HONGKONG AND SHANGHAI BANKING CORPORATION (HSBC) vs.
SHERMAN et al play and
G.R. No. 72494
August 11, 1989
FACTS: It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd.
(COMPANY), a company incorporated in Singapore applied with and was granted by HSBC
Singapore branch an overdraft facility in the maximum amount of Singapore dollars
200,000 with interest at 3% over HSBC prime rate, payable monthly, on amounts due
under said overdraft facility.
As a security for the repayment by the COMPANY of sums advanced by HSBC to it through
the aforesaid overdraft facility, in 1982, both private respondents and a certain Lowe, all
of whom were directors of the COMPANY at such time, executed a Joint and Several
Guarantee in favor of HSBC 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. …
The COMPANY failed to pay its obligation. Thus, HSBC demanded payment and inasmuch
as the private respondents still failed to pay, HSBC filed A complaint for collection of a sum
of money against private respondents Sherman and Reloj before RTC of Quezon City.
Private respondents filed an MTD on the ground of lack of jurisdiction over the subject
matter. The trial court denied the motion. They then filed before the respondent IAC a
petition for prohibition with preliminary injunction and/or prayer for a restraining order.
The IAC rendered a decision enjoining the RTC Quezon City 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. MR denied, hence this petition.
ISSUE: Do Philippine courts have jurisdiction over the suit, vis-a-vis the Guarantee
stipulation regarding jurisdiction?
HELD: YES
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
substantial justice
The defense of private respondents that the complaint should have been filed in
Singapore is based merely on technicality. They did not even claim, much less prove, that
the filing of the action here will cause them any unnecessary trouble, damage, or expense.
On the other hand, there is no showing that petitioner BANK filed the action here just to
harass private respondents.
**
In the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., where the stipulation was “[i]n
case of litigation, jurisdiction shall be vested in the Court of Davao City.” We held:
Anent the claim that Davao City had been stipulated as the venue, suffice it to say that a
stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or
defendant under Section 2 (b), Rule 4, ROC, in the absence of qualifying or restrictive
words in the agreement which would indicate that the place named is the only venue
agreed upon by the parties.
Applying the foregoing to the case at bar, the parties did not thereby stipulate that only
the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the
clause in question operate to divest Philippine courts of jurisdiction. In International Law,
jurisdiction is often defined as the light of a State to exercise authority over persons and
things within its boundaries subject to certain exceptions. Thus, a State does not assume
jurisdiction over travelling sovereigns, ambassadors and diplomatic representatives of
other States, and foreign military units stationed in or marching through State territory
with the permission of the latter’s authorities. This authority, which finds its source in the
concept of sovereignty, is exclusive within and throughout the domain of the State. A
State is competent to take hold of any judicial matter it sees fit by making its courts and
agencies assume jurisdiction over all kinds of cases brought before them
NOTES:
The respondent IAC likewise ruled that:
… In a conflict problem, a court will simply refuse to entertain the case if it is not
authorized by law to exercise jurisdiction. And even if it is so authorized, it may still refuse
to entertain the case by applying the principle of forum non conveniens. …
However, whether a suit should be entertained or dismissed on the basis of the principle
of forum non conveniens depends largely upon the facts of the particular case and is
1
 addressed to the sound discretion of the trial court. Thus, the IAC should not have relied
on such principle.
Bellis v. Bellis
FACTS:
 Amos G. Bellis, a citizen of the State of Texas and of the United States.
 By his first wife, Mary E. Mallen, whom he divorced, he had 5 legitimate
children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy),
Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman
 By his second wife, Violet Kennedy, who survived him, he had 3 legitimate
children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had
three illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam
Palma Bellis
 August 5, 1952: Amos G. Bellis executed a will in the Philippines dividing his
estate as follows:
1. $240,000.00 to his first wife, Mary E. Mallen
2. P40,000.00 each to his 3 illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam
Palma Bellis
3. remainder shall go to his seven surviving children by his first and second wives
 July 8, 1958: Amos G. Bellis died a resident of Texas, U.S.A
 September 15, 1958: his will was admitted to probate in the CFI of Manila on
 People's Bank and Trust Company as executor of the will did as the will directed
 Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions
on the ground that they were deprived of their legitimes as illegitimate children
 Probate Court: Relying upon Art. 16 of the Civil Code, it applied the national law
of the decedent, which in this case is Texas law, which did not provide for
legitimes.
ISSUE: W/N Texas laws or national law of Amos should govern the intrinsic validity of the
will
HELD: YES. Order of the probate court is hereby affirmed
 Doctrine of Processual Presumption:
 The foreign law, whenever applicable, should be proved by the proponent
thereof, otherwise, such law shall be presumed to be exactly the same as the
law of the forum.
 In the absence of proof as to the conflict of law rule of Texas, it should not be
presumed different from ours. Apply Philippine laws.
 Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national
law of the decedent, in intestate or testamentary successions, with regard to
four items: (a) the order of succession; (b) the amount of successional rights; (e)
the intrinsic validity of the provisions of the will; and (d) the capacity to succeed.
They provide that —
 ART. 16. Real property as well as personal property is subject to the law of the
country where it is situated.
However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.
 ART. 1039. Capacity to succeed is governed by the law of the nation of the
decedent.
 The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of
Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or
legitimes. Accordingly, since the intrinsic validity of the provision of the will and
the amount of successional rights are to be determined under Texas law, the
Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis
Pakistan International Airlines Corporation vs. Hon. Blas F. Ople
G.R. No. 61594, September 28, 1990
190 SCRA 90
Petition for certiorari to review the order of the Minister of Labor.
