MHC AND MHICL VS. NLRC MHC AND MHICL vs. NLRC et al G.R. No.

120077 October 13, 2000 FACTS: private respondent Santos was an overseas worker employed as a printer at the Mazoon Printing Press, Sultanate of retren$hment! Petitioners are the Manila %otel Corporation *+M%C,- and the Manila %otel .nternational Company, /imited *+M%.C/,-! 0hen the $ase was filed in 1223, M%C was still a government4owned and $ontrolled $orporation duly organized and e5isting under the laws of the Philippines! M%.C/ is a $orporation duly organized and e5isting under the laws of %ong 6ong! M%C is an +in$orporator, of M%.C/, owning 738 of its $apital sto$k! &y virtue of a +management agreement, with the Pala$e %otel, M%.C/ trained the personnel and staff of the Pala$e %otel at &ei'ing, China! 9ow the fa$ts! man! Su"se#uently he was dire$tly hired "y the Pala$e %otel, &ei'ing, People(s )epu"li$ of China and later terminated due to

Pala$e %otel! .n the $ontra$t, Mr! Shmidt represented the Pala$e %otel! The <i$e President * perations and :evelopment- of petitioner M%.C/ Cergueda signed the employment agreement under the word +noted,! After working in the Pala$e hotel for less than 1 year, the Pala$e %otel informed respondent Santos "y letter signed "y Mr! Shmidt that his employment at the Pala$e %otel print shop would "e terminated due to "usiness reverses "rought a"out "y the politi$al upheaval in China! The Pala$e %otel terminated the employment of Santos and paid all "enefits due him, in$luding his plane fare "a$k to the Philippines! Santos was repatriated to the Philippines! Santos filed a $omplaint for illegal dismissal with the Ar"itration &ran$h, 9C), 9/)C! %e prayed for an award of A:, =: and AF for! The $omplaint named M%C, M%.C/, the Pala$e %otel and Mr! Shmidt as respondents! The Pala$e %otel and Mr! Shmidt were not served with summons and neither parti$ipated in the pro$eedings "efore the /A! The /A de$ided the $ase against petitioners! Petitioners appealed to the 9/)C, arguing that the P =A, not the 9/)C had 'urisdi$tion over the $ase! The 9/)C promulgated a resolution, stating that the appealed :e$ision "e de$lared null and void for want of 'urisdi$tion Santos moved for re$onsideration of the afore4#uoted resolution! %e argued that the

:uring his employment with the Mazoon Printing Press, respondent Santos re$eived a letter from Mr! Shmidt, ;eneral Manager, Pala$e %otel, &ei'ing, China! Mr! S$hmidt informed respondent Santos that he was re$ommended "y one &uenio, a friend of his! Mr! Shmidt offered respondent Santos the same position as printer, "ut with a higher monthly salary and in$reased "enefits! )espondent Santos wrote to Mr! Shmidt and signified his a$$eptan$e of the offer! The Pala$e %otel Manager, Mr! %enk mailed a ready to sign employment $ontra$t to respondent Santos! Santos resigned from the Mazoon Printing Press! Santos wrote the Pala$e %otel and a$knowledged Mr! %enk(s letter! The employment $ontra$t stated that his employment would "e for a period of two years! %e then started to work at the Pala$e %otel!

$ase was not $ogniza"le "y the P =A as he was not an +overseas $ontra$t worker! The 9/)C granted the motion and reversed itself! The 9/)C dire$ted another /A to hear the $ase on the #uestion of whether private respondent was retren$hed or dismissed! The /a found that Santos was illegally dismissed from employment and re$ommended that he "e paid a$tual damages e#uivalent to his salaries for the une5pired portion of his $ontra$t! The 9/)C ruled in favor of private respondent! Petitioners filed an M) arguing that the /A(s re$ommendation had no "asis in law and in fa$t, however it was denied! %en$e, this petition! .SS>=: .s the 9/)C a proper forum to de$ide this $ase? %=/:: petition granted@ the orders and resolutions of the 9/)C are annulled! 9

Su"se#uently, respondent Santos signed an amended +employment agreement, with the

Forum 9on4Conveniens

The 9/)C was a seriously in$onvenient forum! 0e note that the main aspe$ts of the $ase transpired in two foreign 'urisdi$tions and the $ase involves purely foreign elements! The only link that the Philippines has with the $ase is that Santos is a Filipino $itizen! The Pala$e %otel and M%.C/ are foreign $orporations! 9ot all $ases involving our $itizens $an "e tried here! The employment $ontra$t! A )espondent Santos was hired dire$tly "y the Pala$e %otel, a foreign employer, through $orresponden$e sent to the Sultanate of P =A or any authorized re$ruitment agen$y of the government! man, where respondent Santos was then employed! %e was hired without the intervention of the

surrounding the alleged illegal dismissal as all a$ts $omplained of took pla$e in &ei'ing, People(s )epu"li$ of China! The 9/)C was not in a position to determine whether the Tiannamen S#uare in$ident truly adversely affe$ted operations of the Pala$e %otel as to 'ustify Santos( retren$hment! Prin$iple of effe$tiveness, no power to e5e$ute de$ision! A =ven assuming that a proper de$ision $ould "e rea$hed "y the 9/)C, su$h would not have any "inding effe$t against the employer, the Pala$e %otel! The Pala$e %otel is a $orporation in$orporated under the laws of China and was not even served with summons! Durisdi$tion over its person was not a$#uired! This is not to say that Philippine $ourts and agen$ies have no power to solve

>nder the rule of forum non $onveniens, a Philippine $ourt or agen$y may assume 'urisdi$tion over the $ase if it $hooses to do so provided: *1- that the Philippine $ourt is one to whi$h the parties may $onveniently resort to@ *B- that the Philippine $ourt is in a position to make an intelligent de$ision as to the law and the fa$ts@ and *C- that the Philippine $ourt has or is likely to have power to enfor$e its de$ision! The $onditions are unavailing in the $ase at "ar!

$ontroversies involving foreign employers! 9either are we saying that we do not have power over an employment $ontra$t e5e$uted in a foreign $ountry! .f Santos were an +overseas $ontra$t worker,, a Philippine forum, spe$ifi$ally the P =A, not the 9/)C, would prote$t him! %e is not an +overseas $ontra$t worker, a fa$t whi$h he admits with $onvi$tion! EE

9ot Convenient! A 0e fail to see how the 9/)C is a $onvenient forum given that all the in$idents of the $ase A from the time of re$ruitment, to employment to dismissal o$$urred outside the Philippines! The in$onvenien$e is $ompounded "y the fa$t that the proper defendants, the Pala$e %otel and M%.C/ are not nationals of the Philippines! 9either !are they +doing "usiness in the Philippines!, /ikewise, the main witnesses, Mr! Shmidt and Mr! %enk are non4residents of the Philippines! 9o power to determine appli$a"le law! A 9either $an an intelligent de$ision "e made as to the law governing the employment $ontra$t as su$h was perfe$ted in foreign soil! This $alls to fore the appli$ation of the prin$iple of le5 lo$i $ontra$tus *the law of the pla$e where the $ontra$t was made-! The employment $ontra$t was not perfe$ted in the Philippines! Santos signified his a$$eptan$e "y writing a letter while he was in the )epu"li$ of to the Pala$e %otel in the People(s )epu"li$ of China! man! This letter was sent

=ven assuming that the 9/)C was the proper forum, even on the merits, the 9/)C(s de$ision $annot "e sustained! ..! M%C 9ot /ia"le =ven if we assume two things: *1- that the 9/)C had 'urisdi$tion over the $ase, and *Bthat M%.C/ was lia"le for Santos( retren$hment, still M%C, as a separate and distin$t 'uridi$al entity $annot "e held lia"le! True, M%C is an in$orporator of M%.C/ and owns 738 of its $apital sto$k! %owever, this is not enough to pier$e the veil of $orporate fi$tion "etween M%.C/ and M%C! .n Traders )oyal &ank v! CA, we held that +the mere ownership "y a single sto$kholder or "y another $orporation of all or nearly all of the $apital sto$k of a $orporation is not of itself a suffi$ient reason for disregarding the fi$tion of separate $orporate personalities!, .t is "asi$ that a $orporation has a personality separate and distin$t from those

9o power to determine the fa$ts! A 9either $an the 9/)C determine the fa$ts

$omposing it as well as from that of any other legal entity to whi$h it may "e related!

Clear and $onvin$ing eviden$e is needed to pier$e the veil of $orporate fi$tion! .n this $ase, we find no eviden$e to show that M%.C/ and M%C are one and the same entity! ...! M%.C/ not /ia"le Santos predi$ates M%.C/(s lia"ility on the fa$t that M%.C/ +signed, his employment $ontra$t with the Pala$e %otel! This fa$t fails to persuade us! First, we note that the <i$e President * perations and :evelopment- of M%.C/, Cergueda signed the employment $ontra$t as a mere witness! %e merely signed under the word +noted,! 0hen one +notes, a $ontra$t, one is not e5pressing his agreement or approval, as a party would! .n Si$hang$o v! &oard of Commissioners of .mmigration, the Court re$ognized that the term +noted, means that the person so noting has merely taken $ognizan$e of the e5isten$e of an a$t or de$laration, without e5er$ising a 'udi$ious deli"eration or rendering a de$ision on the matter! Se$ond, and more importantly, there was no e5isting employer4employee relationship "etween Santos and M%.C/! .n determining the e5isten$e of an employer4employee relationship, the following elements are $onsidered: +*1- the sele$tion and engagement of the employee@ +*B- the payment of wages@ +*C- the power to dismiss@ and +*F- the power to $ontrol employee(s $ondu$t!, M%.C/ did not have and did not e5er$ise any of the aforementioned powers! .t did not sele$t respondent Santos as an employee for the Pala$e %otel! %e was referred to the Pala$e %otel "y his friend, &uenio! M%.C/ did not engage respondent Santos to work! The terms of employment were negotiated and finalized through $orresponden$e "etween Santos, Mr! S$hmidt and Mr! %enk, who were offi$ers and representatives of the Pala$e %otel and not M%.C/! 9either did Santos addu$e any proof that M%.C/ had the power to $ontrol his $ondu$t! Finally, it was the Pala$e %otel, through Mr! S$hmidt and not M%.C/ that terminated respondent Santos( servi$es! /ikewise, there is no eviden$e to show that the Pala$e %otel and M%.C/ are one and the

same entity! The fa$t that the Pala$e %otel is a mem"er of the +Manila %otel ;roup, is not enough to pier$e the $orporate veil "etween M%.C/ and the Pala$e %otel! Considering that the 9/)C was forum non4$onveniens and $onsidering further that no employer4employee relationship e5isted "etween M%.C/, M%C and Santos, the /A $learly had no 'urisdi$tion over respondent(s $laim in the 9/)C $ase! .n all the $ases under the e5$lusive and original 'urisdi$tion of the /A, an employer4employee relationship is an indispensa"le 'urisdi$tional re#uirement!

CADALIN &.=9<=9.:

! AL VS. "O A

! AL M! AM>/, : 9AT &! =<A9;=/.STA, and the rest A!

