Digest: Conflict of Laws Cases

Philippine Export and Foreign Loan Guarantee Corporation vs. Eusebio Construction, Inc. et. al.,
July 13, 2004, G.R. No. 140047
Davide, Jr. C.J.:

Principles involved:

No conflicts rule on essential validity of contracts is expressly provided for in our laws.

Laws cited:

Art. 1169 of the Civil Code

Facts:

State Organization of Buildings, Ministry of Housing and Construction, Baghdad, Iraq, awarded the construction of the Institute of Physical Therapy–Medical Rehabilitation Center, Phase II, in Baghdad, Iraq  to Ajyal Trading and Contracting Company a firm duly licensed with the Kuwait Chamber of Commerce for ID5,416,089/046 (or about US$18,739,668). 3-Plex International, Inc. represented by Spouses Eduardo and Iluminada Santos a local contractor engaged in construction business, entered into a joint venture agreement with Ajyal.   However since it was not accredited under the Philippine Overseas Construction Board (POCB), it had to assign and transfer all its right to V.P. Eusebio Construction, Inc. VP Eusebio entered into an agreement that the execution of the project will be under their joint management. To comply with the requirements of performance bond of ID271,808/610 and an advance payment bond of ID541,608/901, 3-Plex and VP Eusebio applied for the issuance of a guarantee with Philguarantee, a government financial institution empowered to issue guarantees for qualified Filipino contractors to secure the performance of approved service contracts abroad. Letters of guarantee were issued by Philguarantee to the Rafidain Bank of Baghdad. Al Ahli Bank of Kuwait was, therefore, engaged to provide a counter-guarantee to Rafidain Bank, but it required a similar counter-guarantee in its favor from the Philguarantee. The Surety Bond was later amended to increase the amount of coverage from P6.4 million to P6.967 million.

 

Issues:

Whether or not the Philippine law should be applied.

 

Ruling:

The Supreme Court ruled that no conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule followed by most legal systems, however, is that the intrinsic validity of a contract must be governed by the lex contractus or “proper law of the contract.” This is the law voluntarily agreed upon by the parties (the lex loci voluntatis) or the law intended by them either expressly or implicitly (the lex loci intentionis). The law selected may be implied from such factors as substantial connection with the transaction, or the nationality or domicile of the parties. Philippine courts would do well to adopt the first and most basic rule in most legal systems, namely, to allow the parties to select the law applicable to their contract, subject to the limitation that it is not against the law, morals, or public policy of the forum and that the chosen law must bear a substantive relationship to the transaction.

 

Moreover, since that foreign law was not properly pleaded or proved, the presumption of identity or similarity, otherwise known as the processual presumption, comes into play. Where foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as ours.

 

Hence, the Philippine law shall apply.

 

Northwest Orient Airlines, Inc., v. Court of Appeals amd C.F Sharp & Company Inc.,
G.R. No. 112573, February 9, 1995
Padilla, Jr., J.:

 

Principles involved: Territoriality Principle, Doctrine of Processual Presumption, Extraterritorial Service of Summon

Laws cited:

Section 50, Rule 39 of the Rules of Court

Facts:

Northwest Airlines (Northwest) and C.F. Sharp & Company (C.F.), through its Japan branch, entered into an International Passenger Sales Agency Agreement, whereby the Northwest authorized the C.F. to sell its air transportation tickets. Unable to remit the proceeds of the ticket sales, Northwest sued C.F. in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with claim for damages. A writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan and the attempt to serve the summons was unsuccessful. Mr. Dinozo returned to C.F. Office to serve the summons but he refused to receive claiming that he no longer an employee. After the 2 attempts of service were unsuccessful, Supreme Court of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of Japan> Japanese Embassy in Manila>Ministry (now Department) of Foreign Affairs of the Philippines>Executive Judge of the Court of First Instance (now Regional Trial Court) of Manila who ordered Deputy Sheriff Rolando Balingit>C.F. Main Office. January 29, 1981: Tokyo Court rendered judgment ordering the C.F. to pay 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. C.F. received from Deputy Sheriff Balingit copy of the judgment. C.F. did not appeal so it became final and executory. May 20, 1983: Northwest filed a suit for enforcement of the judgment a RTC. C.F. averred that the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction having been rendered without due and proper notice and/or with collusion or fraud and/or upon a clear mistake of law and fact. The foreign judgment in the Japanese Court sought in this action is null and void for want of jurisdiction over the person of the defendant considering that this is an action in personam.  The process of the Court in Japan sent to the Philippines which is outside Japanese jurisdiction cannot confer jurisdiction over the defendant in the case before the Japanese Court of the case at bar

CA sustained RTC: Court agrees that if the C.F. in a foreign court is a resident in the court of that foreign court such court could acquire jurisdiction over the person of C.F. but it must be served in the territorial jurisdiction of the foreign court

Issues:

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

Ruling: 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.

Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity.⁷ Being the party challenging the judgment rendered by the Japanese court, SHARP had the duty to demonstrate the invalidity of such judgment. In an attempt to discharge that burden, it contends that the extraterritorial service of summons effected at its home office in the Philippines was not only ineffectual but also void, and the Japanese Court did not, therefore acquire jurisdiction over it.

It is settled that matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lex fori or the internal law of the forum.

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. Alternatively in the light of the absence of proof regarding Japanese law, the presumption of identity or similarity or the so-called processual presumption 10 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.

If the foreign corporation has designated an agent to receive summons, the designation is exclusive, and service of summons is without force and gives the court no jurisdiction unless made upon him. 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. Whenever service of process is so made, the government office or official served shall transmit by mail a copy of the summons or other legal process to the corporation at its home or principal office. The sending of such copy is a necessary part of the service

Saudi Arabian Airlines v. Court of Appeals et. al.,
G.R. No. 122191, October 8, 1998
Quisumbing, J.:

Principles involved:

Jurisdiction, Forum Non Conveniens, Damages

Laws cited:

Section 1 of Republic Act No. 7691; Section 2(b), Rule 4 of the Rules of Court; Article 19 of the Civil Code

Facts:

Milagro Morada was hired by Saudi Arabian Airlines (SAUDIA) as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. While on a lay-over in Jakarta, Morada went to a disco with fellow crew members Thamer & Allah, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. Thamer attempted to rape Morada but she was rescued by hotel personnel. Indonesian police came and arrested Thamer and Allah, the latter as an accomplice.

 

Morada refused to cooperate when airline’s Legal Officer and its base manager tried to negotiate the immediate release of the detained crew members with Jakarta police. Thamer and Allah were deported and, eventually, again put in service by SAUDIA. But Morada was transferred to Manila.

 

Less than two years, Morada was again ordered to see SAUDIA’s Chief Legal Officer. She was brought to a Saudi court where she was asked to sign a blank document, which turned out to be a notice to her to appear in court. Morada returned to Manila.   The next time she was escorted by SAUDIA’s legal officer to court, the judge rendered a decision against her sentencing her to five months imprisonment and to 286 lashes. Apparently, she was tried by the court which 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.