FACTS:
On 2 December 1978, petitioner Pakistan International Airlines Corporation (PIA), a
foreign corporation licensed to do business in the Philippines, executed in Manila two (2)
separate contracts of employment, one with private respondent Ethelynne B. Farrales and
the other with private respondent Ma. M.C. Mamasig. The contracts became effective on
9 January 1979 and provided for the duration of employment and penalty, termination
and the applicable law which is of Pakistan’s. They were trained in Pakistan and worked as
flight attendants with base station in Manila and flying assignments to different parts of
the Middle East and Europe.
A year and four (4) months prior to the expiration of the contracts of employment, they
received separate letters informing them that their services would be terminated.
2
Private respondents Farrales and Mamasig jointly instituted a complaint for illegal
dismissal and non-payment of company benefits and bonuses, against PIA with the then
Ministry of Labor and Employment. Several attempts at conciliation were not fruitful.
ISSUES:
1. Whether or not the Regional Director, MOLE, had jurisdiction over the subject
matter of the complaint initiated by private respondents for illegal dismissal,
jurisdiction over the same being lodged in the Arbitration Branch of the National
Labor Relations Commission (“NLRC”).
2. Whether or not the order of the Regional Director had been issued in violation
of petitioner’s right to procedural due process.
3. Whether or not the employment contract is the governing law between the
parties and not the provisions of the Labor Code.
4. ADR ISSUE: WON the provision in the contract that the venue for settlement of
any dispute arising out of or in connection with the agreement is to be resolved
only in courts of Karachi Pakistan is valid.
RULING:
1. At the time the complaint was initiated in September 1980 and at the time the Orders
assailed were rendered on January 1981 (by Regional Director Francisco L. Estrella) and
August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional Director had
jurisdiction over termination cases. Art. 278 of the Labor Code, as it then existed, forbade
the termination of the services of employees with at least one (1) year of service without
prior clearance from the Department of Labor and Employment.
2. No. Petitioner was given an opportunity to submit its position paper and evidence they
had.
3. The principle of party autonomy in contracts is not an absolute principle. The rule in
Article 1306 of the Civil Code is that the contracting parties may establish such stipulations
as they may deem convenient, “provided they are not contrary to law, morals, good
customs, public order or public policy.” Thus, 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. The law relating to labor and employment are impressed with public
interest. Paragraph 5 of that employment contract was inconsistent with Articles 280 and
281 of the Labor Code and thus, cannot be given effect.
4. These circumstances – the employer-employee relationship between the parties; the
contract being not only executed in the Philippines, but also performed here, at least
partially; private respondents are Philippine citizens and petitioner, although a foreign
corporation, is licensed to do business and actually doing business and hence resident in
the Philippines; lastly, private respondents were based in the Philippines in between their
assigned flights to the Middle East and Europe – show that the Philippine courts and
administrative agencies are the proper fora for the resolution of contractual disputes
between the parties. The employment agreement cannot be given effect so as to bar
Philippine agencies and courts vested with jurisdiction by Philippine law. Moreover, PIA
failed to plead and proved the contents of Pakistan law on the matter, it is therefore
presumed that the applicable provisions of the law of Pakistan are the same as the
applicable provisions of Philippine law. Hence, the provision in the contract that the venue
for settlement of any dispute arising out of or in connection with the agreement is to be
resolved only in courts of Karachi Pakistan is not valid.
Contracts; Parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest. The
principle of party autonomy in contracts is not absolute. – A contract freely entered into
should, of course, be respected, as PIA argues, since a contract is the law between the
parties. The principle of party autonomy in contracts is not, however, an absolute
principle. The rule in Article 1306, of our Civil Code is that the contracting parties may
establish such stipulations as they may deem convenient, “provided they are not contrary
to law, morals, good customs, public order or public policy.” Thus, 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. The law relating to
labor and employment is clearly such an area and parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by
simply contracting with each other. It is thus necessary to appraise the contractual
provisions invoked by petitioner PIA in terms of their consistency with applicable
Philippine law and regulations.
Zalamea vs. Court of Appeals 288 SCRA 23 (1993)
FACTS:
Spouses Cesar and Suthira Zalamea, and their daughter, Liana Zalamea, purchased three
(3) airline tickets from the Manila agent of respondent TransWorld Airlines, Inc. (TWA) for
3
a flight from New York to Los Angeles on June 6, 1984. The tickets of the spouses were
purchased at a discount of 75% while that of their daughter was a full fare ticket. All three
tickets represented confirmed reservations. ISSUE:

Whether or not the CA erred in accepting the finding that overbooking is specifically
allowed by the US Code of Federal Regulations and in holding that there was no fraud or
While in New York, on June 4, 1984, the spouses Zalamea and their daughter received a bad faith on the part of TWA ?
notice of reconfirmation of their reservations for said flight. On the appointed date,
however, the spouses Zalamea and their daughter checked in at 10:00 am, an hour earlier
than the scheduled flight at 11:00 am but were placed on the wait-list because the
HELD:
number of passengers who checked in before tem had already taken all the seats available
on the flight.
