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CONFLICTS CASE DIGESTS |1

G.R. No. 124110

April 20, 2001

UNITED
AIRLINES,
INC.,
Petitioner
vs.
COURT OF APPEALS, ANICETO FONTANILLA, in his personal capacity and
in behalf of his minor son MYCHAL ANDREW FONTANILLA, Respondents.
FACTS:
Aniceto Fontanilla bought from United Airlines, through the Philippine Travel
Bureau in Manila, three Visit the U.S.A. tickets from himself, his wife and
his minor son, Mychal, to visit the cities of Washington DC, Chicago and Los
Angeles. All All flights had been confirmed previously by United Airlines.
Having used the first coupon to DC and while at the Washington Dulles
Airport, Aniceto changed their itinerary, paid the penalty for rewriting their
tickets and was issued tickets with corresponding boarding passes with the
words: Check-in-required. They were then set to leave but were denied
boarding because the flight was overbooked.
The CA ruled that private respondents failure to comply with the check-in
requirement will not defeat his claim as the denied boarding rules were not
complied with applying the laws of the USA, relying on the Code of Federal
Regulation Part on Oversales of the USA.
ISSUE: WON the CA is correct in applying the laws of USA.
HELD:

No. According to the doctrine of lex loci contractus, the law of the place
where a contract is made or entered into governs with respect to its nature
and validity, obligation and interpretation shall govern. This has been said to
be the rule even though the place where the contract was made is different
from the place where it is to be performed. Hence, the court should apply the
law of the place where the airline ticket was issued, where the passengers
are residents and nationals of the forum and the ticket is issued in such State
by the defendant airline. Therefore, although, the contract of carriage was to
be performed in the United States, the tickets were purchased through
petitioners agent in Manila. It is true that the tickets were "rewritten" in
D.C., however, such fact did not change the nature of the original contract of
carriage entered into by the parties in Manila.
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B.
EVANGELISTA, and the rest of 1,767 NAMED-COMPLAINANTS, thru
and by their Attorney-in-fact, Atty. GERARDO A. DEL MUNDOvs.
PHILIPPINE
OVERSEAS
EMPLOYMENT
ADMINISTRATIONS
ADMINISTRATOR, NLRC, BROWN & ROOT INTERNATIONAL, INC.

CONFLICTS CASE DIGESTS |2


AND/OR
ASIA
INTERNATIONAL
BUILDERS
CORPORATION
GRN 104776, December 5,1994.
FACTS:
This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in the Supreme
Court for Certiorari.
On June 6, 1984, Cadalin, Amul and Evangelista, in their own behalf and on
behalf of 728 other OCWs instituted a class suit by filing an Amended
Complaint with the POEA for money claims arising from their recruitment by
ASIA INTERNATIONAL BUILDERS CORPORATION (AIBC) and employment by
BROWN & ROOT INTERNATIONAL, INC (BRI) which is a foreign corporation
with headquarters in Houston, Texas, and is engaged in construction; while
AIBC is a domestic corporation licensed as a service contractor to recruit,
mobilize and deploy Filipino workers for overseas employment on behalf of its
foreign principals.

(at madami pang motions ang na-file, new complainants joined the case, ang
daming
inavail
na
remedies
ng
both
parties)
On June 19, 1987, AIBC finally submitted its answer to the complaint. At the
same hearing, the parties were given a period of 15 days from said date
within which to submit their respective position papers. On February 24,
1988, AIBC and BRII submitted position paper. On October 27, 1988, AIBC
and BRII filed a Consolidated Reply, POEA Adminitartor rendered his
decision which awarded the amount of $824, 652.44 in favor of only 324
complainants. Claimants submitted their Appeal Memorandum For Partial
Appeal from the decision of the POEA. AIBC also filed its MR and/or appeal
in addition to the Notice of Appeal filed earlier.
NLRC promulgated its Resolution, modifying the decision of the POEA. The
resolution removed some of the benefits awarded in favor of the claimants.
NLRC denied all the MRs. Hence, these petitions filed by the claimants and by
AlBC and BRII.

The amended complaint sought the payment of the unexpired portion of the
employment contracts, which was terminated prematurely, and secondarily,
the payment of the interest of the earnings of the Travel and Reserved Fund;
interest on all the unpaid benefits; area wage and salary differential pay;
fringe benefits; reimbursement of SSS and premium not remitted to the SSS;
refund of withholding tax not remitted to the BIR; penalties for committing
prohibited practices; as well as the suspension of the license of AIBC and the
accreditation of BRII

The case rooted from the Labor Law enacted by Bahrain where most of the
complainants were deployed. His Majesty Ise Bin Selman Al Kaifa, Amir of
Bahrain, issued his Amiri Decree No. 23 on June 16, 1176, otherwise known
re the Labour Law for the Private Sector. Some of the provision of Amiri
Decree No. 23 that are relevant to the claims of the complainants-appellants
are as follows:

On October 2, 1984, the POEA Administrator denied the Motion to Strike Out
of the Records filed by AIBC but required the claimants to correct the
deficiencies in the complaint pointed out.

