224 N.Y. 99, 120 N.E.

198
Court of Appeals of New York.
LOUCKS et al.
v.
STANDARD OIL CO. OF NEW YORK.
July 12, 1918.
PREVIOUS HISTORY: Loucks v. Standard Oil Co. of New York, 92 Misc. 475, 156
N.Y.S. 7 (N.Y.Sup. Dec 11, 1915)
Reversed by: Loucks v. Standard Oil Co., 172 A.D. 227, 159 N.Y.S. 282 (N.Y.A.D. 4
Dept. Apr 19, 1916)
Reversed by: Loucks v. Standard Oil Co. of New York, 224 N.Y. 99, 120 N.E. 198 (N.Y.
Jul 12, 1918)
SUBSEQUENT HISTORY: Distinguished by: In re Rubins Will, 280 A.D. 348, 280
A.D. 864, 113 N.Y.S.2d 70 (N.Y.A.D. 1 Dept. Jun 03, 1952)
Appeal from Supreme Court, Appellate Division, Fourth Department.
Action by Fannie F. Loucks and James M. Rutledge, as joint administrators of Everett
A. Loucks, deceased, against the Standard Oil Company of New York. From a
judgment of the Appellate Division (172 App. Div. 227, 159 N. Y. Supp. 282),
reversing an order of the Special Term (92 Misc. Rep. 475, 156 N. Y. Supp. 7) and
granting defendant's motion for judgment on the pleadings, plaintiffs appeal.
Reversed, and order of the Special Term affirmed.
A. Lee Olmsted, of Syracuse, for appellants. Lyman M. Bass, of Buffalo, for
respondent.
Collin, J., dissenting in part.
[**198] [*101] CARDOZO, J.
The action is brought to recover damages for injuries resulting in death. The
plaintiffs are the administrators of the estate of Everett A. Loucks. Their intestate,
while traveling on a highway in the state of [*102] Massachusetts, was run down
and killed through the negligence of the defendant's servants then engaged in its
business. He left a wife and two children, residents of New York. A statute of
Massachusetts (R. L. c. 171, 2, as amended by L. 1907, c. 375) provides that:
If a person or corporation by his or its negligence, or by the negligence of his or its
agents or servants while engaged in his or its business, causes the death of a
person who is in the exercise of due care, and not in his or its employment or
service, he or it shall be liable in damages in the sum of not less than $500, nor
more than $10,000, to be assessed with reference to the degree of his or its
culpability, or * * * that of his or its * * * servants, to be recovered in an action of
tort commenced within two years after the injury which caused the death, by the
executor or administrator of the deceased, one-half thereof to the use of the widow
and one-half to the use of the children of the deceased, or, if there are no children,
the whole to the use of the widow, or, if there is no widow, the whole to the use of
the next of kin.
The question is whether a right of action under that statute may be enforced in our
courts.
1. The courts of no country execute the penal laws of another. The Antelope, 10
Wheat. [23 U.S.] 66, 123, 6 L. Ed. 268. The defendant invokes that principle as
applicable here. Penal in one sense the statute indisputably is. The damages are not
limited to compensation; they are proportioned to the offenders guilt. A minimum
recovery of $500 is allowed in every case. But the question is not whether the

statute is penal in some sense. The question is whether it is penal within the rules of
private international law. A statute penal in that sense is one that awards a penalty
to the state, or to a public officer in its behalf, or to a member of the public, suing in
the interest of the whole community to redress a public wrong. Huntington v.
Attrill, 146 U. S. 657, 668, 13 Sup. Ct. 224, 36 L. Ed. 1123; Huntington [*103] v.
Attrill, [1903] A. C. 150, 156 [sic, should be [1893] A.C. 150]; Brady v. Daly, 175 U.
S. 148, 154, 157, 20 Sup. Ct. 62, 44 L. Ed. 109; Raulin v. Fischer, [1911] 2 K. B. 93;
Dicey, Conflict of Laws, p. 209. The purpose must be, not reparation to one
aggrieved, but vindication of the public justice. Huntington v. Attrill, 146 U. S. 668,
13 Sup. Ct. 224, 36 L. Ed. 1123; Brady v. Daly, supra. The Massachusetts statute
has been classified in some jurisdictions as penal, and in others as remedial.
Connecticut, Rhode Island, and Vermont put it in the first category. [**199] Cristilly
v. Warner, 87 Conn. 461, 88 Atl. 711, 51 L. R. A. (N. S.) 415; Gardner v. N. Y. & N. E.
Ry. Co., 17 R. I. 790, 24 Atl. 831; O'Reilly v. N. Y. & N. E. Ry. Co., 16 R. I. 388, 17 Atl.
171, 906, 19 Atl. 244, 5 L. R. A. 364, 6 L. R. A. 719; Adams v. Fitchburg R. R. Co., 67
Vt. 76, 30 Atl. 687, 48 Am. St. Rep. 800. See also Raisor v. C. & A. Ry. Co., 215 Ill. 47,
74 N. E. 69, 106 Am. St. Rep. 153, 2 Ann. Cas. 802. New Hampshire and some of the
federal courts put it in the second. Hill v. B. & M. R. R. Co., 77 N. H. 151, 89 Atl. 482,
Cas. 1914C, 714, where the subject is fully considered; B. & M. R. R. Co. v. Hurd, 108
Fed. 116, 47 C. C. A. 615, 56 L. R. A. 193; Malloy v. Am. Hide & Leather Co. (C. C.)
148 Fed. 482. See also Whitlow v. Nashville R. R. Co., 114 Tenn. 344, 84 S. W. 618,
68 L. R. A. 503. The courts of Massachusetts have said that the question is still an
open one. Boott Mills v. B. & M. R. R. Co., 218 Mass. 582, 592, 106 N. E. 680. No
matter how they may have characterized the act as penal, they have not meant to
hold that it is penal for every purpose. 218 Mass. 592, 106 N. E. 680. Even without
that reservation by them, the essential purpose of the statute would be a question
for our courts. Huntington v. Attrill, 146 U. S. 683, 13 Sup. Ct. 224, 36 L. Ed.
1123; [1903] A. C. 155; Hill v. B. & M. R. R. Co., supra.
We think the better reason is with those cases which hold that the statute is not
penal in the international sense. On that branch of the controversy, indeed, there is
no division of opinion among us. It is true that the offender is punished, but the
purpose of the punishment is reparation to those aggrieved by his offense. Com. v.
B. & A. R. R. Co., 121 Mass. 36, 37; Com. v. Eastern R. R. Co., 5 Gray (Mass.) 473,
474. The common law did not give a cause of action to surviving
relatives. [*104] Insurance Co. v. Brame, 95 U. S. 754, 757, 24 L. Ed. 580; Dennick
v. R. R. Co., 103 U. S. 11, 26 L. Ed. 439; The Harrisburg, 119 U. S. 199, 7 Sup. Ct.
140, 30 L. Ed. 358; Admiralty Commissioners v. S. S. Amerika, [1917] A. C. 38. In the
light of modern legislation, its rule is an anachronism. Nearly everywhere, the
principle is now embodied in statute that the next of kin are wronged by the killing
of their kinsman. The family becomes a legal unit, invested with rights of its own,
invested with an interest in the continued life of its members, much as it was in
primitive law. Maine, Ancient Law, pp. 121, 122, 178; 1 Pollock & Maitland, History
of English Law, p. 24; Holmes, the Common Law, p. 342. The damages may be
compensatory or punitive according to the statutory scheme. See 8 Ruling Case
Law, title Death, 120, where statutes are collated. In either case the plaintiffs have
a grievance above and beyond any that belongs to them as members of the body
politic. They sue to redress an outrage peculiar to themselves.
We cannot fail to see in the history of the Massachusetts statutes a developing
expression of this policy and purpose. The statutes have their distant beginnings in
the criminal law. To some extent the vestiges of criminal forms survive. But the old

forms have been filled with a new content. The purpose which informs and vitalizes
them is the protection of the survivors. They are moods and phases, the particular
and varying expression, of a tendency in legislation as general as the common law.
They are not to be viewed in isolation, apart from the stream of events. At first, the
remedy was given only when the wrongdoer was a common carrier. St. 1840, c. 80.
That statute goes back to 1840, antedating Lord Campbell's Act in England. St. 9 &
10 Vict. c. 93 (1846). The remedy was by indictment and fine, the fine being
payable to the widow and next of kin. If there were no survivors of the prescribed
class, there could be no indictment. [*105] Com. v. B. & A. R. R. Co., 121 Mass. 36.
The reason was that even then the dominant purpose was reparation to the family.
But later an alternative remedy by civil action at the suit of the executor or
administrator became available even against carriers. Hudson v. L. & B. R. R., 185
Mass. 515, 516, 71 N. E. 66; Grella v. Lewis Wharf Co., 211 Mass. 54, 58, 97 N. E.
745, Ann. Cas. 1913A, 1136. Then other statutes gave a civil remedy against other
wrongdoers, and a civil remedy exclusively. Some statutes were confined to cases
where the defendant was the employer of the decedent. St. 1887, c. 270; R. L. c.
106, 73; Smith v. Thomson-Houston El. Co., 188 Mass. 371, 74 N. E. 664. Finally
there came one which gave a remedy against all persons who had not otherwise
been made liable. T. L. c. 171, 2. That is the statute sued on. The remedy is civil; it
is an action of tort.
Through all this legislation there runs a common purpose. Boott Mills v. B. & M. R. R.
Co., supra, 218 Mass. 586, 106 N. E. 680; Brown v. Thayer, 212 Mass. 392, 99 N. E.
237. It is penal in one element and one only; the damages are punitive. The courts
of Massachusetts do not give punitive damages even for malicious torts except by
force of statute. Bott Mills v. B. & M. R. R. Co., supra, 218 Mass. 588, 106 N. E. 680;
Ellis v. Brockton Pub. Co., 198 Mass. 538, 84 N. E. 1018, 126 Am. St. Rep. 454, 15
Ann. Cas. 83. That may have led them to emphasize unduly the penal element in
such recoveries. But the punishment of the wrongdoer is not designed as
atonement for a crime; it is solace to the individual who has suffered a private
wrong. This is seen in many tokens. The employer may be innocent himself. Smart
money will still be due in proportion to his servant's negligence. That is a
distribution of burdens more characteristic of torts than crimes. But even more
significant is the distribution of benefits. All the statutes are in pari material. All or
none are [**200] penal in the international sense. Boott Mills Co. v. B. & M. R. R.
Co., supra. Under all, liability is conditioned upon the existence of a widow or of next
of kin. Under some, [*106] there must be proof also that the next of kin were
dependent on the decedent's wages for support. R. L. c. 106, 73. That restriction
brings the dominant purpose into clear relief as reparation to those aggrieved.
Other purposes may be served at the same time. It is easy to cite dicta that seem to
give them prominence. McCarthy v. Ward Lumber Co., 219 Mass. 566, 107 N. E. 439;
Hudson v. L. & B. R. R., 185 Mass. 510, 71 N. E. 66; Mulhall v. Fallon, 176 Mass. 266,
269, 57 N. E. 386, 54 L. R. A. 934, 79 Am. St. Rep. 309. They are dicta only. Nor are
all the dicta on one side. Brown v. Thayer, 212 Mass. 392, 398, 99 N. E. 237; Upson
v. B. & M. R. R. Co., 211 Mass. 446, 98 N. E. 32; Grella v. Lewis Wharf Co., 211 Mass.
54, 58, 97 N. E. 745, Ann. Cas. 1913A, 1136. There are cross-currents and eddies in
the stream. We follow the main course. The executor or administrator who sues
under this statute is not the champion of the peace and order and public justice of
the commonwealth of Massachusetts. He is the representative of the outraged
family. He vindicates a private right.

2. Another question remains. Even though the statute is not penal, it differs from
our own. We must determine whether the difference is a sufficient reason for
declining jurisdiction. A tort committed in one state creates a right of action that
may be sued upon in another unless public policy forbids. That is the generally
accepted rule in the United States. Huntington v. Attrill, 146 U. S. 657, 670, 13 Sup.
Ct. 224, 36 L. Ed. 1123; Stewart v. B. & O. R. R. Co., 168 U. S. 445, 18 Sup. Ct. 105,
42 L. Ed. 537; N. Pac. R. R. Co. v. Babcock, 154 U. S. 190, 14 Sup. Ct. 978, 38 L. Ed.
958; A., T. & St. Fe Ry. Co. v. Sowers, 213 U. S. 55, 67, 68, 29 Sup. Ct. 397, 53 L. Ed.
695; Cuba R. R. Co. v. Crosby, 222 U. S. 473, 478, 479, 32 Sup. Ct. 132, 56 L. Ed.
274, 38 L. R. A. (N. S.) 40; Howarth v. Lombard, 175 Mass. 570, 56 N. E. 888, 49 L. R.
A. 301; Walsh v. B. & M. R. R., 201 Mass. 527, 530, 88 N. E. 12. It is not the rule in
every jurisdiction where the common law prevails. In England it has been held that
the foreign tort must be also one by English law (The Halley, L. R. 2 P. C. 193, 204;
Phillips v. Eyre, L. R. 6 Q. B. 1, 28; Carr v. Fracis Times & Co., [1902] A. C. 176,
182; [*107] Dicey, Conflict of Laws, p. 645; 6 Halsbury, Laws of England, p. 248),
which then becomes the source and measure of the resulting cause of action
(Machado v. Fontes, [1897] 2 Q. B. 231; Beale, Conflict of Laws, 163). That is
certainly not the rule with us. But there are some decisions in death cases which
suggest a compromise. They say that jurisdiction will be refused unless the statutes
of the two states are substantially the same. That is an approach to the English rule.
But then they say that, if substantial correspondence exists, it is the right of action
under the foreign statute, and not the statute of the forum, which our courts will
enforce. To that extent there is a departure from the English rule. There is little
doubt about the wisdom of the departure. What is subject to criticism, is the
approach. The question is whether the enforcement of a right of action for tort
under the statutes of another state is to be conditioned upon the existence of a
kindred statute here. Support for the restriction is supposed to be found in four
cases in this court: McDonald v. Mallory, 77 N. Y. 546, 33 Am. Rep. 664; Leonard v.
Columbia Steam Navigation Co., 84 N. Y. 48, 38 Am. Rep. 491; Wooden v. Western N.
Y. & P. R. R. Co., 126 N. Y. 10, 26 N. E. 1050, 13 L. R. A. 458, 22 Am. St. Rep. 803; and
Kiefer v. Grand Trunk R. Co., 12 App. Div. 28, 42 N. Y. Supp. 171, affirmed on opinion
below 153 N. Y. 688, 48 N. E. 1105.
McDonald v. Mallory is altogether irrelevant. In that case, death occurred upon the
high seas. The ship hailed from this state, was registered in one of our ports, and
was owned by one of our citizens. She was, therefore, constructively part of our
territory. For that reason, our law governed, and the action was sustained. Rapallo,
J., in the course of his opinion, said that the laws of New York have no operation in
foreign jurisdictions, and that, where the wrong is suffered elsewhere, 'no action
therefor can be maintained here, at least without proof of the existence of a similar
statute in the place where the wrong was committed.' That statement was accurate
as applied [*108] to the case that was then at hand. There must be a similar
statute, i. e., a statute giving a cause of action for death, in the place where death is
caused. Locus regit actum. It is quite another thing to say that, if there is a foreign
statute, it must be duplicated here.
In Leonard v. Columbia Steam Navigation Co., supra, the death occurred in
Connecticut, where there was a statute similar to our own. The court held that the
action would lie. It was unnecessary to determine whether there would have been
another result if the statute had been different. Judge Rapallos statement of the
rule in McDonald v. Mallory was quoted as if it sustained a requirement of
correspondence. That was obviously a misapprehension of its meaning. There was a

citation of some English cases. Madrazo v. Willes, 3 B. 3 Ald. 353; Melan v. Duke de
Fitz-James, 1 B. & P. 138 [, 126 E.R. 822] [PDF, 492 kb]; Mostyn v. Fabrigas, 1 Cowp.
161 [, 98 E.R. 1021] [PDF, 1.2 mb]. They have little bearing on the subject.
In Wooden v. Western N. Y. & P. R. R. Co., supra, the death occurred in Pennsylvania.
The case was heard upon demurrer to the complaint. Counsel on each side assumed
that the statutes must be substantially similar.
[**201] The argument was confined to the question whether they were similar. Not
unnaturally the court proceeded upon the same assumption. McDonald v. Mallory
and Leonard v. Columbia Steam Navigation Co., supra, were the only cases cited.
The court found substantial similarity between the statutes except in respect of the
measure of recovery. The Pennsylvania statute did not limit the damages. Our
statute then prescribed a maximum of $5,000. The difference was thought to affect
the remedy rather than the right. We said that the right created by the foreign
statute would be enforced, but subject to the restriction in amount which expressed
the local policy. There was some suggestion that if the defendant were a
nonresident, the restriction would not [*109] apply. The suggestion sounds like an
echo of the theory of the statute personal, a body of national law which the citizen
carries about with him. Beale, Conflict of Laws, 54, 55; Am. Banana Co. v. United
Fruit Co., 213 U. S. 347, 356, 29 Sup. Ct. 511, 53 L. Ed. 826, 16 Ann. Cas. 1047. That
is a theory which has yielded generally in this country to the principles of the
territorial system and the doctrine of vested rights. Beale, supra, 70, 73. But we
do not need to go into distinctions between residents and nonresidents. Even in its
application to residents, the ruling in the Wooden Case expresses a conception of
our public policy which is not to be extended. The Supreme Court of the United
States has held under like conditions that the foreign law governs not only the
definition of the tort, but also the assessment of the damages. Northern Pac. R. R.
Co. v. Babcock, 154 U. S. 190, 14 Sup. Ct. 978, 38 L. Ed. 958; Slater v. Mexican Nat.
R. R. Co., 194 U. S. 120, 126, 24 Sup. Ct. 581, 48 L. Ed. 900. An amendment to the
Constitution has abrogated the limitation upon the amount of the recovery, and
established the public policy of the state on a new and broader basis. Const. art. 1,
18. In these circumstances, the authority of the Wooden Case does not extend
beyond the specific point decided.
In Kiefer v. Grand Trunk Ry. Co., supra, the death occurred in Canada. Canada has a
statute similar to our own. The chief variance is in the award of interest. Limiting the
ruling in the Wooden Case, we held that interest had relation to the substance of the
right, and must be governed by the foreign statute.
Those are the only decisions of this court which tend to support the rule of
similarity. The rule itself has no more stable foundation than a misapprehended
dictum in McDonald v. Mallory. This was pointed out by Bischoff, J., in Boyle v.
Southern R. Co., 36 Misc. Rep. 289, 291, 73 N. Y. Supp. 465, and recently by Veeder,
J., in Lauria v. Du Pont (D. C.) 241 Fed. 687. See, [*110] also, Nelson v. Chesapeake
& D. R. R. Co., 88 Va. 971, 975, 976, 14 S. E. 838, 15 L. R. A. 583, reviewing many
cases. No case has yet arisen in which the statutes were so dissimilar that
acceptance or rejection of the rule was necessary to a decision. The time has come
to re-examine its foundations.
A foreign statute is not law in this state, but it gives rise to an obligation, which, if
transitory, follows the person and may be enforced wherever the person may be
found. Slater v. Mex. Nat. R. R. Co., supra; Lauria v. Du Pont, supra; Cuba R. R. Co. v.
Crosby, 222 U. S. 473, 478, 32 Sup. Ct. 132, 56 L. Ed. 274, 38 L. R. A. (N. S.) 40. No
law can exist as such except the law of the land; but * * * it is a principle of every

civilized law that vested rights shall be protected. Beale, supra, 51. The plaintiff
owns something, and we help him to get it. Howarth v. Lombard, 175 Mass. 570, 56
N. E. 888, 49 L. R. A. 301; Walsh v. B. & M. R. R., 201 Mass. 527, 88 N. E. 12; Walsh
v. N. Y., etc., R. R. 160 Mass. 571, 36 N. E. 584, 39 Am. St. Rep. 514; Beale, Conflict
of Laws, 51, 73. We do this unless some sound reason of public policy makes it
unwise for us to lend our aid. The law of the forum is material only as setting a limit
of policy beyond which such obligations will not be enforced there. Cuba R. R. Co. v.
Crosby, supra, 222 U. S. 478, 32 Sup. Ct. 132, 56 L. Ed. 274, 38 L. R. A. (N. S.) 40.
Sometimes we refuse to act where all the parties are nonresidents. Burdick v.
Freeman, 120 N. Y. 420, 24 N. E. 949; English v. N. Y., N. H. & H. R. R. Co., 161 App.
Div. 831, 146 N. Y. Supp. 963. That restriction need not detain us; in this case all are
residents. If did is to be withheld here, it must be because the cause of action in its
nature offends our sense of justice or menaces the public welfare. A., T. & St. F. Ry.
Co. v. Sowers, 213 U. S. 55, 67, 68, 29 Sup. Ct. 397, 53 L. Ed. 695; Stewart v. Balt. &
O. R. R. Co.,168 U. S. 445, 18 Sup. Ct. 105, 42 L. Ed. 537; Zeikus v. Florida E. C. Ry.
Co., 153 App. Div. 345, 350, 138 N. Y. Supp. 478.
Our own scheme of legislation may be different. We may even have no legislation
on the subject. That is not enough to show that public policy forbids us to enforce
the foreign right. A right of action is property. If a foreign statute gives [*111] the
right, the mere fact that we do not give a like right is no reason for refusing to help
the plaintiff in getting what belongs to him. We are not so provincial as to say that
every solution of a problem is wrong because we deal with it otherwise at home.
Similarity of legislation has indeed this importance; its presence shows beyond
question that the foreign statute does not offend the local policy. But its absence
does not prove the contrary. It is not to be exalted into an indispensable condition.
The misleading word comity has been responsible for much of the trouble.
It [**202] has been fertile in suggesting a discretion unregulated by general
principles. Beale, Conflict of Laws, 71.
The sovereign in its discretion may refuse its aid to the foreign right. St. Louis, I. M.
& So. Ry. Co. v. Taylor, 210 U. S. 281, 28 Sup. Ct. 616, 52 L. Ed. 1061; Dougherty v.
Am. McKenna Process Co., 255 Ill. 369, 99 N. E. 619, L. R. A. 1915F, 955, Ann. Cas.
1913D, 568. From this it has been an easy step to the conclusion that a like freedom
of choice has been confided to the courts. But that, of course, is a false view. Cuba
R. R. Co. v. Crosby, supra, 222 U. S. 478, 32 Sup. Ct. 132, 56 L. Ed. 274, 38 L. R. A.
(N. S.) 40. The courts are not free to refuse to enforce a foreign right at the pleasure
of the judges, to suit the individual notion of expediency or fairness. They do not
close their doors, unless help would violate some fundamental principle of justice,
some prevalent conception of good morals, some deep-rooted tradition of the
common weal.
This test applied, there is nothing in the Massachusetts statute that outrages the
public policy of New York. We have a statute which gives a civil remedy where death
is caused in our own state. We have though it so important that we have now
imbedded it in the Constitution. Const. art. 1, 18. The fundamental policy is that
there shall be some atonement for the wrong. Through the defendant's negligence,
a resident of New York has been killed in Massachusetts. He has left a widow and
children, who are also residents. The [*112] law of Massachusetts gives them a
recompense for his death. It cannot be that public policy forbids our courts to help
in collecting what belongs to them. We cannot give them the same judgment that
our law would give if the wrong had been done here. Very likely we cannot give
them as much. But that is no reason for refusing to give them what we can. We shall

not make things better by sending them to another state, where the defendant may
not be found, and where suit may be impossible. Nor is there anything to shock our
sense of justice in the possibility of a punitive recovery. The penalty is not
extravagant. It conveys no hint of arbitrary confiscation. Standard Oil Co. of Ind. v.
Missouri, 224 U. S. 270, 286, 32 Sup. Ct. 406, 56 L. Ed. 760, Ann. Cas. 1913D, 936.
It varies between moderate limits according to the defendants guilt. We shall not
feel the pricks of conscience, if the offender pays the survivors in proportion to the
measure of his offense.
We have no public policy that prohibits exemplary damages or civil penalties. We
give them for many wrongs. To exclude all penal actions would be to wipe out the
distinction between the penalties of public justice and the remedies of private law.
Finally, there are no difficulties of procedure that stand in the way. We have a
statute authroizing the triers of the facts, when statutory penalties are sued for, to
fit the award to the offense. Code Civ. Proc. 1898. The case is not one where
special remedies established by the foreign law are incapable of adequate
enforcement except in the home tribunals. Marshall v. Sherman, 148 N. Y. 9, 42 N. E.
419, 34 L. R. A. 757, 51 Am. St. Rep. 654; Howarth v. Angle, 162 N. Y. 179, 181, 189,
56 N. E. 489, 47 L. R. A. 725; Slater v. Mex. Nat. R. R. Co., supra.
We hold, then, that public policy does not prohibit the assumption of jurisdiction by
our courts and that this being so, mere differences of remedy do not count. For
many years the courts have been feeling their way in the enforcement of these
statutes. A civil remedy for another's death was something strange and new,
and [*113] it did not find at once the fitting niche, the proper category, in the legal
scheme. We need not be surprised, therefore, if some of the things said, as
distinguished from those decided, must be rejected to-day. But the truth, of course,
is that there is nothing sui generis about these death statutes in their relation to the
general body of private international law. We must apply the same rules that are
applicable to other torts; and the tendency of those rules to-day is toward a larger
comity, if we must cling to the traditional term. Walsh v. B. & M. R. R., 201 Mass.
527, 533, 88 N. E. 12. The fundamental public policy is perceived to be that rights
lawfully vested shall be everywhere maintained. At least, that is so among the
states of the Union. Walsh v. N. Y. & N. E. R. R. Co., 160 Mass. 571, 573, 36 N. E. 584,
39 Am. St. Rep. 514; Walsh v. B. & M. R. R., supra; Beach, Uniform Interstate
Enforcement of Vested Rights, 27 Yale Law Journal, 656. There is a growing
conviction that only exceptional circumstances should lead one of the states to
refuse to enforce a right acquired in another. The evidences of this tendency are
many. One typical instance will suffice. For many years Massachusetts closed her
courts to actions of this order based on foreign statutes. Richardson v. N. Y. C. R. R.,
98 Mass. 85. She has opened them now, and overruled her earlier decisions. Hanlon
v. Leyland & Co., Ltd., 223 Mass. 438, 111 N. E. 907, L. R. A. 1917A, 34; Walsh v. B.
& M. R. R., supra. The test of similarity has been abandoned there. If it has ever
been accepted here, we think it should be abandoned now.
The judgment of the Appellate Division should be reversed, and the order of the
Special Term affirmed, with costs in the Appellate Division and in this court.
HISCOCK, C. J., and CUDDEBACK, POUND, CRANE, and ANDREWS, JJ., concur.
COLLIN, J., dissents from decision of second question in opinion of CARDOZO, J., but
otherwise concurs.
Judgment reversed, etc. should be reversed, and the order of the Special Term
affirmed. with costs in the Appellate Division and in this court.

