United States Court of Appeals,Second Circuit.
children Trovan and the other half Ceftriaxone, an FDA-approved antibiotic the safety and efficacy
Rabi ABDULLAHI, Plaintiffs-Appellants, v. PFIZER, INC., Defendant-Appellee.
Docket Nos. 05-4863-cv(L), 05-6768-cv(CON).
Decided: January 30, 2009
Before:  POOLER, B.D. PARKER, and WESLEY, Circuit Judges.Peter Safirstein (Elaine S. Kusel, Ann M.
Lipton, Andrew Wilmar, and Tatiana Rodriguez, on the brief), Milberg Weiss Bershad & Schulman
LLP, New York, NY, for Plaintiffs-Appellants Rabi Abdullahi, et al. Richard Altschuler (Ali Ahmad,
Cheverly, MD, on the brief), Altschuler & Altschuler, West Haven, CT, for Plaintiffs-Appellants Ajudu
Ismaila Adamu, et al. Steven Glickstein (David Klingsberg, Maris Veidemanis, James D. Herschlein,
and Julie B. du Pont, on the brief), Kaye Scholer LLP, New York, NY, for Defendant-Appellee Pfizer,
Inc.
This consolidated appeal is from the judgments of the United States District Court for the Southern
District of New York (Pauley, J.) dismissing two complaints for lack of subject matter jurisdiction
under the Alien Tort Statute, 28 U.S.C. § 1350 (“ATS”), and in the alternative, on the ground of
forum non conveniens. Plaintiffs-Appellants Rabi Abdullahi and other Nigerian children and their
guardians sued Defendant-Appellee Pfizer, Inc. under the ATS (“the Abdullahi action”). They
alleged that Pfizer violated a customary international law norm prohibiting involuntary medical
experimentation on humans when it tested an experimental antibiotic on children in Nigeria,
including themselves, without their consent or knowledge. Plaintiffs-Appellants Ajudu Ismaila
Adamu and others, also children and their guardians who were part of Pfizer's Nigerian drug
experiment, brought a similar action against Pfizer, alleging violations of the ATS, the Connecticut
Unfair Trade Practices Act (“CUTPA”), and the Connecticut Products Liability Act (“CPLA”) (“the
Adamu action”). Pfizer moved to dismiss both actions for lack of subject matter jurisdiction and on
the basis of forum non coveniens. The district court granted the motions and both sets of plaintiffs
have appealed.
As explained below, we conclude:  (1) that the district court incorrectly determined that the
prohibition in customary international law against nonconsensual human medical experimentation
cannot be enforced through the ATS;  (2) that changed circumstances in Nigeria since the filing of
this appeal require re-examination of the appropriate forum, albeit on the basis of a legal analysis
different from that employed by the district court;  and (3) that the district court incorrectly applied
Connecticut's choice of law rules in the Adamu action. Consequently, we reverse and remand the
cases to the district court for further proceedings.
BACKGROUND
A. Pfizer's Trovan Test in Nigeria
On review of a district court's grant of a motion to dismiss, we assume as true the facts alleged in the
complaints, construing them in the light most favorable to the appellants. See Vietnam Ass'n for
Victims of Agent Orange v. Dow Chem. Co., 517 F.3d 104, 115 (2d Cir.2008). The central events at
issue in these cases took place in 1996, during an epidemic of bacterial meningitis in northern
Nigeria.1 The appellants allege that at that time, Pfizer, the world's largest pharmaceutical
corporation, sought to gain the approval of the U.S. Food and Drug Administration (“FDA”) for the
use on children of its new antibiotic, Trovafloxacin Mesylate, marketed as “Trovan.” They contend
that in April 1996, Pfizer, dispatched three of its American physicians to work with four Nigerian
doctors to experiment with Trovan on children who were patients in Nigeria's Infectious Disease
Hospital (“IDH”) in Kano, Nigeria. Working in concert with Nigerian government officials, the team
allegedly recruited two hundred sick children who sought treatment at the IDH and gave half of the
1|Conflict of Laws Cases
of which was well-established. Appellants contend that Pfizer knew that Trovan had never
previously been tested on children in the form being used and that animal tests showed that Trovan
had life-threatening side effects, including joint disease, abnormal cartilage growth, liver damage,
and a degenerative bone condition. Pfizer purportedly gave the children who were in the
Ceftriaxone control group a deliberately low dose in order to misrepresent the effectiveness of
Trovan in relation to Ceftriaxone. After approximately two weeks, Pfizer allegedly concluded the
experiment and left without administering follow-up care. According to the appellants, the tests
caused the deaths of eleven children, five of whom had taken Trovan and six of whom had taken the
lowered dose of Ceftriaxone, and left many others blind, deaf, paralyzed, or brain-damaged.
Appellants claim that Pfizer, working in partnership with the Nigerian government, failed to secure
the informed consent of either the children or their guardians and specifically failed to disclose or
explain the experimental nature of the study or the serious risks involved. Although the treatment
protocol required the researchers to offer or read the subjects documents requesting and
facilitating their informed consent, this was allegedly not done in either English or the subjects'
native language of Hausa. The appellants also contend that Pfizer deviated from its treatment
protocol by not alerting the children or their guardians to the side effects of Trovan or other risks of
the experiment, not providing them with the option of choosing alternative treatment, and not
informing them that the non-governmental organization Médecins Sans Frontières (Doctors
Without Borders) was providing a conventional and effective treatment for bacterial meningitis,
free of charge, at the same site.2
The appellants allege that, in an effort to rapidly secure FDA approval, Pfizer hastily assembled its
test protocol at its research headquarters in Groton, Connecticut, and requested and received
permission to proceed from the Nigerian government in March 1996. At the time, Pfizer also
claimed to have secured approval from an IDH ethics committee. Appellants allege, however, that
the March 1996 approval letter was backdated by Nigerian officials working at the government
hospital well after the experiments had taken place and that at the time the letter was purportedly
written, the IDH had no ethics committee.3 Appellants also contend that the experiments were
condemned by doctors, including one on Pfizer's staff at the time of the Kano trial.
In 1998, the FDA approved Trovan for use on adult patients only. After reports of liver failure in
patients who took Trovan, its use in America was eventually restricted to adult emergency care. In
1999, the European Union banned its use.
B. The Proceedings Below
In August 2001, the Abdullahi plaintiffs sued Pfizer under the ATS, alleging that the experiments
violated international law. In September 2002, the district court granted Pfizer's motion to dismiss
the Abdullahi claims on the ground of forum non conveniens, conditioned on Pfizer's consent to
litigation in Nigeria. Abdullahi v. Pfizer, Inc., No. 01 Civ. 8118(WHP), 2002 WL 31082956, at *12
(S.D.N.Y. Sept. 17, 2002) (“Abdullahi I ”). It found that Nigeria was an adequate alternative forum
despite plaintiffs' contentions about corruption in the Nigerian court system. Id. at *8-10. The
district court denied Pfizer's motion to dismiss under Rule 12(b)(6), Fed.R.Civ.P., concluding that
the plaintiffs adequately alleged that Pfizer's collusion with the Nigerian government made it a state
actor. Id. at *5-6.
Meanwhile, another group of children and guardians involved in the Trovan experiment sued in the
Federal High Court in Kano, alleging claims under Nigerian law. That case, Zango v. Pfizer
International, Inc., [2001] Suit No. FHC/K/CS/204/2001 (Nigeria), was dismissed in 2003 after
plaintiffs voluntarily discontinued the suit following the removal from the bench of the first judge
assigned to the action and the second judge's decision to decline jurisdiction for personal reasons.
Abdullahi v. Pfizer, Inc., No. 01 Civ. 8118(WHP), 2005 WL 1870811, at *5 (S.D.N.Y. Aug. 9, 2005)
(“Abdullahi III ”). On appeal to this Court from the district court's dismissal in Abdullahi I, the
Abdullahi appellants argued that the dismissal of the Zango litigation was a result of rampant
corruption, which indicated that the Nigerian judicial system could not provide an adequate
alternative forum for their action. Given an inconclusive record regarding the events leading to the
dismissal of the Zango lawsuit, we vacated the judgment and remanded for further fact-finding on
forum non conveniens. See Abdullahi v. Pfizer, Inc., 77 Fed.Appx. 48, 53 (2d Cir.2003) (summary
order) (“Abdullahi II ”).
In November 2002, following the dismissal of the Zango lawsuit, a number of the Zango plaintiffs
filed the Adamu action. They alleged that in planning the Trovan experiment in Connecticut and in
conducting the tests in Nigeria without informed consent, Pfizer violated the CUTPA, the CPLA, and
the ATS. Eventually, the Adamu action was transferred to the Southern District of New York and
consolidated with the Abdullahi action. Pfizer then moved to dismiss both cases for failure to state
a claim under the ATS and on the basis of forum non conveniens. It also moved to dismiss in
Adamu on the ground that Connecticut choice of law principles require the application of Nigerian
law, which bars suit under CUTPA and the CPLA.
The district court granted the motions. See Abdullahi III, 2005 WL 1870811;  Adamu v. Pfizer, Inc.,
399 F.Supp.2d 495 (S.D.N.Y.2005). In Abdullahi III, Judge Pauley held that while “[p]laintiffs
correctly state that non-consensual medical experimentation violates the law of nations and,
therefore, the laws of the United States,” they failed to identify a source of international law that
“provide[s] a proper predicate for jurisdiction under the ATS.” 2005 WL 1870811, at *9, 14. Noting
that “a decision to create a private right of action is one better left to legislative judgment in the
great majority of cases,” he concluded that “[a] cause of action for Pfizer's failure to get any consent,
informed or otherwise, before performing medical experiments on the subject children would
expand customary international law far beyond that contemplated by the ATS.” Id. at *13-14
(internal quotation marks omitted).
With regard to the forum non conveniens analysis, the district court declined to accept plaintiffs'
submissions concerning Pfizer's alleged bribery of Nigerian officials on the ground that they were
not based on personal knowledge. Id. at *16-17. Finding that the plaintiffs had failed to submit
specific evidence that the Nigerian judiciary would be biased against its own citizens in an action
against Pfizer, the district court alternatively held that Nigeria was an adequate alternate forum. Id.
at *16, 18.
Several months later, the district court also granted Pfizer's motion to dismiss the Adamu case.
Adamu, 399 F.Supp.2d 495. It relied on its Abdullahi III decision to hold that the plaintiffs could
not establish jurisdiction under the ATS. Id. at 501. The district court also incorporated the forum
non conveniens analysis from Abdullahi III to find that Nigeria is an adequate forum. Id. at 504.
Applying the public and private interest factors set forth in Gulf Oil Corp. v. Gilbert, 330 U.S. 501,
508-09, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), superseded by statute on other grounds as recognized in
Cowan v. Ford Motor Co., 713 F.2d 100, 103 (5th Cir.1983), the court found that while public
interest factors did not support either forum, private interest factors weighed in favor of dismissal.
Adamu, 399 F.Supp.2d. at 505-06. The district court also dismissed the Adamu plaintiffs'
Connecticut law claims, concluding that, under Connecticut choice of law principles, the action was
governed and barred by Nigerian law. Id. at 503.
The Abdullahi and Adamu plaintiffs appealed. Since then, a tectonic change has altered the
relevant political landscape. In May 2007, the state of Kano brought criminal charges and civil
2|Conflict of Laws Cases
claims against Pfizer, seeking over $2 billion in damages and restitution.4 Around the same time,
the federal government of Nigeria sued Pfizer and several of its employees, seeking $7 billion in
damages.5 None of these cases seek compensation for the subjects of the tests, who are the
appellants before this Court. Pfizer then notified this Court that in light of these recent
developments, which it believed required further consideration by the district court, it would not
seek affirmance on the basis of forum non conveniens.
DISCUSSION
The district court dismissed both actions based on its determination that it lacked subject matter
jurisdiction because plaintiffs failed to state claims under the ATS. We review dismissal on this
ground de novo. Rweyemamu v. Cote, 520 F.3d 198, 201 (2d Cir.2008). “To survive dismissal, the
plaintiff[s] must provide the grounds upon which [their] claim rests through factual allegations
sufficient ‘to raise a right to relief above the speculative level.’ ” ATSI Commc'ns, Inc. v. Shaar Fund,
Ltd., 493 F.3d 87, 98 (2d Cir.2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955,
1965, 167 L.Ed.2d 929 (2007)).6
I. The Alien Tort Statute
The Alien Tort Statute, 28 U.S.C. § 1350, provides that “[t]he district courts shall have original
jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations
or a treaty of the United States.” Included in the Judiciary Act of 1789, the statute provided
jurisdiction in just two cases during the first 191 years after its enactment. See Taveras v. Taveraz,
477 F.3d 767, 771 (6th Cir.2007). In the last thirty years, however, the ATS has functioned slightly
more robustly, conferring jurisdiction over a limited category of claims.
We first extensively examined the ATS in Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir.1980), where
we held that conduct violating the law of nations is actionable under the ATS “only where the
nations of the world have demonstrated that the wrong is of mutual, and not merely several,
concern, by means of express international accords.” Id. at 888. Following Filartiga, we concluded
that ATS claims may sometimes be brought against private actors, and not only state officials, see
Kadic v. Karadzic, 70 F.3d 232, 239 (2d Cir.1995), when the tortious activities violate norms of
“universal concern” that are recognized to extend to the conduct of private parties-for example,
slavery, genocide, and war crimes, id. at 240. This case involves allegations of both state and
individual action. In Flores v. Southern Peru Copper Corp., 414 F.3d 233 (2d Cir.2003), we clarified
that “the law of nations” in the ATS context “refers to the body of law known as customary
international law,” which “is discerned from myriad decisions made in numerous and varied
international and domestic arenas” and “does not stem from any single, definitive, readily-
identifiable source.” Id. at 247-48. These principles are rejected in their entirety by our
dissenting colleague. In Flores, we concluded that ATS jurisdiction is limited to alleged violations
of “those clear and unambiguous rules by which States universally abide, or to which they accede,
out of a sense of legal obligation and mutual concern.” Id. at 252. Applying this standard, we held
that the appellants' claim that pollution from mining operations caused lung disease failed to state a
violation of customary international law. We reasoned that the “right to life” and the “right to
health” were insufficiently definite to constitute binding customary legal norms and that there was
insufficient evidence to establish the existence of a narrower norm prohibiting intranational
pollution. Id. at 254-55.
In 2004, the Supreme Court comprehensively addressed the ATS for the first time in Sosa v. Alvarez-
Machain, 542 U.S. 692, 124 S.Ct. 2739, 159 L.Ed.2d 718 (2004). Justice Souter, writing for the
majority, clarified that the ATS was enacted to create jurisdiction over “a relatively modest set of
actions alleging violations of the law of nations” and with “the understanding that the common law
would provide a cause of action.” Id. at 720, 723. The Supreme Court confirmed that federal
courts retain a limited power to “adapt [ ] the law of nations to private rights” by recognizing “a
narrow class of international norms” to be judicially enforceable through our residual common law
discretion to create causes of action. Id. at 728-29. It cautioned, however, that courts must
exercise this power with restraint and “the understanding that the door [to actionable violations] is
still ajar subject to vigilant doorkeeping,” permitting only those claims that “rest on a norm of
international character accepted by the civilized world and defined with a specificity comparable to
the features of the 18th-century paradigms [the Supreme Court has] recognized.” Id. at 725, 729.
These 18th-century paradigms consist of offenses against ambassadors, violations of the right to
safe passage, and individual actions arising out of piracy. Id. at 724. The common theme among
these offenses is that they contravened the law of nations, admitted of a judicial remedy, and
simultaneously threatened serious consequences in international affairs. Id. at 715. Lower courts
are required to gauge claims brought under the ATS against the current state of international law,
but are permitted to recognize under federal common law only those private claims for violations of
customary international law norms that reflect the same degree of “definite content and acceptance
among civilized nations” as those reflected in the 18th-century paradigms. Id. at 732-33. The
Supreme Court in Sosa also counseled that “the determination whether a norm is sufficiently
definite to support a cause of action should (and, indeed, inevitably must) involve an element of
judgment about the practical consequences of making that cause available to litigants” in federal
courts. Id.
In this way Sosa set a “high bar to new private causes of action” alleging violations of customary
international law. Id. at 727. A federal court can recognize one only if a plaintiff identifies the
violation of a norm of customary international law that, as defined by the sources of such law that
United States courts “have long, albeit cautiously, recognized,” id. at 733-34 (referencing The
Paquete Habana, 175 U.S. 677, 700, 20 S.Ct. 290, 44 L.Ed. 320 (1900)), is sufficiently specific,
universal, and obligatory to meet the standards established by Sosa. See Sosa, 542 U.S. at 732, 124
S.Ct. 2739 (citing with approval Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 781 (D.C.Cir.1984)
(Edwards, J., concurring), and In re Estate of Marcos, Human Rights Litig., 25 F.3d 1467, 1475 (9th
Cir.1994)). Applying these principles, the Supreme Court held that the plaintiff, a Mexican national
who sued a fellow Mexican national under the ATS for allegedly aiding in his illegal abduction by
agents of the U.S. Drug Enforcement Agency, had failed to allege the violation of a customary
international law norm with the required precision. Sosa, 542 U.S. at 738, 124 S.Ct. 2739. The
Supreme Court found that the practical consequences of recognizing a general and broad customary
international law prohibition of arbitrary detention in a case involving “a single illegal detention of
less than a day, followed by the transfer of custody to lawful authorities and a prompt arraignment”
would be “breathtaking” and inappropriate. Id. at 736, 738, 124 S.Ct. 2739.
Since Sosa, this Court has reviewed three judgments dismissing claims under the ATS. In Khulumani
v. Barclay National Bank, Ltd., 504 F.3d 254 (2d Cir.2007) (per curiam), we held that the ATS
conferred jurisdiction over multinational corporations that purportedly collaborated with the
government of South Africa in maintaining apartheid because they aided and abetted violations of
customary international law. Id. at 260. In Vietnam Ass'n for Victims of Agent Orange v. Dow
Chemical Co., 517 F.3d 104 (2d Cir.2008), we concluded that the ATS did not support a claim that
the defendants violated international law by manufacturing and supplying Agent Orange and other
herbicides used by the United States military during the Vietnam War. Id. at 123. We reasoned that
the sources of law on which the appellants relied did not define a norm prohibiting the wartime use
of Agent Orange that was both universal and sufficiently specific to satisfy the requirements of Sosa.
Id. at 119-23. Similarly, in Mora v. People of the State of New York, 524 F.3d 183 (2d Cir.2008), we
held that the norm at issue-one that prohibits the detention of a foreign national without informing
him of the requirement of consular notification and access under Article 36(1)(b)(3) of the Vienna
3|Conflict of Laws Cases
Convention on Consular Relations-was insufficiently universal to support a claim under the ATS. Id.
at 208-09.
Turning now to this appeal, and remaining mindful of our obligation to proceed cautiously and self-
consciously in this area, we determine whether the norm alleged (1) is a norm of international
character that States universally abide by, or accede to, out of a sense of legal obligation;  (2) is
defined with a specificity comparable to the 18th-century paradigms discussed in Sosa;  and (3) is of
mutual concern to States.
A. The Prohibition of Nonconsensual Medical Experimentation on Humans
Appellants' ATS claims are premised on the existence of a norm of customary international law
prohibiting medical experimentation on non-consenting human subjects. To determine whether
this prohibition constitutes a universally accepted norm of customary international law, we
examine the current state of international law by consulting the sources identified by Article 38 of
the Statute of the International Court of Justice (“ICJ Statute”), to which the United States and all
members of the United Nations are parties. Flores, 414 F.3d at 250;  see, e.g., United States v.
Yousef, 327 F.3d 56, 100-01 (2d Cir.2003). Article 38 identifies the authorities that provide
“competent proof of the content of customary international law.” Flores, 414 F.3d at 251. These
sources consist of:
(a) international conventions, whether general or particular, establishing rules expressly
recognized by the contesting states;
(b) international custom, as evidence of a general practice accepted as law;
(c) the general principles of law recognized by civilized nations;
(d) ․judicial decisions and the teachings of the most highly qualified publicists of the various
nations, as subsidiary means for the determination of rules of law.
Statute of the International Court of Justice, art. 38(1), June 26, 1945, 59 Stat. 1055, 1060, T.S. No.
993 [hereinafter ICJ Statute].
The appellants ground their claims in four sources of international law that categorically forbid
medical experimentation on non-consenting human subjects:  (1) the Nuremberg Code, which states
as its first principle that “[t]he voluntary consent of the human subject is absolutely essential”;  (2)
the World Medical Association's Declaration of Helsinki, which sets forth ethical principles to guide
physicians world-wide and provides that human subjects should be volunteers and grant their
informed consent to participate in research;  (3) the guidelines authored by the Council for
International Organizations of Medical Services (“CIOMS”), which require “the voluntary informed
consent of [a] prospective subject”;  and (4) Article 7 of the International Covenant on Civil and
Political Rights (“ICCPR”), which provides that “no one shall be subjected without his free consent to
medical or scientific experimentation.” 7
The district court found that “non-consensual medical experimentation violates the law of nations
and, therefore, the laws of the United States” and cited the Nuremberg Code for support. Abdullahi
III, 2005 WL 1870811, at *9. It then noted that “[w]hile federal courts have the authority to imply
the existence of a private right of action for violations of jus cogens norms of international law,
federal courts must consider whether there exist special factors counseling hesitation in the
absence of affirmative action by Congress.” Id. (internal citations and quotation marks omitted).
The district court then separately analyzed the four sources of international law that prohibit
nonconsensual medical experimentation on humans and the Universal Declaration of Human Rights.
Id. at *11-13. It found that with the exception of the Nuremberg Code, these sources contain only
aspirational or vague language lacking the specificity required for jurisdiction. Id. at *12-13. It
also determined that because the United States did not ratify or adopt any of these authorities
except the ICCPR, and because even the ICCPR is not self-executing, none of them create binding
international legal obligations that are enforceable in federal court. Id. at *11-13. Finally, the
district court concluded that the plaintiffs failed to provide a proper predicate for ATS jurisdiction
because none of the sources independently authorizes a private cause of action and the inference of
such a cause of action is a matter best left to Congress. Id. at *13-14.8
The district court's approach misconstrued both the nature of customary international law and the
scope of the inquiry required by Sosa. It mistakenly assumed that the question of whether a
particular customary international law norm is sufficiently specific, universal, and obligatory to
permit the recognition of a cause of action under the ATS is resolved essentially by looking at two
things:  whether each source of law referencing the norm is binding and whether each source
expressly authorizes a cause of action to enforce the norm. But Sosa, as we have seen, requires a
more fulsome and nuanced inquiry. Courts are obligated to examine how the specificity of the
norm compares with 18th-century paradigms, whether the norm is accepted in the world
community, and whether States universally abide by the norm out of a sense of mutual concern. By
eschewing this inquiry, the district court did not engage the fact that norms of customary
international law are “discerned from myriad decisions made in numerous and varied international
and domestic arenas” and “[do] not stem from any single, definitive, readily-identifiable source.”
Flores, 414 F.3d at 247-48.
The district court also inappropriately narrowed its inquiry in two respects. First, it focused its
consideration on whether the norm identified by the plaintiffs is set forth in conventions to which
the United States is a party, and if so, whether these treaties are self-executing or executed by
federal legislation. While adoption of a self-executing treaty or the execution of a treaty that is not
self-executing may provide the best evidence of a particular country's custom or practice of
recognizing a norm, see Flores, 414 F.3d at 257, the existence of a norm of customary international
law is one determined, in part, by reference to the custom or practices of many States, and the broad
acceptance of that norm by the international community. Agreements that are not self-executing
or that have not been executed by federal legislation, including the ICCPR, are appropriately
considered evidence of the current state of customary international law. See Khulumani, 504 F.3d
at 284 (Katzmann, J., concurring) (noting that “[w]hether a treaty that embodies [a norm of
customary international law] is self-executing is relevant to, but is not determinative of, [the]
question” of whether the norm permits ATS jurisdiction). A formal treaty, moreover, is not the
lone primary source of customary international law. The ICJ Statute permits, and Sosa encourages,
among other things, that courts consider “international custom, as evidence of a general practice
accepted as law.” ICJ Statute, supra, at art. 38(1);  Sosa, 542 U.S. at 734, 124 S.Ct. 2739 (“[W]here
there is no treaty, and no controlling executive or legislative act or judicial decision, resort must be
had to the customs and usages of civilized nations.”) (quoting The Paquete Habana, 175 U.S. at 700,
20 S.Ct. 290).
Second, the district court's consideration of whether each source of law creates binding legal norms
failed to credit the fact that even declarations of international norms that are not in and of
themselves binding may, with time and in conjunction with state practice, provide evidence that a
norm has developed the specificity, universality, and obligatory nature required for ATS
jurisdiction. See Filartiga, 630 F.2d at 883 (“[A non-binding] Declaration creates an expectation of
adherence, and insofar as the expectation is gradually justified by State practice, a declaration may
4|Conflict of Laws Cases
by custom become recognized as laying down rules binding upon the States.”) (internal quotation
marks omitted). The district court should have considered a greater range of evidence and
weighed differently the probative value of the sources on which the appellants relied.
In sum, it was inappropriate for the district court to forego a more extensive examination of
whether treaties, international agreements, or State practice have ripened the prohibition of
nonconsensual medical experimentation on human subjects into a customary international law
norm that is sufficiently (i) universal and obligatory, (ii) specific and definable, and (iii) of mutual
concern, to permit courts to infer a cause of action under the ATS. See Sosa, 542 U.S. at 732-35, 124
S.Ct. 2739. We now proceed with such an examination.
i. Universality
The appellants must allege the violation of a norm of customary international law to which States
universally subscribe. See Sosa, 542 U.S. at 732, 124 S.Ct. 2739;  Vietnam Ass'n for Victims of Agent
Orange, 517 F.3d at 117. The prohibition on nonconsensual medical experimentation on human
beings meets this standard because, among other reasons, it is specific, focused and accepted by
nations around the world without significant exception.
The evolution of the prohibition into a norm of customary international law began with the war
crimes trials at Nuremberg. The United States, the Soviet Union, the United Kingdom and France
“acting in the interest of all the United Nations,” established the International Military Tribunal
(“IMT”) through entry into the London Agreement of August 8, 1945. M. Cheriff Bassiouni et al., An
Appraisal of Human Experimentation in International Law and Practice:  The Need for International
Regulation of Human Experimentation, 72 J.Crim. L. & Criminology 1597, 1640 & n. 220 (1981)
(internal quotation marks omitted). Annexed to the London Agreement was the London Charter,
which served as the IMT's Constitution. See Agreement for the Prosecution and Punishment of the
Major War Criminals of the European Axis Powers, with annexed Charter of the International
Military Tribunal art. 2, Aug. 8, 1945, 59 Stat. 1544, 82 U.N.T.S. 279. According to the Charter, the
IMT had the “power to try and punish persons who, acting in the interests of the European Axis
countries, whether as individuals or as members of organizations, committed,” among other
offenses, war crimes and crimes against humanity. Id. at art. 6.
The IMT tried 22 “major” Nazi war criminals leaving “lower-level” war criminals, including
“[l]eading physicians ․and leading German industrialists,” to be tried in subsequent trials by U.S.
military tribunals acting “under the aegis of the IMT.” United States Holocaust Memorial Museum,
War Crimes Trials, Holocaust Encylopedia (2008), http://www.ushmm. org/wlc/article.php?lang=
en&ModuleId=10005140. The law that authorized the creation of the U.S. military tribunals,
Control Council Law No. 10, was enacted in 1945 by the Allied Control Council, see id., an authority
through which the London Agreement signatories exerted joint-control over Germany, see
Encyclopedia Britannica, Germany, Encyclopedia Britannica Online (2009), http://search.eb.com/
eb/article-58214. Control Council Law No. 10 stated that its purpose was to “give effect to the terms
of ․the London Agreement ․and the [London] Charter,” and “to establish a uniform legal basis in
Germany for the prosecution of war criminals.” Allied Control Council No. 10, preamble, (Dec. 20,
1945), http://avalon.law.yale.edu/imt/imt10.asp. Law No. 10 expressly incorporated the London
Agreement, identifying it as an “integral part[ ] of this Law.” Id. at art. I. Law No. 10 also authorized
military tribunals of the occupying powers to prosecute individuals for the same crimes over which
the IMT had jurisdiction, including war crimes and crimes against humanity, see id. at arts. II-III, and
made military tribunal prosecutions subject to the IMT's right of first refusal, see id. at art. III.
Consequently, the U.S. military tribunals effectively operated as extensions of the IMT, see Telford
Taylor, Final Report to the Secretary of the Army on the Nuernberg War Crimes Trials Under
Control Council Law No. 107, 107 (1949) [hereinafter Report on Nuernberg War Crimes Trials],
available at http://www. loc.gov/rr/frd/Military_Law/pdf/NT_final-report.pdf (explaining that “the
trials under Law No. 10 were to be a means of carrying out such ‘declarations of criminality’ ․as the
International Military Tribunal might make” and that “[t]he first [IMT] trial and the 12 following
[military tribunal] trials ․form a single sequence based on common principles”), and Control Council
Law No. 10 served to implement the commitments undertaken in the London Agreement, see id. at 7
(noting that “the two documents supplemented each other” and “[m]ajor criminals not tried under
the one could be tried under the other”).
In August 1947, Military Tribunal 1, staffed by American judges and prosecutors and conducted
under American procedural rules, see George J. Annas, The Nuremberg Code in U.S. Courts:  Ethics
versus Expediency, in The Nazi Doctors and the Nuremberg Code 201, 201 (George J. Annas &
Michael A. Grodin eds., 1992), promulgated the Nuremberg Code as part of the tribunal's final
judgment against fifteen doctors who were found guilty of war crimes and crimes against humanity
for conducting medical experiments without the subjects' consent, Brandt, 2 Nuremberg Trials, at
181-82. Among the nonconsensual experiments that the tribunal cited as a basis for their
convictions were the testing of drugs for immunization against malaria, epidemic jaundice, typhus,
smallpox and cholera. Id. at 175-178. Seven of the convicted doctors were sentenced to death and
the remaining eight were sentenced to varying terms of imprisonment. Id. at 298-300. The
tribunal emphasized that
[i]n every single instance appearing in the record, subjects were used who did not consent to the
experiments;  indeed, as to some of the experiments, it is not even contended by the defendants that
the subjects occupied the status of volunteers.
Id. at 183. The judgment concluded that “[m]anifestly human experiments under such conditions
are contrary to the principles of the law of nations as they result from usages established among
civilized peoples, from the laws of humanity, and from the dictates of public conscience.” Id.
(emphasis added and internal quotation marks omitted). The Code created as part of the tribunal's
judgment therefore emphasized as its first principle that “[t]he voluntary consent of the human
subject is absolutely essential.” Id. at 181.
The American tribunal's conclusion that action that contravened the Code's first principle
constituted a crime against humanity is a lucid indication of the international legal significance of
the prohibition on nonconsensual medical experimentation. As Justices of the Supreme Court have
recognized, “[t]he medical trials at Nuremberg in 1947 deeply impressed upon the world that
experimentation with unknowing human subjects is morally and legally unacceptable.” United
States v. Stanley, 483 U.S. 669, 687, 107 S.Ct. 3054, 97 L.Ed.2d 550 (1987) (Brennan, J., concurring in
part and dissenting in part) (emphasis added);  see also id. at 709-10, 107 S.Ct. 3054 (O'Connor, J.,
concurring in part and dissenting in part).
Moreover, both the legal principles articulated in the trials' authorizing documents and their
application in judgments at Nuremberg occupy a position of special importance in the development
of bedrock norms of international law. United States courts examining the Nuremberg judgments
have recognized that “[t]he universal and fundamental rights of human beings identified by
Nuremberg-rights against genocide, enslavement, and other inhumane acts ․-are the direct
ancestors of the universal and fundamental norms recognized as jus cogens,” from which no
derogation is permitted, irrespective of the consent or practice of a given State. Siderman de Blake
v. Republic of Arg., 965 F.2d 699, 715 (9th Cir.1992) (cited in Sampson v. F.R.G., 250 F.3d 1145,
1150 (7th Cir.2001)). As Telford Taylor, who first served as an assistant to Justice Robert Jackson
5|Conflict of Laws Cases
during his time as Chief Prosecutor for the IMT and then became Chief of Counsel for War Crimes on
the Nuremberg trials held under the authority of Control Council Law No. 10, explained, “Nuernberg
was based on enduring [legal] principles and not on temporary political expedients, and this
fundamental point is apparent from the reaffirmation of the Nuernberg principles in Control Council
Law No. 10, and their application and refinement in the 12 judgments rendered under that law
during the 3-year period, 1947 to 1949.” Taylor, Report on Nuernberg War Crimes Trials, at 107
(emphasis added).
Consistent with this view, the Code's first principle has endured:  “[S]ignificant world opinion has
not come to the defense of the nature or manner in which the experiments were conducted in the
Nazi concentration camps.” Bassiouni et al., supra, at 1641. Rather, since Nuremberg, states
throughout the world have shown through international accords and domestic law-making that they
consider the prohibition on nonconsensual medical experimentation identified at Nuremberg as a
norm of customary international law.9
In 1955, the draft International Covenants on Human Rights was revised to add a second sentence
to its prohibition of torture and cruel, inhuman or degrading treatment or punishment. The
addition provided that “[i]n particular, no one shall be subjected without his free consent to medical
or scientific experimentation involving risk, where such is not required by his state of physical or
mental health.” Annotations on the text of the draft International Covenants on Human Rights, at
31, U.N. GAOR, 10th Sess., Annexes, agenda item 28(II), U.N. Doc. A/2929 (July 1, 1955). The clause
was later revised to offer the simpler and sweeping prohibition that “no one shall be subjected
without his free consent to medical or scientific experimentation.” ICCPR, supra, at art. 7. This
prohibition became part of Article 7 of the ICCPR, which entered into force in 1976, and is legally
binding on the more than 160 States-Parties that have ratified the convention without reservation
to the provision.10 By its terms this prohibition is not limited to state actors;  rather, it guarantees
individuals the right to be free from nonconsensual medical experimentation by any entity-state
actors, private actors, or state and private actors behaving in concert.
Its status as a norm that states conceive as legally binding-and therefore part of customary
international law-is confirmed by Article 2 of the accord, which requires that “[e]ach State Party ․
undertake[ ] to respect and to ensure to all individuals within its territory and subject to its
jurisdiction the rights recognized in the present Covenant.” ICCPR art. 2(1). The international
community's recognition in the ICCPR of its obligation to protect humans against nonconsensual
medical experimentation, regardless of the source of the action, is powerful evidence of the
prohibition's place in customary international law.
It is clear that, as the court mentioned in Sosa, the Universal Declaration of Human Rights and the
ICCPR themselves could not establish the relevant, applicable rule of international law in that case.
Sosa, 542 U.S. at 754, 124 S.Ct. 2739. Nonetheless, the ICCPR, when viewed as a reaffirmation of
the norm as articulated in the Nuremberg Code, is potent authority for the universal acceptance of
the prohibition on nonconsensual medical experimentation. As we discuss below, see infra pp.
181-83, the fact that the prohibition on medical experimentation on humans without consent has
been consciously embedded by Congress in our law and reaffirmed on numerous occasions by the
FDA demonstrates that the United States government views the norm as the source of a binding
legal obligation even though the United States has not ratified the ICCPR in full.11
In 1964, the World Medical Association adopted the Declaration of Helsinki, which enunciated
standards for obtaining informed consent from human subjects. It provided that in clinical
research combined with professional care, “[i]f at all possible, consistent with patient psychology,
the doctor should obtain the patient's freely given consent after the patient has been given a full
explanation,” and that non-therapeutic clinical research on a person “cannot be undertaken without non-IND guidelines reaffirmed the informed consent requirement. Human Subject Protection:
his free consent, after he has been fully informed.” World Med. Ass'n, Declaration of Helsinki:  Code  Foreign Clinical Studies Not Conducted Under an Investigational New Drug Application, 73 Fed.Reg.
of Ethics of the World Medical Association, art. III(3a), G.A. Res. (1964), http://www. 22,800, 22,801, 22,803, 22,804, 22,816 (Apr. 28, 2008) (codified at 21 C.F.R. pt. 312). Foreign
pubmedcentral.nih.gov/picrender.fcgi?artid= 1816102 & blobtype=pdf. The Declaration has since clinical studies not conducted under an IND must now comply with the Good Clinical Practice
been amended five times. The informed consent provision now provides that “subjects must be guidelines (“GCP”) promulgated by the International Conference on Harmonisation of Technical
volunteers and informed participants in the research project.” Declaration of Helsinki, supra, at art. Requirements for Registration of Pharmaceuticals for Human Use, 62 Fed.Reg. 25,692 (May 9,
20. The Declaration also requires that “[i]n any research on human beings, each potential subject 1997), which require informed consent to medical experimentation. 21 C.F.R. § 312.120 (2008).
must be adequately informed of the aims, methods, ․anticipated benefits and potential risks of the
study, and the discomfort it may entail” and that researchers “obtain the subject's freely-given Additional international law sources support the norm's status as customary international law.
informed consent, preferably in writing.” Id. at art. 22. The European Union embraced the norm prohibiting nonconsensual medical experimentation
through a 2001 Directive passed by the European Parliament and the Council of the European
Union. The Directive accepted the informed consent principles of the 1996 version of the
Although the Declaration itself is non-binding, since the 1960s, it has spurred States to regulate
Declaration of Helsinki. Council Directive 2001/20/EC, preamble (2), 2001 O.J. (L 121) 37(EC)
human experimentation, often by incorporating its informed consent requirement into domestic
[hereinafter 2001 Clinical Trial Directive]. It also required member States to adopt rules
laws or regulations. See Delon Human & Sev S. Fluss, The World Medical Association's Declaration
protecting individuals incapable of giving informed consent and permitting clinical trials only where
of Helsinki:  Historical and Contemporary Perspectives, 8-11 (July 24, 2001) (fifth draft), http://
“the trial subject or, when the person is not able to give informed consent, his legal representative
www.wma.net/e/ethicsunit/pdf/draft_historical_ contemporary_ perspectives.pdf (describing legal
has given his written consent after being informed of the nature, significance, implications and risks
and regulatory developments in Australia, Belgium, Brazil, China, Israel, Japan, New Zealand,
of the clinical trial.” Id. at art. (1), (2)(d). The Directive further required all member States to
Norway, Switzerland, and the United States following the Declaration of Helsinki). Currently, the
implement by 2004 domestic laws, regulations, and administrative provisions to comply with its
laws and regulations of at least eighty-four countries, including the United States, require the
informed consent requirements. Id. at art. 22(1).
informed consent of human subjects in medical research.12 That this conduct has been the subject
of domestic legislation is not, of course, in and of itself proof of a norm. See Flores, 414 F.3d at 249.
However, the incorporation of this norm into the laws of this country and this host of others is a Since 1997, thirty-four member States of the Council of Europe have also signed the Convention on
powerful indication of the international acceptance of this norm as a binding legal obligation, where, Human Rights and Biomedicine, a binding convention and a source of customary international law.
as here, states have shown that the norm is of mutual concern by including it in a variety of Convention for the Protection of Human Rights and Dignity of the Human Being with regard to the
international accords. Application of Biology and Medicine:  Convention on Human Rights and Biomedicine, art. 5, 15-16,
opened for signature Apr. 4, 1997, E.T.S. No. 164, http://conventions.coe.int/Treaty/en/Treaties/
html/164.htm [hereinafter Convention on Human Rights and Biomedicine];  Convention on Human
The history of the norm in United States law demonstrates that it has been firmly embedded for
Rights and Biomedicine, Chart of Signatures and Ratifications as of Aug. 8, 2008, http://
more than 45 years and-except for our dissenting colleague-its validity has never been seriously
conventions.coe.int/Treaty/Commun/ChercheSig.asp?NT=164 & CM =8 & DF=8/8/2008 & CL=ENG.
questioned by any court. Congress mandated patient-subject consent in drug research in 1962.
It provides that an “intervention in the health field may only be carried out after the person
Bassiouni et al., supra, at 1624 (citing 21 U.S.C. § 355(i) (1976)). In response, the FDA
concerned has given free and informed consent to it” and that the informed consent of human
promulgated its first regulations requiring the informed consent of human subjects. Tellingly, the
subjects is required for their involvement in medical research. Convention on Human Rights and
sources on which our government relied in outlawing non-consensual human medical
Biomedicine, supra, at art. 5.14 In 2005, the General Conference of the United Nations Educational,
experimentation were the Nuremberg Code and the Declaration of Helsinki, which suggests the
Scientific and Cultural Organization (UNESCO) adopted the Universal Declaration on Bioethics and
government conceived of these sources' articulation of the norm as a binding legal obligation.
Human Rights, which requires “the prior, free, express and informed consent of the person
Bassiouni et al., supra, at 1625-26 (citing 21 C.F.R. § 310.102(h) (1980)).13 Today, FDA regulations
concerned” for research-oriented treatments. Universal Declaration on Bioethics and Human
require informed consent to U.S. investigators' research, whether conducted domestically or in a
Rights, UNESCO Gen. Conf. Res., at art. 6, 33rd Sess., 33 C/Resolution 36, (Oct. 19, 2005).
foreign country, used to support applications for the approval of new drugs. See 21 C.F.R. §§
50.20, 50.23-.25, 50.27, 312.20, 312.120 (2008);  45 C.F.R. §§ 46.111, 46.116-.117 (2008).
This history illustrates that from its origins with the trial of the Nazi doctors at Nuremburg through
its evolution in international conventions, agreements, declarations, and domestic laws and
The importance that the United States government attributes to this norm is demonstrated by its
regulations, the norm prohibiting nonconsensual medical experimentation on human subjects has
willingness to use domestic law to coerce compliance with the norm throughout the world. United
become firmly embedded and has secured universal acceptance in the community of nations.
States law requires that, as a predicate to FDA approval of any new drug, both American and foreign
Unlike our dissenting colleague's customary international law analysis, which essentially rests on
sponsors of drug research involving clinical trials, whether conducted here or abroad, procure
the mistaken assumption that ratified international treaties are the only valid sources of customary
informed consent from human subjects. 21 C.F.R. §§ 312.20, 312.120 (2008);  see also Dep't of
international law for ATS purposes, see Dissent at 200-02, we reach this conclusion as a result of
Health & Human Servs., Office of Inspector Gen., The Globalization of Clinical Trials 5 (2001), http://
our review of the multiplicity of sources-including international conventions, whether general or
www.oig. hhs.gov/oei/reports/oei-01-00-00190.pdf. Sponsors conducting research under an
particular, and international custom as identified through international agreements, declarations
Investigational New Drug Application (“IND”) are obligated to adhere to FDA regulations, which
and a consistent pattern of action by national law-making authorities-that our precedent requires us
require informed consent. 21 C.F.R. § 312.20 (2008);  The Globalization of Clinical Trials, supra, at
to examine for the purpose of determining the existence of a norm of customary international law.
5. Prior to April 2008, sponsors conducting research under non-IND guidelines were obligated to
Our dissenting colleague's reasoning fails to engage the incompatibility of nonconsensual human
adhere to the ethical principles of the 1989 version of the Declaration of Helsinki or the host
testing with key sources of customary international law identified in Article 38 of the ICJ's statute,
country's regulations, whichever offered greater protection to the human subject. 21 C.F.R. §
312.120 (2007);  The Globalization of Clinical Trials, supra, at 5. The April 2008 revisions to the
6|Conflict of Laws Cases
most importantly international custom, as evidence of a general practice accepted as law, as well as
the general principles of law recognized by civilized nations. See supra pp. 174-75.
ii. Specificity
Sosa requires that we recognize causes of action only to enforce those customary international law
norms that are no “less definite [in] content ․than the historical paradigms familiar when [the ATS]
was enacted.” Sosa, 542 U.S. at 732, 124 S.Ct. 2739. The norm prohibiting nonconsensual medical
experimentation on human subjects meets this requirement. In United States v. Smith, 18 U.S. (5
Wheat) 153, 159-61, 5 L.Ed. 57 (1820), Justice Story found that “whatever may be the diversity of
definitions, ․all writers concur, in holding, that robbery or forcible depredations upon the sea ․is
piracy.” Id. at 161. We have little trouble concluding that a norm forbidding nonconsensual
human medical experimentation is every bit as concrete-indeed even more so-than the norm
prohibiting piracy that Story describes, or interference with the right of safe conducts and the rights
of ambassadors, which together are the paradigmatic norms identified in Sosa. Id. at 724, 124 S.Ct.
2739. The Nuremberg Code, Article 7 of the ICCPR, the Declaration of Helsinki, the Convention on
Human Rights and Biomedicine, the Universal Declaration on Bioethics and Human Rights, the 2001
Clinical Trial Directive, and the domestic laws of at least eighty-four States all uniformly and
unmistakably prohibit medical experiments on human beings without their consent, thereby
providing concrete content for the norm.15 The appellants allege that Pfizer knowingly and
purposefully conducted such experiments on a large scale. Whatever uncertainty may exist at the
margin is irrelevant here because appellants allege a complete failure on the part of Pfizer and the
Nigerian government to inform appellants of the existence of the Trovan experiments. These
allegations, if true, implicate Pfizer and the Nigerian government in conduct that is at the core of any
reasonable iteration of the prohibition against involuntary medical experimentation. While the
prohibition in question applies to the testing of drugs without the consent of human subjects on the
scale Pfizer allegedly conducted, we do not suggest that it would extend to instances of routine or
isolated failures by medical professionals to obtain informed consent, such as those arising from
simple negligence. The allegations in the complaints involve anything but a doctor's routine or
erroneous failure to obtain such consent from his patient.
iii. Mutual Concern
Customary international law proscribes only transgressions that are of “mutual” concern to
States-“those involving States' actions performed ․towards or with regard to the other.” Flores,
414 F.3d at 249 (differentiating matters of “mutual” concern from those of “several” concern, in
which “States are separately and independently interested”). Conduct that States have prohibited
through domestic legislation is also actionable under the ATS as a violation of customary
international law when nations of the world have demonstrated “by means of express international
accords” that the wrong is of mutual concern. Filartiga, 630 F.2d at 888. An important, but not
exclusive, component of this test is a showing that the conduct in question is “capable of impairing
international peace and security.” Flores, 414 F.3d at 249. Appellants have made both of these
showings.
As we have seen, States throughout the world have entered into two express and binding
international agreements prohibiting nonconsensual medical experimentation:  the ICCPR and the
Convention on Human Rights and Biomedicine. The entry of over 160 States into these agreements
and the European Union's passage of the 2001 Clinical Trial Directive demonstrates that States have
not only acted independently to outlaw large-scale, nonconsensual drug testing on humans, but they
have also acted in concert to do so. In other words, acting out of a sense of mutual concern, “the
7|Conflict of Laws Cases
nations [of the world] have made it their business, both through international accords and
unilateral action,” to demonstrate their intention to eliminate conduct of the type alleged in the
complaints. Filartiga, 630 F.2d at 889.
The administration of drug trials without informed consent on the scale alleged in the complaints
poses a real threat to international peace and security. Over the last two decades, pharmaceutical
companies in industrialized countries have looked to poorer, developing countries as sites for the
medical research essential to the development of new drugs. See James V. Lavery, Putting
International Research Ethics Guidelines to Work for the Benefit of Developing Countries, 4 Yale J.
Health Pol'y L. & Ethics 319, 320-21 (2004);  The Globalization of Clinical Trials, supra, at
8.16 Pharmaceutical companies recognize the potential benefits of drug trials to poor nations and
have sought to promote access to medicines and health care in underserved populations through
philanthropy and partnership with governments and NGOs. See, e.g., PhRMA, Press Releases:
 Worldwide Pharmaceutical Industry Launches Global Health Progress Initiative to Expand Efforts
to Improve Health in Developing Countries (April 16, 2008), http://www.phrma.org/news_room/
press_ releases/global_health_progress_initiative_launched_to_improve_health_in_deve loping_coun
tries/ (describing initiative by worldwide pharmaceutical industry to “further access to medicines;
 build capacity of health workers in developing nations;  advocate for global action to address health
challenges;  and continue R & D to develop new tools to fight diseases that plague the developing
world”);  PhRMA, Profile2008:  Pharmaceutical Industry 42 (2008), http://www.phrma.org/files/
2008% 20Profile.pdf (describing contributions by American pharmaceutical companies to the
promotion of global access to medicines and health care). This trend offers the possibility of
enormous health benefits for the world community. Life-saving drugs can potentially be
developed more quickly and cheaply, and developing countries may be given access to cutting edge
medicines and treatments to assist underresourced and understaffed public health systems, which
grapple with life-threatening diseases afflicting their populations.17
The success of these efforts promises to play a major role in reducing the cross-border spread of
contagious diseases, which is a significant threat to international peace and stability. The
administration of drug trials without informed consent on the scale alleged in the complaints
directly threatens these efforts because such conduct fosters distrust and resistance to international
drug trials, cutting edge medical innovation, and critical international public health initiatives in
which pharmaceutical companies play a key role. This case itself supplies an exceptionally good
illustration of why this is so. The Associated Press reported that the Trovan trials in Kano
apparently engendered such distrust in the local population that it was a factor contributing to an
eleven month-long, local boycott of a polio vaccination campaign in 2004, which impeded
international and national efforts to vaccinate the population against a polio outbreak with
catastrophic results.18 According to the World Health Organization, polio originating in Nigeria
triggered a major international outbreak of the disease between 2003 and 2006, causing it to spread
across west, central, and the Horn of Africa and the Middle East, and to re-infect twenty previously
polio-free countries.19
The administration of drug trials without informed consent also poses threats to national security
by impairing our relations with other countries. Seven of the world's twelve largest
pharmaceutical manufacturers-a group that includes Pfizer-are American companies. Global 500,
Fortune, July 21, 2008, http://money.cnn.com/magazines/fortune/global500/2008/industries/21/
index.html. Consequently, American companies are likely to be sponsors of medical experiments on
human subjects abroad.20 As this case illustrates, the failure to secure consent for human
experimentation has the potential to generate substantial anti-American animus and hostility.
Unsurprisingly, as noted above, see supra pp. 201-02, our government actively attempts to prevent
this practice in foreign countries. For example, federal law requires that data generated from
testing on human subjects abroad that is used to seek regulatory approval for a given drug must, at
minimum, be the result of testing conducted consistent with the requirements of informed consent.
Consequently, the U.S. government denies access to the U.S. market for any new drug unless the
drug's research data is generated in a manner consistent with the customary international law norm
prohibiting drug trials on human subjects without informed consent.
For these reasons, we hold that the appellants have pled facts sufficient to state a cause of action
under the ATS for a violation of the norm of customary international law prohibiting medical
experimentation on human subjects without their consent. In such an instance, ATS jurisdiction
exists over plaintiffs' claims. The district court determined that the norm existed, but concluded
that because no single source recognizing the norm was legally binding on the United States and
created a private cause of action, it could not infer such a right under the ATS. Presumably, on this
basis, it simultaneously held that there was no subject matter jurisdiction over plaintiffs' claims.
Under Sosa, this approach was not correct. Sosa makes clear that the critical inquiry is whether the
variety of sources that we are required to consult establishes a customary international law norm
that is sufficiently specific, universally accepted, and obligatory for courts to recognize a cause of
action to enforce the norm. Nothing in Sosa suggests that this inquiry can be halted if some of the
sources of international law giving rise to the norm are found not to be binding or not to explicitly
authorize a cause of action.
We believe that the issues raised by this appeal regarding customary international law are framed
by our analysis and by that of our dissenting colleague. He contends that our analysis is created
from “whole cloth.” Dissent at 191. We believe that his approach to customary international law
is unselfconsciously reactionary and static. The approach does not accommodate itself to the
normative world that, by their commitments and conduct over the past fifty years, states-including
our own-have shown they believe to exist.
B. State Action
A private individual will be held liable under the ATS if he “acted in concert with” the state, i.e.,
“under color of law.” Kadic, 70 F.3d at 245. In making this determination, courts look to the
standards developed for finding state action in claims brought under 42 U.S.C. § 1983. Id. Under §
1983, state action may be found when “there is such a ‘close nexus between the State and the
challenged action’ that seemingly private behavior ‘may be fairly treated as that of the State itself.’ ”
Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass'n, 531 U.S. 288, 295, 121 S.Ct. 924, 148
L.Ed.2d 807 (2001) (quoting Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 42
L.Ed.2d 477 (1974)). That nexus may exist “where a private actor has operated as a willful
participant in joint activity with the State or its agents,” Gorman-Bakos v. Cornell Coop. Extension of
Schenectady County, 252 F.3d 545, 551-52 (2d Cir.2001) (quoting Loce v. Time Warner
Entertainment Advance/Newhouse Partnership, 191 F.3d 256, 266 (2d Cir.1999)), or “acts together
with state officials or with significant state aid,” Kadic, 70 F.3d at 245. Pfizer meets this test.
The Appellants have alleged that the Nigerian government was involved in all stages of the Kano
test and participated in the conduct that violated international law. They allege that the Nigerian
government provided a letter of request to the FDA to authorize the export of Trovan, arranged for
Pfizer's accommodations in Kano, and facilitated the nonconsensual testing in Nigeria's IDH in Kano.
Despite overcrowding due to concurrent epidemics, the Nigerian government extended the
exclusive use of two hospital wards to Pfizer, providing Pfizer with control over scarce public
resources and the use of the hospital's staff and facilities to conduct the Kano test, to the exclusion
of MSF.
8|Conflict of Laws Cases
The unlawful conduct is alleged to have occurred in a Nigerian facility with the assistance of the
Nigerian government and government officials and/or employees from the IDH and Aminu Kano
Teaching Hospital. Pfizer's research team in Kano was comprised of three American physicians,
Dr. Abdulhamid Isa Dutse (a physician in the Aminu Kano Teaching Hospital), and three other
Nigerian doctors. The American and Nigerian members of Pfizer's team allegedly jointly
administered the Kano test. Finally, in addition to assisting with the Kano test, Nigerian officials
are alleged to have conspired to cover up the violations by silencing Nigerian physicians critical of
the test and by back-dating an “approval letter” that the FDA and international protocol required to
be provided prior to conducting the medical experiment. In addition to these allegations, the
Adamu plaintiffs explicitly allege that the Nigerian government “was intimately involved and
contributed, aided, assisted and facilitated Pfizer's efforts to conduct the Trovan test,” “acted in
concert with Pfizer,” and, according to a Nigerian physician involved in the Trovan experimentation,
appeared to “back[ ]” the testing. At the pleading stage, these contentions meet the state action test
because they adequately allege that the violations occurred as the result of concerted action
between Pfizer and the Nigerian government.
II. Forum Non Conveniens
As an alternative to dismissal for failure to state a claim under the ATS, the district court dismissed
the actions on the ground of forum non conveniens. Appellants raised this issue on appeal.
Ordinarily, we review a forum non conveniens dismissal for abuse of discretion. Norex Petroleum
Ltd. v. Access Indus., Inc., 416 F.3d 146, 153 (2d Cir.2005). Since filing this appeal, however, Pfizer
has notified the Court that in light of recent developments, in particular the initiation of proceedings
by the federal government of Nigeria and the state of Kano against Pfizer and certain of its
employees, it would not seek affirmance of the judgment on the basis of forum non conveniens.
The appellants agreed and also requested that the issue be remanded. We accede to this request.
Although we are not now called upon definitively to review the district court's application of
forum non conveniens, in view of the frequency with which this issue has arisen and remained
unsettled in this case, we offer additional guidance to assist the parties and the district court. The
three-step analysis set forth in Iragorri v. United Techs. Corp., 274 F.3d 65, 71-75 (2d Cir.2001) (en
banc), applies. In this litigation, the second step of the analysis, which requires the district court to
consider the adequacy of the alternative forum, is pivotal. Dismissal is not appropriate if an
adequate and presently available alternative forum does not exist. Norex, 416 F.3d at 159. A
forum in which defendants are amenable to service of process and which permits litigation of the
dispute is generally adequate. Id. at 157. Such a forum may nevertheless be inadequate if it does
not permit the reasonably prompt adjudication of a dispute, if the forum is not presently available,
or if the forum provides a remedy so clearly unsatisfactory or inadequate that it is tantamount to no
remedy at all. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254-55 & n. 22, 102 S.Ct. 252, 70 L.Ed.2d
419 (1981);  USHA (India), Ltd. v. Honeywell Int'l, Inc., 421 F.3d 129, 136 (2d Cir.2005);  Norex, 416
F.3d at 160.
The defendant bears the burden of establishing that a presently available and adequate
alternative forum exists, and that the balance of private and public interest factors tilts heavily in
favor of the alternative forum. USHA (India), Ltd., 421 F.3d at 135;  PT United Can Co. v. Crown
Cork & Seal Co., Inc., 138 F.3d 65, 74 (2d Cir.1998). Absent a showing of inadequacy by a plaintiff,
“considerations of comity preclude a court from adversely judging the quality of a foreign justice
system.” PT United Can Co., 138 F.3d at 73. Accordingly, while the plaintiff bears the initial
burden of producing evidence of corruption, delay or lack of due process in the foreign forum, the
defendant bears the ultimate burden of persuasion as to the adequacy of the forum. See, e.g.,
Norex, 416 F.3d at 159-160.
When the district court granted Pfizer's motion, it identified the pivotal issue as whether the
plaintiffs produced sufficient evidence to show that Nigeria is an inadequate alternative forum.
Abdullahi III, 2005 WL 1870811, at *15. Having found that they had not, it concluded that Nigeria
was an adequate forum. Id. at *16-18. In so doing, the district court omitted an analysis of
whether Pfizer discharged its burden of persuading the court as to the adequacy and present
availability of the Nigerian forum and improperly placed on plaintiffs the burden of proving that the
alternative forum is inadequate. Cf. DiRienzo v. Philip Servs. Corp., 294 F.3d 21, 30 (2d Cir.2002)
(holding that it is error not “to hold defendants to their burden of proof” of the Gilbert factors). On
remand, the district court will have an opportunity to reassess this issue, as well as the relationship
between Fed.R.Civ.P. 44.1 and the Federal Rules of Evidence.
III. Choice of Law
The district court dismissed the Adamu plaintiffs' claims under the Connecticut Unfair Trade
Practices Act and the Connecticut Products Liability Act on the ground that Connecticut choice of
law principles applied and called for the application of Nigerian law. Adamu, 399 F.Supp.2d at 501-
03. “We review the district court's choice of law de novo.” Fin. One Pub. Co. Ltd. v. Lehman Bros.
Special Fin., Inc., 414 F.3d 325, 331 (2d Cir.2005).
The district court correctly determined that Connecticut choice-of-law rules applied because it
was obligated to apply the state law that would have been applicable if the case had not been
transferred from Connecticut to New York. See Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805,
11 L.Ed.2d 945 (1964). Under Connecticut law, lex loci delicti, “the doctrine that the substantive
rights and obligations arising out of a tort controversy are determined by the law of the place of
injury,” typically applies. O'Connor v. O'Connor, 201 Conn. 632, 637, 519 A.2d 13 (1986). Lex loci
delicti would require the application of Nigerian law because the Adamu plaintiffs' injuries are
alleged to have occurred there. Connecticut, however, has conspicuously retreated from a rigid
application of the doctrine. The Connecticut Supreme Court held that lex loci delicti does not apply
to a tort claim when doing so would undermine expectations of the parties or an important state
policy, produce an arbitrary and irrational result, or where “reason and justice” counsel for the
application of a different principle. Id. at 637, 648, 650, 519 A.2d 13. In such cases, Connecticut
courts are required to apply the “most significant relationship” analysis set forth in the Restatement
(Second) of Conflict of Laws §§ 6 & 145 (1971) [hereinafter Restatement (Second)]. O'Connor, 201
Conn. at 649-50, 519 A.2d 13.
Section 145(1) of the Restatement provides that “[t]he rights and liabilities of the parties with
respect to an issue in tort are determined by the local law of the state which, with respect to that
issue, has the most significant relationship to the occurrence and the parties under the principles
stated in § 6.” Restatement (Second) § 145(1). Section 6(2), in turn, provides that where a state is
not guided by a statutory directive on choice of law,
the factors relevant to the choice of the applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states in the
determination of the particular issue,
(d) the protection of justified expectations,
9|Conflict of Laws Cases
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
Restatement (Second) § 6(2). The Connecticut Supreme Court has determined that Section 145(2)
provides courts with guidance regarding the evaluation of the policy choices set out in Sections
145(1) and 6(2). O'Connor, 201 Conn. at 652, 519 A.2d 13. Section 145(2) assists with the
application of the principles of Section 6 to tort cases by calling for consideration of:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, 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.
Restatement (Second) § 145(2). These factors are “to be evaluated according to their relative
importance with respect to the particular issue.” Id.
The district court correctly decided to apply Sections 6 and 145 of the Restatement rather than lex
loci delicti. It applied the factors in Section 145(2) to determine whether Connecticut or Nigeria
has the most significant relationship to the conduct at issue, which it identified as “Pfizer's failure to
inform the children or their parents about the potential problems with Trovan, and the
administration of Trovan and low dosage of Ceftriaxone.” Adamu, 399 F.Supp.2d at 503 (citations
omitted). It reasoned that “the Nigerian contacts to this litigation are stronger than Connecticut's”
and noted in particular that both the plaintiffs' injuries and Pfizer's alleged conduct occurred in
Nigeria, that the plaintiffs were Nigerian residents, and that “the parties' relationship is centered” in
Nigeria. Id. It determined that most of the factors of Section 145(2) point toward applying Nigerian
law and that the “sole basis” for the applicability of Connecticut law was that “Pfizer performed
research and development with respect to Trovan and planned the experiment in Connecticut.” Id.
For these reasons, it concluded that Nigeria's interests were superior and that its law should apply.
Id.
Although the district court correctly identified some of the pertinent factors, it ultimately erred in
its application of the “most significant relationship” test because it did not factor into its Section
145(2) analysis the integral factors set out in Section 6(2). It did not, for example, discuss “the
relevant policies of the forum” or “the relevant policies of other interested states and the relative
interests of those states in the determination of the particular issue.” Restatement (Second) §
6(2)(b)-(c). Nor did it analyze what “justified expectations” existed that could have prompted
Pfizer reasonably to believe that its conduct in Connecticut would not expose it to Connecticut law,
or how Pfizer would have been disadvantaged by litigating these claims in Connecticut. Id. §
6(2)(d). Finally, the district court did not evaluate its own ability to determine and apply
Connecticut, as opposed to Nigerian, law. Id. § 6(2)(g). For these reasons, we vacate the
dismissal of the state law claims and remand to the district court for further consideration.
CONCLUSION
For the foregoing reasons, we REVERSE the judgments of the district court and REMAND for further
proceedings.
The majority has undertaken to define a “firmly established” norm of international law, heretofore
unrecognized by any American court or treaty obligation, on the basis of materials inadequate for
the task. In deviating from our settled case law, the majority identifies no norm of customary
international law, it creates a new norm out of whole cloth. Because the majority's analysis
misconstrues-rather than vindicates-customary international law, I respectfully dissent.
Proceeding with “extraordinary care and restraint,” Flores v. S. Peru Copper Corp., 414 F.3d 233,
248 (2d Cir.2003), this Court has upheld jurisdiction under the Alien Tort Statute, 28 U.S.C. § 1350
(“ATS”), in only a handful of cases alleging violations of the most firmly established international
law norms, see Kadic v. Karadzic, 70 F.3d 232, 241-43 (2d Cir.1995) (genocide and war crimes);
 Amerada Hess Shipping Corp. v. Argentine Republic, 830 F.2d 421, 426 (2d Cir.1987), rev'd on other
grounds, 488 U.S. 428, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) (free passage of neutral ship in
international waters);  Filartiga v. Pena-Irala, 630 F.2d 876, 878 (2d Cir.1980) (state-administered
torture). In Sosa v. Alvarez-Machain, the Supreme Court identified three such “paradigmatic”
norms, namely “violation of safe conducts, infringement of the rights of ambassadors, and piracy.”
542 U.S. 692, 724, 124 S.Ct. 2739, 159 L.Ed.2d 718 (2004). Rather than declare that list exhaustive
for purposes of the ATS, the Court held that “any claim based on the present-day law of nations
[must] rest on a norm of international character accepted by the civilized world and defined with a
specificity comparable to the features of the 18th-century paradigms we have recognized.” Id. at
725, 124 S.Ct. 2739. Accordingly, we are charged with “vigilant doorkeeping” when reviewing ATS
claims to ensure that they rest on “a narrow class of international norms” comparable to the
paradigms identified by the Supreme Court. Id. at 729, 124 S.Ct. 2739.
The majority identifies three criteria that must be satisfied before a violation of international law
can be actionable under the ATS:  that the norm is (1) specific and definable, (2) universally adhered
to out of a sense of legal obligation, and (3) a matter of mutual concern, namely a matter “involving
States' actions performed towards or with regard to the other.” Flores, 414 F.3d at 249 (internal
quotation and alterations omitted). I agree with the methodology used by the majority to
determine whether a norm falls within the jurisdictional grant of the ATS, but I do not agree with
their conclusion that a norm against non-consensual medical experimentation on humans by private
actors is (1) universal and obligatory or (2) a matter of mutual concern.
The majority relies on eight sources of customary international law to support its determination
that a norm against non-consensual medical experimentation on humans by private actors is
universal and obligatory. However, this evidence falls far short of the quantum necessary to
establish the existence of such a norm:  (1) the International Covenant on Civil and Political Rights
has been described by the Supreme Court as a “well-known international agreement[ ] that despite
[its] moral authority, ha[s] little utility,” in defining international obligations, Sosa, 542 U.S. at 734,
124 S.Ct. 2739, and moreover, it does not apply to private actors, such as the Defendant in this
action;  (2) the Council of Europe's Convention on Human Rights and Biomedicine-a regional
convention-was not ratified by the most influential nations in the region, such as France, Germany,
Italy, the Netherlands, Russia and the United Kingdom, and it was promulgated on April 4, 1997, one
year after the conduct at issue in this litigation;  (3) the UNESCO Universal Declaration of Bioethics
and Human Rights of 2005 and (4) the European Parliament Clinical Trial Directive of 2001 both
also post-date the relevant time period by several years;  (5) the Declaration of Helsinki issued by
the World Medical Association, a private entity, and (6) the International Ethical Guidelines for
Research Involving Human Subjects promulgated by the Council for International Organizations for
Medical Sciences, another private entity, “express[ ] the sensibilities and the asserted aspirations
and demands of some countries or organizations” but are not “statements of universally-recognized
10 | C o n f l i c t o f L a w s C a s e s
legal obligations,” Flores, 414 F.3d at 262;  (7) states' domestic laws, which, unsupported by express
international accords, are not “significant or relevant for purposes of customary international law,”
id. at 249;  and (8) the so-called Nuremberg Code, a statement of principles that accompanied a
criminal verdict, possesses at best “subsidiary” value as a judicial decision, Statute of the
International Court of Justice art. 38, June 26, 1945, 59 Stat. 1031, 33 U.N.T.S. 993 (“ICJ Statute”).
Taken together, this evidence falls short of charting the existence of a universal and obligatory
international norm actionable against non-government actors under the ATS.1
In support of its determination that non-consensual medical experimentation by private actors is a
matter of mutual concern, the majority reasons that non-consensual medical experiments breed
distrust of medical interventions and thereby accelerate the spread of infectious diseases across
international borders. It is not enough, however, that tortious conduct could create some sort of
international consequence. In order for conduct to be a matter of mutual concern, it must
“threaten[ ] serious consequences in international affairs.” Sosa, 542 U.S. at 715, 124 S.Ct. 2739.
Such is the case when an ambassador is assaulted, for example, because the assault “impinge [s]
upon the sovereignty of the foreign nation and if not adequately redressed could rise to an issue of
war.” Id. Non-consensual medical experimentation by private actors simply does not present the
same grave risk of serious consequences in international affairs and is therefore not a matter of
mutual concern.
For these reasons, I conclude that non-consensual medical experimentation by private actors,
though deplorable, is not actionable under international law and would therefore affirm the district
court's dismissal of Plaintiffs' complaints.
DISCUSSION
I. Universal and Legally Obligatory Adherence
In order for a principle to become a norm of customary international law, states must universally
abide by it out of a sense of legal obligation, and not merely aspiration. See Flores, 414 F.3d at 248.
It might seem obvious, but before one can determine whether a principle is universally followed,
one must define the principle in question. Like domestic law, international law is not a monolith-a
unitary set of rules applying indiscriminately to all actors that come within its reach. To the
contrary, international law consists of rules that govern only states, rules that apply to private
parties-individuals and corporations-and other rules that regulate both evenhandedly. See, e.g.,
Restatement (Third) of Foreign Relations of the United States § 101 (1987) ( “Restatement
(Third)”). As a result, the Supreme Court has required courts deciding whether a principle is a
customary international law norm to consider “whether international law extends the scope of
liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private
actor such as a corporation or individual.” Sosa, 542 U.S. at 732 n. 20, 124 S.Ct. 2739;  see also id. at
760, 124 S.Ct. 2739 (Breyer, J., concurring) (“The norm must extend liability to the type of
perpetrator (e.g., a private actor) the plaintiff seeks to sue.”).
The majority lists the norm at issue here as the prohibition of “medical experimentation on non-
consenting human subjects,” Maj. Op. at 174-75, and proceeds to analyze that norm without regard
to the alleged violator, see id. at 174-88. Put another way, the majority's analysis would be no
different if Plaintiffs had sued the Nigerian government, instead of, or in addition to, Pfizer. Such a
broad, simplified definition ignores the clear admonitions of the Supreme Court-and conflicts with
prior decisions of this Court-that a customary international law norm cannot be divorced from the
identity of its violator. The majority's analysis omits this critical consideration. As a result, the
majority opinion presents only half of the equation. To my mind, the majority should have asked
whether customary international law prohibits private actors from medical experimentation on
non-consenting human subjects. That question must be answered in the negative.
A. The Majority's Sources of Customary International Law
In Flores, we explained some of the difficulties inherent in determining what offenses violate
customary international law:
Customary international law is discerned from myriad decisions made in numerous and varied
international and domestic arenas. Furthermore, the relevant evidence of customary international
law is widely dispersed and generally unfamiliar to lawyers and judges. These difficulties are
compounded by the fact that customary international law ․does not stem from any single, definitive,
readily-identifiable source.
414 F.3d at 247-48. We have consistently looked to the ICJ Statute as the starting point for
determining the proper sources of international law. See, e.g., id. at 250-51;  United States v.
Yousef, 327 F.3d 56, 100-03 (2d Cir.2003). That statute lists:  (1) “international conventions,
whether general or particular, establishing rules expressly recognized by the contesting states”;  (2)
“international custom, as evidence of general practice accepted as law”;  (3) “the general principles
of law recognized by civilized nations”;  and, in certain circumstances (4) “judicial decisions and the
teachings of the most highly qualified publicists of the various nations, as subsidiary means for the
determination of rules of law.” ICJ Statute art. 38.
The ability to pick and choose from this seemingly limitless menu of sources presents a real threat
of “creative interpretation.” Flores, 414 F.3d at 248;  see also Amerada Hess, 830 F.2d at 429
(Kearse, J., dissenting). To mitigate this risk, and to prevent courts from becoming “roving
commission [s],” Flores, 414 F.3d at 262, we have, in our cases, methodically assessed the weight
and relative influence of not only each class of sources listed in the ICJ Statute, but many individual
sources within each class. The near-infinite list of international law sources makes adherence to
this precedent of paramount importance, for our analysis demonstrates that not every source of
international law carries equal weight.
Instead of following and applying our framework, the majority substitutes in its place a compelling
narrative. Over the course of only a few pages, the majority employs several sources that it
believes demonstrate a customary norm against medical experimentation by non-state entities and
weaves them together to reach its conclusion. See Maj. Op. at 175-85. Nowhere does the majority
examine these sources in the context required by Sosa. The majority does not discuss the weight of
these sources, how they collectively demonstrate a customary norm, or how evidence supporting
that norm compares with our ATS precedent. Had they done so, I am hopeful that my colleagues
would reach the same conclusion that I do-that medical experimentation by private actors, while
reprehensible, is not actionable under international law.
1. Treaties & Conventions
In Flores, we noted that treaties are the strongest evidence of customary international law because
they “create legal obligations akin to contractual obligations on the States parties to them.” 414
F.3d at 256. “[W]e look primarily to the formal lawmaking and official actions of States ․as
evidence of the established practices of States.” Yousef, 327 F.3d at 103. But not all treaties are
equal. Although “[a]ll treaties that have been ratified by at least two States provide some evidence
of the custom and practice of nations ․a treaty will only constitute sufficient proof of a norm of
11 | C o n f l i c t o f L a w s C a s e s
customary international law if an overwhelming majority of States have ratified the treaty.” Flores,
414 F.3d at 256. Moreover, the “evidentiary weight to be afforded to a given treaty varies greatly
depending on (i) how many, and which, States have ratified the treaty, and (ii) the degree to which
those States actually implement and abide by the principles set forth in the treaty.” Id. at 256-57.
For instance, treaties ratified by the United States are of greater evidentiary value if they are either
self-executing or executed through acts of Congress. See, e.g., id. at 257;  Khulumani v. Barclay Nat'l
Bank Ltd., 504 F.3d 254, 284 (2d Cir.2007) (Katzmann, J., concurring).
The majority relies primarily on two treaties.
a. International Covenant on Civil and Political Rights
The International Covenant on Civil and Political Rights, Dec. 9, 1966, S. Exec. Doc. E, 95-2, 999
U.N.T.S. 171, 6 I.L.M. 368 (ratified by the United States June 8, 1992) (“ICCPR”) “guarantees a broad
spectrum of civil and political rights to individuals within signatory nations.” United States v.
Duarte-Acero, 296 F.3d 1277, 1282 (11th Cir.2002). One of those rights-to be free of non-
consensual medical or scientific experimentation-is stated in Article 7.
The ICCPR is not appropriate evidence of customary international law for at least two reasons.
First, the Supreme Court in Sosa explicitly described the ICCPR as a “well-known international
agreement[ ] that, despite [its] moral authority, ha[s] little utility under the standard set out in this
opinion,” because the “United States ratified [it] on the express understanding that it was not self-
executing and so did not itself create obligations enforceable in the federal courts.” 542 U.S. at 734-
35, 124 S.Ct. 2739 (emphasis added).
Second, whatever limited weight the ICCPR has with regard to state action, it does nothing to show
that a norm prohibiting involuntary medical experimentation applies to non-state entities. In
citing its seemingly universal language, the majority overlooks the ICCPR's operative section, which
requires that “[e]ach State Party ․undertake[ ] to respect and to ensure to all individuals within its
territory and subject to its jurisdiction the rights recognized in the present Covenant.” ICCPR art.
2(1). Thus, despite its broad text, the ICCPR by its own terms, only governs “the relationship
between a State and the individuals within the State's territory.” Duarte-Acero, 296 F.3d at 1283.
Because the ICCPR only creates obligations flowing from a state to persons within its territory, a
non-state actor cannot be said to have violated it. Thus, the ICCPR was relevant in Filartiga
(decided before the Supreme Court limited its utility), in the context of state-administered torture of
one of its citizens in contravention of one of the rights guaranteed by states in the ICCPR. See 630
F.2d at 884. But whatever its evidentiary value had Plaintiffs sued the Nigerian government, the
ICCPR clearly has none where the question is whether international law includes a norm actionable
against a private corporation.
b. Convention on Human Rights and Biomedicine
The second treaty cited by the majority is the Convention on Human Rights and Biomedicine, Apr. 4,
1997, E.T.S. No. 164 (the “Convention”), promulgated by the Council of Europe. See Maj. Op. at 183.
Articles 5 2and 16 3 of the Convention require that the subject of scientific research give his or her
informed consent, which may be withdrawn at any time.
The first problem with the majority's reliance on the Convention is that it is a regional agreement
not signed by the most influential states in the region. Membership in the Council of Europe is
limited to European states. See Statute of the Council of Europe, art. 4, May 5, 1949, E.T.S. No. 1.   It
is difficult to see how the Convention demonstrates the universality of the medical experimentation
principle when its signatories are limited to one continent. The majority also notes that the
Convention has been signed by thirty-four states, see Maj. Op. at 183, but overlooks that it has only
been ratified by twenty-two, and a treaty only evidences the customs and practices of states that
have ratified it. Flores, 414 F.3d at 256. Lastly, and perhaps more importantly, the Convention is
lacking even as evidence of a European norm, since it has not been ratified by the more influential
European states, including France, Germany, Italy, the Netherlands, Russia and the United Kingdom,
and a treaty's evidentiary value increases along with the influence in international affairs of the
states that have ratified it. See id. at 257;  Convention on Human Rights and Biomedicine, Chart of
Signatures and Ratifications as of December 23, 2008, http://conventions.coe. int/Treaty/
Commun/ChercheSig.asp?NT =164 & CM=8 & DF= 12/23/2008 & CL=ENG (“Convention
Ratifications Chart”).
A second, more fundamental problem with the majority's reliance on the Convention is that it was
promulgated after the conduct at issue here. I know of no authority for an international ex post
facto definition of the law of nations by later signed treaties. Cf. Vietnam Ass'n for Victims of Agent
Orange v. Dow Chem. Co., 517 F.3d 104, 118 (2d Cir.2008) (“The United States did not ratify the
1925 Geneva Protocol until 1975. Accordingly, the Protocol cannot be said to have constituted ‘a
treaty of the United States,’ 28 U.S.C. § 1350, during the period relevant to this appeal.”). Plaintiffs
allege that the Trovan testing occurred in March and April of 1996, but the Convention was not
opened for signature until April 4, 1997, and did not bind any state until Slovakia's ratification on
January 15, 1998. See Flores, 414 F.3d at 256(“A State only becomes bound by-that is, becomes a
party to-a treaty when it ratifies the treaty.”);   Convention Ratifications Chart. The Convention is
without import to this inquiry. Two other post-1996 sources cited by the majority, the 2005
UNESCO Universal Declaration on Bioethics and Human Rights and the 2001 European Parliament
Clinical Trial Directive share equal evidentiary irrelevance for the same reason.
2. Multinational Declarations of Principle
Plaintiffs and the majority cite several multinational declarations, including the World Medical
Association's Declaration of Helsinki and the International Ethical Guidelines for Research Involving
Human Subjects promulgated by the Council for International Organizations of Medical Sciences
(“CIOMS Guidelines”), as additional evidence that the prohibition against non-consensual medical
experimentation applies to non-state actors. In doing so, the majority somehow overlooks our
decisions in Flores and Yousef.
In Flores, plaintiffs sought to demonstrate customary international law by reference to
multinational declarations. In response, we noted that a declaration, “which may be made by a
multinational body, or by one or more States, customarily is a ‘mere general statement of policy
[that] is unlikely to give rise to ․obligation[s] in any strict sense.’ ” 414 F.3d at 262 (quoting 1
Oppenheim's International Law 1189 (Sir Robert Jennings & Sir Arthur Watts, eds., 9th ed.1996))
(alterations in original). “Such declarations are almost invariably political statements-expressing
the sensibilities and the asserted aspirations and demands of some countries or organizations-
rather than statements of universally-recognized legal obligations.” Id. As a result, we concluded
that “such declarations are not proper evidence of customary international law.” Id. (emphasis
added).
In Flores, the declarations we rejected were put forth by international governmental bodies, the
Organization of American States and the United Nations Conference on Environment and
Development. Id. at 263. Here, the two declarations embraced by the majority were put forward
by entirely private organizations-hardly evidence of the state of international law. The Declaration
of Helsinki was adopted by the World Medical Association, a group comprised not of member states,
12 | C o n f l i c t o f L a w s C a s e s
but of physicians and private national medical associations. “The World Medical Association
(WMA) is an international organization representing physicians ․[and] has always been an
independent confederation of free professional associations.” See The World Medical Association,
“About the WMA,” http://www.wma.net/e/about/index.htm. The express terms of the Declaration
of Helsinki make it abundantly clear that it is hortatory, and not obligatory:  “The World Medical
Association (WMA) has developed the Declaration of Helsinki as a statement of ethical principles․”
See World Med. Ass'n, Declaration of Helsinki:  Ethical Principles for Medical Research Involving
Human Subjects art. A(1), June 1964. Similarly, CIOMS is “an international non-governmental,
non-profit organization.” CIOMS, “What is CIOMS?”, http://www.cioms.ch/jan2008_what_is_
cioms.pdf.
Treating these well-meaning, aspirational, but private, declarations as sources of international law
runs counter to our observation in Yousef that “no private person-or group of men and women such
as comprise the body of international law scholars-creates the law.” 327 F.3d at 102. This is so
for good reason. As we have seen in our ATS jurisprudence, international custom gives rise to
legally enforceable obligations. To include the political statements of private organizations in the
select and conscribed group of sources capable of creating international law would enfranchise non-
democratic, unaccountable entities with governmental authority. As a result, these declarations
are “not proper evidence of customary international law.” Flores, 414 F.3d at 262.
The majority focuses its lens on one line in Filartiga for the proposition that a “declaration may by
custom become recognized as laying down rules binding upon the States.” Maj. Op. at 177 (quoting
Filartiga, 630 F.2d at 883). In Filartiga, we were discussing a United Nations declaration, which
though not binding, “creates an expectation of adherence” because it “specif [ies] with great
precision the obligations of member nations.” 630 F.2d at 883. The declarations relied on by the
majority were not put forth by a governmental body such as the United Nations but by wholly
private organizations, incapable of creating legally binding obligations.
3. State Practice
The majority also points to the great number of states that, in their respective domestic laws,
require informed consent in medical research. That many countries have prohibited private actors
from conducting medical experiments or treatments without informed consent is certainly
commendable and worthy of praise, but not “significant or relevant for purposes of customary
international law.” 4 See Flores, 414 F.3d at 249. For it is only when states prohibit domestic
action as a result of “express international accords” that a wrong becomes a violation of customary
international law. See Filartiga, 630 F.2d at 888 (quoting IIT v. Vencap, Ltd., 519 F.2d 1001, 1015
(2d Cir.1975) (Friendly, J.)). No such international accord exists here.
Moreover, “substantive uniformity” among states' domestic laws is only a starting point for
demonstrating international custom through individual state practice, which should also reflect a
“procedural” consensus among states on how that behavior should be prosecuted-criminally and
civilly. See Sosa, 542 U.S. at 761-62, 124 S.Ct. 2739 (Breyer, J, concurring). As Justice Breyer
noted in his Sosa concurrence, the states of the world have reached both substantive and procedural
agreement with respect to only a handful of certain international law norms made actionable
against non-state entities. See id.;   Part I(B) infra. Non-consensual medical testing is not among
them.
4. The Nuremberg Code
The majority centers its analysis around the Nuremberg Code, but, in the process, critically
misstates its genesis and status in international law. See Maj. Op. at 177-79. Because the Code is
a sui generis source of international law, its context is vital to understanding what it is-and what it is
not.
The Nuremberg trials are unquestionably one of this country's greatest and most enduring
contributions to the field of international law. As early as 1943, the Allied powers contemplated
bringing Nazi war criminals to justice after the conclusion of the Second World War. At the October
1943 Moscow Conference, the United States, United Kingdom and Soviet Union issued a joint
“Statement on Atrocities,” warning that:
At the time of granting of any armistice to any government which may be set up in Germany, those
German officers and men and members of the Nazi party who have been responsible for or have
taken a consenting part in the above atrocities, massacres and executions will be sent back to the
countries in which their abominable deeds were done in order that they may be judged and
punished according to the laws of these liberated countries and of free governments which will be
erected therein.
Moscow Declaration Statement of Atrocities, Oct. 30, 1943, 9 U.S. Dept of State Bull. 310 (signed by
President Roosevelt, Prime Minister Churchill and Premier Stalin). The statement added that
German criminals “whose offenses have no particular geographical localization ․will be punished by
joint decision of the government of the Allies.” Id.
Following victory in Europe and the surrender of Germany, the Allies executed the London Charter
on August 8, 1945, establishing an International Military Tribunal to try the “major war criminals,”
London Charter, Agreement for the Prosecution and Punishment of the Major War Criminals of the
European Axis, art. 3, Aug. 8, 1945, 59 Stat. 1544, 82 U.N.T. S. 279, and leaving the door open for
other war criminals to be tried in any other “national or occupation court” that might be established,
id. art. 6. Alongside the London Charter, the Allies promulgated the Charter of the International
Military Tribunal and formed a four-member tribunal with one member appointed by each of the
Allies, with jurisdiction over “the major war criminals” accused of committing three crimes:  crimes
against peace,5 war crimes,6 and crimes against humanity.7 Charter of the International Military
Tribunal, arts. 2, 6, Aug. 8, 1945, 59 Stat. 1544, 82 U.N.T.S. 279. It was the International Military
Tribunal that conducted the celebrated trial that resulted in the convictions of 19 of 22 defendants,
including high-ranking Nazi officials Hermann Goering, Rudolf Hess, and Karl Doenitz. See
generally Robert H. Jackson, Final Report to the President on the Nuremberg Trials (Oct. 7, 1946).
But the Nuremberg Code was adopted by a different tribunal in a different trial.
Four months after the London Charter established the International Military Tribunal, the Allied
Control Council, the joint allied entity that governed post-war Germany, enacted Control Council
Law No. 10, which authorized each of the occupying Allies, within its own “Zone of Occupation,” to
arrest and prosecute “persons within such Zone suspected of having committed a crime,” 8 subject to
a right of first refusal by the International Military Tribunal. Allied Control Council Law No. 10 art.
III, §§ 1, 3 (Dec. 20, 1945), in 1 Trials of War Criminals Before the Nuernberg Military Tribunals
Under Control Council Law No. 10, XVIII (William S. Hein & Co., Inc. 1997) (1949), available at
http://www.loc.gov/rr/frd/Military_law/pdf/NT_war-criminals_Vol-I. pdf (“1 Trials of War
Criminals ”).
The first of the American trials arising under Control Council Law No. 10 was the “Medical Case”
against German doctors. On October 25, 1946, the American Office of Military Government for
Germany enacted General Order 68, constituting Military Tribunal 1, comprised of three American
13 | C o n f l i c t o f L a w s C a s e s
military judges and one alternate judge. Id. at 5. That same day, Brigadier General Telford Taylor,
Chief of Counsel for War Crimes, signed an indictment in United States v. Karl Brandt, et al. charging
23 defendants with war crimes, crimes against humanity, and conspiracy, and charging 10 of the
defendants with membership in the “SS,” an organization declared criminal by the International
Military Tribunal. Id. at 8-18. These charges were premised, primarily, on the defendants' forced
medical experiments, which constituted war crimes when performed on prisoners of war, and
crimes against humanity when conducted on Nazi concentration camp prisoners.
At the conclusion of the Medical Case, 16 of the 23 defendants were convicted of one or more of the
charges, and seven were ultimately sentenced to death. Along with their verdict, the military
judges enumerated ten principles that came to be known as the Nuremberg Code, the first of which
states that in medical experiments, the “voluntary consent of the human subject is absolutely
essential.” 2 Trials of War Criminals Before the Nuernberg Military Tribunals Under Control
Council Law No. 10, 181 (William S. Hein & Co., Inc.1997) (1949), available at 7 http://www.loc.
gov/rr/frd/Military_law/pdf/NT_war-criminals_Vol-II.pdf (“2 Trials of War Criminals ”).
My colleagues contend that the Code flowed naturally from the principles of law espoused in the
London Charter. They are quite right, of course, that Control Council Law No. 10 was modeled
after the London Charter and the American and International military tribunals shared largely the
same general international law and procedural frameworks. The London Charter identified and
defined certain international law offenses-Crimes Against Humanity, Crimes Against Peace, and War
Crimes-while each of the twelve trials before the American military tribunal concerned a unique and
horrific context for the commission of those crimes, ranging from medical experimentation on
prisoners to the use of slave labor. For example, the definitions of Crimes Against Humanity and
War Crimes under which the Nazi doctors were tried in the Medical Case were virtually identical to
those of the London Charter. However, the majority overlooks the fact that the Nuremberg Code
dealt not with these general principles of law, but instead with the very specific issue of permissible
medical experimentation. The ethical principles espoused in the Code had no forebears in either
the London Charter or the judgment of the International Military Tribunal. They were developed
exclusively in the Medical Case.
I recite this history not to suggest that the Nuremberg Code is not an extraordinary or
groundbreaking document, but rather to demonstrate the difficulty inherent in measuring its
evidentiary weight, as it does not fit neatly into any of the categories this Court has identified for
sources of international law. For one thing, the Code was developed by the United States military
and announced by an American military court. See United States v. Stanley, 483 U.S. 669, 687, 107
S.Ct. 3054, 97 L.Ed.2d 550 (1987) (Brennan, J., dissenting). Certainly, the Code is not a treaty and
did not immediately bind any state. Under the framework of the ICJ Statute-and, accordingly, this
Court-because it was part of a criminal verdict, its closest analogue is a judicial decision, but judicial
decisions are only “subsidiary,” rather than primary, sources of customary international law. See
ICJ Statute art. 38;  Maj. Op. at 173-74. I agree with my colleagues that the Code has had significant
import-influence that continues to this day. The Code surely has evidentiary value in our inquiry,
but there is nothing to indicate that the Code establishes a norm of international law prohibiting
non-consensual medical experimentation or treatment by private actors, or compensates for the
virtually non-existent evidentiary value of the other sources cited by the majority.
Conscious of our obligation to measure the weight of the sources of international law in the
aggregate, what is the sum of the sources that serve as the cornerstone of the majority's conclusion?
The ICCPR, characterized by the Supreme Court as being of “little utility,” Sosa, 542 U.S. at 734, 124
S.Ct. 2739, which, in any event, does not apply to private actors;  a pair of private organizations'
declarations that our Circuit precedent tells us “are not proper evidence of customary international
law,” Flores, 414 F.3d at 262;  one regional convention and two multi-national declarations that
post-date the critical time period and are thus completely irrelevant;  states' domestic laws
untethered to any international agreement that we are told is not “significant or relevant for
purposes of customary international law,” id. at 249, 414 F.3d 233;  and the Nuremberg Code, a
document whose evidentiary value is unclear.
Simply put, the evidence here does not compare with the sources put forward in the few cases
where we have held a principle to be a norm of customary international law. Exercising
“extraordinary care and restraint,” see id. at 248, we have only upheld ATS jurisdiction in cases
where the evidence of customary international law was entirely overwhelming. 9 In Filartiga, we
were persuaded by the fact that the “international consensus surrounding torture has found
expression in numerous international treaties and accords.” 630 F.2d at 883 (emphasis added).
There, the State Department-“the political branch with principal responsibility for conducting the
international relations of the United States,” Flores, 414 F.3d at 262-had expressly announced that
the prohibition against torture had ripened into a norm of customary international law. 10 Filartiga,
630 F.2d at 884. In Kadic, we observed that genocide was included in section 404 of the
Restatement and that the Convention on the Prevention and Punishment of the Crime of Genocide
had been ratified by more than 120 nations, including the United States, 70 F.3d at 240-42, while
international criminalization of war crimes was established by four Geneva Conventions, ratified by
more than 180 nations, including the United States, id. at 242-43. In Amerada Hess, it was
similarly obvious that Argentina's Falkland War attack on an American ship violated one of the
oldest customary international law norms. 830 F.2d at 423-24. We cited a variety of international
accords establishing the right of a neutral ship to free passage. Id. at 424. After tracing the norm
to Blackstone, we concluded that it was “beyond controversy that attacking a neutral ship in
international waters ․violates international law.” Id.
In those cases, the evidence of international acceptance of each norm with respect to each defendant
was “clear and unambiguous.” Flores, 414 F.3d at 252. In each case, the nations of the world
gathered to ratify in universal numbers treaties that specifically prohibited genocide, war crimes,
torture, and attacks on neutral ships-not in generalized human rights agreements but in accords
with those discrete norms as their exclusive subjects.
My colleagues contend that I look only to the presence (or, in this case, the absence) of a globally
ratified treaty as the exclusive source of an international law norm. Far from it-we have held that
customary international law “does not stem from any single, definitive, readily-identifiable source.”
Id. at 248. However, the great weight of ATS jurisdiction must rest upon a foundation sturdy
enough to support it. Just as it would be error to stubbornly require one source of sufficient
strength to bear that burden on its own, the majority is equally mistaken in its attempt to employ a
series of extraordinarily weak sources to secure a purported norm of customary international law.
Our case law makes clear that even when viewed collectively, these sources are incapable of
carrying the weight placed upon them by my colleagues.
B. Restatement § 404
Nor does Plaintiffs' purported norm resemble the select few norms for which international law
extends liability to private actors. Although the law of nations in general does not “confine[ ] its
reach to state action,” see Kadic, 70 F.3d at 239, courts must still consider whether the specific norm
at issue does. In Kadic, we noted that the Restatement (Third) of Foreign Relations Law of the
United States differentiates between “those violations that are actionable when committed by a
state 11 and a more limited category of violations” that apply with equal force to private actors. Id.
at 240 (citing Restatement (Third) §§ 404, 702). Section 404 of the Restatement authorizes
universal criminal jurisdiction over non-state entities “for certain offenses recognized by the
14 | C o n f l i c t o f L a w s C a s e s
community of nations as of universal concern, such as piracy, slave trade, attacks on or hijacking of
aircraft, genocide, war crimes, and perhaps certain acts of terrorism, even where [no other basis of
jurisdiction] is present.” 12 Universal jurisdiction, not to be confused with universal acceptance of a
norm for ATS purposes, “permits a State to prosecute an offender of any nationality for an offense
committed outside of that State and without contacts to that State.” Yousef, 327 F.3d at 103.
The plaintiffs in Kadic alleged that Radovan Karadzic, the “president” of the self-proclaimed republic
of Srpska violated several international law norms, notably bans on genocide, war crimes and
torture. 70 F.3d at 236-37. Treating Karadzic as a non-state actor, we reviewed not only the
Restatement, but a host of relevant international accords, leading us to conclude that by their own
terms, the norms prohibiting genocide and war crimes applied to private individuals, while torture
and summary execution “are proscribed by international law only when committed by state officials
or under color of law.” Id. at 241-43. We added that the “ ‘color of law’ jurisprudence of 42 U.S.C. §
1983 is a relevant guide to whether a defendant has engaged in official action for purposes of
jurisdiction under the [ATS].” Id. at 245.
Five years later, we again determined whether an international law norm applied only to state
actors. See Bigio v. Coca-Cola Co., 239 F.3d 440 (2d Cir.2000). Building on Kadic, we held that
ATS jurisdiction over a non-governmental entity requires the violation of a norm “listed as an ‘act of
universal concern’ in § 404 or ․sufficiently similar to [those] acts for us to treat them as though they
were incorporated into § 404 by analogy,” or conduct committed under color of law. Id. at 448.
In affirming the district court's dismissal, we determined that the act at issue-discriminatory
expropriation of property-is much more like the acts listed in section 702 than those in section 404,
and that the complaint did not allege that Coca-Cola acted in concert with Egyptian state officials.
Id. at 447-49. However, unlike in Kadic, we saw no need to look beyond the Restatement to any
sources of international law in order to conclude that the norm did not apply to non-state entities.
Compare id. at 448, with Kadic, 70 F.3d at 241-43. It is equally clear that section 404 of the
Restatement does not reveal a norm of customary international law prohibiting non-consensual
medical experimentation by private actors.
To reiterate, section 404 lists only five specific acts for which universal criminal jurisdiction over
private actors exists:  piracy, genocide, slave trade, war crimes, and attacks on aircrafts. See also
Vietnam Ass'n for Victims of Agent Orange, 517 F.3d at 116 (describing these five as comprising “the
list of principles that may be said to have ripened into universally accepted norms of international
law” (internal quotation marks omitted)). If anything, this Court has been even more stringent,
holding that in spite of the Restatement, federal courts could not try an alleged airline bomber
under customary international law principles of universal jurisdiction. 13 See Yousef, 327 F.3d at
103-08. Regardless, there is no dispute that none of the five acts in section 404 encompasses non-
consensual medical experimentation. Instead, Plaintiffs argue that it is “sufficiently similar” to
those acts to support its application to a private corporation. 14 See Bigio, 239 F.3d at 448. This
Court has never had occasion to consider what types of acts are “sufficiently similar” to the section
404 acts except to conclude in Bigio that discriminatory expropriation was not among them. Id.
For similar reasons, neither is non-consensual medical experimentation.
Universal jurisdiction originated with prosecutions of piracy more than 500 years ago. See Yousef,
327 F.3d at 104;  United States v. Lei Shi, 525 F.3d 709, 723 (9th Cir.2008). As we explained in
Yousef, piracy is universally punishable not because it is uniquely heinous but “because of the threat
that piracy poses to orderly transport and commerce between nations and because the crime occurs
statelessly on the high seas.” 327 F.3d at 104. By 1822, it was beyond “doubt ․that vessels and
property in the possession of pirates may be lawfully seized on the high seas by [any] person, and
brought in for adjudication.” United States v. the La Jeune Eugenie, 26 F. Cas. 832, 843
(C.C.D.Mass.1822) (No. 15,551);  see also United States v. Smith, 18 U.S. 153, 5 Wheat. 153, 163, 5
L.Ed. 57 (1820) (Story, J.) (discussing the bases for universal jurisdiction over piracy).
Private actors trading slaves (as opposed to those engaging in slavery in general) are subject to
universal criminal jurisdiction because the early treaties that formed the basis for customary
international law considered the slave trade akin to piracy. For example, the 1841 Treaty of
London provided that:
Their Majesties the Emperor of Austria, the King of Hungary and Bohemia, the King of Prussia, and
the Emperor of all the Russians, engage to prohibit all trade in slaves, either by their respective
subjects, or under their respective flags, or by means of capital belonging to their respective
subjects;  and to declare such traffic piracy. Their Majesties further declare that any vessel which
may attempt to carry on the Slave Trade, shall, by that fact alone, lose all right to the protection of
their flag.
Treaty for the Suppression of the African Slave Trade art. I, Dec. 20, 1841, 92 Consol. T.S. 437
(emphasis added), reprinted in M. Cherif Bassiouni & Edward M. Wise, Aut Dedere Aut Judicare:
 The Duty to Extradite or Prosecute in International Law 132-33 (1995);  see also Kenneth C.
Randall, Universal Jurisdiction Under International Law, 66 Tex. L.Rev. 785, 798 (1988) ( “Currently,
states can recognize universal jurisdiction over slave trading by ․customary law.”). Although we
declined to hold in Yousef that the principle had ripened into a customary norm, attacks on airliners
logically fit into this class because, like the high seas, airspace is stateless and extraterritorial.
After World War II, universal criminal jurisdiction was extended to private actors-including many of
the Nazi defendants prosecuted under Control Council Law No. 10-accused of crimes against
humanity such as war crimes and genocide because, like piracy, “ ‘there is ․a lack of any adequate
judicial system operating on the spot where the crime takes place-in the case of piracy it is because
the acts are on the high seas and in the case of war crimes because of a chaotic condition or
irresponsible leadership in time of war.’ ” Yousef, 327 F.3d at 105 (quoting Willard B. Cowles,
Universality of Jurisdiction Over War Crimes, 33 Cal. L.Rev. 177, 194 (1945));  see also Flores, 414
F.3d at 244 n. 18 (“Customary international law rules proscribing crimes against humanity,
including genocide, and war crimes, have been enforceable against individuals since World War II.”).
In Yousef, we concluded that these acts share two common traits:  they “(1) are universally
condemned by the community of nations, and (2) by their nature occur either outside of a State or
where there is no State capable of punishing, or competent to punish, the crime.” 327 F.3d at 105.
Non-consensual medical experimentation is not “sufficiently similar” to these crimes to warrant its
incorporation into section 404 by analogy. Plaintiffs acknowledge that the acts listed in section
404 share “a particular quality of crossing international boundaries,” a quality that they argue that
medical experimentation shares “because of the universal uses of medical research and the common
practice of physicians to travel to crisis areas to deliver humanitarian aid.” But the mere crossing
of an international border does not give rise to universal jurisdiction over non-state actors. We
made this clear in Yousef, where we rejected universal jurisdiction over an individual accused of
bombing of an aircraft leaving the Philippines for Japan. 327 F.3d at 98, 103. As we held,
universal criminal jurisdiction over private actors is only appropriate for acts which, “by their
nature,” are beyond state sovereignty. Id. at 105. Here, Pfizer's alleged actions occurred
exclusively within Nigeria, and medical experimentation is not a crime which, by its nature, is
incapable of state punishment. Plaintiffs' argument to the contrary is belied by the state and
federal civil and criminal actions pending against Pfizer in Nigeria. See Maj. Op. at 171-72.
15 | C o n f l i c t o f L a w s C a s e s
As in Bigio, medical experimentation more closely resembles the acts for which only state actors
may be held responsible. Plaintiffs compare medical experimentation with slavery. Yet, under
the Restatement, while anyone may be prosecuted for engaging in the slave trade, slavery itself is
only actionable against state actors. See Restatement (Third) § 702(b) (“A state violates
international law if, as a matter of state policy, it practices, encourages, or condones ․slavery ․”).
Medical experimentation resembles slavery in its grievous exploitation of unconsenting and
unwilling subjects;  it also resembles torture in its infliction of horrific physical and emotional pain.
However, both the Restatement and this Court have recognized that the norm against torture
reaches only state actors. See Kadic, 70 F.3d at 243-44;  Restatement (Third) § 702(d);  see also
Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment art 1,
Dec. 10, 1984, S. Treaty Doc. No. 100-20, 1465 U.N.T.S. 85 (“CAT”) (defining torture as being
“inflicted by or at the instigation of or with the consent or acquiescence of a public official or other
person acting in an official capacity.”).15
One of the fundamental attributes of sovereignty is a state's authority to exercise criminal
jurisdiction over persons accused of committing crimes within its territory. The crimes listed in
section 404 are not the extraordinary exceptions because they are singularly reprehensible or
deserving of condemnation. Few would argue that piracy, for which private actors may be
prosecuted universally but which requires neither an act of violence nor the infliction of physical
injury,16 is more heinous than torture or slavery, practices made actionable only against state
entities. Rather, by definition, these crimes occur in locations where, or during times when,
sovereignty, and a fortiori criminal jurisdiction, are incapable of being exercised. Because medical
experimentation is entirely intra national and fully subject to domestic criminal jurisdiction, it is not
“sufficiently similar” to those acts listed in section 404, and cannot be incorporated by analogy as to
reach private, non-state actors.
The defendants in the Medical Case were not charged with conducting non-consensual medical tests
per se. Rather, those tests, when conducted on prisoners of war and members of a discrete civilian
population imprisoned in concentration camps, constituted “war crimes” and “crimes against
humanity,” offenses for which customary international law has imposed individual responsibility.
See Flores, 414 F.3d at 244 n. 18. Unlike the Defendant in this action, the Nazi doctors convicted by
the American military tribunal were not private actors. Each convicted defendant held a position
of authority in either the medical services or the military of the Third Reich. 17 See 1 Trials of War
Criminals 29. Moreover, the atrocities for which they were convicted victimized state prisoners in
state-administered concentration camps, according to the Indictment, “for the benefit of the German
Armed Forces.” Id. at 11-14. It is difficult to imagine a more egregious example of the violation of
a customary international law norm or a more appropriate case for ATS jurisdiction.
The majority today authorizes the exercise of ATS jurisdiction over an entirely private corporation
for violating a previously unrecognized norm of international law. In doing so, my colleagues
accept proof far weaker than in any other case where this Court has identified a norm of customary
international law, and, apparently, overlook the fact that this purported norm in no way resembles
those few norms enforceable against private entities. When tasked by the Supreme Court with
“vigilant doorkeeping” to ensure that the list of actionable international norms remains “narrow,”
Sosa, 542 U.S. at 729, 124 S.Ct. 2739, we must be no less demanding than we have been in the past.
Under that standard, the evidence put forward by Plaintiffs does not establish a norm of customary
international law actionable against private actors. I believe that the majority's decision departs
from our settled case law and lowers considerably our previously high bar for ATS jurisdiction.
II. Mutuality
There are many principles on which most states of the world community agree. Most find support
and enforcement in the richly diverse legal systems in place around the globe. But universal
acceptance as a normative principle is not enough to gain entrance into the “law of nations.” The
norm must not only be universal, it must touch on matters that are “of mutual, and not merely
several, concern.” Filartiga, 630 F.2d at 888. Matters are of mutual concern when they “affect[ ]
the relationship between states or between an individual and a foreign state, and [are] used by
those states for their common good and/or dealings inter se.” IIT, 519 F.2d at 1015. On the other
hand, matters of several concern are those “in which States are separately and independently
interested.” Flores, 414 F.3d at 249. For example, as we noted in Flores, “murder of one private
party by another, universally proscribed by the domestic law of all countries ․is not actionable
under the [ATS] as a violation of customary international law because ‘the nations of the world’
have not demonstrated that this wrong is of mutual, and not merely several, concern.” Id.
(quotation marks omitted). The majority concludes that non-consensual medical experimentation
by one private party on another is a matter of mutual concern. I disagree.
We have consistently held that the best evidence that states consider a matter to be of mutual
concern is the fact that they have agreed to be bound “by means of express international accords.”
Filartiga, 630 F.2d at 888;  see Flores, 414 F.3d at 249;  Khulumani, 504 F.3d at 274 n. 7 (Katzmann,
J., concurring). The majority points to the ICCPR, the Convention on Human Rights and
Biomedicine, and the 2001 Clinical Trial Directive as evidence that “States throughout the world
have entered into ․express and binding international agreements prohibiting nonconsensual
medical experimentation.” See Maj. Op. at 185. But those agreements fail to demonstrate
mutuality for the same reason they fail to demonstrate universality-the ICCPR does not address acts
by non-state actors and the other two were not in force at the time of the alleged misconduct.
Whatever international consensus has been reached as to non-consensual medical experimentation
by private actors has not yet “found expression in numerous treaties and accords,” cf. Filartiga, 630
F.2d at 883. The majority cites no worldwide, multi-continental, universally applicable
“Convention Against Medical Experimentation,” because, at the moment, none exists. That fact
alone distinguishes this case from Filartiga, Amerada Hess, and Kadic.
In the absence of a binding global treaty, the majority seeks to demonstrate mutuality of concern by
describing the downstream effects of non-consensual medical experimentation. In essence, the
majority contends that non-consensual medical experiments feed distrust among their victims,
which, in turn, engenders a general reluctance to seek future medical attention or vaccination,
which, in turn, helps accelerate the spread of infectious diseases across international borders. See
Maj. Op. at 186-87. Indeed, I would concede that the majority may be quite right. But a smaller,
more interdependent world community has not been employed by the Supreme Court (or any other
court to my knowledge) to convert claims such as those presented here into violations of the law of
nations. In fact, the majority's theory would be no different when evaluating the medical
malpractice of Pfizer's research physicians or the strict products liability for its allegedly defective
drug, but malpractice and products liability are among the quintessential subjects of domestic law.
It is not enough that a wrong could create international ramifications;  in order for it to be a matter
of mutual concern, it must “threaten[ ] serious consequences in international affairs.” Sosa, 542 U.S.
at 715, 124 S.Ct. 2739. The Supreme Court listed three historical mutual wrongs as guideposts to
frame this inquiry:  infringement of the rights of ambassadors, the violation of safe conducts and
piracy. Id. at 715, 720, 124 S.Ct. 2739. An assault against an ambassador “impinged upon the
sovereignty of the foreign nation and if not adequately redressed could rise to an issue of war.” Id.
at 715, 124 S.Ct. 2739. The 18th century safe-conduct document was the historical equivalent of
the modern passport, “which entitles a bearer with a valid visa to safe passage to, within, and out of
a foreign land pursuant to a treaty or an agreement negotiated by his or her sovereign and the host
16 | C o n f l i c t o f L a w s C a s e s
sovereign.” Taveras v. Taveraz, 477 F.3d 767, 773 (6th Cir.2007) (quoting Thomas H. Lee, The
Safe-Conduct Theory of the Alien Tort Statute, 106 Colum. L.Rev. 830, 874 (2006)). Thus, “the
purpose of the doctrine of safe conducts under the law of nations is to protect the safety and
security of the person and property of the journeying alien bearing the safe conduct privilege (and
consequently to preserve commercial and diplomatic relationships between the alien's host and
home countries).” Id. at 773-74. This is still true today-a passport issued by the United States
contains an official request from the Secretary of State to an authority of another sovereign state:
 “The Secretary of State of the United States of America hereby requests all whom it may concern to
permit the citizen/national of the United States named herein to pass without delay or hindrance
and in case of need to give all lawful aid and protection.” Breaches of customary international law
impair the normal expectations that nations have in dealing with other nations. They must
threaten serious consequences in international affairs because the norms were, and still are, the
foundation for states' formal relationships with one another.
Piracy does not fit squarely with the other two Sosa historical paradigms, but the threat to
international affairs posed by piracy needs no detailed exegesis. Suffice it to say that one of the
young Republic's first military tests was its campaign against the Barbary Pirates, see, e.g., Act For
the Protection of the Commerce and Seamen of the United States Against the Tripolitan Cruisers, ch.
IV, § 2, 2 Stat. 129, 130 (1802) (authorizing President Jefferson to instruct the armed forces to
“seize and make prize of all vessels, goods and effects, belonging to the Bey of Tripoli ․and also to
cause to be done all such other acts of precaution or hostility as the state of war will justify, and
may, in his opinion, require.”), and piracy continues to threaten serious consequences in
international affairs today, see S.C. Res. 1851, ¶ 2, U.N. Doc. S/RES/1851 (Dec. 16, 2008) (calling
upon states “to take part actively in the fight against piracy and armed robbery at sea off the coast of
Somalia”).
We have accepted no lesser showing in our case law. The threat posed by genocide is so great that
states are empowered to request “the competent organs of the United Nations to take such action
under the Charter of the United Nations as they consider appropriate for the prevention and
suppression of acts of genocide.” Convention on the Prevention and Punishment of the Crime of
Genocide art. 8, Dec. 9, 1948, 102 Stat. 3045, 78 U.N.T.S. 277. The Geneva Conventions collectively
establish, and obligate contracting parties to follow, the laws of war-almost by definition a matter of
international affairs. See Kadic, 70 F.3d at 242-43. On the other hand, because international law
does not define torture to include acts by private entities, torturous conduct by non-state actors-
while criminalized domestically-is not a matter of mutual concern. Id. at 243-44.
Demonstrating that a wrong is a matter of mutual concern must necessarily be difficult. The
Supreme Court has only opened the door for ATS jurisdiction over a “narrow set of violations of the
law of nations, admitting of a judicial remedy and at the same time threatening serious
consequences in international affairs.” Sosa, 542 U.S. at 715, 124 S.Ct. 2739. The nations of the
world have not yet demonstrated that non-consensual medical experimentation by non-state actors
“is of mutual, and not merely several, concern, by means of express international accords.”
Filartiga, 630 F.2d at 888. Nor does it threaten serious consequences in international affairs in the
same manner or to the same extent as the historical paradigms listed by the Supreme Court or their
modern counterparts identified by this Court. Without either showing, I cannot agree with the
majority that non-consensual medical experimentation by private actors is a matter of mutual
concern.
III. State Action
The fact that medical experimentation by private actors is not a subject of customary international
law does not end the inquiry. If international law supports state liability but not private liability, a
private actor may still be liable if he or she “acted under color of law.” In that regard, we are told to
employ our 42 U.S.C. § 1983 jurisprudence in the inquiry. See Bigio, 239 F.3d at 448;  Kadic, 70
F.3d at 245. As an initial matter, this requires that the law of nations includes a norm actionable
against states, which, in the instant case, is far from certain. But even assuming, for argument's
sake, that international law prohibits states from conducting non-consensual medical tests,
Plaintiffs have not demonstrated that Pfizer acted under the color of law.
This issue requires a bit of procedural context. In 2002, Pfizer moved to dismiss Plaintiffs'
complaint in Abdullahi on the grounds that (1) Plaintiffs had not alleged that Pfizer was a state
actor, and (2) the alternate ground of forum non conveniens. See Abdullahi v. Pfizer, Inc., No. 01
Civ. 8118, 2002 WL 31082956, at *12 (S.D.N.Y. Sept. 17, 2002). Judge Pauley granted the forum
non conveniens motion, but denied the state action motion, concluding that Plaintiffs “sufficiently
allege[d] that the former Nigerian government and Pfizer were joint participants in the Trovan
treatment.” Id. at *6. Plaintiffs appealed the district court's dismissal, and Pfizer cross-appealed
from the court's denial of its motion to dismiss on state action. See Abdullahi v. Pfizer, Inc., 77
Fed.Appx. 48 (2d Cir.2003). On appeal, we vacated the district court's judgment of dismissal, and
did not reach Pfizer's cross-appeal, noting that our intervening decision in Flores might have some
application on remand. Id. at 53. Back before Judge Pauley, Pfizer filed a new motion to dismiss,
arguing that Plaintiffs failed to state a claim under the substantially different ATS landscape which
now included the Supreme Court's decision in Sosa and our decision in Flores. See Abdullahi v.
Pfizer, Inc., No. 01 Civ. 8118, 2005 WL 1870811, at *3 (S.D.N.Y. Aug. 9, 2005). Both of these
decisions made clear that the identity of the defendant is a critical component of whether a principle
is a norm of customary international law. Without addressing or affirming its previous conclusion
finding sufficient allegations of state action, the district court granted Pfizer's motion to dismiss,
holding that medical experimentation was not actionable under the law of nations. Id. at *18. On
appeal to this Court, both parties addressed the issue of state action in their briefs. The majority
concludes that Plaintiffs' allegations of state action were sufficient to defeat a motion to dismiss.
See Maj. Op. at 187-88. I cannot agree.
In their twin complaints, which total 628 paragraphs, Plaintiffs make only four allegations
concerning the role of the Nigerian government in the Trovan experiments:  (1) in order for the FDA
to authorize the export of Trovan, “Pfizer obtained the required letter of request from the Nigerian
government”;  (2) the government “arrang[ed] for Pfizer's accommodation in Kano”;  (3) the
government acted “to silence Nigerian physicians critical of [Pfizer's] test”;  and (4) the government
“assign[ed] Nigerian physicians to assist in the project.” 18 Elsewhere in their complaints, Plaintiffs
note in conclusory fashion that a Nigerian doctor did not publicly object to the Trovan study
because it “seemed to have the backing of the Nigerian government.”
In their brief to this Court, Plaintiffs seek to bolster their complaints by describing the role of
“Nigerian government doctors” at the allegedly government-owned hospital that hosted the study.
However, the portions of the complaints that they cite do not support their contentions. Nowhere
in their complaints did Plaintiffs allege that the hospital was, in fact, government owned or
administered, nor did they allege that the four Nigerian doctors working with Pfizer were employed
by the government, and our review of a decision to grant a motion to dismiss “is limited to the facts
as asserted within the four corners of the complaint” and any attached documents. McCarthy v.
Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.2007).
These bare allegations are plainly insufficient to survive a motion to dismiss for lack of state action.
The Supreme Court's case law on state action is hardly a model of clarity, but certain principles are
well-settled. As a threshold matter, the conduct alleged attributable to the state must be defined
17 | C o n f l i c t o f L a w s C a s e s
with the requisite specificity. “When analyzing allegations of state action, we begin ‘by identifying
the specific conduct of which the plaintiff complains,’ ” Tancredi v. Metro. Life Ins. Co., 316 F.3d 308,
312 (2d Cir.2003) (quoting Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 51, 119 S.Ct. 977, 143
L.Ed.2d 130 (1999)), and in most cases, a finding of state action “must be premised upon the fact
that the State is responsible ” for that specific conduct, Horvath v. Westport Library Ass'n, 362 F.3d
147, 154 (2d Cir.2004) (internal quotation omitted). Determining state action in these cases
“requires tracing the activity to its source to see if that source fairly can be said to be the state.”
Leshko v. Servis, 423 F.3d 337, 340 (3d Cir.2005);  see also Hadges v. Yonkers Racing Corp., 918 F.2d
1079, 1082-83 (2d Cir.1990). As we recently stated, when confronted with a motion to dismiss, it
“is not enough ․for a plaintiff to plead state involvement in some activity of the institution alleged to
have inflicted injury upon a plaintiff;  rather, the plaintiff must allege that the state was involved
with the activity that caused the injury giving rise to the action.” Sybalski v. Indep. Group Home
Living Program, Inc., 546 F.3d 255, 257-58 (2d Cir.2008) (internal quotations omitted).
Here, that activity was not, as the majority apparently concludes, conducting the Trovan trials in
general, but rather administering the drug without informed consent. Although Plaintiffs allege
that the Nigerian government requested the import of Trovan and arranged for Pfizer's
accommodations and some medical staff in Kano, they do not allege that the government or any
government employee played any role in either administering Trovan without consent or deciding
to do so in the first instance. The Supreme Court has described “the typical case raising a state-
action issue” as one in which “a private party has taken the decisive step that caused the harm to the
plaintiff, and the question is whether the State was sufficiently involved to treat that decisive
conduct as state action.” NCAA v. Tarkanian, 488 U.S. 179, 192, 109 S.Ct. 454, 102 L.Ed.2d 469
(1988). Plaintiffs have not alleged any facts that would indicate that the answer here is “yes.”
Plaintiffs' complaints are more noteworthy for what they do not allege than what they do. They
have not suggested that Pfizer was exercising any delegated state authority, cf. West v. Atkins, 487
U.S. 42, 108 S.Ct. 2250, 101 L.Ed.2d 40 (1988), or that the Nigerian government “knowingly
accept[ed] the benefits derived from [the unlawful] behavior,” Tarkanian, 488 U.S. at 192, 109 S.Ct.
454. Plaintiffs have not alleged that Pfizer conspired with government officials to deprive the
subjects of their rights, cf. Fries v. Barnes, 618 F.2d 988, 991 (2d Cir.1980), nor have they alleged
that the Nigerian government exercised any coercive power over Pfizer, cf. Brentwood Acad. v.
Tenn. Secondary Sch. Athletic Ass'n, 531 U.S. 288, 296, 121 S.Ct. 924, 148 L.Ed.2d 807 (2001). In
fact, Plaintiffs did not allege that any Nigerian government officials even knew about the non-
consensual tests, because if Nigerian government doctors were somehow involved in the study,
Plaintiffs did not specify what role, if any, they played.
The case of Beanal v. Freeport-McMoRan, Inc., 969 F.Supp. 362 (E.D.La.1997), aff'd 197 F.3d 161
(5th Cir.1999), is instructive. In Beanal, plaintiffs seeking to recover under the ATS sought to
establish state action on the basis of the Indonesian military's involvement in allegedly actionable
conduct. The court rejected that argument, holding that plaintiffs had not “alleged whether the
military personnel helped enforce Freeport's policies or merely observed ․the violative conduct.”
Id. at 378. Broad conclusory statements of state involvement are not sufficient to establish state
action;  “there must be some allegation indicating that the troops jointly cooperated in the conduct,
jointly participated in the conduct, influenced the conduct or played an integral part in the
deprivation of human rights.” Id. at 379. The same is true here.19 Plaintiffs' allegations are
inadequate.
Even without alleging that the State “coerced or even encouraged” the act complained of, Plaintiffs
can still survive a motion to dismiss if “the relevant facts show pervasive entwinement to the point
of largely overlapping identity between the State and the entity that the plaintiff contends is a state
actor.” Horvath, 362 F.3d at 154 (quotation omitted). This line of cases revolves around the
relationship between the state and the actor, as opposed to the specific act. Showing “overlapping
identity” is highly uncommon, and most often arises where a private actor is performing one of the
few functions traditionally and exclusively reserved to the state or is controlled by a state entity.
State assistance by itself is insufficient-the relevant question is whether the decisionmakers were
ostensibly state actors. We answered that question in the affirmative in Horvath, where half of the
putatively private defendant's trustees were state appointees. Id. at 153. But the assistance alleged
by Plaintiffs-helping to procure a ward in a hospital and arranging for the assistance of a handful of
doctors-is not enough to clear this hurdle. Using government property, government staff, and even
government funds does not make a private entity a state actor when its decisions are made
independently of the state. See Yeo v. Town of Lexington, 131 F.3d 241, 254 (1st Cir.1997) (en
banc).
Plaintiffs' generalized allegations (unsupported by factual allegations) that the government acted to
silence critics of the test are no more helpful. They do not allege who these government officials
were, how they acted to silence critics, or when in the sequence of events this conduct occurred.
Such a “merely conclusory allegation that a private entity acted in concert with a state actor does
not suffice to state a § 1983 claim against the private entity.” Ciambriello v. County of Nassau, 292
F.3d 307, 324 (2d Cir.2002).
At most, Plaintiffs' complaints alleged that the Nigerian government acquiesced to or approved the
Trovan program in general without knowing its disturbing details. That it approved the program
is hardly surprising-in the midst of a widespread epidemic, the Nigerian government likely
welcomed help from every entity offering it, but “[m]ere approval of or acquiescence in the
initiatives of a private party is not sufficient to justify holding the State responsible for those
initiatives.” Blum v. Yaretsky, 457 U.S. 991, 1004-05, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982).
Plaintiffs have not demonstrated that Pfizer acted “under the color of law” such that it can be held
liable for the Nigerian government's alleged violation of the “law of nations.”
* * * * * * * * * * * * *
Plaintiffs' allegations paint a vivid picture of the unspeakable pain and suffering of dozens of
innocent children. The issue on this appeal, however, is not whether Pfizer's alleged conduct was
“wrong,” or even whether it is legally actionable, but whether it falls within both the “narrow class”
of international norms for which ATS jurisdiction exists, and the even smaller subset of those norms
actionable against non-state actors. Our Court and the Supreme Court have made it pellucidly clear
that ATS jurisdiction must be reserved only for acts that the nations of the world collectively
determine interfere with their formal relations with one another-including those rare acts by
private individuals that are so serious as to threaten the very fabric of peaceful international affairs.
I cannot agree with my colleagues that Pfizer's alleged conduct poses the same threat or is so
universally and internationally proscribed as to fit within that narrow class.
I respectfully dissent.
GARY SHERWOOD SMALL, PETITIONER v. UNITED
STATES
18 | C o n f l i c t o f L a w s C a s e s
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT
[April 26, 2005]
Justice Breyer delivered the opinion of the Court.
The United States Criminal Code makes it
“unlawful for any person … who has been convicted in any
court, of a crime punishable by imprisonment for a term
exceeding one year … to … possess … any firearm.” 18 U.S.C. §
922(g)(1) (emphasis added).
The question before us focuses upon the words “convicted in
any court.” Does this phrase apply only to convictions entered
in any domestic court or to foreign convictions as well? We
hold that the phrase encompasses only domestic, not foreign,
convictions.
I
In 1994 petitioner, Gary Small, was convicted in a Japanese
court of having tried to smuggle several pistols, a rifle, and
ammunition into Japan. Small was sentenced to five years’
imprisonment. 183 F. Supp. 2d 755, 757, n. 3 (WD Pa. 2002).
After his release, Small returned to the United States, where he
bought a gun from a Pennsylvania gun dealer. Federal
authorities subsequently charged Small under the “unlawful
gun possession” statute here at issue. 333 F.3d 425, 426 (CA3
2003). Small pleaded guilty while reserving the right to
challenge his conviction on the ground that his earlier
conviction, being a foreign conviction, fell outside the scope of
the illegal gun possession statute. The Federal District Court
rejected Small’s argument, as did the Court of Appeals for the
Third Circuit. 183 F. Supp. 2d, at 759; 333 F.3d, at 427, n. 2.
Because the Circuits disagree about the matter, we granted
certiorari. Compare United States v. Atkins, 872 F.2d 94, 96
(CA4 1989) (“convicted in any court” includes foreign
convictions); United States v. Winson, 793 F.2d 754, 757—759
(CA6 1986) (same), with United States v. Gayle, 342 F.3d 89, 95
(CA2 2003) (“convicted in any court” does not include foreign
convictions); United States v. Concha, 233 F.3d 1249, 1256
(CA10 2000) (same).
II
The question before us is whether the statutory reference
“convicted in any court” includes a conviction entered in
a foreign court. The word “any” considered alone cannot
answer this question. In ordinary life, a speaker who says, “I’ll
see any film,” may or may not mean to include films shown in
another city. In law, a legislature that uses the statutory phrase
 “ ‘any person’ ” may or may not mean to include “ ‘persons’ ”
outside “the jurisdiction of the state.” See, e.g., United
States v. Palmer, 3 Wheat. 610, 631 (1818) (Marshall, C. J.)
(“[G]eneral words,” such as the word “ ‘any,’ ” must “be
limited” in their application “to those objects to which the
legislature intended to apply them”); Nixon v. Missouri
Municipal League, 541 U.S. 125, 132 (2004) (“ ‘any’ ” means
“different things depending upon the setting”); United
States v. Alvarez-Sanchez, 511 U.S. 350, 357 (1994)
(“[R]espondent errs in placing dispositive weight on the broad
statutory reference to ‘any’ law enforcement officer or agency
without considering the rest of the statute”); Middlesex County
Sewerage Authority v. National Sea Clammers Assn., 453 U.S. 1,
15—16 (1981) (it is doubtful that the phrase “ ‘any statute’ ”
includes the very statute in which the words
appear); Flora v. United States, 362 U.S. 145, 149 (1960)
(“[A]ny sum,” while a “catchall” phase, does not “define what it
catches”). Thus, even though the word “any” demands a broad
interpretation, see, e.g., United States v. Gonzales, 520 U.S. 1, 5
(1997), we must look beyond that word itself.
In determining the scope of the statutory phrase we find
help in the “commonsense notion that Congress generally
legislates with domestic concerns in mind.” Smith v. United
States, 507 U.S. 197, 204, n. 5 (1993). This notion has led the
Court to adopt the legal presumption that Congress ordinarily
intends its statutes to have domestic, not extraterritorial,
application. See Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285
(1949); see also Palmer, supra, at 631 (“The words ‘any person
or persons,’ are broad enough to comprehend every human
being” but are “limited to cases within the jurisdiction of the
state”); EEOC v. Arabian American Oil Co., 499 U.S. 244, 249—
251 (1991). That presumption would apply, for example, were
we to consider whether this statute prohibits unlawful gun
possession abroad as well as domestically. And, although the
presumption against extraterritorial application does not
apply directly to this case, we believe a similar assumption is
appropriate when we consider the scope of the phrase
“convicted in any court” here.
For one thing, the phrase describes one necessary portion of
the “gun possession” activity that is prohibited as a matter of
domestic law. For another, considered as a group, foreign
convictions differ from domestic convictions in important
ways. Past foreign convictions for crimes punishable by more
than one year’s imprisonment may include a conviction for
conduct that domestic laws would permit, for example, for
engaging in economic conduct that our society might
encourage. See, e.g., Art. 153 of the Criminal Code of the
Russian Soviet Federated Socialist Republic, in Soviet Criminal
Law and Procedure 171 (H. Berman & J. Spindler transls. 2d
ed. 1972) (criminalizing “Private Entrepreneurial Activity”);
Art. 153, id.,at 172 (criminalizing “Speculation,” which is
19 | C o n f l i c t o f L a w s C a s e s
defined as “the buying up and reselling of goods or any other
articles for the purpose of making a profit”); cf. e.g., Gaceta
Oficial de la Republica de Cuba, ch. II, Art. 103, p. 68 (Dec. 30,
1987) (forbidding propaganda that incites against the social
order, international solidarity, or the Communist State). They
would include a conviction from a legal system that is
inconsistent with an American understanding of fairness.
See, e.g., U.S. Dept. of State, Country Reports on Human Rights
Practices for 2003, Submitted to the House Committee on
International Relations and the Senate Committee on Foreign
Relations, 108th Cong., 2d Sess., 702—705, 1853, 2023 (Joint
Comm. Print 2004) (describing failures of “due process” and
citing examples in which “the testimony of one man equals
that of two women”). And they would include a conviction for
conduct that domestic law punishes far less severely. See, e.g.,
Singapore Vandalism Act, ch. 108, §§2, 3, III Statutes of
Republic of Singapore p. 258 (imprisonment for up to three
years for an act of vandalism). Thus, the key statutory phrase
“convicted in any court of, a crime punishable by
imprisonment for a term exceeding one year” somewhat less
reliably identifies dangerous individuals for the purposes of
U.S. law where foreign convictions, rather than domestic
convictions, are at issue.
In addition, it is difficult to read the statute as asking judges
or prosecutors to refine its definitional distinctions where
foreign convictions are at issue. To somehow weed out
inappropriate foreign convictions that meet the statutory
definition is not consistent with the statute’s language; it is not
easy for those not versed in foreign laws to accomplish; and it
would leave those previously convicted in a foreign court (say
of economic crimes) uncertain about their legal obligations. Cf.
1 United States Sentencing Commission, Guidelines Manual
§4A1.2(h) (Nov. 2004) (“[S]entences resulting from foreign
convictions are not counted” as a “prior sentence” for criminal
history purposes).
These considerations, suggesting significant differences
between foreign and domestic convictions, do not dictate our
ultimate conclusion. Nor do they create a “clear statement”
rule, imposing upon Congress a special burden of specificity.
See post, at 5 (Thomas, J., dissenting). They simply convince us
that we should apply an ordinary assumption about the reach
of domestically oriented statutes here–an assumption that
helps us determine Congress’ intent where Congress likely did
not consider the matter and where other indicia of intent are
in approximate balance. Cf. ibid. We consequently assume a
congressional intent that the phrase “convicted in any court”
applies domestically, not extraterritorially. But, at the same
time, we stand ready to revise this assumption should
statutory language, context, history, or purpose show the
contrary.
 B offenses committed abroad (not producing enhanced
We have found no convincing indication to the contrary
here. The statute’s language does not suggest any intent to
reach beyond domestic convictions. Neither does it mention
foreign convictions nor is its subject matter special, say,
immigration or terrorism, where one could argue that foreign
convictions would seem especially relevant. To the contrary, if
read to include foreign convictions, the statute’s language
creates anomalies.
For example, the statute creates an exception that allows
gun possession despite a prior conviction for
an antitrust or business regulatory crime. 18 U.S.C. §
921(a)(20)(A). In doing so, the exception speaks of “Federal or
State” antitrust or regulatory offenses. Ibid. If the phrase
“convicted in any court” generally refers only to domestic
convictions, this language causes no problem. But if “convicted
in any court” includes foreign convictions, the words “Federal
or State” prevent the exception from applying where
aforeign antitrust or regulatory conviction is at issue. An
individual convicted of, say, a Canadian antitrust offense could
not lawfully possess a gun, Combines Investigation Act, 2
R. S. C. 1985, ch. C—34, §§61(6), (9) (1985), but a similar
individual convicted of, say, a New York antitrust offense,
could lawfully possess a gun.
For example, the statute specifies that predicate crimes
include “a misdemeanor crime of domestic violence.” 18 U.S.C.
§ 922(g)(9). Again, the language specifies that these predicate
crimes include only crimes that are “misdemeanor[s] under
Federal or State law.” §921(a)(33)(A). If “convicted in any
court” refers only to domestic convictions, this language
creates no problem. If the phrase also refers to foreign
convictions, the language creates an apparently senseless
distinction between (covered) domestic relations
misdemeanors committed within the United States and
(uncovered) domestic relations misdemeanors committed
abroad.
For example, the statute provides an enhanced penalty
where unlawful gun possession rests upon three predicate
convictions for a “serious drug offense.” §924(e)(1) (2000 ed.,
Supp. II). Again the statute defines the relevant
drug crimes through reference to specific federal
crimes and with the words “offense under State law.”
§§924(e)(2)(A)(i), (ii) (2000). If “convicted in any court”
refers only to domestic convictions, this language creates no
problem. But if the phrase also refers to foreign convictions,
the language creates an apparently senseless distinction
between drug offenses committed within the United States
(potentially producing enhanced punishments) and similar
20 | C o n f l i c t o f L a w s C a s e s
punishments).
For example, the statute provides that offenses that are
punishable by a term of imprisonment of up to two years, and
characterized under state law as misdemeanors, are not
predicate crimes. §921(20). This exception is presumably
based on the determination that such state crimes are not
sufficiently serious or dangerous so as to preclude an
individual from possessing a firearm. If “convicted in any
court” refers only to domestic convictions, this language
creates no problem. But if the phrase also refers to foreign
convictions, the language creates another apparently senseless
distinction between less serious crimes (misdemeanors
punishable by more than one year’s imprisonment) committed
within the United States (not predicate crimes) and similar
offenses committed abroad (predicate crimes). These
illustrative examples taken together suggest that Congress did
not consider whether the generic phrase “convicted in any
court” applies to domestic as well as foreign convictions.
The statute’s lengthy legislative history confirms the fact
that Congress did not consider whether foreign convictions
should or should not serve as a predicate to liability under the
provision here at issue. Congress did consider a Senate bill
containing language that would have restricted predicate
offenses to domestic offenses. See S. Rep. No. 1501, 90th Cong.,
2d Sess., p. 31 (1968) (defining predicate crimes in terms of
“Federal” crimes “punishable by a term of imprisonment
exceeding one year” and crimes “determined by the laws of the
State to be a felony”). And the Conference Committee
ultimately rejected this version in favor of language that
speaks of those “convicted in any court, of a crime punishable
by a term of imprisonment exceeding one year.” H. R. Conf.
Rep. No. 1956, 90th Cong., 2d Sess., pp. 28—29 (1968). But the
history does not suggest that this language change reflected a
congressional view on the matter before us. Rather, the
enacted version is simpler and it avoids potential difficulties
arising out of the fact that States may define the term “felony”
differently. And as far as the legislative history is concerned,
these latter virtues of the new language fully explain the
change. Thus, those who use legislative history to help discern
congressional intent will see the history here as silent, hence a
neutral factor, that simply confirms the obvious, namely, that
Congress did not consider the issue. Others will not be
tempted to use or to discuss the history at all. But cf. post, at 13
(Thomas, J., dissenting).
The statute’s purpose does offer some support for a reading
of the phrase that includes foreign convictions. As the
Government points out, Congress sought to “ ‘keep guns out of
the hands of those who have demonstrated that they may not
be trusted to possess a firearm without becoming a threat to
 society.’ ” Brief for United States 16 (quoting Dickerson v. New
Banner Institute, Inc., 460 U.S. 103, 112 (1983)); see
also Lewis v. United States, 445 U.S. 55, 60—62, 66
(1980); Huddleston v. United States, 415 U.S. 814, 824 (1974).
And, as the dissent properly notes, post, at 12, one convicted of
a serious crime abroad may well be as dangerous as one
convicted of a similar crime in the United States.
The force of this argument is weakened significantly,
however, by the empirical fact that, according to the
Government, since 1968, there have probably been no more
than “10 to a dozen” instances in which such a foreign
conviction has served as a predicate for a felon-in-possession
prosecution. Tr. of Oral Arg. 32. This empirical fact reinforces
the likelihood that Congress, at best, paid no attention to the
matter.
C the complaint, after concerned residents of Ogoniland began protesting the environmental effects of
In sum, we have no reason to believe that Congress
considered the added enforcement advantages flowing from
inclusion of foreign crimes, weighing them against, say, the
potential unfairness of preventing those with inapt foreign
convictions from possessing guns. See supra, at 4. The statute
itself and its history offer only congressional silence. Given the
reasons for disfavoring an inference of extraterritorial
coverage from a statute’s total silence and our initial
assumption against such coverage, see supra, at 5, we conclude
that the phrase “convicted in any court” refers only to
domestic courts, not to foreign courts. Congress, of course,
remains free to change this conclusion through statutory
amendment.
For these reasons, the judgment of the Third Circuit is
reversed, and the case is remanded for further proceedings
consistent with this opinion.
It is so ordered.
The Chief Justice took no part in the decision of this case.
ESTHER KIOBEL, individually and on behalf of her late husband, Dr. BARINEM KIOBEL, et al.,
PETI- TIONERS v. ROYAL DUTCH PETROLEUM CO. et al.
on writ of certiorari to the united states court of appeals for the second circuit
[April 17, 2013]
Chief Justice Roberts delivered the opinion of the Court.
21 | C o n f l i c t o f L a w s C a s e s
Petitioners, a group of Nigerian nationals residing in the United States, filed suit in federal court
against certain Dutch, British, and Nigerian corporations. Petitioners sued under the Alien Tort
Statute, 28 U. S. C. §1350, alleging that the corporations aided and abetted the Nigerian Government
in committing violations of the law of nations in Nigeria. The question presented is whether and
under what circumstances courts may recognize a cause of action under the Alien Tort Statute, for
violations of the law of nations occurring within the territory of a sovereign other than the United
States.
I
Petitioners were residents of Ogoniland, an area of 250 square miles located in the Niger delta
area of Nigeria and populated by roughly half a million people. When the complaint was filed,
respondents Royal Dutch Petroleum Company and Shell Transport and Trading Company, p.l.c.,
were holding companies incorporated in the Netherlands and England, respectively. Their joint
subsidiary, respondent Shell Petroleum Development Company of Nigeria, Ltd. (SPDC), was
incorporated in Nigeria, and engaged in oil exploration and production in Ogoniland. According to
SPDC’s practices, respondents enlisted the Nigerian Government to violently suppress the
burgeoning demonstrations. Throughout the early 1990’s, the complaint alleges, Nigerian military
and police forces attacked Ogoni vil- lages, beating, raping, killing, and arresting residents and
destroying or looting property. Petitioners further allege that respondents aided and abetted these
atrocities by, among other things, providing the Nigerian forces with food, transportation, and
compensation, as well as by al- lowing the Nigerian military to use respondents’ property as a
staging ground for attacks.
Following the alleged atrocities, petitioners moved to the United States where they have been
granted political asylum and now reside as legal residents. See Supp. Brief for Petitioners 3, and n. 2.
They filed suit in the United States District Court for the Southern District of New York, alleging
jurisdiction under the Alien Tort Statute and requesting relief under customary international law.
The ATS provides, in full, that “[t]he district courts shall have original jurisdiction of any civil action
by an alien for a tort only, committed in violation of the law of nations or a treaty of the United
States.” 28 U. S. C. §1350. According to petitioners, respondents violated the law of nations by aiding
and abetting the Nigerian Government in committing (1) extrajudicial killings; (2) crimes against
humanity; (3) torture and cruel treatment; (4) arbitrary arrest and detention; (5) violations of the
rights to life, liberty, security, and association; (6) forced exile; and (7) property destruction. The
District Court dismissed the first, fifth, sixth, and seventh claims, reasoning that the facts alleged to
support those claims did not give rise to a violation of the law of nations. The court denied
respondents’ motion to dismiss with respect to the remaining claims, but certified its order for
interlocutory appeal pursuant to §1292(b).
The Second Circuit dismissed the entire complaint, rea- soning that the law of nations does not
recognize corpo- rate liability. 621 F. 3d 111 (2010). We granted certiorari to consider that
question. 565 U. S. ___ (2011). After oral argument, we directed the parties to file supplemen- tal
briefs addressing an additional question: “Whether and under what circumstances the [ATS] allows
courts to recognize a cause of action for violations of the law of nations occurring within the
territory of a sovereign other than the United States.” 565 U. S. ___ (2012). We heard oral argument
again and now affirm the judgment below, based on our answer to the second question.
II
 Passed as part of the Judiciary Act of 1789, the ATS was invoked twice in the late 18th century,
but then only once more over the next 167 years. Act of Sept. 24, 1789, §9, 1 Stat 77; see Moxon v.
The Fanny, 17 F. Cas. 942 (No. 9,895) (DC Pa. 1793); Bolchos v. Darrel, 3 F. Cas. 810 (No. 1,607) (DC
SC 1795); O’Reilly de Camara v. Brooke, 209 U. S. 45 (1908) ; Khedivial Line, S.A.E. v. Seafarers’ Int’l
Union, 278 F. 2d 49, 51–52 (CA2 1960) (per curiam). The statute provides district courts with
jurisdiction to hear certain claims, but does not expressly provide any causes of action. We held in
Sosa v. Alvarez-Machain, 542 U. S. 692, 714 (2004) , however, that the First Congress did not intend
the provision to be “stillborn.” The grant of jurisdiction is instead “best read as having been enacted
on the understanding that the common law would provide a cause of action for [a] modest number
of international law violations.” Id., at 724. We thus held that federal courts may “recognize private
claims [for such violations] under federal common law.” Id., at 732. The Court in Sosa rejected the
plaintiff’s claim in that case for “arbitrary arrest and detention,” on the ground that it failed to state
a violation of the law of nations with the requisite “definite content and acceptance among civilized
nations.” Id., at 699, 732.
The question here is not whether petitioners have stated a proper claim under the ATS, but
whether a claim may reach conduct occurring in the territory of a foreign sovereign. Respondents
contend that claims under the ATS do not, relying primarily on a canon of statutory interpretation
known as the presumption against extraterritorial application. That canon provides that “[w]hen a
statute gives no clear indication of an extraterritorial application, it has none,” Morrison v. National
Australia Bank Ltd., 561 U. S. ___, ___ (2010) (slip op., at 6), and reflects the “presumption that United
States law governs domestically but does not rule the world,” Microsoft Corp. v. AT&T Corp., 550
U. S. 437, 454 (2007) .
This presumption “serves to protect against unintended clashes between our laws and those of
other nations which could result in international discord.” EEOC v. Arabian American Oil Co., 499
U. S. 244, 248 (1991) (Aramco). As this Court has explained:
“For us to run interference in . . . a delicate field of international relations there must be present the
affirmative intention of the Congress clearly expressed. It alone has the facilities necessary to make
fairly such an important policy decision where the possibilities of international discord are so
evident and retaliative action so certain.” Benz v. Compania Naviera Hidalgo, S. A., 353 U. S. 138, 147
(1957) . The presumption against extraterritorial application helps ensure that the Judiciary does
not erroneously adopt an interpretation of U. S. law that carries foreign pol- icy consequences not
clearly intended by the political branches.
We typically apply the presumption to discern whether an Act of Congress regulating conduct
applies abroad. See, e.g., Aramco, supra, at 246 (“These cases present the issue whether Title VII
applies extraterritorially to regulate the employment practices of United States employers who
employ United States citizens abroad”); Morrison, supra, at ___ (slip op., at 4) (noting that the
question of extraterritorial application was a “merits question,” not a question of jurisdiction). The
ATS, on the other hand, is “strictly jurisdictional.” Sosa, 542 U. S., at 713. It does not directly regulate
conduct or afford relief. It instead allows federal courts to recognize certain causes of action based
on sufficiently definite norms of international law. But we think the principles underlying the canon
of interpretation similarly constrain courts considering causes of action that may be brought under
the ATS.
Indeed, the danger of unwarranted judicial interference in the conduct of foreign policy is
magnified in the context of the ATS, because the question is not what Congress has done but instead
what courts may do. This Court in Sosa repeatedly stressed the need for judicial caution in
22 | C o n f l i c t o f L a w s C a s e s
considering which claims could be brought under the ATS, in light of foreign policy concerns. As the
Court explained, “the potential [foreign policy] implications . . . of recog- nizing . . . . causes [under
the ATS] should make courts particularly wary of impinging on the discretion of the Legislative and
Executive Branches in managing foreign affairs.” Id., at 727; see also id., at 727–728 (“Since many
attempts by federal courts to craft remedies for the violation of new norms of international law
would raise risks of adverse foreign policy consequences, they should be undertaken, if at all, with
great caution”); id., at 727 (“[T]he possible collateral consequences of making international rules
privately actionable argue for judicial caution”). These concerns, which are implicated in any case
arising under the ATS, are all the more pressing when the question is whether a cause of action
under the ATS reaches conduct within the territory of another sovereign.
These concerns are not diminished by the fact that Sosa limited federal courts to recognizing
causes of action only for alleged violations of international law norms that are “ ‘specific, universal,
and obligatory.’ ” Id., at 732 (quoting In re Estate of Marcos, Human Rights Litigation, 25 F. 3d 1467,
1475 (CA9 1994)). As demonstrated by Congress’s enactment of the Torture Victim Protection Act
of 1991, 106Stat. 73, note following 28 U. S. C. §1350, identifying such a norm is only the beginning
of defining a cause of action. See id., §3 (providing detailed definitions for extrajudicial killing and
torture); id., §2 (specifying who may be liable, creating a rule of exhaustion, and establishing a
statute of limitations). Each of these decisions carries with it significant foreign policy implications.
The principles underlying the presumption against ex- traterritoriality thus constrain courts
exercising their power under the ATS.
III
Petitioners contend that even if the presumption applies, the text, history, and purposes of the
ATS rebut it for causes of action brought under that statute. It is true that Congress, even in a
jurisdictional provision, can indicate that it intends federal law to apply to conduct occurring
abroad. See, e.g., 18 U. S. C. §1091(e) (2006 ed., Supp. V) (providing jurisdiction over the offense of
genocide “regardless of where the offense is committed” if the alleged offender is, among other
things, “present in the United States”). But to rebut the presumption, the ATS would need to evince a
“clear indication of extraterritoriality.” Morrison, 561 U. S., at ___ (slip op., at 16). It does not.
To begin, nothing in the text of the statute suggests that Congress intended causes of action
recognized under it to have extraterritorial reach. The ATS covers actions by aliens for violations of
the law of nations, but that does not imply extraterritorial reach—such violations affect- ing aliens
can occur either within or outside the United States. Nor does the fact that the text reaches “any civil
action” suggest application to torts committed abroad; it is well established that generic terms like
“any” or “every” do not rebut the presumption against extraterritoriality. See, e.g., id., at ___ (slip op.,
at 13–14); Small v. United States, 544 U. S. 385, 388 (2005) ; Aramco, 499 U. S., at 248–250; Foley
Bros., Inc. v. Filardo, 336 U. S. 281, 287 (1949) .
Petitioners make much of the fact that the ATS provides jurisdiction over civil actions for “torts”
in violation of the law of nations. They claim that in using that word, the First Congress “necessarily
meant to provide for jurisdiction over extraterritorial transitory torts that could arise on foreign
soil.” Supp. Brief for Petitioners 18. For support, they cite the common-law doctrine that allowed
courts to assume jurisdiction over such “transitory torts,” including actions for personal injury,
arising abroad. See Mostyn v. Fabrigas, 1 Cowp. 161, 177, 98 Eng. Rep. 1021, 1030 (1774)
(Mansfield, L.) (“[A]ll actions of a transitory nature that arise abroad may be laid as happening in an
English county”); Dennick v. Railroad Co., 103 U. S. 11, 18 (1881) (“Wherever, by either the common
law or the statute law of a State, a right of action has become fixed and a legal liability incurred, that
liability may be enforced and the right of action pursued in any court which has jurisdiction of such
matters and can obtain jurisdiction of the parties”).
Under the transitory torts doctrine, however, “the only justification for allowing a party to
recover when the cause of action arose in another civilized jurisdiction is a well founded belief that
it was a cause of action in that place.” Cuba R. Co. v. Crosby, 222 U. S. 473, 479 (1912) (majority
opinion of Holmes, J.). The question under Sosa is not whether a federal court has jurisdiction to
entertain a cause of action provided by foreign or even international law. The question is instead
whether the court has authority to recognize a cause of action under U. S. law to enforce a norm of
international law. The reference to “tort” does not demonstrate that the First Congress “necessarily
meant” for those causes of action to reach conduct in the territory of a foreign sovereign. In the end,
nothing in the text of the ATS evinces the requisite clear indication of extraterritoriality.
Nor does the historical background against which the ATS was enacted overcome the
presumption against ap- plication to conduct in the territory of another sovereign. See Morrison,
supra, at ___ (slip op., at 16) (noting that “[a]ssuredly context can be consulted” in determining
whether a cause of action applies abroad). We explained in Sosa that when Congress passed the
ATS, “three principal offenses against the law of nations” had been identified by Blackstone:
violation of safe conducts, infringement of the rights of ambassadors, and piracy. 542 U. S., at 723,
724; see 4 W. Blackstone, Commentaries on the Laws of England 68 (1769). The first two offenses
have no necessary extraterritorial application. Indeed, Blackstone—in describing them—did so in
terms of conduct occur- ring within the forum nation. See ibid. (describing the right of safe conducts
for those “who are here”); 1 id., at 251 (1765) (explaining that safe conducts grant a member of one
society “a right to intrude into another”); id., at 245–248 (recognizing the king’s power to “receiv[e]
ambassadors at home” and detailing their rights in the state “wherein they are appointed to
reside”); see also E. De Vattel, Law of Nations 465 (J. Chitty et al. transl. and ed. 1883) (“[O]n his
entering the country to which he is sent, and making himself known, [the ambassador] is under the
protection of the law of nations . . .”).
Two notorious episodes involving violations of the law of nations occurred in the United States
shortly before passage of the ATS. Each concerned the rights of ambas- sadors, and each involved
conduct within the Union. In 1784, a French adventurer verbally and physically assaulted Francis
Barbe Marbois—the Secretary of the French Legion—in Philadelphia. The assault led the French
Minister Plenipotentiary to lodge a formal protest with the Continental Congress and threaten to
leave the country unless an adequate remedy were provided. Respublica v. De Longschamps, 1 Dall.
111 (O. T. Phila. 1784); Sosa, supra, at 716–717, and n. 11. And in 1787, a New York constable
entered the Dutch Ambassador’s house and arrested one of his domestic servants. See Casto, The
Federal Courts’ Protective Jurisdiction over Torts Committed in Violation of the Law of Nations, 18
Conn. L. Rev. 467, 494 (1986). At the request of Secretary of Foreign Affairs John Jay, the Mayor of
New York City arrested the constable in turn, but cautioned that because “ ‘neither Congress nor our
[State] Legislature have yet passed any act respecting a breach of the privileges of Ambassadors,’ ”
the extent of any available relief would depend on the common law. See Bradley, The Alien Tort
Statute and Article III, 42 Va. J. Int’l L. 587, 641–642 (2002) (quoting 3 Dept. of State, The Diplomatic
Correspondence of the United States of America 447 (1837)). The two cases in which the ATS was
invoked shortly after its passage also concerned conduct within the territory of the United States.
See Bolchos, 3 F. Cas. 810 (wrongful seizure of slaves from a vessel while in port in the United
States); Moxon, 17 F. Cas. 942 (wrongful seizure in United States territorial waters).
23 | C o n f l i c t o f L a w s C a s e s
These prominent contemporary examples—immediately before and after passage of the ATS—
provide no support for the proposition that Congress expected causes of action to be brought under
the statute for violations of the law of nations occurring abroad.
The third example of a violation of the law of nations familiar to the Congress that enacted the
ATS was piracy. Piracy typically occurs on the high seas, beyond the territorial jurisdiction of the
United States or any other country. See 4 Blackstone, supra, at 72 (“The offence of piracy, by
common law, consists of committing those acts of robbery and depredation upon the high seas,
which, if committed upon land, would have amounted to felony there”). This Court has generally
treated the high seas the same as foreign soil for purposes of the presumption against
extraterritorial application. See, e.g., Sale v. Haitian Centers Council, Inc., 509 U. S. 155 –174 (1993)
(declining to apply a provision of the Immigration and Nationality Act to conduct occurring on the
high seas); Argentine Republic v. Amerada Hess Shipping Corp., 488 U. S. 428, 440 (1989) (declining
to apply a provision of the Foreign Sovereign Immunities Act of 1976 to the high seas). Petitioners
contend that because Congress surely intended the ATS to provide jurisdiction for actions against
pirates, it necessarily anticipated the statute would apply to conduct occurring abroad.
Applying U. S. law to pirates, however, does not typi- cally impose the sovereign will of the United
States onto conduct occurring within the territorial jurisdiction of another sovereign, and therefore
carries less direct foreign policy consequences. Pirates were fair game wherever found, by any
nation, because they generally did not operate within any jurisdiction. See 4 Blackstone, supra, at
71. We do not think that the existence of a cause of action against them is a sufficient basis for
concluding that other causes of action under the ATS reach conduct that does occur within the
territory of another sovereign; pirates may well be a category unto themselves. See Morrison, 561
U. S., at ___ (slip op., at 16) (“[W]hen a statute provides for some extraterritorial application, the
presumption against extraterritoriality operates to limit that provision to its terms”); see also
Microsoft Corp., 550 U. S., at 455–456.
Petitioners also point to a 1795 opinion authored by Attorney General William Bradford. See
Breach of Neutrality, 1 Op. Atty. Gen. 57. In 1794, in the midst of war between France and Great
Britain, and notwithstanding the American official policy of neutrality, several U. S. citizens joined a
French privateer fleet and attacked and plundered the British colony of Sierra Leone. In response to
a protest from the British Ambassador, Attorney General Bradford responded as follows:
So far . . . as the transactions complained of originated or took place in a foreign country, they are
not within the cognizance of our courts; nor can the actors be legally prosecuted or punished for
them by the United States. But crimes committed on the high seas are within the jurisdiction of the
. . . courts of the United States; and, so far as the offence was committed thereon, I am inclined to
think that it may be legally prosecuted in . . . those courts . . . . But some doubt rests on this point, in
consequence of the terms in which the [applicable criminal law] is expressed. But there can be no
doubt that the company or individuals who have been injured by these acts of hostil- ity have a
remedy by a civil suit in the courts of the United States; jurisdiction being expressly given to these
courts in all cases where an alien sues for a tort only, in violation of the laws of nations, or a treaty of
the United States . . . .” Id., at 58–59.
Petitioners read the last sentence as confirming that “the Founding generation understood the
ATS to apply to law of nations violations committed on the territory of a foreign sovereign.” Supp.
Brief for Petitioners 33. Respondents counter that when Attorney General Bradford referred to
“these acts of hostility,” he meant the acts only insofar as they took place on the high seas, and even
if his conclusion were broader, it was only because the applicable treaty had extraterritorial reach.
See Supp. Brief for Respondents 28–30. The Solicitor General, having once read the opinion to stand
for the proposition that an “ATS suit could be brought against American citizens for breaching
neutrality with Britain only if acts did not take place in a foreign country,” Supp. Brief for United
States as Amicus Curiae 8, n. 1 (internal quotation marks and brackets omitted), now suggests the
opinion “could have been meant to encompass . . . conduct [occurring within the foreign territory],”
id., at 8.
Attorney General Bradford’s opinion defies a definitive reading and we need not adopt one here.
Whatever its pre- cise meaning, it deals with U. S. citizens who, by partic- ipating in an attack taking
place both on the high seas and on a foreign shore, violated a treaty between the United States and
Great Britain. The opinion hardly suffices to counter the weighty concerns underlying the
presumption against extraterritoriality.
Finally, there is no indication that the ATS was passed to make the United States a uniquely
hospitable forum for the enforcement of international norms. As Justice Story put it, “No nation has
ever yet pretended to be the custos morum of the whole world . . . .” United States v. The La Jeune
Eugenie, 26 F. Cas. 832, 847 (No. 15,551) (CC. Mass. 1822). It is implausible to suppose that the First
Congress wanted their fledgling Republic—struggling to receive international recognition—to be
the first. Indeed, the parties offer no evidence that any nation, meek or mighty, presumed to do such
a thing.
The United States was, however, embarrassed by its potential inability to provide judicial relief to
foreign officials injured in the United States. Bradley, 42 Va. J. Int’l L., at 641. Such offenses against
ambassadors vio- lated the law of nations, “and if not adequately redressed could rise to an issue of
war.” Sosa, 542 U. S., at 715; cf. The Federalist No. 80, p. 536 (J. Cooke ed. 1961) (A. Hamilton) (“As
the denial or perversion of justice . . . is with reason classed among the just causes of war, it will
follow that the federal judiciary ought to have cognizance of all causes in which the citizens of other
countries are concerned”). The ATS ensured that the United States could provide a forum for
adjudicating such incidents. See Sosa, supra, at 715–718, and n. 11. Nothing about this historical
context suggests that Congress also intended federal common law under the ATS to provide a cause
of action for conduct occurring in the territory of another sovereign.
Indeed, far from avoiding diplomatic strife, providing such a cause of action could have generated
it. Recent experience bears this out. See Doe v. Exxon Mobil Corp., 654 F. 3d 11, 77–78 (CADC 2011)
(Kavanaugh, J., dissenting in part) (listing recent objections to extraterritorial applications of the
ATS by Canada, Germany, Indonesia, Papua New Guinea, South Africa, Switzerland, and the United
Kingdom). Moreover, accepting petitioners’ view would imply that other nations, also applying
the law of nations, could hale our citizens into their courts for alleged violations of the law of
nations occurring in the United States, or anywhere else in the world. The presumption against
extraterritoriality guards against our courts triggering such serious foreign policy consequences,
and instead defers such decisions, quite appropriately, to the political branches.
We therefore conclude that the presumption against extraterritoriality applies to claims under
the ATS, and that nothing in the statute rebuts that presumption. “[T]here is no clear indication of
extraterritoriality here,” Morrison, 561 U. S., at ___ (slip op., at 16), and petitioners’ case seeking
relief for violations of the law of nations occurring outside the United States is barred.
IV
24 | C o n f l i c t o f L a w s C a s e s
On these facts, all the relevant conduct took place outside the United States. And even where the
claims touch and concern the territory of the United States, they must do so with sufficient force to
displace the presumption against extraterritorial application. See Morrison, 561 U. S. ___ (slip op. at
17–24). Corporations are often present in many countries, and it would reach too far to say that
mere corporate presence suffices. If Congress were to determine otherwise, a statute more specific
than the ATS would be required.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
G.R. No. 198587. January 14, 2015.*
SAUDI ARABIAN AIRLINES (SAUDIA) and BRENDA J. BETIA, petitioners, vs. MA. JOPETTE M.
REBESENCIO, MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A. CRISTOBAL and LORAINE S.
SCHNEIDERCRUZ, respondents.
Conflict of Laws; Corporations; Foreign Corporations Doing Business in the Philippines; Foreign
Investments Act; A plain application of Section 3(d) of the Foreign Investments Act leads to no other
conclusion than that Saudia is a foreign corporation doing business in the Philippines. As such, Saudia
may be sued in the Philippines and is subject to the jurisdiction of Philippine tribunals.—By its own
admission, Saudia, while a foreign corporation, has a Philippine office. Section 3(d) of Republic Act
No. 7042, otherwise known as the Foreign Investments Act of 1991, provides the following: The
phrase “doing business” shall include . . . opening offices, whether called “liaison” offices or
branches; . . . and any other act or acts that imply a continuity of commercial dealings or
arrangements and contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in progressive prosecution of commercial gain or of
the purpose and object of the business organization. (Emphasis supplied) A plain application of
Section 3(d) of the Foreign Investments Act leads to no other conclusion than that Saudia is a
foreign corporation doing business in the Philippines. As such, Saudia may be sued in the
Philippines and is subject to the jurisdiction of Philippine tribunals.
Same; Contracts; Transnational transactions entail differing laws on the requirements for the
validity of the formalities and substantive provisions of contracts and their interpretation.—Trans-
national transactions entail differing laws on the requirements for the validity of the formalities and
substantive provisions of contracts and their interpretation. These transactions inevitably lend
themselves to the possibility of various fora for litigation and dispute resolution. As observed by an
eminent expert on transnational law:
_______________
* SECOND DIVISION.
141
 VOL. 746, JANUARY 14, 2015 141
Saudi Arabian Airlines (Saudia) vs. Rebesencio
The more jurisdictions having an interest in, or merely even a point of contact with, a
transaction or relationship, the greater the number of potential fora for the resolution of disputes
arising out of or related to that transaction or relationship. In a world of increased mobility, where
business and personal transactions transcend national boundaries, the jurisdiction of a number of
different fora may easily be invoked in a single or a set of related disputes.
Remedial Law; Civil Procedure; Forum Shopping; In the Philippines, the 1997 Rules on Civil
Procedure provide for willful and deliberate forum shopping as a ground not only for summary
dismissal with prejudice but also for citing parties and counsels in direct contempt, as well as for the
imposition of administrative sanctions.— In the Philippines, the 1997 Rules on Civil Procedure
provide for willful and deliberate forum shopping as a ground not only for summary dismissal with
prejudice but also for citing parties and counsels in direct contempt, as well as for the imposition of
administrative sanctions. Likewise, the same rules expressly provide that a party may seek the
dismissal of a Complaint or another pleading asserting a claim on the ground “[t]hat there is another
action pending between the same parties for the same cause,” i.e, litis pendentia, or “[t]hat the cause
of action is barred by a prior judgment,” i.e., res judicata.
Conflict of Laws; Forum Non Conveniens; The doctrine of forum non conveniens
addresses the same rationale that the rule against forum shopping does, albeit on a
multijurisdictional scale.—Forum non conveniens literally translates to “the forum is
inconvenient.” It is a concept in private international law and was devised to combat the “less
than honorable” reasons and excuses that litigants use to secure procedural advantages,
annoy and harass defendants, avoid overcrowded dockets, and select a “friendlier” venue.
Thus, the doctrine of forum non conveniensaddresses the same rationale that the rule against
forum shopping does, albeit on a multijurisdictional scale. Forum non conveniens, like res
judicata, is a concept originating in common law. However, unlike the rule on res judicata, as
well as those on litis pendentia and forum shopping, forum non conveniens finds no textual
anchor, whether in statute or in procedural rules, in our civil law system. Nevertheless,
jurisprudence has applied forum non conveniens as basis for a court to decline its exercise of
jurisdiction.
Same; Same; Under the doctrine of forum non conveniens, “a court, in conflicts of law cases, may
refuse impositions on its jurisdiction where it is not the most ‘convenient’ or available forum and the
parties are not precluded from seeking remedies elsewhere.”—Accordingly, under the doctrine
of forum non conveniens, “a court, in conflicts of law cases, mayrefuse impositions on its jurisdiction
where it is “not the most ‘convenient’ or available forum and the parties are not precluded from
seeking remedies elsewhere.” In Puyat v. Zabarte, 352 SCRA 738 (2001), this court recognized the
following situations as among those that may warrant a court’s desistance from exercising
jurisdiction: 1) The belief that the matter can be better tried and decided elsewhere, either because
the main aspects of the case transpired in a foreign jurisdiction or the material witnesses have their
residence there; 2) The belief that the nonresident plaintiff sought the forum[,] a practice known
as forum shopping[,] merely to secure procedural advantages or to convey or harass the defendant;
25 | C o n f l i c t o f L a w s C a s e s
3) The unwillingness to extend local judicial facilities to nonresidents or aliens when the docket may
already be overcrowded; 4) The inadequacy of the local judicial machinery for effectuating the right
sought to be maintained; and 5) The difficulty of ascertaining foreign law.
Same; Contracts; Principle of Autonomy of Contracts; Article 1306 of the Civil Code expressly
provides that “[t]the contracting parties may establish such stipulations, clauses, terms and conditions
as they may deem convenient.”—Our law on contracts recognizes the validity of contractual choice of
law provisions. Where such provisions exist, Philippine tribunals, acting as the forum court,
generally defer to the parties’ articulated choice. This is consistent with the fundamental principle of
autonomy of contracts. Article 1306 of the Civil Code expressly provides that “[t]he contracting
parties may establish such stipulations, clauses, terms and conditions as they may deem
convenient.” Nevertheless, while a Philippine tribunal (acting as the forum court) is called upon to
respect the parties’ choice of governing law, such respect must not be so permissive as to lose sight
of considerations of law, morals, good customs, public order, or public policy that underlie the
contract central to the controversy.
International Law; Convention on the Elimination of all Forms of Discrimination Against
Women; The Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW),
signed and ratified by the Philippines on July 15, 1980, and on August 5, 1981, respectively, is part of
the law of the land.—Article II, Section 14 of the 1987 Constitution provides that “[t]he State . . . shall
ensure the fundamental equality before the law of women and men.” Contrasted with Article II,
Section 1 of the 1987 Constitution’s statement that “[n]o person shall . . . be denied the equal
protection of the laws,” Article II, Section 14 exhorts the State to “ensure.” This does not only mean
that the Philippines shall not countenance nor lend legal recognition and approbation to measures
that discriminate on the basis of one’s being male or female. It imposes an obligation to actively
engage in securing the fundamental equality of men and women. The Convention on the Elimination
of all Forms of Discrimination against Women (CEDAW), signed and ratified by the Philippines on
July 15, 1980, and on August 5, 1981, respectively, is part of the law of the land. In view of the
widespread signing and ratification of, as well as adherence (in practice) to it by states, it may even
be said that many provisions of the CEDAW may have become customary international law.
Constitutional Law; Equal Protection of the Laws; Apart from the constitutional policy on the
fundamental equality before the law of men and women, it is settled that contracts relating to labor
and employment are impressed with public interest.—Apart from the constitutional policy on the
fundamental equality before the law of men and women, it is settled that contracts relating to labor
and employment are impressed with public interest. Article 1700 of the Civil Code provides that
“[t]he relation between capital and labor are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the common good.”
Conflict of Laws; As the present dispute relates to (what the respondents allege to be) the illegal
termination of respondents’ employment, this case is immutably a matter of public interest and public
policy. Consistent with clear pronouncements in law and jurisprudence, Philippine laws properly find
application in and govern this case.—As the present dispute relates to (what the respondents allege
to be) the illegal termination of respondents’ employment, this case is immutably a matter of public
interest and public policy. Consistent with clear pronouncements in law and jurisprudence,
Philippine laws properly find application in and govern this case. Moreover, as this premise for
Saudia’s insistence on the application forum non conveniens has been shattered, it follows that
Philippine tribunals may properly assume jurisdiction over the present controversy.
Same; Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia
which should apply, it does not follow that Philippine tribunals should refrain from exercising
jurisdiction.—As the question of applicable law has been settled, the supposed difficulty of
ascertaining foreign law (which requires the application of forum non conveniens) provides no
insurmountable inconvenience or special circumstance that will justify depriving Philippine
tribunals of jurisdiction. Even if we were to assume, for the sake of discussion, that it is the laws of
Saudi Arabia which should apply, it does not follow that Philippine tribunals should refrain from
exercising jurisdiction. To recall our pronouncements in Puyat, as well as in Bank of America NT&SA
v. Court of Appeals, 400 SCRA 156 (2003), it is not so much the mere applicability of foreign law
which calls into operation forum non conveniens. Rather, what justifies a court’s desistance from
exercising jurisdiction is “[t]he difficulty of ascertaining foreign law” or the inability of a “Philippine
Court . . . to make an intelligent decision as to the law[.]” Consistent with lex loci intentionis, to the
extent that it is proper and practicable (i.e., “to make an intelligent decision”), Philippine tribunals
may apply the foreign law selected by the parties. In fact, (albeit without meaning to make a
pronouncement on the accuracy and reliability of respondents’ citation) in this case, respondents
themselves have made averments as to the laws of Saudi Arabia.
Same; The immense public policy considerations attendant to this case behoove Philippine
tribunals to not shy away from their duty to rule on the case.—All told, the considerations for
assumption of jurisdiction by Philippine tribunals as outlined in Bank of America NT&SA have been
satisfied. First, all the parties are based in the Philippines and all the material incidents transpired in
this jurisdiction. Thus, the parties may conveniently seek relief from Philippine tribunals. Second,
Philippine tribunals are in a position to make an intelligent decision as to the law and the
facts. Third, Philippine tribunals are in a position to enforce their decisions. There is no compelling
basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the immense public policy
considerations attendant to this case behoove Philippine tribunals to not shy away from their duty
to rule on the case.
Labor Law; Maternity Leave; The very nature of a maternity leave means that a pregnant
employee will not report for work only temporarily and that she will resume the performance of her
duties as soon as the leave allowance expires.—Applying the cited standards on resignation and
constructive dismissal, it is clear that respondents were constructively dismissed. Hence, their
termination was illegal. The termination of respondents’ employment happened when they were
pregnant and expecting to incur costs on account of child delivery and infant rearing. As noted by
the Court of Appeals, pregnancy is a time when they need employment to sustain their families.
Indeed, it goes against normal and reasonable human behavior to abandon one’s livelihood in a time
of great financial need. It is clear that respondents intended to remain employed with Saudia. All
they did was avail of their maternity leaves. Evidently, the very nature of a maternity leave means
that a pregnant employee will not report for work only temporarily and that she will resume the
performance of her duties as soon as the leave allowance expires. It is also clear that respondents
exerted all efforts to remain employed with Saudia. Each of them repeatedly filed appeal letters (as
26 | C o n f l i c t o f L a w s C a s e s
much as five [5] letters in the case of Rebesencio) asking Saudia to reconsider the ultimatum that
they resign or be terminated along with the forfeiture of their benefits. Some of them even went to
Saudia’s office to personally seek reconsideration.
Same; Termination of Employment; In termination of cases, the burden of proving just or valid
cause for dismissing an employee rests on the employer.—“In termination of cases, the burden of
proving just or valid cause for dismissing an employee rests on the employer.” In this case, Saudia
makes much of how respondents supposedly completed their exit interviews, executed quitclaims,
received their separation pay, and took more than a year to file their Complaint. If at all, however,
these circumstances prove only the fact of their occurrence, nothing more. The voluntariness of
respondents’ departure from Saudia is non sequitur.
Same; Same; Quitclaims; As to respondents’ quitclaims, in Phil. Employ Services and Resources,
Inc. v. Paramio, 427 SCRA 732 (2004), the Supreme Court (SC) noted that “[i]f (a) there is clear
proof that the waiver was wangled from an unsuspecting or gullible person; or (b) the terms of the
settlement are unconscionable, and on their face invalid, such quitclaims must be struck down as
invalid or illegal.”—As to respondents’ quitclaims, in Phil. Employ Services and Resources, Inc. v.
Paramio, 427 SCRA 732 (2004), this court noted that “[i]f (a) there is clear proof that the waiver was
wangled from an unsuspecting or gullible person; or (b) the terms of the settlement are
unconscionable, and on their face invalid, such quitclaims must be struck down as invalid or illegal.”
Respondents executed their quitclaims after having been unfairly given an ultimatum to resign or be
terminated (and forfeit their benefits).
Same; Same; Illegal Dismissals; Backwages; Separation Pay; Having been illegally and unjustly
dismissed, respondents are entitled to full backwages and benefits from the time of their termination
until the finality of this Decision. They are likewise entitled to separation pay in the amount of one (1)
month’s salary for every year of service until the finality of this Decision, with a fraction of a year of at
least six (6) months being counted as one (1) whole year.—Having been illegally and unjustly
dismissed, respondents are entitled to full backwages and benefits from the time of their
termination until the finality of this Decision. They are likewise entitled to separation pay in the
amount of one (1) month’s salary for every year of service until the finality of this Decision, with a
fraction of a year of at least six (6) months being counted as one (1) whole year.
Same; Same; Same; Moral Damages; Moral damages are awarded in termination cases where
the employee’s dismissal was attended by bad faith, malice or fraud, or where it constitutes an act
oppressive to labor, or where it was done in a manner contrary to morals, good customs or public
policy.—“[M]oral damages are awarded in termination cases where the employee’s dismissal was
attended by bad faith, malice or fraud, or where it constitutes an act oppressive to labor, or where it
was done in a manner contrary to morals, good customs or public policy.” In this case, Saudia
terminated respondents’ employment in a manner that is patently discriminatory and running afoul
of the public interest that underlies employer-employee relationships. As such, respondents are
entitled to moral damages.
 Same; Same; Same; Exemplary Damages; In a long line of cases, the Supreme Court (SC)
awarded exemplary damages to illegally dismissed employees whose “dismissal[s were] effected in a
wanton, oppressive or malevolent manner.”—In a long line of cases, this court awarded exemplary
damages to illegally dismissed employees whose “dismissal[s were] effected in a wanton,
oppressive or malevolent manner.” This court has awarded exemplary damages to employees who
were terminated on such frivolous, arbitrary, and unjust grounds as membership in or involvement
with labor unions, injuries sustained in the course of employment, development of a medical
condition due to the employer’s own violation of the employment contract, and lodging of a
Complaint against the employer. Exemplary damages were also awarded to employees who were
deemed illegally dismissed by an employer in an attempt to evade compliance with statutorily
established employee benefits. Likewise, employees dismissed for supposedly just causes, but in
violation of due process requirements, were awarded exemplary damages.
Same; Same; Same; Liability of Corporate Officers; As a rule, corporate directors and officers
are not liable for the illegal termination of a corporation’s employees.—A corporation has a
personality separate and distinct from those of the persons composing it. Thus, as a rule, corporate
directors and officers are not liable for the illegal termination of a corporation’s employees. It is only
when they acted in bad faith or with malice that they become solidarily liable with the corporation.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Kapunan, Tamano, Javier & Associates for petitioners.
Altamira, Cas & Collado Law Offices for respondents.
LEONEN, J.:
All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.
This is a Petition for Review on Certiorari with application for the issuance of a temporary
restraining order and/or writ of preliminary injunction under Rule 45 of the 1997 Rules of Civil
Procedure praying that judgment be rendered reversing and setting aside the June 16, 2011
Decision1 and September 13, 2011 Resolution2 of the Court of Appeals in C.A.-G.R. S.P. No. 113006.
Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and existing
under the laws of Jeddah, Kingdom of Saudi Arabia. It has a Philippine office located at 4/F, Metro
House Building, Sen. Gil J. Puyat Avenue, Makati City. 3 In its Petition filed with this court, Saudia
identified itself as follows:
27 | C o n f l i c t o f L a w s C a s e s
1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal Decree
No. M/24 of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of Saudi Arabia (“KSA”). Its Philippine
Office is located at 4/F Metro House Building, Sen. Gil J. Puyat Avenue, Makati City (Philippine Office). It
may be served with orders of this Honorable Court through undersigned counsel at 4th and
6th Floors, Citibank Center Bldg., 8741 Paseo de Roxas, Makati City.4 (Emphasis supplied)
Respondents (complainants before the Labor Arbiter) were recruited and hired by Saudia as
Temporary Flight Attendants with the accreditation and approval of the Philippine Overseas
Employment Administration.5 After undergoing seminars required by the Philippine Overseas
Employment Administration for deployment overseas, as well as training modules offered by Saudia
(e.g., initial flight attendant/training course and transition training), and after working as
Temporary Flight Attendants, respondents became Permanent Flight Attendants. They then entered
into Cabin Attendant contracts with Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on May 16,
1990;6 Montassah B. Sacar-Adiong (Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth) on May
22, 1993;7 and Loraine SchneiderCruz (Loraine) on August 27, 1995.8
Respondents continued their employment with Saudia until they were separated from service
on various dates in 2006.9
Respondents contended that the termination of their employment was illegal. They alleged that
the termination was made solely because they were pregnant. 10
As respondents alleged, they had informed Saudia of their respective pregnancies and had gone
through the necessary procedures to process their maternity leaves. Initially, Saudia had given its
approval put later on informed respondents that its management in Jeddah, Saudi Arabia had
disapproved their maternity leaves. In addition, it required respondents to file their resignation
letters.11
Respondents were told that if they did not resign, Saudia would terminate them all the same.
The threat of termination entailed the loss of benefits, such as separation pay and ticket discount
entitlements.12
Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia’s Base Manager,
Abdulmalik Saddik (Abdulmalik).13Montassah was informed personally by Abdulmalik and a certain
Faisal Hussein on October 20, 2006 after being required to report to the office one (1) month into
her maternity leave.14 Rouen Ruth was also personally informed by Abdulmalik on October 17, 2006
after being required to report to the office by her Group Supervisor.15Loraine received a call on
October 12, 2006 from her Group Supervisor, Dakila Salvador. 16
 Saudia anchored its disapproval of respondents’ maternity leaves and demand for their
resignation on its “Unified Employment Contract for Female Cabin Attendants” (Unified
Contract).17 Under the Unified Contract, the employment of a Flight Attendant who becomes
pregnant is rendered void. It provides:
(H) Due to the essential nature of the Air Hostess functions to be physically fit onboard to
provide various services required in normal or emergency cases on both domestic/international
flights beside her role in maintaining continuous safety and security of passengers, and since she
will not be able to maintain the required medical fitness while at work in case of pregnancy,
accordingly, if the Air Hostess becomes pregnant at any time during the term of this contract,
this shall render her employment contract as void and she will be terminated due to lack of
medical fitness.18(Emphasis supplied)
In their Comment on the present Petition, 19 respondents emphasized that the Unified Contract
took effect on September 23, 2006 (the first day of Ramadan),20 well after they had filed and had
their maternity leaves approved. Ma. Jopette filed her maternity leave application on September 5,
2006.21 Montassah filed her maternity leave application on August 29, 2006, and its approval was
already indicated in Saudia’s computer system by August 30, 2006. 22 Rouen Ruth filed her maternity
leave application on September 13, 2006,23 and Loraine filed her maternity leave application on
August 22, 2006.24
Rather than comply and tender resignation letters, respondents filed separate appeal letters
that were all rejected.25
Despite these initial rejections, respondents each received calls on the morning of November 6,
2006 from Saudia’s office secretary informing them that their maternity leaves had been approved.
Saudia, however, was quick to renege on its approval. On the evening of November 6, 2006,
respondents again received calls informing them that it had received notification from Jeddah, Saudi
Arabia that their maternity leaves had been disapproved.26
Faced with the dilemma of resigning or totally losing their benefits, respondents executed
handwritten resignation letters. In Montassah’s and Rouen Ruth’s cases, their resignations were
executed on Saudia’s blank letterheads that Saudia had provided. These letterheads already had the
word “RESIGNATION” typed on the subject portions of their headings when these were handed to
respondents.27
On November 8, 2007, respondents filed a Complaint against Saudia and its officers for illegal
dismissal and for underpayment of salary, overtime pay, premium pay for holiday, rest day,
premium, service incentive leave pay, 13th month pay, separation pay, night shift differentials,
medical expense reimbursements, retirement benefits, illegal deduction, lay-over expense and
allowances, moral and exemplary damages, and attorney’s fees. 28 The case was initially assigned to
Labor Arbiter Hermino V. Suelo and docketed as NLRC NCR Case No. 00-11-12342-07.
28 | C o n f l i c t o f L a w s C a s e s
Saudia assailed the jurisdiction of the Labor Arbiter.29 It claimed that all the determining points
of contact referred to foreign law and insisted that the Complaint ought to be dismissed on the
ground of forum non conveniens.30 It added that respondents had no cause of action as they resigned
voluntarily.31
On December 12, 2008, Executive Labor Arbiter Fatima JambaroFranco rendered the
Decision32 dismissing respondents’ Complaint. The dispositive portion of this Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered DISMISSING the instant
complaint for lack of jurisdiction/merit.33
On respondents’ appeal, the National Labor Relations Commission’s Sixth Division reversed the
ruling of Executive Labor Arbiter JambaroFranco. It explained that “[c]onsidering that
complainants-appellants are OFWs, the Labor Arbiters and the NLRC has [sic] jurisdiction to hear
and decide their complaint for illegal termination.”34 On the matter of forum non conveniens, it noted
that there were no special circumstances that warranted its abstention from exercising
jurisdiction.35 On the issue of whether respondents were validly dismissed, it held that there was
nothing on record to support Saudia’s claim that respondents resigned voluntarily.
The dispositive portion of the November 19, 2009 National Labor Relations Commission
Decision36 reads:
WHEREFORE, premises considered, judgment is hereby rendered finding the appeal impressed
with merit. The respondentsappellees are hereby directed to pay complainants-appellants the
aggregate amount of SR614,001.24 corresponding to their backwages and separation pay plus ten
(10%) percent thereof as attorney’s fees. The decision of the Labor Arbiter dated December 12,
2008 is hereby VACATED and SET ASIDE. Attached is the computation prepared by this Commission
and made an integral part of this Decision.37
In the Resolution dated February 11, 2010,38 the National Labor Relations Commission denied
petitioners’ Motion for Reconsideration.
In the June 16, 2011 Decision,39 the Court of Appeals denied petitioners’ Rule 65 Petition and
modified the Decision of the National Labor Relations Commission with respect to the award of
separation pay and backwages.
The dispositive portion of the Court of Appeals’ Decision reads:
 Manila.”43 Referring to itself as “Saudia Jeddah,” it claims that “Saudia Jeddah” and not “Saudia
Manila” was the employer of respondents because:
WHEREFORE, the instant petition is hereby DENIED. The Decision dated November 19, 2009
issued by public respondent, Sixth Division of the National Labor Relations Commission-National
Capital Region is MODIFIED only insofar as the computation of the award of separation pay and
backwages. For greater clarity, petitioners are ordered to pay private respondents separation pay First, “Saudia Manila” was never a party to the Cabin Attendant contracts entered into by
which shall be computed from private respondents’ first day of employment up to the finality of this respondents;
decision, at the rate of one month per year of service and backwages which shall be computed from
the date the private respondents were illegally terminated until finality of this decision.
Consequently, the ten percent (10%) attorney’s fees shall be based on the total amount of the
award. The assailed Decision is affirmed in all other respects. Second, it was “Saudia Jeddah” that provided the funds to pay for respondents’ salaries and
benefits; and

