SAUDIA VS.

CA
MARCH 28, 2013 ~ LE AVE A COMMENT
SAUDI ARABIAN AIRLINES (SAUDIA) vs. COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity
as Presiding Judge of Branch 89, RTC of Quezon City
G.R. No. 122191 October 8, 1998
FACTS: Petitioner SAUDIA hired private respondent MORADA as a flight attendant in 1988, based in Jeddah. On 1990, while on a lay-over in
Jakarta, Indonesia, she went to party with 2 male attendants, and on the following morning in their hotel, one of the male attendants attempted to rape
her. She was rescued by hotel attendants who heard her cry for help. The Indonesian police arrested the 2.
MORADA returned to Jeddah, but was asked by the company to go back to Jakarta and help arrange the release of the 2 male attendants. MORADA
did not cooperate when she got to Jakarta.
What followed was a series of interrogations from the Saudi Courts which she did not understand as this was in their language. In 1993, she was
surprised, upon being ordered by SAUDIA to go to the Saudi court, that she was being convicted 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, sentencing her to five
months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with the 2, for what happened in Jakarta.
SAUDIA denied her the assistance she requested, But because she was wrongfully convicted, Prince of Makkah dismissed the case against her and
allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed
of the cause.
On November 23, 1993, Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi (Al-Balawi), its country manager.
SAUDIA ALLEGES: 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.
MORADA ALLEGES: Since her Amended Complaint is based on Articles 19 and 21 of the Civil Code, then the instant case is properly a matter of
domestic law.
ISSUE: WON the Philippine courts have jurisdiction to try the case
HELD: YES.
On the presence of a Foreign Element in the 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. The forms in which this foreign element may appear are many.
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.
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.
COURT disagrees with MORADA that his is purely a domestic case. However, the court finds that the RTC of Quezon City possesses jurisdiction over
the subject matter of the suit. Its authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691, to wit:
BP129 Sec. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive jurisdiction:
xxx xxx xxx
(8) In all other cases in which demand, exclusive of interest, damages of whatever kind, attorney`ys fees, litigation expenses, and cots 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
Section 2 (b), Rule 4 of the Revised Rules of Court the venue, Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
(a) xxx xxx xxx
(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.
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.
The trial court also acquired jurisdiction over the parties. MORADA through her act of filing, and SAUDIA by praying for the dismissal of the
Amended Complaint on grounds other than lack of jurisdiction.
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.
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 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 totality 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.
In applying State of the most significant relationship rule, 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.
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, raised by private respondent
as plaintiff below against defendant (herein petitioner), in our view, has been properly established.
NOTE:
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 fori the law of the forum is 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.

MHC AND MHICL VS. NLRC

MARCH 28, 2013 ~ LE AVE A COMMENT
MHC AND MHICL vs. NLRC et al
G.R. No. 120077
October 13, 2000
FACTS: private respondent Santos was an overseas worker employed as a printer at the Mazoon Printing Press, Sultanate of Oman. Subsequently he
was directly hired by the Palace Hotel, Beijing, Peoples Republic of China and later terminated due to retrenchment.
Petitioners are the Manila Hotel Corporation (MHC) and the Manila Hotel International Company, Limited (MHICL).
When the case was filed in 1990, MHC was still a government-owned and controlled corporation duly organized and existing under the laws of the
Philippines. MHICL is a corporation duly organized and existing under the laws of Hong Kong. MHC is an incorporator of MHICL, owning 50% of
its capital stock.
By virtue of a management agreement with the Palace Hotel, MHICL trained the personnel and staff of the Palace Hotel at Beijing, China.
Now the facts.
During his employment with the Mazoon Printing Press, respondent Santos received a letter from Mr. Shmidt, General Manager, Palace Hotel, Beijing,
China. Mr. Schmidt informed respondent Santos that he was recommended by one Buenio, a friend of his. Mr. Shmidt offered respondent Santos the
same position as printer, but with a higher monthly salary and increased benefits. Respondent Santos wrote to Mr. Shmidt and signified his acceptance
of the offer.
The Palace Hotel Manager, Mr. Henk mailed a ready to sign employment contract to respondent Santos. Santos resigned from the Mazoon Printing
Press. Santos wrote the Palace Hotel and acknowledged Mr. Henks letter. The employment contract stated that his employment would be for a period
of two years. He then started to work at the Palace Hotel.
Subsequently, respondent Santos signed an amended employment agreement with the Palace Hotel. In the contract, Mr. Shmidt represented the
Palace Hotel. The Vice President (Operations and Development) of petitioner MHICL Cergueda signed the employment agreement under the word
noted.
After working in the Palace hotel for less than 1 year, the Palace Hotel informed respondent Santos by letter signed by Mr. Shmidt that his employment
at the Palace Hotel print shop would be terminated due to business reverses brought about by the political upheaval in China. The Palace Hotel
terminated the employment of Santos and paid all benefits due him, including his plane fare back to the Philippines. Santos was repatriated to the
Philippines.
Santos filed a complaint for illegal dismissal with the Arbitration Branch, NCR, NLRC. He prayed for an award of AD, ED and AF for. The complaint
named MHC, MHICL, the Palace Hotel and Mr. Shmidt as respondents. The Palace Hotel and Mr. Shmidt were not served with summons and neither
participated in the proceedings before the LA.
The LA decided the case against petitioners. Petitioners appealed to the NLRC, arguing that the POEA, not the NLRC had jurisdiction over the case.
The NLRC promulgated a resolution, stating that the appealed Decision be declared null and void for want of jurisdiction
Santos moved for reconsideration of the afore-quoted resolution. He argued that the case was not cognizable by the POEA as he was not an overseas
contract worker. The NLRC granted the motion and reversed itself. The NLRC directed another LA to hear the case on the question of whether private
respondent was retrenched or dismissed. The La found that Santos was illegally dismissed from employment and recommended that he be paid actual
damages equivalent to his salaries for the unexpired portion of his contract. The NLRC ruled in favor of private respondent. Petitioners filed an MR
arguing that the LAs recommendation had no basis in law and in fact, however it was denied. Hence, this petition.
ISSUE: Is the NLRC a proper forum to decide this case?
HELD: petition granted; the orders and resolutions of the NLRC are annulled.
NO
Forum Non-Conveniens
The NLRC was a seriously inconvenient forum.
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 Santos is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations. Not all cases involving our
citizens can be tried here.
The employment contract. Respondent Santos was hired directly by the Palace Hotel, a foreign employer, through correspondence sent to the
Sultanate of Oman, where respondent Santos was then employed. He was hired without the intervention of the POEA or any authorized recruitment
agency of the government.
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. The conditions are unavailing in the case at
bar.
Not Convenient. We fail to see how the NLRC is a convenient forum given that all the incidents of the case from the time of recruitment, to
employment to dismissal occurred outside the Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel
and MHICL are not nationals of the Philippines. Neither .are they doing business in the Philippines. Likewise, the main witnesses, Mr. Shmidt and
Mr. Henk are non-residents of the Philippines.
No power to determine applicable law. Neither can an intelligent decision be made as to the law governing the employment contract as such was
perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made).
The employment contract was not perfected in the Philippines. 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 Peoples Republic of China.
No power to determine the facts. Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of took
place in Beijing, Peoples Republic of China. The NLRC was not in a position to determine whether the Tiannamen Square incident truly adversely
affected operations of the Palace Hotel as to justify Santos retrenchment.
Principle of effectiveness, no power to execute decision. Even assuming that a proper decision could be reached by the NLRC, such would not have
any binding effect against the employer, the Palace Hotel. The Palace Hotel is a corporation incorporated under the laws of China and was not even
served with summons. Jurisdiction over its person was not acquired.
This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither are we saying that we
do not have power over an employment contract executed in a foreign country. If Santos were an overseas contract worker, a Philippine forum,
specifically the POEA, not the NLRC, would protect him. He is not an overseas contract worker a fact which he admits with conviction.
__
Even assuming that the NLRC was the proper forum, even on the merits, the NLRCs decision cannot be sustained.
II. MHC Not Liable
Even if we assume two things: (1) that the NLRC had jurisdiction over the case, and (2) that MHICL was liable for Santos retrenchment, still MHC, as
a separate and distinct juridical entity cannot be held liable.
True, MHC is an incorporator of MHICL and owns 50% of its capital stock. However, this is not enough to pierce the veil of corporate fiction between
MHICL and MHC. In Traders Royal Bank v. CA, we held that the mere ownership by a single stockholder or by another corporation of all or nearly
all of the capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate corporate personalities.
It is basic that a corporation has a personality separate and distinct from those composing it as well as from that of any other legal entity to which it
may be related. Clear and convincing evidence is needed to pierce the veil of corporate fiction. In this case, we find no evidence to show that MHICL
and MHC are one and the same entity.
III. MHICL not Liable
Santos predicates MHICLs liability on the fact that MHICL signed his employment contract with the Palace Hotel. This fact fails to persuade us.
First, we note that the Vice President (Operations and Development) of MHICL, Cergueda signed the employment contract as a mere witness. He
merely signed under the word noted.
When one notes a contract, one is not expressing his agreement or approval, as a party would. In Sichangco v. Board of Commissioners of
Immigration, the Court recognized that the term noted means that the person so noting has merely taken cognizance of the existence of an act or
declaration, without exercising a judicious deliberation or rendering a decision on the matter.
Second, and more importantly, there was no existing employer-employee relationship between Santos and MHICL. In determining the existence of an
employer-employee relationship, the following elements are considered:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power to dismiss; and
(4) the power to control employees conduct.
MHICL did not have and did not exercise any of the aforementioned powers. It did not select respondent Santos as an employee for the Palace Hotel.
He was referred to the Palace Hotel by his friend, Buenio. MHICL did not engage respondent Santos to work. The terms of employment were
negotiated and finalized through correspondence between Santos, Mr. Schmidt and Mr. Henk, who were officers and representatives of the Palace
Hotel and not MHICL. Neither did Santos adduce any proof that MHICL had the power to control his conduct. Finally, it was the Palace Hotel, through
Mr. Schmidt and not MHICL that terminated respondent Santos services.
Likewise, there is no evidence to show that the Palace Hotel and MHICL are one and the same entity. The fact that the Palace Hotel is a member of the
Manila Hotel Group is not enough to pierce the corporate veil between MHICL and the Palace Hotel.
Considering that the NLRC was forum non-conveniens and considering further that no employer-employee relationship existed between MHICL,
MHC and Santos, the LA clearly had no jurisdiction over respondents claim in the NLRC case. In all the cases under the exclusive and original
jurisdiction of the LA, an employer-employee relationship is an indispensable jurisdictional requirement.

