CONFLICT OF LAWS 2012-2013
Contents A. PRELIMINARY CONSIDERATIONS CONSIDERATIONS ................................. ................................................. ................................. ................................. ................................. .................................. ......................... ........ 5 THE HOME INSURANCE COMPANY COMPANY v. EASTERN SHIPPING LINES ................................ ................................................. .................................. ................... .. 5 FIRST PHILIPPINE INTERNATIONAL BANK v. CA ............................... ................................................ .................................. .................................. ................................. ................ 6 MCGEE v. INTERNATIONAL INSURANCE CO. .................................. .................................................. ................................. ................................. ................................. ...................... ..... 7 VALMONTE v. ALCALA ............................... ................................................ .................................. ................................. ................................. .................................. .................................. .............................. ............. 8 B. JURISDICTION ............................... ................................................ .................................. ................................. ................................. .................................. .................................. ................................. ......................... ......... 10 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. ARABIAN AMERICAN OIL COMPANY ................. ................. 10 SMALL v. UNITED STATES .................................. .................................................. ................................. ................................. .................................. .................................. ................................. .................... ... 12 CORAZON C. SIM v. NATIONAL LABOR RELATIONS COMMISSION and EQUITABLE PCI-BANK ................. ................ 13 MICROSOFT CORP. v. AT&T CORP. ............................... ............................................... ................................. .................................. .................................. ................................. ......................... ......... 15 BMW OF NORTH AMERICA, INC. v. GORE ............................... ................................................ .................................. .................................. .................................. ............................ ........... 17 DOUGLAS SPECTOR, et al., PETITIONERS v. NORWEGIAN CRUISE LINE LTD .................................. ................................................ .............. 18 PENNOYER v. NEFF .................................. .................................................. ................................. ................................. ................................. .................................. .................................. ............................... .............. 19 NORTHWEST ORIENT AIRLINES INC. v. COURT OF APPEALS ................................. .................................................. ................................. ......................... ......... 20 ASIAVEST LIMITED vs. CA .................................. .................................................. ................................. ................................. .................................. .................................. ................................. .................... ... 21 BANCO DO BRASIL vs. THE COURT OF APPEALS ................................. ................................................. ................................. .................................. ............................... .............. 22 REGNER vs. LOGARTA ............................... ................................................ .................................. ................................. ................................. .................................. .................................. ............................ ........... 23 NM ROTHSCHILD AND SONS vs. LEPANTO ............................... ................................................ .................................. .................................. ................................. ......................... ......... 23 INTERNATIONAL SHOE v. STATE OF WASHINGTON ............................... ................................................ .................................. ................................. ......................... ......... 24 SHAFFER v. HEITNER, 433 U.S. 186 (1977) [Marshall, J.] ............................... ................................................ .................................. ................................. ............................ ............ 25 KULKO v. CALIFORNIA SUPERIOR COURT, 436 U.S. 84 (1978) [Marshall, J.] ................................. ................................................. ......................... ......... 26 BURNHAM v. SUPERIOR COURT OF CAL., MARIN COUNTY, 495 U.S. 604 (1990) [Scalia, J.] ................................ ............................... 28 WORLD-WIDE VOLKSWAGEN CORP. CORP. ET AL. v. WOODSON, DISTRICT DISTRICT JUDGE OF CREEK COUNTY, OKLAHOMA, ET. AL. ............................... ................................................ .................................. ................................. ................................. .................................. .................................. ............................... .............. 28 ASAHI METAL INDUSTRY INDUSTRY CO., LTD. v. SUPERIOR COURT OF CALIFORNIA, SOLANO COUNTY (CHENG SHIN RUBBER INDUSTRIAL CO., LTD., REAL PARTY IN INTEREST) ............................... ................................................ .................................. ................. 29 INSURANCE CORPORATION OF IRELAND, LTD. v. COMPAGNIE DES BAUXITES DE GUINEE .................. .................. 30 VOLKSWAGENWERK AKTIENGESELLSCHAFT AKTIENGESELLSCHAFT v. SCHLUNK, ADMINISTRATOR ADMINISTRATOR OF THE ESTATES OF SCHLUNK ET AL. ................................. .................................................. .................................. ................................. ................................. ................................. ................................. .................................. .................... ... 31 SOCIETE NATIONALE INDUSTRIELLE AEROSPATIALE v. UNITED STATES DISTRICT COURT .................. ................. 32 INTEL CORP. v. ADVANCED MICRO DEVICES, INC. ............................... ................................................ .................................. ................................. ............................ ............ 33 DULAY v. DULAY ................................. .................................................. .................................. ................................. ................................. ................................. ................................. .................................. .................... ... 34 NAVIDA v. DIZON JR ............................... ................................................ .................................. ................................. ................................. .................................. .................................. ............................... .............. 35 C. FORUM NON CONVENIENS ................................ ................................................. .................................. .................................. ................................. ................................. .................................. ................. 36 petitioner-defendant , v. GILBERT, respondent-plaintiff, ................................. GULF OIL CORP., petitioner-defendant .................................................. .................................. ............................ ........... 36
PIPER AIRCRAFT CO., petitioner , v. REYNO, respondent, ................................. ................................................. ................................. .................................. ............................... .............. 37 SINOCHEM INTERNATIONAL CO. LTD. v. MALAYSIA INTERNATIONAL SHIPPING ..................................... .................................... 38 PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, AND ATHON A HOLDINGS, N. V., petitioners , v. THE HONORABLE COURT OF APPEALS, 1488, Inc., Drago Daic, Ventura O. Ducat, Precioso R. Perlas, and William H. Craig, respondents. ................................ ................................................. .................................. ................................. ................................. ....................... ...... 40 THE MANILA HOTEL CORP. AND MANILA MANILA HOTEL INTL. LTD., petitioners, v.NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO G. SANTOS, respondents. 41
CONFLICT OF LAWS 2012-2013 BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD., petitioners, v. COURT OF APPEALS, HON. MANUEL PADOLINA, PADOLINA, EDUARDO LITONJUA, SR., SR., and AURELIO K. LITONJUA, JR., respondents. .................................. .................................................. ................................. .................................. .................................. ................................. ................................. ................................. ............................ ............ 42 CRESCENT PETROLEUM, LTD., Petitioner, v. M/V "LOK MAHESHWARI," THE SHIPPING CORPORATION OF INDIA, and PORTSERV LIMITED and/or TRANSMAR SHIPPING, INC., Respondents. .............................................. .............................................43 D. CHOICE, ASCERTAINMENT AND APPLICATION OF FOREIGN LAW ............................... ................................................ ............................... .............. 43 KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD ., petitioners, v. MINORU KITAMURA, respondent. ................................. ................................................. ................................. ................................. ................................. .................................. .................................. ............................... .............. 43 NORSE-MANAGEMENT CO. v. NATIONAL SEAMEN BOARD ................................ ................................................ .................................. ............................. ........... 44 EDI-STAFFBUILDERS INTERNATIONAL INC. v. NLRC ................................ ................................................. ................................. ................................. ....................... ...... 44 HEIRS OF DECEASED SPOUSES ARCILLA v. TEODORO ................................. ................................................. ................................. .................................. .................... ... 44 WILDVALLEY SHIPPING SHIPPING CO v. CA ............................... ............................................... ................................. .................................. .................................. ................................. ......................... ......... 44
DEUTSCHE GESELLSCHAFT FŰR TECHNISCHE ZUSAMMENARBEIT v. COURT OF APPEALS .................... .................... 44 CADALIN v. POEA‘S ADMINISTRATOR ................................ ................................................. .................................. ................................. ................................. ................................. .................. 46 HOME INSURANCE CO. v. DICK ................................ ................................................. .................................. ................................. ................................. ................................. ............................ ............ 47 ALLSTATE INS. CO. v. HAGUE .................................. .................................................. ................................. ................................. ................................. .................................. ............................... .............. 49 PHILIPS PETROLEUM COMPANY, v. SHUTTS, et al. ................................. ................................................. ................................. .................................. ............................... .............. 50 SAUDI ARABIAN AIRLINES v. COURT OF APPEALS, MILAGROS MILAGROS P. MORADA MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City ................................. ......................................... ........ 52 E. NATIONALITY AND DOMICILE ............................... ................................................ .................................. ................................. ................................. ................................. ............................ ............ 54 JUAN GALLANOSA FRIVALDO FRIVALDO v. COMMISSION ON ELECTIONS AND THE LEAGUE OF MUNICIPALITIES, SORSOGON CHAPTER, HEREIN REPRESENTED BY ITS PRESIDENT, SALVADOR NEE ESTUYE ............... 54 ERNESTO S. MERCADO v. EDUARDO BARRIOS MANZANO and the COMMISSION ON ELECTIONS ........... 56 CIRILO R. VALLES v. COMMISSION COMMISSION ON ELECTIONS and ROSALIND YBASCO LOPEZ .................................. .................................. 58 DJUMANTAN v. HON. ANDREA D. DOMINGO, COMMISSIONER OF THE BOARD OF IMMIGRATION, HON. REGINO R. SANTIAGO and HON. JORGE V. SARMIENTO, COMMISSIONERS BUREAU OF IMMIGRATION AND DEPORTATION ................................. .................................................. ................................. ................................. .................................. ................................. .................. 60 ANTONIO BENGSON III, v. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and TEODORO C. CRUZ .................................. .................................................. ................................. ................................. ................................. .................................. ................................. ................................. .................................. ....................... ...... 61 TUAN ANH NGUYEN, et al. v. IMMIGRATION AND NATURALIZATION SERVICE ............................... ........................................... ............ 63 SCHNEIDER v. RUSK ................................. ................................................. ................................. ................................. ................................. .................................. .................................. ............................... .............. 66 TROP v. DULLES ................................. ................................................. ................................. ................................. ................................. .................................. ................................. ................................. ....................... ...... 66 AASJS (ADVOCATES AND ADHERENTS OF SOCIAL JUSTICE JUSTICE FOR SCHOOL TEACHERS AND ALLIED ALLIED WORKERS) MEMBER - HECTOR GUMANGAN CALILUNG, CALILUNG, Petitioner, v. THE HONORABLE SIMEON SIMEON DATUMANONG, in his official capacity as the Secretary of Justice,Respondent. ............................... ................................................ ............................. ............ 68 ATTY. ROMULO B. MACALINTAL, MACALINTAL, petitioner, vs. COMMISSION ON ELECTIONS, HON. ALBERTO ROMULO, in his official capacity as Executive Secretary, and HON. EMILIA T. BONCODIN, Secretary of the Department of Budget and Management, respondents. ............................... ................................................ ................................. ................................. .................................. ................................. .................................. .......................... ........ 69 LOIDA NICOLAS-LEWIS, GREGORIO B. MACABENTA, ALEJANDRO ALEJANDRO A. ESCLAMADO, ARMANDO B. HEREDIA, REUBEN S. SEGURITAN, ERIC LACHICA FURBEYRE, TERESITA A. CRUZ, JOSEFINA OPENA DISTERHOFT, MERCEDES V. OPENA, CORNELIO R. NATIVIDAD, EVELYN D. NATIVIDAD, Petitioners versus - COMMISSION ON ELECTIONS, ............................... ................................................ .................................. ................................. ................................. ................................. .................. 72 EUSEBIO EUGENIO K. LOPEZ, petitioner, -versus- COMELEC and Tessie Villanueva, respondents ......................... ........................ 73 F. MARRIAGE, DIVORCE AND OTHER ENCOUNTERS E NCOUNTERS ................................. .................................................. .................................. ................................. ......................... ......... 74 UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD., petitioners, v. COURT OF APPEALS, HON. MANUEL PADOLINA, PADOLINA, EDUARDO LITONJUA, SR., SR., and AURELIO K. LITONJUA, JR., respondents. .................................. .................................................. ................................. .................................. .................................. ................................. ................................. ................................. ............................ ............ 42 CRESCENT PETROLEUM, LTD., Petitioner, v. M/V "LOK MAHESHWARI," THE SHIPPING CORPORATION OF INDIA, and PORTSERV LIMITED and/or TRANSMAR SHIPPING, INC., Respondents. .............................................. .............................................43 D. CHOICE, ASCERTAINMENT AND APPLICATION OF FOREIGN LAW ............................... ................................................ ............................... .............. 43 KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD ., petitioners, v. MINORU KITAMURA, respondent. ................................. ................................................. ................................. ................................. ................................. .................................. .................................. ............................... .............. 43 NORSE-MANAGEMENT CO. v. NATIONAL SEAMEN BOARD ................................ ................................................ .................................. ............................. ........... 44 EDI-STAFFBUILDERS INTERNATIONAL INC. v. NLRC ................................ ................................................. ................................. ................................. ....................... ...... 44 HEIRS OF DECEASED SPOUSES ARCILLA v. TEODORO ................................. ................................................. ................................. .................................. .................... ... 44 WILDVALLEY SHIPPING SHIPPING CO v. CA ............................... ............................................... ................................. .................................. .................................. ................................. ......................... ......... 44
DEUTSCHE GESELLSCHAFT FŰR TECHNISCHE ZUSAMMENARBEIT v. COURT OF APPEALS .................... .................... 44 CADALIN v. POEA‘S ADMINISTRATOR ................................ ................................................. .................................. ................................. ................................. ................................. .................. 46 HOME INSURANCE CO. v. DICK ................................ ................................................. .................................. ................................. ................................. ................................. ............................ ............ 47 ALLSTATE INS. CO. v. HAGUE .................................. .................................................. ................................. ................................. ................................. .................................. ............................... .............. 49 PHILIPS PETROLEUM COMPANY, v. SHUTTS, et al. ................................. ................................................. ................................. .................................. ............................... .............. 50 SAUDI ARABIAN AIRLINES v. COURT OF APPEALS, MILAGROS MILAGROS P. MORADA MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City ................................. ......................................... ........ 52 E. NATIONALITY AND DOMICILE ............................... ................................................ .................................. ................................. ................................. ................................. ............................ ............ 54 JUAN GALLANOSA FRIVALDO FRIVALDO v. COMMISSION ON ELECTIONS AND THE LEAGUE OF MUNICIPALITIES, SORSOGON CHAPTER, HEREIN REPRESENTED BY ITS PRESIDENT, SALVADOR NEE ESTUYE ............... 54 ERNESTO S. MERCADO v. EDUARDO BARRIOS MANZANO and the COMMISSION ON ELECTIONS ........... 56 CIRILO R. VALLES v. COMMISSION COMMISSION ON ELECTIONS and ROSALIND YBASCO LOPEZ .................................. .................................. 58 DJUMANTAN v. HON. ANDREA D. DOMINGO, COMMISSIONER OF THE BOARD OF IMMIGRATION, HON. REGINO R. SANTIAGO and HON. JORGE V. SARMIENTO, COMMISSIONERS BUREAU OF IMMIGRATION AND DEPORTATION ................................. .................................................. ................................. ................................. .................................. ................................. .................. 60 ANTONIO BENGSON III, v. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and TEODORO C. CRUZ .................................. .................................................. ................................. ................................. ................................. .................................. ................................. ................................. .................................. ....................... ...... 61 TUAN ANH NGUYEN, et al. v. IMMIGRATION AND NATURALIZATION SERVICE ............................... ........................................... ............ 63 SCHNEIDER v. RUSK ................................. ................................................. ................................. ................................. ................................. .................................. .................................. ............................... .............. 66 TROP v. DULLES ................................. ................................................. ................................. ................................. ................................. .................................. ................................. ................................. ....................... ...... 66 AASJS (ADVOCATES AND ADHERENTS OF SOCIAL JUSTICE JUSTICE FOR SCHOOL TEACHERS AND ALLIED ALLIED WORKERS) MEMBER - HECTOR GUMANGAN CALILUNG, CALILUNG, Petitioner, v. THE HONORABLE SIMEON SIMEON DATUMANONG, in his official capacity as the Secretary of Justice,Respondent. ............................... ................................................ ............................. ............ 68 ATTY. ROMULO B. MACALINTAL, MACALINTAL, petitioner, vs. COMMISSION ON ELECTIONS, HON. ALBERTO ROMULO, in his official capacity as Executive Secretary, and HON. EMILIA T. BONCODIN, Secretary of the Department of Budget and Management, respondents. ............................... ................................................ ................................. ................................. .................................. ................................. .................................. .......................... ........ 69 LOIDA NICOLAS-LEWIS, GREGORIO B. MACABENTA, ALEJANDRO ALEJANDRO A. ESCLAMADO, ARMANDO B. HEREDIA, REUBEN S. SEGURITAN, ERIC LACHICA FURBEYRE, TERESITA A. CRUZ, JOSEFINA OPENA DISTERHOFT, MERCEDES V. OPENA, CORNELIO R. NATIVIDAD, EVELYN D. NATIVIDAD, Petitioners versus - COMMISSION ON ELECTIONS, ............................... ................................................ .................................. ................................. ................................. ................................. .................. 72 EUSEBIO EUGENIO K. LOPEZ, petitioner, -versus- COMELEC and Tessie Villanueva, respondents ......................... ........................ 73 F. MARRIAGE, DIVORCE AND OTHER ENCOUNTERS E NCOUNTERS ................................. .................................................. .................................. ................................. ......................... ......... 74 UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 ALICE REYES VAN DORN, petitioner, v. HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch CX, Regional Trial Court of the National Capital Region Pasay City and RICHARD UPTON respondents. ............................ ............................ 74 FE D. QUITA, petitioner , v. COURT OF APPEALS and BLANDINA DANDAN, respondents . ................................. ......................................... ........ 74 REPUBLIC OF THE PHILIPPINES v. CRASUS IYOY ............................... ................................................ .................................. .................................. ............................... .............. 75 REPUBLIC OF THE PHILIPPINES v. CIPRIANO ORBECIDO III .................................. .................................................. .................................. .......................... ........ 76 GERBERT CORPUZ v. DAISYLYN TIROL STO. TOMAS and The SOLICITOR GENERAL ................................... .................................. 77 MEROPE ENRIQUEZ VDA. DE CATALAN v. LOUELLA CATALAN-LEE ............................... ................................................ ............................. ............ 79 IMELDA MANALAYSAY PILAPIL, petitioner, v. HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judg e of the Regional Trial Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the City Fiscal of Manila; and ERICH EKKEHARD GEILING, respondents ............................... ................................................ .................................. ................................. ................................. ....................... ...... 80 GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, v. REDERICK A. RECIO, respondent .................. 81 ELMAR O. PEREZ, Petitioner, v. COURT OF APPEALS, Fifth Division, TRISTAN A. CATINDIG and LILY GOMEZ-CATINDIG, Respondents ................................ ................................................. .................................. ................................. ................................. ................................. ............................ ............ 82 WILLIAMS V NORTH CAROLINA CAROLINA (1942) ............................... ................................................ .................................. ................................. ................................. ................................. .................. 83 WILLIAMS v. NORTH CAROLINA CAROLINA ............................... ................................................ .................................. ................................. ................................. ................................. ............................ ............ 84 CHEESMAN v. IAC ............................... ................................................ .................................. ................................. ................................. ................................. ................................. .................................. .................... ... 84 MULLER v. MULLER .................................. .................................................. ................................. ................................. ................................. .................................. .................................. ............................... .............. 84 HULST v. PR BUILDERS, INC. ................................ ................................................. .................................. .................................. ................................. ................................. .................................. ................. 84 G. CONTRACTS ............................... ................................................. .................................. ................................. .................................. ................................. ................................. ................................. ............................ ............ 84 THE BREMEN v. ZAPATA OFF-SHORE CO. ................................. .................................................. .................................. ................................. .................................. .......................... ........ 84 PAKISTAN INTERNATIONAL AIRLINES CORPORATION v. HON. BLAS F. OPLE ............................................ ........................................... 85 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA/AMERICAN INTERNATIONAL UNDERWRITER (PHIL.) INC. v. STOLT-NIELSEN PHILIPPINES, INC. ............................... ................................................ .................................. ................. 86 SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA v. HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES, AIRLINES, INC. ............................... ................................................ .................................. ................................. ................................. .................................. ............................... .............. 87 PHILIPPINE AIRLINES, INC. v. COURT OF APPEALS AND GILDA C. MEJIA ............................... ................................................ ....................... ...... 88 EDNA DIAGO LHUILLIER v. v. BRITISH AIRWAYS .................................. ................................................... ................................. ................................. .................................. ................. 89 UNITED AIRLINES v. WILLIE J. UY ................................ ................................................ ................................. .................................. .................................. ................................. ......................... ......... 91 H. TORTS ............................... ................................................ .................................. ................................. ................................. .................................. .................................. ................................. ................................. ....................... ...... 92 JOSE FRANCISCO SOSAv. HUMBERTO ALVAREZ-MACHAIN, et al./UNITED STATES v. HUMBERTO ALVAREZ-MACHAIN ............................... ................................................ .................................. ................................. ................................. .................................. .................................. ............................... .............. 92 I. CORPORATIONS ............................... ................................................ .................................. ................................. ................................. ................................. ................................. .................................. ....................... ...... 94 ERIKS PTE. LTD., petitioner , v. COURT OF APPEALS and DELFIN F. ENRIQUEZ, JR., respondents . ........................... .......................... 94 HUTCHISON PORTS PHILIPPINES LIMITED, petitioner, v. SUBIC BAY METROPOLITAN AUTHORITY, INTERNATIONAL CONTAINER TERMINAL SERVICES INC., ROYAL PORT SERVICES INC. and the EXECUTIVE SECRETARY,respondents. ................................. ................................................. ................................. ................................. ................................. .................................. ....................... ...... 96 MR HOLDINGS, LTD., petitioner, v. SHERIFF CARLOS P. BAJAR, SHERIFF FERDINAND M. JANDUSAY, SOLIDBANK CORPORATION, AND MARCOPPER MINING CORPORATION, respondents . .................................. ................................. 97 STEELCASE, INC., petitioner, v. DESIGN INTERNATIONAL SELECTIONS, INC., respondent . ................................ ................................... ... 98 J. PROPERTY RIGHTS AND INTERNATIONAL INTERNATIONAL COMMERCE ................................. ................................................. ................................. ................................ ............... 101 LAUREL v. GARCIA ............................... ................................................ .................................. .................................. ................................. ................................. .................................. ................................ ............... 101 TANADA v. ANGARA ............................... ................................................ .................................. ................................. ................................. .................................. .................................. ............................. ............ 101
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 MIRPURI v. CA ............................................................................................................................................................ 101 K. DEATH, SUCCESSION AND ADMINISTRATION ................................................................................................. 101 VDA. DE PEREZ v. TOLETE ..................................................................................................................................... 101 REPUBLIC v. VILLARAMA, JR ................................................................................................................................... 101 ANCHETA v. GUERSEY-DALAYGON ..................................................................................................................... 101 L. FOREIGN JUDGMENTS ............................................................................................................................................ 101 PHILIPPINE INTERNATIONAL SHIPPING CORP v. CA ....................................................................................... 101 OIL AND NATURAL GAS COMMISSION v. CA ...................................................................................................... 101 PACIFIC ASIA OVERSEAS SHIPPING CORPORATION, petitioner v NATIONAL LABOR COMMISSION AND TEODORO RANCES, respondents ................................................................................................................................. 101 FAUNTLEROY v . LUM ............................................................................................................................................... 102 MILWAUKEE COUNTY, appelant v. M. E. WHITE CO., appellee .............................................................................. 103 D.H. OVERMYER CO. INC, OF OHIO ET AL. , petitioner v. FRICK CO. CERTITORARI TO THE COURT OF APPELAS OF OHIO, LUCAS COUNTY, private respondent ........................................................................................... 104 PHILIPPINE ALUMINUM WHEETS v. FASGI ENTERPRISE ................................................................................ 105 ASIAVEST MERCHANT BANKERS (M) BERHAD, petitioner , v. COURT OF APPEALS and PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, respondents . [G.R. No. 110263. July 20, 2001] ................................ 105 IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE TERRITORY OF GUAM OF ATTY. LEON G. MAQUERA [B.M. No. 793. July 30, 2004] .................................................................................................................... 107 ZOILO ANTONIO VELEZ v. ATTY. LEONARD S. DE VERA ............................................................................. 109 PRISCILLA C. MIJARES, LORETTA ANN P. ROSALES, HILDA B. NARCISO, SR. MARIANI DIMARANAN, SFIC, and JOEL C. LAMANGAN in their behalf and on behalf of the Class Plaintiffs in Class Action No. MDL 840, United States District Court of Hawaii, Petitioner, v. HON. SANTIAGO JAVIER RANADA, in his capacity as Presiding Judge of Branch 137, Regional Trial Court, Makati City, and the ESTATE OF FERDINAND E. MARCOS, through its court appointed legal representatives in Class Action MDL 840, United States District Court of Hawaii, namely: Imelda R. Marcos and Ferdinand Marcos, Jr., Respondents. [April 12, 2005] 111 KOREA TECHNOLOGIES CO., LTD., Petitioner, v. HON.ALBERTO A. LERMA, in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION,Respondents. 114
UNIVERSITY
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CONFLICT OF LAWS 2012-2013 A. PRELIMINARY CONSIDERATIONS THE HOME INSURANCE COMPANY v. EASTERN SHIPPING LINES The Home Insurance Company v. Nedlloyd Lijnen; Columbian Philippines Inc Questioned in these consolidated petitions for review on certiorari are the decisions of the Court of First Instance of Manila, Branch XVII, dismissing the complaints in Civil case no. 71983 and in Civil case no. 71694, on the ground that plaintiff therein, now appellant, had failed to prove its capacity to sue. L-34382 On Jan 13, 1967, S. Kaijita& Co., on behalf of Atlas Consolidated Mining & Development Corporation, shipped the
on board the SS ―Eastern Jupiter‖ from Osaka, Japan, coils of black Hot rolled Copper white rods. The said VESSEL is owned and operated by defendant EASTERN SHIPPING LINES (CARRIER). Phelps Dodge Copper Products Corporation of the Philippines was the COSIGNEE. The Shipment was insured under plaintiff HOME INSURANCE COMPANY. Upon arrival, it was discovered that the shipment was in bad order. For the loss and damages, HOME INSURANCE paid the consignee under its insurance policy. HOME INSURANCE made demands for payment against the CARRIER but Eastern Shipping Lines refused to pay. L-34383 On Dec. 22, 1966, Hansa Transport Kontor shipped 30 packages of service parts of farm equipment on board the VESSEL, SS NEDER RIJN, owned by defendant Columbian Philippines Inc, (CARRIER). International Harvester Macleod Inc was the consignee. The shipment was insured by HOME INSURANCE COMPANY. The consignee received the 29 packages with 9 pages in bad order. For the short delivery of 1 pacjage and missing items in 5 other packages, HOME INSURANCE paid the CONSIGNEE under its Insurance Cargo Policy. Demands were made on defendants CARRIER and CONSIGNEE for reimbursement but they failed and refused to pay the same. In both casesm petitioner-appellant made the following averment regarding its capacity to sue: The plaintiff is a foreign insurance company duly authorized to do business in the Philippines through its agent, Victor H. Bello. In L-34382, Eastern Shipping Lines alleged in its answer that Home insurance company has no capacity to sue for lack of knowledge or information sufficient to form a belief as to the truth thereof. In L-34383, N.V. Nedlloyd Linjen, Columbian Philippines denied Home Insurance‘s capacity to sue for lack of knowledge or information sufficient to form a belief as to the truth thereof.
The trial court dismissed Home Insurance‘s complaints in the two cases on the same ground that it failed to prove its capacity to sue. It reasoned as follows:
―A suing foreign corporation, like plaintiff, has to plead affirmatively and prove either that the transaction upon which it bases its complaint is an isolated one, or that it is licensed to transact business in this country, failing which, it will be deemed that it has no valid cause of action... IT has to be held that plaintiff is doing business in the Philippines. Consequently, it must have a license under Sec. 68 of the Corporation Law before it can be allowed to
sue‖ ISSUE: Whether plaintiff Home Insurance Company has capacity to sue HELD: Petitioner was, telling the truth when it averred in its complaints that it was a foreign insurance company duly authorized to business in the Philippines through its agent Mr. Victor Bello. However, the insurance contracts which formed the basis of these cases were executed, the petitioner had not yet secured the necessary licenses and authority.
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CONFLICT OF LAWS 2012-2013 To repeat, the objective of the law was to subject the foreign corporation to the jurisdiction of our courts. The Corporation law must be given a reasonable, not an unduly harsh, interpretation which does not hamper the development of trade relations and which fosters friendly commercial intercourse among countries. There is no question that the contracts are enforceable. The requirement of registration affects only the remedy. The prohibition against doing business without first securing a license is now given a penal sanction which is also applicable to other violations of the Corporation Code under the general provisions of Sec 144 of the Code. Our ruling that the lack of capacity at the time of the execution of contracts were cured by the subsequent registrations is also strengthened by the procedural aspects of these cases. We find general denials inadequate to attack foreign corporations lack of capacity to sue in the light of positive averment that it is authorized to do so. At the very least, the private respondents should have stated particulars in their answers upon which a specific
denial of the petitioner‘s capacity to sue could have been based or which could have supported its denial for lack of knowledge. Wherefore, petitions are hereby granted.
— oOo — FIRST PHILIPPINE INTERNATIONAL BANK v. CA Producer Bank of the Philippines acquired six parcels of land with a total area of 101 hectares located at Don Jose, Sta. Rosa, Laguna. The property used to be owned by BYME Investment and Development Corporation which had them mortgaged with the bank as collateral fora loan. The original plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted to purchase the property and thus initiated negotiations with Mercurio Rivera, the manager of Producers Bank, for that purpose. Defendant bank, through defendant Rivera, acknowledged receipt of the negotiation letter and stated, in its communication of December 2, 1987 that said letter has been ―referred x xx to the office of our Conservator for proper disposition.‖ However, no response came from the Acting Conse rvator. endants through Acting Conservator Encarnacion repudiated the authority of defendant Rivera and claimed that his dealings with the plaintiffs, particularly his counter-offer of P5.5 Million are unauthorized or illegal. Plaintiffs filed a suit for specific performance with damages against the bank, its Manager Rivera and Acting Conservator Encarnacion. The basis of the suit was that the transaction had with the bank resulted in a perfected contract of sale. The defendants took the position that there was no such perfected sale because the defendant
Rivera is not authorized to sell the property, and that there was no meeting of the minds as to the price.‖ On July 11, 1992, during the pendency of the proceedings in the Court of Appeals, Henry Co and several other stockholders of the Bank, through counsel Angara Abello Concepcion Regala and Cruz, filed an action (hereafter, the ―Second Case‖) -purportedly a ―derivative suit‖ - with the Regional Trial Court of Makati, Branch 134, docketed as Civil Case No. 92-1606, against Encarnacion, Demetria and Janolo ―to declare any perfected sale of the property
as unenforceable and to stop Ejercito from enforcing or implementing the sale.‖ ISSUE: Whether there was forum shopping on the part of Petitioner Bank
RULING: We rule for private respondent
To begin with, forum-shopping originated as a concept in private international law ,[12] 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 no t precluded from seeking remedies elsewhere. UNIVERSITY
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In this light, Black‘s Law Dictionary [13] says that forum-shopping ―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,[14] ―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 conflicts of laws, but also to a choice of remedies. As to the first (choice of venues),
the Rules of Court, for example, allow a plaintiff to commence personal actions ―where the defendant or any of the
defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff‖ (Rule 4, Sec. 2 [b]). As to remedies, aggrieved parties, for example, are given a choice of pursuing civil liabilities independently of the criminal, arising from the same set of facts. A passenger of a public utility vehicle involved in a vehicular accident may sue on culpa contractual, culpa aquiliana or culpa criminal - each remedy being available independently of the others - although he cannot recover more than once. Applying the foregoing principles in the case before us and comparing it with the Second Case, it is obvious that there exist identity of parties or interests represented, identity of rights or causes and identity of reliefs sought. Very simply stated, the original complaint in the court a quo which gave rise to the instant petition was filed by the buyer (herein private respondent and his predecessors-in-interest) against the seller (herein petitioners) to enforce the alleged perfected sale of real estate. On the other hand, the complaint[21] in the Second Case seeks to
declare such purported sale involving the same real property ―as unenforceable as against the Bank,‖ which is the
petitioner herein. In other words, in the Second Case, the majority stockholders, in representation of the Bank, are seeking to accomplish what the Bank itself failed to do in the original case in the trial court. In brief, the objective or the relief being sought, though worded differently, is the same, namely, to enable the petitioner Bank to escape from the obligation to sell the property to respondent.
— oOo — MCGEE v. INTERNATIONAL INSURANCE CO. In 1944, Lowell Franklin, a resident of California, bought a life insurance policy from an Arizona corporation, naming petitioner as beneficiary. Later, respondent, a Texas corporation, agreed to assume the insurance obligations of the Arizona corporation, and mailed a reinsurance certificate to petitioner's son in California, offering to insure him in accordance with his policy. In 1950, Franklin died. His mother, the beneficiary, notified the insurance company of his death. Respondent refused to pay, claiming that Franklin committed suicide. McGee obtained judgment against the insurance company in California state court and attempted to enforce it in Texas. Texas state court refused to enforce the California judgment holding it was void under the 14th amendment (lack of jurisdiction). ISSUE: Whether the insurance company , a non-resident corporation, is subject to jurisdiction in a state where it never had any office or agent, merely because it was a party to contract with a resident of the state RULING: Turning to this case we think it apparent that the Due Process Clause did not preclude the California court from entering a judgment binding on respondent. It is sufficient for purposes of due process that the suit was based on a contract which had substantial connection with that State. Cf. Hess v. Pawloski,274 U.S. 352 ; Henry L. Doherty & Co. v. Goodman, 294 U.S. 623 ; Pennoyer v. Neff, 95 U.S. 714, 735 .2 The contract was delivered in California, the premiums were mailed from there and the insured was a resident of that State when he died. It cannot be denied that California has a manifest interest in providing effective means of redress for its residents when their insurers refuse to pay claims. These residents would be at a severe disadvantage if they were forced to follow the insurance company to a distant State in order to hold it legally accountable. When claims were small or moderate individual claimants frequently could not afford the cost of bringing an action in a foreign forum - thus in effect making the company judgment proof. Often the crucial witnesses - as here on the company's defense of suicide - will be found in the insured's locality. [355 U.S. 220, 224] Of course there may be inconvenience to the insurer if it is held amenable to suit in California where it had this contract but certainly nothing which amounts to a denial of due process. Cf. Travelers Health Assn. v. Virginia ex rel. State Corporation Comm'n, 339 U.S. 643 . There UNIVERSITY
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CONFLICT OF LAWS 2012-2013 is no contention that respondent did not have adequate notice of the suit or sufficient time to prepare its defenses and appear. The California statute became law in 1949, after respondent had entered into the agreement with Franklin to assume Empire Mutual's obligation to him. Respondent contends that application of the statute to this existing contract improperly impairs the obligation of the contract. We believe that contention is devoid of merit. The statute was remedial, in the purest sense of that term, and neither enlarged nor impaired respondent's substantive rights or obligations under the contract. It did nothing more than to provide petitioner with a California forum to enforce whatever substantive rights she might have against respondent. At the same time respondent was given a reasonable time to appear and defend on the merits after being notified of the suit. Under such circumstances it had no vested right not to be sued in California. Cf. Bernheimer v. Converse, 206 U.S. 516 ; National Surety Co. v. Architectural Decorating Co., 226 U.S. 276 ; Funkhouser v. J. B. Preston Co., 290 U.S. 163 .
— oOo — VALMONTE v. ALCALA The spouses Alfredo Valmonte alleged that they are the unregistered owners of Apartment no.1411 located in Paco, Manila. Since the petitioners were migrating to the United States, they offered the apartment for lease to respondent
Clarita Alcala. The lease contract was consummated by the Alcala‘s payment of two months‘ rental. Alcala‘s subsequent failure to pay the agreen rentals made Valmonte to file a complaint for unlawful detainer against Alcala. Since the Valmontes are already US residents at that time, they signed the required Verification/Certification of non-forum shoppin of their complaint before the notary public in the state of Washington, such was authenticated by the Philippine Consulate General in San Francisco. Alcala contended that the Valmontes have no cause of action against her, that she was already the rightful owner of the apartment but virtue of the sale between her and the Valmontes, as evidenced by the Memorandum of Agreement. MTC ruled in favor of the petitioners. RTC reversed. The petitioners responded to the reversal by filing a petition for review. On the same date, they also formally manifested with the CA that- to comply with the verification adn certification requirements of the Rules of Courtthey were in the meantime submitting a photostatic copy of the Verification/certification, as the original was still in the Philippine Consulate in San Francisco for authentication. They promised to submit the original as soon as the consulate completed the authentication process. The CA denied the petition. The CA reasoned that the petitioners could not have actually read and understood the petition or attested to the truth of the contents thereof because at the time they executed the verification, the petition was still inexistent. The verification was said to be executed on March 17, 2005 and the petition was dated March 31, 2005. ISSUE: Whether or not the variance between the dates of verification/certification that the Valmontes executed abroad and the CA Petition conclude that they did not read the petition before it was filed in Court RULING: Generally, a pleading is not required to be verified unless required by law or by the Rules of Court. One such requirement is found in Section 1 of Rule 42 which requires a party appealing from a decision of the RTC rendered in the exercise of its appellate jurisdiction to file a verified petition for review with the CA.
Verification, when required, is intended to secure an assur ance that the allegations of a pleading are true and correct; are not speculative or merely imagined; and have been made in good faith. To achieve this purpose, the verification of a pleading is made through an affidavit or sworn statement confirming that the affiant has read the pleading whose allegations are true and correct of the affiant's personal knowledge or based on authentic records. Apparently, the CA concluded that no real verification, as above required, had been undertaken since the CA UNIVERSITY
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CONFLICT OF LAWS 2012-2013 Petition was dated March 31, 2005 while the Verification/Certification carried an earlier date - March 17, 2005; the petition "was still inexistent" when the Verification/Certification was executed. We find this conclusion erroneous for the following reasons:
First , the variance in dates does not necessarily contradict the categorical declaration made by petitioners in their affidavit that they read and understood the contents of the pleading. The petitioners' claim in this regard is that they read a copy of the CA Petition through an electronic mail (e-mail ) sent to them by their lawyers. We find this claim, under the circumstances more fully discussed below, to be a reasonable explanation of why a variance in dates existed. We should not lose sight of the reality that pleadings are prepared and signed by the counsel at the instructions of the client; the latter merely provides the supporting facts of the pleading and, as needed, verifies that the allegations are true and correct. In short, the pleading and the verification are prepared separately and a variance in their dates is a matter that may satisfactorily be explained. To demand the litigants to read the very same document that is to be filed before the courts is too rigorous a requirement; what the Rules require is for a party to read the contents of a pleading without any specific requirement on the form or manner in which the reading is to be done. That a client may read the contents of a pleading without seeing the same pleading to be actually filed with the court is, in these days of e-mails and other technological advances in communication, not an explanation that is hard to believe. Apparently in this case, counsel sent a copy of the draft petition by e-mail and finalized it as soon as it was approved by the petitioners. The latter, on the other hand, complied with their end not only by approving the terms of the petition, but also by sending a copy of their sworn statement (as yet unauthenticated) in order to file the petition soonest, thereby complying with the required timeliness for the filing of the petition. To our mind, beyond the manner of these exchanges, what is important is that efforts were made to satisfy the objective of the Rule - to ensure good faith and veracity in the allegations of a pleading - thereby allowing the courts to act on the case with reasonable certainty that the petitioners' real positions have been pleaded.
Second, the "circumstances" we mentioned above refer to the petitioners' unique situation as parties residing overseas who are litigating locally through their local counsel. While these overseas litigants are not excused from complying with our Rules such as the strict observance of the periods for appeal and the verification requirement, we must take into account the attendant realities brought into play because they are suing from overseas or via long distance communications with their counsel. In the verification requirement, there are added formalities required for the acceptance in the Philippines of statements sworn overseas before foreign notaries; we require their authentication by our consulates. This is a process whose completion time may vary depending, among others, on various factors such as the location of the requesting party from the consulate; the peculiarities of foreign laws on notaries; the volume of transactions in a consulate, noting particularly the time of year when the authentication is requested; and the mode of sending the authenticated documents to the Philippines. Apparently compelled by one or a combination of these reasons, the petitioners in fact manifested when they filed their petition (on March 31, 2005) that they were submitting a photostatic copy of the Verification/Certification executed in Washington on March 17, 2005 since the original was still with the Philippine Consulate in San Francisco for authentication. We take judicial notice that the petitioners' request for authentication coincided with the observance of the Holy Week - a traditional period of prayer and holidays in the Philippines, for the Philippines' foreign embassies and consulates, and even for Filipinos overseas. We find it significant that, conformably with their Manifestation, the petitioners' counsel filed on April 8, 2005 the duly sworn and authenticated Verification as soon as counsel received it. Under these circumstances, there is every reason for an equitable and relaxed application of the rules to the petitioners' situation.
Third, we discern utmost good faith on the part of the petitioners when they filed their Manifestation about their problem, intent, and plan of compliance with the verification requirement. They in fact stated early on through this Manifestation that their verification had been executed on March 17, 2005 in Washington, that is, at a date much earlier than the filing of their petition and manifestation. Unfortunately, the CA failed to note the variance in dates at the earliest opportunity; thus, the CA dismissed the petition on some other ground, only to hark back later on to UNIVERSITY
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CONFLICT OF LAWS 2012-2013 the variance in dates in their reconsideration of the earlier dismissal. Given this good faith and the early disclosure, it was basically unfair for the CA - who had earlier overlooked the variance in dates - to subsequently make this ground the basis of yet another dismissal of the petition. The CA - after overlooking the variance in dates at the first opportunity - should have at least asked for the petitioners' explanation on why the variance should not be an additional ground for the dismissal of the petition, instead of reflecting in their order on reconsideration that it could have granted the motion for reconsideration based on attachments already made, but there existed another reason - the variance in dates - for maintaining the dismissal of the petition.
Fourth, we note that most of the material allegations set forth by petitioners in their CA Petition are already in their complaint for unlawful detainer filed before the MTC on April 26, 2002. Attached to the complaint was a Verification/Certification dated March 18, 2002 (authenticated by the Philippine Consulate in San Francisco on March 27, 2002) in which petitioners declared under oath that they had caused the preparation of the complaint through their lawyers and had read and understood the allegations of the complaint. The material facts alleged in the CA Petition are likewise stated in the records of the case, as part of the findings of facts made by the MTC and the RTC. Verification as to the truth of these facts in the petition for review before the CA was, therefore, strictly a redundancy; its filing remained a necessity only because the Rules on the filing of a petition for review before the CA require it. This consideration could have led to a more equitable treatment of the petitioners' failure to strictly comply with the Rules, additionally justified by the fact that the failure to comply with the rules on verification is a formal rather than a jurisdictional defect .
In sum, we find sufficient justification to rule - under the circumstances of this case - that the CA committed a reversible error when it dismissed the petition for failure to strictly follow the verification requirements. Stated otherwise, we do not consider the variance between the dates as fatal to the petitioners' case because the variance did not necessarily lead to the conclusion that no verification was made, or that the verification was false. More importantly, the variance totally lost significance after the petitioners sent from the US and submitted to the CA the required Verification/Certification in compliance with their previously manifested intent. As this Court noted in a case where compliance with a certificate of non-forum shopping was at issue, the fact that the Rules require strict compliance merely underscores its mandatory nature; it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances, as we find in this case
— oOo — B. JURISDICTION EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. ARABIAN AMERICAN OIL COMPANY 499 U.S. 244 Nos. 89-1838, 89-1845 Decided March 26, 1991 U.S. Supreme Court We assume that Congress legislates against the backdrop of the presumption against extraterritoriality. Therefore, unless there is "the affirmative intention of the Congress clearly expressed," we must presume it "is primarily concerned with domestic conditions."
Petitioner Boureslan (Boureslan) is a naturalized United States citizen who was born in Lebanon. The respondents are two Delaware corporations, Arabian. American Oil Company (Aramco), and its subsidiary, Aramco Service Company (ASC). Aramco's principal place of business is Dhahran, Saudi Arabia, and it is licensed to do business in Texas. ASC's principal place of business is Houston, Texas. Boureslan was hired by ASC as a cost engineer in Houston. A year later, he was transferred, at his request, to work for Aramco in Saudi Arabia. Boureslan remained with Aramco in Saudi Arabia until he was discharged in 1984. After filing a charge of discrimination with the Equal Empl oyment Opportunity Commission (EEOC), he instituted this suit in the United States District Court for the Southern District of Texas against Aramco and ASC. He sought relief under both state law and Title VII which prohibits various discriminatory employment practices based on an individual's race, color, religion, sex, or national origin. of the Civil Rights Act of 1964 on the ground that he was harassed and ultimately discharged by respondents on account of his race, religion, and national origin.
