G.R. No.

122191 October 8, 1998

SAUDI
ARABIAN
AIRLINES, petitioner,
vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ,
in his capacity as Presiding Judge of Branch 89, Regional Trial Court of
Quezon City, respondents.
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul
and set aside the Resolution 1dated September 27, 1995 and the Decision 2 dated
April 10, 1996 of the Court of Appeals 3 in CA-G.R. SP No. 36533, 4and the
Orders 5 dated August 29, 1994 6 and February 2, 1995 7 that were issued by the trial
court in Civil Case No. Q-93-18394. 8
The pertinent antecedent facts which gave rise to the instant petition, as stated in
the questioned Decision 9, are as follows:

On January 14, 1992, just when plaintiff thought that the Jakarta incident was
already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal
Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the
police station where the police took her passport and questioned her about the
Jakarta incident. Miniewy simply stood by as the police put pressure on her to make
a statement dropping the case against Thamer and Allah. Not until she agreed to do
so did the police return her passport and allowed her to catch the afternoon flight
out of Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes
before the departure of her flight to Manila, plaintiff was not allowed to board the
plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the
Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office
brought her to a Saudi court where she was asked to sign a document written in
Arabic. They told her that this was necessary to close the case against Thamer and
Allah. As it turned out, plaintiff signed a notice to her to appear before the court on
June 27, 1993. Plaintiff then returned to Manila.

On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its
airlines based in Jeddah, Saudi Arabia. . . .

Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once

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

On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco
dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both
Saudi nationals. Because it was almost morning when they returned to their hotels,
they agreed to have breakfast together at the room of Thamer. When they were in te
(sic) room, Allah left on some pretext. Shortly after he did, Thamer attempted to
rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries
for help and rescued her. Later, the Indonesian police came and arrested Thamer
and Allah Al-Gazzawi, the latter as an accomplice.

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

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

On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court
where the judge, to her astonishment and shock, rendered a decision, translated to
her in English, sentencing her to five months imprisonment and to 286 lashes. Only
then did she realize that the Saudi court had tried her, together with Thamer and
Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery;
(2) going to a disco, dancing and listening to the music in violation of Islamic laws;
and (3) socializing with the male crew, in contravention of Islamic tradition. 10

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

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

Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila, 12 she was terminated from the service by SAUDIA, without her being
informed of the cause.
On November 23, 1993, Morada filed a Complaint 13 for damages against SAUDIA,
and Khaled Al-Balawi ("Al-Balawi"), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the
following grounds, to wit: (1) that the Complaint states no cause of action against
Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim
or demand set forth in the Complaint has been waived, abandoned or otherwise
extinguished; and (4) that the trial court has no jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss)
filed a reply 16 thereto on March 3, 1994.

15

. Saudia

On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi was
dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and
Motion to Dismiss Amended Complaint 18.
The trial court issued an Order 19 dated August 29, 1994 denying the Motion to
Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA filed
on September 20, 1994, its Motion for Reconsideration 21 of the Order dated August
29, 1994. It alleged that the trial court has no jurisdiction to hear and try the case on
the basis of Article 21 of the Civil Code, since the proper law applicable is the law of
the Kingdom of Saudi Arabia. On October 14, 1994, Morada filed her
Opposition 22 (To Defendant's Motion for Reconsideration).
In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that
since its Motion for Reconsideration raised lack of jurisdiction as its cause of action,
the Omnibus Motion Rule does not apply, even if that ground is raised for the first
time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any
substantial interest in the prosecution of the instant case, and hence, without
jurisdiction to adjudicate the same.
Respondent Judge subsequently issued another Order 24 dated February 2, 1995,
denying SAUDIA's Motion for Reconsideration. The pertinent portion of the assailed
Order reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed,
thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff
filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant

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

25

Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or
Temporary Restraining Order 26 with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with Temporary Restraining
Order 27 dated February 23, 1995, prohibiting the respondent Judge from further
conducting any proceeding, unless otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27, 1995, now assailed, the
appellate court denied SAUDIA's Petition for the Issuance of a Writ of Preliminary
Injunction dated February 18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED,
after considering the Answer, with Prayer to Deny Writ of Preliminary Injunction
(Rollo, p. 135) the Reply and Rejoinder, it appearing that herein petitioner is not
clearly entitled thereto (Unciano Paramedical College, et. Al., v. Court of Appeals,
et. Al., 100335, April 7, 1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the instant
Petition 29 for Review with Prayer for Temporary Restraining Order dated October 13,
1995.
However, during the pendency of the instant Petition, respondent Court of Appeals
rendered the Decision 30 dated April 10, 1996, now also assailed. It ruled that the
Philippines is an appropriate forum considering that the Amended Complaint's basis
for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court. It further held that certiorari is not the proper
remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have
proceeded to trial, and in case of an adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for
Temporary Restraining Order31 dated April 30, 1996, given due course by this Court.

After both parties submitted their Memoranda,

submitted for decision.

32

the instant case is now deemed

Petitioner SAUDIA raised the following issues:

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

element qualifies the instant case for the application of the law of the Kingdom of
Saudi Arabia, by virtue of the lex loci delicti commissi rule. 34
On the other hand, private respondent contends that since her Amended Complaint
is based on Articles 19 35 and 21 36 of the Civil Code, then the instant case is
properly a matter of domestic law. 37
Under the factual antecedents obtaining in this case, there is no dispute that the
interplay of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint

II Leave of court before filing a supplemental pleading is not a jurisdictional

requirement. Besides, the matter as to absence of leave of court is now moot and
academic when this Honorable Court required the respondents to comment on
petitioner's April 30, 1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order Within Ten (10) Days From Notice Thereof. Further, the
Revised Rules of Court should be construed with liberality pursuant to Section 2,
Rule 1 thereof.
III Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO.
36533 entitled "Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its
April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary
Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary
period as provided for under Section 1, Rule 45 of the Revised Rules of Court.
Therefore, the decision in CA-G.R. SP NO. 36533 has not yet become final and
executory and this Honorable Court can take cognizance of this case. 33
From the foregoing factual and procedural antecedents, the following issues emerge
for our resolution:

38

dated June 23, 1994:

2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation

doing business in the Philippines. It may be served with summons and other court
processes at Travel Wide Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building,
114 Valero St., Salcedo Village, Makati, Metro Manila.
6. Plaintiff learned that, through the intercession of the Saudi Arabian government,
the Indonesian authorities agreed to deport Thamer and Allah after two weeks of
detention. Eventually, they were again put in service by defendant SAUDIA. In
September 1990, defendant SAUDIA transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was
already behind her, her superiors reauested her to see MR. Ali Meniewy, Chief Legal
Officer of SAUDIA in Jeddah, Saudi Arabia. When she saw him, he brought her to the
police station where the police took her passport and questioned her about the
Jakarta incident. Miniewy simply stood by as the police put pressure on her to make
a statement dropping the case against Thamer and Allah. Not until she agreed to do
so did the police return her passport and allowed her to catch the afternoon flight
out of Jeddah.

