[G.R. No. 122191.

October 8, 1998]
SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF APPEALS, MILAGROS P.
MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of
Branch 89, Regional Trial Court of Quezon City, respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to
annul and set aside the Resolution[1] dated September 27, 1995 and the
Decision[2] dated April 10, 1996 of the Court of Appeals[3] in CA-G.R. SP No.
36533,[4] and the Orders[5] dated August 29, 1994[6] and February 2, 1995[7]
that were issued by the trial court in Civil Case No. Q-93-18394.[8]
The pertinent antecedent facts which gave rise to the instant petition, as stated
in the questioned Decision[9], are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for
its airlines based in Jeddah, Saudi Arabia. x x x
On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a
disco dance with fellow crew members Thamer Al-Gazzawi and Allah AlGazzawi, both Saudi nationals. Because it was almost morning when they
returned to their hotels, they agreed to have breakfast together at the room of
Thamer. When they were in te (sic) room, Allah left on some pretext. Shortly
after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and
several security personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as
an accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA officials
interrogated her about the Jakarta incident. They then requested her to go back
to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA
Legal Officer Sirah Akkad and base manager Baharini negotiated with the police
for the immediate release of the detained crew members but did not succeed
because plaintiff refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to understand the local
dialect. She also declined to sign a blank paper and a document written in the
local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but
barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and Allah
after two weeks of detention. Eventually, they were again put in service by
defendant SAUDI (sic). In September 1990, defendant SAUDIA transferred
plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta incident was
already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief
Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her passport and
questioned her about the Jakarta incident. Miniewy simply stood by as the
police put pressure on her to make a statement dropping the case against

Thamer and Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of Jeddah.
One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few
minutes before the departure of her flight to Manila, plaintiff was not allowed to
board the plane and instead ordered to take a later flight to Jeddah to see Mr.
Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of
the SAUDIA office brought her to a Saudi court where she was asked to sign a
document written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a notice to her
to appear before the court on June 27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah
once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff
did so after receiving assurance from SAUDIAs Manila manager, Aslam Saleemi,
that the investigation was routinary and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on
June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge
interrogated plaintiff through an interpreter about the Jakarta incident. After
one hour of interrogation, they let her go. At the airport, however, just as her
plane was about to take off, a SAUDIA officer told her that the airline had
forbidden her to take flight. At the Inflight Service Office where she was told to
go, the secretary of Mr. Yahya Saddick took away her passport and told her to
remain in Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court
where the judge, to her astonishment and shock, rendered a decision,
translated to her in English, sentencing her to five months imprisonment and to
286 lashes. Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta. The court found
plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the
music in violation of Islamic laws; and (3) socializing with the male crew, in
contravention of Islamic tradition.[10]
Facing conviction, private respondent sought the help of her employer,
petitioner SAUDIA. Unfortunately, she was denied any assistance. She then
asked the Philippine Embassy in Jeddah to help her while her case is on appeal.
Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA,
while Thamer and Allah continued to serve in the international flights.[11]
Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila,[12] she was terminated from the service by SAUDIA, without her being
informed of the cause.
On November 23, 1993, Morada filed a Complaint[13] for damages against
SAUDIA, and Khaled Al-Balawi (Al- Balawi), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss[14] which
raised the following grounds, to wit: (1) that the Complaint states no cause of
action against Saudia; (2) that defendant Al-Balawi is not a real party in
interest; (3) that the claim or demand set forth in the Complaint has been

waived, abandoned or otherwise extinguished; and (4) that the trial court has
no jurisdiction to try the case.

Judge from further conducting any proceeding, unless otherwise directed, in

the interim.

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss)[15]
Saudia filed a reply[16] thereto on March 3, 1994.

In another Resolution[28] promulgated on September 27, 1995, now assailed,

the appellate court denied SAUDIAs Petition for the Issuance of a Writ of
Preliminary Injunction dated February 18, 1995, to wit:

On June 23, 1994, Morada filed an Amended Complaint[17] wherein Al-Balawi

was dropped as party defendant. On August 11, 1994, Saudia filed its
Manifestation and Motion to Dismiss Amended Complaint[18].
The trial court issued an Order[19] dated August 29, 1994 denying the Motion
to Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judge[20] denying the Motion to Dismiss,
SAUDIA filed on September 20, 1994, its Motion for Reconsideration[21] of the
Order dated August 29, 1994. It alleged that the trial court has no jurisdiction
to hear and try the case on the basis of Article 21 of the Civil Code, since the
proper law applicable is the law of the Kingdom of Saudi Arabia. On October
14, 1994, Morada filed her Opposition[22] (To Defendants Motion for
Reconsideration).
In the Reply[23] filed with the trial court on October 24, 1994, SAUDIA alleged
that since its Motion for Reconsideration raised lack of jurisdiction as its cause
of action, the Omnibus Motion Rule does not apply, even if that ground is raised
for the first time on appeal. Additionally, SAUDIA alleged that the Philippines
does not have any substantial interest in the prosecution of the instant case,
and hence, without jurisdiction to adjudicate the same.
Respondent Judge subsequently issued another Order[24] dated February 2,
1995, denying SAUDIAs Motion for Reconsideration. The pertinent portion of
the assailed Order reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines
filed, thru counsel, on September 20, 1994, and the Opposition thereto of the
plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith
of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994,
considering that a perusal of the plaintiffs Amended Complaint, which is one
for the recovery of actual, moral and exemplary damages plus attorneys fees,
upon the basis of the applicable Philippine law, Article 21 of the New Civil Code
of the Philippines, is, clearly, within the jurisdiction of this Court as regards the
subject matter, and there being nothing new of substance which might cause
the reversal or modification of the order sought to be reconsidered, the motion
for reconsideration of the defendant, is DENIED.
SO ORDERED.[25]
Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or
Temporary Restraining Order[26] with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with Temporary
Restraining Order[27] dated February 23, 1995, prohibiting the respondent

