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Hilton v.

Guyot The first of these two cases was an action at law, brought December 18, 1885, in the Circuit
Court of the United States for the Southern District of New York, by Gustave Bertin Guyot, as
official liquidator of the firm of Charles Fortin & Co., and by the surviving members of that firm,
Nos. 130, 34
all aliens and citizens of the Republic of France, against Henry Hilton and William Libbey,
citizens of the United States and of the State of New York and trading as copartners in the cities
Argued April 10, 1894 of New York and Paris and elsewhere under the firm name of A. T. Stewart & Co. The action
was upon a judgment recovered in a French court at Paris, in the Republic of France, by the firm
of Charles Fortin & Co., all of whose members were French citizens, against Hilton & Libbey,
Decided June 3, 1895
trading as copartners, as aforesaid, and citizens of the United States and of the State of New
159 U.S. 113
The complaint alleged that in 1886 and since, during the time of all the transactions included in
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES the judgment sued on, Hilton and Libbey, as successors to Alexander T. Stewart and Libbey,
under the firm name of A. T. Stewart & Co., carried on a general business as merchants in the
Cities of New York and Paris and elsewhere, and maintained a regular store and place of
FOR THE SOUTHERN DISTRICT OF NEW YORK business at Paris; that during the same time, Charles Fortin & Co. carried on the manufacture
and sale of gloves at Paris, and the two firms had there large dealings in that business, and
Syllabus controversies arose in the adjustment of accounts between them.

A citizen and resident of this country who has his principal place of business here but has an The complaint further alleged that between March 1, 1879, and December 1, 1882, five suits
agent in a foreign country and is accustomed to purchase and store large quantities of goods were brought by Fortin & Co. against Stewart & Co. for sums alleged to be due, and three suits
there, and, in a suit brought against him by a citizen and in a court of that country, appears and by Stewart & Co. against Fortin & Co., in the Tribunal of Commerce of the Department of the
defends with the sole object of preventing his property within the jurisdiction, but not in the Seine, a judicial tribunal or court organized and existing under the laws of France, sitting at Paris
custody of that court, from being taken in satisfaction of any judgment that may be recovered and having jurisdiction of suits and controversies between merchants or traders growing
against him there cannot, in an action brought against him in this country upon such a judgment,
impeach it for want of jurisdiction of his person. Page 159 U. S. 115

The admission at the trial in a court of a foreign country, according to its law and practice, of out of commercial dealings between them; that Stewart & Co. appeared by their authorized
testimony not under oath and without opportunity of cross-examination, and of documents with attorneys in all those suits, and that, after full hearing before an arbitrator appointed by that court
which the defendant had no connection and which by our law would not be admissible against and before the court itself, and after all the suits had been consolidated by the court, final
him, is not of itself a sufficient ground for impeaching the judgment of that court in an action judgment was rendered on January 20, 1883, that Fortin & Co. recover of Stewart & Co. various
brought upon it in this country. sums, arising out of the dealings between them, amounting to 660,847 francs, with interest, and
dismissed part of Fortin & Co.'s claim.
When an action is brought in a court of this country by a citizen of a foreign country against one
of our own citizens to recover a sum of money adjudged by a court of that country to be due The complaint further alleged that appeals were taken by both parties from that judgment to the
from the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a Court of Appeal of Paris, Third Section, an appellate court of record organized and existing
competent court, having jurisdiction of the cause and of the parties, and upon due allegations under the laws of the Republic of France and having jurisdiction of appeals from the final
and proofs and opportunity to defend against them, and its proceedings are according to the judgments of the Tribunal of Commerce of the Department of the Seine, where the amount in
course of a civilized jurisprudence, and are stated in a clear and formal record, the judgment dispute exceeded the sum of 1,500 francs, and that the said Court of Appeal, by a final judgment
is prima facie evidence, at least, of the truth of the matter adjudged, and the judgment is rendered March 19, 1884, and remaining of record in the office of its clerk at Paris, after hearing
conclusive upon the merits tried in the foreign court unless some special ground is shown for the several parties by their counsel, and upon full consideration of the merits, dismissed the
impeaching it, as by showing that it was affected by fraud or prejudice or that, by the principles appeal of the defendants, confirmed the judgment of the lower court in favor of the plaintiffs, and
of international law and by the comity of our own country, it is not entitled to full credit and credit. ordered, upon the plaintiffs' appeal, that they recover the additional sum of 152,528 francs, with
182,849 francs for interest on all the claims allowed, and 12,559 francs for costs and expenses.
A judgment for a sum of money, rendered by a court of a foreign country, having jurisdiction of
the cause and of the parties, in a suit brought by The complaint further alleged that Guyot had been duly appointed by the Tribunal of Commerce
of the Department of the Seine official liquidator of the firm of Forth & Co., with full powers,
Page 159 U. S. 114 according to law and commercial usage, for the verification and realization of its property, both
real and personal, and to collect and cause to be executed the judgments aforesaid.
one of its citizens against one of ours, is prima facie evidence only, and not conclusive of the
merits of the claim in an action brought here upon the judgment if by the law of the foreign The complaint further alleged that the judgment of the Court of Appeals of Paris, and the
country, as in France, judgments of our own courts are not recognized as conclusive. judgment of the Tribunal of Commerce, as modified by the judgment of the appellate court, still
remain in full force and effect;
"that the said courts respectively had jurisdiction of the subject matter of the controversies so The answer further alleged that without any fault or negligence on the part of the defendants,
submitted to them, and of the parties, the there was not a full and fair trial of the controversies before the arbitrator, in that no witness was
sworn or affirmed; in that Charles Fortin was permitted to make, and did make, statements not
under oath containing many falsehoods; in that the privilege of cross-examination of Fortin and
Page 159 U. S. 116
other persons who made statements before the arbitrator was denied to the defendants, and in
that extracts from printed newspapers, the knowledge of which was not brought home to the
said defendants having intervened, by their attorneys and counsel, and applied for affirmative defendants, and letters and other communications in writing between Fortin & Co. and third
relief in both courts; that the plaintiffs have hitherto been unable to collect the said judgments or persons, to which the defendants were neither privy nor party, were received by the arbitrator;
any part thereof, by reason of the absence of the said defendants, they having given up their that without such improper evidence, the judgment would not have been obtained, and that the
business in Paris prior to the recovery of the said judgment on appeal, and having left no arbitrator was deceived and misled by the false and fraudulent accounts introduced by Fortin &
property within the jurisdiction of the Republic of France out of which the said judgments might Co. and by the hearsay testimony given, without the solemnity of an oath and without cross-
be made;" examination, and by the fraudulent suppression of the books and papers.

and that there are still justly due and owing from the defendants to the plaintiffs upon those said The answer further alleged that Fortin & Co. made up their statements and accounts falsely and
judgments certain sums, specified in the complaint, and amounting in all to 1,008,783 francs in fraudulently, and with
the currency of the Republic of France, equivalent to $195,122.47.
Page 159 U. S. 118
The defendants, in their answer, set forth in detail the original contracts and transactions in
France between the parties and the subsequent dealings between them modifying those
intent to deceive the defendants and the arbitrator and the said courts of France, and those
contracts, and alleged that the plaintiffs had no just claim against the defendants, but that, on
courts were deceived and misled thereby; that owing to the fraudulent suppression of the books
the contrary, the defendants, upon a just settlement of the accounts, were entitled to recover
and papers of Fortin & Co. upon the trial and the false statements of Fortin regarding matters
large sums from the plaintiffs.
involved in the controversy, the arbitrator and the courts of France

The answer admitted the proceedings and judgments in the French courts and that the
"were deceived and misled in regard to the merits of the controversies pending before them, and
defendants gave up their business in France before the judgment on appeal, and had no
wrongfully decided against said Stewart & Co., as hereinbefore stated; that said judgment,
property within the jurisdiction of France out of which that judgment could be collected.
hereinbefore mentioned, is fraudulent, and based upon false and fraudulent accounts and
statements, and is erroneous in fact and in law, and is void; that the trial hereinbefore mentioned
The answer further alleged that the Tribunal of Commerce of the Department of the Seine was a was not conducted according to the usages and practice of the common law, and the allegations
tribunal whose judges were merchants, ship captains, stockbrokers, and persons engaged in and proofs given by said Fortin & Co., upon which said judgment is founded, would not be
commercial pursuits, and of which Charles Fortin had been a member until shortly before the competent or admissible in any court or tribunal of the United States, in any suit between the
commencement of the litigation. same parties involving the same subject matter, and it is contrary to natural justice and public
policy that the said judgment should be enforced against a citizen of the United States, and that,
if there had been a full and fair trial upon the merits of the controversies so pending before said
The answer further alleged that in the original suits brought against the defendants by Fortin & tribunals, no judgment would have been obtained against said Stewart & Co."
Co., the citations were left at their storehouse in Paris; that they were then residents and citizens
of the State of New York, and neither of them at that time, or within four years before, had been
within, or resident or domiciled within, the jurisdiction of that tribunal or owed any allegiance to "Defendants, further answering, allege that it is contrary to natural justice that the judgment
France, but that hereinbefore mentioned should be enforced without an examination of the merits thereof; that by
the laws of the Republic of France, to-wit, article 181 [121] of the Royal Ordinance of June 15,
1629, it is provided namely:"
Page 159 U. S. 117

"Judgments rendered, contracts or obligations recognized, in foreign kingdoms and

they were the owners of property situated in that country which would by the law of France have sovereignties, for any cause whatever shall give rise to no lien or execution in our Kingdom.
been liable to seizure if they did not appear in that tribunal, and that they unwillingly, and solely
Thus, the contracts shall stand for simple promises, and, notwithstanding such judgments, our
for the purpose of protecting that property, authorized and caused an agent to appear for them in subjects against whom they have been rendered may contest their rights anew before our own
those proceedings, and that the suits brought by them against Fortin & Co. were brought for the judges."
same purpose, and in order to make a proper defense, and to establish counterclaims arising
out of the transactions between the parties, and to compel the production and inspection of
Fortin & Co.'s books, and that they sought no other affirmative relief in that tribunal. "And it is further provided by the laws of France, by article 546 of the Code de Procedure Civile,
as follows:"
The answer further alleged that, pending that litigation, the defendants discovered gross frauds
in the accounts of Fourtin & Co., that the arbitrator and the tribunal declined to compel Fortin & " Judgments rendered by foreign tribunals shall be capable of execution
Co. to produce their books and papers for inspection, and that, if they had been produced, the
judgment would not have been obtained against the defendants.
Page 159 U. S. 119
in France only in the manner and in the cases set forth by articles 2123 and 2128 of the Civil examining the witnesses were according to the French law, and also proved the title of Guyot as
Code." liquidator.

"And it is further provided by the laws of France, by article 2128 [2123] of the Code de It was admitted by both parties that for several years prior to 1876, the firm of Alexander T.
Procedure Civile [Civil Code]:" Stewart & Co., composed of Stewart and Libbey, conducted their business as merchants in the
City of New York, with branches in other cities of America and Europe; that both partners were
citizens and residents of the City and State of New York during the entire period mentioned in
" A lien cannot, in like manner, arise from judgments rendered in any foreign country, save only
the complaint, and that in April, 1876, Stewart died, and Hilton and Libbey formed a partnership
as they have been declared in force by a French tribunal, without prejudice, however, to
to continue the business under the same firm name, and became the owners of all the property
provisions to the contrary, contained in public laws and treaties."
and rights of the old firm.

"[And by article 2128 of that Code: 'Contracts entered into in a foreign country cannot give a lien
The defendants made numerous offers of evidence in support of all the specific allegations of
upon property in France if there are no provisions contrary to this principle in public laws or in
fact in their answer, including the allegations as to the law and comity of France. The plaintiffs, in
their brief filed in this Court, admitted that most of these offers

"That the construction given to said statutes by the judicial tribunals of France is such that no
"were offers to prove matters in support of the defenses and counterclaims set up by the
comity is displayed towards the judgments of tribunals of foreign countries against the citizens of
defendants in the cases tried before the French courts, and which, or most
France, when sued upon in said courts of France, and the merits of the controversies upon
which the said judgments are based are examined anew, unless a treaty to the contrary effect
exists between the said Republic of France and the country in which such judgment is obtained. Page 159 U. S. 121
That no treaty exists between the said Republic of France and the United States, by the terms or
effect of which the judgments of either country are prevented from being examined anew upon
of which, would have been relevant and competent if the plaintiffs in error are not concluded by
the merits, when sued upon in the courts of the country other than that in which it is obtained.
the result of those litigations, and have now the right to try those issues, either on the ground
That the tribunals of the Republic of France give no force and effect, within the jurisdiction of the
that the French judgments are only prima facieevidence of the correctness of those judgments,
said country, to the duly rendered judgments of courts of competent jurisdiction of the United
or on the ground that the case is within the exception of a judgment obtained by fraud."
States against citizens of France, after proper personal service of the process of said courts is
made thereon in this country."
The defendants, in order to show that they should not be concluded by having appeared and
litigated in the suits brought against them by the plaintiffs in the French courts, offered to prove
The answer further set up, by way of counterclaim and in detail, various matters arising out of
that they were residents and citizens of the State of New York, and neither of them had been,
the dealings between the parties, and alleged that none of the plaintiffs had since 1881 been
within four years prior to the commencement of those suits, domiciled or resident within the
residents of the State of New York, or within the jurisdiction of that state, but the defendants
jurisdiction of those courts; that they had a purchasing agent and a storehouse in Paris, but only
were, and always had been, residents of that state.
as a means or facility to aid in the transaction of their principal business, which was in New York,
and they were never otherwise engaged in business in France; that neither of them owed
The answer concluded by demanding that the plaintiffs' allegiance to France, but they were the owners of property there which would, according to the
laws of France, have been liable to seizure if they had not appeared to answer in those suits;
that they unwillingly, and solely for the purpose of protecting their property within the jurisdiction
Page 159 U. S. 120
of the French tribunal, authorized an agent to appear, and he did appear in the proceedings
before it, and that their motion to compel an inspection of the plaintiffs' books, as well as the
complaint be dismissed, and that the defendants have judgment against them upon the suits brought by the defendants in France, were necessary by way of defense or counterclaim to
counterclaims, amounting to $102,942.91. the suits there brought by the plaintiffs against them.

The plaintiffs filed a replication to so much of the answer as made counterclaims, denying its Among the matters which the defendants alleged and offered to prove in order to show that the
allegations and setting up in bar thereof the judgment sued on. French judgments were procured by fraud were that Fortin & Co., with intent to deceive and
defraud the defendants, and the arbitrator and the courts of France, entered in their books, and
presented to the defendants, and to the French courts, accounts bearing upon the transactions
The defendants, on June 22, 1888, filed a bill in equity against the plaintiffs setting forth the in controversy which were false and fraudulent, and contained excessive and fraudulent charges
same matters as in their answer to the action at law and praying for a discovery and for an
against the defendants in various particulars, specified; that the
injunction against the prosecution of the action. To that bill a plea was filed setting up the French
judgments, and upon a hearing, the bill was dismissed. 42 F. 249. From the decree dismissing
the bill an appeal was taken, which is the second case now before this Court. Page 159 U. S. 122

The action at law afterwards came on for trial by a jury, and the plaintiffs put in the records of the defendants made due application to the Tribunal of Commerce to compel Fortin & Co. to allow
proceedings and judgments in the French courts, and evidence that the jurisdiction of those their account books and letter books to be inspected by the defendants, and the application was
courts was as alleged in the complaint and that the practice followed and the method of opposed by Fortin & Co., and denied by the tribunal; that the discovery and inspection of those
books were necessary to determine the truth of the controversies between the parties; that
before the Tribunal of Commerce, Charles Fortin was permitted to and did give in evidence
statements not under oath relating to the merits of the controversies there pending, and falsely The most certain guide, no doubt, for the decision of such questions is a treaty or a statute of
represented that a certain written contract made in 1873 between Stewart & Co. and Fortin & this country. But when, as is the case here, there is no written law upon the subject, the duty still
Co. concerning their dealings was not intended by the parties to be operative according to its rests upon the judicial tribunals of ascertaining and declaring what the law is, whenever it
terms, and in support of that false representation made statements as to admissions by Stewart becomes necessary to do so in order to determine the rights of parties to suits regularly brought
in a private conversation with him, and that the defendants could not deny those statements, before them. In doing this, the courts must obtain such aid as they can from judicial decisions,
because Stewart was dead, and they were not protected from the effect of Fortin's statements from the works of jurists and commentators, and from the acts and usages of civilized
by the privilege of cross-examining him under oath, and that the French judgments were based nations. Fremont v. United States, 17 How. 542, 58 U. S. 557; The Scotia, 14 Wall. 170, 81 U. S.
upon false and fraudulent accounts presented and statements made by Fortin & Co. before the 188; Respublica v. De Longchamps, 1 Dall. 111, 1 U. S. 116; Moultrie v. Hunt,23 N.Y. 394, 396.
Tribunal of Commerce during the trial before it.
No law has any effect, of its own force, beyond the limits of the sovereignty from which its
The records of the judgments of the French courts, put in evidence by the plaintiffs, showed that authority is derived. The extent to which the law of one nation, as put in force within its territory,
all the matters now relied on to show fraud were contested in and considered by those courts. whether by executive order, by legislative act, or by judicial decree shall be allowed to operate
within the dominion of another nation depends upon what our greatest jurists have been content
to call "the comity of nations." Although the phrase has been often criticized, no satisfactory
The plaintiffs objected to all the evidence offered by the defendants on the grounds that the
substitute has been suggested.
matters offered to be proved were irrelevant, immaterial, and incompetent; that in respect to
them the defendants were concluded by the judgment sued on and given in evidence, and that
none of those matters, if proved, would be a defense to this action upon that judgment. "Comity," in the legal sense, is neither a matter of absolute

The court declined to admit any of the evidence so offered by the defendants, and directed a Page 159 U. S. 164
verdict for the plaintiffs in the sum of $277,775.44, being the amount of the French judgment and
interest. The defendants, having duly excepted to the rulings and direction of the court, sued out
obligation, on the one hand, nor of mere courtesy and goodwill, upon the other. But it is the
a writ of error.
recognition which one nation allows within its territory to the legislative, executive, or judicial acts
of another nation, having due regard both to international duty and convenience and to the rights
Page 159 U. S. 123 of its own citizens or of other persons was are under the protection of its laws.

The writ of error in the action at law and the appeal in the suit in equity were argued together in MR. JUSTICE Story, in his Commentaries on the Conflict of Laws, treating of the question in
this Court in January, 1894, and, by direction of the Court, were reargued in April, 1894, before a what department of the government of any state, in the absence of any clear declaration of the
full Bench. sovereign will, resides the authority to determine how far the laws of a foreign state shall have
effect, and observing that this differs in different states according to the organization of the
departments of the government of each, says:
Page 159 U. S. 162

"In England and America, the courts of justice have hitherto exercised the same authority in the
MR. JUSTICE GRAY, after stating the case, delivered the opinion of the Court.
most ample manner, and the legislatures have in no instance (it is believed) in either country
interfered to provide any positive regulations. The common law of both countries has been
These two cases -- the one at law and the other in equity -- of Hilton v. Guyot, and the case expanded to meet the exigencies of the times as they have arisen, and so far as the practice of
of Ritchie v. McMullen, which has been under advisement at the same time, present important nations, or the jus gentium privatum, has been supposed to furnish any general principle, it has
questions relating to the force and effect of foreign judgments not hitherto adjudicated by this been followed out."
Court, which have been argued
Story's Conflict of Laws §§ 23, 24.
Page 159 U. S. 163
Afterwards, speaking of the difficulty of applying the positive rules laid down by the Continental
with great learning and ability and which require for their satisfactory determination a full jurists, he says that "there is indeed great truth" in these remarks of Mr. Justice Porter, speaking
consideration of the authorities. To avoid confusion in indicating the parties, it will be convenient for the Supreme Court of Louisiana:
first to take the case at law of Hilton v. Guyot.
"They have attempted to go too far to define and fix that which cannot, in the nature of things, be
International law, in its widest and most comprehensive sense -- including not only questions of defined and fixed. They seem to have forgotten that they wrote on a question which touched the
right between nations, governed by what has been appropriately called the "law of nations," but comity of nations, and that that comity is, and ever must be, uncertain; that it must necessarily
also questions arising under what is usually called "private international law," or the "conflict of depend on a variety of circumstances which cannot be reduced to any certain rule; that no
laws," and concerning the rights of persons within the territory and dominion of one nation by nation will suffer the laws of another to interfere with her own to the injury of her citizens; that
reason of acts, private or public, done within the dominions of another nation -- is part of our law, whether they do or not must depend on the condition of the country in which the foreign law is
and must be ascertained and administered by the courts of justice as often as such questions sought to be enforced, the particular nature of her legislation, her policy, and the character
are presented in litigation between man and man, duly submitted to their determination.
Page 159 U. S. 165
of her institutions; that in the conflict of laws it must often be a matter of doubt which should administrative authorities, as well as by the writings of its publicists. There is no obligation
prevail, and that, whenever a doubt does exist, the court which decides will prefer the laws of its recognized by legislators, public authorities, and publicists to regard foreign laws; but their
own country to that of the stranger." application is admitted only from considerations of utility and the mutual convenience of
states, ex commitate, ob reciprocam utilitatem."
Story's Conflict of Laws § 28; Saul v. His Creditors (1827), 5 Martin (N.S.) 569, 596.
Wheaton's International Law (8th ed.) §§ 78, 79.
Again, Mr. Justice Story says:
"No sovereign is bound, unless by special compact, to execute within his dominions a judgment
rendered by the tribunals of another state, and if execution be sought by suit upon the judgment
"It has been thought by some jurists that the term comity is not sufficiently expressive of the
or otherwise, the tribunal in which the suit is brought, or from which execution is sought, is on
obligation of nations to give effect to foreign laws when they are not prejudicial to their own rights
principle at liberty to examine into the merits of such judgment, and to give effect to it or not, as
and interests. And it has been suggested that the doctrine rests on a deeper foundation; that it is
may be found just and equitable. The general comity, utility, and convenience of nations have,
not so much a matter of comity or courtesy as a matter of paramount moral duty. Now, assuming
however, established a usage among most civilized states by which the final judgments of
that such a moral duty does exist, it is clearly one of imperfect obligation, like that of
foreign courts of competent jurisdiction are reciprocally carried into execution, under certain
beneficence, humanity, and charity. Every nation must be the final judge for itself not only of the
regulations and restrictions, which differ in different countries."
nature and extent of the duty, but of the occasions on which its exercise may be justly
§ 147.
And after further discussion of the matter, be concludes:
Chancellor Kent says: "The effect to be given to foreign judgments is altogether a matter of
comity in cases where it is not regulated by treaty." 2 Kent Com. (6th ed.) 120.
"There is, then, not only no impropriety in the use of the phrase 'comity of nations,' but it is the
most appropriate phrase to express the true foundation and extent of the obligation of the laws
of one nation within the territories of another." In order to appreciate the weight of the various authorities cited at the bar, it is important to
distinguish different kinds of judgments. Every foreign judgment, of whatever nature, in order to
be entitled to any effect, must have been rendered
Story's Conflict of Laws §§ 33-38.

Page 159 U. S. 167

Chief Justice Taney, likewise, speaking for this Court, while Mr. Justice Story was a member of
it, and largely adopting his words, said:
by a court having jurisdiction of the cause, and upon regular proceedings, and due notice. In
alluding to different kinds of judgments, therefore, such jurisdiction, proceedings, and notice will
"It is needless to enumerate here the instances in which, by the general practice of civilized
be assumed. It will also be assumed that they are untainted by fraud, the effect of which will be
countries, the laws of the one will, by the comity of nations, be recognized and executed in
considered later.
another where the rights of individuals are concerned. . . . The comity thus extended to other
nations is no impeachment of sovereignty. It is the voluntary act of the nation by which it is
offered, and is inadmissible when contrary to its policy, or prejudicial to its interests. But it A judgment in rem, adjudicating the title to a ship or other movable property within the custody of
contributes so largely to promote justice between individuals, and to produce a friendly the court, is treated as valid everywhere. As said by Chief Justice Marshall:
intercourse between the sovereignties to which they belong, that courts of justice have
continually acted upon it as a part of the voluntary law of nations. . . . It is not the comity of the
"The sentence of a competent court proceeding in rem is conclusive with respect to the thing
courts, but the comity
itself, and operates as an absolute change of the property. By such sentence, the right of the
former owner is lost and a complete title given to the person who claims under the decree. No
Page 159 U. S. 166 court of coordinate jurisdiction can examine the sentence. The question, therefore, respecting its
conformity to general or municipal law can never arise, for no coordinate tribunal is capable of
making the inquiry."
of the nation, which is administered and ascertained in the same way, and guided by the same
reasoning, by which all other principles of municipal law are ascertained and guided."
Williams v. Armroyd, 7 Cranch 423, 11 U. S. 432. The most common illustrations of this are
decrees of courts of admiralty and prize, which proceed upon principles of international
Bank v. Earle (1839), 13 Pet. 519, 38 U. S. 589; Story on Conflict of Laws § 38.
law. Croudson v. Leonard, 4 Cranch 434; Williams v. Armroyd,above cited; Ludlow v. Dale, 1
Johns.Cas. 16. But the same rule applies to judgments in rem under municipal law. Hudson v.
Mr. Wheaton says: Guestier, 4 Cranch 293; Ennis v. Smith, 14 How. 400, 45 U. S. 430; Wisconsin v. Pelican Ins.
Co., 127 U. S. 265, 127 U. S. 291; Scott v. McNeal, 154 U. S. 34, 154 U. S. 46; Castrique v.
Imrie, L.R. 4 H.L. 414; Monroe v. Douglas, 4 Sandf.Ch. 126.
"All the effect which foreign laws can have in the territory of a state depends absolutely on the
express or tacit consent of that state. . . . The express consent of a state to the application of
foreign laws within its territory is given by acts passed by its legislative authority, or by treaties A judgment affecting the status of persons, such as a decree confirming or dissolving a
concluded with other states. Its tacit consent is manifested by the decisions of its judicial and marriage, is recognized as valid in every country unless contrary to the policy of its own
law. Cottington's Case, 2 Swanston 326; Roach v. Garvan, 1 Ves.Sen. 157; Harvey v. Farnie, 8 vacated and declared void by a court of competent jurisdiction, he thought that sentence was
App.Cas. 43; Cheely v. Clayton, 110 U. S. 701. It was of a foreign sentence of divorce that Lord conclusive, and bound the Court of Chancery here;"
Chancellor Nottingham, in the House of Lords, in 1678, in Cottington's Case, above cited, said:
as reported in Viner, that "the court at Leghorn had jurisdiction of the thing and of the persons;"
"It is against the law of nations not to give credit to the judgments and sentences of foreign and, as reported by Mosely, that though
countries till they be reversed by the law,
"the last endorsees had the sole property of the bills, and were therefore made the only parties
Page 159 U. S. 168 to the suit at Leghorn, yet the sentence made the acceptance void against the now defendants
and all others."
and according to the form, of those countries wherein they were given, for what right hath one
kingdom to reverse the judgment of another? And how can we refuse to let a sentence take It is doubtful, at the least, whether such a sentence was entitled to the effect given to it by Lord
place till it be reversed? And what confusion would follow in Christendom if they should serve us Chancellor King. See Novelli v. Rossi, 2 B. & A. 757; Castrique v. Imrie, L.R. 4 H.L. 414, 435; 2
so abroad, and give no credit to our sentences." Smith's Lead.Cas. (2d ed.) 450.

Other judgments, not strictly in rem, under which a person has been compelled to pay money, The remark of Lord Hardwicke, arguendo, as Chief Justice, in Boucher v. Lawson (1734) that
are so far conclusive that the justice of the payment cannot be impeached in another country, so
as to compel him to pay it again. For instance, a judgment in foreign attachment is conclusive,
"the reason gone upon by Lord Chancellor King, in the case of Burroughs v. Jamineau, was
as between the parties, of the right to the property or money attached. Story on Conflict of Laws
certainly right that where any court, whether foreign or domestic, that has the proper jurisdiction
(2d ed.) § 592a. And if, on the dissolution of a partnership, one partner promises to indemnify
of the cases makes a determination, it is conclusive to all other courts,"
the other against the debts of the partnership, a judgment for such a debt, under which the latter
has been compelled to pay it, is conclusive evidence of the debt in a suit by him to recover the
amount upon the promise of indemnity. It was of such a judgment and in such a suit that Lord evidently had reference, as the context shows, to judgments of a court having jurisdiction of the
Nottingham said: thing, and did not touch the effect of an executory judgment for a debt. Cas.temp.Hardw. 85, 89;
Cunningham 144, 148.
"Let the plaintiff receive back so much of the money brought into court as may be adequate to
the sum paid on the sentence for custom, the justice whereof is not examinable here." In former times, foreign decrees in admiralty in personam were executed, even by imprisonment
of the defendant, by the court of admiralty in England, upon letters rogatory from the foreign
sovereign, without a new suit. Its right to
Gold v. Canham (1679), 2 Swanst. 325, 1 Cas. in Ch. 311. See also Tarleton v. Tarleton, 4 M. &
S. 20; Konitzky v. Meyer, 49 N.Y. 571.
Page 159 U. S. 170
Other foreign judgments which have been held conclusive of the matter adjudged were
judgments discharging obligations contracted in the foreign country between citizens or do so was recognized by the court of King's Bench in 1607 in a case of habeas corpus, cited by
residents thereof. Story on Conflict of Laws §§ 330-341; May v. Breed, 7 Cush. 15. Such was the plaintiffs, and reported as follows:
the case cited at the bar of Burroughs or Burrows v. Jamineau or Jemino, Mosely 1, 2 Strange
733, 2 Eq.Cas.Ab. p. 525, pl. 7, 12 Vin.Ab. p. 87, pl. 9 Sel.Cas. in Ch. 69; 1 Dickens 48.
"If a man of Frizeland sues an Englishman in Frizeland before the governor there, and there
recovers against him a certain sum, upon which the Englishman, not having sufficient to satisfy
In that case, bills of exchange drawn in London were negotiated, endorsed, and accepted at it, comes into England, upon which the governor sends his letters missive into England, omnes
Leghorn, in Italy, by the law of which an acceptance became void if the drawer failed without magistratus infra regnum Angliae rogans, to make execution of the said judgment, the judge of
leaving effects in the acceptor's hands. The acceptor accordingly, having received advices that the admiralty may execute this judgment by imprisonment of the party, and he shall not be
the drawer had failed delivered by the common law, for this is by the law of nations that the justice of one nation
should be aiding to the justice of another nation, and for one to execute the judgment of the
other, and the law of England takes notice of this law, and the judge of the admiralty is the
Page 159 U. S. 169
proper magistrate for this purpose, for he only hath the execution of the civil law within the realm.
Pasch. 5 Jac.B.R., Weir's Case, resolved upon a habeas corpus and remanded."
before the acceptances, brought a suit at Leghorn against the last endorsees to be discharged
of his acceptances, paid the money into court, and obtained a sentence there by which the
1 Rol.Ab. p. 530, pl. 12; 6 Vin.Ab. p. 512, pl. 12. But the only question there raised or decided
acceptances were vacated as against those endorsees, and all the endorsers and negotiators of
was of the power of the English court of admiralty, and not of the conclusiveness of the foreign
the bills, and the money deposited was returned to him. Being afterwards sued at law in England
sentence, and in later times the mode of enforcing a foreign decree in admiralty is by a new
by subsequent holders of the bills, he applied to the Court of Chancery, and obtained a
libel. See The City of Mecca, 5 P.D. 28, 6 P.D. 106.
perpetual injunction. Lord Chancellor King, as reported by Strange,

The extraterritorial effect of judgments in personam at law or in equity may differ according to the
"was clearly of opinion that this cause was to be determined according to the local laws of the
parties to the cause. A judgment of that kind between two citizens or residents of the country,
place where the bill was negotiated, and, the plaintiff's acceptance of the bill having been
and thereby subject to the jurisdiction in which it is rendered, may be held conclusive as
between them everywhere. So if a foreigner invokes the jurisdiction by bringing an action against "He recollected a case of a decree on the chancery side in one of the courts of great sessions in
a citizen, both may be held bound by a judgment in favor of either, and if a citizen sues a Wales, from which there was an appeal to the House of Lords, and the decree affirmed there.
foreigner and judgment is rendered in favor of the latter, both may be held equally Afterwards, a bill was filed in the Court of Chancery, on the foundation of the decree so affirmed,
bound. Ricardo v. Garcias, 12 Cl. & Fin. 368; The Griefswald, Swabey 430, 435; Barber v. and Lord Hardwicke thought himself entitled to examine into the justice of the decision of the
Lamb, 8 C.B. (N.S.) 95; Lea v. Deakin, 11 Bissell 23. House of Lords, because the original decree was in the court of Wales, whose decisions were
clearly liable to be examined."
The effect to which a judgment, purely executory, rendered
And in Galbraith v. Neville (1789), 1 Doug. 6, note, Mr. Justice Buller said:
Page 159 U. S. 171
"I have often heard Lord Mansfield repeat what was said by Lord Hardwicke in the case alluded
to from Wales, and the ground of his lordship's opinion was this: when you call for my assistance
in favor of a citizen or resident of the country, in a suit there brought by him against a foreigner,
to carry into effect the decision of some other tribunal, you shall not have it if it appears that you
may be entitled in an action thereon against the latter in his own country, as is the case now
are in the wrong, and it was on that account that he said he would examine into the propriety of
before us, presents a more difficult question, upon which there has been some diversity of
the decree."

The case before Lord Hardwicke mentioned by Lord Mansfield would appear (notwithstanding
Early in the last century, it was settled in England that a foreign judgment on a debt was
the doubt of its authenticity expressed by Lord Kenyon in Galbraith v. Neville) to have been a
considered not like a judgment of a domestic court of record, as a record or a specialty, a lawful
suit to recover a legacy, briefly reported, with references to Lord Hardwicke's note book, and to
consideration for which was conclusively presumed, but as a simple contract only.
the original record, as Morgan v. Morgan (1737-1738), West.Ch. 181, 597; s.c., 1 Atk. 53, 408.

This clearly appears in Dupleix v. De Roven (1705), where one of two merchants in France
In Gage v. Bulkeley (1744), briefly reported in 3 Atk. 215, cited by the plaintiffs, a plea of a
recovered a judgment there against the other for a sum of money, which not being paid, he
foreign sentence in a commissary court in France was overruled by Lord Hardwicke, saying: "It
brought a suit in chancery in England for a discovery of assets and satisfaction of the debt, and
is the most proper case to stand for an answer, with liberty to except, that I ever met with." His
the defendant pleaded the statute of limitations of six years, and prevailed, Lord Keeper Cowper
reasons are fully stated in two other reports of the case. According to one of them, at the
opening of the argument, he said:

"Although the plaintiff obtained a judgment or sentence in France, yet here the debt must be
"Can a sentence or judgment pronounced by a foreign jurisdiction be pleaded in this Kingdom to
considered as a debt by simple contract. The plaintiff can maintain no action here but
a demand for the same thing in any court of justice here? I always thought it could not, because
an indebitatus assumpsit or an insimul computassent, so that the statute of limitations is
every sentence, having its authority from the sovereign in whose dominions it is given, cannot
pleadable in this case."
bind the jurisdiction of foreign courts, who own not the same authority,

2 Vernon 540.
Page 159 U. S. 173

Several opinions of Lord Hardwicke define and illustrate the effect of foreign judgments when
and have a different sovereign, and are only bound by judicial sentence given under the same
sued on or pleaded in England.
sovereign power by which they themselves act. . . . But though a foreign sentence cannot be
used by way of plea in the courts here, yet it may be taken advantage of in the way of evidence.
In Otway v. Ramsay (1736), in the King's Bench, Lord Hardwicke treated it as worthy of . . . You cannot in this Kingdom maintain debt upon judgment obtained for money in a foreign
consideration "what credit is to be given by one court to the courts of another nation, proceeding jurisdiction, but you may on assumpsit in nature of debt, upon a simple contract, and give the
both by the same rules of law," and said: "It is very desirable in such case that the judgment judgment in evidence, and have a verdict, so that the distinction seems to be, where such
given in one kingdom should be considered as res judicata in another." But it was held that debt foreign sentence is used as a plea to bind the courts here as a judgment, and when it is made
would not lie in Ireland upon an English judgment, because "Ireland must be considered as a use of in evidence as binding the justice of the case only."
provincial kingdom, part of the dominions of the crown of England, but no part of the realm," and
an action of debt on a judgment was local. 4 B. & C. 414-416, note; s.c., 14 Vin.Ab. 569, pl.;, 2
And afterwards, in giving his decision, he said:
Stra. 1090.

"The first question is whether the subject matter of the plea is good. The second is whether it is
A decision of Lord Hardwicke as Chancellor was mentioned
well pleaded. The first question depends upon this: whether the sentence or judgment of a
foreign court can be used by way of plea in a court of justice in England, and no authority, either
Page 159 U. S. 172 at law or in equity, has been produced to show that it may be pleaded, and therefore I shall be
very cautious how I establish such a precedent. . . . It is true such sentence is an evidence which
may affect the right of this demand when the cause comes to be heard, but if it is no plea in a
in Walker v. Witter (1778), 1 Doug. 1, 6, by Lord Mansfield, who said: court of law to bind their jurisdiction, I do not see why it should be so here."
Ridgeway temp. Hardw. 263, 264, 270, 273. A similar report of his judgment is in 2 Ves.Sen. Accordingly, in Crawford v. Witten (1773), a declaration in assumpsit, in an action in England
(Belt's Supp.) 409, 410. upon a judgment recovered in the Mayor's Court of Calcutta, in Bengal, without showing the
cause of action there, was held good on demurrer. Lord Mansfield considered the case perfectly
clear. Mr. Justice Aston, according to one report, said: "The declaration is sufficient. We are not
In Roach v. Garvan (1748), where an infant ward of the Court of Chancery had been married in
to suppose it an unlawful debt," and, according to another report:
France by her guardian to his son before a French court, and the son "petitioned for a decree for
cohabitation with his wife, and to have some money out of the bank," Lord Hardwicke said, as to
the validity of the marriage: "They admitted the assumpsit by their demurrer. When an action comes properly before any
court, it must be determined by the laws which govern the country in which the action accrued."
"It has been argued to be valid, from being established by the sentence of a court in France
having proper jurisdiction, and it is true that, if so, it is conclusive, whether in a foreign court or And Mr. Justice Ashurst said: "I have often known assumpsit brought on judgments in foreign
not, from the law of nations in such cases; otherwise, the rights of mankind would be very courts. The judgment is a sufficient consideration to support the implied promise." Loft, 154; s.c.,
precarious and uncertain. But the question is whether this is a proper sentence, in a proper nom. Crawford v. Whittal, 1 Doug. 4, note.
cause, and between proper
In Walker v. Witter (1778), an action of debt was brought in England upon a judgment recovered
Page 159 U. S. 174 in Jamacia. The defendant pleaded nil debet and nul tiel record. Judgment was given for the
plaintiff, Lord Mansfield saying:
parties, of which it is impossible to judge without looking further into the proceedings, this being
rather the execution of the sentence than the sentence itself." "The plea of nul tiel record was improper. Though the plaintiffs had called the judgment a record,
yet, by the additional words in the declaration, it was clear they did not mean that sort of record
to which implicit faith is given by the courts of Westminster Hall. They had not misled the court
And after observing upon the competency of the French tribunal and pointing out that restitution
nor the defendant, for they spoke of it as a court of record in Jamaica. The question was brought
of conjugal rights was within the jurisdiction of the ecclesiastical court, and not of the Court of
to a narrow point, for it was admitted on the part of the defendant that indebitatus
Chancery, he added: "Much less will I order any money out of the bank to be given him." 1
assumpsitwould have lain, and on the part of the plaintiff that the judgment was only prima
Ves.Sen. 157, 159. He thus clearly recognized the difference between admitting the effect of a
facie evidence of the debt. That being so, the judgment was not a specialty, but the debt only a
foreign judgment as adjudicating the status of persons and executing a foreign judgment by
simple contract debt, for assumpsit will not lie on a specialty. The difficulty in the case had arisen
enforcing a claim for money.
from not fixing accurately what a court of record is in the eye of the law. That description is
confined properly to certain courts in England, and their judgments cannot be controverted.
These decisions of Lord Hardwicke demonstrate that, in his opinion, whenever the question was Foreign courts, and courts in England not of record, have not that privilege, nor the courts in
of giving effect to a foreign judgment for money in a suit in England between the parties, it did Wales, etc. But the doctrine in the case of Sinclair v. Fraser was unquestionable. Foreign
not have the weight of a domestic judgment, and could not be considered as a bar or as judgments are
conclusive, but only as evidence of the same weight as a simple contract, and the propriety and
justice of the judgment might be examined.
Page 159 U. S. 176

In Sinclair v. Fraser (1771), the appellant, having as attorney in Jamaica made large advances
a ground of action everywhere, but they are examinable."
for his constituent in Scotland and having been superseded in office, brought an action before
the Supreme Court of Jamaica, and, after appearance, obtained judgment against him, and
afterwards brought an action against him in Scotland upon that judgment. The Court of Session Justices Willes, Ashurst, and Buller concurred, the two latter saying that wherever indebitatus
determined that the plaintiff was bound to prove before it the ground, nature, and extent of the assumpsit will lie, debt will also lie. 1 Doug. 1, 5, 6.
demand on which the judgment in Jamaica was obtained, and therefore gave judgment against
him. But the House of Lords (in which, as remarked by one reporter, Lord Mansfield was then
In Herbert v. Cook (1782), again, in an action of debt upon a judgment of an inferior English
the presiding spirit, acting in concert with or for the Lord Chancellor in disposing of the Scotch
court, not a court of record, Lord Mansfield said that it was "like a foreign judgment, and not
conclusive evidence of the debt." Willes 36, note.

"ordered and declared that the judgment of the Supreme Court of Jamaica ought to be received
In Galbraith v. Neville (1789), upon a motion for a new trial after verdict for the plaintiff in an
as evidence prima facie of the debt, and that it lies upon the defendant to impeach the justice
action of debt on a judgment of the Supreme Court of Jamaica, Lord Kenyon expressed "very
thereof or to show the same to have been irregularly obtained,"
serious doubts concerning the doctrine laid down in Walker v. Witter that foreign judgments are
not binding on the parties here." But Mr. Justice Buller said:
and therefore reversed the judgment of the Court of Session. 2 Paton ix, 253; s.c., 6 Morison
Dict.Dec. 4542; 1 Doug. 5, note.
"The doctrine which was laid down in Sinclair v. Fraser has always been considered as the true
line ever since -- namely that the foreign judgment shall be prima facie evidence of the debt, and
Page 159 U. S. 175 conclusive till it be impeached by the other party. . . . As to actions of this sort, see how far the
court could go if what was said in Walker v. Witter were departed from. It was there held that the
foreign judgment was only to be taken to be right prima facie -- that is, we will allow the same
force to a foreign judgment that we do to those of our own courts not of record. But if the matter
were carried further, we should give them more credit; we should give them equal force with according to the laws of that country, the judgment was proper; if, according to the laws of that
those of courts of record here. Now a foreign judgment has never been considered as a record. country, the property in the debt was divested out of the bankrupt debtor and vested in his
It cannot be declared on as such, and a plea of nul tiel record, in such a case, is a mere nullity. assignees, the judgment was improper. But this was a question to be decided, in the cause
How then can it have the same obligatory force? In short, the result is this: that it is prima instituted in Pennsylvania, by the courts of that country, and not by us. We cannot examine their
facie evidence of the justice of the demand in an action of assumpsit, having no more credit than judgment, and if we could, we have not the means of doing it in this case. It is not stated upon
is given to every species of written agreement, viz., that it shall be considered as good till it is this record, nor can we take notice, what the law of Pennsylvania is upon this subject. If we had
impeached." the means, we could not examine a judgment of a court in a foreign state, brought before us in
this manner."
1 Doug. 6, note. And the court afterwards unanimously refused the new trial, because,
"It is in one way only that the sentence or judgment of a court of a foreign state is examinable in
our courts, and that is when the party who claims the benefit of it applies to our courts to enforce
"without entering into the question how far a foreign judgment was impeachable, it was at all
it. When it is thus voluntarily submitted to our jurisdiction, we treat it not as obligatory to the
events clear that it was prima facie evidence of the debt, and they were of opinion
extent to which it would be obligatory, perhaps, in the country in which it was pronounced, nor as
obligatory to the extent to which, by our law, sentences and judgments are obligatory not as
Page 159 U. S. 177 conclusive, but as matter in pais, as consideration prima facie sufficient to raise a promise. We
examine it as we do all other considerations or promises, and for that purpose we receive
evidence of what the law of the foreign state is, and whether the judgment is warranted by that
that no evidence had been adduced to impeach this." law."

5 East 475, note.

2 H.Bl. 402, 409-410.

In Messing v. Massareene (1791), the plaintiff, having obtained a judgment against the In Wright v. Simpson (1802), Lord Chancellor Eldon said:
defendants in a French court, brought an action of assumpsit upon it in England, and, the
defendants having suffered a default, moved for a reference to a master, and for a final
judgment on his report, without executing a writ of inquiry. The motion was denied, Lord Kenyon "Natural law requires the courts of this country to give credit to those of another for the
saying: "This is an attempt to carry the rule further than has yet been done, and, as there is no inclination and power to do justice, but not if that presumption is proved to be ill founded in that
instance of the kind, I am not disposed to make a precedent for it," and Mr. Justice Buller saying: transaction which is the subject of it, and if it appears in evidence that persons suing under
"Though debt will lie here on a foreign judgment, the defendant may go into the consideration of similar circumstances neither had met, nor could meet, with justice, that fact cannot be
it." 4 T.R. 493. immaterial as an answer to the presumption."

In Bayley v. Edwards (1792), the judicial committee of the Privy Council, upon appeal from 6 Ves. 714, 730.
Jamaica, held that a suit in equity pending in England was not a good plea in bar to a
subsequent bill in Jamaica for the same matter, and Lord Camden said:
Page 159 U. S. 179

"In Gage v. Bulkeley [evidently referring to the full report in Ridgeway, above quoted, which had
Under Lord Ellenborough, the distinction between a suit on a foreign judgment in favor of the
been cited by counsel], Lord Hardwicke's reasons go a great way to show the true effect of
plaintiff against the defendant, and a suit to recover money which the plaintiff had been
foreign sentences in this country, and all the cases show that foreign sentences are not
compelled to pay under a judgment abroad, was clearly maintained.
conclusive bars here, but only evidence of the demand."

In Buchanan v. Rucker (1808), in assumpsit upon a judgment rendered in the Island of Tobago,
3 Swanston 703, 708, 710.
the defendant pleaded non assumpsit and prevailed because it appeared that he was not a
resident of the island, and was neither personally served with process nor came in to defend,
In Phillips v. Hunter (1795), the House of Lords, in accordance with the opinion of the majority of and the only notice was, according to the practice of the court, by nailing up a copy of the
the judges consulted and against that of Chief Justice Eyre, decided that a creditor of an English declaration at the courthouse door. It was argued that "the presumption was in favor of a foreign
bankrupt, who had obtained payment of his debt by foreign attachment in Pennsylvania, was judgment, as well as of a judgment obtained in one of the courts of this country," to which Lord
liable to an action for the money by the assignees in bankruptcy in England. But it was agreed Ellenborough answered:
on all hands that the judgment in Pennsylvania and payment under it were conclusive as
between the garnishee and the plaintiff in that suit, and the distinction between the effect of a
"That may be so if the judgment appears, on the face of it, consistent with reason and justice,
foreign judgment which vests title, and of one which only declares that a certain sum of money is
but it is contrary to the first principles of reason and justice that, either in civil or criminal
due, was clearly stated by Chief Justice Eyre as follows:
proceedings, a man should be condemned before he is heard. . . . There might be such glaring
injustice on the face of a foreign judgment, or it might have a vice rendering it so ludicrous, that it
Page 159 U. S. 178 could not raise an assumpsit, and, if submitted to the jurisdiction of the courts of this country,
could not be enforced."
"This judgment against the garnishee in the court of Pennsylvania was recovered properly or
improperly. If, notwithstanding the bankruptcy, the debt remained liable to an attachment
1 Camp. 63, 66-67. A motion for a new trial was denied. 9 East 192. And see Sadler v. common law before the American Revolution, all the courts of the several colonies and states
Robins (1808), 1 Camp. 253, 256. were deemed foreign to each other, and consequently judgments rendered by any one of them
were considered as foreign judgments, and their merits reexaminable in another colony not only
as to the jurisdiction of the court which pronounced them, but also as to the merits of the
In Hall v. Odber (1809), in assumpsit upon a judgment obtained in Canada, with other counts on
controversy, to the extent to which they were understood to be reexaminable in England. And
the original debt, Lord Ellenborough and Justices Grose, Le Blanc, and Bayley agreed that a
they noted that in order to remove that inconvenience, statutes had been passed in
foreign judgment was not to be considered as having the same force as a domestic judgment,
Massachusetts, and in some of the other colonies, by which judgments rendered by a court of
but only that of a simple contract between the parties, and did not merge the original cause of
competent jurisdiction in a neighboring colony could not be impeached. Bissell v. Briggs, 9
action, but was only evidence of the debt, and therefore assumpsit would lie, either upon the
Mass. 462, 464-465; Mass.Stat. 1773-74, c. 16; 5 Prov.Laws, 323, 369; Story on the
judgment or upon the original cause of action. 11 East 118.
Constitution (1st ed.) §§ 1301, 1302; (4th ed.) §§ 1306, 1307.

In Tarleton v. Tarleton (1815), on the other hand, the action was brought upon a covenant of
It was because of that condition of the law as between the American colonies and states that the
indemnity in an agreement for dissolution of a partnership to recover a sum which the
United States, at the very beginning of their existence as a nation, ordained that full faith and
credit should be given to the judgments of one of the states of the Union in the courts of another
Page 159 U. S. 180 of those states.

plaintiff had been compelled to pay under a decision in a suit between the parties in the Island of By the articles of confederation of 1777, Art. 4, § 3, "full faith and credit shall be given, in each of
Grenada. Such was the case of which Lord Ellenborough, affirming his own ruling at the trial, these states, to the records, acts and judicial proceedings of the courts and magistrates of every
said: other state." 1 Stat. 4. By the Constitution of the United States, Article IV, § 1,

"I thought that I did not sit at nisi prius to try a writ of error in this case upon the proceedings in "Full faith and credit shall be given in each state to the public acts, records and judicial
the court abroad. The defendant had notice of the proceedings, and should have appeared and proceedings of every other state, and the Congress may by general laws prescribe the manner
made his defense. The plaintiff, by this neglect, has been obliged to pay the money in order to in which such acts, records and proceedings shall be proved, and the effect thereof."
avoid a sequestration."
And the first Congress of the United States under the Constitution, after prescribing the manner
The distinction was clearly brought out by Mr. Justice Bayley, who said: "As between the parties in which the records and judicial proceedings of the courts of any state should be authenticated
to the suit, the justice of it might be again litigated, but as against a stranger it cannot.� 4 M. & and proved, enacted that
S. 20, 22-23.
"the said records and judicial proceedings, authenticated as aforesaid, shall have
In Harris v. Saunders (1825), Chief Justice Abbott (afterwards Lord Tenterden) and his
associates, upon the authority of Otway v. Ramsay, above cited, held that even since the Act of Page 159 U. S. 182
Union of 39 & 40 Geo. III. c. 67, assumpsit would lie in England upon a judgment recovered in
Ireland, because such a judgment could not be considered a specialty debt in England. 4 B. & C.
411, 6 D. & R. 471. such faith and credit given to them in every court within the United States as they have by law or
usage in the courts of the state from whence the said records are or shall be taken."
The English cases above referred to have been stated with the more particularity and detail,
because they directly bear upon the question what was the English law, being then our own law, Act May 26, 1790, c. 11, 1 Stat. 122; Rev.Stat. § 905.
before the Declaration of Independence? They demonstrate that, by that law as generally
understood, and as declared by Hardwicke, Mansfield, Buller, Camden, Eyre, and Ellenborough,
The effect of these provisions of the Constitution and laws of the United States was at first a
and doubted by Kenyon only, a judgment recovered in a foreign country for a sum of money,
subject of diverse opinions not only in the courts of the several states, but also in the circuit
when sued upon in England, was only prima facie evidence of the demand, and subject to be
courts of the United States; Mr. Justice Cushing, Mr. Justice Wilson, and Mr. Justice
examined and impeached. The law of England since it has become to us a foreign country will
Washington, holding that judgments of the courts of a state had the same effect throughout the
be considered afterwards.
Union as within that state, but Chief Justice Marshall (if accurately reported) being of opinion that
they were not entitled to conclusive effect, and that their consideration might be
The law upon this subject as understood in the United States at the time of their separation from impeached. Armstrong v. Carson (1794), 2 Dall. 302; Green v. Sarmiento (1811), 3 Wash. C.C.
the mother country was clearly set forth by Chief Justice Parsons, speaking for the Supreme 17, 21; Pet. C.C. 74, 78; Peck v. Williamson (reported as in November, 1813, apparently a
Judicial Court of Massachusetts in 1813, and by Mr. Justice Story in his Commentaries on the mistake for 1812), 1 Carolina Law Repository 53.
Constitution of the United States, published in 1833. Both those
The decisions of this Court have clearly recognized that judgments of a foreign state are prima
Page 159 U. S. 181 facie evidence only, and that, but for these constitutional and legislative provisions, judgments of
a state of the Union, when sued upon in another state, would have no greater effect.
eminent jurists declared that, by the law of England, the general rule was that foreign judgments
were only prima facieevidence of the matter which they purported to decide, and that, by the
In Croudson v. Leonard (1808), in which this Court held that the sentence of a foreign court of "In construing the act of 1790, the law as it stood when the act was passed
admiralty in rem condemning a vessel for breach of blockade was conclusive evidence of that
fact in an action on a policy of insurance, Mr. Justice Washington, after speaking of the
Page 159 U. S. 184
conclusiveness of domestic judgments generally, said:

must enter into that construction, so that the existing defect in the old law may be seen and its
"The judgment of a foreign court is equally conclusive, except in the single instance where the
remedy by the act of Congress comprehended. Now it was most reasonable, on general
party claiming the benefit of it applies to the courts in England to enforce it, in which case only
principles of comity and justice, that among states and their citizens united as ours are,
the judgment is prima facie evidence. But it is to be remarked that in such a case, the judgment
judgments rendered in one should bind citizens of other states where defendants had been
is no more conclusive as to the right it establishes than as to the fact it decides."
served with process or voluntarily made defense. As these judgments, however, were only prima
facie evidence, and subject to be inquired into by plea when sued on in another state, Congress
8 U. S. 4 Cranch 434, 8 U. S. 442. saw proper to remedy the evil and to provide that such inquiry and double defense should not be
allowed. To this extent, it is declared in the case of Mills v. Duryee,Congress has gone in altering
the old rule."
In Mills v. Duryee (1813), in which it was established that, by virtue of the Constitution and laws
of the United States, the judgment of a court of one of the states was conclusive
52 U. S. 11 How. 165, 52 U. S. 175-176.
Page 159 U. S. 183
In Christmas v. Russell (1866), in which this Court decided that because of the Constitution and
laws of the United States, a judgment of a court of one state of the Union, when sued upon in a
evidence, in every court within the United States, of the matter adjudged, and therefore nul tiel
court of another, could not be shown to have been procured by fraud, Mr. Justice Clifford, in
record, and not nil debet,was a proper plea to an action brought in a court of the United States in
delivering the opinion, after stating that under the rules of the common law a domestic judgment
the District of Columbia upon a judgment recovered in a court of the State of New York, this
rendered in a court of competent jurisdiction could not be collaterally impeached or called in
Court, speaking by Mr. Justice Story, said:
question, said:

"The pleadings in an action are governed by the dignity of the instrument on which it is founded.
"Common law rules placed foreign judgments upon a different footing, and those rules remain,
If it be a record conclusive between the parties, it cannot be denied but by the plea of nul tiel
as a general remark, unchanged to the present time. Under these rules, a foreign judgment
record, and when Congress gave the effect of a record to the judgment it gave all the collateral
was prima facie evidence of the debt, and it was open to examination, not only to show that the
consequences. . . . Were the construction contended for by the plaintiff in error to prevail, that
court in which it was rendered had no jurisdiction of the subject matter, but also to show that the
judgments of the state courts ought to be considered prima facie evidence only, this clause in
judgment was fraudulently obtained."
the Constitution would be utterly unimportant and illusory. The common law would give such
judgments precisely the same effect."
72 U. S. 5 Wall. 290, 72 U. S. 304.
11 U. S. 7 Cranch 481, 11 U. S. 484-485.
In Bischoff v. Wethered (1869), in an action on an English judgment rendered without notice to
the defendant other than by service on him in this country, this Court, speaking by Mr. Justice
In Hampton v. McConnell (1818), the point decided in Mills v. Duryee was again adjudged,
Bradley, held that the proceeding in England
without further discussion, in an opinion delivered by Chief Justice Marshall. 16 U. S. 3 Wheat.
"was wholly without jurisdiction of the person, and whatever validity it may have in England, by
virtue of statute law, against property of the defendant there situate, it can have no validity here,
The obiter dictum of Mr. Justice Livingston in Hopkins v. Lee (1821), 6 Wheat. 109, 19 U. S. 114,
even of a prima facie character."
repeated by Mr. Justice Daniel in Pennington v. Gibson (1853), 16 How. 65, 57 U. S. 78, as to
the general effect of foreign judgments, has no important bearing upon the case before us.
76 U. S. 9 Wall. 812, 76 U. S. 814.
In McElmoyle v. Cohen (1839), Mr. Justice Wayne, discussing the effect of the act of Congress
of 1790, said that Page 159 U. S. 185

"the adjudications of the English courts have now established the rule to be that foreign In Hanley v. Donoghue (1885), 116 U. S. 1, 116 U. S. 4, and in Wisconsin v. Pelican Ins.
judgments are prima facieevidence of the right and matter they purport to decide." Co. (1888), 127 U. S. 265, 127 U. S. 292, it was said that judgments recovered in one state of
the Union, when proved in the courts of another, differed from judgments recovered in a foreign
country in no other respect than in not being reexaminable on their merits nor impeachable for
38 U. S. 13 Pet. 312, 38 U. S. 325.
fraud in obtaining them if rendered by a court having jurisdiction of the cause and of the parties.

