Académique Documents
Professionnel Documents
Culture Documents
Same; Same; The forms in which a foreign element may appear are
many, such as the fact that one party is a resident Philippine national, and
that the other is a resident foreign corporation.—The forms in which this
foreign element may appear are many. The foreign element may simply
consist in the fact that one of the parties to a contract is an alien or has a
foreign domicile, or that a contract between nationals of one State involves
properties situated in another State. In other cases, the foreign element may
assume a complex form. In the instant case, the foreign element consisted in
the fact that private respondent Morada is a resident Philippine national, and
that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of
the employment of Morada with the petitioner SAUDIA as a flight
stewardess, events did transpire during her many occasions of travel across
national borders, particularly from Manila, Philippines to Jeddah, Saudi
Arabia, and vice versa, that caused a “conflicts” situation to arise.
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 1/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
* FIRST DIVISION.
470
471
472
ship (such as property right, contract claim) and a connecting factor or point
of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing.
Same; Same; Same; Torts; Where the action 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; The Philippines is the
situs of the tort where it is in the Philippines where the defendant allegedly
deceived the plaintiff, a citizen residing and working here, and the fact that
certain acts or parts of the injury occurred in another country is of no
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 4/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
moment, for what is important is the place where the over-all harm or the
totality of the injury to the person, reputation, social standing and human
rights of the plaintiff
473
Same; Same; Same; Same; Same; Where the Philippines is the situs of
the tort complained of and the place “having the most interest in the
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 5/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
474
475
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 6/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 451 of the Rules of Court
seeks to annul and set aside
2
the Resolution dated September 27,
1995 and 3
the Decision dated April 4
10, 1996 of 5 the Court of
Appeals 6 in CA-G.R. SP No. 36533,7
and the Orders dated August
29, 1994 and February 2, 1995 8
that were issued by the trial court in
Civil Case No. Q-93-18394.
The pertinent antecedent facts which gave 9
rise to the instant
petition, as stated in the questioned Decision, are as follows:
________________
476
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 7/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
477
________________
478
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 9/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
13 Dated November 19, 1993, and docketed as Civil Case No. Q-93-18394, Branch
89, Regional Trial Court of Quezon City.
14 Dated January 14, 1994.
15 Dated February 4, 1994.
16 Reply dated March 1, 1994.
17 Records, pp. 65-84.
18 Rollo, p. 65.
19 Supra, note 6.
20 Hon. Rodolfo A. Ortiz.
21 Dated September 19, 1994.
479
the case on the basis of Article 21 of the Civil Code, since the proper
law applicable is the law of the Kingdom of 22Saudi Arabia. On
October 14, 1994, Morada filed her Opposition (To Defendant’s
Motion for Reconsideration).
23
In the Reply filed with the trial court on October 24, 1994,
SAUDIA alleged that since its Motion for Reconsideration raised
lack of jurisdiction as its cause of action, the Omnibus Motion Rule
does not apply, even if that ground is raised for the first time on
appeal. Additionally, SAUDIA alleged that the Philippines does not
have any substantial interest in the prosecution of the instant case,
and hence, without jurisdiction to adjudicate the same. 24
Respondent Judge subsequently issued another Order dated
February 2, 1995, denying SAUDIA’s Motion for Reconsideration.
The pertinent portion of the assailed Order reads as follows:
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 10/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
480
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 11/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
On October 20,29 1995, SAUDIA filed with this Honorable Court the
instant Petition for Review with Prayer for Temporary Restraining
Order dated October 13, 1995.
However, during the pendency of the30 instant Petition, respondent
Court of Appeals rendered the Decision dated April 10, 1996, now
also assailed. It ruled that the Philippines is an appropriate forum
considering that the Amended Complaint’s basis for recovery of
damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court. It further held that certiorari is not
the proper remedy in a denial of a Motion to Dismiss, inasmuch as
the petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal.
________________
481
“I.
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-
18394 based on Article 21 of the New Civil Code since the proper law
applicable is the law of the Kingdom of Saudi Arabia inasmuch as this case
involves what is known in private international law as a ‘conflicts problem.’
Otherwise, the Republic of the Philippines will sit in judgment of the acts
done by another sovereign state which is abhorred.
II.
Within Ten (10) Days From Notice Thereof. Further, the Revised Rules of
Court should be construed with liberality pursuant to Section 2, Rule 1
thereof.
III.
Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-
G.R. SP No. 36533 entitled ‘Saudi Arabian Airlines v. Hon. Rodolfo A.