The Petition for the Issuance of a Writ of Preliminary Injunction is hereby

DENIED, after considering the Answer, with Prayer to Deny Writ of Preliminary
Injunction (Rollo, p. 135) the Reply and Rejoinder, it appearing that herein
petitioner is not clearly entitled thereto (Unciano Paramedical College, et. Al., v.
Court of Appeals, et. Al., 100335, April 7, 1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the instant
Petition[29] for Review with Prayer for Temporary Restraining Order dated
October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of
Appeals rendered the Decision[30] dated April 10, 1996, now also assailed. It
ruled that the Philippines is an appropriate forum considering that the
Amended Complaints basis for recovery of damages is Article 21 of the Civil
Code, and thus, clearly within the jurisdiction of respondent Court. It further
held that certiorari is not the proper remedy in a denial of a Motion to Dismiss,
inasmuch as the petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer
for Temporary Restraining Order[31] dated April 30, 1996, given due course by
this Court. After both parties submitted their Memoranda,[32] the instant case
is now deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394
based on Article 21 of the New Civil Code since the proper law applicable is the
law of the Kingdom of Saudi Arabia inasmuch as this case involves what is
known in private international law as a conflicts problem. Otherwise, the
Republic of the Philippines will sit in judgment of the acts done by another
sovereign state which is abhorred.
II.
Leave of court before filing a supplemental pleading is not a jurisdictional
requirement. Besides, the matter as to absence of leave of court is now moot
and academic when this Honorable Court required the respondents to
comment on petitioners April 30, 1996 Supplemental Petition For Review With
Prayer For A Temporary Restraining Order Within Ten (10) Days From Notice
Thereof. Further, the Revised Rules of Court should be construed with
liberality pursuant to Section 2, Rule 1 thereof.
III.
Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP
NO. 36533 entitled Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al. and

filed its April 30, 1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15day reglementary period as provided for under Section 1, Rule 45 of the
Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has not
yet become final and executory and this Honorable Court can take cognizance
of this case.[33]
From the foregoing factual and procedural antecedents, the following issues
emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE
REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND
TRY CIVIL CASE NO. Q-93-18394 ENTITLED MILAGROS P. MORADA V. SAUDI
ARABIAN AIRLINES.
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THE
CASE PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled
at the outset. It maintains that private respondents claim for alleged abuse of
rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a
foreign element qualifies the instant case for the application of the law of the
Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule.[34]
On the other hand, private respondent contends that since her Amended
Complaint is based on Articles 19[35] and 21[36] of the Civil Code, then the
instant case is properly a matter of domestic law.[37]
Under the factual antecedents obtaining in this case, there is no dispute that the
interplay of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint[38] dated June 23,
1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines
corporation doing business in the Philippines. It may be served with summons
and other court processes at Travel Wide Associated Sales (Phils.), Inc., 3rd
Floor, Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro Manila.
xxx

xxx

xxx

6. Plaintiff learned that, through the intercession of the Saudi Arabian

government, the Indonesian authorities agreed to deport Thamer and Allah
after two weeks of detention. Eventually, they were again put in service by
defendant SAUDIA. In September 1990, defendant SAUDIA transferred plaintiff
to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta incident
was already behind her, her superiors requested her to see MR. Ali Meniewy,
Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her passport and
questioned her about the Jakarta incident. Miniewy simply stood by as the

police put pressure on her to make a statement dropping the case against
Thamer and Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a
few minutes before the departure of her flight to Manila, plaintiff was not
allowed to board the plane and instead ordered to take a later flight to Jeddah
to see Mr. Meniewy, the Chief Legal Officer of SAUDIA. When she did, a certain
Khalid of the SAUDIA office brought her to a Saudi court where she was asked
to sign a document written in Arabic. They told her that this was necessary to
close the case against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993. Plaintiff then
returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to
Jeddah once again and see Miniewy on June 27, 1993 for further investigation.
Plaintiff did so after receiving assurance from SAUDIAs Manila manager, Aslam
Saleemi, that the investigation was routinary and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court
on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge
interrogated plaintiff through an interpreter about the Jakarta incident. After
one hour of interrogation, they let her go. At the airport, however, just as her
plane was about to take off, a SAUDIA officer told her that the airline had
forbidden her to take that flight. At the Inflight Service Office where she was
told to go, the secretary of Mr. Yahya Saddick took away her passport and told
her to remain in Jeddah, at the crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same
court where the judge, to her astonishment and shock, rendered a decision,
translated to her in English, sentencing her to five months imprisonment and to
286 lashes. Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta. The court found
plaintiff guilty of (1) adultery; (2) going to a disco, dancing, and listening to the
music in violation of Islamic laws; (3) socializing with the male crew, in
contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the
help of the Philippine Embassy in Jeddah. The latter helped her pursue an
appeal from the decision of the court. To pay for her upkeep, she worked on
the domestic flights of defendant SAUDIA while, ironically, Thamer and Allah
freely served the international flights.[39]
Where the factual antecedents satisfactorily establish the existence of a foreign
element, we agree with petitioner that the problem herein could present a
conflicts case.
A factual situation that cuts across territorial lines and is affected by the diverse
laws of two or more states is said to contain a foreign element. The presence
of a foreign element is inevitable since social and economic affairs of
individuals and associations are rarely confined to the geographic limits of their
birth or conception.[40]

The forms in which this foreign element may appear are many.[41] The foreign
element may simply consist in the fact that one of the parties to a contract is an
alien or has a foreign domicile, or that a contract between nationals of one State
involves properties situated in another State. In other cases, the foreign
element may assume a complex form.[42]

Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the

Judiciary Reorganization Act of 1980, is hereby amended to read as follows:

In the instant case, the foreign element consisted in the fact that private
respondent Morada is a resident Philippine national, and that petitioner
SAUDIA is a resident foreign corporation. Also, by virtue of the employment of
Morada with the petitioner Saudia as a flight stewardess, events did transpire
during her many occasions of travel across national borders, particularly from
Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a
conflicts situation to arise.

xxx

We thus find private respondents assertion that the case is purely domestic,
imprecise. A conflicts problem presents itself here, and the question of
jurisdiction[43] confronts the court a quo.
After a careful study of the private respondents Amended Complaint,[44] and
the Comment thereon, we note that she aptly predicated her cause of action on
Articles 19 and 21 of the New Civil Code.

SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise
exclusive jurisdiction:
xxx

xxx

(8) In all other cases in which demand, exclusive of interest, damages of

whatever kind, attorneys fees, litigation expenses, and costs or the value of the
property in controversy exceeds One hundred thousand pesos (P100,000.00)
or, in such other cases in Metro Manila, where the demand, exclusive of the
above-mentioned items exceeds Two hundred Thousand pesos (P200,000.00).
(Emphasis ours)
xxx

xxx

xxx

And following Section 2 (b), Rule 4 of the Revised Rules of Courtthe venue,
Quezon City, is appropriate:
SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]

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

(a) x x x

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

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

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

Pragmatic considerations, including the convenience of the parties, also weigh

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

Art. 21. Any person who willfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate the
latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals,[45] this Court
held that:
The aforecited provisions on human relations were intended to expand the
concept of torts in this jurisdiction by granting adequate legal remedy for the
untold number of moral wrongs which is impossible for human foresight to
specifically provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21 gives flesh to
its provisions. Thus, we agree with private respondents assertion that
violations of Articles 19 and 21 are actionable, with judicially enforceable
remedies in the municipal forum.
Based on the allegations[46] in the Amended Complaint, read in the light of the
Rules of Court on jurisdiction[47] we find that the Regional Trial Court (RTC) of
Quezon City possesses jurisdiction over the subject matter of the suit.[48] Its
authority to try and hear the case is provided for under Section 1 of Republic
Act No. 7691, to wit:

xxx

xxx

Weighing the relative claims of the parties, the court a quo found it best to hear
the case in the Philippines. Had it refused to take cognizance of the case, it
would be forcing plaintiff (private respondent now) to seek remedial action
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains
substantial connections. That would have caused a fundamental unfairness to
her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of
the plaintiff (now private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the
parties herein. By filing her Complaint and Amended Complaint with the trial
court, private respondent has voluntary submitted herself to the jurisdiction of
the court.