 

After denial by SAUDIA, Morada sought help from Philippine Embassy during the appeal. Prince of Makkah dismissed the case against her. SAUDIA fired her without notice. Morada filed a complaint for damages against SAUDIA, with the RTC of Quezon City. SAUDIA filed Omnibus Motion to Dismiss which raised the ground that the court has no jurisdiction.

 

Issues:

Whether or not the court of Philippine court, RTC Quezon City, has jurisdiction to hear and try the case

Ruling:

Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondent’s assertion that violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum. Based on the allegations in the Amended Complaint, read in the light of the Rules of Court on jurisdiction we find that the Regional Trial Court (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.

Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, ‘vex,’ ‘harass,’ or ‘oppress’ the defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed. 

Forcing a party to seek remedial action in a place where she no longer maintains substantial connections would cause a fundamental unfairness to her.

 

BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, and the rest of 1,767 NAMED-COMPLAINANTS, thru and by their Attorney-in-fact, Atty. GERARDO A. DEL MUNDO, vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION’S ADMIN-ISTRATOR, NATIONAL LABOR RELATIONS COMMISSION, BROWN & ROOT INTERNATIONAL, INC. AND/OR ASIA INTER-NATIONAL BUILDERS CORPORATION December 5, 1994 G.R. No. 104776, G.R. Nos. 104911-14, G.R. Nos. 105029-32 238 SCRA 721

 

Principles involved:

Barrowing Statute

Laws cited:

            Section 48 of the Civil Procedure

Facts:

Cadalin, Amul and Evangelista, in their own behalf and on behalf of 728 other OCWs instituted a class suit by filing an “Amended Complaint” with the POEA for money claims arising from their recruitment by ASIA INTERNATIONAL BUILDERS CORPORATION (AIBC) and employment by BROWN & ROOT INTERNATIONAL, INC (BRI) which is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; while AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino workers for overseas employment on behalf of its foreign principals.

 

The amended complaint sought the payment of the unexpired portion of the employment contracts, which was terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and Reserved Fund; interest on all the unpaid benefits; area wage and salary differential pay; fringe benefits; reimbursement of SSS and premium not remitted to the SSS; refund of withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the suspension of the license of AIBC and the accreditation of BRII

 

The POEA Administrator denied the “Motion to Strike Out of the Records” filed by AIBC but required the claimants to correct the deficiencies in the complaint pointed out. AIB and BRII kept on filing Motion for Extension of Time to file their answer. The POEA kept on granting such motions.

 

Claimants filed an opposition to the motions for extension of time and asked that AIBC and BRII declared in default for failure to file their answers.

 

POEA Administrator issued an order directing AIBC and BRII to file their answers within ten days from receipt of the order. AIBC finally submitted its answer to the complaint. POEA Administrator rendered his decision which awarded the amount of $824, 652.44 in favor of only 324 complainants. Claimants submitted their “Appeal Memorandum For Partial Appeal” from the decision of the POEA. AIBC also filed its MR and/or appeal in addition to the “Notice of Appeal” filed earlier.

 

Issues:

            Whether or not the foreign law should govern or the contract of the parties.

Ruling:

            As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive.

However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a “borrowing statute.” Said statute has the practical effect of treating the foreign statute of limitation as one of substance. A “borrowing statute” directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law. While there are several kinds of “borrowing statutes,” one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it. Section 48 of our Code of Civil Procedure is of this kind. Said Section provides: “If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippine Islands.”

CARNIVAL CRUISE LINES, INC. V. SHUTE
April 17, 1991 No. 89-1647 499 U.S. 585 (1990)
BLACKMUN, J.:

Principles involved: Forum Selection Clause

Laws cited:

Facts:

After the respondents Shute, a Washington State couple, purchased passage on a ship owned by petitioner, a Florida-based cruise line, petitioner sent them tickets containing a clause designating courts in Florida as the agreed-upon fora for the resolution of disputes. The Shutes boarded the ship in Los Angeles, and, while in international waters off the Mexican coast, Mrs. Shute suffered injuries when she slipped on a deck mat. The Shutes filed suit in a Washington Federal District Court, which granted summary judgment for petitioner. The Court of Appeals reversed, holding, inter alia, that the forum-selection clause should not be enforced under The Bremen v. Zapata Off-Shore Co., 407 U. S. 1, because it was not "freely bargained for," and because its enforcement would operate to deprive the Shutes of their day in court in light of evidence indicating that they were physically and financially incapable of pursuing the litigation in Florida.

 

Issues:

            Whether or not forcing individuals to submit to jurisdiction in a particular state shall be upheld.

Ruling:

            YES. The US Supreme Court ruled that in evaluating the reasonableness of the forum clause at issue in this case, we must refine the analysis of The Bremen to account for the realities of form passage contracts. As an initial matter, we do not adopt the Court of Appeals' determination that a non-negotiated forum selection clause in a form ticket contract is never enforceable simply because it is not the subject of bargaining. Including a reasonable forum clause in a form contract of this kind well may be permissible for several reasons: first, a cruise line has a special interest in limiting the fora in which it potentially could be subject to suit. Because a cruise ship typically carries passengers from many locales, it is not unlikely that a mishap on a cruise could subject the cruise line to litigation in several different fora. Additionally, a clause establishing ex ante the forum for dispute resolution has the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum, and conserving judicial resources that otherwise would be devoted to deciding those motions. See Stewart Organization, 487 U.S. at 487 U. S. 33 (concurring opinion). Finally, it stands to reason that passengers who purchase tickets containing a forum clause like that at issue in this case benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by limiting the fora in which it may be sued. 

It bears emphasis that forum selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness. In this case, there is no indication that petitioner set Florida as the forum in which disputes were to be resolved as a means of discouraging cruise passengers from pursuing legitimate claims. Any suggestion of such a bad faith motive is belied by two facts: petitioner has its principal place of business in Florida, and many of its cruises depart from and return to Florida ports. Similarly, there is no evidence that petitioner obtained respondents' accession to the forum clause by fraud or overreaching. Finally, respondents have conceded that they were given notice of the forum provision and, therefore, presumably retained the option of rejecting the contract with impunity. In the case before us, therefore, we conclude that the Court of Appeals erred in refusing to enforce the forum selection clause.

BURGER KING CORP. V. RUDZEWICZ
471 U.S. 462 (1985) No. 83-2097 May 20, 1985
BRENNAN, J.

Principles involved:

            Long Arm Statute; Due Process

Laws cited:

Facts:

            Rudzewicz and MacShara (Defendants), residents of Michigan, had a contract with Burger King (Plaintiff) as franchisees for 20 years. The contract said that the franchise relationship would be established in Miami (where Plaintiff’s principal offices are) and that the relationship would be governed by Florida law. Defendants fell behind in monthly payments and Plaintiff brought a diversity action in federal court in Florida. Defendants argued that the court lacked jurisdiction because Defendants were residents of Michigan and the claim did not “arise” in Florida. The Court said the claims did arise under the Florida long-arm statute and found for Plaintiff. The Court of Appeals reversed on the grounds that exercising jurisdiction would offend the “fundamental fairness of due process.”