Ortiz, et al.’ and filed its April 30, 1996 Supplemental Petition For Review
With Prayer For A Temporary Restraining Order on May 7, 1996 at 10:29
a.m. or within the 15-day reglementary period as provided for under Section
1, Rule 45 of the Revised
________________
482
Rules of Court. Therefore, the decision in CA-G.R. SP No. 36533 has not
yet become final and 33executory and this Honorable Court can take
cognizance of this case.”
I.
II.
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 13/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
483
the Civil
37
Code, then the instant case is properly a matter of domestic
law.
Under the factual antecedents obtaining in this case, there is no
dispute that the interplay of events occurred in two states, the
Philippines and Saudi Arabia. 38
As stated by private respondent in her Amended Complaint
dated June 23, 1994:
________________
484
turned out, plaintiff signed a notice to her to appear before the court
on June 27, 1993. Plaintiff then returned to Manila.
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 15/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
court had tried her, together with Thamer and Allah, for
what happened in Jakarta. The court found plaintiff guilty
of (1) adultery; (2) going to a disco, dancing, and listening
to the music in violation of Islamic laws; (3) socializing
with the male crew, in contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case,
plaintiff sought the help of the Philippine Embassy in
Jeddah. The latter helped her pursue an appeal from the
decision of the court. To pay for her upkeep, she worked on
the domestic flights of defendant SAUDIA while,
ironically,
39
Thamer and Allah freely served the international
flights.”
________________
485
________________
486
“Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice give everyone his due and
observe honesty and good faith.”
“Art. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for damages.”
45
Thus, in Philippine National Bank (PNB) vs. Court of Appeals, this
Court held that:
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 17/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
487
to try and hear the case is provided for under Section 1 of Republic
Act No. 7691, to wit:
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 18/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
general class to which the proceedings in question belong. (Reyes v. Diaz, 73 Phil.
484, 487)
488
________________
49 Supra, note 37, p. 58, citing Gulf Oil Corporation v. Gilbert, 350 U.S. 501, 67
Sup. Ct. 839 (1947).
50 Omnibus Motion to Dismiss dated January 14, 1994; Reply (to Plaintiff’s
Opposition) dated February 19, 1994; Comment (to Plaintiff’s Motion to Admit
Amended Complaint dated June 23, 1994) dated July 20, 1994; Manifestation and
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 19/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
Motion to Dismiss Amended Complaint dated June 23, 1994 under date August 11,
1994; and Motion for Reconsideration dated September 19, 1994.
489
“We observe that the motion to dismiss filed on April 14, 1962, aside from
disputing the lower court’s jurisdiction over defendant’s person, prayed for
dismissal of the complaint on the ground that plaintiff’s cause of action has
prescribed. By interposing such second ground in its motion to dismiss, Ker
and Co., Ltd. availed of an affirmative defense on the basis of which it
prayed the court to resolve controversy in its favor. For the court to validly
decide the said plea of defendant Ker & Co., Ltd., it necessarily had to
acquire jurisdiction upon the latter’s person, who, being the proponent of the
affirmative defense, should be deemed to have abandoned its special
appearance and voluntarily submitted itself to the jurisdiction of the court.”
________________
490
some of the significant facts occurred in two or more states; and (2)
to what 53extent should the chosen legal system regulate the
situation.
Several theories have been propounded in order to identify the
legal system that should ultimately control. Although ideally, all
choice-of-law theories should intrinsically advance both notions of
justice and predictability, they do not always do so. The forum is
then faced with the problem of 54deciding which of these two
important values should be stressed.
Before a choice can be made, it is necessary for us to determine
under what category a certain set of facts or rules fall. This process
is known as “characterization,” or the “doctrine of qualification.” It
is the “process of deciding whether or not the facts
55
relate to the kind
of question specified in a conflicts rule.” The purpose56 of
“characterization” is to enable the forum to select the proper law.
Our starting point of analysis here is 57not a legal relation, but a
factual situation, event, or operative fact. An essential element of
conflict rules is the indication of a “test” or “connecting factor” or
“point of contact.” Choice-of-law rules invariably consist of a
factual relationship (such as property right, contract claim) and a
connecting factor or point of contact, such as the situs of the res, the
place of celebration,
58
the place of performance, or the place of
wrongdoing.
Note that one or more circumstances may be present to serve as
the possible test for the determination of the applica-
________________
53 Coquia and Pangalangan, Conflict of Laws, 1995 edition, p. 65, citing Von
Mehren, Recent Trends in Choice-of-Law Methodology, 60 Cornell L. Rev. 927
(1975).
54 Ibid.
55 Supra, note 40 at p. 94, citing Falconbridge, Essays on the Conflict of Laws, p.
50.
56 Ibid.
57 Supra, note 37 at p. 136; cf. Mussbaum, Principle of Private International Law,
p. 173; and Rabel, The Conflict of Laws: A Comparative Study, pp. 51-52.
