KAZUHIRO HASEGAWA and NIPPON ENGINEERING G.R. No.

149177
CONSULTANTS CO., LTD.,
Petitioners, Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

MINORU KITAMURA, Promulgated:

Respondent.
November 23, 2007

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decision[1] of the Court of
Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001 Resolution[2] denying the motion for reconsideration thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical and

management support in the infrastructure projects of foreign governments, [3] entered into an Independent Contractor Agreement (ICA) with

respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines. [4] The agreement provides that respondent was to extend

professional services to Nippon for a year starting on April 1, 1999.[5] Nippon then assigned respondent to work as the project manager of the

Southern Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy contract with the Philippine Government. [6]

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged the consultancy services of Nippon,

on January 28, 2000, this time for the detailed engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI)

Project.[7] Respondent was named as the project manager in the contract's Appendix 3.1.[8]

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed respondent that the

company had no more intention of automatically renewing his ICA. His services would be engaged by the company only up to the substantial

completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry.[9]

Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demanded that he be assigned to

the BBRI project. Nipponinsisted that respondents contract was for a fixed term that had already expired, and refused to negotiate for the renewal of

the ICA.[10]

As he was not able to generate a positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for

specific performance and damages with the Regional Trial Court of Lipa City.[11]

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationals, moved to dismiss

the complaint for lack of jurisdiction. They asserted that the claim for improper pre-termination of respondent's ICA could only be heard and

ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus.[12]
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a certain Y. Kotake as project manager

of the BBRI Project.[13]

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank[14] that matters connected with the performance of contracts are

regulated by the law prevailing at the place of performance, [15] denied the motion to dismiss.[16] The trial court subsequently denied petitioners'

motion for reconsideration,[17] prompting them to file with the appellate court, on August 14, 2000, their first Petition for Certiorari under Rule 65

[docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000, the CA resolved to dismiss the petition on procedural groundsfor lack of statement of

material dates and for insufficient verification and certification against forum shopping.[19] An Entry of Judgment was later issued by the appellate

court on September 20, 2000.[20]

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period, a second Petition

for Certiorari under Rule 65 already stating therein the material dates and attaching thereto the proper verification and certification. This second

petition, which substantially raised the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.[21]

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001 Decision[22] finding no grave abuse of discretion

in the trial court's denial of the motion to dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the

case, because nowhere in the pleadings was the validity of the written agreement put in issue. The CA thus declared that the trial court was correct in

applying instead the principle of lex loci solutionis.[23]

Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001 Resolution.[24]

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review on Certiorari[25] imputing the

following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT VALIDLY
EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT
SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE
NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR
ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONISIN THE LIGHT OF RECENT DEVELOPMENT[S] IN
PRIVATE INTERNATIONAL LAWS.[26]

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of Philippine courts in civil cases for specific

performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci

celebrationis, lex contractus, the state of the most significant relationship rule, or forum non conveniens.

However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.

Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has already barred the filing of the second petition

docketed as CA-G.R. SP No. 60827 (fundamentally raising the same issues as those in the first one) and the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective certification of non-forum shopping, it was a

dismissal without prejudice.[27] The same holds true in the CA's dismissal of the said case due to defects in the formal requirement of

verification[28] and in the other requirement in Rule 46 of the Rules of Court on the statement of the material dates. [29] The dismissal being without

prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the appropriate verification and certificationas they, in fact

didand stating therein the material dates, within the prescribed period[30] in Section 4, Rule 65 of the said Rules.[31]

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the parties free to litigate the matter in a

subsequent action as though the dismissed action had not been commenced. In other words, the termination of a case not on the merits does not bar

another action involving the same parties, on the same subject matter and theory. [32]

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if petitioners still indicated in the verification

and certification of the second certiorari petition that the first had already been dismissed on procedural grounds,[33] petitioners are no longer

required by the Rules to indicate in their certification of non-forum shopping in the instant petition for review of the second certiorari petition, the

status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum shopping about any event that will not

constitute res judicata and litis pendentia, as in the present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire

proceedings, considering that the evils sought to be prevented by the said certificate are no longer present. [34]

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify and certify, on behalf of Nippon,

the certiorari petition filed with the CA and not the instant petition. True, the Authorization [35] dated September 4, 2000, which is attached to the

second certiorari petition and which is also attached to the instant petition for review, is limited in scopeits wordings indicate that Hasegawa is given

the authority to sign for and act on behalf of the company only in the petition filed with the appellate court, and that authority cannot extend to the

instant petition for review.[36] In a plethora of cases, however, this Court has liberally applied the Rules or even suspended its application whenever a

satisfactory explanation and a subsequent fulfillment of the requirements have been made. [37] Given that petitioners herein sufficiently explained their

misgivings on this point and appended to their Reply[38] an updated Authorization[39] for Hasegawa to act on behalf of the company in the instant

petition, the Court finds the same as sufficient compliance with the Rules.

However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As respondent pointed out, and to

which we agree, Hasegawa is truly not authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even

the subsequent August 17, 2001 Authorization were issued only by Nippon's president and chief executive officer, not by the company's board of

directors. In not a few cases, we have ruled that corporate powers are exercised by the board of directors; thus, no person, not even its officers, can

bind the corporation, in the absence of authority from the board.[40] Considering that Hasegawa verified and certified the petition only on his behalf

and not on behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office of the Ombudsman.[41] Substantial compliance

will not suffice in a matter that demands strict observance of the Rules.[42] While technical rules of procedure are designed not to frustrate the ends of

justice, nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court dockets.[43]
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's denial of their motion to dismiss. It is a

well-established rule that an order denying a motion to dismiss is interlocutory,

and cannot be the subject of the extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as

defenses the objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due

course.[44] While there are recognized exceptions to this rule,[45] petitioners' case does not fall among them.

This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and resolve the civil case for specific

performance and damages filed by the respondent. The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese

nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the

parties[46] following the [state of the] most significant relationship rule in Private International Law. [47]

The Court notes that petitioners adopted an additional but different theory when they elevated the case to the appellate court. In the Motion to

Dismiss[48] filed with the trial court, petitioners never contended that the RTC is an inconvenient forum. They merely argued that the applicable law

which will determine the validity or invalidity of respondent's claim is that of Japan, following the principles of lex loci celebrationis and lex

contractus.[49] While not abandoning this stance in their petition before the appellate court, petitioners on certiorari significantly invoked the defense

of forum non conveniens.[50] On petition for review before this Court, petitioners dropped their other arguments, maintained the forum non

conveniens defense, and introduced their new argument that the applicable principle is the [state of the] most significant relationship rule. [51]

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as explained in Philippine Ports

Authority v. City of Iloilo.[52] We only pointed out petitioners' inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws

principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and

enforcement of judgments. Corresponding to these phases are the following questions: (1) Where can or should litigation be initiated? (2) Which law

will the court apply? and (3) Where can the resulting judgment be enforced? [53]

Analytically, jurisdiction and choice of law are two distinct concepts. [54] Jurisdiction considers whether it is fair to cause a defendant to travel to this

state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both

parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the

choice of the lex fori will often coincide, the minimum contacts for one do not always provide the necessary significant contacts for the other. [55] The

question of whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have jurisdiction

to enter a judgment.[56]
In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a court to validly exercise its power to

adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter,

over the issues of the case and, in cases involving property, over the res or the thing which is the subject of the litigation.[57] In assailing the trial

court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes the court. It is

given only by law and in the manner prescribed by law.[58] It is further determined by the allegations of the complaint irrespective of whether the

plaintiff is entitled to all or some of the claims asserted therein.[59] To succeed in its motion for the dismissal of an action for lack of jurisdiction over

the subject matter of the claim,[60] the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the

power to adjudicate the claims.[61]

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction to hear the

subject controversy for, indeed, Civil Case No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation and is

properly cognizable by the RTC of Lipa City.[62] What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci

celebrationis and lex contractus, and the state of the most significant relationship rule.

The Court finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the law of the place of the ceremony[63] or the law of the place where a contract is made.[64] The doctrine of lex

contractus or lex loci contractus means the law of the place where a contract is executed or to be performed. [65] It controls the nature, construction,

and validity of the contract[66] and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or

implicitly.[67] Under the state of the most significant relationship rule, to ascertain what state law to apply to a dispute, the court should determine

which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the

contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties.[68] This rule

takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved.[69]

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second phase, the

choice of law.[70] They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem.[71] Necessarily, as the

only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict between the

laws of Japan and ours. Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of

the conflict of laws rules.[72] Also, when the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence of

such law must be pleaded and proved.[73]

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are three

alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the

case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into account or

apply the law of some other State or States.[74] The courts power to hear cases and controversies is derived from the Constitution and the laws. While

it may choose to recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even

in matters regarding rights provided by foreign sovereigns.[75]

Neither can the other ground raised, forum non conveniens,[76] be used to deprive the trial court of its jurisdiction herein. First, it is not a

proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a ground. [77] Second, whether a suit

should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound

discretion of the trial court.[78] In this case, the RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this principle

requires a factual determination; hence, this conflicts principle is more properly considered a matter of defense. [79]

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by respondent and the grounds raised by

petitioners to assail that jurisdiction are inappropriate, the trial and appellate courts correctly denied the petitioners motion to dismiss.

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.
G.R. No. 72494 August 11, 1989

HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner,

vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE INTERMEDIATE APPELLATE COURT, respondents.

Quiason, Makalintal, Barot & Torres for petitioner.

Alejandro, Aranzaso & Associates for private respondents.

MEDIALDEA, J.:

This is a petition for review on certiorari of the decision of the Intermediate Appellate Court (now Court of Appeals) dated August 2, 1985, which
reversed the order of the Regional Trial Court dated February 28,1985 denying the Motion to Dismiss filed by private respondents Jack Robert
Sherman and Deodato Reloj.

A complaint for collection of a sum of money (pp. 49-52, Rollo) was filed by petitioner Hongkong and Shanghai Banking Corporation (hereinafter
referred to as petitioner BANK) against private respondents Jack Robert Sherman and Deodato Reloj, docketed as Civil Case No. Q-42850 before the
Regional Trial Court of Quezon City, Branch 84.

It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (hereinafter referred to as COMPANY), a company incorporated in
Singapore applied with, and was granted by, the Singapore branch of petitioner BANK an overdraft facility in the maximum amount of Singapore
dollars 200,000.00 (which amount was subsequently increased to Singapore dollars 375,000.00) with interest at 3% over petitioner BANK prime rate,
payable monthly, on amounts due under said overdraft facility; as a security for the repayment by the COMPANY of sums advanced by petitioner
BANK to it through the aforesaid overdraft facility, on October 7, 1982, both private respondents and a certain Robin de Clive Lowe, all of whom
were directors of the COMPANY at such time, executed a Joint and Several Guarantee (p. 53, Rollo) in favor of petitioner BANK whereby private
respondents and Lowe agreed to pay, jointly and severally, on demand all sums owed by the COMPANY to petitioner BANK under the aforestated
overdraft facility.

The Joint and Several Guarantee provides, inter alia, that:

This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts of Singapore shall have
jurisdiction over all disputes arising under this guarantee. ... (p. 33-A, Rollo).

The COMPANY failed to pay its obligation. Thus, petitioner BANK demanded payment of the obligation from private respondents, conformably
with the provisions of the Joint and Several Guarantee. Inasmuch as the private respondents still failed to pay, petitioner BANK filed the above-
mentioned complaint.

On December 14,1984, private respondents filed a motion to dismiss (pp 54-56, Rollo) which was opposed by petitioner BANK (pp. 58-62, Rollo).
Acting on the motion, the trial court issued an order dated February 28, 1985 (pp, 64-65, Rollo), which read as follows:

In a Motion to Dismiss filed on December 14, 1984, the defendants seek the dismissal of the complaint on two grounds, namely:

1. That the court has no jurisdiction over the subject matter of the complaint; and

2. That the court has no jurisdiction over the persons of the defendants.

In the light of the Opposition thereto filed by plaintiff, the Court finds no merit in the motion. "On the first ground, defendants
claim that by virtue of the provision in the Guarantee (the actionable document) which reads —

This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined
under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that
the courts in Singapore shall have jurisdiction over all disputes arising under this guarantee,

the Court has no jurisdiction over the subject matter of the case. The Court finds and concludes otherwise. There is nothing in the
Guarantee which says that the courts of Singapore shall have jurisdiction to the exclusion of the courts of other countries or
nations. Also, it has long been established in law and jurisprudence that jurisdiction of courts is fixed by law; it cannot be
conferred by the will, submission or consent of the parties.
 On the second ground, it is asserted that defendant Robert' , Sherman is not a citizen nor a resident of the Philippines. This
argument holds no water. Jurisdiction over the persons of defendants is acquired by service of summons and copy of the
complaint on them. There has been a valid service of summons on both defendants and in fact the same is admitted when said
defendants filed a 'Motion for Extension of Time to File Responsive Pleading on December 5, 1984.

WHEREFORE, the Motion to Dismiss is hereby DENIED.

SO ORDERED.

A motion for reconsideration of the said order was filed by private respondents which was, however, denied (p. 66,Rollo).

Private respondents then filed before the respondent Intermediate Appellate Court (now Court of Appeals) a petition for prohibition with preliminary
injunction and/or prayer for a restraining order (pp. 39-48, Rollo). On August 2, 1985, the respondent Court rendered a decision (p. 37, Rollo), the
dispositive portion of which reads:

WHEREFORE, the petition for prohibition with preliminary injuction is hereby GRANTED. The respondent Court is enjoined
from taking further cognizance of the case and to dismiss the same for filing with the proper court of Singapore which is the
proper forum. No costs.

SO ORDERED.

The motion for reconsideration was denied (p. 38, Rollo), hence, the present petition.

The main issue is whether or not Philippine courts have jurisdiction over the suit.

The controversy stems from the interpretation of a provision in the Joint and Several Guarantee, to wit:

(14) This guarantee and all rights, obligations and liabilites arising hereunder shall be construed and determined under and may
be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts in Singapore shall have
jurisdiction over all disputes arising under this guarantee. ... (p. 53-A, Rollo)

In rendering the decision in favor of private respondents, the Court of Appeals made, the following observations (pp. 35-36, Rollo):

There are significant aspects of the case to which our attention is invited. The loan was obtained by Eastern Book Service PTE,
Ltd., a company incorporated in Singapore. The loan was granted by the Singapore Branch of Hongkong and Shanghai Banking
Corporation. The Joint and Several Guarantee was also concluded in Singapore. The loan was in Singaporean dollars and the
repayment thereof also in the same currency. The transaction, to say the least, took place in Singporean setting in which the law
of that country is the measure by which that relationship of the parties will be governed.

xxx xxx xxx

Contrary to the position taken by respondents, the guarantee agreement compliance that any litigation will be before the courts of
Singapore and that the rights and obligations of the parties shall be construed and determined in accordance with the laws of the
Republic of Singapore. A closer examination of paragraph 14 of the Guarantee Agreement upon which the motion to dismiss is
based, employs in clear and unmistakeable (sic) terms the word 'shall' which under statutory construction is mandatory.

Thus it was ruled that:

... the word 'shall' is imperative, operating to impose a duty which may be enforced (Dizon vs. Encarnacion, 9 SCRA
714).lâwphî1.ñèt

There is nothing more imperative and restrictive than what the agreement categorically commands that 'all rights, obligations, and
liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the
Republic of Singapore.'

While it is true that "the transaction took place in Singaporean setting" and that the Joint and Several Guarantee contains a choice-of-forum clause,
the very essence of due process dictates that the stipulation that "[t]his guarantee and all rights, obligations and liabilities arising hereunder shall be
construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts in
Singapore shall have jurisdiction over all disputes arising under this guarantee" be liberally construed. One basic principle underlies all rules of
jurisdiction in International Law: a State does not have jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings
are in rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on some minimum contacts that will not offend traditional
notions of fair play and substantial justice (J. Salonga, Private International Law, 1981, p. 46). Indeed, as pointed-out by petitioner BANK at the
outset, the instant case presents a very odd situation. In the ordinary habits of life, anyone would be disinclined to litigate before a foreign tribunal,
with more reason as a defendant. However, in this case, private respondents are Philippine residents (a fact which was not disputed by them) who
would rather face a complaint against them before a foreign court and in the process incur considerable expenses, not to mention inconvenience, than
to have a Philippine court try and resolve the case. Private respondents' stance is hardly comprehensible, unless their ultimate intent is to evade, or at
least delay, the payment of a just obligation.

The defense of private respondents that the complaint should have been filed in Singapore is based merely on technicality. They did not even claim,
much less prove, that the filing of the action here will cause them any unnecessary trouble, damage, or expense. On the other hand, there is no
showing that petitioner BANK filed the action here just to harass private respondents.

In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033, October 31, 1969, 30 SCRA 187, it was ruled:

... An accurate reading, however, of the stipulation, 'The parties agree to sue and be sued in the Courts of Manila,' does not
preclude the filing of suits in the residence of plaintiff or defendant. The plain meaning is that the parties merely consented to be
sued in Manila. Qualifying or restrictive words which would indicate that Manila and Manila alone is the venue are totally absent
therefrom. We cannot read into that clause that plaintiff and defendant bound themselves to file suits with respect to the last two
transactions in question only or exclusively in Manila. For, that agreement did not change or transfer venue. It simply is
permissive. The parties solely agreed to add the courts of Manila as tribunals to which they may resort. They did not waive their
right to pursue remedy in the courts specifically mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur.

This ruling was reiterated in the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., et al., G.R. No. 57250, October 30, 1981, 108 SCRA 740,
where the stipulation was "[i]n case of litigation, jurisdiction shall be vested in the Court of Davao City." We held:

Anent the claim that Davao City had been stipulated as the venue, suffice it to say that a stipulation as to venue does not preclude
the filing of suits in the residence of plaintiff or defendant under Section 2 (b), Rule 4, Rules of Court, in the absence of
qualifying or restrictive words in the agreement which would indicate that the place named is the only venue agreed upon by the
parties.

Applying the foregoing to the case at bar, the parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has
jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as
the light of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. Thus, a State does not assume
jurisdiction over travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign military units stationed in or marching
through State territory with the permission of the latter's authorities. This authority, which finds its source in the concept of sovereignty, is exclusive
within and throughout the domain of the State. A State is competent to take hold of any judicial matter it sees fit by making its courts and agencies
assume jurisdiction over all kinds of cases brought before them (J. Salonga, Private International Law, 1981, pp. 37-38).lâwphî1.ñèt

As regards the issue on improper venue, petitioner BANK avers that the objection to improper venue has been waived. However, We agree with the
ruling of the respondent Court that:

While in the main, the motion to dismiss fails to categorically use with exactitude the words 'improper venue' it can be perceived
from the general thrust and context of the motion that what is meant is improper venue, The use of the word 'jurisdiction' was
merely an attempt to copy-cat the same word employed in the guarantee agreement but conveys the concept of venue. Brushing
aside all technicalities, it would appear that jurisdiction was used loosely as to be synonymous with venue. It is in this spirit that
this Court must view the motion to dismiss. ... (p. 35, Rollo).

At any rate, this issue is now of no moment because We hold that venue here was properly laid for the same reasons discussed above.

The respondent Court likewise ruled that (pp. 36-37, Rollo):

... In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to exercise jurisdiction. And
even if it is so authorized, it may still refuse to entertain the case by applying the principle of forum non conveniens. ...

However, whether a suit should be entertained or dismissed on the basis of the principle of forum non conveniensdepends largely upon the facts of
the particular case and is addressed to the sound discretion of the trial court (J. Salonga, Private International Law, 1981, p. 49).lâwphî1.ñèt Thus, the
respondent Court should not have relied on such principle.

Although the Joint and Several Guarantee prepared by petitioner BANK is a contract of adhesion and that consequently, it cannot be permitted to
take a stand contrary to the stipulations of the contract, substantial bases exist for petitioner Bank's choice of forum, as discussed earlier.

Lastly, private respondents allege that neither the petitioner based at Hongkong nor its Philippine branch is involved in the transaction sued upon.
This is a vain attempt on their part to further thwart the proceedings below inasmuch as well-known is the rule that a defendant cannot plead any
defense that has not been interposed in the court below.

ACCORDINGLY, the decision of the respondent Court is hereby REVERSED and the decision of the Regional Trial Court is REINSTATED, with
costs against private respondents. This decision is immediately executory. SO ORDERED.
G.R. No. 120077 October 13, 2000

THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO G. SANTOS, respondents.

PARDO, J.:

The case before the Court is a petition for certiorari1 to annul the following orders of the National Labor Relations Commission (hereinafter referred
to as "NLRC") for having been issued without or with excess jurisdiction and with grave abuse of discretion: 2

(1) Order of May 31, 1993.3 Reversing and setting aside its earlier resolution of August 28, 1992.4 The questioned order declared that the
NLRC, not the Philippine Overseas Employment Administration (hereinafter referred to as "POEA"), had jurisdiction over private
respondent's complaint;

(2) Decision of December 15, 1994.5 Directing petitioners to jointly and severally pay private respondent twelve thousand and six hundred
dollars (US$ 12,600.00) representing salaries for the unexpired portion of his contract; three thousand six hundred dollars (US$3,600.00) as
extra four months salary for the two (2) year period of his contract, three thousand six hundred dollars (US$3,600.00) as "14th month pay"
or a total of nineteen thousand and eight hundred dollars (US$19,800.00) or its peso equivalent and attorney's fees amounting to ten percent
(10%) of the total award; and

(3) Order of March 30, 1995.6 Denying the motion for reconsideration of the petitioners.