Art. 79: x x x A worker shall receive payment for each extra hour equivalent
to his wage entitlement increased by a minimum of twenty-rive per centurn
thereof for hours worked during the day; and by a minimum off fifty per
centurn thereof for hours worked during the night which shall be deemed to
being from seven oclock in the evening until seven oclock in the morning .

AIB and BRII kept on filing Motion for Extension of Time to file their answer.
The POEA kept on granting such motions.
On November 14, 1984, claimants filed an opposition to the motions for
extension of time and asked that AIBC and BRII declared in default for failure
to file their answers.
On December 27, 1984, the POEA Administrator issued an order directing
AIBC and BRII to file their answers within ten days from receipt of the order.

Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
If employee worked, 150% of his normal wage shall be paid to him x x x.
Art. 81; x x x When conditions of work require the worker to work on any
official holiday, he shall be paid an additional sum equivalent to 150% of his
normal wage.
Art. 84: Every worker who has completed one years continuous service with
his employer shall be entitled to Laos on full pay for a period of not less than
21 days for each year increased to a period not less than 28 days after five
continuous years of service.

CONFLICTS CASE DIGESTS |3


A worker shall be entitled to such leave upon a quantum meruit in respect of
the proportion of his service in that year.
Art. 107: A contract of employment made for a period of indefinite duration
may be terminated by either party thereto after giving the other party prior
notice before such termination, in writing, in respect of monthly paid workers
and fifteen days notice in respect of other workers. The party terminating a
contract without the required notice shall pay to the other party
compensation equivalent to the amount of wages payable to the worker for
the period of such notice or the unexpired portion thereof.
Art. Ill: x x x the employer concerned shall pay to such worker, upon
termination of employment, a leaving indemnity for the period of his
employment calculated on the basis of fifteen days wages for each year of
the first three years of service and of one months wages for each year of
service thereafter. Such worker shall be entitled to payment of leaving
indemnity upon a quantum meruit in proportion to the period of his service
completed within a year.
ISSUE:
1. WON the foreign law should govern or the contract of the parties.(WON
the complainants who have worked in Bahrain are entitled to the abovementioned benefits provided by Amiri Decree No. 23 of Bahrain).
2. WON the Bahrain Law should apply in the case. (Assuming it is applicable
WON complainants claim for the benefits provided therein have prescribed.)
3. Whether or not the instant cases qualify as; a class suit (siningit ko
nalang)
(the rest of the issues in the full text of the case refer to Labor Law)
RULING:
1. NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence
governing the pleading and proof of a foreign law and admitted in evidence a
simple copy of the Bahrains Amiri Decree No. 23 of 1976 (Labour Law for the
Private Sector).
NLRC applied the Amiri Deere, No. 23 of 1976, which provides for greater
benefits than those stipulated in the overseas-employment contracts of the
claimants. It was of the belief that where the laws of the host country are

more favorable and beneficial to the workers, then the laws of the host
country shall form part of the overseas employment contract. It approved the
observation of the POEA Administrator that in labor proceedings, all doubts in
the implementation of the provisions of the Labor Code and its implementing
regulations shall be resolved in favor of labor.
The overseas-employment contracts, which were prepared by AIBC and BRII
themselves, provided that the laws of the host country became applicable to
said contracts if they offer terms and conditions more favorable than those
stipulated therein. However there was a part of the employment contract
which provides that the compensation of the employee may be adjusted
downward so that the total computation plus the non-waivable benefits shall
be equivalent to the compensation therein agree, another part of the same
provision categorically states that total remuneration and benefits do not fall
below that of the host country regulation and custom.
Any ambiguity in the overseas-employment contracts should be interpreted
against AIBC and BRII, the parties that drafted it. Article 1377 of the Civil
Code
of
the
Philippines
provides:
The interpretation of obscure words or stipulations in a contract shall not
favor the party who caused the obscurity.
Said rule of interpretation is applicable to contracts of adhesion where there
is already a prepared form containing the stipulations of the employment
contract and the employees merely take it or leave it. The presumption is
that there was an imposition by one party against the other and that the
employees signed the contracts out of necessity that reduced their bargaining
power.
We read the overseas employment contracts in question as adopting the
provisions of the Amiri Decree No. 23 of 1976 as part and parcel thereof. The
parties to a contract may select the law by which it is to be governed. In such
a case, the foreign law is adopted as a system to regulate the relations of
the parties, including questions of their capacity to enter into the contract,
the formalities to be observed by them, matters of performance, and so
forth. Instead of adopting the entire mass of the foreign law, the parties may
just agree that specific provisions of a foreign statute shall be deemed
incorporated into their contract as a set of terms. By such reference to the
provisions of the foreign law, the contract does not become a foreign contract
to be governed by the foreign law. The said law does not operate as a statute
but as a set of contractual terms deemed written in the contract.