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CONFLICT OF LAWS 2012-2013 Respondents filed a motion for summary judgment on the ground that the District Court lacked subject matter jurisdiction over Boureslan's claim because the protections of Title VII do not extend to United States citizens employed abroad by American employers. The District Court agreed, and dismissed Boureslan's Title VII claim; it also dismissed his state law claims for lack of pendent jurisdiction, and entered final judgment in favor of respondents. Both Boureslan and the EEOC petitioned for certiorari. The Court granted both petitions for certiorari to resolve this important issue of statutory interpretation. Both parties concede, as they must, that Congress has the authority to enforce its laws beyond the territorial boundaries of the United States. Boureslan and the EEOC contend that the language of Title VII evinces a clearly expressed intent on behalf of Congress to legislate extraterritorially. They rely principally on two provisions of the statute. First, petitioners argue that the statute's definitions of the jurisdictional terms "employer" and "commerce" are sufficiently broad to include U.S. firms that employ American citizens overseas. Second, they maintain that the statute's "alien exemption" clause, 42 U.S.C. § 2000e-1, necessarily implies that Congress intended to protect American citizens from employment discrimination abroad. ISSUE: whether Title VII which prohibits various discriminatory employment practices based on an individual's race, color, religion, sex, or national origin. of the Civil Rights Act of 1964 applies extraterritorially to regulate the employment practices of United States employers who employ United States citizens abroad. HELD: Petition DENIED
Title VII does not apply extraterritorially to regulate the employment practices of United States firms that employ American citizens abroad. EEOC' evidence, while not totally lacking in probative value, falls short of demonstrating the clearly expressed affirmative congressional intent that is required to overcome the well-established presumption against statutory extraterritoriality. Pp. 499 U. S. 249-259. (a) EEOC argue unpersuasively that Title VII's "broad jurisdictional language" -- which extends the Act's protections to commerce "between a State and any place outside thereof" -- evinces a clear intent to legislate extraterritorially. The language relied on is ambiguous, does not speak directly to the question presented here, and constitutes boilerplate language found in any number of congressional Acts, none of which have been held to apply overseas. EEOC' argument also finds no support in this Court's decisions, which have repeatedly held that even statutes containing broad language in their definitions of "commerce" that expressly refer to "foreign commerce" do not apply abroad. (b) EEOC also argue unpersuasively that Title VII's "alien exemption" clause -- which renders the statute inapplicable "to an employer with respect to the employment of aliens outside any State" -- clearly manifests the necessary congressional intent to cover employers of United States citizens working abroad. If EEOC were correct, there would be no statutory basis for distinguishing between American employers and foreign employers. Absent clearer evidence of congressional intent, this Court is unwilling to ascribe to Congress a policy which would raise difficult international law issues by imposing this country's employment discrimination regime upon foreign corporations operating in foreign commerce. This conclusion is fortified by other factors suggesting a purely domestic focus, including Title VII's failure even to mention foreign nations or proceedings, despite a number of provisions indicating a concern that the sovereignty and laws of States not be unduly interfered with, and the Act's failure to provide any mechanisms for its overseas enforcement. It is also reasonable to conclude that, had Congress intended Title VII to apply overseas, it would have addressed the subject of conflicts with foreign laws and procedures, as it did in amending the Age Discrimination in Employment Act of 1967 (ADEA) to apply abroad. (c) Petitioners' contention that this Court should defer to the EEOC's position that Title VII applies abroad is rejected. The EEOC's interpretation does not fare well under the deference standards set forth in General Electric Co. v. Gilbert, 429 U. S. 125, 429 U. S. 140-146, since the interpretation has been neither contemporaneous with Title VII's enactment nor consistent with an earlier contrary position enunciated by the EEOC closer to the date the statute came into law, since the EEOC offers no basis in its experience for the change, and since the interpretation lacks support in the statute's plain language. Although this Court does not wholly discount the interpretation, it is of insufficient weight, even when considered in combination with petitioners' other arguments, to overcome the presumption against extraterritorial application. UNIVERSITY
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CONFLICT OF LAWS 2012-2013 (d) Congress' awareness of the need to make a clear statement that a statute applies overseas is amply demonstrated by the numerous occasions on which it has legislated extraterritoriality, including its amendment of the ADEA. Congress may similarly amend Title VII, and, in doing so, will be able to calibrate its provisions in a way that this Court cannot. We assume that Congress legislates against the backdrop of the presumption against extraterritoriality. Therefore, unless there is "the affirmative intention of the Congress clearly expressed," we must presume it "is primarily concerned with domestic conditions."
Petitioners also contend that we should defer to the EEOC's consistently held position that Title VII applies abroad. We conclude that petitioners' evidence, while not totally lacking in probative value, falls short of demonstrating the affirmative congressional intent required to extend the protections of the Title VII beyond our territorial borders.
— oOo — SMALL v. UNITED STATES SUPREME COURT OF THE UNITED STATES April 26, 2005 Petitioner Small was convicted in a Japanese Court of trying to smuggle firearms and ammunition into that country. He served five years in prison and then returned to the United States, where he bought a gun. Federal authorities
subsequently charged Small under 18 U.S.C. § 922(g)(1), which forbids any person … convicted in any court … of a crime punishable by imprisonment for a term exceeding one year … to … possess … any firearm. Small pleaded guilty while reserving the right to challenge his conviction on the ground that his earlier conviction, being foreign, fell outside §922(g)(1)‘s scope. The Federal District Court and the Third Circuit r ejected this argument. ISSUE: Whether the phrase "convicted in any court" does not involve foreign convictions. HELD: Petition GRANTED
Section 922(g)(1)‘s phrase ―convicted in any court‖ encompasses only domestic, not foreign, convictions. (a) In considering the scope of the phrase ―convicted in any court‖ it is appropriate to assume that Congress had domestic concerns in mind. This assumption is similar to the legal presumption that Congress ordinarily intends its statutes to have domestic, not extrat erritorial, application. The phrase ―convicted in any court‖ describes one
necessary portion of the ―gun possession‖ activity that is prohibited as a matter of domestic law. Moreover, because foreign convictions may include convictions for conduct that domestic laws would permit, e.g., for engaging in economic conduct that our society might encourage, convictions from a legal system that are inconsistent with American understanding of fairness, and convictions for conduct that domestic law punishes far less severely, the
key statutory phrase ―convicted in any court of, a crime punishable by imprisonment for a term exceeding one year‖ somewhat less reliably identifies dangerous individuals for the purposes of U.S. law where foreign convictions, rather than domestic convictions, are at issue. In addition, it is difficult to read the statute as asking judges or prosecutors to refine its definitional distinctions where foreign convictions are at issue. To somehow weed out inappropriate foreign convictions that meet the statutory definition is not consistent with the statute‘s language; it is not easy for those not versed in foreign laws to accomplish; and it would leave those previously convicted in a foreign court (say of economic crimes) uncertain about their legal obligations. These considerations provide a convincing basis for applying the ordinary assumption about the reach of domestically oriented statutes here. Thus, the Court assumes a congressional intent that the phrase ―convicted in any court‖ applies do mestically, not extraterritorially, unless the statutory language, context, history, or purpose shows the contrary. Pp. 2 — 5. (b) There is no convincing indication to the contrary here. The statute‘s language suggests no intent to reach beyond domestic convictions. To the contrary, if read to include foreign convictions, the statute‘s language creates anomalies. For example, in creating an exception allowing gun possession despite a conviction for an antitrust or business regulatory crime, §921(a)(20)(A) speaks of ―Federal or State‖ antitrust or regulatory offenses. If the phrase But if ―convicted in any court‖ generally refers only to domestic convictions, this language causes no problem. UNIVERSITY
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the phrase includes foreign convictions, the words ―Federal or State‖ prevent the exception from applying where a foreignantitrust or regulatory conviction is at issue. Such illustrative examples suggest that Congress did not
consider whether the generic phrase ―convicted in any court‖ applies to foreign convictions. Moreover, the statute‘s legislative history indicates no intent to reach beyond domestic convictions. Although the statutory purpose of keeping guns from those likely to become a threat to society does offer some support for reading §922(g)(1) to include foreign convictions, the likelihood that Congress, at best, paid no attention to the matter is reinforced by the empirical fact that, according to the Government, since 1968, there have fewer than a dozen instances in which such a foreign conviction has served as a predicate for a felon-in-possession prosecution.
— oOo — CORAZON C. SIM v. NATIONAL LABOR RELATIONS COMMISSION and EQUITABLE PCI-BANK G.R. No. 157376 2 October 2007 THIRD DIVISION AUSTRIA-MARTINEZ It was wrong for the Labor Arbiter to rule that "labor relations system in the Philippines has no extra-territorial jurisdiction." Under these provisions, it is clear that labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino wor kers.
Corazon Sim (Sim) filed a case for illegal dismissal with the Labor Arbiter, alleging that she was initially employed by Equitable PCI-Bank (Equitable PCI) in 1990 as Italian Remittance Marketing Consultant to the Frankfurt Representative Office. Eventually, she was promoted to Manager position, until September 1999, when she received a letter from Remegio David -- the Senior Officer, European Head of PCIBank, and Managing Director of PCIBEurope -- informing her that she was being dismissed due to loss of trust and confidence based on alleged mismanagement and misappropriation of funds. Equitable PCI denied any employer-employee relationship between them, and sought the dismissal of the complaint. The Labor Arbiter rendered its Decision dismissing the case for want of jurisdiction and/or lack of merit.1 According to the Labor Arbiter that: at this juncture that the labor relations system in the Philippines has no extra-territorial jurisdiction. It is limited to the relationship between labor and capital within the Philippines. Since complainant was hired and assigned in a foreign land, although by a Philippine Corporation, it follows that the law that govern their relationship is the law of the place where the employment was executed and her place of work or assignment. On this premise, the Italian law allegedly provides severance pay which was applied and extended to herein complainant .
As can be gleaned from the foregoing, a further elucidation on the matter would be an exercise in futility. On appeal, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's Decision and dismissed petitioner's appeal for lack of merit. Hence, this case should be dismissed for want of jurisdiction. ISSUE: Whether the NLRC has no jurisidiction over the complainant who was hired and assigned in a foreign land. HELD: Petition DENIED
Assuming for the sake of argument that this Office has jurisdiction over this case, still, this Office is inclined to rule in favor of the respondent. Complainant, as General Manager is an employee whom the respondent company reposed its trust and confidence. In other words, she held a position of trust. It is well-settled doctrine that the basic premise for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence. (National Sugar Refineries Corporation v. NLRC, 286 SCRA 478.) Sim does not deny having withdrawn the amount of P3,000,000.00 lire from the bank's account. What Sim submits is that she used said amount for the Radio Pilipinas sa Roma radio program of the company. Equitable PCI, however, countered that at the time she withdrew said amount, the radio program was already off the air. Equitable PCI is a managerial employee. Thus, loss of trust and confidence is a valid ground for her dismissal. The mere UNIVERSITY
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CONFLICT OF LAWS 2012-2013 existence of a basis for believing that a managerial employee has breached the trust of the employer would suffice for his/her dismissal. [w]hen an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, she gives up some of the rigid guaranties available to ordinary workers. Infractions which if committed by others would be overlooked or condoned or penalties mitigated may be visited with more severe disciplinary action. A company's resort to acts of self-defense would be more easily justified. The Court notes, however, a palpable error in the Labor Arbiter's disposition of the case, which was af firmed by the NLRC, with regard to the issue on jurisdiction. It was wrong for the Labor Arbiter to rule that "labor relations system in the Philippines has no extra-territorial jurisdiction." Article 217 of the Labor Code provides for the jurisdiction of the Labor Arbiter and the National Labor Relations Commission, viz.: ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount of exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
Moreover, Section 10 of Republic Act (R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995,18 provides: SECTION 10. Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. Also, Section 62 of the Omnibus Rules and Regulations Implementing R.A. No. 804219 provides that the Labor Arbiters of the NLRC shall have the original and exclusive jurisdiction to hear and decide all claims arising out of employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages, subject to the rules and procedures of the NLRC. Under these provisions, it is clear that labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers. In Philippine National Bank v. Cabansag, the Court pronounced: UNIVERSITY
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CONFLICT OF LAWS 2012-2013 x x x Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. For the State assures the basic rights of all workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section 18, Article II and Section 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws "which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determination or conventions agreed upon in a foreign country."21(Emphasis supplied)
— oOo — MICROSOFT CORP. v. AT&T CORP. Decided April 30, 2007 This case concerns the applicability of §271(f) to computer software first sent from the United States to a foreign manufacturer on a master disk, or by electronic transmission, then copied by the foreign recipient for installation on computers made and sold abroad.
AT&T holds a patent on a computer used to digitally encode and compress recorded speech. Microsoft‘s Window s operating system has the potential to infringe that patent because Windows incorporates software code that, when installed, enables a computer to process speech in the manner claimed by the patent. Microsoft sells Windows to foreign manufacturers who install the software onto the computers they sell. Microsoft sends each manufacturer a master version of Windows, either on a disk or via encrypted electronic transmission, which the manufacturer uses to generate copies. Those copies, not the master version sent by Microsoft, are installed on the foreign manufacturer‘s computers. The foreign -made computers are then sold to users abroad. AT&T filed an infringement suit charging Microsoft with liability for the foreign installations of Windows. By sending Windows to foreign manufacturers, AT&T contended, Microsoft ―supplie[d] … from the United States,‖ for ―combination‖ abroad, ―components‖ of AT&T‘s patented speech -processing computer, and, accordingly, was liable under §271(f). Microsoft responded that unincorporated software, because it is intangible information, cannot be typed a ―component‖ of an invention under §271(f). Microsoft also urged that the foreign -generated copies of
Windows actually installed abroad were not ―supplie[d] … from the United States.‖ Rejecting these responses, the District Court held Microsoft liable under §271(f), and a divided Federal Circuit panel affirmed. ISSUE: Whether no infringement occurs when a patented product is made and sold in another country. HELD: Petition DENIED
Because Microsoft does not export from the United States the copies of Windows installed on the foreign-made
computers in question, Microsoft does not ―suppl[y] … from the United States‖ ―components‖ of those computers, and therefore is not liable under §271(f) as currently written.
(a) A copy of Windows, not Windows in the abstract, qualifies as a ―component‖ under §271(f). Section 271(f) attaches liability to the supply abroad of the ―components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components.‖ §271(f)(1) (emphasis added).
The provision thus applies only to ―such components‖ as are combined to form the ―patented invention‖ at issue — here, AT&T‘s speech-processing computer. Until expressed as a computer-readable ―copy,‖ e.g., on a CD -ROM, Windows — indeed any software detached from an activating medium — remains uncombinable. It cannot be inserted into a CD-ROM drive or downloaded from the Internet; it cannot be installed or executed on a computer.
Abstract software code is an idea without physical embodiment, and as such, it does not match §271(f)‘s categorization: ―components‖ amenable to ―combination.‖ UNIVERSITY
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CONFLICT OF LAWS 2012-2013 Windows abstracted from a tangible copy no doubt is information — a detailed set of instructions — and thus might be compared to a blueprint (or anything else containing design information). A blueprint may contain precise instructions for the construction and combination of the components of a patented device, but it is not itself a combinable component.
The fact that it is easy to encode software‘s instructions onto a computer-readable medium does not counsel a different answer. The copy-producing step is what renders software a usable, combinable part of a computer; easy or not, the extra step is essential. Moreover, many tools may be used easily and inexpensively to generate the parts
of a device. Those tools are not, however, ―components‖ of the devices in which the parts are incorporated, at least not under any ordinary understanding of the term ―component.‖ Congress might have included within §271(f)‘s compass, for example, not only a patented invention‘s combinable ―components,‖ but also ―information, instructions, or tools from which those components readily may be generated.‖ It did not. (b) Microsoft did not ―suppl[y] … from the United States‖ the foreign -made copies of Windows installed on the computers here involved. Under a conventional reading of §271(f)‘s text, those copies were ―supplie[d]‖ from outside the United States. The Federal Circuit majority concluded, however, that for software components, the act of copying is subsumed in the act of supplying. A master sent abroad, the majority observed, differs not at all from exact copies, generated easily, inexpensively, and swiftly from the master. Hence, sending a single copy of software abroad with the intent that it be replicated invokes §271(f) liability for the foreign-made copies. He further observed that the only true difference between software components and physical components of other patented inventions is that copies of software are easier to make and transport.
Under §271(f)‘s text, the very components supplied from the United States, and not foreign -made copies thereof, trigger liability when combined abroad to form the patented invention at issue. While copying software abroad is indeed easy and inexpensive, the same can be said of other items, such as keys copied from a master. Section 271(f) contains no instruction to gauge when duplication is easy and cheap enough to deem a copy in fact made abroad
nevertheless ―supplie[d] … from the United States.‖ The absence of anything addressing copying in the statutory text weighs against a judicial determination that replication abroad of a master dispatched from the United States ―supplies‖ the foreign -made copies from this country.
(c) Any doubt that Microsoft‘s conduct falls outside §271(f)‘s compass would be resolved by the presumption against extraterritoriality. Foreign conduct is generally the domain of foreign law, and in the patent area, that law may embody different policy judgments about the relative rights of inventors, competitors, and the public. Applied here, the presumption tugs strongly against construing §271(f) to encompass as a ―component‖ not only a physical
copy of software, but also software‘s intangible code, and to render ―supplie[d] … from the United States‖ not only exported copies of software, but also duplicates made abroad. Foreign law alone, not United States law, currently governs the manufacture and sale of components of patented inventions in foreign countries. If AT&T desires to prevent copying abroad, its remedy lies in obtaining and enforcing foreign patents. (d) While reading §271(f) to exclude from coverage foreign- made copies of software may create a ―loophole‖ in favor of software makers, the Court is not persuaded that dynamic judicial interpretation of §271(f) is in order; the ―loophole‖ is properly left for Congress to consider, and to cl ose if it finds such action warranted. Section 271(f) was a direct response to a gap in U. S. patent law revealed by Deepsouth Packing Co. v.Laitram Corp., 406 U. S. 518, where the items exported were kits containing all the physical, readily assemblable parts of a machine (not an intangible set of instructions), and those parts themselves (not foreign-made copies of them) would be combined abroad by foreign buyers. Having attended to that gap, Congress did not address other arguable gaps, such as the loophole AT&T describes.
Given the expanded extraterritorial thrust AT&T‘s reading of §271(f) entails, the patent -protective determination AT&T seeks must be left to Congress. Cf. Sony Corp. of America v.Universal City Studios, Inc., 464 U. S. 417, 431. Congress is doubtless aware of the ease with which electronic media such as software can be copied, and has not left the matter untouched. See the Digital Millennium Copyright Act, 17 U. S. C. §1201 et seq. If patent law is to be
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CONFLICT OF LAWS 2012-2013 adjusted better to account for the realities of software distribution, the alteration should be made after focused
legislative consideration, not by the Judiciary forecasting Congress‘ likely disposition. — oOo — BMW OF NORTH AMERICA, INC. v. GORE 517 US 559 (1996) JUSTICE STEVENS
FACTS:
Respondent Gore purchased a new BMW automobile from an authorized Alabama dealer, he discovered that the car had been repainted. He brought this suit for compensatory and punitive damages against petitioner, the American distributor of BMW's, alleging, inter alia, that the failure to disclose the repainting constituted fraud under Alabama law. At trial, BMW acknowledged that it followed a nationwide policy of not advising its dealers, and hence their customers, of pre delivery damage to new cars when the cost of repair did not exceed 3 percent of the car's suggested retail price. Gore's vehicle fell into that category. The jury returned a verdict finding BMW liable for compensatory damages of $4,000, and assessing $4 million in punitive damages. The trial judge denied BMW's posttrial motion to set aside the punitive damages award, holding, among other things, that the award was not "grossly excessive" and thus did not violate the Due Process Clause of the Fourteenth Amendment. The Alabama Supreme Court agreed, but reduced the award to $2 million on the ground that, in computing the amount, the jury had improperly multiplied Gore's compensatory damages by the number of similar sales in all States, not just those in Alabama. ISSUE:
Whether the $2 M punitive damages award to Gore exceed the constitutional limit. HELD:
The $2 million punitive damages award is grossly excessive and therefore exceeds the constitutional limit. Because such an award violates due process only when it can fairly be categorized as "grossly excessive" in relation to the State's legitimate interests in punishing unlawful conduct and deterring its repetition, the federal excessiveness inquiry appropriately begins with an identification of the state interests that such an award is designed to serve. Principles of state sovereignty and comity forbid a State to enact policies for the entire Nation, or to impose its own policy choice on neighboring States. Accordingly, the economic penalties that a State inflicts on those who transgress its laws, whether the penalties are legislatively authorized fines or judicially imposed punitive damages, must be supported by the State's interest in protecting its own consumers and economy, rather than those of other States or the entire Nation. Gore's award must therefore be analyzed in the light of conduct that occurred solely within Alabama, with consideration being given only to the interests of Alabama consumers. Three guideposts, each of which indicates that BMW did not receive adequate notice of the magnitude of the sanction that Alabama might impose, lead to the conclusion that the $2 million award is grossly excessive: 1. The harm BMW inflicted on Gore was purely economic; the presale repainting had no effect on the car's performance, safety features, or appearance; and BMW's conduct evinced no indifference to or reckless disregard for the health and safety of others. Gore's contention that BMW's nondisclosure was particularly reprehensible because it formed part of a nationwide pattern of tortious conduct is rejected, because a corporate executive could reasonably have interpreted the relevant state statutes as establishing safe harbors for nondisclosure of presumptively minor repairs, and because there is no evidence either that BMW acted in bad faith when it sought to establish the appropriate line between minor damage and damage requiring disclosure to purchasers, or that it persisted in its course of conduct after it had been adjudged unlawful. Finally, there is no evidence that BMW engaged in deliberate false statements, acts of affirmative misconduct, or concealment of evidence of improper motive. UNIVERSITY
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CONFLICT OF LAWS 2012-2013 2. Gore‘s $2 million award is 500 times the amount of his actual harm as determined by the jury, and there is no suggestion that he or any other BMW purchaser was threatened with any additional potential harm by BMW's nondisclosure policy. Although it is not possible to draw a mathematical bright line between the constitutionally acceptable and the constitutionally unacceptable that would fit every case, the ratio here is clearly outside the acceptable range. 3. $2 million is substantially greater than Alabama's applicable $2,000 fine and the penalties imposed in other States for similar malfeasance, and because none of the pertinent statutes or interpretive decisions would have put an out-of-state distributor on notice that it might be subject to a multimillion dollar sanction. Moreover, in the absence of a BMW history of noncompliance with known statutory requirements, there is no basis for assuming that a more modest sanction would not have been sufficient. — oOo — DOUGLAS SPECTOR, et al., PETITIONERS v. NORWEGIAN CRUISE LINE LTD Justice Kennedy FACTS:
Respondent NCL is a cruise line operating foreign flag ships departing from, and returning to, United States ports. The petitioners, disabled individuals and their companions who purchased tickets for round-trip NCL cruises from Houston, sued NCL under Title III of the Americans with Disabilities Act of 1990 (ADA), which prohibits discrimination based on disability in places of "public accommodation,‖ and in "specified public transportation services," and requires covered entities to make "reasonable modifications in policies, practices, or procedures" to accommodate disabled persons, and to remove "architectural barriers, and communication barriers that are
structural in nature" where such removal is "readily achievable.‖ Though holding Title III generally applicable, the
District Court found that the petitioners' claims regarding physical barriers to access could not go forward because the federal agencies charged with promulgating ADA architectural and structural guidelines had not done so for cruise ships. The court therefore dismissed the barrier-removal claims, but denied NCL's motion to dismiss the petitioners' other claims. The Fifth Circuit held that Title III does not apply to foreign-flag cruise ships in U.S. waters because of a presumption that absent a clear indication of congressional intent, general statutes do not apply to foreign-flag ships. Emphasizing that Title III does not contain a specific provision mandating its application to such vessels, the court sustained the dismissal of the petitioners' barrier-removal claims and reversed on their remaining claims. ISSUE:
Whether Title III of the Americans with Disabilities Act of 1990 (ADA), applies to foreign-flag cruise ships in United States waters. HELD:
Title III is applicable to foreign-flag cruise ships in US waters except insofar as it regulates a vessel‘s internal affairs. Justice Kennedy delivered an opinion concluding that except insofar as Title III regulates a vessel's internal affairs, the statute is applicable to foreign-flag cruise ships in U.S. waters. (a) Although the statutory definitions of ―public accommodation‖ and ―specified public transportation‖ do not expressly mention cruise ships, there can be no serious doubt that the NCL cruise ships in question fall within both definitions under conventional principles of interpretation. (b) Title III requires barrier removal if it is ―readily achievable.‖ The statute defines that term as ―easily
accomplishable and able to be carried out without much difficulty or expense.‖ Title III does not define ―difficulty‖, but use of the disjunctive–―easily accomplishable and able to be carried out without much diff iculty or expense‖– indicates that it extends to considerations in addition to cost. Furthermore, Title III directs that the ―readily achievable‖ determination take into account ―the impact upon the operation of the facility.‖ A barrier removal requirement under Title III that would bring a vessel into noncompliance with the International Convention for the Safety of Life at Sea (SOLAS), or any other international legal obligation, would create serious difficulties for the vessel and would have a substantial impact on its
operation, and thus would not be ―readily achievable.‖ Congress could not have intended this result. It is logical and proper to conclude, that whether a barrier modification is ―readily achievable‖ under Title III UNIVERSITY
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CONFLICT OF LAWS 2012-2013 must take into consideration the modification‘s effect on shipboard safety. A separate provision of Title III
mandates that the statute‘s non discrimination and accommodation requirements do not apply if disabled individuals would pose ―a significant risk to the health or safety of others that cannot be eliminated by a modification of policies, practices, or procedures or by the provision of auxiliary aids or services.‖ This reference is to a safety threat posed by a disabled individual, whereas here the question would be whether the structural modification itself may pose the safety threat. It would be incongruous, nevertheless, to attribute to Congress an intent to require modifications that threaten safety to others simply because the threat comes not from the disabled person but from the accommodation itself. (c) As a matter of international comity, a clear statement of congressional (clear statement rule) is necessary
before a general statutory requirement can interfere with matters that concern a foreign flag vessel‘s internal
affairs and operations. It is reasonable to presume congress intends no interference with matters that are primarily of concern only to the ship and the foreign state in which it s registered. It is also reason able to presume congress does not intend its statues to apply to entities in US territory that serve, employ, or otherwise affect American citizens, or that affect the peace and tranquillity of the US even if those entities happen to be foreign-flag ships. Cruise ships flying foreign flags of convenience but departing from and returning to US ports accommodate and transport over 7M US residents annually including large number of disabled individuals. To hold there is no Title III protection for the disabled would be harsh and unexpected interpretation of a statue designed to provide broad protection for them. (d) Plainly, most of the Title III violations alleged below--that NCL required disabled passengers to pay higher fares and special surcharges; maintained evacuation programs and equipment in locations not accessible to them; required them, but not other passengers, to waive any potential medical liability and to travel with companions; reserved the right to remove them from ships if they endangered other passengers' comfort; and, more generally, failed to make reasonable modifications necessary to ensure their full enjoyment of the services offered--have nothing to do with a ship's internal affairs. However, the petitioners' allegations concerning physical barriers to access on board--e.g., their assertion that most of NCL's cabins, including the most attractive ones in the most desirable locations, are not accessible to disabled passengers--would appear to involve requirements that might be construed as relating to internal ship affairs. The clear statement rule would most likely come into play if Title III were read to require permanent and significant structural modifications to foreign vessels. — oOo — PENNOYER v. NEFF 95 U.S. 714 (1878) Facts
Mitchell brought suit against Neff to recover unpaid legal fees. Mitchell published notice of the lawsuit in an Oregon newspaper but did not serve Neff personally. Neff failed to appear and a default judgment was entered against him. To satisfy the judgment Mitchell seized land owned by Neff so that it could be sol d at a Sheriff‘s auction. When the auction was held Mitchell purchased it and later assigned it to Pennoyer. Neff sued Pennoyer in federal district court in Oregon to recover possession of the property, claiming that the original judgment against him was invalid for lack of personal jurisdiction over both him and the land. The court found that the judgment in the lawsuit between Mitchell and Pennoyer was invalid and that Neff still owned the land. Pennoyer lost on appeal and the Supreme Court granted certiorari. ISSUE:
Can a state court exercise personal jurisdiction over a non-resident who has not been personally served while within the state and whose property within the state was not attached before the onset of litigation? HELD:
No. A court may enter a judgment against a non-resident only if the party: 1) is personally served with process while within the state, or 2) has property within the state, and that property is attached before litigation begins (i.e. quasi in rem jurisdiction).
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CONFLICT OF LAWS 2012-2013 Since the adoption of the Fourteenth Amendment, the validity of judgments may be directly questioned on the ground that proceedings in a court of justice to determine the personal rights and obligations of parties over whom that court has no jurisdiction do not constitute due process of law. Due process demands that legal proceedings be conducted according to those rules and principles which have been established in our systems of jurisprudence for the protection and enforcement of private rights. To give legal proceedings any validity, there must be a tribunal with legal authority to pass judgment, and a defendant must be brought within its jurisdiction by service of process within the state, or by his voluntary appearance. The substituted service of process by publication in actions brought against non-residents is valid only where property in the state is brought under the control of the court, and subjected to its disposition by process adapted to that purpose, or where the judgment is sought as a means of reaching such property or affecting some interest therein; in other words, where the action is in the nature of a proceeding in rem. The Oregon court did not have personal jurisdiction over Neff because he was not served in Oregon. The court‘s
judgment would have been valid if Mitchell had attached Neff‘s land at the beginning of the suit. Mitchell could not
have done this because Neff did not own the land at the time Mitchell initiated the suit. The default judgment was declared invalid. Therefore, the sheriff had no power to auction the real estate and title never passed to Mitchell. Neff was the legal owner.
— oOo — NORTHWEST ORIENT AIRLINES INC. v. COURT OF APPEALS 241 SCRA 192 (1995) Facts
Plaintiff Northwest Airlines and defendant C.F. Sharp & Company, 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 sued defendant 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 Tokyo District Court against defendant at its office at the Taiheiyo Building, 3rd floor, 132, Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture. The attempt to serve the summons was unsuccessful because the bailiff was advised that Mr. Dinozo, the person believed to be authorized to receive court processes was in Manila and would be back on April 24, 1980. The bailiff returned but Mr. Dinozo refused to accept the same claiming that he was no longer an employee of the defendant. After the two attempts, 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. 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. On August 28, 1980, defendant received from Deputy Sheriff the writ of summons. 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 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 received from Deputy Sheriff Balingit copy of the judgment. Defendant not having appealed the judgment, the same became final and executory. Plaintiff was unable to execute the decision in Japan, hence, a suit for enforcement of the judgment was filed by plaintiff before the RTC of Manila. Defendant filed its answer averring that the judgment of the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction having been rendered without due and proper notice to the defendant and/or with collusion or fraud and/or upon a clear mistake of law and fact.
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CONFLICT OF LAWS 2012-2013 Unable to settle the case amicably, the case was tried on the merits. After the plaintiff rested its case, defendant filed a Motion for Judgment on a Demurrer to Evidence based on two grounds: (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. Plaintiff filed its opposition after which the court a quo rendered the now assailed decision granting the demurrer motion and dismissing the complaint. ISSUE:
Whether or not 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 summons in Japan had failed. HELD:
Yes. 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. 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. Thus, it was incumbent upon SHARP to present evidence as to what the Japanese procedural law is and to show that under such, the assailed extraterritorial service is invalid. But it did not. And as such, the presumption of regularity and validity of the service of summons and the decision thereafter rendered by the Japanese court must stand. In light of the absence of proof regarding Japanese law, the presumption of identity or similarity or the socalled doctrine of processual presumption may be invoked. Applying it, the Japanese law will be deemed the same as the Philippine law regarding the service of summons on private foreign corporations doing business in the Philippines which is that 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. Nowhere in the pleadings of SHARP did it profess to having a resident agent authorized to receive the court processes in Japan. As such, the course of action made by Northwest is correct in coursing the summons through the diplomatic channels on the Philippine corporation at its principal office in Manila.
— oOo — ASIAVEST LIMITED vs. CA The plaintiff Asiavest Limited filed a complaint against the defendant Antonio Heras praying that said defendant be ordered to pay to the plaintiff the amounts awarded by the Hong Kong Court Judgment. The action filed in Hong Kong against Heras was in personam , since it was based on his personal guarantee of the obligation of the principal debtor. The trial court concluded that the Hong Kong court judgment should be recognized and given effect in this jurisdiction for failure of HERAS to overcome the legal presumption in favor of the foreign judgment. Asiavest moved for the reconsideration of the decision. It sought an award of judicial costs and an increase in attorney's fees with interest until full payment of the said obligations. On the other hand, Heras no longer opposed the motion and instead appealed the decision to CA. The Court of Appeals (CA) agreed with Heras that notice sent outside the state to a non-resident is unavailing to give jurisdiction in an action against him personally for money recovery. Summons should have been personally served on Heras in Hong Kong, ISSUE: Whether or not the judgment of the Hong Kong Court has been repelled by evidence of want of jurisdiction due to improper notice to the party
Asiavest cannot now claim that Heras was a resident of Hong Kong at the time since the stipulated fact that Heras "is a resident of New Manila, Quezon City, Philippines" refers to his residence at the time jurisdiction over his person was being sought by the Hong Kong court. Accordingly, since Heras was not a resident of Hong Kong and UNIVERSITY
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CONFLICT OF LAWS 2012-2013 the action against him was, ne in personam , summons should have been personally served on him in Hong Kong. The extraterritorial service in the Philippines was therefore invalid and did not confer on the Hong Kong court jurisdiction over his person. It follows that the Hong Kong court judgment cannot be given force and effect here in the Philippines for having been rendered without jurisdiction. On the same note, Heras was also an absentee,hence, he should have been served with summons in the same manner as a non-resident not found in Hong Kong. Section 17, Rule 14 of the Rules of Court providing for extraterritorial service will not apply because the suit against him was in personam . Neither can we apply Section 18, which allows extraterritorial service on a resident defendant who is temporarily absent from the country, because even if Heras be considered as a resident of Hong Kong, the undisputed fact remains that he left Hong Kong not only temporarily but for good
— oOo — BANCO DO BRASIL vs. THE COURT OF APPEALS Poro Point Shipping Services, then acting as the local agent of Omega Sea Transport Company of Honduras & Panama, a Panamanian Company (hereafter referred to as Omega), requested permission for its vessel M/V Star Ace, which had engine trouble, to unload its cargo.The customs personnel boarded the vessel when it docked on January 7, 1989, on suspicion that it was the hijacked M/V Silver Med owned by Med Line Philippines Co., and that its cargo would be smuggled into the country. customs collector seized said vessel and its cargo pursuant to Section 2301, Tariff and Customs Code. While seizure proceedings were ongoing, La Union was hit by three typhoons, and the vessel ran aground and was abandoned. On June 8, 1989, its authorized representative, Frank Cadacio, entered into salvage agreement with private respondent to secure and repair the vessel Finding that no fraud was committed, the District Collector of Customs, lifted the warrant of seizure on July 1989.However, then Customs Commissioner Salvador M. Mison declined to issue a clearance for Quiray’s Decision; instead, he forfeited the vessel and its cargo To enforce its preferred salvor’s lien, herein Private R espondent Duraproof Services filed with the Regional Trial Court of Manila a Petition for Certiorari , Prohibition and Mandamus.
On January 10, 1989, private respondent amended its Petitionto include former District Collector Quiray; PPA Port Manager Adolfo Ll. Amor, Jr.; x Vlason Enterprises as represented by its president, Vicente Angliongto; Singkong Trading Company as represented by Atty. Eddie Tamondong; Banco Du Brasil; Dusit International Co.; Thai-Nan Enterprises Ltd., and Thai-United Trading Co., Ltd. On April 10, 1991, petitioner Banco do Brasil filed, by special appearance, an Urgent Motion to Vacate Judgement and to Dismiss Caseon the ground that the February 18, 1991 Decision of the trial court is void with respect to it for having been rendered without validly acquiring jurisdiction over the person of Banco do Brasil. Petitioner subsequently amended its petitionto specifically aver that its special appearance is solely for the purpose of questioning the Court’s exercise of personal jurisdiction. ISSUE: Whether or not the court aquired jurisdiction over Banco do Brasil HELD:
Petitioner Banco do Brasil takes exception to the appellate court’s declaration that the suit below is in rem, not in personam,thus, service of summons by publication was sufficient for the court to acquire jurisdiction over the person of petitioner Banco do Brasil, and thereby liable to private respondent Cesar Urbino for damages claimed.
Petitioner avers that the action filed against it is an action for damages, as such it is an action in personam which requires personal service of summons be made upon it for the court to acquire jurisdiction over it. UNIVERSITY
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CONFLICT OF LAWS 2012-2013 However, inasmuch as petitioner Banco do Brasil is a non-resident foreign corporation, not engaged in business in the Philippines, unless it has property located in the Philippines which may be attached to convert the action into an action in rem, the court cannot acquire jurisdiction over it in respect of an action in personam. The petition bears merit, thus the same should be as it is hereby granted. In the instant case, private respondent’s suit against petitioner is premised on petitioner’s being one of the claimants of the subject vessel M/V Star Ace.Thus, it can be said that private respondent initially sought only to exclude petitioner from claiming interest over the subject vessel M/V Star Ace. However, private respondent testified during the presentation of evidence that, for being a nuisance defendant, petitioner caused irreparable damage to private respondent in the amount of $300,000.00.Therefore, while the action is in rem, by claiming damages, the relief demanded went beyond the res and sought a relief totally alien to the action.
It must be stressed that any relief granted in rem or quasi in rem actions must be confined to the res, and the court cannot lawfully render a personal judgment against the defendant.Clearly, the publication of summons effected by private respondent is invalid and ineffective for the trial court to acquire jurisdiction over the person of petitioner, since by seeking to recover damages from petitioner for the alleged commission of an injury to his person or propertycaused by petitioner’s being a nuisance defendant, private respondent’s action became in personam.
— oOo — REGNER vs. LOGARTA
— oOo — NM ROTHSCHILD AND SONS vs. LEPANTO On August 30, 2005, respondent Lepanto Consolidated Mining Company filed with the Regional Trial Court (RTC) of Makati City a Complaint against petitioner NMRothschild & Sons (Australia) Limited praying for a judgment declaring the loan and hedging contracts between the parties void for being contrary to Article 2018. The trial court authorized respondent’s counsel to personally bring the summons and Complaint to the Philippine Consulate General in Sydney, Australia for the latter office to effect service of summons on petitioner (defendant). On October 20, 2005, petitioner filed a Special Appearance With Motion to Dismiss[5] praying for the dismissal of the Complaint on the following grounds: (a) the court has not acquired jurisdiction over the person of petitioner due to the defective and improper service of summons; (b) the Complaint failed to state a cause of action and respondent does not have any against petitioner; (c) the action is barred by estoppel; and (d) respondent did not come to court with clean hands. On December 9, 2005, the trial court issued an Orderdenying the Motion to Dismiss.
Meanwhile, on December 28, 2006, the trial court issued an Order directing respondent to answer some of the questions in petitioner’s Interrogatories to Plaintiff dated September 7, 2006. Notwithstanding the foregoing, petitioner filed the present petition assailing resolution of the Court tha t the trial court committed grave abuse of discretion in not finding that it had not validly acquired jurisdiction over petitioner and that the plaintiff had no cause of action. ISSUE: Whether or not the court committed grave abuse of discretion in not finding that it had not validly acquired jurisdiction over petitioner and that the plaintiff had no cause of action. HELD:
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CONFLICT OF LAWS 2012-2013 The service of summons to petitioner through the DFA by the conveyance of the summons to the Philippine Consulate General in Sydney, Australia was clearly made not through the above-quoted Section 12, but pursuant to Section 15 of the same rule which provides: Sec. 15. Extraterritorial service. – When the defendant does not reside and is not found in the Philippines, and the action affects the personal status of the plaintiff or relates to, or the subject of which is property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 6; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer. Breaking down Section 15, Rule 14, it is apparent that there are only four instances wherein a defendant who is a non-resident and is not found in the country may be served with summons by extraterritorial service, to wit: (1) when the action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is property, within the Philippines, in which the defendant claims a lien or an interest, actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4) when the defendant non-resident's property has been attached within the Philippines. In these instances, service of summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient. Undoubtedly, extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if an action is in personam. When the case instituted is an action in rem or quasi in rem, Philippine courts already have jurisdiction to hear and decide the case because, in actions in rem and quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court, provided that the court acquires jurisdiction over the res. Thus, in such instance, extraterritorial service of summons can be made upon the defendant. The said extraterritorial service of summons is not for the purpose of vesting the court with jurisdiction, but for complying with the requirements of fair play or due process, so that the defendant will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff, and he can thereby take steps to protect his interest if he is so minded. On the other hand, when the defendant or respondent does not reside and is not found in the Philippines, and the action involved is in personam , Philippine courts cannot try any case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. The Complaint in the case at bar is an action to declare the loan and Hedging Contracts between the parties void with a prayer for damages. It is a suit in which the plaintiff seeks to be freed from its obligations to the defendant under a contract and to hold said defendant pecuniarily liable to the plaintiff for entering into such contract. It is therefore an action in personam, unless and until the plaintiff attaches a property within the Philippines belonging to the defendant, in which case the action will be converted to one quasi in rem.
— oOo — INTERNATIONAL SHOE v. STATE OF WASHINGTON 326 U.S. 310 (1945) [Stone, C.J.] Appellant is a Delaware corporation, having its principal place of business in St. Louis, Missouri. The corporation is engaged in the manufacture and sale of shoes and other footwear. During the years from 1937 to 1940, appellant employed eleven to thirteen salesmen whose primary tasks were to exhibit samples of merchandise and solicit orders from prospective buyers. These salesmen resided in Washington. In the course of business, they rented permanent sample rooms, in business buildings or temporary ones in hotels for exhibiting samples. UNIVERSITY
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CONFLICT OF LAWS 2012-2013 In accordance with Washington statutes requiring contributions to the state unemployment compensation funds from employers, appellee through its Commissioner issued an order and notice of assessment to collect from the appellant its contribution to said fund. Appellant moved to set aside the order and notice of assessment alleging among others that: the service upon appellant's salesman was not proper service upon appellant; that appellant was not a corporation of the State of Washington, and was not doing business within the state; that it had no agent within the state upon whom service could be made; and that appellant is not an employer, and does not furnish employment within the meaning of the statute. The motion was heard on evidence and a stipulation of facts by the appeal tribunal, which denied the motion and ruled that appellee Commissioner was entitled to recover the unpaid contributions. That action was affirmed by the Commissioner; both the Superior Court and the Supreme Court affirmed. ISSUE:
Whether appellant International Shoe, a Delaware corporation, has, by its activities in the State of Washington, rendered itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state unemployment compensation fund exacted by state statutes
HELD: Historically, the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence, his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that, in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."
The activities carried on in behalf of appellant in the State of Washington were neither irregular nor casual. They were systematic and continuous throughout the years in question. They resulted in a large volume of interstate business, in the course of which appellant received the benefits and protection of the laws of the state, including the right to resort to the courts for the enforcement of its rights. The obligation which is here sued upon arose out of those very activities. It is evident that these operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just, according to our traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which appellant has incurred there. Hence, we cannot say that the maintenance of the present suit in the State of Washington involves an unreasonable or undue procedure. We are likewise unable to conclude that the service of the process within the state upon an agent whose activities establish appellant's "presence" there was not sufficient notice of the suit, or that the suit was so unrelated to those activities as to make the agent an inappropriate vehicle for communicating the notice. It is enough that appellant has established such contacts with the state that the particular form of substituted service adopted there gives reasonable assurance that the notice will be actual.
— oOo — SHAFFER v. HEITNER, 433 U.S. 186 (1977) [Marshall, J.] Appellee Heitner, a nonresident of Delaware, is the owner of on e share of stock in the Greyhound Corp., a business incorporated under the laws of Delaware with its principal place of business in Phoenix, Ariz. Heitner filed a suit in the Court of Chancery naming as defendants Greyhound, its subsidiary Greyhound Lines, Inc., and 28 present and former officers both of the corporations alleging in essence that the individual defendants had violated their duties
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CONFLICT OF LAWS 2012-2013 which resulted in the corporations being held liable for damages in a private antitrust suit and a large fine in a criminal contempt action. Simultaneously with the filing of the complaint, Heitner filed a motion for an order of sequestration of the Delaware property of the individual defendants. Attached to the motion was an affidavit stating that the individual defendants were nonresidents of Delaware. The request for the sequestration order was approved and pursuant to that order, the sequestrator "seized" approximately 82,000 shares of Greyhound common stock belonging to the defendants. (Delaware was the situs of ownership of all stock in Delaware corporations.) The 21 defendants whose property was seized assailed the sequestration order contending that the ex parte sequestration procedure did not accord them due process of law and that the property seized was not capable of attachment in Delaware. In addition, appellants asserted that under the rule of International Shoe Co. v. Washington, 326 U.S. 310 (1945), they did not have sufficient contacts with Delaware to sustain the jurisdiction of that State's courts. The Court of Chancery rejected these arguments and held that the purpose of the sequestration was to compel the personal appearance of a nonresident defendant to answer and defend a suit brought against him in court. On appeal, the Delaware Supreme Court affirmed the judgment of the Court of Chancery.
ISSUE: Whether the presence of appellants' properties in Delaware vests the court of that State to take jurisdiction of a lawsuit by sequestering any property of the appellant located in the said State
HELD:
In order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising "jurisdiction over the interests of persons in the thing." The presence of property in a State may bear upon the existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation, as for example, when claims to the property itself are the source of the underlying controversy between the plaintiff and defendant, where it would be unusual for the State where the property is located not to have jurisdiction. But where, as in the instant quasi in rem action , the property now serving as the basis for state-court jurisdiction is completely unrelated to the plaintiff's cause of action, the presence of the property alone, i. e., absent other ties among the defendant, the State, and the litigation, would not support the State's jurisdiction. Though the primary rationale for treating the presence of property alone as a basis for jurisdiction is to prevent a wrongdoer from avoiding payment of his obligations by removal of his assets to a place where he is not subject to an in personam suit, that is an insufficient justification for recognizing jurisdiction without regard to whether the property is in the State for that purpose. Moreover, the availability of attachment procedures and the protection of the Full Faith and Credit Clause, also militate against that rationale.
— oOo — KULKO v. CALIFORNIA SUPERIOR COURT, 436 U.S. 84 (1978) [Marshall, J.] Appellant Ezra Kulko married appellee Sharon Kulko Horn during the former's three-day stopover in California en route from a military base in Texas to a tour of duty in Korea. Both parties were residents of New York State at the time of the marriage. Immediately following the marriage, the Kulkos returned to New York, where their children Darwin, and Ilsa, were born. The Kulkos resided together as a family in New York City until March 1972, when the spouses separated. Following the separation, a written separation agreement was drawn up in New York. The agreement provided, inter alia, that the children would remain with their father during the school year but would spend their Christmas, UNIVERSITY
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CONFLICT OF LAWS 2012-2013 Easter, and summer vacations with their mother. Ezra Kulko also agreed to pay his wife $3,000 per year in child support for the periods when the children were in her care, custody, and control. Immediately after execution of the separation agreement, Sharon Kulko flew to Haiti and successfully procured a divorce decree where said decree incorporated the terms of the agreement. She then returned to California, where she remarried and took the name Horn. Sometime in December 1973, before Ilsa was to leave New York to spend Christmas vacation with her mother, she told her father that she wanted to remain in California after her vacation. In January 1976, appellant's other child, Darwin, called his mother from New York and advised her that he wanted to live with her in California. Unknown to appellant, appellee Horn sent a plane ticket to her son, which he used to fly to California where he took up residence with his mother and sister. Less than one month after Darwin's arrival in California, appellee Horn commenced this action seeking to establish the Haitian divorce decree as a California judgment; to modify the judgment so as to award her full custody of the children; and to increase appellant's child-support obligations. Appellant moved for the quashal of the service of the summons on the ground that he was not a resident of California and lacked sufficient "minimum contacts" with the State under International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), to warrant the State's assertion of personal jurisdiction over him. The trial court denied the motion to quash, and appellant sought review in the California Court of Appeal which appellate court affirmed the denial of appellant's motion to quash, reasoning that, by consenting to his children's living in California, appellant had "caused an effect in the state" warranting the exercise of jurisdiction over him. The California Supreme Court sustained the rulings of the lower state courts. ISSUE: Whether, in this action for child support, the California state courts may exercise in personam jurisdiction over a nonresident, nondomiciliary parent of minor children domiciled within the State
HELD:
A defendant to be bound by a judgment against him must "have certain minimum contacts with [the forum State] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" ( International Shoe Co. v. Washington, supra, at 316, quoting Milliken v. Meyer, 311 U.S. 457, 463 . P. 92.) The acquiescence of appellant in his daughter's desire to live with her mother in California was not enough to confer jurisdiction over appellant in the California courts. ( Shaffer v. Heitner, 433 U.S. 186, 216 .)