Bellis vs Bellis
G.R. No. L-23678 June 6, 1967

Lessons Applicable: Divorce, Doctrine of Processual Presumption

Laws Applicable: Art. 16, 17 1039 NCC

Violet Kennedy (2nd wife) Amos G. Bellis --- Mary E. Mallen (1st wife)
Legitimate Children: Legitimate Children:
Edward A. Bellis Amos Bellis, Jr.
George Bellis (pre-deceased) Maria Cristina Bellis
Henry A. Bellis Miriam Palma Bellis
Alexander Bellis
Anna Bellis Allsman

FACTS:
 Amos G. Bellis, a citizen of the State of Texas and of the United States.
By his first wife, Mary E. Mallen, whom he divorced, he had 5 legitimate children: Edward A. Bellis, George Bellis (who pre-
deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman
By his second wife, Violet Kennedy, who survived him, he had 3 legitimate children: Edwin G. Bellis, Walter S. Bellis and
Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis
August 5, 1952: Amos G. Bellis executed a will in the Philippines dividing his estate as follows:
1. $240,000.00 to his first wife, Mary E. Mallen
2. P40,000.00 each to his 3 illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis
3. remainder shall go to his seven surviving children by his first and second wives
July 8, 1958: Amos G. Bellis died a resident of Texas, U.S.A
September 15, 1958: his will was admitted to probate in the CFI of Manila on
People's Bank and Trust Company as executor of the will did as the will directed
Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions on the ground that they were deprived of their
legitimes as illegitimate children
Probate Court: Relying upon Art. 16 of the Civil Code, it applied the national law of the decedent, which in this case is Texas
law, which did not provide for legitimes.
ISSUE: W/N Texas laws or national law of Amos should govern the intrinsic validity of the will

HELD: YES. Order of the probate court is hereby affirmed

Doctrine of Processual Presumption:
The foreign law, whenever applicable, should be proved by the proponent thereof, otherwise, such law shall be presumed to be
exactly the same as the law of the forum.
In the absence of proof as to the conflict of law rule of Texas, it should not be presumed different from ours. Apply Philippine
laws.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in intestate or
testamentary successions, with regard to four items: (a) the order of succession; (b) the amount of successional rights; (e) the
intrinsic validity of the provisions of the will; and (d) the capacity to succeed. They provide that
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 successions, both with respect to the order of succession and to the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever
may he the nature of the property and regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that under the laws of
Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of the provision of the will and the amount
of successional rights are to be determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.

CONFLICT OF LAWS HONGKONG SHANGAI BANKING CORPORATION v. SHERMAN G.R. No. 72494 August 11, 1989
HONGKONG SHANGAI BANKING CORPORATION v. SHERMAN
G.R. No. 72494 August 11, 1989

FACTS
In 1981, Eastern Book Supply Service PTE, Ltd., (Eastern) a company incorporated in Singapore applied w/, & was granted by the
Singapore branch of HSBC an overdraft facility in the max amount of Singapore $200,000 (w/c amount was subsequently increased to
Singapore $375,000) w/ interest at 3% over HSBC prime rate, payable monthly, on amounts due under said overdraft facility. As a
security for the repayment by Eastern of sums advanced by HSBC to it through the aforesaid overdraft facility, in 1982, Jack Sherman,
Dodato Reloj, and a Robin de Clive Lowe, all of whom were directors of Eastern at such time, executed a Joint and Several Guarantee in
favor of HSBC whereby Sherman, Reloj and Lowe agreed to pay, jointly and severally, on demand all sums owed by Eastern to HSBC
under the aforestated overdraft facility.

The Joint and Several Guarantee provides 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.

Eastern failed to pay its obligation. Thus, HSBC demanded payment of the obligation from Sherman & Reloj, conformably w/ the
provisions of the Joint and Several Guarantee. Inasmuch as Sherman & Reloj still failed to pay, HSBC filed a complaint for collection of a
sum of money against them. Sherman & Reloj filed a motion to dismiss on the grounds that (1) the court has no jurisdiction over the
subject matter of the complaint, and (2) the court has no jurisdiction over the person of the defendants.

ISSUE
W/N Philippine courts should have jurisdiction over the suit.

RULING
YES. While it is true that "the transaction took place in Singaporean setting" and that the Joint and Several Guarantee contains a choice-
of-forum clause, the very essence of due process dictates that the stipulation that "this guarantee and all rights, obligations & liabilities
arising hereunder shall be construed & determined under & may be enforced in accordance w/ the laws of the Republic of Singapore. We
hereby agree that the Courts in Singapore shall have jurisdiction over all disputes arising under this guarantee" be liberally construed.
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. Indeed, as pointed-
out by HSBC at the outset, the instant case presents a very odd situation. In the ordinary habits of life, anyone would be disinclined to
litigate before a foreign tribunal, w/ more reason as a defendant. However, in this case, Sherman & Reloj are Philippine residents (a fact
which was not disputed by them) who would rather face a complaint against them before a foreign court and in the process incur
considerable expenses, not to mention inconvenience, than to have a Philippine court try and resolve the case. Their stance is hardly
comprehensible, unless their ultimate intent is to evade, or at least delay, the payment of a just obligation.

The defense of Sherman & Reloj 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 Sherman & Reloj.

The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the
clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a State
to exercise authority over persons and things w/in its boundaries subject to certain exceptions. Thus, a State does not assume
jurisdiction over travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign military units stationed in
or marching through State territory w/ the permission of the latter's authorities. This authority, which finds its source in the concept of
sovereignty, is exclusive w/in and throughout the domain of the State. A State is competent to take hold of any judicial matter it sees fit by
making its courts and agencies assume jurisdiction over all kinds of cases brought before them.

538 SCRA 261 Conflict of Laws Private International Law Jurisdiction Lex Loci Celebrationis Lex Loci Solutionis State of the
Most Significant Relationship Forum Non Conveniens

In March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was contracted by the Department of Public Works and
Highways (DPWH) to supervise the construction of the Southern Tagalog Access Road. In April 1999, Nippon entered into an
independent contractor agreement (ICA) with Minoru Kitamura for the latter to head the said project. The ICA was entered into in Japan
and is effective for a period of 1 year (so until April 2000). In January 2000, DPWH awarded the Bongabon-Baler Road project to Nippon.
Nippon subsequently assigned Kitamura to head the road project. But in February 2000, Kazuhiro Hasegawa, the general manager of
Nippon informed Kitamura that they are pre-terminating his contract. Kitamura sought Nippon to reconsider but Nippon refused to
negotiate. Kitamura then filed a complaint for specific performance and damages against Nippon in the RTC of Lipa.

Hasegawa filed a motion to dismiss on the ground that the contract was entered in Japan hence, applying the principle of lex loci
celebracionis, cases arising from the contract should be cognizable only by Japanese courts. The trial court denied the motion.
Eventually, Nippon filed a petition for certiorari with the Supreme Court.

