TITLE: Tenchavez vs.

Escano
CITATION: 15 SCRA 355

FACTS:
27 years old Vicenta Escano who belong to a prominent Filipino Family of Spanish
ancestry got married on Feburary 24, 1948 with Pastor Tenchavez, 32 years old
engineer, and ex-army officer before Catholic chaplain Lt. Moises Lavares. The
marriage was a culmination of the love affair of the couple and was duly registered in
the local civil registry. A certain Pacita Noel came to be their match-maker and go-
between who had an amorous relationship with Tenchavez as written by a San Carlos
college student where she and Vicenta are studying. Vicenta and Pastor are supposed
to renew their vows/ marriage in a church as suggested by Vicenta’s parents. However
after translating the said letter to Vicenta’s dad , he disagreed for a new marriage.
Vicenta continued leaving with her parents in Cebu while Pastor went back to work in
Manila.

Vicenta applied for a passport indicating that she was single and when it was approved
she left for the United States and filed a complaint for divorce against Pastor which was
later on approved and issued by the Second Judicial Court of the State of Nevada. She
then sought for the annulment of her marriage to the Archbishop of Cebu. Vicenta
married Russell Leo Moran, an American, in Nevada and has begotten children. She
acquired citizenship on August 8, 1958. Petitioner filed a complaint against Vicenta and
her parents whom he alleged to have dissuaded Vicenta from joining her husband.

ISSUE: Whether the divorce sought by Vicenta Escano is valid and binding upon courts
of the Philippines.

HELD:
Civil Code of the Philippines does not admit divorce. Philippine courts cannot give
recognition on foreign decrees of absolute divorce between Filipino citizens because it
would be a violation of the Civil Code. Such grant would arise to discrimination in favor
of rich citizens who can afford divorce in foreign countries. The adulterous relationship
of Escano with her American husband is enough grounds for the legal separation
prayed by Tenchavez. In the eyes of Philippine laws, Tenchavez and Escano are still
married. A foreign divorce between Filipinos sought and decreed is not entitled to
recognition neither is the marriage of the divorcee entitled to validity in the Philippines.
Thus, the desertion and securing of an invalid divorce decree by one spouse entitled the
other for damages.
WHEREFORE, the decision under appeal is hereby modified as follows;
(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal
separation from defendant Vicenta F. Escaño;
(2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant Tenchavez
the amount of P25,000 for damages and attorneys' fees;
(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño and
the estate of his wife, the deceased Mena Escaño, P5,000 by way of damages and
attorneys' fees.

Van Dorn vs. Romillo

139 SCRA 139

FACTS:

Alice Reyes Van Dorn, a Filipino Citizen and private respondent, Richard Upton, a US
citizen, was married in Hong Kong in 1979. They established their residence in the
Philippines and had 2 children. They were divorced in Nevada, USA in 1982 and
petitioner remarried, this time with Theodore Van Dorn. A suit against petitioner was
filed on June 8, 1983, stating that petitioner’s business in Ermita Manila, the Galleon
Shop, is a conjugal property with Upton and prayed therein that Alice be ordered to
render an accounting of the business and he be declared as the administrator of the
said property.

ISSUE: Whether or not the foreign divorce between the petitioner and private
respondent in Nevada is binding in the Philippines where petitioner is a Filipino citizen.

HELD:

Private respondent is no longer the husband of the petitioner. He would have no

standing to sue petitioner to exercise control over conjugal assets. He is estopped by
his own representation before the court from asserting his right over the alleged
conjugal property. Furthermore, aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to their national law.
Petitioner is not bound to her marital obligations to respondent by virtue of her
nationality laws. She should not be discriminated against her own country if the end of
justice is to be served.

San Luis v. San Luis, G.R. No. 133743, February 6, 2007

October 14, 2016

by Rossville “Aeron” B. Violanta

FACTS:

Felicisimo T. San Luis was the former governor of the Province of Laguna. He
contracted three marriages. His first was with Virginia Sulit on March 17, 1942 out of
which were born six children, but Virginia died on 1963. On May 1, 1968, He married
Merry Lee Corwin, with whom he had a son. But on October 15, 1971, Merry Lee, an
American citizen, filed a Complaint for Divorce at State of Hawaii which issued a Decree
Granting Absolute Divorce and Awarding Child Custody of December 14, 1973.
On June 20, 1974, He married Felicidad Sagalongos. He had no children but lived with
her for 18 years from the time of their marriage up to his death on December 18, 1992.
Felicidad sought the dissolution of their conjugal partnership assets and the settlement
of Felicisimo’s estate, filing a letter of administration before RTC Makati. Rodolfo filed a
motion to dismiss on the ground of improper venue and failure to state a cause of
action. Further claimed that Felicidad has no legal personality to file the petition
because she only a mistress of his father because at the time of death, he was still
married to his second wife. Felicidad presented the evidence that prove the marriage of
Felicisimo to Merry lee had already been dissolved. And she claimed that Felicisimo
had the capacity to marry her by virtue of par. 2 Article 26 of the family code.

ISSUE:

Whether or not Felicidad my file for letters of administration over Felicisimo’s state.

HELD:

Yes, Felicidad has the legal capacity to file the subject petition for letters of
administration may arise from her status that as a surviving wife of Felicisimo or his co-
owner under the Art. 144 of the Civil code.

Even assuming that Felicisimo was not capacitated to marry the respondent in 1974,
the latter has the legal personality to file the subject petition for letters of administration,
as he may be considered the co-owner of Felicisimo as regards that were acquired
through their joint efforts during their cohabitation.
ROEHR vs. RODRIGUEZ
G.R. No. 142820, 20 June 2003

FACTS:
Petitioner Wolfgang O. Roehr, a German citizen, married private respondent Carmen
Rodriguez, a Filipina, on December 11, 1980 in Germany. Their marriage was
subsequently ratified on February 14, 1981 in Tayasan, Negros Oriental. Out of their
union were born Carolynne and Alexandra Kristine.

Carmen filed a petition for declaration of nullity of marriage before the Makati RTC.
Meanwhile, Wolfgang obtained a decree of divorce from Germany. The decree provides
that the parental custody of the children should be vested to Wolfgang. Wolfgang filed a
motion to dismiss the nullity case as a divorce decree had already been promulgated,
which was granted by respondent Judge Salonga.

Carmen filed a motion with a prayer that the case should proceed for the purpose of
determining the issues of custody of children and the distribution of the properties
between her and Wolfgang. Judge Salonga partially set aside her previous order for the
purpose of tackling the issues of support and custody of their children.

ISSUES:
Whether or not the granting the motion to dismiss the nullity case valid ; it is valid to
assume jurisdiction to tackle child custody and support.

HELD:
A judge can order a partial reconsideration of a case that has not yet attained finality.
The court can modify or alter a judgment even after the same has become executory
whenever circumstances transpire rendering its decision unjust and inequitable. Where
certain facts and circumstances justifying or requiring such modification or alteration
transpired after the judgment has become final and executory and when it becomes
imperative in the higher interest of justice or when supervening events warrant it.

