43 ERIE RAILROAD Co. v.
TOMPKINS
304 U.S. 64 (1938)
FACTS
Tompkins, a citizen of Pennsylvania, was injured on a dark night by a passing freight train of the Erie
Railroad Company while walking along its right of way at Hughestown in that State. He claimed that the
accident occurred through negligence in the operation or maintenance, of the train. He was rightfully on
the premises as licensee because on a commonly used beaten footpath which ran for a short distance
alongside the tracks, and that he was struck by something which looked like a door projecting from one
of the moving cars. To enforce that claim, he brought an action in the federal court for southern New
York, which had jurisdiction because the company is a corporation of that State. It denied liability, and
the case was tried by a jury.
The Erie insisted that its duty to Tompkins was no greater than that owed to a trespasser. It contended,
among other things, that its duty to Tompkins, and hence its liability, should be determined in
accordance with the Pennsylvania law; that, under the law of Pennsylvania, as declared by its highest
court, persons who use pathways along the railroad right of way -- that is, a longitudinal pathway, as
distinguished from a crossing -- are to be deemed trespassers, and that the railroad is not liable for
injuries to undiscovered trespassers resulting from its negligence unless it be wanton or willful. Tompkins
denied the applicability of such rule since there was no statute of the State on the subject. The railroad's
duty and liability is to be determined in federal courts as a matter of general law.
The trial judge refused to rule that the applicable law precluded recovery and awarded a sum of money.
The Circuit Trial Court affirmed the decision of the trial court.
Erie’s had contended that application of the Pennsylvania rule was required by § 34 of the Federal
Judiciary Act which provides:
&The laws of the several States, except where the Constitution, treaties, or statutes of the United States
otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts
of the United States, in cases where they apply.
ISSUE
W/n such rule of Pennsylvania is required and should be considered by the Court in deciding the
present case.
RULING
The subject doctrine in this case is that of Swift v. Tyson. The case stated that a federal court exercising
jurisdiction over such a case on the ground of diversity of citizenship, is not free to treat this question as
one of so-called general law, but must apply the state law as declared by the highest state court.
In deciding the present case, first, the Court held that federal courts exercising jurisdiction on the
ground of diversity of citizenship need not, in matters of general jurisprudence, apply the unwritten law
of the State as declared by its highest court; that they are free to exercise an independent judgment as
to what the common law of the State is -- or should be. The statute is merely declarative of the rule
which would exist in the absence of the statute. The federal courts assumed, in the broad field of
general law, the power to declare rules of decision which Congress was confessedly without power to
enact as statutes.
Second, the Court ruled that the application of Swift v. Tyson doctrine prevented uniformity. Diversity of
citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state courts
against those not citizens of the State. Swift v. Tyson introduced grave discrimination by noncitizens
against citizens. It made rights enjoyed under the unwritten general law vary according to whether
enforcement was sought in the state or in the federal court, and the privilege of selecting the court in
which the right should be determined was conferred upon the noncitizen. Thus, the doctrine rendered
impossible equal protection of the law. In attempting to promote uniformity of law throughout the
United States, the doctrine had prevented uniformity in the administration of the law of the State.
Third, except in matters governed by the Federal Constitution or by Acts of Congress, the law to be
applied in any case is the law of the State. And whether the law of the State shall be declared by its NSS in turn appointed Kumagai as its local agent in Osaka, Japan.
Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no
federal general common law. Congress has no power to declare substantive rules of common law Kumagai supplied mV Estella with supplies and services but despite repeated demands, Crestamonte
applicable in a State, whether they be local in their nature or general, be they commercial law or a part failed to pay the amounts due for the same.
of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal
courts. NSS and Keihin Narasaki Corporation filed complaints-in-intervention.

Thus, in the present case, the Circuit Court of Appeals ruled that the question of liability is one of In May 1987, petitioner Fu Hing Oil Co. Ltd., a Hong Kong corporation and not doing business in the
general law, and on that ground declined to decide the issue of state law. The Court holds this was Philippnes, filed a motion for leave to intervene, alleging that it has an unpaid claim of $152K for fuel
error, the judgment is reversed and the case remanded to it for further proceedings in conformity with supplied to MV Estella.
Court’s opinion – an examination of the applicability of the said Pennsylvania law should be considered.
Petitioner KK Shell, a Japanese corporation not doing business in the Philippines, filed a motion to
intervene, alleging that upon the request of NSS, it provided fuel to M/V Estella when it was docked in
44 K.K. SHELL SEKIYU OSAKA HATSUBAISHO, FU HING OIL CO., LTD., v. COURT OF APPEALS, ATLANTIC
Tokyo amounting to $16,996 and Y1,000,000.
VENUS CO., S.A., and the VESSEL M/V “ESTELLA”
G.R. No. 90306-07, July 30, 1990
The trial court allowed the intervention of petitioners.
Atlantic and MV Estella moved to dismiss the complaint-in-intervention.
FACTS
Atlantic and MV Estella filed with the CA a petition against the trial court judge, Kumagai, NSS and
Kelhin, seeking the annulment of the orders.
In January 1987, Kumagai Kaiun Kaisha, Ltd. (Kumagai), a corporation formed and existing under
Japanese law, filed in the RTC Manila a complaint for the collection of a sum of money with preliminary
The CA annulled the orders and directed it to cease and desist from proceeding with the case. The CA
attachment against respondent Atlantic Venus Co., S.A. (Atlantic), a corporation registered in Panama,
ruled that petitioners were not suppliers but sub-agents of NSS, hence they were bound by the Agency
and the vessel MV Estella and Crestamonte Shipping Corporation, a Philippine corporation.
Agreement between Crestamonte and NSS, particularly the choice of forum clause (“That this
Agreement shall be governed by the Laws of Japan. Any matters, disputes, and/or differences arising
Atlantic is the owner of MV Estella.
between the parties hereto concerned regarding this Agreement shall be subject exclusively to the
jurisdiction of the District Courts of Japan”)
Petitioner alleged that Crestamonte, as bareboat charterer and operator of the MV Estella, appointed
NOTE: Fu Hing Oil filed a motion to withdraw as co-petitioner, having entered into an amicable
N.S. Shipping Corporation (NSS), a Japanese Corporation, as its general agent in Japan. This
settlement with private respondents.
appointment was formalized in an Agency Agreement.

