RAYTHEON INTERNATIONAL, INC. v. STOCKTON W. ROUZIE, JR.
 January 1999 - Rouzie, a resident of La Union, filed an action for damages before
February 26, 2008 | Tinga, J. | Ways of Dealing with a Conflicts Problem; Dismiss the
Case; Doctrine of Forum Non Conveniens
Digester: Fausto, Jaime Manuel A.
SUMMARY: BMSI hired respondent Rouzie, an American, to negotiate the sale of
services to the Philippines. Rouzie secured a service contract, but filed a labor case
against BMSI and RUST, which was dismissed by the SC with finality. Rouzie later filed
a civil case (action for damages) before the RTC, impleading BMSI, RUST, and included
petitioner Raytheon (alleged to have merged with the former two as one company),
reiterating his allegations in the labor case. Raytheon alleged among others that the
contract had a stipulation wherein the parties shall be governed by the laws of
Connecticut. Raytheon then filed an omnibus motion to dismiss the case on the
grounds of forum non conveniens. RTC denied this, and the CA denied the subsequent
petition. The SC agreed with the RTC and CA, ruling that the RTC had jurisdiction over
the case (breach of contract) and thus had the discretion to try or proceed with the case.
DOCTRINE: Under the Doctrine of Forum Non Conveniens, a court in conflicts-of-
laws cases, may effuse impositions on its jurisdiction where it is not the most
“convenient” or available forum and the parties are not precluded from seeking
remedies elsewhere.
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.
Assuming the trial court has jurisdiction, it is within its discretion to abstain from
assuming jurisdiction, but only after the vital facts are established, to determine whether
special circumstances require the court’s desistance.
*This case is on the syllabus.
FACTS:
 Brand Marine Services, Inc. (BMSI), a corporation organized under the laws of
Connecticut, USA and respondent Rouzie, an American citizen, entered into a
contract whereby BMSI hired Rouzie 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.
 Match 1992 - Rouzie secured a service contract with the Philippines on behalf of
BMSI for the dredging of rivers affected by the Pinatubo eruption.
 July 1994 - Rouzie filed before the Arbitration Branch of the NLRC a suit against
BMSI and Rust International (RUST), a certain Gilbert, and Browning, for alleged
nonpayment of commissions, illegal termination and breach of employment
contract.
 LA Pablo Espiritu ordered BMSI and RUST to pay Rouzie’s money claims. NLRC
upon appeal reversed the LA and dismissed the complaint on the ground of lack of
jurisdiction. SC dismissed Rouzie’s case, which became final and executory.
the RTC of La Union. The Complaint named petitioner Raytheon as well as BMSI
and RUST. The Complaint reiterated the allegations in the labor case.
 Raytheon’s Answer:
 It was a foreign corporation duly licensed to do business in the Philippines and
denied entering into any arrangement with Rouzie or paying the latter.
 Denied combining with BMSI and RUST for the purpose of assuming the
alleged obligation of the said companies.
 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.
 Raytheon filed an Omnibus Motion for Preliminary Hearing Based on Affirmative
Defenses and for Summary Judgment seeking the dismissal of the complaint on
the grounds of forum non conveniens and failure to state a cause of action.
 Pending its resolution, the deposition of Walter Browning was taken before
the Philippine Consulate General in Chicago.
 RTC denied the omnibus motion.
 The factual allegations were sufficient for the court to render a valid judgment.
 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.
 MR denied; thus Raytheon filed R65 with the CA.
 CA denied the petition.
 Although the RTC should have also considered evidence aliunde in resolving
the omnibus motion, Raytheon’s evidence (deposition) was still insufficient for
purposes of determining failure to state a cause of action.
 The CA 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.
RULING: Petition denied.
Whether the CA erred in refusing to dismiss the complaint (1) on the ground of
forum non-conveniens and (2) for failure to state a cause of action and – NO.
(1) RAYTHEON:
 The contract between BMSI and Rouzie included a valid choice of law clause,
where the laws of Connecticut shall govern the contract.
 There are also foreign elements in the dispute (parties and witnesses are American,
and the evidence is outside the Philippines), which render the local courts
inconvenient forums, thus necessitating the application of forum non conveniens.
COURT:
 Three consecutive phases involved in judicial resolution of conflicts-of-laws  Such is within the discretion of the trial court to abstain from assuming
problems: jurisdiction, choice of law, and recognition and enforcement of jurisdiction, but only after the vital facts are established, to determine whether
judgments. special circumstances require the court’s desistance.
 Thus, in the instances where the Court held that the local judicial machinery was  The SC, like the CA, defers to the sound discretion of the RTC on this matter.
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 (2) RAYTHEON:
conveniently resort; (2) that the Philippine Court is in a position to make an  The complaint failed to state a cause of action.
intelligent decision as to the law and the facts; and (3) that the Philippine Court has COURT:
or is likely to have the power to enforce its decision.  The elementary test for failure to state a cause of action is whether the complaint
 On the matter of jurisdiction over a conflicts-of-laws problem where the case is alleges facts that if true would justify the relief demanded.
filed in a Philippine court and where the court has jurisdiction over the subject  The complaint alleged that petitioner had combined with BMSI and RUST to
matter, the parties and the res, it may or can proceed to try the case even if the function as one company. The CA was correct in ruling that the question of
rules of conflict-of-laws or the convenience of the parties point to a foreign forum. whether petitioner, BMSI and RUST merged together requires the presentation of
 This in an exercise of sovereign prerogative of the country where the case is further evidence, which only a full-blown trial on the merits can afford.
filed. The Constitution and the law confer jurisdiction over the nature and
subject matter of an action.
AS APPLIED:
 The case is an action for damages arising from an alleged breach of contract; the
nature of the action is within the jurisdiction of the RTC.
 The RTC acquired jurisdiction over the parties upon the filing of the complaint,
and jurisdiction over the person of petitioner by voluntary appearance.
ON THE LAWS OF CONNECTICUT STIPULATION:
 The stipulation doesn’t suggest that the Philippine Courts, or any other foreign
tribunal, are precluded from hearing the civil action.
 Jurisdiction and choice of law are 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.
 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.
[TOPIC] DOCTRINE OF FORUM NON CONVENIENS
 Under this doctrine, a court in conflicts-of-laws cases, may effuse impositions on
its jurisdiction where it is not the most “convenient” or available forum and the
parties are not precluded from seeking remedies elsewhere.
 AS APPLIED: Raytheon’s averments of foreign elements are insufficient to oust
the RTC of its jurisdiction over the case and the parties
 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.