In D'Arcy v. Ketchum (1850), in which this Court held that the provisions of the Constitution and
But neither in those cases nor in any other has this Court hitherto been called upon to determine
laws of the United States gave no effect in one state to judgments rendered in another state by a
how far foreign judgments may be reexamined upon their merits, or be impeached for fraud in
court having no jurisdiction of the cause or of the parties, Mr. Justice Catron said:
obtaining them.
In the courts of the several states it was long recognized and assumed as undoubted and Bryant v. Ela, Smith (N.H.) 396, 404.
indisputable that by our law, as by the law of England, foreign judgments for debts were not
conclusive, but only prima facie evidence of the matter adjudged. Some of the cases are
From this review of the authorities, it clearly appears that at the time of the separation of this
collected in the margin. *
country from England, the general rule was fully established that foreign judgments in
personam were prima facie evidence only, and not conclusive of the merits of the controversy
In the leading case of Bissell v. Briggs, above cited, Chief Justice Parsons said: between the parties. But the extent and limits of the application of that rule do not appear to
have been much discussed or defined with any approach to exactness in England or America
until the matter was taken up by Chancellor Kent and by Mr. Justice Story.
"A foreign judgment may be produced here by a party to it either to justify himself by the
execution of that judgment in the country in which it was rendered or to obtain the execution of it
from our courts. . . . If the foreign court rendering the judgment had jurisdiction of the cause, yet In Taylor v. Bryden (1811), an action of assumpsit brought in the Supreme Court of the State of
the courts here will not execute the judgment, without first New York on a judgment obtained in the State of Maryland against the defendant as endorser of
a bill of exchange, and which was treated as a foreign judgment, so far as concerned its effect in
New York (the decision of this Court to the contrary in Mills v. Duryee, 7 Cranch 481, not having
Page 159 U. S. 186
yet been made), Chief Justice Kent said:

allowing an inquiry into its merits. The judgment of a foreign court therefore is by our laws
"The judgment in Maryland is presumptive evidence of a just demand, and it was incumbent
considered only as presumptive evidence of a debt, or as prima facie evidence of a sufficient
upon the defendant, if he would obstruct the execution of the judgment here, to show by positive
consideration of a promise, where such court had jurisdiction of the cause, and if an action of
proof that it was irregularly or unduly obtained. . . . To try over again, as of course, every matter
debt be sued on any such judgment, nil debet is the general issue, or if it be made the
of fact which had been duly decided by a competent tribunal would be disregarding the comity
consideration of a promise, the general issue is non assumpsit. On these issues the defendant
which we justly owe to the courts of other states, and would be carrying the doctrine of
may impeach the justice of the judgment by evidence relative to that point. On these issues, the
reexamination to an oppressive extent. It would be the same as granting a new trial in every
defendant may also, by proper evidence, prove that the judgment was rendered by a foreign
case and upon every question of fact. Suppose a recovery in another state, or in any foreign
court which had no jurisdiction, and if his evidence be sufficient for this purpose, he has no
court, in an action for a
occasion to impeach the justice of the judgment."

Page 159 U. S. 188

9 Mass. 463, 464.

tort, as for an assault and battery, false imprisonment, slander, etc., and the defendant was duly
In a less known case, decided in 1815 but not published until 1879, the reasons for this view
summoned and appeared, and made his defense, and the trial was conducted orderly and
were forcibly stated by Chief Justice Jeremiah Smith, speaking for the Supreme Court of New
properly, according to the rules of a civilized jurisprudence, is every such case to be tried again
Hampshire, as follows:
here on the merits? I much doubt whether the rule can ever go to this length. The general
language of the books is that the defendant must impeach the judgment by showing affirmatively
"The respect which is due to judgments, sentences, and decrees of courts in a foreign state by that it was unjust by being irregularly or unfairly procured."
the law of nations seems to be the same which is due to those of our own courts. Hence, the
decree of an admiralty court abroad is equally conclusive with decrees of our admiralty courts.
But the case was decided upon the ground that the defendant had done no more than raise a
Indeed, both courts proceed by the same rule, are governed by the same law -- the maritime law
doubt of the correctness of the judgment sued on. 8 Johns. 173, 177, 178.
of nations, Coll.Jurid. 100, which is the universal law of nations except where treaties alter it."

Chancellor Kent afterwards, treating of the same subject in the first edition of his Commentaries
"The same comity is not extended to judgments or decrees which may be founded on the
(1827), put the right to impeach a foreign judgment somewhat more broadly, saying:
municipal laws of the state in which they are pronounced. Independent states do not choose to
adopt such decisions without examination. These laws and regulations may be unjust, partial to
citizens, and against foreigners. They may operate injustice to our citizens, whom we are bound "No sovereign is obliged to execute within his dominion a sentence rendered out of it, and if
to protect. They may be, and the decisions of courts founded on them, just cause of complaint execution be sought by a suit upon the judgment or otherwise, he is at liberty, in his courts of
against the supreme power of the state where rendered. To adopt them is not merely saying that justice, to examine into the merits of such judgment [for the effect to be given to foreign
the courts have decided correctly on the law, but it is approbating the law itself. Wherever, then, judgments is altogether a matter of comity in cases where it is not regulated by treaty]. In the
the court may have proceeded on municipal former case [of a suit to enforce a foreign judgment], the rule is that the foreign judgment is to be
received in the first instance as prima facie evidence of the debt, and it lies on the defendant to
impeach the justice of it or to show that it was irregularly and unduly obtained. This was the
Page 159 U. S. 187
principle declared and settled by the House of Lords in 1771 in the case of Sinclair v.
Fraser upon an appeal from the Court of Cession in Scotland."
law, the rule is that the judgments are not conclusive evidence of debt, but prima facie evidence
only. The proceedings have not the conclusive quality which is annexed to the records or
In the second edition (1832), he inserted the passages above printed in brackets, and in a note
proceedings of our own courts, where we approve both of the rule and of the judges who
to the fourth edition (1840), after citing recent conflicting opinions in Great Britain, and referring
interpret and apply it. A foreign judgment may be impeached. Defendant may show that it is
to Mr. Justice Story's reasoning in his Commentaries on the Conflict of Laws, § 607, in favor of
unjust, or that it was irregularly or unduly obtained. Doug. 5, note."
the conclusiveness of foreign judgments, he added:
"And that is certainly the more convenient and the safest rule, and the most consistent with "The general doctrine maintained in the American courts in relation to foreign judgments
sound principle, except in cases in which the court which pronounced the judgment has not due certainly is that they are prima facie evidence, but that they are impeachable. But how far and to
jurisdiction of the case, or of the what extent this doctrine is to be carried does not seem to be definitely settled. It has been
declared that the jurisdiction of the court, and its power over the parties and the things in
controversy, may be inquired into, and that the judgment may be impeached for fraud. Beyond
Page 159 U. S. 189
this, no definite lines have as yet been drawn."

defendant, or the proceeding was in fraud, or founded in palpable mistake or irregularity, or bad
§ 608.
by the law of the rei judicatae, and in all such cases, the justice of the judgment ought to be
After stating the effect of the Constitution of the United States and referring to the opinions of
some foreign jurists, and to the law of France, which allows the merits of foreign judgments to be
2 Kent Com. (1st ed.) 102; (later Eds.) 120.
examined, Mr. Justice Story concluded his treatment of the subject as follows:

Mr. Justice Story, in his Commentaries on the Conflict of Laws, first published in 1834, after
"It is difficult to ascertain what the prevailing rule is in regard to foreign judgments in some of the
reviewing many English authorities, said: "The present inclination of the English courts seems to
other nations of continental Europe -- whether they are deemed conclusive evidence or
be to sustain the conclusiveness of foreign judgments," to which, in the second edition, in 1841,
only prima facie evidence. Holland seems at all times, upon the general principle of reciprocity,
he added: "Although certainly there yet remains no inconsiderable diversity of opinion among the
to have given great weight to foreign judgments and in many cases, if not in all cases, to have
learned judges of the different tribunals." § 606.
given to them a weight equal to that given to domestic judgments, wherever the like rule of
reciprocity with regard to Dutch
He then proceeded to state his own view of the subject on principle, saying:
Page 159 U. S. 191
"It is indeed very difficult to perceive what could be done if a different doctrine were maintainable
to the full extent of opening all the evidence and merits of the cause anew on a suit upon the
judgments has been adopted by the foreign country whose judgment is brought under review.
foreign judgment. Some of the witnesses may be since dead; some of the vouchers may be lost
This is certainly a very reasonable rule, and may perhaps hereafter work itself firmly into the
or destroyed. The merits of the cause, as formerly before the court upon the whole evidence,
structure of international jurisprudence."
may have been decidedly in favor of the judgment; upon a partial possession of the original
evidence, they may now appear otherwise. Suppose a case purely sounding in damages, such
as an action for an assault, for slander, for conversion of property, for a malicious prosecution, or § 618.
for a criminal conversation; is the defendant to be at liberty to retry the whole merits, and to
make out, if he can, a new case upon new evidence? Or is the court to review the former
In Bradstreet v. Neptune Ins. Co. (1839), in the Circuit Court of the United States for the District
decision, like a Court of Appeal, upon the old evidence? In a case of covenant, or of debt, or of a
of Massachusetts, Mr. Justice Story said:
breach of contract, are all the circumstances to be reexamined anew? If they are, by what laws
and rules of evidence and principles of justice is the validity of the original judgment to be tried?
Is the court to open the judgment, and to proceed ex aequo et bono? Or is it to administer strict "If a civilized nation seeks to have the sentences of its own courts held of any validity elsewhere,
law, and stand to the doctrines of the local administration of justice? Is it to act upon the rules of they ought to have a just regard to the rights and usages of other civilized nations and the
evidence acknowledged in its own jurisprudence, or upon those of the foreign jurisprudence? principles of public and national law in the administration of justice."
These and many more questions might be put to
3 Sumnner 600, 608-609.
Page 159 U. S. 190
In Burnham v. Webster (1845), in an action of assumpsit upon a promissory note, brought in the
show the intrinsic difficulties of the subject. Indeed, the rule that the judgment is to be prima Circuit Court of the United States for the District of Maine, the defendant pleaded a former
facie evidence for the plain tiff would be a mere delusion if the defendant might still question it by judgment in the Province of New Brunswick in his favor in an action there brought by the plaintiff.
opening all or any of the original merits on his side, for under such circumstances it would be The plaintiff replied that the note was withdrawn from that suit, by consent of parties and leave of
equivalent to granting a new trial. It is easy to understand that the defendant may be at liberty to the court, before verdict and judgment, and the defendant demurred to the replication. Judge
impeach the original justice of the judgment by showing that the court had no jurisdiction, or that Ware, in overruling the demurrer, said:
he never had any notice of the suit, or that it was procured by fraud, or that upon its face it is
founded in mistake, or that it is irregular and bad by the local law, fori rei judicatae. To such an
extent, the doctrine is intelligible and practicable. Beyond this, the right to impugn the judgment "Whatever difference of opinion there may be as to the binding force of foreign judgments, all
is in legal effect the right to retry the merits of the original cause at large, and to put the agree that they are not entitled to the same authority as the judgments of domestic courts of
general jurisdiction. They are but evidence of what they purport to decide, and liable to be
defendant upon proving those merits."
controlled by counter evidence, and do not, like domestic judgments, import absolute verity and
remain incontrovertible and conclusive until reversed."
§ 607.

He then observed:
And he added that if the question stood entirely clear from authority, he should be of opinion that recovered abroad to be put in evidence as a matter of course, but, being prima facie correct, the
the plaintiff could not be allowed to deny the validity of the proceedings of a court whose party impugning it, and desiring a hearing of its merits, must show first, specifically, some
authority he had invoked. 2 Ware, 236, 239-241. objection to the judgment's reaching the merits, and tending to prove they had not been acted
on, or [as?] by showing there was no jurisdiction in the court, or no notice, or some accident or
mistake, or fraud which prevented a full defense, and has entered into the judgment, or that the
At a subsequent trial of that case before a jury, (1846) 1 Woodb. & Min. 172, the defendant
court either did not decide at all on the merits or was a tribunal not acting in conformity to any set
proved the judgment in New Brunswick. The plaintiff then offered to prove the facts stated in his
of legal principles, and was not willingly recognized by the party as suitable for adjudicating on
replication, and that any entry on the record of the judgment in New Brunswick concerning this
the merits. After matters like these are proved, I can see no danger, but rather great safety, in
note was therefore by mistake or inadventure. This evidence was
the administration of justice in permitting to every party before us at least one fair opportunity to
have the merits of his case fully considered, and one fair adjudication upon them before he is
Page 159 U. S. 192 estopped forever."

excluded, and a verdict taken for the plaintiff, subject to the opinion of the court. Mr. Justice P. 180.
Woodbury, in granting a new trial, delivered a thoughtful and discriminating opinion upon the
effect of foreign judgments, from which the following passages are taken:
In De Brimont v. Penniman (1873), in the Circuit Court of the United States for the Southern
District of New York, Judge Woodruff said:
"They do, like domestic ones, operate conclusively, ex proprio vigore, within the governments in
which they are rendered, but not elsewhere. When offered and considered elsewhere, they
"The principle on which foreign judgments receive any recognition from our courts is one of
are, ex commitate, treated with respect, according to the nature of the judgment and the
comity. It does not require, but rather forbids, it where such a recognition works a direct violation
character of the tribunal which rendered it and the reciprocal mode, if any, in which that
of the policy of our laws, and does violence to what we deem the rights of our citizens."
government treats our judgments, and according to the party offering it, whether having sought
or assented to it voluntarily or not, so as to give it in some degree the force of a contract, and
hence to be respected elsewhere by analogy according to the lex loci contractus. With these And he declined to maintain an action against a citizen of the United States, whose daughter
views I would go to the whole extent of the cases decided by Lords Mansfield and Buller, and had been married in France to a French citizen, upon a decree of a French court requiring the
where the foreign judgment is not in rem, as it is in admiralty, having the subject matter before defendant, then resident in France and duly served with process there, to pay an annuity to his
the court, and acting on that, rather than the parties, I would consider it only prima son-in-law. 10 Blatchford 436, 441.
facie evidence as between the parties to it."
Mr. Justice Story and Chancellor Kent, as appears by the passages above quoted from their
P. 175. Commentaries, concurred in

"By returning to that rule, we are enabled to give parties at times most needed and most Page 159 U. S. 194
substantial relief, such as in judgments abroad against them without notice, or without a hearing
on the merits, or by accident or mistake of facts, as here, or on rules of evidence and rules of
the opinion that, in a suit upon a foreign judgment, the whole merits of the case could not as
law they never assented to, being foreigners and their contracts made elsewhere but happening
matter of course be reexamined anew, but that the defendant was at liberty to impeach the
to be traveling through a foreign jurisdiction and being compelled in invitum to litigate there."
judgment not only by showing that the court had no jurisdiction of the case or of the defendant,
but also by showing that it was procured by fraud, or was founded on clear mistake or
P. 177. irregularity, or was bad by the law of the place where it was rendered. Story on Conflict of Laws
§ 607; 2 Kent Com. (6th ed.) 120.
"Nor would I permit the prima facie force of the foreign judgment to go far if the court was one of
a barbarous or semi-barbarous government, and acting on no established principles of civilized The word "mistake" was evidently used by Story and Kent in this connection not in its wider
jurisprudence, and not resorted to willingly by both parties, or both not inhabitants and citizens of meaning of error in judgment, whether upon the law or upon the facts, but in the stricter sense of
the country. Nor can much comity be asked for the judgments of another nation which, like misapprehension or oversight, and as equivalent to what, in Burnham v. Webster, before cited,
France, pays no respect to those of other countries except, as before remarked, on the principle Mr. Justice Woodbury spoke of as "some objection to the judgment's reaching the merits, and
of the parties belonging there or assenting to a trial there." tending to prove that they had not been acted on," "some accident or mistake," or "that the court
did not decide at all on the merits." 1 Woodb. & Min. 180.
P. 179.
The suggestion that a foreign judgment might be impeached for error in law of the country in
which it was rendered is hardly consistent with the statement of Chief Justice Marshall, when,
Page 159 U. S. 193
speaking of the disposition of this Court to adopt the construction given to the laws of a state by
its own courts, he said:
"On the other hand, by considering a judgment abroad as only prima facie valid, I would not
allow the plaintiff abroad, who had sought it there, to avoid it, unless for accident or mistake, as
"This course is founded on the principle, supposed to be universally recognized, that the judicial
here, because, in other respects, having been sought there by him voluntarily, it does not lie in
department of every government, where such department exists, is the appropriate organ for
his mouth to complain of it. Nor would I in any case permit the whole merits of the judgment
construing the legislative acts of that government. Thus, no court in the universe which
professed to be governed by principle would, we presume, undertake to say that the courts of Like opinions were expressed by Lord Denman, speaking for the Court of Queen's Bench, and
Great Britain or of France or of any other nation had misunderstood their own statutes, and by Vice Chancellor Wigram, in cases of Irish or colonial judgments, which were subject to direct
therefore erect itself into a tribunal which should correct such misunderstanding. We receive the appellate review in England. Ferguson v. Mahon (1839), 11 Ad. & El. 179, 183, 3 Per. & Dav.
construction given by the courts of the nation as the true sense of the law, and feel ourselves no 143, 146; Henderson v. Henderson (1844), 6 Q.B. 288, 298, 299; Henderson v.
more at liberty to depart from that construction than to depart from the words of the statute." Henderson(1843), 3 Hare 100, 118.

Elmendorf v. Taylor (1825), 10 Wheat. 152, 23 U. S. 159-160. In Bank v. Nias (1851), in an action upon an Australian judgment, pleas that the original
promises were not made, and that those promises, if made, were obtained by fraud, were held
bad on demurrer. Lord Campbell, in delivering judgment, referred to Story on the Conflict of
In recent times, foreign judgments rendered within the dominions
Laws, and adopted substantially his course of reasoning in § 607, above quoted, with regard to
foreign judgments. But he distinctly put the decision upon the ground that the defendant might
Page 159 U. S. 195 have appealed to the Judicial Committee of the Privy Council, and thus have procured a review
of the colonial judgment, and he took the precaution to say:
of the English Crown and under the law of England, after a trial on the merits, and no want of
jurisdiction and no fraud or mistake being shown or offered to be shown, have been treated as "How far it would be permitted to a defendant to impeach the competency or the integrity of a
conclusive by the highest courts of New York, Maine, and Illinois. Lazier v. Westcott (1862), 26 foreign court from which there was no appeal it is unnecessary here to inquire."
N.Y. 146, 150; Dunstan v. Higgins (1893), 138 N.Y. 70, 74; Rankin v. Goddard (1866), 54 Me.
28, and (1868) 55 Me. 389; Baker v. Palmer (1876), 83 Ill. 568. In two early cases in Ohio, it was
16 Q.B. 717, 734-737.
said that foreign judgments were conclusive unless shown to have been obtained by fraud. Lake
Bank v. Harding (1832), 5 Ohio 545, 547; Anderson v. Anderson (1837), 8 Ohio 108, 110. But in
a later case in that state, it was said that they were only prima facieevidence of The English courts, however, have since treated that decision as establishing that a judgment of
indebtedness. Pelton v. Platner (1844), 13 Ohio, 209, 217. In Jones v. Jamison (1860), 15 any competent foreign court could not, in an action upon it, be questioned either because that
La.Ann. 35, the decision was only that, by virtue of the statutes of Louisiana, a foreign judgment court had mistaken its own law or because it had come to an erroneous conclusion upon the
merged the original cause of action as against the plaintiff. facts. De Cosse Brissac v. Rathbone (1861) 6 H. & N. 301; Scott v. Pilkington

The result of the modern decisions in England, after much diversity, not to say vacillation, of Page 159 U. S. 197
opinion does not greatly differ (so far as concerns the aspects in which the English courts have
been called upon to consider the subject) from the conclusions of Chancellor Kent and of
(1862) 2 B. & S. 11, 41-42; Vanquelin v. Bouard (1863), 15 C.B. (N.S.) 341, 368; Castrique v.
Justices Story and Woodbury.
Imrie (1870), L.R. 4 H.L. 414, 429-430; Godard v. Gray (1870), L.R. 6 Q.B. 139,
150; Ochsenbein v. Papelier (1873), 8 Ch.App. 695, 701. In Meyer v. Ralli (1876), a judgment in
At one time it was held that, in an action brought in England upon a judgment obtained by the rem, rendered by a French court of competent jurisdiction, was held to be reexaminable upon
plaintiff in a foreign country, the judgment must be assumed to be according to the law of that the merits solely because it was admitted by the parties, in the special case upon which the
country unless the contrary was clearly proved, manifestly implying that proof on that point was cause was submitted to the English court, to be manifestly erroneous in regard to the law of
competent. Becquet v. MacCarthy (1831), 2 B. & Ad. 951, 957; Alivon v. Furnival (1834), 1 Cr., France. 1 C.P.D. 358.
M. & R. 277, 293, 4 Tyrwh. 751, 768.
In view of the recent decisions in England, it is somewhat remarkable that, by the Indian Code of
Lord Brougham, in the House of Lords, as well as Chief Justice Tindal and Chief Justice Wilde Civil Procedure of 1877,
(afterwards Lord Chancellor Truro) and their associates, in the Common Bench, considered it to
be well settled that an Irish or colonial judgment or a foreign judgment was not, like a judgment
"no foreign judgment [which is defined as a judgment of 'a civil tribunal beyond the limits of
of a domestic court of record, conclusive evidence, but only, like a
British India, and not having authority in British India, nor established by the governor general in
council'] shall operate as a bar to a suit in British India, . . . if it appears on the face of the
Page 159 U. S. 196 proceeding to be founded on an incorrect view of international law,"

simple contract, prima facie evidence of a debt. Houlditch v. Donegal (1834), 8 Bligh N.R. 301, or "if it is, in the opinion of the court before which it is produced, contrary to natural justice."
342, 346, 2 Cl. & Fin. 470, 476-479; Don v. Lippmann (1837), 5 Cl. & Fin. 1, 20-22; Smith v. Piggott on Foreign Judgments (2d ed.) 380, 381.
Nicolls (1839), 7 Scott 147, 166-170, 5 Bing.N.C. 208, 220-224, 7 Dowl. 282; Bank of
Australasia v. Harding (1850), 9 C.B. 661, 686-687.
It was formerly understood in England that a foreign judgment was not conclusive if it appeared
upon its face to be founded on a mistake or disregard of English law. Arnott v. Redfern (1825-
On the other hand, Vice Chancellor Shadwell, upon an imperfect review of the early cases, 1826) 2 Car. & P. 88, 3 Bing. 353, and 11 J. B. Moore 209; Novelli v. Rossi (1831) 2 B. & Ad.
expressed the opinion that a foreign judgment was conclusive. Martin v. Nicolls (1830), 3 Sim. 757; 3 Burge on Colonial and Foreign Laws 1065; 2 Smith's Lead.Cas. (2d ed.) 448; Reimers v.
458. Druce (1856), 23 Beavan 145.
In Simpson v. Fogo (1860), 1 Johns. & Hem. 18, and (1862) 1 Hem. & Mil. 195, Vice Chancellor The result of the English decisions therefore would seem to be that a foreign judgment in
Wood (afterwards Lord Hatherley) refused to give effect to a judgment in personam of a court in personam may be impeached for a manifest and willful disregard of the law of England.
Louisiana, which had declined to recognize the title of a mortgagee of an English ship under the
English law. In delivering judgment upon demurrer, he said:
Lord Abinger, Baron Parke, and Baron Alderson were wont to say that the judgment of a foreign
court of competent jurisdiction for a sum certain created a duty or legal obligation to pay that
"The State of Louisiana may deal as it pleases with foreign law; but if it asks courts of this sum; or, in Baron Parke's words, that the principle on which the judgments of foreign and
country to respect its law, it must be on a footing of paying a like respect to ours. Any comity colonial courts are supported and enforced was
between the courts of two nations holding such
"that where a court of competent jurisdiction has adjudicated a certain sum to be due from one
Page 159 U. S. 198 person to another, a legal obligation arises to pay that sum, on which an action of debt to
enforce the judgment may be maintained."
opposite doctrines as to the authority of the lex loci is impossible. While the courts of Louisiana
refuse to recognize a title acquired here, which is valid according to our law, and hand over to Russell v. Smyth (1842), 9 M. & W. 810, 818-819; Williams v. Jones (1845), 13 M. & W. 628,
their own citizens property so acquired, they cannot at the same time expect us to defer to a rule 633, 634.
of their law which we are no more bound to respect than a law that any title of foreigners should
be disregarded in favor of citizens of Louisiana. The answer to such a demand must be that a
But this was said in explaining why, by the technical rules of pleading, an action of assumpsit or
country which pays so little regard to our laws as to set aside a paramount title acquired here
of debt would lie upon a foreign judgment, and had no reference to the question how far such a
must not expect at our hands any greater regard for the title so acquired by the citizens of that
judgment was conclusive of the matter adjudged. At common law, an action of debt would lie on
a debt appearing by a record or by any other specialty, such as a contract under seal, and would
also lie for a definite sum of money due by simple contract. Assumpsit would not lie upon a
1 Johns. & Hem. 28, 29. And upon motion for a decree, he elaborated the same view, beginning record or other specialty, but would lie upon any other contract, whether expressed by the party
by saying: or implied by law. In an action upon a record, or upon a contract under seal, a lawful
consideration was conclusively presumed to exist, and could not be denied,
"Whether this judgment does so err or not against the recognized principles of what has been
commonly called the comity of nations by refusing to regard the law of the country where the title Page 159 U. S. 200
to the ship was acquired is one of the points which I have to consider,"
but in an action, whether in debt or in assumpsit, upon a simple contract, express or implied, the
and concluding that it was "so contrary to law, and to what is required by the comity of nations" consideration was open to inquiry. A foreign judgment was not considered, like a judgment of a
that he must disregard it. 1 Hem. & Mil. 222-247. See also Liverpool Co. v. Hunter (1867), L.R. 4 domestic court of record, as a record or specialty. The form of action, therefore, upon a foreign
Eq. 62, 68, and (1868) L.R. 3 Ch. 479, 484. judgment was not in debt, grounded upon a record or a specialty, but was either in debt, as for a
definite sum of money due by simple contract, or in assumpsit upon such a contract. A foreign
judgment, being a security of no higher nature than the original cause of action, did not merge
In Scott v. Pilkington (1862), Chief Justice Cockburn treated it as an open question whether a
that cause of action. The plaintiff might sue either on the judgment or on the original cause of
judgment recovered in New York for a debt could be impeached on the ground that the record
action, and in either form of suit the foreign judgment was only evidence of a liability equivalent
showed that the foreign court ought to have decided the case according to English law, and had
to a simple contract, and was therefore liable to be controlled by such competent evidence as
either disregarded the comity of nations by refusing to apply the English law or erred in its view
the nature of the case admitted. See cases already cited, especially Walker v. Witter, 1 Doug.
of English law. 2 B. & S. 11, 42. In Castrique v. Imrie (1870), the French judgment which was
1; Phillips v. Hunter, 2 H.Bl. 402, 410; Bissell v. Briggs, 9 Mass. 463, 464; Mills v. Duryee, 7
adjudged not to be impeachable for error in law, French or English, was, as the House of Lords
Cranch 481, 11 U. S. 485; D'Arcy v. Ketchum, 11 How. 165, 52 U. S. 176; Hall v. Odber, 11 East
construed it, a judgment in rem, under which the ship to which the plaintiff in England claimed
118; Smith v. Nicolls, 7 Scott 147, 5 Bing. N.C. 208. See also Grant v. Easton, 13 Q.B.D. 302,
title had been sold. L.R. 4 H.L. 414. In Godard v. Gray (1870), shortly afterwards, in which the
303; Lyman v. Brown, 2 Curtis 559.
court of Queen's Bench held that a judgment in personam of a French court could not be
impeached because it had put
Mr. Justice Blackburn, indeed, in determining how far a foreign judgment could be impeached
either for error in law or for want of jurisdiction, expressed the opinion that the effect of such a
Page 159 U. S. 199
judgment did not depend upon what he termed "that which is loosely called comity,'" but upon
the saying of Baron Parke, above quoted, and consequently
a construction erroneous, according to English law, upon an English contract, the decision was
put by Justices Blackburn and Mellor upon the ground that it did not appear that the foreign court
"that anything which negatives the existence of that legal obligation or excuses the defendant
had "knowingly and perversely disregarded the rights given by the English law," and by Justice
from the performance of it must form a good defense to the action."
Hannen solely upon the ground that the defendant did not appear to have brought the English
law to the knowledge of the foreign court. L.R. 6 Q.B. 139, 149, 154. In Messina v.
Petrococchino (1872), Sir Robert Phillimore, delivering judgment in the Privy Council, said: "A Godard v. Gray (1870), L.R. 6 Q.B. 139, 148-149; Schibsby v. Westenholz, 6 Q.B. 155, 159. And
foreign judgment of a competent court may, indeed, be impeached if it carries on the face of it a his example has been followed by some other English judges: Fry, J., in Rousillon v.
manifest error." L.R. 4 P.C. 144, 157. Rousillon (1880), 14 Ch.D. 351, 370; North, J., in Nouvion v. Freeman(1887), 35 Ch.D. 704,
714-715; Cotton and Lindley, L. JJ., in Nouvion v. Freeman (1887), 37 Ch.D. 244, 250, 256.
Page 159 U. S. 201 And Lord Bramwell said:

But the theory that a foreign judgment imposes or creates a duty or obligation is a remnant of the "How can it be said that there is a legal obligation on the part of a man to pay a debt who has a
ancient fiction, assumed by Blackstone, saying that right to say, 'I owe none, and no judgment has established against me that I do?' I cannot see."

"upon showing the judgment once obtained still in full force and yet unsatisfied, the law The foreign judgment in that case was allowed no force, for want of finally establishing the
immediately implies that, by the original contract of society, the defendant hath contracted a debt existence of a debt. 15 App.Cas. 1, 9-10, 14.
and is bound to pay it."
In view of all the authorities upon the subject and of the trend of judicial opinion in this country
3 Bl.Com. 160. That fiction which embraced judgments upon default or for torts cannot convert a and in England, following the lead of Kent and Story, we are satisfied that where there has been
transaction wanting the assent of parties into one which necessarily implies it. Louisiana v. New opportunity for a full and fair trial abroad before a court of competent jurisdiction, conducting the
Orleans, 109 U. S. 285, 109 U. S. 288. While the theory in question may help to explain rules of trial upon regular proceedings, after due citation or voluntary appearance of the defendant and
pleading which originated while the fiction was believed in, it is hardly a sufficient guide at the under a system of jurisprudence likely to secure an impartial administration of justice between
present day in dealing with questions of international law, public or private, and of the comity of the citizens of its own country and those of other countries, and there is nothing to show either
our own country, and of foreign nations. It might be safer to adopt the maxim applied to foreign prejudice in the court or in the system of laws under which it was sitting, or fraud in procuring the
judgments by Chief Justice Weston, speaking for the Supreme Judicial Court of Maine, judicium judgment, or any other special reason why the comity of this nation should not allow it full effect,
redditur in invitum, or, as given by Lord Coke, in praesumptione legis judicium redditur in
invitum. Jordan v. Robinson (1838), 15 Me. 167, 168; Co.Litt. 248b.
Page 159 U. S. 203

In Russell v. Smyth, above cited, Baron Parke took the precaution of adding: "Nor need we say
the merits of the case should not, in an action brought in this country upon the judgment, be tried
how far the judgment of a court of competent jurisdiction, in the absence of fraud, is conclusive
afresh, as on a new trial or an appeal, upon the mere assertion of the party that the judgment
upon the parties." 9 M. & W. 819. He could hardly have contemplated erecting a rule of local
was erroneous in law or in fact. The defendants therefore cannot be permitted upon that general
procedure into a canon of private international law, and a substitute for "the comity of nations,"
ground to contest the validity or the effect of the judgment sued on.
on which, in an earlier case, he had himself relied as the ground for enforcing in England a right
created by a law of a foreign country. Alivon v. Furnival, 1 Cr., M. & R. 277, 296, 4 Tyrwh. 751,
771. But they have sought to impeach that judgment upon several other grounds which require
separate consideration.
In Abouloff v. Oppenheimer (1882), Lord Coleridge and Lord Justice Brett carefully avoided
adopting the theory of a legal obligation to pay a foreign judgment as the test in determining how It is objected that the appearance and litigation of the defendants in the French tribunals were
far such a judgment might be impeached. 10 Q.B.D. 295, 300, 305. In Hawksford v. not voluntary, but by legal compulsion, and therefore that the French courts never acquired such
Giffard (1886), in the Privy Council, on appeal from the Royal Court of Jersey, Lord Herschell jurisdiction over the defendants that they should be held bound by the judgment.
Upon the question what should be considered such a voluntary appearance as to amount to a
"This action is brought upon an English judgment which, until a judgment was obtained in submission to the jurisdiction of a foreign court, there has been some difference of opinion in
Jersey, was in England.

Page 159 U. S. 202 In General Steam Navigation Co. v. Guillou (1843), in an action at law to recover damages to the
plaintiffs' ship by a collision with the defendant's ship through the negligence of the master and
crew of the latter, the defendant pleaded a judgment by which a French court, in a suit brought
that country no more than evidence of a debt."
by him and after the plaintiffs had been cited, had appeared, and had asserted fault on this
defendant's part, had adjudged that it was the ship of these plaintiffs, and not that of this
12 App.Cas. 122, 126. In Nouvion v. Freeman (1889), in the House of Lords, Lord Herschell, defendant, which was in fault. It was not shown or suggested that the ship of these plaintiffs was
while he referred to the reliance placed by counsel on the saying of Baron Parke, did not treat a in the custody or possession of the French court. Yet Baron Parke, delivering a considered
foreign judgment as creating or imposing a new obligation, but only as declaring and judgment of the Court of Exchequer (Lord Abinger and Barons Alderson and Rolfe concurring),
establishing that a debt or obligation existed. His words were: expressed a decided opinion that the pleas were bad in substance, for these reasons:

"The principle upon which I think our enforcement of foreign judgments must proceed is this, that "They do not state that the plaintiffs were French subjects, or resident or even present in France,
in a court of competent jurisdiction, where according to its established procedure, the whole when the suit began, so as to be bound, by reason of allegiance or domicile or temporary
merits of the case were open at all events, to the parties, however much they may have failed to presence, by a decision of a French court, and they did not select the tribunal and sue as
take advantage of them, or may have waived any of their rights, a final adjudication has been plaintiffs, in any of which cases the determination might have possibly bound them. They were
given that a debt or obligation exists which cannot thereafter in that court be disputed, and can mere strangers, who put forward the negligence
only be questioned in an appeal to a higher tribunal. In such a case, it may well be said that,
giving credit to the courts of another country, we are prepared to take the fact that such
Page 159 U. S. 204
adjudication has been made as establishing the existence of the debt or obligation."
of the defendant as an answer, in an adverse suit in a foreign country, whose laws they were When an action is brought in a court of this country by a citizen of a foreign country against one
under no obligation to obey." of our own citizens to recover a sum of money adjudged by a court of that country to be due
from the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a
competent court, having jurisdiction of the cause and of the parties, and upon due allegations
11 M. & W. 877, 894, 13 Law Journal (N.S.) Exch. 168, 176.
and proofs and opportunity to defend against them, and its proceedings are according to the
course of a civilized jurisprudence, and are stated in a clear and formal
But it is now settled in England that while an appearance by the defendant in a court of a foreign
country, for the purpose of protecting his property already in the possession of that court, may
Page 159 U. S. 206
not be deemed a voluntary appearance, yet an appearance solely for the purpose of protecting
other property in that country from seizure is considered as a voluntary appearance. De Cosse
Brissac v. Rathbone (1861), 6 H. & N. 301, 20 Law Journal (N.S.) Exch. 238; Schibsby v. record, the judgment is prima facie evidence, at least, of the truth of the matter adjudged, and it
Westenholz(1870), L.R. 6 Q.B. 155, 162; Voinet v. Barrett (1885), Cab. & El. 554, 54 Law should be held conclusive upon the merits tried in the foreign court unless some special ground
Journal (N.S.) Q.B. 521, and 55 Law Journal (N.S.) Q.B. 39. is shown for impeaching the judgment, as by showing that it was affected by fraud or prejudice
or that, by the principles of international law and by the comity of our own country, it should not
be given full credit and effect.
The present case is not one of a person traveling through or casually found in a foreign country.
The defendants, although they were not citizens or residents of France, but were citizens and
residents of the State of New York, and their principal place of business was in the City of New There is no doubt that both in this country, as appears by the authorities already cited, and in
York, yet had a storehouse and an agent in Paris, and were accustomed to purchase large England, a foreign judgment may be impeached for fraud.
quantities of goods there, although they did not make sales in France. Under such
circumstances, evidence that their sole object in appearing and carrying on the litigation in the
Shortly before the Declaration of Independence, the House of Lords, upon the trial of the
French courts was to prevent property in their storehouse at Paris, belonging to them, and within
Duchess of Kingston for bigamy, put to the judges the question whether -- assuming a sentence
the jurisdiction, but not in the custody, of those courts from being taken in satisfaction of any
of the ecclesiastical court against a marriage, in a suit for jactitation of marriage, to be conclusive
judgment that might be recovered against them would not, according to our law, show that those
evidence so as to prevent the counsel for the crown from proving the marriage upon an
courts did not acquire jurisdiction of the persons of the defendants.
indictment for polygame -- "the counsel for the crown may be admitted to avoid the effect of such
sentence by proving the same to have been obtained by fraud or collusion." Chief Justice De
It is next objected that in those courts, one of the plaintiffs was permitted to testify not under Grey, delivering the opinion of the judges, which was adopted by the House of Lords, answering
oath, and was not subjected to cross-examination by the opposite party, and that the defendants this question in the affirmative, said:
were therefore deprived of safeguards which are by our law considered essential to secure
honesty and to detect fraud in a witness, and also that documents and papers were admitted in
"But if it was a direct and decisive sentence upon the point, and, as it stands, to be admitted as
evidence with which the defendants had no connection
conclusive evidence upon the court, and not to be impeached from within, yet, like all other acts
of the highest judicial authority, it is impeachable from without. Although it is not permitted to
Page 159 U. S. 205 show that the court was mistaken, it may be shown that they were misled. Fraud is an intrinsic
collateral act, which vitiates the most solemn proceedings of courts of justice. Lord Coke says it
avoids all judicial acts, ecclesiastical or temporal."
and which would not be admissible under our own system of jurisprudence. But it having been
shown by the plaintiffs, and hardly denied by the defendants, that the practice followed and the
method of examining witnesses were according to the laws of France, we are not prepared to 20 Howell's State Trials 537, 543, note; 2 Smith's Lead.Cas. 573.
hold that the fact that the procedure in these respects differed from that of our own courts is, of
itself, a sufficient ground for impeaching the foreign judgment.
All the subsequent English authorities concur in holding that any foreign judgment, whether in
rem or in personam, may be impeached upon the ground that it was fraudulently obtained. White
It is also contended that a part of the plaintiffs' claim is affected by one of the contracts between v. Hall (1806), 12 Ves. 321, 324; Bowles v. Orr(1835), 1 Yo. & Col.Exch. 464, 473; Price v.
the parties having been made in violation of the revenue laws of the United States, requiring Dewhurst (1837) 8 Sim. 279, 302-305; Don v. Lippmann (1837), 5 Cl &
goods to be invoiced at their actual market value. Rev.Stat. § 2854. It may be assumed that, as
the courts of a country will not enforce contracts made abroad in evasion or fraud of its own
Page 159 U. S. 207
laws, so they will not enforce a foreign judgment upon such a contract. Armstrong v. Toler, 11
Wheat. 258; De Brimont v. Penniman, 10 Blatchford 436; Lang v. Holbrook, Crabbe 179; Story
on Conflict of Laws §§ 244, 246; Wharton's Conflict of Laws, § 656. But as this point does not Fin. 1, 20; Bank of Australasia v. Nias (1851), 16 Q.B. 717, 735; Reimers v. Druce (1856), 23
affect the whole claim in this case, it is sufficient for present purposes to say that there does not Beav. 145, 150; Castrique v. Imrie(1870), L.R. 4 H.L. 414, 445-446; Godard v. Gray (1870), L.R.
appear to have been any distinct offer to prove that the invoice value of any of the goods sold by 6 Q.B. 139, 149; Messina v. Petrococchino (1872), L.R. 4 P.C. 144, 157; Ochsenbein v.
the plaintiffs to the defendants was agreed between them to be or was in fact lower than the Papelier (1873), 8 Ch. 695.
actual market value of the goods.
Under what circumstances this may be done does not appear to have ever been the subject of
It must however always be kept in mind that it is the paramount duty of the court before which judicial investigation in this country.
any suit is brought to see to it that the parties have had a fair and impartial trial before a final
decision is rendered against either party.
It has often, indeed, been declared by this Court that the fraud which entitles a party to impeach that the fraud was committed, the defendants will be entitled to succeed in the present action. It
the judgment of one of our own tribunals must be fraud extrinsic to the matter tried in the cause, has been contended that the same issue ought not to be tried in an English court which was
and not merely consist in false and fraudulent documents or testimony submitted to that tribunal, tried in the Russian courts, but I agree that the question whether the Russian courts were
and the truth of which was contested before it and passed upon by it.United States v. deceived never could be an issue in the action tried before them. . . . In the present case, we
Throckmorton, 98 U. S. 61, 98 U. S. 65-66; Vance v. Burbank, 101 U. S. 514, 101 U. S. have had to consider the question fully, and according to the best opinion which I can form, fraud
519; Steel v. Smelting Co.,106 U. S. 447, 106 U. S. 453; Moffat v. United States, 115 U. S. committed by a party to a suit for the purpose of deceiving a foreign court is a defense to an
24, 115 U. S. 32; United States v. Minor, 114 U. S. 233, 114 U. S. 242. And in one English case, action in this country founded upon the judgment of that foreign court. It seems to me that if we
where a ship had been sold under a foreign judgment, the like restriction upon impeaching that were to accede to the argument for the plaintiff, the result would be that a plausible deceiver
judgment for fraud was suggested, but the decision was finally put upon the ground that the would succeed, whereas a deceiver who is not plausible would fail. I cannot think that plausible
judicial sale passed the title to the ship. Cammell v. Sewell (1858-60), 3 H. & N. 617, 646, 5 H. & fraud ought to be upheld in any court of justice in England. I accept the whole doctrine, without
N. 728, 729, 742. any limitation, that whenever a foreign judgment has been obtained by the fraud of the party
relying upon it, it cannot be maintained in the courts of this country, and further that nothing
ought to persuade an English court to enforce a judgment against one party which has been
But it is now established in England by well considered and strongly reasoned decisions of the
obtained by the fraud of the other party to the suit in the foreign court."
Court of Appeal that foreign judgments may be impeached if procured by false and fraudulent
representations and testimony of the plaintiff, even if the same question of fraud was presented
to and decided by the foreign court. 10 Q.B.D. 295, 305-308.

In Abouloff v. Oppenheimer (1882), the plaintiff had recovered a judgment at Tiflis, in Russia, The same view was affirmed and acted on in the same court by Lords Justices Lindley and
ordering the defendants to return certain goods, or to pay their value. The defendants appealed Bowen in Vadala v. Lawes (1890), 25 Q.B.D. 310, 317-320, and by Lord Esher and Lord Justice
to a higher Russian court, which confirmed the judgment and ordered the defendants to pay, Lopes in Crozat v. Brogden [1894] 2 Q.B. 30, 34-35.
besides the sum awarded below, an additional sum for costs and expenses. In an action in the
English High Court of
In the case at bar, the defendants offered to prove in much detail that the plaintiffs presented to
the French court of first instance and to the arbitrator appointed by that court, and upon whose
Page 159 U. S. 208 report its judgment was largely based, false and fraudulent statements and accounts against the
defendants by which the arbitrator and the French courts were deceived and misled, and their
judgments were based upon such false and fraudulent statements and accounts. This offer, if
Justice upon those judgments, the defendants pleaded that they were obtained by the gross
satisfactorily proved, would, according to the decisions of the English Court of Appeal in Abouloff
fraud of the plaintiff in fraudulently representing to the Russian courts that the goods in question
v. Oppenheimer, Vadala v. Lawes, and Crozat v. Brogden, above cited,
were not in her possession when the suit was commenced, and when the judgment was given,
and during the whole time the suit was pending, and by fraudulently concealing from those
courts the fact that those goods, as the fact was and as she well knew, were in her actual Page 159 U. S. 210
possession. A demurrer to this plea was overruled and judgment entered for the defendants.
And that judgment was affirmed in the Court of Appeal by Lord Chief Justice Coleridge, Lord
be a sufficient ground for impeaching the foreign judgment and examining into the merits of the
Justice Baggallay, and Lord Justice Brett, all of whom delivered concurring opinions, the
original claim.
grounds of which sufficiently appear in the opinion delivered by Lord Justice Brett (since Lord
Esher, M.R.), who said:
But whether those decisions can be followed in regard to foreign judgments, consistently with
our own decisions as to impeaching domestic judgments for fraud, it is unnecessary in this case
"With regard to an action brought upon a foreign judgment, the whole doctrine as to fraud is
to determine, because there is a distinct and independent ground upon which we are satisfied
English, and is to be applied in an action purely English. I am prepared to hold, according to the
that the comity of our nation does not require us to give conclusive effect to the judgments of the
judgment of the House of Lords adopting the proposition laid down by De Grey, C.J., that if the
courts of France, and that ground is the want of reciprocity on the part of France as to the effect
judgment upon which the action is brought was procured from the foreign court by the successful
to be given to the judgments of this and other foreign countries.
fraud of the party who is seeking to enforce it, the action in the English court will not lie. This
proposition is absolute and without any limitation, and as the Lord Chief Justice has pointed out,
is founded on the doctrine that no party in an English court shall be able to take advantage of his In France, the royal ordinance of June 15, 1629, art. 121, provided as follows:
own wrongful act or, as it may be stated in other language, that no obligation can be enforced in
an English court of justice which has been procured by the fraud of the person relying upon it as
"Judgments rendered, contracts or obligations recognized, in foreign kingdoms and
an obligation. . . . I will assume that in the suit in the Russian courts, the plaintiff's fraud was
alleged by the defendants, and that they gave evidence in support of the charge. I will assume sovereignties for any cause whatever shall have no lien or execution in our kingdom. Thus, the
even that the defendants gave the very same evidence which they propose to adduce in this contracts shall stand for simple promises, and, notwithstanding the judgments, our subjects
against whom they have been rendered may contest their rights anew before our judges."
action. Nevertheless the defendants will not be debarred at the trial of this action from making
the same charge of fraud and from adducing the same evidence in support of it, and if the High
Court of Justice is satisfied that the allegations of the defendants are true and Touillier, Droit Civil, lib. 3, tit. 3, c. 6, sect. 3, No. 77.

Page 159 U. S. 209 By the French Code of Civil Procedure, art. 546,
"Judgments rendered by foreign tribunals, and acts acknowledged before foreign officers, shall President Henry, at page 76 of his Treatise on Foreign Law, published as a preface to his report
not be capable of execution in France except in the manner and in the cases provided by articles of that case, said:
2123 and 2128 of the Civil Code,"
"This comity in giving effect to the judgments of other tribunals is generally exercised by states
which are as follows: by article 2123, under the same sovereign, on the ground that he is the fountain of justice in each, though of
independent jurisdiction, and it has also been exercised in different states of Europe with respect
to foreign judgments, particularly in the Dutch states, who are accustomed by the principle of
"A lien cannot arise from judgments rendered in a foreign country except so far as they have
reciprocity to give effect in their territories to the judgments of foreign states which show the
been declared executory by a French tribunal, without prejudice to provisions to the contrary
same comity to theirs; but the tribunals of France and England have never exercised this comity
which may exist in public laws and treaties."
to the degree that those of Holland have, but always required a fresh action to be brought, in
which the foreign judgment may be given in evidence. As this is a matter of positive law and
By article 2128, internal policy in each state, no opinion need be given. Besides, it is a mere question of comity,
and perhaps it might be neither politic nor prudent, in two such great states, to give
indiscriminate effect to the judgment of each other's tribunals, however the practice might be
"Contracts entered into in a foreign country cannot give a lien upon property in France if there proper or convenient in federal states or those under the same sovereign."
are no provisions contrary to this principle in public laws or in treaties."

It was that statement which appears to have called forth the observations of Mr. Justice Story,
Touillier, ubi sup., No. 84. already cited:

The defendants in their answer cited the above provisions of the statutes of France, and alleged,
"Holland seems at all times, upon the general principle of reciprocity, to have given great weight
and at the trial offered to prove, that by the construction given to to foreign judgments, and in many cases, if not in all cases, to have given to them a weight equal
to that given to domestic judgments wherever the like rule of reciprocity with regard to Dutch
Page 159 U. S. 211 judgments has been adopted by the foreign country whose judgment is brought under review.
This is certainly a very reasonable rule, and may perhaps hereafter work itself firmly into the
structure of international jurisprudence."
these statutes by the judicial tribunals of France, when the judgments of tribunals of foreign
countries against the citizens of France are sued upon in the courts of France, the merits of the
controversies upon which those judgments are based are examined anew, unless a treaty to the Story on Conflict of Laws § 618.
contrary effect exists between the Republic of France and the country in which such judgment is
obtained (which is not the case between the Republic of France and the United States), and that
This rule, though never either affirmed or denied by express adjudication in England or America,
the tribunals of the Republic of France give no force and effect, within the jurisdiction of that has been indicated, more or less distinctly, in several of the authorities already cited.
country, to the judgments duly rendered by courts of competent jurisdiction of the United States
against citizens of France after proper personal service of the process of those courts has been
made thereon in this country. We are of opinion that this evidence should have been admitted. Lord Hardwicke threw out a suggestion that the credit to be given by one court to the judgment
of a foreign court
In Odwin v. Forbes (1817), President Henry, in the Court of Demerara, which was governed by
the Dutch law and was, as he remarked, "a tribunal foreign to and independent of that of Page 159 U. S. 213
England," sustained a plea of an English certificate in bankruptcy, upon these grounds:
might well be affected by "their proceeding both by the same rules of law." Otway v. Ramsay, 4
"It is a principle of their law, and laid down particularly in the ordinances of Amsterdam, . . . that B. & C. 414-416, note.
the same law shall be exercised towards foreigners in Amsterdam as is exercised with respect to
citizens of that state in other countries, and upon this principle of reciprocity, which is not
Lord Eldon, after saying that "natural law" (evidently intending the law of nations) "requires the
confined to the City of Amsterdam, but pervades the Dutch laws, they have always given effect
courts of this country to give credit to those of another for the inclination and power to do
to the laws of that country which has exercised the same comity and indulgence in admitting
justice," added that
theirs; . . . that the Dutch bankrupt laws proceed on the same principles as those of the English;
that the English tribunals give effect to the Dutch bankrupt laws, and that, on the principle of
reciprocity and mutual comity, the Dutch tribunals, according to their own ordinances, are bound "if it appears in evidence that persons suing under similar circumstances neither had met nor
to give effect to the English bankrupt laws when duly proved, unless there is any express law or could meet with justice, that fact cannot be immaterial as an answer to the presumption."
ordinance prohibiting their admission."
Wright v. Simpson, 6 Ves. 714, 730.
And his judgment was affirmed in the Privy Council on appeal. Case of Odwin v. Forbes, pp. 89,
159-161, 173-176; (1817) Buck Bankr.Cas. 57, 64.
Lord Brougham, presiding as lord Chancellor in the House of Lords, said:

Page 159 U. S. 212

"The law, in the course of procedure abroad, sometimes differs so mainly from ours in the "The general comity, utility, and convenience of nations have, however, established a usage
principles upon which it is bottomed that it would seem a strong thing to hold that our courts among most civilized states by which the final judgments of foreign courts of competent
were bound conclusively to give execution to the sentence of foreign courts when, for aught we jurisdiction are reciprocally carried into execution."
know, there is not anyone of those things which are reckoned the elements or the corner stones
of the due administration of justice present to the procedure in these foreign courts."
Wheaton's International Law (8th ed.) §§ 79, 147.

Houlditch v. Donegal, 8 Bligh, N.R. 301, 338.

Since Story, Kent, and Wheaton wrote their commentaries, many books and essays have been
published upon the subject of the effect to be allowed by the courts of one country to the
Chief Justice Smith, of New Hampshire, in giving reasons why foreign judgments or decrees, judgments of another, with references to the statutes and decisions in various countries. Among
founded on the municipal laws of the state in which they are pronounced, are not conclusive the principal ones are Foelix, Droit International Prive (4th ed., by Demangeat, 1866) lib. 2, tits.
evidence of debt, but prima facie evidence only, said: 7, 8; Moreau, Effets Internationaux des Jugements (1884); Piggott, on Foreign Judgments (2d
ed., 1884); Constant, De l'Execution des Jugements Etrangers (2d ed., 1890), giving the text of
the articles of most of the modern codes upon the subject, and of French treaties with Italian,
"These laws and regulations may be unjust, partial to citizens, and against foreigners; they may
German, and Swiss states, and numerous papers in Clunet's Journal de Droit International
operate injustice to our citizens, whom we are bound to protect; they may be, and the decisions
Prive, established in 1874 and continued to the present time. For the reasons stated at the
of courts founded on them, just cause of complaint against the supreme power of the state
outset of this opinion, we have not thought it important to state the conflicting theories of
where rendered. To adopt them is not merely saying that the courts have decided correctly on
continental commentators
the law, but it is approbating the law itself."

Page 159 U. S. 215

Bryant v. Ela, Smith (N.H.) 396, 404.

and essayists as to what each may think the law ought to be, but have referred to their works
Mr. Justice Story said:
only for evidence of authoritative declarations, legislative or judicial, of what the law is.