Issues:

Whether the court of Florida may exercise personal jurisdiction on a franchisee, when the franchisee voluntarily accepts the regulation by the franchisor’s headquarters, the franchisee had notice that he may be subject to suit in the forum state

 

Ruling:

Yes. A forum may assert specific jurisdiction over a nonresident defendant where an alleged injury arises out of or relates to actions by the defendant himself that are purposeful directed toward forum residents, and where jurisdiction would not otherwise offend "fair play and substantial justice." Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum..   The contract term stating that the franchise relationship would be governed by Florida law constituted “purposeful availment” of the benefits and protections of Florida law by the defendants. When a contract calling for a certain forum is not made under duress or misrepresentation then jurisdiction over the defendants is proper unless the defendants would be inconvenienced to such an extent that having to litigate in the forum state would be unconstitutional.

Because Rudzewicz established a substantial and continuing relationship with Burger King’s Miami headquarters, received fair notice from the contract documents and the course of dealing that he might be subject to suit in Florida, and has failed to demonstrate how jurisdiction in that forum would otherwise be fundamentally unfair, we conclude that the District Court’s exercise of jurisdiction pursuant to Fla. Stat. 48.193(1)(g) (Supp. 1984) did not offend due process

SWEET LINES, INC. vs. HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR., and ROGELIO TIRO

May 19, 1978 G.R. No. L-37750

SANTOS, J.:

 

Principles involved:

Contract of Adhesion

Laws cited:

            Rule 4, Section 3, of the Rules of Court; Art. 24 of Civil Code

Facts:

Atty. Tandog and Atty. Tiro bought tickets at the branch office of Sweet Lines Inc, which is engaged in the transportation of goods and passengers, at Cagayan de Oro. Upon knowing that the vessel will not proceed to Bohol, but rather on Surigao, respondents sought proper relocation to another vessel. However, since the vessel was already filled to capacity, they were forced to agree to hide in the cargo section to avoid inspection. But respondents alleged that they were exposed to the scorching trip during the trip and were not later on honored and was constrained to pay for other tickets. Respondents filed a case for damages in the Court of First Instance of Misamis Oriental. Petitioner moved to dismiss the complaint on the ground of improper venue since Condition 14 of the ticket stated that any action arising out of the conditions and provisions of the ticket shall be filed in the courts of Cebu. The lower court denied the motion. Hence this petition.

 

Petitioner contend that the condition fixing the venue of actions in the City of Cebu is proper since venue may be validly waived. In contrast respondent contend that while venue of actions may be transferred from one province to another, such arrangement requires the “written agreement of the parties”, not to be imposed unilaterally.

 

Issues:

Whether or not the condition on venue is proper.

Ruling:

            No, the condition on venue is not proper. Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue may be changed or transferred from one province to another by agreement of the parties in writing pursuant to Rule 4, Section 3, of the Rules of Court, such an agreement will not be held valid where it practically negates the action of the claimants, such as the private respondents herein. The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote the ends of justice.

Public policy is “. . . that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or against the public good. . .”. Under this principle “. . . freedom of contract or private dealing is restricted by law for the good of the public.” Clearly, Condition No. 14, if enforced, will be subversive of the public good or interest, since it will frustrate in meritorious cases, actions of passenger claimants outside of Cebu City, thus placing petitioner company at a decided advantage over said persons, who may have perfectly legitimate claims against it.

HONGKONG AND SHANGHAI BANKING CORPORATION, vs. JACK ROBERT SHERMAN, DEODATO RELOJ AND THE INTERMEDIATE APPELLATE COURT
August 11, 1989 G.R. No. 72494 176 SCRA 331
MEDIALDEA, J.:

 

 

Principles involved:

Choice of Forum Clause

Laws cited:

            Section 2(b) of Rule 4 of the Rules of Court

Facts:

            Eastern Book Supply, a company incorporated in Singapore, was granted by HSBC’s Singapore branch an overdraft facility payable monthly with 3% interest. As a security, both private respondents and a certain Lowe, executed a Joint and Several guarantee in favor of HSBC where it stipulates that all liabilities arising from it may be enforced in accordance with the laws of Singapore and that the Courts of Singapore will have jurisdiction over it.

When Easter failed to pay its obligation, HSBC filed a complaint for collection of a sum of money against respondents in RTC of Quezon City. Private respondent filed a petition for prohibition with preliminary injunction in the IAC in which The IAC rendered a decision enjoining the RTC Quezon City from taking further cognizance of the case and to dismiss the same for filing with the proper court of Singapore which is the proper forum.

 

Issue:

Does Philippines have jurisdiction over the Case?

Ruling: YES.

While it is true that "the transaction took place in Singaporean setting" and that the Joint and Several Guarantee contains a choice-of-forum clause, the very essence of due process dictates that the stipulation be liberally construed. One basic principle underlies all rules of jurisdiction in International Law: a State does not have jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings are in rem quasi in rem or in personam.

In the ordinary habits of life, anyone would be disinclined to litigate before a foreign tribunal, with more reason as a defendant. The defense of Sherman & Reloj that the complaint should have been filed in Singapore is based merely on technicality. They did not even claim, much less prove, that the filing of the action here will cause them any unnecessary trouble, damage, or expense. On the other hand, there is no showing that petitioner BANK filed the action here just to harass Sherman & Reloj.

The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a State to exercise authority over persons and things w/in its boundaries subject to certain exceptions. A State is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them.

However, whether a suit should be entertained or dismissed on the basis of the principle of forum non conveniens depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. Thus, the IAC should not have relied on such principle (In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to exercise jurisdiction. And even if it is so authorized, it may still refuse to entertain the case by applying the principle of forum non conveniens.)

PAULA T. LLORENTE vs. COURT OF APPEALS and ALICIA F. LLORENTE
November 23, 2000 345 SCRA 592
PARDO, J.:

 

PRINCIPLE INVOLVED:   Foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them, Nationality Law

 

LAWS CITED:

Article 15 of the Civil Code

FACTS:

Lorenzo Llorente and petitioner Paula Llorente were married in 1937 in the Philippines. Lorenzo was an enlisted serviceman of the US Navy. Soon after, he left for the US where through naturalization, he became a US Citizen. Upon his visitation of his wife, he discovered that she was living with his brother and a child was born. The child was registered as legitimate but the name of the father was left blank. Llorente filed a divorce in California, which later on became final. He married Alicia and they lived together for 25 years bringing 3 children. He made his last will and testament stating that all his properties will be given to his second marriage. He filed a petition of probate that made or appointed Alicia his special administrator of his estate. Before the
proceeding could be terminated, Lorenzo died. Paula filed a letter of administration over Llorente’s estate. The trial granted the letter and denied the motion for reconsideration. An appeal was made to the Court of Appeals, which affirmed and modified the judgment of the Trial Court that she be declared co-owner of whatever properties, she and the deceased, may have acquired during their 25 years of cohabitation.

ISSUE:

Whether or not the National Law shall apply.