The CA was in error. There was fraud or bad faith on the part of TWA when it did not allow
Mrs. Zalamea and her daughter to board their flight for Los Angeles in spite of confirmed
tickets. The US law or regulation allegedly authorizing overbooking has never been
Out of the 42 names on the wait-list, the first 22 names were eventually allowed to board proved.
the flight to Los Angeles, including Cesar Zalamea. The two others, on the other hand,
being ranked lower than 22, were not able to fly. As it were, those holding full-fare ticket
were given first priority among the wait-listed passengers. Mr. Zalamea, who was holding
1.) Foreign laws do not prove themselves nor can the court take judicial notice of them.
the full-fare ticket of his daughter, was allowed to board the plane; while his wife and
Like any other fact, they must be alleged and proved. Written law may be evidenced by an
daughter, who presented the discounted tickets were denied boarding. Even in the next
official publication thereof or by a copy attested by the officers having legal custody of the
TWA flight to Los Angeles, Mrs. Zalamea and her daughter, could not be accommodated
record, or by his deputy and accompanied with a certificate that such officer has custody.
because it was full booked. Thus, they were constrained to book in another flight and
The certificate may be made by a secretary of an embassy or legation, consul-general,
purchased two tickets from American Airlines.
consul, vice-consul, or consular agent or by any officer in the foreign service of the Phil.
stationed in the foreign country in which the record is kept and authenticated by the seal
of his office. Here, TWA relied solely on the testimony of its customer service agent in her
Upon their arrival in the Philippines, the spouses Zalamea filed an action for damages deposition that the Code of Federal Regulations of the Civil Aeronautic Board allows
based on breach of contract of air carriage before the RTC of Makati which rendered a overbooking. Aside from said statement, no official publication of said code was
decision in their favor ordering the TWA to pay the price of the tickets bought from presented as evidence. Thus, the CA’s finding that overbooking is specifically allowed by
American Airlines together with moral damages and attorney’s fees. On appeal, the CA the US Code of Federal Regulations has no basis in fact.
held that moral damages are recoverable in a damage suit predicated upon a breach of
contract of carriage only where there is fraud or bad faith. It further stated that since it is
a matter of record that overbooking of flights is a common and accepted practice of
"That there was fraud or bad faith on the part of respondent airline when it did not allow
airlines in the United States and is specifically allowed under the Code of Federal
petitioners to board their flight for Los Angeles in spite of confirmed tickets cannot be
Regulations by the Civil Aeronautics Board, neither fraud nor bad faith could be imputed
disputed. The U.S. law or regulation allegedly authorizing overbooking has never been
on TWA.

4
proved. Foreign laws do not prove themselves nor can the courts take judicial notice of
them. Like any other fact, they must be alleged and proved. Written law 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 with a certificate that such
officer has custody. The certificate may be made by a secretary of an 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.
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer
service agent, in her deposition dated January 27, 1986 that the Code of Federal
Regulations of the Civil Aeronautics Board allows overbooking. Aside from said statement,
no official publication of said code was presented as evidence. Thus, respondent court's
finding that overbooking is specifically allowed by the US Code of Federal Regulations has
no basis in fact."
"Even if the claimed U.S. Code of Federal Regulations does exist, the same is not
applicable to the case at bar in accordance with the principle of lex loci contractus which
require that the law of the place where the airline ticket was issued should be applied by
the court where the passengers are residents and nationals of the forum and the ticket is
issued in such State by the defendant airline. Since the tickets were sold and issued in the
Philippines, the applicable law in this case would be Philippine law."
Other Issues:
2.) Even if the claimed US Code of Federal Regulations does exist, the same is not
applicable to the case at bar in accordance with the principle of lex loci contractus which
requires that the law of the place where the airline ticket was issued should be applied by
the court where the passengers are residents and nationals of the forum and the ticket is
issued in such State by the airline.
3.) Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling
the passengers concerned to an award of moral damages. Where an airline had
deliberately overbooked, it took the risk of having to deprive some passengers of their
seats in case all of them would show up for check in. for the indignity and inconvenience
of being refused a confirmed seat on the last minute, said passenger is entitled to an
award of moral damages. This is so, for a contract of carriage generates a relation
attended with public duty --- a duty to provide public service and convenience to its
passengers which must be paramount to self-interest or enrichment. Even on the
assumption that overbooking is allowed, TWA is still guilty of bad faith in not informing its
passengers beforehand that it could breach the contract of carriage even if they have
confirmed tickets if there was overbooking. Moreover, TWA was also guilty of not
informing its passengers of its alleged policy of giving less priority to discounted tickets.
Evidently, TWA placed self-interest over the rights of the spouses Zalamea and their
daughter under their contract of carriage. Such conscious disregard make respondent
TWA liable for moral damages, and to deter breach of contracts by TWA in similar fashion
in the future, the SC adjudged TWA liable for exemplary damages, as well.
United Airlines vs. CA
FACTS:
Aniceto Fontanilla bought from United Airlines, through the Philippine Travel Bureau in
Manila, three “Visit the U.S.A.” tickets from himself, his wife and his minor son, Mychal,
to visit the cities of Washington DC, Chicago and LosAngeles. All All flights had
been confirmed previously by United Airlines. Having used the first coupon
to DC and while at the Washington Dulles Airport, Aniceto changed their
itinerary, paid the penalty for rewriting their tickets and was issued tickets with
corresponding boarding passes with the words: “Check-in-required.” They were
then set to leave but were denied boarding because the flight was overbooked.
The CA ruled that private respondents’ failure to comply with the check-
inrequirement will not defeat his claim as the denied boarding rules were not
complied with applying the laws of the USA, relying on the Code of Federal
Regulation Part on Over sales of the USA.
I SSUE: WON the CA is correct in applying the laws of USA.
5
HELD: married her. On his Answer, Rederick contended that his first marriage was
validly dissolved; thus, he was legally capacitated to marry Grace.