"If a civilized nation seeks to have the sentences of its own courts of any validity elsewhere, they
By the law of France, settled by a series of uniform decisions of the Court of Cassation, the
ought to have a just regard to the rights and usages of other civilized nations, and the principles
highest judicial tribunal, for more than half a century, no foreign judgment can be rendered
of public and national law in the administration of justice."
executory in France without a review of the judgment au fond (to the bottom), including the
whole merits of the cause of action on which the judgment rests. Pardessus, Droit Commercial §
Bradstreet v. Neptune Ins. Co., 3 Sumner 600, 608. 1488; Bard, Precis de Droit International (1883) nos. 234-239; Story on Conflict of Laws §§ 615-
617; Pigggott 452; Westllake on Private International Law (3d ed., 1890) 350.
Page 159 U. S. 214
A leading case was decided by the Court of Cassation on April 19, 1819, and was as follows: a
contract of partnership was made between Holker, a French merchant, and Parker, a citizen of
Mr. Justice Woodbury said that judgments in personam, rendered under a foreign government, the United States. Afterwards, and before the partnership accounts were settled, Parker came to
France, and Holker sued him in the Tribunal of Commerce of Paris. Parker excepted on the
"are, ex commitate, treated with respect according to the nature of the judgment and the ground that he was a foreigner, not domiciled in France, and obtained a judgment, affirmed on
character of the tribunal which rendered it and the reciprocal mode, if any, in which that appeal, remitting the matter to the American courts -- obtint son renvoi devant les tribunaux
government treats our judgments," Americains. Holker then sued Parker in the Circuit Court of the United States for the District of
Massachusetts, and in 1814 obtained a judgment there ordering Parker to pay him $529,949.
One branch of the controversy had been brought before this Court in 1813. Holker v. Parker, 7
and added "nor can much comity be asked for the judgments of another nation which, like Cranch 436. Holker, not being able to obtain execution of that judgment in America because
France, pays no respect to those of other countries." Burnham v. Webster, 1 Woodb. & Min. Parker had no property there and continued to reside in Paris, obtained from a French judge an
172, 175, 179. order declaring the judgment executory. Upon Parker's application to nullify the proceeding, the
Royal Court of Paris, reversing the judgment of a lower court, set aside that order, assigning
Mr. Justice Cooley said: "True comity is equality. We should demand nothing more and concede these reasons:
nothing less." McEwan v. Zimmer, 38 Mich. 765, 769.
"Considering that judgments rendered by foreign courts have neither effect nor authority in
Mr. Wheaton said: France; that this rule is doubtless more particularly applicable

"There is no obligation recognized by legislators, public authorities, and publicists to regard Page 159 U. S. 216
foreign laws, but their application is admitted only from considerations of utility and the mutual
convenience of states -- ex commitate, ob reciprocam utilitatem." in favor of Frenchmen, to whom the King and his officers owe a special protection, but that the
principle is absolute, and may be invoked by all persons, without distinction, being founded on
the independence of states; that the ordinance of 1629, in the beginning of its article 121, lays
down the principle in its generality when it says that judgments rendered in foreign kingdoms
and sovereignties for any cause whatever shall have no execution in the Kingdom of France, public order;" whether, by the law of the country in which it was rendered, it has the force of res
and that the Civil Code, art. 2123, gives to this principle the same latitude when it declares that a judicata; whether the copy is duly authenticated; whether the
lien cannot result from judgments rendered in a foreign country, except so far as they have been
declared executory by a French tribunal -- which is not a matter of mere form, like the granting in
Page 159 U. S. 218
past times of a pareatis from one department to another for judgments rendered within the
Kingdom, but which assumes, on the part of the French tribunals, a cognizance of the cause,
and a full examination of the justice of the judgment presented for execution, as reason defendant's rights have been duly respected, and whether the foreign court is not the only
demands, and that this has always been practiced in France, according to the testimony of our competent court, by reason of the nationality of the plaintiff. Where, as is the case between
ancient authorities; that there may result from this an inconvenience where the debtor, as is Belgium and France, there is no such treaty, the Belgian Court of Cassation holds that the
asserted to have happened in the present case, removes his property and his person to France, foreign judgment may be reexamined upon the merits. Constant, 111, 116; Moreau, No. 189;
while keeping his domicile in his native country; that it is for the creditor to be watchful, but that Clunet, 1887, p. 217; 1888, p. 837; Piggott 439. And in a very recent case, the Civil Tribunal of
no consideration can impair a principle on which rests the sovereignty of governments, and Brussels held that,
which, whatever be the case, must preserve its whole force."
"considering that the right of revision is an emanation of the right of sovereignty; that it proceeds
The court therefore adjudged that, before the tribunal of first instance, Holker should state the from the emporium, and that as such it is within the domain of public law; that from that principle
grounds of his action, to be contested by Parker, and to be determined by the court upon it manifestly follows that, if the legislature does not recognize executory force in foreign
cognizance of the whole cause. That judgment was confirmed, upon deliberate consideration, by judgments where there exists no treaty upon the basis of reciprocity, it cannot belong to the
the Court of Cassation, for the reasons that the ordinance of 1629 enacted, in absolute terms parties to substitute their will for that of the legislature by arrogating to themselves the power of
and without exception, that foreign judgments should not have execution in France; that it was delegating to the foreign judge a portion of sovereignty."
only by the Civil Code and the Code of Civil Procedure that the French tribunals had been
authorized to declare them executory; that therefore the ordinance of 1629 had no application;
that the articles of the Codes Clunet, 1894, pp. 164, 165.

Page 159 U. S. 217 In Holland, the effect given to foreign judgments has always depended upon reciprocity, but
whether by reason of Dutch ordinances only or of general principles of jurisprudence does not
clearly appear. Odwin v. Forbes, and Henry on Foreign Law, above cited; Story on Conflict of
referred to did not authorize the courts to declare judgments rendered in a foreign country Laws § 618; Foelix, No. 397, note; Clunet, 1879, p. 369; 1 Ferguson's International Law, 85;
executory in France without examination; that such an authorization would be as contrary to the Constant, 171; Moreau, No. 213.
institution of the courts as would be the award or the refusal of execution arbitrarily and at will,
would impeach the right of sovereignty of the French government, and was not in the intention of
the legislature, and that the Codes made no distinction between different judgments rendered in In Denmark, the courts appear to require reciprocity to be shown before they will execute a
a foreign country, and permitted the judges to declare them all executory, and therefore those foreign judgment. Foelix, Nos. 328, 345; Clunet, 1891, p. 987; Westlale, ubi sup. In Norway, the
judgments, whether against a Frenchman or against a foreigner, were subject to examination on courts reexamine the merits of all foreign judgments, even of those of Sweden. Foelix, No. 401;
the merits. Holker v. Parker, Merlin, Questions do Droit, Jugement, § 14, No. 2. Piggott, 504, 505; Clunet, 1892, p. 296. In Sweden, the principle of reciprocity has prevailed
from very ancient times. The courts give no effect to foreign judgments unless upon that
principle, and it is doubtful whether they will even then unless reciprocity is secured by treaty
The Court of Cassation has ever since constantly affirmed the same view. Moreau, No. 106, with the country in which the judgment was rendered. Foelix, No. 400; Olivecrona, in Clunet,
note, citing many decisions; Clunet, 1882, p. 166. In Clunet, 1894, p. 913, note, it is said to be 1880, p. 83; Constant, 191; Moreau, No. 222; Piggott, 503; Westlake, ubi sup.

"settled by judicial decisions -- il est de jurisprudence -- that the French courts are bound, in the Page 159 U. S. 219
absence of special diplomatic treaties, to proceed to the revision on the whole merits -- au fond -
- of foreign judgments, execution of which is demanded of them,"
In the empire of Germany, as formerly in the states which now form part of that empire, the
judgments of those states are mutually executed, and the principle of reciprocity prevails as to
citing, among other cases, a decision of the Court of Cassation on February 2, 1892, by which it the judgments of other countries. Foelix, Nos. 328, 331, 333-341; Moreau, Nos. 178, 179;
was expressly held to result from the articles of the Codes above cited Vierhaus, in Piggott, 460-474; Westlake, ubi sup. By the German Code of 1877,

"that judgments rendered in favor of a foreigner against a Frenchman, by a foreign court, are "compulsory execution of the judgment of a foreign court cannot take place unless its
subject, when execution of them is demanded in France, to the revision of the French tribunals admissibility has been declared by a judgment of exequatur; . . . the judgment of exequatur is to
which have the right and the duty to examine them, both as to the form and as to the merits." be rendered without examining whether the decision is conformable to law;"

Sirey, 1892, 1, 201. but it is not to be granted "if reciprocity is not guaranteed." Constant, 79-81; Piggott, 466. The
Reichsgericht, or imperial court, in a case reported in full in Piggott, has held that an English
judgment cannot be executed in Germany, because, the court said, the German courts, by the
In Belgium the Code of Civil Procedure of 1876 provides that if a treaty on the basis of
Code, when they execute foreign judgments at all, are "bound to the unqualified recognition of
reciprocity be in existence between Belgium and the country in which the foreign judgment has
the legal validity of the judgments of foreign courts," and
been given, the examination of the judgment in the Belgian courts shall bear only upon the
questions whether it "contains nothing contrary to public order, to the principles of the Belgian
"it is therefore an essential requirement of reciprocity that the law of the foreign state should not undertaken, moreover, except upon certain conditions, and by means of a system of
recognize in an equal degree the legal validity of the judgments of German courts, which are to regulations intended to prevent or to lessen the dangers which might result from them."
be enforced by its courts, and that an examination of their legality, both as regards the material
justice of the decision as to matters of fact or law, and with respect to matters of procedure,
3 Cours de Droit International Prive (1885) 126, 127.
should neither be required as a condition of their execution, by the court ex officio, nor be
allowed by the admission of pleas which might lead to it."
In Russia, by the Code of 1864, "the judgments of foreign tribunals shall be rendered executory
according to the rules established by reciprocal treaties and conventions," and where no rules
Piggott, 470-471. See also Clunet, 1882, p. 35; 1883, p. 246; 1884, p. 600.
have been established by such treaties, are to be "put in execution in the empire only after
authorization granted by the courts of the empire," and
In Switzerland, by the federal Constitution, civil judgments in one canton are executory
throughout the republic. As to foreign judgments, there is no federal law, each canton having its
"in deciding upon demands of this kind the courts do not examine into the foundation of the
own law upon the subject. But civil judgments in one canton are executory other cantons, foreign
dispute adjudged by the foreign tribunals, but decide only whether the judgment does not
judgments are executed according to the rule of reciprocity only. Constant, 193-204; Piggott,
contain dispositions which are contrary to the public order, or which are not permitted by the
505-516; Clunet, 1887, p. 762; Westlake, ubi sup. The law upon this subject has been clearly
laws of the empire."
stated by Brocher, President of the Court of Cassation of Geneva and professor of law in the
university there. In his Nouveau
Constant, 183-185. Yet a chamber of the Senate of St. Petersburg, sitting as a Court of
Cassation, and the highest judicial tribunal of the empire in civil matters, has declined to execute
Page 159 U. S. 220
a French judgment upon the grounds that, by the settled law of Russia,

Traite de Droit International Prive (1876) § 174, treating of the question whether "it might not be
"it is a principle in the Russian empire that only the decisions of the authorities to whom
convenient that states should execute, without reviewing their merits, judgments rendered on the
jurisdiction has been delegated by the sovereign power have legal value by themselves and of
territory of each of them respectively," he says:
full right,"

"It would certainly be advantageous for the parties interested to avoid the delays, the conflicts,
and that, "in all questions of international law, reciprocity must be observed and maintained as a
the differences of opinion, and the expenses resulting from the necessity of obtaining a new
fundamental principle."Adam v. Schipoff, Clunet, 1884, pp. 45, 46, 134. And Professor
judgment in each locality where they should seek execution. There might thence arise for each
Englemann, of the Russian University of Dorpat, in an able essay, explaining that and other
sovereignty a juridical or moral obligation to lend a strong hand to foreign judgments. But would
Russian decisions, takes the following view of them:
not such an advantage be counterbalanced, and often surpassed, by the dangers that might
arise from that mode of proceeding? There is here, we believe, a question of reciprocal
appreciation and confidence. One must at the outset inquire whether the administration of the "The execution of a treaty is not the only proof of reciprocity. . . . It is necessary to commit the
foreign judiciary, whose judgments it is sought to execute without verifying their merits, presents ascertainment of the existence of reciprocity to the judicial tribunals, for the same reasons for
sufficient guaranties. If the propriety of such an execution be admitted, there is ground for which there is conferred upon them the right to settle all questions incident to the cause to be
making it the object of diplomatic treaties. That form alone can guaranty the realization of a adjudged. The existence of reciprocity between
proper reciprocity. It furnishes, moreover, to each state the means of acting upon the judicial
organization and procedure of other states."
Page 159 U. S. 222

In an article in the Journal, after a review of the Swiss decisions, he recognizes and asserts that
"it comes within the competency of each canton to do what seems to it proper in such matters." two states ought to be proved in the same manner as all the positive facts of the case. . . . It is
Clunet, 1879, pp. 88, 94. And in a later treatise he says: true that the principle of reciprocity is a principle not of right, but of policy, yet the basis of the
principle of all regular and real policy is also the fundamental principle of right, and the point of
departure of all legal order -- the suum cuique. This last principle comprehends right, reciprocity,
"We cannot admit that the recognition of a state as sovereign ought necessarily to have as a utility, and reciprocity is the application of right to policy. . . . Let this principle be applied
consequence the obligation of respecting and executing the judicial decisions rendered by its wherever there is the least guaranty or even a probability of reciprocity, and the cognizance of
tribunals. In strict right, the authority of such acts does not extend beyond the frontier. Each this question be committed to the judicial tribunals, and one will arrive at important results,
sovereignty possesses in particular, and more or less in private, the territory subject to its power. which, on their side, will touch the desired end -- international accord. But for this it is
No other can exercise there an act of its authority. This territorial independence finds itself, in indispensable that the application of this principle should be entrusted to judicial tribunals,
principle, directly included in the very act by which one nation recognizes a foreign state as a accustomed to decide affairs according to right, and not to administrative authorities, which look
sovereign; but there cannot result therefrom a promise to adopt, and to cause to be executed above all to utility, and are accustomed to be moved by political reasons, intentions, and even
upon the national territory, judgments rendered by passions."

Page 159 U. S. 221 Clunet, 1884, pp. 120-122. But it would seem that no foreign judgment will be executed in
Russia unless reciprocity is secured by treaty. Clunet, 1884, pp. 46, 113, 139, 140, 602.
the officials of the foreign state, whoever they may be. That would be an abdication of its own
sovereignty, and would bind it in such sort as to make it an accomplice in acts often injurious,
and in some cases even criminal. Such obligations suppose a reciprocal confidence. They are
In Poland, the provisions of the Russian Code are in force, and the Court of Appeal of Warsaw "the exequatur shall not be granted, except so far as the judgments rendered in the states of his
has decided that where there is no treaty, the judgments of a foreign country cannot be Holiness shall enjoy the same favor in the foreign countries; this reciprocity is presumed if there
executed, because is no particular reason to doubt it."

"in admitting a contrary conclusion, there would be impugned one of the cardinal principles of Toullier, Droit Civil, lib. 3, tit. 3, c. 6, § 3, No. 93. And see Foelix, No. 343; Westlake, ubi sup. In
international relations, namely the principle of reciprocity, according to which each state the Kingdom of Italy,
recognizes juridical rights and relations, originating or established in another country, only in the
measure in which the latter, in its turn, does not disregard the rights and relations existing in the
Page 159 U. S. 224

by the Code of Procedure of 1865,

Clunet, 1884, pp. 494-495.

"executory force is given to the judgments of foreign judicial authorities by the Court of Appeal in
In Roumania, it is provided by Code that
whose jurisdiction they are to be executed, by obtaining a judgment on an exequatur in which
the court examines (a) if the judgment has been pronounced by a competent judicial authority;
"judicial decisions rendered in foreign countries cannot be executed in Roumania except in the (b) if it has been pronounced, the parties being regularly cited; (c) if the parties have been legally
same manner in which Roumanian judgments are executed in the country in question, and represented or legally defaulted; (d) if the judgment contains dispositions contrary to public order
provided they are declared executory by competent Roumanian judges," or to the internal public law of the realm."

and this article seems to be held to require legislative reciprocity. Constant, 157. In 1874, the Court of Cassation of Turin,

Page 159 U. S. 223 "considering that in international relations is admitted the principle of reciprocity, as that which
has its foundation in the natural reason of equality of treatment, and in default thereof opens the
way to the exercise of the right of retaliation,"
Moreau, No. 219; Clunet, 1879, p. 351; 1885, p. 537; 1891, p. 452; Piggott, 495.

and that the French courts examine the merits of Italian judgments before allowing their
In Bulgaria, by a resolution of the supreme court in 1881,
execution in France, decided that the Italian courts of appeal, when asked to execute a French
judgment, ought not only to inquire into the competency of the foreign court, but also to review
"the Bulgarian judges should, as a general rule, abstain from entering upon the merits of the the merits and the justice of the controversy. Levi v. Pitre, in Rossi, Execuzione delle Sentenze
foreign judgment. They ought only to inquire whether the judgment submitted to then does not Straniere (1st ed. 1875) 70, 284, and in Clunet, 1879, p. 295. Some commentators, however,
contain dispositions contrary to the public order and to the Bulgarian laws." while admitting that decision to be most authoritative, have insisted that it is unsound, and
opposed to other Italian decisions, to which we have not access. Rossi, ubi sup. (2d ed. 1890)
92; Fiore, 142-143; Clunet, 1878, p. 237; Clunet, 1879, pp. 296, 305; Piggott, 483; Constant,
Constant, 129, 130; Clunet, 1886, p. 570. This resolution closely follows the terms of the 161.
Russian Code, which, as has been seen, has not precluded applying the principle of reciprocity.

In the principality of Monaco, foreign judgments are not executory, except by virtue of a special
In Austria, the rule of reciprocity does not rest upon any treaty or legislative enactment, but has ordinance of the prince, upon a report of the Advocate General. Constant, 169; Piggott, 488.
been long established, by imperial decrees and judicial decisions, upon general principles of
jurisprudence. Foelix, No. 331; Constant, 100-108; Moreau, No. 185; Weiss, Traite de Droit
International (1886) 950; Clunet, 1891, p. 1003; 1894, p. (1886) 980; Clunet, 1891, p. 1003; In Spain, formerly, foreign judgments do not appear to have been executed at all. Foelix, No.
1894, p. 908; Piggott, 434. In Hungary, the same principles were always followed as in Austria, 398; Moreau, No. 197; Silvela, in Clunet, 1881, p. 20. But by the Code of 1855, revised in 1881
and reciprocity has been made a condition by a law of 1880. Constant, 109; Moreau, No. 186, without change in this respect,
and note; Piggott, 436; Weiss, ubi sup.
"judgments pronounced in foreign countries shall have in Spain the force that the respective
In Italy, before it was united into one kingdom, each state had its own rules. In Tuscany and in treaties given them; if there are no special treaties with the nation in which they have been
Modena, in the absence of treaty, the whole merits were reviewed. In Parma, as by the French rendered, they shall
ordinance of 1629, the foreign judgment was subject to fundamental revision if against a subject
of Parma. In Naples, the Code and the decisions followed those of France. In Sardinia, the
Page 159 U. S. 225
written laws required above all the condition of reciprocity, and if that condition was not fulfilled,
the foreign judgment was reexaminable in all respects. Fiore, Effetti Internazionali delle
Sentenze (1875) 40-44; Moreau, No. 204. In the papal states, by a decree of the Pope in 1820, have the same force that is given by the laws of that nation to Spanish executory judgments; if
the judgment to be executed proceeds from a nation by whose jurisprudence effect is not given
to the judgments pronounced by Spanish tribunals, it shall have no force in Spain,"
and In Mexico, the system of reciprocity has been adopted by the Code of 1884 as the governing
principle. Constant, 168; Clunet, 1891, p. 290.
"application for the execution of judgments pronounced in foreign countries shall be made to the
Supreme Tribunal of Justice, which, after examining an authorized translation of the foreign The rule of reciprocity likewise appears to have generally prevailed in South America. In Peru,
judgment, and after hearing the party against whom it is directed and the public minister, shall foreign judgments do not appear to be executed without examining the merits unless when
decide whether it ought or ought not to be executed." reciprocity is secured by treaty. Clunet, 1879, pp. 266, 267; Piggott, 548. In Chili, there appears
to have been no legislation upon the subject, but, according to a decision of the Supreme Court
of Santiago in 1886, "the Chilian tribunals should not award an exequatur, except upon
Constant, 141-142; Piggott, 499-500. A case in which the Supreme Court of Spain in 1880
decisions in correct form, and also reserving the general principle of reciprocity." Clunet, 1889,
ordered execution of a French judgment after reviewing its merits is reported in Clunet, 1881, p.
p. 135; Constant, 131-132.
365. In another case, in 1888, the same court, after hearing the parties and the public minister,
ordered execution of a Mexican judgment. The public minister, in his demand for its execution,
said: Page 159 U. S. 227

"Our law of civil procedure, inspired, to a certain point, by the modern theories of international In Brazil, foreign judgments are not executed unless because of the country in which they were
law which, recognizing among civilized nations a true community of right, and considering rendered admitting the principle of reciprocity or because of a placet of the government of Brazil,
mankind as a whole, in which nations occupy a position identical with that of individuals towards which may be awarded according to the circumstances of the case. Constant, 124, and note;
society, gives authority in Spain to executory judgments rendered by foreign tribunals, even in Moreau, No. 192; Piggott, 543-546; Westlake, ubi sup. In the Argentine Republic, the principle of
the absence of special treaty, provided that those countries do not proscribe the execution there reciprocity was maintained by the courts, and was affirmed by the Code of 1878 as a
of our judgments, and under certain conditions, which, if they limit the principle, are inspired by condition sine qua non of the execution of foreign judgments, but has perhaps been modified by
the wish of protecting our sovereignty and by the supreme exigencies of justice. When nothing later legislation. Moreau, No. 218; Palomeque, in Clunet, 1887, pp. 539-558.
appears either for or against as to the authority of the judgments of our courts in the foreign
country, one should not put an obstacle to the fulfillment, in our country, of judgments emanating
It appears, therefore, that there is hardly a civilized nation on either continent which by its
from other nations, especially when the question is of a country which, by its historic origin, its
general law allows conclusive effect to an executory foreign judgment for the recovery of money.
language, its literature, and by almost the identity of its customs, its usages, and its social
In France and in a few smaller states -- Norway, Portugal, Greece, Monaco, and Hayti -- the
institutions, has so great a connection with our own, which obliges us to maintain with it the most
merits of the controversy are reviewed as of course, allowing to the foreign judgment, at the
intimate relations of friendship and courtesy."
most, no more effect than of being prima facie evidence of the justice of the claim. In the great
majority of the countries on the continent of Europe -- in Belgium, Holland, Denmark, Sweden,
And he pointed out that Mexico, by its Code, had adopted reciprocity as a fundamental principle. Germany, in many cantons of Switzerland, in Russia and Poland, in Roumania, in Austria and
Hungary (perhaps in Italy), and in Spain -- as well as in Egypt, in Mexico, and in a great part of
South America, the judgment rendered in a foreign country is allowed the same effect only as
Page 159 U. S. 226
the courts of that country allow to the judgments of the country in which the judgment in question
is sought to be executed.
Among the reasons assigned by the court for ordering the Mexican judgment to be executed
was that "there exists in Mexico no precedent of jurisprudence which refuses execution to
The prediction of Mr. Justice Story (in § 618 of his Commentaries on the Conflict of Laws,
judgments rendered by the Spanish tribunals." Clunet, 1891, pp. 288-292.
already cited) has thus been fulfilled, and the rule of reciprocity has worked itself firmly into the
structure of international jurisprudence.
In Portugal, foreign judgments, whether against a Portuguese or against a foreigner, are held to
be reviewable upon the merits before granting execution thereof. Foelix, No. 399; Clunet, 1875,
The reasonable, if not the necessary, conclusion appears to us to be that judgments rendered in
pp. 54, 448; Moreau, No. 217; Constant, 176-180; Westlake, ubi sup.
France, or in any other foreign country by the laws of which our own judgments are reviewable
upon the merits are not entitled to full credit and conclusive effect when sued upon in this
In Greece, by the provisions of the Code of 1834, foreign judgments both parties to which are country, but are prima facie evidence only of the justice of the plaintiffs' claim.
foreigners are enforced without examination of their merits, but if one of the parties is a Greek,
they are not enforced if found contradictory to the facts proved or if they are contrary to the
Page 159 U. S. 228
prohibitive laws of Greece. Foelix, No. 396; Constant, 151, 152; Moreau, No. 202; Saripolos, in
Clunet, 1880, p. 173; Piggott, 475.
In holding such a judgment, for want of reciprocity, not to be conclusive evidence of the merits of
the claim, we do not proceed upon any theory of retaliation upon one person by reason of
In Egypt, under the influence of European jurisprudence, the Code of Civil Procedure has made
injustice done to another, but upon the broad ground that international law is founded upon
reciprocity a condition upon which foreign judgments are executed. Constant, 136; Clunet, 1887,
mutuality and reciprocity, and that by the principles of international law recognized in most
pp. 98, 228; 1889, p. 322.
civilized nations, and by the comity of our own country, which it is our judicial duty to known and
to declare, the judgment is not entitled to be considered conclusive.
In Cuba and in Porto Rico, the Codes of Civil Procedure are based upon the Spanish Code of
1855. Piggott, 435, 503. In Hayti, the Code reenacts the provisions of the French Code.
By our law at the time of the adoption of the Constitution, a foreign judgment was considered
Constant, 153; Moreau, No. 203; Piggott, 460.
as prima facie evidence, and not conclusive. There is no statute of the United States, and no
treaty of the United States with France or with any other nation, which has changed that law or
has made any provision upon the subject. It is not to be supposed that if any statute or treaty to me that the doctrine of res judicata applicable to domestic judgments should be applied to
had been or should be made, it would recognize as conclusive the judgments of any country foreign judgments as well, and rests on the same general ground of public policy -- that there
which did not give like effect to our own judgments. In the absence of statute or treaty, it appears should be an end of litigation.
to us equally unwarrantable to assume that the comity of the United States requires anything
This application of the doctrine is in accordance with our own jurisprudence, and it is not
necessary that we should hold it to be required by some rule of international law. The
If we should hold this judgment to be conclusive, we should allow it an effect to which, supposing fundamental principle concerning judgments is that disputes are finally determined by them, and
the defendants' offers to be sustained by actual proof, it would, in the absence of a special I am unable to perceive why a judgment in personam, which is not open to question on the
treaty, be entitled in hardly any other country in Christendom except the country in which it was ground of want of jurisdiction, either intrinsically or over the parties, or of fraud, or on any other
rendered. If the judgment had been rendered in this country, or in any other outside of the recognized ground of impeachment, should not be held, inter partes, though recovered abroad,
jurisdiction of France, the French courts would not have executed or enforced it except after conclusive on the merits.
examining into its merits. The very judgment now sued on would be held inconclusive in almost
any other country than France. In England and in the colonies subject to the law of England, the
Page 159 U. S. 230
fraud alleged in its procurement would be a sufficient ground for disregarding it. In the courts of
nearly every other nation, it would be subject to reexamination either merely because it was a
foreign judgment or because judgments of that nation would be reexaminable in the courts of Judgments are executory while unpaid, but in this country, execution is not given upon a foreign
France. judgment as such, it being enforced through a new judgment obtained in an action brought for
that purpose.
Page 159 U. S. 229
The principle that requires litigation to be treated as terminated by final judgment, properly
rendered, is as applicable to a judgment proceeded on in such an action as to any other, and
For these reasons, in the action at law, the
forbids the allowance to the judgment debtor of a retrial of the original cause of action, as of
right, in disregard of the obligation to pay arising on the judgment, and of the rights acquired by
Judgment is reversed, and the cause remanded to the circuit court, with directions to set aside the judgment creditor thereby.
the verdict and to order a new trial.
That any other conclusion is inadmissible is forcibly illustrated by the case in hand. Plaintiffs in
For the same reasons, in the suit in equity between these parties, the foreign judgment is not a error were trading copartners in Paris as well as in New York, and had a place of business in
bar, and therefore the Paris at the time of these transactions and of the commencement of the suit against them in
France. The subjects of the suit were commercial transactions, having their origin, and partly
performed, in France under a contract there made, and alleged to be modified by the dealings of
Decree dismissing the bill is reversed the plea adjudged bad, and the cause remanded to the
the parties there, and one of the claims against them was for goods sold to them there. They
circuit court for further proceedings not inconsistent with this opinion.
appeared generally in the case, without protest, and by counterclaims relating to the same
general course of business, a part of them only connected with the claims against them, became
* Bartlet v. Knight (1805), 1 Mass. 401, 405; Buttrick v. Allen (1811), 8 Mass. 273; Bissell v. actors in the suit, and submitted to the courts their own claims for affirmative relief, as well as the
Briggs (1813), 9 Mass. 462, 464; Hall v. Williams (1828), 6 Pick. 232, 238; Gleason v. claims against them. The courts were competent, and they took the chances of a decision in
Dodd (1842), 4 Met. 333, 336; Wood v. Gamble (1853), 11 Cush. 8; McKim v. Odom (1835), 12 their favor. As traders in France, they were under the protection of its laws, and were bound by
Me. 94, 96; Bank v. Butman (1848), 29 Me. 19, 21; Bryant v. Ela (1815), Smith 396, its laws, its commercial usages, and its rules of procedure. The fact that they were Americans
404; Thurber v. Blackbourne (1818), 1 N.H. 242; Robinson v. Prescott (1828), 4 N.H. 450; Taylor and the opposite parties were citizens of France is immaterial, and there is no suggestion on the
v. Barron (1855), 10 Fost. 78, 95; King v. Van Gilder (1791), 1 D.Chip. 59; Rathbone v. record that those courts proceeded on any other ground than that all litigants, whatever their
Terry (1837), 1 R.I. 73, 76; Aldrich v. Kinney (1822), 4 Conn. 380, 382; Hitchcock v. nationality, were entitled to equal justice therein. If plaintiffs in error had succeeded in their
Aicken(1803), 1 Caines 460; Smith v. Lewis (1808), 3 Johns. 157, 159; Taylor v. Bryden (1811), cross-suit and recovered judgment against defendants in error, and had sued them here on that
8 Johns. 173; Andrews v. Montgomery(1821), 19 Johns. 162, 165; Starbuck v. Murray (1830), 5 judgment, defendants in error would not have been permitted to say that the judgment in France
Wend. 148, 155; Benton v. Burgot (1823), 10 S. & R. 240-242; Barney v. Patterson (1824), 6 H. was
& J. 182, 202, 203; Taylor v. Phelps (1827), 1 H. & G. 492, 503; Rogers v. Coleman (1808),
Hardin 413-414; Williams v. Preston (1830), 3 J. J. Marsh. 600, 601.
Page 159 U. S. 231

not conclusive against them. As it was, defendants in error recovered, and I think plaintiffs in
BREWER, and MR. JUSTICE JACKSON, dissenting.
error are not entitled to try their fortune anew before the courts of this country on the same
matters voluntarily submitted by them to the decision of the foreign tribunal. We are dealing with
Plaintiffs brought their action on a judgment recovered by them against the defendants in the the judgment of a court of a civilized country, whose laws and system of justice recognize the
courts of France, which courts had jurisdiction over person and subject matter, and in respect of general rules in respect to property and rights between man and man prevailing among all
which judgment no fraud was alleged, except in particulars contested in and considered by the civilized peoples. Obviously the last persons who should be heard to complain are those who
French courts. The question is whether, under these circumstances and in the absence of a identified themselves with the business of that country, knowing that all their transactions there
treaty or act of Congress, the judgment is reexaminable upon the merits. This question I regard would be subject to the local laws and modes of doing business. The French courts appear to
as one to be determined by the ordinary and settled rule in respect of allowing a party who has have acted "judicially, honestly, and with the intention to arrive at the right conclusion," and a
had an opportunity to prove his case in a competent court to retry it on the merits, and it seems result thus reached ought not to be disturbed.
The following view of the rule in England was expressed by Lord Herschell in Nouvion v. Page 159 U. S. 233
Freeman, L.R. 15 App.Cas. 1, 9, quoted in the principal opinion:
foreign judgment must be demurrable on that ground. The mode of pleading shows that the
"The principle upon which I think our enforcement of foreign judgments must proceed is this, that judgment was considered not as merely prima facie evidence of that cause of action for which
in a court of competent jurisdiction, where, according to its established procedure, the whole the judgment was given, but as in itself giving rise at least prima facie to a legal obligation to
merits of the case were open at all events, to the parties, however much they may have failed to obey that judgment and pay the sum adjudged. This may seem a technical mode of dealing with
take advantage of them or may have waived any of their rights, a final adjudication has been the question, but in truth it goes to the root of the matter, for if the judgment were merely
given that a debt or obligation exists, which cannot thereafter in that court be disputed, and can considered as evidence of the original cause of action, it must be open to meet it by any counter
only be questioned in an appeal to a higher tribunal. In such a case, it may well be said that, evidence negativing the existence of that original cause of action. If, on the other hand, there is
giving credit to the court of another country, we are prepared to take the fact that such a prima facie obligation to obey the judgment of a tribunal having jurisdiction over the party and
adjudication has been made as establishing the existence of the debt or obligation." the cause, and to pay the sum decreed, the question would be whether it was open to the
unsuccessful party to try the cause over again in a court not sitting as a court of appeal from that
which gave the judgment. It is quite clear that this could not be done where the action is brought
But in that connection, the observations made by Mr. Justice Blackburn in Godard v. Gray, L.R.
on the judgment of an English tribunal, and, on principle, it seems the same rule should apply
6 Q.B. 139, 148, and often referred to with approval, may usefully again be quoted:
where it is brought on that of a foreign tribunal."

"It is not an admitted principle of the law of nations that a state is bound to enforce within its
In any aspect, it is difficult to see why rights acquired under foreign judgments do not belong to
territories the judgments of a foreign tribunal. Several of the continental nations (including
the category of private rights acquired under foreign laws. Now the rule is universal in this
France) do not enforce the judgments of other countries
country that private rights acquired under the laws of foreign states will be respected and
enforced in our courts unless contrary to the policy or prejudicial to the interests of the state
Page 159 U. S. 232 where this is sought to be done, and, although the source of this rule may have been the comity
characterizing the intercourse between nations, it prevails today by its own strength, and the
right to the application of the law to which the particular transaction is subject is a juridical right.
unless where there are reciprocal treaties to that effect. But in England and in those states which
are governed by the common law, such judgments are enforced not by virtue of any treaty nor
by virtue of any statute, but upon a principle very well stated by Parke, B., in Williams v. And without going into the refinements of the publicists on the subject, it appears to me that that
Jones, 13 M. & W. 633:" law finds authoritative expression in the judgments of courts of competent jurisdiction over
parties and subject matter.
"Where a court of competent jurisdiction had adjudicated a certain sum to be due from one
person to another, a legal obligation arises to pay that sum, on which an action of debt to It is held by the majority of the court that defendants cannot be permitted to contest the validity
enforce the judgment may be maintained. It is in this way that the judgments of foreign and and effect of this judgment on the general ground that it was erroneous in law
colonial courts are supported and enforced."
Page 159 U. S. 234
"And taking this as the principle, it seems to follow that anything which negatives the existence
of that legal obligation, or excuses the defendant from the performance of it, must form a good
or in fact and the special grounds relied on are seriatim rejected. In respect of the last of these --
defense to the action. It must be open, therefore, to the defendant to show that the court which
that of fraud -- it is said that it is unnecessary in this case to decide whether certain decisions
pronounced the judgment had not jurisdiction to pronounce it, either because they exceeded the
cited in regard to impeaching foreign judgments for fraud could be followed consistently with our
jurisdiction given to them by the foreign law or because he, the defendant, was not subject to
own decisions as to impeaching domestic judgments for that reason,
that jurisdiction, and so far the foreign judgment must be examinable. Probably the defendant
may show that the judgment was obtained by the fraud of the plaintiff, for that would show that
the defendant was excused from the performance of an obligation thus obtained, and it may be "because there is a distinct and independent ground upon which we are satisfied that the comity
that where the foreign court has knowingly and perversely disregarded the rights given to an of our nation does not require us to give conclusive effect to the judgments of the courts of
English subject by English law, that forms a valid excuse for disregarding the obligation thus France, and that ground is the want of reciprocity on the part of France as to the effect to be
imposed on him; but we prefer to imitate the caution of the present lord Chancellor in Castrique given to the judgments of this and other foreign countries."
v. Imrie, L.R. 4 H.L. 445, and to leave those questions to be decided when they arise, only
observing in the present case, as in that:"
And the conclusion is announced to be

"The whole of the facts appear to have been inquired into by the French courts judicially,
"that judgments rendered in France or in any other foreign country by the laws of which our own
honestly, and with the intention to arrive at the right conclusion; and, having heard the facts as
judgments are reviewable upon the merits are not entitled to full credit and conclusive effect
stated before them, they came to a conclusion which justified them in France in deciding as they
when sued upon in this country, but are prima facie evidence only of the justice of the plaintiff's
did decide. . . ."

"Indeed, it is difficult to understand how the common course of pleading is consistent with any
In other words, that, although no special ground exists for impeaching the original justice of a
notion that the judgment was only evidence. If that were so, every count on a
judgment, such as want of jurisdiction or fraud, the right to retry the merits of the original cause
at large, defendant being put upon proving those merits, should be accorded in every suit on
judgments recovered in countries where our own judgments are not given full effect, on that When plaintiff returned to Jeddah a few days later, several SAUDIA
ground merely. officials interrogated her about the Jakarta incident. They then
requested her to go back to Jakarta to help arrange the release of
Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and
I cannot yield my assent to the proposition that, because by legislation and judicial decision in
base manager Baharini negotiated with the police for the immediate
France, that effect is not there given to judgments recovered in this country which, according to
release of the detained crew members but did not succeed because
our jurisprudence, we think should be given to judgments wherever recovered (subject, of
plaintiff refused to cooperate. She was afraid that she might be tricked
course, to the recognized exceptions), therefore we should pursue the same line of conduct as
into something she did not want because of her inability to understand
respects the judgments of French tribunals. The application of the doctrine of res judicata does
the local dialect. She also declined to sign a blank paper and a
not rest in discretion, and it is for the government, and not for its courts, to adopt the principle of
document written in the local dialect. Eventually, SAUDIA allowed
retorsion, if deemed under any circumstances desirable or necessary.
plaintiff to return to Jeddah but barred her from the Jakarta flights.

As the court expressly abstains from deciding whether the judgment is impeachable on the
Plaintiff learned that, through the intercession of the Saudi Arabian
ground of fraud, I refrain from any observations on that branch of the case.
government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
Page 159 U. S. 235 service by defendant SAUDI (sic). In September 1990, defendant
SAUDIA transferred plaintiff to Manila.
dissent. On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors requested her to see
Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi
G.R. No. 122191 October 8, 1998 Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
SAUDI ARABIAN AIRLINES, petitioner, incident. Miniewy simply stood by as the police put pressure on her to
vs. make a statement dropping the case against Thamer and Allah. Not
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his until she agreed to do so did the police return her passport and
capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon allowed her to catch the afternoon flight out of Jeddah.
City, respondents.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a
few minutes before the departure of her flight to Manila, plaintiff was
not allowed to board the plane and instead ordered to take a later flight
to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When
QUISUMBING, J.: she did, a certain Khalid of the SAUDIA office brought her to a Saudi
court where she was asked to sign a document written in Arabic. They
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set aside told her that this was necessary to close the case against Thamer and
the Resolution1dated September 27, 1995 and the Decision2 dated April 10, 1996 of the Allah. As it turned out, plaintiff signed a notice to her to appear before
Court of Appeals3 in CA-G.R. SP No. 36533,4 and the Orders5 dated August 29, 1994 6 and the court on June 27, 1993. Plaintiff then returned to Manila.
February 2, 19957 that were issued by the trial court in Civil Case No. Q-93-18394.8
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to
The pertinent antecedent facts which gave rise to the instant petition, as stated in the Jeddah once again and see Miniewy on June 27, 1993 for further
questioned Decision9, are as follows: investigation. Plaintiff did so after receiving assurance from SAUDIA's
Manila manager, Aslam Saleemi, that the investigation was routinary
and that it posed no danger to her.
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight
Attendant for its airlines based in Jeddah, Saudi Arabia. . . .
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi
court on June 27, 1993. Nothing happened then but on June 28, 1993, a
On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff Saudi judge interrogated plaintiff through an interpreter about the
went to a disco dance with fellow crew members Thamer Al-Gazzawi Jakarta incident. After one hour of interrogation, they let her go. At the
and Allah Al-Gazzawi, both Saudi nationals. Because it was almost airport, however, just as her plane was about to take off, a SAUDIA
morning when they returned to their hotels, they agreed to have officer told her that the airline had forbidden her to take flight. At the
breakfast together at the room of Thamer. When they were in te (sic) Inflight Service Office where she was told to go, the secretary of Mr.
room, Allah left on some pretext. Shortly after he did, Thamer Yahya Saddick took away her passport and told her to remain in
attempted to rape plaintiff. Fortunately, a roomboy and several Jeddah, at the crew quarters, until further orders.
security personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi,
the latter as an accomplice.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the Respondent Judge subsequently issued another Order 24 dated February 2, 1995, denying
same court where the judge, to her astonishment and shock, rendered SAUDIA's Motion for Reconsideration. The pertinent portion of the assailed Order reads
a decision, translated to her in English, sentencing her to five months as follows:
imprisonment and to 286 lashes. Only then did she realize that the
Saudi court had tried her, together with Thamer and Allah, for what
Acting on the Motion for Reconsideration of defendant Saudi Arabian
happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
Airlines filed, thru counsel, on September 20, 1994, and the Opposition
going to a disco, dancing and listening to the music in violation of
thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well
Islamic laws; and (3) socializing with the male crew, in contravention
as the Reply therewith of defendant Saudi Arabian Airlines filed, thru
of Islamic tradition. 10
counsel, on October 24, 1994, considering that a perusal of the
plaintiffs Amended Complaint, which is one for the recovery of actual,
Facing conviction, private respondent sought the help of her employer, petitioner moral and exemplary damages plus attorney's fees, upon the basis of
SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine the applicable Philippine law, Article 21 of the New Civil Code of the
Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her Philippines, is, clearly, within the jurisdiction of this Court as regards
upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued the subject matter, and there being nothing new of substance which
to serve in the international might cause the reversal or modification of the order sought to be
flights. 11 reconsidered, the motion for reconsideration of the defendant, is
Because she was wrongfully convicted, the Prince of Makkah dismissed the case against
her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, 12 she was SO ORDERED. 25
terminated from the service by SAUDIA, without her being informed of the cause.
Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
On November 23, 1993, Morada filed a Complaint 13 for damages against SAUDIA, and Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary
Khaled Al-Balawi ("Al-Balawi"), its country manager. Restraining Order 26 with the Court of Appeals.

On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the Respondent Court of Appeals promulgated a Resolution with Temporary Restraining
following grounds, to wit: (1) that the Complaint states no cause of action against Saudia; Order 27 dated February 23, 1995, prohibiting the respondent Judge from further
(2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set conducting any proceeding, unless otherwise directed, in the interim.
forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4)
that the trial court has no jurisdiction to try the case.
In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate
court denied SAUDIA's Petition for the Issuance of a Writ of Preliminary Injunction dated
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) 15. Saudia filed February 18, 1995, to wit:
a reply 16 thereto on March 3, 1994.
The Petition for the Issuance of a Writ of Preliminary Injunction is
On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi was dropped hereby DENIED, after considering the Answer, with Prayer to Deny
as party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder, it
Dismiss Amended Complaint 18. appearing that herein petitioner is not clearly entitled thereto (Unciano
Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335, April
7, 1993, Second Division).
The trial court issued an Order 19 dated August 29, 1994 denying the Motion to Dismiss
Amended Complaint filed by Saudia.
From the Order of respondent Judge denying the Motion to Dismiss, SAUDIA filed on
September 20, 1994, its Motion for Reconsideration 21 of the Order dated August 29, 1994. On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition 29
It alleged that the trial court has no jurisdiction to hear and try the case on the basis of Review with Prayer for Temporary Restraining Order dated October 13, 1995.
Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of
Saudi Arabia. On October 14, 1994, Morada filed her Opposition 22(To Defendant's Motion
However, during the pendency of the instant Petition, respondent Court of Appeals
for Reconsideration).
rendered the Decision 30dated April 10, 1996, now also assailed. It ruled that the
Philippines is an appropriate forum considering that the Amended Complaint's basis for
In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its recovery of damages is Article 21 of the Civil Code, and thus, clearly within the
Motion for Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in
Motion Rule does not apply, even if that ground is raised for the first time on appeal. a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to
Additionally, SAUDIA alleged that the Philippines does not have any substantial interest trial, and in case of an adverse ruling, find recourse in an appeal.
in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING
Temporary Restraining Order 31 dated April 30, 1996, given due course by this Court. After THAT IN THIS CASE PHILIPPINE LAW SHOULD GOVERN.
both parties submitted their Memoranda, 32 the instant case is now deemed submitted for
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the
outset. It maintains that private respondent's claim for alleged abuse of rights occurred in
Petitioner SAUDIA raised the following issues: the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies
the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of
the lex loci delicti commissi rule. 34

On the other hand, private respondent contends that since her Amended Complaint is
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-
based on Articles 19 35 and 21 36 of the Civil Code, then the instant case is properly a
18394 based on Article 21 of the New Civil Code since the proper law
matter of domestic law. 37
applicable is the law of the Kingdom of Saudi Arabia inasmuch as this
case involves what is known in private international law as a "conflicts
problem". Otherwise, the Republic of the Philippines will sit in Under the factual antecedents obtaining in this case, there is no dispute that the interplay
judgment of the acts done by another sovereign state which is of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint 38 dated June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign
Leave of court before filing a supplemental pleading is not a airlines corporation doing business in the Philippines. It may be
jurisdictional requirement. Besides, the matter as to absence of leave served with summons and other court processes at Travel Wide
of court is now moot and academic when this Honorable Court Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero
required the respondents to comment on petitioner's April 30, 1996 St., Salcedo Village, Makati, Metro Manila.
Supplemental Petition For Review With Prayer For A Temporary
Restraining Order Within Ten (10) Days From Notice Thereof. Further,
xxx xxx xxx
the Revised Rules of Court should be construed with liberality
pursuant to Section 2, Rule 1 thereof.
6. Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDIA. In September 1990, defendant SAUDIA
Petitioner received on April 22, 1996 the April 10, 1996 decision in CA- transferred plaintiff to Manila.
G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon. Rodolfo A.
Ortiz, et al." and filed its April 30, 1996 Supplemental Petition For
7. On January 14, 1992, just when plaintiff thought that the Jakarta
Review With Prayer For A Temporary Restraining Order on May 7, 1996
incident was already behind her, her superiors reauested her to see
at 10:29 a.m. or within the 15-day reglementary period as provided for
MR. Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi
under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the
Arabia. When she saw him, he brought her to the police station where
decision in CA-G.R. SP NO. 36533 has not yet become final and
the police took her passport and questioned her about the Jakarta
executory and this Honorable Court can take cognizance of this
incident. Miniewy simply stood by as the police put pressure on her to
case. 33
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and
From the foregoing factual and procedural antecedents, the following issues emerge for allowed her to catch the afternoon flight out of Jeddah.
our resolution:
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi
I. Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal Officer
of SAUDIA. When she did, a certain Khalid of the SAUDIA office
brought her to a Saudi court where she was asked to sigh a document
written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993. Plaintiff then
II. returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report We thus find private respondent's assertion that the case is purely domestic, imprecise.
to Jeddah once again and see Miniewy on June 27, 1993 for further A conflicts problem presents itself here, and the question of jurisdiction 43 confronts the
investigation. Plaintiff did so after receiving assurance from SAUDIA's court a quo.
Manila manger, Aslam Saleemi, that the investigation was routinary
and that it posed no danger to her.
After a careful study of the private respondent's Amended Complaint, 44 and the Comment
thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same New Civil Code.
Saudi court on June 27, 1993. Nothing happened then but on June 28,
1993, a Saudi judge interrogated plaintiff through an interpreter about
On one hand, Article 19 of the New Civil Code provides:
the Jakarta incident. After one hour of interrogation, they let her go. At
the airport, however, just as her plane was about to take off, a SAUDIA
officer told her that the airline had forbidden her to take that flight. At Art. 19. Every person must, in the exercise of his rights and in the
the Inflight Service Office where she was told to go, the secretary of performance of his duties, act with justice give everyone his due and
Mr. Yahya Saddick took away her passport and told her to remain in observe honesty and good faith.
Jeddah, at the crew quarters, until further orders.
On the other hand, Article 21 of the New Civil Code provides:
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to
the same court where the judge, to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to Art. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
five months imprisonment and to 286 lashes. Only then did she realize
that the Saudi court had tried her, together with Thamer and Allah, for compensate the latter for damages.
what happened in Jakarta. The court found plaintiff guilty of (1)
adultery; (2) going to a disco, dancing, and listening to the music in Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this Court held that:
violation of Islamic laws; (3) socializing with the male crew, in
contravention of Islamic tradition.
The aforecited provisions on human relations were intended to expand
the concept of torts in this jurisdiction by granting adequate legal
12. Because SAUDIA refused to lend her a hand in the case, plaintiff remedy for the untold number of moral wrongs which is impossible for
sought the help of the Philippines Embassy in Jeddah. The latter human foresight to specifically provide in the statutes.
helped her pursue an appeal from the decision of the court. To pay for
her upkeep, she worked on the domestic flights of defendant SAUDIA
while, ironically, Thamer and Allah freely served the international Although Article 19 merely declares a principle of law, Article 21 gives flesh to its
flights. 39 provisions. Thus, we agree with private respondent's assertion that violations of Articles
19 and 21 are actionable, with judicially enforceable remedies in the municipal forum.

Where the factual antecedents satisfactorily establish the existence of a foreign element,
we agree with petitioner that the problem herein could present a "conflicts" case. Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of
Court on jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City
possesses jurisdiction over the subject matter of the suit. 48 Its authority to try and hear
A factual situation that cuts across territorial lines and is affected by the diverse laws of the case is provided for under Section 1 of Republic Act No. 7691, to wit:
two or more states is said to contain a "foreign element". The presence of a foreign
element is inevitable since social and economic affairs of individuals and associations
are rarely confined to the geographic limits of their birth or conception. 40 Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as
the "Judiciary Reorganization Act of 1980", is hereby amended to read
as follows:
The forms in which this foreign element may appear are many. 41 The foreign element may
simply consist in the fact that one of the parties to a contract is an alien or has a foreign
domicile, or that a contract between nationals of one State involves properties situated in Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall
another State. In other cases, the foreign element may assume a complex form. 42 exercise exclusive jurisdiction:

In the instant case, the foreign element consisted in the fact that private respondent xxx xxx xxx
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 (8) In all other cases in which demand, exclusive of
flight stewardess, events did transpire during her many occasions of travel across interest, damages of whatever kind, attorney's fees,
national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice litigation expenses, and cots or the value of the
versa, that caused a "conflicts" situation to arise. 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 cause of action has prescribed. By interposing such second ground in
hundred Thousand pesos (P200,000.00). (Emphasis its motion to dismiss, Ker and Co., Ltd. availed of an affirmative
ours) defense on the basis of which it prayed the court to resolve
controversy in its favor. For the court to validly decide the said plea of
defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction
xxx xxx xxx
upon the latter's person, who, being the proponent of the affirmative
defense, should be deemed to have abandoned its special appearance
And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon and voluntarily submitted itself to the jurisdiction of the court.
City, is appropriate:
Similarly, the case of De Midgely vs. Ferandos, held that;
Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]
When the appearance is by motion for the purpose of objecting to the
(a) xxx xxx xxx jurisdiction of the court over the person, it must be for the sole and
separate purpose of objecting to the jurisdiction of the court. If his
motion is for any other purpose than to object to the jurisdiction of the
(b) Personal actions. — All other actions may be commenced and tried court over his person, he thereby submits himself to the jurisdiction of
where the defendant or any of the defendants resides or may be found,
the court. A special appearance by motion made for the purpose of
or where the plaintiff or any of the plaintiff resides, at the election of objecting to the jurisdiction of the court over the person will be held to
the plaintiff. be a general appearance, if the party in said motion should, for
example, ask for a dismissal of the action upon the further ground that
Pragmatic considerations, including the convenience of the parties, also weigh heavily in the court had no jurisdiction over the subject matter. 52
favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of
the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon
advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice City. Thus, we find that the trial court has jurisdiction over the case and that its exercise
of an inconvenient forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting thereof, justified.
upon him needless expense or disturbance. But unless the balance is strongly in favor of
the defendant, the plaintiffs choice of forum should rarely be disturbed. 49
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
Weighing the relative claims of the parties, the court a quo found it best to hear the case
some of the significant facts occurred in two or more states; and (2) to what extent
in the Philippines. Had it refused to take cognizance of the case, it would be forcing should the chosen legal system regulate the situation. 53
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. Several theories have been propounded in order to identify the legal system that should
ultimately control. Although ideally, all choice-of-law theories should intrinsically
advance both notions of justice and predictability, they do not always do so. The forum is
Moreover, by hearing the case in the Philippines no unnecessary difficulties and then faced with the problem of deciding which of these two important values should be
inconvenience have been shown by either of the parties. The choice of forum of the stressed. 54
plaintiff (now private respondent) should be upheld.

Before a choice can be made, it is necessary for us to determine under what category a
Similarly, the trial court also possesses jurisdiction over the persons of the parties certain set of facts or rules fall. This process is known as "characterization", or the
herein. By filing her Complaint and Amended Complaint with the trial court, private
"doctrine of qualification". It is the "process of deciding whether or not the facts relate to
respondent has voluntary submitted herself to the jurisdiction of the court. the kind of question specified in a conflicts rule." 55The purpose of "characterization" is
to enable the forum to select the proper law. 56
The records show that petitioner SAUDIA has filed several motions 50 praying for the
dismissal of Morada's Amended Complaint. SAUDIA also filed an Answer In Ex Our starting point of analysis here is not a legal relation, but a factual situation, event, or
Abundante Cautelam dated February 20, 1995. What is very patent and explicit from the operative fact. 57An essential element of conflict rules is the indication of a "test" or
motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably,
"connecting factor" or "point of contact". Choice-of-law rules invariably consist of a
petitioner SAUDIA has effectively submitted to the trial court's jurisdiction by praying for factual relationship (such as property right, contract claim) and a connecting factor or
the dismissal of the Amended Complaint on grounds other than lack of jurisdiction. point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing. 58
As held by this Court in Republic vs. Ker and Company, Ltd.: 51
Note that one or more circumstances may be present to serve as the possible test for the
We observe that the motion to dismiss filed on April 14, 1962, aside determination of the applicable law. 59 These "test factors" or "points of contact" or
from disputing the lower court's jurisdiction over defendant's person, "connecting factors" could be any of the following:
prayed for dismissal of the complaint on the ground that plaintiff's
(1) The nationality of a person, his domicile, his residence, his place of reputation, for which petitioner could be liable as claimed, to provide compensation or
sojourn, or his origin; redress for the wrongs done, once duly proven.