ISSUES
Whether or not the complaints-in-intervention by petitioners should have been dismissed on the
ground that jurisdiction over the case was exclusively vested in Japanese courts pursuant to the choice
of forum clause.
RULING
- NO. The petition is GRQANTED and the decision of the CA is REVERSED.
The Agency Agreement does not support the conclusion that KK Shell is a sub-agent of NSS and is thus
bound by the agreement.
The body of the Agrement provided that the Agent (NSS) will provide by the decisions of Crestamonte
and will provide the necessary husbanding services for the latter’s vessels and will be responsible for
fixing southbound cargoes with revenues sufficient to cover ordinary expenses. The agreement
enumerates the principal duties of NSS but makes no express reference to the contracting of sub-agents
or the applicability of the terms of the agreement, particularly the choice of forum clause, to sub-agents.
Moreover, KK Shell’s statement in its motion that it was a representative of NSS for the supply of fuel to
vessels of which the latter is an agent does NOT conclusively establish a sub-agency between NSS and
KK Shell.
Consequently, since KK Shell is not bound by the Agreement as it is not a party thereto nor a sub-agent,
it is not bound by the choice of forum clause and is not barred from instituting the action in the
Philippines.
It was contended that the case should be dismissed pursuant to the doctrine of forum non conveniens.
The SC ruled that it cannot rule on such invocation of forum non conveniens, as the exact nature of the
relationship of the parties is still to be established. This is to be left to the sound discretion of the trial
court judge.
52 MIJARES vs. JAVIER-RANADA
FACTS:
The petitioners in this case are prominent victims of human rights violations who, deprived of the
opportunity to directly confront the man who once held absolute rule over this country, have chosen to
do battle instead with the earthly representative, his estate
May 9 1991: Invoking the Alien Tort Act, a complaint was filed by ten Filipino citizens representing a class
of 10,000 members who each alleged having suffered human rights abuses such as arbitrary detention,
torture and rape in the hands of police or military forces during the Marcos regime with the United
States District Court (US District Court), District of Hawaii, against the Estate of former Philippine
President Ferdinand E. Marcos (Marcos Estate)
US District Court and Affirmed by US CA: awarded them $1,964,005,859.90
Petitioners filed Complaint with Makati RTC for the enforcement of the Final Judgment
Marcos Estate filed a motion to dismiss, raising, among others, the non-payment of the correct filing
fees paying only P410
Petitioners claimed that an action for the enforcement of a foreign judgment is not capable of pecuniary
estimation
RTC: estimated the proper amount of filing fees was approximately P472 and dismissing the case
without prejudice
Petition for Certiorari under Rule 65
Petitioners:
the action is incapable of pecuniary estimation as the subject matter of the suit is the enforcement of a
foreign judgment, and not an action for the collection of a sum of money or recovery of damages. They
also point out that to require the class plaintiffs to pay Four Hundred Seventy Two Million Pesos
(P472,000,000.00) in filing fees would negate and render inutile the liberal construction ordained by the
Rules of Court, as required by Section 6, Rule 1 of the Rules of Civil Procedure, particularly the
inexpensive disposition of every action.
Commission on Human Rights: urged that the petition be granted and a judgment rendered, ordering the
enforcement and execution of the District Court judgment in accordance with Section 48, Rule 39 of the
1997 Rules of Civil Procedure. The Makati RTC erred in interpreting the action for the execution of a
foreign judgment as a new case, in violation of the principle that once a case has been decided between
the same parties in one country on the same issue with finality, it can no longer be relitigated again in
another country. The CHR likewise invokes the principle of comity, and of vested rights.
ISSUE: W/N the enforcement of a foreign judgment is incapable of pecuniary estimation
HELD: NO. (But belongs to &other actions not involving property&) petition is GRANTED.
There is an evident distinction between a foreign judgment in an action in rem and one in personam.
For an action in rem, the foreign judgment is deemed conclusive upon the title to the thing, while in an
action in personam, the foreign judgment is presumptive, and not conclusive, of a right as between the
parties and their successors in interest by a subsequent title
However, in both cases, the foreign judgment is susceptible to impeachment in our local courts on the
grounds of want of jurisdiction or notice to the party, collusion, fraud, or clear mistake of law or fact.
Thus, the party aggrieved by the foreign judgment is entitled to defend against the enforcement of such
decision in the local forum. It is essential that there should be an opportunity to challenge the foreign
judgment, in order for the court in this jurisdiction to properly determine its efficacy even if such
judgment has conclusive effect as in the case of in rem actions, if only for the purpose of allowing the
losing party an opportunity to challenge the foreign judgment. Consequently, the party attacking a
foreign judgment has the burden of overcoming the presumption of its validity. Absent perhaps a
statutory grant of jurisdiction to a quasi-judicial body, the claim for enforcement of judgment must be
brought before the regular courts.
There are distinctions, nuanced but discernible, between the cause of action arising from the
enforcement of a foreign judgment, and that arising from the facts or allegations that occasioned the
foreign judgment. They may pertain to the same set of facts, but there is an essential difference in the
right-duty correlatives that are sought to be vindicated. Extensive litigation is thus conducted on the
facts, and from there the right to and amount of damages are assessed. On the other hand, in an action
to enforce a foreign judgment, the matter left for proof is the foreign judgment itself, and not the facts
from which it prescinds.
As stated in Section 48, Rule 39, the actionable issues are generally restricted to a review of jurisdiction
of the foreign court, the service of personal notice, collusion, fraud, or mistake of fact or law. The
limitations on review is in consonance with a strong and pervasive policy in all legal systems to limit
repetitive litigation on claims and issues. Otherwise known as the policy of preclusion, it seeks to protect
party expectations resulting from previous litigation, to safeguard against the harassment of defendants,
to insure that the task of courts not be increased by never-ending litigation of the same disputes, and in
a larger sense to promote what Lord Coke in the Ferrer's Case of 1599 stated to be the goal of all law:
&rest and quietness.& If every judgment of a foreign court were reviewable on the merits, the plaintiff
would be forced back on his/her original cause of action, rendering immaterial the previously concluded
litigation.
Marcos Estate cites Singsong v. Isabela Sawmill and Raymundo v. Court of Appeals:
In determining whether an action is one the subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of
pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance
would depend on the amount of the claim. However, where the basic issue is something other than the
right to recover a sum of money, where the money claim is purely incidental to, or a consequence of,
the principal relief sought, this Court has considered such actions as cases where the subject of the
litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first
instance (now Regional Trial Courts).
An examination of Section 19(6), B.P. 129 reveals that the instant complaint for enforcement of a foreign
judgment, even if capable of pecuniary estimation, would fall under the jurisdiction of the Regional Trial
Courts
The complaint to enforce the US District Court judgment is one capable of pecuniary estimation. But at
the same time, it is also an action based on judgment against an estate, thus placing it beyond the
ambit of Section 7(a) of Rule 141. It is covered by Section 7(b)(3), involving as it does, &other actions not