The labor arbiter is hereby DIRECTED to make a recomputation based on the foregoing.40
Lastly, it was with “Saudia Jeddah” that respondents filed their resignations. 44

In the Resolution dated September 13, 2011,41 denied petitioners’ Motion for Reconsideration.
Saudia posits that respondents’ Complaint was brought against the wrong party because
“Saudia Manila,” upon which summons was served, was never the employer of respondents. 45

Hence, this Appeal was filed.

The issues for resolution are the following:
First, whether the Labor Arbiter and the National Labor Relations Commission may exercise
jurisdiction over Saudi Arabian Airlines and apply Philippine law in adjudicating the present
dispute;
Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its bare
allegation, there is no basis for concluding that “Saudia Jeddah” is distinct from “Saudia Manila.”
What is clear is Saudia’s statement in its own Petition that what it has is a “Philippine Office . . .
located at 4/F Metro House Building, Sen. Gil J. Puyat Avenue, Makati City.” 46 Even in the position
paper that Saudia submitted to the Labor Arbiter,47 what Saudia now refers to as “Saudia Jeddah”
was then only referred to as “Saudia Head Office at Jeddah, KSA,”48 while what Saudia now refers to
as “Saudia Manila” was then only referred to as “Saudia’s office in Manila.”49

Second, whether respondents voluntarily resigned or were illegally terminated; and Lastly,
whether Brenda J. Betia may be held personally liable along with Saudi Arabian Airlines. By its own admission, Saudia, while a foreign corporation, has a Philippine office.

I Section 3(d) of Republic Act No. 7042, otherwise known as the Foreign Investments Act of
1991, provides the following:

Summons were validly served on Saudia and jurisdiction over it validly acquired.
There is no doubt that the pleadings and summons were served on Saudia through its
counsel.42 Saudia, however, claims that the Labor Arbiter and the National Labor Relations
Commission had no jurisdiction over it because summons were never served on it but on “Saudia
The phrase “doing business” shall include . . . opening offices, whether called “liaison”
offices or branches; . . . and any other act or acts that imply a continuity of commercial dealings or
arrangements and contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in progressive prosecution of commercial gain or of
the purpose and object of the business organization. (Emphasis supplied)

29 | C o n f l i c t o f L a w s C a s e s
 A plain application of Section 3(d) of the Foreign Investments Act leads to no other conclusion
than that Saudia is a foreign corporation doing business in the Philippines. As such, Saudia may be
sued in the Philippines and is subject to the jurisdiction of Philippine tribunals.
Moreover, since there is no real distinction between “Saudia Jeddah” and “Saudia Manila” — the
latter being nothing more than Saudia’s local office — service of summons to Saudia’s office in
Manila sufficed to vest jurisdiction over Saudia’s person in Philippine tribunals.
II
Saudia asserts that Philippine courts and/or tribunals are not in a position to make an
intelligent decision as to the law and the facts. This is because respondents’ Cabin Attendant
contracts require the application of the laws of Saudi Arabia, rather than those of the
Philippines.50 It claims that the difficulty of ascertaining foreign law calls into operation the
principle of forum non conveniens, thereby rendering improper the exercise of jurisdiction by
Philippine tribunals.51
A choice of law governing the validity of contracts or the interpretation of its provisions does
not necessarily imply forum non convenzens. Choice of law and forum non conveniens are entirely
different matters.
Choice of law provisions are an offshoot of the fundamental principle of autonomy of contracts.
Article 1306 of the Civil Code firmly ensconces this:
Article 1306. The contracting parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
In contrast, forum non conveniens is a device akin to the rule against forum shopping. It is
designed to frustrate illicit means for securing advantages and vexing litigants that would otherwise
be possible if the venue of litigation (or dispute resolution) were left entirely to the whim of either
party.
Contractual choice of law provisions factor into transnational litigation and dispute resolution
in one of or in a combination of four ways: (1) procedures for settling disputes, e.g., arbitration; (2)
30 | C o n f l i c t o f L a w s C a s e s
forum, i.e., venue; (3) governing law; and (4) basis for interpretation. Forum non conveniens relates
to, but is not subsumed by, the second of these.
Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on the laws
of a given jurisdiction as the governing law of a contract does not preclude the exercise of
jurisdiction by tribunals elsewhere. The reverse is equally true: The assumption of jurisdiction by
tribunals does not ipso facto mean that it cannot apply and rule on the basis of the parties’
stipulation. In Hasegawa v. Kitamura:52
Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers
whether it is fair to cause a defendant to travel to this state; choice of law asks the further question
whether the application of a substantive law which will determine the merits of the case is fair to
both parties. The power to exercise jurisdiction does not automatically give a state constitutional
authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the
“minimum contacts” for one do not always provide the necessary “significant contacts” for the other.
The question of whether the law of a state can be applied to a transaction is different from the
question of whether the courts of that state have jurisdiction to enter a judgment. 53
As various dealings, commercial or otherwise, are facilitated by the progressive ease of
communication and travel, persons from various jurisdictions find themselves transacting with each
other. Contracts involving foreign elements are, however, nothing new. Conflict of laws situations
precipitated by disputes and litigation anchored on these contracts are not totally novel.
Transnational transactions entail differing laws on the requirements for the validity of the
formalities and substantive provisions of contracts and their interpretation. These transactions
inevitably lend themselves to the possibility of various fora for litigation and dispute resolution. As
observed by an eminent expert on transnational law:
The more jurisdictions having an interest in, or merely even a point of contact with, a
transaction or relationship, the greater the number of potential fora for the resolution of disputes
arising out of or related to that transaction or relationship. In a world of increased mobility, where
business and personal transactions transcend national boundaries, the jurisdiction of a number of
different fora may easily be invoked in a single or a set of related disputes. 54
Philippine law is definite as to what governs the formal or extrinsic validity of contracts. The
first paragraph of Article 17 of the Civil Code provides that “[t]he forms and solemnities of contracts
. . . shall be governed by the laws of the country in which they are executed” 55 (i.e., lex loci
celebrationis).
 In contrast, there is no statutorily established mode of settling conflict of laws situations on
matters pertaining to substantive content of contracts. It has been noted that three (3) modes have
emerged: (1) lex loci contractus or the law of the place of the making; (2) lex loci solutionis or the law
of the place of performance; and (3) lex loci intentionis or the law intended by the parties.56
Given Saudia’s assertions, of particular relevance to resolving the present dispute is lex loci
intentionis.
An author observed that Spanish jurists and commentators “favor lex loci intentionis.”57 These
jurists and commentators proceed from the Civil Code of Spain, which, like our Civil Code, is silent
on what governs the intrinsic validity of contracts, and the same civil law traditions from which we
draw ours.
In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P. Eusebio
Construction, Inc.,58 manifested preference for “allow[ing] the parties to select the law applicable to
their contract”:
No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule
followed by most legal systems, however, is that the intrinsic validity of a contract must be governed
by the lex contractus or “proper law of the contract.” This is the law voluntarily agreed upon by the
parties (the lex loci voluntatis) or the law intended by them either expressly or implicitly (the lex loci
intentionis). The law selected may be implied from such factors as substantial connection with the
transaction, or the nationality or domicile of the parties. Philippine courts would do well to adopt
the first and most basic rule in most legal systems, namely, to allow the parties to select the law
applicable to their contract, subject to the limitation that it is not against the law, morals, or public
policy of the forum and that the chosen law must bear a substantive relationship to the
transaction.59 (Emphasis in the original)
Saudia asserts that stipulations set in the Cabin Attendant contracts require the application of
the laws of Saudi Arabia. It insists that the need to comply with these stipulations calls into
operation the doctrine of forum non conveniens and, in turn, makes it necessary for Philippine
tribunals to refrain from exercising jurisdiction.
As mentioned, contractual choice of laws factors into transnational litigation in any or a
combination of four (4) ways. Moreover, forum non conveniens relates to one of these: choosing
between multiple possible fora.
31 | C o n f l i c t o f L a w s C a s e s
Nevertheless, the possibility of parallel litigation in multiple fora — along with the host of
difficulties it poses — is not unique to transnational litigation. It is a difficulty that similarly arises in
disputes well within the bounds of a singe jurisdiction.
When parallel litigation arises strictly within the context of a single jurisdiction, such rules as
those on forum shopping, litis pendentia, and res judicata come into operation. Thus, in the
Philippines, the 1997 Rules on Civil Procedure provide for willful and deliberate forum shopping as
a ground not only for summary dismissal with prejudice but also for citing parties and counsels in
direct contempt, as well as for the imposition of administrative sanctions. 60 Likewise, the same rules
expressly provide that a party may seek the dismissal of a Complaint or another pleading asserting a
claim on the ground “[t]hat there is another action pending between the same parties for the same
cause,” i.e, litis pendentia, or “[t]hat the cause of action is barred by a prior judgment,” 61 i.e., res
judicata.
Forum non conveniens, like the rules of forum shopping, litis pendentia, and res judicata, is a
means of addressing the problem of parallel litigation. While the rules of forum shopping, litis
pendentia, and res judicata are designed to address the problem of parallel litigation within a single
jurisdiction, forum non conveniens is a means devised to address parallel litigation arising in
multiple jurisdictions.
Forum non conveniens literally translates to “the forum is inconvenient.”62 It is a concept in
private international law and was devised to combat the “less than honorable” reasons and excuses
that litigants use to secure procedural advantages, annoy and harass defendants, avoid
overcrowded dockets, and select a “friendlier” venue. 63 Thus, the doctrine of forum non
conveniens addresses the same rationale that the rule against forum shopping does, albeit on a
multijurisdictional scale.
Forum non conveniens, like res judicata,64 is a concept originating in common law.65 However,
unlike the rule on res judicata, as well as those on litis pendentia and forum shopping, forum non
conveniens finds no textual anchor, whether in statute or in procedural rules, in our civil law system.
Nevertheless, jurisprudence has applied forum non conveniens as basis for a court to decline its
exercise of jurisdiction.66
Forum non conveniens is soundly applied not only to address parallel litigation and undermine a
litigant’s capacity to vex and secure undue advantages by engaging in forum shopping on an
international scale. It is also grounded on principles of comity and judicial efficiency.
Consistent with the principle of comity, a tribunal’s desistance in exercising jurisdiction on
account of forum non conveniens is a deferential gesture to the tribunals of another sovereign. It is a
measure that prevents the former’s having to interfere in affairs which are better and more
competently addressed by the latter. Further, forum non conveniens entails a recognition not only
that tribunals elsewhere are better suited to rule on and resolve a controversy, but also, that these
tribunals are better positioned to enforce judgments and, ultimately, to dispense justice. Forum non
conveniens prevents the embarrassment of an awkward situation where a tribunal is rendered
incompetent in the face of the greater capability — both analytical and practical of a tribunal in
another jurisdiction.
The wisdom of avoiding conflicting and unenforceable judgments is as much a matter of
efficiency and economy as it is a matter of international courtesy. A court would effectively be
neutering itself if it insists on adjudicating a controversy when it knows full well that it is in no
position to enforce its judgment. Doing so is not only an exercise in futility; it is an act of frivolity. It
clogs the dockets of a tribunal and leaves it to waste its efforts on affairs, which, given transnational
exigencies, will be reduced to mere academic, if not trivial, exercises.
Accordingly, under the doctrine of forum non conveniens, “a court, in conflicts of law
cases, may refuse impositions on its jurisdiction where it is “not the most ‘convenient’ or available
forum and the parties are not precluded from seeking remedies elsewhere.” 67 In Puyat v.
Zabarte,68 this court recognized the following situations as among those that may warrant a court’s
desistance from exercising jurisdiction:
1) The belief that the matter can be better tried and decided elsewhere, either because the main
aspects of the case transpired in a foreign jurisdiction or the material witnesses have their residence
there;
2) The belief that the nonresident plaintiff sought the forum[,] a practice known as forum
shopping[,] merely to secure procedural advantages or to convey or harass the defendant;
3) The unwillingness to extend local judicial facilities to nonresidents or aliens when the docket
may already be overcrowded;
4) The inadequacy of the local judicial machinery for effectuating the right sought to be
maintained; and
5) The difficulty of ascertaining foreign law.69
In Bank of America NT & SA, Bank of America International, Ltd. v. Court of Appeals,70 this court
underscored that a Philippine court may properly assume jurisdiction over a case if it chooses to do
so to the extent: “(1) that the Philippine Court is one to which the parties may conveniently resort
32 | C o n f l i c t o f L a w s C a s e s
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.” 71
The use of the word “may” (i.e., “may refuse impositions on its jurisdiction”)72 in the decisions
shows that the matter of jurisdiction rests on the sound discretion of a court. Neither the mere
invocation of forum non conveniens nor the averment of foreign elements operates to automatically
divest a court of jurisdiction. Rather, a court should renounce jurisdiction only “after ‘vital facts are
established, to determine whether special circumstances’ require the court’s desistance.” 73 As the
propriety of applying forum non conveniens is contingent on a factual determination, it is, therefore,
a matter of defense.74
The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is exclusive in its
recital of the grounds for dismissal that are exempt from the omnibus motion rule: (1) lack of
jurisdiction over the subject matter; (2) litis pendentia;
(3) res judicata; and (4) prescription. Moreover, dismissal on account of forum non
conveniens is a fundamentally discretionary matter. It is, therefore, not a matter for a defendant to
foist upon the court at his or her own convenience; rather, it must be pleaded at the earliest possible
opportunity.
On the matter of pleading forum non conveniens, we state the rule, thus: Forum non conveniens
must not only be clearly pleaded as a ground for dismissal; it must be pleaded as such at the earliest
possible opportunity. Otherwise, it shall be deemed waived.
This court notes that in Hasegawa,75 this court stated that forum non conveniens is not a ground
for a motion to dismiss.76 The factual ambience of this case however does not squarely raise the
viability of this doctrine. Until the opportunity comes to review the use of motions to dismiss for
parallel litigation, Hasegawa remains existing doctrine.
Consistent with forum non conveniens as fundamentally a factual matter, it is imperative that it
proceed from a factually established basis. It would be improper to dismiss an action pursuant
to forum non conveniens based merely on a perceived, likely, or hypothetical multiplicity of fora.
Thus, a defendant must also plead and show that a prior suit has, in fact, been brought in another
jurisdiction.
The existence of a prior suit makes real the vexation engendered by duplicitous litigation, the
embarrassment of intruding into the affairs of another sovereign, and the squandering of judicial
efforts in resolving a dispute already lodged and better resolved elsewhere. As has been noted:
 A case will not be stayed or dismissed on [forum] non conveniensgrounds unless the plaintiff is
shown to have an available alternative forum elsewhere. On this, the moving party bears the burden
of proof.
A number of factors affect the assessment of an alternative forum’s adequacy. The statute of
limitations abroad may have run, of the foreign court may lack either subject matter or personal
jurisdiction over the defendant. . . . Occasionally, doubts will be raised as to the integrity or
impartiality of the foreign court (based, for example, on suspicions of corruption or bias in favor of
local nationals), as to the fairness of its judicial procedures, or as to is operational efficiency (due,
for example, to lack of resources, congestion and delay, or interfering circumstances such as a civil
unrest). In one noted case, [it was found] that delays of ‘up to a quarter of a century’ rendered the
foreign forum . . . inadequate for these purposes.77
We deem it more appropriate and in the greater interest of prudence that a defendant not only
allege supposed dangerous tendencies in litigating in this jurisdiction; the defendant must also show
that such danger is real and present in that litigation or dispute resolution has commenced in another
jurisdiction and that a foreign tribunal has chosen to exercise jurisdiction.
III
Forum non conveniens finds no application and does not operate to divest Philippine tribunals
of jurisdiction and to require the application of foreign law.
Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the Cabin
Attendant contracts that require the application of the laws of Saudi Arabia.
Forum non conveniens relates to forum, not to the choice of governing law. That forum non
conveniens may ultimately result in the application of foreign law is merely an incident of its
application. In this strict sense, forum non conveniens is not applicable. It is not the primarily pivotal
consideration in this case.
In any case, even a further consideration of the applicability of forum non conveniens on the
incidental matter of the law governing respondents’ relation with Saudia leads to the conclusion
that it is improper for Philippine tribunals to divest themselves of jurisdiction.
Any evaluation of the propriety of contracting parties’ choice of a forum and its incidents must
grapple with two (2) considerations: first, the availability and adequacy of recourse to a foreign
tribunal; and second, the question of where, as between the forum court and a foreign court, the
balance of interests inhering in a dispute weighs more heavily.
33 | C o n f l i c t o f L a w s C a s e s
The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a foreign
tribunal and can be resolved by juxtaposing the competencies and practical circumstances of the
tribunals in alternative fora. Exigencies, like the statute of limitations, capacity to enforce orders and
judgments, access to records, requirements for the acquisition of jurisdiction, and even questions
relating to the integrity of foreign courts, may render undesirable or even totally unfeasible
recourse to a foreign court. As mentioned, we consider it in the greater interest of prudence that a
defendant show, in pleading forum non conveniens, that litigation has commenced in another
jurisdiction and that a foreign tribunal has, in fact, chosen to exercise jurisdiction.
Two (2) factors weigh into a court’s appraisal of the balance of interests inhering in a
dispute: first, the vinculum which the parties and their relation have to a given jurisdiction;
and second, the public interest that must animate a tribunal, in its capacity as an agent of the
sovereign, in choosing to assume or decline jurisdiction. The first is more concerned with the
parties, their personal circumstances, and private interests; the second concerns itself with the state
and the greater social order.
In considering the vinculum, a court must look into the preponderance of linkages which the
parties and their transaction may have to either jurisdiction. In this respect, factors, such as the
parties’ respective nationalities and places of negotiation, execution, performance, engagement or
deployment, come into play.
In considering public interest, a court proceeds with a consciousness that it is an organ of the
state. It must, thus, determine if he interests of the sovereign (which acts through it) are outweighed
by those of the alternative jurisdiction. In this respect, the court delves into a consideration of public
policy. Should it find that public interest weighs more heavily in favor of its assumption of
jurisdiction, it should proceed in adjudicating the dispute, any doubt or contrary view arising from
the preponderance of linkages notwithstanding.
Our law on contracts recognizes the validity of contractual choice of law provisions. Where
such provisions exist, Philippine tribunals, acting as the forum court, generally defer to the parties’
articulated choice.
This is consistent with the fundamental principle of autonomy of contracts. Article 1306 of the
Civil Code expressly provides that “[t]he contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient.”78 Nevertheless, while a Philippine tribunal
(acting as the forum court) is called upon to respect the parties’ choice of governing law, such
respect must not be so permissive as to lose sight of considerations of law, morals, good customs,
public order, or public policy that underlie the contract central to the controversy.
 Specifically with respect to public policy, in Pakistan International Airlines Corporation v.
Ople,79 this court explained that:
counter-balancing the principle of autonomy of contracting parties is the equally general rule
that provisions of applicable law, especially provisions relating to matters affected with public policy,
are deemed written into the contract. Put a little differently, the governing principle is that parties
may not contract away applicable provisions of law especially peremptory provisions dealing with
matters heavily impressed with public interest.80(Emphasis supplied)
Article II, Section 14 of the 1987 Constitution provides that “[t]he State . . . shall ensure the
fundamental equality before the law of women and men.” Contrasted with Article II, Section 1 of the
1987 Constitution’s statement that “[n]o person shall . . . be denied the equal protection of the laws,”
Article II, Section 14 exhorts the State to “ensure.” This does not only mean that the Philippines shall
not countenance nor lend legal recognition and approbation to measures that discriminate on the
basis of one’s being male or female. It imposes an obligation to actively engage in securing the
fundamental equality of men and women.
The Convention on the Elimination of all Forms of Discrimination against Women (CEDAW),
signed and ratified by the Philippines on July 15, 1980, and on August 5, 1981, respectively, 81is part
of the law of the land. In view of the widespread signing and ratification of, as well as adherence (in
practice) to it by states, it may even be said that many provisions of the CEDAW may have become
customary international law. The CEDAW gives effect to the Constitution’s policy statement in
Article II, Section 14. Article I of the CEDAW defines “discrimination against women” as:
any distinction, exclusion or restriction made on the basis of sex which has the effect or
purpose of impairing or nullifying the recognition, enjoyment or exercise by women, irrespective of
their marital status, on a basis of equality of men and women, of human rights and fundamental
freedoms in the political, economic, social, cultural, civil or any other field. 82
The constitutional exhortation to ensure fundamental equality, as illumined by its enabling law,
the CEDAW, must inform and animate all the actions of all personalities acting on behalf of the State.
It is, therefore, the bounden duty of this court, in rendering judgment on the disputes brought
before it, to ensure that no discrimination is heaped upon women on the mere basis of their being
women. This is a point so basic and central that all our discussions and pronouncements —
regardless of whatever averments there may be of foreign law — must proceed from this premise.
So informed and animated, we emphasize the glaringly discriminatory nature of Saudia’s policy.
As argued by respondents, Saudia’s policy entails the termination of employment of flight
attendants who become pregnant. At the risk of stating the obvious, pregnancy is an occurrence that
34 | C o n f l i c t o f L a w s C a s e s
pertains specifically to women. Saudia’s policy excludes from and restricts employment on the basis
of no other consideration but sex.
We do not lose sight of the reality that pregnancy does present physical limitations that may
render difficult the performance of functions associated with being a flight attendant. Nevertheless,
it would be the height of iniquity to view pregnancy as a disability so permanent and immutable that
it must entail the termination of one’s employment. It is clear to us that any individual, regardless of
gender, may be subject to exigencies that limit the performance of functions. However, we fail to
appreciate how pregnancy could be such an impairing occurrence that it leaves no other recourse
but the complete termination of the means through which a woman earns a living.
Apart from the constitutional policy on the fundamental equality before the law of men and
women, it is settled that contracts relating to labor and employment are impressed with public
interest. Article 1700 of the Civil Code provides that “[t]he relation between capital and labor are
not merely contractual. They are so impressed with public interest that labor contracts must yield to
the common good.”
Consistent with this, this court’s pronouncements in Pakistan International Airlines
Corporation83 are clear and unmistakable:
Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which
specifies, firstly, the law of Pakistan as the applicable law of the agreement. and, secondly, lays the
venue for settlement of any dispute arising out of or in connection with the agreement “only [in]
courts of Karachi, Pakistan.” The first clause of paragraph 10 cannot be invoked to prevent the
application of Philippine labor laws and regulations to the subject matter of this case, i.e., the
employer-employee relationship between petitioner PIA and private respondents. We have already
pointed out that the relationship is much affected with public interest and that the otherwise
applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon
some other law to govern their relationship. . . . Under these circumstances, paragraph 10 of the
employment agreement cannot be given effect so as to oust Philippine agencies and courts of the
jurisdiction vested upon them by Philippine law.84(Emphasis supplied)
As the present dispute relates to (what the respondents allege to be) the illegal termination of
respondents’ employment, this case is immutably a matter of public interest and public policy.
Consistent with clear pronouncements in law and jurisprudence, Philippine laws properly find
application in and govern this case. Moreover, as this premise for Saudia’s insistence on the
application forum non conveniens has been shattered, it follows that Philippine tribunals may
properly assume jurisdiction over the present controversy.
Philippine jurisprudence provides ample illustrations of when a court’s renunciation of
jurisdiction on account of forum non conveniens is proper or improper.
 In Philsec Investment Corporation v. Court of Appeals,85 this court noted that the trial court failed employment was terminated in Beijing; and third, enforce its judgment, since Santos’ employer,
to consider that one of the plaintiffs was a domestic corporation, that one of the defendants was a Palace Hotel, was incorporated under the laws of China and was not even served with summons.
Filipino, and that it was the extinguishment of the latter’s debt that was the object of the transaction
subject of the litigation. Thus, this court held, among others, that the trial court’s refusal to assume
jurisdiction was not justified by forum non conveniens and remanded the case to the trial court.
Contrary to Manila Hotel, the case now before us does not entail a preponderance of linkages
that favor a foreign jurisdiction.

In Raytheon International, Inc. v. Rouzie, Jr.,86 this court sustained the trial court’s assumption of
jurisdiction considering that the trial court could properly enforce judgment on the petitioner which
was a foreign corporation licensed to do business in the Philippines. Here, the circumstances of the parties and their relation do not approximate the circumstances
enumerated in Puyat,92 which this court recognized as possibly justifying the desistance of
Philippine tribunals from exercising jurisdiction.

In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court found no reason to disturb the trial
court’s assumption of jurisdiction over a case in which, as noted by the trial court, “it is more
convenient to hear and decide the case in the Philippines because Todaro [the plaintiff] resides in First, there is no basis for concluding that the case can be more conveniently tried elsewhere.
the Philippines and the contract allegedly breached involve[d] employment in the Philippines.” 88 As established earlier, Saudia is doing business in the Philippines. For their part, all four (4)
respondents are Filipino citizens maintaining residence in the Philippines and, apart from their
previous employment with Saudia, have no other connection to the Kingdom of Saudi Arabia. It
would even be to respondents’ inconvenience if this case were to be tried elsewhere.
In Pacific Consultants International Asia, Inc. v. Schonfeld,89 this court held that the fact that the
complainant in an illegal dismissal case was a Canadian citizen and a repatriate did not warrant the
application of forum non conveniens considering that: (1) the Labor Code does not include forum non
conveniens as a ground for the dismissal of a complaint for illegal dismissal; (2) the propriety of Second, the records are bereft of any indication that respondents filed their Complaint in an
dismissing a case based on forum non conveniens requires a factual determination; and (3) the effort to engage in forum shopping or to vex and inconvenience Saudia.
requisites for assumption of jurisdiction as laid out in Bank of America NT&SA90 were all satisfied.

Third, there is no indication of “unwillingness to extend local judicial facilities to nonresidents

In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations or aliens.”93 That Saudia has managed to bring the present controversy all the way to this court
Commission91 that the National Labor Relations Commission was a seriously inconvenient forum. In proves this.
that case, private respondent Marcelo G. Santos was working in the Sultanate of Oman when he
received a letter from Palace Hotel recruiting him for employment in Beijing, China. Santos accepted
the offer. Subsequently, however, he was released from employment supposedly due to business
reverses arising from political upheavals in China (i.e., the Tiananmen Square incidents of 1989). Fourth, it cannot be said that the local judicial machinery is inadequate for effectuating the right
Santos later filed a Complaint for illegal dismissal impleading Palace Hotel’s General Manager, Mr. sought to be maintained. Summons was properly served on Saudia and jurisdiction over its person
Gerhard Schmidt, the Manila Hotel International Company Ltd. (which was responsible for training was validly acquired.
Palace Hotel’s personnel and staff), and the Manila Hotel Corporation (which owned 50% of Manila
Hotel International Company Ltd.’s capital stock).

Lastly, there is not even room for considering foreign law. Philippine law properly governs the
present dispute.
In ruling against the National Labor Relations Commission’s exercise of jurisdiction, this court
noted that the main aspects of the case transpired in two (2) foreign jurisdictions, Oman and China,
and that the case involved purely foreign elements. Specifically, Santos was directly hired by a
foreign employer through correspondence sent to Oman. Also, the proper defendants were neither As the question of applicable law has been settled, the supposed difficulty of ascertaining
Philippine nationals nor engaged in business in the Philippines, while the main witnesses were not foreign law (which requires the application of forum non conveniens) provides no insurmountable
residents of the Philippines. Likewise, this court noted that the National Labor Relations inconvenience or special circumstance that will justify depriving Philippine tribunals of jurisdiction.
Commission was in no position to conduct the following: first, determine the law governing the
employment contract, as it was entered into in foreign soil; second, determine the facts, as Santos’

35 | C o n f l i c t o f L a w s C a s e s
 Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia which
should apply, it does not follow that Philippine tribunals should refrain from exercising jurisdiction.
To recall our pronouncements in Puyat,94 as well as in Bank of America NT&SA,95 it is not so much
the mere applicability of foreign law which calls into operation forum non conveniens. Rather, what
justifies a court’s desistance from exercising jurisdiction is “[t]he difficulty of ascertaining foreign
law”96 or the inability of a “Philippine Court . . . to make an intelligent decision as to the law[.]”97
Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., “to make
an intelligent decision”),98 Philippine tribunals may apply the foreign law selected by the parties. In
fact, (albeit without meaning to make a pronouncement on the accuracy and reliability of
respondents’ citation) in this case, respondents themselves have made averments as to the laws of
Saudi Arabia. In their Comment, respondents write:
Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful to
terminate the employment of any woman by virtue of pregnancy. The law in Saudi Arabia is even
more harsh and strict [sic] in that no employer can terminate the employment of a female worker or
give her a warning of the same while on Maternity Leave, the specific provision of Saudi Labor Laws
on the matter is hereto quoted as follows:
“An employer may not terminate the employment of a female worker or give her a warning of
the same while on maternity leave.” (Article 155, Labor Law of the Kingdom of Saudi Arabia, Royal
Decree No. M/51)99
All told, the considerations for assumption of jurisdiction by Philippine tribunals as outlined
in Bank of America NT&SA100 have been satisfied. First, all the parties are based in the Philippines
and all the material incidents transpired in this jurisdiction. Thus, the parties may conveniently seek
relief from Philippine tribunals. Second, Philippine tribunals are in a position to make an intelligent
decision as to the law and the facts. Third, Philippine tribunals are in a position to enforce their
decisions. There is no compelling basis for ceding jurisdiction to a foreign tribunal. Quite the
contrary, the immense public policy considerations attendant to this case behoove Philippine
tribunals to not shy away from their duty to rule on the case.
IV
Respondents were illegally terminated.
In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as “the voluntary
act of an employee who is in a situation where one believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate
oneself from employment. It is a formal pronouncement or relinquishment of an office, with the
36 | C o n f l i c t o f L a w s C a s e s
intention of relinquishing the office accompanied by the act of relinquishment.” 102 Thus, essential to
the act of resignation is voluntariness. It must be the result of an employee’s exercise of his or her
own will.
In the same case of Bilbao, this court advanced a means for determining whether an employee
resigned voluntarily:
As the intent to relinquish must concur with the overt act of relinquishment, the acts of the
employee before and after the alleged resignation must be considered in determining whether he or
she, in fact, intended, to sever his or her employment.103 (Emphasis supplied)
On the other hand, constructive dismissal has been defined as “cessation of work because
‘continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay’ and other benefits.”104
In Penaflor v. Outdoor Clothing Manufacturing Corporation,105constructive dismissal has been
described as tantamount to “involuntarily [sic] resignation due to the harsh, hostile, and unfavorable
conditions set by the employer.”106 In the same case, it was noted that “[t]he gauge for constructive
dismissal is whether a reasonable person in the employee’s position would feel compelled to give up
his employment under the prevailing circumstances.”107
Applying the cited standards on resignation and constructive dismissal, it is clear that
respondents were constructively dismissed. Hence, their termination was illegal.
The termination of respondents’ employment happened when they were pregnant and
expecting to incur costs on account of child delivery and infant rearing. As noted by the Court of
Appeals, pregnancy is a time when they need employment to sustain their families. 108 Indeed, it goes
against normal and reasonable human behavior to abandon one’s livelihood in a time of great
financial need.
It is clear that respondents intended to remain employed with Saudia. All they did was avail of
their maternity leaves. Evidently, the very nature of a maternity leave means that a pregnant
employee will not report for work only temporarily and that she will resume the performance of her
duties as soon as the leave allowance expires.
 It is also clear that respondents exerted all efforts to remain employed with Saudia. Each of
them repeatedly filed appeal letters (as much as five [5] letters in the case of Rebesencio) 109 asking
Saudia to reconsider the ultimatum that they resign or be terminated along with the forfeiture of
their benefits. Some of them even went to Saudia’s office to personally seek reconsideration.110
Respondents also adduced a copy of the “Unified Employment Contract for Female Cabin
Attendants.”111 This contract deemed void the employment of a flight attendant who becomes
pregnant and threatened termination due to lack of medical fitness.112 The threat of termination
(and the forfeiture of benefits that it entailed) is enough to compel a reasonable person in
respondents’ position to give up his or her employment.
Saudia draws attention to how respondents’ resignation letters were supposedly made in their
own handwriting. This minutia fails to surmount all the other indications negating any
voluntariness on respondents’ part. If at all, these same resignation letters are proof of how any
supposed resignation did not arise from respondents’ own initiative. As earlier pointed out,
respondents’ resignations were executed on Saudia’s blank letterheads that Saudia had provided.
These letterheads already had the word “RESIGNATION” typed on the subject portion of their
respective headings when these were handed to respondents.113
“In termination of cases, the burden of proving just or valid cause for dismissing an employee
rests on the employer.”114 In this case, Saudia makes much of how respondents supposedly
completed their exit interviews, executed quitclaims, received their separation pay, and took more
than a year to file their Complaint.115 If at all, however, these circumstances prove only the fact of
their occurrence, nothing more. The voluntariness of respondents’ departure from Saudia is non
sequitur.
Mere compliance with standard procedures or processes, such as the completion of their exit
interviews, neither negates compulsion nor indicates voluntariness.
As with respondent’s resignation letters, their exit interview forms even support their claim of
illegal dismissal and militates against Saudia’s arguments. These exit interview forms, as
reproduced by Saudia in its own Petition, confirms the unfavorable conditions as regards
respondents’ maternity leaves. Ma. Jopette’s and Loraine’s exit interview forms are particularly
telling:
a. From Ma. Jopette’s exit interview form:
3. In what respects has the job met or failed to meet your expectations?
THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE. 116
37 | C o n f l i c t o f L a w s C a s e s
b. From Loraine’s exit interview form:
1. What are your main reasons for leaving Saudia? What company are you joining?
xxx xxx xxx
Others
CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY)117
As to respondents’ quitclaims, in Phil. Employ Services and Resources, Inc. v. Paramio,118 this
court noted that “[i]f (a) there is clear proof that the waiver was wangled from an unsuspecting or
gullible person; or (b) the terms of the settlement are unconscionable, and on their face invalid, such
quitclaims must be struck down as invalid or illegal.”119 Respondents executed their quitclaims after
having been unfairly given an ultimatum to resign or be terminated (and forfeit their benefits).
V
Having been illegally and unjustly dismissed, respondents are entitled to full backwages and
benefits from the time of their termination until the finality of this Decision. They are likewise
entitled to separation pay in the amount of one (1) month’s salary for every year of service until the
finality of this Decision, with a fraction of a year of at least six (6) months being counted as one (1)
whole year.
Moreover, “[m]oral damages are awarded in termination cases where the employee’s dismissal
was attended by bad faith, malice or fraud, or where it constitutes an act oppressive to labor, or
where it was done in a manner contrary to morals, good customs or public policy.” 120 In this case,
Saudia terminated respondents’ employment in a manner that is patently discriminatory and
running afoul of the public interest that underlies employer-employee relationships. As such,
respondents are entitled to moral damages.
To provide an “example or correction for the public good”121 as against such discriminatory and
callous schemes, respondents are likewise entitled to exemplary damages.
In a long line of cases, this court awarded exemplary damages to illegally dismissed employees
whose “dismissal[s were] effected in a wanton, oppressive or malevolent manner.” 122 This court has
awarded exemplary damages to employees who were terminated on such frivolous, arbitrary, and
unjust grounds as membership in or involvement with labor unions, 123 injuries sustained in the Respondents have not produced proof to show that Brenda J. Betia acted in bad faith or with
course of employment,124development of a medical condition due to the employer’s own violation of malice as regards their termination. Thus, she may not be held solidarily liable with Saudia.
the employment contract,125 and lodging of a Complaint against the employer.126 Exemplary
damages were also awarded to employees who were deemed illegally dismissed by an employer in
an attempt to evade compliance with statutorily established employee benefits. 127 Likewise,
employees dismissed for supposedly just causes, but in violation of due process requirements, were WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not solidarily
awarded exemplary damages.128 liable with petitioner Saudi Arabian Airlines, and second, that petitioner Saudi Arabian Airlines is
liable for moral and exemplary damages. The June 16, 2011 Decision and the September 13, 2011
Resolution of the Court of Appeals in C.A.-G.R. S.P. No. 113006 are hereby AFFIRMED in all other
respects. Accordingly, petitioner Saudi Arabian Airlines is ordered to pay respondents:
These examples pale in comparison to the present controversy. Stripped of all unnecessary
complexities, respondents were dismissed for no other reason than simply that they were pregnant.
This is as wanton, oppressive, and tainted with bad faith as any reason for termination of
employment can be. This is no ordinary case of illegal dismissal. This is a case of manifest gender (1) Full backwages and all other benefits computed from the respective dates in which each of
discrimination. It is an affront not only to our statutes and policies on employees’ security of tenure, the respondents were illegally terminated until the finality of this Decision;
but more so, to the Constitution’s dictum of fundamental equality between men and women. 129 The
award of exemplary damages is, therefore, warranted, not only to remind employers of the need to
adhere to the requirements of procedural and substantive due process in termination of
employment, but more importantly, to demonstrate that gender discrimination should in no case be (2) Separation pay computed from the respective dates in which each of the respondents
countenanced. commenced employment until the finality of this Decision at the rate of one (1) month’s salary for
every year of service, with a fraction of a year of at least six (6) months being counted as one (1)
whole year;

Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal,
respondents are likewise entitled to attorney’s fees in the amount of 10% of the total monetary
award.130 (3) Moral damages in the amount of P100,000.00 per respondent;

VI (4) Exemplary damages in the amount of P200,000.00 per respondent; and

Petitioner Brenda J. Betia may not be held liable. (5) Attorney’s fees equivalent to 10% of the total award.

A corporation has a personality separate and distinct from those of the persons composing it. Interest of 6% per annum shall likewise be imposed on the total judgment award from the
Thus, as a rule, corporate directors and officers are not liable for the illegal termination of a finality of this Decision until full satisfaction thereof.
corporation’s employees. It is only when they acted in bad faith or with malice that they become
solidarily liable with the corporation.131

This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts
due to respondents which petitioner Saudi Arabian Airlines should pay without delay.
In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever
Electrical,132 this court clarified that “[b]ad faith does not connote bad judgment or negligence; it
imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means
breach of a known duty through some motive or interest or ill will; it partakes of the nature of SO ORDERED.
fraud.”133
Carpio (Chairperson), Velasco, Jr.,** Del Castillo and Mendoza, JJ., concur.