The records show that petitioner SAUDIA has filed several motions[50] praying
for the dismissal of Moradas Amended Complaint. SAUDIA also filed an
Answer In Ex Abundante Cautelam dated February 20, 1995. What is very
patent and explicit from the motions filed, is that SAUDIA prayed for other
reliefs under the premises. Undeniably, petitioner SAUDIA has effectively
submitted to the trial courts jurisdiction by praying for the dismissal of the
Amended Complaint on grounds other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.:[51]
We observe that the motion to dismiss filed on April 14, 1962, aside from
disputing the lower courts jurisdiction over defendants person, prayed for
dismissal of the complaint on the ground that plaintiffs cause of action has
prescribed. By interposing such second ground in its motion to dismiss, Ker
and Co., Ltd. availed of an affirmative defense on the basis of which it prayed
the court to resolve controversy in its favor. For the court to validly decide the
said plea of defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction
upon the latters person, who, being the proponent of the affirmative defense,
should be deemed to have abandoned its special appearance and voluntarily
submitted itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that:
When the appearance is by motion for the purpose of objecting to the
jurisdiction of the court over the person, it must be for the sole and separate
purpose of objecting to the jurisdiction of the court. If his motion is for any
other purpose than to object to the jurisdiction of the court over his person, he
thereby submits himself to the jurisdiction of the court. A special appearance
by motion made for the purpose of objecting to the jurisdiction of the court
over the person will be held to be a general appearance, if the party in said
motion should, for example, ask for a dismissal of the action upon the further
ground that the court had no jurisdiction over the subject matter.[52]
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court
of Quezon City. Thus, we find that the trial court has jurisdiction over the case
and that its exercise thereof, justified.
As to the choice of applicable law, we note that choice-of-law problems seek to
answer two important questions: (1) What legal system should control a given
situation where some of the significant facts occurred in two or more states;
and (2) to what extent should the chosen legal system regulate the
situation.[53]
Several theories have been propounded in order to identify the legal system
that should ultimately control. Although ideally, all choice-of-law theories
should intrinsically advance both notions of justice and predictability, they do
not always do so. The forum is then faced with the problem of deciding which
of these two important values should be stressed.[54]
Before a choice can be made, it is necessary for us to determine under what
category a certain set of facts or rules fall. This process is known as
characterization, or the doctrine of qualification. It is the process of
deciding whether or not the facts relate to the kind of question specified in a

conflicts rule.[55] The purpose of characterization is to enable the forum to

select the proper law.[56]
Our starting point of analysis here is not a legal relation, but a factual situation,
event, or operative fact.[57] An essential element of conflict rules is the
indication of a test or connecting factor or point of contact. Choice-of-law
rules invariably consist of a factual relationship (such as property right,
contract claim) and a connecting factor or point of contact, such as the situs of
the res, the place of celebration, the place of performance, or the place of
wrongdoing.[58]
Note that one or more circumstances may be present to serve as the possible
test for the determination of the applicable law.[59] These test factors or
points of contact or connecting factors could be any of the following:
(1) The nationality of a person, his domicile, his residence, his place of
sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be
situated. In particular, the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the place
where a contract has been made, a marriage celebrated, a will signed or a tort
committed. The lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of
performance of contractual duties, or the place where a power of attorney is to
be exercised;
(6) the intention of the contracting parties as to the law that should govern
their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or
done. The lex forithe law of the forumis particularly important because, as
we have seen earlier, matters of procedure not going to the substance of the
claim involved are governed by it; and because the lex fori applies whenever
the content of the otherwise applicable foreign law is excluded from application
in a given case for the reason that it falls under one of the exceptions to the
applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of affreightment.[60]
(Underscoring ours.)
After a careful study of the pleadings on record, including allegations in the
Amended Complaint deemed submitted for purposes of the motion to dismiss,
we are convinced that there is reasonable basis for private respondents
assertion that although she was already working in Manila, petitioner brought
her to Jeddah on the pretense that she would merely testify in an investigation
of the charges she made against the two SAUDIA crew members for the attack

on her person while they were in Jakarta. As it turned out, she was the one
made to face trial for very serious charges, including adultery and violation of
Islamic laws and tradition.
There is likewise logical basis on record for the claim that the handing over or
turning over of the person of private respondent to Jeddah officials, petitioner
may have acted beyond its duties as employer. Petitioners purported act
contributed to and amplified or even proximately caused additional
humiliation, misery and suffering of private respondent. Petitioner thereby
allegedly facilitated the arrest, detention and prosecution of private respondent
under the guise of petitioners authority as employer, taking advantage of the
trust, confidence and faith she reposed upon it. As purportedly found by the
Prince of Makkah, the alleged conviction and imprisonment of private
respondent was wrongful. But these capped the injury or harm allegedly
inflicted upon her person and reputation, for which petitioner could be liable as
claimed, to provide compensation or redress for the wrongs done, once duly
proven.
Considering that the complaint in the court a quo is one involving torts, the
connecting factor or point of contact could be the place or places where the
tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort
(the place where the alleged tortious conduct took place). This is because it is
in the Philippines where petitioner allegedly deceived private respondent, a
Filipina residing and working here. According to her, she had honestly believed
that petitioner would, in the exercise of its rights and in the performance of its
duties, act with justice, give her her due and observe honesty and good faith.
Instead, petitioner failed to protect her, she claimed. That certain acts or parts
of the injury allegedly occurred in another country is of no moment. For in our
view what is important here is the place where the over-all harm or the fatality
of the alleged injury to the person, reputation, social standing and human rights
of complainant, had lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the Philippines as the
situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti
commissi, modern theories and rules on tort liability[61] have been advanced
to offer fresh judicial approaches to arrive at just results. In keeping abreast
with the modern theories on tort liability, we find here an occasion to apply the
State of the most significant relationship rule, which in our view should be
appropriate to apply now, given the factual context of this case.
In applying said principle to determine the State which has the most significant
relationship, the following contacts are to be taken into account and evaluated
according to their relative importance with respect to the particular issue: (a)
the place where the injury occurred; (b) the place where the conduct causing
the injury occurred; (c) the domicile, residence, nationality, place of
incorporation and place of business of the parties, and (d) the place where the
relationship, if any, between the parties is centered.[62]
As already discussed, there is basis for the claim that over-all injury occurred
and lodged in the Philippines. There is likewise no question that private
respondent is a resident Filipina national, working with petitioner, a resident

foreign corporation engaged here in the business of international air carriage.