In May, 1988, private respondent Marcelo Santos (hereinafter referred to as "Santos") was an overseas worker employed as a printer at the Mazoon
Printing Press, Sultanate of Oman. Subsequently, in June 1988, he was directly hired by the Palace Hotel, Beijing, People's Republic of China and
later terminated due to retrenchment.

Petitioners are the Manila Hotel Corporation (hereinafter referred to as "MHC") and the Manila Hotel International Company, Limited (hereinafter
referred to as "MHICL").

When the case was filed in 1990, MHC was still a government-owned and controlled corporation duly organized and existing under the laws of the
Philippines.

MHICL is a corporation duly organized and existing under the laws of Hong Kong. 7 MHC is an "incorporator" of MHICL, owning 50% of its capital
stock.8

By virtue of a "management agreement"9 with the Palace Hotel (Wang Fu Company Limited), MHICL10 trained the personnel and staff of the Palace
Hotel at Beijing, China.

Now the facts.

During his employment with the Mazoon Printing Press in the Sultanate of Oman, respondent Santos received a letter dated May 2, 1988 from Mr.
Gerhard R. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr. Schmidt informed respondent Santos that he was recommended by one
Nestor Buenio, a friend of his.

Mr. Shmidt offered respondent Santos the same position as printer, but with a higher monthly salary and increased benefits. The position was slated
to open on October 1, 1988.11

On May 8, 1988, respondent Santos wrote to Mr. Shmidt and signified his acceptance of the offer.

On May 19, 1988, the Palace Hotel Manager, Mr. Hans J. Henk mailed a ready to sign employment contract to respondent Santos. Mr. Henk advised
respondent Santos that if the contract was acceptable, to return the same to Mr. Henk in Manila, together with his passport and two additional
pictures for his visa to China.

On May 30, 1988, respondent Santos resigned from the Mazoon Printing Press, effective June 30, 1988, under the pretext that he was needed at home
to help with the family's piggery and poultry business.

On June 4, 1988, respondent Santos wrote the Palace Hotel and acknowledged Mr. Henk's letter. Respondent Santos enclosed four (4) signed copies
of the employment contract (dated June 4, 1988) and notified them that he was going to arrive in Manila during the first week of July 1988.

The employment contract of June 4, 1988 stated that his employment would commence September 1, 1988 for a period of two years. 12 It provided for
a monthly salary of nine hundred dollars (US$900.00) net of taxes, payable fourteen (14) times a year.13
On June 30, 1988, respondent Santos was deemed resigned from the Mazoon Printing Press.

On July 1, 1988, respondent Santos arrived in Manila.

On November 5, 1988, respondent Santos left for Beijing, China. He started to work at the Palace Hotel. 14

Subsequently, respondent Santos signed an amended "employment agreement" with the Palace Hotel, effective November 5, 1988. In the contract,
Mr. Shmidt represented the Palace Hotel. The Vice President (Operations and Development) of petitioner MHICL Miguel D. Cergueda signed the
employment agreement under the word "noted".

From June 8 to 29, 1989, respondent Santos was in the Philippines on vacation leave. He returned to China and reassumed his post on July 17, 1989.

On July 22, 1989, Mr. Shmidt's Executive Secretary, a certain Joanna suggested in a handwritten note that respondent Santos be given one (1) month
notice of his release from employment.

On August 10, 1989, the Palace Hotel informed respondent Santos by letter signed by Mr. Shmidt that his employment at the Palace Hotel print shop
would be terminated due to business reverses brought about by the political upheaval in China. 15 We quote the letter:16

"After the unfortunate happenings in China and especially Beijing (referring to Tiannamen Square incidents), our business has been
severely affected. To reduce expenses, we will not open/operate printshop for the time being.

"We sincerely regret that a decision like this has to be made, but rest assured this does in no way reflect your past performance which we
found up to our expectations."

"Should a turnaround in the business happen, we will contact you directly and give you priority on future assignment."

On September 5, 1989, the Palace Hotel terminated the employment of respondent Santos and paid all benefits due him, including his plane fare back
to the Philippines.

On October 3, 1989, respondent Santos was repatriated to the Philippines.

On October 24, 1989, respondent Santos, through his lawyer, Atty. Ednave wrote Mr. Shmidt, demanding full compensation pursuant to the
employment agreement.

On November 11, 1989, Mr. Shmidt replied, to wit:17

His service with the Palace Hotel, Beijing was not abruptly terminated but we followed the one-month notice clause and Mr. Santos
received all benefits due him.

"For your information the Print Shop at the Palace Hotel is still not operational and with a low business outlook, retrenchment in various
departments of the hotel is going on which is a normal management practice to control costs.

"When going through the latest performance ratings, please also be advised that his performance was below average and a Chinese
National who is doing his job now shows a better approach.

"In closing, when Mr. Santos received the letter of notice, he hardly showed up for work but still enjoyed free
accommodation/laundry/meals up to the day of his departure."

On February 20, 1990, respondent Santos filed a complaint for illegal dismissal with the Arbitration Branch, National Capital Region, National Labor
Relations Commission (NLRC). He prayed for an award of nineteen thousand nine hundred and twenty three dollars (US$19,923.00) as actual
damages, forty thousand pesos (P40,000.00) as exemplary damages and attorney's fees equivalent to 20% of the damages prayed for. The complaint
named MHC, MHICL, the Palace Hotel and Mr. Shmidt as respondents.

The Palace Hotel and Mr. Shmidt were not served with summons and neither participated in the proceedings before the Labor Arbiter.18

On June 27, 1991, Labor Arbiter Ceferina J. Diosana, decided the case against petitioners, thus: 19

"WHEREFORE, judgment is hereby rendered:

"1. directing all the respondents to pay complainant jointly and severally;
 "a) $20,820 US dollars or its equivalent in Philippine currency as unearned salaries;

"b) P50,000.00 as moral damages;

"c) P40,000.00 as exemplary damages; and

"d) Ten (10) percent of the total award as attorney's fees.

"SO ORDERED."

On July 23, 1991, petitioners appealed to the NLRC, arguing that the POEA, not the NLRC had jurisdiction over the case.

On August 28, 1992, the NLRC promulgated a resolution, stating:20

"WHEREFORE, let the appealed Decision be, as it is hereby, declared null and void for want of jurisdiction. Complainant is hereby
enjoined to file his complaint with the POEA.

"SO ORDERED."

On September 18, 1992, respondent Santos moved for reconsideration of the afore-quoted resolution. He argued that the case was not cognizable by
the POEA as he was not an "overseas contract worker."21

On May 31, 1993, the NLRC granted the motion and reversed itself. The NLRC directed Labor Arbiter Emerson Tumanon to hear the case on the
question of whether private respondent was retrenched or dismissed.22

On January 13, 1994, Labor Arbiter Tumanon completed the proceedings based on the testimonial and documentary evidence presented to and heard
by him.23

Subsequently, Labor Arbiter Tumanon was re-assigned as trial Arbiter of the National Capital Region, Arbitration Branch, and the case was
transferred to Labor Arbiter Jose G. de Vera.24

On November 25, 1994, Labor Arbiter de Vera submitted his report.25 He found that respondent Santos was illegally dismissed from employment and
recommended that he be paid actual damages equivalent to his salaries for the unexpired portion of his contract. 26

On December 15, 1994, the NLRC ruled in favor of private respondent, to wit: 27

"WHEREFORE, finding that the report and recommendations of Arbiter de Vera are supported by substantial evidence, judgment is hereby
rendered, directing the respondents to jointly and severally pay complainant the following computed contractual benefits: (1)
US$12,600.00 as salaries for the unexpired portion of the parties' contract; (2) US$3,600.00 as extra four (4) months salary for the two (2)
years period (sic) of the parties' contract; (3) US$3,600.00 as "14th month pay" for the aforesaid two (2) years contract stipulated by the
parties or a total of US$19,800.00 or its peso equivalent, plus (4) attorney's fees of 10% of complainant's total award.

"SO ORDERED."

On February 2, 1995, petitioners filed a motion for reconsideration arguing that Labor Arbiter de Vera's recommendation had no basis in law and in
fact.28

On March 30, 1995, the NLRC denied the motion for reconsideration. 29

Hence, this petition.30

On October 9, 1995, petitioners filed with this Court an urgent motion for the issuance of a temporary restraining order and/or writ of preliminary
injunction and a motion for the annulment of the entry of judgment of the NLRC dated July 31, 1995.31

On November 20, 1995, the Court denied petitioner's urgent motion. The Court required respondents to file their respective comments, without
giving due course to the petition.32

On March 8, 1996, the Solicitor General filed a manifestation stating that after going over the petition and its annexes, they can not defend and
sustain the position taken by the NLRC in its assailed decision and orders. The Solicitor General prayed that he be excused from filing a comment on
behalf of the NLRC33
On April 30,1996, private respondent Santos filed his comment. 34

On June 26, 1996, the Court granted the manifestation of the Solicitor General and required the NLRC to file its own comment to the petition. 35

On January 7, 1997, the NLRC filed its comment.

The petition is meritorious.

I. Forum Non-Conveniens

The NLRC was a seriously inconvenient forum.

We note that the main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the
Philippines has with the case is that respondent Santos is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations. Not all cases
involving our citizens can be tried here.

The employment contract. — Respondent Santos was hired directly by the Palace Hotel, a foreign employer, through correspondence sent to the
Sultanate of Oman, where respondent Santos was then employed. He was hired without the intervention of the POEA or any authorized recruitment
agency of the government.36

Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses to do so provided: (1) that
the Philippine court is one to which the parties may conveniently resort to; (2) that the Philippine court is in a position to make an intelligent decision
as to the law and the facts; and (3) that the Philippine court has or is likely to have power to enforce its decision. 37 The conditions are unavailing in
the case at bar.

Not Convenient. — We fail to see how the NLRC is a convenient forum given that all the incidents of the case — from the time of recruitment, to
employment to dismissal occurred outside the Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel
and MHICL are not nationals of the Philippines. Neither .are they "doing business in the Philippines." Likewise, the main witnesses, Mr. Shmidt and
Mr. Henk are non-residents of the Philippines.

No power to determine applicable law. — Neither can an intelligent decision be made as to the law governing the employment contract as such was
perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made).38

The employment contract was not perfected in the Philippines. Respondent Santos signified his acceptance by writing a letter while he was in the
Republic of Oman. This letter was sent to the Palace Hotel in the People's Republic of China.

No power to determine the facts. — Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of
took place in Beijing, People's Republic of China. The NLRC was not in a position to determine whether the Tiannamen Square incident truly
adversely affected operations of the Palace Hotel as to justify respondent Santos' retrenchment.

Principle of effectiveness, no power to execute decision. — Even assuming that a proper decision could be reached by the NLRC, such would not
have any binding effect against the employer, the Palace Hotel. The Palace Hotel is a corporation incorporated under the laws of China and was not
even served with summons. Jurisdiction over its person was not acquired.

This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither are we saying that
we do not have power over an employment contract executed in a foreign country. If Santos were an "overseas contract worker", a Philippine forum,
specifically the POEA, not the NLRC, would protect him.39 He is not an "overseas contract worker" a fact which he admits with conviction. 40

Even assuming that the NLRC was the proper forum, even on the merits, the NLRC's decision cannot be sustained.

II. MHC Not Liable

Even if we assume two things: (1) that the NLRC had jurisdiction over the case, and (2) that MHICL was liable for Santos' retrenchment, still MHC,
as a separate and distinct juridical entity cannot be held liable.

True, MHC is an incorporator of MHICL and owns fifty percent (50%) of its capital stock. However, this is not enough to pierce the veil of corporate
fiction between MHICL and MHC.

Piercing the veil of corporate entity is an equitable remedy. It is resorted to when the corporate fiction is used to defeat public convenience, justify
wrong, protect fraud or defend a crime. 41 It is done only when a corporation is a mere alter ego or business conduit of a person or another
corporation.
In Traders Royal Bank v. Court of Appeals,42 we held that "the mere ownership by a single stockholder or by another corporation of all or nearly all
of the capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate corporate personalities."

The tests in determining whether the corporate veil may be pierced are: First, the defendant must have control or complete domination of the other
corporation's finances, policy and business practices with regard to the transaction attacked. There must be proof that the other corporation had no
separate mind, will or existence with respect the act complained of. Second, control must be used by the defendant to commit fraud or wrong. Third,
the aforesaid control or breach of duty must be the proximate cause of the injury or loss complained of. The absence of any of the elements prevents
the piercing of the corporate veil.43

It is basic that a corporation has a personality separate and distinct from those composing it as well as from that of any other legal entity to which it
may be related.44 Clear and convincing evidence is needed to pierce the veil of corporate fiction.45 In this case, we find no evidence to show that
MHICL and MHC are one and the same entity.

III. MHICL not Liable

Respondent Santos predicates MHICL's liability on the fact that MHICL "signed" his employment contract with the Palace Hotel. This fact fails to
persuade us.

First, we note that the Vice President (Operations and Development) of MHICL, Miguel D. Cergueda signed the employment contract as a mere
witness. He merely signed under the word "noted".

When one "notes" a contract, one is not expressing his agreement or approval, as a party would. 46 In Sichangco v. Board of Commissioners of
Immigration,47 the Court recognized that the term "noted" means that the person so noting has merely taken cognizance of the existence of an act or
declaration, without exercising a judicious deliberation or rendering a decision on the matter.

Mr. Cergueda merely signed the "witnessing part" of the document. The "witnessing part" of the document is that which, "in a deed or other formal
instrument is that part which comes after the recitals, or where there are no recitals, after the parties (emphasis ours)."48 As opposed to a party to a
contract, a witness is simply one who, "being present, personally sees or perceives a thing; a beholder, a spectator, or eyewitness."49 One who "notes"
something just makes a "brief written statement"50 a memorandum or observation.

Second, and more importantly, there was no existing employer-employee relationship between Santos and MHICL. In determining the existence of
an employer-employee relationship, the following elements are considered:51

"(1) the selection and engagement of the employee;

"(2) the payment of wages;

"(3) the power to dismiss; and

"(4) the power to control employee's conduct."

MHICL did not have and did not exercise any of the aforementioned powers. It did not select respondent Santos as an employee for the Palace Hotel.
He was referred to the Palace Hotel by his friend, Nestor Buenio. MHICL did not engage respondent Santos to work. The terms of employment were
negotiated and finalized through correspondence between respondent Santos, Mr. Schmidt and Mr. Henk, who were officers and representatives of
the Palace Hotel and not MHICL. Neither did respondent Santos adduce any proof that MHICL had the power to control his conduct. Finally, it was
the Palace Hotel, through Mr. Schmidt and not MHICL that terminated respondent Santos' services.

Neither is there evidence to suggest that MHICL was a "labor-only contractor."52 There is no proof that MHICL "supplied" respondent Santos or even
referred him for employment to the Palace Hotel.

Likewise, there is no evidence to show that the Palace Hotel and MHICL are one and the same entity. The fact that the Palace Hotel is a member of
the "Manila Hotel Group" is not enough to pierce the corporate veil between MHICL and the Palace Hotel.

IV. Grave Abuse of Discretion

Considering that the NLRC was forum non-conveniens and considering further that no employer-employee relationship existed between MHICL,
MHC and respondent Santos, Labor Arbiter Ceferina J. Diosana clearly had no jurisdiction over respondent's claim in NLRC NCR Case No. 00-02-
01058-90.

Labor Arbiters have exclusive and original jurisdiction only over the following:53

"1. Unfair labor practice cases;

 "2. Termination disputes;

"3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other
terms and conditions of employment;

"4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;

"5. Cases arising from any violation of Article 264 of this Code, including questions involving legality of strikes and lockouts; and

"6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-
employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement."

In all these cases, an employer-employee relationship is an indispensable jurisdictional requirement.

The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee
relationship which can be resolved by reference to the Labor Code, or other labor statutes, or their collective bargaining agreements. 54

"To determine which body has jurisdiction over the present controversy, we rely on the sound judicial principle that jurisdiction over the subject
matter is conferred by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the
claims asserted therein."55

The lack of jurisdiction of the Labor Arbiter was obvious from the allegations of the complaint. His failure to dismiss the case amounts to grave
abuse of discretion.56

V. The Fallo

WHEREFORE, the Court hereby GRANTS the petition for certiorari and ANNULS the orders and resolutions of the National Labor Relations
Commission dated May 31, 1993, December 15, 1994 and March 30, 1995 in NLRC NCR CA No. 002101-91 (NLRC NCR Case No. 00-02-01058-
90).

No costs.

SO ORDERED.
NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED,

Petitioner,

LEPANTO CONSOLIDATED MINING COMPANY,

Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari assailing the Decision[1] of the Court of Appeals dated September 8, 2006 in CA-G.R. SP No.

94382 and its Resolution[2] dated December 12, 2006, denying the Motion for Reconsideration.

On August 30, 2005, respondent Lepanto Consolidated Mining Company filed with the Regional Trial Court (RTC) of Makati City a

Complaint[3] against petitioner NM Rothschild & Sons (Australia) Limited praying for a judgment declaring the loan and hedging contracts between

the parties void for being contrary to Article 2018[4] of the Civil Code of the Philippines and for damages. The Complaint was docketed as Civil Case

No. 05-782, and was raffled to Branch 150. Upon respondents (plaintiffs) motion, the trial court authorized respondents counsel to personally bring

the summons and Complaint to the Philippine Consulate General in Sydney, Australia for the latter office to effect service of summons on petitioner

(defendant).

On October 20, 2005, petitioner filed a Special Appearance With Motion to Dismiss [5] praying for the dismissal of the Complaint on the

following grounds: (a) the court has not acquired jurisdiction over the person of petitioner due to the defective and improper service of summons; (b)

the Complaint failed to state a cause of action and respondent does not have any against petitioner; (c) the action is barred by estoppel; and (d)

respondent did not come to court with clean hands.

On November 29, 2005, petitioner filed two Motions: (1) a Motion for Leave to take the deposition of Mr. Paul Murray (Director, Risk

Management of petitioner) before the Philippine Consul General; and (2) a Motion for Leave to Serve Interrogatories on respondent.

On December 9, 2005, the trial court issued an Order[6] denying the Motion to Dismiss. According to the trial court, there was a proper

service of summons through the Department of Foreign Affairs (DFA) on account of the fact that the defendant has neither applied for a license to do

business in the Philippines, nor filed with the Securities and Exchange Commission (SEC) a Written Power of Attorney designating some person on

whom summons and other legal processes maybe served. The trial court also held that the Complaint sufficiently stated a cause of action. The other

allegations in the Motion to Dismiss were brushed aside as matters of defense which can best be ventilated during the trial.

On December 27, 2005, petitioner filed a Motion for Reconsideration.[7] On March 6, 2006, the trial court issued an Order denying the December 27,

2005 Motion for Reconsideration and disallowed the twin Motions for Leave to take deposition and serve written interrogatories.[8]
 On April 3, 2006, petitioner sought redress via a Petition for Certiorari[9] with the Court of Appeals, alleging that the trial court committed

grave abuse of discretion in denying its Motion to Dismiss. The Petition was docketed as CA-G.R. SP No. 94382.

On September 8, 2006, the Court of Appeals rendered the assailed Decision dismissing the Petition for Certiorari. The Court of Appeals

ruled that since the denial of a Motion to Dismiss is an interlocutory order, it cannot be the subject of a Petition for Certiorari, and may only be

reviewed in the ordinary course of law by an appeal from the judgment after trial. On December 12, 2006, the Court of Appeals rendered the assailed

Resolution denying the petitioners Motion for Reconsideration.

Meanwhile, on December 28, 2006, the trial court issued an Order directing respondent to answer some of the questions in petitioners

Interrogatories to Plaintiff dated September 7, 2006.

Notwithstanding the foregoing, petitioner filed the present petition assailing the September 8, 2006 Decision and the December 12, 2006

Resolution of the Court of Appeals. Arguing against the ruling of the appellate court, petitioner insists that (a) an order denying a motion to dismiss

may be the proper subject of a petition for certiorari; and (b) the trial court committed grave abuse of discretion in not finding that it had not validly

acquired jurisdiction over petitioner and that the plaintiff had no cause of action.

Respondent, on the other hand, posits that: (a) the present Petition should be dismissed for not being filed by a real party in interest and for lack of a

proper verification and certificate of non-forum shopping; (b) the Court of Appeals correctly ruled that certiorari was not the proper remedy; and (c)

the trial court correctly denied petitioners motion to dismiss.