CONFLICTS CASE DIGESTS |4


A basic policy of contract is to protect the expectation of the parties. Such
party expectation is protected by giving effect to the parties own choice of
the applicable law. The choice of law must, however, bear some relationship
the parties or their transaction. There is no question that the contracts
sought to be enforced by claimants have a direct connection with the Bahrain
law because the services were rendered in that country.
2. NLRC ruled that the prescriptive period for the filing of the claims of the
complainants was 3 years, as provided in Article 291 of the Labor Code of the
Philippines, and not ten years as provided in Article 1144 of the Civil Code of
the Philippines nor one year as provided in the Amiri Decree No. 23 of 1976.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not actionable after the
lapse of one year from the date of the expiry of the Contract.
As a general rule, a foreign procedural law will not be applied in the forum
(local court), Procedural matters, such as service of process, joinder of
actions, period and requisites for appeal, and so forth, are governed by the
laws of the forum. This is true even if the action is based upon a foreign
substantive law.
A law on prescription of actions is sui generis in Conflict of Laws in the sense
that it may be viewed either as procedural or substantive, depending on the
characterization given such a law. In Bournias v. Atlantic Maritime Company
(220 F. 2d. 152, 2d Cir. [1955]), where the issue was the applicability of the
Panama Labor Code in a case filed in the State of New York for claims arising
from said Code, the claims would have prescribed under the Panamanian Law
but not under the Statute of Limitations of New York. The U.S. Circuit Court
of Appeals held that the Panamanian Law was procedural as it was not
specifically intended to be substantive, hence, the prescriptive period
provided in the law of the forum should apply. The Court observed: . . . we
are dealing with a statute of limitations of a foreign country, and it is not
clear on the face of the statute that its purpose was to limit the
enforceability, outside as well as within the foreign country concerned, of the
substantive rights to which the statute pertains. We think that as a yardstick
for determining whether that was the purpose, this test is the most
satisfactory one.
The Court further noted: Applying that test here it appears to us that the
libellant is entitled to succeed, for the respondents have failed to satisfy us
that the Panamanian period of limitation in question was specifically aimed

against the particular rights which the libellant seeks to enforce. The Panama
Labor Code is a statute having broad objectives. The American court applied
the statute of limitations of New York, instead of the Panamanian law, after
finding that there was no showing that the Panamanian law on prescription
was intended to be substantive. Being considered merely a procedural law
even in Panama, it has to give way to the law of the forum (local Court) on
prescription of actions.
However the characterization of a statute into a procedural or substantive law
becomes irrelevant when the country of the forum (local Court) has a
borrowing statute. Said statute has the practical effect of treating the
foreign statute of limitation as one of substance. A borrowing statute
directs the state of the forum (local Court) to apply the foreign statute of
limitations to the pending claims based on a foreign law. While there are
several kinds of borrowing statutes, one form provides that an action
barred by the laws of the place where it accrued will not be enforced in the
forum even though the local statute was not run against it.
Section 48 of Code of Civil Procedure is of this kind. It provides: If by the
laws of the state or country where the cause of action arose, the action is
barred, it is also barred in the Philippine Islands.
Section 48 has not been repealed or amended by the Civil Code of the
Philippines. In the light of the 1987 Constitution, however, Section 48 cannot
be enforced ex proprio vigore insofar as it ordains the application in this
jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum (local Court) will not enforce any foreign claim
obnoxious to the forums public policy. To enforce the one-year prescriptive
period of the Amiri Decree No. 23 of 1976 as regards the claims in question
would contravene the public policy on the protection to labor.
In the Declaration of Principles and State Policies, the 1987 Constitution
emphasized that:The state shall promote social justice in all phases of
national
development
(Sec.
10).
The state affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare (Sec. 18).
In Article XIII on Social Justice and Human Rights, the 1987 Constitution
provides:
Sec. 3. The State shall afford full protection to labor, local and overseas,

CONFLICTS CASE DIGESTS |5


organized and unorganized, and promote full employment and equality of
employment opportunities for all.

who worked in Bahrain can not be allowed to sue in a class suit in a judicial
proceeding.