M! CA:A/.9, ) /A9:

of 1,GHG 9AM=:4C MP/A.9A9TS, thru and "y their Attorney4in4fa$t, Atty! ;=)A): :=/ M>9: vs! P%./.PP.9= <=)S=AS =MP/ IM=9T A:M.9.ST)AT. 9(S T .9T=)9AT. 9A/, .9C! A9:K ) AS.A A:M.9.ST)AT ), 9/)C, &) 09 J ) ;)9 13FGGH, :e$em"er 7,122F! FACTS:

.9T=)9AT. 9A/ &>./:=)S C )P )AT. 9

This is a $onsolidation of C $ases of SP=C.A/ C.<./ ACT. 9S in the Supreme Court for Certiorari! n Dune H, 12LF, Cadalin, Amul and =vangelista, in their own "ehalf and on "ehalf of GBL other C0s instituted a $lass suit "y filing an +Amended Complaint, with the P =A T .9T=)9AT. 9A/, .9C *&).for money $laims arising from their re$ruitment "y AS.A .9T=)9AT. 9A/ &>./:=)S C )P )AT. 9 *A.&C- and employment "y &) 09 J ) whi$h is a foreign $orporation with head#uarters in %ouston, Te5as, and is engaged in $onstru$tion@ while A.&C is a domesti$ $orporation li$ensed as a servi$e $ontra$tor to re$ruit, mo"ilize and deploy Filipino workers for overseas employment on "ehalf of its foreign prin$ipals! The amended $omplaint sought the payment of the une5pired portion of the employment $ontra$ts, whi$h was terminated prematurely, and se$ondarily, the payment of the interest of the earnings of the Travel and )eserved Fund@ interest on all the unpaid "enefits@ area wage and salary differential pay@ fringe "enefits@ reim"ursement of SSS and premium not remitted to the SSS@ refund of withholding ta5 not remitted to the &.)@

penalties for $ommitting prohi"ited pra$ti$es@ as well as the suspension of the li$ense of A.&C and the a$$reditation of &).. n $to"er B, 12LF, the P =A Administrator denied the +Motion to Strike ut of the

+Art! G2: 5 5 5 A worker shall re$eive payment for ea$h e5tra hour e#uivalent to his wage entitlement in$reased "y a minimum of twenty4rive per $enturn thereof for hours worked during the day@ and "y a minimum off fifty per $enturn thereof for hours worked during the night whi$h shall "e deemed to "eing from seven o($lo$k in the evening until seven o($lo$k in the morning !, Art! L3: Friday shall "e deemed to "e a weekly day of rest on full pay!

)e$ords, filed "y A.&C "ut re#uired the $laimants to $orre$t the defi$ien$ies in the $omplaint pointed out! A.& and &).. kept on filing Motion for =5tension of Time to file their answer! The P =A kept on granting su$h motions!

.f employee worked, 1738 of his normal wage shall "e paid to him 5 5 5!, Art! L1@ 5 5 5 0hen $onditions of work re#uire the worker to work on any offi$ial holiday,

n 9ovem"er 1F, 12LF, $laimants filed an opposition to the motions for e5tension of time and asked that A.&C and &).. de$lared in default for failure to file their answers!

he shall "e paid an additional sum e#uivalent to 1738 of his normal wage!, Art! LF: =very worker who has $ompleted one year(s $ontinuous servi$e with his

n :e$em"er BG, 12LF, the P =A Administrator issued an order dire$ting A.&C and &).. to file their answers within ten days from re$eipt of the order! *at madami pang motions ang na4file, new $omplainants 'oined the $ase, ang daming inavail na remedies ng "oth partiesn Dune 12, 12LG, A.&C finally su"mitted its answer to the $omplaint! At the same hearing, the parties were given a period of 17 days from said date within whi$h to su"mit their respe$tive position papers! position paper! n n Fe"ruary BF, 12LL, A.&C and &).. su"mitted

employer shall "e entitled to /aos on full pay for a period of not less than B1 days for ea$h year in$reased to a period not less than BL days after five $ontinuous years of servi$e!, A worker shall "e entitled to su$h leave upon a #uantum meruit in respe$t of the proportion of his servi$e in that year!, Art! 13G: A $ontra$t of employment made for a period of indefinite duration may "e terminated "y either party thereto after giving the other party prior noti$e "efore su$h termination, in writing, in respe$t of monthly paid workers and fifteen days( noti$e in respe$t of other workers! The party terminating a $ontra$t without the re#uired noti$e the worker for the period of su$h noti$e or the une5pired portion thereof!, Art! .ll: 5 5 5 the employer $on$erned shall pay to su$h worker, upon termination of employment, a leaving indemnity for the period of his employment $al$ulated on the "asis of fifteen days( wages for ea$h year of the first three years of servi$e and of one month(s wages for ea$h year of servi$e thereafter! Su$h worker shall "e entitled to payment of leaving indemnity upon a #uantum meruit in proportion to the period of his servi$e $ompleted within a year!, .SS>=: 1! 0 9 the foreign law should govern or the $ontra$t of the parties!*0 9 the

$to"er BG, 12LL, A.&C and &).. filed a +Consolidated )eply,, P =A

Adminitartor rendered his de$ision whi$h awarded the amount of MLBF, H7B!FF in favor of only CBF $omplainants! Claimants su"mitted their +Appeal Memorandum For Partial the +9oti$e of Appeal, filed earlier! 9/)C promulgated its )esolution, modifying the de$ision of the P =A! The resolution removed some of the "enefits awarded in favor of the $laimants! 9/)C denied all the M)s! %en$e, these petitions filed "y the $laimants and "y Al&C and &)..! The $ase rooted from the /a"or /aw ena$ted "y &ahrain where most of the $omplainants were deployed! %is Ma'esty .se &in Selman Al 6aifa, Amir of &ahrain, issued his Amiri :e$ree 9o! BC on Dune 1H, 11GH, otherwise known re the /a"our /aw for the Private Se$tor! Some of the provision of Amiri :e$ree 9o! BC that are relevant to the $laims of the $omplainants4appellants are as follows:

Appeal, from the de$ision of the P =A! A.&C also filed its M) andKor appeal in addition to shall pay to the other party $ompensation e#uivalent to the amount of wages paya"le to

$omplainants who have worked in &ahrain are entitled to the a"ove4mentioned "enefits provided "y Amiri :e$ree 9o! BC of &ahrain-! B! 0 9 the &ahrain /aw should apply in the $ase! *Assuming it is appli$a"le 0 9 $omplainants( $laim for the "enefits provided therein have pres$ri"ed!C! 0hether or not the instant $ases #ualify as@ a $lass suit *siningit ko nalang*the rest of the issues in the full te5t of the $ase refer to /a"or /aw)>/.9;: 1! 9/)C set aside Se$tion 1, )ule 1B2 of the 12L2 )evised )ules on =viden$e governing the pleading and proof of a foreign law and admitted in eviden$e a simple $opy of the &ahrain(s Amiri :e$ree 9o! BC of 12GH */a"our /aw for the Private Se$tor-! 9/)C applied the Amiri :eere, 9o! BC of 12GH, whi$h provides for greater "enefits than those stipulated in the overseas4employment $ontra$ts of the $laimants! .t was of the "elief that where the laws of the host $ountry are more favora"le and "enefi$ial to the workers, then the laws of the host $ountry shall form part of the overseas employment $ontra$t! .t approved the o"servation of the P =A Administrator that in la"or pro$eedings, all dou"ts in the implementation of the provisions of the /a"or Code and its implementing regulations shall "e resolved in favor of la"or! The overseas4employment $ontra$ts, whi$h were prepared "y A.&C and &).. themselves, provided that the laws of the host $ountry "e$ame appli$a"le to said $ontra$ts if they offer terms and $onditions more favora"le than those stipulated therein! %owever there was a part of the employment $ontra$t whi$h provides that the $ompensation of the employee may "e +ad'usted downward so that the total $omputation plus the non4 waiva"le "enefits shall "e e#uivalent to the $ompensation, therein agree,( another part of the same provision $ategori$ally states +that total remuneration and "enefits do not fall "elow that of the host $ountry regulation and $ustom!, Any am"iguity in the overseas4employment $ontra$ts should "e interpreted against A.&C and &).., the parties that drafted it! Arti$le 1CGG of the Civil Code of the Philippines provides: NThe interpretation of o"s$ure words or stipulations in a $ontra$t shall not favor the party who $aused the o"s$urity!,

Said rule of interpretation is appli$a"le to $ontra$ts of adhesion where there is already a prepared form $ontaining the stipulations of the employment $ontra$t and the employees merely +take it or leave it!, The presumption is that there was an imposition "y one party against the other and that the employees signed the $ontra$ts out of ne$essity that redu$ed their "argaining power! 0e read the overseas employment $ontra$ts in #uestion as adopting the provisions of the Amiri :e$ree 9o! BC of 12GH as part and par$el thereof! The parties to a $ontra$t may sele$t the law "y whi$h it is to "e governed! .n su$h a $ase, the foreign law is adopted as a +system, to regulate the relations of the parties, in$luding #uestions of their $apa$ity to enter into the $ontra$t, the formalities to "e o"served "y them, matters of performan$e, and so forth! .nstead of adopting the entire mass of the foreign law, the parties may 'ust agree that spe$ifi$ provisions of a foreign statute shall "e deemed in$orporated into their $ontra$t +as a set of terms!, &y su$h referen$e to the provisions of the foreign law, the $ontra$t does not "e$ome a foreign $ontra$t to "e governed "y the foreign law! The said law does not operate as a statute "ut as a set of $ontra$tual terms deemed written in the $ontra$t! A "asi$ poli$y of $ontra$t is to prote$t the e5pe$tation of the parties! Su$h party e5pe$tation is prote$ted "y giving effe$t to the parties( own $hoi$e of the appli$a"le law! The $hoi$e of law must, however, "ear some relationship the parties or their transa$tion! There is no #uestion that the $ontra$ts sought to "e enfor$ed "y $laimants have a dire$t $onne$tion with the &ahrain law "e$ause the servi$es were rendered in that $ountry! B! 9/)C ruled that the pres$riptive period for the filing of the $laims of the $omplainants was C years, as provided in Arti$le B21 of the /a"or Code of the Philippines, and not ten years as provided in Arti$le 11FF of the Civil Code of the Philippines nor one year as provided in the Amiri :e$ree 9o! BC of 12GH! Arti$le 17H of the Amiri :e$ree 9o! BC of 12GH provides: +A $laim arising out of a $ontra$t of employment shall not a$tiona"le after the lapse of one year from the date of the e5piry of the Contra$t,! As a general rule, a foreign pro$edural law will not "e applied in the forum *lo$al $ourt-, Pro$edural matters, su$h as servi$e of pro$ess, 'oinder of a$tions, period and re#uisites for appeal, and so forth, are governed "y the laws of the forum! This is true even if the a$tion is "ased upon a foreign su"stantive law!