I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL
TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO.
Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES".
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE
PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at
the outset. It maintains that private respondent's claim for alleged abuse of rights
occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign

8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few
minutes before the departure of her flight to Manila, plaintiff was not allowed to
board the plane and instead ordered to take a later flight to Jeddah to see Mr.
Meniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the
SAUDIA office brought her to a Saudi court where she was asked to sigh a document
written in Arabic. They told her that this was necessary to close the case against
Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before
the court on June 27, 1993. Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah
once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did
so after receiving assurance from SAUDIA's Manila manger, Aslam Saleemi, that the
investigation was routinary and that it posed no danger to her.

10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on
June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge
interrogated plaintiff through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however, just as her plane was
about to take off, a SAUDIA officer told her that the airline had forbidden her to take
that flight. At the Inflight Service Office where she was told to go, the secretary of
Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the
crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court
where the judge, to her astonishment and shock, rendered a decision, translated to
her in English, sentencing her to five months imprisonment and to 286 lashes. Only
then did she realize that the Saudi court had tried her, together with Thamer and
Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery;
(2) going to a disco, dancing, and listening to the music in violation of Islamic laws;
(3) socializing with the male crew, in contravention of Islamic tradition.

We thus find private respondent's assertion that the case is purely domestic,
imprecise. A conflicts problem presents itself here, and the question of
jurisdiction 43 confronts the court a quo.
After a careful study of the private respondent's Amended Complaint, 44 and the
Comment thereon, we note that she aptly predicated her cause of action on Articles
19 and 21 of the New Civil Code.
On one hand, Article 19 of the New Civil Code provides:
Art. 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice give everyone his due and observe honesty and good
faith.
On the other hand, Article 21 of the New Civil Code provides:

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

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

Where the factual antecedents satisfactorily establish the existence of a foreign

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

The aforecited provisions on human relations were intended to expand the concept
of torts in this jurisdiction by granting adequate legal remedy for the untold number
of moral wrongs which is impossible for human foresight to specifically provide in
the statutes.

A factual situation that cuts across territorial lines and is affected by the diverse
laws of two or more states is said to contain a "foreign element". The presence of a
foreign element is inevitable since social and economic affairs of individuals and
associations are rarely confined to the geographic limits of their birth or
conception. 40
The forms in which this foreign element may appear are many. 41 The foreign
element may simply consist in the fact that one of the parties to a contract is an
alien or has a foreign domicile, or that a contract between nationals of one State
involves properties situated in another State. In other cases, the foreign element
may assume a complex form. 42
In the instant case, the foreign element consisted in the fact that private respondent
Morada is a resident Philippine national, and that petitioner SAUDIA is a resident
foreign corporation. Also, by virtue of the employment of Morada with the petitioner
Saudia as a flight stewardess, events did transpire during her many occasions of
travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi
Arabia, and vice versa, that caused a "conflicts" situation to arise.

Thus, in Philippine National Bank (PNB) vs. Court of Appeals,

45

this Court held that:

Although Article 19 merely declares a principle of law, Article 21 gives flesh to its
provisions. Thus, we agree with private respondent's assertion that violations of
Articles 19 and 21 are actionable, with judicially enforceable remedies in the
municipal forum.
Based on the allegations 46 in the Amended Complaint, read in the light of the Rules
of Court on jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City
possesses jurisdiction over the subject matter of the suit. 48 Its authority to try and
hear the case is provided for under Section 1 of Republic Act No. 7691, to wit:
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary
Reorganization Act of 1980", is hereby amended to read as follows:
Sec. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive
jurisdiction:
xxx xxx xxx

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

the motions filed, is that SAUDIA prayed for other reliefs under the premises.
Undeniably, petitioner SAUDIA has effectively submitted to the trial court's
jurisdiction by praying for the dismissal of the Amended Complaint on grounds other
than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.:

51

xxx xxx xxx

And following Section 2 (b), Rule 4 of the Revised Rules of Court the venue,
Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
(a) xxx xxx xxx
(b) Personal actions. All other actions may be commenced and tried where the
defendant or any of the defendants resides or may be found, or where the plaintiff
or any of the plaintiff resides, at the election of the plaintiff.
Pragmatic considerations, including the convenience of the parties, also weigh
heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the
private interest of the litigant. Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are equally important.
Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or "oppress"
the defendant, e.g. by inflicting upon him needless expense or disturbance. But
unless the balance is strongly in favor of the defendant, the plaintiffs choice of
forum should rarely be disturbed. 49
Weighing the relative claims of the parties, the court a quo found it best to hear the
case in the Philippines. Had it refused to take cognizance of the case, it would be
forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in
the Kingdom of Saudi Arabia where she no longer maintains substantial connections.
That would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of the
plaintiff (now private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the parties
herein. By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several motions 50 praying for the
dismissal of Morada's Amended Complaint. SAUDIA also filed an Answer In Ex
Abundante Cautelam dated February 20, 1995. What is very patent and explicit from

