SWEET LINES, INC. V. TEVES
Actions arising out of the contract of carriage should
FACTS:
Atty. Leovigildo Tandog and Rogelio Tiro bought tickets for
Tagbiliran City via the port of Cebu. Since many
passengers were bound for Surigao, “M/S Sweet Hope”
would not be proceeding to Bohol. They went to the proper
branch office and were relocated to “M/S Sweet Town”
where they were forced to agree “to hide at the cargo
section to avoid inspection of the officers of the Philippines
Coastguard.” They were exposed to the scorching heat of
the sun and the dust coming from the ship’s cargo of corn
grits and their tickets were not honored so they had to
purchase a new one. Because of the terrible experience
they had, they sued Sweet Lines for damages and for
breach of contract of carriage before the Court of First
Instance of Misamis Oriental who dismissed the complaint
for improper venue. A motion was premised on the
condition printed at the back of the tickets and was later
dismissed. Hence this instant petition for prohibition for
preliminary injunction.
ISSUE:
Whether or not, a common carrier engaged in inter-island
shipping stipulate thru condition printed at the back of
passage tickets to its vessels that any and all actions
arising out of the contract of carriage should be filed only
in a particular province or city.
HELD:
No.
be filed not only in a particular province or city. Contract of
adhesions are not the kind of contract where the parties sit
down to deliberate, discuss and agree specifically on all its
terms, but rather, one which respondents took no part at
all in preparing. It is only imposed upon them when they
paid for the fare for the freight they wanted to ship.
We find and hold that Condition No. 14 printed at the back
of the passage tickets should be held as void and
unenforceable for the following reasons:
1. Circumstances obligation in the inter-island ship will
prejudice rights and interests of innumerable passengers
in different parts of the country who, under Condition No.
14, will have to file suits against petitioner only in the City
of Cebu;
2. Subversive of public policy on transfers of venue of
actions; and
3. Philosophy underlying the provisions of transfers of
venue of actions is the convenience of the plaintiffs as well
as his witnesses and to promote the ends of justice.
Hence, petition for prohibition is hereby dismissed. The
restraining order is LIFTED and SET ASIDE.
HSBC VS. SHERMAN
FACTS: It appears that sometime in 1981, Eastern Book
Supply Service PTE, Ltd. (COMPANY), a company
incorporated in Singapore applied with and was granted
by HSBC Singapore branch an overdraft facility in the
maximum amount of Singapore dollars 200,000 with
interest at 3% over HSBC prime rate, payable monthly, on
amounts due under said overdraft facility.
As a security for the repayment by the COMPANY of sums
advanced by HSBC to it through the aforesaid overdraft
facility, in 1982, both private respondents and a certain
Lowe, all of whom were directors of the COMPANY at such
time, executed a Joint and Several Guarantee in favor of
HSBC 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. …
The COMPANY failed to pay its obligation. Thus, HSBC
demanded payment and inasmuch as the private
respondents still failed to pay, HSBC filed A complaint for
collection of a sum of money against private respondents
Sherman and Reloj before RTC of Quezon City.
Private respondents filed an MTD on the ground of lack of
jurisdiction over the subject matter. The trial court denied
the motion. They then filed before the respondent IAC a
petition for prohibition with preliminary injunction and/or
prayer for a restraining order. The IAC rendered a decision
enjoining the RTC Quezon City 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. MR denied, hence this petition.
ISSUE: Do Philippine courts have jurisdiction over the suit,
vis-a-vis the Guarantee stipulation regarding jurisdiction?
HELD: YES
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
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.
BELLIS V. BELLIS
FACTS:
Amos Bellis was a citizen of the state of Texas of the
United States. In his first wife whom he divorced, he had
five legitimate children; by his second wife, who survived
him, he had three legitimate children. Before he died, he
made two wills, one disposing of his Texas properties and 5. DURATION OF EMPLOYMENT AND PENALTY
the other disposing his Philippine Properties. In both wills, This agreement is for a period of 3 years, but can be
his illegitimate children were not given anything. The extended by the mutual consent of the parties.
illegitimate children opposed the will on the ground that xxx xxx xxx
they have been deprived of their legitimes to which they 6. TERMINATION
should be entitled if Philippine law were to apply. xxx xxx xxx
Notwithstanding anything to contrary as herein provided,
ISSUE:
PIA reserves the right to terminate this agreement at any
Whether or not the national law of the deceased should time by giving the EMPLOYEE notice in writing in advance
determine the sucessional rights of the illegitimate one month before the intended termination or in lieu
children. thereof, by paying the EMPLOYEE wages equivalent to
one month’s salary.
HELD: xxx xxx xxx
The Supreme Court held that the said children are not 10. APPLICABLE LAW:
entitled to their legitimes. Under the Texas Law, being the This agreement shall be construed and governed under
national law of the deceased, there are no legitimes. and by the laws of Pakistan, and only the Courts of
Further, even if the deceased had given them share, such Karachi, Pakistan shall have the jurisdiction to consider
would be invalid because the law governing the deceased any matter arising out of or under this agreement.
does not allow such. Farrales & Mamasig (employees) were hired as flight
attendants after undergoing training. Base station was in
Manila and flying assignments to different parts of the
Pakistan International Airlines v. Ople Middle East and Europe.
FACTS: On 2 December 1978, petitioner Pakistan roughly 1 year and 4 months prior to the expiration of the
International Airlines Corporation (PIA), a foreign contracts of employment, PIA through Mr. Oscar Benares,
corporation licensed to do business in the Philippines, counsel for and official of the local branch of PIA, sent
executed in Manila 2 separate contracts of employment, separate letters, informing them that they will be
one with private respondent Farrales and the other with terminated effective September 1, 1980.
private respondent Mamasig. 1 The contracts, which Farrales and Mamasig jointly instituted a complaint, for
became effective on 9 January 1979, provided in pertinent illegal dismissal and non-payment of company benefits
portion as follows:
and bonuses, against PIA with the then Ministry of Labor
and Employment (MOLE).