A law on pres$ription of a$tions is sui generis in Confli$t of /aws in the sense that it may "e viewed either as pro$edural or su"stantive, depending on the $hara$terization given su$h a law! .n &ournias v! Atlanti$ Maritime Company *BB3 F! Bd! 17B, Bd Cir! O1277P-, where the issue was the appli$a"ility of the Panama /a"or Code in a $ase filed in the State of 9ew Iork for $laims arising from said Code, the $laims would have pres$ri"ed under the Panamanian /aw "ut not under the Statute of /imitations of 9ew Iork! The >!S! Cir$uit Court of Appeals held that the Panamanian /aw was pro$edural as it was not +spe$ifi$ally intended to "e su"stantive,, hen$e, the pres$riptive period provided in the law of the forum should apply! The Court o"served: +! ! ! we are dealing with a statute of limitations of a foreign $ountry, and it is not $lear on the fa$e of the statute that its purpose was to limit the enfor$ea"ility, outside as well as within the foreign $ountry $on$erned, of the su"stantive rights to whi$h the statute pertains! 0e think that as a yardsti$k for determining whether that was the purpose, this test is the most satisfa$tory one! The Court further noted: +Applying that test here it appears to us that the li"ellant is entitled to su$$eed, for the respondents have failed to satisfy us that the Panamanian period of limitation in #uestion was spe$ifi$ally aimed against the parti$ular rights whi$h the li"ellant seeks to enfor$e! The Panama /a"or Code is a statute having "road o"'e$tives!, The Ameri$an $ourt applied the statute of limitations of 9ew Iork, instead of the Panamanian law, after finding that there was no showing that the Panamanian law on pres$ription was intended to "e su"stantive! &eing $onsidered merely a pro$edural law even in Panama, it has to give way to the law of the forum *lo$al Court- on pres$ription of a$tions! %owever the $hara$terization of a statute into a pro$edural or su"stantive law "e$omes irrelevant when the $ountry of the forum *lo$al Court- has a +"orrowing statute!, Said statute has the pra$ti$al effe$t of treating the foreign statute of limitation as one of su"stan$e! A +"orrowing statute, dire$ts the state of the forum *lo$al Court- to apply the foreign statute of limitations to the pending $laims "ased on a foreign law! 0hile there are several kinds of +"orrowing statutes,, one form provides that an a$tion "arred "y the laws of the pla$e where it a$$rued will not "e enfor$ed in the forum even though the lo$al statute was not run against it! Se$tion FL of Code of Civil Pro$edure is of this kind! .t provides: +.f "y the laws of the state or $ountry where the $ause of a$tion arose, the a$tion is "arred, it is also "arred in

the Philippine .slands!, Se$tion FL has not "een repealed or amended "y the Civil Code of the Philippines! .n the light of the 12LG Constitution, however, Se$tion FL $annot "e enfor$ed e5 proprio vigore insofar as it ordains the appli$ation in this 'urisdi$tion of Se$tion 17H of the Amiri :e$ree 9o! BC of 12GH! The $ourts of the forum *lo$al Court- will not enfor$e any foreign $laim o"no5ious to the forum(s pu"li$ poli$y! To enfor$e the one4year pres$riptive period of the Amiri :e$ree 9o! BC of 12GH as regards the $laims in #uestion would $ontravene the pu"li$ poli$y on the prote$tion to la"or! .n the :e$laration of Prin$iples and State Poli$ies, the 12LG Constitution emphasized that:+The state shall promote so$ial 'usti$e in all phases of national development, *Se$! 13-! NThe state affirms la"or as a primary so$ial e$onomi$ for$e! .t shall prote$t the rights of workers and promote their welfare, *Se$! 1L-! .n Arti$le Q... on So$ial Dusti$e and %uman )ights, the 12LG Constitution provides: +Se$! C! The State shall afford full prote$tion to la"or, lo$al and overseas, organized and unorganized, and promote full employment and e#uality of employment opportunities for all!, Thus, the appli$a"le law on pres$ription is the Philippine law! The ne5t #uestion is whether the pres$riptive period governing the filing of the $laims is C years, as provided "y the /a"or Code or 13 years, as provided "y the Civil Code of the Philippines! Arti$le 11FF of the Civil Code of the Philippines provides: +The following a$tions must "e "rought within ten years from the time the right of a$tion a$$ross: *1- >pon a written $ontra$t@ *B- >pon an o"ligation $reated "y law@ *C- >pon a 'udgment, .n this $ase, the $laim for pay differentials is primarily an$hored on the written $ontra$ts "etween the litigants, the ten4year pres$riptive period provided "y Art! 11FF*l- of the

9ew Civil Code should govern! C! 9 ! A $lass suit is proper where the su"'e$t matter of the $ontroversy is one of $ommon or general interest to many and the parties are so numerous that it is impra$ti$a"le to "ring them all "efore the $ourt! 0hen all the $laims are for "enefits granted under the &ahrain law many of the $laimants worked outside &ahrain! Some of the $laimants were deployed in .ndonesia under different terms and $ondition of employment! .nasmu$h as the First re#uirement of a $lass suit is not present *$ommon or general interest "ased on the Amiri :e$ree of the State of &ahrain-, it is only logi$al that only those who worked in &ahrain shall "e entitled to rile their $laims in a $lass suit! 0hile there are $ommon defendants *A.&C and &)..- and the nature of the $laims is the same *for employee(s "enefits-, there is no $ommon #uestion of law or fa$t! 0hile some $laims are "ased on the Amiri /aw of &ahrain, many of the $laimants never worked in that $ountry, "ut were deployed elsewhere! Thus, ea$h $laimant is interested only in his own demand and not in the $laims of the other employees of defendants! A $laimant has no $on$ern in prote$ting the interests of the other $laimants as shown "y the fa$t, that hundreds of them have a"andoned their $o4$laimants and have entered into separate $ompromise settlements of their respe$tive $laims! The $laimants who worked in &ahrain $an not "e allowed to sue in a $lass suit in a 'udi$ial pro$eeding! 0%=)=F )=, all the three petitioners are :.SM.SS=:!

Christensen as her lega$y, and the rest of his estate to his daughter />CI Christensen, as pronoun$ed "y CF. :avao! pposition to the approval of the pro'e$t of partition was filed "y %elen, insofar as it deprives her of her legitime as an a$knowledged natural $hild, she having "een de$lared "y >s an a$knowledged natural $hild of the de$eased =dward in an earlier $ase! As to his $itizenship, we find that the $itizenship that he a$#uired in California when he resided in Sa$ramento from 123F to 121C, was never lost "y his stay in the Philippines, and the de$eased appears to have $onsidered himself as a $itizen of California "y the fa$t that when he e5e$uted his will he de$lared that he was a $itizen of that State@ so that he appears never to have intended to a"andon his California $itizenship "y a$#uiring another! &ut at the time of his death, he was domi$iled in the Philippines! .SS>=: what law on su$$ession should apply, the Philippine law or the California law? %=/:: 0%=)=F )=, the de$ision appealed from is here"y reversed and the $ase returned to the lower $ourt with instru$tions that the partition "e made as the Philippine law on su$$ession provides! The law that governs the validity of his testamentary dispositions is defined in Arti$le 1H of the Civil Code of the Philippines, whi$h is as follows: A)T! 1H! )eal property as well as personal property is su"'e$t to the law of the $ountry where it is situated! %owever, intestate and testamentary su$$essions, "oth with respe$t to the order of su$$ession and to the amount of su$$essional rights and to the intrinsi$ validity of testamentary provisions, shall "e regulated "y the national law of the person whose su$$ession is under $onsideration, whatever may "e the nature of the property and regardless of the $ountry where said property may "e found!

A#NAR VS GARCIA AR9A) vs! ;A)C.A ;!)! 9o! /41HGF2 Danuary C1, 12HC FACTS: =:0A): Christensen died testate! The estate was distri"uted "y =5e$utioner Aznar a$$ording to the will, whi$h provides that: Php C,H33 "e given to %=/=9

The appli$ation of this arti$le in the $ase at "ar re#uires the determination of the meaning of the term +national law, is used therein! The ne5t #uestion is: 0hat is the law in California governing the disposition of personal property? The de$ision of CF. :avao, sustains the $ontention of the e5e$utor4appellee that under the California Pro"ate Code, a testator may dispose of his property "y will in the form

and manner he desires! &ut %=/=9 invokes the provisions of Arti$le 2FH of the Civil Code of California, whi$h is as follows: .f there is no law to the $ontrary, in the pla$e where personal property is situated, it is deemed to follow the person of its owner, and is governed "y the law of his domi$ile! .t is argued on e5e$utor(s "ehalf that as the de$eased Christensen was a $itizen of the State of California, the internal law thereof, whi$h is that given in the 6aufman $ase, should govern the determination of the validity of the testamentary provisions of Christensen(s will, su$h law "eing in for$e in the State of California of whi$h Christensen was a $itizen! Appellant, on the other hand, insists that Arti$le 2FH should "e appli$a"le, and in a$$ordan$e therewith and following the do$trine of the renvoi, the #uestion of the validity of the testamentary provision in #uestion should "e referred "a$k to the law of the de$edent(s domi$ile, whi$h is the Philippines! 0e note that Arti$le 2FH of the California Civil Code is its $onfli$t of laws rule, while the rule applied in .n re 6aufman, its internal law! .f the law on su$$ ession and the $onfli$t of laws rules of California are to "e enfor$ed 'ointly, ea$h in its own intended and appropriate sphere, the prin$iple $ited .n re 6aufman should apply to $itizens living in the State, "ut Arti$le 2FH should apply to su$h of its $itizens as are not domi$iled in California "ut in other 'urisdi$tions! The rule laid down of resorting to the law of the domi$ile in the determination of matters with foreign element involved is in a$$ord with the general prin$iple of Ameri$an law that the domi$iliary law should govern in most matters or rights whi$h follow the person of the owner! Appellees argue that what Arti$le 1H of the Civil Code of the Philippines pointed out as the national law is the internal law of California! &ut as a"ove e5plained the laws of California have pres$ri"ed two sets of laws for its $itizens, one for residents therein and another for those domi$iled in other 'urisdi$tions! .t is argued on appellees( *Aznar and />CI- "ehalf that the $lause +if there is no law to the $ontrary in the pla$e where the property is situated, in Se$! 2FH of the California Civil Code refers to Arti$le 1H of the Civil Code of the Philippines and that the law to the $ontrary in the Philippines is the provision in said Arti$le 1H that the national law of the de$eased should govern! This $ontention $an not "e sustained!

As e5plained in the various authorities $ited a"ove, the national law mentioned in Arti$le 1H of our Civil Code is the law on $onfli$t of laws in the California Civil Code, i!e!, Arti$le 2FH, whi$h authorizes the referen$e or return of the #uestion to the law of the testator(s domi$ile! The $onfli$t of laws rule in California, Arti$le 2FH, Civil Code, pre$isely refers "a$k the $ase, when a de$edent is not domi$iled in California, to the law of his domi$ile, the Philippines in the $ase at "ar! The $ourt of the domi$ile $an not and should not refer the $ase "a$k to California@ su$h a$tion would leave the issue in$apa"le of determination "e$ause the $ase will then "e like a foot"all, tossed "a$k and forth "etween the two states, "etween the $ountry of whi$h the de$edent was a $itizen and the $ountry of his domi$ile! The Philippine $ourt must apply its own law as dire$ted in the $onfli$t of laws rule of the state of the de$edent, if the #uestion has to "e de$ided, espe$ially as the appli$ation of the internal law of California provides no legitime for $hildren while the Philippine law, Arts! LLG*F- and L2F, Civil Code of the Philippines, makes natural $hildren legally a$knowledged for$ed heirs of the parent re$ognizing them! 0e therefore find that as the domi$ile of the de$eased =dward, a $itizen of California, is the Philippines, the validity of the provisions of his will depriving his a$knowledged natural $hild, the appellant %=/=9, should "e governed "y the Philippine /aw, the domi$ile, pursuant to Art! 2FH of the Civil Code of California, not "y the internal law of California!! 9 T=S: There is no single Ameri$an law governing the validity of testamentary provisions in the >nited States, ea$h state of the >nion having its own private law appli$a"le to its $itizens only and in for$e only within the state! The +national law, indi$ated in Arti$le 1H of the Civil Code a"ove #uoted $an not, therefore, possi"ly mean or apply to any general Ameri$an law! So it $an refer to no other than the private law of the State of California! G.R. No. L$23%7& '()*e %, 1+%7, -ell.s vs. -ell.s

/AC!S0 Amos ;! &ellis was a $itizen of the State of Te5as and of the >nited States! %e had five legitimate $hildren with his first wife *whom he divor$ed-, three legitimate $hildren with

his se$ond wife *who survived him- and, finally, three illegitimate $hildren!

rape Morada! Fortunately, a room"oy J several se$urity personnel heard her $ries for help J res$ued her! The .ndonesian poli$e $ame J arrested Thamer J Allah! Saudia offi$ials interrogated Morada a"out the Dakarta in$ident! They tried to pressure her in making a statement to drop the $ase against Thamer J Allah, "ut Morada refused to $ooperate! .ndonesian authorities agreed to deport Thamer J Allah after B weeks of detention, J they were again employed "y Saudia!

