XI.
Contracts Issue: W/N CFI Manila has jurisdiction herein, despite the execution of the contract
King Mau Wu v Sycip
Doctrine: Contracts executed in foreign country, cognizable by local courts; no
conflict of laws where question involved is to enforce obligation arising from
contract.
Facts:
(1) This claim involves an action filed by King Mau Wu to collect P59,082.92 with
interests, arising out of a shipment of 1,000 tons of coconut oil emulsion sold
by King, as agent of the Sycip, to Jas. Maxwell Fassett, who in turn assigned it
to Fortrade Corporation.
(2) Under an agency agreement set forth in a letter in New York addressed to and
accepted by Sycip, King was made the executive agent of Sycip in the sale of
Philippine coconut oil and its derivatives outside the Philippines, and was to be
paid 2½% on the total actual sale price of sales obtained through his efforts,
and in addition thereto, 50% of the difference between the authorized sale
price and the actual price.
(3) After trial, the Court rendered judgment as prayed for in the complaint in
favor of King.
(4) Sycip filed a motion for new trial based on newly discovered evidence, which
consists of:
a. Duplicate original of a letter covering the sale of 1,000 tons of coconut
oil soap emulsion signed by Maxwell to Sycip;
b. L/C of Chemical Bank & Trust Company in favor of Maxwell, and assigned
to Sycip;
c. A letter by the Fortrade Corporation to Maxwell, whereby Fortrade
placed a firm order of 1,000 metric tons of coconut oil soap emulsion
and Maxwell accepted.
(5) However, the motion was denied. Hence, Sycip appealed from the said
judgment.
(6) Both parties are agreed that the only transaction or sale made by King, as
agent of Sycip, was that of the subject coconut oil.
a. King still maintains that he is entitled to the claimed commissions.
b. Sycip contends that the coconut oil transaction as aforementioned was
not covered by the agency contract as it formed part of an independent
and separate transaction, agreed upon on an earlier date, for which King
has already been compensated. Moreover, he contends that as the
contract was executed in New York, CFI-Manila has no jurisdiction over
this case.
in New York. (YES)
Held:
(1) Although the contract of agency was executed in New York, CFI Manila
has jurisdiction to try a personal action for the collection of a sum of
money arising from such contract, because a non-resident may sue a
resident in the courts of this country where the defendant may be
summoned and his property leviable upon execution in case of a
favorable, final and executory.
(2) There is no conflict of laws involved in this case because it is only a
question of enforcing an obligation created by or arising from contract,
and unless the enforcement of the contract be against public policy of the
forum, it must be enforced.
(3) As to the merits of the case, there can be no doubt that the sale of the
1,000 metric tons of coconut oil was not a separate and independent
contract from that of the agency agreement.
o This is proven by 2 letters and a telegram written by Sycip, wherein
he himself confirmed the said transaction and King’s commission.
o The letter upon which Sycip relies for his defense is one of the
several drafts which led to the execution of the agency agreement.
Although such letter does not stipulate on the commission to be paid
to King as agent, yet if he paid King a 2½% commission on the first 3
coconut emulsion shipments, there is no reason why he should not
pay him the same commission on the last shipment.
Disposition: Hence, King is entitled to collect 7,598.88 for commission and P50,000
for ½ of the overprice or a total of P57,589.88, with lawful interests.
2. Pakistan International Airlines Corporation vs. Hon. Blas F. Ople
G.R. No. 61594, September 28, 1990
190 SCRA 90
Petition for certiorari to review the order of the Minister of Labor.
FACTS:
On 2 December 1978, petitioner Pakistan International Airlines Corporation (PIA), a
foreign corporation licensed to do business in the Philippines, executed in Manila
two (2) separate contracts of employment, one with private respondent Ethelynne
B. Farrales and the other with private respondent Ma. M.C. Mamasig. The contracts
became effective on 9 January 1979 and provided for the duration of employment
and penalty, termination and the applicable law which is of Pakistan’s. They were
1
trained in Pakistan and worked as flight attendants with base station in Manila and
flying assignments to different parts of the Middle East and Europe.
A year and four (4) months prior to the expiration of the contracts of employment,
they received separate letters informing them that their services would be
terminated.
Private respondents Farrales and Mamasig jointly instituted a complaint for illegal
dismissal and non-payment of company benefits and bonuses, against PIA with the
then Ministry of Labor and Employment. Several attempts at conciliation were not
fruitful.
ISSUES:
1. Whether or not the Regional Director, MOLE, had jurisdiction over the
subject matter of the complaint initiated by private respondents for
illegal dismissal, jurisdiction over the same being lodged in the Arbitration
Branch of the National Labor Relations Commission (“NLRC”).
2. Whether or not the order of the Regional Director had been issued in
violation of petitioner’s right to procedural due process.
3. Whether or not the employment contract is the governing law between
the parties and not the provisions of the Labor Code.
4. ADR ISSUE: WON the provision in the contract that the venue for
settlement of any dispute arising out of or in connection with the
agreement is to be resolved only in courts of Karachi Pakistan is valid.
RULING:
1. At the time the complaint was initiated in September 1980 and at the time the
Orders assailed were rendered on January 1981 (by Regional Director Francisco L.
Estrella) and August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional
Director had jurisdiction over termination cases. Art. 278 of the Labor Code, as it
then existed, forbade the termination of the services of employees with at least
one (1) year of service without prior clearance from the Department of Labor and
Employment.
2. No. Petitioner was given an opportunity to submit its position paper and
evidence they had.
3. The principle of party autonomy in contracts is not an absolute principle. The
rule in Article 1306 of the Civil Code is that the contracting parties may establish
such stipulations as they may deem convenient, “provided they are not contrary to
law, morals, good customs, public order or public policy.” Thus, counter-balancing
the principle of autonomy of contracting parties is the equally general rule that
provisions of applicable law, especially provisions relating to matters affected with
public policy, are deemed written into the contract. The law relating to labor and
employment are impressed with public interest. Paragraph 5 of that employment
contract was inconsistent with Articles 280 and 281 of the Labor Code and thus,
cannot be given effect.
4. These circumstances – the employer-employee relationship between the parties;
the contract being not only executed in the Philippines, but also performed here, at
least partially; private respondents are Philippine citizens and petitioner, although
a foreign corporation, is licensed to do business and actually doing business and
hence resident in the Philippines; lastly, private respondents were based in the
Philippines in between their assigned flights to the Middle East and Europe – show
that the Philippine courts and administrative agencies are the proper fora for the
resolution of contractual disputes between the parties. The employment
agreement cannot be given effect so as to bar Philippine agencies and courts
vested with jurisdiction by Philippine law. Moreover, PIA failed to plead and
proved the contents of Pakistan law on the matter, it is therefore presumed that
the applicable provisions of the law of Pakistan are the same as the applicable
provisions of Philippine law. Hence, the provision in the contract that the venue for
settlement of any dispute arising out of or in connection with the agreement is to
be resolved only in courts of Karachi Pakistan is not valid.
Contracts; Parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest.
The principle of party autonomy in contracts is not absolute. – A contract freely
entered into should, of course, be respected, as PIA argues, since a contract is the
law between the parties. The principle of party autonomy in contracts is not,
however, an absolute principle. The rule in Article 1306, of our Civil Code is that the
contracting parties may establish such stipulations as they may deem convenient,
“provided they are not contrary to law, morals, good customs, public order or
public policy.” Thus, counter-balancing the principle of autonomy of contracting
parties is the equally general rule that provisions of applicable law, especially
provisions relating to matters affected with public policy, are deemed written into
the contract. Put a little differently, the governing principle is that parties may not
contract away applicable provisions of law especially peremptory provisions dealing
with matters heavily impressed with public interest. The law relating to labor and
employment is clearly such an area and parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by
2
simply contracting with each other. It is thus necessary to appraise the contractual
provisions invoked by petitioner PIA in terms of their consistency with applicable
Philippine law and regulations.
3. Continental Micronesia v. Basso
GR No. 178382-83
Labor Relations: Jurisdiction
Facts:
Petitioner Continental Micronesia is a foreign corporation organized and existing
under the laws of and domiciled in the United States of America. It is licensed to do
business in the Philippines. Respondent, a US citizen residing in the Philippines,
accepted an offer to be a General Manager position by Mr. Braden, Managing
Director-Asia of Continental Airlines. On November 7, 1992, CMI took over the
Philippine operations of Continental, with respondent retaining his position as
General Manager. Thereafter, respondent received a letter from Mr. Schulz, who
was then CMI’s Vice President of Marketing and Sales, informing him that he has
agreed to work in CMI as a consultant on an “as needed basis.” Respondent wrote
a counter-proposal that was rejected by CMI.
Respondent then filed a complaint for illegal dismissal against the petitioner
corporation. Alleging the presence of foreign elements, CMI filed a Motion to
Dismiss on the ground of lack of jurisdiction over the person of CMI and the subject
matter of the controversy.
The Labor Arbiter agreed with CMI that the employment contract was executed in
the US “since the letter-offer was under the Texas letterhead and the acceptance of
Complainant was returned there.” Thus, applying the doctrine of lex loci
celebrationis, US laws apply. Also, applying lex loci contractus, the Labor Arbiter
ruled that the parties did not intend to apply Philippine laws.
The NLRC ruled that the Labor Arbiter acquired jurisdiction over the case when CMI
voluntarily submitted to his office’s jurisdiction by presenting evidence, advancing
arguments in support of the legality of its acts, and praying for reliefs on the merits
of the case.
The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction
over the subject matter of the case and over the parties.
Issue:
Whether labor tribunals have jurisdiction over the case.
Held:
Yes. The Court ruled that the labor tribunals had jurisdiction over the parties and
the subject matter of the case. The employment contract of Basso was replete with
references to US laws, and that it originated from and was returned to the US, do
not automatically preclude our labor tribunals from exercising jurisdiction to hear
and try this case.
On the other hand, jurisdiction over the person of CMI was acquired through the
coercive process of service of summons. CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and participated in the
proceedings before the courts. Though a foreign corporation, CMI is licensed to do
business in the Philippines and has a local business address here. The purpose of
the law in requiring that foreign corporations doing business in the country be
licensed to do so, is to subject the foreign corporations to the jurisdiction of our
courts.
Where the facts establish the existence of foreign elements, the case presents a
conflicts-of-laws issue. Under the doctrine of forum non conveniens, a Philippine
court in a conflict-of-laws case may assume jurisdiction 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 to the law and the facts; and (3) that the
Philippine Court has or is likely to have power to enforce its decision. All these
requisites are present here.
4. LWV Construction Corporation v. Marcelo Dupo
G.R. No. 172342, July 13, 2009
FACTS:
Petitioner LWV, a domestic corporation recruiting Filipino workers, hired
respondent as Civil Structural Superintendent to work in Saudi Arabia for its
principal, Mohammad Al-Mojil Group/Establishment (MMG). Sometime February
3
1992, respondent signed his first overseas employment contract. It was renewed
five times and all were fixed-period, renewable contracts for 1 year. The 6th and last
contract stated that respondent's employment starts upon reporting to work and
ends when he leaves the work site. When respondent left Saudi Arabia for the
Philippines on April 30, 1999 and thereby termination his 6th contract, he informed
MMG through LWV that he needs to extend his vacation because his son was
hospitalized. He also sought a promotion with salary adjustment. In reply, MMG
informed him that his promotion is subject to management's review; that his
services are still needed; that he was issued a plane ticket for his return flight to
Saudi Arabia; and that his decision regarding his employment must be made within
7 days, otherwise, MMG "will be compelled to cancel his slot." On July 6, 1999,
respondent resigned.
Under the Law of Saudi Arabia, an employee who rendered at least 5
years in a company within the jurisdiction of Saudi Arabia, is entitled to the so-
called long service award which is known to others as longevity pay of at least one
half month pay for every year of service. In excess of five years an employee is
entitled to one month pay for every year of service. When he followed up his claim
for long service award and the MMG failed to respond, he filed a complaint for
payment of service award against LWV before the NLRC. Aside from the allegation
that it was already paid by MMG after his 6th contract ended, LWV argued that the
action has prescribed when respondent filed the compliant 1 year and 7 months
after his 6th contract ended, using Article 13 of the Saudi Labor Law as basis which
provides that action to enforce payment of service award must be filed one year
from the termination of the labor contract for a specific period.
ISSUE:
Whether or not the action against petitioner has prescribed with Article
13 of the Saudi Labor Law as basis.
HELD:
No, the Supreme Court held that what will apply on this particular case is
not Art. 13 of the Saudi Labor Law but Art. 291 of the Philippine Labor Code which
provides for a 3 year prescription period for all money claims from employee-
employer relationship. A foreign procedural law shall not be applied even if the
action is based upon a foreign substantive law. The Court did not apply the Art. 48
of the Code of Civil Procedure which provides that “if the laws of the state or
country where the cause of action arose, the action is barred, it shall also be barred
in the Philippine island because the Court, in light of the provisions of the 1987
Constitution, Art. 48 cannot be applied ex proprio vigore insofar as it ordains the
application of the provision of the Saudi Law. The courts of the forum will not
enforce any foreign claim obnoxious to the forum’s public policy. To enforce the
one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the
claims in question would contravene the public policy on the protection to labor.