Exercise of in personam jurisdiction over appellant was not warranted by the financial benefit appellant derived from his daughter's presence in California for nine months of the year, since any diminution in appellant's household costs resulted not from the child's presence in California but from her absence from appellant's home, and from appellee's failure to seek an increase in support payments in New York. The "effects" rule that the California courts applied is intended to reach wrongful activity outside of the forum State causing injury within the State where such application would not be "unreasonable," but here, where there is no claim that appellant visited physical injury on either property or persons in California; where the cause of action arises from appellant's personal, domestic relations; and where the controversy arises from a separation that occurred in New York, and modification is sought of a contract negotiated and signed in New York that had virtually no connection with the forum State, it is "unreasonable" for California to assert personal jurisdiction over appellant. Since appellant remained in the State of marital domicile and did no more than acquiesce in the stated preference of his daughter to live with her mother in California, basic considerations of fairness point decisively to appellant's State of domicile as the proper forum for adjudicating this case, whatever be the merits of appellee's underlying claim UNIVERSITY
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— oOo — BURNHAM v. SUPERIOR COURT OF CAL., MARIN COUNTY, 495 U.S. 604 (1990) [Scalia, J.] Petitioner Dennis Burnham married Francie Burnham in West Virginia. The couple moved to New Jersey, where their two children were born. Sometime in July 1987, the Burnhams decided to separate. Petitioner filed for divorce in New Jersey state court on grounds of "desertion." However, he did not obtained an issuance of summons against his wife and did not attempt to serve her with process. Mrs. Burnham also brought suit for divorce in California state court on the ground of "irreconcillable differences". They agreed that Mrs. Burnham, who intended to move to California, would take custody of the children. In late January, petitioner visited his children in the San Francisco Bay area, where his wife resided. Upon returning his eldest child to Mrs. Burnham's home, petitioner was served with a California court summons and a copy of Mrs. Burnham's divorce petition. Petitioner assailed the service of summons on the ground that the court lacked personal jurisdiction over him because his only contacts with California were a few short visits to the State for the purposes of conducting business and visiting his children.The California Superior Court denied the motion. The California Court of Appeal affirmed the denial reasoning that there was a valid jurisdictional predicate for in personam jurisdiction because the defendant [was] present in the forum state and personally served with process.
ISSUE: Whether the Due Process Clause (of the Fourteenth Amendment) denies California courts jurisdiction over a nonresident, who was personally served with process while temporarily in that State, in a suit unrelated to his activities in the State.
HELD:
Due Process Clause does not deny a State's courts jurisdiction over a nonresident, who was personally served with process while temporarily in that State, in a suit unrelated to his activities in the State. Reliance solely on historical precedent is foreclosed by International Shoe Co. v. Washington, 326 U.S. 310, 316 , and Shaffer v. Heitner, 433 U.S. 186, 212 , which demonstrate that all rules of state-court jurisdiction, even ancient ones such as transient jurisdiction, must satisfy contemporary notions of due process. The transient jurisdiction rule will generally satisfy due process requirements . Tradition, although alone not dispositive, is relevant because the fact that American courts have announced the rule since the latter part of the 19th century provides a defendant voluntarily present in a particular State today with clear notice that he is subject to suit in that forum. Thus, the rule is consistent with reasonable expectations and is entitled to a strong presumption that it comports with due process. Moreover, by visiting the forum State, a transient defendant actually avails himself of significant benefits provided by the State: police, fire, and emergency services, the freedom to travel its roads and waterways, the enjoyment of the fruits of its economy, the protection of its laws, and the right of access to its courts. Without transient jurisdiction, the latter right would create an asymmetry, since a transient would have the full benefit of the power of the State's courts as a plaintiff while retaining immunity from their authority as a defendant. Furthermore, the potential burdens on a transient defendant are slight in light of modern transportation and communications methods, and any burdens that do arise can be ameliorated by a variety of procedural devices.
— oOo — WORLD-WIDE VOLKSWAGEN CORP. ET AL. v. WOODSON, DISTRICT JUDGE OF CREEK COUNTY, OKLAHOMA, ET. AL. No. 78-1078, 21 January 1980, SUPREME COURT OF OKLAHOMA (White, J .)
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CONFLICT OF LAWS 2012-2013 A state court may exercise personal jurisdiction over a non-resident defendant only so long as there exist "minimum contacts" between the defendant and the forum State.
A products-liability action was instituted in an Oklahoma state court by respondents husband and wife to recover for personal injuries sustained in Oklahoma in an accident involving an automobile that had been purchased by them in New York while they were New York residents and that was being driven through Oklahoma at the time of the accident. The defendants included the automobile retailer and its wholesaler (petitioners), New York corporations that did no business in Oklahoma. Petitioners entered special appearances, claiming that Oklahoma's exercise of jurisdiction over them would offend limitations on the State's jurisdiction imposed by the Due Process Clause of the Fourteenth Amendment. The trial court rejected petitioners' claims, and they then sought, but were denied, a writ of prohibition in the Oklahoma Supreme Court to restrain respondent trial judge from exercising in personam jurisdiction over them. ISSUE:
Whether or not the Oklahoma trial court can exercise jurisdiction over petitioners. HELD:
Petition GRANTED. Consistently with the Due Process Clause, the Oklahoma trial court may not exercise in personam jurisdiction over petitioners. (a) A state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist "minimum contacts" between the defendant and the forum State. International Shoe Co. v. Washington, 326 U.S. 310 . The defendant's contacts with the forum State must be such that maintenance of the suit does not offend traditional notions of fair play and substantial justice, id., at 316, and the relationship between the defendant and the forum must be such that it is "reasonable . . . to require the corporation to defend the particular suit which is brought there," id., at 317. The Due Process Clause "does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations." Id., at 319. Pp. 291-294. (b) Here, there is a total absence in the record of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma; they close no sales and perform no services there, avail [444 U.S. 286, 287] themselves of none of the benefits of Oklahoma law, and solicit no business there either through salespersons or through advertising reasonably calculated to reach that State. Nor does the record show that they regularly sell cars to Oklahoma residents or that they indirectly, through others, serve or seek to serve the Oklahoma market. Although it is foreseeable that automobiles sold by petitioners would travel to Oklahoma and that the automobile here might cause injury in Oklahoma, "foreseeability" alone is not a sufficient benchmark for personal jurisdiction under the Due Process Clause. The foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State, but rather is that the defendant's conduct and connection with the forum are such that he should reasonably anticipate being haled into court there. Nor can jurisdiction be supported on the theory that petitioners earn substantial revenue from goods used in Oklahoma. — oOo —
ASAHI METAL INDUSTRY CO., LTD. v. SUPERIOR COURT OF CALIFORNIA, SOLANO COUNTY (CHENG SHIN RUBBER INDUSTRIAL CO., LTD., REAL PARTY IN INTEREST) No. 85-693, 24 February 1987, SUPREME COURT OF CALIFORNIA (O'Connor, J .) The procedural and substantive policies of other nations whose interests are affected by the forum State's assertion of jurisdiction over an alien defendant must be taken into account, and great care must be exercised when considering personal jurisdiction in the international context.
Petitioner manufactures tire valve assemblies in Japan and sells them to several tire manufacturers, including Cheng Shin Rubber Industrial Co. (Cheng Shin). The sales to Cheng Shin, which amounted to at least 100,000 assemblies annually from 1978 to 1982, took place in Taiwan, to which the assemblies were shipped from Japan. Cheng Shin incorporates the assemblies into its finished tires, which it sells throughout the world, including the United States, where 20 percent of its sales take place in California. Affidavits indicated that petitioner was aware that tires incorporating its assemblies would end up in California, but, on the other hand, that it never contemplated that its sales to Cheng Shin in Taiwan would subject it to lawsuits in California. Nevertheless, in 1979, a product liability suit was brought in California Superior Court arising from a motorcycle accident allegedly caused by defects in a tire manufactured by Cheng Shin, which in turn filed a cross-complaint seeking indemnification from petitioner. Although the main suit was eventually settled and dismissed, the Superior Court denied petitioner's motion to quash the summons issued against it. The State UNIVERSITY
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CONFLICT OF LAWS 2012-2013 Court of Appeal then ordered that the summons be quashed, but the State Supreme Court reversed, finding that petitioner's intentional act of placing its assemblies into the stream of commerce by delivering them to Cheng Shin in Taiwan, coupled with its awareness that some of them would eventually reach California, were sufficient to support state court jurisdiction under the Due Process Clause. ISSUE:
Whether or not the California court can exercise jurisdiction over petitioners. HELD:
Petition GRANTED. The judgment is reversed, and the case is remanded. The state court's exercise of personal jurisdiction over petitioner would be unreasonable and unfair in violation of the Due Process Clause. (a) The burden imposed on petitioner by the exercise of state court jurisdiction would be severe, since petitioner would be required not only to traverse the distance between Japan and California, but also to submit [480 U.S. 102, 103] its dispute with Cheng Shin to a foreign judicial system. Such unique burdens should have significant weight in assessing the reasonableness of extending personal jurisdiction over national borders. (b) The interests of Cheng Shin and the forum State in the exercise of jurisdiction over petitioner would be slight, and would be insufficient to justify the heavy burdens placed on petitioner. The only surviving question is whether a Japanese corporation should indemnify a Taiwanese corporation on the bases of a sale made in Taiwan and a shipment of goods from Japan to Taiwan. The facts do not demonstrate that it would be more convenient for Cheng Shin to litigate its claim in California rather than in Taiwan or Japan, while California's interests are diminished by Cheng Shin's lack of a California residence and by the fact that the dispute is primarily about indemnity rather than the safety of consumers. While the possibility of being sued in California might create an additional deterrent to petitioner's manufacture of unsafe assemblies, the same effect would result from pressures placed on petitioner by Cheng Shin, whose California sales would subject it to state tort law. (c) The procedural and substantive policies of other nations whose interests are affected by the forum State's assertion of jurisdiction over an alien defendant must be taken into account, and great care must be exercised when considering personal jurisdiction in the international context. Although other nations' interests will differ from case to case, those interests, as well as the Federal Government's interest in its foreign relations policies, will always be best served by a careful inquiry into the reasonableness of the particular assertion of jurisdiction, and an unwillingness to find an alien defendant's serious burdens outweighed where, as here, the interests of the plaintiff and the forum State are minimal. — oOo —
INSURANCE CORPORATION OF IRELAND, LTD. v. COMPAGNIE DES BAUXITES DE GUINEE No. 81-440, 1 June 1982, UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT (White, J .) The requirement of personal jurisdiction may be intentionally waived, or, for various reasons, a defendant may be estopped from raising the issue.
Federal Rule of Civil Procedure 37(b)(2)(A) provides that a district court, as a sanction for failure to comply with discovery orders, may enter"[a]n order that the matters regarding which the [discovery] order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order." Asserting diversity jurisdiction, respondent, a Delaware corporation with its principal place of business in the Republic of Guinea, filed suit against various insurance companies in the United States District Court for the Western District of Pennsylvania to recover on a business interruption policy. When certain of the defendants (a group of foreign insurance companies, including petitioners) raised the defense of lack of personal jurisdiction, respondent attempted to use discovery in order to establish jurisdictional facts. After petitioners repeatedly failed to comply with the court's orders for production of the requested information, the court warned them that, unless they complied by a specified date, it would assume, pursuant to Rule 37(b)(2)(A), that it had personal jurisdiction. When petitioners again failed to comply, the court imposed the sanction, and the Court of Appeals affirmed, concluding that imposition of the sanction fell within the trial court's discretion under Rule 37(b)(2)(A) and that the sanction did not violate petitioners' due process rights. UNIVERSITY
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ISSUE:
Whether or not the court validly applied Rule 37(b)(2)(A). Yes. HELD:
Petition DENIED. Rule 37(b)(2)(A) may be applied to support a finding of personal jurisdiction without violating due process. Unlike subject matter jurisdiction, which is an Art. III as well as a statutory requirement, the requirement that a court have personal jurisdiction flows from the Due Process Clause and protects an individual liberty interest. Because it protects an individual interest, it may be intentionally waived, or, for various reasons, a defendant may be estopped from raising the issue. Due process is violated by a rule establishing legal consequences of a failure to produce evidence only if the defendant's behavior will not support the presumption that"the refusal to produce evidence material to the administration of due process was but an admission of the want of merit in the asserted defense." Hammond Packing Co. v. Arkansas, 212 U. S. 322, 212 U. S. 351. A proper application of Rule 37(b)(2)(A) will, as a matter of law, support such a presumption. The District Court did not abuse its discretion in applying Rule 37(b)(2)(A) in this case. The record establishes that imposition of the sanction here satisfied the Rule's requirements that the sanction be both "just" and specifically related to the particular "claim" that was at issue in the discovery order.
— oOo — VOLKSWAGENWERK AKTIENGESELLSCHAFT v. SCHLUNK, ADMINISTRATOR OF THE ESTATES OF SCHLUNK ET AL. No. 86-1052, 15 June 1988, APPELLATE COURT OF ILLINOIS, FIRST DISTRICT (O'Connor, J .) Service on a domestic agent is valid and complete under both state law and the Due Process Clause without an official transmission of documents abroad.
After his parents were killed in an automobile accident, respondent filed a wrongful death action in an Illinois court, alleging that defects in the automobile designed and sold by Volkswagen of America, Inc. (VWoA), in which the parents were driving, caused or contributed to their deaths. When VWoA's answer denied that it had designed or assembled the vehicle, respondent amended his complaint to add as a defendant petitioner here (VWAG), a German corporation which is the sole owner of VWoA. Respondent attempted to serve the amended complaint on VWAG by serving VWoA as VWAG's agent. Filing a special and limited appearance, VWAG moved to quash the service on the grounds that it could be served only in accordance with the Hague Service Convention, and that respondent had not complied with the Convention's requirements. The court denied the motion, reasoning that VWoA and VWAG are so closely related that VWoA is VWAG's agent for service of process as a matter of law, notwithstanding VWAG's failure or refusal to appoint VWoA formally as an agent. The court concluded that, because service was accomplished in this country, the Convention did not apply. The Appellate Court of Illinois affirmed, ruling that the Illinois long-arm statute authorized substituted service on VWoA, and that such service did not violate the Convention. ISSUE:
Whether or not there was a valid and complete service on VWAG by serving VWoA. Yes. HELD:
Petition DENIED. The Hague Service Convention does not apply when process is served on a foreign corporation by serving its domestic subsidiary which, under state law, is the foreign corporation's involuntary agent for service. (a) The service of process in this case is not covered by Article 1 of the Convention, which provides that the Convention "shall apply . . . where there is occasion to transmit a judicial . . . document for service abroad." "Service" means a formal delivery of documents that is legally sufficient to charge the defendant with notice of a pending action. Since the Convention does not itself prescribe a standard for determining the legal sufficiency of the delivery, the internal law of the forum state controls. Thus, where, as here, the forum state's law does not define the applicable method of UNIVERSITY
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CONFLICT OF LAWS 2012-2013 serving process as requiring the transmittal of [486 U.S. 694, 695] documents abroad, the Convention does not apply. This interpretation is consistent with the negotiating history and the general purposes of the Convention. One purpose of the Convention is to provide means to facilitate service of process abroad. The Convention implements this purpose by requiring each state to establish a central authority to assist in the service of process, and nothing in the present decision interferes with that requirement. Another purpose of the Convention is to assure foreign defendants adequate notice. The present decision does not necessarily advance this purpose, because it makes application of the Convention depend on the forum's internal law; however, it is unlikely that any country will draft its internal laws deliberately so as to circumvent the Convention in cases in which it would be appropriate to transmit judicial documents for service abroad. Furthermore, this decision does not prevent voluntary compliance with the Convention even when the forum's internal law does not so require, and such compliance can be advantageous. (b) VWAG's contention that service upon it was not complete until VWoA transmitted the complaint to it in Germany, and that this transmission "for service abroad" rendered the Convention applicable to the case under Article 1, is without merit. Where, as here, service on a domestic agent is valid and complete under both state law and the Due Process Clause without an official transmission of documents abroad, the inquiry ends and the Convention has no further implications. — oOo —
SOCIETE NATIONALE INDUSTRIELLE AEROSPATIALE v. UNITED STATES DISTRICT COURT
FACTS: The United States, France, and 15 other countries have acceded to the Hague Evidence Convention, which prescribes procedures by which a judicial authority in one contracting state may request evidence located in another. Plaintiffs brought suits in Federal District Court for personal injuries resulting from the crash of an aircraft built and sold by petitioners, two corporations owned by France. Petitioners answered the complaints without questioning the court's jurisdiction, and engaged in initial discovery without objection. However, when plaintiffs served subsequent discovery requests under the Federal Rules of Civil Procedure, petitioners filed a motion for a protective order, alleging that the Convention dictated the exclusive procedures that must be followed since petitioners are French and the discovery sought could only be had in France. A Magistrate denied the motion, and the Court of Appeals denied petitioners' mandamus petition (that the Hague procedure be used exclusively), holding, inter alia, that, when a district court has jurisdiction over a foreign litigant, the Convention does not apply even though the information sought may be physically located within the territory of a foreign signatory to the Convention. ISSUE: W/N the procedures set forth in the Convention deprived the federal district court of jurisdiction in employing discovery procedures under the federal rules. HELD: The Convention does not provide exclusive or mandatory procedures for obtaining documents and information located in a foreign signatory's territory. The Convention's plain language, as well as the history of its proposal and ratification by the United States, unambiguously supports the conclusion that it was intended to establish optional procedures for obtaining evidence abroad. Its preamble speaks in nonmandatory terms, specifying its purpose to "facilitate" discovery and to "improve mutual judicial cooperation." Similarly, its text uses permissive language, and does not expressly modify the law of contracting states or require them to use the specified procedures or change their own procedures. The Convention does not deprive the District Court of its jurisdiction to order, under the Federal Rules, a foreign national party to produce evidence physically located within a signatory nation.
2. The Court of Appeals erred in concluding that the Convention "does not apply" to discovery sought from a foreign litigant that is subject to an American court's jurisdiction. Although they are not mandatory, the Convention's procedures are available whenever they will facilitate the gathering of evidence, and "apply" in the sense that they are one method of seeking evidence that a court may elect to employ. 3. International comity does not require in all instances that American litigants first resort to Convention procedures before initiating discovery under the Federal Rules. In many situations, Convention procedures would be unduly time-consuming and expensive, and less likely to produce needed evidence than direct use of the Federal Rules. The concept of comity requires, in this context, a more particularized analysis of the respective interests of the foreign and requesting nations than a blanket "first resort" rule would generate. Thus, the determination whether to resort UNIVERSITY
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CONFLICT OF LAWS 2012-2013 to the Convention requires prior scrutiny in each case of the particular facts, sovereign interests, and likelihood that such resort will prove effective. The question presented in this case concerns the extent to which a federal district court must employ the procedures set forth in the Convention when litigants seek answers to interrogatories, the production of documents, and admissions from a French adversary over whom the court has personal jurisdiction.
— oOo — INTEL CORP. v. ADVANCED MICRO DEVICES, INC. FACTS: In 1964, pursuant to a recommendation by the Commission on International Rules of Judicial Procedure (Rules Commission), and as part of an endeavor to improve judicial assistance between the United States and foreign countries, Congress completely revised 28 U. S. C. §1782(a). In its current form, §1782(a) provides that a federal district court "may order" a person residing or found in the district to give testimony or produce documents "for use in a proceeding in a foreign or international tribunal ... upon the application of any interested person." The 1964 overhaul of §1782(a) deleted the prior law's words, "in any judicial proceeding pending in any court in a foreign country."
Respondent Advanced Micro Devices, Inc. (AMD), filed an antitrust complaint against petitioner Intel Corporation (Intel) with the Directorate-General for Competition (DG-Competition) of the Commission of the European Communities (Commission), alleging that Intel had violated European competition law. After the DGCompetition declined AMD's recommendation to seek documents Intel had produced in a private antitrust suit in an Alabama federal court, AMD petitioned the District Court for the Northern District of California under §1782(a) for an order directing Intel to produce those documents. The District Court concluded that §1782(a) did not authorize such discovery. The Ninth Circuit reversed and remanded with instructions to rule on the application's merits. The appeals court observed that §1782(a) includes matters before bodies of a quasi-judicial or administrative nature, and, since 1964, has contained no limitation to foreign proceedings that are "pending." A proceeding judicial in character, the Ninth Circuit noted, was a likely sequel to the Commission investigation. The Court of Appeals rejected Intel's argument that §1782(a) called for a threshold showing that the documents AMD sought, if located in the European Union, would have been discoverable in the Commission investigation. Nothing in §1782(a)'s language or legislative history, the Ninth Circuit said, required a "foreign-discoverability" rule of that order. ISSUE: W/N the District Court may provide discovery aid to AMD. HELD: Section 1782(a) authorizes, but does not require, the District Court to provide discovery aid to AMD. Section 1782(a)'s language, confirmed by its context, warrants the conclusion that the provision authorizes, but does not require, a federal district court to provide assistance to a complainant in a Commission proceeding that leads to a dispositive ruling. The Court therefore rejects the categorical limitations Intel would place on the statute's reach.
A complainant before the Commission, such as AMD, qualifies as an "interested person" within §1782(a)'s compass. Section 1782(a) plainly reaches beyond the universe of persons designated "litigant." With significant participation rights in Commission proceedings, the complainant qualifies as an "interested person" within any fair construction of that term. The assistance AMD seeks meets §1782(a)'s specification "for use in a foreign or international tribunal." The Commission qualifies as a "tribunal" when it acts as a first-instance decisionmaker. Both the Court of First Instance and the European Court of Justice are tribunals, but not proof-takers. Their review is limited to the record before the Commission. Hence, AMD could "use" evidence in those reviewing courts only by submitting it to the Commission in the current, investigative stage. In adopting the Rules Commission's recommended replacement of the term "any judicial proceeding" with the words "a proceeding in a foreign or international tribunal," Congress opened the way for judicial assistance in foreign administrative and quasi-judicial proceedings. This Court has no warrant to exclude the Commission, to the extent that it acts as a first-instance decisionmaker, from §1782(a)'s ambit. The "proceeding" for which discovery is sought under §1782(a) must be within reasonable contemplation, but need not be "pending" or "imminent." Since the 1964 revision, which deleted the prior law's reference to "pending," Congress has not limited judicial assistance under §1782(a) to "pending" adjudicative proceedings. This UNIVERSITY
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CONFLICT OF LAWS 2012-2013 Court presumes that Congress intends its statutory amendments to have real and substantial effect. The 1964 revision's legislative history corroborates Congress' recognition that judicial assistance would be available for both foreign proceedings and investigations. Section 1782(a) does not impose a foreign-discoverability requirement. Although §1782(a) expressly shields from discovery matters protected by legally applicable privileges, nothing in §1782(a)'s text limits a district court's production-order authority to materials discoverable in the foreign jurisdiction if located there. Nor does the legislative history suggest that Congress intended to impose a blanket foreign-discoverability rule on §1782(a) assistance. While comity and parity concerns may be legitimate touchstones for a district court's exercise of discretion in particular cases, they do not warrant construction of §1782(a)'s text to include a generally applicable foreign-discoverability rule. Moreover, the Court questions whether foreign governments would be offended by a domestic prescription permitting, but not requiring, judicial assistance. A foreign nation may limit discovery within its domain for reasons peculiar to its own legal practices, culture, or traditions; such reasons do not necessarily signal objection to aid from United States federal courts. A foreign tribunal's reluctance to order production of materials present in the United States similarly may signal no resistance to the receipt of evidence gathered pursuant to §1782(a). When the foreign tribunal would readily accept relevant information discovered in the United States, application of a categorical foreign-discoverability rule would be senseless. Concerns about parity among adversaries in litigation likewise provide no sound basis for a cross-the-board foreign-discoverability rule. When information is sought by an "interested person," a district court can condition relief upon reciprocal information exchange. Moreover, the foreign tribunal can place conditions on its acceptance of information, thereby maintaining whatever measure of parity it deems appropriate. Section 1782 is a provision for assistance to tribunals abroad. It does not direct United States courts to engage in comparative analysis to determine whether analogous proceedings exist here. Comparisons of that order can be fraught with danger. For example, the United States has no close analogue to the Commission regime, under which AMD lacks party status and can participate only as a complainant.
— oOo — DULAY v. DULAY FACTS: Rodrigo Dulay is a naturalized American citizen. His brother Godofredo and nephew Pfeger (son of Godofredo) immigrated to the US. Godofredo decided to return to the Philippines and Pfeger stayed to take care of his uncle. Having nurtured affection and trust for his nephew, Rodrigo opened an account with the bank of Boston with a deposit of $ 230k with Pfeger as the trustee. Pfeger left his uncle and went on a spending spree. Upon knowing this Rodrigo checked the status of his account which Pfeger already emptied within the span of 6 months. Pfeg er denied Rodrigo‘s accusations saying that he spent his own money.
Rodrigo filed a petition for the issuance of letters rogatory in order to get the depositions of several witnesses residing abroad. Petitioners, on the other hand, moved to be allowed to file cross-examination questions
to respondent‘s written interrogatories, which the trial court granted. Petitioners filed a motion to dismiss the complaint on the ground of failure to prosecute which was denied by the trial court. As it turned out, however, the depositions could not be taken before the Clerk of Court of Massachusetts, but were taken instead before a notary public in New York which he thereafter authenticated with a Philippine consul in US upon order of the trial court. Petitioners filed an Omnibus Motion , praying that the written interrogatories be declared inadmissible and reiterating their prayer for the dismissal of the complaint which was denied by the trial court on the ground that there was substantial compliance with the Rules of Court. ISSUE: W/N the documents submitted by Rodrigo were not taken in substantial compliance with the directive of the trial court itself but in violation of Sections 11, 12, and 14, Rule 23 of the Rules of Court. HELD: While the letters rogatory issued by the trial court specifically directed the Clerk of Court of Boston to take the depositions needed in the case, it became impossible to follow the directive since the Clerk of Court of Boston merely brushed it aside and refused to cooperate. Respondent cannot be faulted for the resultant delay brought UNIVERSITY
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CONFLICT OF LAWS 2012-2013 about by this circumstance. Neither can the trial court be faulted for allowing the admission of the depositions taken not in strict adherence to its original directive, nor for directing the petitioner to have the depositions authenticated. Obviously, it was not within the trial court‘s power, much less the respondent‘s to force the Clerk of Court of Boston to have the deposition taken before it. It would be illogical and unreasonable to expect respondent to comply with the letters rogatory without the cooperation of the very institution or personality named in the letters rogatory and requested to examine the witnesses. After all, while a court had the authority to entertain a discovery request, it is not required to provide judicial assistance thereto. This reality was recognized by the trial court when it ordered respondent to have the questioned depositions authenticated by the Philippine consulate. More importantly, the Court finds that respondent substantially complied with the requirements for depositions taken in foreign countries. In our jurisdiction, depositions in foreign countries may be taken: (a) on notice before a secretary of embassy or legation, consul general, consul, vice consul, or consular agent of the Republic of the Philippines; (b) before such person or officer as may be appointed by commission or under letters rogatory; or (c) before any person authorized to administer oaths as stipulated in writing by the parties. While letters rogatory are requests to foreign tribunals, commissions are directives to officials of the issuing jurisdiction. Generally, a commission is an instrument issued by a court of justice, or other competent tribunal, directed to a magistrate by his official designation or to an individual by name, authorizing him to take the depositions of the witnesses named therein, while a letter rogatory is a request to a foreign court to give its aid, backed by its power, to secure desired information. Commissions are taken in accordance with the rules laid down by the court issuing the commission, while in letters rogatory, the methods of procedure are under the control of the foreign tribunal. In the instant case, the authentication made by the consul was a ratification of the authority of the notary public who took the questioned depositions. The deposition was, in effect, obtained through a commission, and no longer through letters rogatory. With the ratification of the depositions in issue, there is no more impediment to their admissibility. — oOo — NAVIDA v. DIZON JR FACTS: Navida et. al. filed for damages against Shell Oil, Dow chemicals, Occidental Chemicals, Dole food, Chiquita Brands, and Del Monte tropical fruit co. for injuries and illness due to exposure to dibromochlropropane (DBCP), which is used to kill worms, while working in Banana plantations. They blame said companies for negligence in producing, using, and selling DBCP containing products. said personal injury suits was first filed in different Texas state courts by Citizens of twelve foreign countries including the Philippines. however, the defendants in the consolidated cases prayed fro the dismissal of all the actions under the doctrine of forum non conveniens which the Federal District Court conditionally granted said motion to dismiss saying that notwithstanding the said dismissal, in the event the highest court of any foreign country finally affirms the dismissal for lack of jurisdiction of these actions they may return to the said federal courts and upon proper motion the court will resume jurisdiction over the action as if it was never dismissed.
In accordance with said order of the Federal court Navida et al filed a case with RTC of General Santos. Said court however, withour resolving the motions filed by the parties, issued an order dismissing the complaint on lack of jurisdiction saying further that the filing of the case in US divested the RTC of its own jurisdiction since the district court did not decline jurisdiction over the cause of action and it was dismissed on the ground of forum non conveniens which is really a matter of venue; that taking cognizance of the case the US district court has, in essence, concurrent jurisdiction and the acquisition of which divest another of its own jurisdiction. Another case was also filed in the RTC of Davao City by Abella et al similar to the complaint of Navida et al which was also dismissed by said court saying that the cause of action accrued abroad (since the products were made abroad) and that the Philippine courts are not the proper tribunal, relying on the opinions of legal experts (includes Justice Demetria. retired SC justice Sarmiento, and retired high court justice Nocom) in an interview made by inquirer, and as such said actions would not prosper here. ISSUE: W/N RTC of General Santos and Davao City erred in dismissing the cases for lack of jurisdiction.
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CONFLICT OF LAWS 2012-2013 HELD: Said RTCs have jurisdiction over the case at hand. The rule is settled that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiffs are entitled to all or some of the claims asserted therein. Once vested by law, on a particular court or body, the jurisdiction over the subject matter or nature of the action cannot be dislodged by anybody other than by the legislature through an enactment of law. at the time of the filing of the complaints, the jurisdiction for the claim of damages by the plaintiffs is with the RTC. Jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint, irrespective of whether or not the plaintiffs are entitled to recover upon all or some of the claims asserted therein it cannnot be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost entirely depend upon the defendants. Where the factual allegations in the amended joint-complaints all point to their cause of action, which undeniably occurred in the Philippines, it is error on the part of the courts a quo to dismiss the cases on the ground of lack of jurisdiction on the mistaken assumption that the cause of action narrated by the plaintiffs tool place abroad and had occurred outside and beyond the territorial boundaries of the Philippines. Furthermore, the defendant companies submitted themselves to the jurisdiction of the courts a quo by making several voluntary appearances, by praying for various affirmative reliefs, and by actively participating during the course of the proceedings below. in fact, none of the parties actually contended that the RTCs in question do not have jurisdiction. The Court explained that "jurisdiction" is different from "exercise of jurisdiction" - jurisdiction refers to the authority to decide a case, no the orders or the decision rendered therein, and any error that the court may commit in the exercise of its jurisdiction is merely an error of judgment, which does not affect its authority to decide the case, much less divest the court of the jurisdiction over the case. — oOo —
C. FORUM NON CONVENIENS GULF OIL CORP., petitioner-defendant , v. GILBERT, respondent-plaintiff, 330 U.S. 501 (1947) (J. Jackson) A federal district court has power to dismiss an action at law pursuant to the doctrine of forum non conveniens -- at least where its jurisdiction is based on diversity of citizenship and the state courts have such power. Facts
Respondent-plaintiff brought this action in the Southern District of New York, but resides at Lynchburg, Virginia, where he operated a public warehouse. He alleges that the petitioner-defendant, in violation of the ordinances of Lynchburg, carelessly handled a delivery of gasoline to his warehouse tanks and pumps as to cause an explosion and fire which consumed the warehouse building. The action clearly is one in tort. The petitioner-defendant is a corporation organized under the laws of Pennsylvania, qualified to do business in both Virginia and New York. When sued in New York, the defendant, invoking the doctrine of forum non conveniens, claimed that the appropriate place for trial is Virginia, where the plaintiff lives and defendant does business, where all events in litigation took place, where most of the witnesses reside, and where both state and federal courts are available to plaintiff, and are able to obtain jurisdiction of the defendant. The United States District Court dismissed the action and considered that the law of New York as to forum non conveniens applied, and that it required the case to be left to Virginia courts. The same is in keeping with the the character of its jurisdiction and the holdings of and under Erie Railroad Co. v. Tompkins (304 U. S. 64). The Circuit Court of Appeals disagreed as to the applicability of New York law, took a restrictive view of the application of the entire doctrine in federal courts, and, one judge dissenting, reversed the same. Issue
The questions are whether the United States District Court has inherent power to dismiss a suit pursuant to the doctrine of forum non conveniens and, if so, whether that power was abused in this case. Held
CA judgement is reversed.
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CONFLICT OF LAWS 2012-2013 The District Court did not exceed its powers or the bounds of its discretion in dismissing plaintiff's complaint and remitting him to the courts of his own community. The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute. These statutes are drawn with a necessary generality, and usually give a plaintiff a choice of courts, so that he may be quite sure of some place in which to pursue his remedy. Many of the states have met misuse of venue by investing courts with a discretion to change the place of trial on various grounds, such as the convenience of witnesses and the ends of justice. [However], (t)he federal law contains no such express criteria to guide the district court in exercising its power. x x x (I)t has not been attempted to catalogue the circumstances which will justify or require either grant or denial of remedy. The doctrine leaves much to the discretion of the court x x x. [However], (i)mportant considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action, and all other practical problems that make trial of a case easy, expeditious, and inexpensive. There may also be questions as to the enforceability of a judgment if one is obtained. The court will weigh relative advantages and obstacles to f air trial. Factors of public interest also have place in applying the doctrine. Turning to the question whether this is one of those rather rare cases where the doctrine should be applied, we look first to the interests of the litigants. The plaintiff himself is not a resident of New York, nor did any event connected with the case take place there, nor does any witness with the possible exception of experts live there. No one connected with that side of the case save counsel for the plaintiff resides there x x x. The only justification for trial in New York advanced here is [as stated by the Court]: “ This Court can readily realize that an action of this type, involving as it does a claim for damages in an amount close to $400,000, is one which may stagger the imagination of a local jury which is surely unaccustomed to dealin g with amounts of such a nature x x x.” Defendant points out that not only the plaintiff, but every person who participated in the acts charged to be negligent, resides in or near Lynchburg. It also claims a need to interplead an alleged independent contractor which made the delivery of the gasoline and which is a Virginia corporation domiciled in Lynchburg, that it cannot interplead in New York. There also are approximately 350 persons residing in and around Lynchburg who stored with plaintiff the goods for the damage to which he seeks to recover. x x x Certainly to fix the place of trial at a point where litigants cannot compel personal attendance and may be forced to try their cases on deposition is to create a condition not satisfactory to court, jury, or most litigants x x x. If in federal court by reason of diversity of citizenship, the court would apply the law of its own state in which it is likely to be experienced. The course of adjudication in New York federal court might be beset with conflict of laws problems all avoided if the case is litigated in Virginia, where it arose.
— oOo — PIPER AIRCRAFT CO., petitioner , v. REYNO, respondent, 454 U.S. 235 (1981) 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. Facts
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CONFLICT OF LAWS 2012-2013 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. The pilot and all of the decedents' heirs and next of kin were Scottish subjects and citizens x x x. 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 S cotland. 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 x x x. 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 x x x and analyzing the "private interest factors" affecting the litigants' convenience and the "public interest factors" affecting the forum's convenience, 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 the District Court had abused its discretion in dismissing the action and determining that the trial should be held in Scotland. Held
CA judgement is reversed. The District Court did not abuse its discretion in weighing the private and public interests under the Gilbert analysis, and thereby determining that the trial should be held in Scotland. 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. Under Gilbert , dismissal will ordinarily be appropriate where trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice. If substantial weight were given to the possibility of an unfavorable change in law, however, dismissal might be barred even where trial in the chosen forum was plainly inconvenient, and the forum non conveniens doctrine would become virtually useless. Such an approach not only would be inconsistent with the purpose of the forum non conveniens doctrine, but also would pose substantial practical problems, requiring that trial courts determine complex problems in conflict of laws and comparative law, and increasing the flow into American courts of litigation by foreign plaintiffs against American manufacturers. In analyzing the private interest factors, the District Court did not act unreasonably in concluding that fewer evidentiary problems would be posed if the trial were held in Scotland, a large proportion of the relevant evidence being located there. [It] also correctly concluded that the problems posed by the petitioners' inability to implead potential Scottish third-party defendants -- the pilot's estate, the plane's owners, and the charter company -supported holding the trial in Scotland. The District Court's review of the factors relating to the public interest was also reasonable. Even aside from the question whether Scottish law might be applicable in part, all other public interest factors favor trial in Scotland, which has a very strong interest in this litigation. The accident occurred there, all of the decedents were Scottish, and apart from petitioners, all potential parties are either Scottish or English.
— oOo — SINOCHEM INTERNATIONAL CO. LTD. v. MALAYSIA INTERNATIONAL SHIPPING 549 U.S. 422 (March 5, 2007)
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CONFLICT OF LAWS 2012-2013 A district court has discretion to re spond at once to a defendant's forum non conveniens plea, and need not take up first any other threshold objection. In particular, a court need not resolve whether it has authority to adjudicate the cause (subject-matter jurisdiction) or per sonal jurisdiction over the defendant if it determines that, in any event, a foreign tribunal is plainly the more suitable ar biter of the merits of the case. ( J. Ginsburg) Facts
Petitioner Sinochem International Company Ltd. (“Sinochem”), a Chinese state -owned importer, contracted with Triorient Trading, Inc., a domestic corporation that is not a party to this suit, to purchase steel coils. Pursuant to the agreement, Triorient would receive payment under a letter of credit. Triorient then subchartered a vessel owned by respondent Malaysia International Shipping Corporation (“Malaysia International”), a Malaysian company, to transport the coils to China.
Subsequently, Sinochem petitioned the Guangzhou Admiralty Court in China for interim relief, i. e., preservation of a maritime claim against Malaysia International and the arrest of the vessel that carried the steel coils to China. In support of its petition, Sinochem alleged that the Malaysian company had falsely backdated the bill of lading. Said Chinese tribunal ordered the ship arrested the same day. Malaysia International contested the jurisdiction of the Chinese tribunal but said tribunal only rejected its jurisdictional objection. Malaysia International then filed the instant action against Sinochem in the United States District Court for the Eastern District of Pennsylvania, moving to dismiss the suit on several grounds, including, among others, the law on forum non conveniens. Given the proceedings ongoing in China, and the absence of cause "to second-guess the authority of Chinese law or the competence of [Chinese] courts," the District Court granted the motion to dismiss under the doctrine of forum non conveniens. The Court of Appeals for the Third Circuit held that the District Court could not dismiss the case under the forum non conveniens doctrine unless and until it determined definitively that it had both subject-matter jurisdiction over the cause and personal jurisdiction over the d efendant. Issue
Whether a district court must first conclusively establish its own jurisdiction before dismissing a suit on the ground of forum non conveniens. Held
Court of Appeals for t he Third Circuit’s judgement is reversed. A federal court has discretion to dismiss a case on the ground of forum non conveniens "when an alternative forum has jurisdiction to hear [the] case, and x x x trial in the chosen forum would establish x x x oppressiveness and vexation to a defendant x x x out of all proportion to plaintiff's convenience, or x x x the chosen forum [is] inappropriate because of considerations affecting the court's own administrative and legal problems." The common-law doctrine of forum non conveniens "has continuing application [in federal courts] only in cases where the alternative forum is abroad," x x x and perhaps in rare instances where a state or territorial court serves litigational convenience best. While the Steel Co. v. Citizens for Better Environment case confirmed that jurisdictional questions ordinarily must precede merits determinations in dispositional order, Ruhrgas held that there is no mandatory "sequencing of jurisdictional issues." A forum non conveniens dismissal "den[ies] audience to a case on the merits x x x," it is a determination that the merits should be adjudicated elsewhere. The Third Circuit recognized that forum non conveniens "is a non-merits ground for dismissal." A district court therefore may dispose of an action by a forum non conveniens dismissal, UNIVERSITY
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CONFLICT OF LAWS 2012-2013 bypassing questions of subject-matter and personal jurisdiction, when considerations of convenience, fairness, and judicial economy so warrant.
— oOo — PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, AND ATHONA HOLDINGS, N.V., petitioners , v. THE HONORABLE COURT OF APPEALS, 1488, Inc., Drago Daic, Ventura O. Ducat, Precioso R. Perlas, and William H. Craig, respondents. ( J. Mendoza) Facts
Private respondent Ventura O. Ducat obtained separate loans from petitioners Ayala International Finance Limited (“Ayala”) and Philsec Investment Corporation (“Philsec”). To facilitate the payment of the loans, 1488, Inc., through its president, private respondent Drago Daic, assumed Ducat’s obligation by selling to petitioner Athona Holdings, N.V. (“Athona”) a parcel of land in Harris County, Texas, U.S.A. while Philsec and Ayala extended a loan to Athona as initial payment of the purchase price. The balance was to be paid by means of a promissory note executed by Athona in favor of 1488, Inc. As Athona failed to pay the interest on the balance, the entire amount covered by the note became due and demandable. 1488, Inc. then sued petitioners in the United States for collection of sum of money and damages for breach of contract. Pending said case, petitioners filed a complaint for sum of money against private respondents in the RTC of Makati, alleging that private respondents committed fraud by selling the property at a price 400 percent more than its tr ue value. Private respondent Ducat moved to dismiss on the ground of, among others, forum non conveniens. The trial court granted said 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. On appeal, the Court of Appeals, however, only affirmed the trial court’s ruling on the ground that the case can be better tried and decided by the U.S. court, stating: “ The U.S. case and the case at bar arose from only one main transaction, and involve foreign elements, to wit: 1) the property subject matter of the sale is situated in Texas, U.S.A.; 2) the seller, 1488 Inc. is a non-resident foreign corporation; 3) although the buyer, Athona Holdings, a foreign corporation which does not claim to be doing business in the Philippines, is 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 the principle of forum non conveniens relied upon by the CA in affirming the dismissal by the trial court of the civil action is applicable in the case. Held
CA judgement is reversed. It was an error on the part of the trial court to refus(e) to take cognizance of the case and justifying the same under the principle of forum non conveniens. First, a motion to dismiss is limited to the grounds under Rule 16, Section 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 a bstain 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 w as the extinguishment of
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CONFLICT OF LAWS 2012-2013 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.
— oOo — THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD., petitioners, v.NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO G. SANTOS, respondents. G.R. No. 120077, October 13, 2000, [FIRST DIVISION, PARDO, J .]:
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.
FACTS:
On November 5, 1988, Marcelo Santos left for Beijing, China after he had resigned from his job as a printer in Mazoon Printing Press, Sultanate of Oman, to start to work at the Palace Hotel, Beijing China (Wang Fu Company Limited). Less than a year later, the Palace Hotel informed Santos by letter that his employment at the Palace Hotel print shop would be terminated due to business reverses brought about by the political upheaval in China.A month after, Palace Hotel formally terminated the employment of respondent Santos and paid all benefits due him, including his plane fare back to the Philippines. Santos filed a complaint for illegal dismissal with the Arbitration Branch, NRC, NLRC where he prayed for damages. The Palace Hotel and MHICL, the trainer of Palace Hotel personel, were not served with summons and neither participated in the proceedings before the Labor Arbiter, which decided against the Hotel. Petitioner appealed to the NLRC, arguing that the POEA, not the NLRC had jurisdiction over the case because Santos is an overseas contract worker, which Santos denies.
ISSUES: Whether or not NLRC is the convenient forum under the forum non-convienens principle.
HELD: The NLRC was a seriously inconvenient forum. Petition GRANTED.
We note that the main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the Philippines has with the case is that respondent Santos is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations. Not all cases involving our citizens can be tried here. 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. The conditions are unavailing in the case at bar. Respondent Santos was hired directly by the Palace Hotel, a foreign employer and without the intervention of the POEA or any authorized recruitment agency of the government. Moreover, the proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines, nor were they even summoned. Neither .are they "doing business in the Philippines." Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made). Neither can the NLRC determine the facts surrounding the alleged illegal UNIVERSITY
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CONFLICT OF LAWS 2012-2013 dismissal as all acts complained of took place in Beijing, People's Republic of China. The NLRC was not in a position to determine whether the Tiannamen Square incident truly adversely affected operations of the Palace Hotel as to justify respondent Santos' retrenchment. Even assuming that the NLRC was the proper forum, even on the merits, the NLRC's decision cannot be sustained.
— oOo — BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD., petitioners, v. COURT OF APPEALS, HON. MANUEL PADOLINA, EDUARDO LITONJUA, SR., and AURELIO K. LITONJUA, JR., respondents. G.R. No. 120135, March 31, 2003 [SECOND DIVISION, AUSTRIA-MARTINEZ, J .] The doctrine of forum non conveniens should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground.