HISCOCK, C. J., and CUDDEBACK, POUND, CRANE, and ANDREWS, JJ., concur.
COLLIN, J., dissents from decision of second question in opinion of CARDOZO, J., but
otherwise concurs.
Judgment reversed, etc.
[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.
DECISION
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to
annul and set aside the Resolution [1] dated September 27, 1995 and the
Decision[2] dated April 10, 1996 of the Court of Appeals[3] in CA-G.R. SP No. 36533,
[4]
and 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 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for
its airlines based in Jeddah, Saudi Arabia. x x x
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.
When plaintiff returned to Jeddah a few days later, several SAUDIA officials
interrogated her about the Jakarta incident. They then requested her to go back
to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA
Legal Officer Sirah Akkad and base manager Baharini negotiated with the police
for the immediate release of the detained crew members but did not succeed
because plaintiff refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to understand the local
dialect. She also declined to sign a blank paper and a document written in the
local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred
her from the Jakarta flights.

Plaintiff learned that, through the intercession of the Saudi Arabian government,
the Indonesian authorities agreed to deport Thamer and Allah after two weeks of
detention.Eventually, they were again put in service by defendant SAUDI (sic). In
September 1990, defendant SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta incident was
already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief
Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought
her to the police station where the police took her passport and questioned her
about the Jakarta incident.Miniewy simply stood by as the police put pressure on
her to make a statement dropping the case against Thamer and Allah. Not until
she agreed to do so did the police return her passport and allowed her to catch
the afternoon flight out of Jeddah.
One year and a half later or on 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.
Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the
SAUDIA office brought her to a Saudi court where she was asked to sign a
document written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a notice to her
to appear before the court on June 27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah
once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff
did so after receiving assurance from SAUDIAs Manila manager, Aslam Saleemi,
that the investigation was routinary and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on
June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge
interrogated plaintiff through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however, just as her plane
was about to take off, a SAUDIA officer told her that the airline had forbidden her
to take flight. At the Inflight Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her passport and told her to remain in
Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court
where the judge, to her astonishment and shock, rendered a decision, translated
to her in English, sentencing her to five months imprisonment and to 286
lashes. Only then did she realize that the Saudi court had tried her, together
with Thamer and Allah, for what happened in Jakarta. The court found plaintiff
guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in
violation of Islamic laws; and (3) socializing with the male crew, in contravention
of Islamic tradition.[10]

Facing conviction, private respondent sought the help of her employer,

petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked
the Philippine Embassy in Jeddah to help her while her case is on
appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of
SAUDIA, while Thamer and Allah continued to serve in the international flights. [11]
Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila,[12] she was terminated from the service by SAUDIA, without her being
informed of the cause.
On November 23, 1993, Morada filed a Complaint [13] for damages against
SAUDIA, and Khaled Al-Balawi (Al- Balawi), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss [14] which
raised the following grounds, to wit: (1) that the Complaint states no cause of action
against Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that
the claim or demand set forth in the Complaint has been waived, abandoned or
otherwise extinguished; and (4) that the trial court has no jurisdiction to try the
case.

[15]

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss)
Saudia filed a reply[16] thereto on March 3, 1994.

On June 23, 1994, Morada filed an Amended Complaint [17] wherein Al-Balawi was
dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and
Motion to Dismiss Amended Complaint[18].
The trial court issued an Order [19] dated August 29, 1994 denying the Motion to
Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judge [20] denying the Motion to Dismiss, SAUDIA
filed on September 20, 1994, its Motion for Reconsideration [21] of the Order dated
August 29, 1994. It alleged that the trial court has no jurisdiction to hear and try the
case on the basis of Article 21 of the Civil Code, since the proper law applicable is
the law of the Kingdom of Saudi Arabia.On October 14, 1994, Morada filed her
Opposition[22] (To Defendants 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 SAUDIAs 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 attorneys 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 SAUDIAs 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
Complaints basis for recovery of damages is Article 21 of the Civil Code, and thus,

clearly within the jurisdiction of respondent Court. It further held that certiorari is
not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner
should have proceeded to trial, and in case of an adverse ruling, find recourse in an
appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer
for Temporary Restraining Order[31] dated April 30, 1996, given due course by this
Court. After both parties submitted their Memoranda, [32] the instant case is now
deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based
on Article 21 of the New Civil Code since the proper law applicable is the law of the
Kingdom of Saudi Arabia inasmuch as this case involves what is known in private
international law as a conflicts problem. Otherwise, the Republic of the Philippines
will sit in judgment of the acts done by another sovereign state which is abhorred.
II.
Leave of court before filing a supplemental pleading is not a jurisdictional
requirement. Besides, the matter as to absence of leave of court is now moot and
academic when this Honorable Court required the respondents to comment on
petitioners April 30, 1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order Within Ten (10) Days From Notice Thereof. Further, the
Revised Rules of Court should be construed with liberality pursuant to Section 2,
Rule 1 thereof.
III.
Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO.
36533 entitled Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al. and filed its April
30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining
Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period as
provided for under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the
decision in CA-G.R. SP NO. 36533 has not yet become final and executory and this
Honorable Court can take cognizance of this case. [33]
From the foregoing factual and procedural antecedents, the following issues
emerge for our resolution:
I.

WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE

REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY
CIVIL CASE NO. Q-93-18394 ENTITLED MILAGROS P. MORADA V. SAUDI ARABIAN
AIRLINES.
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THE
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 respondents claim for alleged abuse of rights
occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign
element qualifies the instant case for the application of the law of the Kingdom of
Saudi Arabia, by virtue of the lex loci delicti commissi rule.[34]
On the other hand, private respondent contends that since her Amended
Complaint is based on Articles 19 [35] and 21[36] of the Civil Code, then the instant
case is properly a matter of domestic law.[37]
Under the factual antecedents obtaining in this case, there is no dispute that
the interplay of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint [38] dated June 23,
1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines
corporation doing business in the Philippines. It may be served with summons
and other court processes at Travel Wide Associated Sales (Phils.), Inc., 3 rd Floor,
Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro Manila.
xxxxxxxxx
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 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.
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 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.
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 SAUDIAs Manila manager, 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.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the
help of the Philippine 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]
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.

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.
We thus find private respondents 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 respondents 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:
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.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals,[45] this Court held
that:
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.

Although Article 19 merely declares a principle of law, Article 21 gives flesh to

its provisions. Thus, we agree with private respondents 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:
Section 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:
xxxxxxxxx
(8) In all other cases in which demand, exclusive of interest, damages of whatever
kind, attorneys fees, litigation expenses, and costs 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)
xxxxxxxxx
And following Section 2 (b), Rule 4 of the Revised Rules of Courtthe venue,
Quezon City, is appropriate:
SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
(a) x x x x x x x x x
(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 Moradas Amended Complaint. SAUDIA also filed an Answer In Ex
Abundante Cautelam dated February 20, 1995. What is very patent and explicit
from the motions filed, is that SAUDIA prayed for other reliefs under the
premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial courts
jurisdiction by praying for the dismissal of the Amended Complaint on grounds other
than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.:[51]
We observe that the motion to dismiss filed on April 14, 1962, aside from
disputing the lower courts jurisdiction over defendants person, prayed for
dismissal of the complaint on the ground that plaintiffs 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 latters 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 situsof 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 forithe law of the forumis 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]
(Underscoring ours.)
After a careful study of the pleadings on record, including allegations in the
Amended Complaint deemed submitted for purposes of the motion to dismiss, we
are convinced that there is reasonable basis for private respondents 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. Petitioners 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 petitioners
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 actusoccurred. 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 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 fatality of the alleged
injury to the person, reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private respondent). All told, it is
not without basis to identify the Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti
commissi, modern theories and rules on tort liability [61] have been advanced to offer
fresh judicial approaches to arrive at just results. In keeping abreast with
the modern theories on tort liability, we find here an occasion to apply the State of
the most significant relationship rule, which in our view should be appropriate to
apply now, given the factual context of this case.
In applying said principle to determine the State which has the most significant
relationship, the following contacts are to be taken into account and evaluated
according to their relative importance with respect to the particular issue: (a) the
place where the injury occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicile, residence, nationality, place of incorporation and place of
business of the parties, and (d) the place where the relationship, if any, between the
parties is centered.[62]
As already discussed, there is basis for the claim that over-all injury occurred
and lodged in the Philippines. There is likewise no question that private respondent
is a resident Filipina national, working with petitioner, a resident foreign corporation
engaged here in the business of international air carriage. Thus, the relationship
between the parties was centered here, although it should be stressed that this suit
is not based on mere labor law violations. From the record, the claim that the
Philippines has the most significant contact with the matter in this dispute, [63] raised
by private respondent as plaintiff below against defendant (herein petitioner), in our
view, has been properly established.
Prescinding from this premise that the Philippines is the situs of the tort
complaint 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
petitioners 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, thus 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 courts denial of defendants (herein petitioners) motion to dismiss the
case. Not only was jurisdiction in order and venue properly laid, but appeal after
trial was obviously available, and the 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 countrys system of law and justice in a
transnational setting. With these guidelines in mind, the trial court must proceed to
try and adjudge the case in the light of relevant Philippine law, with due
consideration of the foreign element or elements involved. Nothing said herein, of
course, should be construed as prejudging the results of the case in any manner
whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case
No. Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby
REMANDED to Regional Trial Court of Quezon City, Branch 89 for further
proceedings.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Panganiban, JJ., concur.
654 F. Supp. 276 (1986)
Alberto M. GUINTO, Jr. and Stella Suarez, Plaintiffs,
v.
Ferdinand Edralin MARCOS and Does I through C, Inclusive, Defendants.
Civ. No. 86-0737-R(CM).
United States District Court, S.D. California.
October 31, 1986.
*277 Fred H. Arm, San Diego, Cal., for plaintiffs.
Charles G. Miller, Bartko, Welsh, Tarrant & Miller, San Francisco, Cal., for defendants.

MEMORANDUM DECISION AND ORDER

RHOADES, District Judge.

Defendant Marcos' motion to dismiss plaintiffs' first amended complaint came on
regularly for hearing on August 25, 1986, before the Honorable John S. Rhoades.
Fred H. Arm appeared on behalf of plaintiffs Alberto M. Guinto, Jr. and Stella Suarez.
Charles G. Miller and Bartko, Welsh, Tarrant & Miller appeared on behalf of
defendant Ferdinand Marcos.
After hearing argument and considering the record and authorities cited, the court
granted the defendant's motion and ordered that plaintiffs' first amended complaint
be dismissed with prejudice. An order to that effect was entered on September 22,
1986. This memorandum decision sets forth the reasons for granting the
defendant's motion.

BACKGROUND
Plaintiffs, both Philippine citizens, reside in the State of California. Defendant, also a
Philippine citizen, at present resides in the State of Hawaii. In their first amended
complaint (the "Complaint"), plaintiffs allege that defendant and unnamed aides
and associates violated plaintiffs' rights arising under the First Amendment of the
United States Constitution by seizing and restraining distribution of a film that
plaintiffs produced and directed.
Plaintiffs allege that the film, entitled "100 DAYS IN SEPTEMBER," originally was
endorsed by the Philippine government. Complaint .6. Upon its completion in
1975, however, the plaintiffs allege that the Philippine government, at defendant's
direction, seized the film. Complaint .8. Plaintiffs further allege that repeated
requests for the return of their film were refused, and in fact, that defendant
arranged that plaintiffs be arrested on conspiracy charges. Complaint .9-12.
Plaintiffs then fled the Philippines before they could be arrested. Complaint .13. At
oral argument, counsel informed the court that the film recently had been returned
to plaintiffs and at present is being shown throughout the Philippines.
As a result of defendant's actions, plaintiffs allege that they have suffered general
damages for economic loss in the amount of $100 million; and physical and
emotional damages in the amount of $5 million. Because of the alleged deliberate,
vexatious and malicious nature of defendant's alleged actions, plaintiffs seek
exemplary and punitive damages in the amount of $1 billion, in addition to costs
and attorney's fees.

DISCUSSION
In support of his motion to dismiss, defendant has advanced several theories.
However, because the instant matter may be resolved on either jurisdictional
grounds or by application of the Act of State doctrine, it is not necessary to reach
the issues of Head of State Immunity, Personal Jurisdiction or Forum non
Conveniens.

*278 A. JURISDICTION
The first issue a district court must address is whether it has jurisdiction to hear the
lawsuit. In general, subject matter jurisdiction cannot be waived by the parties to a
federal lawsuit. See, e.g., Sosna v. Iowa, 419 U.S. 393, 95 S. Ct. 553, 42 L. Ed. 2d
532 (1975). The plaintiff must affirmatively allege facts showing the existence of
jurisdiction. Fed.R.Civ.P. 8(a) (1). If these facts are challenged, the burden is on the
party claiming jurisdiction to demonstrate that the court has jurisdiction over the
subject matter. KVOS, Inc. v. Associated Press, 299 U.S. 269, 57 S. Ct. 197, 81 L. Ed.
183 (1936). Unless jurisdiction exists, this court is powerless to afford any remedy
to the plaintiffs.
In the instant action, the plaintiffs asserted only one basis for this court's jurisdiction
in their complaint, i.e., federal question jurisdiction under 28 U.S.C. 1331.
However, in their opposition to defendant's motion, plaintiffs also argue two other
bases for this court's jurisdiction: first, under the diversity of citizenship statute, 28
U.S.C. 1332; and second, under the Alien Tort Claims Act, 28 U.S.C. 1350.
Although plaintiffs have not properly pleaded these latter two theories, the court will
discuss them, for I believe that this court does not have jurisdiction under any of the
theories proffered by the plaintiff.

1. Diversity Jurisdiction
Neither defendant Marcos, nor either of the plaintiffs are citizens of the United
States. For diversity of citizenship jurisdiction to exist under either 28 U.S.C.
1332(a) (1) or 1332(a) (2), at least one of the litigants must be a "citizen" of a State.
A person is a citizen of a State if (1) he or she is domiciled in that State, AND (2) he
or she is a citizen of the United States. Kantor v. Wellesley Galleries, Ltd.,704 F.2d
1088, 1090 (9th Cir. 1983); 13B Wright & Miller, Federal Practice And Procedure 2d
3611, at p. 507.

Since none of the parties to this lawsuit is a citizen of a State there is no diversity of
citizenship jurisdiction.

2. Federal Question Jurisdiction (28 U.S.C. 1331)

In their complaint, the plaintiffs contend that jurisdiction exists in this court because
their First Amendment claim arises "under the Constitution, laws, or treaties of the
United States." 28 U.S.C. 1331. In the instant action, the plaintiffs, citizens of the
Philippines, allege that defendant Marcos violated their First Amendment rights
under the United States Constitution by conduct that occurred entirely within the
Republic of the Philippines when defendant Marcos was President of the Philippines.
The United States Constitution does not apply to foreign officials acting within their
own territory. Stonehill v. United States, 405 F.2d 738, 743 (9th Cir. 1968).
Therefore, plaintiffs' claim does not arise under the Constitution of the United
States.
In addition, plaintiffs fail to allege any treaties of the United States under which
their claim can be said to arise.
Finally, the plaintiffs are correct in asserting that the "laws" of the United States as
defined in 1331 include the Common Law, Illinois v. City of Milwaukee, 406 U.S.
91, 100, 92 S. Ct. 1385, 1391, 31 L. Ed. 2d 712 (1972), and that the Common Law
includes within it the "law of nations."
However, in the instant case, the plaintiffs have not alleged a private cause of
action arising under the law of nations (as I will discuss shortly) that would enable
them to recover against foreign nations for injury to themselves. Moreover, even
where a federal question exists, the lack of a private cause of action, either express
or implied, requires dismissal of the lawsuit. Price v. Hawaii, 764 F.2d 623, 628 (9th
Cir.1985), cert. denied, ___ U.S. ___, 106 S. Ct. 793, 88 L. Ed. 2d 771.
In sum, the inquiry as to jurisdiction under the Alien Tort Claims Act, 28 U.S.C.
1350, necessarily decides, in this case, the issue of federal question jurisdiction.
If *279 Section 1350 confers a cause of action on the plaintiffs, then plaintiffs have
a claim "arising under" Federal law. However, plaintiffs have not successfully raised
any other source of a private cause of action under 1331.
As plaintiffs have not alleged a cause of action under 1350, it follows that under
the facts of this case, jurisdiction does not exist under 1331. In reaching this
conclusion, I have relied on and applied the analysis of Judge Edwards contained at
note 4 in Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 779-780

(D.C.Cir.1984), cert. denied, 470 U.S. 1003, 105 S. Ct. 1354, 84 L. Ed. 2d 377
(1985).

3. Jurisdiction Under The Alien Tort Claims Act

28 U.S.C. 1350 provides:
The district courts shall have original jurisdiction of any civil action by an alien for a
tort only, committed in violation of the law of nations or a treaty of the United
States.
Section 1350 provides a right to an alien, if a tort has been committed against him
or her in violation of a treaty of the United States, or the "law of nations."
In the instant action, as I have already observed, plaintiffs have alleged no treaty of
the United States under which their claim can be said to have arisen. Therefore, if
the plaintiffs are to have a claim under 1350, it must arise under the "law of
nations."
Section 1350 has been in existence since 1789, but it has been described by one
judge as "a kind of Lohengrin; ... no one seems to know whence it came." IIT v.
Vencap, Ltd., 519 F.2d 1001, 1015 (2d Cir. 1975) (J. Friendly). Few courts have
addressed the issue of what constitutes a "law of nations," and there is no
universally accepted definition of this phrase. Dreyfus v. Von Finck, 534 F.2d 24, 3031 (2d Cir.), cert. denied, 429 U.S. 835, 97 S. Ct. 102, 50 L. Ed. 2d 101 (1976).
However, in the IIT case, Judge Friendly, quoting from Lopes v. Reederei Richard
Schroder, 225 F. Supp. 292, 297 (E.D. Pa.1963), posited the following as a "test" to
aid in determining when a violation of the law of nations has occurred:
[A] violation of the law of nations arises only when there has been `a violation by
one or more individuals of those standards, rules or customs (a) affecting the
relationship between states or between an individual and a foreign state, and (b)
used by those states for their common good and/or in dealings inter se.'
IIT, 519 F.2d at 1015.
Subsequently, courts held that the law of nations "deals primarily with the
relationship among nations rather than among individuals,"Dreyfus, supra, 534 F.2d
at 30-31, or that "[i]f a controversy existing between individuals neither involves
internal relations nor impinges upon a nation's exercise of its sovereignty,
jurisdiction will not lie under [ 1350]." Cohen v. Hartman, 634 F.2d 318, 319 (5th
Cir.1981).

However, the Second Circuit in Filartiga v. Pena-Irala, 630 F.2d 876, 880 (1980), in
holding that "an act of torture committed by a state official against one held in
detention violates established norms of the international law of human rights, and
hence the law of nations," qualified the test set out in IIT v. Vencap:
We have no quarrel with this formulation so long as it be understood that the courts
are not to prejudge the scope of the issues that the nations of the world may deem
important to their interrelationships, and thus to their common good.
630 F.2d at 888.
Filartiga provides guidance insofar as it notes that the law of nations should be
interpreted not as it was in 1789, but as it has evolved and exists among the
nations of the world today, Id. at 881, and to the extent that international law today
limits a state's power to torture. Id. at 885. However, there still is no consensus as
to what constitutes a "law of nations."
This conclusion is perhaps best reflected in the District of Columbia's decision
in *280 Tel-Oren, supra, 726 F.2d 774, in which all three judges of the panel wrote
separately.
Despite this absence of consensus, I have relied on the opinion of Judge Edwards
in Tel-Oren in reaching the conclusion that the plaintiffs have failed to assert
conduct that constitutes a violation of the law of nations. Judge Edwards lists some
representative violations of international law that are state-practiced, encouraged or
condoned:
(a) genocide; (b) slavery or slave trade; (c) the murder or causing the
disappearance of individuals; (d) torture or other cruel, inhuman or degrading
treatment or punishment; (e) prolonged arbitrary detention; (f) systematic racial
discrimination; (g) consistent patterns of gross violations of internationally
recognized human rights.
726 F.2d at 781. Although Judge Edwards did not attempt to determine whether
each of these international law violations were indeed violations of the "law of
nations," he did note that "commentators have begun to identify a handful of
heinous actions each of which violates definable, universal, and obligatory norms
[citation omitted] and in the process are defining the limits of section 1350's
reach."Id.[1]

However dearly our country holds First Amendment rights, I must conclude that a
violation of the First Amendment right of free speech does not rise to the level of
such universally recognized rights and so does not constitute a "law of nations."
Accordingly, the plaintiffs cannot assert jurisdiction under 1350. Since the 1350
issue determines the issue of jurisdiction under 1331 (federal question), and I
have already ruled that plaintiffs cannot claim jurisdiction under diversity of
citizenship, 1332, this court does not have subject matter jurisdiction, and the
complaint must be dismissed.

B. ACT OF STATE DOCTRINE

Even if jurisdiction could be asserted under one of the previously discussed
statutory sections, I am convinced that the Act of State doctrine would require the
dismissal of this action.
The Act of State doctrine forbids review by the United States courts of the acts of a
foreign head of State acting in his official capacity.DeRoburt v. Gannett Corp., 733
F.2d 701, 703 (9th Cir.1984), cert. denied, 469 U.S. 1159, 105 S. Ct. 909, 83 L. Ed.
2d 923 (1985).
In order for plaintiffs to assert jurisdiction under the Alien Tort Claims Act, they must
allege that the tortious acts were official acts or acts committed under color of
law. See Filartiga, supra, 630 F.2d 876. Moreover, it appears that plaintiffs' theory of
liability is that Marcos in his capacity as President of the Philippines engaged in a
systematic policy of suppressing rights of free speech in the Philippines. This theory
of recovery requires precisely the type of inquiry in which the federal courts have
refused to engage under the Act of State doctrine. It is beyond the capacity of the
federal courts to subject the official acts or policies of the head of a foreign state to
traditional standards of judicial review.
In sum, even if the plaintiffs had been able to claim jurisdiction, the Act of State
doctrine would preclude this court from hearing the instant lawsuit.
This is not to say that I condone the acts that the plaintiffs have alleged in
their *281 complaint. As I noted earlier, this country, and I myself, hold First
Amendment rights very dearly. Nevertheless, a violation of First Amendment rights
simply does not rise to the level of a violation of a "law of nations." In the instant
case, this court is thrust into the very sensitive area of international law. Reciprocity
is a critical consideration. However much the acts of an official in another country

may offend our sense of what is right, we are constrained to a large extent by the
customs and usages of international law.
ACCORDINGLY, for the foregoing reasons, IT IS HEREBY ORDERED that the
Defendant's Motion to Dismiss is GRANTED.
IT IS SO ORDERED.
NOTES
[1] While there is no consensus on what constitutes a violation of the "law of
nations," in one area there appears to be a consensus. A taking or expropriation of a
foreign national's property by his government is not cognizable under 1350. The
Court in De Sanchez v. Banco Central de Nicaragua, 770 F.2d 1385, 1397 (5th
Cir.1985) stated:
[T]he standards of human rights that have been generally accepted and hence
incorporated into the law of nations are still limited. They encompass only such
basic rights as the right not to be murdered, tortured, or otherwise subjected to
cruel, inhuman or degrading punishment ... At present, the taking by a state of its
national's property does not contravene the international law of minimum human
rights.
In Re Estate of Ferdinand E. Marcos Human Rights Litigation.agapita
Trajano; Archimedes Trajano, Plaintiffs-appellees, v. Ferdinand E. Marcos,
Defendant,andimee Marcos-manotoc, Defendant-appellant, 978 F.2d 493
(9th Cir. 1992)
U.S. Court of Appeals for the Ninth Circuit - 978 F.2d 493 (9th Cir. 1992)
Argued and Submitted June 8, 1992. Decided Oct. 21, 1992
Bernard J. Rothbaum, Jr., Linn & Helms, Oklahoma City, Okl. (argued the case),
Donald C. Smaltz, Smaltz & Anderson, Los Angeles, Cal. (signed the briefs), for
defendant-appellant.
Jon M. Van Dyke, Sherry P. Broder and Lillian Ramirez-Uy, Graulty, Ikeda & RamirezUy, Honolulu, Hawaii, for plaintiffs-appellees.
Ellen Lutz, Los Angeles, Cal., for amicus curiae Human Rights Watch.
Harold Hongju Koh, New Haven, Conn., Michael Ratner, New York City, for amici
curiae Allard K. Lowenstein Intern. Human Rights Clinic and the Center for
Constitutional Rights.
Appeal from the United States District Court for the District of Hawaii.
Before BROWNING, PREGERSON and RYMER, Circuit Judges.