(2) the seat of a legal or juridical person, such as a corporation; 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
(3) the situs of a thing, that is, the place where a thing is, or is deemed
the Philippines could be said as a situs of the tort (the place where the alleged tortious
to be situated. In particular, the lex situs is decisive when real rights
conduct took place). This is because it is in the Philippines where petitioner allegedly
are involved;
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
(4) the place where an act has been done, the locus actus, such as the performance of its duties, "act with justice, give her due and observe honesty and good
place where a contract has been made, a marriage celebrated, a will faith." Instead, petitioner failed to protect her, she claimed. That certain acts or parts of
signed or a tort committed. The lex loci actus is particularly important the injury allegedly occurred in another country is of no moment. For in our view what is
in contracts and torts; 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
(5) the place where an act is intended to come into effect, e.g., the
to identify the Philippines as the situs of the alleged tort.
place of performance of contractual duties, or the place where a power
of attorney is to be exercised;
Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi,
modern theories and rules on tort liability 61 have been advanced to offer fresh judicial
(6) the intention of the contracting parties as to the law that should approaches to arrive at just results. In keeping abreast with the modern theories on tort
govern their agreement, thelex loci intentionis; liability, we find here an occasion to apply the "State of the most significant relationship"
rule, which in our view should be appropriate to apply now, given the factual context of
(7) the place where judicial or administrative proceedings are this case.
instituted or done. The lex fori — the law of the forum — is particularly
important because, as we have seen earlier, matters of "procedure"
In applying said principle to determine the State which has the most significant
not going to the substance of the claim involved are governed by it; relationship, the following contacts are to be taken into account and evaluated according
and because the lex fori applies whenever the content of the otherwise to their relative importance with respect to the particular issue: (a) the place where the
applicable foreign law is excluded from application in a given case for
injury occurred; (b) the place where the conduct causing the injury occurred; (c) the
the reason that it falls under one of the exceptions to the applications domicile, residence, nationality, place of incorporation and place of business of the
of foreign law; and parties, and (d) the place where the relationship, if any, between the parties is centered. 62

(8) the flag of a ship, which in many cases is decisive of practically all As already discussed, there is basis for the claim that over-all injury occurred and lodged
legal relationships of the ship and of its master or owner as such. It in the Philippines. There is likewise no question that private respondent is a resident
also covers contractual relationships particularly contracts of Filipina national, working with petitioner, a resident foreign corporation engaged here in
affreightment. 60 (Emphasis ours.) 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
After a careful study of the pleadings on record, including allegations in the Amended labor law violations. From the record, the claim that the Philippines has the most
Complaint deemed admitted for purposes of the motion to dismiss, we are convinced that significant contact with the matter in this dispute, 63 raised by private respondent as
there is reasonable basis for private respondent's assertion that although she was plaintiff below against defendant (herein petitioner), in our view, has been properly
already working in Manila, petitioner brought her to Jeddah on the pretense that she established.
would merely testify in an investigation of the charges she made against the two SAUDIA
crew members for the attack on her person while they were in Jakarta. As it turned out,
Prescinding from this premise that the Philippines is the situs of the tort complained of
she was the one made to face trial for very serious charges, including adultery and and the place "having the most interest in the problem", we find, by way of recapitulation,
violation of Islamic laws and tradition. that the Philippine law on tort liability should have paramount application to and control
in the resolution of the legal issues arising out of this case. Further, we hold that the
There is likewise logical basis on record for the claim that the "handing over" or "turning respondent Regional Trial Court has jurisdiction over the parties and the subject matter
over" of the person of private respondent to Jeddah officials, petitioner may have acted of the complaint; the appropriate venue is in Quezon City, which could properly apply
beyond its duties as employer. Petitioner's purported act contributed to and amplified or Philippine law. Moreover, we find untenable petitioner's insistence that "[s]ince private
even proximately caused additional humiliation, misery and suffering of private respondent instituted this suit, she has the burden of pleading and proving the applicable
respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution Saudi law on the matter." 64As aptly said by private respondent, she has "no obligation to
of private respondent under the guise of petitioner's authority as employer, taking plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is
advantage of the trust, confidence and faith she reposed upon it. As purportedly found by based on Articles 19 and 21" of the Civil Code of the Philippines. In her Amended
the Prince of Makkah, the alleged conviction and imprisonment of private respondent was Complaint and subsequent pleadings, she never alleged that Saudi law should govern
wrongful. But these capped the injury or harm allegedly inflicted upon her person and this case. 65 And as correctly held by the respondent appellate court, "considering that it
was the petitioner who was invoking the applicability of the law of Saudi Arabia, then the petitioner BANK to it through the aforesaid overdraft facility, on October 7, 1982, both private
burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is". 66 respondents and a certain Robin de Clive Lowe, all of whom were directors of the COMPANY at
such time, executed a Joint and Several Guarantee (p. 53, Rollo) in favor of petitioner BANK
whereby private respondents and Lowe agreed to pay, jointly and severally, on demand all sums
Lastly, no error could be imputed to the respondent appellate court in upholding the trial
owed by the COMPANY to petitioner BANK under the aforestated overdraft facility.
court's denial of defendant's (herein petitioner's) motion to dismiss the case. Not only
was jurisdiction in order and venue properly laid, but appeal after trial was obviously
available, and expeditious trial itself indicated by the nature of the case at hand. The Joint and Several Guarantee provides, inter alia, that:
Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of
the case below, not just for the benefit of all the litigants, but also for the vindication of
This guarantee and all rights, obligations and liabilities arising hereunder
the country's system of law and justice in a transnational setting. With these guidelines in
shall be construed and determined under and may be enforced in
mind, the trial court must proceed to try and adjudge the case in the light of relevant
accordance with the laws of the Republic of Singapore. We hereby agree
Philippine law, with due consideration of the foreign element or elements involved.
that the Courts of Singapore shall have jurisdiction over all disputes arising
Nothing said herein, of course, should be construed as prejudging the results of the case
under this guarantee. ... (p. 33-A, Rollo).
in any manner whatsoever.

The COMPANY failed to pay its obligation. Thus, petitioner BANK demanded payment of the
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-
obligation from private respondents, conformably with the provisions of the Joint and Several
18394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is hereby REMANDED to
Guarantee. Inasmuch as the private respondents still failed to pay, petitioner BANK filed the
Regional Trial Court of Quezon City, Branch 89 for further proceedings.
above-mentioned complaint.

On December 14,1984, private respondents filed a motion to dismiss (pp 54-56, Rollo) which
was opposed by petitioner BANK (pp. 58-62, Rollo). Acting on the motion, the trial court issued
G.R. No. 72494 August 11, 1989 an order dated February 28, 1985 (pp, 64-65, Rollo), which read as follows:

HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner, In a Motion to Dismiss filed on December 14, 1984, the defendants seek the
vs. dismissal of the complaint on two grounds, namely:
COURT, respondents.
1. That the court has no jurisdiction over the subject matter of the complaint;
Quiason, Makalintal, Barot & Torres for petitioner.
2. That the court has no jurisdiction over the persons of the defendants.
Alejandro, Aranzaso & Associates for private respondents.
In the light of the Opposition thereto filed by plaintiff, the Court finds no merit
in the motion. "On the first ground, defendants claim that by virtue of the
provision in the Guarantee (the actionable document) which reads —
This guarantee and all rights, obligations and liabilities
arising hereunder shall be construed and determined
This is a petition for review on certiorari of the decision of the Intermediate Appellate Court (now
under and may be enforced in accordance with the laws
Court of Appeals) dated August 2, 1985, which reversed the order of the Regional Trial Court
of the Republic of Singapore. We hereby agree that the
dated February 28,1985 denying the Motion to Dismiss filed by private respondents Jack Robert
courts in Singapore shall have jurisdiction over all
Sherman and Deodato Reloj.
disputes arising under this guarantee,

A complaint for collection of a sum of money (pp. 49-52, Rollo) was filed by petitioner Hongkong
the Court has no jurisdiction over the subject matter of the case. The Court
and Shanghai Banking Corporation (hereinafter referred to as petitioner BANK) against private
finds and concludes otherwise. There is nothing in the Guarantee which
respondents Jack Robert Sherman and Deodato Reloj, docketed as Civil Case No. Q-42850
says that the courts of Singapore shall have jurisdiction to the exclusion of
before the Regional Trial Court of Quezon City, Branch 84.
the courts of other countries or nations. Also, it has long been established in
law and jurisprudence that jurisdiction of courts is fixed by law; it cannot be
It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (hereinafter referred conferred by the will, submission or consent of the parties.
to as COMPANY), a company incorporated in Singapore applied with, and was granted by, the
Singapore branch of petitioner BANK an overdraft facility in the maximum amount of Singapore
On the second ground, it is asserted that defendant Robert' , Sherman is
dollars 200,000.00 (which amount was subsequently increased to Singapore dollars 375,000.00)
not a citizen nor a resident of the Philippines. This argument holds no water.
with interest at 3% over petitioner BANK prime rate, payable monthly, on amounts due under
Jurisdiction over the persons of defendants is acquired by service of
said overdraft facility; as a security for the repayment by the COMPANY of sums advanced by
summons and copy of the complaint on them. There has been a valid Contrary to the position taken by respondents, the guarantee agreement
service of summons on both defendants and in fact the same is admitted compliance that any litigation will be before the courts of Singapore and that
when said defendants filed a 'Motion for Extension of Time to File the rights and obligations of the parties shall be construed and determined
Responsive Pleading on December 5, 1984. in accordance with the laws of the Republic of Singapore. A closer
examination of paragraph 14 of the Guarantee Agreement upon which the
motion to dismiss is based, employs in clear and unmistakeable (sic) terms
WHEREFORE, the Motion to Dismiss is hereby DENIED.
the word 'shall' which under statutory construction is mandatory.

Thus it was ruled that:

A motion for reconsideration of the said order was filed by private respondents which was,
... the word 'shall' is imperative, operating to impose a duty which may be
however, denied (p. 66,Rollo).
enforced (Dizon vs. Encarnacion, 9 SCRA 714).lâwphî1.ñèt

Private respondents then filed before the respondent Intermediate Appellate Court (now Court of
There is nothing more imperative and restrictive than what the agreement
Appeals) a petition for prohibition with preliminary injunction and/or prayer for a restraining order
categorically commands that 'all rights, obligations, and liabilities arising
(pp. 39-48, Rollo). On August 2, 1985, the respondent Court rendered a decision (p. 37, Rollo),
hereunder shall be construed and determined under and may be enforced in
the dispositive portion of which reads:
accordance with the laws of the Republic of Singapore.'

WHEREFORE, the petition for prohibition with preliminary injuction is

While it is true that "the transaction took place in Singaporean setting" and that the Joint and
hereby GRANTED. The respondent Court is enjoined from taking further
Several Guarantee contains a choice-of-forum clause, the very essence of due process dictates
cognizance of the case and to dismiss the same for filing with the proper
that the stipulation that "[t]his guarantee and all rights, obligations and liabilities arising
court of Singapore which is the proper forum. No costs.
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 in Singapore shall have
SO ORDERED. 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
The motion for reconsideration was denied (p. 38, Rollo), hence, the present petition. 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 (J.
The main issue is whether or not Philippine courts have jurisdiction over the suit. Salonga, Private International Law, 1981, p. 46). Indeed, as pointed-out by petitioner BANK 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, with more reason as a defendant.
The controversy stems from the interpretation of a provision in the Joint and Several Guarantee, However, in this case, private respondents are Philippine residents (a fact which was not
to wit: 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
(14) This guarantee and all rights, obligations and liabilites arising Philippine court try and resolve the case. Private respondents' stance is hardly comprehensible,
hereunder shall be construed and determined under and may be enforced in unless their ultimate intent is to evade, or at least delay, the payment of a just obligation.
accordance with the laws of the Republic of Singapore. We hereby agree
that the Courts in Singapore shall have jurisdiction over all disputes arising The defense of private respondents that the complaint should have been filed in Singapore is
under this guarantee. ... (p. 53-A, Rollo) 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,
In rendering the decision in favor of private respondents, the Court of Appeals made, the there is no showing that petitioner BANK filed the action here just to harass private respondents.
following observations (pp. 35-36, Rollo):
In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033, October 31, 1969, 30 SCRA
There are significant aspects of the case to which our attention is invited. 187, it was ruled:
The loan was obtained by Eastern Book Service PTE, Ltd., a company
incorporated in Singapore. The loan was granted by the Singapore Branch ... An accurate reading, however, of the stipulation, 'The parties agree to
of Hongkong and Shanghai Banking Corporation. The Joint and Several sue and be sued in the Courts of Manila,' does not preclude the filing of
Guarantee was also concluded in Singapore. The loan was in Singaporean suits in the residence of plaintiff or defendant. The plain meaning is that the
dollars and the repayment thereof also in the same currency. The parties merely consented to be sued in Manila. Qualifying or restrictive
transaction, to say the least, took place in Singporean setting in which the words which would indicate that Manila and Manila alone is the venue are
law of that country is the measure by which that relationship of the parties totally absent therefrom. We cannot read into that clause that plaintiff and
will be governed. defendant bound themselves to file suits with respect to the last two
transactions in question only or exclusively in Manila. For, that agreement
xxx xxx xxx did not change or transfer venue. It simply is permissive. The parties solely
agreed to add the courts of Manila as tribunals to which they may resort.
They did not waive their right to pursue remedy in the courts specifically Although the Joint and Several Guarantee prepared by petitioner BANK is a contract of adhesion
mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur. and that consequently, it cannot be permitted to take a stand contrary to the stipulations of the
contract, substantial bases exist for petitioner Bank's choice of forum, as discussed earlier.
This ruling was reiterated in the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., et al.,
G.R. No. 57250, October 30, 1981, 108 SCRA 740, where the stipulation was "[i]n case of Lastly, private respondents allege that neither the petitioner based at Hongkong nor its
litigation, jurisdiction shall be vested in the Court of Davao City." We held: Philippine branch is involved in the transaction sued upon. This is a vain attempt on their part to
further thwart the proceedings below inasmuch as well-known is the rule that a defendant cannot
plead any defense that has not been interposed in the court below.
Anent the claim that Davao City had been stipulated as the venue, suffice it
to say that a stipulation as to venue does not preclude the filing of suits in
the residence of plaintiff or defendant under Section 2 (b), Rule 4, Rules of ACCORDINGLY, the decision of the respondent Court is hereby REVERSED and the decision
Court, in the absence of qualifying or restrictive words in the agreement of the Regional Trial Court is REINSTATED, with costs against private respondents. This
which would indicate that the place named is the only venue agreed upon decision is immediately executory.
by the parties.
Applying the foregoing to the case at bar, 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
G.R. No. 18081 March 3, 1922
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 within its
boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over IN THE MATTER OF THE ESTATE OF CHEONG BOO, deceased.
travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign MORA ADONG, petitioner-appellant,
military units stationed in or marching through State territory with the permission of the latter's vs.
authorities. This authority, which finds its source in the concept of sovereignty, is exclusive within CHEONG SENG GEE, opponent-appellant.
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 (J. Salonga, Private International Law, 1981, pp. 37-38).lâwphî1.ñèt Kincaid, Perkins & Kincaid and P. J. Moore for petitioner-appellant.
Carlos A. Sobral for opponent-appellant.

As regards the issue on improper venue, petitioner BANK avers that the objection to improper
venue has been waived. However, We agree with the ruling of the respondent Court that:

While in the main, the motion to dismiss fails to categorically use with The two question presented for determination by these appeals may be framed as follows: Is a
exactitude the words 'improper venue' it can be perceived from the general marriage contracted in China and proven mainly by an alleged matrimonial letter, valid in the
thrust and context of the motion that what is meant is improper venue, The Philippines? Are the marriage performed in the Philippines according to the rites of the
use of the word 'jurisdiction' was merely an attempt to copy-cat the same Mohammedan religion valid? As the decision of the Supreme Court on the last point will affect
word employed in the guarantee agreement but conveys the concept of marriages consummated by not less than one hundred and fifty thousand Moros who profess the
venue. Brushing aside all technicalities, it would appear that jurisdiction was Mohammedan faith, the transcendental importance of the cause can be realized. We proposed
used loosely as to be synonymous with venue. It is in this spirit that this to give to the subject the serious consideration which it deserves.
Court must view the motion to dismiss. ... (p. 35, Rollo).
Cheong Boo, a native of China, died intestate in Zamboanga, Philippine Islands, on August 5,
At any rate, this issue is now of no moment because We hold that venue here was properly laid 1919. He left property worth nearly P100,000. The estate of the deceased was claimed, on the
one hand, by Cheong Seng Gee, who alleged that he was a legitimate child by a marriage
for the same reasons discussed above.
contracted by Cheong Boo with Tan Dit in China in 1895. The estate was claimed, on the other
hand, by the Mora Adong who alleged that she had been lawfully married to Cheong Boo in
The respondent Court likewise ruled that (pp. 36-37, Rollo): 1896 in Basilan, Philippine Islands, and her daughters, Payang, married to Cheng Bian Chay,
and Rosalia Cheong Boo, unmarried.
... In a conflict problem, a court will simply refuse to entertain the case if it is
not authorized by law to exercise jurisdiction. And even if it is so authorized, The conflicting claims to the estate of Cheong Boo were ventilated in the Court of First Instance
it may still refuse to entertain the case by applying the principle of forum non of Zamboanga. The trial judge, the Honorable Quirico Abeto, after hearing the evidence
conveniens. ... presented by both sides, reached the conclusion, with reference to the allegations of Cheong
Seng Gee, that the proof did not sufficiently establish the Chinese marriage, but that because
Cheong Seng Gee had been admitted to the Philippine Islands as the son of the deceased, he
However, whether a suit should be entertained or dismissed on the basis of the principle
should share in the estate as a natural child. With reference to the allegations of the Mora Adong
of forum non conveniensdepends largely upon the facts of the particular case and is addressed
and her daughters Payang and Rosalia, the trial judge reached the conclusion that the marriage
to the sound discretion of the trial court (J. Salonga, Private International Law, 1981, p.
between the Mora Adong and the deceased had been adequately proved but that under the
49).lâwphî1.ñèt Thus, the respondent Court should not have relied on such principle.
laws of the Philippine Islands it could not be held to be a lawful marriage; accordingly, the
daughters Payang and Rosalia would inherit as natural children. The order of the trial judge,
following these conclusions, was that there should be a partition of the property of the deceased disposed to disturb this appreciation of fact by the trial court. The immigration documents only go
Cheong Boo between the natural children, Cheong Seng Gee, Payang, and Rosalia. to show the relation of parent and child existing between the deceased Cheong Boo and his son
Cheong Seng Gee and do not establish the marriage between the deceased and the mother of
Cheong Seng Gee.
From the judgment of the Judge of First Instance both parties perfected appeals. As to the facts,
we can say that we agree in substance with the findings of the trial court. As to the legal issues
submitted for decision by the numerous assignments of error, these can best be resolved under Section IV of the Marriage Law (General Order No. 68) provides that "All marriages contracted
two heads, namely: (1) The validity of the Chinese marriage; and (2) the validity of the without these Islands, which would be valid by the laws of the country in which the same were
Mohammedan marriage. contracted, are valid in these Islands." To establish a valid foreign marriage pursuant to this
comity provision, it is first necessary to prove before the courts of the Islands the existence of
the foreign law as a question of fact, and it is then necessary to prove the alleged foreign
1. Validity of the Chinese Marriage
marriage by convincing evidence.

The theory advanced on behalf of the claimant Cheong Seng Gee was that Cheong Boo was
As a case directly in point is the leading one of Sy Joc Lieng vs. Encarnacion ([1910]), 16 Phil.,
married in the city of Amoy, China, during the second moon of the twenty-first year of the
137; [1913], 228 U.S., 335). Here, the courts of the Philippines and the Supreme Court of the
Emperor Quang Su, or, according to the modern count, on February 16, 1985, to a young lady
United States were called upon to decide, as to the conflicting claims to the estate of a Chinese
named Tan Dit. Witnesses were presented who testified to having been present at the marriage
merchant, between the descendants of an alleged Chinese marriage and the descendants of an
ceremony. There was also introduced in evidence a document in Chinese which in translation
alleged Philippine marriage. The Supreme Courts of the Philippine Islands and the United States
reads as follows:
united in holding that the Chinese marriage was not adequately proved. The legal rule was
stated by the United States Supreme Court to be this: A Philippine marriage, followed by forty
years of uninterrupted marital life, should not be impugned and discredited, after the death of the
One hundred years Your nephew, Tan Chao, respecfully answers the husband and administration of his estate, though an alleged prior Chinese marriage, "save upon
of life and health for venerable Chiong Ing, father of the bridegroom, proof so clear, strong, and unequivocal as to produce a moral conviction of the existence of such
both. accepting his offer of marriage, and let this document impediment." Another case in the same category is that of Son Cui vs. Guepangco ([1912], 22
serve as proof of the acceptance of said marriage Phil., 216).
which is to be celebrated during the merry season of
the flowers.
In the case at bar there is no competent testimony as to what the laws of China in the Province
of Amoy concerning marriage were in 1895. As in the Encarnacion case, there is lacking proof
I take advantage of this occasion to wish for your and so clear, strong, and unequivocal as to produce a moral conviction of the existence of the
the spouses much happiness, a long life, and prolific alleged prior Chinese marriage. Substitute twenty-three years for forty years and the two cases
issue, as noble and great as that which you brought are the same.
forth. I consider the marriage of your son Boo with my
sister Lit Chia as a mandate of God and I hope that
The lower court allowed the claimant, Cheong Seng Gee, the testamentary rights of an
they treat each other with great love and mutual
acknowledged natural child. This finding finds some support in Exhibit 3, the affidavit of Cheong
courtesy and that both they and their parents be very
Boo before the American Vice-Consul at Sandakan, British North Borneo. But we are not called
upon to make a pronouncement on the question, because the oppositor-appellant indicates
silent acquiescence by assigning no error.
Given during the second moon of the twenty-first year
of the reign of the Emperor Quang Su.
2. Validity of the Mohammedan Marriage

The biographical data relating to the Philippine odyssey of the Chinaman Cheong Boo is fairly
Cheong Boo is said to have remained in China for one year and four months after his marriage
complete. He appears to have first landed on Philippine soil sometime prior to the year 1896. At
during which time there was born to him and his wife a child named Cheong Seng Gee. Cheong
least, in the year las mentioned, we find him in Basilan, Philippine Islands. There he was married
Boo then left China for the Philippine Islands and sometime thereafter took to himself a
to the Mora Adong according to the ceremonies prescribed by the book on marriage of the
concubine Mora by whom he had two children. In 1910, Cheong Boo was followed to the
Koran, by the Mohammedan Iman (priest) Habubakar. That a marriage ceremony took place is
Philippines by Cheong Seng Gee who, as appears from documents presented in evidence, was
established by one of the parties to the marriage, the Mora Adong, by the Iman who solemnized
permitted to land in the Philippine Islands as the son of Cheong Boo. The deceased, however,
the marriage, and by other eyewitnesses, one of whom was the father of the bride, and another,
never returned to his native hearth and seems never to have corresponded with his Chinese wife
the chief of the rancheria, now a municipal councilor. The groom complied with Quranic law by
or to have had any further relations with her except once when he sent her P10.
giving to the bride a dowry of P250 in money and P250 in goods.

The trial judge found, as we have said, that the proof did not sustain the allegation of the
The religious rites began with the bride and groom seating themselves in the house of the father
claimant Cheong Seng Gee, that Cheong Boo had married in China. His Honor noted a strong
of the bride, Marahadja Sahibil. The Iman read from the Koran. Then the Iman asked the parents
inclination on the part of the Chinese witnesses, especially the brother of Cheong Boo, to protect
if they had any objection to the marriage. The marital act was consummated by the groom
the interests of the alleged son, Cheong Seng Gee, by overstepping the limits of truthfulness.
entering the woman's mosquito net.
His Honor also noted that reliable witnesses stated that in the year 1895, when Cheong Boo was
supposed to have been in China, he was in reality in Jolo, in the Philippine Islands. We are not
From the marriage day until the death of Cheong Boo, twenty-three years later, the Chinaman The trial judge in construing this provision of law said that he did not believe that the legislative
and the Mora Adong cohabited as husband and wife. To them were born five children, two of intention in promulgating it was to validate marriages celebrated between Mohammedans. To
whom, Payang and Rosalia, are living. Both in his relations with Mora Adong and with third quote the judge:
persons during his lifetime, Cheong Boo treated Adong as his lawful wife. He admitted this
relationship in several private and public documents. Thus, when different legal documents were
This provisions relates to marriages contracted by virtue of the provisions of the
executed, including decrees of registration, Cheong Boo stated that he was married to the Mora
Spanish law before revolutionary authorized to solemnized marriages, and it is not to
Adong while as late as 1918, he gave written consent to the marriage of his minor daughter,
be presumed that the legislator intended by this law to validate void marriages
celebrated during the Spanish sovereignty contrary to the laws which then governed.

Notwithstanding the insinuation of counsel for the Chinese appellant that the custom is prevalent
What authority there is for this statement, we cannot conceive. To our mind, nothing could be
among the Moros to favor in their testimony, a relative or friend, especially when they do not
clearer than the language used in section IX. Note for a moment the all embracing words found
swear on the Koran to tell the truth, it seems to us that proof could not be more convincing of the
in this section:
fact that a marriage was contracted by the Chinaman Cheong Boo and the Mora Adong,
according to the ceremonies of the Mohammedan religion.
"No marriage" — Could more inclusive words be found? "Heretofore solemnized" — Could any
other construction than that of retrospective force be given to this phrase? "Before any person
It is next incumbent upon us to approach the principal question which we announced in the very
professing to have authority therefor shall be invalid for want of such authority" — Could
beginning of this decision, namely, Are the marriages performed in the Philippines according to
stronger language than this be invoked to announce legislative intention? "Or on account of any
the rites of the Mohammedan religion valid? Three sections of the Marriage Law (General Order
informality, irregularity, or omission" — Could the legislative mind frame an idea which would
No. 68) must be taken into consideration.
more effectively guard the marriage relation against technicality? "If it was celebrated with the
belief of the parties, or either of them, that he had authority and that they have been lawfully
Section V of the Marriage Law provides that "Marriage may be solemnized by either a judge of married" — What was the purpose of the legislator here, if it was not to legalize the marriage, if it
any court inferior to the Supreme Court, justice of the peace, or priest or minister of the Gospel was celebrated by any person who thought that he had authority to perform the same, and if
of any denomination . . ." Counsel, failing to take account of the word "priest," and only either of the parties thought that they had been married? Is there any word or hint of any word
considering the phrase "minister of the Gospel of any denomination" would limit the meaning of which would restrict the curative provisions of section IX of the Marriage Law to Christian
this clause to ministers of the Christian religion. We believe this is a strained interpretation. marriages? By what system of mental gymnastics would it be possible to evolve from such
"Priest," according to the lexicographers, means one especially consecrated to the service of a precise language the curious idea that it was restricted to marriages performed under the
divinity and considered as the medium through whom worship, prayer, sacrifice, or other service Spanish law before the revolutionary authorities?
is to be offered to the being worshipped, and pardon, blessing, deliverance, etc., obtained by the
worshipper, as a priest of Baal or of Jehovah; a Buddhist priest. "Minister of the Gospel" means
In view of the importance of the question, we do not desire to stop here but would ascertain from
all clergymen of every denomination and faith. A "denomination" is a religious sect having a
other sources the meaning and scope of Section IX of General Order No. 68.
particular name. (Haggin vs. Haggin [1892], 35 Neb., 375; In re Reinhart, 9 O. Dec., 441;
Hale vs. Everett [1868], 53 N. H. 9.) A Mohammedan Iman is a "priest or minister of the Gospel,"
and Mohammedanism is a "denomination," within the meaning of the Marriage Law. The purpose of the government toward the Mohammedan population of the Philippines has, time
and again, been announced by treaty, organic law, statutory law, and executive proclamation.
The Treaty of Paris in its article X, provided that "The inhabitants of the territories over which
The following section of the Marriage Law, No. VI, provides that "No particular form for the
Spain relinquishes or cedes her sovereignty shall be secured Instructions to the Philippine
ceremony of marriage is required, but the parties must declare, in the presence of the person
Commission imposed on every branch of the Government of the Philippine Islands the inviolable
solemnizing the marriage, that they take each other as husband and wife." The law is quite
rule "that no law shall be made respecting an establishment of religion or prohibiting the free
correct in affirming that no precise ceremonial is indispensable requisite for the creation of the
exercise thereof, and that the free exercise and enjoyment of religious profession and worship,
marriage contract. The two essentials of a valid marriage are capacity and consent. The latter
without discrimination or preference, shall forever be allowed ... That no form of religion and no
element may be inferred from the ceremony performed, the acts of the parties, and habit or
minister of religion shall be forced upon any community or upon any citizen of the Islands; that,
repute. In this instance, there is no question of capacity. Nor do we think there can exist any
upon the other hand, no minister of religion shall be interfered with or molested in following his
doubt as to consent. While it is true that during the Mohammedan ceremony, the remarks of the
calling, and that the separation between state and church shall be real, entire, and absolute."
priest were addressed more to the elders than to the participants, it is likewise true that the
The notable state paper of President McKinley also enjoined the Commission, "to bear in mind
Chinaman and the Mora woman did in fact take each other to be husband and wife and did
that the Government which they are establishing is designed . . . for the happiness, peace, and
thereafter live together as husband and wife. (Travers vs. Reinhardt [1907], 205 U.S., 423.
prosperity of the people of the Philippine Islands" and that, therefore, "the measures adopted
should be made to conform to their customs, their habits, and even their prejudices. . . . The
It would be possible to leave out of view altogether the two sections of the Marriage Law which Philippine Bill and the Jones Law reproduced the main constitutional provisions establishing
have just been quoted and discussed. The particular portion of the law which, in our opinion, is religious toleration and equality.
controlling, is section IX, reading as follows: "No marriage heretofore solemnized before any
person professing to have authority therefor shall be invalid for want of such authority or on
Executive and legislative policy both under Spain and the United States followed in the same
account of any informality, irregularity, or omission, if it was celebrated with the belief of the
path. For instance, in the Treaty of April 30, 1851, entered into by the Captain General of the
parties, or either of them, that he had authority and that they have been lawfully married."
Philippines and the Sultan of Sulu, the Spanish Government guaranteed "with all solemnity to
the Sultan and other inhabitants of Sulu the free exercise of their religion, with which it will not
interfere in the slightest way, and it will also respect their customs." (See further Decree of the
Governor-General of January 14, 1881.) For instance, Act No. 2520 of the Philippine
Commission, section 3, provided that "Judges of the Court of First Instance and justices of the the marriage in question was a tribal marriage of the Kalingas, while in the Verzola case, the
peace deciding civil cases in which the parties are Mohammedans or pagans, when such action marriage had been performed during the Spanish regime by a lieutenant of the Guardia Civil. In
is deemed wise, may modify the application of the law of the Philippine Islands, except laws of neither case, in deciding as to whether or not the accused should be given the benefit of the so-
the United States applicable to the Philippine Islands, taking into account local laws and called unwritten law, was any consideration given to the provisions of section IX of General
customs. . . ." (See further Act No. 787, sec. 13 [ j]; Act No. 1283, sec. 6 [b]; Act No. 114 of the Order No. 68. We are free to admit that, if necessary, we would unhesitatingly revoke the
Legislative Council amended and approved by the Philippine Commission; doctrine announced in the two cases above mentioned.
Cacho vs. Government of the United States [1914], 28 Phil., 616.) Various responsible officials
have so oft announced the purpose of the Government not to interfere with the customs of the
We regard the evidence as producing a moral conviction of the existence of the Mohammedan
Moros, especially their religious customs, as to make quotation of the same superfluous.
marriage. We regard the provisions of section IX of the Marriage law as validating marriages
performed according to the rites of the Mohammedan religion.
The retrospective provisions of the Philippine Marriage Law undoubtedly were inspired by the
governmental policy in the United States, with regard to the marriages of the Indians, the
There are other questions presented in the various assignments of error which it is unnecessary
Quakers, and the Mormons. The rule as to Indians marriages is, that a marriage between two
to decide. In resume, we find the Chinese marriage not to be proved and that the Chinaman
Indians entered into according to the customs and laws of the people at a place where such
Cheong Seng Gee has only the rights of a natural child, and we find the Mohammedan marriage
customs and laws are in force, must be recognized as a valid marriage. The rule as to the
to be proved and to be valid, thus giving to the widow and the legitimate children of this union
Society of Quakers is, that they will be left to their own customs and that their marriages will be
the rights accruing to them under the law.
recognized although they use no solemnization. The rule as to Mormon marriages is that the
sealing ceremony entered into before a proper official by members of that Church competent to
contract marriage constitutes a valid marriage. Judgment is reversed in part, and the case shall be returned to the lower court for a partition of
the property in accordance with this decision, and for further proceedings in accordance with
law. Without special findings as to costs in this instance, it is so ordered.
The basis of human society throughout the civilized world is that of marriage. Marriage in this
jurisdiction is not only a civil contract, but, it is a new relation, an institution in the maintenance of
which the public is deeply interested. Consequently, every intendment of the law leans toward G.R. No. L-11759 March 16, 1917
legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the
absence of any counter-presumption or evidence special to the case, to be in fact married. The
CAYETANO LIM and MARCIANO LIM, petitioners-appellants,
reason is that such is the common order of society, and if the parties were not what they thus
hold themselves out as being, they would be living in the constant violation of decency and of vs.
law. A presumption established by our Code of Civil Procedure is "that a man and woman
deporting themselves as husband and wife have entered into a lawful contract of marriage.:"
(Sec. 334, No. 28.) Semper praesumitur pro matrimonio — Always presume marriage. (U. Williams, Ferrier and SyCip for appellants.
S. vs. Villafuerte and Rabano [1905], 4 Phil., 476; Son Cui vs. Guepangco, supra; Attorney-General Avanceña for appellee.
U.S. vs.Memoracion and Uri [1916], 34 Phil., 633; Teter vs. Teter [1884], 101 Ind., 129.)
Section IX of the Marriage Law is in the nature of a curative provision intended to safeguard
society by legalizing prior marriages. We can see no substantial reason for denying to the
legislative power the right to remove impediments to an effectual marriage. If the legislative The real question raised on this appeal is whether the Insular Collector of Customs may lawfully
power can declare what shall be valid marriages, it can render valid, marriages which, when they deny entry into the Philippine Islands to two children aged 8 and 14 years, respectively, under
took place, were against the law. Public policy should aid acts intended to validate marriages and by authority of the Chinese Immigration, Laws, it appearing that the children arrived at the
and should retard acts intended to invalidate marriages. (Coghsen vs. Stonington [1822], 4 Port of Manila accompanied by and in the custody of their mother, a Filipino woman; that they
Conn, 209; Baity vs. Cranfill [1884], 91 N. C., 273.) were born in China, out of lawful wedlock; and that their father was a Chinese person.

The courts can properly incline the scales of their decisions in favors of that solution which will It is contended, on behalf of the Insular Collector of Customs, that these children being Chinese
mot effectively promote the public policy. That is the true construction which will best carry persons are denied the right of entrance into the Philippine Islands under the express terms of
legislative intention into effect. And here the consequences, entailed in holding that the marriage the Chinese immigration laws. On the other hand, it is urged on behalf of the children that they
of the Mora Adong and the deceased Cheong Boo, in conformity with the Mohammedan religion are entitled to enter, regardless of the provisions of the Chinese immigration laws, since the
and Moro customs, was void, would be far reaching in disastrous result. The last census shows admitted facts, as it is said, disclose that they are citizens of the Philippine Islands; and for the
that there are at least one hundred fifty thousand Moros who have been married according to further reason, that their mother, who is entitled to their custody and charged with their
local custom. We then have it within our power either to nullify or to validate all of these maintenance and education, is clearly entitled to take up her residence in the Philippine Islands
marriages; either to make all of the children born of these unions bastards or to make them and should not be required, to that end, to abandon her minor children.
legitimate; either to proclaim immorality or to sanction morality; either to block or to advance
settled governmental policy. Our duty is a obvious as the law is plain. Without discussing or deciding any of the contentions of the parties as to the rights of citizenship
of these children, actual or inchoate, we are of opinion that by analogous reasoning to that upon
In moving toward our conclusion, we have not lost sight of the decisions of this court in the which the Supreme Court of the United States held that the wives and minor children of Chinese
cases of United States vs. Tubban ([1915]), 29 Phil., 434) and United States vs. Verzola ([1916, merchants domiciled in the United States may enter that country without certificates, these
33 Phil., 285). We do not, however, believe these decisions to be controlling. In the first place, children must be held to be entitled to enter the Philippine Islands with their mother, for the
these were criminal actions and two Justice dissented.. In the second place, in the Tubban case, purpose of taking up their residence here with her, it appearing that she is natural guardian,
entitled to their custody and charged with their maintenance and education. (U. S. vs. Gue Lim, In the case of the minor children, the same result must follow as in that of the wife. All
176 U. S. 459.) the reasons which favor the construction of the statute as exempting the wife from the
necessity of procuring a certificate apply with equal force to the case of minor children
of a member or members of the admitted classes. They come in by reason of their
In the case just cited the court said:
relationship to the father, and whether they accompany or follow him, a certificate is
not necessary in either case. When the fact is established to the satisfaction of the
While the literal construction of the section would require a certificate, as therein authorities that the person claiming to enter, either as wife or minor child, is in fact the
stated, from every Chinese person, other than a laborer, who should come into the wife or minor child of one of the members of the class mentioned in the treaty as
country, yet such a construction leads to what we think an absurd result, for it requires entitled to enter, them that person in entitled to admission without the certificate.
a certificate for a wife of a merchant, among others, in regard to whom its would be
impossible to give the particulars which the statute requires shall be stated in such
We are not advised of any provision of Chinese law which differentiates the status of infant
children, born out of lawful wedlock, from that of similar children under the laws in force in the
Philippine Islands. We assume, therefore, that in China as well as in the Philippine Islands such
"Nothing is better settled," says the present Chief Justice, in Lau Ow Bew vs. United children have the right to look to their mother for their maintenance and education, and that she
States (144 U. S., 59) "than that statutes should receive a sensible construction, such is entitled to their custody and control in fulfilling the obligations towards them which are
as will effectuate the legislative intention, and, if possible, so as to avoid and unjust or imposed upon her, not only by the natural impulses of love and affection, but also by the express
an absurd conclusion. mandate of the law. And it having been held on the highest authority that the general terms of
the Act were limited to those to whom Congress manifestly intended to apply them as set forth in
the foregoing opinion, and that "nothing is better settled than that statutes should receive a
The purposes of the sixth section, requiring the certificate, was not to prevent the
sensible construction, such as will effectuate the legislative intention, and, if possible, so as to
persons named in the second article of the treaty from coming into the country, but to avoid an unjust or an absurd conclusion," we are of opinion that the Chinese Immigration Laws
prevent Chinese laborers from entering under the guise of being one of the classes should not be construed so as to exclude infant children of a Filipino mother, born out of lawful
permitted by the treaty. It is the coming of Chinese laborers that the act is aimed
wedlock, seeking entrance to the Philippine Islands for the purpose of taking up their residence
against. with her in her native land.

It was said in the opinion in the Lau Ow Bew case, in speaking of the provisions that
It has been suggested that such a ruling opens the door to fraud and evasion, but we are not
the sole evidence permissible should be the certificate: "This rule of evidence was much impressed with the force of this suggestion, knowing as we do that the immigration
evidently prescribed by the amendment as a means of effectually preventing the authorities have been furnished by the law with peculiarly effective machinery for its
violation or evasion of the prohibition against the coming of Chinese laborers. It was enforcement, well calculated to defeat any attempt to make an unauthorized or improper use of
designed as a safeguard to prevent the unlawful entry of such laborers, under the so manifestly reasonable an exception from the literal construction and application of its general
pretense that they belong to the merchant class or to some other of the admitted provisions.

Some confusion seems to have arisen in the court below as to the precise nature and effect of
It was also held in that case that although the literal wording of the statute of 1884, the somewhat inartificial pleadings upon which these proceedings were submitted. The case
section six, would require a certificate in the case of a merchant already domiciled in appears to have been submitted upon an answer to an order to show cause why a writ
the United States and who had left the country for temporary purposes, animo of habeas corpus should not issue upon the petition filed on behalf of the infant children. In the
revertendi, yet its true and proper construction did not include his case, and the
form in which the answer is couched, there is much in the contention of the appellee that the trial
general terms used in the act were limited to those persons to whom Congress court should have treated the answer as in substance and effect a demurrer to the petition,
manifestly intended to apply them, which would be those who were about to come to admitting the truth of the facts alleged therein, but praying judgment as to whether it sets forth
the United States for the first time, and not to those Chinese merchants already
facts sufficient to constitute a cause of action and to justify the issuance of the writ. We are
domiciled in the United States who had gone to China for temporary purposes only, inclined to think, however, that the understanding of the parties and of the court below was that
with the intention of returning. The case of Wan Shing vs. United States (140 U. S., the answer should be treated rather as in the nature of a return to a writ of habeas corpus,
24), was referred to, and attention called to the fact that the appellant therein was not
accepting as true the allegations of the petition but maintaining the legality of the detention upon
a merchant but a laborer, who had acquired no commercial domicile in this county, the facts thus submitted. Without considering at this time whether in habeas corpus proceedings
and was clearly within the exception requiring him to procure and produce the the respondent may, without consent of court, demur to, instead of answering an order to show
certificate specified in the act. The rule was approved, and the differences in the two
cause why the writ should not issue, and without considering or deciding the course which
cases pointed out by the Chief Justice. should be pursued where a respondent attempts to file a demurrer to a petition for a writ of
habeas corpus in lieu of the return prescribed by the statute to the writ when actually issued; we
To hold that a certificate is required in this case is to decide that the woman cannot treat the answer to the order to show cause in the case at bar as we think the parties and the
come into this country at all, for it is not possible for her to comply with the act, court below understood it should be treated, that is to say, as in substance and effect the return
because she cannot in any event procure the certificate even by returning to China. which the Insular Collector desired to make to the writ of habeas corpus issued or assumed to
She must come in as the wife of her domiciled husband or not at all. The act was have been issued in response to the petition on behalf of the children held in custody by him.
never meant to accomplish the result of permanently excluding the wife under the
circumstances of this case, and we think that, properly and reasonably construed, it We conclude, therefore, that, it appearing that the respondent Collector of Customs is detaining
does not do so. If we hold that she is entitled to come in as the wife, because the true
the petitioners under an erroneous construction of the immigration laws, and it appearing from
construction of the treaty and the act permits it, there is no provision which makes the the facts disclosed by the administrative proceedings that these children are entitled to
certificate the only proof of the fact that she is such wife.
admission into the Philippine Islands, the order entered in the court below should be reversed, ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex
and in lieu thereof an order should be entered directing the discharge of these children from the contractus.12
custody of the Insular Collector of Customs, with the costs in both instances, de officio. So
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement
of Kitamura by a certain Y. Kotake as project manager of the BBRI Project. 13
G.R. No. 149177 November 23, 2007
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank14 that matters
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., connected with the performance of contracts are regulated by the law prevailing at the place of
LTD., Petitioners, performance,15 denied the motion to dismiss.16 The trial court subsequently denied petitioners'
vs. motion for reconsideration,17 prompting them to file with the appellate court, on August 14, 2000,
MINORU KITAMURA, Respondent. their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On
August 23, 2000, the CA resolved to dismiss the petition on procedural grounds—for lack of
statement of material dates and for insufficient verification and certification against forum
shopping.19 An Entry of Judgment was later issued by the appellate court on September 20,
Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein
assailing the April 18, 2001 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 60827, the material dates and attaching thereto the proper verification and certification. This second
and the July 25, 2001 Resolution2 denying the motion for reconsideration thereof. petition, which substantially raised the same issues as those in the first, was docketed as CA-
G.R. SP No. 60827.21
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese
consultancy firm providing technical and management support in the infrastructure projects of Ruling on the merits of the second petition, the appellate court rendered the assailed April 18,
foreign governments,3 entered into an Independent Contractor Agreement (ICA) with respondent 2001 Decision22finding no grave abuse of discretion in the trial court's denial of the motion to
Minoru Kitamura, a Japanese national permanently residing in the Philippines. 4 The agreement dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was not
provides that respondent was to extend professional services to Nippon for a year starting on applicable to the case, because nowhere in the pleadings was the validity of the written
April 1, 1999.5 Nippon then assigned respondent to work as the project manager of the Southern agreement put in issue. The CA thus declared that the trial court was correct in applying instead
Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy the principle of lex loci solutionis.23
contract with the Philippine Government.6
Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July
When the STAR Project was near completion, the Department of Public Works and Highways 25, 2001 Resolution.24
(DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the
detailed engineering and construction supervision of the Bongabon-Baler Road Improvement
Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant
(BBRI) Project.7 Respondent was named as the project manager in the contract's Appendix 3.1. 8
Petition for Review on Certiorari25 imputing the following errors to the appellate court:

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its
International Division, informed respondent that the company had no more intention of
automatically renewing his ICA. His services would be engaged by the company only up to the
substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry. 9
Threatened with impending unemployment, respondent, through his lawyer, requested a EXECUTED IN TOKYO, JAPAN.
negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted
that respondent’s contract was for a fixed term that had already expired, and refused to
negotiate for the renewal of the ICA.10
As he was not able to generate a positive response from the petitioners, respondent INTERNATIONAL LAWS.26
consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and
damages with the Regional Trial Court of Lipa City.11
The pivotal question that this Court is called upon to resolve is whether the subject matter
jurisdiction of Philippine courts in civil cases for specific performance and damages involving
For their part, petitioners, contending that the ICA had been perfected in Japan and executed by contracts executed outside the country by foreign nationals may be assailed on the principles
and between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They of lex loci celebrationis, lex contractus, the "state of the most significant relationship rule,"
asserted that the claim for improper pre-termination of respondent's ICA could only be heard and or forum non conveniens.
However, before ruling on this issue, we must first dispose of the procedural matters raised by the Ombudsman.41 Substantial compliance will not suffice in a matter that demands strict
the respondent. observance of the Rules.42 While technical rules of procedure are designed not to frustrate the
ends of justice, nonetheless, they are intended to effect the proper and orderly disposition of
cases and effectively prevent the clogging of court dockets. 43
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205
has already barred the filing of the second petition docketed as CA-G.R. SP No. 60827
(fundamentally raising the same issues as those in the first one) and the instant petition for Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question
review thereof. the trial court's denial of their motion to dismiss. It is a well-established rule that an order
denying a motion to dismiss is interlocutory, and cannot be the subject of the extraordinary
petition for certiorari or mandamus. The appropriate recourse is to file an answer and to
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's
interpose as defenses the objections raised in the motion, to proceed to trial, and, in case of an
defective certification of non-forum shopping, it was a dismissal without prejudice.27 The same
adverse decision, to elevate the entire case by appeal in due course.44 While there are
holds true in the CA's dismissal of the said case due to defects in the formal requirement of
recognized exceptions to this rule,45 petitioners' case does not fall among them.
verification28 and in the other requirement in Rule 46 of the Rules of Court on the statement of
the material dates.29 The dismissal being without prejudice, petitioners can re-file the petition, or
file a second petition attaching thereto the appropriate verification and certification—as they, in This brings us to the discussion of the substantive issue of the case.
fact did—and stating therein the material dates, within the prescribed period30 in Section 4, Rule
65 of the said Rules.31
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction
to hear and resolve the civil case for specific performance and damages filed by the respondent.
The dismissal of a case without prejudice signifies the absence of a decision on the merits and The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese
leaves the parties free to litigate the matter in a subsequent action as though the dismissed nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts
action had not been commenced. In other words, the termination of a case not on the merits have no substantial relationship to the parties46 following the [state of the] most significant
does not bar another action involving the same parties, on the same subject matter and theory.32 relationship rule in Private International Law.47

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and The Court notes that petitioners adopted an additional but different theory when they elevated
even if petitioners still indicated in the verification and certification of the the case to the appellate court. In the Motion to Dismiss48 filed with the trial court, petitioners
second certiorari petition that the first had already been dismissed on procedural never contended that the RTC is an inconvenient forum. They merely argued that the applicable
grounds,33 petitioners are no longer required by the Rules to indicate in their certification of non- law which will determine the validity or invalidity of respondent's claim is that of Japan, following
forum shopping in the instant petition for review of the second certiorari petition, the status of the the principles of lex loci celebrationis and lex contractus.49 While not abandoning this stance in
aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum their petition before the appellate court, petitioners on certiorari significantly invoked the defense
shopping about any event that will not constitute res judicata and litis pendentia, as in the of forum non conveniens.50 On petition for review before this Court, petitioners dropped their
present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire other arguments, maintained the forum non conveniens defense, and introduced their new
proceedings, considering that the evils sought to be prevented by the said certificate are no argument that the applicable principle is the [state of the] most significant relationship rule. 51
longer present.34
Be that as it may, this Court is not inclined to deny this petition merely on the basis of the
The Court also finds no merit in respondent's contention that petitioner Hasegawa is only change in theory, as explained in Philippine Ports Authority v. City of Iloilo.52 We only pointed out
authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and petitioners' inconstancy in their arguments to emphasize their incorrect assertion of conflict of
not the instant petition. True, the Authorization35 dated September 4, 2000, which is attached to laws principles.
the second certiorari petition and which is also attached to the instant petition for review, is
limited in scope—its wordings indicate that Hasegawa is given the authority to sign for and act
To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are
on behalf of the company only in the petition filed with the appellate court, and that authority
involved: jurisdiction, choice of law, and recognition and enforcement of judgments.
cannot extend to the instant petition for review.36 In a plethora of cases, however, this Court has
Corresponding to these phases are the following questions: (1) Where can or should litigation be
liberally applied the Rules or even suspended its application whenever a satisfactory explanation
initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be
and a subsequent fulfillment of the requirements have been made. 37 Given that petitioners
herein sufficiently explained their misgivings on this point and appended to their Reply38 an
updated Authorization39 for Hasegawa to act on behalf of the company in the instant petition, the
Court finds the same as sufficient compliance with the Rules. Analytically, jurisdiction and choice of law are two distinct concepts.54 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
However, the Court cannot extend the same liberal treatment to the defect in the verification and
is fair to both parties. The power to exercise jurisdiction does not automatically give a state
certification. As respondent pointed out, and to which we agree, Hasegawa is truly not
constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will
authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000
often coincide, the "minimum contacts" for one do not always provide the necessary "significant
Authorization and even the subsequent August 17, 2001 Authorization were issued only by
contacts" for the other.55 The question of whether the law of a state can be applied to a
Nippon's president and chief executive officer, not by the company's board of directors. In not a
transaction is different from the question of whether the courts of that state have jurisdiction to
few cases, we have ruled that corporate powers are exercised by the board of directors; thus, no
enter a judgment.56
person, not even its officers, can bind the corporation, in the absence of authority from the
board.40 Considering that Hasegawa verified and certified the petition only on his behalf and not
on behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office of
In this case, only the first phase is at issue—jurisdiction.1âwphi1 Jurisdiction, however, has the laws. While it may choose to recognize laws of foreign nations, the court is not limited by
various aspects. For a court to validly exercise its power to adjudicate a controversy, it must foreign sovereign law short of treaties or other formal agreements, even in matters regarding
have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over rights provided by foreign sovereigns.75
the subject matter, over the issues of the case and, in cases involving property, over the res or
the thing which is the subject of the litigation.57 In assailing the trial court's jurisdiction herein,
Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court
petitioners are actually referring to subject matter jurisdiction.
of its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1,
Rule 16 of the Rules of Court does not include it as a ground.77 Second, whether a suit should
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of
authority which establishes and organizes the court. It is given only by law and in the manner the particular case and is addressed to the sound discretion of the trial court.78 In this case, the
prescribed by law.58 It is further determined by the allegations of the complaint irrespective of RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this
whether the plaintiff is entitled to all or some of the claims asserted therein. 59 To succeed in its principle requires a factual determination; hence, this conflicts principle is more properly
motion for the dismissal of an action for lack of jurisdiction over the subject matter of the considered a matter of defense.79
claim,60 the movant must show that the court or tribunal cannot act on the matter submitted to it
because no law grants it the power to adjudicate the claims. 61
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case
filed by respondent and the grounds raised by petitioners to assail that jurisdiction are
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not inappropriate, the trial and appellate courts correctly denied the petitioners’ motion to dismiss.
properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case
No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation
WHEREFORE, premises considered, the petition for review on certiorari is DENIED.
and is properly cognizable by the RTC of Lipa City.62 What they rather raise as grounds to
question subject matter jurisdiction are the principles of lex loci celebrationis and lex
contractus, and the "state of the most significant relationship rule." SO ORDERED.