FACTS:
Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas), engaged in shipping business filed a Complaint before the RTC Pasig against the Bank of America NT&SA and Bank of America International, Ltd. (defendant banks) where they deposit their revenues and where they loaned capital to purchase several more vessels. The possession of these vessels was placed by defendant banks in the hands of persons selected and designated by them (defendant banks), while all revenues went to the Litonjuas. Due to the breach of their fiduciary duties by the defendant banks in the operation of Litonjuas six vessels, the revenues derived from the operation of all the vessels declined drastically. The loans acquired for the purchase of the four additional vessels then matured and remained unpaid, prompting defendant banks to have all the vessels foreclosed and sold at public auction to answer for the obligations incurred for and in behalf of the operation of the vessels. The Litonjuas prayed for the accounting of the revenues derived in the operation of the six vessels and of the proceeds of the sale thereof at the foreclosure proceedings instituted by petitioners; damages for breach of trust; exemplary damages and attorney's fees. Defendant banks filed a Motion to Dismiss on grounds of forum non conveniens and lack of cause of action against them. ISSUE: Whether or not the complaint must be dismissed on the ground of forum non-conveniens ? HELD: No. Petition is DENIED for lack of merit.
The doctrine of forum non-conveniens , literally meaning 'the forum is inconvenient', emerged in private international law to deter the practice of global forum shopping, that is to prevent non-resident litigants from choosing the forum or place wherein to bring their suit for malicious reasons, such as to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. Under this doctrine, 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. However, though this case satisfies all the requisites for the application the doctrine of forum non conveniens, this principle should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground. This Court has also further ruled that 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; and that the propriety of dismissing a case based on this principle of forum non conveniens requires a factual determination, hence it is more properly considered a matter of defense.
— oOo —
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CONFLICT OF LAWS 2012-2013 CRESCENT PETROLEUM, LTD., Petitioner, v. M/V "LOK MAHESHWARI," THE SHIPPING CORPORATION OF INDIA, and PORTSERV LIMITED and/or TRANSMAR SHIPPING, INC., Respondents. G.R. No. 155014, November 11, 2005 [ SECOND DIVISION, PUNO, J .] To determine which jurisdiction’s law should be applied to a petitioner’s claim, we must apply the factors “Multiple Contact Test”: (1) place of the wrongful act; (2) law of the flag; (3) allegiance or domicile of the injured; (4) allegiance of the defendant shipowner; (5) place of contract; (6) inaccessibility of foreign forum; and (7) law of the forum.
FACTS:
Crescent Petroleum, Ltd. (Crescent), a Canadian corporation, delivered marine fuel oils (bunker fuels) to M/V "Lok Maheshwari" (Vessel), which is owned by Shipping Corporation of India (SCI), an Indian corporation, and time sub-chartered by Portserv Limited (Portserv), another Canadian corporation. Portserv issued checks to Crescent to pay for the fuel loaded unto the Vessel, but these checks bounced. While the Vessel was docked at the port of Cebu City, Crescent instituted before the RTC of Cebu City an action "for a sum of money with prayer for temporary restraining order and writ of preliminary attachment" against respondents Vessel and SCI/Portserv. ISSUE: Whether or not Crescent is entitled to a maritime lien under our laws (P.D. 1521). HELD: NO. The Decision and Resolution of the Court of Appeals is AFFIRMED.
In the Philippines any vessel – even though it be a foreign vessel – found in any port of this Archipelago may be attached and sold under the substantive law which defines the right, and the procedural law contained in the Code of Commerce by which this right is to be enforced. But where neither the law nor the contract between the parties creates any lien or charge upon the vessel, the only way in which it can be seized before judgment is by pursuing the remedy relating to attachment under Rule 59 [now Rule 57] of the Rules of Court . However, in Lauritizen v. Larsen , to determine which jurisdiction‘s law should be applied to a petitioner‘s claim, we must apply the factors ―Multiple Contact Test‖: (1) place of the wrongful act; (2) law of the flag; (3) allegiance or domicile of the injured; (4) allegiance of the defendant shipowner; (5) place of contract; (6) inaccessibility of foreign forum; and (7) law of the forum. Out of the seven basic factors listed in the case of Lauritzen, Philippine law only falls under one – the law of the forum. All other elements are foreign – Canada is the place of the wrongful act, of the allegiance or domicile of the injured and the place of contract; India is the law of the flag and the allegiance of the defendant shipowner. Balancing these basic interests, it is inconceivable that the Philippine court has any interest in the case that outweighs the interests of Canada or India for that matter. Also, P.D. No. 1521 is inapplicable following the factors under Restatement (Second) of Conflict of Laws. P.D. 1521 was enacted primarily to protect Filipino suppliers and was not intended to create a lien from a contract for supplies between foreign entities delivered in a foreign port. Moreover, applying P.D. No. 1521 to a foreign
corporation‘s claim would unduly open up our courts to foreign suppliers by granting them a maritime lien under our laws even if they are not entitled to a maritime lien under their laws will encourage forum shopping.
And finally, submission of petitioner is not in keeping with the reasonable expectation of the parties to the contract since the parties, upon execution of the perfection of the contract, could not have intended the laws of a remote
country like the Philippines to determine the creation of a lien by the mere accident of the Vessel‘s being in Philippine territory.
In light of the interests of the various foreign elements involved, it is clear that Canada has the most significant interest in this dispute. The injured party is a Canadian corporation, the sub-charterer which placed the orders for the supplies is also Canadian, the entity which physically delivered the bunker fuels is in Canada, the place of contracting and negotiation is in Canada, and the supplies were delivered in Canada.
— oOo — D. CHOICE, ASCERTAINMENT AND APPLICATION OF FOREIGN LAW KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., petitioners, v. MINORU KITAMURA, respondent. G.R. No. 149177, November 23, 2007, [THIRD DIVISION NACHURA, J.]
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When the only issue in this case is that of jurisdiction, choice-of-law rules such as lex loci celebrationis, lex contractus, the "state of the most significant relationship rule," or forum non conveniens.are not only inapplicable but also not yet called for.
FACTS:
Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical and management support in the infrastructure projects of foreign governments, entered into an Independent Contractor Agreement (ICA) with Minoru Kitamura, a Japanese national permanently residing in the Philippines. The agreement, which was executed in Japan, provides that respondent was to extend professional services to Nippon for a year. Nippon then assigned respondent to work as the project manager of the STAR Project in the Philippines. When the STAR Project was near completion, the DPWH en gaged the consultancy services of Nippon this time for the detailed engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project. Kitamura was named as the project manager. Later, Nippon informed Katamura that the company had no more intention of automatically renewing his ICA. Katamura tried to negotiate. As he was not able to generate a positive response from the petitioners, respondent consequently initiated a civil case for specific performance and damages with the RTC Lipa City. Nippon moved to dismiss the case by contending that the ICA had been perfected in Japan and executed by and between Japanese nationals and that therefore RTC Lipa had no jurisdiction. ISSUE: Whether the ―subject matter jurisdiction‖ of Philippine courts in civil cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis , lex contractus , the "state of the most significant relationship rule," or forum non conveniens . HELD: Petition for review on certiorari is DENIED.
In the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Invoking such principles is premature and are applicable only to the
―choice of law phase.‖ Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The question of whether the law of a state can be applied to a transaction (choice of law) is different from the question of whether the courts of that state have jurisdiction to enter a judgment (jurisdiction). In this case, only the first phase is at issue — jurisdiction. To succeed in its motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim, the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims. Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second phase, the choice of law. They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem. Necessarily, as the only issue in this case is that of jurisdiction, choice-oflaw rules are not only inapplicable but also not yet called for.
— oOo — NORSE-MANAGEMENT CO. v. NATIONAL SEAMEN BOARD EDI-STAFFBUILDERS INTERNATIONAL INC. v. NLRC HEIRS OF DECEASED SPOUSES ARCILLA v. TEODORO WILDVALLEY SHIPPING CO v. CA
— oOo — DEUTSCHE GESELLSCHAFT FŰR TECHNISCHE ZUSAMMENARBEIT v. COURT OF APPEALS G.R. No. 152318, April 16, 2009, SECOND DIVISION (Tinga, J.) UNIVERSITY
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In the absence of evidence to the contrary, foreign laws on a particular subject are presumed to be the same as tho se of the Philippines.
The Philippine government and the German government, agreed to an Arrangement in furtherance of the Technical Co-operation Agreement. This Arrangement affirmed the common commitment of both governments to promote jointly a project called, Social Health Insurance — Networking and Empowerment (SHINE), which was designed to "enable Philippine families – especially poor ones – to maintain their health and secure health care of sustainable quality." Both governments likewise named their respective implementing organizations for SHINE. The Philippines designated the DOH and the Philhealth with the implementation of SHINE. For their part, the German government "charged the Deustche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH, Eschborn, with the implementation of its contributions." Private respondents were engaged as contract employees hired by GTZ to work for SHINE. The employment contracts of all six private respondents all specified Dr. Rainer Tollkotter, identified as an adviser of GTZ, as the "employer", and that they were hired on behalf of GTZ and for SHINE which will end at a given time. Anne Nicolay, a Belgian national, assumed the post of SHINE Project Manager. Disagreements eventually arose between Nicolay and private respondents. The latter claimed that SHINE under Nicolay had veered away from its original purpose to facilitate the development of social health insurance by shoring up the national health insurance program and strengthening local initiatives, as Nicolay had refused to support local partners and new initiatives, and other similar allegations. The respondents threatened Nicolay with their resignation, but such was gladly welcomed by the latter by asking them to tender their letters of resignation as soon as possible. Taken aback, the respondents sought for negotiations, but such proved futile. Subsequently, each of the private respondents received a letter from Nicolay, informing them of the pre-termination of their contracts of employment on the grounds of "serious and gross insubordination, among others, resulting to loss of confidence and trust." Thereafter, private respondents filed a complaint for illegal dismissal with the NLRC. Named as respondents therein where GTZ, the Director of its Manila office Hans Peter Paulenz, its Assistant Project Manager Christian Jahn, and Nicolay. GTZ filed a Motion to Dismiss, on the ground that the Labor Arbiter had no jurisdiction over the case, as its acts were undertaken in the discharge of the governmental functions and sovereign acts of the Government of the Federal Republic of Germany. This was opposed by private respondents with the arguments that GTZ had failed to secure a certification that it was immune from suit from the Department of Foreign Affairs, and that it was GTZ and not the German government which had implemented the SHINE Project and entered into the contracts of employment. ISSUE: Whether NLRC has jurisdiction over GTZ HELD: The principle of state immunity from suit, whether a local state or a foreign state, is reflected in Section 9, Article XVI of the Constitution, which states that "the State may not be sued without its consent." Who or what consists of "the State"? For one, the doctrine is available to foreign States insofar as they are sought to be sued in the courts of the local State, necessary as it is to avoid "unduly vexing the peace of nations."
If the instant suit had been brought directly against the Federal Republic of Germany, there would be no doubt that it is a suit brought against a State, and the only necessary inquiry is whether said State had consented to UNIVERSITY
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CONFLICT OF LAWS 2012-2013 be sued. However, the present suit was brought against GTZ. It is necessary for us to understand what precisely are the parameters of the legal personality of GTZ. Counsel for GTZ characterizes GTZ as "the implementing agency of the Government of the Federal Republic of Germany," a depiction similarly adopted by the OSG. Assuming that characterization is correct, it does not automatically invest GTZ with the ability to invoke State immunity from suit.
GTZ‘s own website elicits that petitioner is "federally owned," a "federal enterprise," and "founded as a company under private law." At the same time, it appears that GTZ was actually organized not through a legislative public charter, but under private law, in the same way that Philippine corporations can be organized under the Corporation Code even if fully owned by the Philippine government. This self-description of GTZ in its own official websi te gives further cause for pause in adopting petitioners‘ argument that GTZ is entitled to immunity from suit because it is "an implementing agency." The above-quoted statement does not dispute the characterization of GTZ as an "implementing agency of the Federal Republic of Germany," yet it bolsters the notion that as a company organized under private law, it has a legal personality independent of that of the Federal Republic of Germany. It is entirely possible that under German law, an entity such as GTZ or particularly GTZ itself has not been vested or has been specifically deprived the power and capacity to sue and/or be sued. Yet in the pro ceedings below and before this Court, GTZ has failed to establish that under German law, it has not consented to be sued despite it being owned by the Federal Republic of Germany. We adhere to the rule that in the absence of evidence to the contrary, foreign laws on a particular subject are presumed to be the same as those of the Philippines, and following the most intelligent assumption we can gather, GTZ is akin to a governmental owned or controlled corporation without original charter which, by virtue of the Corporation Code, has expressly consented to be sued. At the very least, like the Labor Arbiter and the Court of Appeals, this Court has no basis in fact to conclude or presume that GTZ enjoys immunity from suit. — oOo — CADALIN v. POEA‘S ADMINISTRATOR G.R. No. L-104776, Dec. 5, 1994 (Quiason, J.) The courts of the forum will not enforce any foreign claims obnoxious to the forum’s public policy.
Bienvenido M. Cadalin, Rolando M. Amul and Donato B. Evangelista, in their own behalf and on behalf of 728 other overseas contract workers (OCWs) instituted a class suit by filing an "Amended Complaint" with the Philippine Overseas Employment Administration (POEA) for money claims arising from their recruitment by AIBC and employment by BRII. BRII 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. Cadalin et al. are overseas contract workers recruited by respondent-appellant AIBC for its accredited foreign principal, Brown & Root, on various dates from 1975 to 1983. As such, they were all deployed at various projects in several countries in the Middle East as well as in Southeast Asia, in Indonesia and Malaysia. Having been officially processed as overseas contract workers by the Philippine Government, all the individual complainants signed standard overseas employment contracts with AIBC before their departure from the Philippines. The case arose when their overseas employment contracts were terminated even before their expiration. Under Bahrain law, where some of the complainants were deployed, the prescriptive period for claims arising out of a contract of employment is one year. The respondents principally 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; refund of UNIVERSITY
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CONFLICT OF LAWS 2012-2013 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. ISSUE:
Whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law
HELD:
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 law. A law on prescription of actions is sui generis in Conflict of Laws in the sense that it m ay be viewed either as procedural or substantive, depending on the characterization given such a law. 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. Whil e 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.‖ Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedure as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure. In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex propio vigore insofar as it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976. The courts of the forum will not enforce any foreign claims 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.
— oOo — HOME INSURANCE CO. v. DICK 281 U.S. 397, May 5, 1930 ( Justice Brandeis ) Assuming that a state may properly refuse to recognize foreign rights that violate its declared policy, or restrict the conduct of persons within its limits, this does not mean that it may abrogate the rights of parties beyond its borders having no relation to anything done or to be done within them.
Dick, a citizen of Texas, brought an action in Texas against Compania General Anglo-Mexicana de Seguros S.A. a Mexican corporation, to recover on a policy of fire insurance for the total loss of a tug. Jurisdiction was asserted in rem through garnishment, by ancillary writs issued against the Home Insurance Company and Franklin Fire Insurance Company, which reinsured, by contracts with the Mexican corporation, parts of the risk which it had assumed. The garnishees are New York corporations. Upon them, service was effected by serving their local agents
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CONFLICT OF LAWS 2012-2013 in Texas appointed pursuant to Texas statutes, which require the appointment of local agents by foreign corporations seeking permits to do business within the state.
Dick‘s cause of action involved a contract of fire insurance issued by a Mexican company, made and to be performed in Mexico, and covered in part by reinsurance effected there or in New York with New York companies licensed to do business in Texas, which was assigned by the insured to Dick, a citizen of Texas, who was present in Mexico when the policy issued and continued to reside there until after a loss had occurred. He then returned to Texas and sued on the policy in a Texas Court naming the Mexican company, which was never present in Texas and did not appear, as principal defendant, and the two New York companies, because of their reinsurance liability, as garnishees. The policy stipulated that no suit should be brought under it unless within one year of the loss, but a defense based on this was overruled by the Texas Supreme Court, and recovery against the garnishees affirmed, by applying a Texas statute which forbade any agreement limiting the time for suit to a shorter period than two years. The defense rests upon the fact that the suit was not commenced till more than one year after the date of the loss. Whereas the policy provided that no suits shall be entered unless such suits or demands are filed within one year counted as from the date on which such damage occurs. This provision was in accord with the Mexican law to which the policy was expressly made subject. It was issued by the Mexican company in Mexico to one Bonner, of Tampico, Mexico, and was there duly assigned to Dick prior to the loss. It covered the vessel only in certain Mexican waters. The premium was paid in Mexico, and the loss was ―payable in the City of Mexico in current funds of the United S tates of Mexico, or their equivalent
elsewhere.‖ At the time the policy was issued, when it was assigned to him, and, until after the loss, Dick actually resided in Mexico, although his permanent residence was in Texas. The contracts of reinsurance were effected by correspondence between the Mexican company in Mexico and the New York companies in New York. Nothing thereunder was to be done, or was in fact done, in Texas. In the trial court, the garnishees contended that, since the insurance contract was made and was to be performed in Mexico, and the one-year provision was valid by its laws, Dick's failure to sue within one year after accrual of the alleged cause of action was a complete defense to the suit on the policy; that this failure also relieved the garnishees of any obligation as reinsurers, the same defense being open to them, and that they consequently owed no debt to the Mexican company subject to garnishment. To this defense, Dick demurred on the ground that Article 5545 of the Texas Revised Civil Statutes provides that: ―No person, firm, corporation, association or combination of whatsoever kind shall enter into any stipulation, contract, or agreement, by reason whereof the time in which to sue thereon is limited to a shorter period than two years. And no stipulation, contract, or agreement for
any such shorter limitation in which to sue shall ever be valid in this state.‖ ISSUE:
Whether Texas‘ two year prescriptive period may apply to a contract entered into and performed in Mexico. HELD: Doubtless a state may prohibit the enjoyment by persons within its borders of rights acquired elsewhere which violate its laws or public policy, and, under some circumstances, it may refuse to aid in the enforcement of such rights. But the Mexican corporation never was in Texas, and neither it nor the garnishees invoked the aid of the Texas courts or the Texas laws. The Mexican corporation was not before the court. The garnishees were brought in by compulsory process. Neither has asked favors. They ask only to be let alone. We need not consider how far the state may go in imposing restrictions on the conduct of its own residents, and of foreign corporations which have received permission to do business within its borders, or how far it may go in refusing to len d the aid of its courts to the enforcement of rights acquired outside its borders. It may not abrogate the rights of parties beyond its borders having no relation to anything done or to be done within them. Assuming that a state may properly refuse to recognize foreign rights that violate its declared policy, or restrict the conduct of persons within its limits, this does not mean that it may abrogate the rights of parties beyond its borders having no relation to anything done or to be done within them. The state of Texas could not constitutionally apply its own rule invalidating contract clauses that required any statute of limitations under two years to a contract that had no relation to Texas beyond the fact that the plaintiff was a Texas resident. The plaintiff had sued a New York reinsurer of a Mexican corporation that was
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CONFLICT OF LAWS 2012-2013 primarily insured in Mexico, which is where the "injury" had occurred when a tugboat owned by the company was lost in a fire. The plaintiff was living in Mexico at the time (although not a resident), but returned to Texas to file suit. These contacts were insufficient to satisfy the Due Process Clause of the Fourteenth Amendment. — oOo — ALLSTATE INS. CO. v. HAGUE 449 U.S. 302, January 13, 1981 Minnesota had a significant aggregation of contacts with the parties and the occurrence, creating state interests, such that application of its law was neither arbitrary nor fundamentally unfair.
Respondent's husband died of injuries suffered when a motorcycle on which he was a passenger was struck by an automobile. The accident occurred in Wisconsin near the Minnesota border. The operators of both vehicles were Wisconsin residents, as was the decedent, who, however, had been employed in Minnesota and had commuted daily to work from Wisconsin. Neither vehicle operator carried valid insurance, but the decedent held a policy issued by petitioner covering three automobiles owned by him and containing an uninsured motorist clause insuring him against loss incurred from accidents with uninsured motorists, but limiting such coverage to $15,000 for each automobile. After the accident, but prior to the initiation of this lawsuit, respondent moved to Red Wing. Subsequently, she married a Minnesota resident and established residence with her new husband in Savage, Minn. At approximately the same time, a Minnesota Registrar of Probate appointed respondent personal representative of her deceased husband's estate. Following her appointment, she brought this action in Minnesota District Court seeking a declaration under Minnesota law that the $15,000 uninsured motorist coverage on each of her late husband's three automobiles could be "stacked" to provide total coverage of $45,000. Petitioner- insurer, defended that the question as to whether the three uninsured motorist coverages could be stacked should be determined by Wisconsin law, since the insurance policy was delivered in Wisconsin, the accident occurred there, and all persons involved were Wisconsin residents at the time of the accident. The trial court, interpreting Wisconsin law to disallow stacking, concluded that Minnesota's choice of law rules required the application of Minnesota law permitting stacking, and granted summary judgment for respondent. The Minnesota Supreme Court affirmed.
ISSUE:
Whether the Minnesota laws finds applicability in an insurance policy which was delivered in Wisconsin, the accident occurred there, and all persons involved were Wisconsin residents at the time of the accident. HELD:
In deciding constitutional choice of law questions, whether under the Due Process Clause or the Full Faith and Credit Clause, this Court has traditionally examined the contacts of the State, whose law was applied, with the parties and with the occurrence or transaction giving rise to the litigation. In order to ensure that the choice of law is neither arbitrary nor fundamentally unfair, the Court has invalidated the choice of law of a State which has had no significant contact or significant aggregation of contacts, creating state interests, with the parties and the occurrence or transaction. Minnesota has three contacts with the parties and the occurrence giving rise to the litigation. In the aggregate, these contacts permit selection by the Minnesota Supreme Court of Minnesota law allowing the stacking of Mr. Hague's uninsured motorist coverages. First, and, for our purposes, a very important contact, Mr. Hague was a member of Minnesota's workforce, having been employed by a Red Wing, Minn., enterprise for the 15 years preceding his death. While employment status may implicate a state interest less substantial than does resident status, that interest is nevertheless important. The State of employment has police power responsibilities towards UNIVERSITY
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CONFLICT OF LAWS 2012-2013 the nonresident employee that are analogous, if somewhat less profound, than towards residents. Thus, such employees use state services and amenities and may call upon state facilities in appropriate circumstances. In addition, Mr. Hague commuted to work in Minnesota, a contact which was important in and was presumably covered by his uninsured motorist coverage during the commute. The State's interest in its commuting nonresident employees reflects a state concern for the safety and wellbeing of its workforce and the concomitant effect on Minnesota employers. That Mr. Hague was not killed while commuting to work or while in Minnesota does not dictate a different result. To hold that the Minnesota Supreme Court's choice of Minnesota law violated the Constitution for that reason would require too narrow a view of Minnesota's relationship with the parties and the occurrence giving rise to the litigation. An automobile accident need not occur within a particular jurisdiction for that jurisdiction to be connected to the occurrence. Similarly, the occurrence of a crash fatal to a Minnesota employee in another State is a Minnesota contact. If Mr. Hague had only been injured and missed work for a few weeks, the effect on the Minnesota employer would have been palpable, and Minnesota's interest in having its employee made whole would be evident. Mr. Hague's death affects Minnesota's interest still more acutely, even though Mr. Hague will not return to the Minnesota workforce. Minnesota's workforce is surely affected by the level of protection the State extends to it, either directly or indirectly. Vindication of the rights of the estate of a Minnesota employee, therefore, is an important state concern. Mr. Hague's residence in Wisconsin does not -- as Allstate seems to argue -- constitutionally mandate application of Wisconsin law to the exclusion of forum law. Moreover, respondent became a Minnesota resident prior to institution of this litigation. The stipulated facts reveal that she first settled in Red Wing, Minn., the town in which her late husband had worked. She subsequently moved to Savage, Minn., after marrying a Minnesota resident who operated an automobile service station in Bloomington, Minn. Her move to Savage occurred "almost concurrently," with the initiation of the instant case. There is no suggestion that Mrs. Hague moved to Minnesota in anticipation of this litigation or for the purpose of finding a legal climate especially hospitable to her claim. The stipulated facts, sparse as they are, negate any such inference. In sum, Minnesota had a significant aggregation of contacts with the parties and the occurrence, creating state interests, such that application of its law was neither arbitrary nor fundamentally unfair. Accordingly, the choice of Minnesota law by the Minnesota Supreme Court did not violate the Due Process Clause or the Full Faith and Credit Clause.
— oOo — PHILIPS PETROLEUM COMPANY, v. SHUTTS, et al. No. 84-233, 26 June 1985 (Rehnquist, J.) Philips Petroleum Company (Philips) purchased natural gas from a leased land located in 11 states. Shutts, et al . who are the royalty owners of the rights to lease brought a class action against Philips before the state of Kansas. Shuts, et al. seeks to recover the interest on royalty payments that had been delayed by Philips. Approximately, there are 30,000 royalty owners who were provided with a notice by first-class mail. In the notice, each royalty owner was informed that they could appear in person or by counsel, that otherwise he would be represented by respondents, and that class members would be included in the class and bound by the judgment unless they "opted out" of the
action by returning a ―request for exclusion.‖ The final class consisted of some 28,000 members, who reside in all 50 States.
The trial court applied the Kansas‘ contract and equity laws d espite the fact that over 99% of the gas leases in question and some 97% of the plaintiff class members had no apparent connection to Kansas except for the lawsuit. The Kansas Supreme Court stated that the Kansas law could be applied to the cases. The court stated that generally the law of the forum controlled all claims unless "compelling reasons" existed to apply a different law. UNIVERSITY
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CONFLICT OF LAWS 2012-2013 ISSUE:
1. Whether or not Philips has standing to assert the claim that Kansas did not possess the proper jurisdiction over the many plaintiffs who are not Kansas residents and no connection to Kansas 2. Whether or not the Kansas law would apply to all claims HELD:
Petition PARTIALLY GRANTED. Philips has standing
Philips has standing to assert the claim that Kansas did not have jurisdiction over the class members who were not Kansas residents and had no connection to Kansas. Whether it wins or loses on the merits, Philips has a distinct and personal interest in seeing the entire plaintiff class bound by res judicata just as Philips is bound. The only way Philips can assure itself of this binding effect is to ascertain that the forum court has jurisdiction over every plaintiff whose claim it seeks to adjudicate, sufficient to support a res judicata defense in a later suit by class members. The alleged injury Philips would incur if the class-action judgment against it became final without binding the plaintiff class is sufficient to give petitioner standing on its own right to raise the jurisdiction claim in this Court. Kansas law should not apply to all cases
The Kansas Supreme Court erred in deciding that the application of Kansas law to all claims would be constitutional. Kansas must have a "significant contact or aggregation of contacts" to the claims asserted by each plaintiff class member in order to ensure that the choice of Kansas law was not arbitrary or unfair. Given Kansas' lack of "interest" in claims unrelated to that State, and the substantive conflict between Kansas law and the law of other States, such as Texas, where some of the leased land in question is located, application of Kansas law to every claim in this case was sufficiently arbitrary and unfair as to exceed constitutional limits. Philips contends that total application of Kansas substantive law violated the constitutional limitations on choice of law mandated by the Due Process Clause of the Fourteenth Amendment and the Full Faith and Credit Clause of Article IV, § 1. Philips claims that Kansas law conflicts with that of a number of States connected to this litigation, especially Texas and Oklahoma. The conflicts on the applicable interest rates, alone — which we do not think can be labeled "false conflicts" without a more thoroughgoing treatment than was accorded them by the Supreme Court of Kansas — certainly amounted to millions of dollars in liability. We think that the Supreme Court of Kansas erred in deciding on the basis that it did that the application of its laws to all claims would be constitutional. The Kansas class-action statute, like those of most other jurisdictions, requires that there be "common issues of law or fact." But while a State may, for the reasons we have previously stated, assume jurisdiction over the claims of plaintiffs whose principal contacts are with other States, it may not use this assumption of jurisdiction as an added weight in the scale when considering the permissible constitutional limits on choice of substantive law. It may not take a transaction with little or no relationship to the forum and apply the law of the forum in order to satisfy the procedural requirement that there be a "common question of law." The issue of personal jurisdiction over plaintiffs in a class action is entirely distinct from the question of the constitutional limitations on choice of law; the latter calculus is not altered by the fact that it may be more difficult or more burdensome to comply with the constitutional limitations because of the large number of transactions which the State proposes to adjudicate and which have little connection with the forum. Kansas must have a "significant contact or significant aggregation of contacts" to the claims asserted by each member of the plaintiff class, contacts "creating state interests," in order to ensure that the choice of Kansas law is not arbitrary or unfair. Given Kansas' lack of "interest" in claims unrelated to that State, and the substantive conflict with jurisdictions such as Texas, we conclude that application of Kansas law to every claim in this case is sufficiently arbitrary and unfair as to exceed constitutional limits. When considering fairness in this context, an important element is the expectation of the parties. There is no indication that when the leases involving land and royalty owners outside of Kansas were executed, the parties UNIVERSITY
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CONFLICT OF LAWS 2012-2013 had any idea that Kansas law would control. Neither the Due Process Clause nor the Full Faith and Credit Clause requires Kansas "to substitute for its own laws, applicable to persons and events within it, the conflicting statute of another state," but Kansas "may not abrogate the rights of parties beyond its borders having no relation to anything done or to be done within them." — oOo — SAUDI ARABIAN AIRLINES v. COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City G.R. No. 122191, 8 October 1998, FIRST DIVISION (Quisumbing, J .)
Since the Philippines is the situs of the tort complaint of and the place “having the most interest in the problem”, the Philippine law on tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case.
In 1988, Saudi Arabian Airlines (Sauidi) hired Milagros Morada (Morada) as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. In 1990, while on lay-over in Jakarta, Milagros went to a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, 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. When Allah left, Thamer attempted to rape Milagros. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice. When she returned to Jeddah, Milagros was interrogated about the incident. The officials then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. However, Milagros refused to cooperate. She declined to sign a blank paper and a document written in the local dialect. Eventually, Saudi allowed her to return to Jeddah but barred her from the Jakarta flights. However, after 2 weeks of detention, the accused were both deported to Saudi and were reinstated by Saudi Airlines. Eventually, Milagros was transferred to Manila. In 1992, she was asked to see Mr.. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. She was pressure to drop the case against the accused. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah. For the second time, she was aksed to appear before the Saudi Courts. Subsequently, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. In 1993, she was sentenced to 5 months of imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition.‖ Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause. ISSUE:
Whether or not the RTC of QC has jurisdiction to hear and try the civil case notwithstanding the existence of foreign element. HELD:
A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more s tates 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. UNIVERSITY
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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 foru m, ‗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. 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. Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntary submitted herself to the jurisdiction of the court. 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. Several theories have been propounded in order to identify the legal system that should ultimately control. Although ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed. Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as “characterization”, or the “doctrine of qualification”. It is the ―process of deciding whether or not the facts relat e to the kind of question specified in a conflicts rule.‖ The purpose of ―characterization‖ is to enable the forum to select the proper law. Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. An
essential element of conflict rules is the indication of a ―test‖ or ―connecting factor‖ or ―point of contact‖. Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of the res , the place of celebration, the place of performance, or the place of wrongdoing. Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. 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 ; — the law of (7) the place where judicial or administrative proceedings are instituted or done. The lex fori 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
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CONFLICT OF LAWS 2012-2013 (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.‖
After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed submitted for purposes of the motion to dismiss, we are convinced that there is reasonable basis for private
respondent‘s assertion that although she was already working in Manila, petitioner brought her to Jeddah on the
pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial for very serious charges, including adultery and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the ―handing over‖ or ―turning over‖ of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioner‘s purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of private respondent under the gui se of petitioner‘s authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven. 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 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 important here is the place where the over-all harm or the fatality 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. Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi , modern theories and rules on tort liability have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the ― State of the most significant relationship” rule, which in our view should be appropriate to apply now, given the factual context of this case. In applying said principle 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. Prescinding from this premise that the Philippines is the situs of the tort complaint of and the place ―having the most interest in the problem‖, we find, by way of recapitulation, that the Philippine law on tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent RTC has jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. — oOo — E. NATIONALITY AND DOMICILE JUAN GALLANOSA FRIVALDO v. COMMISSION ON ELECTIONS AND THE LEAGUE OF MUNICIPALITIES, SORSOGON CHAPTER, HEREIN REPRESENTED BY ITS PRESIDENT, SALVADOR NEE ESTUYE G.R. No. 87193, 23 June 1989, EN BANC (Cruz, J .)
UNIVERSITY
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CONFLICT OF LAWS 2012-2013 Juan G. Frivaldo (Frivaldo) was proclaimed governor-elect of the province of Sorsogon in 1988, and assumed office in due time. The League of Municipalities, Sorsogon Chapter (League), represented by its President, Salvador Estuye (Estuye), who was also suing in his personal capacity, filed with the COMELEC a petition for the annulment of election and proclamation of Frivaldo on the ground that he was not a Filipino citizen, having been naturalized in the United States in 1983. Thus, he is not qualified to run for and be elected governor. Frivaldo admitted that he was naturalized but pleaded that he had sought American citizenship only to protect himself against President Marcos. He claimed that the challenge should be dismissed as the same is a quo warranto petition that should have been filed within ten days from his proclamation.
The Solicitor General supported the contention that Frivaldo was not a citizen of the Philippines and had not repatriated himself after his naturalization as an American citizen. As an alien, he was disqualified from public office in the Philippines. His election did not cure this defect. ISSUE:
Whether or not Frivaldo was a citizen of the Philippines at the time of his election in 1988. HELD:
Petition DENIED (Frivaldo is thereby disqualified) . The reason for this inquiry is the provision in Article XI, Section 9, of the Constitution that all public officials and employees owe the State and the Constitution "allegiance at all times" and the specific requirement in Section 42 of the LGC that a candidate for local elective office must be a citizen of the Philippines and a qualified voter of the constituency where he is running. The Nottebohm case cited by the petitioner invoked the international law principle of effective nationality which is clearly not applicable to the case at bar. This principle is expressed in Article 5 of the Hague Convention of 1930 on the Conflict of Nationality Laws as follows: Art. 5. Within a third State a person having more than one nationality shall be treated as if he had only one. Without prejudice to the application of its law in matters of personal status and of any convention in force, a third State shall, of the nationalities which any such person possesses, recognize exclusively in its territory either the nationality of the country in which he is habitually and principally resident or the nationality of the country with which in the circumstances he appears to be in fact most closely connected. Nottebohm was a German by birth but a resident of Guatemala for 34 years when he applied for and acquired naturalization in Liechtenstein one month before the outbreak of World War II. Many members of his family and his business interests were in Germany. In 1943, Guatemala, which had declared war on Germany, arrested Nottebohm and confiscated all his properties on the ground that he was a German national. Liechtenstein thereupon filed suit on his behalf, as its citizen, against Guatemala. The International Court of Justice held Nottebohm to be still a national of Germany, with which he was more closely connected than with Liechtenstein. That case is not relevant to the petition before us because it dealt with a conflict between the nationality laws of two states as decided by a third state. No third state is involved in the case at bar; in fact, even the United States is not actively claiming Frivaldo as its national. The sole question presented to us is whether or not Frivaldo is a citizen of the Philippines under our own laws , regardless of other nationality laws. We can decide this question alone as sovereign of our own territory, conformably to Section 1 of the said Convention providing that "it is for each State to determine under its law who are its nationals." It is also worth noting that Nottebohm was invoking his naturalization in Liechtenstein whereas in the present case Frivaldo is rejecting his naturalization in the United States. If he really wanted to disavow his American citizenship and reacquire Philippine citizenship, the petitioner should have done so in accordance with the laws of our country. Under CA No. 63 as amended by CA No. 473 and PD No. 725, Philippine citizenship may be reacquired by direct act of Congress, by naturalization, or by repatriation.
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CONFLICT OF LAWS 2012-2013 While Frivaldo does not invoke either of the first two methods, he nevertheless claims he has reacquired Philippine citizenship by virtue of a valid repatriation. He claims that by actively participating in the elections in this country, he automatically forfeited American citizenship under the laws of the United States. Such laws do not concern us here. The alleged forfeiture is between him and the United States as his adopted country. It should be obvious that even if he did lose his naturalized American citizenship, such forfeiture did not and could not have the effect of automatically restoring his citizenship in the Philippines that he had earlier renounced. At best, what might have happened as a result of the loss of his naturalized citizenship was that he became a stateless individual. It does not appear that Frivaldo has taken these categorical acts. He contends that by simply filing his certificate of candidacy he had, without more, already effectively recovered Philippine citizenship. But that is hardly the formal declaration the law envisions — surely, Philippine citizenship previously disowned is not that cheaply recovered. If the Special Committee had not yet been convened, what that meant simply was that the petitioner had to wait until this was done, or seek naturalization by legislative or judicial proceedings. The argument that the petition filed with the Commission on Elections should be dismissed for tardiness is not well-taken. The herein private respondents are seeking to prevent Frivaldo from continuing to discharge his office of governor because he is disqualified from doing so as a foreigner. Qualifications for public office are continuing requirements and must be possessed not only at the time of appointment or election or assumption of office but during the officer's entire tenure. Once any of the required qualifications is lost, his title may be seasonably challenged. If, say, a female legislator were to marry a foreigner during her term and by her act or omission acquires his nationality, would she have a right to remain in office simply because the challenge to her title may no longer be made within ten days from her proclamation? It has been established, and not even denied, that the evidence of Frivaldo's naturalization was discovered only eight months after his proclamation and his title was challenged shortly thereafter. This Court will not permit the anomaly of a person sitting as provincial governor in this country while owing exclusive allegiance to another country. The fact that he was elected by the people of Sorsogon does not excuse this patent violation of the salutary rule limiting public office and employment only to the citizens of this country. The qualifications prescribed for elective office cannot be erased by the electorate alone. The will of the people as expressed through the ballot cannot cure the vice of ineligibility, especially if they mistakenly believed, as in this case, that the candidate was qualified. Obviously, this rule requires strict application when the deficiency is lack of citizenship. If a person seeks to serve in the Republic of the Philippines, he must owe his total loyalty to this country only, abjuring and renouncing all fealty and fidelity to any other state. It is true as the petitioner points out that the status of the natural-born citizen is favored by the Constitution and our laws, which is all the more reason why it should be treasured like a pearl of great price. But once it is surrendered and renounced, the gift is gone and cannot be lightly restored. This country of ours, for all its difficulties and limitations, is like a jealous and possessive mother. Once rejected, it is not quick to welcome back with eager arms its prodigal if repentant children. The returning renegade must show, by an express and unequivocal act, the renewal of his loyalty and love. — oOo — ERNESTO S. MERCADO v. EDUARDO BARRIOS MANZANO and the COMMISSION ON ELECTIONS G.R. No. 135083, 26 May 1999, EN BANC (Mendoza, J .)
Unlike those with dual allegiance, who must, therefore, be subject to strict process with respect to the termination of their status, for candidates with dual citizenship, it would suffice if, upon the filing of their certificates of candidacy, they elect Philippine citizenship to terminate their status as persons with dual citizenship considering that their condition is the unavoidable consequence of conflicting laws of different states.
Ernesto S. Manzano and Eduardo B. Mercado are vice-mayoral candidates Makati City. Manzano got the
highest number votes while Mercado bagged the second place. However, Manzano‘s proclamation was suspended
in view of a pending petition for disqualification on the ground that he is an American citizen. In his answer, Manzano admitted that he is registered as a foreigner with the Bureau of Immigration; nonetheless, he alleged that he is a Filipino citizen because he was born in 1955 of a Filipino father and a Filipino mother although he was born in the United States and is thus considered an American citizen under US laws. According to him, notwithstanding his registration as an American citizen, he did not lose his Filipino citizenship. As such, the Second Division of the COMELEC granted the petition and cancelled Manzano‘s certificate of candidacy on the ground that he is a dual citizen. Accordingly, under the Local Government Code (sec. 40), dual UNIVERSITY
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CONFLICT OF LAWS 2012-2013 citizens are disqualified from running for any position. However, the COMELEC en banc reversed the division‘s ruling. In its resolution, it said that Manzano was both a US citizen and a Filipino citizen. It further ruled that although he was registered as an alien with the Philippine Bureau of Immigration and was using an American passport, this did not result in the loss of his Philippine citizenship, as he did not renounce Philippine citizenship and did not take an oath of allegiance to the US. Moreover, the COMELEC found that when respondent attained the age of majority, he registered himself as a Philippine voter and voted as such, which effectively renounced his US citizenship under American law. Under Philippine law, he no longer had US citizenship. ISSUE:
Whether or not Manzano was an alien and thus disqualified to run for public office HELD: Petition GRANTED. Dual Citizenship distinguished from Dual Allegiance
To begin with, dual citizenship is different from dual allegiance. The former arises when, as a result of the concurrent application of the different laws of two or more states, a person is simultaneously considered a national by the said states. For instance, such a situation may arise when a person whose parents are citizens of a state which adheres to the principle of jus sanguinis is born in a state which follows the doctrine of jus soli. Such a person, ipso facto and without any voluntary act on his part, is concurrently considered a citizen of both states. Considering the citizenship clause (Art. IV) of our Constitution, it is possible for the following classes of citizens of the Philippines to possess dual citizenship: 1. 2. 3.
Those born of Filipino fathers and/or mothers in foreign countries which follow the principle of jus soli; Those born in the Philippines of Filipino mothers and alien fathers if by the laws of their fathers‘ country such children are citizens of that country;
Those who marry aliens if by the laws of the latter‘s country the former are considered citizens, unless by their act or omission they are deemed to have renounced Philippine citizenship.
There may be other situations in which a citizen of the Philippines may, without performing any act, be also a citizen of another state; but the above cases are clearly possible given the constitutional provisions on citizenship. Dual allegiance, on the other hand, refers to the situation in which a person simultaneously owes, by some positive act, loyalty to two or more states. While dual citizenship is involuntary, dual allegiance is the result of an individual’s volitio n. Accordingly, the phrase ―dual citizenship‖ in the LGC must be understood as referring to ―dual allegiance.‖ Consequently, persons with mere dual citizenship do not fall under this disqualification. Unlike those with dual allegiance, who must, therefore, be subject to strict process with respect to the termination of their status, for candidates with dual citizenship, it would suffice if, upon the filing of their certificates of candidacy, they elect Philippine citizenship to terminate their status as persons with dual citizenship considering that their condition is the unavoidable consequence of conflicting laws of different states. In including Section 5 in Article IV on citizenship, the concern of the Constitutional Commission was not with dual citizens per se but with naturalized citizens who maintain their allegiance to their countries of origin even
after their naturalization. Hence, the phrase ―dual citizenship‖ in R.A. No. 7160, Section 40(d) and in R.A. No. 7854, Section 20 must be understood as referring to ―dual allegiance.‖ Consequently, persons with mere dual citizenship do not fall under this disqualification. Unlike those with dual allegiance, who must, therefore, be subject to strict process with respect to the termination of their status, for candidates with dual citizenship, it should suffice if, upon the filing of their certificates of candidacy, they elect Philippine citizenship to terminate their status as persons with dual citizenship considering that their condition is the unavoidable consequence of conflicting laws of different states. As Joaquin G. Bernas, one of the most perceptive members of the Constitutional Commission, pointed out: ―[D]ual citizenship is just a reality imposed on us because we have no control of the laws on c itizenship of other countries. We recognize a child of a Filipino mother. But whether or not she is considered a citizen of
another country is something completely beyond our control.‖ By electing Philippine citizenship, such candidates at
the same time forswear allegiance to the other country of which they are also citizens and thereby terminate their status as dual citizens. It may be that, from the point of view of the foreign state and of its laws, such an individual has not effectively renounced his foreign citizenship. UNIVERSITY
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By electing Philippine citizenship, such candidates at the same time forswear allegiance to the other country of which they are also citizens and thereby terminate their status as dual citizens. It may be that, from the point of view of the foreign state and of its laws, such an individual has not effectively renounced his foreign citizenship. That is of no moment. To recapitulate, by declaring in his certificate of candidacy that he is a Filipino citizen; that he is not a permanent resident or immigrant of another country; that he will defend and support the Constitution of the Philippines and bear true faith and allegiance thereto and that he does so without mental reservation, private respondent has, as far as the laws of this country are concerned, effectively repudiated his American citizenship and
anything which he may have said before as a dual citizen. On the other hand, Manzano‘s oath of allegiance to the
Philippines, when considered with the fact that he has spent his youth and adulthood, received his education, practiced his profession as an artist, and taken part in past elections in this country, leaves no doubt of his election of Philippine citizenship. — oOo — CIRILO R. VALLES v. COMMISSION ON ELECTIONS and ROSALIND YBASCO LOPEZ G.R. No. 137000, 9 August 2000, EN BANC (Purisima, J.) Rosalind Ybasco Lopez (Lopez) was born in 1934 in Western Australia, to the spouses Telesforo Ybasco, a Filipino citizen and Theresa Marquez, an Australian. In 1949, at the age of 15, Lopez left Australia and came to settle in the Philippines. In 1952, Lopez was married to Leopoldo Lopez, a Filipino citizen. Since then, Lopez has continuously participated in the electoral process not only as a voter but as a candidate, as well. Lopez served as Provincial Board Member of the Sangguniang Panlalawigan of Davao Oriental. In 1992, Lopez ran for and was elected governor of Davao Oriental. Lopez‘s election was contested by her opponent, Gil Taojo, Jr., in a petition for quo warranto, alleging as ground therefor her alleged Australian citizenship. However, finding no sufficient proof that Lopez had renounced her Philippine citizenship, the Commission on Elections en banc dismissed the petition. In the 1995 local elections, Lopez ran for re-election as governor of Davao Oriental. Opponent,
Francisco Rabat, filed a petition for disqualification before the COMELEC, contesting Lopez‘s Filipino citizenship but the said petition was likewise dismissed. The citizenship of Lopez was once again raised as an issue when she ran for re-election as governor of Davao Oriental on the May 11, 1998 elections. Lopez‘s candidacy was questioned by Cirilo Valles. COMELEC came out with a Resolution dismissing the petition. ISSUE:
Whether or not Lopez is a Filipino citizen HELD:
Petition GRANTED (Lopez is a Filipino citizen). The Commission on Elections ruled that Lopez is a Filipino citizen and therefore, qualified to run for a public office because (1) her father, Telesforo Ybasco, is a Filipino citizen, and by virtue of the principle of jus sanguinis she was a Filipino citizen under the 1987 Philippine Constitution; (2) she was married to a Filipino, thereby making her also a Filipino citizen ipso jure under Section 4 of Commonwealth Act 473; (3) and that, Lopez renounced her Australian citizenship before the Department of Immigration and Ethnic Affairs of Australia and her Australian passport was accordingly cancelled as certified to by the Australian Embassy in Manila; and (4) furthermore, there are the COMELEC Resolutions declaring her a Filipino citizen duly qualified to run for the elective position of Davao Oriental governor.Valles, on the other hand, maintains that Lopez is an Australian citizen, placing reliance on the admitted facts that: a) In 1988, Lopez registered herself with the Bureau of Immigration as an Australian national and was issued Alien Certificate of Registration; b) Lopez applied for the issuance of an Immigrant Certificate of Residence (ICR), and c) Lopez was issued Australian Passport. Accordingly, Lopez renounced her Filipino citizenship. The petition is unmeritorious. The Philippine law on citizenship adheres to the principle of jus sanguinis . Thereunder, a child follows the nationality or citizenship of the parents regardless of the UNIVERSITY
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CONFLICT OF LAWS 2012-2013 place of his/her birth, as opposed to the doctrine of jus soli which determines nationality or citizenship on the basis of place of birth. Lopez was born on May 16, 1934 in Western Australia, to the spouses, Telesforo Ybasco, a Filipino citizen and native of Daet, Camarines Norte, and Theresa Marquez, an Australian. Historically, this was a year before the 1935 Constitution took into effect and at that time, what served as the Constitution of the Philippines were the principal organic acts by which the United States governed the country. These were the Philippine Bill of July 1, 1902 and the Philippine Autonomy Act of August 29, 1916, also known as the Jones Law.