No. According to the doctrine of “lex loci contractus”, the law of the place where
a contract is made or entered into governs with respect to its nature and validity, On July 7, 1998 or about five years after the couple’s wedding and while the suit for the
obligation and interpretation shall govern. This has been said to be the rule even declaration of nullity was pending , respondent was able to secure a divorcedecree from a
though the place where the contract was made is different from the place where it is family court in Sydney, Australia because the “marriage had irretrievably broken down.”
to be performed. Hence, the court should apply the law of the place where the airline
ticket was issued, where the passengers are residents and nationals of the forum and The Regional Trial Court declared the marriage of Rederick and Grace Recio dissolved on
the ticket is issued in such State by the defendant airline. Therefore, although, the the ground that the Australian divorce had ended the marriage of the couple thus there
was no more marital union to nullify or annul.
contract of carriage was to be p e r f o r m e d i n t h e U n i t e d St a t e s , t h e t i c k e t s
w e r e p u r c h a s e d t h r o u g h petitioner’s agent in Manila. It is true that the tickets were
"rewritten" in D.C.,however, such fact did not change the nature of the original
contract of carriage entered into by the parties in Manila. Hence, the court should apply
ISSUE:
the law of the place where the airline ticket was issued, when the passengers are
residents and nationals of the forum and the ticket is issued in such State by the
1.) Whether or not the divorce between respondent and Editha Samson was proven.
defendant airline

2.) Whether or not respondent was proven to be legally capacitated to marry petitioner
GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, v. REDERICK A. RECIO,
respondent.
RULING:
G.R. No. 138322, October 2, 2001

1st issue:
FACTS:

The Supreme Court ruled that the mere presentation of the divorce decree of
Respondent Rederick Recio, a Filipino, was married to Editha Samson, an Australian
respondent’s marriage to Samson is insufficient. Before a foreign divorce decree can be
citizen, in Malabon, Rizal, on March 1, 1987. They lived together as husband and wife in
recognized by our courts, the party pleading it must prove the divorce as a fact and
Australia. On May 18, 1989, a decree of divorce, purportedly dissolving the marriage, was
demonstrate its conformity to the foreign law allowing it. Furthermore, the divorce decree
issued by an Australian family court. On June 26, 1992, respondent became an Australian
between respondent and Editha Samson appears to be an authentic one issued by an
citizen and was married again to petitioner Grace Garcia-Recio, a Filipina on January 12,
Australian family court. However, appearance is not sufficient; compliance with the
1994 in Cabanatuan City. In their application for a marriage license, respondent
aforementioned rules on evidence must be demonstrated.
was declared as “single” and “Filipino.”

2nd issue:
Starting October 22, 1995, petitioner and respondent lived separately without prior
judicial dissolution of their marriage.
Australian divorce decree contains a restriction that reads:
“1. A party to a marriage who marries again before this decree becomes absolute(unless
On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of Marriage on
the other party has died) commits the offence of bigamy.”
the ground of bigamy. Respondent allegedly had a prior subsisting marriage at the time he
This quotation bolsters our contention that the divorrecce obtained by respondent may
have been restricted. It did not absolutely establish his legal capacity to remarry according

6
to his national law. Hence, the Court find no basis for the ruling of the trial court, which
erroneously assumed that the Australian divorce ipso factorestored respondent’s capacity
to remarry despite the paucity of evidence on this matter.
The Supreme Court remanded the case to the court a quo for the purpose of receiving
evidence. The Court mentioned that they cannot grant petitioner’s prayer to declare her
marriage to respondent null and void because of the question on latter’s legal capacity to
marry.
We clarify. To repeat, the legal capacity to contract marriage is determined by the
national law of the party concerned. The certificate mentioned in Article 21 of the Family
Code would have been sufficient to establish the legal capacity of respondent, had he duly
presented it in court. A duly authenticated and admitted certificate is prima facie evidence
of legal capacity to marry on the part of the alien applicant for a marriage license.
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD.,
vs
MINORU KITAMURA
G.R. No. 149177
November 23, 2007
FACTS:
Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing technical
and management support in the infrastructure projects national permanently residing in
the Philippines. The agreement provides that Kitamaru was to extend professional
services to Nippon for a year. Nippon assigned Kitamaru to work as the project manager
of the Southern TagalogAccess Road (STAR) project. When the STAR project was near
completion, DPWH engaged the consultancy servicesof Nippon, this time for the detailed
engineering &construction supervision of the Bongabon-Baler Road Improvement (BBRI)
Project. Kitamaru was named as the project manger in the contract.
Hasegawa, Nippon’s general manager for its International Division, informed Kitamaru
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.
Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted that
Kitamaru’s contract was for a fixed term that had expired. Kitamaru then filed for specific
performance & damages w/ the RTC of Lipa City. Nippon filed a MTD.
Nippon’s contention: The ICA had been perfected in Japan & executed by & between
Japanese nationals. Thus, the RTC of Lipa City has no jurisdiction. The claim for improper
pre-termination of Kitamaru’s ICA could only be heard & ventilated in the proper courts of
Japan following the principles of lex loci celebrationis & lex contractus.
The RTC denied the motion to dismiss. The CA ruled hat 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. It held that the RTC was correct in applying
the principle of lex loci solutionis.
ISSUE:
Whether or not the subject matter jurisdiction of Philippine courts in civil cases for specific
performance & 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.
HELD:
NO. In the judicial resolution of conflicts problems, 3 consecutive phases are involved:
jurisdiction, choice of law, and recognition and enforcement of judgments. Jurisdiction &
choice of law are 2 distinct concepts. Jurisdiction considers whether it is fair to cause
defendant to travel to this state; choice of law asks the further question whether the
application of a substantive law w/c 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.