PIA’s Contention: The PIA submitted its position paper, but
no evidence, and there claimed that both private
respondents were habitual absentees; that both were in
the habit of bringing in from abroad sizeable quantities of
“personal effects”; and that PIA personnel at the Manila
International Airport had been discreetly warned by
customs officials to advise private respondents to
discontinue that practice. PIA further claimed that the
services of both private respondents were terminated
pursuant to the provisions of the employment contract.
Favorable decision for the respondents. The Order stated
that private respondents had attained the status of regular
employees after they had rendered more than a year of
continued service; that the stipulation limiting the period of
the employment contract to 3 years was null and void as
violative of the provisions of the Labor Code and its
implementing rules and regulations on regular and casual
employment; and that the dismissal, having been carried
out without the requisite clearance from the MOLE, was
illegal and entitled private respondents to reinstatement
with full backwages.
Decision sustained on appeal. Hence, this petition for
certiorari
ISSUE: (Relative to the subject) Which law should govern
over the case? Which court has jurisdiction?
HELD: Philippine Law and Philippine courts
Petitioner PIA cannot take refuge in paragraph 10 of its
employment agreement which specifies, firstly, the law of
Pakistan as the applicable law of the agreement and,
secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement “only [in]
courts of Karachi Pakistan”.
We have already pointed out that the relationship is much
affected with public interest and that the otherwise
applicable Philippine laws and regulations cannot be
rendered illusory by the parties agreeing upon some other
law to govern their relationship.
the contract was not only executed in the Philippines, it
was also performed here, at least partially; private
respondents are Philippine citizens and respondents,
while petitioner, although a foreign corporation, is licensed
to do business (and actually doing business) and hence
resident in the Philippines; lastly, private respondents
were based in the Philippines in between their assigned
flights to the Middle East and Europe. All the above
contacts point to the Philippine courts and administrative
agencies as a proper forum for the resolution of
contractual disputes between the parties.
Under these circumstances, paragraph 10 of the
employment agreement cannot be given effect so as to
oust Philippine agencies and courts of the jurisdiction
vested upon them by Philippine law. Finally, and in any
event, the petitioner PIA did not undertake to plead and
prove the contents of Pakistan law on the matter; it must
therefore be presumed that the applicable provisions of the
law of Pakistan are the same as the applicable provisions
of Philippine law.
[DOCTRINE OF PROCESSUAL PRESUMPTION, eh?]
Petition denied.
_______
NOTES:
Another Issue: petitioner PIA invokes paragraphs 5 and 6
of its contract of employment with private respondents
Farrales and Mamasig, arguing that its relationship with
them was governed by the provisions of its contract rather
than by the general provisions of the Labor Code.
A contract freely entered into should, of course, be
respected, as PIA argues, since a contract is the law
between the parties. The principle of party autonomy in
contracts is not, however, an absolute principle. The rule
in Article 1306, of our Civil Code is that the contracting
parties may establish such stipulations as they may deem
convenient, “provided they are not contrary to law, morals,
good customs, public order or public policy.” Thus,
counter-balancing the principle of autonomy of contracting
parties is the equally general rule that provisions of
applicable law, especially provisions relating to matters
affected with public policy, are deemed written into the
contract. Put a little differently, the governing principle is
that parties may not contract away applicable provisions of
law especially peremptory provisions dealing with matters
heavily impressed with public interest. The law relating to
labor and employment is clearly such an area and parties
are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations
by simply contracting with each other. It is thus necessary
to appraise the contractual provisions invoked by
petitioner PIA in terms of their consistency with applicable
Philippine law and regulations.
Zalamea vs. Court of Appeals
FACTS:
Spouses Cesar and Suthira Zalamea, and their daughter,
Liana Zalamea, purchased three (3) airline tickets from the
Manila agent of respondent TransWorld Airlines, Inc.
(TWA) for a flight from New York to Los Angeles on June
6, 1984. The tickets of the spouses were
purchased at a discount of 75% while that of their daughter
was a full fare ticket. All three tickets represented
confirmed reservations.
While in New York, on June 4, 1984, the spouses Zalamea
and their daughter received a notice of reconfirmation of
their reservations for said flight. On the appointed date,
however, the spouses Zalamea and their daughter
checked in at 10:00 am, an hour earlier than the scheduled
flight at 11:00 am but were placed on the wait-list because
the number of passengers who checked in before tem had
already taken all the seats available on the flight.
Out of the 42 names on the wait-list, the first 22 names
were eventually allowed to board the flight to Los Angeles,
including Cesar Zalamea. The two others, on the other
hand, being ranked lower than 22, were not able to fly. As
it were, those holding full-fare ticket were given first priority
among the wait-listed passengers. Mr. Zalamea, who was
holding the full-fare ticket of his daughter, was allowed to
board the plane; while his wife and daughter, who
presented the discounted tickets were denied boarding.
Even in the next TWA flight to Los Angeles, Mrs. Zalamea
and her daughter, could not be accommodated because it
was full booked. Thus, they were constrained to book in
another flight and purchased two tickets from American
Airlines.
Upon their arrival in the Philippines, the spouses Zalamea
filed an action for damages based on breach of contract of
air carriage before the RTC of Makati which rendered a
decision in their favor ordering the TWA to pay the price of
the tickets bought from American Airlines together with
moral damages and attorney’s fees. On appeal, the CA
held that moral damages are recoverable in a damage suit
predicated upon a breach of contract of carriage only
where there is fraud or bad faith. It further stated that since
it is a matter of record that overbooking of flights is a
common and accepted practice of airlines in the United
States and is specifically allowed under the Code of
Federal Regulations by the Civil Aeronautics Board,
neither fraud nor bad faith could be imputed on TWA.
ISSUE:
Whether or not the CA erred in accepting the finding that
overbooking is specifically allowed by the US Code of
Federal Regulations and in holding that there was no fraud
or bad faith on the part of TWA ?