Thus, the relationship between the parties was centered here, although it
should be stressed that this suit is not based on mere labor law violations.
From the record, the claim that the Philippines has the most significant contact
with the matter in this dispute,[63] raised by private respondent as plaintiff
below against defendant (herein petitioner), in our view, has been properly
established.
Prescinding from this premise that the Philippines is the situs of the tort
complaint of and the place having the most interest in the problem, we find,
by way of recapitulation, that the Philippine law on tort liability should have
paramount application to and control in the resolution of the legal issues
arising out of this case. Further, we hold that the respondent Regional Trial
Court has jurisdiction over the parties and the subject matter of the complaint;
the appropriate venue is in Quezon City, which could properly apply Philippine
law. Moreover, we find untenable petitioners insistence that [s]ince private
respondent instituted this suit, she has the burden of pleading and proving the
applicable Saudi law on the matter.[64] As aptly said by private respondent,
she has no obligation to plead and prove the law of the Kingdom of Saudi
Arabia since her cause of action is based on Articles 19 and 21 of the Civil Code
of the Philippines. In her Amended Complaint and subsequent pleadings she
never alleged that Saudi law should govern this case.[65] And as correctly held
by the respondent appellate court, considering that it was the petitioner who
was invoking the applicability of the law of Saudi Arabia, thus the burden was
on it [petitioner] to plead and to establish what the law of Saudi Arabia is.[66]
Lastly, no error could be imputed to the respondent appellate court in
upholding the trial courts denial of defendants (herein petitioners) motion to
dismiss the case. Not only was jurisdiction in order and venue properly laid,
but appeal after trial was obviously available, and the expeditious trial itself
indicated by the nature of the case at hand. Indubitably, the Philippines is the
state intimately concerned with the ultimate outcome of the case below not just
for the benefit of all the litigants, but also for the vindication of the countrys
system of law and justice in a transnational setting. With these guidelines in
mind, the trial court must proceed to try and adjudge the case in the light of
relevant Philippine law, with due consideration of the foreign element or
elements involved. Nothing said herein, of course, should be construed as
prejudging the results of the case in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil
Case No. Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is
hereby REMANDED to Regional Trial Court of Quezon City, Branch 89 for
further proceedings.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Panganiban, JJ., concur.

[G.R. No. 124371. November 23, 2000]

PAULA T. LLORENTE, petitioner, vs. COURT OF APPEALS and ALICIA F.
LLORENTE, respondents.
DECISION
PARDO, J.:
The Case
The case raises a conflict of laws issue.
What is before us is an appeal from the decision of the Court of Appeals[1]
modifying that of the Regional Trial Court, Camarines Sur, Branch 35, Iriga
City[2] declaring respondent Alicia F. Llorente (herinafter referred to as
Alicia), as co-owners of whatever property she and the deceased Lorenzo N.
Llorente (hereinafter referred to as Lorenzo) may have acquired during the
twenty-five (25) years that they lived together as husband and wife.

her fault and agreed to separate from Lorenzo peacefully. The agreement was
signed by both Lorenzo and Paula and was witnessed by Paulas father and
stepmother. The agreement was notarized by Notary Public Pedro Osabel.[10]
Lorenzo returned to the United States and on November 16, 1951 filed for
divorce with the Superior Court of the State of California in and for the County
of San Diego. Paula was represented by counsel, John Riley, and actively
participated in the proceedings. On November 27, 1951, the Superior Court of
the State of California, for the County of San Diego found all factual allegations
to be true and issued an interlocutory judgment of divorce.[11]
On December 4, 1952, the divorce decree became final.[12]
In the meantime, Lorenzo returned to the Philippines.
On January 16, 1958, Lorenzo married Alicia F. Llorente in Manila.[13]
Apparently, Alicia had no knowledge of the first marriage even if they resided in
the same town as Paula, who did not oppose the marriage or cohabitation.[14]

The Facts
The deceased Lorenzo N. Llorente was an enlisted serviceman of the United
States Navy from March 10, 1927 to September 30, 1957.[3]
On February 22, 1937, Lorenzo and petitioner Paula Llorente (hereinafter
referred to as Paula) were married before a parish priest, Roman Catholic
Church, in Nabua, Camarines Sur.[4]
Before the outbreak of the Pacific War, Lorenzo departed for the United States
and Paula stayed in the conjugal home in barrio Antipolo, Nabua, Camarines
Sur.[5]
On November 30, 1943, Lorenzo was admitted to United States citizenship and
Certificate of Naturalization No. 5579816 was issued in his favor by the United
States District Court, Southern District of New York.[6]
Upon the liberation of the Philippines by the American Forces in 1945, Lorenzo
was granted an accrued leave by the U. S. Navy, to visit his wife and he visited
the Philippines.[7] He discovered that his wife Paula was pregnant and was
living in and having an adulterous relationship with his brother, Ceferino
Llorente.[8]
On December 4, 1945, Paula gave birth to a boy registered in the Office of the
Registrar of Nabua as Crisologo Llorente, with the certificate stating that the
child was not legitimate and the line for the fathers name was left blank.[9]
Lorenzo refused to forgive Paula and live with her. In fact, on February 2, 1946,
the couple drew a written agreement to the effect that (1) all the family
allowances allotted by the United States Navy as part of Lorenzos salary and all
other obligations for Paulas daily maintenance and support would be
suspended; (2) they would dissolve their marital union in accordance with
judicial proceedings; (3) they would make a separate agreement regarding
their conjugal property acquired during their marital life; and (4) Lorenzo
would not prosecute Paula for her adulterous act since she voluntarily admitted