The Court therefore leaned on the constitutional provision of on protection to
labor rather that adopting the provision of the foreign law.
5. Philippine Export and Foreign Loan Guarantee Corporation v V.P. Eusebio
Construction Inc.
Facts:
1. The State Organization of Buildings (SOB), Ministry of Housing and Construction,
Baghdad, Iraq awarded the construction of the Institute of Physical Therapy-
Medical Rehabilitation Center in Iraq to Ayjal Trading and Contracting Company for
a total contract price of about $18M.
2. Spouses Santos, in behalf of 3-Plex International, Inc., a local contractor engaged
in construction business, entered into a joint venture agreement with Ayjal wherein
the former undertook the execution of the entire a project, while the latter would
be entitled to a commission of 4%.
3. 3-Plex not accredited by the Philippine Overseas Construction Board (POCB)
assigned and transferred all its rights and interests to VPECI.
4. The SOB required the contractors to submit a performance bond representing
5% of the total contract price, an advance payment bond representing 10% of the
advance payment to be released upon signing of the contract. To comply with
these requirements 3-Plex and VPECI applied for a guarantee with Philguarantee, a
4
government financial institution empowered to issue guarantees for qualified project considering that SOB's violations of the contract rendered impossible the
Filipino contractors. performance of its undertaking.

5. But what SOB required was a guarantee from the Rafidain Bank of Baghdad so 12. CA: Affirmed.
Rafidain Bank issued a performance bond in favor of SOB on the condition that
another foreign bank (not Phil Guarantee) would issue the counter-guarantee. Issue:
Hence, Al Ahli Bank of Kuwait was chosen to provide the counter guarantee.
What law should be applied in determining whether or not contractor (joint
6.Afterwards, SOB and the joint venture of VPECI and Ayjal executed the service venture) has defaulted?
contract. Under the contract, the joint venture would supply manpower and
Held:
materials, SOB would refund 25% of the project cost in Iraqi Dinar and 75% in US
dollars at an exchange rate of 1 Dinar to $3.37.
The question of whether there is a breach of the agreement which includes default
pertains to the INTRINSIC validity of the contract.
7.The project was not completed. Upon seeing the impossibility of meeting the
deadline, the joint venture worked for the renewal or extension (12x) of the
performance bond up to December 1986.
No conflicts rule on essential validity of contracts is expressly provided for in our
laws. The rule followed by most legal systems is that the intrinsic validity of a
contract must be governed by lex contractus (proper law of the contract). This may
8. In October 1986, Al Ahli Bank sent a telex call demanding full payment of its
be the law voluntarily agreed upon by the parties (lex loci voluntatis) or the law
performance bond counter-guarantee. Upon receipt, VPECI requested Iraq Trade
intended by them either expressly or implicitly (lex loci intentionis). The law
and Economic Development Minister Fadhi Hussein to recall the telex for being in
selected may be implied from factors such as substantial connection with the
contravention of its mutual agreement that the penalty will be held in abeyance
transaction, or the nationality or domicile of the parties. Philippine courts adopt
until completion of the project. It also wrote SOB protesting the telex since the
this: to allow the parties to select the law applicable to their contract, SUBJECT to
Iraqi government lacks foreign exchange to pay VPECI and the non-compliance with
the limitation that it is not against the law, morals, public policy of the forum and
the 75% billings in US dollars.
that the chosen law must bear a substantive relationship to the transaction.
9. Philguarantee received another telex from Al Ahli stating that it already paid to
In the case, the service contract between SOB and VPECI contains no express
Rafidain Bank. The Central Bank authorized the remittance to Al Ahli Bank
choice of law. The laws of Iraq bear substantial connection to the transaction and
representing the full payment of the performance counter-guarantee for VPECI's
one of the parties is the Iraqi government. The place of performance is also in Iraq.
project in Iraq.
Hence, the issue of whether VPECI defaulted may be determined by the laws of
10. Philguarantee sent letters to respondents demanding the full payment of the Iraq.
surety bond. Respondents failed to pay so petitioner filed a civil case for collection
BUT! Since foreign law was not properly pleaded or proved, processual
of sum of money.
presumption will apply.
11. Trial Court ruling: Dismissed. Philguarantee had no valid cause of action against
the respondents. The joint venture incurred no delay in the execution of the

5
 According to Art 1169 of the Civil Code: In reciprocal obligations, neither party
incurs in delay if the other party does not comply or is not ready to comply in a
proper manner what is incumbent upon him.
As found by the lower courts: the delay or non-completion of the project was
caused by factors not imputable to the Joint Venture, it was rather due to the
persistent violations of SOB, particularly it's failure to pay 75% of the accomplished
work in US dollars. Hence, the joint venture does not incur in delay if the other
party(SOB) fails to perform the obligation incumbent upon him.
6. SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, v. JOY C. CABILES, Respondent.
FACTS OF THE CASE:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and
placement agency. Responding to an ad it published, respondent, Joy C. Cabiles,
submitted her application for a quality control job in Taiwan, and signed with a
one-year employment contract for a monthly salary of NT$15,360.00.
The agency required her to pay a placement fee of 70,000.00 when she signed the
employment contract.
She was deployed to work in Taiwan for Wacoal, but was given a position as a
cutter.
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr.
Huwang from Wacoal informed Joy, without prior notice, that she was terminated
and that “she should immediately report to their office to get her salary and
passport.” She was asked to “prepare for immediate repatriation.”
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a
total of NT$9,000. According to her, Wacoal deducted NT$3,000 to cover her plane
ticket to Manila.
She filed a filed a complaint with the National Labor Relations Commission against
petitioner and Wacoal for illegal dismissal.
Sameer’s Defense:
o Respondent’s termination was due to her inefficiency, negligence in her
duties, and her “failure to comply with the work requirements [of] her foreign
[employer];
o The agency also claimed that it did not ask for a placement fee of
NT$70,000.00 (evidenced by an OR bearing NT% 20,360.00);
o Petitioner added that Wacoal’s accreditation with petitioner had already
been transferred to the Pacific Manpower & Management Services, Inc. (Aug. 06,
1997) thus, obligation is substituted with Pacific, which the latter denied
Labor Arbiter Ruling:
o Case is dismissed – Rationale: Complaint is based on mere allegations.
o No excess payment of placement fees, based on the official receipt
presented by petitioner
o Transfer of obligation to Pacific is immaterial
NLRC Ruling:
o Joy is illegally dismissed
o Reiterated the doctrine that the burden of proof to show that the
dismissal was based on a just or valid cause belongs to the employer
o It found that Sameer Overseas Placement Agency failed to prove that
there were just causes for termination.
o There was no sufficient proof to show that respondent was inefficient in
her work and that she failed to comply with company requirements.41
Furthermore, procedural due process was not observed in terminating respondent.
o Did not rule on the issue of reimbursement of placement fees for lack of
jurisdiction
o It refused to entertain the issue of the alleged transfer of obligations to
Pacific.
6
o It did not acquire jurisdiction over that issue because Sameer Overseas
Placement Agency failed to appeal the Labor Arbiter’s decision not to rule on the
matter.
Sameer filed for MR but NLRC dismissed; filed for petition for certiorari at CA
CA Ruling:
o Affirmed NLRC with respect to the finding of illegal dismissal, Joy’s
entitlement to the equivalent of three months worth of salary, reimbursement of
withheld repatriation expense, and attorney’s fees.
o Remanded case to NLRC to address the validity of petitioner’s allegations
against Pacific.
ISSUE OF THE CASE:
o WON the Court of Appeals erred when it affirmed the ruling of the
National Labor Relations Commission finding respondent illegally dismissed and
awarding her three months’ worth of salary, the reimbursement of the cost of her
repatriation, and attorney’s fees despite the alleged existence of just causes of
termination;
o WON there was a just cause for termination because there was a finding
of Wacoal that respondent was inefficient in her work;
o WON Pacific that should now assume responsibility for Wacoal’s
contractual obligations to the workers originally recruited by petitioner
SC RULING/RATIONALE:
1.) JUST CAUSE:
o Sameer Overseas Placement Agency’s petition is without merit. SC find
for respondent.
o Sameer Overseas Placement Agency failed to show that there was just
cause for causing Joy’s dismissal. The employer, Wacoal, also failed to accord her
due process of law.
o Indeed, employers have the prerogative to impose productivity and
quality standards at work. They may also impose reasonable rules to ensure that
the employees comply with these standards.59 Failure to comply may be a just
cause for their dismissal. Certainly, employers cannot be compelled to retain the
services of an employee who is guilty of acts that are inimical to the interest of the
employer. While the law acknowledges the plight and vulnerability of workers, it
does not “authorize the oppression or self-destruction of the employer.”
Management prerogative is recognized in law and in our jurisprudence.This
prerogative, however, should not be abused. It is “tempered with the employee’s
right to security of tenure. Workers are entitled to substantive and procedural due
process before termination. They may not be removed from employment without a
valid or just cause as determined by law and without going through the proper
procedure.Security of tenure for labor is guaranteed by our Constitution
o With respect to the rights of overseas Filipino workers, follow the
principle of lex loci contractus.
o Pinned - Triple Eight Integrated Services, Inc. v. NLRC
o Article 282 of the Labor Code enumerates the just causes of termination
by the employer. Thus:
o Art. 282. Termination by employer.
o An employer may terminate an employment for any of the following
causes: (a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;(b)
Gross and habitual neglect by the employee of his duties;(c) Fraud or willful breach
by the employee of the trust reposed in him by his employer or duly authorized
representative;(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly
authorized representatives;(e) Other causes analogous to the foregoing.
o Petitioner’s allegation that respondent was inefficient in her work and
negligent in her duties may, therefore, constitute a just cause for termination
under Article 282(b), but only if petitioner was able to prove it.
7
o The burden of proving that there is just cause for termination is on the
employer. “The employer must affirmatively show rationally adequate evidence
that the dismissal was for a justifiable cause.” Failure to show that there was valid
or just cause for termination would necessarily mean that the dismissal was illegal.
o To show that dismissal resulting from inefficiency in work is valid, it must
be shown that:
o 1) the employer has set standards of conduct and workmanship against
which the employee will be judged;
o 2) the standards of conduct and workmanship must have been
communicated to the employee; and
o 3) the communication was made at a reasonable time prior to the
employee’s performance assessment.
o The regular employee must constantly attempt to prove to his or her
employer that he or she meets all the standards for employment. Courts should
remain vigilant on allegations of the employer’s failure to communicate work
standards that would govern one’s employment “if [these are] to discharge in good
faith [their] duty to adjudicate.”
2.) DUE PROCESS REQUIREMENT
o Petitioner failed to comply with the due process requirement
o A valid dismissal requires both a valid cause and adherence to the valid
procedure of dismissal.The employer is required to give the charged employee at
least two written notices before termination.
o One of the written notices must inform the employee of the particular
acts that may cause his or her dismissal.77 The other notice must “[inform] the
employee of the employer’s decision.” Aside from the notice requirement, the
employee must also be given “an opportunity to be heard.”
3.) Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995
o Respondent Joy Cabiles, having been illegally dismissed, is entitled to her
salary for the unexpired portion of the employment contract that was violated
together with attorney’s fees and reimbursement of amounts withheld from her
salary.
o Sec 10 of RA 1082 – MONEY CLAIMS
o SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND
o The reinstatement of the clause in Republic Act No. 8042 was not yet in
effect at the time of respondent’s termination from work in 1997. Republic Act No.
8042 before it was amended by Republic Act No. 10022 governs this case.
o Republic Act. No. 10022, violates the constitutional rights to equal
protection and due process.
o SC reiterate their finding in Serrano v. Gallant Maritime that limiting
wages that should be recovered by an illegally dismissed overseas worker to three
months is both a violation of due process and the equal protection clauses of the
Constitution.
o Respondent Joy Cabiles is entitled to her salary for the unexpired portion
of her contract, in accordance with Section 10 of Republic Act No. 8042. The award
of the three-month equivalence of respondent’s salary must be modified
accordingly. Since she started working on June 26, 1997 and was terminated on July
14, 1997, respondent is entitled to her salary from July 15, 1997 to June 25, 1998.
“To rule otherwise would be iniquitous to petitioner and other OFWs, and would, in
effect, send a wrong signal that principals/employers and recruitment/manning
agencies may violate an OFW’s security of tenure which an employment contract
embodies and actually profit from such violation based on an unconstitutional
provision of law.”
o Respondent is also entitled to an interest of 6% per annum on her money
claims from the finality of this judgment.
4.) LIABILITIES OF EMPLOYER
o SC clarify the liabilities of Wacoal as principal and petitioner as the
employment agency that facilitated respondent’s overseas employment.