We observe that the motion to dismiss filed on April 14, 1962, aside from disputing
the lower court's jurisdiction over defendant's person, prayed for dismissal of the
complaint on the ground that plaintiff's cause of action has prescribed. By
interposing such second ground in its motion to dismiss, Ker and Co., Ltd. availed of
an affirmative defense on the basis of which it prayed the court to resolve
controversy in its favor. For the court to validly decide the said plea of defendant Ker
& Co., Ltd., it necessarily had to acquire jurisdiction upon the latter's person, who,
being the proponent of the affirmative defense, should be deemed to have
abandoned its special appearance and voluntarily submitted itself to the jurisdiction
of the court.
Similarly, the case of De Midgely vs. Ferandos, held that;
When the appearance is by motion for the purpose of objecting to the jurisdiction of
the court over the person, it must be for the sole and separate purpose of objecting
to the jurisdiction of the court. If his motion is for any other purpose than to object to
the jurisdiction of the court over his person, he thereby submits himself to the
jurisdiction of the court. A special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will be held to be a general
appearance, if the party in said motion should, for example, ask for a dismissal of
the action upon the further ground that the court had no jurisdiction over the subject
matter. 52
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of
Quezon City. Thus, we find that the trial court has jurisdiction over the case and that
its exercise thereof, justified.
As to the choice of applicable law, we note that choice-of-law problems seek to
answer two important questions: (1) What legal system should control a given
situation where some of the significant facts occurred in two or more states; and (2)
to what extent should the chosen legal system regulate the situation. 53
Several theories have been propounded in order to identify the legal system that
should ultimately control. Although ideally, all choice-of-law theories should
intrinsically advance both notions of justice and predictability, they do not always do
so. The forum is then faced with the problem of deciding which of these two
important values should be stressed. 54

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

category a certain set of facts or rules fall. This process is known as
"characterization", or the "doctrine of qualification". It is the "process of deciding
whether or not the facts relate to the kind of question specified in a conflicts
rule." 55 The purpose of "characterization" is to enable the forum to select the proper
law. 56
Our starting point of analysis here is not a legal relation, but a factual situation,
event, or operative fact. 57 An essential element of conflict rules is the indication of a
"test" or "connecting factor" or "point of contact". Choice-of-law rules invariably
consist of a factual relationship (such as property right, contract claim) and a
connecting factor or point of contact, such as the situs of the res, the place of
celebration, the place of performance, or the place of wrongdoing. 58
Note that one or more circumstances may be present to serve as the possible test
for the determination of the applicable law. 59 These "test factors" or "points of
contact" or "connecting factors" could be any of the following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or
his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be
situated. In particular, the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the place where
a contract has been made, a marriage celebrated, a will signed or a tort committed.
The lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of
performance of contractual duties, or the place where a power of attorney is to be
exercised;
(6) the intention of the contracting parties as to the law that should govern their
agreement, 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 one of the exceptions to the applications of foreign law;
and

(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of affreightment. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including allegations in the
Amended Complaint deemed admitted for purposes of the motion to dismiss, we are
convinced that there is reasonable basis for private respondent's assertion that
although she was already working in Manila, petitioner brought her to Jeddah on the
pretense that she would merely testify in an investigation of the charges she made
against the two SAUDIA crew members for the attack on her person while they were
in Jakarta. As it turned out, she was the one made to face trial for very serious
charges, including adultery and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the "handing over" or
"turning over" of the person of private respondent to Jeddah officials, petitioner may
have acted beyond its duties as employer. Petitioner's purported act contributed to
and amplified or even proximately caused additional humiliation, misery and
suffering of private respondent. Petitioner thereby allegedly facilitated the arrest,
detention and prosecution of private respondent under the guise of petitioner's
authority as employer, taking advantage of the trust, confidence and faith she
reposed upon it. As purportedly found by the Prince of Makkah, the alleged
conviction and imprisonment of private respondent was wrongful. But these capped
the injury or harm allegedly inflicted upon her person and reputation, for which
petitioner could be liable as claimed, to provide compensation or redress for the
wrongs done, once duly proven.
Considering that the complaint in the court a quo is one involving torts, the
"connecting factor" or "point of contact" could be the place or places where the
tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort (the
place where the alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had honestly believed that
petitioner would, in the exercise of its rights and in the performance of its duties,
"act with justice, give her due and observe honesty and good faith." Instead,
petitioner failed to protect her, she claimed. That certain acts or parts of the injury
allegedly occurred in another country is of no moment. For in our view what is
important here is the place where the over-all harm or the totality of the alleged
injury to the person, reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private respondent). All told, it is
not without basis to identify the Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti
commissi, modern theories and rules on tort liability 61 have been advanced to offer
fresh judicial approaches to arrive at just results. In keeping abreast with the modern
theories on tort liability, we find here an occasion to apply the "State of the most

significant relationship" rule, which in our view should be appropriate to apply now,
given the factual context of this case.
In applying said principle to determine the State which has the most significant
relationship, the following contacts are to be taken into account and evaluated
according to their relative importance with respect to the particular issue: (a) the
place where the injury occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicile, residence, nationality, place of incorporation and place of
business of the parties, and (d) the place where the relationship, if any, between the
parties is centered. 62
As already discussed, there is basis for the claim that over-all injury occurred and
lodged in the Philippines. There is likewise no question that private respondent is a
resident Filipina national, working with petitioner, a resident foreign corporation
engaged here in the business of international air carriage. Thus, the "relationship"
between the parties was centered here, although it should be stressed that this suit
is not based on mere labor law violations. From the record, the claim that the
Philippines has the most significant contact with the matter in this dispute, 63 raised
by private respondent as plaintiff below against defendant (herein petitioner), in our
view, has been properly established.

case in the light of relevant Philippine law, with due consideration of the foreign
element or elements involved. Nothing said herein, of course, should be construed
as prejudging the results of the case in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No.
Q-93-18394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is hereby
REMANDED to Regional Trial Court of Quezon City, Branch 89 for further
proceedings.
SO ORDERED.