Our discussion of the issues raised by the parties follows:

Whether petitioner is a real party in interest

Respondent argues that the present Petition should be dismissed on the ground that petitioner no longer existed as a corporation at the time

said Petition was filed on February 1, 2007. Respondent points out that as of the date of the filing of the Petition, there is no such corporation that

goes by the name NM Rothschild and Sons (Australia) Limited. Thus, according to respondent, the present Petition was not filed by a real party in

interest, citing our ruling in Philips Export B.V. v. Court of Appeals,[10] wherein we held:

A name is peculiarly important as necessary to the very existence of a corporation (American Steel Foundries vs.
Robertson, 269 US 372, 70 L ed 317, 46 S Ct 160; Lauman vs. Lebanon Valley R. Co., 30 Pa 42; First National Bank vs.
Huntington Distilling Co., 40 W Va 530, 23 SE 792). Its name is one of its attributes, an element of its existence, and essential to
 its identity (6 Fletcher [Perm Ed], pp. 3-4). The general rule as to corporations is that each corporation must have a name by
which it is to sue and be sued and do all legal acts. The name of a corporation in this respect designates the corporation in the
same manner as the name of an individual designates the person (Cincinnati Cooperage Co. vs. Bate, 96 Ky 356, 26 SW 538;
Newport Mechanics Mfg. Co. vs. Starbird, 10 NH 123); and the right to use its corporate name is as much a part of the corporate
franchise as any other privilege granted (Federal Secur. Co. vs. Federal Secur. Corp., 129 Or 375, 276 P 1100, 66 ALR 934;
Paulino vs. Portuguese Beneficial Association, 18 RI 165, 26 A 36). [11]

In its Memorandum[12] before this Court, petitioner started to refer to itself as Investec Australia Limited (formerly NM Rothschild & Sons

[Australia] Limited) and captioned said Memorandum accordingly. Petitioner claims that NM Rothschild and Sons (Australia) Limited still exists as a

corporation under the laws of Australia under said new name. It presented before us documents evidencing the process in the Australian Securities &

Investment Commission on the change of petitioners company name from NM Rothschild and Sons (Australia) Limited to Investec Australia

Limited.[13]

We find the submissions of petitioner on the change of its corporate name satisfactory and resolve not to dismiss the present Petition for

Review on the ground of not being prosecuted under the name of the real party in interest. While we stand by our pronouncement in Philips Export on

the importance of the corporate name to the very existence of corporations and the significance thereof in the corporations right to sue, we shall not

go so far as to dismiss a case filed by the proper party using its former name when adequate identification is presented. A real party in interest is the

party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. [14]There is no doubt in our minds

that the party who filed the present Petition, having presented sufficient evidence of its identity and being represented by the same counsel as that of

the defendant in the case sought to be dismissed, is the entity that will be benefited if this Court grants the dismissal prayed for.

Since the main objection of respondent to the verification and certification against forum shopping likewise depends on the supposed

inexistence of the corporation named therein, we give no credit to said objection in light of the foregoing discussion.

Propriety of the Resort to a Petition for Certiorari with the Court of Appeals

We have held time and again that an order denying a Motion to Dismiss is an interlocutory order which neither terminates nor finally

disposes of a case as it leaves something to be done by the court before the case is finally decided on the merits. The general rule, therefore, is that the

denial of a Motion to Dismiss cannot be questioned in a special civil action for Certiorari which is a remedy designed to correct errors of jurisdiction

and not errors of judgment.[15] However, we have likewise held that when the denial of the Motion to Dismiss is tainted with grave abuse of

discretion, the grant of the extraordinary remedy of Certiorari may be justified. By grave abuse of discretion is meant:

[S]uch capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction. The abuse of discretion must be
grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be
so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act all
in contemplation of law.[16]
 The resolution of the present Petition therefore entails an inquiry into whether the Court of Appeals correctly ruled that the trial court did

not commit grave abuse of discretion in its denial of petitioners Motion to Dismiss. A mere error in judgment on the part of the trial court would

undeniably be inadequate for us to reverse the disposition by the Court of Appeals.

Issues more properly ventilated during the trial of the case

As previously stated, petitioner seeks the dismissal of Civil Case No. 05-782 on the following grounds: (a) lack of jurisdiction over the

person of petitioner due to the defective and improper service of summons; (b) failure of the Complaint to state a cause of action and absence of a

cause of action; (c) the action is barred by estoppel; and (d) respondent did not come to court with clean hands.

As correctly ruled by both the trial court and the Court of Appeals, the alleged absence of a cause of action (as opposed to the failure to

state a cause of action), the alleged estoppel on the part of petitioner, and the argument that respondent is in pari delicto in the execution of the

challenged contracts, are not grounds in a Motion to Dismiss as enumerated in Section 1, Rule 16[17] of the Rules of Court. Rather, such defenses raise

evidentiary issues closely related to the validity and/or existence of respondents alleged cause of action and should therefore be threshed out during

the trial.

As regards the allegation of failure to state a cause of action, while the same is usually available as a ground in a Motion to Dismiss, said

ground cannot be ruled upon in the present Petition without going into the very merits of the main case.

It is basic that [a] cause of action is the act or omission by which a party violates a right of another. [18] Its elements are the following: (1) a

right existing in favor of the plaintiff, (2) a duty on the part of the defendant to respect the plaintiff's right, and (3) an act or omission of the defendant

in violation of such right.[19] We have held that to sustain a Motion to Dismiss for lack of cause of action, the complaint must show that the claim for

relief does not exist and not only that the claim was defectively stated or is ambiguous, indefinite or uncertain. [20]

The trial court held that the Complaint in the case at bar contains all the three elements of a cause of action, i.e., it alleges that: (1) plaintiff

has the right to ask for the declaration of nullity of the Hedging Contracts for being null and void and contrary to Article 2018 of the Civil Code of the
Philippines; (2) defendant has the corresponding obligation not to enforce the Hedging Contracts because they are in the nature of wagering or

gambling agreements and therefore the transactions implementing those contracts are null and void under Philippine laws; and (3) defendant ignored

the advice and intends to enforce the Hedging Contracts by demanding financial payments due therefrom. [21]
 The rule is that in a Motion to Dismiss, a defendant hypothetically admits the truth of the material allegations of the ultimate facts contained

in the plaintiff's complaint.[22]However, this principle of hypothetical admission admits of exceptions. Thus, in Tan v. Court of Appeals, [23] we held:

The flaw in this conclusion is that, while conveniently echoing the general rule that averments in the complaint are
deemed hypothetically admitted upon the filing of a motion to dismiss grounded on the failure to state a cause of action, it did not
take into account the equally established limitations to such rule, i.e., that a motion to dismiss does not admit the truth of mere
epithets of fraud; nor allegations of legal conclusions; nor an erroneous statement of law; nor mere inferences or conclusions
from facts not stated; nor mere conclusions of law; nor allegations of fact the falsity of which is subject to judicial notice; nor
matters of evidence; nor surplusage and irrelevant matter; nor scandalous matter inserted merely to insult the opposing party; nor
to legally impossible facts; nor to facts which appear unfounded by a record incorporated in the pleading, or by a document
referred to; and, nor to general averments contradicted by more specific averments. A more judicious resolution of a motion to
dismiss, therefore, necessitates that the court be not restricted to the consideration of the facts alleged in the complaint and
inferences fairly deducible therefrom. Courts may consider other facts within the range of judicial notice as well as relevant laws
and jurisprudence which the courts are bound to take into account, and they are also fairly entitled to examine records/documents
duly incorporated into the complaint by the pleader himself in ruling on the demurrer to the complaint.[24](Emphases supplied.)

In the case at bar, respondent asserts in the Complaint that the Hedging Contracts are void for being contrary to Article 2018[25] of the Civil

Code. Respondent claims that under the Hedging Contracts, despite the express stipulation for deliveries of gold, the intention of the parties was

allegedly merely to compel each other to pay the difference between the value of the gold at the forward price stated in the contract and its market

price at the supposed time of delivery.

Whether such an agreement is void is a mere allegation of a conclusion of law, which therefore cannot be hypothetically admitted. Quite

properly, the relevant portions of the contracts sought to be nullified, as well as a copy of the contract itself, are incorporated in the Complaint. The

determination of whether or not the Complaint stated a cause of action would therefore involve an inquiry into whether or not the assailed contracts
are void under Philippine laws. This is, precisely, the very issue to be determined in Civil Case No. 05-782. Indeed, petitioners defense against the

charge of nullity of the Hedging Contracts is the purported intent of the parties that actual deliveries of gold be made pursuant thereto. Such a defense

requires the presentation of evidence on the merits of the case. An issue that requires the contravention of the allegations of the complaint, as well as

the full ventilation, in effect, of the main merits of the case, should not be within the province of a mere Motion to Dismiss.[26] The trial court,

therefore, correctly denied the Motion to Dismiss on this ground.

It is also settled in jurisprudence that allegations of estoppel and bad faith require proof. Thus, in Paraaque Kings Enterprises, Inc. v. Court

of Appeals,[27] we ruled:

Having come to the conclusion that the complaint states a valid cause of action for breach of the right of first refusal
and that the trial court should thus not have dismissed the complaint, we find no more need to pass upon the question of whether
the complaint states a cause of action for damages or whether the complaint is barred by estoppel or laches. As these
 matters require presentation and/or determination of facts, they can be best resolved after trial on the merits.[28] (Emphases
supplied.)

On the proposition in the Motion to Dismiss that respondent has come to court with unclean hands, suffice it to state that the determination

of whether one acted in bad faith and whether damages may be awarded is evidentiary in nature. Thus, we have previously held that [a]s a matter of

defense, it can be best passed upon after a full-blown trial on the merits.[29]

Jurisdiction over the person of petitioner

Petitioner alleges that the RTC has not acquired jurisdiction over its person on account of the improper service of summons. Summons was

served on petitioner through the DFA, with respondents counsel personally bringing the summons and Complaint to the Philippine Consulate General

in Sydney, Australia.

In the pleadings filed by the parties before this Court, the parties entered into a lengthy debate as to whether or not petitioner is doing

business in the Philippines. However, such discussion is completely irrelevant in the case at bar, for two reasons. Firstly, since the Complaint was

filed on August 30, 2005, the provisions of the 1997 Rules of Civil Procedure govern the service of summons. Section 12, Rule 14 of said rules

provides:

Sec. 12. Service upon foreign private juridical entity. When the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service may be made on its resident agent designated in accordance with law for that
purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers or
agents within the Philippines. (Emphasis supplied.)

This is a significant amendment of the former Section 14 of said rule which previously provided:

Sec. 14. Service upon private foreign corporations. If the defendant is a foreign corporation, or a nonresident joint
stock company or association, doing business in the Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or if there be no such agent, on the government official designated by law to that effect, or
on any of its officers or agents within the Philippines. (Emphasis supplied.)
The coverage of the present rule is thus broader.[30] Secondly, the service of summons to petitioner through the DFA by the conveyance of the

summons to the Philippine Consulate General in Sydney, Australia was clearly made not through the above-quoted Section 12, but pursuant to

Section 15 of the same rule which provides:

Sec. 15. Extraterritorial service. When the defendant does not reside and is not found in the Philippines, and the action
affects the personal status of the plaintiff or relates to, or the subject of which is property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in
excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines,
service may, by leave of court, be effected out of the Philippines by personal service as under section 6; or by publication in a
newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons
and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court
may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days
after notice, within which the defendant must answer.

Respondent argues[31] that extraterritorial service of summons upon foreign private juridical entities is not proscribed under the Rules of

Court, and is in fact within the authority of the trial court to adopt, in accordance with Section 6, Rule 135:

Sec. 6. Means to carry jurisdiction into effect. When by law jurisdiction is conferred on a court or judicial officer, all
auxiliary writs, processes and other means necessary to carry it into effect may be employed by such court or officer; and if the
procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these rules, any suitable
process or mode of proceeding may be adopted which appears comformable to the spirit of said law or rules.

Section 15, Rule 14, however, is the specific provision dealing precisely with the service of summons on a defendant which does not reside

and is not found in the Philippines, while Rule 135 (which is in Part V of the Rules of Court entitled Legal Ethics) concerns the general powers and

duties of courts and judicial officers.

Breaking down Section 15, Rule 14, it is apparent that there are only four instances wherein a defendant who is a non-resident and is not

found in the country may be served with summons by extraterritorial service, to wit: (1) when the action affects the personal status of the plaintiffs;

(2) when the action relates to, or the subject of which is property, within the Philippines, in which the defendant claims a lien or an interest, actual or

contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in

the Philippines; and (4) when the defendant non-resident's property has been attached within the Philippines. In these instances, service of summons

may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the

court may deem sufficient.[32]

Proceeding from this enumeration, we held in Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation[33] that:
 Undoubtedly, extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if an
action is in personam.

When the case instituted is an action in rem or quasi in rem, Philippine courts already have jurisdiction to hear and
decide the case because, in actions in rem and quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to
confer jurisdiction on the court, provided that the court acquires jurisdiction over the res. Thus, in such instance, extraterritorial
service of summons can be made upon the defendant. The said extraterritorial service of summons is not for the purpose of
vesting the court with jurisdiction, but for complying with the requirements of fair play or due process, so that the defendant will
be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in
which he has an interest may be subjected to a judgment in favor of the plaintiff, and he can thereby take steps to protect his
interest if he is so minded. On the other hand, when the defendant or respondent does not reside and is not found in the
Philippines, and the action involved is in personam, Philippine courts cannot try any case against him because of the
impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court.[34] (Emphases supplied.)

In Domagas v. Jensen,[35] we held that:

[T]he aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem for
that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce
personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve
his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance
with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some
responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant to
specifically perform some act or actions to fasten a pecuniary liability on him.[36]

It is likewise settled that [a]n action in personam is lodged against a person based on personal liability; an action in rem is directed against the thing
itself instead of the person; while an action quasi in rem names a person as defendant, but its object is to subject that persons interest in a property to a

corresponding lien or obligation.[37]

The Complaint in the case at bar is an action to declare the loan and Hedging Contracts between the parties void with a prayer for

damages. It is a suit in which the plaintiff seeks to be freed from its obligations to the defendant under a contract and to hold said defendant

pecuniarily liable to the plaintiff for entering into such contract. It is therefore an action in personam, unless and until the plaintiff attaches a property

within the Philippines belonging to the defendant, in which case the action will be converted to one quasi in rem.

Since the action involved in the case at bar is in personam and since the defendant, petitioner Rothschild/Investec, does not reside and is not

found in the Philippines, the Philippine courts cannot try any case against it because of the impossibility of acquiring jurisdiction over its person

unless it voluntarily appears in court.[38]

 In this regard, respondent vigorously argues that petitioner should be held to have voluntarily appeared before the trial court when it prayed

for, and was actually afforded, specific reliefs from the trial court. [39] Respondent points out that while petitioners Motion to Dismiss was still

pending, petitioner prayed for and was able to avail of modes of discovery against respondent, such as written interrogatories, requests for admission,

deposition, and motions for production of documents.[40]

Petitioner counters that under this Courts ruling in the leading case of La Naval Drug Corporation v. Court of Appeals,[41] a party may file a

Motion to Dismiss on the ground of lack of jurisdiction over its person, and at the same time raise affirmative defenses and pray for affirmative relief,

without waiving its objection to the acquisition of jurisdiction over its person. [42]

It appears, however, that petitioner misunderstood our ruling in La Naval. A close reading of La Naval reveals that the Court intended a

distinction between the raising of affirmative defenses in an Answer (which would not amount to acceptance of the jurisdiction of the court) and the

prayer for affirmative reliefs (which would be considered acquiescence to the jurisdiction of the court):

In the same manner that a plaintiff may assert two or more causes of action in a court suit, a defendant is likewise
expressly allowed, under Section 2, Rule 8, of the Rules of Court, to put up his own defenses alternatively or even
hypothetically. Indeed, under Section 2, Rule 9, of the Rules of Court, defenses and objections not pleaded either in a motion to
dismiss or in an answer, except for the failure to state a cause of action, are deemed waived. We take this to mean that a
defendant may, in fact, feel enjoined to set up, along with his objection to the court's jurisdiction over his person, all other
possible defenses. It thus appears that it is not the invocation of any of such defenses, but the failure to so raise them, that can
result in waiver or estoppel. By defenses, of course, we refer to the grounds provided for in Rule 16 of the Rules of Court that
must be asserted in a motion to dismiss or by way of affirmative defenses in an answer.

Mindful of the foregoing, in Signetics Corporation vs. Court of Appeals and Freuhauf Electronics Phils., Inc. (225
SCRA 737, 738), we lately ruled:

This is not to say, however, that the petitioner's right to question the jurisdiction of the court over
its person is now to be deemed a foreclosed matter. If it is true, as Signetics claims, that its only involvement
in the Philippines was through a passive investment in Sigfil, which it even later disposed of, and that TEAM
Pacific is not its agent, then it cannot really be said to be doing business in the Philippines. It is a defense,
however, that requires the contravention of the allegations of the complaint, as well as a full ventilation, in
effect, of the main merits of the case, which should not thus be within the province of a mere motion to
dismiss. So, also, the issue posed by the petitioner as to whether a foreign corporation which has done
business in the country, but which has ceased to do business at the time of the filing of a complaint, can still
be made to answer for a cause of action which accrued while it was doing business, is another matter that
would yet have to await the reception and admission of evidence. Since these points have seasonably been
raised by the petitioner, there should be no real cause for what may understandably be its apprehension, i.e.,
that by its participation during the trial on the merits, it may, absent an invocation of separate or independent
reliefs of its own, be considered to have voluntarily submitted itself to the court's jurisdiction.[43] (Emphases
supplied.)
 In order to conform to the ruling in La Naval, which was decided by this Court in 1994, the former Section 23, Rule 14 [44] concerning

voluntary appearance was amended to include a second sentence in its equivalent provision in the 1997 Rules of Civil Procedure:

SEC. 20. Voluntary appearance. The defendant's voluntary appearance in the action shall be equivalent to service of
summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant
shall not be deemed a voluntary appearance. (Emphasis supplied.)

The new second sentence, it can be observed, merely mentions other grounds in a Motion to Dismiss aside from lack of jurisdiction over

the person of the defendant. This clearly refers to affirmative defenses, rather than affirmative reliefs.

Thus, while mindful of our ruling in La Naval and the new Section 20, Rule 20, this Court, in several cases, ruled that seeking affirmative

relief in a court is tantamount to voluntary appearance therein.[45] Thus, in Philippine Commercial International Bank v. Dy Hong Pi,[46] wherein

defendants filed a Motion for Inhibition without submitting themselves to the jurisdiction of this Honorable Court subsequent to their filing of a

Motion to Dismiss (for Lack of Jurisdiction), we held:

Besides, any lingering doubts on the issue of voluntary appearance dissipate when the respondents' motion for
inhibition is considered. This motion seeks a sole relief: inhibition of Judge Napoleon Inoturan from further hearing the
case. Evidently, by seeking affirmative relief other than dismissal of the case, respondents manifested their voluntary submission
to the court's jurisdiction. It is well-settled that the active participation of a party in the proceedings is tantamount to an
invocation of the court's jurisdiction and a willingness to abide by the resolution of the case, and will bar said party from later on
impugning the court's jurisdiction.[47] (Emphasis supplied.)

In view of the above, we therefore rule that petitioner, by seeking affirmative reliefs from the trial court, is deemed to have voluntarily

submitted to the jurisdiction of said court. A party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and after

obtaining or failing to obtain such relief, repudiate or question that same jurisdiction. [48] Consequently, the trial court cannot be considered to have

committed grave abuse of discretion amounting to lack or excess of jurisdiction in the denial of the Motion to Dismiss on account of failure to

acquire jurisdiction over the person of the defendant.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The Decision of the Court of Appeals dated September 8, 2006 and its

Resolution dated December 12, 2006 in CA-G.R. SP No. 94382 are hereby AFFIRMED.

No pronouncement as to costs. SO ORDERED.

PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, and ATHONA HOLDINGS, N.V., petitioners,
vs. THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO DAIC, VENTURA O. DUCAT, PRECIOSO R. PERLAS, and
WILLIAM H. CRAIG, respondents.