H years prior Amos &ellis( death, he e5e$uted two*B- wills, apportioning the remainder of his estate and properties to his seven surviving $hildren! The appellants filed their oppositions to the pro'e$t of partition $laiming that they have "een deprived of their legitimes to whi$h they were entitled a$$ording to the Philippine law! Appellants argued

1 S years later, in )iyadh, a few minutes "efore the departure of her flight to Manila, Morada was not allowed to "oard the plane J instead ordered to take a later flight to that the de$eased wanted his Philippine estate to "e governed "y the Philippine law, thus Deddah to see Mr! Miniewy, the Chief /egal ffi$er of Saudia! 0hen she did, she was "rought to a Saudi $ourt where she was asked to sign a do$ument written in Ara"i$! the $reation of two separate wills! They told her this was ne$essary to $lose the $ase against Thamer J Allah! As it turned out, Morada signed a noti$e to her to appear "efore the $ourt! Morada returned to Manila! ISS1 0 0hether or not the Philippine law "e applied in the $ase in the determination of the illegitimate $hildren(s su$$essional rights R1LING0 Court ruled that provision in a foreigner(s will to the effe$t that his properties shall "e distri"uted in a$$ordan$e with Philippine law and not with his national law, is illegal and void, for his national law $annot "e ignored in view of those matters that Arti$le 13 A now Arti$le 1H A of the Civil Code states said national law should govern! /ater on, Morada was "rought to the same Saudi $ourt, J she was informed that the investigation was merely routinary J posed no danger to her! A Saudi 'udge interrogated her through an interpreter a"out the Dakarta in$ident! 0hen her plane was a"out to take off, a Saudia offi$er told her that the airline had for"idden her to take flight! She was es$orted to the same $ourt where the 'udge rendered a de$ision senten$ing her to 7 months imprisonment J to BLH lashes! .t was then that she realized that the Saudi $ourt tried her, together wK Thamer J Allah, for the Dakarta in$ident! The $ourt found Morada guilty of *1- adultery, *B- going to a dis$o, dan$ing J listening to the musi$ in violation of .slami$ laws *C- so$ializing wK the male $rew, in $ontravention of .slami$ tradition &e$ause she was wrongfully $onvi$ted, the Prin$e of Makkah dismissed the $ase against her J allowed her to leave Saudi Ara"ia! She was terminated from the servi$e "y Saudia, wKo her "eing informed of the $ause! Morada filed a Complaint for :amages against Saudia! Saudia filed a MT:! Saudia(s $ontention: The trial $ourt has no 'urisdi$tion to try the $ase! Morada(s $laim for alleged a"use of rights o$$urred in Saudi! The e5isten$e of a foreign element #ualifies the instant $ase for the appli$ation of the law of Saudi, "y virtue of the le5 lo$i deli$ti $ommissi rule! Morada(s $ontention: Sin$e her $omplaint is "ased on Arts! 12 and B1 of the 9CC, then the instant $ase is properly a matter of domesti$ law!

0here the testator was a $itizen of Te5as and domi$iled in Te5as, the intrinsi$ validity of his will should "e governed "y his national law! Sin$e Te5as law does not re#uire legitimes, then his will, whi$h deprived his illegitimate $hildren of the legitimes, is valid!

The Supreme Court held that the illegitimate $hildren are not entitled to the legitimes under the te5as law, whi$h is the national law of the de$eased! SA1DI ARA-IAN AIRLIN S v. CA

ISS1 'a, 0K9 the instant $ase is a matter of domesti$ law! /AC!S 'b, 0K9 Philippine $ourts have 'urisdi$tion to hear J try the $ase! Saudia hired Milagros Morada as a flight Attendant for its airlines "ased in Deddah, Saudi 'c, 0K9 Philippine law should govern! Ara"ia! 0hile on a lay4over in Dakarta, Morada went to a dis$o dan$e wK fellow $rew mem"ers Thamer J Allah, "oth Saudi nationals! &e$ause it was almost morning when R1LING they returned to their hotels, they agreed to have "reakfast together at the room of 'a, 9 ! A fa$tual situation that $uts a$ross territorial lines J is affe$ted "y the diverse Thamer! 0hen they were in the room, Allah left, and that(s when Thamer attempted to laws of B or more states is said to $ontain a +foreign element!, .n the instant $ase, the

foreign element $onsisted in the fa$t that Morada is a resident Philippine national, J that Saudia is a resident foreign $orporation! Also, "y virtue of the employment of Morada wK Saudia as a flight stewardess, events did transpire during her many o$$asions of travel a$ross national "orders, parti$ularly from Manila to Deddah J vi$e versa, that $aused a +$onfli$ts, situation to arise!

parties, and *d- the pla$e where the relationship, if any, "etween the parties is $entered!

There is "asis for the $laim that over4all in'ury o$$urred and lodged in the Philippines! There is likewise no #uestion that Morada is a resident Filipina national, working wK Saudia, a resident foreign $orporation engaged here in the "usiness of international air $arriage! Thus, the +relationship, "etween the parties was $entered here, although it 'b, I=S! The )TC of TC possesses 'urisdi$tion over the su"'e$t matter of the suit! should "e stressed that this suit is not "ased on mere la"or law violations! Pragmati$ $onsiderations, in$luding the $onvenien$e of the parties, also weigh heavily in favor the )TC of TC assuming 'urisdi$tion! Paramount is the private interest of the SALVACION vs C N!RAL -AN2 27& SCRA 27 litigant! =nfor$ea"ility of a 'udgment if one is o"tained is #uite o"vious! )elative advantages J o"sta$les to a fair trial are e#ually important! Saudia may not, "y $hoi$e of /AC!S0 an in$onvenient form, ve5, harass or oppress Morada, i!e! infli$ting upon him needless e5pense or distur"an$e! &ut unless the "alan$e is strongly in favor of the defendant, the ;reg &artelli, an Ameri$an tourist, was arrested for $ommitting four $ounts of rape and plaintiff(s $hoi$e of forum should rarely "e distur"ed! serious illegal detention against 6aren Salva$ion! Poli$e re$overed from him several 0eighing the relative $laims of the parties, TC )TC found it "est to hear the $ase in the Philippines! %ad it refused to take $ognizan$e of the $ase, it would "e for$ing Morada to seek remedial a$tion elsewhere, i!e! in Saudi where she no longer maintains su"stantial $onne$tions! That would have $aused a fundamental unfairness to her! Moreover, "y hearing the $ase in the Philippines no unne$essary diffi$ulties and in$onvenien$e have "een shown "y either of the parties! The $hoi$e of forum of Morada should "e upheld! dollar $he$ks and a dollar a$$ount in the China &anking Corp! %e was, however, a"le to es$ape from prison! .n a $ivil $ase filed against him, the trial $ourt awarded Salva$ion moral, e5emplary and attorney(s fees amounting to almost P1,333,333!33!

Salva$ion tried to e5e$ute the 'udgment on the dollar deposit of &artelli with the China &anking Corp! "ut the latter refused arguing that Se$tion 11 of Central &ank Cir$ular 9o! 2H3 e5empts foreign $urren$y deposits from atta$hment, garnishment, or any other Similarly, the TC )TC also possesses 'urisdi$tion over the persons of the parties! &y order or pro$ess of any $ourt, legislative "ody, government agen$y or any filing her Complaint wK TC )TC, Morada has voluntary su"mitted herself to the administrative "ody whatsoever! Salva$ion therefore filed this a$tion for de$laratory 'urisdi$tion of the $ourt! The re$ords show that Saudia filed several motions praying for relief in the Supreme Court! the dismissal of Morada(s Complaint! Saudia also filed an Answer .n Ex Abundante ISS1 0 Cautelam! 0hat is very patent and e5pli$it from the motions filed, is that Saudia prayed for other reliefs under the premises! >ndenia"ly, Saudia has effe$tively su"mitted to TC Should Se$tion 11C of Central &ank Cir$ular 9o! 2H3 and Se$tion L of )epu"li$ A$t 9o! )TC(s 'urisdi$tion "y praying for the dismissal of the Complaint on grounds other than HFBH, as amended "y P: 1BFH, otherwise known as the Foreign Curren$y :eposit A$t "e made appli$a"le to a foreign transient? la$k of 'urisdi$tion! 'c, I=S! Considering that the $omplaint in the $ourt a #uo is one involving torts, the +$onne$ting fa$tor, or +point of $onta$t, $ould "e the pla$e where the tortuous $ondu$t or le5 lo$i a$tus o$$urred! And applying the torts prin$iple in a $onfli$ts $ase, we find that the Philippines $ould "e said as situs of the tort *the pla$e where the alleged tortuous $ondu$t took pla$e-! This is "e$ause it is in the Philippines where Saudia allegedly de$eived Morada, a Filipina residing J working here! That $ertain a$ts or parts of the in'ury allegedly o$$urred in another $ountry is of no moment! 0hat is important is the pla$e where the overall harm or the fatality of the alleged in'ury to the person, reputation, so$ial standing J human rights of $omplainant, had lodged, a$$ording to the Morada! Also, we find here an o$$asion to apply the +State of the most signifi$ant relationship, rule, whi$h in our view should "e appropriate to apply now, given the fa$tual $onte5t of this $ase! .n applying said prin$iple to determine the State whi$h has the most signifi$ant relationship, the following $onta$ts are to "e taken into a$$ount and evaluated a$$ording to their relative importan$e with respe$t to the parti$ular issue: *a- the pla$e where the in'ury o$$urred@ *"- the pla$e where the $ondu$t $ausing the in'ury o$$urred@ *$- the domi$ile, residen$e, nationality, pla$e of in$orporation and pla$e of "usiness of the H LD: The provisions of Se$tion 11C of Central &ank Cir$ular 9o! 2H3 and P: 9o! 1BFH, insofar as it amends Se$tion L of )epu"li$ A$t 9o! HFBH, are here"y held to "e .9APP/.CA&/= to this $ase "e$ause of its pe$uliar $ir$umstan$es! )espondents are here"y re#uired to $omply with the writ of e5e$ution issued in the $ivil $ase and to release to petitioners the dollar deposit of &artelli in su$h amount as would satisfy the 'udgment! RA!IO: Supreme Court ruled that the #uestioned law makes futile the favora"le 'udgment and award of damages that Salva$ion and her parents fully deserve! .t then pro$eeded to show that the e$onomi$ "asis for the ena$tment of )A 9o! HFBH is not anymore present@ and even if it still e5ists, the #uestioned law still denies those entitled to due pro$ess of law for "eing unreasona"le and oppressive! The intention of the law may "e good when ena$ted! The law failed to anti$ipate the ini#uitous effe$ts produ$ing outright in'usti$e and ine#uality su$h as the $ase "efore us! The SC adopted the $omment of the Soli$itor ;eneral who argued that the ffshore &anking System and the Foreign Curren$y :eposit System were designed to draw

deposits from foreign lenders and investors and, su"se#uently, to give the latter prote$tion! %owever, the foreign $urren$y deposit made "y a transient or a tourist is not the kind of deposit en$ouraged "y P: 9os! 13CF and 13C7 and given in$entives and prote$tion "y said laws "e$ause su$h depositor stays only for a few days in the $ountry and, therefore, will maintain his deposit in the "ank only for a short time! Considering that &artelli is 'ust a tourist or a transient, he is not entitled to the prote$tion of Se$tion 11C of Central &ank Cir$ular 9o! 2H3 and P: 9o! 1BFH against atta$hment,garnishment or other $ourt pro$esses! Further, the SC said: +.n fine, the appli$ation of the law depends on the e5tent of its 'usti$e! =ventually, if we rule that the #uestioned Se$tion 11C of Central &ank Cir$ular 9o! 2H3 whi$h e5empts from atta$hment, garnishment, or any other order or pro$ess of any $ourt, legislative "ody, government agen$y or any administrative "ody whatsoever, is appli$a"le to a foreign transient, in'usti$e would result espe$ially to a $itizen aggrieved "y a foreign guest like a$$used ;reg &artelli! This would negate Art.cle 10 o3 t4e Ne5 C.v.l Co6e 54.c4 7rov.6es t4at 8.* case o3 6o)bt .* t4e .*ter7retat.o* or a77l.cat.o* o3 la5s, .t .s 7res)9e6 t4at t4e la59a:.*; bo6< .*te*6e6 r.;4t a*6 =)st.ce to 7reva.l !,