8
o Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995
provides that the foreign employer and the local employment agency are jointly
and severally liable for money claims including claims arising out of an employer-
employee relationship and/or damages. This section also provides that the
performance bond filed by the local agency shall be answerable for such money
claims or damages if they were awarded to the employee.
o This provision is in line with the state’s policy of affording protection to
labor and alleviating workers’ plight.
o The Migrant Workers and Overseas Filipinos Act of 1995 ensures that
overseas workers have recourse in law despite the circumstances of their
employment. By providing that the liability of the foreign employer may be
“enforced to the full extent” against the local agent, the overseas worker is assured
of immediate and sufficient payment of what is due them.
o Pinned – Prieto vs NLRC
o The Court is not unaware of the many abuses suffered by our overseas
workers in the foreign land where they have ventured, usually with heavy hearts, in
pursuit of a more fulfilling future. Breach of contract, maltreatment, rape,
insufficient nourishment, sub-human lodgings, insults and other forms of
debasement, are only a few of the inhumane acts to which they are subjected by
their foreign employers, who probably feel they can do as they please in their own
country. While these workers may indeed have relatively little defense against
exploitation while they are abroad, that disadvantage must not continue to burden
them when they return to their own territory to voice their muted complaint. There
is no reason why, in their very own land, the protection of our own laws cannot be
extended to them in full measure for the redress of their grievances.
The decision of the Court of Appeals is AFFIRMED with modification. Petitioner
Sameer Overseas Placement Agency is ORDERED to pay respondent Joy C. Cabiles
the amount equivalent to her salary for the unexpired portion of her employment
contract at an interest of 6% per annum from the finality of this judgment.
Petitioner is also ORDERED to reimburse respondent the withheld NT$3,000.00
salary and pay respondent attorney’s fees of NT$300.00 at an interest of 6% per
annum from the finality of this judgment.
The clause, “or for three (3) months for every year of the unexpired term,
whichever is less” in Section 7 of Republic Act No. 10022 amending Section 10 of
Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.
XII. Tort and Crimes
1. Filartiga v. Pena-Irala
Brief Fact Summary. A suit against Pena-Irala (D) on the premise that he had
tortured to death the decedent of Filartiga (P), was filed by Filartiga (P).
Synopsis of Rule of Law. For purpose of the Allen Tort Statute, torture may be
considered to violate law of nations.
Facts. A suit claiming that Pena-Irala (D) had tortured Filartiga’s (P) decedent to
death while he was a police Inspector General, was brought by Filartiga (P). All
parties were Paraguayan citizens. Jurisdiction was based on the Allen Tort Statute,
28 U.S.C. S 1350, which provided jurisdiction for tort committed in violation of
“the law of nations.― The case was dismissed by the district court for lack of
jurisdiction to which Filartiga (P) appealed.
Issue. For purpose of the Allen Tort Statute, may torture be considered as a
violation of the law of nations?
Held. (Judge not stated in casebook excerpt). Yes. For purpose of the Allen Tort
Statute, torture may be considered to violate law of nations. The prohibition
against torture has become part of customary international law. Various United
Nations declarations such as the Universal Declaration of Human Rights and the
1975 Declaration on the Protection of All Persons from Torture further portrays the
fact that prohibition against torture has become part of customary international
law. Torture has been officially renounced in the vast majority of nations and this is
the reason why this court concluded that torture violates the law of nations.
Discussion. It is not new for many members of the United Nations to make
pronouncements and not be pronouncements into action. It is no secret that
torture is still widely practiced if not by a majority of countries then in a significant
manner. Actual practice, and not U.N. declarations have been argued by
commentators as what constitute international law.
9

2. Saudi Arabian Airlines V. CA
Laws Applicable: Art 19 and 21 of Civil Code
Lessons Applicable: Conflict of Laws, factual situation, connecting factor,
characterization, choice of law, State of the most significant relationship
FACTS:
 Saudi Arabian Airlines (SAUDIA), foreign airlines corporation doing
business in the Philippines and may be served summons in agent in
Makati, hired Milagros P. Morada as a flight attendant for its airlines
based in Jeddah, Saudi Arabia.
 April 27, 1990: While on a lay-over in Jakarta, Indonesia, Morada went to
a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-
Gazzawi, both Saudi nationals. It was almost morning when they
returned to their hotels so they agreed to have breakfast together at the
room of Thamer. Shortly after Allah left the room, Thamer attempted to
rape Morada. Fortunately, a roomboy and several security personnel
heard her cries for help and rescued her. Indonesian police arrested
Thamer and Allah Al-Gazzawi, the latter as an accomplice.
 When Morada returned to Jeddah, SAUDIA officials interrogated her
about the Jakarta incident and requested her to go back to Jakarta to
help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal
Officers negotiated with the police for the immediate release of the
detained crew members but did not succeed. Afraid that she might be
tricked into something she did not want because of her inability to
understand the local dialect, Morado refused to cooperate and declined
to sign a blank paper and a document written in the local
dialect. Eventually, SAUDIA allowed Morada to return to Jeddah but
barred her from the Jakarta flights.
 Indonesian authorities agreed to deport Thamer and Allah and they were
again put in service. While, Morada was transferred to Manila.
 January 14, 1992: Morada was asked to see Mr. Ali Meniewy, Chief Legal
Officer of SAUDIA, in Jeddah, Saudi Arabia. He brought her to the police
station where the police took her passport and questioned her about the
Jakarta incident. The police pressured her to drop the case against
Thamer and Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of Jeddah.
 June 16, 1993: Morada, while in Riyadh Saudi Arabia, was not allowed to
board the plane to Manila and instead ordered to take a later flight to
Jeddah to see Mr. Miniewy. Khalid of the SAUDIA office brought her to a
Saudi court where she was asked to sign a document written in Arabic.
They told her that this was necessary to close the case against Thamer
and Allah but it was actually a notice for her to appear before the court
on June 27, 1993. Plaintiff then returned to Manila.
 June 27, 1993: SAUDIA's Manila manager, Aslam Saleemi, assured
Morada that the investigation was routinary and that it posed no danger
to her so she reported to Miniewy in Jeddah for further
investigation. She was brought to the Saudi court.
 June 28, 1993: Saudi judge interrogated Morada through an interpreter
about the Jakarta incident for an hour and let her go. SAUDIA officers
forbidden her to take flight. She was told to go the Inflight Service
Office where her passport was taken and they told her to remain in
Jeddah, at the crew quarters, until further orders.
 July 3, 1993: She was brought to court again and to her astonishment and
shock, rendered a decision, translated to her in English, sentencing her to
five months imprisonment and to 286 lashes. The court tried her,
together with Thamer and Allah, and found her guilty of (1) adultery (2)
going to a disco, dancing and listening to the music in violation of Islamic
laws and (3) socializing with the male crew, in contravention of Islamic
tradition.
 Failing to seek the assistance of her employer, SAUDIA, she asked the
Philippine Embassy in Jeddah to help her while her case is on appeal. She
continued to workon the domestic flight of SAUDIA, while Thamer and
Allah continued to serve in the international flights.
 Because she was wrongfully convicted, the Prince of Makkah dismissed
the case against her and allowed her to leave Saudi Arabia. Before her
return to Manila, she was terminated from the service by SAUDIA,
without her being informed of the cause.
 November 23, 1993: Morada filed a Complaint for damages against
SAUDIA, and Khaled Al-Balawi, its country manager.
 January 19, 1994: SAUDIA filed an Omnibus Motion To Dismiss on
following grounds: (1) that the Complaint states no cause of action
against SAUDIA (2) that defendant Al-Balawi is not a real party in interest
(3) that the claim or demand set forth in the Complaint has been waived,
abandoned or otherwise extinguished and (4) that the trial court has no
jurisdiction to try the case.
 After opposition to the motion to dismiss by Morada and reply by
SAUDIA, Morada filed an Amended Complaint dropping Al-
Balawi. SAUDIA filed its Manifestation, Motion to Dismiss Amended
Complaint, subsequently motion for reconsideration which were all
denied.
10
  SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for
Issuance of Writ of Preliminary Injunction and/or Temporary Restraining
Order with the Court of Appeals. TRO was granted but Writ of
Preliminary Injunction was denied.
 CA: 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.
 SAUDIA filed its Supplemental Petition for Review with Prayer for
Temporary Restraining Order:
o It is a conflict of laws that must be settled at the outset:
Morada's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia.
Existence of a foreign element qualifies the instant case for the application of the law
of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule.
 Morada: Amended Complaint is based on Articles 19 and 21 of the Civil
Code which is a matter of domestic law
ISSUE: W/N the RTC of Quezon City has jurisdiction over the case and it is the
proper forum for recovery of damages under Art. 21 of the Civil Code which should
govern.
HELD: YES.
On the presence of a “Foreign Element” in the case: A factual situation that cuts
across territorial lines and is affected by the diverse laws of two or more states is
said to contain a “foreign element”. The presence of a foreign element is inevitable
since social and economic affairs of individuals and associations are rarely confined
to the geographic limits of their birth or conception. The forms in which this foreign
element may appear are many. The foreign element may simply consist in the fact
that one of the parties to a contract is an alien or has a foreign domicile, or that a
contract between nationals of one State involves properties situated in another
State. In other cases, the foreign element may assume a complex form.
In the instant case, the foreign element consisted in the fact that private
respondent Morada is a resident Philippine national, and that petitioner SAUDIA is
a resident foreign corporation. Also, by virtue of the employment of Morada with
the petitioner Saudia as a flight stewardess, events did transpire during her many
occasions of travel across national borders, particularly from Manila, Philippines to
Jeddah, Saudi Arabia, and vice versa, that caused a “conflicts” situation to arise.
COURT disagrees with MORADA that his is purely a domestic case. However, the
court finds that the RTC of Quezon City possesses jurisdiction over the subject
matter of the suit. Its authority to try and hear the case is provided for under
Section 1 of Republic Act No. 7691, to wit:
BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise
exclusive jurisdiction:
Weighing the relative claims of the parties, the court a quo found it best to hear
the case in the Philippines. Had it refused to take cognizance of the case, it would
be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e.
in the Kingdom of Saudi Arabia where she no longer maintains substantial
connections. That would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of
the plaintiff (now private respondent) should be upheld.
The trial court also acquired jurisdiction over the parties. MORADA through her act
of filing, and SAUDIA by praying for the dismissal of the Amended Complaint on
grounds other than lack of jurisdiction.
As to the choice of applicable law, we note that choice-of-law problems seek to
answer two important questions:
(1) What legal system should control a given situation where some of the
significant facts occurred in two or more states; and
(2) to what extent should the chosen legal system regulate the situation.
Considering that the complaint in the court a quo is one involving torts, the
“connecting factor” or “point of contact” could be the place or places where the
tortious conduct or lex loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a situs of the tort (the
place where the alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had honestly believed that
petitioner would, in the exercise of its rights and in the performance of its duties,
“act with justice, give her due and observe honesty and good faith.” Instead,
petitioner failed to protect her, she claimed. That certain acts or parts of the injury
allegedly occurred in another country is of no moment. For in our view what is
11
important here is the place where the over-all harm or the totality of the alleged
injury to the person, reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private respondent). All told, it
is not without basis to identify the Philippines as the situs of the alleged tort.
In applying “State of the most significant relationship” rule, to determine the State
which has the most significant relationship, the following contacts are to be taken
into account and evaluated according to their relative importance with respect to
the particular issue: (a) the place where the injury occurred; (b) the place where
the conduct causing the injury occurred; (c) the domicile, residence, nationality,
place of incorporation and place of business of the parties, and (d) the place where
the relationship, if any, between the parties is centered.
As already discussed, there is basis for the claim that over-all injury occurred and
lodged in the Philippines. There is likewise no question that private respondent is a
resident Filipina national, working with petitioner, a resident foreign corporation
engaged here in the business of international air carriage. Thus, the “relationship”
between the parties was centered here, although it should be stressed that this suit
is not based on mere labor law violations. From the record, the claim that the
Philippines has the most significant contact with the matter in this dispute, raised
by private respondent as plaintiff below against defendant (herein petitioner), in
our view, has been properly established.
NOTE:
These “test factors” or “points of contact” or “connecting factors” could be any of
the following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or
his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be
situated. In particular, the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the place where
a contract has been made, a marriage celebrated, a will signed or a tort committed.
The lex loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of
performance of contractual duties, or the place where a power of attorney is to be
exercised;
(6) the intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done.
The lex fori — the law of the forum — is particularly important because, as we have
seen earlier, matters of “procedure” not going to the substance of the claim
involved are governed by it; and because the lex fori applies whenever the content
of the otherwise applicable foreign law is excluded from application in a given case
for the reason that it falls under one of the exceptions to the applications of foreign
law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of affreightment.
3. United States v. Noriega - 117 F.3d 1206 (11th Cir. 1997)
RULE:
A criminal defendant, abducted to the United States from a nation with which it
has an extradition treaty, does not thereby acquire a defense to the jurisdiction of
the United State's courts. He may be tried in federal district court for violations of
the criminal law of the United States.