RULING:

Foreign law applies. The Civil Code provides that intestate and testamentary succession, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. In this case, Lorenzo was an American citizen long before and at the time of: (1) divorce from first wife; (2) marriage to Alicia; (3) execution of his will; and (4) death.

Owing to the nationality principle embodied in Art. 15 of the Civil Code, only Philippine nationals are covered by policy against absolute divorces, the same being considered contrary to our concept of public policy and morality. Aliens may obtain divorces abroad, provided they are valid according to their national law.

 

 

IMELDA ROMUALDEZ-MARCOS, petitioner, vs. COMMISSION ON ELECTIONS and CIRILO ROY MONTEJO, September 18, 1995 G.R. No. 119976 248 SCRA 300
KAPUNAN, J.:
 

PRINCIPLE INVOLVED:  

Domicile; Residence; HRET Jurisdiction

 

LAWS CITED:

Sec. 2, Art. VI 1987 Constitution; Art. 50 of Civil Code

FACTS:

            Petitioner Imelda Romualdez-Marcos filed her Certificate of Candidacy for the position of Representative of the First District of Leyte with the Provincial Election Supervisor on March 8, 1995, providing the following information in item No. 8:4

Private respondent Cirilo Roy Montejo, the incumbent Representative of the First District of Leyte and a candidate for the same position, filed a “Petition for Cancellation and Disqualification”5 with the Commission on Elections alleging that petitioner did not meet the constitutional requirement for residency. In his petition, private respondent contended that Mrs. Marcos lacked the Constitution’s one year residency requirement for candidates to the House of Representatives on the evidence of declarations made by her in Voter Registration Record 94-No. 33497726 and in her Certificate of Candidacy. He prayed that “an order be issued declaring (petitioner) disqualified and canceling the certificate of candidacy.”

On March 29, 1995, petitioner filed an Amended/Corrected Certificate of Candidacy, changing the entry “seven” months to “since childhood” in item No. 8 of the amended certificate.8 On the same day, the Provincial Election Supervisor of Leyte informed petitioner that the prayed that “an order be issued declaring (petitioner) disqualified and canceling the certificate of candidacy.”7

            On March 29, 1995, petitioner filed an Amended/Corrected Certificate of Candidacy, changing the entry “seven” months to “since childhood” in item No. 8 of the amended certificate.8 On the same day, the Provincial Election Supervisor of Leyte informed petitioner that the office cannot receive or accept the aforementioned Certificate of Candidacy on the ground that it is filed out of time, the deadline for the filing of the same having already lapsed. 

            Second Division of the Commission on Elections (COMELEC), by a vote of 2 to 1, came up with a Resolution 1) finding private respondent’s Petition for Disqualification in SPA 95-009 meritorious; 2) striking off petitioner’s Corrected/Amended Certificate of Candidacy of March 31, 1995; and 3) canceling her original Certificate of Candidacy. Dealing with two primary issues, namely, the validity of amending the original Certificate of Candidacy after the lapse of the deadline for filing certificates of candidacy, and petitioner’s compliance with the one year residency requirement. 

            COMELEC en banc denied petitioner’s Motion for Reconsideration16 of the April 24, 1995 Resolution declaring her not qualified to run for the position of Member of the House of Representatives for the First Legislative District of Leyte.

 ISSUE:

            Whether or not Imelda Marcos was a resident of the First District of Leyte to satisfy the one-year residency requirement to be eligible in running as representative.

RULING:

Yes. The court is in favor of a conclusion supporting petitioner’s claim of legal residence or domicile in the First District of Leyte.

            Residence, in its ordinary conception, implies the factual relationship of an individual to a certain place. It is the physical presence of a person in a given area, community or country. The essential distinction between residence and domicile in law is that residence involves the intent to leave when the purpose for which the resident has taken up his abode ends. One may seek a place for purposes such as pleasure, business, or health. If a person’s intent be to remain, it becomes his domicile; if his intent is to leave as soon as his purpose is established it is residence. It is thus, quite perfectly normal for an individual to have different residences in various places. However, a person can only have a single domicile, unless, for various reasons, he successfully abandons his domicile in favor of another domicile of choice. 

 For political purposes the concepts of residence and domicile are dictated by the peculiar criteria of political laws. As these concepts have evolved in our election law, what has clearly and unequivocally emerged is the fact that residence for election purposes is used synonymously with domicile. 

            An individual does not lose his domicile even if he has lived and maintained residences in different places. Residence, it bears repeating, implies a factual relationship to a given place for various purposes. The absence from legal residence or domicile to pursue a profession, to study or to do other things of a temporary or semi-permanent nature does not constitute loss of residence. Thus, the assertion by the COMELEC that “she could not have been a resident of Tacloban City since childhood up to the time she filed her certificate of candidacy because she became a resident of many places” flies in the face of settled jurisprudence in which this Court carefully made distinctions between (actual) residence and domicile for election law purposes.

            Having determined that Marcos possessed the necessary residence qualifications to run for a seat in the House of Representatives in the First District of Leyte, the COMELEC’s questioned resolutions dated April 24, May 7, May11, and May 25 are set aside. Provincial Board of Canvassers is directed to proclaim Marcos as the duly elected Representative of the First District of Leyte.

 

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  June 19, 1997 G.R. No. 103493 274 SCRA 102

MENDOZA, J.:

 

PRINCIPLE INVOLVED:  Re judicata, Forum non conveniens, 

LAWS CITED: Sec. 50, Rule 39 of the Rules of Court

FACTS:

Ventura O. Ducat obtained separate loans from petitioners Ayala and 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, dated January 27, 1983, whereby 1488, Inc. executed a Warranty Deed with Vendor’s Lien by which it sold to petitioner

Athona Holdings, N.V. (ATHONA) a parcel of land in Harris County, Texas, U.S.A., for US$2,807,209.02, while PHILSEC and AYALA extended a loan to ATHONA in the amount of US$2,500,000.00 as initial payment of the purchase price. The balance of US$307,209.02 was to be paid by means of a promissory note executed by ATHONA in favor of 1488, Inc. Subsequently, upon their receipt of the US$2,500,000.00 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.

As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount covered by the note 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. Originally instituted in the United States District Court of Texas, 165th Judicial District, the venue of the action was later transferred to the United States District Court for the Southern District of Texas, where 1488, Inc. filed an amended complaint, reiterating its allegations in the original complaint.

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 of 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. 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. Petitioners prayed that private respondents be ordered to return to ATHONA the excess payment of US$1,700,000.00 and to pay damages. 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 the case on the grounds of (1) litis pendentia, vis-a-vis Civil Action 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 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,” even as it noted that Ducat was not a party in the U.S. case.

A separate hearing was held with regard to 1488, Inc. and Daic’s motion to dismiss. The trial court 3 granted the motion to dismiss filed by 1488, Inc. and Daic on the ground plaintiff ATHONA is the subject matter of the pending case in the United States District Court which, under the doctrine of forum non conveniens, is the better (if not exclusive) forum to litigate matters needed to determine the assessment and/or fluctuations of the fair market value of real estate situated in Houston, Texas, U.S.A.