The Court finds the invocation of these grounds unsound. G.R. No. 103493 June 19, 1997

Lex loci celebrationis relates to the "law of the place of the ceremony"63 or the law of the place PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, and
where a contract is made.64 The doctrine of lex contractus or lex loci contractus means the "law ATHONA HOLDINGS, N.V., petitioners,
of the place where a contract is executed or to be performed." 65 It controls the nature, vs.
construction, and validity of the contract66 and it may pertain to the law voluntarily agreed upon THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO DAIC, VENTURA O. DUCAT,
by the parties or the law intended by them either expressly or implicitly.67 Under the "state of the PRECIOSO R. PERLAS, and WILLIAM H. CRAIG, respondents.
most significant relationship rule," to ascertain what state law to apply to a dispute, the court
should determine which state has the most substantial connection to the occurrence and the
parties. In a case involving a contract, the court should consider where the contract was made,
was negotiated, was to be performed, and the domicile, place of business, or place of
incorporation of the parties.68 This rule takes into account several contacts and evaluates them MENDOZA, J.:
according to their relative importance with respect to the particular issue to be resolved.69
This case presents for determination the conclusiveness of a foreign judgment upon the rights of
Since these three principles in conflict of laws make reference to the law applicable to a dispute, the parties under the same cause of action asserted in a case in our local court. Petitioners
they are rules proper for the second phase, the choice of law.70 They determine which state's brought this case in the Regional Trial Court of Makati, Branch 56, which, in view of the
law is to be applied in resolving the substantive issues of a conflicts problem. 71 Necessarily, as pendency at the time of the foreign action, dismissed Civil Case No. 16563 on the ground of litis
the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but pendentia, in addition to forum non conveniens. On appeal, the Court of Appeals affirmed.
also not yet called for. Hence this petition for review on certiorari.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they The facts are as follows:
have not yet pointed out any conflict between the laws of Japan and ours. Before determining
which law should apply, first there should exist a conflict of laws situation requiring the
application of the conflict of laws rules.72 Also, when the law of a foreign country is invoked to On January 15, 1983, private respondent Ventura O. Ducat obtained separate loans from
provide the proper rules for the solution of a case, the existence of such law must be pleaded petitioners Ayala International Finance Limited (hereafter called AYALA) 1 and Philsec
and proved.73 Investment Corporation (hereafter called PHILSEC) in the sum of US$2,500,000.00, secured by
shares of stock owned by Ducat with a market value of P14,088,995.00. In order to facilitate the
payment of the loans, private respondent 1488, Inc., through its president, private respondent
It should be noted that when a conflicts case, one involving a foreign element, is brought before Drago Daic, assumed Ducat's obligation under an Agreement, dated January 27, 1983, whereby
a court or administrative agency, there are three alternatives open to the latter in disposing of it: 1488, Inc. executed a Warranty Deed with Vendor's Lien by which it sold to petitioner Athona
(1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over Holdings, N.V. (hereafter called ATHONA) a parcel of land in Harris County, Texas, U.S.A., for
the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) US$2,807,209.02, while PHILSEC and AYALA extended a loan to ATHONA in the amount of
assume jurisdiction over the case and take into account or apply the law of some other State or US$2,500,000.00 as initial payment of the purchase price. The balance of US$307,209.02 was
States.74 The court’s power to hear cases and controversies is derived from the Constitution and
to be paid by means of a promissory note executed by ATHONA in favor of 1488, Inc. the litis pendentia in the U.S., under the principle in private international law of forum non
Subsequently, upon their receipt of the US$2,500,000.00 from 1488, Inc., PHILSEC and AYALA conveniens," even as it noted that Ducat was not a party in the U.S. case.
released Ducat from his indebtedness and delivered to 1488, Inc. all the shares of stock in their
possession belonging to Ducat.
A separate hearing was held with regard to 1488, Inc. and Daic's motion to dismiss. On March 9,
1988, the trial court 3 granted the motion to dismiss filed by 1488, Inc. and Daic on the ground
As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount of litis pendentia considering that
covered by the note became due and demandable. Accordingly, on October 17, 1985, private
respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and ATHONA in the United States for
the "main factual element" of the cause of action in this case which is the
payment of the balance of US$307,209.02 and for damages for breach of contract and for fraud
validity of the sale of real property in the United States between defendant
allegedly perpetrated by petitioners in misrepresenting the marketability of the shares of stock
1488 and plaintiff ATHONA is the subject matter of the pending case in the
delivered to 1488, Inc. under the Agreement. Originally instituted in the United States District
United States District Court which, under the doctrine of forum non
Court of Texas, 165th Judicial District, where it was docketed as Case No. 85-57746, the venue
conveniens, is the better (if not exclusive) forum to litigate matters needed
of the action was later transferred to the United States District Court for the Southern District of
to determine the assessment and/or fluctuations of the fair market value of
Texas, where 1488, Inc. filed an amended complaint, reiterating its allegations in the original
real estate situated in Houston, Texas, U.S.A. from the date of the
complaint. ATHONA filed an answer with counterclaim, impleading private respondents herein
transaction in 1983 up to the present and verily, . . . (emphasis by trial court)
as counterdefendants, for allegedly conspiring in selling the property at a price over its market
value. Private respondent Perlas, who had allegedly appraised the property, was later dropped
as counterdefendant. ATHONA sought the recovery of damages and excess payment allegedly The trial court also held itself without jurisdiction over 1488, Inc. and Daic because
made to 1488, Inc. and, in the alternative, the rescission of sale of the property. For their part, they were non-residents and the action was not an action in rem or quasi in rem, so
PHILSEC and AYALA filed a motion to dismiss on the ground of lack of jurisdiction over their that extraterritorial service of summons was ineffective. The trial court subsequently
person, but, as their motion was denied, they later filed a joint answer with counterclaim against lifted the writ of attachment it had earlier issued against the shares of stocks of 1488,
private respondents and Edgardo V. Guevarra, PHILSEC's own former president, for the Inc. and Daic.
rescission of the sale on the ground that the property had been overvalued. On March 13, 1990,
the United States District Court for the Southern District of Texas dismissed the counterclaim
against Edgardo V. Guevarra on the ground that it was "frivolous and [was] brought against him Petitioners appealed to the Court of Appeals, arguing that the trial court erred in applying the
principle of litis pendentia and forum non conveniens and in ruling that it had no jurisdiction over
simply to humiliate and embarrass him." For this reason, the U.S. court imposed so-called Rule
11 sanctions on PHILSEC and AYALA and ordered them to pay damages to Guevarra. the defendants, despite the previous attachment of shares of stocks belonging to 1488, Inc. and

On April 10, 1987, while Civil Case No. H-86-440 was pending in the United States, petitioners
filed a complaint "For Sum of Money with Damages and Writ of Preliminary Attachment" against On January 6, 1992, the Court of Appeals 4 affirmed the dismissal of Civil Case No. 16563
private respondents in the Regional Trial Court of Makati, where it was docketed as Civil Case against Ducat, 1488, Inc., and Daic on the ground of litis pendentia, thus:
No. 16563. The complaint reiterated the allegation of petitioners in their respective counterclaims
in Civil Action No. H-86-440 of the United States District Court of Southern Texas that private The plaintiffs in the U.S. court are 1488 Inc. and/or Drago Daic, while the
respondents committed fraud by selling the property at a price 400 percent more than its true defendants are Philsec, the Ayala International Finance Ltd. (BPI-IFL's
value of US$800,000.00. Petitioners claimed that, as a result of private respondents' fraudulent former name) and the Athona Holdings, NV. The case at bar involves the
misrepresentations, ATHONA, PHILSEC, and AYALA were induced to enter into the Agreement same parties. The transaction sued upon by the parties, in both cases is the
and to purchase the Houston property. Petitioners prayed that private respondents be ordered to Warranty Deed executed by and between Athona Holdings and 1488 Inc. In
return to ATHONA the excess payment of US$1,700,000.00 and to pay damages. On April 20, the U.S. case, breach of contract and the promissory note are sued upon by
1987, the trial court issued a writ of preliminary attachment against the real and personal 1488 Inc., which likewise alleges fraud employed by herein appellants, on
properties of private respondents. 2 the marketability of Ducat's securities given in exchange for the Texas
property. The recovery of a sum of money and damages, for fraud
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis purportedly committed by appellees, in overpricing the Texas land,
constitute the action before the Philippine court, which likewise stems from
pendentia, vis-a-vis Civil Action No. H-86-440 filed by 1488, Inc. and Daic in the U.S., (2) forum
non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state a cause of action. the same Warranty Deed.
Ducat contended that the alleged overpricing of the property prejudiced only petitioner ATHONA,
as buyer, but not PHILSEC and BPI-IFL which were not parties to the sale and whose only The Court of Appeals also held that Civil Case No. 16563 was an action in personam
participation was to extend financial accommodation to ATHONA under a separate loan for the recovery of a sum of money for alleged tortious acts, so that service of
agreement. On the other hand, private respondents 1488, Inc. and its president Daic filed a joint summons by publication did not vest the trial court with jurisdiction over 1488, Inc. and
"Special Appearance and Qualified Motion to Dismiss," contending that the action being in Drago Daic. The dismissal of Civil Case No. 16563 on the ground offorum non
personam, extraterritorial service of summons by publication was ineffectual and did not vest the conveniens was likewise affirmed by the Court of Appeals on the ground that the case
court with jurisdiction over 1488, Inc., which is a non-resident foreign corporation, and Daic, who can be better tried and decided by the U.S. court:
is a non-resident alien.
The U.S. case and the case at bar arose from only one main transaction,
On January 26, 1988, the trial court granted Ducat's motion to dismiss, stating that "the and involve foreign elements, to wit: 1) the property subject matter of the
evidentiary requirements of the controversy may be more suitably tried before the forum of sale is situated in Texas, U.S.A.; 2) the seller, 1488 Inc. is a non-resident
foreign corporation; 3) although the buyer, Athona Holdings, a foreign
corporation which does not claim to be doing business in the Philippines, is Sec. 50. Effect of foreign judgments. — The effect of a judgment of a
wholly owned by Philsec, a domestic corporation, Athona Holdings is also tribunal of a foreign country, having jurisdiction to pronounce the judgment
owned by BPI-IFL, also a foreign corporation; 4) the Warranty Deed was is as follows:
executed in Texas, U.S.A.
(a) In case of a judgment upon a specific thing, the judgment is conclusive
In their present appeal, petitioners contend that: upon the title to the thing;

1. THE DOCTRINE OF PENDENCY OF ANOTHER ACTION BETWEEN (b) In case of a judgment against a person, the judgment is presumptive
THE SAME PARTIES FOR THE SAME CAUSE (LITIS PENDENTIA) evidence of a right as between the parties and their successors in interest
RELIED UPON BY THE COURT OF APPEALS IN AFFIRMING THE TRIAL by a subsequent title; but the judgment may be repelled by evidence of a
COURT'S DISMISSAL OF THE CIVIL ACTION IS NOT APPLICABLE. want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact.
BY THE COURT OF APPEALS IN AFFIRMING THE DISMISSAL BY THE Thus, in the case of General Corporation of the Philippines v. Union Insurance Society of
TRIAL COURT OF THE CIVIL ACTION IS LIKEWISE NOT APPLICABLE. Canton, Ltd., 10 which private respondents invoke for claiming conclusive effect for the foreign
judgment in their favor, the foreign judgment was considered res judicata because this Court
found "from the evidence as well as from appellant's own pleadings" 11 that the foreign court did
not make a "clear mistake of law or fact" or that its judgment was void for want of jurisdiction or
because of fraud or collusion by the defendants. Trial had been previously held in the lower
court and only afterward was a decision rendered, declaring the judgment of the Supreme Court
of the State of Washington to have the effect of res judicata in the case before the lower court. In
the same vein, in Philippines International Shipping Corp. v. Court of Appeals, 12 this Court held
that the foreign judgment was valid and enforceable in the Philippines there being no showing
that it was vitiated by want of notice to the party, collusion, fraud or clear mistake of law or fact.
The prima facie presumption under the Rule had not been rebutted.

In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the
We will deal with these contentions in the order in which they are made.
judgment of the U.S. court as basis for declaring it res judicata or conclusive of the rights of
private respondents. The proceedings in the trial court were summary. Neither the trial court nor
First. It is important to note in connection with the first point that while the present case was the appellate court was even furnished copies of the pleadings in the U.S. court or apprised of
pending in the Court of Appeals, the United States District Court for the Southern District of the evidence presented thereat, to assure a proper determination of whether the issues then
Texas rendered judgment 5 in the case before it. The judgment, which was in favor of private being litigated in the U.S. court were exactly the issues raised in this case such that the
respondents, was affirmed on appeal by the Circuit Court of Appeals. 6Thus, the principal issue judgment that might be rendered would constitute res judicata. As the trial court stated in its
to be resolved in this case is whether Civil Case No. 16536 is barred by the judgment of the U.S. disputed order dated March 9, 1988.
On the plaintiff's claim in its Opposition that the causes of action of this case
Private respondents contend that for a foreign judgment to be pleaded as res judicata, a and the pending case in the United States are not identical, precisely the
judgment admitting the foreign decision is not necessary. On the other hand, petitioners argue Order of January 26, 1988 never found that the causes of action of this case
that the foreign judgment cannot be given the effect of res judicata without giving them an and the case pending before the USA Court, were identical. (emphasis
opportunity to impeach it on grounds stated in Rule 39, §50 of the Rules of Court, to wit: "want of added)
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact."
It was error therefore for the Court of Appeals to summarily rule that petitioners' action
Petitioners' contention is meritorious. While this Court has given the effect of res judicata to is barred by the principle of res judicata. Petitioners in fact questioned the jurisdiction
foreign judgments in several cases, 7 it was after the parties opposed to the judgment had been of the U.S. court over their persons, but their claim was brushed aside by both the trial
given ample opportunity to repel them on grounds allowed under the law. 8 It is not necessary for court and the Court of Appeals. 13
this purpose to initiate a separate action or proceeding for enforcement of the foreign judgment.
What is essential is that there is opportunity to challenge the foreign judgment, in order for the
Moreover, the Court notes that on April 22, 1992, 1488, Inc. and Daic filed a petition for the
court to properly determine its efficacy. This is because in this jurisdiction, with respect to actions
enforcement of judgment in the Regional Trial Court of Makati, where it was docketed as Civil
in personam, as distinguished from actions in rem, a foreign judgment merely constitutes prima
Case No. 92-1070 and assigned to Branch 134, although the proceedings were suspended
facie evidence of
because of the pendency of this case. To sustain the appellate court's ruling that the foreign
the justness of the claim of a party and, as such, is subject to proof to the contrary. 9 Rule 39,
judgment constitutes res judicata and is a bar to the claim of petitioners would effectively
§50 provides:
preclude petitioners from repelling the judgment in the case for enforcement. An absurdity could
then arise: a foreign judgment is not subject to challenge by the plaintiff against whom it is
invoked, if it is pleaded to resist a claim as in this case, but it may be opposed by the defendant
if the foreign judgment is sought to be enforced against him in a separate proceeding. This is SO ORDERED.
plainly untenable. It has been held therefore that:
G.R. No. 154830 June 8, 2007
[A] foreign judgment may not be enforced if it is not recognized in the
jurisdiction where affirmative relief is being sought. Hence, in the interest of
justice, the complaint should be considered as a petition for the recognition
J. KLEPZIG, petitioners,
of the Hongkong judgment under Section 50 (b), Rule 39 of the Rules of
Court in order that the defendant, private respondent herein, may present
ANTONIO D. TODARO, respondent.
evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of
fact and law, if applicable. 14
Accordingly, to insure the orderly administration of justice, this case and Civil Case No. 92-1070
should be consolidated. 15 After all, the two have been filed in the Regional Trial Court of Makati, AUSTRIA-MARTINEZ, J.:
albeit in different salas, this case being assigned to Branch 56 (Judge Fernando V. Gorospe),
while Civil Case No. 92-1070 is pending in Branch 134 of Judge Ignacio Capulong. In such
proceedings, petitioners should have the burden of impeaching the foreign judgment and only in Before the Court is a Petition for Review on Certiorari seeking to annul and set aside the
Decision1 of the Court of Appeals (CA) dated October 31, 2000 in CA-G.R. SP No. 54155 and its
the event they succeed in doing so may they proceed with their action against private
respondents. Resolution2 of August 21, 2002 denying petitioners’ Motion for Reconsideration.

The factual and procedural antecedents of the case are as follows:

Second. Nor is the trial court's refusal to take cognizance of the case justifiable under the
principle of forum non conveniens. First, a motion to dismiss is limited to the grounds under Rule
16, §1, which does not include forum non conveniens. 16 The propriety of dismissing a case On January 16, 1998, herein respondent Antonio D. Todaro (Todaro) filed with the Regional Trial
based on this principle requires a factual determination, hence, it is more properly considered a Court (RTC) of Makati City, a complaint for Sum of Money and Damages with Preliminary
matter of defense. Second, while it is within the discretion of the trial court to abstain from Attachment against Pioneer International Limited (PIL), Pioneer Concrete Philippines, Inc.
assuming jurisdiction on this ground, it should do so only after "vital facts are established, to (PCPI), Pioneer Philippines Holdings, Inc. (PPHI), John G. McDonald (McDonald) and Philip J.
determine whether special circumstances" require the court's desistance. 17 Klepzig (Klepzig).3

In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings In his complaint, Todaro alleged that PIL is a corporation duly organized and existing under the
filed by private respondents in connection with the motion to dismiss. It failed to consider that laws of Australia and is principally engaged in the ready-mix concrete and concrete aggregates
one of the plaintiffs (PHILSEC) is a domestic corporation and one of the defendants (Ventura business; PPHI is the company established by PIL to own and hold the stocks of its operating
Ducat) is a Filipino, and that it was the extinguishment of the latter's debt which was the object of company in the Philippines; PCPI is the company established by PIL to undertake its business of
the transaction under litigation. The trial court arbitrarily dismissed the case even after finding ready-mix concrete, concrete aggregates and quarrying operations in the Philippines; McDonald
that Ducat was not a party in the U.S. case. is the Chief Executive of the Hongkong office of PIL; and, Klepzig is the President and Managing
Director of PPHI and PCPI; Todaro has been the managing director of Betonval Readyconcrete,
Third. It was error we think for the Court of Appeals and the trial court to hold that jurisdiction Inc. (Betonval), a company engaged in pre-mixed concrete and concrete aggregate production;
over 1488, Inc. and Daic could not be obtained because this is an action in personam and he resigned from Betonval in February 1996; in May 1996, PIL contacted Todaro and asked him
if he was available to join them in connection with their intention to establish a ready-mix
summons were served by extraterritorial service. Rule 14, §17 on extraterritorial service provides
that service of summons on a non-resident defendant may be effected out of the Philippines by concrete plant and other related operations in the Philippines; Todaro informed PIL of his
leave of Court where, among others, "the property of the defendant has been attached within the availability and interest to join them; subsequently, PIL and Todaro came to an agreement
wherein the former consented to engage the services of the latter as a consultant for two to
Philippines." 18 It is not disputed that the properties, real and personal, of the private respondents
had been attached prior to service of summons under the Order of the trial court dated April 20, three months, after which, he would be employed as the manager of PIL's ready-mix concrete
1987. 19 operations should the company decide to invest in the Philippines; subsequently, PIL started its
operations in the Philippines; however, it refused to comply with its undertaking to employ
Todaro on a permanent basis.4
Fourth. As for the temporary restraining order issued by the Court on June 29, 1994, to suspend
the proceedings in Civil Case No. 92-1445 filed by Edgardo V. Guevarra to enforce so-called
Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss the complaint
Rule 11 sanctions imposed on the petitioners by the U.S. court, the Court finds that the judgment
sought to be enforced is severable from the main judgment under consideration in Civil Case on the grounds that the complaint states no cause of action, that the RTC has no jurisdiction
No. 16563. The separability of Guevara's claim is not only admitted by petitioners, 20 it appears over the subject matter of the complaint, as the same is within the jurisdiction of the NLRC, and
that the complaint should be dismissed on the basis of the doctrine of forum non conveniens.5
from the pleadings that petitioners only belatedly impleaded Guevarra as defendant in Civil Case
No. 16563. 21 Hence, the TRO should be lifted and Civil Case No. 92-1445 allowed to proceed.
In its Order dated January 4, 1999, the RTC of Makati, Branch 147, denied herein petitioners'
respective motions to dismiss.6 Herein petitioners, as defendants, filed an Urgent Omnibus
WHEREFORE, the decision of the Court of Appeals is REVERSED and Civil Case No. 16563 is
REMANDED to the Regional Trial Court of Makati for consolidation with Civil Case No. 92-1070 Motion7 for the reconsideration of the trial court's Order of January 4, 1999 but the trial court
and for further proceedings in accordance with this decision. The temporary restraining order denied it via its Order8 dated June 3, 1999.
issued on June 29, 1994 is hereby LIFTED.
On August 3, 1999, herein petitioners filed a Petition for Certiorari with the CA.9 On October 31, subsidiary corporations of the latter. Petitioners also aver that the annexes to respondent's
2000, the CA rendered its presently assailed Decision denying herein petitioners' Petition complaint show that the negotiations on the alleged employment contract took place between
for Certiorari. Petitioners filed a Motion for Reconsideration but the CA denied it in its Resolution respondent and PIL through its office in Hongkong. In other words, PCPI and PPHI were not
dated August 21, 2002. privy to the negotiations between PIL and respondent for the possible employment of the latter;
and under Article 1311 of the Civil Code, a contract is not binding upon and cannot be enforced
against one who was not a party to it even if he be aware of such contract and has acted with
Hence, herein Petition for Review on Certiorari based on the following assignment of errors:
knowledge thereof.

Petitioners further assert that petitioner Klepzig may not be held liable because he is simply
acting in his capacity as president of PCPI and PPHI and settled is the rule that an officer of a
THE COURT OF APPEALS' CONCLUSION THAT THE COMPLAINT STATES A corporation is not personally liable for acts done in the performance of his duties and within the
CAUSE OF ACTION AGAINST PETITIONERS IS WITHOUT ANY LEGAL BASIS. bounds of the authority conferred on him. Furthermore, petitioners argue that even if PCPI and
THE ANNEXES TO THE COMPLAINT CLEARLY BELIE THE ALLEGATION OF PPHI are held liable, respondent still has no cause of action against Klepzig because PCPI and
EXISTENCE OF AN EMPLOYMENT CONTRACT BETWEEN PRIVATE PPHI have personalities which are separate and distinct from those acting in their behalf, such

B. As to their second assigned error, petitioners contend that since herein respondent's claims for
actual, moral and exemplary damages are solely premised on the alleged breach of employment
contract, the present case should be considered as falling within the exclusive jurisdiction of the
DESPITE THE FACT THAT THE COMPLAINT INDUBITABLY SHOWS THAT IT IS With respect to the third assigned error, petitioners assert that the principle of forum non
AN ACTION FOR AN ALLEGED BREACH OF EMPLOYMENT CONTRACT, AND conveniens dictates that even where exercise of jurisidiction is authorized by law, courts may
HENCE, FALLS WITHIN THE EXLCUSIVE JURISDICTION OF THE NATIONAL refuse to entertain a case involving a foreign element where the matter can be better tried and
LABOR RELATIONS COMMISSION. decided elsewhere, either because the main aspects of the case transpired in a foreign
jurisdiction or the material witnesses have their residence there and the plaintiff sought the forum
merely to secure procedural advantage or to annoy or harass the defendant. Petitioners also
C argue that one of the factors in determining the most convenient forum for conflicts problem is
the power of the court to enforce its decision. Petitioners contend that since the majority of the
THE COURT OF APPEALS DISREGARDED AND FAILED TO CONSIDER THE defendants in the present case are not residents of the Philippines, they are not subject to
PRINCIPLE OF "FORUM NON CONVENIENS" AS A VALID GROUND FOR compulsory processes of the Philippine court handling the case for purposes of requiring their
DISMISSING A COMPLAINT.10 attendance during trial. Even assuming that they can be summoned, their appearance would
entail excessive costs. Petitioners further assert that there is no allegation in the complaint from
which one can conclude that the evidence to be presented during the trial can be better obtained
In their first assigned error, petitioners contend that there was no perfected employment contract in the Philippines. Moreover, the events which led to the present controversy occurred outside
between PIL and herein respondent. Petitioners assert that the annexes to respondent's the Philippines. Petitioners conclude that based on the foregoing factual circumstances, the case
complaint show that PIL's offer was for respondent to be employed as the manager only of its should be dismissed under the principle of forum non conveniens.
pre-mixed concrete operations and not as the company's managing director or CEO. Petitioners
argue that when respondent reiterated his intention to become the manager of PIL's overall
business venture in the Philippines, he, in effect did not accept PIL's offer of employment and In his Comment, respondent extensively quoted the assailed CA Decision maintaining that the
instead made a counter-offer, which, however, was not accepted by PIL. Petitioners also factual allegations in the complaint determine whether or not the complaint states a cause of
contend that under Article 1318 of the Civil Code, one of the requisites for a contract to be action.
perfected is the consent of the contracting parties; that under Article 1319 of the same Code,
consent is manifested by the meeting of the offer and the acceptance upon the thing and the
As to the question of jurisdiction, respondent contends that the complaint he filed was not based
cause which are to constitute the contract; that the offer must be certain and the acceptance on a contract of employment. Rather, it was based on petitioners' unwarranted breach of their
absolute; that a qualified acceptance constitutes a counter-offer. Petitioners assert that since PIL contractual obligation to employ respondent. This breach, respondent argues, gave rise to an
did not accept respondent's counter-offer, there never was any employment contract that was
action for damages which is cognizable by the regular courts.
perfected between them.

Even assuming that there was an employment contract, respondent asserts that for the NLRC to
Petitioners further argue that respondent's claim for damages based on the provisions of Articles
acquire jurisdiction, the claim for damages must have a reasonable causal connection with the
19 and 21 of the Civil Code is baseless because it was shown that there was no perfected employer-employee relationship of petitioners and respondent.
employment contract.

Respondent further argues that there is a perfected contract between him and petitioners as
Assuming, for the sake of argument, that PIL may be held liable for breach of employment they both agreed that the latter shall employ him to manage and operate their ready-mix
contract, petitioners contend that PCPI and PPHI, may not also be held liable because they are concrete operations in the Philippines. Even assuming that there was no perfected contract,
juridical entities with personalities which are separate and distinct from PIL, even if they are
respondent contends that his complaint alleges an alternative cause of action which is based on regarding the latter's possible employment. In fact, Annex "H"17 of the complaint shows that it
the provisions of Articles 19 and 21 of the Civil Code. was Klepzig who informed respondent that his company was no longer interested in employing
respondent. Hence, based on the allegations in the Complaint and the annexes attached
thereto, respondent has a cause of action against herein petitioners.
As to the applicability of the doctrine of forum non conveniens, respondent avers that the
question of whether a suit should be entertained or dismissed on the basis of the principle
of forum non conveniens depends largely upon the facts of the particular case and is addressed As to the question of jurisdiction, this Court has consistently held that where no employer-
to the sound discretion of the trial judge, who is in the best position to determine whether special employee relationship exists between the parties and no issue is involved which may be
circumstances require that the court desist from assuming jurisdiction over the suit. resolved by reference to the Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction.18 In the present case, no employer-
employee relationship exists between petitioners and respondent. In fact, in his complaint,
The petition lacks merit.
private respondent is not seeking any relief under the Labor Code, but seeks payment of
damages on account of petitioners' alleged breach of their obligation under their agreement to
Section 2, Rule 2 of the Rules of Court, as amended, defines a cause of action as the act or employ him. It is settled that an action for breach of contractual obligation is intrinsically a civil
omission by which a party violates a right of another. A cause of action exists if the following dispute.19 In the alternative, respondent seeks redress on the basis of the provisions of Articles
elements are present: (1) a right in favor of the plaintiff by whatever means and under whatever 19 and 21 of the Civil Code. Hence, it is clear that the present action is within the realm of civil
law it arises or is created; (2) an obligation on the part of the named defendant to respect or not law, and jurisdiction over it belongs to the regular courts.20
to violate such right; and, (3) an act or omission on the part of such defendant violative of the
right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for
With respect to the applicability of the principle of forum non conveniens in the present case, this
which the latter may maintain an action for recovery of damages. 11
Court's ruling in Bank of America NT & SA v. Court of Appeals21 is instructive, to wit:

In Hongkong and Shanghai Banking Corporation Limited v. Catalan,12 this Court held:
The doctrine of forum non conveniens, literally meaning ‘the forum is inconvenient’,
emerged in private international law to deter the practice of global forum shopping,
The elementary test for failure to state a cause of action is whether the complaint that is to prevent non-resident litigants from choosing the forum or place wherein to
alleges facts which if true would justify the relief demanded. Stated otherwise, may the bring their suit for malicious reasons, such as to secure procedural advantages, to
court render a valid judgment upon the facts alleged therein? The inquiry is into the annoy and harass the defendant, to avoid overcrowded dockets, or to select a more
sufficiency, not the veracity of the material allegations. If the allegations in the friendly venue. Under this doctrine, a court, in conflicts of law cases, may refuse
complaint furnish sufficient basis on which it can be maintained, it should not be impositions on its jurisdiction where it is not the most "convenient" or available forum
dismissed regardless of the defense that may be presented by the defendants. 13 and the parties are not precluded from seeking remedies elsewhere.

Moreover, the complaint does not have to establish or allege facts proving the existence of a Whether a suit should be entertained or dismissed on the basis of said doctrine
cause of action at the outset; this will have to be done at the trial on the merits of the case. 14 To depends largely upon the facts of the particular case and is addressed to the sound
sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim discretion of the trial court. In the case of Communication Materials and Design, Inc.
for relief does not exist, rather than that a claim has been defectively stated, or is ambiguous, vs. Court of Appeals, this Court held that "xxx [a] Philippine Court may assume
indefinite or uncertain.15 jurisdiction over the case if it chooses to do so; provided, that the following requisites
are met: (1) that the Philippine Court is one to which the parties may conveniently
resort to; (2) that the Philippine Court is in a position to make an intelligent decision as
Hence, in resolving whether or not the Complaint in the present case states a cause of action,
to the law and the facts; and, (3) that the Philippine Court has or is likely to have
the trial court correctly limited itself to examining the sufficiency of the allegations in the power to enforce its decision."
Complaint as well as the annexes thereto. It is proscribed from inquiring into the truth of the
allegations in the Complaint or the authenticity of any of the documents referred or attached to
the Complaint, since these are deemed hypothetically admitted by the respondent. Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of
Appeals, that the doctrine of forum non conveniens should not be used as a
ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court
This Court has reviewed respondent’s allegations in its Complaint. In a nutshell, respondent does not include said doctrine as a ground. This Court further ruled that while it
alleged that herein petitioners reneged on their contractual obligation to employ him on a is within the discretion of the trial court to abstain from assuming jurisdiction
permanent basis. This allegation is sufficient to constitute a cause of action for damages. on this ground, it should do so only after vital facts are established, to
determine whether special circumstances require the court’s desistance; and
The issue as to whether or not there was a perfected contract between petitioners and that the propriety of dismissing a case based on this principle of forum non
respondent is a matter which is not ripe for determination in the present case; rather, this issue conveniens requires a factual determination, hence it is more properly
must be taken up during trial, considering that its resolution would necessarily entail an considered a matter of defense.22 (emphasis supplied)
examination of the veracity of the allegations not only of herein respondent as plaintiff but also of
petitioners as defendants. In the present case, the factual circumstances cited by petitioners which would allegedly justify
the application of the doctrine of forum non conveniens are matters of defense, the merits of
The Court does not agree with petitioners' contention that they were not privy to the negotiations which should properly be threshed out during trial.
for respondent's possible employment. It is evident from paragraphs 24 to 28 of the
Complaint16 that, on various occasions, Klepzig conducted negotiations with respondent
WHEREFORE, the instant petition is DENIED and the assailed Decision and Resolution of the Sometime in 1982, defendant, hit by a recession, initiated cost-cutting measures.
Court of Appeals are AFFIRMED. Seventeen (17) expatriate captains in the Airbus fleet were found in excess of the
defendant's requirement (t.s.n., July 6, 1988. p. 11). Consequently, defendant
informed its expatriate pilots including plaintiff of the situation and advised them to
Costs against petitioners.
take advance leaves. (Exh. "15", p. 466, Rec.)

Realizing that the recession would not be for a short time, defendant decided to
terminate its excess personnel (t.s.n., July 6, 1988, p. 17). It did not, however,
G.R. No. 114776 February 2, 2000 immediately terminate it's A-300 pilots. It reviewed their qualifications for possible
promotion to the B-747 fleet. Among the 17 excess Airbus pilots reviewed, twelve
were found qualified. Unfortunately, plaintiff was not one of the twelve.
COURT OF APPEALS AND SINGAPORE AIRLINES LIMITED, respondents. On October 5, 1982, defendant informed plaintiff of his termination effective November
1, 1982 and that he will be paid three (3) months salary in lieu of three months notice
(Annex "I", pp. 41-42, Rec.). Because he could not uproot his family on such short
notice, plaintiff requested a three-month notice to afford him time to exhaust all
possible avenues for reconsideration and retention. Defendant gave only two (2)
This petition for review on certiorari under Rule 45 of the Rules of Court seeks to reverse the months notice and one (1) month salary. (t.s.n., Nov. 12, 1987. p. 25).
Decision of the Court of Appeals, dated October 29, 1993, in C.A. G.R. No. CV 34476, as well
as its Resolution dated February 28, 1994, which denied the motion for reconsideration.
Aggrieved, plaintiff on June 29, 1983, instituted a case for illegal dismissal before the
Labor Arbiter. Defendant moved to dismiss on jurisdiction grounds. Before said motion
The facts of the case as summarized by the respondent appellate court are as follows: was resolved, the complaint was withdrawn. Thereafter, plaintiff filed the instant case
for damages due to illegal termination of contract of services before the court a
quo (Complaint, pp. 1-10, Rec.).
Sometime in 1978, plaintiff [Menandro B. Laureano, herein petitioner], then Director of
Flight Operations and Chief Pilot of Air Manila, applied for employment with defendant
company [herein private respondent] through its Area Manager in Manila. Again, defendant on February 11, 1987 filed a motion to dismiss alleging inter alia: (1)
that the court has no jurisdiction over the subject matter of the case, and (2) that
Philippine courts have no jurisdiction over the instant case. Defendant contends that
On September 30, 1978, after the usual personal interview, defendant wrote to the complaint is for illegal dismissal together with a money claim arising out of and in
plaintiff, offering a contract of employment as an expatriate B-707 captain for an the course of plaintiffs employment "thus it is the Labor Arbiter and the NLRC who
original period of two (2) years commencing on January 21, 1978. Plaintiff accepted have the jurisdiction pursuant to Article 217 of the Labor Code" and that, since plaintiff
the offer and commenced working on January 20, 1979. After passing the six-month was employed in Singapore, all other aspects of his employment contract and/or
probation period, plaintiffs appointment was confirmed effective July 21, 1979. (Annex documents executed in Singapore. Thus, defendant postulates that Singapore laws
"B", p. 30, Rollo). should apply and courts thereat shall have jurisdiction. (pp. 50-69, Rec.).

On July 21, 1979, defendant offered plaintiff an extension of his two-year contract to In traversing defendant's arguments, plaintiff claimed that: (1) where the items
five (5) years effective January 21, 1979 to January 20, 1984 subject to the terms and demanded in a complaint are the natural consequences flowing from a breach of an
conditions set forth in the contract of employment, which the latter accepted (Annex obligation and not labor benefits, the case is intrinsically a civil dispute; (2) the case
"C" p. 31, Rec.). involves a question that is beyond the field of specialization of labor arbiters; and (3) if
the complaint is grounded not on the employee's dismissal per se but on the manner
During his service as B-707 captain, plaintiff on August 24, 1980, while in command of of said dismissal and the consequence thereof, the case falls under the jurisdiction of
a flight, committed a noise violation offense at the Zurich Airport, for which plaintiff the civil courts. (pp. 70-73, Rec.)
apologized.(Exh. "3", p. 307, Rec.).
On March 23, 1987, the court a quo denied defendant's motion to dismiss (pp. 82-
Sometime in 1980, plaintiff featured in a tail scraping incident wherein the tail of the 84, Ibid). The motion for reconsideration was likewise denied. (p. 95 ibid.)
aircraft scraped or touched the runway during landing. He was suspended for a few
days until he was investigated by board headed by Capt. Choy. He was reprimanded. On September 16, 1987, defendant filed its answer reiterating the grounds relied upon
in its motion to dismiss and further arguing that plaintiff is barred by laches, waiver,
On September 25, 1981, plaintiff was invited to take a course of A-300 conversion and estoppel from instituting the complaint and that he has no cause of action . (pp.
training at Aeroformacion, Toulouse, France at dependant's expense. Having 102-115)1
successfully completed and passed the training course, plaintiff was cleared on April
7, 1981, for solo duty as captain of the Airbus A-300 and subsequently appointed as On April 10, 1991, the trial court handed down its decision in favor of plaintiff. The dispositive
captain of the A-300 fleet commanding an Airbus A-300 in flights over Southeast Asia. portion of which reads:
(Annexes "D", "E" and "F", pp. 34-38, Rec.).
WHEREFORE, judgment is hereby rendered in favor of plaintiff Menandro Laureano At the outset, we find it necessary to state our concurrence on the assumption of jurisdiction by
and against defendant Singapore Airlines Limited, ordering defendant to pay plaintiff the Regional Trial Court of Manila, Branch 9. The trial court rightly ruled on the application of
the amounts of — Philippine law, thus:

SIN$396,104.00, or its equivalent in Philippine currency at the current rate of Neither can the Court determine whether the termination of the plaintiff is legal under
exchange at the time of payment, as and for unearned compensation with legal the Singapore Laws because of the defendant's failure to show which specific laws of
interest from the filing of the complaint until fully paid; Singapore Laws apply to this case. As substantially discussed in the preceding
paragraphs, the Philippine Courts do not take judicial notice of the laws of Singapore.
The defendant that claims the applicability of the Singapore Laws to this case has the
SIN$154,742.00, or its equivalent in Philippine currency at the current rate of
burden of proof. The defendant has failed to do so. Therefore, the Philippine law
exchange at the time of payment; and the further amounts of P67,500.00 as
should be applied.4
consequential damages with legal interest from the filing of the complaint until fully
Respondent Court of Appeals acquired jurisdiction when defendant filed its appeal before said
court.5 On this matter, respondent court was correct when it barred defendant-appellant below
P1,000,000.00 as and for moral damages; P1,000,000.00 as and for exemplary
from raising further the issue of jurisdiction.6
damages; and P100,000.00 as and for attorney's fees.

Petitioner now raises the issue of whether his action is one based on Article 1144 or on Article
Costs against defendant.
1146 of the Civil Code. According to him, his termination of employment effective November 1,
1982, was based on an employment contract which is under Article 1144, so his action should
SO ORDERED.2 prescribe in 10 years as provided for in said article. Thus he claims the ruling of the appellate
court based on Article 1146 where prescription is only four (4) years, is an error. The appellate
court concluded that the action for illegal dismissal originally filed before the Labor Arbiter on
Singapore Airlines timely appealed before the respondent court and raised the issues of
June 29, 1983, but which was withdrawn, then filed again in 1987 before the Regional Trial
jurisdiction, validity of termination, estoppel, and damages. Court, had already prescribed.

On October 29, 1993, the appellate court set aside the decision of the trial court, thus,
In our view, neither Article 11447 nor Article 11468 of the Civil Code is here pertinent. What is
applicable is Article 291 of the Labor Code, viz:
. . . In the instant case, the action for damages due to illegal termination was filed by
plaintiff-appellee only on January 8, 1987 or more than four (4) years after the
Art. 291. Money claims. — All money claims arising from employee-employer relations
effectivity date of his dismissal on November 1, 1982. Clearly, plaintiff-appellee's accruing during the effectivity of this Code shall be filed within three (3) years from the
action has already prescribed. time the cause of action accrued; otherwise they shall be forever barred.

WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. The xxx xxx xxx
complaint is hereby dismissed.

What rules on prescription should apply in cases like this one has long been decided by this
SO ORDERED.3 Court. In illegal dismissal, it is settled, that the ten-year prescriptive period fixed in Article 1144 of
the Civil Code may not be invoked by petitioners, for the Civil Code is a law of general
Petitioner's and Singapore Airlines' respective motions for reconsideration were denied. application, while the prescriptive period fixed in Article 292 of the Labor Code [now Article 291]
is a SPECIAL LAW applicable to claims arising from employee-employer relations.9
Now, before the Court, petitioner poses the following queries:
More recently in De Guzman vs. Court of Appeals,10 where the money claim was based on a
written contract, the Collective Bargaining Agreement, the Court held:
ARISING FROM AN INJURY TO THE RIGHTS OF THE PLAINTIFF WHICH PRESCRIBES IN . . . The language of Art. 291 of the Labor Code does not limit its application only to
FOUR YEARS UNDER ARTICLE 1146 OF THE NEW CIVIL CODE? "money claims specifically recoverable under said Code" but covers all money claims
arising from an employee-employer relations" (Citing Cadalin v. POEA Administrator,
238 SCRA 721, 764 [1994]; and Uy v. National Labor Relations Commission, 261

It should be noted further that Article 291 of the Labor Code is a special law applicable
3. CAN THERE BE VALID RETRENCHMENT IF AN EMPLOYER MERELY FAILS TO REALIZE to money claims arising from employer-employee relations; thus, it necessarily
THE EXPECTED PROFITS EVEN IF IT WERE NOT, IN FACT, INCURRING LOSSES? prevails over Article 1144 of the Civil Code, a general law. Basic is the rule in statutory
construction that "where two statutes are of equal theoretical application to a particular
case, the one designed therefore should prevail." (Citing Leveriza v. Intermediate flights, and reduction of the number of flying points for the A-300 fleet (t.s.n., July 6,
Appellate Court, 157 SCRA 282, 294.) Generalia specialibus non derogant.11 1988, pp. 17-18). As a result, defendant-appellant had to lay off A-300 pilots, including
plaintiff-appellee, which it found to be in excess of what is reasonably needed. 14
In the light of Article 291, aforecited, we agree with the appellate court's conclusion that
petitioner's action for damages due to illegal termination filed again on January 8, 1987 or more All these considered, we find sufficient factual and legal basis to conclude that petitioner's
than four (4) years after the effective date of his dismissal on November 1, 1982 has already termination from employment was for an authorized cause, for which he was given ample notice
prescribed. and opportunity to be heard, by respondent company. No error nor grave abuse of discretion,
therefore, could be attributed to respondent appellate court.1âwphi1.nêt
In the instant case, the action for damages due to illegal termination was filed by
plaintiff-appelle only on January 8, 1987 or more than four (4) years after the effectivity ACCORDINGLY, the instant petition is DISMISSED. The decision of the Court of Appeals in
date of his dismissal on November 1, 1982. Clearly, plaintiff-appellee's action has C.A. CV No. 34476 is AFFIRMED.
already prescribed.
We base our conclusion not on Article 1144 of the Civil Code but on which sets the prescription
period at three (3) years and which governs under this jurisdiction.
G.R. No. 119602 October 6, 2000

Petitioner claims that the running of the prescriptive period was tolled when he filed his
complaint for illegal dismissal before the Labor Arbiter of the National Labor Relations
Commission. However, this claim deserves scant consideration; it has no legal leg to stand on.
In Olympia International, Inc., vs., Court of Appeals, we held that "although the commencement
of a civil action stops the running of the statute of prescription or limitations, its dismissal or
voluntary abandonment by the plaintiff leaves in exactly the same position as though no action DECISION
had been commenced at all."12
Now, as to whether petitioner's separation from the company due to retrenchment was valid, the
appellate court found that the employment contract of petitioner allowed for pre-termination of
employment. We agree with the Court of Appeals when it said, This is a petition for review on certiorari seeking to set aside the decision of the Court of Appeals
which reversed the decision of the lower court in CA-G.R. CV No. 36821, entitled "Wildvalley
Shipping Co., Ltd., plaintiff-appellant, versus Philippine President Lines, Inc., defendant-
It is a settled rule that contracts have the force of law between the parties. From the appellant."
moment the same is perfected, the parties are bound not only to the fulfillment of what
has been expressly stipulated but also to all consequences which, according to their
The antecedent facts of the case are as follows:
nature, may be in keeping with good faith, usage and law. Thus, when plaintiff-
appellee accepted the offer of employment, he was bound by the terms and conditions
set forth in the contract, among others, the right of mutual termination by giving three Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President
months written notice or by payment of three months salary. Such provision is clear Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore.
and readily understandable, hence, there is no room for interpretation. Upon the completion of the loading and when the vessel was ready to leave port, Mr. Ezzar del
Valle Solarzano Vasquez, an official pilot of Venezuela, was designated by the harbour
xxx xxx xxx authorities in Puerto Ordaz to navigate the Philippine Roxas through the Orinoco River. 1He was
asked to pilot the said vessel on February 11, 19882 boarding it that night at 11:00 p.m.3

Further, plaintiff-appellee's contention that he is not bound by the provisions of the

Agreement, as he is not a signatory thereto, deserves no merit. It must be noted that The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge
when plaintiff-appellee's employment was confirmed, he applied for membership with together with the pilot (Vasquez), the vessel's third mate (then the officer on watch), and a
helmsman when the vessel left the port4 at 1:40 a.m. on February 12, 1988.5 Captain Colon left
the Singapore Airlines Limited (Pilots) Association, the signatory to the
aforementioned Agreement. As such, plaintiff-appellee is estopped from questioning the bridge when the vessel was under way.6
the legality of the said agreement or any proviso contained therein.13
The Philippine Roxas experienced some vibrations when it entered the San Roque Channel at
Moreover, the records of the present case clearly show that respondent court's decision is amply mile 172.7 The vessel proceeded on its way, with the pilot assuring the watch officer that the
supported by evidence and it did not err in its findings, including the reason for the retrenchment: vibration was a result of the shallowness of the channel. 8

When defendant-appellant was faced with the world-wide recession of the airline Between mile 158 and 157, the vessel again experienced some vibrations. 9 These occurred at
industry resulting in a slow down in the company's growth particularly in the regional 4:12 a.m.10 It was then that the watch officer called the master to the bridge. 11
operation (Asian Area) where the Airbus 300 operates. It had no choice but to adopt
cost cutting measures, such as cutting down services, number of frequencies of
The master (captain) checked the position of the vessel 12 and verified that it was in the centre of "11. That no security for the plaintiff's claim was given until after the Philippine Collier
the channel.13 He then went to confirm, or set down, the position of the vessel on the chart. 14 He was arrested; and
ordered Simplicio A. Monis, Chief Officer of the President Roxas, to check all the double bottom
"12. That a letter of guarantee, dated 12-May-88 was issued by the Steamship Mutual
Underwriters Ltd."18
At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River, 16 thus obstructing
the ingress and egress of vessels.
The trial court rendered its decision on October 16, 1991 in favor of the petitioner, Wildvalley
Shipping Co., Ltd. The dispositive portion thereof reads as follows:
As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner Wildvalley
Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that day.
"WHEREFORE, judgment is rendered for the plaintiff, ordering defendant Philippine President
Lines, Inc. to pay to the plaintiff the sum of U.S. $259,243.43, as actual and compensatory
Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of damages, and U.S. $162,031.53, as expenses incurred abroad for its foreign lawyers, plus
Manila, Branch III against Philippine President Lines, Inc. and Pioneer Insurance Company (the additional sum of U.S. $22,000.00, as and for attorney's fees of plaintiff's local lawyer, and to
underwriter/insurer of Philippine Roxas) for damages in the form of unearned profits, and interest pay the cost of this suit.
thereon amounting to US $400,000.00 plus attorney's fees, costs, and expenses of litigation.
The complaint against Pioneer Insurance Company was dismissed in an Order dated November
"Defendant's counterclaim is dismissed for lack of merit.
7, 1988.17

At the pre-trial conference, the parties agreed on the following facts:

Both parties appealed: the petitioner appealing the non-award of interest with the private
"1. The jurisdictional facts, as specified in their respective pleadings;
respondent questioning the decision on the merits of the case.

"2. That defendant PPL was the owner of the vessel Philippine Roxas at the time of
After the requisite pleadings had been filed, the Court of Appeals came out with its questioned
the incident;
decision dated June 14, 1994,20 the dispositive portion of which reads as follows:

"3. That defendant Pioneer Insurance was the insurance underwriter for defendant
"WHEREFORE, finding defendant-appellant's appeal to be meritorious, judgment is hereby
rendered reversing the Decision of the lower court. Plaintiff-appellant's Complaint is dismissed
and it is ordered to pay defendant-appellant the amount of Three Hundred Twenty-three
"4. That plaintiff Wildvalley Shipping Co., Inc. is the owner of the vessel Malandrinon, Thousand, Forty-two Pesos and Fifty-three Centavos (₱323,042.53) as and for attorney's fees
whose passage was obstructed by the vessel Philippine Roxas at Puerto Ordaz, plus cost of suit. Plaintiff-appellant's appeal is DISMISSED.
Venezuela, as specified in par. 4, page 2 of the complaint;
"5. That on February 12, 1988, while the Philippine Roxas was navigating the channel
at Puerto Ordaz, the said vessel grounded and as a result, obstructed navigation at
Petitioner filed a motion for reconsideration22 but the same was denied for lack of merit in the
the channel;
resolution dated March 29, 1995.23

"6. That the Orinoco River in Puerto Ordaz is a compulsory pilotage channel;
Hence, this petition.

"7. That at the time of the incident, the vessel, Philippine Roxas, was under the
The petitioner assigns the following errors to the court a quo:
command of the pilot Ezzar Solarzano, assigned by the government thereat, but
plaintiff claims that it is under the command of the master;
"8. The plaintiff filed a case in Middleburg, Holland which is related to the present
"9. The plaintiff caused the arrest of the Philippine Collier, a vessel owned by the
defendant PPL;
"10. The Orinoco River is 150 miles long and it takes approximately 12 hours to
navigate out of the said river;
3. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT was in force at the time the obligations of defendant to the plaintiff were incurred, i.e. on
THE "PHILIPPINE ROXAS" IS SEAWORTHY; November 5, 1928 and December 22, 1928. This evidence sufficiently established the fact that
the section in question was the law of the State of California on the above dates. A reading of
sections 300 and 301 of our Code of Civil Procedure will convince one that these sections do not
exclude the presentation of other competent evidence to prove the existence of a foreign law.
FROM PRIVATE RESPONDENT, AND WHOSE OBJECTION WAS INTERPOSED "`The foreign law is a matter of fact …You ask the witness what the law is; he may, from his
BELATEDLY ON APPEAL; recollection, or on producing and referring to books, say what it is.' (Lord Campbell concurring in
an opinion of Lord Chief Justice Denman in a well-known English case where a witness was
called upon to prove the Roman laws of marriage and was permitted to testify, though he
referred to a book containing the decrees of the Council of Trent as controlling, Jones on
Evidence, Second Edition, Volume 4, pages 3148-3152.) x x x."

We do not dispute the competency of Capt. Oscar Leon Monzon, the Assistant Harbor Master
and Chief of Pilots at Puerto Ordaz, Venezuela,28 to testify on the existence of the Reglamento
General de la Ley de Pilotaje (pilotage law of Venezuela)29 and the Reglamento Para la Zona de
Pilotaje No 1 del Orinoco (rules governing the navigation of the Orinoco River). Captain Monzon
has held the aforementioned posts for eight years.30 As such he is in charge of designating the
The petition is without merit. pilots for maneuvering and navigating the Orinoco River. He is also in charge of the documents
that come into the office of the harbour masters.31
The primary issue to be determined is whether or not Venezuelan law is applicable to the case
at bar. Nevertheless, we take note that these written laws were not proven in the manner provided by
Section 24 of Rule 132 of the Rules of Court.
It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are
not authorized to take judicial notice of them. Like any other fact, they must be alleged and The Reglamento General de la Ley de Pilotaje was published in the Gaceta Oficial32 of the
proved.24 Republic of Venezuela. A photocopy of the Gaceta Oficial was presented in evidence as an
official publication of the Republic of Venezuela.
A distinction is to be made as to the manner of proving a written and an unwritten law. The
former falls under Section 24, Rule 132 of the Rules of Court, as amended, the entire provision The Reglamento Para la Zona de Pilotaje No 1 del Orinoco is published in a book issued by
of which is quoted hereunder. Where the foreign law sought to be proved is "unwritten," the oral the Ministerio de Comunicaciones of Venezuela.33 Only a photocopy of the said rules was
testimony of expert witnesses is admissible, as are printed and published books of reports of likewise presented as evidence.
decisions of the courts of the country concerned if proved to be commonly admitted in such
Both of these documents are considered in Philippine jurisprudence to be public documents for
they are the written official acts, or records of the official acts of the sovereign authority, official
Section 24 of Rule 132 of the Rules of Court, as amended, provides: bodies and tribunals, and public officers of Venezuela.34

"Sec. 24. Proof of official record. -- The record of public documents referred to in paragraph (a) For a copy of a foreign public document to be admissible, the following requisites are mandatory:
of Section 19, when admissible for any purpose, may be evidenced by an official publication (1) It must be attested by the officer having legal custody of the records or by his deputy; and (2)
thereof or by a copy attested by the officer having the legal custody of the record, or by his It must be accompanied by a certificate by a secretary of the embassy or legation, consul
deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that general, consul, vice consular or consular agent or foreign service officer, and with the seal of
such officer has the custody. If the office in which the record is kept is in a foreign country, the his office.35 The latter requirement is not a mere technicality but is intended to justify the giving of
certificate may be made by a secretary of the embassy or legation, consul general, consul, vice full faith and credit to the genuineness of a document in a foreign country. 36
consul, or consular agent or by any officer in the foreign service of the Philippines stationed in
the foreign country in which the record is kept, and authenticated by the seal of his office."
It is not enough that the Gaceta Oficial, or a book published by the Ministerio de
(Underscoring supplied)
Comunicaciones of Venezuela, was presented as evidence with Captain Monzon attesting it. It is
also required by Section 24 of Rule 132 of the Rules of Court that a certificate that Captain
The court has interpreted Section 25 (now Section 24) to include competent evidence like the Monzon, who attested the documents, is the officer who had legal custody of those records
testimony of a witness to prove the existence of a written foreign law. 26 made by a secretary of the embassy or legation, consul general, consul, vice consul or consular
agent or by any officer in the foreign service of the Philippines stationed in Venezuela, and
authenticated by the seal of his office accompanying the copy of the public document. No such
In the noted case of Willamette Iron & Steel Works vs. Muzzal,27 it was held that: certificate could be found in the records of the case.

"… Mr. Arthur W. Bolton, an attorney-at-law of San Francisco, California, since the year 1918
under oath, quoted verbatim section 322 of the California Civil Code and stated that said section
With respect to proof of written laws, parol proof is objectionable, for the written law itself is the "Sec. 11. Control of Vessels and Liability for Damage. -- On compulsory pilotage grounds, the
best evidence. According to the weight of authority, when a foreign statute is involved, the best Harbor Pilot providing the service to a vessel shall be responsible for the damage caused to a
evidence rule requires that it be proved by a duly authenticated copy of the statute. 37 vessel or to life and property at ports due to his negligence or fault. He can be absolved from
liability if the accident is caused by force majeure or natural calamities provided he has
exercised prudence and extra diligence to prevent or minimize the damage.
At this juncture, we have to point out that the Venezuelan law was not pleaded before the lower
"The Master shall retain overall command of the vessel even on pilotage grounds whereby he
can countermand or overrule the order or command of the Harbor Pilot on board. In such event,
A foreign law is considered to be pleaded if there is an allegation in the pleading about the
any damage caused to a vessel or to life and property at ports by reason of the fault or
existence of the foreign law, its import and legal consequence on the event or transaction in
negligence of the Master shall be the responsibility and liability of the registered owner of the
vessel concerned without prejudice to recourse against said Master.

A review of the Complaint39 revealed that it was never alleged or invoked despite the fact that the
"Such liability of the owner or Master of the vessel or its pilots shall be determined by competent
grounding of the M/V Philippine Roxas occurred within the territorial jurisdiction of Venezuela.
authority in appropriate proceedings in the light of the facts and circumstances of each particular
We reiterate that under the rules of private international law, a foreign law must be properly
pleaded and proved as a fact. In the absence of pleading and proof, the laws of a foreign
"x x x
country, or state, will be presumed to be the same as our own local or domestic law and this is
known as processual presumption.40
"Sec. 32. Duties and Responsibilities of the Pilots or Pilots’ Association. -- The duties and
responsibilities of the Harbor Pilot shall be as follows:
Having cleared this point, we now proceed to a thorough study of the errors assigned by the
"x x x
Petitioner alleges that there was negligence on the part of the private respondent that would
warrant the award of damages. "f) A pilot shall be held responsible for the direction of a vessel from the time he assumes his
work as a pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his
responsibility shall cease at the moment the Master neglects or refuses to carry out his order."
There being no contractual obligation, the private respondent is obliged to give only the diligence
required of a good father of a family in accordance with the provisions of Article 1173 of the New
Civil Code, thus: The Code of Commerce likewise provides for the obligations expected of a captain of a vessel,
to wit:
"Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which
is required by the nature of the obligation and corresponds with the circumstances of the "Art. 612. The following obligations shall be inherent in the office of captain:
persons, of the time and of the place. When negligence shows bad faith, the provisions of
articles 1171 and 2201, paragraph 2, shall apply.
"x x x

"If the law or contract does not state the diligence which is to be observed in the performance,
"7. To be on deck on reaching land and to take command on entering and leaving ports, canals,
that which is expected of a good father of a family shall be required."
roadsteads, and rivers, unless there is a pilot on board discharging his duties. x x x."

The diligence of a good father of a family requires only that diligence which an ordinary prudent
The law is very explicit. The master remains the overall commander of the vessel even when
man would exercise with regard to his own property. This we have found private respondent to
there is a pilot on board. He remains in control of the ship as he can still perform the duties
have exercised when the vessel sailed only after the "main engine, machineries, and other
conferred upon him by law43 despite the presence of a pilot who is temporarily in charge of the
auxiliaries" were checked and found to be in good running condition;41 when the master left a
vessel. It is not required of him to be on the bridge while the vessel is being navigated by a pilot.
competent officer, the officer on watch on the bridge with a pilot who is experienced in navigating
the Orinoco River; when the master ordered the inspection of the vessel's double bottom tanks
when the vibrations occurred anew.42 However, Section 8 of PPA Administrative Order No. 03-85, provides:

The Philippine rules on pilotage, embodied in Philippine Ports Authority Administrative Order No. "Sec. 8. Compulsory Pilotage Service - For entering a harbor and anchoring thereat, or passing
03-85, otherwise known as the Rules and Regulations Governing Pilotage Services, the Conduct through rivers or straits within a pilotage district, as well as docking and undocking at any
of Pilots and Pilotage Fees in Philippine Ports enunciate the duties and responsibilities of a pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign
master of a vessel and its pilot, among other things. trade shall be under compulsory pilotage.

The pertinent provisions of the said administrative order governing these persons are quoted "xxx."
The Orinoco River being a compulsory pilotage channel necessitated the engaging of a pilot who liable for injuries occasioned by the negligence of the pilot; for in such a case the pilot
was presumed to be knowledgeable of every shoal, bank, deep and shallow ends of the river. In cannot be deemed properly the servant of the master or the owner, but is forced upon them, and
his deposition, pilot Ezzar Solarzano Vasquez testified that he is an official pilot in the Harbour at the maxim Qui facit per alium facit per se does not apply." (Underscoring supplied)
Port Ordaz, Venezuela,44 and that he had been a pilot for twelve (12) years.45 He also had
experience in navigating the waters of the Orinoco River.46
Anent the river passage plan, we find that, while there was none, 52 the voyage has been
sufficiently planned and monitored as shown by the following actions undertaken by the pilot,
The law does provide that the master can countermand or overrule the order or command of the Ezzar Solarzano Vasquez, to wit: contacting the radio marina via VHF for information regarding
harbor pilot on board. The master of the Philippine Roxas deemed it best not to order him (the the channel, river traffic,53 soundings of the river, depth of the river, bulletin on the buoys. 54 The
pilot) to stop the vessel,47 mayhap, because the latter had assured him that they were navigating officer on watch also monitored the voyage.55
normally before the grounding of the vessel.48Moreover, the pilot had admitted that on account of
his experience he was very familiar with the configuration of the river as well as the course
We, therefore, do not find the absence of a river passage plan to be the cause for the grounding
headings, and that he does not even refer to river charts when navigating the Orinoco River. 49
of the vessel.