FACTS:
Manuel Antonio Noriega appealed his multiple convictions stemming from his
involvement in cocaine trafficking; and the district court's denial of his motion for a
new trial based on newly discovered evidence. In attacking his convictions, Noriega
asserted that the district court should have dismissed the indictment against him
due to his status as a head of state and the manner in which the United States
brought him to justice. Noriega also contended that the district court committed
two reversible evidentiary errors. Alternatively, he sought new trial based on his
discovery of: (1) the government's suppression of its pact with a non-witness;
12

and/or (2) certain allegations, lodged after his conviction, that a group associated
with the undisclosed, cooperating non-witness bribed a prosecution witness.
ISSUE:
Should the indictment be dismissed due to the defendant’s status as a head of
state?
ANSWER:
No.
CONCLUSION:
The court affirmed. The court rejected defendant's contention that the indictment
should have been dismissed due to his status as a head of state and the manner in
which the United States brought him to justice, because he was denied head-of-
state immunity. The court also rejected defendant's alternative contentions that he
was entitled to a new trial based on his discovery of the government's suppression
of its pact with a non-witness, and certain allegations, lodged after his conviction,
that a group associated with the undisclosed, cooperating non-witness bribed a
prosecution witness.
4. Del Socorro vs. Van Wilsem (alam mo nay an)
5. Attorney General v. Adolf Eichmann
Summary
The crimes perpetrated by the Nazis during Hitler’s reign against Jewish citizens
were some of the worst recorded in history. Although accurate figures may never
be known, it is estimated that some 6 million Jewish individuals died – men,
women, and children from all over Europe. They were deported from their homes
in large freight trains in appalling conditions, others starved or froze to death,
others still were taken away to concentration camps where the fit were forced to
perform manual labour whilst the weak were shot to death or later, gassed to
death in their thousands.
The Accused, Adolf Eichmann, was an Austrian by birth who volunteered to work
for the Security Service (SD) in Berlin. He rose through the ranks and eventually
occupied the position of Head of Section (Referant) for Jewish Affairs charged with
all matters related to the implementation of the Final Solution to the Jewish
Question. In this capacity, he oversaw the transport and deportation of Jewish
persons, set up and personally ran an operations centre in Hungary in order to
implement the Final Solution there, organised the transfer of money from
evacuated Jews to the State and was responsible for the administration of the
camps at Terezin and Bergen-Belsen.
He was captured by Israeli Security Forces in Argentina and handed over to the
District Court of Jerusalem to stand trial for war crimes, crimes against humanity
and crimes against the Jewish people. He was convicted of all 15 counts and
sentenced to death. He was unsuccessful in contesting the jurisdiction of the Court
or defending his actions by relying on superior orders.
Legally relevant facts
Prior to the outbreak of World War II, the Accused was a member of the Austrian
SS and later volunteered for a position with the Head Office of the Security Service
(SD) in Berlin (para. 59). When the SD merged with the State Secret Police
(Gestapo) to form the Head Office for Reich Security (RSHA), the Accused occupied
the role of Special Officer of Zionist Affairs (para. 61). He was transferred to Vienna
in 1938 to administer the Central Office for the Emigration of Austrian Jews (para.
64). His success was such that approximately 150,000 Austrian Jews were forced to
emigrate and he was appointed head of the new Reich Central Office for Jewish
Emigration in October 1939 (para. 65).
13
From the outbreak of the War to mid-1941, the Accused devised and carried out
the mass deportation of Jewish persons from his role as the Special Referent for
Emigration and Evacuation within the RSHA (paras. 71-75) and explored the
possibility of setting up a slave Jewish state in Madagascar (para. 76).
In early 1942, the Accused was appointed the Referant of the RSHA in matters
connected to the Final Solution (para. 88). In implementing the Final Solution, the
Accused received information as to the number of persons to be expelled (para.
90), organised the transfer of money from evacuated Jews for the disposal of the SS
(para. 91), and oversaw the handling of the transport of Jews (para. 93), not only in
the Reich but also in other countries (para. 98). In particular, he headed the
Eichmann Special Operations Unit in Hungary and did his utmost to carry out the
Final Solution (para. 111). These "Transport Jews" were taken to concentration
camps and those who were unfit for hard labour were exterminated immediately
(para. 145).
In autumn 1942, a cover up effort was begun as bodies in mass graves were burned
in an effort to hide the slaughter (para. 148). The concentration camps were
evacuated (para. 149) – the Accused in particular was responsible for all
administrative matters connected with the Terezin Ghetto (para. 152) and the
camp at Bergen-Belsen (para. 153).
back to top
Core legal questions
 Does the District Court of Jerusalem have jurisdiction to try the case in light of
the fact that Eichmann is a foreign national and crimes were committed on
foreign territory?
 In the affirmative, is jurisdiction negated by the abduction of the Accused from
a foreign country?
 Is obeying superior orders a defence excluding criminal responsibility?
back to top
Specific legal rules and provisions
 Section 19 of the Criminal Code Ordinance of 1936.
 Sections 1(a)(1),(2),(3), 1(b) and 8 of the the Nazis and Nazi Collaborators
(Punishment) Law.
back to top
Court's holding and analysis
The Court’s jurisdiction is founded upon it by the Nazis and Nazi Collaborators
(Punishment) Law 5710-1950. This law does not violate the principles of
international law (para. 10). Israel’s “right to punish” is founded on two elements.
First, the universal character of the crimes in question, which are grave offences
against the law of nations itself and, in the absence of an international court, grant
jurisdiction to any domestic court (para. 12). Second, the specific character of the
crimes, which was the extermination of the Jewish people, provides the necessary
linking point between the Accused and the newly-founded State of Israel, a State
established and recognised as the State of the Jews (para. 34). The crimes
committed by the Accused concern the vital interests of the State, thus it has a
right to punish the Accused pursuant to the protective principle (para. 35).
This jurisdiction is not negated by the manner in which the Accused was brought
before the Court. It is an established rule of law that a person standing trial for an
offence against the laws of a State may not oppose his being tried by reason of the
illegality of his arrest or the means by which he was brought to the jurisdiction of
the court (para. 41). This rule applies equally in cases where the accused is relying
on violations of international, rather than domestic, law (para. 47). Such a violation
of international law constitutes an international tort, which may be “cured” by
waiver. In the present instance, the joint decision of the Governments of Argentina
and Israel of 3 August 1960 “cured” the international tort committed by Israel
when it entered Argentinian territory to abduct the Accused (para. 50).
Having examined the command structure in place at the SS and the scope of the
Accused’s authority, the Court concluded that the latter acted in accordance with
general directives from his superiors but he retained wide powers of discretion
(para. 180). Under Section 8 of the Punishment Law, the defence of superior orders
(contained in Section 19(b) of the Criminal Code Ordinance of 1936) is not available
in case of offences enumerated by the afore-mentioned Law but may be taken into
account as a factor at sentencing (para. 218).
The Accused was convicted on all fifteen counts and sentenced to death (para.
244).
6. United States v. Yunis
14
Brief Fact Summary
Yunis (Defendant) argued that the Government (Plaintiff) could not prosecute him
for a hijacking that he perpetrated when its only connection to the United States
was that several Americans were on board the plane.
Synopsis of Rule of Law
The federal government may prosecute an airline hijacker even if the hijacking’s
only connection with the United States was the presence of Americans on board
the plane.
Facts
Yunis (Defendant) and several accomplices hijacked a Jordanian airliner while it was
on the ground in Beirut. The plane flew to several locations around the
Mediterranean Sea, and eventually flew back to Beirut, where the hijackers blew
up the plane and then escaped into the hills. The only connection between the
whole event and the United States was that several Americans were on board the
whole time. Yunis (Defendant) was indicted for violating the Hostage Taking Act, 18
U.S.C. § 1203. He was apprehended, and later indicted under the Destruction of
Aircraft Act, 18 U.S.C. § 32. He moved to dismiss on grounds of jurisdiction.
Issue
May the federal government prosecute an airline hijacker even if the hijacking’s
only connection with the United States was the presence of several Americans on
board the plane?
Held
(Parker, J.) Yes. The federal government may prosecute an airline hijacker even if
the hijacking’s only connection with the United States was the presence of
Americans on board the plane. There must be jurisdiction under both international
and domestic law in order for jurisdiction to exist in the situation of this case.
International law relates to the power of Congress to have extraterritorial
application of its law; domestic law relates to its intent to do so. International law
recognizes several bases for a nation to give extraterritorial application to its laws.
One is the “universal principle.― Some acts are considered to be so heinous
and contrary to civilization that any court may assert jurisdiction. The acts that fall
within this category are mainly defined by international convention. The universal
principle applies because numerous conventions condemn hijacking and hostage
taking. The “passive personal principle― is also relevant, which applies to
offenses against a nation’s citizens abroad. The United States has been slow to
recognize this principle, but it is now generally agreed upon. International law
having been disposed of on this issue, domestic law must now be discussed. The
Hostage Taking Law, at subsection (b)(1)(A), clearly includes an offender that has
seized or detained a U.S. citizen. The language could not be plainer. With regard to
the Destruction of Aircraft Act and the Federal Aviation Act, 18 U.S.C. § 31, that
the law was intended to apply only when the aircraft in question either began or
ended its flight in the United States. Since the flight in question did not do this, the
Act does not apply. Motion denied in part; granted in part.
Discussion
There are three other existing bases for jurisdiction that are generally accepted.
These are territorial (jurisdiction over territory), national (jurisdiction over a
person) and protective (jurisdiction necessary to protect a state.) Of the five
generally recognized jurisdictional grounds, the passive personal principle has been
met with the most resistance by U.S. courts and officials.
XIII. Recognition and Enforcement of Foreign Judgment
1. 014 National Union Fire Insurance Company v. Stolt-Nielsen
GR No. 87958; April 26, 1990
EMERGENCY RECIT: United Coconut Chemicals (SHIPPER) shipped distilled fatty
acid on board MT “StoltSceptre” (CARRIER). The shipment was insured under a
marine cargo policy with National Union Fire Insurance Co (INSURER). Upon receipt
of the cargo by the consignee in Netherlands, it was totally contaminated. Hence,
claim was made on the INSURER of the cargo. The INSURER as subrogee filed a
claim for damages against the CARRIER with RTC Manila. The CARRIER invoked that
arbitration must be done pursuant to the Charter. The INSURER opposed, arguing
that the provision on arbitration was not included in the Bill of Lading. SC: The
INSURER cannot avoid the binding effect of the arbitration clause. By subrogation,
it became privy to the Charter Party as fully as the SHIPPER before the latter was
indemnified, because as subrogee it stepped into the shoes of the SHIPPER and is
subrogated merely to the latter's rights.
FACTS:
 On 9 January 1985, United Coconut Chemicals, Inc. shipped 404.774
metric tons of distilled C6-C18 fatty acid on board MT "Stolt Sceptre," a
tanker owned by Stolt-Nielsen Philippines Inc., from Bauan, Batangas,
Philippines, consigned to "Nieuwe Matex" at Rotterdam, Netherlands,
covered by Tanker Bill of Lading BL No. BAT-1.
15
  The shipment was insured under a marine cargo policy with Petitioner
National Union Fire Insurance Company of Pittsburg (hereinafter referred
to as INSURER), a non-life American insurance corporation, through its
settling agent in the Philippines, the American International Underwriters
(Philippines), Inc., the other petitioner herein.
 Upon receipt of the cargo by the consignee in the Netherlands, it was
found to be discoloured and totally contaminated. Hence, a claim was
made on the Insurer of the cargo. The insurer as subrogee filed a claim
for damages against the carrier with the RTC of Manila.
 The carrier filed a motion to dismiss on the ground that the case was
arbritrable and pursuant to the charter party as embodied in the bill of
lading, arbitration must be done. The insurer opposed the motion by
arguing that the provision on arbitration was not included in the bill of
lading and even if it was included, it was nevertheless unjust and
unreasonable.
 The RTC denied the motion but upon reconsideration, the resolution on
the motion to dismiss was suspended or deferred.
 The carrier then filed a petition for review on certiorari with preliminary
injunction/TRO which was granted by the CA.
ISSUE: Are the terms of the Charter Party, particularly the provision on arbitration,
binding on the INSURER?
HELD: Yes. The pertinent portion of the Bill of Lading in issue provides in part:
xxx [A]ll the terms whatsoever of the said Charter except the rate and
payment of freight specified therein apply to and govern the rights of the
parties concerned in this shipment.xxx
The provision on arbitration in the Charter Party reads:
4. Arbitration. Any dispute arising from the making, performance or
termination of this Charter Party shall be settled in New York, Owner and
Charterer each appointing an arbitrator, who shall be a merchant, broker
or individual experienced in the shipping business; the two thus chosen, if
they cannot agree, shall nominate a third arbitrator who shall be an
admiralty lawyer. Such arbitration shall be conducted in conformity with
the provisions and procedure of the United States arbitration act, and a
judgment of the court shall be entered upon any award made by said
arbitrator. Nothing in this clause shall be deemed to waive Owner's right
to lien on the cargo for freight, deed of freight, or demurrage.
Clearly, the Bill of Lading incorporates by reference the terms of the Charter Party.