Divorce decrees obtained by foreigners in other countries are recognized in our

jurisdiction, but the legal effects thereof, such as custody must still be determined by our
courts. Before our courts can give the effect of res judicata to a foreign judgment, it
must be shown that the parties opposed to the judgment had been given ample
opportunity to do so. In the present case, it cannot be said that private respondent was
given the opportunity to challenge the judgment of the German court. The trial court was
correct in setting the issue for hearing to determine the issue of parental custody, care,
support and education mindful of the best interests of the children.
Republic vs. Orbecido
GR NO. 154380, October 5, 2005

FACTS:

Cipriano Orbecido III was married with Lady Myros Villanueva on May 24, 1981 at the
United Church of Christ in the Philippines in Ozamis City. They had a son and a
daughter named Kristoffer and Kimberly, respectively. In 1986, the wife left for US
bringing along their son Kristoffer. A few years later, Orbecido discovered that his wife
had been naturalized as an American citizen and learned from his son that his wife
sometime in 2000 had obtained a divorce decree and married a certain Stanley. He
thereafter filed with the trial court a petition for authority to remarry invoking Paragraph 2
of Article 26 of the Family Code.

ISSUE: Whether or not Orbecido can remarry under Article 26 of the Family Code.

HELD:

The court ruled that taking into consideration the legislative intent and applying the rule
of reason, Article 26 Par.2 should be interpreted to include cases involving parties who,
at the time of the celebration of the marriage were Filipino citizens, but later on, one of
them becomes naturalized as a foreign citizen and obtains a divorce decree. The
Filipino spouse should likewise be allowed to remarry as if the other party were a
foreigner at the time of the solemnization of the marriage.

Hence, the court’s unanimous decision in holding Article 26 Par 2 be interpreted as

allowing a Filipino citizen who has been divorced by a spouse who had acquired a
citizenship and remarried, also to remarry under Philippine law.

Fujiki v Marinay
2013

MINORU FUJIKI, Petitioner, -versus- MARIA PAZ GALELA MARINAY, SHINICHI

MAEKARA, LOCAL CIVIL REGISTRAR OF QUEZON CITY, and THE
ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE NATIONAL
STATISTICS OFFICE,

FACTS:
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria
Paz Galela Marinay (Marinay) in the Philippines on 23 January 2004. The marriage did
not sit well with petitioner’s parents. Thus, Fujiki could not bring his wife to Japan where
he resides. Eventually, they lost contact with each other.
In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first
marriage being dissolved, Marinay and Maekara were married on 15 May 2008 in
Quezon City, Philippines. Maekara brought Marinay to Japan. However, Marinay
allegedly suffered physical abuse from Maekara. She left Maekara and started to
contact Fujiki.
Fujiki and Marinay met in Japan and they were able to reestablish their relationship. In
2010, Fujiki helped Marinay obtain a judgment from a family court in Japan which
declared the marriage between Marinay and Maekara void on the ground of bigamy. On
14 January 2011, Fujiki filed a petition in the RTC entitled: “Judicial Recognition of
Foreign Judgment (or Decree of Absolute Nullity of Marriage).”

DECISION OF LOWER COURTS:

(1) RTC: dismissed the petition for "Judicial Recognition of Foreign Judgment ·(or
Decree of Absolute Nullity of Marriage)" based on improper venue and the lack of
personality of petitioner, Minoru Fujiki, to file the petition.

ISSUES & RULING:

(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) is applicable.

No. Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of

Voidable Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to recognize a
foreign judgment relating to the status of a marriage where one of the parties is a citizen
of a foreign country. Moreover, in Juliano-Llave v. Republic, this Court held that the rule
in A.M. No. 02- 11-10-SC that only the husband or wife can file a declaration of nullity or
annulment of marriage “does not apply if the reason behind the petition is
bigamy.” While the Philippines has no divorce law, the Japanese Family Court judgment
is fully consistent with Philippine public policy, as bigamous marriages are declared void
from the beginning under Article 35(4) of the Family Code. Bigamy is a crime under
Article 349 of the Revised Penal Code. Thus, Fujiki can prove the existence of the
Japanese Family Court judgment in accordance with Rule 132, Sections 24 and 25, in
relation to Rule 39, Section 48(b) of the Rules of Court.

(2) Whether a husband or wife of a prior marriage can file a petition to recognize a
foreign judgment nullifying the subsequent marriage between his or her spouse and a
foreign citizen on the ground of bigamy.

Yes. “[t]he recognition of the foreign divorce decree may be made in a Rule 108
proceeding itself, as the object of special proceedings (such as that in Rule 108 of the
Rules of Court) is precisely to establish the status or right of a party or a particular
fact.”
Rule 108, Section 1 of the Rules of Court states:
Sec. 1. Who may file petition. — Any person interested in any act, event, order or
decree concerning the civil status of persons which has been recorded in the civil
register, may file a verified petition for the cancellation or correction of any entry
relating thereto, with the Regional Trial Court of the province where the corresponding
civil registry is located. (Emphasis supplied)
There is no doubt that the prior spouse has a personal and material interest in
maintaining the integrity of the marriage he contracted and the property relations arising
from it.

(3) Whether the Regional Trial Court can recognize the foreign judgment in a
proceeding for cancellation or correction of entries in the Civil Registry under Rule 108
of the Rules of Court.

Yes. There is neither circumvention of the substantive and procedural safeguards of

marriage under Philippine law, nor of the jurisdiction of Family Courts under R.A. No.
8369. A recognition of a foreign judgment is not an action to nullify a marriage. It is an
action for Philippine courts to recognize the effectivity of a foreign judgment, which
presupposes a case which was already tried and decided under foreign law.
In the recognition of foreign judgments, Philippine courts are incompetent to substitute
their judgment on how a case was decided under foreign law. They cannot decide on
the “family rights and duties, or on the status, condition and legal capacity” of the foreign
citizen who is a party to the foreign judgment. Thus, Philippine courts are limited to the
question of whether to extend the effect of a foreign judgment in the Philippines. In a
foreign judgment relating to the status of a marriage involving a citizen of a foreign
country, Philippine courts only decide whether to extend its effect to the Filipino party,
under the rule of lex nationalii expressed in Article 15 of the Civil Code.
For this purpose, Philippine courts will only determine (1) whether the foreign judgment
is inconsistent with an overriding public policy in the Philippines; and (2) whether any
alleging party is able to prove an extrinsic ground to repel the foreign
judgment, i.e. want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact. If there is neither inconsistency with public policy nor adequate
proof to repel the judgment, Philippine courts should, by default, recognize the foreign
judgment as part of the comity of nations.