The Court of Appeals also held that Civil Case No. 16563 was an action in personam for the recovery of a sum of money for alleged tortious acts, so that service of summons by publication did not vest the trial court with jurisdiction over 1488, Inc. and Drago Daic. The dismissal of Civil Case No. 16563 on the ground of forum non conveniens was likewise affirmed by the Court of Appeals on the ground that the case can be better tried and decided by the U.S. court.

The U.S. case and the case at bar arose from only one main transaction, and involve foreign elements, to wit: 2) the seller, 1488 Inc. is a non-resident foreign corporation; 3) although the buyer, Athona Holdings, a foreign corporation which does not claim to be doing business in the Philippines,

 is wholly owned by Philsec, a domestic corporation, Athona Holdings is also owned by BPI-IFL, also a foreign corporation; 4) the Warranty Deed was executed in Texas, U.S.A.

ISSUE: 

 Whether or not the judgment of the U.S. court constitutes re judicata.

HELD: 

NO. While the 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. It is not necessary for this purpose to initiate a separate action or proceeding for enforcement of the foreign judgment. What is essential is that there is opportunity to challenge the foreign judgment, in order for the court to properly determine its efficacy. 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. 

            It was error therefore for the Court of Appeals to summarily rule that petitioners’ action is barred by the principle of res judicata. Petitioners in fact questioned the jurisdiction of the U.S. court over their persons, but their claim was brushed aside by both the trial court and the Court of Appeals

KEETON V. HUSTLER MAGAZINE, INC. 
March 20, 1984 No. 82-485 465 U.S. 770 (1984)
REHNQUIST, J.:

PRINCIPLE INVOLVED:  Jurisdiction over the person; Single publication rule; minimum contact

LAWS CITED: Due Process Clause

FACTS:

Petitioner, a resident of New York, brought a libel suit against respondent magazine publisher (hereafter respondent), an Ohio corporation, in Federal District Court in New Hampshire, alleging jurisdiction by reason of diversity of citizenship. Petitioner's only connection with New Hampshire is the circulation there of a magazine that she assists in producing. Respondent's contacts with New Hampshire consist of monthly sales of some 10,000 to 15,000 copies of its nationally published magazine. The District Court dismissed the suit on the ground that the Due Process Clause of the Fourteenth Amendment forbade application of New Hampshire's long-arm statute in order to acquire personal jurisdiction over respondent. The Court of Appeals affirmed, holding that petitioner's lack of contact with New Hampshire rendered that State's interest in redressing the tort of libel to petitioner too attenuated for an assertion of personal jurisdiction over respondent, and that, in view of the "single publication rule," which would require an award of damages caused in all States, as well as New Hampshire's unusually long (6-year) limitation period for libel actions, it would be "unfair" to assert jurisdiction over respondent.

ISSUE:

            Whether the respondent's regular circulation of magazines in the forum State is sufficient to support an assertion of jurisdiction in a libel action based on the contents of the magazine.

RULING:

            New Hampshire jurisdiction over a complaint based on this circulation of magazines satisfies the Due Process Clause's requirement that a State's assertion of personal jurisdiction over a nonresident defendant be predicated on "minimum contacts" between the defendant and the State.

            In judging minimum contacts, a court properly focuses on "the relationship among the defendant, the forum, and the litigation." Shaffer v. Heitner, 433 U. S. 186, 433 U. S. 204. Thus, it is relevant to the jurisdictional inquiry here that petitioner is seeking to recover damages suffered in all States in one suit. The contacts between respondent and the forum must be judged in light of that claim, rather than a claim only for damages sustained in New Hampshire.

            The combination of New Hampshire's interest in redressing injuries that occur within the State and its interest in cooperating with other States in applying the "single publication rule" demonstrates the propriety of requiring respondent to answer a multistate libel action in New Hampshire.

            Any potential unfairness in applying New Hampshire's statute of limitations to all aspects of this nationwide suit has nothing to do with jurisdiction to adjudicate the claim. And the chance duration of statutes of limitations of non-forum States has nothing to do with the contacts among respondent, New Hampshire, and the suit.

            The fact that petitioner has very limited contacts with New Hampshire does not defeat jurisdiction, since a plaintiff is not required to have "minimum contacts" with the forum State before that State is permitted to assert personal jurisdiction over a nonresident defendant. A plaintiff's residence in the forum State is not a separate jurisdictional requirement, and lack of residence will not defeat jurisdiction established on the basis of the defendant's contacts. The victim of a libel, like the victim of any other tort, may choose to bring suit in any forum with which the defendant has "certain minimum contacts . . . such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'"

            Here, where respondent has continuously and deliberately exploited the New Hampshire market, it must reasonably anticipate being haled into court there in a libel action based on the contents of its magazine. And, since respondent can be charged with knowledge of the "single publication rule," it must anticipate that such a suit will seek nationwide damages. There is no unfairness in calling respondent to answer for the contents of its national publication wherever a substantial number of copies are regularly sold and distributed.

 

WORLD-WIDE VOLKWAGEN CORP. V. WOODSON
NO. 78-1078 444 U.S. 286 (1980) JANUARY 21, 1980
WHITE, J

 

PRINCIPLE INVOLVED: 

The test for applying long-arm jurisdiction in Oklahoma is to determine whether the exercise of jurisdiction is authorized by statute and, if so, whether such exercise of jurisdiction is consistent with the constitutional requirements of due process.

 RELEVANT LAWS CITED:

 444 U.S. 286, 100 S. Ct. 559, 62 L. Ed. 2d 490, 1980 U.S. 65

 FACTS:

 A car driven by respondent Kay Eloise Robinson was struck in the rear by another automobile. Mrs. Robinson and her two minor children were seriously injured in the collision when the gasoline tank of their car ruptured, causing a fire in the passenger compartment of their car. As a result of the collision, manufacturer’s products liability actions were brought in Oklahoma state court on behalf of Mrs. Robinson, her husband, respondent Harry Robinson, and minor children. The complaint named as defendants: (1) the manufacturer of the automobile, Volkswagenwerk Aktiengesellschaft; (2) Volkswagen of America, Inc., the U.S. importer of the automobile; (3) World-Wide Volkswagen Corporation ("World-Wide"), the distributor of the automobile; and (4) Seaway Volkswagen, Inc. ("Seaway"), the retail dealer who sold the car to the Robinsons. World-Wide and Seaway filed a petition in the Supreme Court of Oklahoma asking the court to assume original jurisdiction and issue a writ of prohibition, prohibiting the trial court judge, respondent Charles S. Woodson, from exercising personal jurisdiction over them.

 ISSUE:

 Whether trial judge has the power to exercise personal jurisdiction over World-Wide and Seaway?

 RULING:

The Supreme Court assumed original jurisdiction, found that the trial judge had the power to exercise personal jurisdiction over World-Wide and Seaway and refused to issue a writ of prohibition. The court noted that while it was true that the alleged acts or omissions of World-Wide and Seaway allegedly caused tortious injury in Oklahoma, none of their alleged acts or omissions took place in the state. However, the product sold and distributed by World-Wide and Seaway was, by its design and purpose, so mobile that they could have foreseen its possible use in Oklahoma. Further, the evidence presented in the trial court demonstrated that goods sold and distributed by World-Wide and Seaway were used in Oklahoma and that World-Wide and Seaway derived substantial income from automobiles that from time to time were used in the Oklahoma. As such, the trial judge had the power to exercise personal jurisdiction over World-Wide and Seaway.