38 | C o n f l i c t o f L a w s C a s e s
 Judgment and resolution affirmed with modifications.
Notes.—A foreign corporation doing business in the Philippines without a license may still sue
before the Philippine courts a Filipino or a Philippine entity that had derived some benefit from
their contractual arrangement because the latter is considered to be estopped from challenging the
personality of a corporation after it had acknowledged the said corporation by entering into a
contract with it. (Steelcase, Inc. vs. Design International Selections, Inc., 670 SCRA 64 [2012])
As a general rule “the officer cannot be held personally liable with the corporation, whether
civilly or otherwise, for the consequences of his acts, if acted for and in behalf of the corporation,
within the scope of his authority and in good faith.” (Laborte vs. Pagsanjan Tourism Consumers’
Cooperative, 713 SCRA 536 [2014])
——o0o——
Hilton v. Guyot
Nos. 130, 34
Argued April 10, 1894
Decided June 3, 1895
159 U.S. 113
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK
Syllabus
A citizen and resident of this country who has his principal place of business here but has an
agent in a foreign country and is accustomed to purchase and store large quantities of goods
there, and, in a suit brought against him by a citizen and in a court of that country, appears and
defends with the sole object of preventing his property within the jurisdiction, but not in the
custody of that court, from being taken in satisfaction of any judgment that may be recovered
against him there cannot, in an action brought against him in this country upon such a judgment,
impeach it for want of jurisdiction of his person.
The admission at the trial in a court of a foreign country, according to its law and practice, of
testimony not under oath and without opportunity of cross-examination, and of documents with
which the defendant had no connection and which by our law would not be admissible against
him, is not of itself a sufficient ground for impeaching the judgment of that court in an action
brought upon it in this country.
39 | C o n f l i c t o f L a w s C a s e s
When an action is brought in a court of this country by a citizen of a foreign country against one
of our own citizens to recover a sum of money adjudged by a court of that country to be due
from the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a
competent court, having jurisdiction of the cause and of the parties, and upon due allegations
and proofs and opportunity to defend against them, and its proceedings are according to the
course of a civilized jurisprudence, and are stated in a clear and formal record, the judgment
is prima facie evidence, at least, of the truth of the matter adjudged, and the judgment is
conclusive upon the merits tried in the foreign court unless some special ground is shown for
impeaching it, as by showing that it was affected by fraud or prejudice or that, by the principles
of international law and by the comity of our own country, it is not entitled to full credit and credit.
A judgment for a sum of money, rendered by a court of a foreign country, having jurisdiction of
the cause and of the parties, in a suit brought by
Page 159 U. S. 114
one of its citizens against one of ours, is prima facie evidence only, and not conclusive of the
merits of the claim in an action brought here upon the judgment if by the law of the foreign
country, as in France, judgments of our own courts are not recognized as conclusive.
The first of these two cases was an action at law, brought December 18, 1885, in the Circuit
Court of the United States for the Southern District of New York, by Gustave Bertin Guyot, as
official liquidator of the firm of Charles Fortin & Co., and by the surviving members of that firm,
all aliens and citizens of the Republic of France, against Henry Hilton and William Libbey,
citizens of the United States and of the State of New York and trading as copartners in the cities
of New York and Paris and elsewhere under the firm name of A. T. Stewart & Co. The action
was upon a judgment recovered in a French court at Paris, in the Republic of France, by the firm
of Charles Fortin & Co., all of whose members were French citizens, against Hilton & Libbey,
trading as copartners, as aforesaid, and citizens of the United States and of the State of New
York.
The complaint alleged that in 1886 and since, during the time of all the transactions included in
the judgment sued on, Hilton and Libbey, as successors to Alexander T. Stewart and Libbey,
under the firm name of A. T. Stewart & Co., carried on a general business as merchants in the
Cities of New York and Paris and elsewhere, and maintained a regular store and place of
business at Paris; that during the same time, Charles Fortin & Co. carried on the manufacture
and sale of gloves at Paris, and the two firms had there large dealings in that business, and
controversies arose in the adjustment of accounts between them.
The complaint further alleged that between March 1, 1879, and December 1, 1882, five suits
were brought by Fortin & Co. against Stewart & Co. for sums alleged to be due, and three suits
by Stewart & Co. against Fortin & Co., in the Tribunal of Commerce of the Department of the
Seine, a judicial tribunal or court organized and existing under the laws of France, sitting at Paris
and having jurisdiction of suits and controversies between merchants or traders growing
Page 159 U. S. 115
out of commercial dealings between them; that Stewart & Co. appeared by their authorized
attorneys in all those suits, and that, after full hearing before an arbitrator appointed by that court
and before the court itself, and after all the suits had been consolidated by the court, final
judgment was rendered on January 20, 1883, that Fortin & Co. recover of Stewart & Co. various
sums, arising out of the dealings between them, amounting to 660,847 francs, with interest, and
dismissed part of Fortin & Co.'s claim.
The complaint further alleged that appeals were taken by both parties from that judgment to the
Court of Appeal of Paris, Third Section, an appellate court of record organized and existing
under the laws of the Republic of France and having jurisdiction of appeals from the final
judgments of the Tribunal of Commerce of the Department of the Seine, where the amount in
dispute exceeded the sum of 1,500 francs, and that the said Court of Appeal, by a final judgment
rendered March 19, 1884, and remaining of record in the office of its clerk at Paris, after hearing
the several parties by their counsel, and upon full consideration of the merits, dismissed the
appeal of the defendants, confirmed the judgment of the lower court in favor of the plaintiffs, and
ordered, upon the plaintiffs' appeal, that they recover the additional sum of 152,528 francs, with
182,849 francs for interest on all the claims allowed, and 12,559 francs for costs and expenses.
The complaint further alleged that Guyot had been duly appointed by the Tribunal of Commerce
of the Department of the Seine official liquidator of the firm of Forth & Co., with full powers,
according to law and commercial usage, for the verification and realization of its property, both
real and personal, and to collect and cause to be executed the judgments aforesaid.
The complaint further alleged that the judgment of the Court of Appeals of Paris, and the
judgment of the Tribunal of Commerce, as modified by the judgment of the appellate court, still
remain in full force and effect;
"that the said courts respectively had jurisdiction of the subject matter of the controversies so
submitted to them, and of the parties, the
Page 159 U. S. 116
said defendants having intervened, by their attorneys and counsel, and applied for affirmative
relief in both courts; that the plaintiffs have hitherto been unable to collect the said judgments or
any part thereof, by reason of the absence of the said defendants, they having given up their
business in Paris prior to the recovery of the said judgment on appeal, and having left no
property within the jurisdiction of the Republic of France out of which the said judgments might
be made;"
and that there are still justly due and owing from the defendants to the plaintiffs upon those said
judgments certain sums, specified in the complaint, and amounting in all to 1,008,783 francs in
the currency of the Republic of France, equivalent to $195,122.47.
The defendants, in their answer, set forth in detail the original contracts and transactions in
France between the parties and the subsequent dealings between them modifying those
contracts, and alleged that the plaintiffs had no just claim against the defendants, but that, on
the contrary, the defendants, upon a just settlement of the accounts, were entitled to recover
large sums from the plaintiffs.
40 | C o n f l i c t o f L a w s C a s e s
The answer admitted the proceedings and judgments in the French courts and that the
defendants gave up their business in France before the judgment on appeal, and had no
property within the jurisdiction of France out of which that judgment could be collected.
The answer further alleged that the Tribunal of Commerce of the Department of the Seine was a
tribunal whose judges were merchants, ship captains, stockbrokers, and persons engaged in
commercial pursuits, and of which Charles Fortin had been a member until shortly before the
commencement of the litigation.
The answer further alleged that in the original suits brought against the defendants by Fortin &
Co., the citations were left at their storehouse in Paris; that they were then residents and citizens
of the State of New York, and neither of them at that time, or within four years before, had been
within, or resident or domiciled within, the jurisdiction of that tribunal or owed any allegiance to
France, but that
Page 159 U. S. 117
they were the owners of property situated in that country which would by the law of France have
been liable to seizure if they did not appear in that tribunal, and that they unwillingly, and solely
for the purpose of protecting that property, authorized and caused an agent to appear for them in
those proceedings, and that the suits brought by them against Fortin & Co. were brought for the
same purpose, and in order to make a proper defense, and to establish counterclaims arising
out of the transactions between the parties, and to compel the production and inspection of
Fortin & Co.'s books, and that they sought no other affirmative relief in that tribunal.
The answer further alleged that, pending that litigation, the defendants discovered gross frauds
in the accounts of Fourtin & Co., that the arbitrator and the tribunal declined to compel Fortin &
Co. to produce their books and papers for inspection, and that, if they had been produced, the
judgment would not have been obtained against the defendants.
The answer further alleged that without any fault or negligence on the part of the defendants,
there was not a full and fair trial of the controversies before the arbitrator, in that no witness was
sworn or affirmed; in that Charles Fortin was permitted to make, and did make, statements not
under oath containing many falsehoods; in that the privilege of cross-examination of Fortin and
other persons who made statements before the arbitrator was denied to the defendants, and in
that extracts from printed newspapers, the knowledge of which was not brought home to the
defendants, and letters and other communications in writing between Fortin & Co. and third
persons, to which the defendants were neither privy nor party, were received by the arbitrator;
that without such improper evidence, the judgment would not have been obtained, and that the
arbitrator was deceived and misled by the false and fraudulent accounts introduced by Fortin &
Co. and by the hearsay testimony given, without the solemnity of an oath and without cross-
examination, and by the fraudulent suppression of the books and papers.
The answer further alleged that Fortin & Co. made up their statements and accounts falsely and
fraudulently, and with
Page 159 U. S. 118
intent to deceive the defendants and the arbitrator and the said courts of France, and those
courts were deceived and misled thereby; that owing to the fraudulent suppression of the books
and papers of Fortin & Co. upon the trial and the false statements of Fortin regarding matters
involved in the controversy, the arbitrator and the courts of France
"were deceived and misled in regard to the merits of the controversies pending before them, and
wrongfully decided against said Stewart & Co., as hereinbefore stated; that said judgment,
hereinbefore mentioned, is fraudulent, and based upon false and fraudulent accounts and
statements, and is erroneous in fact and in law, and is void; that the trial hereinbefore mentioned
was not conducted according to the usages and practice of the common law, and the allegations
and proofs given by said Fortin & Co., upon which said judgment is founded, would not be
competent or admissible in any court or tribunal of the United States, in any suit between the
same parties involving the same subject matter, and it is contrary to natural justice and public
policy that the said judgment should be enforced against a citizen of the United States, and that,
if there had been a full and fair trial upon the merits of the controversies so pending before said
tribunals, no judgment would have been obtained against said Stewart & Co."
"Defendants, further answering, allege that it is contrary to natural justice that the judgment
hereinbefore mentioned should be enforced without an examination of the merits thereof; that by
the laws of the Republic of France, to-wit, article 181 [121] of the Royal Ordinance of June 15,
1629, it is provided namely:"
"Judgments rendered, contracts or obligations recognized, in foreign kingdoms and
sovereignties, for any cause whatever shall give rise to no lien or execution in our Kingdom.
Thus, the contracts shall stand for simple promises, and, notwithstanding such judgments, our
subjects against whom they have been rendered may contest their rights anew before our own
judges."
"And it is further provided by the laws of France, by article 546 of the Code de Procedure Civile,
as follows:"
" Judgments rendered by foreign tribunals shall be capable of execution
Page 159 U. S. 119
in France only in the manner and in the cases set forth by articles 2123 and 2128 of the Civil
Code."
"And it is further provided by the laws of France, by article 2128 [2123] of the Code de
Procedure Civile [Civil Code]:"
" A lien cannot, in like manner, arise from judgments rendered in any foreign country, save only
as they have been declared in force by a French tribunal, without prejudice, however, to
provisions to the contrary, contained in public laws and treaties."
"[And by article 2128 of that Code: 'Contracts entered into in a foreign country cannot give a lien
upon property in France if there are no provisions contrary to this principle in public laws or in
treaties.']"
41 | C o n f l i c t o f L a w s C a s e s
"That the construction given to said statutes by the judicial tribunals of France is such that no
comity is displayed towards the judgments of tribunals of foreign countries against the citizens of
France, when sued upon in said courts of France, and the merits of the controversies upon
which the said judgments are based are examined anew, unless a treaty to the contrary effect
exists between the said Republic of France and the country in which such judgment is obtained.
That no treaty exists between the said Republic of France and the United States, by the terms or
effect of which the judgments of either country are prevented from being examined anew upon
the merits, when sued upon in the courts of the country other than that in which it is obtained.
That the tribunals of the Republic of France give no force and effect, within the jurisdiction of the
said country, to the duly rendered judgments of courts of competent jurisdiction of the United
States against citizens of France, after proper personal service of the process of said courts is
made thereon in this country."
The answer further set up, by way of counterclaim and in detail, various matters arising out of
the dealings between the parties, and alleged that none of the plaintiffs had since 1881 been
residents of the State of New York, or within the jurisdiction of that state, but the defendants
were, and always had been, residents of that state.
The answer concluded by demanding that the plaintiffs'
Page 159 U. S. 120
complaint be dismissed, and that the defendants have judgment against them upon the
counterclaims, amounting to $102,942.91.
The plaintiffs filed a replication to so much of the answer as made counterclaims, denying its
allegations and setting up in bar thereof the judgment sued on.
The defendants, on June 22, 1888, filed a bill in equity against the plaintiffs setting forth the
same matters as in their answer to the action at law and praying for a discovery and for an
injunction against the prosecution of the action. To that bill a plea was filed setting up the French
judgments, and upon a hearing, the bill was dismissed. 42 F. 249. From the decree dismissing
the bill an appeal was taken, which is the second case now before this Court.
The action at law afterwards came on for trial by a jury, and the plaintiffs put in the records of the
proceedings and judgments in the French courts, and evidence that the jurisdiction of those
courts was as alleged in the complaint and that the practice followed and the method of
examining the witnesses were according to the French law, and also proved the title of Guyot as
liquidator.
It was admitted by both parties that for several years prior to 1876, the firm of Alexander T.
Stewart & Co., composed of Stewart and Libbey, conducted their business as merchants in the
City of New York, with branches in other cities of America and Europe; that both partners were
citizens and residents of the City and State of New York during the entire period mentioned in
the complaint, and that in April, 1876, Stewart died, and Hilton and Libbey formed a partnership
to continue the business under the same firm name, and became the owners of all the property
and rights of the old firm.
The defendants made numerous offers of evidence in support of all the specific allegations of
fact in their answer, including the allegations as to the law and comity of France. The plaintiffs, in
their brief filed in this Court, admitted that most of these offers
"were offers to prove matters in support of the defenses and counterclaims set up by the
defendants in the cases tried before the French courts, and which, or most
Page 159 U. S. 121
of which, would have been relevant and competent if the plaintiffs in error are not concluded by
the result of those litigations, and have now the right to try those issues, either on the ground
that the French judgments are only prima facieevidence of the correctness of those judgments,
or on the ground that the case is within the exception of a judgment obtained by fraud."
The defendants, in order to show that they should not be concluded by having appeared and
litigated in the suits brought against them by the plaintiffs in the French courts, offered to prove
that they were residents and citizens of the State of New York, and neither of them had been,
within four years prior to the commencement of those suits, domiciled or resident within the
jurisdiction of those courts; that they had a purchasing agent and a storehouse in Paris, but only
as a means or facility to aid in the transaction of their principal business, which was in New York,
and they were never otherwise engaged in business in France; that neither of them owed
allegiance to France, but they were the owners of property there which would, according to the
laws of France, have been liable to seizure if they had not appeared to answer in those suits;
that they unwillingly, and solely for the purpose of protecting their property within the jurisdiction
of the French tribunal, authorized an agent to appear, and he did appear in the proceedings
before it, and that their motion to compel an inspection of the plaintiffs' books, as well as the
suits brought by the defendants in France, were necessary by way of defense or counterclaim to
the suits there brought by the plaintiffs against them.
Among the matters which the defendants alleged and offered to prove in order to show that the
French judgments were procured by fraud were that Fortin & Co., with intent to deceive and
defraud the defendants, and the arbitrator and the courts of France, entered in their books, and
presented to the defendants, and to the French courts, accounts bearing upon the transactions
in controversy which were false and fraudulent, and contained excessive and fraudulent charges
against the defendants in various particulars, specified; that the
Page 159 U. S. 122
defendants made due application to the Tribunal of Commerce to compel Fortin & Co. to allow
their account books and letter books to be inspected by the defendants, and the application was
opposed by Fortin & Co., and denied by the tribunal; that the discovery and inspection of those
books were necessary to determine the truth of the controversies between the parties; that
before the Tribunal of Commerce, Charles Fortin was permitted to and did give in evidence
statements not under oath relating to the merits of the controversies there pending, and falsely
represented that a certain written contract made in 1873 between Stewart & Co. and Fortin &
Co. concerning their dealings was not intended by the parties to be operative according to its
terms, and in support of that false representation made statements as to admissions by Stewart
in a private conversation with him, and that the defendants could not deny those statements,
because Stewart was dead, and they were not protected from the effect of Fortin's statements
by the privilege of cross-examining him under oath, and that the French judgments were based
42 | C o n f l i c t o f L a w s C a s e s
upon false and fraudulent accounts presented and statements made by Fortin & Co. before the
Tribunal of Commerce during the trial before it.
The records of the judgments of the French courts, put in evidence by the plaintiffs, showed that
all the matters now relied on to show fraud were contested in and considered by those courts.
The plaintiffs objected to all the evidence offered by the defendants on the grounds that the
matters offered to be proved were irrelevant, immaterial, and incompetent; that in respect to
them the defendants were concluded by the judgment sued on and given in evidence, and that
none of those matters, if proved, would be a defense to this action upon that judgment.
The court declined to admit any of the evidence so offered by the defendants, and directed a
verdict for the plaintiffs in the sum of $277,775.44, being the amount of the French judgment and
interest. The defendants, having duly excepted to the rulings and direction of the court, sued out
a writ of error.
Page 159 U. S. 123
The writ of error in the action at law and the appeal in the suit in equity were argued together in
this Court in January, 1894, and, by direction of the Court, were reargued in April, 1894, before a
full Bench.
Page 159 U. S. 162
MR. JUSTICE GRAY, after stating the case, delivered the opinion of the Court.
These two cases -- the one at law and the other in equity -- of Hilton v. Guyot, and the case
of Ritchie v. McMullen, which has been under advisement at the same time, present important
questions relating to the force and effect of foreign judgments not hitherto adjudicated by this
Court, which have been argued
Page 159 U. S. 163
with great learning and ability and which require for their satisfactory determination a full
consideration of the authorities. To avoid confusion in indicating the parties, it will be convenient
first to take the case at law of Hilton v. Guyot.
International law, in its widest and most comprehensive sense -- including not only questions of
right between nations, governed by what has been appropriately called the "law of nations," but
also questions arising under what is usually called "private international law," or the "conflict of
laws," and concerning the rights of persons within the territory and dominion of one nation by
reason of acts, private or public, done within the dominions of another nation -- is part of our law,
and must be ascertained and administered by the courts of justice as often as such questions
are presented in litigation between man and man, duly submitted to their determination.
The most certain guide, no doubt, for the decision of such questions is a treaty or a statute of
this country. But when, as is the case here, there is no written law upon the subject, the duty still
rests upon the judicial tribunals of ascertaining and declaring what the law is, whenever it Page 159 U. S. 165
becomes necessary to do so in order to determine the rights of parties to suits regularly brought
before them. In doing this, the courts must obtain such aid as they can from judicial decisions,
of her institutions; that in the conflict of laws it must often be a matter of doubt which should
from the works of jurists and commentators, and from the acts and usages of civilized
prevail, and that, whenever a doubt does exist, the court which decides will prefer the laws of its
nations. Fremont v. United States, 17 How. 542, 58 U. S. 557; The Scotia, 14 Wall. 170, 81 U. S.
own country to that of the stranger."
188; Respublica v. De Longchamps, 1 Dall. 111, 1 U. S. 116; Moultrie v. Hunt,23 N.Y. 394, 396.

Story's Conflict of Laws § 28; Saul v. His Creditors (1827), 5 Martin (N.S.) 569, 596.
No law has any effect, of its own force, beyond the limits of the sovereignty from which its
authority is derived. The extent to which the law of one nation, as put in force within its territory,
whether by executive order, by legislative act, or by judicial decree shall be allowed to operate Again, Mr. Justice Story says:
within the dominion of another nation depends upon what our greatest jurists have been content
to call "the comity of nations." Although the phrase has been often criticized, no satisfactory
substitute has been suggested. "It has been thought by some jurists that the term comity is not sufficiently expressive of the
obligation of nations to give effect to foreign laws when they are not prejudicial to their own rights
and interests. And it has been suggested that the doctrine rests on a deeper foundation; that it is
"Comity," in the legal sense, is neither a matter of absolute not so much a matter of comity or courtesy as a matter of paramount moral duty. Now, assuming
that such a moral duty does exist, it is clearly one of imperfect obligation, like that of
beneficence, humanity, and charity. Every nation must be the final judge for itself not only of the
Page 159 U. S. 164
nature and extent of the duty, but of the occasions on which its exercise may be justly
demanded."
obligation, on the one hand, nor of mere courtesy and goodwill, upon the other. But it is the
recognition which one nation allows within its territory to the legislative, executive, or judicial acts
And after further discussion of the matter, be concludes:
of another nation, having due regard both to international duty and convenience and to the rights
of its own citizens or of other persons was are under the protection of its laws.
"There is, then, not only no impropriety in the use of the phrase 'comity of nations,' but it is the
most appropriate phrase to express the true foundation and extent of the obligation of the laws
MR. JUSTICE Story, in his Commentaries on the Conflict of Laws, treating of the question in
of one nation within the territories of another."
what department of the government of any state, in the absence of any clear declaration of the
sovereign will, resides the authority to determine how far the laws of a foreign state shall have
effect, and observing that this differs in different states according to the organization of the Story's Conflict of Laws §§ 33-38.
departments of the government of each, says:
Chief Justice Taney, likewise, speaking for this Court, while Mr. Justice Story was a member of
"In England and America, the courts of justice have hitherto exercised the same authority in the it, and largely adopting his words, said:
most ample manner, and the legislatures have in no instance (it is believed) in either country
interfered to provide any positive regulations. The common law of both countries has been
expanded to meet the exigencies of the times as they have arisen, and so far as the practice of "It is needless to enumerate here the instances in which, by the general practice of civilized
countries, the laws of the one will, by the comity of nations, be recognized and executed in
nations, or the jus gentium privatum, has been supposed to furnish any general principle, it has
been followed out." another where the rights of individuals are concerned. . . . The comity thus extended to other
nations is no impeachment of sovereignty. It is the voluntary act of the nation by which it is
offered, and is inadmissible when contrary to its policy, or prejudicial to its interests. But it
Story's Conflict of Laws §§ 23, 24. contributes so largely to promote justice between individuals, and to produce a friendly
intercourse between the sovereignties to which they belong, that courts of justice have
continually acted upon it as a part of the voluntary law of nations. . . . It is not the comity of the
Afterwards, speaking of the difficulty of applying the positive rules laid down by the Continental
courts, but the comity
jurists, he says that "there is indeed great truth" in these remarks of Mr. Justice Porter, speaking
for the Supreme Court of Louisiana:
Page 159 U. S. 166
"They have attempted to go too far to define and fix that which cannot, in the nature of things, be
defined and fixed. They seem to have forgotten that they wrote on a question which touched the of the nation, which is administered and ascertained in the same way, and guided by the same
comity of nations, and that that comity is, and ever must be, uncertain; that it must necessarily reasoning, by which all other principles of municipal law are ascertained and guided."
depend on a variety of circumstances which cannot be reduced to any certain rule; that no
nation will suffer the laws of another to interfere with her own to the injury of her citizens; that
whether they do or not must depend on the condition of the country in which the foreign law is Bank v. Earle (1839), 13 Pet. 519, 38 U. S. 589; Story on Conflict of Laws § 38.
sought to be enforced, the particular nature of her legislation, her policy, and the character

43 | C o n f l i c t o f L a w s C a s e s
Mr. Wheaton says:
"All the effect which foreign laws can have in the territory of a state depends absolutely on the
express or tacit consent of that state. . . . The express consent of a state to the application of
foreign laws within its territory is given by acts passed by its legislative authority, or by treaties
concluded with other states. Its tacit consent is manifested by the decisions of its judicial and
administrative authorities, as well as by the writings of its publicists. There is no obligation
recognized by legislators, public authorities, and publicists to regard foreign laws; but their
application is admitted only from considerations of utility and the mutual convenience of
states, ex commitate, ob reciprocam utilitatem."
Wheaton's International Law (8th ed.) §§ 78, 79.
"No sovereign is bound, unless by special compact, to execute within his dominions a judgment
rendered by the tribunals of another state, and if execution be sought by suit upon the judgment
or otherwise, the tribunal in which the suit is brought, or from which execution is sought, is on
principle at liberty to examine into the merits of such judgment, and to give effect to it or not, as
may be found just and equitable. The general comity, utility, and convenience of nations have,
however, established a usage among most civilized states by which the final judgments of
foreign courts of competent jurisdiction are reciprocally carried into execution, under certain
regulations and restrictions, which differ in different countries."
§ 147.
Chancellor Kent says: "The effect to be given to foreign judgments is altogether a matter of
comity in cases where it is not regulated by treaty." 2 Kent Com. (6th ed.) 120.
In order to appreciate the weight of the various authorities cited at the bar, it is important to
distinguish different kinds of judgments. Every foreign judgment, of whatever nature, in order to
be entitled to any effect, must have been rendered
Page 159 U. S. 167
by a court having jurisdiction of the cause, and upon regular proceedings, and due notice. In
alluding to different kinds of judgments, therefore, such jurisdiction, proceedings, and notice will
be assumed. It will also be assumed that they are untainted by fraud, the effect of which will be
considered later.
A judgment in rem, adjudicating the title to a ship or other movable property within the custody of
the court, is treated as valid everywhere. As said by Chief Justice Marshall:
"The sentence of a competent court proceeding in rem is conclusive with respect to the thing
itself, and operates as an absolute change of the property. By such sentence, the right of the
former owner is lost and a complete title given to the person who claims under the decree. No
court of coordinate jurisdiction can examine the sentence. The question, therefore, respecting its
conformity to general or municipal law can never arise, for no coordinate tribunal is capable of
making the inquiry."
44 | C o n f l i c t o f L a w s C a s e s
Williams v. Armroyd, 7 Cranch 423, 11 U. S. 432. The most common illustrations of this are
decrees of courts of admiralty and prize, which proceed upon principles of international
law. Croudson v. Leonard, 4 Cranch 434; Williams v. Armroyd,above cited; Ludlow v. Dale, 1
Johns.Cas. 16. But the same rule applies to judgments in rem under municipal law. Hudson v.
Guestier, 4 Cranch 293; Ennis v. Smith, 14 How. 400, 45 U. S. 430; Wisconsin v. Pelican Ins.
Co., 127 U. S. 265, 127 U. S. 291; Scott v. McNeal, 154 U. S. 34, 154 U. S. 46; Castrique v.
Imrie, L.R. 4 H.L. 414; Monroe v. Douglas, 4 Sandf.Ch. 126.
A judgment affecting the status of persons, such as a decree confirming or dissolving a
marriage, is recognized as valid in every country unless contrary to the policy of its own
law. Cottington's Case, 2 Swanston 326; Roach v. Garvan, 1 Ves.Sen. 157; Harvey v. Farnie, 8
App.Cas. 43; Cheely v. Clayton, 110 U. S. 701. It was of a foreign sentence of divorce that Lord
Chancellor Nottingham, in the House of Lords, in 1678, in Cottington's Case, above cited, said:
"It is against the law of nations not to give credit to the judgments and sentences of foreign
countries till they be reversed by the law,
Page 159 U. S. 168
and according to the form, of those countries wherein they were given, for what right hath one
kingdom to reverse the judgment of another? And how can we refuse to let a sentence take
place till it be reversed? And what confusion would follow in Christendom if they should serve us
so abroad, and give no credit to our sentences."
Other judgments, not strictly in rem, under which a person has been compelled to pay money,
are so far conclusive that the justice of the payment cannot be impeached in another country, so
as to compel him to pay it again. For instance, a judgment in foreign attachment is conclusive,
as between the parties, of the right to the property or money attached. Story on Conflict of Laws
(2d ed.) § 592a. And if, on the dissolution of a partnership, one partner promises to indemnify
the other against the debts of the partnership, a judgment for such a debt, under which the latter
has been compelled to pay it, is conclusive evidence of the debt in a suit by him to recover the
amount upon the promise of indemnity. It was of such a judgment and in such a suit that Lord
Nottingham said:
"Let the plaintiff receive back so much of the money brought into court as may be adequate to
the sum paid on the sentence for custom, the justice whereof is not examinable here."
Gold v. Canham (1679), 2 Swanst. 325, 1 Cas. in Ch. 311. See also Tarleton v. Tarleton, 4 M. &
S. 20; Konitzky v. Meyer, 49 N.Y. 571.
Other foreign judgments which have been held conclusive of the matter adjudged were
judgments discharging obligations contracted in the foreign country between citizens or
residents thereof. Story on Conflict of Laws §§ 330-341; May v. Breed, 7 Cush. 15. Such was
the case cited at the bar of Burroughs or Burrows v. Jamineau or Jemino, Mosely 1, 2 Strange
733, 2 Eq.Cas.Ab. p. 525, pl. 7, 12 Vin.Ab. p. 87, pl. 9 Sel.Cas. in Ch. 69; 1 Dickens 48.
In that case, bills of exchange drawn in London were negotiated, endorsed, and accepted at
Leghorn, in Italy, by the law of which an acceptance became void if the drawer failed without
leaving effects in the acceptor's hands. The acceptor accordingly, having received advices that
the drawer had failed
Page 159 U. S. 169
before the acceptances, brought a suit at Leghorn against the last endorsees to be discharged
of his acceptances, paid the money into court, and obtained a sentence there by which the
acceptances were vacated as against those endorsees, and all the endorsers and negotiators of
the bills, and the money deposited was returned to him. Being afterwards sued at law in England
by subsequent holders of the bills, he applied to the Court of Chancery, and obtained a
perpetual injunction. Lord Chancellor King, as reported by Strange,
"was clearly of opinion that this cause was to be determined according to the local laws of the
place where the bill was negotiated, and, the plaintiff's acceptance of the bill having been
vacated and declared void by a court of competent jurisdiction, he thought that sentence was
conclusive, and bound the Court of Chancery here;"
as reported in Viner, that "the court at Leghorn had jurisdiction of the thing and of the persons;"
and, as reported by Mosely, that though
"the last endorsees had the sole property of the bills, and were therefore made the only parties
to the suit at Leghorn, yet the sentence made the acceptance void against the now defendants
and all others."
It is doubtful, at the least, whether such a sentence was entitled to the effect given to it by Lord
Chancellor King. See Novelli v. Rossi, 2 B. & A. 757; Castrique v. Imrie, L.R. 4 H.L. 414, 435; 2
Smith's Lead.Cas. (2d ed.) 450.
The remark of Lord Hardwicke, arguendo, as Chief Justice, in Boucher v. Lawson (1734) that
"the reason gone upon by Lord Chancellor King, in the case of Burroughs v. Jamineau, was
certainly right that where any court, whether foreign or domestic, that has the proper jurisdiction
of the cases makes a determination, it is conclusive to all other courts,"
evidently had reference, as the context shows, to judgments of a court having jurisdiction of the
thing, and did not touch the effect of an executory judgment for a debt. Cas.temp.Hardw. 85, 89;
Cunningham 144, 148.
In former times, foreign decrees in admiralty in personam were executed, even by imprisonment
of the defendant, by the court of admiralty in England, upon letters rogatory from the foreign
sovereign, without a new suit. Its right to
Page 159 U. S. 170
do so was recognized by the court of King's Bench in 1607 in a case of habeas corpus, cited by
the plaintiffs, and reported as follows:
45 | C o n f l i c t o f L a w s C a s e s
"If a man of Frizeland sues an Englishman in Frizeland before the governor there, and there
recovers against him a certain sum, upon which the Englishman, not having sufficient to satisfy
it, comes into England, upon which the governor sends his letters missive into England, omnes
magistratus infra regnum Angliae rogans, to make execution of the said judgment, the judge of
the admiralty may execute this judgment by imprisonment of the party, and he shall not be
delivered by the common law, for this is by the law of nations that the justice of one nation
should be aiding to the justice of another nation, and for one to execute the judgment of the
other, and the law of England takes notice of this law, and the judge of the admiralty is the
proper magistrate for this purpose, for he only hath the execution of the civil law within the realm.
Pasch. 5 Jac.B.R., Weir's Case, resolved upon a habeas corpus and remanded."
1 Rol.Ab. p. 530, pl. 12; 6 Vin.Ab. p. 512, pl. 12. But the only question there raised or decided
was of the power of the English court of admiralty, and not of the conclusiveness of the foreign
sentence, and in later times the mode of enforcing a foreign decree in admiralty is by a new
libel. See The City of Mecca, 5 P.D. 28, 6 P.D. 106.
The extraterritorial effect of judgments in personam at law or in equity may differ according to the
parties to the cause. A judgment of that kind between two citizens or residents of the country,
and thereby subject to the jurisdiction in which it is rendered, may be held conclusive as
between them everywhere. So if a foreigner invokes the jurisdiction by bringing an action against
a citizen, both may be held bound by a judgment in favor of either, and if a citizen sues a
foreigner and judgment is rendered in favor of the latter, both may be held equally
bound. Ricardo v. Garcias, 12 Cl. & Fin. 368; The Griefswald, Swabey 430, 435; Barber v.
Lamb, 8 C.B. (N.S.) 95; Lea v. Deakin, 11 Bissell 23.
The effect to which a judgment, purely executory, rendered
Page 159 U. S. 171
in favor of a citizen or resident of the country, in a suit there brought by him against a foreigner,
may be entitled in an action thereon against the latter in his own country, as is the case now
before us, presents a more difficult question, upon which there has been some diversity of
opinion.
Early in the last century, it was settled in England that a foreign judgment on a debt was
considered not like a judgment of a domestic court of record, as a record or a specialty, a lawful
consideration for which was conclusively presumed, but as a simple contract only.
This clearly appears in Dupleix v. De Roven (1705), where one of two merchants in France
recovered a judgment there against the other for a sum of money, which not being paid, he
brought a suit in chancery in England for a discovery of assets and satisfaction of the debt, and
the defendant pleaded the statute of limitations of six years, and prevailed, Lord Keeper Cowper
saying:
"Although the plaintiff obtained a judgment or sentence in France, yet here the debt must be
considered as a debt by simple contract. The plaintiff can maintain no action here but
an indebitatus assumpsit or an insimul computassent, so that the statute of limitations is
pleadable in this case."
2 Vernon 540.
Several opinions of Lord Hardwicke define and illustrate the effect of foreign judgments when
sued on or pleaded in England.
In Otway v. Ramsay (1736), in the King's Bench, Lord Hardwicke treated it as worthy of
consideration "what credit is to be given by one court to the courts of another nation, proceeding
both by the same rules of law," and said: "It is very desirable in such case that the judgment
given in one kingdom should be considered as res judicata in another." But it was held that debt
would not lie in Ireland upon an English judgment, because "Ireland must be considered as a
provincial kingdom, part of the dominions of the crown of England, but no part of the realm," and
an action of debt on a judgment was local. 4 B. & C. 414-416, note; s.c., 14 Vin.Ab. 569, pl.;, 2
Stra. 1090.
A decision of Lord Hardwicke as Chancellor was mentioned
Page 159 U. S. 172
in Walker v. Witter (1778), 1 Doug. 1, 6, by Lord Mansfield, who said:
"He recollected a case of a decree on the chancery side in one of the courts of great sessions in
Wales, from which there was an appeal to the House of Lords, and the decree affirmed there.
Afterwards, a bill was filed in the Court of Chancery, on the foundation of the decree so affirmed,
and Lord Hardwicke thought himself entitled to examine into the justice of the decision of the
House of Lords, because the original decree was in the court of Wales, whose decisions were
clearly liable to be examined."
And in Galbraith v. Neville (1789), 1 Doug. 6, note, Mr. Justice Buller said:
"I have often heard Lord Mansfield repeat what was said by Lord Hardwicke in the case alluded
to from Wales, and the ground of his lordship's opinion was this: when you call for my assistance
to carry into effect the decision of some other tribunal, you shall not have it if it appears that you
are in the wrong, and it was on that account that he said he would examine into the propriety of
the decree."
The case before Lord Hardwicke mentioned by Lord Mansfield would appear (notwithstanding
the doubt of its authenticity expressed by Lord Kenyon in Galbraith v. Neville) to have been a
suit to recover a legacy, briefly reported, with references to Lord Hardwicke's note book, and to
the original record, as Morgan v. Morgan (1737-1738), West.Ch. 181, 597; s.c., 1 Atk. 53, 408.
In Gage v. Bulkeley (1744), briefly reported in 3 Atk. 215, cited by the plaintiffs, a plea of a
foreign sentence in a commissary court in France was overruled by Lord Hardwicke, saying: "It
is the most proper case to stand for an answer, with liberty to except, that I ever met with." His
reasons are fully stated in two other reports of the case. According to one of them, at the
opening of the argument, he said:
"Can a sentence or judgment pronounced by a foreign jurisdiction be pleaded in this Kingdom to
a demand for the same thing in any court of justice here? I always thought it could not, because
46 | C o n f l i c t o f L a w s C a s e s
every sentence, having its authority from the sovereign in whose dominions it is given, cannot
bind the jurisdiction of foreign courts, who own not the same authority,
Page 159 U. S. 173
and have a different sovereign, and are only bound by judicial sentence given under the same
sovereign power by which they themselves act. . . . But though a foreign sentence cannot be
used by way of plea in the courts here, yet it may be taken advantage of in the way of evidence.
. . . You cannot in this Kingdom maintain debt upon judgment obtained for money in a foreign
jurisdiction, but you may on assumpsit in nature of debt, upon a simple contract, and give the
judgment in evidence, and have a verdict, so that the distinction seems to be, where such
foreign sentence is used as a plea to bind the courts here as a judgment, and when it is made
use of in evidence as binding the justice of the case only."
And afterwards, in giving his decision, he said:
"The first question is whether the subject matter of the plea is good. The second is whether it is
well pleaded. The first question depends upon this: whether the sentence or judgment of a
foreign court can be used by way of plea in a court of justice in England, and no authority, either
at law or in equity, has been produced to show that it may be pleaded, and therefore I shall be
very cautious how I establish such a precedent. . . . It is true such sentence is an evidence which
may affect the right of this demand when the cause comes to be heard, but if it is no plea in a
court of law to bind their jurisdiction, I do not see why it should be so here."
Ridgeway temp. Hardw. 263, 264, 270, 273. A similar report of his judgment is in 2 Ves.Sen.
(Belt's Supp.) 409, 410.
In Roach v. Garvan (1748), where an infant ward of the Court of Chancery had been married in
France by her guardian to his son before a French court, and the son "petitioned for a decree for
cohabitation with his wife, and to have some money out of the bank," Lord Hardwicke said, as to
the validity of the marriage:
"It has been argued to be valid, from being established by the sentence of a court in France
having proper jurisdiction, and it is true that, if so, it is conclusive, whether in a foreign court or
not, from the law of nations in such cases; otherwise, the rights of mankind would be very
precarious and uncertain. But the question is whether this is a proper sentence, in a proper
cause, and between proper
Page 159 U. S. 174
parties, of which it is impossible to judge without looking further into the proceedings, this being
rather the execution of the sentence than the sentence itself."
And after observing upon the competency of the French tribunal and pointing out that restitution
of conjugal rights was within the jurisdiction of the ecclesiastical court, and not of the Court of
Chancery, he added: "Much less will I order any money out of the bank to be given him." 1
Ves.Sen. 157, 159. He thus clearly recognized the difference between admitting the effect of a
foreign judgment as adjudicating the status of persons and executing a foreign judgment by nor the defendant, for they spoke of it as a court of record in Jamaica. The question was brought
enforcing a claim for money. to a narrow point, for it was admitted on the part of the defendant that indebitatus
assumpsitwould have lain, and on the part of the plaintiff that the judgment was only prima
facie evidence of the debt. That being so, the judgment was not a specialty, but the debt only a
These decisions of Lord Hardwicke demonstrate that, in his opinion, whenever the question was
simple contract debt, for assumpsit will not lie on a specialty. The difficulty in the case had arisen
of giving effect to a foreign judgment for money in a suit in England between the parties, it did
from not fixing accurately what a court of record is in the eye of the law. That description is
not have the weight of a domestic judgment, and could not be considered as a bar or as
confined properly to certain courts in England, and their judgments cannot be controverted.
conclusive, but only as evidence of the same weight as a simple contract, and the propriety and
Foreign courts, and courts in England not of record, have not that privilege, nor the courts in
justice of the judgment might be examined.
Wales, etc. But the doctrine in the case of Sinclair v. Fraser was unquestionable. Foreign
judgments are
In Sinclair v. Fraser (1771), the appellant, having as attorney in Jamaica made large advances
for his constituent in Scotland and having been superseded in office, brought an action before
Page 159 U. S. 176
the Supreme Court of Jamaica, and, after appearance, obtained judgment against him, and
afterwards brought an action against him in Scotland upon that judgment. The Court of Session
determined that the plaintiff was bound to prove before it the ground, nature, and extent of the a ground of action everywhere, but they are examinable."
demand on which the judgment in Jamaica was obtained, and therefore gave judgment against
him. But the House of Lords (in which, as remarked by one reporter, Lord Mansfield was then
Justices Willes, Ashurst, and Buller concurred, the two latter saying that wherever indebitatus
the presiding spirit, acting in concert with or for the Lord Chancellor in disposing of the Scotch
assumpsit will lie, debt will also lie. 1 Doug. 1, 5, 6.
appeals)

In Herbert v. Cook (1782), again, in an action of debt upon a judgment of an inferior English
"ordered and declared that the judgment of the Supreme Court of Jamaica ought to be received
court, not a court of record, Lord Mansfield said that it was "like a foreign judgment, and not
as evidence prima facie of the debt, and that it lies upon the defendant to impeach the justice
conclusive evidence of the debt." Willes 36, note.
thereof or to show the same to have been irregularly obtained,"

and therefore reversed the judgment of the Court of Session. 2 Paton ix, 253; s.c., 6 Morison
Dict.Dec. 4542; 1 Doug. 5, note.
Page 159 U. S. 175
Accordingly, in Crawford v. Witten (1773), a declaration in assumpsit, in an action in England
upon a judgment recovered in the Mayor's Court of Calcutta, in Bengal, without showing the
cause of action there, was held good on demurrer. Lord Mansfield considered the case perfectly
clear. Mr. Justice Aston, according to one report, said: "The declaration is sufficient. We are not
to suppose it an unlawful debt," and, according to another report:
"They admitted the assumpsit by their demurrer. When an action comes properly before any
court, it must be determined by the laws which govern the country in which the action accrued."
And Mr. Justice Ashurst said: "I have often known assumpsit brought on judgments in foreign
courts. The judgment is a sufficient consideration to support the implied promise." Loft, 154; s.c.,
nom. Crawford v. Whittal, 1 Doug. 4, note.
In Walker v. Witter (1778), an action of debt was brought in England upon a judgment recovered
in Jamacia. The defendant pleaded nil debet and nul tiel record. Judgment was given for the
plaintiff, Lord Mansfield saying:
In Galbraith v. Neville (1789), upon a motion for a new trial after verdict for the plaintiff in an
action of debt on a judgment of the Supreme Court of Jamaica, Lord Kenyon expressed "very
serious doubts concerning the doctrine laid down in Walker v. Witter that foreign judgments are
not binding on the parties here." But Mr. Justice Buller said:
"The doctrine which was laid down in Sinclair v. Fraser has always been considered as the true
line ever since -- namely that the foreign judgment shall be prima facie evidence of the debt, and
conclusive till it be impeached by the other party. . . . As to actions of this sort, see how far the
court could go if what was said in Walker v. Witter were departed from. It was there held that the
foreign judgment was only to be taken to be right prima facie -- that is, we will allow the same
force to a foreign judgment that we do to those of our own courts not of record. But if the matter
were carried further, we should give them more credit; we should give them equal force with
those of courts of record here. Now a foreign judgment has never been considered as a record.
It cannot be declared on as such, and a plea of nul tiel record, in such a case, is a mere nullity.
How then can it have the same obligatory force? In short, the result is this: that it is prima
facie evidence of the justice of the demand in an action of assumpsit, having no more credit than
is given to every species of written agreement, viz., that it shall be considered as good till it is
impeached."
1 Doug. 6, note. And the court afterwards unanimously refused the new trial, because,
"without entering into the question how far a foreign judgment was impeachable, it was at all
events clear that it was prima facie evidence of the debt, and they were of opinion

"The plea of nul tiel record was improper. Though the plaintiffs had called the judgment a record,
Page 159 U. S. 177
yet, by the additional words in the declaration, it was clear they did not mean that sort of record
to which implicit faith is given by the courts of Westminster Hall. They had not misled the court

47 | C o n f l i c t o f L a w s C a s e s
that no evidence had been adduced to impeach this."
5 East 475, note.
In Messing v. Massareene (1791), the plaintiff, having obtained a judgment against the
defendants in a French court, brought an action of assumpsit upon it in England, and, the
defendants having suffered a default, moved for a reference to a master, and for a final
judgment on his report, without executing a writ of inquiry. The motion was denied, Lord Kenyon
saying: "This is an attempt to carry the rule further than has yet been done, and, as there is no
instance of the kind, I am not disposed to make a precedent for it," and Mr. Justice Buller saying:
"Though debt will lie here on a foreign judgment, the defendant may go into the consideration of
it." 4 T.R. 493.
In Bayley v. Edwards (1792), the judicial committee of the Privy Council, upon appeal from
Jamaica, held that a suit in equity pending in England was not a good plea in bar to a
subsequent bill in Jamaica for the same matter, and Lord Camden said:
extent to which it would be obligatory, perhaps, in the country in which it was pronounced, nor as
obligatory to the extent to which, by our law, sentences and judgments are obligatory not as
conclusive, but as matter in pais, as consideration prima facie sufficient to raise a promise. We
examine it as we do all other considerations or promises, and for that purpose we receive
evidence of what the law of the foreign state is, and whether the judgment is warranted by that
law."
2 H.Bl. 402, 409-410.
In Wright v. Simpson (1802), Lord Chancellor Eldon said:
"Natural law requires the courts of this country to give credit to those of another for the
inclination and power to do justice, but not if that presumption is proved to be ill founded in that
transaction which is the subject of it, and if it appears in evidence that persons suing under
similar circumstances neither had met, nor could meet, with justice, that fact cannot be
immaterial as an answer to the presumption."

"In Gage v. Bulkeley [evidently referring to the full report in Ridgeway, above quoted, which had 6 Ves. 714, 730.
been cited by counsel], Lord Hardwicke's reasons go a great way to show the true effect of
foreign sentences in this country, and all the cases show that foreign sentences are not
Page 159 U. S. 179
conclusive bars here, but only evidence of the demand."

Under Lord Ellenborough, the distinction between a suit on a foreign judgment in favor of the
3 Swanston 703, 708, 710.
plaintiff against the defendant, and a suit to recover money which the plaintiff had been
compelled to pay under a judgment abroad, was clearly maintained.
In Phillips v. Hunter (1795), the House of Lords, in accordance with the opinion of the majority of
the judges consulted and against that of Chief Justice Eyre, decided that a creditor of an English
In Buchanan v. Rucker (1808), in assumpsit upon a judgment rendered in the Island of Tobago,
bankrupt, who had obtained payment of his debt by foreign attachment in Pennsylvania, was
the defendant pleaded non assumpsit and prevailed because it appeared that he was not a
liable to an action for the money by the assignees in bankruptcy in England. But it was agreed
resident of the island, and was neither personally served with process nor came in to defend,
on all hands that the judgment in Pennsylvania and payment under it were conclusive as
and the only notice was, according to the practice of the court, by nailing up a copy of the
between the garnishee and the plaintiff in that suit, and the distinction between the effect of a
declaration at the courthouse door. It was argued that "the presumption was in favor of a foreign
foreign judgment which vests title, and of one which only declares that a certain sum of money is
judgment, as well as of a judgment obtained in one of the courts of this country," to which Lord
due, was clearly stated by Chief Justice Eyre as follows:
Ellenborough answered:

Page 159 U. S. 178

"This judgment against the garnishee in the court of Pennsylvania was recovered properly or
improperly. If, notwithstanding the bankruptcy, the debt remained liable to an attachment
according to the laws of that country, the judgment was proper; if, according to the laws of that
country, the property in the debt was divested out of the bankrupt debtor and vested in his
assignees, the judgment was improper. But this was a question to be decided, in the cause
instituted in Pennsylvania, by the courts of that country, and not by us. We cannot examine their
judgment, and if we could, we have not the means of doing it in this case. It is not stated upon
this record, nor can we take notice, what the law of Pennsylvania is upon this subject. If we had
the means, we could not examine a judgment of a court in a foreign state, brought before us in
this manner."
"It is in one way only that the sentence or judgment of a court of a foreign state is examinable in
our courts, and that is when the party who claims the benefit of it applies to our courts to enforce
it. When it is thus voluntarily submitted to our jurisdiction, we treat it not as obligatory to the
"That may be so if the judgment appears, on the face of it, consistent with reason and justice,
but it is contrary to the first principles of reason and justice that, either in civil or criminal
proceedings, a man should be condemned before he is heard. . . . There might be such glaring
injustice on the face of a foreign judgment, or it might have a vice rendering it so ludicrous, that it
could not raise an assumpsit, and, if submitted to the jurisdiction of the courts of this country,
could not be enforced."
1 Camp. 63, 66-67. A motion for a new trial was denied. 9 East 192. And see Sadler v.
Robins (1808), 1 Camp. 253, 256.
In Hall v. Odber (1809), in assumpsit upon a judgment obtained in Canada, with other counts on
the original debt, Lord Ellenborough and Justices Grose, Le Blanc, and Bayley agreed that a
foreign judgment was not to be considered as having the same force as a domestic judgment,
but only that of a simple contract between the parties, and did not merge the original cause of

48 | C o n f l i c t o f L a w s C a s e s
action, but was only evidence of the debt, and therefore assumpsit would lie, either upon the
judgment or upon the original cause of action. 11 East 118.
In Tarleton v. Tarleton (1815), on the other hand, the action was brought upon a covenant of
indemnity in an agreement for dissolution of a partnership to recover a sum which the
Page 159 U. S. 180
plaintiff had been compelled to pay under a decision in a suit between the parties in the Island of
Grenada. Such was the case of which Lord Ellenborough, affirming his own ruling at the trial,
said:
"I thought that I did not sit at nisi prius to try a writ of error in this case upon the proceedings in
the court abroad. The defendant had notice of the proceedings, and should have appeared and
made his defense. The plaintiff, by this neglect, has been obliged to pay the money in order to
avoid a sequestration."
The distinction was clearly brought out by Mr. Justice Bayley, who said: "As between the parties
to the suit, the justice of it might be again litigated, but as against a stranger it cannot.� 4 M. &
S. 20, 22-23.
In Harris v. Saunders (1825), Chief Justice Abbott (afterwards Lord Tenterden) and his
associates, upon the authority of Otway v. Ramsay, above cited, held that even since the Act of
Union of 39 & 40 Geo. III. c. 67, assumpsit would lie in England upon a judgment recovered in
Ireland, because such a judgment could not be considered a specialty debt in England. 4 B. & C.
411, 6 D. & R. 471.
The English cases above referred to have been stated with the more particularity and detail,
because they directly bear upon the question what was the English law, being then our own law,
before the Declaration of Independence? They demonstrate that, by that law as generally
understood, and as declared by Hardwicke, Mansfield, Buller, Camden, Eyre, and Ellenborough,
and doubted by Kenyon only, a judgment recovered in a foreign country for a sum of money,
when sued upon in England, was only prima facie evidence of the demand, and subject to be
examined and impeached. The law of England since it has become to us a foreign country will
be considered afterwards.
The law upon this subject as understood in the United States at the time of their separation from
the mother country was clearly set forth by Chief Justice Parsons, speaking for the Supreme
Judicial Court of Massachusetts in 1813, and by Mr. Justice Story in his Commentaries on the
Constitution of the United States, published in 1833. Both those
Page 159 U. S. 181
eminent jurists declared that, by the law of England, the general rule was that foreign judgments
were only prima facieevidence of the matter which they purported to decide, and that, by the
common law before the American Revolution, all the courts of the several colonies and states
were deemed foreign to each other, and consequently judgments rendered by any one of them
were considered as foreign judgments, and their merits reexaminable in another colony not only
49 | C o n f l i c t o f L a w s C a s e s
as to the jurisdiction of the court which pronounced them, but also as to the merits of the
controversy, to the extent to which they were understood to be reexaminable in England. And
they noted that in order to remove that inconvenience, statutes had been passed in
Massachusetts, and in some of the other colonies, by which judgments rendered by a court of
competent jurisdiction in a neighboring colony could not be impeached. Bissell v. Briggs, 9
Mass. 462, 464-465; Mass.Stat. 1773-74, c. 16; 5 Prov.Laws, 323, 369; Story on the
Constitution (1st ed.) §§ 1301, 1302; (4th ed.) §§ 1306, 1307.
It was because of that condition of the law as between the American colonies and states that the
United States, at the very beginning of their existence as a nation, ordained that full faith and
credit should be given to the judgments of one of the states of the Union in the courts of another
of those states.
By the articles of confederation of 1777, Art. 4, § 3, "full faith and credit shall be given, in each of
these states, to the records, acts and judicial proceedings of the courts and magistrates of every
other state." 1 Stat. 4. By the Constitution of the United States, Article IV, § 1,
"Full faith and credit shall be given in each state to the public acts, records and judicial
proceedings of every other state, and the Congress may by general laws prescribe the manner
in which such acts, records and proceedings shall be proved, and the effect thereof."
And the first Congress of the United States under the Constitution, after prescribing the manner
in which the records and judicial proceedings of the courts of any state should be authenticated
and proved, enacted that
"the said records and judicial proceedings, authenticated as aforesaid, shall have
Page 159 U. S. 182
such faith and credit given to them in every court within the United States as they have by law or
usage in the courts of the state from whence the said records are or shall be taken."
Act May 26, 1790, c. 11, 1 Stat. 122; Rev.Stat. § 905.
The effect of these provisions of the Constitution and laws of the United States was at first a
subject of diverse opinions not only in the courts of the several states, but also in the circuit
courts of the United States; Mr. Justice Cushing, Mr. Justice Wilson, and Mr. Justice
Washington, holding that judgments of the courts of a state had the same effect throughout the
Union as within that state, but Chief Justice Marshall (if accurately reported) being of opinion that
they were not entitled to conclusive effect, and that their consideration might be
impeached. Armstrong v. Carson (1794), 2 Dall. 302; Green v. Sarmiento (1811), 3 Wash. C.C.
17, 21; Pet. C.C. 74, 78; Peck v. Williamson (reported as in November, 1813, apparently a
mistake for 1812), 1 Carolina Law Repository 53.
The decisions of this Court have clearly recognized that judgments of a foreign state are prima
facie evidence only, and that, but for these constitutional and legislative provisions, judgments of
a state of the Union, when sued upon in another state, would have no greater effect.
In Croudson v. Leonard (1808), in which this Court held that the sentence of a foreign court of
admiralty in rem condemning a vessel for breach of blockade was conclusive evidence of that
fact in an action on a policy of insurance, Mr. Justice Washington, after speaking of the
conclusiveness of domestic judgments generally, said:
"The judgment of a foreign court is equally conclusive, except in the single instance where the
party claiming the benefit of it applies to the courts in England to enforce it, in which case only
the judgment is prima facie evidence. But it is to be remarked that in such a case, the judgment
is no more conclusive as to the right it establishes than as to the fact it decides."
8 U. S. 4 Cranch 434, 8 U. S. 442.
In Mills v. Duryee (1813), in which it was established that, by virtue of the Constitution and laws
of the United States, the judgment of a court of one of the states was conclusive
Page 159 U. S. 183
In D'Arcy v. Ketchum (1850), in which this Court held that the provisions of the Constitution and
laws of the United States gave no effect in one state to judgments rendered in another state by a
court having no jurisdiction of the cause or of the parties, Mr. Justice Catron said:
"In construing the act of 1790, the law as it stood when the act was passed
Page 159 U. S. 184
must enter into that construction, so that the existing defect in the old law may be seen and its
remedy by the act of Congress comprehended. Now it was most reasonable, on general
principles of comity and justice, that among states and their citizens united as ours are,
judgments rendered in one should bind citizens of other states where defendants had been
served with process or voluntarily made defense. As these judgments, however, were only prima
facie evidence, and subject to be inquired into by plea when sued on in another state, Congress
saw proper to remedy the evil and to provide that such inquiry and double defense should not be
allowed. To this extent, it is declared in the case of Mills v. Duryee,Congress has gone in altering
the old rule."

evidence, in every court within the United States, of the matter adjudged, and therefore nul tiel
52 U. S. 11 How. 165, 52 U. S. 175-176.
record, and not nil debet,was a proper plea to an action brought in a court of the United States in
the District of Columbia upon a judgment recovered in a court of the State of New York, this
Court, speaking by Mr. Justice Story, said: In Christmas v. Russell (1866), in which this Court decided that because of the Constitution and
laws of the United States, a judgment of a court of one state of the Union, when sued upon in a
court of another, could not be shown to have been procured by fraud, Mr. Justice Clifford, in
"The pleadings in an action are governed by the dignity of the instrument on which it is founded.
delivering the opinion, after stating that under the rules of the common law a domestic judgment
If it be a record conclusive between the parties, it cannot be denied but by the plea of nul tiel
rendered in a court of competent jurisdiction could not be collaterally impeached or called in
record, and when Congress gave the effect of a record to the judgment it gave all the collateral
question, said:
consequences. . . . Were the construction contended for by the plaintiff in error to prevail, that
judgments of the state courts ought to be considered prima facie evidence only, this clause in
the Constitution would be utterly unimportant and illusory. The common law would give such "Common law rules placed foreign judgments upon a different footing, and those rules remain,
judgments precisely the same effect." as a general remark, unchanged to the present time. Under these rules, a foreign judgment
was prima facie evidence of the debt, and it was open to examination, not only to show that the
court in which it was rendered had no jurisdiction of the subject matter, but also to show that the
11 U. S. 7 Cranch 481, 11 U. S. 484-485.
judgment was fraudulently obtained."

In Hampton v. McConnell (1818), the point decided in Mills v. Duryee was again adjudged,
72 U. S. 5 Wall. 290, 72 U. S. 304.
without further discussion, in an opinion delivered by Chief Justice Marshall. 16 U. S. 3 Wheat.
234.
In Bischoff v. Wethered (1869), in an action on an English judgment rendered without notice to
the defendant other than by service on him in this country, this Court, speaking by Mr. Justice
The obiter dictum of Mr. Justice Livingston in Hopkins v. Lee (1821), 6 Wheat. 109, 19 U. S. 114,
Bradley, held that the proceeding in England
repeated by Mr. Justice Daniel in Pennington v. Gibson (1853), 16 How. 65, 57 U. S. 78, as to
the general effect of foreign judgments, has no important bearing upon the case before us.
"was wholly without jurisdiction of the person, and whatever validity it may have in England, by
virtue of statute law, against property of the defendant there situate, it can have no validity here,
In McElmoyle v. Cohen (1839), Mr. Justice Wayne, discussing the effect of the act of Congress
even of a prima facie character."
of 1790, said that

76 U. S. 9 Wall. 812, 76 U. S. 814.

"the adjudications of the English courts have now established the rule to be that foreign
judgments are prima facieevidence of the right and matter they purport to decide."
Page 159 U. S. 185
38 U. S. 13 Pet. 312, 38 U. S. 325.

50 | C o n f l i c t o f L a w s C a s e s
In Hanley v. Donoghue (1885), 116 U. S. 1, 116 U. S. 4, and in Wisconsin v. Pelican Ins.
Co. (1888), 127 U. S. 265, 127 U. S. 292, it was said that judgments recovered in one state of
the Union, when proved in the courts of another, differed from judgments recovered in a foreign
country in no other respect than in not being reexaminable on their merits nor impeachable for
fraud in obtaining them if rendered by a court having jurisdiction of the cause and of the parties.
But neither in those cases nor in any other has this Court hitherto been called upon to determine
how far foreign judgments may be reexamined upon their merits, or be impeached for fraud in
obtaining them.
In the courts of the several states it was long recognized and assumed as undoubted and
indisputable that by our law, as by the law of England, foreign judgments for debts were not
conclusive, but only prima facie evidence of the matter adjudged. Some of the cases are
collected in the margin. *
In the leading case of Bissell v. Briggs, above cited, Chief Justice Parsons said:
"A foreign judgment may be produced here by a party to it either to justify himself by the
execution of that judgment in the country in which it was rendered or to obtain the execution of it
from our courts. . . . If the foreign court rendering the judgment had jurisdiction of the cause, yet
the courts here will not execute the judgment, without first
Page 159 U. S. 186
allowing an inquiry into its merits. The judgment of a foreign court therefore is by our laws
considered only as presumptive evidence of a debt, or as prima facie evidence of a sufficient
consideration of a promise, where such court had jurisdiction of the cause, and if an action of
debt be sued on any such judgment, nil debet is the general issue, or if it be made the
consideration of a promise, the general issue is non assumpsit. On these issues the defendant
may impeach the justice of the judgment by evidence relative to that point. On these issues, the
defendant may also, by proper evidence, prove that the judgment was rendered by a foreign
court which had no jurisdiction, and if his evidence be sufficient for this purpose, he has no
occasion to impeach the justice of the judgment."
9 Mass. 463, 464.
In a less known case, decided in 1815 but not published until 1879, the reasons for this view
were forcibly stated by Chief Justice Jeremiah Smith, speaking for the Supreme Court of New
Hampshire, as follows:
"The respect which is due to judgments, sentences, and decrees of courts in a foreign state by
the law of nations seems to be the same which is due to those of our own courts. Hence, the
decree of an admiralty court abroad is equally conclusive with decrees of our admiralty courts.
Indeed, both courts proceed by the same rule, are governed by the same law -- the maritime law
of nations, Coll.Jurid. 100, which is the universal law of nations except where treaties alter it."
"The same comity is not extended to judgments or decrees which may be founded on the
municipal laws of the state in which they are pronounced. Independent states do not choose to
51 | C o n f l i c t o f L a w s C a s e s
adopt such decisions without examination. These laws and regulations may be unjust, partial to
citizens, and against foreigners. They may operate injustice to our citizens, whom we are bound
to protect. They may be, and the decisions of courts founded on them, just cause of complaint
against the supreme power of the state where rendered. To adopt them is not merely saying that
the courts have decided correctly on the law, but it is approbating the law itself. Wherever, then,
the court may have proceeded on municipal
Page 159 U. S. 187
law, the rule is that the judgments are not conclusive evidence of debt, but prima facie evidence
only. The proceedings have not the conclusive quality which is annexed to the records or
proceedings of our own courts, where we approve both of the rule and of the judges who
interpret and apply it. A foreign judgment may be impeached. Defendant may show that it is
unjust, or that it was irregularly or unduly obtained. Doug. 5, note."
Bryant v. Ela, Smith (N.H.) 396, 404.
From this review of the authorities, it clearly appears that at the time of the separation of this
country from England, the general rule was fully established that foreign judgments in
personam were prima facie evidence only, and not conclusive of the merits of the controversy
between the parties. But the extent and limits of the application of that rule do not appear to
have been much discussed or defined with any approach to exactness in England or America
until the matter was taken up by Chancellor Kent and by Mr. Justice Story.
In Taylor v. Bryden (1811), an action of assumpsit brought in the Supreme Court of the State of
New York on a judgment obtained in the State of Maryland against the defendant as endorser of
a bill of exchange, and which was treated as a foreign judgment, so far as concerned its effect in
New York (the decision of this Court to the contrary in Mills v. Duryee, 7 Cranch 481, not having
yet been made), Chief Justice Kent said:
"The judgment in Maryland is presumptive evidence of a just demand, and it was incumbent
upon the defendant, if he would obstruct the execution of the judgment here, to show by positive
proof that it was irregularly or unduly obtained. . . . To try over again, as of course, every matter
of fact which had been duly decided by a competent tribunal would be disregarding the comity
which we justly owe to the courts of other states, and would be carrying the doctrine of
reexamination to an oppressive extent. It would be the same as granting a new trial in every
case and upon every question of fact. Suppose a recovery in another state, or in any foreign
court, in an action for a
Page 159 U. S. 188
tort, as for an assault and battery, false imprisonment, slander, etc., and the defendant was duly
summoned and appeared, and made his defense, and the trial was conducted orderly and
properly, according to the rules of a civilized jurisprudence, is every such case to be tried again
here on the merits? I much doubt whether the rule can ever go to this length. The general
language of the books is that the defendant must impeach the judgment by showing affirmatively
that it was unjust by being irregularly or unfairly procured."
But the case was decided upon the ground that the defendant had done no more than raise a
doubt of the correctness of the judgment sued on. 8 Johns. 173, 177, 178.
Chancellor Kent afterwards, treating of the same subject in the first edition of his Commentaries
(1827), put the right to impeach a foreign judgment somewhat more broadly, saying:
"No sovereign is obliged to execute within his dominion a sentence rendered out of it, and if
execution be sought by a suit upon the judgment or otherwise, he is at liberty, in his courts of
justice, to examine into the merits of such judgment [for the effect to be given to foreign
judgments is altogether a matter of comity in cases where it is not regulated by treaty]. In the
former case [of a suit to enforce a foreign judgment], the rule is that the foreign judgment is to be
received in the first instance as prima facie evidence of the debt, and it lies on the defendant to
impeach the justice of it or to show that it was irregularly and unduly obtained. This was the
principle declared and settled by the House of Lords in 1771 in the case of Sinclair v.
Fraser upon an appeal from the Court of Cession in Scotland."
In the second edition (1832), he inserted the passages above printed in brackets, and in a note
to the fourth edition (1840), after citing recent conflicting opinions in Great Britain, and referring
to Mr. Justice Story's reasoning in his Commentaries on the Conflict of Laws, § 607, in favor of
the conclusiveness of foreign judgments, he added:
"And that is certainly the more convenient and the safest rule, and the most consistent with
sound principle, except in cases in which the court which pronounced the judgment has not due
jurisdiction of the case, or of the
Page 159 U. S. 189
defendant, or the proceeding was in fraud, or founded in palpable mistake or irregularity, or bad
by the law of the rei judicatae, and in all such cases, the justice of the judgment ought to be
impeached."
2 Kent Com. (1st ed.) 102; (later Eds.) 120.
Mr. Justice Story, in his Commentaries on the Conflict of Laws, first published in 1834, after
reviewing many English authorities, said: "The present inclination of the English courts seems to
be to sustain the conclusiveness of foreign judgments," to which, in the second edition, in 1841,
he added: "Although certainly there yet remains no inconsiderable diversity of opinion among the
learned judges of the different tribunals." § 606.
He then proceeded to state his own view of the subject on principle, saying:
"It is indeed very difficult to perceive what could be done if a different doctrine were maintainable
to the full extent of opening all the evidence and merits of the cause anew on a suit upon the
foreign judgment. Some of the witnesses may be since dead; some of the vouchers may be lost
or destroyed. The merits of the cause, as formerly before the court upon the whole evidence,
may have been decidedly in favor of the judgment; upon a partial possession of the original
evidence, they may now appear otherwise. Suppose a case purely sounding in damages, such
as an action for an assault, for slander, for conversion of property, for a malicious prosecution, or
52 | C o n f l i c t o f L a w s C a s e s
for a criminal conversation; is the defendant to be at liberty to retry the whole merits, and to
make out, if he can, a new case upon new evidence? Or is the court to review the former
decision, like a Court of Appeal, upon the old evidence? In a case of covenant, or of debt, or of a
breach of contract, are all the circumstances to be reexamined anew? If they are, by what laws
and rules of evidence and principles of justice is the validity of the original judgment to be tried?
Is the court to open the judgment, and to proceed ex aequo et bono? Or is it to administer strict
law, and stand to the doctrines of the local administration of justice? Is it to act upon the rules of
evidence acknowledged in its own jurisprudence, or upon those of the foreign jurisprudence?
These and many more questions might be put to
Page 159 U. S. 190
show the intrinsic difficulties of the subject. Indeed, the rule that the judgment is to be prima
facie evidence for the plain tiff would be a mere delusion if the defendant might still question it by
opening all or any of the original merits on his side, for under such circumstances it would be
equivalent to granting a new trial. It is easy to understand that the defendant may be at liberty to
impeach the original justice of the judgment by showing that the court had no jurisdiction, or that
he never had any notice of the suit, or that it was procured by fraud, or that upon its face it is
founded in mistake, or that it is irregular and bad by the local law, fori rei judicatae. To such an
extent, the doctrine is intelligible and practicable. Beyond this, the right to impugn the judgment
is in legal effect the right to retry the merits of the original cause at large, and to put the
defendant upon proving those merits."
§ 607.
He then observed:
"The general doctrine maintained in the American courts in relation to foreign judgments
certainly is that they are prima facie evidence, but that they are impeachable. But how far and to
what extent this doctrine is to be carried does not seem to be definitely settled. It has been
declared that the jurisdiction of the court, and its power over the parties and the things in
controversy, may be inquired into, and that the judgment may be impeached for fraud. Beyond
this, no definite lines have as yet been drawn."
§ 608.
After stating the effect of the Constitution of the United States and referring to the opinions of
some foreign jurists, and to the law of France, which allows the merits of foreign judgments to be
examined, Mr. Justice Story concluded his treatment of the subject as follows:
"It is difficult to ascertain what the prevailing rule is in regard to foreign judgments in some of the
other nations of continental Europe -- whether they are deemed conclusive evidence or
only prima facie evidence. Holland seems at all times, upon the general principle of reciprocity,
to have given great weight to foreign judgments and in many cases, if not in all cases, to have
given to them a weight equal to that given to domestic judgments, wherever the like rule of
reciprocity with regard to Dutch
Page 159 U. S. 191
judgments has been adopted by the foreign country whose judgment is brought under review.
This is certainly a very reasonable rule, and may perhaps hereafter work itself firmly into the
structure of international jurisprudence."
§ 618.
or assented to it voluntarily or not, so as to give it in some degree the force of a contract, and
hence to be respected elsewhere by analogy according to the lex loci contractus. With these
views I would go to the whole extent of the cases decided by Lords Mansfield and Buller, and
where the foreign judgment is not in rem, as it is in admiralty, having the subject matter before
the court, and acting on that, rather than the parties, I would consider it only prima
facie evidence as between the parties to it."

In Bradstreet v. Neptune Ins. Co. (1839), in the Circuit Court of the United States for the District
P. 175.
of Massachusetts, Mr. Justice Story said:

"By returning to that rule, we are enabled to give parties at times most needed and most
"If a civilized nation seeks to have the sentences of its own courts held of any validity elsewhere,
substantial relief, such as in judgments abroad against them without notice, or without a hearing
they ought to have a just regard to the rights and usages of other civilized nations and the
on the merits, or by accident or mistake of facts, as here, or on rules of evidence and rules of
principles of public and national law in the administration of justice."
law they never assented to, being foreigners and their contracts made elsewhere but happening
to be traveling through a foreign jurisdiction and being compelled in invitum to litigate there."
3 Sumnner 600, 608-609.
P. 177.
In Burnham v. Webster (1845), in an action of assumpsit upon a promissory note, brought in the
Circuit Court of the United States for the District of Maine, the defendant pleaded a former
"Nor would I permit the prima facie force of the foreign judgment to go far if the court was one of
judgment in the Province of New Brunswick in his favor in an action there brought by the plaintiff.
a barbarous or semi-barbarous government, and acting on no established principles of civilized
The plaintiff replied that the note was withdrawn from that suit, by consent of parties and leave of
jurisprudence, and not resorted to willingly by both parties, or both not inhabitants and citizens of
the court, before verdict and judgment, and the defendant demurred to the replication. Judge
the country. Nor can much comity be asked for the judgments of another nation which, like
Ware, in overruling the demurrer, said:
France, pays no respect to those of other countries except, as before remarked, on the principle
of the parties belonging there or assenting to a trial there."
"Whatever difference of opinion there may be as to the binding force of foreign judgments, all
agree that they are not entitled to the same authority as the judgments of domestic courts of
P. 179.
general jurisdiction. They are but evidence of what they purport to decide, and liable to be
controlled by counter evidence, and do not, like domestic judgments, import absolute verity and
remain incontrovertible and conclusive until reversed." Page 159 U. S. 193

And he added that if the question stood entirely clear from authority, he should be of opinion that
the plaintiff could not be allowed to deny the validity of the proceedings of a court whose
authority he had invoked. 2 Ware, 236, 239-241.
At a subsequent trial of that case before a jury, (1846) 1 Woodb. & Min. 172, the defendant
proved the judgment in New Brunswick. The plaintiff then offered to prove the facts stated in his
replication, and that any entry on the record of the judgment in New Brunswick concerning this
note was therefore by mistake or inadventure. This evidence was
Page 159 U. S. 192
excluded, and a verdict taken for the plaintiff, subject to the opinion of the court. Mr. Justice
Woodbury, in granting a new trial, delivered a thoughtful and discriminating opinion upon the
effect of foreign judgments, from which the following passages are taken:
"On the other hand, by considering a judgment abroad as only prima facie valid, I would not
allow the plaintiff abroad, who had sought it there, to avoid it, unless for accident or mistake, as
here, because, in other respects, having been sought there by him voluntarily, it does not lie in
his mouth to complain of it. Nor would I in any case permit the whole merits of the judgment
recovered abroad to be put in evidence as a matter of course, but, being prima facie correct, the
party impugning it, and desiring a hearing of its merits, must show first, specifically, some
objection to the judgment's reaching the merits, and tending to prove they had not been acted
on, or [as?] by showing there was no jurisdiction in the court, or no notice, or some accident or
mistake, or fraud which prevented a full defense, and has entered into the judgment, or that the
court either did not decide at all on the merits or was a tribunal not acting in conformity to any set
of legal principles, and was not willingly recognized by the party as suitable for adjudicating on
the merits. After matters like these are proved, I can see no danger, but rather great safety, in
the administration of justice in permitting to every party before us at least one fair opportunity to
have the merits of his case fully considered, and one fair adjudication upon them before he is
estopped forever."

P. 180.
"They do, like domestic ones, operate conclusively, ex proprio vigore, within the governments in
which they are rendered, but not elsewhere. When offered and considered elsewhere, they
are, ex commitate, treated with respect, according to the nature of the judgment and the In De Brimont v. Penniman (1873), in the Circuit Court of the United States for the Southern
character of the tribunal which rendered it and the reciprocal mode, if any, in which that District of New York, Judge Woodruff said:
government treats our judgments, and according to the party offering it, whether having sought

53 | C o n f l i c t o f L a w s C a s e s
"The principle on which foreign judgments receive any recognition from our courts is one of
comity. It does not require, but rather forbids, it where such a recognition works a direct violation
of the policy of our laws, and does violence to what we deem the rights of our citizens."
And he declined to maintain an action against a citizen of the United States, whose daughter
had been married in France to a French citizen, upon a decree of a French court requiring the
defendant, then resident in France and duly served with process there, to pay an annuity to his
son-in-law. 10 Blatchford 436, 441.
Mr. Justice Story and Chancellor Kent, as appears by the passages above quoted from their
Commentaries, concurred in
Page 159 U. S. 194
the opinion that, in a suit upon a foreign judgment, the whole merits of the case could not as
matter of course be reexamined anew, but that the defendant was at liberty to impeach the
judgment not only by showing that the court had no jurisdiction of the case or of the defendant,
but also by showing that it was procured by fraud, or was founded on clear mistake or
irregularity, or was bad by the law of the place where it was rendered. Story on Conflict of Laws
§ 607; 2 Kent Com. (6th ed.) 120.
The word "mistake" was evidently used by Story and Kent in this connection not in its wider
meaning of error in judgment, whether upon the law or upon the facts, but in the stricter sense of
misapprehension or oversight, and as equivalent to what, in Burnham v. Webster, before cited,
Mr. Justice Woodbury spoke of as "some objection to the judgment's reaching the merits, and
tending to prove that they had not been acted on," "some accident or mistake," or "that the court
did not decide at all on the merits." 1 Woodb. & Min. 180.
The suggestion that a foreign judgment might be impeached for error in law of the country in
which it was rendered is hardly consistent with the statement of Chief Justice Marshall, when,
speaking of the disposition of this Court to adopt the construction given to the laws of a state by
its own courts, he said:
"This course is founded on the principle, supposed to be universally recognized, that the judicial
department of every government, where such department exists, is the appropriate organ for
construing the legislative acts of that government. Thus, no court in the universe which
professed to be governed by principle would, we presume, undertake to say that the courts of
Great Britain or of France or of any other nation had misunderstood their own statutes, and
therefore erect itself into a tribunal which should correct such misunderstanding. We receive the
construction given by the courts of the nation as the true sense of the law, and feel ourselves no
more at liberty to depart from that construction than to depart from the words of the statute."
Elmendorf v. Taylor (1825), 10 Wheat. 152, 23 U. S. 159-160.
In recent times, foreign judgments rendered within the dominions
Page 159 U. S. 195
54 | C o n f l i c t o f L a w s C a s e s
of the English Crown and under the law of England, after a trial on the merits, and no want of
jurisdiction and no fraud or mistake being shown or offered to be shown, have been treated as
conclusive by the highest courts of New York, Maine, and Illinois. Lazier v. Westcott (1862), 26
N.Y. 146, 150; Dunstan v. Higgins (1893), 138 N.Y. 70, 74; Rankin v. Goddard (1866), 54 Me.
28, and (1868) 55 Me. 389; Baker v. Palmer (1876), 83 Ill. 568. In two early cases in Ohio, it was
said that foreign judgments were conclusive unless shown to have been obtained by fraud. Lake
Bank v. Harding (1832), 5 Ohio 545, 547; Anderson v. Anderson (1837), 8 Ohio 108, 110. But in
a later case in that state, it was said that they were only prima facieevidence of
indebtedness. Pelton v. Platner (1844), 13 Ohio, 209, 217. In Jones v. Jamison (1860), 15
La.Ann. 35, the decision was only that, by virtue of the statutes of Louisiana, a foreign judgment
merged the original cause of action as against the plaintiff.
The result of the modern decisions in England, after much diversity, not to say vacillation, of
opinion does not greatly differ (so far as concerns the aspects in which the English courts have
been called upon to consider the subject) from the conclusions of Chancellor Kent and of
Justices Story and Woodbury.
At one time it was held that, in an action brought in England upon a judgment obtained by the
plaintiff in a foreign country, the judgment must be assumed to be according to the law of that
country unless the contrary was clearly proved, manifestly implying that proof on that point was
competent. Becquet v. MacCarthy (1831), 2 B. & Ad. 951, 957; Alivon v. Furnival (1834), 1 Cr.,
M. & R. 277, 293, 4 Tyrwh. 751, 768.
Lord Brougham, in the House of Lords, as well as Chief Justice Tindal and Chief Justice Wilde
(afterwards Lord Chancellor Truro) and their associates, in the Common Bench, considered it to
be well settled that an Irish or colonial judgment or a foreign judgment was not, like a judgment
of a domestic court of record, conclusive evidence, but only, like a
Page 159 U. S. 196
simple contract, prima facie evidence of a debt. Houlditch v. Donegal (1834), 8 Bligh N.R. 301,
342, 346, 2 Cl. & Fin. 470, 476-479; Don v. Lippmann (1837), 5 Cl. & Fin. 1, 20-22; Smith v.
Nicolls (1839), 7 Scott 147, 166-170, 5 Bing.N.C. 208, 220-224, 7 Dowl. 282; Bank of
Australasia v. Harding (1850), 9 C.B. 661, 686-687.
On the other hand, Vice Chancellor Shadwell, upon an imperfect review of the early cases,
expressed the opinion that a foreign judgment was conclusive. Martin v. Nicolls (1830), 3 Sim.
458.
Like opinions were expressed by Lord Denman, speaking for the Court of Queen's Bench, and
by Vice Chancellor Wigram, in cases of Irish or colonial judgments, which were subject to direct
appellate review in England. Ferguson v. Mahon (1839), 11 Ad. & El. 179, 183, 3 Per. & Dav.
143, 146; Henderson v. Henderson (1844), 6 Q.B. 288, 298, 299; Henderson v.
Henderson(1843), 3 Hare 100, 118.
In Bank v. Nias (1851), in an action upon an Australian judgment, pleas that the original
promises were not made, and that those promises, if made, were obtained by fraud, were held
bad on demurrer. Lord Campbell, in delivering judgment, referred to Story on the Conflict of
Laws, and adopted substantially his course of reasoning in § 607, above quoted, with regard to
foreign judgments. But he distinctly put the decision upon the ground that the defendant might
have appealed to the Judicial Committee of the Privy Council, and thus have procured a review
of the colonial judgment, and he took the precaution to say:
"How far it would be permitted to a defendant to impeach the competency or the integrity of a
foreign court from which there was no appeal it is unnecessary here to inquire."
16 Q.B. 717, 734-737.
The English courts, however, have since treated that decision as establishing that a judgment of
any competent foreign court could not, in an action upon it, be questioned either because that
court had mistaken its own law or because it had come to an erroneous conclusion upon the
facts. De Cosse Brissac v. Rathbone (1861) 6 H. & N. 301; Scott v. Pilkington
Page 159 U. S. 197
(1862) 2 B. & S. 11, 41-42; Vanquelin v. Bouard (1863), 15 C.B. (N.S.) 341, 368; Castrique v.
Imrie (1870), L.R. 4 H.L. 414, 429-430; Godard v. Gray (1870), L.R. 6 Q.B. 139,
150; Ochsenbein v. Papelier (1873), 8 Ch.App. 695, 701. In Meyer v. Ralli (1876), a judgment in
rem, rendered by a French court of competent jurisdiction, was held to be reexaminable upon
the merits solely because it was admitted by the parties, in the special case upon which the
cause was submitted to the English court, to be manifestly erroneous in regard to the law of
France. 1 C.P.D. 358.
In view of the recent decisions in England, it is somewhat remarkable that, by the Indian Code of
Civil Procedure of 1877,
"no foreign judgment [which is defined as a judgment of 'a civil tribunal beyond the limits of
British India, and not having authority in British India, nor established by the governor general in
council'] shall operate as a bar to a suit in British India, . . . if it appears on the face of the
proceeding to be founded on an incorrect view of international law,"
or "if it is, in the opinion of the court before which it is produced, contrary to natural justice."
Piggott on Foreign Judgments (2d ed.) 380, 381.
It was formerly understood in England that a foreign judgment was not conclusive if it appeared
upon its face to be founded on a mistake or disregard of English law. Arnott v. Redfern (1825-
1826) 2 Car. & P. 88, 3 Bing. 353, and 11 J. B. Moore 209; Novelli v. Rossi (1831) 2 B. & Ad.
757; 3 Burge on Colonial and Foreign Laws 1065; 2 Smith's Lead.Cas. (2d ed.) 448; Reimers v.
Druce (1856), 23 Beavan 145.
In Simpson v. Fogo (1860), 1 Johns. & Hem. 18, and (1862) 1 Hem. & Mil. 195, Vice Chancellor
Wood (afterwards Lord Hatherley) refused to give effect to a judgment in personam of a court in
Louisiana, which had declined to recognize the title of a mortgagee of an English ship under the
English law. In delivering judgment upon demurrer, he said:
55 | C o n f l i c t o f L a w s C a s e s
"The State of Louisiana may deal as it pleases with foreign law; but if it asks courts of this
country to respect its law, it must be on a footing of paying a like respect to ours. Any comity
between the courts of two nations holding such
Page 159 U. S. 198
opposite doctrines as to the authority of the lex loci is impossible. While the courts of Louisiana
refuse to recognize a title acquired here, which is valid according to our law, and hand over to
their own citizens property so acquired, they cannot at the same time expect us to defer to a rule
of their law which we are no more bound to respect than a law that any title of foreigners should
be disregarded in favor of citizens of Louisiana. The answer to such a demand must be that a
country which pays so little regard to our laws as to set aside a paramount title acquired here
must not expect at our hands any greater regard for the title so acquired by the citizens of that
country."
1 Johns. & Hem. 28, 29. And upon motion for a decree, he elaborated the same view, beginning
by saying:
"Whether this judgment does so err or not against the recognized principles of what has been
commonly called the comity of nations by refusing to regard the law of the country where the title
to the ship was acquired is one of the points which I have to consider,"
and concluding that it was "so contrary to law, and to what is required by the comity of nations"
that he must disregard it. 1 Hem. & Mil. 222-247. See also Liverpool Co. v. Hunter (1867), L.R. 4
Eq. 62, 68, and (1868) L.R. 3 Ch. 479, 484.
In Scott v. Pilkington (1862), Chief Justice Cockburn treated it as an open question whether a
judgment recovered in New York for a debt could be impeached on the ground that the record
showed that the foreign court ought to have decided the case according to English law, and had
either disregarded the comity of nations by refusing to apply the English law or erred in its view
of English law. 2 B. & S. 11, 42. In Castrique v. Imrie (1870), the French judgment which was
adjudged not to be impeachable for error in law, French or English, was, as the House of Lords
construed it, a judgment in rem, under which the ship to which the plaintiff in England claimed
title had been sold. L.R. 4 H.L. 414. In Godard v. Gray (1870), shortly afterwards, in which the
court of Queen's Bench held that a judgment in personam of a French court could not be
impeached because it had put
Page 159 U. S. 199
a construction erroneous, according to English law, upon an English contract, the decision was
put by Justices Blackburn and Mellor upon the ground that it did not appear that the foreign court
had "knowingly and perversely disregarded the rights given by the English law," and by Justice
Hannen solely upon the ground that the defendant did not appear to have brought the English
law to the knowledge of the foreign court. L.R. 6 Q.B. 139, 149, 154. In Messina v.
Petrococchino (1872), Sir Robert Phillimore, delivering judgment in the Privy Council, said: "A
foreign judgment of a competent court may, indeed, be impeached if it carries on the face of it a
manifest error." L.R. 4 P.C. 144, 157.
The result of the English decisions therefore would seem to be that a foreign judgment in
personam may be impeached for a manifest and willful disregard of the law of England.
Lord Abinger, Baron Parke, and Baron Alderson were wont to say that the judgment of a foreign
court of competent jurisdiction for a sum certain created a duty or legal obligation to pay that
sum; or, in Baron Parke's words, that the principle on which the judgments of foreign and
colonial courts are supported and enforced was
"that where a court of competent jurisdiction has adjudicated a certain sum to be due from one
person to another, a legal obligation arises to pay that sum, on which an action of debt to
enforce the judgment may be maintained."
Russell v. Smyth (1842), 9 M. & W. 810, 818-819; Williams v. Jones (1845), 13 M. & W. 628,
633, 634.
But this was said in explaining why, by the technical rules of pleading, an action of assumpsit or
of debt would lie upon a foreign judgment, and had no reference to the question how far such a
judgment was conclusive of the matter adjudged. At common law, an action of debt would lie on
a debt appearing by a record or by any other specialty, such as a contract under seal, and would
also lie for a definite sum of money due by simple contract. Assumpsit would not lie upon a
record or other specialty, but would lie upon any other contract, whether expressed by the party
or implied by law. In an action upon a record, or upon a contract under seal, a lawful
consideration was conclusively presumed to exist, and could not be denied,
Page 159 U. S. 200
but in an action, whether in debt or in assumpsit, upon a simple contract, express or implied, the
consideration was open to inquiry. A foreign judgment was not considered, like a judgment of a
domestic court of record, as a record or specialty. The form of action, therefore, upon a foreign
judgment was not in debt, grounded upon a record or a specialty, but was either in debt, as for a
definite sum of money due by simple contract, or in assumpsit upon such a contract. A foreign
judgment, being a security of no higher nature than the original cause of action, did not merge
that cause of action. The plaintiff might sue either on the judgment or on the original cause of
action, and in either form of suit the foreign judgment was only evidence of a liability equivalent
to a simple contract, and was therefore liable to be controlled by such competent evidence as
the nature of the case admitted. See cases already cited, especially Walker v. Witter, 1 Doug.
1; Phillips v. Hunter, 2 H.Bl. 402, 410; Bissell v. Briggs, 9 Mass. 463, 464; Mills v. Duryee, 7
Cranch 481, 11 U. S. 485; D'Arcy v. Ketchum, 11 How. 165, 52 U. S. 176; Hall v. Odber, 11 East
118; Smith v. Nicolls, 7 Scott 147, 5 Bing. N.C. 208. See also Grant v. Easton, 13 Q.B.D. 302,
303; Lyman v. Brown, 2 Curtis 559.
Mr. Justice Blackburn, indeed, in determining how far a foreign judgment could be impeached
either for error in law or for want of jurisdiction, expressed the opinion that the effect of such a
judgment did not depend upon what he termed "that which is loosely called comity,'" but upon
the saying of Baron Parke, above quoted, and consequently
"that anything which negatives the existence of that legal obligation or excuses the defendant
from the performance of it must form a good defense to the action."
56 | C o n f l i c t o f L a w s C a s e s
Godard v. Gray (1870), L.R. 6 Q.B. 139, 148-149; Schibsby v. Westenholz, 6 Q.B. 155, 159. And
his example has been followed by some other English judges: Fry, J., in Rousillon v.
Rousillon (1880), 14 Ch.D. 351, 370; North, J., in Nouvion v. Freeman(1887), 35 Ch.D. 704,
714-715; Cotton and Lindley, L. JJ., in Nouvion v. Freeman (1887), 37 Ch.D. 244, 250, 256.
Page 159 U. S. 201
But the theory that a foreign judgment imposes or creates a duty or obligation is a remnant of the
ancient fiction, assumed by Blackstone, saying that
"upon showing the judgment once obtained still in full force and yet unsatisfied, the law
immediately implies that, by the original contract of society, the defendant hath contracted a debt
and is bound to pay it."
3 Bl.Com. 160. That fiction which embraced judgments upon default or for torts cannot convert a
transaction wanting the assent of parties into one which necessarily implies it. Louisiana v. New
Orleans, 109 U. S. 285, 109 U. S. 288. While the theory in question may help to explain rules of
pleading which originated while the fiction was believed in, it is hardly a sufficient guide at the
present day in dealing with questions of international law, public or private, and of the comity of
our own country, and of foreign nations. It might be safer to adopt the maxim applied to foreign
judgments by Chief Justice Weston, speaking for the Supreme Judicial Court of Maine, judicium
redditur in invitum, or, as given by Lord Coke, in praesumptione legis judicium redditur in
invitum. Jordan v. Robinson (1838), 15 Me. 167, 168; Co.Litt. 248b.
In Russell v. Smyth, above cited, Baron Parke took the precaution of adding: "Nor need we say
how far the judgment of a court of competent jurisdiction, in the absence of fraud, is conclusive
upon the parties." 9 M. & W. 819. He could hardly have contemplated erecting a rule of local
procedure into a canon of private international law, and a substitute for "the comity of nations,"
on which, in an earlier case, he had himself relied as the ground for enforcing in England a right
created by a law of a foreign country. Alivon v. Furnival, 1 Cr., M. & R. 277, 296, 4 Tyrwh. 751,
771.
In Abouloff v. Oppenheimer (1882), Lord Coleridge and Lord Justice Brett carefully avoided
adopting the theory of a legal obligation to pay a foreign judgment as the test in determining how
far such a judgment might be impeached. 10 Q.B.D. 295, 300, 305. In Hawksford v.
Giffard (1886), in the Privy Council, on appeal from the Royal Court of Jersey, Lord Herschell
said:
"This action is brought upon an English judgment which, until a judgment was obtained in
Jersey, was in
Page 159 U. S. 202
that country no more than evidence of a debt."
12 App.Cas. 122, 126. In Nouvion v. Freeman (1889), in the House of Lords, Lord Herschell,
while he referred to the reliance placed by counsel on the saying of Baron Parke, did not treat a
foreign judgment as creating or imposing a new obligation, but only as declaring and
establishing that a debt or obligation existed. His words were:
"The principle upon which I think our enforcement of foreign judgments must proceed is this, that
in a court of competent jurisdiction, where according to its established procedure, the whole
merits of the case were open at all events, to the parties, however much they may have failed to
take advantage of them, or may have waived any of their rights, a final adjudication has been
given that a debt or obligation exists which cannot thereafter in that court be disputed, and can
only be questioned in an appeal to a higher tribunal. In such a case, it may well be said that,
giving credit to the courts of another country, we are prepared to take the fact that such
adjudication has been made as establishing the existence of the debt or obligation."
And Lord Bramwell said:
"How can it be said that there is a legal obligation on the part of a man to pay a debt who has a
right to say, 'I owe none, and no judgment has established against me that I do?' I cannot see."
The foreign judgment in that case was allowed no force, for want of finally establishing the
existence of a debt. 15 App.Cas. 1, 9-10, 14.
In view of all the authorities upon the subject and of the trend of judicial opinion in this country
and in England, following the lead of Kent and Story, we are satisfied that where there has been
opportunity for a full and fair trial abroad before a court of competent jurisdiction, conducting the
trial upon regular proceedings, after due citation or voluntary appearance of the defendant and
under a system of jurisprudence likely to secure an impartial administration of justice between
the citizens of its own country and those of other countries, and there is nothing to show either
prejudice in the court or in the system of laws under which it was sitting, or fraud in procuring the
judgment, or any other special reason why the comity of this nation should not allow it full effect,
Page 159 U. S. 203
the merits of the case should not, in an action brought in this country upon the judgment, be tried
afresh, as on a new trial or an appeal, upon the mere assertion of the party that the judgment
was erroneous in law or in fact. The defendants therefore cannot be permitted upon that general
ground to contest the validity or the effect of the judgment sued on.
But they have sought to impeach that judgment upon several other grounds which require
separate consideration.
It is objected that the appearance and litigation of the defendants in the French tribunals were
not voluntary, but by legal compulsion, and therefore that the French courts never acquired such
jurisdiction over the defendants that they should be held bound by the judgment.
Upon the question what should be considered such a voluntary appearance as to amount to a
submission to the jurisdiction of a foreign court, there has been some difference of opinion in
England.
57 | C o n f l i c t o f L a w s C a s e s
In General Steam Navigation Co. v. Guillou (1843), in an action at law to recover damages to the
plaintiffs' ship by a collision with the defendant's ship through the negligence of the master and
crew of the latter, the defendant pleaded a judgment by which a French court, in a suit brought
by him and after the plaintiffs had been cited, had appeared, and had asserted fault on this
defendant's part, had adjudged that it was the ship of these plaintiffs, and not that of this
defendant, which was in fault. It was not shown or suggested that the ship of these plaintiffs was
in the custody or possession of the French court. Yet Baron Parke, delivering a considered
judgment of the Court of Exchequer (Lord Abinger and Barons Alderson and Rolfe concurring),
expressed a decided opinion that the pleas were bad in substance, for these reasons:
"They do not state that the plaintiffs were French subjects, or resident or even present in France,
when the suit began, so as to be bound, by reason of allegiance or domicile or temporary
presence, by a decision of a French court, and they did not select the tribunal and sue as
plaintiffs, in any of which cases the determination might have possibly bound them. They were
mere strangers, who put forward the negligence
Page 159 U. S. 204
of the defendant as an answer, in an adverse suit in a foreign country, whose laws they were
under no obligation to obey."
11 M. & W. 877, 894, 13 Law Journal (N.S.) Exch. 168, 176.
But it is now settled in England that while an appearance by the defendant in a court of a foreign
country, for the purpose of protecting his property already in the possession of that court, may
not be deemed a voluntary appearance, yet an appearance solely for the purpose of protecting
other property in that country from seizure is considered as a voluntary appearance. De Cosse
Brissac v. Rathbone (1861), 6 H. & N. 301, 20 Law Journal (N.S.) Exch. 238; Schibsby v.
Westenholz(1870), L.R. 6 Q.B. 155, 162; Voinet v. Barrett (1885), Cab. & El. 554, 54 Law
Journal (N.S.) Q.B. 521, and 55 Law Journal (N.S.) Q.B. 39.
The present case is not one of a person traveling through or casually found in a foreign country.
The defendants, although they were not citizens or residents of France, but were citizens and
residents of the State of New York, and their principal place of business was in the City of New
York, yet had a storehouse and an agent in Paris, and were accustomed to purchase large
quantities of goods there, although they did not make sales in France. Under such
circumstances, evidence that their sole object in appearing and carrying on the litigation in the
French courts was to prevent property in their storehouse at Paris, belonging to them, and within
the jurisdiction, but not in the custody, of those courts from being taken in satisfaction of any
judgment that might be recovered against them would not, according to our law, show that those
courts did not acquire jurisdiction of the persons of the defendants.
It is next objected that in those courts, one of the plaintiffs was permitted to testify not under
oath, and was not subjected to cross-examination by the opposite party, and that the defendants
were therefore deprived of safeguards which are by our law considered essential to secure
honesty and to detect fraud in a witness, and also that documents and papers were admitted in
evidence with which the defendants had no connection
Page 159 U. S. 205
and which would not be admissible under our own system of jurisprudence. But it having been
shown by the plaintiffs, and hardly denied by the defendants, that the practice followed and the
method of examining witnesses were according to the laws of France, we are not prepared to
hold that the fact that the procedure in these respects differed from that of our own courts is, of
itself, a sufficient ground for impeaching the foreign judgment.
It is also contended that a part of the plaintiffs' claim is affected by one of the contracts between
the parties having been made in violation of the revenue laws of the United States, requiring
goods to be invoiced at their actual market value. Rev.Stat. § 2854. It may be assumed that, as
the courts of a country will not enforce contracts made abroad in evasion or fraud of its own
laws, so they will not enforce a foreign judgment upon such a contract. Armstrong v. Toler, 11
Wheat. 258; De Brimont v. Penniman, 10 Blatchford 436; Lang v. Holbrook, Crabbe 179; Story
on Conflict of Laws §§ 244, 246; Wharton's Conflict of Laws, § 656. But as this point does not
affect the whole claim in this case, it is sufficient for present purposes to say that there does not
appear to have been any distinct offer to prove that the invoice value of any of the goods sold by
the plaintiffs to the defendants was agreed between them to be or was in fact lower than the
actual market value of the goods.
It must however always be kept in mind that it is the paramount duty of the court before which
any suit is brought to see to it that the parties have had a fair and impartial trial before a final
decision is rendered against either party.
"But if it was a direct and decisive sentence upon the point, and, as it stands, to be admitted as
conclusive evidence upon the court, and not to be impeached from within, yet, like all other acts
of the highest judicial authority, it is impeachable from without. Although it is not permitted to
show that the court was mistaken, it may be shown that they were misled. Fraud is an intrinsic
collateral act, which vitiates the most solemn proceedings of courts of justice. Lord Coke says it
avoids all judicial acts, ecclesiastical or temporal."
20 Howell's State Trials 537, 543, note; 2 Smith's Lead.Cas. 573.
All the subsequent English authorities concur in holding that any foreign judgment, whether in
rem or in personam, may be impeached upon the ground that it was fraudulently obtained. White
v. Hall (1806), 12 Ves. 321, 324; Bowles v. Orr(1835), 1 Yo. & Col.Exch. 464, 473; Price v.
Dewhurst (1837) 8 Sim. 279, 302-305; Don v. Lippmann (1837), 5 Cl &
Page 159 U. S. 207
Fin. 1, 20; Bank of Australasia v. Nias (1851), 16 Q.B. 717, 735; Reimers v. Druce (1856), 23
Beav. 145, 150; Castrique v. Imrie(1870), L.R. 4 H.L. 414, 445-446; Godard v. Gray (1870), L.R.
6 Q.B. 139, 149; Messina v. Petrococchino (1872), L.R. 4 P.C. 144, 157; Ochsenbein v.
Papelier (1873), 8 Ch. 695.

When an action is brought in a court of this country by a citizen of a foreign country against one
of our own citizens to recover a sum of money adjudged by a court of that country to be due
from the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a
competent court, having jurisdiction of the cause and of the parties, and upon due allegations
and proofs and opportunity to defend against them, and its proceedings are according to the
course of a civilized jurisprudence, and are stated in a clear and formal
Page 159 U. S. 206
record, the judgment is prima facie evidence, at least, of the truth of the matter adjudged, and it
should be held conclusive upon the merits tried in the foreign court unless some special ground
is shown for impeaching the judgment, as by showing that it was affected by fraud or prejudice
or that, by the principles of international law and by the comity of our own country, it should not
be given full credit and effect.
Under what circumstances this may be done does not appear to have ever been the subject of
judicial investigation in this country.
It has often, indeed, been declared by this Court that the fraud which entitles a party to impeach
the judgment of one of our own tribunals must be fraud extrinsic to the matter tried in the cause,
and not merely consist in false and fraudulent documents or testimony submitted to that tribunal,
and the truth of which was contested before it and passed upon by it.United States v.
Throckmorton, 98 U. S. 61, 98 U. S. 65-66; Vance v. Burbank, 101 U. S. 514, 101 U. S.
519; Steel v. Smelting Co.,106 U. S. 447, 106 U. S. 453; Moffat v. United States, 115 U. S.
24, 115 U. S. 32; United States v. Minor, 114 U. S. 233, 114 U. S. 242. And in one English case,
where a ship had been sold under a foreign judgment, the like restriction upon impeaching that
judgment for fraud was suggested, but the decision was finally put upon the ground that the
judicial sale passed the title to the ship. Cammell v. Sewell (1858-60), 3 H. & N. 617, 646, 5 H. &
N. 728, 729, 742.

But it is now established in England by well considered and strongly reasoned decisions of the
There is no doubt that both in this country, as appears by the authorities already cited, and in
Court of Appeal that foreign judgments may be impeached if procured by false and fraudulent
England, a foreign judgment may be impeached for fraud.
representations and testimony of the plaintiff, even if the same question of fraud was presented
to and decided by the foreign court.
Shortly before the Declaration of Independence, the House of Lords, upon the trial of the
Duchess of Kingston for bigamy, put to the judges the question whether -- assuming a sentence
In Abouloff v. Oppenheimer (1882), the plaintiff had recovered a judgment at Tiflis, in Russia,
of the ecclesiastical court against a marriage, in a suit for jactitation of marriage, to be conclusive
ordering the defendants to return certain goods, or to pay their value. The defendants appealed
evidence so as to prevent the counsel for the crown from proving the marriage upon an
to a higher Russian court, which confirmed the judgment and ordered the defendants to pay,
indictment for polygame -- "the counsel for the crown may be admitted to avoid the effect of such
besides the sum awarded below, an additional sum for costs and expenses. In an action in the
sentence by proving the same to have been obtained by fraud or collusion." Chief Justice De
English High Court of
Grey, delivering the opinion of the judges, which was adopted by the House of Lords, answering
this question in the affirmative, said:
Page 159 U. S. 208

58 | C o n f l i c t o f L a w s C a s e s
Justice upon those judgments, the defendants pleaded that they were obtained by the gross
fraud of the plaintiff in fraudulently representing to the Russian courts that the goods in question
were not in her possession when the suit was commenced, and when the judgment was given,
and during the whole time the suit was pending, and by fraudulently concealing from those
courts the fact that those goods, as the fact was and as she well knew, were in her actual
possession. A demurrer to this plea was overruled and judgment entered for the defendants.
And that judgment was affirmed in the Court of Appeal by Lord Chief Justice Coleridge, Lord
Justice Baggallay, and Lord Justice Brett, all of whom delivered concurring opinions, the
grounds of which sufficiently appear in the opinion delivered by Lord Justice Brett (since Lord
Esher, M.R.), who said:
"With regard to an action brought upon a foreign judgment, the whole doctrine as to fraud is
English, and is to be applied in an action purely English. I am prepared to hold, according to the
judgment of the House of Lords adopting the proposition laid down by De Grey, C.J., that if the
judgment upon which the action is brought was procured from the foreign court by the successful
fraud of the party who is seeking to enforce it, the action in the English court will not lie. This
proposition is absolute and without any limitation, and as the Lord Chief Justice has pointed out,
is founded on the doctrine that no party in an English court shall be able to take advantage of his
own wrongful act or, as it may be stated in other language, that no obligation can be enforced in
an English court of justice which has been procured by the fraud of the person relying upon it as
an obligation. . . . I will assume that in the suit in the Russian courts, the plaintiff's fraud was
alleged by the defendants, and that they gave evidence in support of the charge. I will assume
even that the defendants gave the very same evidence which they propose to adduce in this
action. Nevertheless the defendants will not be debarred at the trial of this action from making
the same charge of fraud and from adducing the same evidence in support of it, and if the High
Court of Justice is satisfied that the allegations of the defendants are true and
Page 159 U. S. 209
that the fraud was committed, the defendants will be entitled to succeed in the present action. It
has been contended that the same issue ought not to be tried in an English court which was
tried in the Russian courts, but I agree that the question whether the Russian courts were
deceived never could be an issue in the action tried before them. . . . In the present case, we
have had to consider the question fully, and according to the best opinion which I can form, fraud
committed by a party to a suit for the purpose of deceiving a foreign court is a defense to an
action in this country founded upon the judgment of that foreign court. It seems to me that if we
were to accede to the argument for the plaintiff, the result would be that a plausible deceiver
would succeed, whereas a deceiver who is not plausible would fail. I cannot think that plausible
fraud ought to be upheld in any court of justice in England. I accept the whole doctrine, without
any limitation, that whenever a foreign judgment has been obtained by the fraud of the party
relying upon it, it cannot be maintained in the courts of this country, and further that nothing
ought to persuade an English court to enforce a judgment against one party which has been
obtained by the fraud of the other party to the suit in the foreign court."
10 Q.B.D. 295, 305-308.
The same view was affirmed and acted on in the same court by Lords Justices Lindley and
Bowen in Vadala v. Lawes (1890), 25 Q.B.D. 310, 317-320, and by Lord Esher and Lord Justice
Lopes in Crozat v. Brogden [1894] 2 Q.B. 30, 34-35.
59 | C o n f l i c t o f L a w s C a s e s
In the case at bar, the defendants offered to prove in much detail that the plaintiffs presented to
the French court of first instance and to the arbitrator appointed by that court, and upon whose
report its judgment was largely based, false and fraudulent statements and accounts against the
defendants by which the arbitrator and the French courts were deceived and misled, and their
judgments were based upon such false and fraudulent statements and accounts. This offer, if
satisfactorily proved, would, according to the decisions of the English Court of Appeal in Abouloff
v. Oppenheimer, Vadala v. Lawes, and Crozat v. Brogden, above cited,
Page 159 U. S. 210
be a sufficient ground for impeaching the foreign judgment and examining into the merits of the
original claim.
But whether those decisions can be followed in regard to foreign judgments, consistently with
our own decisions as to impeaching domestic judgments for fraud, it is unnecessary in this case
to determine, because there is a distinct and independent ground upon which we are satisfied
that the comity of our nation does not require us to give conclusive effect to the judgments of the
courts of France, and that ground is the want of reciprocity on the part of France as to the effect
to be given to the judgments of this and other foreign countries.
In France, the royal ordinance of June 15, 1629, art. 121, provided as follows:
"Judgments rendered, contracts or obligations recognized, in foreign kingdoms and
sovereignties for any cause whatever shall have no lien or execution in our kingdom. Thus, the
contracts shall stand for simple promises, and, notwithstanding the judgments, our subjects
against whom they have been rendered may contest their rights anew before our judges."
Touillier, Droit Civil, lib. 3, tit. 3, c. 6, sect. 3, No. 77.
By the French Code of Civil Procedure, art. 546,
"Judgments rendered by foreign tribunals, and acts acknowledged before foreign officers, shall
not be capable of execution in France except in the manner and in the cases provided by articles
2123 and 2128 of the Civil Code,"
which are as follows: by article 2123,
"A lien cannot arise from judgments rendered in a foreign country except so far as they have
been declared executory by a French tribunal, without prejudice to provisions to the contrary
which may exist in public laws and treaties."
By article 2128,
"Contracts entered into in a foreign country cannot give a lien upon property in France if there
are no provisions contrary to this principle in public laws or in treaties."
Touillier, ubi sup., No. 84.
The defendants in their answer cited the above provisions of the statutes of France, and alleged, indiscriminate effect to the judgment of each other's tribunals, however the practice might be
and at the trial offered to prove, that by the construction given to proper or convenient in federal states or those under the same sovereign."

Page 159 U. S. 211
these statutes by the judicial tribunals of France, when the judgments of tribunals of foreign
countries against the citizens of France are sued upon in the courts of France, the merits of the
controversies upon which those judgments are based are examined anew, unless a treaty to the
contrary effect exists between the Republic of France and the country in which such judgment is
obtained (which is not the case between the Republic of France and the United States), and that
the tribunals of the Republic of France give no force and effect, within the jurisdiction of that
country, to the judgments duly rendered by courts of competent jurisdiction of the United States
against citizens of France after proper personal service of the process of those courts has been
made thereon in this country. We are of opinion that this evidence should have been admitted.
It was that statement which appears to have called forth the observations of Mr. Justice Story,
already cited:
"Holland seems at all times, upon the general principle of reciprocity, to have given great weight
to foreign judgments, and in many cases, if not in all cases, to have given to them a weight equal
to that given to domestic judgments wherever the like rule of reciprocity with regard to Dutch
judgments has been adopted by the foreign country whose judgment is brought under review.
This is certainly a very reasonable rule, and may perhaps hereafter work itself firmly into the
structure of international jurisprudence."
Story on Conflict of Laws § 618.

In Odwin v. Forbes (1817), President Henry, in the Court of Demerara, which was governed by
This rule, though never either affirmed or denied by express adjudication in England or America,
the Dutch law and was, as he remarked, "a tribunal foreign to and independent of that of
has been indicated, more or less distinctly, in several of the authorities already cited.
England," sustained a plea of an English certificate in bankruptcy, upon these grounds:

Lord Hardwicke threw out a suggestion that the credit to be given by one court to the judgment
"It is a principle of their law, and laid down particularly in the ordinances of Amsterdam, . . . that
of a foreign court
the same law shall be exercised towards foreigners in Amsterdam as is exercised with respect to
citizens of that state in other countries, and upon this principle of reciprocity, which is not
confined to the City of Amsterdam, but pervades the Dutch laws, they have always given effect Page 159 U. S. 213
to the laws of that country which has exercised the same comity and indulgence in admitting
theirs; . . . that the Dutch bankrupt laws proceed on the same principles as those of the English;
that the English tribunals give effect to the Dutch bankrupt laws, and that, on the principle of might well be affected by "their proceeding both by the same rules of law." Otway v. Ramsay, 4
reciprocity and mutual comity, the Dutch tribunals, according to their own ordinances, are bound B. & C. 414-416, note.
to give effect to the English bankrupt laws when duly proved, unless there is any express law or
ordinance prohibiting their admission." Lord Eldon, after saying that "natural law" (evidently intending the law of nations) "requires the
courts of this country to give credit to those of another for the inclination and power to do
justice," added that
And his judgment was affirmed in the Privy Council on appeal. Case of Odwin v. Forbes, pp. 89,
159-161, 173-176; (1817) Buck Bankr.Cas. 57, 64.
"if it appears in evidence that persons suing under similar circumstances neither had met nor
could meet with justice, that fact cannot be immaterial as an answer to the presumption."
Page 159 U. S. 212

President Henry, at page 76 of his Treatise on Foreign Law, published as a preface to his report
of that case, said:
"This comity in giving effect to the judgments of other tribunals is generally exercised by states
under the same sovereign, on the ground that he is the fountain of justice in each, though of
independent jurisdiction, and it has also been exercised in different states of Europe with respect
to foreign judgments, particularly in the Dutch states, who are accustomed by the principle of
reciprocity to give effect in their territories to the judgments of foreign states which show the
same comity to theirs; but the tribunals of France and England have never exercised this comity
to the degree that those of Holland have, but always required a fresh action to be brought, in
which the foreign judgment may be given in evidence. As this is a matter of positive law and
internal policy in each state, no opinion need be given. Besides, it is a mere question of comity,
and perhaps it might be neither politic nor prudent, in two such great states, to give
Wright v. Simpson, 6 Ves. 714, 730.
Lord Brougham, presiding as lord Chancellor in the House of Lords, said:
"The law, in the course of procedure abroad, sometimes differs so mainly from ours in the
principles upon which it is bottomed that it would seem a strong thing to hold that our courts
were bound conclusively to give execution to the sentence of foreign courts when, for aught we
know, there is not anyone of those things which are reckoned the elements or the corner stones
of the due administration of justice present to the procedure in these foreign courts."
Houlditch v. Donegal, 8 Bligh, N.R. 301, 338.