involving property.& The petitioners thus paid the correct amount of filing fees, and it was a grave
abuse of discretion for respondent judge to have applied instead a clearly inapplicable rule and
dismissed the complaint.
Conflicts of Law- problem of recognizing foreign judgment.
We earlier adverted to the the internationally recognized policy of preclusion,[46] as well as the principles
of comity, utility and convenience of nations[47] as the basis for the evolution of the rule calling for the
recognition and enforcement of foreign judgments.
There have been attempts to codify through treaties or multilateral agreements the standards for the
recognition and enforcement of foreign judgments, but these have not borne fruition. Yet even if there
is no unanimity as to the applicable theory behind the recognition and enforcement of foreign judgments
or a universal treaty rendering it obligatory force, there is consensus that the viability of such recognition
and enforcement is essential. Salonga, whose treatise on private international law is of worldwide
renown, points out:
Whatever be the theory as to the basis for recognizing foreign judgments, there can be little dispute
that the end is to protect the reasonable expectations and demands of the parties. Where the parties
have submitted a matter for adjudication in the court of one state, and proceedings there are not
tainted with irregularity, they may fairly be expected to submit, within the state or elsewhere, to the
enforcement of the judgment issued by the court.
There is also consensus as to the requisites for recognition of a foreign judgment and the defenses
against the enforcement thereof. As earlier discussed, the exceptions enumerated in Section 48, Rule 39
have remain unchanged since the time they were adapted in this jurisdiction from long standing
American rules. The requisites and exceptions as delineated under Section 48 are but a restatement of
generally accepted principles of international law. Section 98 of The Restatement, Second, Conflict of
Laws, states that a valid judgment rendered in a foreign nation after a fair trial in a contested
proceeding will be recognized in the United States, and on its face, the term valid brings into play
requirements such notions as valid jurisdiction over the subject matter and parties
Similarly, the notion that fraud or collusion may preclude the enforcement of a foreign judgment finds
affirmation with foreign jurisprudence and commentators, as well as the doctrine that the foreign
judgment must not constitute a clear mistake of law or fact. And finally, it has been recognized that
public policy as a defense to the recognition of judgments serves as an umbrella for a variety of
concerns in international practice which may lead to a denial of recognition.
The viability of the public policy defense against the enforcement of a foreign judgment has been
recognized in this jurisdiction. This defense allows for the application of local standards in reviewing the
foreign judgment, especially when such judgment creates only a presumptive right, as it does in cases
wherein the judgment is against a person. The defense is also recognized within the international
sphere, as many civil law nations adhere to a broad public policy exception which may result in a denial
of recognition when the foreign court, in the light of the choice-of-law rules of the recognizing court,
applied the wrong law to the case. The public policy defense can safeguard against possible abuses to
the easy resort to offshore litigation if it can be demonstrated that the original claim is noxious to our
constitutional values.
There is no obligatory rule derived from treaties or conventions that requires the Philippines to recognize
foreign judgments, or allow a procedure for the enforcement thereof. However, generally accepted
principles of international law, by virtue of the incorporation clause of the Constitution, form part of the
laws of the land even if they do not derive from treaty obligations.[66] The classical formulation in which form part thereof, such as those ensuring the qualified recognition and enforcement of foreign
international law sees those customary rules accepted as binding result from the combination two judgments.[71]
elements: the established, widespread, and consistent practice on the part of States; and a psychological
Thus, relative to the enforcement of foreign judgments in the Philippines, it emerges that there is a
element known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit in the latter
general right recognized within our body of laws, and affirmed by the Constitution, to seek recognition
element is a belief that the practice in question is rendered obligatory by the existence of a rule of law
and enforcement of foreign judgments, as well as a right to defend against such enforcement on the
requiring it.[67]
grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
While the definite conceptual parameters of the recognition and enforcement of foreign judgments have fact.
not been authoritatively established, the Court can assert with certainty that such an undertaking is among 1 tayag vs benguet
those generally accepted principles of international law. [68]
As earlier demonstrated, there is a widespread
FACTS:
practice among states accepting in principle the need for such recognition and enforcement, albeit subject
to limitations of varying degrees. The fact that there is no binding universal treaty governing the practice
Idonah Slade Perkins, an American citizen who died in New York City, left among others, two two stock
is not indicative of a widespread rejection of the principle, but only a disagreement as to the imposable
certificates covering 33,002 shares of appellant, issued by Benguet Consolidated, a corporation
specific rules governing the procedure for recognition and enforcement.
domiciled in the Philippines. The certificates are in the possession of the County Trust Company of New
Aside from the widespread practice, it is indubitable that the procedure for recognition and York, which is the domiciliary administrator of the estate of the deceased. Tayag, the ancillary
enforcement is embodied in the rules of law, whether statutory or jurisprudential, adopted in various administrator of Perkins’ estate in the Philippines, now wants to take possession of these stock
foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48, Rule 39 of the Rules of certificates. CFI ordered the produce and deposit the stock certificates to Tayag, which County Trust
Court which has existed in its current form since the early 1900s. Certainly, the Philippine legal system has Company of New York, the domiciliary administrator, refused to do so. Thus, the probate court of the
long ago accepted into its jurisprudence and procedural rules the viability of an action for enforcement of Philippines rendered an order declaring the stock certificates as lost and ordering Benguet Consolidated
foreign judgment, as well as the requisites for such valid enforcement, as derived from internationally to issue new stock certificates representing Perkins’ shares. Benguet Consolidated appealed the order,
accepted doctrines. Again, there may be distinctions as to the rules adopted by each particular arguing that the stock certificates are not lost as they are in existence and currently in the possession of
state,[69] but they all prescind from the premise that there is a rule of law obliging states to allow for, County Trust Company of New York, hence there was a failure to observe certain requirements of its by-
however generally, the recognition and enforcement of a foreign judgment. The bare principle, to our laws before new stock certificates could be issued.
mind, has attained the status of opinio juris in international practice.
ISSUE: Whether or not the order of the lower court is proper
This is a significant proposition, as it acknowledges that the procedure and requisites outlined in Section
48, Rule 39 derive their efficacy not merely from the procedural rule, but by virtue of the incorporation
clause of the Constitution. Rules of procedure are promulgated by the Supreme Court,[70] and could very
well be abrogated or revised by the high court itself. Yet the Supreme Court is obliged, as are all State
HELD:
components, to obey the laws of the land, including generally accepted principles of international law