DECISION
MENDOZA, J.:

This case presents for determination the conclusiveness of a foreign judgment upon the rights of the parties under the same cause of action
asserted in a case in our local court.Petitioners brought this case in the Regional Trial Court of Makati, Branch 56, which, in view of the pendency at
the time of the foreign action, dismissed Civil Case No. 16563 on the ground of litis pendentia, in addition to forum non conveniens. On appeal, the
Court of Appeals affirmed. Hence this petition for review on certiorari.
The facts are as follows:
On January 15, 1983, private respondent Ventura O. Ducat obtained separate loans from petitioners Ayala International Finance Limited
(hereafter called AYALA)[1] and Philsec Investment Corporation (hereafter called PHILSEC) in the sum of US$2,500,000.00, secured by shares of
stock owned by Ducat with a market value of P14,088,995.00. In order to facilitate the payment of the loans, private respondent 1488, Inc., through
its president, private respondent Drago Daic, assumed Ducats obligation under an Agreement, dated January 27, 1983, whereby 1488, Inc. executed a
Warranty Deed with Vendors Lien by which it sold to petitioner Athona Holdings, N.V. (hereafter called ATHONA) a parcel of land in Harris
County, Texas, U.S.A., for US$2,807,209.02, while PHILSEC and AYALA extended a loan to ATHONA in the amount of US$2,500,000.00 as
initial payment of the purchase price. The balance of US$307,209.02 was to be paid by means of a promissory note executed by ATHONA in favor
of 1488, Inc. Subsequently, upon their receipt of the US$2,500,000.00 from 1488, Inc., PHILSEC and AYALA released Ducat from his indebtedness
and delivered to 1488, Inc. all the shares of stock in their possession belonging to Ducat.
As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount covered by the note became due and
demandable. Accordingly, on October 17, 1985, private respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and ATHONA in the United
States for payment of the balance of US$307,209.02 and for damages for breach of contract and for fraud allegedly perpetrated by petitioners in
misrepresenting the marketability of the shares of stock delivered to 1488, Inc. under the Agreement. Originally instituted in the United States
District Court of Texas, 165th Judicial District, where it was docketed as Case No. 85-57746, the venue of the action was later transferred to the
United States District Court for the Southern District of Texas, where 1488, Inc. filed an amended complaint, reiterating its allegations in the original
complaint. ATHONA filed an answer with counterclaim, impleading private respondents herein as counterdefendants, for allegedly conspiring in
selling the property at a price over its market value. Private respondent Perlas, who had allegedly appraised the property, was later dropped as
counterdefendant. ATHONA sought the recovery of damages and excess payment allegedly made to 1488, Inc. and, in the alternative, the rescission
of sale of the property. For their part, PHILSEC and AYALA filed a motion to dismiss on the ground of lack of jurisdiction over their person, but, as
their motion was denied, they later filed a joint answer with counterclaim against private respondents and Edgardo V. Guevarra, PHILSECs own
former president, for the rescission of the sale on the ground that the property had been overvalued. On March 13, 1990, the United States District
Court for the Southern District of Texas dismissed the counterclaim against Edgardo V. Guevarra on the ground that it was frivolous and [was]
brought against him simply to humiliate and embarrass him. For this reason, the U.S. court imposed so-called Rule 11 sanctions on PHILSEC and
AYALA and ordered them to pay damages to Guevarra.
On April 10, 1987, while Civil Case No. H-86-440 was pending in the United States, petitioners filed a complaint For Sum of Money with
Damages and Writ of Preliminary Attachment against private respondents in the Regional Trial Court of Makati, where it was docketed as Civil Case
No. 16563. The complaint reiterated the allegation of petitioners in their respective counterclaims in Civil Action No. H-86-440 of the United States
District Court of Southern Texas that private respondents committed fraud by selling the property at a price 400 percent more than its true value of
US$800,000.00. Petitioners claimed that, as a result of private respondents fraudulent misrepresentations, ATHONA, PHILSEC, and AYALA were
induced to enter into the Agreement and to purchase the Houston property. Petitioners prayed that private respondents be ordered to return to
ATHONA the excess payment of US$1,700,000.00 and to pay damages. On April 20, 1987, the trial court issued a writ of preliminary attachment
against the real and personal properties of private respondents.[2]
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis pendentia, vis-a-vis Civil Action No. H-86-440
filed by 1488, Inc. and Daic in the U.S., (2) forum non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state a cause of action.
Ducat contended that the alleged overpricing of the property prejudiced only petitioner ATHONA, as buyer, but not PHILSEC and BPI-IFL which
were not parties to the sale and whose only participation was to extend financial accommodation to ATHONA under a separate loan agreement. On
the other hand, private respondents 1488, Inc. and its president Daic filed a joint Special Appearance and Qualified Motion to Dismiss, contending
that the action being in personam, extraterritorial service of summons by publication was ineffectual and did not vest the court with jurisdiction over
1488, Inc., which is a non-resident foreign corporation, and Daic, who is a non-resident alien.
On January 26, 1988, the trial court granted Ducats motion to dismiss, stating that the evidentiary requirements of the controversy may be more
suitably tried before the forum of the litis pendentia in the U.S., under the principle in private international law of forum non conveniens, even as it
noted that Ducat was not a party in the U.S. case.
A separate hearing was held with regard to 1488, Inc. and Daics motion to dismiss. On March 9, 1988, the trial court[3] granted the motion to
dismiss filed by 1488, Inc. and Daic on the ground of litis pendentia considering that

the main factual element of the cause of action in this case which is the validity of the sale of real property in the United States between
defendant 1488 and plaintiff ATHONA is the subject matter of the pending case in the United States District Court which, under the doctrine
of forum non conveniens, is the better (if not exclusive) forum to litigate matters needed to determine the assessment and/or fluctuations of the
 fair market value of real estate situated in Houston, Texas, U.S.A. from the date of the transaction in 1983 up to the present and verily, . . .
(emphasis by trial court)

The trial court also held itself without jurisdiction over 1488, Inc. and Daic because they were non-residents and the action was not an action in rem
or quasi in rem, so that extraterritorial service of summons was ineffective. The trial court subsequently lifted the writ of attachment it had earlier
issued against the shares of stocks of 1488, Inc. and Daic.
Petitioners appealed to the Court of Appeals, arguing that the trial court erred in applying the principle of litis pendentia and forum non
conveniens and in ruling that it had no jurisdiction over the defendants, despite the previous attachment of shares of stocks belonging to 1488, Inc.
and Daic.
On January 6, 1992, the Court of Appeals[4] affirmed the dismissal of Civil Case No. 16563 against Ducat, 1488, Inc., and Daic on the ground
of litis pendentia, thus:

The plaintiffs in the U.S. court are 1488 Inc. and/or Drago Daic, while the defendants are Philsec, the Ayala International Finance Ltd. (BPI-IFLs
former name) and the Athona Holdings, NV. The case at bar involves the same parties. The transaction sued upon by the parties, in both cases is the
Warranty Deed executed by and between Athona Holdings and 1488 Inc. In the U.S. case, breach of contract and the promissory note are sued upon
by 1488 Inc., which likewise alleges fraud employed by herein appellants, on the marketability of Ducats securities given in exchange for the Texas
property. The recovery of a sum of money and damages, for fraud purportedly committed by appellees, in overpricing the Texas land, constitute the
action before the Philippine court, which likewise stems from the same Warranty Deed.

The Court of Appeals also held that Civil Case No. 16563 was an action in personam for the recovery of a sum of money for alleged tortious acts, so
that service of summons by publication did not vest the trial court with jurisdiction over 1488, Inc. and Drago Daic. The dismissal of Civil Case No.
16563 on the ground of forum non conveniens was likewise affirmed by the Court of Appeals on the ground that the case can be better tried and
decided by the U.S. court:

The U.S. case and the case at bar arose from only one main transaction, and involve foreign elements, to wit: 1) the property subject matter of the
sale is situated in Texas, U.S.A.; 2) the seller, 1488 Inc. is a non-resident foreign corporation; 3) although the buyer, Athona Holdings, a foreign
corporation which does not claim to be doing business in the Philippines, is wholly owned by Philsec, a domestic corporation, Athona Holdings is
also owned by BPI-IFL, also a foreign corporation; 4) the Warranty Deed was executed in Texas, U.S.A.

In their present appeal, petitioners contend that:

1. THE DOCTRINE OF PENDENCY OF ANOTHER ACTION BETWEEN THE SAME PARTIES FOR THE SAME CAUSE (LITIS
PENDENTIA) RELIED UPON BY THE COURT OF APPEALS IN AFFIRMING THE TRIAL COURTS DISMISSAL OF THE
CIVIL ACTION IS NOT APPLICABLE.
2. THE PRINCIPLE OF FORUM NON CONVENIENS ALSO RELIED UPON BY THE COURT OF APPEALS IN AFFIRMING THE
DISMISSAL BY THE TRIAL COURT OF THE CIVIL ACTION IS LIKEWISE NOT APPLICABLE.
3. AS A COROLLARY TO THE FIRST TWO GROUNDS, THE COURT OF APPEALS ERRED IN NOT HOLDING THAT
PHILIPPINE PUBLIC POLICY REQUIRED THE ASSUMPTION, NOT THE RELINQUISHMENT, BY THE TRIAL COURT OF
ITS RIGHTFUL JURISDICTION IN THE CIVIL ACTION FOR THERE IS EVERY REASON TO PROTECT AND VINDICATE
PETITIONERS RIGHTS FOR TORTIOUS OR WRONGFUL ACTS OR CONDUCT PRIVATE RESPONDENTS (WHO ARE
MOSTLY NON-RESIDENT ALIENS) INFLICTED UPON THEM HERE IN THE PHILIPPINES.
We will deal with these contentions in the order in which they are made.
First. It is important to note in connection with the first point that while the present case was pending in the Court of Appeals, the United States
District Court for the Southern District of Texas rendered judgment [5] in the case before it. The judgment, which was in favor of private respondents,
was affirmed on appeal by the Circuit Court of Appeals. [6] Thus, the principal issue to be resolved in this case is whether Civil Case No. 16536 is
barred by the judgment of the U.S. court.
Private respondents contend that for a foreign judgment to be pleaded as res judicata, a judgment admitting the foreign decision is not
necessary. On the other hand, petitioners argue that the foreign judgment cannot be given the effect of res judicata without giving them an
opportunity to impeach it on grounds stated in Rule 39, 50 of the Rules of Court, to wit: want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact.
Petitioners contention is meritorious. While this Court has given the effect of res judicata to foreign judgments in several cases,[7] it was after
the parties opposed to the judgment had been given ample opportunity to repel them on grounds allowed under the law. [8] It is not necessary for this
purpose to initiate a separate action or proceeding for enforcement of the foreign judgment. What is essential is that there is opportunity to challenge
the foreign judgment, in order for the court to properly determine its efficacy. This is because in this jurisdiction, with respect to actions in personam,
as distinguished from actions in rem, a foreign judgment merely constitutes prima facie evidence of the justness of the claim of a party and, as such,
is subject to proof to the contrary.[9] Rule 39, 50 provides:

SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of a foreign country, having jurisdiction to pronounce the judgment is
as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between the parties and their successors in interest by a
subsequent title; but the judgment may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake
of law or fact.

Thus, in the case of General Corporation of the Philippines v. Union Insurance Society of Canton, Ltd.,[10] which private respondents invoke
for claiming conclusive effect for the foreign judgment in their favor, the foreign judgment was considered res judicata because this Court found
from the evidence as well as from appellants own pleadings[11] that the foreign court did not make a clear mistake of law or fact or that its judgment
was void for want of jurisdiction or because of fraud or collusion by the defendants. Trial had been previously held in the lower court and only
afterward was a decision rendered, declaring the judgment of the Supreme Court of the State of Washington to have the effect of res judicata in the
case before the lower court. In the same vein, in Philippine International Shipping Corp. v. Court of Appeals,[12] this Court held that the foreign
judgment was valid and enforceable in the Philippines there being no showing that it was vitiated by want of notice to the party, collusion, fraud or
clear mistake of law or fact. The prima facie presumption under the Rule had not been rebutted.
In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the judgment of the U.S. court as basis for declaring
it res judicata or conclusive of the rights of private respondents. The proceedings in the trial court were summary. Neither the trial court nor the
appellate court was even furnished copies of the pleadings in the U.S. court or apprised of the evidence presented thereat, to assure a proper
determination of whether the issues then being litigated in the U.S. court were exactly the issues raised in this case such that the judgment that might
be rendered would constitute res judicata. As the trial court stated in its disputed order dated March 9, 1988:

On the plaintiffs claim in its Opposition that the causes of action of this case and the pending case in the United States are not
identical, precisely the Order of January 26, 1988 never found that the causes of action of this case and the case pending before the USA
Court, were identical. (emphasis added)

It was error therefore for the Court of Appeals to summarily rule that petitioners action is barred by the principle of res judicata. Petitioners in fact
questioned the jurisdiction of the U.S. court over their persons, but their claim was brushed aside by both the trial court and the Court of Appeals.[13]
Moreover, the Court notes that on April 22, 1992, 1488, Inc. and Daic filed a petition for the enforcement of judgment in the Regional Trial
Court of Makati, where it was docketed as Civil Case No. 92-1070 and assigned to Branch 134, although the proceedings were suspended because of
the pendency of this case. To sustain the appellate courts ruling that the foreign judgment constitutes res judicata and is a bar to the claim of
petitioners would effectively preclude petitioners from repelling the judgment in the case for enforcement. An absurdity could then arise: a foreign
judgment is not subject to challenge by the plaintiff against whom it is invoked, if it is pleaded to resist a claim as in this case, but it may be opposed
by the defendant if the foreign judgment is sought to be enforced against him in a separate proceeding. This is plainly untenable. It has been held
therefore that:

[A] foreign judgment may not be enforced if it is not recognized in the jurisdiction where affirmative relief is being sought. Hence, in the interest of
justice, the complaint should be considered as a petition for the recognition of the Hongkong judgment under Section 50 (b), Rule 39 of the Rules of
Court in order that the defendant, private respondent herein, may present evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of
fact and law, if applicable.[14]

Accordingly, to insure the orderly administration of justice, this case and Civil Case No. 92-1070 should be consolidated.[15] After all, the two
have been filed in the Regional Trial Court of Makati, albeit in different salas, this case being assigned to Branch 56 (Judge Fernando V. Gorospe),
while Civil Case No. 92-1070 is pending in Branch 134 of Judge Ignacio Capulong.In such proceedings, petitioners should have the burden of
impeaching the foreign judgment and only in the event they succeed in doing so may they proceed with their action against private respondents.
Second. Nor is the trial courts refusal to take cognizance of the case justifiable under the principle of forum non conveniens. First, a motion to
dismiss is limited to the grounds under Rule 16, 1, which does not include forum non conveniens.[16] The propriety of dismissing a case based on this
principle requires a factual determination, hence, it is more properly considered a matter of defense. Second, while it is within the discretion of the
trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special
circumstances require the courts desistance.[17]
In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings filed by private respondents in connection with
the motion to dismiss. It failed to consider that one of the plaintiffs (PHILSEC) is a domestic corporation and one of the defendants (Ventura Ducat)
is a Filipino, and that it was the extinguishment of the latters debt which was the object of the transaction under litigation. The trial court arbitrarily
dismissed the case even after finding that Ducat was not a party in the U.S. case.
Third. It was error we think for the Court of Appeals and the trial court to hold that jurisdiction over 1488, Inc. and Daic could not be obtained
because this is an action in personam and summons were served by extraterritorial service. Rule 14, 17 on extraterritorial service provides that
service of summons on a non-resident defendant may be effected out of the Philippines by leave of Court where, among others, the property of the
defendant has been attached within the Philippines.[18] It is not disputed that the properties, real and personal, of the private respondents had been
attached prior to service of summons under the Order of the trial court dated April 20, 1987.[19]
Fourth. As for the temporary restraining order issued by the Court on June 29, 1994, to suspend the proceedings in Civil Case No. 92-1445
filed by Edgardo V. Guevarra to enforce so-called Rule 11 sanctions imposed on the petitioners by the U.S. court, the Court finds that the judgment
sought to be enforced is severable from the main judgment under consideration in Civil Case No. 16563. The separability of Guevarras claim is not
only admitted by petitioners,[20] it appears from the pleadings that petitioners only belatedly impleaded Guevarra as defendant in Civil Case No.
16563.[21] Hence, the TRO should be lifted and Civil Case No. 92-1445 allowed to proceed.
 WHEREFORE, the decision of the Court of Appeals is REVERSED and Civil Case No. 16563 is REMANDED to the Regional Trial Court of
Makati for consolidation with Civil Case No. 92-1070 and for further proceedings in accordance with this decision. The temporary restraining order
issued on June 29, 1994 is hereby LIFTED.
SO ORDERED.
G.R. No. 154830 June 8, 2007

PIONEER CONCRETE PHILIPPINES, INC., PIONEER PHILIPPINES HOLDINGS, and PHILIP J. KLEPZIG, petitioners,
vs.
ANTONIO D. TODARO, respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari seeking to annul and set aside the Decision1 of the Court of Appeals (CA) dated October 31,
2000 in CA-G.R. SP No. 54155 and its Resolution2 of August 21, 2002 denying petitioners’ Motion for Reconsideration.

The factual and procedural antecedents of the case are as follows:

On January 16, 1998, herein respondent Antonio D. Todaro (Todaro) filed with the Regional Trial Court (RTC) of Makati City, a complaint for Sum
of Money and Damages with Preliminary Attachment against Pioneer International Limited (PIL), Pioneer Concrete Philippines, Inc. (PCPI), Pioneer
Philippines Holdings, Inc. (PPHI), John G. McDonald (McDonald) and Philip J. Klepzig (Klepzig). 3

In his complaint, Todaro alleged that PIL is a corporation duly organized and existing under the laws of Australia and is principally engaged in the
ready-mix concrete and concrete aggregates business; PPHI is the company established by PIL to own and hold the stocks of its operating company
in the Philippines; PCPI is the company established by PIL to undertake its business of ready-mix concrete, concrete aggregates and quarrying
operations in the Philippines; McDonald is the Chief Executive of the Hongkong office of PIL; and, Klepzig is the President and Managing Director
of PPHI and PCPI; Todaro has been the managing director of Betonval Readyconcrete, Inc. (Betonval), a company engaged in pre-mixed concrete
and concrete aggregate production; he resigned from Betonval in February 1996; in May 1996, PIL contacted Todaro and asked him if he was
available to join them in connection with their intention to establish a ready-mix concrete plant and other related operations in the Philippines;
Todaro informed PIL of his availability and interest to join them; subsequently, PIL and Todaro came to an agreement wherein the former consented
to engage the services of the latter as a consultant for two to three months, after which, he would be employed as the manager of PIL's ready-mix
concrete operations should the company decide to invest in the Philippines; subsequently, PIL started its operations in the Philippines; however, it
refused to comply with its undertaking to employ Todaro on a permanent basis. 4

Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss the complaint on the grounds that the complaint states no cause of
action, that the RTC has no jurisdiction over the subject matter of the complaint, as the same is within the jurisdiction of the NLRC, and that the
complaint should be dismissed on the basis of the doctrine of forum non conveniens.5

In its Order dated January 4, 1999, the RTC of Makati, Branch 147, denied herein petitioners' respective motions to dismiss.6 Herein petitioners, as
defendants, filed an Urgent Omnibus Motion7 for the reconsideration of the trial court's Order of January 4, 1999 but the trial court denied it via its
Order8 dated June 3, 1999.

On August 3, 1999, herein petitioners filed a Petition for Certiorari with the CA.9 On October 31, 2000, the CA rendered its presently assailed
Decision denying herein petitioners' Petition for Certiorari. Petitioners filed a Motion for Reconsideration but the CA denied it in its Resolution
dated August 21, 2002.

Hence, herein Petition for Review on Certiorari based on the following assignment of errors:

A.

THE COURT OF APPEALS' CONCLUSION THAT THE COMPLAINT STATES A CAUSE OF ACTION AGAINST PETITIONERS
IS WITHOUT ANY LEGAL BASIS. THE ANNEXES TO THE COMPLAINT CLEARLY BELIE THE ALLEGATION OF
EXISTENCE OF AN EMPLOYMENT CONTRACT BETWEEN PRIVATE RESPONDENT AND PETITIONERS.

B.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND WITH
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT UPHELD THE JURISDICTION OF THE TRIAL COURT
DESPITE THE FACT THAT THE COMPLAINT INDUBITABLY SHOWS THAT IT IS AN ACTION FOR AN ALLEGED BREACH
OF EMPLOYMENT CONTRACT, AND HENCE, FALLS WITHIN THE EXLCUSIVE JURISDICTION OF THE NATIONAL LABOR
RELATIONS COMMISSION.

THE COURT OF APPEALS DISREGARDED AND FAILED TO CONSIDER THE PRINCIPLE OF "FORUM NON CONVENIENS"
AS A VALID GROUND FOR DISMISSING A COMPLAINT.10
In their first assigned error, petitioners contend that there was no perfected employment contract between PIL and herein respondent. Petitioners
assert that the annexes to respondent's complaint show that PIL's offer was for respondent to be employed as the manager only of its pre-mixed
concrete operations and not as the company's managing director or CEO. Petitioners argue that when respondent reiterated his intention to become
the manager of PIL's overall business venture in the Philippines, he, in effect did not accept PIL's offer of employment and instead made a counter-
offer, which, however, was not accepted by PIL. Petitioners also contend that under Article 1318 of the Civil Code, one of the requisites for a
contract to be perfected is the consent of the contracting parties; that under Article 1319 of the same Code, consent is manifested by the meeting of
the offer and the acceptance upon the thing and the cause which are to constitute the contract; that the offer must be certain and the acceptance
absolute; that a qualified acceptance constitutes a counter-offer. Petitioners assert that since PIL did not accept respondent's counter-offer, there never
was any employment contract that was perfected between them.

Petitioners further argue that respondent's claim for damages based on the provisions of Articles 19 and 21 of the Civil Code is baseless because it
was shown that there was no perfected employment contract.

Assuming, for the sake of argument, that PIL may be held liable for breach of employment contract, petitioners contend that PCPI and PPHI, may not
also be held liable because they are juridical entities with personalities which are separate and distinct from PIL, even if they are subsidiary
corporations of the latter. Petitioners also aver that the annexes to respondent's complaint show that the negotiations on the alleged employment
contract took place between respondent and PIL through its office in Hongkong. In other words, PCPI and PPHI were not privy to the negotiations
between PIL and respondent for the possible employment of the latter; and under Article 1311 of the Civil Code, a contract is not binding upon and
cannot be enforced against one who was not a party to it even if he be aware of such contract and has acted with knowledge thereof.

Petitioners further assert that petitioner Klepzig may not be held liable because he is simply acting in his capacity as president of PCPI and PPHI and
settled is the rule that an officer of a corporation is not personally liable for acts done in the performance of his duties and within the bounds of the
authority conferred on him. Furthermore, petitioners argue that even if PCPI and PPHI are held liable, respondent still has no cause of action against
Klepzig because PCPI and PPHI have personalities which are separate and distinct from those acting in their behalf, such as Klepzig.

As to their second assigned error, petitioners contend that since herein respondent's claims for actual, moral and exemplary damages are solely
premised on the alleged breach of employment contract, the present case should be considered as falling within the exclusive jurisdiction of the
NLRC.

With respect to the third assigned error, petitioners assert that the principle of forum non conveniens dictates that even where exercise of jurisidiction
is authorized by law, courts may refuse to entertain a case involving a foreign element where the matter can be better tried and decided elsewhere,
either because the main aspects of the case transpired in a foreign jurisdiction or the material witnesses have their residence there and the plaintiff
sought the forum merely to secure procedural advantage or to annoy or harass the defendant. Petitioners also argue that one of the factors in
determining the most convenient forum for conflicts problem is the power of the court to enforce its decision. Petitioners contend that since the
majority of the defendants in the present case are not residents of the Philippines, they are not subject to compulsory processes of the Philippine court
handling the case for purposes of requiring their attendance during trial. Even assuming that they can be summoned, their appearance would entail
excessive costs. Petitioners further assert that there is no allegation in the complaint from which one can conclude that the evidence to be presented
during the trial can be better obtained in the Philippines. Moreover, the events which led to the present controversy occurred outside the Philippines.
Petitioners conclude that based on the foregoing factual circumstances, the case should be dismissed under the principle of forum non conveniens.