Among others, these laws defined who were deemed to be citizens of the Philippine islands. The Philippine Bill of 1902 defined Philippine citizens as: SEC . 4 xxx all inhabitants of the Philippine Islands continuing to reside therein who were Spanish subjects on the eleventh day of April, eighteen hundred and ninety-nine, and then resided in the Philippine Islands, and their children born subsequent thereto, shall be deemed and held to be citizens of the Philippine Islands xxx The Jones Law, on the other hand, provides: SEC . 2 That all inhabitants of the Philippine Islands who were Spanish subjects on the eleventh day of April, eighteen hundred and ninety-nine, and then resided in said Islands, and their children born subsequent thereto, shall be deemed and held to be citizens of the Philippine Islands, xxx Under both organic acts, all inhabitants of the Philippines who were Spanish subjects on April 11, 1899 and resided therein including their children are deemed to be Philippine citizens. Lopez‘s, Telesforo Ybasco, was born on January 5, 1879 in Daet, Camarines Norte, a fact duly evidenced by a certified true copy of an entry in the Registry of Births. Thus, under the Philippine Bill of 1902 and the Jones Law, Telesforo Ybasco was deemed to be a Philippine citizen. By virtue of the same laws, which were the laws in force at the time of her birth, Telesforo‘s daughter, Lopez, is likewise a citizen of the Philippines. The signing into law of the 1935 Philippine Constitution has established the principle of jus sanguinis as basis for the acquisition of Philippine citizenship, to wit: 1. Those who are citizens of the Philippine Islands at the time of the adoption of this Constitution. 2. Those born in the Philippine Islands of foreign parents who, before the adoption of this Constitution had been elected to public office in the Philippine Islands. 3. Those whose fathers are citizens of the Philippines. 4. Those whose mothers are citizens of the Philippines and, upon reaching the age of majority, elect Philippine citizenship. 5. Those who are naturalized in accordance with law. So also, the principle of jus sanguinis , which confers citizenship by virtue of blood relationship, was subsequently retained under the 1973 and 1987 Constitutions. Thus, t Lopez, is a Filipino citizen, having been born to a Filipino father. The fact of her being born in Australia is not tantamount to her losing her Philippine citizenship. If Australia follows the principle of jus soli , then at most, private respondent can also claim Australian citizenship resulting to her possession of dual citizenship. On renunciation
Under Commonwealth Act No. 63, a Filipino citizen may lose his citizenship: 1. By naturalization in a foreign country; 2. By express renunciation of citizenship; 3. By subscribing to an oath of allegiance to support the constitution or laws of a foreign country upon attaining twenty-one years of age or more; 4. By accepting commission in the military, naval or air service of a foreign country; 5. By cancellation of the certificate of naturalization; 6. By having been declared by competent authority, a deserter of the Philippine armed forces in time of war, unless subsequently, a plenary pardon or amnesty has been granted: and 7. In case of a woman, upon her marriage, to a foreigner if, by virtue of the laws in force in her
husband‘s country, she acquires his nationality.
In order that citizenship may be lost by renunciation, such renunciation must be express. Valles‘ contention that the application of Lopez for an alien certificate of registration, and her Australian passport, is UNIVERSITY
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CONFLICT OF LAWS 2012-2013 bereft of merit. The mere fact that Lopez was a holder of an Australian passport and had an alien certificate of registration are not acts constituting an effective renunciation of citizenship and do not militate against her claim of Filipino citizenship. For renunciation to effectively result in the loss of citizenship, the same must be express. An application for an alien certificate of registration does not amount to an express renunciation or
repudiation of one‘s citizenship. On dual citizenship
Valles also maintains that even on the assumption that Lopez‘s had dual citizenship, still, she is disqualified to run for governor of Davao Oriental; citing Section 40 of Republic Act 7160 otherwise known as the Local Government Code of 1991, which states: ―SEC. 40. Disqualifications. The following persons are disqualified from running for any elective local position: (d) Those with dual citizenship. This contention is untenable. In Mercado v. Manzano, it was clarified that the phrase ‗dual citizenship‘ in R.A. No. 7160, xxx 40 (d) and in R.A. No. 7854, xxx 20 must be understood as referring to ‗dual
allegiance‘. Consequently, persons with mere dual citizenship do not fall under this disqualification.‖ Thus, the fact that Lopez had dual citizenship did not automatically disqualify her from running for a public office — oOo — DJUMANTAN v. HON. ANDREA D. DOMINGO, COMMISSIONER OF THE BOARD OF IMMIGRATION, HON. REGINO R. SANTIAGO and HON. JORGE V. SARMIENTO, COMMISSIONERS BUREAU OF IMMIGRATION AND DEPORTATION G.R. No. 99358, 30 January 1995, EN BANC (Quiason, J.)
Bernard Banez, the husband of Marina Cabael, went to Indonesia as a contract worker. Banez embraced and was converted to Islam. Banez married Djumantan in accordance with Islamic rites. Banez returned to the Philippines in 1979. Djumantan and her two children with Banez, arrived in Manila as the "guests" of Banez. Banez made it appear that he was just a friend of the family of Djumantan and was merely repaying the hospitability extended to him during his stay in Indonesia. As "guests," Djumantan and her two children lived in the house of Banez. Djumantan and her children were admitted to the Philippines as temporary visitors under Section 9(a) of the Immigration Act of 1940. Cabael later on discovered the true relationship of Banez and Djumantan. Cabel filed a complaint for "concubinage" but the case was, however, dismissed for lack of merit. Meanwhile, the immigration status of Djumantan was changed from temporary visitor to that of permanent resident under Section 13(a) of the same law. Accordingly, Djumantan was issued an alien certificate of registration.
Banez‘ eldest son, Leonardo, filed a letter complaint with the Ombudsman, who subsequently referred the letter to the Commission on Immigration and Deportation (CID). Djumantan moved for the dismissal of the deportation case on the ground that she was validly married to a Filipino citizen. The CID revoked the visa previously granted. ISSUES:
Whether or not Djumantan should be deported Whether or not the power to deport her has prescribed HELD:
Petition GRANTED. We need not resolve the validity of Djumantan's marriage to Banez, if under the law the CID can validly deport Djumantan as an "undesirable alien" regardless of her marriage to a Filipino citizen. There was a blatant abuse of our immigration laws in effecting Djumantan‘s entry into the country and the change of her immigration status from temporary visitor to permanent resident. All such privileges were obtained through misinterpretation. Never was the marriage of Djumantan to Banez disclosed to the immigration authorities in her applications for temporary visitor's visa and for permanent residency. The immigration authorities would be less inclined to allow the entry of a woman who claims to have entered into a marriage with a Filipino citizen, who is married to another woman. UNIVERSITY
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There is no law guaranteeing aliens married to Filipino citizens the right to be admitted, much less to be given permanent residency, in the Philippines. The fact of marriage by an alien to a citizen does not withdraw her from the operation of the immigration laws governing the admission and exclusion of aliens. Marriage of an alien woman to a Filipino husband does not ipso facto make her a Filipino citizen and does not excuse her from her failure to depart from the country upon the expiration of her extended stay here as an alien.
Under Section 9 of the Immigration Act of 1940, it is not mandatory for the CID to admit any alien who applies for a visitor's visa. Once admitted into the country, the alien has no right to an indefinite stay. Under Section 13 of the law, an alien allowed to stay temporarily may apply for a change of status and "may be admitted" as a permanent resident. Among those considered qualified to apply for permanent residency if the wife or husband of a Philippine citizen (Immigration Act of 1940, Sec. 13[a]). The entry of aliens into the country and their admission as immigrants is not a matter of right, even if they are legally married to Filipino citizens. We now address the issue raised by the Solicitor General that the right of public respondents to deport Djumantan has prescribed, citing Section 37(b) of the Immigration Act of 1940. Said Section 37(b) provides: Deportation may be effected under clauses 2, 7, 8, 11 and 12 of paragraph (a) of this section at any time after entry, but shall not be effected under any clause unless the arrest in the deportation proceedings is made within five years after the cause for deportation arises . Deportation under clauses 3 and 4 shall not be effected if the court, or judge thereof, when sentencing the alien, shall recommend to the Commissioner of Immigration that the alien be not deported (As amended by Rep. Act No. 503). Section 37(a) of the said law mentioned in Section 37(b) thereof provides: The following aliens shall be arrested upon the warrant of the Commissioner of Immigration or of any other officer designated by him for the purpose and deported upon the warrant of the Commissioner of Immigration after a determination by the Board of Commissioners of the existence of the ground for deportation as charged against the alien: 1) Any alien who enters the Philippines after the effective date of this Act by means of false and misleading statements or without inspection and admission by the immigration authorities at a designating port of entry or at any place other than at a designated port of entry. xxx. Under clause 1 of Section 37(a), an "alien who enters the Philippines after the effective date of this Act by means of false and misleading statements or without inspection and admission by the immigration authorities at a designated port of entry or at any place other than at a designated port of entry" is subject to deportation. The deportation of an alien under said clause of Section 37(a) has a prescriptive period and "shall not be effected ... unless the arrest in the deportation proceedings is made within five years after the cause for deportation arises". Congress may impose a limitation of time for the deportation of alien from the country. Under Section 37(b) of the Immigration Act of 1940, the deportation of an alien may be barred after the lapse of five years after the cause of deportation arises. The right of public respondents to deport Djumantan has prescribed. Djumantan was admitted and allowed entry into the Philippines on January 13, 1979 on the basis of false and misleading statements in her application and in the other supporting documents submitted to the immigration authorities. Leonardo C. Banez first complained with the CID on November 19, 1980 about the manner petitioner was admitted into the country and asked for her deportation. Tolling the prescriptive period from November 19, 1980, when Leonardo C. Banez informed the CID of the illegal entry of petitioner into the country, more than five years had elapsed before the issuance of the order of her deportation on September 27, 1990. — oOo — ANTONIO BENGSON III, v. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and TEODORO C. CRUZ G.R. No. 142840, 7 May 2001, EN BANC (Kapunan, J.) Cruz was a natural-born citizen of the Philippines. Cruz was born in San Clemente, Tarlac, on April 27, 1960, of Filipino parents. The fundamental law then applicable was the 1935 Constitution. In 1985, however, UNIVERSITY
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CONFLICT OF LAWS 2012-2013 respondent Cruz enlisted in the United States Marine Corps and, without the consent of the Republic of the Philippines, took an oath of allegiance to the United States. As a consequence, Cruz lost his Filipino citizenship for under Commonwealth Act No. 63, Section 1(4), a Filipino citizen may lose his citizenship by, among others, "rendering service to or accepting commission in the armed forces of a foreign country." Whatever doubt that remained regarding his loss of Philippine citizenship was erased by his naturalization as a U.S. citizen on June 5, 1990, in connection with his service in the U.S. Marine Corps. In 1994, Cruz reacquired his Philippine citizenship through repatriation under Republic Act No. 2630. Cruz ran for and was elected as the Representative of the Second District of Pangasinan in the May 11, 1998 elections. Cruz won by a convincing margin of 26,671 votes over Antonio Bengson III, who was then running for reelection. Bengson filed a case for Quo Warranto Ad Cautelam with respondent House of Representatives Electoral Tribunal (HRET) claiming that Cruz was not qualified to become a member of the House of Representatives since he is not a natural-born citizen as required under Article VI, Section 6 of the Constitution. The HRET dismissed the petition. ISSUE:
Whether or not a natural-born Filipino who became an American citizen, can still be considered a naturalborn Filipino upon his reacquisition of Philippine citizenship HELD:
Petition GRANTED. The 1987 Constitution enumerates who are Filipino citizens as follows: 1. Those who are citizens of the Philippines at the time of the adoption of this Constitution; 2. Those whose fathers or mothers are citizens of the Philippines; 3. Those born before January 17, 1973 of Filipino mothers, who elect Philippine citizenship upon reaching the age of majority, and 4. Those who are naturalized in accordance with law. There are two ways of acquiring citizenship: (1) by birth, and (2) by naturalization. These ways of acquiring citizenship correspond to the two kinds of citizens: the natural-born citizen, and the naturalized citizen. A person who at the time of his birth is a citizen of a particular country, is a natural-b orn citizen thereof As defined in the same Constitution, natural-born citizens "are those citizens of the Philippines from birth without having to perform any act to acquire or perfect his Philippine citizenship." On the other hand, naturalized citizens are those who have become Filipino citizens through naturalization, generally under Commonwealth Act No. 473, otherwise known as the Revised Naturalization Law, which repealed the former Naturalization Law (Act No. 2927), and by Republic Act No. 530. To be naturalized, an applicant has to prove that he possesses all the qualifications and none of the disqualifications provided by law to become a Filipino citizen. The decision granting Philippine citizenship becomes executory only after two (2) years from its promulgation when the court is satisfied that during the intervening period, the applicant has (1) not left the Philippines; (2) has dedicated himself to a lawful calling or profession; (3) has not been convicted of any offense or violation of Government promulgated rules; or (4) committed any act prejudicial to the interest of the nation or contrary to any Government announced policies. Naturalization v. Repatriation
Filipino citizens who have lost their citizenship may however reacquire the same in the manner provided by law. Commonwealth Act. No. 63 (C.A. No. 63), enumerates the three modes by which Philippine citizenship may be reacquired by a former citizen: (1) by naturalization, (2) by repatriation, and (3) by direct act of Congress. Naturalization is a mode for both acquisition and reacquisition of Philippine citizenship. As a mode of initially acquiring Philippine citizenship, naturalization is governed by Commonwealth Act No. 473, as amended. On the other hand, naturalization as a mode for reacquiring Philippine citizenship is governed by Commonwealth Act No. 63. Under this law, a former Filipino citizen who wishes to reacquire Philippine citizenship must possess certain qualifications and none of the disqualifications mentioned in Section 4 of C.A. 473.
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CONFLICT OF LAWS 2012-2013 Repatriation, on the other hand, may be had under various statutes by those who lost their citizenship due to: (1) desertion of the armed forces; (2) service in the armed forces of the allied forces in World War II; (3) service in the Armed Forces of the United States at any other time; (4) marriage of a Filipino woman to an alien; and (5) political and economic necessity. As distinguished from the lengthy process of naturalization, repatriation simply consists of the taking of an oath of allegiance to the Republic of the Philippines and registering said oath in the Local Civil Registry of the place where the person concerned resides or last resided. Moreover, repatriation results in the recovery of the original nationality . This means that a naturalized Filipino who lost his citizenship will be restored to his prior status as a naturalized Filipino citizen. On the other hand, if he was originally a natural-born citizen before he lost his Philippine citizenship, he will be restored to his former status as a natural-born Filipino. In Cruz's case, he lost his Filipino citizenship when he rendered service in the Armed Forces of the United States. However, Cruz subsequently reacquired Philippine citizenship under R.A. No. 2630. Having thus taken the required oath of allegiance to the Republic and having registered the same in the Civil Registry of Magantarem, Pangasinan in accordance with the aforecited provision, Cruz is deemed to have recovered his original status as a natural-born citizen, a status which he acquired at birth as the son of a Filipino father. It bears stressing that the act of repatriation allows him to recover, or return to, his original status before he lost his Philippine citizenship. Bengson's contention that respondent Cruz is no longer a natural-born citizen since he had to perform an act to regain his citizenship is untenable. Two requisites must concur for a person to be considered as natural-born citizen: (1) a person must be a Filipino citizen from birth and (2) he does not have to perform any act to obtain or perfect his Philippine citizenship. The present Constitution, however, now considers those born of Filipino mothers before the effectivity of the 1973 Constitution and who elected Philippine citizenship upon reaching the majority age as natural-born. After defining who are natural-born citizens, Section 2 of Article IV adds a sentence: "Those who elect Philippine citizenship in accordance with paragraph (3), Section 1 hereof shall be deemed natural-born citizens." Consequently, only naturalized Filipinos are considered not natural-born citizens. It is apparent from the enumeration of who are citizens under the present Constitution that there are only two classes of citizens: (1) those who are natural-born and (2) those who are naturalized in accordance with law. A citizen who is not a naturalized Filipino, i.e., did not have to undergo the process of naturalization to obtain Philippine citizenship, necessarily is a natural-born Filipino. — oOo — TUAN ANH NGUYEN, et al. v. IMMIGRATION AND NATURALIZATION SERVICE No. 99-2071, 11 June 2001 (Kennedy, J.) Tuan Anh Nguyen was born in Saigon, Vietnam in 1969 to Joseph Boulais and a Vietnamese citizwn. Boulais always has been a citizen of the United States, and he was in Vietnam under the employ of a corporation. Nguyen, then almost 6 years of age, came to the United States. Nguyen became a lawful permanent resident and was raised in Texas by Boulais. For the 2 counts of sexual assault on a child, Nguyen, already 22 years of age, pleaded guilty. Nguyen was sentenced to 8 years in prison on each count. Later on, the Immigration and Naturalization Service (INS) initiated deportation proceedings against Nguyen as an alien who had been convicted of 2 crimes involving moral turpitude. Initially, Nguyen testified that he is a citizen of Vietnam but later on he changed his position and argued that he is a U.S. citizen. The immigration judge found him deportable.
Boulais, meanwhile, obtained an order of parentage based on DNA testing. Nguyen‘s appeal, on the other hand, was dismissed because of his failure to establish certain requirements. The Court of Appeals, rejected
Nguyen‘s claim that the requirements under Section 1409 of 8 U.S.C violates equal protection by providing different citizenship rules for children born abroad and out of wedlock depending on whether the citizen parent is the mother or mother. ISSUE:
Whether or not Section 1409 violates equal protection UNIVERSITY
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HELD:
Petition DENIED. The general requirement for acquisition of citizenship by a child born outside the United States and its outlying possessions and to parents who are married, one of whom is a citizen and the other of whom is an alien, is set forth in 8 U. S. C. § 1401(g). The statute provides that the child is also a citizen if, before the birth, the citizen parent had been physically present in the United States for a total of five years, at least two of which were after the parent turned 14 years of age. As to an individual born under the same circumstances, save that the paren ts are unwed, § 1409(a) sets forth the following requirements where the father is the citizen parent and the mother is an alien: 1. a blood relationship between the person and the father is established by clear and convincing evidence, 2. the father had the nationality of the United States at the time of the person‘s birth, 3. the father (unless deceased) has agreed in writing to provide financial support for the person until the person reaches the age of 18 years, and 4. while the person is under the age of 18 years — a. the person is legitimated under the law of the person‘s residence or domicile, b. the father acknowledges paternity of the person in writing under oath, or c. the paternity of the person is established by adjudication of a competent court.‖ In addition, § 1409(a) incorporates by reference, as to the citizen parent, the residency requirement of § 1401(g).
When the citizen parent of the child born abroad and out of wedlock is the child‘s mother, the requirements for the transmittal of citizenship are described in § 1409(c):
―(c) Notwithstanding the provision of subsection (a) of this section, a person born, after December 23, 1952, outside the United States and out of wedlock shall be held to have acquired at birth the nationality status of his mother, if the mother had the nationality of the United States at the time of such person‘s birth, and if the mother had previously been physically present in the United States or
one of its outlying possessions for a continuous period of one year.‖
Section 1409(a) thus imposes a set of requirements on the children of citizen fathers born abroad and out of wedlock to a noncitizen mother that are not imposed under like circumstances when the citizen parent is the mother. Gender-based classification
For a gender-based classification to withstand equal protection scrutiny, it must be established ―at least that
the [challenged] classification serves ―important governmental objectives and that the discriminatory means
employed‖ are ―substantially related to the achievement of those objectives.‖ For reasons to follow, we conclude § 1409 satisfies this standard
Before considering the important governmental interests advanced by the statute, two observations concerning the operation of the provision are in order. First, a citizen mother expecting a child and living abroad has the right to reenter the United States so the child can be born here and be a 14th Amendment citizen. From one perspective, then, the statute simply ensures equivalence between two expectant mothers who are citizens abroad if one chooses to reenter for the child‘s birth and the other chooses not to ret urn, or does not have the means to do so. This equivalence is not a factor if the single citizen parent living abroad is the father . For, unlike the unmarried mother, the unmarried father as a general rule cannot control where the child will be born. Second, although § 1409(a)(4) requires certain conduct to occur before the child of a citizen father, born out of wedlock and abroad, reaches 18 years of age, it imposes no limitations on when an individual who qualifies under the statute can claim citizenship. The statutory treatment of citizenship is identical in this respect whether the citizen parent is the mother or the father. A person born to a citizen parent of either gender may assert citizenship, assuming compliance with statutory preconditions, regardless of his or her age. And while the conditions necessary
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CONFLICT OF LAWS 2012-2013 for a citizen mother to transmit citizenship under § 1409(c) exist at birth, citizen fathers and/or their children have 18 years to satisfy the requirements of § 1409(a)(4). The statutory distinction relevant in this case, then, is that § 1409(a)(4) requires one of three affirmative steps to be taken if the citizen parent is the father, but not if the citizen parent is the mother: legitimation; a declaration of paternity under oath by the father; or a court order of paternity. Congress‘ decision to impose requirements on unmarried fathers that differ from those on unmarried mothers is based on the significant difference between their respective relationships to the potential citizen at the time of birth. Specifically, the imposition of the requirement for a paternal relationship, but not a maternal one, is justified by two important governmental objectives. A
The first governmental interest to be served is the importance of assuring that a biological parent-child relationship exists. In the case of the mother, the relation is verifiable from the birth itself. The mother‘s status is documented in most instances by the birth certificate or hospital records and the witnesses who attest to her having given birth. In the case of the father, the uncontestable fact is that he need not be present at the birth. If he is present, furthermore, that circumstance is not incontrovertible proof of fatherhood. Fathers and mothers are not similarly situated with regard to the proof of biological parenthood. Section 1409(a)(4)‘s provision of three options — is designed to for a father seeking to establish paternity — legitimation, paternity oath, and court order of paternity ensure an acceptable documentation of paternity. Nguyen, et al, argue that the requirement of § 1409(a)(1), that a father provide clear and convincing evidence of parentage, is sufficient to achieve the end of establishing paternity, given the sophistication of modern DNA tests. Section 1409(a)(1) does not actually mandate a DNA test, however. With respect to DNA testing, the expense, reliability, and availability of such testing in various parts of the world may have been of particular concern to Congress. The requirement of § 1409(a)(4) represents a reasonable conclusion by the legislature that the satisfaction of one of several alternatives will suffice to establish the blood link between father and child required as a predicate
to the child‘s acquisition of citizenship.
To require Congress to speak without reference to the gender of the parent with regard to its objective of ensuring a blood tie between parent and child would be to insist on a hollow neutrality. Given that the mother is always present at birth, but that the father need not be, the facially neutral rule would sometimes require fathers to take additional affirmative steps which would not be required of mothers, whose names will appear on the birth certificate as a result of their presence at the birth, and who will have the benefit of witnesses to the birth to call upon. B
The second important governmental interest furthered in a substantial manner by § 1409(a)(4) is the determination to ensure that the child and the citizen parent have some demonstrated opportunity or potential to develop not just a relationship that is recognized, as a formal matter, by the law, but one that consists of the real, everyday ties that provide a connection between child and citizen parent and, in turn, the United States. In the case of a citizen mother and a child born overseas, the opportunity for a meaningful relationship between citizen parent and child inheres in the very event of birth, an event so often critical to our constitutional and statutory understandings of citizenship. There is at least an opportunity for mother and child to develop a real, meaningful relationship. The same opportunity does not result from the event of birth, as a matter of biological inevitability, in the case of the unwed father. Given the 9-month interval between conception and birth, it is not always certain that a
father will know that a child was conceived, nor is it always clear that even the mother will be sure of the father‘s identity. This fact takes on particular significance in the case of a child born overseas and out of wedlock.
The ease of travel and the willingness of Americans to visit foreign countries have resulted in numbers of trips abroad that must be of real concern. Principles of equal protection do not require Congress to ignore this reality. To the contrary, these facts demonstrate the critical importance of the Government‘s interest in ensuring some opportunity for a tie between citizen father and foreign born child which is a reasonable substitute for the opportunity manifest between mother and child at the time of birth. Indeed, especially in light of the number of Americans who take short sojourns abroad, the prospect that a father might not even know of the conception is a UNIVERSITY
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CONFLICT OF LAWS 2012-2013 realistic possibility. Even if a father knows of the fact of conception, moreover, it does not follow that he will be present at the birth of the child. Thus, unlike the case of the mother, there is no assurance that the father and his biological child will ever meet. Without an initial point of contact with the child by a father who knows the child is his own, there is no opportunity for father and child to begin a relationship. Section 1409 takes the unremarkable step of ensuring that such an opportunity, inherent in the event of birth as to the mother-child relationship, exists between father and child before citizenship is conferred upon the latter. — oOo — SCHNEIDER v. RUSK 377 U.S. 163 (1964), was a United States Supreme Court case which invalidated a l aw that treated naturalized and native-born citizens differentially under the due process clause of the Fifth Amendment.
Angelika Schneider, who was born in Germany, came to the US with her parents as a child and acquired derivative American citizenship. Upon graduation from college, she moved back to America, married a German national, and, except for two visits back to this country, has lived in Germany for the past eight years. The State Department denied her a passport, certifying that she had lost her American citizenship under § 352(a)(1) of the Immigration and Nationality Act of 1952, which provides that a naturalized citizen loses citizenship by continuous residence for three years in the country of origin. ISSUE: W said provision of the Immigration and Nationality Act is constitutional. HELD: Petition GRANTED.
§ 352(a)(1) is discriminatory, and therefore violative of due process under the Fifth Amendment of the Constitution, since no restriction against the length of foreign residence applies to native-born citizens. We start from the premise that the rights of citizenship of the native born and of the naturalized person are of the same dignity, and are coextensive. The only difference drawn by the Constitution is that only the "natural born" citizen is eligible to be President. While the rights of citizenship of the native born derive from § 1 of the Fourteenth Amendment and the rights of the naturalized citizen derive from satisfying, free of fraud, the requirements set by Congress, the latter, apart from the exception noted, "becomes a member of the society, possessing all the rights of a native citizen, and standing, in the view of the constitution, on the footing of a native. The constitution does not authorize Congress to enlarge or abridge those rights. The simple power of the national Legislature is to prescribe a uniform rule of naturalization, and the exercise of this power exhausts it so far as respects the individual." In Kennedy v. Mendoza-Martinez, supra, a divided Court held that it was beyond the power of Congress to deprive an American of his citizenship automatically and without any prior judicial or administrative proceedings because he left the United States in time of war to evade or avoid training or service in the Armed Forces. The Court held that it was an unconstitutional use of congressional power because it took away citizenship as punishment for the offense of remaining outside the country to avoid military service without, at the same time, affording him the procedural safeguards granted by the Fifth and Sixth Amendments. Yet even the dissenters, who felt that flight or absence to evade the duty of helping to defend the country in time of war amounted to manifest nonallegiance, made a reservation. This statute proceeds on the impermissible assumption that naturalized citizens as a class are less reliable, and bear less allegiance to this country than do the native born. This is an assumption that is impossible for us to make. Moreover, while the Fifth Amendment contains no equal protection clause, it does forbid discrimination that is "so unjustifiable as to be violative of due process." A native-born citizen is free to reside abroad indefinitely without suffering loss of citizenship. The discrimination aimed at naturalized citizens drastically limits their rights to live and work abroad in a way that other citizens may. It creates indeed a second-class citizenship. Living abroad, whether the citizen be naturalized or native born, is no badge of lack of allegiance, and in no way evidences a voluntary renunciation of nationality and allegiance. It may indeed be compelled by family, business, or other legitimate reasons.
— oOo — TROP v. DULLES 356 U.S. 86 (1958), was a federal case in the United States in which the Supreme Court ruled, 5-4, that it was unconstitutional for the government to revoke the citizenship of a U.S. citizen as a punishment.
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CONFLICT OF LAWS 2012-2013 Albert Trop was a natural born citizen of the United States who, while serving as a private in the United States Army in 1944, deserted from an Army stockade in Casablanca, Morocco. The next day, he willingly surrendered to an Army officer and was taken back to the base, where he was subsequently court-martialled, found guilty, and sentenced to three years at hard labor, forfeiture of pay, and a dishonorable discharge. In 1952, Trop applied for a passport, which was denied because the Nationality Act of 1940 provided that members of the armed forces of the United States who deserted would lose their citizenship. Trop filed suit in federal courts seeking declaratory judgment that he was a U.S. citizen. ISSUE: W the government can revoke the citizenship of a national as a punishment. HELD: Petition
GRANTED.
Citing Perez v. Brownell , the Court had held that citizenship could be divested in the exercise of the foreign affairs power. However, "denationalization as a punishment is barred by the Eighth Amendment," as this is "the total destruction of the individual's status in organized society." Section 401(g), the statute that decrees the forfeiture of this petitioner's citizenship, is based directly on a Civil War statute, which provided that a deserter would lose his "rights of citizenship." The meaning of this phrase was not clear. When the 1940 codification and revision of the nationality laws was prepared, the Civil War statute was amended to make it certain that what a convicted deserter would lose was nationality itself. In 1944, the statute was further amended to provide that a convicted deserter would lose his citizenship only if he was dismissed from the service or dishonorably discharged. At the same time, it was provided that citizenship could be regained if the deserter was restored to active duty in wartime with the permission of the military authorities. Though these amendments were added to ameliorate the harshness of the statute, their combined effect produces a result that poses far graver problems than the ones that were sought to be solved. Section 401(g), as amended, now gives the military authorities complete discretion to decide who among convicted deserters shall continue to be Americans and who shall be stateless. By deciding whether to issue and execute a dishonorable discharge and whether to allow a deserter to reenter the armed forces, the military becomes the arbiter of citizenship. And the domain given to it by Congress is not as narrow as might be supposed. Though the crime of desertion is one of the most serious in military law, it is by no no means a rare event for a soldier to be convicted of this crime. The elements of desertion are simply absence from duty plus the intention not to return. [n7] Into this [p91] category falls a great range of conduct, which may be prompted by a variety of motives -- fear, laziness, hysteria or any emotional imbalance. The offense may occur not only in combat, but also in training camps for draftees in this country. In Perez v. Brownell, supra, I expressed the principles that I believe govern the constitutional status of United [p92] States citizenship. It is my conviction that citizenship is not subject to the general powers of the National Government, and therefore cannot be divested in the exercise of those powers. The right may be voluntarily relinquished or abandoned either by express language or by language and conduct that show a renunciation of citizenship. Under these principles, this petitioner has not lost his citizenship. Desertion in wartime, though it may merit the ultimate penalty, does not necessarily signify allegiance to a foreign state. Section 401(g) is not limited to cases of desertion to the enemy, and there is no such element in this case. This soldier committed a crime for which he should be and was punished, but he did not involve himself in any way with a foreign state. There was no dilution of his allegiance to this country. The fact that the desertion occurred on foreign soil is of no consequence. Citizenship is not a license that expires upon misbehavior. The duties of citizenship are numerous, and the discharge of many of these obligations is essential to the security and wellbeing of the Nation. The citizen who fails to pay his taxes or to abide by the laws safeguarding the integrity of elections deals a dangerous blow to his country. But could a citizen be deprived of his nationality for evading these basic responsibilities of citizenship? In time of war, the citizen's duties include not only the military defense of the Nation, but also full participation in the manifold activities of the civilian ranks. Failure to perform any of these obligations may cause the Nation serious injury, and, in appropriate circumstances, the punishing power is available to deal with derelictions of duty. But citizenship is not lost every time a duty of citizenship is shirked. And the deprivation of citizenship [p93] is not a weapon that the Government may use to express its displeasure at a citizen's conduct, however reprehensible that conduct may be. As long as a person does not voluntarily renounce or abandon his citizenship, and this petitioner has done neither, I believe his fundamental right of citizenship is secure. On this ground alone, the judgment in this case should be reversed.
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— oOo — AASJS (ADVOCATES AND ADHERENTS OF SOCIAL JUSTICE FOR SCHOOL TEACHERS AND ALLIED WORKERS) MEMBER - HECTOR GUMANGAN CALILUNG, Petitioner, v. THE HO NORABLE SIMEON DATUMANONG, in his official capacity as the Secretary of Justice,Respondent. G.R. No. 160869
May 11, 2007
This is a case about the constitutionality of Republic Act No. 9225, entitled " An Act Making the Citizenship of Philippine Citizens Who Acquire Foreign Citizenship Permanent, Amending for the Purpose Commonwealth Act No. 63, As Amended, and for Other Purposes. " Petitioner avers that Rep. Act No. 9225 is unconstitutional as it violates Section 5, Article IV of the 1987 Constitution that states, "Dual allegiance of citizens is inimical to the national interest and shall be dealt with by law." Rep. Act No. 9225 states that natural-born citizens of the Philippines who became a citizen of another country shall be deemed not to have lost their Philippine citizenship upon the taking of the oath. Petitioner contends that Rep. Act No. 9225 cheapens Philippine citizenship. He avers that Sections 2 and 3 of Rep. Act No. 9225, together, allow dual allegiance and not dual citizenship. Petitioner maintains that Section 2 allows all Filipinos, either natural-born or naturalized, who become foreign citizens, to retain their Philippine citizenship without losing their foreign citizenship. Section 3 permits dual allegiance because said law allows natural-born citizens of the Philippines to regain their Philippine citizenship by simply taking an oath of allegiance without forfeiting their foreign allegiance. The Constitution, however, is categorical that dual allegiance is inimical to the national interest. ISSUE: Whether RA No. 9225 is unconstitutional. HELD: Petition DENIED.
In resolving the aforecited issues in this case, resort to the deliberations of Congress is necessary to determine the intent of the legislative branch in drafting the assailed law. During the deliberations, the issue of whether Rep. Act No. 9225 would allow dual allegiance had in fact been the subject of debate. The record of the legislative deliberations reveals the following: Pursuing his point, Rep. Dilangalen noted that under the measure, two situations exist - - the retention of foreign citizenship, and the reacquisition of Philippine citizenship. In this case, he observed that there are two citizenships and therefore, two allegiances. He pointed out that under the Constitution, dual allegiance is inimical to public interest. He thereafter asked whether with the creation of dual allegiance by reason of retention of foreign citizenship and the reacquisition of Philippine citizenship, there will now be a violation of the Constitution. xxxx Rep. Locsin clarified that by swearing to the supreme authority of the Republic, the person implicitly renounces his foreign citizenship. Rep. Locsin replied that it is imperative that those who have dual allegiance contrary to national interest should be dealt with by law. However, he said that the dual allegiance problem is not addressed in the bill. He then cited the Declaration of Policy in the bill which states that "It is hereby declared the policy of the State that all citizens who become citizens of another country shall be deemed not to have lost their Philippine citizenship under the conditions of this Act." He stressed that what the bill does is recognize Philippine citizenship but says nothing about the other citizenship. Rep. Locsin further pointed out that the problem of dual allegiance is created wherein a natural-born citizen of the Philippines takes an oath of allegiance to another country and in that oath says that he abjures and absolutely renounces all allegiance to his country of origin and swears allegiance to that foreign country. The original Bill had left it at this stage, he explained. In the present measure, he clarified, a person is required to take an oath and the last he utters is one of allegiance to the country. He then said that the problem of dual allegiance is no longer the problem of the Philippines but of the other foreign country .4 (Emphasis supplied.) From the above excerpts of the legislative record, it is clear that the intent of the legislature in drafting Rep. Act No. 9225 is to do away with the provision in Commonwealth Act No. 63 5 which takes away Philippine citizenship from UNIVERSITY
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CONFLICT OF LAWS 2012-2013 natural-born Filipinos who become naturalized citizens of other countries. What Rep. Act No. 9225 does is allow dual citizenship to natural-born Filipino citizens who have lost Philippine citizenship by reason of their naturalization as citizens of a foreign country. On its face, it does not recognize dual allegiance. By swearing to the supreme authority of the Republic, the person implicitly renounces his foreign citizenship. Plainly, from Section 3, Rep. Act No. 9225 stayed clear out of the problem of dual allegiance and shifted the burden of confronting the issue of whether or not there is dual allegiance to the concerned foreign country. What happens to the other citizenship was not made a concern of Rep. Act No. 9225. Moreover, Section 5, Article IV of the Constitution is a declaration of a policy and it is not a self-executing provision. The legislature still has to enact the law on dual allegiance. In Sections 2 and 3 of Rep. Act No. 9225, the framers were not concerned with dual citizenship per se, but with the status of naturalized citizens who maintain their allegiance to their countries of origin even after their naturalization. 9 Congress was given a mandate to draft a law that would set specific parameters of what really constitutes dual allegiance. 10 Until this is done, it would be premature for the judicial department, including this Court, to rule on issues pertaining to dual allegiance. Neither can we subscribe to the proposition of petitioner that a law is not needed since the case of Mercado had already set the guidelines for determining dual allegiance. Petitioner misreads Mercado. That case did not set the parameters of what constitutes dual allegiance but merely made a distinction between dual allegiance and dual citizenship. — oOo — ATTY. ROMULO B. MACALINTAL, petitioner, vs. COMMISSION ON ELECTIONS, HON. ALBERTO ROMULO, in his official capacity as Executive Secretary, and HON. EMILIA T. BONCODIN, Secretary of the Department of Budget and Management, respondents. G.R. No. 157013. July 10, 2003 Thus, Section 2, Article V of the Constitution came into being to remove any doubt as to the inapplicability of the residency requirement in Section 1. It is precisely to avoid any problems that could impede the implementation of its pursuit to enfranchise the largest number of qualified Filipinos who are not in the Philippines that the Constitutional Commission explicitly mandated Congress to provide a system for overseas absentee voting.
The issue in this case is about the constitutionality of R.A. No. 9189, ― An Act Providing for A System of Overseas Absentee Voting by Qualified Citizens of the Philippines Abroad, Appropriating Funds Therefor, and for Other Purposes .”
The petitioner raises three principal questions, pertinent in this subject is Issue No. 1: A. Does Section 5(d) of Rep. Act No. 9189 allowing the registration of voters who are immigrants or permanent residents in other countries by their mere act of executing an affidavit expressing their intention to return to the Philippines, violate the residency requirement in Section 1 of Article V of the Constitution? HELD: Petition DENIED.
Section 1, Article V of the Constitution specifically provides that suffrage may be exercised by (1) all citizens of the Philippines, (2) not otherwise disqualified by law, (3) at least eighteen years of age, (4) who are residents in the Philippines for at least one year and in the place where they propose to vote for at least six months immediately preceding the election. Under Section 5(d) of R.A. No. 9189, one of those disqualified from voting is an immigrant or permanent resident who is recognized as such in the host country unless he/she executes an affidavit declaring that he/she shall resume actual physical permanent residence in the Philippines not later than three years from approval of his/her registration under said Act. R.A. No. 9189 was enacted in obeisance to the mandate of the first paragraph of Section 2, Article V of the Constitution that Congress shall provide a system for voting by qualified Filipinos abroad. It must be stressed that Section 2 does not provide for the parameters of the exercise of legislative authority in enacting said law. Hence, in the absence of restrictions, Congress is presumed to have duly exercised its function as defined in Article VI (The Legislative Department) of the Constitution. To put matters in their right perspective, it is necessary to dwell first on the significance of absentee voting. The concept of absentee voting is relatively new. It is viewed thus: UNIVERSITY
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CONFLICT OF LAWS 2012-2013 The method of absentee voting has been said to be completely separable and distinct from the regular system of voting, and to be a new and different manner of voting from that previously known, and an exception to the customary and usual manner of voting.The right of absentee and disabled voters to cast their ballots at an election is purely statutory ; absentee voting was unknown to, and not recognized at, the common law. Absentee voting is an outgrowth of modern social and economic conditions devised to accommodate those engaged in military or civil life whose duties make it impracticable for them to attend their polling places on the day of election, and the privilege of absentee voting may flow from constitutional provisions or be conferred by statutes , existing in some jurisdictions, which provide in varying terms for the casting and reception of ballots by soldiers and sailors or other qualified voters absent on election day from the district or precinct of their residence. Such statutes are regarded as conferring a privilege and not a right, or an absolute right. When the legislature chooses to grant the right by statute, it must operate with equality among all the class to which it is granted; but statutes of this nature may be limited in their application to particular types of elections. The statutes should be construed in the light of any constitutional provisions affecting registration and elections , and with due regard to their texts prior to amendment and to predecessor statutes and the decisions thereunder; they should also be construed in the light of the circumstances under which they were enacted ; and so as to carry out the objects thereof, if this can be done without doing violence to their provisions and mandates. Further, in passing on statutes regulating absentee voting, the court should look to the whole and every part of the election laws, the intent of the entire plan, and reasons and spirit of their adoption, and .[29] (Emphasis supplied) try to give effect to every portion thereof Ordinarily, an absentee is not a resident and vice versa; a person cannot be at the same time, both a resident and an absentee. However, under our election laws and the countless pronouncements of the Court pertaining to elections, an absentee remains attached to his residence in the Philippines as residence is considered synonymous with domicile. 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 . In Uytengsu vs. Republic, we laid this distinction quite clearly:
―There is a difference between domicile and residence. ‗Residence‘ is used to indicate a place of abode, whether permanent or temporary; ‗domicile‘ denotes a fixed permanent residence to which, when absent, one has the intention of returning. A man may have a residence in one place and a domicile in another. Residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited time. A man can have but one domicile for the same purpose at any time, but he may have numerous places of residence. His place of residence is generally his place of domicile, but it is not by any means necessarily so since no length of residence without intention of
remaining will constitute domicile.‖
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 . Thus, the Constitutional Commission recognized the fact that while millions of Filipinos reside abroad principally for economic reasons and hence they contribute in no small measure to the economic uplift of this country, their
voices are marginal insofar as the choice of this country‘s leaders is concerned.
The Constitutional Commission realized that under the laws then existing and considering the novelty of the system of absentee voting in this jurisdiction, vesting overseas Filipinos with the right to vote would spawn constitutional problems especially because the Constitution itself provides for the residency requirement of voters. Thus, Section 2, Article V of the Constitution came into being to remove any doubt as to the inapplicability of the residency requirement in Section 1. It is precisely to avoid any problems that could impede the implementation of its pursuit to enfranchise the largest number of qualified Filipinos who are not in the Philippines that the Constitutional Commission explicitly mandated Congress to provide a system for overseas absentee voting. UNIVERSITY
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CONFLICT OF LAWS 2012-2013 Clearly therefrom, the intent of the Constitutional Commission is to entrust to Congress the responsibility of devising a system of absentee voting. The qualifications of voters as stated in Section 1 shall remain except for the residency requirement. This is in fact the reason why the Constitutional Commission opted for the term qualified Filipinos abroad with respect to the system of absentee voting that Congress should draw up. As stressed by Commissioner Monsod, by the use of the adjective qualified with respect to Filipinos abroad, the assumption is that
they have the ―qualifications and none of the disqualifications to vote.‖
It is clear that the Constitutional Commission intended to enfranchise as much as possible all Filipino citizens abroad who have not abandoned their domicile of origin. The Commission even intended to extend to young Filipinos who reach voting age abroad whose parents‘ domicile of origin is in the Philippines, and consider them qualified as voters for the first time. As finally approved into law, Section 5(d) of R.A. No. 9189 specifically disqualifies an immigrant or permanent resident who is ―recognized as such in the host country‖ because immigration or permanent residence in another
country implies renunciation of one‘s residence in his country of origin. However, same Section allows an
immigrant and permanent resident abroad to register as voter for as long as he/she executes an affidavit to show that he/she has not abandoned his domicile in pursuance of the constitutional intent expressed in Sections 1 and 2 of Article V that ― all citizens of the Philippines not otherwise disqualified by law‖ must be entitled to exercise the right of suffrage and, that Congress must establish a system for absentee voting; for otherwise, if actual, physical residence in the Philippines is required, there is no sense for the framers of the Constitution to mandate Congress to establish a system for absentee voting. Contrary to the claim of petitioner, the execution of the affidavit itself is not the enabling or enfranchising act. The affidavit required in Section 5(d) is not only proof of the intention of the immigrant or permanent resident to go back and resume residency in the Philippines, but more significantly, it serves as an explicit expression that he had not in fact abandoned his domicile of origin. Thus, it is not correct to say that the execution of the affidavit under Section 5(d) violates the Constitution that proscribes ―provisional registration or a promise by a voter to perform a
condition to be qualified to vote in a political exercise.‖
To repeat, the affidavit is required of immigrants and permanent residents abroad because by their status in their host countries, they are presumed to have relinquished their intent to return to this country; thus, without the affidavit, the presumption of abandonment of Philippine domicile shall remain. The jurisprudential declaration in Caasi vs. Court of Appeals that green card holders are disqualified to run for any elective office finds no application to the present case because the Caasi case did not, for obvious reasons, consider the absentee voting rights of Filipinos who are immigrants and permanent residents in their host countries. In the advent of The Overseas Absentee Voting Act of 2003 or R.A. 9189 , they may still be considered as a ―qualified citizen of the Philippines abroad‖ upon fulfillment of the requirements of registration under t he new law for the purpose of exercising their right of suffrage.