HELD:
The CA was in error. There was fraud or bad faith on the
part of TWA when it did not allow Mrs. Zalamea and her
daughter to board their flight for Los Angeles in spite of
confirmed tickets. The US law or regulation allegedly
authorizing overbooking has never been proved.
1.) Foreign laws do not prove themselves nor can the court
take judicial notice of them. Like any other fact, they must
be alleged and proved. Written law may be evidenced by
an official publication thereof or by a copy attested by the
officers having legal custody of the record, or by his deputy
and accompanied with a certificate that such officer has
custody. The certificate may be made by a secretary of an
embassy or legation, consul-general, consul, vice-consul,
or consular agent or by any officer in the foreign service of
the Phil. stationed in the foreign country in which the
record is kept and authenticated by the seal of his office.
Here, TWA relied solely on the testimony of its customer
service agent in her deposition that the Code of Federal
Regulations of the Civil Aeronautic Board allows
overbooking. Aside from said statement, no official
publication of said code was presented as evidence. Thus,
the CA’s finding that overbooking is specifically allowed by
the US Code of Federal Regulations has no basis in fact.
"That there was fraud or bad faith on the part of respondent
airline when it did not allow petitioners to board their flight
for Los Angeles in spite of confirmed tickets cannot be
disputed. The U.S. law or regulation allegedly authorizing
overbooking has never been proved. Foreign laws do not
prove themselves nor can the courts take judicial notice of
them. Like any other fact, they must be alleged and
proved. Written law may be evidenced by an official
publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy,
and accompanied with a certificate that such officer has
custody. The certificate may be made by a secretary of an
embassy or legation, consul general, consul, vice-consul,
or consular agent or by any officer in the foreign service of
the Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his office.
Respondent TWA relied solely on the statement of Ms.
Gwendolyn Lather, its customer service agent, in her
deposition dated January 27, 1986 that the Code of
Federal Regulations of the Civil Aeronautics Board allows
overbooking. Aside from said statement, no official
publication of said code was presented as evidence. Thus,
respondent court's finding that overbooking is specifically
allowed by the US Code of Federal Regulations has no
basis in fact."
"Even if the claimed U.S. Code of Federal Regulations
does exist, the same is not applicable to the case at bar in
accordance with the principle of lex loci contractus which
require that the law of the place where the airline ticket was
issued should be applied by the court where the
passengers are residents and nationals of the forum and
the ticket is issued in such State by the defendant
airline. Since the tickets were sold and issued in the
Philippines, the applicable law in this case would be
Philippine law."
Other Issues:
2.) Even if the claimed US Code of Federal Regulations
does exist, the same is not applicable to the case at bar in
accordance with the principle of lex loci contractus which
requires that the law of the place where the airline ticket
was issued should be applied by the court where the
passengers are residents and nationals of the forum and
the ticket is issued in such State by the airline.
3.) Existing jurisprudence explicitly states that overbooking
amounts to bad faith, entitling the passengers concerned
to an award of moral damages. Where an airline had
deliberately overbooked, it took the risk of having to
deprive some passengers of their seats in case all of them
would show up for check in. for the indignity and
inconvenience of being refused a confirmed seat on the
last minute, said passenger is entitled to an award of moral
damages. This is so, for a contract of carriage generates
a relation attended with public duty --- a duty to provide
public service and convenience to its passengers which
must be paramount to self-interest or enrichment. Even on
the assumption that overbooking is allowed, TWA is still
guilty of bad faith in not informing its passengers
beforehand that it could breach the contract of carriage
even if they have confirmed tickets if there was
overbooking. Moreover, TWA was also guilty of not
informing its passengers of its alleged policy of giving less
priority to discounted tickets. Evidently, TWA placed self-
interest over the rights of the spouses Zalamea and their
daughter under their contract of carriage. Such conscious
disregard make respondent TWA liable for moral
damages, and to deter breach of contracts by TWA in
similar fashion in the future, the SC adjudged TWA liable
for exemplary damages, as well.
United Airlines Inc. vs CA
The appellate court, however, 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,30 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.
GARCIA V. RECIO
FACTS:
Respondent Rederick Recio, a Filipino, was married to
Editha Samson, an Australian citizen, in Malabon, Rizal,
on March 1, 1987. They lived together as husband and
wife in Australia. On May 18, 1989, a decree of divorce,
purportedly dissolving the marriage, was issued by an
Australian family court. On June 26, 1992, respondent
became an Australian citizen and was married again to
petitioner Grace Garcia-Recio, a Filipina on January 12,
1994 in Cabanatuan City. In their application for a
marriage license, respondent was declared as “single” and
“Filipino.”
Starting October 22, 1995, petitioner and respondent lived
separately without prior judicial dissolution of their
marriage.
On March 3, 1998, petitioner filed a Complaint for
Declaration of Nullity of Marriage on the ground of bigamy.
Respondent allegedly had a prior subsisting marriage at
the time he married her. On his Answer, Rederick
contended that his first marriage was validly dissolved;
thus, he was legally capacitated to marry Grace.
On July 7, 1998 or about five years after the couple’s
wedding and while the suit for the declaration of nullity was
pending , respondent was able to secure a divorce decree
from a family court in Sydney, Australia because the
“marriage had irretrievably broken down.”
The Regional Trial Court declared the marriage of
Rederick and Grace Recio dissolved on the ground that
the Australian divorce had ended the marriage of the
couple thus there was no more marital union to nullify or
annul.
ISSUE:
1.) Whether or not the divorce between respondent and
Editha Samson was proven.
2.) Whether or not respondent was proven to be legally
capacitated to marry petitioner
RULING:
1st issue:
The Supreme Court ruled that the mere presentation of the
divorce decree of respondent’s marriage to Samson is
insufficient. Before a foreign divorce decree can be
recognized by our courts, the party pleading it must prove
the divorce as a fact and demonstrate its conformity to the
foreign law allowing it. Furthermore, the divorce decree
between respondent and Editha Samson appears to be an
authentic one issued by an Australian family court.