In his Comment, respondent extensively quoted the assailed CA Decision maintaining that the factual allegations in the complaint determine whether
or not the complaint states a cause of action.

As to the question of jurisdiction, respondent contends that the complaint he filed was not based on a contract of employment. Rather, it was based on
petitioners' unwarranted breach of their contractual obligation to employ respondent. This breach, respondent argues, gave rise to an action for
damages which is cognizable by the regular courts.

Even assuming that there was an employment contract, respondent asserts that for the NLRC to acquire jurisdiction, the claim for damages must have
a reasonable causal connection with the employer-employee relationship of petitioners and respondent.

Respondent further argues that there is a perfected contract between him and petitioners as they both agreed that the latter shall employ him to
manage and operate their ready-mix concrete operations in the Philippines. Even assuming that there was no perfected contract, respondent contends
that his complaint alleges an alternative cause of action which is based on the provisions of Articles 19 and 21 of the Civil Code.

As to the applicability of the doctrine of forum non conveniens, respondent avers that the question of whether a suit should be entertained or
dismissed on the basis of the principle of forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound
discretion of the trial judge, who is in the best position to determine whether special circumstances require that the court desist from assuming
jurisdiction over the suit.

The petition lacks merit.

Section 2, Rule 2 of the Rules of Court, as amended, defines a cause of action as the act or omission by which a party violates a right of another. A
cause of action exists if the following elements are present: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or
is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and, (3) an act or omission on the part of such
defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may
maintain an action for recovery of damages.11

In Hongkong and Shanghai Banking Corporation Limited v. Catalan,12 this Court held:

The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief
demanded. Stated otherwise, may the court render a valid judgment upon the facts alleged therein? The inquiry is into the sufficiency, not
the veracity of the material allegations. If the allegations in the complaint furnish sufficient basis on which it can be maintained, it should
not be dismissed regardless of the defense that may be presented by the defendants.13

Moreover, the complaint does not have to establish or allege facts proving the existence of a cause of action at the outset; this will have to be done at
the trial on the merits of the case. 14 To sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does
not exist, rather than that a claim has been defectively stated, or is ambiguous, indefinite or uncertain. 15

Hence, in resolving whether or not the Complaint in the present case states a cause of action, the trial court correctly limited itself to examining the
sufficiency of the allegations in the Complaint as well as the annexes thereto. It is proscribed from inquiring into the truth of the allegations in the
Complaint or the authenticity of any of the documents referred or attached to the Complaint, since these are deemed hypothetically admitted by the
respondent.

This Court has reviewed respondent’s allegations in its Complaint. In a nutshell, respondent alleged that herein petitioners reneged on their
contractual obligation to employ him on a permanent basis. This allegation is sufficient to constitute a cause of action for damages.

The issue as to whether or not there was a perfected contract between petitioners and respondent is a matter which is not ripe for determination in the
present case; rather, this issue must be taken up during trial, considering that its resolution would necessarily entail an examination of the veracity of
the allegations not only of herein respondent as plaintiff but also of petitioners as defendants.

The Court does not agree with petitioners' contention that they were not privy to the negotiations for respondent's possible employment. It is evident
from paragraphs 24 to 28 of the Complaint16 that, on various occasions, Klepzig conducted negotiations with respondent regarding the latter's
possible employment. In fact, Annex "H"17 of the complaint shows that it was Klepzig who informed respondent that his company was no longer
interested in employing respondent. Hence, based on the allegations in the Complaint and the annexes attached thereto, respondent has a cause of
action against herein petitioners.

As to the question of jurisdiction, this Court has consistently held that where no employer-employee relationship exists between the parties and no
issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the
Regional Trial Court that has jurisdiction.18 In the present case, no employer-employee relationship exists between petitioners and respondent. In
fact, in his complaint, private respondent is not seeking any relief under the Labor Code, but seeks payment of damages on account of petitioners'
alleged breach of their obligation under their agreement to employ him. It is settled that an action for breach of contractual obligation is intrinsically a
civil dispute.19 In the alternative, respondent seeks redress on the basis of the provisions of Articles 19 and 21 of the Civil Code. Hence, it is clear
that the present action is within the realm of civil law, and jurisdiction over it belongs to the regular courts.20

With respect to the applicability of the principle of forum non conveniens in the present case, this Court's ruling in Bank of America NT & SA v.
Court of Appeals21 is instructive, to wit:

The doctrine of forum non conveniens, literally meaning ‘the forum is inconvenient’, emerged in private international law to deter the
practice of global forum shopping, that is to prevent non-resident litigants from choosing the forum or place wherein to bring their suit for
malicious reasons, such as to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a
more friendly venue. Under this doctrine, a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the
most "convenient" or available forum and the parties are not precluded from seeking remedies elsewhere.

Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court. In the case of Communication Materials and Design, Inc. vs. Court of Appeals, this
Court held that "xxx [a] Philippine Court may assume jurisdiction over the case if it chooses to do so; provided, that the following
requisites are met: (1) that the Philippine Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is in a
position to make an intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is likely to have power to
enforce its decision."

Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of Appeals, that the doctrine of forum non conveniens should
not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground.
This Court further ruled that while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should
do so only after vital facts are established, to determine whether special circumstances require the court’s desistance; and that the propriety
of dismissing a case based on this principle of forum non conveniens requires a factual determination, hence it is more properly considered
a matter of defense.22 (emphasis supplied)
In the present case, the factual circumstances cited by petitioners which would allegedly justify the application of the doctrine of forum non
conveniens are matters of defense, the merits of which should properly be threshed out during trial.

WHEREFORE, the instant petition is DENIED and the assailed Decision and Resolution of the Court of Appeals are AFFIRMED.

Costs against petitioners.

SO ORDERED.
GIL MIGUEL T. PUYAT, petitioner, vs. RON ZABARTE, respondent.

DECISION
PANGANIBAN, J.:

Summary judgment in a litigation is resorted to if there is no genuine issue as to any material fact, other than the amount of damages. If this
verity is evident from the pleadings and the supporting affidavits, depositions and admissions on file with the court, the moving party is entitled to
such remedy as a matter of course.

The Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, challenging the August 31, 1999 Decision [1] of the Court
of Appeals (CA), which affirmed the Regional Trial Court (RTC) of Pasig City, Branch 67 in Civil Case No. 64107; and the January 20, 2000 CA
Resolution[2] which denied reconsideration.
The assailed CA Decision disposed as follows:

WHEREFORE, finding no error in the judgment appealed from, the same is AFFIRMED." [3]

The Facts

The facts of this case, as narrated by the Court of Appeals, are as follows: [4]

It appears that on 24 January 1994, [Respondent] Ron Zabarte commenced [an action] to enforce the money judgment rendered by the Superior Court
for the State of California, County of Contra Costa, U.S.A. On 18 March 1994, [petitioner] filed his Answer with the following special and
affirmative defenses:

xxxxxxxxx

8) The Superior Court for the State of California, County of Contra Costa[,] did not properly acquire jurisdiction over the subject matter of and over
the persons involved in [C]ase #C21-00265.

9) The Judgment on Stipulations for Entry in Judgment in Case #C21-00265 dated December 12, 1991 was obtained without the assistance of
counsel for [petitioner] and without sufficient notice to him and therefore, was rendered in clear violation of [petitioners] constitutional rights to
substantial and procedural due process.

10) The Judgment on Stipulation for Entry in Judgment in Case #C21-00265 dated December 12, 1991 was procured by means of fraud or collusion
or undue influence and/or based on a clear mistake of fact and law.

11) The Judgment on Stipulation for Entry in Judgment in Case #C21-00265 dated December 12, 1991 is contrary to the laws, public policy and
canons of morality obtaining in the Philippines and the enforcement of such judgment in the Philippines would result in the unjust enrichment of
[respondent] at the expense of [petitioner] in this case.

12) The Judgment on Stipulation for Entry in Judgment in Case #C21-00265 dated December 12, 1991 is null and void and unenforceable in the
Philippines.

13) In the transaction, which is the subject matter in Case #C21-00265, [petitioner] is not in any way liable, in fact and in law, to [respondent] in this
case, as contained in [petitioners] Answer to Complaint in Case #C21-00265 dated April 1, 1991, Annex B of [respondents] Complaint dated
December 6, 1993.

14) [Respondent] is guilty of misrepresentation or falsification in the filing of his Complaint in this case dated December 6, 1993. Worse,
[respondent] has no capacity to sue in the Philippines.

15) Venue has been improperly laid in this case.

(Record, pp. 42-44)

 On 1 August 1994, [respondent] filed a [M]otion for [S]ummary [J]udgment under Rule 34 of the Rules of Court alleging that the [A]nswer
filed by [petitioner] failed to tender any genuine issue as to the material facts. In his [O]pposition to [respondents] motion, [petitioner]
demurred as follows:

2) [Petitioner] begs to disagree[;] in support hereof, [he] wishes to mention that in his Answer with Special and Affirmative Defenses dated March
16, 1994 [petitioner] has interposed that the Judgment on Stipulations for Entry in Judgment is null and void, fraudulent, illegal and unenforceable,
the same having been obtained by means of fraud, collusion, undue influence and/or clear mistake of fact and law. In addition, [he] has maintained
that said Judgment on Stipulations for Entry in Judgment was obtained without the assistance of counsel for [petitioner] and without sufficient notice
to him and therefore, was rendered in violation of his constitutional rights to substantial and procedural due process.

The [M]otion for [S]ummary [J]udgment was set for hearing on 12 August 1994 during which [respondent] marked and submitted in evidence
the following:

Exhibit A - x x x Judgment on Stipulation For Entry In Judgment of the Supreme Court of the State of California[,] County of Contra
Costa[,] signed by Hon. Ellen James, Judge of the Superior Court.
Exhibit B - x x x Certificate of Authentication of the [O]rder signed by the Hon. Ellen James, issued by the Consulate General of the
Republic of the Philippines.
Exhibit C - [R]eturn of the [W]rit of [E]xecution (writ unsatisfied) issued by the sheriff/marshall, County of Santa Clara, State of
California.
Exhibit D - [W]rit of [E]xecution
Exhibit 'E' [P]roof of [S]ervice of copies of [W]rit of [E]xecution, [N]otice of [L]evy, [M]emorandum of [G]arnishee, [E]xemptions from
[E]nforcement of [J]udgment.
Exhibit F - Certification issued by the Secretary of State, State of California that Stephen Weir is the duly elected, qualified and acting
[c]ounty [c]lerk of the County of Contra Costa of the State of California.
Exhibit G - Certificate of [A]uthentication of the [W]rit of [E]xecution.

On 6 April 1995, the court a quo issued an [O]rder granting [respondents] [M]otion for [S]ummary [J]udgment [and] likewise granting [petitioner]
ten (10) days to submit opposing affidavits, after which the case would be deemed submitted for resolution (Record, pp. 152-153). [Petitioner] filed a
[M]otion for [R]econsideration of the aforesaid [O]rder and [respondent] filed [C]omment. On 30 June 1995, [petitioner] filed a [M]otion to
[D]ismiss on the ground of lack of jurisdiction over the subject matter of the case and forum-non-conveniens (Record, pp. 166-170). In his
[O]pposition to the [M]otion (Record, pp. 181-182) [respondent] contended that [petitioner could] no longer question the jurisdiction of the lower
court on the ground that [the latters] Answer had failed to raise the issue of jurisdiction. [Petitioner] countered by asserting in his Reply that
jurisdiction [could] not be fixed by agreement of the parties. The lower court dismissed [his] [M]otion for [R]econsideration and [M]otion [to]
[D]ismiss (Record, pp. 196-198), x x x.

The RTC[5] eventually rendered its February 21, 1997 Decision,[6] which disposed as follows:

WHEREFORE, judgment is hereby rendered, ordering [petitioner] to pay [respondent] the following amounts:

1. The amount of U.S. dollars $241,991.33, with the interest of legal rate from October 18, 1991, or its peso equivalent, pursuant to the [J]udgment of
[S]tipulation for [E]ntry in [J]udgment dated December 19, 1991;

2. The amount of P30,000.00 as attorneys fees;

3. To pay the costs of suit.

The claim for moral damages, not having been substantiated, it is hereby denied. [7]

Ruling of the Court of Appeals

Affirming the trial court, the Court of Appeals held that petitioner was estopped from assailing the judgment that had become final and had, in
fact, been partially executed. The CA also ruled that summary judgment was proper, because petitioner had failed to tender any genuine issue of fact
and was merely maneuvering to delay the full effects of the judgment.
Citing Ingenohl v. Olsen,[8] the CA also rejected petitioners argument that the RTC should have dismissed the action for the enforcement of a
foreign judgment, on the ground of forum non conveniens. It reasoned out that the recognition of the foreign judgment was based on comity,
reciprocity and res judicata.
Hence, this Petition.[9]
 Issue

In his Memorandum, petitioner submits this lone but all-embracing issue:

Whether or not the Court of Appeals acted in a manner x x x contrary to law when it affirmed the Order of the trial court granting respondents
Motion for Summary Judgment and rendering judgment against the petitioner. [10]

In his discussion, petitioner contends that the CA erred in ruling in this wise:

1. That his Answer failed to tender a genuine issue of fact regarding the following:

(a) the jurisdiction of a foreign court over the subject matter

(b) the validity of the foreign judgment

(c) the judgments conformity to Philippine laws, public policy, canons of morality, and norms against unjust enrichment

2. That the principle of forum non conveniens was inapplicable to the instant case.

This Courts Ruling

The Petition has no merit.

First Question: Summary Judgment

Petitioner vehemently insists that summary judgment is inappropriate to resolve the case at bar, arguing that his Answer allegedly raised
genuine and material factual matters which he should have been allowed to prove during trial.
On the other hand, respondent argues that the alleged genuine issues of fact raised by petitioner are mere conclusions of law, or propositions
arrived at not by any process of natural reasoning from a fact or a combination of facts stated but by the application of the artificial rules of law to the
facts pleaded.[11]
The RTC granted respondents Motion for Summary Judgment because petitioner, in his Answer, admitted the existence of the Judgment on
Stipulation for Entry in Judgment. Besides, he had already paid $5,000 to respondent, as provided in the foreign judgment sought to be
enforced.[12] Hence, the trial court ruled that, there being no genuine issue as to any material fact, the case should properly be resolved through
summary judgment. The CA affirmed this ruling.
We concur with the lower courts. Summary judgment is a procedural device for the prompt disposition of actions in which the pleadings raise
only a legal issue, and not a genuine issue as to any material fact. By genuine issue is meant a question of fact that calls for the presentation of
evidence. It should be distinguished from an issue that is sham, contrived, set in bad faith and patently unsubstantial. [13]
Summary judgment is resorted to in order to avoid long drawn out litigations and useless delays. When affidavits, depositions and admissions
on file show that there are no genuine issues of fact to be tried, the Rules allow a party to pierce the allegations in the pleadings and to obtain
immediate relief by way of summary judgment. In short, since the facts are not in dispute, the court is allowed to decide the case summarily by
applying the law to the material facts.
Petitioner contends that by allowing summary judgment, the two courts a quo prevented him from presenting evidence to substantiate his
claims. We do not agree. Summary judgment is based on facts directly proven by affidavits, depositions or admissions. [14] In this case, the CA and
the RTC both merely ruled that trial was not necessary to resolve the case. Additionally and correctly, the RTC specifically ordered petitioner to
submit opposing affidavits to support his contentions that (1) the Judgment on Stipulation for Entry in Judgment was procured on the basis of fraud,
collusion, undue influence, or a clear mistake of law or fact; and (2) that it was contrary to public policy or the canons of morality.[15]
Again, in its Order[16] dated November 29, 1995, the trial court clarified that the opposing affidavits were for [petitioner] to spell out the facts
or circumstances [that] would constitute lack of jurisdiction over the subject matter of and over the persons involved in Case No. C21-00265, and that
would render the judgment therein null and void. In this light, petitioners contention that he was not allowed to present evidence to substantiate his
claims is clearly untenable.
For summary judgment to be valid, Rule 34, Section 3 of the Rules of Court, requires (a) that there must be no genuine issue as to any material
fact, except for the amount of damages; and (b) that the party presenting the motion for summary judgment must be entitled to a judgment as a matter
of law.[17] As mentioned earlier, petitioner admitted that a foreign judgment had been rendered against him and in favor of respondent, and that he
had paid $5,000 to the latter in partial compliance therewith. Hence, respondent, as the party presenting the Motion for Summary Judgment, was
shown to be entitled to the judgment.
 The CA made short shrift of the first requirement. To show that petitioner had raised no genuine issue, it relied instead on the finality of the
foreign judgment which was, in fact, partially executed. Hence, we shall show in the following discussion how the defenses presented by petitioner
failed to tender any genuine issue of fact, and why a full-blown trial was not necessary for the resolution of the issues.

Jurisdiction

Petitioner alleges that jurisdiction over Case No. C21-00265, which involved partnership interest, was vested in the Securities and Exchange
Commission, not in the Superior Court of California, County of Contra Costa.
We disagree. In the absence of proof of California law on the jurisdiction of courts, we presume that such law, if any, is similar to Philippine
law. We base this conclusion on the presumption of identity or similarity, also known as processual presumption.[18] The Complaint,[19] which
respondent filed with the trial court, was for the enforcement of a foreign judgment. He alleged therein that the action of the foreign court was for the
collection of a sum of money, breach of promissory notes, and damages. [20]
In our jurisdiction, such a case falls under the jurisdiction of civil courts, not of the Securities and Exchange Commission (SEC). The
jurisdiction of the latter is exclusively over matters enumerated in Section 5, PD 902-A,[21] prior to its latest amendment. If the foreign court did not
really have jurisdiction over the case, as petitioner claims, it would have been very easy for him to show this. Since jurisdiction is determined by the
allegations in a complaint, he only had to submit a copy of the complaint filed with the foreign court. Clearly, this issue did not warrant trial.

Rights to Counsel and to Due Process

Petitioner contends that the foreign judgment, which was in the form of a Compromise Agreement, cannot be executed without the parties
being assisted by their chosen lawyers. The reason for this, he points out, is to eliminate collusion, undue influence and/or improper exertion of
ascendancy by one party over the other. He alleges that he discharged his counsel during the proceedings, because he felt that the latter was not
properly attending to the case. The judge, however, did not allow him to secure the services of another counsel. Insisting that petitioner settle the case
with respondent, the judge practically imposed the settlement agreement on him. In his Opposing Affidavit, petitioner states:

It is true that I was initially represented by a counsel in the proceedings in #C21-00625. I discharged him because I then felt that he was not properly
attending to my case or was not competent enough to represent my interest. I asked the Judge for time to secure another counsel but I was practically
discouraged from engaging one as the Judge was insistent that I settle the case at once with the [respondent].Being a foreigner and not a lawyer at
that I did not know what to do. I felt helpless and the Judge and [respondents] lawyer were the ones telling me what to do. Under ordinary
circumstances, their directives should have been taken with a grain of salt especially so [since respondents] counsel, who was telling me what to do,
had an interest adverse to mine. But [because] time constraints and undue influence exerted by the Judge and [respondents] counsel on me disturbed
and seriously affected my freedom to act according to my best judgment and belief. In point of fact, the terms of the settlement were practically
imposed on me by the Judge seconded all the time by [respondents] counsel. I was then helpless as I had no counsel to assist me and the collusion
between the Judge and [respondents] counsel was becoming more evident by the way I was treated in the Superior Court of [t]he State of California. I
signed the Judgment on Stipulation for Entry in Judgment without any lawyer assisting me at the time and without being fully aware of its terms and
stipulations.[22]

The manifestation of petitioner that the judge and the counsel for the opposing party had pressured him would gain credibility only if he had
not been given sufficient time to engage the services of a new lawyer. Respondents Affidavit[23] dated May 23, 1994, clarified, however, that
petitioner had sufficient time, but he failed to retain a counsel. Having dismissed his lawyer as early as June 19, 1991, petitioner directly handled his
own defense and negotiated a settlement with respondent and his counsel in December 1991. Respondent also stated that petitioner, ignoring the
judges reminder of the importance of having a lawyer, argued that he would be the one to settle the case and pay anyway. Eventually, the
Compromise Agreement was presented in court and signed before Judge Ellen James on January 3, 1992.Hence, petitioners rights to counsel and to
due process were not violated.

Unjust Enrichment

Petitioner avers that the Compromise Agreement violated the norm against unjust enrichment because the judge made him shoulder all the
liabilities in the case, even if there were two other defendants, G.S.P & Sons, Inc. and the Genesis Group.
We cannot exonerate petitioner from his obligation under the foreign judgment, even if there are other defendants who are not being held liable
together with him. First, the foreign judgment itself does not mention these other defendants, their participation or their liability to
respondent. Second, petitioners undated Opposing Affidavit states: [A]lthough myself and these entities were initially represented by Atty. Lawrence
L. Severson of the Law Firm Kouns, Quinlivan & Severson, x x x I discharged x x x said lawyer. Subsequently, I assumed the representation for
myself and these firms and this was allowed by the Superior Court of the State of California without any authorization from G.G.P. & Sons, Inc. and
the Genesis Group.[24] Clearly, it was petitioner who chose to represent the other defendants; hence, he cannot now be allowed to impugn a decision
based on this ground.
 In any event, contrary to petitioners contention, unjust enrichment or solutio indebiti does not apply to this case. This doctrine contemplates
payment when there is no duty to pay, and the person who receives the payment has no right to receive it. [25] In this case, petitioner merely argues
that the other two defendants whom he represented were liable together with him. This is not a case of unjust enrichment.
We do not see, either, how the foreign judgment could be contrary to law, morals, public policy or the canons of morality obtaining in the
country. Petitioner owed money, and the judgment required him to pay it. That is the long and the short of this case.
In addition, the maneuverings of petitioner before the trial court reinforce our belief that his claims are unfounded. Instead of filing opposing
affidavits to support his affirmative defenses, he filed a Motion for Reconsideration of the Order allowing summary judgment, as well as a Motion to
Dismiss the action on the ground of forum non conveniens. His opposing affidavits were filed only after the Order of November 29, 1995 had denied
both Motions.[26] Such actuation was considered by the trial court as a dilatory ploy which justified the resolution of the action by summary
judgment. According to the CA, petitioners allegations sought to delay the full effects of the judgment; hence, summary judgment was proper. On
this point, we concur with both courts.