Thus, the applicable law on prescription is the Philippine law.

WHEREFORE, all the three petitioners are DISMISSED.

The next question is whether the prescriptive period governing the filing of
the claims is 3 years, as provided by the Labor Code or 10 years, as provided
by the Civil Code of the Philippines.
Article
1144
of
the
Civil
Code
of
the
Philippines
provides:
The following actions must be brought within ten years from the time the
right of action accross:
(1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon
a
judgment
In this case, the claim for pay differentials is primarily anchored on the
written contracts between the litigants, the ten-year prescriptive period
provided by Art. 1144(l) of the New Civil Code should govern.
3. NO. A class suit is proper where the subject matter of the controversy is
one of common or general interest to many and the parties are so numerous
that it is impracticable to bring them all before the court. When all the claims
are for benefits granted under the Bahrain law many of the claimants worked
outside Bahrain. Some of the claimants were deployed in Indonesia under
different terms and condition of employment.
Inasmuch as the First requirement of a class suit is not present (common or
general interest based on the Amiri Decree of the State of Bahrain), it is only
logical that only those who worked in Bahrain shall be entitled to rile their
claims in a class suit.
While there are common defendants (AIBC and BRII) and the nature of the
claims is the same (for employees benefits), there is no common question of
law or fact. While some claims are based on the Amiri Law of Bahrain, many
of the claimants never worked in that country, but were deployed elsewhere.
Thus, each claimant is interested only in his own demand and not in the
claims of the other employees of defendants. A claimant has no concern in
protecting the interests of the other claimants as shown by the fact, that
hundreds of them have abandoned their co-claimants and have entered into
separate compromise settlements of their respective claims. The claimants

PAKISTAN INTERNATIONAL AIRLINES (PIA) CORPORATION vs HON.


BLAS F. OPLE, in his capacity as Minister of Labor; HON. VICENTE
LEOGARDO, JR., in his capacity as Deputy Minister; ETHELYNNE B.
FARRALES
and
MARIA
MOONYEEN
MAMASIG
G.R. No. 61594 September 28, 1990

CONFLICTS CASE DIGESTS |6


FACTS: On 2 December 1978, petitioner Pakistan International Airlines
Corporation (PIA), a foreign corporation licensed to do business in the
Philippines, executed in Manila 2 separate contracts of employment, one with
private respondent Farrales and the other with private respondent Mamasig.
1 The contracts, which became effective on 9 January 1979, provided in
pertinent portion as follows:
5.
DURATION
OF
EMPLOYMENT
AND
PENALTY
This agreement is for a period of 3 years, but can be extended by the mutual
consent
of
the
parties.
xxx
xxx
xxx
6.
TERMINATION
xxx
xxx
xxx
Notwithstanding anything to contrary as herein provided, PIA reserves the
right to terminate this agreement at any time by giving the EMPLOYEE notice
in writing in advance one month before the intended termination or in lieu
thereof, by paying the EMPLOYEE wages equivalent to one months salary.
xxx
xxx
xxx
10.
APPLICABLE
LAW:
This agreement shall be construed and governed under and by the laws of
Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction
to consider any matter arising out of or under this agreement.
Farrales & Mamasig (employees) were hired as flight attendants after
undergoing training. Base station was in Manila and flying assignments to
different parts of the Middle East and Europe.
roughly 1 year and 4 months prior to the expiration of the contracts of
employment, PIA through Mr. Oscar Benares, counsel for and official of the
local branch of PIA, sent separate letters, informing them that they will be
terminated
effective
September
1,
1980.
Farrales and Mamasig jointly instituted a complaint, for illegal dismissal and
non-payment of company benefits and bonuses, against PIA with the then
Ministry of Labor and Employment (MOLE).
PIAs Contention: The PIA submitted its position paper, but no evidence, and
there claimed that both private respondents were habitual absentees; that
both were in the habit of bringing in from abroad sizeable quantities of
personal effects; and that PIA personnel at the Manila International Airport
had been discreetly warned by customs officials to advise private
respondents to discontinue that practice. PIA further claimed that the
services of both private respondents were terminated pursuant to the
provisions of the employment contract.