 

RUSH v. SAVCHUK(1980)
January 21, 1980 No. 78-952
MARSHALL, J.

 PRINCIPLE INVOLVED: 

Jurisdiction, in personma, quasi in rem, minimum contact rule

 RELEVANT LAWS CITED: 444 U.S. 320, 321; International Shoe Co. v. Washington, 326 U.S. 310

Facts: On January 13, 1972, Jeffrey Savchuk the plaintiff  was riding in a car operated by Randal Rush the defendant insured which was involved in a single-car crash, as a result Savchuk suffered injuries. Savchuk a Minnesota resident, brought an action for negligence in a Minnesota state court against defendant, an Indiana resident. Since defendant had no contacts with Minnesota that would support in personam jurisdiction, plaintiff sought to obtain quasi in rem jurisdiction by garnishing the contractual obligation of defendant’s insurer State Farm which is  licensed to do business in Minnesota.

Issue:

Whether a state have jurisdiction over a defendant with no connections in the state by attaching the contractual obligation of an insurer licensed in the state?

Held:  

No. A State may exercise jurisdiction over an absent defendant only if the defendant has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Here, the only affiliating circumstance offered to show a relationship among Rush, Minnesota, and this lawsuit is that Rush's insurance company does business in the State. However, the fictional presence in Minnesota of State Farm's policy obligation to defend and indemnify Rush - derived from combining the legal fiction that assigns a situs to a debt, for garnishment purposes, wherever the debtor is found with the legal fiction that a corporation is "present," for jurisdictional purposes, wherever it does business - cannot be deemed to give the State the power to determine Rush's liability for the out-of-state accident. The mere presence of property in a State does not establish a sufficient relationship between the owner of the property and the State to support the exercise of jurisdiction over an unrelated cause of action, and it cannot be said that the defendant engaged in any purposeful activity related to the forum that would make the exercise of jurisdiction fair, just, or reasonable merely because his insurer does business there. Nor does the policy provide significant contacts between the litigation and the forum, for the policy obligations pertain only to the conduct, not the substance, of the litigation.

COMPUSERVE INC. vs. RICHARD PATTERSON July 22, 1996 No. 95-3452

PRINCIPLE INVOLVED:  Jurisdiction over the person

RELEVANT LAWS CITED: Due Process Clause of the Fourteenth Amendment.

CompuServe, Inc., established in Ohio, provides an opportunity for subscribers to post and sell software in the form of "shareware." CompuServe accepted payment for the shareware from purchasers and remitted that payment, less a commission, to the authors of the software. Richard S. Patterson, a resident of Texas, subscribed to CompuServe for marketing his navigation software. Before use of the shareware service, Patterson entered into a "Shareware Registration Agreement" ("SRA") that provided that Ohio law governed the parties' relationship. Subsequent to the posting of Patterson's navigation software, CompuServe itself began to market its own navigation software. Patterson believed that CompuServe's software was confusingly similar to his own trademarked software and notified CompuServe.

 

CompuServe filed a declaratory judgment action in the District Court for the Southern District of Ohio, seeking a declaration that it had not infringed Patterson's trademarks. Patterson filed a motion to dismiss for lack of personal jurisdiction. The district court granted Patterson's motion.

 

CompuServe filed an appeal arguing that Patterson's repeated availment of the shareware sales procedures constituted minimum contacts with the forum state. CompuServe further argued that the existence of the Shareware Registration Agreement clearly stipulating that Ohio law governed disputes regarding the agreement meant that the exercise of personal jurisdiction comported with traditional notions of fair play and substantial justice.

 

ISSUE:

Whether or not an Internet service provider's home state can exercise jurisdiction over an out-of-state author of software who had subscribed and received commissions by using the Internet service provider.

 

HELD:

Yes. A forum state can exercise jurisdiction over an author of software who sells his software via a Internet service provider based in the forum state because 1) the author purposefully avails himself of the forum's laws by acting in the forum, 2) the cause of action arises from that availment, and 3) the burden on the defendant author is less than that on the forum state's interests in determining its laws concerning trademarks and trade names.

 

AUGUSTO BENEDICTO SANTOS III, represented by his father and legal guardian, Augusto Benedicto Santos, petitioner, vs. NORTHWEST ORIENT AIRLINES and COURT OF APPEALS June 23, 1992 G.R. No. 101538 210 SCRA 256,

CRUZ, J.

PRINCIPLE INVOLVED:  It is the passenger’s “ultimate destination,” not “an agreed stopping place” that determines the country where suit against international carrier is to be filed. 

LAWS CITED: Warsaw Convention

FACTS:

The petitioner is a minor and a resident of the Philippines. Private respondent Northwest Orient Airlines (NOA) is a foreign corporation with principal office in Minnesota, U.S.A. and licensed to do business and maintain a branch office in the Philippines.
On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled departure date from Tokyo was December 20, 1986. No date was specified for his return to San Francisco.

On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco airport for his scheduled departure to Manila. Despite a previous confirmation and re-confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. He therefore had to be wait-listed.

On March 12, 1987, the petitioner sued NOA for damages in the RTC of Makati. On April 13, 1987, NOA moved to dismiss the complaint on the ground of lack of jurisdiction, citing Article 28(1) of the Warsaw Convention, reading as follows:

Art. 28. (1) An action for damage must be brought at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or of his principal place of business, or where he has a place of business through which the contract has been made, or before the court at the place of destination.

The private respondent contended that the Philippines was not its domicile nor was this its principal place of business. Neither was the petitioner’s ticket issued in this country nor was his destination Manila but San Francisco in the United States.
Lower court granted the dismissal, CA affirmed.

ISSUE:

WON the Philippines has jurisdiction over the case. (Issue raised by the party is WON the provision of the Warsaw convention was constitutional)

 

HELD: No jurisdiction (the provision is constitutional)

The Convention is a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force and effect of law in this country. The petitioner’s allegations are not convincing enough to overcome this presumption. Apparently, the Convention considered the four places designated in Article 28 the most convenient forums for the litigation of any claim that may arise between the airline and its passenger, as distinguished from all other places.

WON Warsaw convention applies.
Convention applies to all international transportation of persons performed by aircraft for hire. Whether the transportation is “international” is determined by the contract of the parties, which in the case of passengers is the ticket. When the contract of carriage provides for the transportation of the passenger between certain designated terminals “within the territories of two High Contracting Parties,” the provisions of the Convention automatically apply and exclusively govern the rights and liabilities of the airline and its passenger.

WON MNL or SFO was the destination.
The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner’s ticket shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the contract of carriage between the parties indicates that NOA was bound to transport the petitioner to San Francisco from Manila. Manila should therefore be considered merely an agreed stopping place and not the destination.