Republic vs Claude A. Miller and Jumrus E. Miller

G.R. No. 125932. April 21, 1999

Facts: On July 29, 1988, Spouses Miller, both American citizens, filed with the RTC,
Angeles City a verified petition to adopt Michael Magno Madayag, a Filipino child, under
the provision of the Child and Youth Welfare Code which allows aliens to adopt. The
natural parents executed affidavits giving their irrevocable consent to the adoption and
the DSWD recommended approval of the petition on the basis of its evaluation. On May
12, 1989, the trial court rendered decision granting the petition for adoption.
On August 3, 1998, the Family Code became effective, prohibiting the adoption of a
Filipino child by aliens.

The Solicitor General appealed to the granting of the petition for adoption by the RTC.

Issue:

Whether or not aliens may be allowed to adopt a Filipino child when the petition for
adoption was filed prior to the effectivity of the Family Code prohibiting the same.

Held:

Yes. An alien qualified to adopt under the Child and Youth Welfare Code, which was in
force at the time of the filing of the petition, acquired a vested right which could not be
affected by the subsequent enactment of a new law disqualifying him.

The enactment of the Family Code, effective August 3, 1988, will not impair the right of
respondents who are aliens to adopt a Filipino child because the right has become
vested at the time of filing of the petition for adoption and shall be governed by the law
then in force. A vested right is one whose existence, effectivity and extent does not
depend upon events foreign to the will of the holder. Vested rights include not only legal
or equitable title to the enforcement of a demand, but also an exemption from new
obligations created after the right has vested.

As long as the petition for adoption was sufficient in form and substance in accordance
with the law in governance at the time it was filed, the court acquires jurisdiction and
retains it until it fully disposes of the case. To repeat, the jurisdiction of the court is
determined by the statute in force at the time of the commencement of the action. Such
jurisdiction of a court, whether in criminal or civil cases, once it attaches cannot be
ousted by a subsequent happenings or events, although of a character which would
have prevented jurisdiction from attaching in the first instance.

Therefore, an alien who filed a petition for adoption before the effectivity of the Family
code, although denied the right to adopt under Art. 184 of said Code, may continue with
his petition under the law prevailing before the Family Code.

Adoption statutes, being humane and salutary, hold the interests and welfare of the
child to be of paramount consideration. They are designed to provide homes, parental
care and education for unfortunate, needy or orphaned children and give them the
protection of society and family in the person of the adopter, as well as childless
couples or persons to experience the joy of parenthood and give them legally a child in
the person of the adopted for the manifestation of their natural parent instincts. Every
reasonable intendment should be sustained to promote and fulfill these noble and
compassionate objectives of the law.
Renato Tayag vs Benguet Consolidated, Inc.
26 SCRA 242 – Business Organization – Corporation Law – Domicile of a Corporation –
By Laws Must Yield To a Court Order – Corporation is an Artificial Being
In March 1960, Idonah Perkins died in New York. She left behind properties here and
abroad. One property she left behind were two stock certificates covering 33,002 shares
of stocks of the Benguet Consolidated, Inc (BCI). Said stock certificates were in the
possession of the Country Trust Company of New York (CTC-NY). CTC-NY was the
domiciliary administrator of the estate of Perkins (obviously in the USA). Meanwhile, in
1963, Renato Tayag was appointed as the ancillary administrator (of the properties of
Perkins she left behind in the Philippines).
A dispute arose between CTC-NY and Tayag as to who between them is entitled to
possess the stock certificates. A case ensued and eventually, the trial court ordered
CTC-NY to turn over the stock certificates to Tayag. CTC-NY refused. Tayag then filed
with the court a petition to have said stock certificates be declared lost and to compel
BCI to issue new stock certificates in replacement thereof. The trial court granted
Tayag’s petition.
BCI assailed said order as it averred that it cannot possibly issue new stock certificates
because the two stock certificates declared lost are not actually lost; that the trial court
as well Tayag acknowledged that the stock certificates exists and that they are with
CTC-NY; that according to BCI’s by laws, it can only issue new stock certificates, in lieu
of lost, stolen, or destroyed certificates of stocks, only after court of law has issued a
final and executory order as to who really owns a certificate of stock.
ISSUE: Whether or not the arguments of Benguet Consolidated, Inc. are correct.
HELD: No. Benguet Consolidated is a corporation who owes its existence to Philippine
laws. It has been given rights and privileges under the law. Corollary, it also has
obligations under the law and one of those is to follow valid legal court orders. It is not
immune from judicial control because it is domiciled here in the Philippines. BCI is a
Philippine corporation owing full allegiance and subject to the unrestricted jurisdiction of
local courts. Its shares of stock cannot therefore be considered in any wise as immune
from lawful court orders. Further, to allow BCI’s opposition is to render the court order
against CTC-NY a mere scrap of paper. It will leave Tayag without any remedy simply
because CTC-NY, a foreign entity refuses to comply with a valid court order. The final
recourse then is for our local courts to create a legal fiction such that the stock
certificates in issue be declared lost even though in reality they exist in the hands of
CTC-NY. This is valid. As held time and again, fictions which the law may rely upon in
the pursuit of legitimate ends have played an important part in its development.
Further still, the argument invoked by BCI that it can only issue new stock certificates in
accordance with its bylaws is misplaced. It is worth noting that CTC-NY did not appeal
the order of the court – it simply refused to turn over the stock certificates hence
ownership can be said to have been settled in favor of estate of Perkins here. Also,
assuming that there really is a conflict between BCI’s bylaws and the court order, what
should prevail is the lawful court order. It would be highly irregular if court orders would
yield to the bylaws of a corporation. Again, a corporation is not immune from judicial
orders.

HILIP MATTHEWS vs. BENJAMIN A. TAYLOR and JOSELYN C.

TAYLOR G.R. No. 164584 J n! ""# "$$%B&'on# J.()a*+s(
1. On June 30, 1988, respondent Benjamin, a British subject, married Joselyn, a 17-
year old ilipina.!. On June 9, 1989, "hile their marria#e "as subsistin#, Joselyn bou#ht
$rom Diosa M. Martin a lot inBoracay. 'he sale "as alle#edly financed by Benjamin.3.
Joselyn and Benjamin, also usin# the latter(s $unds, constructed impro)ements thereon
and e)entuallycon)erted the property to a )acation and tourist resort *no"n as the +dmiral
Ben Bo" nn. . +ll re uired permits and licenses $or the operation o$ the resort "ere
obtained in the name o$ /inna elestino, Joselyn(s sister. . 2o"e)er, Benjamin and Joselyn
had a $allin# out, and Joselyn ran a"ay "ith im 4hilippsen. On June8, 199!, Joselyn
e5ecuted a 64+ in $a)or o$ Benjamin, authori in# the latter to maintain, sell, lease,
andsub-lease and other"ise enter into contract "ith third parties "ith respect to their
Boracay property. . 'herea$ter, on July !0, 199!, Joselyn as lessor and petitioner 4hilip
&atthe"s as lessee, entered into an+#reement o$ ease in)ol)in# the Boracay property
$or a period o$ ! years, "ith an annual rental o$41!,000.00.7. 4etitioner therea$ter too*
possession o$ the property and renamed the resort as &usic /arden :esort.8. laimin#
that the +#reement "as null and )oid since it "as entered into by Joselyn "ithout
Benjamin(sconsent, Benjamin instituted an action $or %eclaration o$ ;ullity o$
+#reement o$ ease "ith %ama#esa#ainst Joselyn and the petitioner.9. Benjamin
claimed that his $unds "ere used in the ac uisition and impro)ement o$ the
Boracay property, and coupled "ith the $act that he "as Joselyn(s husband, any
transaction in)ol)in# said propertyre uired his consent.
Iss !(
1. <hether or not the ease +#reement o$ a parcel o$ land entered into by a ilipino
"i$e "ithout theconsent o$ her British husband is )alid.
R ,'n-(
;o. 6ection 7, +rticle = o$ the 1987 onstitution states that>6ection 7. 6a)e in
cases o$ hereditary succession, no pri)ate lands shall be trans$erred or con)eyed
e5ceptto indi)iduals, corporations, or associations uali$ied to ac uire or hold lands o$
the public domain.