Based on these declarations, it comes as no surprise to us that the master chose not to regain
The doctrine of res ipsa loquitur does not apply to the case at bar because the circumstances
control of the ship. Admitting his limited knowledge of the Orinoco River, Captain Colon relied on
surrounding the injury do not clearly indicate negligence on the part of the private respondent.
the knowledge and experience of pilot Vasquez to guide the vessel safely.
For the said doctrine to apply, the following conditions must be met: (1) the accident was of such
character as to warrant an inference that it would not have happened except for defendant's
"Licensed pilots, enjoying the emoluments of compulsory pilotage, are in a different class from negligence; (2) the accident must have been caused by an agency or instrumentality within the
ordinary employees, for they assume to have a skill and a knowledge of navigation in the exclusive management or control of the person charged with the negligence complained of; and
particular waters over which their licenses extend superior to that of the master; pilots are bound (3) the accident must not have been due to any voluntary action or contribution on the part of the
to use due diligence and reasonable care and skill. A pilot's ordinary skill is in proportion to the person injured.56
pilot's responsibilities, and implies a knowledge and observance of the usual rules of navigation,
acquaintance with the waters piloted in their ordinary condition, and nautical skill in avoiding all
As has already been held above, there was a temporary shift of control over the ship from the
known obstructions. The character of the skill and knowledge required of a pilot in charge of a
master of the vessel to the pilot on a compulsory pilotage channel. Thus, two of the requisites
vessel on the rivers of a country is very different from that which enables a navigator to carry a
necessary for the doctrine to apply, i.e., negligence and control, to render the respondent liable,
vessel safely in the ocean. On the ocean, a knowledge of the rules of navigation, with charts that
are absent.
disclose the places of hidden rocks, dangerous shores, or other dangers of the way, are the
main elements of a pilot's knowledge and skill. But the pilot of a river vessel, like the harbor pilot,
is selected for the individual's personal knowledge of the topography through which the vessel is As to the claim that the ship was unseaworthy, we hold that it is not.
The Lloyd’s Register of Shipping confirmed the vessel’s seaworthiness in a Confirmation of
We find that the grounding of the vessel is attributable to the pilot. When the vibrations were first Class issued on February 16, 1988 by finding that "the above named ship (Philippine Roxas)
felt the watch officer asked him what was going on, and pilot Vasquez replied that "(they) were in maintained the class "+100A1 Strengthened for Ore Cargoes, Nos. 2 and 8 Holds may be empty
the middle of the channel and that the vibration was as (sic) a result of the shallowness of the (CC) and +LMC" from 31/12/87 up until the time of casualty on or about 12/2/88." 57 The same
channel."51 would not have been issued had not the vessel been built according to the standards set by
Pilot Ezzar Solarzano Vasquez was assigned to pilot the vessel Philippine Roxas as well as
other vessels on the Orinoco River due to his knowledge of the same. In his experience as a Samuel Lim, a marine surveyor, at Lloyd's Register of Shipping testified thus:
pilot, he should have been aware of the portions which are shallow and which are not. His failure
to determine the depth of the said river and his decision to plod on his set course, in all
probability, caused damage to the vessel. Thus, we hold him as negligent and liable for its "Q Now, in your opinion, as a surveyor, did top side tank have any bearing at all to the
grounding. seaworthiness of the vessel?

In the case of Homer Ramsdell Transportation Company vs. La Compagnie Generale "A Well, judging on this particular vessel, and also basing on the class record of the vessel,
Transatlantique, 182 U.S. 406, it was held that: wherein recommendations were made on the top side tank, and it was given sufficient time to be
repaired, it means that the vessel is fit to travel even with those defects on the ship.

"x x x The master of a ship, and the owner also, is liable for any injury done by the negligence of
the crew employed in the ship. The same doctrine will apply to the case of a pilot employed by "COURT
the master or owner, by whose negligence any injury happens to a third person or his property:
as, for example, by a collision with another ship, occasioned by his negligence. And it will make What do you mean by that? You explain. The vessel is fit to travel even with defects? Is that
no difference in the case that the pilot, if any is employed, is required to be a licensed pilot; what you mean? Explain.
provided the master is at liberty to take a pilot, or not, at his pleasure, for in such a case the
master acts voluntarily, although he is necessarily required to select from a particular class. On
the other hand, if it is compulsive upon the master to take a pilot, and, a fortiori, if he is "WITNESS
bound to do so under penalty, then, and in such case, neither he nor the owner will be
"A Yes, your Honor. Because the class society which register (sic) is the third party looking into Article 2208 of the New Civil Code provides that:
the condition of the vessel and as far as their record states, the vessel was class or maintained,
and she is fit to travel during that voyage."
"Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:
"x x x
"x x x
"(11) In any other case where the court deems it just and equitable that attorney's fees and
Before we proceed to other matter, will you kindly tell us what is (sic) the 'class +100A1 expenses of litigation should be recovered.
Strengthened for Ore Cargoes', mean?
"x x x"
Due to the unfounded filing of this case, the private respondent was unjustifiably forced to
"A Plus 100A1 means that the vessel was built according to Lloyd's rules and she is capable of litigate, thus the award of attorney’s fees was proper.
carrying ore bulk cargoes, but she is particularly capable of carrying Ore Cargoes with No. 2 and
No. 8 holds empty.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is DENIED and the decision of the
Court of Appeals in CA G.R. CV No. 36821 is AFFIRMED.
"x x x

The vessel is classed, meaning?

G.R. No. 101538 June 23, 1992
"A Meaning she is fit to travel, your Honor, or seaworthy."58
AUGUSTO BENEDICTO SANTOS III, represented by his father and legal guardian,
It is not required that the vessel must be perfect. To be seaworthy, a ship must be reasonably fit Augusto Benedicto Santos, petitioner,
to perform the services, and to encounter the ordinary perils of the voyage, contemplated by the vs.
parties to the policy.59 NORTHWEST ORIENT AIRLINES and COURT OF APPEALS, respondents.

As further evidence that the vessel was seaworthy, we quote the deposition of pilot Vasquez:

"Q Was there any instance when your orders or directions were not complied with because of CRUZ, J.:
the inability of the vessel to do so?
This case involves the Proper interpretation of Article 28(1) of the Warsaw Convention, reading
"A No. as follows:

"Q. Was the vessel able to respond to all your commands and orders? Art. 28. (1) An action for damage must be brought at the option of the
plaintiff, in the territory of one of the High Contracting Parties, either before
the court of the domicile of the carrier or of his principal place of business,
"A. The vessel was navigating normally."60
or where he has a place of business through which the contract has been
made, or before the court at the place of destination.
Eduardo P. Mata, Second Engineer of the Philippine Roxas submitted an accident report
wherein he stated that on February 11, 1988, he checked and prepared the main engine,
The petitioner is a minor and a resident of the Philippines. Private respondent Northwest Orient
machineries and all other auxiliaries and found them all to be in good running condition and
Airlines (NOA) is a foreign corporation with principal office in Minnesota, U.S.A. and licensed to
ready for maneuvering. That same day the main engine, bridge and engine telegraph and
do business and maintain a branch office in the Philippines.
steering gear motor were also tested.61 Engineer Mata also prepared the fuel for consumption for
maneuvering and checked the engine generators.62
On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco.
U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled departure
Finally, we find the award of attorney’s fee justified.1âwphi1
date from Tokyo was December 20, 1986. No date was specified for his return to San
Francisco. 1
On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco on November 9, 1950. The Convention became applicable to the Philippines on February 9,
airport for his scheduled departure to Manila. Despite a previous confirmation and re- 1951. On September 23, 1955, President Ramon Magsaysay issued Proclamation No. 201,
confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. He declaring our formal adherence thereto. "to the end that the same and every article and clause
therefore had to be wait-listed. thereof may be observed and fulfilled in good faith by the Republic of the Philippines and the
citizens thereof." 5
On March 12, 1987, the petitioner sued NOA for damages in the Regional Trial Court of Makati.
On April 13, 1987, NOA moved to dismiss the complaint on the ground of lack of jurisdiction. The Convention is thus a treaty commitment voluntarily assumed by the Philippine government
Citing the above-quoted article, it contended that the complaint could be instituted only in the and, as such, has the force and effect of law in this country.
territory of one of the High Contracting Parties, before:
The petitioner contends that Article 28(1) cannot be applied in the present case because it is
1. the court of the domicile of the carrier; unconstitutional. He argues that there is no substantial distinction between a person who
purchases a ticket in Manila and a person who purchases his ticket in San Francisco. The
classification of the places in which actions for damages may be brought is arbitrary and
2. the court of its principal place of business;
irrational and thus violates the due process and equal protection clauses.

3. the court where it has a place of business through which the contract had
It is well-settled that courts will assume jurisdiction over a constitutional question only if it is
been made;
shown that the essential requisites of a judicial inquiry into such a question are first satisfied.
Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible
4. the court of the place of destination. of judicial determination; the constitutional question must have been opportunely raised by the
proper party; and the resolution of the question is unavoidably necessary to the decision of the
case itself. 6
The private respondent contended that the Philippines was not its domicile nor was this its
principal place of business. Neither was the petitioner's ticket issued in this country nor was his
destination Manila but San Francisco in the United States. Courts generally avoid having to decide a constitutional question. This attitude is based on the
doctrine of separation of powers, which enjoins upon the departments of the government a
becoming respect for each other's acts.
On February 1, 1988, the lower court granted the motion and dismissed the case. 2 The
petitioner appealed to the Court of Appeals, which affirmed the decision of the lower court. 3 On
June 26, 1991, the petitioner filed a motion for reconsideration, but the same was denied. 4 The The treaty which is the subject matter of this petition was a joint legislative-executive act. The
petitioner then came to this Court, raising substantially the same issues it submitted in the Court presumption is that it was first carefully studied and determined to be constitutional before it was
of Appeals. adopted and given the force of law in this country.

The assignment of errors may be grouped into two major issues, viz: The petitioner's allegations are not convincing enough to overcome this presumption.
Apparently, the Convention considered the four places designated in Article 28 the most
convenient forums for the litigation of any claim that may arise between the airline and its
(1) the constitutionality of Article 28(1) of the Warsaw Convention; and passenger, as distinguished from all other places. At any rate, we agree with the respondent
court that this case can be decided on other grounds without the necessity of resolving the
(2) the jurisdiction of Philippine courts over the case. constitutional issue.

The petitioner also invokes Article 24 of the Civil Code on the protection of minors. B. The petitioner claims that the lower court erred in not ruling that Art. 28(1)
of the Warsaw Convention is inapplicable because of a fundamental change
in the circumstances that served as its basis.

The petitioner goes at great lengths to show that the provisions in the Convention were intended
THE ISSUE OF CONSTITUTIONALITY to protect airline companies under "the conditions prevailing then and which have long ceased to
exist." He argues that in view of the significant developments in the airline industry through the
A. The petitioner claims that the lower court erred in not ruling that Article years, the treaty has become irrelevant. Hence, to the extent that it has lost its basis for
28(1) of the Warsaw Convention violates the constitutional guarantees of approval, it has become unconstitutional.
due process and equal protection.
The petitioner is invoking the doctrine of rebus sic stantibus. According to Jessup, "this doctrine
The Republic of the Philippines is a party to the Convention for the Unification of Certain Rules constitutes an attempt to formulate a legal principle which would justify non-performance of a
Relating to International Transportation by Air, otherwise known as the Warsaw Convention. It treaty obligation if the conditions with relation to which the parties contracted have changed so
took effect on February 13, 1933. The Convention was concurred in by the Senate, through its materially and so unexpectedly as to create a situation in which the exaction of performance
Resolution No. 19, on May 16, 1950. The Philippine instrument of accession was signed by would be unreasonable." 7 The key element of this doctrine is the vital change in the condition of
President Elpidio Quirino on October 13, 1950, and was deposited with the Polish government the contracting parties that they could not have foreseen at the time the treaty was concluded.
The Court notes in this connection the following observation made in Day v. Trans World of his rights. He would consequently be deprived of this vital guaranty as embodied in the Bill of
Airlines, Inc.: 8 Rights.

The Warsaw drafters wished to create a system of liability rules that would Obviously, the constitutional guaranty of access to courts refers only to courts with appropriate
cover all the hazards of air travel . . . The Warsaw delegates knew that, in jurisdiction as defined by law. It does not mean that a person can go to any court for redress of
the years to come, civil aviation would change in ways that they could not his grievances regardless of the nature or value of his claim. If the petitioner is barred from filing
foresee. They wished to design a system of air law that would be both his complaint before our courts, it is because they are not vested with the appropriate jurisdiction
durable and flexible enough to keep pace with these changes . . . The ever- under the Warsaw Convention, which is part of the law of our land.
changing needs of the system of civil aviation can be served within the
framework they created.

It is true that at the time the Warsaw Convention was drafted, the airline industry was still in its
infancy. However, that circumstance alone is not sufficient justification for the rejection of the
treaty at this time. The changes recited by the petitioner were, realistically, not entirely
unforeseen although they were expected in a general sense only. In fact, the Convention itself, A. The petitioner claims that the lower court erred in not ruling that Article
anticipating such developments, contains the following significant provision: 28(1) of the Warsaw Convention is a rule merely of venue and was waived
by defendant when it did not move to dismiss on the ground of improper
Article 41. Any High Contracting Party shall be entitled not earlier than two
years after the coming into force of this convention to call for the assembling
of a new international conference in order to consider any improvements By its own terms, the Convention applies to all international transportation of persons performed
which may be made in this convention. To this end, it will communicate with by aircraft for hire.
the Government of the French Republic which will take the necessary
measures to make preparations for such conference.
International transportation is defined in paragraph (2) of Article 1 as follows:

But the more important consideration is that the treaty has not been rejected by the Philippine
(2) For the purposes of this convention, the expression "international
government. The doctrine of rebus sic stantibus does not operate automatically to render the
treaty inoperative. There is a necessity for a formal act of rejection, usually made by the head of transportation" shall mean any transportation in which, according to the
State, with a statement of the reasons why compliance with the treaty is no longer required. contract made by the parties, the place of departure and the place of
destination, whether or not there be a break in the transportation or a
transshipment, are situated [either] within the territories of two High
In lieu thereof, the treaty may be denounced even without an expressed justification for this Contracting Parties . . .
action. Such denunciation is authorized under its Article 39, viz:
Whether the transportation is "international" is determined by the contract of the parties, which in
Article 39. (1) Any one of the High Contracting Parties may denounce this the case of passengers is the ticket. When the contract of carriage provides for the
convention by a notification addressed to the Government of the Republic of transportation of the passenger between certain designated terminals "within the territories of
Poland, which shall at once inform the Government of each of the High two High Contracting Parties," the provisions of the Convention automatically apply and
Contracting Parties. exclusively govern the rights and liabilities of the airline and its passenger.

(2) Denunciation shall take effect six months after the notification of Since the flight involved in the case at bar is international, the same being from the United
denunciation, and shall operate only as regards the party which shall have States to the Philippines and back to the United States, it is subject to the provisions of the
proceeded to denunciation. Warsaw Convention, including Article 28(1), which enumerates the four places where an action
for damages may be brought.
Obviously. rejection of the treaty, whether on the ground of rebus sic stantibus or pursuant to
Article 39, is not a function of the courts but of the other branches of government. This is a Whether Article 28(1) refers to jurisdiction or only to venue is a question over which authorities
political act. The conclusion and renunciation of treaties is the prerogative of the political are sharply divided. While the petitioner cites several cases holding that Article 28(1) refers to
departments and may not be usurped by the judiciary. The courts are concerned only with the venue rather than jurisdiction, 9 there are later cases cited by the private respondent supporting
interpretation and application of laws and treaties in force and not with their wisdom or efficacy. the conclusion that the provision is jurisdictional. 10

C. The petitioner claims that the lower court erred in ruling that the plaintiff Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by consent
must sue in the United States, because this would deny him the right to or waiver upon d court which otherwise would have no jurisdiction over the subject-matter of an
access to our courts. action; but the venue of an action as fixed by statute may be changed by the consent of the
parties and an objection that the plaintiff brought his suit in the wrong county may be waived by
the failure of the defendant to make a timely objection. In either case, the court may render a
The petitioner alleges that the expenses and difficulties he will incur in filing a suit in the United
States would constitute a constructive denial of his right to access to our courts for the protection
valid judgment. Rules as to jurisdiction can never be left to the consent or agreement of the not a jurisdictional provision, dismissal of the case was still in order. The respondent court was
parties, whether or not a prohibition exists against their alteration. 11 correct in affirming the ruling of the trial court on this matter, thus:

A number of reasons tends to support the characterization of Article 28(1) as a jurisdiction and Santos' claim that NOA waived venue as a ground of its motion to dismiss is
not a venue provision. First, the wording of Article 32, which indicates the places where the not correct. True it is that NOA averred in its MOTION TO DISMISS that the
action for damages "must" be brought, underscores the mandatory nature of Article 28(1). ground thereof is "the Court has no subject matter jurisdiction to entertain
Second, this characterization is consistent with one of the objectives of the Convention, which is the Complaint" which SANTOS considers as equivalent to "lack of
to "regulate in a uniform manner the conditions of international transportation by air." Third, the jurisdiction over the subject matter . . ." However, the gist of NOA's
Convention does not contain any provision prescribing rules of jurisdiction other than Article argument in its motion is that the Philippines is not the proper place where
28(1), which means that the phrase "rules as to jurisdiction" used in Article 32 must refer only to SANTOS could file the action — meaning that the venue of the action is
Article 28(1). In fact, the last sentence of Article 32 specifically deals with the exclusive improperly laid. Even assuming then that the specified ground of the motion
enumeration in Article 28(1) as "jurisdictions," which, as such, cannot be left to the will of the is erroneous, the fact is the proper ground of the motion — improper venue
parties regardless of the time when the damage occurred. — has been discussed therein.

This issue was analyzed in the leading case of Smith v. Canadian Pacific Airways, Waiver cannot be lightly inferred. In case of doubt, it must be resolved in favor of non-waiver if
Ltd., 12 where it was held: there are special circumstances justifying this conclusion, as in the petition at bar. As we
observed in Javier vs. Intermediate Court of Appeals: 13
. . . Of more, but still incomplete, assistance is the wording of Article 28(2),
especially when considered in the light of Article 32. Article 28(2) provides Legally, of course, the lack of proper venue was deemed waived by the
that "questions of procedure shall be governed by the law of the court to petitioners when they failed to invoke it in their original motion to dismiss.
which the case is submitted" (Emphasis supplied). Section (2) thus may be Even so, the motivation of the private respondent should have been taken
read to leave for domestic decision questions regarding the suitability and into account by both the trial judge and the respondent court in arriving at
location of a particular Warsaw Convention case. their decisions.

In other words, where the matter is governed by the Warsaw Convention, jurisdiction takes on a The petitioner also invokes KLM Royal Dutch Airlines v. RTC, 14 a decision of our Court of
dual concept. Jurisdiction in the international sense must be established in accordance with Appeals, where it was held that Article 28(1) is a venue provision. However, the private
Article 28(1) of the Warsaw Convention, following which the jurisdiction of a particular court must respondent avers that this was in effect reversed by the case of Aranas v. United
be established pursuant to the applicable domestic law. Only after the question of which court Airlines, 15 where the same court held that Article 28(1) is a jurisdictional provision. Neither of
has jurisdiction is determined will the issue of venue be taken up. This second question shall be these cases is binding on this Court, of course, nor was either of them appealed to us.
governed by the law of the court to which the case is submitted. Nevertheless, we here express our own preference for the later case of Aranas insofar as its
pronouncements on jurisdiction conform to the judgment we now make in this petition.
The petitioner submits that since Article 32 states that the parties are precluded "before the
damages occurred" from amending the rules of Article 28(1) as to the place where the action B. The petitioner claims that the lower court erred in not ruling that under
may be brought, it would follow that the Warsaw Convention was not intended to preclude them Article 28(1) of the Warsaw Convention, this case was properly filed in the
from doing so "after the damages occurred." Philippines, because Manila was the destination of the plaintiff.

Article 32 provides: The Petitioner contends that the facts of this case are analogous to those in Aanestad v. Air
Canada. 16 In that case, Mrs. Silverberg purchased a round-trip ticket from Montreal to Los
Angeles and back to Montreal. The date and time of departure were specified but not of the
Art. 32. Any clause contained in the contract and all special agreements
return flight. The plane crashed while on route from Montreal to Los Angeles, killing Mrs.
entered into before the damage occurred by which the parties purport to
Silverberg. Her administratrix filed an action for damages against Air Canada in the U.S. District
infringe the rules laid down by this convention, whether by deciding the law
Court of California. The defendant moved to dismiss for lack of jurisdiction but the motion was
to be applied, or by altering the rules as to jurisdiction, shall be null and
denied thus:
void. Nevertheless for the transportation of goods, arbitration clauses shall
be allowed, subject to this convention, if the arbitration is to take place
within one of the jurisdictions referred to in the first paragraph of Article 28. . . . It is evident that the contract entered into between Air Canada and Mrs.
Silverberg as evidenced by the ticket booklets and the Flight Coupon No. 1,
was a contract for Air Canada to carry Mrs. Silverberg to Los Angeles on a
His point is that since the requirements of Article 28(1) can be waived "after the damages (shall
certain flight, a certain time and a certain class, but that the time for her to
have) occurred," the article should be regarded as possessing the character of a "venue" and
return remained completely in her power. Coupon No. 2 was only a
not of a "jurisdiction" provision. Hence, in moving to dismiss on the ground of lack of jurisdiction,
continuing offer by Air Canada to give her a ticket to return to Montreal
the private respondent has waived improper venue as a ground to dismiss.
between certain dates. . . .

The foregoing examination of Article 28(1) in relation to Article 32 does not support this
The only conclusion that can be reached then, is that "the place of
conclusion. In any event, we agree that even granting arguendo that Article 28(1) is a venue and
destination" as used in the Warsaw Convention is considered by both the
Canadian C.T.C. and the United States C.A.B. to describe at least two The contract is a single undivided operation, beginning with the place of departure and ending
"places of destination," viz., the "place of destination" of a particularflight with the ultimate destination. The use of the singular in this expression indicates the
either an "outward destination" from the "point of origin" or from the understanding of the parties to the Convention that every contract of carriage has one place of
"outward point of destination" to any place in Canada. departure and one place of destination. An intermediate place where the carriage may be broken
is not regarded as a "place of destination."
Thus the place of destination under Art. 28 and Art. 1 of the Warsaw
Convention of the flight on which Mrs. Silverberg was killed, was Los C. The petitioner claims that the lower court erred in not ruling that under
Angeles according to the ticket, which was the contract between the parties Art. 28(1) of the Warsaw Convention, this case was properly filed in the
and the suit is properly filed in this Court which has jurisdiction. Philippines because the defendant has its domicile in the Philippines.

The Petitioner avers that the present case falls squarely under the above ruling because the The petitioner argues that the Warsaw Convention was originally written in French and that in
date and time of his return flight to San Francisco were, as in the Aanestad case, also left open. interpreting its provisions, American courts have taken the broad view that the French legal
Consequently, Manila and not San Francisco should be considered the petitioner's destination. meaning must govern. 18 In French, he says, the "domicile" of the carrier means every place
where it has a branch office.
The private respondent for its part invokes the ruling in Butz v. British Airways, 17 where the
United States District Court (Eastern District of Pennsylvania) said: The private respondent notes, however, that in Compagnie Nationale Air France vs.
Giliberto, 19 it was held:
. . . Although the authorities which addressed this precise issue are not
extensive, both the cases and the commentators are almost unanimous in The plaintiffs' first contention is that Air France is domiciled in the United
concluding that the "place of destination" referred to in the Warsaw States. They say that the domicile of a corporation includes any country
Convention "in a trip consisting of several parts . . . is the ultimate where the airline carries on its business on "a regular and substantial basis,"
destination that is accorded treaty jurisdiction." . . . and that the United States qualifies under such definition. The meaning of
domicile cannot, however, be so extended. The domicile of a corporation is
customarily regarded as the place where it is incorporated, and the courts
But apart from that distinguishing feature, I cannot agree with the Court's
have given the meaning to the term as it is used in article 28(1) of the
analysis in Aanestad; whether the return portion of the ticket is
Convention. (See Smith v. Canadian Pacific Airways, Ltd. (2d Cir. 1971),
characterized as an option or a contract, the carrier was legally bound to
452 F2d 798, 802; Nudo v. Societe Anonyme Belge d' Exploitation de la
transport the passenger back to the place of origin within the prescribed
Navigation Aerienne Sabena Belgian World Airlines (E.D. pa. 1962). 207 F.
time and. the passenger for her part agreed to pay the fare and, in fact, did
Supp, 191; Karfunkel v. Compagnie Nationale Air France (S.D.N.Y. 1977),
pay the fare. Thus there was mutuality of obligation and a binding contract
427 F. Suppl. 971, 974). Moreover, the structure of article 28(1), viewed as
of carriage, The fact that the passenger could forego her rights under the
a whole, is also incompatible with the plaintiffs' claim. The article, in stating
contract does not make it any less a binding contract. Certainly, if the
that places of business are among the bases of the jurisdiction, sets out two
parties did not contemplate the return leg of the journey, the passenger
places where an action for damages may be brought; the country where the
would not have paid for it and the carrier would not have issued a round trip
carrier's principal place of business is located, and the country in which it
has a place of business through which the particular contract in question
was made, that is, where the ticket was bought, Adopting the plaintiffs'
We agree with the latter case. The place of destination, within the meaning of the Warsaw theory would at a minimum blur these carefully drawn distinctions by
Convention, is determined by the terms of the contract of carriage or, specifically in this case, creating a third intermediate category. It would obviously introduce
the ticket between the passenger and the carrier. Examination of the petitioner's ticket shows uncertainty into litigation under the article because of the necessity of
that his ultimate destination is San Francisco. Although the date of the return flight was left open, having to determine, and without standards or criteria, whether the amount
the contract of carriage between the parties indicates that NOA was bound to transport the of business done by a carrier in a particular country was "regular" and
petitioner to San Francisco from Manila. Manila should therefore be considered merely an "substantial." The plaintiff's request to adopt this basis of jurisdiction is in
agreed stopping place and not the destination. effect a request to create a new jurisdictional standard for the Convention.

The petitioner submits that the Butz case could not have overruled the Aanestad case because Furthermore, it was argued in another case 20 that:
these decisions are from different jurisdictions. But that is neither here nor there. In fact, neither
of these cases is controlling on this Court. If we have preferred the Butz case, it is because,
. . . In arriving at an interpretation of a treaty whose sole official language is
exercising our own freedom of choice, we have decided that it represents the better, and correct,
French, are we bound to apply French law? . . . We think this question and
interpretation of Article 28(1).
the underlying choice of law issue warrant some discussion
. . . We do not think this statement can be regarded as a conclusion that
Article 1(2) also draws a distinction between a "destination" and an "agreed stopping place." It is internal French law is to be "applied" in the choice of law sense, to
the "destination" and not an "agreed stopping place" that controls for purposes of ascertaining determine the meaning and scope of the Convention's terms. Of course,
jurisdiction under the Convention. French legal usage must be considered in arriving at an accurate English
translation of the French. But when an accurate English translation is made
and agreed upon, as here, the inquiry into meaning does not then revert to a
quest for a past or present French law to be "applied" for revelation of the The private respondent correctly contends that the allegation of willful misconduct resulting in a
proper scope of the terms. It does not follow from the fact that the treaty is tort is insufficient to exclude the case from the comprehension of the Warsaw Convention. The
written in French that in interpreting it, we are forever chained to French law, petitioner has apparently misconstrued the import of Article 25(l) of the Convention, which reads
either as it existed when the treaty was written or in its present state of as follows:
development. There is no suggestion in the treaty that French law was
intended to govern the meaning of Warsaw's terms, nor have we found any
Art. 25 (1). The carrier shall not be entitled to avail himself of the provisions
indication to this effect in its legislative history or from our study of its
of this Convention which exclude or limit his liability. if the damage is caused
application and interpretation by other courts. Indeed, analysis of the cases
by his willful misconduct or by such default on his part as, in accordance
indicates that the courts, in interpreting and applying the Warsaw
with the law of the court to which the case is submitted, is considered to be
Convention, have, not considered themselves bound to apply French law
equivalent to willful misconduct.
simply because the Convention is written in French. . . .

It is understood under this article that the court called upon to determine the applicability of the
We agree with these rulings.
limitation provision must first be vested with the appropriate jurisdiction. Article 28(1) is the
provision in the Convention which defines that jurisdiction. Article 22 23 merely fixes the
Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be monetary ceiling for the liability of the carrier in cases covered by the Convention. If the carrier is
filed under Article 28(1). By specifying the three other places, to wit, the principal place of indeed guilty of willful misconduct, it can avail itself of the limitations set forth in this article. But
business of the carrier, its place of business where the contract was made, and the place of this can be done only if the action has first been commenced properly under the rules on
destination, the article clearly meant that these three other places were not comprehended in the jurisdiction set forth in Article 28(1).
term "domicile."
D. The petitioner claims that the lower court erred in not ruling that Art. 28(1)
of the Warsaw Convention does not apply to actions based on tort.

The petitioner alleges that the gravamen of the complaint is that private respondent acted
The petitioner calls our attention to Article 24 of the Civil Code, which states:
arbitrarily and in bad faith, discriminated against the petitioner, and committed a willful
misconduct because it canceled his confirmed reservation and gave his reserved seat to
someone who had no better right to it. In short. the private respondent committed a tort. Art. 24. In all contractual property or other relations, when one of the parties
is at a disadvantage on account of his moral dependence, ignorance,
indigence, mental weakness, tender age or other handicap, the courts must
Such allegation, he submits, removes the present case from the coverage of the Warsaw
be vigilant for his protection.
Convention. He argues that in at least two American cases, 21 it was held that Article 28(1) of
the Warsaw Convention does not apply if the action is based on tort.
Application of this article to the present case is misplaced. The above provision assumes that
the court is vested with jurisdiction to rule in favor of the disadvantaged minor, As already
This position is negated by Husserl v. Swiss Air Transport Company, 22 where the article in
explained, such jurisdiction is absent in the case at bar.
question was interpreted thus:

. . . Assuming for the present that plaintiff's claim is "covered" by Article 17,
Article 24 clearly excludes any relief not provided for in the Convention as
modified by the Montreal Agreement. It does not, however, limit the kind of A number of countries have signified their concern over the problem of citizens being denied
cause of action on which the relief may be founded; rather it provides that access to their own courts because of the restrictive provision of Article 28(1) of the Warsaw
any action based on the injuries specified in Article 17 "however Convention. Among these is the United States, which has proposed an amendment that would
founded," i.e., regardless of the type of action on which relief is founded, enable the passenger to sue in his own domicile if the carrier does business in that jurisdiction.
can only be brought subject to the conditions and limitations established by The reason for this proposal is explained thus:
the Warsaw System. Presumably, the reason for the use of the phrase
"however founded," in two-fold: to accommodate all of the multifarious
bases on which a claim might be founded in different countries, whether In the event a US citizen temporarily residing abroad purchases a Rome to
New York to Rome ticket on a foreign air carrier which is generally subject
under code law or common law, whether under contract or tort, etc.; and to
include all bases on which a claim seeking relief for an injury might be to the jurisdiction of the US, Article 28 would prevent that person from suing
founded in any one country. In other words, if the injury occurs as described the carrier in the US in a "Warsaw Case" even though such a suit could be
brought in the absence of the Convention.
in Article 17, any relief available is subject to the conditions and limitations
established by the Warsaw System, regardless of the particular cause of
action which forms the basis on which a plaintiff could seek The proposal was incorporated in the Guatemala Protocol amending the Warsaw Convention,
relief . . . which was adopted at Guatemala City on March 8,
1971. 24 But it is still ineffective because it has not yet been ratified by the required minimum
number of contracting parties. Pending such ratification, the petitioner will still have to file his by registered mail to appellant at its address in St. Louis, Missouri. Appellant appeared specially
complaint only in any of the four places designated by Article 28(1) of the Warsaw Convention. before the office of unemployment and moved to set aside the order and notice of assessment on
the ground that the service upon appellant's salesman was not proper service upon appellant;
that appellant was not a corporation of the State of Washington and was not doing business
The proposed amendment bolsters the ruling of this Court that a citizen does not necessarily within the state; that it had no agent within the state upon whom service could be made; and
have the right to sue in his own courts simply because the defendant airline has a place of that appellant is not an employer and does not furnish employment within the meaning of the
business in his country. statute.

The Court can only sympathize with the petitioner, who must prosecute his claims in the United The motion was heard on evidence and a stipulation of facts by the appeal tribunal which denied
States rather than in his own country at least inconvenience. But we are unable to grant him the the motion[326 U.S. 310, 313] and ruled that respondent Commissioner was entitled to recover
relief he seeks because we are limited by the provisions of the Warsaw Convention which the unpaid contributions. That action was affirmed by the Commissioner; both the Superior
continues to bind us. It may not be amiss to observe at this point that the mere fact that he will Court and the Supreme Court affirmed. 154 P.2d 801. Appellant in each of these courts assailed
have to litigate in the American courts does not necessarily mean he will litigate in vain. The the statute as applied, as a violation of the due process clause of the Fourteenth Amendment, and
judicial system of that country in known for its sense of fairness and, generally, its strict as imposing a constitutionally prohibited burden on interstate commerce. The cause comes here
adherence to the rule of law. on appeal under 237(a) of the Judicial Code, 28 U.S.C. 344(a), 28 U.S.C.A. 344(a), appellant
assigning as error that the challenged statutes as applied infringe the due process clause of the
Fourteenth Amendment and the commerce clause.
WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so ordered.
The facts as found by the appeal tribunal and accepted by the state Superior Court and Supreme
United States Supreme Court Court, are not in dispute. Appellant is a Delaware corporation, having its principal place of
INTERNATIONAL SHOE CO. v. WASHINGTON, (1945) business in St. Louis, Missouri, and is engaged in the manufacture and sale of shoes and other
footwear. It maintains places of business in several states, other than Washington, at which its
No. 107 manufacturing is carried on and from which its merchandise is distributed interstate through
Argued: Decided: December 3, 1945 several sales units or branches located outside the State of Washington.
Appeal from the Supreme Court of the State of Washington. [326 U.S. 310, 311] Mr. Henry C.
Lowenhaupt, of St. Louis Mo., for appellant. Appellant has no office in Washington and makes no contracts either for sale or purchase of
merchandise there. It maintains no stock of merchandise in that state and makes there no
deliveries of goods in intrastate commerce. During the years from 1937 to 1940, now in question,
Mr. George W. Wilkins, of Olympia, Wash., for appellees.
appellant employed eleven to thirteen salesmen under direct supervision and control of sales
managers located in St. Louis. These salesmen resided in Washington; their principal activities
Mr. Chief Justice STONE delivered the opinion of the Court. were confined to that state; and they were compensated by commissions based upon the amount
of their sales. The commissions for each year totaled more than $31,000. Appellant supplies its
The questions for decision are (1) whether, within the limitations of the due process clause of the salesmen with a line of samples, each consisting of one shoe of a pair, which [326 U.S. 310,
Fourteenth Amendment, appellant, a Delaware corporation, has by its activities in the State of 314] they display to prospective purchasers. On occasion they rent permanent sample rooms,
Washington rendered itself amenable to proceedings in the courts of that state to recover unpaid for exhibiting samples, in business buildings, or rent rooms in hotels or business buildings
contributions to the state unemployment compensation fund exacted by state statutes, temporarily for that purpose. The cost of such rentals is reimbursed by appellant.
Washington Unemployment Compensation Act, Washington Revised Statutes, 9998-103a
through 9998-123a, 1941 Supp., and (2) whether the state can exact those contributions The authority of the salesmen is limited to exhibiting their samples and soliciting orders from
consistently with the due process clause of the Fourteenth Amendment. prospective buyers, at prices and on terms fixed by appellant. The salesmen transmit the orders
to appellant's office in St. Louis for acceptance or rejection, and when accepted the merchandise
The statutes in question set up a comprehensive scheme of unemployment compensation, the for filling the orders is shipped f.o.b. from points outside Washington to the purchasers within
costs of which are defrayed by contributions required to be made by employers to a state the state. All the merchandise shipped into Washington is invoiced at the place of shipment from
unemployment compensation fund.[326 U.S. 310, 312] The contributions are a specified which collections are made. No salesman has authority to enter into contracts or to make
percentage of the wages payable annually by each employer for his employees' services in the collections.
state. The assessment and collection of the contributions and the fund are administered by
respondents. Section 14(c) of the Act, Wash.Rev.Stat. 1941 Supp., 9998- 114c, authorizes The Supreme Court of Washington was of opinion that the regular and systematic solicitation of
respondent Commissioner to issue an order and notice of assessment of delinquent orders in the state by appellant's salesmen, resulting in a continuous flow of appellant's product
contributions upon prescribed personal service of the notice upon the employer if found within into the state, was sufficient to constitute doing business in the state so as to make appellant
the state, or, if not so found, by mailing the notice to the employer by registered mail at his last amenable to suit in its courts. But it was also of opinion that there were sufficient additional
known address. That section also authorizes the Commissioner to collect the assessment by activities shown to bring the case within the rule frequently stated, that solicitation within a state
distraint if it is not paid within ten days after service of the notice. By 14(e) and 6(b) the order of by the agents of a foreign corporation plus some additional activities there are sufficient to
assessment may be administratively reviewed by an appeal tribunal within the office of render the corporation amenable to suit brought in the courts of the state to enforce an
unemployment upon petition of the employer, and this determination is by 6(i) made subject to obligation arising out of its activities there. International Harvester Co. v. Kentucky, 234 U.S.
judicial review on questions of law by the state Superior Court, with further right of appeal in the 579, 587 , 34 S.Ct. 944, 946; People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 87 , 38
state Supreme Court as in other civil cases. S.Ct. 233, 235, Ann.Cas.1918C, 537; Frene v. Louisville Cement Co., 77 U.S.App.D.C. 129, 134
F.2d 511, 516, 146 A.L.R. 926. The court found such additional activities in the salesmen's display
In this case notice of assessment for the years in question was personally served upon a sales of samples sometimes in permanent display rooms, and the salesmen's residence within the
solicitor employed by appellant in the State of Washington, and a copy of the notice was mailed state, continued over a period of years, all resulting in a [326 U.S. 310, 315] substantial volume
of merchandise regularly shipped by appellant to purchasers within the state. The court also held a trial away from its 'home' or principal place of business is relevant in this connection.
that the statute as applied did not invade the constitutional power of Congress to regulate Hutchinson v. Chase & Gilbert, supra, 45 F.2d 141.
interstate commerce and did not impose a prohibited burden on such commerce.
'Presence' in the state in this sense has never been doubted when the activities of the corporation
Appellant's argument, renewed here, that the statute imposes an unconstitutional burden on there have not only been continuous and systematic, but also give rise to the liabilities sued on,
interstate commerce need not detain us. For 53 Stat. 1391, 26 U.S.C. 1606(a), 26 U.S.C.A. even though no consent to be sued or authorization to an agent to accept service of process has
Int.Rev.Code, 1606(a), provides that 'No person required under a State law to make payments to been given. St. Clair v. Cox, 106 U.S. 350, 355 , 1 S.Ct. 354, 359; Connecticut Mutual Life Ins. Co.
an unemployment fund shall be relieved from compliance therewith on the ground that he is v. Spratley, 172 U.S. 602, 610 , 611 S., 19 S.Ct. 308, 311, 312; Pennsylvania Lumbermen's Mut.
engaged in interstate or foreign commerce, or that the State law does not distinguish between Fire Ins. Co. v. Meyer, 197 U.S. 407, 414 , 415 S., 25 S.Ct. 483, 484, 485; Commercial Mutual
employees engaged in interstate or foreign commerce and those engaged in intrastate Accident Co. v. Davis, 213 U.S. 245, 255 , 256 S., 29 S.Ct. 445, 448; International Harvester Co.
commerce.' It is no longer debatable that Congress, in the exercise of the commerce power, may v. Kentucky, supra; cf. St. Louis S.W.R. Co. v. Alexander, 227 U.S. 218 , 33 S.Ct. 245,
authorize the states, in specified ways, to regulate interstate commerce or impose burdens upon Ann.Cas.1915B, 77. Conversely it has been generally recognized that the casual presence of the
it. Kentucky Whip & Collar Co. v. Illinois Central R. Co., 299 U.S. 334 , 57 S.Ct. 277; Perkins v. corporate agent or even his conduct of single or isolated items of activities in a state in the
Pennsylvania, 314 U.S. 586 , 62 S.Ct. 484; Standard Dredging Corp. v. Murphy, 319 U.S. 306, corporation's behalf are not enough to subject it to suit on causes of action unconnected with the
308 , 63 S.Ct. 1067, 1068; Hooven & Allison v. Evatt, 324 U.S. 652, 679 , 65 S.Ct. 870, 883; activities there. St. Clair v. Cox, supra, 106 U.S. 359, 360 , 1 S.Ct. 362, 363; Old Wayne Mut. Life
Southern Pacific Co. v. Arizona, 325 U.S. 761, 769 , 65 S.Ct. 1515, 1520 Ass'n v. McDonough, 204 U.S. 8, 21 , 27 S.Ct. 236, 240; Frene v. Louisville Cement Co., supra, 77
U.S.App.D.C. 133, 134 F.2d 515, 146 A.L.R. 926, and cases cited. To require the corporation in
Appellant also insists that its activities within the state were not sufficient to manifest its such circumstances to defend the suit away from its home or other jurisdiction where it carries
'presence' there and that in its absence the state courts were without jurisdiction, that on more substantial activities has been thought to lay too great and unreasonable a burden on
consequently it was a denial of due process for the state to subject appellant to suit. It refers to the corporation to comport with due process. [326 U.S. 310, 318] While it has been held in cases
those cases in which it was said that the mere solicitation of orders for the purchase of goods on which appellant relies that continuous activity of some sorts within a state is not enough to
within a state, to be accepted without the state and filled by shipment of the purchased goods support the demand that the corporation be amenable to suits unrelated to that activity, Old
interstate, does not render the corporation seller amenable to suit within the state. See Green v. Wayne Mut. Life Ass'n v. McDonough, supra; Green v. Chicago, Burlington & Quincy R. Co.,
Chicago, Burlington & Quincy R. Co., 205 U.S. 530, 533 , 27 S.Ct. 595, 596; International supra; Simon v. Southern R. Co., 236 U.S. 115 , 35 S.Ct. 255; People's Tobacco Co. v. American
Harvester Co. v. Kentucky, supra, 234 U.S. 586, 587 , 34 S.Ct. 946; Philadelphia [326 U.S. 310, Tobacco Co., supra; cf. Davis v. Farmers' Co-operative Equity Co., 262 U.S. 312, 317 , 43 S.Ct.
316] & Reading R. Co. v. McKibbin, 243 U.S. 264, 268 , 37 S.Ct. 280; People's Tobacco Co. v. 556, 558, there have been instances in which the continuous corporate operations within a state
American Tobacco Co., supra, 246 U.S. 87, 38 S.Ct. 235, Ann.Cas.1918C, 537. And appellant were thought so substantial and of such a nature as to justify suit against it on causes of action
further argues that since it was not present within the state, it is a denial of due process to arising from dealings entirely distinct from those activities. See Missouri, K. & T.R. Co. v.
subject it to taxation or other money exaction. It thus denies the power of the state to lay the tax Reynolds, 255 U.S. 565 , 41 S.Ct. 446; Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E.
or to subject appellant to a suit for its collection. 915; cf. St. Louis S.W.R. Co. v. Alexander, supra.
Finally, although the commission of some single or occasional acts of the corporate agent in a
state sufficient to impose an obligation or liability on the corporation has not been thought to
Historically the jurisdiction of courts to render judgment in personam is grounded on their de
confer upon the state authority to enforce it, Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S.
facto power over the defendant's person. Hence his presence within the territorial jurisdiction of
516 , 43 S.Ct. 170, other such acts, because of their nature and quality and the circumstances of
court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v.
their commission, may be deemed sufficient to render the corporation liable to suit. Cf. Kane v.
Neff, 95 U.S. 714 , 733. But now that the capias ad respondendum has given way to personal
New Jersey, 242 U.S. 160 , 37 S.Ct. 30; Hess v. Pawloski, supra; Young v. Masci, supra. True,
service of summons or other form of notice, due process requires only that in order to subject a
some of the decisions holding the corporation amenable to suit have been supported by resort to
defendant to a judgment in personam, if he be not present within the territory of the forum, he
the legal fiction that it has given its consent to service and suit, consent being implied from its
have certain minimum contacts with it such that the maintenance of the suit does not offend
presence in the state through the acts of its authorized agents. Lafayette Insurance Co. v. French,
'traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463 , 61
18 How. 404, 407; St. Clair v. Cox, supra, 106 U.S. 356 , 1 S.Ct. 359; Commercial Mutual
S.Ct. 339, 343, 132 A.L.R. 1357. See Holmes, J., in McDonald v. Mabee, 243 U.S. 90, 91 , 37 S.Ct.
Accident Co. v. Davis, supra, 213 U.S. 254 , 29 S.Ct. 447; State of Washington v. Superior
343, L.R.A.1917F, 458. Compare Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316 , 319 S., 63
Court, 289 U.S. 361, 364 , 365 S., 53 S.Ct. 624, 626, 627, 89 A.L.R. 653. But more realistically it
S.Ct. 602, 604, 606, 145 A.L.R. 1113. See Blackmer v. United States, 284 U.S. 421 , 52 S.Ct. 252;
may be said that those authorized acts were of such a nature as to justify the fiction. Smolik v.
Hess v. Pawloski, 274 U.S. 352 , 47 S.Ct. 632; Young v. Masci, 289 U.S. 253 , 53 S.Ct. 599, 88
Philadelphia & [326 U.S. 310, 319] R.C. & I. Co., D.C., 222 F. 148, 151. Henderson, The Position
A.L.R. 170.
of Foreign Corporations in American Constitutional Law, 94, 95.
Since the corporate personality is a fiction, although a fiction intended to be acted upon as
It is evident that the criteria by which we mark the boundary line between those activities which
though it were a fact, Klein v. Board of Tax Supervisors, 282 U.S. 19, 24 , 51 S.Ct. 15, 16, 73 A.L.R.
justify the subjection of a corporation to suit, and those which do not, cannot be simply
679, it is clear that unlike an individual its 'presence' without, as well as within, the state of its
mechanical or quantitative. The test is not merely, as has sometimes been suggested, whether the
origin can be manifested only by activities carried on in its behalf by those who are authorized to
activity, which the corporation has seen fit to procure through its agents in another state, is a
act for it. To say that the corporation is so far 'present' there as to satisfy due process
little more or a little less. St. Louis S.W.R. Co. v. Alexander, supra, 227 U.S. 228 , 33 S.Ct. 248,
requirements, for purposes of taxation or the maintenance of suits against it in the courts of the
Ann.Cas. 1915B, 77; International Harvestor Co. v. Kentucky, supra, 234 U.S. 587 , 34 S.Ct. 946.
state, is to beg the question to be decided. For the terms 'present' or 'presence' are [326 U.S. 310,
Whether due process is satisfied must depend rather upon the quality and nature of the activity
317] used merely to symbolize those activities of the corporation's agent within the state which
in relation to the fair and orderly administration of the laws which it was the purpose of the due
courts will deem to be sufficient to satisfy the demands of due process. L. Hand, J., in
process clause to insure. That clause does not contemplate that a state may make binding a
Hutchinson v. Chase & Gilbert, 2 Cir., 45 F.2d 139, 141. Those demands may be met by such
judgment in personam against an individual or corporate defendant with which the state has no
contacts of the corporation with the state of the forum as make it reasonable, in the context of
contacts, ties, or relations. Cf. Pennoyer v. Neff, supra; Minnesota Commercial Men's Ass'n v.
our federal system of government, to require the corporation to defend the particular suit which
Benn, 261 U.S. 140 , 43 S.Ct. 293.
is brought there. An 'estimate of the inconveniences' which would result to the corporation from
But to the extent that a corporation exercises the privilege of conducting activities within a state, taxation by the state and to suit to recover the tax. Equitable Life Assur. Society v.
it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may Pennsylvania, 238 U.S. 143, 146 , 35 S.Ct. 829, 830; cf. International Harvester Co. v. Wisconsin
give rise to obligations; and, so far as those obligations arise out of or are connected with the Department of Taxation, 322 U.S. 435 , 442 et seq., 64 S.Ct. 1060, 1064 et seq.; Hoopeston
activities within the state, a procedure which requires the corporation to respond to a suit Canning Co. v. Cullen, [326 U.S. 310, 322] supra, 318 U.S. 316 -319, 63 S.Ct. 604-606, 145
brought to enforce them can, in most instances, hardly be said to be undue. Compare A.L.R. 113; see General Trading Co. v. State Tax Com., 322 U.S. 335, 349 , 64 S.Ct. 1028, 1030,
International Harvester Co. v. Kentucky, supra, with Green v. Chicago, Burlington & Quincy R. 1319.
Co., supra, and People's Tobacco Co. v. American Tobacco Co., supra. Compare Connecticut
Mutual Life Ins. Co. v. Spratley, supra, 172 U.S. 619, 620 , 19 S.Ct. 314, 315, and Commercial AFFIRMED.
Mutual Accident Co. v. Davis, supra, with Old Wayne Mut. Life Ass'n v. McDonough, supra. See
29 Columbia Law Review, 187-195.[326 U.S. 310, 320] Applying these standards, the activities
Mr. Justice JACKSON took no part in the consideration or decision of this case.
carried on in behalf of appellant in the State of Washington were neither irregular nor casual.
They were systematic and continuous throughout the years in question. They resulted in a large
volume of interstate business, in the course of which appellant received the benefits and Mr. Justice BLACK delivered the following opinion.
protection of the laws of the state, including the right to resort to the courts for the enforcement
of its rights. The obligation which is here sued upon arose out of those very activities. It is Congress, pursuant to its constitutional power to regulate commerce, has expressly provided that
evident that these operations establish sufficient contacts or ties with the state of the forum to a State shall not be prohibited from levying the kind of unemployment compensation tax here
make it reasonable and just according to our traditional conception of fair play and substantial challenged. 26 U.S.C. 1606, 26 U.S.C.A. Int.Rev.Code, 1606. We have twice decided that this
justice to permit the state to enforce the obligations which appellant has incurred there. Hence Congressional consent is an adequate answer to a claim that imposition of the tax violates the
we cannot say that the maintenance of the present suit in the State of Washington involves an Commerce Clause. Perkins v. Pennsylvania, 314 U.S. 586 , 62 S.Ct. 484, affirming 342 Pa. 529,
unreasonable or undue procedure. 21 A.2d 45; Standard Dredging Corp. v. Murphy, 319 U.S. 306, 308 , 63 S.Ct. 1067, 1068. Two
determinations by this Court of an issue so palpably without merit are sufficient. Consequently
We are likewise unable to conclude that the service of the process within the state upon an agent that part of this appeal which again seeks to raise the question seems so patently frivolous as to
whose activities establish appellant's 'presence' there was not sufficient notice of the suit, or that make the case a fit candidate for dismissal. Fay v. Crozer, 217 U.S. 455 , 30 S. Ct. 568. Nor is the
the suit was so unrelated to those activities as to make the agent an inappropriate vehicle for further ground advanced on this appeal, that the State of Washington has denied appellant due
communicating the notice. It is enough that appellant has established such contacts with the process of law, any less devoid of substance. It is my view, therefore, that we should dismiss the
state that the particular form of substituted service adopted there gives reasonable assurance appeal as unsubstantial,1 Seaboard Air Line R. Co. v. Watson, 287 U.S. 86, 90 , 92 S., 53 S.Ct. 32,
that the notice will be actual. Connecticut Mutual Life Ins. Co. v. Spratley, supra, 172 U.S. 618, 34, 35, 86 A.L.R. 174; and decline the invitation to formulate broad rules as to the meaning of
619 , 19 S.Ct. 314, 315; Board of Trade v. Hammond Elevator Co., 198 U.S. 424, 437 , 438 S., 25 due process, which here would amount to deciding a constitutional question 'in advance of the
S.Ct. 740, 743, 744; Commercial Mutual Accident Co. v. Davis, supra, 213 U.S. 254, 255 , 29 S.Ct. necessity for its decision.' Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461 , 65
447, 448. Cf. Riverside & Dan River Cotton Mills v. Menefee, 237 U.S. 189, 194 , 195 S., 35 S.Ct. S.Ct. 1384, 1389, 1734. [326 U.S. 310, 323] Certainly appellant can not in the light of our past
579, 580, 581; see Knowles v. Gaslight & Coke Co., 19 Wall. 58, 61; McDonald v. Mabee, supra; decisions meritoriously claim that notice by registered mail and by personal service on its sales
Milliken v. Meyer, supra. Nor can we say that the mailing of the notice of suit to appellant by solicitors in Washington did not meet the requirements of procedural due process. And the due
registered mail at its home office was not reasonably calculated to apprise appellant of the suit. process clause is not brought in issue any more by appellant's further conceptualistic contention
Compare Hess v. Pawloski, supra, with McDonald v. Mabee, supra, 243 U.S. [326 U.S. 310, that Washington could not levy a tax or bring suit against the corporation because it did not
321] 92, 37 S.Ct. 344, L.R.A.1917F, 458, and Wuchter v. Pizzutti, 276 U.S. 13, 19 , 24 S., 48 S.Ct. honor that State with its mystical 'presence.' For it is unthinkable that the vague due process
259, 260, 262, 57 A.L.R. 1230; cf. Bequet v. MacCarthy, 2 B. & Ad. 951; Maubourquet v. Wyse, 1 clause was ever intended to prohibit a State from regulating or taxing a business carried on
Ir.Rep.C.L. 471. See State of Washington v. Superior Court, supra, 289 U.S. 365 , 53 S. Ct. 626, within its boundaries simply because this is done by agents of a corporation organized and
89 A.L.R. 653. having its headquarters elsewhere. To read this into the due process clause would in fact result in
depriving a State's citizens of due process by taking from the State the power to protect them in
their business dealings within its boundaries with representatives of a foreign corporation.
Only a word need be said of appellant's liability for the demanded contributions of the state
Nothing could be more irrational or more designed to defeat the function of our federative
unemployment fund. The Supreme Court of Washington, construing and applying the statute,
system of government. Certainly a State, at the very least, has power to tax and sue those dealing
has held that it imposes a tax on the privilege of employing appellant's salesmen within the state
with its citizens within its boundaries, as we have held before. Hoopeston Canning Co. v.
measured by a percentage of the wages, here the commissions payable to the salesmen. This
Cullen, 318 U.S. 313 , 63 S.Ct. 602, 145 A.L.R. 1113. Were the Court to follow this principle, it
construction we accept for purposes of determining the constitutional validity of the statute. The
would provide a workable standard for cases where, as here, no other questions are involved. The
right to employ labor has been deemed an appropriate subject of taxation in this country and
Court has not chosen to do so, but instead has engaged in an unnecessary discussion in the
England, both before and since the adoption of the Constitution. Steward Machine Co. v.
course of which it has announced vague Constitutional criteria applied for the first time to the
Davis, 301 U.S. 548 , 579 et seq., 57 S.Ct. 883, 887 et seq., 109 A.L.R. 1293. And such a tax
issue before us. It has thus introduced uncertain elements confusing the simple pattern and
imposed upon the employer for unemployment benefits is within the constitutional power of the
tending to curtail the exercise of State powers to an extent not justified by the Constitution.
states. Carmichael v. Southern Coal & Coke Co., 301 U.S. 495 , 508 et seq., 57 S.Ct. 868, 871 et
seq., 109 A.L.R. 1327.
The criteria adopted insofar as they can be identified read as follows: Due process does permit
State courts to 'enforce the obligations which appellant has incurred' if [326 U.S. 310, 324] it be
Appellant having rendered itself amenable to suit upon obligations arising out of the activities of
found 'reasonable and just according to our traditional conception of fair play and substantial
its salesmen in Washington, the state may maintain the present suit in personam to collect the
justice.' And this in turn means that we will 'permit' the State to act if upon 'an 'estimate of the
tax laid upon the exercise of the privilege of employing appellant's salesmen within the state. For
inconveniences' which would result to the corporation from a trial away from its 'home' or
Washington has made one of those activities, which taken together establish appellant's
principal place of business', we conclude that it is 'reasonable' to subject it to suit in a State
'presence' there for purposes of suit, the taxable event by which the state brings appellant within
where it is doing business.
the reach of its taxing power. The state thus has constitutional power to lay the tax and to subject
appellant to a suit to recover it. The activities which establish its 'presence' subject it alike to
It is true that this Court did use the terms 'fair play' and 'substantial justice' in explaining the EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellant,
philosophy underlying the holding that it could not be 'due process of law' to render a personal vs.
judgment against a defendant without notice to and an opportunity to be heard by him. Milliken VICENTE PALANCA, administrator of the estate of Engracio Palanca
v. Meyer, 311 U.S. 457 , 61 S.Ct. 339, 132 A.L. R. 1357. In McDonald v. Mabee, 243 U.S. 90, 91 , Tanquinyeng, defendant-appellant.
37 S.Ct. 343, L.R.A.1917F, 458, cited in the Milliken case, Mr. Justice Holmes speaking for the
Court warned against judicial curtailment of this opportunity to be heard and referred to such a
curtailment as a denial of 'fair play', which even the common law would have deemed 'contrary Aitken and DeSelms for appellant.
to natural justice.' And previous cases had indicated that the ancient rule against judgments Hartigan and Welch for appellee.
without notice had stemmed from 'natural justice' concepts. These cases, while giving additional
reasons why notice under particular circumstances is inadequate, did not mean thereby that all STREET, J.:
legislative enactments which this Court might deem to be contrary to natural justice ought to be
held invalid under the due process clause. None of the cases purport to support or could support
a holding that a State can tax and sue corporations only if its action comports with this Court's This action was instituted upon March 31, 1908, by "El Banco Espanol-Filipino" to foreclose a
notions of 'natural justice.' I should have thought the Tenth Amendment settled that. mortgage upon various parcels of real property situated in the city of Manila. The mortgage in
question is dated June 16, 1906, and was executed by the original defendant herein, Engracio
Palanca Tanquinyeng y Limquingco, as security for a debt owing by him to the bank. Upon
I believe that the Federal Constitution leaves to each State, without any 'ifs' or 'buts', a power to
March 31, 1906, the debt amounted to P218,294.10 and was drawing interest at the rate of 8 per
tax and to open the doors of its courts for its citizens to sue corporations whose agents do
centum per annum, payable at the end of each quarter. It appears that the parties to this
business in those States. Believing that the Constitution gave the States that power, I think it a
judicial deprivation to condition its exercise upon this [326 U.S. 310, 325] Court's notion of mortgage at that time estimated the value of the property in question at P292,558, which was
'fairplay', however appealing that term may be. Nor can I stretch the meaning of due process so about P75,000 in excess of the indebtedness. After the execution of this instrument by the
far as to authorize this Court to deprive a State of the right to afford judicial protection to its mortgagor, he returned to China which appears to have been his native country; and he there
citizens on the ground that it would be more 'convenient' for the corporation to be sued died, upon January 29, 1810, without again returning to the Philippine Islands.
somewhere else.
As the defendant was a nonresident at the time of the institution of the present action, it was
There is a strong emotional appeal in the words 'fair play', 'justice', and 'reasonableness.' But necessary for the plaintiff in the foreclosure proceeding to give notice to the defendant by
they were not chosen by those who wrote the original Constitution or the Fourteenth publication pursuant to section 399 of the Code of Civil Procedure. An order for publication was
Amendment as a measuring rod for this Court to use in invalidating State or Federal laws passed accordingly obtained from the court, and publication was made in due form in a newspaper of
by elected legislative representatives. No one, not even those who most feared a democratic the city of Manila. At the same time that the order of the court should deposit in the post office in
government, ever formally proposed that courts should be given power to invalidate legislation a stamped envelope a copy of the summons and complaint directed to the defendant at his last
under any such elastic standards. Express prohibitions against certain types of legislation are place of residence, to wit, the city of Amoy, in the Empire of China. This order was made
found in the Constitution, and under the long settled practice, courts invalidate laws found to pursuant to the following provision contained in section 399 of the Code of Civil Procedure:
conflict with them. This requires interpretation, and interpretation, it is true, may result in
extension of the Constitution's purpose. But that is no reason for reading the due process clause
In case of publication, where the residence of a nonresident or absent defendant is
so as to restrict a State's power to tax and sue those whose activities affect persons and
known, the judge must direct a copy of the summons and complaint to be forthwith
businesses within the State, provided proper service can be had. Superimposing the natural
justice concept on the Constitution's specific prohibitions could operate as a drastic abridgment deposited by the clerk in the post-office, postage prepaid, directed to the person to be
of democratic safeguards they embody, such as freedom of speech, press and religion,2 and the served, at his place of residence
right to counsel. This [326 U.S. 310, 326] has already happened. Betts v. Brady, 316 U.S. 455 ,
62 S.Ct. 1252. Compare Feldman v. United States, 322 U.S. 487 , 494-503, 64 S.Ct. 1082, 1085- Whether the clerk complied with this order does not affirmatively appear. There is, however,
1089, 154 A.L.R. 982. For application of this natural law concept, whether under the terms among the papers pertaining to this case, an affidavit, dated April 4, 1908, signed by Bernardo
'reasonableness', 'justice', or 'fair play', makes judges the supreme arbiters of the country's laws Chan y Garcia, an employee of the attorneys of the bank, showing that upon that date he had
and practices. Polk Co. v. Glover, 305 U.S. 5 , 17-18, 59 S.Ct. 15, 20, 21; Federal Power deposited in the Manila post-office a registered letter, addressed to Engracio Palanca
Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 600 , 62 S.Ct. 736, 750, note 4. This Tanquinyeng, at Manila, containing copies of the complaint, the plaintiff's affidavit, the summons,
result, I believe, alters the form of government our Constitution provides. I cannot agree. and the order of the court directing publication as aforesaid. It appears from the postmaster's
receipt that Bernardo probably used an envelope obtained from the clerk's office, as the receipt
True, the State's power is here upheld. But the rule announced means that tomorrow's judgment purports to show that the letter emanated from the office.
may strike down a State or Federal enactment on the ground that it does not conform to this
Court's idea of natural justice. I therefore find myself moved by the same fears that caused Mr.
The cause proceeded in usual course in the Court of First Instance; and the defendant not
Justice Holmes to say in 1930:
having appeared, judgment was, upon July 2, 1908, taken against him by default. Upon July 3,
1908, a decision was rendered in favor of the plaintiff. In this decision it was recited that
'I have not yet adequately expressed the more than anxiety that I feel at the ever increasing scope publication had been properly made in a periodical, but nothing was said about this notice
given to the Fourteenth Amendment in cutting down what I believe to be the constitutional having been given mail. The court, upon this occasion, found that the indebtedness of the
rights of the States. As the decisions now stand, I see hardly any limit but the sky to the defendant amounted to P249,355. 32, with interest from March 31, 1908. Accordingly it was
invalidating of those rights if they happen to strike a majority of this Court as for any reason ordered that the defendant should, on or before July 6, 1908, deliver said amount to the clerk of
undesirable.' Baldwin v. Missouri, 281 U.S. 586, 595 , 50 S.Ct. 436, 439, 72 A.L.R. 1303. the court to be applied to the satisfaction of the judgment, and it was declared that in case of the
failure of the defendant to satisfy the judgment within such period, the mortgage property located
G.R. No. L-11390 March 26, 1918 in the city of Manila should be exposed to public sale. The payment contemplated in said order
was never made; and upon July 8, 1908, the court ordered the sale of the property. The sale
took place upon July 30, 1908, and the property was bought in by the bank for the sum of In the terminology of American law the action to foreclose a mortgage is said to be a proceeding
P110,200. Upon August 7, 1908, this sale was confirmed by the court. quasi in rem, by which is expressed the idea that while it is not strictly speaking an action in
rem yet it partakes of that nature and is substantially such. The expression "action in rem" is, in
its narrow application, used only with reference to certain proceedings in courts of admiralty
About seven years after the confirmation of this sale, or to the precise, upon June 25, 1915, a
wherein the property alone is treated as responsible for the claim or obligation upon which the
motion was made in this cause by Vicente Palanca, as administrator of the estate of the original
proceedings are based. The action quasi rem differs from the true action in rem in the
defendant, Engracio Palanca Tanquinyeng y Limquingco, wherein the applicant requested the
circumstance that in the former an individual is named as defendant, and the purpose of the
court to set aside the order of default of July 2, 1908, and the judgment rendered upon July 3,
proceeding is to subject his interest therein to the obligation or lien burdening the property. All
1908, and to vacate all the proceedings subsequent thereto. The basis of this application, as set
proceedings having for their sole object the sale or other disposition of the property of the
forth in the motion itself, was that the order of default and the judgment rendered thereon were
defendant, whether by attachment, foreclosure, or other form of remedy, are in a general way
void because the court had never acquired jurisdiction over the defendant or over the subject of
thus designated. The judgment entered in these proceedings is conclusive only between the
the action.