RYMER, Circuit Judge:

After former Philippine President Ferdinand Marcos and his daughter, Imee MarcosManotoc, fled to Hawaii in 1986, they were sued in federal court by Agapita Trajano,
a citizen of the Philippines who then lived in Hawaii, for the torture and wrongful
death of Trajano's son, Archimedes, in the Philippines on August 31, 1977. 1 MarcosManotoc did not appear and a default judgment was entered against her. On appeal,
she contends that the district court lacked subject-matter jurisdiction under the
Alien Tort Statute, 28 U.S.C. 1350, and that the Foreign Sovereign Immunities Act,
28 U.S.C. 1330, 1602-11, does not authorize a federal court to assert jurisdiction,
over actions taken by a foreign government against its own citizens. 2 We have
jurisdiction under 28 U.S.C. 1291, and affirm.
* In August of 1977, Ferdinand Marcos was President of the Philippines, MarcosManotoc was the National Chairman of the Kabataang Baranggay, and Fabian Ver
was in charge of military intelligence. Archimedes Trajano was a student at the
Mapua Institute of Technology. On the 31st of August, Trajano went to an open
forum discussion at which Marcos-Manotoc was speaking. When Trajano asked a
question about her appointment as director of an organization, he was kidnapped,
interrogated, and tortured to death by military intelligence personnel who were
acting under Ver's direction, pursuant to martial law declared by Marcos, and under
the authority of Ver, Marcos, and Marcos-Manotoc. He was tortured and murdered
for his political beliefs and activities. Marcos-Manotoc controlled the police and
military intelligence personnel who tortured and murdered Trajano, knew they were
taking him to be tortured, and caused Trajano's death.
In February of 1986, Marcos, Marcos-Manotoc, General Ver and others left the
Philippines and arrived at Hickam Air Force Base in Hawaii. On March 20, 1986,
Agapita Trajano filed her complaint in the United States District Court for the District
of Hawaii.3 The complaint seeks damages on behalf of the estate of Archimedes
Trajano for false imprisonment, kidnapping, wrongful death, and a deprivation of
rights, and on behalf of Trajano's mother for emotional distress. Default was entered
against Marcos-Manotoc on May 29, 1986. In 1991, she moved to set aside entry of
default on the ground of insufficiency of service. The motion was denied and, after a
damages hearing, judgment was entered based on the court's findings that Trajano
was tortured and his death was caused by Marcos-Manotoc. The court concluded
that this violation of fundamental human rights constitutes a tort in violation of the

law of nations under 28 U.S.C. 1350, and awarded damages of $4.16 million and
attorneys' fees pursuant to Philippine law. 4
II
We must first determine whether Marcos-Manotoc is entitled to immunity under the
Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. 1330, 1602-11. The FSIA
"must be applied by the district courts in every action against a foreign sovereign,
since subject-matter jurisdiction in any such action depends on the existence of one
of the specified exceptions to foreign sovereign immunity." Verlinden B.V. v. Central
Bank of Nigeria, 461 U.S. 480, 493, 103 S. Ct. 1962, 1971, 76 L. Ed. 2d 81 (1983);
see also Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 109 S.
Ct. 683, 102 L. Ed. 2d 818 (1989); Liu v. Republic of China, 892 F.2d 1419, 1424 (9th
Cir. 1989), cert. dismissed, 497 U.S. 1058, 111 S. Ct. 27, 111 L. Ed. 2d 840 (1990). A
"foreign state" under the Act includes "an agency or instrumentality of a foreign
state." 28 U.S.C. 1603(a).5 We have, in turn, held that an "agency or
instrumentality of a foreign state" for purposes of the FSIA includes individuals
acting in their official capacity. Chuidian v. Philippine Nat'l Bank, 912 F.2d 1095,
1099-1103 (9th Cir. 1990). Therefore, because Marcos-Manotoc's default concedes
that she controlled the military police, the FSIA is implicated and we must be
satisfied that it does not bar jurisdiction, even though the issue was not raised in
the district court.
Marcos-Manotoc argues that the FSIA is the sole basis for jurisdiction, preempting all
other bases including 1350. She relies on Amerada Hess, in which two Liberian
corporations sued the Argentine Republic in a United States District Court for a tort
allegedly committed by its armed forces on the high seas in violation of
international law. The court of appeals had allowed the action to proceed under the
Alien Tort Statute, but the Supreme Court held that it should be dismissed because
the FSIA controls and does not authorize jurisdiction over a foreign state in these
circumstances.6 The Court made clear that the FSIA is the "sole basis for obtaining
jurisdiction over a foreign state in our courts." 488 U.S. at 434, 109 S. Ct. at 688;
see also Liu, 892 F.2d at 1424. Thus, the FSIA trumps the Alien Tort Statute when a
foreign state or, in this circuit, an individual acting in her official capacity, is sued.
Marcos-Manotoc argues that the Philippine Military Intelligence is an
"instrumentality" of a foreign state within 1603(b) of the FSIA, and that the
tortious acts were brought about by persons acting pursuant to the authority of
Marcos, Marcos-Manotoc, and Ver such that the liability of Marcos-Manotoc is
expressly premised on her authority as a government agent. She further contends

that, regardless of whether she acted within the scope of her employment, she is
entitled to absolute immunity under 16047 because a foreign state and its agents
lose sovereign immunity only for tortious acts occurring in the United States. See
McKeel v. Islamic Republic of Iran, 722 F.2d 582, 588 (9th Cir. 1983) (Congress did
not intend to assert jurisdiction over foreign states for events occurring wholly
within their own territory), cert. denied, 469 U.S. 880, 105 S. Ct. 243, 83 L. Ed. 2d
182 (1984). Trajano, on the other hand, argues that under Chuidian, the FSIA does
not immunize acts of individuals which are outside the scope of their official
duties,8 and that the acts of torture and arbitrary killing (which the complaint avers
occurred under Marcos-Manotoc's own authority) cannot be "official acts" within
whatever authority Marcos-Manotoc was given by the Republic of the Philippines.
In Chuidian, we held that the FSIA covers a foreign official acting in an official
capacity, but that an official is not entitled to immunity for acts which are not
committed in an official capacity (such as selling personal property), and for acts
beyond the scope of her authority (for example, doing something the sovereign has
not empowered the official to do). 912 F.2d at 1106. In McKeel, in construing
1605(a) (5) of the FSIA, which waives immunity for damages against a foreign state
for injury occurring in the United States,9 we found that Congress intended the FSIA
to be consistent with international law--and that the prevailing practice in
international law is "that a state loses its sovereign immunity for tortious acts only
where they occur in the territory of the forum state." 722 F.2d at 588.
Marcos-Manotoc's default makes the application of both cases easy in this case, for
she has admitted acting on her own authority, not on the authority of the Republic
of the Philippines.10 Under these circumstances, her acts cannot have been taken
within any official mandate and therefore cannot have been acts of an agent or
instrumentality of a foreign state within the meaning of the FSIA. On any view, FSIA
coverage under Chuidian is not triggered, and the statutory limitation to injury
occurring in the United States recognized in McKeel is not relevant. As a matter of
law, therefore, the district court did not err in failing to dismiss Marcos-Manotoc in
her individual capacity.11
III
Absent jurisdiction under the Foreign Sovereign Immunities Act, 12 there is no
dispute that the only possible jurisdictional basis for Trajano's action is the Alien Tort
Statute, 28 U.S.C. 1350. Section 1350 provides:

The district courts shall have original jurisdiction of any civil action by an alien for a
tort only, committed in violation of the law of nations or a treaty of the United
States.
It was enacted as part of the First Judiciary Act of 1789, 13 but has seldom been
invoked. The debates that led to the Act's passage contain no reference to the Alien
Tort Statute, and there is no direct evidence of what the First Congress intended it to
accomplish. The statute has, however, been comprehensively analyzed by the
Second Circuit in Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980), which
recognized a cause of action and subject-matter jurisdiction under 1350 in an
action between Paraguayan citizens for acts of torture committed in Paraguay, and
by the District of Columbia Circuit in Tel-Oren v. Libyan Arab Republic, 726 F.2d 774
(D.C. Cir. 1984) (Judges Edwards, Bork, and Robb writing separately), cert. denied,
470 U.S. 1003, 105 S. Ct. 1354, 84 L. Ed. 2d 377 (1985), which affirmed dismissal
for lack of subject-matter jurisdiction of an action by Israeli citizens against the
Palestine Liberation Organization for acts of terrorism in violation of international
law.
We start with the face of the statute. It requires a claim by an alien, a tort, and a
violation of international law. Trajano's complaint alleges that she and her son were
citizens of the Philippines, and that her claims for relief arise under wrongful death
statutes and various international declarations. 14
There is no doubt, as the district court found, that causing Trajano's death was
wrongful, and is a tort.15 Nor, in view of Marcos-Manotoc's default, is there any
dispute that Trajano's death was caused by torture. And, as we have recently held,
"it would be unthinkable to conclude other than that acts of official torture violate
customary international law." Siderman de Blake v. Republic of Argentina, 965 F.2d
699, 717 (9th Cir. 1992).
We believe, therefore, that Trajano's suit as an alien for the tort of wrongful death,
committed by military intelligence officials through torture prohibited by the law of
nations, is within the jurisdictional grant of 1350.
Marcos-Manotoc argues, however, that the district court erred in assuming
jurisdiction of a tort committed by a foreign state's agents against its nationals
outside of the United States, and having no nexus to this country. If 1350 were
construed to confer jurisdiction under these circumstances, she asserts, it would
exceed the constitutional limits on federal court jurisdiction under Article III of the
Constitution. We disagree.

* Marcos-Manotoc argues that there is no extraterritorial jurisdiction over civil

actions based on torture. She urges that Filartiga has been undermined by
intervening acts of the legislative and executive branches which indicate that the
United States is not obliged to open its courts for the redress of torture occurring in
another country. First, Marcos-Manotoc points to the fact that when the Senate
ratified the United Nations Convention Against Torture and Other Cruel, Inhuman or
Degrading Treatment or Punishment, G.A. Res. 39/46, 39 U.N. GAOR Supp. No. 51 at
197, U.N. Doc. A/RES/39/708 (1984), reprinted in 23 I.L.M. 1027 (1984), it attached
an understanding to Article 1416 that a state is required to provide a private right of
action only for torture committed in territory under its jurisdiction. 17 From this she
infers that it is inappropriate to rely on principles of international law to give victims
of torture enforcement rights outside their own country. Nothing in the
understanding, however, goes so far. Even if it could be read to reach transitory
torts such as wrongful death, the understanding does not prohibit the United States
from providing a forum for claims by aliens for torture occurring elsewhere. 18 The
understanding, accordingly, sheds little light on the scope of 1350.
The same is true of the fact that the Department of Justice has changed its position
on whether a plaintiff such as Trajano has a cause of action cognizable in federal
court for a violation of international law condemning torture. Marcos-Manotoc notes
that the government urged the court in Filartiga to read 1350 expansively, while
its amicus brief in this action supports a cause of action only for violations of
international law rights which form a part of the law of the United States. MarcosManotoc suggests that the executive branch's withdrawal of support for Filartiga
and the Senate's refusal to obligate federal courts to hear actions such as Trajano's
demonstrate that the United States does not recognize a private right of action for
torture having no nexus with the United States. We do not read the executive
branch's flip on this issue as signifying so much; its change of position in different
cases and by different administrations is not a definitive statement by which we are
bound on the limits of 1350. Rather, we are constrained by what 1350 shows on
its face: no limitations as to the citizenship of the defendant, or the locus of the
injury.
Nor do these acts by the Senate and the Department of Justice support MarcosManotoc's argument that general principles of international law may not provide a
basis for federal court jurisdiction under 1350. Regardless of the extent to which
other principles may appropriately be relied upon, the prohibition against official
torture "carries with it the force of a jus cogens norm," which " 'enjoy [s] the highest

status within international law.' " Siderman, 965 F.2d at 715, 717 (quoting
Committee of U.S. Citizens Living in Nicaragua v. Reagan, 859 F.2d 929, 940 (D.C.
Cir. 1988)). As our survey of the scholarly and judicial opinion in Siderman reflects,
there is widespread agreement on this; "all states believe [torture] is wrong, all that
engage in torture deny it, and no state claims a sovereign right to torture its own
citizens. Under international law, any state that engages in official torture violates
jus cogens." Siderman at 717 (citations omitted). We therefore conclude that the
district court did not err in founding jurisdiction on a violation of the jus cogens
norm prohibiting official torture.
Marcos-Manotoc finally argues that the district court's interpretation of 1350 would
open the floodgates to "foreign" cases in the federal courts. She also suggests that,
contrary to the original purpose behind 1350, to permit cases of this sort would
invite, rather than avoid, controversy with foreign nations. We do not share these
concerns in this case. As Siderman makes clear, the prohibition against official
torture occupies a uniquely high status among norms of international law. The
Philippine government has no objection to a United States District Court's
entertaining Trajano's claim, so there can be no unwarranted interference with its
domestic affairs. The FSIA, with its limitation on tort recovery to injuries occurring in
the United States, will apply in almost all other situations. And, because of MarcosManotoc's default, traditional brakes on access to the federal courts by those having
insufficient nexus to the United States were not considered. Such limitations as
venue and the doctrine of forum non conveniens are available in 1350 cases as in
any other. Finally, it goes without saying that personal jurisdiction must first be
obtained; one hopes the universe of potential defendants is not that large.
For these reasons, subject-matter jurisdiction was not inappropriately exercised
under 1350 even though the actions of Marcos-Manotoc which caused a fellow
citizen to be the victim of official torture and murder occurred outside of the United
States.
B
Marcos-Manotoc argues that Article III of the United States Constitution does not
support jurisdiction over purely foreign disputes such as Trajano's claim against her.
Of the nine categories of federal judicial power defined in Article III, only two
arguably authorize jurisdiction in this case: the Foreign Diversity Clause, 19 which
enables the federal courts to hear cases between a state, or its citizens, and a
foreign country or its citizens, and the "Arising Under" Clause, 20 which extends the
judicial power to cases arising under the Constitution, laws of the United States, and

treaties. It is clear that jurisdiction may not be predicated on the Foreign Diversity
Clause, as a foreign plaintiff is neither "a State [n]or the Citizen [ ] thereof." MarcosManotoc contends that jurisdiction under the "Arising Under" Clause equally violates
Article III because 1350 is purely a jurisdictional statute and for "arising under"
jurisdiction to exist, the rights of the parties must turn on the interpretation of
federal substantive law. We agree that a jurisdictional statute may not alone confer
jurisdiction on the federal courts, and that the rights of the parties must stand or fall
on federal substantive law to pass constitutional muster. Mesa v. California, 489 U.S.
121, 136-37, 109 S. Ct. 959, 968-69, 103 L. Ed. 2d 99 (1989) (naked jurisdictional
statutes "cannot independently support Art. III 'arising under' jurisdiction");
Verlinden, 461 U.S. at 495-97, 103 S. Ct. at 1972-73. We disagree that the rights of
Trajano and Marcos-Manotoc do not depend on federal substantive law.
As we have already done, a federal court adjudicating a claim against a foreign
state or official, Chuidian, 912 F.2d at 1103, must determine as a threshold matter
whether the FSIA provides subject-matter jurisdiction. Verlinden, 461 U.S. at 493-94,
103 S. Ct. at 1971; Siderman, 965 F.2d at 706; Liu, 892 F.2d at 1424. In Verlinden, a
foreign plaintiff sued an instrumentality of a foreign sovereign on a nonfederal
cause of action; subject-matter jurisdiction was predicated on the FSIA. The Court
held that Congress, in passing the FSIA, did not "exceed [ ] the scope of Art. III of
the Constitution by granting federal courts subject-matter jurisdiction over certain
civil actions by foreign plaintiffs against foreign sovereigns where the rule of
decision may be provided by state law." Id. 461 U.S. at 491, 103 S. Ct. at 1970.
Because federal courts must first determine whether foreign sovereigns or
individual officials are immune before allowing suits against them to proceed, "a suit
against a foreign state under [the FSIA] necessarily raises questions of substantive
federal law at the very outset, and hence clearly 'arises under' federal law, as that
term is used in Art. III." Id. at 493, 103 S. Ct. at 1971. The Court also emphasized
that " [a]ctions against foreign sovereigns in our courts raise sensitive issues
concerning the foreign relations of the United States, and the primacy of federal
concerns is evident." Id.
For the same reasons, Congress did not lack power to confer subject-matter
jurisdiction over this action. Only individuals who have acted under official authority
or under color of such authority may violate international law, Tel-Oren, 726 F.2d at
791-95 (Edwards, J., concurring) (rejecting notion that purely private actors have
responsibilities under international law), and proceeding against such individuals
necessarily implicates sovereign immunity. Although Marcos-Manotoc's default

concedes that she controlled the military intelligence personnel who tortured and
murdered Trajano, and in turn that she was acting under color of the martial law
declared by then-President Marcos, we have concluded that her actions were not
those of the Republic of the Philippines for purposes of sovereign immunity under
Chuidian.21 Nevertheless, when questions of sovereign immunity under the FSIA are
raised, as they have been here, Verlinden controls. Under Verlinden, subject-matter
jurisdiction over this action satisfies Article III.
Marcos-Manotoc argues that the understanding attached by the Senate to Article 14
of the 1984 Convention--that the United States does not have to provide a forum for
the redress of extraterritorial acts of torture--negates any constitutional
underpinning for "arising under" jurisdiction because Congress has rejected
application of federal court jurisdiction to such claims. This would, however, turn the
point of Article III power upside down. It does not derive from the Senate, nor even
the Congress; rather, the Congress derives its capacity to confer jurisdiction from
the Constitution.
The "Arising Under" Clause of Article III is construed differently, and more broadly,
than the "arising under" requirement for federal question jurisdiction under 28
U.S.C. 1331. See Verlinden, 461 U.S. at 495, 103 S. Ct. at 1972 ("Art. III 'arising
under' jurisdiction is broader than federal-question jurisdiction under 1331."); id. ("
[T]he many limitations which have been placed on jurisdiction under 1331 are not
limitations on the constitutional power of Congress to confer jurisdiction on the
federal courts.") (quoting Romero v. International Terminal Operating Co., 358 U.S.
354, 379 n. 51, 79 S. Ct. 468, 484 n. 51, 3 L. Ed. 2d 368 (1959)); cf. Brannon v.
Babcock & Wilcox Co. (In re TMI Litigation Cases Consolidated II), 940 F.2d 832, 861,
864-77 (3d Cir. 1991) (Scirica, J., concurring) (discussing differences between
constitutional and statutory grants of "arising under" jurisdiction), cert. denied, --U.S. ----, 112 S. Ct. 1262, 117 L. Ed. 2d 491 (1992). There is ample indication that
the "Arising Under" Clause was meant to extend the judicial power of the federal
courts, as James Madison put it, to "all cases which concern foreigners," Letter from
James Madison to Edmund Randolph (April 8, 1787), reprinted in 9 The Papers of
James Madison 368, 370 (R. Rutland & W. Rachal ed. 1975), and "all occasions of
having disputes with foreign powers," 3 The Debates in the Several State
Conventions on the Adoption of the Federal Constitution 530 (J. Elliot ed. 1836)
(remarks of J. Madison), and, as Alexander Hamilton wrote, to "all those [cases] in
which [foreigners] are concerned...." The Federalist No. 80, at 536 (A. Hamilton) (J.
Cooke ed. 1961). It is also well settled that the law of nations is part of federal

common law. See The Paquete Habana, 175 U.S. 677, 700, 20 S. Ct. 290, 299, 44 L.
Ed. 320 (1900) ("International law is part of our law, and must be ascertained and
administered by the courts of justice of appropriate jurisdiction, as often as
questions of right depending upon it are duly presented for their determination.");
United States v. Smith, 18 U.S. (5 Wheat.) 153, 160-61, 5 L. Ed. 57 (1820) (same).
Thus, in addition to resolving the defendant's immunity, for a court to determine
whether a plaintiff has a claim for a tort committed in violation of international law,
it must decide whether there is an applicable norm of international law, whether it is
recognized by the United States, what its status is, and whether it was violated in
the particular case. We therefore hold that Congress had power through the "Arising
Under" Clause of Article III of the Constitution to enact the Alien Tort Statute, and
that exercising jurisdiction over Trajano's claims against Marcos-Manotoc comports
with Article III.
IV
At most, Marcos-Manotoc argues, the district court had jurisdiction under 1350 to
determine whether Trajano had a separate, substantive cause of action; none exists,
she contends, because neither the treaties set out in the complaint nor the law of
nations provides a private cause of action. 22 Thus, to the extent the court's decision
relies upon either treaties or international law, Marcos-Manotoc submits it is
erroneous.
The district court in fact agreed with Marcos-Manotoc that 1350 is simply a
jurisdictional statute and creates no cause of action itself. It proceeded to determine
damages on default under Philippine law. From this we assume that the court did
not rely on treaties or international law to provide the cause of action, only to
establish federal jurisdiction. Indeed, the complaint alleges that Trajano's claims
arise under wrongful death statutes, as well as international law. Since MarcosManotoc's appeal is only to the extent the district court founded Trajano's right to
sue on treaties or the law of nations, it lacks merit because the tort is admitted.
That it was committed in violation of international law supplies the jurisdictional key
to federal court under 1350. We cannot say the district court erred.
The district court's approach comports with the view that the First Congress enacted
the predecessor to 1350 to provide a federal forum for transitory torts (a tort
action which follows the tortfeasor wherever he goes), see Filartiga, 630 F.2d at 885
(tracing transitory tort doctrine to 1774 decision of Lord Mansfield), whenever such
actions implicate the foreign relations of the United States. See Banco Nacional de
Cuba v. Sabbatino, 376 U.S. 398, 427 n. 25, 84 S. Ct. 923, 940 n. 25, 11 L. Ed. 2d

804 (1964) (citing 1350 as example of congressional intent to make claims

implicating foreign affairs cognizable in federal courts); Tel-Oren, 726 F.2d at 790
(Edwards, J., concurring) ("As best we can tell, the aim of section 1350 was to place
in federal court actions potentially implicating foreign affairs. The intent was not to
provide a forum that otherwise would not exist ... but to provide an alternative
forum to state courts."). The district court's approach also allows the "law of
nations" and "treaty" prongs of 1350 to be treated consistently, in that the cause
of action comes from municipal tort law and not from the law of nations or treaties
of the United States. This avoids the anomalous result which troubled Judge Bork in
Tel-Oren, that whereas Filartiga found a private right of action by implying it from
principles of international law, no private cause of action can ever be implied from a
non-self-executing treaty. See Tel-Oren, 726 F.2d at 820 (Bork, J., concurring).
For these reasons we affirm the judgment in Trajano's favor. Her suit as an alien
against Marcos-Manotoc for having caused the wrongful death of her son, by official
torture in violation of a jus cogens norm of international law, properly invokes the
subject-matter jurisdiction of the federal courts under 1350.
AFFIRMED.
G.R. No. L-28882 May 31, 1971
TIME, INC., petitioner,
vs.
HON. ANDRES REYES, as Judge of the Court of First Instance of Rizal,
ELISEO S. ZARI, as Deputy Clerk of Court, Branch VI, Court of First
Instance of Rizal, ANTONIO J. VILLEGAS and JUAN PONCE
ENRILE,respondents.
Sycip, Salazar, Luna, Manalo & Feliciano for petitioner.
Angel C. Cruz Law Office for respondents.

REYES, J.B.L., J.:

Petition for certiorari and prohibition, with preliminary injunction, to annul certain
orders of the respondent Court of First Instance of Rizal, issued in its Civil Case No.
10403, entitled "Antonio J. Villegas and Juan Ponce Enrile vs. Time, Inc., and TimeLife International, Publisher of 'Time' Magazine (Asia Edition)", and to prohibit the
said court from further proceeding with the said civil case.

Upon petitioner's posting a bond of P1,000.00, this Court, as prayed for, ordered, on
15 April 1968, the issuance of a writ of preliminary injunction.
The petition alleges that petitioner Time, Inc., 1 is an American corporation with
principal offices at Rocketfeller Center, New York City, N. Y., and is the publisher of
"Time", a weekly news magazine; the petition, however, does not allege the
petitioner's legal capacity to sue in the courts of the Philippine. 2
In the aforesaid Civil Case No. 10403, therein plaintiffs (herein respondents) Antonio
J. Villegas and Juan Ponce Enrile seek to recover from the herein petitioner damages
upon an alleged libel arising from a publication of Time (Asia Edition) magazine, in
its issue of 18 August 1967, of an essay, entitled "Corruption in Asia", which, in part,
reads, as follows:
The problem of Manila's mayor, ANTONIO VILLEGAS, is a case in point.
When it was discovered last year that the mayor's coffers contained far
more pesos than seemed reasonable in the light of his income, an
investigation was launched. Witnesses who had helped him out under
curious circumstance were asked to explain in court. One government
official admitted lending Villegas P30,000 pesos ($7,700) without
interest because he was the mayor's compadre. An assistant declared
he had given Villegas loans without collateral because he regarded the
boss as my own son. A wealthy Manila businessman testified that he
had lent Villegas' wife 15,000 pesos because the mayor was like a
brother to me. With that, Villegas denounced the investigation as an
invasion of his family's privacy. The case was dismissed on a
technicality, and Villegas is still mayor. 3
More specifically, the plaintiffs' complaint alleges, inter alia that:
(4) Defendants, conspiring and confederating, published a libelous
article, publicly, falsely and maliciously imputing to Plaintiffs the
commission of the crimes of graft, corruption and nepotism; that said
publication particularly referred to Plaintiff Mayor Antonio J. Villegas as
a case in point in connection with graft, corruption and nepotism in
Asia; that said publication without any doubt referred to co-plaintiff
Juan Ponce Enrile as the high government official who helped under
curious circumstances Plaintiff Mayor Antonio J. Villegas in lending the
latter approximately P30,000.00 ($7,700.00) without interest because
he was the Mayor's compadre; that the purpose of said Publications is
to cause the dishonor, discredit and put in public contempt the
Plaintiffs, particularly Plaintiff Mayor Antonio J. Villegas.
On motion of the respondents-plaintiffs, the respondent judge, on 25 November
1967, granted them leave to take the depositions "of Mr. Anthony Gonzales, TimeLife international", and "Mr. Cesar B. Enriquez, Muller & Phipps (Manila) Ltd.", in

connection with the activities and operations in the Philippines of the petitioner,
and, on 27 November 1967, issued a writ of attachment on the real and personal
estate of Time, Inc.
Petitioner received the summons and a copy of the complaint at its offices in New
York on 13 December 1967 and, on 27 December 1967, it filed a motion to dismiss
the complaint for lack of jurisdiction and improper venue, relying upon the
provisions of Republic Act 4363. Private respondents opposed the motion.
In an order dated 26 February 1968, respondent court deferred the determination of
the motion to dismiss until after trial of the case on the merits, the court having
considered that the grounds relied upon in the motion do not appear to be
indubitable.
Petitioner moved for reconsideration of the deferment private respondents again
opposed.
On 30 March 1968, respondent judge issued an order re-affirming the previous order
of deferment for the reason that "the rule laid down under Republic Act. No. 4363,
amending Article 360 of the Revised Penal Code, is not applicable to actions against
non-resident defendants, and because questions involving harassment and
inconvenience, as well as disruption of public service do not appear indubitable. ..."
Failing in its efforts to discontinue the taking of the depositions, previously adverted
to, and to have action taken, before trial, on its motion to dismiss, petitioner filed
the instant petition for certiorari and prohibition.
The orders for the taking of the said depositions, for deferring determination of the
motion to dismiss, and for reaffirming the deferment, and the writ of attachment are
sought to be annulled in the petition..
There is no dispute that at the time of the publication of the allegedly offending
essay, private respondents Antonio Villegas and Juan Ponce Enrile were the Mayor
Of the City of Manila and Undersecretary of Finance and concurrently Acting
Commissioner of Customs, respectively, with offices in the City of Manila. The issues
in this case are:
1. Whether or not, under the provisions of Republic Act No. 4363 the respondent
Court of First Instance of Rizal has jurisdiction to take cognizance of the civil suit for
damages arising from an allegedly libelous publication, considering that the action
was instituted by public officers whose offices were in the City of Manila at the time
of the publication; if it has no jurisdiction, whether or not its erroneous assumption
of jurisdiction may be challenged by a foreign corporation by writ of certiorari or
prohibition; and

2. Whether or not Republic Act 4363 is applicable to action against a foreign

corporation or non-resident defendant.
Provisions of Republic Act No. 4363, which are relevant to the resolution of the
foregoing issues, read, as follows:
Section 1. Article three hundred sixty of the Revised Penal Code, as
amended by Republic Act Numbered Twelve hundred and eighty-nine,
is further amended to read as follows:
'ART. 360. Persons responsible. Any person who shall
publish, exhibit, or cause the publication or exhibition of
any defamation in writing or by similar means, shall be
responsible for the same.
The author or editor of a book or pamphlet, or the editor or business
manager of a daily newspaper, magazine or serial publication, shall be
responsible for the defamations contained therein to the extent as if he
were the author thereof.
The criminal and civil action for damages in cases of written
defamations as provided for in this chapter, shall be filed
simultaneously or separately with the court of first instance of the
province or city where the libelous article is printed and first published
or where any of the offended parties actually resides at the time of the
commission of the offense; Provided, however, That where one of the
offended parties is a public officer whose office is in the City of Manila
at the time of the commission of the offense, the action shall be filed in
the Court of First Instance of the City of Manila or of the city or
province where the libelous article is printed and first published, and in
case such public officer does not hold office in the City of Manila, the
action shall be filed in the Court of First Instance of the province or city
where he held office at the time of the commission of the offense or
where the libelous article is printed and first published and in case one
of the offended parties is a private individual, the action shall be filed
in the Court of First Instance of the province or city where he actually
resides at the time of the commission of the offense or where the
libelous matter is printed and first published; Provided, further, That
the civil action shall be filed in the same court where the criminal
action is filed and vice versa; Provided, furthermore, That the court
where the criminal action or civil action for damages is first filed, shall
acquire jurisdiction to the exclusion of other courts; And provided
finally, That this amendment shall not apply to cases of written
defamations, the civil and/or criminal actions which have been filed in
court at the time of the effectivity of the law

xxx xxx xxx

xxx xxx xxx
Sec. 3. This Act shall take effect only if and when, within thirty days
from its approval, the newspapermen in the Philippines shall organize,
and elect the members of, a Philippine Press Council, a private agency
of the said newspapermen, whose function shall be to promulgate a
Code of Ethics for them and the Philippine press investigate violations
thereof, and censure any newspaperman or newspaper guilty of any
violation of the said Code, and the fact that such Philippine Press
Council has been organized and its members have been duly elected in
accordance herewith shall be ascertained and proclaimed by the
President of the Philippines.
Under the first proviso in section 1, the venue of a civil action for damages in cases
of written defamations is localized upon the basis of, first, whether the offended
party or plaintiff is a public officer or a private individual; and second, if he is a
public officer, whether his office is in Manila or not in Manila, at the time of the
commission of the offense. If the offended party is a public officer in the office in the
City of Manila, the proviso limits him to two (2) choices of venue, namely, in the
Court of First instance of the City of Manila or in the city or province where the
libelous article is printed and first published ..."
The complaint lodged in the court of Rizal by respondents does not allege that the
libelous article was printed and first published in the province of Rizal and, since the
respondents-plaintiffs are public officers with offices in Manila at the time of the
commission of the alleged offense, it is clear that the only place left for them
wherein to file their action, is the Court of First Instance of Manila.
The limitation of the choices of venue, as introduced into the Penal Code through its
amendments by Republic Act 4363, was intended "to minimize or limit the filing of
out-of-town libel suits" to protect an alleged offender from "hardships,
inconveniences and harassments" and, furthermore, to protect "the interest of the
public service" where one of the offended parties is a public officer." 4 The intent, of
the law is clear: a libeled public official might sue in the court of the locality where
he holds office, in order that the prosecution of the action should interfere as little
as possible with the discharge of his official duties and labors. The only alternative
allowed him by law is to prosecute those responsible for the libel in the place where
the offending article was printed and first published. Here, the law tolerates the
interference with the libeled officer's duties only for the sake of avoiding
unnecessary harassment of the accused. Since the offending publication was not
printed in the Philippines, the alternative venue was not open to respondent Mayor
Villegas of Manila and Undersecretary of Finance Enrile, who were the offended
parties.