The appeal lacks merit.
Tayag, as ancillary administrator, has the power to gain control and possession of all assets of the
decedent within the jurisdiction of the Philippines
It is to be noted that the scope of the power of the ancillary administrator was, in an earlier case, set
forth by Justice Malcolm. Thus: &It is often necessary to have more than one administration of an estate.
When a person dies intestate owning property in the country of his domicile as well as in a foreign
country, administration is had in both countries. That which is granted in the jurisdiction of decedent's
last domicile is termed the principal administration, while any other administration is termed the ancillary
administration. The reason for the latter is because a grant of administration does not ex proprio vigore
have any effect beyond the limits of the country in which it is granted. Hence, an administrator
appointed in a foreign state has no authority in the [Philippines]. The ancillary administration is proper,
whenever a person dies, leaving in a country other than that of his last domicile, property to be
administered in the nature of assets of the deceased liable for his individual debts or to be distributed
among his heirs.&
Probate court has authority to issue the order enforcing the ancillary administrator’s right to the stock
certificates when the actual situs of the shares of stocks is in the Philippines.
It would follow then that the authority of the probate court to require that ancillary administrator's right
to &the stock certificates covering the 33,002 shares ... standing in her name in the books of [appellant]
Benguet Consolidated, Inc....& be respected is equally beyond question. For appellant is a Philippine
corporation owing full allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of
stock cannot therefore be considered in any wise as immune from lawful court orders.
The Court Order shall prevail over the Corporation by-laws
In the first place, there is no such occasion to apply such by-law. It is admitted that the foreign
domiciliary administrator did not appeal from the order now in question. Moreover, there is likewise the
express admission of appellant that as far as it is concerned, &it is immaterial ... who is entitled to the
possession of the stock certificates ...& Even if such were not the case, it would be a legal absurdity to
impart to such a provision conclusiveness and finality. Assuming that a contrariety exists between the
above by-law and the command of a court decree, the latter is to be followed.
It is understandable, as Cardozo pointed out, that the Constitution overrides a statute, to which,
however, the judiciary must yield deference, when appropriately invoked and deemed applicable. It
would be most highly unorthodox, however, if a corporate by-law would be accorded such a high estate
in the jural order that a court must not only take note of it but yield to its alleged controlling force.
2 UNITED AIRLINES, INC., Petitioner vs. COURT OF APPEALS, ANICETO FONTANILLA, in his personal
capacity and in behalf of his minor son MYCHAL ANDREW FONTANILLA, Respondents, G.R. No. 124110,
April 20, 2001.
FACTS:
Aniceto Fontanilla purchased from petitioner United Airlines, through the Philippine Travel Bureau in
Manila three (3) &Visit the U.S.A.& tickets for himself, his wife and his minor son Mychal.
The Fontanillas proceeded to the United States as planned, where they used the first coupon from San
Francisco to Washington. On April 24, 1989, Aniceto Fontanilla bought two (2) additional coupons each
for himself, his wife and his son from petitioner at its office in Washington Dulles Airport. After paying
the penalty for rewriting their tickets, the Fontanillas were issued tickets with corresponding boarding
passes with the words &CHECK-IN REQUIRED,& for United Airlines Flight No. 1108, set to leave from Los
Angeles to San Francisco at 10:30 a.m. on May 5, 1989.
The cause of the non-boarding of the Fontanillas on United Airlines Flight No. 1108 makes up the bone
of contention of this controversy.
The incident prompted the Fontanillas to file Civil Case No. 89-4268 for damages before the Regional
Trial Court of Makati. After trial on the merits, the trial court rendered a decision, dismissing the
complaint for there is a failure to comply with the check-in requirement. The counterclaim is likewise
dismissed as it appears that plaintiffs were not actuated by legal malice when they filed the instant
complaint.
On appeal, the Court of Appeals ruled in favor of the Fontanillas. The appellate court found that there
was an admission on the part of United Airlines that the Fontanillas did in fact observe the check-in
requirement. It ruled further that even assuming there was a failure to observe the check-in
requirement, United Airlines failed to comply with the procedure laid down in cases where a passenger
is denied boarding. The appellate court likewise gave credence to the claim of Aniceto Fontanilla that
the employees of United Airlines were discourteous and arbitrary and, worse, discriminatory. In light of
such treatment, the Fontanillas were entitled to moral damages.
ISSUE: Whether or not the CA is correct in relying the Code of Federal Regulation Part on Oversales
(laws of USA).
HELD: No.
Notably, the appellate court relied on the Code of Federal Regulation Part on Oversales which states:
250.6 Exceptions to eligibility for denied boarding compensation.
A passenger denied board involuntarily from an oversold flight shall not be eligible for denied board
compensation if:
The passenger does not comply with the carrier’s contract of carriage or tariff provisions regarding
ticketing, reconfirmation, check-in, and acceptability for transformation.
The appellate court, erred in applying the laws of the United States as, in the case at bar, Philippine law
is the applicable law. Although, the contract of carriage was to be performed in the United States, the
tickets were purchased through petitioner’s agent in Manila. It is true that the tickets were &rewritten&
in Washington, D.C. however, such fact did not change the nature of the original contract of carriage
entered into by the parties in Manila.
In the case of Zalanea vs. Court of Appeals, this Court applied the doctrine of lex loci contractus.
According to the doctrine, as a general rule, the law of the place where a contract is made or entered
into governs with respect to its nature and validity, obligation and interpretation. This has been said to
be the rule even though the place where the contract was made is different from the place where it is to
be performed, and particularly so, if the place of the making and the place of performance are the
same. Hence, the court should apply the law of the place where the airline ticket was issued, when the
passengers are residents and nationals of the forum and the ticket is issued in such State by the
defendant airline.
The law of the forum on the subject matter is Economic Regulations No. 7 as amended by Boarding
Priority and Denied Board Compensation of the Civil Aeronautics Board which provides that the check-
in requirement be complied with before a passenger may claim against a carrier for being denied
boarding:
Sec. 5. Amount of Denied Boarding Compensation Subject to the exceptions provided hereinafter under
Section 6, carriers shall pay to passengers holding confirmed reserved space and who have presented
themselves at the proper place and time and fully complied with the carrier ’ s check-in and
reconfirmation procedures and who are acceptable for carriage under the Carrier’s tariff but who have
been denied boarding for lack of space, a compensation at the rate of: xxx
Therefore, since there is failure to comply with the check-in requirement, their claims are defeated.
3 cadalin vs poea
FACTS:
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. Evangelista, in their own
behalf and on behalf of 728 other overseas contract workers (OCWs) instituted a class suit with the
Philippine Overseas Employment Administration (POEA) for money claims arising from their recruitment
by AIBC and employment by BRII.
BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; while
AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino
workers for overseas employment on behalf of its foreign principals.
Cadalin, et al. principally sought the payment of the unexpired portion of the employment contracts,
which was terminated prematurely, and secondarily, the payment of the interest of the earnings of the
Travel and Reserved Fund, interest on all the unpaid benefits, refund, differential pay and penalties for
committing prohibited practices, as well as the suspension of the license of AIBC and the accreditation
of BRII.
From the records, it appears that the complainants-appellants allege that they were recruited by
respondent-appellant AIBC for its accredited foreign principal, Brown & Root, on various dates from
1975 to 1983. They were all deployed at various projects undertaken by Brown & Root in several
countries in the Middle East, as well as in Southeast Asia.
Having been officially processed as overseas contract workers by the Philippine Government, all the
individual complainants signed standard overseas employment contracts with AIBC before their
departure from the Philippines. These overseas employment contracts invariably contained terms and
conditions regarding hours of work and compensation, termination, vacation/sick leave benefits, bonus,
and offday pay.
In the State of Bahrain, where some of the individual complainants were deployed, His Majesty Isa Bin
Salman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23, otherwise known as the Labour Law for
the Private Sector. Some of the provisions of Amiri Decree No. 23 include a worker receiving payment
for each extra hour equivalent to his wage entitlement increased by a minimum of 25% for hours
worked during the day (50% from 7PM to 7AM); a weekly day of rest on full pay; additional sum
equivalent to 150% of worker’s normal wage when required to work on his weekly day of rest or on any
official holiday; leave on full pay for a period of not less than 21 days for each year after a year of
continuous service (28 if five years);
Moreover, Art. 156 of the Amiri Decree states that a claim arising out of a contract of employment shall
not be actionable after the lapse of 1 year from the date of the expiry of the contract. It appears that the
suit of the complainants has already expired. Plaintiff, however, contends that the prescription period
should be 10 years as provided by Art. 1144 of the Civil Code as their claim arise from a violation of a
contract. The POEA Administrator holds that the 10-year period of prescription should be applied but
the NLRC provides a different view asserting that the 3-year period of the Labor Code should be
applied. The Solicitor General, however, expressed that the 1-year period provided by the Amiri Decree
should be applied.
ISSUES:
I. Whether or not a foreign law should govern the contract of the parties.
II. If foreign law applies, whether or not the action has already prescribed.
RULING:
I.
Amiri Decree applies.
AIBC and BRII claim that NLRC acted capriciously and whimsically when it refused to enforce the
overseas-employment contracts, which became the law of the parties. They contend that the principle
that a law is deemed to be a part of a contract applies only to provisions of Philippine law in relation to
contracts executed in the Philippines.
The overseas-employment contracts, which were prepared by AIBC and BRII themselves, provided that
the laws of the host country became applicable to said contracts if they offer terms and conditions more
favorable that those stipulated therein. While a part thereof provides that the compensation to the
employee may be &adjusted downward so that the total computation (thereunder) plus the non-
waivable benefits shall be equivalent to the compensation& therein agreed, another part of the same
provision categorically states &that total remuneration and benefits do not fall below that of the host
country regulation and custom.&
Any ambiguity in the overseas-employment contracts should be interpreted against AIBC and BRII, the
parties that drafted it (Eastern Shipping Lines, Inc. v. Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).
Article 1377 of the Civil Code of the Philippines provides:
The interpretation of obscure words or stipulations in a contract shall not favor the party who caused claim obnoxious to the forum's public policy. To enforce the one-year prescriptive period of the Amiri
the obscurity. Decree No. 23 as regards the claims in question would contravene the public policy on the protection to