It must be emphasized that Section 5(d) does not only require an affidavit or a promise to ―resume actual physical permanent residence in the Philippines not later than three years from appr oval of his/her registration,‖ the Filipinos abroad must also declare that they have not applied for citizenship in another country. Thus, they must return to the Philippines; otherwise, their failure to return ―shall be cause for the removal‖ of their na mes ―from the National Registry of Absentee Voters and his/her permanent disqualification to vote in absentia.” Thus, Congress crafted a process of registration by which a Filipino voter permanently residing abroad who is at least eighteen years old, not otherwise disqualified by law, who has not relinquished Philippine citizenship and who has not actually abandoned his/her intentions to return to his/her domicile of origin, the Philippines, is allowed to register and vote in the Philippine embassy, consulate or other foreign service establishments of the place which has jurisdiction over the country where he/she has indicated his/her address for purposes of the elections, while providing for safeguards to a clean election.
Contrary to petitioner‘s claim tha t Section 5(d) circumvents the Constitution, Congress enacted the law prescribing a system of overseas absentee voting in compliance with the constitutional mandate. Such mandate expressly requires that Congress provide a system of absentee voting that necessarily presupposes that the ―qualified citizen of the Philippines abroad‖ is not physically present in the country. The provisions of Sections 5(d) and 11 are components of the system of overseas absentee voting established by R.A. No. 9189. The qualified Filipino abroad who executed the affidavit is deemed to have retained his domicile in the Philippines. He is presumed not to have lost his domicile by his physical absence from this country. His having become an immigrant or permanent resident of his host country does not necessarily imply an abandonment of his intention to return to his domicile of origin,
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CONFLICT OF LAWS 2012-2013 the Philippines. Therefore, under the law, he must be given the opportunity to express that he has not actually abandoned his domicile in the Philippines by executing the affidavit required by Sections 5(d) and 8(c) of the law.
Petitioner‘s speculative apprehension that the implementation of Section 5(d) would affect the credibility of the elections is insignificant as what is important is to ensure that all those who possess the qualifications to vote on the date of the election are given the opportunity and permitted to freely do so. The COMELEC and the Department of Foreign Affairs have enough resources and talents to ensure the integrity and credibility of any election conducted pursuant to R.A. No. 9189. As to the eventuality that the Filipino abroad would renege on his undertaking to return to the Philippines, the penalty of perpetual disenfranchisement provided for by Section 5(d) would suffice to serve as deterrence to noncompliance with his/her undertaking under the affidavit.
Petitioner argues that should a sizable number of ―immigrants‖ renege on their promise to return, the result of the elections would be affected and could even be a ground to contest the proclamation of the winning candidates and cause further confusion and doubt on the integrity of the results of the election. Indeed, the probability that after an immigrant has exercised the right to vote, he shall opt to remain in his host country beyond the third year from the execution of the affidavit, is not farfetched. However, it is not for this Court to determine the wisdom of a legislative exercise. As expressed in Tañada vs. Tuvera ,[40] the Court is not called upon to rule on the wisdom of the law or to repeal it or modify it if we find it impractical. Congress itself was conscious of said probability and in fact, it has addressed the expected problem. Section 5(d) itself provides for a deterrence which is that the Filipino who fails to return as promised stands to lose his right of suffrage. Under Section 9, should a registered overseas absentee voter fail to vote for two consecutive national elections, his name may be ordered removed from the National Registry of Overseas Absentee Voters.
— oOo — LOIDA NICOLAS-LEWIS, GREGORIO B. MACABENTA, ALEJANDRO A. ESCLAMADO, ARMANDO B. HEREDIA, REUBEN S. SEGURITAN, ERIC LACHICA FURBEYRE, TERESITA A. CRUZ, JOSEFINA OPENA DISTERHOFT, MERCEDES V. OPENA, CORNELIO R. NATIVIDAD, EVELYN D. NATIVIDAD, Petitioners - versus - COMMISSION ON ELECTIONS, G.R. No. 162759. Garcia, J: In May 2004 election the COMELEC rejected the request and petition of the petitioners, who are dual citizens by the decree of RA 9225, to vote under RA 9189 or the Overseas Absentee Voting Law. It posits that petitioners lack the residency requirement as provided by Article V of the Constitution for one to exercise the right of suffrage. Respondent COMELEC maintains that RA 9189 must yield to Article V of the Constitution which provide that a one must be a resident f the Philippines for a period of one (1) year and have resided for (6) months in the place where he supposed to vote, in order to exercise his right of suffrage.
The petitioners, ―duals‖ were not able to participate in the May 2004 Election but this present petition seeks for their eligibility in future elections. ISSUE: WON the duals who have re-acquired their Filipino Citizenship may vote under the Overseas Absentee Voting Act or RA 9189. HELD: Petition GRANTED.
As may be noted, there is no provision in the dual citizenship law - R.A. 9225 - requiring "duals" to actually establish residence and physically stay in the Philippines first before they can exercise their right to vote. On the contrary, R.A. 9225, in implicit acknowledgment that ―duals‖ are most likely non -residents, grants under its Section 5(1) the same right of suffrage as that granted an absentee voter under R.A. 9189. It cannot be overemphasized that R.A. 9189 aims, in essence, to enfranchise as much as possible all overseas Filipinos who, save for the residency requirements exacted of an ordinary voter under ordinary conditions, are qualified to vote. It is in pursuance of that intention that the Commission provided for Section 2 [Article V] immediately after the residency requirement of Section 1. By the doctrine of necessary implication in statutory construction, …, the strategic location of S ection 2 indicates that the Constitutional Commission provided for an exception to the actual residency requirement of Section 1 with respect to qualified Filipinos abroad. The same Commission has in effect declared that qualified Filipinos who are not in the Philippines may be allowed to vote even though they do not satisfy the residency requirement in Section 1, Article V of the Constitution. UNIVERSITY
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Considering the unison intent of the Constitution and R.A. 9189 and the expansion of the scope of that law with the passage of R.A. 9225, the irresistible conclusion is that "duals" may now exercise the right of suffrage thru the absentee voting scheme and as overseas absentee voters.
— oOo — EUSEBIO EUGENIO K. LOPEZ, petitioner, -versus- COMELEC and Tessie Villanueva, respondents G.R. No. 182701. REYES, R.T., J .: Petitioner Eusebio Eugenio K. Lopez was a candidate for the position of Chairman of Barangay Bagacay, San Dionisio, Iloilo City in the synchronized Barangay and Sangguniang Kabataan Elections held on October 29, 2007. On October 25, 2007, respondent Villanueva filed a petition before the Provincial Election Supervisor of the Province of Iloilo, praying for the disqualification of petitioner on the ground that he is an American citizen, hence, ineligible from running for any public office. In his Answer, petitioner argued that he is a dual citizen, a Filipino and at the same time an American, by virtue of Republic Act (R.A.) No. 9225, otherwise known as the Citizenship Retention and Re-acquisition Act of 2003. He returned to the Philippines and resided in Barangay Bagacay. Thus, he said, he possessed all the qualifications to run for Barangay Chairman. After the votes were canvassed, petitioner emerged as the winner. On February 6, 2008, COMELEC issued the assailed Resolution granting the petition for disqualification. ISSUE: WON Petitioner is disqualified to run for public office for failing to makee a personal and sworn renunciation of any and all foreign citizenship. HELD: Petition DISMISSED.
We n ote, however, that the operative facts that led to this Court‘s ruling in Valles are substantially different from the present case. In Valles , the candidate, Rosalind Ybasco Lopez, was a dual citizen by accident of birth on foreign soil. Lopez was born of Filipino parents in Australia, a country which follows the principle of jus soli . As a result, she acquired Australian citizenship by operation of Australian law, but she was also considered a Filipino citizen under Philippine law. She did not perform any act to swear allegiance to a country other than the Philippines. In contrast, petitioner was born a Filipino but he deliberately sought American citizenship and renounced his Filipino citizenship. He later on became a dual citizen by re-acquiring Filipino citizenship.
More importantly, the Court‘s 2000 ruling in Valles has been superseded by the enactment of R.A. No. 9225 in 2003. R.A. No. 9225 expressly provides for the conditions before those who re-acquired Filipino citizenship may run for a public office in the Philippines. Section 5 of the said law states: Section 5. Civil and Political Rights and Liabilities . – Those who retain or re-acquire Philippine citizenship under this Act shall enjoy full civil and political rights and be subject to all attendant liabilities and responsibilities under existing laws of the Philippines and the following conditions: xxxx (2) Those seeking elective public office in the Philippines shall meet the qualification for holding such public office as required by the Constitution and existing laws and, at the time of the filing of the certificate of candidacy, make a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to administer an oath. (Emphasis added)
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CONFLICT OF LAWS 2012-2013 Petitioner re-acquired his Filipino citizenship under the cited law. This new law explicitly provides that
should one seek elective public office, he should first ―make a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to administer an oath.‖ — oOo — F. MARRIAGE, DIVORCE AND OTHER ENCOUNTERS ALICE REYES VAN DORN, petitioner, v. HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch CX, Regional Trial Court of the National Capital Region Pasay City and RICHARD UPTON respondents. G.R. No. L-68470 October 8, 1985. MELENCIO-HERRERA, J.:
Petitioner Alice Reyes Van Dorn is a Filipino citizen while private respondent Richard Upton is a citizen of the United States when they were married in Hongkong. After their marriage they established their residence in the Philippines and they begot two children. In 1982, the parties were divorced in Nevada and that petitioner has remarried also in Nevada, this time to Theodore Van Dorn. Respondent Upton filed a suit against petitioner before the RTC of Pasay for the accounting of the business of petitioner Alice Van Dorn on the ground that the said business is a conjugal property. Petitioner maintains that respondent is estopped on questioning the said property because he declared in the divorce proceeding in Nevada that they have no community of property during their marriage. For his part, respondent avers that the Divorce Decree issued by the Nevada Court cannot prevail over the prohibitive laws of the Philippines and its declared national policy; that the acts and declaration of a foreign Court cannot, especially if the same is contrary to public policy, divest Philippine Courts of jurisdiction to entertain matters within its jurisdiction. ISSUE: WON the divorce obtained abroad has effect and recognized in the law of the Philippines. HELD:
It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, 5 only Philippine nationals are covered by the policy against absolute divorces the same being considered contrary to our concept of public police and morality. However, aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law. 6 In this case, the divorce in Nevada released private respondent from the marriage from the standards of American law, under which divorce dissolves the marriage. Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would have no standing to sue in the case below as petitioner's husband entitled to exercise control over conjugal assets. As he is bound by the Decision of his own country's Court, which validly exercised jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own representation before said Court from asserting his right over the alleged conjugal property. To maintain, as private respondent does, that, under our laws, petitioner has to be considered still married to private respondent and still subject to a wife's obligations under Article 109, et. seq . of the Civil Code cannot be just. Petitioner should not be obliged to live together with, observe respect and fidelity, and render support to private respondent. The latter should not continue to be one of her heirs with possible rights to conjugal property. She should not be discriminated against in her own country if the ends of justice are to be served.
— oOo — FE D. QUITA, petitioner , v. COURT OF APPEALS and BLANDINA DANDAN, respondents . G.R. No. 124862. December 22, 1998. BELLOSILLO, J .:
FE D. QUITA and Arturo T. Padlan, both Filipinos, were married in the Philippines on 18 May 1941. They were not however blessed with children. On 23 July 1954 she obtained a final judgment of divorce in San Francisco, California, USA. Petitioner had two other marriages subsequent to her divorced with Arturo. UNIVERSITY
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CONFLICT OF LAWS 2012-2013 On 16 April 1972 Arturo died. He left no will. In the intestate proceedings, respondent Blandina claims that he is the surviving spouse of Arturo and their marriage is valid. Artutro and private respondents had six (6) children. Their married was celebrated subsequent to the final decree of divorce obtained by petitioner in a foreign country. Petitioner maintains that she is still the surviving spouse because the divorce obtained from San Francisco, USA is not recognized here. The trial court invoking Tenchavez v. Escaño which held that "a foreign divorce between Filipino citizens sought and decreed after the effectivity of the present Civil Code (Rep. Act 386) was not entitled to recognition as valid in this jurisdiction," disregarded the divorce between petitioner and Arturo. In their appeal to the Court of Appeals, Blandina and her children assigned as one of the errors allegedly committed by the trial court the circumstance that the case was decided without a hearing, in violation of Sec. 1, Rule 90, of the Rules of Court, which provides that if there is a controversy before the court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled under the law, the controversy shall be heard and decided as in ordinary cases. Respondent appellate court found this ground alone sufficient to sustain the appeal; hence, it declared null and void
the trial court‘s decision and order of the trial court, and directed the remand of the case to the trial court for further proceedings ISSUE: WON the final decree of divorce obtained by Fe Quita is valid and recognized in the Philippines and that the case be remanded to the lower court. HELD: Petition DENIED.
We deduce that the finding on their (Fe Quita and Artuto Padlan) citizenship pertained solely to the time of their marriage as the trial court was not supplied with a basis to determine petitioner's citizenship at the time of their divorce. The doubt persisted as to whether she was still a Filipino citizen when their divorce was decreed. The trial court must have overlooked the materiality of this aspect. Once proved that she was no longer a Filipino citizen at the time of their divorce, Van Dorn would become applicable and petitioner could very well lose her right to inherit from Arturo. WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals ordering the remand of the case to the court of origin for further proceedings and declaring null and void its decision holding petitioner Fe D. Quita and Ruperto T. Padlan as intestate heirs is AFFIRMED.
— oOo — REPUBLIC OF THE PHILIPPINES v. CRASUS IYOY GR. No. 152577, 21 SEPTEMBER 2005, SECOND DIVISION (Chico-Nazario,J) By its plain and literal interpretation, Article 26, paragraph 2 of the Family Code of the Philippines cannot be applied to the case of respondent Crasus and his wife Fely because at the time Fely obt ained her divorce, she was still a Filipino citizen.
Respondent Crasus married Fely on December 16, 1961 in Cebu City. They had five children. After the celebration of their marriage, respondent discovered that Fely was ―hot -tempered, a nagger and extra vagant.‖ In 1984, Fely left the Philippines for the USA leaving all of their five children to the care of respondent. Barely a year after Fely left, respondent received a letter from her requesting that he sign the enclosed divorced papers but he disregarded the said request. Respondent Crasus learned, through the letters sent by Fely to their children, that Fely got married to an American, with whom she eventually had a child. Fely came back to the Philippines with her American family. She returned several times more in 1990, 1992 and in 1995. A complaint for declaration of nullity of marriage was filed by respondent Crasus on March 25, 1997 before the RTC. The RTC declared the marriage null and void on the ground of defendant‘s psychological incapacity a nd failure to fulfill her marital obligations. Petitioner Republic, believing that the judgment of RTC was contrary to law and evidence, filed an appeal with the Court of Appeals. The appellate court affirmed the judgment of RTC, finding no reversible error. It further ruled
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that defendant has undoubtedly acquired her American husband‘s citizenship and thus become an alien in when it applied Article 26 of the Family Code. ISSUE:
Whether or not defendant Fely was still a Filipino citizen when she obtaine d her divorce. HELD: PETITION GRANTED.
Article 26, paragraph 2 of the Family Code of the Philippines is not applicable to the case at bar.
―Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to
remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law.‖
This refers to a special situation wherein one of the couple getting married is a Filipino citizen and the other a foreigner at the time the marriage was celebrated. By its plain and literal interpretation, the said provision cannot be app;ied to the case at bar because at the time Fely obtained her divorce, she was still a Filipino citizen. Although the exact date was not established, Fely herself admitted in her answer that she obtained a divorce from respondent Crasus sometime after she left for the USA in 1984, after which she married her American husband in 1985. She also alleged that she had been an American citizen since 1988. At the time she filed for divorce, Fely was still a Filipino citizen and pursuant to the nationality principle embodied in Article 15 of the Civil Code, she was still bound by Philippine laws on family rights and duties, status, condition, and legal capacity, even when she was already living abroad. Philippine laws, then and even until now, do not allow and recognize divorce between Filipino spouses. Thus, Fely could not have validly obtained a divorce from respondent Crasus.
— oOo — REPUBLIC OF THE PHILIPPINES v. CIPRIANO ORBECIDO III GR No. 154380, 5 OCTOBER 2005, FIRST DIVISION (QUISIMBING, J) The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.
On May 24, 1981, Cipriano Orbecido III married Lady Myros M. Villanueva in Lam-an, Ozamis City. Their marriage was blessed with a son and a daughter, Kristoffer Simbortriz V. Orbecido and Lady Kimberly V. Orbecido.
In 1986, Cipriano‘s wife left for the United States bringing along their son Kristoffer. A few years later, Cipriano discovered that his wife had been naturalized as an American citizen. Sometime in 2000, respondent Orbecido learned from his son – who was living with his wife in the States – that his wife had remarried after obtaining her divorce decree. Thereafter, he filed a petition for authority to remarry with the trial court invoking par. 2 of Art. 26 of the Family Code. Having no opposition, on May 15, 2002, the Regional Trial Court of Zamboanga del Sur granted the petition of the respondent and allowed him to remarry.
The Solicitor General‘s motion for reconsideration was denied. In view of that, petitioner filed this petition for review on certiorari of the Decision of the Regional Trial Court. Herein petitioner raised the issue of the applicability of Art. 26 par. 2 to the instant case. The OSG contends that Paragraph 2 of Article 26 of the Family Code is not applicable to the instant case because it only applies to a valid mixed marriage; that is, a marriage celebrated between a Filipino citizen and an alien. UNIVERSITY
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ISSUES:
1) Whether or not Orbecido can remarry under Article 26(2). YES 2) Whether or not Article 26(2) should be interpreted to include cases involving parties who, at the time of the celebration of the marriage were Filipino citizens, but later on, one of them becomes naturalized as a foreign citizen and obtains a divorce decree. YES HELD: PETITION GRANTED.
The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.
In this case, when Cipriano‘s wife was naturalized as an American citizen, there was still a valid marriage that has been celebrated between her and Cipriano. As fate would have it, the naturalized alien wife subsequently obtained a valid divorce capacitating her to remarry. Thus Cipriano, the ―divorced‖ Filipino spouse, should be allowed to remarry. Paragraph 2 of Article 26 of the Family Code, should be interpreted to allow a Filipino citizen, who has been divorced by a spouse who had acquired foreign citizenship and remarried, also to remarry. However, we note that the records are bereft of competent evidence duly submitted by respondent concer ning the divorce decree and the naturalization of respondent‘s wife. It is settled rule that one who alleges a fact has the burden of proving it and mere allegation is not evidence. Accordingly, for his plea to prosper, respondent herein must prove his allegation that his wife was naturalized as an American citizen. Likewise, before a foreign divorce decree can be recognized by our own courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it. Such foreign law must also be proved as our courts cannot take judicial notice of foreign laws. Like any other fact, such laws must be alleged and proved. Furthermore, respondent must also show that the divorce decree allows his former wife to remarry as specifically required in Article 26. Otherwise, there would be no evidence sufficient to declare that he is capacitated to enter into another marriage.
— oOo — GERBERT CORPUZ v. DAISYLYN TIROL STO. TOMAS and The SOLICITOR GENERAL GR No. 186571, 11 AUGUST 2010, THIRD DIVISION (BRION, J) The foreign divorce decree is presumptive evidence of a right that clothes the party with legal interest to petition for its recognition in this jurisdiction.
Petitioner Gerbert R. Corpuz was a former Filipino citizen who acquired Canadian citizenship through naturalization on November 29, 2000. On January 18, 2005, Gerbert married respondent Daisylyn T. Sto. Tomas, a Filipina, in Pasig City. Due to work and other professional commitments, Gerbert left for Canada soon after the wedding. He returned to the Philippines sometime in April 2005 to surprise Daisylyn, but was shocked to discover that his wife was having an affair with another man. Gerbert returned to Canada and filed a petition for divorce. The Superior Court granted Gerbert‘s petition for divorce on December 8, 2005. The divorce decree took effe ct a month later, on January 8, 2006. Two years after the divorce, Gerbert has moved on and has found another Filipina to love. Gerbert went to the
Pasig City Civil Registry Office and registered the Canadian divorce decree on his and Daisylyn‘s marriage
certificate. Despite the registration of the divorce decree, an official of the National Statistics Office (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, pursuant to NSO Circular No. 4, series of 1982.
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CONFLICT OF LAWS 2012-2013 Accordingly, Gerbert filed a petition for judicial recognition of foreign divorce and/or declaration of marriage as petition dissolved ( ) with the RTC. Daisylyn did not file any responsive pleading but submitted instead a notarized letter/manifestation to the trial court. She requested that she be considered as a party-in-interest with a similar
prayer to Gerbert‘s.
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 he is a naturalized Canadian citizen. It ruled that 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 .9 Article 26 of the Family Code reads: Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38. Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law.
From the RTC‘s ruling, Gerbert filed a direct appeal via a petition for review on certiorari under Rule 45. Gerbert asserts that his petition before the RTC is essentially for declaratory relief, similar to that filed in Orbecido; he contends that the provision applies as well to the benefit of the alien spouse. He considers himself as a proper party, vested with sufficient legal interest, to institute the case, as there is a possibility that he might be prosecuted for bigamy if he marries his Filipina fiancée in the Philippines since two marriage certificates, involving him, would be on file with the Civil Registry Office. ISSUE:
Whether or not the Article 26(2) of the Family Code extends to aliens the right to petition a court of this jurisdiction for the recognition of a foreign divorce decree. HELD: PETITION GRANTED.
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. The RTC was correct in limiting the applicability of the provision for the benefit of the Filipino spouse. In other words, only the Filipino spouse can invoke the second paragraph of Article 26 of the Family Code; the alien spouse can claim no right under this provision. The foreign divorce decree is presumptive evidence of a right that clothes the party with legal interest to petition for its recognition in this jurisdiction We qualify our above 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. In other words, the unavailability of the second paragrap h 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, after its authenticity and conformity with the alien ‘s national law have been duly proven according to our rules of evidence, 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. This Section states: SEC. 48. Effect of foreign judgments or final orders. — The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows: (a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title of the thing; and UNIVERSITY
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CONFLICT OF LAWS 2012-2013 (b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. In either case, the judgment or final order 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. 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, we have declared, no less, that 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.
In Gerbert‘s case, since both the foreign divorce decree and the national law of the alien, recognizing his or her capacity to obtain a divorce, purport to be official acts of a sovereign authority, Section 24, Rule 132 of the Rules of Court comes into play. This Section requires proof, either by (1) official publications or (2) copies attested by the officer having legal custody of the documents. If the copies of official records are not kept in the Philippines, these must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office. The records show that Gerbert attached to his petition a copy of the divorce decree, as well as the required certificates proving its authenticity, but failed to include a copy of the Canadian law on divorce. We deem it more appropriate to take this latter course of action, given the Article 26 interests that will be served
and the Filipina wife‘s (Daisylyn‘s) obvious conformity with the petition. A remand, at the same time, will allow other interested parties to oppose the foreign judgment and overcome a petitioner‘s presumptive evidence of a right
by proving want of jurisdiction, want of notice to a party, collusion, fraud, or clear mistake of law or fact. Needless to state, every precaution must be taken to ensure conformity with our laws before a recognition is made, as the foreign judgment, once recognized, shall have the effect of res judicata between the parties, as provided in Section 48, Rule 39 of the Rules of Court. The court ordered the REMAND of the case to the trial court for further proceedings.
— oOo — MEROPE ENRIQUEZ VDA. DE CATALAN v. LOUELLA CATALAN-LEE GR No. 183622, 8 FEBRUARY 2012, SECOND DIVISION (SERENO, J) Orlando Catalan was a naturalized American citizen. After allegedly obtaining divorce in the USA from his first wife, Felicitas Amor, he contracted a second marriage with petitioner Merope. On November 18, 2004, Orlando died intestate in the Philippines. Petitioner Merope filed a petition for the issuance of letters of administration for her appointment as administratrix of the intestate estate of Orlando. Meanwhile, respondent Louella Catalan-Lee, one of the children of Orlando from his first marriage filed a similar petition. Respondent Louella alleged that petitioner Merope was not considered an interested person qualified to file a petition for the issuance of letters of administration and in support of her contention she further alleged that a criminal case for bigamy was filed against petitioner. Apparently, Felicitas Amor filed a complaint for bigamy, alleging that petitioner Merope contracted a second marriage to Orlando despite having been married to one Euseblo Bristol. The RTC acquitted the petitioner for bigamy and ruled that since the deceased was a divorced American citizen, and since that divorce was not recognized under Philippine jurisdiction, the marriage between him and petitioner was not valid. The trial court also found that, in the first place, petitioner had never been married to Eusebio Bristol. On 26 June 2006, RTC of Burgos, Pangasinan dismissed the Petition for the issuance of letters of administration filed by petitioner and granted that of private respondent. Contrary to its findings in Crim. Case No. 2699-A, the RTC held that the marriage between petitioner and Eusebio Bristol was valid and subsisting when she married Orlando. Thus, the trial court held that petitioner was not an interested party who may file a petition for the issuance of letters of administration. UNIVERSITY
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The Court of Appeals dismissed the petition for lack of merit. Petitioner moved for a reconsideration of this decision and insisted that with her acquittal of the crime of bigamy, the marriage enjoys the presumption of validity. ISSUE:
Whether or not the petitioner was not an interested party who may file a petition for the issuance of letters of administration. HELD: PETITION IS PARTIALLY GRANTED.
It appears that the trial court no longer required petitioner to prove the validity of Orlando‘s divorce under the laws of the United States and the marriage between petitioner and the deceased. Thus, there is a need to remand the proceedings to the trial court for further reception of evidence to establish the fact of divorce. Should petitioner prove the validity of the divorce and the subsequent marriage, she has the preferential right to be issued the letters of administration over the estate. Otherwise, letters of administration may be issued to respondent, who is undisputedly the daughter or next of kin of the deceased, in accord ance with Sec. 6 of Rule 78 of the Revised Rules of Court. Thus, it is imperative for the trial court to first determine the validity of the divorce to ascertain the rightful party to be issued the letters of administration over the estate of Orlando B. Catalan Without the divorce decree and foreign law as part of the evidence, the court cannot rule on the issue of whether petitioner has the personality to file the petition for declaration of nullity of marriage. Freed from their existing marital bond, each of the former spouses no longer has any interest nor should each have the personality to inquire into the marriage that the other might subsequently contract. x x x Viewed from another perspective, Felicitas has no existing interest in Orlando‘s sub sequent marriage since the validity, as well as any defect or infirmity, of this subsequent marriage will not affect the divorced status of Orlando and Felicitas.. In fine, petitioner‘s personality to file the petition to declare the nullity of marriage ca nnot be ascertained because of the absence of the divorce decree and the foreign law allowing it. Hence, a remand of the case to the trial court for reception of additional evidence is necessary to determine whether respondent Orlando was granted a divorce decree and whether the foreign law which granted the same allows or restricts remarriage.
— oOo — IMELDA MANALAYSAY PILAPIL, petitioner, v. HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the Regional Trial Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the City Fiscal of Manila; and ERICH EKKEHARD GEILING, respondents FACTS:
Petitioner Imelda Manalaysay Pilapil, a Filipino citizen, and private respondent Erich Ekkehard Geiling, a German national, were married in the Federal Republic of Germany. The marriage started auspiciously and the couple lived together for some time in Malate, Manila. Thereafter, marital discord set in, with mutual recriminations between the spouses, followed by a separation de facto between them. Subsequently, private respondent initiated a divorce proceeding against petitioner in Germany on January, 1983. He claimed that there was failure of their marriage and that they had been living apart since April, 1982. Petitioner, on the other hand, filed an action for legal separation, support and separation of property before the Regional Trial Court of Manila. On January 15, 1986, Division 20 of the Schoneberg Local Court, Federal Republic of Germany, promulgated a decree of divorce on the ground of failure of marriage of the spouses. The custody of the child was granted to petitioner. Under German law said court was locally and internationally competent for the divorce proceeding and that the dissolution of said marriage was legally founded on and authorized by the applicable law of the foreign jurisdiction. Subsequently, on June 27, 1986, or more than five months after the issuance of the divorce decree, private respondent filed two complaints for adultery before the City Fiscal of Manila, alleging that, while still married to UNIVERSITY
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CONFLICT OF LAWS 2012-2013 said respondent, petitioner had an affair with a certain William Chia in 1982 and with yet another man named Jesus Chua sometime in 1983. ISSUE:
Whether or not the complaint for adultery against respondent will prosp er? HELD: The law specifically provided that in prosecution for adultery and concubinage, the person who can legally file the complaint should be the offended spouse and nobody else. Though in this case, it appeared that private respondent is the offended spouse, the latter obtained a valid divorce in his country, the Federal Republic of Germany, and said divorce and its legal effects may be recognized in the Philippines in so far as he is concerned. Thus, under the same consideration and rationale, private respondent is no longer the husband of petitioner and has no legal standing to commence the adultery case under the imposture that he was the offended spouse at the time he filed suit. — oOo —
GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, v. REDERICK A. RECIO, respondent FACTS:
Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian citizen, in Malabon, Rizal, on March 1, 1987. They lived together as husband and wife in Australia. On May 18, 1989, a decree of divorce, purportedly dissolving the marriage, was issued by an Australian family court. Subsequently, on June 26, 1992, respondent became an Australian citizen. Subsequently, petitioner, a Filipina, and respondent were married on January 12, 1994 in Cabanatuan City.
In their application for a marriage license, respondent was declared as ―single‖ and ―Filipino.‖ However, starting October 22, 1995, petitioner and respondent lived separately without prior judicial dissolution of their marriage. While the two were still in Australia, their conjugal assets were divided. On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of Marriage on the ground of bigamy claiming that respondent allegedly had a prior subsisting marriage at the time he married her and that she learned of respondent‘s marriage to Editha Samson only in November, 1997. Respondent averred that, as far back as 1993, he had revealed to petitioner his prior marriage and its subsequent dissolution. He contended that his first marriage to an Australian citizen had been validly dissolved by a divorce decree obtained in Australia, thus, he was legally capacitated to marry petitioner in 1994. On July 7, 1998 while the suit for the declaration of nullity was pending, respondent was able to secure a
divorce decree from a family court in Australia because the ―marriage had irretrievably broken down.‖ Respondent prayed that the Complaint be dismissed on the ground that it stated no cause of action. ISSUE:
Whether the decree of divorce submitted by Rederick Recio is admis sible as evidence to prove his legal capacity to marry petitioner and absolved him of bigamy? HELD:
The nullity of Rederick‘s marriage with Editha as shown by the divorce decree issued was valid and recognized in the Philippines since the respondent is a naturalized Australian. However, there is absolutely no
evidence that proves respondent‘s legal capacity to marry petitioner though the former presented a divorce decree.
The said decree, being a foreign document was inadmissible to court as evidence primarily because it was not authenticated by the consul/ embassy of the country where it will be used. Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official record of a foreign country by either: (1) an official publication or
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CONFLICT OF LAWS 2012-2013 (2) a copy thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines, such copy must be: (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office. Thus, the Supreme Court remands the case to the Regional Trial Court to receive or trial evidence that will
conclusively prove respondent‘s legal capacity to marry petitioner and thus free him on the ground of bigamy. — oOo —
ELMAR O. PEREZ, Petitioner, v. COURT OF APPEALS, Fifth Division, TRISTAN A. CATINDIG and LILY GOMEZ-CATINDIG, Respondents FACTS:
Private respondent Tristan A. Catindig married Lily Gomez Catindig. Several years later, the couple encountered marital problems that they decided to separate from each other. Subsequently, they decided to obtain a divorce from the Dominican Republic. Thus, on April 27, 1984, Tristan and Lily executed a Special Power of Attorney addressed to the Judge of the First Civil Court of San Cristobal, Dominican Republic, appointing an attorney-in-fact to institute a divorce action under its laws. The private respondents also filed a joint petition for dissolution of conjugal partnership with the Regional Trial Court of Makati. Both the divorce decree and the dissolution of conjugal partnership were approved by the respective courts. Subsequently, On July 14, 1984, Tristan married petitioner Elmar O. Perez in the State of Virginia in the United States and both lived as husband and wife until October 2001. Petitioner learned that the divorce decree issued by the court in the Dominican Republic which "dissolved" the marriage between Tristan and Lily was not recognized in the Philippines and that her marriage to Tristan was deemed void under Philippine law. When she confronted Tristan about this, the latter assured her that he would legalize their union after he obtains an annulment of his marriage with Lily. On August 13, 2001, Tristan filed a petition for the declaration of nullity of his marriage to Lily with the Regional Trial Court of Quezon City. Subsequently, petitioner filed a Motion for Leave to File Intervention claiming that she has a legal interest in the matter in litigation because she knows certain information which might aid the trial court at a truthful, fair and just adjudication of the annulment case, which the trial court granted on September 30, 2002. Petitioner‘s complaint-in-intervention was also ordered admitted. Tristan filed a petition for certiorari and prohibition with the Court of Appeals seeking to annul the order dated September 30, 2002 of the trial court. The Court of Appeals granted the petition and declared as null and void the September 30, 2002 Order of the trial court granting the motion for leave to file intervention and admitting the complaint-in-
intervention. Petitioner‘s motion for reconsideration was denied, hence this petition. ISSUE:
Whether or not petitioner has a legal interest in the matter in litigation? HELD:
The Rules of Court laid down the parameters before a perso n, not a party to a case can intervene, thus: Who may intervene. — A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor‘s rights may be fully pr otected in a separate proceeding. The requirements for intervention are: [a] legal interest in the matter in litigation; and [b] consideration must be given as to whether the adjudication of the original parties may be delayed or prejudiced, or whether the
intervenor‘s rights may be protected in a separate proceeding or not. Legal interest, which entitles a person to intervene, must be in the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by direct legal operation and effect of the judgment. Such interest must be actual, direct and material, and not simply contingent and expectant. Petitioner claims that her status as the wife and companion of Tristan for 17 years vests her with the requisite legal interest required of a UNIVERSITY
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CONFLICT OF LAWS 2012-2013 would-be intervenor under the Rules of Court. Under the law, petitioner was never the legal wife of Tristan, hence her claim of legal interest has no basis. When petitioner and Tristan married on July 14, 1984, Tristan was still lawfully married to Lily. The divorce decree that Tristan and Lily obtained from the Dominican Republic never dissolved the marriage bond between them. It is basic that laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. Regardless of where a citizen of the Philippines might be, he or she will be governed by Philippine laws with respect to his or her family rights and duties, or to his or her status, condition and legal capacity. Hence, if a Filipino regardless of whether he or she was married here or abroad, initiates a petition abroad to obtain an absolute divorce from spouse and eventually becomes successful in getting an absolute divorce decree, the Philippines will not
recognize such absolute divorce. Thus, petitioner‘s claim that she is the wife of Tristan even if their marriage was
celebrated abroad lacks merit. Thus, petitioner never acquired the legal interest as a wife upon which her motion for intervention is based. — oOo — WILLIAMS V NORTH CAROLINA (1942) FACTS:
Petitioner Williams was married to Carrie Wyke in 1916 in North Carolina and lived with her there until May, 1940. On the other hand, petitioner Hendrix was married to Thomas Hendrix in 1920 in North Carolina and lived with him there until May, 1940. At that time, petitioners went to Las Vegas, Nevada and on June 26, 1940, each filed a divorce action in the Nevada court. The defendants in those divorce actions entered no appearance, nor were they served with process in Nevada. In the case of defendant Thomas Hendrix, service by publication was had by publication of the summons in a Las Vegas newspaper and by mailing a copy of the summons and complaint to his last post office address. In the case of defendant Carrie Williams a North Carolina sheriff delivered to her in North Carolina a copy of the summons and complaint. A decree of divorce was granted petitioner Williams by the Nevada court on August 26, 1940, on the grounds of extreme cruelty, the court finding that "the plaintiff has been and now is a bona fide and continuous resident of the County of Clark, Nevada, and had been such resident for more than six weeks immediately preceding the commencement of this action in the manner prescribed by law. The Nevada court granted petitioner Hendrix a divorce on October 4, 1940, on the grounds of willful neglect and extreme cruelty, and made the same finding as to this petitioner's bona fide residence in Nevada as it made in the case of Williams. Petitioners were married to each other in Nevada on October 4, 1940. Thereafter, they returned to North Carolina, where they lived together until the indictment for bigamous cohabitation was returned. Petitioners pleaded not guilty, and offered in evidence exemplified copies of the Nevada proceedings, contending that the divorce decrees and the Nevada marriage were valid in North Carolina as well as in Nevada. The State contended that, since neither of the defendants in the Nevada actions was served in Nevada nor entered an appearance there, the Nevada decrees would not be recognized as valid in North Carolina. On this issue, the court charged the jury in substance that a Nevada divorce decree based on substituted service where the defendant made no appearance would not be recognized in North Carolina. The State further contended that petitioners went to Nevada not to establish a bona fide residence, but solely for the purpose of taking advantage of the laws of that State to obtain a divorce through fraud upon that court. ISSUE:
Whether or not the divorce decree and the marriage contracted by petitioner may be recognized as valid in North Carolina? HELD:
It is clear that the provision of the Nevada statute that a plaintiff in this type of case must "reside" in the State for the required period requires him to have a domicile, as distinguished from a mere residence, in the state. Hence, the decrees in this case, like other divorce decrees, are more than in personam judgments. They involve the marital status of the parties. Domicile creates a relationship to the state which is adequate for numerous exercises of state power. Each state as a sovereign has a rightful and legitimate concern in the marital status of persons domiciled within its borders. Thus, it is plain that each state, by virtue of its command over its domiciliaries and its UNIVERSITY
OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 large interest in the institution of marriage, can alter within its own borders the marriage status of the spouse domiciled there, even though the other spouse is absent. There is no constitutional barrier if the form and nature of the substituted meet the requirements of due process. Under the Full Faith and Credit Clause and the Act of May 26, 1790, where a decree of divorce, granted by a State to one who is at the time bona fide domiciled therein is rendered in a proceeding complying with due process, such decree, if valid under the laws of that State, is binding upon the courts of other States, including the State in which the marriage was performed performe d and where the other party to the marriage marri age was still domiciled when the divorce was decreed. In this case, the Court Cour t must assume that petitioners each had h ad a bona fide domicile in Nevada, not that their Nevada domicile was a sham. The case does not present the question whether North Carolina has power to refuse full faith and credit to the Nevada divorce decrees because they were based on residence, rather than domicile, or because, contrary to the findings of the Nevada court, North Carolina finds that no bona fide domicile was acquired in Nevada. — oOo oOo — WILLIAMS v. NORTH CAROLINA CHEESMAN v. IAC MULLER v. MULLER HULST v. PR BUILDERS, INC.
— oOo oOo — G. CONTRACTS THE BREMEN v. ZAPATA OFF-SHORE CO. 407 U.S. 1, 12 June 1972 (BURGER, C. J.) The forum-selection clause, which was a vital part of the towing contract, is binding on the parties unless respondent can meet the heavy burden of showing that its enforcement would be unreasonable, unfair, or un just .
Zapata, a Houston-based American corporation, contracted with Unterweser, a German corporation, to tow Zapata's oceangoing drilling from Louisiana to Italy. Unterweser submitted a contract continuing a provision that any dispute arising must be treated before the London Court of Justice. A vice president of Zapata reviewed the contract and without making any alteration in the forum selection clause, a contract was executed and forwarded to Unterweser. The latter accepted and the contract co ntract became effective. Unfortunately, a severe storm arose and the under tow was damaged. Zapata instructed Unterweser to tow the rig to Tampa, Florida, the nearest port of refuge. There, respondent brought suit in admiralty against petitioners. Unterweser invoked the forum clause but the District Court held the forum selection clause unenforceable and refused to decline jurisdiction on the basis of forum non conveniens. The CA affirmed. Hence, this petition. ISSUE: Whether or not the forum clause in the contract is enforceable HELD:
Thus, in the light of present-day commercial co mmercial realities and expanding international in ternational trade, we conclude that the forum clause should control absent a strong showing that it should be set aside. Although their opinions are not altogether explicit, it seems reasonably clear clear that that the District Court and and the the Court of Appeals placed the the burden on Unterweser to show sh ow that London would be a more convenient forum than Tampa, although the contract expressly exp ressly resolved that issue. i ssue. The correct approach would have been to enforce the forum clause specifically unless Zapata could clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching. A ccordingly, the case must be remanded for reconsideratio n. We note, however, that there is nothing in the record presently before us that would support a refusal to enforce the forum clause. The Court of Appeals suggested that enforcement would be contrary to the public policy of the forum under Bisso v. Inland Waterways Corp., 349 U. S. 85 (1955), because of the prospect that the English courts would enforce the clauses of o f the towage contract purporting p urporting to exculpate exculp ate Unterweser Un terweser from UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 liability for damages to the Chaparral. A contractual contractual choice of forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision. It is clear, however, that whatever the proper scope of the policy expressed in Bisso, it does not reach this case. Bisso rested on considerations with respect to the towage business b usiness strictly in American waters, and those considerations are not controlling in an international in ternational commercial agreement. — oOo oOo — PAKISTAN INTERNATIONAL AIRLINES CORPORATION v. HON. BLAS F. OPLE G.R. No. 61594, 28 September 1990 ( Feliciano , J.)
We have already pointed out that the relationship is much affected with public interest and an d that the otherwise applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship.
Pakistan International Airlines Corporation (PIA) executed in Manila two separate contracts of employment with private respondents Farrales and Mamasig. The pertinent provisions are: 5. DURATION OF EMPLOYMENT AND PENALTY This agreement is for a period of three (3) years, but can be extended by the mutual consent of the parties. 6. TERMINATION xxx xxx xxx Notwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any time by giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu thereof, by paying the EMPLOYEE wages equivalent to one month's salary. 10. APPLICABLE LAW: xxx xxx xxx This agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement. Private respondents then commenced training in Pakistan and thereafter discharged their job functions. However, prior to the expiration of their employment contracts, the PIA advised them that their services would be terminated. A complaint for illegal dismissal was jointly instituted by the private respondents against PIA before the then Ministry of Labor and Employment. The Regional Director ordered the reinstatement of the private respondents. On appeal, the Deputy Minister adopted the findings and conclusions of the Regional Director. Hence, this petition for certiorari. ISSUE: Whether or not the award is void for having been rendered without jurisdiction and issued in disregard and in violation of PIA's rights under the employment contracts with private p rivate respondents HELD: Examining the provisions of paragraphs 5 and 6 of the employment agreement between petitioner PIA and private respondents, we consider that those provisions must be read together and when so read, the fixed period of three (3) years specified in paragraph 5 will be seen to have been effectively neutralized by the provisions of paragraph 6 of that agreement. Paragraph 6 in effect took too k back from the employee the fixed three (3)-year period ostensibly granted by paragraph 5 by rendering such period in effect a facultative one at the option of the employer PIA. For petitioner PIA claims to be authorized to shorten that term, at any time and for any cause satisfactory to itself, to a one-month period, or even less by simply paying the employee a month's salary. Because the net effect of paragraphs 5 and 6 of the agreement here involved is to render ren der the employment of private respondents Farrales and Mamasig basically employment at the pleasure of petitioner PIA, the Court considers that paragraphs 5 and 6 were intended to prevent any security of tenure from accruing in favor of private respondents even during the limited period of three (3) years, 13 and thus to escape completely the thrust of Articles 280 and 281 of the Labor Code. UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law of Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of any dispute arising out of or in connection with the agreement "only [in] courts of Karachi Pakistan". The first clause of paragraph 10 cannot be invoked to prevent p revent the application of Philippine Phil ippine labor laws and regulations to the subject matter of this case, i.e., the employer-employee emp loyer-employee relationship between b etween petitioner petitio ner PIA and private respondents. We have h ave already pointed out that the relationship is much affected with public interest and that the otherwise applicable Philippine laws and regulations cannot be rendered illusory illusor y by the p arties agreeing upon some other law to govern their relationship. Neither may petitioner invoke the second clause of paragraph 10, specifying the Karachi courts as the sole venue for the settlement of dispute; between the contracting parties. Even a cursory curso ry scrutiny of o f the relevant circumstances of this case will show the multiple and substantive subst antive contacts between Philippine Phi lippine law and Philippine courts, on the one hand, and the relationship between the parties, upon the other: the contract was not only executed in the Philippines, it was also performed here, at least partially; private respondents are Philippine citizens and respondents, while petitioner, although a foreign corporation, is i s licensed licen sed to do business b usiness (and actually a ctually doing business) and hence resident in the Philippines; lastly, private respondents r espondents were based in the Philippines Phil ippines in between their assigned flights to the Middle East and Europe. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between the parties. Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law. — oOo oOo — NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA/AMERICAN INTERNATIONAL UNDERWRITER (PHIL.) INC. v. STOLT-NIELSEN PHILIPPINES, INC. G.R. No. 87958, 26 April 1990 ( MELENCIO-HERRERA, J.)
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.