+liens, "hether indi)iduals or corporations, ha)e been dis uali$ied $rom ac uirin# lands
o$ the publicdomain. 2ence, by )irtue o$ the a$orecited constitutional pro)ision, they are
also dis uali$ied $romac uirin# pri)ate lands. 'he primary purpose o$ this constitutional
pro)ision is the conser)ation o$ thenational patrimony. Our $undamental la" cannot be
any clearer. 'he ri#ht to ac uire lands o$ the publicdomain is reser)ed only to ilipino
citi ens or corporations at least si5ty percent o$ the capital o$ "hich iso"ned
by ilipinos.
Cheesman vs IAC

Facts:
-Thomas Cheesman (American) and Criselda (Filipino) were married in 1970, got
separated in 1981
-Before they got separated, Criselda was able to purchase a land. Although aware of
the sale and the fact that the property was only in the name of his wife, Thomas never
objected to the said transaction
-tax declarations where issued in the name of Criselda
-Criselda exercised exclusive management over the property
-In 1981 (oooh…kaya), Criselda sold the property. Thomas now complains
-Thomas filed for ANNULMENT OF THE SALE: Sale executed w/o his knowledge and
consent
Defense:
Property was paraphernal
Thomas is American, disqualified to own or have any interest in real properties
The buyer was a buyer in GF
TC1: sale VOID (for Thomas)
-the buyer filed PETITION FOR RELIEF: there was fraud, mistake or excusable
negligence, seriously impairing her right to present her case adequately
Granted by TC
Summary judgment:
Property was Criselda's paraphernal property
Presumption that all properties acquired during the marriage belongs exclusively to the
conjugal partnership DOES NOT APPLY because Thomas, an American Citizen, is
disqualified under Consti to acquire and own real properties
WON Thomas can contest the validity of the Contract? NO
3 factual matters affirmed by both TC and CA:
(1) there was fraud, mistake or excusable negligence w/c seriously impaired the rights
of the buyer
(2) the property was bought by Criselda using the funds she had saved previous to the
marriage
(3) Criselda was the sole owner of the property
Art XIV, Section 14, 1973 Constitution
Save in cases of hereditary succession, no private land shall be transferred or conveyed
except to individuals, corporations, or associations qualified to acquire or hold lands of
public domain
-Thomas had no capacity or personality to question the subsequent sale of the property
by his wife on the theory that by doing so he is merely exercising the prerogative of a
husband in respect of conjugal property
Thomas and Criselda have no conjugal property
-or else Consti violated: not only would he have interest over the land, he would have a
decisive vote as to its transfer or disposition as well
-SC didn't discuss WON Thomas could recover from his wife if ever the funds used in
buying the land was not Criselda's but their shared money
Since the buyer is a buyer in GF (she was led by Thomas to believe that the property
was indeed Criselda's and not their conjugal property), she would be protected

G.R. No. L-66006 February 28, 1985BAGONG FILIPINAS OVERSEAS

CORPORATION and GOLDEN STAR SHIPPING, LTD.,
petitioners,vs.
NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION, DIRECTORPATRICIA SANTO TOMAS and
PROSERFINA PANCHO
respondents.
Elizer A. Odulios for petitioners.Pedro L. Linsangan for respondent P. Pancho.
AQUINO,
J .:

The issue in this case is whether the shipboard employment contract or Hongkong law
should govern the amount of deathcompensation due to the wife of Guillermo Pancho
who was employed by Golden Star Shipping, Ltd., a Hongkong based firm.The
shipboard employment contract dated June 1, 1978 was executed in this country
between Pancho and Bagong Filipinas OverseasCorporation, the local agent of Golden
Star Shipping. It was approved by the defunct National Seamen Board. Pancho was
hired as anoiler in the
M/V Olivine
for 12 months with a gross monthly wage of US $195.

In October, 1978, he had a cerebral stroke. He was rushed to the hospital while the
vessel was docked at Gothenberg, Sweden. He was repatriated tothe Philippines and
confined at the San Juan de Dios Hospital. He died on December 13, 1979.The
National Seamen Board awarded his widow, Proserfina, P20,000 as disability
compensation benefits pursuant to the above-mentioned employmentcontract plus
P2,000 as attorney's fees. Proserfina appealed to the National Labor Relations
Commission which awarded her $621 times 36 months orits equivalent in Philippine
currency plus 10% of the benefits as attorney's fees. Golden Star Shipping assailed that
decision by
certiorari
.We hold that the shipboard employment contract is controlling in this case. The
contract provides that the beneficiaries of the seaman are entitled toP20,000 "over and
above the benefits" for which the Philippine Government is liable under Philippine
law.Hongkong law on workmen's compensation is not the applicable law. The case of
Norse Management Co. vs. National Seamen Board
, G. R. No. 54204,September 30, 1982, 117 SCRA 486 cannot be a precedent because
it was expressly stipulated in the employment contract in that case that theworkmen's
compensation payable to the employee should be in accordance with Philippine Law or
the Workmen's Insurance Law of the country wherethe vessel is registered "whichever
is greater".The Solicitor General opines that the employment contract should be applied.
For that reason, he refused to uphold the decision of the NLRC.WHEREFORE, the
judgment of the National Labor Relations Commission is reversed and set aside. The
decision of the National Seamen Board datedFebruary 26, 1981 is affirmed. No
costs.SO ORDERED

Pakistan International Airline vs Ople (1990)

Doctrine: While parties to a contract may establish stipulations, terms and conditions as
they may deemconvenient, they may not contract away applicable provisions of
law especially peremptory provisions dealing withmatters heavily impressed with public
interest.
Facts:
1.

Pakistan International Airline (PIA) is a foreign corporation licensed to do business in

the PH. 2 separatecontracts of employment with Farrales and Mamasig were entered
into by PIA in Manila. The contractsbecame effective in 1979. The contracts contained
provisions
—
a.

Providing for the term of 3 years extendible upon mutual consent of the partiesb.