Hasegawa, on appeal significantly changed its theory, this time invoking forum non conveniens; that the RTC is an inconvenient forum
because the parties are Japanese nationals who entered into a contract in Japan. Kitamura on the other hand invokes the trial courts
ruling which states that matters connected with the performance of contracts are regulated by the law prevailing at the place of
performance, so since the obligations in the ICA are executed in the Philippines, courts here have jurisdiction.

ISSUE: Whether or not the complaint against Nippon should be dismissed.

HELD: No. The trial court did the proper thing in taking cognizance of it.

In the first place, the case filed by Kitamura is a complaint for specific performance and damages. Such case is incapable of pecuniary
estimation; such cases are within the jurisdiction of the regional trial court.

Hasegawa filed his motion to dismiss on the ground of forum non conveniens. However, such ground is not one of those provided for by
the Rules as a ground for dismissing a civil case.

The Supreme Court also emphasized that the contention that Japanese laws should apply is premature. In conflicts cases, there are
three phases and each next phase commences when one is settled, to wit:

Jurisdiction Where should litigation be initiated? Court must have jurisdiction over the subject matter, the parties, the issues, the
property, the res. Also 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.
Choice of Law Which law will the court apply? Once a local court takes cognizance, it does not mean that the local laws must
automatically apply. The court must determine which substantive law when applied to the merits will be fair to both parties.
Recognition and Enforcement of Judgment Where can the resulting judgment be enforced?
This case is not yet in the second phase because upon the RTCs taking cognizance of the case, Hasegawa immediately filed a motion
to dismiss, which was denied. He filed a motion for reconsideration, which was also denied. Then he bypassed the proper procedure by
immediately filing a petition for certiorari. The question of which law should be applied should have been settled in the trial court had
Hasegawa not improperly appealed the interlocutory order denying his MFR.
CONFLICT OF LAWS raytheon international vs rouzie gr 162894

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 thePhilippines 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 order

ed BMSI & Rust to pay Rouzies money claims.

Upon appeal, the NLRC reversed & dismissed Rouzies 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 hesecured 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 RAYTHEONS MOTION. THE CA AFFIRMED.

Raytheons 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 MATTER, ARE PRECLUDED FROM HEARING THE CIVIL ACTION.
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.
Raytheons 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 courts desistance.

TESTATE ESTATE OF EDWARD E. CHRISTENSEN vs. HELEN CHRISTENSEN GARCIA, G.R. No. L-16749 January 31, 1963
IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased, Executor and
Heir-appellees, VS. HELEN CHRISTENSEN GARCIA, oppositor-appellant
January 31, 1963

FACTS:
Edward E. Christensen, though born in New York, migrated to California, where he resided and consequently was considered a
California citizen. In 1913, he came to the Philippines where he became a domiciliary until his death. However, during the entire period of
his residence in this country he had always considered himself a citizen of California. In his will executed on March 5, 1951, he instituted
an acknowledged natural daughter, Maria Lucy Christensen as his only heir, but left a legacy of sum of money in favor of Helen
Christensen Garcia who was rendered to have been declared acknowledged natural daughter. Counsel for appellant claims that
California law should be applied; that under California law, the matter is referred back to the law of the domicile; that therefore Philippine
law is ultimately applicable; that finally, the share of Helen must be increased in view of the success ional rights of illegitimate children
under Philippine law. On the other hand, counsel for the heir of Christensen contends that inasmuch as it is clear that under Article 16 of
our Civil Code, the national law of the deceased must apply, our courts must immediately apply the internal law of California on the
matter; that under California law there are no compulsory heirs and consequently a testator could dispose of any property possessed by
him in absolute dominion and that finally, illegitimate children not being entitled to anything and his will remain undisturbed.

ISSUE:
Whether or not the Philippine law should prevail in administering the estate of Christensen?

RULING:
The court in deciding to grant more successional rights to Helen said in effect that there are two rules in California on the matter: the
internal law which should apply to Californians domiciled in California; and the conflict rule which should apply to Californians domiciled
outside of California. The California conflict rule says: If there is no law to the contrary in the place where personal property is situated, is
deemed to follow the person of its owner and is governed by the law of his domicile. Christensen being domiciled outside California, the
law of his domicile, the Philippines, ought to be followed. Where it is referred back to California, it will form a circular pattern referring to
both country back and forth.

EQUATORIAL REALTY DEVELOPMENT, INC., vs. MAYFAIR THEATER, INC.

[G.R. No. 133879. November 21, 2001.]
FACTS:

Mayfair Theater, Inc. was a lessee of portions of a building owned by Carmelo & Bauermann, Inc. Their lease contracts of 20
years (1. which covered a portion of the second floor and mezzanine of a two-storey building with about 1,610 square meters
of floor area, which respondent used as a movie house known as Maxim Theater 2. two store spaces on the ground floor and
the mezzanine, with a combined floor area of about 300 square meters also used as a movie house Miramar Theater)
Lease contracts contained a provision granting Mayfair a right of first refusal to purchase the subject properties.
However, before the contracts ended, the subject properties were sold for P11,300 by Carmelo to Equatorial Realty
Development, Inc.
This prompted Mayfair to file a case for the annulment of the Deed of Absolute Sale between Carmelo and Equatorial, specific
performance and damages.
In 1996, the Court ruled in favor of Mayfair.
Barely five months after Mayfair had submitted its Motion for Execution, Equatorial filed an action for collection of sum of
money against Mayfair claiming payment of rentals or reasonable compensation for the defendants use of the subject
premises after its lease contracts had expired.
Maxim Theater contract expired on May 31, 1987, while the Lease Contract covering the premises occupied by Miramar
Theater lapsed on March 31, 1989.
The lower court debunked the claim of Equatorial for unpaid back rentals, holding that the rescission of the Deed of Absolute
Sale in the mother case did not confer on Equatorial any vested or residual propriety rights, even in expectancy.
It further ruled that the Court categorically stated that the Deed of Absolute Sale had been rescinded subjecting the present
complaint to res judicata.
Hence, Equatorial filed the present petition.

ISSUE: whether Equatorial was the owner of the subject property and could thus enjoy the fruits or rentals therefrom

HELD: NO.

CIVIL LAW; PROPERTY; CIVIL FRUIT OF OWNERSHIP; RENTALS. Rent is a civil fruit that belongs to the owner of the property
producing it by right of accession. Consequently and ordinarily, the rentals that fell due from the time of the perfection of the sale to
petitioner until its rescission by final judgment should belong to the owner of the property during that period.

SALES; OWNERSHIP OF THE THING SOLD IS TRANSFERRED, NOT BY CONTRACT ALONE, BUT BY TRADITION OR DELIVERY.
By a contract of sale, one of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing and
the other to pay therefor a price certain in money or its equivalent. Ownership of the thing sold is a real right, which the buyer acquires
only upon delivery of the thing to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an
agreement that the possession is transferred from the vendor to the vendee. This right is transferred, not by contract alone, but by
tradition or delivery. Non nudis pactis sed traditione dominia rerum transferantur.
THERE IS DELIVERY WHEN THE THING SOLD IS PLACED UNDER THE CONTROL AND POSSESSION OF THE VENDEE.
[T]here is said to be delivery if and when the thing sold is placed in the control and possession of the vendee. Thus, it has been held
that while the execution of a public instrument of sale is recognized by law as equivalent to the delivery of the thing sold, such
constructive or symbolic delivery, being merely presumptive, is deemed negated by the failure of the vendee to take actual possession of
the land sold. Delivery has been described as a composite act, a thing in which both parties must join and the minds of both parties
concur. It is an act by which one party parts with the title to and the possession of the property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery means something in addition to the delivery of property or title; it means transfer of
possession. In the Law on Sales, delivery may be either actual or constructive, but both forms of delivery contemplate the absolute
giving up of the control and custody of the property on the part of the vendor, and the assumption of the same by the vendee.

ID.; NOT PRESENT IN CASE AT BAR. [T]heoretically, a rescissible contract is valid until rescinded. However, this general principle is
not decisive to the issue of whether Equatorial ever acquired the right to collect rentals. What is decisive is the civil law rule that
ownership is acquired, not by mere agreement, but by tradition or delivery. Under the factual environment of this controversy as found by
this Court in the mother case, Equatorial was never put in actual and effective control or possession of the property because of Mayfairs
timely objection.

ID.; EXECUTION OF CONTRACT OF SALE AS FORM OF CONSTRUCTIVE DELIVERY HOLDS TRUE ONLY WHEN THERE IS NO
IMPEDIMENT THAT MAY PREVENT THE PASSING OF THE PROPERTY FROM THE VENDOR TO THE VENDEE. From the
peculiar facts of this case, it is clear that petitioner never took actual control and possession of the property sold, in view of respondents
timely objection to the sale and the continued actual possession of the property. The objection took the form of a court action impugning
the sale which, as we know, was rescinded by a judgment rendered by this Court in the mother case. It has been held that the execution
of a contract of sale as a form of constructive delivery is a legal fiction. It holds true only when there is no impediment that may prevent
the passing of the property from the hands of the vendor into those of the vendee. When there is such impediment, fiction yields to
reality the delivery has not been effected. Hence, respondents opposition to the transfer of the property by way of sale to Equatorial
was a legally sufficient impediment that effectively prevented the passing of the property into the latters hands.