From 1958 to 1985, Lorenzo and Alicia lived together as husband and wife.[15]
Their twenty-five (25) year union produced three children, Raul, Luz and
Beverly, all surnamed Llorente.[16]
On March 13, 1981, Lorenzo executed a Last Will and Testament. The will was
notarized by Notary Public Salvador M. Occiano, duly signed by Lorenzo with
attesting witnesses Francisco Hugo, Francisco Neibres and Tito Trajano. In the
will, Lorenzo bequeathed all his property to Alicia and their three children, to
wit:
(1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my
residential house and lot, located at San Francisco, Nabua, Camarines Sur,
Philippines, including ALL the personal properties and other movables or
belongings that may be found or existing therein;
(2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my
children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal
shares, all my real properties whatsoever and wheresoever located, specifically
my real properties located at Barangay Aro-Aldao, Nabua, Camarines Sur;
Barangay Paloyon, Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua,
Camarines Sur; and Barangay Paloyon, Sitio Nalilidong, Nabua, Camarines Sur;
(3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and
unto my children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in
equal shares, my real properties located in Quezon City Philippines, and
covered by Transfer Certificate of Title No. 188652; and my lands in Antipolo,
Rizal, Philippines, covered by Transfer Certificate of Title Nos. 124196 and
165188, both of the Registry of Deeds of the province of Rizal, Philippines;
(4) That their respective shares in the above-mentioned properties, whether
real or personal properties, shall not be disposed of, ceded, sold and conveyed
to any other persons, but could only be sold, ceded, conveyed and disposed of
by and among themselves;

(5) I designate my wife ALICIA R. FORTUNO to be the sole executor of this my

Last Will and Testament, and in her default or incapacity of the latter to act, any
of my children in the order of age, if of age;

receive any share from the estate even if the will especially said so her
relationship with Lorenzo having gained the status of paramour which is under
Art. 739 (1).

(6) I hereby direct that the executor named herein or her lawful substitute
should served (sic) without bond;

On the other hand, the court finds the petition of Paula Titular Llorente,
meritorious, and so declares the intrinsic disposition of the will of Lorenzo
Llorente dated March 13, 1981 as void and declares her entitled as conjugal
partner and entitled to one-half of their conjugal properties, and as primary
compulsory heir, Paula T. Llorente is also entitled to one-third of the estate and
then one-third should go to the illegitimate children, Raul, Luz and Beverly, all
surname (sic) Llorente, for them to partition in equal shares and also entitled to
the remaining free portion in equal shares.

(7) I hereby revoke any and all my other wills, codicils, or testamentary
dispositions heretofore executed, signed, or published, by me;
(8) It is my final wish and desire that if I die, no relatives of mine in any degree
in the Llorentes Side should ever bother and disturb in any manner
whatsoever my wife Alicia R. Fortunato and my children with respect to any
real or personal properties I gave and bequeathed respectively to each one of
them by virtue of this Last Will and Testament.[17]
On December 14, 1983, Lorenzo filed with the Regional Trial Court, Iriga,
Camarines Sur, a petition for the probate and allowance of his last will and
testament wherein Lorenzo moved that Alicia be appointed Special
Administratrix of his estate.[18]
On January 18, 1984, the trial court denied the motion for the reason that the
testator Lorenzo was still alive.[19]
On January 24, 1984, finding that the will was duly executed, the trial court
admitted the will to probate.[20]
On June 11, 1985, before the proceedings could be terminated, Lorenzo
died.[21]

Petitioner, Paula Llorente is appointed legal administrator of the estate of the

deceased, Lorenzo Llorente. As such let the corresponding letters of
administration issue in her favor upon her filing a bond in the amount (sic) of
P100,000.00 conditioned for her to make a return to the court within three (3)
months a true and complete inventory of all goods, chattels, rights, and credits,
and estate which shall at any time come to her possession or to the possession
of any other person for her, and from the proceeds to pay and discharge all
debts, legacies and charges on the same, or such dividends thereon as shall be
decreed or required by this court; to render a true and just account of her
administration to the court within one (1) year, and at any other time when
required by the court and to perform all orders of this court by her to be
performed.
On the other matters prayed for in respective petitions for want of evidence
could not be granted.
SO ORDERED.[27]

On September 4, 1985, Paula filed with the same court a petition[22] for letters
of administration over Lorenzos estate in her favor. Paula contended (1) that
she was Lorenzos surviving spouse, (2) that the various property were
acquired during their marriage, (3) that Lorenzos will disposed of all his
property in favor of Alicia and her children, encroaching on her legitime and
1/2 share in the conjugal property.[23]
On December 13, 1985, Alicia filed in the testate proceeding (Sp. Proc. No. IR755), a petition for the issuance of letters testamentary.[24]
On October 14, 1985, without terminating the testate proceedings, the trial
court gave due course to Paulas petition in Sp. Proc. No. IR-888.[25]
On November 6, 13 and 20, 1985, the order was published in the newspaper
Bicol Star.[26]

In time, Alicia filed with the trial court a motion for reconsideration of the
aforequoted decision.[28]
On September 14, 1987, the trial court denied Alicias motion for
reconsideration but modified its earlier decision, stating that Raul and Luz
Llorente are not children legitimate or otherwise of Lorenzo since they were
not legally adopted by him.[29] Amending its decision of May 18, 1987, the trial
court declared Beverly Llorente as the only illegitimate child of Lorenzo,
entitling her to one-third (1/3) of the estate and one-third (1/3) of the free
portion of the estate.[30]
On September 28, 1987, respondent appealed to the Court of Appeals.[31]
On July 31, 1995, the Court of Appeals promulgated its decision, affirming with
modification the decision of the trial court in this wise:

On May 18, 1987, the Regional Trial Court issued a joint decision, thus:
Wherefore, considering that this court has so found that the divorce decree
granted to the late Lorenzo Llorente is void and inapplicable in the Philippines,
therefore the marriage he contracted with Alicia Fortunato on January 16, 1958
at Manila is likewise void. This being so the petition of Alicia F. Llorente for the
issuance of letters testamentary is denied. Likewise, she is not entitled to

WHEREFORE, the decision appealed from is hereby AFFIRMED with the

MODIFICATION that Alicia is declared as co-owner of whatever properties she
and the deceased may have acquired during the twenty-five (25) years of
cohabitation.
SO ORDERED.[32]

On August 25, 1995, petitioner filed with the Court of Appeals a motion for
reconsideration of the decision.[33]
On March 21, 1996, the Court of Appeals,[34] denied the motion for lack of
merit.
Hence, this petition.[35]
The Issue
Stripping the petition of its legalese and sorting through the various arguments
raised,[36] the issue is simple. Who are entitled to inherit from the late
Lorenzo N. Llorente?
We do not agree with the decision of the Court of Appeals. We remand the case
to the trial court for ruling on the intrinsic validity of the will of the deceased.