Second Question: Forum Non Conveniens

Petitioner argues that the RTC should have refused to entertain the Complaint for enforcement of the foreign judgment on the principle
of forum non conveniens. He claims that the trial court had no jurisdiction, because the case involved partnership interest, and there was difficulty in
ascertaining the applicable law in California. All the aspects of the transaction took place in a foreign country, and respondent is not even Filipino.
We disagree. Under the principle of forum non conveniens, even if the exercise of jurisdiction is authorized by law, courts may nonetheless
refuse to entertain a case for any of the following practical reasons:

1) The belief that the matter can be better tried and decided elsewhere, either because the main aspects of the case transpired in a foreign jurisdiction
or the material witnesses have their residence there;

2) The belief that the non-resident plaintiff sought the forum[,] a practice known as forum shopping[,] merely to secure procedural advantages or to
convey or harass the defendant;

3) The unwillingness to extend local judicial facilities to non-residents or aliens when the docket may already be overcrowded;

4) The inadequacy of the local judicial machinery for effectuating the right sought to be maintained; and

The difficulty of ascertaining foreign law.[27]

None of the aforementioned reasons barred the RTC from exercising its jurisdiction. In the present action, there was no more need for material
witnesses, no forum shopping or harassment of petitioner, no inadequacy in the local machinery to enforce the foreign judgment, and no question
raised as to the application of any foreign law.
Authorities agree that the issue of whether a suit should be entertained or dismissed on the basis of the above-mentioned principle depends
largely upon the facts of each case and on the sound discretion of the trial court.[28] Since the present action lodged in the RTC was for the
enforcement of a foreign judgment, there was no need to ascertain the rights and the obligations of the parties based on foreign laws or contracts. The
parties needed only to perform their obligations under the Compromise Agreement they had entered into.
Under Section 48, Rule 39 of the 1997 Rules of Civil Procedure, a judgment in an action in personam rendered by a foreign tribunal clothed
with jurisdiction is presumptive evidence of a right as between the parties and their successors-in-interest by a subsequent title.[29]
Also, under Section 5(n) of Rule 131, a court -- whether in the Philippines or elsewhere -- enjoys the presumption that it is acting in the lawful
exercise of its jurisdiction, and that it is regularly performing its official duty.[30] Its judgment may, however, be assailed if there is evidence of want
of jurisdiction, want of notice to the party, collusion, fraud or clear mistake of law or fact. But precisely, this possibility signals the need for a local
trial court to exercise jurisdiction. Clearly, the application of forum non coveniens is not called for.
The grounds relied upon by petitioner are contradictory. On the one hand, he insists that the RTC take jurisdiction over the enforcement case in
order to invalidate the foreign judgment; yet, he avers that the trial court should not exercise jurisdiction over the same case on the basis of forum non
conveniens. Not only do these defenses weaken each other, but they bolster the finding of the lower courts that he was merely maneuvering to avoid
or delay payment of his obligation.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED. Double costs against petitioner.
SO ORDERED.
G.R. No. 162894 February 26, 2008

RAYTHEON INTERNATIONAL, INC., petitioner,

vs.
STOCKTON W. ROUZIE, JR., respondent.

DECISION

TINGA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure which seeks the reversal of the
Decision1 and Resolution2 of the Court of Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil case filed by respondent against petitioner
with the trial court.

As culled from the records of the case, the following antecedents appear:

Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of Connecticut, United
States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its
representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross
receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers
affected by the Mt. Pinatubo eruption and mudflows.3

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a suit against BMSI and Rust
International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of
employment contract.4 On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to pay respondent’s
money claims.5 Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and dismissed respondent’s complaint on the ground of
lack of jurisdiction.6 Respondent elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997. The Resolution became
final and executory on 09 November 1998.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court (RTC) of Bauang, La
Union. The Complaint,7 docketed as Civil Case No. 1192-BG, named as defendants herein petitioner Raytheon International, Inc. as well as BMSI
and RUST, the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the labor case that BMSI
verbally employed respondent to negotiate the sale of services in government projects and that respondent was not paid the commissions due him
from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself
had combined and functioned as one company.

In its Answer,8 petitioner alleged that contrary to respondent’s claim, it was a foreign corporation duly licensed to do business in the Philippines and
denied entering into any arrangement with respondent or paying the latter any sum of money. Petitioner also denied combining with BMSI and
RUST for the purpose of assuming the alleged obligation of the said companies. 9 Petitioner also referred to the NLRC decision which disclosed that
per the written agreement between respondent and BMSI and RUST, denominated as "Special Sales Representative Agreement," the rights and
obligations of the parties shall be governed by the laws of the State of Connecticut. 10 Petitioner sought the dismissal of the complaint on grounds of
failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim. 11

On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for Summary Judgment12 seeking
the dismissal of the complaint on grounds of forum non conveniens and failure to state a cause of action. Respondent opposed the same. Pending the
resolution of the omnibus motion, the deposition of Walter Browning was taken before the Philippine Consulate General in Chicago. 13

In an Order14 dated 13 September 2000, the RTC denied petitioner’s omnibus motion. The trial court held that the factual allegations in the
complaint, assuming the same to be admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle
of forum non conveniens was inapplicable because the trial court could enforce judgment on petitioner, it being a foreign corporation licensed to do
business in the Philippines.15

Petitioner filed a Motion for Reconsideration16 of the order, which motion was opposed by respondent.17 In an Order dated 31 July 2001,18 the trial
court denied petitioner’s motion. Thus, it filed a Rule 65 Petition 19 with the Court of Appeals praying for the issuance of a writ of certiorari and a writ
of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting
further proceedings.20

On 28 August 2003, the Court of Appeals rendered the assailed Decision 21 denying the petition for certiorari for lack of merit. It also denied
petitioner’s motion for reconsideration in the assailed Resolution issued on 10 March 2004. 22

The appellate court held that although the trial court should not have confined itself to the allegations in the complaint and should have also
considered evidence aliunde in resolving petitioner’s omnibus motion, it found the evidence presented by petitioner, that is, the deposition of Walter
Browning, insufficient for purposes of determining whether the complaint failed to state a cause of action. The appellate court also stated that it could
not rule one way or the other on the issue of whether the corporations, including petitioner, named as defendants in the case had indeed merged
together based solely on the evidence presented by respondent. Thus, it held that the issue should be threshed out during trial.23 Moreover, the
appellate court deferred to the discretion of the trial court when the latter decided not to desist from assuming jurisdiction on the ground of the
inapplicability of the principle of forum non conveniens.

Hence, this petition raising the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT FOR FAILURE TO
STATE A CAUSE OF ACTION AGAINST RAYTHEON INTERNATIONAL, INC.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT ON THE GROUND
OF FORUM NON CONVENIENS.24

Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino Padua Law Office, counsel on record for respondent,
manifested that the lawyer handling the case, Atty. Rogelio Karagdag, had severed relations with the law firm even before the filing of the instant
petition and that it could no longer find the whereabouts of Atty. Karagdag or of respondent despite diligent efforts. In a Resolution25 dated 20
November 2006, the Court resolved to dispense with the filing of a comment.

The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall
be governed by the laws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute – namely, the parties and
witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines – that renders our local
courts inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate the immediate application of the doctrine
of forum non conveniens.

Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems,
namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances 27 where the Court held that the local
judicial machinery was adequate to resolve controversies with a foreign element, the following requisites had to be proved: (1) that the Philippine
Court is one to which the parties may conveniently resort; (2) that the Philippine Court is in a position to make an intelligent decision as to the law
and the facts; and (3) that the Philippine Court has or is likely to have the power to enforce its decision. 28

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over
the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties
point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed. 29

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law 30 and by the material allegations in the
complaint, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.31 Civil Case No. 1192-
BG is an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are
within the jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the
complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary appearance in court. 32

That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the
Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two
distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether
the application of a substantive law which will determine the merits of the case is fair to both parties. 33 The choice of law stipulation will become
relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most
"convenient" or available forum and the parties are not precluded from seeking remedies elsewhere.34 Petitioner’s averments of the foreign elements
in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more
properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it
should do so only after vital facts are established, to determine whether special circumstances require the court’s desistance.35

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can assume jurisdiction over the dispute
notwithstanding its foreign elements. In the same manner, the Court defers to the sound discretion of the lower courts because their findings are
binding on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action against petitioner. Failure to state a cause of
action refers to the insufficiency of allegation in the pleading. 36 As a general rule, the elementary test for failure to state a cause of action is whether
the complaint alleges facts which if true would justify the relief demanded. 37
The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. Petitioner contends that the deposition of
Walter Browning rebutted this allegation. On this score, the resolution of the Court of Appeals is instructive, thus:

x x x Our examination of the deposition of Mr. Walter Browning as well as other documents produced in the hearing shows that these
evidence aliunde are not quite sufficient for us to mete a ruling that the complaint fails to state a cause of action.

Annexes "A" to "E" by themselves are not substantial, convincing and conclusive proofs that Raytheon Engineers and Constructors, Inc.
(REC) assumed the warranty obligations of defendant Rust International in the Makar Port Project in General Santos City, after Rust
International ceased to exist after being absorbed by REC. Other documents already submitted in evidence are likewise meager to
preponderantly conclude that Raytheon International, Inc., Rust International[,] Inc. and Brand Marine Service, Inc. have combined into
one company, so much so that Raytheon International, Inc., the surviving company (if at all) may be held liable for the obligation of BMSI
to respondent Rouzie for unpaid commissions. Neither these documents clearly speak otherwise. 38

As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged together requires the presentation of
further evidence, which only a full-blown trial on the merits can afford.

WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
67001 are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
 G.R. No. 198587, January 14, 2015

SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA, Petitioners, v. MA. JOPETTE M. REBESENCIO, MONTASSAH B.
SACAR-ADIONG, ROUEN RUTH A. CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ, Respondents.

DECISION

LEONEN, J.:

All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.

This is a Petition for Review on Certiorari with application for the issuance of a temporary restraining order and/or writ of preliminary injunction
under Rule 45 of the 1997 Rules of Civil Procedure praying that judgment be rendered reversing and setting aside the June 16, 2011 Decision 1 and
September 13, 2011 Resolution2 of the Court of Appeals in CA-G.R. SP. No. 113006.

Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and existing under the laws of Jeddah, Kingdom of Saudi Arabia. It
has a Philippine office located at 4/F, Metro House Building, Sen. Gil J. Puyat Avenue, Makati City. 3 In its Petition filed with this court, Saudia
identified itself as follows:chanroblesvirtuallawlibrary

1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal Decree No. M/24 of 18.07.1385H (10.02.1962G) in Jeddah,
Kingdom of Saudi Arabia ("KSA"). Its Philippine Office is located at 4/F Metro House Building, Sen, Gil J. Puyat Avenue, Makati City (Philippine
Office). It may be served with orders of this Honorable Court through undersigned counsel at 4 th and 6th Floors, Citibank Center Bldg., 8741 Paseo de
Roxas, Makati City.4 (Emphasis supplied)
Respondents (complainants before the Labor Arbiter) were recruited and hired by Saudia as Temporary Flight Attendants with the accreditation and
approval of the Philippine Overseas Employment Administration.5 After undergoing seminars required by the Philippine Overseas Employment
Administration for deployment overseas, as well as training modules offered by Saudia (e.g., initial flight attendant/training course and transition
training), and after working as Temporary Flight Attendants, respondents became Permanent Flight Attendants. They then entered into Cabin
Attendant contracts with Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on May 16, 1990; 6 Montassah B. Sacar-Adiong (Montassah) and Rouen
Ruth A. Cristobal (Rouen Ruth) on May 22, 1993; 7 and Loraine Schneider-Cruz (Loraine) on August 27, 1995.8

Respondents continued their employment with Saudia until they were separated from service on various dates in 2006. 9

Respondents contended that the termination of their employment was illegal. They alleged that the termination was made solely because they were
pregnant.10

As respondents alleged, they had informed Saudia of their respective pregnancies and had gone through the necessary procedures to process their
maternity leaves. Initially, Saudia had given its approval but later on informed respondents that its management in Jeddah, Saudi Arabia had
disapproved their maternity leaves. In addition, it required respondents to file their resignation letters. 11

Respondents were told that if they did not resign, Saudia would terminate them all the same. The threat of termination entailed the loss of benefits,
such as separation pay and ticket discount entitlements.12

Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base Manager, Abdulmalik Saddik (Abdulmalik).13 Montassah was
informed personally by Abdulmalik and a certain Faisal Hussein on October 20, 2006 after being required to report to the office one (1) month into
her maternity leave.14Rouen Ruth was also personally informed by Abdulmalik on October 17, 2006 after being required to report to the office by her
Group Supervisor.15 Loraine received a call on October 12, 2006 from her Group Supervisor, Dakila Salvador. 16

Saudia anchored its disapproval of respondents' maternity leaves and demand for their resignation on its "Unified Employment Contract for Female
Cabin Attendants" (Unified Contract).17 Under the Unified Contract, the employment of a Flight Attendant who becomes pregnant is rendered void.
It provides:chanroblesvirtuallawlibrary
(H) Due to the essential nature of the Air Hostess functions to be physically fit on board to provide various services required in normal or emergency
cases on both domestic/international flights beside her role in maintaining continuous safety and security of passengers, and since she will not be able
to maintain the required medical fitness while at work in case of pregnancy, accordingly, if the Air Hostess becomes pregnant at any time during the
term of this contract, this shall render her employment contract as void and she will be terminated due to lack of medical fitness.18 (Emphasis
supplied)
In their Comment on the present Petition,19 respondents emphasized that the Unified Contract took effect on September 23, 2006 (the first day of
Ramadan),20 well after they had filed and had their maternity leaves approved. Ma. Jopette filed her maternity leave application on September 5,
2006.21 Montassah filed her maternity leave application on August 29, 2006, and its approval was already indicated in Saudia's computer system by
August 30, 2006.22 Rouen Ruth filed her maternity leave application on September 13, 2006, 23 and Loraine filed her maternity leave application on
August 22, 2006.24

Rather than comply and tender resignation letters, respondents filed separate appeal letters that were all rejected.25

Despite these initial rejections, respondents each received calls on the morning of November 6, 2006 from Saudia's office secretary informing them
that their maternity leaves had been approved. Saudia, however, was quick to renege on its approval. On the evening of November 6, 2006,
respondents again received calls informing them that it had received notification from Jeddah, Saudi Arabia that their maternity leaves had been
disapproved.26
Faced with the dilemma of resigning or totally losing their benefits, respondents executed handwritten resignation letters. In Montassah's and Rouen
Ruth's cases, their resignations were executed on Saudia's blank letterheads that Saudia had provided. These letterheads already had the word
"RESIGNATION" typed on the subject portions of their headings when these were handed to respondents. 27

On November 8, 2007, respondents filed a Complaint against Saudia and its officers for illegal dismissal and for underpayment of salary, overtime
pay, premium pay for holiday, rest day, premium, service incentive leave pay, 13 th month pay, separation pay, night shift differentials, medical
expense reimbursements, retirement benefits, illegal deduction, lay-over expense and allowances, moral and exemplary damages, and attorney's
fees.28 The case was initially assigned to Labor Arbiter Hermino V. Suelo and docketed as NLRC NCR Case No. 00-11-12342-07.

Saudia assailed the jurisdiction of the Labor Arbiter.29 It claimed that all the determining points of contact referred to foreign law and insisted that the
Complaint ought to be dismissed on the ground of forum non conveniens.30 It added that respondents had no cause of action as they resigned
voluntarily.31

On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered the Decision32dismissing respondents' Complaint. The dispositive
portion of this Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING the instant complaint for lack of
jurisdiction/merit.33cralawlawlibrary
On respondents' appeal, the National Labor Relations Commission's Sixth Division reversed the ruling of Executive Labor Arbiter Jambaro-Franco.
It explained that "[considering that complainants-appellants are OFWs, the Labor Arbiters and the NLRC has [sic] jurisdiction to hear and decide
their complaint for illegal termination."34 On the matter of forum non conveniens, it noted that there were no special circumstances that warranted its
abstention from exercising jurisdiction.35 On the issue of whether respondents were validly dismissed, it held that there was nothing on record to
support Saudia's claim that respondents resigned voluntarily.

The dispositive portion of the November 19, 2009 National Labor Relations Commission Decision 36reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, judgment is hereby rendered finding the appeal impressed with merit. The respondents-appellees are hereby
directed to pay complainants-appellants the aggregate amount of SR614,001.24 corresponding to their backwages and separation pay plus ten (10%)
percent thereof as attorney's fees. The decision of the Labor Arbiter dated December 12, 2008 is hereby VACATED and SET ASIDE. Attached is the
computation prepared by this Commission and made an integral part of this Decision. 37cralawlawlibrary
In the Resolution dated February 11, 2010,38 the National Labor Relations Commission denied petitioners' Motion for Reconsideration.

In the June 16, 2011 Decision,39 the Court of Appeals denied petitioners' Rule 65 Petition and modified the Decision of the National Labor Relations
Commission with respect to the award of separation pay and backwages.

The dispositive portion of the Court of Appeals Decision reads:chanroblesvirtuallawlibrary

WHEREFORE, the instant petition is hereby DENIED. The Decision dated November 19, 2009 issued by public respondent, Sixth Division of the
National Labor Relations Commission - National Capital Region is MODIFIED only insofar as the computation of the award of separation pay and
backwages. For greater clarity, petitioners are ordered to pay private respondents separation pay which shall be computed from private respondents'
first day of employment up to the finality of this decision, at the rate of one month per year of service and backwages which shall be computed from
the date the private respondents were illegally terminated until finality of this decision. Consequently, the ten percent (10%) attorney's fees shall be
based on the total amount of the award. The assailed Decision is affirmed in all other respects.

The labor arbiter is hereby DIRECTED to make a recomputation based on the foregoing.40cralawlawlibrary
In the Resolution dated September 13, 2011,41 the Court of Appeals denied petitioners' Motion for Reconsideration.

Hence, this Appeal was filed.

The issues for resolution are the following:

First, whether the Labor Arbiter and the National Labor Relations Commission may exercise jurisdiction over Saudi Arabian Airlines and apply
Philippine law in adjudicating the present dispute;

Second, whether respondents' voluntarily resigned or were illegally terminated; and

Lastly, whether Brenda J. Betia may be held personally liable along with Saudi Arabian Airlines.chanRoblesvirtualLawlibrary

Summons were validly served on Saudia and jurisdiction over it validly acquired.

There is no doubt that the pleadings and summons were served on Saudia through its counsel. 42 Saudia, however, claims that the Labor Arbiter and
the National Labor Relations Commission had no jurisdiction over it because summons were never served on it but on "Saudia Manila."43 Referring
to itself as "Saudia Jeddah," it claims that "Saudia Jeddah" and not "Saudia Manila" was the employer of respondents because:

First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered into by respondents;

Second, it was "Saudia Jeddah" that provided the funds to pay for respondents' salaries and benefits; and

Lastly, it was with "Saudia Jeddah" that respondents filed their resignations.44
Saudia posits that respondents' Complaint was brought against the wrong party because "Saudia Manila," upon which summons was served, was
never the employer of respondents.45

Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its bare allegation, there is no basis for concluding that "Saudia
Jeddah" is distinct from "Saudia Manila."

What is clear is Saudia's statement in its own Petition that what it has is a "Philippine Office . . . located at 4/F Metro House Building, Sen. Gil J.
Puyat Avenue, Makati City."46 Even in the position paper that Saudia submitted to the Labor Arbiter,47 what Saudia now refers to as "Saudia Jeddah"
was then only referred to as "Saudia Head Office at Jeddah, KSA,"48 while what Saudia now refers to as "Saudia Manila" was then only referred to as
"Saudia's office in Manila."49

By its own admission, Saudia, while a foreign corporation, has a Philippine office.

Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign Investments Act of 1991, provides the
following:chanroblesvirtuallawlibrary
The phrase "doing business" shall include . . . opening offices, whether called "liaison" offices or branches; . . . and any other act or acts that imply a
continuity of commercial dealings or arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the
functions normally incident to, and in progressive prosecution of commercial gain or of the purpose and object of the business organization.
(Emphasis supplied)
A plain application of Section 3(d) of the Foreign Investments Act leads to no other conclusion than that Saudia is a foreign corporation doing
business in the Philippines. As such, Saudia may be sued in the Philippines and is subject to the jurisdiction of Philippine tribunals.

Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia Manila" � the latter being nothing more than Saudia's local office
� service of summons to Saudia's office in Manila sufficed to vest jurisdiction over Saudia's person in Philippine
tribunals.chanRoblesvirtualLawlibrary

II

Saudia asserts that Philippine courts and/or tribunals are not in a position to make an intelligent decision as to the law and the facts. This is because
respondents' Cabin Attendant contracts require the application of the laws of Saudi Arabia, rather than those of the Philippines.50 It claims that the
difficulty of ascertaining foreign law calls into operation the principle of forum non conveniens, thereby rendering improper the exercise of
jurisdiction by Philippine tribunals.51

A choice of law governing the validity of contracts or the interpretation of its provisions dees not necessarily imply forum non conveniens. Choice of
law and forum non conveniens are entirely different matters.

Choice of law provisions are an offshoot of the fundamental principle of autonomy of contracts. Article 1306 of the Civil Code firmly ensconces
this:chanroblesvirtuallawlibrary
Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are
not contrary to law, morals, good customs, public order, or public policy.
In contrast, forum non conveniens is a device akin to the rule against forum shopping. It is designed to frustrate illicit means for securing advantages
and vexing litigants that would otherwise be possible if the venue of litigation (or dispute resolution) were left entirely to the whim of either party.

Contractual choice of law provisions factor into transnational litigation and dispute resolution in one of or in a combination of four ways: (1)
procedures for settling disputes, e.g., arbitration; (2) forum, i.e., venue; (3) governing law; and (4) basis for interpretation. Forum non
conveniens relates to, but is not subsumed by, the second of these.

Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on the laws of a given jurisdiction as the governing law of a
contract does not preclude the exercise of jurisdiction by tribunals elsewhere. The reverse is equally true: The assumption of jurisdiction by tribunals
does not ipso factomean that it cannot apply and rule on the basis of the parties' stipulation. In Hasegawa v. Kitamura:52ChanRoblesVirtualawlibrary
Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this
state; choice of law asks the further question whether the application of a substantive law V'hich will determine the merits of the case is fair to both
parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the
choice of the lex fori will often, coincide, the "minimum contacts" for one do not always provide the necessary "significant contacts" for the other.
The question of whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have
jurisdiction to enter a judgment.53cralawlawlibrary
As various dealings, commercial or otherwise, are facilitated by the progressive ease of communication and travel, persons from various jurisdictions
find themselves transacting with each other. Contracts involving foreign elements are, however, nothing new. Conflict of laws situations precipitated
by disputes and litigation anchored on these contracts are not totally novel.

Transnational transactions entail differing laws on the requirements Q for the validity of the formalities and substantive provisions of contracts and
their interpretation. These transactions inevitably lend themselves to the possibility of various fora for litigation and dispute resolution. As observed
by an eminent expert on transnational law:chanroblesvirtuallawlibrary
The more jurisdictions having an interest in, or merely even a point of contact with, a transaction or relationship, the greater the number of potential
fora for the resolution of disputes arising out of or related to that transaction or relationship. In a world of increased mobility, where business and
personal transactions transcend national boundaries, the jurisdiction of a number of different fora may easily be invoked in a single or a set of related
disputes.54cralawlawlibrary
Philippine law is definite as to what governs the formal or extrinsic validity of contracts. The first paragraph of Article 17 of the Civil Code provides
that "[t]he forms and solemnities of contracts . . . shall be governed by the laws of the country in which they are executed" 55 (i.e., lex loci
celebrationis).

In contrast, there is no statutorily established mode of settling conflict of laws situations on matters pertaining to substantive content of contracts. It
has been noted that three (3) modes have emerged: (1) lex loci contractus or the law of the place of the making; (2) lex loci solutionis or the law of
the place of performance; and (3) lex loci intentionis or the law intended by the parties.56

Given Saudia's assertions, of particular relevance to resolving the present dispute is lex loci intentionis.

An author observed that Spanish jurists and commentators "favor lex loci intentionis."57 These jurists and commentators proceed from the Civil Code
of Spain, which, like our Civil Code, is silent on what governs the intrinsic validity of contracts, and the same civil law traditions from which we
draw ours.

In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P. Eusebio Construction, Inc.,58 manifested preference for
allowing the parties to select the law applicable to their contract":chanroblesvirtuallawlibrary
No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule followed by most legal systems, however, is that the
intrinsic validity of a contract must be governed by the lex contractus or "proper law of the contract." This is the law voluntarily agreed upon by the
parties (the lex loci voluntatis) or the law intended by them either expressly or implicitly (the lex loci intentionis). The law selected may be implied
from such factors as substantial connection with the transaction, or the nationality or domicile of the parties. Philippine courts would do well to adopt
the first and most basic rule in most legal systems, namely, to allow the parties to select the law applicable to their contract, subject to the limitation
that it is not against the law, morals, or public policy of the forum and that the chosen law must bear a substantive relationship to the
transaction.59(Emphasis in the original)
Saudia asserts that stipulations set in the Cabin Attendant contracts require the application of the laws of Saudi Arabia. It insists that the need to
comply with these stipulations calls into operation the doctrine of forum non conveniens and, in turn, makes it necessary for Philippine tribunals to
refrain from exercising jurisdiction.

As mentioned, contractual choice of laws factors into transnational litigation in any or a combination of four (4) ways. Moreover, forum non
conveniens relates to one of these: choosing between multiple possible fora.

Nevertheless, the possibility of parallel litigation in multiple fora � along with the host of difficulties it poses � is not unique to transnational
litigation. It is a difficulty that similarly arises in disputes well within the bounds of a singe jurisdiction.

When parallel litigation arises strictly within the context of a single jurisdiction, such rules as those on forum shopping, litis pendentia, and res
judicata come into operation. Thus, in the Philippines, the 1997 Rules on Civil Procedure provide for willful and deliberate forum shopping as a
ground not only for summary dismissal with prejudice but also for citing parties and counsels in direct contempt, as well as for the imposition of
administrative sanctions.60 Likewise, the same rules expressly provide that a party may seek the dismissal of a Complaint or another pleading
asserting a claim on the ground "[t]hat there is another action pending between the same parties for the same cause," i.e., litis pendentia, or "[t]hat the
cause of action is barred by a prior judgment,"61 i.e., res judicata.

Forum non conveniens, like the rules of forum shopping, litis pendentia, and res judicata, is a means of addressing the problem of parallel litigation.
While the rules of forum shopping, litis pendentia, and res judicata are designed to address the problem of parallel litigation within a single
jurisdiction, forum non conveniens is a means devised to address parallel litigation arising in multiple jurisdictions.

Forum non conveniens literally translates to "the forum is inconvenient."62 It is a concept in private international law and was devised to combat the
"less than honorable" reasons and excuses that litigants use to secure procedural advantages, annoy and harass defendants, avoid overcrowded
dockets, and select a "friendlier" venue.63 Thus, the doctrine of forum non conveniens addresses the same rationale that the rule against forum
shopping does, albeit on a multijurisdictional scale.

Forum non conveniens, like res judicata,64 is a concept originating in common law.65 However, unlike the rule on res judicata, as well as those
on litis pendentia and forum shopping, forum non conveniens finds no textual anchor, whether in statute or in procedural rules, in our civil law
system. Nevertheless, jurisprudence has applied forum non conveniens as basis for a court to decline its exercise of jurisdiction.66

Forum non conveniens is soundly applied not only to address parallel litigation and undermine a litigant's capacity to vex and secure undue
advantages by engaging in forum shopping on an international scale. It is also grounded on principles of comity and judicial efficiency.

Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction on account of forum non conveniens is a deferential gesture
to the tribunals of another sovereign. It is a measure that prevents the former's having to interfere in affairs which are better and more competently
addressed by the latter. Further, forum non conveniens entails a recognition not only that tribunals elsewhere are better suited to rule on and resolve a
controversy, but also, that these tribunals are better positioned to enforce judgments and, ultimately, to dispense justice. Forum non
conveniens prevents the embarrassment of an awkward situation where a tribunal is rendered incompetent in the face of the greater capability � both
analytical and practical � of a tribunal in another jurisdiction.

The wisdom of avoiding conflicting and unenforceable judgments is as much a matter of efficiency and economy as it is a matter of international
courtesy. A court would effectively be neutering itself if it insists on adjudicating a controversy when it knows full well that it is in no position to
enforce its judgment. Doing so is not only an exercise in futility; it is an act of frivolity. It clogs the dockets of a.tribunal and leaves it to waste its
efforts on affairs, which, given transnational exigencies, will be reduced to mere academic, if not trivial, exercises.

Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not
the most 'convenient' or available forum and the parties are not precluded from seeking remedies elsewhere."67 In Puyat v. Zabarte,68 this court
recognized the following situations as among those that may warrant a court's desistance from exercising jurisdiction:chanroblesvirtuallawlibrary
1) The belief that the matter can be better tried and decided elsewhere, either because the main aspects of the case transpired in a foreign
jurisdiction or the material witnesses have their residence there;
2) The belief that the non-resident plaintiff sought the forum[,] a practice known as forum shopping[,] merely to secure procedural advantages or
to convey or harass the defendant;
3) The unwillingness to extend local judicial facilities to non� residents or aliens when the docket may already be overcrowded;
4) The inadequacy of the local judicial machinery for effectuating the right sought to be maintained; and
5) The difficulty of ascertaining foreign law.69
In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,70 this court underscored that a Philippine court may properly
assume jurisdiction over a case if it chooses to do so to the extent: "(1) that the Philippine Court is one to which the parties may conveniently resort
to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine Court has or is
likely to have power to enforce its decision."71

The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"72) in the decisions shows that the matter of jurisdiction rests on the
sound discretion of a court. Neither the mere invocation of forum non conveniens nor the averment of foreign elements operates to automatically
divest a court of jurisdiction. Rather, a court should renounce jurisdiction only "after 'vital facts are established, to determine whether special
circumstances' require the court's desistance."73 As the propriety of applying forum non conveniens is contingent on a factual determination, it is,
therefore, a matter of defense.74

The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is exclusive in its recital of the grounds for dismissal that are exempt
from the omnibus motion rule: (1) lack of jurisdiction over the subject matter; (2) litis pendentia; (3) res judicata; and (4) prescription. Moreover,
dismissal on account offorum non conveniens is a fundamentally discretionary matter. It is, therefore, not a matter for a defendant to foist upon the
court at his or her own convenience; rather, it must be pleaded at the earliest possible opportunity.

On the matter of pleading forum non conveniens, we state the rule, thus: Forum non conveniens must not only be clearly pleaded as a ground for
dismissal; it must be pleaded as such at the earliest possible opportunity. Otherwise, it shall be deemed waived.

This court notes that in Hasegawa,76 this court stated that forum non conveniens is not a ground for a motion to dismiss. The factual ambience of this
case however does not squarely raise the viability of this doctrine. Until the opportunity comes to review the use of motions to dismiss for parallel
litigation, Hasegawa remains existing doctrine.

Consistent with forum non conveniens as fundamentally a factual matter, it is imperative that it proceed from & factually established basis. It would
be improper to dismiss an action pursuant to forum non conveniens based merely on a perceived, likely, or hypothetical multiplicity of fora. Thus, a
defendant must also plead and show that a prior suit has, in fact, been brought in another jurisdiction.

The existence of a prior suit makes real the vexation engendered by duplicitous litigation, the embarrassment of intruding into the affairs of another
sovereign, and the squandering of judicial efforts in resolving a dispute already lodged and better resolved elsewhere. As has been
noted:chanroblesvirtuallawlibrary
A case will not be stayed o dismissed on [forum] non conveniens grounds unless the plaintiff is shown to have an available alternative forum
elsewhere. On this, the moving party bears the burden of proof.

A number of factors affect the assessment of an alternative forum's adequacy. The statute of limitations abroad may have run, of the foreign court
may lack either subject matter or personal jurisdiction over the defendant. . . . Occasionally, doubts will be raised as to the integrity or impartiality of
the foreign court (based, for example, on suspicions of corruption or bias in favor of local nationals), as to the fairness of its judicial procedures, or as
to is operational efficiency (due, for example, to lack of resources, congestion and delay, or interfering circumstances such as a civil unrest). In one
noted case, [it was found] that delays of 'up to a quarter of a century' rendered the foreign forum... inadequate for these purposes.77cralawlawlibrary
We deem it more appropriate and in the greater interest of prudence that a defendant not only allege supposed dangerous tendencies in litigating in
this jurisdiction; the defendant must also show that such danger is real and present in that litigation or dispute resolution has commenced in another
jurisdiction and that a foreign tribunal has chosen to exercise jurisdiction.

III

Forum non conveniens finds no application and does not operate to divest Philippine tribunals of jurisdiction and to require the application of foreign
law.

Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the Cabin Attendant contracts that require the application of the
laws of Saudi Arabia.

Forum non conveniens relates to forum, not to the choice of governing law. Thai forum non conveniensmay ultimately result in the application of
foreign law is merely an incident of its application. In this strict sense, forum non conveniens is not applicable. It is not the primarily pivotal
consideration in this case.

In any case, even a further consideration of the applicability of forum non conveniens on the incidental matter of the law governing respondents'
relation with Saudia leads to the conclusion that it is improper for Philippine tribunals to divest themselves of jurisdiction.

Any evaluation of the propriety of contracting parties' choice of a forum and'its incidents must grapple with two (2) considerations: first, the
availability and adequacy of recourse to a foreign tribunal; and second, the question of where, as between the forum court and a foreign court, the
balance of interests inhering in a dispute weighs more heavily.
The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a foreign tribunal and can be resolved by juxtaposing the
competencies and practical circumstances of the tribunals in alternative fora. Exigencies, like the statute of limitations, capacity to enforce orders and
judgments, access to records, requirements for the acquisition of jurisdiction, and even questions relating to the integrity of foreign courts, may
render undesirable or even totally unfeasible recourse to a foreign court. As mentioned, we consider it in the greater interest of prudence that a
defendant show, in pleading forum non conveniens, that litigation has commenced in another jurisdiction and that a foieign tribunal has, in fact,
chosen to exercise jurisdiction.

Two (2) factors weigh into a court's appraisal of the balance of interests inhering in a dispute: first, the vinculum which the parties and their relation
have to a given jurisdiction; and second, the public interest that must animate a tribunal, in its capacity as an agent of the sovereign, in choosing to
assume or decline jurisdiction. The first is more concerned with the parties, their personal circumstances, and private interests; the second concerns
itself with the state and the greater social order.

In considering the vinculum, a court must look into the preponderance of linkages which the parties and their transaction may have to either
jurisdiction. In this respect, factors, such as the parties' respective nationalities and places of negotiation, execution, performance, engagement or
deployment, come into play.

In considering public interest, a court proceeds with a consciousness that it is an organ of the state. It must, thus, determine if the interests of the
sovereign (which acts through it) are outweighed by those of the alternative jurisdiction. In this respect, the court delves into a consideration of public
policy. Should it find that public interest weighs more heavily in favor of its assumption of jurisdiction, it should proceed in adjudicating the dispute,
any doubt or .contrary view arising from the preponderance of linkages notwithstanding.

Our law on contracts recognizes the validity of contractual choice of law provisions. Where such provisions exist, Philippine tribunals, acting as the
forum court, generally defer to the parties' articulated choice.

This is consistent with the fundamental principle of autonomy of contracts. Article 1306 of the Civ:l Code expressly provides that "[t]he contracting
parties may establish 'such stipulations, clauses, terms and conditions as they may deem convenient." 78 Nevertheless, while a Philippine tribunal
(acting as the forum court) is called upon to respect the parties' choice of governing law, such respect must not be so permissive as to lose sight of
considerations of law, morals, good customs, public order, or public policy that underlie the contract central to the controversy.

Specifically with respect to public policy, in Pakistan International Airlines Corporation v. Ople,79 this court explained
that:chanroblesvirtuallawlibrary
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 inta 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.80(Emphasis supplied)
Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure the fundamental equality before the law of women and men."
Contrasted with Article II, Section 1 of the 1987 Constitution's statement that "[n]o person shall ... be denied the equal protection of the laws," Article
II, Section 14 exhorts the State to "ensure." This does not only mean that the Philippines shall not countenance nor lend legal recognition and
approbation to measures that discriminate on the basis of one's being male or female. It imposes an obligation to actively engage in securing the
fundamental equality of men and women.

The Convention on the Elimination of all Forms of Discrimination against Women (CEDAW), signed and ratified by the Philippines on July 15,
1980, and on August 5, 1981, respectively,81 is part of the law of the land. In view of the widespread signing and ratification of, as well as adherence
(in practice) to it by states, it may even be said that many provisions of the CEDAW may have become customary international law. The CEDAW
gives effect to the Constitution's policy statement in Article II, Section 14. Article I of the CEDAW defines "discrimination against women"
as:chanroblesvirtuallawlibrary
any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of impairing or nullifying the recognition, enjoyment
or exercise by women, irrespective of their marital status, on a basis of equality of men and women, of human rights and fundamental freedoms in the
political, economic, social, cultural, civil or any other field. 82cralawlawlibrary
The constitutional exhortation to ensure fundamental equality, as illumined by its enabling law, the CEDAW, must inform and animate all the actions
of all personalities acting on behalf of the State. It is, therefore, the bounden duty of this court, in rendering judgment on the disputes brought before
it, to ensure that no discrimination is heaped upon women on the mere basis of their being women. This is a point so basic and central that all our
discussions and pronouncements � regardless of whatever averments there may be of foreign law � must proceed from this premise.

So informed and animated, we emphasize the glaringly discriminatory nature of Saudia's policy. As argued by respondents, Saudia's policy entails the
termination of employment of flight attendants who become pregnant. At the risk of stating the obvious, pregnancy is an occurrence that pertains
specifically to women. Saudia's policy excludes from and restricts employment on the basis of no other consideration but sex.

We do not lose sight of the reality that pregnancy does present physical limitations that may render difficult the performance of functions associated
with being a flight attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a disability so permanent and immutable that, it
must entail the termination of one's employment. It is clear to us that any individual, regardless of gender, may be subject to exigencies that limit the
performance of functions. However, we fail to appreciate how pregnancy could be such an impairing occurrence that it leaves no other recourse but
the complete termination of the means through which a woman earns a living.

Apart from the constitutional policy on the fundamental equality before the law of men and women, it is settled that contracts relating to labor and
employment are impressed with public interest. Article 1700 of the Civil Code provides that "[t]he relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts must yield to the common good."
Consistent with this, this court's pronouncements in Pakistan International Airlines Corporation83 are clear and
unmistakable:chanroblesvirtuallawlibrary
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". The first clause of paragraph 10 cannot be invoked to prevent the application of Philippine labor laws and'regulations to the
subject matter of this case, i.e., the employer-employee relationship between petitioner PIA and private respondents. 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. . . . 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.84 (Emphasis
supplied)
As the present dispute relates to (what the respondents allege to be) the illegal termination of respondents' employment, this case is immutably a
matter of public interest and public policy. Consistent with clear pronouncements in law and jurisprudence, Philippine laws properly find application
in and govern this case. 'Moreover, as this premise for Saudia's insistence on the application forum non conveniens has been shattered, it follows that
Philippine tribunals may properly assume jurisdiction over the present controversy. Philippine jurisprudence provides ample illustrations of when a
court's renunciation of jurisdiction on account of forum non conveniens is proper or improper.'

In Philsec Investment Corporation v. Court of Appeals,85 this court noted that the trial court failed to consider that one of the plaintiffs was a
domestic corporation, that one of the defendants was a Filipino, and that it was the extinguishment of the latter's debt that was the object of the
transaction subject of the litigation. Thus, this court held, among others, that the trial court's refusal to assume jurisdiction was not justified by forum
non conveniens and remanded the case to the trial court.

In Raytheon International, Inc. v. Rouzie, Jr.,86 this court sustained the trial court's assumption of jurisdiction considering that the trial court could
properly enforce judgment on the petitioner which was a foreign corporation licensed to do business in the Philippines.

In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court found no reason to disturb the trial court's assumption of jurisdiction over a case in which, as
noted by the trial court, "it is more convenient to hear and decide the case in the Philippines because Todaro [the plaintiff] resides in the Philippines
and the contract allegedly breached involve[d] employment in the Philippines."88

In Pacific Consultants International Asia, Inc. v. Schonfeld,89 this court held that the fact that the complainant in an illegal dismissal case was a
Canadian citizen and a repatriate did not warrant the application of forum non conveniens considering that: (1) the Labor Code does not
include forum non conveniens as a ground for the dismissal of a complaint for illegal dismissal; (2) the propriety of dismissing a case based on forum
non conveniens requires a factual determination; and (3) the requisites for assumption of jurisdiction as laid out in Bank of America, NT&SA90 were
all satisfied.

In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations Commission 91 that the National Labor Relations Q Commission
was a seriously inconvenient forum. In that case, private respondent Marcelo G. Santos was working in the Sultanate of Oman when he received a
letter from Palace Hotel recruiting him for employment in Beijing, China. Santos accepted the offer. Subsequently, however, he was released from
employment supposedly due to business reverses arising from political upheavals in China (i.e., the Tiananmen Square incidents of 1989). Santos
later filed a Complaint for illegal dismissal impleading Palace Hotel's General Manager, Mr. Gerhard Schmidt, the Manila Hotel International
Company Ltd. (which was, responsible for training Palace Hotel's personnel and staff), and the Manila Hotel Corporation (which owned 50% of
Manila Hotel International Company Ltd.'s capital stock).

In ruling against the National Labor Relations Commission's exercise of jurisdiction, this court noted that the main aspects of the case transpired in
two (2) foreign jurisdictions, Oman and China, and that the case involved purely foreign elements. Specifically, Santos was directly hired by a
foreign employer through correspondence sent to Oman. Also, the proper defendants were neither Philippine nationals nor engaged in business in the
Philippines, while the main witnesses were not residents of the Philippines. Likewise, this court noted that the National Labor Relations Commission
was in no position to conduct the following: first, determine the law governing the employment contract, as it was entered into in foreign soil;
second, determine the facts, as Santos' employment was terminated in Beijing; and third, enforce its judgment, since Santos' employer, Palace Hotel,
was incorporated under the laws of China and was not even served with summons.