The parties to a contract may select the law by which it is to be governed. In such a case, the foreign law labor as enshrined in the Constitution.

is adopted as a &system& to regulate the relations of the parties, including questions of their capacity to The prescriptive period applicable to the case should be three years as provided by the Labor Code
enter into the contract, the formalities to be observed by them, matters of performance, and so forth. since the claim arose from labor employment.

Instead of adopting the entire mass of the foreign law, the parties may just agree that specific provisions
of a foreign statute shall be deemed incorporated into their contract &as a set of terms.& By such
4 PAKISTAN INTERNATIONAL AIRLINES CORP. v. OPLE (1990)
reference to the provisions of the foreign law, the contract does not become a foreign contract to be
governed by the foreign law. The said law does not operate as a statute but as a set of contractual Facts:
terms deemed written in the contract.
On December 2, 1978, petitioner Pakistan International Airlines Corporation ( “ PIA ” ), a foreign
A basic policy of contract is to protect the expectation of the parties. Such party expectation is protected
corporation licensed to do business in the Philippines, executed in Manila two (2) separate contracts of
by giving effect to the parties' own choice of the applicable law. The choice of law must, however, bear
employment, one with private respondent Farrales and the other with private respondent Mamasig.
some relationship to the parties or their transaction. There is no question that the contracts sought to be
enforced by the claimants have a direct connection with the Bahrain law because the services were Paragraphs 5, 6, and 10 of these contracts are significant to this case. Paragraph 5 provides for the
rendered in that country. duration of employment, a period of three (3) years but can be extended by the mutual consent of the

II. parties. Paragraph 6 provides for termination. PIA reserves the right to terminate the agreement at any
time by giving the employee notice in writing in advance one month before the intended termination or
As a general rule, a foreign procedural law will not be applied in the forum. This is true even if the action
is based upon a foreign substantive law. A law on prescription of actions is sui generis in Conflict of Laws in lieu thereof, by paying the employee wages equivalent to one month’s salary. Paragraph 10 provides

in the sense that it may be viewed either as procedural or substantive, depending on the that the applicable law is the laws of Pakistan and that only the Courts of Karachi, Pakistan shall have

characterization given such a law. jurisdiction to consider any matter arising out of or under this agreement.