That PIA reserves the right to terminate the employee either by giving notice 1 month
before the
date of termination or one month’s salary

c.

“This agreement shall be construed and governed under and by the laws of
Pakistan, and only
the Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter
arising out ofor under
this agreement.”
2.

After their training period, Farrales and Mamasig commenced their services as flight
attendants with basestation in Manila.3.

1 year and 4 months before the lapse of the 3-year period, counsel for the local branch
of PIA sentFarrales and Mamasig notices expressing that their services will
be terminated a month thereafter.4.

Farrales and Mamasig filed a joint complaint for illegal termination and non-payment of
company benefitsbefore the then Ministry of Labor and Employment (MOLE)5.

PIA submitted a position paper claiming that Farrales and Mamasig were habitual
absentees; that bothwere in the habit of bringing in from abroad sizeable quantities of
"personal effects"; and that PIApersonnel at the Manila International Airport had been
discreetly warned by customs officials to adviseprivate respondents to discontinue that
practice.6.

Regional Director ordered reinstatement and payment of full back wages or in the
alternative payment oftheir salaries for the remainder of the 3-year period.a.

They have attained status of regular employeesb.

The provision stipulating a three-year period of employment is null and void for
violating LAborCode provisions on regular employmentc.

Dismissal without clearance from MOLE entitles employees to reinstatement7.

Deputy
Minister affirmed the RD’s order.
8.

PIA filed a petition for certiorari before the SC.a.

PIA’s relationship with

Farrles and Mamasig was governed by the provisions of its contract ratherthan by the
general provisions of the Labor Code
Issue/s:
What law governs the relationship of the parties to the contract?
Held/Ratio: PHILIPPINE LAW
1.

Art 1306 of the Civil Code provides: The contracting parties may establish such
stipulations, clauses, termsand conditions as they may deem convenient, provided
they are not contrary to law, morals, goodcustoms, public order, or public policy.2.
The governing principle is that parties may not contract away applicable provisions of
law especiallyperemptory provisions dealing with matters heavily impressed with public
interest. The law relating tolabor and employment is clearly such an area and parties
are not at liberty to insulate themselves andtheir relationships from the impact of labor
laws and regulations by simply contracting with each other. Itis thus necessary to
appraise the contractual provisions invoked by petitioner PIA in terms of
theirconsistency with applicable Philippine law and regulations.

PIA cannot take refuge in paragraph 10 of its employment agreement which specifies,
firstly, the law ofPakistan as the applicable law of the agreement and, secondly, lays the
venue for settlement of anydispute arising out of or in connection with the agreement
"only [in] courts of Karachi Pakistan".a.

The relationship is much affected with public interest and that the otherwise
applicablePhilippine laws and regulations cannot be rendered illusory by the parties
agreeing upon someother law to govern their relationship.b.

A cursory scrutiny of the relevant circumstances of this case will show the multiple
andsubstantive contacts between Philippine law and Philippine courts, on the one
hand, and therelationship between the parties,

Puromines vs Court of Appeals Nocon, J:

Facts:Pursuant to a contract of sale executed between Puromines Inc (petitioner and
P!ilipp Brothers Oceanic, Inc$, (private respondent as charterer of MV' Liliana
Dimitrova, * "ills of ading were executed bound for t!e Iloilo and %anila of + ,---
metric tons of prilled urea$.owever, upon reac!ing t!e port of %anila it was found out t!at
t!e s!ipment (urea were alread/contaminated wit! rust and dirt$0!is prompted
petitioner to file an action for breac! of contract of carriage against
%aritimeFactors, Inc as s!ip agent !ere in t!e P!ilippines for t!e owners of %&' iliana in
t!e complaint moreover private respondent P!ilipp "rot!ers #ceanic Inc$, was impleaded
as c!arterer of t!e said vessel$Private respondent, P!ilipp "rot!ers, instead of filing its
answer filed a motion to dismiss on t!eground of no cause of action$ Private respondent
also avers t!at Puromines Inc$ s!ould compl/ wit! t!earbitration clause provided for in t!e
sales contract$Facts s!ow t!at t!e sales contract executed between
Puromines Inc$, and P!ilipp "rot!ers#ceanic, Inc$, provides for an arbitration clause
w!erein it states t!at:
“Any disputes arising under this contract shall be settled by arbitration in London in
accordancewith the Arbitration Act 1950 and any statutory amendment or
modification thereof. Each party is toappoint an Arbitrator, and should they be
unable to agree, the decision of an mpire appointed by the themb e f i n a l . ! h e
Arbitrators and mpire are all to be commercial men and resident
i n L o n d o n . ! h i s submission may be made a rule of the "igh #ourt of $ustice in
England by either party.%
Petitioner moved to oppose t!e said motion to dismiss alleging t!at t!e arbitration clause
is notapplicable on t!e case because t!e complaint did not arise from t!e violation of t!e
terms and conditions of t!e sales contract but rat!er for claims of cargo agreement$0!e
trial court ruled in favor of t!e petitioner$ #n appeal, t!e CA reversed t!e decision of t!e
trialcourt and found t!at t!e arbitration clause is applicable$.ence t!is petition$
Issue: whether petitioner is bound b/ t!e arbitration clause in t!e sales contract
Held: Yes, petitioner is bound b/ t!e arbitration clause provided for in t!e contract$
Arbitration !as been! e l d v a l i d a n d c o n s t i t u t i o n a l $
3ven before t!e enactment of 1A
n o $ 4 5 6 , t ! e 7 u p r e m e C o u r t ! a s countenanced t!e settlement of disputes t!roug!
arbitration$ 0!e rule now is t!at unless t!e agreement issuc! absolutel/ close t!e doors
of t!e courts against t!e parties, w!ic! agreement would be void, t!e courtswill loo8 wit!
favor upon suc! amicable arrangements and will onl/ interfere wit! great
reluctance toanticipate or nullif/ t!e action of t!e arbitrator$At t!e case at bar, t!e
sales contract is compre!ensive enoug! to include claims for damages arising
from carriage and deliver/ of t!e goods$ Puromines, Inc derived !is rig!t to t!e cargo from
t!e billof lading w!ic! is t!e contract of affrei!tment toget!er wit! t!e sales contract$
Conse9uentl/, Puromines is bound b/ t!e provisions and terms of t!e bill of lading and of
t!e arbitration clause$