Contrary to Manila Hotel, the case now before us does not entail a preponderance of linkages that favor a foreign jurisdiction.

Here, the circumstances of the parties and their relation do not approximate the circumstances enumerated in Puyat,92 which this court recognized as
possibly justifying the desistance of Philippine tribunals from exercising jurisdiction.

First, there is no basis for concluding that the case can be more conveniently tried elsewhere. As established earlier, Saudia is doing business in the
Philippines. For their part, all four (4) respondents are Filipino citizens maintaining residence in the Philippines and, apart from their previous
employment with Saudia, have no other connection to the Kingdom of Saudi Arabia. It would even be to respondents' inconvenience if this case were
to be tried elsewhere.

Second, the records are bereft of any indication that respondents filed their Complaint in an effort to engage in forum shopping or to vex and
inconvenience Saudia.

Third, there is no indication of "unwillingness to extend local judicial facilities to non-residents or aliens."93 That Saudia has managed to bring the
present controversy all the way to this court proves this.

Fourth, it cannot be said that the local judicial machinery is inadequate for effectuating the right sought to be maintained. Summons was properly
served on Saudia and jurisdiction over its person was validly acquired.
Lastly, there is not even room for considering foreign law. Philippine law properly governs the present dispute.

As the question of applicable law has been settled, the supposed difficulty of ascertaining foreign law (which requires the application of forum non
conveniens) provides no insurmountable inconvenience or special circumstance that will justify depriving Philippine tribunals of jurisdiction.

Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia which should apply, it does not follow that Philippine
tribunals should refrain from exercising jurisdiction. To. recall our pronouncements in Puyat,94 as well as in Bank of America, NT&SA,95 it is not so
much the mere applicability of foreign law which calls into operation forum non conveniens. Rather, what justifies a court's desistance from
exercising jurisdiction is "[t]he difficulty of ascertaining foreign law"96 or the inability of a "Philippine Court to make an intelligent decision as to the
law[.]"97

Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., "to make an intelligent decision" 98), Philippine tribunals may
apply the foreign law selected by the parties. In fact, (albeit without meaning to make a pronouncement on the accuracy and reliability of
respondents' citation) in this case, respondents themselves have made averments as to the laws of Saudi Arabia. In their Comment, respondents
write:chanroblesvirtuallawlibrary
Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful to terminate the employment of any woman by virtue of
pregnancy. The law in Saudi Arabia is even more harsh and strict [sic] in that no employer can terminate the employment of a female worker or give
her a warning of the same while on Maternity Leave, the specific provision of Saudi Labor Laws on the matter is hereto quoted as
follows:chanroblesvirtuallawlibrary
"An employer may not terminate the employment of a female worker or give her a warning of the same while on maternity leave." (Article 155,
Labor Law of the Kingdom of Saudi Arabia, Royal Decree No. M/51.) 99cralawlawlibrary
All told, the considerations for assumption of jurisdiction by Philippine tribunals as outlined in Bank of America, NT&SA100 have been satisfied. First,
all the parties are based in the Philippines and all the material incidents transpired in this jurisdiction. Thus, the parties may conveniently seek relief
from Philippine tribunals. Second, Philippine tribunals are in a position to make an intelligent decision as to the law and the facts. Third, Philippine
tribunals are in a position to enforce their decisions. There is no compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the
immense public policy considerations attendant to this case behoove Philippine tribunals to not shy away from their duty to rule on the
case.chanRoblesvirtualLawlibrary

IV

Respondents were illegally terminated.

In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as "the voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from
employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of
relinquishment."102 Thus, essential to the act of resignation is voluntariness. It must be the result of an employee's exercise of his or her own will.

In the same case of Bilbao, this court advanced a means for determining whether an employee resigned voluntarily:chanroblesvirtuallawlibrary
As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be
considered in determining whether he or she, in fact, intended, to sever his or her employment.103 (Emphasis supplied)
On the other hand, constructive dismissal has been defined as "cessation of work because 'continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay' and other benefits."104

In Penaflor v. Outdoor Clothing Manufacturing Corporation,105 constructive dismissal has been described as tantamount to "involuntarily [sic]
resignation due to the harsh, hostile, and unfavorable conditions set by the employer."106 In the same case, it was noted that "[t]he gauge for
constructive dismissal is whether a reasonable person in the employee's position would feel compelled to give up his employment under the
prevailing circumstances."107

Applying the cited standards on resignation and constructive dismissal, it is clear that respondents were constructively dismissed. Hence, their
termination was illegal.

The termination of respondents' employment happened when they were pregnant and expecting to incur costs on account of child delivery and infant
rearing. As noted by the Court of Appeals, pregnancy is a time when they need employment to sustain their families. 108 Indeed, it goes against normal
and reasonable human behavior to abandon one's livelihood in a time of great financial need.

It is clear that respondents intended to remain employed with Saudia. All they did was avail of their maternity leaves. Evidently, the very nature of a
maternity leave means that a pregnant employee will not report for work only temporarily and that she will resume the performance of her duties as
soon as the leave allowance expires.

It is also clear that respondents exerted all efforts to' remain employed with Saudia. Each of them repeatedly filed appeal letters (as much as five [5]
letters in the case of Rebesencio109) asking Saudia to reconsider the ultimatum that they resign or be terminated along with the forfeiture of their
benefits. Some of them even went to Saudia's office to personally seek reconsideration. 110

Respondents also adduced a copy of the "Unified Employment Contract for Female Cabin Attendants." 111This contract deemed void the employment
of a flight attendant who becomes pregnant and threatened termination due to lack of medical fitness. 112 The threat of termination (and the forfeiture
of benefits that it entailed) is enough to compel a reasonable person in respondents' position to give up his or her employment.

Saudia draws attention to how respondents' resignation letters were supposedly made in their own handwriting. This minutia fails to surmount all the
other indications negating any voluntariness on respondents' part. If at all, these same resignation letters are proof of how any supposed resignation
did not arise from respondents' own initiative. As earlier pointed out, respondents' resignations were executed on Saudia's blank letterheads that
Saudia had provided. These letterheads already had the word "RESIGNATION" typed on the subject portion of their respective headings when these
were handed to respondents.113ChanRoblesVirtualawlibrary

"In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer." 114 In this case, Saudia makes
much of how respondents supposedly completed their exit interviews, executed quitclaims, received their separation pay, and took more than a year
to file their Complaint.115 If at all, however, these circumstances prove only the fact of their occurrence, nothing more. The voluntariness of
respondents' departure from Saudia is non sequitur.

Mere compliance with standard procedures or processes, such as the completion of their exit interviews, neither negates compulsion nor indicates
voluntariness.

As with respondent's resignation letters, their exit interview forms even support their claim of illegal dismissal and militates against Saudia's
arguments. These exit interview forms, as reproduced by Saudia in its own Petition, confirms the unfavorable conditions as regards respondents'
maternity leaves. Ma. Jopette's and Loraine's exit interview forms are particularly telling:chanroblesvirtuallawlibrary
a. From Ma. Jopette's exit interview form:

�� �3. In what respects has the job met or failed to meet your expectations?

THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE.116

b. From Loraine's exit interview form:

�� �1. What are your main reasons for leaving Saudia? What company are you joining?

�� ��� �xxx xxx xxx

�� ��� �Others

CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY)117

As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v. Paramio,118 this court noted that "[i]f (a) there is clear proof that the
waiver was wangled from an unsuspecting or gullible person; or (b) the terms of the settlement are unconscionable, and on their face invalid, such
quitclaims must be struck down as invalid or illegal."119 Respondents executed their quitclaims after having been unfairly given an ultimatum to
resign or be terminated (and forfeit their benefits).chanRoblesvirtualLawlibrary

Having been illegally and unjustly dismissed, respondents are entitled to full backwages and benefits from the time of their termination until the
finality of this Decision. They are likewise entitled to separation pay in the amount of one (1) month's salary for every year of service until the
fmality of this Decision, with a fraction of a year of at least six (6) months being counted as one (1) whole year.

Moreover, "[m]oral damages are awarded in termination cases where the employee's dismissal was attended by bad faith, malice or fraud, or where it
constitutes an act oppressive to labor, or where it was done in a manner contrary to morals, good customs or public policy." 120 In this case, Saudia
terminated respondents' employment in a manner that is patently discriminatory and running afoul of the public interest that underlies employer-
employee relationships. As such, respondents are entitled to moral damages.

To provide an "example or correction for the public good"121 as against such discriminatory and callous schemes, respondents are likewise entitled to
exemplary damages.

In a long line of cases, this court awarded exemplary damages to illegally dismissed employees whose "dismissal[s were] effected in a wanton,
oppressive or malevolent manner."122 This court has awarded exemplary damages to employees who were terminated on such frivolous, arbitrary,
and unjust grounds as membership in or involvement with labor unions, 123 injuries sustained in the course of employment,124development of a
medical condition due to the employer's own violation of the employment contract, 125and lodging of a Complaint against the employer.126 Exemplary
damages were also awarded to employees who were deemed illegally dismissed by an employer in an attempt to evade compliance with statutorily
established employee benefits.127 Likewise, employees dismissed for supposedly just causes, but in violation of due process requirements, were
awarded exemplary damages.128

These examples pale in comparison to the present controversy. Stripped of all unnecessary complexities, respondents were dismissed for no other
reason than simply that they were pregnant. This is as wanton, oppressive, and tainted with bad faith as any reason for termination of employment
can be. This is no ordinary case of illegal dismissal. This is a case of manifest gender discrimination. It is an affront not only to our statutes and
policies on employees' security of tenure, but more so, to the Constitution's dictum of fundamental equality between men and women.129

The award of exemplary damages is, therefore, warranted, not only to remind employers of the need to adhere to the requirements of procedural and
substantive due process in termination of employment, but more importantly, to demonstrate that gender discrimination should in no case be
countenanced.

Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal, respondents are likewise entitled to attorney's fees in the
amount of 10% of the total monetary award.130
 VI

Petitioner Brenda J. Betia may not be held liable.

A corporation has a personality separate and distinct from those of the persons composing it. Thus, as a rule, corporate directors and officers are not
liable for the illegal termination of a corporation's employees. It is only when they acted in bad faith or with malice that they become solidarity liable
with the corporation.131

In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever Electrical,132 this court clarified that "[b]ad faith does not connote
bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty
through some motive or interest or ill will; it partakes of the nature of fraud."133

Respondents have not produced proof to show that Brenda J. Betia acted in bad faith or with malice as regards their termination. Thus, she may not
be held solidarity liable with Saudia.cralawred

WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not solidarity liable with petitioner Saudi Arabian Airlines, and
second, that petitioner Saudi Arabian Airlines is liable for moral and exemplary damages. The June 16, 2011 Decision and the September 13, 2011
Resolution of the Court of Appeals in CA-G.R. SP. No. 113006 are hereby AFFIRMED in all other respects. Accordingly, petitioner Saudi Arabian
Airlines is ordered to pay respondents:

(1) Full backwages and all other benefits computed from the respective dates in which each of the respondents were illegally terminated until the
finality of this Decision;
(2) Separation pay computed from the respective dates in which each of the respondents commenced employment until the finality of this
Decision at the rate of one (1) month's salary for every year of service, with a fraction of a year of at least six (6) months being counted as one
(1) whole year;
(3) Moral damages in the amount of P100,000.00 per respondent;
(4) Exemplary damages in the amount of P200,000.00 per respondent; and
(5) Attorney's fees equivalent to 10% of the total award.

Interest of 6% per annum shall likewise be imposed on the total judgment award from the finality of this Decision until full satisfaction thereof.

This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to respondents which petitioner Saudi Arabian
Airlines should pay without delay.

SO ORDERED.chanroblesvirtuallawlibrary
G.R. No. 122191 October 8, 1998

SAUDI ARABIAN AIRLINES, petitioner,

vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional
Trial Court of Quezon City, respondents.

QUISUMBING, J.:

This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set aside the Resolution1dated September 27, 1995 and the
Decision2 dated April 10, 1996 of the Court of Appeals3 in CA-G.R. SP No. 36533,4 and the Orders5 dated August 29, 1994 6 and February 2,
19957 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. . . .

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 lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief
Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was
asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As
it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.

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

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.

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) 15. 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 Defendant's
Motion for Reconsideration).

In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its Motion for Reconsideration raised lack of jurisdiction as
its cause of action, the Omnibus Motion Rule does not apply, even if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged
that the Philippines does not have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the
same.

Respondent Judge subsequently issued another Order 24 dated February 2, 1995, denying SAUDIA's Motion for Reconsideration. The pertinent
portion of the assailed Order reads as follows:

Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September 20, 1994, and
the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi
Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which
is one for the recovery of actual, moral and exemplary damages plus attorney's fees, upon the basis of the applicable Philippine
law, Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this Court as regards the subject
matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be
reconsidered, the motion for reconsideration of the defendant, is DENIED.

SO ORDERED. 25

Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ of Preliminary
Injunction and/or Temporary Restraining Order 26 with the Court of Appeals.

Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order 27 dated February 23, 1995, prohibiting the respondent
Judge from further conducting any proceeding, unless otherwise directed, in the interim.

In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate court denied SAUDIA's Petition for the Issuance of a Writ
of Preliminary Injunction dated February 18, 1995, to wit:

The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED, after considering the Answer, with Prayer to
Deny Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder, it appearing that herein petitioner is not clearly
entitled thereto (Unciano Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335, April 7, 1993, Second Division).

SO ORDERED.

On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition 29 for Review with Prayer for Temporary Restraining Order dated
October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of Appeals rendered the Decision 30dated April 10, 1996, now also assailed.
It ruled that the Philippines is an appropriate forum considering that the Amended Complaint's basis for recovery of damages is Article 21 of the
Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a denial of a
Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal.

On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining 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:

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 petitioner's April 30,
1996 Supplemental Petition For Review With Prayer For A Temporary Restraining Order Within Ten (10) Days From Notice
Thereof. Further, the Revised Rules of Court should be construed with liberality pursuant to Section 2, Rule 1 thereof.

III

Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v.
Hon. Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary
Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period as provided for under Section 1, Rule
45 of the Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has not yet become final and executory and
this Honorable Court can take cognizance of this case. 33

From the foregoing factual and procedural antecedents, the following issues emerge for our resolution:

I.

WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT OF
QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-18394 ENTITLED "MILAGROS P.
MORADA V. SAUDI ARABIAN AIRLINES".

II.

WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD
GOVERN.

Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondent's claim for alleged
abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign 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

35
On the other hand, private respondent contends that since her Amended Complaint is based on Articles 19 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., 3rd Floor, Cougar
Building, 114 Valero St., Salcedo Village, Makati, Metro Manila.

xxx xxx xxx

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

7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors reauested her
to see MR. Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi Arabia. When she saw him, he brought her to the
police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the
police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the
police return her passport and allowed her to catch the afternoon flight out of Jeddah.

8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to
Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Meniewy, the
Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she
was asked to sigh a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah.
As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.

9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993
for further investigation. Plaintiff did so after receiving assurance from SAUDIA's Manila manger, Aslam Saleemi, that the
investigation was routinary and that it posed no danger to her.

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

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

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

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 respondent's assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here, and the question of
jurisdiction 43 confronts the court a quo.

After a careful study of the private respondent's Amended Complaint, 44 and the Comment thereon, we note that she aptly predicated her cause of
action on Articles 19 and 21 of the New Civil Code.

On one hand, Article 19 of the New Civil Code provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice give everyone his
due and observe honesty and good faith.

On the other hand, Article 21 of the New Civil Code provides:

 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 respondent's assertion that
violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum.

Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of Court on jurisdiction 47 we find that the Regional Trial Court
(RTC) of Quezon City possesses jurisdiction over the subject matter of the suit. 48 Its authority to try and hear the case is provided for under Section 1
of Republic Act No. 7691, to wit:

Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby
amended to read as follows:

Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive jurisdiction:

xxx xxx xxx

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

xxx xxx xxx

And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City, is appropriate:

Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]

(a) xxx xxx xxx

(b) Personal actions. — All other actions may be commenced and tried where the defendant or any of the defendants resides or
may be found, or where the plaintiff or any of the plaintiff resides, at the election of the plaintiff.

Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC Quezon City assuming jurisdiction.
Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to
a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting
upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be
disturbed. 49

Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the
case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no
longer maintains substantial connections. That would have caused a fundamental unfairness to her.

Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been shown by either of the parties. The choice
of forum of the plaintiff (now private respondent) should be upheld.

Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the
trial court, private respondent has voluntary submitted herself to the jurisdiction of the court.

The records show that petitioner SAUDIA has filed several motions 50 praying for the dismissal of Morada's Amended Complaint. SAUDIA also
filed an Answer In Ex Abundante Cautelam dated February 20, 1995. What is very patent and explicit from the motions filed, is that SAUDIA prayed
for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial court's jurisdiction by praying for the
dismissal of the Amended Complaint on grounds other than lack of jurisdiction.

As held by this Court in Republic vs. Ker and Company, Ltd.: 51

 We observe that the motion to dismiss filed on April 14, 1962, aside from disputing the lower court's jurisdiction over defendant's
person, prayed for dismissal of the complaint on the ground that plaintiff's cause of action has prescribed. By interposing such
second ground in its motion to dismiss, Ker and Co., Ltd. availed of an affirmative defense on the basis of which it prayed the
court to resolve controversy in its favor. For the court to validly decide the said plea of defendant Ker & Co., Ltd., it necessarily
had to acquire jurisdiction upon the latter's person, who, being the proponent of the affirmative defense, should be deemed to
have abandoned its special appearance and voluntarily submitted itself to the jurisdiction of the court.

Similarly, the case of De Midgely vs. Ferandos, held that;

When the appearance is by motion for the purpose of objecting to the jurisdiction of the court over the person, it must be for the
sole and separate purpose of objecting to the jurisdiction of the court. If his motion is for any other purpose than to object to the
jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of the court. A special appearance by
motion made for the purpose of objecting to the jurisdiction of the court over the person will be held to be a general appearance,
if the party in said motion should, for example, ask for a dismissal of the action upon the further ground that the court had no
jurisdiction over the subject matter. 52

Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City. Thus, we find that the trial court has jurisdiction over
the case and that its exercise thereof, justified.

As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should
control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system
regulate the situation. 53

Several theories have been propounded in order to identify the legal system that should ultimately control. Although ideally, all choice-of-law
theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is then faced with the problem of
deciding which of these two important values should be stressed. 54

Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as
"characterization", or the "doctrine of qualification". It is the "process of deciding whether or not the facts relate to the kind of question specified in a
conflicts rule." 55The 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. 57An essential element of conflict rules is the
indication of a "test" or "connecting factor" or "point of contact". Choice-of-law rules invariably consist of a factual relationship (such as property
right, contract claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the
place of wrongdoing. 58

59
Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. 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, thelex loci intentionis;

(7) the place where judicial or administrative proceedings are instituted or done. The lex fori — the law of the forum — is
particularly important because, as we have seen earlier, matters of "procedure" not going to the substance of the claim involved
are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from
application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and

(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner
as such. It also covers contractual relationships particularly contracts of affreightment. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed admitted for purposes of the motion to
dismiss, we are convinced that there is reasonable basis for private respondent's assertion that although she was already working in Manila, petitioner
brought her to Jeddah on the pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew
members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial for very serious charges,
including adultery and violation of Islamic laws and tradition.

There is likewise logical basis on record for the claim that the "handing over" or "turning over" of the person of private respondent to Jeddah
officials, petitioner may have acted beyond its duties as employer. Petitioner's purported act contributed to and amplified or even proximately caused
additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of
private respondent under the guise of petitioner's authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As
purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the
injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or redress
for the wrongs done, once duly proven.

Considering that the complaint in the court a quo is one involving torts, the "connecting factor" or "point of contact" could be the place or places
where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as
a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived
private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its
rights and in the performance of its duties, "act with justice, give her due and observe honesty and good faith." Instead, petitioner failed to protect
her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important
here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of
complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the
situs of the alleged tort.

Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liability 61 have been
advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an
occasion to apply the "State of the most significant relationship" rule, which in our view should be appropriate to apply now, given the factual
context of this case.

In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and
evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the
conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the
place where the relationship, if any, between the parties is centered. 62

As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no question that private
respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business of international air
carriage. Thus, the "relationship" between the parties was centered here, although it should be stressed that this suit is not based on mere labor law
violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, 63 raised by private
respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established.

Prescinding from this premise that the Philippines is the situs of the tort complained of and the place "having the most interest in the problem", we
find, by way of recapitulation, that the Philippine law on tort liability should have paramount application to and control in the resolution of the legal
issues arising out of this case. Further, we hold that the respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the
complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find untenable petitioner's insistence
that "[s]ince private respondent instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter." 64As aptly
said by private respondent, she has "no obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on
Articles 19 and 21" of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never alleged that Saudi law
should govern this case. 65 And as correctly held by the respondent appellate court, "considering that it was the petitioner who was invoking the
applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is". 66

Lastly, no error could be imputed to the respondent appellate court in upholding the trial court's denial of defendant's (herein petitioner's) motion to
dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was obviously available, and expeditious trial itself
indicated by the nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the case below,
not just for the benefit of all the litigants, but also for the vindication of the country's system of law and justice in a transnational setting. With these
guidelines in mind, the trial court must proceed to try and adjudge the 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.