The exception is when the country of the forum has a &borrowing statute.& Said statute has the On August 2, 1980, roughly one (1) year and four (4) months prior to the expiration of the contracts of
practical effect of treating the foreign statute of limitation as one of substance. A &borrowing statute& employment, PIA sent separate letters to private respondents advising both that their services as flight
directs the state of the forum to apply the foreign statute of limitations to the pending claims based on
stewardesses would be terminated effective September 1, 1980, conformably to clause 6 (b) of the
a foreign law.
employment agreement.
Section 48 of the Civil Procedure Rule states that “if by the laws of the State or country where the cause
Subsequently, private respondents jointly instituted a complaint for illegal dismissal and non-payment of
of action arose the action is barred, it is also barred in the Philippines”. However, the Supreme Court
company benefits and bonuses against PIA with the then Ministry of Labor and Employment (“MOLE”).
opted not to apply Bahrain’s prescriptive period. The courts of the forum will not enforce any foreign
After several failed attempts at conciliation, the MOLE hearing officer ordered the parties to submit their
position papers and evidence supporting their respective positions.
The PIA submitted its position paper, but no evidence.
In an Order dated January 22, 1981, the Regional Director ordered the reinstatement of private
respondents. The Order stated that private respondents had attained the status of regular employees
after they had rendered more than a year of continue service; that the stipulation limiting the period of
the employment contract to three (3) years was null and void as violative of the provisions of the Labor
Code and its implementing rules and regulations on regular and casual employment.
On appeal, the Deputy Minister of MOLE adopted the findings of fact and conclusions of the Regional
Director and affirmed the latter’s order.
Issues:
Is the contract of employment governed by the provisions therein or the general provisions of the Labor
Code?
Ruling:
Generally, a contract freely entered into should be respected since a contract is the law between the
parties. The principle of party autonomy in contracts is not, however, an absolute principle. The rule in
Article 1306 of the Civil Code is that the contracting parties may establish such stipulations as they may
deem convenient, “provided they are not contrary to law, morals, good customs, public order or public
policy.” Thus, counter-balancing the principle of autonomy of contracting parties is the equally general
rule that provisions of applicable law, especially provisions relating to matters affected with public policy,
are deemed written into the contract.
The law relating to labor and employment is clearly such an area and parties are not at liberty to
insulate themselves and their relationships from the impact of labor laws and regulations by simply
contracting with each other.
Both the Labor Arbiter and the Deputy Minister, MOLE, held that paragraph 5 of the employment
contract was inconsistent with Articles 280 and 281 of the Labor Code as they existed at the time the
contract of employment was entered into, and refused to give effect to said paragraph 5.
Examining the provisions of paragraphs 5 and 6, the Court considered that those provisions must be
read together. When so read, the fixed period of three (3) years specified in paragraph 5 will be seen to
have been effectively neutralized by the provisions of paragraph 6 of that agreement. Paragraph 6 in
effect took back from the employee the fixed three (3)-year period granted by paragraph 5 by
rendering such period in effect a facultative one at the option of the employer FIA. Because the net
effect of paragraphs 5 and 6 of the agreement here involved is to render the employment of private
respondents basically employment at the pleasure of petitioner PIA, the Court concluded that
paragraphs 5 and 6 were intended to prevent any security of tenure from accruing in favor of private
respondents even during the limited period of three (3) years.
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. 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. Neither may petitioner invoke the
second clause of paragraph 10, specifying the Karachi courts as the sole venue for the settlement of
dispute between the parties. There are multiple and substantive contacts between Philippine law and
Philippine courts, and the relationship between the parties.
The contract was not only executed in the Philippines, it was also performed here, at least partially.
Private respondents are Philippine citizens and respondents, while petitioner, although a foreign
corporation, is licensed to do business in the Philippines. The above contacts point to the Philippine
courts and administrative agencies as a proper forum for the resolution of contractual disputes between
the parties.
In any event, the petitioner did not undertake to plead and prove the contents of Pakistan law on the
matter. It must therefore be presumed that the applicable provisions of the law of Pakistan are the same
as the applicable provisions of Philippine law.
5 Huntington v. Attrill
FACTS
1. Huntington is a resident of New York who filed a case against Equitable Gaslight Company, a
corporation of Maryland, and against Attrill, his wife, and three daughters, which are residents of
Canada. Huntington’s prayer was to set aside a transfer of stock which was acquired through Atrill’s
through fraud to his creditors. Further, Huntington prayed that such stock will be paid as recovery for
Atrill’s liability as a director in a New York Corporation under the statute of New York.
2. The appellant, in June, 1880, became a creditor for money lent to the Rockaway Beach Improvement
Company, Limited, which carried on business in the State of New York, being incorporated pursuant to
Chapter 611 of the State laws of 1875.
3. Sect. 21 of the Act provides that: “If any certificate or report made, or public notice given, by the
officers of any such corporation, shall be false in any material representation, all the officers who shall
have signed the same shall be jointly and severally liable for all the debts of the corporation contracted
while they are officers thereof.”
4. The respondent was, in June, 1880, a director, and in that capacity an officer of the company within
the meaning of the statute. On the 30th of that month he, along with other officers of the company,
signed and verified on oath, as prescribed by sect. 37, a certificate setting forth that the whole capital
stock had, at its date, been paid up in cash.
5. In such oath, Attrill, as a director of the company, signed and made oath to, and caused to be
recorded, as required by the law of New York, a certificate, which he knew to be false, stating that the
whole of the capital stock of the corporation had been paid in, whereas in truth no part had been paid
in, and by making such false certificate became liable, by the law of New York, for all the debts of the
company contracted before January 29, 1881, including its debt to the plaintiff.
6. On March 8, 1882, by proceedings in a court of New York, the corporation was declared to be
insolvent, and to have been so since July, 1880, and was dissolved. A duly exemplified copy of the record
of that judgment was annexed to and made part of the bill.
7. The complaint also alleged that &at the time of its dissolution, as aforesaid, the said company was
indebted to the plaintiff and to other creditors to an amount far in excess of its assets; that by the law of
the State of New York, all the stockholders of the company were liable to pay all its debts, each to the
amount of the stock held by him, and the defendant, Henry Y. Attrill, was liable at said date, and on
April 14, 1882, as such stockholder, to the amount of $340,000, the amount of stock held by him, and
was on both said dates also severally and directly liable as a director, having signed the false report
above mentioned, for all the debts of said company contracted between February 26, 1880, and January
29, 1881, which debts aggregate more than the whole value of the property owned by said Attrill. &
8. The complaint further alleged that Attrill was in March, 1882, and had ever since remained, individually
liable in a large amount over and above the debts for which he was liable as a stockholder and director
in the company, and that he was insolvent, and had secreted and concealed all his property for the
purpose of defrauding his creditors.
9. The complaint then alleged that in April, 1882, Attrill acquired a large amount of stock in the Equitable
Gaslight Company of Baltimore, and forthwith transferred into his own name, as trustee for his wife,
1,000 shares of such stock, and as trustee for each of his three daughters, 250 shares of the same,
without valuable consideration, and with intent to delay, hinder, and defraud his creditors, and especially
with the intent to delay, hinder, and defraud this plaintiff of his lawful suits, damages, debts, and
demands against Attrill arising out of the cause of action on which the aforesaid judgment was
recovered and out of the plaintiff's claim against him as a stockholder; that the plaintiff in June, 1880,
and ever since was domiciled and resident in the State of New York, and that from February, 1880, to
December 6, 1884, Attrill was domiciled and resident in that state, and that his transfers of stock in the
gas company were made in the City of New York, where the principal office of the company then was
and where all its transfers of stock were made, and that those transfers were, by the laws of New York as
well as by those of Maryland, fraudulent and void as against the creditors of Attrill, including the
creditors of the Rockaway Company, and were fraudulent and void as against the plaintiff.
10. The complaint further, by distinct allegations, averred that those transfers, unless set aside and
annulled by a court of equity, would deprive the plaintiff of all his rights and interests of every sort
therein to which he was entitled as a creditor of Attrill at the time when those fraudulent transfers were
made, and &that the said fraudulent transfers were wholly without legal consideration, were fraudulent
and void, and should be set aside by a court of equity.&
11. The complaint prayed that the transfer of shares in the gas company be declared fraudulent and void
and executed for the purpose of defrauding the plaintiff out of his claim as existing creditor; that the
certificates of those shares in the name of Attrill as trustee be ordered to be brought into court and