ID.; EXECUTION OF PUBLIC INSTRUMENT GIVES RISE ONLY TO A PRIMA FACIE PRESUMPTION OF DELIVERY. The
execution of a public instrument gives rise, . . . only to a prima facie presumption of delivery. Such presumption is destroyed when the
instrument itself expresses or implies that delivery was not intended; or when by other means it is shown that such delivery was not
effected, because a third person was actually in possession of the thing. In the latter case, the sale cannot be considered consummated.

ID.; OBLIGATIONS AND CONTRACTS; RESCISSIBLE CONTRACTS; NOT ONLY THE LAND AND BUILDING SOLD SHALL BE
RETURNED TO THE SELLER BUT ALSO THE RENTAL PAYMENTS PAID, IF ANY. [T]he point may be raised that under Article
1164 of the Civil Code, Equatorial as buyer acquired a right to the fruits of the thing sold from the time the obligation to deliver the
property to petitioner arose. That time arose upon the perfection of the Contract of Sale on July 30, 1978, from which moment the laws
provide that the parties to a sale may reciprocally demand performance. Does this mean that despite the judgment rescinding the sale,
the right to the fruits belonged to, and remained enforceable by, Equatorial? Article 1385 of the Civil Code answers this question in the
negative, because [r]escission creates the obligation to return the things which were the object of the contract, together with their fruits,
and the price with its interest; . . . . Not only the land and building sold, but also the rental payments paid, if any, had to be returned by
the buyer.

ID.; SALES; CONTRACT OF SALE; RENTAL PAYMENTS MADE SHOULD NOT BE CONSTRUED AS A RECOGNITION OF THE
BUYER AS NEW ORDER BUT MERELY TO AVOID IMMINENT EVICTION; CASE AT BAR. The fact that Mayfair paid rentals to
Equatorial during the litigation should not be interpreted to mean either actual delivery or ipso facto recognition of Equatorials title. The
CA Records of the mother case show that Equatorial as alleged buyer of the disputed properties and as alleged successor-in-interest
of Carmelos rights as lessor submitted two ejectment suits against Mayfair. Filed in the Metropolitan Trial Court of Manila, the first was
docketed as Civil Case No. 121570 on July 9, 1987; and the second, as Civil Case No. 131944 on May 28, 1990. Mayfair eventually won
them both. However, to be able to maintain physical possession of the premises while awaiting the outcome of the mother case, it had no
choice but to pay the rentals. The rental payments made by Mayfair should not be construed as a recognition of Equatorial as the new
owner. They were made merely to avoid imminent eviction.

STATUTORY CONSTRUCTION; GENERAL PROPOSITIONS DO NOT DECIDE SPECIFIC CASES. As pointed out by Justice
Holmes, general propositions do not decide specific cases. Rather, laws are interpreted in the context of the peculiar factual situation of
each case. Each case has its own flesh and blood and cannot be decided on the basis of isolated clinical classroom principles.

CIVIL LAW; SALES; VALID FROM INCEPTION BUT JUDICIALLY RESCINDED BEFORE IT COULD BE CONSUMMATED; CASE AT
BAR. [T]he sale to Equatorial may have been valid from inception, but it was judicially rescinded before it could be consummated.
Petitioner never acquired ownership, not because the sale was void, as erroneously claimed by the trial court, but because the sale was
not consummated by a legally effective delivery of the property sold.

ID.; ID.; BUYER IN BAD FAITH; NOT ENTITLED TO ANY BENEFIT; ENTITLED SOLELY TO THE RETURN OF THE PURCHASE
PRICE; MUST BEAR ANY LOSS. [A]ssuming for the sake of argument that there was valid delivery, petitioner is not entitled to any
benefits from the rescinded Deed of Absolute Sale because of its bad faith. This being the law of the mother case decided in 1996, it
may no longer be changed because it has long become final and executory. . . . Thus, petitioner was and still is entitled solely to the
return of the purchase price it paid to Carmelo; no more, no less. This Court has firmly ruled in the mother case that neither of them is
entitled to any consideration of equity, as both took unconscientious advantage of Mayfair. In the mother case, this Court categorically
denied the payment of interest, a fruit of ownership. By the same token, rentals, another fruit of ownership, cannot be granted without
mocking this Courts en banc Decision, which has long become final. Petitioners claim of reasonable compensation for respondents use
 and occupation of the subject property from the time the lease expired cannot be countenanced. If it suffered any loss, petitioner must
bear it in silence, since it had wrought that loss upon itself. Otherwise, bad faith would be rewarded instead of punished.

ID.; ID.; ID.; ID.; APPLICABLE IN CASE AT BAR. Suffice it to say that, clearly, our ruling in the mother case bars petitioner from
claiming back rentals from respondent. Although the court a quo erred when it declared void from inception the Deed of Absolute Sale
between Carmelo and petitioner, our foregoing discussion supports the grant of the Motion to Dismiss on the ground that our prior
judgment in GR No. 106063 has already resolved the issue of back rentals. On the basis of the evidence presented during the hearing of
Mayfairs Motion to Dismiss, the trial court found that the issue of ownership of the subject property has been decided by this Court in
favor of Mayfair. . . . Hence, the trial court decided the Motion to Dismiss on the basis of res judicata, even if it erred in interpreting the
meaning of rescinded as equivalent to void. In short, it ruled on the ground raised; namely, bar by prior judgment. By granting the
Motion, it disposed correctly, even if its legal reason for nullifying the sale was wrong.

G.R. No. 137000, Aug. 9, 2000

o Principle of jus sanguinis

o How Philippine citizenship is acquired
o Effect of filing certificate of candidacy: express renunciation of other citizenship

FACTS:

Rosalind Ybasco Lopez was born on May 16, 1934 in Australia to a Filipino father and an Australian mother. In 1949, at the age of
fifteen, she left Australia and came to settle in the Philippines, where she later married a Filipino and has since then participated in the
electoral process not only as a voter but as a candidate, as well. In the May 1998 elections, she ran for governor but Valles filed a petition
for her disqualification as candidate on the ground that she is an Australian.

ISSUE:

o Whether or not Rosalind is an Australian or a Filipino

HELD:

The Philippine law on citizenship adheres to the principle of jus sanguinis. Thereunder, a child follows the nationality or citizenship of the
parents regardless of the place of his/her birth, as opposed to the doctrine of jus soli which determines nationality or citizenship on the
basis of place of birth.

Rosalind Ybasco Lopez was born a year before the 1935 Constitution took into effect and at that time, what served as the Constitution of
the Philippines were the principal organic acts by which the United States governed the country. These were the Philippine Bill of July 1,
1902 and the Philippine Autonomy Act of Aug. 29, 1916, also known as the Jones Law.

Under both organic acts, all inhabitants of the Philippines who were Spanish subjects on April 11, 1899 and resided therein including their
children are deemed to be Philippine citizens. Private respondents father, Telesforo Ybasco, was born on Jan. 5, 1879 in Daet,
Camarines Norte.... Thus, under the Philippine Bill of 1902 and the Jones Law, Telesforo Ybasco was deemed to be a Philippine citizen.
By virtue of the same laws, which were the laws in force at the time of her birth, Telesforos daughter, herein private respondent Rosalind
Ybasco Lopez, is likewise a citizen of the Philippines.

The signing into law of the 1935 Philippine Constitution has established the principle of jus sanguinis as basis for the acquisition of
Philippine citizenship, xxx

So also, the principle of jus sanguinis, which confers citizenship by virtue of blood relationship, was subsequently retained under the
1973 and 1987 Constitutions. Thus, the herein private respondent, Rosalind Ybasco Lopez, is a Filipino citizen, having been born to a
Filipino father. The fact of her being born in Australia is not tantamount to her losing her Philippine citizenship. If Australia follows the
principle of jus soli, then at most, private respondent can also claim Australian citizenship resulting to her possession of dual citizenship.

Tecson vs. COMELEC , GR 16134 , March 3, 2004

FACTS: Petitioners questioned the jurisdiction of the COMELEC in taking cognizance of and deciding the citizenship issue affecting
Fernando Poe Jr. They asserted that under Section 4(7) , Article VII of the 1987 Constituition, only the Supreme Court had original and
exclusive jurisdiction to resolve the basic issue of the case.

ISSUE: As the Presidential Electoral Tribunal (PET) , does the Supreme Court have jurisdiction over the qualifications of presidential
candidates?