In this case, only the 1st phase is at issue—jurisdiction. Jurisdiction, however, has various
aspects. For a court to validly exercise its power to adjudicate a controversy, it must have
jurisdiction over the plaintiff/petitioner, over the defendant/respondent, over the subject
matter, over the issues of the case and, in cases involving property, over the res or the
thing w/c is the subject of the litigation. In assailing the trial court's jurisdiction herein,
Nippon is actually referring to subject matter jurisdiction.
7

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign
authority w/c establishes and organizes the court. It is given only by law and in the
manner prescribed by law. 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. To succeed in its motion for the dismissal of an action for lack of jurisdiction over
the subject matter of the claim, the movant must show that the court or tribunal cannot
act on the matter submitted to it because no law grants it the power to adjudicate the
claims.
In the instant case, Nippon, in its MTD, does not claim that the RTC is not properly vested
by law w/ jurisdiction to hear the subject controversy for a civil case for specific
performance & damages is one not capable of pecuniary estimation &
is properly cognizable by the RTC of Lipa City. What they rather raise as grounds to
question subject matter jurisdiction are the principles of lex loci celebrationis and lex
contractus, and the “state of the most significant relationship rule.” The Court finds the
invocation of these grounds unsound.
Lex loci celebrationis relates to the “law of the place of the ceremony” or the law of the
place where a contract is made. The doctrine of lex contractus or lex loci
contractus means the “law of the place where a contract is executed or to be
performed.” It controls the nature,construction, and validity of the contract and it may
pertain to the law voluntarily agreed upon by the parties or the law intended by them
either expressly or implicitly.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. This rule takes into account several contacts and evaluates them according to
their relative importance with respect to the particular issue to be resolved.
Since these 3 principles in conflict of laws make reference to the law applicable to a
dispute, they are rules proper for the 2nd phase, the choice of law. They determine which
state's law is to be applied in resolving the substantive issues of a conflicts
problem. 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, Nippon’s 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, 1st there should exist a conflict of laws situation
requiring the application of the conflict of laws rules. 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.
It should be noted that when a conflicts case, one involving a foreign element, is brought
before a court or administrative agency, there are 3 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
orapply the law of some other State or States. 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.
Neither can the other ground raised, forum non conveniens, be used to deprive the RTC of
its jurisdiction. 1st, it is not a proper basis for a motion to dismiss because Sec. 1, Rule 16
of the Rules of Court does not include it as a ground. 2nd, 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 RTC. In this
case, the RTC decided to assume jurisdiction. 3rd, 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.
RAYTHEON INTERNATIONAL v. STOCKTON W. ROUZIE, GR No. 162894, 2008-02-26
Brand Marine Services, Inc. (BMSI), a corporation duly organized & existing under the laws
of Connecticut, &Stockton Rouzie, Jr., an American citizen, entered into a contract
BMSI hired Rouzie as its representative to negotiate the sale of services in several
government projects in thePhilippines for an agreed remuneration of 10% of the gross
receipts.
Rouzie secured a service contract w/ the Rep. of Phil. on behalf of BMSI for the dredging
of rivers affected by the Mt.Pinatubo eruption & mudflows.
Rouzie filed before the NLRC a suit against BMSI and Rust International (Rust) for alleged
nonpayment of commissions, illegal termination, & breach of employment contract.
The Labor Arbiter order
8
ed BMSI & Rust to pay Rouzie’s money claims.
Upon appeal, the NLRC reversed & dismissed Rouzie’s complaint on the ground of lack of
jurisdiction.
Rouzie filed an action for damages before the RTC of La Union (where he was a resident)
against Raytheon International. He reiterated that he was not paid the commissions due
him from the Pinatubo dredging project w/c hesecured on behalf of BMSI. The complaint
also averred that BMSI, RUST and Raytheon had combined & functioned as 1 company.
RAYTHEON SOUGHT THE DISMISSAL OF THE COMPLAINT ON THE GROUNDS OF FAILURE
TO STATE ACAUSE OF ACTION & FORUM NON CONVENIENS & PRAYED FOR DAMAGES BY
WAY OF COMPULSORY
COUNTERCLAIM. THE RTC DENIED RAYTHEON’S MOTION. THE CA AFFIRMED.
Raytheon’s contention: The written contract between Rouzie & BMSI included a valid
choice of law clause, that is, that the contract shall be governed by the laws of the State of
Connecticut. It also mentions the presence of foreign elements in the dispute, namely that
the parties & witnesses involved are American corporations & citizens & the evidence to
be presented is located outside the Philippines, that renders our local courts inconvenient
forums. The foreign elements of the dispute necessitate the immediate application of the
doctrine of forum non conveniens.
ISSUES(a) W/N the RTC had jurisdiction.(b) W/N the complaint should be dismissed on the
ground of forum non conveniens.
Petitioner mainly asserts that the written contract between respondent and BMSI
included a valid choice of law clause, that is, that the contract shall be governed by the
laws of the State of Connecticut. It also mentions the presence of foreign elements in the
dispute namely,... the parties and witnesses involved are American corporations and
citizens and the evidence to be presented is located outside the Philippines that renders
our local courts inconvenient forums.
Petitioner theorizes that the foreign elements of the dispute necessitate the... immediate
application of the doctrine of forum non conveniens.
RULING
(a) YES.
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a
Philippine court and where the court has jurisdiction over the subject matter, the parties
and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or
the convenience of the parties point to a foreign forum. This is an exercise of sovereign
prerogative of the country where the case is filed.
Jurisdiction over the nature and subject matter of an action is conferred by the
Constitution and the law & by the material allegations in the complaint, irrespective of
w/n the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.
The case file was an action for damages arising from an alleged breach of contract.