The attempt to serve the summons was unsu$$essful "e$ause Mr! :inozo was in Manila and would "e "a$k on April BF, 12L3

April BF, 12L3: Mr! :inozo returned to C!F!

ffi$e to serve the summons "ut he

refused to re$eive $laiming that he no longer an employee After the B attempts of servi$e were unsu$$essful, Supreme Court of Dapan sent the summons together with the other legal do$uments to the Ministry ofForeign Affairs of DapanU Dapanese =m"assy in ManilaUMinistry *now :epartmentof Foreign Affairs of the PhilippinesU=5e$utive Dudge of the Court of First .nstan$e *now )egional Trial Court- of Manila who ordered :eputy Sheriff )olando &alingitUC!F! Main ffi$e

August BL, 12L3: C!F! re$eived from :eputy Sheriff )olando &alingit the writ of summons "ut failed to appear at the s$heduled hearing!

Danuary B2, 12L1: Tokyo Court rendered 'udgment ordering the C!F! to pay LC,17L,127 Ien and damages for delay at the rate of H8 per annum from August BL, 12L3 up to and until payment is $ompleted

Nort45est Or.e*t A.rl.*es, I*c. V. CA '1++>, ;!)! 9o! 11B7GC Fe"ruary 2, 1227 /essons Appli$a"le: Territoriality Prin$iple *$onfli$ts of law-

Mar$h BF, 12L1: C!F! re$eived from :eputy Sheriff &alingit $opy of the 'udgment! C!F! did not appeal so it "e$ame final and e5e$utory

May B3, 12LC: 9orthwest filed a suit for enfor$ement of the 'udgment a )TC Duly 1H, 12LC: C!F! averred that the Dapanese Court sought to "e enfor$ed is null and void and unenfor$ea"le in this 'urisdi$tion having "een rendered without due and proper noti$e andKor with $ollusion or fraud andKor upon a $lear mistake of law and fa$t! The foreign 'udgment in the Dapanese Court sought in this a$tion is null and void for want of 'urisdi$tion over the person of the defendant $onsidering that this is an a$tion in personam! The pro$ess of the Court in Dapan sent to the Philippines whi$h is outside Dapanese 'urisdi$tion $annot $onfer 'urisdi$tion over the defendant in the $ase "efore the Dapanese Court of the $ase at "ar

FACTS: 9orthwest Airlines *9orthwest- and C!F! Sharp J Company *C!F!-, through its Dapan "ran$h, entered into an .nternational Passenger Sales Agen$y Agreement, where"y the 9orthwest authorized the C!F! to sell its air transportation ti$kets Mar$h B7, 12L3: >na"le to remit the pro$eeds of the ti$ket sales, 9orthwest sued C!F! in Tokyo, Dapan, for $olle$tion of the unremitted pro$eeds of the ti$ket sales, with $laim for damages April 11, 12L3: writ of summons was issued "y the CHth Civil :epartment, Tokyo :istri$t Court of Dapan

CA sustained )TC: Court agrees that if the C!F! in a foreign $ourt is a resident in the $ourt of that foreign $ourt su$h $ourt $ould a$#uire 'urisdi$tion over the person of C!F! "ut it must "e served in the territorial 'urisdi$tion of the foreign$ourt

.SS>=: 0K9 the Dapanese Court has 'urisdi$tion over C!F! %=/:: I=S! instant petition is partly ;)A9T=:, and the $hallenged de$ision is AFF.)M=: insofar as it denied 9 )T%0=STVs $laims for attorneys fees, litigation e5penses, and e5emplary damages Conse#uently, the party atta$king *C!F!- a foreign 'udgment has the "urden of over$oming the presumption of its validity A$$ordingly, the presumption of validity and regularity of the servi$e of summons and the de$ision thereafter rendered "y the Dapanese $ourt must stand! Applying it, the Dapanese law on the matter is presumed to "e similar with the Philippine law on servi$e of summons on a private foreign $orporation doing "usiness in the Philippines! Se$tion 1F, )ule 1F of the )ules of Court provides that if the defendant is a foreign $orporation doing "usiness in the Philippines, servi$e may "e made: *1- on its resident agent designated in a$$ordan$e with law for that purpose, or, *B- if there is no su$h resident agent, on the government offi$ial designated "y law to that effe$t@ or *C- on any of its offi$ers or agents within the Philippines! .f the foreign $orporation has designated an agent to re$eive summons, the designation is e5$lusive, and servi$e of summons is without for$e and gives the $ourt no 'urisdi$tion unless made upon him! 0here the $orporation has no su$h agent, servi$e shall "e made on the government offi$ial designated "y law, to wit: *a- the .nsuran$e Commissioner in the $ase of a foreign insuran$e $ompany *"- the Superintendent of &anks, in the $ase of a foreign "anking $orporation *$- the Se$urities and =5$hange Commission, in the $ase of other foreign$orporations duly li$ensed to do "usiness in the Philippines! 0henever servi$e of pro$ess is so made, the government offi$e or offi$ial served shall transmit "y mail a $opy of the summons or other legal pro$$ess to the $orporation at its

home or prin$ipal offi$e! The sending of su$h $opy is a ne$essary part of the servi$e! The servi$e on the proper government offi$ial under Se$tion 1F, )ule 1F of the )ules of Court, in relation to Se$tion 1BL of the Corporation Code ur laws and 'urispruden$e indi$ate a purpose to assimilate foreign$orporations, duly li$ensed to do "usiness here, to the status of domesti$$orporations 0e think it would "e entirely out of line with this poli$y should we make a dis$rimination against a foreign $orporation, like the petitioner, and su"'e$t its property to the harsh writ of seizure "y atta$hment when it has $omplied not only with every re#uirement of law made spe$ially of foreign $orporations, "ut in addition with every re#uirement of law made of domesti$ $orporations .n as mu$h as S%A)P was admittedly doing "usiness in Dapan through its four duly registered "ran$hes at the time the $olle$tion suit against it was filed, then in the light of the pro$essual presumption, S%A)P may "e deemed a resident of Dapan, and, as su$h, was amena"le to the 'urisdi$tion of the $ourts therein and may "e deemed to have assented to the said $ourtsV lawful methods of serving pro$ess! A$$ordingly, the e5traterritorial servi$e of summons on it "y the Dapanese Court was valid not only under the pro$essual presumption "ut also "e$ause of the presumption of regularity of performan$e of offi$ial duty! "4.l.77.*e Al)9.*)9 GR 13737&@ 12 October 2000 Fa$ts: n 31 Dune 12GL, FAS;. =nterprises .n$orporated *+FAS;.,-, a $orporation organized and e5isting under and "y virtue of the laws of the State of California, >nited States of Ameri$a, entered into a distri"utorship arrangement with Philippine Aluminum 0heels, .n$orporated *+PA0.,-, a Philippine $orporation, and Fratelli Pedrini Sarezzo S!P!A! *+FPS,-, an .talian $orporation! The agreement provided for the pur$hase, importation and distri"utorship in the >nited States of aluminium wheels manufa$tured "y PA0.! FAS;. then paid PA0. the F & value of the wheels! >nfortunately, FAS;. later found the shipment to "e defe$tive and in non4$omplian$e with the $ontra$t! ?4eels vs /ASGI *ter7r.ses

n B1 Septem"er 12G2, FAS;. instituted an a$tion against PA0. and FPS for "rea$h of $ontra$t and re$overy of damages in the amount of >SMB,C1H,721!33 "efore the >nited States :istri$t Court for the Central :istri$t of California! .n the interim, two agreements were entered "y the parties "ut PA0. kept on failing to dis$harge its o"ligations therein! .rked "y PA0.(s persistent default, FAS;. filed with the >S :istri$t Court of the Central :istri$t of California the agreements for 'udgment against PA0.! n BF August 12LB, FAS;. filed a noti$e of entry of 'udgment! >na"le to o"tain satisfa$tion of the final 'udgment within the >nited States, FAS;. filed a $omplaint for +enfor$ement of foreign 'udgment,, "efore )TC Makati! The Makati $ourt, however, dismissed the $ase, on the ground that the de$ree was tainted with $ollusion, fraud, and $lear mistake of law and fa$t! The lower $ourt ruled that the foreign 'udgment ignored the re$ipro$al o"ligations of the parties! 0hile the assailed foreign 'udgment ordered the return "y PA0. of the pur$hase amount, no similar order was made re#uiring FAS;. to return to PA0. the third and fourth $ontainers of wheels! This situation amounted to an un'ust enri$hment on the part of FAS;.! Furthermore, the )TC said, agreements whi$h the California $ourt had "ased its 'udgment were a nullity for having "een entered into "y Mr! Thomas )eady, $ounsel for PA0., without the latter(s authorization! %owever, the Court of Appeals reversed this de$ision! .ssue: 0 9 the Philippine Court may enfor$e the said foreign 'udgment! %eld: .n this 'urisdi$tion, a valid 'udgment rendered "y a foreign tri"unal may "e re$ognized insofar as the immediate parties and the underlying $ause of a$tion are $on$erned so long as it is $onvin$ingly shown that there has "een an opportunity for a full and fair hearing "efore a $ourt of $ompetent 'urisdi$tion@ that trial upon regular pro$eedings has "een $ondu$ted, following due $itation or voluntary appearan$e of the defendant and under a system of 'urispruden$e likely to se$ure an impartial administration of 'usti$e@ and that there is nothing to indi$ate either a pre'udi$e in $ourt and in the system of laws under whi$h it is sitting or fraud in pro$uring the 'udgment! PA0. $laims that its $ounsel, Mr! )eady, has a$ted without its authority! <erily, in this 'urisdi$tion, it is $lear that an attorney $annot, without a $lient(s authorization, settle the a$tion or su"'e$t matter of the litigation even when he honestly "elieves that su$h a settlement will "est serve his $lient(s interest! %owever, PA0. failed to su"stantiate this $omplain with suffi$ient eviden$e! %en$e, the foreign 'udgment must "e enfor$ed!

=ven if PA0. assailed that fraud tainted the agreements whi$h the >S Court "ased its 'udgment, this $annot prevent the enfor$ement of said 'udgment! PA0. $laimed that there was $ollusion and fraud in the signing of the agreements! Although the >S Court already ad'udi$ated on this matter, PA0. insisted on raising it again in this Court! Fraud, to hinder the enfor$ement within this 'urisdi$tion of a foreign 'udgment, must "e e5trinsi$, i!e!, fraud "ased on fa$ts not $ontroverted or resolved in the $ase where 'udgment is rendered, or that whi$h would go to the 'urisdi$tion of the $ourt or would deprive the party against whom 'udgment is rendered a $han$e to defend the a$tion to whi$h he has a meritorious $ase or defense! .n fine, intrinsi$ fraud, that is, fraud whi$h goes to the very e5isten$e of the $ause of a$tion W su$h as fraud in o"taining the $onsent to a $ontra$t W is deemed already ad'udged, and it, therefore, $annot militate against the re$ognition or enfor$ement of the foreign 'udgment!