RULING: No. An examination of the phraseology in Rule 12, 13, and Rule 14 of the "Rules of the Presidential Electoral Tribunal,"
promulgated by the Supreme Court on April 1992 categorically speak of the jurisdiction of the tribunal over contests relating to the
election, returns and qualifications of the "President" or "Vice-President", of the Philippines, and not of "candidates" for President or Vice-
President. A quo warranto proceeding is generally defined as being an action against a person who usurps, intrudes into, or unlawfully
holds or exercises a public office. In such context, the election contest can only contemplate a post-election scenario. In Rule 14, only a
registered candidate who would have received either the second or third highest number of votes could file an election protest. This rule
again presupposes a post-election scenario.

It is fair to conclude that the jurisdiction of the Supreme Court, defined by Section 4, paragraph 7, of the 1987 Constitution, would not
include cases directly brought before it, questioning the qualifications of a candidate for the presidency or vice-presidency before the
elections are held.

Mercado v. Manzano Case Digest [G.R. No. 135083. May 26, 1999]
FACTS:

Petitioner Ernesto Mercado and Eduardo Manzano were both candidates for Vice-Mayor of Makati in the May 11, 1998 elections.

Based on the results of the election, Manzano garnered the highest number of votes. However, his proclamation was suspended due to
the pending petition for disqualification filed by Ernesto Mercado on the ground that he was not a citizen of the Philippines but of the
United States.

From the facts presented, it appears that Manzano is both a Filipino and a US citizen.

The Commission on Elections declared Manzano disqualified as candidate for said elective position.

However, in a subsequent resolution of the COMELEC en banc, the disqualification of the respondent was reversed. Respondent was
held to have renounced his US citizenship when he attained the age of majority and registered himself as a voter in the elections of 1992,
1995 and 1998.

Manzano was eventually proclaimed as the Vice-Mayor of Makati City on August 31, 1998.

Thus the present petition.

ISSUE:

Whether or not a dual citizen is disqualified to hold public elective office in the philippines.

RULING:

The court ruled that the phrase "dual citizenship" in R.A. 7160 Sec. 40 (d) and R.A. 7854 Sec. 20 must be understood as referring to dual
allegiance. Dual citizenship is different from dual allegiance. The former arises when, as a result of the application of the different laws of
two or more states, a person is simultaneously considered a national by the said states. Dual allegiance on the other hand, refers to a
situation in which a person simultaneously owes, by some positive act, loyalty to two or more states. While dual citizenship is involuntary,
dual allegiance is a result of an individual's volition. Article IV Sec. 5 of the Constitution provides "Dual allegiance of citizens is inimical to
the national interest and shall be dealt with by law."

Consequently, persons with mere dual citizenship do not fall under this disqualification. Unlike those with dual allegiance, who must,
therefore, be subject to strict process with respect to the termination of their status, for candidates with dual citizenship, it should suffice
if, upon the filing of their certificates of candidacy, they elect Philippine citizenship to terminate their status as persons with dual
citizenship considering that their condition is the unavoidable consequence of conflicting laws of different states.

By electing Philippine citizenship, such candidates at the same time forswear allegiance to the other country of which they are also
citizens and thereby terminate their status as dual citizens. It may be that, from the point of view of the foreign state and of its laws, such
an individual has not effectively renounced his foreign citizenship. That is of no moment.

When a person applying for citizenship by naturalization takes an oath that he renounces his loyalty to any other country or government
and solemnly declares that he owes his allegiance to the Republic of the Philippines, the condition imposed by law is satisfied and
complied with. The determination whether such renunciation is valid or fully complies with the provisions of our Naturalization Law lies
within the province and is an exclusive prerogative of our courts. The latter should apply the law duly enacted by the legislative
department of the Republic. No foreign law may or should interfere with its operation and application.

The court ruled that the filing of certificate of candidacy of respondent sufficed to renounce his American citizenship, effectively removing
any disqualification he might have as a dual citizen. By declaring in his certificate of candidacy that he is a Filipino citizen; that he is not a
permanent resident or immigrant of another country; that he will defend and support the Constitution of the Philippines and bear true faith
and allegiance thereto and that he does so without mental reservation, private respondent has, as far as the laws of this country are
concerned, effectively repudiated his American citizenship and anything which he may have said before as a dual citizen.

On the other hand, private respondents oath of allegiance to the Philippines, when considered with the fact that he has spent his youth
and adulthood, received his education, practiced his profession as an artist, and taken part in past elections in this country, leaves no
doubt of his election of Philippine citizenship.

His declarations will be taken upon the faith that he will fulfill his undertaking made under oath. Should he betray that trust, there are
enough sanctions for declaring the loss of his Philippine citizenship through expatriation in appropriate proceedings. In Yu v. Defensor-
Santiago, the court sustained the denial of entry into the country of petitioner on the ground that, after taking his oath as a naturalized
citizen, he applied for the renewal of his Portuguese passport and declared in commercial documents executed abroad that he was a
Portuguese national. A similar sanction can be taken against any one who, in electing Philippine citizenship, renounces his foreign
nationality, but subsequently does some act constituting renunciation of his Philippine citizenship.

The petition for certiorari is DISMISSED for lack of merit.

IN RE PETITION FOR HABEAS CORPUS OF WILLIE YU VS. MIRIAM DEFENSOR-SANTIAGO, super digested

Posted by Pius Morados on November 9, 2011

GR # L-83882, January 24, 1989 (Constitutional Law Citizenship, Express Renunciation)

FACTS: In the case at bar, herein petitioner, despite his naturalization as a Philippine citizen, applied and renewed his Portuguese
passport. Moreover, while still a citizen of the Philippines, petitioner also declared his nationality as Portuguese in commercial documents
he signed.

ISSUE: Whether or not the acts of applying for a foreign passport and declaration of foreign nationality in commercial documents,
constitute an express renunciation of ones Philippine citizenship acquired through naturalization.

HELD: Yes, the foregoing acts considered together constitute an express renunciation of petitioners Philippine citizenship acquired
through naturalization. In a related jurisprudence, express renunciation was held to mean a renunciation that is made known distinctly
and explicitly and not left to inference or implication.

BENGSON VS. HRET AND CRUZ

MARCH 28, 2013 ~ VBDIAZ
BENGSON vs. HRET and CRUZ
G.R. No. 142840
May 7, 2001

FACTS: The citizenship of respondent Cruz is at issue in this case, in view of the constitutional requirement that no person shall be a
Member of the House of Representatives unless he is a natural-born citizen.

Cruz was a natural-born citizen of the Philippines. He was born in Tarlac in 1960 of Filipino parents. In 1985, however, Cruz enlisted in
the US Marine Corps and without the consent of the Republic of the Philippines, took an oath of allegiance to the USA. As a
Consequence, he lost his Filipino citizenship for under CA No. 63 [(An Act Providing for the Ways in Which Philippine Citizenship May Be
Lost or Reacquired (1936)] section 1(4), a Filipino citizen may lose his citizenship by, among other, rendering service to or accepting
commission in the armed forces of a foreign country.

Whatever doubt that remained regarding his loss of Philippine citizenship was erased by his naturalization as a U.S. citizen in 1990, in
connection with his service in the U.S. Marine Corps.

In 1994, Cruz reacquired his Philippine citizenship through repatriation under RA 2630 [(An Act Providing for Reacquisition of Philippine
Citizenship by Persons Who Lost Such Citizenship by Rendering Service To, or Accepting Commission In, the Armed Forces of the
United States (1960)]. He ran for and was elected as the Representative of the 2nd District of Pangasinan in the 1998 elections. He won
over petitioner Bengson who was then running for reelection.

Subsequently, petitioner filed a case for Quo Warranto Ad Cautelam with respondent HRET claiming that Cruz was not qualified to
become a member of the HOR since he is not a natural-born citizen as required under Article VI, section 6 of the Constitution.
HRET rendered its decision dismissing the petition for quo warranto and declaring Cruz the duly elected Representative in the said
election.

ISSUE: WON Cruz, a natural-born Filipino who became an American citizen, can still be considered a natural-born Filipino upon his
reacquisition of Philippine citizenship.

HELD: petition dismissed

YES

Filipino citizens who have lost their citizenship may however reacquire the same in the manner provided by law. C.A. No. 63 enumerates
the 3 modes by which Philippine citizenship may be reacquired by a former citizen:

1. by naturalization,
2. by repatriation, and
3. by direct act of Congress.
**

Repatriation may be had under various statutes by those who lost their citizenship due to:

1. desertion of the armed forces;

2. services in the armed forces of the allied forces in World War II;
3. service in the Armed Forces of the United States at any other time,
4. marriage of a Filipino woman to an alien; and
5. political economic necessity

Repatriation results in the recovery of the original nationality This means that a naturalized Filipino who lost his citizenship will be
restored to his prior status as a naturalized Filipino citizen. On the other hand, if he was originally a natural-born citizen before he lost his
Philippine citizenship, he will be restored to his former status as a natural-born Filipino.