Favorable decision for the respondents. The Order stated that private
respondents had attained the status of regular employees after they had
rendered more than a year of continued service; that the stipulation limiting
the period of the employment contract to 3 years was null and void as
violative of the provisions of the Labor Code and its implementing rules and
regulations on regular and casual employment; and that the dismissal,
having been carried out without the requisite clearance from the MOLE, was
illegal and entitled private respondents to reinstatement with full backwages.
Decision sustained on appeal. Hence, this petition for certiorari
ISSUE: (Relative to the subject) Which law should govern over the case?
Which court has jurisdiction?
HELD: Philippine Law and Philippine courts
Petitioner PIA cannot take refuge in paragraph 10 of its employment
agreement which specifies, firstly, the law of Pakistan as the applicable law of
the agreement and, secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement only [in] courts of Karachi
Pakistan.
We have already pointed out that the relationship is much affected with
public interest and that the otherwise applicable Philippine laws and
regulations cannot be rendered illusory by the parties agreeing upon some
other
law
to
govern
their
relationship.
the contract was not only executed in the Philippines, it was also performed
here, at least partially; private respondents are Philippine citizens and
respondents, while petitioner, although a foreign corporation, is licensed to do
business (and actually doing business) and hence resident in the Philippines;
lastly, private respondents were based in the Philippines in between their
assigned flights to the Middle East and Europe. All the above contacts point
to the Philippine courts and administrative agencies as a proper forum for the
resolution
of
contractual
disputes
between
the
parties.
Under these circumstances, paragraph 10 of the employment agreement
cannot be given effect so as to oust Philippine agencies and courts of the
jurisdiction vested upon them by Philippine law. Finally, and in any event, the
petitioner PIA did not undertake to plead and prove the contents of Pakistan
law on the matter; it must therefore be presumed that the applicable
provisions of the law of Pakistan are the same as the applicable provisions of
Philippine
law.
[DOCTRINE
OF
PROCESSUAL
PRESUMPTION,
eh?]
Petition
denied.
_______
NOTES:
Another Issue: petitioner PIA invokes paragraphs 5 and 6 of its contract of
employment with private respondents Farrales and Mamasig, arguing that its
relationship with them was governed by the provisions of its contract rather
than
by
the
general
provisions
of
the
Labor
Code.

CONFLICTS CASE DIGESTS |7


A contract freely entered into should, of course, be respected, as PIA argues,
since a contract is the law between the parties. The principle of party
autonomy in contracts is not, however, an absolute principle. The rule in
Article 1306, of our Civil Code is that the contracting parties may establish
such stipulations as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order or public policy. Thus,
counter-balancing the principle of autonomy of contracting parties is the
equally general rule that provisions of applicable law, especially provisions
relating to matters affected with public policy, are deemed written into the
contract. Put a little differently, the governing principle is that parties may
not contract away applicable provisions of law especially peremptory
provisions dealing with matters heavily impressed with public interest. The
law relating to labor and employment is clearly such an area and parties are
not at liberty to insulate themselves and their relationships from the impact
of labor laws and regulations by simply contracting with each other. It is thus
necessary to appraise the contractual provisions invoked by petitioner PIA in
terms of their consistency with applicable Philippine law and regulations.

G.R. No. L-23678 (June 6, 1967)


Testate of Amos Bellis vs. Edward A. Bellis, et al
FACTS:
Amos G. Bellis was a citizen of the State of Texas and of the United States.
He had five legitimate children with his first wife (whom he divorced), three
legitimate children with his second wife (who survived him) and, finally, three
illegitimate children.
6 years prior Amos Bellis death, he executed two(2) wills, apportioning the
remainder of his estate and properties to his seven surviving children. The

CONFLICTS CASE DIGESTS |8


appellants filed their oppositions to the project of partition claiming that they
have been deprived of their legitimes to which they were entitled according
to the Philippine law. Appellants argued that the deceased wanted his
Philippine estate to be governed by the Philippine law, thus the creation of
two separate wills.
ISSUE:
Whether or not the Philippine law be applied in the case in the determination
of the illegitimate childrens successional rights
RULING:
Court ruled that provision in a foreigners will to the effect that his properties
shall be distributed in accordance with Philippine law and not with his
national law, is illegal and void, for his national law cannot be ignored in view
of those matters that Article 10 now Article 16 of the Civil Code states
said national law should govern.
Where the testator was a citizen of Texas and domiciled in Texas, the intrinsic
validity of his will should be governed by his national law. Since Texas law
does not require legitimes, then his will, which deprived his illegitimate
children of the legitimes, is valid.
The Supreme Court held that the illegitimate children are not entitled to the
legitimes under the texas law, which is the national law of the deceased.

SPOUSES ZALAMEA VS. CA


MARCH 28, 2013 ~ VBDIAZ
SPOUSES ZALAMEA and LIANA ZALAMEA vs. CA and TRANSWORLD
AIRLINES,

INC.