We note that while the trial court stated that the law of New York was not
sufficiently proven, in the same breath it made the categorical, albeit equally
unproven statement that American law follows the domiciliary theory hence,
Philippine law applies when determining the validity of Lorenzos will.[38]
First, there is no such thing as one American law. The "national law" indicated
in Article 16 of the Civil Code cannot possibly apply to general American law.
There is no such law governing the validity of testamentary provisions in the
United States. Each State of the union has its own law applicable to its citizens
and in force only within the State. It can therefore refer to no other than the
law of the State of which the decedent was a resident.[39] Second, there is no
showing that the application of the renvoi doctrine is called for or required by
New York State law.
The trial court held that the will was intrinsically invalid since it contained
dispositions in favor of Alice, who in the trial courts opinion was a mere
paramour. The trial court threw the will out, leaving Alice, and her two
children, Raul and Luz, with nothing.

The Applicable Law

The fact that the late Lorenzo N. Llorente became an American citizen long
before and at the time of: (1) his divorce from Paula; (2) marriage to Alicia; (3)
execution of his will; and (4) death, is duly established, admitted and
undisputed.

The Court of Appeals also disregarded the will. It declared Alice entitled to one
half (1/2) of whatever property she and Lorenzo acquired during their
cohabitation, applying Article 144 of the Civil Code of the Philippines.

Thus, as a rule, issues arising from these incidents are necessarily governed by
foreign law.

The hasty application of Philippine law and the complete disregard of the will,
already probated as duly executed in accordance with the formalities of
Philippine law, is fatal, especially in light of the factual and legal circumstances
here obtaining.

The Civil Code clearly provides:

Validity of the Foreign Divorce

Art. 15. Laws relating to family rights and duties, or to the status, condition
and legal capacity of persons are binding upon citizens of the Philippines, even
though living abroad.

In Van Dorn v. Romillo, Jr.[40] we held that owing to the nationality principle
embodied in Article 15 of the Civil Code, only Philippine nationals are covered
by the policy against absolute divorces, the same being considered contrary to
our concept of public policy and morality. In the same case, the Court ruled that
aliens may obtain divorces abroad, provided they are valid according to their
national law.

Art. 16. Real property as well as personal property is subject to the law of the
country where it is situated.
However, intestate and testamentary succession, 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 be the nature
of the property and regardless of the country wherein said property may be
found. (emphasis ours)
True, foreign laws do not prove themselves in our jurisdiction and our courts
are not authorized to take judicial notice of them. Like any other fact, they must
be alleged and proved.[37]
While the substance of the foreign law was pleaded, the Court of Appeals did
not admit the foreign law. The Court of Appeals and the trial court called to the
fore the renvoi doctrine, where the case was referred back to the law of the
decedents domicile, in this case, Philippine law.

Citing this landmark case, the Court held in Quita v. Court of Appeals,[41] that
once proven that respondent was no longer a Filipino citizen when he obtained
the divorce from petitioner, the ruling in Van Dorn would become applicable
and petitioner could very well lose her right to inherit from him.
In Pilapil v. Ibay-Somera,[42] we recognized the divorce obtained by the
respondent in his country, the Federal Republic of Germany. There, we stated
that divorce and its legal effects may be recognized in the Philippines insofar as
respondent is concerned in view of the nationality principle in our civil law on
the status of persons.
For failing to apply these doctrines, the decision of the Court of Appeals must be
reversed.[43] We hold that the divorce obtained by Lorenzo H. Llorente from
his first wife Paula was valid and recognized in this jurisdiction as a matter of
comity. Now, the effects of this divorce (as to the succession to the estate of the
decedent) are matters best left to the determination of the trial court.

Validity of the Will

The Civil Code provides:
Art. 17. The forms and solemnities of contracts, wills, and other public
instruments shall be governed by the laws of the country in which they are
executed.
When the acts referred to are executed before the diplomatic or consular
officials of the Republic of the Philippines in a foreign country, the solemnities
established by Philippine laws shall be observed in their execution.
(underscoring ours)
The clear intent of Lorenzo to bequeath his property to his second wife and
children by her is glaringly shown in the will he executed. We do not wish to
frustrate his wishes, since he was a foreigner, not covered by our laws on
family rights and duties, status, condition and legal capacity.[44]
Whether the will is intrinsically valid and who shall inherit from Lorenzo are
issues best proved by foreign law which must be pleaded and proved. Whether
the will was executed in accordance with the formalities required is answered
by referring to Philippine law. In fact, the will was duly probated.
As a guide however, the trial court should note that whatever public policy or
good customs may be involved in our system of legitimes, Congress did not
intend to extend the same to the succession of foreign nationals. Congress
specifically left the amount of successional rights to the decedent's national
law.[45]
Having thus ruled, we find it unnecessary to pass upon the other issues raised.
The Fallo
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in
CA-G. R. SP No. 17446 promulgated on July 31, 1995 is SET ASIDE.
In lieu thereof, the Court REVERSES the decision of the Regional Trial Court and
RECOGNIZES as VALID the decree of divorce granted in favor of the deceased
Lorenzo N. Llorente by the Superior Court of the State of California in and for
the County of San Diego, made final on December 4, 1952.
Further, the Court REMANDS the cases to the court of origin for determination
of the intrinsic validity of Lorenzo N. Llorentes will and determination of the
parties successional rights allowing proof of foreign law with instructions that
the trial court shall proceed with all deliberate dispatch to settle the estate of
the deceased within the framework of the Rules of Court.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.

LWV CONSTRUCTION CORPORATION,

Petitioner,
- versus MARCELO B. DUPO,
Respondent.
G.R. No. 172342
Present:
QUISUMBING, J., Chairperson,
CARPIO MORALES,
CHICO-NAZARIO,*
LEONARDO-DE CASTRO,** and
BRION, JJ.
Promulgated:
July 13, 2009
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
Petitioner LWV Construction Corporation appeals the Decision[1] dated
December 6, 2005 of the Court of Appeals in CA-G.R. SP No. 76843 and its
Resolution[2] dated April 12, 2006, denying the motion for reconsideration.
The Court of Appeals had ruled that under Article 87 of the Saudi Labor and
Workmen Law (Saudi Labor Law), respondent Marcelo Dupo is entitled to a
service award or longevity pay amounting to US$12,640.33.
The antecedent facts are as follows:
Petitioner, a domestic corporation which recruits Filipino workers, hired
respondent as Civil Structural Superintendent to work in Saudi Arabia for its
principal, Mohammad Al-Mojil Group/Establishment (MMG). On February 26,
1992, respondent signed his first overseas employment contract, renewable
after one year. It was renewed five times on the following dates: May 10, 1993,
November 16, 1994, January 22, 1996, April 14, 1997, and March 26, 1998. All
were fixed-period contracts for one year. The sixth and last contract stated that
respondents employment starts upon reporting to work and ends when he
leaves the work site. Respondent left Saudi Arabia on April 30, 1999 and
arrived in the Philippines on May 1, 1999.
On May 28, 1999, respondent informed MMG, through the petitioner, that he
needs to extend his vacation because his son was hospitalized. He also sought a
promotion with salary adjustment.[3] In reply, MMG informed respondent that
his promotion is subject to managements review; that his services are still
needed; that he was issued a plane ticket for his return flight to Saudi Arabia on
May 31, 1999; and that his decision regarding his employment must be made
within seven days, otherwise, MMG will be compelled to cancel [his] slot.[4]
On July 6, 1999, respondent resigned. In his letter to MMG, he also stated:
xxxx
I am aware that I still have to do a final settlement with the company and hope
that during my more than seven (7) [years] services, as the Saudi Law stated, I
am entitled for a long service award.[5] (Emphasis supplied.)
xxxx
According to respondent, when he followed up his claim for long service award
on December 7, 2000, petitioner informed him that MMG did not respond.[6]