It is settled law that the charter may be made part of the contract under which the
goods are carried by an appropriate reference in the Bill of Lading. As the
respondent Appellate Court found, the INSURER "cannot feign ignorance of the
arbitration clause since it was already charged with notice of the existence of the
charter party due to an appropriate reference thereof in the bill of lading and, by
the exercise of ordinary diligence, it could have easily obtained a copy thereof
either from the shipper or the charterer.
We hold, therefore, that the INSURER cannot avoid the binding effect of the
arbitration clause. By subrogation, it became privy to the Charter Party as fully as
the SHIPPER before the latter was indemnified, because as subrogee it stepped into
the shoes of the SHIPPER-ASSURED and is subrogated merely to the latter's rights.
It can recover only the amount that is recoverable by the assured. And since the
right of action of the SHIPPER-ASSURED is governed by the provisions of the Bill of
Lading, which includes by reference the terms of the Charter Party, necessarily, a
suit by the INSURER is subject to the same agreements. It has not been shown that
the arbitral clause in question is null and void, inoperative, or incapable of being
performed. Nor has any conflict been pointed out between the Charter Party and
the Bill of Lading.
2. PHILSEC INVESMENT CORP. vs. CA
G.R. No. 103493; June 19, 1997
Facts:
Ventura Ducat obtained separate loans in the sum of 2.5m dollars from
AYALA and PHILSEC secured by shares of stocks of Ducat with a market value of
P14m . To pay the loan, another respondent, 1488, INC. thru its president Daic
16
assumed Ducats obligation whereby it sold to ATHONA, Inc. a parcel of land in
Harris County, Texas for 2.8m dollars while PHILSEC and AYALA extended a loan to
ATHONA worth 2.5m dollars as initial payment of the purchase price. ATHONA
executed a promissory note in favor of 1488, Inc. for the balance of 300K dollars
(2.8-2.5= 300k). So now, 1488, Inc. has 2.5M to pay PHILSEC and AYALA (t/n: gi-
assume ni 1488, Inc. ang liability ni Ducat.). Thereafter, Ducat was released from
his indebtedness to PHILSEC and AYALA and the SHARES of Ducat (security) was
delivered into the possession of 1488, Inc. Libog no? KBYE.
ATHONA failed to pay the interest on the balance which made the entire
amount due and demandable. 1488 Inc. sued PHILSEC, AYALA and ATHONA in the
US for the payment of the balance of U$ 307, 209.20 and for damages for breach of
contract and for fraud allegedly perpetrated by petitioners in misrepresenting the
marketability of the shares delivered to it. ATHONA filed an answer with
counterclaim, impleading private respondents herein as counter defendants, for
allegedly conspiring in selling the property at a price over its market value.
While the Civil Case was pending in the United States, petitioners filed a
complaint “For Sum of Money with Damages and Writ of Preliminary
Attachment” against private respondents in the RTC Makati. The complaint
reiterated the allegation of petitioners in their respective counterclaims in the Civil
Action in the United States District Court of Southern Texas that private
respondents committed fraud by selling the property at a price 400 percent more
than its true value of US$800,000.00. (Ang land ang gipertain diri na overpriced).
Petitioners claimed that, as a result of private respondents (1488, Ducat,etc.)
fraudulent misrepresentations, ATHONA, PHILSEC, and AYALA were induced to
enter into the Agreement and to purchase the Houston property (land). Petitioners
prayed that private respondents be ordered to return to ATHONA the excess
payment of US$1,700,000.00 and to pay damages.
Private respondent Ducat moved to dismiss on the grounds of (1) litis
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. 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 participation was to extend
financial accommodation to ATHONA under a separate loan agreement. The trial
court granted Ducats motion to dismiss, stating that the evidentiary requirements
of the controversy may be more suitably tried before the forum of the litis
pendentia in the U.S., under the principle in private international law of forum non
conveniens, even as it noted that Ducat was not a party in the U.S. case. CA also
dismissed the case on same grounds.
Issue: WON the dismissal of the case was proper on the grounds of LITIS
PENDENTIA and FORUM NON CONVENIENS.
Held: No.
(1) On Litis Pendentia
While this Court has given the effect of res judicata to foreign judgments in
several cases, it was after the parties opposed to the judgment had been given
ample opportunity to repel them on grounds allowed under the law. This is
because in this jurisdiction, with respect to actions in personam, as distinguished
from actions in rem, a foreign judgment merely constitutes prima facie evidence
of the justness of the claim of a party and, as such, is subject to proof to the
contrary. Rule 39, §50 provides:
Sec. 50. Effect of foreign judgments. — The effect of a judgment of a tribunal of a
foreign country, having jurisdiction to pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the
title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive evidence
of a right as between the parties and their successors in interest by a subsequent
title; but the judgment may be repelled by evidence of a want of jurisdiction, want
of notice to the party, collusion, fraud, or clear mistake of law or fact.
In the case at bar, it cannot be said that petitioners were given the
opportunity to challenge the judgment of the U.S. court as basis for declaring it
res judicata or conclusive of the rights of private respondents. The proceedings in
17
the trial court were summary. Neither the trial court nor the appellate court was
even furnished copies of the pleadings in the U.S. court or apprised of the evidence
presented thereat, to assure a proper determination of whether the issues then
being litigated in the U.S. court were exactly the issues raised in this case such that
the judgment that might be rendered would constitute res judicata.
(2) On Forum Non Conveniens
The Lower Courts refusal to take cognizance of the case on the
said ground is unjustifiable. First, a motion to dismiss is limited to the
grounds under Rule 16, 1, which does not include forum non
conveniens.The propriety of dismissing a case based on this principle
requires a factual determination, hence, it is more properly considered a
matter of defense. Second, while it is within the discretion of the trial
court to abstain from assuming jurisdiction on this ground, it should do so
only after vital facts are established, to determine whether special
circumstances require the courts desistance.
In this case, the trial court abstained from taking jurisdiction
solely on the basis of the pleadings filed by private respondents in
connection with the motion to dismiss. It failed to consider that one of
the plaintiffs (PHILSEC) is a domestic corporation and one of the
defendants (Ventura Ducat) is a Filipino, and that it was the
extinguishment of the latters debt which was the object of the
transaction under litigation. The trial court arbitrarily dismissed the case
even after finding that Ducat was not a party in the U.S. case.
3. Corpuz vs Sto. Tomas
FACTS: Gerbert R. Corpuz was a former Filipino citizen who acquired Canadian
citizenship through naturalization on November 29, 2000. Gerbert married Daisylyn
T. Sto. Tomas, a Filipina. Due to work, Gerbert left for Canada soon after the
wedding. He returned to the Philippines sometime in April 2005 to surprise
Daisylyn, but was the one surprised when he discovered the greatest the shock of
his life that his wife was having an affair with another man. Gerbert returned to
Canada and filed a petition for divorce. The Superior Court of Justice, Windsor,
Ontario, Canada granted Gerbert’s petition for divorce.
Two years after the divorce, Gerbert found another Filipina to love. Desirous of
marrying his new Filipina fiancée in the Philippines, Gerbert went to the Pasig City
Civil Registry Office and registered the Canadian divorce decree on his previous
marriage. Despite the registration of the divorce decree, an official of the NSO
informed Gerbert that the marriage between him and Daisylyn still subsists under
Philippine law; to be enforceable, the foreign divorce decree must first be judicially
recognized by a competent Philippine court.
Gerbert filed a petition for judicial recognition of foreign divorce and/or declaration
of marriage as dissolved with the RTC. The RTC denied Gerbert’s petition and
concluded that Gerbert was not the proper party to institute the action for judicial
recognition of the foreign divorce decree as only the Filipino spouse can avail of the
remedy, under the second paragraph of Article 26 of the Family Code in order for
him or her to be able to remarry under Philippine law.
ISSUE: Whether the second paragraph of Article 26 of the Family Code extends to
aliens the right to petition a court of this jurisdiction for the recognition of a foreign
divorce decree.
RULING: The alien spouse can claim no right under the second paragraph of Article
26 of the Family Code as the substantive right it establishes is in favor of the
Filipino spouse.
Taking into account the rationale behind the second paragraph of Article 26 of the
Family Code, petitioner contends that the provision applies as well to the benefit of
18
the alien spouse. He claims that the RTC ruling unduly stretched the doctrine in
Orbecido by limiting the standing to file the petition only to the Filipino spouse – an
interpretation he claims to be contrary to the essence of the second paragraph of
Article 26 of the Family Code.
The Family Code recognizes only two types of defective marriages—void and
voidable marriages. In both cases, the basis for the judicial declaration exists before
or at the time of the marriage. Divorce, on the other hand, contemplates the
dissolution of the lawful union for cause arising after the marriage. Our family laws
do not recognize absolute divorce between Filipino citizens.
Through the second paragraph of Article 26 of the Family Code, EO 227 effectively
incorporated into the law this Court’s holding in Van Dorn v. Romillo, Jr. and Pilapil
v. Ibay-Somera. In both cases, the Court refused to acknowledge the alien spouse’s
assertion of marital rights after a foreign court’s divorce decree between the alien
and the Filipino. The Court recognized that the foreign divorce had already severed
the marital bond between the spouses.
As the RTC correctly stated, the provision was included in the law “to avoid the
absurd situation where the Filipino spouse remains married to the alien spouse
who, after obtaining a divorce, is no longer married to the Filipino spouse.” The
legislative intent is for the benefit of the Filipino spouse, by clarifying his or her
marital status, settling the doubts created by the divorce decree. Essentially, the
second paragraph of Article 26 of the Family Code provided the Filipino spouse a
substantive right to have his or her marriage to the alien spouse considered as
dissolved, capacitating him or her to remarry. Without the second paragraph of
Article 26 of the Family Code, the judicial recognition of the foreign decree of
divorce, whether in a proceeding instituted for that purpose or as a related issue in
another proceeding, would be of no significance to the Filipino spouse since our
laws do not recognize divorce as a mode of severing the marital bond; Article 17 of
the Civil Code provides that the policy against absolute divorces cannot be
subverted by judgments promulgated in a foreign country. The inclusion of the
second paragraph in Article 26 of the Family Code provides the direct exception to
this rule and serves as basis for recognizing the dissolution of the marriage
between the Filipino spouse and his or her alien spouse.
An action based on the second paragraph of Article 26 of the Family Code is not
limited to the recognition of the foreign divorce decree. If the court finds that the
decree capacitated the alien spouse to remarry, the courts can declare that the
Filipino spouse is likewise capacitated to contract another marriage. No court in
this jurisdiction, however, can make a similar declaration for the alien spouse
(other than that already established by the decree), whose status and legal capacity
are generally governed by his national law.
The SC qualified the conclusion—i.e., that the second paragraph of Article 26 of the
Family Code bestows no rights in favor of aliens—with the complementary
statement that this conclusion is not sufficient basis to dismiss Gerbert’s petition
before the RTC. The unavailability of the second paragraph of Article 26 of the
Family Code to aliens does not necessarily strip Gerbert of legal interest to petition
the RTC for the recognition of his foreign divorce decree. The foreign divorce
decree itself serves as a presumptive evidence of right in favor of Gerbert, pursuant
to Section 48, Rule 39 of the Rules of Court, which provides for the effect of foreign
judgments. Direct involvement or being the subject of the foreign judgment is
sufficient to clothe a party with the requisite interest to institute an action before
our courts for the recognition of the foreign judgment. In a divorce situation, the
divorce obtained by an alien abroad may be recognized in the Philippines, provided
the divorce is valid according to his or her national law.
4. MINORU FUJIKI, PETITIONER,
vs.
MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL REGISTRAR OF
QUEZON CITY, AND THE ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE
NATIONAL STATISTICS OFFICE,RESPONDENTS.
Facts:
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent
Maria Paz Galela Marinay (Marinay) in the Philippines on 23 January 2004. The
19
marriage did not sit well with petitioner’s parents. Thus, Fujiki could not bring his
wife to Japan where he resides. Eventually, they lost contact with each other.
In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the
first marriage being dissolved, Marinay and Maekara were married on 15 May 2008
in Quezon City, Philippines. Maekara brought Marinay to Japan. However, Marinay
allegedly suffered physical abuse from Maekara. She left Maekara and started to
contact Fujiki.
Fujiki and Marinay met in Japan and they were able to reestablish their
relationship. In 2010, Fujiki helped Marinay obtain a judgment from a family court
in Japan which declared the marriage between Marinay and Maekara void on the
ground of bigamy. On 14 January 2011, Fujiki filed a petition in the RTC entitled:
“Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of
Marriage).”
The decision of the lower courts (RTC): dismissed the petition for "Judicial
Recognition of Foreign Judgment ·(or Decree of Absolute Nullity of Marriage)"
based on improper venue and the lack of personality of petitioner, Minoru Fujiki, to
file the petition.
Issues:
1. Whether the Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) is applicable.
2. Whether a husband or wife of a prior marriage can file a petition to recognize a
foreign judgment nullifying the subsequent marriage between his or her spouse
and a foreign citizen on the ground of bigamy.