SOORA(M1LL NAGARM1LL vs. -INAL-AGAN$ISA- LA S1GAR COM"ANA, INC. G.R. No. L$22B70@ Ma< 2&, 1+70 Fa$ts: >nder a Contra$t dated May H, 12F2, plaintiff, a foreign $orporation with offi$es at Cal$utta, .ndia, agreed to sell to defendant, a domesti$ $orporation with offi$es at the Manila, 1,G33,333 pie$es of %essian "ags at MBH!B3 per 133 "ags, C!.!F! .loilo! Shipment of these "ags was to "e made in e#ual installments of FB7,333 p$s! or FB7 "ales during ea$h of the months of Duly, August, Septem"er and $to"er, 12F2!

n Septem"er L, 12F2, plaintiff advised defendant that of the L73 "ales s$heduled for shipment in Duly and August, the former was a"le to ship only C13 "ales owing to the alleged failure of the Adam'ee Dute Mills to supply the goods in due time! .n a letter dated Septem"er B2, 12F2, defendant re#uested plaintiff to ship 133 "ales of the 7F3 "ales defaulted from the Duly and August shipments! .n this $onne$tion, it may also "e mentioned that of the FB7 "ales s$heduled for shipment in Septem"er, 7F "ales were likewise defaulted resulting in a total of 17F "ales whi$h is now the o"'e$t of the $ontroversy! Meanwhile, on $to"er 1, 12F2, the ;overnment of .ndia in$reased the e5port duty of

'ute "ags from L3 to C73 rupees per ton!

$to"er BG, 12F2, plaintiff wrote to

Cham"er of Commer$e and of the %igh Court of Dudi$ature of Cal$utta fail to apply to the they have "een suffi$iently impea$hed "y appellant, on the ground of +$lear mistake of law,! 0e $an not san$tion a $lear mistake of law that would work an o"vious in'usti$e upon appellant!

defendant for an in$rease of MF,333!33 in its letter of $redit to $over the shipment of 17F fa$ts of this $ase fundamental prin$iples of $ontra$t, the same may "e impea$hed, as "ales whi$h under the $ontra$t should have "een in$luded in the Duly, August and Septem"er shipments! n Fe"ruary H, 1271, defendant re$eived notifi$ation from the &engal Cham"er of Commer$e Tri"unal of Ar"itration in Cal$utta, .ndia, advising it that on :e$em"er BL, 1273, Plaintiff applied to said Tri"unal for ar"itration regarding their $laim! The Tri"unal re#uested the defendant to send them its version of the $ase! This, defendant did on Mar$h 1, 1271, thru the then ;overnment Corporate Counsel, former Dusti$e Pompeyo :iaz! IDONAH " R2INS GRN B7>17, ()*e 27, 1+B1 vs. ROCAS ! AL.

FACTS: The &engal Cham"er of Commer$e, Tri"unal of Ar"itration, refused to sustain defendant(s Duly 7, 12CL, respondent =ugene Perkins filed a $omplaint in the CF.4 Manila against the $ontention and de$ided in favor of the plaintiff, ordering the defendant to pay to the &enguet Consolidated Mining Company for the re$overy of a sum $onsisting of dividends plaintiff the sum of 1L,7HB rupees and L annas! This award was thereafter referred to the Cal$utta %igh Court whi$h issued a de$ree affirming the award! .ssue: 0 9 the de$ision of the Tri"unal of Ar"itration of the &engal Cham"er of Commer$e, as affirmed "y the %igh Court of Dudi$ature of Cal$utta, is enfor$ea"le in the Philippines! %eld: >nder the )ules, a 'udgment for a sum of money rendered "y a foreign $ourt +is presumptive eviden$e of a right as "etween the parties and their su$$essors in interest "y a su"se#uent title,, "ut when suit for its enfor$ement is "rought in a Philippine $ourt, said 'udgment +may "e repelled "y eviden$e of a want of 'urisdi$tion, want of noti$e to the party, $ollusion, fraud, or $lear mistake of law or fa$t, There is no #uestion at all that appellee was guilty of a "rea$h of $ontra$t when it failed to deliver one4hundred fifty4four %essian "ales whi$h, a$$ording to the $ontra$t entered into with appellant, should have "een delivered to the latter in the months of Duly, August and Septem"er, all of the year 12F2! .t is e#ually $lear "eyond dou"t that had these one4hundred fifty4four "ales "een delivered in a$$ordan$e with the $ontra$t aforesaid, the in$rease in the e5port ta5 due upon them would not have "een imposed "e$ause said in$reased e5port ta5 "e$ame effe$tive only on $to"er 1, 12F2! whi$h have "een de$lared and made paya"le on shares of sto$k registered in his name, payment of whi$h was "eing withheld "y the $ompany, and for the re$ognition of his right to the $ontrol and disposal of said shares to the e5$lusion of all others! The $ompany alleged, "y way of defense that the withholding of plaintiff(s right to the disposal and $ontrol of the shares was due to $ertain demands made with respe$t to said shares "y the petitioner .donah Perkins, and "y one =ngelhard! =ugene Perkins in$luded in his modified $omplaint as parties defendants petitioner, .donah Perkins, and =ngelhard! =ugene Perkins prayed that petitioner .donah Perkins and %! =ngelhard "e ad'udged without interest in the shares of sto$k in #uestion and e5$luded from any $laim they assert thereon! Summons "y pu"li$ation were served upon the nonresident defendants .donah Perkins and =ngelhard! =ngelhard filed his answer! Petitioner filed her answer with a $ross$omplaint in whi$h she sets up a 'udgment allegedly o"tained "y her against respondent =ugene Perkins, from the SC of the State of 9ew Iork, wherein it is de$lared that she is the sole legal owner and entitled to the possession and $ontrol of the shares of sto$k in #uestion with all the $ash dividends de$lared thereon "y the &enguet Consolidated Mining Company! .donah Perkins filed a demurrer thereto on the ground that +the $ourt has no 'urisdi$tion of the su"'e$t of the a$tion,, "e$ause the alleged 'udgment of the SC of the State of 9ew Iork is res 'udi$ata! Petitioner(s demurrer was overruled, thus this petition! .SS>=:

To the e5tent, therefore, that the de$isions of the Tri"unal of Ar"itration of the &engal

0 9 in view of the alleged 'udgment entered in favor of the petitioner "y the SC of 9ew Iork and whi$h is $laimed "y her to "e res 'udi$ata on all #uestions raised "y the respondent, =ugene Perkins, the lo$al $ourt has 'urisdi$tion over the su"'e$t matter of the a$tion! )>/.9;: &y 'urisdi$tion over the su"'e$t matter is meant the nature of the $ause of a$tion and of the relief sought, and this is $onferred "y the sovereign authority whi$h organizes the $ourt, and is to "e sought for in general nature of its powers, or in authority spe$ially $onferred! .n the present $ase, the amended $omplaint filed "y the respondent, =ugene Perkins alleged $alls for the ad'udi$ation of title to $ertain shares of sto$k of the &enguet Consolidated Mining Company and the granting of affirmative reliefs, whi$h fall within the general 'urisdi$tion of the CF.4 Manila! Similarly CF.4 Manila is empowered to ad'udi$ate the several demands $ontained in petitioner(s $ross$omplaint! .donah Perkins in her $ross$omplaint "rought suit against =ugene Perkins and the &enguet Consolidated Mining Company upon the alleged 'udgment of the SC of the State of 9ew Iork and asked the $ourt "elow to render 'udgment enfor$ing that 9ew Iork 'udgment, and to issue e5e$ution thereon! This is a form of a$tion re$ognized "y se$tion C32 of the Code of Civil Pro$edure *now se$tion FG, )ule C2, )ules of Court- and whi$h falls within the general 'urisdi$tion of the CF.4 Manila, to ad'udi$ate, settle and determine! The petitioner e5presses the fear that the respondent 'udge may render 'udgment +annulling the final, su"sisting, valid 'udgment rendered and entered in this petitioner(s favor "y the $ourts of the State of 9ew Iork, whi$h de$ision is res 'udi$ata on all the #uestions $onstituting the su"'e$t matter of $ivil $ase, and argues on the assumption that the respondent 'udge is without 'urisdi$tion to take $ognizan$e of the $ause! 0hether or not the respondent 'udge in the $ourse of the pro$eedings will give validity and effi$a$y to the 9ew Iork 'udgment set up "y the petitioner in her $ross4$omplaint is a #uestion that goes to the merits of the $ontroversy and relates to the rights of the parties as "etween ea$h other, and not to the 'urisdi$tion or power of the $ourt! The test of 'urisdi$tion is whether or not the tri"unal has power to enter upon the in#uiry, not

Petition denied

NOR!H? S! ORI N! AIRLIN S, INC. vs. CA a*6 C./. SHAR" D COM"ANA INC. G.R. No. 112>73 /ebr)ar< +, 1++> FACTS: Petitioner 9orthwest rient Airlines, .n$! *9 )T%0=ST-, a $orporation organized under the laws of the State of Minnesota, >!S!A!, sought to enfor$e in the )TC4 Manila, a 'udgment rendered in its favor "y a Dapanese $ourt against private respondent C!F! Sharp J Company, .n$!, *S%A)P-, a $orporation in$orporated under Philippine laws! fa$tual and pro$edural ante$edents of this $ontroversy: n May 2, 12GF, 9orthwest Airlines and Sharp, through its Dapan "ran$h, entered into an .nternational Passenger Sales Agen$y Agreement, where"y the former authorized the latter to sell its air transportation ti$kets! >na"le to remit the pro$eeds of the ti$ket sales made "y defendant on "ehalf of the plaintiff under the said agreement, plaintiff on Mar$h B7, 12L3 sued defendant in Tokyo, Dapan, for $olle$tion of the unremitted pro$eeds of the ti$ket sales, with $laim for damages! n April 11, 12L3, a writ of summons was issued "y the CHth Civil :epartment, Tokyo :istri$t Court of Dapan against defendant at its offi$e at the Taiheiyo &uilding, Crd floor, 1CB, Iamashita4$ho, 9aka4ku, Iokohoma, 6anagawa Prefe$ture! The attempt to serve the summons was unsu$$essful "e$ause the "ailiff was advised "y a person in the offi$e that Mr! :inozo, the person "elieved to "e authorized to re$eive $ourt pro$esses was in Manila and would "e "a$k on April BF, 12L3! n April BF, 12L3, "ailiff returned to the defendant(s offi$e to serve the summons! Mr! :inozo refused to a$$ept the same $laiming that he was no longer an employee of the defendant! After the two attempts of servi$e were unsu$$essful, the 'udge of the Tokyo :istri$t Court de$ided to have the $omplaint and the writs of summons served at the head offi$e

of the defendant in Manila! n Duly 11, 12L3, the :ire$tor of the Tokyo :istri$t Court whether its $on$lusion in the $ourse of it is right or wrong! .f its de$ision is erroneous, its re#uested the Supreme Court of Dapan to serve the summons through diplomati$ 'udgment $an "e reversed on appeal@ "ut its determination of the #uestion, whi$h the $hannels upon the defendant(s head offi$e in Manila! petitioner here anti$ipates and seeks to prevent, is the e5er$ise "y that $ourt and the rightful e5er$ise of its 'urisdi$tion! n August BL, 12L3, defendant re$eived from :eputy Sheriff )olando &alingit the writ of summons *p! BGH, )e$ords-! :espite re$eipt of the same, defendant failed to appear at

the s$heduled hearing! Thus, the Tokyo Court pro$eeded to hear the plaintiff(s $omplaint and on ODanuary B2, 12L1P, rendered 'udgment ordering the defendant to pay the plaintiff the sum of LC,17L,127 Ien and damages for delay at the rate of H8 per annum from August BL, 12L3 up to and until payment is $ompleted *pp! 1B41F, )e$ords-!