On December 11, 2000, respondent filed a complaint[7] for payment of service

award against petitioner before the National Labor Relations Commission
(NLRC), Regional Arbitration Branch, Cordillera Administrative Region, Baguio
City. In support of his claim, respondent averred in his position paper that:
xxxx
Under the Law of Saudi Arabia, an employee who rendered at least five (5)
years in a company within the jurisdiction of Saudi Arabia, is entitled to the socalled long service award which is known to others as longevity pay of at least
one half month pay for every year of service. In excess of five years an
employee is entitled to one month pay for every year of service. In both cases
inclusive of all benefits and allowances.
This benefit was offered to complainant before he went on vacation, hence, this
was engrained in his mind. He reconstructed the computation of his long
service award or longevity pay and he arrived at the following computation
exactly the same with the amount he was previously offered [which is
US$12,640.33].[8] (Emphasis supplied.)
xxxx
Respondent said that he did not grab the offer for he intended to return after
his vacation.
For its part, petitioner offered payment and prescription as defenses.
Petitioner maintained that MMG pays its workers their Service Award or
Severance Pay every conclusion of their Labor Contracts pursuant to Article 87
of the [Saudi Labor Law]. Under Article 87, payment of the award is at the
end or termination of the Labor Contract concluded for a specific period.
Based on the payroll,[9] respondent was already paid his service award or
severance pay for his latest (sixth) employment contract.
Petitioner added that under Article 13[10] of the Saudi Labor Law, the action to
enforce payment of the service award must be filed within one year from the
termination of a labor contract for a specific period. Respondents six contracts
ended when he left Saudi Arabia on the following dates: April 15, 1993, June 8,
1994, December 18, 1995, March 21, 1997, March 16, 1998 and April 30, 1999.
Petitioner concluded that the one-year prescriptive period had lapsed because
respondent filed his complaint on December 11, 2000 or one year and seven
months after his sixth contract ended.[11]
In his June 18, 2001 Decision,[12] the Labor Arbiter ordered petitioner to pay
respondent longevity pay of US$12,640.33 or P648,562.69 and attorneys fees
of P64,856.27 or a total of P713,418.96.[13]
The Labor Arbiter ruled that respondents seven-year employment with MMG
had sufficiently oriented him on the benefits given to workers; that petitioner
was unable to convincingly refute respondents claim that MMG offered him
longevity pay before he went on vacation on May 1, 1999; and that
respondents claim was not barred by prescription since his claim on July 6,
1999, made a month after his cause of action accrued, interrupted the
prescriptive period under the Saudi Labor Law until his claim was categorically
denied.
Petitioner appealed. However, the NLRC dismissed the appeal and affirmed the
Labor Arbiters decision.[14] The NLRC ruled that respondent is entitled to
longevity pay which is different from severance pay.
Aggrieved, petitioner brought the case to the Court of Appeals through a
petition for certiorari under Rule 65 of the Rules of Court. The Court of Appeals
denied the petition and affirmed the NLRC. The Court of Appeals ruled that
service award is the same as longevity pay, and that the severance pay received

by respondent cannot be equated with service award. The dispositive portion

of the Court of Appeals decision reads:
WHEREFORE, finding no grave abuse of discretion amounting to lack or in (sic)
excess of jurisdiction on the part of public respondent NLRC, the petition is
denied. The NLRC decision dated November 29, 2002 as well as and (sic) its
January 31, 2003 Resolution are hereby AFFIRMED in toto.
SO ORDERED.[15]
After its motion for reconsideration was denied, petitioner filed the instant
petition raising the following issues:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING
NO GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION ON THE PART OF PUBLIC RESPONDENT NATIONAL LABOR
RELATIONS COMMISSION.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING
THAT THE SERVICE AWARD OF THE RESPONDENT [HAS] NOT PRESCRIBED
WHEN HIS COMPLAINT WAS FILED ON DECEMBER 11, 2000.
III.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN
APPLYING IN THE CASE AT BAR [ARTICLE 1155 OF THE CIVIL CODE].
IV.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN
APPLYING ARTICLE NO. 7 OF THE SAUDI LABOR AND WORKMEN LAW TO
SUPPORT ITS FINDING THAT THE BASIS OF THE SERVICE AWARD IS
LONGEVITY [PAY] OR LENGTH OF SERVICE RENDERED BY AN EMPLOYEE.[16]
Essentially, the issue is whether the Court of Appeals erred in ruling that
respondent is entitled to a service award or longevity pay of US$12,640.33
under the provisions of the Saudi Labor Law. Related to this issue are
petitioners defenses of payment and prescription.
Petitioner points out that the Labor Arbiter awarded longevity pay although the
Saudi Labor Law grants no such benefit, and the NLRC confused longevity pay
and service award. Petitioner maintains that the benefit granted by Article 87
of the Saudi Labor Law is service award which was already paid by MMG each
time respondents contract ended.
Petitioner insists that prescription barred respondents claim for service award
as the complaint was filed one year and seven months after the sixth contract
ended. Petitioner alleges that the Court of Appeals erred in ruling that
respondents July 6, 1999 claim interrupted the running of the prescriptive
period. Such ruling is contrary to Article 13 of the Saudi Labor Law which
provides that no case or claim relating to any of the rights provided for under
said law shall be heard after the lapse of 12 months from the date of the
termination of the contract.
Respondent counters that he is entitled to longevity pay under the provisions of
the Saudi Labor Law and quotes extensively the decision of the Court of
Appeals. He points out that petitioner has not refuted the Labor Arbiters
finding that MMG offered him longevity pay of US$12,640.33 before his onemonth vacation in the Philippines in 1999. Thus, he submits that such offer
indeed exists as he sees no reason for MMG to offer the benefit if no law grants
it.
After a careful study of the case, we are constrained to reverse the Court of
Appeals. We find that respondents service award under Article 87 of the Saudi