R.A. No. 2630 provides:

Sec 1. Any person who had lost his Philippine citizenship by rendering service to, or accepting commission in, the Armed Forces of the
United States, or after separation from the Armed Forces of the United States, acquired United States citizenship, may reacquire
Philippine citizenship by taking an oath of allegiance to the Republic of the Philippines and registering the same with Local Civil Registry
in the place where he resides or last resided in the Philippines. The said oath of allegiance shall contain a renunciation of any other
citizenship.

Having thus taken the required oath of allegiance to the Republic and having registered the same in the Civil Registry of Magantarem,
Pangasinan in accordance with the aforecited provision, Cruz is deemed to have recovered his original status as a natural-born citizen, a
status which he acquired at birth as the son of a Filipino father. It bears stressing that the act of repatriation allows him to recover, or
return to, his original status before he lost his Philippine citizenship.

Romualdez-Marcos vs COMELEC
TITLE: Romualdez-Marcos vs. COMELEC
CITATION: 248 SCRA 300

FACTS:

Imelda, a little over 8 years old, in or about 1938, established her domicile in Tacloban, Leyte where she studied and graduated high school in the
Holy Infant Academy from 1938 to 1949. She then pursued her college degree, education, in St. Pauls College now Divine Word University also in
Tacloban. Subsequently, she taught in Leyte Chinese School still in Tacloban. She went to manila during 1952 to work with her cousin, the late
speaker Daniel Romualdez in his office in the House of Representatives. In 1954, she married late President Ferdinand Marcos when he was still a
Congressman of Ilocos Norte and was registered there as a voter. When Pres. Marcos was elected as Senator in 1959, they lived together in San
Juan, Rizal where she registered as a voter. In 1965, when Marcos won presidency, they lived in Malacanang Palace and registered as a voter in San
Miguel Manila. She served as member of the Batasang Pambansa and Governor of Metro Manila during 1978.

Imelda Romualdez-Marcos was running for the position of Representative of the First District of Leyte for the 1995 Elections. Cirilo Roy Montejo, the
incumbent Representative of the First District of Leyte and also a candidate for the same position, filed a Petition for Cancellation and
Disqualification" with the Commission on Elections alleging that petitioner did not meet the constitutional requirement for residency. The petitioner,
in an honest misrepresentation, wrote seven months under residency, which she sought to rectify by adding the words "since childhood" in her
Amended/Corrected Certificate of Candidacy filed on March 29, 1995 and that "she has always maintained Tacloban City as her domicile or
residence. She arrived at the seven months residency due to the fact that she became a resident of the Municipality of Tolosa in said months.

ISSUE: Whether petitioner has satisfied the 1year residency requirement to be eligible in running as representative of the First District of Leyte.

HELD:

Residence is used synonymously with domicile for election purposes. The court are in favor of a conclusion supporting petitoners claim of legal
residence or domicile in the First District of Leyte despite her own declaration of 7 months residency in the district for the following reasons:

1. A minor follows domicile of her parents. Tacloban became Imeldas domicile of origin by operation of law when her father brought them to Leyte;

2. Domicile of origin is only lost when there is actual removal or change of domicile, a bona fide intention of abandoning the former residence and
establishing a new one, and acts which correspond with the purpose. In the absence and concurrence of all these, domicile of origin should be
deemed to continue.

3. A wife does not automatically gain the husbands domicile because the term residence in Civil Law does not mean the same thing in Political
Law. When Imelda married late President Marcos in 1954, she kept her domicile of origin and merely gained a new home and not domicilium
necessarium.

4. Assuming that Imelda gained a new domicile after her marriage and acquired right to choose a new one only after the death of Pres. Marcos, her
actions upon returning to the country clearly indicated that she chose Tacloban, her domicile of origin, as her domicile of choice. To add, petitioner
even obtained her residence certificate in 1992 in Tacloban, Leyte while living in her brothers house, an act, which supports the domiciliary intention
clearly manifested. She even kept close ties by establishing residences in Tacloban, celebrating her birthdays and other important milestones.

WHEREFORE, having determined that petitioner possesses the necessary residence qualifications to run for a seat in the House of Representatives in
the First District of Leyte, the COMELEC's questioned Resolutions dated April 24, May 7, May 11, and May 25, 1995 are hereby SET ASIDE.
Respondent COMELEC is hereby directed to order the Provincial Board of Canvassers to proclaim petitioner as the duly elected Representative of the
First District of Leyte.

MARCH 28, 2013 ~ VBDIAZ

NORTHWEST ORIENT AIRLINES, INC. vs. CA and C.F. SHARP & COMPANY INC.
G.R. No. 112573 February 9, 1995

FACTS: Petitioner Northwest Orient Airlines, Inc. (NORTHWEST), a corporation organized under the laws of the State of Minnesota, U.S.A., sought to
enforce in the RTC- Manila, a judgment rendered in its favor by a Japanese court against private respondent C.F. Sharp & Company, Inc., (SHARP), a
corporation incorporated under Philippine laws.

factual and procedural antecedents of this controversy:

On May 9, 1974, Northwest Airlines and Sharp, through its Japan branch, entered into an International Passenger Sales Agency Agreement, whereby
the former authorized the latter to sell its air transportation tickets. Unable to remit the proceeds of the ticket sales made by defendant on behalf of
the plaintiff under the said agreement, plaintiff on March 25, 1980 sued defendant in Tokyo, Japan, for collection of the unremitted proceeds of the
ticket sales, with claim for damages.

On April 11, 1980, a writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan against defendant at its office at the
Taiheiyo Building, 3rd floor, 132, Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture. The attempt to serve the summons was unsuccessful
because the bailiff was advised by a person in the office that Mr. Dinozo, the person believed to be authorized to receive court processes was in
Manila and would be back on April 24, 1980.

On April 24, 1980, bailiff returned to the defendants office to serve the summons. Mr. Dinozo refused to accept the same claiming that he was no
longer an employee of the defendant.

After the two attempts of service were unsuccessful, the judge of the Tokyo District Court decided to have the complaint and the writs of summons
served at the head office of the defendant in Manila. On July 11, 1980, the Director of the Tokyo District Court requested the Supreme Court of Japan
to serve the summons through diplomatic channels upon the defendants head office in Manila.
On August 28, 1980, defendant received from Deputy Sheriff Rolando Balingit the writ of summons (p. 276, Records). Despite receipt of the same,
defendant failed to appear at the scheduled hearing. Thus, the Tokyo Court proceeded to hear the plaintiffs complaint and on [January 29, 1981],
rendered judgment ordering the defendant to pay the plaintiff the sum of 83,158,195 Yen and damages for delay at the rate of 6% per annum from
August 28, 1980 up to and until payment is completed (pp. 12-14, Records).

On March 24, 1981, defendant received from Deputy Sheriff Balingit copy of the judgment. Defendant not having appealed the judgment, the same
became final and executory.

Plaintiff was unable to execute the decision in Japan, hence, on May 20, 1983, a suit for enforcement of the judgment was filed by plaintiff before the
Regional Trial Court of Manila Branch 54.

defendant filed its answer averring that the judgment of the Japanese Court: (1) the foreign judgment sought to be enforced is null and void for want
of jurisdiction and (2) the said judgment is contrary to Philippine law and public policy and rendered without due process of law.

In its decision, the Court of Appeals sustained the trial court. It agreed with the latter in its reliance upon Boudard vs. Tait wherein it was held that
the process of the court has no extraterritorial effect and no jurisdiction is acquired over the person of the defendant by serving him beyond the
boundaries of the state. To support its position, the Court of Appeals further stated:
In an action strictly in personam, such as the instant case, personal service of summons within the forum is required for the court to acquire
jurisdiction over the defendant (Magdalena Estate Inc. vs. Nieto, 125 SCRA 230). To confer jurisdiction on the court, personal or substituted service of
summons on the defendant not extraterritorial service is necessary.

ISSUE: whether a Japanese court can acquire jurisdiction over a Philippine corporation doing business in Japan by serving summons through
diplomatic channels on the Philippine corporation at its principal office in Manila after prior attempts to serve summons in Japan had failed.

HELD: YES

A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is also proper to presume
the regularity of the proceedings and the giving of due notice therein. 6
The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact.(See Sec. 50, R 39)

Being the party challenging the judgment rendered by the Japanese court, SHARP had the duty to demonstrate the invalidity of such judgment.
It is settled that matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lex fori or
the internal law of the forum. 8 In this case, it is the procedural law of Japan where the judgment was rendered that determines the validity of the
extraterritorial service of process on SHARP. As to what this law is is a question of fact, not of law.
It was then incumbent upon SHARP to present evidence as to what that Japanese procedural law is and to show that under it, the assailed
extraterritorial service is invalid. It did not. Accordingly, the presumption of validity and regularity of the service of summons and the decision
thereafter rendered by the Japanese court must stand.
Alternatively in the light of the absence of proof regarding Japanese law, the presumption of identity or similarity or the so-called processual
presumption may be invoked. Applying it, the Japanese law on the matter is presumed to be similar with the Philippine law on service of summons
on a private foreign corporation doing business in the Philippines.