pro$eedings and the giving of due noti$e therein! H The 'udgment may, however, "e assailed "y eviden$e of want of 'urisdi$tion, want of noti$e to the party, $ollusion, fraud, or $lear mistake of law or fa$t!*See Se$! 73, ) C2&eing the party $hallenging the 'udgment rendered "y the Dapanese $ourt, S%A)P had

n Mar$h BF, 12L1, defendant re$eived from :eputy Sheriff &alingit $opy of the 'udgment! :efendant not having appealed the 'udgment, the same "e$ame final and e5e$utory! Plaintiff was una"le to e5e$ute the de$ision in Dapan, hen$e, on May B3, 12LC, a suit for enfor$ement of the 'udgment was filed "y plaintiff "efore the )egional Trial Court of Manila &ran$h 7F! defendant filed its answer averring that the 'udgment of the Dapanese Court: *1- the foreign 'udgment sought to "e enfor$ed is null and void for want of 'urisdi$tion and *Bthe said 'udgment is $ontrary to Philippine law and pu"li$ poli$y and rendered without due pro$ess of law! .n its de$ision, the Court of Appeals sustained the trial $ourt! .t agreed with the latter in its relian$e upon &oudard vs! Tait wherein it was held that +the pro$ess of the $ourt has no e5traterritorial effe$t and no 'urisdi$tion is a$#uired over the person of the defendant "y serving him "eyond the "oundaries of the state!, To support its position, the Court of Appeals further stated: .n an a$tion stri$tly in personam, su$h as the instant $ase, personal servi$e of summons within the forum is re#uired for the $ourt to a$#uire 'urisdi$tion over the defendant *Magdalena =state .n$! vs! 9ieto, 1B7 SC)A BC3-! To $onfer 'urisdi$tion on the $ourt, personal or su"stituted servi$e of summons on the defendant not e5traterritorial servi$e is ne$essary!

the duty to demonstrate the invalidity of su$h 'udgment! .t is settled that matters of remedy and pro$edure su$h as those relating to the servi$e of pro$ess upon a defendant are governed "y the le5 fori or the internal law of the forum! L .n this $ase, it is the pro$edural law of Dapan where the 'udgment was rendered that determines the validity of the e5traterritorial servi$e of pro$ess on S%A)P! As to what this law is is a #uestion of fa$t, not of law! .t was then in$um"ent upon S%A)P to present eviden$e as to what that Dapanese pro$edural law is and to show that under it, the assailed e5traterritorial servi$e is invalid! .t did not! A$$ordingly, the presumption of validity and regularity of the servi$e of summons and the de$ision thereafter rendered "y the Dapanese $ourt must stand! Alternatively in the light of the a"sen$e of proof regarding Dapanese law, the presumption of identity or similarity or the so4$alled pro$essual presumption may "e invoked! Applying it, the Dapanese law on the matter is presumed to "e similar with the Philippine law on servi$e of summons on a private foreign $orporation doing "usiness in the Philippines! Se$tion 1F, )ule 1F of the )ules of Court provides that if the defendant is a foreign $orporation doing "usiness in the Philippines, servi$e may "e made: *1- on its resident agent designated in a$$ordan$e with law for that purpose, or, *B- if there is no su$h resident agent, on the government offi$ial designated "y law to that effe$t@ or *C- on any of its offi$ers or agents within the Philippines! 0here the $orporation has no su$h agent, servi$e shall "e made on the government

.SS>=: whether a Dapanese $ourt $an a$#uire 'urisdi$tion over a Philippine $orporation doing "usiness in Dapan "y serving summons through diplomati$ $hannels on the Philippine $orporation at its prin$ipal offi$e in Manila after prior attempts to serve summons in Dapan had failed! %=/:: I=S A foreign 'udgment is presumed to "e valid and "inding in the $ountry from whi$h it $omes, until the $ontrary is shown! .t is also proper to presume the regularity of the

offi$ial designated "y law, to wit: *a- the .nsuran$e Commissioner in the $ase of a foreign insuran$e $ompany@ *"- the Superintendent of &anks, in the $ase of a foreign "anking $orporation@ and *$- the Se$urities and =5$hange Commission, in the $ase of other foreign $orporations duly li$ensed to do "usiness in the Philippines! 9owhere in its pleadings did S%A)P profess to having had a resident agent authorized to re$eive $ourt pro$esses in Dapan!

0hile it may "e true that servi$e $ould have "een made upon any of the offi$ers or agents of S%A)P at its three other "ran$hes in Dapan, the availa"ility of su$h a re$ourse would not pre$lude servi$e upon the proper government offi$ial, as stated a"ove! As found "y the respondent $ourt, two attempts at servi$e were made at S%A)P(s Iokohama "ran$h! &oth were unsu$$essful! The Tokyo :istri$t Court re#uested the Supreme Court of Dapan to $ause the delivery of the summons and other legal do$uments to the Philippines! A$ting on that re#uest, the Supreme Court of Dapan sent the summons together with the other legal do$uments to the Ministry of Foreign Affairs of Dapan whi$h, in turn, forwarded the same to the Dapanese =m"assy in Manila ! Thereafter, the $ourt pro$esses were delivered to the Ministry *now :epartment- of Foreign Affairs of the Philippines, then to the =5e$utive Dudge of the Court of First .nstan$e *now )egional Trial Court- of Manila, who forthwith ordered :eputy Sheriff )olando &alingit to serve the same on S%A)P at its prin$ipal offi$e in Manila! This servi$e is e#uivalent to servi$e on the proper government offi$ial under Se$tion 1F, )ule 1F of the )ules of Court, in relation to Se$tion 1BL of the Corporation Code! %en$e, S%A)P(s $ontention that su$h manner of servi$e is not valid under Philippine laws holds no water! 0e find 9 )T%0=ST(s $laim for attorney(s fees, litigation e5penses, and e5emplary damages to "e without merit! 0e find no eviden$e that would 'ustify an award for attorney(s fees and litigation e5penses under Arti$le BB3L of the Civil Code of the Philippines! 9or is an award for e5emplary damages warranted! 0%=)=F )=, the instant petition is partly ;)A9T=:, and the $hallenged de$ision is AFF.)M=: insofar as it denied 9 )T%0=ST(s $laims for attorneys fees, litigation dismissal of 9 )T%0=ST(s $omplaint in Civil Case 9o! LC41GHCG of &ran$h 7F of the )egional Trial Court of Manila, and another in its stead is here"y rendered ):=).9; private respondent C!F! S%A)P / C MPA9I, .9C! to pay to 9 )T%0=ST the amounts ad'udged in the foreign 'udgment su"'e$t of said $ase, with interest thereon at the legal rate from the filing of the $omplaint therein until the said foreign 'udgment is fully satisfied!

-O1DARD VS. !AI! ;!)! 9o! /4F712C April 7, 12C2 =M./.= =/M.)A )=9==, )AIM 9: A9T 9.9, ;.9=TT= ) S= A:=/A.:= and M 9.T>= <.CT .)=, A// S>)9AM=: & >:A): vs! ST=0A)T =::.= TA.T FACTS: The appellant =milie &oudard, in her $apa$ity as widow of Marie Theodore &oudard and as guardian of her $oappellants, her $hildren "orn during her marriage with the de$eased, o"tained a 'udgment in their favor from the $ivil division of the CF. of %anoi, Fren$h .ndo4China for a sum, plus interest! The 'udgment was rendered against Stewart Tait who had "een de$lared in default for his failure to appear at the trial "efore said $ourt! The 'udgment, was "ased on the fa$t that Marie Theodore &oudard, who was an employee of Stewart =ddie Tait, was killed in %anoi "y other employees of said Tait, although +outside of the fulfillment of a duty,! Trial $ourt *in the Philippines- dismissed the a$tion for enfor$ement of the %anoi de$ision "ased prin$ipally on the la$k of 'urisdi$tion of the Court of %anoi to render the 'udgment in #uestion, for the e5e$ution of whi$h this a$tion was instituted in this 'urisdi$tion! The la$k of 'urisdi$tion was dis$overed in the de$ision itself of the Court of %anoi whi$h states that the appellee was not a resident of, nor had a known domi$ile in, that $ountry! The eviden$e addu$ed at the trial $on$lusively proves that neither the appellee nor his agent or employees were ever in %anoi, Fren$h .ndo4China@ and that the de$eased Marie Theodore &oudard had never, at any time, "een his employee! The appellee(s first intimation of his having "een sued and senten$ed to pay a huge sum "y the $ivil division of the Court of First .nstan$e of %anoi was when he was served with summons in the

e5penses, and e5emplary damages "ut )=<=)S=: insofar as in sustained the trial $ourt(s present $ase! .SS>=: 0 9 the de$ision in %anoi $an "e e5e$uted here! %=/:: 9 The appellants failed to show that the pro$eedings against the appellee in the Court of %anoi were in a$$ordan$e with the laws of Fran$e then in for$e@ and as to the se$ond point, it appears that said do$uments are not of the nature mentioned in se$tions C3F and C37 of A$t 9o! 123! They are not $opies of the 'udi$ial re$ord of the pro$eedings against the appellee in the Court of %anoi, duly $ertified "y the proper authorities there, whose signatures should "e authenti$ated "y the Consul or some $onsular agent of the >nited States in said $ountry!

Moreover, the eviden$e of re$ord shows that the appellee was not in %anoi during the time mentioned in the $omplaint of the appellants, nor were his employees or

)ules of Court!

representatives! The rule in matters of this nature is that 'udi$ial pro$eedings in a foreign Su"se#uently, private respondent filed its Answer with Compulsory Counter $laim(s and therein raised the grounds it "rought up in its motion to dismiss! .n its )eply filed, the $ountry, regarding payment of money, are only effe$tive against a party if summons is duly served on him within su$h foreign $ountry "efore the pro$eedings! .t $an not "e said that the de$ision rendered "y the Court of %anoi should "e $on$lusive to su$h an e5tent that it $annot "e $ontested, for it merely $onstitutes, from the viewpoint of our laws, prima fa$ie eviden$e of the 'ustness of appellants( $laim, and, as su$h, naturally admits proof to the $ontrary! ASIAV S! M RCHAN! -AN2 RS G.R. No. 1102%3, ()l< 20, 2001 'M, - RHAD vs. CA a*6 .n due time, the trial $ourt rendered its de$ision dismissing petitioner(s $omplaint! Petitioner interposed an appeal with the Court of Appeals, "ut the appellate $ourt "NCC dismissed the same and affirmed the de$ision of the trial $ourt! .ssue: 0hether or not the CA erred in denying re$ognition and enfor$ement to the Malaysian Court 'udgment! )uling: Ies! ;enerally, in the a"sen$e of a spe$ial $ompa$t, no sovereign is "ound to give effe$t within its dominion to a 'udgment rendered "y a tri"unal of another $ountry@ however, the rules of $omity, utility and $onvenien$e of nations have esta"lished a usage among $ivilized states "y whi$h final 'udgments of foreign $ourts of $ompetent 'urisdi$tion are re$ipro$ally respe$ted and rendered effi$a$ious under $ertain $onditions that may vary in different $ountries! .n this 'urisdi$tion, a valid 'udgment rendered "y a foreign tri"unal may "e re$ognized insofar as the immediate parties and the underlying $ause of a$tion are $on$erned so long as it is $onvin$ingly shown that there has "een an opportunity for a full and fair hearing "efore a $ourt of $ompetent 'urisdi$tion@ that the trial upon regular pro$eedings has "een $ondu$ted, following due $itation or voluntary appearan$e of the defendant and under a system of 'urispruden$e likely to se$ure an impartial administration of 'usti$e@ and that there is nothing to indi$ate either a pre'udi$e in $ourt and in the system of laws under whi$h it is sitting or fraud in pro$uring the 'udgment! A foreign 'udgment is presumed to "e valid and "inding in the $ountry from whi$h it $omes, until a $ontrary showing, on the "asis of a presumption of regularity of pro$eedings and the giving of due noti$e in the foreign forum >nder Se$tion 73*"-, )ule C2 of the )evised )ules of Court, whi$h was the governing law at the time the instant petitioner $ontended that the %igh Court of Malaya a$#uired 'urisdi$tion over the person of private respondent "y its voluntary su"mission the $ourt(s 'urisdi$tion through its appointed $ounsel! Furthermore, private respondent(s $ounsel waived any and all o"'e$tions to the %igh Court(s 'urisdi$tion in a pleading filed "efore the $ourt!