United Coconut Chemicals, Inc. shipped 404.774 metric tons of distilled C6-C18 fatty acid on board a tanker owned by Stolt-Nielsen Philippines from Batangas to Netherlands covered by a bill of lading which contained a general statement of incorporation of the terms of a charter party. This shipment was insured under a marine cargo policy with National Union Fire Insurance Company of Pittsburg through its agent in the Philippines, American International Underwriters. When the consignee received the cargo, the same was found to be discolored and totally contaminated. StoltNielsen denied the claim of the shipper, so pursuant to the stipulation in the marine cargo policy covering said shipment, the insurer indemnified the shipper. As subrogee of the shipper, the insurer filed a suit against Stolt-Nielsen before the RTC for recovery of sum of money. Stolt-Nielsen moved to dismiss the proceeding on the ground that the insurer as subrogee of the shipper is subject to the bill of lading which includes a provision that the the shipment is carried pursuant to the terms of the the charter party providing for arbitration. The insurer opposed contending that it was not legally bound to submit the claim for arbitration in as much as the arbitration clause provided in the charter party was not incorporated into the bill of lading. The RTC deferred resolution on the Motion to Dismiss Proceedings. Stolt-Nielsen then filed a petition for certiorari and prayed for a TRO. The CA ordered to refer the claims for arbitration. Charter Party, particularly the provision on arbitration, is binding on the ISSUE: Whether or not the terms of the Charter insurer HELD:
The pertinent portion of the Bill of Lading in issue provides in part:
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 This shipment is carried under and pursuant to the terms of the Charter dated December 21st 1984 at Greenwich, Connecticut, U.S.A. between Parcel Tankers. Inc. and United Coconut Chemicals, Ind. as Charterer and all 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. Copy of the Charter may be obtained from the Shipper or Charterer. While the provision on arbitration in the Charter Party reads: H. Special Provisions. xxx xxx xxx 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. This should include the provision on arbitration even without a specific stipulation to that effect. The entire contract must be read together and its clauses interpreted in relation to one another and not by parts. Moreover, in cases where a Bill of Lading has been issued by a carrier covering goods shipped aboard a vessel under a charter party, and the charterer is also the holder of the bill of lading, "the bill of lading operates as the receipt for the goods, and as document of title passing the property of the goods, but not as varying the contract between the charterer and the shipowner". The Bill of Lading becomes, therefore, only a receipt and not the contract of carriage in a charter of the entire vessel, for the contract is the Charter Party, and is the law between the parties who are bound by its terms and condition provided that these are not contrary to law, morals, good customs, public order and public policy (Article 1306, Civil Code). 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.shipper or the charterer. — oOo — SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA v. HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES, INC. G.R. No. 104235, 18 November 1993 ( NOCON, J.)
Since the tickets were sold and issued in the Philippines, the applicable law in this case would be Philippine law.
Spouses Cesar and Suthira Zalamea purchased at a discount 2 airline tickets and 1 at a full fare ticket for their daughter Liana. They bought the tickets from the Manila agent of Transworld Airlines for a flight to New York to Los Angeles. On the appointed date, the petitioners checked in an hour earlier than the scheduled flight but they were placed on the wait-list because the passengers who had checked in before them had already taken a ll the seats available on the flight. It appeared that those holding full fare tickets were given first priority among the wait-listed passengers. Mr. Zalamea who was holding the full fare ticket of his daughter was allowed to board the plane. Mrs. Zalamea and her daughter were constrained to book in another flight from American Airlines. Upon their arrival in the Philippines, the petitioners filed an action for damages based on the breach of contract before the RTC of Makati. The RTC found the defendant liable. On appeal, the CA held that moral damages are recoverable only where there is fraud or bad faith and since overbooking of flights is a common and accepted practice of airlines in the United States and is specifically allowed under the Code of Federal Regulations by the Civil Aeronautics Board, no fraud nor bad faith could be imputed on respondent TransWorld Airlines. ISSUE: Whether or not there was no fraud or bad faith on the part of Transworld Airlines because it has a right to overbook flights HELD: UNIVERSITY
OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to the case at bar in accordance with the principle of lex loci contractus which require that the law of the place where the airline ticket was issued should be applied by the court where the passengers are residents and nationals of the forum and the was issued should be applied by the court where the passengers are residents and nationals of the forum and the ticket is issued in such State by the defendant airline. Since the tickets were sold and issued in the Philippines, the applicable law in this case would be Philippine law.
— oOo — PHILIPPINE AIRLINES, INC.v. COURT OF APPEALS AND GILDA C. MEJIA G.R. No. 119706, 14 March 1996, SECOND DIVISION (Regalado, J .) The Warsaw Convention, being a treaty to which the Philippines is a signatory, is as much a part of Philippine law as the Civil Code, Code of Commerce, and other municipal special laws.The provisions therein contained, specifically on t he limitation of carrier's liability, are operative in the Philippines but only in appropriate situations .
Gilda C. Mejia shipped thru PAL, 1unit microwave oven, weighing 33kgs from San Francisco, U.S.A. to Manila. Upon arrival of said article in Manila, Gilda discovered that its front glass door was broken and the damage rendered it unserviceable. Demands both oral and written were made by Gilda against PAL for the reimbursement of the value of the damaged microwave oven and transportation charges she paid. Said demands were not heeded. Gilda filed an action for damages against PAL.PAL maintains that it is not liable for any damages because Gilda filed her action beyond the reglementary period indicated in the airway bill for the filing of claims, and even assumingthat
there is any liabilityon PAL‘s part, it is limited by the provisions of the airway bill, due to the fact that Gilda did not
declare the value of the microwave oven prior to its shipping. Gilda, on the other hand, argues that she was advised by the PAL personnel that she need not declare the value of the oven, thus she cannot be faulted for failing to comply with the conditions of the airway bill. The RTC ruled in favor Gilda. CA affirmed. Hence, this petition. ISSUES:
a. Whether the provisions of the airway bill, particularly on the limited liability of the carrier as provided under the Warsaw Convention, are binding on Gilda b. Whether Gilda is precluded from asserting her claim since she filed her complaint beyond the period provided in the airway bill HELD: CA Decision AFFIRMED. PAL is estopped from invoking the limited liability clause under the airway bill
xxx The validity of provisions limiting the liability of carriers contained in bills of lading have been consistently upheld for the following reason: . . . . The stipulation in the bill of lading limiting the common carrier's liability to the value of goods appearing in the bill, unless the shipper or owner declares a greater value, is valid and binding. The limitation of the carrier's liability is sanctioned by the freedom of the contracting parties to establish such stipulations, clauses, terms, or conditions as they may deem convenient, provided they are not contrary to law, morals, good customs and public policy. . . . .
However, the Court has likewise cautioned against blind reliance on adhesion contracts where the facts and circumstances warrant that they should be disregarded. In the case at bar, it will be noted that private respondent signified an intention to declare the value of the microwave oven prior to shipment, but was explicitly advised against doing so by PAL's personnel in San Francisco, U.S.A. The acceptance in due course by PAL of private respondent's cargo as packed and its advice against the need for declaration of its actual value operated as an assurance to private respondent that in fact there was no need for such a declaration. Petitioner can hardly be faulted for relying on the representations of PAL's own personnel. In other words, private respondent Mejia could and would have complied with the conditions stated in the air waybill, i .e ., declaration of a higher value and payment of supplemental transportation charges, entitling her to recovery UNIVERSITY
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CONFLICT OF LAWS 2012-2013 of damages beyond the stipulated limit of US $20 per kilogram of cargo in the event of loss or damage, had she not been effectively prevented from doing so upon the advice of PAL's personnel for reasons best known to themselves. There was substantial compliance on the part of Gilda in fulfilling the requirement of immediate filing of a formal claim for damages
We likewise uphold the lower court's finding that private respondent complied with the requirement for the immediate filing of a formal claim for damages as required in the air waybill or, at least, we find that there was substantial compliance therewith. Private respondent testified that she authorized her sister, Concepcion Diño, to claim her cargo consisting of a microwave oven since the former had to take a connecting flight to Bacolod City on the very same afternoon of the day of her arrival. As instructed, Concepcion Diño promptly proceeded to PAL's Import Section the next day to claim the oven. Upon discovering that the glass door was broken, she immediately filed a claim by way of the baggage freight claim on which was duly annotated the damage sustained by the oven. Considering the abovementioned incidents and private respondent Mejia's own zealous efforts in following up the claim, it was clearly not her fault that the letter of demand for damages could only be filed, after months of exasperating follow-up of the claim, on August 13, 1990. If there was any failure at all to file the formal claim within the prescriptive period contemplated in the air waybill, this was largely because of PAL's own doing, the consequences of which cannot, in all fairness, be attributed to private respondent. Even if the claim for damages was conditioned on the timely filing of a formal claim, under Article 1186 of the Civil Code that condition was deemed fulfilled, considering that the collective action of PAL's personnel in tossing around the claim and leaving it unresolved for an indefinite period of time was tantamount to "voluntarily preventing its fulfillment." On grounds of equity, the filing of the baggage freight claim, which sufficiently informed PAL of the damage sustained by private respondent's cargo, constituted substantial compliance with the requirement in the contract for the filing of a formal claim. All told, therefore, respondent appellate court did not err in ruling that the provision on limited liability is not applicable in this case. We, however, note in passing that while the facts and circumstances of this case do not call for the direct application of the provisions of the Warsaw Convention, it should be stressed that, indeed, recognition of the Warsaw Convention does not preclude the operation of the Civil Code and other pertinent laws in the determination of the extent of liability of the common carrier. The Warsaw Convention, being a treaty to which the Philippines is a signatory, is as much a part of Philippine law as the Civil Code, Code of Commerce and other municipal special laws. The provisions therein contained, specifically on the limitation of carrier's liability, are operative in the Philippines but only in appropriate situations .
— oOo — EDNA DIAGO LHUILLIER v. BRITISH AIRWAYS G.R. No. 171092, March 15, 2010, SECOND DIVISION (Del Castillo, J .) Where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual concept. Jurisdiction in the international sense must be established in accordance with Article 28(1) of the Warsaw Convention, following which the jurisdiction of a particular court must be established pursuant to the applicable domestic law. Only after the question of which court has jurisdiction is determined will the issue of venue be taken up. This second question shall be governed by the law of t he court to which the case is submitted.
Edna Diago Lhuillier took British Airway flight 548 from London to Rome. Once on board, she requested Julian Halliday, one of its flight attendants, to assist her in placing her hand-carried luggage in the overhead bin. Halliday allegedly refused to help and assist her, and even sarcastically remarked that "If I were to help all 300 passengers in this flight, I would have a broken back!". Edna further alleged that when the plane was about to land in Rome, another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among all the passengers in the business class section to lecture on plane safety. Upon arrival in Rome, petitioner complained to British Airways‘s ground manager and demanded an apology. However, the latter declared that the flight stewards were "only doing their job." Edna then filed a complaint against British Airways before the Regional Trial Court (RTC) of Makati City. Summons, together with a copy of the complaint, was served on British Airways through Violeta Echevarria, General Manager of Euro-Philippine Airline Services, Inc.British Airwaysfiled a Motion to Dismisson grounds of lack of jurisdiction over the case and over the person of the respondent. It alleged that only the courts of London, United Kingdom or Rome, Italy, have jurisdiction over the complaint for damages pursuant to the Warsaw Convention, Article 28(1).The RTC of Makati Citygrantedthe Motion to Dismiss. Edna filed a Motion for Reconsideration but the motion was denied. Hence, this petition. UNIVERSITY
OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 ISSUES:
Whether Philippine Courts have jurisdiction over a tortious conduct committed against a Filipino citizen and resident by airline personnel of a foreign carrier travelling beyond the territorial limit of any foreign country HELD:
Petition DENIED. It is settled that the Warsaw Convention has the force and effect of law in this country. xxx The Convention is thus a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force and effect of law in this country.The Warsaw Convention applies because the air travel, where the alleged tortious conduct occurred, was between the United Kingdom and Italy, which are both signatories to the Warsaw Convention. Article 1 of the Warsaw Convention provides: 1. This Convention applies to all international carriage of persons, luggage or goods performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.
Thus, when the place of departure and the place of destination in a contract of carriage are situated within the territories of two High Contracting Parties, said carriage is deemed an "international carriage". The High Contracting Parties referred to herein were the signatories to the Warsaw Convention and those which subsequently adhered to it.
In the case at bench, petitioner‘s place of departure was London, United Kingdom while her place of destination was Rome, Italy.Both the United Kingdomand Italy signed and ratified the Warsaw Convention. As such, the transport of the petitioner is deemed to be an "international carriage" within the contemplation of the Warsaw Convention.Since the Warsaw Convention applies in the instant case, then the jurisdiction over the subject matter of the action is governed by the provisions of the Warsaw Convention. Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages before – 1. the court where the carrier is domiciled; 2. the court where the carrier has its principal place of business; 3. the court where the carrier has an establishment by which the contract has been made; or 4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation domiciled in London, United Kingdom with London as its principal place of business. Hence, under the first and second jurisdictional rules, the petitioner may bring her case before the courts of London in the United Kingdom. In the passenger ticket and baggage check presented by both the petitioner and respondent, it appears that the ticket was issued in Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the option to bring her case before the courts of Rome in Italy. Finally, both the petitioner and respondent aver that the place of destination is Rome, Italy, which is properly designated given the routing presented in the said passenger ticket and baggage check. Accordingly, petitioner may bring her action before the courts of Rome, Italy. The Court finds that the RTC of Makati correctly ruled that it does not have jurisdiction over the case filed by the petitioner. The Court further held that Article 28(1) of the Warsaw Convention is jurisdictional in character: A number of reasons tends to support the characterization of A rticle 28(1) as a jurisdiction and not a venue provision. First , the wording of Article 32, which indicates the places where the action for damages "must" be brought, underscores the mandatory nature of Article 28(1). Second, this characterization is consistent with one of the objectives of the Convention, which is to "regulate in a uniform manner the conditions of international transportation by air." Third, the Convention does not contain any provision prescribing rules of jurisdiction other than Article 28(1), which means that the phrase "rules as to jurisdiction" used in Article 32 must refer only to Article 28(1). In fact, the last sentence of Article 32 specifically deals with the exclusive enumeration in Article 28(1) as "jurisdictions," which, as such, cannot be left to the will of the parties regardless of the time when the damage occurred. xxxx
In other words, where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual concept. Jurisdiction in the international sense must be established in accordance with Article 28(1) of the Warsaw Convention, following which the jurisdiction of a particular court must be established pursuant to the applicable domestic law. Only after the question of which court has jurisdiction is determined will the issue of venue be taken up. This second question shall be governed by the law of the court to which the case is submitted.
Tortious conduct as ground for the Lhuiller‘s complaint is within the purview of the Warsaw Convention.It is thus settled that allegations of tortious conduct committed against an airline passenger during the course of the international carriage do not bring the case outside the ambit of the Warsaw Convention.British Airways, in seeking remedies from the trial court through special appearance of counsel, is not deemed to have voluntarily submitted itself to the jurisdiction of the trial court. xxx In refuting the contention of petitioner, respondent cited La Naval Drug Corporation v. Court of Appeals where the Court held that even if a party "challenges the jurisdiction of the court over his person, as by UNIVERSITY
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CONFLICT OF LAWS 2012-2013 reason of absence or defective service of summons, and he also invokes other grounds for the dismissal of the action under Rule 16, he is not deemed to be in estoppel or to have waived his objection to the jurisdiction over his person."
— oOo — UNITED AIRLINESv. WILLIE J. UY G.R. No. 127768, November 19, 1999, SECOND DIVISION (Belosillo, J .) Despite the express mandate of Art. 29 of the Warsaw Convention that an action for damages should be filed within two (2) years from the arrival at the place of destination, such rule shall not be applied in the instant case because of the delaying tactics employed by petitioner airline itself.
On 13 October 1989, Willie J. Uy, boarded United Airlines Flight No. 819 for the San Francisco - Manila route, and checked in together with his luggage, one of which was found to be overweight. An employee of United Airlines rebuked him saying that he should have known the maximum weight allowance per bag and that he should have packed his things accordingly. Uy was then told, in a loud voice in front of the milling crowd, to repack his things and transfer some of them from the overweight luggage to the lighter ones. Uy acceded only to find his luggage still overweight. The airline then billed him overweight charges which he offered to pay with a miscellaneous charge order (MCO) or an airline pre-paid credit. However, the airline‘s employee, and later its airport supervisor, adamantly refused to honor the MCO pointing out that there were conflicting figures listed on it. Despite the explanation from Uy that the last figure written on the MCO represented his balance, petitioner‘s employees did not accommodate him. Faced with the prospect of leaving without his luggage, Uy paid the overweight charges with his American Express credit card.Upon arrival in Manila, he discovered that one of his bags had been slashed and its contents stolen. He particularized his losses to be around US $5,310.00. In a letter dated 16 October 1989,Uycomplained of the bad treatment he received and notified petitioner of his loss and requested reimbursement thereof. United Airlinesmailed a check as payment of his loss based on the maximum liability of US $9.70 per pound. Uy, thinking the amount to be grossly inadequate to compensate him for his losses, as well as for the indignities he was subjected to, sent two (2) more letters to petitioner airline, dated 4 January 1990, and another dated 28 October 1991 demanding an out-of-court settlement of P1,000,000.00. Said demands were ignored. On 9 June 1992,Uy filed a complaint for damages against United Airlines. United Airlines moved to dismiss the
complaint on the ground that respondent‘s cause of action had prescribed, invoking Art. 29 of the Warsaw Convention which provides Art. 29 (1) The right to damages shall be extinguished if an action is not brought within two (2) years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the transportation stopped. (2) The method of calculating the period of limitation shall be determined by the law of the court to which the case is submitted.
Uy countered that par. (1) of Art. 29 of the Warsaw Convention must be reconciled with par. (2) thereof which states that "the method of calculating the period of limitation shall be determined by the law of the court to which the case is submitted." Interpreting thus, Uy noted that according to Philippine laws the prescription of actions is interrupted "when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor." Since he made several demands upon United Airlines: first , through his personal letter dated 16 October 1989; second , through a letter dated 4 January 1990; and, finally , through a letter dated 28 October 1991, the two (2)-year period of limitation had not yet been exhausted. RTC granted United Airlines motion to dismiss based on prescription of cause of action. CA reversed the order, ruling that the Warsaw Convention did not preclude the operation of the Civil Code and other pertinent laws. ISSUE:
Whether Art. 29 of the Warsaw Conventionshould apply in the instant case HELD:
CA Decision AFFIRMED. Respondent's complaint reveals that he is suing on two (2) causes of action: (a) the shabby and humiliating treatment he received from petitioner's employees at the San Francisco Airport which caused him extreme embarrassment and social humiliation; and, (b) the slashing of his luggage and the loss of his personal effects amounting to US $5,310.00.
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CONFLICT OF LAWS 2012-2013 While his second cause of action - an action for damages arising from theft or damage to property or goods - is well within the bounds of the Warsaw Convention, his first cause of action -an action for damages arising from the misconduct of the airline employees and the violation of respondent's rights as passenger - clearly is not. Consequently, insofar as the first cause of action is concerned, respondent's failure to file his complaint within the two (2)-year limitation of the Warsaw Convention does not bar his action since petitioner airline may still be held liable for breach of other provisions of the Civil Code which prescribe a different period or procedure for instituting the action, specifically, Art. 1146 thereof which prescribes four (4) years for filing an action based on torts. As for respondent's second cause of action, indeed the travaux preparatories of the Warsaw Convention reveal that the delegates thereto intended the two (2)-year limitation incorporated in Art. 29 as an absolute bar to suit and not to be made subject to the various tolling provisions of the laws of the forum. This therefore forecloses the application of our own rules on interruption of prescriptive periods. Article 29, par. (2), was intended only to let local laws determine whether an action had been commenced within the two (2)-year period, and within our jurisdiction an action shall be deemed commenced upon the filing of a complaint. Since it is indisputable that respondent filed the present action beyond the two (2)-year time frame his second cause of action must be barred. Nonetheless, it cannot be doubted that respondent exerted efforts to immediately convey his loss to petitioner, even employed the services of two (2) lawyers to follow up his claims, and that the filing of the action itself was delayed because of petitioner's evasion. Verily, respondent filed his complaint more than two (2) years later, beyond the period of limitation prescribed by the Warsaw Convention for filing a claim for damages. However, it is obvious that respondent was forestalled from immediately filing an action because petitioner airline gave him the runaround, answering his letters but not giving in to his demands. True, respondent should have already filed an action at the first instance when his claims were denied by petitioner but the same could only be due to his desire to make an out-of-court settlement for which he cannot be faulted. Hence, despite the express mandate of Art. 29 of the Warsaw Convention that an action for damages should be filed within two (2) years from the arrival at the place of destination, such rule shall not be applied in the instant case because of the delaying tactics employed by petitioner airline itself. Thus, private respondent's second cause of action cannot be considered as time-barred under Art. 29 of the Warsaw Convention.
— oOo — H. TORTS JOSE FRANCISCO SOSAv. HUMBERTO ALVAREZ-MACHAIN, et al./UNITED STATES v. HUMBERTO ALVAREZ-MACHAIN 542 U.S. 1160Nos. 03 — 339 and 03-485, June 29, 2004, (Souter, J .) A U.S. Drug Enforcement Agency (DEA) special agent was kidnapped and murdered by a Mexican drug cartel in 1985. After an investigation, the DEA concluded that Humberto Alvarez-Machain had participated in the murder. A warrant for his arrest was issued by a federal district court. The DEA, however, was unable to convince Mexico to extradite Alvarez-Machain, so they hired several Mexican nationals to capture him and bring him back to the United States. His subsequent trial went all the way to the Supreme Court, which found that the government could try a person who had been forcibly abducted, but that the abduction itself might violate international law and provide grounds for a civil suit. When the case went back to the district court for trial, Alvarez-Machain was found not guilty for lack of evidence. Alvarez-Machain then filed a group of civil suits in federal court against the United States and the Mexican nationals who had captured him under the Federal Tort Claims Act (FTCA), which allows the federal government to be sued on tort claims, and the Alien Tort Statute (ATS), which permits suits against foreign citizens in American courts. The government argued that the FTCA applied only to claims arising from actions that took place in the United States and therefore did not cover Alvarez-Machain's case because the arrest took place in Mexico. Further, the government and the Mexican nationals argued that the ATS gave federal courts jurisdiction to hear tort claims against foreign citizens, but did not allow private individuals to bring those suits. The federal district court disagreed with the government's contention that the FCTA claim did not apply, finding that plan to capture Alvarez-Machain was developed on U.S. soil and therefore covered. However, the court then ruled that the DEA had acted lawfully when they arrested Alvarez-Machain and was therefore not liable. On the ATS claims, the court rejected the argument that private individuals could not bring suit under the Act. The court found that Jose Francisco Sosa, one of the Mexican nationals who kidnapped Alvarez- Machain, had violated international law and was therefore liable under the ATS.
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CONFLICT OF LAWS 2012-2013 On appeal, the Ninth Circuit Court of Appeals overturned the district court's FTCA decision, ruling that the DEA could not authorize a citizen's arrest of Alvarez-Machain in another country and was therefore liable. The appeals court did, however, affirm the lower court's finding on the ATS claim, upholding the judgment against Sosa. ISSUE:
a. Whether Alvarez-Machain‘s allegation that the Drug Enforcement Administration instigated his abduction from Mexico for criminaltrial in the United States supports a claim against theGovernment under the Federal Tort Claims Act (FTCA orAct) b. Whether an individual may bring suit under the Federal Tort Claims Act for a false arrest that was planned in the United States but carried out in a foreign country HELD: 1. The FTCA‘s exception to waiver of sovereign immunity for claims ―arising in a foreign country,‖ 28 U.S.C. § 2680( k), bars claims based on any injury suffered in a foreign country, regardless of where the tortious act or omission occurred. Pp. 4 — 17. (a) The exception on its face seems plainly applicable to the facts of this case. Alvarez‘s arrest was said to be ―false,‖ and thus tortious, only because, and only to the extent that, it took place and endured in Mexico. Nonetheless, the Ninth Circuit allowed the action to proceed under what is known as the ―headquarters doctrine,‖ concluding that, because
Alvarez‘s abduction was the direct result of wrongful planning and direction by DEA agents in California, his claim did not ―aris[e] in‖ a foreign country. Beca use it will virtually always be possible to assert negligent activity occurring in the United States, such analysis must be viewed with skepticism. Two considerations confirm this Court‘s skepticism and lead it to reject the headquarters doctrine. Pp. 4 — 7. (b) The first consideration applies to cases like this one, where harm was arguably caused both by action in the foreign country and planning in the United States. Proximate cause is necessary to connect the domestic breach of duty with the action in the foreign country, for the headquarters‘ behavior must be sufficiently close to the ultimate injury, and sufficiently important in producing it, to make it reasonable to follow liability back to that behavior. A proximate cause connection is not itse lf sufficient to bar the foreign country exception‘s application, since a given proximate cause may
not be the harm‘s exclusive proximate cause. Here, for example, assuming the DEA officials‘ direction was a proximate cause of the abduction, so were the actions of Sosa and others in Mexico. Thus, at most, recognition of additional domestic causation leaves an open question whether the exception applies to Alvarez‘s claim. Pp. 8 — 9. (c) The second consideration is rooted in the fact that the harm occurred on foreign soil. There is good reason to
think that Congress understood a claim ―arising in‖ a foreign country to be a claim for injury or harm occurring in that country. This was the common usage of ―arising under‖ in contemporary state borrowing sta tutes used to determine which State‘s limitations statute applied in cases with transjurisdictional facts. And such language was interpreted in tort cases in just the same way that the Court reads the FTCA today. Moreover, there is specific reason to believe that using
―arising in‖ to refer to place of harm was central to the foreign country exception‘s object. When the FTCA was passed, courts generally applied the law of the place where the injury occurred in tort cases, which would have been foreign law for a plaintiff injured in a foreign country. However, application of foreign substantive law was what Congress intended
to avoid by the foreign country exception. Applying the headquarters doctrine would thus have thwarted the exception‘s
object by recasting foreign injury claims as claims not arising in a foreign country because of some domestic planning or negligence. Nor has the headquarters doctrine outgrown its tension with the exception. The traditional approach to choice of substantive tort law has lost favor, but many States still use that analysis. And, in at least some cases the Ninth
Circuit‘s approach would treat as arising at headquarters, even the later methodologies of choice point to the application of foreign law. There is also no merit to a n argument that the headquarters doctrine should be permitted when a State‘s choice of law approach would not apply the foreign law of the place of injury. Congress did not write the exception to apply when foreign law would be applied. Rather, the excepti on was written at a time when ―arising in‖ meant where the harm occurred; and the odds are that Congress meant simply that when it used the phrase. Pp. 9 — 17. 2. Alvarez is not entitled to recover damages from Sosa under the ATS. Pp. 17 — 45. (a) The limited, implicit sanction to entertain the handful of international law cum common law claims understood in
1789 is not authority to recognize the ATS right of action Alvarez asserts here. Contrary to Alvarez‘s claim, the ATS is a jurisdictional statute creating no new causes of action. This does not mean, as Sosa contends, that the ATS was stillborn because any claim for relief required a further statute expressly authorizing adoption of causes of action. Rather, the reasonable inference from history and practice is that the ATS was intended to have practical effect the moment it became law, on the understanding that the common law would provide a cause of action for the modest number of international law violations thought to carry personal liability at the time: offenses against ambassadors, violation of safe conducts, and piracy. Sosa‘s objections to this view are unpersuasive. Pp. 17 — 30.
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CONFLICT OF LAWS 2012-2013 (b) While it is correct to assume that the First Congress understood that district courts would recognize private causes of action for certain torts in violation of the law of nations and that no development of law in the last two centuries has categorically precluded federal courts from recognizing a claim under the law of nations as an element of common law, there are good reasons for a restrained conception of the discretion a federal court should exercise in
considering such a new cause of action. In deriving a standard for assessing Alvarez‘s particular claim, it suffices to look to the historical antecedents, which persuade this Court that federal courts should not recognize claims under federal common law for violations of any international law norm with less definite content and acceptance among civilized nations than the 18th-century paradigms familiar when §1350 was enacted. Pp. 30 — 45. &nb sp; (i) Several reasons argue for great caution in adapting the law of nations to private rights. First, the prevailing conception of the common law has changed since 1790. When §1350 was enacted, the accepted conception was that the common law was found or discovered, but now it is understood, in most cases where a court is asked to state or formulate a common law principle in a new context, as made or created. Hence, a judge deciding in reliance on an international norm will find a substantial element of discretionary judgment in the decision. Second, along with, and in
part driven by, this conceptual development has come an equally significant rethinking of the federal courts‘ role in making common law. In Erie R. Co. v. Tompkins, 304 U.S. 64 , 78, this Court denied the existence of any federal ―general‖ common law, which largely withdrew to havens of specialty, with the general practice being to look for legislative guidance before exercising innovative authority over substantive law. Third, a decision to create a private right of action is better left to legislative judgment in most cases. E.g., Correctional Services Corp. v. Malesko, 534 U.S. 61, 68. Fourth, the potential implications for the foreign relations of the United States of recognizing private causes of action for violating international law should make courts particularly wary of impinging on the discretion of the Legislative and Executive Branches in managing foreign affairs. Fifth, this Court has no congressional mandate to seek out and define new and debatable violations of the law of nations, and modern indications of congressional understanding of the judicial role in the field have not affirmatively encouraged greater judicial creativity. Pp. 30 — 37. &nb sp; (ii) The limit on judicial recognition adopted here is fatal to Alvarez‘s claim. Alvarez contends that prohibition of arbitrary arrest has attained the status of binding customary international law and that his arrest was arbitrary because no applicable law authorized it. He thus invokes a general prohibition of arbitrary detention defined as officially sanctioned action exceeding positive authorization to detain under the domestic law of some government. However, he cites little authority that a rule so broad has the status of a binding customary norm today. He certainly cites nothing to justify the federal courts in taking his rule as the predicate for a federal lawsuit, for its implications would be breathtaking. It would create a cause of action for any seizure of an alien in violation of the Fourth Amendment, ,403 U.S. 388, that now supplanting the actions under 42 U.S.C. § 1983 and Bivens v. Six Unknown Fed. Narcotics Agents provide damages for such violations. And it would create a federal action for arrests by state officers who simply exceed their authority under state law. Alvarez‘s failure to marshal support for his rule is u nderscored by the Restatement (Third) of Foreign Relations Law of the United States, which refers to prolonged arbitrary detention, not relatively brief detention in excess of positive authority. Whatever may be said for his broad principle, it expresses an aspiration exceeding any binding customary rule with the specificity this Court requires. Pp. 38 — 45.
— oOo — I. CORPORATIONS ERIKS PTE. LTD., petitioner , v. COURT OF APPEALS and DELFIN F. ENRIQUEZ, JR., respondents . Petitioner, Eriks Pte. Ltd., is a non-resident foreign corporation engaged in the manufacture and sale of elements, equipment, pipes and fittings used for industrial purposes. On various dates, private respondent Delfin Enriquez, Jr., ordered and received from petitioner said materials. Subsequently, demands were made by petitioner upon private respondent to settle his account, but the latter failed/refused to do so. Petitioner filed a complaint for the recovery of sum of money, plus interest thereon and damages alleging that it is not licensed to do business in the Philippines and is not so engaged and is suing on an isolated transaction for which it has capacity to sue. Private respondent responded with a Motion to Dismiss, contending that petitioner corporation had no legal capacity to sue. The trial court dismissed the action on the ground that petitioner is a foreign corporation doing business in the Philippines without a license. On appeal, respondent Court affirmed said order as it deemed the series of transactions between petitione r and private respondent not to be an “isolated or casual transaction.” ISSUE:
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CONFLICT OF LAWS 2012-2013 Whether petitioner-corporation may maintain an action in Philippine courts considering that it has no license to do business in the country. The resolution of this issue depe nds on whether petitioner’s business with private respondent may be treated as isolated transactions. HELD:
The petition has no merit. The Corporation Code provides: “Sec. 133. Doing business without a license. - No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.”
The aforementioned provision prohibits, not merely absence of the prescribed license, but it also bars a foreign corporation “doing business” in the Philippines without such license access to our courts. A foreign corporation without such license is not ipso facto incapacitated from bringing an action. A license is necessary only if it is “transacting or doing business” in the country. Republic Act No. 7042, otherwise known as the “Foreign Investment Act of 1991,” defines “doing business” as follows: “SEC. 3. Definitions. - As used in this Act: (d) the phrase ‘doing business’ shall include soliciting orders, service contracts, op ening offices, whether called ‘liaison’ offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totalling one hundred eight(y) (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization: Provided, however, That the phrase ‘doing business’ shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account.” (underscoring supplied)
In the durable case of The Mentholatum Co. v. Mangaliman, this Court discoursed on the test to determine whether a foreign company is “doing business” in the Philippines, thus: “x x x The true test, however, seems to be whether the foreign corporation is continuing the body or substance of the business or enterprise for which it was organized or whether it has substantially retired from it and turned it over to another.”
The accepted rule in jurisprudence is that each case must be judged in the light of its own environmental circumstances. It should be kept in mind that the purpose of the law is to subject the foreign corporation doing business in the Philippines to the jurisdiction of our courts. It is not to prevent the foreign corporation from performing single or isolated acts, but to bar it from acquiring a domicile for the purpose of business without first taking the steps necessary to render it amenable to suits in the local courts. We hold that the series of transactions in question could not have been isolated or casual transactions. What is determinative of “doing business” is not really the number or the quantity of the transactions, but more importantly, the intention of an entity to continue the body of its business in the country. The number and quantity are merely evidence of such intention. The phrase “isolated transaction” has a definite and fixed meaning, i.e. a transaction or series of transactions set apart from the common business of a foreign enterprise in the sense that there is no intention to engage in a progressive pursuit of the purpose and object of the business organization. Whether a foreign corporation is “doing business” does not necessarily depend upon the frequency of its transactions, but more upon the nature and character of the transactions. Accordingly and ineluctably, petitioner must be held to be incapacitated to maintain the action a quo against private respondent. It was never the intent of the legislature to bar court access to a foreign corporation or entity which happens to obtain an isolated order for business in the Philippines. Neither, did it intend to shield debtors from their UNIVERSITY
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CONFLICT OF LAWS 2012-2013 legitimate liabilities or obligations. But it cannot allow foreign corporations or entities which conduct regular business any access to courts without the fulfillment by such corporations of the necessary requisites to be subjected to our government’s regulation and authority. By securing a license, the foreign entity would be giving assurance that it will abide by the decisions of our courts, even if adverse to it. By this judgment, we are not foreclosing petitioner’s right to collect payment. Res judicata does not set in a case dismissed for lack of capacity to sue, because there has been no determination on the merits. Moreover, this Court has ruled that subsequent acquisition of the license will cure the lack of capacity at the time of the execution of the contract.
— oOo —
HUTCHISON PORTS PHILIPPINES LIMITED, petitioner, v. SUBIC BAY METROPOLITAN AUTHORITY, INTERNATIONAL CONTAINER TERMINAL SERVICES INC., ROYAL PORT SERVICES INC. and the EXECUTIVE SECRETARY,respondents. “While foreign investors are always welcome in this land to collaborate with us for our mutual benefit, they must be prepared as an indispensable condition to respect and be bound by Philippine law in proper cases, as in the one at bar.”
The Subic Bay Metropolitan Authority (or SBMA) advertised an invitation offering to the private sector the opportunity to develop and operate a modern marine container terminal within the Subic Bay Freeport Zone. Out of seven, three were declared by the SBMA as qualified bidders: (1) International Container Terminal Services, Inc. (or ICTSI); (2) Royal Port Services, Inc. (or RPSI); and (3) Hutchison Ports Philippines Limited (or HPPL). All three qualified bidders were required to submit their respective formal bid package. After review and evaluation, it concluded that petitioner HPPL’s Business Plan was “far superior to that of the two other bidders.” The SBMA issued a resolution declaring that the winning bid be awarded to (HPPL). ICTSI filed a letter-appeal with SBMA’s Board of Directors and before the Office of the President requesting the nullification and reversal of the resolution. In a memorandum, the President directed SBMA Chairman Gordon to re-evaluate the financial bids with the COA actively participating. The SBMA Board issued another Resolution, declaring HPPL as the winning bidder. Notwithstanding the SBMA Board’s recommendations and action awarding the project to HPPL, then Executive Secretary Ruben Torres submitted a memorandum to the Office of the President recommending that another rebidding be conducted. HPPL, feeling aggrieved by the SBMA’s failure and refusal to commence negotiations and to execute the Concession Agreement despite its earlier pronouncements that HPPL was the winning bidder, filed a complaint against SBMA before the Regional Trial Court (RTC) for specific performance, mandatory injunction and damages.
Pending litigation, the SBMA sent notices to plaintiff HPPL, ICTSI and RPSI requesting them to declare the ir interest in participating in a rebidding of the proposed project. HPPL learned that the SBMA had accepted the bids of ICTSI and RPSI who were the only bidders who qualified. HPPL filed a motion for maintenance of the status quo. The said motion was denied by the court a quo. Hence, this petition seeking to obtain a prohibitory injunction. ISSUE:
Whether petitioner HPPL has the legal capacity to seek redress from this Court. The maelstrom of this issue is whether participating in the bidding is a mere isolated transaction, or did it constitute “engaging in” or “transacting” business in the Philippines such that petitioner HPPL needed a license to do business in the Philippines before it could come to court. HELD:
Petition DIMISSED. There is no genera l rule or governing principle laid down as to what constitutes “doing” or “engaging in” or “transacting” business in the Philippines. Each case must be judged in the light of its peculiar circumstances. Thus, it has often been held that a single act or tr ansaction may be considered as “doing business” when a corporation performs acts for which it was created or exercises some of the functions for which it was organized. The amount
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CONFLICT OF LAWS 2012-2013 or volume of the business is of no moment, for even a singular act cannot be merely incidental or casual if it indicates the foreign corporation’s intention to do business. Participating in the bidding process constitutes “doing business” because it shows the foreign corporation’s intention to engage in business here. The bidding for the concession contract is but an exercise of the corporation’s reason for creation or existence. In this regard, it is the performance by a foreign corporation of the acts for which it was created, regardless of volume of business, that determines whether a foreign corporation needs a license or not.
The primary purpose of the license requirement is to compel a foreign corporation desiring to do business within the Philippines to submit itself to the jurisdiction of the courts of the state and to enable the government to exercise jurisdiction over them for the regulation of t heir activities in this country. If a foreign corporation operates a business in the Philippines without a license, and thus does not submit itself to Philippine laws, it is onl y just that said foreign corporation be not allowed to invoke them in our courts when the need arises. The requirement of a license is not intended to put foreign corporations at a disadvantage, for the doctrine of lack of capacity to sue is based on considerations of sound public policy. Accordingly, petitioner HPPL must be held to be incapacitated to bring this petition for injunction before this Court for it is a foreign corporation doing business in the Philippines without the requisite license.
— oOo — MR HOLDINGS, LTD., petitioner, v. SHERIFF CARLOS P. BAJAR, SHERIFF FERDINAND M. JANDUSAY, SOLIDBANK CORPORATION, AND MARCOPPER MINING CORPORATION, respondents . Under a “Principal Loan Agreement” and “Complementary Loan Agreement,” Asian Development Ba nk (ADB), a multilateral development finance institution, agreed to extend to Marcopper Mining Corporation (Marcopper) a loan to finance the latter’s mining project. To secure the loan, Marcopper executed in favor of ADB a “Deed of Real Estate and Chattel Mortgage” covering substantially all of its properties and assets in Marinduque.
ADB and Placer Dome, Inc., (Placer Dome), a foreign corporation which owns 40% of Marcopper, executed a “Support and Standby Credit Agreement” whereby the latter agreed to p rovide Marcopper with cash flow support for the payment of its obligations to ADB. When Marcopper defaulted in the payment of its loan obligation, Placer Dome,agreed to have its subsidiary corporation, petitioner MR Holding, Ltd., assumed Marcopper’s oblig ation to ADB. Consequently, in an “Assignment Agreement”, ADB assigned to petitioner all its rights, interests and obligations under the principal and complementary loan agreements. Marcopper likewise executed a “Deed of Assignment” in favor of petitioner. Under its provisions, Marcopper assigns, transfers, cedes and conveys to petitioner, its assigns and/or successors-in-interest all of its properties, mining equipment and facilities. Meanwhile, it appeared that Solidbank Corporation (Solidbank) obtained a Partial Judgment against Marcopper from the RTC. Upon Solidbank’s motion, the RTC of Manila issued a writ of execution pending appeal directing respondent sheriff, to require Marcopper to pay the sums of money to satisfy the Partial Judgment. Having learned of the scheduled auction sale, petitioner served an “Affidavit of Third -Party Claim” upon respondent sheriffs asserting its ownership over all Marcopper’s mining properties, equipment and facilities by virtue of the “Deed of Assignment.” Upon the denial, petitioner commenced with the RTC, a complaint for reivindication of properties, etc., with prayer for preliminary injunction and temporary restraining order against respondents Solidbank, Marcopper, and sheriffs Bajar and Jandusay. RTC denied petiti oner’s application on the ground, among others, that petitioner has no legal capacity to sue, it being a foreign corporation doing business in the Philippines without license. Unsatisfied, petitioner elevated the matter to the Court of Appeals which held that the RTC did not commit grave abuse of discretion in denying petitioner’s prayer for a writ of preliminary injunction. Hence, the present Petition for Review on Certiorari by MR Holdings, Ltd. In its petition, petitioner alleges that it is not “d oing business” in the Philippines and characterizes its participation in the assignment contracts (whereby Marcopper’s assets were transferred to it) as mere isolated acts that cannot foreclose its right to sue in local courts. ISSUE:
Whether petitioner have the legal capacity to sue.
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OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 HELD:
The petition is impressed with merit. The following principles governing a foreign corporation’s right to sue in local courts have long been settled by our Corporation Law, to wit: a) if a foreign corporation does business in the Philippines without a license, it cannot sue before the Philippine courts; b)if a foreign corporation is not doing business in the Philippines, it needs no license to sue before Philippine courts on an isolated transaction or on a cause of action entirely independent of any business transaction; and c) if a foreign corporation does business in the Philippines with the required license, it can sue before Philippine courts on any transaction.
Apparently, it is not the absence of the prescribe d license but the “doing (of) business” in the Philippines without such license which debars the foreign corporation from access to our courts. The question whether or not a foreign corporation is doing business is dependent principally upon the facts and circumstances of each particular case, considered in the light of the purposes and language of the pertinent statute or statutes involved and of the general principles governing the jurisdictional authority of the state over such corporations. Batas Pambansa Blg. 68, otherwise known as “The Corporation Code of the Philippines,” is silent as to what constitutes doing” or “transacting” business in the Philippines. Fortunately, jurisprudence has supplied the deficiency and has held that the term “implies a continuity of commercial dealings and arrangements, and contemplates, to that extent, the performance of acts or works or the exercise of some of the functions normally incident to, and in progressive prosecution of, the purpose and object for which the c orporation was organized.” In the case at bar, the Court of Appeals categorized as “doing business” petitioner’s participation under the “Assignment Agreement” and the “Deed of Assignment.” This is simply untenable. The expression “doing business” should not be given such a strict and literal construction as to make it apply to any corporate dealing whatever. At this early stage and with petitioner’s acts or transactions limited to the assignment contracts, it cannot be said that it had performed acts intended to continue the business for which it was organized. It may not be amiss to point out that the purpose or business for which petitioner was organized is not discernible in the records. No effort was exerted by the Court of Appeals to establish the nexus between petitioner’s business and the acts supposed to constitute “doing business.” Thus, whether the assignment contracts were incidental to petitioner’s business or were continuation thereof is beyond determination.
We cannot apply the case cited by the Court of Appeals, Far East Int’l Import and Export Corp. v. Nankai Kogyo Co., Ltd., which held that a single act may still constitute “doing business” if “it is not merely incidental or casual, but is of such character as distinctly to indicate a purpose on the part of the foreign corporation to do other business in the state.” In said case, there was an express admission from an official of the foreign corporation that he was sent to the Philippines to look into the operation of mines, th ereby revealing the foreign corporation’s desire to continue engaging in business here. But in the case at bar, there is no evidence of similar desire or intent. Unarguably, petitioner may, as the Court of Appeals suggested , decide to operate Marcopper’s mining business, but, of course, at this stage, that is a mere speculation. Or it may decide to sell the credit secured by the mining properties to an offshore investor, in which case the acts will still be isolated transactions. To see through the present facts an intention on the part of petitioner to start a series of business transaction is to rest on assumptions or probabilities falling short of actual proof. Courts should never base its judgments on a state of facts so inadequately developed that it cannot be determined where inference ends and conjecture begins.
In the final analysis, we are convinced that petitioner was engaged only in isolated acts or transactions. Single or isolated acts, contracts, or transactions of foreign corporations are not regarded as a doing or carrying on of business. Typical examples of these are the making of a single contract, sale, sale with the taking of a note and mortgage in the state to secure payment therefor, purchase, or note, or the mere commission of a tort. In these instances, there is no purpose to do any other business within the country.
— oOo — STEELCASE, INC., petitioner, v. DESIGN INTERNATIONAL SELECTIONS, INC., respondent . A foreign corporation doing business in the Philippines may sue in Philippine Courts although not authorized to do business here against a Philippine citizen or entity who had contracted with and benefited by said corporation. To put
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CONFLICT OF LAWS 2012-2013 it in another way, a party is estopped to challenge the personality of a corporation after having acknowledged the same by entering into a contract with it.
Petitioner Steelcase, Inc., a foreign corporation existing under the laws of Michigan, U.S.A. and engaged in the manufacture of office furniture with dealers worldwide orally entered into a dealership agreement with respondent Design International Selections, Inc. (DISI), a corporation existing under Philippine Laws and engaged in the furniture business, including the distribution of furniture, whereby Steelcase granted DISI the right to market, sell, distribute, install, and service its products to end-user customers within the Philippines. The business relationship continued smoothly until it was terminated after the agreement was breached with neither party admitting any fault. Steelcase filed a complaint for sum of money against DISI alleging, among others, that DISI had an unpaid account. Steelcase prayed that DISI be ordered to pay actual or compensatory damages, exemplary damages, attorney’s fees, and costs of suit. In its Answer, DISI alleged that the complaint failed to state a cause of action and to contain the required allegations on Steelcase’s capacity to sue in the Philippines despite the fact that it (Steelcase) was doing business in the Philippines without the required license to do so. Consequently, it posited that the complaint should be dismissed because of Steelcase’s lack of legal capacity to sue in Philippine courts. The RTC dismissed the complaint and granted the TRO prayed for by DISI. It then concluded that Steelcase was “doing business” in the Philippines, as contemplated by Republic Act (R.A.) No. 7042 (The Foreign Investments Act of 1991), and since it did not have the license to do business in the country, it was barred from seeking redress from our courts until it obtained the requisite license to do so. Steelcase moved for the reconsideration of the questioned Order but the motion was denied by the RTC. Aggrieved, Steelcase elevated the case to the CA by way of appeal. The CA rendered its Decision affirming the RTC orders, ruling that Steelcase was a foreign corporation doing or transacting business in the Philippines without a license. The CA ruled that Steelcase was barred from access to our courts for being a foreign corporation doing business here without the requisite license to do so. Steelcase filed a motion for reconsideration but it was denied by the CA. Hence, this petition. ISSUE(S): 1. Whether Steelcase is doing business in the Philippines without a license; and 2. Whether DISI is estopped from challengin g the Steelcase’s legal capacity to sue. HELD:
The Court rules in favor of the petitioner. Steelcase is an unlicensed foreign corporation NOT doing business in the Philippines
The rule that an unlicensed foreign corporations doing business in the Philippine do not have the capacity to sue before the local courts is well-established. Section 133 of the Corporation Code of the Philippines explicitly states: Sec. 133. Doing business without a license. - No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.