At the hearing in the court below the application to vacate the judgment was denied, and from
In speaking of the proceeding to foreclose a mortgage the author of a well known treaties, has
this action of the court Vicente Planca, as administrator of the estate of the original defendant,
has appealed. No other feature of the case is here under consideration than such as related to
the action of the court upon said motion.
Though nominally against person, such suits are to vindicate liens; they proceed upon
seizure; they treat property as primarily indebted; and, with the qualification above-
The case presents several questions of importance, which will be discussed in what appears to
mentioned, they are substantially property actions. In the civil law, they are styled
be the sequence of most convenient development. In the first part of this opinion we shall, for the
hypothecary actions, and their sole object is the enforcement of the lien against
purpose of argument, assume that the clerk of the Court of First Instance did not obey the order
the res; in the common law, they would be different in chancery did not treat the
of the court in the matter of mailing the papers which he was directed to send to the defendant in
conditional conveyance as a mere hypothecation, and the creditor's right ass an
Amoy; and in this connection we shall consider, first, whether the court acquired the necessary
equitable lien; so, in both, the suit is real action so far as it is against property, and
jurisdiction to enable it to proceed with the foreclosure of the mortgage and, secondly, whether
seeks the judicial recognition of a property debt, and an order for the sale of
those proceedings were conducted in such manner as to constitute due process of law.
the res. (Waples, Proceedings In Rem. sec. 607.)

The word "jurisdiction," as applied to the faculty of exercising judicial power, is used in several
It is true that in proceedings of this character, if the defendant for whom publication is made
different, though related, senses since it may have reference (1) to the authority of the court to
appears, the action becomes as to him a personal action and is conducted as such. This,
entertain a particular kind of action or to administer a particular kind of relief, or it may refer to
however, does not affect the proposition that where the defendant fails to appear the action
the power of the court over the parties, or (2) over the property which is the subject to the
is quasi in rem; and it should therefore be considered with reference to the principles governing
actions in rem.

The sovereign authority which organizes a court determines the nature and extent of its powers
There is an instructive analogy between the foreclosure proceeding and an action of attachment,
in general and thus fixes its competency or jurisdiction with reference to the actions which it may
concerning which the Supreme Court of the United States has used the following language:
entertain and the relief it may grant.

If the defendant appears, the cause becomes mainly a suit in personam, with the
Jurisdiction over the person is acquired by the voluntary appearance of a party in court and his
added incident, that the property attached remains liable, under the control of the
submission to its authority, or it is acquired by the coercive power of legal process exerted over
court, to answer to any demand which may be established against the defendant by
the person.
the final judgment of the court. But, if there is no appearance of the defendant, and no
service of process on him, the case becomes, in its essential nature, a proceeding in
Jurisdiction over the property which is the subject of the litigation may result either from a rem, the only effect of which is to subject the property attached to the payment of the
seizure of the property under legal process, whereby it is brought into the actual custody of the defendant which the court may find to be due to the plaintiff. (Cooper vs. Reynolds, 10
law, or it may result from the institution of legal proceedings wherein, under special provisions of Wall., 308.)
law, the power of the court over the property is recognized and made effective. In the latter case
the property, though at all times within the potential power of the court, may never be taken into
In an ordinary attachment proceeding, if the defendant is not personally served, the preliminary
actual custody at all. An illustration of the jurisdiction acquired by actual seizure is found in
seizure is to, be considered necessary in order to confer jurisdiction upon the court. In this case
attachment proceedings, where the property is seized at the beginning of the action, or some
the lien on the property is acquired by the seizure; and the purpose of the proceedings is to
subsequent stage of its progress, and held to abide the final event of the litigation. An illustration
subject the property to that lien. If a lien already exists, whether created by mortgage, contract,
of what we term potential jurisdiction over the res, is found in the proceeding to register the title
or statute, the preliminary seizure is not necessary; and the court proceeds to enforce such lien
of land under our system for the registration of land. Here the court, without taking actual
in the manner provided by law precisely as though the property had been seized upon
physical control over the property assumes, at the instance of some person claiming to be
attachment. (Roller vs. Holly, 176 U. S., 398, 405; 44 L. ed., 520.) It results that the mere
owner, to exercise a jurisdiction in rem over the property and to adjudicate the title in favor of the
circumstance that in an attachment the property may be seized at the inception of the
petitioner against all the world.
proceedings, while in the foreclosure suit it is not taken into legal custody until the time comes
for the sale, does not materially affect the fundamental principle involved in both cases, which is
that the court is here exercising a jurisdiction over the property in a proceeding directed state, and who does not appear, the relief must be confined to the res, and the court cannot
essentially in rem. lawfully render a personal judgment against him. (Dewey vs. Des Moines, 173 U. S., 193; 43 L.
ed., 665; Heidritter vs. Elizabeth Oil Cloth Co., 112 U. S., 294; 28 L. ed., 729.) Therefore in an
action to foreclose a mortgage against a nonresident, upon whom service has been effected
Passing now to a consideration of the jurisdiction of the Court of First Instance in a mortgage
exclusively by publication, no personal judgment for the deficiency can be entered. (Latta vs.
foreclosure, it is evident that the court derives its authority to entertain the action primarily from
Tutton, 122 Cal., 279; Blumberg vs. Birch, 99 Cal., 416.)
the statutes organizing the court. The jurisdiction of the court, in this most general sense, over
the cause of action is obvious and requires no comment. Jurisdiction over the person of the
defendant, if acquired at all in such an action, is obtained by the voluntary submission of the It is suggested in the brief of the appellant that the judgment entered in the court below offends
defendant or by the personal service of process upon him within the territory where the process against the principle just stated and that this judgment is void because the court in fact entered a
is valid. If, however, the defendant is a nonresident and, remaining beyond the range of the personal judgment against the absent debtor for the full amount of the indebtedness secured by
personal process of the court, refuses to come in voluntarily, the court never acquires jurisdiction the mortgage. We do not so interpret the judgment.
over the person at all. Here the property itself is in fact the sole thing which is impleaded and is
the responsible object which is the subject of the exercise of judicial power. It follows that the
In a foreclosure proceeding against a nonresident owner it is necessary for the court, as in all
jurisdiction of the court in such case is based exclusively on the power which, under the law, it
cases of foreclosure, to ascertain the amount due, as prescribed in section 256 of the Code of
possesses over the property; and any discussion relative to the jurisdiction of the court over the
Civil Procedure, and to make an order requiring the defendant to pay the money into court. This
person of the defendant is entirely apart from the case. The jurisdiction of the court over the
step is a necessary precursor of the order of sale. In the present case the judgment which was
property, considered as the exclusive object of such action, is evidently based upon the following
entered contains the following words:
conditions and considerations, namely: (1) that the property is located within the district; (2) that
the purpose of the litigation is to subject the property by sale to an obligation fixed upon it by the
mortgage; and (3) that the court at a proper stage of the proceedings takes the property into Because it is declared that the said defendant Engracio Palanca Tanquinyeng y
custody, if necessary, and expose it to sale for the purpose of satisfying the mortgage debt. An Limquingco, is indebted in the amount of P249,355.32, plus the interest, to the 'Banco
obvious corollary is that no other relief can be granted in this proceeding than such as can be Espanol-Filipino' . . . therefore said appellant is ordered to deliver the above amount
enforced against the property. etc., etc.

We may then, from what has been stated, formulated the following proposition relative to the This is not the language of a personal judgment. Instead it is clearly intended merely as a
foreclosure proceeding against the property of a nonresident mortgagor who fails to come in and compliance with the requirement that the amount due shall be ascertained and that the evidence
submit himself personally to the jurisdiction of the court: (I) That the jurisdiction of the court is of this it may be observed that according to the Code of Civil Procedure a personal judgment
derived from the power which it possesses over the property; (II) that jurisdiction over the person against the debtor for the deficiency is not to be rendered until after the property has been sold
is not acquired and is nonessential; (III) that the relief granted by the court must be limited to and the proceeds applied to the mortgage debt. (sec. 260).
such as can be enforced against the property itself.
The conclusion upon this phase of the case is that whatever may be the effect in other respects
It is important that the bearing of these propositions be clearly apprehended, for there are many of the failure of the clerk of the Court of First Instance to mail the proper papers to the defendant
expressions in the American reports from which it might be inferred that the court acquires in Amoy, China, such irregularity could in no wise impair or defeat the jurisdiction of the court, for
personal jurisdiction over the person of the defendant by publication and notice; but such is not in our opinion that jurisdiction rest upon a basis much more secure than would be supplied by
the case. In truth the proposition that jurisdiction over the person of a nonresident cannot be any form of notice that could be given to a resident of a foreign country.
acquired by publication and notice was never clearly understood even in the American courts
until after the decision had been rendered by the Supreme Court of the United States in the
leading case of Pennoyer vs. Neff (95 U. S. 714; 24 L. ed., 565). In the light of that decision, and Before leaving this branch of the case, we wish to observe that we are fully aware that many
of other decisions which have subsequently been rendered in that and other courts, the reported cases can be cited in which it is assumed that the question of the sufficiency of
publication or notice in a case of this kind is a question affecting the jurisdiction of the court, and
proposition that jurisdiction over the person cannot be thus acquired by publication and notice is
no longer open to question; and it is now fully established that a personal judgment upon the court is sometimes said to acquire jurisdiction by virtue of the publication. This phraseology
constructive or substituted service against a nonresident who does not appear is wholly invalid. was undoubtedly originally adopted by the court because of the analogy between service by the
publication and personal service of process upon the defendant; and, as has already been
This doctrine applies to all kinds of constructive or substituted process, including service by
publication and personal service outside of the jurisdiction in which the judgment is rendered; suggested, prior to the decision of Pennoyer vs. Neff (supra) the difference between the legal
and the only exception seems to be found in the case where the nonresident defendant has effects of the two forms of service was obscure. It is accordingly not surprising that the modes of
expression which had already been molded into legal tradition before that case was decided
expressly or impliedly consented to the mode of service. (Note to Raher vs. Raher, 35 L. R. A.
[N. S. ], 292; see also 50 L .R. A., 585; 35 L. R. A. [N. S.], 312 have been brought down to the present day. But it is clear that the legal principle here involved
is not effected by the peculiar language in which the courts have expounded their ideas.

The idea upon which the decision in Pennoyer vs. Neff (supra) proceeds is that the process from
the tribunals of one State cannot run into other States or countries and that due process of law We now proceed to a discussion of the question whether the supposed irregularity in the
requires that the defendant shall be brought under the power of the court by service of process proceedings was of such gravity as to amount to a denial of that "due process of law" which was
secured by the Act of Congress in force in these Islands at the time this mortgage was
within the State, or by his voluntary appearance, in order to authorize the court to pass upon the
question of his personal liability. The doctrine established by the Supreme Court of the United foreclosed. (Act of July 1, 1902, sec. 5.) In dealing with questions involving the application of the
States on this point, being based upon the constitutional conception of due process of law, is constitutional provisions relating to due process of law the Supreme Court of the United States
has refrained from attempting to define with precision the meaning of that expression, the reason
binding upon the courts of the Philippine Islands. Involved in this decision is the principle that in
proceedings in rem or quasi in rem against a nonresident who is not served personally within the being that the idea expressed therein is applicable under so many diverse conditions as to make
any attempt ay precise definition hazardous and unprofitable. As applied to a judicial proceeding,
however, it may be laid down with certainty that the requirement of due process is satisfied if the against a nonresident. Such a result would be a deplorable one. (Quarl vs. Abbett, 102
following conditions are present, namely; (1) There must be a court or tribunal clothed with Ind., 233; 52 Am. Rep., 662, 667.)
judicial power to hear and determine the matter before it; (2) jurisdiction must be lawfully
acquired over the person of the defendant or over the property which is the subject of the
It is, of course universally recognized that the statutory provisions relative to publication or other
proceeding; (3) the defendant must be given an opportunity to be heard; and (4) judgment must
form of notice against a nonresident owner should be complied with; and in respect to the
be rendered upon lawful hearing.
publication of notice in the newspaper it may be stated that strict compliance with the
requirements of the law has been held to be essential. In Guaranty Trust etc. Co. vs. Green
Passing at once to the requisite that the defendant shall have an opportunity to be heard, we Cove etc., Railroad Co. (139 U. S., 137, 138), it was held that where newspaper publication was
observe that in a foreclosure case some notification of the proceedings to the nonresident made for 19 weeks, when the statute required 20, the publication was insufficient.
owner, prescribing the time within which appearance must be made, is everywhere recognized
as essential. To answer this necessity the statutes generally provide for publication, and usually
With respect to the provisions of our own statute, relative to the sending of notice by mail, the
in addition thereto, for the mailing of notice to the defendant, if his residence is known. Though
requirement is that the judge shall direct that the notice be deposited in the mail by the clerk of
commonly called constructive, or substituted service of process in any true sense. It is merely a
the court, and it is not in terms declared that the notice must be deposited in the mail. We
means provided by law whereby the owner may be admonished that his property is the subject
consider this to be of some significance; and it seems to us that, having due regard to the
of judicial proceedings and that it is incumbent upon him to take such steps as he sees fit to
principles upon which the giving of such notice is required, the absent owner of the mortgaged
protect it. In speaking of notice of this character a distinguish master of constitutional law has
property must, so far as the due process of law is concerned, take the risk incident to the
used the following language:
possible failure of the clerk to perform his duty, somewhat as he takes the risk that the mail clerk
or the mail carrier might possibly lose or destroy the parcel or envelope containing the notice
. . . if the owners are named in the proceedings, and personal notice is provided for, it before it should reach its destination and be delivered to him. This idea seems to be
is rather from tenderness to their interests, and in order to make sure that the strengthened by the consideration that placing upon the clerk the duty of sending notice by mail,
opportunity for a hearing shall not be lost to them, than from any necessity that the the performance of that act is put effectually beyond the control of the plaintiff in the litigation. At
case shall assume that form. (Cooley on Taxation [2d. ed.], 527, quoted in Leigh vs. any rate it is obvious that so much of section 399 of the Code of Civil Procedure as relates to the
Green, 193 U. S., 79, 80.) sending of notice by mail was complied with when the court made the order. The question as to
what may be the consequences of the failure of the record to show the proof of compliance with
that requirement will be discussed by us further on.
It will be observed that this mode of notification does not involve any absolute assurance that the
absent owner shall thereby receive actual notice. The periodical containing the publication may
never in fact come to his hands, and the chances that he should discover the notice may often The observations which have just been made lead to the conclusion that the failure of the clerk
be very slight. Even where notice is sent by mail the probability of his receiving it, though much to mail the notice, if in fact he did so fail in his duty, is not such an irregularity, as amounts to a
increased, is dependent upon the correctness of the address to which it is forwarded as well as denial of due process of law; and hence in our opinion that irregularity, if proved, would not avoid
upon the regularity and security of the mail service. It will be noted, furthermore, that the the judgment in this case. Notice was given by publication in a newspaper and this is the only
provision of our law relative to the mailing of notice does not absolutely require the mailing of form of notice which the law unconditionally requires. This in our opinion is all that was
notice unconditionally and in every event, but only in the case where the defendant's residence absolutely necessary to sustain the proceedings.
is known. In the light of all these facts, it is evident that actual notice to the defendant in cases of
this kind is not, under the law, to be considered absolutely necessary.
It will be observed that in considering the effect of this irregularity, it makes a difference whether
it be viewed as a question involving jurisdiction or as a question involving due process of law. In
The idea upon which the law proceeds in recognizing the efficacy of a means of notification the matter of jurisdiction there can be no distinction between the much and the little. The court
which may fall short of actual notice is apparently this: Property is always assumed to be in the either has jurisdiction or it has not; and if the requirement as to the mailing of notice should be
possession of its owner, in person or by agent; and he may be safely held, under certain considered as a step antecedent to the acquiring of jurisdiction, there could be no escape from
conditions, to be affected with knowledge that proceedings have been instituted for its the conclusion that the failure to take that step was fatal to the validity of the judgment. In the
condemnation and sale. application of the idea of due process of law, on the other hand, it is clearly unnecessary to be
so rigorous. The jurisdiction being once established, all that due process of law thereafter
requires is an opportunity for the defendant to be heard; and as publication was duly made in the
It is the duty of the owner of real estate, who is a nonresident, to take measures that in
newspaper, it would seem highly unreasonable to hold that failure to mail the notice was fatal.
some way he shall be represented when his property is called into requisition, and if
We think that in applying the requirement of due process of law, it is permissible to reflect upon
he fails to do this, and fails to get notice by the ordinary publications which have
the purposes of the provision which is supposed to have been violated and the principle
usually been required in such cases, it is his misfortune, and he must abide the
underlying the exercise of judicial power in these proceedings. Judge in the light of these
consequences. (6 R. C. L., sec. 445 [p. 450]).
conceptions, we think that the provision of Act of Congress declaring that no person shall be
deprived of his property without due process of law has not been infringed.
It has been well said by an American court:
In the progress of this discussion we have stated the two conclusions; (1) that the failure of the
If property of a nonresident cannot be reached by legal process upon the constructive clerk to send the notice to the defendant by mail did not destroy the jurisdiction of the court and
notice, then our statutes were passed in vain, and are mere empty legislative (2) that such irregularity did not infringe the requirement of due process of law. As a
declarations, without either force, or meaning; for if the person is not within the consequence of these conclusions the irregularity in question is in some measure shorn of its
jurisdiction of the court, no personal judgment can be rendered, and if the judgment potency. It is still necessary, however, to consider its effect considered as a simple irregularity of
cannot operate upon the property, then no effective judgment at all can be rendered, procedure; and it would be idle to pretend that even in this aspect the irregularity is not grave
so that the result would be that the courts would be powerless to assist a citizen enough. From this point of view, however, it is obvious that any motion to vacate the judgment
on the ground of the irregularity in question must fail unless it shows that the defendant was recipient was a person sufficiently interested in his affairs to send it or communicate its contents
prejudiced by that irregularity. The least, therefore, that can be required of the proponent of such to him.
a motion is to show that he had a good defense against the action to foreclose the mortgage.
Nothing of the kind is, however, shown either in the motion or in the affidavit which accompanies
Of course if the jurisdiction of the court or the sufficiency of the process of law depended upon
the motion.
the mailing of the notice by the clerk, the reflections in which we are now indulging would be idle
and frivolous; but the considerations mentioned are introduced in order to show the propriety of
An application to open or vacate a judgment because of an irregularity or defect in the applying to this situation the legal presumption to which allusion has been made. Upon that
proceedings is usually required to be supported by an affidavit showing the grounds on which presumption, supported by the circumstances of this case, ,we do not hesitate to found the
the relief is sought, and in addition to this showing also a meritorious defense to the action. It is conclusion that the defendant voluntarily abandoned all thought of saving his property from the
held that a general statement that a party has a good defense to the action is insufficient. The obligation which he had placed upon it; that knowledge of the proceedings should be imputed to
necessary facts must be averred. Of course if a judgment is void upon its face a showing of the him; and that he acquiesced in the consequences of those proceedings after they had been
existence of a meritorious defense is not necessary. (10 R. C. L., 718.) accomplished. Under these circumstances it is clear that the merit of this motion is, as we have
already stated, adversely affected in a high degree by the delay in asking for relief. Nor is it an
adequate reply to say that the proponent of this motion is an administrator who only qualified a
The lapse of time is also a circumstance deeply affecting this aspect of the case. In this
few months before this motion was made. No disability on the part of the defendant himself
connection we quote the following passage from the encyclopedic treatise now in course of
existed from the time when the foreclosure was effected until his death; and we believe that the
delay in the appointment of the administrator and institution of this action is a circumstance
which is imputable to the parties in interest whoever they may have been. Of course if the minor
Where, however, the judgment is not void on its face, and may therefore be enforced if heirs had instituted an action in their own right to recover the property, it would have been
permitted to stand on the record, courts in many instances refuse to exercise their different.
quasi equitable powers to vacate a judgement after the lapse of the term ay which it
was entered, except in clear cases, to promote the ends of justice, and where it
It is, however, argued that the defendant has suffered prejudice by reason of the fact that the
appears that the party making the application is himself without fault and has acted in
bank became the purchaser of the property at the foreclosure sale for a price greatly below that
good faith and with ordinary diligence. Laches on the part of the applicant, if
which had been agreed upon in the mortgage as the upset price of the property. In this
unexplained, is deemed sufficient ground for refusing the relief to which he might
connection, it appears that in article nine of the mortgage which was the subject of this
otherwise be entitled. Something is due to the finality of judgments, and acquiescence
foreclosure, as amended by the notarial document of July 19, 1906, the parties to this mortgage
or unnecessary delay is fatal to motions of this character, since courts are always
made a stipulation to the effect that the value therein placed upon the mortgaged properties
reluctant to interfere with judgments, and especially where they have been executed
should serve as a basis of sale in case the debt should remain unpaid and the bank should
or satisfied. The moving party has the burden of showing diligence, and unless it is
proceed to a foreclosure. The upset price stated in that stipulation for all the parcels involved in
shown affirmatively the court will not ordinarily exercise its discretion in his favor. (15
this foreclosure was P286,000. It is said in behalf of the appellant that when the bank bought in
R. C. L., 694, 695.)
the property for the sum of P110,200 it violated that stipulation.

It is stated in the affidavit that the defendant, Engracio Palanca Tanquinyeng y Limquingco, died
It has been held by this court that a clause in a mortgage providing for a tipo, or upset price,
January 29, 1910. The mortgage under which the property was sold was executed far back in
does not prevent a foreclosure, nor affect the validity of a sale made in the foreclosure
1906; and the proceedings in the foreclosure were closed by the order of court confirming the
proceedings. (Yangco vs. Cruz Herrera and Wy Piaco, 11 Phil. Rep., 402; Banco-Español
sale dated August 7, 1908. It passes the rational bounds of human credulity to suppose that a
Filipino vs. Donaldson, Sim and Co., 5 Phil. Rep., 418.) In both the cases here cited the property
man who had placed a mortgage upon property worth nearly P300,000 and had then gone away
was purchased at the foreclosure sale, not by the creditor or mortgagee, but by a third party.
from the scene of his life activities to end his days in the city of Amoy, China, should have long
Whether the same rule should be applied in a case where the mortgagee himself becomes the
remained in ignorance of the fact that the mortgage had been foreclosed and the property sold,
purchaser has apparently not been decided by this court in any reported decision, and this
even supposing that he had no knowledge of those proceedings while they were being
question need not here be considered, since it is evident that if any liability was incurred by the
conducted. It is more in keeping with the ordinary course of things that he should have acquired
bank by purchasing for a price below that fixed in the stipulation, its liability was a personal
information as to what was transpiring in his affairs at Manila; and upon the basis of this rational
liability derived from the contract of mortgage; and as we have already demonstrated such a
assumption we are authorized, in the absence of proof to the contrary, to presume that he did
liability could not be the subject of adjudication in an action where the court had no jurisdiction
have, or soon acquired, information as to the sale of his property.
over the person of the defendant. If the plaintiff bank became liable to account for the difference
between the upset price and the price at which in bought in the property, that liability remains
The Code of Civil Procedure, indeed, expressly declares that there is a presumption that things unaffected by the disposition which the court made of this case; and the fact that the bank may
have happened according to the ordinary habits of life (sec. 334 [26]); and we cannot conceive have violated such an obligation can in no wise affect the validity of the judgment entered in the
of a situation more appropriate than this for applying the presumption thus defined by the Court of First Instance.
lawgiver. In support of this presumption, as applied to the present case, it is permissible to
consider the probability that the defendant may have received actual notice of these proceedings
In connection with the entire failure of the motion to show either a meritorious defense to the
from the unofficial notice addressed to him in Manila which was mailed by an employee of the
action or that the defendant had suffered any prejudice of which the law can take notice, we may
bank's attorneys. Adopting almost the exact words used by the Supreme Court of the United
be permitted to add that in our opinion a motion of this kind, which proposes to unsettle judicial
States in Grannis vs. Ordeans (234 U. S., 385; 58 L. ed., 1363), we may say that in view of the
proceedings long ago closed, can not be considered with favor, unless based upon grounds
well-known skill of postal officials and employees in making proper delivery of letters defectively
which appeal to the conscience of the court. Public policy requires that judicial proceedings be
addressed, we think the presumption is clear and strong that this notice reached the defendant,
upheld. The maximum here applicable is non quieta movere. As was once said by Judge
there being no proof that it was ever returned by the postal officials as undelivered. And if it was
Brewer, afterwards a member of the Supreme Court of the United States:
delivered in Manila, instead of being forwarded to Amoy, China, there is a probability that the
Public policy requires that judicial proceedings be upheld, and that titles obtained in against a nonresident, after publication in pursuance of these provisions. Many years later the
those proceedings be safe from the ruthless hand of collateral attack. If technical validity of the proceedings was called in question in another action. It was proved from the files
defects are adjudged potent to destroy such titles, a judicial sale will never realize that of an ancient periodical that publication had been made in its columns as required by law; but no
value of the property, for no prudent man will risk his money in bidding for and buying proof was offered to show the publication of the order at the church, or the posting of it at the
that title which he has reason to fear may years thereafter be swept away through front door of the court-house. It was insisted by one of the parties that the judgment of the court
some occult and not readily discoverable defect. (Martin vs. Pond, 30 Fed., 15.) was void for lack of jurisdiction. But the Supreme Court of the United States said:

In the case where that language was used an attempt was made to annul certain foreclosure The court which made the decree . . . was a court of general jurisdiction. Therefore
proceedings on the ground that the affidavit upon which the order of publication was based every presumption not inconsistent with the record is to be indulged in favor of its
erroneously stated that the State of Kansas, when he was in fact residing in another State. It jurisdiction. . . . It is to be presumed that the court before making its decree took care
was held that this mistake did not affect the validity of the proceedings. of to see that its order for constructive service, on which its right to make the decree
depended, had been obeyed.
In the preceding discussion we have assumed that the clerk failed to send the notice by post as
required by the order of the court. We now proceed to consider whether this is a proper It is true that in this case the former judgment was the subject of collateral , or indirect attack,
assumption; and the proposition which we propose to establish is that there is a legal while in the case at bar the motion to vacate the judgment is direct proceeding for relief against
presumption that the clerk performed his duty as the ministerial officer of the court, which it. The same general presumption, however, is indulged in favor of the judgment of a court of
presumption is not overcome by any other facts appearing in the cause. general jurisdiction, whether it is the subject of direct or indirect attack the only difference being
that in case of indirect attack the judgment is conclusively presumed to be valid unless the
record affirmatively shows it to be void, while in case of direct attack the presumption in favor of
In subsection 14 of section 334 of the Code of Civil Procedure it is declared that there is a
its validity may in certain cases be overcome by proof extrinsic to the record.
presumption "that official duty has been regularly performed;" and in subsection 18 it is declared
that there is a presumption "that the ordinary course of business has been followed." These
presumptions are of course in no sense novelties, as they express ideas which have always The presumption that the clerk performed his duty and that the court made its decree with the
been recognized. Omnia presumuntur rite et solemniter esse acta donec probetur in contrarium. knowledge that the requirements of law had been complied with appear to be amply sufficient to
There is therefore clearly a legal presumption that the clerk performed his duty about mailing this support the conclusion that the notice was sent by the clerk as required by the order. It is true
notice; and we think that strong considerations of policy require that this presumption should be that there ought to be found among the papers on file in this cause an affidavit, as required by
allowed to operate with full force under the circumstances of this case. A party to an action has section 400 of the Code of Civil Procedure, showing that the order was in fact so sent by the
no control over the clerk of the court; and has no right to meddle unduly with the business of the clerk; and no such affidavit appears. The record is therefore silent where it ought to speak. But
clerk in the performance of his duties. Having no control over this officer, the litigant must the very purpose of the law in recognizing these presumptions is to enable the court to sustain a
depend upon the court to see that the duties imposed on the clerk are performed. prior judgment in the face of such an omission. If we were to hold that the judgment in this case
is void because the proper affidavit is not present in the file of papers which we call the record,
the result would be that in the future every title in the Islands resting upon a judgment like that
Other considerations no less potent contribute to strengthen the conclusion just stated. There is
now before us would depend, for its continued security, upon the presence of such affidavit
no principle of law better settled than that after jurisdiction has once been required, every act of
among the papers and would be liable at any moment to be destroyed by the disappearance of
a court of general jurisdiction shall be presumed to have been rightly done. This rule is applied to
that piece of paper. We think that no court, with a proper regard for the security of judicial
every judgment or decree rendered in the various stages of the proceedings from their initiation
proceedings and for the interests which have by law been confided to the courts, would incline to
to their completion (Voorhees vs. United States Bank, 10 Pet., 314; 35 U. S., 449); and if the
favor such a conclusion. In our opinion the proper course in a case of this kind is to hold that the
record is silent with respect to any fact which must have been established before the court could
legal presumption that the clerk performed his duty still maintains notwithstanding the absence
have rightly acted, it will be presumed that such fact was properly brought to its knowledge. (The
from the record of the proper proof of that fact.
Lessee of Grignon vs. Astor, 2 How., 319; 11 L. ed., 283.)

In this connection it is important to bear in mind that under the practice prevailing in the
In making the order of sale [of the real state of a decedent] the court are presumed to
Philippine Islands the word "record" is used in a loose and broad sense, as indicating the
have adjudged every question necessary to justify such order or decree, viz: The
collective mass of papers which contain the history of all the successive steps taken in a case
death of the owners; that the petitioners were his administrators; that the personal
and which are finally deposited in the archives of the clerk's office as a memorial of the litigation.
estate was insufficient to pay the debts of the deceased; that the private acts of
It is a matter of general information that no judgment roll, or book of final record, is commonly
Assembly, as to the manner of sale, were within the constitutional power of the
kept in our courts for the purpose of recording the pleadings and principal proceedings in actions
Legislature, and that all the provisions of the law as to notices which are directory to
which have been terminated; and in particular, no such record is kept in the Court of First
the administrators have been complied with. . . . The court is not bound to enter upon
Instance of the city of Manila. There is, indeed, a section of the Code of Civil Procedure which
the record the evidence on which any fact was decided. (Florentine vs. Barton, 2
directs that such a book of final record shall be kept; but this provision has, as a matter of
Wall., 210; 17 L. ed., 785.) Especially does all this apply after long lapse of time.
common knowledge, been generally ignored. The result is that in the present case we do not
have the assistance of the recitals of such a record to enable us to pass upon the validity of this
Applegate vs. Lexington and Carter County Mining Co. (117 U. S., 255) contains an instructive judgment and as already stated the question must be determined by examining the papers
discussion in a case analogous to that which is now before us. It there appeared that in order to contained in the entire file.
foreclose a mortgage in the State of Kentucky against a nonresident debtor it was necessary
that publication should be made in a newspaper for a specified period of time, also be posted at
But it is insisted by counsel for this motion that the affidavit of Bernardo Chan y Garcia showing
the front door of the court house and be published on some Sunday, immediately after divine
that upon April 4, 1908, he sent a notification through the mail addressed to the defendant at
service, in such church as the court should direct. In a certain action judgment had been entered
Manila, Philippine Islands, should be accepted as affirmative proof that the clerk of the court
failed in his duty and that, instead of himself sending the requisite notice through the mail, he means recognized by law whereby a defeated party can, by a proceeding in the same cause,
relied upon Bernardo to send it for him. We do not think that this is by any means a necessary procure a judgment to be set aside, with a view to the renewal of the litigation.
inference. Of course if it had affirmatively appeared that the clerk himself had attempted to
comply with this order and had directed the notification to Manila when he should have directed
The Code of Civil Procedure purports to be a complete system of practice in civil causes, and it
it to Amoy, this would be conclusive that he had failed to comply with the exact terms of the
contains provisions describing with much fullness the various steps to be taken in the conduct of
order; but such is not this case. That the clerk of the attorneys for the plaintiff erroneously sent a
such proceedings. To this end it defines with precision the method of beginning, conducting, and
notification to the defendant at a mistaken address affords in our opinion very slight basis for
concluding the civil action of whatever species; and by section 795 of the same Code it is
supposing that the clerk may not have sent notice to the right address.
declared that the procedure in all civil action shall be in accordance with the provisions of this
Code. We are therefore of the opinion that the remedies prescribed in sections 113 and 513 are
There is undoubtedly good authority to support the position that when the record states the exclusive of all others, so far as relates to the opening and continuation of a litigation which has
evidence or makes an averment with reference to a jurisdictional fact, it will not be presumed been once concluded.
that there was other or different evidence respecting the fact, or that the fact was otherwise than
stated. If, to give an illustration, it appears from the return of the officer that the summons was
The motion in the present case does not conform to the requirements of either of these
served at a particular place or in a particular manner, it will not be presumed that service was
provisions; and the consequence is that in our opinion the action of the Court of First Instance in
also made at another place or in a different manner; or if it appears that service was made upon
dismissing the motion was proper.
a person other than the defendant, it will not be presumed, in the silence of the record, that it
was made upon the defendant also (Galpin vs. Page, 18 Wall., 350, 366; Settlemier vs. Sullivan,
97 U. S., 444, 449). While we believe that these propositions are entirely correct as applied to If the question were admittedly one relating merely to an irregularity of procedure, we cannot
the case where the person making the return is the officer who is by law required to make the suppose that this proceeding would have taken the form of a motion in the cause, since it is
return, we do not think that it is properly applicable where, as in the present case, the affidavit clear that, if based on such an error, the came to late for relief in the Court of First Instance. But
was made by a person who, so far as the provisions of law are concerned, was a mere as we have already seen, the motion attacks the judgment of the court as void for want of
intermeddler. jurisdiction over the defendant. The idea underlying the motion therefore is that inasmuch as the
judgment is a nullity it can be attacked in any way and at any time. If the judgment were in fact
void upon its face, that is, if it were shown to be a nullity by virtue of its own recitals, there might
The last question of importance which we propose to consider is whether a motion in the cause
possibly be something in this. Where a judgment or judicial order is void in this sense it may be
is admissible as a proceeding to obtain relief in such a case as this. If the motion prevails the
said to be a lawless thing, which can be treated as an outlaw and slain at sight, or ignored
judgment of July 2, 1908, and all subsequent proceedings will be set aside, and the litigation will
wherever and whenever it exhibits its head.
be renewed, proceeding again from the date mentioned as if the progress of the action had not
been interrupted. The proponent of the motion does not ask the favor of being permitted to
interpose a defense. His purpose is merely to annul the effective judgment of the court, to the But the judgment in question is not void in any such sense. It is entirely regular in form, and the
end that the litigation may again resume its regular course. alleged defect is one which is not apparent upon its face. It follows that even if the judgment
could be shown to be void for want of jurisdiction, or for lack of due process of law, the party
aggrieved thereby is bound to resort to some appropriate proceeding to obtain relief. Under
There is only one section of the Code of Civil Procedure which expressly recognizes the
accepted principles of law and practice, long recognized in American courts, a proper remedy in
authority of a Court of First Instance to set aside a final judgment and permit a renewal of the
such case, after the time for appeal or review has passed, is for the aggrieved party to bring an
litigation in the same cause. This is as follows:
action to enjoin the judgment, if not already carried into effect; or if the property has already
been disposed of he may institute suit to recover it. In every situation of this character an
SEC. 113. Upon such terms as may be just the court may relieve a party or legal appropriate remedy is at hand; and if property has been taken without due process, the law
representative from the judgment, order, or other proceeding taken against him concedes due process to recover it. We accordingly old that, assuming the judgment to have
through his mistake, inadvertence, surprise, or excusable neglect; Provided, That been void as alleged by the proponent of this motion, the proper remedy was by an original
application thereof be made within a reasonable time, but in no case exceeding six proceeding and not by motion in the cause. As we have already seen our Code of Civil
months after such judgment, order, or proceeding was taken. Procedure defines the conditions under which relief against a judgment may be productive of
conclusion for this court to recognize such a proceeding as proper under conditions different
from those defined by law. Upon the point of procedure here involved, we refer to the case of
An additional remedy by petition to the Supreme Court is supplied by section 513 of the same
People vs. Harrison (84 Cal., 607) wherein it was held that a motion will not lie to vacate a
Code. The first paragraph of this section, in so far as pertinent to this discussion, provides as
judgment after the lapse of the time limited by statute if the judgment is not void on its face; and
in all cases, after the lapse of the time limited by statute if the judgment is not void on its face;
and all cases, after the lapse of such time, when an attempt is made to vacate the judgment by a
When a judgment is rendered by a Court of First Instance upon default, and a party proceeding in court for that purpose an action regularly brought is preferable, and should be
thereto is unjustly deprived of a hearing by fraud, accident, mistake or excusable required. It will be noted taken verbatim from the California Code (sec. 473).
negligence, and the Court of First Instance which rendered the judgment has finally
adjourned so that no adequate remedy exists in that court, the party so deprived of a
The conclusions stated in this opinion indicate that the judgment appealed from is without error,
hearing may present his petition to the Supreme Court within sixty days after he first
and the same is accordingly affirmed, with costs. So ordered.
learns of the rendition of such judgment, and not thereafter, setting forth the facts and
praying to have judgment set aside. . . .
Arellano, C.J., Torres, Carson, and Avanceña, JJ., concur.
It is evident that the proceeding contemplated in this section is intended to supplement the
remedy provided by section 113; and we believe the conclusion irresistible that there is no other G.R. No. L-18164 January 23, 1967
WILLIAM F. GEMPERLE, plaintiff-appellant, Inasmuch as the alleged absence of a cause of action against Mrs. Schenker is premised upon
vs. the alleged lack of jurisdiction over the person of Schenker, which cannot be sustained, it follows
HELEN SCHENKER and PAUL SCHENKER as her husband, defendants-appellees. that the conclusion drawn therefore from is, likewise, untenable.

Gamboa & Gamboa for plaintiff-appellant. Wherefore, the decision appealed from should be, is hereby, reversed, and the case remanded
A. R. Narvasa for defendants-appellees. to the lower court for proceedings, with the costs of this instance defendants-appellees. It is so
G.R. No. 168747 October 19, 2007
Appeal, taken by plaintiff, William F. Gemperle, from a decision of the Court of First Instance of
Rizal dismissing this case for lack of jurisdiction over the person of defendant Paul Schenker VICTORIA REGNER, Petitioner,
and for want of cause of action against his wife and co-defendant, Helen Schenker said Paul vs.
Schenker "being in no position to be joined with her as party defendant, because he is beyond CYNTHIA R. LOGARTA, TERESA R. TORMIS and CEBU COUNTRY CLUB,
the reach of the magistracy of the Philippine courts." Inc., Respondents.

The record shows that sometime in 1952, Paul Schenker-hereinafter referred to as Schenker — DECISION
acting through his wife and attorney-in-fact, Helen Schenker — herein-after referred to as Mrs.
Schenker — filed with the Court of First Instance of Rizal, a complaint — which was docketed as
Civil Case No. Q-2796 thereof — against herein plaintiff William F. Gemperle, for the
enforcement of Schenker's allegedly initial subscription to the shares of stock of the Philippines-
Swiss Trading Co., Inc. and the exercise of his alleged pre-emptive rights to the then unissued This Petition for Review on Certiorari seeks to reverse the Decision1 dated 6 May 2005 of the
original capital stock of said corporation and the increase thereof, as well as for an accounting Court of Appeals in CA-G.R. CV No. 71028 entitled, "Victoria Regner v. Cynthia Logarta, Teresa
and damages. Alleging that, in connection with said complaint, Mrs. Schenker had caused to be R. Tormis and Cebu Country Club, Inc.," which affirmed the Order dated 9 November 2000 of
published some allegations thereof and other matters, which were impertinent, irrelevant and the Regional Trial Court (RTC) of Cebu, granting herein respondents’ motion to dismiss Civil
immaterial to said case No. Q-2796, aside from being false and derogatory to the reputation, Case No. CEB 23927. The Order dated 9 November 2000 of the RTC dismissed herein
good name and credit of Gemperle, "with the only purpose of attacking" his" honesty, integrity petitioner’s complaint for declaration of nullity of a deed of donation, for failure to serve
and reputation" and of bringing him "into public hatred, discredit, disrepute and contempt as a summons on Cynthia Logarta, an indispensable party therein.
man and a businessman", Gemperle commenced the present action against the Schenkers for
the recovery of P300,000 as damages, P30,000 as attorney's fees, and costs, in addition to
praying for a judgment ordering Mrs. Schenker "to retract in writing the said defamatory Civil Case No. CEB. 23927 arose from the following factual antecedents:
expressions". In due course, thereafter, the lower court, rendered the decision above referred to.
A reconsiderating thereof having been denied, Gemperle interposed the present appeal. Luis Regner (Luis) had three daughters with his first wife, Anicita C. Regner, namely, Cynthia
Logarta (Cynthia) and Teresa Tormis (Teresa), the respondents herein, and Melinda Regner-
The first question for determination therein is whether or not the lower court had acquired Borja (Melinda).
jurisdiction over the person of Schenker. Admittedly, he, a Swiss citizen, residing in Zurich,
Switzerland, has not been actually served with summons in the Philippines, although the Herein petitioner Victoria Regner (Victoria) is the second wife of Luis.
summons address to him and Mrs. Schenker had been served personally upon her in the
Philippines. It is urged by plaintiff that jurisdiction over the person of Schenker has been secured
through voluntary appearance on his part, he not having made a special appearance to assail During the lifetime of Luis, he acquired several properties, among which is a share at Cebu
the jurisdiction over his person, and an answer having been filed in this case, stating that "the Country Club Inc., evidenced by Proprietary Ownership Certificate No. 0272. On 15 May 1998,
defendants, by counsel, answering the plaintiff's complaint, respectfully aver", which is allegedly Luis executed a Deed2 of Donation in favor of respondents Cynthia and Teresa covering
a general appearance amounting to a submission to the jurisdiction of the court, confirmed, Proprietary Ownership Certificate No. 0272 of the Cebu Country Club, Inc.
according to plaintiff, by a P225,000 counterclaim for damages set up in said answer; but this
counterclaim was set up by Mrs. Schenker alone, not including her husband. Moreover, said Luis passed away on 11 February 1999.
answer contained several affirmative defenses, one of which was lack of jurisdiction over the
person of Schenker, thus negating the alleged waiver of this defense. Nevertheless, We hold
that the lower court had acquired jurisdiction over said defendant, through service of the On 15 June 1999, Victoria filed a Complaint3 for Declaration of Nullity of the Deed of Donation
summons addressed to him upon Mrs. Schenker, it appearing from said answer that she is the with Prayer for Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order
representative and attorney-in-fact of her husband aforementioned civil case No. Q-2796, which against Cynthia and Teresa with the RTC, docketed as Civil Case No. CEB. 23927. Victoria
apparently was filed at her behest, in her aforementioned representative capacity. In other alleged in her complaint that: on 17 March 1997, Luis made a written declaration wherein he
words, Mrs. Schenker had authority to sue, and had actually sued on behalf of her husband, so stated that due to his illness and forgetfulness, he would not sign any document without the
that she was, also, empowered to represent him in suits filed against him, particularly in a case, knowledge of his lawyer, Atty. Francis Zosa; on 15 May 1998, when Luis was already very ill and
like the of the one at bar, which is consequence of the action brought by her on his behalf. no longer of sound and disposing mind, Cynthia and Teresa , conspiring and confederating with
each other, fraudulently made or caused to be fraudulently made a Deed of Donation whereby
they made it appear that Luis donated to them Proprietary Ownership Certificate No. 0272; since
Luis no longer had the ability to write or affix his signature, Melinda, acting under the influence of
her sisters, Cynthia and Teresa, fraudulently manipulated the hand of Luis so that he could affix proceedings and clog the court dockets as well. The afore-cited rule was precisely crafted to
his thumbmark on the assailed Deed of Donation; on 8 February 1998, or three days before the meet situations similar to the present case to avoid unnecessary delays.
death of Luis, and when he was already in comatose condition at the Cebu Doctors’ Hospital,
Melinda, Teresa, and Cynthia caused the preparation of an affidavit to the effect that Luis
It has to be emphasized that it is incumbent upon the plaintiff [Victoria Regner] to move with
affirmed the Deed of Donation he allegedly executed earlier by lifting his hand to affix his
leave of court for the extraterritorial service of summons. Taking into account the considerable
thumbmark on the said affidavit.
time that had elapsed from the filing of the complaint on June 15, 1999 until defendant-appellee
Teresa R. Tormis, through counsel, filed a motion to dismiss on September 12, 2000, or
Sheriff Melchor A. Solon served the summonses on Cynthia and Teresa at the Borja Family approximately fifteen (15) months, without any act on the part of plaintiff-appellant [Victoria
Clinic in Tagbilaran City wherein Melinda worked as a doctor, but Melinda refused to receive the Regner] to move for extraterritorial service of summons upon the person of defendant-appellee
summonses for her sisters and informed the sheriff that their lawyer, Atty. Francis Zosa, would Cynthia Logarta renders plaintiff-appellant’s [Victoria Regner] complaint dismissible for failure to
be the one to receive the same. prosecute her action for unreasonable length of time under Section 3, Rule 17, Revised Rules of
Court, x x x.7
Upon her arrival in the Philippines, on 1 June 2000, Teresa was personally served the summons
at Room 304, Regency Crest Condominium, Banilad, Cebu City. She filed her Answer4 with Hence, this appeal via petition8 for review on certiorari filed by petitioner raising the following
counterclaim with the RTC on 6 June 2000. assignment of errors:

Subsequently, on 12 September 2002, Teresa filed a motion to dismiss Civil Case No. CEB THE COURT OF APPEALS ERRED IN HOLDING THAT THE DELAY IN SERVING SUMMONS
23927 because of petitioner’s failure to prosecute her action for an unreasonable length of time. ON ONE OF THE DEFENDANTS CONSTITUTES A FAILURE TO PROSECUTE
Petitioner opposed5 the motion and filed her own motion to set the case for pre-trial, to which
Teresa filed her rejoinder on the ground that their sister, Cynthia, an indispensable party, had
not yet been served a summons. Thus, Teresa prayed for the dismissal of petitioner’s complaint, THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT THE ANSWER FILED BY
as the case would not proceed without Cynthia’s presence. ONE INDIVIDUAL DEFENDANT REDOUNDS TO THE BENEFIT OF THE OTHER
On 9 November 2000, the RTC issued an Order6 granting respondent Teresa’s motion to
dismiss, pertinent portions of which read:
From the foregoing, this Court identifies the issues to be resolved in this petition as: (1) Whether
a co-donee is an indispensable party in an action to declare the nullity of the deed of donation,
Considering that the donees in the Deed of Donation are Cynthia R. Logarta and Teresa R.
and (2) whether delay in the service of summons upon one of the defendants constitutes failure
Tormis, they are therefore an (sic) indispensable party (sic). In the case of Quisumbing vs. Court
to prosecute that would warrant dismissal of the complaint.
of Appeals, 189 SCRA 325, indispensable parties are those with such an interest in the
controversy that a final decree would necessarily affect their rights so that the court could not
proceed without their presence A Court must acquire jurisdiction over the persons of indispensable parties before it can validly
pronounce judgments personal to the parties. Courts acquire jurisdiction over a party plaintiff
upon the filing of the complaint. On the other hand, jurisdiction over the person of a party
Wherefore, in view of the foregoing, the instant case is hereby dismissed without prejudice.
defendant is assured upon the service of summons in the manner required by law or otherwise
by his voluntary appearance. As a rule, if a defendant has not been summoned, the court
A motion for reconsideration was filed by petitioner, but the same was denied in an Order dated acquires no jurisdiction over his person, and a personal judgment rendered against such
14 February 2001. defendant is null and void.10 A decision that is null and void for want of jurisdiction on the part of
the trial court is not a decision in the contemplation of law and, hence, it can never become final
and executory.11
Aggrieved, petitioner appealed to the Court of Appeals. On 6 May 2005, the Court of Appeals
rendered a Decision denying the appeal and affirming in toto the order of dismissal of the
complaint by the RTC and the denial of the motion for reconsideration thereof. The Court of Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest
Appeals ratiocinated that petitioner’s failure to move for an extraterritorial service of summons without whom there can be no final determination of an action. As such, they must be joined
constitutes failure to prosecute for an unreasonable length of time, thus: either as plaintiffs or as defendants. The general rule with reference to the making of parties in a
civil action requires, of course, the joinder of all necessary parties where possible, and the
joinder of all indispensable parties under any and all conditions, their presence being a sine qua
[T]he plaintiff-appellant [Victoria Regner] should have moved for the extraterritorial service of non for the exercise of judicial power.12 It is precisely "when an indispensable party is not before
summons for both defendants-appellees Teresa R. Tormis and Cynthia R. Logarta as they were the court [that] the action should be dismissed."13 The absence of an indispensable party
not residing and were not found in the Philippines when plaintiff-appellant [Victoria Regner] filed
renders all subsequent actions of the court null and void for want of authority to act, not only as
this case below. Although defendant-appellant Teresa Tormis was personally served with to the absent parties but even as to those present.14
summons on June 1, 2000 when she came to the Philippines but the same was only effected
after a long wait or after the lapse of almost one year from the date the complaint was filed on
June 15, 1999. To allow this practice would be to make the continuation of like proceedings As we ruled in Alberto v. Mananghala15 :
before the courts dependent on when the defendants would be personally served with summons
by the time they would come to the Philippines, which would only unnecessarily delay the
In an action for recovery of property against a person who purchased it from another who in turn In Servicewide Specialists, Incorporated v. Court of Appeals,17 this Court held that no final
acquired it from others by the same means or by donation or otherwise, the predecessors of determination of a case could be made if an indispensable party is not legally present therein:
defendants are indispensable parties if the transfers, if not voided, may bind plaintiff. (Garcia vs.
Reyes, 17 Phil. 127.) In the latter case, this Court held:
An indispensable party is one whose interest will be affected by the court’s action in the
litigation, and without whom no final determination of the case can be had. The party’s interest in
In order to bring this suit duly to a close, it is imperative to determine the only question raised in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other
connection with the pending appeal, to wit, whether all the persons who intervened in the matter parties that his legal presence as a party to the proceeding is an absolute necessity. In his
of the transfers and donation herein referred to, are or are not necessary parties to this suit, absence there cannot be a resolution of the dispute of the parties before the court which is
since it is asked in the complaint that the said transfers and donation be declared null and void – effective, complete, or equitable.
an indispensable declaration for the purpose, in a proper case, of concluding the plaintiff to be
the sole owner of the house in dispute.
The rationale for treating all the co-owners of a property as indispensable parties in a suit
involving the co-owned property is explained in Arcelona v. Court of Appeals18 :
If such a declaration of annulment can directly affect the persons who made and who were
concerned in the said transfers, nothing could be more proper and just than to hear them in the
As held by the Supreme Court, were the courts to permit an action in ejectment to be maintained
litigation, as parties interested in maintaining the validity of those transactions, and therefore,
by a person having merely an undivided interest in any given tract of land, a judgment in favor of
whatever be the nature of the judgment rendered, Francisco Reyes, Dolores Carvajal, Alfredo
the defendants would not be conclusive as against the other co-owners not parties to the suit,
Chicote, Vicente Miranda, and Rafael Sierra, besides the said minors, must be included in the
and thus the defendant in possession of the property might be harassed by as many succeeding
case as defendants." (Garcia vs. Reyes, 17 Phil., 130-131.)
actions of ejectment, as there might be co-owners of the title asserted against him. The purpose
of this provision was to prevent multiplicity of suits by requiring the person asserting a right
It takes no great degree of legal sophistication to realize that Cynthia and Teresa are against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons
indispensable parties to Civil Case No. CEB 23927. Cynthia and Teresa allegedly derived their standing in the same position, so that the whole matter in dispute may be determined once and
rights to the subject property by way of donation from their father Luis. The central thrust of the for all in one litigation.
petitioner’s complaint in Civil Case No. CEB 23927 was that Luis could not have donated
Proprietary Ownership Certificate No. 0272 to his daughters Cynthia and Teresa, as Luis was
Applying the foregoing definitions and principles to the present case, this Court finds that any
already very ill and no longer of sound and disposing mind at the time of donation on 15 May
decision in Civil Case No. CEB 23927 cannot bind Cynthia, and the Court cannot nullify the
1997. Accordingly, the prayer in petitioner’s complaint was for the trial court to declare null and
donation of the property she now co-owns with Teresa, even if limited only to the portion
void the Deed of Donation and to restrain the Cebu Country Club, Inc. from transferring title and
belonging to Teresa, to whom summons was properly served, since ownership of the property is
ownership of Proprietary Ownership Certificate No. 0272 to Cynthia and Teresa.
still pro indiviso. Obviously, Cynthia is an indispensable party in Civil Case No. CEB 23927
without whom the lower court is barred from making a final adjudication as to the validity of the
Thus, based on the Deed of Donation, Teresa and Cynthia are co-owners of Proprietary entire donation. Without the presence of indispensable parties to a suit or proceeding, a
Membership Certificate No. 0272 of Cebu Country Club, Inc. The country club membership judgment therein cannot attain finality.19
certificate is undivided and it is impossible to pinpoint which specific portion of the property
belongs to either Teresa or Cynthia. Indeed, both Teresa and Cynthia are indispensable parties
Being an indispensable party in Civil Case No. CEB 23927, the trial court must also acquire
in Civil Case No. CEB 23927.
jurisdiction over Cynthia’s person through the proper service of summons.