But respondents-plaintiffs argue that Republic Act No. 4363 is not applicable where
the action is against non-existent defendant, as petitioner Time, Inc., for several
reasons. They urge that, in enacting Republic Act No. 4363, Congress did not intend
to protect non-resident defendants as shown by Section 3, which provides for the
effectivity of the statute only if and when the "newspapermen in the Philippines"
have organized a "Philippine Press Council" whose function shall be to promulgate a
Code of Ethics for "them" and "the Philippine press"; and since a non-resident
defendant is not in a position to comply with the conditions imposed for the
effectivity of the statute, such defendant may not invoke its provisions; that a
foreign corporation is not inconvenienced by an out-of-town libel suit; that it would
be absurd and incongruous, in the absence of an extradition treaty, for the law to
give to public officers with office in Manila the second option of filing a criminal case
in the court of the place where the libelous article is printed and first published if
the defendant is a foreign corporation and that, under the "single publication" rule
which originated in the United States and imported into the Philippines, the rule was
understood to mean that publications in another state are not covered by venue
statutes of the forum.
The implication of respondents' argument is that the law would not take effect as to
non-resident defendants or accused. We see nothing in the text of the law that
would sustain such unequal protection to some of those who may be charged with
libel. The official proclamation that a Philippine Press Council has been organized is
made a pre-condition to the effectivity of the entire Republic Act No. 4363, and no
terms are employed therein to indicate that the law can or will be effective only as
to some, but not all, of those that may be charged with libeling our public officers.
The assertion that a foreign corporation or a non-resident defendant is not
inconvenienced by an out-of-town suit is irrelevant and untenable, for venue and
jurisdiction are not dependent upon convenience or inconvenience to a party; and
moreover, venue was fixed under Republic Act No. 4363, pursuant to the basic
policy of the law that is, as previously stated, to protect the interest of the public
service when the offended party is a public officer, by minimizing as much as
possible any interference with the discharge of his duties.
That respondents-plaintiffs could not file a criminal case for libel against a nonresident defendant does not make Republic Act No. 4363 incongruous of absurd, for
such inability to file a criminal case against a non-resident natural person equally
exists in crimes other than libel. It is a fundamental rule of international jurisdiction
that no state can by its laws, and no court which is only a creature of the state, can
by its judgments or decrees, directly bind or affect property or persons beyond the
limits of the state. 5 Not only this, but if the accused is a corporation, no criminal
action can lie against it, 6 whether such corporation or resident or non-resident. At
any rate, the case filed by respondents-plaintiffs is case for damages.
50 Am. Jur. 2d 659 differentiates the "multiple publication" and "single publication"
rules (invoked by private respondents) to be as follows:

The common law as to causes of action for tort arising out of a single
publication was to the effect that each communication of written or
printed matter was a distinct and separate publication of a libel
contained therein, giving rise to a separate cause of action. This rule
('multiple publication' rule) is still followed in several American
jurisdictions, and seems to be favored by the American Law Institute.
Other jurisdictions have adopted the 'single publication' rule which
originated in New York, under which any single integrated publication,
such as one edition of a newspaper, book, or magazine, or one
broadcast, is treated as a unit, giving rise to only one cause of action,
regardless of the number of times it is exposed to different people. ...
These rules are not pertinent in the present scheme because the number of causes
of action that may be available to the respondents-plaintiffs is not here in issue. We
are here confronted by a specific venue statute, conferring jurisdiction in cases of
libel against Public officials to specified courts, and no other. The rule is that where
a statute creates a right and provides a remedy for its enforcement, the remedy is
exclusive; and where it confers jurisdiction upon a particular court, that jurisdiction
is likewise exclusive, unless otherwise provided. Hence, the venue provisions of
Republic Act No. 4363 should be deemed mandatory for the party bringing the
action, unless the question of venue should be waived by the defendant, which was
not the case here. Only thus can the policy of the Act be upheld and maintained.
Nor is there any reason why the inapplicability of one alternative venue should
result in rendering the other alternative, also inapplicable.
The dismissal of the present petition is asked on the ground that the petitioner
foreign corporation failed to allege its capacity to sue in the courts of the
Philippines. Respondents rely on section 69 of the Corporation law, which provides:
SEC. 69. No foreign corporation or corporations formed, organized, or
existing under any laws other than those of the Philippines shall be
permitted to ... maintain by itself or assignee any suit for the recovery
of any debt, claim, or demand whatever, unless it shall have the
license prescribed in the section immediately preceding. ..." ...;
They also invoke the ruling in Marshall-Wells Co. vs. Elser & Co., Inc. 7 that no
foreign corporation may be permitted to maintain any suit in the local courts unless
it shall have the license required by the law, and the ruling in Atlantic Mutual Ins.
Co., Inc. vs. Cebu Stevedoring Co., Inc. 8 that "where ... the law denies to a foreign
corporation the right to maintain suit unless it has previously complied with a
certain requirement, then such compliance or the fact that the suing corporation is
exempt therefrom, becomes a necessary averment in the complaint." We fail to see
how these doctrines can be a propos in the case at bar, since the petitioner is not
"maintaining any suit" but is merely defending one against itself; it did not file any
complaint but only a corollary defensive petition to prohibit the lower court from
further proceeding with a suit that it had no jurisdiction to entertain.

Petitioner's failure to aver its legal capacity to institute the present petition is not
fatal, for ...
A foreign corporation may, by writ of prohibition, seek relief against the
wrongful assumption of jurisdiction. And a foreign corporation seeking
a writ of prohibition against further maintenance of a suit, on the
ground of want of jurisdiction in which jurisdiction is not bound by the
ruling of the court in which the suit was brought, on a motion to quash
service of summons, that it has jurisdiction. 9
It is also advanced that the present petition is premature, since respondent court
has not definitely ruled on the motion to dismiss, nor held that it has jurisdiction,
but only argument is untenable. The motion to dismiss was predicated on the
respondent court's lack of jurisdiction to entertain the action; and the rulings of this
Court are that writs of certiorari or prohibition, or both, may issue in case of a denial
or deferment of action on such a motion to dismiss for lack of jurisdiction.
If the question of jurisdiction were not the main ground for this petition
for review by certiorari, it would be premature because it seeks to have
a review of an interlocutory order. But as it would be useless and futile
to go ahead with the proceedings if the court below had no jurisdiction
this petition was given due course.' (San Beda vs. CIR, 51 O.G. 5636,
5638).
'While it is true that action on a motion to dismiss may be deferred
until the trial and an order to that effect is interlocutory, still where it
clearly appears that the trial judge or court is proceeding in excess or
outside of its jurisdiction, the remedy of prohibition would lie since it
would be useless and a waste of time to go ahead with the
proceedings. (Philippine International Fair, Inc., et al. vs. Ibaez, et al.,
50 Off. Gaz. 1036; Enrique v. Macadaeg, et al., 47 Off. Gaz. 1207; see
also San Beda College vs. CIR, 51 Off. Gaz. 5636.)' (University of Sto.
Tomas v. Villanueva, L-13748, 30 October 1959.).
Similarly, in Edward J. Nell Co. vs. Cubacub, L-20843, 23 June 1965, 14 SCRA 419,
this Court held:
'.......................................................... It is a settledrule that the
jurisdiction of a court over the subject-matter is determined by the
allegations in the complaint; and when a motion to dismiss is filed for
lack of jurisdiction those allegations are deemed admitted for purposes
of such motion, so that it may be resolved without waiting for the trial.
Thus it has been held that the consideration thereof may not be
postponed in the hope that the evidence may yield other qualifying or
concurring data which would bring the case under the court's
jurisdiction.'

To the same effect are the rulings in: Ruperto vs. Fernando, 83 Phil.
943; Administrator of Hacienda Luisita Estate vs. Alberto, L-12133, 21 October
1958.
Summing up, We hold:
(1) The under Article 360 of the Revised Penal Code, as amended by Republic Act
No. 4363, actions for damages by public officials for libelous publications against
them can only be filed in the courts of first instance ofthe city or province where the
offended functionary held office at the time ofthe commission of the offense, in case
the libelous article was first printed or published outside the Philippines.
(2) That the action of a court in refusing to rule, or deferring its ruling, on a motion
to dismiss for lack of jurisdiction over the subject matter, or for improper venue, is
in excess of jurisdiction and correctable by writ of prohibition or certiorari sued out
in the appellate Court, even before trial on the merits is had.
WHEREFORE, the writs applied for are granted: the respondent Court of First
Instance of Rizal is declared without jurisdiction to take cognizance of its Civil Case
No. 10403; and its orders issued in connection therewith are hereby annulled and
set aside,. Respondent court is further commanded to desist from further
proceedings in Civil case No. 10403 aforesaid. Costs against private respondents,
Antonio J. Villegas and Juan Ponce Enrile.
The writ of preliminary injunction heretofore issued by this Supreme Court is made
permanent.
Concepcion, C.J., Dizon, Makalintal, Fernando, Teehankee, Barredo, Villamor and
concur.
Castro, J., took no part.
G.R. No. 76607 February 26, 1990
UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE
REEVES, petitioners,
vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial
Court, Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO,
AND PABLO C. DEL PILAR, respondents.
G.R. No. 79470 February 26, 1990
UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF,
WILFREDO BELSA, PETER ORASCION AND ROSE CARTALLA, petitioners,
vs.

HON. RODOLFO D. RODRIGO, as Presiding Judge of Branch 7, Regional Trial

Court (BAGUIO CITY), La Trinidad, Benguet and FABIAN
GENOVE, respondents.
G.R. No. 80018 February 26, 1990
UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F.
BOSTICK, petitioners,
vs.
HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial Court,
Branch 66, Capas, Tarlac, and LUIS BAUTISTA, respondents.
G.R. No. 80258 February 26, 1990
UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC
ERNEST E. RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES,
SGT. THOMAS MITCHELL, SGT. WAYNE L. BENJAMIN, ET AL., petitioners,
vs.
HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62
REGIONAL TRIAL COURT, Angeles City, and RICKY SANCHEZ, FREDDIE
SANCHEZ AKA FREDDIE RIVERA, EDWIN MARIANO, AKA JESSIE DOLORES
SANGALANG, ET AL., respondents.
Luna, Sison & Manas Law Office for petitioners.

CRUZ, J.:
These cases have been consolidated because they all involve the doctrine
of state immunity. The United States of America was not impleaded in the
complaints below but has moved to dismiss on the ground that they are in
effect suits against it to which it has not consented. It is now contesting
the denial of its motions by the respondent judges.
In G.R. No. 76607, the private respondents are suing several officers of
the U.S. Air Force stationed in Clark Air Base in connection with the
bidding conducted by them for contracts for barber services in the said
base.
On February 24, 1986, the Western Pacific Contracting Office, Okinawa
Area Exchange, U.S. Air Force, solicited bids for such contracts through its
contracting officer, James F. Shaw. Among those who submitted their bids
were private respondents Roberto T. Valencia, Emerenciana C. Tanglao,
and Pablo C. del Pilar. Valencia had been a concessionaire inside Clark for
34 years; del Pilar for 12 years; and Tanglao for 50 years.

The bidding was won by Ramon Dizon, over the objection of the private
respondents, who claimed that he had made a bid for four facilities,
including the Civil Engineering Area, which was not included in the
invitation to bid.
The private respondents complained to the Philippine Area Exchange
(PHAX). The latter, through its representatives, petitioners Yvonne Reeves
and Frederic M. Smouse explained that the Civil Engineering concession
had not been awarded to Dizon as a result of the February 24, 1986
solicitation. Dizon was already operating this concession, then known as
the NCO club concession, and the expiration of the contract had been
extended from June 30, 1986 to August 31, 1986. They further explained
that the solicitation of the CE barbershop would be available only by the
end of June and the private respondents would be notified.
On June 30, 1986, the private respondents filed a complaint in the court
below to compel PHAX and the individual petitioners to cancel the award
to defendant Dizon, to conduct a rebidding for the barbershop concessions
and to allow the private respondents by a writ of preliminary injunction to
continue operating the concessions pending litigation. 1
Upon the filing of the complaint, the respondent court issued an ex
parte order directing the individual petitioners to maintain the status quo.
On July 22, 1986, the petitioners filed a motion to dismiss and opposition
to the petition for preliminary injunction on the ground that the action
was in effect a suit against the United States of America, which had not
waived its non-suability. The individual defendants, as official employees
of the U.S. Air Force, were also immune from suit.
On the same date, July 22, 1986, the trial court denied the application for
a writ of preliminary injunction.
On October 10, 1988, the trial court denied the petitioners' motion to
dismiss, holding in part as follows:
From the pleadings thus far presented to this Court by the
parties, the Court's attention is called by the relationship
between the plaintiffs as well as the defendants, including the
US Government, in that prior to the bidding or solicitation in
question, there was a binding contract between the plaintiffs
as well as the defendants, including the US Government. By
virtue of said contract of concession it is the Court's
understanding that neither the US Government nor the herein
principal defendants would become the employer/s of the
plaintiffs but that the latter are the employers themselves of

the barbers, etc. with the employer, the plaintiffs herein,

remitting the stipulated percentage of commissions to the
Philippine Area Exchange. The same circumstance would
become in effect when the Philippine Area Exchange opened
for bidding or solicitation the questioned barber shop
concessions. To this extent, therefore, indeed a commercial
transaction has been entered, and for purposes of the said
solicitation, would necessarily be entered between the
plaintiffs as well as the defendants.
The Court, further, is of the view that Article XVIII of the RP-US
Bases Agreement does not cover such kind of services falling
under the concessionaireship, such as a barber shop
concession. 2
On December 11, 1986, following the filing of the herein petition
for certiorari and prohibition with preliminary injunction, we issued a
temporary restraining order against further proceedings in the court
below. 3
In G.R. No. 79470, Fabian Genove filed a complaint for damages against
petitioners Anthony Lamachia, Wilfredo Belsa, Rose Cartalla and Peter
Orascion for his dismissal as cook in the U.S. Air Force Recreation Center
at the John Hay Air Station in Baguio City. It had been ascertained after
investigation, from the testimony of Belsa Cartalla and Orascion, that
Genove had poured urine into the soup stock used in cooking the
vegetables served to the club customers. Lamachia, as club manager,
suspended him and thereafter referred the case to a board of arbitrators
conformably to the collective bargaining agreement between the Center
and its employees. The board unanimously found him guilty and
recommended his dismissal. This was effected on March 5, 1986, by Col.
David C. Kimball, Commander of the 3rd Combat Support Group, PACAF
Clark Air Force Base. Genove's reaction was to file Ms complaint in the
Regional Trial Court of Baguio City against the individual petitioners. 4
On March 13, 1987, the defendants, joined by the United States of
America, moved to dismiss the complaint, alleging that Lamachia, as an
officer of the U.S. Air Force stationed at John Hay Air Station, was immune
from suit for the acts done by him in his official capacity. They argued that
the suit was in effect against the United States, which had not given its
consent to be sued.
This motion was denied by the respondent judge on June 4, 1987, in an
order which read in part:

It is the understanding of the Court, based on the allegations

of the complaint which have been hypothetically admitted
by defendants upon the filing of their motion to dismiss that
although defendants acted initially in their official capacities,
their going beyond what their functions called for brought
them out of the protective mantle of whatever immunities they
may have had in the beginning. Thus, the allegation that the
acts complained of were illegal, done. with extreme bad faith
and with pre-conceived sinister plan to harass and finally
dismiss the plaintiff, gains significance. 5
The petitioners then came to this Court seeking certiorari and prohibition
with preliminary injunction.
In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in
Camp O' Donnell, an extension of Clark Air Base, was arrested following a
buy-bust operation conducted by the individual petitioners herein, namely,
Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air
Force and special agents of the Air Force Office of Special Investigators
(AFOSI). On the basis of the sworn statements made by them, an
information for violation of R.A. 6425, otherwise known as the Dangerous
Drugs Act, was filed against Bautista in the Regional Trial Court of Tarlac.
The above-named officers testified against him at his trial. As a result of
the filing of the charge, Bautista was dismissed from his employment. He
then filed a complaint for damages against the individual petitioners
herein claiming that it was because of their acts that he was removed. 6
During the period for filing of the answer, Mariano Y. Navarro a special
counsel assigned to the International Law Division, Office of the Staff
Judge Advocate of Clark Air Base, entered a special appearance for the
defendants and moved for an extension within which to file an "answer
and/or other pleadings." His reason was that the Attorney General of the
United States had not yet designated counsel to represent the
defendants, who were being sued for their official acts. Within the
extended period, the defendants, without the assistance of counsel or
authority from the U.S. Department of Justice, filed their answer. They
alleged therein as affirmative defenses that they had only done their duty
in the enforcement of the laws of the Philippines inside the American
bases pursuant to the RP-US Military Bases Agreement.
On May 7, 1987, the law firm of Luna, Sison and Manas, having been
retained to represent the defendants, filed with leave of court a motion to
withdraw the answer and dismiss the complaint. The ground invoked was
that the defendants were acting in their official capacity when they did the
acts complained of and that the complaint against them was in effect a
suit against the United States without its consent.

The motion was denied by the respondent judge in his order dated
September 11, 1987, which held that the claimed immunity under the
Military Bases Agreement covered only criminal and not civil cases.
Moreover, the defendants had come under the jurisdiction of the court
when they submitted their answer. 7
Following the filing of the herein petition for certiorari and prohibition
with preliminary injunction, we issued on October 14, 1987, a temporary
restraining order. 8
In G.R. No. 80258, a complaint for damages was filed by the private
respondents against the herein petitioners (except the United States of
America), for injuries allegedly sustained by the plaintiffs as a result of
the acts of the defendants. 9 There is a conflict of factual allegations here.
According to the plaintiffs, the defendants beat them up, handcuffed them
and unleashed dogs on them which bit them in several parts of their
bodies and caused extensive injuries to them. The defendants deny this
and claim the plaintiffs were arrested for theft and were bitten by the
dogs because they were struggling and resisting arrest, The defendants
stress that the dogs were called off and the plaintiffs were immediately
taken to the medical center for treatment of their wounds.
In a motion to dismiss the complaint, the United States of America and the
individually named defendants argued that the suit was in effect a suit
against the United States, which had not given its consent to be sued. The
defendants were also immune from suit under the RP-US Bases Treaty for
acts done by them in the performance of their official functions.
The motion to dismiss was denied by the trial court in its order dated
August 10, 1987, reading in part as follows:
The defendants certainly cannot correctly argue that they are
immune from suit. The allegations, of the complaint which is
sought to be dismissed, had to be hypothetically admitted and
whatever ground the defendants may have, had to be
ventilated during the trial of the case on the merits. The
complaint alleged criminal acts against the individually-named
defendants and from the nature of said acts it could not be
said that they are Acts of State, for which immunity should be
invoked. If the Filipinos themselves are duty bound to respect,
obey and submit themselves to the laws of the country, with
more reason, the members of the United States Armed Forces
who are being treated as guests of this country should
respect, obey and submit themselves to its laws. 10

and so was the motion for reconsideration. The defendants submitted

their answer as required but subsequently filed their petition
for certiorari and prohibition with preliminary injunction with this Court.
We issued a temporary restraining order on October 27, 1987. 11
II
The rule that a state may not be sued without its consent, now expressed
in Article XVI, Section 3, of the 1987 Constitution, is one of the generally
accepted principles of international law that we have adopted as part of
the law of our land under Article II, Section 2. This latter provision merely
reiterates a policy earlier embodied in the 1935 and 1973 Constitutions
and also intended to manifest our resolve to abide by the rules of the
international community.
Even without such affirmation, we would still be bound by the generally
accepted principles of international law under the doctrine of
incorporation. Under this doctrine, as accepted by the majority of states,
such principles are deemed incorporated in the law of every civilized state
as a condition and consequence of its membership in the society of
nations. Upon its admission to such society, the state is automatically
obligated to comply with these principles in its relations with other states.
As applied to the local state, the doctrine of state immunity is based on
the justification given by Justice Holmes that "there can be no legal right
against the authority which makes the law on which the right
depends." 12 There are other practical reasons for the enforcement of the
doctrine. In the case of the foreign state sought to be impleaded in the
local jurisdiction, the added inhibition is expressed in the maxim par in
parem, non habet imperium. All states are sovereign equals and cannot
assert jurisdiction over one another. A contrary disposition would, in the
language of a celebrated case, "unduly vex the peace of nations." 13
While the doctrine appears to prohibit only suits against the state without
its consent, it is also applicable to complaints filed against officials of the
state for acts allegedly performed by them in the discharge of their
duties. The rule is that if the judgment against such officials will require
the state itself to perform an affirmative act to satisfy the same, such as
the appropriation of the amount needed to pay the damages awarded
against them, the suit must be regarded as against the state itself
although it has not been formally impleaded. 14 In such a situation, the
state may move to dismiss the complaint on the ground that it has been
filed without its consent.
The doctrine is sometimes derisively called "the royal prerogative of
dishonesty" because of the privilege it grants the state to defeat any

legitimate claim against it by simply invoking its non-suability. That is

hardly fair, at least in democratic societies, for the state is not an
unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the
doctrine is not absolute and does not say the state may not be sued under
any circumstance. On the contrary, the rule says that the state may not be
sued without its consent, which clearly imports that it may be sued if it
consents.
The consent of the state to be sued may be manifested expressly or
impliedly. Express consent may be embodied in a general law or a special
law. Consent is implied when the state enters into a contract or it itself
commences litigation.
The general law waiving the immunity of the state from suit is found in Act
No. 3083, under which the Philippine government "consents and submits
to be sued upon any moneyed claim involving liability arising from
contract, express or implied, which could serve as a basis of civil action
between private parties." In Merritt v. Government of the Philippine
Islands, 15 a special law was passed to enable a person to sue the
government for an alleged tort. When the government enters into a
contract, it is deemed to have descended to the level of the other
contracting party and divested of its sovereign immunity from suit with its
implied consent.16 Waiver is also implied when the government files a
complaint, thus opening itself to a counterclaim. 17
The above rules are subject to qualification. Express consent is effected
only by the will of the legislature through the medium of a duly enacted
statute. 18 We have held that not all contracts entered into by the
government will operate as a waiver of its non-suability; distinction must
be made between its sovereign and proprietary acts. 19 As for the filing of
a complaint by the government, suability will result only where the
government is claiming affirmative relief from the defendant. 20
In the case of the United States of America, the customary rule of
international law on state immunity is expressed with more specificity in
the RP-US Bases Treaty. Article III thereof provides as follows:
It is mutually agreed that the United States shall have the
rights, power and authority within the bases which are
necessary for the establishment, use, operation and defense
thereof or appropriate for the control thereof and all the
rights, power and authority within the limits of the territorial
waters and air space adjacent to, or in the vicinity of, the
bases which are necessary to provide access to them or
appropriate for their control.