The phrase “doing business” is clearly defined in Section 3(d) of R.A. No. 7042 (Foreign Investments Act of 1991), to wit: d) The phrase “doing business” shall include soliciting orders, service contracts, opening offices, whether called “liaison” offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totalling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization: Provided, however, That the phrase “doing business” shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its interests in such UNIVERSITY
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CONFLICT OF LAWS 2012-2013 corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account; (Emphases supplied)
This definition is supplemented by its Implementing Rules and Regulations, Rule I, Section 1(f) which elaborates on the meaning of the same phrase: f. “Doing business” shall include soliciting orders, service contracts, opening offices, whether liaison offices or branches; appointing representatives or distributors, operating under full control of the foreign corporation, domiciled in the Philippines or who in any calendar year stay in the country for a period totalling one hundred eighty [180] days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to and in progressive prosecution of commercial gain or of the purpose and object of the business organization. The following acts shall not be deemed “doing business” in the Philippines: xxx 3. Appointing a representative or distributor domiciled in the Philippines which transacts business in the representative's or distributor's own name and account; xxx.
It should be kept in mind that the determination of whether a foreign corporation is doing business in the Philippines must be judged in light of the attendant circumstances. In the case at bench, it is undisputed that DISI was founded in 1979 and is independently owned and managed by the spouses Leandro and Josephine Bantug. In addition to Steelcase products, DISI also distributed products of other companies including carpet tiles, relocatable walls and theater settings. This clearly belies DISI’s assertion that it was a mere conduit through which Steelcase con ducted its business in the country. From the preceding facts, the only reasonable conclusion that can be reached is that DISI was an independent contractor, distributing various products of Steelcase and of other companies, acting in its own name and for its own account.
All things considered, it has been sufficiently demonstrated that DISI was an independent contractor which sold Steelcase products in its own name and for its own account. As a result, Steelcase cannot be considered to be doing business in the Philippines by its act of appointing a distributor as it falls under one of the exceptions under R.A. No. 7042. DISI is estopped from challenging Steelcase’s legal capacity to sue
Regarding the second issue, Steelcase argues that assuming arguendo that it had been “doing business” in the Philippines without a license, DISI was nonetheless estopped from challenging Steelcase’s capacity to sue in the Philippines. Steelcase claims that since DISI was aware that it was doing business in the Philippines without a license and had benefited from such business, then DISI should be estopped from raising the defense that Steelcase lacks the capacity to sue in the Philippines by reason of its doing business without a license. The argument of Steelcase is meritorious. Unquestionably, entering into a dealership agreement with Steelcase charged DISI with the knowledge that Steelcase was not licensed to engage in business activities in the Philippines. This Court has carefully combed the records and found no proof that, from the inception of the dealership agreement in 1986 until September 1998, DISI even brought to Steelcase’s attention that it was improperly doing business in the Philippines without a license. By acknowledging the corporate entity of Steelcase and entering into a dealership agreement with it and even benefiting from it, DISI is estopped from questioning Steelcase’s existence and capacity to sue. This Court has time and again upheld the principle that a foreign corporation doing business in the Philippines without a license may still sue before the Philippine courts a Filipino or a Philippine entity that had derived some benefit from their contractual arrangement because the latter is considered to be estopped from challenging the personality of a corporation after it had acknowledged the said corporation by entering into a contract with it. In Antam Consolidated, Inc. v. Court of Appeals , this Court had the occasion to draw attention to the common ploy of invoking the incapacity to sue of an unlicensed foreign corporation utilized by defaulting domestic companies UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 which seek to avoid the suit by the former. The Court cannot allow this to continue by always ruling in favor of local companies, despite the injustice to the overseas corporation which is left with no available remedy.
— oOo — J. PROPERTY RIGHTS AND INTERNATIONAL COMMERCE LAUREL v. GARCIA TANADA v. ANGARA MIRPURI v. CA
— oOo — K. DEATH, SUCCESSION AND ADMINISTRATION VDA. DE PEREZ v. TOLETE REPUBLIC v. VILLARAMA, JR ANCHETA v. GUERSEY-DALAYGON
— oOo — L. FOREIGN JUDGMENTS PHILIPPINE INTERNATIONAL SHIPPING CORP v. CA OIL AND NATURAL GAS COMMISSION v. CA
— oOo — PACIFIC ASIA OVERSEAS SHIPPING CORPORATION, petitioner v NATIONAL LABOR COMMISSION AND TEODORO RANCES, respondents Facts
Petitioner Pacific Asia Overseas Shippung Corporation (PASCOR) hired private respondent as a radio operator of a vessel belonging to it‘s foreign principal, the Gulf East Ship Management Limited. Within the period of 4 months, Rances has been transferred numerous times because of his bad work ethic. The foreign principal fired him. Petitioner filed a complaint against Rances with the POEA for acts unbecoming of a marine officer and for character assassination. Rances denied the allegations and by way of a counterclaim demanded an amount of US$ 1,500 which a court in Dubai had he contended, awarded in his favor against the foreign principal. POEA found Rances guilty hence he was suspended and sternly warned. Subsequently, Rances filed a case against PASCOR in order to enforce the alleged award given to him in Dubai. The one awarded to him through his counterclaim. However PASCOR contends that the POEA had no jurisdiction over cases for the enforcement of foreign judgments and that such decision was not properly proved . POEA held that petitioner was liable to pay in line with the foreign judgment. PASCOR appealed but it was denied. POEA elevated the case to the NLRC wherein the latter also denied petitioner‘s appeal. Hence this petition. Issue
Whether POEA has jurisdiction over cases for the enforcement of foreign judgments. Held
Petition granted
Petitioner argues vigorously that the POEA had no authority and jurisdiction to enforce the judgment of a foreign court. Under Section 1, Rule 1, Book VI of the POEA Rules and Regulations, it will be seen that the POEA has UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 jurisdiction to decide all cases 'involving employer employee relations arising out of or by virtue of any law or contract involving Filipino workers for overseas employment, including seamen." Respondent Rances, however, relied not upon the employer - employee relationship between himself and petitioner corporation and the latter's foreign principal, but rather upon the judgment obtained by him from the Dubai Court which had apparently already been partially satisfied by payment to respondent Rances of US$ 5,500.00. The POEA has no jurisdiction to hear and decide a claim for enforcement of a foreign judgment. Such a claim must be brought before the regular courts. The POEA is not a court; it is an administrative agency exercising, inter alia, adjudicatory or quasi-judicial functions. Neither the rules of procedure nor the rules of evidence which are mandatorily applicable in proceedings before courts, are observed in proceedings before the POEA. 10 Even assuming ( arguendo, merely) that the POEA has jurisdiction to recognize and enforce a foreign judgment, still respondent Rances cannot rely upon the Dubai decision. The Dubai decision was not properly proved before the POEA. The Dubai decision purports to be the written act or record of an act of an official body or tribunal of a foreign country, and therefore a public writing under Section 20 (a) of Rule 132 of the Revised Rules of Court. Sections 25 and 26 of Rules 132 prescribe the manner of proving a public of official record of a foreign country in the following terms: Sec. 25. Proof of public or official record . — An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied. if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate maybe be made by a secretary of embassy or litigation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. Sec. 26. What attestation of copy must state . — Whenever a copy of a writing is attend for the purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court . (Emphasis supplied) In the instant case, respondent Rances failed to submit any attestation issued by the proper Dubai official having legal custody of the original of the decision of the Dubai Court that the copy presented by said respondent is a faithful copy of the original decision, which attestation must furthermore be authenticated by a Philippine Consular Officer having jurisdiction in Dubai. The transmittal letter, dated 23 September 1984, signed by Mohd Bin Saleh, Honorary Consul for Philippines' does not comply with the requirements of either the attestation under Section 26 nor the authentication envisaged by Section 25. 11 There is another problem in respect of the admissibility in evidence of the Dubai decision. The Dubai decision is accompanied by a document which purports to be an English translation of that decision., but that translation is legally defective. Section 34 of Rule 132 of the Revised Rules of Court requires that documents written in a nonofficial language hke Arabic) shall not be admitted as evidence unless accompanied by a translation into English or Spanish or Filipino FAUNTLEROY v . LUM Facts
Plaintiff Fauntleroy and defendant Lum entered into a gambling transaction involving cotton futures. This happened in the State of Mississippi. Lum did not pay so Fauntleroy initiated an arbitration proceeding to settle their dispute. An award was made in favor of Fauntleroy. The action for the enforcement of the award was brought to the state court of Missouri for during that time Lum was temporarily staying there. Lum contends that the award should not be enforced against him because under the state laws of Mississippi where the original action arose, such transaction is invalid. The Missouri court refused to hear this argument. Lum then brought an appeal before the
Mississippi Supreme Court, which found in Lum‘s favor. The court specifically held that the Missouri court could not enforce an illegal transaction. Fauntleroy appealed. Issue
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 Whether the illegality of the original cause of action in Mississippi can be relied upon there as a ground for denying a recovery upon a judgment of another state. Held
Fauntleroy Doctrine is a principle which says a state must give full faith and credit to another state's judgment if the other state had proper jurisdiction, even if the judgment is based on a claim that is illegal in the state in which enforcement is sought. The standard was set in the case Fauntleroy v. Lum, 210 U.S. 230 (U.S. 1908) from which the doctrine gets its name.
— oOo — MILWAUKEE COUNTY, appelant v. M. E. WHITE CO., appellee Facts
Appellant, Milwaukee county, a county and citizen of Wisconsin, brought suit in the District Court for Northern Illinois against M. E. White Company, appellee, a corporation and citizen of Illinois, to recover on a judgment for $52,165.84 which appellant had duly recovered and entered against the appellee ( ME White) in the circuit court of Milwaukee county, Wis., a court of general jurisdiction. The judgment is said to be for taxes duly assessed against appellee (ME White), under Wisconsin statutes, upon income received from its business transacted within the state under state license. The District Court dismissed the cause on the ground that, as the suit was in substance brought to enforce the revenue laws of Wisconsin, it could not be maintained in the District Court in Illinois. Appellee (ME White) contends that a United States District Court in and for the State of Illinois, having jurisdiction of the parties should not entertain jurisdiction of an action therein brought, based upon a valid judgment for over $3,000 rendered by a court of competent jurisdiction in the State of Wisconsin against the same defendant, which judgment was predicated upon an income tax due from the defendant to the State of Wisconsin because (1) such a suit is not within the judicial power conferred upon District Courts by the Constitution and laws of the United States; and (2) because a judgment for taxes constitutes an exception to the requirement of the Constitution and statutes of the United States that full faith and credit be given in each state to the public acts and judicial proceedings of every state. Issue
Should a United States District Court in and for the State of Illinois, having jurisdiction of the parties, entertain jurisdiction of an action therein brought, based upon a valid judgment for over $3,000 rendered by a court of competent jurisdiction in the State of Wisconsin against the same defendant, which judgment was predicated upon an income tax due from the defendant to the State of Wisconsin?' Held
Yes Trial of these issues, even though the judgment be for taxes incurred under the laws of another state, requires no scrutiny of its revenue laws or of relations established by those laws with its citizens, and calls for no pronouncement upon the policy of a sister state. It involves no more embarrassment than the interstate rendition of fugitives from justice, the constitutional command for which is no more specific than that requiring full faith and credit. Foreign judgments are not liens and are not entitled to execution in the state to which they are brought. See M'Elmoyle v. Cohen, 13 Pet. 312, 10 L.Ed. 177; Cole v. Cunningham, supra, 133 U.S. 107, 112, 10 S.Ct. 269, 33 L.Ed. 538; cf. Gasquet v. Fenner, 247 U.S. 16, 38 S.Ct. 416, 62 L.Ed. 956; Sistare v. Sistare, 218 U.S. 1, 26, 30 S.Ct. 682, 54 L.Ed. 905, 28 L.R.A. (N.S.) 1068, 20 Ann.Cas. 1061. They can no more demand priority over domestic claims for taxes than a judgment upon a simple contract debt, which is equally a binding obligation of the judgment debtor where rendered, and to which full faith and credit must be accorded. In numerous cases this court has held that credit must be given to the judgment of another state, although the forum would not be required to entertain the suit on which the judgment was founded; that considerations of policy of the forum which would defeat a suit upon the original cause of action are not involved in a suit upon the judgment and are insufficient to defeat it. Full faith and credit is required to be given to the judgment of another state, although the original suit on which it was based arose in the state of the forum and was barred there by the UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 Statute of Limitations when the judgment was rendered. Christmas v. Russell, 5 Wall. 290, 18 L.Ed. 475; Roche v. McDonald, 275 U.S. 449, 48 S.Ct. 142, 72 L.Ed. 365, 53 A.L.R. 1141, and where the original suit was upon a gambling contract invalid by the law of the forum where it was made, Fauntleroy v. Lum, supra. It was required where the judgment was for wrongful death, although it was thought that the statute giving the recovery was not entitled to full faith and credit. Kenney v. Supreme Lodge, supra; compare Converse v. Hamilton, supra; Broderick v. Rosner, supra; see, also, American Express Co. v. Mullins, 212 U.S. 311, 29 S.Ct. 381, 53 L.Ed. 525, 15 Ann.Cas. 536. — oOo — D.H. OVERMYER CO. INC, OF OHIO ET AL. , petitioner v. FRICK CO. CERTITORARI TO THE COURT OF APPELAS OF OHIO, LUCAS COUNTY, private respondent Facts
Petitioner Overmyer Corporation executed a contract with private respondent Frick Co. wherein the latter was tasked to undertake the installation of an automatic refrigeration system in a warehouse owned by the former in Toledo, Ohio. The cost agreed upon was $ 223,000. Petitioner defaulted in its payment and $ 120,000 was overdue. Due to this, private respondent had to stop operations . Although this is so, private respondent was willing to accept an offer to pay in cash provided that the balance can be evidenced by interest bearing judgment notes . Three mechanics lien were made against the Toledo property. The parties agreed on the partial agreed on a partial cash payment and an (first) installment note was issued for the balance. This note did not contain a cognivit provision (confession of judgment provision). In line with their new agreement private respondent continued and completed the work. Petitioner acknowledged the completion in accordance with their agreement but requested for additional time to make the installment payments. The parties agreed on a second note now containing a cognivit provision. The note contained the following judgment clause:
―The undersigned hereby authorize any attorney designated by the Holder hereof to appear in any court of record in the State of Ohio, and waive this issuance and service of process, and confess a judgment against the undersigned in favor of the holder of this note , for the principal of this note plus interest if the undersigned defaults in any payment of principal and interest if said default shall continue for the period of 15
days‖.
Petitioner stopped making payments under the new note contending that there was a breach of contract . Private respondent under the cognivit provision , through an attorney unknown to but on behalf of petitioner without personal service or prior notice, caused judgment to be entered on the note. Petitioner contends that the provision is a violation of due process. The trial court ruled against petitioner which was also affirmed on appeal. Issue
Is the cognivit clause constitutional under the due process clause of the 14 th amendment Held
Judgment affirmed, petition dismissed The cognovit is the ancient legal device by which the debtor consents in advance to the holder's obtaining a judgment without notice or hearing, and possibly even with the appearance, on the debtor's behalf, of an attorney designated by the holder. 2 It was known at least as far back as Blackstone's time. 3 W. Blackstone, Commentaries *397. 3 In a case applying Ohio law, it was [405 U.S. 174, 177] said that the purpose of the cognovit is "to permit the note holder to obtain judgment without a trial of possible defenses which the signers of the notes might assert." Hadden v. Rumsey Products, Inc., 196 F.2d 92, 96 (CA2 1952). And long ago the cognovit method was described by the Chief Justice of New Jersey as "the loosest way of binding a man's property that ever was devised in any civilized country." Alderman v. Diament, 7 N. J. L. 197, 198 (1824). Mr. Dickens noted it with obvious disfavor. Pickwick Papers, c. 47. The cognovit has been the subject of comment, much of it critical. Even if, for present purposes, we assume that the standard for waiver in a corporate-property-right case of this kind is the same standard applicable to waiver in a criminal proceeding, that is, that it be voluntary, knowing, and intelligently made, Brady v. United States, [405 U.S. 174, 186] 397 U.S. 742, 748 (1970); Miranda v. Arizona, 384 U.S., at 444 , or "an intentional relinquishment or abandonment of a known right or privilege," Johnson v. Zerbst, UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 304 U.S. 458, 464 (1938); Fay v. Noia, 372 U.S., at 439 , and even if, as the Court has said in the civil area, "[w]e do not presume acquiescence in the loss of fundamental rights," Ohio Bell Tel. Co. v. Public Utilities Comm'n, 301 U.S. 292, 307 (1937), that standard was fully satisfied here. This is not a case of unequal bargaining power or overreaching. The Overmyer-Frick agreement, from the start, was not a contract of adhesion. There was no refusal on Frick's part to deal with Overmyer unless Overmyer agreed to a cognovit. The initial contract between the two corporations contained no confession-of-judgment clause. When, later, the first installment note from Overmyer came into being, it, too, contained no provision of that kind. It was only after Frick's work was completed and accepted by Overmyer, and when Overmyer again became delinquent in its payments on the matured claim and asked for further relief, that the second note containing the clause was executed. We therefore hold that Overmyer, in its execution and delivery to Frick of the second installment note containing the cognovit provision, voluntarily, intelligently, and knowingly waived the rights it otherwise possessed to prejudgment notice and hearing, and that it did so with full awareness of the legal consequences. Our holding necessarily means that a cognovit clause is not, per se, violative of Fourteenth Amendment due process. Overmyer could prevail here only if the clause were constitutionally invalid. The facts of this case, as [405 U.S. 174, 188] we observed above, are important, and those facts amply demonstrate that a cognovit provision may well serve a proper and useful purpose in the commercial world and at the same time not be vulnerable to constitutional attack. — oOo — PHILIPPINE ALUMINUM WHEETS v. FASGI ENTERPRISE
— oOo — ASIAVEST MERCHANT BANKERS (M) BERHAD, petitioner , v. COURT OF APPEALS and PHILIPPINE NATIONAL CONSTRUCTION CORPORATION,respondents . [G.R. No. 110263. July 20, 2001]
“A foreign judgment is presumed to be valid and binding in the country from which it comes, until a contrary showing.” “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.”
FACTS:
DE LEON, JR., J .: 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. It appears that sometime in 1983, 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. On September 13, 1985, the High Court of Malaya (Commercial Division) rendered judgment in favor of the petitioner and against the private respondent which is also designated therein as the ― 2nd Defendant.‖ On the same day, September 13, 1985, the High Court of Malaya issued an Order directing the private
respondent (also designated therein as the ―2nd Defendant‖) to pay petitioner interest on the sums covered by the said Judgment, thus: UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 (i) the sum of $2,586,866.91 from the 2nd day of March 1983 to the date of payment; and (ii) the sum of $2,521,423.32 from the 11th day of March 1983 to the date of Payment. Following unsuccessful attempts to secure payment from private respondent under the judgment, petitioner initiated on September 5, 1988 the complaint before Regional Trial Court of Pasig, Metro Manila, to enforce the judgment of the High Court of Malaya. 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 filed on June 8, 1989, 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 respondent‘s counsel waived any and all objections to the High Court‘s jurisdiction in a pleading filed before the court.
In due time, the trial court rendered its Decision dated October 14, 1991 dismissing petitioner‘s 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 in a Decision dated May 19, 1993. ISSUES:
Whether or not a foreign judgement must needs be proven valid in the country from where it comes before it can be recognized in Philippine courts. (NO) Whether or not a foreign judgement is valid, if it was made in violation of procedural r ules in the Philippines. (YES) HELD:
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 judgment of the High Court of Malaya by the evidence it offered (they offered authenticated copies, letters, billing memorandum, etc.). 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. Private respondent failed to sufficiently discharge the burden that fell upon it – to prove by clear and convincing evidence the grounds which it relied upon to prevent enforcement of the Malaysian High Court judgment, namely, (a) that jurisdiction was not acquired by the Malaysian Court over the person of private UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 respondent due to alleged improper service of summons upon private respondent and the alleged lack of authority of its counsel to appear and represent private respondent in the suit; (b) the foreign judgment is allegedly tainted by evident collusion, fraud and clear mistake of fact or law; and (c) not only were the requisites for enforcement or recognition allegedly not complied with but also that the Malaysian judgment is allegedly contrary to the
Constitutional prescription that the ―every decision must state the facts and law on which it is based.‖
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. On the ground that collusion, fraud and clear mistake of fact and law tainted the judgment of the High Court of Malaya, no clear evidence of the same was adduced or shown. Lastly, there is no merit to the argument that the foreign judgment is not enforceable in view of the absence of any statement of facts and law upon which the award in favor of the petitioner was based. As aforestated, the lex fori or the internal law of the forum governs matters of remedy and procedure. Considering that under the procedural rules of the High Court of Malaya, a valid judgment may be rendered even without stating in the judgment every fact and law upon which the judgment is based, then the same must be accorded respect and the courts in this jurisdiction cannot invalidate the judgment of the foreign court simply because our rules provide otherwise.
— oOo — IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE TERRITORY OF GUAM OF ATTY. LEON G. MAQUERA [B.M. No. 793. July 30, 2004] “The judgment, resolution or order of the foreign court or disciplinary agency shall be prima facie evidence of the ground for di sbarment or suspension.”
FACTS:
TINGA, J.: In a Letter dated August 20, 1996, the District Court of Guam informed this Court of the suspension of Atty. Leon G. Maquera (Maquera) from the practice of law in Guam for two (2) years pursuant to the Decision rendered by the Superior Court of Guam on May 7, 1996 in Special Proceedings Case No. SP0075-94 a disciplinary case filed by the Guam Bar Ethics Committee against Maquera. The Court receiv ed certified copies of the record of Maquera‘s case from the District Court of Guam on December 8, 1997.
Thereafter, Maquera‘s case was referred by the Court to the Integrated Bar of the Philippines (IBP) for investigation report and recommendation within sixty (60) days from the IBP‘s receipt of the case records. The IBP sent Maquera a Notice of Hearing requiring him to appear before the IBP‘s Commission on Bar Discipline on July 28, 1998. However, the notice was returned unserved because Maquera had already moved from his last known address in Agana, Guam and did not leave any forwarding address. On October 9, 2003, the IBP submitted to the Court its Report and Recommendation and its Resolution No. XVI- 2003-110, indefinitely suspending Maquera from the practice of law within the Philippines until and unless he updates and pays his IBP membership dues in full. The IBP found that Maquera was admitted to the Philippine Bar on February 28, 1958. On October 18, 1974, he was admitted to the practice of law in the territory of Guam. He was suspended from the practice of law in
Guam for misconduct, as he acquired his client‘s property as payment for his legal services, then sold it and as a consequence obtained an unreasonably high fee for handling his client‘s case.
On the basis of the Decision of the Superior Court of Guam, the IBP concluded that although the said court
found Maquera liable for misconduct, ―there is no evidence to establish that [Maquera] committed a breach of UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013
ethics in the Philippines.‖ However, the IBP still resolved to suspend him indefinitely for his failure to pay his annual dues as a member of the IBP since 1977, which failure is, in turn, a ground for removal of the name of the delinquent member from the Roll of Attorneys under Section 10, Rule 139-A of the Revised Rules of Court. ISSUE:
Whether or not a member of the Philippine Bar who was disbarred or suspended from the practice of law in a foreign jurisdiction, where he has also been admitted as an attorney, be meted the same sanction as a member of the Philippine Bar for the same infraction committed in the foreign jurisdiction. HELD:
The power of the Court to disbar or suspend a lawyer for acts or omissions committed in a foreign jurisdiction is found in Section 27, Rule 138 of the Revised Rules of Court, as amended by Supreme Court Resolution dated February 13, 1992, which states: Section 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor. — A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office , grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to ta ke before admission to practice , or for a willful disobedience appearing as attorney for a party to a case without authority to do so. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. The disbarment or suspension of a member of the Philippine Bar by a competent court or other disciplinatory agency in a foreign jurisdiction where he has also been admitted as an a ttorney is a ground for his disbarment or suspension if the basis of such action includes any of the acts hereinabove enumerated. The judgment, resolution or order of the foreign court or disciplinary agency shall be prima facie evidence of the ground for disbarment or suspension .
The Superior Court of Guam found that Maquera acquired his client‘s property by exercising the right of redemption previously assigned to him by the client in payment of his legal services. Such transaction falls squarely under Article 1492 in relation to Article 1491, paragraph 5 of the Civil Code of the Philippines. Paragraph 5 of Article 1491 prohibits the lawyer‘s acquisition by assignment of the client‘s property which is the subject of the litigation handled by the lawyer. Under Article 1492, the prohibition extends to sales in legal redemption. The prohibition ordained in paragraph 5 of Article 1491 and Article 1492 is founded on public policy because, by virtue of his office, an attorney may easily take advantage of the credulity and ignorance of his client and unduly enrich himself at the expense of his client.
It bears stressing that the Guam Superior Court‘s judgment ordering Maquera‘s suspension from the practice of law in Guam does not automatically result in his suspension or disbarment in the Philippines. Under Section 27, Rule 138 of the Revised Rules of Court, the acts which led to his suspension in Guam are mere grounds for
disbarment or suspension in this jurisdiction, at that only if the basis of the foreign court‘s action includes any of the
grounds for disbarment or suspension in this jurisdiction. Likewise, the judgment of the Superior Court of Guam only constitutes prima facie evidence of Maquera‘s unethical acts as a lawyer. It is only after reasonable notice and failure on the part of the respondent lawyer to appear during the scheduled investigation that an investigation may be conducted ex parte . Nevertheless, the Court agrees with the IBP that Maquera should be suspended from the practice of law for non-payment of his IBP membership dues from 1977 up to the present. Under Section 10, Rule 139-A of the Revised Rules of Court, non-payment of membership dues for six (6) months shall warrant suspension of membership in the IBP, and default in such payment for one year shall be ground for removal of the name of the delinquent member from the Roll of Attorneys.
— oOo —
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 ZOILO ANTONIO VELEZ v. ATTY. LEONARD S. DE VERA A.C. No. 6697, Bar Matter 1227 and A.M. No. 05-5-15-SC, 25 July 2006, (En Banc) “Considering that there is no foreign judgment to speak of, because it is still pending, the recommendation by the hearing officer of the State Bar of California does not constitute prima facie evidence of unethical behaviour.”
FACTS:
Per Curiam: Before Us are three consolidated cases revolving around Integrated Bar of the Philippines (IBP) Governor and Executive Vice-President (EVP) Atty. Leonard de Vera. The first pertains to a disbarment case questioning Atty. de Vera's moral fitness to remain as a member of the Philippine Bar, the second refers to Atty. de Vera's letter-request to schedule his oath taking as IBP National President, and the third case concerns the validity of his removal as Governor and EVP of the IBP by the IBP Board. The resolution of these cases will determine the national presidency of the IBP for the term 2005-2007. In a Complaint dated 11 April 2005, complainant Zoilo Antonio Velez moved for the suspension and/or disbarment of respondent Atty. Leonard de Vera based on the following grounds: 1) respondent's alleged misrepresentation in concealing the suspension order rendered against him by the State Bar of California; and 2) respondent's alleged violation of the so-called "rotation rule" enunciated in Administrative Matter No. 491 dated 06 October 1989 (in the Matter: 1989 IBP Elections). Complainant averred that the respondent, in appropriating for his own benefit funds due his client, was found to have performed an act constituting moral turpitude by the Hearing Referee Bill Dozier, Hearing Department – San Francisco, State Bar of California in Administrative Case No. 86-0-18429. Complainant alleged that the respondent was then forced to resign or surrender his license to practice law in the said state in order to evade the recommended three (3) year suspension. Complainant asserted that the respondent lacks the moral competence necessary to lead the country's most noble profession. ISSUE:
Whether or not a suspension and/or disbarment case, in the State of California, that is still pending, is sufficient ground for suspension and/or disbarment in the Philippines. HELD:
In his Memorandum26 dated 20 June 2005, complainant tendered the following issues for the consideration of the Court: I. WHETHER OR NOT RESPONDENT ATTORNEY LEONARD S. DEVERA (sic) COMMITED MALPRACTICE WHICH AMOUNTED TO MORAL T[U]RPITUDE IN THE STATE BAR OF xxxxxx As such, with respect to the first issue, this Court held that: " As for the administrative complaint filed against him by one of his clients when he was practicing law in California, which in turn compelled him to surrender his California license to practice law, he maintains that it cannot serve as basis for determining his moral qualification (or lack of it) to run for the position he is aspiring for. He explains that UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 there is as yet no final judgment finding him guilty of the administrative charge, as the records relied upon by the petitioners are mere preliminary findings of a hearing referee which are recommendatory findings of an IBP Commissioner on Bar Discipline which are subject to the review of and the f inal decision of the Supreme Court. He also stresses that the complainant in the California administrative case has retracted the accusation that he misappropriated the complainant's money, but unfortunately the retraction was not considered by the investigating officer . xxx"
"On the administrative complaint that was filed against respondent De Vera while he wa s still practicing law in California, he explained that no final judgment was rendered by the California Supreme Court finding him guilty of the charge. He surrendered his license to protest the discrimination he suffered at the hands of the investigator and he found it impractical to pursue the case to the end. We find these explanations satisfactory in the absence of contrary proof. It is a basic rule on evidence that he who alleges a fact has the burden to prove the same. In this case, the petitioners have not shown how the administrative complaint affects respondent De Vera's moral fitness to run for governor . The recommendation of the hearing officer of the State Bar of California, standing alone, is not proof of malpractice .
In the case of the Suspension From The Practice of Law In The Territory of Guam of Atty. Leon G. Maquera ,31 we were confronted with the question of whether or not a member of the Philippine Bar, who is concomitantly an attorney in a foreign jurisdiction and who was suspended from the practice of law in said foreign jurisdiction, can be sanctioned as member of the Philippine Bar for the same infraction committed in the foreign jurisdiction. We take the issue in Atty. Maquera one notch higher in the case of Atty. de Vera who was admitted to the practice of law in a foreign jurisdiction (State Bar of California, U.S.A.) and against whom charges were filed in connection with his practice in said jurisdiction. However, unlike the case of Atty. Maquera, no final judgment for suspension or disbarment was meted against Atty. de Vera despite a recommendation of suspension of three years as he surrendered his license to practice law before his case could be taken up by the Supreme Court of California. In Maquera , we emphasized that the judgment of suspension against a Filipino lawyer in a foreign jurisdiction does not automatically result in his suspension or disbarment in the Philippines as the acts giving rise to his suspension are not grounds for disbarment and suspension in this jurisdiction. Judgment of suspension against a Filipino lawyer may transmute into a similar judgment of suspension in the Philippines only if the basis of the foreign court's action includes any of the grounds for disbarment or suspension in this jurisdiction. We likewise held that the judgment of the foreign court merely constitutes prima facie evidence of unethical acts as lawyer. The Maquera ruling is consistent with Rule 39, Section 48, of the Rules of Court which provides: Sec. 48. Effect of foreign judgments or final orders. - The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows: xxxx (b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. In either case, the judgment or final order 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 herein case, considering that there is technically no foreign judgment to speak of, the recommendation by the hearing officer of the State Bar of California does not constitute prima facie evidence of unethical behavior by Atty. de Vera. Complainant must prove by substantial evidence the facts upon which the recommendation by the hearing officer was based. If he is successful in this, he must then prove that these acts are likewise unethical under Philippine law. There is substantial evidence of malpractice on the part of Atty. de Vera independent of the recommendation of suspension by the hearing officer of the State Bar of California
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 In herein case, as it is admitted by Atty. de Vera himself that he used his client's money for personal use, he has unwittingly sealed his own fate since this admission constitutes more than substantial evidence of malpractice. Consequently, Atty. de Vera now has the burden of rebutting the evidence which he himself supplied.
— oOo — PRISCILLA C. MIJARES, LORETTA ANN P. ROSALES, HILDA B. NARCISO, SR. MARIANI DIMARANAN, SFIC, and JOEL C. LAMANGAN in their behalf and on behalf of the Class Plaintiffs in Class Action No. MDL 840, United States District Court of Hawaii, Petitioner, v. HON. SANTIAGO JAVIER RANADA, in his capacity as Presiding Judge of Branch 137, Regional Trial Court, Makati City, and the ESTATE OF FERDINAND E. MARCOS, through its court appointed legal representatives in Class Action MDL 840, United States District Court of Hawaii, namely: Imelda R. Marcos and Ferdinand Marcos, Jr., Respondents. [April 12, 2005] “The rules of comity, utility and convenience of nations have established a usage among civil ized states by which final judgm ents of foreign courts of competent jurisdiction are reciprocally respected and rendered efficacious under certain conditions that may vary in different countries.”
FACTS:
TINGA, J .: On 9 May 1991, a complaint was filed with the United States District Court (US District Court), District of Hawaii, against the Estate of former Philippine President Ferdinand E. Marcos (Marcos Estate). The action was brought forth by ten Filipino citizens who each alleged having suffered human rights abuses such as arbitrary detention, torture and rape in the hands of police or military forces during the Marcos regime. The Alien Tort Act was invoked as basis for the US District Court's jurisdiction over the complaint, as it involved a suit by aliens for tortious violations of international law. These plaintiffs brought the action on their own behalf and on behalf of a class of similarly situated individuals, particularly consisting of all current civilian citizens of the Philippines, their heirs and beneficiaries, who between 1972 and 1987 were tortured, summarily executed or had disappeared while in the custody of military or paramilitary groups. Plaintiffs alleged that the class consisted of approximately ten thousand (10,000) members; hence, joinder of all these persons was impracticable. Trial ensued, and subsequently a jury rendered a verdict and an award of compensatory and exemplary damages in favor of the plaintiff class. Then, on 3 February 1995, the US District Court, presided by Judge Manuel L. Real, rendered a Final Judgment (Final Judgment) awarding the plaintiff class a total of One Billion Nine Hundred Sixty Four Million Five Thousand Eight Hundred Fifty Nine Dollars and Ninety Cents ($1,964,005,859.90). The Final Judgment was eventually affirmed by the US Court of Appeals for the Ninth Circuit, in a decision rendered on 17 December 1996.6 On 20 May 1997, the present petitioners filed Complaint with the Regional Trial Court, City of Makati (Makati RTC) for the enforcement of the Final Judgment . On 5 February 1998, the Marcos Estate filed a motion to dismiss, raising, among others, the non-payment of the correct filing fees. It alleged that petitioners had only paid Four Hundred Ten Pesos (P410.00) as docket and filing fees, notwithstanding the fact that they sought to enforce a monetary amount of damages in the amount of over Two and a Quarter Billion US Dollars (US$2.25 Billion). In response, the petitioners claimed that an action for the enforcement of a foreign judgment is not capable of pecuniary estimation; hence, a filing fee of only Four Hundred Ten Pesos (P410.00) was proper, pursuant to Section 7(c) of Rule 141.9 On 9 September 1998, respondent Judge Santiago Javier Ranada of the Makati RTC issued the subject Order dismissing the complaint without prejudice. Respondent judge opined that contrary to the petitioners' submission, the subject matter of the complaint was indeed capable of pecuniary estimation, as it involved a judgment rendered by a foreign court ordering the payment of definite sums of money, allowing for easy determination of the value of the foreign judgment. The Commission on Human Rights (CHR) was permitted to intervene in this case. It urged that the petition be granted and a judgment rendered, ordering the enforcement and execution of the District Court judgment in accordance with Section 48, Rule 39 of the 1997 Rules of Civil Procedure. For the CHR, the Makati RTC erred in interpreting the action for the execution of a foreign judgment as a new case, in violation of the principle that once UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 a case has been decided between the same parties in one country on the same issue with finality, it can no longer be relitigated again in another country. The CHR likewise invokes the principle of comity, and of vested rights. ISSUE:
Whether or not there is a need to pay docket fees in the amount of the foreign judgement award that is sought to be enforced in Philippine courts. HELD:
An examination of Rule 141 of the Rules of Court readily evinces that the respondent judge ignored the clear letter of the law when he concluded that the filing fee be computed based on the total sum claimed or the stated value of the property in litigation. 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. The provision states: SEC. 7. Clerk of Regional Trial Court.(a) For filing an action or a permissive counterclaim or money claim against an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc., complaint, or a complaint in intervention, and for all clerical services in the same time, if the total sum claimed, exclusive of interest, or the started value of the property in litigation, is: 1. Less than P 100,00.00
–
P 500.00
2. P 100,000.00 or more but less than P 150,000.00
–
P 800.00
3. P 150,000.00 or more but less than P 200,000.00
–
P 1,000.00
4. P 200,000.00 or more but less than P 250,000.00
–
P 1,500.00
5. P 250,000.00 or more but less than P 300,00.00
–
P 1,750.00
6. P 300,000.00 or more but not more than P 400,000.00
–
P 2,000.00
7. P 350,000.00 or more but not more than P400,000.00
–
P 2,250.00
8. For each P 1,000.00 in excess of P 400,000.00
–
P 10.00
(Emphasis supplied) Obviously, the above-quoted provision covers, on one hand, ordinary actions, permissive counterclaims, thirdparty, etc. complaints and complaints-in-interventions, and on the other, money claims against estates which are not based on judgment. Thus, the relevant question for purposes of the present petition is whether the action filed with the lower court is a "money claim against an estate not based on judgment." Petitioners' complaint may have been lodged against an estate, but it is clearly based on a judgment, the Final Judgment of the US District Court. The provision does not make any distinction between a local judgment and a foreign judgment, and where the law does not distinguish, we shall not distinguish. 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. This principle was prominently affirmed in the leading American case of Hilton v. Guyot and expressly recognized in our jurisprudence beginning with Ingenholl v. Walter E. Olsen & Co. The conditions required by the Philippines for recognition and enforcement of a foreign judgment were originally contained in Section 311 of the Code of Civil Procedure, which was taken from the California Code of Civil Procedure which, in turn, was derived from the California Act of March 11, 1872. Remarkably, the procedural
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013 rule now outlined in Section 48, Rule 39 of the Rules of Civil Procedure has remained unchanged down to the last word in nearly a century. Section 48 states: SEC. 48. 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; In either case, the judgment or final order 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. 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. Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity. The rules are silent as to what initiatory procedure must be undertaken in order to enforce a foreign judgment in the Philippines. But there is no question that the filing of a civil complaint is an appropriate measure for such purpose There is another consideration of supreme relevance in this case, o ne which should disabuse the notion that the doctrine affirmed in this decision is grounded solely on the letter of the procedural rule. We earlier adverted to the the internationally recognized policy of preclusion, as well as the principles of comity, utility and convenience of nations as the basis for the evolution of the rule calling for the recognition and enforcement of foreign judgments. The US Supreme Court in Hilton v. Guyot relied heavily on the concept of comity, as especially derived from the landmark treatise of Justice Story in his Commentaries on the Conflict of Laws of 1834. Yet the notion of "comity" has since been criticized as one "of dim contours" or suffering from a number of fallacies. Other conceptual bases for the recognition of foreign judgments have evolved such as the vested rights theory or the modern doctrine of obligation. Salonga, whose treatise on private international law is of worldwide renown, points out: Whatever be the theory as to the basis for recognizing foreign judgments, there can be little dispute that the end is to protect the reasonable expectations and demands of the parties. Where the parties have submitted a matter for adjudication in the court of one state, and proceedings there are not tainted with irregularity, they may fairly be expected to submit, within the state or elsewhere, to the enforcement of the judgment issued by the court.58 The classical formulation in international law sees those customary rules accepted as binding r esult from the combination two elements: the established, widespread, and consistent practice on the part of States; and a psychological element known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief that the practice in question is rendered obligatory by the existence of a rule of law requiring it. One more word. It bears noting that Section 48, Rule 39 acknowledges that the Final Judgment is not conclusive yet, but presumptive evidence of a right of the petitioners against the Marcos Estate. Moreover, the Marcos Estate is not precluded to present evidence, if any, of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. This ruling, decisive as it is on the question of filing fees and no other, does not render verdict on the enforceability of the Final Judgment before the courts under the jurisdiction of the Philippines, or for that matter any other issue which may legitimately be presented before the trial court. Such issues are to be litigated before the trial court, but within the confines of the matters for proof as laid down in Section 48, Rule 39. On the other hand, the speedy resolution of this claim by the trial court is encouraged, and contumacious delay of the decision on the merits will not be brooked by this Court.
— oOo — UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013
KOREA TECHNOLOGIES CO., LTD., Petitioner, v. HON.ALBERTO A. LERMA, in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION,Respondents. “ An arbitration clause, stipulating that the arbitral award is final and binding, does not oust our courts of jurisdiction as the international arbitral award, the award of which is not absolute and without exceptions, is still judicially reviewable under certain conditions.”
FACTS:
VELASCO JR., J.:
Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation. On March 5, 1997, PGSMC and KOGIES executed a Contract whereby Contract whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The contract was executed in the Philippines. The contract and its amendment stipulated that KOGIES will ship the machinery and facilities necessary for manufacturing LPG cylinders for which PGSMC would pay USD 1,224,000. KOGIES would install and initiate the operation of the plant for which PG SMC bound itself to pay USD 306,000 upon the plant‘s production of the 11 -kg. LPG cylinder samples. Thus, the total contract price amounted to USD 1,530,000. Subsequently, the machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. PGSMC paid KOGIES USD 1,224,000. For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks. When KOGIES deposited the checks, these were dishonored for the reason ―PAYMENT
STOPPED.‖ On July 3, 1998, KOGIES filed a Complaint for Specific Performance, docketed as Civil Case No. 98-117 [8] against PGSMC before the Muntinlupa City Regional Trial Court (RTC). The RTC granted a temporary restraining order (TRO) on July 4, 1998, which was subsequently extended until July Jul y 22, 1998. In its complaint, KOGIES alleged that PGSMC had initially admitted that the checks ch ecks that were stopped were not no t funded but later on claimed that it no t received‖ as the former allegedly breached stopped payment of the checks for the reason that ―their value was not
their contract by ―altering the quantity and lowering the quality of the machinery and equipment‖ installed in stalled in the plant and failed to make the plant operational although it earlier certified to the contrary as shown in a January 22, 1998 Certificate. Likewise, KOGIES averred that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration.
On July 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO since Art. 15, the arbitration clause, was null and void for being against public policy as it ousts the local courts of jurisdiction over the instant controversy. RTC held that Art. 15 of the Contract as amended was invalid as it tended to oust the trial court or any other court
jurisdiction over any dispute that may arise between the parties. KOGIES‘ prayer for an injunctive in junctive writ was denied.
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013
KOGIES points out that the arbitration clause under Art. 15 of the Contract as amended was a valid arbitration stipulation under Art. 2044 of the Civil Code and as held by this Court in Chung Fu Industries (Phils.), Inc.
On the issue of the validity of the arbitration clause, the CA agreed with the lower court that an arbitration clause which provided for a final determination of the legal rights of the parties to the contract by arbitration was against public policy.
ISSUE:
Whether or not an arbitration clause, directing dir ecting arbitration in a foreign country, is against public policy as it ousts the Courts of its jurisdiction
HELD:
We now go to the core issue of the validity of Art. 15 of the Contract, the arbitration clause. It provides:
— All disputes, controversies, or differences which may arise between the parties, out of or i n Article 15. Arbitration. — relation to or in connection with this Contract or for the breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award rendered by the arbitration(s) shall be final and binding upon both parties concerned. Petitioner claims the RTC and the CA erred in ruling that the arbitration clause is null and void. Petitioner is correct. Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus . The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and
binding effect of an arbitral award. Art. 2044 provides, ― Any stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040.‖ The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been shown to be contrary to any law, or against morals, good customs, public order, or public policy. There has been no showing that the parties have not dealt with each other on equal footing. We find no reason why the arbitration clause should not be respected and complied with by both parties
Arbitration clause not contrary to public policy
Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration. Having said that the instant arbitration clause is not against public policy, we come to the question on what governs an arbitration clause specifying that in case of any dispute arising from the contract, an arbitral panel will be constituted in a foreign country and the arbitration rules of the foreign country would govern and its award shall be final and binding.
UNIVERSITY OF SANTO TOMAS
CONFLICT OF LAWS 2012-2013
RA 9285 incorporated the UNCITRAL Model law to which we are a signatory
For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004 entitled An Act to Institutionalize the Use of an Alternative Dispute Dispute Resolution System in the Philippines and to Establish the Office for Alternative Alt ernative Dispute Resolution, and for Other Purposes.
While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law which has a retroactive effect. Likewise, KOGIES filed its application for arbitration before the KCAB on July 1, 1998 and it is still pending because no arbitral award has yet been rendered. Thus, RA 9285 is applicable to the instant case. Well-settled is the rule that procedural laws are construed to be appl icable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that sense and to that extent. As a general rule, the retroactive application of procedural laws does not violate any personal rights because no vested right has yet attached nor arisen from them. Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following: (1) The RTC must refer to arbitration in proper cases
Under Sec. 24, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause, and mandates the referral to arbitration in such cases.
(2) Foreign arbitral awards awar ds must be confirmed by the RTC
Foreign arbitral awards while mutually stipulated by the parties in the arbitration clause to be final and binding are not immediately enforceable or cannot be implemented immediately.
The recognition and enforcement of such arbitral awards shall be filed with the Regional Trial Court in accordance with the rules of procedure to be promulgated by the Supreme Court. The applicant shall establish that the country in which foreign arbitration award was made in party to the New York Convention. (3) The RTC has jurisdiction to review foreign arbitral awards a wards
Thus, while the RTC does not have jurisdiction over disputes governed by arbi tration mutually agreed upon by the parties, still the foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or vacate it. In this sense, what this Court held in Chung Fu Industries (Phils.), Inc. relied upon by KOGIES is applicable insofar as the foreign arbitral awards, while final and binding, do not oust courts of jurisdiction since these arbitral awards are not absolute and without exceptions exception s as they are still judicially judici ally reviewable. Chapter 7 of RA 9285 has made it clear that all arbitral awards, whether domestic or foreign, are subject to judicial review on specific grounds provided for. (4) Grounds for judicial review different in domestic and foreign arbitral aw ards UNIVERSITY OF SANTO TOMAS