WON Northwest has domicile in the Philippines
Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be filed under Article 28(1). By specifying the three other places, to wit, the principal place of business of the carrier, its place of business where the contract was made, and the place of destination, the article clearly meant that these three other places were not comprehended in the term “domicile.”

COMMUNICATION MATERIALS AND DESIGN, INC., ASPAC MULTI-TRADE, INC., (formerly ASPAC-ITEC PHILIPPINES, INC.) and FRANCISCO S. AGUIRRE vs. THE COURT OF APPEALS, ITEC INTERNATIONAL, INC., and ITEC, INC. August 22, 1996 G.R. No. 102223 260 SCRA 673

TORRES, JR., J.

 PRINCIPLE INVOLVED:  Forum non conveniens

 LAWS CITED: 1987 Constitution 

 FACTS:

 Petitioners and ASPAC are both domestic corporations.. Private Respondents ITEC, INC. and/or ITEC are corporations duly organized and existing under the laws of the State of Alabama, USA. There is no dispute that ITEC is a foreign corporation not licensed to do business in the Philippines. ITEC entered into a contract with ASPAC referred to as “Representative Agreement”. Pursuant to the contract, ITEC engaged ASPAC as its “exclusive representative” in the Philippines for the sale of ITEC’s products, in consideration of which, ASPAC was paid a stipulated commission. Through a “License Agreement” entered into by the same parties later on, ASPAC was able to incorporate and use the name “ITEC” in its own name. Thus, ASPAC Multi-Trade, Inc. became legally and publicly known as ASPAC-ITEC (Philippines).

One year into the second term of the parties’ Representative Agreement, ITEC decided to terminate the same, because petitioner ASPAC allegedly violated its contractual commitment as stipulated in their agreements. ITEC charges the petitioners and another Philippine Corporation, DIGITAL BASE COMMUNICATIONS, INC. (DIGITAL), the President of which is likewise petitioner Aguirre, of using knowledge and information of ITEC’s products specifications to develop their own line of equipment and product support, which are similar, if not identical to ITEC’s own, and offering them to ITEC’s former customer.

 The complaint was filed with the RTC-Makati by ITEC, INC. Defendants filed a MTD the complaint on the following grounds: (1) That plaintiff has no legal capacity to sue as it is a foreign corporation doing business in the Philippines without the required BOI authority and SEC license, and (2) that plaintiff is simply engaged in forum shopping which justifies the application against it of the principle of “forum non conveniens”. The MTD was denied.

 ISSUE: 

 Whether Philippine court give due course to the suit or dismiss it, on the principle of forum non convenience

 RULING:

Having acquired jurisdiction, it is now for the Philippine Court, based on the facts of the case, whether to give due course to the suit or dismiss it, on the principle of forum non conveniens. Hence, the Philippine Court may refuse to assume jurisdiction in spite of its having acquired jurisdiction. Conversely, the court may assume jurisdiction over the case if it chooses to do so; provided, that the following requisites are met: 1) That the Philippine Court is one to which the parties may conveniently resort to; 2) That the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and, 3) That the Philippine Court has or is likely to have power to enforce its decision.

 

FIRST PHILIPPINE INTERNATIONAL BANK and MERCURIO RIVERA vs. COURT OF APPEALS, CARLOS EJERCITO, in substitution of DEMETRIO DEMETRIA, and JOSE JANOLO  January 24, 1996 G.R. No. 115849 252 SCRA 259

PANGANIBAN, J.

 

PRINCIPLE INVOLVED: Litis pendentia; forum-shopping; Forum non conveniens

LAWS CITED: 

 FACTS:

 An agreement entered between the petitioner and Demetria wherein the latter to purchase the parcels of land. The said agreement was made by Demetria with the bank’s manager, Rivera. Later, however, the bank through its conservator, Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized to enter into such agreement. Hence, there was no valid contract of sale realized. Subsequently, Demtria sued the bank. The RTC ruled in favor of Demetria. The bank filean appeal with the CA.

 Meanwhile, Henry Co., who is a stockholder in the said bank, filed a motion for intervention with the trial court which was denied since the trial has concluded already and the case is now pending appeal. Subsequently, Henry Co., filed a separate civil case against Ejercito, the successor-in-interest of Demetria seeking to have the contract of sale be declared unenforceable against the bank. Ejercito argued that the second case constitutes forum shopping since it was barred by litis pendentia by virtue of the case then pending in the CA.

 ISSUE:

Whether or not forum shopping may a ground for the court to deny to take cognizance to a

case.

 

 RULING:

YES. Forum-shopping originated as a concept in private international law, where non-resident litigants are given the option to choose the forum or place wherein to bring their suit for various reasons or excuses, including to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. To combat these less than honorable excuses, the principle of forum non conveniens was developed whereby a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from seeking remedies elsewhere.  This “occurs when a party attempts to have his action tried in a particular court or jurisdiction where he feels he will receive the most favorable judgment or verdict.” Hence, according to Words and Phrases, “a litigant is open to the charge of ‘forum shopping’ whenever he chooses a forum with slight connection to factual circumstances surrounding his suit, and litigants should be encouraged to attempt to settle their differences without imposing undue expense and vexatious situations on the courts.” 

 In the Philippines, forum shopping has acquired a connotation encompassing not only a choice of venues, as it was originally understood in conflict of laws, but also to a choice of remedies. The test for determining whether a party violated the rule against forum shopping has been laid down in the 1986 case of Buan vs. Lopez, also by Chief Justice Narvasa, and that is, forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other.

THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD. , vs. NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO C. SANTOS October 13, 2000 G.R. No. 120077 343 SCRA 1
PARDO, J.
 

PRINCIPLE INVOLVED:  Forum non conveniens

FACTS: During his employment with the Mazoon Printing Press in the Sultanate of Oman, respondent Santos received a letter from Mr. Gerhard R. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr. Schmidt informed respondent Santos that he was recommended by one Nestor Buenio, a friend of his. On November 5, 1988, respondent Santos left for Beijing, China. He started to work at the Palace Hotel. Subsequently, respondent Santos signed an amended "employment agreement" with the Palace Hotel, effective November 5, 1988. In the contract, Mr. Shmidt represented the Palace Hotel. The Vice President (Operations and Development) of petitioner MHICL Miguel D. Cergueda signed the employment agreement under the word "noted". On August 10, 1989, the Palace Hotel informed respondent Santos by letter signed by Mr. Shmidt that his employment at the Palace Hotel print shop would be terminated due to business reverses brought about by the political upheaval in China. On September 5, 1989, the Palace Hotel terminated the employment of respondent Santos and paid all benefits due him, including his plane fare back to the Philippines. On October 24, 1989, respondent Santos, through his lawyer, Atty. Ednave wrote Mr. Shmidt, demanding full compensation pursuant to the employment agreement. On February 20, 1990, respondent Santos filed a complaint for illegal dismissal with the Arbitration Branch, National Capital Region, National Labor Relations Commission (NLRC). The Palace Hotel and Mr. Shmidt were not served with summons and neither participated in the proceedings before the Labor Arbiter. On June 27, 1991, Labor Arbiter decided the case against petitioners. On July 23, 1991, petitioners appealed to the NLRC, arguing that the POEA, not the NLRC had jurisdiction over the case.