60 | C o n f l i c t o f L a w s C a s e s
Chief Justice Smith, of New Hampshire, in giving reasons why foreign judgments or decrees,
founded on the municipal laws of the state in which they are pronounced, are not conclusive
evidence of debt, but prima facie evidence only, said:
"These laws and regulations may be unjust, partial to citizens, and against foreigners; they may
operate injustice to our citizens, whom we are bound to protect; they may be, and the decisions
of courts founded on them, just cause of complaint against the supreme power of the state
where rendered. To adopt them is not merely saying that the courts have decided correctly on
the law, but it is approbating the law itself."
Bryant v. Ela, Smith (N.H.) 396, 404.
Mr. Justice Story said:
"If a civilized nation seeks to have the sentences of its own courts of any validity elsewhere, they
ought to have a just regard to the rights and usages of other civilized nations, and the principles
of public and national law in the administration of justice."
Bradstreet v. Neptune Ins. Co., 3 Sumner 600, 608.
Page 159 U. S. 214
Mr. Justice Woodbury said that judgments in personam, rendered under a foreign government,
"are, ex commitate, treated with respect according to the nature of the judgment and the
character of the tribunal which rendered it and the reciprocal mode, if any, in which that
government treats our judgments,"
and added "nor can much comity be asked for the judgments of another nation which, like
France, pays no respect to those of other countries." Burnham v. Webster, 1 Woodb. & Min.
172, 175, 179.
Mr. Justice Cooley said: "True comity is equality. We should demand nothing more and concede
nothing less." McEwan v. Zimmer, 38 Mich. 765, 769.
Mr. Wheaton said:
"There is no obligation recognized by legislators, public authorities, and publicists to regard
foreign laws, but their application is admitted only from considerations of utility and the mutual
convenience of states -- ex commitate, ob reciprocam utilitatem."
"The general comity, utility, and convenience of nations have, however, established a usage
among most civilized states by which the final judgments of foreign courts of competent
jurisdiction are reciprocally carried into execution."
Wheaton's International Law (8th ed.) §§ 79, 147.
61 | C o n f l i c t o f L a w s C a s e s
Since Story, Kent, and Wheaton wrote their commentaries, many books and essays have been
published upon the subject of the effect to be allowed by the courts of one country to the
judgments of another, with references to the statutes and decisions in various countries. Among
the principal ones are Foelix, Droit International Prive (4th ed., by Demangeat, 1866) lib. 2, tits.
7, 8; Moreau, Effets Internationaux des Jugements (1884); Piggott, on Foreign Judgments (2d
ed., 1884); Constant, De l'Execution des Jugements Etrangers (2d ed., 1890), giving the text of
the articles of most of the modern codes upon the subject, and of French treaties with Italian,
German, and Swiss states, and numerous papers in Clunet's Journal de Droit International
Prive, established in 1874 and continued to the present time. For the reasons stated at the
outset of this opinion, we have not thought it important to state the conflicting theories of
continental commentators
Page 159 U. S. 215
and essayists as to what each may think the law ought to be, but have referred to their works
only for evidence of authoritative declarations, legislative or judicial, of what the law is.
By the law of France, settled by a series of uniform decisions of the Court of Cassation, the
highest judicial tribunal, for more than half a century, no foreign judgment can be rendered
executory in France without a review of the judgment au fond (to the bottom), including the
whole merits of the cause of action on which the judgment rests. Pardessus, Droit Commercial §
1488; Bard, Precis de Droit International (1883) nos. 234-239; Story on Conflict of Laws §§ 615-
617; Pigggott 452; Westllake on Private International Law (3d ed., 1890) 350.
A leading case was decided by the Court of Cassation on April 19, 1819, and was as follows: a
contract of partnership was made between Holker, a French merchant, and Parker, a citizen of
the United States. Afterwards, and before the partnership accounts were settled, Parker came to
France, and Holker sued him in the Tribunal of Commerce of Paris. Parker excepted on the
ground that he was a foreigner, not domiciled in France, and obtained a judgment, affirmed on
appeal, remitting the matter to the American courts -- obtint son renvoi devant les tribunaux
Americains. Holker then sued Parker in the Circuit Court of the United States for the District of
Massachusetts, and in 1814 obtained a judgment there ordering Parker to pay him $529,949.
One branch of the controversy had been brought before this Court in 1813. Holker v. Parker, 7
Cranch 436. Holker, not being able to obtain execution of that judgment in America because
Parker had no property there and continued to reside in Paris, obtained from a French judge an
order declaring the judgment executory. Upon Parker's application to nullify the proceeding, the
Royal Court of Paris, reversing the judgment of a lower court, set aside that order, assigning
these reasons:
"Considering that judgments rendered by foreign courts have neither effect nor authority in
France; that this rule is doubtless more particularly applicable
Page 159 U. S. 216
in favor of Frenchmen, to whom the King and his officers owe a special protection, but that the
principle is absolute, and may be invoked by all persons, without distinction, being founded on
the independence of states; that the ordinance of 1629, in the beginning of its article 121, lays
down the principle in its generality when it says that judgments rendered in foreign kingdoms
and sovereignties for any cause whatever shall have no execution in the Kingdom of France,
and that the Civil Code, art. 2123, gives to this principle the same latitude when it declares that a
lien cannot result from judgments rendered in a foreign country, except so far as they have been
declared executory by a French tribunal -- which is not a matter of mere form, like the granting in
past times of a pareatis from one department to another for judgments rendered within the
Kingdom, but which assumes, on the part of the French tribunals, a cognizance of the cause,
and a full examination of the justice of the judgment presented for execution, as reason
demands, and that this has always been practiced in France, according to the testimony of our
ancient authorities; that there may result from this an inconvenience where the debtor, as is
asserted to have happened in the present case, removes his property and his person to France,
while keeping his domicile in his native country; that it is for the creditor to be watchful, but that
no consideration can impair a principle on which rests the sovereignty of governments, and
which, whatever be the case, must preserve its whole force."
The court therefore adjudged that, before the tribunal of first instance, Holker should state the
grounds of his action, to be contested by Parker, and to be determined by the court upon
cognizance of the whole cause. That judgment was confirmed, upon deliberate consideration, by
the Court of Cassation, for the reasons that the ordinance of 1629 enacted, in absolute terms
and without exception, that foreign judgments should not have execution in France; that it was
only by the Civil Code and the Code of Civil Procedure that the French tribunals had been
authorized to declare them executory; that therefore the ordinance of 1629 had no application;
that the articles of the Codes
Page 159 U. S. 217
referred to did not authorize the courts to declare judgments rendered in a foreign country
executory in France without examination; that such an authorization would be as contrary to the
institution of the courts as would be the award or the refusal of execution arbitrarily and at will,
would impeach the right of sovereignty of the French government, and was not in the intention of
the legislature, and that the Codes made no distinction between different judgments rendered in
a foreign country, and permitted the judges to declare them all executory, and therefore those
judgments, whether against a Frenchman or against a foreigner, were subject to examination on
the merits. Holker v. Parker, Merlin, Questions do Droit, Jugement, § 14, No. 2.
The Court of Cassation has ever since constantly affirmed the same view. Moreau, No. 106,
note, citing many decisions; Clunet, 1882, p. 166. In Clunet, 1894, p. 913, note, it is said to be
"settled by judicial decisions -- il est de jurisprudence -- that the French courts are bound, in the
absence of special diplomatic treaties, to proceed to the revision on the whole merits -- au fond -
- of foreign judgments, execution of which is demanded of them,"
citing, among other cases, a decision of the Court of Cassation on February 2, 1892, by which it
was expressly held to result from the articles of the Codes above cited
"that judgments rendered in favor of a foreigner against a Frenchman, by a foreign court, are
subject, when execution of them is demanded in France, to the revision of the French tribunals
which have the right and the duty to examine them, both as to the form and as to the merits."
Sirey, 1892, 1, 201.
62 | C o n f l i c t o f L a w s C a s e s
In Belgium the Code of Civil Procedure of 1876 provides that if a treaty on the basis of
reciprocity be in existence between Belgium and the country in which the foreign judgment has
been given, the examination of the judgment in the Belgian courts shall bear only upon the
questions whether it "contains nothing contrary to public order, to the principles of the Belgian
public order;" whether, by the law of the country in which it was rendered, it has the force of res
judicata; whether the copy is duly authenticated; whether the
Page 159 U. S. 218
defendant's rights have been duly respected, and whether the foreign court is not the only
competent court, by reason of the nationality of the plaintiff. Where, as is the case between
Belgium and France, there is no such treaty, the Belgian Court of Cassation holds that the
foreign judgment may be reexamined upon the merits. Constant, 111, 116; Moreau, No. 189;
Clunet, 1887, p. 217; 1888, p. 837; Piggott 439. And in a very recent case, the Civil Tribunal of
Brussels held that,
"considering that the right of revision is an emanation of the right of sovereignty; that it proceeds
from the emporium, and that as such it is within the domain of public law; that from that principle
it manifestly follows that, if the legislature does not recognize executory force in foreign
judgments where there exists no treaty upon the basis of reciprocity, it cannot belong to the
parties to substitute their will for that of the legislature by arrogating to themselves the power of
delegating to the foreign judge a portion of sovereignty."
Clunet, 1894, pp. 164, 165.
In Holland, the effect given to foreign judgments has always depended upon reciprocity, but
whether by reason of Dutch ordinances only or of general principles of jurisprudence does not
clearly appear. Odwin v. Forbes, and Henry on Foreign Law, above cited; Story on Conflict of
Laws § 618; Foelix, No. 397, note; Clunet, 1879, p. 369; 1 Ferguson's International Law, 85;
Constant, 171; Moreau, No. 213.
In Denmark, the courts appear to require reciprocity to be shown before they will execute a
foreign judgment. Foelix, Nos. 328, 345; Clunet, 1891, p. 987; Westlale, ubi sup. In Norway, the
courts reexamine the merits of all foreign judgments, even of those of Sweden. Foelix, No. 401;
Piggott, 504, 505; Clunet, 1892, p. 296. In Sweden, the principle of reciprocity has prevailed
from very ancient times. The courts give no effect to foreign judgments unless upon that
principle, and it is doubtful whether they will even then unless reciprocity is secured by treaty
with the country in which the judgment was rendered. Foelix, No. 400; Olivecrona, in Clunet,
1880, p. 83; Constant, 191; Moreau, No. 222; Piggott, 503; Westlake, ubi sup.
Page 159 U. S. 219
In the empire of Germany, as formerly in the states which now form part of that empire, the
judgments of those states are mutually executed, and the principle of reciprocity prevails as to
the judgments of other countries. Foelix, Nos. 328, 331, 333-341; Moreau, Nos. 178, 179;
Vierhaus, in Piggott, 460-474; Westlake, ubi sup. By the German Code of 1877,
"compulsory execution of the judgment of a foreign court cannot take place unless its
admissibility has been declared by a judgment of exequatur; . . . the judgment of exequatur is to
be rendered without examining whether the decision is conformable to law;"
but it is not to be granted "if reciprocity is not guaranteed." Constant, 79-81; Piggott, 466. The
Reichsgericht, or imperial court, in a case reported in full in Piggott, has held that an English
judgment cannot be executed in Germany, because, the court said, the German courts, by the
Code, when they execute foreign judgments at all, are "bound to the unqualified recognition of
the legal validity of the judgments of foreign courts," and
"it is therefore an essential requirement of reciprocity that the law of the foreign state should
recognize in an equal degree the legal validity of the judgments of German courts, which are to
be enforced by its courts, and that an examination of their legality, both as regards the material
justice of the decision as to matters of fact or law, and with respect to matters of procedure,
should neither be required as a condition of their execution, by the court ex officio, nor be
allowed by the admission of pleas which might lead to it."
Piggott, 470-471. See also Clunet, 1882, p. 35; 1883, p. 246; 1884, p. 600.
In Switzerland, by the federal Constitution, civil judgments in one canton are executory
throughout the republic. As to foreign judgments, there is no federal law, each canton having its
own law upon the subject. But civil judgments in one canton are executory other cantons, foreign
judgments are executed according to the rule of reciprocity only. Constant, 193-204; Piggott,
505-516; Clunet, 1887, p. 762; Westlake, ubi sup. The law upon this subject has been clearly
stated by Brocher, President of the Court of Cassation of Geneva and professor of law in the
university there. In his Nouveau
Page 159 U. S. 220
Traite de Droit International Prive (1876) § 174, treating of the question whether "it might not be
convenient that states should execute, without reviewing their merits, judgments rendered on the
territory of each of them respectively," he says:
"It would certainly be advantageous for the parties interested to avoid the delays, the conflicts,
the differences of opinion, and the expenses resulting from the necessity of obtaining a new
judgment in each locality where they should seek execution. There might thence arise for each
sovereignty a juridical or moral obligation to lend a strong hand to foreign judgments. But would
not such an advantage be counterbalanced, and often surpassed, by the dangers that might
arise from that mode of proceeding? There is here, we believe, a question of reciprocal
appreciation and confidence. One must at the outset inquire whether the administration of the
foreign judiciary, whose judgments it is sought to execute without verifying their merits, presents
sufficient guaranties. If the propriety of such an execution be admitted, there is ground for
making it the object of diplomatic treaties. That form alone can guaranty the realization of a
proper reciprocity. It furnishes, moreover, to each state the means of acting upon the judicial
organization and procedure of other states."
In an article in the Journal, after a review of the Swiss decisions, he recognizes and asserts that
"it comes within the competency of each canton to do what seems to it proper in such matters."
Clunet, 1879, pp. 88, 94. And in a later treatise he says:
63 | C o n f l i c t o f L a w s C a s e s
"We cannot admit that the recognition of a state as sovereign ought necessarily to have as a
consequence the obligation of respecting and executing the judicial decisions rendered by its
tribunals. In strict right, the authority of such acts does not extend beyond the frontier. Each
sovereignty possesses in particular, and more or less in private, the territory subject to its power.
No other can exercise there an act of its authority. This territorial independence finds itself, in
principle, directly included in the very act by which one nation recognizes a foreign state as a
sovereign; but there cannot result therefrom a promise to adopt, and to cause to be executed
upon the national territory, judgments rendered by
Page 159 U. S. 221
the officials of the foreign state, whoever they may be. That would be an abdication of its own
sovereignty, and would bind it in such sort as to make it an accomplice in acts often injurious,
and in some cases even criminal. Such obligations suppose a reciprocal confidence. They are
not undertaken, moreover, except upon certain conditions, and by means of a system of
regulations intended to prevent or to lessen the dangers which might result from them."
3 Cours de Droit International Prive (1885) 126, 127.
In Russia, by the Code of 1864, "the judgments of foreign tribunals shall be rendered executory
according to the rules established by reciprocal treaties and conventions," and where no rules
have been established by such treaties, are to be "put in execution in the empire only after
authorization granted by the courts of the empire," and
"in deciding upon demands of this kind the courts do not examine into the foundation of the
dispute adjudged by the foreign tribunals, but decide only whether the judgment does not
contain dispositions which are contrary to the public order, or which are not permitted by the
laws of the empire."
Constant, 183-185. Yet a chamber of the Senate of St. Petersburg, sitting as a Court of
Cassation, and the highest judicial tribunal of the empire in civil matters, has declined to execute
a French judgment upon the grounds that, by the settled law of Russia,
"it is a principle in the Russian empire that only the decisions of the authorities to whom
jurisdiction has been delegated by the sovereign power have legal value by themselves and of
full right,"
and that, "in all questions of international law, reciprocity must be observed and maintained as a
fundamental principle."Adam v. Schipoff, Clunet, 1884, pp. 45, 46, 134. And Professor
Englemann, of the Russian University of Dorpat, in an able essay, explaining that and other
Russian decisions, takes the following view of them:
"The execution of a treaty is not the only proof of reciprocity. . . . It is necessary to commit the
ascertainment of the existence of reciprocity to the judicial tribunals, for the same reasons for
which there is conferred upon them the right to settle all questions incident to the cause to be
adjudged. The existence of reciprocity between
Page 159 U. S. 222
two states ought to be proved in the same manner as all the positive facts of the case. . . . It is Constant, 129, 130; Clunet, 1886, p. 570. This resolution closely follows the terms of the
true that the principle of reciprocity is a principle not of right, but of policy, yet the basis of the Russian Code, which, as has been seen, has not precluded applying the principle of reciprocity.
principle of all regular and real policy is also the fundamental principle of right, and the point of
departure of all legal order -- the suum cuique. This last principle comprehends right, reciprocity,
In Austria, the rule of reciprocity does not rest upon any treaty or legislative enactment, but has
utility, and reciprocity is the application of right to policy. . . . Let this principle be applied
been long established, by imperial decrees and judicial decisions, upon general principles of
wherever there is the least guaranty or even a probability of reciprocity, and the cognizance of
jurisprudence. Foelix, No. 331; Constant, 100-108; Moreau, No. 185; Weiss, Traite de Droit
this question be committed to the judicial tribunals, and one will arrive at important results,
International (1886) 950; Clunet, 1891, p. 1003; 1894, p. (1886) 980; Clunet, 1891, p. 1003;
which, on their side, will touch the desired end -- international accord. But for this it is
1894, p. 908; Piggott, 434. In Hungary, the same principles were always followed as in Austria,
indispensable that the application of this principle should be entrusted to judicial tribunals,
and reciprocity has been made a condition by a law of 1880. Constant, 109; Moreau, No. 186,
accustomed to decide affairs according to right, and not to administrative authorities, which look
and note; Piggott, 436; Weiss, ubi sup.
above all to utility, and are accustomed to be moved by political reasons, intentions, and even
passions."
In Italy, before it was united into one kingdom, each state had its own rules. In Tuscany and in
Modena, in the absence of treaty, the whole merits were reviewed. In Parma, as by the French
Clunet, 1884, pp. 120-122. But it would seem that no foreign judgment will be executed in
ordinance of 1629, the foreign judgment was subject to fundamental revision if against a subject
Russia unless reciprocity is secured by treaty. Clunet, 1884, pp. 46, 113, 139, 140, 602.
of Parma. In Naples, the Code and the decisions followed those of France. In Sardinia, the
written laws required above all the condition of reciprocity, and if that condition was not fulfilled,
In Poland, the provisions of the Russian Code are in force, and the Court of Appeal of Warsaw the foreign judgment was reexaminable in all respects. Fiore, Effetti Internazionali delle
has decided that where there is no treaty, the judgments of a foreign country cannot be Sentenze (1875) 40-44; Moreau, No. 204. In the papal states, by a decree of the Pope in 1820,
executed, because
"the exequatur shall not be granted, except so far as the judgments rendered in the states of his
"in admitting a contrary conclusion, there would be impugned one of the cardinal principles of Holiness shall enjoy the same favor in the foreign countries; this reciprocity is presumed if there
international relations, namely the principle of reciprocity, according to which each state is no particular reason to doubt it."
recognizes juridical rights and relations, originating or established in another country, only in the
measure in which the latter, in its turn, does not disregard the rights and relations existing in the
Toullier, Droit Civil, lib. 3, tit. 3, c. 6, § 3, No. 93. And see Foelix, No. 343; Westlake, ubi sup. In
former."
the Kingdom of Italy,

Clunet, 1884, pp. 494-495.

Page 159 U. S. 224

In Roumania, it is provided by Code that

by the Code of Procedure of 1865,

"judicial decisions rendered in foreign countries cannot be executed in Roumania except in the
same manner in which Roumanian judgments are executed in the country in question, and
provided they are declared executory by competent Roumanian judges,"
and this article seems to be held to require legislative reciprocity.
Page 159 U. S. 223
Moreau, No. 219; Clunet, 1879, p. 351; 1885, p. 537; 1891, p. 452; Piggott, 495.
In Bulgaria, by a resolution of the supreme court in 1881,
"executory force is given to the judgments of foreign judicial authorities by the Court of Appeal in
whose jurisdiction they are to be executed, by obtaining a judgment on an exequatur in which
the court examines (a) if the judgment has been pronounced by a competent judicial authority;
(b) if it has been pronounced, the parties being regularly cited; (c) if the parties have been legally
represented or legally defaulted; (d) if the judgment contains dispositions contrary to public order
or to the internal public law of the realm."
Constant, 157. In 1874, the Court of Cassation of Turin,
"considering that in international relations is admitted the principle of reciprocity, as that which
has its foundation in the natural reason of equality of treatment, and in default thereof opens the
way to the exercise of the right of retaliation,"

"the Bulgarian judges should, as a general rule, abstain from entering upon the merits of the
and that the French courts examine the merits of Italian judgments before allowing their
foreign judgment. They ought only to inquire whether the judgment submitted to then does not
execution in France, decided that the Italian courts of appeal, when asked to execute a French
contain dispositions contrary to the public order and to the Bulgarian laws."
judgment, ought not only to inquire into the competency of the foreign court, but also to review
the merits and the justice of the controversy. Levi v. Pitre, in Rossi, Execuzione delle Sentenze
Straniere (1st ed. 1875) 70, 284, and in Clunet, 1879, p. 295. Some commentators, however,

64 | C o n f l i c t o f L a w s C a s e s
while admitting that decision to be most authoritative, have insisted that it is unsound, and And he pointed out that Mexico, by its Code, had adopted reciprocity as a fundamental principle.
opposed to other Italian decisions, to which we have not access. Rossi, ubi sup. (2d ed. 1890)
92; Fiore, 142-143; Clunet, 1878, p. 237; Clunet, 1879, pp. 296, 305; Piggott, 483; Constant,
Page 159 U. S. 226
161.

Among the reasons assigned by the court for ordering the Mexican judgment to be executed
In the principality of Monaco, foreign judgments are not executory, except by virtue of a special
was that "there exists in Mexico no precedent of jurisprudence which refuses execution to
ordinance of the prince, upon a report of the Advocate General. Constant, 169; Piggott, 488.
judgments rendered by the Spanish tribunals." Clunet, 1891, pp. 288-292.

In Spain, formerly, foreign judgments do not appear to have been executed at all. Foelix, No.
In Portugal, foreign judgments, whether against a Portuguese or against a foreigner, are held to
398; Moreau, No. 197; Silvela, in Clunet, 1881, p. 20. But by the Code of 1855, revised in 1881
be reviewable upon the merits before granting execution thereof. Foelix, No. 399; Clunet, 1875,
without change in this respect,
pp. 54, 448; Moreau, No. 217; Constant, 176-180; Westlake, ubi sup.

"judgments pronounced in foreign countries shall have in Spain the force that the respective
treaties given them; if there are no special treaties with the nation in which they have been
rendered, they shall
Page 159 U. S. 225
In Greece, by the provisions of the Code of 1834, foreign judgments both parties to which are
foreigners are enforced without examination of their merits, but if one of the parties is a Greek,
they are not enforced if found contradictory to the facts proved or if they are contrary to the
prohibitive laws of Greece. Foelix, No. 396; Constant, 151, 152; Moreau, No. 202; Saripolos, in
Clunet, 1880, p. 173; Piggott, 475.

have the same force that is given by the laws of that nation to Spanish executory judgments; if In Egypt, under the influence of European jurisprudence, the Code of Civil Procedure has made
the judgment to be executed proceeds from a nation by whose jurisprudence effect is not given reciprocity a condition upon which foreign judgments are executed. Constant, 136; Clunet, 1887,
to the judgments pronounced by Spanish tribunals, it shall have no force in Spain," pp. 98, 228; 1889, p. 322.

and
"application for the execution of judgments pronounced in foreign countries shall be made to the
Supreme Tribunal of Justice, which, after examining an authorized translation of the foreign
judgment, and after hearing the party against whom it is directed and the public minister, shall
decide whether it ought or ought not to be executed."
In Cuba and in Porto Rico, the Codes of Civil Procedure are based upon the Spanish Code of
1855. Piggott, 435, 503. In Hayti, the Code reenacts the provisions of the French Code.
Constant, 153; Moreau, No. 203; Piggott, 460.
In Mexico, the system of reciprocity has been adopted by the Code of 1884 as the governing
principle. Constant, 168; Clunet, 1891, p. 290.

Constant, 141-142; Piggott, 499-500. A case in which the Supreme Court of Spain in 1880 The rule of reciprocity likewise appears to have generally prevailed in South America. In Peru,
ordered execution of a French judgment after reviewing its merits is reported in Clunet, 1881, p. foreign judgments do not appear to be executed without examining the merits unless when
365. In another case, in 1888, the same court, after hearing the parties and the public minister, reciprocity is secured by treaty. Clunet, 1879, pp. 266, 267; Piggott, 548. In Chili, there appears
ordered execution of a Mexican judgment. The public minister, in his demand for its execution, to have been no legislation upon the subject, but, according to a decision of the Supreme Court
said: of Santiago in 1886, "the Chilian tribunals should not award an exequatur, except upon
decisions in correct form, and also reserving the general principle of reciprocity." Clunet, 1889,
p. 135; Constant, 131-132.
"Our law of civil procedure, inspired, to a certain point, by the modern theories of international
law which, recognizing among civilized nations a true community of right, and considering
mankind as a whole, in which nations occupy a position identical with that of individuals towards Page 159 U. S. 227
society, gives authority in Spain to executory judgments rendered by foreign tribunals, even in
the absence of special treaty, provided that those countries do not proscribe the execution there
In Brazil, foreign judgments are not executed unless because of the country in which they were
of our judgments, and under certain conditions, which, if they limit the principle, are inspired by
rendered admitting the principle of reciprocity or because of a placet of the government of Brazil,
the wish of protecting our sovereignty and by the supreme exigencies of justice. When nothing
which may be awarded according to the circumstances of the case. Constant, 124, and note;
appears either for or against as to the authority of the judgments of our courts in the foreign
Moreau, No. 192; Piggott, 543-546; Westlake, ubi sup. In the Argentine Republic, the principle of
country, one should not put an obstacle to the fulfillment, in our country, of judgments emanating
reciprocity was maintained by the courts, and was affirmed by the Code of 1878 as a
from other nations, especially when the question is of a country which, by its historic origin, its
condition sine qua non of the execution of foreign judgments, but has perhaps been modified by
language, its literature, and by almost the identity of its customs, its usages, and its social
later legislation. Moreau, No. 218; Palomeque, in Clunet, 1887, pp. 539-558.
institutions, has so great a connection with our own, which obliges us to maintain with it the most
intimate relations of friendship and courtesy."

65 | C o n f l i c t o f L a w s C a s e s
It appears, therefore, that there is hardly a civilized nation on either continent which by its
general law allows conclusive effect to an executory foreign judgment for the recovery of money.
In France and in a few smaller states -- Norway, Portugal, Greece, Monaco, and Hayti -- the
merits of the controversy are reviewed as of course, allowing to the foreign judgment, at the
most, no more effect than of being prima facie evidence of the justice of the claim. In the great
majority of the countries on the continent of Europe -- in Belgium, Holland, Denmark, Sweden,
Germany, in many cantons of Switzerland, in Russia and Poland, in Roumania, in Austria and
Hungary (perhaps in Italy), and in Spain -- as well as in Egypt, in Mexico, and in a great part of
South America, the judgment rendered in a foreign country is allowed the same effect only as
the courts of that country allow to the judgments of the country in which the judgment in question
is sought to be executed.
The prediction of Mr. Justice Story (in § 618 of his Commentaries on the Conflict of Laws,
already cited) has thus been fulfilled, and the rule of reciprocity has worked itself firmly into the
structure of international jurisprudence.
The reasonable, if not the necessary, conclusion appears to us to be that judgments rendered in
France, or in any other foreign country by the laws of which our own judgments are reviewable
upon the merits are not entitled to full credit and conclusive effect when sued upon in this
country, but are prima facie evidence only of the justice of the plaintiffs' claim.
Page 159 U. S. 228
In holding such a judgment, for want of reciprocity, not to be conclusive evidence of the merits of
the claim, we do not proceed upon any theory of retaliation upon one person by reason of
injustice done to another, but upon the broad ground that international law is founded upon
mutuality and reciprocity, and that by the principles of international law recognized in most
civilized nations, and by the comity of our own country, which it is our judicial duty to known and
to declare, the judgment is not entitled to be considered conclusive.
By our law at the time of the adoption of the Constitution, a foreign judgment was considered
as prima facie evidence, and not conclusive. There is no statute of the United States, and no
treaty of the United States with France or with any other nation, which has changed that law or
has made any provision upon the subject. It is not to be supposed that if any statute or treaty
had been or should be made, it would recognize as conclusive the judgments of any country
which did not give like effect to our own judgments. In the absence of statute or treaty, it appears
to us equally unwarrantable to assume that the comity of the United States requires anything
more.
If we should hold this judgment to be conclusive, we should allow it an effect to which, supposing
the defendants' offers to be sustained by actual proof, it would, in the absence of a special
treaty, be entitled in hardly any other country in Christendom except the country in which it was
rendered. If the judgment had been rendered in this country, or in any other outside of the
jurisdiction of France, the French courts would not have executed or enforced it except after
examining into its merits. The very judgment now sued on would be held inconclusive in almost
any other country than France. In England and in the colonies subject to the law of England, the
fraud alleged in its procurement would be a sufficient ground for disregarding it. In the courts of
nearly every other nation, it would be subject to reexamination either merely because it was a
foreign judgment or because judgments of that nation would be reexaminable in the courts of
France.
66 | C o n f l i c t o f L a w s C a s e s
Page 159 U. S. 229
For these reasons, in the action at law, the
Judgment is reversed, and the cause remanded to the circuit court, with directions to set aside
the verdict and to order a new trial.
For the same reasons, in the suit in equity between these parties, the foreign judgment is not a
bar, and therefore the
Decree dismissing the bill is reversed the plea adjudged bad, and the cause remanded to the
circuit court for further proceedings not inconsistent with this opinion.
* Bartlet v. Knight (1805), 1 Mass. 401, 405; Buttrick v. Allen (1811), 8 Mass. 273; Bissell v.
Briggs (1813), 9 Mass. 462, 464; Hall v. Williams (1828), 6 Pick. 232, 238; Gleason v.
Dodd (1842), 4 Met. 333, 336; Wood v. Gamble (1853), 11 Cush. 8; McKim v. Odom (1835), 12
Me. 94, 96; Bank v. Butman (1848), 29 Me. 19, 21; Bryant v. Ela (1815), Smith 396,
404; Thurber v. Blackbourne (1818), 1 N.H. 242; Robinson v. Prescott (1828), 4 N.H. 450; Taylor
v. Barron (1855), 10 Fost. 78, 95; King v. Van Gilder (1791), 1 D.Chip. 59; Rathbone v.
Terry (1837), 1 R.I. 73, 76; Aldrich v. Kinney (1822), 4 Conn. 380, 382; Hitchcock v.
Aicken(1803), 1 Caines 460; Smith v. Lewis (1808), 3 Johns. 157, 159; Taylor v. Bryden (1811),
8 Johns. 173; Andrews v. Montgomery(1821), 19 Johns. 162, 165; Starbuck v. Murray (1830), 5
Wend. 148, 155; Benton v. Burgot (1823), 10 S. & R. 240-242; Barney v. Patterson (1824), 6 H.
& J. 182, 202, 203; Taylor v. Phelps (1827), 1 H. & G. 492, 503; Rogers v. Coleman (1808),
Hardin 413-414; Williams v. Preston (1830), 3 J. J. Marsh. 600, 601.
MR. CHIEF JUSTICE FULLER, with whom concurred MR. JUSTICE HARLAN, MR. JUSTICE
BREWER, and MR. JUSTICE JACKSON, dissenting.
Plaintiffs brought their action on a judgment recovered by them against the defendants in the
courts of France, which courts had jurisdiction over person and subject matter, and in respect of
which judgment no fraud was alleged, except in particulars contested in and considered by the
French courts. The question is whether, under these circumstances and in the absence of a
treaty or act of Congress, the judgment is reexaminable upon the merits. This question I regard
as one to be determined by the ordinary and settled rule in respect of allowing a party who has
had an opportunity to prove his case in a competent court to retry it on the merits, and it seems
to me that the doctrine of res judicata applicable to domestic judgments should be applied to
foreign judgments as well, and rests on the same general ground of public policy -- that there
should be an end of litigation.
This application of the doctrine is in accordance with our own jurisprudence, and it is not
necessary that we should hold it to be required by some rule of international law. The
fundamental principle concerning judgments is that disputes are finally determined by them, and
I am unable to perceive why a judgment in personam, which is not open to question on the
ground of want of jurisdiction, either intrinsically or over the parties, or of fraud, or on any other
recognized ground of impeachment, should not be held, inter partes, though recovered abroad,
conclusive on the merits.
Page 159 U. S. 230
Judgments are executory while unpaid, but in this country, execution is not given upon a foreign
judgment as such, it being enforced through a new judgment obtained in an action brought for
that purpose.
The principle that requires litigation to be treated as terminated by final judgment, properly
rendered, is as applicable to a judgment proceeded on in such an action as to any other, and
forbids the allowance to the judgment debtor of a retrial of the original cause of action, as of
right, in disregard of the obligation to pay arising on the judgment, and of the rights acquired by
the judgment creditor thereby.
That any other conclusion is inadmissible is forcibly illustrated by the case in hand. Plaintiffs in
error were trading copartners in Paris as well as in New York, and had a place of business in
Paris at the time of these transactions and of the commencement of the suit against them in
France. The subjects of the suit were commercial transactions, having their origin, and partly
performed, in France under a contract there made, and alleged to be modified by the dealings of
the parties there, and one of the claims against them was for goods sold to them there. They
appeared generally in the case, without protest, and by counterclaims relating to the same
general course of business, a part of them only connected with the claims against them, became
actors in the suit, and submitted to the courts their own claims for affirmative relief, as well as the
claims against them. The courts were competent, and they took the chances of a decision in
their favor. As traders in France, they were under the protection of its laws, and were bound by
its laws, its commercial usages, and its rules of procedure. The fact that they were Americans
and the opposite parties were citizens of France is immaterial, and there is no suggestion on the
record that those courts proceeded on any other ground than that all litigants, whatever their
nationality, were entitled to equal justice therein. If plaintiffs in error had succeeded in their
cross-suit and recovered judgment against defendants in error, and had sued them here on that
judgment, defendants in error would not have been permitted to say that the judgment in France
was
Page 159 U. S. 231
not conclusive against them. As it was, defendants in error recovered, and I think plaintiffs in
error are not entitled to try their fortune anew before the courts of this country on the same
matters voluntarily submitted by them to the decision of the foreign tribunal. We are dealing with
the judgment of a court of a civilized country, whose laws and system of justice recognize the
general rules in respect to property and rights between man and man prevailing among all
civilized peoples. Obviously the last persons who should be heard to complain are those who
identified themselves with the business of that country, knowing that all their transactions there
would be subject to the local laws and modes of doing business. The French courts appear to
have acted "judicially, honestly, and with the intention to arrive at the right conclusion," and a
result thus reached ought not to be disturbed.
The following view of the rule in England was expressed by Lord Herschell in Nouvion v.
Freeman, L.R. 15 App.Cas. 1, 9, quoted in the principal opinion:
"The principle upon which I think our enforcement of foreign judgments must proceed is this, that
in a court of competent jurisdiction, where, according to its established procedure, the whole
merits of the case were open at all events, to the parties, however much they may have failed to
take advantage of them or may have waived any of their rights, a final adjudication has been
given that a debt or obligation exists, which cannot thereafter in that court be disputed, and can
only be questioned in an appeal to a higher tribunal. In such a case, it may well be said that,
67 | C o n f l i c t o f L a w s C a s e s
giving credit to the court of another country, we are prepared to take the fact that such
adjudication has been made as establishing the existence of the debt or obligation."
But in that connection, the observations made by Mr. Justice Blackburn in Godard v. Gray, L.R.
6 Q.B. 139, 148, and often referred to with approval, may usefully again be quoted:
"It is not an admitted principle of the law of nations that a state is bound to enforce within its
territories the judgments of a foreign tribunal. Several of the continental nations (including
France) do not enforce the judgments of other countries
Page 159 U. S. 232
unless where there are reciprocal treaties to that effect. But in England and in those states which
are governed by the common law, such judgments are enforced not by virtue of any treaty nor
by virtue of any statute, but upon a principle very well stated by Parke, B., in Williams v.
Jones, 13 M. & W. 633:"
"Where a court of competent jurisdiction had adjudicated a certain sum to be due from one
person to another, a legal obligation arises to pay that sum, on which an action of debt to
enforce the judgment may be maintained. It is in this way that the judgments of foreign and
colonial courts are supported and enforced."
"And taking this as the principle, it seems to follow that anything which negatives the existence
of that legal obligation, or excuses the defendant from the performance of it, must form a good
defense to the action. It must be open, therefore, to the defendant to show that the court which
pronounced the judgment had not jurisdiction to pronounce it, either because they exceeded the
jurisdiction given to them by the foreign law or because he, the defendant, was not subject to
that jurisdiction, and so far the foreign judgment must be examinable. Probably the defendant
may show that the judgment was obtained by the fraud of the plaintiff, for that would show that
the defendant was excused from the performance of an obligation thus obtained, and it may be
that where the foreign court has knowingly and perversely disregarded the rights given to an
English subject by English law, that forms a valid excuse for disregarding the obligation thus
imposed on him; but we prefer to imitate the caution of the present lord Chancellor in Castrique
v. Imrie, L.R. 4 H.L. 445, and to leave those questions to be decided when they arise, only
observing in the present case, as in that:"
"The whole of the facts appear to have been inquired into by the French courts judicially,
honestly, and with the intention to arrive at the right conclusion; and, having heard the facts as
stated before them, they came to a conclusion which justified them in France in deciding as they
did decide. . . ."
"Indeed, it is difficult to understand how the common course of pleading is consistent with any
notion that the judgment was only evidence. If that were so, every count on a
Page 159 U. S. 233
foreign judgment must be demurrable on that ground. The mode of pleading shows that the
judgment was considered not as merely prima facie evidence of that cause of action for which
the judgment was given, but as in itself giving rise at least prima facie to a legal obligation to judgments recovered in countries where our own judgments are not given full effect, on that
obey that judgment and pay the sum adjudged. This may seem a technical mode of dealing with ground merely.
the question, but in truth it goes to the root of the matter, for if the judgment were merely
considered as evidence of the original cause of action, it must be open to meet it by any counter
I cannot yield my assent to the proposition that, because by legislation and judicial decision in
evidence negativing the existence of that original cause of action. If, on the other hand, there is
France, that effect is not there given to judgments recovered in this country which, according to
a prima facie obligation to obey the judgment of a tribunal having jurisdiction over the party and
our jurisprudence, we think should be given to judgments wherever recovered (subject, of
the cause, and to pay the sum decreed, the question would be whether it was open to the
course, to the recognized exceptions), therefore we should pursue the same line of conduct as
unsuccessful party to try the cause over again in a court not sitting as a court of appeal from that
respects the judgments of French tribunals. The application of the doctrine of res judicata does
which gave the judgment. It is quite clear that this could not be done where the action is brought
not rest in discretion, and it is for the government, and not for its courts, to adopt the principle of
on the judgment of an English tribunal, and, on principle, it seems the same rule should apply
retorsion, if deemed under any circumstances desirable or necessary.
where it is brought on that of a foreign tribunal."

As the court expressly abstains from deciding whether the judgment is impeachable on the
In any aspect, it is difficult to see why rights acquired under foreign judgments do not belong to
ground of fraud, I refrain from any observations on that branch of the case.
the category of private rights acquired under foreign laws. Now the rule is universal in this
country that private rights acquired under the laws of foreign states will be respected and
enforced in our courts unless contrary to the policy or prejudicial to the interests of the state Page 159 U. S. 235
where this is sought to be done, and, although the source of this rule may have been the comity
characterizing the intercourse between nations, it prevails today by its own strength, and the
MR. JUSTICE HARLAN, MR. JUSTICE BREWER, and MR. JUSTICE JACKSON concur in this
right to the application of the law to which the particular transaction is subject is a juridical right.
dissent.

And without going into the refinements of the publicists on the subject, it appears to me that that
G.R. No. 122191 October 8, 1998
law finds authoritative expression in the judgments of courts of competent jurisdiction over
parties and subject matter.
SAUDI ARABIAN AIRLINES, petitioner,
vs.
It is held by the majority of the court that defendants cannot be permitted to contest the validity
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his
and effect of this judgment on the general ground that it was erroneous in law
capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon
City, respondents.
Page 159 U. S. 234

or in fact and the special grounds relied on are seriatim rejected. In respect of the last of these --
that of fraud -- it is said that it is unnecessary in this case to decide whether certain decisions
QUISUMBING, J.:
cited in regard to impeaching foreign judgments for fraud could be followed consistently with our
own decisions as to impeaching domestic judgments for that reason,
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set aside
the Resolution1dated September 27, 1995 and the Decision2 dated April 10, 1996 of the
"because there is a distinct and independent ground upon which we are satisfied that the comity
Court of Appeals3 in CA-G.R. SP No. 36533,4 and the Orders5 dated August 29, 1994 6 and
of our nation does not require us to give conclusive effect to the judgments of the courts of
February 2, 19957 that were issued by the trial court in Civil Case No. Q-93-18394.8
France, and that ground is the want of reciprocity on the part of France as to the effect to be
given to the judgments of this and other foreign countries."
The pertinent antecedent facts which gave rise to the instant petition, as stated in the
questioned Decision9, are as follows:
And the conclusion is announced to be

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

"that judgments rendered in France or in any other foreign country by the laws of which our own
Attendant for its airlines based in Jeddah, Saudi Arabia. . . .
judgments are reviewable upon the merits are not entitled to full credit and conclusive effect
when sued upon in this country, but are prima facie evidence only of the justice of the plaintiff's
claim." On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff
went to a disco dance with fellow crew members Thamer Al-Gazzawi
and Allah Al-Gazzawi, both Saudi nationals. Because it was almost
In other words, that, although no special ground exists for impeaching the original justice of a
morning when they returned to their hotels, they agreed to have
judgment, such as want of jurisdiction or fraud, the right to retry the merits of the original cause
breakfast together at the room of Thamer. When they were in te (sic)
at large, defendant being put upon proving those merits, should be accorded in every suit on

68 | C o n f l i c t o f L a w s C a s e s
 room, Allah left on some pretext. Shortly after he did, Thamer
attempted to rape plaintiff. Fortunately, a roomboy and several
security personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi,
the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA
officials interrogated her about the Jakarta incident. They then
requested her to go back to Jakarta to help arrange the release of
Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and
base manager Baharini negotiated with the police for the immediate
release of the detained crew members but did not succeed because
plaintiff refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to understand
the local dialect. She also declined to sign a blank paper and a
document written in the local dialect. Eventually, SAUDIA allowed
plaintiff to return to Jeddah but barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDI (sic). In September 1990, defendant
SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors requested her to see
Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi
Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and
allowed her to catch the afternoon flight out of Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a
few minutes before the departure of her flight to Manila, plaintiff was
not allowed to board the plane and instead ordered to take a later flight
to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When
she did, a certain Khalid of the SAUDIA office brought her to a Saudi
court where she was asked to sign a document written in Arabic. They
told her that this was necessary to close the case against Thamer and
Allah. As it turned out, plaintiff signed a notice to her to appear before
the court on June 27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to
Jeddah once again and see Miniewy on June 27, 1993 for further
investigation. Plaintiff did so after receiving assurance from SAUDIA's
Manila manager, Aslam Saleemi, that the investigation was routinary
and that it posed no danger to her.
69 | C o n f l i c t o f L a w s C a s e s
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi
court on June 27, 1993. Nothing happened then but on June 28, 1993, a
Saudi judge interrogated plaintiff through an interpreter about the
Jakarta incident. After one hour of interrogation, they let her go. At the
airport, however, just as her plane was about to take off, a SAUDIA
officer told her that the airline had forbidden her to take flight. At the
Inflight Service Office where she was told to go, the secretary of Mr.
Yahya Saddick took away her passport and told her to remain in
Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the
same court where the judge, to her astonishment and shock, rendered
a decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the
Saudi court had tried her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
going to a disco, dancing and listening to the music in violation of
Islamic laws; and (3) socializing with the male crew, in contravention
of Islamic tradition. 10
Facing conviction, private respondent sought the help of her employer, petitioner
SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine
Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her
upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued
to serve in the international
flights. 11
Because she was wrongfully convicted, the Prince of Makkah dismissed the case against
her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, 12 she was
terminated from the service by SAUDIA, without her being informed of the cause.
On November 23, 1993, Morada filed a Complaint 13 for damages against SAUDIA, and
Khaled Al-Balawi ("Al-Balawi"), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the
following grounds, to wit: (1) that the Complaint states no cause of action against Saudia;
(2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set
forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4)
that the trial court has no jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) 15. Saudia filed
a reply 16 thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi was dropped
as party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to
Dismiss Amended Complaint 18.
The trial court issued an Order 19 dated August 29, 1994 denying the Motion to Dismiss
Amended Complaint filed by Saudia.
From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA filed on
September 20, 1994, its Motion for Reconsideration 21 of the Order dated August 29, 1994.
It alleged that the trial court has no jurisdiction to hear and try the case on the basis of
Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of
Saudi Arabia. On October 14, 1994, Morada filed her Opposition 22(To Defendant's Motion
for Reconsideration).
In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its
Motion for Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus
Motion Rule does not apply, even if that ground is raised for the first time on appeal.
Additionally, SAUDIA alleged that the Philippines does not have any substantial interest
in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the
same.
Respondent Judge subsequently issued another Order 24 dated February 2, 1995, denying
SAUDIA's Motion for Reconsideration. The pertinent portion of the assailed Order reads
as follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian
Airlines filed, thru counsel, on September 20, 1994, and the Opposition
thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well
as the Reply therewith of defendant Saudi Arabian Airlines filed, thru
counsel, on October 24, 1994, considering that a perusal of the
plaintiffs Amended Complaint, which is one for the recovery of actual,
moral and exemplary damages plus attorney's fees, upon the basis of
the applicable Philippine law, Article 21 of the New Civil Code of the
Philippines, is, clearly, within the jurisdiction of this Court as regards
the subject matter, and there being nothing new of substance which
might cause the reversal or modification of the order sought to be
reconsidered, the motion for reconsideration of the defendant, is
DENIED.
SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary
Restraining Order 26 with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with Temporary Restraining
Order 27 dated February 23, 1995, prohibiting the respondent Judge from further
conducting any proceeding, unless otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate
court denied SAUDIA's Petition for the Issuance of a Writ of Preliminary Injunction dated
February 18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction is
hereby DENIED, after considering the Answer, with Prayer to Deny
Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder, it
70 | C o n f l i c t o f L a w s C a s e s
appearing that herein petitioner is not clearly entitled thereto (Unciano
Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335, April
7, 1993, Second Division).
SO ORDERED.
29
On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition for
Review with Prayer for Temporary Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of Appeals
rendered the Decision 30dated April 10, 1996, now also assailed. It ruled that the
Philippines is an appropriate forum considering that the Amended Complaint's basis for
recovery of damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in
a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to
trial, and in case of an adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for
Temporary Restraining Order 31 dated April 30, 1996, given due course by this Court. After
both parties submitted their Memoranda, 32 the instant case is now deemed submitted for
decision.
Petitioner SAUDIA raised the following issues:
I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-
18394 based on Article 21 of the New Civil Code since the proper law
applicable is the law of the Kingdom of Saudi Arabia inasmuch as this
case involves what is known in private international law as a "conflicts
problem". Otherwise, the Republic of the Philippines will sit in
judgment of the acts done by another sovereign state which is
abhorred.
II
Leave of court before filing a supplemental pleading is not a
jurisdictional requirement. Besides, the matter as to absence of leave
of court is now moot and academic when this Honorable Court
required the respondents to comment on petitioner's April 30, 1996
Supplemental Petition For Review With Prayer For A Temporary
Restraining Order Within Ten (10) Days From Notice Thereof. Further,
the Revised Rules of Court should be construed with liberality
pursuant to Section 2, Rule 1 thereof.
III
 Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-
G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon. Rodolfo A.
Ortiz, et al." and filed its April 30, 1996 Supplemental Petition For
Review With Prayer For A Temporary Restraining Order on May 7, 1996
at 10:29 a.m. or within the 15-day reglementary period as provided for
under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the
decision in CA-G.R. SP NO. 36533 has not yet become final and
executory and this Honorable Court can take cognizance of this
case. 33
From the foregoing factual and procedural antecedents, the following issues emerge for
our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING
THAT THE REGIONAL TRIAL COURT OF QUEZON CITY HAS
JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-18394
ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES".
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING
THAT IN THIS CASE PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the
outset. It maintains that private respondent's claim for alleged abuse of rights occurred in
the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies
the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of
the lex loci delicti commissi rule. 34
On the other hand, private respondent contends that since her Amended Complaint is
based on Articles 19 35 and 21 36 of the Civil Code, then the instant case is properly a
matter of domestic law. 37
Under the factual antecedents obtaining in this case, there is no dispute that the interplay
of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint 38 dated June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign
airlines corporation doing business in the Philippines. It may be
served with summons and other court processes at Travel Wide
Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero
St., Salcedo Village, Makati, Metro Manila.
xxx xxx xxx
71 | C o n f l i c t o f L a w s C a s e s
6. Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDIA. In September 1990, defendant SAUDIA
transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors reauested her to see
MR. Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi
Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and
allowed her to catch the afternoon flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal Officer
of SAUDIA. When she did, a certain Khalid of the SAUDIA office
brought her to a Saudi court where she was asked to sigh a document
written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993. Plaintiff then
returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report
to Jeddah once again and see Miniewy on June 27, 1993 for further
investigation. Plaintiff did so after receiving assurance from SAUDIA's
Manila manger, Aslam Saleemi, that the investigation was routinary
and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same
Saudi court on June 27, 1993. Nothing happened then but on June 28,
1993, a Saudi judge interrogated plaintiff through an interpreter about
the Jakarta incident. After one hour of interrogation, they let her go. At
the airport, however, just as her plane was about to take off, a SAUDIA
officer told her that the airline had forbidden her to take that flight. At
the Inflight Service Office where she was told to go, the secretary of
Mr. Yahya Saddick took away her passport and told her to remain in
Jeddah, at the crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to
the same court where the judge, to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to
five months imprisonment and to 286 lashes. Only then did she realize
that the Saudi court had tried her, together with Thamer and Allah, for
what happened in Jakarta. The court found plaintiff guilty of (1)
adultery; (2) going to a disco, dancing, and listening to the music in
 violation of Islamic laws; (3) socializing with the male crew, in Art. 21. Any person who willfully causes loss or injury to another in a
contravention of Islamic tradition. manner that is contrary to morals, good customs or public policy shall
compensate the latter for damages.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff
sought the help of the Philippines Embassy in Jeddah. The latter Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this Court held that:
helped her pursue an appeal from the decision of the court. To pay for
her upkeep, she worked on the domestic flights of defendant SAUDIA
The aforecited provisions on human relations were intended to expand
while, ironically, Thamer and Allah freely served the international
the concept of torts in this jurisdiction by granting adequate legal
flights. 39
remedy for the untold number of moral wrongs which is impossible for
human foresight to specifically provide in the statutes.
Where the factual antecedents satisfactorily establish the existence of a foreign element,
we agree with petitioner that the problem herein could present a "conflicts" case.
Although Article 19 merely declares a principle of law, Article 21 gives flesh to its
provisions. Thus, we agree with private respondent's assertion that violations of Articles
A factual situation that cuts across territorial lines and is affected by the diverse laws of 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum.
two or more states is said to contain a "foreign element". The presence of a foreign
element is inevitable since social and economic affairs of individuals and associations
Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of
are rarely confined to the geographic limits of their birth or conception. 40
Court on jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City
possesses jurisdiction over the subject matter of the suit. 48 Its authority to try and hear
The forms in which this foreign element may appear are many. 41 The foreign element may the case is provided for under Section 1 of Republic Act No. 7691, to wit:
simply consist in the fact that one of the parties to a contract is an alien or has a foreign
domicile, or that a contract between nationals of one State involves properties situated in
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as
another State. In other cases, the foreign element may assume a complex form. 42
the "Judiciary Reorganization Act of 1980", is hereby amended to read
as follows:
In the instant case, the foreign element consisted in the fact that private respondent
Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign
Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall
corporation. Also, by virtue of the employment of Morada with the petitioner Saudia as a
exercise exclusive jurisdiction:
flight stewardess, events did transpire during her many occasions of travel across
national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice
versa, that caused a "conflicts" situation to arise. xxx xxx xxx

We thus find private respondent's assertion that the case is purely domestic, imprecise. (8) In all other cases in which demand, exclusive of
A conflicts problem presents itself here, and the question of jurisdiction 43 confronts the interest, damages of whatever kind, attorney's fees,
court a quo. litigation expenses, and cots or the value of the
property in controversy exceeds One hundred
thousand pesos (P100,000.00) or, in such other
After a careful study of the private respondent's Amended Complaint, 44 and the Comment
cases in Metro Manila, where the demand, exclusive
thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the
of the above-mentioned items exceeds Two
New Civil Code.
hundred Thousand pesos (P200,000.00). (Emphasis
ours)
On one hand, Article 19 of the New Civil Code provides:
xxx xxx xxx
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice give everyone his due and
And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon
observe honesty and good faith.
City, is appropriate:

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

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

(a) xxx xxx xxx

72 | C o n f l i c t o f L a w s C a s e s
 (b) Personal actions. — All other actions may be commenced and tried
where the defendant or any of the defendants resides or may be found,
or where the plaintiff or any of the plaintiff resides, at the election of
the plaintiff.
Pragmatic considerations, including the convenience of the parties, also weigh heavily in
favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of
the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative
advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice
of an inconvenient forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting
upon him needless expense or disturbance. But unless the balance is strongly in favor of
the defendant, the plaintiffs choice of forum should rarely be disturbed. 49
Weighing the relative claims of the parties, the court a quo found it best to hear the case
in the Philippines. Had it refused to take cognizance of the case, it would be forcing
plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom
of Saudi Arabia where she no longer maintains substantial connections. That would have
caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of the
plaintiff (now private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the parties
herein. By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court.
50
The records show that petitioner SAUDIA has filed several motions praying for the
dismissal of Morada's Amended Complaint. SAUDIA also filed an Answer In Ex
Abundante Cautelam dated February 20, 1995. What is very patent and explicit from the
motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably,
petitioner SAUDIA has effectively submitted to the trial court's jurisdiction by praying for
the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.: 51
We observe that the motion to dismiss filed on April 14, 1962, aside
from disputing the lower court's jurisdiction over defendant's person,
prayed for dismissal of the complaint on the ground that plaintiff's
cause of action has prescribed. By interposing such second ground in
its motion to dismiss, Ker and Co., Ltd. availed of an affirmative
defense on the basis of which it prayed the court to resolve
controversy in its favor. For the court to validly decide the said plea of
defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction
upon the latter's person, who, being the proponent of the affirmative
defense, should be deemed to have abandoned its special appearance
and voluntarily submitted itself to the jurisdiction of the court.
When the appearance is by motion for the purpose of objecting to the
jurisdiction of the court over the person, it must be for the sole and
separate purpose of objecting to the jurisdiction of the court. If his
motion is for any other purpose than to object to the jurisdiction of the
court over his person, he thereby submits himself to the jurisdiction of
the court. A special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will be held to
be a general appearance, if the party in said motion should, for
example, ask for a dismissal of the action upon the further ground that
the court had no jurisdiction over the subject matter. 52
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon
City. Thus, we find that the trial court has jurisdiction over the case and that its exercise
thereof, justified.
As to the choice of applicable law, we note that choice-of-law problems seek to answer
two important questions: (1) What legal system should control a given situation where
some of the significant facts occurred in two or more states; and (2) to what extent
should the chosen legal system regulate the situation. 53
Several theories have been propounded in order to identify the legal system that should
ultimately control. Although ideally, all choice-of-law theories should intrinsically
advance both notions of justice and predictability, they do not always do so. The forum is
then faced with the problem of deciding which of these two important values should be
stressed. 54
Before a choice can be made, it is necessary for us to determine under what category a
certain set of facts or rules fall. This process is known as "characterization", or the
"doctrine of qualification". It is the "process of deciding whether or not the facts relate to
the kind of question specified in a conflicts rule." 55The purpose of "characterization" is
to enable the forum to select the proper law. 56
Our starting point of analysis here is not a legal relation, but a factual situation, event, or
operative fact. 57An essential element of conflict rules is the indication of a "test" or
"connecting factor" or "point of contact". Choice-of-law rules invariably consist of a
factual relationship (such as property right, contract claim) and a connecting factor or
point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing. 58
Note that one or more circumstances may be present to serve as the possible test for the
determination of the applicable law. 59 These "test factors" or "points of contact" or
"connecting factors" could be any of the following:
(1) The nationality of a person, his domicile, his residence, his place of
sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;

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

73 | C o n f l i c t o f L a w s C a s e s
 (3) the situs of a thing, that is, the place where a thing is, or is deemed
to be situated. In particular, the lex situs is decisive when real rights
are involved;
(4) the place where an act has been done, the locus actus, such as the
place where a contract has been made, a marriage celebrated, a will
signed or a tort committed. The lex loci actus is particularly important
in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the
place of performance of contractual duties, or the place where a power
of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should
govern their agreement, thelex loci intentionis;
(7) the place where judicial or administrative proceedings are
instituted or done. The lex fori — the law of the forum — is particularly
important because, as we have seen earlier, matters of "procedure"
not going to the substance of the claim involved are governed by it;
and because the lex fori applies whenever the content of the otherwise
applicable foreign law is excluded from application in a given case for
the reason that it falls under one of the exceptions to the applications
of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all
legal relationships of the ship and of its master or owner as such. It
also covers contractual relationships particularly contracts of
affreightment. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including allegations in the Amended
Complaint deemed admitted for purposes of the motion to dismiss, we are convinced that
there is reasonable basis for private respondent's assertion that although she was
already working in Manila, petitioner brought her to Jeddah on the pretense that she
would merely testify in an investigation of the charges she made against the two SAUDIA
crew members for the attack on her person while they were in Jakarta. As it turned out,
she was the one made to face trial for very serious charges, including adultery and
violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the "handing over" or "turning
over" of the person of private respondent to Jeddah officials, petitioner may have acted
beyond its duties as employer. Petitioner's purported act contributed to and amplified or
even proximately caused additional humiliation, misery and suffering of private
respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution
of private respondent under the guise of petitioner's authority as employer, taking
advantage of the trust, confidence and faith she reposed upon it. As purportedly found by
the Prince of Makkah, the alleged conviction and imprisonment of private respondent was
wrongful. But these capped the injury or harm allegedly inflicted upon her person and
reputation, for which petitioner could be liable as claimed, to provide compensation or
redress for the wrongs done, once duly proven.
74 | C o n f l i c t o f L a w s C a s e s
Considering that the complaint in the court a quo is one involving torts, the "connecting
factor" or "point of contact" could be the place or places where the tortious conduct
or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that
the Philippines could be said as a situs of the tort (the place where the alleged tortious
conduct took place). This is because it is in the Philippines where petitioner allegedly
deceived private respondent, a Filipina residing and working here. According to her, she
had honestly believed that petitioner would, in the exercise of its rights and in the
performance of its duties, "act with justice, give her due and observe honesty and good
faith." Instead, petitioner failed to protect her, she claimed. That certain acts or parts of
the injury allegedly occurred in another country is of no moment. For in our view what is
important here is the place where the over-all harm or the totality of the alleged injury to
the person, reputation, social standing and human rights of complainant, had lodged,
according to the plaintiff below (herein private respondent). All told, it is not without basis
to identify the Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi,
modern theories and rules on tort liability 61 have been advanced to offer fresh judicial
approaches to arrive at just results. In keeping abreast with the modern theories on tort
liability, we find here an occasion to apply the "State of the most significant relationship"
rule, which in our view should be appropriate to apply now, given the factual context of
this case.
In applying said principle to determine the State which has the most significant
relationship, the following contacts are to be taken into account and evaluated according
to their relative importance with respect to the particular issue: (a) the place where the
injury occurred; (b) the place where the conduct causing the injury occurred; (c) the
domicile, residence, nationality, place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any, between the parties is centered. 62
As already discussed, there is basis for the claim that over-all injury occurred and lodged
in the Philippines. There is likewise no question that private respondent is a resident
Filipina national, working with petitioner, a resident foreign corporation engaged here in
the business of international air carriage. Thus, the "relationship" between the parties
was centered here, although it should be stressed that this suit is not based on mere
labor law violations. From the record, the claim that the Philippines has the most
significant contact with the matter in this dispute, 63 raised by private respondent as
plaintiff below against defendant (herein petitioner), in our view, has been properly
established.
Prescinding from this premise that the Philippines is the situs of the tort complained of
and the place "having the most interest in the problem", we find, by way of recapitulation,
that the Philippine law on tort liability should have paramount application to and control
in the resolution of the legal issues arising out of this case. Further, we hold that the
respondent Regional Trial Court has jurisdiction over the parties and the subject matter
of the complaint; the appropriate venue is in Quezon City, which could properly apply
Philippine law. Moreover, we find untenable petitioner's insistence that "[s]ince private
respondent instituted this suit, she has the burden of pleading and proving the applicable
Saudi law on the matter." 64As aptly said by private respondent, she has "no obligation to
plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is
based on Articles 19 and 21" of the Civil Code of the Philippines. In her Amended
Complaint and subsequent pleadings, she never alleged that Saudi law should govern
this case. 65 And as correctly held by the respondent appellate court, "considering that it
was the petitioner who was invoking the applicability of the law of Saudi Arabia, then the
burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is". 66
Lastly, no error could be imputed to the respondent appellate court in upholding the trial
court's denial of defendant's (herein petitioner's) motion to dismiss the case. Not only
was jurisdiction in order and venue properly laid, but appeal after trial was obviously
available, and expeditious trial itself indicated by the nature of the case at hand.
Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of
the case below, not just for the benefit of all the litigants, but also for the vindication of
the country's system of law and justice in a transnational setting. With these guidelines in
mind, the trial court must proceed to try and adjudge the case in the light of relevant
Philippine law, with due consideration of the foreign element or elements involved.
Nothing said herein, of course, should be construed as prejudging the results of the case
in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-
18394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is hereby REMANDED to
Regional Trial Court of Quezon City, Branch 89 for further proceedings.
SO ORDERED.
G.R. No. 72494 August 11, 1989
HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE INTERMEDIATE APPELLATE
COURT, respondents.
Quiason, Makalintal, Barot & Torres for petitioner.
Alejandro, Aranzaso & Associates for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the Intermediate Appellate Court (now
Court of Appeals) 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.
A complaint for collection of a sum of money (pp. 49-52, Rollo) was filed by petitioner Hongkong
and Shanghai Banking Corporation (hereinafter referred to as petitioner BANK) against private
respondents Jack Robert Sherman and Deodato Reloj, docketed as Civil Case No. Q-42850
before the Regional Trial Court of Quezon City, Branch 84.
75 | C o n f l i c t o f L a w s C a s e s
It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (hereinafter referred
to as COMPANY), 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 dollars 375,000.00)
with interest at 3% over petitioner BANK prime rate, payable monthly, on amounts due under
said overdraft facility; as a security for the repayment by the COMPANY of sums 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 (p. 53, Rollo) 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 aforestated 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 over all disputes arising
under this guarantee. ... (p. 33-A, Rollo).
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
above-mentioned complaint.
On December 14,1984, private respondents filed a motion to dismiss (pp 54-56, Rollo) which
was opposed by petitioner BANK (pp. 58-62, Rollo). Acting on the motion, the trial court issued
an order dated February 28, 1985 (pp, 64-65, Rollo), 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.
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
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,
 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.
SO ORDERED.
A motion for reconsideration of the said order was filed by private respondents which was,
however, denied (p. 66,Rollo).
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
(pp. 39-48, Rollo). On August 2, 1985, the respondent Court rendered a decision (p. 37, Rollo),
the dispositive portion of which reads:
WHEREFORE, the petition for prohibition with preliminary injuction is
hereby GRANTED. The respondent Court is enjoined from taking further
cognizance of the case and to dismiss the same for filing with the proper
court of Singapore which is the proper forum. No costs.
SO ORDERED.
The motion for reconsideration was denied (p. 38, Rollo), hence, the present petition.
The main issue is whether or not Philippine courts have jurisdiction over the suit.
The controversy stems from the interpretation of a provision in the Joint and Several Guarantee,
to wit:
(14) This guarantee and all rights, obligations and liabilites 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. ... (p. 53-A, Rollo)
76 | C o n f l i c t o f L a w s C a s e s
In rendering the decision in favor of private respondents, the Court of Appeals made, the
following observations (pp. 35-36, Rollo):
There are significant aspects of the case to which our attention is invited.
The loan was obtained by Eastern Book Service PTE, Ltd., a company
incorporated in Singapore. The loan was granted by the Singapore Branch
of Hongkong and Shanghai Banking Corporation. The Joint and Several
Guarantee was also concluded in Singapore. The loan was in Singaporean
dollars and the repayment thereof also in the same currency. The
transaction, to say the least, took place in Singporean setting in which the
law of that country is the measure by which that relationship of the parties
will be governed.
xxx xxx xxx
Contrary to the position taken by respondents, the guarantee agreement
compliance that any litigation will be before the courts of Singapore and that
the rights and obligations of the parties shall be construed and determined
in accordance with the laws of the Republic of Singapore. A closer
examination of paragraph 14 of the Guarantee Agreement upon which the
motion to dismiss is based, employs in clear and unmistakeable (sic) terms
the word 'shall' which under statutory construction is mandatory.
Thus it was ruled that:
... the word 'shall' is imperative, operating to impose a duty which may be
enforced (Dizon vs. Encarnacion, 9 SCRA 714).lâwphî1.ñèt
There is nothing more imperative and restrictive than what the agreement
categorically commands that '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.'
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 (J.
Salonga, Private International Law, 1981, p. 46). 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.
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. ... (p. 35, Rollo).

In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033, October 31, 1969, 30 SCRA
At any rate, this issue is now of no moment because We hold that venue here was properly laid
187, it was ruled:
for the same reasons discussed above.

... An accurate reading, however, of the stipulation, 'The parties agree to

The respondent Court likewise ruled that (pp. 36-37, Rollo):
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 ... In a conflict problem, a court will simply refuse to entertain the case if it is
words which would indicate that Manila and Manila alone is the venue are not authorized by law to exercise jurisdiction. And even if it is so authorized,
totally absent therefrom. We cannot read into that clause that plaintiff and it may still refuse to entertain the case by applying the principle of forum non
defendant bound themselves to file suits with respect to the last two conveniens. ...
transactions in question only or exclusively in Manila. For, that agreement
did not change or transfer venue. It simply is permissive. The parties solely
However, whether a suit should be entertained or dismissed on the basis of the principle
agreed to add the courts of Manila as tribunals to which they may resort.
of forum non conveniensdepends largely upon the facts of the particular case and is addressed
They did not waive their right to pursue remedy in the courts specifically
to the sound discretion of the trial court (J. Salonga, Private International Law, 1981, p.
mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur.
49).lâwphî1.ñèt Thus, the respondent Court should not have relied on such principle.

This ruling was reiterated in the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., et al.,
Although the Joint and Several Guarantee prepared by petitioner BANK is a contract of adhesion
G.R. No. 57250, October 30, 1981, 108 SCRA 740, where the stipulation was "[i]n case of
and that consequently, it cannot be permitted to take a stand contrary to the stipulations of the
litigation, jurisdiction shall be vested in the Court of Davao City." We held:
contract, substantial bases exist for petitioner Bank's choice of forum, as discussed earlier.

Anent the claim that Davao City had been stipulated as the venue, suffice it
Lastly, private respondents allege that neither the petitioner based at Hongkong nor its
to say that a stipulation as to venue does not preclude the filing of suits in
Philippine branch is involved in the transaction sued upon. This is a vain attempt on their part to
the residence of plaintiff or defendant under Section 2 (b), Rule 4, Rules of
further thwart the proceedings below inasmuch as well-known is the rule that a defendant cannot
Court, in the absence of qualifying or restrictive words in the agreement
plead any defense that has not been interposed in the court below.
which would indicate that the place named is the only venue agreed upon
by the parties.
ACCORDINGLY, the decision of the respondent Court is hereby REVERSED and the decision
of the Regional Trial Court is REINSTATED, with costs against private respondents. This
Applying the foregoing to the case at bar, the parties did not thereby stipulate that only the
decision is immediately executory.
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 SO ORDERED.
boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over
travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign
G.R. No. 18081 March 3, 1922
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 IN THE MATTER OF THE ESTATE OF CHEONG BOO, deceased.
it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought MORA ADONG, petitioner-appellant,
before them (J. Salonga, Private International Law, 1981, pp. 37-38).lâwphî1.ñèt vs.
CHEONG SENG GEE, opponent-appellant.
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: Kincaid, Perkins & Kincaid and P. J. Moore for petitioner-appellant.
Carlos A. Sobral for opponent-appellant.

77 | C o n f l i c t o f L a w s C a s e s
MALCOLM, J.:
The two question presented for determination by these appeals may be framed as follows: Is a
marriage contracted in China and proven mainly by an alleged matrimonial letter, valid in the
Philippines? Are the marriage performed in the Philippines according to the rites of the
Mohammedan religion valid? As the decision of the Supreme Court on the last point will affect
marriages consummated by not less than one hundred and fifty thousand Moros who profess the
Mohammedan faith, the transcendental importance of the cause can be realized. We proposed
to give to the subject the serious consideration which it deserves.
Cheong Boo, a native of China, died intestate in Zamboanga, Philippine Islands, on August 5,
1919. He left property worth nearly P100,000. The estate of the deceased was claimed, on the
one hand, by Cheong Seng Gee, who alleged that he was a legitimate child by a marriage
contracted by Cheong Boo with Tan Dit in China in 1895. The estate was claimed, on the other
hand, by the Mora Adong who alleged that she had been lawfully married to Cheong Boo in
1896 in Basilan, Philippine Islands, and her daughters, Payang, married to Cheng Bian Chay,
and Rosalia Cheong Boo, unmarried.
The conflicting claims to the estate of Cheong Boo were ventilated in the Court of First Instance
of Zamboanga. The trial judge, the Honorable Quirico Abeto, after hearing the evidence
presented by both sides, reached the conclusion, with reference to the allegations of Cheong
Seng Gee, that the proof did not sufficiently establish the Chinese marriage, but that because
Cheong Seng Gee had been admitted to the Philippine Islands as the son of the deceased, he
should share in the estate as a natural child. With reference to the allegations of the Mora Adong
and her daughters Payang and Rosalia, the trial judge reached the conclusion that the marriage
between the Mora Adong and the deceased had been adequately proved but that under the
laws of the Philippine Islands it could not be held to be a lawful marriage; accordingly, the
daughters Payang and Rosalia would inherit as natural children. The order of the trial judge,
following these conclusions, was that there should be a partition of the property of the deceased
Cheong Boo between the natural children, Cheong Seng Gee, Payang, and Rosalia.
From the judgment of the Judge of First Instance both parties perfected appeals. As to the facts,
we can say that we agree in substance with the findings of the trial court. As to the legal issues
submitted for decision by the numerous assignments of error, these can best be resolved under
two heads, namely: (1) The validity of the Chinese marriage; and (2) the validity of the
Mohammedan marriage.
1. Validity of the Chinese Marriage
The theory advanced on behalf of the claimant Cheong Seng Gee was that Cheong Boo was
married in the city of Amoy, China, during the second moon of the twenty-first year of the
Emperor Quang Su, or, according to the modern count, on February 16, 1985, to a young lady
named Tan Dit. Witnesses were presented who testified to having been present at the marriage
ceremony. There was also introduced in evidence a document in Chinese which in translation
reads as follows:
One hundred years Your nephew, Tan Chao, respecfully answers the
of life and health for venerable Chiong Ing, father of the bridegroom,
78 | C o n f l i c t o f L a w s C a s e s
both. accepting his offer of marriage, and let this document
serve as proof of the acceptance of said marriage
which is to be celebrated during the merry season of
the flowers.
I take advantage of this occasion to wish for your and
the spouses much happiness, a long life, and prolific
issue, as noble and great as that which you brought
forth. I consider the marriage of your son Boo with my
sister Lit Chia as a mandate of God and I hope that
they treat each other with great love and mutual
courtesy and that both they and their parents be very
happy.
Given during the second moon of the twenty-first year
of the reign of the Emperor Quang Su.
Cheong Boo is said to have remained in China for one year and four months after his marriage
during which time there was born to him and his wife a child named Cheong Seng Gee. Cheong
Boo then left China for the Philippine Islands and sometime thereafter took to himself a
concubine Mora by whom he had two children. In 1910, Cheong Boo was followed to the
Philippines by Cheong Seng Gee who, as appears from documents presented in evidence, was
permitted to land in the Philippine Islands as the son of Cheong Boo. The deceased, however,
never returned to his native hearth and seems never to have corresponded with his Chinese wife
or to have had any further relations with her except once when he sent her P10.
The trial judge found, as we have said, that the proof did not sustain the allegation of the
claimant Cheong Seng Gee, that Cheong Boo had married in China. His Honor noted a strong
inclination on the part of the Chinese witnesses, especially the brother of Cheong Boo, to protect
the interests of the alleged son, Cheong Seng Gee, by overstepping the limits of truthfulness.
His Honor also noted that reliable witnesses stated that in the year 1895, when Cheong Boo was
supposed to have been in China, he was in reality in Jolo, in the Philippine Islands. We are not
disposed to disturb this appreciation of fact by the trial court. The immigration documents only go
to show the relation of parent and child existing between the deceased Cheong Boo and his son
Cheong Seng Gee and do not establish the marriage between the deceased and the mother of
Cheong Seng Gee.
Section IV of the Marriage Law (General Order No. 68) provides that "All marriages contracted
without these Islands, which would be valid by the laws of the country in which the same were
contracted, are valid in these Islands." To establish a valid foreign marriage pursuant to this
comity provision, it is first necessary to prove before the courts of the Islands the existence of
the foreign law as a question of fact, and it is then necessary to prove the alleged foreign
marriage by convincing evidence.
As a case directly in point is the leading one of Sy Joc Lieng vs. Encarnacion ([1910]), 16 Phil.,
137; [1913], 228 U.S., 335). Here, the courts of the Philippines and the Supreme Court of the
United States were called upon to decide, as to the conflicting claims to the estate of a Chinese
merchant, between the descendants of an alleged Chinese marriage and the descendants of an
alleged Philippine marriage. The Supreme Courts of the Philippine Islands and the United States
united in holding that the Chinese marriage was not adequately proved. The legal rule was fact that a marriage was contracted by the Chinaman Cheong Boo and the Mora Adong,
stated by the United States Supreme Court to be this: A Philippine marriage, followed by forty according to the ceremonies of the Mohammedan religion.
years of uninterrupted marital life, should not be impugned and discredited, after the death of the
husband and administration of his estate, though an alleged prior Chinese marriage, "save upon
It is next incumbent upon us to approach the principal question which we announced in the very
proof so clear, strong, and unequivocal as to produce a moral conviction of the existence of such
beginning of this decision, namely, Are the marriages performed in the Philippines according to
impediment." Another case in the same category is that of Son Cui vs. Guepangco ([1912], 22
the rites of the Mohammedan religion valid? Three sections of the Marriage Law (General Order
Phil., 216).
No. 68) must be taken into consideration.

In the case at bar there is no competent testimony as to what the laws of China in the Province
of Amoy concerning marriage were in 1895. As in the Encarnacion case, there is lacking proof
so clear, strong, and unequivocal as to produce a moral conviction of the existence of the
alleged prior Chinese marriage. Substitute twenty-three years for forty years and the two cases
are the same.
The lower court allowed the claimant, Cheong Seng Gee, the testamentary rights of an
acknowledged natural child. This finding finds some support in Exhibit 3, the affidavit of Cheong
Boo before the American Vice-Consul at Sandakan, British North Borneo. But we are not called
upon to make a pronouncement on the question, because the oppositor-appellant indicates
silent acquiescence by assigning no error.
2. Validity of the Mohammedan Marriage
Section V of the Marriage Law provides that "Marriage may be solemnized by either a judge of
any court inferior to the Supreme Court, justice of the peace, or priest or minister of the Gospel
of any denomination . . ." Counsel, failing to take account of the word "priest," and only
considering the phrase "minister of the Gospel of any denomination" would limit the meaning of
this clause to ministers of the Christian religion. We believe this is a strained interpretation.
"Priest," according to the lexicographers, means one especially consecrated to the service of a
divinity and considered as the medium through whom worship, prayer, sacrifice, or other service
is to be offered to the being worshipped, and pardon, blessing, deliverance, etc., obtained by the
worshipper, as a priest of Baal or of Jehovah; a Buddhist priest. "Minister of the Gospel" means
all clergymen of every denomination and faith. A "denomination" is a religious sect having a
particular name. (Haggin vs. Haggin [1892], 35 Neb., 375; In re Reinhart, 9 O. Dec., 441;
Hale vs. Everett [1868], 53 N. H. 9.) A Mohammedan Iman is a "priest or minister of the Gospel,"
and Mohammedanism is a "denomination," within the meaning of the Marriage Law.

The following section of the Marriage Law, No. VI, provides that "No particular form for the
The biographical data relating to the Philippine odyssey of the Chinaman Cheong Boo is fairly
ceremony of marriage is required, but the parties must declare, in the presence of the person
complete. He appears to have first landed on Philippine soil sometime prior to the year 1896. At
solemnizing the marriage, that they take each other as husband and wife." The law is quite
least, in the year las mentioned, we find him in Basilan, Philippine Islands. There he was married
correct in affirming that no precise ceremonial is indispensable requisite for the creation of the
to the Mora Adong according to the ceremonies prescribed by the book on marriage of the
marriage contract. The two essentials of a valid marriage are capacity and consent. The latter
Koran, by the Mohammedan Iman (priest) Habubakar. That a marriage ceremony took place is
element may be inferred from the ceremony performed, the acts of the parties, and habit or
established by one of the parties to the marriage, the Mora Adong, by the Iman who solemnized
repute. In this instance, there is no question of capacity. Nor do we think there can exist any
the marriage, and by other eyewitnesses, one of whom was the father of the bride, and another,
doubt as to consent. While it is true that during the Mohammedan ceremony, the remarks of the
the chief of the rancheria, now a municipal councilor. The groom complied with Quranic law by
priest were addressed more to the elders than to the participants, it is likewise true that the
giving to the bride a dowry of P250 in money and P250 in goods.
Chinaman and the Mora woman did in fact take each other to be husband and wife and did
thereafter live together as husband and wife. (Travers vs. Reinhardt [1907], 205 U.S., 423.
The religious rites began with the bride and groom seating themselves in the house of the father
of the bride, Marahadja Sahibil. The Iman read from the Koran. Then the Iman asked the parents
It would be possible to leave out of view altogether the two sections of the Marriage Law which
if they had any objection to the marriage. The marital act was consummated by the groom
have just been quoted and discussed. The particular portion of the law which, in our opinion, is
entering the woman's mosquito net.
controlling, is section IX, reading as follows: "No marriage heretofore solemnized before any
person professing to have authority therefor shall be invalid for want of such authority or on
From the marriage day until the death of Cheong Boo, twenty-three years later, the Chinaman account of any informality, irregularity, or omission, if it was celebrated with the belief of the
and the Mora Adong cohabited as husband and wife. To them were born five children, two of parties, or either of them, that he had authority and that they have been lawfully married."
whom, Payang and Rosalia, are living. Both in his relations with Mora Adong and with third
persons during his lifetime, Cheong Boo treated Adong as his lawful wife. He admitted this
The trial judge in construing this provision of law said that he did not believe that the legislative
relationship in several private and public documents. Thus, when different legal documents were
intention in promulgating it was to validate marriages celebrated between Mohammedans. To
executed, including decrees of registration, Cheong Boo stated that he was married to the Mora
quote the judge:
Adong while as late as 1918, he gave written consent to the marriage of his minor daughter,
Payang.
This provisions relates to marriages contracted by virtue of the provisions of the
Spanish law before revolutionary authorized to solemnized marriages, and it is not to
Notwithstanding the insinuation of counsel for the Chinese appellant that the custom is prevalent
be presumed that the legislator intended by this law to validate void marriages
among the Moros to favor in their testimony, a relative or friend, especially when they do not
celebrated during the Spanish sovereignty contrary to the laws which then governed.
swear on the Koran to tell the truth, it seems to us that proof could not be more convincing of the

79 | C o n f l i c t o f L a w s C a s e s
What authority there is for this statement, we cannot conceive. To our mind, nothing could be
clearer than the language used in section IX. Note for a moment the all embracing words found
in this section:
"No marriage" — Could more inclusive words be found? "Heretofore solemnized" — Could any
other construction than that of retrospective force be given to this phrase? "Before any person
professing to have authority therefor shall be invalid for want of such authority" — Could
stronger language than this be invoked to announce legislative intention? "Or on account of any
informality, irregularity, or omission" — Could the legislative mind frame an idea which would
more effectively guard the marriage relation against technicality? "If it was celebrated with the
belief of the parties, or either of them, that he had authority and that they have been lawfully
married" — What was the purpose of the legislator here, if it was not to legalize the marriage, if it
was celebrated by any person who thought that he had authority to perform the same, and if
either of the parties thought that they had been married? Is there any word or hint of any word
which would restrict the curative provisions of section IX of the Marriage Law to Christian
marriages? By what system of mental gymnastics would it be possible to evolve from such
precise language the curious idea that it was restricted to marriages performed under the
Spanish law before the revolutionary authorities?
In view of the importance of the question, we do not desire to stop here but would ascertain from
other sources the meaning and scope of Section IX of General Order No. 68.
The purpose of the government toward the Mohammedan population of the Philippines has, time
and again, been announced by treaty, organic law, statutory law, and executive proclamation.
The Treaty of Paris in its article X, provided that "The inhabitants of the territories over which
Spain relinquishes or cedes her sovereignty shall be secured Instructions to the Philippine
Commission imposed on every branch of the Government of the Philippine Islands the inviolable
rule "that no law shall be made respecting an establishment of religion or prohibiting the free
exercise thereof, and that the free exercise and enjoyment of religious profession and worship,
without discrimination or preference, shall forever be allowed ... That no form of religion and no
minister of religion shall be forced upon any community or upon any citizen of the Islands; that,
upon the other hand, no minister of religion shall be interfered with or molested in following his
calling, and that the separation between state and church shall be real, entire, and absolute."
The notable state paper of President McKinley also enjoined the Commission, "to bear in mind
that the Government which they are establishing is designed . . . for the happiness, peace, and
prosperity of the people of the Philippine Islands" and that, therefore, "the measures adopted
should be made to conform to their customs, their habits, and even their prejudices. . . . The
Philippine Bill and the Jones Law reproduced the main constitutional provisions establishing
religious toleration and equality.
Executive and legislative policy both under Spain and the United States followed in the same
path. For instance, in the Treaty of April 30, 1851, entered into by the Captain General of the
Philippines and the Sultan of Sulu, the Spanish Government guaranteed "with all solemnity to
the Sultan and other inhabitants of Sulu the free exercise of their religion, with which it will not
interfere in the slightest way, and it will also respect their customs." (See further Decree of the
Governor-General of January 14, 1881.) For instance, Act No. 2520 of the Philippine
Commission, section 3, provided that "Judges of the Court of First Instance and justices of the
peace deciding civil cases in which the parties are Mohammedans or pagans, when such action
is deemed wise, may modify the application of the law of the Philippine Islands, except laws of
the United States applicable to the Philippine Islands, taking into account local laws and
customs. . . ." (See further Act No. 787, sec. 13 [ j]; Act No. 1283, sec. 6 [b]; Act No. 114 of the
Legislative Council amended and approved by the Philippine Commission;
80 | C o n f l i c t o f L a w s C a s e s
Cacho vs. Government of the United States [1914], 28 Phil., 616.) Various responsible officials
have so oft announced the purpose of the Government not to interfere with the customs of the
Moros, especially their religious customs, as to make quotation of the same superfluous.
The retrospective provisions of the Philippine Marriage Law undoubtedly were inspired by the
governmental policy in the United States, with regard to the marriages of the Indians, the
Quakers, and the Mormons. The rule as to Indians marriages is, that a marriage between two
Indians entered into according to the customs and laws of the people at a place where such
customs and laws are in force, must be recognized as a valid marriage. The rule as to the
Society of Quakers is, that they will be left to their own customs and that their marriages will be
recognized although they use no solemnization. The rule as to Mormon marriages is that the
sealing ceremony entered into before a proper official by members of that Church competent to
contract marriage constitutes a valid marriage.
The basis of human society throughout the civilized world is that of marriage. Marriage in this
jurisdiction is not only a civil contract, but, it is a new relation, an institution in the maintenance of
which the public is deeply interested. Consequently, every intendment of the law leans toward
legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the
absence of any counter-presumption or evidence special to the case, to be in fact married. The
reason is that such is the common order of society, and if the parties were not what they thus
hold themselves out as being, they would be living in the constant violation of decency and of
law. A presumption established by our Code of Civil Procedure is "that a man and woman
deporting themselves as husband and wife have entered into a lawful contract of marriage.:"
(Sec. 334, No. 28.) Semper praesumitur pro matrimonio — Always presume marriage. (U.
S. vs. Villafuerte and Rabano [1905], 4 Phil., 476; Son Cui vs. Guepangco, supra;
U.S. vs.Memoracion and Uri [1916], 34 Phil., 633; Teter vs. Teter [1884], 101 Ind., 129.)
Section IX of the Marriage Law is in the nature of a curative provision intended to safeguard
society by legalizing prior marriages. We can see no substantial reason for denying to the
legislative power the right to remove impediments to an effectual marriage. If the legislative
power can declare what shall be valid marriages, it can render valid, marriages which, when they
took place, were against the law. Public policy should aid acts intended to validate marriages
and should retard acts intended to invalidate marriages. (Coghsen vs. Stonington [1822], 4
Conn, 209; Baity vs. Cranfill [1884], 91 N. C., 273.)
The courts can properly incline the scales of their decisions in favors of that solution which will
mot effectively promote the public policy. That is the true construction which will best carry
legislative intention into effect. And here the consequences, entailed in holding that the marriage
of the Mora Adong and the deceased Cheong Boo, in conformity with the Mohammedan religion
and Moro customs, was void, would be far reaching in disastrous result. The last census shows
that there are at least one hundred fifty thousand Moros who have been married according to
local custom. We then have it within our power either to nullify or to validate all of these
marriages; either to make all of the children born of these unions bastards or to make them
legitimate; either to proclaim immorality or to sanction morality; either to block or to advance
settled governmental policy. Our duty is a obvious as the law is plain.
In moving toward our conclusion, we have not lost sight of the decisions of this court in the
cases of United States vs. Tubban ([1915]), 29 Phil., 434) and United States vs. Verzola ([1916,
33 Phil., 285). We do not, however, believe these decisions to be controlling. In the first place,
these were criminal actions and two Justice dissented.. In the second place, in the Tubban case,
the marriage in question was a tribal marriage of the Kalingas, while in the Verzola case, the
marriage had been performed during the Spanish regime by a lieutenant of the Guardia Civil. In
neither case, in deciding as to whether or not the accused should be given the benefit of the so-
called unwritten law, was any consideration given to the provisions of section IX of General
Order No. 68. We are free to admit that, if necessary, we would unhesitatingly revoke the
doctrine announced in the two cases above mentioned.
We regard the evidence as producing a moral conviction of the existence of the Mohammedan
marriage. We regard the provisions of section IX of the Marriage law as validating marriages
performed according to the rites of the Mohammedan religion.
There are other questions presented in the various assignments of error which it is unnecessary
to decide. In resume, we find the Chinese marriage not to be proved and that the Chinaman
Cheong Seng Gee has only the rights of a natural child, and we find the Mohammedan marriage
to be proved and to be valid, thus giving to the widow and the legitimate children of this union
the rights accruing to them under the law.
Judgment is reversed in part, and the case shall be returned to the lower court for a partition of
the property in accordance with this decision, and for further proceedings in accordance with
law. Without special findings as to costs in this instance, it is so ordered.
G.R. No. L-11759 March 16, 1917
CAYETANO LIM and MARCIANO LIM, petitioners-appellants,
vs.
THE INSULAR COLLECTOR OF CUSTOMS, respondent-appellee.
Williams, Ferrier and SyCip for appellants.
Attorney-General Avanceña for appellee.
CARSON, J.:
The real question raised on this appeal is whether the Insular Collector of Customs may lawfully
deny entry into the Philippine Islands to two children aged 8 and 14 years, respectively, under
and by authority of the Chinese Immigration, Laws, it appearing that the children arrived at the
Port of Manila accompanied by and in the custody of their mother, a Filipino woman; that they
were born in China, out of lawful wedlock; and that their father was a Chinese person.
It is contended, on behalf of the Insular Collector of Customs, that these children being Chinese
persons are denied the right of entrance into the Philippine Islands under the express terms of
the Chinese immigration laws. On the other hand, it is urged on behalf of the children that they
are entitled to enter, regardless of the provisions of the Chinese immigration laws, since the
admitted facts, as it is said, disclose that they are citizens of the Philippine Islands; and for the
further reason, that their mother, who is entitled to their custody and charged with their
maintenance and education, is clearly entitled to take up her residence in the Philippine Islands
and should not be required, to that end, to abandon her minor children.
Without discussing or deciding any of the contentions of the parties as to the rights of citizenship
of these children, actual or inchoate, we are of opinion that by analogous reasoning to that upon
81 | C o n f l i c t o f L a w s C a s e s
which the Supreme Court of the United States held that the wives and minor children of Chinese
merchants domiciled in the United States may enter that country without certificates, these
children must be held to be entitled to enter the Philippine Islands with their mother, for the
purpose of taking up their residence here with her, it appearing that she is natural guardian,
entitled to their custody and charged with their maintenance and education. (U. S. vs. Gue Lim,
176 U. S. 459.)
In the case just cited the court said:
While the literal construction of the section would require a certificate, as therein
stated, from every Chinese person, other than a laborer, who should come into the
country, yet such a construction leads to what we think an absurd result, for it requires
a certificate for a wife of a merchant, among others, in regard to whom its would be
impossible to give the particulars which the statute requires shall be stated in such
certificate.
"Nothing is better settled," says the present Chief Justice, in Lau Ow Bew vs. United
States (144 U. S., 59) "than that statutes should receive a sensible construction, such
as will effectuate the legislative intention, and, if possible, so as to avoid and unjust or
an absurd conclusion.
The purposes of the sixth section, requiring the certificate, was not to prevent the
persons named in the second article of the treaty from coming into the country, but to
prevent Chinese laborers from entering under the guise of being one of the classes
permitted by the treaty. It is the coming of Chinese laborers that the act is aimed
against.
It was said in the opinion in the Lau Ow Bew case, in speaking of the provisions that
the sole evidence permissible should be the certificate: "This rule of evidence was
evidently prescribed by the amendment as a means of effectually preventing the
violation or evasion of the prohibition against the coming of Chinese laborers. It was
designed as a safeguard to prevent the unlawful entry of such laborers, under the
pretense that they belong to the merchant class or to some other of the admitted
classes."
It was also held in that case that although the literal wording of the statute of 1884,
section six, would require a certificate in the case of a merchant already domiciled in
the United States and who had left the country for temporary purposes, animo
revertendi, yet its true and proper construction did not include his case, and the
general terms used in the act were limited to those persons to whom Congress
manifestly intended to apply them, which would be those who were about to come to
the United States for the first time, and not to those Chinese merchants already
domiciled in the United States who had gone to China for temporary purposes only,
with the intention of returning. The case of Wan Shing vs. United States (140 U. S.,
24), was referred to, and attention called to the fact that the appellant therein was not
a merchant but a laborer, who had acquired no commercial domicile in this county,
and was clearly within the exception requiring him to procure and produce the
certificate specified in the act. The rule was approved, and the differences in the two
cases pointed out by the Chief Justice.
 To hold that a certificate is required in this case is to decide that the woman cannot
come into this country at all, for it is not possible for her to comply with the act,
because she cannot in any event procure the certificate even by returning to China.
She must come in as the wife of her domiciled husband or not at all. The act was
never meant to accomplish the result of permanently excluding the wife under the
circumstances of this case, and we think that, properly and reasonably construed, it
does not do so. If we hold that she is entitled to come in as the wife, because the true
construction of the treaty and the act permits it, there is no provision which makes the
certificate the only proof of the fact that she is such wife.
In the case of the minor children, the same result must follow as in that of the wife. All
the reasons which favor the construction of the statute as exempting the wife from the
necessity of procuring a certificate apply with equal force to the case of minor children
of a member or members of the admitted classes. They come in by reason of their
relationship to the father, and whether they accompany or follow him, a certificate is
not necessary in either case. When the fact is established to the satisfaction of the
authorities that the person claiming to enter, either as wife or minor child, is in fact the
wife or minor child of one of the members of the class mentioned in the treaty as
entitled to enter, them that person in entitled to admission without the certificate.
We are not advised of any provision of Chinese law which differentiates the status of infant
children, born out of lawful wedlock, from that of similar children under the laws in force in the
Philippine Islands. We assume, therefore, that in China as well as in the Philippine Islands such
children have the right to look to their mother for their maintenance and education, and that she
is entitled to their custody and control in fulfilling the obligations towards them which are
imposed upon her, not only by the natural impulses of love and affection, but also by the express
mandate of the law. And it having been held on the highest authority that the general terms of
the Act were limited to those to whom Congress manifestly intended to apply them as set forth in
the foregoing opinion, and that "nothing is better settled than that statutes should receive a
sensible construction, such as will effectuate the legislative intention, and, if possible, so as to
avoid an unjust or an absurd conclusion," we are of opinion that the Chinese Immigration Laws
should not be construed so as to exclude infant children of a Filipino mother, born out of lawful
wedlock, seeking entrance to the Philippine Islands for the purpose of taking up their residence
with her in her native land.
It has been suggested that such a ruling opens the door to fraud and evasion, but we are not
much impressed with the force of this suggestion, knowing as we do that the immigration
authorities have been furnished by the law with peculiarly effective machinery for its
enforcement, well calculated to defeat any attempt to make an unauthorized or improper use of
so manifestly reasonable an exception from the literal construction and application of its general
provisions.
Some confusion seems to have arisen in the court below as to the precise nature and effect of
the somewhat inartificial pleadings upon which these proceedings were submitted. The case
appears to have been submitted upon an answer to an order to show cause why a writ
of habeas corpus should not issue upon the petition filed on behalf of the infant children. In the
form in which the answer is couched, there is much in the contention of the appellee that the trial
court should have treated the answer as in substance and effect a demurrer to the petition,
admitting the truth of the facts alleged therein, but praying judgment as to whether it sets forth
facts sufficient to constitute a cause of action and to justify the issuance of the writ. We are
inclined to think, however, that the understanding of the parties and of the court below was that
the answer should be treated rather as in the nature of a return to a writ of habeas corpus,
82 | C o n f l i c t o f L a w s C a s e s
accepting as true the allegations of the petition but maintaining the legality of the detention upon
the facts thus submitted. Without considering at this time whether in habeas corpus proceedings
the respondent may, without consent of court, demur to, instead of answering an order to show
cause why the writ should not issue, and without considering or deciding the course which
should be pursued where a respondent attempts to file a demurrer to a petition for a writ of
habeas corpus in lieu of the return prescribed by the statute to the writ when actually issued; we
treat the answer to the order to show cause in the case at bar as we think the parties and the
court below understood it should be treated, that is to say, as in substance and effect the return
which the Insular Collector desired to make to the writ of habeas corpus issued or assumed to
have been issued in response to the petition on behalf of the children held in custody by him.
We conclude, therefore, that, it appearing that the respondent Collector of Customs is detaining
the petitioners under an erroneous construction of the immigration laws, and it appearing from
the facts disclosed by the administrative proceedings that these children are entitled to
admission into the Philippine Islands, the order entered in the court below should be reversed,
and in lieu thereof an order should be entered directing the discharge of these children from the
custody of the Insular Collector of Customs, with the costs in both instances, de officio. So
ordered.
G.R. No. 149177 November 23, 2007
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO.,
LTD., Petitioners,
vs.
MINORU KITAMURA, Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the April 18, 2001 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 60827,
and the July 25, 2001 Resolution2 denying the motion for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese
consultancy firm providing technical and management support in the infrastructure projects of
foreign governments,3 entered into an Independent Contractor Agreement (ICA) with respondent
Minoru Kitamura, a Japanese national permanently residing in the Philippines. 4 The agreement
provides that respondent was to extend professional services to Nippon for a year starting on
April 1, 1999.5 Nippon then assigned respondent to work as the project manager of the Southern
Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy
contract with the Philippine Government.6
When the STAR Project was near completion, the Department of Public Works and Highways
(DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the
detailed engineering and construction supervision of the Bongabon-Baler Road Improvement
(BBRI) Project.7 Respondent was named as the project manager in the contract's Appendix 3.1. 8
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its
International Division, informed respondent that the company had no more intention of
automatically renewing his ICA. His services would be engaged by the company only up to the
substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry.9
Threatened with impending unemployment, respondent, through his lawyer, requested a
negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted
that respondent’s contract was for a fixed term that had already expired, and refused to
negotiate for the renewal of the ICA.10
As he was not able to generate a positive response from the petitioners, respondent
consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and
damages with the Regional Trial Court of Lipa City.11
For their part, petitioners, contending that the ICA had been perfected in Japan and executed by
and between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They
asserted that the claim for improper pre-termination of respondent's ICA could only be heard and
ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex
contractus.12
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement
of Kitamura by a certain Y. Kotake as project manager of the BBRI Project. 13
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank14 that matters
connected with the performance of contracts are regulated by the law prevailing at the place of
performance,15 denied the motion to dismiss.16 The trial court subsequently denied petitioners'
motion for reconsideration,17 prompting them to file with the appellate court, on August 14, 2000,
their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On
August 23, 2000, the CA resolved to dismiss the petition on procedural grounds—for lack of
statement of material dates and for insufficient verification and certification against forum
shopping.19 An Entry of Judgment was later issued by the appellate court on September 20,
2000.20
Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within
the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein
the material dates and attaching thereto the proper verification and certification. This second
petition, which substantially raised the same issues as those in the first, was docketed as CA-
G.R. SP No. 60827.21
Ruling on the merits of the second petition, the appellate court rendered the assailed April 18,
2001 Decision22finding no grave abuse of discretion in the trial court's denial of the motion to
dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was not
applicable to the case, because nowhere in the pleadings was the validity of the written
agreement put in issue. The CA thus declared that the trial court was correct in applying instead
the principle of lex loci solutionis.23
Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July
25, 2001 Resolution.24
83 | C o n f l i c t o f L a w s C a s e s
Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant
Petition for Review on Certiorari25 imputing the following errors to the appellate court:
A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
THE TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT
CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER
OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO
JAPANESE NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND
EXECUTED IN TOKYO, JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING
THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI
SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE
INTERNATIONAL LAWS.26
The pivotal question that this Court is called upon to resolve is whether the subject matter
jurisdiction of Philippine courts in civil cases for specific performance and damages involving
contracts executed outside the country by foreign nationals may be assailed on the principles
of lex loci celebrationis, lex contractus, the "state of the most significant relationship rule,"
or forum non conveniens.
However, before ruling on this issue, we must first dispose of the procedural matters raised by
the respondent.
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205
has already barred the filing of the second petition docketed as CA-G.R. SP No. 60827
(fundamentally raising the same issues as those in the first one) and the instant petition for
review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's
defective certification of non-forum shopping, it was a dismissal without prejudice.27 The same
holds true in the CA's dismissal of the said case due to defects in the formal requirement of
verification28 and in the other requirement in Rule 46 of the Rules of Court on the statement of
the material dates.29 The dismissal being without prejudice, petitioners can re-file the petition, or
file a second petition attaching thereto the appropriate verification and certification—as they, in
fact did—and stating therein the material dates, within the prescribed period30 in Section 4, Rule
65 of the said Rules.31
The dismissal of a case without prejudice signifies the absence of a decision on the merits and
leaves the parties free to litigate the matter in a subsequent action as though the dismissed
action had not been commenced. In other words, the termination of a case not on the merits
does not bar another action involving the same parties, on the same subject matter and theory. 32
Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and
even if petitioners still indicated in the verification and certification of the
second certiorari petition that the first had already been dismissed on procedural
grounds,33 petitioners are no longer required by the Rules to indicate in their certification of non-
forum shopping in the instant petition for review of the second certiorari petition, the status of the
aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum
shopping about any event that will not constitute res judicata and litis pendentia, as in the never contended that the RTC is an inconvenient forum. They merely argued that the applicable
present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire law which will determine the validity or invalidity of respondent's claim is that of Japan, following
proceedings, considering that the evils sought to be prevented by the said certificate are no the principles of lex loci celebrationis and lex contractus.49 While not abandoning this stance in
longer present.34 their petition before the appellate court, petitioners on certiorari significantly invoked the defense
of forum non conveniens.50 On petition for review before this Court, petitioners dropped their
other arguments, maintained the forum non conveniens defense, and introduced their new
The Court also finds no merit in respondent's contention that petitioner Hasegawa is only
argument that the applicable principle is the [state of the] most significant relationship rule. 51
authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and
not the instant petition. True, the Authorization35 dated September 4, 2000, which is attached to
the second certiorari petition and which is also attached to the instant petition for review, is Be that as it may, this Court is not inclined to deny this petition merely on the basis of the
limited in scope—its wordings indicate that Hasegawa is given the authority to sign for and act change in theory, as explained in Philippine Ports Authority v. City of Iloilo.52 We only pointed out
on behalf of the company only in the petition filed with the appellate court, and that authority petitioners' inconstancy in their arguments to emphasize their incorrect assertion of conflict of
cannot extend to the instant petition for review.36 In a plethora of cases, however, this Court has laws principles.
liberally applied the Rules or even suspended its application whenever a satisfactory explanation
and a subsequent fulfillment of the requirements have been made. 37 Given that petitioners
To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are
herein sufficiently explained their misgivings on this point and appended to their Reply38 an
involved: jurisdiction, choice of law, and recognition and enforcement of judgments.
updated Authorization39 for Hasegawa to act on behalf of the company in the instant petition, the
Corresponding to these phases are the following questions: (1) Where can or should litigation be
Court finds the same as sufficient compliance with the Rules.
initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be
enforced?53
However, the Court cannot extend the same liberal treatment to the defect in the verification and
certification. As respondent pointed out, and to which we agree, Hasegawa is truly not
Analytically, jurisdiction and choice of law are two distinct concepts. 54 Jurisdiction considers
authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000
whether it is fair to cause a defendant to travel to this state; choice of law asks the further
Authorization and even the subsequent August 17, 2001 Authorization were issued only by
question whether the application of a substantive law which will determine the merits of the case
Nippon's president and chief executive officer, not by the company's board of directors. In not a
is fair to both parties. The power to exercise jurisdiction does not automatically give a state
few cases, we have ruled that corporate powers are exercised by the board of directors; thus, no
constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will
person, not even its officers, can bind the corporation, in the absence of authority from the
often coincide, the "minimum contacts" for one do not always provide the necessary "significant
board.40 Considering that Hasegawa verified and certified the petition only on his behalf and not
contacts" for the other.55 The question of whether the law of a state can be applied to a
on behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office of
transaction is different from the question of whether the courts of that state have jurisdiction to
the Ombudsman.41 Substantial compliance will not suffice in a matter that demands strict
enter a judgment.56
observance of the Rules.42 While technical rules of procedure are designed not to frustrate the
ends of justice, nonetheless, they are intended to effect the proper and orderly disposition of
cases and effectively prevent the clogging of court dockets.43 In this case, only the first phase is at issue—jurisdiction.1âwphi1 Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a controversy, it must
have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question
the subject matter, over the issues of the case and, in cases involving property, over the res or
the trial court's denial of their motion to dismiss. It is a well-established rule that an order
the thing which is the subject of the litigation.57 In assailing the trial court's jurisdiction herein,
denying a motion to dismiss is interlocutory, and cannot be the subject of the extraordinary
petitioners are actually referring to subject matter jurisdiction.
petition for certiorari or mandamus. The appropriate recourse is to file an answer and to
interpose as defenses the objections raised in the motion, to proceed to trial, and, in case of an
adverse decision, to elevate the entire case by appeal in due course. 44 While there are Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign
recognized exceptions to this rule,45 petitioners' case does not fall among them. authority which establishes and organizes the court. It is given only by law and in the manner
prescribed by law.58 It is further determined by the allegations of the complaint irrespective of
whether the plaintiff is entitled to all or some of the claims asserted therein. 59 To succeed in its
This brings us to the discussion of the substantive issue of the case.
motion for the dismissal of an action for lack of jurisdiction over the subject matter of the
claim,60 the movant must show that the court or tribunal cannot act on the matter submitted to it
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction because no law grants it the power to adjudicate the claims. 61
to hear and resolve the civil case for specific performance and damages filed by the respondent.
The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not
nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts
properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case
have no substantial relationship to the parties46 following the [state of the] most significant
No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation
relationship rule in Private International Law.47
and is properly cognizable by the RTC of Lipa City.62 What they rather raise as grounds to
question subject matter jurisdiction are the principles of lex loci celebrationis and lex
The Court notes that petitioners adopted an additional but different theory when they elevated contractus, and the "state of the most significant relationship rule."
the case to the appellate court. In the Motion to Dismiss48 filed with the trial court, petitioners
84 | C o n f l i c t o f L a w s C a s e s
The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the "law of the place of the ceremony"63 or the law of the place
where a contract is made.64 The doctrine of lex contractus or lex loci contractus means the "law
of the place where a contract is executed or to be performed." 65 It controls the nature,
construction, and validity of the contract66 and it may pertain to the law voluntarily agreed upon
by the parties or the law intended by them either expressly or implicitly.67 Under the "state of the
most significant relationship rule," to ascertain what state law to apply to a dispute, the court
should determine which state has the most substantial connection to the occurrence and the
parties. In a case involving a contract, the court should consider where the contract was made,
was negotiated, was to be performed, and the domicile, place of business, or place of
incorporation of the parties.68 This rule takes into account several contacts and evaluates them
according to their relative importance with respect to the particular issue to be resolved.69
Since these three principles in conflict of laws make reference to the law applicable to a dispute,
they are rules proper for the second phase, the choice of law.70 They determine which state's
law is to be applied in resolving the substantive issues of a conflicts problem. 71 Necessarily, as
the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but
also not yet called for.
Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they
have not yet pointed out any conflict between the laws of Japan and ours. Before determining
which law should apply, first there should exist a conflict of laws situation requiring the
application of the conflict of laws rules.72 Also, when the law of a foreign country is invoked to
provide the proper rules for the solution of a case, the existence of such law must be pleaded
and proved.73
It should be noted that when a conflicts case, one involving a foreign element, is brought before
a court or administrative agency, there are three alternatives open to the latter in disposing of it:
(1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over
the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3)
assume jurisdiction over the case and take into account or apply the law of some other State or
States.74 The court’s power to hear cases and controversies is derived from the Constitution and
the laws. While it may choose to recognize laws of foreign nations, the court is not limited by
foreign sovereign law short of treaties or other formal agreements, even in matters regarding
rights provided by foreign sovereigns.75
Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court
of its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1,
Rule 16 of the Rules of Court does not include it as a ground.77 Second, whether a suit should
be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of
the particular case and is addressed to the sound discretion of the trial court.78 In this case, the
RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this
principle requires a factual determination; hence, this conflicts principle is more properly
considered a matter of defense.79
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case
filed by respondent and the grounds raised by petitioners to assail that jurisdiction are
inappropriate, the trial and appellate courts correctly denied the petitioners’ motion to dismiss.
85 | C o n f l i c t o f L a w s C a s e s
WHEREFORE, premises considered, the petition for review on certiorari is DENIED.
SO ORDERED.
G.R. No. 103493 June 19, 1997
PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, and
ATHONA HOLDINGS, N.V., petitioners,
vs.
THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO DAIC, VENTURA O. DUCAT,
PRECIOSO R. PERLAS, and WILLIAM H. CRAIG, respondents.
MENDOZA, J.:
This case presents for determination the conclusiveness of a foreign judgment upon the rights of
the parties under the same cause of action asserted in a case in our local court. Petitioners
brought this case in the Regional Trial Court of Makati, Branch 56, which, in view of the
pendency at the time of the foreign action, dismissed Civil Case No. 16563 on the ground of litis
pendentia, in addition to forum non conveniens. On appeal, the Court of Appeals affirmed.
Hence this petition for review on certiorari.
The facts are as follows:
On January 15, 1983, private respondent Ventura O. Ducat obtained separate loans from
petitioners Ayala International Finance Limited (hereafter called AYALA) 1 and Philsec
Investment Corporation (hereafter called PHILSEC) in the sum of US$2,500,000.00, secured by
shares of stock owned by Ducat with a market value of P14,088,995.00. In order to facilitate the
payment of the loans, private respondent 1488, Inc., through its president, private respondent
Drago Daic, assumed Ducat's obligation under an Agreement, dated January 27, 1983, whereby
1488, Inc. executed a Warranty Deed with Vendor's Lien by which it sold to petitioner Athona
Holdings, N.V. (hereafter called ATHONA) a parcel of land in Harris County, Texas, U.S.A., for
US$2,807,209.02, while PHILSEC and AYALA extended a loan to ATHONA in the amount of
US$2,500,000.00 as initial payment of the purchase price. The balance of US$307,209.02 was
to be paid by means of a promissory note executed by ATHONA in favor of 1488, Inc.
Subsequently, upon their receipt of the US$2,500,000.00 from 1488, Inc., PHILSEC and AYALA
released Ducat from his indebtedness and delivered to 1488, Inc. all the shares of stock in their
possession belonging to Ducat.
As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount
covered by the note became due and demandable. Accordingly, on October 17, 1985, private
respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and ATHONA in the United States for
payment of the balance of US$307,209.02 and for damages for breach of contract and for fraud
allegedly perpetrated by petitioners in misrepresenting the marketability of the shares of stock
delivered to 1488, Inc. under the Agreement. Originally instituted in the United States District
Court of Texas, 165th Judicial District, where it was docketed as Case No. 85-57746, the venue
of the action was later transferred to the United States District Court for the Southern District of
Texas, where 1488, Inc. filed an amended complaint, reiterating its allegations in the original
complaint. ATHONA filed an answer with counterclaim, impleading private respondents herein
as counterdefendants, for allegedly conspiring in selling the property at a price over its market
value. Private respondent Perlas, who had allegedly appraised the property, was later dropped
as counterdefendant. ATHONA sought the recovery of damages and excess payment allegedly
made to 1488, Inc. and, in the alternative, the rescission of sale of the property. For their part,
PHILSEC and AYALA filed a motion to dismiss on the ground of lack of jurisdiction over their
person, but, as their motion was denied, they later filed a joint answer with counterclaim against
private respondents and Edgardo V. Guevarra, PHILSEC's own former president, for the
rescission of the sale on the ground that the property had been overvalued. On March 13, 1990,
the United States District Court for the Southern District of Texas dismissed the counterclaim
against Edgardo V. Guevarra on the ground that it was "frivolous and [was] brought against him
simply to humiliate and embarrass him." For this reason, the U.S. court imposed so-called Rule
11 sanctions on PHILSEC and AYALA and ordered them to pay damages to Guevarra.
On April 10, 1987, while Civil Case No. H-86-440 was pending in the United States, petitioners
filed a complaint "For Sum of Money with Damages and Writ of Preliminary Attachment" against
private respondents in the Regional Trial Court of Makati, where it was docketed as Civil Case
No. 16563. The complaint reiterated the allegation of petitioners in their respective counterclaims
in Civil Action No. H-86-440 of the United States District Court of Southern Texas that private
respondents committed fraud by selling the property at a price 400 percent more than its true
value of US$800,000.00. 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. Petitioners prayed that private respondents be ordered to
return to ATHONA the excess payment of US$1,700,000.00 and to pay damages. On April 20,
1987, the trial court issued a writ of preliminary attachment against the real and personal
properties of private respondents. 2
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis
pendentia, vis-a-vis Civil Action No. H-86-440 filed by 1488, Inc. and Daic in the U.S., (2) forum
non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state a cause of action.
Ducat contended that the alleged overpricing of the property prejudiced only petitioner ATHONA,
as buyer, but not PHILSEC and BPI-IFL which were not parties to the sale and whose only
participation was to extend financial accommodation to ATHONA under a separate loan
agreement. On the other hand, private respondents 1488, Inc. and its president Daic filed a joint
"Special Appearance and Qualified Motion to Dismiss," contending 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.
On January 26, 1988, the trial court granted Ducat's motion to dismiss, stating that "the
evidentiary requirements of the controversy may be more suitably tried before the forum of
the litis pendentia in the U.S., under the principle in private international law of forum non
conveniens," even as it noted that Ducat was not a party in the U.S. case.
A separate hearing was held with regard to 1488, Inc. and Daic's motion to dismiss. On March 9,
1988, the trial court 3 granted the motion to dismiss filed by 1488, Inc. and Daic on the ground
of litis pendentia considering that
the "main factual element" of the cause of action in this case which is the
validity of the sale of real property in the United States between defendant
1488 and plaintiff ATHONA is the subject matter of the pending case in the
86 | C o n f l i c t o f L a w s C a s e s
United States District Court which, under the doctrine of forum non
conveniens, is the better (if not exclusive) forum to litigate matters needed
to determine the assessment and/or fluctuations of the fair market value of
real estate situated in Houston, Texas, U.S.A. from the date of the
transaction in 1983 up to the present and verily, . . . (emphasis by trial court)
The trial court also held itself without jurisdiction over 1488, Inc. and Daic because
they were non-residents and the action was not an action in rem or quasi in rem, so
that extraterritorial service of summons was ineffective. The trial court subsequently
lifted the writ of attachment it had earlier issued against the shares of stocks of 1488,
Inc. and Daic.
Petitioners appealed to the Court of Appeals, arguing that the trial court erred in applying the
principle of litis pendentia and forum non conveniens and in ruling that it had no jurisdiction over
the defendants, despite the previous attachment of shares of stocks belonging to 1488, Inc. and
Daic.
On January 6, 1992, the Court of Appeals 4 affirmed the dismissal of Civil Case No. 16563
against Ducat, 1488, Inc., and Daic on the ground of litis pendentia, thus:
The plaintiffs in the U.S. court are 1488 Inc. and/or Drago Daic, while the
defendants are Philsec, the Ayala International Finance Ltd. (BPI-IFL's
former name) and the Athona Holdings, NV. The case at bar involves the
same parties. The transaction sued upon by the parties, in both cases is the
Warranty Deed executed by and between Athona Holdings and 1488 Inc. In
the U.S. case, breach of contract and the promissory note are sued upon by
1488 Inc., which likewise alleges fraud employed by herein appellants, on
the marketability of Ducat's securities given in exchange for the Texas
property. The recovery of a sum of money and damages, for fraud
purportedly committed by appellees, in overpricing the Texas land,
constitute the action before the Philippine court, which likewise stems from
the same Warranty Deed.
The Court of Appeals also held that Civil Case No. 16563 was an action in personam
for the recovery of a sum of money for alleged tortious acts, so that service of
summons by publication did not vest the trial court with jurisdiction over 1488, Inc. and
Drago Daic. The dismissal of Civil Case No. 16563 on the ground offorum non
conveniens was likewise affirmed by the Court of Appeals on the ground that the case
can be better tried and decided by the U.S. court:
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 Holdings, a foreign
corporation which does not claim to be doing business in the Philippines, is
wholly owned by Philsec, a domestic corporation, Athona Holdings is also
owned by BPI-IFL, also a foreign corporation; 4) the Warranty Deed was
executed in Texas, U.S.A.
In their present appeal, petitioners contend that:
 1. THE DOCTRINE OF PENDENCY OF ANOTHER ACTION BETWEEN
THE SAME PARTIES FOR THE SAME CAUSE (LITIS PENDENTIA)
RELIED UPON BY THE COURT OF APPEALS IN AFFIRMING THE TRIAL
COURT'S DISMISSAL OF THE CIVIL ACTION IS NOT APPLICABLE.
2. THE PRINCIPLE OF FORUM NON CONVENIENS ALSO RELIED UPON
BY THE COURT OF APPEALS IN AFFIRMING THE DISMISSAL BY THE
TRIAL COURT OF THE CIVIL ACTION IS LIKEWISE NOT APPLICABLE.
3. AS A COROLLARY TO THE FIRST TWO GROUNDS, THE COURT OF
APPEALS ERRED IN NOT HOLDING THAT PHILIPPINE PUBLIC POLICY
REQUIRED THE ASSUMPTION, NOT THE RELINQUISHMENT, BY THE
TRIAL COURT OF ITS RIGHTFUL JURISDICTION IN THE CIVIL ACTION
FOR THERE IS EVERY REASON TO PROTECT AND VINDICATE
PETITIONERS' RIGHTS FOR TORTIOUS OR WRONGFUL ACTS OR
CONDUCT PRIVATE RESPONDENTS (WHO ARE MOSTLY NON-
RESIDENT ALIENS) INFLICTED UPON THEM HERE IN THE
PHILIPPINES.
We will deal with these contentions in the order in which they are made.
First. It is important to note in connection with the first point that while the present case was
pending in the Court of Appeals, the United States District Court for the Southern District of
Texas rendered judgment 5 in the case before it. The judgment, which was in favor of private
respondents, was affirmed on appeal by the Circuit Court of Appeals. 6Thus, the principal issue
to be resolved in this case is whether Civil Case No. 16536 is barred by the judgment of the U.S.
court.
Private respondents contend that for a foreign judgment to be pleaded as res judicata, a
judgment admitting the foreign decision is not necessary. On the other hand, petitioners argue
that the foreign judgment cannot be given the effect of res judicata without giving them an
opportunity to impeach it on grounds stated in Rule 39, §50 of the Rules of Court, to wit: "want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact."
Petitioners' contention is meritorious. While this Court has given the effect of res judicata to
foreign judgments in several cases, 7 it was after the parties opposed to the judgment had been
given ample opportunity to repel them on grounds allowed under the law. 8 It is not necessary for
this purpose to initiate a separate action or proceeding for enforcement of the foreign judgment.
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. 9 Rule 39,
§50 provides:
Sec. 50. Effect of foreign judgments. — The effect of a judgment of a
tribunal of a foreign country, having jurisdiction to pronounce the judgment
is as follows:
87 | C o n f l i c t o f L a w s C a s e s
(a) In case of a judgment upon a specific thing, the judgment is conclusive
upon the title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive
evidence of a right as between the parties and their successors in interest
by a subsequent title; but the judgment may be repelled by evidence of a
want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact.
Thus, in the case of General Corporation of the Philippines v. Union Insurance Society of
Canton, Ltd., 10 which private respondents invoke for claiming conclusive effect for the foreign
judgment in their favor, the foreign judgment was considered res judicata because this Court
found "from the evidence as well as from appellant's own pleadings" 11 that the foreign court did
not make a "clear mistake of law or fact" or that its judgment was void for want of jurisdiction or
because of fraud or collusion by the defendants. Trial had been previously held in the lower
court and only afterward was a decision rendered, declaring the judgment of the Supreme Court
of the State of Washington to have the effect of res judicata in the case before the lower court. In
the same vein, in Philippines International Shipping Corp. v. Court of Appeals, 12 this Court held
that the foreign judgment was valid and enforceable in the Philippines there being no showing
that it was vitiated by want of notice to the party, collusion, fraud or clear mistake of law or fact.
The prima facie presumption under the Rule had not been rebutted.
In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the
judgment of the U.S. court as basis for declaring it res judicata or conclusive of the rights of
private respondents. The proceedings in the trial court were summary. Neither the trial court nor
the appellate court was even furnished copies of the pleadings in the U.S. court or apprised of
the evidence presented thereat, to assure a proper determination of whether the issues then
being litigated in the U.S. court were exactly the issues raised in this case such that the
judgment that might be rendered would constitute res judicata. As the trial court stated in its
disputed order dated March 9, 1988.
On the plaintiff's claim in its Opposition that the causes of action of this case
and the pending case in the United States are not identical, precisely the
Order of January 26, 1988 never found that the causes of action of this case
and the case pending before the USA Court, were identical. (emphasis
added)
It was error therefore for the Court of Appeals to summarily rule that petitioners' action
is barred by the principle of res judicata. Petitioners in fact questioned the jurisdiction
of the U.S. court over their persons, but their claim was brushed aside by both the trial
court and the Court of Appeals. 13
Moreover, the Court notes that on April 22, 1992, 1488, Inc. and Daic filed a petition for the
enforcement of judgment in the Regional Trial Court of Makati, where it was docketed as Civil
Case No. 92-1070 and assigned to Branch 134, although the proceedings were suspended
because of the pendency of this case. To sustain the appellate court's ruling that the foreign
judgment constitutes res judicata and is a bar to the claim of petitioners would effectively
preclude petitioners from repelling the judgment in the case for enforcement. An absurdity could
then arise: a foreign judgment is not subject to challenge by the plaintiff against whom it is
invoked, if it is pleaded to resist a claim as in this case, but it may be opposed by the defendant
if the foreign judgment is sought to be enforced against him in a separate proceeding. This is
plainly untenable. It has been held therefore that:
[A] foreign judgment may not be enforced if it is not recognized in the
jurisdiction where affirmative relief is being sought. Hence, in the interest of
justice, the complaint should be considered as a petition for the recognition
of the Hongkong judgment under Section 50 (b), Rule 39 of the Rules of
Court in order that the defendant, private respondent herein, may present
evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of
fact and law, if applicable. 14
Accordingly, to insure the orderly administration of justice, this case and Civil Case No. 92-1070
should be consolidated. 15 After all, the two have been filed in the Regional Trial Court of Makati,
albeit in different salas, this case being assigned to Branch 56 (Judge Fernando V. Gorospe),
while Civil Case No. 92-1070 is pending in Branch 134 of Judge Ignacio Capulong. In such
proceedings, petitioners should have the burden of impeaching the foreign judgment and only in
the event they succeed in doing so may they proceed with their action against private
respondents.
Second. Nor is the trial court's refusal to take cognizance of the case justifiable under the
principle of forum non conveniens. First, a motion to dismiss is limited to the grounds under Rule
16, §1, which does not include forum non conveniens. 16 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. 17
In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings
filed by private respondents in connection with the motion to dismiss. It failed to consider that
one of the plaintiffs (PHILSEC) is a domestic corporation and one of the defendants (Ventura
Ducat) is a Filipino, and that it was the extinguishment of the latter's debt which was the object of
the transaction under litigation. The trial court arbitrarily dismissed the case even after finding
that Ducat was not a party in the U.S. case.
Third. It was error we think for the Court of Appeals and the trial court 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, §17 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." 18 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 dated April 20,
1987. 19
Fourth. As for the temporary restraining order issued by the Court on June 29, 1994, to suspend
the proceedings in Civil Case No. 92-1445 filed by Edgardo V. Guevarra to enforce so-called
Rule 11 sanctions imposed on the petitioners by the U.S. court, the Court finds that the judgment
sought to be enforced is severable from the main judgment under consideration in Civil Case
No. 16563. The separability of Guevara's claim is not only admitted by petitioners, 20 it appears
from the pleadings that petitioners only belatedly impleaded Guevarra as defendant in Civil Case
No. 16563. 21 Hence, the TRO should be lifted and Civil Case No. 92-1445 allowed to proceed.
88 | C o n f l i c t o f L a w s C a s e s
WHEREFORE, the decision of the Court of Appeals is REVERSED and Civil Case No. 16563 is
REMANDED to the Regional Trial Court of Makati for consolidation with Civil Case No. 92-1070
and for further proceedings in accordance with this decision. The temporary restraining order
issued on June 29, 1994 is hereby LIFTED.
SO ORDERED.
G.R. No. 154830 June 8, 2007
PIONEER CONCRETE PHILIPPINES, INC., PIONEER PHILIPPINES HOLDINGS, and PHILIP
J. KLEPZIG, petitioners,
vs.
ANTONIO D. TODARO, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari seeking to annul and set aside the
Decision1 of the Court of Appeals (CA) dated October 31, 2000 in CA-G.R. SP No. 54155 and its
Resolution2 of August 21, 2002 denying petitioners’ Motion for Reconsideration.
The factual and procedural antecedents of the case are as follows:
On January 16, 1998, herein respondent Antonio D. Todaro (Todaro) filed with the Regional Trial
Court (RTC) of Makati City, a complaint for Sum of Money and Damages with Preliminary
Attachment against Pioneer International Limited (PIL), Pioneer Concrete Philippines, Inc.
(PCPI), Pioneer Philippines Holdings, Inc. (PPHI), John G. McDonald (McDonald) and Philip J.
Klepzig (Klepzig).3
In his complaint, Todaro alleged that PIL is a corporation duly organized and existing under the
laws of Australia and is principally engaged in the ready-mix concrete and concrete aggregates
business; PPHI is the company established by PIL to own and hold the stocks of its operating
company in the Philippines; PCPI is the company established by PIL to undertake its business of
ready-mix concrete, concrete aggregates and quarrying operations in the Philippines; McDonald
is the Chief Executive of the Hongkong office of PIL; and, Klepzig is the President and Managing
Director of PPHI and PCPI; Todaro has been the managing director of Betonval Readyconcrete,
Inc. (Betonval), a company engaged in pre-mixed concrete and concrete aggregate production;
he resigned from Betonval in February 1996; in May 1996, PIL contacted Todaro and asked him
if he was available to join them in connection with their intention to establish a ready-mix
concrete plant and other related operations in the Philippines; Todaro informed PIL of his
availability and interest to join them; subsequently, PIL and Todaro came to an agreement
wherein the former consented to engage the services of the latter as a consultant for two to
three months, after which, he would be employed as the manager of PIL's ready-mix concrete
operations should the company decide to invest in the Philippines; subsequently, PIL started its
operations in the Philippines; however, it refused to comply with its undertaking to employ
Todaro on a permanent basis.4
Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss the complaint
on the grounds that the complaint states no cause of action, that the RTC has no jurisdiction
over the subject matter of the complaint, as the same is within the jurisdiction of the NLRC, and
that the complaint should be dismissed on the basis of the doctrine of forum non conveniens.5
In its Order dated January 4, 1999, the RTC of Makati, Branch 147, denied herein petitioners'
respective motions to dismiss.6 Herein petitioners, as defendants, filed an Urgent Omnibus
Motion7 for the reconsideration of the trial court's Order of January 4, 1999 but the trial court
denied it via its Order8 dated June 3, 1999.
On August 3, 1999, herein petitioners filed a Petition for Certiorari with the CA.9 On October 31,
2000, the CA rendered its presently assailed Decision denying herein petitioners' Petition
for Certiorari. Petitioners filed a Motion for Reconsideration but the CA denied it in its Resolution
dated August 21, 2002.
Hence, herein Petition for Review on Certiorari based on the following assignment of errors:
A.
THE COURT OF APPEALS' CONCLUSION THAT THE COMPLAINT STATES A
CAUSE OF ACTION AGAINST PETITIONERS IS WITHOUT ANY LEGAL BASIS.
THE ANNEXES TO THE COMPLAINT CLEARLY BELIE THE ALLEGATION OF
EXISTENCE OF AN EMPLOYMENT CONTRACT BETWEEN PRIVATE
RESPONDENT AND PETITIONERS.
B.
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY
NOT IN ACCORD WITH LAW AND WITH APPLICABLE DECISIONS OF THE
SUPREME COURT WHEN IT UPHELD THE JURISDICTION OF THE TRIAL COURT
DESPITE THE FACT THAT THE COMPLAINT INDUBITABLY SHOWS THAT IT IS
AN ACTION FOR AN ALLEGED BREACH OF EMPLOYMENT CONTRACT, AND
HENCE, FALLS WITHIN THE EXLCUSIVE JURISDICTION OF THE NATIONAL
LABOR RELATIONS COMMISSION.
C conveniens dictates that even where exercise of jurisidiction is authorized by law, courts may
THE COURT OF APPEALS DISREGARDED AND FAILED TO CONSIDER THE
PRINCIPLE OF "FORUM NON CONVENIENS" AS A VALID GROUND FOR
DISMISSING A COMPLAINT.10
In their first assigned error, petitioners contend that there was no perfected employment contract
between PIL and herein respondent. Petitioners assert that the annexes to respondent's
complaint show that PIL's offer was for respondent to be employed as the manager only of its
pre-mixed concrete operations and not as the company's managing director or CEO. Petitioners
argue that when respondent reiterated his intention to become the manager of PIL's overall
business venture in the Philippines, he, in effect did not accept PIL's offer of employment and
instead made a counter-offer, which, however, was not accepted by PIL. Petitioners also
89 | C o n f l i c t o f L a w s C a s e s
contend that under Article 1318 of the Civil Code, one of the requisites for a contract to be
perfected is the consent of the contracting parties; that under Article 1319 of the same Code,
consent is manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract; that the offer must be certain and the acceptance
absolute; that a qualified acceptance constitutes a counter-offer. Petitioners assert that since PIL
did not accept respondent's counter-offer, there never was any employment contract that was
perfected between them.
Petitioners further argue that respondent's claim for damages based on the provisions of Articles
19 and 21 of the Civil Code is baseless because it was shown that there was no perfected
employment contract.
Assuming, for the sake of argument, that PIL may be held liable for breach of employment
contract, petitioners contend that PCPI and PPHI, may not also be held liable because they are
juridical entities with personalities which are separate and distinct from PIL, even if they are
subsidiary corporations of the latter. Petitioners also aver that the annexes to respondent's
complaint show that the negotiations on the alleged employment contract took place between
respondent and PIL through its office in Hongkong. In other words, PCPI and PPHI were not
privy to the negotiations between PIL and respondent for the possible employment of the latter;
and under Article 1311 of the Civil Code, a contract is not binding upon and cannot be enforced
against one who was not a party to it even if he be aware of such contract and has acted with
knowledge thereof.
Petitioners further assert that petitioner Klepzig may not be held liable because he is simply
acting in his capacity as president of PCPI and PPHI and settled is the rule that an officer of a
corporation is not personally liable for acts done in the performance of his duties and within the
bounds of the authority conferred on him. Furthermore, petitioners argue that even if PCPI and
PPHI are held liable, respondent still has no cause of action against Klepzig because PCPI and
PPHI have personalities which are separate and distinct from those acting in their behalf, such
as Klepzig.
As to their second assigned error, petitioners contend that since herein respondent's claims for
actual, moral and exemplary damages are solely premised on the alleged breach of employment
contract, the present case should be considered as falling within the exclusive jurisdiction of the
NLRC.
With respect to the third assigned error, petitioners assert that the principle of forum non
refuse to entertain a case involving a foreign element where the matter can be better tried and
decided elsewhere, either because the main aspects of the case transpired in a foreign
jurisdiction or the material witnesses have their residence there and the plaintiff sought the forum
merely to secure procedural advantage or to annoy or harass the defendant. Petitioners also
argue that one of the factors in determining the most convenient forum for conflicts problem is
the power of the court to enforce its decision. Petitioners contend that since the majority of the
defendants in the present case are not residents of the Philippines, they are not subject to
compulsory processes of the Philippine court handling the case for purposes of requiring their
attendance during trial. Even assuming that they can be summoned, their appearance would
entail excessive costs. Petitioners further assert that there is no allegation in the complaint from
which one can conclude that the evidence to be presented during the trial can be better obtained
in the Philippines. Moreover, the events which led to the present controversy occurred outside
the Philippines. Petitioners conclude that based on the foregoing factual circumstances, the case
should be dismissed under the principle of forum non conveniens.
In his Comment, respondent extensively quoted the assailed CA Decision maintaining that the
factual allegations in the complaint determine whether or not the complaint states a cause of
action.
As to the question of jurisdiction, respondent contends that the complaint he filed was not based
on a contract of employment. Rather, it was based on petitioners' unwarranted breach of their
contractual obligation to employ respondent. This breach, respondent argues, gave rise to an
action for damages which is cognizable by the regular courts.
Even assuming that there was an employment contract, respondent asserts that for the NLRC to
acquire jurisdiction, the claim for damages must have a reasonable causal connection with the
employer-employee relationship of petitioners and respondent.
Respondent further argues that there is a perfected contract between him and petitioners as
they both agreed that the latter shall employ him to manage and operate their ready-mix
concrete operations in the Philippines. Even assuming that there was no perfected contract,
respondent contends that his complaint alleges an alternative cause of action which is based on
the provisions of Articles 19 and 21 of the Civil Code.
As to the applicability of the doctrine of forum non conveniens, respondent avers that the
question of 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 judge, who is in the best position to determine whether special
circumstances require that the court desist from assuming jurisdiction over the suit.
The petition lacks merit.
Section 2, Rule 2 of the Rules of Court, as amended, defines a cause of action as the act or
omission by which a party violates a right of another. A cause of action exists if the following
elements are present: (1) a right in favor of the plaintiff by whatever means and under whatever
law it arises or is created; (2) an obligation on the part of the named defendant to respect or not
to violate such right; and, (3) an act or omission on the part of such defendant violative of the
right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for
which the latter may maintain an action for recovery of damages. 11
In Hongkong and Shanghai Banking Corporation Limited v. Catalan,12 this Court held:
The elementary test for failure to state a cause of action is whether the complaint
alleges facts which if true would justify the relief demanded. Stated otherwise, may the
court render a valid judgment upon the facts alleged therein? The inquiry is into the
sufficiency, not the veracity of the material allegations. If the allegations in the
complaint furnish sufficient basis on which it can be maintained, it should not be
dismissed regardless of the defense that may be presented by the defendants. 13
90 | C o n f l i c t o f L a w s C a s e s
Moreover, the complaint does not have to establish or allege facts proving the existence of a
cause of action at the outset; this will have to be done at the trial on the merits of the case. 14 To
sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim
for relief does not exist, rather than that a claim has been defectively stated, or is ambiguous,
indefinite or uncertain.15
Hence, in resolving whether or not the Complaint in the present case states a cause of action,
the trial court correctly limited itself to examining the sufficiency of the allegations in the
Complaint as well as the annexes thereto. It is proscribed from inquiring into the truth of the
allegations in the Complaint or the authenticity of any of the documents referred or attached to
the Complaint, since these are deemed hypothetically admitted by the respondent.
This Court has reviewed respondent’s allegations in its Complaint. In a nutshell, respondent
alleged that herein petitioners reneged on their contractual obligation to employ him on a
permanent basis. This allegation is sufficient to constitute a cause of action for damages.
The issue as to whether or not there was a perfected contract between petitioners and
respondent is a matter which is not ripe for determination in the present case; rather, this issue
must be taken up during trial, considering that its resolution would necessarily entail an
examination of the veracity of the allegations not only of herein respondent as plaintiff but also of
petitioners as defendants.
The Court does not agree with petitioners' contention that they were not privy to the negotiations
for respondent's possible employment. It is evident from paragraphs 24 to 28 of the
Complaint16 that, on various occasions, Klepzig conducted negotiations with respondent
regarding the latter's possible employment. In fact, Annex "H"17 of the complaint shows that it
was Klepzig who informed respondent that his company was no longer interested in employing
respondent. Hence, based on the allegations in the Complaint and the annexes attached
thereto, respondent has a cause of action against herein petitioners.
As to the question of jurisdiction, this Court has consistently held that where no employer-
employee relationship exists between the parties and no issue is involved which may be
resolved by reference to the Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction.18 In the present case, no employer-
employee relationship exists between petitioners and respondent. In fact, in his complaint,
private respondent is not seeking any relief under the Labor Code, but seeks payment of
damages on account of petitioners' alleged breach of their obligation under their agreement to
employ him. It is settled that an action for breach of contractual obligation is intrinsically a civil
dispute.19 In the alternative, respondent seeks redress on the basis of the provisions of Articles
19 and 21 of the Civil Code. Hence, it is clear that the present action is within the realm of civil
law, and jurisdiction over it belongs to the regular courts.20
With respect to the applicability of the principle of forum non conveniens in the present case, this
Court's ruling in Bank of America NT & SA v. Court of Appeals21 is instructive, to wit:
The doctrine of forum non conveniens, literally meaning ‘the forum is inconvenient’,
emerged in private international law to deter the practice of global forum shopping,
that is to prevent non-resident litigants from choosing the forum or place wherein to
bring their suit for malicious reasons, such as to secure procedural advantages, to
annoy and harass the defendant, to avoid overcrowded dockets, or to select a more
 friendly venue. Under this doctrine, a court, in conflicts of law cases, may refuse The facts of the case as summarized by the respondent appellate court are as follows:
impositions on its jurisdiction where it is not the most "convenient" or available forum
and the parties are not precluded from seeking remedies elsewhere.
Sometime in 1978, plaintiff [Menandro B. Laureano, herein petitioner], then Director of
Flight Operations and Chief Pilot of Air Manila, applied for employment with defendant
Whether a suit should be entertained or dismissed on the basis of said doctrine company [herein private respondent] through its Area Manager in Manila.
depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial court. In the case of Communication Materials and Design, Inc.
On September 30, 1978, after the usual personal interview, defendant wrote to
vs. Court of Appeals, this Court held that "xxx [a] Philippine Court may assume
plaintiff, offering a contract of employment as an expatriate B-707 captain for an
jurisdiction over the case if it chooses to do so; provided, that the following requisites
original period of two (2) years commencing on January 21, 1978. Plaintiff accepted
are met: (1) that the Philippine Court is one to which the parties may conveniently
the offer and commenced working on January 20, 1979. After passing the six-month
resort to; (2) that the Philippine Court is in a position to make an intelligent decision as
probation period, plaintiffs appointment was confirmed effective July 21, 1979. (Annex
to the law and the facts; and, (3) that the Philippine Court has or is likely to have
"B", p. 30, Rollo).
power to enforce its decision."

Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of
Appeals, that the doctrine of forum non conveniens should not be used as a
ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court
does not include said doctrine as a ground. This Court further ruled that while it
is within the discretion of the trial court to abstain from assuming jurisdiction
on this ground, it should do so only after vital facts are established, to
determine whether special circumstances require the court’s desistance; and
that the propriety of dismissing a case based on this principle of forum non
conveniens requires a factual determination, hence it is more properly
considered a matter of defense.22 (emphasis supplied)
In the present case, the factual circumstances cited by petitioners which would allegedly justify
the application of the doctrine of forum non conveniens are matters of defense, the merits of
which should properly be threshed out during trial.
WHEREFORE, the instant petition is DENIED and the assailed Decision and Resolution of the
Court of Appeals are AFFIRMED.
Costs against petitioners.
On July 21, 1979, defendant offered plaintiff an extension of his two-year contract to
five (5) years effective January 21, 1979 to January 20, 1984 subject to the terms and
conditions set forth in the contract of employment, which the latter accepted (Annex
"C" p. 31, Rec.).
During his service as B-707 captain, plaintiff on August 24, 1980, while in command of
a flight, committed a noise violation offense at the Zurich Airport, for which plaintiff
apologized.(Exh. "3", p. 307, Rec.).
Sometime in 1980, plaintiff featured in a tail scraping incident wherein the tail of the
aircraft scraped or touched the runway during landing. He was suspended for a few
days until he was investigated by board headed by Capt. Choy. He was reprimanded.
On September 25, 1981, plaintiff was invited to take a course of A-300 conversion
training at Aeroformacion, Toulouse, France at dependant's expense. Having
successfully completed and passed the training course, plaintiff was cleared on April
7, 1981, for solo duty as captain of the Airbus A-300 and subsequently appointed as
captain of the A-300 fleet commanding an Airbus A-300 in flights over Southeast Asia.
(Annexes "D", "E" and "F", pp. 34-38, Rec.).

Sometime in 1982, defendant, hit by a recession, initiated cost-cutting measures.

SO ORDERED.
Seventeen (17) expatriate captains in the Airbus fleet were found in excess of the
defendant's requirement (t.s.n., July 6, 1988. p. 11). Consequently, defendant
G.R. No. 114776 February 2, 2000 informed its expatriate pilots including plaintiff of the situation and advised them to
take advance leaves. (Exh. "15", p. 466, Rec.)
MENANDRO B. LAUREANO, petitioner,
vs. Realizing that the recession would not be for a short time, defendant decided to
COURT OF APPEALS AND SINGAPORE AIRLINES LIMITED, respondents. terminate its excess personnel (t.s.n., July 6, 1988, p. 17). It did not, however,
immediately terminate it's A-300 pilots. It reviewed their qualifications for possible
promotion to the B-747 fleet. Among the 17 excess Airbus pilots reviewed, twelve
QUISUMBING, J.:
were found qualified. Unfortunately, plaintiff was not one of the twelve.

This petition for review on certiorari under Rule 45 of the Rules of Court seeks to reverse the
On October 5, 1982, defendant informed plaintiff of his termination effective November
Decision of the Court of Appeals, dated October 29, 1993, in C.A. G.R. No. CV 34476, as well
1, 1982 and that he will be paid three (3) months salary in lieu of three months notice
as its Resolution dated February 28, 1994, which denied the motion for reconsideration.
(Annex "I", pp. 41-42, Rec.). Because he could not uproot his family on such short
notice, plaintiff requested a three-month notice to afford him time to exhaust all

91 | C o n f l i c t o f L a w s C a s e s
 possible avenues for reconsideration and retention. Defendant gave only two (2)
months notice and one (1) month salary. (t.s.n., Nov. 12, 1987. p. 25).
Aggrieved, plaintiff on June 29, 1983, instituted a case for illegal dismissal before the
Labor Arbiter. Defendant moved to dismiss on jurisdiction grounds. Before said motion
was resolved, the complaint was withdrawn. Thereafter, plaintiff filed the instant case
for damages due to illegal termination of contract of services before the court a
quo (Complaint, pp. 1-10, Rec.).
Again, defendant on February 11, 1987 filed a motion to dismiss alleging inter alia: (1)
that the court has no jurisdiction over the subject matter of the case, and (2) that
Philippine courts have no jurisdiction over the instant case. Defendant contends that
the complaint is for illegal dismissal together with a money claim arising out of and in
the course of plaintiffs employment "thus it is the Labor Arbiter and the NLRC who
have the jurisdiction pursuant to Article 217 of the Labor Code" and that, since plaintiff
was employed in Singapore, all other aspects of his employment contract and/or
documents executed in Singapore. Thus, defendant postulates that Singapore laws
should apply and courts thereat shall have jurisdiction. (pp. 50-69, Rec.).
In traversing defendant's arguments, plaintiff claimed that: (1) where the items
demanded in a complaint are the natural consequences flowing from a breach of an
obligation and not labor benefits, the case is intrinsically a civil dispute; (2) the case
involves a question that is beyond the field of specialization of labor arbiters; and (3) if
the complaint is grounded not on the employee's dismissal per se but on the manner
of said dismissal and the consequence thereof, the case falls under the jurisdiction of
the civil courts. (pp. 70-73, Rec.)
On March 23, 1987, the court a quo denied defendant's motion to dismiss (pp. 82-
84, Ibid). The motion for reconsideration was likewise denied. (p. 95 ibid.)
On September 16, 1987, defendant filed its answer reiterating the grounds relied upon
in its motion to dismiss and further arguing that plaintiff is barred by laches, waiver,
and estoppel from instituting the complaint and that he has no cause of action . (pp.
102-115)1
On April 10, 1991, the trial court handed down its decision in favor of plaintiff. The dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff Menandro Laureano
and against defendant Singapore Airlines Limited, ordering defendant to pay plaintiff
the amounts of —
SIN$396,104.00, or its equivalent in Philippine currency at the current rate of
exchange at the time of payment, as and for unearned compensation with legal
interest from the filing of the complaint until fully paid;
SIN$154,742.00, or its equivalent in Philippine currency at the current rate of
exchange at the time of payment; and the further amounts of P67,500.00 as
92 | C o n f l i c t o f L a w s C a s e s
consequential damages with legal interest from the filing of the complaint until fully
paid;
P1,000,000.00 as and for moral damages; P1,000,000.00 as and for exemplary
damages; and P100,000.00 as and for attorney's fees.
Costs against defendant.
SO ORDERED.2
Singapore Airlines timely appealed before the respondent court and raised the issues of
jurisdiction, validity of termination, estoppel, and damages.
On October 29, 1993, the appellate court set aside the decision of the trial court, thus,
. . . In the instant case, the action for damages due to illegal termination was filed by
plaintiff-appellee only on January 8, 1987 or more than four (4) years after the
effectivity date of his dismissal on November 1, 1982. Clearly, plaintiff-appellee's
action has already prescribed.
WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. The
complaint is hereby dismissed.
SO ORDERED.3
Petitioner's and Singapore Airlines' respective motions for reconsideration were denied.
Now, before the Court, petitioner poses the following queries:
1. IS THE PRESENT ACTION ONE BASED ON CONTRACT WHICH PRESCRIBES IN TEN
YEARS UNDER ARTICLE 1144 OF THE NEW CIVIL CODE OR ONE FOR DAMAGES
ARISING FROM AN INJURY TO THE RIGHTS OF THE PLAINTIFF WHICH PRESCRIBES IN
FOUR YEARS UNDER ARTICLE 1146 OF THE NEW CIVIL CODE?
2. CAN AN EMPLOYEE WITH A FIXED PERIOD OF EMPLOYMENT BE RETRENCHED BY
HIS EMPLOYER?
3. CAN THERE BE VALID RETRENCHMENT IF AN EMPLOYER MERELY FAILS TO REALIZE
THE EXPECTED PROFITS EVEN IF IT WERE NOT, IN FACT, INCURRING LOSSES?
At the outset, we find it necessary to state our concurrence on the assumption of jurisdiction by
the Regional Trial Court of Manila, Branch 9. The trial court rightly ruled on the application of
Philippine law, thus:
Neither can the Court determine whether the termination of the plaintiff is legal under
the Singapore Laws because of the defendant's failure to show which specific laws of
 Singapore Laws apply to this case. As substantially discussed in the preceding
paragraphs, the Philippine Courts do not take judicial notice of the laws of Singapore.
The defendant that claims the applicability of the Singapore Laws to this case has the
burden of proof. The defendant has failed to do so. Therefore, the Philippine law
should be applied.4
Respondent Court of Appeals acquired jurisdiction when defendant filed its appeal before said
court.5 On this matter, respondent court was correct when it barred defendant-appellant below
from raising further the issue of jurisdiction.6
Petitioner now raises the issue of whether his action is one based on Article 1144 or on Article
1146 of the Civil Code. According to him, his termination of employment effective November 1,
1982, was based on an employment contract which is under Article 1144, so his action should
prescribe in 10 years as provided for in said article. Thus he claims the ruling of the appellate
court based on Article 1146 where prescription is only four (4) years, is an error. The appellate
court concluded that the action for illegal dismissal originally filed before the Labor Arbiter on
June 29, 1983, but which was withdrawn, then filed again in 1987 before the Regional Trial
Court, had already prescribed.
In our view, neither Article 11447 nor Article 11468 of the Civil Code is here pertinent. What is
applicable is Article 291 of the Labor Code, viz:
Art. 291. Money claims. — All money claims arising from employee-employer relations
accruing during the effectivity of this Code shall be filed within three (3) years from the
time the cause of action accrued; otherwise they shall be forever barred.
xxx xxx xxx
What rules on prescription should apply in cases like this one has long been decided by this
Court. In illegal dismissal, it is settled, that the ten-year prescriptive period fixed in Article 1144 of
the Civil Code may not be invoked by petitioners, for the Civil Code is a law of general
application, while the prescriptive period fixed in Article 292 of the Labor Code [now Article 291]
is a SPECIAL LAW applicable to claims arising from employee-employer relations.9
More recently in De Guzman vs. Court of Appeals,10 where the money claim was based on a
written contract, the Collective Bargaining Agreement, the Court held:
. . . The language of Art. 291 of the Labor Code does not limit its application only to
"money claims specifically recoverable under said Code" but covers all money claims
arising from an employee-employer relations" (Citing Cadalin v. POEA Administrator,
238 SCRA 721, 764 [1994]; and Uy v. National Labor Relations Commission, 261
SCRA 505, 515 [1996]). . . .
It should be noted further that Article 291 of the Labor Code is a special law applicable
to money claims arising from employer-employee relations; thus, it necessarily
prevails over Article 1144 of the Civil Code, a general law. Basic is the rule in statutory
construction that "where two statutes are of equal theoretical application to a particular
case, the one designed therefore should prevail." (Citing Leveriza v. Intermediate
Appellate Court, 157 SCRA 282, 294.) Generalia specialibus non derogant.11
93 | C o n f l i c t o f L a w s C a s e s
In the light of Article 291, aforecited, we agree with the appellate court's conclusion that
petitioner's action for damages due to illegal termination filed again on January 8, 1987 or more
than four (4) years after the effective date of his dismissal on November 1, 1982 has already
prescribed.
In the instant case, the action for damages due to illegal termination was filed by
plaintiff-appelle only on January 8, 1987 or more than four (4) years after the effectivity
date of his dismissal on November 1, 1982. Clearly, plaintiff-appellee's action has
already prescribed.
We base our conclusion not on Article 1144 of the Civil Code but on which sets the prescription
period at three (3) years and which governs under this jurisdiction.
Petitioner claims that the running of the prescriptive period was tolled when he filed his
complaint for illegal dismissal before the Labor Arbiter of the National Labor Relations
Commission. However, this claim deserves scant consideration; it has no legal leg to stand on.
In Olympia International, Inc., vs., Court of Appeals, we held that "although the commencement
of a civil action stops the running of the statute of prescription or limitations, its dismissal or
voluntary abandonment by the plaintiff leaves in exactly the same position as though no action
had been commenced at all."12
Now, as to whether petitioner's separation from the company due to retrenchment was valid, the
appellate court found that the employment contract of petitioner allowed for pre-termination of
employment. We agree with the Court of Appeals when it said,
It is a settled rule that contracts have the force of law between the parties. From the
moment the same is perfected, the parties are bound not only to the fulfillment of what
has been expressly stipulated but also to all consequences which, according to their
nature, may be in keeping with good faith, usage and law. Thus, when plaintiff-
appellee accepted the offer of employment, he was bound by the terms and conditions
set forth in the contract, among others, the right of mutual termination by giving three
months written notice or by payment of three months salary. Such provision is clear
and readily understandable, hence, there is no room for interpretation.
xxx xxx xxx
Further, plaintiff-appellee's contention that he is not bound by the provisions of the
Agreement, as he is not a signatory thereto, deserves no merit. It must be noted that
when plaintiff-appellee's employment was confirmed, he applied for membership with
the Singapore Airlines Limited (Pilots) Association, the signatory to the
aforementioned Agreement. As such, plaintiff-appellee is estopped from questioning
the legality of the said agreement or any proviso contained therein.13
Moreover, the records of the present case clearly show that respondent court's decision is amply
supported by evidence and it did not err in its findings, including the reason for the retrenchment:
When defendant-appellant was faced with the world-wide recession of the airline
industry resulting in a slow down in the company's growth particularly in the regional
operation (Asian Area) where the Airbus 300 operates. It had no choice but to adopt
 cost cutting measures, such as cutting down services, number of frequencies of
flights, and reduction of the number of flying points for the A-300 fleet (t.s.n., July 6,
1988, pp. 17-18). As a result, defendant-appellant had to lay off A-300 pilots, including
plaintiff-appellee, which it found to be in excess of what is reasonably needed. 14
All these considered, we find sufficient factual and legal basis to conclude that petitioner's
termination from employment was for an authorized cause, for which he was given ample notice
and opportunity to be heard, by respondent company. No error nor grave abuse of discretion,
therefore, could be attributed to respondent appellate court.1âwphi1.nêt
ACCORDINGLY, the instant petition is DISMISSED. The decision of the Court of Appeals in
C.A. CV No. 34476 is AFFIRMED.
SO ORDERED.
G.R. No. 119602 October 6, 2000
WILDVALLEY SHIPPING CO., LTD. petitioner,
vs.
COURT OF APPEALS and PHILIPPINE PRESIDENT LINES INC., respondents.
Between mile 158 and 157, the vessel again experienced some vibrations. 9 These occurred at
4:12 a.m.10 It was then that the watch officer called the master to the bridge. 11
The master (captain) checked the position of the vessel12 and verified that it was in the centre of
the channel.13 He then went to confirm, or set down, the position of the vessel on the chart. 14 He
ordered Simplicio A. Monis, Chief Officer of the President Roxas, to check all the double bottom
tanks.15
At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River, 16 thus obstructing
the ingress and egress of vessels.
As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner Wildvalley
Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that day.
Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of
Manila, Branch III against Philippine President Lines, Inc. and Pioneer Insurance Company (the
underwriter/insurer of Philippine Roxas) for damages in the form of unearned profits, and interest
thereon amounting to US $400,000.00 plus attorney's fees, costs, and expenses of litigation.
The complaint against Pioneer Insurance Company was dismissed in an Order dated November
7, 1988.17

At the pre-trial conference, the parties agreed on the following facts:

DECISION

"1. The jurisdictional facts, as specified in their respective pleadings;

BUENA, J.:

"2. That defendant PPL was the owner of the vessel Philippine Roxas at the time of
This is a petition for review on certiorari seeking to set aside the decision of the Court of Appeals
the incident;
which reversed the decision of the lower court in CA-G.R. CV No. 36821, entitled "Wildvalley
Shipping Co., Ltd., plaintiff-appellant, versus Philippine President Lines, Inc., defendant-
appellant." "3. That defendant Pioneer Insurance was the insurance underwriter for defendant
PPL;
The antecedent facts of the case are as follows:
"4. That plaintiff Wildvalley Shipping Co., Inc. is the owner of the vessel Malandrinon,
whose passage was obstructed by the vessel Philippine Roxas at Puerto Ordaz,
Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President
Venezuela, as specified in par. 4, page 2 of the complaint;
Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore.
Upon the completion of the loading and when the vessel was ready to leave port, Mr. Ezzar del
Valle Solarzano Vasquez, an official pilot of Venezuela, was designated by the harbour "5. That on February 12, 1988, while the Philippine Roxas was navigating the channel
authorities in Puerto Ordaz to navigate the Philippine Roxas through the Orinoco River. 1He was at Puerto Ordaz, the said vessel grounded and as a result, obstructed navigation at
asked to pilot the said vessel on February 11, 19882 boarding it that night at 11:00 p.m.3 the channel;

The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge "6. That the Orinoco River in Puerto Ordaz is a compulsory pilotage channel;
together with the pilot (Vasquez), the vessel's third mate (then the officer on watch), and a
helmsman when the vessel left the port4 at 1:40 a.m. on February 12, 1988.5 Captain Colon left
"7. That at the time of the incident, the vessel, Philippine Roxas, was under the
the bridge when the vessel was under way.6
command of the pilot Ezzar Solarzano, assigned by the government thereat, but
plaintiff claims that it is under the command of the master;
The Philippine Roxas experienced some vibrations when it entered the San Roque Channel at
mile 172.7 The vessel proceeded on its way, with the pilot assuring the watch officer that the
"8. The plaintiff filed a case in Middleburg, Holland which is related to the present
vibration was a result of the shallowness of the channel.8
case;

94 | C o n f l i c t o f L a w s C a s e s
 "9. The plaintiff caused the arrest of the Philippine Collier, a vessel owned by the
defendant PPL;
"10. The Orinoco River is 150 miles long and it takes approximately 12 hours to
navigate out of the said river;
"11. That no security for the plaintiff's claim was given until after the Philippine Collier
was arrested; and
"12. That a letter of guarantee, dated 12-May-88 was issued by the Steamship Mutual
Underwriters Ltd."18
The trial court rendered its decision on October 16, 1991 in favor of the petitioner, Wildvalley
Shipping Co., Ltd. The dispositive portion thereof reads as follows:
"WHEREFORE, judgment is rendered for the plaintiff, ordering defendant Philippine President
Lines, Inc. to pay to the plaintiff the sum of U.S. $259,243.43, as actual and compensatory
damages, and U.S. $162,031.53, as expenses incurred abroad for its foreign lawyers, plus
additional sum of U.S. $22,000.00, as and for attorney's fees of plaintiff's local lawyer, and to
pay the cost of this suit.
"Defendant's counterclaim is dismissed for lack of merit.
"SO ORDERED."19
Both parties appealed: the petitioner appealing the non-award of interest with the private
respondent questioning the decision on the merits of the case.
After the requisite pleadings had been filed, the Court of Appeals came out with its questioned
decision dated June 14, 1994,20 the dispositive portion of which reads as follows:
"WHEREFORE, finding defendant-appellant's appeal to be meritorious, judgment is hereby
rendered reversing the Decision of the lower court. Plaintiff-appellant's Complaint is dismissed
and it is ordered to pay defendant-appellant the amount of Three Hundred Twenty-three
Thousand, Forty-two Pesos and Fifty-three Centavos (₱323,042.53) as and for attorney's fees
plus cost of suit. Plaintiff-appellant's appeal is DISMISSED.
"SO ORDERED."21
Petitioner filed a motion for reconsideration22 but the same was denied for lack of merit in the
resolution dated March 29, 1995.23
Hence, this petition.
The petitioner assigns the following errors to the court a quo:
95 | C o n f l i c t o f L a w s C a s e s
1. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT
UNDER PHILIPPINE LAW NO FAULT OR NEGLIGENCE CAN BE ATTRIBUTED TO
THE MASTER NOR THE OWNER OF THE "PHILIPPINE ROXAS" FOR THE
GROUNDING OF SAID VESSEL RESULTING IN THE BLOCKAGE OF THE RIO
ORINOCO;
2. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE
FINDINGS OF FACTS OF THE TRIAL COURT CONTRARY TO EVIDENCE;
3. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT
THE "PHILIPPINE ROXAS" IS SEAWORTHY;
4. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING
VENEZUELAN LAW DESPITE THE FACT THAT THE SAME HAS BEEN
SUBSTANTIALLY PROVED IN THE TRIAL COURT WITHOUT ANY OBJECTION
FROM PRIVATE RESPONDENT, AND WHOSE OBJECTION WAS INTERPOSED
BELATEDLY ON APPEAL;
5. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN AWARDING
ATTORNEY'S FEES AND COSTS TO PRIVATE RESPONDENT WITHOUT ANY
FAIR OR REASONABLE BASIS WHATSOEVER;
6. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT FINDING
THAT PETITIONER'S CAUSE IS MERITORIOUS HENCE, PETITIONER SHOULD
BE ENTITLED TO ATTORNEY'S FEES, COSTS AND INTEREST.
The petition is without merit.
The primary issue to be determined is whether or not Venezuelan law is applicable to the case
at bar.
It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are
not authorized to take judicial notice of them. Like any other fact, they must be alleged and
proved.24
A distinction is to be made as to the manner of proving a written and an unwritten law. The
former falls under Section 24, Rule 132 of the Rules of Court, as amended, the entire provision
of which is quoted hereunder. Where the foreign law sought to be proved is "unwritten," the oral
testimony of expert witnesses is admissible, as are printed and published books of reports of
decisions of the courts of the country concerned if proved to be commonly admitted in such
courts.25
Section 24 of Rule 132 of the Rules of Court, as amended, provides:
"Sec. 24. Proof of official record. -- The record of public documents referred to in paragraph (a)
of Section 19, when admissible for any purpose, may be evidenced by an official publication
thereof or by a copy attested by the officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that
such officer has the custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul general, consul, vice
consul, or consular agent or by any officer in the foreign service of the Philippines stationed in
the foreign country in which the record is kept, and authenticated by the seal of his office."
(Underscoring supplied)
The court has interpreted Section 25 (now Section 24) to include competent evidence like the
testimony of a witness to prove the existence of a written foreign law. 26
In the noted case of Willamette Iron & Steel Works vs. Muzzal,27 it was held that:
"… Mr. Arthur W. Bolton, an attorney-at-law of San Francisco, California, since the year 1918
under oath, quoted verbatim section 322 of the California Civil Code and stated that said section
was in force at the time the obligations of defendant to the plaintiff were incurred, i.e. on
November 5, 1928 and December 22, 1928. This evidence sufficiently established the fact that
the section in question was the law of the State of California on the above dates. A reading of
sections 300 and 301 of our Code of Civil Procedure will convince one that these sections do not
exclude the presentation of other competent evidence to prove the existence of a foreign law.
For a copy of a foreign public document to be admissible, the following requisites are mandatory:
(1) It must be attested by the officer having legal custody of the records or by his deputy; and (2)
It must be accompanied by a certificate by a secretary of the embassy or legation, consul
general, consul, vice consular or consular agent or foreign service officer, and with the seal of
his office.35 The latter requirement is not a mere technicality but is intended to justify the giving of
full faith and credit to the genuineness of a document in a foreign country. 36
It is not enough that the Gaceta Oficial, or a book published by the Ministerio de
Comunicaciones of Venezuela, was presented as evidence with Captain Monzon attesting it. It is
also required by Section 24 of Rule 132 of the Rules of Court that a certificate that Captain
Monzon, who attested the documents, is the officer who had legal custody of those records
made by a secretary of the embassy or legation, consul general, consul, vice consul or consular
agent or by any officer in the foreign service of the Philippines stationed in Venezuela, and
authenticated by the seal of his office accompanying the copy of the public document. No such
certificate could be found in the records of the case.
With respect to proof of written laws, parol proof is objectionable, for the written law itself is the
best evidence. According to the weight of authority, when a foreign statute is involved, the best
evidence rule requires that it be proved by a duly authenticated copy of the statute. 37

"`The foreign law is a matter of fact …You ask the witness what the law is; he may, from his
At this juncture, we have to point out that the Venezuelan law was not pleaded before the lower
recollection, or on producing and referring to books, say what it is.' (Lord Campbell concurring in
court.
an opinion of Lord Chief Justice Denman in a well-known English case where a witness was
called upon to prove the Roman laws of marriage and was permitted to testify, though he
referred to a book containing the decrees of the Council of Trent as controlling, Jones on A foreign law is considered to be pleaded if there is an allegation in the pleading about the
Evidence, Second Edition, Volume 4, pages 3148-3152.) x x x." existence of the foreign law, its import and legal consequence on the event or transaction in
issue.38
We do not dispute the competency of Capt. Oscar Leon Monzon, the Assistant Harbor Master
and Chief of Pilots at Puerto Ordaz, Venezuela,28 to testify on the existence of the Reglamento A review of the Complaint39 revealed that it was never alleged or invoked despite the fact that the
General de la Ley de Pilotaje (pilotage law of Venezuela)29 and the Reglamento Para la Zona de grounding of the M/V Philippine Roxas occurred within the territorial jurisdiction of Venezuela.
Pilotaje No 1 del Orinoco (rules governing the navigation of the Orinoco River). Captain Monzon
has held the aforementioned posts for eight years.30 As such he is in charge of designating the
We reiterate that under the rules of private international law, a foreign law must be properly
pilots for maneuvering and navigating the Orinoco River. He is also in charge of the documents
pleaded and proved as a fact. In the absence of pleading and proof, the laws of a foreign
that come into the office of the harbour masters.31
country, or state, will be presumed to be the same as our own local or domestic law and this is
known as processual presumption.40
Nevertheless, we take note that these written laws were not proven in the manner provided by
Section 24 of Rule 132 of the Rules of Court.
Having cleared this point, we now proceed to a thorough study of the errors assigned by the
petitioner.
32
The Reglamento General de la Ley de Pilotaje was published in the Gaceta Oficial of the
Republic of Venezuela. A photocopy of the Gaceta Oficial was presented in evidence as an
Petitioner alleges that there was negligence on the part of the private respondent that would
official publication of the Republic of Venezuela.
warrant the award of damages.

The Reglamento Para la Zona de Pilotaje No 1 del Orinoco is published in a book issued by
There being no contractual obligation, the private respondent is obliged to give only the diligence
the Ministerio de Comunicaciones of Venezuela.33 Only a photocopy of the said rules was
required of a good father of a family in accordance with the provisions of Article 1173 of the New
likewise presented as evidence.
Civil Code, thus:

Both of these documents are considered in Philippine jurisprudence to be public documents for
"Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which
they are the written official acts, or records of the official acts of the sovereign authority, official
is required by the nature of the obligation and corresponds with the circumstances of the
bodies and tribunals, and public officers of Venezuela.34

96 | C o n f l i c t o f L a w s C a s e s
persons, of the time and of the place. When negligence shows bad faith, the provisions of
articles 1171 and 2201, paragraph 2, shall apply.
"If the law or contract does not state the diligence which is to be observed in the performance,
that which is expected of a good father of a family shall be required."
The diligence of a good father of a family requires only that diligence which an ordinary prudent
man would exercise with regard to his own property. This we have found private respondent to
have exercised when the vessel sailed only after the "main engine, machineries, and other
auxiliaries" were checked and found to be in good running condition;41 when the master left a
competent officer, the officer on watch on the bridge with a pilot who is experienced in navigating
the Orinoco River; when the master ordered the inspection of the vessel's double bottom tanks
when the vibrations occurred anew.42
The Philippine rules on pilotage, embodied in Philippine Ports Authority Administrative Order No.
03-85, otherwise known as the Rules and Regulations Governing Pilotage Services, the Conduct
of Pilots and Pilotage Fees in Philippine Ports enunciate the duties and responsibilities of a
master of a vessel and its pilot, among other things.
The pertinent provisions of the said administrative order governing these persons are quoted
hereunder:
"Sec. 11. Control of Vessels and Liability for Damage. -- On compulsory pilotage grounds, the
Harbor Pilot providing the service to a vessel shall be responsible for the damage caused to a
vessel or to life and property at ports due to his negligence or fault. He can be absolved from
liability if the accident is caused by force majeure or natural calamities provided he has
exercised prudence and extra diligence to prevent or minimize the damage.
"The Master shall retain overall command of the vessel even on pilotage grounds whereby he
can countermand or overrule the order or command of the Harbor Pilot on board. In such event,
any damage caused to a vessel or to life and property at ports by reason of the fault or
negligence of the Master shall be the responsibility and liability of the registered owner of the
vessel concerned without prejudice to recourse against said Master.
"Such liability of the owner or Master of the vessel or its pilots shall be determined by competent
authority in appropriate proceedings in the light of the facts and circumstances of each particular
case.
"x x x
"Sec. 32. Duties and Responsibilities of the Pilots or Pilots’ Association. -- The duties and
responsibilities of the Harbor Pilot shall be as follows:
"x x x
"f) A pilot shall be held responsible for the direction of a vessel from the time he assumes his
work as a pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his
responsibility shall cease at the moment the Master neglects or refuses to carry out his order."
97 | C o n f l i c t o f L a w s C a s e s
The Code of Commerce likewise provides for the obligations expected of a captain of a vessel,
to wit:
"Art. 612. The following obligations shall be inherent in the office of captain:
"x x x
"7. To be on deck on reaching land and to take command on entering and leaving ports, canals,
roadsteads, and rivers, unless there is a pilot on board discharging his duties. x x x."
The law is very explicit. The master remains the overall commander of the vessel even when
there is a pilot on board. He remains in control of the ship as he can still perform the duties
conferred upon him by law43 despite the presence of a pilot who is temporarily in charge of the
vessel. It is not required of him to be on the bridge while the vessel is being navigated by a pilot.
However, Section 8 of PPA Administrative Order No. 03-85, provides:
"Sec. 8. Compulsory Pilotage Service - For entering a harbor and anchoring thereat, or passing
through rivers or straits within a pilotage district, as well as docking and undocking at any
pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign
trade shall be under compulsory pilotage.
"xxx."
The Orinoco River being a compulsory pilotage channel necessitated the engaging of a pilot who
was presumed to be knowledgeable of every shoal, bank, deep and shallow ends of the river. In
his deposition, pilot Ezzar Solarzano Vasquez testified that he is an official pilot in the Harbour at
Port Ordaz, Venezuela,44 and that he had been a pilot for twelve (12) years.45 He also had
experience in navigating the waters of the Orinoco River.46
The law does provide that the master can countermand or overrule the order or command of the
harbor pilot on board. The master of the Philippine Roxas deemed it best not to order him (the
pilot) to stop the vessel,47 mayhap, because the latter had assured him that they were navigating
normally before the grounding of the vessel.48Moreover, the pilot had admitted that on account of
his experience he was very familiar with the configuration of the river as well as the course
headings, and that he does not even refer to river charts when navigating the Orinoco River. 49
Based on these declarations, it comes as no surprise to us that the master chose not to regain
control of the ship. Admitting his limited knowledge of the Orinoco River, Captain Colon relied on
the knowledge and experience of pilot Vasquez to guide the vessel safely.
"Licensed pilots, enjoying the emoluments of compulsory pilotage, are in a different class from
ordinary employees, for they assume to have a skill and a knowledge of navigation in the
particular waters over which their licenses extend superior to that of the master; pilots are bound
to use due diligence and reasonable care and skill. A pilot's ordinary skill is in proportion to the
pilot's responsibilities, and implies a knowledge and observance of the usual rules of navigation,
acquaintance with the waters piloted in their ordinary condition, and nautical skill in avoiding all
known obstructions. The character of the skill and knowledge required of a pilot in charge of a
vessel on the rivers of a country is very different from that which enables a navigator to carry a (3) the accident must not have been due to any voluntary action or contribution on the part of the
vessel safely in the ocean. On the ocean, a knowledge of the rules of navigation, with charts that person injured.56
disclose the places of hidden rocks, dangerous shores, or other dangers of the way, are the
main elements of a pilot's knowledge and skill. But the pilot of a river vessel, like the harbor pilot,
As has already been held above, there was a temporary shift of control over the ship from the
is selected for the individual's personal knowledge of the topography through which the vessel is
master of the vessel to the pilot on a compulsory pilotage channel. Thus, two of the requisites
steered."50
necessary for the doctrine to apply, i.e., negligence and control, to render the respondent liable,
are absent.
We find that the grounding of the vessel is attributable to the pilot. When the vibrations were first
felt the watch officer asked him what was going on, and pilot Vasquez replied that "(they) were in
As to the claim that the ship was unseaworthy, we hold that it is not.
the middle of the channel and that the vibration was as (sic) a result of the shallowness of the
channel."51
The Lloyd’s Register of Shipping confirmed the vessel’s seaworthiness in a Confirmation of
Class issued on February 16, 1988 by finding that "the above named ship (Philippine Roxas)
Pilot Ezzar Solarzano Vasquez was assigned to pilot the vessel Philippine Roxas as well as
maintained the class "+100A1 Strengthened for Ore Cargoes, Nos. 2 and 8 Holds may be empty
other vessels on the Orinoco River due to his knowledge of the same. In his experience as a
(CC) and +LMC" from 31/12/87 up until the time of casualty on or about 12/2/88." 57 The same
pilot, he should have been aware of the portions which are shallow and which are not. His failure
would not have been issued had not the vessel been built according to the standards set by
to determine the depth of the said river and his decision to plod on his set course, in all
Lloyd's.
probability, caused damage to the vessel. Thus, we hold him as negligent and liable for its
grounding.
Samuel Lim, a marine surveyor, at Lloyd's Register of Shipping testified thus:
In the case of Homer Ramsdell Transportation Company vs. La Compagnie Generale
Transatlantique, 182 U.S. 406, it was held that: "Q Now, in your opinion, as a surveyor, did top side tank have any bearing at all to the
seaworthiness of the vessel?
"x x x The master of a ship, and the owner also, is liable for any injury done by the negligence of
the crew employed in the ship. The same doctrine will apply to the case of a pilot employed by "A Well, judging on this particular vessel, and also basing on the class record of the vessel,
the master or owner, by whose negligence any injury happens to a third person or his property: wherein recommendations were made on the top side tank, and it was given sufficient time to be
as, for example, by a collision with another ship, occasioned by his negligence. And it will make repaired, it means that the vessel is fit to travel even with those defects on the ship.
no difference in the case that the pilot, if any is employed, is required to be a licensed pilot;
provided the master is at liberty to take a pilot, or not, at his pleasure, for in such a case the
master acts voluntarily, although he is necessarily required to select from a particular class. On "COURT
the other hand, if it is compulsive upon the master to take a pilot, and, a fortiori, if he is
bound to do so under penalty, then, and in such case, neither he nor the owner will be What do you mean by that? You explain. The vessel is fit to travel even with defects? Is that
liable for injuries occasioned by the negligence of the pilot; for in such a case the pilot what you mean? Explain.
cannot be deemed properly the servant of the master or the owner, but is forced upon them, and
the maxim Qui facit per alium facit per se does not apply." (Underscoring supplied)
"WITNESS
52
Anent the river passage plan, we find that, while there was none, the voyage has been
sufficiently planned and monitored as shown by the following actions undertaken by the pilot, "A Yes, your Honor. Because the class society which register (sic) is the third party looking into
Ezzar Solarzano Vasquez, to wit: contacting the radio marina via VHF for information regarding the condition of the vessel and as far as their record states, the vessel was class or maintained,
the channel, river traffic,53 soundings of the river, depth of the river, bulletin on the buoys.54 The and she is fit to travel during that voyage."
officer on watch also monitored the voyage.55
"x x x
We, therefore, do not find the absence of a river passage plan to be the cause for the grounding
of the vessel. "ATTY. MISA

The doctrine of res ipsa loquitur does not apply to the case at bar because the circumstances Before we proceed to other matter, will you kindly tell us what is (sic) the 'class +100A1
surrounding the injury do not clearly indicate negligence on the part of the private respondent. Strengthened for Ore Cargoes', mean?
For the said doctrine to apply, the following conditions must be met: (1) the accident was of such
character as to warrant an inference that it would not have happened except for defendant's
negligence; (2) the accident must have been caused by an agency or instrumentality within the "WITNESS
exclusive management or control of the person charged with the negligence complained of; and

98 | C o n f l i c t o f L a w s C a s e s
"A Plus 100A1 means that the vessel was built according to Lloyd's rules and she is capable of "x x x"
carrying ore bulk cargoes, but she is particularly capable of carrying Ore Cargoes with No. 2 and
No. 8 holds empty.
Due to the unfounded filing of this case, the private respondent was unjustifiably forced to
litigate, thus the award of attorney’s fees was proper.
"x x x
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is DENIED and the decision of the
"COURT Court of Appeals in CA G.R. CV No. 36821 is AFFIRMED.

The vessel is classed, meaning? SO ORDERED.

"A Meaning she is fit to travel, your Honor, or seaworthy."58

It is not required that the vessel must be perfect. To be seaworthy, a ship must be reasonably fit G.R. No. 101538 June 23, 1992
to perform the services, and to encounter the ordinary perils of the voyage, contemplated by the
parties to the policy.59
AUGUSTO BENEDICTO SANTOS III, represented by his father and legal guardian,
Augusto Benedicto Santos, petitioner,
As further evidence that the vessel was seaworthy, we quote the deposition of pilot Vasquez: vs.
NORTHWEST ORIENT AIRLINES and COURT OF APPEALS, respondents.
"Q Was there any instance when your orders or directions were not complied with because of
the inability of the vessel to do so?

"A No. CRUZ, J.:

"Q. Was the vessel able to respond to all your commands and orders? This case involves the Proper interpretation of Article 28(1) of the Warsaw Convention, reading
as follows:
"A. The vessel was navigating normally."60
Art. 28. (1) An action for damage must be brought at the option of the
plaintiff, in the territory of one of the High Contracting Parties, either before
Eduardo P. Mata, Second Engineer of the Philippine Roxas submitted an accident report
the court of the domicile of the carrier or of his principal place of business,
wherein he stated that on February 11, 1988, he checked and prepared the main engine,
or where he has a place of business through which the contract has been
machineries and all other auxiliaries and found them all to be in good running condition and
made, or before the court at the place of destination.
ready for maneuvering. That same day the main engine, bridge and engine telegraph and
steering gear motor were also tested.61 Engineer Mata also prepared the fuel for consumption for
maneuvering and checked the engine generators.62 The petitioner is a minor and a resident of the Philippines. Private respondent Northwest Orient
Airlines (NOA) is a foreign corporation with principal office in Minnesota, U.S.A. and licensed to
do business and maintain a branch office in the Philippines.
Finally, we find the award of attorney’s fee justified.1âwphi1

On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco.
Article 2208 of the New Civil Code provides that:
U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled departure
date from Tokyo was December 20, 1986. No date was specified for his return to San
"Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than Francisco. 1
judicial costs, cannot be recovered, except:
On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco
"x x x airport for his scheduled departure to Manila. Despite a previous confirmation and re-
confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. He
therefore had to be wait-listed.
"(11) In any other case where the court deems it just and equitable that attorney's fees and
expenses of litigation should be recovered.

99 | C o n f l i c t o f L a w s C a s e s
On March 12, 1987, the petitioner sued NOA for damages in the Regional Trial Court of Makati.
On April 13, 1987, NOA moved to dismiss the complaint on the ground of lack of jurisdiction.
Citing the above-quoted article, it contended that the complaint could be instituted only in the
territory of one of the High Contracting Parties, before:
1. the court of the domicile of the carrier;
2. the court of its principal place of business;
3. the court where it has a place of business through which the contract had
been made;
4. the court of the place of destination.
The private respondent contended that the Philippines was not its domicile nor was this its
principal place of business. Neither was the petitioner's ticket issued in this country nor was his
destination Manila but San Francisco in the United States.
On February 1, 1988, the lower court granted the motion and dismissed the case. 2 The
petitioner appealed to the Court of Appeals, which affirmed the decision of the lower court. 3 On
June 26, 1991, the petitioner filed a motion for reconsideration, but the same was denied. 4 The
petitioner then came to this Court, raising substantially the same issues it submitted in the Court
of Appeals.
The assignment of errors may be grouped into two major issues, viz:
(1) the constitutionality of Article 28(1) of the Warsaw Convention; and
(2) the jurisdiction of Philippine courts over the case.
The petitioner also invokes Article 24 of the Civil Code on the protection of minors.
I
THE ISSUE OF CONSTITUTIONALITY
A. The petitioner claims that the lower court erred in not ruling that Article
28(1) of the Warsaw Convention violates the constitutional guarantees of
due process and equal protection.
The Republic of the Philippines is a party to the Convention for the Unification of Certain Rules
Relating to International Transportation by Air, otherwise known as the Warsaw Convention. It
took effect on February 13, 1933. The Convention was concurred in by the Senate, through its
Resolution No. 19, on May 16, 1950. The Philippine instrument of accession was signed by
President Elpidio Quirino on October 13, 1950, and was deposited with the Polish government
on November 9, 1950. The Convention became applicable to the Philippines on February 9,
100 | C o n f l i c t o f L a w s C a s e s
1951. On September 23, 1955, President Ramon Magsaysay issued Proclamation No. 201,
declaring our formal adherence thereto. "to the end that the same and every article and clause
thereof may be observed and fulfilled in good faith by the Republic of the Philippines and the
citizens thereof." 5
The Convention is thus a treaty commitment voluntarily assumed by the Philippine government
and, as such, has the force and effect of law in this country.
The petitioner contends that Article 28(1) cannot be applied in the present case because it is
unconstitutional. He argues that there is no substantial distinction between a person who
purchases a ticket in Manila and a person who purchases his ticket in San Francisco. The
classification of the places in which actions for damages may be brought is arbitrary and
irrational and thus violates the due process and equal protection clauses.
It is well-settled that courts will assume jurisdiction over a constitutional question only if it is
shown that the essential requisites of a judicial inquiry into such a question are first satisfied.
Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible
of judicial determination; the constitutional question must have been opportunely raised by the
proper party; and the resolution of the question is unavoidably necessary to the decision of the
case itself. 6
Courts generally avoid having to decide a constitutional question. This attitude is based on the
doctrine of separation of powers, which enjoins upon the departments of the government a
becoming respect for each other's acts.
The treaty which is the subject matter of this petition was a joint legislative-executive act. The
presumption is that it was first carefully studied and determined to be constitutional before it was
adopted and given the force of law in this country.
The petitioner's allegations are not convincing enough to overcome this presumption.
Apparently, the Convention considered the four places designated in Article 28 the most
convenient forums for the litigation of any claim that may arise between the airline and its
passenger, as distinguished from all other places. At any rate, we agree with the respondent
court that this case can be decided on other grounds without the necessity of resolving the
constitutional issue.
B. The petitioner claims that the lower court erred in not ruling that Art. 28(1)
of the Warsaw Convention is inapplicable because of a fundamental change
in the circumstances that served as its basis.
The petitioner goes at great lengths to show that the provisions in the Convention were intended
to protect airline companies under "the conditions prevailing then and which have long ceased to
exist." He argues that in view of the significant developments in the airline industry through the
years, the treaty has become irrelevant. Hence, to the extent that it has lost its basis for
approval, it has become unconstitutional.
The petitioner is invoking the doctrine of rebus sic stantibus. According to Jessup, "this doctrine
constitutes an attempt to formulate a legal principle which would justify non-performance of a
treaty obligation if the conditions with relation to which the parties contracted have changed so
materially and so unexpectedly as to create a situation in which the exaction of performance
would be unreasonable." 7 The key element of this doctrine is the vital change in the condition of
the contracting parties that they could not have foreseen at the time the treaty was concluded.
The Court notes in this connection the following observation made in Day v. Trans World
Airlines, Inc.: 8
The Warsaw drafters wished to create a system of liability rules that would
cover all the hazards of air travel . . . The Warsaw delegates knew that, in
the years to come, civil aviation would change in ways that they could not
foresee. They wished to design a system of air law that would be both
durable and flexible enough to keep pace with these changes . . . The ever-
changing needs of the system of civil aviation can be served within the
framework they created.
It is true that at the time the Warsaw Convention was drafted, the airline industry was still in its
infancy. However, that circumstance alone is not sufficient justification for the rejection of the
treaty at this time. The changes recited by the petitioner were, realistically, not entirely
unforeseen although they were expected in a general sense only. In fact, the Convention itself,
anticipating such developments, contains the following significant provision:
Article 41. Any High Contracting Party shall be entitled not earlier than two
years after the coming into force of this convention to call for the assembling
of a new international conference in order to consider any improvements
which may be made in this convention. To this end, it will communicate with
the Government of the French Republic which will take the necessary
measures to make preparations for such conference.
But the more important consideration is that the treaty has not been rejected by the Philippine
government. The doctrine of rebus sic stantibus does not operate automatically to render the
treaty inoperative. There is a necessity for a formal act of rejection, usually made by the head of
State, with a statement of the reasons why compliance with the treaty is no longer required.
In lieu thereof, the treaty may be denounced even without an expressed justification for this
action. Such denunciation is authorized under its Article 39, viz:
Article 39. (1) Any one of the High Contracting Parties may denounce this
convention by a notification addressed to the Government of the Republic of
Poland, which shall at once inform the Government of each of the High
Contracting Parties.
(2) Denunciation shall take effect six months after the notification of
denunciation, and shall operate only as regards the party which shall have
proceeded to denunciation.
Obviously. rejection of the treaty, whether on the ground of rebus sic stantibus or pursuant to
Article 39, is not a function of the courts but of the other branches of government. This is a
political act. The conclusion and renunciation of treaties is the prerogative of the political
101 | C o n f l i c t o f L a w s C a s e s
departments and may not be usurped by the judiciary. The courts are concerned only with the
interpretation and application of laws and treaties in force and not with their wisdom or efficacy.
C. The petitioner claims that the lower court erred in ruling that the plaintiff
must sue in the United States, because this would deny him the right to
access to our courts.
The petitioner alleges that the expenses and difficulties he will incur in filing a suit in the United
States would constitute a constructive denial of his right to access to our courts for the protection
of his rights. He would consequently be deprived of this vital guaranty as embodied in the Bill of
Rights.
Obviously, the constitutional guaranty of access to courts refers only to courts with appropriate
jurisdiction as defined by law. It does not mean that a person can go to any court for redress of
his grievances regardless of the nature or value of his claim. If the petitioner is barred from filing
his complaint before our courts, it is because they are not vested with the appropriate jurisdiction
under the Warsaw Convention, which is part of the law of our land.
II
THE ISSUE OF JURISDICTION.
A. The petitioner claims that the lower court erred in not ruling that Article
28(1) of the Warsaw Convention is a rule merely of venue and was waived
by defendant when it did not move to dismiss on the ground of improper
venue.
By its own terms, the Convention applies to all international transportation of persons performed
by aircraft for hire.
International transportation is defined in paragraph (2) of Article 1 as follows:
(2) For the purposes of this convention, the expression "international
transportation" shall mean any transportation in which, according to the
contract made by the parties, the place of departure and the place of
destination, whether or not there be a break in the transportation or a
transshipment, are situated [either] within the territories of two High
Contracting Parties . . .
Whether the transportation is "international" is determined by the contract of the parties, which in
the case of passengers is the ticket. When the contract of carriage provides for the
transportation of the passenger between certain designated terminals "within the territories of
two High Contracting Parties," the provisions of the Convention automatically apply and
exclusively govern the rights and liabilities of the airline and its passenger.
Since the flight involved in the case at bar is international, the same being from the United
States to the Philippines and back to the United States, it is subject to the provisions of the
Warsaw Convention, including Article 28(1), which enumerates the four places where an action
for damages may be brought.
Whether Article 28(1) refers to jurisdiction or only to venue is a question over which authorities
are sharply divided. While the petitioner cites several cases holding that Article 28(1) refers to
venue rather than jurisdiction, 9 there are later cases cited by the private respondent supporting
the conclusion that the provision is jurisdictional. 10
Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by consent
or waiver upon d court which otherwise would have no jurisdiction over the subject-matter of an
action; but the venue of an action as fixed by statute may be changed by the consent of the
parties and an objection that the plaintiff brought his suit in the wrong county may be waived by
the failure of the defendant to make a timely objection. In either case, the court may render a
valid judgment. Rules as to jurisdiction can never be left to the consent or agreement of the
parties, whether or not a prohibition exists against their alteration. 11
A number of reasons tends to support the characterization of Article 28(1) as a jurisdiction and
not a venue provision. First, the wording of Article 32, which indicates the places where the
action for damages "must" be brought, underscores the mandatory nature of Article 28(1).
Second, this characterization is consistent with one of the objectives of the Convention, which is
to "regulate in a uniform manner the conditions of international transportation by air." Third, the
Convention does not contain any provision prescribing rules of jurisdiction other than Article
28(1), which means that the phrase "rules as to jurisdiction" used in Article 32 must refer only to
Article 28(1). In fact, the last sentence of Article 32 specifically deals with the exclusive
enumeration in Article 28(1) as "jurisdictions," which, as such, cannot be left to the will of the
parties regardless of the time when the damage occurred.
This issue was analyzed in the leading case of Smith v. Canadian Pacific Airways,
Ltd., 12 where it was held:
. . . Of more, but still incomplete, assistance is the wording of Article 28(2),
especially when considered in the light of Article 32. Article 28(2) provides
that "questions of procedure shall be governed by the law of the court to
which the case is submitted" (Emphasis supplied). Section (2) thus may be
read to leave for domestic decision questions regarding the suitability and
location of a particular Warsaw Convention case.
In other words, where the matter is governed by the Warsaw Convention, jurisdiction takes on a
dual concept. Jurisdiction in the international sense must be established in accordance with
Article 28(1) of the Warsaw Convention, following which the jurisdiction of a particular court must
be established pursuant to the applicable domestic law. Only after the question of which court
has jurisdiction is determined will the issue of venue be taken up. This second question shall be
governed by the law of the court to which the case is submitted.
The petitioner submits that since Article 32 states that the parties are precluded "before the
damages occurred" from amending the rules of Article 28(1) as to the place where the action
may be brought, it would follow that the Warsaw Convention was not intended to preclude them
from doing so "after the damages occurred."
102 | C o n f l i c t o f L a w s C a s e s
Article 32 provides:
Art. 32. Any clause contained in the contract and all special agreements
entered into before the damage occurred by which the parties purport to
infringe the rules laid down by this convention, whether by deciding the law
to be applied, or by altering the rules as to jurisdiction, shall be null and
void. Nevertheless for the transportation of goods, arbitration clauses shall
be allowed, subject to this convention, if the arbitration is to take place
within one of the jurisdictions referred to in the first paragraph of Article 28.
His point is that since the requirements of Article 28(1) can be waived "after the damages (shall
have) occurred," the article should be regarded as possessing the character of a "venue" and
not of a "jurisdiction" provision. Hence, in moving to dismiss on the ground of lack of jurisdiction,
the private respondent has waived improper venue as a ground to dismiss.
The foregoing examination of Article 28(1) in relation to Article 32 does not support this
conclusion. In any event, we agree that even granting arguendo that Article 28(1) is a venue and
not a jurisdictional provision, dismissal of the case was still in order. The respondent court was
correct in affirming the ruling of the trial court on this matter, thus:
Santos' claim that NOA waived venue as a ground of its motion to dismiss is
not correct. True it is that NOA averred in its MOTION TO DISMISS that the
ground thereof is "the Court has no subject matter jurisdiction to entertain
the Complaint" which SANTOS considers as equivalent to "lack of
jurisdiction over the subject matter . . ." However, the gist of NOA's
argument in its motion is that the Philippines is not the proper place where
SANTOS could file the action — meaning that the venue of the action is
improperly laid. Even assuming then that the specified ground of the motion
is erroneous, the fact is the proper ground of the motion — improper venue
— has been discussed therein.
Waiver cannot be lightly inferred. In case of doubt, it must be resolved in favor of non-waiver if
there are special circumstances justifying this conclusion, as in the petition at bar. As we
observed in Javier vs. Intermediate Court of Appeals: 13
Legally, of course, the lack of proper venue was deemed waived by the
petitioners when they failed to invoke it in their original motion to dismiss.
Even so, the motivation of the private respondent should have been taken
into account by both the trial judge and the respondent court in arriving at
their decisions.
The petitioner also invokes KLM Royal Dutch Airlines v. RTC, 14 a decision of our Court of
Appeals, where it was held that Article 28(1) is a venue provision. However, the private
respondent avers that this was in effect reversed by the case of Aranas v. United
Airlines, 15 where the same court held that Article 28(1) is a jurisdictional provision. Neither of
these cases is binding on this Court, of course, nor was either of them appealed to us.
Nevertheless, we here express our own preference for the later case of Aranas insofar as its
pronouncements on jurisdiction conform to the judgment we now make in this petition.
 B. The petitioner claims that the lower court erred in not ruling that under
Article 28(1) of the Warsaw Convention, this case was properly filed in the
Philippines, because Manila was the destination of the plaintiff.
The Petitioner contends that the facts of this case are analogous to those in Aanestad v. Air
Canada. 16 In that case, Mrs. Silverberg purchased a round-trip ticket from Montreal to Los
Angeles and back to Montreal. The date and time of departure were specified but not of the
return flight. The plane crashed while on route from Montreal to Los Angeles, killing Mrs.
Silverberg. Her administratrix filed an action for damages against Air Canada in the U.S. District
Court of California. The defendant moved to dismiss for lack of jurisdiction but the motion was
denied thus:
. . . It is evident that the contract entered into between Air Canada and Mrs.
Silverberg as evidenced by the ticket booklets and the Flight Coupon No. 1,
was a contract for Air Canada to carry Mrs. Silverberg to Los Angeles on a
certain flight, a certain time and a certain class, but that the time for her to
return remained completely in her power. Coupon No. 2 was only a
continuing offer by Air Canada to give her a ticket to return to Montreal
between certain dates. . . .
The only conclusion that can be reached then, is that "the place of
destination" as used in the Warsaw Convention is considered by both the
Canadian C.T.C. and the United States C.A.B. to describe at least two
"places of destination," viz., the "place of destination" of a particularflight
either an "outward destination" from the "point of origin" or from the
"outward point of destination" to any place in Canada.
Thus the place of destination under Art. 28 and Art. 1 of the Warsaw
Convention of the flight on which Mrs. Silverberg was killed, was Los
Angeles according to the ticket, which was the contract between the parties
and the suit is properly filed in this Court which has jurisdiction.
The Petitioner avers that the present case falls squarely under the above ruling because the
date and time of his return flight to San Francisco were, as in the Aanestad case, also left open.
Consequently, Manila and not San Francisco should be considered the petitioner's destination.
The private respondent for its part invokes the ruling in Butz v. British Airways, 17 where the
United States District Court (Eastern District of Pennsylvania) said:
. . . Although the authorities which addressed this precise issue are not
extensive, both the cases and the commentators are almost unanimous in
concluding that the "place of destination" referred to in the Warsaw
Convention "in a trip consisting of several parts . . . is the ultimate
destination that is accorded treaty jurisdiction." . . .
But apart from that distinguishing feature, I cannot agree with the Court's
analysis in Aanestad; whether the return portion of the ticket is
characterized as an option or a contract, the carrier was legally bound to
transport the passenger back to the place of origin within the prescribed
103 | C o n f l i c t o f L a w s C a s e s
time and. the passenger for her part agreed to pay the fare and, in fact, did
pay the fare. Thus there was mutuality of obligation and a binding contract
of carriage, The fact that the passenger could forego her rights under the
contract does not make it any less a binding contract. Certainly, if the
parties did not contemplate the return leg of the journey, the passenger
would not have paid for it and the carrier would not have issued a round trip
ticket.
We agree with the latter case. The place of destination, within the meaning of the Warsaw
Convention, is determined by the terms of the contract of carriage or, specifically in this case,
the ticket between the passenger and the carrier. Examination of the petitioner's ticket shows
that his ultimate destination is San Francisco. Although the date of the return flight was left open,
the contract of carriage between the parties indicates that NOA was bound to transport the
petitioner to San Francisco from Manila. Manila should therefore be considered merely an
agreed stopping place and not the destination.
The petitioner submits that the Butz case could not have overruled the Aanestad case because
these decisions are from different jurisdictions. But that is neither here nor there. In fact, neither
of these cases is controlling on this Court. If we have preferred the Butz case, it is because,
exercising our own freedom of choice, we have decided that it represents the better, and correct,
interpretation of Article 28(1).
Article 1(2) also draws a distinction between a "destination" and an "agreed stopping place." It is
the "destination" and not an "agreed stopping place" that controls for purposes of ascertaining
jurisdiction under the Convention.
The contract is a single undivided operation, beginning with the place of departure and ending
with the ultimate destination. The use of the singular in this expression indicates the
understanding of the parties to the Convention that every contract of carriage has one place of
departure and one place of destination. An intermediate place where the carriage may be broken
is not regarded as a "place of destination."
C. The petitioner claims that the lower court erred in not ruling that under
Art. 28(1) of the Warsaw Convention, this case was properly filed in the
Philippines because the defendant has its domicile in the Philippines.
The petitioner argues that the Warsaw Convention was originally written in French and that in
interpreting its provisions, American courts have taken the broad view that the French legal
meaning must govern. 18 In French, he says, the "domicile" of the carrier means every place
where it has a branch office.
The private respondent notes, however, that in Compagnie Nationale Air France vs.
Giliberto, 19 it was held:
The plaintiffs' first contention is that Air France is domiciled in the United
States. They say that the domicile of a corporation includes any country
where the airline carries on its business on "a regular and substantial basis,"
and that the United States qualifies under such definition. The meaning of
domicile cannot, however, be so extended. The domicile of a corporation is
 customarily regarded as the place where it is incorporated, and the courts
have given the meaning to the term as it is used in article 28(1) of the
Convention. (See Smith v. Canadian Pacific Airways, Ltd. (2d Cir. 1971),
452 F2d 798, 802; Nudo v. Societe Anonyme Belge d' Exploitation de la
Navigation Aerienne Sabena Belgian World Airlines (E.D. pa. 1962). 207 F.
Supp, 191; Karfunkel v. Compagnie Nationale Air France (S.D.N.Y. 1977),
427 F. Suppl. 971, 974). Moreover, the structure of article 28(1), viewed as
a whole, is also incompatible with the plaintiffs' claim. The article, in stating
that places of business are among the bases of the jurisdiction, sets out two
places where an action for damages may be brought; the country where the
carrier's principal place of business is located, and the country in which it
has a place of business through which the particular contract in question
was made, that is, where the ticket was bought, Adopting the plaintiffs'
theory would at a minimum blur these carefully drawn distinctions by
creating a third intermediate category. It would obviously introduce
uncertainty into litigation under the article because of the necessity of
having to determine, and without standards or criteria, whether the amount
of business done by a carrier in a particular country was "regular" and
"substantial." The plaintiff's request to adopt this basis of jurisdiction is in
effect a request to create a new jurisdictional standard for the Convention.
Furthermore, it was argued in another case 20 that:
. . . In arriving at an interpretation of a treaty whose sole official language is
French, are we bound to apply French law? . . . We think this question and
the underlying choice of law issue warrant some discussion
. . . We do not think this statement can be regarded as a conclusion that
internal French law is to be "applied" in the choice of law sense, to
determine the meaning and scope of the Convention's terms. Of course,
French legal usage must be considered in arriving at an accurate English
translation of the French. But when an accurate English translation is made
and agreed upon, as here, the inquiry into meaning does not then revert to a
quest for a past or present French law to be "applied" for revelation of the
proper scope of the terms. It does not follow from the fact that the treaty is
written in French that in interpreting it, we are forever chained to French law,
either as it existed when the treaty was written or in its present state of
development. There is no suggestion in the treaty that French law was
intended to govern the meaning of Warsaw's terms, nor have we found any
indication to this effect in its legislative history or from our study of its
application and interpretation by other courts. Indeed, analysis of the cases
indicates that the courts, in interpreting and applying the Warsaw
Convention, have, not considered themselves bound to apply French law
simply because the Convention is written in French. . . .
We agree with these rulings.
Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be
filed under Article 28(1). By specifying the three other places, to wit, the principal place of
business of the carrier, its place of business where the contract was made, and the place of
destination, the article clearly meant that these three other places were not comprehended in the
term "domicile."
104 | C o n f l i c t o f L a w s C a s e s
D. The petitioner claims that the lower court erred in not ruling that Art. 28(1)
of the Warsaw Convention does not apply to actions based on tort.
The petitioner alleges that the gravamen of the complaint is that private respondent acted
arbitrarily and in bad faith, discriminated against the petitioner, and committed a willful
misconduct because it canceled his confirmed reservation and gave his reserved seat to
someone who had no better right to it. In short. the private respondent committed a tort.
Such allegation, he submits, removes the present case from the coverage of the Warsaw
Convention. He argues that in at least two American cases, 21 it was held that Article 28(1) of
the Warsaw Convention does not apply if the action is based on tort.
This position is negated by Husserl v. Swiss Air Transport Company, 22 where the article in
question was interpreted thus:
. . . Assuming for the present that plaintiff's claim is "covered" by Article 17,
Article 24 clearly excludes any relief not provided for in the Convention as
modified by the Montreal Agreement. It does not, however, limit the kind of
cause of action on which the relief may be founded; rather it provides that
any action based on the injuries specified in Article 17 "however
founded," i.e., regardless of the type of action on which relief is founded,
can only be brought subject to the conditions and limitations established by
the Warsaw System. Presumably, the reason for the use of the phrase
"however founded," in two-fold: to accommodate all of the multifarious
bases on which a claim might be founded in different countries, whether
under code law or common law, whether under contract or tort, etc.; and to
include all bases on which a claim seeking relief for an injury might be
founded in any one country. In other words, if the injury occurs as described
in Article 17, any relief available is subject to the conditions and limitations
established by the Warsaw System, regardless of the particular cause of
action which forms the basis on which a plaintiff could seek
relief . . .
The private respondent correctly contends that the allegation of willful misconduct resulting in a
tort is insufficient to exclude the case from the comprehension of the Warsaw Convention. The
petitioner has apparently misconstrued the import of Article 25(l) of the Convention, which reads
as follows:
Art. 25 (1). The carrier shall not be entitled to avail himself of the provisions
of this Convention which exclude or limit his liability. if the damage is caused
by his willful misconduct or by such default on his part as, in accordance
with the law of the court to which the case is submitted, is considered to be
equivalent to willful misconduct.
It is understood under this article that the court called upon to determine the applicability of the
limitation provision must first be vested with the appropriate jurisdiction. Article 28(1) is the
provision in the Convention which defines that jurisdiction. Article 22 23 merely fixes the
monetary ceiling for the liability of the carrier in cases covered by the Convention. If the carrier is
indeed guilty of willful misconduct, it can avail itself of the limitations set forth in this article. But
this can be done only if the action has first been commenced properly under the rules on
jurisdiction set forth in Article 28(1).
III
THE ISSUE OF PROTECTION TO MINORS
The petitioner calls our attention to Article 24 of the Civil Code, which states:
Art. 24. In all contractual property or other relations, when one of the parties
is at a disadvantage on account of his moral dependence, ignorance,
indigence, mental weakness, tender age or other handicap, the courts must
be vigilant for his protection.
Application of this article to the present case is misplaced. The above provision assumes that
the court is vested with jurisdiction to rule in favor of the disadvantaged minor, As already
explained, such jurisdiction is absent in the case at bar.
CONCLUSION
A number of countries have signified their concern over the problem of citizens being denied
access to their own courts because of the restrictive provision of Article 28(1) of the Warsaw
Convention. Among these is the United States, which has proposed an amendment that would
enable the passenger to sue in his own domicile if the carrier does business in that jurisdiction.
The reason for this proposal is explained thus:
In the event a US citizen temporarily residing abroad purchases a Rome to
New York to Rome ticket on a foreign air carrier which is generally subject
to the jurisdiction of the US, Article 28 would prevent that person from suing
the carrier in the US in a "Warsaw Case" even though such a suit could be
brought in the absence of the Convention.
The proposal was incorporated in the Guatemala Protocol amending the Warsaw Convention,
which was adopted at Guatemala City on March 8,
1971. 24 But it is still ineffective because it has not yet been ratified by the required minimum
number of contracting parties. Pending such ratification, the petitioner will still have to file his
complaint only in any of the four places designated by Article 28(1) of the Warsaw Convention.
The proposed amendment bolsters the ruling of this Court that a citizen does not necessarily
have the right to sue in his own courts simply because the defendant airline has a place of
business in his country.
The Court can only sympathize with the petitioner, who must prosecute his claims in the United
States rather than in his own country at least inconvenience. But we are unable to grant him the
relief he seeks because we are limited by the provisions of the Warsaw Convention which
continues to bind us. It may not be amiss to observe at this point that the mere fact that he will
have to litigate in the American courts does not necessarily mean he will litigate in vain. The
105 | C o n f l i c t o f L a w s C a s e s
judicial system of that country in known for its sense of fairness and, generally, its strict
adherence to the rule of law.
WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so ordered.
United States Supreme Court
INTERNATIONAL SHOE CO. v. WASHINGTON, (1945)
No. 107
Argued: Decided: December 3, 1945
Appeal from the Supreme Court of the State of Washington. [326 U.S. 310, 311] Mr. Henry C.
Lowenhaupt, of St. Louis Mo., for appellant.
Mr. George W. Wilkins, of Olympia, Wash., for appellees.
Mr. Chief Justice STONE delivered the opinion of the Court.
The questions for decision are (1) whether, within the limitations of the due process clause of the
Fourteenth Amendment, appellant, a Delaware corporation, has by its activities in the State of
Washington rendered itself amenable to proceedings in the courts of that state to recover unpaid
contributions to the state unemployment compensation fund exacted by state statutes,
Washington Unemployment Compensation Act, Washington Revised Statutes, 9998-103a
through 9998-123a, 1941 Supp., and (2) whether the state can exact those contributions
consistently with the due process clause of the Fourteenth Amendment.
The statutes in question set up a comprehensive scheme of unemployment compensation, the
costs of which are defrayed by contributions required to be made by employers to a state
unemployment compensation fund.[326 U.S. 310, 312] The contributions are a specified
percentage of the wages payable annually by each employer for his employees' services in the
state. The assessment and collection of the contributions and the fund are administered by
respondents. Section 14(c) of the Act, Wash.Rev.Stat. 1941 Supp., 9998- 114c, authorizes
respondent Commissioner to issue an order and notice of assessment of delinquent
contributions upon prescribed personal service of the notice upon the employer if found within
the state, or, if not so found, by mailing the notice to the employer by registered mail at his last
known address. That section also authorizes the Commissioner to collect the assessment by
distraint if it is not paid within ten days after service of the notice. By 14(e) and 6(b) the order of
assessment may be administratively reviewed by an appeal tribunal within the office of
unemployment upon petition of the employer, and this determination is by 6(i) made subject to
judicial review on questions of law by the state Superior Court, with further right of appeal in the
state Supreme Court as in other civil cases.
In this case notice of assessment for the years in question was personally served upon a sales
solicitor employed by appellant in the State of Washington, and a copy of the notice was mailed
by registered mail to appellant at its address in St. Louis, Missouri. Appellant appeared specially
before the office of unemployment and moved to set aside the order and notice of assessment on
the ground that the service upon appellant's salesman was not proper service upon appellant;
that appellant was not a corporation of the State of Washington and was not doing business
within the state; that it had no agent within the state upon whom service could be made; and
that appellant is not an employer and does not furnish employment within the meaning of the
statute.
The motion was heard on evidence and a stipulation of facts by the appeal tribunal which denied
the motion[326 U.S. 310, 313] and ruled that respondent Commissioner was entitled to recover
the unpaid contributions. That action was affirmed by the Commissioner; both the Superior
Court and the Supreme Court affirmed. 154 P.2d 801. Appellant in each of these courts assailed
the statute as applied, as a violation of the due process clause of the Fourteenth Amendment, and
as imposing a constitutionally prohibited burden on interstate commerce. The cause comes here
on appeal under 237(a) of the Judicial Code, 28 U.S.C. 344(a), 28 U.S.C.A. 344(a), appellant
assigning as error that the challenged statutes as applied infringe the due process clause of the
Fourteenth Amendment and the commerce clause.
The facts as found by the appeal tribunal and accepted by the state Superior Court and Supreme
Court, are not in dispute. Appellant is a Delaware corporation, having its principal place of
business in St. Louis, Missouri, and is engaged in the manufacture and sale of shoes and other
footwear. It maintains places of business in several states, other than Washington, at which its
manufacturing is carried on and from which its merchandise is distributed interstate through
several sales units or branches located outside the State of Washington.
Appellant has no office in Washington and makes no contracts either for sale or purchase of
merchandise there. It maintains no stock of merchandise in that state and makes there no
deliveries of goods in intrastate commerce. During the years from 1937 to 1940, now in question,
appellant employed eleven to thirteen salesmen under direct supervision and control of sales
managers located in St. Louis. These salesmen resided in Washington; their principal activities
were confined to that state; and they were compensated by commissions based upon the amount
of their sales. The commissions for each year totaled more than $31,000. Appellant supplies its
salesmen with a line of samples, each consisting of one shoe of a pair, which [326 U.S. 310,
314] they display to prospective purchasers. On occasion they rent permanent sample rooms,
for exhibiting samples, in business buildings, or rent rooms in hotels or business buildings
temporarily for that purpose. The cost of such rentals is reimbursed by appellant.
The authority of the salesmen is limited to exhibiting their samples and soliciting orders from
prospective buyers, at prices and on terms fixed by appellant. The salesmen transmit the orders
to appellant's office in St. Louis for acceptance or rejection, and when accepted the merchandise
for filling the orders is shipped f.o.b. from points outside Washington to the purchasers within
the state. All the merchandise shipped into Washington is invoiced at the place of shipment from
which collections are made. No salesman has authority to enter into contracts or to make
collections.
The Supreme Court of Washington was of opinion that the regular and systematic solicitation of
orders in the state by appellant's salesmen, resulting in a continuous flow of appellant's product
into the state, was sufficient to constitute doing business in the state so as to make appellant
amenable to suit in its courts. But it was also of opinion that there were sufficient additional
activities shown to bring the case within the rule frequently stated, that solicitation within a state
by the agents of a foreign corporation plus some additional activities there are sufficient to
render the corporation amenable to suit brought in the courts of the state to enforce an
obligation arising out of its activities there. International Harvester Co. v. Kentucky, 234 U.S.
579, 587 , 34 S.Ct. 944, 946; People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 87 , 38
S.Ct. 233, 235, Ann.Cas.1918C, 537; Frene v. Louisville Cement Co., 77 U.S.App.D.C. 129, 134
F.2d 511, 516, 146 A.L.R. 926. The court found such additional activities in the salesmen's display
of samples sometimes in permanent display rooms, and the salesmen's residence within the
state, continued over a period of years, all resulting in a [326 U.S. 310, 315] substantial volume
of merchandise regularly shipped by appellant to purchasers within the state. The court also held
that the statute as applied did not invade the constitutional power of Congress to regulate
interstate commerce and did not impose a prohibited burden on such commerce.
106 | C o n f l i c t o f L a w s C a s e s
Appellant's argument, renewed here, that the statute imposes an unconstitutional burden on
interstate commerce need not detain us. For 53 Stat. 1391, 26 U.S.C. 1606(a), 26 U.S.C.A.
Int.Rev.Code, 1606(a), provides that 'No person required under a State law to make payments to
an unemployment fund shall be relieved from compliance therewith on the ground that he is
engaged in interstate or foreign commerce, or that the State law does not distinguish between
employees engaged in interstate or foreign commerce and those engaged in intrastate
commerce.' It is no longer debatable that Congress, in the exercise of the commerce power, may
authorize the states, in specified ways, to regulate interstate commerce or impose burdens upon
it. Kentucky Whip & Collar Co. v. Illinois Central R. Co., 299 U.S. 334 , 57 S.Ct. 277; Perkins v.
Pennsylvania, 314 U.S. 586 , 62 S.Ct. 484; Standard Dredging Corp. v. Murphy, 319 U.S. 306,
308 , 63 S.Ct. 1067, 1068; Hooven & Allison v. Evatt, 324 U.S. 652, 679 , 65 S.Ct. 870, 883;
Southern Pacific Co. v. Arizona, 325 U.S. 761, 769 , 65 S.Ct. 1515, 1520
Appellant also insists that its activities within the state were not sufficient to manifest its
'presence' there and that in its absence the state courts were without jurisdiction, that
consequently it was a denial of due process for the state to subject appellant to suit. It refers to
those cases in which it was said that the mere solicitation of orders for the purchase of goods
within a state, to be accepted without the state and filled by shipment of the purchased goods
interstate, does not render the corporation seller amenable to suit within the state. See Green v.
Chicago, Burlington & Quincy R. Co., 205 U.S. 530, 533 , 27 S.Ct. 595, 596; International
Harvester Co. v. Kentucky, supra, 234 U.S. 586, 587 , 34 S.Ct. 946; Philadelphia [326 U.S. 310,
316] & Reading R. Co. v. McKibbin, 243 U.S. 264, 268 , 37 S.Ct. 280; People's Tobacco Co. v.
American Tobacco Co., supra, 246 U.S. 87, 38 S.Ct. 235, Ann.Cas.1918C, 537. And appellant
further argues that since it was not present within the state, it is a denial of due process to
subject it to taxation or other money exaction. It thus denies the power of the state to lay the tax
or to subject appellant to a suit for its collection.
Historically the jurisdiction of courts to render judgment in personam is grounded on their de
facto power over the defendant's person. Hence his presence within the territorial jurisdiction of
court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v.
Neff, 95 U.S. 714 , 733. But now that the capias ad respondendum has given way to personal
service of summons or other form of notice, due process requires only that in order to subject a
defendant to a judgment in personam, if he be not present within the territory of the forum, he
have certain minimum contacts with it such that the maintenance of the suit does not offend
'traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463 , 61
S.Ct. 339, 343, 132 A.L.R. 1357. See Holmes, J., in McDonald v. Mabee, 243 U.S. 90, 91 , 37 S.Ct.
343, L.R.A.1917F, 458. Compare Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316 , 319 S., 63
S.Ct. 602, 604, 606, 145 A.L.R. 1113. See Blackmer v. United States, 284 U.S. 421 , 52 S.Ct. 252;
Hess v. Pawloski, 274 U.S. 352 , 47 S.Ct. 632; Young v. Masci, 289 U.S. 253 , 53 S.Ct. 599, 88
A.L.R. 170.
Since the corporate personality is a fiction, although a fiction intended to be acted upon as
though it were a fact, Klein v. Board of Tax Supervisors, 282 U.S. 19, 24 , 51 S.Ct. 15, 16, 73 A.L.R.
679, it is clear that unlike an individual its 'presence' without, as well as within, the state of its
origin can be manifested only by activities carried on in its behalf by those who are authorized to
act for it. To say that the corporation is so far 'present' there as to satisfy due process
requirements, for purposes of taxation or the maintenance of suits against it in the courts of the
state, is to beg the question to be decided. For the terms 'present' or 'presence' are [326 U.S. 310,
317] used merely to symbolize those activities of the corporation's agent within the state which
courts will deem to be sufficient to satisfy the demands of due process. L. Hand, J., in
Hutchinson v. Chase & Gilbert, 2 Cir., 45 F.2d 139, 141. Those demands may be met by such
contacts of the corporation with the state of the forum as make it reasonable, in the context of
our federal system of government, to require the corporation to defend the particular suit which
is brought there. An 'estimate of the inconveniences' which would result to the corporation from
a trial away from its 'home' or principal place of business is relevant in this connection.
Hutchinson v. Chase & Gilbert, supra, 45 F.2d 141.
'Presence' in the state in this sense has never been doubted when the activities of the corporation
there have not only been continuous and systematic, but also give rise to the liabilities sued on,
even though no consent to be sued or authorization to an agent to accept service of process has
been given. St. Clair v. Cox, 106 U.S. 350, 355 , 1 S.Ct. 354, 359; Connecticut Mutual Life Ins. Co.
v. Spratley, 172 U.S. 602, 610 , 611 S., 19 S.Ct. 308, 311, 312; Pennsylvania Lumbermen's Mut.
Fire Ins. Co. v. Meyer, 197 U.S. 407, 414 , 415 S., 25 S.Ct. 483, 484, 485; Commercial Mutual
Accident Co. v. Davis, 213 U.S. 245, 255 , 256 S., 29 S.Ct. 445, 448; International Harvester Co.
v. Kentucky, supra; cf. St. Louis S.W.R. Co. v. Alexander, 227 U.S. 218 , 33 S.Ct. 245,
Ann.Cas.1915B, 77. Conversely it has been generally recognized that the casual presence of the
corporate agent or even his conduct of single or isolated items of activities in a state in the
corporation's behalf are not enough to subject it to suit on causes of action unconnected with the
activities there. St. Clair v. Cox, supra, 106 U.S. 359, 360 , 1 S.Ct. 362, 363; Old Wayne Mut. Life
Ass'n v. McDonough, 204 U.S. 8, 21 , 27 S.Ct. 236, 240; Frene v. Louisville Cement Co., supra, 77
U.S.App.D.C. 133, 134 F.2d 515, 146 A.L.R. 926, and cases cited. To require the corporation in
such circumstances to defend the suit away from its home or other jurisdiction where it carries
on more substantial activities has been thought to lay too great and unreasonable a burden on
the corporation to comport with due process. [326 U.S. 310, 318] While it has been held in cases
on which appellant relies that continuous activity of some sorts within a state is not enough to
support the demand that the corporation be amenable to suits unrelated to that activity, Old
Wayne Mut. Life Ass'n v. McDonough, supra; Green v. Chicago, Burlington & Quincy R. Co.,
supra; Simon v. Southern R. Co., 236 U.S. 115 , 35 S.Ct. 255; People's Tobacco Co. v. American
Tobacco Co., supra; cf. Davis v. Farmers' Co-operative Equity Co., 262 U.S. 312, 317 , 43 S.Ct.
556, 558, there have been instances in which the continuous corporate operations within a state
were thought so substantial and of such a nature as to justify suit against it on causes of action
arising from dealings entirely distinct from those activities. See Missouri, K. & T.R. Co. v.
Reynolds, 255 U.S. 565 , 41 S.Ct. 446; Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E.
915; cf. St. Louis S.W.R. Co. v. Alexander, supra.
Finally, although the commission of some single or occasional acts of the corporate agent in a
state sufficient to impose an obligation or liability on the corporation has not been thought to
confer upon the state authority to enforce it, Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S.
516 , 43 S.Ct. 170, other such acts, because of their nature and quality and the circumstances of
their commission, may be deemed sufficient to render the corporation liable to suit. Cf. Kane v.
New Jersey, 242 U.S. 160 , 37 S.Ct. 30; Hess v. Pawloski, supra; Young v. Masci, supra. True,
some of the decisions holding the corporation amenable to suit have been supported by resort to
the legal fiction that it has given its consent to service and suit, consent being implied from its
presence in the state through the acts of its authorized agents. Lafayette Insurance Co. v. French,
18 How. 404, 407; St. Clair v. Cox, supra, 106 U.S. 356 , 1 S.Ct. 359; Commercial Mutual
Accident Co. v. Davis, supra, 213 U.S. 254 , 29 S.Ct. 447; State of Washington v. Superior
Court, 289 U.S. 361, 364 , 365 S., 53 S.Ct. 624, 626, 627, 89 A.L.R. 653. But more realistically it
may be said that those authorized acts were of such a nature as to justify the fiction. Smolik v.
Philadelphia & [326 U.S. 310, 319] R.C. & I. Co., D.C., 222 F. 148, 151. Henderson, The Position
of Foreign Corporations in American Constitutional Law, 94, 95.
It is evident that the criteria by which we mark the boundary line between those activities which
justify the subjection of a corporation to suit, and those which do not, cannot be simply
mechanical or quantitative. The test is not merely, as has sometimes been suggested, whether the
activity, which the corporation has seen fit to procure through its agents in another state, is a
little more or a little less. St. Louis S.W.R. Co. v. Alexander, supra, 227 U.S. 228 , 33 S.Ct. 248,
Ann.Cas. 1915B, 77; International Harvestor Co. v. Kentucky, supra, 234 U.S. 587 , 34 S.Ct. 946.
Whether due process is satisfied must depend rather upon the quality and nature of the activity
in relation to the fair and orderly administration of the laws which it was the purpose of the due
107 | C o n f l i c t o f L a w s C a s e s
process clause to insure. That clause does not contemplate that a state may make binding a
judgment in personam against an individual or corporate defendant with which the state has no
contacts, ties, or relations. Cf. Pennoyer v. Neff, supra; Minnesota Commercial Men's Ass'n v.
Benn, 261 U.S. 140 , 43 S.Ct. 293.
But to the extent that a corporation exercises the privilege of conducting activities within a state,
it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may
give rise to obligations; and, so far as those obligations arise out of or are connected with the
activities within the state, a procedure which requires the corporation to respond to a suit
brought to enforce them can, in most instances, hardly be said to be undue. Compare
International Harvester Co. v. Kentucky, supra, with Green v. Chicago, Burlington & Quincy R.
Co., supra, and People's Tobacco Co. v. American Tobacco Co., supra. Compare Connecticut
Mutual Life Ins. Co. v. Spratley, supra, 172 U.S. 619, 620 , 19 S.Ct. 314, 315, and Commercial
Mutual Accident Co. v. Davis, supra, with Old Wayne Mut. Life Ass'n v. McDonough, supra. See
29 Columbia Law Review, 187-195.[326 U.S. 310, 320] Applying these standards, the activities
carried on in behalf of appellant in the State of Washington were neither irregular nor casual.
They were systematic and continuous throughout the years in question. They resulted in a large
volume of interstate business, in the course of which appellant received the benefits and
protection of the laws of the state, including the right to resort to the courts for the enforcement
of its rights. The obligation which is here sued upon arose out of those very activities. It is
evident that these operations establish sufficient contacts or ties with the state of the forum to
make it reasonable and just according to our traditional conception of fair play and substantial
justice to permit the state to enforce the obligations which appellant has incurred there. Hence
we cannot say that the maintenance of the present suit in the State of Washington involves an
unreasonable or undue procedure.
We are likewise unable to conclude that the service of the process within the state upon an agent
whose activities establish appellant's 'presence' there was not sufficient notice of the suit, or that
the suit was so unrelated to those activities as to make the agent an inappropriate vehicle for
communicating the notice. It is enough that appellant has established such contacts with the
state that the particular form of substituted service adopted there gives reasonable assurance
that the notice will be actual. Connecticut Mutual Life Ins. Co. v. Spratley, supra, 172 U.S. 618,
619 , 19 S.Ct. 314, 315; Board of Trade v. Hammond Elevator Co., 198 U.S. 424, 437 , 438 S., 25
S.Ct. 740, 743, 744; Commercial Mutual Accident Co. v. Davis, supra, 213 U.S. 254, 255 , 29 S.Ct.
447, 448. Cf. Riverside & Dan River Cotton Mills v. Menefee, 237 U.S. 189, 194 , 195 S., 35 S.Ct.
579, 580, 581; see Knowles v. Gaslight & Coke Co., 19 Wall. 58, 61; McDonald v. Mabee, supra;
Milliken v. Meyer, supra. Nor can we say that the mailing of the notice of suit to appellant by
registered mail at its home office was not reasonably calculated to apprise appellant of the suit.
Compare Hess v. Pawloski, supra, with McDonald v. Mabee, supra, 243 U.S. [326 U.S. 310,
321] 92, 37 S.Ct. 344, L.R.A.1917F, 458, and Wuchter v. Pizzutti, 276 U.S. 13, 19 , 24 S., 48 S.Ct.
259, 260, 262, 57 A.L.R. 1230; cf. Bequet v. MacCarthy, 2 B. & Ad. 951; Maubourquet v. Wyse, 1
Ir.Rep.C.L. 471. See State of Washington v. Superior Court, supra, 289 U.S. 365 , 53 S. Ct. 626,
89 A.L.R. 653.
Only a word need be said of appellant's liability for the demanded contributions of the state
unemployment fund. The Supreme Court of Washington, construing and applying the statute,
has held that it imposes a tax on the privilege of employing appellant's salesmen within the state
measured by a percentage of the wages, here the commissions payable to the salesmen. This
construction we accept for purposes of determining the constitutional validity of the statute. The
right to employ labor has been deemed an appropriate subject of taxation in this country and
England, both before and since the adoption of the Constitution. Steward Machine Co. v.
Davis, 301 U.S. 548 , 579 et seq., 57 S.Ct. 883, 887 et seq., 109 A.L.R. 1293. And such a tax
imposed upon the employer for unemployment benefits is within the constitutional power of the
states. Carmichael v. Southern Coal & Coke Co., 301 U.S. 495 , 508 et seq., 57 S.Ct. 868, 871 et
seq., 109 A.L.R. 1327.
Appellant having rendered itself amenable to suit upon obligations arising out of the activities of
its salesmen in Washington, the state may maintain the present suit in personam to collect the
tax laid upon the exercise of the privilege of employing appellant's salesmen within the state. For
Washington has made one of those activities, which taken together establish appellant's
'presence' there for purposes of suit, the taxable event by which the state brings appellant within
the reach of its taxing power. The state thus has constitutional power to lay the tax and to subject
appellant to a suit to recover it. The activities which establish its 'presence' subject it alike to
taxation by the state and to suit to recover the tax. Equitable Life Assur. Society v.
Pennsylvania, 238 U.S. 143, 146 , 35 S.Ct. 829, 830; cf. International Harvester Co. v. Wisconsin
Department of Taxation, 322 U.S. 435 , 442 et seq., 64 S.Ct. 1060, 1064 et seq.; Hoopeston
Canning Co. v. Cullen, [326 U.S. 310, 322] supra, 318 U.S. 316 -319, 63 S.Ct. 604-606, 145
A.L.R. 113; see General Trading Co. v. State Tax Com., 322 U.S. 335, 349 , 64 S.Ct. 1028, 1030,
1319.
AFFIRMED.
Mr. Justice JACKSON took no part in the consideration or decision of this case.
Mr. Justice BLACK delivered the following opinion.
Congress, pursuant to its constitutional power to regulate commerce, has expressly provided that
a State shall not be prohibited from levying the kind of unemployment compensation tax here
challenged. 26 U.S.C. 1606, 26 U.S.C.A. Int.Rev.Code, 1606. We have twice decided that this
Congressional consent is an adequate answer to a claim that imposition of the tax violates the
Commerce Clause. Perkins v. Pennsylvania, 314 U.S. 586 , 62 S.Ct. 484, affirming 342 Pa. 529,
21 A.2d 45; Standard Dredging Corp. v. Murphy, 319 U.S. 306, 308 , 63 S.Ct. 1067, 1068. Two
determinations by this Court of an issue so palpably without merit are sufficient. Consequently
that part of this appeal which again seeks to raise the question seems so patently frivolous as to
make the case a fit candidate for dismissal. Fay v. Crozer, 217 U.S. 455 , 30 S. Ct. 568. Nor is the
further ground advanced on this appeal, that the State of Washington has denied appellant due
process of law, any less devoid of substance. It is my view, therefore, that we should dismiss the
appeal as unsubstantial,1 Seaboard Air Line R. Co. v. Watson, 287 U.S. 86, 90 , 92 S., 53 S.Ct. 32,
34, 35, 86 A.L.R. 174; and decline the invitation to formulate broad rules as to the meaning of
due process, which here would amount to deciding a constitutional question 'in advance of the
necessity for its decision.' Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461 , 65
S.Ct. 1384, 1389, 1734. [326 U.S. 310, 323] Certainly appellant can not in the light of our past
decisions meritoriously claim that notice by registered mail and by personal service on its sales
solicitors in Washington did not meet the requirements of procedural due process. And the due
process clause is not brought in issue any more by appellant's further conceptualistic contention
that Washington could not levy a tax or bring suit against the corporation because it did not
honor that State with its mystical 'presence.' For it is unthinkable that the vague due process
clause was ever intended to prohibit a State from regulating or taxing a business carried on
within its boundaries simply because this is done by agents of a corporation organized and
having its headquarters elsewhere. To read this into the due process clause would in fact result in
depriving a State's citizens of due process by taking from the State the power to protect them in
their business dealings within its boundaries with representatives of a foreign corporation.
Nothing could be more irrational or more designed to defeat the function of our federative
system of government. Certainly a State, at the very least, has power to tax and sue those dealing
with its citizens within its boundaries, as we have held before. Hoopeston Canning Co. v.
Cullen, 318 U.S. 313 , 63 S.Ct. 602, 145 A.L.R. 1113. Were the Court to follow this principle, it
108 | C o n f l i c t o f L a w s C a s e s
would provide a workable standard for cases where, as here, no other questions are involved. The
Court has not chosen to do so, but instead has engaged in an unnecessary discussion in the
course of which it has announced vague Constitutional criteria applied for the first time to the
issue before us. It has thus introduced uncertain elements confusing the simple pattern and
tending to curtail the exercise of State powers to an extent not justified by the Constitution.
The criteria adopted insofar as they can be identified read as follows: Due process does permit
State courts to 'enforce the obligations which appellant has incurred' if [326 U.S. 310, 324] it be
found 'reasonable and just according to our traditional conception of fair play and substantial
justice.' And this in turn means that we will 'permit' the State to act if upon 'an 'estimate of the
inconveniences' which would result to the corporation from a trial away from its 'home' or
principal place of business', we conclude that it is 'reasonable' to subject it to suit in a State
where it is doing business.
It is true that this Court did use the terms 'fair play' and 'substantial justice' in explaining the
philosophy underlying the holding that it could not be 'due process of law' to render a personal
judgment against a defendant without notice to and an opportunity to be heard by him. Milliken
v. Meyer, 311 U.S. 457 , 61 S.Ct. 339, 132 A.L. R. 1357. In McDonald v. Mabee, 243 U.S. 90, 91 ,
37 S.Ct. 343, L.R.A.1917F, 458, cited in the Milliken case, Mr. Justice Holmes speaking for the
Court warned against judicial curtailment of this opportunity to be heard and referred to such a
curtailment as a denial of 'fair play', which even the common law would have deemed 'contrary
to natural justice.' And previous cases had indicated that the ancient rule against judgments
without notice had stemmed from 'natural justice' concepts. These cases, while giving additional
reasons why notice under particular circumstances is inadequate, did not mean thereby that all
legislative enactments which this Court might deem to be contrary to natural justice ought to be
held invalid under the due process clause. None of the cases purport to support or could support
a holding that a State can tax and sue corporations only if its action comports with this Court's
notions of 'natural justice.' I should have thought the Tenth Amendment settled that.
I believe that the Federal Constitution leaves to each State, without any 'ifs' or 'buts', a power to
tax and to open the doors of its courts for its citizens to sue corporations whose agents do
business in those States. Believing that the Constitution gave the States that power, I think it a
judicial deprivation to condition its exercise upon this [326 U.S. 310, 325] Court's notion of
'fairplay', however appealing that term may be. Nor can I stretch the meaning of due process so
far as to authorize this Court to deprive a State of the right to afford judicial protection to its
citizens on the ground that it would be more 'convenient' for the corporation to be sued
somewhere else.
There is a strong emotional appeal in the words 'fair play', 'justice', and 'reasonableness.' But
they were not chosen by those who wrote the original Constitution or the Fourteenth
Amendment as a measuring rod for this Court to use in invalidating State or Federal laws passed
by elected legislative representatives. No one, not even those who most feared a democratic
government, ever formally proposed that courts should be given power to invalidate legislation
under any such elastic standards. Express prohibitions against certain types of legislation are
found in the Constitution, and under the long settled practice, courts invalidate laws found to
conflict with them. This requires interpretation, and interpretation, it is true, may result in
extension of the Constitution's purpose. But that is no reason for reading the due process clause
so as to restrict a State's power to tax and sue those whose activities affect persons and
businesses within the State, provided proper service can be had. Superimposing the natural
justice concept on the Constitution's specific prohibitions could operate as a drastic abridgment
of democratic safeguards they embody, such as freedom of speech, press and religion,2 and the
right to counsel. This [326 U.S. 310, 326] has already happened. Betts v. Brady, 316 U.S. 455 ,
62 S.Ct. 1252. Compare Feldman v. United States, 322 U.S. 487 , 494-503, 64 S.Ct. 1082, 1085-
1089, 154 A.L.R. 982. For application of this natural law concept, whether under the terms
'reasonableness', 'justice', or 'fair play', makes judges the supreme arbiters of the country's laws
and practices. Polk Co. v. Glover, 305 U.S. 5 , 17-18, 59 S.Ct. 15, 20, 21; Federal Power
Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 600 , 62 S.Ct. 736, 750, note 4. This
result, I believe, alters the form of government our Constitution provides. I cannot agree.
True, the State's power is here upheld. But the rule announced means that tomorrow's judgment
may strike down a State or Federal enactment on the ground that it does not conform to this
Court's idea of natural justice. I therefore find myself moved by the same fears that caused Mr.
Justice Holmes to say in 1930:
'I have not yet adequately expressed the more than anxiety that I feel at the ever increasing scope
given to the Fourteenth Amendment in cutting down what I believe to be the constitutional
rights of the States. As the decisions now stand, I see hardly any limit but the sky to the
invalidating of those rights if they happen to strike a majority of this Court as for any reason
undesirable.' Baldwin v. Missouri, 281 U.S. 586, 595 , 50 S.Ct. 436, 439, 72 A.L.R. 1303.
G.R. No. L-11390 March 26, 1918
EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellant,
vs.
VICENTE PALANCA, administrator of the estate of Engracio Palanca
Tanquinyeng, defendant-appellant.
Aitken and DeSelms for appellant.
Hartigan and Welch for appellee.
STREET, J.:
This action was instituted upon March 31, 1908, by "El Banco Espanol-Filipino" to foreclose a
mortgage upon various parcels of real property situated in the city of Manila. The mortgage in
question is dated June 16, 1906, and was executed by the original defendant herein, Engracio
Palanca Tanquinyeng y Limquingco, as security for a debt owing by him to the bank. Upon
March 31, 1906, the debt amounted to P218,294.10 and was drawing interest at the rate of 8 per
centum per annum, payable at the end of each quarter. It appears that the parties to this
mortgage at that time estimated the value of the property in question at P292,558, which was
about P75,000 in excess of the indebtedness. After the execution of this instrument by the
mortgagor, he returned to China which appears to have been his native country; and he there
died, upon January 29, 1810, without again returning to the Philippine Islands.
As the defendant was a nonresident at the time of the institution of the present action, it was
necessary for the plaintiff in the foreclosure proceeding to give notice to the defendant by
publication pursuant to section 399 of the Code of Civil Procedure. An order for publication was
accordingly obtained from the court, and publication was made in due form in a newspaper of
the city of Manila. At the same time that the order of the court should deposit in the post office in
a stamped envelope a copy of the summons and complaint directed to the defendant at his last
place of residence, to wit, the city of Amoy, in the Empire of China. This order was made
pursuant to the following provision contained in section 399 of the Code of Civil Procedure:
109 | C o n f l i c t o f L a w s C a s e s
In case of publication, where the residence of a nonresident or absent defendant is
known, the judge must direct a copy of the summons and complaint to be forthwith
deposited by the clerk in the post-office, postage prepaid, directed to the person to be
served, at his place of residence
Whether the clerk complied with this order does not affirmatively appear. There is, however,
among the papers pertaining to this case, an affidavit, dated April 4, 1908, signed by Bernardo
Chan y Garcia, an employee of the attorneys of the bank, showing that upon that date he had
deposited in the Manila post-office a registered letter, addressed to Engracio Palanca
Tanquinyeng, at Manila, containing copies of the complaint, the plaintiff's affidavit, the summons,
and the order of the court directing publication as aforesaid. It appears from the postmaster's
receipt that Bernardo probably used an envelope obtained from the clerk's office, as the receipt
purports to show that the letter emanated from the office.
The cause proceeded in usual course in the Court of First Instance; and the defendant not
having appeared, judgment was, upon July 2, 1908, taken against him by default. Upon July 3,
1908, a decision was rendered in favor of the plaintiff. In this decision it was recited that
publication had been properly made in a periodical, but nothing was said about this notice
having been given mail. The court, upon this occasion, found that the indebtedness of the
defendant amounted to P249,355. 32, with interest from March 31, 1908. Accordingly it was
ordered that the defendant should, on or before July 6, 1908, deliver said amount to the clerk of
the court to be applied to the satisfaction of the judgment, and it was declared that in case of the
failure of the defendant to satisfy the judgment within such period, the mortgage property located
in the city of Manila should be exposed to public sale. The payment contemplated in said order
was never made; and upon July 8, 1908, the court ordered the sale of the property. The sale
took place upon July 30, 1908, and the property was bought in by the bank for the sum of
P110,200. Upon August 7, 1908, this sale was confirmed by the court.
About seven years after the confirmation of this sale, or to the precise, upon June 25, 1915, a
motion was made in this cause by Vicente Palanca, as administrator of the estate of the original
defendant, Engracio Palanca Tanquinyeng y Limquingco, wherein the applicant requested the
court to set aside the order of default of July 2, 1908, and the judgment rendered upon July 3,
1908, and to vacate all the proceedings subsequent thereto. The basis of this application, as set
forth in the motion itself, was that the order of default and the judgment rendered thereon were
void because the court had never acquired jurisdiction over the defendant or over the subject of
the action.
At the hearing in the court below the application to vacate the judgment was denied, and from
this action of the court Vicente Planca, as administrator of the estate of the original defendant,
has appealed. No other feature of the case is here under consideration than such as related to
the action of the court upon said motion.
The case presents several questions of importance, which will be discussed in what appears to
be the sequence of most convenient development. In the first part of this opinion we shall, for the
purpose of argument, assume that the clerk of the Court of First Instance did not obey the order
of the court in the matter of mailing the papers which he was directed to send to the defendant in
Amoy; and in this connection we shall consider, first, whether the court acquired the necessary
jurisdiction to enable it to proceed with the foreclosure of the mortgage and, secondly, whether
those proceedings were conducted in such manner as to constitute due process of law.
The word "jurisdiction," as applied to the faculty of exercising judicial power, is used in several
different, though related, senses since it may have reference (1) to the authority of the court to
entertain a particular kind of action or to administer a particular kind of relief, or it may refer to
the power of the court over the parties, or (2) over the property which is the subject to the
litigation.
The sovereign authority which organizes a court determines the nature and extent of its powers
in general and thus fixes its competency or jurisdiction with reference to the actions which it may
entertain and the relief it may grant.
Jurisdiction over the person is acquired by the voluntary appearance of a party in court and his
submission to its authority, or it is acquired by the coercive power of legal process exerted over
the person.
Jurisdiction over the property which is the subject of the litigation may result either from a
seizure of the property under legal process, whereby it is brought into the actual custody of the
law, or it may result from the institution of legal proceedings wherein, under special provisions of
law, the power of the court over the property is recognized and made effective. In the latter case
the property, though at all times within the potential power of the court, may never be taken into
actual custody at all. An illustration of the jurisdiction acquired by actual seizure is found in
attachment proceedings, where the property is seized at the beginning of the action, or some
subsequent stage of its progress, and held to abide the final event of the litigation. An illustration
of what we term potential jurisdiction over the res, is found in the proceeding to register the title
of land under our system for the registration of land. Here the court, without taking actual
physical control over the property assumes, at the instance of some person claiming to be
owner, to exercise a jurisdiction in rem over the property and to adjudicate the title in favor of the
petitioner against all the world.
In the terminology of American law the action to foreclose a mortgage is said to be a proceeding
quasi in rem, by which is expressed the idea that while it is not strictly speaking an action in
rem yet it partakes of that nature and is substantially such. The expression "action in rem" is, in
its narrow application, used only with reference to certain proceedings in courts of admiralty
wherein the property alone is treated as responsible for the claim or obligation upon which the
proceedings are based. The action quasi rem differs from the true action in rem in the
circumstance that in the former an individual is named as defendant, and the purpose of the
proceeding is to subject his interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the property of the
defendant, whether by attachment, foreclosure, or other form of remedy, are in a general way
thus designated. The judgment entered in these proceedings is conclusive only between the
parties.
In speaking of the proceeding to foreclose a mortgage the author of a well known treaties, has
said:
Though nominally against person, such suits are to vindicate liens; they proceed upon
seizure; they treat property as primarily indebted; and, with the qualification above-
mentioned, they are substantially property actions. In the civil law, they are styled
hypothecary actions, and their sole object is the enforcement of the lien against
the res; in the common law, they would be different in chancery did not treat the
conditional conveyance as a mere hypothecation, and the creditor's right ass an
equitable lien; so, in both, the suit is real action so far as it is against property, and
110 | C o n f l i c t o f L a w s C a s e s
seeks the judicial recognition of a property debt, and an order for the sale of
the res. (Waples, Proceedings In Rem. sec. 607.)
It is true that in proceedings of this character, if the defendant for whom publication is made
appears, the action becomes as to him a personal action and is conducted as such. This,
however, does not affect the proposition that where the defendant fails to appear the action
is quasi in rem; and it should therefore be considered with reference to the principles governing
actions in rem.
There is an instructive analogy between the foreclosure proceeding and an action of attachment,
concerning which the Supreme Court of the United States has used the following language:
If the defendant appears, the cause becomes mainly a suit in personam, with the
added incident, that the property attached remains liable, under the control of the
court, to answer to any demand which may be established against the defendant by
the final judgment of the court. But, if there is no appearance of the defendant, and no
service of process on him, the case becomes, in its essential nature, a proceeding in
rem, the only effect of which is to subject the property attached to the payment of the
defendant which the court may find to be due to the plaintiff. (Cooper vs. Reynolds, 10
Wall., 308.)
In an ordinary attachment proceeding, if the defendant is not personally served, the preliminary
seizure is to, be considered necessary in order to confer jurisdiction upon the court. In this case
the lien on the property is acquired by the seizure; and the purpose of the proceedings is to
subject the property to that lien. If a lien already exists, whether created by mortgage, contract,
or statute, the preliminary seizure is not necessary; and the court proceeds to enforce such lien
in the manner provided by law precisely as though the property had been seized upon
attachment. (Roller vs. Holly, 176 U. S., 398, 405; 44 L. ed., 520.) It results that the mere
circumstance that in an attachment the property may be seized at the inception of the
proceedings, while in the foreclosure suit it is not taken into legal custody until the time comes
for the sale, does not materially affect the fundamental principle involved in both cases, which is
that the court is here exercising a jurisdiction over the property in a proceeding directed
essentially in rem.
Passing now to a consideration of the jurisdiction of the Court of First Instance in a mortgage
foreclosure, it is evident that the court derives its authority to entertain the action primarily from
the statutes organizing the court. The jurisdiction of the court, in this most general sense, over
the cause of action is obvious and requires no comment. Jurisdiction over the person of the
defendant, if acquired at all in such an action, is obtained by the voluntary submission of the
defendant or by the personal service of process upon him within the territory where the process
is valid. If, however, the defendant is a nonresident and, remaining beyond the range of the
personal process of the court, refuses to come in voluntarily, the court never acquires jurisdiction
over the person at all. Here the property itself is in fact the sole thing which is impleaded and is
the responsible object which is the subject of the exercise of judicial power. It follows that the
jurisdiction of the court in such case is based exclusively on the power which, under the law, it
possesses over the property; and any discussion relative to the jurisdiction of the court over the
person of the defendant is entirely apart from the case. The jurisdiction of the court over the
property, considered as the exclusive object of such action, is evidently based upon the following
conditions and considerations, namely: (1) that the property is located within the district; (2) that
the purpose of the litigation is to subject the property by sale to an obligation fixed upon it by the
mortgage; and (3) that the court at a proper stage of the proceedings takes the property into
custody, if necessary, and expose it to sale for the purpose of satisfying the mortgage debt. An
obvious corollary is that no other relief can be granted in this proceeding than such as can be
enforced against the property.
We may then, from what has been stated, formulated the following proposition relative to the
foreclosure proceeding against the property of a nonresident mortgagor who fails to come in and
submit himself personally to the jurisdiction of the court: (I) That the jurisdiction of the court is
derived from the power which it possesses over the property; (II) that jurisdiction over the person
is not acquired and is nonessential; (III) that the relief granted by the court must be limited to
such as can be enforced against the property itself.
It is important that the bearing of these propositions be clearly apprehended, for there are many
expressions in the American reports from which it might be inferred that the court acquires
personal jurisdiction over the person of the defendant by publication and notice; but such is not
the case. In truth the proposition that jurisdiction over the person of a nonresident cannot be
acquired by publication and notice was never clearly understood even in the American courts
until after the decision had been rendered by the Supreme Court of the United States in the
leading case of Pennoyer vs. Neff (95 U. S. 714; 24 L. ed., 565). In the light of that decision, and
of other decisions which have subsequently been rendered in that and other courts, the
proposition that jurisdiction over the person cannot be thus acquired by publication and notice is
no longer open to question; and it is now fully established that a personal judgment upon
constructive or substituted service against a nonresident who does not appear is wholly invalid.
This doctrine applies to all kinds of constructive or substituted process, including service by
publication and personal service outside of the jurisdiction in which the judgment is rendered;
and the only exception seems to be found in the case where the nonresident defendant has
expressly or impliedly consented to the mode of service. (Note to Raher vs. Raher, 35 L. R. A.
[N. S. ], 292; see also 50 L .R. A., 585; 35 L. R. A. [N. S.], 312
The idea upon which the decision in Pennoyer vs. Neff (supra) proceeds is that the process from
the tribunals of one State cannot run into other States or countries and that due process of law
requires that the defendant shall be brought under the power of the court by service of process
within the State, or by his voluntary appearance, in order to authorize the court to pass upon the
question of his personal liability. The doctrine established by the Supreme Court of the United
States on this point, being based upon the constitutional conception of due process of law, is
binding upon the courts of the Philippine Islands. Involved in this decision is the principle that in
proceedings in rem or quasi in rem against a nonresident who is not served personally within the
state, and who does not appear, the relief must be confined to the res, and the court cannot
lawfully render a personal judgment against him. (Dewey vs. Des Moines, 173 U. S., 193; 43 L.
ed., 665; Heidritter vs. Elizabeth Oil Cloth Co., 112 U. S., 294; 28 L. ed., 729.) Therefore in an
action to foreclose a mortgage against a nonresident, upon whom service has been effected
exclusively by publication, no personal judgment for the deficiency can be entered. (Latta vs.
Tutton, 122 Cal., 279; Blumberg vs. Birch, 99 Cal., 416.)
It is suggested in the brief of the appellant that the judgment entered in the court below offends
against the principle just stated and that this judgment is void because the court in fact entered a
personal judgment against the absent debtor for the full amount of the indebtedness secured by
the mortgage. We do not so interpret the judgment.
In a foreclosure proceeding against a nonresident owner it is necessary for the court, as in all
cases of foreclosure, to ascertain the amount due, as prescribed in section 256 of the Code of
Civil Procedure, and to make an order requiring the defendant to pay the money into court. This
111 | C o n f l i c t o f L a w s C a s e s
step is a necessary precursor of the order of sale. In the present case the judgment which was
entered contains the following words:
Because it is declared that the said defendant Engracio Palanca Tanquinyeng y
Limquingco, is indebted in the amount of P249,355.32, plus the interest, to the 'Banco
Espanol-Filipino' . . . therefore said appellant is ordered to deliver the above amount
etc., etc.
This is not the language of a personal judgment. Instead it is clearly intended merely as a
compliance with the requirement that the amount due shall be ascertained and that the evidence
of this it may be observed that according to the Code of Civil Procedure a personal judgment
against the debtor for the deficiency is not to be rendered until after the property has been sold
and the proceeds applied to the mortgage debt. (sec. 260).
The conclusion upon this phase of the case is that whatever may be the effect in other respects
of the failure of the clerk of the Court of First Instance to mail the proper papers to the defendant
in Amoy, China, such irregularity could in no wise impair or defeat the jurisdiction of the court, for
in our opinion that jurisdiction rest upon a basis much more secure than would be supplied by
any form of notice that could be given to a resident of a foreign country.
Before leaving this branch of the case, we wish to observe that we are fully aware that many
reported cases can be cited in which it is assumed that the question of the sufficiency of
publication or notice in a case of this kind is a question affecting the jurisdiction of the court, and
the court is sometimes said to acquire jurisdiction by virtue of the publication. This phraseology
was undoubtedly originally adopted by the court because of the analogy between service by the
publication and personal service of process upon the defendant; and, as has already been
suggested, prior to the decision of Pennoyer vs. Neff (supra) the difference between the legal
effects of the two forms of service was obscure. It is accordingly not surprising that the modes of
expression which had already been molded into legal tradition before that case was decided
have been brought down to the present day. But it is clear that the legal principle here involved
is not effected by the peculiar language in which the courts have expounded their ideas.
We now proceed to a discussion of the question whether the supposed irregularity in the
proceedings was of such gravity as to amount to a denial of that "due process of law" which was
secured by the Act of Congress in force in these Islands at the time this mortgage was
foreclosed. (Act of July 1, 1902, sec. 5.) In dealing with questions involving the application of the
constitutional provisions relating to due process of law the Supreme Court of the United States
has refrained from attempting to define with precision the meaning of that expression, the reason
being that the idea expressed therein is applicable under so many diverse conditions as to make
any attempt ay precise definition hazardous and unprofitable. As applied to a judicial proceeding,
however, it may be laid down with certainty that the requirement of due process is satisfied if the
following conditions are present, namely; (1) There must be a court or tribunal clothed with
judicial power to hear and determine the matter before it; (2) jurisdiction must be lawfully
acquired over the person of the defendant or over the property which is the subject of the
proceeding; (3) the defendant must be given an opportunity to be heard; and (4) judgment must
be rendered upon lawful hearing.
Passing at once to the requisite that the defendant shall have an opportunity to be heard, we
observe that in a foreclosure case some notification of the proceedings to the nonresident
owner, prescribing the time within which appearance must be made, is everywhere recognized
as essential. To answer this necessity the statutes generally provide for publication, and usually
in addition thereto, for the mailing of notice to the defendant, if his residence is known. Though
commonly called constructive, or substituted service of process in any true sense. It is merely a
means provided by law whereby the owner may be admonished that his property is the subject
of judicial proceedings and that it is incumbent upon him to take such steps as he sees fit to
protect it. In speaking of notice of this character a distinguish master of constitutional law has
used the following language:
. . . if the owners are named in the proceedings, and personal notice is provided for, it
is rather from tenderness to their interests, and in order to make sure that the
opportunity for a hearing shall not be lost to them, than from any necessity that the
case shall assume that form. (Cooley on Taxation [2d. ed.], 527, quoted in Leigh vs.
Green, 193 U. S., 79, 80.)
It will be observed that this mode of notification does not involve any absolute assurance that the
absent owner shall thereby receive actual notice. The periodical containing the publication may
never in fact come to his hands, and the chances that he should discover the notice may often
be very slight. Even where notice is sent by mail the probability of his receiving it, though much
increased, is dependent upon the correctness of the address to which it is forwarded as well as
upon the regularity and security of the mail service. It will be noted, furthermore, that the
provision of our law relative to the mailing of notice does not absolutely require the mailing of
notice unconditionally and in every event, but only in the case where the defendant's residence
is known. In the light of all these facts, it is evident that actual notice to the defendant in cases of
this kind is not, under the law, to be considered absolutely necessary.
The idea upon which the law proceeds in recognizing the efficacy of a means of notification
which may fall short of actual notice is apparently this: Property is always assumed to be in the
possession of its owner, in person or by agent; and he may be safely held, under certain
conditions, to be affected with knowledge that proceedings have been instituted for its
condemnation and sale.
It is the duty of the owner of real estate, who is a nonresident, to take measures that in
some way he shall be represented when his property is called into requisition, and if
he fails to do this, and fails to get notice by the ordinary publications which have
usually been required in such cases, it is his misfortune, and he must abide the
consequences. (6 R. C. L., sec. 445 [p. 450]).
It has been well said by an American court:
If property of a nonresident cannot be reached by legal process upon the constructive
notice, then our statutes were passed in vain, and are mere empty legislative
declarations, without either force, or meaning; for if the person is not within the
jurisdiction of the court, no personal judgment can be rendered, and if the judgment
cannot operate upon the property, then no effective judgment at all can be rendered,
so that the result would be that the courts would be powerless to assist a citizen
against a nonresident. Such a result would be a deplorable one. (Quarl vs. Abbett, 102
Ind., 233; 52 Am. Rep., 662, 667.)
It is, of course universally recognized that the statutory provisions relative to publication or other
form of notice against a nonresident owner should be complied with; and in respect to the
publication of notice in the newspaper it may be stated that strict compliance with the
112 | C o n f l i c t o f L a w s C a s e s
requirements of the law has been held to be essential. In Guaranty Trust etc. Co. vs. Green
Cove etc., Railroad Co. (139 U. S., 137, 138), it was held that where newspaper publication was
made for 19 weeks, when the statute required 20, the publication was insufficient.
With respect to the provisions of our own statute, relative to the sending of notice by mail, the
requirement is that the judge shall direct that the notice be deposited in the mail by the clerk of
the court, and it is not in terms declared that the notice must be deposited in the mail. We
consider this to be of some significance; and it seems to us that, having due regard to the
principles upon which the giving of such notice is required, the absent owner of the mortgaged
property must, so far as the due process of law is concerned, take the risk incident to the
possible failure of the clerk to perform his duty, somewhat as he takes the risk that the mail clerk
or the mail carrier might possibly lose or destroy the parcel or envelope containing the notice
before it should reach its destination and be delivered to him. This idea seems to be
strengthened by the consideration that placing upon the clerk the duty of sending notice by mail,
the performance of that act is put effectually beyond the control of the plaintiff in the litigation. At
any rate it is obvious that so much of section 399 of the Code of Civil Procedure as relates to the
sending of notice by mail was complied with when the court made the order. The question as to
what may be the consequences of the failure of the record to show the proof of compliance with
that requirement will be discussed by us further on.
The observations which have just been made lead to the conclusion that the failure of the clerk
to mail the notice, if in fact he did so fail in his duty, is not such an irregularity, as amounts to a
denial of due process of law; and hence in our opinion that irregularity, if proved, would not avoid
the judgment in this case. Notice was given by publication in a newspaper and this is the only
form of notice which the law unconditionally requires. This in our opinion is all that was
absolutely necessary to sustain the proceedings.
It will be observed that in considering the effect of this irregularity, it makes a difference whether
it be viewed as a question involving jurisdiction or as a question involving due process of law. In
the matter of jurisdiction there can be no distinction between the much and the little. The court
either has jurisdiction or it has not; and if the requirement as to the mailing of notice should be
considered as a step antecedent to the acquiring of jurisdiction, there could be no escape from
the conclusion that the failure to take that step was fatal to the validity of the judgment. In the
application of the idea of due process of law, on the other hand, it is clearly unnecessary to be
so rigorous. The jurisdiction being once established, all that due process of law thereafter
requires is an opportunity for the defendant to be heard; and as publication was duly made in the
newspaper, it would seem highly unreasonable to hold that failure to mail the notice was fatal.
We think that in applying the requirement of due process of law, it is permissible to reflect upon
the purposes of the provision which is supposed to have been violated and the principle
underlying the exercise of judicial power in these proceedings. Judge in the light of these
conceptions, we think that the provision of Act of Congress declaring that no person shall be
deprived of his property without due process of law has not been infringed.
In the progress of this discussion we have stated the two conclusions; (1) that the failure of the
clerk to send the notice to the defendant by mail did not destroy the jurisdiction of the court and
(2) that such irregularity did not infringe the requirement of due process of law. As a
consequence of these conclusions the irregularity in question is in some measure shorn of its
potency. It is still necessary, however, to consider its effect considered as a simple irregularity of
procedure; and it would be idle to pretend that even in this aspect the irregularity is not grave
enough. From this point of view, however, it is obvious that any motion to vacate the judgment
on the ground of the irregularity in question must fail unless it shows that the defendant was
prejudiced by that irregularity. The least, therefore, that can be required of the proponent of such
a motion is to show that he had a good defense against the action to foreclose the mortgage.
Nothing of the kind is, however, shown either in the motion or in the affidavit which accompanies
the motion.
An application to open or vacate a judgment because of an irregularity or defect in the
proceedings is usually required to be supported by an affidavit showing the grounds on which
the relief is sought, and in addition to this showing also a meritorious defense to the action. It is
held that a general statement that a party has a good defense to the action is insufficient. The
necessary facts must be averred. Of course if a judgment is void upon its face a showing of the
existence of a meritorious defense is not necessary. (10 R. C. L., 718.)
The lapse of time is also a circumstance deeply affecting this aspect of the case. In this
connection we quote the following passage from the encyclopedic treatise now in course of
publication:
Where, however, the judgment is not void on its face, and may therefore be enforced if
permitted to stand on the record, courts in many instances refuse to exercise their
quasi equitable powers to vacate a judgement after the lapse of the term ay which it
was entered, except in clear cases, to promote the ends of justice, and where it
appears that the party making the application is himself without fault and has acted in
good faith and with ordinary diligence. Laches on the part of the applicant, if
unexplained, is deemed sufficient ground for refusing the relief to which he might
otherwise be entitled. Something is due to the finality of judgments, and acquiescence
or unnecessary delay is fatal to motions of this character, since courts are always
reluctant to interfere with judgments, and especially where they have been executed
or satisfied. The moving party has the burden of showing diligence, and unless it is
shown affirmatively the court will not ordinarily exercise its discretion in his favor. (15
R. C. L., 694, 695.)
It is stated in the affidavit that the defendant, Engracio Palanca Tanquinyeng y Limquingco, died
January 29, 1910. The mortgage under which the property was sold was executed far back in
1906; and the proceedings in the foreclosure were closed by the order of court confirming the
sale dated August 7, 1908. It passes the rational bounds of human credulity to suppose that a
man who had placed a mortgage upon property worth nearly P300,000 and had then gone away
from the scene of his life activities to end his days in the city of Amoy, China, should have long
remained in ignorance of the fact that the mortgage had been foreclosed and the property sold,
even supposing that he had no knowledge of those proceedings while they were being
conducted. It is more in keeping with the ordinary course of things that he should have acquired
information as to what was transpiring in his affairs at Manila; and upon the basis of this rational
assumption we are authorized, in the absence of proof to the contrary, to presume that he did
have, or soon acquired, information as to the sale of his property.
The Code of Civil Procedure, indeed, expressly declares that there is a presumption that things
have happened according to the ordinary habits of life (sec. 334 [26]); and we cannot conceive
of a situation more appropriate than this for applying the presumption thus defined by the
lawgiver. In support of this presumption, as applied to the present case, it is permissible to
consider the probability that the defendant may have received actual notice of these proceedings
from the unofficial notice addressed to him in Manila which was mailed by an employee of the
bank's attorneys. Adopting almost the exact words used by the Supreme Court of the United
States in Grannis vs. Ordeans (234 U. S., 385; 58 L. ed., 1363), we may say that in view of the
well-known skill of postal officials and employees in making proper delivery of letters defectively
113 | C o n f l i c t o f L a w s C a s e s
addressed, we think the presumption is clear and strong that this notice reached the defendant,
there being no proof that it was ever returned by the postal officials as undelivered. And if it was
delivered in Manila, instead of being forwarded to Amoy, China, there is a probability that the
recipient was a person sufficiently interested in his affairs to send it or communicate its contents
to him.
Of course if the jurisdiction of the court or the sufficiency of the process of law depended upon
the mailing of the notice by the clerk, the reflections in which we are now indulging would be idle
and frivolous; but the considerations mentioned are introduced in order to show the propriety of
applying to this situation the legal presumption to which allusion has been made. Upon that
presumption, supported by the circumstances of this case, ,we do not hesitate to found the
conclusion that the defendant voluntarily abandoned all thought of saving his property from the
obligation which he had placed upon it; that knowledge of the proceedings should be imputed to
him; and that he acquiesced in the consequences of those proceedings after they had been
accomplished. Under these circumstances it is clear that the merit of this motion is, as we have
already stated, adversely affected in a high degree by the delay in asking for relief. Nor is it an
adequate reply to say that the proponent of this motion is an administrator who only qualified a
few months before this motion was made. No disability on the part of the defendant himself
existed from the time when the foreclosure was effected until his death; and we believe that the
delay in the appointment of the administrator and institution of this action is a circumstance
which is imputable to the parties in interest whoever they may have been. Of course if the minor
heirs had instituted an action in their own right to recover the property, it would have been
different.
It is, however, argued that the defendant has suffered prejudice by reason of the fact that the
bank became the purchaser of the property at the foreclosure sale for a price greatly below that
which had been agreed upon in the mortgage as the upset price of the property. In this
connection, it appears that in article nine of the mortgage which was the subject of this
foreclosure, as amended by the notarial document of July 19, 1906, the parties to this mortgage
made a stipulation to the effect that the value therein placed upon the mortgaged properties
should serve as a basis of sale in case the debt should remain unpaid and the bank should
proceed to a foreclosure. The upset price stated in that stipulation for all the parcels involved in
this foreclosure was P286,000. It is said in behalf of the appellant that when the bank bought in
the property for the sum of P110,200 it violated that stipulation.
It has been held by this court that a clause in a mortgage providing for a tipo, or upset price,
does not prevent a foreclosure, nor affect the validity of a sale made in the foreclosure
proceedings. (Yangco vs. Cruz Herrera and Wy Piaco, 11 Phil. Rep., 402; Banco-Español
Filipino vs. Donaldson, Sim and Co., 5 Phil. Rep., 418.) In both the cases here cited the property
was purchased at the foreclosure sale, not by the creditor or mortgagee, but by a third party.
Whether the same rule should be applied in a case where the mortgagee himself becomes the
purchaser has apparently not been decided by this court in any reported decision, and this
question need not here be considered, since it is evident that if any liability was incurred by the
bank by purchasing for a price below that fixed in the stipulation, its liability was a personal
liability derived from the contract of mortgage; and as we have already demonstrated such a
liability could not be the subject of adjudication in an action where the court had no jurisdiction
over the person of the defendant. If the plaintiff bank became liable to account for the difference
between the upset price and the price at which in bought in the property, that liability remains
unaffected by the disposition which the court made of this case; and the fact that the bank may
have violated such an obligation can in no wise affect the validity of the judgment entered in the
Court of First Instance.
In connection with the entire failure of the motion to show either a meritorious defense to the
action or that the defendant had suffered any prejudice of which the law can take notice, we may
be permitted to add that in our opinion a motion of this kind, which proposes to unsettle judicial
proceedings long ago closed, can not be considered with favor, unless based upon grounds
which appeal to the conscience of the court. Public policy requires that judicial proceedings be
upheld. The maximum here applicable is non quieta movere. As was once said by Judge
Brewer, afterwards a member of the Supreme Court of the United States:
Public policy requires that judicial proceedings be upheld, and that titles obtained in
those proceedings be safe from the ruthless hand of collateral attack. If technical
defects are adjudged potent to destroy such titles, a judicial sale will never realize that
value of the property, for no prudent man will risk his money in bidding for and buying
that title which he has reason to fear may years thereafter be swept away through
some occult and not readily discoverable defect. (Martin vs. Pond, 30 Fed., 15.)
In the case where that language was used an attempt was made to annul certain foreclosure
proceedings on the ground that the affidavit upon which the order of publication was based
erroneously stated that the State of Kansas, when he was in fact residing in another State. It
was held that this mistake did not affect the validity of the proceedings.
In the preceding discussion we have assumed that the clerk failed to send the notice by post as
required by the order of the court. We now proceed to consider whether this is a proper
assumption; and the proposition which we propose to establish is that there is a legal
presumption that the clerk performed his duty as the ministerial officer of the court, which
presumption is not overcome by any other facts appearing in the cause.
In subsection 14 of section 334 of the Code of Civil Procedure it is declared that there is a
presumption "that official duty has been regularly performed;" and in subsection 18 it is declared
that there is a presumption "that the ordinary course of business has been followed." These
presumptions are of course in no sense novelties, as they express ideas which have always
been recognized. Omnia presumuntur rite et solemniter esse acta donec probetur in contrarium.
There is therefore clearly a legal presumption that the clerk performed his duty about mailing this
notice; and we think that strong considerations of policy require that this presumption should be
allowed to operate with full force under the circumstances of this case. A party to an action has
no control over the clerk of the court; and has no right to meddle unduly with the business of the
clerk in the performance of his duties. Having no control over this officer, the litigant must
depend upon the court to see that the duties imposed on the clerk are performed.
Other considerations no less potent contribute to strengthen the conclusion just stated. There is
no principle of law better settled than that after jurisdiction has once been required, every act of
a court of general jurisdiction shall be presumed to have been rightly done. This rule is applied to
every judgment or decree rendered in the various stages of the proceedings from their initiation
to their completion (Voorhees vs. United States Bank, 10 Pet., 314; 35 U. S., 449); and if the
record is silent with respect to any fact which must have been established before the court could
have rightly acted, it will be presumed that such fact was properly brought to its knowledge. (The
Lessee of Grignon vs. Astor, 2 How., 319; 11 L. ed., 283.)
In making the order of sale [of the real state of a decedent] the court are presumed to
have adjudged every question necessary to justify such order or decree, viz: The
death of the owners; that the petitioners were his administrators; that the personal
estate was insufficient to pay the debts of the deceased; that the private acts of
114 | C o n f l i c t o f L a w s C a s e s
Assembly, as to the manner of sale, were within the constitutional power of the
Legislature, and that all the provisions of the law as to notices which are directory to
the administrators have been complied with. . . . The court is not bound to enter upon
the record the evidence on which any fact was decided. (Florentine vs. Barton, 2
Wall., 210; 17 L. ed., 785.) Especially does all this apply after long lapse of time.
Applegate vs. Lexington and Carter County Mining Co. (117 U. S., 255) contains an instructive
discussion in a case analogous to that which is now before us. It there appeared that in order to
foreclose a mortgage in the State of Kentucky against a nonresident debtor it was necessary
that publication should be made in a newspaper for a specified period of time, also be posted at
the front door of the court house and be published on some Sunday, immediately after divine
service, in such church as the court should direct. In a certain action judgment had been entered
against a nonresident, after publication in pursuance of these provisions. Many years later the
validity of the proceedings was called in question in another action. It was proved from the files
of an ancient periodical that publication had been made in its columns as required by law; but no
proof was offered to show the publication of the order at the church, or the posting of it at the
front door of the court-house. It was insisted by one of the parties that the judgment of the court
was void for lack of jurisdiction. But the Supreme Court of the United States said:
The court which made the decree . . . was a court of general jurisdiction. Therefore
every presumption not inconsistent with the record is to be indulged in favor of its
jurisdiction. . . . It is to be presumed that the court before making its decree took care
of to see that its order for constructive service, on which its right to make the decree
depended, had been obeyed.
It is true that in this case the former judgment was the subject of collateral , or indirect attack,
while in the case at bar the motion to vacate the judgment is direct proceeding for relief against
it. The same general presumption, however, is indulged in favor of the judgment of a court of
general jurisdiction, whether it is the subject of direct or indirect attack the only difference being
that in case of indirect attack the judgment is conclusively presumed to be valid unless the
record affirmatively shows it to be void, while in case of direct attack the presumption in favor of
its validity may in certain cases be overcome by proof extrinsic to the record.
The presumption that the clerk performed his duty and that the court made its decree with the
knowledge that the requirements of law had been complied with appear to be amply sufficient to
support the conclusion that the notice was sent by the clerk as required by the order. It is true
that there ought to be found among the papers on file in this cause an affidavit, as required by
section 400 of the Code of Civil Procedure, showing that the order was in fact so sent by the
clerk; and no such affidavit appears. The record is therefore silent where it ought to speak. But
the very purpose of the law in recognizing these presumptions is to enable the court to sustain a
prior judgment in the face of such an omission. If we were to hold that the judgment in this case
is void because the proper affidavit is not present in the file of papers which we call the record,
the result would be that in the future every title in the Islands resting upon a judgment like that
now before us would depend, for its continued security, upon the presence of such affidavit
among the papers and would be liable at any moment to be destroyed by the disappearance of
that piece of paper. We think that no court, with a proper regard for the security of judicial
proceedings and for the interests which have by law been confided to the courts, would incline to
favor such a conclusion. In our opinion the proper course in a case of this kind is to hold that the
legal presumption that the clerk performed his duty still maintains notwithstanding the absence
from the record of the proper proof of that fact.
In this connection it is important to bear in mind that under the practice prevailing in the
Philippine Islands the word "record" is used in a loose and broad sense, as indicating the
collective mass of papers which contain the history of all the successive steps taken in a case
and which are finally deposited in the archives of the clerk's office as a memorial of the litigation.
It is a matter of general information that no judgment roll, or book of final record, is commonly
kept in our courts for the purpose of recording the pleadings and principal proceedings in actions
which have been terminated; and in particular, no such record is kept in the Court of First
Instance of the city of Manila. There is, indeed, a section of the Code of Civil Procedure which
directs that such a book of final record shall be kept; but this provision has, as a matter of
common knowledge, been generally ignored. The result is that in the present case we do not
have the assistance of the recitals of such a record to enable us to pass upon the validity of this
judgment and as already stated the question must be determined by examining the papers
contained in the entire file.
But it is insisted by counsel for this motion that the affidavit of Bernardo Chan y Garcia showing
that upon April 4, 1908, he sent a notification through the mail addressed to the defendant at
Manila, Philippine Islands, should be accepted as affirmative proof that the clerk of the court
failed in his duty and that, instead of himself sending the requisite notice through the mail, he
relied upon Bernardo to send it for him. We do not think that this is by any means a necessary
inference. Of course if it had affirmatively appeared that the clerk himself had attempted to
comply with this order and had directed the notification to Manila when he should have directed
it to Amoy, this would be conclusive that he had failed to comply with the exact terms of the
order; but such is not this case. That the clerk of the attorneys for the plaintiff erroneously sent a
notification to the defendant at a mistaken address affords in our opinion very slight basis for
supposing that the clerk may not have sent notice to the right address.
There is undoubtedly good authority to support the position that when the record states the
evidence or makes an averment with reference to a jurisdictional fact, it will not be presumed
that there was other or different evidence respecting the fact, or that the fact was otherwise than
stated. If, to give an illustration, it appears from the return of the officer that the summons was
served at a particular place or in a particular manner, it will not be presumed that service was
also made at another place or in a different manner; or if it appears that service was made upon
a person other than the defendant, it will not be presumed, in the silence of the record, that it
was made upon the defendant also (Galpin vs. Page, 18 Wall., 350, 366; Settlemier vs. Sullivan,
97 U. S., 444, 449). While we believe that these propositions are entirely correct as applied to
the case where the person making the return is the officer who is by law required to make the
return, we do not think that it is properly applicable where, as in the present case, the affidavit
was made by a person who, so far as the provisions of law are concerned, was a mere
intermeddler.
The last question of importance which we propose to consider is whether a motion in the cause
is admissible as a proceeding to obtain relief in such a case as this. If the motion prevails the
judgment of July 2, 1908, and all subsequent proceedings will be set aside, and the litigation will
be renewed, proceeding again from the date mentioned as if the progress of the action had not
been interrupted. The proponent of the motion does not ask the favor of being permitted to
interpose a defense. His purpose is merely to annul the effective judgment of the court, to the
end that the litigation may again resume its regular course.
There is only one section of the Code of Civil Procedure which expressly recognizes the
authority of a Court of First Instance to set aside a final judgment and permit a renewal of the
litigation in the same cause. This is as follows:
115 | C o n f l i c t o f L a w s C a s e s
SEC. 113. Upon such terms as may be just the court may relieve a party or legal
representative from the judgment, order, or other proceeding taken against him
through his mistake, inadvertence, surprise, or excusable neglect; Provided, That
application thereof be made within a reasonable time, but in no case exceeding six
months after such judgment, order, or proceeding was taken.
An additional remedy by petition to the Supreme Court is supplied by section 513 of the same
Code. The first paragraph of this section, in so far as pertinent to this discussion, provides as
follows:
When a judgment is rendered by a Court of First Instance upon default, and a party
thereto is unjustly deprived of a hearing by fraud, accident, mistake or excusable
negligence, and the Court of First Instance which rendered the judgment has finally
adjourned so that no adequate remedy exists in that court, the party so deprived of a
hearing may present his petition to the Supreme Court within sixty days after he first
learns of the rendition of such judgment, and not thereafter, setting forth the facts and
praying to have judgment set aside. . . .
It is evident that the proceeding contemplated in this section is intended to supplement the
remedy provided by section 113; and we believe the conclusion irresistible that there is no other
means recognized by law whereby a defeated party can, by a proceeding in the same cause,
procure a judgment to be set aside, with a view to the renewal of the litigation.
The Code of Civil Procedure purports to be a complete system of practice in civil causes, and it
contains provisions describing with much fullness the various steps to be taken in the conduct of
such proceedings. To this end it defines with precision the method of beginning, conducting, and
concluding the civil action of whatever species; and by section 795 of the same Code it is
declared that the procedure in all civil action shall be in accordance with the provisions of this
Code. We are therefore of the opinion that the remedies prescribed in sections 113 and 513 are
exclusive of all others, so far as relates to the opening and continuation of a litigation which has
been once concluded.
The motion in the present case does not conform to the requirements of either of these
provisions; and the consequence is that in our opinion the action of the Court of First Instance in
dismissing the motion was proper.
If the question were admittedly one relating merely to an irregularity of procedure, we cannot
suppose that this proceeding would have taken the form of a motion in the cause, since it is
clear that, if based on such an error, the came to late for relief in the Court of First Instance. But
as we have already seen, the motion attacks the judgment of the court as void for want of
jurisdiction over the defendant. The idea underlying the motion therefore is that inasmuch as the
judgment is a nullity it can be attacked in any way and at any time. If the judgment were in fact
void upon its face, that is, if it were shown to be a nullity by virtue of its own recitals, there might
possibly be something in this. Where a judgment or judicial order is void in this sense it may be
said to be a lawless thing, which can be treated as an outlaw and slain at sight, or ignored
wherever and whenever it exhibits its head.
But the judgment in question is not void in any such sense. It is entirely regular in form, and the
alleged defect is one which is not apparent upon its face. It follows that even if the judgment
could be shown to be void for want of jurisdiction, or for lack of due process of law, the party
aggrieved thereby is bound to resort to some appropriate proceeding to obtain relief. Under
accepted principles of law and practice, long recognized in American courts, a proper remedy in
such case, after the time for appeal or review has passed, is for the aggrieved party to bring an
action to enjoin the judgment, if not already carried into effect; or if the property has already
been disposed of he may institute suit to recover it. In every situation of this character an
appropriate remedy is at hand; and if property has been taken without due process, the law
concedes due process to recover it. We accordingly old that, assuming the judgment to have
been void as alleged by the proponent of this motion, the proper remedy was by an original
proceeding and not by motion in the cause. As we have already seen our Code of Civil
Procedure defines the conditions under which relief against a judgment may be productive of
conclusion for this court to recognize such a proceeding as proper under conditions different
from those defined by law. Upon the point of procedure here involved, we refer to the case of
People vs. Harrison (84 Cal., 607) wherein it was held that a motion will not lie to vacate a
judgment after the lapse of the time limited by statute if the judgment is not void on its face; and
in all cases, after the lapse of the time limited by statute if the judgment is not void on its face;
and all cases, after the lapse of such time, when an attempt is made to vacate the judgment by a
proceeding in court for that purpose an action regularly brought is preferable, and should be
required. It will be noted taken verbatim from the California Code (sec. 473).
The conclusions stated in this opinion indicate that the judgment appealed from is without error,
and the same is accordingly affirmed, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Avanceña, JJ., concur.
G.R. No. L-18164 January 23, 1967
WILLIAM F. GEMPERLE, plaintiff-appellant,
vs.
HELEN SCHENKER and PAUL SCHENKER as her husband, defendants-appellees.
Gamboa & Gamboa for plaintiff-appellant.
A. R. Narvasa for defendants-appellees.
CONCEPCION, C. J.:
Appeal, taken by plaintiff, William F. Gemperle, from a decision of the Court of First Instance of
Rizal dismissing this case for lack of jurisdiction over the person of defendant Paul Schenker
and for want of cause of action against his wife and co-defendant, Helen Schenker said Paul
Schenker "being in no position to be joined with her as party defendant, because he is beyond
the reach of the magistracy of the Philippine courts."
The record shows that sometime in 1952, Paul Schenker-hereinafter referred to as Schenker —
acting through his wife and attorney-in-fact, Helen Schenker — herein-after referred to as Mrs.
Schenker — filed with the Court of First Instance of Rizal, a complaint — which was docketed as
Civil Case No. Q-2796 thereof — against herein plaintiff William F. Gemperle, for the
enforcement of Schenker's allegedly initial subscription to the shares of stock of the Philippines-
Swiss Trading Co., Inc. and the exercise of his alleged pre-emptive rights to the then unissued
original capital stock of said corporation and the increase thereof, as well as for an accounting
and damages. Alleging that, in connection with said complaint, Mrs. Schenker had caused to be
116 | C o n f l i c t o f L a w s C a s e s
published some allegations thereof and other matters, which were impertinent, irrelevant and
immaterial to said case No. Q-2796, aside from being false and derogatory to the reputation,
good name and credit of Gemperle, "with the only purpose of attacking" his" honesty, integrity
and reputation" and of bringing him "into public hatred, discredit, disrepute and contempt as a
man and a businessman", Gemperle commenced the present action against the Schenkers for
the recovery of P300,000 as damages, P30,000 as attorney's fees, and costs, in addition to
praying for a judgment ordering Mrs. Schenker "to retract in writing the said defamatory
expressions". In due course, thereafter, the lower court, rendered the decision above referred to.
A reconsiderating thereof having been denied, Gemperle interposed the present appeal.
The first question for determination therein is whether or not the lower court had acquired
jurisdiction over the person of Schenker. Admittedly, he, a Swiss citizen, residing in Zurich,
Switzerland, has not been actually served with summons in the Philippines, although the
summons address to him and Mrs. Schenker had been served personally upon her in the
Philippines. It is urged by plaintiff that jurisdiction over the person of Schenker has been secured
through voluntary appearance on his part, he not having made a special appearance to assail
the jurisdiction over his person, and an answer having been filed in this case, stating that "the
defendants, by counsel, answering the plaintiff's complaint, respectfully aver", which is allegedly
a general appearance amounting to a submission to the jurisdiction of the court, confirmed,
according to plaintiff, by a P225,000 counterclaim for damages set up in said answer; but this
counterclaim was set up by Mrs. Schenker alone, not including her husband. Moreover, said
answer contained several affirmative defenses, one of which was lack of jurisdiction over the
person of Schenker, thus negating the alleged waiver of this defense. Nevertheless, We hold
that the lower court had acquired jurisdiction over said defendant, through service of the
summons addressed to him upon Mrs. Schenker, it appearing from said answer that she is the
representative and attorney-in-fact of her husband aforementioned civil case No. Q-2796, which
apparently was filed at her behest, in her aforementioned representative capacity. In other
words, Mrs. Schenker had authority to sue, and had actually sued on behalf of her husband, so
that she was, also, empowered to represent him in suits filed against him, particularly in a case,
like the of the one at bar, which is consequence of the action brought by her on his behalf.
Inasmuch as the alleged absence of a cause of action against Mrs. Schenker is premised upon
the alleged lack of jurisdiction over the person of Schenker, which cannot be sustained, it follows
that the conclusion drawn therefore from is, likewise, untenable.
Wherefore, the decision appealed from should be, is hereby, reversed, and the case remanded
to the lower court for proceedings, with the costs of this instance defendants-appellees. It is so
ordered.
G.R. No. 168747 October 19, 2007
VICTORIA REGNER, Petitioner,
vs.
CYNTHIA R. LOGARTA, TERESA R. TORMIS and CEBU COUNTRY CLUB,
Inc., Respondents.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review on Certiorari seeks to reverse the Decision1 dated 6 May 2005 of the Subsequently, on 12 September 2002, Teresa filed a motion to dismiss Civil Case No. CEB
Court of Appeals in CA-G.R. CV No. 71028 entitled, "Victoria Regner v. Cynthia Logarta, Teresa 23927 because of petitioner’s failure to prosecute her action for an unreasonable length of time.
R. Tormis and Cebu Country Club, Inc.," which affirmed the Order dated 9 November 2000 of
the Regional Trial Court (RTC) of Cebu, granting herein respondents’ motion to dismiss Civil
Petitioner opposed5 the motion and filed her own motion to set the case for pre-trial, to which
Case No. CEB 23927. The Order dated 9 November 2000 of the RTC dismissed herein
Teresa filed her rejoinder on the ground that their sister, Cynthia, an indispensable party, had
petitioner’s complaint for declaration of nullity of a deed of donation, for failure to serve
not yet been served a summons. Thus, Teresa prayed for the dismissal of petitioner’s complaint,
summons on Cynthia Logarta, an indispensable party therein.
as the case would not proceed without Cynthia’s presence.