G.R. No. 104235 November 18, 1993


FACTS:
Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and their daughter,
Liana purchased 3 airline tickets from the Manila agent of respondent

CONFLICTS CASE DIGESTS |9

TransWorld Airlines, Inc. for a flight to New York to Los Angeles. The tickets

airlines in the United States and is specifically allowed under the Code of

of petitioners-spouses were purchased at a discount of 75% while that of

Federal Regulations by the Civil Aeronautics Board, no fraud nor bad faith

their daughter was a full fare ticket. All three tickets represented confirmed

could be imputed on respondent TransWorld Airlines. Thus petitioners raised

reservations.

the case on petition for review on certiorari.

On the appointed date, however, petitioners checked in but were placed on

ISSUE;

the wait-list because the number of passengers who had checked in before

WON TWZ acted with bad faith and would entitle Zalameas to Moral and

them had already taken all the seats available on the flight. Out of the 42

Examplary damages.

names on the wait list, the first 22 names were eventually allowed to board

RULING:

the flight to Los Angeles, including petitioner Cesar Zalamea. The two others

The U.S. law or regulation allegedly authorizing overbooking has never been

were not able to fly. Those holding full-fare tickets were given first priority

proved. Foreign laws do not prove themselves nor can the courts take judicial

among the wait-listed passengers. Mr. Zalamea, who was holding the full-fare

notice of them. Like any other fact, they must be alleged and proved. Written

ticket of his daughter, was allowed to board the plane; while his wife and

law may be evidenced by an official publication thereof or by a copy attested

daughter, who presented the discounted tickets were denied boarding.

by the officer having the legal custody of the record, or by his deputy, and
accompanied with a certificate that such officer has custody. The certificate

Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter,

may be made by a secretary of an embassy or legation, consul general,

could not be accommodated because it was also fully booked. Thus, they

consul, vice-consul, or consular agent or by any officer in the foreign service

were constrained to book in another flight and purchased two tickets from

of the Philippines stationed in the foreign country in which the record is kept,

American Airlines. Upon their arrival in the Philippines, petitioners filed an

and

action for damages based on breach of contract of air carriage before the

Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its

RTC- Makati. The lower court ruled in favor of petitioners . CA held that moral

customer service agent, in her deposition that the Code of Federal

damages are recoverable in a damage suit predicated upon a breach of

Regulations of the Civil Aeronautics Board allows overbooking. No official

contract of carriage only where there is fraud or bad faith. Since it is a matter

publication of said code was presented as evidence. Thus, respondent courts

of record that overbooking of flights is a common and accepted practice of

finding that overbooking is specifically allowed by the US Code of Federal

authenticated

by

the

seal

of

his

office.

CONFLICTS CASE DIGESTS |10

Regulations

has

no

basis

in

fact.

For a contract of carriage generates a relation attended with public duty a

Even if the claimed U.S. Code of Federal Regulations does exist, the same is

duty to provide public service and convenience to its passengers which must

not applicable to the case at bar in accordance with the principle of lex loci

be paramount to self-interest or enrichment.

contractus which require that the law of the place where the airline ticket was
issued should be applied by the court where the passengers are residents

Respondent TWA is still guilty of bad faith in not informing its passengers

and nationals of the forum and the ticket is issued in such State by the

beforehand that it could breach the contract of carriage even if they have

defendant airline. Since the tickets were sold and issued in the Philippines,

confirmed tickets if there was overbooking. Respondent TWA should have

the applicable law in this case would be Philippine law.

incorporated stipulations on overbooking on the tickets issued or to properly


inform its passengers about these policies so that the latter would be

Existing jurisprudence explicitly states that overbooking amounts to bad

prepared for such eventuality or would have the choice to ride with another

faith, entitling the passengers concerned to an award of moral damages. In

airline.

Alitalia Airways v. Court of Appeals, where passengers with confirmed


bookings were refused carriage on the last minute, this Court held that when

Respondent TWA was also guilty of not informing its passengers of its alleged

an airline issues a ticket to a passenger confirmed on a particular flight, on a

policy of giving less priority to discounted tickets. Neither did it present any

certain date, a contract of carriage arises, and the passenger has every right

argument of substance to show that petitioners were duly apprised of the

to expect that he would fly on that flight and on that date. If he does not,

overbooked condition of the flight or that there is a hierarchy of boarding

then the carrier opens itself to a suit for breach of contract of carriage.

priorities in booking passengers. It is evident that petitioners had the right to

Where an airline had deliberately overbooked, it took the risk of having to

rely upon the assurance of respondent TWA, thru its agent in Manila, then in

deprive some passengers of their seats in case all of them would show up for

New York, that their tickets represented confirmed seats without any

the check in. For the indignity and inconvenience of being refused a

qualification. The failure of respondent TWA to so inform them when it could

confirmed seat on the last minute, said passenger is entitled to an award of

easily have done so thereby enabling respondent to hold on to them as

moral damages.

passengers up to the last minute amounts to bad faith. Evidently, respondent


TWA placed its self-interest over the rights of petitioners under their
contracts of carriage. Such conscious disregard of petitioners rights makes

CONFLICTS CASE DIGESTS |11

respondent TWA liable for moral damages. To deter breach of contracts by


respondent TWA in similar fashion in the future, we adjudge respondent TWA
liable for exemplary damages, as well.