However, appearance is not sufficient; compliance with
the aforementioned rules on evidence must be
demonstrated.
2nd issue:
Australian divorce decree contains a restriction that reads:
“1. A party to a marriage who marries again before this
decree becomes absolute (unless the other party has died)
commits the offence of bigamy.”
This quotation bolsters our contention that the divorrecce
obtained by respondent may have been restricted. It did
not absolutely establish his legal capacity to remarry
according to his national law. Hence, the Court find no
basis for the ruling of the trial court, which erroneously
assumed that the Australian divorce ipso facto restored
respondent’s capacity to remarry despite the paucity of
evidence on this matter.
The Supreme Court remanded the case to the court a quo
for the purpose of receiving evidence. The Court
mentioned that they cannot grant petitioner’s prayer to
declare her marriage to respondent null and void because
of the question on latter’s legal capacity to marry.
KAZUHIRO HASEGAWA vs MINORU KITAMURA
FACTS:
Nippon Engineering Consultants (Nippon), a Japanese
consultancy firm providing technical and management
support in the infrastructure projects national permanently
residing in the Philippines. The agreement provides that
Kitamaru was to extend professional services to Nippon
for a year. Nippon assigned Kitamaru to work as the
project manager of the Southern Tagalog Access Road
(STAR) project. When the STAR project was near
completion, DPWH engaged the consultancy services of
Nippon, this time for the detailed engineering &
construction supervision of the Bongabon-Baler Road
Improvement (BBRI) Project. Kitamaru was named as the
project manger in the contract.
Hasegawa, Nippon’s general manager for its International
Division, informed Kitamaru 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.
Kitamaru demanded that he be assigned to the BBRI
project. Nippon insisted that Kitamaru’s contract was for a
fixed term that had expired. Kitamaru then filed for specific
performance & damages w/ the RTC of Lipa City. Nippon
filed a MTD.
Nippon’s contention: The ICA had been perfected in Japan
& executed by & between Japanese nationals. Thus, the
RTC of Lipa City has no jurisdiction. The claim for improper
pre-termination of Kitamaru’s ICA could only be heard &
ventilated in the proper courts of Japan following the
principles of lex loci celebrationis & lex contractus.
The RTC denied the motion to dismiss. The CA ruled hat
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. It held that
the RTC was correct in applying the principle of lex loci
solutionis.
ISSUE:
Whether or not the subject matter jurisdiction of Philippine
courts in civil cases for specific performance & 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.
HELD:
NO. In the judicial resolution of conflicts problems, 3
consecutive phases are involved: jurisdiction, choice of
law, and recognition and enforcement of judgments.
Jurisdiction & choice of law are 2 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 w/c 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.
In this case, only the 1st phase is at issue—jurisdiction.
Jurisdiction, however, has various aspects. For a court to
validly exercise its power to adjudicate a controversy, it
must have jurisdiction over the plaintiff/petitioner, over the
defendant/respondent, over the subject matter, over the
issues of the case and, in cases involving property, over
the res or the thing w/c is the subject of the litigation. In
assailing the trial court's jurisdiction herein, Nippon is
actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding
is conferred by the sovereign authority w/c establishes and
organizes the court. It is given only by law and in the
manner prescribed by law. 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. To succeed in its motion for the dismissal of an
action for lack of jurisdiction over the subject matter of the
claim, 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.
In the instant case, Nippon, in its MTD, does not claim that
the RTC is not properly vested by law w/ jurisdiction to
hear the subject controversy for a civil case for specific
performance & damages is one not capable of pecuniary
estimation & is properly cognizable by the RTC of Lipa
City. 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” or the law of the place where a contract is
made. The doctrine of lex contractus or lex loci
contractus means the “law of the place where a contract is
executed or to be performed.” It controls the nature,
construction, and validity of the contract and it may pertain
to the law voluntarily agreed upon by the parties or the law
intended by them either expressly or implicitly. 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. This rule takes into account several contacts and
evaluates them according to their relative importance with
respect to the particular issue to be resolved.
Since these 3 principles in conflict of laws make reference
to the law applicable to a dispute, they are rules proper for
the 2nd phase, the choice of law. They determine which
state's law is to be applied in resolving the substantive
issues of a conflicts problem. 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, Nippon’s 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, 1st there
should exist a conflict of laws situation requiring the
application of the conflict of laws rules. 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.
It should be noted that when a conflicts case, one involving
a foreign element, is brought before a court or
administrative agency, there are 3 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. The court’s 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.
Neither can the other ground raised, forum non
conveniens, be used to deprive the RTC of its jurisdiction.
1st, it is not a proper basis for a motion to dismiss because
Sec. 1, Rule 16 of the Rules of Court does not include it as
a ground. 2nd, 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 RTC. In this case,
the RTC decided to assume jurisdiction. 3rd, 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.
RAYTHEON INTERNATIONAL VS ROUZIE
FACTS
Brand Marine Services, Inc. (BMSI), a corporation duly
organized & existing under the laws of Connecticut,
&Stockton Rouzie, Jr., an American citizen, entered into a
contract
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.
Rouzie secured a service contract w/ the Rep. of Phil. on
behalf of BMSI for the dredging of rivers affected by the
Mt.Pinatubo eruption & mudflows.
Rouzie filed before the NLRC a suit against BMSI and Rust
International (Rust) for alleged nonpayment
of commissions, illegal termination, & breach of
employment contract.
The Labor Arbiter ordered BMSI & Rust to pay Rouzie’s
money claims.
Upon appeal, the NLRC reversed & dismissed Rouzie’s
complaint on the ground of lack of jurisdiction.
Rouzie filed an action for damages before the RTC of La
Union (where he was a resident) against Raytheon
International. He reiterated that he was not paid the
commissions due him from the Pinatubo dredging project
w/c he secured on behalf of BMSI. The complaint also
averred that BMSI, RUST and Raytheon had combined &
functioned as 1 company.