Civil Case No. CEB. 23927 arose from the following factual antecedents:
On 9 November 2000, the RTC issued an Order6 granting respondent Teresa’s motion to
dismiss, pertinent portions of which read:
Luis Regner (Luis) had three daughters with his first wife, Anicita C. Regner, namely, Cynthia
Logarta (Cynthia) and Teresa Tormis (Teresa), the respondents herein, and Melinda Regner-
Considering that the donees in the Deed of Donation are Cynthia R. Logarta and Teresa R.
Borja (Melinda).
Tormis, they are therefore an (sic) indispensable party (sic). In the case of Quisumbing vs. Court
of Appeals, 189 SCRA 325, indispensable parties are those with such an interest in the
Herein petitioner Victoria Regner (Victoria) is the second wife of Luis. controversy that a final decree would necessarily affect their rights so that the court could not
proceed without their presence
During the lifetime of Luis, he acquired several properties, among which is a share at Cebu
Country Club Inc., evidenced by Proprietary Ownership Certificate No. 0272. On 15 May 1998, Wherefore, in view of the foregoing, the instant case is hereby dismissed without prejudice.
Luis executed a Deed2 of Donation in favor of respondents Cynthia and Teresa covering
Proprietary Ownership Certificate No. 0272 of the Cebu Country Club, Inc.
A motion for reconsideration was filed by petitioner, but the same was denied in an Order dated
14 February 2001.
Luis passed away on 11 February 1999.
Aggrieved, petitioner appealed to the Court of Appeals. On 6 May 2005, the Court of Appeals
On 15 June 1999, Victoria filed a Complaint3 for Declaration of Nullity of the Deed of Donation rendered a Decision denying the appeal and affirming in toto the order of dismissal of the
with Prayer for Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order complaint by the RTC and the denial of the motion for reconsideration thereof. The Court of
against Cynthia and Teresa with the RTC, docketed as Civil Case No. CEB. 23927. Victoria Appeals ratiocinated that petitioner’s failure to move for an extraterritorial service of summons
alleged in her complaint that: on 17 March 1997, Luis made a written declaration wherein he constitutes failure to prosecute for an unreasonable length of time, thus:
stated that due to his illness and forgetfulness, he would not sign any document without the
knowledge of his lawyer, Atty. Francis Zosa; on 15 May 1998, when Luis was already very ill and
[T]he plaintiff-appellant [Victoria Regner] should have moved for the extraterritorial service of
no longer of sound and disposing mind, Cynthia and Teresa , conspiring and confederating with
summons for both defendants-appellees Teresa R. Tormis and Cynthia R. Logarta as they were
each other, fraudulently made or caused to be fraudulently made a Deed of Donation whereby
not residing and were not found in the Philippines when plaintiff-appellant [Victoria Regner] filed
they made it appear that Luis donated to them Proprietary Ownership Certificate No. 0272; since
this case below. Although defendant-appellant Teresa Tormis was personally served with
Luis no longer had the ability to write or affix his signature, Melinda, acting under the influence of
summons on June 1, 2000 when she came to the Philippines but the same was only effected
her sisters, Cynthia and Teresa, fraudulently manipulated the hand of Luis so that he could affix
after a long wait or after the lapse of almost one year from the date the complaint was filed on
his thumbmark on the assailed Deed of Donation; on 8 February 1998, or three days before the
June 15, 1999. To allow this practice would be to make the continuation of like proceedings
death of Luis, and when he was already in comatose condition at the Cebu Doctors’ Hospital,
before the courts dependent on when the defendants would be personally served with summons
Melinda, Teresa, and Cynthia caused the preparation of an affidavit to the effect that Luis
by the time they would come to the Philippines, which would only unnecessarily delay the
affirmed the Deed of Donation he allegedly executed earlier by lifting his hand to affix his
proceedings and clog the court dockets as well. The afore-cited rule was precisely crafted to
thumbmark on the said affidavit.
meet situations similar to the present case to avoid unnecessary delays.

Sheriff Melchor A. Solon served the summonses on Cynthia and Teresa at the Borja Family
Clinic in Tagbilaran City wherein Melinda worked as a doctor, but Melinda refused to receive the
summonses for her sisters and informed the sheriff that their lawyer, Atty. Francis Zosa, would
be the one to receive the same.
Upon her arrival in the Philippines, on 1 June 2000, Teresa was personally served the summons
at Room 304, Regency Crest Condominium, Banilad, Cebu City. She filed her Answer 4 with
counterclaim with the RTC on 6 June 2000.
It has to be emphasized that it is incumbent upon the plaintiff [Victoria Regner] to move with
leave of court for the extraterritorial service of summons. Taking into account the considerable
time that had elapsed from the filing of the complaint on June 15, 1999 until defendant-appellee
Teresa R. Tormis, through counsel, filed a motion to dismiss on September 12, 2000, or
approximately fifteen (15) months, without any act on the part of plaintiff-appellant [Victoria
Regner] to move for extraterritorial service of summons upon the person of defendant-appellee
Cynthia Logarta renders plaintiff-appellant’s [Victoria Regner] complaint dismissible for failure to
prosecute her action for unreasonable length of time under Section 3, Rule 17, Revised Rules of
Court, x x x.7

117 | C o n f l i c t o f L a w s C a s e s
Hence, this appeal via petition8 for review on certiorari filed by petitioner raising the following
assignment of errors:
THE COURT OF APPEALS ERRED IN HOLDING THAT THE DELAY IN SERVING SUMMONS
ON ONE OF THE DEFENDANTS CONSTITUTES A FAILURE TO PROSECUTE
NOTWITHSTANDING THAT THE REST OF THE CO-DEFENDANTS WERE DULY SERVED
WITH SUMMONSES
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT THE ANSWER FILED BY
ONE INDIVIDUAL DEFENDANT REDOUNDS TO THE BENEFIT OF THE OTHER
DEFENDANT WHO HAS NOT BEEN SERVED WITH SUMMONS, THE NATURE OF ACTION
BEING ADMITTEDLY COMMON AMONG ALL DEFENDANTS.9
From the foregoing, this Court identifies the issues to be resolved in this petition as: (1) Whether
a co-donee is an indispensable party in an action to declare the nullity of the deed of donation,
and (2) whether delay in the service of summons upon one of the defendants constitutes failure
to prosecute that would warrant dismissal of the complaint.
A Court must acquire jurisdiction over the persons of indispensable parties before it can validly
pronounce judgments personal to the parties. Courts acquire jurisdiction over a party plaintiff
upon the filing of the complaint. On the other hand, jurisdiction over the person of a party
defendant is assured upon the service of summons in the manner required by law or otherwise
by his voluntary appearance. As a rule, if a defendant has not been summoned, the court
acquires no jurisdiction over his person, and a personal judgment rendered against such
defendant is null and void.10 A decision that is null and void for want of jurisdiction on the part of
the trial court is not a decision in the contemplation of law and, hence, it can never become final
and executory.11
Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest
without whom there can be no final determination of an action. As such, they must be joined
either as plaintiffs or as defendants. The general rule with reference to the making of parties in a
civil action requires, of course, the joinder of all necessary parties where possible, and the
joinder of all indispensable parties under any and all conditions, their presence being a sine qua
non for the exercise of judicial power.12 It is precisely "when an indispensable party is not before
the court [that] the action should be dismissed."13 The absence of an indispensable party
renders all subsequent actions of the court null and void for want of authority to act, not only as
to the absent parties but even as to those present.14
As we ruled in Alberto v. Mananghala15 :
In an action for recovery of property against a person who purchased it from another who in turn
acquired it from others by the same means or by donation or otherwise, the predecessors of
defendants are indispensable parties if the transfers, if not voided, may bind plaintiff. (Garcia vs.
Reyes, 17 Phil. 127.) In the latter case, this Court held:
In order to bring this suit duly to a close, it is imperative to determine the only question raised in
connection with the pending appeal, to wit, whether all the persons who intervened in the matter
of the transfers and donation herein referred to, are or are not necessary parties to this suit,
since it is asked in the complaint that the said transfers and donation be declared null and void –
118 | C o n f l i c t o f L a w s C a s e s
an indispensable declaration for the purpose, in a proper case, of concluding the plaintiff to be
the sole owner of the house in dispute.
If such a declaration of annulment can directly affect the persons who made and who were
concerned in the said transfers, nothing could be more proper and just than to hear them in the
litigation, as parties interested in maintaining the validity of those transactions, and therefore,
whatever be the nature of the judgment rendered, Francisco Reyes, Dolores Carvajal, Alfredo
Chicote, Vicente Miranda, and Rafael Sierra, besides the said minors, must be included in the
case as defendants." (Garcia vs. Reyes, 17 Phil., 130-131.)
It takes no great degree of legal sophistication to realize that Cynthia and Teresa are
indispensable parties to Civil Case No. CEB 23927. Cynthia and Teresa allegedly derived their
rights to the subject property by way of donation from their father Luis. The central thrust of the
petitioner’s complaint in Civil Case No. CEB 23927 was that Luis could not have donated
Proprietary Ownership Certificate No. 0272 to his daughters Cynthia and Teresa, as Luis was
already very ill and no longer of sound and disposing mind at the time of donation on 15 May
1997. Accordingly, the prayer in petitioner’s complaint was for the trial court to declare null and
void the Deed of Donation and to restrain the Cebu Country Club, Inc. from transferring title and
ownership of Proprietary Ownership Certificate No. 0272 to Cynthia and Teresa.
Thus, based on the Deed of Donation, Teresa and Cynthia are co-owners of Proprietary
Membership Certificate No. 0272 of Cebu Country Club, Inc. The country club membership
certificate is undivided and it is impossible to pinpoint which specific portion of the property
belongs to either Teresa or Cynthia. Indeed, both Teresa and Cynthia are indispensable parties
in Civil Case No. CEB 23927.
An indispensable party has been defined as follows:
An indispensable party is a party who has such an interest in the controversy or subject matter
that a final adjudication cannot be made, in his absence, without injuring or affecting that
interest, a party who has not only an interest in the subject matter of the controversy, but also
has an interest of such nature that a final decree cannot be made without affecting his interest or
leaving the controversy in such a condition that its final determination may be wholly inconsistent
with equity and good conscience. It has also been considered that an indispensable party is a
person in whose absence there cannot be a determination between the parties already before
the court which is effective, complete, or equitable. Further, an indispensable party is one who
must be included in an action before it may properly go forward.
A person is not an indispensable party, however, if his interest in the controversy or subject
matter is separable from the interest of the other parties, so that it will not necessarily be directly
or injuriously affected by a decree which does complete justice between them. Also, a person is
not an indispensable party if his presence would merely permit complete relief between him and
those already parties to the action, or if he has no interest in the subject matter of the action. It is
not a sufficient reason to declare a person to be an indispensable party that his presence will
avoid multiple litigation.16
In Servicewide Specialists, Incorporated v. Court of Appeals,17 this Court held that no final
determination of a case could be made if an indispensable party is not legally present therein:
An indispensable party is one whose interest will be affected by the court’s action in the
litigation, and without whom no final determination of the case can be had. The party’s interest in
the subject matter of the suit and in the relief sought are so inextricably intertwined with the other
parties that his legal presence as a party to the proceeding is an absolute necessity. In his
absence there cannot be a resolution of the dispute of the parties before the court which is
effective, complete, or equitable.
The rationale for treating all the co-owners of a property as indispensable parties in a suit
involving the co-owned property is explained in Arcelona v. Court of Appeals 18 :
As held by the Supreme Court, were the courts to permit an action in ejectment to be maintained
by a person having merely an undivided interest in any given tract of land, a judgment in favor of
the defendants would not be conclusive as against the other co-owners not parties to the suit,
and thus the defendant in possession of the property might be harassed by as many succeeding
actions of ejectment, as there might be co-owners of the title asserted against him. The purpose
of this provision was to prevent multiplicity of suits by requiring the person asserting a right
against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons
standing in the same position, so that the whole matter in dispute may be determined once and
for all in one litigation.
Applying the foregoing definitions and principles to the present case, this Court finds that any
decision in Civil Case No. CEB 23927 cannot bind Cynthia, and the Court cannot nullify the
donation of the property she now co-owns with Teresa, even if limited only to the portion
belonging to Teresa, to whom summons was properly served, since ownership of the property is
still pro indiviso. Obviously, Cynthia is an indispensable party in Civil Case No. CEB 23927
without whom the lower court is barred from making a final adjudication as to the validity of the
entire donation. Without the presence of indispensable parties to a suit or proceeding, a
judgment therein cannot attain finality.19
Being an indispensable party in Civil Case No. CEB 23927, the trial court must also acquire
jurisdiction over Cynthia’s person through the proper service of summons.
Based on the foregoing disquisitions, the issue of whether the answer filed by Teresa should
benefit Cynthia who was not served summons need not be discussed.
As to determine whether Cynthia was properly served a summons, it will be helpful to determine
first the nature of the action filed against Cynthia and Teresa by petitioner Victoria, whether it is
an action in personam, in rem or quasi in rem. This is because the rules on service of summons
embodied in Rule 14 apply according to whether an action is one or the other of these actions.
In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a
contract or the recovery of damages.20 In contrast, in a real action, the plaintiff seeks the
recovery of real property; or, as indicated in Section 2(a), Rule 4 of the then Rules of Court, a
real action is an action affecting title to real property or for the recovery of possession, or for
partition or condemnation of, or foreclosure of mortgage on, real property. An action in personam
is an action against a person on the basis of his personal liability, while an action in rem is an
action against the thing itself, instead of against the person. 21
119 | C o n f l i c t o f L a w s C a s e s
In an action in personam, personal service of summons or, if this is not possible and he cannot
be personally served, substituted service, as provided in Section 7, Rule 14 of the Rules of
Court,22 is essential for the acquisition by the court of jurisdiction over the person of a defendant
who does not voluntarily submit himself to the authority of the court. 23 If defendant cannot be
served a summons because he is temporarily abroad, but is otherwise a Philippine resident,
service of summons may, by leave of court, be made by publication.24 Otherwise stated, a
resident defendant in an action in personam, who cannot be personally served a summons, may
be summoned either by means of substituted service in accordance with Section 7, Rule 14 of
the Rules of Court, or by publication as provided in Sections 15 and 16 of the same Rule.
In all of these cases, it should be noted, defendant must be a resident of the Philippines;
otherwise an action in personam cannot be brought because jurisdiction over his person is
essential to make a binding decision.
On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the
defendant is not essential for giving the court jurisdiction so long as the court acquires
jurisdiction over the res. If the defendant is a nonresident and he is not found in the country,
summons may be served extraterritorially in accordance with Section 15, Rule 14 of the Rules of
Court, which provides:
Section 15. Extraterritorial service. - When the defendant does not reside and is not found in the
Philippines, and the action affects the personal status of the plaintiff or relates to, or the subject
of which is, property within the Philippines, in which the defendant has or claims a lien or
interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in
excluding the defendant from any interest therein, or the property of the defendant has been
attached within the Philippines, service may, by leave of court, be effected out of the Philippines
by personal service as under Section 6; or by publication in a newspaper of general circulation in
such places and for such time as the court may order, in which case a copy of the summons and
order of the court shall be sent by registered mail to the last known address of the defendant, or
in any other manner the court may deem sufficient. Any order granting such leave shall specify a
reasonable time, which shall not be less than sixty (60) days after notice, within which the
defendant must answer.
As stated above, there are only four instances wherein a defendant who is a non-resident and is
not found in the country may be served a summons by extraterritorial service, to wit: (1) when
the action affects the personal status of the plaintiff; (2) when the action relates to, or the subject
of which is property within the Philippines, on which the defendant claims a lien or an interest,
actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in
excluding the defendant from any interest in property located in the Philippines; and (4) when the
defendant non-resident’s property has been attached within the Philippines. In these instances,
service of summons may be effected by (a) personal service out of the country, with leave of
court; (b) publication, also with leave of court; or (c) any other manner the court may deem
sufficient.25
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has
jurisdiction over the res, i.e., the personal status of the plaintiff who is domiciled in the
Philippines or the property litigated or attached. Service of summons in the manner provided in
Section 15, Rule 14 of the Rules of Court is not for the purpose of vesting the court with
jurisdiction, but for complying with the requirements of fair play or due process, so that the
defendant will be informed of the pendency of the action against him; and the possibility that
property in the Philippines belonging to him, or in which he has an interest, might be subjected to
a judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is so action for an unreasonable length of time, or to comply with these Rules or any order of the
minded.26 court, the complaint may be dismissed upon motion of the defendant or upon the court's own
motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same
or in a separate action. This dismissal shall have the effect of an adjudication upon the merits,
In petitioner’s Complaint in Civil Case No. CEB No. 23427, she alleged that Cynthia is residing
unless otherwise declared by the court.
at 462 West Vine No. 201, Glendale, California, 912041, U.S.A.; while Teresa is residing at 2408
South Hacienda Boulevard, Hacienda Heights, California, but they usually visit here in the
Philippines and can be served summonses and other processes at the Borja Family Clinic, As can be gleaned from the rule, there are three instances when the complaint may be
Bohol. Pertinent portions of the Complaint read: dismissed due to the plaintiff's fault: (1) if he fails to appear during a scheduled trial, especially
on the date for the presentation of his evidence in chief; (2) if he fails to prosecute his action for
an unreasonable length of time; and (3) if he fails to comply with the rules or any order of the
2. Defendant Cynthia R. Logarta is a Filipino, of legal age, married to Ramon Logarta,
court.28
resident (sic) 463 West Vine No.201, Glendale, California, 912041, USA. She however
usually visits in the Philippines and can be served with summons and other processes
of this Honorable Court at Borja Family Clinic, Tagbilaran, Bohol; Considering the circumstances of the case, it can be concluded that the petitioner failed to
prosecute the case for an unreasonable length of time. There is failure to prosecute when the
plaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial or when
3. Defendant Teresa R. Tormis is likewise a Filipino, of legal age, married to Antonio
postponements in the past were due to the plaintiff's own making, intended to be dilatory or
Tormis, and a resident of 2408 South Hacienda Heights, California, 19745, U.S.A. She
caused substantial prejudice on the part of the defendant.29
however usually visits in the Philippines and can be served with summons and other
processes of this Honorable Court at Borja Family Clinic, Tagbilaran, Bohol. 27
While a court can dismiss a case on the ground of failure to prosecute, the true test for the
exercise of such power is whether, under the prevailing circumstances, the plaintiff is culpable
Petitioner prayed for a declaration of nullity of the deed of donation, to restrain Cebu Country
for want of due diligence in failing to proceed with reasonable promptitude. 30 As to what
Club, Inc. from transferring title and ownership of Proprietary Ownership Certificate No. 0272 to
constitutes an "unreasonable length of time," within the purview of the above-quoted provision,
Cynthia and Teresa, and for moral and exemplary damages. Civil Case No. CEB 23927 is
the Court has ruled that it "depends upon the circumstances of each particular case," and that
evidently an action against Cynthia and Teresa on the basis of their personal liability for the
"the sound discretion of the court" in the determination of said question "will not be disturbed, in
alleged fraudulent transfer of the subject Country Club membership from Luis to their name. In
the absence of patent abuse"; and that "the burden of showing abuse of judicial discretion is
this sense, petitioner questions the participation and shares of Cynthia and Teresa in the
upon the appellant since every presumption is in favor of the correctness of the court's
transferred Country Club membership. Moreover, the membership certificate from the Cebu
action."31 Likewise, the concept of promptness is a relative term and must not unnecessarily be
Country Club, Inc. is a personal property. Thus, the action instituted by petitioner before the RTC
an inflexible one. It connotes an action without hesitation and loss of time. As to what constitutes
is in personam.
the term is addressed to the consideration of the trial court, bearing in mind that while actions
must be disposed of with dispatch, the essential ingredient is the administration of justice and
Being an action in personam, the general rule requires the personal service of summons on not mere speed.32
Cynthia within the Philippines, but this is not possible in the present case because Cynthia is a
non-resident and is not found within the Philippines.
It is well to quote the doctrine laid in Padua v. Ericta,33 as accentuated in the subsequent case
Marahay v. Melicor34:
As Cynthia is a nonresident who is not found in the Philippines, service of summons on her must
be in accordance with Section 15, Rule 14 of the Rules of Court. Such service, to be effective
Courts should not brook undue delays in the ventilation and determination of causes. It should
outside the Philippines, must be made either (1) by personal service; (2) by publication in a
be their constant effort to assure that litigations are prosecuted and resolved with dispatch.
newspaper of general circulation in such places and for such time as the court may order, in
Postponements of trials and hearings should not be allowed except on meritorious grounds; and
which case a copy of the summons and order of the court should be sent by registered mail to
the grant or refusal thereof rests entirely in the sound discretion of the Judge. It goes without
the last known address of the defendant; or (3) in any other manner which the court may deem
saying, however, that discretion must be reasonably and wisely exercised, in the light of the
sufficient. The third mode, like the first two, must be made outside the Philippines, such as
attendant circumstances. Some reasonable deferment of the proceedings may be allowed or
through the Philippine Embassy in the foreign country where Cynthia resides.
tolerated to the end that cases may be adjudged only after full and free presentation of evidence
by all the parties, especially where the deferment would cause no substantial prejudice to any
Since in the case at bar, the service of summons upon Cynthia was not done by any of the part. The desideratum of a speedy disposition of cases should not, if at all possible, result in the
authorized modes, the trial court was correct in dismissing petitioner’s complaint. precipitate loss of a party’s right to present evidence and either in plaintiff's being non-suited or
the defendant's being pronounced liable under an ex parte judgment.
Section 3, Rule 17 of the 1997 Rules of Civil Procedure, states –
"[T]rial courts have x x x the duty to dispose of controversies after trial on the merits whenever
possible. It is deemed an abuse of discretion for them, on their own motion, ‘to enter a dismissal
SEC. 3. Dismissal due to fault of plaintiff. – If, for no justifiable cause, the plaintiff fails to appear which is not warranted by the circumstances of the case’ (Municipality of Dingras v. Bonoan, 85
on the date of the presentation of his evidence in chief on the complaint, or to prosecute his Phil. 458-59 [1950]). While it is true that the dismissal of an action on grounds specified under
120 | C o n f l i c t o f L a w s C a s e s
Section 3, Rule 17 of the Revised Rules of Court is addressed to their discretion (Flores v. Phil. time erode the people’s confidence in the judiciary. We take a dim view of petitioner’s
Alien Property Administrator, 107 Phil. 778 [1960]; Montelibano v. Benares, 103 Phil. 110 [1958]; complacent attitude. Ex nihilo nihil fit.35
Adorable v. Bonifacio, 105 Phil. 1269 [1959]; Inter-Island Gas Service, Inc. v. De la Gerna, L-
17631, October 19, 1966, 18 SCRA 390), such discretion must be exercised soundly with a view
Likewise, petitioner’s counsel inexplicably failed to diligently pursue the service of summonses
to the circumstances surrounding each particular case (Vernus-Sanciangco v. Sanciangco, L-
on respondents. These were acts of negligence, laxity and truancy which the court could have
12619, April 28, 1962, 4 SCRA 1209). If facts obtain that serve as mitigating circumstances for
very easily avoided or timely remedied. Petitioner and her counsel could not avail themselves of
the delay, the same should be considered and dismissal denied or set aside (Rudd v. Rogerson,
this Court’s sympathy, considering their apparent complacency, if not delinquency, in the
15 ALR 2d 672; Cervi v. Greenwood, 147 Colo. 190, 362 P.2d 1050 [1961]), especially where
conduct of their litigation.
the suit appears to be meritorious and the plaintiff was not culpably negligent and no injury
results to defendant (27 C.J.S. 235-36; 15 ALR 3rd 680)." (Abinales vs. Court of First Instance of
Zamboanga City, Br. I, 70 SCRA 590, 595). Considering the foregoing, we sustain the dismissal by the trial court of the petitioner’s complaint
for failure to prosecute for a period of more than one year (from the time of filing thereof on 15
June 1997 until Teresa’s filing of a motion to dismiss).
"It is true that the allowance or denial of petitions for postponement and the setting aside of
orders previously issued, rest principally upon the sound discretion of the judge to whom they
are addressed, but always predicated on the consideration that more than the mere convenience WHEREFORE, premises considered, the instant petition is DENIED for lack of merit and the
of the courts or of the parties of the case, the ends of justice and fairness would be served assailed Decision dated 6 May 2005 of the Court of Appeals in CA-G.R. CV No. 71028 is hereby
thereby (Camara Vda. de Zubiri v. Zubiri, et al., L-16745, December 17, 1966). When no AFFIRMED. Costs against petitioner.
substantial rights are affected and the intention to delay is not manifest, the corresponding
motion to transfer the hearing having been filed accordingly, it is sound judicial discretion to
allow them (Rexwell Corp. v. Canlas, L-16746, December 30, 1961)." x x x. SO ORDERED.

G.R. No. 159586 July 26, 2004

This Court recalls that the complaint herein was filed on 15 June 1999. The summonses for
Cynthia and Teresa were served on their sister Melinda at the Borja Family Clinic in Tagbilaran
City, but the latter refused to receive the same. It was only on 1 June 2000 that summons was EUROPEAN RESOURCES AND TECHNOLOGIES, INC. and DELFIN J.
served on Teresa at Room 304, Regency Crest Condominium, Banilad, Cebu City, when she WENCESLAO, petitioners,
was in the Philippines for a visit. However, the summons for Cynthia was never served upon vs.
her.1âwphi1 INGENIEUBURO BIRKHAHN + NOLTE, Ingeniurgesellschaft mbh and HEERS &
BROCKSTEDT GMBH & CO., respondents.
Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the duty to serve
summons, this does not relieve the petitioner of her own duty as the plaintiff in a civil case to
prosecute the case diligently. If the clerk had been negligent, it was petitioner’s duty to call the
court’s attention to that fact. It must be noted that it was not even petitioner who called the
court’s attention that summons had not been served on Cynthia, but Teresa. This despite the
fact that petitioner was aware, as early as 15 June 1999, when she filed her complaint, that the DECISION
summonses could not be served on Teresa and Cynthia, as she admitted therein that Teresa
and Cynthia were residing abroad. Petitioner as plaintiff should have asked that Cynthia and
Teresa be summoned by publication at the earliest possible time. She cannot idly sit by and wait
till this is done. She cannot afterwards wash her hands and say that the delay was not her fault.
She cannot simply "fold [her] hands" and say that it is the duty of the clerk of court to have the
summonses served on Cynthia and Teresa for the prompt disposition of her case. If there were YNARES-SANTIAGO, J.:
no means of summoning any of the defendants, petitioner should have so informed the court
within a reasonable period of time, so that the case could be disposed of one way or another Assailed in this Petition for Review under Rule 45 of the Rules of Court is the Decision1 of the
and the administration of justice would not suffer delay. The non-performance of that duty by Court of Appeals dated May 15, 2003, which sustained the Order of the Regional Trial Court of
petitioner as plaintiff is an express ground for dismissing an action. For, indeed, this duty Angeles City, Branch 61, dated June 28, 2001, and its subsequent Resolution dated August 3,
imposed upon her was precisely to spur on the slothful. 2003 denying petitioner’s motion for reconsideration.

For failure to diligently pursue the complaint, petitioner trifled with the right of the respondents to
speedy trial. It also sorely tried the patience of the court and wasted its precious time and
attention. To allow petitioner to wait until such time that summonses were served on
respondents would frustrate the protection against unreasonable delay in the prosecution of
cases and violate the constitutional mandate of speedy dispensation of justice which would in
European Resources and Technologies Inc. (hereinafter "ERTI"), a corporation organized and
existing under the laws of the Republic of the Philippines, is joined by Delfin J. Wenceslao as
petitioner in this case. Ingenieuburo Birkhan + Nolte Ingiurgesellschaft mbh and Heers &
Brockstedt Gmbh & Co. are German corporations who are respondents in this case and shall be
collectively referred to as the "German Consortium".

121 | C o n f l i c t o f L a w s C a s e s
The German Consortium tendered and submitted its bid to the Clark Development Corporation
("CDC") to construct, operate and manage the Integrated Waste Management Center at the
Clark Special Economic Zone ("CSEZ"). CDC accepted the German Consortium’s bid and
awarded the contract to it. On October 6, 1999, CDC and the German Consortium executed the
Contract for Services2 which embodies the terms and conditions of their agreement.
Attached to the letter was a copy of the letter of the CDC, 13 stating that the German Consortium’s
assignment of an eighty-five percent (85%) majority interest to another party violated its
representation to undertake both the financial and technical aspects of the project. The dilution
of the Consortium’s interest in ERTI is a substantial modification of the Consortium’s
representations which were used as bases for the award of the project to it.

The Contract for Services provides that the German Consortium shall be empowered to enter On February 20, 2001, petitioner ERTI, through counsel, sent a letter to CDC requesting for the
into a contract or agreement for the use of the integrated waste management center by reconsideration of its disapproval of the agreement between ERTI and the German Consortium.
corporations, local government units, entities, and persons not only within the CSEZ but also
outside. For waste collected within the CSEZ, the German Consortium may impose a "tipping
Before CDC could act upon petitioner ERTI’s letter, the German Consortium filed a complaint for
fee" per ton of waste collected from locators and residents of the CSEZ, which fees shall be
injunction against herein petitioners before the Regional Trial Court of Angeles City, Branch 61,
subject to the schedule agreed upon by the parties and specified in the Contract for Services.
docketed as Civil Case No. 10049. The German Consortium claimed that petitioner ERTI’s
For its operations outside of the CSEZ, the German Consortium shall pay CDC US$1.50 per ton
continued misrepresentation as to their right to accept solid wastes from third parties for
of non-hazardous solid waste collected.3 The CDC shall guarantee that nineteen thousand
processing at the waste management center will cause irreparable damage to the Consortium
eighteen hundred (19,800) tons per year of solid waste volume shall be collected from inside
and its exclusive right to operate the waste management center at the CSEZ. Moreover,
and outside the CSEZ.4 The contract has a term of twenty-five (25) years,5 during which time the
petitioner ERTI’s acts destroy the Consortium’s credibility and undermine customer confidence
German Consortium shall operate the waste management center on a day-to-day basis.6
in it. Hence, the German Consortium prayed that a writ of temporary restraining order be issued
against petitioner ERTI and, after hearing, a writ of preliminary injunction be likewise issued
Article VIII, Section 7 of the Contract for Services provides that the German Consortium shall ordering petitioner ERTI to cease and desist from misrepresenting to third parties or the public
undertake to organize a local corporation as its representative for this project. On April 18, 2000, that it has any right or interest in the waste management center at CSEZ. 14
the German Consortium entered into a Joint Venture with D.M. Wenceslao and Associates, Inc.
("DMWAI") and Ma. Elena B. Villarama (doing business as LBV and Associates), embodied in a
Petitioners filed their Opposition to the application for preliminary injunction on February 7, 2001.
Memorandum of Understanding7 ("MOU") signed by the parties. Under the MOU, the parties
The following day, February 8, 2001, petitioners sent respondents, through Mr. Holger Holst, a
agreed to jointly form a local corporation to which the German Consortium shall assign its rights
letter demanding that the parties proceed to arbitration in accordance with Section 17 of the
under the Contract for Services. Pursuant to this agreement, petitioner European Resources and
MOA. At the hearings on the application for injunction, petitioners objected to the presentation of
Technologies, Inc. was incorporated. The parties likewise agreed to prepare and finalize a
evidence on the ground that the trial court had no jurisdiction over the case since the German
Shareholders’ Agreement within one (1) month from the execution of the MOU, which shall
Consortium was composed of foreign corporations doing business in the country without a
provide that the German Consortium shall own fifteen percent (15%) of the equity in the joint
license. Moreover, the MOA between the parties provides that the dispute should be referred to
venture corporation, DMWAI shall own seventy percent (70%) and LBV&A shall own fifteen
arbitration.
percent (15%). In the event that the parties fail to execute the Shareholders’ Agreement, the
MOU shall be considered null and void.8
The trial court overruled the objection and proceeded with the hearing. On June 28, 2001, the
trial court issued an Order granting the writ of preliminary injunction.15 Petitioners filed a motion
On August 1, 2000, without the Shareholders’ Agreement having been executed, the German
for reconsideration, which was denied in a Resolution dated November 21, 2001.
Consortium and petitioner ERTI entered into a Memorandum of Agreement (MOA)9 whereby the
German Consortium ceded its rights and obligations under the Contract for Services in favor of
ERTI and assigned unto ERTI, among others, "its license from CDC to engage in the business On January 17, 2002, petitioners filed a petition for certiorari and prohibition under Rule 65 of the
of providing environmental services needed in the CSEZ in connection with the waste Rules of Court before the Court of Appeals, assailing the trial court’s Orders dated June 28,
management within the CSEZ and other areas."10 Likewise, the parties agreed that should there 2001 and November 21, 2001.
be a disagreement between or among them relative to the interpretation or implementation of the
MOA and the collateral documents including but not limited to the Contract for Services between
the German Consortium and CDC, the dispute shall be referred to a panel of arbitrators. 11 Meanwhile, on February 11, 2002, the temporary restraining order issued was lifted in view of
respondents’ failure to file sufficient bond.16 On September 6, 2002, all proceedings in Civil Case
No. 10049 were suspended until the petition for certiorari pending before the Court of Appeals
On December 11, 2000, ERTI received a letter from BN Consultants Philippines, Inc., signed by shall have been resolved.17
Mr. Holger Holst for and on behalf of the German Consortium, 12 stating that the German
Consortium’s contract with DMWAI, LBV&A and ERTI has been terminated or extinguished on
On May 15, 2003, the Court of Appeals dismissed the petition for certiorari. Petitioners’ Motion
the following grounds: (a) the CDC did not give its approval to the Consortium’s request for the
approval of the assignment or transfer by the German Consortium in favor of ERTI of its rights for Reconsideration was denied in a Resolution dated August 25, 2003.
and interests under the Contract for Services; (b) the parties failed to prepare and finalize the
Shareholders’ Agreement pursuant to the provision of the MOU; (c) there is no more factual or Hence, this petition arguing that the Court of Appeals committed reversible error in:
legal basis for the joint venture to continue; and (d) with the termination of the MOU, the MOA is
also deemed terminated or extinguished.

122 | C o n f l i c t o f L a w s C a s e s
 (a) Ruling that petitioners are estopped from assailing the capacity of the respondents
to institute the suit for injunction
(b) Ruling that respondents are entitled to an injunctive writ.
(c) Not holding that the dispute is covered by the arbitration clause in the
memorandum of agreement.
(d) Issuing the writ of preliminary injunction that is tantamount to a decision of the case
on the merits.18
The petition is partly meritorious.
There is no general rule or governing principle laid down as to what constitutes "doing" or
"engaging in" or "transacting" business in the Philippines. Thus, it has often been held that a
single act or transaction may be considered as "doing business" when a corporation performs
acts for which it was created or exercises some of the functions for which it was organized. 19 We
have held that the act of participating in a bidding process constitutes "doing business" because
it shows the foreign corporation’s intention to engage in business in the Philippines. In this
regard, it is the performance by a foreign corporation of the acts for which it was created,
regardless of volume of business, that determines whether a foreign corporation needs a license
or not.20
Consequently, the German Consortium is doing business in the Philippines without the
appropriate license as required by our laws. By participating in the bidding conducted by the
CDC for the operation of the waste management center, the German Consortium exhibited its
intent to transact business in the Philippines. Although the Contract for Services provided for the
establishment of a local corporation to serve as respondents’ representative, it is clear from the
other provisions of the Contract for Services as well as the letter by the CDC containing the
disapproval that it will be the German Consortium which shall manage and conduct the
operations of the waste management center for at least twenty-five years. Moreover, the
German Consortium was allowed to transact with other entities outside the CSEZ for solid waste
collection. Thus, it is clear that the local corporation to be established will merely act as a conduit
or extension of the German Consortium.
As a general rule, unlicensed foreign non-resident corporations cannot file suits in the
Philippines. Section 133 of the Corporation Code specifically provides:
SECTION 133. No foreign corporation transacting business in the Philippines without
a license, or its successors or assigns, shall be permitted to maintain or intervene in
any action, suit or proceeding in any court or administrative agency of the Philippines,
but such corporation may be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under Philippine laws.
A corporation has legal status only within the state or territory in which it was organized. For this
reason, a corporation organized in another country has no personality to file suits in the
Philippines. In order to subject a foreign corporation doing business in the country to the
jurisdiction of our courts, it must acquire a license from the Securities and Exchange
123 | C o n f l i c t o f L a w s C a s e s
Commission (SEC) and appoint an agent for service of process. Without such license, it cannot
institute a suit in the Philippines.21
However, there are exceptions to this rule. In a number of cases, 22 we have declared a party
estopped from challenging or questioning the capacity of an unlicensed foreign corporation from
initiating a suit in our courts. In the case of Communication Materials and Design, Inc. v. Court of
Appeals,23 a foreign corporation instituted an action before our courts seeking to enjoin a local
corporation, with whom it had a "Representative Agreement", from using its corporate name,
letter heads, envelopes, sign boards and business dealings as well as the foreign corporation’s
trademark. The case arose when the foreign corporation discovered that the local corporation
has violated certain contractual commitments as stipulated in their agreement. In said case, we
held that a foreign corporation doing business in the Philippines without license may sue in
Philippine Courts a Philippine citizen or entity that had contracted with and benefited from it.
Hence, the party is estopped from questioning the capacity of a foreign corporation to institute
an action in our courts where it had obtained benefits from its dealings with such foreign
corporation and thereafter committed a breach of or sought to renege on its obligations. The rule
relating to estoppel is deeply rooted in the axiom of commodum ex injuria sua non habere
debet—no person ought to derive any advantage from his own wrong.
In the case at bar, petitioners have clearly not received any benefit from its transactions with the
German Consortium. In fact, there is no question that petitioners were the ones who have
expended a considerable amount of money and effort preparatory to the implementation of the
MOA. Neither do petitioners seek to back out from their obligations under both the MOU and the
MOA by challenging respondents’ capacity to sue. The reverse could not be any more accurate.
Petitioners are insisting on the full validity and implementation of their agreements with the
German Consortium.
To rule that the German Consortium has the capacity to institute an action against petitioners
even when the latter have not committed any breach of its obligation would be tantamount to an
unlicensed foreign corporation gaining access to our courts for protection and redress. We
cannot allow this without violating the very rationale for the law prohibiting a foreign corporation
not licensed to do business in the Philippines from suing or maintaining an action in Philippine
courts. The object of requiring a license is not to prevent the foreign corporation from performing
single acts, but to prevent it from acquiring domicile for the purpose of business without taking
the steps necessary to render it amenable to suits in the local courts.24 In other words, the
foreign corporation is merely prevented from being in a position where it takes the good without
accepting the bad.
On the issue of whether the respondents were entitled to the injunctive writ, the petitioners claim
that respondents’ right is not in esse but is rather a future right which is contingent upon a
judicial declaration that the MOA has been validly rescinded. The Court of Appeals, in its
decision, held that the MOA should be deemed subject to a suspensive condition, that is, that
CDC’s prior written consent must be obtained for the validity of the assignment.
This issue must be resolved in a separate proceeding. It must be noted that the hearing
conducted in the trial court was merely a preliminary hearing relating to the issuance of the
injunctive writ. In order to fully appreciate the facts of this case and the surrounding
circumstances relating to the agreements and contract involved, further proof should be
presented for consideration of the court. Likewise, corollary matters, such as whether either of
the parties is liable for damages and to what extent, cannot be resolved with absolute certainty,
thus rendering any decision we might make incomplete as to fully dispose of this case.
More importantly, it is evident that CDC must be made a proper party in any case which seeks to
resolve the effectivity or ineffectivity of its disapproval of the assignment made between
petitioners and respondent German Consortium. Where, as in the instant case, CDC is not
impleaded as a party, any decision of the court which will inevitably affect or involve CDC cannot
be deemed binding on it.
For the same reason, petitioners’ assertion that the instant case should be referred to arbitration
pursuant to the provision of the MOA is untenable.
We have ruled in several cases that arbitration agreements are valid, binding, enforceable and
not contrary to public policy such that when there obtains a written provision for arbitration which
is not complied with, the trial court should suspend the proceedings and order the parties to
proceed to arbitration in accordance with the terms of their agreement. 25 In the case at bar, the
MOA between petitioner ERTI and respondent German Consortium provided:
The Court of Appeals ruled that since petitioners did not raise this issue during the hearing on
the application for preliminary injunction before the trial court, the same cannot be raised for the
first time on appeal and even in special civil actions for certiorari as in this case.
At the outset, it must be noted that with the finding that the German Consortium is without any
personality to file the petition with the trial court, the propriety of the injunction writ issued is
already moot and academic. Even assuming for the sake of argument that respondents have the
capacity to file the petition, we find merit in the issue raised by petitioners against the injunction
writ issued.
Before an injunctive writ can be issued, it is essential that the following requisites are present:
(1) there must be a right in esse or the existence of a right to be protected; and (2) the act
against which injunction to be directed is a violation of such right.29 The onus probandi is on
movant to show that there exists a right to be protected, which is directly threatened by the act
sought to be enjoined. Further, there must be a showing that the invasion of the right is material
and substantial and that there is an urgent and paramount necessity for the writ to prevent a
serious damage.30

Thus, it is clear that for the issuance of the writ of preliminary injunction to be proper, it must be
17. Should there be a disagreement between or among the Parties relative to the
shown that the invasion of the right sought to be protected is material and substantial, that the
interpretation or implementation of this Agreement and the collateral documents
right of complainant is clear and unmistakable and that there is an urgent and paramount
including but not limited to the Contract for Services between GERMAN
necessity for the writ to prevent serious damage.31 At the time of its application for an injunctive
CONSORTIUM and CDC and the Parties cannot resolve the same by themselves, the
writ, respondents’ right to operate and manage the waste management center, to the exclusion
same shall be endorsed to a panel of arbitrators which shall be convened in
of or without any participation by petitioner ERTI, cannot be said to be clear and unmistakable.
accordance with the process ordained under the Arbitration Law of the Republic of the
The MOA executed between respondents and petitioner ERTI has not yet been judicially
Philippines.26
declared as rescinded when the complaint was lodged in court.32 Hence, a cloud of doubt exists
over respondent German Consortium’s exclusive right relating to the waste management center.
Indeed, to brush aside a contractual agreement calling for arbitration in case of disagreement
between parties would be a step backward.27 But there are exceptions to this rule. Even if there
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. 68923 dated May 15,
is an arbitration clause, there are instances when referral to arbitration does not appear to be the
2003 is REVERSED and SET ASIDE. The Orders of the trial court dated June 28, 2001 and
most prudent action. The object of arbitration is to allow the expeditious determination of a
November 21, 2001 are ANNULLED and SET ASIDE and Civil Case No. 10049 is DISMISSED
dispute. Clearly, the issue before us could not be speedily and efficiently resolved in its entirety if
for lack of legal capacity of respondents to institute the action. Costs against respondents.
we allow simultaneous arbitration proceedings and trial, or suspension of trial pending
arbitration.28
SO ORDERED.
As discussed earlier, the dispute between respondent German Consortium and petitioners
involves the disapproval by the CDC of the assignment by the German Consortium of its rights United States Supreme Court
under the Contract for Services to petitioner ERTI. Admittedly, the arbitration clause is contained ERIE R. CO. v. TOMPKINS, (1938)
in the MOA to which only the German Consortium and petitioner ERTI were parties. Even if the
case is brought before an arbitration panel, the decision will not be binding upon CDC who is a No. 367
non-party to the arbitration agreement. What is more, the arbitration panel will not be able to Argued: January 31, 1938 Decided: April 25, 1938
completely dispose of all the issues of this case without including CDC in its proceedings.
Accordingly, the interest of justice would only be served if the trial court hears and adjudicates [304 U.S. 64, 65] Messrs. Theodore Kiendl, Harold W. Bissell, and William C. Cannon, all of
New York City, for petitioner.
the case in a single and complete proceeding.

[304 U.S. 64, 68] Messrs. Fred H. Rees, Alexander L. Strouse, and Bernard G. Nemeroff, all of
Lastly, petitioners question the propriety of the issuance of writ of preliminary injunction claiming New York City (Bernard Kaufman and William Walsh, both of New York City, and Aaron L.
that such is already tantamount to granting the main prayer of respondents’ complaint without Danzig, of Jamaica, L.I., on the brief) for respondent.
the benefit of a trial. Petitioners point out that the purpose of a preliminary injunction is to prevent
threatened or continuous irremediable injury to some of the parties before their claims can be [304 U.S. 64, 69]
thoroughly studied and decided. It cannot be used to railroad the main case and seek a
judgment without a full-blown trial as in the instant case.