%oreover t!e court also ruled t!at, w!et!er t!e liabilit/ of respondent s!ould be based on t!e
salescontract or t!at of t!e bill of lading, t!e parties are nevert!eless obligated
to respect t!e
arbitration provisions on sales contract and&or t!e bill of lading$ Petitioner
being a signator/ and part/ to t!e salescontract cannot escape from !is obligation under
t!e arbitration clause as stated t!erein$As pointed out in t!e case of %indanao
Portland Cement Corp$ vs %c )onoug! Construction Compan/ of Florida t!e court
ruled: ;it! a written provision for arbitration as well as failure on
respondent<s part to compl/, parties must proceed to t!eir arbitration in
accordance wit! t!e terms of t!eir agreement (7ec$ 6, 1A 456 $ Proceeding incourt is
merel/ a summar/ remed/ to enforce t!e agreement to arbitrate$ 0!e dut/ of t!e court in
t!is caseis not to resolve t!e merits of t!e parties< claims but onl/ to determine if t!e/
s!ould proceed to arbitrationor not $ And alt!oug! it !as been ruled t!at a frivolous or
patentl/ baseless claim s!ould not be ordered toarbitration it is also recogni=ed t!at
t!e mere fact t!at a defense exist against a claim does not ma8e it frivolous or
baseless$;.313F#13, t!e decision of t!e CA is affirmed, petition is dismissed$

Pan American World Airways vs. Rapadas (G.R. No. 60673)

Facts: Private respondent Jose Rapadas held passenger ticket andbaggage
claim check for petitioner’s flight No. 841 with the route from Guam to Manila. While
standing inline to board the flight at the Guam Airport, Rapadas was ordered by
petitioner’s hand carry control agent to check-in his samsonite attaché case. Rapadas
protested pointing to the fact that other co-pasengers were permitted to hand carry
baggage. He stepped out of the line only to go back again at the end of it to try of he
can get through without having toregister his attaché case. However, the same man in
charge of had carry control did not fail to notice him and ordered him again toregister his
baggage. Upon arriving in Manila on the same day, Rapadas claimed and was given all
his checked in baggage except the attaché case.

Issue: Whether or not a passenger is bound by the terms of a passenger under the
Warsaw convention, shall apply in case of loss, damage or destruction to
a registered luggage of a passenger.

Held: After a review of the various arguments of the appointing parties, the court found
sufficient basis under the particular facts of the case for the availment of
the liability limitations under the Warsaw Convention. There is no dispute and the courts
below admit that there was such a notice appearing on page 2 of the airline ticketstating
that the Warsaw Convention governs in case of death or injury of passengers or of loss,
damage or destructionto a passenger’s luggage. Art. 22(4) of the Warsaw Convention
does not preclude an award of attorney’s fees. That provision states that the limits
of liability prescribed in the instrument shall not prevent the court from awarding in
accordance with its own law, in addition, the whole or part of the court costs and other
expenses of litigation incurred by the plaintiff.

Probate of the late William R. Giberson.LELA G. DALTON vs. SPRING GIBERSONG.R.

No. L-4113June 30, 1952Facts: Lela Dalton presented an application in the CFI of Cebu
asking for thelegalization of a document, which was awarded in San Francisco,
California,purporting to be the holographic will of William Giberson, who was a citizen
of theState of Illinois, USA, a resident of Cebu and died in Manila.

Spring Giberson, son of the deceased, filed an opposition claiming that the will
isapocryphal, that it does not represent the true will of the deceased, and that it hasnot
been in accordance with law. The trial court dismissed the application statingthat under
our existing rules only those wills that have previously been proved tobe allowed in the
United States, or any state or territory thereof, or any foreigncountry, according to their
laws, may be allowed to be filed or recorded in theproper court of first instance in the
Philippines. Hence, this petitionIssue: Whether the will of William Giberson can be
authenticated in thePhilippines, although such documentHeld: No. A will awarded
outside the Philippine can be legalized and registered inthe Philippines, provided that it
was awarded in accordance with the laws of theState or country where it was awarded.
This is supported by Article 637 of the CivilCode wherein it was stated that wills
authenticated and legalized in the UnitedStates, or any state or territory thereof in
accordance with the laws of that state,may be be legalized and recorded in the CFI of
the province in which the testatorhas a real property or estate.

TITLE: Juan Miciano v Andre Brimo

CITATION: GR No.22595, November 1, 1927| 50 Phil 867

FACTS:

Juan Miciano, judicial administrator of the estate in question, filed a scheme of partition.
Andre Brimo, one of the brothers of the deceased (Joseph Brimo) opposed Miciano’s
participation in the inheritance. Joseph Brimo is a Turkish citizen.

ISSUE: Whether Turkish law or Philippine law will be the basis on the distribution of
Joseph Brimo’s estates.

HELD:

Though the last part of the second clause of the will expressly said that “it be made and
disposed of in accordance with the laws in force in the Philippine Island”, this condition,
described as impossible conditions, shall be considered as not imposed and shall not
prejudice the heir or legatee in any manner whatsoever, even should the testator
otherwise provide. Impossible conditions are further defined as those contrary to law or
good morals. Thus, national law of the testator shall govern in his testamentary
dispositions.
The court approved the scheme of partition submitted by the judicial administrator, in
such manner as to include Andre Brimo, as one of the legatees.

G.R. No. and Date:L-12105, January 30th, 1960OBJECTIVE:TESTATE ESTATE OF C.

O. BOHANAN, deceased.PHILIPPINE TRUST CO., executor-appellee,vs.
MAGDALENA C. BOHANAN, EDWARD C. BOHANAN,and MARY LYDIA BOHANAN,
Appellants.Facts:C.O. Bohanan, a citizen of the United States with property in
California, originally born and acitizen of Nebraska, eventually chose Nevada as his
residence as was stated in his will and hisplace of dormicile upon his death.He
remained a citizen of the United States, in spite of hislong stay in the
Philippines.Issues:The petitioner, Magadalena Bohanan, former wife of the now
deceased, and their sharedchildren, Mary Lydiaand Edward Bohanan challenge the
legitimacy of the last will andtestament of C.O. Bohanan.The claim at hand is that
Magadalena, Mary Lydia and EdwardBohanan have been deprived of their legitimes
under the laws of the Philippines.Additionally, in accordance with the civil code, the
children of the testator should be left with two-thirds of the estate.

in accordance with Article 10 of the old Civil Code, the validity of testamentary
dispositions are to be governed by the national law of the testator, and as it has been
decided and it is not disputed that the national law of the testator is that of the State of
Nevada, already indicated above, which allows a testator to dispose of all his property
according to his will, as in the case at bar, the order of the court approving the project of
partition made in accordance with the testamentary provisions, must be, as it is hereby
affirmed, with costs against appellants.