RAYTHEON SOUGHT THE DISMISSAL OF THE
COMPLAINT ON THE GROUNDS OF FAILURE TO
STATE ACAUSE OF ACTION & FORUM NON
CONVENIENS & PRAYED FOR DAMAGES BY WAY OF
COMPULSORY
COUNTERCLAIM. THE RTC DENIED RAYTHEON’S
MOTION. THE CA AFFIRMED.
Raytheon’s contention: The written contract between
Rouzie & 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 that the parties &
witnesses involved are American corporations & citizens &
the evidence to be presented is located outside the
Philippines,that renders our local courts inconvenient
forums. The foreign elements of the dispute necessitate
the immediate application of the doctrine of forum non
conveniens.
ISSUES
(a) W/N the RTC had jurisdiction.(b) W/N the complaint
should be dismissed on the ground of forum non
conveniens.
RULING
(a) YES.
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.
Jurisdiction over the nature and subject matter of an action
is conferred by the Constitution and the law & by the
material allegations in the complaint, irrespective of w/n
the plaintiff is entitled to recover all or some of the claims
or reliefs sought therein. The case file was an action for
damages arising from an alleged breach of contract.
Undoubtedly, the nature of the action and the amount of
damages prayed are w/in the jurisdiction of the RTC.
 As regards jurisdiction over the parties, the RTC
acquired jurisdiction over Rouzi upon the filing of the
complaint. On the other hand, jurisdiction over the person
of Raytheon was acquired by its voluntary appearance in
court.
That THE SUBJECT CONTRACT INCLUDED A
STIPULATION THAT THE SAME SHALL BE GOVERNED
BYTHE LAWS OF THE STATE OF CONNECTICUT
DOES NOT SUGGEST THAT THE PHILIPPINE
COURTS,
OR ANY OTHER FOREIGN TRIBUNAL FOR THAT MAT
TER, ARE PRECLUDED FROM HEARING THE CIVIL A
CTION.
JURISDICTION & CHOICE OF LAW ARE 2 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 be
come relevant only when the substantive issues of the
instant case develop, that is, after hearing on the merits
proceeds before the trial court.
(b) NO.
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.
Raytheon’s averments of the foreign elements are not
sufficient to oust the RTC of its jurisdiction over the case
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 w/c 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.
Continental Micronesia v. Basso
Facts:
Petitioner Continental Micronesia is a foreign corporation
organized and existing under the laws of and domiciled in
the United States of America. It is licensed to do business
in the Philippines. Respondent, a US citizen residing in the
Philippines, accepted an offer to be a General Manager
position by Mr. Braden, Managing Director-Asia of
Continental Airlines. On November 7, 1992, CMI took over
the Philippine operations of Continental, with respondent
retaining his position as General Manager. Thereafter,
respondent received a letter from Mr. Schulz, who was
then CMI’s Vice President of Marketing and Sales,
informing him that he has agreed to work in CMI as a
consultant on an “as needed basis.” Respondent wrote a
counter-proposal that was rejected by CMI.
Respondent then filed a complaint for illegal dismissal
against the petitioner corporation. Alleging the presence of
foreign elements, CMI filed a Motion to Dismiss on the
ground of lack of jurisdiction over the person of CMI and
the subject matter of the controversy.
The Labor Arbiter agreed with CMI that the employment
contract was executed in the US “since the letter-offer was
under the Texas letterhead and the acceptance of
Complainant was returned there.” Thus, applying the
doctrine of lex loci celebrationis, US laws apply. Also,
applying lex loci contractus, the Labor Arbiter ruled that the
parties did not intend to apply Philippine laws.
The NLRC ruled that the Labor Arbiter acquired jurisdiction
over the case when CMI voluntarily submitted to his
office’s jurisdiction by presenting evidence, advancing
arguments in support of the legality of its acts, and praying
for reliefs on the merits of the case.
The Court of Appeals ruled that the Labor Arbiter and the
NLRC had jurisdiction over the subject matter of the case
and over the parties.
Issue:
Whether labor tribunals have jurisdiction over the case.
Held:
Yes. The Court ruled that the labor tribunals had
jurisdiction over the parties and the subject matter of the
case. The employment contract of Basso was replete with
references to US laws, and that it originated from and was
returned to the US, do not automatically preclude our labor
tribunals from exercising jurisdiction to hear and try this
case.
On the other hand, jurisdiction over the person of CMI was
acquired through the coercive process of service of
summons. CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and
participated in the proceedings before the courts. Though
a foreign corporation, CMI is licensed to do business in the
Philippines and has a local business address here. The
purpose of the law in requiring that foreign corporations
doing business in the country be licensed to do so, is to
subject the foreign corporations to the jurisdiction of our
courts.
Where the facts establish the existence of foreign
elements, the case presents a conflicts-of-laws issue.
Under the doctrine of forum non conveniens, a Philippine
court in a conflict-of-laws case may assume jurisdiction 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. All these
requisites are present here.
SAUDI ARABIAN AIRLINES v. CA
FACTS
Saudia hired Milagros Morada as a flight Attendant for its
airlines based in Jeddah, Saudi Arabia. While on a lay-
over in Jakarta, Morada went to a disco dance w/ fellow
crew members Thamer & Allah, 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 the room, Allah left, and
that’s when Thamer attempted to rape Morada.
Fortunately, a roomboy & several security personnel heard
her cries for help & rescued her. The Indonesian police
came & arrested Thamer & Allah.
Saudia officials interrogated Morada about the Jakarta
incident. They tried to pressure her in making a statement
to drop the case against Thamer & Allah, but Morada
refused to cooperate. Indonesian authorities agreed to
deport Thamer & Allah after 2 weeks of detention, & they
were again employed by Saudia.
1 ½ years later, in Riyadh, a few minutes before the
departure of her flight to Manila, Morada was not allowed
to board the plane & instead ordered to take a later flight
to Jeddah to see Mr. Miniewy, the Chief Legal Officer of
Saudia. When she did, she was brought to a Saudi court
where she was asked to sign a document written in Arabic.