[G.R. No. 124371. November 23, 2000]

PAULA T. LLORENTE, petitioner, vs. COURT OF APPEALS and ALICIA F. LLORENTE,
respondents.
DECISION
PARDO, J.:
The Case

Prescinding from this premise that the Philippines is the situs of the tort complained
of and the place "having the most interest in the problem", we find, by way of
recapitulation, that the Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues arising out of this case.
Further, we hold that the respondent Regional Trial Court has jurisdiction over the
parties and the subject matter of the complaint; the appropriate venue is in Quezon
City, which could properly apply Philippine law. Moreover, we find untenable
petitioner's insistence that "[s]ince private respondent instituted this suit, she has
the burden of pleading and proving the applicable Saudi law on the matter." 64 As
aptly said by private respondent, she has "no obligation to plead and prove the law
of the Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and
21" of the Civil Code of the Philippines. In her Amended Complaint and subsequent
pleadings, she never alleged that Saudi law should govern this case. 65 And as
correctly held by the respondent appellate court, "considering that it was the
petitioner who was invoking the applicability of the law of Saudi Arabia, then the
burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia
is". 66
Lastly, no error could be imputed to the respondent appellate court in upholding the
trial court's denial of defendant's (herein petitioner's) motion to dismiss the case.
Not only was jurisdiction in order and venue properly laid, but appeal after trial was
obviously available, and expeditious trial itself indicated by the nature of the case at
hand. Indubitably, the Philippines is the state intimately concerned with the ultimate
outcome of the case below, not just for the benefit of all the litigants, but also for
the vindication of the country's system of law and justice in a transnational setting.
With these guidelines in mind, the trial court must proceed to try and adjudge the

The case raises a conflict of laws issue.

What is before us is an appeal from the decision of the Court of Appeals[1]
modifying that of the Regional Trial Court, Camarines Sur, Branch 35, Iriga City[2]
declaring respondent Alicia F. Llorente (herinafter referred to as Alicia), as coowners of whatever property she and the deceased Lorenzo N. Llorente (hereinafter
referred to as Lorenzo) may have acquired during the twenty-five (25) years that
they lived together as husband and wife.
The Facts
The deceased Lorenzo N. Llorente was an enlisted serviceman of the United States
Navy from March 10, 1927 to September 30, 1957.[3]
On February 22, 1937, Lorenzo and petitioner Paula Llorente (hereinafter referred to
as Paula) were married before a parish priest, Roman Catholic Church, in Nabua,
Camarines Sur.[4]
Before the outbreak of the Pacific War, Lorenzo departed for the United States and
Paula stayed in the conjugal home in barrio Antipolo, Nabua, Camarines Sur.[5]
On November 30, 1943, Lorenzo was admitted to United States citizenship and
Certificate of Naturalization No. 5579816 was issued in his favor by the United
States District Court, Southern District of New York.[6]

Upon the liberation of the Philippines by the American Forces in 1945, Lorenzo was
granted an accrued leave by the U. S. Navy, to visit his wife and he visited the
Philippines.[7] He discovered that his wife Paula was pregnant and was living in
and having an adulterous relationship with his brother, Ceferino Llorente.[8]
On December 4, 1945, Paula gave birth to a boy registered in the Office of the
Registrar of Nabua as Crisologo Llorente, with the certificate stating that the child
was not legitimate and the line for the fathers name was left blank.[9]
Lorenzo refused to forgive Paula and live with her. In fact, on February 2, 1946, the
couple drew a written agreement to the effect that (1) all the family allowances
allotted by the United States Navy as part of Lorenzos salary and all other
obligations for Paulas daily maintenance and support would be suspended; (2) they
would dissolve their marital union in accordance with judicial proceedings; (3) they
would make a separate agreement regarding their conjugal property acquired during
their marital life; and (4) Lorenzo would not prosecute Paula for her adulterous act
since she voluntarily admitted her fault and agreed to separate from Lorenzo
peacefully. The agreement was signed by both Lorenzo and Paula and was
witnessed by Paulas father and stepmother. The agreement was notarized by
Notary Public Pedro Osabel.[10]
Lorenzo returned to the United States and on November 16, 1951 filed for divorce
with the Superior Court of the State of California in and for the County of San
Diego. Paula was represented by counsel, John Riley, and actively participated in
the proceedings. On November 27, 1951, the Superior Court of the State of
California, for the County of San Diego found all factual allegations to be true and
issued an interlocutory judgment of divorce.[11]

ALL the personal properties and other movables or belongings that may be found or
existing therein;
(2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my children,
Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, all my real
properties whatsoever and wheresoever located, specifically my real properties
located at Barangay Aro-Aldao, Nabua, Camarines Sur; Barangay Paloyon, Nabua,
Camarines Sur; Barangay Baras, Sitio Puga, Nabua, Camarines Sur; and Barangay
Paloyon, Sitio Nalilidong, Nabua, Camarines Sur;
(3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and unto
my children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares,
my real properties located in Quezon City Philippines, and covered by Transfer
Certificate of Title No. 188652; and my lands in Antipolo, Rizal, Philippines, covered
by Transfer Certificate of Title Nos. 124196 and 165188, both of the Registry of
Deeds of the province of Rizal, Philippines;
(4) That their respective shares in the above-mentioned properties, whether real or
personal properties, shall not be disposed of, ceded, sold and conveyed to any other
persons, but could only be sold, ceded, conveyed and disposed of by and among
themselves;
(5) I designate my wife ALICIA R. FORTUNO to be the sole executor of this my Last
Will and Testament, and in her default or incapacity of the latter to act, any of my
children in the order of age, if of age;
(6) I hereby direct that the executor named herein or her lawful substitute should
served (sic) without bond;

On December 4, 1952, the divorce decree became final.[12]

In the meantime, Lorenzo returned to the Philippines.
On January 16, 1958, Lorenzo married Alicia F. Llorente in Manila.[13] Apparently,
Alicia had no knowledge of the first marriage even if they resided in the same town
as Paula, who did not oppose the marriage or cohabitation.[14]
From 1958 to 1985, Lorenzo and Alicia lived together as husband and wife.[15] Their
twenty-five (25) year union produced three children, Raul, Luz and Beverly, all
surnamed Llorente.[16]
On March 13, 1981, Lorenzo executed a Last Will and Testament. The will was
notarized by Notary Public Salvador M. Occiano, duly signed by Lorenzo with
attesting witnesses Francisco Hugo, Francisco Neibres and Tito Trajano. In the will,
Lorenzo bequeathed all his property to Alicia and their three children, to wit:
(1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my residential
house and lot, located at San Francisco, Nabua, Camarines Sur, Philippines, including