An indispensable party has been defined as follows:

Based on the foregoing disquisitions, the issue of whether the answer filed by Teresa should
benefit Cynthia who was not served summons need not be discussed.
An indispensable party is a party who has such an interest in the controversy or subject matter
that a final adjudication cannot be made, in his absence, without injuring or affecting that
As to determine whether Cynthia was properly served a summons, it will be helpful to determine
interest, a party who has not only an interest in the subject matter of the controversy, but also
first the nature of the action filed against Cynthia and Teresa by petitioner Victoria, whether it is
has an interest of such nature that a final decree cannot be made without affecting his interest or
an action in personam, in rem or quasi in rem. This is because the rules on service of summons
leaving the controversy in such a condition that its final determination may be wholly inconsistent
embodied in Rule 14 apply according to whether an action is one or the other of these actions.
with equity and good conscience. It has also been considered that an indispensable party is a
person in whose absence there cannot be a determination between the parties already before
the court which is effective, complete, or equitable. Further, an indispensable party is one who In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a
must be included in an action before it may properly go forward. contract or the recovery of damages.20 In contrast, in a real action, the plaintiff seeks the
recovery of real property; or, as indicated in Section 2(a), Rule 4 of the then Rules of Court, a
real action is an action affecting title to real property or for the recovery of possession, or for
A person is not an indispensable party, however, if his interest in the controversy or subject
partition or condemnation of, or foreclosure of mortgage on, real property. An action in personam
matter is separable from the interest of the other parties, so that it will not necessarily be directly
is an action against a person on the basis of his personal liability, while an action in rem is an
or injuriously affected by a decree which does complete justice between them. Also, a person is
action against the thing itself, instead of against the person.21
not an indispensable party if his presence would merely permit complete relief between him and
those already parties to the action, or if he has no interest in the subject matter of the action. It is
not a sufficient reason to declare a person to be an indispensable party that his presence will In an action in personam, personal service of summons or, if this is not possible and he cannot
avoid multiple litigation.16 be personally served, substituted service, as provided in Section 7, Rule 14 of the Rules of
Court,22 is essential for the acquisition by the court of jurisdiction over the person of a defendant
who does not voluntarily submit himself to the authority of the court. 23 If defendant cannot be Philippines and can be served summonses and other processes at the Borja Family Clinic,
served a summons because he is temporarily abroad, but is otherwise a Philippine resident, Bohol. Pertinent portions of the Complaint read:
service of summons may, by leave of court, be made by publication.24 Otherwise stated, a
resident defendant in an action in personam, who cannot be personally served a summons, may
2. Defendant Cynthia R. Logarta is a Filipino, of legal age, married to Ramon Logarta,
be summoned either by means of substituted service in accordance with Section 7, Rule 14 of
resident (sic) 463 West Vine No.201, Glendale, California, 912041, USA. She however
the Rules of Court, or by publication as provided in Sections 15 and 16 of the same Rule.
usually visits in the Philippines and can be served with summons and other processes
of this Honorable Court at Borja Family Clinic, Tagbilaran, Bohol;
In all of these cases, it should be noted, defendant must be a resident of the Philippines;
otherwise an action in personam cannot be brought because jurisdiction over his person is
3. Defendant Teresa R. Tormis is likewise a Filipino, of legal age, married to Antonio
essential to make a binding decision.
Tormis, and a resident of 2408 South Hacienda Heights, California, 19745, U.S.A. She
however usually visits in the Philippines and can be served with summons and other
On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the processes of this Honorable Court at Borja Family Clinic, Tagbilaran, Bohol. 27
defendant is not essential for giving the court jurisdiction so long as the court acquires
jurisdiction over the res. If the defendant is a nonresident and he is not found in the country,
Petitioner prayed for a declaration of nullity of the deed of donation, to restrain Cebu Country
summons may be served extraterritorially in accordance with Section 15, Rule 14 of the Rules of
Club, Inc. from transferring title and ownership of Proprietary Ownership Certificate No. 0272 to
Court, which provides:
Cynthia and Teresa, and for moral and exemplary damages. Civil Case No. CEB 23927 is
evidently an action against Cynthia and Teresa on the basis of their personal liability for the
Section 15. Extraterritorial service. - When the defendant does not reside and is not found in the alleged fraudulent transfer of the subject Country Club membership from Luis to their name. In
Philippines, and the action affects the personal status of the plaintiff or relates to, or the subject this sense, petitioner questions the participation and shares of Cynthia and Teresa in the
of which is, property within the Philippines, in which the defendant has or claims a lien or transferred Country Club membership. Moreover, the membership certificate from the Cebu
interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in Country Club, Inc. is a personal property. Thus, the action instituted by petitioner before the RTC
excluding the defendant from any interest therein, or the property of the defendant has been is in personam.
attached within the Philippines, service may, by leave of court, be effected out of the Philippines
by personal service as under Section 6; or by publication in a newspaper of general circulation in
Being an action in personam, the general rule requires the personal service of summons on
such places and for such time as the court may order, in which case a copy of the summons and
Cynthia within the Philippines, but this is not possible in the present case because Cynthia is a
order of the court shall be sent by registered mail to the last known address of the defendant, or
non-resident and is not found within the Philippines.
in any other manner the court may deem sufficient. Any order granting such leave shall specify a
reasonable time, which shall not be less than sixty (60) days after notice, within which the
defendant must answer. As Cynthia is a nonresident who is not found in the Philippines, service of summons on her must
be in accordance with Section 15, Rule 14 of the Rules of Court. Such service, to be effective
outside the Philippines, must be made either (1) by personal service; (2) by publication in a
As stated above, there are only four instances wherein a defendant who is a non-resident and is
newspaper of general circulation in such places and for such time as the court may order, in
not found in the country may be served a summons by extraterritorial service, to wit: (1) when
which case a copy of the summons and order of the court should be sent by registered mail to
the action affects the personal status of the plaintiff; (2) when the action relates to, or the subject
the last known address of the defendant; or (3) in any other manner which the court may deem
of which is property within the Philippines, on which the defendant claims a lien or an interest,
sufficient. The third mode, like the first two, must be made outside the Philippines, such as
actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in
through the Philippine Embassy in the foreign country where Cynthia resides.
excluding the defendant from any interest in property located in the Philippines; and (4) when the
defendant non-resident’s property has been attached within the Philippines. In these instances,
service of summons may be effected by (a) personal service out of the country, with leave of Since in the case at bar, the service of summons upon Cynthia was not done by any of the
court; (b) publication, also with leave of court; or (c) any other manner the court may deem authorized modes, the trial court was correct in dismissing petitioner’s complaint.
Section 3, Rule 17 of the 1997 Rules of Civil Procedure, states –
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has
jurisdiction over the res, i.e., the personal status of the plaintiff who is domiciled in the
Philippines or the property litigated or attached. Service of summons in the manner provided in SEC. 3. Dismissal due to fault of plaintiff. – If, for no justifiable cause, the plaintiff fails to appear
Section 15, Rule 14 of the Rules of Court is not for the purpose of vesting the court with on the date of the presentation of his evidence in chief on the complaint, or to prosecute his
action for an unreasonable length of time, or to comply with these Rules or any order of the
jurisdiction, but for complying with the requirements of fair play or due process, so that the
defendant will be informed of the pendency of the action against him; and the possibility that court, the complaint may be dismissed upon motion of the defendant or upon the court's own
property in the Philippines belonging to him, or in which he has an interest, might be subjected to motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same
or in a separate action. This dismissal shall have the effect of an adjudication upon the merits,
a judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is so
minded.26 unless otherwise declared by the court.

As can be gleaned from the rule, there are three instances when the complaint may be
In petitioner’s Complaint in Civil Case No. CEB No. 23427, she alleged that Cynthia is residing
at 462 West Vine No. 201, Glendale, California, 912041, U.S.A.; while Teresa is residing at 2408 dismissed due to the plaintiff's fault: (1) if he fails to appear during a scheduled trial, especially
South Hacienda Boulevard, Hacienda Heights, California, but they usually visit here in the on the date for the presentation of his evidence in chief; (2) if he fails to prosecute his action for
an unreasonable length of time; and (3) if he fails to comply with the rules or any order of the
Considering the circumstances of the case, it can be concluded that the petitioner failed to substantial rights are affected and the intention to delay is not manifest, the corresponding
prosecute the case for an unreasonable length of time. There is failure to prosecute when the motion to transfer the hearing having been filed accordingly, it is sound judicial discretion to
plaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial or when allow them (Rexwell Corp. v. Canlas, L-16746, December 30, 1961)." x x x.
postponements in the past were due to the plaintiff's own making, intended to be dilatory or
caused substantial prejudice on the part of the defendant.29
This Court recalls that the complaint herein was filed on 15 June 1999. The summonses for
Cynthia and Teresa were served on their sister Melinda at the Borja Family Clinic in Tagbilaran
While a court can dismiss a case on the ground of failure to prosecute, the true test for the City, but the latter refused to receive the same. It was only on 1 June 2000 that summons was
exercise of such power is whether, under the prevailing circumstances, the plaintiff is culpable served on Teresa at Room 304, Regency Crest Condominium, Banilad, Cebu City, when she
for want of due diligence in failing to proceed with reasonable promptitude.30 As to what was in the Philippines for a visit. However, the summons for Cynthia was never served upon
constitutes an "unreasonable length of time," within the purview of the above-quoted provision, her.1âwphi1
the Court has ruled that it "depends upon the circumstances of each particular case," and that
"the sound discretion of the court" in the determination of said question "will not be disturbed, in
Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the duty to serve
the absence of patent abuse"; and that "the burden of showing abuse of judicial discretion is
summons, this does not relieve the petitioner of her own duty as the plaintiff in a civil case to
upon the appellant since every presumption is in favor of the correctness of the court's
prosecute the case diligently. If the clerk had been negligent, it was petitioner’s duty to call the
action."31 Likewise, the concept of promptness is a relative term and must not unnecessarily be
court’s attention to that fact. It must be noted that it was not even petitioner who called the
an inflexible one. It connotes an action without hesitation and loss of time. As to what constitutes
court’s attention that summons had not been served on Cynthia, but Teresa. This despite the
the term is addressed to the consideration of the trial court, bearing in mind that while actions
fact that petitioner was aware, as early as 15 June 1999, when she filed her complaint, that the
must be disposed of with dispatch, the essential ingredient is the administration of justice and
summonses could not be served on Teresa and Cynthia, as she admitted therein that Teresa
not mere speed.32
and Cynthia were residing abroad. Petitioner as plaintiff should have asked that Cynthia and
Teresa be summoned by publication at the earliest possible time. She cannot idly sit by and wait
It is well to quote the doctrine laid in Padua v. Ericta,33 as accentuated in the subsequent case till this is done. She cannot afterwards wash her hands and say that the delay was not her fault.
Marahay v. Melicor34: She cannot simply "fold [her] hands" and say that it is the duty of the clerk of court to have the
summonses served on Cynthia and Teresa for the prompt disposition of her case. If there were
no means of summoning any of the defendants, petitioner should have so informed the court
Courts should not brook undue delays in the ventilation and determination of causes. It should
within a reasonable period of time, so that the case could be disposed of one way or another
be their constant effort to assure that litigations are prosecuted and resolved with dispatch.
and the administration of justice would not suffer delay. The non-performance of that duty by
Postponements of trials and hearings should not be allowed except on meritorious grounds; and
petitioner as plaintiff is an express ground for dismissing an action. For, indeed, this duty
the grant or refusal thereof rests entirely in the sound discretion of the Judge. It goes without
imposed upon her was precisely to spur on the slothful.
saying, however, that discretion must be reasonably and wisely exercised, in the light of the
attendant circumstances. Some reasonable deferment of the proceedings may be allowed or
tolerated to the end that cases may be adjudged only after full and free presentation of evidence For failure to diligently pursue the complaint, petitioner trifled with the right of the respondents to
by all the parties, especially where the deferment would cause no substantial prejudice to any speedy trial. It also sorely tried the patience of the court and wasted its precious time and
part. The desideratum of a speedy disposition of cases should not, if at all possible, result in the attention. To allow petitioner to wait until such time that summonses were served on
precipitate loss of a party’s right to present evidence and either in plaintiff's being non-suited or respondents would frustrate the protection against unreasonable delay in the prosecution of
the defendant's being pronounced liable under an ex parte judgment. cases and violate the constitutional mandate of speedy dispensation of justice which would in
time erode the people’s confidence in the judiciary. We take a dim view of petitioner’s
complacent attitude. Ex nihilo nihil fit.35
"[T]rial courts have x x x the duty to dispose of controversies after trial on the merits whenever
possible. It is deemed an abuse of discretion for them, on their own motion, ‘to enter a dismissal
which is not warranted by the circumstances of the case’ (Municipality of Dingras v. Bonoan, 85 Likewise, petitioner’s counsel inexplicably failed to diligently pursue the service of summonses
Phil. 458-59 [1950]). While it is true that the dismissal of an action on grounds specified under on respondents. These were acts of negligence, laxity and truancy which the court could have
Section 3, Rule 17 of the Revised Rules of Court is addressed to their discretion (Flores v. Phil. very easily avoided or timely remedied. Petitioner and her counsel could not avail themselves of
Alien Property Administrator, 107 Phil. 778 [1960]; Montelibano v. Benares, 103 Phil. 110 [1958]; this Court’s sympathy, considering their apparent complacency, if not delinquency, in the
Adorable v. Bonifacio, 105 Phil. 1269 [1959]; Inter-Island Gas Service, Inc. v. De la Gerna, L- conduct of their litigation.
17631, October 19, 1966, 18 SCRA 390), such discretion must be exercised soundly with a view
to the circumstances surrounding each particular case (Vernus-Sanciangco v. Sanciangco, L-
Considering the foregoing, we sustain the dismissal by the trial court of the petitioner’s complaint
12619, April 28, 1962, 4 SCRA 1209). If facts obtain that serve as mitigating circumstances for
for failure to prosecute for a period of more than one year (from the time of filing thereof on 15
the delay, the same should be considered and dismissal denied or set aside (Rudd v. Rogerson,
June 1997 until Teresa’s filing of a motion to dismiss).
15 ALR 2d 672; Cervi v. Greenwood, 147 Colo. 190, 362 P.2d 1050 [1961]), especially where
the suit appears to be meritorious and the plaintiff was not culpably negligent and no injury
results to defendant (27 C.J.S. 235-36; 15 ALR 3rd 680)." (Abinales vs. Court of First Instance of WHEREFORE, premises considered, the instant petition is DENIED for lack of merit and the
Zamboanga City, Br. I, 70 SCRA 590, 595). assailed Decision dated 6 May 2005 of the Court of Appeals in CA-G.R. CV No. 71028 is hereby
AFFIRMED. Costs against petitioner.
"It is true that the allowance or denial of petitions for postponement and the setting aside of
orders previously issued, rest principally upon the sound discretion of the judge to whom they SO ORDERED.
are addressed, but always predicated on the consideration that more than the mere convenience
of the courts or of the parties of the case, the ends of justice and fairness would be served
G.R. No. 159586 July 26, 2004
thereby (Camara Vda. de Zubiri v. Zubiri, et al., L-16745, December 17, 1966). When no
EUROPEAN RESOURCES AND TECHNOLOGIES, INC. and DELFIN J. provide that the German Consortium shall own fifteen percent (15%) of the equity in the joint
WENCESLAO, petitioners, venture corporation, DMWAI shall own seventy percent (70%) and LBV&A shall own fifteen
vs. percent (15%). In the event that the parties fail to execute the Shareholders’ Agreement, the
INGENIEUBURO BIRKHAHN + NOLTE, Ingeniurgesellschaft mbh and HEERS & MOU shall be considered null and void.8
BROCKSTEDT GMBH & CO., respondents.
On August 1, 2000, without the Shareholders’ Agreement having been executed, the German
Consortium and petitioner ERTI entered into a Memorandum of Agreement (MOA)9 whereby the
German Consortium ceded its rights and obligations under the Contract for Services in favor of
ERTI and assigned unto ERTI, among others, "its license from CDC to engage in the business
of providing environmental services needed in the CSEZ in connection with the waste
management within the CSEZ and other areas."10 Likewise, the parties agreed that should there
be a disagreement between or among them relative to the interpretation or implementation of the
MOA and the collateral documents including but not limited to the Contract for Services between
the German Consortium and CDC, the dispute shall be referred to a panel of arbitrators. 11

YNARES-SANTIAGO, J.: On December 11, 2000, ERTI received a letter from BN Consultants Philippines, Inc., signed by
Mr. Holger Holst for and on behalf of the German Consortium, 12 stating that the German
Consortium’s contract with DMWAI, LBV&A and ERTI has been terminated or extinguished on
Assailed in this Petition for Review under Rule 45 of the Rules of Court is the Decision1 of the the following grounds: (a) the CDC did not give its approval to the Consortium’s request for the
Court of Appeals dated May 15, 2003, which sustained the Order of the Regional Trial Court of
approval of the assignment or transfer by the German Consortium in favor of ERTI of its rights
Angeles City, Branch 61, dated June 28, 2001, and its subsequent Resolution dated August 3, and interests under the Contract for Services; (b) the parties failed to prepare and finalize the
2003 denying petitioner’s motion for reconsideration. Shareholders’ Agreement pursuant to the provision of the MOU; (c) there is no more factual or
legal basis for the joint venture to continue; and (d) with the termination of the MOU, the MOA is
European Resources and Technologies Inc. (hereinafter "ERTI"), a corporation organized and also deemed terminated or extinguished.
existing under the laws of the Republic of the Philippines, is joined by Delfin J. Wenceslao as
petitioner in this case. Ingenieuburo Birkhan + Nolte Ingiurgesellschaft mbh and Heers &
Attached to the letter was a copy of the letter of the CDC, 13 stating that the German Consortium’s
Brockstedt Gmbh & Co. are German corporations who are respondents in this case and shall be assignment of an eighty-five percent (85%) majority interest to another party violated its
collectively referred to as the "German Consortium". representation to undertake both the financial and technical aspects of the project. The dilution
of the Consortium’s interest in ERTI is a substantial modification of the Consortium’s
The German Consortium tendered and submitted its bid to the Clark Development Corporation representations which were used as bases for the award of the project to it.
("CDC") to construct, operate and manage the Integrated Waste Management Center at the
Clark Special Economic Zone ("CSEZ"). CDC accepted the German Consortium’s bid and On February 20, 2001, petitioner ERTI, through counsel, sent a letter to CDC requesting for the
awarded the contract to it. On October 6, 1999, CDC and the German Consortium executed the reconsideration of its disapproval of the agreement between ERTI and the German Consortium.
Contract for Services2 which embodies the terms and conditions of their agreement.

Before CDC could act upon petitioner ERTI’s letter, the German Consortium filed a complaint for
The Contract for Services provides that the German Consortium shall be empowered to enter injunction against herein petitioners before the Regional Trial Court of Angeles City, Branch 61,
into a contract or agreement for the use of the integrated waste management center by
docketed as Civil Case No. 10049. The German Consortium claimed that petitioner ERTI’s
corporations, local government units, entities, and persons not only within the CSEZ but also continued misrepresentation as to their right to accept solid wastes from third parties for
outside. For waste collected within the CSEZ, the German Consortium may impose a "tipping processing at the waste management center will cause irreparable damage to the Consortium
fee" per ton of waste collected from locators and residents of the CSEZ, which fees shall be
and its exclusive right to operate the waste management center at the CSEZ. Moreover,
subject to the schedule agreed upon by the parties and specified in the Contract for Services. petitioner ERTI’s acts destroy the Consortium’s credibility and undermine customer confidence
For its operations outside of the CSEZ, the German Consortium shall pay CDC US$1.50 per ton in it. Hence, the German Consortium prayed that a writ of temporary restraining order be issued
of non-hazardous solid waste collected.3 The CDC shall guarantee that nineteen thousand
against petitioner ERTI and, after hearing, a writ of preliminary injunction be likewise issued
eighteen hundred (19,800) tons per year of solid waste volume shall be collected from inside ordering petitioner ERTI to cease and desist from misrepresenting to third parties or the public
and outside the CSEZ.4 The contract has a term of twenty-five (25) years,5 during which time the that it has any right or interest in the waste management center at CSEZ.14
German Consortium shall operate the waste management center on a day-to-day basis.6

Petitioners filed their Opposition to the application for preliminary injunction on February 7, 2001.
Article VIII, Section 7 of the Contract for Services provides that the German Consortium shall The following day, February 8, 2001, petitioners sent respondents, through Mr. Holger Holst, a
undertake to organize a local corporation as its representative for this project. On April 18, 2000,
letter demanding that the parties proceed to arbitration in accordance with Section 17 of the
the German Consortium entered into a Joint Venture with D.M. Wenceslao and Associates, Inc. MOA. At the hearings on the application for injunction, petitioners objected to the presentation of
("DMWAI") and Ma. Elena B. Villarama (doing business as LBV and Associates), embodied in a evidence on the ground that the trial court had no jurisdiction over the case since the German
Memorandum of Understanding7 ("MOU") signed by the parties. Under the MOU, the parties
Consortium was composed of foreign corporations doing business in the country without a
agreed to jointly form a local corporation to which the German Consortium shall assign its rights license. Moreover, the MOA between the parties provides that the dispute should be referred to
under the Contract for Services. Pursuant to this agreement, petitioner European Resources and arbitration.
Technologies, Inc. was incorporated. The parties likewise agreed to prepare and finalize a
Shareholders’ Agreement within one (1) month from the execution of the MOU, which shall
The trial court overruled the objection and proceeded with the hearing. On June 28, 2001, the As a general rule, unlicensed foreign non-resident corporations cannot file suits in the
trial court issued an Order granting the writ of preliminary injunction.15 Petitioners filed a motion Philippines. Section 133 of the Corporation Code specifically provides:
for reconsideration, which was denied in a Resolution dated November 21, 2001.
SECTION 133. No foreign corporation transacting business in the Philippines without
On January 17, 2002, petitioners filed a petition for certiorari and prohibition under Rule 65 of the a license, or its successors or assigns, shall be permitted to maintain or intervene in
Rules of Court before the Court of Appeals, assailing the trial court’s Orders dated June 28, any action, suit or proceeding in any court or administrative agency of the Philippines,
2001 and November 21, 2001. but such corporation may be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under Philippine laws.
Meanwhile, on February 11, 2002, the temporary restraining order issued was lifted in view of
respondents’ failure to file sufficient bond.16 On September 6, 2002, all proceedings in Civil Case A corporation has legal status only within the state or territory in which it was organized. For this
No. 10049 were suspended until the petition for certiorari pending before the Court of Appeals reason, a corporation organized in another country has no personality to file suits in the
shall have been resolved.17 Philippines. In order to subject a foreign corporation doing business in the country to the
jurisdiction of our courts, it must acquire a license from the Securities and Exchange
Commission (SEC) and appoint an agent for service of process. Without such license, it cannot
On May 15, 2003, the Court of Appeals dismissed the petition for certiorari. Petitioners’ Motion
institute a suit in the Philippines.21
for Reconsideration was denied in a Resolution dated August 25, 2003.

However, there are exceptions to this rule. In a number of cases,22 we have declared a party
Hence, this petition arguing that the Court of Appeals committed reversible error in:
estopped from challenging or questioning the capacity of an unlicensed foreign corporation from
initiating a suit in our courts. In the case of Communication Materials and Design, Inc. v. Court of
(a) Ruling that petitioners are estopped from assailing the capacity of the respondents Appeals,23 a foreign corporation instituted an action before our courts seeking to enjoin a local
to institute the suit for injunction corporation, with whom it had a "Representative Agreement", from using its corporate name,
letter heads, envelopes, sign boards and business dealings as well as the foreign corporation’s
trademark. The case arose when the foreign corporation discovered that the local corporation
(b) Ruling that respondents are entitled to an injunctive writ. has violated certain contractual commitments as stipulated in their agreement. In said case, we
held that a foreign corporation doing business in the Philippines without license may sue in
(c) Not holding that the dispute is covered by the arbitration clause in the Philippine Courts a Philippine citizen or entity that had contracted with and benefited from it.
memorandum of agreement.
Hence, the party is estopped from questioning the capacity of a foreign corporation to institute
(d) Issuing the writ of preliminary injunction that is tantamount to a decision of the case an action in our courts where it had obtained benefits from its dealings with such foreign
on the merits.18 corporation and thereafter committed a breach of or sought to renege on its obligations. The rule
relating to estoppel is deeply rooted in the axiom of commodum ex injuria sua non habere
debet—no person ought to derive any advantage from his own wrong.
The petition is partly meritorious.

In the case at bar, petitioners have clearly not received any benefit from its transactions with the
There is no general rule or governing principle laid down as to what constitutes "doing" or German Consortium. In fact, there is no question that petitioners were the ones who have
"engaging in" or "transacting" business in the Philippines. Thus, it has often been held that a expended a considerable amount of money and effort preparatory to the implementation of the
single act or transaction may be considered as "doing business" when a corporation performs MOA. Neither do petitioners seek to back out from their obligations under both the MOU and the
acts for which it was created or exercises some of the functions for which it was organized.19 We MOA by challenging respondents’ capacity to sue. The reverse could not be any more accurate.
have held that the act of participating in a bidding process constitutes "doing business" because Petitioners are insisting on the full validity and implementation of their agreements with the
it shows the foreign corporation’s intention to engage in business in the Philippines. In this German Consortium.
regard, it is the performance by a foreign corporation of the acts for which it was created,
regardless of volume of business, that determines whether a foreign corporation needs a license
or not.20 To rule that the German Consortium has the capacity to institute an action against petitioners
even when the latter have not committed any breach of its obligation would be tantamount to an
unlicensed foreign corporation gaining access to our courts for protection and redress. We
Consequently, the German Consortium is doing business in the Philippines without the cannot allow this without violating the very rationale for the law prohibiting a foreign corporation
appropriate license as required by our laws. By participating in the bidding conducted by the not licensed to do business in the Philippines from suing or maintaining an action in Philippine
CDC for the operation of the waste management center, the German Consortium exhibited its courts. The object of requiring a license is not to prevent the foreign corporation from performing
intent to transact business in the Philippines. Although the Contract for Services provided for the single acts, but to prevent it from acquiring domicile for the purpose of business without taking
establishment of a local corporation to serve as respondents’ representative, it is clear from the the steps necessary to render it amenable to suits in the local courts. 24 In other words, the
other provisions of the Contract for Services as well as the letter by the CDC containing the foreign corporation is merely prevented from being in a position where it takes the good without
disapproval that it will be the German Consortium which shall manage and conduct the accepting the bad.
operations of the waste management center for at least twenty-five years. Moreover, the
German Consortium was allowed to transact with other entities outside the CSEZ for solid waste
collection. Thus, it is clear that the local corporation to be established will merely act as a conduit On the issue of whether the respondents were entitled to the injunctive writ, the petitioners claim
or extension of the German Consortium. that respondents’ right is not in esse but is rather a future right which is contingent upon a
judicial declaration that the MOA has been validly rescinded. The Court of Appeals, in its
decision, held that the MOA should be deemed subject to a suspensive condition, that is, that the benefit of a trial. Petitioners point out that the purpose of a preliminary injunction is to prevent
CDC’s prior written consent must be obtained for the validity of the assignment. threatened or continuous irremediable injury to some of the parties before their claims can be
thoroughly studied and decided. It cannot be used to railroad the main case and seek a
judgment without a full-blown trial as in the instant case.
This issue must be resolved in a separate proceeding. It must be noted that the hearing
conducted in the trial court was merely a preliminary hearing relating to the issuance of the
injunctive writ. In order to fully appreciate the facts of this case and the surrounding The Court of Appeals ruled that since petitioners did not raise this issue during the hearing on
circumstances relating to the agreements and contract involved, further proof should be the application for preliminary injunction before the trial court, the same cannot be raised for the
presented for consideration of the court. Likewise, corollary matters, such as whether either of first time on appeal and even in special civil actions for certiorari as in this case.
the parties is liable for damages and to what extent, cannot be resolved with absolute certainty,
thus rendering any decision we might make incomplete as to fully dispose of this case.
At the outset, it must be noted that with the finding that the German Consortium is without any
personality to file the petition with the trial court, the propriety of the injunction writ issued is
More importantly, it is evident that CDC must be made a proper party in any case which seeks to already moot and academic. Even assuming for the sake of argument that respondents have the
resolve the effectivity or ineffectivity of its disapproval of the assignment made between capacity to file the petition, we find merit in the issue raised by petitioners against the injunction
petitioners and respondent German Consortium. Where, as in the instant case, CDC is not writ issued.
impleaded as a party, any decision of the court which will inevitably affect or involve CDC cannot
be deemed binding on it.
Before an injunctive writ can be issued, it is essential that the following requisites are present:
(1) there must be a right in esse or the existence of a right to be protected; and (2) the act
For the same reason, petitioners’ assertion that the instant case should be referred to arbitration against which injunction to be directed is a violation of such right.29 The onus probandi is on
pursuant to the provision of the MOA is untenable. movant to show that there exists a right to be protected, which is directly threatened by the act
sought to be enjoined. Further, there must be a showing that the invasion of the right is material
and substantial and that there is an urgent and paramount necessity for the writ to prevent a
We have ruled in several cases that arbitration agreements are valid, binding, enforceable and
serious damage.30
not contrary to public policy such that when there obtains a written provision for arbitration which
is not complied with, the trial court should suspend the proceedings and order the parties to
proceed to arbitration in accordance with the terms of their agreement. 25 In the case at bar, the Thus, it is clear that for the issuance of the writ of preliminary injunction to be proper, it must be
MOA between petitioner ERTI and respondent German Consortium provided: shown that the invasion of the right sought to be protected is material and substantial, that the
right of complainant is clear and unmistakable and that there is an urgent and paramount
necessity for the writ to prevent serious damage.31 At the time of its application for an injunctive
17. Should there be a disagreement between or among the Parties relative to the
writ, respondents’ right to operate and manage the waste management center, to the exclusion
interpretation or implementation of this Agreement and the collateral documents
of or without any participation by petitioner ERTI, cannot be said to be clear and unmistakable.
including but not limited to the Contract for Services between GERMAN
The MOA executed between respondents and petitioner ERTI has not yet been judicially
CONSORTIUM and CDC and the Parties cannot resolve the same by themselves, the
declared as rescinded when the complaint was lodged in court.32 Hence, a cloud of doubt exists
same shall be endorsed to a panel of arbitrators which shall be convened in
over respondent German Consortium’s exclusive right relating to the waste management center.
accordance with the process ordained under the Arbitration Law of the Republic of the
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. 68923 dated May 15,
2003 is REVERSED and SET ASIDE. The Orders of the trial court dated June 28, 2001 and
Indeed, to brush aside a contractual agreement calling for arbitration in case of disagreement
November 21, 2001 are ANNULLED and SET ASIDE and Civil Case No. 10049 is DISMISSED
between parties would be a step backward.27 But there are exceptions to this rule. Even if there
for lack of legal capacity of respondents to institute the action. Costs against respondents.
is an arbitration clause, there are instances when referral to arbitration does not appear to be the
most prudent action. The object of arbitration is to allow the expeditious determination of a
dispute. Clearly, the issue before us could not be speedily and efficiently resolved in its entirety if SO ORDERED.
we allow simultaneous arbitration proceedings and trial, or suspension of trial pending
United States Supreme Court
ERIE R. CO. v. TOMPKINS, (1938)
As discussed earlier, the dispute between respondent German Consortium and petitioners
involves the disapproval by the CDC of the assignment by the German Consortium of its rights No. 367
under the Contract for Services to petitioner ERTI. Admittedly, the arbitration clause is contained Argued: January 31, 1938 Decided: April 25, 1938
in the MOA to which only the German Consortium and petitioner ERTI were parties. Even if the
case is brought before an arbitration panel, the decision will not be binding upon CDC who is a [304 U.S. 64, 65] Messrs. Theodore Kiendl, Harold W. Bissell, and William C. Cannon, all of
New York City, for petitioner.
non-party to the arbitration agreement. What is more, the arbitration panel will not be able to
completely dispose of all the issues of this case without including CDC in its proceedings.
Accordingly, the interest of justice would only be served if the trial court hears and adjudicates [304 U.S. 64, 68] Messrs. Fred H. Rees, Alexander L. Strouse, and Bernard G. Nemeroff, all of
the case in a single and complete proceeding. New York City (Bernard Kaufman and William Walsh, both of New York City, and Aaron L.
Danzig, of Jamaica, L.I., on the brief) for respondent.

Lastly, petitioners question the propriety of the issuance of writ of preliminary injunction claiming
[304 U.S. 64, 69]
that such is already tantamount to granting the main prayer of respondents’ complaint without
Mr. Justice BRANDEIS delivered the opinion of the Court. commercial law, where the state tribunals are called upon to perform the like functions as
ourselves, that is, to ascertain, upon general reasoning and legal analogies, what is the true
The question for decision is whether the oft-challenged doctrine of Swift v. Tyson1 shall now be exposition of the contract or [304 U.S. 64, 72] instrument, or what is the just rule furnished by
disapproved. the principles of commercial law to govern the case.'

Tompkins, a citizen of Pennsylvania, was injured on a dark night by a passing freight train of the The Court in applying the rule of section 34 to equity cases, in Mason v. United States, 260 U.S.
Erie Railroad Company while walking along its right of way at Hughestown in that state. He 545, 559 , 43 S.Ct. 200, 204, said: 'The statute, however, is merely declarative of the rule which
claimed that the accident occurred through negligence in the operation, or maintenance, of the would exist in the absence of the statute.' 2 The federal courts assumed, in the broad field of
train; that he was rightfully on the premises as licensee because on a commonly used beaten 'general law,' the power to declare rules of decision which Congress was confessedly without
footpath which ran for a short distance alongside the tracks; and that he was struck by power to enact as statutes. Doubt was repeatedly expressed as to the correctness of the
something which looked like a door projecting from one of the moving cars. To enforce that construction given section 34,3 and as to the soundness of the rule which it introduced. 4 But it
claim he brought an action in the federal court for Southern New York, which had jurisdiction was the more recent research of a competent scholar, who examined the original document,
because the company is a corporation of that state. It denied liability; and the case was tried by a which established that the construction given to it by the Court was erroneous; and that the
jury. [304 U.S. 64, 70] The Erie insisted that its duty to Tompkins was no greater than that purpose of the section was merely to make certain that, in all matters except those in which some
owed to a trespasser. It contended, among other things, that its duty to Tompkins, and hence its federal law is controlling, [304 U.S. 64, 73] the federal courts exercising jurisdiction in diversity
liability, should be determined in accordance with the Pennsylvania law; that under the law of of citizenship cases would apply as their rules of decision the law of the state, unwritten as well
Pennsylvania, as declared by its highest court, persons who use pathways along the railroad right as written. 5
of way-that is, a longitudinal pathway as distinguished from a crossing-are to be deemed
trespassers; and that the railroad is not liable for injuries to undiscovered trespassers resulting Criticism of the doctrine became widespread after the decision of Black & White Taxicab &
from its negligence, unless it be wanton or willful. Tompkins denied that any such rule had been Transfer Co. v. Brown & Yellow Taxicab & Transfer Co., 276 U.S. 518 , 48 S.Ct. 404, 57 A.L.R.
established by the decisions of the Pennsylvania courts; and contended that, since there was no 426.6 There, Brown &Yellow, a Kentucky corporation owned by Kentuckians, and the Louisville
statute of the state on the subject, the railroad's duty and liability is to be determined in federal & Nashville Railroad, also a Kentucky corporation, wished that the former should have the
courts as a matter of general law. exclusive privilege of soliciting passenger and baggage transportation at the Bowling Green, Ky.,
Railroad station; and that the Black & White, a competing Kentucky corporation, should be
The trial judge refused to rule that the applicable law precluded recovery. The jury brought in a prevented from interfering with that privilege. Knowing that such a contract would be void under
verdict of $30,000; and the judgment entered thereon was affirmed by the Circuit Court of the common law of Kentucky, it was arranged that the Brown & Yellow reincorporate under the
Appeals, which held ( 2 Cir., 90 F.2d 603, 604), that it was unnecessary to consider whether the law of Tennessee, and that the contract with the railroad should be executed there. The suit was
law of Pennsylvania was as contended, because the question was one not of local, but of general, then brought by the Tennessee corporation in the federal court for Western Kentucky to enjoin
law, and that 'upon questions of general law the federal courts are free, in absence of a local competition by the Black & White; an injunction issued by the District Court [304 U.S. 64,
statute, to exercise their independent judgment as to what the law is; and it is well settled that 74] was sustained by the Court of Appeals; and this Court, citing many decisions in which the
the question of the responsibility of a railroad for injuries caused by its servants is one of general doctrine of Swift & Tyson had been applied, affirmed the decree.
law. ... Where the public has made open and notorious use of a railroad right of way for a long
period of time and without objection, the company owes to persons on such permissive pathway Second. Experience in applying the doctrine of Swift v. Tyson, had revealed its defects, political
a duty of care in the operation of its trains. ... It is likewise generally recognized law that a jury and social; and the benefits expected to flow from the rule did not accrue. Persistence of state
may find that negligence exists toward a pedestrian using a permissive path on the railroad right courts in their own opinions on questions of common law prevented uniformity;7 and the
of way if he is hit by some object projecting from the side of the train.' [304 U.S. 64, 71] The impossibility of discovering a satisfactory line of demarcation between the province of general
Erie had contended that application of the Pennsylvania rule was required, among other things, law and that of local law developed a new well of uncertainties. 8
by section 34 of the Federal Judiciary Act of September 24, 1789, c. 20, 28 U.S.C. 725, 28
U.S.C.A. s 725, which provides: 'The laws of the several States, except where the Constitution, On the other hand, the mischievous results of the doctrine had become apparent. Diversity of
treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state
of decision in trials at common law, in the courts of the United States, in cases where they apply.' courts against those not citizens of the state. Swift v. Tyson introduced grave discrimination by
noncitizens against citizens. It made rights enjoyed under the unwritten 'general law' vary
Because of the importance of the question whether the federal court was free to disregard the according to whether enforcement was sought in the state[304 U.S. 64, 75] or in the federal
alleged rule of the Pennsylvania common law, we granted certiorari. 302 U.S. 671 , 58 S.Ct. 50, court; and the privilege of selecting the court in which the right should be determined was
82 L.Ed. --. conferred upon the noncitizen. 9 Thus, the doctrine rendered impossible equal protection of the
law. In attempting to promote uniformity of law throughout the United States, the doctrine had
First. Swift v. Tyson, 16 Pet. 1, 18, held that federal courts exercising jurisdiction on the ground prevented uniformity in the administration of the law of the state.
of diversity of citizenship need not, in matters of general jurisprudence, apply the unwritten law
of the state as declared by its highest court; that they are free to exercise an independent The discrimination resulting became in practice far-reaching. This resulted in part from the
judgment as to what the common law of the state is-or should be; and that, as there stated by Mr. broad province accorded to the so-called 'general law' as to which federal courts exercised an
Justice Story, 'the true interpretation of the 34th section limited its application to state laws, independent judgment. 10 In addition to questions of purely commercial law, 'general law' was
strictly local, that is to say, to the positive statutes of the state, and the construction thereof held to include the obligations under contracts entered into and to be performed within the state,
adopted by the local tribunals, and to rights and titles to things having a permanent locality, such 11 the extent to which a carrier operating within a state may stipulate for exemption from
as the rights and titles to real estate, and other matters immovable and intra-territorial in their liability for his own negligence or that of his employee;12 the liability for torts committed within
nature and character. It never has been supposed by us, that the section did apply, or was the state upon persons resident or property located there, even where the question of lia- [304
designed to apply, to questions of a more general nature, not at all dependent upon local statutes U.S. 64, 76] bility depended upon the scope of a property right conferred by the state; 13 and
or local usages of a fixed and permanent operation, as, for example, to the construction of the right to exemplary or punitive damages. 14 Furthermore, state decisions construing local
ordinary contracts or other written instruments, and especially to questions of general deeds,15 mineral conveyances,16 and even devises of real estate, 17 were disregarded. 18
In part the discrimination resulted from the wide range of persons held entitled to avail courts have invaded rights which in our opinion are reserved by the Constitution to the several
themselves of the federal rule by resort to the diversity of citizenship jurisdiction. Through this states.
jurisdiction individual citizens willing to remove from their own state and become citizens of
another might avail themselves of the federal rule. 19 And, without even change of residence, a Fourth. The defendant contended that by the common law of Pennsylvania as declared by its
corporate citizen of [304 U.S. 64, 77] the state could avail itself of the federal rule by highest court in Falchetti v. Pennsylvania R. Co., 307 Pa. 203, 160 A. 859, the only duty owed to
reincorporating under the laws of another state, as was done in the Taxicab Case. the plaintiff was to refrain from willful or wanton injury. The plaintiff denied that such is the
Pennsylvania law. 24 In support of their respective contentions the parties discussed and cited
The injustice and confusion incident to the doctrine of Swift v. Tyson have been repeatedly urged many decisions of the Supreme Court of the state. The Circuit Court of Appeals ruled that the
as reasons for abolishing or limiting diversity of citizenship jurisdiction. 20 Other legislative question of liability is one of general law; and on that ground declined to decide the issue of state
relief has been proposed. 21 If only a question of statutory construction were involved, we should law. As we hold this was error, the judgment is reversed and the case remanded to it for further
not be prepared to abandon a doctrine so widely applied throughout nearly a century. 22 But the proceedings in conformity with our opinion.
uncon- [304 U.S. 64, 78] stitutionality of the course pursued has now been made clear, and
compels us to do so. REVERSED.

Third. Except in matters governed by the Federal Constitution or by acts of Congress, the law to Mr. Justice CARDOZO took no part in the consideration or decision of this case.
be applied in any case is the law of the state. And whether the law of the state shall be declared
by its Legislature in a statute or by its highest court in a decision is not a matter of federal
Mr. Justice BUTLER (dissenting).
concern. There is no federal general common law. Congress has no power to declare substantive
rules of common law applicable in a state whether they be local in their nature or 'general,' be
they commercial law or a part of the law of torts. And no clause in the Constitution purports to The case presented by the evidence is a simple one. Plaintiff was severely injured in
confer such a power upon the federal courts. As stated by Mr. Justice Field when protesting in Pennsylvania. While walking on defendant's right of way along a much-used path at the end of
Baltimore & Ohio R.R. Co. v. Baugh, 149 U.S. 368, 401 , 13 S.Ct. 914, 927, against ignoring the the cross-ties of its main track, he came into collision with an open door swinging from the side
Ohio common law of fellow-servant liability: I am aware that what has been termed the general of a car in a train going in the opposite direction. Having been warned by whistle and headlight,
law of the country-which is often little less than what the judge advancing the doctrine thinks at he saw the locomo- [304 U.S. 64, 81] tive approaching and had time and space enough to step
the time should be the general law on a particular subject-has been often advanced in judicial aside and so avoid danger. To justify his failure to get out of the way, he says that upon many
opinions of this court to control a conflicting law of a state. I admit that learned judges have other occasions he had safely walked there while trains passed.
fallen into the habit of repeating this doctrine as a convenient mode of brushing aside the law of
a state in conflict with their views. And I confess that, moved and governed by the authority of Invoking jurisdiction on the ground of diversity of citizenship, plaintiff, a citizen and resident of
the great names of those judges, I have, myself, in many instances, unhesitatingly and Pennsylvania, brought this suit to recover damages against defendant, a New York corporation,
confidently, but I think now erroneously, repeated the same doctrine. But, notwithstanding the in the federal court for the Southern District of that state. The issues were whether negligence of
great names which may be cited in favor of the doctrine, and notwithstanding the frequency with defendant was a proximate cause of his injuries, and whether negligence of plaintiff contributed.
which the doctrine has been reiterated, there stands, as a perpetual protest against its repetition, He claimed that, by hauling the car with the open door, defendant violated a duty to him. The
the constitution of the United States, which recognizes and preserves the autonomy and defendant insisted that it violated no duty, and that plaintiff's injuries were caused by his own
independence of the states,- independence in their legislative and inde- [304 U.S. 64, negligence. The jury gave him a verdict on which the trial court entered judgment; the Circuit
79] pendence in their judicial departments. Supervision over either the legislative or the judicial Court of Appeals affirmed. 2 Cir ., 90 F.2d 603.
action of the states is in no case permissible except as to matters by the constitution specifically
authorized or delegated to the United States. Any interference with either, except as thus Defendant maintained, citing Falchetti v. Pennsylvania R. Co., 307 Pa. 203, 160 A. 859, and
permitted, is an invasion of the authority of the state, and, to that extent, a denial of its Koontz v. Baltimore & O.R. Co., 309 Pa. 122, 163 A. 212, that the only duty owed plaintiff was to
independence.' refrain from willfully or wantonly injuring him; it argued that the courts of Pennsylvania had so
ruled with respect to persons using a customary longitudinal path, as distinguished from one
The fallacy underlying the rule declared in Swift v. Tyson is made clear by Mr. Justice crossing the track. The plaintiff insisted that the Pennsylvania decisions did not establish the
Holmes. 23 The doctrine rests upon the assumption that there is 'a transcendental body of law rule for which the defendant contended. Upon that issue the Circuit Court of Appeals said (90
outside of any particular State but obligatory within it unless and until changed by statute,' that F.2d 603, et page 604): 'We need not go into this matter since the defendant concedes that the
federal courts have the power to use their judgment as to what the rules of common law are; and great weight of authority in other states is to the contrary. This concession is fatal to its
that in the federal courts 'the parties are entitled to an independent judgment on matters of contention, for upon questions of general law the federal courts are free, in absence of a local
general law': statute, to exercise their independent judgment as to what the law is; and it is well settled that
the question of the responsibility of a railroad for injuries caused by its servants is one of general
'But law in the sense in which courts speak of it today does not exist without some definite law.' [304 U.S. 64, 82] Upon that basis the court held the evidence sufficient to sustain a finding
authority behind it. The common law so far as it is enforced in a State, whether called common that plaintiff's injuries were caused by the negligence of defendant. It also held the question of
law or not, is not the common law generally but the law of that State existing by the authority of contributory negligence one for the jury.
that State without regard to what it may have been in England or anywhere else. ...
'The authority and only authority is the State, and if that be so, the voice adopted by the State as Defendant's petition for writ of certiorari presented two questions: Whether its duty toward
its own (whether it be of its Legislature or of its Supreme Court) should utter the last word.' plaintiff should have been determined in accordance with the law as found by the highest court
Thus the doctrine of Swift v. Tyson is, as Mr. Justice Holmes said, 'an unconstitutional of Pennsylvania, and whether the evidence conclusively showed plaintiff guilty of contributory
assumption of powers by the Courts of the United States which no lapse of time or respectable negligence. Plaintiff contends that, as always heretofore held by this Court, the issues of
array of opinion should make us hesitate to correct.' In disapproving that doctrine we do not negligence and contributory negligence are to be determined by general law against which local
hold [304 U.S. 64, 80] unconstitutional section 34 of the Federal Judiciary Act of 1789 or any decisions may not be held conclusive; that defendant relies on a solitary Pennsylvania case of
other act of Congress. We merely declare that in applying the doctrine this Court and the lower
doubtful applicability, and that, even if the decisions of the courts of that state were deemed from the holding that a [304 U.S. 64, 85] court of the United States was bound to exercise its
controlling, the same result would have to be reached. own independent judgment in the construction of a conveyance made before the state courts had
rendered an authoritative decision as to its meaning and effect. Kuhn v. Fairmont Coal Co., 215
No constitutional question was suggested or argued below or here. And as a general rule, this U.S. 349 , 30 S.Ct. 140. But that dissent accepted ( 215 U.S. 349 , at page 371, 30 S.Ct. 140) as
Court will not consider any question not raised below and presented by the petition. Olson v. 'settled' the doctrine of Swift v. Tyson, and insisted ( 215 U.S. 349 , at page 372, 30 S.Ct. 140)
United States, 292 U.S. 246, 262 , 54 S.Ct. 704, 711; Johnson v. Manhattan Ry. Co., 289 U.S. 479, merely that the case under consideration was by nature and necessity peculiarly local.
494 , 53 S.Ct. 721, 726; Gunning v. Cooley,281 U.S. 90, 98 , 50 S.Ct. 231, 234. Here it does not
decide either of the questions presented, but, changing the rule of decision in force since the Thereafter, as before, the doctrine was constantly applied. 2 In Black & White Taxicab Co. v.
foundation of the government, remands the case to be adjudged according to a standard never Brown & Yellow Taxicab Co., 276 U.S. 518 , 48 S.Ct. 404, 57 A.L.R. 426, three judges dissented.
before deemed permissible. The writer of the dissent, Mr. Justice Holmes said, however ( 276 U.S. 518 , at page 535, 48 S.Ct.
404, 409, 57 A.L.R. 426): 'I should leave Swift v. Tyson undisturbed, as I indicated in Kuhn v.
The opinion just announced states that: 'The question for decision is whether the oft-challenged Fairmont Coal Co., but I would not allow it to spread the assumed dominion into new fields.'
doctrine of Swift v. Tyson (1842, 16 Pet. 1) shall now be disapproved.'
No more unqualified application of the doctrine can be found than in decisions of this Court
That case involved the construction of the Judiciary Act of 1789, 34, 28 U.S.C.A. 725: 'The laws of speaking through Mr. Justice Holmes. United Zinc Co. v. Britt, 258 U.S. 268 , 42 S.Ct. 299, 36
the several States, except where the Constitution, treaties, or statutes of the United States A.L.R. 28; Baltimore & O.R.R. Co. v. Goodman, 275 U.S. 66, 70 , 48 S.Ct. 24, 25, 56 A.L.R. 645.
otherwise require or provide, shall be regarded as rules of decision in trials at common law, in Without in the slightest departing from that doctrine, but implicitly applying it, the strictness of
the courts of [304 U.S. 64, 83] the United States, in cases where they apply.' Expressing the the rule laid down in the Goodman Case was somewhat ameliorated by Pokora v. Wabash Ry.
view of all the members of the Court, Mr. Justice Story said (16 Pet. 1, at page 18): 'In the Co., 292 U.S. 98 , 54 S.Ct. 580, 91 A.L.R. 1049
ordinary use of language, it will hardly be contended, that the decisions of courts constitute laws.
They are, at most, only evidence of what the laws are, and are not, of themselves, laws. They are Whenever possible, consistently with standards sustained by reason and authority constituting
often reexamined, reversed, and qualified by courts themselves, whenever they are found to be the general law, this Court has followed applicable decisions of state courts. Mutual Life Co. v.
either defective, or illfounded, or otherwise incorrect. The laws of a state are more usually Johnson, 293 U.S. 335, 339 , 55 S.Ct. 154, 156. See Burgess v. Seligman, 107 U.S. 20 , 34 2 S.Ct.