3. Whether the Regional Trial Court can recognize the foreign judgment in a
proceeding for cancellation or correction of entries in the Civil Registry under Rule
108 of the Rules of Court.
Held:
1. No. Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to
recognize a foreign judgment relating to the status of a marriage where one of the
parties is a citizen of a foreign country. Moreover, in Juliano-Llave v. Republic, this
Court held that the rule in A.M. No. 02- 11-10-SC that only the husband or wife can
file a declaration of nullity or annulment of marriage “does not apply if the reason
behind the petition is bigamy.” While the Philippines has no divorce law, the
Japanese Family Court judgment is fully consistent with Philippine public policy, as
bigamous marriages are declared void from the beginning under Article 35(4) of the
Family Code. Bigamy is a crime under Article 349 of the Revised Penal Code. Thus,
Fujiki can prove the existence of the Japanese Family Court judgment in accordance
with Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules
of Court.
2. Yes, the recognition of the foreign divorce decree may be made in a Rule 108
proceeding itself, as the object of special proceedings (such as that in Rule 108 of
the Rules of Court) is precisely to establish the status or right of a party or a
particular fact.”
 Rule 108, Section 1 of the Rules of Court states:
Sec. 1. Who may file petition. — Any person interested in any act, event, order or
decree concerning the civil status of persons which has been recorded in the civil
register, may file a verified petition for the cancellation or correction of any entry
relating thereto, with the Regional Trial Court of the province where the
corresponding civil registry is located. (Emphasis supplied)
There is no doubt that the prior spouse has a personal and material interest in
maintaining the integrity of the marriage he contracted and the property relations
arising from it.
3. Yes, there is neither circumvention of the substantive and procedural safeguards
of marriage under Philippine law, nor of the jurisdiction of Family Courts under R.A.
No. 8369. A recognition of a foreign judgment is not an action to nullify a marriage.
It is an action for Philippine courts to recognize the effectivity of a foreign
judgment, which presupposes a case which was already tried and decided under
foreign law.
In the recognition of foreign judgments, Philippine courts are incompetent to
substitute their judgment on how a case was decided under foreign law. They
cannot decide on the “family rights and duties, or on the status, condition and legal
capacity” of the foreign citizen who is a party to the foreign judgment. Thus,
Philippine courts are limited to the question of whether to extend the effect of a
foreign judgment in the Philippines. In a foreign judgment relating to the status of a
marriage involving a citizen of a foreign country, Philippine courts only decide
whether to extend its effect to the Filipino party, under the rule of lex
nationalii expressed in Article 15 of the Civil Code.
20
For this purpose, Philippine courts will only determine (1) whether the foreign
judgment is inconsistent with an overriding public policy in the Philippines; and (2)
whether any alleging party is able to prove an extrinsic ground to repel the foreign
judgment, i.e. want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact. If there is neither inconsistency with public policy nor
adequate proof to repel the judgment, Philippine courts should, by default,
recognize the foreign judgment as part of the comity of nations.
5. BORTHWICK vs. CASTRO BARTOLOME
FACTS
Petitioner William Borthwick, an American citizen living in the Philippines, owned
real property interests in Hawaii. In his business dealings with private respondent,
Joseph Scallon, Borthwick issued the promissory notes now sued upon, but failed to
pay the sums owing upon maturity and despite demands. The promissory notes
provided that upon default, action may be brought for collection in Los Angeles,
California, or at Scallon's option, in Manila or Honolulu.
Borthwick was served with summons when he was in California, pursuant to
Hawaiian law allowing service of process on a person outside the territorial
confines of the State. Because Borthwick ignored the summons, a judgment by
default was entered against him.
However, Scallon's attempt to have the judgment executed in Hawaii and
California failed because Borthwick had no assets in those states. Scallon then
came to the Philippines and brought suit against Borthwick seeking enforcement
of the default judgment of the Hawaii court. Again, after due proceedings,
judgment by default was rendered against him, ordering Borthwick to pay Scallon
the amount prayed for.
The court issued an amendatory order and upon receipt by Borthwick, he moved
for a new trial, alleging that the promissory notes did not arise from business
dealings in Hawaii, nor did he own real estate therein. He contended that the
judgment of the court of Hawaii is unenforceable in the Philippines because it was
invalid for want of jurisdiction over the cause of action and over his person. The
motion was denied, hence this petition.]
RULING
"It is true that a foreign judgment against a person is merely "presumptive
evidence of a right as between the parties," and rejection thereof may be justified,
among others, by "evidence of a want of jurisdiction" of the issuing authority,
under Rule 39 of the Rules of Court. In the case at bar, the jurisdiction of the Circuit
Court of Hawaii hinged entirely on the existence of either of two facts in
accordance with its State laws, i.e., either Borthwick owned real property in Hawaii,
or the promissory notes' sued upon resulted from his business transactions therein.
Scallon's complaint clearly alleged both facts. Borthwick was accorded opportunity
to answer the complaint and impugn those facts, but he failed to appear and was in
consequence declared in default. There thus exists no evidence in the record of the
Hawaii case upon which to lay a conclusion of lack of jurisdiction, as Borthwick now
urges.
The opportunity to negate the foreign court's competence by proving the non-
existence of said jurisdictional facts established in the original action, was again
afforded to Borthwick in the Court of First Instance of MF kati, where enforcement
of the Hawaii judgment was sought. This time it was the summons of the domestic
court which Borthwick chose to ignore, but with the same result: he was declared
in default. And in the default judgment subsequently promulgated, the Court a quo
decreed enforcement of die judgment affirming among others the jurisdictional
facts, that Borthwick owned real property in Hawaii and transacted business
therein.
In the light of these antecedents, it is plain that what Borthwick seeks in essence is
one more opportunity, a third, to challenge the jurisdiction of the Hawaii Court and
the merits of the cause of action which that Court had adjudged to have been
established against him. This he may obtain only if he succeeds in showing that the
declaration of his default was incorrect. He has unfortunately not been able to do
that; hence, the verdict must go against him."
6. PHILIPPINE INTERNATIONAL SHIPPING
CORPORATION vs. CA
FACTS:
In 1979 to 1981, Philippine International Shipping
Corporation (PISC) leased from Interpool Ltd. and its
wholly owned subsidiary, the Container Trading
Corporation, several containers pursuant to the
Membership Agreement and Hiring Conditions and the
21
Master Equipment Leasing Agreement both dated June
8, 1979. The other petitioners Philippine Construction
Consortium Corporation, Pacific Mills Inc. and Universal
Steel Smelting Company, guaranteed to pay the
obligation due and any liability of the PISC arising out of
the leasing or purchasing of equipment.
Court's Default Judgment against them. Petitioners
contended, finally, that assuming the validity of the
disputed Default Judgment, the same may be enforced
only against petitioner PISC the 9 petitioners not having
been impleaded originally in the case filed in New York,
U.S.A.

In 1979 to 1981, PISC incurred outstanding and

unpaid obligations with Interpool representing unpaid per
diems, drop-off charges, interest and other agreed
charges, resulting in a case before the US District Court,
Southern District of New York wherein a default judgment ISSUE:
against petitioners was rendered ordering the corp. to
pay the liquidated damages, together with interest. To Should the US District Court default judgment be
enforce the default judgment of the US District Court, a enforced PISC and against the 9 other petitioners?
complaint was instituted against PISC and other
HELD:
guarantors before the QC RTC. PISC failed to answer the
complaint and they were declared in default. The RTC
Yes.
ruled in favor of Interpool and which was affirmed by the
CA. The evidence of record clearly shows that the U.S.
District Court had validly acquired jurisdiction over PISC
In the first instance, petitioners contended that the
under the procedural law applicable in that forum i.e., the
U.S. District Court never acquired jurisdiction over their
U.S. Federal Rules on Civil Procedure. Copies of the
persons as they had not been served with summoned
Summons and Complaint which were in fact attached to
and a copy of the complaint. In the second instance,
the Petition for Review filed with the SC, were stamped
petitioners contend that such jurisdictional infirmity
"Received, 18 Jan 1983, PISC Manila." indicating that
effectively prevented the Regional Trial Court of Quezon
service thereof had been made upon and acknowledged
City from taking cognizance of the Complaint in Civil
by the PISC office in Manila on, 18 January 1983 That
Case No. Q-39927 and from enforcing the U.S. District
foreign judgment-which had become final and executory,

22
no appeal having been taken therefrom and perfected by
petitioner PISC-is thus "presumptive evidence of a right
as between the parties and their successors in interest by
a subsequent title." The SC note, further that there has
been in this case no showing by petitioners that the
Default Judgment rendered by the U.S. District Court was
vitiated by "want of notice to the party, collusion, fraud, or
clear mistake of law or fact.” In other words, the Default
Judgment imposing upon petitioner PISC a liability of
U.S. $94,456.28 in favor of respondent Interpool, is valid
and may be enforced in this jurisdiction.
The existence of liability on the part of petitioner
PISC having been duly established in the U.S. case, it
was not improper for respondent Interpool, in seeking
enforcement in this jurisdiction of the foreign judgment
imposing such liability, to have included the other 9
petitioners herein (i.e., George Lim, Marcos Bautista,
Carlos Laude, Tan Sing Lim, Antonio Liu Lao, Ong Teh
Philippine Consortium Construction Corporation, Pacific
Mills, Inc. and Universal Steel Smelting Co., Inc.) as
defendants in civil case, filed with the Regional Trial
Court of Quezon City. The record shows that said 9
petitioners had executed continuing guarantees" to
secure performance by petitioner PISC of its contractual
obligations. As guarantors, they had held themselves out
as liable. "Whether jointly, severally, or in the alternative,"
to respondent Interpool under their separate "continuing
guarantees" executed in the Philippines. The New York
award of U.S. $94,456.28 is precisely premised upon a
breach by PISC of its own obligations under those
Agreements. The SC considered the 9 other petitioners
as persons against whom [a] right to relief in respect to or
arising out of the same transaction or series of
transactions [has been] alleged to exist" and,
consequently, properly impleaded as defendants. There
was, in other words, no need at all, in order that case
would prosper, for respondent Interpool to have first
impleaded the 9 other petitioners in the New York case
and obtained judgment against all 10 petitioners.
7. NORTHWEST ORIENT AIRLINES, INC. petitioner,
vs.
COURT OF APPEALS and C.F. SHARP & COMPANY
INC., respondents.
FACTS:
Petitioner Northwest Orient Airlines, Inc.
(NORTHWEST), a corporation organized under the laws
of the State of Minnesota, U.S.A., sought to enforce in
the RTC- Manila, a judgment rendered in its favor by a
Japanese court against private respondent C.F. Sharp &
Company, Inc., (SHARP), a corporation incorporated
under Philippine laws.
23
 On May 9, 1974, Northwest Airlines and Sharp,
through its Japan branch, entered into an International
Passenger Sales Agency Agreement, whereby the former
authorized the latter to sell its air transportation tickets.
Unable to remit the proceeds of the ticket sales made by
defendant on behalf of the plaintiff under the said
agreement, plaintiff on March 25, 1980 sued defendant in
Tokyo, Japan, for collection of the unremitted proceeds of
the ticket sales, with claim for damages.
After the two attempts of service at its Office at the
Taiheiyo Building, 3rd floor, 132, Yamashita-cho, Naka-
ku, Yokohoma, Kanagawa Prefecture by the 36th Civil
Department, Tokyo District Court of Japan, the judge of
the Tokyo District Court decided to have the complaint
and the writs of summons served at the head office of the
defendant in Manila.
On July 11, 1980, the Director of the Tokyo District
Court requested the Supreme Court of Japan to serve the
summons through diplomatic channels upon the
defendant’s head office in Manila and defendant received
from Deputy Sheriff Rolando Balingit the writ of summons
on August 28, 1980. Despite receipt of the same,
defendant failed to appear at the scheduled hearing.
Thus, the Tokyo Court proceeded to hear the plaintiff’s
complaint and on [January 29, 1981], rendered judgment
ordering the defendant to pay the plaintiff the sum of
83,158,195 Yen and damages for delay at the rate of 6%
per annum from August 28, 1980 up to and until payment
is completed. Defendant not having appealed the
judgment, the same became final and executory.
Plaintiff was unable to execute the decision in
Japan, hence, on May 20, 1983, a suit for enforcement of
the judgment was filed by plaintiff before the Regional
Trial Court of Manila Branch 54. Defendant filed its
answer averring that the judgment of the Japanese Court:
(1) the foreign judgment sought to be enforced is null and
void for want of jurisdiction and (2) the said judgment is
contrary to Philippine law and public policy and rendered
without due process of law.
In its decision, the Court of Appeals sustained the
trial court. It agreed with the latter in its reliance upon
Boudard vs. Tait wherein it was held that “the process of
the court has no extraterritorial effect and no jurisdiction
is acquired over the person of the defendant by serving
him beyond the boundaries of the state.” To support its
position, the Court of Appeals further stated:
In an action strictly in personam, such as the
instant case, personal service of summons within the
forum is required for the court to acquire jurisdiction over
the defendant (Magdalena Estate Inc. vs. Nieto, 125
SCRA 230). To confer jurisdiction on the court, personal
or substituted service of summons on the defendant not
extraterritorial service is necessary.