Labor Law has already been paid. Our computation will show that the
severance pay received by respondent was his service award.
Article 87 clearly grants a service award. It reads:
Article 87
Where the term of a labor contract concluded for a specified period comes to an
end or where the employer cancels a contract of unspecified period, the
employer shall pay to the workman an award for the period of his service to be
computed on the basis of half a months pay for each of the first five years and
one months pay for each of the subsequent years. The last rate of pay shall be
taken as basis for the computation of the award. For fractions of a year, the
workman shall be entitled to an award which is proportionate to his service
period during that year. Furthermore, the workman shall be entitled to the
service award provided for at the beginning of this article in the following
cases:
A.
If he is called to military service.
B.
If a workman resigns because of marriage or childbirth.
C.
If the workman is leaving the work as a result of a force majeure
beyond his control.[17] (Emphasis supplied.)
Respondent, however, has called the benefit other names such as long service
award and longevity pay. On the other hand, petitioner claimed that the service
award is the same as severance pay. Notably, the Labor Arbiter was unable to
specify any law to support his award of longevity pay.[18] He anchored the
award on his finding that respondents allegations were more credible because
his seven-year employment at MMG had sufficiently oriented him on the
benefits given to workers. To the NLRC, respondent is entitled to service award
or longevity pay under Article 87 and that longevity pay is different from
severance pay. The Court of Appeals agreed.
Considering that Article 87 expressly grants a service award, why is it correct to
agree with respondent that service award is the same as longevity pay, and
wrong to agree with petitioner that service award is the same as severance
pay? And why would it be correct to say that service award is severance pay,
and wrong to call service award as longevity pay?
We found the answer in the pleadings and evidence presented. Respondents
position paper mentioned how his long service award or longevity pay is
computed: half-months pay per year of service and one-months pay per year
after five years of service. Article 87 has the same formula to compute the
service award.
The payroll submitted by petitioner showed that respondent received
severance pay of SR2,786 for his sixth employment contract covering the
period April 21, 1998 to April 29, 1999.[19] The computation below shows that
respondents severance pay of SR2,786 was his service award under Article 87.
Service Award = (SR5,438)[20] + (9 days/365 days)[21] x (SR5,438)
Service Award = SR2,786.04
Respondents service award for the sixth contract is equivalent only to halfmonths pay plus the proportionate amount for the additional nine days of
service he rendered after one year. Respondents employment contracts
expressly stated that his employment ended upon his departure from work.
Each year he departed from work and successively new contracts were
executed before he reported for work anew. His service was not cumulative.
Pertinently, in Brent School, Inc. v. Zamora,[22] we said that a fixed term is an
essential and natural appurtenance of overseas employment contracts,[23] as
in this case. We also said in that case that under American law, [w]here a
contract specifies the period of its duration, it terminates on the expiration of

such period. A contract of employment for a definite period terminates by its

own terms at the end of such period.[24] As it is, Article 72 of the Saudi Labor
Law is also of similar import. It reads:
A labor contract concluded for a specified period shall terminate upon the
expiry of its term. If both parties continue to enforce the contract, thereafter, it
shall be considered renewed for an unspecified period.[25]
Regarding respondents claim that he was offered US$12,640.33 as longevity
pay before he returned to the Philippines on May 1, 1999, we find that he was
not candid on this particular point. His categorical assertion about the offer
being engrained in his mind such that he reconstructed the computation
and arrived at the computation exactly the same with the amount he was
previously offered is not only beyond belief. Such assertion is also a stark
departure from his July 6, 1999 letter to MMG where he could only express his
hope that he was entitled to a long service award and where he never
mentioned the supposed previous offer. Moreover, respondents claim that his
monthly compensation is SR10,248.92[26] is belied by the payroll which shows
that he receives SR5,438 per month.
We therefore emphasize that such payroll should have prompted the lower
tribunals to examine closely respondents computation of his supposed
longevity pay before adopting that computation as their own.
On the matter of prescription, however, we cannot agree with petitioner that
respondents action has prescribed under Article 13 of the Saudi Labor Law.
What applies is Article 291 of our Labor Code which reads:
ART. 291. Money claims. All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three
(3) years from the time the cause of action accrued; otherwise they shall be
forever barred.
xxxx
In Cadalin v. POEAs Administrator,[27] we held that Article 291 covers all
money claims from employer-employee relationship and is broader in scope
than claims arising from a specific law. It is not limited to money claims
recoverable under the Labor Code, but applies also to claims of overseas
contract workers.[28] The following ruling in Cadalin v. POEAs Administrator
is instructive:
First to be determined is whether it is the Bahrain law on prescription of action
based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription
that shall be the governing law.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not be actionable after
the lapse of one year from the date of the expiry of the contract x x x.
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 (Restatement
of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131
[1979]).
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.
xxxx
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. Said Section provides:
If by the laws of the state or country where the cause of action arose, the action
is barred, it is also barred in the Philippine Islands.
Section 48 has not been repealed or amended by the Civil Code of the
Philippines. Article 2270 of said Code repealed only those provisions of the
Code of Civil Procedure as to which were inconsistent with it. There is no
provision in the Civil Code of the Philippines, which is inconsistent with or
contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine
Conflict of Laws, 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil
Procedure] cannot be enforced ex proprio vigore insofar as it ordains the
application in this jurisdiction of [Article] 156 of the Amiri Decree No. 23 of
1976.
The courts of the forum will not enforce any foreign claim obnoxious to the
forums public policy x x x. To enforce the one-year prescriptive period of the
Amiri Decree No. 23 of 1976 as regards the claims in question would
contravene the public policy on the protection to labor.[29]
xxxx
Thus, in our considered view, respondents complaint was filed well within the
three-year prescriptive period under Article 291 of our Labor Code. This point,
however, has already been mooted by our finding that respondents service
award had been paid, albeit the payroll termed such payment as severance pay.
WHEREFORE, the petition is GRANTED. The assailed Decision dated December
6, 2005 and Resolution dated April 12, 2006, of the Court of Appeals in CA-G.R.
SP No. 76843, as well as the Decision dated June 18, 2001 of the Labor Arbiter
in NLRC Case No. RAB-CAR-12-0649-00 and the Decision dated November 29,
2002 and Resolution dated January 31, 2003 of the NLRC in NLRC CA No.
028994-01 (NLRC RAB-CAR-12-0649-00) are REVERSED and SET ASIDE. The
Complaint of respondent is hereby DISMISSED.
No pronouncement as to costs.