58 Supra, note 37, p. 137.
491
________________
59 Ibid.
60 Supra, note 37 at pp. 138-139.
492
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 22/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
493
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 23/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
61 Includes the (1) German rule of elective concurrence; (2) “State of the most
significant relationship” rule (the Second Restatement of 1969); (3) State-interest
analysis; and (4) Caver’s Principle of Preference.
62 Supra, note 37, p. 396.
494
________________
63 Supra, note 59, p. 79, citing Ruben v. Irving Trust Co., 305 N.Y. 288, 305, 113
N.E. 2d 424, 431.
64 Memorandum for Petitioner, p. 22; rollo, p. 170.
65 Memorandum for Private Respondent, pp. 21-22; rollo, pp. 202-203.
66 CA Decision, p. 10; rollo, p. 97.
495
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 25/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
——o0o——
496
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 26/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
consistent holding of the court that contracts of adhesion are not invalid per
se and that it has on numerous occasions upheld the binding effect thereof.”
Also, in Philippine American General Insurance Co., Inc. vs. Sweet Lines,
Inc. this Court, speaking through the learned Justice Florenz D. Re-galado,
held: “x x x Ong Yiu vs. Court of Appeals, et al., instructs us that ‘contracts
of adhesion wherein one party imposes a ready-made form of contract on
the other x x x are contracts not entirely prohibited. The one who adheres to
the contract is in reality free to reject it entirely; if he adheres he gives his
consent.’ In the present case, not even an allegation of ignorance of a party
excuses non-compliance with the contractual stipulations since the
responsibility for ensuring full comprehension of the provisions of a
contract of carriage devolves not on the carrier but on the owner, shipper,
or consignee as the case may be.” (Emphasis supplied)
________________
* SECOND DIVISION.
497
tracts must be carefully scrutinized “in order to shield the unwary (or
weaker party) from deceptive schemes contained in ready-made
contracts.”—Greater vigilance, however, is required of the courts when
dealing with contracts of adhesion in that the said contracts must be
carefully scrutinized “in order to shield the unwary (or weaker party) from
deceptive schemes contained in ready-made covenants,” such as the bill of
lading in question. The stringent requirement which the courts are enjoined
to observe is in recognition of Article 24 of the Civil Code which mandates
that “(i)n 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
be vigilant for his protection.”
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 27/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
vs. Intermediate Appellate Court (supra), we held that even if the consignee
was not a signatory to the contract of carriage between the shipper and the
carrier, the consignee can still be bound by the contract. Speaking through
Mr. Chief Justice Narvasa, we ruled: “To begin with, there is no question of
the right, in principle, of a consignee in a bill of lading to recover from the
carrier or shipper for loss of, or damage to goods being transported under
said bill, although that document may have been—as in practice it
oftentimes is—drawn up only by the consignor and the carrier without the
intervention of the consignee. x x x.
498
other words, private respondent is bound by the whole stipulations in the bill
of lading and must respect the same.
MARTINEZ, J.:
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 28/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
________________
499
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 29/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
earlier, plaintiff contends that defendant should be held liable for the whole
value for the loss of the goods in the amount of ¥1,552,500.00 because the
terms appearing at the back of the bill of lading was so written in fine prints
and that the same was not signed by plaintiff or shipper thus, they are not
bound by the clause stated in paragraph 18 of the bill of lading. On the other
hand, defendant merely admitted that it lost the shipment but shall be liable
only up to the amount of ¥100,000.00.
“The Court subscribes to the provisions of Article 1750 of the New Civil
Code—
Art. 1750. ‘A contract fixing the sum that may be recovered by the owner or shipper
for the loss, destruction or de-
________________
500
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 30/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
Ltd. whom the appellant (Everett Steamship Corp.) contracted with for the
transportation of the lost goods.
“Even assuming arguendo that the shipper Maruman Trading Co., Ltd.
accepted the terms of the bill of lading when it delivered the cargo to the
appellant, still it does not necessarily follow that appellee Hernandez
Trading Company as consignee is bound thereby considering that the latter
was never privy to the shipping contract.
xxx xxx xxx
“Never having entered into a contract with the appellant, appellee should
therefore not be bound by any of the terms and conditions in the bill of
lading.
501
“Hence, it follows that the appellee may recover the full value of the
shipment lost, the basis of which is not the breach of contract as appellee
was never a privy to the any contract with the appellant, but is based on
Article 1735 of the New Civil Code, there being no evidence to prove
satisfactorily that the appellant has overcome the presumption of negligence
provided for in the law.”
“ART. 1749. A stipulation that the common carrier’s liabilityis limited to the
value of the goods appearing in the bill of lading,unless the shipper or
owner declares a greater value, is binding.”