Section 14, Rule 14 of the Rules of Court provides that if the defendant is a foreign corporation doing business in the Philippines, service may be
made: (1) on its resident agent designated in accordance with law for that purpose, or, (2) if there is no such resident agent, on the government
official designated by law to that effect; or (3) on any of its officers or agents within the Philippines.

Where the corporation has no such agent, service shall be made on the government official designated by law, to wit: (a) the Insurance
Commissioner in the case of a foreign insurance company; (b) the Superintendent of Banks, in the case of a foreign banking corporation; and (c) the
Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do business in the Philippines.

Nowhere in its pleadings did SHARP profess to having had a resident agent authorized to receive court processes in Japan.
While it may be true that service could have been made upon any of the officers or agents of SHARP at its three other branches in Japan, the
availability of such a recourse would not preclude service upon the proper government official, as stated above.
As found by the respondent court, two attempts at service were made at SHARPs Yokohama branch. Both were unsuccessful.
The Tokyo District Court requested the Supreme Court of Japan to cause the delivery of the summons and other legal documents to the Philippines.
Acting on that request, the Supreme Court of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of
Japan which, in turn, forwarded the same to the Japanese Embassy in Manila . Thereafter, the court processes were delivered to the Ministry (now
Department) of Foreign Affairs of the Philippines, then to the Executive Judge of the Court of First Instance (now Regional Trial Court) of Manila, who
forthwith ordered Deputy Sheriff Rolando Balingit to serve the same on SHARP at its principal office in Manila. This service is equivalent to service on
the proper government official under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code. Hence, SHARPs
contention that such manner of service is not valid under Philippine laws holds no water.

We find NORTHWESTs claim for attorneys fees, litigation expenses, and exemplary damages to be without merit. We find no evidence that would
justify an award for attorneys fees and litigation expenses under Article 2208 of the Civil Code of the Philippines. Nor is an award for exemplary
damages warranted.

WHEREFORE, the instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it denied NORTHWESTs claims for attorneys
fees, litigation expenses, and exemplary damages but REVERSED insofar as in sustained the trial courts dismissal of NORTHWESTs complaint in Civil
Case No. 83-17637 of Branch 54 of the Regional Trial Court of Manila, and another in its stead is hereby rendered ORDERING private respondent C.F.
SHARP L COMPANY, INC. to pay to NORTHWEST the amounts adjudged in the foreign judgment subject of said case, with interest thereon at the legal
rate from the filing of the complaint therein until the said foreign judgment is fully satisfied.

State Investment House, Inc. vs. Citibank, et al, G.R. No. 79926-27, Oct. 17, 1991

FACTS:

Consolidated Mines, Inc. (CMI) obtained loans from Citibank, Bank of America and HSBC, all foreign corporations but with branches in the Philippines.
Meanwhile, State Investment House, Inc. (SIHI) and State Financing Center, Inc. (SFCI), also creditors of CMI, filed collection suits against the latter
with writs of preliminary attachment. Subsequently, the three banks jointly filed with the court a petition for involuntary insolvency of CMI. SHI and
SFCI opposed the petition on the ground that the petitioners are not resident creditors in contemplation of the Insolvency Law.

ISSUE: Whether or not a foreign corporation with a branch in the Philippines and doing business therein can be considered a resident

HELD:

Foreign corporations duly licensed to do business in the Philippines are considered residents of the Philippines, as the word is understood in Sec.
20 of the Insolvency Law, authorizing at least three resident creditors of the Philippines to file a petition to declare a corporation insolvent. The Tax
Code declares that the term resident foreign corporation applies to foreign corporation engaged in trade or business within the Philippines as
distinguished from a non-resident foreign corporation which is not engaged in trade or business within the Philippines. The Offshore Banking Law
sates that: Branches, subsidiaries, affiliates, extension offices or any other units of corporation or juridical person organized under the laws of any
foreign country operating in the Philippines shall be considered residents of the Philippines. The General Banking Act places branches and agencies
in the Philippines of foreign banks in the category as commercial banks, rural banks, stock savings and loan association making no distinction
between the former ad the latter in so far as the terms banking institutions and banks are used in said Act.

Gamboa v. Teves (G.R. No. 176579; June 28, 2011)

CASE DIGEST: WILSON P. GAMBOA v. FINANCE SECRETARY MARGARITO B. TEVES, et al.

FACTS:
In 1969, General Telephone and Electronics Corporation (GTE), sold 26 percent of the outstanding common shares of PLDT to Philippine
Telecommunications Investment Corporation (PTIC). In 1977, Prime Holdings, Inc. (PHI) became the owner of 111,415 shares of stock of PTIC. In
1986, the 111,415 shares of stock of PTIC held by PHI were sequestered by the Presidential Commission on Good Government (PCGG). The 111,415
PTIC shares, which represent about 46.125 percent of the outstanding capital stock of PTIC, were later declared by this Court to be owned by the
Republic of the Philippines.

In 1999, First Pacific, a Bermuda-registered acquired the remaining 54 percent of the outstanding capital stock of PTIC. On 20 November 2006, the
Inter-Agency Privatization Council (IPC) of the Philippine Government through a public bidding sold the same shares to Parallax Venture who won
with a bid of P25.6 billion or US$510 million.

Thereafter, First Pacific announced that it would exercise its right of first refusal as a PTIC stockholder and buy the 111,415 PTIC shares by matching
the bid price of Parallax. On 14 February 2007, First Pacific, through its subsidiary, MPAH, entered into a Conditional Sale and Purchase Agreement of
the 111,415 PTIC shares, or 46.125 percent of the outstanding capital stock of PTIC, with the Philippine Government for the price of P25,217,556,000
or US$510,580,189. The sale was completed on 28 February 2007.

Since PTIC is a stockholder of PLDT, the sale by the Philippine Government of 46.125 percent of PTIC shares is actually an indirect sale of 12 million
shares or about 6.3 percent of the outstanding common shares of PLDT. With the sale, First Pacific common shareholdings in PLDT increased from
30.7 percent to 37 percent, thereby increasing the common shareholdings of foreigners in PLDT to about 81.47 percent. This, according to petitioner,
violates Section 11, Article XII of the 1987 Philippine Constitution which limits foreign ownership of the capital of a public utility to not more than 40
percent.

On 28 February 2007, petitioner filed the instant petition for prohibition, injunction, declaratory relief, and declaration of nullity of sale of the
111,415 PTIC shares.

ISSUE: Does the term "capital" in Section 11, Article XII of the Constitution refer to the total common shares only or to the total outstanding capital
stock of PLDT, a public utility?

HELD:

Section 11, Article XII (National Economy and Patrimony) of the 1987 Constitution mandates the Filipinization of public utilities, to wit:

Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such
citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such
franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the
common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign
investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of the Philippines.

The intent of the framers of the Constitution in imposing limitations and restrictions on fully nationalized and partially nationalized activities is for
Filipino nationals to be always in control of the corporation undertaking said activities. Otherwise, if the Trial Court ruling upholding respondent's
arguments were to be given credence, it would be possible for the ownership structure of a public utility corporation to be divided into one percent
(1%) common stocks and ninety-nine percent (99%) preferred stocks. Following the Trial Court ruling adopting respondent's arguments, the common
shares can be owned entirely by foreigners thus creating an absurd situation wherein foreigners, who are supposed to be minority shareholders,
control the public utility corporation.

The term "capital" in Section 11, Article XII of the Constitution refers only to shares of stock entitled to vote in the election of directors, and thus in
the present case only to common shares, and not to the total outstanding capital stock comprising both common and non-voting preferred shares.

Indisputably, one of the rights of a stockholder is the right to participate in the control or management of the corporation. This is exercised through
his vote in the election of directors because it is the board of directors that controls or manages the corporation. In the absence of provisions in the
articles of incorporation denying voting rights to preferred shares, preferred shares have the same voting rights as common shares. However,
preferred shareholders are often excluded from any control, that is, deprived of the right to vote in the election of directors and on other matters, on
the theory that the preferred shareholders are merely investors in the corporation for income in the same manner as bondholders. In fact, under the
Corporation Code only preferred or redeemable shares can be deprived of the right to vote. Common shares cannot be deprived of the right to vote
in any corporate meeting, and any provision in the articles of incorporation restricting the right of common shareholders to vote is invalid.