They told her this was necessary to close the case against
Thamer & Allah. As it turned out, Morada signed a notice
to her to appear before the court. Morada returned to
Manila.
Later on, Morada was brought to the same Saudi court, &
she was informed that the investigation was merely
routinary & posed no danger to her. A Saudi judge
interrogated her through an interpreter about the Jakarta
incident. When her plane was about to take off, a Saudia
officer told her that the airline had forbidden her to take
flight. She was escorted to the same court where the judge
rendered a decision sentencing her to 5 months
imprisonment & to 286 lashes. It was then that she realized
that the Saudi court tried her, together w/ Thamer & Allah,
for the Jakarta incident. The court found Morada guilty of
(1) adultery,
(2) going to a disco, dancing & listening to the music in
violation of Islamic laws
(3) socializing w/ the male crew, in contravention of Islamic
tradition
Because she was wrongfully convicted, the Prince of
Makkah dismissed the case against her & allowed her to
leave Saudi Arabia. She was terminated from the service
by Saudia, w/o her being informed of the cause. Morada
filed a Complaint for Damages against Saudia. Saudia
filed a MTD.
Saudia’s contention: The trial court has no jurisdiction to
try the case. Morada’s claim for alleged abuse of rights
occurred in Saudi. The existence of a foreign element
qualifies the instant case for the application of the law of
Saudi, by virtue of the lex loci delicti commissi rule.
Morada’s contention: Since her complaint is based on Arts.
19 and 21 of the NCC, then the instant case is properly a
matter of domestic law.
ISSUE
(a) W/N the instant case is a matter of domestic law.
(b) W/N Philippine courts have jurisdiction to hear & try the
case.
(c) W/N Philippine law should govern.
RULING
(a) NO. A factual situation that cuts across territorial lines
& is affected by the diverse laws of 2 or more states is said
to contain a “foreign element.” In the instant case, the
foreign element consisted in the fact that Morada is a
resident Philippine national, & that Saudia is a resident
foreign corporation. Also, by virtue of the employment of
Morada w/ Saudia as a flight stewardess, events did
transpire during her many occasions of travel across
national borders, particularly from Manila to Jeddah & vice
versa, that caused a “conflicts” situation to arise.
(b) YES. The RTC of QC possesses jurisdiction over the
subject matter of the suit. Pragmatic considerations,
including the convenience of the parties, also weigh
heavily in favor the RTC of QC assuming jurisdiction.
Paramount is the private interest of the litigant.
Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages & obstacles to a fair trial are
equally important. Saudia may not, by choice of an
inconvenient form, vex, harass or oppress Morada, i.e.
inflicting upon him needless expense or disturbance. But
unless the balance is strongly in favor of the defendant,
the plaintiff’s choice of forum should rarely be disturbed.
Weighing the relative claims of the parties, QC RTC found
it best to hear the case in the Philippines. Had it refused to
take cognizance of the case, it would be forcing Morada to
seek remedial action elsewhere, i.e. in Saudi 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 Morada should be
upheld.
Similarly, the QC RTC also possesses jurisdiction over the
persons of the parties. By filing her Complaint w/ QC RTC,
Morada has voluntary submitted herself to the jurisdiction
of the court. The records show that Saudia filed several
motions praying for the dismissal of Morada’s Complaint.
Saudia also filed an Answer In Ex Abundante Cautelam.
What is very patent and explicit from the motions filed, is
that Saudia prayed for other reliefs under the premises.
Undeniably, Saudia has effectively submitted to QC RTC’s
jurisdiction by praying for the dismissal of the Complaint
on grounds other than lack of jurisdiction.
(c) YES. Considering that the complaint in the court a quo
is one involving torts, the “connecting factor” or “point of
contact” could be the place where the tortuous conduct or
lex loci actus occurred. And applying the torts principle in
a conflicts case, we find that the Philippines could be said
as situs of the tort (the place where the alleged tortuous
conduct took place). This is because it is in the Philippines
where Saudia allegedly deceived Morada, a Filipina
residing & working here. That certain acts or parts of the
injury allegedly occurred in another country is of no
moment. What is important is the place where the overall
harm or the fatality of the alleged injury to the person,
reputation, social standing & human rights of complainant,
had lodged, according to the Morada.
Also, 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.
There is basis for the claim that over-all injury occurred
and lodged in the Philippines. There is likewise no
question that Morada is a resident Filipina national,
working w/ Saudia, 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.
Pantaleon vs Asuncion
Said section 21, however, is unqualified. It prescribes the
"proof of service by publication", regardless of whether the
defendant is a resident of the Philippines or not. Section
16 must be read in relation to section 21, which
complements it. Then, too, we conceive of no reason, and
plaintiff has suggested none, why copy of the summons
and of the order for its publication should be mailed to non-
resident defendants, but not to resident defendants. We
can not even say that defendant herein, who, according to
the return of the Sheriff of Nueva Ecija, was reportedly
residing in Rizal — where he, in fact (San Francisco del
Monte and Quezon City used to be part of Rizal), was
residing — could reasonably be expected to read the
summons published in a newspaper said to be a general
circulation in Nueva Ecija.
Considering that strict compliance with the terms of the
statute is necessary to confer jurisdiction through service
by publication (Bachrach Garage and Taxi
Co. vs. Hotchkiss and Co., 34 Phil., 506; Banco Español-
Filipino vs. Palanca, 37 Phil., 921; Mills vs. Smiley, 9
Idaho 317, 325, 76 Pac. 785; Charles vs. Marrow, 99 Mo.
638; Sunderland, Cases on Procedure, Annotated, Trial
Practice, p. 51), the conclusion is inescapable that the
lower court had no authority whatsoever to issue the order
of July 12, 1955, declaring the defendant in default and to
render the decision of September 8, 1955, and that both
are null and void ad initio.
Apart from the foregoing, it is a well-settled principle of
Constitutional Law that, in an action strictly in personam,
like the one at bar, personal service of
summons, within the forum, is essential to the acquisition
of jurisdiction over the person of the defendant, who does
not voluntarily submit himself to the authority of the court.