cancelled, and that the shares &be decreed to be subject to the claim of this plaintiff on the judgment
aforesaid,& and to be sold by a trustee appointed by the court, and new certificates issued by the gas
company to the purchasers, and for further relief.
12. One of the daughters demurred to the bill (complaint) because it showed that the plaintiff's claim
was for the recovery of a penalty against Attrill arising under a statute of the State of New York, and
because it did not state a case which entitled the plaintiff to any relief in a court of equity in the State of
Maryland.
13. By a stipulation of counsel filed in the cause, it was agreed that for the purposes of the demurrer, the
bill should be treated as embodying the New York statute of June 21, 1875, and that the Rockaway
Beach Improvement Company, Limited, was incorporated under the provisions of that statute.
14. Having failed to recover payment, the appellant, in September, 1886, brought an action upon his
decree in the Common Pleas Division of the High Court of Justice for the Province of Ontario, where the
respondent resided. The only plea stated in defence was to the effect that the judgment sued on was for
a penalty inflicted by the municipal law of New York; and that the action being one of a penal character
ought not to be entertained by the Courts of a foreign State.
Issue: Whether or not the Canadian Courts have jurisdiction to hear an appeal of a decision made by the
New York courts pertaining to penal law?
Held:
The courts of Ontario were bound to pay absolute deference to any interpretation which might have
been put upon the statute of 1875 in the State of New York. They had to construe and apply an
international rule, which was a matter of law entirely within the cognizance of the foreign court whose
jurisdiction was invoked. Judicial decisions in the state where the cause of action arose were not
precedents which must be followed, although the reasoning upon which they were founded must
always receive careful consideration and might be conclusive. The court appealed to must determine for
itself, in the first place, the substance of the right sought to be enforced; and, in the second place,
whether its enforcement would, either directly or indirectly, involve the execution of the penal law of
another state. Were any other principle to guide its decision, a court might find itself in the position of
giving effect in one case, and denying effect in another, to suits of the same character, in consequence
of the causes of action having arisen in different countries, or in the predicament of being constrained
to give effect to laws which were, in its own judgment, strictly penal.
CONFLICTS OF LAW PRINCIPLE- The rule has its foundation in the well-recognised principle that crimes,
including in that term all breaches of public law punishable by pecuniary mulct or otherwise, at the
instance of the State Government, or of some one representing the public, are local in this sense, that
they are only cognizable and punishable in the country where they were committed. Accordingly no
proceeding, even in the shape of a civil suit, which has for its object the enforcement by the State,
whether directly or indirectly, of punishment imposed for such breaches by the lex fori, ought to be
admitted in the Courts of any other country.
Chief Justice Marshall in the fewest possible words: &The courts of no country execute the penal laws of
another.&
Penal laws, strictly and properly, are those imposing punishment for an offense committed against the
state, and which, by the English and American constitutions, the executive of the state has the power to
pardon. Statutes giving a private action against the wrongdoer are sometimes spoken of as penal in
their nature, but in such cases it has been pointed out that neither the liability imposed nor the remedy
given is strictly penal.
The rule that the courts of no country execute the penal laws of another applies not only to
prosecutions and sentences for crimes and misdemeanors, but to all suits in favor of the state for the
recovery of pecuniary penalties for any violation of statutes for the protection of its revenue, or other
municipal laws, and to all judgments for such penalties.
6 Testate Estate Of Amos G. Bellis, deceased. People's Bank And Trust Company, executor. Maria Cristina
Bellis And Miriam Palma Bellis, oppositors-appellants, vs. EDWARD A. BELLIS, ET AL., heirs-appellees
Facts:
Amos G. Bellis, citizen of Texas, had 4 legitimate surviving chidren on his first wife(divorced), 2 legitimate
children on his second wife (survived him), and 3 illegitimate children Amos Bellis, Jr., Maria Cristina Bellis
and Miriam Palma Bellis.
Amos G. Bellis executed a will in the Philippines, wherein his estate should be divided:
a) $240,000.00 to his first wife, Mary E. Mallen;
(b) P120K to his 3 illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40K
each
(c)the remainder shall go to his seven children by his first and second wives, to be divided equally.
Subsequently, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A. His will was admitted to
probate in the Court of First Instance of Manila. The People's Bank and Trust Company(executor), paid
all the bequests therein, and the partition of the remainder.
Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions to the project of partition
on the ground that they were deprived of their legitimes as illegitimate children and, therefore,
compulsory heirs of the deceased.
Lower Court: approved the final account of partition of the executor and overruled the oppositions.
Based its ruling on Art. 16 of the Civil Code, it applied the national law of the decedent, which in this
case is Texas law, which did not provide for legitimes.
Issue: What law should apply, Philippine or Texas?
Held: Texas. (So no legitime.)
Discussion on Renvoi and processual presumption (Not so related sa case)
The doctrine is usually pertinent where the decedent is a national of one country, and a domicile of
another. The decedent was both a national of Texas and a domicile thereof at the time of his death. So
even assuming Texas has a conflict of law rule providing that the domiciliary system (law of the domicile)
should govern, the same would not result in a reference back (renvoi) to Philippine law, but would still
refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling
for the application of the law of the place where the properties are situated, renvoi would arise, since
the properties here involved are found in the Philippines. In the absence, however, of proof as to the
conflict of law rule of Texas, it should be presumed the same as ours (processual
presumption). Appellants' position is therefore not rested on the doctrine of renvoi.
Rationale of the ruling
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in
intestate or testamentary successions.
ART. 16. Xxx - However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person whose succession is under consideration,
whatever may he the nature of the property and regardless of the country wherein said property may
be found.
ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.
It was pointed out that decedent executed two wills — one to govern his Texas estate and the other his
Philippine estate —that he intended Philippine law to govern his Philippine estate. A provision in a
foreigner's will to the effect that his properties shall be distributed in accordance with Philippine law and
not with his national law, is illegal and void, for his national law cannot be ignored in regard to those
matters that Article 10 — now Article 16 — of the Civil Code states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that
under the laws of Texas, there are no forced heirs or legitimes. The intrinsic validity of the provision of
the will and the amount of successional rights are to be determined under Texas law, the Philippine law
on legitimes cannot be applied to the testacy of Amos G. Bellis.
9 ASIAVEST MERCHANT BANKERS (M) BERHAD v. CA
G.R. No. 110263
July 20, 2001
PARTIES
The petitioner Asiavest Merchant Bankers (M) Berhad is a corporation organized under the laws of
Malaysia while private respondent Philippine National Construction Corporation is a corporation duly
incorporated and existing under Philippine laws.
FACTS
In 1985, the High Court of Malaysia ordered the Philippine National Construction Corporation (PNCC) to
pay $5.1 million to Asiavest Merchant Bankers (M) Berhad. This was the result of a recovery suit filed by
Asiavest against PNCC in Malaysia for PNCC’s failure to complete a construction project there despite
due payment from Asiavest. Despite demand, PNCC failed to comply with the judgment in Malaysia
hence Asiavest filed a complaint for the enforcement of the Malaysian ruling against PNCC in the
Philippines. The case was filed with the Pasig RTC which eventually denied the complaint. The Court of
Appeals affirmed the decision of the RTC.
Asiavest appealed. In its defense, PNCC alleged that the foreign judgment cannot be enforced here
because of want of jurisdiction, want of notice to PNCC, collusion and/or fraud, and there is a clear
mistake of law or fact. Asiavest assailed the arguments of PNCC on the ground that PNCC’s counsel
participated in all the proceedings in the Malaysian Court.
ISSUE:
Whether or not the Malaysian Court judgment should be enforced against PNCC in the Philippines.
HELD
Yes. PNCC failed to prove and substantiate its bare allegations of want of jurisdiction, want of notice,
collusion and/or fraud, and mistake of fact. On the contrary, Asiavest was able to present evidence as to
the validity of the proceedings that took place in Malaysia. Asiavest presented the certified and
authenticated copies of the judgment and the order issued by the Malaysian Court. It also presented
correspondences between Asiavest’s lawyers and PNCC’s lawyers in and out of court which belied PNCC
’s allegation that the Malaysian court never acquired jurisdiction over it. PNCC’s allegation of fraud is not
sufficient too, further, it never invoked the same in the Malaysian Court.
The Supreme Court notes, to assail a foreign judgment the party must present evidence of want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Otherwise, the
judgment enjoys the presumption of validity so long as it was duly certified and authenticated. In this
case, PNCC failed to present the required evidence.
 the Straus & Co., &There is, however, a well-established exception to the rule to the effect that a court
will not enforce a contract though valid where made if its enforcement is contrary to the policy of the
forum.”