Undoubtedly, the nature of the action and the amount of damages prayed are w/in the
jurisdiction of the RTC.
As regards jurisdiction over the parties, the RTC acquired jurisdiction over Rouzi upon
the filing of the complaint. On the other hand, jurisdiction over the person of Raytheon
was acquired by its voluntary appearance in court.
That THE SUBJECT CONTRACT INCLUDED A STIPULATION THAT THE SAME SHALL BE
GOVERNED BYTHE LAWS OF THE STATE OF CONNECTICUT DOES NOT SUGGEST THAT THE
PHILIPPINE COURTS,
OR ANY OTHER FOREIGN TRIBUNAL FOR THAT MATTER, ARE PRECLUDED FROM HEARING
THE CIVIL ACTION.
JURISDICTION & CHOICE OF LAW ARE 2 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 choice of law stipulation will be come relevant only
when the substantive issues of the instant case develop, that is, after hearing on the
merits proceeds before the trial court.
(b) NO.
UNDER THE DOCTRINE OF FORUM NON CONVENIENS, A COURT, IN CONFLICTS-OF-LAWS
CASES, MAY
REFUSE IMPOSITIONS ON ITS JURISDICTION WHERE IT IS NOT THE MOST “CONVENIENT”
OR
AVAILABLE FORUM AND THE PARTIES ARE NOT PRECLUDED FROM SEEKING REMEDIES
ELSEWHERE.
Raytheon’s averments of the foreign elements are not sufficient to oust the RTC of its
jurisdiction over the case and the parties involved.
9

Moreover, the propriety of dismissing a case based on the principle of forum non
conveniens requires a factual determination; hence, it is more properly considered as a
matter of defense. While it is w/c 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.
Principles:
Hasegawa v. Kitamura,[26] the Court outlined three consecutive phases involved in
judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and
recognition and enforcement of judgments.
foreign element
(1) that the Philippine Court is one to which the parties may conveniently resort
(2) that the Philippine Court is in a position to make an intelligent decision as to the law
and the facts
(3) that the Philippine Court has or is likely to have the power to enforce its decision
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a
Philippine court and where the court has jurisdiction over the subject matter, the parties
and the res, it may or can proceed to try the case even if the rules of conflict-of-laws... or
the convenience of the parties point to a foreign forum. This is an exercise of sovereign
prerogative of the country where the case is filed.
Jurisdiction over the nature and subject matter of an action is conferred by the
Constitution and the law[30] and by the material allegations in the complaint, irrespective
of whether or not the plaintiff is entitled to recover all or some of the claims or... reliefs
sought therein
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 choice of law stipulation will become relevant only when the substantive issues of the
instant case develop, that is, after hearing on the merits proceeds before the trial court.
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may
refuse impositions on its jurisdiction where it is not the most "convenient" or available
forum and the parties are not precluded from seeking remedies elsewhere.
Moreover, the propriety of dismissing a case based on the principle of forum non
conveniens requires a factual determination; hence, it is more properly considered as a
matter of defense. While it is within the discretion of the trial court to abstain from
assuming... jurisdiction on this ground, it should do so only after vital facts are established,
to determine whether special circumstances require the court's desistance.
Continental Micronesia v. Basso
GR No. 178382-83
Labor Relations: Jurisdiction
Facts:
Petitioner Continental Micronesia is a foreign corporation organized and existing under
the laws of and domiciled in the United States of America. It is licensed to do business in
the Philippines. Respondent, a US citizen residing in the Philippines, accepted an offer to
be a General Manager position by Mr. Braden, Managing Director-Asia of Continental
Airlines. On November 7, 1992, CMI took over the Philippine operations of Continental,
with respondent retaining his position as General Manager. Thereafter, respondent
received a letter from Mr. Schulz, who was then CMI’s Vice President of Marketing and
Sales, informing him that he has agreed to work in CMI as a consultant on an “as needed
basis.” Respondent wrote a counter-proposal that was rejected by CMI.
Respondent then filed a complaint for illegal dismissal against the petitioner corporation.
Alleging the presence of foreign elements, CMI filed a Motion to Dismiss on the ground of
lack of jurisdiction over the person of CMI and the subject matter of the controversy.
The Labor Arbiter agreed with CMI that the employment contract was executed in the US
“since the letter-offer was under the Texas letterhead and the acceptance of Complainant
was returned there.” Thus, applying the doctrine of lex loci celebrationis, US laws apply.
Also, applying lex loci contractus, the Labor Arbiter ruled that the parties did not intend to
apply Philippine laws.
The NLRC ruled that the Labor Arbiter acquired jurisdiction over the case when CMI
voluntarily submitted to his office’s jurisdiction by presenting evidence, advancing
arguments in support of the legality of its acts, and praying for reliefs on the merits of the
case.
10
The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over the
subject matter of the case and over the parties.
Issue:
Whether labor tribunals have jurisdiction over the case.
Held:
Yes. The Court ruled that the labor tribunals had jurisdiction over the parties and the
subject matter of the case. The employment contract of Basso was replete with
references to US laws, and that it originated from and was returned to the US, do not
automatically preclude our labor tribunals from exercising jurisdiction to hear and try this
case.
On the other hand, jurisdiction over the person of CMI was acquired through the coercive
process of service of summons. CMI never denied that it was served with summons. CMI
has, in fact, voluntarily appeared and participated in the proceedings before the courts.
Though a foreign corporation, CMI is licensed to do business in the Philippines and has a
local business address here. The purpose of the law in requiring that foreign corporations
doing business in the country be licensed to do so, is to subject the foreign corporations to
the jurisdiction of our courts.