In other words, summons by publication cannot —
consistently with the due process clause in the Bill of
Rights — confer upon the court jurisdiction over said
defendant.
Perkins vs. Dizon
When the defendant is a non-resident and refuses to
appear voluntary, the court cannot acquire jurisdiction over
his person even if the summons be served by publication,
for he is beyond the reach of judicial process.
The general rule, therefore, is that a suit against a non-
resident cannot be entertained by a Philippine court.
Where, however, the action is in rem or quasi in rem in
connection with property located in the Philippines, the
court acquires jurisdiction over the res, and its jurisdiction
over the person of the non-resident is non-essential.
In an action in rem or quasi in rem against a non-resident
defendant, jurisdiction over his person is non-essential,
and if the law requires in such case that the summons
upon the defendant be served by publication, it is merely
to satisfy the constitutional requirement of due process. If
any be said, in this connection, that "may reported cases
can be cited in which it is assumed that the question of the
sufficiency of publication or notice in the case of this kind
is a question affecting the jurisdiction of the court, and the
court is sometimes said to acquire jurisdiction by virtue of
the publication.
Republic vs Marcos
Every sovereign state is bound to respect the
independence of every other sovereign state, and the
courts of one country will not sit in judgment on the acts of
the government of another, done within its own territory.
Redress of grievances by reason of such acts must be
obtained through the means open to be availed of by
sovereign powers as between themselves.
The act of state doctrine "expresses the strong sense of
the Judicial Branch that its engagement in the task of
passing on the validity of foreign acts of state may hinder
rather than further this country's pursuit of goals both for
itself and for the community of nations as a whole in the
international sphere.
Supreme Court has noted that for doctrine to apply, the
acts in question must have involved public acts of the
sovereign. The Court stated that in each of its act of state
decisions, the facts were sufficient to demonstrate that the
conduct in question was the public act of those with
authority to exercise sovereign powers and was entitled to
respect in our courts. [H]ere, no statute, decree, order, or
resolution of the Cuban Government itself was offered in
evidence indicating that Cuba had repudiated its
obligations in general or any class thereof or that it had as
a sovereign matter determined to confiscate the amounts
due three foreign importers.
Marcos and his agents no doubt exercised broad power,
especially after the imposition of martial law in 1972. But
the appropriate inquiry is not to invoke the talismanic label
"dictator." The district court should determine which of the
challenged acts were official and which were not. Only by
doing so can the court determine the extent to which the
act of state doctrine may apply.
US vs. Noriega
In order to assert head of state immunity, a government
official must be recognized as a head of state.
PCGG vs Sandiganbayan
The Supreme Court ruled that Section 4(b), Executive
Order No. 1 does not bestow on the PCGG or its staff any
right or privilege superior to that of other government
officials or place the PCGG or its staff on a plane higher
than that of any other official of the Republic.
Accordingly, petitioner cannot shield Lourdes Magno, its
Records Officer, from complying with the subpoena by
invoking the provision of Section 4(b) of Executive Order
No. 1.
Communication Materials vs CA
"No foreign corporation, transacting business in the
Philippines without a license, or its successors or assigns,
shall be permitted to maintain or intervene in any action,
suit or proceeding in any court or administrative agency of
the Philippines; but such corporation may be sued or
proceeded against before Philippine Courts or
administrative tribunals on any valid cause of action
recognized under Philippine laws.
In a long line of decisions, this Court has not altogether
prohibited foreign corporation not licensed to do business
in the Philippines from suing or maintaining an action in
Philippine Courts. What it seeks to prevent is a foreign
corporation doing business in the Philippines without a
licensed from gaining access to Philippine Courts.
The object is not to prevent the foreign corporation from
performing single acts, but to prevent it from acquiring a
domicile for the purpose of business without taking steps
necessary to render it amenable to suit in the local courts.
The true test, however, seems to be whether the foreign
corporation is continuing the body or substance of the
business or enterprise for which it was organized
Where a single act or transaction, however, is not merely
incidental or casual but indicates the foreign corporation's
intention to do other business in the Philippines, said
single act or transaction constitutes "doing" or "engaging
in" or "transacting" business in the Philippines.
A foreign corporation doing business in the Philippines
may sue in Philippine Courts although not authorized to do
business here against a Philippine citizen or entity who
had contracted with and benefited by said corporation.
A foreign corporation doing business in the Philippines
may sue in Philippine Courts although not authorized to do
business here against a Philippine citizen or entity who
had contracted with and benefited by said corporation.
Manila Hotel Corp vs NLRC
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.
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. 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
Pacific Consultants vs Schonfeld
There being no evidence that petitioner PPI is the
employer of respondent, the Labor Arbiter has no
jurisdiction over respondent’s complaint.
Venue stipulations in a contract do not, as a rule,
supersede the general rule set forth in Rule 4 of the
Revised Rules of Court in the absence of qualifying or
restrictive words. They should be considered merely as an
agreement or additional forum, not as limiting venue to the
specified place. They are not exclusive but, rather
permissive. If the intention of the parties were to restrict
venue, there must be accompanying language clearly and
categorically expressing their purpose and design that
actions between them be litigated only at the place named
by them.
In the instant case, no restrictive words like "only," "solely,"
"exclusively in this court," "in no other court save —,"
"particularly," "nowhere else but/except —," or words of
equal import were stated in the contract.33 It cannot be said
that the court of arbitration in London is an exclusive venue
to bring forth any complaint arising out of the employment
contract.
Cadalin vs POEA
As a general rule, a foreign procedural law will not be
applied in the forum. Procedural matters, such as service
of process, joinder of actions, period and requisites for
appeal, and so forth, are governed by the laws of the
forum. This is true even if the action is based upon a
foreign substantive law.
A law on prescription of actions is sui generis in Conflict of
Laws in the sense that it may be viewed either as
procedural or substantive, depending on the
characterization given such a law.