ISSUE:

Whether or not the courts of this State (New York) must deny access to a party seeking to enforce
10 INTERCONTINENTAL HOTELS COPR. V. GOLDEN obligations validly entered into in the Commonwealth of Puerto Rico and enforceable under Puerto
Intercontinental Hotels Corporation (Puerto Rico), Appellant, v. Jack Golden, Respondent. Rican law.

Argued September 30, 1964. Decided November 19, 1964.

HELD:
FACTS:

Once again we are faced with the question of when our courts may refuse to enforce a foreign right,
Defendant was a guest at plaintiff's Intercontinental Hotel in Puerto Rico from December 8 through
though valid where acquired, on the ground that its &enforcement is contrary to [the public] policy of
December 14, 1960. During his stay there, in an attempt to turn chance into fortune, he played — on
the forum&
credit generously furnished by plaintiff — at the dice tables in the casino conducted by the hotel, lost
Since these gambling debts were validly contracted in Puerto Rico and the Puerto Rican law provides a
and, when he ascertained the extent of his indebtedness, reneged. Following the loss of $6,000 in cash
remedy for their enforcement absent a clear showing that the enforcement of the causes of action here
which defendant allegedly brought with him, plaintiff advanced chips to the defendant in the sum of
would &offend our sense of justice or menace the public welfare&, we may not withhold aid. We do not
$12,000 which he eventually also lost.
think that public policy forbids us to enforce these contracts.
On December 14, 1960, he delivered to plaintiff his check for $3,000, dated December 17, 1960, payable
at the Manufacturers Trust Co. in New York City, in part payment of his gambling debt. The check was Substantially all of the commentators agree that foreign-based rights should be enforced unless the
not honored when presented for payment. For the remaining $9,000 defendant had given plaintiff 13 I. judicial enforcement of such a contract would be the approval of a transaction which is inherently
O. U.'s. At Trial Term in New York, plaintiff recovered judgment on the check and the I. O. U.'s for the vicious, wicked or immoral, and shocking to the prevailing moral sense. There was no strong public
full $12,000 plus interest of $1,102.50. policy to prevent the enforcement of such contracts according to the law of the place of performance.
The courts are not free to refuse to enforce a foreign right at the pleasure of the judges, to suit the
It is conceded that in Puerto Rico gambling has been legalized and that plaintiff's casino was duly
individual notion of expediency or fairness. They do not close their doors unless help would violate
licensed at the time defendant used its facilities. In Puerto Rico there is specific statutory provision for
some * * * prevalent conception of good morals&
the enforcement of legal gambling debts there and many times that the Supreme Court of Puerto Rico
has upheld the enforcement of such claims. In the present case there is no indication that the evils of gambling, which New York prohibits and
Puerto Rico has licensed, will spill over into our community if these debts are enforced in New York
The courts of New York will generally enforce contracts made in other jurisdictions. The validity of such
contracts is determined by the law of the place where the contracts are made. But as the court in
courts. The New York constitutional provisions were adopted with a view toward protecting the family
man of meager resources from his own imprudence at the gaming tables
There is nothing immoral per se in the contract before us, but injustice would result if citizens of this
State were allowed to retain the benefits of the winnings in a State where such gambling is legal, but to
renege if they were losers. We think, therefore, that this case falls within the consistent practice of
enforcing rights validly created by the laws of a sister State which do not tend to disturb our local laws
or corrupt the public.