24
ISSUE:
Would the Japanese court have jurisdiction over
C.F. Sharp & Company Inc.?
HELD:
YES.
A foreign judgment is presumed to be valid and
binding in the country from which it comes, until the
contrary is shown. It is also proper to presume the
regularity of the proceedings and the giving of due notice
therein. The judgment may, however, be assailed by
evidence of want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.
Being the party challenging the judgment rendered
by the Japanese court, SHARP had the duty to
demonstrate the invalidity of such judgment. It is settled
that matters of remedy and procedure such as those
relating to the service of process upon a defendant are
governed by the lexfori or the internal law of the forum.
In this case, it is the procedural law of Japan where the
judgment was rendered that determines the validity of the
extraterritorial service of process on SHARP. As to what
this law is, it is a question of fact, not of law. It was then
incumbent upon SHARP to present evidence as to what
that Japanese procedural law is and to show that under
it, the assailed extraterritorial service is invalid. But, it did
not. Accordingly, the presumption of validity and
regularity of the service of summons and the decision
thereafter rendered by the Japanese court must stand.
Alternatively in the light of the absence of proof
regarding Japanese law, the presumption of identity or
similarity or the so-called processual presumption may be
invoked. Applying it, the Japanese law on the matter is
presumed to be similar with the Philippine law on service
of summons on a private foreign corporation doing
business in the Philippines.
Section 14, Rule 14 of the Rules of Court provides
that if the defendant is a foreign corporation doing
business in the Philippines, service may be made: (1) on
its resident agent designated in accordance with law for
that purpose, or, (2) if there is no such resident agent, on
the government official designated by law to that effect;
or (3) on any of its officers or agents within the
Philippines. Where the corporation has no such agent,
service shall be made on the government official
designated by law, to wit: (a) the Insurance
Commissioner in the case of a foreign insurance
company; (b) the Superintendent of Banks, in the case of
a foreign banking corporation; and (c) the Securities and
Exchange Commission, in the case of other foreign
corporations duly licensed to do business in the
Philippines.
25
 Nowhere in its pleadings did SHARP profess to
having had a resident agent authorized to receive court
processes in Japan.While it may be true that service
could have been made upon any of the officers or agents
of SHARP at its three other branches in Japan, the
availability of such a recourse would not preclude service
upon the proper government official, as stated above.As
found by the respondent court, two attempts of service
were made at SHARP’s Yokohama branch. Both were
unsuccessful. Thus, the Tokyo District Court requested
the Supreme Court of Japan to cause the delivery of the
summons and other legal documents to the Philippines.
Acting on that request, the Supreme Court of
Japan sent the summons together with the other legal
documents to the Ministry of Foreign Affairs of Japan
which, in turn, forwarded the same to the Japanese
Embassy in Manila. Thereafter, the court processes were
delivered to the Ministry (now Department) of Foreign
Affairs of the Philippines, then to the Executive Judge of
the Court of First Instance (now Regional Trial Court) of
Manila, who forthwith ordered Deputy Sheriff Rolando
Balingit to serve the same on SHARP at its principal
office in Manila. This service is equivalent to service on
the proper government official under Section 14, Rule 14
of the Rules of Court, in relation to Section 128 of the
Corporation Code. Hence, SHARP’s contention that such
manner of service is not valid under Philippine laws holds
no water.
We find NORTHWEST’s claim for attorney’s fees,
litigation expenses, and exemplary damages to be
without merit. We find no evidence that would justify an
award for attorney’s fees and litigation expenses under
Article 2208 of the Civil Code of the Philippines. Nor is an
award for exemplary damages warranted.
WHEREFORE, the instant petition is partly
GRANTED, and the challenged decision is AFFIRMED
insofar as it denied NORTHWEST’s claims for attorney’s
fees, litigation expenses, and exemplary damages but
REVERSED insofar as in sustained the trial court’s
dismissal of NORTHWEST’s complaint in Civil Case No.
83-17637 of Branch 54 of the Regional Trial Court of
Manila, and another in its stead is hereby rendered
ORDERING private respondent C.F. SHARP L
COMPANY, INC. to pay to NORTHWEST the amounts
adjudged in the foreign judgment subject of said case,
with interest thereon at the legal rate from the filing of the
complaint therein until the said foreign judgment is fully
satisfied.
26
8. PHILSEC INVESTMENT CORPORATION, BPI-
INTERNATIONAL FINANCE LIMITED, and ATHONA
HOLDINGS, N.V., petitioners,
vs.
THE HONORABLE COURT OF APPEALS, 1488, INC.,
DRAGO DAIC, VENTURA O. DUCAT, PRECIOSO R.
PERLAS, and WILLIAM H. CRAIG, respondents.
FACTS:
Private respondent Ventura O. Ducat obtained
separate loans from petitioners Ayala International
Finance Limited (AYALA) and Philsec Investment
Corporation (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 Drago Daic,
assumed Ducat's obligation under an Agreement.
1488, Inc. executed a warranty deed with vendors
lien by which a parcel of land in Harris County Texas,
USA was sold to Petitioner ATHONA for
US$2,807,209.02 in order to assume Ducat’s obligation
to AYALA and PHILSEC for the payment of his loan,
secured by shares of stock.
AYALA and PHILSEC extended a loan to
ATHONA in the amount of US$2,500,000 as initial
payment of the purchase price of the parcel of land the
balance was to be paid by means of a promissory note
executed by ATHONA in favor of 1488, Inc.
Subsequently, upon receipt of US$ 2,500,000 from 1488,
Inc., PHILSEC and AYALA released Ducat from his
indebtedness and delivered to 1488, Inc. all the shares of
stock in their possession belonging to Ducat.
ATHONA failed to pay the interest on the balance
and the entire amount became due and demandable.
Private respondent 1488, Inc. sued petitioners PHILSEC,
AYALA, and ATHONA in the United States for payment
of the balance of US$307,209.02 and for damages for
breach of contract and for fraud allegedly perpetrated by
petitioners in misrepresenting the marketability of the
shares of stock delivered to 1488, Inc. under the
Agreement.
While Civil Case was pending in the United States,
petitioners filed a complaint "For Sum of Money with
Damages and Writ of Preliminary Attachment" against
private respondents in the Regional Trial Court of Makati.
The complaint reiterated the allegation of petitioners in
their respective counterclaims in Civil Action in the United
States District Court of Southern Texas that private
respondents committed fraud by selling the property at a
price 400 percent more than its true value of
27
US$800,000.00. Petitioners claimed that, as a result of
private respondents' fraudulent misrepresentations,
ATHONA, PHILSEC, and AYALA were induced to enter
into the Agreement and to purchase the Houston
property. On April 20, 1987, the trial court issued a writ of
preliminary attachment against the real and personal
properties of private respondents.
Private respondent Ducat moved to dismiss Civil
Case No. 16563 on the grounds of (1) litis pendentia, vis-
avis 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 trial court granted Ducat's motion to dismiss,
stating that "the evidentiary requirements of the
controversy may be more suitably tried before the forum
of the litis pendentia in the U.S., under the principle in
private international law of forum non conveniens." The
trial court also held itself without jurisdiction over 1488,
Inc. and Daic because they were nonresidents and the
action was not an action in rem or quasi in rem, so that
extraterritorial service of summons was ineffective. The
trial court subsequently lifted the writ of attachment it had
earlier issued against the shares of stocks of 1488, Inc.
and Daic.
A separate hearing was held with regard to 1488,
Inc. and Daic's motion to dismiss. The trial court granted
the motion to dismiss filed by 1488, Inc. and Daic on the
ground of litis pendentia.
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 the defendants. The Court
of Appeals affirmed the dismissal.
ISSUES:
1. Would the civil action filed be barred by the
judgment of the U.S court?
2. Would the dismissal of the civil action be justified
on the ground of forum non conveniens?
3. Does the trial court have jurisdiction over 1488,
Inc. and Daic.
RULINGS:
1. No. The foreign judgment cannot be given the
effect of res judicata without giving them an
opportunity to impeach it on grounds stated in
Rule 39, sec. 50 of the Rules of Court, to wit:
"want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact." In
the case at bar, it cannot be said that petitioners
were given the opportunity to challenge the
28
 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 the
appellate court was even furnished copies of the
pleadings in the U.S. court or apprised of the
evidence presented thereat, to assure a proper
determination of whether the issues then being
litigated in the U.S. court were exactly the issues
raised in this case such that the judgment that
might be rendered would constitute res judicata.
As the trial court stated in its disputed order dated
March 9, 1988.
2. No. The trial court’s refusal to take cognizance of
the case is unjustified under the principle of forum
non conveniens. First, a motion to dismiss is
limited to the grounds under Rule 16, sec. 1,
which does not include forum non conveniens.
The propriety of dismissing a case based on this
principle requires a factual determination, hence,
it is more properly considered a matter of
defense. Second, while it is within the discretion
of the trial court to abstain from assuming
jurisdiction on this ground, it should do so only
after "vital facts are established, to determine
whether special circumstances" require the court's
desistance.
In this case, the trial court abstained from
taking jurisdiction solely on the basis of the
pleadings filed by private respondents in
connection with the motion to dismiss. It failed to
consider that one of the plaintiffs (PHILSEC) is a
domestic corporation and one of the defendants
(Ventura Ducat) is a Filipino, and that it was the
extinguishment of the latter's debt which was the
object of the transaction under litigation. The trial
court arbitrarily dismissed the case even after
finding that Ducat was not a party in the U.S. case.
3. It was error we think for the Court of Appeals and
the trial court to hold that jurisdiction over 1488,
Inc. and Daic could not be obtained because this
is an action in personam and summons were
served by extraterritorial service. Rule 14, §17 on
extraterritorial service provides that service of
summons on a nonresident defendant may be
effected out of the Philippines by leave of Court
where, among others, "the property of the
defendant has been attached within the
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, 1987.
29
9. PHILIPPINE ALUMINUM WHEELS, INC.,petitioner,
vs.
FASGI ENTERPRISES, INC., respondent.
FACTS:
On 01 June 1978, FASGI Enterprises Incorporated
(“FASGI”), a corporation organized and existing under
and by virtue of the laws of the State of California, United
States of America, entered into a distributorship
arrangement with Philippine Aluminum Wheels,
Incorporated (“PAWI”), a Philippine corporation, and
FratelliPedriniSarezzo S.P.A. (“FPS”), an Italian
corporation. The agreement provided for the purchase,
importation and distributorship in the United States of
aluminum wheels manufactured by PAWI. FASGI then
paid PAWI the FOB value of the wheels. Unfortunately,
FASGI later found the shipment to be defective and in
non-compliance with the contract.
On 21 September 1979, FASGI instituted an
action against PAWI and FPS for breach of contract and
recovery of damages in the amount of US$2,316,591.00
before the United States District Court for the Central
District of California. In the interim, two agreements were
entered by the parties but PAWI kept on failing to
discharge its obligations therein. Irked by PAWI’s
persistent default, FASGI filed with the US District Court
of the Central District of California the agreements for
judgment against PAWI.
On 24 August 1982, FASGI filed a notice of entry
of judgment. Unable to obtain satisfaction of the final
judgment within the United States, FASGI filed a
complaint for “enforcement of foreign judgment”, before
RTC Makati. The Makati court, however, dismissed the
case, on the ground that the decree was tainted with
collusion, fraud, and clear mistake of law and fact. The
lower court ruled that the foreign judgment ignored the
reciprocal obligations of the parties. While the assailed
foreign judgment ordered the return by PAWI of the
purchase amount, no similar order was made requiring
FASGI to return to PAWI the third and fourth containers
of wheels. This situation amounted to an unjust
enrichment on the part of FASGI. Furthermore, the
Regional Trial Court said, agreements which the
California court had based its judgment were a nullity for
having been entered into by Mr. Thomas Ready, counsel
for PAWI, without the latter’s authorization. However, the
Court of Appeals reversed this decision.
ISSUE:
Whether or not the Philippine Court may enforce
the said foreign judgment?
HELD:
30
 In this jurisdiction, a valid judgment rendered by a
foreign tribunal may be recognized insofar as the
immediate parties and the underlying cause of action are
concerned so long as it is convincingly shown that there
has been an opportunity for a full and fair hearing before
a court of competent jurisdiction; that trial upon regular
proceedings has been conducted, following due citation
or voluntary appearance of the defendant and under a
system of jurisprudence likely to secure an impartial
administration of justice; and that there is nothing to
indicate either a prejudice in court and in the system of
laws under which it is sitting or fraud in procuring the
judgment. PAWI claims that its counsel, Mr. Ready, has
acted without its authority. Verily, in this jurisdiction, it is
clear that an attorney cannot, without a client’s
authorization, settle the action or subject matter of the
litigation even when he honestly believes that such a
settlement will best serve his client’s interest. However,
PAWI failed to substantiate this complain with sufficient
evidence. Hence, the foreign judgment must be enforced.
