESTS

there are no forced heirs or legitimates. Accordingly, since the

TAYAG RENATO vs. BENGUET

Whether or not the order of the lower court is proper

administration of an estate. When a person dies intestate

PAKISTAN INTERNATIONAL AIRLINES vs.

Tayag, as ancillary administrator, has the power to gain

Dec. 2, 1978: PIA, a foreign corp. licensed to do business in

Term #5 Duration of Employment & Penalty:

Term #6 Termination: PIA has right to terminate

writing in advance 1 month before the intended

Employees should be reinstated w/full backwages

The company should pay Mamasig an amount

PIA should pay each employee a bonus equivalent

3-yr period null & void since it violates the Labor

Dismissal was illegal because it was carried out

4S CONLICT OF LAWS DIGESTS

ZALAMEA vs. CA and TRANSWORLD

CADALIN vs. POEA ADMINISTRATION

4S CONLICT OF LAWS DIGESTS

Hence, these petitions filed by the claimants and by AlBC and

reference to the provisions of the foreign law, the contract

4S CONLICT OF LAWS DIGESTS

Panama Labor Code is a statute having broad objectives. The

Inasmuch as the First requirement of a class suit is not

United Airlines vs. Court of Appeals

punched something into her computer and then told them

4S CONLICT OF LAWS DIGESTS

boarding. The appellate court likewise gave credence to the

shall pay to passengers holding confirmed reserved space and

GRACE J. GARCIA v REDERICK A. RECIO

However, there is absolutely no evidence that proves

ASIAVEST MERCHANT BANKERS (M)

4S CONLICT OF LAWS DIGESTS

it is tainted with want of jurisdiction, want of notice to private

the presumption that it was acting in the lawful exercise of its

requirements in a decision are governed by the lex fori or the

4S CONLICT OF LAWS DIGESTS

DEODATO RELOJ and THE INTERMEDIATE

While it is true that "the transaction took place in

motion that what is meant is improper venue, the use of the

SAUDI ARABIAN AIRLINES v. CA

4S CONLICT OF LAWS DIGESTS

1 years later, in Riyadh, a few minutes before the departure

element consisted in the fact that Morada is a resident

human rights of complainant, had lodged, according to the