In the case of Alitalia Airways v. Court of Appeals, this Court explicitly held
that a passenger is entitled to be reimbursed for the cost of the tickets he
had to buy for a flight to another airline. Thus, instead of simply being
refunded for the cost of the unused TWA tickets, petitioners should be
awarded the actual cost of their flight from New York to Los Angeles.

WHEREFORE, the petition is hereby GRANTED and the decision of the


respondent Court of Appeals is hereby MODIFIED

TITLE: Grace J. Garcia-Recio v Rederick A. Recio


CITATION: GR NO. 138322, Oct. 2, 2002 | 366 SCRA 437
FACTS:
Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian
Citizen, in Malabon, Rizal on March 1, 1987. They lived as husband and wife
in Australia. However, an Australian family court issued purportedly a decree
of divorce, dissolving the marriage of Rederick and Editha on May 18, 1989.
On January 12, 1994, Rederick married Grace J. Garcia where it was
solemnized at Our lady of Perpetual Help Church, Cabanatuan City. Since
October 22, 1995, the couple lived separately without prior judicial
dissolution of their marriage. As a matter of fact, while they were still in
Australia, their conjugal assets were divided on May 16, 1996, in accordance
with their Statutory Declarations secured in Australia.

CONFLICTS CASE DIGESTS |12

Grace filed a Complaint for Declaration of Nullity of Marriage on the ground of


bigamy on March 3, 1998, claiming that she learned only in November 1997,
Redericks marriage with Editha Samson.
ISSUE: Whether the decree of divorce submitted by Rederick Recio is
admissible as evidence to prove his legal capacity to marry petitioner and
absolved him of bigamy.
HELD:
The nullity of Redericks marriage with Editha as shown by the divorce decree
issued was valid and recognized in the Philippines since the respondent is a
naturalized Australian. However, there is absolutely no evidence that proves
respondents legal capacity to marry petitioner though the former presented
a divorce decree. The said decree, being a foreign document was
inadmissible to court as evidence primarily because it was not authenticated
by the consul/ embassy of the country where it will be used.
Under Sections 24 and 25 of Rule 132, a writing or document may be proven
as a public or official record of a foreign country by either:
(1) an official publication or
(2) a copy thereof attested by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must be:
(a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign
country in which the record is kept and
(b) authenticated by the seal of his office.
Thus, the Supreme Court remands the case to the Regional Trial Court of
Cabanatuan City to receive or trial evidence that will conclusively prove
respondents legal capacity to marry petitioner and thus free him on the
ground of bigamy.

ASIAVEST MERCHANT BANKERS (M) BERHAD vs. CA and


PNCC
G.R. No. 110263, July 20, 2001
Facts: Petitioner Asiavest Merchant Bankers (M) Berhad is a corporation
organized under the laws of Malaysia while private respondent Philippine
National Construction Corporation is a corporation duly incorporated and
existing under Philippine laws.
Petitioner initiated a suit for collection against private respondent, then
known as Construction and Development Corporation of the Philippines,
before the High Court of Malaya in Kuala Lumpur entitled Asiavest Merchant
Bankers (M) Berhad v. Asiavest CDCP Sdn. Bhd. and Construction and
Development Corporation of the Philippines.
Petitioner sought to recover the indemnity of the performance bond it had
put up in favor of private respondent to guarantee the completion of the
Felda Project and the nonpayment of the loan it extended to Asiavest-CDCP
Sdn. Bhd. for the completion of Paloh Hanai and Kuantan By Pass; Project.