Even if PAWI assailed that fraud tainted the
agreements which the US Court based its judgment, this
cannot prevent the enforcement of said judgment. PAWI
claimed that there was collusion and fraud in the signing
of the agreements. Although the US Court already
adjudicated on this matter, PAWI insisted on raising it
again in this Court. Fraud, to hinder the enforcement
within this jurisdiction of a foreign judgment, must be
extrinsic, i.e., fraud based on facts not controverted or
resolved in the case where judgment is rendered, or that
which would go to the jurisdiction of the court or would
deprive the party against whom judgment is rendered a
chance to defend the action to which he has a
meritorious case or defense. In fine, intrinsic fraud, that
is, fraud which goes to the very existence of the cause of
action – such as fraud in obtaining the consent to a
contract – is deemed already adjudged, and it, therefore,
cannot militate against the recognition or enforcement of
the foreign judgment.
10. Mijares vs. Ranada et al GR 139325 April 12, 2005
FACTS:
Invoking the Alien Tort Act, petitioners Mijares, et
al., all of whom suffered human rights violations during
the Marcos era, obtained a Final Judgment in their favor
against the Estate of the late Ferdinand Marcos
amounting to roughly $1.9B in compensatory and
exemplary damages for tortuous violations of
international law in the US District Court of Hawaii. This
Final Judgment was affirmed by the US Court of Appeals.
As a consequence, Petitioners filed a Complaint
with the RTC Makati for the enforcement of the Final
Judgment, paying P410 as docket and filing fees based
on Rule 141, Sec. 7 (b) where the value of the subject
matter is incapable of pecuniary estimation. The Estate of
31
Marcos, however, filed a motion to dismiss alleging the
non-payment of the correct filing fees.
Regional Trial Court of Makati dismissed the
Complaint stating that the subject matter was capable of
pecuniary estimation as it involved a judgment rendered
by a foreign court ordering the payment of a definite sum
of money allowing for the easy determination of the value
of the foreign judgment. As such, the proper filing fee was
P472M, which Petitioners had not paid. In dismissing the
complaint, the respondent judge relied on Section 7(a),
Rule 141 as basis for the computation of the filing fee of
over P472 Million.
ISSUES:
1. Is the amount paid by the petitioners the proper
filing fee?
2. Is it necessary for an action to be filed in order to
enforce a foreign judgment?
3. Is there a distinction between action one in
personam and in rem?
4. Would the actionable issues be generally
restricted to a review of jurisdiction of the foreign
court, the service of personal notice, collusion,
fraud, or mistake of fact or law?
HELD:
1. Yes, but on a different basis—amount merely
corresponds to the same amount required for
“other actions not involving property”. RTC Makati
erred in concluding that the filing fee should be
computed on the basis of the total sum claimed or
the stated value of the property in litigation. The
Petitioner’s Complaint was lodged against the
Estate of Marcos but it is clearly based on a
judgment, the Final Judgment of the US District
Court. However, the Petitioners err in stating that
the Final Judgment is incapable of pecuniary
estimation because it is so capable. On this point,
Petitioners state that this might lead to an instance
wherein a first level court (MTC, MeTC, etc.) would
have jurisdiction to enforce a foreign judgment.
Under the B.P.129, such courts are not vested
with such jurisdiction. Section 33 of B.P.129 refers
to instances wherein the cause of action or subject
matter pertains to an assertion of rights over
property or a sum of money. But here, the subject
matter is the foreign judgment itself. Section 16 of
B.P.129 reveals that the complaint for enforcement
of judgment even if capable of pecuniary
estimation would fall under the jurisdiction of the
RTCs. Thus, the Complaint to enforce the US
District Court judgment is one capable of
pecuniary estimations but at the same time, it is
also an action based on judgment against an
estate, thus placing it beyond the ambit of Section
7(a) of Rule 141. What governs the proper
computation of the filing fees over Complaints for
32
 the enforcement of foreign judgments is Section
7(b)(3), involving “other actions not involving
property.”
2. Yes. It is clear then that it is usually necessary for
an action to be filed in order to enforce a foreign
judgment, even if such judgment has conclusive
effect as in the case of in rem actions, if only for
the purpose of allowing the losing party an
opportunity to challenge the foreign judgment, and
in order for the court to properly determine its
efficacy. Consequently, the party attacking a
foreign judgment has the burden of overcoming
the presumption of its validity.
3. Yes. There is an evident distinction between a
foreign judgment in an action in rem and one in
personam. For an action in rem, the foreign
judgment is deemed conclusive upon the title to
the thing, while in an action in personam, the
foreign judgment is presumptive, and not
conclusive, of a right as between the parties and
their successors in interest by a subsequent title.
However, in both cases, the foreign judgment is
susceptible to impeachment in our local courts on
the grounds of want of jurisdiction or notice to the
party, collusion, fraud, or clear mistake of law or
fact. Thus, the party aggrieved by the foreign
judgment is entitled to defend against the
enforcement of such decision in the local forum. It
is essential that there should be an opportunity to
challenge the foreign judgment, in order for the
court in this jurisdiction to properly determine its
efficacy.
4. Yes. As stated in Section 48, Rule 39, the
actionable issues are generally restricted to a
review of jurisdiction of the foreign court, the
service of personal notice, collusion, fraud, or
mistake of fact or law. The limitations on review is
in consonance with a strong and pervasive policy
in all legal systems to limit repetitive litigation on
claims and issues. Otherwise known as the policy
of preclusion, it seeks to protect party expectations
resulting from previous litigation, to safeguard
against the harassment of defendants, to insure
that the task of courts not be increased by never-
ending litigation of the same disputes, and in a
larger sense to promote what Lord Coke in the
Ferrer’s Case of 1599 stated to be the goal of all
law: “rest and quietness.” If every judgment of a
foreign court were reviewable on the merits, the
plaintiff would be forced back on his/her original
cause of action, rendering immaterial the
previously concluded litigation.
11. ASIAVEST MERCHANT BANKERS (M) BERHAD,
petitioner,
vs.
COURT OF APPEALS and PHILIPPINE NATIONAL
CONSTRUCTION CORPORATION, respondents.
FACTS:
33
 The petitioner Asiavest Merchant Bankers (M)
Berhad is a corporation organized under the laws of
Malaysia while private respondent Philippine National
Construction Corporation is a corporation duly
incorporated and existing under Philippine laws.
Petitioner initiated a suit for collection against
private respondent, then known as Construction and
Development Corporation of the Philippines, before the
High Court of Malaya in Kuala Lumpur entitled Asiavest
Merchant Bankers (M) Berhad v. Asiavest CDCP Sdn.
Bhd. and Construction and Development Corporation of
the Philippines.
Petitioner sought to recover the indemnity of the
performance bond it had put up in favor of private
respondent to guarantee the completion of the Felda
Project and the non-payment of the loan it extended to
Asiavest-CDCP Sdn. Bhd. for the completion of Paloh
Hanai and Kuantan By-Pass Project.
The High Court of Malaya (Commercial Division)
rendered judgment in favor of the petitioner and against
the private respondent.
Following unsuccessful attempts to secure
payment from private respondent under the judgment,
petitioner initiated the complaint before Regional Trial
Court of Pasig, Metro Manila, to enforce the judgment of
the High Court of Malaya.
Private respondent sought the dismissal of the
case via a Motion to Dismiss, contending that the alleged
judgment of the High Court of Malaya should be denied
recognition or enforcement since on its face, it is tainted
with want of jurisdiction, want of notice to private
respondent, collusion and/or fraud, and there was a clear
mistake of law or fact. Dismissal was, however, denied by
the trial court considering that the grounds relied upon
were not the proper grounds in a motion to dismiss under
Rule 16 of the Revised Rules of Court.
On May 22, 1989, private respondent filed its
Answer with Compulsory Counterclaim and therein raised
the grounds it brought up in its motion to dismiss. In its
reply, the petitioner contended that the High Court of
Malaya acquired jurisdiction over the person of private
respondent by its voluntary submission to the court’s
jurisdiction through its appointed counsel, Mr. Khay Chay
Tee. Furthermore, private respondents counsel waived
any and all objections to the High Court’s jurisdiction in a
pleading filed before the court.
The trial court rendered its Decision dismissing
petitioners’ complaint. Petitioner interposed an appeal
with the Court of Appeals, but the appellate court
dismissed the same and affirmed the decision of the trial
court.
ISSUES:
34
 1. Would the Malaysian court did not acquire
personal jurisdiction over Philippine National
Construction Corporation, notwithstanding that
(a) the foreign court had served summons on
Philippine National Construction Corporation at
its Malaysia office, and (b) Philippine National
Construction Corporation itself appeared by
counsel in the case before that court?
2. Should the Philippine court should deny
recognition and enforcement of the judgment of
the Malaysian court
RULING:
1. The foregoing reasons or grounds relied upon
by private respondent in preventing
enforcement and recognition of the Malaysian
judgment primarily refer to matters of remedy
and procedure taken by the Malaysian High
Court relative to the suit for collection initiated
by petitioner. Needless to stress, the
recognition to be accorded a foreign judgment
is not necessarily affected by the fact that the
procedure in the courts of the country in which
such judgment was rendered differs from that
of the courts of the country in which the
judgment is relied on. Ultimately, matters of
remedy and procedure such as those relating
to the service of summons or court process
upon the defendant, the authority of counsel to
appear and represent a defendant and the
formal requirements in a decision are governed
by the lex fori or the internal law of the forum,
i.e., the law of Malaysia in this case.
In this case, it is the procedural law of
Malaysia where the judgment was rendered
that determines the validity of the service of
court process on private respondent as well as
other matters raised by it. As to what the
Malaysian procedural law is, remains a
question of fact, not of law. It may not be taken
judicial notice of and must be pleaded and
proved like any other fact. Sections 24 and 25
of Rule 132 of the Revised Rules of Court
provide that it may be evidenced by an official
publication or by a duly attested or
authenticated copy thereof. It was then
incumbent upon private respondent to present
evidence as to what that Malaysian procedural
law is and to show that under it, the assailed
service of summons upon a financial officer of
a corporation, as alleged by it, is invalid. It did
not. Accordingly, the presumption of validity
and regularity of service of summons and the
decision thereafter rendered by the High Court
of Malaya must stand.
35
2. Generally, in the absence of a special compact,
no sovereign is bound to give effect within its
dominion to a judgment rendered by a tribunal
of another country; however, the rules of
comity, utility and convenience of nations have
established a usage among civilized states by
which final judgments of foreign courts of
competent jurisdiction are reciprocally
respected and rendered efficacious under
certain conditions that may vary in different
countries.
In this jurisdiction, a valid judgment
rendered by a foreign tribunal may be
recognized insofar as the immediate parties
and the underlying cause of action are
concerned so long as it is convincingly shown
that there has been an opportunity for a full and
fair hearing before a court of competent
jurisdiction; that the trial upon regular
proceedings has been conducted, following
due citation or voluntary appearance of the
defendant and under a system of jurisprudence
likely to secure an impartial administration of
justice; and that there is nothing to indicate
either a prejudice in court and in the system of
laws under which it is sitting or fraud in
procuring the judgment.
A foreign judgment is presumed to be
valid and binding in the country from which it
comes, until a contrary showing, on the basis
of a presumption of regularity of proceedings
and the giving of due notice in the foreign
forum. Under Section 50(b), Rule 39 of the
Revised Rules of Court, which was the
governing law at the time the instant case was
decided by the trial court and respondent
appellate court, a judgment, against a person,
of a tribunal of a foreign country having
jurisdiction to pronounce the same is
presumptive evidence of a right as between the
parties and their successors in interest by a
subsequent title. The judgment may, however,
be assailed by evidence of want of jurisdiction,
want of notice to the party, collusion, fraud, or
clear mistake of law or fact. In addition, under
Section 3(n), Rule 131 of the Revised Rules of
Court, a court, whether in the Philippines or
elsewhere, enjoys the presumption that it was
acting in the lawful exercise of its jurisdiction.
Hence, once the authenticity of the foreign
judgment is proved, the party attacking a
foreign judgment, is tasked with the burden of
overcoming its presumptive validity.
In the instant case, petitioner sufficiently
established the existence of the money
36
 judgment of the High Court of Malaya by the
evidence it offered. Having thus proven,
through the foregoing evidence, the existence
and authenticity of the foreign judgment, said
foreign judgment enjoys presumptive validity
and the burden then fell upon the party who
disputes its validity, herein private respondent,
to prove otherwise.

All in all, private respondent had the

ultimate duty to demonstrate the alleged
invalidity of such foreign judgment, being the
party challenging the judgment rendered by the
High Court of Malaya. But instead of doing so,
private respondent merely argued, to which the
trial court agreed, that the burden lay upon
petitioner to prove the validity of the money
judgment. Such is clearly erroneous and would
render meaningless the presumption of validity
accorded a foreign judgment were the party
seeking to enforce it be required to first
establish its validity.

12.

37
38