(7) I hereby revoke any and all my other wills, codicils, or testamentary dispositions
heretofore executed, signed, or published, by me;
(8) It is my final wish and desire that if I die, no relatives of mine in any degree in
the Llorentes Side should ever bother and disturb in any manner whatsoever my
wife Alicia R. Fortunato and my children with respect to any real or personal
properties I gave and bequeathed respectively to each one of them by virtue of this
Last Will and Testament.[17]
On December 14, 1983, Lorenzo filed with the Regional Trial Court, Iriga, Camarines
Sur, a petition for the probate and allowance of his last will and testament wherein
Lorenzo moved that Alicia be appointed Special Administratrix of his estate.[18]
On January 18, 1984, the trial court denied the motion for the reason that the
testator Lorenzo was still alive.[19]
On January 24, 1984, finding that the will was duly executed, the trial court admitted
the will to probate.[20]

On June 11, 1985, before the proceedings could be terminated, Lorenzo died.[21]
On September 4, 1985, Paula filed with the same court a petition[22] for letters of
administration over Lorenzos estate in her favor. Paula contended (1) that she was
Lorenzos surviving spouse, (2) that the various property were acquired during their
marriage, (3) that Lorenzos will disposed of all his property in favor of Alicia and her
children, encroaching on her legitime and 1/2 share in the conjugal property.[23]
On December 13, 1985, Alicia filed in the testate proceeding (Sp. Proc. No. IR-755), a
petition for the issuance of letters testamentary.[24]
On October 14, 1985, without terminating the testate proceedings, the trial court
gave due course to Paulas petition in Sp. Proc. No. IR-888.[25]
On November 6, 13 and 20, 1985, the order was published in the newspaper Bicol
Star.[26]
On May 18, 1987, the Regional Trial Court issued a joint decision, thus:
Wherefore, considering that this court has so found that the divorce decree granted
to the late Lorenzo Llorente is void and inapplicable in the Philippines, therefore the
marriage he contracted with Alicia Fortunato on January 16, 1958 at Manila is
likewise void. This being so the petition of Alicia F. Llorente for the issuance of
letters testamentary is denied. Likewise, she is not entitled to receive any share
from the estate even if the will especially said so her relationship with Lorenzo
having gained the status of paramour which is under Art. 739 (1).
On the other hand, the court finds the petition of Paula Titular Llorente, meritorious,
and so declares the intrinsic disposition of the will of Lorenzo Llorente dated March
13, 1981 as void and declares her entitled as conjugal partner and entitled to onehalf of their conjugal properties, and as primary compulsory heir, Paula T. Llorente is
also entitled to one-third of the estate and then one-third should go to the
illegitimate children, Raul, Luz and Beverly, all surname (sic) Llorente, for them to
partition in equal shares and also entitled to the remaining free portion in equal
shares.
Petitioner, Paula Llorente is appointed legal administrator of the estate of the
deceased, Lorenzo Llorente. As such let the corresponding letters of administration
issue in her favor upon her filing a bond in the amount (sic) of P100,000.00
conditioned for her to make a return to the court within three (3) months a true and
complete inventory of all goods, chattels, rights, and credits, and estate which shall
at any time come to her possession or to the possession of any other person for her,
and from the proceeds to pay and discharge all debts, legacies and charges on the
same, or such dividends thereon as shall be decreed or required by this court; to
render a true and just account of her administration to the court within one (1) year,
and at any other time when required by the court and to perform all orders of this
court by her to be performed.

On the other matters prayed for in respective petitions for want of evidence could
not be granted.
SO ORDERED.[27]
In time, Alicia filed with the trial court a motion for reconsideration of the
aforequoted decision.[28]
On September 14, 1987, the trial court denied Alicias motion for reconsideration but
modified its earlier decision, stating that Raul and Luz Llorente are not children
legitimate or otherwise of Lorenzo since they were not legally adopted by him.[29]
Amending its decision of May 18, 1987, the trial court declared Beverly Llorente as
the only illegitimate child of Lorenzo, entitling her to one-third (1/3) of the estate
and one-third (1/3) of the free portion of the estate.[30]
On September 28, 1987, respondent appealed to the Court of Appeals.[31]
On July 31, 1995, the Court of Appeals promulgated its decision, affirming with
modification the decision of the trial court in this wise:
WHEREFORE, the decision appealed from is hereby AFFIRMED with the
MODIFICATION that Alicia is declared as co-owner of whatever properties she and
the deceased may have acquired during the twenty-five (25) years of cohabitation.
SO ORDERED.[32]
On August 25, 1995, petitioner filed with the Court of Appeals a motion for
reconsideration of the decision.[33]
On March 21, 1996, the Court of Appeals,[34] denied the motion for lack of merit.
Hence, this petition.[35]
The Issue
Stripping the petition of its legalese and sorting through the various arguments
raised,[36] the issue is simple. Who are entitled to inherit from the late Lorenzo N.
Llorente?
We do not agree with the decision of the Court of Appeals. We remand the case to
the trial court for ruling on the intrinsic validity of the will of the deceased.
The Applicable Law
The fact that the late Lorenzo N. Llorente became an American citizen long before
and at the time of: (1) his divorce from Paula; (2) marriage to Alicia; (3) execution of
his will; and (4) death, is duly established, admitted and undisputed.

Thus, as a rule, issues arising from these incidents are necessarily governed by
foreign law.
The Civil Code clearly provides:
Art. 15. Laws relating to family rights and duties, or to the status, condition and
legal capacity of persons are binding upon citizens of the Philippines, even though
living abroad.
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 succession, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found. (emphasis ours)
True, foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them. Like any other fact, they must be alleged
and proved.[37]
While the substance of the foreign law was pleaded, the Court of Appeals did not
admit the foreign law. The Court of Appeals and the trial court called to the fore the
renvoi doctrine, where the case was referred back to the law of the decedents
domicile, in this case, Philippine law.
We note that while the trial court stated that the law of New York was not sufficiently
proven, in the same breath it made the categorical, albeit equally unproven
statement that American law follows the domiciliary theory hence, Philippine law
applies when determining the validity of Lorenzos will.[38]
First, there is no such thing as one American law. The "national law" indicated in
Article 16 of the Civil Code cannot possibly apply to general American law. There is
no such law governing the validity of testamentary provisions in the United States.
Each State of the union has its own law applicable to its citizens and in force only
within the State. It can therefore refer to no other than the law of the State of which
the decedent was a resident.[39] Second, there is no showing that the application of
the renvoi doctrine is called for or required by New York State law.
The trial court held that the will was intrinsically invalid since it contained
dispositions in favor of Alice, who in the trial courts opinion was a mere paramour.
The trial court threw the will out, leaving Alice, and her two children, Raul and Luz,
with nothing.
The Court of Appeals also disregarded the will. It declared Alice entitled to one half
(1/2) of whatever property she and Lorenzo acquired during their cohabitation,
applying Article 144 of the Civil Code of the Philippines.