CONFLICTS CASE DIGESTS |13


The High Court of Malaya (Commercial Division) rendered judgment in favor
of the petitioner and against the private respondent. Following unsuccessful
attempts to secure payment from private respondent under the judgment,
petitioner initiated the complaint before RTC of Pasig, Metro Manila, to
enforce the judgment of the High Court of Malaya.
Private respondent sought the dismissal of the case via a Motion to Dismiss,
contending that the alleged judgment of the High Court of Malaya should be
denied recognition or enforcement since on in face, it is tainted with want of
jurisdiction, want of notice to private respondent, collusion and/or fraud, and
there is a clear mistake of law or fact. Dismissal was, however, denied by the
trial court considering that the grounds relied upon are not the proper
grounds in a motion to dismiss under Rule 16 of the Revised Rules of Court.
Subsequently, private respondent filed its Answer with Compulsory Counter
claims and therein raised the grounds it brought up in its motion to dismiss.
In its Reply filed, the petitioner contended that the High Court of Malaya
acquired jurisdiction over the person of private respondent by its voluntary
submission the courts jurisdiction through its appointed counsel.
Furthermore, private respondents counsel waived any and all objections to
the High Courts jurisdiction in a pleading filed before the court.
In due time, the trial court rendered its decision dismissing petitioners
complaint. Petitioner interposed an appeal with the Court of Appeals, but the
appellate court dismissed the same and affirmed the decision of the trial
court.
Issue: Whether or not the CA erred in denying recognition and enforcement
to the Malaysian Court judgment.
Ruling: Yes.
Generally, in the absence of a special compact, no sovereign is bound to give
effect within its dominion to a judgment rendered by a tribunal of another
country; however, the rules of comity, utility and convenience of nations have
established a usage among civilized states by which final judgments of
foreign courts of competent jurisdiction are reciprocally respected and
rendered efficacious under certain conditions that may vary in different
countries.
In this jurisdiction, a valid judgment rendered by a foreign tribunal may be
recognized insofar as the immediate parties and the underlying cause of
action are concerned so long as it is convincingly shown that there has been
an opportunity for a full and fair hearing before a court of competent

jurisdiction; that the trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the defendant and under a
system of jurisprudence likely to secure an impartial administration of
justice; and that there is nothing to indicate either a prejudice in court and in
the system of laws under which it is sitting or fraud in procuring the
judgment.
A foreign judgment is presumed to be valid and binding in the country from
which it comes, until a contrary showing, on the basis of a presumption of
regularity of proceedings and the giving of due notice in the foreign forum
Under Section 50(b), Rule 39 of the Revised Rules of Court, which was the
governing law at the time the instant case was decided by the trial court and
respondent appellate court, a judgment, against a person, of a tribunal of a
foreign country having jurisdiction to pronounce the same is presumptive
evidence of a right as between the parties and their successors in interest by
a subsequent title. The judgment may, however, be assailed by evidence of
want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact. In addition, under Section 3(n), Rule 131 of the
Revised Rules of Court, a court, whether in the Philippines or elsewhere,
enjoys the presumption that it was acting in the lawful exercise of its
jurisdiction. Hence, once the authenticity of the foreign judgment is proved,
the party attacking a foreign judgment, is tasked with the burden of
overcoming its presumptive validity.
In the instant case, petitioner sufficiently established the existence of the
money judgment of the High Court of Malaya by the evidence it offered.
Petitioners sole witness, testified to the effect that he is in active practice of
the law profession in Malaysia; that he was connected with Skrine and
Company as Legal Assistant up to 1981; that private respondent, then known
as Construction and Development Corporation of the Philippines, was sued by
his client, Asiavest Merchant Bankers (M) Berhad, in Kuala Lumpur; that the
writ of summons were served on March 17, 1983 at the registered office of
private respondent and on March 21, 1983 on Cora S. Deala, a financial
planning officer of private respondent for Southeast Asia operations; that
upon the filing of the case, Messrs. Allen and Gledhill, Advocates and
Solicitors, with address at 24th Floor, UMBC Building, Jalan Sulaiman, Kuala
Lumpur, entered their conditional appearance for private respondent
questioning the regularity of the service of the writ of summons but
subsequently withdrew the same when it realized that the writ was properly
served; that because private respondent failed to file a statement of defense
within two (2) weeks, petitioner filed an application for summary judgment
and submitted affidavits and documentary evidence in support of its claim;
that the matter was then heard before the High Court of Kuala Lumpur in a
series of dates where private respondent was represented by counsel; and

CONFLICTS CASE DIGESTS |14


that the end result of all these proceedings is the judgment sought to be
enforced.
In addition to the said testimonial evidence, petitioner also offered the
documentary evidence to support their claim.
Having thus proven, through the foregoing evidence, the existence and
authenticity of the foreign judgment, said foreign judgment enjoys
presumptive validity and the burden then fell upon the party who disputes its
validity, herein private respondent, to prove otherwise. However, private
respondent failed to sufficiently discharge the burden that fell upon it to
prove by clear and convincing evidence the grounds which it relied upon to
prevent enforcement of the Malaysian High Court judgment.