124 | C o n f l i c t o f L a w s C a s e s
Mr. Justice BRANDEIS delivered the opinion of the Court.
The question for decision is whether the oft-challenged doctrine of Swift v. Tyson1 shall now be
disapproved.
Tompkins, a citizen of Pennsylvania, was injured on a dark night by a passing freight train of the
Erie Railroad Company while walking along its right of way at Hughestown in that state. He
claimed that the accident occurred through negligence in the operation, or maintenance, of the
train; that he was rightfully on the premises as licensee because on a commonly used beaten
footpath which ran for a short distance alongside the tracks; and that he was struck by
something which looked like a door projecting from one of the moving cars. To enforce that
claim he brought an action in the federal court for Southern New York, which had jurisdiction
because the company is a corporation of that state. It denied liability; and the case was tried by a
jury. [304 U.S. 64, 70] The Erie insisted that its duty to Tompkins was no greater than that
owed to a trespasser. It contended, among other things, that its duty to Tompkins, and hence its
liability, should be determined in accordance with the Pennsylvania law; that under the law of
Pennsylvania, as declared by its highest court, persons who use pathways along the railroad right
of way-that is, a longitudinal pathway as distinguished from a crossing-are to be deemed
trespassers; and that the railroad is not liable for injuries to undiscovered trespassers resulting
from its negligence, unless it be wanton or willful. Tompkins denied that any such rule had been
established by the decisions of the Pennsylvania courts; and contended that, since there was no
statute of the state on the subject, the railroad's duty and liability is to be determined in federal
courts as a matter of general law.
The trial judge refused to rule that the applicable law precluded recovery. The jury brought in a
verdict of $30,000; and the judgment entered thereon was affirmed by the Circuit Court of
Appeals, which held ( 2 Cir., 90 F.2d 603, 604), that it was unnecessary to consider whether the
law of Pennsylvania was as contended, because the question was one not of local, but of general,
law, and that 'upon questions of general law the federal courts are free, in absence of a local
statute, to exercise their independent judgment as to what the law is; and it is well settled that
the question of the responsibility of a railroad for injuries caused by its servants is one of general
law. ... Where the public has made open and notorious use of a railroad right of way for a long
period of time and without objection, the company owes to persons on such permissive pathway
a duty of care in the operation of its trains. ... It is likewise generally recognized law that a jury
may find that negligence exists toward a pedestrian using a permissive path on the railroad right
of way if he is hit by some object projecting from the side of the train.' [304 U.S. 64, 71] The
Erie had contended that application of the Pennsylvania rule was required, among other things,
by section 34 of the Federal Judiciary Act of September 24, 1789, c. 20, 28 U.S.C. 725, 28
U.S.C.A. s 725, which provides: 'The laws of the several States, except where the Constitution,
treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules
of decision in trials at common law, in the courts of the United States, in cases where they apply.'
Because of the importance of the question whether the federal court was free to disregard the
alleged rule of the Pennsylvania common law, we granted certiorari. 302 U.S. 671 , 58 S.Ct. 50,
82 L.Ed. --.
First. Swift v. Tyson, 16 Pet. 1, 18, held that federal courts exercising jurisdiction on the ground
of diversity of citizenship need not, in matters of general jurisprudence, apply the unwritten law
of the state as declared by its highest court; that they are free to exercise an independent
judgment as to what the common law of the state is-or should be; and that, as there stated by Mr.
Justice Story, 'the true interpretation of the 34th section limited its application to state laws,
strictly local, that is to say, to the positive statutes of the state, and the construction thereof
adopted by the local tribunals, and to rights and titles to things having a permanent locality, such
125 | C o n f l i c t o f L a w s C a s e s
as the rights and titles to real estate, and other matters immovable and intra-territorial in their
nature and character. It never has been supposed by us, that the section did apply, or was
designed to apply, to questions of a more general nature, not at all dependent upon local statutes
or local usages of a fixed and permanent operation, as, for example, to the construction of
ordinary contracts or other written instruments, and especially to questions of general
commercial law, where the state tribunals are called upon to perform the like functions as
ourselves, that is, to ascertain, upon general reasoning and legal analogies, what is the true
exposition of the contract or [304 U.S. 64, 72] instrument, or what is the just rule furnished by
the principles of commercial law to govern the case.'
The Court in applying the rule of section 34 to equity cases, in Mason v. United States, 260 U.S.
545, 559 , 43 S.Ct. 200, 204, said: 'The statute, however, is merely declarative of the rule which
would exist in the absence of the statute.' 2 The federal courts assumed, in the broad field of
'general law,' the power to declare rules of decision which Congress was confessedly without
power to enact as statutes. Doubt was repeatedly expressed as to the correctness of the
construction given section 34,3 and as to the soundness of the rule which it introduced. 4 But it
was the more recent research of a competent scholar, who examined the original document,
which established that the construction given to it by the Court was erroneous; and that the
purpose of the section was merely to make certain that, in all matters except those in which some
federal law is controlling, [304 U.S. 64, 73] the federal courts exercising jurisdiction in diversity
of citizenship cases would apply as their rules of decision the law of the state, unwritten as well
as written. 5
Criticism of the doctrine became widespread after the decision of Black & White Taxicab &
Transfer Co. v. Brown & Yellow Taxicab & Transfer Co., 276 U.S. 518 , 48 S.Ct. 404, 57 A.L.R.
426.6 There, Brown &Yellow, a Kentucky corporation owned by Kentuckians, and the Louisville
& Nashville Railroad, also a Kentucky corporation, wished that the former should have the
exclusive privilege of soliciting passenger and baggage transportation at the Bowling Green, Ky.,
Railroad station; and that the Black & White, a competing Kentucky corporation, should be
prevented from interfering with that privilege. Knowing that such a contract would be void under
the common law of Kentucky, it was arranged that the Brown & Yellow reincorporate under the
law of Tennessee, and that the contract with the railroad should be executed there. The suit was
then brought by the Tennessee corporation in the federal court for Western Kentucky to enjoin
competition by the Black & White; an injunction issued by the District Court [304 U.S. 64,
74] was sustained by the Court of Appeals; and this Court, citing many decisions in which the
doctrine of Swift & Tyson had been applied, affirmed the decree.
Second. Experience in applying the doctrine of Swift v. Tyson, had revealed its defects, political
and social; and the benefits expected to flow from the rule did not accrue. Persistence of state
courts in their own opinions on questions of common law prevented uniformity;7 and the
impossibility of discovering a satisfactory line of demarcation between the province of general
law and that of local law developed a new well of uncertainties. 8
On the other hand, the mischievous results of the doctrine had become apparent. Diversity of
citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state
courts against those not citizens of the state. Swift v. Tyson introduced grave discrimination by
noncitizens against citizens. It made rights enjoyed under the unwritten 'general law' vary
according to whether enforcement was sought in the state[304 U.S. 64, 75] or in the federal
court; and the privilege of selecting the court in which the right should be determined was
conferred upon the noncitizen. 9 Thus, the doctrine rendered impossible equal protection of the
law. In attempting to promote uniformity of law throughout the United States, the doctrine had
prevented uniformity in the administration of the law of the state.
The discrimination resulting became in practice far-reaching. This resulted in part from the
broad province accorded to the so-called 'general law' as to which federal courts exercised an
independent judgment. 10 In addition to questions of purely commercial law, 'general law' was
held to include the obligations under contracts entered into and to be performed within the state,
11 the extent to which a carrier operating within a state may stipulate for exemption from
liability for his own negligence or that of his employee;12 the liability for torts committed within
the state upon persons resident or property located there, even where the question of lia- [304
U.S. 64, 76] bility depended upon the scope of a property right conferred by the state; 13 and
the right to exemplary or punitive damages. 14 Furthermore, state decisions construing local
deeds,15 mineral conveyances,16 and even devises of real estate, 17 were disregarded. 18
In part the discrimination resulted from the wide range of persons held entitled to avail
themselves of the federal rule by resort to the diversity of citizenship jurisdiction. Through this
jurisdiction individual citizens willing to remove from their own state and become citizens of
another might avail themselves of the federal rule. 19 And, without even change of residence, a
corporate citizen of [304 U.S. 64, 77] the state could avail itself of the federal rule by
reincorporating under the laws of another state, as was done in the Taxicab Case.
The injustice and confusion incident to the doctrine of Swift v. Tyson have been repeatedly urged
as reasons for abolishing or limiting diversity of citizenship jurisdiction. 20 Other legislative
relief has been proposed. 21 If only a question of statutory construction were involved, we should
not be prepared to abandon a doctrine so widely applied throughout nearly a century. 22 But the
uncon- [304 U.S. 64, 78] stitutionality of the course pursued has now been made clear, and
compels us to do so.
Third. Except in matters governed by the Federal Constitution or by acts of Congress, the law to
be applied in any case is the law of the state. And whether the law of the state shall be declared
by its Legislature in a statute or by its highest court in a decision is not a matter of federal
concern. There is no federal general common law. Congress has no power to declare substantive
rules of common law applicable in a state whether they be local in their nature or 'general,' be
they commercial law or a part of the law of torts. And no clause in the Constitution purports to
confer such a power upon the federal courts. As stated by Mr. Justice Field when protesting in
Baltimore & Ohio R.R. Co. v. Baugh, 149 U.S. 368, 401 , 13 S.Ct. 914, 927, against ignoring the
Ohio common law of fellow-servant liability: I am aware that what has been termed the general
law of the country-which is often little less than what the judge advancing the doctrine thinks at
the time should be the general law on a particular subject-has been often advanced in judicial
opinions of this court to control a conflicting law of a state. I admit that learned judges have
fallen into the habit of repeating this doctrine as a convenient mode of brushing aside the law of
a state in conflict with their views. And I confess that, moved and governed by the authority of
the great names of those judges, I have, myself, in many instances, unhesitatingly and
confidently, but I think now erroneously, repeated the same doctrine. But, notwithstanding the
great names which may be cited in favor of the doctrine, and notwithstanding the frequency with
which the doctrine has been reiterated, there stands, as a perpetual protest against its repetition,
the constitution of the United States, which recognizes and preserves the autonomy and
independence of the states,- independence in their legislative and inde- [304 U.S. 64,
79] pendence in their judicial departments. Supervision over either the legislative or the judicial
action of the states is in no case permissible except as to matters by the constitution specifically
authorized or delegated to the United States. Any interference with either, except as thus
permitted, is an invasion of the authority of the state, and, to that extent, a denial of its
independence.'
The fallacy underlying the rule declared in Swift v. Tyson is made clear by Mr. Justice
Holmes. 23 The doctrine rests upon the assumption that there is 'a transcendental body of law
126 | C o n f l i c t o f L a w s C a s e s
outside of any particular State but obligatory within it unless and until changed by statute,' that
federal courts have the power to use their judgment as to what the rules of common law are; and
that in the federal courts 'the parties are entitled to an independent judgment on matters of
general law':
'But law in the sense in which courts speak of it today does not exist without some definite
authority behind it. The common law so far as it is enforced in a State, whether called common
law or not, is not the common law generally but the law of that State existing by the authority of
that State without regard to what it may have been in England or anywhere else. ...
'The authority and only authority is the State, and if that be so, the voice adopted by the State as
its own (whether it be of its Legislature or of its Supreme Court) should utter the last word.'
Thus the doctrine of Swift v. Tyson is, as Mr. Justice Holmes said, 'an unconstitutional
assumption of powers by the Courts of the United States which no lapse of time or respectable
array of opinion should make us hesitate to correct.' In disapproving that doctrine we do not
hold [304 U.S. 64, 80] unconstitutional section 34 of the Federal Judiciary Act of 1789 or any
other act of Congress. We merely declare that in applying the doctrine this Court and the lower
courts have invaded rights which in our opinion are reserved by the Constitution to the several
states.
Fourth. The defendant contended that by the common law of Pennsylvania as declared by its
highest court in Falchetti v. Pennsylvania R. Co., 307 Pa. 203, 160 A. 859, the only duty owed to
the plaintiff was to refrain from willful or wanton injury. The plaintiff denied that such is the
Pennsylvania law. 24 In support of their respective contentions the parties discussed and cited
many decisions of the Supreme Court of the state. The Circuit Court of Appeals ruled that the
question of liability is one of general law; and on that ground declined to decide the issue of state
law. As we hold this was error, the judgment is reversed and the case remanded to it for further
proceedings in conformity with our opinion.
REVERSED.
Mr. Justice CARDOZO took no part in the consideration or decision of this case.
Mr. Justice BUTLER (dissenting).
The case presented by the evidence is a simple one. Plaintiff was severely injured in
Pennsylvania. While walking on defendant's right of way along a much-used path at the end of
the cross-ties of its main track, he came into collision with an open door swinging from the side
of a car in a train going in the opposite direction. Having been warned by whistle and headlight,
he saw the locomo- [304 U.S. 64, 81] tive approaching and had time and space enough to step
aside and so avoid danger. To justify his failure to get out of the way, he says that upon many
other occasions he had safely walked there while trains passed.
Invoking jurisdiction on the ground of diversity of citizenship, plaintiff, a citizen and resident of
Pennsylvania, brought this suit to recover damages against defendant, a New York corporation,
in the federal court for the Southern District of that state. The issues were whether negligence of
defendant was a proximate cause of his injuries, and whether negligence of plaintiff contributed.
He claimed that, by hauling the car with the open door, defendant violated a duty to him. The
defendant insisted that it violated no duty, and that plaintiff's injuries were caused by his own
negligence. The jury gave him a verdict on which the trial court entered judgment; the Circuit
Court of Appeals affirmed. 2 Cir ., 90 F.2d 603.
Defendant maintained, citing Falchetti v. Pennsylvania R. Co., 307 Pa. 203, 160 A. 859, and
Koontz v. Baltimore & O.R. Co., 309 Pa. 122, 163 A. 212, that the only duty owed plaintiff was to
refrain from willfully or wantonly injuring him; it argued that the courts of Pennsylvania had so
ruled with respect to persons using a customary longitudinal path, as distinguished from one
crossing the track. The plaintiff insisted that the Pennsylvania decisions did not establish the
rule for which the defendant contended. Upon that issue the Circuit Court of Appeals said (90
F.2d 603, et page 604): 'We need not go into this matter since the defendant concedes that the
great weight of authority in other states is to the contrary. This concession is fatal to its
contention, for upon questions of general law the federal courts are free, in absence of a local
statute, to exercise their independent judgment as to what the law is; and it is well settled that
the question of the responsibility of a railroad for injuries caused by its servants is one of general
law.' [304 U.S. 64, 82] Upon that basis the court held the evidence sufficient to sustain a finding
that plaintiff's injuries were caused by the negligence of defendant. It also held the question of
contributory negligence one for the jury.
Defendant's petition for writ of certiorari presented two questions: Whether its duty toward
plaintiff should have been determined in accordance with the law as found by the highest court
of Pennsylvania, and whether the evidence conclusively showed plaintiff guilty of contributory
negligence. Plaintiff contends that, as always heretofore held by this Court, the issues of
negligence and contributory negligence are to be determined by general law against which local
decisions may not be held conclusive; that defendant relies on a solitary Pennsylvania case of
doubtful applicability, and that, even if the decisions of the courts of that state were deemed
controlling, the same result would have to be reached.
No constitutional question was suggested or argued below or here. And as a general rule, this
Court will not consider any question not raised below and presented by the petition. Olson v.
United States, 292 U.S. 246, 262 , 54 S.Ct. 704, 711; Johnson v. Manhattan Ry. Co., 289 U.S. 479,
494 , 53 S.Ct. 721, 726; Gunning v. Cooley,281 U.S. 90, 98 , 50 S.Ct. 231, 234. Here it does not
decide either of the questions presented, but, changing the rule of decision in force since the
foundation of the government, remands the case to be adjudged according to a standard never
before deemed permissible.
The opinion just announced states that: 'The question for decision is whether the oft-challenged
doctrine of Swift v. Tyson (1842, 16 Pet. 1) shall now be disapproved.'
That case involved the construction of the Judiciary Act of 1789, 34, 28 U.S.C.A. 725: 'The laws of
the several States, except where the Constitution, treaties, or statutes of the United States
otherwise require or provide, shall be regarded as rules of decision in trials at common law, in
the courts of [304 U.S. 64, 83] the United States, in cases where they apply.' Expressing the
view of all the members of the Court, Mr. Justice Story said (16 Pet. 1, at page 18): 'In the
ordinary use of language, it will hardly be contended, that the decisions of courts constitute laws.
They are, at most, only evidence of what the laws are, and are not, of themselves, laws. They are
often reexamined, reversed, and qualified by courts themselves, whenever they are found to be
either defective, or illfounded, or otherwise incorrect. The laws of a state are more usually
understood to mean the rules and enactments promulgated by the legislative authority thereof,
or long-established local customs having the force of laws. In all the various cases, which have
hitherto come before us for decision, this court have uniformly supposed, that the true
interpretation of the 34th section limited its application to state laws strictly local, that is to say,
to the positive statutes of the state, and the construction thereof adopted by the local tribunals,
and to rights and titles to things having a permanent locality, such as the rights and titles to real
estate, and other matters immovable and intraterritorial in their nature and character. It never
has been supposed by us, that the section did apply, or was designed to apply, to questions of a
more general nature, not at all dependent upon local statutes or local usages of a fixed and
127 | C o n f l i c t o f L a w s C a s e s
permanent operation, as, for example, to the construction of ordinary contracts or other written
instruments, and especially to questions of general commercial law, where the state tribunals are
called upon to perform the like functions as ourselves, that is, to ascertain, upon general
reasoning and legal analogies, what is the true exposition of the contract or instrument, or what
is the just rule furnished by the principles of commercial law to govern the case. And we have not
now the slightest difficulty in holding, that this section, upon its true intendment and
construction, is strictly limited to local statutes and local usages of the character [304 U.S. 64,
84] before stated, and does not extend to contracts and other instruments of a commercial
nature, the true interpretation and effect whereof are to be sought, not in the decisions of the
local tribunals, but in the general principles and doctrines of commercial jurisprudence.
Undoubtedly, the decisions of the local tribunals upon such subjects are entitled to, and will
receive, the most deliberate attention and respect of this court; but they cannot furnish positive
rules or conclusive authority, by which our own judgments are to be bound up and governed.'
(Italics added.)
The doctrine of that case has been followed by this Court in an unbroken line of decisions. So far
as appears, it was not questioned until more than 50 years later, and then by a single
judge. 1 Baltimore & O. Railroad Co. v. Baugh, 149 U.S. 368, 390 , 13 S.Ct. 914. In that case, Mr.
Justice Brewer, speaking for the Court, truly said (149 U.S. 368 , at page 373, 13 S.Ct. 914, 916):
'Whatever differences of opinion may have been expressed have not been on the question
whether a matter of general law should be settled by the independent judgment of this court,
rather than through an adherence to the decisions of the state courts, but upon the other
question, whether a given matter is one of local or of general law.'
And since that decision, the division of opinion in this Court has been of the same character as it
was before. In 1910, Mr. Justice Holmes, speaking for himself and two other Justices, dissented
from the holding that a [304 U.S. 64, 85] court of the United States was bound to exercise its
own independent judgment in the construction of a conveyance made before the state courts had
rendered an authoritative decision as to its meaning and effect. Kuhn v. Fairmont Coal Co., 215
U.S. 349 , 30 S.Ct. 140. But that dissent accepted ( 215 U.S. 349 , at page 371, 30 S.Ct. 140) as
'settled' the doctrine of Swift v. Tyson, and insisted ( 215 U.S. 349 , at page 372, 30 S.Ct. 140)
merely that the case under consideration was by nature and necessity peculiarly local.
Thereafter, as before, the doctrine was constantly applied. 2 In Black & White Taxicab Co. v.
Brown & Yellow Taxicab Co., 276 U.S. 518 , 48 S.Ct. 404, 57 A.L.R. 426, three judges dissented.
The writer of the dissent, Mr. Justice Holmes said, however ( 276 U.S. 518 , at page 535, 48 S.Ct.
404, 409, 57 A.L.R. 426): 'I should leave Swift v. Tyson undisturbed, as I indicated in Kuhn v.
Fairmont Coal Co., but I would not allow it to spread the assumed dominion into new fields.'
No more unqualified application of the doctrine can be found than in decisions of this Court
speaking through Mr. Justice Holmes. United Zinc Co. v. Britt, 258 U.S. 268 , 42 S.Ct. 299, 36
A.L.R. 28; Baltimore & O.R.R. Co. v. Goodman, 275 U.S. 66, 70 , 48 S.Ct. 24, 25, 56 A.L.R. 645.
Without in the slightest departing from that doctrine, but implicitly applying it, the strictness of
the rule laid down in the Goodman Case was somewhat ameliorated by Pokora v. Wabash Ry.
Co., 292 U.S. 98 , 54 S.Ct. 580, 91 A.L.R. 1049
Whenever possible, consistently with standards sustained by reason and authority constituting
the general law, this Court has followed applicable decisions of state courts. Mutual Life Co. v.
Johnson, 293 U.S. 335, 339 , 55 S.Ct. 154, 156. See Burgess v. Seligman, 107 U.S. 20 , 34 2 S.Ct.
10; Black & White Taxicab Co. v. Brown & Yellow Taxicab Co., supra, 276 U.S. 518 , at page 530,
48 S.Ct. 404, 407, 57 A.L.R. 426. Unquestionably, the determination of the issues of negligence
and contributory negligence upon which decision of this case [304 U.S. 64, 86] depends are
questions of general law. Hough v. Texas Railway Co., 100 U.S. 213 , 226; Lake Shore Railway
Co. v. Prentice, 147 U.S. 101 , 13 S.Ct. 261; Baltimore & O. Railroad Co. v. Baugh, supra; Gardner
v. Michigan Central Railroad Co., 150 U.S. 349, 358 , 14 S.Ct. 140; Central Vermont Ry. Co. v.
White, 238 U.S. 507, 512 , 35 S. Ct. 865, Ann.Cas.1916B, 252; Baltimore & O.R.R. Co. v.
Goodman, supra; Pokora v. Wabash Ry. Co., supra.
While amendments to section 34 have from time to time been suggested, the section stands as
originally enacted. Evidently Congress has intended throughout the years that the rule of
decision as construed should continue to govern federal courts in trials at common law. The
opinion just announced suggests that Mr. Warren's research has established that from the
beginning this Court has erroneously construed section 34. But that author's 'New Light on the
History of the Federal Judiciary Act of 1789' does not purport to be authoritative, and was
intended to be no more than suggestive. The weight to be given to his discovery has never been
discussed at this bar. Nor does the opinion indicate the ground disclosed by the research. In his
dissenting opinion in the Taxicab Case, Mr. Justice Holmes referred to Mr. Warren's work, but
failed to persuade the Court that 'laws' as used in section 34 included varying and possibly ill-
considered rulings by the courts of a state on questions of common law. See, e.g., Swift v. Tyson,
supra, 16 Pet. 1, 16, 17. It well may be that, if the Court should now call for argument of counsel
on the basis of Mr. Warren's research, it would adhere to the construction it has always put upon
section 34. Indeed, the opinion in this case so indicates. For it declares: 'If only a question of
statutory construction were involved, we should not be prepared to abandon a doctrine so widely
applied throughout nearly a century. But the unconstitutionality of the course pursued has now
been made clear and compels us to do so.' This means that, so far as concerns the rule of decision
now condemned, the Judiciary Act of 1789, passed to establish judicial [304 U.S. 64, 87] courts
to exert the judicial power of the United States, and especially section 34 of that act as construed,
is unconstitutional; that federal courts are now bound to follow decisions of the courts of the
state in which the controversies arise; and that Congress is powerless otherwise to ordain. It is
hard to foresee the consequences of the radical change so made. Our opinion in the Taxicab Case
cites numerous decisions of this Court which serve in part to indicate the field from which it is
now intended forever to bar the federal courts. It extends to all matters of contracts and torts not
positively governed by state enactments. Counsel searching for precedent and reasoning to
disclose common-law principles on which to guide clients and conduct litigation are by this
decision told that as to all of these questions the decisions of this Court and other federal courts
are no longer anywhere authoritative.
This Court has often emphasized its reluctance to consider constitutional questions and that
legislation will not be held invalid as repugnant to the fundamental law if the case may be
decided upon any other ground. In view of grave consequences liable to result from erroneous
exertion of its power to set aside legislation, the Court should move cautiously, seek assistance of
counsel, act only after ample deliberation, show that the question is before the Court, that its
decision cannot be avoided by construction of the statute assailed or otherwise, indicate precisely
the principle or provision of the Constitutional held to have been transgressed, and fully disclose
the reasons and authorities found to warrant the conclusion of invalidity. These safeguards
against the improvident use of the great power to invalidate legislation are so well- grounded and
familiar that statement of reasons or citation of authority to support them is no longer necessary.
But see, e.g., Charles River Bridge v. Warren Bridge, 11 Pet. 420, 553; Township of Pine Grove v.
Talcott, 19 Wall. 666, 673; Chicago, etc., Railway Co. v. Wellman, 143 U.S. 339, 345 , 12 S.Ct.
400; [304 U.S. 64, 88] Baker v. Grice, 169 U.S. 284, 292 , 18 S.Ct. 323; Martin v. District of
Columbia, 205 U.S. 135, 140 , 27 S.Ct. 440.
So far as appears, no litigant has ever challenged the power of Congress to establish the rule as
construed. It has so long endured that its destruction now without appropriate deliberation
cannot be justified. There is nothing in the opinion to suggest that consideration of any
constitutional question is necessary to a decision of the case. By way of reasoning, it contains
nothing that requires the conclusion reached. Admittedly, there is no authority to support that
128 | C o n f l i c t o f L a w s C a s e s
conclusion. Against the protest of those joining in this opinion, the Court declines to assign the
case for reargument. It may not justly be assumed that the labor and argument of counsel for the
parties would not disclose the right conclusion and aid the Court in the statement of reasons to
support it. Indeed, it would have been appropriate to give Congress opportunity to be heard
before devesting it of power to prescribe rules of decision to be followed in the courts of the
United States. See Myers v. United States, 272 U.S. 52, 176 , 47 S.Ct. 21, 45.
The course pursued by the Court in this case is repugnant to the Act of Congress of August 24,
1937, 50 Stat. 751, 28 U.S.C.A. 17 and note, 349a, 380a and note, 401. It declares that: 'Whenever
the constitutionality of any Act of Congress affecting the public interest is drawn in question in
any court of the United States in any suit or proceeding to which the United States, or any agency
thereof, or any officer or employee thereof, as such officer or employee, is not a party, the court
having jurisdiction of the suit or proceeding shall certify such fact to the Attorney General. In
any such case the court shall permit the United States to intervene and become a party for
presentation of evidence ( if evidence is otherwise receivable in such suit or proceeding) and
argument upon the question of the constitutionality of such Act. In any such suit or proceeding
the United States shall, subject to the applicable provisions of law, have all the rights of a [304
U.S. 64, 89] party and the liabilities of a party as to court costs to the extent necessary for a
proper presentation of the facts and law relating to the constitutionality of such Act.' Section 1,
28 U.S.C.A. 401. That provision extends to this Court. Section 5, 28 U.S.C.A. 380a note. If
defendant had applied for and obtained the writ of certiorari upon the claim that, as now held,
Congress has no power to prescribe the rule of decision, section 34 as construed, it would have
been the duty of this Court to issue the prescribed certificate to the Attorney General in order
that the United States might intervene and be heard on the constitutional question. Within the
purpose of the statute and its true intent and meaning, the constitutionality of that measure has
been 'drawn in question.' Congress intended to give the United States the right to be heard in
every case involving constitutionality of an act affecting the public interest. In view of the rule
that, in the absence of challenge of constitutionality, statutes will not here be invalidated on that
ground, the Act of August 24, 1937 extends to cases where constitutionality is first 'drawn in
question' by the Court. No extraordinary or unusual action by the Court after submission of the
cause should be permitted to frustrate the wholesome purpose of that act. The duty it imposes
ought here to be willingly assumed. If it were doubtful whether this case is within the scope of
the act, the Court should give the United States opportunity to intervene and, if so advised, to
present argument on the constitutional question, for undoubtedly it is one of great public
importance. That would be to construe the act according to its meaning.
The Court's opinion in its first sentence defines the question to be whether the doctrine of Swift
v. Tyson shall now be disapproved; it recites (third page, 58 S.Ct. 819) that Congress is without
power to prescribe rules of decision that have been followed by federal courts as a result of the
construction of section 34 in Swift v. Tyson and since; after discussion, it declares (seventh page,
58 S.Ct. 822) that 'the unconstitutionality of the course pursued (meaning the rule of
decision [304 U.S. 64, 90] resulting from that construction) ... compels' abandonment of the
doctrine so long applied; and then near the end of the last page, 58 S.Ct. 823, the Court states
that it does not hold section 34 unconstitutional, but merely that, in applying the doctrine of
Swift v. Tyson construing it, this Court and the lower courts have invaded rights which are
reserved by the Constitution to the several states. But, plainly through the form of words
employed, the substance of the decision appears; it strikes down as unconstitutional section 34
as construed by our decisions; it divests the Congress of power to prescribe rules to be followed
by federal courts when deciding questions of general law. In that broad field it compels this and
the lower federal courts to follow decisions of the courts of a particular state.
I am of opinion that the constitutional validity of the rule need not be considered, because under
the law, as found by the courts of Pennsylvania and generally throughout the country, it is plain
that the evidence required a finding that plaintiff was guilty of negligence that contributed to
cause his injuries, and that the judgment below should be reversed upon that ground.
Mr. Justice McREYNOLDS, concurs in this opinion.
Mr. Justice REED (concurring in part).
I concur in the conclusion reached in this case, in the disapproval of the doctrine of Swift v.
Tyson, and in the reasoning of the majority opinion, except in so far as it relies upon the
unconstitutionality of the 'course pursued' by the federal courts.
The 'doctrine of Swift v. Tyson,' as I understand it, is that the words 'the laws,' as used in section
34, line 1, of the Federal Judiciary Act of September 24, 1789, 28 U.S.C.A. 725, do not included in
their meaning 'the decisions of the local tribunals.' Mr. Justice Story, in deciding that point, said,
16 Pet. 1, 19: [304 U.S. 64, 91] 'Undoubtedly, the decisions of the local tribunals upon such
subjects are entitled to, and will receive, the most deliberate attention and respect of this court;
but they cannot furnish positive rules, or conclusive authority, by which our own judgments are
to be bound up and governed.'
To decide the case now before us and to 'disapprove' the doctrine of Swift v. Tyson requires only
that we say that the words 'the laws' include in their meaning the decisions of the local tribunals.
As the majority opinion shows, by its reference to Mr. Warren's researches and the first
quotation from Mr. Justice Holmes, that this Court is now of the view that 'laws' includes
'decisions,' it is unnecessary to go further and declare that the 'course pursued' was
'unconstitutional,' instead of merely erroneous.
The 'unconstitutional' course referred to in the majority opinion is apparently the ruling in Swift
v. Tyson that the supposed omission of Congress to legislate as to the effect of decisions leaves
federal courts free to interpret general law for themselves. I am not at all sure whether, in the
absence of federal statutory direction, federal courts would be compelled to follow state
decisions. There was sufficient doubt about the matter in 1789 to induce the first Congress to
legislate. No former opinions of this Court have passed upon it. Mr. Justice Holmes evidently
saw nothing 'unconstitutional' which required the overruling of Swift v. Tyson, for he said in the
very opinion quoted by the majority, 'I should leave Swift v. Tyson undisturbed, as I indicated in
Kuhn v. Fairmont Coal Co., but I would not allow it to spread the assumed dominion into new
fields.' Black & White Taxicab Co. v. Brown & Yellow Taxicab Co., 276 U.S. 518, 535 , 48 S.Ct.
404, 409, 57 A.L.R. 426. If the opinion commits this Court to the position that the Congress is
without power to declare what rules of substantive law shall govern the federal courts, [304 U.S.
64, 92] that conclusion also seems questionable. The line between procedural and substantive
law is hazy, but no one doubts federal power over procedure. Wayman v. Southard, 10 Wheat. 1.
The Judiciary Article, 3, and the 'necessary and proper' clause of article 1, 8, may fully authorize
legislation, such as this section of the Judiciary Act.
In this Court, stare decisis, in statutory construction, is a useful rule, not an inexorable
command. Burnet v. Coronado Oil & Gas Co., 285 U.S. 393 , dissent, page 406, note 1, 52 S.Ct.
443, 446. Compare Read v. Bishop of Lincoln, (1892) A.C. 644, 655; London Street Tramways v.
London County Council, (1898) A.C. 375, 379. It seems preferable to overturn an established
construction of an act of Congress, rather than, in the circumstances of this case, to interpret the
Constitution. Cf. United States v. Delaware & Hudson Co., 213 U.S. 366 , 29 S.Ct. 527.
There is no occasion to discuss further the range or soundness of these few phrases of the
opinion. It is sufficient now to call attention to them and express my own non-acquiescence.
129 | C o n f l i c t o f L a w s C a s e s
Footnotes
[ Footnote * ] Mandate conformed to 98 F.2d 49.
[ Footnote 1 ] 1842, 16 Pet. 1. Leading cases applying the doctrine are collected in Black & White
Taxicab, etc., Co. v. Brown & Yellow Taxicab, etc., Co., 276 U.S. 518, 530 , 531 S., 48 S.Ct. 404,
407, 408, 57 A.L.R. 426. Dissent from its application or extension was expressed as early as 1845
by Mr. Justice McKinley (and Mr. Chief Justice Taney) in Lane v. Vick, 3 How. 464, 477.
Dissenting opinions were also written by Mr. Justice Daniel in Rowan v. Runnels, 5 How. 134,
140; by Mr. Justice Nelson in Williamson v. Berry, 8 How. 495, 550, 558; by Mr. Justice
Campbell in Pease v. Peck, 18 How. 595, 599, 600; and by Mr. Justice Miller in Gelpcke v. City of
Dubuque, 1 Wall. 175, 207, and U.S. ex rel. Butz v. City of Muscatine, 8 Wall. 575, 585. Vigorous
attack upon the entire doctrine was made by the Mr. Justice Field in Baltimore & Ohio R.R. Co.
v. Baugh, 149 U.S. 368, 390 , 13 S.Ct. 914, and by Mr. Justice Holmes in Kuhn v. Fairmont Coal
Co., 215 U.S. 349, 370 , 30 S.Ct. 140, and in the Taxicab Case, 276 U.S. 518 , at page 532, 48 S.Ct.
404, 408, 57 A.L.R. 426.
[ Footnote 2 ] In Hawkins v. Barney's Lessee, 5 Pet. 457, 464, it was stated that section 34 'has
been uniformly held to be no more than a declaration of what the law would have been without
it: to wit, that the lex loci must be the governing rule of private right, under whatever jurisdiction
private right comes to be examined.' See, also, Bank of Hamilton v. Dudley's Lessee, 2 Pet. 492,
525. Compare Jackson v. Chew, 12 Wheat. 153, 162, 168; Livingston v. Moore, 7 Pet. 469, 542, 8
l.Ed. 751.
[ Footnote 3 ] Pepper, The Border Land of Federal and State Decisions (1889) 57; Gray, The
Nature and Sources of Law (1909 ed.) 533, 534; Trickett, Non- Federal Law Administered in
Federal Courts (1906) 40 Am.L.Rev. 819, 821- 824.
[ Footnote 4 ] Street, Is There a General Commercial Law of the United States ( 1873) 21
Am.L.Reg. 473; Hornblower, Conflict between State and Federal Decisions (1880) 14 Am.L.Rev.
211; Meigs, Decisions of the Federal Courts on Questions of State Law (1882) 8 So.L.Rev. (n.s.)
452, (1911) 45 Am.L. Rev. 47; Heiskell, Conflict between Federal and State Decisions (1882) 16
Am.L.Rev. 743; Rand, Swift v. Tyson versus Gelpcke v. Dubuque (1895) 8 Harv.L.Rev. 328, 341-
343; Mills, Should Federal Courts Ignore State Laws ( 1900) 34 Am.L.Rev. 51; Carpenter, Court
Decisions and the Common Law (1917) 17 Col.L.Rev. 593, 602, 603.
[ Footnote 5 ] Charles Warren, New Light on the History of the Federal Judiciary Act of 1789
(1923) 37 Harv.L.Rev. 49, 51-52, 81-88, 108.
[ Footnote 6 ] Shelton, Concurrent Jurisdiction-Its Necessity and its Dangers ( 1928) 15
Va.L.Rev. 137; Frankfurter, Distribution of Judicial Power Between Federal and State Courts
(1928) 13 Corn.L.Q. 499, 524-530; Johnson, State Law and the Federal Courts (1929) 17 Ky.L.J.
355; Fordham, The Federal Courts and the Construction of Uniform State Laws (1929) 7 N.C.L.
Rev. 423; Dobie, Seven Implications of Swift v. Tyson (1930) 16 Va.L.Rev. 225; Dawson, Conflict
of Decisions between State and Federal Courts in Kentucky, and the Remedy (1931) 20 Ky.L.J. 1;
Campbell, Is Swift v. Tyson an Argument for or against Abolishing Diversity of Citizenship
Jurisdiction (1932) 18 A.B.A.J. 809; Ball, Revision of Federal Diversity Jurisdiction (1933) 28
Ill.L.Rev. 356, 362-364; Fordham, Swift v. Tyson and the Construction of State Statutes (1935)
41 W.Va.L.Q. 131.
[ Footnote 7 ] Compare Mr. Justice Miller in Gelpcke v. City of Dubuque, 1 Wall. 175, 209. The
conflicts listed in Holt, The Concurrent Jurisdiction of the Federal and State Courts (1888) 160
et seq. cover twenty-eight pages. See, also, Frankfurter, supra note 6, at 524-530; Dawson, supra
note 6; Note, Aftermath of the Supreme Court's Stop, Look and Listen Rule (1930) 43
harv.L.Rev. 926; cf. Yntema and Jaffin, Preliminary Analysis of Concurrent Jurisdiction (1931)
79 U. of Pa.L.Rev. 869, 881-886. Moreover, as pointed out by judge Augustus N. Hand in Cole v.
Pennsylvania R. Co., D.C., 43 F.2d 953, 956, 957, 71 A.L.R. 1096, decisions of this Court on
common-law questions are less likely than formerly to promote uniformity.
[ Footnote 8 ] Compare 2 Warren, The Supreme Court in United States History, Rev. Ed. 1935,
89: 'Probably no decision of the Court has ever given rise to more uncertainty as to legal rights;
and though doubtless intended to promote uniformity in the operation of business transactions,
its chief effect has been to render it difficult for business men to know in advance to what
particular topic the Court would apply the doctrine. ...' The Federal Digest through the 1937
volume, lists nearly 1,000 decisions involving the distinction between questions of general and of
local law.
[ Footnote 9 ] It was even possible for a nonresident plaintiff defeated on a point of law in the
highest court of a State nevertheless to win out by taking a nonsuit and renewing the controversy
in the federal court. Compare Gardner v. Michigan Cent. R.R. Co., 150 U.S. 349 , 14 S.Ct. 140;
Harrison v. Foley, 8 Cir., 206 F. 57; Interstate Realty & Inv. Co. v. Bibb County, 5 Cir., 293 F.
721; see Mills, supra note 4, at 52.
[ Footnote 10 ] For a recent survey of the scope of the doctrine, see Sharp & Brennan, The
Application of the Doctrine of Swift v. Tyson since 1900 ( 1929) 4 Ind.L.J. 367.
[ Footnote 11 ] Black & White Taxicab & Transfer Co. v. Brown & Yellow Taxicab & Transfer
Co., 276 U.S. 518 , 48 S.Ct. 404, 57 A.L.R. 426; Rowan v. Runnels, 5 How. 134, 139; Boyce v.
Tabb, 18 Wall. 546, 548; Johnson v. Chas. D. Norton Co., 6 Cir., 159 F. 361; Keene Five Cent Sav.
Bank v. Reid, 8 Cir., 123 F. 221.
[ Footnote 12 ] New York Railroad Co. v. Lockwood, 17 Wall. 357, 367, 368; Liverpool & G. W.
Steam Co. v. Phenix Ins. Co., 129 U.S. 397, 443 , 9 S.Ct. 469; Eells v. St. Louis, K. & N.W. Ry. Co.,
C.C.S.D. Iowa, 52 F. 903; Fowler v. Pennsylvania R.R. Co., 2 Cir., 229 F. 373.
[ Footnote 13 ] Chicago v. Robbins, 2 Black 418, 428. Compare Yates v. Milwaukee, 10 Wall. 497,
506, 507; Yeates v. Illinois Cent. Ry. Co., C.C.N.D.Ill., 137 F. 943; Curtis v. Cleveland, C.C. & St.
L. Ry. Co., C.C.E.D.Ill., 140 F. 777. See, also, Hough v. Texas Railway Co., 100 U.S. 213 , 226;
Baltimore & Ohio R.R. Co. v. Baugh, 149 U.S. 368 , 13 S.Ct. 914; Gardner v. Michigan Cent. R.R.
Co., 150 U.S. 349, 358 , 14 S.Ct. 140; Beutler v. Grand Trunk Junction Ry. Co., 224 U.S. 85 , 32
S.Ct. 402; Baltimore & Ohio R.R. Co. v. Goodman, 275 U.S. 66 , 48 S.Ct. 24, 56 A.L.R. 645;
Pokora v. Wabash Ry. Co., 292 U.S. 98 , 54 S.Ct. 580. 91 A.L.R. 1049; Cole v. Pennsylvania R.R.
Co., D.C., 43 F.2d 953, 71 A.L.R. 1096.
[ Footnote 14 ] Lake Shore & M.S. Ry. Co. v. Prentice, 147 U.S. 101, 106 , 13 S.Ct. 261; Norfolk &
P. Traction Co. v. Miller, 4 Cir., 174 F. 607; Greene v. Keithley, 8 Cir., 86 F.2d 238, 239.
[ Footnote 15 ] Foxcroft v. Mallet, 4 How. 353, 379; Midland Valley Ry. Co. v. Sutter, 8 Cir., 28
F.2d 163; Midland Valley Ry. Co. v. Jarvis, 8 Cir., 29 F.2d 539, 61 A.L.R. 1064.
[ Footnote 16 ] Kuhn v. Fairmont Coal Co., 215 U.S. 349 , 30 S.Ct. 140; Mid-Continent Petroleum
Corporation v. Sauder, 10 Cir., 67 F.2d 9, 12, reversed on other grounds 292 U.S. 272 , 54 S.Ct.
671, 93 A. L.R. 454.
130 | C o n f l i c t o f L a w s C a s e s
[ Footnote 17 ] Lane v. Vick, 3 How. 464, 476; Barber v. Pittsburg, F.W. & C. Ry. Co., 166 U.S. 83,
99 , 100 S., 17 S.Ct. 488; Messinger v. Anderson, 6 Cir., 171 F. 785, 791, 792, reversed on other
grounds 225 U.S. 436 , 32 S.Ct. 739; Knox & Lewis & Alwood, D.C.S.D.Ga., 228 F. 753.
[ Footnote 18 ] Compare, also, Williamson v. Berry, 8 How. 495; Watson v. Tarpley, 18 How. 517;
Gelpcke v. City of Dubuque, 1 Wall. 175.
[ Footnote 19 ] See Cheever v. Wilson, 9 Wall. 108, 123; Robertson v. Carson, 19 Wall. 94, 106,
107; Morris v. Gilmer, 129 U.S. 315, 328 , 9 S.Ct. 289; Dickerman v. Northern Trust Co., 176 U.S.
181, 192 , 20 S.Ct. 311; Williamson v. Osenton, 232 U.S. 619, 625 , 34 S.Ct. 442.
[ Footnote 20 ] See, e.g., Hearings Before a Subcommittee of the Senate Committee on the
Judiciary on S. 937, S. 939, and S. 3243, 72d Cong., 1st Sess. ( 1932) 6-8; Hearing Before the
House Committee on the Judiciary on H.R. 10594, H.R. 4526, and H.R. 11508, 72d Cong., 1st
Sess., ser. 12 (1932) 97- 104; Sen.Rep.No. 530, 72d Cong., 1st Sess. (1932) 4-6; Collier, A Plea
Against Jurisdiction Because of Diversity (1913) 76 Cent.L.J. 263, 264, 266; Frankfurter, supra
note 6; Ball, supra, note 6; Warren, Corporations and Diversity of Citizenship (1933) 19
Va.L.Rev. 661, 686.
[ Footnote 21 ] Thus, bills which would abrogate the doctrine of Swift v. Tyson have been
introduced. S. 4333, 70th Cong., 1st Sess.; S. 96, 71st Cong., 1st Sess.; H.R. 8094, 72d Cong., 1st
Sess. See, also, Mills, supra, note 4, at 68, 69; Dobie, supra, note 6, at 241; Frankfurter, supra,
note 6, at 530; Campbell, supra, note 6, at 811. State statutes on conflicting questions of 'general
law' have also been suggested. See Heiskell, supra, note 4, at 760; Dawson, supra, note 6; Dobie,
supra, note 6, at 241.
[ Footnote 22 ] The doctrine has not been without defenders. See Eliot, The Common Law of the
Federal Courts (1902) 36 Am.L.Rev. 498, 523-525; A. B. Parker, The Common Law Jurisdiction
of the United States Courts (1907) 17 Yale L.J. 1; Schofield, Swift v. Tyson: Uniformity of Judge-
Made State Law in State and Federal Courts (1910) 4 Ill.L.Rev. 533; Brown, The Jurisdiction of
the Federal Courts Based on Diversity of Citizenship (1929) 78 U. of Pa.L.Rev. 179, 189-191; J. J.
Parker, The Federal Jurisdiction and Recent Attacks Upon It (1932) 18 A.B.A.J. 433, 438;
Yntema, The Jurisdiction of the Federal Courts in Controversies Between Citizens of Different
States (1933) 19 A.B.A.J. 71, 74, 75; Beutel, Common Law Judicial Technique and the Law of
Negotiable Instruments-Two Unfortunate Decisions (1934) 9 Tulane L.Rev. 64.
[ Footnote 23 ] Kuhn v. Fairmont Coal Co., 215 U.S. 349 , 370-372, 30 S.Ct. 140; Black & White
Taxicab, etc., Co. v. Brown & Yellow Taxicab, etc ., Co., 276 U.S. 518 , 532-536, 48 S.Ct. 404, 408,
409, 57 A. L.R. 426.
[ Footnote 24 ] Tompkins also contended that the alleged rule of the Falchetti Case is not in any
event applicable here because he was struck at the intersection of the longitudinal pathway and a
transverse crossing. The court below found it unnecessary to consider this contention, and we
leave the question open.
[ Footnote 1 ] Mr. Justice Field Filed a dissenting opinion, several sentences of which are quoted
in the decision just announced. The dissent failed to impress any of his associates. It assumes
that adherence to section 34 as construed involves a supervision over legislative or judicial action
of the states. There is no foundation for that suggestion. Clearly, the dissent of the learned
Justice rests upon misapprehension of the rule. He joined in applying the doctrine for more than
a quarter of a century before his dissent. The reports do not disclose that he objected to it in any
later case. Cf. Oakes v. Mase, 165 U.S. 363 , 17 S.Ct. 345.
[ Footnote 2 ] In Salem Co. v. Manufacturers' Co., 264 U.S. 182 , at page 200, 44 S. Ct. 266, 271,
31 A.L.R. 867, Mr. Justice Holmes and Mr. Justice Brandeis concurred in the judgment of the
Court upon a question of general law on the ground that the rights of the parties were governed
by state law.
G.R. Nos. 90306-07 July 30, 1990
K.K. SHELL SEKIYU OSAKA HATSUBAISHO and FU HING OIL CO., LTD., petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ATLANTIC VENUS CO., S.A., and THE VESSEL
M/V "ESTELLA", respondents.
but such has remained unpaid despite demand and that the claim constitutes a maritime lien.
The issuance of a writ of attachment was also prayed for.
On July 16, 1987, petitioner K.K. Shell Sekiyu Osaka Hatsubaisho (hereinafter referred to as
K.K. Shell"), a corporation organized in Japan and not doing business in the Philippines, likewise
filed a motion to intervene with an attached complaint-in-intervention, alleging that upon request
of NSS, Crestamonte's general agent in Japan, K.K. Shell provided and supplied marine diesel
oil/fuel to the W Estella at the ports of Tokyo and Mutsure in Japan and that despite previous
demands Crestamonte has failed to pay the amounts of Sixteen Thousand Nine Hundred
Ninety-Six Dollars and Ninety- Six Cents (US$16,996.96) and One Million Yen (Y1,000,000.00)
and that K.K. Shell's claim constitutes a maritime lien on the MV Estella. The complaint-in-
intervention sought the issuance of a writ of preliminary attachment.

Hernandez, Velicaria Vibar & Santiago for petitioners.

The trial court allowed the intervention of Fu Hing and K.K. Shell on June 19,1987 and August
11, 1987, respectively. Writs of preliminary attachment were issued on August 25, 1987 upon
Cesar C. Cruz & Partners for private respondents posting of the appropriate bonds. Upon the posting of counterbonds, the writs of attachment
were discharged on September 3, 1987.

Atlantic and the MV Estella moved to dismiss the complaints-in- intervention filed by Fu Hing and
K.K. Shell.
CORTES, J:

In the meantime, Atlantic and the AWU Estella filed a petition in the Court of Appeals against the
Ordinarily, the Court will not disturb the factual findings of the Court of Appeals, these being
trial court judge, Kumagai, NSS and Keihin, docketed as CA-G.R. SP No. 12999, which sought
considered final and conclusive. However, when its factual conclusions are manifestly mistaken,
the annulment of the orders of the trial court dated April 30, 1987 and August 11, 1987. Among
the Court will step in to correct the misapprehension [De la Cruz v. Sosing, 94 Phil. 26 (1953);
others, the omnibus order dated August 11, 1987 denied the motion to reconsider the order
Castillo v. Court of Appeals, G.R. No. L-48290, September 29, 1983, 124 SCRA 808.] This case
allowing Fu Hing's intervention and granted K.K. Shell's motion to intervene. Again Fu Hing and
is one such instance calling for the Court's review of the facts.
K.K. Shell intervened, CA-G.R. SP No. 12999 was consolidated with another case (CA-G.R. SP
No. 12341). Fu Hing and K.K. Shell intervened in CA-G.R. SP No. 12999.
On January 7,1987, Kumagai Kaiun Kaisha, Ltd. (hereinafter referred to as Kumagai), a
corporation formed and existing under the laws of Japan, filed a complaint for the collection of a
In a decision dated June 14, 1989, the Court of Appeals annulled the orders of the trial court and
sum of money with preliminary attachment against Atlantic Venus Co., S.A. (hereinafter referred
directed it to cease and desist from proceeding with the case.
to as "Atlantic"), a corporation registered in Panama, the vessel MV Estella and Crestamonte
Shipping Corporation (hereinafter referred to as "Crestamonte"), a Philippine corporation.
Atlantic is the owner of the MV Estella. The complaint, docketed as Civil Case No. 8738930 of According to the Court of Appeals, Fu Hing and K.K. Shell were not suppliers but sub-agents of
the Regional Trial Court, Branch XIV, Manila alleged that Crestamonte, as bareboat charterer NSS, hence they were bound by the Agency Agreement between Crestamonte and NSS,
and operator of the MV Estella, appointed N.S. Shipping Corporation (hereinafter referred to as particularly, the choice of forum clause, which provides:
"NSS"), a Japanese corporation, as its general agent in Japan. The appointment was formalized
in an Agency Agreement. NSS in turn appointed Kumagai as its local agent in Osaka, Japan.
12.0-That this Agreement shall be governed by the Laws of Japan. Any
Kumagai supplied the MV Estella with supplies and services but despite repeated demands
matters, disputes, and/or differences arising between the parties hereto
Crestamonte failed to pay the amounts due.
concerned regarding this Agreement shall be subject exclusively to the
jurisdiction of the District Courts of Japan.
NSS and Keihin Narasaki Corporation (hereinafter referred to a Keihin filed complaints-in-
intervention.
Thus, concluded the Court of Appeals, the trial court should have disallowed their motions to
intervene.
On May 19,1987, petitioner Fu Hing Oil Co., Ltd. (hereinafter referred to as Fu Hing"), a
corporation organized in Hong Kong and not doing business in the Philippines, filed a motion for
A motion for reconsideration was filed by Fu Hing and K.K. Shell but this was denied by the
leave to intervene with an attached complaint-in-intervention, alleging that Fu Hing supplied
Court of Appeals. Hence this petition;
marine diesel oil/fuel to the MV Estella and incurred barge expenses for the total sum of One
Hundred Fifty-two Thousand Four Hundred Twelve Dollars and Fifty-Six Cents (US$152,412.56)

131 | C o n f l i c t o f L a w s C a s e s
In this case, we shall review the decision of the Court of Appeals only insofar as it relate to the
intervention of K.K. Shell. Fu Hing Oil Co., Ltd. filed a motion to withdraw as co-petitioner on
March 7, 1990, alleging that an amicable settlement had been reached with private respondents.
The Court granted the motion on March 19, 1990.
After considering the pleadings filed by the parties and the arguments raised therein, the Court
finds reversible error on the part of the Court of Appeals in so far; as it disallowed petitioners'
intervention in the case before the trial court and ordered the latter to cease and desist from
proceeding with the case.
1. A reading of the Agency Agreement fails to support the conclusion that K.K. Shell is a sub-
agent of NSS and is, therefore, bound by the agreement.
The body of the Agency Agreement entered into by and between Crestamonte (referred to in the
agreement as "Owner") and NSS ("Agent") provides:
WITNESSETH
That the OWNER has appointed and by these presents hereby appoints the AGENT as its
General Agents for all Japan in connection with the Owner's vessels and/or providing suitable
vessels for Japan Ports under the following terms and conditions:
1.0 - In general, the Agent will abide by the Owner's decisions regarding the
mode of operations of the vessels in Japan and that all cargo bookings,
vessel's fixtures/charters, etc. by the Agent, shall always be subject to the
prior approval and consent of the Owners.
2.0 - That the Agent shall provide for the necessary services required for the
husbanding of the Owner's vessels in all Japan Ports and issue Bill(s) of
Lading to Shippers in the form prescribed by the Owners.
3.0 - That the Agent shall be responsible for fixing south-bound cargoes with
revenues sufficient to cover ordinary liner operation expenses such as
bunkers, additives, lubricating oil, water, running repairs, drydocking
expenses, usual port disbursement accounts, cargo handling charges
including stevedorage, provisions and ship's stores and cash advance to
crew (excluding crew provisions).
The Agent expressly agrees that the Owner's cash flow in Japan shall be
essentially the Agent's responsibility, and should the revenue for south-
bound cargoes as above-mentioned be insufficient to cover the aforesaid
expenses, the Agent shall provide credit to the extent of the vessels'
requirements, provided however that said obligation shall be secured by the
Owner committing at least forty-eight (48) mailings of Japan/Philippines liner
service per year.
The Agent shall settle, in behalf of the Owner, all outstanding payments for
the operation costs on Owner's liner service carried forward from the
132 | C o n f l i c t o f L a w s C a s e s
present Owner's agent, subject to approval of Owner's Representative in
Japan in regard to amount and nature thereof.
4.0- That the agent shall furnish office space of approximately thirty (30)
square meters for the exclusive use of the Owner and its representatives,
within the premises of the Agent's office, free of charge.
5.0 — That the responsibilities of the Agent in regard to the cargo shall
begin, in the case of imports into the territory of Japan, from the time such
cargo has left the ship's tackles, and shall cease, in case of export, upon
completion of loading.
6.0 — That the remuneration of the Agent from the Owner shall be as
follows:
xxx xxx xxx
7.0 — That the Agent shall exert best efforts to recommend to Owners
stevedoring and other expenses incurred in connection with work on board
the Owner's vessels, as well as customs house charges, pilotage, harbour
dues, cables, etc. which are for Owner's account, on the cheapest possible
terms. Owners shall decide and may appoint through the Agent the services
described herein.
8.0 — That the Agent shall be responsible for the due collection of and due
payment to the Owner of all outward freight prepaid for cargo without delay
upon the sailing of each vessel from the port. The Agent shall be also
responsible for the due collection of all inward freight payable at the port
against delivery unless otherwise instructed by the Owner to the contrary.
9.0 — The account statements supported by vouchers in two copies
itemized for each service and/or supply for each vessel, shall be forwarded
by the Agent to the Owner promptly after the departure of each vessel but in
no case later than 60 days thereafter.
10.0 — That the freightage to be collected by the Agent in Japan shall be
paid to the Owner after deducting the total amount of disbursements
incurred in Japan.
11.0 — That this Agreement takes effect as of April 15, 1983 and shall
remain in force unless terminated by either party upon 60 days notice.
12.0 — That this Agreement shall be governed by the Laws of Japan. Any
matters, disputes, and/or differences arising between the parties hereto
concerned regarding this reement shall be subject exclusively to the
jurisdiction of the District Courts of Japan. [Annex "G" of the Petition, Rollo,
pp. 100-104.]
No express reference to the contracting of sub-agents or the applicability of the terms of the
agreement, particularly the choice-of-forum clause, to sub-agents is made in the text of the
agreement. What the contract clearly states are NSS' principal duties, i.e., that it shall provide for
the necessary services required for the husbanding of Crestamonte's vessels in Japanese ports
(section 2.0) and shall be responsible for fixing southbound cargoes with revenues sufficient to
cover ordinary expenses (section 3.0).i•t•c-aüsl
Moreover, the complaint-in-intervention filed by K.K. Shell merely alleges that it provided and
supplied the MV Estella with marine diesel oil/fuel, upon request of NSS who was acting for and
as duly appointed agent of Crestamonte [Rollo, pp. 116117.] There is thus no basis for the Court
of Appeal's finding, as regards K.K Shell in relation to its intervention in Civil Case No. 87-38930,
that "the sub-agents admitted in their pleadings that they were appointed as local agent/sub-
agent or representatives by NSS by virtue of said Agency Agreement" [Decision, p. 7; Rollo, p.
33.] What the Court of Appeals could have been referring to was K.K. Shell's Urgent Motion for
Leave to Intervene dated February 24, 1987 in another case (Civil Case No. 86-38704) in
another court and involving other vessels (NW Ofelia and MV Christina C), where it was alleged
that K.K. Shell is "one of the representatives of NS Shipping Corporation for the supply of bunker
oil, fuel oil, provisions and other necessaries to vessels of which NS Shipping Corporation was
the general agent." [Comment, p. 17; Rollo, p. 274.] However, this allegation does not
conclusively establish a sub-agency between NSS and K.K. Shell. It is therefore surprising how
the Court of Appeals could have come to the conclusion, just on the basis of the Agency
Agreement and the pleadings filed in the trial court, that "Crestamonte is the principal, NSS is
the agent and ... Fu Hing and K.K Shell are the sub-agents." [Decision, p. 6; Rollo, p. 32.]
In view of the inconclusiveness of the Agency Agreement and the pleadings filed in the trial
court, additional evidence, if there be any, would still have to be presented to establish the
allegation that K.K. Shell is a sub-agent of NSS.
In the same vein, as the choice-of-forum clause in the agreement (paragraph 12.0) has not been
conclusively shown to be binding upon K.K. Shell, additional evidence would also still have to be
presented to establish this defense, K.K. Shell cannot therefore, as of yet, be barred from
instituting an action in the Philippines.
2. Private respondents have anticipated the possibility that the courts will not find that K.K. Shell
is expressly bound by the Agency Agreement, and thus they fall back on the argument that even
if this were so, the doctrine of forum non conveniens would be a valid ground to cause the
dismissal of K.K. Shell's complaint-in-intervention.
K.K. Shell counters this argument by invoking its right as maritime lienholder. It cites Presidential
Decree No. 1521, the Ship Mortgage Decree of 1978, which provides:
SEC. 21. Maritime Lien for Necessaries; person entitled to such lien-Any
person furnishing repairs, supplies, to wage, use of dry dock or marine
railway, or other necessaries, to any vessel, whether foreign or domestic,
upon the order of the owner of such vessel, or of a person authorized by the
owner, shall have a maritime lien on the vessel, which may be enforced by
suit in rem, and it shall be necessary to allege or prove that credit was given
to the vessel.
133 | C o n f l i c t o f L a w s C a s e s
Private respondents on the other hand argue that even if P.D. No. 1521 is applicable, K.K. Shell
cannot rely on the maritime lien because the fuel was provided not exclusively for the benefit of
the MV Estella, but for the benefit of Crestamonte in general. Under the law it must be
established that the credit was extended to the vessel itself. Now, this is a defense that calls
precisely for a factual determination by the trial court of who benefitted from the delivery of the
fuel. Hence, again, the necessity for the reception of evidence before the trial court.
In other words, considering the dearth of evidence due to the fact that the private respondents
have yet to file their answer in the proceedings below and trial on the merits is still to be
conducted, whether or not petitioners are indeed maritime lienholders and as such may enforce
the lien against the MV Estella are matters that still have to be established.
Neither are we ready to rule on the private respondents' invocation of the doctrine of forum non
conveniens, as the exact nature of the relationship of the parties is still to be established. We
leave this matter to the sound discretion of the trial court judge who is in the best position, after
some vital facts are established, to determine whether special circumstances require that his
court desist from assuming jurisdiction over the suit.
It was clearly reversible error on the. part of the Court of Appeals to annul the trial court's orders,
insofar as K.K. Shell is concerned, and order the trial court to cease and desist from proceeding
with Civil Case No. 87-38930. There are still numerous material facts to be established in order
to arrive at a conclusion as to the true nature of the relationship between Crestamonte and K.K.
Shell and between NSS and K.K. Shell. The best recourse would have been to allow the trial
court to proceed with Civil Case No. 87-38930 and consider whatever defenses may be raised
by private respondents after they have filed their answer and evidence to support their conflicting
claims has been presented. The Court of Appeals, however, substituted its judgment for that of
the trial court and decided the merits of the case, even in the absence of evidence, on the
pretext of reviewing an interlocutory order.
WHEREFORE, the petition is GRANTED and the decision of the Court of Appeals is
REVERSED in CA-G.R. SP No. 12999, insofar as it annulled the order of the August 11, 1987
and directed the trial court to cease and desist from proceeding with Civil Case No. 87-38930.
SO ORDERED.
45 F.2d 426 (1930)
HEINE
v.
NEW YORK LIFE INS. CO.
No. 10465.
District Court, D. Oregon.
December 1, 1930.
C. T. Haas and E. B. Seabrook, both of Portland, Or., for plaintiff.
Huntington, Wilson & Huntington and Clark & Clark, all of Portland, Or., for defendant.
BEAN, District Judge.
This is one of a series of cases pending in this court against the New York Life Insurance
Company and the Guardian Insurance Company, each of which is a New York corporation, to
recover on some two hundred and forty life insurance policies made and issued by the
defendants in Germany, in favor of German citizens and subjects, and payable in German
marks. The policies of the New York Life Insurance Company were issued prior to August 1,
1914, and those of the Guardian prior to May 1, 1918. As a condition to their right to do business
in Germany, the insurance companies were required to and did submit to the supervision and
control of the German insurance officials, to invest the reserves arising from German policies in
German securities, and to establish, and they do now maintain, an office in that country with a
resident representative or agent upon whom service of process can be made.
The actions now pending are brought and prosecuted in the name of, or as assignee of the
insured by, certain parties in the United States and Germany, under an irrevocable power of
attorney, by which they are authorized and empowered to sue for, collect, receive, and receipt
for all sums due or owing under the policies, or compromise the same in consideration of an
assignment and transfer to them of the undivided 25 per cent. interest in the policies and all
rights accruing thereunder.
None of the parties to the litigation are residents or inhabitants of this district. The plaintiffs
reside in, and are citizens of, the republic of Germany. The defendants are corporations
organized and existing under the laws of New York, with their principal offices in that state, with
statutory agents in Oregon, upon whom service can be made. None of the causes of action
arose here, nor do any of the material witnesses reside in the district, nor are any of the records
of the defendant companies pertaining to the policies in suit in the district, but such records are
either at the home office in New York or at their offices in Germany. The courts of Germany and
New York are open and functioning and competent to take jurisdiction of the controversies, and
service can be made upon the defendants in either of such jurisdictions. To require the
defendants to defend the actions in this district would impose upon them great and unnecessary
inconvenience and expense, and probably compel them to produce here (three thousand miles
from their home office) numerous records, books, and papers, all of which are in daily use by it
in taking care of current business.
In addition, it would no doubt consume months of the time of this court to try and dispose of
these cases, thus necessarily disarranging the calendar, resulting in delay, inconvenience, and
expense to other litigants who are entitled to invoke its jurisdiction.
Under these circumstances, the defendants, while conceding that the court has jurisdiction of the
person and subject-matter, urges that it should refuse, in its discretion, to exercise such
jurisdiction.
I unhesitatingly concur in this view, for, as said by Mr. Justice Holmes in Cuba Railroad Co. v.
Crosby, 222 U.S. 473, 32 S. Ct. 132, 133, 56 L. Ed. 274, 38 L. R. A. (N. S.) 40: "It should be
remembered that parties do not enter into civil relations in foreign jurisdictions in reliance upon
our courts. They could not complain if our courts refused to meddle with their affairs, and
remitted them to the place that established and would enforce their rights. * * * The only just
ground for complaint would be if their rights and liabilities, when enforced by our courts, should
be measured by a different rule from that under which the parties dealt."
134 | C o n f l i c t o f L a w s C a s e s
*427 It is apparent that the plaintiffs are seeking by these actions to impose on the defendants a
liability under a different rule than "that under which the parties dealt."
The courts of Germany have ruled that any person seeking to recover on a civil contract made in
Germany prior to August, 1924, and payable in marks, can only recover on the basis provided in
the monetary law of 1924. Manifestly the plaintiffs are not proceeding on any such theory.
It is argued by the plaintiffs that, because the court has jurisdiction of the subject-matter and the
parties, it has no discretion, but should proceed with the case, regardless of where the cause of
action arose, or the law by which it is controlled, or the residence or convenience of the parties
and witnesses, or the difficulty the court would encounter in attempting to interpret and enforce a
foreign contract, or the interference with the other business of the court. But that is a matter
resting in its discretion. It may retain jurisdiction, or it may, in the exercise of a sound discretion,
decline to do so, as the circumstances suggest. The courts have repeatedly refused, in their
discretion, to entertain jurisdiction of causes of action arising in a foreign jurisdiction, where both
parties are nonresidents of the forum. Gregonis v. Philadelphia & R. Coal & Iron Co., 235 N.Y.
152, 139 N.E. 223, 32 A. L. R. 1, and note; Pietraroia v. New Jersey & Hudson River Ry. & Ferry
Co., 197 N.Y. 434, 91 N.E. 120; Gregonis v. P. & R. Coal & Iron Co., 235 N.Y. 152, 139 N.E.
223, 32 A. L. R. 1; Stewart v. Litchenberg, 148 La. 195, 86 So. 734; Smith v. Mutual Life
Insurance Co., 14 Allen (96 Mass.) 336-343; National Telephone Mfg. Co. v. Du Bois, 165 Mass.
117, 42 N.E. 510, 30 L. R. A. 628, 52 Am. St. Rep. 503; Collard v. Beach, 81 App. Div. 582, 81
N.Y.S. 619; Great Western Railway Co. v. Miller, 19 Mich. 305; Disconto Gesellschat v. Umbreit,
127 Wis. 651, 106 N.W. 821, 15 L. R. A. (N. S.) 1045, 115 Am. St. Rep. 1063.
As said by Mr. Justice Bradley in The Belgenland, 114 U.S. 355, 5 S. Ct. 860, 864, 29 L. Ed.
152: "Circumstances often exist which render it inexpedient for the court to take jurisdiction of
controversies between foreigners in cases not arising in the country of the forum; as, where they
are governed by the laws of the country to which the parties belong, and there is no difficulty in a
resort to its courts; or where they have agreed to resort to no other tribunals * * * not on the
ground that it has not jurisdiction, but that, from motives of convenience, or international comity,
it will use its discretion whether to exercise jurisdiction or not."
See, also, Charter Shipping Co. v. Bowring, 281 U.S. 515, 50 S. Ct. 400, 74 L. Ed. 1008.
These, in my judgment, are cases of that kind. They are actions brought on causes of action
arising in Germany. The contract of insurance was made and to be paid there and in German
currency. It is to be construed and given effect according to the laws of the place where it was
made. 22 Am. & Eng. Ency. of Law (2d Ed.) 1350. The courts of this country are established and
maintained primarily to determine controversies between its own citizens and those having
business there, and manifestly the court may protect itself against a flood of litigation over
contracts made and to be performed in a foreign country, where the parties and witnesses are
nonresidents of the forum, and no reason exists why the liability, if any, cannot be enforced in
the courts of the country where the cause of action arose, or in the state where the defendant
was organized and has its principal offices. True, the courts of New York have declined to
exercise jurisdiction over actions brought on insurance policies similar to those in suit. Higgins v.
N. Y. Ins. Co., 220 App. Div. 760, 222 N.Y.S. 819, and Von Nessen-Stone v. N. Y. Life Ins.
Co.[1] But that affords no reason why this court should do so. It is to me unthinkable that
residents and citizens of Germany may import bodily into this court numerous actions against a
nonresident defendant, on contracts made and payable in Germany, and insist as a matter of
right that, because it has obtained jurisdiction of the defendant by service of its statutory agent,
the taxpayers, citizens, and residents of the district having business in the court should stand
aside and wait the conclusion of the case, where, as here, the courts of Germany and of the
home state of the defendant are open and functioning.
Judge Tucker, in the state court of Multnomah county, in an able and well-considered opinion in
a case brought on one of the German policies (Kahn v. New York), reached the same
conclusion.
Motion allowed.
G.R. No. L-32636 March 17, 1930
In the matter Estate of Edward Randolph Hix, deceased.
A.W. FLUEMER, petitioner-appellant,
vs.
ANNIE COUSHING HIX, oppositor-appellee.
C.A. Sobral for appellant.
Harvey & O' Brien and Gibbs & McDonough for appellee.
MALCOLM, J.:
The special administrator of the estate of Edward Randolph Hix appeals from a decision of
Judge of First Instance Tuason denying the probate of the document alleged to by the last will
and testament of the deceased. Appellee is not authorized to carry on this appeal. We think,
however, that the appellant, who appears to have been the moving party in these proceedings,
was a "person interested in the allowance or disallowance of a will by a Court of First Instance,"
and so should be permitted to appeal to the Supreme Court from the disallowance of the will
(Code of Civil Procedure, sec. 781, as amended; Villanueva vs. De Leon [1925], 42 Phil., 780).
It is theory of the petitioner that the alleged will was executed in Elkins, West Virginia, on
November 3, 1925, by Hix who had his residence in that jurisdiction, and that the laws of West
Verginia Code, Annotated, by Hogg, Charles E., vol. 2, 1914, p. 1690, and as certified to by the
Director of the National Library. But this was far from a compliance with the law. The laws of a
foreign jurisdiction do not prove themselves in our courts. the courts of the Philippine Islands are
not authorized to take American Union. Such laws must be proved as facts. (In re Estate of
Johnson [1918], 39 Phil., 156.) Here the requirements of the law were not met. There was no
was printed or published under the authority of the State of West Virginia, as provided in section
300 of the Code of Civil Procedure. Nor was the extract from the law attested by the certificate of
the officer having charge of the original, under the sale of the State of West Virginia, as provided
in section 301 of the Code of Civil Procedure. No evidence was introduced to show that the
extract from the laws of West Virginia was in force at the time the alleged will was executed.
In addition, the due execution of the will was not established. The only evidence on this point is
to be found in the testimony of the petitioner. Aside from this, there was nothing to indicate that
the will was acknowledged by the testator in the presence of two competent witnesses, of that
these witnesses subscribed the will in the presence of the testator and of each other as the law
of West Virginia seems to require. On the supposition that the witnesses to the will reside
without the Philippine Islands, it would then the duty of the petitioner to prove execution by some
other means (Code of Civil Procedure, sec. 633.)
135 | C o n f l i c t o f L a w s C a s e s
It was also necessary for the petitioner to prove that the testator had his domicile in West
Virginia and not establish this fact consisted of the recitals in the CATHY will and the testimony
of the petitioner. Also in beginning administration proceedings orginally in the Philippine Islands,
the petitioner violated his own theory by attempting to have the principal administration in the
Philippine Islands.
While the appeal pending submission in this court, the attorney for the appellant presented an
unverified petition asking the court to accept as part of the evidence the documents attached to
the petition. One of these documents discloses that a paper writing purporting to be the was
presented for probate on June 8, 1929, to the clerk of Randolph Country, State of West Virginia,
in vacation, and was duly proven by the oaths of Dana Wamsley and Joseph L. MAdden, the
subscribing witnesses thereto , and ordered to be recorded and filed. It was shown by another
document that, in vacation, on June 8, 1929, the clerk of court of Randolph Country, West
Virginia, appointed Claude W. Maxwell as administrator, cum testamento annexo, of the estate
of Edward Randolph Hix, deceased. In this connection, it is to be noted that the application for
the probate of the will in the Philippines was filed on February 20, 1929, while the proceedings in
West Virginia appear to have been initiated on June 8, 1929. These facts are strongly indicative
of an intention to make the Philippines the principal administration and West Virginia the
ancillary administration. However this may be, no attempt has been made to comply with Civil
Procedure, for no hearing on the question of the allowance of a will said to have been proved
and allowed in West Virginia has been requested. There is no showing that the deceased left
any property at any place other than the Philippine Islands and no contention that he left any in
West Virginia.
Reference has been made by the parties to a divorce purported to have been awarded Edward
Randolph Hix from Annie Cousins Hix on October 8, 1925, in the State of West specific
pronouncements on the validity or validity of this alleged divorce.
For all of the foregoing, the judgment appealed from will be affirmed, with the costs of this
instance against the appellant.
G.R. No. L-12105 January 30, 1960
TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-
appellee,
vs.
MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA
BOHANAN, oppositors-appellants.
Jose D. Cortes for appellants.
Ohnick, Velilla and Balonkita for appellee.
LABRADOR, J.:
Appeal against an order of the Court of First Instance of Manila, Hon. Ramon San Jose,
presiding, dismissing the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward
Bohanan to the project of partition submitted by the executor and approving the said project.
On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding,
admitted to probate a last will and testament of C. O. Bohanan, executed by him on April 23,
1944 in Manila. In the said order, the court made the following findings:
According to the evidence of the opponents the testator was born in Nebraska and
therefore a citizen of that state, or at least a citizen of California where some of his
properties are located. This contention in untenable. Notwithstanding the long
residence of the decedent in the Philippines, his stay here was merely temporary, and
he continued and remained to be a citizen of the United States and of the state of his
pertinent residence to spend the rest of his days in that state. His permanent
residence or domicile in the United States depended upon his personal intent or
desire, and he selected Nevada as his homicide and therefore at the time of his death,
he was a citizen of that state. Nobody can choose his domicile or permanent
residence for him. That is his exclusive personal right.
Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death
a citizen of the United States and of the State of Nevada and declares that his will and
testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and
admits the same to probate. Accordingly, the Philippine Trust Company, named as the
executor of the will, is hereby appointed to such executor and upon the filing of a bond
in the sum of P10,000.00, let letters testamentary be issued and after taking the
prescribed oath, it may enter upon the execution and performance of its trust. (pp. 26-
27, R.O.A.).
It does not appear that the order granting probate was ever questions on appeal. The executor
filed a project of partition dated January 24, 1956, making, in accordance with the provisions of
the will, the following adjudications: (1) one-half of the residuary estate, to the Farmers and
Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the benefit of
testator's grandson Edward George Bohanan, which consists of several mining companies; (2)
the other half of the residuary estate to the testator's brother, F.L. Bohanan, and his sister, Mrs.
M. B. Galbraith, share and share alike. This consist in the same amount of cash and of shares of
mining stock similar to those given to testator's grandson; (3) legacies of P6,000 each to his
(testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be paid in
three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine
Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;
Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to recognize the claim of the widow
on the ground that the laws of Nevada, of which the deceased was a citizen, allow him to
dispose of all of his properties without requiring him to leave any portion of his estate to his wife.
Section 9905 of Nevada Compiled Laws of 1925 provides:
Every person over the age of eighteen years, of sound mind, may, by last will, dispose
of all his or her estate, real and personal, the same being chargeable with the
payment of the testator's debts.
Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the
testator's estafa had already been passed upon adversely against her in an order dated June
19, 1955, (pp. 155-159, Vol II Records, Court of First Instance), which had become final, as
Magdalena C. Bohanan does not appear to have appealed therefrom to question its validity. On
December 16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 from the
funds of the estate, chargeable against her share in the conjugal property, (See pp. 294-297,
Vol. I, Record, Court of First Instance), and the court in its said error found that there exists no
community property owned by the decedent and his former wife at the time the decree of divorce
was issued. As already and Magdalena C. Bohanan may no longer question the fact contained
therein, i.e. that there was no community property acquired by the testator and Magdalena C.
Bohanan during their converture.
Moreover, the court below had found that the testator and Magdalena C. Bohanan were married
on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in
1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time
of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife
exists in the State of Nevada and since the court below had already found that there was no
conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no
longer claim to pay portion of the estate left by the testator.
The most important issue is the claim of the testator's children, Edward and Mary Lydia, who
had received legacies in the amount of P6,000 each only, and, therefore, have not been given
their shares in the estate which, in accordance with the laws of the forum, should be two-thirds
of the estate left by the testator. Is the failure old the testator to give his children two-thirds of the
estate left by him at the time of his death, in accordance with the laws of the forum valid?

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly
It will be seen from the above that out of the total estate (after deducting administration
provides that successional rights to personal property are to be earned by the national law of the
expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of
person whose succession is in question. Says the law on this point:
all shares of stock of several mining companies and to his brother and sister the same amount.
To his children he gave a legacy of only P6,000 each, or a total of P12,000.
Nevertheless, legal and testamentary successions, in respect to the order of
succession as well as to the extent of the successional rights and the intrinsic validity
The wife Magadalena C. Bohanan and her two children question the validity of the testamentary
of their provisions, shall be regulated by the national law of the person whose
provisions disposing of the estate in the manner above indicated, claiming that they have been
succession is in question, whatever may be the nature of the property and the country
deprived of the legitimate that the laws of the form concede to them.
in which it is found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16,
new Civil Code.)
The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should
be entitled to received. The will has not given her any share in the estate left by the testator. It is
In the proceedings for the probate of the will, it was found out and it was decided that the
argued that it was error for the trial court to have recognized the Reno divorce secured by the
testator was a citizen of the State of Nevada because he had selected this as his domicile and
testator from his Filipino wife Magdalena C. Bohanan, and that said divorce should be declared
his permanent residence. (See Decision dated April 24, 1950, supra). So the question at issue is
a nullity in this jurisdiction, citing the case of Querubin vs.Querubin, 87 Phil., 124, 47 Off. Gaz.,
whether the estementary dispositions, especially hose for the children which are short of the
(Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852, Ramirez vs. Gmur, 42 Phil., 855 and
136 | C o n f l i c t o f L a w s C a s e s
legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws
of Nevada allow a testator to dispose of all his properties by will (Sec. 9905, Complied Nevada
Laws of 1925, supra). It does not appear that at time of the hearing of the project of partition, the
above-quoted provision was introduced in evidence, as it was the executor's duly to do. The law
of Nevada, being a foreign law can only be proved in our courts in the form and manner provided
for by our Rules, which are as follows:
SEC. 41. Proof of public or official record. — An official record or an entry therein,
when admissible for any purpose, may be evidenced by an official publication thereof
or by a copy tested by the officer having the legal custody of he record, or by his
deputy, and accompanied, if the record is not kept in the Philippines, with a certificate
that such officer has the custody. . . . (Rule 123).
We have, however, consulted the records of the case in the court below and we have found that
during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of
P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws. was
introduced in evidence by appellant's (herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II,
and t.s.n. pp. 24-44, Records, Court of First Instance). Again said laws presented by the counsel
for the executor and admitted by the Court as Exhibit "B" during the hearing of the case on
January 23, 1950 before Judge Rafael Amparo (se Records, Court of First Instance, Vol. 1).
In addition, the other appellants, children of the testator, do not dispute the above-quoted
provision of the laws of the State of Nevada. Under all the above circumstances, we are
constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled
Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having
been offered at the hearing of the project of partition.
As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions
are to be governed by the national law of the testator, and as it has been decided and it is not
disputed that the national law of the testator is that of the State of Nevada, already indicated
above, which allows a testator to dispose of all his property according to his will, as in the case
at bar, the order of the court approving the project of partition made in accordance with the
testamentary provisions, must be, as it is hereby affirmed, with costs against appellants.
G.R. No. 139325 April 12, 2005
PRISCILLA C. MIJARES, LORETTA ANN P. ROSALES, HILDA B. NARCISO, SR. MARIANI
DIMARANAN, SFIC, and JOEL C. LAMANGAN in their behalf and on behalf of the Class
Plaintiffs in Class Action No. MDL 840, United States District Court of Hawaii, Petitioner,
vs.
HON. SANTIAGO JAVIER RANADA, in his capacity as Presiding Judge of Branch 137,
Regional Trial Court, Makati City, and the ESTATE OF FERDINAND E. MARCOS, through
its court appointed legal representatives in Class Action MDL 840, United States District
Court of Hawaii, namely: Imelda R. Marcos and Ferdinand Marcos, Jr., Respondents.
DECISION
TINGA, J.:
137 | C o n f l i c t o f L a w s C a s e s
Our martial law experience bore strange unwanted fruits, and we have yet to finish weeding out
its bitter crop. While the restoration of freedom and the fundamental structures and processes of
democracy have been much lauded, according to a significant number, the changes, however,
have not sufficiently healed the colossal damage wrought under the oppressive conditions of the
martial law period. The cries of justice for the tortured, the murdered, and
the desaparecidos arouse outrage and sympathy in the hearts of the fair-minded, yet the
dispensation of the appropriate relief due them cannot be extended through the same caprice or
whim that characterized the ill-wind of martial rule. The damage done was not merely personal
but institutional, and the proper rebuke to the iniquitous past has to involve the award of
reparations due within the confines of the restored rule of law.
The petitioners in this case are prominent victims of human rights violations 1 who, deprived of
the opportunity to directly confront the man who once held absolute rule over this country, have
chosen to do battle instead with the earthly representative, his estate. The clash has been for
now interrupted by a trial court ruling, seemingly comported to legal logic, that required the
petitioners to pay a whopping filing fee of over Four Hundred Seventy-Two Million Pesos
(P472,000,000.00) in order that they be able to enforce a judgment awarded them by a foreign
court. There is an understandable temptation to cast the struggle within the simplistic confines
of a morality tale, and to employ short-cuts to arrive at what might seem the desirable solution.
But easy, reflexive resort to the equity principle all too often leads to a result that may be morally
correct, but legally wrong.
Nonetheless, the application of the legal principles involved in this case will comfort those who
maintain that our substantive and procedural laws, for all their perceived ambiguity and
susceptibility to myriad interpretations, are inherently fair and just. The relief sought by the
petitioners is expressly mandated by our laws and conforms to established legal principles. The
granting of this petition for certiorari is warranted in order to correct the legally infirm and
unabashedly unjust ruling of the respondent judge.
The essential facts bear little elaboration. On 9 May 1991, a complaint was filed with the United
States District Court (US District Court), District of Hawaii, against the Estate of former Philippine
President Ferdinand E. Marcos (Marcos Estate). The action was brought forth by ten Filipino
citizens2 who each alleged having suffered human rights abuses such as arbitrary detention,
torture and rape in the hands of police or military forces during the Marcos regime. 3 The Alien
Tort Act was invoked as basis for the US District Court's jurisdiction over the complaint, as it
involved a suit by aliens for tortious violations of international law.4 These plaintiffs brought the
action on their own behalf and on behalf of a class of similarly situated individuals, particularly
consisting of all current civilian citizens of the Philippines, their heirs and beneficiaries, who
between 1972 and 1987 were tortured, summarily executed or had disappeared while in the
custody of military or paramilitary groups. Plaintiffs alleged that the class consisted of
approximately ten thousand (10,000) members; hence, joinder of all these persons was
impracticable.
The institution of a class action suit was warranted under Rule 23(a) and (b)(1)(B) of the US
Federal Rules of Civil Procedure, the provisions of which were invoked by the plaintiffs.
Subsequently, the US District Court certified the case as a class action and created three (3)
sub-classes of torture, summary execution and disappearance victims.5Trial ensued, and
subsequently a jury rendered a verdict and an award of compensatory and exemplary damages
in favor of the plaintiff class. Then, on 3 February 1995, the US District Court, presided by
Judge Manuel L. Real, rendered a Final Judgment (Final Judgment) awarding the plaintiff class
a total of One Billion Nine Hundred Sixty Four Million Five Thousand Eight Hundred Fifty Nine
Dollars and Ninety Cents ($1,964,005,859.90). The Final Judgment was eventually affirmed by The Commission on Human Rights (CHR) was permitted to intervene in this case. 12 It urged that
the US Court of Appeals for the Ninth Circuit, in a decision rendered on 17 December 1996. 6 the petition be granted and a judgment rendered, ordering the enforcement and execution of the
District Court judgment in accordance with Section 48, Rule 39 of the 1997 Rules of Civil
Procedure. For the CHR, the Makati RTC erred in interpreting the action for the execution of a
On 20 May 1997, the present petitioners filed Complaint with the Regional Trial Court, City of
foreign judgment as a new case, in violation of the principle that once a case has been decided
Makati (Makati RTC) for the enforcement of the Final Judgment. They alleged that they are
between the same parties in one country on the same issue with finality, it can no longer be
members of the plaintiff class in whose favor the US District Court awarded damages.7 They
relitigated again in another country.13 The CHR likewise invokes the principle of comity, and of
argued that since the Marcos Estate failed to file a petition for certiorari with the US Supreme
vested rights.
Court after the Ninth Circuit Court of Appeals had affirmed the Final Judgment, the decision of
the US District Court had become final and executory, and hence should be recognized and
enforced in the Philippines, pursuant to Section 50, Rule 39 of the Rules of Court then in force.8 The Court's disposition on the issue of filing fees will prove a useful jurisprudential guidepost for
courts confronted with actions enforcing foreign judgments, particularly those lodged against an
estate. There is no basis for the issuance a limited pro hac vice ruling based on the special
On 5 February 1998, the Marcos Estate filed a motion to dismiss, raising, among others, the
circumstances of the petitioners as victims of martial law, or on the emotionally-charged
non-payment of the correct filing fees. It alleged that petitioners had only paid Four Hundred
allegation of human rights abuses.
Ten Pesos (P410.00) as docket and filing fees, notwithstanding the fact that they sought to
enforce a monetary amount of damages in the amount of over Two and a Quarter Billion US
Dollars (US$2.25 Billion). The Marcos Estate cited Supreme Court Circular No. 7, pertaining to An examination of Rule 141 of the Rules of Court readily evinces that the respondent judge
the proper computation and payment of docket fees. In response, the petitioners claimed that ignored the clear letter of the law when he concluded that the filing fee be computed based on
an action for the enforcement of a foreign judgment is not capable of pecuniary estimation; the total sum claimed or the stated value of the property in litigation.
hence, a filing fee of only Four Hundred Ten Pesos (P410.00) was proper, pursuant to Section
7(c) of Rule 141.9
In dismissing the complaint, the respondent judge relied on Section 7(a), Rule 141 as basis for
the computation of the filing fee of over P472 Million. The provision states:
On 9 September 1998, respondent Judge Santiago Javier Ranada10 of the Makati RTC issued
the subject Orderdismissing the complaint without prejudice. Respondent judge opined that
SEC. 7. Clerk of Regional Trial Court.-
contrary to the petitioners' submission, the subject matter of the complaint was indeed capable
of pecuniary estimation, as it involved a judgment rendered by a foreign court ordering the
payment of definite sums of money, allowing for easy determination of the value of the foreign (a) For filing an action or a permissive counterclaim or money claim
judgment. On that score, Section 7(a) of Rule 141 of the Rules of Civil Procedure would find against an estate not based on judgment, or for filing with leave of court
application, and the RTC estimated the proper amount of filing fees was approximately Four a third-party, fourth-party, etc., complaint, or a complaint in intervention, and
Hundred Seventy Two Million Pesos, which obviously had not been paid. for all clerical services in the same time, if the total sum claimed, exclusive
of interest, or the started value of the property in litigation, is:
Not surprisingly, petitioners filed a Motion for Reconsideration, which Judge Ranada denied in
an Order dated 28 July 1999. From this denial, petitioners filed a Petition for Certiorari under
Rule 65 assailing the twin orders of respondent judge.11 They prayed for the annulment of the 1. Less than P 100,00.00
questioned orders, and an order directing the reinstatement of Civil Case No. 97-1052 and the
conduct of appropriate proceedings thereon. 2. P 100,000.00 or more but less than P 150,000.00

3. P 150,000.00 or more but less than P 200,000.00

Petitioners submit that their action is incapable of pecuniary estimation as the subject matter of
the suit is the enforcement of a foreign judgment, and not an action for the collection of a sum of
4. P 200,000.00 or more but less than P 250,000.00
money or recovery of damages. They also point out that to require the class plaintiffs to pay
Four Hundred Seventy Two Million Pesos (P472,000,000.00) in filing fees would negate and
render inutile the liberal construction ordained by the Rules of Court, as required by Section 6, 5. P 250,000.00 or more but less than P 300,00.00
Rule 1 of the Rules of Civil Procedure, particularly the inexpensive disposition of every action.
6. P 300,000.00 or more but not more than P 400,000.00
Petitioners invoke Section 11, Article III of the Bill of Rights of the Constitution, which provides 7. P 350,000.00 or more but not more than P400,000.00
that "Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not
be denied to any person by reason of poverty," a mandate which is essentially defeated by the
required exorbitant filing fee. The adjudicated amount of the filing fee, as arrived at by the RTC, 8. For each P 1,000.00 in excess of P 400,000.00
was characterized as indisputably unfair, inequitable, and unjust.
(Emphasis supplied)

138 | C o n f l i c t o f L a w s C a s e s
Obviously, the above-quoted provision covers, on one hand, ordinary actions, permissive
counterclaims, third-party, etc. complaints and complaints-in-interventions, and on the other,
money claims against estates which are not based on judgment. Thus, the relevant question for
purposes of the present petition is whether the action filed with the lower court is a "money claim
against an estate not based on judgment."
Petitioners' complaint may have been lodged against an estate, but it is clearly based on a
judgment, the Final Judgment of the US District Court. The provision does not make any
distinction between a local judgment and a foreign judgment, and where the law does not
distinguish, we shall not distinguish.
A reading of Section 7 in its entirety reveals several instances wherein the filing fee is computed
on the basis of the amount of the relief sought, or on the value of the property in litigation. The
filing fee for requests for extrajudicial foreclosure of mortgage is based on the amount of
indebtedness or the mortgagee's claim.14 In special proceedings involving properties such as for
the allowance of wills, the filing fee is again based on the value of the property. 15 The aforecited
rules evidently have no application to petitioners' complaint.
Petitioners rely on Section 7(b), particularly the proviso on actions where the value of the subject
matter cannot be estimated. The provision reads in full:
SEC. 7. Clerk of Regional Trial Court.-
(b) For filing
1. Actions where the value
of the subject matter
It is worth noting that the provision also provides that in real actions, the assessed value or
estimated value of the property shall be alleged by the claimant and shall be the basis in
computing the fees. Yet again, this provision does not apply in the case at bar. A real action is
one where the plaintiff seeks the recovery of real property or an action affecting title to or
recovery of possession of real property.16 Neither the complaint nor the award of damages
adjudicated by the US District Court involves any real property of the Marcos Estate.
Thus, respondent judge was in clear and serious error when he concluded that the filing fees
should be computed on the basis of the schematic table of Section 7(a), as the action involved
pertains to a claim against an estate based on judgment. What provision, if any, then should
apply in determining the filing fees for an action to enforce a foreign judgment?
To resolve this question, a proper understanding is required on the nature and effects of a
foreign judgment in this jurisdiction.
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.17 This principle was prominently affirmed in the leading American case of Hilton v.
Guyot18 and expressly recognized in our jurisprudence beginning with Ingenholl v. Walter E.
Olsen & Co.19 The conditions required by the Philippines for recognition and enforcement of a
foreign judgment were originally contained in Section 311 of the Code of Civil Procedure, which
was taken from the California Code of Civil Procedure which, in turn, was derived from the
California Act of March 11, 1872.20 Remarkably, the procedural rule now outlined in Section 48,
Rule 39 of the Rules of Civil Procedure has remained unchanged down to the last word in nearly
a century. Section 48 states:
SEC. 48. Effect of foreign judgments. — The effect of a judgment of a tribunal of
a foreign country, having jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive

cannot be estimated --- P 600.00 upon the title to the thing;

2. Special civil actions except

(b) In case of a judgment against a person, the judgment is presumptive
evidence of a right as between the parties and their successors in interest
judicial foreclosure which by a subsequent title;

shall be governed by In either case, the judgment or final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
paragraph (a) above --- P 600.00
There is an evident distinction between a foreign judgment in an action in rem and one in
personam. For an action in rem, the foreign judgment is deemed conclusive upon the title to the
3. All other actions not thing, while in an action in personam, the foreign judgment is presumptive, and not conclusive,
of a right as between the parties and their successors in interest by a subsequent
involving property --- P 600.00 title.21 However, in both cases, the foreign judgment is susceptible to impeachment in our local
courts on the grounds of want of jurisdiction or notice to the party,22 collusion, fraud,23 or clear
mistake of law or fact.24 Thus, the party aggrieved by the foreign judgment is entitled to defend
In a real action, the assessed value of the property, or if there is none, the estimated value, against the enforcement of such decision in the local forum. It is essential that there should be
thereof shall be alleged by the claimant and shall be the basis in computing the fees.

139 | C o n f l i c t o f L a w s C a s e s
an opportunity to challenge the foreign judgment, in order for the court in this jurisdiction to
properly determine its efficacy.25
It is clear then that it is usually necessary for an action to be filed in order to enforce a foreign
judgment26 , even if such judgment has conclusive effect as in the case of in rem actions, if only
for the purpose of allowing the losing party an opportunity to challenge the foreign judgment, and
in order for the court to properly determine its efficacy.27Consequently, the party attacking a
foreign judgment has the burden of overcoming the presumption of its validity. 28
The rules are silent as to what initiatory procedure must be undertaken in order to enforce a
foreign judgment in the Philippines. But there is no question that the filing of a civil complaint is
an appropriate measure for such purpose. A civil action is one by which a party sues another for
the enforcement or protection of a right,29 and clearly an action to enforce a foreign judgment is
in essence a vindication of a right prescinding either from a "conclusive judgment upon title" or
the "presumptive evidence of a right."30 Absent perhaps a statutory grant of jurisdiction to a
quasi-judicial body, the claim for enforcement of judgment must be brought before the regular
courts.31
There are distinctions, nuanced but discernible, between the cause of action arising from the
enforcement of a foreign judgment, and that arising from the facts or allegations that occasioned
the foreign judgment. They may pertain to the same set of facts, but there is an essential
difference in the right-duty correlatives that are sought to be vindicated. For example, in a
complaint for damages against a tortfeasor, the cause of action emanates from the violation of
the right of the complainant through the act or omission of the respondent. On the other hand, in
a complaint for the enforcement of a foreign judgment awarding damages from the same
tortfeasor, for the violation of the same right through the same manner of action, the cause of
action derives not from the tortious act but from the foreign judgment itself.
More importantly, the matters for proof are different. Using the above example, the complainant
will have to establish before the court the tortious act or omission committed by the tortfeasor,
who in turn is allowed to rebut these factual allegations or prove extenuating
circumstances. Extensive litigation is thus conducted on the facts, and from there the right to
and amount of damages are assessed. On the other hand, in an action to enforce a foreign
judgment, the matter left for proof is the foreign judgment itself, and not the facts from which it
prescinds.
As stated in Section 48, Rule 39, the actionable issues are generally restricted to a review of
jurisdiction of the foreign court, the service of personal notice, collusion, fraud, or mistake of fact
or law. The limitations on review is in consonance with a strong and pervasive policy in all legal
systems to limit repetitive litigation on claims and issues.32Otherwise known as the policy of
preclusion, it seeks to protect party expectations resulting from previous litigation, to safeguard
against the harassment of defendants, to insure that the task of courts not be increased by
never-ending litigation of the same disputes, and – in a larger sense – to promote what Lord
Coke in the Ferrer's Case of 1599 stated to be the goal of all law: "rest and quietness."33 If every
judgment of a foreign court were reviewable on the merits, the plaintiff would be forced back on
his/her original cause of action, rendering immaterial the previously concluded litigation.34
Petitioners appreciate this distinction, and rely upon it to support the proposition that the subject
matter of the complaintthe enforcement of a foreign judgmentis incapable of pecuniary
estimation. Admittedly the proposition, as it applies in this case, is counter-intuitive, and thus
140 | C o n f l i c t o f L a w s C a s e s
deserves strict scrutiny. For in all practical intents and purposes, the matter at hand is capable of
pecuniary estimation, down to the last cent. In the assailed Order, the respondent judge
pounced upon this point without equivocation:
The Rules use the term "where the value of the subject matter cannot be estimated."
The subject matter of the present case is the judgment rendered by the foreign court
ordering defendant to pay plaintiffs definite sums of money, as and for compensatory
damages. The Court finds that the value of the foreign judgment can be estimated;
indeed, it can even be easily determined. The Court is not minded to distinguish
between the enforcement of a judgment and the amount of said judgment, and
separate the two, for purposes of determining the correct filing fees. Similarly, a
plaintiff suing on promissory note for P1 million cannot be allowed to pay only P400
filing fees (sic), on the reasoning that the subject matter of his suit is not the P1
million, but the enforcement of the promissory note, and that the value of such
"enforcement" cannot be estimated.35
The jurisprudential standard in gauging whether the subject matter of an action is capable of
pecuniary estimation is well-entrenched. The Marcos Estate cites Singsong v. Isabela Sawmill
and Raymundo v. Court of Appeals, which ruled:
[I]n determining whether an action is one the subject matter of which is not capable of
pecuniary estimation this Court has adopted the criterion of first ascertaining the
nature of the principal action or remedy sought. If it is primarily for the recovery of a
sum of money, the claim is considered capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the courts of first instance would depend on
the amount of the claim. However, where the basic issue is something other than the
right to recover a sum of money, where the money claim is purely incidental to, or a
consequence of, the principal relief sought, this Court has considered such actions as
cases where the subject of the litigation may not be estimated in terms of money, and
are cognizable exclusively by courts of first instance (now Regional Trial Courts).
On the other hand, petitioners cite the ponencia of Justice JBL Reyes in Lapitan v.
Scandia,36 from which the rule in Singsong and Raymundo actually derives, but which
incorporates this additional nuance omitted in the latter cases:
xxx However, where the basic issue is something other than the right to recover a sum
of money, where the money claim is purely incidental to, or a consequence of, the
principal relief sought, like in suits to have the defendant perform his part of the
contract (specific performance) and in actions for support, or for annulment of
judgment or to foreclose a mortgage, this Court has considered such actions as
cases where the subject of the litigation may not be estimated in terms of money, and
are cognizable exclusively by courts of first instance.37
Petitioners go on to add that among the actions the Court has recognized as being incapable of
pecuniary estimation include legality of conveyances and money deposits,38 validity of a
mortgage,39 the right to support,40validity of documents,41 rescission of contracts,42 specific
performance,43 and validity or annulment of judgments.44 It is urged that an action for
enforcement of a foreign judgment belongs to the same class.
This is an intriguing argument, but ultimately it is self-evident that while the subject matter of the
action is undoubtedly the enforcement of a foreign judgment, the effect of a providential award
would be the adjudication of a sum of money. Perhaps in theory, such an action is primarily for
"the enforcement of the foreign judgment," but there is a certain obtuseness to that sort of
argument since there is no denying that the enforcement of the foreign judgment will necessarily
result in the award of a definite sum of money.
But before we insist upon this conclusion past beyond the point of reckoning, we must examine
its possible ramifications. Petitioners raise the point that a declaration that an action for
enforcement of foreign judgment may be capable of pecuniary estimation might lead to an
instance wherein a first level court such as the Municipal Trial Court would have jurisdiction to
enforce a foreign judgment. But under the statute defining the jurisdiction of first level courts,
B.P. 129, such courts are not vested with jurisdiction over actions for the enforcement of foreign
judgments.
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in civil cases. — Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate
and intestate, including the grant of provisional remedies in proper cases, where the
value of the personal property, estate, or amount of the demand does not exceed One
hundred thousand pesos (P100,000.00) or, in Metro Manila where such personal
property, estate, or amount of the demand does not exceed Two hundred thousand
pesos (P200,000.00) exclusive of interest damages of whatever kind, attorney's fees,
litigation expenses, and costs, the amount of which must be specifically alleged:
Provided, That where there are several claims or causes of action between the same
or different parties, embodied in the same complaint, the amount of the demand shall
be the totality of the claims in all the causes of action, irrespective of whether the
causes of action arose out of the same or different transactions;
(2) Exclusive original jurisdiction over cases of forcible entry and unlawful
detainer: Provided, That when, in such cases, the defendant raises the question of
ownership in his pleadings and the question of possession cannot be resolved without
deciding the issue of ownership, the issue of ownership shall be resolved only to
determine the issue of possession.
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceed Fifty thousand
pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses and costs: Provided, That value of such property shall be
determined by the assessed value of the adjacent lots.45
Section 33 of B.P. 129 refers to instances wherein the cause of action or subject matter pertains
to an assertion of rights and interests over property or a sum of money. But as earlier pointed
out, the subject matter of an action to enforce a foreign judgment is the foreign judgment itself,
and the cause of action arising from the adjudication of such judgment.
141 | C o n f l i c t o f L a w s C a s e s
An examination of Section 19(6), B.P. 129 reveals that the instant complaint for enforcement of a
foreign judgment, even if capable of pecuniary estimation, would fall under the jurisdiction of the
Regional Trial Courts, thus negating the fears of the petitioners. Indeed, an examination of the
provision indicates that it can be relied upon as jurisdictional basis with respect to actions for
enforcement of foreign judgments, provided that no other court or office is vested jurisdiction
over such complaint:
Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive
original jurisdiction:
xxx
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
body exercising jurisdiction or any court, tribunal, person or body exercising judicial or
quasi-judicial functions.
Thus, we are comfortable in asserting the obvious, that the complaint to enforce the US District
Court judgment is one capable of pecuniary estimation. But at the same time, it is also an action
based on judgment against an estate, thus placing it beyond the ambit of Section 7(a) of Rule
141. What provision then governs the proper computation of the filing fees over the instant
complaint? For this case and other similarly situated instances, we find that it is covered by
Section 7(b)(3), involving as it does, "other actions not involving property."
Notably, the amount paid as docket fees by the petitioners on the premise that it was an action
incapable of pecuniary estimation corresponds to the same amount required for "other actions
not involving property." The petitioners thus paid the correct amount of filing fees, and it was a
grave abuse of discretion for respondent judge to have applied instead a clearly inapplicable rule
and dismissed the complaint.
There is another consideration of supreme relevance in this case, one which should disabuse
the notion that the doctrine affirmed in this decision is grounded solely on the letter of the
procedural rule. We earlier adverted to the the internationally recognized policy of
preclusion,46 as well as the principles of comity, utility and convenience of nations 47 as the basis
for the evolution of the rule calling for the recognition and enforcement of foreign judgments. The
US Supreme Court in Hilton v. Guyot48 relied heavily on the concept of comity, as especially
derived from the landmark treatise of Justice Story in his Commentaries on the Conflict of Laws
of 1834.49 Yet the notion of "comity" has since been criticized as one "of dim contours" 50 or
suffering from a number of fallacies.51 Other conceptual bases for the recognition of foreign
judgments have evolved such as the vested rights theory or the modern doctrine of obligation.52
There have been attempts to codify through treaties or multilateral agreements the standards for
the recognition and enforcement of foreign judgments, but these have not borne fruition. The
members of the European Common Market accede to the Judgments Convention, signed in
1978, which eliminates as to participating countries all of such obstacles to recognition such as
reciprocity and révision au fond.53 The most ambitious of these attempts is the Convention on the
Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, prepared
in 1966 by the Hague Conference of International Law.54 While it has not received the
ratifications needed to have it take effect,55 it is recognized as representing current scholarly
thought on the topic.56 Neither the Philippines nor the United States are signatories to the
Convention.
Yet even if there is no unanimity as to the applicable theory behind the recognition and
enforcement of foreign judgments or a universal treaty rendering it obligatory force, there is
consensus that the viability of such recognition and enforcement is essential. Steiner and Vagts
note:
. . . The notion of unconnected bodies of national law on private international law,
each following a quite separate path, is not one conducive to the growth of a
transnational community encouraging travel and commerce among its members.
There is a contemporary resurgence of writing stressing the identity or similarity of the
values that systems of public and private international law seek to further – a
community interest in common, or at least reasonable, rules on these matters in
national legal systems. And such generic principles as reciprocity play an important
role in both fields.57
Salonga, whose treatise on private international law is of worldwide renown, points out:
Whatever be the theory as to the basis for recognizing foreign judgments, there can
be little dispute that the end is to protect the reasonable expectations and demands of
the parties. Where the parties have submitted a matter for adjudication in the court of
one state, and proceedings there are not tainted with irregularity, they may fairly be
expected to submit, within the state or elsewhere, to the enforcement of the judgment
issued by the court.58
There is also consensus as to the requisites for recognition of a foreign judgment and the
defenses against the enforcement thereof. As earlier discussed, the exceptions enumerated in
Section 48, Rule 39 have remain unchanged since the time they were adapted in this jurisdiction
from long standing American rules. The requisites and exceptions as delineated under Section
48 are but a restatement of generally accepted principles of international law. Section 98 of The
Restatement, Second, Conflict of Laws, states that "a valid judgment rendered in a foreign
nation after a fair trial in a contested proceeding will be recognized in the United States," and on
its face, the term "valid" brings into play requirements such notions as valid jurisdiction over the
subject matter and parties.59Similarly, the notion that fraud or collusion may preclude the
enforcement of a foreign judgment finds affirmation with foreign jurisprudence and
commentators,60 as well as the doctrine that the foreign judgment must not constitute "a clear
mistake of law or fact."61 And finally, it has been recognized that "public policy" as a defense to
the recognition of judgments serves as an umbrella for a variety of concerns in international
practice which may lead to a denial of recognition.62
The viability of the public policy defense against the enforcement of a foreign judgment has been
recognized in this jurisdiction.63 This defense allows for the application of local standards in
reviewing the foreign judgment, especially when such judgment creates only a presumptive right,
as it does in cases wherein the judgment is against a person. 64 The defense is also recognized
within the international sphere, as many civil law nations adhere to a broad public policy
exception which may result in a denial of recognition when the foreign court, in the light of the
choice-of-law rules of the recognizing court, applied the wrong law to the case. 65 The public
policy defense can safeguard against possible abuses to the easy resort to offshore litigation if it
can be demonstrated that the original claim is noxious to our constitutional values.
There is no obligatory rule derived from treaties or conventions that requires the Philippines to
recognize foreign judgments, or allow a procedure for the enforcement thereof. However,
generally accepted principles of international law, by virtue of the incorporation clause of the
142 | C o n f l i c t o f L a w s C a s e s
Constitution, form part of the laws of the land even if they do not derive from treaty
obligations.66 The classical formulation in international law sees those customary rules accepted
as binding result from the combination two elements: the established, widespread, and
consistent practice on the part of States; and a psychological element known as the opinion juris
sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief that the
practice in question is rendered obligatory by the existence of a rule of law requiring it. 67
While the definite conceptual parameters of the recognition and enforcement of foreign
judgments have not been authoritatively established, the Court can assert with certainty that
such an undertaking is among those generally accepted principles of international law. 68 As
earlier demonstrated, there is a widespread practice among states accepting in principle the
need for such recognition and enforcement, albeit subject to limitations of varying degrees. The
fact that there is no binding universal treaty governing the practice is not indicative of a
widespread rejection of the principle, but only a disagreement as to the imposable specific rules
governing the procedure for recognition and enforcement.
Aside from the widespread practice, it is indubitable that the procedure for recognition and
enforcement is embodied in the rules of law, whether statutory or jurisprudential, adopted in
various foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48, Rule 39
of the Rules of Court which has existed in its current form since the early 1900s. Certainly, the
Philippine legal system has long ago accepted into its jurisprudence and procedural rules the
viability of an action for enforcement of foreign judgment, as well as the requisites for such valid
enforcement, as derived from internationally accepted doctrines. Again, there may be
distinctions as to the rules adopted by each particular state,69 but they all prescind from the
premise that there is a rule of law obliging states to allow for, however generally, the recognition
and enforcement of a foreign judgment. The bare principle, to our mind, has attained the status
of opinio juris in international practice.
This is a significant proposition, as it acknowledges that the procedure and requisites outlined in
Section 48, Rule 39 derive their efficacy not merely from the procedural rule, but by virtue of the
incorporation clause of the Constitution. Rules of procedure are promulgated by the Supreme
Court,70 and could very well be abrogated or revised by the high court itself. Yet the Supreme
Court is obliged, as are all State components, to obey the laws of the land, including generally
accepted principles of international law which form part thereof, such as those ensuring the
qualified recognition and enforcement of foreign judgments.71
Thus, relative to the enforcement of foreign judgments in the Philippines, it emerges that there is
a general right recognized within our body of laws, and affirmed by the Constitution, to seek
recognition and enforcement of foreign judgments, as well as a right to defend against such
enforcement on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud,
or clear mistake of law or fact.
The preclusion of an action for enforcement of a foreign judgment in this country merely due to
an exhorbitant assessment of docket fees is alien to generally accepted practices and principles
in international law. Indeed, there are grave concerns in conditioning the amount of the filing fee
on the pecuniary award or the value of the property subject of the foreign decision. Such
pecuniary award will almost certainly be in foreign denomination, computed in accordance with
the applicable laws and standards of the forum.72 The vagaries of inflation, as well as the relative
low-income capacity of the Filipino, to date may very well translate into an award virtually
unenforceable in this country, despite its integral validity, if the docket fees for the enforcement
thereof were predicated on the amount of the award sought to be enforced. The theory adopted
by respondent judge and the Marcos Estate may even lead to absurdities, such as if applied to
an award involving real property situated in places such as the United States or Scandinavia
where real property values are inexorably high. We cannot very well require that the filing fee be
computed based on the value of the foreign property as determined by the standards of the
country where it is located.
As crafted, Rule 141 of the Rules of Civil Procedure avoids unreasonableness, as it recognizes
that the subject matter of an action for enforcement of a foreign judgment is the foreign judgment
itself, and not the right-duty correlatives that resulted in the foreign judgment. In this particular
circumstance, given that the complaint is lodged against an estate and is based on the US
District Court's Final Judgment, this foreign judgment may, for purposes of classification under
the governing procedural rule, be deemed as subsumed under Section 7(b)(3) of Rule 141, i.e.,
within the class of "all other actions not involving property." Thus, only the blanket filing fee of
minimal amount is required.
Finally, petitioners also invoke Section 11, Article III of the Constitution, which states that "[F]ree
access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied
to any person by reason of poverty." Since the provision is among the guarantees ensured by
the Bill of Rights, it certainly gives rise to a demandable right. However, now is not the occasion
to elaborate on the parameters of this constitutional right. Given our preceding discussion, it is
not necessary to utilize this provision in order to grant the relief sought by the petitioners. It is
axiomatic that the constitutionality of an act will not be resolved by the courts if the controversy
can be settled on other grounds73 or unless the resolution thereof is indispensable for the
determination of the case.74
One more word. It bears noting that Section 48, Rule 39 acknowledges that the Final
Judgment is not conclusive yet, but presumptive evidence of a right of the petitioners against the
Marcos Estate. Moreover, the Marcos Estate is not precluded to present evidence, if any, of
want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
This ruling, decisive as it is on the question of filing fees and no other, does not render verdict on
the enforceability of the Final Judgment before the courts under the jurisdiction of the
Philippines, or for that matter any other issue which may legitimately be presented before the
trial court. Such issues are to be litigated before the trial court, but within the confines of the
matters for proof as laid down in Section 48, Rule 39. On the other hand, the speedy resolution
of this claim by the trial court is encouraged, and contumacious delay of the decision on the
merits will not be brooked by this Court.
WHEREFORE, the petition is GRANTED. The assailed orders are NULLIFIED and SET ASIDE,
and a new order REINSTATING Civil Case No. 97-1052 is hereby issued. No costs.
SO ORDERED.
Pennoyer v. Neff
95 U.S. 714
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES
FOR THE DISTRICT OF OREGON
143 | C o n f l i c t o f L a w s C a s e s
Syllabus
1. A statute of Oregon, after providing for service of summons upon parties or their
representatives, personally or at their residence, declares that, when service cannot be thus
made, and the defendant, after due diligence, cannot be found within the State, and
"that fact appears, by affidavit, to the satisfaction of the court or judge thereof, and it, in like
manner, appears that a cause of action exists against the defendant, or that he is a proper party
to an action relating to real property in the State, such court or judge may grant an order that the
service be made by publication of summons . . . when the defendant is not a resident of the
State, but has property therein, and the court has jurisdiction of the subject of the action,"
-- the order to designate a newspaper of the county where the action is commenced in which the
publication shall be made -- and that proof of such publication shall be "the affidavit of the
printer, or his foreman, or his principal clerk."
Held, that defects in the affidavit for the order can only be taken advantage of on appeal, or by
some other direct proceeding, and cannot be urged to impeach the judgment collaterally, and
that the provision as to proof of the publication is satisfied when the affidavit is made by the
editor of the paper.
2. A personal judgment is without any validity if it be rendered by a State court in an action upon
a money demand against a nonresident of the State who was served by a publication of
summons, but upon whom no personal service of process within the State was made, and who
did not appear; and no title to property passes by a sale under an execution issued upon such a
judgment.
3. The State, having within her territory property of a nonresident, may hold and appropriate it to
satisfy the claims of her citizens against him, and her tribunals may inquire into his obligations to
the extent necessary to control the disposition of that property. If he has no property in the State,
there is nothing upon which her tribunals can adjudicate.
4. Substituted service by publication, or in any other authorized form, is sufficient to inform a
nonresident of the object of proceedings taken where
Page 95 U. S. 715
property is once brought under the control of the court by seizure or some equivalent act, but
where the suit is brought to determine his personal rights and obligations, that is, where it is
merely in personam, such service upon him is ineffectual for any purpose.
5. Process from the tribunals of one State cannot run into another State and summon a party
there domiciled to respond to proceedings against him, and publication of process or of notice
within the State in which the tribunal sits cannot create any greater obligation upon him to
appear. Process sent to him out of the State, and process published within it, are equally
unavailing in proceedings to establish his personal liability.
6. Except in cases affecting the personal status of the plaintiff, and in those wherein that mode of
service may be considered to have been assented to in advance, the substituted service of
process by publication allowed by the law of Oregon and by similar laws in other States where
actions are brought against nonresidents is effectual only where, in connection with process
against the person for commencing the action, property in the State is brought under the control
of the court and subjected to its disposition by process adapted to that purpose, or where the
judgment is sought as a means of reaching such property or affecting some interest therein; in
other words, where the action is in the nature of a proceeding in rem.
7. Whilst the courts of the United States are not foreign tribunals in their relations to the State
courts, they are tribunals of a different sovereignty, and are bound to give a judgment of a State
court only the same faith and credit to which it is entitled in the courts of another State.
8. The term "due process of law," when applied to judicial proceedings, means a course of legal
proceedings according to those rules and principles which have been established by our
jurisprudence for the protection and enforcement of private rights. To give such proceedings any
validity, there must be a competent tribunal to pass upon their subject matter, and if that involves
merely a determination of the personal liability of the defendant, he must be brought within its
jurisdiction by service of process within the State, or by his voluntary appearance.
This action was brought by Neff against Pennoyer for the recovery of a tract of land situated in
Multnomah County, Oregon. Pennoyer, in his answer, denied Neff's title and right to possession,
and set up a title in himself.
By consent of parties, and in pursuance of their written stipulation filed in the case, the cause
was tried by the court, and a special verdict given, upon which judgment was rendered in favor
of Neff; whereupon Pennoyer sued out this writ of error.
The parties respectively claimed title as follows: Neff under a patent issued to him by the United
States, March 19,
Page 95 U. S. 716
1866; and Pennoyer by virtue of a sale made by the sheriff of said county, under an execution
sued out upon a judgment against Neff, rendered Feb. 19, 1866, by the Circuit Court for said
county, in an action wherein he was defendant and J. H. Mitchell was plaintiff. Neff was then a
nonresident of Oregon.
In Mitchell v. Neff, jurisdiction of Neff was obtained by service of summons by publication.
Pennoyer offered in evidence duly certified copies of the complaint, summons, order for
publication of summons, affidavit of service by publication, and the judgment in that case, to the
introduction of which papers the plaintiff objected because, 1, said judgment is in personam, and
appears to have been given without the appearance of the defendant in the action or personal
service of the summons upon him, and while he was a nonresident of the State, and is,
therefore, void; 2, said judgment is not in rem, and therefore constitutes no basis of title in the
defendant; 3, said copies of complaint, &c., do not show jurisdiction to give the judgment
alleged, either in rem or personam; and, 4, it appears from said papers that no proof of service
by publication was ever made, the affidavit thereof being made by the "editor" of the "Pacific
144 | C o n f l i c t o f L a w s C a s e s
Christian Advocate," and not by "the printer, or his foreman or principal clerk." The court
admitted the evidence subject to the objections.
The finding of the court in regard to the facts bearing upon the asserted jurisdiction of the State
court is as follows: --
That, on Nov. 13, 1865, Mitchell applied to said Circuit Court, upon his own affidavit of that date,
for an order allowing the service of the summons in said action to be made upon Neff by
publication thereof, whereupon said court made said order, in the words following:
"Now, at this day, comes the plaintiff in his proper person, and by his attorneys, Mitchell and
Dolph, and files affidavit of plaintiff, and motion for an order of publication of summons, as
follows, to wit:"
"Now comes the plaintiff, by his attorneys, and upon the affidavit of plaintiff, herewith filed,
moves the court for an order of publication of summons against defendant, as required by law,
he being a nonresident;"
"and it appearing to the satisfaction of the court that the defendant cannot, after due diligence,
be
Page 95 U. S. 717
found in this State, and that he is a nonresident thereof, that his place of residence is unknown
to plaintiff, and cannot, with reasonable diligence, be ascertained by him, and that the plaintiff
has a cause of action of action against defendant, and that defendant has property in this county
and State, it is ordered and adjudged by the court that service of the summons in this action be
made by publication for six weeks successively in the 'Pacific Christian Advocate,' a weekly
newspaper published in Multnomah County, Oregon, and this action is continued for such
service."
That the affidavit of plaintiff, referred to in said order, is in the words following:
"I, J. H. Mitchell, being first duly sworn, say that the defendant, Marcus Neff, is a nonresident of
this State; that he resides somewhere in the State of California, at what place affiant knows not,
and he cannot be found in this State; that plaintiff has a just cause of action against defendant
for a money demand on account; that this court has jurisdiction of such action; that the
defendant has property in this county and State."
That the complaint in said action was verified and filed on Nov. 3, 1865, and contained facts
tending to prove that, at that date, said Mitchell had a cause of action against said Neff for
services as an attorney, performed "between Jan. 1, 1862, and May 15, 1863." That the entry of
judgment in said action contained the following averments:
"And it appearing to the court that the defendant was, at the time of the commencement of this
action, and ever since has been, a nonresident of this State; and it further appearing that he has
property in this State, and that defendant had notice of the pendency of this action by publication
of the summons for six successive weeks in the 'Pacific Christian Advocate,' a weekly
newspaper of general circulation published in Multnomah County, State of Oregon, the last issue
of which was more than twenty days before the first day of this term."
That the affidavit showing the publication of the summons in the "Advocate" aforesaid was made
as stated therein by the "editor" of that paper. That said complaint, summons, affidavit of Mitchell
and of the "editor" of the "Advocate" aforesaid, and entry of judgment, were in the judgment roll,
made up by the clerk in the case, but the order for publication of the summons aforesaid was not
placed in said roll
Page 95 U. S. 718
by said clerk, but remains on the files of said court; and that, when said court made said order
for publication, and gave said judgment against Neff, the only evidence it had before it to prove
the facts necessary to give it jurisdiction therefor, and particularly to authorize it to find and state
that Neff's residence was unknown to Mitchell, and could not, with reasonable diligence, be
ascertained by him, and that Neff had notice of the pendency of said action by the publication of
the summons as aforesaid, was, so far as appears by the said roll and the records and files of
the said court, the said complaint and affidavits of Mitchell and the editor of the "Advocate."
expiration of the time prescribed in the order for publication; and, if he does not, judgment may
be taken against him for want thereof. In case of personal service out of the State, the summons
shall specify the time prescribed in the order for publication."
"SECT. 57. The defendant against whom publication is ordered, or his personal representatives,
on application and sufficient cause shown, at any time before judgment, shall be allowed to
defend the action; and the defendant against whom publication is ordered, or his
representatives, may in like manner, upon good cause shown, and upon such terms as may be
proper, be allowed to defend after judgment, and within one year after the entry of such
judgment, on such terms as may be just; and, if the defence be successful, and the judgment or
any part thereof have been collected or otherwise enforced, such restitution may thereupon be
compelled as the court shall direct. But the title to property sold upon execution issued on such
judgment to a purchaser in good faith shall not be thereby affected."
"SECT. 60. Proof of the service of summons shall be, in case of publication, the affidavit of the
printer, or his foreman, or his principal clerk, showing the same."
MR. JUSTICE FIELD delivered the opinion of the court.

The statute of Oregon at the time of the commencement of the suit against Neff was as follows: - This is an action to recover the possession of a tract of land, of the alleged value of $15,000,
- situated in the State of Oregon. The plaintiff asserts title to the premises by a patent of the
United States issued to him in 1866, under the act of Congress of Sept. 27, 1850, usually known
as the Donation Law of Oregon. The defendant claims to have acquired the premises under a
"SECT. 55. When service of the summons cannot be made as prescribed in the last preceding
sheriff's deed, made upon a sale of the property on execution issued upon a judgment recovered
section, and the defendant, after due diligence, cannot be found within the State, and when that
against the plaintiff in one of the circuit courts of the State. The case turns upon the validity of
fact appears, by affidavit, to the satisfaction of the court or judge thereof, or justice in an action in
this judgment.
a justice's court, and it also appears that a cause of action exists against the defendant, or that
he is a proper party to an action relating to real property in this State, such court or judge or
justice may grant an order that the service be made by publication of summons in either of the It appears from the record that the judgment was rendered in February, 1866, in favor of J. H.
following cases: . . ." Mitchell, for less than $300, including costs, in an action brought by him upon a demand for
services as an attorney; that, at the time the action was commenced and the judgment rendered,
the defendant therein, the plaintiff here, was a nonresident of the State;
"3. When the defendant is not a resident of the State, but has property therein, and the court has
jurisdiction of the subject of the action."
Page 95 U. S. 720
"SECT. 56. The order shall direct the publication to be made in a newspaper published in the
county where the action is commenced, and, if no newspaper be published in the county, then in that he was not personally served with process, and did not appear therein; and that the
a newspaper to be designated as most likely to give notice to the person to be served, and for judgment was entered upon his default in not answering the complaint, upon a constructive
such length of time as may be deemed reasonable, not less than once a week for six weeks. In service of summons by publication.
case of publication, the court or judge shall also direct a copy of the summons and complaint to
be forthwith deposited in the post office, directed to the defendant, at his place of residence,
The Code of Oregon provides for such service when an action is brought against a nonresident
unless it shall appear that such residence is neither known to the party making the application,
and absent defendant who has property within the State. It also provides, where the action is for
nor can, with reasonable diligence, be ascertained by him. When publication is ordered,
the recovery of money or damages, for the attachment of the property of the nonresident. And it
personal service of a copy of the summons and complaint out of the State shall be equivalent to
also declares that no natural person is subject to the jurisdiction of a court of the State
publication and deposit in the post office. In either case, the defendant shall appear and answer
by the first day of the term following the
"unless he appear in the court, or be found within the State, or be a resident thereof, or have
property therein; and, in the last case, only to the extent of such property at the time the
Page 95 U. S. 719
jurisdiction attached."