The hasty application of Philippine law and the complete disregard of the will,
already probated as duly executed in accordance with the formalities of Philippine
law, is fatal, especially in light of the factual and legal circumstances here obtaining.
Validity of the Foreign Divorce
In Van Dorn v. Romillo, Jr.[40] we held that owing to the nationality principle
embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the
policy against absolute divorces, the same being considered contrary to our concept
of public policy and morality. In the same case, the Court ruled that aliens may
obtain divorces abroad, provided they are valid according to their national law.
Citing this landmark case, the Court held in Quita v. Court of Appeals,[41] that once
proven that respondent was no longer a Filipino citizen when he obtained the divorce
from petitioner, the ruling in Van Dorn would become applicable and petitioner could
very well lose her right to inherit from him.
In Pilapil v. Ibay-Somera,[42] we recognized the divorce obtained by the respondent
in his country, the Federal Republic of Germany. There, we stated that divorce and
its legal effects may be recognized in the Philippines insofar as respondent is
concerned in view of the nationality principle in our civil law on the status of
persons.
For failing to apply these doctrines, the decision of the Court of Appeals must be
reversed.[43] We hold that the divorce obtained by Lorenzo H. Llorente from his first
wife Paula was valid and recognized in this jurisdiction as a matter of comity. Now,
the effects of this divorce (as to the succession to the estate of the decedent) are
matters best left to the determination of the trial court.
Validity of the Will
The Civil Code provides:
Art. 17. The forms and solemnities of contracts, wills, and other public instruments
shall be governed by the laws of the country in which they are executed.
When the acts referred to are executed before the diplomatic or consular officials of
the Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution. (underscoring ours)
The clear intent of Lorenzo to bequeath his property to his second wife and children
by her is glaringly shown in the will he executed. We do not wish to frustrate his
wishes, since he was a foreigner, not covered by our laws on family rights and
duties, status, condition and legal capacity.[44]
Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues
best proved by foreign law which must be pleaded and proved. Whether the will

was executed in accordance with the formalities required is answered by referring to

Philippine law. In fact, the will was duly probated.
As a guide however, the trial court should note that whatever public policy or good
customs may be involved in our system of legitimes, Congress did not intend to
extend the same to the succession of foreign nationals. Congress specifically left
the amount of successional rights to the decedent's national law.[45]

LWV CONSTRUCTION CORPORATION, Petitioner, - versus

MARCELO B. DUPO, Respondent.

Having thus ruled, we find it unnecessary to pass upon the other issues raised.

G.R. No. 172342 July 13, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

The Fallo

QUISUMBING, J.:

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.
R. SP No. 17446 promulgated on July 31, 1995 is SET ASIDE.

Petitioner LWV Construction Corporation appeals the Decision[1] dated December 6,

2005 of the Court of Appeals in CA-G.R. SP No. 76843 and its Resolution[2] dated
April 12, 2006, denying the motion for reconsideration. The Court of Appeals had
ruled that under Article 87 of the Saudi Labor and Workmen Law (Saudi Labor Law),
respondent Marcelo Dupo is entitled to a service award or longevity pay amounting
to US$12,640.33.

In lieu thereof, the Court REVERSES the decision of the Regional Trial Court and
RECOGNIZES as VALID the decree of divorce granted in favor of the deceased
Lorenzo N. Llorente by the Superior Court of the State of California in and for the
County of San Diego, made final on December 4, 1952.
Further, the Court REMANDS the cases to the court of origin for determination of the
intrinsic validity of Lorenzo N. Llorentes will and determination of the parties
successional rights allowing proof of foreign law with instructions that the trial court
shall proceed with all deliberate dispatch to settle the estate of the deceased within
the framework of the Rules of Court.
No costs.
SO ORDERED.

The antecedent facts are as follows:

Petitioner, a domestic corporation which recruits Filipino workers, hired respondent
as Civil Structural Superintendent to work in Saudi Arabia for its principal,
Mohammad Al-Mojil Group/Establishment (MMG). On February 26, 1992, respondent
signed his first overseas employment contract, renewable after one year. It was
renewed five times on the following dates: May 10, 1993, November 16, 1994,
January 22, 1996, April 14, 1997, and March 26, 1998. All were fixed-period
contracts for one year. The sixth and last contract stated that respondents
employment starts upon reporting to work and ends when he leaves the work site.
Respondent left Saudi Arabia on April 30, 1999 and arrived in the Philippines on May
1, 1999.
On May 28, 1999, respondent informed MMG, through the petitioner, that he needs
to extend his vacation because his son was hospitalized. He also sought a
promotion with salary adjustment.[3] In reply, MMG informed respondent that his
promotion is subject to managements review; that his services are still needed; that
he was issued a plane ticket for his return flight to Saudi Arabia on May 31, 1999;
and that his decision regarding his employment must be made within seven days,
otherwise, MMG will be compelled to cancel [his] slot.[4]
On July 6, 1999, respondent resigned. In his letter to MMG, he also stated:
xxxx
I am aware that I still have to do a final settlement with the company and hope that
during my more than seven (7) [years] services, as the Saudi Law stated, I am
entitled for a long service award.[5] (Emphasis supplied.)
xxxx

According to respondent, when he followed up his claim for long service award on
December 7, 2000, petitioner informed him that MMG did not respond.[6]
On December 11, 2000, respondent filed a complaint[7] for payment of service
award against petitioner before the National Labor Relations Commission (NLRC),
Regional Arbitration Branch, Cordillera Administrative Region, Baguio City. In support
of his claim, respondent averred in his position paper that:
xxxx
Under the Law of Saudi Arabia, an employee who rendered at least five (5) years in
a company within the jurisdiction of Saudi Arabia, is entitled to the so-called long
service award which is known to others as longevity pay of at least one half month
pay for every year of service. In excess of five years an employee is entitled to one
month pay for every year of service. In both cases inclusive of all benefits and
allowances.
This benefit was offered to complainant before he went on vacation, hence, this was
engrained in his mind. He reconstructed the computation of his long service award
or longevity pay and he arrived at the following computation exactly the same with
the amount he was previously offered [which is US$12,640.33].[8] (Emphasis
supplied.)
xxxx
Respondent said that he did not grab the offer for he intended to return after his
vacation.
For its part, petitioner offered payment and prescription as defenses. Petitioner
maintained that MMG pays its workers their Service Award or Severance Pay every
conclusion of their Labor Contracts pursuant to Article 87 of the [Saudi Labor Law].
Under Article 87, payment of the award is at the end or termination of the Labor
Contract concluded for a specific period. Based on the payroll,[9] respondent was
already paid his service award or severance pay for his latest (sixth) employment
contract.