The petitioners also rely heavily on Baer v. Tizon, 21 along with several
other decisions, to support their position that they are not suable in the
cases below, the United States not having waived its sovereign immunity
from suit. It is emphasized that in Baer, the Court held:
The invocation of the doctrine of immunity from suit of a
foreign state without its consent is appropriate. More
specifically, insofar as alien armed forces is concerned, the
starting point is Raquiza v. Bradford, a 1945 decision. In
dismissing a habeas corpus petition for the release of
petitioners confined by American army authorities, Justice
Hilado speaking for the Court, cited Coleman v. Tennessee,
where it was explicitly declared: 'It is well settled that a
foreign army, permitted to march through a friendly country or
to be stationed in it, by permission of its government or
sovereign, is exempt from the civil and criminal jurisdiction of
the place.' Two years later, in Tubb and Tedrow v. Griess, this
Court relied on the ruling in Raquiza v. Bradford and cited in
support thereof excerpts from the works of the following
authoritative writers: Vattel, Wheaton, Hall, Lawrence,
Oppenheim, Westlake, Hyde, and McNair and Lauterpacht.
Accuracy demands the clarification that after the conclusion of
the Philippine-American Military Bases Agreement, the treaty
provisions should control on such matter, the assumption
being that there was a manifestation of the submission to
jurisdiction on the part of the foreign power whenever
appropriate. More to the point is Syquia v. Almeda Lopez,
where plaintiffs as lessors sued the Commanding General of
the United States Army in the Philippines, seeking the
restoration to them of the apartment buildings they owned
leased to the United States armed forces stationed in the
Manila area. A motion to dismiss on the ground of nonsuability was filed and upheld by respondent Judge. The matter
was taken to this Court in a mandamus proceeding. It failed. It
was the ruling that respondent Judge acted correctly
considering that the 4 action must be considered as one
against the U.S. Government. The opinion of Justice
Montemayor continued: 'It is clear that the courts of the
Philippines including the Municipal Court of Manila have no
jurisdiction over the present case for unlawful detainer. The
question of lack of jurisdiction was raised and interposed at
the very beginning of the action. The U.S. Government has not
given its consent to the filing of this suit which is essentially
against her, though not in name. Moreover, this is not only a
case of a citizen filing a suit against his own Government
without the latter's consent but it is of a citizen firing an action
against a foreign government without said government's

consent, which renders more obvious the lack of jurisdiction of

the courts of his country. The principles of law behind this rule
are so elementary and of such general acceptance that we
deem it unnecessary to cite authorities in support thereof then
came Marvel Building Corporation v. Philippine War Damage
Commission, where respondent, a United States Agency
established to compensate damages suffered by the
Philippines during World War II was held as falling within the
above doctrine as the suit against it would eventually be a
charge against or financial liability of the United States
Government because ... , the Commission has no funds of its
own for the purpose of paying money judgments.' The Syquia
ruling was again explicitly relied upon in Marquez Lim v.
Nelson, involving a complaint for the recovery of a motor
launch, plus damages, the special defense interposed being
'that the vessel belonged to the United States Government,
that the defendants merely acted as agents of said
Government, and that the United States Government is
therefore the real party in interest.' So it was
in Philippine Alien Property Administration v. Castelo, where it
was held that a suit against Alien Property Custodian and the
Attorney General of the United States involving vested
property under the Trading with the Enemy Act is in substance
a suit against the United States. To the same effect is Parreno
v. McGranery, as the following excerpt from the opinion of
justice Tuazon clearly shows: 'It is a widely accepted principle
of international law, which is made a part of the law of the land
(Article II, Section 3 of the Constitution), that a foreign state
may not be brought to suit before the courts of another state
or its own courts without its consent.' Finally, there is Johnson
v. Turner, an appeal by the defendant, then Commanding
General, Philippine Command (Air Force, with office at Clark
Field) from a decision ordering the return to plaintiff of the
confiscated military payment certificates known as scrip
money. In reversing the lower court decision, this Tribunal,
through Justice Montemayor, relied on Syquia v. Almeda Lopez,
explaining why it could not be sustained.
It bears stressing at this point that the above observations do not confer
on the United States of America a blanket immunity for all acts done by it
or its agents in the Philippines. Neither may the other petitioners claim
that they are also insulated from suit in this country merely because they
have acted as agents of the United States in the discharge of their official
functions.
There is no question that the United States of America, like any other
state, will be deemed to have impliedly waived its non-suability if it has

entered into a contract in its proprietary or private capacity. It is only

when the contract involves its sovereign or governmental capacity that no
such waiver may be implied. This was our ruling in United States of
America v. Ruiz, 22 where the transaction in question dealt with the
improvement of the wharves in the naval installation at Subic Bay. As this
was a clearly governmental function, we held that the contract did not
operate to divest the United States of its sovereign immunity from suit. In
the words of Justice Vicente Abad Santos:
The traditional rule of immunity exempts a State from being
sued in the courts of another State without its consent or
waiver. This rule is a necessary consequence of the principles
of independence and equality of States. However, the rules of
International Law are not petrified; they are constantly
developing and evolving. And because the activities of states
have multiplied, it has been necessary to distinguish them
between sovereign and governmental acts (jure imperii) and
private, commercial and proprietary acts (jure gestionis). The
result is that State immunity now extends only to acts jure
imperii The restrictive application of State immunity is now the
rule in the United States, the United kingdom and other states
in Western Europe.
xxx xxx xxx
The restrictive application of State immunity is proper only
when the proceedings arise out of commercial transactions of
the foreign sovereign, its commercial activities or economic
affairs. Stated differently, a State may be said to have
descended to the level of an individual and can thus be
deemed to have tacitly given its consent to be sued only when
it enters into business contracts. It does not apply where the
contract relates to the exercise of its sovereign functions. In
this case the projects are an integral part of the naval base
which is devoted to the defense of both the United States and
the Philippines, indisputably a function of the government of
the highest order; they are not utilized for nor dedicated to
commercial or business purposes.
The other petitioners in the cases before us all aver they have acted in the
discharge of their official functions as officers or agents of the United
States. However, this is a matter of evidence. The charges against them
may not be summarily dismissed on their mere assertion that their acts
are imputable to the United States of America, which has not given its
consent to be sued. In fact, the defendants are sought to be held

answerable for personal torts in which the United States itself is not
involved. If found liable, they and they alone must satisfy the judgment.
In Festejo v. Fernando, 23 a bureau director, acting without any authority
whatsoever, appropriated private land and converted it into public
irrigation ditches. Sued for the value of the lots invalidly taken by him, he
moved to dismiss the complaint on the ground that the suit was in effect
against the Philippine government, which had not given its consent to be
sued. This Court sustained the denial of the motion and held that the
doctrine of state immunity was not applicable. The director was being
sued in his private capacity for a personal tort.
With these considerations in mind, we now proceed to resolve the cases at
hand.
III
It is clear from a study of the records of G.R. No. 80018 that the
individually-named petitioners therein were acting in the exercise of their
official functions when they conducted the buy-bust operation against the
complainant and thereafter testified against him at his trial. The said
petitioners were in fact connected with the Air Force Office of Special
Investigators and were charged precisely with the function of preventing
the distribution, possession and use of prohibited drugs and prosecuting
those guilty of such acts. It cannot for a moment be imagined that they
were acting in their private or unofficial capacity when they apprehended
and later testified against the complainant. It follows that for discharging
their duties as agents of the United States, they cannot be directly
impleaded for acts imputable to their principal, which has not given its
consent to be sued. As we observed in Sanders v. Veridiano: 24
Given the official character of the above-described letters, we
have to conclude that the petitioners were, legally speaking,
being sued as officers of the United States government. As
they have acted on behalf of that government, and within the
scope of their authority, it is that government, and not the
petitioners personally, that is responsible for their acts.
The private respondent invokes Article 2180 of the Civil Code which holds
the government liable if it acts through a special agent. The argument, it
would seem, is premised on the ground that since the officers are
designated "special agents," the United States government should be
liable for their torts.
There seems to be a failure to distinguish between suability and liability
and a misconception that the two terms are synonymous. Suability

depends on the consent of the state to be sued, liability on the applicable

law and the established facts. The circumstance that a state is suable
does not necessarily mean that it is liable; on the other hand, it can never
be held liable if it does not first consent to be sued. Liability is not
conceded by the mere fact that the state has allowed itself to be sued.
When the state does waive its sovereign immunity, it is only giving the
plaintiff the chance to prove, if it can, that the defendant is liable.
The said article establishes a rule of liability, not suability. The
government may be held liable under this rule only if it first allows itself
to be sued through any of the accepted forms of consent.
Moreover, the agent performing his regular functions is not a special
agent even if he is so denominated, as in the case at bar. No less
important, the said provision appears to regulate only the relations of the
local state with its inhabitants and, hence, applies only to the Philippine
government and not to foreign governments impleaded in our courts.
We reject the conclusion of the trial court that the answer filed by the
special counsel of the Office of the Sheriff Judge Advocate of Clark Air
Base was a submission by the United States government to its jurisdiction.
As we noted in Republic v. Purisima, 25 express waiver of immunity cannot
be made by a mere counsel of the government but must be effected
through a duly-enacted statute. Neither does such answer come under the
implied forms of consent as earlier discussed.
But even as we are certain that the individual petitioners in G.R. No.
80018 were acting in the discharge of their official functions, we hesitate
to make the same conclusion in G.R. No. 80258. The contradictory factual
allegations in this case deserve in our view a closer study of what actually
happened to the plaintiffs. The record is too meager to indicate if the
defendants were really discharging their official duties or had actually
exceeded their authority when the incident in question occurred. Lacking
this information, this Court cannot directly decide this case. The needed
inquiry must first be made by the lower court so it may assess and resolve
the conflicting claims of the parties on the basis of the evidence that has
yet to be presented at the trial. Only after it shall have determined in
what capacity the petitioners were acting at the time of the incident in
question will this Court determine, if still necessary, if the doctrine of
state immunity is applicable.
In G.R. No. 79470, private respondent Genove was employed as a cook in
the Main Club located at the U.S. Air Force Recreation Center, also known
as the Open Mess Complex, at John Hay Air Station. As manager of this
complex, petitioner Lamachia is responsible for eleven diversified
activities generating an annual income of $2 million. Under his executive

management are three service restaurants, a cafeteria, a bakery, a Class

VI store, a coffee and pantry shop, a main cashier cage, an administrative
office, and a decentralized warehouse which maintains a stock level of
$200,000.00 per month in resale items. He supervises 167 employees, one
of whom was Genove, with whom the United States government has
concluded a collective bargaining agreement.
From these circumstances, the Court can assume that the restaurant
services offered at the John Hay Air Station partake of the nature of a
business enterprise undertaken by the United States government in its
proprietary capacity. Such services are not extended to the American
servicemen for free as a perquisite of membership in the Armed Forces of
the United States. Neither does it appear that they are exclusively offered
to these servicemen; on the contrary, it is well known that they are
available to the general public as well, including the tourists in Baguio
City, many of whom make it a point to visit John Hay for this reason. All
persons availing themselves of this facility pay for the privilege like all
other customers as in ordinary restaurants. Although the prices are
concededly reasonable and relatively low, such services are undoubtedly
operated for profit, as a commercial and not a governmental activity.
The consequence of this finding is that the petitioners cannot invoke the
doctrine of state immunity to justify the dismissal of the damage suit
against them by Genove. Such defense will not prosper even if it be
established that they were acting as agents of the United States when
they investigated and later dismissed Genove. For that matter, not even
the United States government itself can claim such immunity. The reason
is that by entering into the employment contract with Genove in the
discharge of its proprietary functions, it impliedly divested itself of its
sovereign immunity from suit.
But these considerations notwithstanding, we hold that the complaint
against the petitioners in the court below must still be dismissed. While
suable, the petitioners are nevertheless not liable. It is obvious that the
claim for damages cannot be allowed on the strength of the evidence
before us, which we have carefully examined.
The dismissal of the private respondent was decided upon only after a
thorough investigation where it was established beyond doubt that he had
polluted the soup stock with urine. The investigation, in fact, did not stop
there. Despite the definitive finding of Genove's guilt, the case was still
referred to the board of arbitrators provided for in the collective
bargaining agreement. This board unanimously affirmed the findings of
the investigators and recommended Genove's dismissal. There was
nothing arbitrary about the proceedings. The petitioners acted quite
properly in terminating the private respondent's employment for his

unbelievably nauseating act. It is surprising that he should still have the

temerity to file his complaint for damages after committing his utterly
disgusting offense.
Concerning G.R. No. 76607, we also find that the barbershops subject of
the concessions granted by the United States government are commercial
enterprises operated by private person's. They are not agencies of the
United States Armed Forces nor are their facilities demandable as a
matter of right by the American servicemen. These establishments provide
for the grooming needs of their customers and offer not only the basic
haircut and shave (as required in most military organizations) but such
other amenities as shampoo, massage, manicure and other similar
indulgences. And all for a fee. Interestingly, one of the concessionaires,
private respondent Valencia, was even sent abroad to improve his
tonsorial business, presumably for the benefit of his customers. No less
significantly, if not more so, all the barbershop concessionaires are under
the terms of their contracts, required to remit to the United States
government fixed commissions in consideration of the exclusive
concessions granted to them in their respective areas.
This being the case, the petitioners cannot plead any immunity from the
complaint filed by the private respondents in the court below. The
contracts in question being decidedly commercial, the conclusion reached
in the United States of America v. Ruiz case cannot be applied here.
The Court would have directly resolved the claims against the defendants
as we have done in G.R. No. 79470, except for the paucity of the record in
the case at hand. The evidence of the alleged irregularity in the grant of
the barbershop concessions is not before us. This means that, as in G.R.
No. 80258, the respondent court will have to receive that evidence first,
so it can later determine on the basis thereof if the plaintiffs are entitled
to the relief they seek. Accordingly, this case must also be remanded to
the court below for further proceedings.
IV
There are a number of other cases now pending before us which also
involve the question of the immunity of the United States from the
jurisdiction of the Philippines. This is cause for regret, indeed, as they mar
the traditional friendship between two countries long allied in the cause of
democracy. It is hoped that the so-called "irritants" in their relations will
be resolved in a spirit of mutual accommodation and respect, without the
inconvenience and asperity of litigation and always with justice to both
parties.

WHEREFORE, after considering all the above premises, the Court hereby
renders judgment as follows:
1. In G.R. No. 76607, the petition is DISMISSED and the
respondent judge is directed to proceed with the hearing and
decision of Civil Case No. 4772. The temporary restraining
order dated December 11, 1986, is LIFTED.
2. In G.R. No. 79470, the petition is GRANTED and Civil Case
No. 829-R(298) is DISMISSED.
3. In G.R. No. 80018, the petition is GRANTED and Civil Case
No. 115-C-87 is DISMISSED. The temporary restraining order
dated October 14, 1987, is made permanent.
4. In G.R. No. 80258, the petition is DISMISSED and the
respondent court is directed to proceed with the hearing and
decision of Civil Case No. 4996. The temporary restraining
order dated October 27, 1987, is LIFTED.
All without any pronouncement as to costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and
Regalado, JJ., concur.
[G.R. No. L-20213. January 31, 1966.]
MARIANO E. GARCIA, Plaintiff-Appellant, v. THE CHIEF OF STAFF and THE
ADJUTANT GENERAL, ARMED FORCES OF THE PHILIPPINES and/or THE
CHAIRMAN, PHILIPPINE VETERANS BOARD and/or THE AUDITOR GENERAL
OF THE PHILIPPINES, Defendants-Appellees.
Tiangco & Millosa, for the plaintiff and Appellant.
Solicitor General for the defendants and appellees.
SYLLABUS
1. ACTIONS; RECOVERY OR MONEY AGAINST THE GOVERNMENT. A claim for the
recovery of money against the government should be filed with the Auditor General,
in line with the principle that the State cannot be sued without its consent. (New
Manila Lumber Co. v. Republic, 107 Phil., 824.)

DECISION
REGALA, J.:
This is an appeal from an order of dismissal.
It appears that on December 1, 1961, the plaintiff-appellant, Mariano E. Garcia, filed
with the Court of First Instance of Pangasinan an action to collect a sum of money
against the Chief of Staff and the Adjutant General of the Armed Forces of the
Philippines, the Chairman of the Philippine Veterans Board and/or the Auditor
General. The complaint alleged: that sometime in July, 1948, the plaintiff suffered
injuries while undergoing the 10-month military training at Camp Floridablanca,
Pampanga; that sometime thereafter he filed his claim under Commonwealth Act
400 and in April, 1957, he submitted some papers in support of his claim to the
Adjutant Generals Office upon the latters request; that on May 2, 1957, he
received a letter from the said Adjutant Generals office disallowing his claim for
disability benefits; that on November 24,1958, after further demands of the plaintiff,
the Adjutant Generals Office denied the said claim, alleging that Commonwealth
Act 400 had already been repealed by Republic Act 610 which took effect on January
1, 1950; that by reason of the injuries suffered by plaintiff he was deprived of his
sight or vision rendering him permanently disabled; and that by reason of the
unjustified refusal by defendants of plaintiffs claim, the latter was deprived of his
disability pension from July, 1948 totaling no less than P4,000 at the rate of P20 a
month and suffered thereby moral damages and attorneys fees in the amount of
P2,000.00.
The Philippine Veterans Administration and the Chief of Staff of the Armed Forces
filed separate motions to dismiss the complaint on the grounds that the court has
no jurisdiction over the subject matter of the complaint; that the plaintiff failed to
exhaust all administrative remedies before coming to court; that the complaint
states no cause of action; and that the cause of action is barred by the statute of
limitations.
Acting on the said motions, the court, on March 2, 1962, rendered an order
dismissing the complaint on the ground that the action has prescribed.
Motion for reconsideration of the said order having been denied, the plaintiff has
interposed this appeal.
Without need of discussing the various questions raised, We have to uphold the
order of dismissal, not necessarily on the same ground as found by the lower court,
but for the simple reason that the Court of First Instance has no jurisdiction over the
subject matter, it being a money claim against the government.
This Court has already held (New Manila Lumber Co. Inc. v. Republic, 107 Phil., 824
that a claim for the recovery of money against the government should be filed with

the Auditor General, in line with the principle that the State cannot be sued without
its consent. Commonwealth Act 327 provides:jgc:chanrobles.com.ph
"SECTION 1. In all cases involving the settlements of accounts of claims, other than
those of accountable officers, the Auditor General shall act and decide the same
within sixty days, exclusive of Sundays and holidays, after their presentation . . .
"SEC. 2. The party aggrieved by the final decision of the Auditor General in the
settlement of an account or claim may, within thirty days from receipt of the
decision, take an appeal in writing:chanrob1es virtual 1aw library
x
x
x
(c) To the Supreme Court of the Philippines, if the appellant is a private person or
entity.
The well established rule that no recourse to court can be had until all
administrative remedies had been exhausted and that actions against
administrative officers should not be entertained if superior administrative officers
could grant relief is squarely applicable to the present case.
In view hereof, the order dismissing the complaint is hereby affirmed, without
pronouncement as to costs.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Dizon, Bengzon,
J.P. and Zaldivar, JJ., concur.
Makalintal, J., took no part.
[G.R. No. 74135. May 28, 1992.]
M. H. WYLIE and CAPT. JAMES WILLIAMS, Petitioners, v. AURORA I. RARANG
and THE HONORABLE INTERMEDIATE APPELLATE COURT, Respondents.
SYLLABUS
1. POLITICAL LAW; STATE IMMUNITY FROM SUIT; BASIS AND JUSTIFICATION FOR
ENFORCEMENT OF DOCTRINE. In the case of United States of America v. Guinto
(182 SCRA 644 [1990]), we discussed the principle of the state immunity from suit
as follows: "The rule that a state may not be sued without its consent, now
expressed in Article XVI, Section 3, of the 1987 Constitution, is one of the generally
accepted principles of international law that we have adopted as part of the law of
our land under Article II, Section 2. . . . Even without such affirmation, we would still
be bound by the generally accepted principles of international law under the
doctrine of incorporation. Under this doctrine, as accepted by the majority of states,
such principles are deemed incorporated in the law of every civilized state as a
condition and consequence of its membership in the society of nations. Upon its
admission to such society, the state is automatically obligated to comply with these
principles in its relations with other states. As applied to the local state, the doctrine

of state immunity is based on the justification given by Justice Holmes that there
can be no legal right against the authority which makes the law on which the right
depends. (Kawanakoa v. Polybank, 205 U.S. 349) There are other practical reasons
for the enforcement of the doctrine. In the case of the foreign state sought to be
impleaded in the local jurisdiction, the added inhibition is expressed in the maxim
par in parem, non habet imperium. All states are sovereign equals and cannot
assert jurisdiction over one another. A contrary disposition would, in the language of
a celebrated case, unduly vex the peace of nations. (Da Haber v. Queen of
Portugal, 17 Q.B. 171)
2. ID.; ID.; PROHIBITED SUITS; GENERAL RULE; EXCEPTIONS; QUALIFICATION OF
RULES. While the doctrine appears to prohibit only suits against the state without
its consent, it is also applicable to complaints filed against officials of the state for
acts allegedly performed by them in the discharge of their duties. The rule is that if
the judgment against such officials will require the state itself to perform an
affirmative act to satisfy the same, such as the appropriation of the amount needed
to pay the damages awarded against them, the suit must be regarded as against
the state itself although it has not been formally impleaded. (Garcia v. Chief of Staff,
16 SCRA 120) In such a situation, the state may move to dismiss the complaint on
the ground that it has been filed without its consent. The doctrine is sometimes
derisively called the royal prerogative of dishonesty because of the privilege it
grants the state to defeat any legitimate claim against it by simply invoking its nonsuability. That is hardly fair, at least in democratic societies, for the state is not an
unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is
not absolute and does not say the state may not be sued under any circumstance.
On the contrary, the rule says that the state may not be sued without its consent,
which clearly imports that it may be sued if it consents. The consent of the state to
be sued may be manifested expressly or impliedly. Express consent may be
embodied in a general law or a special law. Consent is implied when the state enters
into a contract it itself commences litigation. . . . The above rules are subject to
qualification. Express consent is effected only by the will of the legislature through
the medium of a duly enacted statute. (Republic v. Purisima, 78 SCRA 470) We have
held that not all contracts entered into by the government will operate as a waiver
of its non-suability; distinction must be made between its sovereign and proprietary
acts. (United States of America v. Ruiz, 136 SCRA 487) As for the filing of a
complaint by the government, suability will result only where the government is
claiming affirmative relief from the defendant. (Lim v. Brownell, 107 Phil. 345)"
3. ID.; ID.; IMMUNITY FROM SUIT OF UNITED STATES AND ITS PERSONNEL
STATIONED IN PHILIPPINE TERRITORY; NATURE AND EXTENT; WAIVER OF IMMUNITY.
"In the case of the United States of America, the customary rule of international
law on state immunity is expressed with more specificity in the RP-US Bases Treaty.
Article III thereof provides as follows: It is mutually agreed that the United States
shall have the rights, power and authority within the bases which are necessary for
the establishment, use, operation and defense thereof or appropriate for the control
thereof and all the rights, power and authority within the limits of the territorial
waters and air space adjacent to, or in the vicinity of, the bases which are necessary
to provide access to them or appropriate for their control.." . . It bears stressing at
this point that the above observations do not confer on the United States of America
a blanket immunity for all acts done by it or its agents in the Philippines. Neither

may the other petitioners claim that they are also insulated from suit in this country
merely because they have acted as agents of the United States in the discharge of
their official functions. There is no question that the United States of America, like
any other state, will be deemed to have impliedly waived its non-suability if it has
entered into a contract in its proprietary or private capacity. It is only when the
contract involves its sovereign or governmental capacity that no such waiver may
be implied. This was our ruling in United States of America v. Ruiz, (136 SCRA 487)
where the transaction in question dealt with the improvement of the wharves in the
naval installation at Subic Bay. As this was a clearly governmental function, we held
that the contract did not operate to divest the United States of its sovereign
immunity from suit.
4. ID.; ID.; ID.; MERE ASSERTION OF NON-SUABILITY NOT GROUND FOR SUMMARY
DISMISSAL OF CHARGES. The other petitioners in the cases before us all aver
they have acted in the discharge of their official functions as officers or agents of
the United States. However, this is a matter of evidence. The charges against them
may not be summarily dismissed on their mere assertion that their acts are
imputable to the United States of America, which has not given its consent to be
sued. In fact, the defendants are sought to be held answerable for personal torts in
which the United States itself is not involved. If found liable, they and they alone
must satisfy the judgment."cralaw virtua1aw library
5. ID.; ID.; ID.; TORTS AND CRIMES NOT COVERED BY IMMUNITY AGREEMENT.
Pursuing the question further, does the grant of rights, power, and authority to the
United States under the RP - US Bases Treaty cover immunity of its officers from
crimes and torts? Our answer is No. Killing a person in cold blood while on patrol
duty, running over a child while driving with reckless imprudence on an official trip,
or slandering a person during office hours could not possibly be covered by the
immunity agreement. Our laws and, we presume, those of the United States do not
allow the commission of crimes in the name of official duty.
6. ID.; ID.; PUBLIC OFFICIALS PERSONALLY ACCOUNTABLE FOR ULTRA VIRES ACTS;
IMMUNITY FROM SUIT NOT GRANT OF PRIVILEGED STATUS. The case of Chavez v.
Sandiganbayan, 193 SCRA 282 [1991] gives the law on immunity from suit of public
officials: "The general rule is that public officials can be held personally accountable
for acts claimed to have been performed in connection with official duties where
they have acted ultra vires or where there is showing of bad faith. . . . "Moreover,
the petitioners argument that the immunity proviso under Section 4(a) of Executive
Order No. 1 also extends to him is not well-taken. A mere invocation of the
immunity clause does not ipso facto result in the charges being automatically
dropped. . . . . "Immunity from suit cannot institutionalize irresponsibility and nonaccountability nor grant a privileged status not claimed by any other official of the
Republic. "Where the petitioner exceeds his authority as Solicitor General, acts in
bad faith, or, as contended by the private respondent, maliciously conspir(es) with
the PCGG commissioners in persecuting respondent Enrile by filing against him an
evidently baseless suit in derogation of the latters constitutional rights and
liberties, there can be no question that a complaint for damages does not confer a
license to persecute or recklessly injure another. The actions governed by Articles
19, 20, 21, and 32 of the Civil Code on Human Relations may be taken against
public officers or private citizens alike. . . ."cralaw virtua1aw library