Considering that common shares have voting rights which translate to control, as opposed to preferred shares which usually have no voting rights,
the term "capital" in Section 11, Article XII of the Constitution refers only to common shares. However, if the preferred shares also have the right to
vote in the election of directors, then the term "capital" shall include such preferred shares because the right to participate in the control or
management of the corporation is exercised through the right to vote in the election of directors. In short, the term "capital" in Section 11, Article XII
of the Constitution refers only to shares of stock that can vote in the election of directors.
 This interpretation is consistent with the intent of the framers of the Constitution to place in the hands of Filipino citizens the control and
management of public utilities. Thus, 60 percent of the "capital" assumes, or should result in, "controlling interest" in the corporation and thus
in the present case, only to common shares, and not to the total outstanding capital stock (common and non-voting preferred shares).

Recent Developments

In a recent decision, Roy III v. Chairperson Teresita Herbosa, et. al. (Roy Case)[1], the Supreme Court affirmed that the guidelines issued by the Philippine Securities
and Exchange Commission (SEC) (SEC Guidelines) on determining compliance with foreign equity restrictions of corporations engaged in nationalized activities are
valid. The pronouncements of the Supreme Court in the Roy Case should serve as a definite direction on how affected corporations should structure its equity.
Implications for corporations engaged in activities subject to foreign equity restrictions

The SEC Guidelines[2] require corporations engaged in activities subject to foreign equity restrictions to, at all times, observe the constitutional or statutory ownership
requirements. For purposes of determining such compliance, the required percentage of Filipino equity should be applied to both (a) the total number of outstanding
shares of stock entitled to vote in the election of directors, and (b) the total number of outstanding shares of stock, whether or not entitled to vote in the election of
directors. The Roy Case has affirmed that such method of determining compliance with the required Filipino equity is in accordance with the pronouncements of the
Supreme Court in an earlier case which prompted the drafting of the SEC Guidelines.
What the Roy Case says

The SEC Guidelines were issued as a result of the Supreme Court's directive to the SEC to apply the Supreme Court's interpretation of "capital" in the case of Gamboa
v. Teves ("Gamboa Case")[3]. In the Gamboa Case, the Supreme Court ruled that "capital," as used in the Constitution imposing a 60% minimum Filipino capital
requirement on public utilities, should refer to shares entitled to vote in the election of the directors. In a resolution denying the motions for reconsideration filed in
connection with the Gamboa Case ("Resolution")[4], the Supreme Court noted that in addition to applying the required percentage of Filipino ownership on shares
entitled to vote in the election of directors, such Filipino ownership requirement must also apply separately to each class of shares in the public utility.

The Roy Case has clarified that the pronouncement of the Supreme Court on requiring the minimum percentage of Filipino ownership to separately apply to each class
of shares in the Resolution is a mere obiter dictum, and should not be binding.

Aside from confirming that the SEC Guidelines reflect the proper application of the required Filipino ownership imposed in the Constitution on public utilities, the Roy
Case is notable on the following points, in relation to foreign equity restrictions on such operators:

It clarified that for shares to be deemed owned and held by Philippine citizens or Philippine nationals, both egal title and beneficial ownership must rest in the hands of
Filipinos. "Beneficial ownership"[5] was defined as having the voting power or the investment power (power to dispose of the stock or direct another to dispose the
stock), or both, over a 'specific stock'. Based on such definition, the Supreme Court ruled that, "if a 'specific stock' is owned by a Filipino in the books of the corporation,
but such stock's voting power or disposing power belongs to a foreigner, then that 'specific stock' will not be deemed as 'beneficially owned' by a Filipino."
It explained that "the 'beneficial owner or beneficial ownership' definition, as above, is understood only in determining the respective nationalities of the outstanding
capital stock of a public utility corporation in order to determine its compliance with the percentage of Filipino ownership required by the Constitution."
It provided an example on how to determine the compliance of the required Filipino equity based on the number of shares of the entity.
It recognized the flexibility granted to corporations to create shares of different classes, with varying features to attract and generate capital (funds) from both local and
foreign capital markets.
Actions to Consider

The Supreme Courts ruling in the Roy Case on the validity of the SEC Guidelines and clarifying the requirement to satisfy both the voting test and beneficial ownership
test may bring about significant changes to the equity structures of corporations engaged in nationalized activities. To ensure compliance with the Roy Case, the SEC
Guidelines, and other applicable jurisprudence, corporations with foreign equity and engaged in nationalized industries may wish to review its equity structures, and
take steps to ensure that these structures comply with the foregoing.

Philippine procedural rules allow a party to file a motion for reconsideration of a judgment or final resolution of the Supreme Court within fifteen days from notice
thereof. Should such motion relative to the Roy Case be filed before the Supreme Court, affected corporations should also be watchful of any clarifications or
pronouncements of the Supreme Court in the potential resolution deciding such motion.
 Bank of America, NT vs. American Realty Corporation

G.R. No. 133876, Dec. 29, 1999

When foreign laws, despite having been duly presented and proven, may not be given application

FACTS:

Petitioner Bank of America (BANTSA) is an international banking and financing institution duly licensed to do business in the Philippines,
organized and existing under and by virtue of the laws of the State of California, USA while private respondent American Realty (ARC) is
a domestic corporation.

On numerous occasions, BANTSA and Bank of America International Limited (BAIL), organized under the laws of England, granted US
Dollar loans to certain foreign corporate borrowers. These loans were later restructured, the restructured loans secured by two real estate
mortgages with private respondent ARC as third-party mortgagor. When the corporate borrowers defaulted, BANTSA sued them for
collection before foreign courts, without impleading ARC as party-defendant. While these civil suits are still pending before the foreign
courts, BANTSA filed an extra-judicial foreclosure of real estate mortgage before the Office of the Provincial Sheriff of Bulacan,
Philippines. The properties were sold at public auction, prompting ARC to file this action for damages against BANTSA.

The trial court ruled in favour of ARC and this was affirmed by the CA. Hence, this appeal.

ISSUES:

Whether or not the petitioners act of filing a collection suit against the principal debtors for the recovery of the loan before foreign courts
constituted waiver of the remedy of foreclosure

o Whether or not the award by the lower court of actual and exemplary damages in favour of private respondent ARC, as third-party
mortgagor, is proper

HELD:

THEORIES OF PETITIONER:

A waiver of the remedy of foreclosure requires the concurrence of 2 requisites: an ordinary civil action for collection should be filed and subsequently
a final judgment be correspondingly rendered therein.

1. Under English law, which according to petitioner is the governing law with regard to the principal agreements, the mortgagee does not lose its
security interest by simply filing civil actions for sums of money.
1.

REMEDIES ARE ALTERNATIVE, NOT CUMULATIVE: A mortgage creditor may institute against the mortgage debtor either a personal
action for debt or a real action to foreclose the mortgage.

In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative. Notably, an election of one
remedy operates as a waiver of the other. For this purpose, a remedy is deemed chosen upon the filing of the suit for collection or upon
the filing of the complaint in an action for foreclosure of mortgage, pursuant to the provision of Rule 68 of the 1997 Rules of Civil
Procedure. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the petition not with any
court of justice but with the Office of the Sheriff of the province where the sale is to be made.

In the case at bench, private respondent ARC constituted real estate mortgages over its properties as security for the debt of the principal
debtors. By doing so, private respondent subjected itself to the liabilities of a third party mortgagor. Under the law, third persons who are
not parties to a loan may secure the latter by pledging or mortgaging their own property.

Notwithstanding, there is no legal provision nor jurisprudence in our jurisdiction which makes a third person who secures the fulfillment of
anothers obligation by mortgaging his own property, to be solidarily bound with the principal obligor. The signatory to the principal
contractloanremains to be primarily bound. It is only upon default of the latter that the creditor may have recourse on the mortgagors
by foreclosing the mortgaged properties in lieu of an action for the recovery of the amount of the loan.

In the instant case, petitioners contention that the requisites of filing the action for collection and rendition of final judgment therein
should concur, is untenable.

PHILIPPINE LAW, NOT ENGLISH LAW, SHALL APPLY: In the case at bench, Philippine law shall apply notwithstanding the evidence
presented by petitioner to prove the English law on the matter.

In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that there is judicial notice of any foreign law.
A foreign law must be properly pleaded and proved as a fact. Thus, if the foreign law involved is not properly pleaded and proved, our
courts will presume that the foreign law is the same as our local or domestic or internal law. This is what we refer to as the doctrine of
processual presumption.

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved xxx, said foreign law would
still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law,
judgment or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy
and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon
in a foreign country.

The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the splitting of a single
cause of action.

Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum.
To give justice is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the
fundamental principles of Conflict of Laws.

Clearly then, English Law is not applicable.

Award of Damages

As to the second pivotal issue, we hold that the private respondent is entitled to the award of actual or compensatory damages inasmuch
as the act of petitioner BANTSA in extrajudicially foreclosing the real estate mortgages constituted a clear violation of the rights of herein
private respondent ARC, as third-party mortgagor.