145 | C o n f l i c t o f L a w s C a s e s
Construing this latter provision to mean that, in an action for money or damages where a
defendant does not appear in the court, and is not found within the State, and is not a resident
thereof, but has property therein, the jurisdiction of the court extends only over such property,
the declaration expresses a principle of general, if not universal, law. The authority of every
tribunal is necessarily restricted by the territorial limits of the State in which it is established. Any
attempt to exercise authority beyond those limits would be deemed in every other forum, as has
been said by this Court, an illegitimate assumption of power, and be resisted as mere
abuse. D'Arcy v. Ketchum et al., 11 How. 165. In the case against the plaintiff, the property here
in controversy sold under the judgment rendered was not attached, nor in any way brought
under the jurisdiction of the court. Its first connection with the case was caused by a levy of the
execution. It was not, therefore, disposed of pursuant to any adjudication, but only in
enforcement of a personal judgment, having no relation to the property, rendered against a
nonresident without service of process upon him in the action or his appearance therein. The
court below did not consider that an attachment of the property was essential to its jurisdiction or
to the validity of the sale, but held that the judgment was invalid from defects in the affidavit upon
which the order of publication was obtained and in the affidavit by which the publication was
proved.
Page 95 U. S. 721
There is some difference of opinion among the members of this Court as to the rulings upon
these alleged defects. The majority are of opinion that, inasmuch as the statute requires, for an
order of publication, that certain facts shall appear by affidavit to the satisfaction of the court or
judge, defects in such affidavit can only be taken advantage of on appeal, or by some other
direct proceeding, and cannot be urged to impeach the judgment collaterally. The majority of the
court are also of opinion that the provision of the statute requiring proof of the publication in a
newspaper to be made by the "affidavit of the printer, or his foreman, or his principal clerk" is
satisfied when the affidavit is made by the editor of the paper. The term "printer," in their
judgment, is there used not to indicate the person who sets up the type -- he does not usually
have a foreman or clerks -- it is rather used as synonymous with publisher. The Supreme Court
of New York so held in one case; observing that, for the purpose of making the required proof,
publishers were "within the spirit of the statute." Bunce v. Reed, 16 Barb. (N. Y.) 350. And,
following this ruling, the Supreme Court of California held that an affidavit made by a "publisher
and proprietor" was sufficient. Sharp v. Daugney, 33 Cal. 512. The term "editor," as used when
the statute of New York was passed, from which the Oregon law is borrowed, usually included
not only the person who wrote or selected the articles for publication, but the person who
published the paper and put it into circulation. Webster, in an early edition of his Dictionary,
gives as one of the definitions of an editor, a person "who superintends the publication of a
newspaper." It is principally since that time that the business of an editor has been separated
from that of a publisher and printer, and has become an independent profession.
If, therefore, we were confined to the rulings of the court below upon the defects in the affidavits
mentioned, we should be unable to uphold its decision. But it was also contended in that court,
and is insisted upon here, that the judgment in the State court against the plaintiff was void for
want of personal service of process on him, or of his appearance in the action in which it was
rendered and that the premises in controversy could not be subjected to the payment of the
demand
Page 95 U. S. 722
146 | C o n f l i c t o f L a w s C a s e s
of a resident creditor except by a proceeding in rem, that is, by a direct proceeding against the
property for that purpose. If these positions are sound, the ruling of the Circuit Court as to the
invalidity of that judgment must be sustained notwithstanding our dissent from the reasons upon
which it was made. And that they are sound would seem to follow from two well established
principles of public law respecting the jurisdiction of an independent State over persons and
property. The several States of the Union are not, it is true, in every respect independent, many
of the right and powers which originally belonged to them being now vested in the government
created by the Constitution. But, except as restrained and limited by that instrument, they
possess and exercise the authority of independent States, and the principles of public law to
which we have referred are applicable to them. One of these principles is that every State
possesses exclusive jurisdiction and sovereignty over persons and property within its territory.
As a consequence, every State has the power to determine for itself the civil status and
capacities of its inhabitants; to prescribe the subjects upon which they may contract, the forms
and solemnities with which their contracts shall be executed, the rights and obligations arising
from them, and the mode in which their validity shall be determined and their obligations
enforced; and also the regulate the manner and conditions upon which property situated within
such territory, both personal and real, may be acquired, enjoyed, and transferred. The other
principle of public law referred to follows from the one mentioned; that is, that no State can
exercise direct jurisdiction and authority over persons or property without its territory. Story,
Confl. Laws, c. 2; Wheat. Int. Law, pt. 2, c. 2. The several States are of equal dignity and
authority, and the independence of one implies the exclusion of power from all others. And so it
is laid down by jurists as an elementary principle that the laws of one State have no operation
outside of its territory except so far as is allowed by comity, and that no tribunal established by it
can extend its process beyond that territory so as to subject either persons or property to its
decisions. "Any exertion of authority of this sort beyond this limit," says Story, "is a mere nullity,
and incapable of binding
Page 95 U. S. 723
such persons or property in any other tribunals." Story, Confl.Laws, sect. 539.
But as contracts made in one State may be enforceable only in another State, and property may
be held by nonresidents, the exercise of the jurisdiction which every State is admitted to possess
over persons and property within its own territory will often affect persons and property without it.
To any influence exerted in this way by a State affecting persons resident or property situated
elsewhere, no objection can be justly taken; whilst any direct exertion of authority upon them, in
an attempt to give ex-territorial operation to its laws, or to enforce an ex-territorial jurisdiction by
its tribunals, would be deemed an encroachment upon the independence of the State in which
the persons are domiciled or the property is situated, and be resisted as usurpation.
Thus the State, through its tribunals, may compel persons domiciled within its limits to execute,
in pursuance of their contracts respecting property elsewhere situated, instruments in such form
and with such solemnities as to transfer the title, so far as such formalities can be complied with;
and the exercise of this jurisdiction in no manner interferes with the supreme control over the
property by the State within which it is situated. Penn v. Lord Baltimore, 1 Ves. 444; Massie v.
Watts, 6 Cranch 148; Watkins v. Holman, 16 Pet. 25; Corbett v. Nutt, 10 Wall. 464.
So the State, through its tribunals, may subject property situated within its limits owned by
nonresidents to the payment of the demand of its own citizens against them, and the exercise of
this jurisdiction in no respect infringes upon the sovereignty of the State where the owners are
domiciled. Every State owes protection to its own citizens, and, when nonresidents deal with
them, it is a legitimate and just exercise of authority to hold and appropriate any property owned
by such nonresidents to satisfy the claims of its citizens. It is in virtue of the State's jurisdiction
over the property of the nonresident situated within its limits that its tribunals can inquire into that
nonresident's obligations to its own citizens, and the inquiry can then be carried only to the
extent necessary to control the disposition of the property. If the nonresident
Page 95 U. S. 724
have no property in the State, there is nothing upon which the tribunals can adjudicate.
These views are not new. They have been frequently expressed, with more or less distinctness,
in opinions of eminent judges, and have been carried into adjudications in numerous cases.
Thus, in Picquet v. Swan, 5 Mas. 35, Mr. Justice Story said:--
"Where a party is within a territory, he may justly be subjected to its process, and bound
personally by the judgment pronounced on such process against him. Where he is not within
such territory, and is not personally subject to its laws, if, on account of his supposed or actual
property being within the territory, process by the local laws may, by attachment, go to compel
his appearance, and, for his default to appear, judgment may be pronounced against him, such
a judgment must, upon general principles, be deemed only to bind him to the extent of such
property, and cannot have the effect of a conclusive judgment in personam, for the plain reason,
that, except so far as the property is concerned, it is a judgment coram non judice."
And in Boswell's Lessee v. Otis, 9 How. 336, where the title of the plaintiff in ejectment was
acquired on a sheriff's sale under a money decree rendered upon publication of notice against
nonresidents, in a suit brought to enforce a contract relating to land, Mr. Justice McLean said:--
"Jurisdiction is acquired in one of two modes: first, as against the person of the defendant by the
service of process; or, secondly, by a procedure against the property of the defendant within the
jurisdiction of the court. In the latter case, the defendant is not personally bound by the judgment
beyond the property in question. And it is immaterial whether the proceeding against the
property be by an attachment or bill in chancery. It must be substantially a proceeding in rem."
These citations are not made as authoritative expositions of the law, for the language was
perhaps not essential to the decision of the cases in which it was used, but as expressions of the
opinion of eminent jurists. But in Cooper v. Reynolds,reported in the 10th of Wallace, it was
essential to the disposition of the case to declare the effect of a personal action against an
absent party, without the jurisdiction of the court, not served
Page 95 U. S. 725
with process or voluntarily submitting to the tribunal, when it was sought to subject his property
to the payment of a demand of a resident complainant; and, in the opinion there delivered, we
have a clear statement of the law as to the efficacy of such actions, and the jurisdiction of the
court over them. In that case, the action was for damages for alleged false imprisonment of the
plaintiff; and, upon his affidavit that the defendants had fled from the State, or had absconded or
concealed themselves so that the ordinary process of law could not reach them, a writ of
attachment was sued out against their property. Publication was ordered by the court, giving
notice to them to appear and plead, answer or demur, or that the action would be taken as
147 | C o n f l i c t o f L a w s C a s e s
confessed and proceeded in ex parte as to them. Publication was had, but they made default,
and judgment was entered against them, and the attached property was sold under it. The
purchaser having been put into possession of the property, the original owner brought ejectment
for its recovery. In considering the character of the proceeding, the Court, speaking through Mr.
Justice Miller, said:--
"Its essential purpose or nature is to establish, by the judgment of the court, a demand or claim
against the defendant, and subject his property lying within the territorial jurisdiction of the court
to the payment of that demand. But the plaintiff is met at the commencement of his proceedings
by the fact that the defendant is not within the territorial jurisdiction, and cannot be served with
any process by which he can be brought personally within the power of the court. For this
difficulty, the statute has provided a remedy. It says that, upon affidavit's being made of that fact,
a writ of attachment may be issued and levied on any of the defendant's property, and a
publication may be made warning him to appear; and that thereafter the court may proceed in
the case, whether he appears or not. If the defendant appears, the cause becomes mainly a
suit in personam, with the added incident that the property attached remains liable, under the
control of the court, to answer to any demand which may be established against the defendant
by the final judgment of the court. But if there is no appearance of the defendant, and no service
of process on him, the case becomes in its essential nature a proceeding in rem, the only effect
of which is to subject the property attached to the payment of the demand which the court may
find to be due to the plaintiff. That such is
Page 95 U. S. 726
the nature of this proceeding in this latter class of cases is clearly evinced by two well
established propositions: first, the judgment of the court, though in form a personal judgment
against the defendant, has no effect beyond the property attached in that suit. No general
execution can be issued for any balance unpaid after the attached property is exhausted. No suit
can be maintained on such a judgment in the same court, or in any other; nor can it be used as
evidence in any other proceeding not affecting the attached property; nor could the costs in that
proceeding be collected of defendant out of any other property than that attached in the suit.
Second, the court in such a suit cannot proceed unless the officer finds some property of
defendant on which to levy the writ of attachment. A return that none can be found is the end of
the case, and deprives the court of further jurisdiction, though the publication may have been
duly made and proven in court."
The fact that the defendants in that case had fled from the State, or had concealed themselves,
so as not to be reached by the ordinary process of the court, and were not nonresidents, was not
made a point in the decision. The opinion treated them as being without the territorial jurisdiction
of the court, and the grounds and extent of its authority over persons and property thus situated
were considered when they were not brought within its jurisdiction by personal service or
voluntary appearance.
The writer of the present opinion considered that some of the objections to the preliminary
proceedings in the attachment suit were well taken, and therefore dissented from the judgment
of the Court, but, to the doctrine declared in the above citation, he agreed, and he may add that
it received the approval of all the judges. It is the only doctrine consistent with proper protection
to citizens of other States. If, without personal service, judgments in personam, obtained ex
parte against nonresidents and absent parties, upon mere publication of process, which, in the
great majority of cases, would never be seen by the parties interested, could be upheld and
enforced, they would be the constant instruments of fraud and oppression. Judgments for all
sorts of claims upon contracts and for torts, real or pretended, would be thus obtained, under land sold under judgments recovered in suits brought in a territorial court of Iowa, upon
which property would be seized, when the evidence of the transactions upon publication of notice under a law of the territory, without service of process; and the court said:

Page 95 U. S. 727 "These suits were not a proceeding in rem against the land, but were in personam against the
owners of it. Whether they all resided within the territory or not does not appear, nor is it a matter
of any importance. No person is required to answer in a suit on whom process has not been
which they were founded, if they ever had any existence, had perished.
served, or whose property has not been attached. In this case, there was no personal notice, nor
an attachment or other proceeding against the land, until after the judgments. The judgments,
Substituted service by publication, or in any other authorized form, may be sufficient to inform therefore, are nullities, and did not authorize the executions on which the land was sold. "
parties of the object of proceedings taken where property is once brought under the control of
the court by seizure or some equivalent act. The law assumes that property is always in the
Page 95 U. S. 729
possession of its owner, in person or by agent, and it proceeds upon the theory that its seizure
will inform him not only that it is taken into the custody of the court, but that he must look to any
proceedings authorized by law upon such seizure for its condemnation and sale. Such service The force and effect of judgments rendered against nonresidents without personal service of
may also be sufficient in cases where the object of the action is to reach and dispose of property process upon them, or their voluntary appearance, have been the subject of frequent
in the State, or of some interest therein, by enforcing a contract or a lien respecting the same, or consideration in the courts of the United States and of the several States, as attempts have been
to partition it among different owners, or, when the public is a party, to condemn and appropriate made to enforce such judgments in States other than those in which they were rendered, under
it for a public purpose. In other words, such service may answer in all actions which are the provision of the Constitution requiring that "full faith and credit shall be given in each State to
substantially proceedings in rem. But where the entire object of the action is to determine the the public acts, records, and judicial proceedings of every other State;" and the act of Congress
personal rights and obligations of the defendants, that is, where the suit is merely in providing for the mode of authenticating such acts, records, and proceedings, and declaring that,
personam, constructive service in this form upon a nonresident is ineffectual for any purpose. when thus authenticated,
Process from the tribunals of one State cannot run into another State, and summon parties there
domiciled to leave its territory and respond to proceedings against them. Publication of process
"they shall have such faith and credit given to them in every court within the United States as
or notice within the State where the tribunal sits cannot create any greater obligation upon the
they have by law or usage in the courts of the State from which they are or shall or taken."
nonresident to appear. Process sent to him out of the State, and process published within it, are
equally unavailing in proceedings to establish his personal liability.
In the earlier cases, it was supposed that the act gave to all judgments the same effect in other
States which they had by law in the State where rendered. But this view was afterwards qualified
The want of authority of the tribunals of a State to adjudicate upon the obligations of
so as to make the act applicable only when the court rendering the judgment had jurisdiction of
nonresidents, where they have no property within its limits, is not denied by the court below: but
the parties and of the subject matter, and not to preclude an inquiry into the jurisdiction of the
the position is assumed, that, where they have property within the State, it is immaterial whether
court in which the judgment was rendered, or the right of the State itself to exercise authority
the property is in the first instance brought under the control of the court by attachment or some
over the person or the subject matter. M'Elmoyle v. Cohen, 13 Pet. 312. In the case of D'Arcy v.
other equivalent act, and afterwards applied by its judgment to the satisfaction of demands
Ketchum, reported in the 11th of Howard, this view is stated with great clearness. That was an
against its owner; or such demands be first established in a personal action, and
action in the Circuit Court of the United States for Louisiana, brought upon a judgment rendered
in New York under a State statute, against two joint debtors, only one of whom had been served
Page 95 U. S. 728 with process, the other being a nonresident of the State. The Circuit Court held the judgment
conclusive and binding upon the nonresident not served with process, but this Court reversed its
decision, observing, that it was a familiar rule that countries foreign to our own disregarded a
the property of the nonresident be afterwards seized and sold on execution. But the answer to
judgment merely against the person, where the defendant had not been served with process nor
this position has already been given in the statement that the jurisdiction of the court to inquire
had a day in court; that national comity was never thus extended; that the proceeding was
into and determine his obligations at all is only incidental to its jurisdiction over the property. Its
deemed an illegitimate assumption of power, and resisted as mere abuse; that no faith and
jurisdiction in that respect cannot be made to depend upon facts to be ascertained after it has
credit or force and effect had been given to such judgments by any State of the Union, so far
tried the cause and rendered the judgment. If the judgment be previously void, it will not become
valid by the subsequent discovery of property of the defendant, or by his subsequent acquisition
of it. The judgment, if void when rendered, will always remain void; it cannot occupy the doubtful Page 95 U. S. 730
position of being valid if property be found, and void if there be none. Even if the position
assumed were confined to cases where the nonresident defendant possessed property in the
as known; and that the State courts had uniformly, and in many instances, held them to be void.
State at the commencement of the action, it would still make the validity of the proceedings and
"The international law," said the court,
judgment depend upon the question whether, before the levy of the execution, the defendant
had or had not disposed of the property. If, before the levy, the property should be sold, then,
according to this position, the judgment would not be binding. This doctrine would introduce a "as it existed among the States in 1790, was that a judgment rendered in one State, assuming to
new element of uncertainty in judicial proceedings. The contrary is the law: the validity of every bind the person of a citizen of another, was void within the foreign State, when the defendant
judgment depends upon the jurisdiction of the court before it is rendered, not upon what may
occur subsequently. In Webster v. Reid, reported in 11th of Howard, the plaintiff claimed title to
148 | C o n f l i c t o f L a w s C a s e s
had not been served with process or voluntarily made defence, because neither the legislative jurisdiction by the attachment, but had none over his person, and that any determination of his
jurisdiction nor that of courts of justice had binding force." liability, except so far as was necessary for the disposition of the property, was invalid.

And the Court held that the act of Congress did not intend to declare a new rule, or to embrace In Kilbourn v. Woodworth, 5 Johns. (N.Y.) 37, an action of debt was brought in New York upon a
judicial records of this description. As was stated in a subsequent case, the doctrine of this Court personal judgment recovered in Massachusetts. The defendant in that judgment was not served
is that the act with process, and the suit was commenced by the attachment of a bedstead belonging to the
defendant, accompanied with a summons to appear, served on his wife after she had left her
place in Massachusetts. The court held that
"was not designed to displace that principle of natural justice which requires a person to have
notice of a suit before he can be conclusively bound by its result, nor those rules of public law
which protect persons and property within one State from the exercise of jurisdiction over them Page 95 U. S. 732
by another."
the attachment bound only the property attached as a proceeding in rem, and that it could not
The Lafayette Insurance Co. v. French et al., 18 How. 404. bind the defendant, observing, that to bind a defendant personally when he was never
personally summoned or had notice of the proceeding would be contrary to the first principles of
justice, repeating the language in that respect of Chief Justice DeGrey, used in the case
This whole subject has been very fully and learnedly considered in the recent case of Thompson
of Fisher v. Lane, 3 Wils. 297, in 1772. See also Borden v. Fitch, 15 Johns. (N. Y.) 121, and the
v. Whitman, 18 Wall. 457, where all the authorities are carefully reviewed and distinguished, and
cases there cited, and Harris v. Hardeman et al., 14 How. 334. To the same purport, decisions
the conclusion above stated is not only reaffirmed, but the doctrine is asserted that the record of
are found in all the State courts. In several of the cases, the decision has been accompanied
a judgment rendered in another State may be contradicted as to the facts necessary to give the
with the observation that a personal judgment thus recovered has no binding force without the
court jurisdiction against its recital of their existence. In all the cases brought in the State and
State in which it is rendered, implying that, in such State, it may be valid and binding. But if the
Federal courts, where attempts have been made under the act of Congress to give effect in one
court has no jurisdiction over the person of the defendant by reason of his nonresidence, and
State to personal judgments rendered in another State against nonresidents, without service
consequently no authority to pass upon his personal rights and obligations; if the whole
upon them, or upon substituted service by publication, or in some other form, it has been held,
proceeding, without service upon him or his appearance, is coram non judice and void; if to hold
without an exception, so far as we are aware, that such judgments were without any binding
a defendant bound by such a judgment is contrary to the first principles of justice -- it is difficult
force except as to property, or interests in property, within the State, to reach and affect which
to see how the judgment can legitimately have any force within the State. The language used
was the object of the action in which the judgment was rendered, and which property was
can be justified only on the ground that there was no mode of directly reviewing such judgment
brought under control of the court in connection with the process against the person. The
or impeaching its validity within the State where rendered, and that therefore it could be called in
proceeding in such cases, though in the form of a personal action, has been uniformly treated,
question only when its enforcement was elsewhere attempted. In later cases, this language is
where service was not obtained, and the party did not voluntarily
repeated with less frequency than formerly, it beginning to be considered, as it always ought to
have been, that a judgment which can be treated in any State of this Union as contrary to the
Page 95 U. S. 731 first principles of justice, and as an absolute nullity, because rendered without any jurisdiction of
the tribunal over the party, is not entitled to any respect in the State where rendered. Smith v.
McCutchen, 38 Mo. 415; Darrance v. Preston, 18 Iowa, 396; Hakes v.
appear, as effectual and binding merely as a proceeding in rem, and as having no operation
Shupe, 27 id. 465; Mitchell's Administrator v. Gray, 18 Ind. 123.
beyond the disposition of the property, or some interest therein. And the reason assigned for this
conclusion has been that which we have already stated -- that the tribunals of one State have no
jurisdiction over persons beyond its limits, and can inquire only into their obligations to its Be that as it may, the courts of the United States are not required to give effect to judgments of
citizens when exercising its conceded jurisdiction over their property within its limits. In Bissell v. this character when any right is claimed under them. Whilst they are not foreign tribunals in their
Briggs,decided by the Supreme Court of Massachusetts as early as 1813, the law is stated relations to the State courts, they are tribunals
substantially in conformity with these views. In that case, the court considered at length the
effect of the constitutional provision, and the act of Congress mentioned, and after stating that, in
Page 95 U. S. 733
order to entitle the judgment rendered in any court of the United States to the full faith and credit
mentioned in the Constitution, the court must have had jurisdiction not only of the cause, but of
the parties, it proceeded to illustrate its position by observing, that, where a debtor living in one of a different sovereignty, exercising a distinct and independent jurisdiction, and are bound to
State has goods, effects, and credits in another, his creditor living in the other State may have give to the judgments of the State courts only the same faith and credit which the courts of
the property attached pursuant to its laws, and, on recovering judgment, have the property another State are bound to give to them.
applied to its satisfaction, and that the party in whose hands the property was would be
protected by the judgment in the State of the debtor against a suit for it, because the court
Since the adoption of the Fourteenth Amendment to the Federal Constitution, the validity of such
rendering the judgment had jurisdiction to that extent; but that, if the property attached were
judgments may be directly questioned, and their enforcement in the State resisted, on the
insufficient to satisfy the judgment, and the creditor should sue on that judgment in the State of
ground that proceedings in a court of justice to determine the personal rights and obligations of
the debtor, he would fail because the defendant was not amenable to the court rendering the
parties over whom that court has no jurisdiction do not constitute due process of law. Whatever
judgment. In other words, it was held that over the property within the State the court had
difficulty may be experienced in giving to those terms a definition which will embrace every

149 | C o n f l i c t o f L a w s C a s e s
permissible exertion of power affecting private rights, and exclude such as is forbidden, there inhabitants involves authority to prescribe the conditions on which proceedings affecting them
can be no doubt of their meaning when applied to judicial proceedings. They then mean a may be commenced and carried on within its territory. The State, for example, has absolute
course of legal proceedings according to those rules and principles which have been established
in our systems of jurisprudence for the protection and enforcement of private rights. To give such
Page 95 U. S. 735
proceedings any validity, there must be a tribunal competent by its constitution -- that is, by the
law of its creation -- to pass upon the subject matter of the suit; and if that involves merely a
determination of the personal liability of the defendant, he must be brought within its jurisdiction right to prescribe the conditions upon which the marriage relation between its own citizens shall
by service of process within the State, or his voluntary appearance. be created, and the causes for which it may be dissolved. One of the parties guilty of acts for
which, by the law of the State, a dissolution may be granted may have removed to a State where
no dissolution is permitted. The complaining party would, therefore, fail if a divorce were sought
Except in cases affecting the personal status of the plaintiff and cases in which that mode of
in the State of the defendant; and if application could not be made to the tribunals of the
service may be considered to have been assented to in advance, as hereinafter mentioned, the
complainant's domicile in such case, and proceedings be there instituted without personal
substituted service of process by publication, allowed by the law of Oregon and by similar laws
service of process or personal notice to the offending party, the injured citizen would be without
in other States, where actions are brought against nonresidents, is effectual only where, in
redress. Bish. Marr. and Div., sect. 156.
connection with process against the person for commencing the action, property in the State is
brought under the control of the court, and subjected to its disposition by process adapted to that
purpose, or where the judgment is sought as a means of reaching such property or affecting Neither do we mean to assert that a State may not require a nonresident entering into a
some interest therein; in other words, where the action is in the nature of a proceeding in partnership or association within its limits, or making contracts enforceable there, to appoint an
rem. As stated by Cooley in his Treatise on Constitutional Limitations 405, for any other purpose agent or representative in the State to receive service of process and notice in legal proceedings
than to subject the property of a nonresident to valid claims against instituted with respect to such partnership, association, or contracts, or to designate a place
where such service may be made and notice given, and provide, upon their failure, to make such
appointment or to designate such place that service may be made upon a public officer
Page 95 U. S. 734
designated for that purpose, or in some other prescribed way, and that judgments rendered
upon such service may not be binding upon the nonresidents both within and without the State.
him in the State, "due process of law would require appearance or personal service before the As was said by the Court of Exchequer in Vallee v. Dumergue, 4 Exch. 290,
defendant could be personally bound by any judgment rendered."
"It is not contrary to natural justice that a man who has agreed to receive a particular mode of
It is true that, in a strict sense, a proceeding in rem is one taken directly against property, and notification of legal proceedings should be bound by a judgment in which that particular mode of
has for its object the disposition of the property, without reference to the title of individual notification has been followed, even though he may not have actual notice of them."
claimants; but, in a larger and more general sense, the terms are applied to actions between
parties where the direct object is to reach and dispose of property owned by them, or of some
See also The Lafayette Insurance Co. v. French et al., 18 How. 404, and Gillespie v.
interest therein. Such are cases commenced by attachment against the property of debtors, or
Commercial Mutual Marine Insurance Co., 12 Gray (Mass.), 201. Nor do we doubt that a State,
instituted to partition real estate, foreclose a mortgage, or enforce a lien. So far as they affect
on creating corporations or other institutions for pecuniary or charitable purposes, may provide a
property in the State, they are substantially proceedings in rem in the broader sense which we
mode in which their conduct may be investigated, their obligations enforced, or their charters
have mentioned.
revoked, which shall require other than personal service upon their officers or members. Parties
becoming members of such corporations or institutions would hold their
It is hardly necessary to observe that, in all we have said, we have had reference to proceedings
in courts of first instance, and to their jurisdiction, and not to proceedings in an appellate tribunal
Page 95 U. S. 736
to review the action of such courts. The latter may be taken upon such notice, personal or
constructive, as the State creating the tribunal may provide. They are considered as rather a
continuation of the original litigation than the commencement of a new action. Nations et al. v. interest subject to the conditions prescribed by law. Copin v. Adamson, Law Rep. 9 Ex. 345.
Johnson et al., 24 How. 195.
In the present case, there is no feature of this kind, and consequently no consideration of what
It follows from the views expressed that the personal judgment recovered in the State court of would be the effect of such legislation in enforcing the contract of a nonresident can arise. The
Oregon against the plaintiff herein, then a nonresident of the State, was without any validity, and question here respects only the validity of a money judgment rendered in one State in an action
did not authorize a sale of the property in controversy. upon a simple contract against the resident of another without service of process upon him or his
appearance therein.
To prevent any misapplication of the views expressed in this opinion, it is proper to observe that
we do not mean to assert by anything we have said that a State may not authorize proceedings Judgment affirmed.
to determine the status of one of its citizens towards a nonresident which would be binding
within the State, though made without service of process or personal notice to the nonresident.
The jurisdiction which every State possesses to determine the civil status and capacities of all its MR. JUSTICE HUNT dissenting.

150 | C o n f l i c t o f L a w s C a s e s
I am compelled to dissent from the opinion and judgment of the court, and, deeming the question 4. It belongs to the legislative power of the State to determine what shall be the modes and
involved to be important, I take leave to record my views upon it. means proper to be adopted to give notice to an absent defendant of the commencement of a
suit; and if they are such as are reasonably likely to communicate to him information of the
proceeding against him, and are in good faith designed to give him such information, and an
The judgment of the court below was placed upon the ground that the provisions of the statute
opportunity to defend is provided for him in the event of his appearance in the suit, it is not
were not complied with. This is of comparatively little importance, as it affects the present case
competent to the judiciary to declare that such proceeding is void as not being by due process of
only. The judgment of this Court is based upon the theory that the legislature had no power to
law.
pass the law in question; that the principle of the statute is vicious, and every proceeding under it
void. It, therefore, affects all like cases, past and future, and in every State.
5. Whether the property of such nonresident shall be seized
The precise case is this: a statute of Oregon authorizes suits to be commenced by the service of
a summons. In the case of a nonresident of the State, it authorizes the service of the summons Page 95 U. S. 738
to be made by publication for not less than six weeks, in a newspaper published in the county
where the action is commenced. A copy of the summons must also be sent by mail, directed to
upon attachment as the commencement of a suit which shall be carried into judgment and
the defendant at his place of residence, unless it be shown that the residence is not known and
execution, upon which it shall then be sold, or whether it shall be sold upon an execution and
cannot be ascertained. It authorizes a judgment and execution to be obtained in such
judgment without such preliminary seizure, is a matter not of constitutional power, but of
proceeding. Judgment in a suit commenced by one Mitchell in the Circuit Court of Multnomah
municipal regulation only.
County, where the summons was thus served, was obtained against Neff, the present plaintiff,
and the land in question, situate in Multnomah County, was bought by the defendant Pennoyer
at a sale upon the judgment in such suit. This court now holds that, by reason of the absence of To say that a sovereign State has the power to ordain that the property of nonresidents within its
a personal service of territory may be subjected to the payment of debts due to its citizens, if the property is levied
upon at the commencement of a suit, but that it has not such power if the property is levied upon
at the end of the suit, is a refinement and a depreciation of a great general principle that, in my
Page 95 U. S. 737
judgment, cannot be sustained.

the summons on the defendant, the Circuit Court of Oregon had no jurisdiction, its judgment
A reference to the statutes of the different States, and to the statutes of the United States, and to
could not authorize the sale of land in said county, and, as a necessary result, a purchaser of
the decided cases, and a consideration of the principles on which they stand, will more clearly
land under it obtained no title; that, as to the former owner, it is a case of depriving a person of
exhibit my view of the question.
his property without due process of law.

In my opinion, this decision is at variance with the long established practice under the statutes of
the States of this Union, is unsound in principle, and, I fear, may be disastrous in its effects. It
tends to produce confusion in titles which have been obtained under similar statutes in existence
for nearly a century; it invites litigation and strife, and overthrows a well settled rule of property.
The result of the authorities on the subject, and the sound conclusions to be drawn from the
principles which should govern the decision, as I shall endeavor to show, are these:--
1. A sovereign State must necessarily have such control over the real and personal property
actually being within its limits, as that it may subject the same to the payment of debts justly due
to its citizens.
2. This result is not altered by the circumstance that the owner of the property is nonresident,
and so absent from the State that legal process cannot be served upon him personally.
The statutes are of two classes: first, those which authorize the commencement of actions by
publication, accompanied by an attachment which is levied upon property, more or less, of an
absent debtor; second, those giving the like mode of commencing a suit without an attachment.
The statute of Oregon relating to publication of summons, supra, p. 95 U. S. 718, under which
the question arises, is nearly a transcript of a series of provisions contained in the New York
statute, adopted thirty years since. The latter authorizes the commencement of a suit against a
nonresident by the publication of an order for his appearance, for a time not less than six weeks,
in such newspapers as shall be most likely to give notice to him, and the deposit of a copy of the
summons and complaint in the post office, directed to him at his residence, if it can be
ascertained; and provides for the allowance to defend the action before judgment, and within
seven years after its rendition, upon good cause shown, and that, if the defence be successful,
restitution shall be ordered. It then declares: "But the title to property sold under such judgment
to a purchaser in good faith shall not be thereby affected." Code, sects. 34, 35; 5 Edm.Rev.Stat.
of N.Y., pp. 37-39.

Provisions similar in their effect, in authorizing the commencement of suits by attachment

3. Personal notice of a proceeding by which title to property is passed is not indispensable; it is
against absent debtors, in
competent to the State to authorize substituted service by publication or otherwise, as the
commencement of a suit against nonresidents, the judgment in which will authorize the sale of
property in such State. Page 95 U. S. 739

151 | C o n f l i c t o f L a w s C a s e s
which all of the property of the absent debtor, real and personal, not merely that seized upon the
attachment, is placed under the control of trustees, who sell it for the benefit of all the creditors,
and make just distribution thereof, conveying absolute title to the property sold have been upon
the statute book of New York for more than sixty years. 2 id., p. 2 and following; 1 Rev.Laws,
1813, p. 157.
The statute of New York, before the Code, respecting proceedings in chancery where absent
debtors are parties, had long been in use in that State, and was adopted in all cases of chancery
jurisdiction. Whenever a defendant resided out of the State, his appearance might be compelled
by publication in the manner pointed out. A decree might pass against him, and performance be
compelled by sequestration of his real or personal property, or by causing possession of specific
property to be delivered, where that relief is sought. T he relief was not confined to cases of
mortgage foreclosure, or where there was a specific claim upon the property, but included cases
requiring the payment of money as well. 2 Edm.Rev.Stat. N.Y., pp. 193-195; 186, m.
I doubt not that many valuable titles are now held by virtue of the provisions of these statutes.
The statute of California authorizes the service of a summons on a nonresident defendant by
publication, permitting him to come in and defend upon the merits within one year after the entry
of judgment. Code, sects. 10,412, 10,473. In its general character, it is like the statutes of
Oregon and New York already referred to.
The Code of Iowa, sect. 2618, that of Nevada, sect. 1093, and that of Wisconsin, are to the
same general effect. The Revised Statutes of Ohio, sects. 70, 75, 2 Swan & Critchfield, provide
for a similar publication, and that the defendant may come in to defend within five years after the
entry of the judgment, but that the title to property held by any purchaser in good faith under the
judgment shall not be affected thereby.
The attachment laws of New Jersey, Nixon Dig. (4th ed.), p. 55, are like those of New York
already quoted, by which title may be transferred to all the property of a nonresident debtor. And
the provisions of the Pennsylvania statute regulating
Page 95 U. S. 740
proceedings in equity, Brightly's Purden's Dig., p. 5988, sects. 51, 52, give the same authority in
substance, and the same result is produced as under the New York statute.
Without going into a wearisome detail of the statutes of the various States, it is safe to say that
nearly every State in the Union provides a process by which the lands and other property of a
nonresident debtor may be subjected to the payment of his debts, through a judgment or decree
against the owner, obtained upon a substituted service of the summons or writ commencing the
action.
The principle of substituted service is also a rule of property under the statutes of the United
States.
The act of Congress "to amend the law of the District of Columbia in relation to judicial
proceedings therein," approved Feb. 23, 1867, 14 Stat. 403, contains the same general
152 | C o n f l i c t o f L a w s C a s e s
provisions. It enacts (sect. 7) that publication may be substituted for personal service when the
defendant cannot be found in suits for partition, divorce, by attachment, for the foreclosure of
mortgages and deeds of trust, and for the enforcement of mechanics' liens and all other liens
against real or personal property, and in all actions at law or in equity having for their immediate
object the enforcement or establishment of any lawful right, claim, or demand to or against any
real or personal property within the jurisdiction of the court.
A following section points out the mode of proceeding, and closes in these words:
"The decree, besides subjecting the thing upon which the lien has attached to the satisfaction of
the plaintiff's demand against the defendant, shall adjudge that the plaintiff recover his demand
against the defendant, and that he may have execution thereof as at law."
Sect. 10.
A formal judgment against the debtor is thus authorized by means of which any other property of
the defendant within the jurisdiction of the court, in addition to that which is the subject of the
lien, may be sold, and the title transferred to the purchaser.
All these statutes are now adjudged to be unconstitutional and void. The titles obtained under
them are not of the value
Page 95 U. S. 741
of the paper on which they are recorded, except where a preliminary attachment was issued.
Some of the statutes and several of the authorities I cite go further than the present case
requires. In this case, property lying in the State where the suit was brought, owned by the
nonresident debtor, was sold upon the judgment against him, and it is on the title to that property
that the controversy turns.
The question whether, in a suit commenced like the present one, a judgment can be obtained
which, if sued upon in another State, will be conclusive against the debtor, is not before us; nor
does the question arise as to the faith and credit to be given in one State to a judgment
recovered in another. The learning on that subject is not applicable. The point is simply whether
land lying in the same State may be subjected to process at the end of a suit thus commenced.
It is here necessary only to maintain the principle laid down by Judge Cooley in his work on
Constitutional Limitations, p. 404, and cited by Mr. Justice Field in Galpin v. Page, 3 Sawyer 93,
in these words:
"The fact that process was not personally served is a conclusive objection to the judgment as a
personal claim, unless the defendant caused his appearance to be entered in the attachment
proceedings. Where a party has property in a State, and resides elsewhere, his property is justly
subject to all valid claims that may exist against him there; but, beyond this, due process of law
would require appearance or personal service before the defendant could be personally bound
by any judgment rendered."
The learned author does not make it a condition that there should be a preliminary seizure of the
property by attachment; he lays down the rule that all a person's property in a State may be
subjected to all valid claims there existing against him.
The objection now made that suits commenced by substituted service, as by publication, and
judgments obtained without actual notice to the debtor, are in violation of that constitutional
provision that no man shall be deprived of his property "without due process of law," has often
been presented.
In Matter of the Empire City Bank, 18 N.Y. 199, which
Page 95 U. S. 742
was a statutory proceeding to establish and to enforce the responsibility of the stockholders of a
banking corporation, and the proceedings in which resulted in a personal judgment against the
stockholders for the amount found due, the eminent and learned Judge Denio, speaking as the
organ of the Court of Appeals, says:
"The notice of hearing is to be personal, or by service at the residence of the parties who live in
the county, or by advertisement as to others. It may therefore happen that some of the persons
who are made liable will not have received actual notice, and the question is whether personal
service of process or actual notice to the party is essential to constitute due process of law. We
have not been referred to any adjudication holding that no man's right of property can be
affected by judicial proceedings unless he have personal notice. It may be admitted that a
statute which should authorize any debt or damages to be adjudged against a person upon a
purely ex parte proceeding, without a pretence of notice or any provision for defending, would be
a violation of the Constitution, and be void; but where the legislature has prescribed a kind of
notice by which it is reasonably probable that the party proceeded against will be apprised of
what is going on against him, and an opportunity is afforded him to defend, I am of the opinion
that the courts have not the power to pronounce the proceeding illegal. The legislature has
uniformly acted upon that understanding of the Constitution."
Numerous provisions of the statutes of the State are commented upon, after which he proceeds:
"Various prudential regulations are made with respect to these remedies; but it may possibly
happen, notwithstanding all these precautions, that a citizen who owes nothing, and has done
none of the acts mentioned in the statute, may be deprived of his estate without any actual
knowledge of the process by which it has been taken from him. If we hold, as we must in order
to sustain this legislation, that the Constitution does not positively require personal notice in
order to constitute a legal proceeding due process of law, it then belongs to the legislature to
determine whether the case calls for this kind of exceptional legislation, and what manner of
constructive notice shall be sufficient to reasonably apprise the party proceeded against of the
legal steps which are taken against him. "
Page 95 U. S. 743
In Happy v. Mosher, 48 id. 313, the court say:
153 | C o n f l i c t o f L a w s C a s e s
"An approved definition of due process of law is 'law in its regular administration through courts
of justice.' 2 Kent Com. 13. It need not be a legal proceeding according to the course of the
common law, neither must there be personal notice to the party whose property is in question. It
is sufficient if a kind of notice is provided by which it is reasonably probable that the party
proceeded against will be apprised of what is going on against him, and an opportunity afforded
him to defend."
The same language is used in Westervelt v. Gregg, 12 id. 202, and in Campbell v.
Evans, 45 id. 356. Campbell v. Evans and The Empire City Bank are cases not of proceedings
against property to enforce a lien or claim, but, in each of them, a personal judgment in damages
was rendered against the party complaining.
It is undoubtedly true, that, in many cases where the question respecting due process of law has
arisen, the case in hand was that of a proceeding in rem. It is true also, as is asserted, that the
process of a State cannot be supposed to run beyond its own territory. It is equally true,
however, that, in every instance where the question has been presented, the validity of
substituted service, which is used to subject property within the State belonging to a nonresident
to a judgment obtained by means thereof has been sustained. I have found no case in which it is
adjudged that a statute must require a preliminary seizure of such property as necessary to the
validity of the proceeding against it, or that there must have been a previous specific lien upon it;
that is, I have found no case where such has been the judgment of the court upon facts making
necessary the decision of the point. On the contrary, in the case of the attachment laws of New
York and of New Jersey, which distribute all of the nonresident's property, not merely that levied
on by the attachment, and in several of the reported cases already referred to, where the
judgment was sustained, neither of these preliminary facts existed.
The case of Galpin v. Page, reported in 18 Wall. 350 and again in 3 Sawyer 93, is cited in
hostility to the views I have expressed. There may be general expressions which will justify
Page 95 U. S. 744
this suggestion, but the judgment is in harmony with those principles. In the case as reported in
this Court, it was held that the title of the purchaser under a decree against a nonresident infant
was invalid, for two reasons: 1st, that there was no jurisdiction of the proceeding under the
statute of California, on account of the entire absence of an affidavit of nonresidence, and of
diligent inquiry for the residence of the debtor; 2d, the absence of any order for publication in
Eaton's case -- both of which are conditions precedent to the jurisdiction of the court to take any
action on the subject. The title was held void, also, for the reason that the decree under which it
was obtained had been reversed in the State court, and the title was not taken at the sale, nor
held then by a purchaser in good faith, the purchase being made by one of the attorneys in the
suit, and the title being transferred to his law partner after the reversal of the decree. The court
held that there was a failure of jurisdiction in the court under which the plaintiff claimed title, and
that he could not recover. The learned justice who delivered the opinion in the Circuit Court and
in this Court expressly affirms the authority of a State over persons not only, but property as
well, within its limits, and this by means of a substituted service. The judgment so obtained, he
insists, can properly be used as a means of reaching property within the State, which is thus
brought under the control of the court and subjected to its judgment. This is the precise point in
controversy in the present action.
The case of Cooper v. Reynolds, 10 Wall. 308, is cited for the same purpose. There, the
judgment of the court below, refusing to give effect to a judgment obtained upon an order of
publication against a nonresident, was reversed in this Court. The suit was commenced, or
immediately accompanied (it is not clear which), by an attachment which was levied upon the
real estate sold, and for the recovery of which this action was brought. This Court sustained the
title founded upon the suit commenced against the nonresident by attachment. In the opinion
delivered in that case, there may be remarks, by way of argument or illustration, tending to show
that a judgment obtained in a suit not commenced by the levy of an attachment will not give title
to land purchased under it. They are,
Page 95 U. S. 745
however, extrajudicial, the decision itself sustaining the judgment obtained under the State
statute by publication.
Webster v. Reid, 11 How. 437, is also cited. There, the action involved the title to certain lands in
the State of Iowa, being lands formerly belonging to the half-breeds of the Sac and Fox tribes;
and title was claimed against the Indian right under the statutes of June 2, 1838, and January,
1839. By these statutes, commissioners were appointed who were authorized to hear claims for
accounts against the Indians, and commence actions for the same, giving a notice thereof of
eight weeks in the Iowa "Territorial Gazette," and to enter up judgments which should be a lien
on the lands. It was provided that it should not be necessary to name the defendants in the suits,
but the words "owners of the half-breed lands lying in Lee County" should be a sufficient
designation of the defendants in such suits; and it provided that the trials should be by the court,
and not by a jury. It will be observed that the lands were not only within the limits of the territory
of Iowa, but that all the Indians who were made defendants under the name mentioned were
also residents of Iowa, and, for aught that appears to the contrary, of the very county of Lee in
which the proceeding was taken. Nonresidence was not a fact in the case. Moreover, they were
Indians, and, presumptively, not citizens of any State, and the judgments under which the lands
were sold were rendered by the commissioners for their own services under the act.
The court found abundant reasons, six in number, for refusing to sustain the title thus obtained.
The act was apparently an attempt dishonestly to obtain the Indian title, and not intended to give
a substitution for a personal service which would be likely, or was reasonably designed, to reach
the persons to be affected.
The case of Voorhees v. Jackson, 10 Pet. 449, affirmed the title levied under the attachment
laws of Ohio, and laid down the principle of assuming that all had been rightly done by a court
having general jurisdiction of the subject matter.
In Cooper v. Smith, 25 Iowa, 269, it is said that where no process is served on the defendant,
nor property attached, nor garnishee charged, nor appearance entered, a judgment based
Page 95 U. S. 746
on a publication of the pendency of the suit will be void, and may be impeached, collaterally or
otherwise, and forms no bar to a recovery in opposition to it, nor any foundation for a title
claimed under it. The language is very general, and goes much beyond the requirement of the
case, which was an appeal from a personal judgment obtained by publication against the
defendant, and where, as the court say, the petition was not properly verified. All that the court
decided was that this judgment should be reversed. This is quite a different question from the
154 | C o n f l i c t o f L a w s C a s e s
one before us. Titles obtained by purchase at a sale upon an erroneous judgment are generally
good, although the judgment itself be afterwards reversed.McGoon v. Scales, 9 Wall. 311.
In Darrance v. Preston, 18 Iowa, 396, the distinction is pointed out between the validity of a
judgment as to the amount realized from the sale of property within the jurisdiction of the court
and its validity beyond that amount. Picquet v. Swan,5 Mas. 35; Bissell v. Briggs, 9 Mass.
462; Ewer v. Coffin, 1 Cush. (Mass.) 23, are cited, but neither of them in its facts touches the
question before us.
In Drake on Attachment, the rule is laid down in very general language; but none of the cases
cited by him will control the present case. They are the following:--
Eaton v. Bridger, 33 N. H. 228, was decided upon the peculiar terms of the New Hampshire
statute, which forbids the entry of a judgment unless the debtor was served with process, or
actually appeared and answered in the suit. The court say the judgment was "not only
unauthorized by law, but rendered in violation of its express provisions."
Johnson v. Dodge was a proceeding in the same action to obtain a reversal on appeal of the
general judgment, and did not arise upon a contest for property sold under the
judgment. Carleton v. Washington Insurance Co., 35 id. 162, and Bruce v. Cloutman, 45 id. 37,
are to the same effect and upon the same statute.
Smith v. McCutchen, 38 Mo. 415, was a motion in the former suit to set aside the execution by a
garnishee, and it was held that the statute was intended to extend to that class of cases. Abbott
v. Shepard, 44 id. 273, is to the same effect, and is based upon Smith v. McCutchen, supra.
Page 95 U. S. 747
So, in Eastman v. Wadleigh, 65 Me. 251, the question arose in debt on the judgment, not upon a
holding of land purchased under the judgment. It was decided upon the express language of the
statute of Maine, strongly implying the power of the legislature to make it otherwise, had they so
chosen.
It is said that the case where a preliminary seizure has been made, and jurisdiction thereby
conferred, differs from that where the property is seized at the end of the action, in this: in the
first case, the property is supposed to be so near to its owner that, if seizure is made of it, he will
be aware of the fact, and have his opportunity to defend, and jurisdiction of the person is thus
obtained. This, however, is matter of discretion and of judgment only. Such seizure is not in itself
notice to the defendant, and it is not certain that he will by that means receive notice. Adopted as
a means of communicating it, and although a very good means, it is not the only one, nor
necessarily better than a publication of the pendency of the suit, made with an honest intention
to reach the debtor. Who shall assume to say to the legislature that, if it authorizes a particular
mode of giving notice to a debtor, its action may be sustained, but, if it adopts any or all others,
its action is unconstitutional and void? The rule is universal that modes, means, questions of
expediency or necessity are exclusively within the judgment of the legislature, and that the
judiciary cannot review them. This has been so held in relation to a bank of the United States, to
the legal tender act, and to cases arising under other provisions of the Constitution.
In Jarvis v. Barrett, 14 Wis. 591, such is the holding. The court say:
"The essential fact on which the publication is made to depend is property of the defendant in
the State, and not whether it has been attached. . . . There is no magic about the writ [of
attachment] which should make it the exclusive remedy. The same legislative power which
devised it can devise some other, and declare that it shall have the same force and effect. The
particular means to be used are always within the control of the legislature, so that the end be
not beyond the scope of legislative power."
If the legislature shall think that publication and deposit in the post office are likely to give the
notice, there seems to be
Page 95 U. S. 748
nothing in the nature of things to prevent their adoption in lieu of the attachment. The point of
power cannot be thus controlled.
That a State can subject land within its limits belonging to nonresident owners to debts due to its
own citizens as it can legislate upon all other local matters -- that it can prescribe the mode and
process by which it is to be reached -- seems to me very plain.
I am not willing to declare that a sovereign State cannot subject the land within its limits to the
payment of debts due to its citizens, or that the power to do so depends upon the fact whether
its statute shall authorize the property to be levied upon at the commencement of the suit or at
its termination. This is a matter of detail, and I am of opinion that, if reasonable notice be given,
with an opportunity to defend when appearance is made, the question of power will be fully
satisfied.
339 U.S. 306 (70 S.Ct. 652, 94 L.Ed. 865)
MULLANE v. CENTRAL HANOVER BANK & TRUST CO. et al.
No. 378.
Argued: and Submitted Feb. 8, 1950.
Decided: April 24, 1950.
 opinion, JACKSON [HTML]
 dissent, BURTON [HTML]
Mr. Kenneth J. Mullane, New York City, for appellants.
Mr. Albert B. Maginnes, New York City, for appellee, Central Hanover Bank and
Trust Co.
Mr. James N. Vaughan, New York City, for appellee, James N. Vaughan, Guardian et
al.
TOP
155 | C o n f l i c t o f L a w s C a s e s
Mr. Justice JACKSON delivered the opinion of the Court.
This controversy questions the constitutional sufficiency of notice to beneficiaries on
judicial settlement of accounts by the trustee of a common trust fund established
under the New York Banking Law, Consol.Laws, c. 2. The New York Court of Appeals
considered and overruled objections that the statutory notice contravenes
requirements of the Fourteenth Amendment and that by allowance of the account
beneficiaries were deprived of property without due process of law. 299 N.Y. 697,
87 N.E.2d 73. The case is here on appeal under 28 U.S.C. 1257, 28 U.S.C.A. §
1257.
Common trust fund legislation is addressed to a problem appropriate for state
action. Mounting overheads have made administration of small trusts undesirable to
corporate trustees. In order that donors and testators of moderately sized trusts
may not be denied the service of corporate fiduciaries, the District of Columbia and
some thirty states other than New York have permitted pooling small trust estates
into one fund for investment administration.* The income, capital gains, losses and
expenses of the collective trust are shared by the constituent trusts in proportion to
their contribution. By this plan, diversification of risk and economy of management
can be extended to those whose capital standing alone would not obtain such
advantage.
Statutory authorization for the establishment of such common trust funds is
provided in the New York Banking Law, § 100-c, c. 687, L.1937, as amended by c.
602, L.1943 and c. 158, L.1944. Under this Act a trust company may, with approval
of the State Banking Board, establish a common fund and, within prescribed limits,
invest therein the assets of an unlimited number of estates, trusts or other funds of
which it is trustee. Each participating trust shares ratably in the common fund, but
exclusive management and control is in the trust company as trustee, and neither a
fiduciary nor any beneficiary of a participating trust is deemed to have ownership in
any particular asset or investment of this common fund. The trust company must
keep fund assets separate from its own, and in its fiduciary capacity may not deal
with itself or any affiliate. Provisions are made for accountings twelve to fifteen
months after the establishment of a fund and triennially thereafter. The decree in
each such judicial settlement of accounts is made binding and conclusive as to any
matter set forth in the account upon everyone having any interest in the common
fund or in any participating estate, trust or fund.
In January, 1946, Central Hanover Bank and Trust Company established a common
trust fund in accordance with these provisions, and in March, 1947, it petitioned the
Surrogate's Court for settlement of its first account as common trustee. During the
accounting period a total of 113 trusts, approximately half inter vivos and half
testamentary, participated in the common trust fund, the gross capital of which was
nearly three million dollars. The record does not show the number or residence of
the beneficiaries, but they were many and it is clear that some of them were not
residents of the State of New York.
The only notice given beneficiaries of this specific application was by publication in a
local newspaper in strict compliance with the minimum requirements of N.Y.
Banking Law § 100-c(12): 'After filing such petition (for judicial settlement of its
account) the petitioner shall cause to be issued by the court in which the petition is
filed and shall publish not less than once in each week for four successive weeks in
a newspaper to be designated by the court a notice or citation addressed generally
without naming them to all parties interested in such common trust fund and in
such estates, trusts or funds mentioned in the petition, all of which may be
described in the notice or citation only in the manner set forth in said petition and
without setting forth the residence of any such decedent or donor of any such
estate, trust or fund.' Thus the only notice required, and the only one given, was by
newspaper publication setting forth merely the name and address of the trust
company, the name and the date of establishment of the common trust fund, and a
list of all participating estates, trusts or funds.
At the time the first investment in the common fund was made on behalf of each
participating estate, however, the trust company, pursuant to the requirements of §
100-c(9), had notified by mail each person of full age and sound mind whose name
and address was then known to it and who was 'entitled to share in the income
therefrom * * * (or) * * * who would be entitled to share in the principal if the
event upon which such estate, trust or fund will become distributable should have
occurred at the time of sending such notice.' Included in the notice was a copy of
those provisions of the Act relating to the sending of the notice itself and to the
judicial settlement of common trust fund accounts.
Upon the filing of the petition for the settlement of accounts, appellant was, by
order of the court pursuant to § 100-c(12), appointed special guardian and attorney
for all persons known or unknown not otherwise appearing who had or might
thereafter have any interest in the income of the common trust fund; and appellee
Vaughan was appointed to represent those similarly interested in the principal.
There were no other appearances on behalf of any one interested in either interest
or principal.
Appellant appeared specially, objecting that notice and the statutory provisions for
notice to beneficiaries were inadequate to afford due process under the Fourteenth
Amendment, and therefore that the court was without jurisdiction to render a final
and binding decree. Appellant's objections were entertained and overruled, the
Surrogate holding that the notice required and given was sufficient. 75 N.Y.S.2d
397. A final decree accepting the accounts has been entered, affirmed by the
Appellate Division of the Supreme Court, In re Central Hanover Bank & Trust Co.,
275 App.Div. 769, 88 N.Y.S.2d 907, and by the Court of Appeals of the State of New
York, 299 N.Y. 697, 87 N.E.2d 73.
The effect of this decree, as held below, is to settle 'all questions respecting the
management of the common fund.' We understand that every right which
beneficiaries would otherwise have against the trust company, either as trustee of
the common fund or as trustee of any individual trust, for improper management of
the common trust fund during the period covered by the accounting is sealed and
wholly terminated by the decree. See Matter of Hoaglund's Estate, 194 Misc. 803,
811—812, 74 N.Y.S.2d 156, 164, affirmed 272 App.Div. 1040, 74 N.Y.S.2d 911,
affirmed 297 N.Y. 920, 79 N.E.2d 746; Matter of Bank of New York, 189 Misc. 459,
470, 67 N.Y.S.2d 444, 453; Matter of Security Trust Co. of Rochester, 189 Misc.
748, 760, 70 N.Y.S.2d 260, 271; Matter of Continental Bank & Trust Co., 189 Misc.
795, 797, 67 N.Y.S.2d 806, 807—808.
156 | C o n f l i c t o f L a w s C a s e s
We are met at the outset with a challenge to the power of the State—the right of its
courts to adjudicate at all as against those beneficiaries who reside without the
State of New York. It is contended that the proceeding is one in personam in that
the decree affects neither title to nor possession of any res, but adjudges only
personal rights of the beneficiaries to surcharge their trustee for negligence or
breach of trust. Accordingly, it is said, under the strict doctrine of Pennoyer v.
Neff, 95 U.S. 714, 24 L.Ed. 565, the Surrogate is without jurisdiction as to
nonresidents upon whom personal service of process was not made.
Distinctions between actions in rem and those in personam are ancient and
originally expressed in procedural terms what seems really to have been a
distinction in the substantive law of property under a system quite unlike our own.
Buckland and McNair, Roman Law and Common Law, 66; Burdick, Principles of
Roman Law and Their Relation to Modern Law, 298. The legal recognition and rise in
economic importance of incorporeal or intangible forms of property have upset the
ancient simplicity of property law and the clarity of its distinctions, while new forms
of proceedings have confused the old procedural classification. American courts
have sometimes classed certain actions as in rem because personal service of
process was not required, and at other times have held personal service of process
not required because the action was in rem. See cases collected in Freeman on
Judgments, §§ 1517 et seq. (5th ed.).
Judicial proceedings to settle fiduciary accounts have been sometimes termed in
rem, or more indefinitely quasi in rem, or more vaguely still, 'in the nature of a
proceeding in rem.' It is not readily apparent how the courts of New York did or
would classify the present proceeding, which has some characteristics and is
wanting in some features of proceedings both in rem and in personam. But in any
event we think that the requirements of the Fourteenth Amendment to the Federal
Constitution do not depend upon a classification for which the standards are so
elusive and confused generally and which, being primarily for state courts to define,
may and do vary from state to state. Without disparaging the usefulness of
distinctions between actions in rem and those in personam in many branches of law,
or on other issues, or the reasoning which underlies them, we do not rest the power
of the State to resort to constructive service in this proceeding upon how its courts
or this Court may regard this historic antithesis. It is sufficient to observe that,
whatever the technical definition of its chosen procedure, the interest of each state
in providing means to close trusts that exist by the grace of its laws and are
administered under the supervision of its courts is so insistent and rooted in custom
as to establish beyond doubt the right of its courts to determine the interests of all
claimants, resident or nonresident, provided its procedure accords full opportunity
to appear and be heard.
Quite different from the question of a state's power to discharge trustees is that of
the opportunity it must give beneficiaries to contest. Many controversies have raged
about the cryptic and abstract words of the Due Process Clause but there can be no
doubt that at a minimum they require that deprivation of life, liberty or property by
adjudication be preceded by notice and opportunity for hearing appropriate to the
nature of the case.
In two ways this proceeding does or may deprive beneficiaries of property. It may
cut off their rights to have the trustee answer for negligent or illegal impairments of
their interests. Also, their interests are presumably subject to diminution in the
proceeding by allowance of fees and expenses to one who, in their names but
without their knowledge, may conduct a fruitless or uncompensatory contest.
Certainly the proceeding is one in which they may be deprived of property rights
and hence notice and hearing must measure up to the standards of due process.
Personal service of written notice within the jurisdiction is the classic form of notice
always adequate in any type of proceeding. But the vital interest of the State in
bringing any issues as to its fiduciaries to a final settlement can be served only if
interests or claims of individuals who are outside of the State can somehow be
determined. A construction of the Due Process Clause which would place impossible
or impractical obstacles in the way could not be justified.
Against this interest of the State we must balance the individual interest sought to
be protected by the Fourteenth Amendment. This is defined by our holding that 'The
fundamental requisite of due process of law is the opportunity to be heard.' Grannis
v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 783, 58 L.Ed. 1363. This right to be
heard has little reality or worth unless one is informed that the matter is pending
and can choose for himself whether to appear or default, acquiesce or contest.
The Court has not committed itself to any formula achieving a balance between
these interests in a particular proceeding or determining when constructive notice
may be utilized or what test it must meet. Personal service has not in all
circumstances been regarded as indispensable to the process due to residents, and
it has more often been held unnecessary as to nonresidents. We disturb none of the
established rules on these subjects. No decision constitutes a controlling or even a
very illuminating precedent for the case before us. But a few general principles
stand out in the books.
An elementary and fundamental requirement of due process in any proceeding
which is to be accorded finality is notice reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency of the action and afford
them an opportunity to present their objections. Milliken v. Meyer, 311 U.S. 457, 61
S.Ct. 339, 85 L.Ed. 278, 132 A.L.R. 1357; Grannis v. Ordean, 234 U.S. 385, 34
S.Ct. 779, 58 L.Ed. 1363; Priest v. Board of Trustees of Town of Las Vegas, 232
U.S. 604, 34 S.Ct. 443, 58 L.Ed. 751; Roller v. Holly, 176 U.S. 398, 20 S.Ct. 410,
44 L.Ed. 520. The notice must be of such nature as reasonably to convey the
required information, Grannis v. Ordean, supra, and it must afford a reasonable
time for those interested to make their appearance, Roller v. Holly, supra, and cf.
Goodrich v. Ferris, 214 U.S. 71, 29 S.Ct. 580, 53 L.Ed. 914. But if with due regard
for the practicalities and peculiarities of the case these conditions are reasonably
met the constitutional requirements are satisfied. 'The criterion is not the possibility
of conceivable injury, but the just and reasonable character of the requirements,
having reference to the subject with which the statute deals.' American Land Co. v.
Zeiss, 219 U.S. 47, 67, 31 S.Ct. 200, 207, 55 L.Ed. 82, and see Blinn v. Nelson, 222
U.S. 1, 7, 32 S.Ct. 1, 2, 56 L.Ed. 65, Ann.Cas.1913B, 555.
But when notice is a person's due, process which is a mere gesture is not due
process. The means employed must be such as one desirous of actually informing
the absentee might reasonably adopt to accomplish it. The reasonableness and
hence the constitutional validity of any chosen method may be defended on the
ground that it is in itself reasonably certain to inform those affected, compare Hess
v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091, with Wuchter v.
157 | C o n f l i c t o f L a w s C a s e s
Pizzutti, 276 U.S. 13, 48 S.Ct. 259, 72 L.Ed. 446, 57 A.L.R. 1230, or, where
conditions do not reasonably permit such notice, that the form chosen is not
substantially less likely to bring home notice than other of the feasible and
customary substitutes.
It would be idle to pretend that publication alone as prescribed here, is a reliable
means of acquainting interested parties of the fact that their rights are before the
courts. It is not an accident that the greater number of cases reaching this Court on
the question of adequacy of notice have been concerned with actions founded on
process constructively served through local newspapers. Chance alone brings to the
attention of even a local resident an advertisement in small type inserted in the
back pages of a newspaper, and if he makes his home outside the area of the
newspaper's normal circulation the odds that the information will never reach him
are large indeed. The chance of actual notice is further reduced when as here the
notice required does not even name those whose attention it is supposed to attract,
and does not inform acquaintances who might call it to attention. In weighing its
sufficiency on the basis of equivalence with actual notice we are unable to regard
this as more than a feint.
Nor is publication here reinforced by steps likely to attract the parties' attention to
the proceeding. It is true that publication traditionally has been acceptable as
notification supplemental to other action which in itself may reasonably be expected
to convey a warning. The ways or an owner with tangible property are such that he
usually arranges means to learn of any direct attack upon his possessory or
proprietary rights. Hence, libel of a ship, attachment of a chattel or entry upon real
estate in the name of law may reasonably be expected to come promptly to the
owner's attention. When the state within which the owner has located such property
seizes it for some reason, publication or posting affords an additional measure of
notification. A state may indulge the assumption that one who has left tangible
property in the state either has abandoned it, in which case proceedings against it
deprive him of nothing, cf. Anderson National Bank v. luckett, 321 U.S. 233, 64
S.Ct. 599, 88 L.Ed. 692, 151 A.L.R. 824; Security Savings Bank v. California, 263
U.S. 282, 44 S.Ct. 108, 68 L.Ed. 301, 31A.L.R. 391, or that he has left some
caretaker under a duty to let him know that it is being jeopardized. Ballard v.
Hunter, 204 U.S. 241, 27 S.Ct. 261, 51 L.Ed. 461; Huling v. Kaw Valley Ry. & Imp.
Co., 130 U.S. 559, 9 S.Ct. 603, 32 L.Ed. 1045. As phrased long ago by Chief Justice
Marshall in The Mary, 9 Cranch 126, 144, 3 L.Ed. 678, 'It is the part of common
prudence for all those who have any interest in (a thing), to guard that interest by
persons who are in a situation to protect it.'
In the case before us there is, of course, no abandonment. On the other hand these
beneficiaries do have a resident fiduciary as caretaker of their interest in this
property. But it is their caretaker who in the accounting becomes their adversary.
Their trustee is released from giving notice of jeopardy, and no one else is expected
to do so. Not even the special guardian is required or apparently expected to
communicate with his ward and client, and, of course, if such a duty were merely
transferred from the trustee to the guardian, economy would not be served and
more likely the cost would be increased.
This Court has not hesitated to approve of resort to publication as a customary
substitute in another class of cases where it is not reasonably possible or practicable
to give more adequate warning. Thus it has been recognized that, in the case of
persons missing or unknown, employment of an indirect and even a probably futile
means of notification is all that the situation permits and creates no constitutional
bar to a final decree foreclosing their rights. Cunnius v. Reading School District, 198
U.S. 458, 25 S.Ct. 721, 49 L.Ed. 1125, 3 Ann.Cas. 1121; Blinn v. Nelson, 222 U.S.
1, 32 S.Ct. 1, 56 L.Ed. 65, Ann.Cas.1913B, 555; and see Jacob v. Roberts, 223 U.S.
261, 32 S.Ct. 303, 56 L.Ed. 429.
Those beneficiaries represented by appellant whose interests or whereabouts could
not with due diligence be ascertained come clearly within this category. As to them
the statutory notice is sufficient. However great the odds that publication will never
reach the eyes of such unknown parties, it is not in the typical case much more
likely to fail than any of the choices open to legislators endeavoring to prescribe the
best notice practicable.
Nor do we consider it unreasonable for the State to dispense with more certain
notice to those beneficiaries whose interests are either conjectural or future or,
although they could be discovered upon investigation, do not in due course of
business come to knowledge of the common trustee. Whatever searches might be
required in another situation under ordinary standards of diligence, in view of the
character of the proceedings and the nature of the interests here involved we think
them unnecessary. We recognize the practical difficulties and costs that would be
attendant on frequent investigations into the status of great numbers of
beneficiaries, many of whose interests in the common fund are so remote as to be
ephemeral; and we have no doubt that such impracticable and extended searches
are not required in the name of due process. The expense of keeping informed from
day to day of substitutions among even current income beneficiaries and
presumptive remaindermen, to say nothing of the far greater number of contingent
beneficiaries, would impose a severe burden on the plan, and would likely dissipate
its advantages. These are practical matters in which we should be reluctant to
disturb the judgment of the state authorities.
Accordingly we overrule appellant's constitutional objections to published notice
insofar as they are urged on behalf of any beneficiaries whose interests or
addresses are unknown to the trustee.
As to known present beneficiaries of known place of residence, however, notice by
publication stands on a different footing. Exceptions in the name of necessity do not
sweep away the rule that within the limits of practicability notice must be such as is
reasonably calculated to reach interested parties. Where the names and post office
addresses of those affected by a proceeding are at hand, the reasons disappear for
resort to means less likely than the mails to apprise them of its pendency.
The trustee has on its books the names and addresses of the income beneficiaries
represented by appellant, and we find no tenable ground for dispensing with a
serious effort to inform them personally of the accounting, at least by ordinary mail
to the record addresses. Cf. Wuchter v. Pizzutti, supra. Certainly sending them a
copy of the statute months and perhaps years in advance does not answer this
purpose. The trustee periodically remits their income to them, and we think that
they mgith reasonably expect that with or apart from their remittances word might
come to them personally that steps were being taken affecting their interests.
158 | C o n f l i c t o f L a w s C a s e s
We need not weigh contentions that a requirement of personal service of citation on
even the large number of known resident or nonresident beneficiaries would, by
reasons of delay if not of expense, seriously interfere with the proper administration
of the fund. Of course personal service even without the jurisdiction of the issuing
authority serves the end of actual and personal notice, whatever power of
compulsion it might lack. However, no such service is required under the
circumstances. This type of trust presupposes a large number of small interests.
The individual interest does not stand alone but is identical with that of a class. The
rights of each in the integrity of the fund and the fidelity of the trustee are shared
by many other beneficiaries. Therefore notice reasonably certain to reach most of
those interested in objecting is likely to safeguard the interests of all, since any
objections sustained would inure to the benefit of all. We think that under such
circumstances reasonable risks that notice might not actually reach every
beneficiary are justifiable. 'Now and then an extraordinary case may turn up, but
constitutional law, like other mortal contrivances, has to take some chances, and in
the great majority of instances, no doubt, justice will be done.' Blinn v. Nelson,
supra, 222 U.S. at page 7, 32 S.Ct. at page 2, 56 L.Ed. 65, Ann.Cas.1913B, 555.
The statutory notice to known beneficiaries is inadequate, not because in fact it fails
to reach everyone, but because under the circumstances it is not reasonably
calculated to reach those who could easily be informed by other means at hand.
However it may have been in former times, the mails today are recognized as an
efficient and inexpensive means of communication. Moreover, the fact that the trust
company has been able to give mailed notice to known beneficiaries at the time the
common trust fund was established is persuasive that postal notification at the time
of accounting would not seriously burden the plan.
In some situations the law requires greater precautions in its proceedings than the
business world accepts for its own purposes. In few, if any, will it be satisfied with
less. Certainly it is instructive, in determining the reasonableness of the impersonal
broadcast notification here used, to ask whether it would satisfy a prudent man of
business, counting his pennies but finding it in his interest to convey information to
many persons whose names and addresses are in his files. We are not satisfied that
it would. Publication may theoretically be available for all the world to see, but it is
too much in our day to suppose that each or any individual beneficiary does or could
examine all that is published to see if something may be tucked away in it that
affects his property interests. We have before indicated in reference to notice by
publication that, 'Great caution should be used not to let fiction deny the fair play
that can be secured only by a pretty close adhesion to fact.' McDonald v. Mabee,243
U.S. 90, 91, 37 S.Ct. 343, 61 L.Ed. 608, L.R.A.1917F, 458.
We hold the notice of judicial settlement of accounts required by the New York
Banking Law § 100-c(12) is incompatible with the requirements of the Fourteenth
Amendment as a basis for adjudication depriving known persons whose
whereabouts are also known of substantial property rights. Accordingly the
judgment is reversed and the cause remanded for further proceedings not
inconsistent with this opinion.
Reversed.
Mr. Justice DOUGLAS took no part in the consideration or decision of this case.
TOP
Mr. Justice BURTON, dissenting.
These common trusts are available only when the instruments creating the
participating trusts permit participation in the common fund. Whether or not further
notice to beneficiaries should supplement the notice and representation here
provided is properly within the discretion of the State. The Federal Constitution does
not require it here.
SHAFFER v. HEITNER, (1977)
No. 75-1812
Argued: February 22, 1977 Decided: June 24, 1977
Appellee, a nonresident of Delaware, filed a shareholder's derivative suit in a Delaware Chancery
Court, naming as defendants a corporation and its subsidiary, as well as 28 present or former
corporate officers or directors, alleging that the individual defendants had violated their duties to
the corporation by causing it and its subsidiary to engage in actions (which occurred in Oregon)
that resulted in corporate liability for substantial damages in a private antitrust suit and a large
fine in a criminal contempt action. Simultaneously, appellee, pursuant to Del. Code Ann., Tit. 10,
366 (1975), filed a motion for sequestration of the Delaware property of the individual
defendants, all nonresidents of Delaware, accompanied by an affidavit identifying the property
to be sequestered as stock, options, warrants, and various corporate rights of the defendants. A
sequestration order was issued pursuant to which shares and options belonging to 21 defendants
(appellants) were "seized" and "stop transfer" orders were placed on the corporate books.
Appellants entered a special appearance to quash service of process and to vacate the
sequestration order, contending that the ex parte sequestration procedure did not accord them
due process; that the property seized was not capable of attachment in Delaware; and that they
did not have sufficient contacts with Delaware to sustain jurisdiction of that State's courts under
the rule of International Shoe Co. v. Washington, 326 U.S. 310 . In that case the Court (after
noting that the historical basis of in personam jurisdiction was a court's power over the
defendant's person, making his presence within the court's territorial jurisdiction a prerequisite
to its rendition of a personally binding judgment against him, Pennoyer v. Neff, 95 U.S. 714 )
held that that power was no longer the central concern and that "due process requires only that
in order to subject a defendant to a judgment in personam, if he be not present within the
territory of the forum, he have certain minimum contacts with it such that the maintenance of
the suit does not offend `traditional notions of fair play and substantial justice'" (and thus the
focus shifted to the relationship among the defendant, the forum, and the litigation, rather than
the mutually exclusive sovereignty of the States on which the rules of Pennoyer had rested). The
Court of Chancery, rejecting appellants' arguments, upheld the 366 procedure [433 U.S. 186,
187] of compelling the personal appearance of a nonresident defendant to answer and defend a
suit brought against him in a court of equity, which is accomplished by the appointment of a
sequestrator to seize and hold the property of the nonresident located in Delaware subject to
court order, with release of the property being made upon the defendant's entry of a general
appearance. The court held that the limitation on the purpose and length of time for which
sequestered property is held comported with due process and that the statutory situs of the stock
(under a provision making Delaware the situs of ownership of the capital stock of all
corporations existing under the laws of that State) provided a sufficient basis for the exercise of
quasi in rem jurisdiction by a Delaware court. The Delaware Supreme Court affirmed,
concluding that International Shoe raised no constitutional barrier to the sequestration
159 | C o n f l i c t o f L a w s C a s e s
procedure because "jurisdiction under 366 remains . . . quasi in rem founded on the presence of
capital stock [in Delaware], not on prior contact by defendants with this forum." Held:
1. Whether or not a State can assert jurisdiction over a nonresident must be evaluated according
to the minimum-contacts standard of International Shoe Co. v. Washington, supra. Pp. 207-212.
(a) In order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be
sufficient to justify exercising "jurisdiction over the interests of persons in the thing." The
presence of property in a State may bear upon the existence of jurisdiction by providing contacts
among the forum State, the defendant, and the litigation, as for example, when claims to the
property itself are the source of the underlying controversy between the plaintiff and defendant,
where it would be unusual for the State where the property is located not to have jurisdiction. Pp.
207-208.
(b) But where, as in the instant quasi in rem action, the property now serving as the basis for
state-court jurisdiction is completely unrelated to the plaintiff's cause of action, the presence of
the property alone, i. e., absent other ties among the defendant, the State, and the litigation,
would not support the State's jurisdiction. Pp. 208-209.
(c) Though the primary rationale for treating the presence of property alone as a basis for
jurisdiction is to prevent a wrongdoer from avoiding payment of his obligations by removal of his
assets to a place where he is not subject to an in personam suit, that is an insufficient
justification for recognizing jurisdiction without regard to whether the property is in the State for
that purpose. Moreover, the availability of attachment procedures and the protection of the Full
Faith and Credit Clause, also militate against that rationale. Pp. 209-210. [433 U.S. 186, 188]
(d) The fairness standard of International Shoe can be easily applied in the vast majority of
cases. P. 211.
(e) Though jurisdiction based solely on the presence of property in a State has had a long history,
"traditional notions of fair play and substantial justice" can be as readily offended by the
perpetuation of ancient forms that are no longer justified as by the adoption of new procedures
that do not comport with the basic values of our constitutional heritage. Cf. Sniadach v. Family
Finance Corp, 395 U.S. 337, 340 ; Wolf v. Colorado, 338 U.S. 25, 27 . Pp. 211-212.
2. Delaware's assertion of jurisdiction over appellants, based solely as it is on the statutory
presence of appellants' property in Delaware, violates the Due Process Clause, which "does not
contemplate that a state may make binding a judgment . . . against an individual or corporate
defendant with which the state has no contacts, ties, or relations." International Shoe, supra, at
319. Pp. 213-217.
(a) Appellants' holdings in the corporation, which are not the subject matter of this litigation and
are unrelated to the underlying cause of action, do not provide contacts with Delaware sufficient
to support jurisdiction of that State's courts over appellants. P. 213.
(b) Nor is Delaware state-court jurisdiction supported by that State's interest in supervising the
management of a Delaware corporation and defining the obligations of its officers and directors,
since Delaware bases jurisdiction, not on appellants' status as corporate fiduciaries, but on the
presence of their property in the State. Moreover, sequestration has been available in any suit
against a nonresident whether against corporate fiduciaries or not. Pp. 213-215.
(c) Though it may be appropriate for Delaware law to govern the obligations of appellants to the
corporation and stockholders, this does not mean that appellants have "purposefully avail[ed
themselves] of the privilege of conducting activities within the forum State," Hanson v.
Denckla, 357 U.S. 235, 253 . Appellants, who were not required to acquire interests in the
corporation in order to hold their positions, did not by acquiring those interests surrender their
right to be brought to judgment in the States in which they had "minimum contacts." Pp. 215-
216.
361 A. 2d 225, reversed.
MARSHALL, J., delivered the opinion of the Court, in which BURGER, C. J., and STEWART,
WHITE, BLACKMUN, and POWELL, JJ., joined, and in Parts I-III of which BRENNAN, J.,
joined. POWELL, J., filed a concurring opinion, post, p. 217. STEVENS, J., filed an opinion
concurring in the [433 U.S. 186, 189] judgment, post, p. 217. BRENNAN, J., filed an opinion
concurring in part and dissenting in part, post, p. 219. REHNQUIST, J., took no part in the
consideration or decision of the case.
John R. Reese argued the cause for appellants. With him on the briefs were Edmund N.
Carpenter II, R. Franklin Balotti, and Lynn H. Pasahow.
Michael F. Maschio argued the cause for appellee. With him on the brief was Joshua M. Twilley.
MR. JUSTICE MARSHALL delivered the opinion of the Court.
The controversy in this case concerns the constitutionality of a Delaware statute that allows a
court of that State to take jurisdiction of a lawsuit by sequestering any property of the defendant
that happens to be located in Delaware. Appellants contend that the sequestration statute as
applied in this case violates the Due Process Clause of the Fourteenth Amendment both because
it permits the state courts to exercise jurisdiction despite the absence of sufficient contacts
among the defendants, the litigation, and the State of Delaware and because it authorizes the
deprivation of defendants' property without providing adequate procedural safeguards. We find
it necessary to consider only the first of these contentions.
I
Appellee Heitner, a nonresident of Delaware, is the owner of one share of stock in the Greyhound
Corp., a business incorporated under the laws of Delaware with its principal place of business in
Phoenix, Ariz. On May 22, 1974, he filed a shareholder's derivative suit in the Court of Chancery
for New Castle Country, Del., in which he named as defendants Greyhound, its wholly owned
subsidiary Greyhound Lines, Inc., 1 and 28 present or former officers or directors of one or [433
U.S. 186, 190] both of the corporations. In essence, Heitner alleged that the individual
defendants had violated their duties to Greyhound by causing it and its subsidiary to engage in
actions that resulted in the corporations being held liable for substantial damages in a private
antitrust suit 2 and a large fine in a criminal contempt action. 3 The activities which led to these
penalties took place in Oregon.
Simultaneously with his complaint, Heitner filed a motion for an order of sequestration of the
Delaware property of the individual defendants pursuant to Del. Code Ann., Tit. 10, 366
(1975). 4 This motion was accompanied by a supporting [433 U.S. 186, 191] affidavit of counsel
160 | C o n f l i c t o f L a w s C a s e s
which stated that the individual defendants were nonresidents of Delaware. The affidavit
identified the property to be sequestered as
"common stock, 3% Second Cumulative Preferenced Stock and stock unit credits of the
Defendant Greyhound Corporation, a Delaware corporation, as well as all options and all
warrants to purchase said stock issued to said individual Defendants and all contractural [sic]
obligations, all rights, debts or credits due or accrued to or for the benefit of any of the said
Defendants under any type of written agreement, contract or other legal instrument of any kind
whatever between any of the individual Defendants and said corporation."
The requested sequestration order was signed the day the motion was filed. 5 Pursuant to that
order, the sequestrator 6 [433 U.S. 186, 192] "seized" approximately 82,000 shares of
Greyhound common stock belonging to 19 of the defendants, 7 and options belonging to another
2 defendants. 8 These seizures were accomplished by placing "stop transfer" orders or their
equivalents on the books of the Greyhound Corp. So far as the record shows, none of the
certificates representing the seized property was physically present in Delaware. The stock was
considered to be in Delaware, and so subject to seizure, by virtue of Del. Code Ann., Tit. 8, 169
(1975), which makes Delaware the situs of ownership of all stock in Delaware corporations. 9
All 28 defendants were notified of the initiation of the suit by certified mail directed to their last
known addresses and by publication in a New Castle County newspaper. The 21 defendants
whose property was seized (hereafter referred to as appellants) responded by entering a special
appearance for [433 U.S. 186, 193] the purpose of moving to quash service of process and to
vacate the sequestration order. They contended that the ex parte sequestration procedure did not
accord them due process of law and that the property seized was not capable of attachment in
Delaware. In addition, appellants asserted that under the rule of International Shoe Co. v.
Washington, 326 U.S. 310 (1945), they did not have sufficient contacts with Delaware to sustain
the jurisdiction of that State's courts.
The Court of Chancery rejected these arguments in a letter opinion which emphasized the
purpose of the Delaware sequestration procedure:
"The primary purpose of `sequestration' as authorized by 10 Del. C. 366 is not to secure
possession of property pending a trial between resident debtors and creditors on the issue of who
has the right to retain it. On the contrary, as here employed, `sequestration' is a process used to
compel the personal appearance of a nonresident defendant to answer and defend a suit brought
against him in a court of equity. Sands v. Lefcourt Realty Corp., Del. Supr., 117 A. 2d 365 (1955).
It is accomplished by the appointment of a sequestrator by this Court to seize and hold property
of the nonresident located in this State subject to further Court order. If the defendant enters a
general appearance, the sequestered property is routinely released, unless the plaintiff makes
special application to continue its seizure, in which event the plaintiff has the burden of proof
and persuasion." App. 75-76.
This limitation on the purpose and length of time for which sequestered property is held, the
court concluded, rendered inapplicable the due process requirements enunciated in Sniadach v.
Family Finance Corp., 395 U.S. 337 (1969); Fuentes v. Shevin, 407 U.S. 67 (1972); and Mitchell
v. W. T. Grant Co., 416 U.S. 600 (1974). App. 75-76, 80, 83-85. The court also found no state-law
or federal constitutional barrier to the sequestrator's reliance on Del. Code Ann., Tit. 8, 169 [433
U.S. 186, 194] (1975). App. 76-79. Finally, the court held that the statutory Delaware situs of the
stock provided a sufficient basis for the exercise of quasi in rem jurisdiction by a Delaware court.
Id., at 85-87.
On appeal, the Delaware Supreme Court affirmed the judgment of the Court of Chancery.
Greyhound Corp. v. Heitner, 361 A. 2d 225 (1976). Most of the Supreme Court's opinion was
devoted to rejecting appellants' contention that the sequestration procedure is inconsistent with
the due process analysis developed in the Sniadach line of cases. The court based its rejection of
that argument in part on its agreement with the Court of Chancery that the purpose of the
sequestration procedure is to compel the appearance of the defendant, a purpose not involved in
the Sniadach cases. The court also relied on what it considered the ancient origins of the
sequestration procedure and approval of that procedure in the opinions of this
Court, 10 Delaware's interest in asserting jurisdiction to adjudicate claims of mismanagement of
a Delaware corporation, and the safeguards for defendants that it found in the Delaware statute.
361 A. 2d, at 230-236. [433 U.S. 186, 195]
Appellants' claim that the Delaware courts did not have jurisdiction to adjudicate this action
received much more cursory treatment. The court's analysis of the jurisdictional issue is
contained in two paragraphs:
"There are significant constitutional questions at issue here but we say at once that we do not
deem the rule of International Shoe to be one of them. . . . The reason, of course, is that
jurisdiction under 366 remains . . . quasi in rem founded on the presence of capital stock here,
not on prior contact by defendants with this forum. Under 8 Del. C. 169 the `situs of the
ownership of the capital stock of all corporations existing under the laws of this State . . . [is] in
this State,' and that provides the initial basis for jurisdiction. Delaware may constitutionally
establish situs of such shares here, . . . it has done so and the presence thereof provides the
foundation for 366 in this case. . . . On this issue we agree with the analysis made and the
conclusion reached by Judge Stapleton in U.S. Industries, Inc. v. Gregg, D. Del., 348 F. Supp.
1004 (1972). 11
"We hold that seizure of the Greyhound shares is not invalid because plaintiff has failed to meet
the prior contacts tests of International Shoe." Id., at 229.
We noted probable jurisdiction. 429 U.S. 813 . 12 We reverse. [433 U.S. 186, 196]
II
The Delaware courts rejected appellants' jurisdictional challenge by noting that this suit was
brought as a quasi in rem proceeding. Since quasi in rem jurisdiction is traditionally based on
attachment or seizure of property present in the jurisdiction, not on contacts between the
defendant and the State, the courts considered appellants' claimed lack of contacts with
Delaware to be unimportant. This categorical analysis assumes the continued soundness of the
conceptual structure founded on the century-old case of Pennoyer v. Neff, 95 U.S. 714 (1878).
Pennoyer was an ejectment action brought in federal court under the diversity jurisdiction.
Pennoyer, the defendant in that action, held the land under a deed purchased in a sheriff's sale
conducted to realize on a judgment for attorney's fees obtained against Neff in a previous action
by one Mitchell. At the time of Mitchell's suit in an Oregon State court, Neff was a nonresident of
Oregon. An Oregon statute allowed service by publication on nonresidents who had property in
the State, 13 and Mitchell had used that procedure to bring Neff [433 U.S. 186, 197] before the
court. The United States Circuit Court for the District of Oregon, in which Neff brought his
161 | C o n f l i c t o f L a w s C a s e s
ejectment action, refused to recognize the validity of the judgment against Neff in Mitchell's suit,
and accordingly awarded the land to Neff. 14 This Court affirmed.
Mr. Justice Field's opinion for the Court focused on the territorial limits of the States' judicial
powers. Although recognizing that the States are not truly independent sovereigns, Mr. Justice
Field found that their jurisdiction was defined by the "principles of public law" that regulate the
relationships among independent nations. The first of those principles was "that every State
possesses exclusive jurisdiction and sovereignty over persons and property within its territory."
The second was "that no State can exercise direct jurisdiction and authority over persons or
property without its territory." Id., at 722. Thus, "in virtue of the State's jurisdiction over the
property of the non-resident situated within its limits," the state courts "can inquire into that
non-resident's obligations to its own citizens . . . to the extent necessary to control the
disposition of the property." Id., at 723. The Court recognized that if the conclusions of that
inquiry were adverse to the nonresident property owner, his interest in the property would be
affected. Ibid. Similarly, if the defendant consented to the jurisdiction of the state courts or was
personally served within the State, a judgment could affect his interest in property outside the
State. But any attempt "directly" to assert extraterritorial jurisdiction over persons or property
would offend sister States and exceed the inherent limits of the State's power. A judgment
resulting from such an attempt, Mr. Justice Field concluded, was not only unenforceable [433
U.S. 186, 198] in other States, 15 but was also void in the rendering State because it had been
obtained in violation of the Due Process Clause of the Fourteenth Amendment. Id., at 732-733.
See also, e. g., Freeman v. Alderson, 119 U.S. 185, 187-188 (1886).
This analysis led to the conclusion that Mitchell's judgment against Neff could not be validly
based on the State's power over persons within its borders, because Neff had not been personally
served in Oregon, nor had he consensually appeared before the Oregon court. The Court
reasoned that even if Neff had received personal notice of the action, service of process outside
the State would have been ineffectual since the State's power was limited by its territorial
boundaries. Moreover, the Court held, the action could not be sustained on the basis of the
State's power over property within its borders because that property had not been brought before
the court by attachment or any other procedure prior to judgment. 16 Since the judgment which
authorized the sheriff's sale was therefore invalid, the sale transferred no title. Neff regained his
land.
From our perspective, the importance of Pennoyer is not its result, but the fact that its principles
and corollaries derived from them became the basic elements of the constitutional [433 U.S. 186,
199] doctrine governing state-court jurisdiction. See, e. g., Hazard, A General Theory of State-
Court Jurisdiction, 1965 Sup. Ct. Rev. 241 (hereafter Hazard). As we have noted, under Pennoyer
state authority to adjudicate was based on the jurisdiction's power over either persons or
property. This fundamental concept is embodied in the very vocabulary which we use to describe
judgments. If a court's jurisdiction is based on its authority over the defendant's person, the
action and judgment are denominated "in personam" and can impose a personal obligation on
the defendant in favor of the plaintiff. If jurisdiction is based on the court's power over property
within its territory, the action is called "in rem" or "quasi in rem." The effect of a judgment in
such a case is limited to the property that supports jurisdiction and does not impose a personal
liability on the property owner, since he is not before the court. 17 In Pennoyer's terms, the
owner is affected only "indirectly" by an in rem judgment adverse to his interest in the property
subject to the court's disposition.
By concluding that "[t]he authority of every tribunal is necessarily restricted by the territorial
limits of the State in which it is established," 95 U.S., at 720 , Pennoyer sharply limited the
availability of in personam jurisdiction over defendants not resident in the forum State. If a
nonresident defendant could not be found in a State, he could not be sued there. On the other
hand, since the State in which property [433 U.S. 186, 200] was located was considered to have
exclusive sovereignty over that property, in rem actions could proceed regardless of the owner's
location. Indeed, since a State's process could not reach beyond its borders, this Court held after
Pennoyer that due process did not require any effort to give a property owner personal notice
that his property was involved in an in rem proceeding. See, e. g., Ballard v. Hunter, 204 U.S.
241 (1907); Arndt v. Griggs, 134 U.S. 316 (1890); Huling v. Kaw Valley R. Co., 130 U.S.
559 (1889).
The Pennoyer rules generally favored nonresident defendants by making them harder to sue.
This advantage was reduced, however, by the ability of a resident plaintiff to satisfy a claim
against a nonresident defendant by bringing into court any property of the defendant located in
the plaintiff's State. See, e. g., Zammit, Quasi-In-Rem Jurisdiction: Outmoded and
Unconstitutional?, 49 St. John's L. Rev. 668, 670 (1975). For example, in the well-known case of
Harris v. Balk, 198 U.S. 215 (1905), Epstein, a resident of Maryland, had a claim against Balk, a
resident of North Carolina. Harris, another North Carolina resident, owed money to Balk. When
Harris happened to visit Maryland, Epstein garnished his debt to Balk. Harris did not contest the
debt to Balk and paid it to Epstein's North Carolina attorney. When Balk later sued Harris in
North Carolina, this Court held that the Full Faith and Credit Clause, U.S. Const., Art. IV, 1,
required that Harris' payment to Epstein be treated as a discharge of his debt to Balk. This Court
reasoned that the debt Harris owed Balk was an intangible form of property belonging to Balk,
and that the location of that property traveled with the debtor. By obtaining personal jurisdiction
over Harris, Epstein had "arrested" his debt to Balk, 198 U.S., at 223 , and brought it into the
Maryland court. Under the structure established by Pennoyer, Epstein was then entitled to
proceed against that debt to vindicate his claim against Balk, even though Balk himself was not
subject to the jurisdiction [433 U.S. 186, 201] of a Maryland tribunal. 18 See also, e. g.,
Louisville & N. R. Co. v. Deer, 200 U.S. 176 (1906); Steele v. G. D. Searle & Co., 483 F.2d 339
(CA5 1973), cert. denied, 415 U.S. 958 (1974).
Pennoyer itself recognized that its rigid categories, even as blurred by the kind of action typified
by Harris, could not accommodate some necessary litigation. Accordingly, Mr. Justice Field's
opinion carefully noted that cases involving the personal status of the plaintiff, such as divorce
actions, could be adjudicated in the plaintiff's home State even though the defendant could not
be served within that State. 95 U.S., at 733 -735. Similarly, the opinion approved the practice of
considering a foreign corporation doing business in a State to have consented to being sued in
that State. Id., at 735-736; see Lafayette Ins. Co. v. French, 18 How. 404 (1856). This [433 U.S.
186, 202] basis for in personam jurisdiction over foreign corporations was later supplemented
by the doctrine that a corporation doing business in a State could be deemed "present" in the
State, and so subject to service of process under the rule of Pennoyer, See, e. g., International
Harvester Co. v. Kentucky, 234 U.S. 579 (1914); Philadelphia & Reading R. Co. v. McKibbin, 243
U.S. 264 (1917). See generally Note, Developments in the Law, State-Court Jurisdiction, 73 Harv.
L. Rev. 909, 919-923 (1960) (hereafter Developments).
The advent of automobiles, with the concomitant increase in the incidence of individuals causing
injury in States where they were not subject to in personam actions under Pennoyer, required
further moderation of the territorial limits on jurisdictional power. This modification, like the
accommodation to the realities of interstate corporate activities, was accomplished by use of a
legal fiction that left the conceptual structure established in Pennoyer theoretically unaltered. Cf.
Olberding v. Illinois Central R. Co., 346 U.S. 338, 340 -341 (1953). The fiction used was that the
out-of-state motorist, who it was assumed could be excluded altogether from the State's
highways, had by using those highways appointed a designated state official as his agent to
accept process. See Hess v. Pawloski, 274 U.S. 352 (1927). Since the motorist's "agent" could be
personally served within the State, the state courts could obtain in personam jurisdiction over
the nonresident driver.
162 | C o n f l i c t o f L a w s C a s e s
The motorists' consent theory was easy to administer since it required only a finding that the
out-of-state driver had used the State's roads. By contrast, both the fictions of implied consent to
service on the part of a foreign corporation and of corporate presence required a finding that the
corporation was "doing business" in the forum State. Defining the criteria for making that
finding and deciding whether they were met absorbed much judicial energy. See, e. g.,
International Shoe [433 U.S. 186, 203] Co. v. Washington, 326 U.S., at 317-319. While the
essentially quantitative tests which emerged from these cases purported simply to identify
circumstances under which presence or consent could be attributed to the corporation, it became
clear that they were in fact attempting to ascertain "what dealings make it just to subject a
foreign corporation to local suit." Hutchinson v. Chase & Gilbert, 45 F.2d 139, 141 (CA2 1930) (L.
Hand, J.). In International Shoe, we acknowledged that fact.
The question in International Shoe was whether the corporation was subject to the judicial and
taxing jurisdiction of Washington. Mr. Chief Justice Stone's opinion for the Court began its
analysis of that question by noting that the historical basis of in personam jurisdiction was a
court's power over the defendant's person. That power, however, was no longer the central
concern:
"But now that the capias ad respondendum has given way to personal service of summons or
other form of notice, due process requires only that in order to subject a defendant to a judgment
in personam, if he be not present within the territory of the forum, he have certain minimum
contacts with it such that the maintenance of the suit does not offend `traditional notions of fair
play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463 ." 326 U.S., at 316 .
Thus, the inquiry into the State's jurisdiction over a foreign corporation appropriately focused
not on whether the corporation was "present" but on whether there have been
"such contacts of the corporation with the state of the forum as make it reasonable, in the
context of our federal system of government, to require the corporation to defend the particular
suit which is brought there." Id., at 317. [433 U.S. 186, 204]
Mechanical or quantitative evaluations of the defendant's activities in the forum could not
resolve the question of reasonableness:
"Whether due process is satisfied must depend rather upon the quality and nature of the activity
in relation to the fair and orderly administration of the laws which it was the purpose of the due
process clause to insure. That clause does not contemplate that a state may make binding a
judgment in personam against an individual or corporate defendant with which the state has no
contacts, ties, or relations." Id., at 319. 19
Thus, the relationship among the defendant, the forum, and the litigation, rather than the
mutually exclusive sovereignty of the States on which the rules of Pennoyer rest, became the
central concern of the inquiry into personal jurisdiction. 20 The immediate effect of this
departure from Pennoyer's conceptual apparatus was to increase the ability of the state courts to
obtain personal jurisdiction over nonresident defendants. See, e. g., Green, Jurisdictional
Reform in California, [433 U.S. 186, 205] 21 Hastings L. J. 1219, 1231-1233 (1970); Currie, The
Growth of the Long Arm: Eight Years of Extended Jurisdiction in Illinois, 1963 U. Ill. L. F. 533;
Developments 1000-1008.
No equally dramatic change has occurred in the law governing jurisdiction in rem. There have,
however, been intimations that the collapse of the in personam wing of Pennoyer has not left
that decision unweakened as a foundation for in rem jurisdiction. Well-reasoned lower court
opinions have questioned the proposition that the presence of property in a State gives that State
jurisdiction to adjudicate rights to the property regardless of the relationship of the underlying
dispute and the property owner to the forum. See, e. g., U.S. Industries, Inc. v. Gregg, 540 F.2d
142 (CA3 1976), cert. pending, No. 76-359; Jonnet v. Dollar Savings Bank, 530 F.2d 1123, 1130-
1143 (CA3 1976) (Gibbons, J., concurring); Camire v. Scieszka, 116 N. H. 281, 358 A. 2d 397
(1976); Bekins v. Huish, 1 Ariz. App. 258, 401 P.2d 743 (1965); Atkinson v. Superior Court, 49
Cal. 2d 338, 316 P.2d 960 (1957), appeal dismissed and cert. denied sub nom. Columbia
Broadcasting System v. Atkinson, 357 U.S. 569 (1958). The overwhelming majority of
commentators have also rejected Pennoyer's premise that a proceeding "against" property is not
a proceeding against the owners of that property. Accordingly, they urge that the "traditional
notions of fair play and substantial justice" that govern a State's power to adjudicate in personam
should also govern its power to adjudicate personal rights to property located in the State. See, e.
g., Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev.
1121 (1966) (hereafter Von Mehren & Trautman); Traynor, Is This Conflict Really Necessary?, 37
Texas L. Rev. 657 (1959) (hereafter Traynor); Ehrenzweig, The Transient Rule of Personal
Jurisdiction: The "Power" Myth and Forum Conveniens, 65 Yale L. J. 289 (1956); Developments;
Hazard. [433 U.S. 186, 206]
Although this Court has not addressed this argument directly, we have held that property cannot
be subjected to a court's judgment unless reasonable and appropriate efforts have been made to
give the property owners actual notice of the action. Schroeder v. City of New York, 371 U.S.
208 (1962); Walker v. City of Hutchinson,352 U.S. 112 (1956); Mullane v. Central Hanover Bank
& Trust Co., 339 U.S. 306 (1950). This conclusion recognizes, contrary to Pennoyer, that an
adverse judgment in rem directly affects the property owner by divesting him of his rights in the
property before the court. Schroeder v. City of New York, supra, at 213; cf. Continental Grain Co.
v. Barge FBL-585, 364 U.S. 19 (1960) (separate actions against barge and barge owner are one
"civil action" for purpose of transfer under 28 U.S.C. 1404 (a)). Moreover, in Mullane we held
that Fourteenth Amendment rights cannot depend on the classification of an action as in rem or
in personam, since that is
"a classification for which the standards are so elusive and confused generally and which, being
primarily for state courts to define, may and do vary from state to state." 339 U.S., at 312 .
It is clear, therefore, that the law of state-court jurisdiction no longer stands securely on the
foundation established in Pennoyer. 21 We think that the time is ripe to consider whether the
standard of fairness and substantial justice set forth in International Shoe should be held to
govern actions in rem as well as in personam. [433 U.S. 186, 207]
III
The case for applying to jurisdiction in rem the same test of "fair play and substantial justice" as
governs assertions of jurisdiction in personam is simple and straightforward. It is premised on
recognition that "[t]he phrase, `judicial jurisdiction over a thing,' is a customary elliptical way of
referring to jurisdiction over the interests of persons in a thing." Restatement (Second) of
Conflict of Laws 56, Introductory Note (1971) (hereafter Restatement). 22 This recognition leads
to the conclusion that in order to justify an exercise of jurisdiction in rem, the basis for
jurisdiction must be sufficient to justify exercising "jurisdiction over the interests of persons in a
thing." 23 The standard for determining whether an exercise of jurisdiction over the interests of
persons is consistent with the Due Process Clause is the minimum-contacts standard elucidated
in International Shoe.
163 | C o n f l i c t o f L a w s C a s e s
This argument, of course, does not ignore the fact that the presence of property in a State may
bear on the existence of jurisdiction by providing contacts among the forum State, the defendant,
and the litigation. For example, when claims to the property itself are the source of the
underlying controversy between the plaintiff and the defendant, 24 it would be unusual for the
State where the property is located not to have jurisdiction. In such cases, the defendant's claim
to property [433 U.S. 186, 208] located in the State would normally 25indicate that he expected
to benefit from the State's protection of his interest. 26 The State's strong interests in assuring
the marketability of property within its borders 27 and in providing a procedure for peaceful
resolution of disputes about the possession of that property would also support jurisdiction, as
would the likelihood that important records and witnesses will be found in the State. 28 The
presence of property may also favor jurisdiction in cases, such as suits for injury suffered on the
land of an absentee owner, where the defendant's ownership of the property is conceded but the
cause of action is otherwise related to rights and duties growing out of that ownership. 29
It appears, therefore, that jurisdiction over many types of actions which now are or might be
brought in rem would not be affected by a holding that any assertion of state-court jurisdiction
must satisfy the International Shoe standard. 30 For the type of quasi in rem action typified by
Harris v. Balk and the present case, however, accepting the proposed analysis would result in
significant change. These are cases where [433 U.S. 186, 209] the property which now serves as
the basis for state-court jurisdiction is completely unrelated to the plaintiff's cause of action.
Thus, although the presence of the defendant's property in a State might suggest the existence of
other ties among the defendant, the State, and the litigation, the presence of the property alone
would not support the State's jurisdiction. If those other ties did not exist, cases over which the
State is now thought to have jurisdiction could not be brought in that forum.
Since acceptance of the International Shoe test would most affect this class of cases, we examine
the arguments against adopting that standard as they relate to this category of
litigation. 31 Before doing so, however, we note that this type of case also presents the clearest
illustration of the argument in favor of assessing assertions of jurisdiction by a single standard.
For in cases such as Harris and this one, the only role played by the property is to provide the
basis for bringing the defendant into court. 32 Indeed, the express purpose of the Delaware
sequestration procedure is to compel the defendant to enter a personal appearance. 33 In such
cases, if a direct assertion of personal jurisdiction over the defendant would violate the
Constitution, it would seem that an indirect assertion of that jurisdiction should be equally
impermissible. [433 U.S. 186, 210]
The primary rationale for treating the presence of property as a sufficient basis for jurisdiction to
adjudicate claims over which the State would not have jurisdiction if International Shoe applied
is that a wrongdoer
"should not be able to avoid payment of his obligations by the expedient of removing his assets
to a place where he is not subject to an in personam suit." Restatement 66, Comment a.
Accord, Developments 955. This justification, however, does not explain why jurisdiction should
be recognized without regard to whether the property is present in the State because of an effort
to avoid the owner's obligations. Nor does it support jurisdiction to adjudicate the underlying
claim. At most, it suggests that a State in which property is located should have jurisdiction to
attach that property, by use of proper procedures, 34 as security for a judgment being sought in a
forum where the litigation can be maintained consistently with International Shoe. See, e. g.,
Von Mehren & Trautman 1178; Hazard 284-285; Beale, supra, n. 18, at 123-124. Moreover, we
know of nothing to justify the assumption that a debtor can avoid paying his obligations by
removing his property to a State in which his creditor cannot obtain personal jurisdiction over
him. 35 The Full Faith and Credit Clause, after all, makes the valid in personam judgment of one
State enforceable in all other States. 36 [433 U.S. 186, 211]
It might also be suggested that allowing in rem jurisdiction avoids the uncertainty inherent in
the International Shoe standard and assures a plaintiff of a forum. 37 See Folk & Moyer, supra,
n. 10, at 749, 767. We believe, however, that the fairness standard of International Shoe can be
easily applied in the vast majority of cases. Moreover, when the existence of jurisdiction in a
particular forum under International Shoe is unclear, the cost of simplifying the litigation by
avoiding the jurisdictional question may be the sacrifice of "fair play and substantial justice."
That cost is too high.
We are left, then, to consider the significance of the long history of jurisdiction based solely on
the presence of property in a State. Although the theory that territorial power is both essential to
and sufficient for jurisdiction has been undermined, we have never held that the presence of
property in a State does not automatically confer jurisdiction over the owner's interest in that
property. 38 This history must be [433 U.S. 186, 212] considered as supporting the proposition
that jurisdiction based solely on the presence of property satisfies the demands of due process,
cf. Ownbey v. Morgan, 256 U.S. 94, 111 (1921), but it is not decisive. "[T]raditional notions of fair
play and substantial justice" can be as readily offended by the perpetuation of ancient forms that
are no longer justified as by the adoption of new procedures that are inconsistent with the basic
values of our constitutional heritage. Cf. Sniadach v. Family Finance Corp., 395 U.S., at 340 ;
Wolf v. Colorado, 338 U.S. 25, 27 (1949). The fiction that an assertion of jurisdiction over
property is anything but an assertion of jurisdiction over the owner of the property supports an
ancient form without substantial modern justification. Its continued acceptance would serve
only to allow state-court jurisdiction that is fundamentally unfair to the defendant.
We therefore conclude that all assertions of state-court jurisdiction must be evaluated according
to the standards set forth in International Shoe and its progeny. 39 [433 U.S. 186, 213]
IV
The Delaware courts based their assertion of jurisdiction in this case solely on the statutory
presence of appellants' property in Delaware. Yet that property is not the subject matter of this
litigation, nor is the underlying cause of action related to the property. Appellants' holdings in
Greyhound do not, therefore, provide contacts with Delaware sufficient to support the
jurisdiction of that State's courts over appellants. If it exists, that jurisdiction must have some
other foundation. 40
Appellee Heitner did not allege and does not now claim that appellants have ever set foot in
Delaware. Nor does he identify any act related to his cause of action as having taken place in
Delaware. Nevertheless, he contends that appellants' positions as directors and officers of a
corporation chartered in Delaware 41 provide sufficient "contacts, ties, or relations,"
International Shoe Co. v. Washington, 326 U.S., at [433 U.S. 186, 214] 319, with that State to
give its courts jurisdiction over appellants in this stockholder's derivative action. This argument
is based primarily on what Heitner asserts to be the strong interest of Delaware in supervising
the management of a Delaware corporation. That interest is said to derive from the role of
Delaware law in establishing the corporation and defining the obligations owed to it by its
officers and directors. In order to protect this interest, appellee concludes, Delaware's courts
must have jurisdiction over corporate fiduciaries such as appellants.
This argument is undercut by the failure of the Delaware Legislature to assert the state interest
appellee finds so compelling. Delaware law bases jurisdiction, not on appellants' status as
corporate fiduciaries, but rather on the presence of their property in the State. Although the
164 | C o n f l i c t o f L a w s C a s e s
sequestration procedure used here may be most frequently used in derivative suits against
officers and directors, Hughes Tool Co. v. Fawcett Publications, Inc., 290 A. 2d 693, 695 (Del.
Ch. 1972), the authorizing statute evinces no specific concern with such actions. Sequestration
can be used in any suit against a nonresident, 42 see, e. g., U.S. Industries, Inc. v. Gregg, 540
F.2d 142 (CA3 1976), cert. pending, No. 76-359 (breach of contract); Hughes Tool Co. v. Fawcett
Publications, Inc., supra (same), and reaches corporate fiduciaries only if they happen to own
interests in a Delaware corporation, or other property in the State. But as Heitner's failure to
secure jurisdiction over seven of the defendants named in his complaint demonstrates, there is
no necessary relationship between holding a position as a corporate fiduciary and owning stock
or other interests in the corporation. 43 If Delaware perceived its interest in securing jurisdiction
over corporate fiduciaries [433 U.S. 186, 215] to be as great as Heitner suggests, we would
expect it to have enacted a statute more clearly designed to protect that interest.
Moreover, even if Heitner's assessment of the importance of Delaware's interest is accepted, his
argument fails to demonstrate that Delaware is a fair forum for this litigation. The interest
appellee has identified may support the application of Delaware law to resolve any controversy
over appellants' actions in their capacities as officers and directors. 44 But we have rejected the
argument that if a State's law can properly be applied to a dispute, its courts necessarily have
jurisdiction over the parties to that dispute.
"[The State] does not acquire . . . jurisdiction by being the `center of gravity' of the controversy,
or the most convenient location for litigation. The issue is personal jurisdiction, not choice of
law. It is resolved in this case by considering the acts of the [appellants]." Hanson v.
Denckla, 357 U.S. 235, 254 (1958). 45
Appellee suggests that by accepting positions as officers or directors of a Delaware corporation,
appellants performed the acts required by Hanson v. Denckla. He notes that Delaware law
provides substantial benefits to corporate officers and directors, 46 and that these benefits were
at least in part [433 U.S. 186, 216] the incentive for appellants to assume their positions. It is,
he says, "only fair and just" to require appellants, in return for these benefits, to respond in the
State of Delaware when they are accused of misusing their power. Brief for Appellee 15.
But like Heitner's first argument, this line of reasoning establishes only that it is appropriate for
Delaware law to govern the obligations of appellants to Greyhound and its stockholders. It does
not demonstrate that appellants have "purposefully avail[ed themselves] of the privilege of
conducting activities within the forum State," Hanson v. Denckla, supra, at 253, in a way that
would justify bringing them before a Delaware tribunal. Appellants have simply had nothing to
do with the State of Delaware. Moreover, appellants had no reason to expect to be haled before a
Delaware court. Delaware, unlike some States, 47 has not enacted a statute that treats
acceptance of a directorship as consent to jurisdiction in the State. And "[i]t strains reason . . . to
suggest that anyone buying securities in a corporation formed in Delaware `impliedly consents'
to subject himself to Delaware's . . . jurisdiction on any cause of action." Folk & Moyer, supra, n.
10, at 785. Appellants, who were not required to acquire interests in Greyhound in order to hold
their positions, did not by acquiring those interests surrender their right to be brought to
judgment only in States with which they had had "minimum contacts."
The Due Process Clause
"does not contemplate that a state may make binding a judgment . . . against an individual or
corporate defendant with which the state has no contacts, ties, or relations." International Shoe
Co. v. Washington, 326 U.S., at 319 .
Delaware's assertion of jurisdiction over appellants in this case is inconsistent with that
constitutional limitation on [433 U.S. 186, 217] state power. The judgment of the Delaware
Supreme Court must, therefore, be reversed.
It is so ordered.
G.R. No. 47517 June 27, 1941
IDONAH SLADE PERKINS, petitioner,
vs.
MAMERTO ROXAS, ET AL., respondents.
Alva J. Hill for petitioner.
DeWitt, Perkins & Ponce Enrile for respondent Judge and respondent Perkins.
Ross, Lawrence, Selph & Carrascoso, Jr., for respondent Benguet Consolidated Mining Co.
LAUREL, J.:
On July 5, 1938, the respondent Eugene Arthur Perkins, filed a complaint in the Court of First
Instance of Manila against the Benguet Consolidated Mining Company for the recovery of the
sum of P71,379.90, consisting of dividends which have been declared and made payable 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 plaintiff's right to the disposal and control of the shares was due
to certain demands made with respect to said shares by the petitioner herein. Idonah Slade
Perkins, and by one George H. Engelhard. The answer prays that the adverse claimants be
made parties to the action and served with notice thereof by publication, and that thereafter all
such parties be required to interplead and settle the rights among themselves.
On September 5, 1938, the trial court ordered the respondent, Eugene Arthur Perkins, to include
in his complaint as parties defendants petitioner, Idonah Slade Perkins, and George H.
Engelhard. The complaint was accordingly amended and in addition to the relief prayed for in the
original complaint, respondent Perkins prayed that petitioner Idonah Slade Perkins and George
H. Engelhard be adjudged without interest in the shares of stock in question and excluded from
any claim they assert thereon. Thereafter, summons by publication were served upon the non-
resident defendants, Idonah Slade Perkins and George H. Engelhard, pursuant to the order of
the trial court. On December 9, 1938, Engelhard filed his answer to the amended complaint, and
on January 8, 1940, petitioner's objection to the court's jurisdiction over her person having been
overruled by the trial court and by this court in G. R. No. 46831, petitioner filed her answer with a
cross-complaint in which she sets up a judgment allegedly obtained by her against respondent,
Eugene Arthur Perkins, from the Supreme Court of the State of New York, wherein it is declared
that she is the sole legal owner and entitled to the possession and control of the shares of stock
in question together with all the cash dividends declared thereon by the Benguet Consolidated
Mining Company, and prays for various affirmative reliefs against the respondent. To the answer
and cross-complaint thus filed, the respondent, Eugene Arthur Perkins, filed a reply and an
answer in which he sets up several defenses to the enforcement in this jurisdiction of the
judgment of the Supreme Court of the State of New York above alluded to. Instead of demurring
to the reply on either of the two grounds specified in section 100 of the Code of Civil Procedure,
petitioner, Idonah Slade Perkins, on June 5, 1940, filed a demurrer thereto on the ground that
165 | C o n f l i c t o f L a w s C a s e s
"the court has no jurisdiction of the subject of the action," because the alleged judgment of the
Supreme Court of the State of New York is res judicata.
Petitioner's demurrer having been overruled, she now filed in this court a petition entitled
"Certiorari, Prohibition and Mandamus," alleging that "the respondent judge is about to and will
render judgment in the above-mentioned case disregarding the constitutional rights of this
petitioner; contrary to and annulling the final, subsisting, valid judgment rendered and entered in
this petitioner's favor by the courts of the State of New York, ... which decision is res judicata on
all the questions constituting the subject matter of civil case No. 53317, of the Court of First
Instance of Manila; and which New York judgment the Court of First Instance of Manila is without
jurisdiction to annul, amend, reverse, or modify in any respect whatsoever"; and praying that the
order of the respondent judge overruling the demurrer be annulled, and that he and his
successors be permanently prohibited from taking any action on the case, except to dismiss the
same.
The only question here to be determined, therefore, is whether or not, in view of the alleged
judgment entered in favor of the petitioner by the Supreme Court of New York, and which is
claimed by her to be res judicata on all questions raised by the respondent, Eugene Arthur
Perkins, in civil case No. 53317 of the Court of First Instace of Manila, the local court has
jurisdiction over the subject matter of the action in the said case. By jurisdiction over the subject
matter is meant the nature of the cause of action and of the relief sought, and this is conferred
by the sovereign authority which organizes the court, and is to be sought for in general nature of
its powers, or in authority specially conferred. In the present case, the amended complaint filed
by the respondent, Eugene Arthur Perkins, in the court below alleged the ownership in himself of
the conjugal partnership between him and his wife, Idonah Slade Perkins; that the petitioner,
Idonah Slade Perkins, and George H. Engelhard assert claims to and interests in the said stock
adverse to Eugene Arthur Perkins; that such claims are invalid, unfounded, and made only for
the purpose of vexing, hindering and delaying Eugene Arthur Perkins in the exercise of the
lawful control over and use of said shares and dividends accorded to him and by law and by
previous orders and decrees of this court; and the said amended complaint prays, inter alia,
"that defendant Benguet Consolidated Mining Company be required and ordered to recognize
the right of the plaintiff to the control and disposal of said shares so standing in his name to the
exclusion of all others; that the additional defendants, Idonah Slade Perkins and George H.
Engelhard, be each held to have no interest or claim in the subject matter of the controversy
between plaintiff and defendant Benguet Consolidated Mining Company, or in or under the
judgment to be rendered herein and that by said judgment they, and each of them be excluded
therefrom; and that the plaintiff be awarded the costs of this suit and general relief." The
respondent's action, therefore, calls for the adjudication of title to certain shares of stock of the
Benguet Consolidated Mining Company, and the granting of affirmative reliefs, which fall within
the general jurisdiction of the Court of First Instance of Manila. (Vide: sec. 146, et seq., Adm.
Code, as amended by Commonwealth Act No. 145; sec. 56, Act No. 136, as amended by Act
No. 400.)
Similarly, the Court of First Instance of Manila is empowered to adjudicate the several demands
contained in petitioner's cross-complaint. The cross-complaint sets up a judgment allegedly
recovered by Idonah Slade Perkins against Eugene Arthur Perkins in the Supreme Court of New
York and by way of relief prays:
(1) Judgment against the plaintiff Eugene Arthur Perkins in the sum of one hundred
eighty-five thousand and four hundred dollars ($185,400), representing cash dividends
paid to him by defendant Benguet Consolidated Mining Co. from February, 1930, up to
and including the dividend of March 30, 1937.
 (2) That plaintiff Eugene Arthur Perkins be required to deliver to this defendant the The petition is, therefore, hereby denied, with costs against the petitioner. So ordered.
certificates representing the 48,000 shares of capital stock of Benguet Consolidated
Mining Co. issued as a stock dividend on the 24,000 shares owned by this defendant
as described in the judgment Exhibit 1-A.

(3) That this defendant recover under that judgment Exhibit 1-A interest upon the
amount of each cash dividend referred to in that judgment received by plaintiff Eugene
Arthur Perkins from February, 1930, to and including the dividend of March 30, 1937,
from the date of payment of each of such dividends at the rate of 7 per cent per
annum until paid.

(4) That this defendant recover of plaintiff her costs and disbursements in that New
York action amounting to the sum of one thousand five hundred eighty-four and 20/00
dollars ($1,584.20), and the further sum of two thousand dollars ($2,000) granted her
in that judgment Exhibit 1-A as an extra allowance, together with interest.

(5) For an order directing an execution to be issued in favor of this defendant and
against the plaintiff for amounts sufficient to satisfy the New York judgment Exhibit 1-A
in its entirety, and against the plaintiff and the defendant Benguet Consolidated Mining
Co. for such other amounts prayed for herein as this court may find to be due and
payable by each of them; and ordering them to comply with all other orders which this
court may issue in favor of the defendant in this case.

(6) For the costs of this action, and

(7) For such other relief as may be appropriate and proper in the premises.

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

The petitioner expresses the fear that the respondent judge may render judgment "annulling the
final, subsisting, valid judgment rendered and entered in this petitioner's favor by the courts of
the State of New York, ... which decision is res judicata on all the questions constituting the
subject matter of civil case No. 53317," and argues on the assumption that the respondent judge
is without jurisdiction to take cognizance of the cause. Whether or not the respondent judge in
the course of the proceedings will give validity and efficacy to the New York judgment set up by
the petitioner in her cross-complaint is a question that goes to the merits of the controversy and
relates to the rights of the parties as between each other, and not to the jurisdiction or power of
the court. The test of jurisdiction is whether or not the tribunal has power to enter upon the
inquiry, not whether its conclusion in the course of it is right or wrong. If its decision is erroneous,
its judgment case be reversed on appeal; but its determination of the question, which the
petitioner here anticipates and seeks to prevent, is the exercise by that court — and the rightful
exercise — of its jurisdiction.

166 | C o n f l i c t o f L a w s C a s e s