7. CIVIL LAW; DAMAGES; "FAULT" OR NEGLIGENCE INCLUDES CRIMINAL ACTS.

Article 2176 of the Civil Code prescribes a civil liability for damages caused by a
persons act or omission constituting fault or negligence, to wit: "Article 2176.
Whoever by act or omission, causes damage to another, there being fault or
negligence is obliged to pay for the damage done. Such fault or negligence, if there
is no pre-existing contractual relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter." "Fault" or "negligence" in this
Article covers not only acts "not punishable by law" but also acts criminal in
character, whether intentional or voluntary or negligent." (Andamo v. Intermediate
Appellate Court, 191 SCRA 195 [1990]).
8. ID.; ID.; MORAL DAMAGES RECOVERABLE IN CASE OF LIBEL, SLANDER OR OTHER
DEFAMATION; ALLEGATION OF FORGERY A DEFAMATION. Article 2219(7) of the
Civil Code provides that moral damages may be recovered in case of libel, slander
or any other form of defamation. In effect, the offended party in these cases is given
the right to receive from the guilty party moral damages for injury to his feelings
and reputation in addition to punitive or exemplary damages. (Occena v. Icamina,
181 SCRA 328 [1990]. In another case, Heirs of Basilisa Justiva v. Gustilo, 7 SCRA 72
[1963], we ruled that the allegation of forgery of documents could be a defamation,
which in the light of Article 2219(7) of the Civil Code could by analogy be ground for
payment of moral damages, considering the wounded feelings and besmirched
reputation of the defendants.
9. ID.; ID.; DEFAMATION ESTABLISHED IN CASE AT BAR. Indeed the imputation of
theft contained in the POD dated February 3, 1978 is a defamation against the
character and reputation of the privateRespondent. Petitioner Wylie himself
admitted that the Office of the Provost Marshal explicitly recommended the deletion
of the name Auring if the article were published. The petitioners, however, were
negligent because under their direction they issued the publication without deleting
the name "Auring." Such act or omission is ultra vires and cannot be part of official
duty. It was a tortious act which ridiculed the private Respondent.
DECISION
GUTIERREZ, JR., J.:
The pivotal issue in this petition centers on the extent of the "immunity from suit" of
the officials of a United States Naval Base inside Philippine territory.
In February, 1978, petitioner M. H. Wylie was the assistant administrative officer
while petitioner Capt. James Williams was the commanding officer of the U. S. Naval
Base in Subic Bay, Olongapo City. Private respondent Aurora I. Rarang was an
employee in the Office of the Provost Marshal assigned as merchandise control
guard.
M. H. Wylie, in his capacity as assistant administrative officer of the U.S. Naval

Station supervised the publication of the "Plan of the Day" (POD) which was
published daily the US Naval Base station. The POD featured important
announcements, necessary precautions, and general matters of interest to military
personnel. One of the regular features of the POD was the "action line inquiry." On
February 3, 1978, the POD published, under the "NAVSTA ACTION LINE INQUIRY" the
following:jgc:chanrobles.com.ph
"Question: I have observed that Merchandise Control inspector/inspectress are (sic)
consuming for their own benefit things they have confiscate from Base Personnel.
The observation is even more aggravated by consuming such confiscated items as
cigarettes and food stuffs PUBLICLY. This is not to mention Auring who is in herself,
a disgrace to her division and to the Office of the Provost Marshal. In lieu of this
observation, may I therefore, ask if the head of the Merchandise Control Division is
aware of this malpractice?chanrobles.com : virtual law library
Answer: Merchandise Control Guards and all other personnel are prohibited from
appropriating confiscated items for their own consumption or use. Two locked
containers are installed at the Main Gate area for deposit of confiscated items and
the OPM evidence custodian controls access to these containers.
Merchandise Control Guards are permitted to eat their meals at their worksite due
to heavy workload. Complaints regarding merchandise control guards procedure or
actions may be made directly at the Office of the Provost Marshal for immediate and
necessary action. Specific dates and time along with details of suspected violations
would be most appreciated. Telephone 4-3430/4-3234 for further information or to
report noted or suspected irregularities. Exhibits E & E-1." (Rollo, pp. 11-12)
The private respondent was the only one who was named "Auring" in the Office of
the Provost Marshal. That the private respondent was the same "Auring" referred to
in the POD was conclusively proven when on February 7, 1978, petitioner M. H.
Wylie wrote her a letter of apology for the "inadvertent" publication. The private
respondent then commenced an action for damages in the Court of First Instance of
Zambales (now Regional Trial Court) against M. H. Wylie, Capt. James Williams and
the U. S. Naval Base. She alleged that the article constituted false, injurious, and
malicious defamation and libel tending to impeach her honesty, virtue and
reputation exposing her to public hatred, contempt and ridicule; and that the libel
was published and circulated in the English language and read by almost all the U.
S. Naval Base personnel. She prayed that she be awarded P300,000.00 as moral
damages exemplary damages which the court may find proper; and P50,000.00 as
attorneys fees.
In response to the complaint, the defendants filed a motion to dismiss anchored on
three grounds:chanrobles.com : virtual law library
"1. Defendants M. H. Wylie and Capt. James Williams acted in the performance of
their official functions as officers of the United States Navy and are, therefore,
immune from suit;
2. The United States Naval Base is an instrumentality of the US government which
cannot be sued without its consent; and

3. This Court has no jurisdiction over the subject matter as well as the parties in this
case." (Record on Appeal, pp. 133-134)
The motion was, however, denied.
In their answer, the defendants reiterated the lack of jurisdiction of the court over
the case.
In its decision, the trial court ruled that the acts of defendants M. H. Wylie and Capt.
James Williams were not official acts of the government of the United States of
America in the operation and control of the Base but personal and tortious acts
which are exceptions to the general rule that a sovereign country cannot be sued in
the court of another country without its consent. In short, the trial court ruled that
the acts and omissions of the two US officials were not imputable against the US
government but were done in the individual and personal capacities of the said
officials. The trial court dismissed the suit against the US Naval Base. The
dispositive portion of the decision reads as follows:jgc:chanrobles.com.ph
"WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants jointly and severally, as follows:chanrob1es virtual 1aw library
1) Ordering defendants M. H. Wylie and Capt. James Williams to pay the plaintiff
Aurora Rarang the sum of one hundred thousand (100,000.00) pesos by way of
moral and exemplary damages;
2) Ordering defendants M. H. Wylie and Capt. James Williams to pay the plaintiff the
sum of thirty thousand (P30,000.00) pesos by way of attorneys fees and expenses
of litigation; and
3) To pay the costs of this suit.
Counterclaims are dismissed.
Likewise, the suit against the U. S. Naval Base is ordered dismissed." (Record on
Appeal, p. 154)
On appeal, the petitioners reiterated their stance that they are immune from suit
since the subject publication was made in their official capacities as officers of the
U. S. Navy. They also maintained that they did not intentionally and maliciously
cause the questioned publication.cralawnad
The private respondent, not satisfied with the amount of damages awarded to her,
also appealed the trial courts decision.
Acting on these appeals, the Intermediate Appellate Court, now Court of Appeals,
modified the trial courts decision, to wit:jgc:chanrobles.com.ph
"WHEREFORE, the judgment of the court below is modified so that the defendants
are ordered to pay the plaintiff, jointly and severally, the sum of P175,000.00 as

moral damages and the sum of P60,000.00 as exemplary damages. The rest of the
judgment appealed from is hereby affirmed in toto. Costs against the defendantsappellants." (Rollo, p. 44)
The appellate court denied a motion for reconsideration filed by the petitioners.
Hence, this petition.
In a resolution dated March 9, 1987, we gave due course to the petition.
The petitioner persist that they made the questioned publication in the performance
of their official functions as administrative assistant, in the case of M. H. Wylie, and
commanding officer, in the case of Capt. James Williams of the US Navy assigned to
the U. S. Naval Station, Subic Bay, Olongapo City and were, therefore, immune from
suit for their official actions.
In the case of United States of America v. Guinto (182 SCRA 644 [1990]), we
discussed the principle of the state immunity from suit as
follows:jgc:chanrobles.com.ph
"The rule that a state may not be sued without its consent, now expressed in Article
XVI, Section 3, of the 1987 Constitution, is one of the generally accepted principles
of international law that we have adopted as part of the law of our land under
Article II, Section 2."cralaw virtua1aw library
x
x
x
Even without such affirmation, we would still be bound by the generally accepted
principles of international law under the doctrine of incorporation. Under this
doctrine, as accepted by the majority of states, such principles are deemed
incorporated in the law of every civilized state as a condition and consequence of its
membership in the society of nations. Upon its admission to such society, the state
is automatically obligated to comply with these principles in its relations with other
states.
As applied to the local state, the doctrine of state immunity is based on the
justification given by Justice Holmes that there can be no legal right against the
authority which makes the law on which the right depends. ((Kawanakoa v.
Polybank, 205 U.S. 349) There are other practical reasons for the enforcement of
the doctrine. In the case of the foreign state sought to be impleaded in the local
jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet
imperium. All states are sovereign equals and cannot assert jurisdiction over one
another. a contrary disposition would, in the language of a celebrated case, unduly
vex the peace of nations. (Da Haber v. Queen of Portugal, 17 Q. B. 171)
While the doctrine appears to prohibit only suits against the state without its
consent, it is also applicable to complaints filed against officials of the state for acts
allegedly performed by them in the discharge of their duties. the rule is that if the
judgment against such officials will require the state itself to perform an affirmative
act to satisfy the same, such as the appropriation of the amount needed to pay the

damages awarded against them, the suit must be regarded as against the state
itself although it has not been formally impleaded. (Garcia v. Chief of Staff, 16 SCRA
120) In such a situation, the state may move to dismiss the complaint on the ground
that it has been filed without its consent.
The doctrine is sometimes derisively called the royal prerogative of dishonesty
because of the privilege it grants the state to defeat any legitimate claim against it
by simply invoking its non-suability. That is hardly fair, at least in democratic
societies, for the state is not an unfeeling tyrant unmoved by the valid claims of its
citizens. In fact, the doctrine is not absolute and does not say the state may not be
sued under any circumstance. On the contrary, the rule says that the state may not
be sued without its consent, which clearly imports that it may be sued if it
consents.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
The consent of the state to be sued may be manifested expressly or impliedly.
Express consent may be embodied in a general law or a special law. Consent is
implied when the state enters into a contract it itself commences litigation.
x
x
x
The above rules are subject to qualification. Express consent is effected only by the
will of the legislature through the medium of a duly enacted statute. (Republic v.
Purisima, 78 SCRA 470) We have held that not all contracts entered into by the
government will operate as a waiver of its non-suability; distinction must be made
between its sovereign and proprietary acts. (United States of America v. Ruiz, 136
SCRA 487) As for the filing of a complaint by the government, suability will result
only where the government is claiming affirmative relief from the defendant. (Lim v.
Brownell, 107 Phil. 345)" (at pp. 652-655).
In the same case we had opportunity to discuss extensively the nature and extent
of immunity from suit of United States personnel who are assigned and stationed in
Philippine territory, to wit:jgc:chanrobles.com.ph
"In the case of the United States of America, the customary rule of international law
on state immunity is expressed with more specificity in the RP-US Bases Treaty.
Article III thereof provides as follows:chanrob1es virtual 1aw library
It is mutually agreed that the United States shall have the rights, power and
authority within the bases which are necessary for the establishment, use,
operation and defense thereof or appropriate for the control thereof and all the
rights, power and authority within the limits of the territorial waters and air space
adjacent to, or in the vicinity of, the bases which are necessary to provide access to
them or appropriate for their control.
The petitioners also rely heavily on Baer v. Tizon, (57 SCRA 1) along with several
other decisions, to support their position that they are not suable in the cases
below, the United States not having waived its sovereign immunity from suit. It is
emphasized that in Baer, the Court held:chanrob1es virtual 1aw library
The invocation of the doctrine of immunity from suit of a foreign state without its

consent is appropriate. More specifically, insofar as alien armed forces is concerned,

the starting point is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas
corpus petition for the release of petitioners confined by American army authorities,
Justice Hilado, speaking for the Court, cited Coleman v. Tennessee, where it was
explicitly declared: It is well settled that a foreign army, permitted to march
through a friendly country or to be stationed in it, by permission of its government
or sovereign, is exempt from the civil and criminal jurisdiction of the place. Two
years later, in Tubb and Tedrow v. Griess, this Court relied on the ruling in Raquiza v.
Bradford and cited in support thereof excepts from the works of the following
authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde,
and McNair and Lauterpacht. Accuracy demands the clarification that after the
conclusion of he Philippine-American Military Bases Agreement, the treaty
provisions should control on such matter, the assumption being that there was a
manifestation of the submission to jurisdiction on the part of the foreign power
whenever appropriate. More to the point is Syquia v. Almeda Lopez, where plaintiffs
as lessors sued the Commanding General of the United States Army in the
Philippines, seeking the restoration to them of the apartment buildings they owned
leased to the United States armed forces station in the Manila area. a motion to
dismiss on the ground of non-suability was filed and upheld by respondent Judge.
The matter was taken to this Court in a mandamus proceeding. It failed. It was the
ruling that respondent Judge acted correctly considering that the action must be
considered as one against the U.S. Government. The opinion of Justice Montemayor
continued: It is clear that the courts of he Philippines including the Municipal Court
of Manila have no jurisdiction over the present case for unlawful detainer. The
question of lack of jurisdiction was raised and interposed at the very beginning of
the action. The U.S. Government has not given its consent to the filing of this suit
which is essentially against her, though not in name. Moreover, this is not only a
case of a citizen filing a suit against his own Government without the latters
consent but it is of a citizen filing an action against a foreign government without
said governments consent, which renders more obvious the lack of jurisdiction of
the courts of his country. The principles of law behind this rule are so elementary
and of such general acceptance that we deem it unnecessary to cite authorities in
support thereof.
x
x
x
It bears stressing at this point that the above observations do not confer on the
United States of America a blanket immunity for all acts done by it or its agents in
the Philippines. Neither may the other petitioners claim that they are also insulated
from suit in this country merely because they have acted as agents of the United
States in the discharge of their official functions.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
There is no question that the United States of America, like any other state, will be
deemed to have impliedly waived its non-suability if it has entered into a contract in
its proprietary or private capacity. It is only when the contract involves its sovereign
or governmental capacity that no such waiver may be implied. This was our ruling in
United States of America v. Ruiz, (136 SCRA 487) where the transaction in question
dealt with the improvement of the wharves in the naval installation at Subic Bay. As
this was a clearly governmental function, we held that the contract did not operate

to divest the United States of its sovereign immunity from suit. In the words of
Justice Vicente Abad Santos:chanrob1es virtual 1aw library
The traditional rule of immunity excepts a State from being sued in the courts of
another State without its consent or waiver. This rule is a necessary consequence of
the principles of independence and equality of States. However, the rules of
International Law are not petrified; they are constantly developing and evolving.
And because the activities of states have multiplied, it has been necessary to
distinguish them - between sovereign and governmental acts (jure imperii) and
private, commercial and proprietary acts (jure gestionis). The result is that State
immunity now extends only to acts jure imperii. The restrictive application of State
immunity is now the rule in the United States, the United Kingdom and other states
in Western Europe.
x
x
x
The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State may be said to have
descended to the level of an individual and can thus be deemed to have tacitly
given its concent to be sued only when it enters into business contracts. It does not
apply where the contract relates to the exercise of its sovereign functions. In this
case the projects are integral part of the naval base which is devoted to the defense
of both the United States and the Philippines, indisputably a function of the
government of the highest order; they are not utilized for nor dedicated to
commercial or business purposes.
The other petitioners in the cases before us all aver they have acted in the
discharge of their official functions as officers or agents of the United States.
However, this is a matter of evidence. The charges against them may not be
summarily dismissed on their mere assertion that their acts are imputable to the
United States of America, which has not given its consent to be sued. In fact, the
defendants are sought to be held answerable for personal torts in which the United
States itself is not involved. If found liable, they and they alone must satisfy the
judgment." (At pp. 655-658)
In the light of these precedents, we proceed to resolve the present case.
The POD was published under the direction and authority of the commanding
officer, U.S. Naval Station Subic Bay. The administrative assistant, among his other
duties, is tasked to prepare and distribute the POD. On February 3, 1978, when the
questioned article was published in the POD, petitioner Capt. James Williams was
the commanding officer while petitioner M.H. Wylie was the administrative assistant
of the US Naval Station of Subic bay.
The NAVSTA ACTION LINE INQUIRY is a regular feature of the POD. It is a telephone
answering device in the office of the Administrative Assistant. The Action Line is
intended to provide personnel access to the Commanding Officer on matters they
feel should be brought to his attention for correction or investigation. The matter of
inquiry may be phoned in or mailed to the POD. (TSN, September 9, 1980, pp. 12-

13, Jerry Poblon) According to M. H. Wylie, the action line naming "Auring" was
received about three (3) weeks prior to its being published in the POD on February
3, 1978. It was forwarded to Rarangs office of employment, the Provost Marshal, for
comment. The Provost Marshal offices response." . . included a short note stating
that if the article was published, to remove the name." (Exhibit 8-A, p. 5) The
Provost Marshals response was then forwarded to the executive officer and to the
commanding officer for approval. The approval of the commanding officer was
forwarded to the office of the Administrative Assistant for inclusion in the POD. A
certain Mrs. Dologmodin, a clerk typist in the office of the Administrative Assistant
prepared the smooth copy of the POD. Finally, M. H. Wylie, the administrative
assistant signed the smooth copy of the POD but failed to notice the reference to
"Auring" in the action line inquiry. (Exh. 8-A, pp. 4-5, Questions Nos. 14-15)
There is no question, therefore, that the two (2) petitioners actively participated in
screening the features and articles in the POD as part of their official functions.
Under the rule that U.S. officials in the performance of their official functions are
immune from suit, then it should follow that the petitioners may not be held liable
for the questioned publication.
It is to be noted, however, that the petitioners were sued in their personal capacities
for their alleged tortious acts in publishing a libelous article.
The question, therefore, arises - are American naval officers who commit a crime or
tortious act while discharging official functions still covered by the principle of state
immunity from suit? Pursuing the question further, does the grant of rights, power,
and authority to the United States under the RP-US Bases Treaty cover immunity of
its officers from crimes and torts? Our answer is No.
Killing a person in cold blood while on patrol duty, running over a child while driving
with reckless imprudence on an official trip, or slandering a person during office
hours could not possibly be covered by the immunity agreement. Our laws and, we
presume, those of the United States do not allow the commission of crimes in the
name of official duty.
The case of Chavez v. Sandiganbayan, 193 SCRA 282 [1991] gives the law on
immunity from suit of public officials:jgc:chanrobles.com.ph
"The general rule is that public officials can be held personally accountable for acts
claimed to have been performed in connection with official duties where they have
acted ultra vires or where there is showing of bad faith.chanrobles law library
x
x
x
"Moreover, the petitioners argument that the immunity proviso under Section 4(a)
of Executive Order No. 1 also extends to him is not well-taken. A mere invocation of
the immunity clause does not ipso facto result in the charges being automatically
dropped.
"In the case of Presidential Commission on Good Government v. Pea (159 SCRA
556 [1988] then Chief Justice Claudio Teehankee, added a clarification of the

immunity accorded PCGG officials under Section 4(a) of Executive Order No. 1 as
follows:jgc:chanrobles.com.ph
"With respect to the qualifications expressed by Mr. Justice Feliciano in his separate
opinion, I just wish to point out two things: First, the main opinion does not claim
absolute immunity for he members of the Commission. The cited section of
Executive Order No. 1 provides the Commissions members immunity from suit thus:
No civil action shall lie against the Commission or any member thereof for anything
done or omitted in the discharge of the task contemplated by this order. No
absolute immunity like that sought by Mr. Marcos in his Constitution for himself and
his subordinates is herein involved. It is understood that the immunity granted the
members of the Commission by virtue of the unimaginable magnitude of its task to
recover the plundered wealth and the States exercise of police power was immunity
from liability for damages in the official discharge of the task granted the members
of the Commission much in the same manner that judges are immune from suit in
the official discharge of the functions of their office. . . . (at pp. 581-582).
x
x
x
"Immunity from suit cannot institutionalize irresponsibility and non-accountability
nor grant a privileged status not claimed by any other official of the Republic. (id., at
page 586)
"Where the petitioner exceeds his authority as Solicitor General, acts in bad faith,
or, as contended by the private respondent, maliciously conspir(es) with the PCGG
commissioners in persecuting respondent Enrile by filing against him an evidently
baseless suit in derogation of the latters constitutional rights and liberties (Rollo, p.
417), there can be no question that a complaint for damages does not confer a
license to persecute or recklessly injure another. The actions governed by Articles
19, 20, 21 and 32 of the Civil Code on Human Relations may be taken against public
officers or private citizens alike. . . ." (pp. 289-291).
We apply the same ruling to this case.
The subject article in US Newsletter POD dated February 3, 1978 mentions a certain
"Auring" as." . . a disgrace to her division and to the Office of the Provost Marshal."
The same article explicitly implies that Auring was consuming and appropriating for
herself confiscated items like cigarettes and foodstuffs. There is no question that
the Auring alluded to in the Article was the private respondent as she was the only
Auring in the Office of the Provost Marshal. Moreover, as a result of this article, the
private respondent was investigated by her supervisor. Before the article came out,
the private respondent had been the recipient of commendations by her superiors
for honesty in the performance of her duties.
It may be argued that Captain James Williams as commanding officer of the naval
base is far removed in the chain of command from the offensive publication and it
would be asking too much to hold him responsible for everything which goes wrong
on the base. This may be true as a general rule. In this particular case, however, the
records show that the offensive publication was sent to the commanding officer for
approval and he approved it. The factual findings of the two courts below are based

on the records. The petitioners have shown no convincing reasons why our usual
respect for the findings of the trial court and the respondent court should be
withheld in this particular case and why their decisions should be reversed.
Article 2176 of the Civil Code prescribes a civil liability for damages caused by a
persons act or omission constituting fault or negligence, to
wit:jgc:chanrobles.com.ph
"Article 2176. Whoever by act or omission, causes damage to another, there being
fault or negligence is obliged to pay for the damage done. Such fault or negligence,
if there is no pre-existing contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter."cralaw virtua1aw library
"Fault" or "negligence" in this Article covers not only acts "not punishable by law"
but also acts criminal in character, whether intentional or voluntary or negligent."
(Andamo v. Intermediate Appellate Court, 191 SCRA 195 [1990]).
Moreover, Article 2219(7) of the Civil Code provides that moral damages may be
recovered in case of libel, slander or any other form of defamation. In effect, the
offended party in these cases is given the right to receive from the guilty party
moral damages for injury to his feeling and reputation in addition to punitive or
exemplary damages. (Occena v. Icamina, 181 SCRA 328 [1990]. In another case,
Heirs of Basilisa Justiva v. Gustilo, 7 SCRA 72 [1963], we ruled that the allegation of
forgery of documents could be a defamation, which in the light of Article 2219(7) of
the Civil Code could by analogy be ground for payment of moral damages,
considering the wounded feelings and besmirched reputation of the
defendants.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
Indeed the imputation of theft contained in the POD dated February 3, 1978 is a
defamation against the character and reputation of the private Respondent.
Petitioner Wylie himself admitted that the Office of the Provost Marshal explicitly
recommended the deletion of the name Auring if the article were to be published.
The petitioners, however, were negligent because under their direction they issued
the publication without deleting the name "Auring." Such act or omission is ultra
vires and cannot be part of official duty. it was a tortious act which ridiculed the
private Respondent. As a result of the petitioners act, the private respondent,
according to the record, suffered besmirched reputation, serious anxiety, wounded
feeling and social humiliation, specially so, since the article was baseless and false.
The petitioners, alone, in their personal capacities are liable for the damages they
caused the private Respondent.
WHEREFORE, the petition is hereby DISMISSED. The questioned decision and
resolution of the then Intermediate Appellate Court, now Court of Appeals, are
AFFIRMED.
Bidin, Davide, Jr. and Romero, JJ., concur.
Feliciano, J., took no part.
[G.R. No. 125865. January 28, 2000.]

JEFFREY LIANG (HUEFENG), Petitioner, v. PEOPLE OF THE

PHILIPPINES, Respondent.
DECISION
YNARES-SANTIAGO, J.:
Petitioner is an economist working with the Asian Development Bank (ADB).
Sometime in 1994, for allegedly uttering defamatory words against fellow ADB
worker Joyce Cabal, he was charged before the Metropolitan Trial Court (MeTC) of
Mandaluyong City with two counts of grave oral defamation docketed as Criminal
Cases Nos. 53170 and 53171. Petitioner was arrested by virtue of a warrant issued
by the MeTC. After fixing petitioners bail at P2,400.00 per criminal charge, the
MeTC released him to the custody of the Security Officer of ADB. The next day, the
MeTC judge received an "office of protocol" from the Department of Foreign Affairs
(DFA) stating that petitioner is covered by immunity from legal process under
Section 45 of the Agreement between the ADB and the Philippine Government
regarding the Headquarters of the ADB (hereinafter Agreement) in the country.
Based on the said protocol communication that petitioner is immune from suit, the
MeTC judge without notice to the prosecution dismissed the two criminal cases. The
latter filed a motion for reconsideration which was opposed by the DFA. When its
motion was denied, the prosecution filed a petition for certiorari and mandamus
with the Regional Trial Court (RTC) of Pasig City which set aside the MeTC rulings
and ordered the latter court to enforce the warrant of arrest it earlier issued. After
the motion for reconsideration was denied, petitioner elevated the case to this
Court via a petition for review arguing that he is covered by immunity under the
Agreement and that no preliminary investigation was held before the criminal cases
were filed in court.chanrobles.com.ph:red
The petition is not impressed with merit.
First, courts cannot blindly adhere and take on its face the communication from the
DFA that petitioner is covered by any immunity. The DFAs determination that a
certain person is covered by immunity is only preliminary which has no binding
effect in courts. In receiving ex-parte the DFAs advice and in motu proprio
dismissing the two criminal cases without notice to the prosecution, the latters
right to due process was violated. It should be noted that due process is a right of
the accused as much as it is of the prosecution. The needed inquiry in what capacity
petitioner was acting at the time of the alleged utterances requires for its resolution
evidentiary basis that has yet to be presented at the proper time. 1 At any rate, it
has been ruled that the mere invocation of the immunity clause does not ipso facto
result in the dropping of the charges. 2
Second, under Section 45 of the Agreement which provides:jgc:chanrobles.com.ph
"Officers and staff of the Bank including for the purpose of this Article experts and
consultants performing missions for the Bank shall enjoy the following privileges
and immunities:chanrob1es virtual 1aw library

a.) immunity from legal process with respect to acts performed by them in their
official capacity except when the Bank waives the immunity."cralaw virtua1aw
library
the immunity mentioned therein is not absolute, but subject to the exception that
the act was done in "official capacity." It is therefore necessary to determine if
petitioners case falls within the ambit of Section 45(a). Thus, the prosecution
should have been given the chance to rebut the DFA protocol and it must be
accorded the opportunity to present its controverting evidence, should it so desire.
Third, slandering a person could not possibly be covered by the immunity
agreement because our laws do not allow the commission of a crime, such as
defamation, in the name of official duty. 3 The imputation of theft is ultra vires and
cannot be part of official functions. It is well-settled principle of law that a public
official may be liable in his personal private capacity for whatever damage he may
have caused by his act done with malice or in bad faith or beyond the scope of his
authority or jurisdiction. 4 It appears that even the governments chief legal
counsel, the Solicitor General, does not support the stand taken by petitioner and
that of the DFA.
Fourth, under the Vienna Convention on Diplomatic Relations, a diplomatic agent,
assuming petitioner is such, enjoys immunity from criminal jurisdiction of the
receiving state except in the case of an action relating to any professional or
commercial activity exercised by the diplomatic agent in the receiving state outside
his official functions. 5 As already mentioned above, the commission of a crime is
not part of official duty.
Finally, on the contention that there was no preliminary investigation conducted,
suffice it to say that preliminary investigation is not a matter of right in cases
cognizable by the MeTC such as the one at bar. 6 Being purely a statutory right,
preliminary investigation may be invoked only when specifically granted by law. 7
The rule on criminal procedure is clear that no preliminary investigation is required
in cases falling within the jurisdiction of the MeTC. 8 Besides, the absence of
preliminary investigation does not affect the courts jurisdiction nor does it impair
the validity of the information or otherwise render it defective. 9
WHEREFORE, the petition is DENIED.chanrobles virtual lawlibrary
SO ORDERED.
Davide, Jr., C.J., Puno, Kapunan and Pardo, JJ., concur.
G.R. No. 152318

April 16, 2009

DEUTSCHE GESELLSCHAFT FR TECHNISCHE ZUSAMMENARBEIT, also

known as GERMAN AGENCY FOR TECHNICAL COOPERATION, (GTZ) HANS
PETER PAULENZ and ANNE NICOLAY, Petitioners,
vs.

HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS, Labor Arbiter of

the Arbitration Branch, National Labor Relations Commission, and
BERNADETTE CARMELLA MAGTAAS, CAROLINA DIONCO, CHRISTOPHER
RAMOS, MELVIN DELA PAZ, RANDY TAMAYO and EDGARDO
RAMILLO, Respondents.
DECISION
TINGA, J.:
On 7 September 1971, the governments of the Federal Republic of Germany and the
Republic of the Philippines ratified an Agreement concerning Technical Co-operation
(Agreement) in Bonn, capital of what was then West Germany. The Agreement
affirmed the countries "common interest in promoting the technical and economic
development of their States, and recogni[zed] the benefits to be derived by both
States from closer technical co-operation," and allowed for the conclusion of
"arrangements concerning individual projects of technical co-operation." 1 While the
Agreement provided for a limited term of effectivity of five (5) years, it nonetheless
was stated that "[t]he Agreement shall be tacitly extended for successive periods of
one year unless either of the two Contracting Parties denounces it in writing three
months prior to its expiry," and that even upon the Agreements expiry, its
provisions would "continue to apply to any projects agreed upon x x x until their
completion."2
On 10 December 1999, the Philippine government, through then Foreign Affairs
Secretary Domingo Siazon, and the German government, agreed to an Arrangement
in furtherance of the 1971 Agreement. This Arrangement affirmed the common
commitment of both governments to promote jointly a project called, Social Health
InsuranceNetworking and Empowerment (SHINE), which was designed to "enable
Philippine familiesespecially poor onesto maintain their health and secure health
care of sustainable quality."3 It appears that SHINE had already been in existence
even prior to the effectivity of the Arrangement, though the record does not indicate
when exactly SHINE was constituted. Nonetheless, the Arrangement stated the
various obligations of the Filipino and German governments. The relevant provisions
of the Arrangement are reproduced as follows:
3. The Government of the Federal Republic of Germany shall make the following
contributions to the project.
It shall
(a) second
- one expert in health economy, insurance and health systems for up to
48 expert/months,

- one expert in system development for up to 10 expert/months

- short-term experts to deal with special tasks for a total of up to 18
expert/months,
- project assistants/guest students as required, who shall work on the
project as part of their basic and further training and assume specific
project tasks under the separately financed junior staff promotion
programme of the Deutsche Gesellschaft fr Technische
Zusammenarbeit (GTZ);
(b) provide in situ
- short-term experts to deal with diverse special tasks for a total of up
to 27 expert/months,
- five local experts in health economy, health insurance, community
health systems, information technology, information systems, training
and community mobilization for a total of up to 240 expert/months,
- local and auxiliary personnel for a total of up to 120 months;
(c) supply inputs, in particular
- two cross-country vehicles,
- ten computers with accessories,
- office furnishings and equipment
up to a total value of DM 310,000 (three hundred and ten thousand
Deutsche Mark);
(c) meet
- the cost of accommodation for the seconded experts and their
families in so far as this cost is not met by the seconded experts
themselves,
- the cost of official travel by the experts referred to in sub-paragraph
(a) above within and outside the Republic of the Philippines,
- the cost of seminars and courses,
- the cost of transport and insurance to the project site of inputs to be
supplied pursuant to sub-paragraph (c) above, excluding the charges
and storage fees referred to in paragraph 4(d) below,

- a proportion of the operating and administrative costs;

xxx
4. The Government of the Republic of the Philippines shall make the following
contributions to the project:
It shall
(a) provide the necessary Philippine experts for the project, in particular one
project coordinator in the Philippine Health Insurance Corporation
(Philhealth), at least three further experts and a sufficient number of
administrative and auxiliary personnel, as well as health personnel in the
pilot provinces and in the other project partners, in particular one responsible
expert for each pilot province and for each association representing the
various target groups,
- release suitably qualified experts from their duties for attendance at
the envisaged basic and further training activities; it shall only
nominate such candidates as have given an undertaking to work on
the project for at least five years after completing their training and
shall ensure that these Philippine experts receive appropriate
remuneration,
- ensure that the project field offices have sufficient expendables,
- make available the land and buildings required for the project;
(b) assume an increasing proportion of the running and operating costs of the
project;
(c) afford the seconded experts any assistance they may require in carrying
out the tasks assigned to them and place at their disposal all necessary
records and documents;
(d) guarantee that
- the project is provided with an itemized budget of its own in order to
ensure smooth continuation of the project.
- the necessary legal and administrative framework is created for the
project,
- the project is coordinated in close cooperation with other national and
international agencies relevant to implementation,

- the inputs supplied for the project on behalf of the Government of the
Federal Republic of Germany are exempted from the cost of licenses,
harbour dues, import and export duties and other public charges and
fees, as well as storage fees, or that any costs thereof are met, and
that they are cleared by customs without delay. The aforementioned
exemptions shall, at the request of the implementing agencies also
apply to inputs procured in the Republic of the Philippines,
- the tasks of the seconded experts are taken over as soon as possible
by Philippine experts,
- examinations passed by Philippine nationals pursuant to this
Arrangement are recognized in accordance with their respective
standards and that the persons concerned are afforded such
opportunities with regard to careers, appointments and advancement
as are commensurate with their training.4
In the arraignment, both governments likewise named their respective
implementing organizations for SHINE. The Philippines designated the Department
of Health (DOH) and the Philippine Health Insurance Corporation (Philhealth) with
the implementation of SHINE. For their part, the German government "charge[d] the
Deustche Gesellschaft fr Technische Zusammenarbeit[ 5 ] (GTZ[6 ]) GmbH,
Eschborn, with the implementation of its contributions." 7
Private respondents were engaged as contract employees hired by GTZ to work for
SHINE on various dates between December of 1998 to September of 1999.
Bernadette Carmela Magtaas was hired as an "information systems manager and
project officer of SHINE;"8 Carolina Dionco as a "Project Assistant of
SHINE;"9 Christopher Ramos as "a project assistant and liason personnel of NHI
related SHINE activities by GTZ;"10 Melvin Dela Paz and Randy Tamayo as
programmers;11 and Edgardo Ramilo as "driver, messenger and multipurpose
service man."12 The employment contracts of all six private respondents all
specified Dr. Rainer Tollkotter, identified as an adviser of GTZ, as the "employer." At
the same time, all the contracts commonly provided that "[i]t is mutually agreed
and understood that [Dr. Tollkotter, as employer] is a seconded GTZ expert who is
hiring the Employee on behalf of GTZ and for a Philippine-German bilateral project
named Social Health InsuranceNetworking and Empowerment (SHINE) which will
end at a given time."13
In September of 1999, Anne Nicolay (Nicolay), a Belgian national, assumed the post
of SHINE Project Manager. Disagreements eventually arose between Nicolay and
private respondents in matters such as proposed salary adjustments, and the
course Nicolay was taking in the implementation of SHINE different from her
predecessors. The dispute culminated in a letter 14 dated 8 June 2000, signed by the
private respondents, addressed to Nicolay, and copies furnished officials of the
DOH, Philheath, and the director of the Manila office of GTZ. The letter raised

several issues which private respondents claim had been brought up several times
in the past, but have not been given appropriate response. It was claimed that
SHINE under Nicolay had veered away from its original purpose to facilitate the
development of social health insurance by shoring up the national health insurance
program and strengthening local initiatives, as Nicolay had refused to support local
partners and new initiatives on the premise that community and local government
unit schemes were not sustainablea philosophy that supposedly betrayed
Nicolays lack of understanding of the purpose of the project. Private respondents
further alleged that as a result of Nicolays "new thrust, resources have been used
inappropriately;" that the new management style was "not congruent with the
original goals of the project;" that Nicolay herself suffered from "cultural
insensitivity" that consequently failed to sustain healthy relations with SHINEs
partners and staff.
The letter ended with these ominous words:
The issues that we [the private respondents] have stated here are very crucial to us
in working for the project. We could no longer find any reason to stay with the
project unless ALL of these issues be addressed immediately and appropriately. 15
In response, Nicolay wrote each of the private respondents a letter dated 21 June
2000, all similarly worded except for their respective addressees. She informed
private respondents that the "projects orientations and evolution" were decided in
consensus with partner institutions, Philhealth and the DOH, and thus no longer
subject to modifications. More pertinently, she stated:
You have firmly and unequivocally stated in the last paragraph of your 8th June
2000 letter that you and the five other staff "could no longer find any reason to stay
with the project unless ALL of these issues be addressed immediately and
appropriately." Under the foregoing premises and circumstances, it is now
imperative that I am to accept your resignation, which I expect to receive as soon as
possible.16
Taken aback, private respondents replied with a common letter, clarifying that their
earlier letter was not intended as a resignation letter, but one that merely intended
to raise attention to what they perceived as vital issues. 17Negotiations ensued
between private respondents and Nicolay, but for naught. Each of the private
respondents received a letter from Nicolay dated 11 July 2000, informing them of
the pre-termination of their contracts of employment on the grounds of "serious and
gross insubordination, among others, resulting to loss of confidence and trust." 18
On 21 August 2000, the private respondents filed a complaint for illegal dismissal
with the NLRC. Named as respondents therein where GTZ, the Director of its Manila
office Hans Peter Paulenz, its Assistant Project Manager Christian Jahn, and Nicolay.

On 25 October 2005, GTZ, through counsel, filed a Motion to Dismiss, on the ground
that the Labor Arbiter had no jurisdiction over the case, as its acts were undertaken
in the discharge of the governmental functions and sovereign acts of the
Government of the Federal Republic of Germany. This was opposed by private
respondents with the arguments that GTZ had failed to secure a certification that it
was immune from suit from the Department of Foreign Affairs, and that it was GTZ
and not the German government which had implemented the SHINE Project and
entered into the contracts of employment.
On 27 November 2000, the Labor Arbiter issued an Order 19 denying the Motion to
Dismiss. The Order cited, among others, that GTZ was a private corporation which
entered into an employment contract; and that GTZ had failed to secure from the
DFA a certification as to its diplomatic status.
On 7 February 2001, GTZ filed with the Labor Arbiter a "Reiterating Motion to
Dismiss," again praying that the Motion to Dismiss be granted on the jurisdictional
ground, and reprising the arguments for dismissal it had earlier raised. 20 No action
was taken by the Labor Arbiter on this new motion. Instead, on 15 October 2001,
the Labor Arbiter rendered a Decision21 granting the complaint for illegal dismissal.
The Decision concluded that respondents were dismissed without lawful cause,
there being "a total lack of due process both substantive and procedural
[sic]."22 GTZ was faulted for failing to observe the notice requirements in the labor
law. The Decision likewise proceeded from the premise that GTZ had treated the
letter dated 8 June 2000 as a resignation letter, and devoted some focus in
debunking this theory.
The Decision initially offered that it "need not discuss the jurisdictional aspect
considering that the same had already been lengthily discussed in the Order
de[n]ying respondents Motion to Dismiss." 23 Nonetheless, it proceeded to discuss
the jurisdictional aspect, in this wise:
Under pain of being repetitious, the undersigned Labor Arbiter has jurisdiction to
entertain the complaint on the following grounds:
Firstly, under the employment contract entered into between complainants
and respondents, specifically Section 10 thereof, it provides that "contract
partners agree that his contract shall be subject to the LAWS of the
jurisdiction of the locality in which the service is performed."
Secondly, respondent having entered into contract, they can no longer invoke
the sovereignty of the Federal Republic of Germany.
Lastly, it is imperative to be immune from suit, respondents should have
secured from the Department of Foreign Affairs a certification of respondents
diplomatic status and entitlement to diplomatic privileges including immunity

from suits. Having failed in this regard, respondents cannot escape liability
from the shelter of sovereign immunity.[sic]24
Notably, GTZ did not file a motion for reconsideration to the Labor Arbiters
Decision or elevate said decision for appeal to the NLRC. Instead, GTZ opted
to assail the decision by way of a special civil action for certiorari filed with
the Court of Appeals.25 On 10 December 2001, the Court of Appeals
promulgated a Resolution26 dismissing GTZs petition, finding that "judicial
recourse at this stage of the case is uncalled for[,] [t]he appropriate remedy
of the petitioners [being] an appeal to the NLRC x x x." 27 A motion for
reconsideration to this Resolution proved fruitless for GTZ. 28
Thus, the present petition for review under Rule 45, assailing the decision and
resolutions of the Court of Appeals and of the Labor Arbiter. GTZs arguments center
on whether the Court of Appeals could have entertained its petition for certiorari
despite its not having undertaken an appeal before the NLRC; and whether the
complaint for illegal dismissal should have been dismissed for lack of jurisdiction on
account of GTZs insistence that it enjoys immunity from suit. No special arguments
are directed with respect to petitioners Hans Peter Paulenz and Anne Nicolay,
respectively the then Director and the then Project Manager of GTZ in the
Philippines; so we have to presume that the arguments raised in behalf of GTZs
alleged immunity from suit extend to them as well.
The Court required the Office of the Solicitor General (OSG) to file a Comment on
the petition. In its Comment dated 7 November 2005, the OSG took the side of GTZ,
with the prayer that the petition be granted on the ground that GTZ was immune
from suit, citing in particular its assigned functions in implementing the SHINE
programa joint undertaking of the Philippine and German governments which was
neither proprietary nor commercial in nature.
The Court of Appeals had premised the dismissal of GTZs petition on its procedural
misstep in bypassing an appeal to NLRC and challenging the Labor Arbiters
Decision directly with the appellate court by way of a Rule 65 petition. In dismissing
the petition, the
Court of Appeals relied on our ruling in Air Service Cooperative v. Court of
Appeals.29 The central issue in that case was whether a decision of a Labor Arbiter
rendered without jurisdiction over the subject matter may be annulled in a petition
before a Regional Trial Court. That case may be differentiated from the present case,
since the Regional Trial Court does not have original or appellate jurisdiction to
review a decision rendered by a Labor Arbiter. In contrast, there is no doubt, as
affirmed by jurisprudence, that the Court of Appeals has jurisdiction to review, by
way of its original certiorari jurisdiction, decisions ruling on complaints for illegal
dismissal.

Nonetheless, the Court of Appeals is correct in pronouncing the general rule that the
proper recourse from the decision of the Labor Arbiter is to first appeal the same to
the NLRC. Air Services is in fact clearly detrimental to petitioners position in one
regard. The Court therein noted that on account of the failure to correctly appeal the
decision of the Labor Arbiter to the NLRC, such judgment consequently became final
and executory.30 GTZ goes as far as to "request" that the Court re-examine Air
Services, a suggestion that is needlessly improvident under the circumstances. Air
Services affirms doctrines grounded in sound procedural rules that have allowed for
the considered and orderly disposition of labor cases.
The OSG points out, citing Heirs of Mayor Nemencio Galvez v. Court of
Appeals,31 that even when appeal is available, the Court has nonetheless allowed a
writ of certiorari when the orders of the lower court were issued either in excess of
or without jurisdiction. Indeed, the Court has ruled before that the failure to employ
available intermediate recourses, such as a motion for reconsideration, is not a fatal
infirmity if the ruling assailed is a patent nullity. This approach suggested by the
OSG allows the Court to inquire directly into what is the main issuewhether GTZ
enjoys immunity from suit.
The arguments raised by GTZ and the OSG are rooted in several indisputable facts.
The SHINE project was implemented pursuant to the bilateral agreements between
the Philippine and German governments. GTZ was tasked, under the 1991
agreement, with the implementation of the contributions of the German
government. The activities performed by GTZ pertaining to the SHINE project are
governmental in nature, related as they are to the promotion of health insurance in
the Philippines. The fact that GTZ entered into employment contracts with the
private respondents did not disqualify it from invoking immunity from suit, as held in
cases such as Holy See v. Rosario, Jr.,32 which set forth what remains valid doctrine:
Certainly, the mere entering into a contract by a foreign state with a private party
cannot be the ultimate test. Such an act can only be the start of the inquiry. The
logical question is whether the foreign state is engaged in the activity in the regular
course of business. If the foreign state is not engaged regularly in a business or
trade, the particular act or transaction must then be tested by its nature. If the act
is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure
imperii, especially when it is not undertaken for gain or profit. 33
Beyond dispute is the tenability of the comment points raised by GTZ and the OSG
that GTZ was not performing proprietary functions notwithstanding its entry into the
particular employment contracts. Yet there is an equally fundamental premise which
GTZ and the OSG fail to address, namely: Is GTZ, by conception, able to enjoy the
Federal Republics immunity from suit?
The principle of state immunity from suit, whether a local state or a foreign state, is
reflected in Section 9, Article XVI of the Constitution, which states that "the State
may not be sued without its consent." Who or what consists of "the State"? For one,

the doctrine is available to foreign States insofar as they are sought to be sued in
the courts of the local State,34 necessary as it is to avoid "unduly vexing the peace
of nations."
If the instant suit had been brought directly against the Federal Republic of
Germany, there would be no doubt that it is a suit brought against a State, and the
only necessary inquiry is whether said State had consented to be sued. However,
the present suit was brought against GTZ. It is necessary for us to understand what
precisely are the parameters of the legal personality of GTZ.
Counsel for GTZ characterizes GTZ as "the implementing agency of the Government
of the Federal Republic of Germany," a depiction similarly adopted by the OSG.
Assuming that characterization is correct, it does not automatically invest GTZ with
the ability to invoke State immunity from suit. The distinction lies in whether the
agency is incorporated or unincorporated. The following lucid discussion from
Justice Isagani Cruz is pertinent:
Where suit is filed not against the government itself or its officials but against one of
its entities, it must be ascertained whether or not the State, as the principal that
may ultimately be held liable, has given its consent to be sued. This ascertainment
will depend in the first instance on whether the government agency impleaded is
incorporated or unincorporated.
An incorporated agency has a charter of its own that invests it with a separate
juridical personality, like the Social Security System, the University of the
Philippines, and the City of Manila. By contrast, the unincorporated agency is so
called because it has no separate juridical personality but is merged in the general
machinery of the government, like the Department of Justice, the Bureau of Mines
and the Government Printing Office.
If the agency is incorporated, the test of its suability is found in its charter. The
simple rule is that it is suable if its charter says so, and this is true regardless of the
functions it is performing. Municipal corporations, for example, like provinces and
cities, are agencies of the State when they are engaged in governmental functions
and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are
subject to suit even in the performance of such functions because their charter
provides that they can sue and be sued.35
State immunity from suit may be waived by general or special law. 36 The special law
can take the form of the original charter of the incorporated government agency.
Jurisprudence is replete with examples of incorporated government agencies which
were ruled not entitled to invoke immunity from suit, owing to provisions in their
charters manifesting their consent to be sued. These include the National Irrigation
Administration,37 the former Central Bank,38 and the National Power Corporation.39 In
SSS v. Court of Appeals,40 the Court through Justice Melencio-Herrera explained that

by virtue of an express provision in its charter allowing it to sue and be sued, the
Social Security System did not enjoy immunity from suit:
We come now to the amendability of the SSS to judicial action and legal
responsibility for its acts. To our minds, there should be no question on this score
considering that the SSS is a juridical entity with a personality of its own. It has
corporate powers separate and distinct from the Government. SSS' own organic act
specifically provides that it can sue and be sued in Court. These words "sue and be
sued" embrace all civil process incident to a legal action. So that, even assuming
that the SSS, as it claims, enjoys immunity from suit as an entity performing
governmental functions, by virtue of the explicit provision of the aforecited enabling
law, the Government must be deemed to have waived immunity in respect of the
SSS, although it does not thereby concede its liability. That statutory law has given
to the private citizen a remedy for the enforcement and protection of his rights. The
SSS thereby has been required to submit to the jurisdiction of the Courts, subject to
its right to interpose any lawful defense. Whether the SSS performs governmental
or proprietary functions thus becomes unnecessary to belabor. For by that waiver, a
private citizen may bring a suit against it for varied objectives, such as, in this case,
to obtain compensation in damages arising from contract, and even for tort.
A recent case squarely in point anent the principle, involving the National Power
Corporation, is that of Rayo v. Court of First Instance of Bulacan, 110 SCRA 457
(1981), wherein this Court, speaking through Mr. Justice Vicente Abad Santos, ruled:
"It is not necessary to write an extended dissertation on whether or not the NPC
performs a governmental function with respect to the management and operation of
the Angat Dam. It is sufficient to say that the government has organized a private
corporation, put money in it and has allowed it to sue and be sued in any court
under its charter. (R.A. No. 6395, Sec. 3[d]). As a government, owned and controlled
corporation, it has a personality of its own, distinct and separate from that of the
Government. Moreover, the charter provision that the NPC can 'sue and be sued in
any court' is without qualification on the cause of action and accordingly it can
include a tort claim such as the one instituted by the petitioners." 41
It is useful to note that on the part of the Philippine government, it had designated
two entities, the Department of Health and the Philippine Health Insurance
Corporation (PHIC), as the implementing agencies in behalf of the Philippines. The
PHIC was established under Republic Act No. 7875, Section 16(g) of which grants
the corporation the power "to sue and be sued in court." Applying the previously
cited jurisprudence, PHIC would not enjoy immunity from suit even in the
performance of its functions connected with SHINE, however, governmental in
nature as they may be.
Is GTZ an incorporated agency of the German government? There is some mystery
surrounding that question. Neither GTZ nor the OSG go beyond the claim that
petitioner is "the implementing agency of the Government of the Federal Republic of

Germany." On the other hand, private respondents asserted before the Labor Arbiter
that GTZ was "a private corporation engaged in the implementation of development
projects."42 The Labor Arbiter accepted that claim in his Order denying the Motion to
Dismiss,43 though he was silent on that point in his Decision. Nevertheless, private
respondents argue in their Comment that the finding that GTZ was a private
corporation "was never controverted, and is therefore deemed admitted." 44 In its
Reply, GTZ controverts that finding, saying that it is a matter of public knowledge
that the status of petitioner GTZ is that of the "implementing agency," and not that
of a private corporation.45
In truth, private respondents were unable to adduce any evidence to substantiate
their claim that GTZ was a "private corporation," and the Labor Arbiter acted rashly
in accepting such claim without explanation. But neither has GTZ supplied any
evidence defining its legal nature beyond that of the bare descriptive "implementing
agency." There is no doubt that the 1991 Agreement designated GTZ as the
"implementing agency" in behalf of the German government. Yet the catch is that
such term has no precise definition that is responsive to our concerns. Inherently,
an agent acts in behalf of a principal, and the GTZ can be said to act in behalf of the
German state. But that is as far as "implementing agency" could take us. The term
by itself does not supply whether GTZ is incorporated or unincorporated, whether it
is owned by the German state or by private interests, whether it has juridical
personality independent of the German government or none at all.
GTZ itself provides a more helpful clue, inadvertently, through its own official
Internet website.46 In the "Corporate Profile" section of the English language version
of its site, GTZ describes itself as follows:
As an international cooperation enterprise for sustainable development with
worldwide operations, the federally owned Deutsche Gesellschaft fr Technische
Zusammenarbeit (GTZ) GmbH supports the German Government in achieving its
development-policy objectives. It provides viable, forward-looking solutions for
political, economic, ecological and social development in a globalised world.
Working under difficult conditions, GTZ promotes complex reforms and change
processes. Its corporate objective is to improve peoples living conditions on a
sustainable basis.
GTZ is a federal enterprise based in Eschborn near Frankfurt am Main. It was
founded in 1975 as a company under private law. The German Federal Ministry for
Economic Cooperation and Development (BMZ) is its major client. The company also
operates on behalf of other German ministries, the governments of other countries
and international clients, such as the European Commission, the United Nations and
the World Bank, as well as on behalf of private enterprises. GTZ works on a publicbenefit basis. All surpluses generated are channeled [sic] back into its own
international cooperation projects for sustainable development. 47

GTZs own website elicits that petitioner is "federally owned," a "federal enterprise,"
and "founded in 1975 as a company under private law." GTZ clearly has a very
meaningful relationship with the Federal Republic of Germany, which apparently
owns it. At the same time, it appears that GTZ was actually organized not through a
legislative public charter, but under private law, in the same way that Philippine
corporations can be organized under the Corporation Code even if fully owned by
the Philippine government.
This self-description of GTZ in its own official website gives further cause for pause
in adopting petitioners argument that GTZ is entitled to immunity from suit
because it is "an implementing agency." The above-quoted statement does not
dispute the characterization of GTZ as an "implementing agency of the Federal
Republic of Germany," yet it bolsters the notion that as a company organized under
private law, it has a legal personality independent of that of the Federal Republic of
Germany.
The Federal Republic of Germany, in its own official website, 48 also makes reference
to GTZ and describes it in this manner:
x x x Going by the principle of "sustainable development," the German Technical
Cooperation (Deutsche Gesellschaft fr Technische Zusammenarbeit GmbH, GTZ)
takes on non-profit projects in international "technical cooperation." The GTZ is a
private company owned by the Federal Republic of Germany. 49
Again, we are uncertain of the corresponding legal implications under German law
surrounding "a private company owned by the Federal Republic of Germany." Yet
taking the description on face value, the apparent equivalent under Philippine law is
that of a corporation organized under the Corporation Code but owned by the
Philippine government, or a government-owned or controlled corporation without
original charter. And it bears notice that Section 36 of the Corporate Code states
that "[e]very corporation incorporated under this Code has the power and capacity
x x x to sue and be sued in its corporate name." 50
It is entirely possible that under German law, an entity such as GTZ or particularly
GTZ itself has not been vested or has been specifically deprived the power and
capacity to sue and/or be sued. Yet in the proceedings below and before this Court,
GTZ has failed to establish that under German law, it has not consented to be sued
despite it being owned by the Federal Republic of Germany. We adhere to the rule
that in the absence of evidence to the contrary,
foreign laws on a particular subject are presumed to be the same as those of the
Philippines,51 and following the most intelligent assumption we can gather, GTZ is
akin to a governmental owned or controlled corporation without original charter
which, by virtue of the Corporation Code, has expressly consented to be sued. At
the very least, like the Labor Arbiter and the Court of Appeals, this Court has no
basis in fact to conclude or presume that GTZ enjoys immunity from suit.