Time, Inc. v Reyes

Facts:
- Action to the SC is a Petition for certiorari with
preliminary injunction to annul certain orders of
the respondent Court of First Instance of Rizal
- Petitioner
o Time – American corporation with
principal offices at New York City, NY
o Plaintiffs
 Mayor Villegas – Manila
 Juan Ponce Enrile –
Undersecretary of Finance -
Office is in manila
- Action by Plaintiffs
o Libel against the publication of Time
Asia Edition which is entitled Corruption
in Asia
- Summons were made to the offices in New York
- Times filed a motion to dismiss due to lack of
jurisdiction and improper venue
- CFI – Rizal – dismiss the motion
- Times- filed a motion for reconsideration
- CFI – Rizal – re-affirm previous order and state
that RA 4363 amending Art. 360 of the Revised
Penal Code is not applicable to actions against
non-resident defendants
- RA 4363
o “The criminal and civil action for
damages in case of written defamations
as provided for in this chapter shall be
filed simultaneously or separately with
the court of first instance of the province
or city where the libelous article is
printed and first published or where any
of the offended parties actually resides at
the time of the commission of the
offense”
o Provided, however, that where one of the
offended parties is a public officer whose
office is in the City of Manila at the time
of the commission of the offense, the
action shall be filed in the CFI of the
Carty of Manila or of the city or
province where the libelous article is
printed and first published, and in, in
such case such public officer does not
hold office in the City of Manila, the
action shall be filed in the Court of First
Instance of the province or city where he
held office at the time of the commission
of the offense or where….”:
SC
- The limitation of the choices of venue was
intended to minimize or limit the filing of out-of-
town libel suits.
- The only alternative allowed to him by law is to
prosecute on the place where the offending article
was printed and first published.
- Since the offending publication was not printed in
the Philippines, there is no alternative venue, but
only in the City of Manila
- There is not indication that non-resident
defendants are exempted from such rules

Liang vs. People

GR 125865, 28 January 2000

FACTS: Petitioner is an economist working with the Asian Development Bank.

Sometime in 1994, for allegedly uttering defamatory words against fellow ADB worker
Joyce Cabal, he was charged before the Metropolitan Trial Court of Mandaluyong City
with two counts of grave oral defamation. Petitioner was arrested by virtue of a warrant
issued by the MeTC. MeTC Judge received an “office of protocol” from the Department
of Foreign Affairs stating that petitioner is covered by immunity from legal process under
Section 45 of the Agreement between the ADB and the Philippine Government
regarding the Headquarters of the ADB in the country. The MeTC judge without notice
to the prosecution dismissed the case based from the said protocol.
The latter filed a motion for reconsideration which was opposed by the DFA. When its
motion was denied, the prosecution filed a petition for certiorari and mandamus with the
RTC of Pasig City which set aside the MeTC rulings and ordered the latter court to
enforce the warrant of arrest it earlier issued.

After the motion for reconsideration was denied, petitioner elevated the case to this
court via a petition for review arguing that he is covered by immunity under the
Agreement and that no preliminary investigation was held before the criminal cases
were filed in court.
ISSUE: Whether immunity invoked by DFA for ADB employees based on the
Agreement is cognizable in our courts.

HELD: The immunity mentioned therein is not absolute, but subject to the exception that
the act was done in “official capacity.” The prosecution should have been given the
chance to rebut the DFA protocol and it must be accorded the opportunity to present its
controverting evidence.
Slandering a person could not possibly be covered by the immunity agreement because
our laws do not allow the commission of a crime, such as defamation, in the name of
official duty. It is a well-settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused by his act done
with malice or in bad faith or beyond the scope of his authority or jurisdiction. Under the
Vienna Convention on Diplomatic Relations, the commission of a crime is not part of
official duty.
The petition is therefore denied.

Cargill Inc. vs Intra Strata Assurance CorporationFacts:

•
Cargill (
foreign)
is a corporation organized and existing under the laws of theState of Delaware.
•
Cargill executed a contract with Northern Mindanao Corporation
(NMC
)(
domestic
), whereby NMC agreed to sell to petitioner 20,000 to 24,000 metrictons of molasses to
be delivered from Jan 1 to 30 1990 for $44 per metric ton
•
The contract provided that CARGILL was to open a Letter of Credit with theBPI. NMC
was permitted to draw up 500,000 representing the minimum priceof the contract
•
The contract was amended 3 times (in relation to the amount and the price).But the third
amendment required NMC to put up a performance bond whichwas intended to
guarantee NMC’s performance to deliver the molasses duringthe prescribed shipment
periods
•
In compliance, INTRA STRATA issued a performance bond to guaranteeNMC’s
delivery.
•
NMC was only able to deliver 219551 metric tons out of the agreed 10,500.Thus
CARGILL sent demand letters to INTRA claiming payment under theperformance and
surety bonds. When INTRA failed to pay, CARGILL filed acomplaint.
•
CARGILL NMC and INTRA entered into a compromise agreement approvedby the
court, such provided that NMC would pay CARGILL 3 million uponsigning and would
deliver to CARGILL 6,991 metric tons of molasses. ButNMC still failed to comply
•
RTC – in favor of CARGILL
•
CA – CARGILL does not have the capacity to file suit since it was a foreigncorporation
doing business in the PH without the requisite license. Thepurchase of molasses were
in pursuance of its basic business and not just mereisolated and incidental
transactionsIssue: Whether or not petitioner is doing or transacting business in the
Philippines incontemplation of the law and established jurisprudence/ Whether or not
CARGILL,an unlicensed foreign corporation, has legal capacity to sue before Philippine
courts.Held: YES
•
According to Article 123 of the Corporation Code, a foreign corporation mustfirst obtain
a license and a certificate from the appropriate government agencybefore it can transact
business in the Philippines. Where a foreign corporationdoes business in the Philippines
without the proper license, it cannot maintainany action or proceeding before Philippine
courts, according to Article 133 of the Corporation Code

•
“Doing Business”
o
…..
and any other act or acts that imply a continuity of commercial dealings or
arrangements, and contemplate to thatextent the performance of acts or works,
or the exercise of some of the functions normally incident to, and in progressive
prosecutionof, commercial gain or of the purpose and object of the
businessorganization.
”
•
Since INTRA is relying on Section 133 of the Corporation
C o d e t o b a r petitioner from maintainin g an action in Philippine courts,
INTRA bears theburden of proving that CARGILL was doing business in the
PH. In this
case,w e f i n d t h a t I N T R A f a i l e d t o p r o v e t h a t C A R G I L L ’ s
a c t i v i t i e s i n t h e Philippines constitute doing business as would
p r e v e n t i t f r o m b r i n g i n g a n action.
•
There is no showing that the transactions between petitioner and NMC
signifyt h e i n t e n t o f p e t i t i o n e r t o e s t a b l i s h a c o n t i n u o u s b u s i n e
s s o r e x t e n d i t s operations in the Philippines.
•
In this case, the contract between petitioner and NMC involved the purchaseof
molasses by petitioner from NMC.
 It was NMC, the domestic corporation,which derived income from the transaction and
not petitioner. To constitute“doing business,” the activity undertaken in the Philippines
should involve profit-making.

Steelcase, Inc. v. Design International Selections, Inc. (DISI), G.R. No. 171995, 18
April 2012

18APR
[MENDOZA, J.]

FACTS
Steelcase, Inc. (Steelcase) granted Design International Selections, Inc. (DISI) the right
to market, sell, distribute, install, and service its products to end-user customers within
the Philippines.Steelcase argues that Section 3(d) of R.A. No. 7042 or the Foreign
Investments Act of 1991 (FIA) expressly states that the phrase doing business excludes
the appointment by a foreign corporation of a local distributor domiciled in the
Philippines which transacts business in its own name and for its own account. On the
other hand, DISI argues that it was appointed by Steelcase as the latter’s exclusive
distributor of Steelcase products. The dealership agreement between Steelcase and
DISI had been described by the owner himself as basically a buy and sell arrangement.