Where the facts establish the existence of foreign elements, the case presents a conflicts-
of-laws issue. Under the doctrine of forum non conveniens, a Philippine court in a conflict-
of-laws case may assume jurisdiction if it chooses to do so, provided, that the following
requisites are met: (1) that the Philippine Court is one to which the parties may
conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent
decision as to the law and the facts; and (3) that the Philippine Court has or is likely to
have power to enforce its decision. All these requisites are present here.
Saudi Arabian Airlines V. CA
Laws Applicable: Art 19 and 21 of Civil Code
Lessons Applicable: Conflict of Laws, factual situation, connecting factor, characterization,
choice of law, State of the most significant relationship
FACTS:
 Saudi Arabian Airlines (SAUDIA), foreign airlines corporation doing business in
the Philippines and may be served summons in agent in Makati, hired Milagros
P. Morada as a flight attendant for its airlines based in Jeddah, Saudi Arabia.
 April 27, 1990: While on a lay-over in Jakarta, Indonesia, Morada went to a disco
dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both
Saudi nationals. It was almost morning when they returned to their hotels so
they agreed to have breakfast together at the room of Thamer. Shortly after
Allah left the room, Thamer attempted to rape Morada. Fortunately, a roomboy
and several security personnel heard her cries for help and rescued
her. Indonesian police arrested Thamer and Allah Al-Gazzawi, the latter as an
accomplice.
 When Morada returned to Jeddah, SAUDIA officials interrogated her about the
Jakarta incident and requested her to go back to Jakarta to help arrange the
release of Thamer and Allah. In Jakarta, SAUDIA Legal Officers negotiated with
the police for the immediate release of the detained crew members but did not
succeed. Afraid that she might be tricked into something she did not want
because of her inability to understand the local dialect, Morado refused to
cooperate and declined to sign a blank paper and a document written in the
local dialect. Eventually, SAUDIA allowed Morada to return to Jeddah but
barred her from the Jakarta flights.
 Indonesian authorities agreed to deport Thamer and Allah and they were again
put in service. While, Morada was transferred to Manila.
 January 14, 1992: Morada was asked to see Mr. Ali Meniewy, Chief Legal Officer
of SAUDIA, in Jeddah, Saudi Arabia. He brought her to the police station where
the police took her passport and questioned her about the Jakarta incident. The
police pressured her to drop 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.
 June 16, 1993: Morada, while in Riyadh Saudi Arabia, was not allowed to board
the plane to Manila and instead ordered to take a later flight to Jeddah to see
Mr. Miniewy. 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 but it was actually a notice
for her to appear before the court on June 27, 1993. Plaintiff then returned to
Manila.
 June 27, 1993: SAUDIA's Manila manager, Aslam Saleemi, assured Morada that
the investigation was routinary and that it posed no danger to her so she
11
 reported to Miniewy in Jeddah for further investigation. She was brought to the
Saudi court.
 June 28, 1993: Saudi judge interrogated Morada through an interpreter about
the Jakarta incident for an hour and let her go. SAUDIA officers forbidden her to
take flight. She was told to go the Inflight Service Office where her passport
was taken and they told her to remain in Jeddah, at the crew quarters, until
further orders.
 July 3, 1993: She was brought to court again and to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. The court tried her, together with Thamer and
Allah, and found her 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.
 Failing to seek the assistance of her employer, SAUDIA, she asked the Philippine
Embassy in Jeddah to help her while her case is on appeal. She continued to
workon the domestic flight of SAUDIA, while Thamer and Allah continued to
serve in the international flights.
 Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Before her return to Manila,
she was terminated from the service by SAUDIA, without her being informed of
the cause.
 November 23, 1993: Morada filed a Complaint for damages against SAUDIA, and
Khaled Al-Balawi, its country manager.
 January 19, 1994: SAUDIA filed an Omnibus Motion To Dismiss on following
grounds: (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.
 After opposition to the motion to dismiss by Morada and reply by SAUDIA,
Morada filed an Amended Complaint dropping Al-Balawi. SAUDIA filed its
Manifestation, Motion to Dismiss Amended Complaint, subsequently motion
for reconsideration which were all denied.
 SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance
of Writ of Preliminary Injunction and/or Temporary Restraining Order with the
Court of Appeals. TRO was granted but Writ of Preliminary Injunction was
denied.
 CA: 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.
 SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary
Restraining Order:
o It is a conflict of laws that must be settled at the outset:
Morada's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia.
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.
 Morada: Amended Complaint is based on Articles 19 and 21 of the Civil Code
which is a matter of domestic law
ISSUE: W/N the RTC of Quezon City has jurisdiction over the case and it is the proper
forum for recovery of damages under Art. 21 of the Civil Code which should govern.
HELD: YES.
On the presence of a “Foreign Element” in the case: A factual situation that cuts across
territorial lines and is affected by the diverse laws of two or more states is said to contain
a “foreign element”. The presence of a foreign element is inevitable since social and
economic affairs of individuals and associations are rarely confined to the geographic
limits of their birth or conception. The forms in which this foreign element may appear are
many. The foreign element may simply consist in the fact that one of the parties to a
contract is an alien or has a foreign domicile, or that a contract between nationals of one
State involves properties situated in another State. In other cases, the foreign element
may assume a complex form.
In the instant case, the foreign element consisted in the fact that private respondent
Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign
corporation. Also, by virtue of the employment of Morada with the petitioner Saudia as a
flight stewardess, events did transpire during her many occasions of travel across national
borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that
caused a “conflicts” situation to arise.