This absence of basis in fact leads to another important point, alluded to by the
Labor Arbiter in his rulings. Our ruling in Holy See v. Del Rosario 52 provided a
template on how a foreign entity desiring to invoke State immunity from suit could
duly prove such immunity before our local courts. The principles enunciated in that
case were derived from public international law. We stated then:
In Public International Law, when a state or international agency wishes to plead
sovereign or diplomatic immunity in a foreign court, it requests the Foreign Office of
the state where it is sued to convey to the court that said defendant is entitled to
immunity.
In the United States, the procedure followed is the process of "suggestion," where
the foreign state or the international organization sued in an American court
requests the Secretary of State to make a determination as to whether it is entitled
to immunity. If the Secretary of State finds that the defendant is immune from suit,
he, in turn, asks the Attorney General to submit to the court a "suggestion" that the
defendant is entitled to immunity. In England, a similar procedure is followed, only
the Foreign Office issues a certification to that effect instead of submitting a
"suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of
Foreign Sovereign Instrumentalities and Obligations, 50 Yale Law Journal 1088
[1941]).
In the Philippines, the practice is for the foreign government or the international
organization to first secure an executive endorsement of its claim of sovereign or
diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement
to the courts varies. In International Catholic Migration Commission v. Calleja, 190
SCRA 130 (1990), the Secretary of Foreign Affairs just sent a letter directly to the
Secretary of Labor and Employment, informing the latter that the respondentemployer could not be sued because it enjoyed diplomatic immunity. In World
Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs
sent the trial court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the
U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor General
to make, in behalf of the Commander of the United States Naval Base at Olongapo
City, Zambales, a "suggestion" to respondent Judge. The Solicitor General embodied
the "suggestion" in a Manifestation and Memorandum as amicus curiae. 53
It is to be recalled that the Labor Arbiter, in both of his rulings, noted that it was
imperative for petitioners to secure from the Department of Foreign Affairs "a
certification of respondents diplomatic status and entitlement to diplomatic
privileges including immunity from suits."54 The requirement might not necessarily
be imperative. However, had GTZ obtained such certification from the DFA, it would
have provided factual basis for its claim of immunity that would, at the very least,
establish a disputable evidentiary presumption that the foreign party is indeed
immune which the opposing party will have to overcome with its own factual
evidence. We do not see why GTZ could not have secured such certification or
endorsement from the DFA for purposes of this case. Certainly, it would have been

highly prudential for GTZ to obtain the same after the Labor Arbiter had denied the
motion to dismiss. Still, even at this juncture, we do not see any evidence that the
DFA, the office of the executive branch in charge of our diplomatic relations, has
indeed endorsed GTZs claim of immunity. It may be possible that GTZ tried, but
failed to secure such certification, due to the same concerns that we have discussed
herein.
Would the fact that the Solicitor General has endorsed GTZs claim of States
immunity from suit before this Court sufficiently substitute for the DFA certification?
Note that the rule in public international law quoted in Holy See referred to
endorsement by the Foreign Office of the State where the suit is filed, such foreign
office in the Philippines being the Department of Foreign Affairs. Nowhere in the
Comment of the OSG is it manifested that the DFA has endorsed GTZs claim, or
that the OSG had solicited the DFAs views on the issue. The arguments raised by
the OSG are virtually the same as the arguments raised by GTZ without any
indication of any special and distinct perspective maintained by the Philippine
government on the issue. The Comment filed by the OSG does not inspire the same
degree of confidence as a certification from the DFA would have elicited.1avvphi1
Holy See made reference to Baer v. Tizon, 55 and that in the said case, the United
States Embassy asked the Secretary of Foreign Affairs to request the Solicitor
General to make a "suggestion" to the trial court, accomplished by way of a
Manifestation and Memorandum, that the petitioner therein enjoyed immunity as
the Commander of the Subic Bay Naval Base. Such circumstance is actually not
narrated in the text of Baer itself and was likely supplied in Holy See because its
author, Justice Camilio Quiason, had appeared as the Solicitor in behalf of the OSG
in Baer. Nonetheless, as narrated in Holy See, it was the Secretary of Foreign Affairs
which directed the OSG to intervene in behalf of the United States government in
the Baer case, and such fact is manifest enough of the endorsement by the Foreign
Office. We do not find a similar circumstance that bears here.
The Court is thus holds and so rules that GTZ consistently has been unable to
establish with satisfaction that it enjoys the immunity from suit generally enjoyed
by its parent country, the Federal Republic of Germany. Consequently, both the
Labor Arbiter and the Court of Appeals acted within proper bounds when they
refused to acknowledge that GTZ is so immune by dismissing the complaint against
it. Our finding has additional ramifications on the failure of GTZ to properly appeal
the Labor Arbiters decision to the NLRC. As pointed out by the OSG, the direct
recourse to the Court of Appeals while bypassing the NLRC could have been
sanctioned had the Labor Arbiters decision been a "patent nullity." Since the Labor
Arbiter acted properly in deciding the complaint, notwithstanding GTZs claim of
immunity, we cannot see how the decision could have translated into a "patent
nullity."
As a result, there was no basis for petitioners in foregoing the appeal to the NLRC by
filing directly with the Court of Appeals the petition for certiorari. It then follows that

the Court of Appeals acted correctly in dismissing the petition on that ground. As a
further consequence, since petitioners failed to perfect an appeal from the Labor
Arbiters Decision, the same has long become final and executory. All other
questions related to this case, such as whether or not private respondents were
illegally dismissed, are no longer susceptible to review, respecting as we do the
finality of the Labor Arbiters Decision.
A final note. This decision should not be seen as deviation from the more common
methodology employed in ascertaining whether a party enjoys State immunity from
suit, one which focuses on the particular functions exercised by the party and
determines whether these are proprietary or sovereign in nature. The nature of the
acts performed by the entity invoking immunity remains the most important
barometer for testing whether the privilege of State immunity from suit should
apply. At the same time, our Constitution stipulates that a State immunity from suit
is conditional on its withholding of consent; hence, the laws and circumstances
pertaining to the creation and legal personality of an instrumentality or agency
invoking immunity remain relevant. Consent to be sued, as exhibited in this
decision, is often conferred by the very same statute or general law creating the
instrumentality or agency.
WHEREFORE, the petition is DENIED. No pronouncement as to costs.
SO ORDERED.
DANTE O. TINGA
Associate Justice

[G.R. No. 496. December 31, 1902. ]

THE UNITED STATES, Complainant-Appellant, v. WILLIAM FOWLER ET
AL., Defendants-Appellees.
Assistant Attorney-General Constantino, for Appellant.
William Lane ONeill, for Appellees.
SYLLABUS
1. CRIMINAL LAW; JURISDICTION; CRIMES ON HIGH SEAS. Courts of First Instance
of the Philippines have no jurisdiction to take cognizance of crimes committed on
the high seas on board of a transport or other vessel not registered or licensed in
the Philippines.
DECISION
TORRES, J. :

The two defendants have been accused of the theft of sixteen bottles of champagne
of the value of $20, on the 12th August, 1901, while on board the transport Lawton,
then navigating the high seas, which said bottles of champagne formed part of the
cargo of the said vessel and were the property of Julian Lindsay, and which were
taken lucri causa, and with the intent to appropriate the same, without violence or
intimidation, and without the consent of the owner, against the statute in the case
made and provided.
The accused having been brought before the court, the prosecuting attorney being
present on behalf of the Government, counsel for the defendants presented a
demurrer, alleging that the Court of First Instance was without jurisdiction to try the
crime charged, inasmuch as it appeared from the information that the crime was
committed on the high seas, and not in the city of Manila, or within the territory
comprising the Bay of Manila, or upon the seas within the 3-mile limit to which the
jurisdiction of the court extends, and asked, upon these grounds, that the case be
dismissed.
This contention was opposed by the prosecuting attorney, who alleged that the
court has original jurisdiction in all criminal cases in which the penalty exceeds six
months imprisonment, or a fine of over $100; that, in accordance with the orders of
the Military Governor and the Civil Commission admiralty jurisdiction over all crimes
committed on board vessels flying the flag of the United States has been vested in
the Courts of First Instance of the city of Manila. Among other laws and orders he
cited the order of August 14, 1898, and Acts Nos. 76 and 186 of the United States
Civil Commission. He argued that the President of the United States had
unquestionable authority to authorize the commanding general and the Civil
Commission to establish a judicial system with authority to take cognizance of
maritime and admiralty causes, citing a decision of the Supreme Court of the United
States in support of this doctrine, which was applicable to this Archipelago, which is
now analogous to the status of some of the States of the Union during the Mexican
was and the war of secession.
The judge, however, by an order of the 14th of September, 1901, held that the court
was without jurisdiction to try the accused for the theft alleged to have been
committed on the high seas, sustained the demurrer, and ordered the discharge of
the defendants, with the costs to the Government. Against this order the
prosecuting attorney appealed, and the case was brought before this court.
This case deals with a theft committed on board a transport while navigating the
high seas. Act No. 136 of the organic law, as well as Act No. 186 passed by the Civil
Commission, and which repealed the former law, Act No. 76, do not expressly confer
jurisdiction or authority upon this court to take cognizance of all crimes committed
on board vessels on the high seas. While the provisions of the law are clear and
precise with respect to civil admiralty or maritime cases, this is not true with respect
to criminal cases. If any doubt could arise concerning the true meaning of the law
applicable to the case, Act. No. 400 effectively dissipates such doubts.
This law, which is an addition to Act No. 136, by which the courts of justice of the

Philippine Islands were organized, in article 1 adds to article 56, consisting of seven
paragraphs, another paragraph numbered 8, which reads as follows: "Of all crimes
and offenses committed on the high seas or beyond the jurisdiction of any country,
or within any of the navigable waters of the Philippine Archipelago, on bard a ship or
water craft of any kind registered or licensed in the Philippine Islands in accordance
with the laws thereof." The purpose of this law was to define the jurisdiction of the
Courts of First Instance in criminal cases for crimes committed on board vessels
registered or licensed in the Philippine Islands. The transport Lawton not being a
vessel of this class, our courts are without jurisdiction to take cognizance of a crime
committed on board the same.
Upon these grounds we consider that the order appealed should be affirmed, with
the costs de oficio. So ordered.
Arellano, C.J., Cooper, Smith, Willard, Mapa and Ladd, JJ., concur.
G.R. No. L-18924

October 19, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellant,

vs.
WONG CHENG (alias WONG CHUN), defendant-appellee.
Attorney-General Villa-Real for appellant.
Eduardo Gutierrez Repide for appellee.
ROMUALDEZ, J.:
In this appeal the Attorney-General urges the revocation of the order of the Court of
First Instance of Manila, sustaining the demurrer presented by the defendant to the
information that initiated this case and in which the appellee is accused of having
illegally smoked opium, aboard the merchant vessel Changsa of English nationality
while said vessel was anchored in Manila Bay two and a half miles from the shores
of the city.
The demurrer alleged lack of jurisdiction on the part of the lower court, which so
held and dismissed the case.
The question that presents itself for our consideration is whether such ruling is
erroneous or not; and it will or will not be erroneous according as said court has or
has no jurisdiction over said offense.
The point at issue is whether the courts of the Philippines have jurisdiction over
crime, like the one herein involved, committed aboard merchant vessels anchored
in our jurisdiction waters. 1awph!l.net
There are two fundamental rules on this particular matter in connection with
International Law; to wit, the French rule, according to which crimes committed

aboard a foreign merchant vessels should not be prosecuted in the courts of the
country within whose territorial jurisdiction they were committed, unless their
commission affects the peace and security of the territory; and the English rule,
based on the territorial principle and followed in the United States, according to
which, crimes perpetrated under such circumstances are in general triable in the
courts of the country within territory they were committed. Of this two rules, it is
the last one that obtains in this jurisdiction, because at present the theories and
jurisprudence prevailing in the United States on this matter are authority in the
Philippines which is now a territory of the United States.
In the cases of The Schooner Exchange vs. M'Faddon and Others (7 Cranch [U. S.],
116), Chief Justice Marshall said:
. . . When merchant vessels enter for the purposes of trade, it would be
obviously inconvenient and dangerous to society, and would subject the laws
to continual infraction, and the government to degradation, if such individuals
or merchants did not owe temporary and local allegiance, and were not
amenable to the jurisdiction of the country. . . .
In United States vs. Bull (15 Phil., 7), this court held:
. . . No court of the Philippine Islands had jurisdiction over an offense or crime
committed on the high seas or within the territorial waters of any other
country, but when she came within three miles of a line drawn from the
headlands, which embrace the entrance to Manila Bay, she was within
territorial waters, and a new set of principles became applicable. (Wheaton,
International Law [Dana ed.], p. 255, note 105; Bonfils, Le Droit Int., secs.
490 et seq.; Latour, La Mer Ter., ch. 1.) The ship and her crew were then
subject to the jurisdiction of the territorial sovereign subject to such
limitations as have been conceded by that sovereignty through the proper
political agency. . . .
It is true that in certain cases the comity of nations is observed, as in Mali and
Wildenhus vs. Keeper of the Common Jail (120 U.., 1), wherein it was said that:
. . . The principle which governs the whole matter is this: Disorder which
disturb only the peace of the ship or those on board are to be dealt with
exclusively by the sovereignty of the home of the ship, but those which
disturb the public peace may be suppressed, and, if need be, the offenders
punished by the proper authorities of the local jurisdiction. It may not be easy
at all times to determine which of the two jurisdictions a particular act of
disorder belongs. Much will undoubtedly depend on the attending
circumstances of the particular case, but all must concede that felonious
homicide is a subject for the local jurisdiction, and that if the proper
authorities are proceeding with the case in the regular way the consul has no
right to interfere to prevent it.

Hence in United States vs. Look Chaw (18 Phil., 573), this court held that:
Although the mere possession of an article of prohibited use in the Philippine
Islands, aboard a foreign vessel in transit in any local port, does not, as a
general rule, constitute a crime triable by the courts of the Islands, such
vessels being considered as an extension of its own nationality, the same rule
does not apply when the article, the use of which is prohibited in the Islands,
is landed from the vessels upon Philippine soil; in such a case an open
violation of the laws of the land is committed with respect to which, as it is a
violation of the penal law in force at the place of the commission of the crime,
no court other than that established in the said place has jurisdiction of the
offense, in the absence of an agreement under an international treaty.
As to whether the United States has ever consented by treaty or otherwise to
renouncing such jurisdiction or a part thereof, we find nothing to this effect so far as
England is concerned, to which nation the ship where the crime in question was
committed belongs. Besides, in his work "Treaties, Conventions, etc.," volume 1,
page 625, Malloy says the following:
There shall be between the territories of the United States of America, and all
the territories of His Britanic Majesty in Europe, a reciprocal liberty of
commerce. The inhabitants of the two countries, respectively, shall have
liberty freely and securely to come with their ships and cargoes to all such
places, ports and rivers, in the territories aforesaid, to which other foreigners
are permitted to come, to enter into the same, and to remain and reside in
any parts of the said territories, respectively; also to hire and occupy houses
and warehouses for the purposes of their commerce; and, generally, the
merchants and traders of each nation respectively shall enjoy the most
complete protection and security for their commerce, but subject always to
the laws and statutes of the two countries, respectively. (Art. 1, Commerce
and Navigation Convention.)
We have seen that the mere possession of opium aboard a foreign vessel in transit
was held by this court not triable by or courts, because it being the primary object
of our Opium Law to protect the inhabitants of the Philippines against the disastrous
effects entailed by the use of this drug, its mere possession in such a ship, without
being used in our territory, does not being about in the said territory those effects
that our statute contemplates avoiding. Hence such a mere possession is not
considered a disturbance of the public order.
But to smoke opium within our territorial limits, even though aboard a foreign
merchant ship, is certainly a breach of the public order here established, because it
causes such drug to produce its pernicious effects within our territory. It seriously
contravenes the purpose that our Legislature has in mind in enacting the aforesaid
repressive statute. Moreover, as the Attorney-General aptly observes:

. . . The idea of a person smoking opium securely on board a foreign vessel at

anchor in the port of Manila in open defiance of the local authorities, who are
impotent to lay hands on him, is simply subversive of public order. It requires
no unusual stretch of the imagination to conceive that a foreign ship may
come into the port of Manila and allow or solicit Chinese residents to smoke
opium on board.
The order appealed from is revoked and the cause ordered remanded to the court of
origin for further proceedings in accordance with law, without special findings as to
costs. So ordered.
Araullo, C.J., Street, Malcolm, Avancea, Villamor, Ostrand and Johns, JJ., concur.
G.R. No. L-5889 July 12, 1911
THE UNITED STATES, Plaintiff-Appellee, vs. LOOK CHAW ( alias LUK
CHIU),Defendant-Appellant.
Thos. D. Aitken for appellant.
Attorney-General Villamor for appellee.
ARELLANO, C.J. :chanrobles virtual law library
This case is a separate part of Case No. 5887 and bears No. 5889 on the general
docket of this court, and No. 377 on the docket of the Court of First Instance of
Cebu.chanroblesvirtualawlibrary chanrobles virtual law library
The complaint in this case states:
That, on or about the 18th of August, 1909, within the boundaries of the
municipality of Cebu of this province and judicial district, the said Look Chaw
(alias Luk Chiu) did, without having obtained authorization from the Collector of
Internal Revenue and without being authorized in any manner and traffic in the
same.
C.J. Milliron, an internal-revenue agent, testified that Vicente Base took to the
governor of Cebu a can of opium containing 200 grammes of the said drug, in order
to show him that the accused had sold opium to Base, and the governor called the
witness in order that he might take part in this case. After the accused was arrested,
he confessed before the witness and the provincial fiscal that he had sold to Vicente
Base thirty cans of opium on the 15th of August, 1909, but that he had received the
price thereof, and that the money which was found in a box of his on board the
British steamship Erroll, P1,500 in amount, was obtained in Manila and was seized
by the captain of the vessel. According to the accused, he had purchased in
Hongkong 137 cans of opium for the purpose of introducing it as contraband into
Mexico, the destination of the vessel, but that as the latter changed its route

touching first at Manila, the opium arrived at

Cebu.chanroblesvirtualawlibrarychanrobles virtual law library
Vicente Base testified that he had negotiated with the accused with respect to the
sale of the three sacks of opium which were seized while in the latter's possession
an were the subject matter of the previous cause; that these three sacks were not
taken ashore, because the accused would not permit this to be done without
previous delivery of the whole price of P1,000, of which witness had only paid P533;
that he therefore only took one can from one of the said
sacks.chanroblesvirtualawlibrary chanrobles virtual law library
The Court of First Instance of Cebu sentenced the accused to one year's
imprisonment and the payment of a fine of P2,000, with additional subsidiary
imprisonment in case of insolvency, not to exceed one-third of the principal penalty,
and to the payment of the costs of the trial. It was ordered in the judgment that the
exhibits connected with the case should be confiscated, and that, in case of an
appeal, and even after the sentence had been served, the defendant should not be
released from custody, but delivered to the customs authorities for the purpose of
the enforcement of the existing immigration
laws.chanroblesvirtualawlibrary chanrobles virtual law library
The defendant appealed and has alleged before this court that he can not punished
in accordance with section 15 of Act No. 1761, under which the complaint was
drawn.chanroblesvirtualawlibrary chanrobles virtual law library
This said section 15 reads thus:
( a) No person shall import, cook, or prepare opium, or engage in the business of
purchasing or selling opium or of dealing or trafficking therein, unless he shall first
have secured from the Collector of Internal Revenue a license to transact such
business and shall have paid the license tax prescribed by this Act. . . .
To make an isolated sale, says the appellant, is not to engage in the business of
selling. To negotiate the sale of opium does not mean clandestinely to sell opium
once.chanroblesvirtualawlibrary chanrobles virtual law library
In our opinion, the act defined in section 15 is distinct from that penalized in section
5; the act referred to in the latter is any act of sale, while that concerned in the
former relates to the business of selling, in an habitual, professional manner, as one
of an undertaking or occupation, without license.
SEC. 5. ( a) It shall be unlawful to sell, transfer, give, or deliver opium to any person
except to a duly licensed and practicing physician, pharmacist, or second-class
pharmacist, or a duly licensed dispensator of opium, or duly registered confirmed
user of opium in a licensed opium dispensary for consumption therein only, and in

accordance with the provisions of this Act: . . .chanroblesvirtualawlibrary chanrobles

virtual law library
( b) Any person violating the provisions of the preceding subsection shall be
punished by a fine not exceeding one thousand pesos, or by imprisonment for a
period not exceeding one year, or both such fine and imprisonment, in the
discretion of the court: . . .
The crime concerned in this case, according to this section 5, is compromised within
the language of the complaint which charges the act of selling opium without the
authorization of the Collector of Internal
Revenue.chanroblesvirtualawlibrary chanrobles virtual law library
The other ground of the appeal is that the confession of the accused were taken into
account for the purpose of his conviction. The trial court pronounced its sentence
after considering that "sufficient proof has been furnished by the evidence,' and the
evidence did not consist solely in the confession that the accused, on the day and at
the place mentioned in the complaint, contracted with Vicente Base for the sale of
the opium, the subject matter of the present prosecution; and as this finding does
not appear to be erroneous nor contrary to the conclusions reached from the
evidence, it is accepted by this court in order that thereby the judgment appealed
from may be dully affirmed, as we do affirm the
same.chanroblesvirtualawlibrary chanrobles virtual law library
This disposes of the appeal; but, in the opinion of this court, the defense of double
jeopardy alleged by the accused in first instance, with exception to the order
disallowing it, can not but be taken into consideration, although in this instance, on
appeal, that defense was not reproduced with the allegation that its disallowance
was an error committed by the lower court in its judgment. This point appears to
involve a question of jurisdiction.chanroblesvirtualawlibrary chanrobles virtual law
library
Before separating the two causes, as related at the beginning of this decision, there
was but one single complaint and there would have been only one trial for the
possession of opium and for the sale of opium. But the defendant's counsel set up a
demurrer, arguing that the complaint was defective inasmuch as it charged two
distinct crimes, for according to the defense, it was alleged to be one crime to
possess opium and another different crime to sell opium; and the court deferred to
this pretension and ordered the filing of two complaints, one for the possession of
opium and another for the sale of opium; that for the possession of opium was the
one first tried by the lower court.chanroblesvirtualawlibrary chanrobles virtual law
library
In answering the second complaint for the sale of opium, the defendant alleged that
he had already been in jeopardy.

The defendant was convicted yesterday," said his attorney, "for the violation of law
committed, of possessing opium, and has already been sentenced by this court to
five year's imprisonment and in addition to pay a fine of ten thousand pesos.
According to the principles of penal law, when a crime has been committed which is
necessary in order to commit another, the delinquent, of course, can not be
punished for the two crimes, but must suffer for the crime for which the greater
penalty was provided.
The court rejected this allegation: first, because the prosecution of two crimes
instead of one was brought about by the defense itself; and second, because, in the
opinion of the trial judge, if the defendant had first been convicted for selling opium,
he certainly would have been in jeopardy in the cause prosecuted for possessing
opium, for the reason that really one can not sell opium without possessing it, while,
if the terms are inverted, the same result does not follow, because one may posses
opium without selling it, and consequently in the present cause the allegation of
double jeopardy is an admissible.chanroblesvirtualawlibrarychanrobles virtual law
library
True it is, we assert, that it is one crime to possess opium, punished by section 31 of
the Act, and another, to sell opium, penalized by section 5 of the same Act before
cited.chanroblesvirtualawlibrary chanrobles virtual law library
And it is also true that when one single act constitutes two or more crimes, or when
one of them is a necessary means for the commission of the other, only the penalty
corresponding to the more serious crime shall be imposed, in its maximum degree,
and thus, he who smokes opium in a pipe, by one single act lays himself liable to
three penalties of the law, one of them, merely for the fact of possessing opium,
another, for the mere possession of a pipe in which opium is smoked, and the other,
for the act of smoking opium; but the penalties corresponding to these three crimes
ought not to be imposed upon the defendant in this case, and only the penalty for
the most serious of these crimes.chanroblesvirtualawlibrary chanrobles virtual law
library
But the illegal possession of 137 cans of opium and the illegal sale of 30 cans of
opium, which are two acts confessed by the accused, are not one act which
constitutes two crimes, nor a crime which is a necessary means for the commission
of another. They are two isolated acts, punishable, each of them, in themselves.
Only in the event where all the amount of the opium possessed and seized be in its
totality the same as that which was possessed with the sole purpose of being
delivered as the matter or subject of a sale previously agree upon, could it be said,
in the opinion of this court, that the possession of the opium was a necessary
means to effect the delivery by reason of the sale, and that the sale agreed upon
was the sole reason for the possession of the opium seized. The possession of the
quantity contained in the pipe can not be considered as a different crime from that
of smoking opium in a pipe, nor the possession of the pipe, as a crime different from
that of smoking opium in a pipe. But if the person surprised in smoking opium in a

pipe was also surprised in the possession of the thirty cans sold by the accused, it
could not properly be inferred that the possession of these thirty cans, which in
itself is a crime, was a necessary means for the commission of the other crime of
smoking opium in a pipe, and that the person in whose possession the thirty cans
were seized, possessed the same solely and exclusively for the purpose of smoking
opium in a pipe. It might very well have been that he had acquired the drug for the
purpose of inhaling, injecting, chewing, swallowing, or other uses, and that only by
chance did it occur to him to try to smoke it in a pipe, on the very occasion when he
was surprised, this being the evident fact of the commission of the crime which can
not, in its essence, include the existence of thirty cans, not then contained in the
pipe, each can certainly being susceptible of other various uses, every one of which
might by its nature constitute a different
crime.chanroblesvirtualawlibrary chanrobles virtual law library
We consider this doctrine equally applicable to crimes which are evils by their very
nature, as well as to those which are merely malum quia prohibitum; because it not
only aims at a more or less strict application of a penal precept which, undoubtedly,
in the practice of this court, usually tends toward the lesser severity and,
occasionally, the greatest benignity when the second class, or conventional crimes,
are concerned, but also because that doctrine is the logical result of the process of
the intelligence in the derivation of consequences from the principles constitute of
the nature of things.chanroblesvirtualawlibrary chanrobles virtual law library
Thus it is that we find the institution of this cause, and its separation from the
previous one, to be founded on law and juridical principles, and the judgment
appealed from, to be in accordance with right and equity, except with regard to the
amount of the penalty, which we reduce, in harmony with the provisions of section 5
aforementioned, to six months' imprisonment and a fine of P1,000 Philippine
currency.chanroblesvirtualawlibrary chanrobles virtual law library
Therefore, with the understanding that the imprisonment and the fine imposed shall
be, respectively, six months and P1,000 Philippine Currency, we affirm, as to all the
rest, the judgment appealed from, with the costs of this instance against the
appellant. So ordered.chanroblesvirtualawlibrary chanrobles virtual law library
Torres, Mapa, and Johnson, JJ., concur.
Carson, J., concurs in the result.