However, the characterization of a statute into a
procedural or substantive law becomes irrelevant when
the country of the forum has a "borrowing statute." Said
statute has the practical effect of treating the foreign
statute of limitation as one of substance (Goodrich,
Conflict of Laws 152-153 [1938]). A "borrowing statute"
directs the state of the forum to apply the foreign statute of
limitations to the pending claims based on a foreign law
(Siegel, Conflicts, 183 [1975]). While there are several
kinds of "borrowing statutes," one form provides that an
action barred by the laws of the place where it accrued,
will not be enforced in the forum even though the local
statute has not run against it (Goodrich and Scoles,
Conflict of Laws, 152-153 [1938]). Section 48 of our Code
of Civil Procedure is of this kind.
The courts of the forum will not enforce any foreign claim
obnoxious to the forum's public policy.
Orion Savings vs Suzuki
Thus, all matters concerning the titleand disposition ofreal
property are determined by what is known as the lex loci
rei sitae, which can alone prescribe the mode by which a
title canpass from one person to another, or by which an
interest therein can be gained or lost.23 This general
principle includes all rules governing the descent,
alienation and transfer of immovable property and the
validity, effect and construction of wills and other
conveyances.24
This principle even governs the capacity of the person
making a deed relating to immovable property, no matter
what its nature may be. Thus, an instrument will be
ineffective to transfer title to land if the person making it is
incapacitated by the lex loci rei sitae, even though under
the law of his domicile and by the law of the place where
the instrument is actually made, his capacity is
undoubted.25
On the other hand, property relations between spouses
are governed principally by the national law of the
spouses.26 However, the party invoking the application of
a foreign law has the burden of proving the foreign law.
The foreign law is a question of fact to be properly pleaded
and proved as the judge cannot take judicial notice of a
foreign law.27 He is presumed to know only domestic or the
law of the forum.28
Public instruments are evidence of the facts that gave rise
to their execution and are to be considered as containing
all the terms of the agreement.49 While a notarized
document enjoys this presumption, "the fact that a deed is
notarized is not a guarantee of the validity of its
contents."50 The presumption of regularity of notarized
documents is not absolute and may be rebutted by clear
and convincing evidence to the contrary.51
In the present case, the presumption cannot apply
because the regularity in the execution of the Dacion en
Pago and the loan documents was challenged in the
proceedings below where their prima facievalidity was
overthrown by the highly questionable circumstances
surrounding their execution.
Willamette vs AH Muzzal
In the third and fourth assignments of error the appellant
argues that since the law of California, as to the liability of
stockholders of a corporation, is different from and
inconsistent with the Philippine Corporation Law the courts
here should not impose liability provided in that law upon
a resident of these Islands who is a stockholder of a
California corporation. The herein defendant is chargeable
with notice of the law of California as to the liability of
stockholders for debt of a corporation proportionate to their
stock holdings, in view of the fact that he was one of the
incorporators of the Meyer-Muzzal Company in the year
1924 and was still a stockholder in that company in the
year 1928. Exhibit 10 of the plaintiff is a certified company
of the articles of incorporation of Meyer-Muzzal Company
in which it appears that that company was incorporated on
August 22, 1924, and that the incorporators were A.H.
Muzzal, Leo W. Meyer and James Rolph, Jr., "all of whom
are residents and citizens of the State of California." The
defendant cannot now escape liability by alleging that the
California law is unjust and different from the inconsistent
with the Philippine Corporation Law.
"The foreign law is a matter of fact ... You ask the witness
what the law is; he may from his recollection, or on
producing and referring to books, say what it is." (Lord
Campbell concurring in an opinion of Lord Chief Justice
Denman in a well known English case where a witness
was called upon to prove the Roman laws of marriage and
was permitted to testify, though he referred to a book
containing the decrees of the Council of Trent as
controlling, Jones on Evidence, Second Edition, Volume 4,
pages 3148-3152.) Aside from the testimony of Attorney
Bolton Ragland's Annotated Civil Code of California was
presented as evidence. This book contains that State's
Civil Code as adopted March 21, 1872, with the
subsequent official statute amendments to and including
the year 1929.
CIR vs Fisher
If we adopt the view of Manresa, the law determinative of
the property relation of the Stevensons, married in 1909,
would be the English law even if the marriage was
celebrated in the Philippines, both of them being
foreigners. But, as correctly observed by the Tax Court,
the pertinent English law that allegedly vests in the
decedent husband full ownership of the properties
acquired during the marriage has not been proven by
petitioner. Except for a mere allegation in his answer,
which is not sufficient, the record is bereft of any evidence
as to what English law says on the matter. In the absence
of proof, the Court is justified, therefore, in indulging in
what Wharton calls "processual presumption," in
presuming that the law of England on this matter is the
same as our law.
Pardo vs Republic
We realize that a copy of a foreign law certified only by the
local consul of the applicant's country does not conform to
the requirement concerning the certification and
authentication of such law (sec. 41, Rule 123). But the
case at bar and the cases cited therein as precedents are
not governed by the Rules of the Court. Rule 1342, entitled
"Applicability of the Rules," provides that "These rules shall
not apply to land registration, cadastral and election cases,
naturalization and insolvency proceedings, and other
cases not herein provided for, except by analogy or in a
suppletory character and whenever practicable and
convenience. By reason of this provision, literal adherence
to the Rules of Court, which include rules of evidence, is
not obligatory in a proceeding like that under the Philippine
law is judicial in character, and strict compliance with the
process prescribed by statute, if there were one, would be
essential, yet when, as here, no specific procedure is
indicated in the premises, it is only necessary that the
merits of the petition be passed on and a decision reached
on a far consideration of the evidence on satisfactory
proof. Accordingly, evidence of the law of a foreign country
or reciprocity regarding the acquisition of citizenship,
although not meeting the prescribed rule of practice by
section 41 of Rule 123, may be allowed and used as basis
for a favorable action if, in the light of all circumstances,
the court is satisfied of the authenticity of the written proof
offered.