“ART. 1750. A contract fixing the sum that may be recovered by the owner
or shipper for the loss, destruction, or deterioration of the goods is valid, if it
is reasonable and just under the circumstances, and has been freely and
fairly agreed upon.”
________________
3 St. Paul Fire and Marine Insurance Co. vs. Macondray & Co., 70 SCRA 122
[1976]; Sea Land Services, Inc. vs. Intermediate Appellate Court, 153 SCRA 552
[1987]; Pan American World Airways, Inc. vs. Intermediate Appellate Court, 164
SCRA 268 [1988]; Phil. Airlines, Inc. vs. Court of Appeals, 255 SCRA 63 [1996].
502
“It seems clear that even if said section 4 (5) of the Carriage of Goods by
Sea Act did not exist, the validity and binding effect of the liability
limitation clause in the bill of lading here are nevertheless fully sustainable
on the basis alone of the cited Civil Code Provisions. That said stipulation is
just and reasonable is arguable from the fact that it echoes Art. 1750 itself in
providing a limit to liability only if a greater value is not declared for the
shipment in the bill of lading. To hold otherwise would amount to
questioning the justness and fairness of the law itself, and this the private
respondent does not pretend to do. But over and above that consideration,
the just and reasonable character of such stipulation is implicit in it giving
the shipper or owner the option of avoiding accrual of liability limitation by
the simple and surely far from onerous expedient of declaring the nature and
value of the shipment in the bill of lading.”
“18. All claims for which the carrier may be liable shall be adjusted and
settled on the basis of the shipper’s net invoice cost plus freight and
insurance premiums, if paid, and in no event shall the carrier be liable for
any loss of possible profits or any consequential loss.
“The carrier shall not be liable for any loss of or any damage to or in any
connection with, goods in an amount exceeding One Hundred Thousand
Yen in Japanese Currency (¥100,000.00) or its equivalent in any other
currency per package or customary freight unit (whichever is least) unless
the value of the goods higher than this amount is declared in writing by the
shipper before receipt of the goods by the carrier and inserted in the Bill of
Lading and extra freight is paid as required.” (Emphasis supplied)
________________
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 32/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
503
The above stipulations are, to our mind, reasonable and just. In the
bill of lading, the carrier made it clear that its liability would only be
up to One Hundred Thousand (¥100,000.00) Yen. However, the
shipper, Maruman Trading, had the option to declare a higher
valuation if the value of its cargo was higher than the limited
liability of the carrier. Considering that the shipper did not declare a
higher valuation, it had itself to blame for not complying with the
stipulations.
The trial court’s ratiocination that private respondent could not
have ‘‘fairly and freely’’ agreed to the limited liability clause in the
bill of lading because the said conditions were printed in small
letters does not make the bill of lading invalid. 5
We ruled in PAL, Inc. vs. Court of Appeals that the
“jurisprudence on the matter reveals the consistent holding of the
court that contracts of adhesion are not invalid per se and that it has
on numerous occasions upheld the binding effect thereof.” Also, in
Philippine
6
American General Insurance Co., Inc. vs. Sweet Lines,
Inc. this Court, speaking through the learned Justice Florenz D.
Regalado, held:
________________
504
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 33/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
“While it may be true that petitioner had not signed the plane ticket x x, he
is nevertheless bound by the provisions thereof. ‘Such provisions have been
held to be a part of the contract of carriage, and valid and binding upon the
passenger regardless of the latter’s lack of knowledge or assent to the
regulation.’ It is what is known as a contract of ‘adhesion,’ in regards which
it has been said that contracts of adhesion wherein one party imposes a
ready-made form of contract on the other, as the plane ticket in the case at
bar, are contracts not entirely prohibited. The one who adheres to the
contract is in reality free to reject it entirely; if he adheres, he gives his
consent. x x x, a contract limiting liability upon an agreed valuation does
not offend against the policy of the law forbidding one from contracting
against his own negligence.” (Emphasis supplied)
________________
8 Ayala Corporation vs. Ray Burton Development Corporation, G.R. No. 126699,
August 7, 1998. See also Qua Chee Gan vs. Law Union and Rock Insurance Co., Ltd.,
98 Phil. 95 [1955].
505
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 34/37
1/25/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 297
506
and inserts it into said contract or bill. This proposition, moreover, rests
upon an almost uniform weight of authority.” (Italics supplied)
________________
9 See Mendoza vs. Philippine Air Lines, Inc., 90 Phil. 836, 845-846.
10 Rollo, p. 116.
11 Rollo, p. 13.
507
SET ASIDE.
SO ORDERED.
——o0o——
508
http://www.central.com.ph/sfsreader/session/0000016882b50e4e60407b30003600fb002c009e/t/?o=False 37/37