The Labor Arbiter ruled that respondents seven-year employment with MMG had
sufficiently oriented him on the benefits given to workers; that petitioner was unable
to convincingly refute respondents claim that MMG offered him longevity pay before
he went on vacation on May 1, 1999; and that respondents claim was not barred by
prescription since his claim on July 6, 1999, made a month after his cause of action
accrued, interrupted the prescriptive period under the Saudi Labor Law until his
claim was categorically denied.
Petitioner appealed. However, the NLRC dismissed the appeal and affirmed the
Labor Arbiters decision.[14] The NLRC ruled that respondent is entitled to longevity
pay which is different from severance pay.
Aggrieved, petitioner brought the case to the Court of Appeals through a petition for
certiorari under Rule 65 of the Rules of Court. The Court of Appeals denied the
petition and affirmed the NLRC. The Court of Appeals ruled that service award is the
same as longevity pay, and that the severance pay received by respondent cannot
be equated with service award. The dispositive portion of the Court of Appeals
decision reads:
WHEREFORE, finding no grave abuse of discretion amounting to lack or in (sic)
excess of jurisdiction on the part of public respondent NLRC, the petition is denied.
The NLRC decision dated November 29, 2002 as well as and (sic) its January 31,
2003 Resolution are hereby AFFIRMED in toto.
SO ORDERED.[15]
After its motion for reconsideration was denied, petitioner filed the instant petition
raising the following issues:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING NO
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
ON THE PART OF PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION.
II.

Petitioner added that under Article 13[10] of the Saudi Labor Law, the action to
enforce payment of the service award must be filed within one year from the
termination of a labor contract for a specific period. Respondents six contracts
ended when he left Saudi Arabia on the following dates: April 15, 1993, June 8, 1994,
December 18, 1995, March 21, 1997, March 16, 1998 and April 30, 1999. Petitioner
concluded that the one-year prescriptive period had lapsed because respondent filed
his complaint on December 11, 2000 or one year and seven months after his sixth
contract ended.[11]
In his June 18, 2001 Decision,[12] the Labor Arbiter ordered petitioner to pay
respondent longevity pay of US$12,640.33 or P648,562.69 and attorneys fees of
P64,856.27 or a total of P713,418.96.[13]

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT

THE SERVICE AWARD OF THE RESPONDENT [HAS] NOT PRESCRIBED WHEN HIS
COMPLAINT WAS FILED ON DECEMBER 11, 2000.
III.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN APPLYING IN THE
CASE AT BAR [ARTICLE 1155 OF THE CIVIL CODE].
IV.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN APPLYING

ARTICLE NO. 7 OF THE SAUDI LABOR AND WORKMEN LAW TO SUPPORT ITS FINDING
THAT THE BASIS OF THE SERVICE AWARD IS LONGEVITY [PAY] OR LENGTH OF
SERVICE RENDERED BY AN EMPLOYEE.[16]
Essentially, the issue is whether the Court of Appeals erred in ruling that respondent
is entitled to a service award or longevity pay of US$12,640.33 under the provisions
of the Saudi Labor Law. Related to this issue are petitioners defenses of payment
and prescription.
Petitioner points out that the Labor Arbiter awarded longevity pay although the
Saudi Labor Law grants no such benefit, and the NLRC confused longevity pay and
service award. Petitioner maintains that the benefit granted by Article 87 of the
Saudi Labor Law is service award which was already paid by MMG each time
respondents contract ended.
Petitioner insists that prescription barred respondents claim for service award as the
complaint was filed one year and seven months after the sixth contract ended.
Petitioner alleges that the Court of Appeals erred in ruling that respondents July 6,
1999 claim interrupted the running of the prescriptive period. Such ruling is
contrary to Article 13 of the Saudi Labor Law which provides that no case or claim
relating to any of the rights provided for under said law shall be heard after the
lapse of 12 months from the date of the termination of the contract.
Respondent counters that he is entitled to longevity pay under the provisions of the
Saudi Labor Law and quotes extensively the decision of the Court of Appeals. He
points out that petitioner has not refuted the Labor Arbiters finding that MMG
offered him longevity pay of US$12,640.33 before his one-month vacation in the
Philippines in 1999. Thus, he submits that such offer indeed exists as he sees no
reason for MMG to offer the benefit if no law grants it.
After a careful study of the case, we are constrained to reverse the Court of Appeals.
We find that respondents service award under Article 87 of the Saudi Labor Law has
already been paid. Our computation will show that the severance pay received by
respondent was his service award.
Article 87 clearly grants a service award. It reads:
Article 87
Where the term of a labor contract concluded for a specified period comes to an end
or where the employer cancels a contract of unspecified period, the employer shall
pay to the workman an award for the period of his service to be computed on the
basis of half a months pay for each of the first five years and one months pay for
each of the subsequent years. The last rate of pay shall be taken as basis for the
computation of the award. For fractions of a year, the workman shall be entitled to
an award which is proportionate to his service period during that year. Furthermore,
the workman shall be entitled to the service award provided for at the beginning of
this article in the following cases:

A.
B.

If he is called to military service.

If a workman resigns because of marriage or childbirth.