ISSUE:

Whether or not the NLRC was the proper forum for the instant case.

Whether the possibility of an unfavorable change of the law in plaintiff’s home forum bar dismissal under forum non convenient (Transfer to a More Convenient Forum)?

 

Ruling

The NLRC was a seriously inconvenient forum. Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses to do so provided: (1) that the Philippine court is one to which the parties may conveniently resort to; (2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine court has or is likely to have power to enforce its decision.37 The conditions are unavailing in the case at bar.

No, the possibility of an unfavorable change in the law should not, by itself, bar dismissal.

The possibility of an unfavorable change in the law in Scotland should not, by itself, bar dismissal. The court held that plaintiffs may not defeat a motion to dismiss on the ground of forum non conveniens merely by showing that the substantive law that would be applied in the alternative forum is less favorable to the plaintiffs than that of the chosen forum, since the possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry. In this case the proper forum was Scotland given that fewer evidentiary problems would be posed if the trial were held in Scotland; the inability to implead potential third party defendants clearly supported holding the trial in Scotland; and public interest favored trial in Scotland, the accident having occurred in its air space, all the decedents being Scottish, and apart from the manufacturers, all potential plaintiffs and defendants being either Scottish or English.

ISLAMIC REPUBLIC OF IRAN, APPELLANT, vs. MOHAMMED REZA PAHLAVI, RESPONDENT, AND FARAH DIBA PAHLAVI 62 N.Y.2d 474 (1984) July 5, 1984.
SIMONS, J.

PRINCIPLE INVOLVED:  Forum non conveniens

LAWS CITED: NY Prac, § 28; 1 Weinstein-Korn-Miller, NY Civ Prac, par 327.01, pp 3-469 — 3-470

FACTS:

Plaintiff, the Islamic Republic of Iran, brings this action against Iran's former ruler, Shah Mohammed Reza Pahlavi, and his wife, Empress Farah Diba Pahlavi. It alleges in its complaint that defendants accepted bribes and misappropriated, embezzled or converted 35 billion dollars in Iranian funds in breach of their fiduciary duty to the Iranian people and it seeks to recover those funds and 20 billion dollars in exemplary damages. It asks the court to impress a constructive trust on defendants' assets located throughout the world, for an accounting of all moneys and property received by the defendants from the government of Iran, and for other incidental relief.

 

The action was commenced in November, 1979 by substituted service on the Shah made at New York Hospital where he was undergoing cancer therapy. The Empress was personally served at the same time at the New York residence of the Shah's sister, Ashraf Pahlavi. Thereafter, defendants moved to dismiss the complaint alleging that it raised nonjusticiable political questions, that the court lacked personal jurisdiction due to defective service of process on them and that the complaint should be dismissed on grounds of forum non conveniens. Special Term granted defendants' motion based on forum non conveniens concluding that the parties had no connection with New York other than a claim that the Shah had deposited funds in New York banks, a claim which it found insufficient under the circumstances to justify the court in retaining jurisdiction.

ISSUE:

Whether or not a non –resident who is permitted to enter a particular state to litigate as a matter if comity.

RULING:

 The Court said that “our courts are not required to add to their financial and administrative burdens by entertaining litigation which does not have any connection with this State. The common-law doctrine of forum non conveniens, also articulated in CPLR 327, permits a court to stay or dismiss such actions where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere. The burden rests upon the defendant challenging the forum to demonstrate relevant private or public interest factors which militate against accepting the litigation and the court, after considering and balancing the various competing factors, must determine in the exercise of its sound discretion whether to retain jurisdiction or not. Among the factors to be considered are the burden on the New York courts, the potential hardship to the defendant, and the unavailability of an alternative forum in which plaintiff may bring suit The court may also consider that both parties to the action are nonresidents and that the transaction out of which the cause of action arose occurred primarily in a foreign jurisdiction. No one factor is controlling. The great advantage of the rule of forum non conveniens is its flexibility based upon the facts and circumstances of each case. The rule rests upon justice, fairness and convenience and we have held that when the court takes these various factors into account in making its decision, there has been no abuse of discretion reviewable by this court.

PIPER AIRCRAFT CO. V. REYNO  454 U.S. 235, 102 S. CT. 252 (1981) December 8, 1981
MARSHALL, J

 

PRINCIPLE INVOLVED:  Dismissal on grounds of forum non conveniens may be granted even though the law applicable in the alternative forum is less favorable to the plaintiff's chance of recovery. The possibility of an unfavorable change of law should not, by itself, bar dismissal.

LAWS CITED: U.S.C. § 1404

FACTS:

Respondent, as representative of the estates of several citizens and residents of Scotland who were killed in an airplane crash in Scotland during a charter flight, instituted wrongful death litigation in a California state court against petitioners, which are the company that manufactured the plane in Pennsylvania and the company that manufactured the plane's propellers in Ohio. 

At the time of the crash, the plane was registered in Great Britain and was owned and operated by companies organized in the United Kingdom. The pilot and all of the decedents' heirs and next of kin were Scottish subjects and citizens, and the investigation of the accident was conducted by British authorities. 

Respondent sought to recover from petitioners on the basis of negligence or strict liability (not recognized by Scottish law), and admitted that the action was filed in the United States because its laws regarding liability, capacity to sue, and damages are more favorable to respondent's position than those of Scotland.  

On petitioners' motion, the action was removed to a Federal District Court in California and was then transferred to the United States District Court for the Middle District of Pennsylvania, pursuant to 28 U.S.C. § 1404(a). The District Court granted petitioners' motion to dismiss the action on the ground of forum non conveniens. Relying on the test set forth in Gulf Oil Corp. v. Gilbert, 330 U. S. 501, and analyzing the "private interest factors" affecting the litigants' convenience and the "public interest factors" affecting the forum's convenience, as set forth in Gilbert, the District Court concluded that Scotland was the appropriate forum. However, the Court of Appeals reversed, holding that the District Court had abused its discretion in conducting the Gilbert analysis and that, in any event, dismissal is automatically barred where the law of the alternative forum is less favorable to the plaintiff than the law of the forum chosen by the plaintiff.

ISSUE:

Whether or not the possibility of an unfavorable change of the law in plaintiff’s home forum bar dismissal under forum non convenient

RULING:

The possibility of an unfavorable change in the law in Scotland should not, by itself, bar dismissal. The court held that plaintiffs may not defeat a motion to dismiss on the ground of forum non conveniens merely by showing that the substantive law that would be applied in the alternative forum is less favorable to the plaintiffs than that of the chosen forum, since the possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry. 

 In this case the proper forum was Scotland given that fewer evidentiary problems would be posed if the trial were held in Scotland; the inability to implead potential third party defendants clearly supported holding the trial in Scotland; and public interest favored trial in Scotland, the accident having occurred in its air space, all the decedents being Scottish, and apart from the manufacturers, all potential plaintiffs and defendants being either Scottish or English.

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