COURT disagrees with MORADA that his is purely a domestic case. However, the court
finds that the RTC of Quezon City possesses jurisdiction over the subject matter of the
suit. Its authority to try and hear the case is provided for under Section 1 of Republic Act
No. 7691, to wit:
12
BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive
jurisdiction:
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.
The trial court also acquired jurisdiction over the parties. MORADA through her act of
filing, and SAUDIA by praying for the dismissal of the Amended Complaint on grounds
other than lack of jurisdiction.
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.
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.
In applying “State of the most significant relationship” rule, 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.
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, raised by private respondent as plaintiff below against
defendant (herein petitioner), in our view, has been properly established.
NOTE:
These “test factors” or “points of contact” or “connecting factors” could be any of the
following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his
origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In
particular, the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the place where a
contract has been made, a marriage celebrated, a will signed or a tort committed. The lex
loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of performance
of contractual duties, or the place where a power of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should govern their
agreement, the lex 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
13
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.
Vicenta Pantaleon vs. Honorato Asuncion (GR L-13141, May 22, 1959)
FACTS:
 In a collection case filed by Pantaleon against appellant Asuncion, summons was
initially issued but was later amended (thru an Alias Summons) after the Nueva
Ecija Sheriff knew that Asuncion was already residing at Rizal
o However, the Alias Summons were returned unserved because
Asuncion could not be found in the address in Rizal
 As such, service by publication was resorted to by Pantaleon and allowed by the
trial court
o The said summons was published in the Examiner, a newspaper of
general circulation in Nueva Ecija
 This led to the declaration of Asuncion in default and eventually to a decision
against him
o Naturally, Asuncion sought relief from this judgment arguing that no
service was effectively made hence the court lacked jurisdiction
o Nevertheless, the trial court denied Asuncion’s argument hence this
appeal
ISSUE:
 Whether service of summons by publication was available in the case
RULING:
 NO, in an action in personam against a resident, summons by publication would
not satisfy the due process requirement
o Service of summons by publication cannot confer upon the court
jurisdiction over the person of the defendant.
 Personal service within the forum is essential to the acquisition of jurisdiction
over the person of the defendant who does not voluntarily submit to the
authority of the court
o In other words, summons by publication cannot – consistently with
the due process clause in the bill of rights – confer upon the court
jurisdiction over said defendant
Perkins vs Dizon; G.R. No. 46631 November 16, 1939
Facts: Eugene Arthur Perkins instituted in the CFI of Manila against Benguet
Consolidated Mining Company for dividends worth P71,379.90 on 52,874 shares
of stock registered in his name, payment of which was being withheld by the
company. The company filed its answer stating that withholding of dividends and
the non-recognition of Eugene Perkins’s right to the disposal and control of the
shares were due to certain demands made with respect to said shares by the
Idonah Slade Perkins and George H. Engelhard. The prayer in the answer is that
the parties be served with notice by publication and be required to interplead.
The CFI then ordered that Idonah Slade Perkins (petitioner here) and George H.
Engelhard be included in the complaint. The complaint was amended and the
prayer sought was that Idonah Slade Perkins and George Engelhard be adjudged
without interest in the shares of stock in question and excluded from any claim
they assert thereon. Summons were then served on Idonah and Engelhard.
Idonah objected to the venue but it was overruled. She then brought this case via
petition for certiorari, praying that the summons by publication issued against
her be declared null and void.
Issue: W/N the CFI has acquired jurisdiction over the person of the present
petitioner as a non-resident defendant, or, notwithstanding the want of such
jurisdiction, whether or not said court may validly try the case.
Ruling: The proceedings are valid. The action in this case is an action quasi in
rem.
Citing American Jurisprudence, the SC explained that when the
defendant is a non-resident and refuses to appear voluntarily, the court cannot
acquire jurisdiction over his person even if the summons be served by
publication, for he is beyond the reach of judicial process. No tribunal established
by one State can extend its process beyond its territory so as to subject to its
decisions either persons or property located in another State; and the only
exception seems to be found in the case where the non-resident defendant has
expressly or impliedly consented to the mode of service.
The general rule, therefore, is that a suit against a non-resident cannot
be entertained by a Philippine court. Where, however, the action is in rem or
14
quasi in rem in connection with property located in the Philippines, the court
acquires jurisdiction over the res, and its jurisdiction over the person of the non-
resident is non-essential. In an action in rem or quasi in rem against a non-
resident defendant, jurisdiction over his person is non-essential, and if the law
requires in such case that the summons upon the defendant be served by
publication, it is merely to satisfy the constitutional requirement of due process.

The reason for the rule that Philippine courts cannot acquire jurisdiction
over the person of a non-resident is that "no State can exercise direct jurisdiction
and authority over persons or property without its territory. It is an elementary
principle that an elementary principle, that the laws of one State have no
operation outside of its territory, except so far as is allowed by comity. When,
however, the action relates to property located in the Philippines, the Philippine
courts may validly try the case, upon the principle that a "State, through its
tribunals, may subject property situated within its limits owned by non-residents
to the payment of the demand of its own citizens against them. If the non-
resident has no property in the State, there is nothing upon which the tribunals
can adjudicate."

In this case, Idonah Slade Perkins seeks to exclude her from any interest
in a property located in the Philippines. The situs of the shares is in the
jurisdiction where the corporation is created. Thus, the action is quasi in rem.
The action being in quasi in rem, The Court of First Instance of Manila has
jurisdiction over the person of the non-resident. In order to satisfy the
constitutional requirement of due process, summons has been served upon her
by publication.

Take note though, that had not the complaint been amended, the
proceeding would have been void since an interpleader is a personal action.
Petition is denied.

15