C.
If the workman is leaving the work as a result of a force majeure
beyond his control.[17] (Emphasis supplied.)
Respondent, however, has called the benefit other names such as long service
award and longevity pay. On the other hand, petitioner claimed that the service
award is the same as severance pay. Notably, the Labor Arbiter was unable to
specify any law to support his award of longevity pay.[18] He anchored the award
on his finding that respondents allegations were more credible because his sevenyear employment at MMG had sufficiently oriented him on the benefits given to
workers. To the NLRC, respondent is entitled to service award or longevity pay under
Article 87 and that longevity pay is different from severance pay. The Court of
Appeals agreed.
Considering that Article 87 expressly grants a service award, why is it correct to
agree with respondent that service award is the same as longevity pay, and wrong
to agree with petitioner that service award is the same as severance pay? And why
would it be correct to say that service award is severance pay, and wrong to call
service award as longevity pay?
We found the answer in the pleadings and evidence presented. Respondents
position paper mentioned how his long service award or longevity pay is computed:
half-months pay per year of service and one-months pay per year after five years
of service. Article 87 has the same formula to compute the service award.
The payroll submitted by petitioner showed that respondent received severance pay
of SR2,786 for his sixth employment contract covering the period April 21, 1998 to
April 29, 1999.[19] The computation below shows that respondents severance pay
of SR2,786 was his service award under Article 87.
Service Award = (SR5,438)[20] + (9 days/365 days)[21] x (SR5,438)
Service Award = SR2,786.04
Respondents service award for the sixth contract is equivalent only to half-months
pay plus the proportionate amount for the additional nine days of service he
rendered after one year. Respondents employment contracts expressly stated that
his employment ended upon his departure from work. Each year he departed from
work and successively new contracts were executed before he reported for work
anew. His service was not cumulative. Pertinently, in Brent School, Inc. v. Zamora,
[22] we said that a fixed term is an essential and natural appurtenance of
overseas employment contracts,[23] as in this case. We also said in that case that
under American law, [w]here a contract specifies the period of its duration, it
terminates on the expiration of such period. A contract of employment for a definite
period terminates by its own terms at the end of such period.[24] As it is, Article
72 of the Saudi Labor Law is also of similar import. It reads:

A labor contract concluded for a specified period shall terminate upon the expiry of
its term. If both parties continue to enforce the contract, thereafter, it shall be
considered renewed for an unspecified period.[25]

A law on prescription of actions is sui generis in Conflict of Laws in the sense that it
may be viewed either as procedural or substantive, depending on the
characterization given such a law.

Regarding respondents claim that he was offered US$12,640.33 as longevity pay

before he returned to the Philippines on May 1, 1999, we find that he was not candid
on this particular point. His categorical assertion about the offer being engrained in
his mind such that he reconstructed the computation and arrived at the
computation exactly the same with the amount he was previously offered is not
only beyond belief. Such assertion is also a stark departure from his July 6, 1999
letter to MMG where he could only express his hope that he was entitled to a long
service award and where he never mentioned the supposed previous offer.
Moreover, respondents claim that his monthly compensation is SR10,248.92[26] is
belied by the payroll which shows that he receives SR5,438 per month.

xxxx

We therefore emphasize that such payroll should have prompted the lower tribunals
to examine closely respondents computation of his supposed longevity pay before
adopting that computation as their own.
On the matter of prescription, however, we cannot agree with petitioner that
respondents action has prescribed under Article 13 of the Saudi Labor Law. What
applies is Article 291 of our Labor Code which reads:
ART. 291. Money claims. All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three (3)
years from the time the cause of action accrued; otherwise they shall be forever
barred.
In Cadalin v. POEAs Administrator,[27] we held that Article 291 covers all money
claims from employer-employee relationship and is broader in scope than claims
arising from a specific law. It is not limited to money claims recoverable under the
Labor Code, but applies also to claims of overseas contract workers.[28] The
following ruling in Cadalin v. POEAs Administrator is instructive:
First to be determined is whether it is the Bahrain law on prescription of action
based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that
shall be the governing law.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not be actionable after the
lapse of one year from the date of the expiry of the contract x x x.
As a general rule, a foreign procedural law will not be applied in the forum.
Procedural matters, such as service of process, joinder of actions, period and
requisites for appeal, and so forth, are governed by the laws of the forum. This is
true even if the action is based upon a foreign substantive law (Restatement of the
Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]).

However, the characterization of a statute into a procedural or substantive law

becomes irrelevant when the country of the forum has a borrowing statute. Said
statute has the practical effect of treating the foreign statute of limitation as one of
substance (Goodrich, Conflict of Laws, 152-153 [1938]). A borrowing statute
directs the state of the forum to apply the foreign statute of limitations to the
pending claims based on a foreign law (Siegel, Conflicts, 183 [1975]). While there
are several kinds of borrowing statutes, one form provides that an action barred
by the laws of the place where it accrued, will not be enforced in the forum even
though the local statute has not run against it (Goodrich and Scoles, Conflict of
Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind.
Said Section provides:
If by the laws of the state or country where the cause of action arose, the action is
barred, it is also barred in the Philippine Islands.
Section 48 has not been repealed or amended by the Civil Code of the Philippines.
Article 2270 of said Code repealed only those provisions of the Code of Civil
Procedure as to which were inconsistent with it. There is no provision in the Civil
Code of the Philippines, which is inconsistent with or contradictory to Section 48 of
the Code of Civil Procedure (Paras, Philippine Conflict of Laws, 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil
Procedure] cannot be enforced ex proprio vigore insofar as it ordains the application
in this jurisdiction of [Article] 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum will not enforce any foreign claim obnoxious to the forums
public policy x x x. To enforce the one-year prescriptive period of the Amiri Decree
No. 23 of 1976 as regards the claims in question would contravene the public policy
on the protection to labor.[29]
Thus, in our considered view, respondents complaint was filed well within the threeyear prescriptive period under Article 291 of our Labor Code. This point, however,
has already been mooted by our finding that respondents service award had been
paid, albeit the payroll termed such payment as severance pay.
WHEREFORE, the petition is GRANTED. The assailed Decision dated December 6,
2005 and Resolution dated April 12, 2006, of the Court of Appeals in CA-G.R. SP No.
76843, as well as the Decision dated June 18, 2001 of the Labor Arbiter in NLRC
Case No. RAB-CAR-12-0649-00 and the Decision dated November 29, 2002 and
Resolution dated January 31, 2003 of the NLRC in NLRC CA No. 028994-01 (NLRC
RAB-CAR-12-0649-00) are REVERSED and SET ASIDE. The Complaint of respondent
is hereby DISMISSED.

No pronouncement as to costs.
SO ORDERED.