ISSUE
Whether Steelcase had been doing business in the Philippines.

RULING
NO.

[T]he appointment of a distributor in the Philippines is not sufficient to constitute doing

business unless it is under the full control of the foreign corporation. On the other hand,
if the distributor is an independent entity which buys and distributes products, other than
those of the foreign corporation, for its own name and its own account, the latter cannot
be considered to be doing business in the Philippines. Here, DISI was an independent
contractor which sold Steelcase products in its own name and for its own account. As a
result, Steelcase cannot be considered to be doing business in the Philippines by its act
of appointing a distributor as it falls under one of the exceptions under R.A. No. 7042.
STATE INVESTMENT HOUSE, INC. ANS STATE FINANCING CENTER, INC. VSCITIBANK,
BANK OF AMERICA AND HONGKONG AND SHANGHAI BANK

ISSUE:
Whether or Not foreign banks licensed to do business in the Philippines,
may be considered“residents of the Philippine Islands” as contemplated in Sec. 20 of
Insol!ency Law.
An adjudication of insol!ency may be made on the petition of three or more creditors,
residentsof the Philippine islands, #hose credits or demands accrued int hr
Philippine Islands, and the amount of #hich credits or demands are in the aggregate
not less than one thousand pesos.

FACTS
Th e f o r e i g n b a n k s i n v o l v e d i n t h e c a s e a r e B a n k o f A m e r i c a ,
C i t i b a n k , a n d H o n g k o n g a n d Shanghai Banking Corporation, all of whom are
creditors of Consolidated Mines, Inc. (CMI). O n D e c e m b e r 1 1 , 1 9 8 1 , t h e t h r e e
banks %ointly filed #ith the 3') of 3i4al a petitio n for
Involuntary Insolvency of CMI. Among the grounds alleged by the fo
r e i g n b a n k s i s C M I ’ s commission of specific acts of insol!ency, The
petition for in!oluntary insol!ency #as opposed by herein petitioners State
In!estment House, Inc. SI*I- and State 6inancing )enter, Inc. SIHI and SFCI
claimed,
amongo t h e r s , t h a t t h e c o u r t h a d n o % u r i s d i c t i o n t o t a k e c o g n i 4 a n c e
o f t h e p e t i t i o n f o r i n s o l ! e n c y because the foreign banks are not resident
creditors of CMI as required under the Insol!ency"a#.'he 3') rendered %udgment
in fa!our of SI*I and S6)I for lack of %urisdiction o!er the sub%ectmatter. 'he court ruled
that the insol!ency court could not ac7uire %urisdiction to ad%udicate thedebtor )+I-
as insol!ent because the foreign banks are not “residents of the Philippines”. n petition
for re!ie#, the )$ rendered order re!ersing the %udgment of the 3'). 'he )$ ruledthat the
three banks are residents of the Philippines for the purpose of doing
business in thePhilippines, and that the Insol!ency "a# #as designed for the benefit of
both the creditors anddebtors. 'he )$ also reiterated that the authority granted to the
three banks by the S8) co!ersnot only transacting banking business, but also
maintaining suits for the reco!ery of any debt and claims.*ence, SI*I and S6)I
brought their appeal before the S)
RULING:
'the S) ruled that since the Insol!ency "a# did not mention of the meaning of “residents
of thePhilippine Islands”, the better approach #ould be to harmoni4e the pro!isions of
the )orporation)ode, the 9eneral (anking $ct, the ffshore (anking "a# and
the NI3).*ence, the )ourt ruled that it is not really the grant of a license to a
foreign corporation to dobusiness in the Philippines that makes it a resident.
'he license merely gi!es legitimacy to
itsd o i n g b u s i n e s s i n t h e c o u n t r y . W h a t e f f e c t i ! e l y m a k e s s u c h f o r e i g
n c o r p o r a t i o n a r e s i d e n t corporation in the Philippines is its actually being
in the Philippines and licitly doing business here, or the “locality of e:istence”,
#hich is the necessary element.

HYATT ELEVATORS AND ESCALATORS CORPORATION vs. GOLDSTAR

ELEVATORS, PHILS., INC.

G.R. No. 161026; October 24, 2005

Ponente: Panganiban, J.,

FACTS:

Petitioner and Respondent are both engaged in the business of importing, installing and
maintaining elevators and escalators. Hyatt filed an unfair competition case against LG
and Goldstar alleging that it was appointed as the sole distributor of LG elevators and
escalators.

Goldstar moved to dismiss the case alleging that venue was improperly laid as neither
the Hyatt, LG or Goldstar itself resided in Mandaluyong city where the case was
originally filed. The RTC denied the motion. The CA dismissed the case and held that
Makati was the principal place of business of both respondent and petitioner, as stated
in the latter’s Articles of Incorporation, that place was controlling for purposes of
determining the proper venue.

ISSUE:

Whether or not the “residence” of the corporation is the same one as stated in the AOI.

HELD:

Yes. Although the Rules of Court do not provide that when the plaintiff is a corporation,
the complaint should be filed in the location of its principal office as indicated in its
articles of incorporation, jurisprudence has, however, settled that the place where the
principal office of a corporation is located, as stated in the articles, indeed establishes
its residence. This ruling is important in determining the venue of an action by or against
a corporation, as in the present case.
Gamboa v. Teves etal., GR No. 176579, October 9, 2012

Facts:

The issue started when petitioner Gamboa questioned the indirect sale of shares
involving almost 12 million shares of the Philippine Long Distance Telephone Company
(PLDT) owned by PTIC to First Pacific. Thus, First Pacific’s common shareholdings in
PLDT increased from 30.7 percent to 37 percent, thereby increasing the total common
shareholdings of foreigners in PLDT to about 81.47%. The petitioner contends that it
violates the Constitutional provision on filipinazation of public utility, stated in 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%. Then, in 2011, the court ruled the case in
favor of the petitioner, hence this new case, resolving the motion for reconsideration for
the 2011 decision filed by the respondents.

Issue: Whether or not the Court made an erroneous interpretation of the term ‘capital’ in
its 2011 decision?

Held/Reason: The Court said that the Constitution is clear in expressing its State policy
of developing an economy ‘effectively controlled’ by Filipinos. Asserting the ideals that
our Constitution’s Preamble want to achieve, that is – to conserve and develop our
patrimony , hence, the State should fortify a Filipino-controlled economy. In the 2011
decision, the Court finds no wrong in the construction of the term ‘capital’ which refers to
the ‘shares with voting rights, as well as with full beneficial ownership’ (Art. 12, sec. 10)
which implies that the right to vote in the election of directors, coupled with benefits, is
tantamount to an effective control. Therefore, the Court’s interpretation of the term
‘capital’ was not erroneous. Thus, the motion for reconsideration is denied.