Bank of America, NT & SA vs American Realty Corp
declaring that the filing in foreign courts by the
Facts:
 BANTSA & BAIL on several occasions granted 3 major
multi-million US Dollar loans to the following corporate
borrowers: (1) Liberian Transport Navigation; (2) El Challenger
S.A., & (3) Eshley Compania Naviera, all of which are from Republic
of Panama and are foreign affiliates of American Realty Corp
(ARC).
 Due to the default in the payment of the loan
amortizations, BANTSA and the corp. borrowers signed and
entered into restructuring agreements. As additional security for
the restructured loans, ARC as 3rd party mortgagor executed 2 real
estate mortgages over parcels of land located in Bulacan.
 Eventually, the borrowers defaulted in the payment of
the restructured loans prompting BANTSA to file civil actions
before foreign courts for the collection of the principal loan and
without impleading ARC as party-defendant. (2 England HC, 2
Hongkong SC)
 Thereafter, BANTSA filed an application for extrajudicial
foreclosure of real estate mortgage before the Office of the
Provincial Sheriff of Bulacan.
 After due notice and publication, the mortgaged real
properties were sold at public auction in EJ foreclosure sale, with
Integrated Credit and Corporation Services Co as the highest
bidder for 24 million pesos.
 ARC filed before the RTC of Pasig for an action of
damages against the petitioner for the act of foreclosing EJ the
REMs despite the pendency of civil suits before foreign courts for
the collection of the principal loan.
 Petitioner alleged that the rule prohibiting the
mortgagee from foreclosing the mortgage after an ordinary suit
for collection has been filed, is not applicable in the present case
because:
o ARC is not a party to the principal restructuring
agreements and was never made a pt-def in the
civil cases filed in HK and England.
o No civil suit for sum of money filed in the PH
since the civil actions were filed in HK and
England.
o Und the English Law, the governing law under
the principal agreements, the mortgagee does
NOT lose its security interest by filing civil
actions for sums of money.
 ARC filed a motion for SUSPENSION of the redemption
period on the ground that “it cannot exercise said right
without at the same time waiving its contentions in the
case that the foreclosure of the mortgage on its
properties is legally improper and therefore invalid.” The
court granted.
 ICCS consolidated its ownership to such properties and
sold it to Stateland Investment Corporation for 39 million
php.
 The lower court rendered judgment in favor of ARC
defendant on collection suits against the principal
debtors operated as a WAIVER of the security of the
mortgages.
 BANTSA appealed to the CA but it was denied.
 Hence, this petition.
Issue: WON the petitioner’s act of filing a collection suit against
the principal debtors for the recovery of the loan before foreign
courts constituted a waiver of the remedy of foreclosure.
Petitioner’s contention:
A waiver of the remedy of foreclosure requires the
concurrence of 2 reqs.: 1) an ordinary civil action for collection
should be filed AND 2) subsequently a final judgment be
correspondingly rendered therein.
Thus, absent of any of the 2 requisites, the mortgagee-creditor is
deemed not to have waived the remedy of foreclosure
Held: YES.
The petitioner’s argument is untenable. The Court ruled that a
mortgage creditor may institute against the mortgage debtor
either a personal action for debt or a real action to foreclose the
mortgage. The remedies available to the mortgage-creditor are
deemed alternative and not cumulative.
An election of one remedy operates as a waiver of the other.
Here, the filing of four civil suits before the foreign courts,
necessarily abandoned the remedy to foreclose the real estate
mortgages constituted over the properties of third-party
mortgagor and ARC. By filing both remedies, the petitioner
transgressed the rules against splitting a cause of action well-
enshrined in our jurisprudence.
2) Petitioner contends that under English Law, the governing law
to the principal agreements, the mortgagee does not lose its
security interest by simply filing civil actions for sums of money.
The Court ruled in the negative. When the foreign law, judgment
or contract is contrary to a sound and establish public policy of the
forum, the said foreign law, judgment , or order shall not be
applied.
The public policy sought to be protected is the principle
proscribing the splitting up of a single cause of action.
Foreign aw should not be applied when its application would work
undeniable injustice to the citizens or residents of the forum. To
give justice is the most important function of the law.
A law, judgment, or contract that is obviously unjust NEGATES the
fundamental principle of Conflicts of Law.
PETITION DENIED.
DACASIN vs DACASIN

Facts: Herald, an American, and Sharon, a Filipino were married

and have one daughter. Thereafter, the filed a divorce in Illinois
which was granted and has awarded a sole custody of their
daughter to Sharon.

Then, in Manila, they have executed a contract for the joint

custody of their daughter and chose the PH courts as exclusive
forum to adjudicate disputes arising from the agreement.

Thereafter, petitioner sued Sharon in Makati RTC to enforce the

contract for violating the contract where Sharon exercised sole
custody over their daughter.

Sharon sought the dismissal of the complaint for lack of

jurisdiction because of Illinois court’s retention of jurisdiction to
enforce the divorce decree.

RTC sustained respondent’s motion and dismissed for lack of

jurisdiction. The trial court held that: 1) it is precluded from taking
cognizance over the suit considering the Illinois court’s retention
of jurisdiction to enforce its divorce decree including the awarding
of sole custody to respondent; 2) divorce decree is binding upon
petitioner following the “nationality rule”; 3) the Agreement is
void for contravening Art 2035 prohibiting compromise
agreements on jurisdiction.

Hence this petition.

ISSUE: WON the trial court has jurisdiction to take cognizance of

petitioner’s suit and enforce the agreement on the joint custody
of the parties’ child.

HELD:

The trial court has jurisdiction to entertain the suit but not to
enforce the Agreement for being void.

The trial court cannot enforce the Agreement which is contrary to

law. 2 undisputed facts are existing at the time of the execution of
the agreement: 1) Stephanie was under 7 years old; & 2)
petitioner & respondent were no longer married under the law of
US because of the divorce decree obtained.

No child under 7 years of age shall be separated from the mother,

unless the court finds compelling reasons to order otherwise.

This ignores the legislative basis that “no man can sound the deep
sorrows of a mother who is deprived of her child of tender age”.