Fa$ts: Petitioner Asiavest Mer$hant &ankers *M- &erhad is a $orporation organized under the laws of Malaysia while private respondent Philippine 9ational Constru$tion Corporation is a $orporation duly in$orporated and e5isting under Philippine laws! Petitioner initiated a suit for $olle$tion against private respondent, then known as Constru$tion and :evelopment Corporation of the Philippines, "efore the %igh Court of Malaya in 6uala /umpur entitled +Asiavest Mer$hant &ankers *M- &erhad v! Asiavest C:CP Sdn! &hd! and Constru$tion and :evelopment Corporation of the Philippines!, Petitioner sought to re$over the indemnity of the performan$e "ond it had put up in favor of private respondent to guarantee the $ompletion of the Felda Pro'e$t and the nonpayment of the loan it e5tended to Asiavest4C:CP Sdn! &hd! for the $ompletion of Paloh %anai and 6uantan &y Pass@ Pro'e$t! The %igh Court of Malaya *Commer$ial :ivision- rendered 'udgment in favor of the petitioner and against the private respondent! Following unsu$$essful attempts to se$ure payment from private respondent under the 'udgment, petitioner initiated the $omplaint "efore )TC of Pasig, Metro Manila, to enfor$e the 'udgment of the %igh Court of Malaya! Private respondent sought the dismissal of the $ase via a Motion to :ismiss, $ontending that the alleged 'udgment of the %igh Court of Malaya should "e denied re$ognition or enfor$ement sin$e on in fa$e, it is tainted with want of 'urisdi$tion, want of noti$e to private respondent, $ollusion andKor fraud, and there is a $lear mistake of law or fa$t! :ismissal was, however, denied "y the trial $ourt $onsidering that the grounds relied upon are not the proper grounds in a motion to dismiss under )ule 1H of the )evised

$ase was de$ided "y the trial $ourt and respondent appellate $ourt, a 'udgment, against a person, of a tri"unal of a foreign $ountry having 'urisdi$tion to pronoun$e the same is presumptive eviden$e of a right as "etween the parties and their su$$essors in interest "y a su"se#uent title! The 'udgment may, however, "e assailed "y eviden$e of want of 'urisdi$tion, want of noti$e to the party, $ollusion, fraud, or $lear mistake of law or fa$t! .n addition, under Se$tion C*n-, )ule 1C1 of the )evised )ules of Court, a $ourt, whether in the Philippines or elsewhere, en'oys the presumption that it was a$ting in the lawful e5er$ise of its 'urisdi$tion! %en$e, on$e the authenti$ity of the foreign 'udgment is proved, the party atta$king a foreign 'udgment, is tasked with the "urden of over$oming its presumptive validity! .n the instant $ase, petitioner suffi$iently esta"lished the e5isten$e of the money 'udgment of the %igh Court of Malaya "y the eviden$e it offered! Petitioner(s sole witness, testified to the effe$t that he is in a$tive pra$ti$e of the law profession in Malaysia@ that he was $onne$ted with Skrine and Company as /egal Assistant up to 12L1@ that private respondent, then known as Constru$tion and :evelopment Corporation of the Philippines, was sued "y his $lient, Asiavest Mer$hant &ankers *M&erhad, in 6uala /umpur@ that the writ of summons were served on Mar$h 1G, 12LC at the registered offi$e of private respondent and on Mar$h B1, 12LC on Cora S! :eala, a finan$ial planning offi$er of private respondent for Southeast Asia operations@ that upon the filing of the $ase, Messrs! Allen and ;ledhill, Advo$ates and Soli$itors, with address at BFth Floor, >M&C &uilding, Dalan Sulaiman, 6uala /umpur, entered their $onditional appearan$e for private respondent #uestioning the regularity of the servi$e of the writ of summons "ut su"se#uently withdrew the same when it realized that the writ was properly served@ that "e$ause private respondent failed to file a statement of defense within two *B- weeks, petitioner filed an appli$ation for summary 'udgment and su"mitted affidavits and do$umentary eviden$e in support of its $laim@ that the matter was then heard "efore the %igh Court of 6uala /umpur in a series of dates where private respondent was represented "y $ounsel@ and that the end result of all these pro$eedings is the 'udgment sought to "e enfor$ed! .n addition to the said testimonial eviden$e, petitioner also offered the do$umentary eviden$e to support their $laim! %aving thus proven, through the foregoing eviden$e, the e5isten$e and authenti$ity of the foreign 'udgment, said foreign 'udgment en'oys presumptive validity and the "urden

then fell upon the party who disputes its validity, herein private respondent, to prove otherwise! %owever, private respondent failed to suffi$iently dis$harge the "urden that fell upon it W to prove "y $lear and $onvin$ing eviden$e the grounds whi$h it relied upon to prevent enfor$ement of the Malaysian %igh Court 'udgment!

"HILS C INV S!M N! G.R. ()*e 1+, 1++7

et No.

al

vs.CA

et

al 103B+3

FACTS: Private respondent :u$at o"tained separate loans from petitioners Ayala .nternational Finan$e /imited *AIA/A- and Philse$ .nvestment Corp *P%./S=C-, se$ured "y shares of sto$k owned "y :u$at! .n order to fa$ilitate the payment of the loans, private respondent 1FLL, .n$!, through its president, private respondent :ai$, assumed :u$at(s o"ligation under an Agreement, where"y 1FLL, .n$! e5e$uted a 0arranty :eed with <endor(s /ien "y whi$h it sold to petitioner Athona %oldings, 9!<! *AT% 9A- a par$el of land in Te5as, >!S!A!, while P%./S=C and AIA/A e5tended a loan to AT% 9A as initial payment of the pur$hase pri$e! The "alan$e was to "e paid "y means of a promissory note e5e$uted "y AT% 9A in favor of 1FLL, .n$! Su"se#uently, upon their re$eipt of the money from 1FLL, .n$!, P%./S=C and AIA/A released :u$at from his inde"tedness and delivered to 1FLL, .n$! all the shares of sto$k in their possession "elonging to :u$at! As AT% 9A failed to pay the interest on the "alan$e, the entire amount $overed "y the note "e$ame due and demanda"le! A$$ordingly, private respondent 1FLL, .n$! sued petitioners P%./S=C, AIA/A, and AT% 9A in the >nited States for payment of the "alan$e and for damages for "rea$h of $ontra$t and for fraud allegedly perpetrated "y petitioners in misrepresenting the marketa"ility of the shares of sto$k delivered to 1FLL, .n$! under the Agreement! 0hile the Civil Case was pending in the >nited States, petitioners filed a $omplaint +For Sum of Money with :amages and 0rit of Preliminary Atta$hment, against private respondents in the )TC Makati! The $omplaint reiterated the allegation of petitioners in their respe$tive $ounter$laims in the Civil A$tion in the >nited States :istri$t Court of Southern Te5as that private respondents $ommitted fraud "y selling the property at a pri$e F33 per$ent more than its true value! :u$at moved to dismiss the Civil Case in the )TC4Makati on the grounds of *1- litis

pendentia, vis4a4vis the Civil A$tion in the >!S!, *B- forum non $onveniens, and *Cfailure of petitioners P%./S=C and &P.4.F/ to state a $ause of a$tion! The trial $ourt granted :u$at(s MT:, stating that +the evidentiary re#uirements of the $ontroversy may "e more suita"ly tried "efore the forum of the litis pendentia in the >!S!, under the prin$iple in private international law of forum non $onveniens,, even as it noted that :u$at was not a party in the >!S! $ase!

$on$lusive of the rights of private respondents! The pro$eedings in the trial $ourt were summary! 9either the trial $ourt nor the appellate $ourt was even furnished $opies of the pleadings in the >!S! $ourt or apprised of the eviden$e presented thereat, to assure a proper determination of whether the issues then "eing litigated in the >!S! $ourt were e5a$tly the issues raised in this $ase su$h that the 'udgment that might "e rendered would $onstitute res 'udi$ata! Se$ond! 9or is the trial $ourt(s refusal to take $ognizan$e of the $ase 'ustifia"le under the

Petitioners appealed to the CA, arguing that the trial $ourt erred in applying the prin$iple of litis pendentia and forum non $onveniens!

prin$iple of forum non $onveniens: First, a MT: is limited to the grounds under )ule 1H, se$!1, whi$h does not in$lude forum

The CA affirmed the dismissal of Civil Case against :u$at, 1FLL, .n$!, and :ai$ on the ground of litis pendentia! .SS>=: is the Civil Case in the )TC4Makati "arred "y the 'udgment of the >!S! $ourt? %=/:: CA reversed! Case remanded to )TC4Makati 9 0hile this Court has given the effe$t of res 'udi$ata to foreign 'udgments in several $ases, it was after the parties opposed to the 'udgment had "een given ample opportunity to repel them on grounds allowed under the law! This is "e$ause in this 'urisdi$tion, with respe$t to a$tions in personam, as distinguished from a$tions in rem, a foreign 'udgment merely $onstitutes prima fa$ie eviden$e of the 'ustness of the $laim of a party and, as su$h, is su"'e$t to proof to the $ontrary! )ule C2, X73 provides: Se$! 73! =ffe$t of foreign 'udgments! A The effe$t of a 'udgment of a tri"unal of a foreign $ountry, having 'urisdi$tion to pronoun$e the 'udgment is as follows: *a- .n $ase of a 'udgment upon a spe$ifi$ thing, the 'udgment is $on$lusive upon the title to the thing@ *"- .n $ase of a 'udgment against a person, the 'udgment is presumptive eviden$e of a right as "etween the parties and their su$$essors in interest "y a su"se#uent title@ "ut the 'udgment may "e repelled "y eviden$e of a want of 'urisdi$tion, want of noti$e to the party, $ollusion, fraud, or $lear mistake of law or fa$t! .n the $ase at "ar, it $annot "e said that petitioners were given the opportunity to $hallenge the 'udgment of the >!S! $ourt as "asis for de$laring it res 'udi$ata or

non $onveniens! The propriety of dismissing a $ase "ased on this prin$iple re#uires a fa$tual determination, hen$e, it is more properly $onsidered a matter of defense! Se$ond, while it is within the dis$retion of the trial $ourt to a"stain from assuming 'urisdi$tion on this ground, it should do so only after +vital fa$ts are esta"lished, to determine whether spe$ial $ir$umstan$es, re#uire the $ourt(s desistan$e!