FUNDAMENTALS OF PUBLIC AND PRIVATE INTERNATIONAL LAW
By: Edzyl Josef G. Magante II.
Private International Law
A.
Jurisdiction
The court has to determine first whether it has jurisdiction over the case.1 If it has no jurisdiction, the case should be dismissed on that ground.2 If it has jurisdiction, the court will determine whether it should assume jurisdiction over the case or dismiss it on the ground of 3 forum non conveniens. It is the law of the forum that determines whether the court has jurisdiction over the case.4 Once the court has determined whether it has jurisdiction over the case, it will next determine whether to apply the internal law of the forum or the proper foreign law, considering the attendant circumstances.5 Doctrine of
F oru m Non Conveni Conveni ens
Even if the court assumes jurisdiction over the parties and the subject matter, it may decline to try the case on the ground that there is another available and more appropriate forum in which the ends of justice would be better served in view of the interests of all parties, by eliminating the vexatious or oppressive character of the pending proceedings and by removing any unfairness to either party which would result from trial in the forum seized of the case.6 American courts have also applied the doctrine in order to prevent abuse of the court’s process, i.e., when plaintiff made the choice of the forum primarily to harass defendant by pursuing the remedy, or where a non-resident plaintiff p laintiff chose the forum because he felt that jury verdicts were larger there than in another forum. 7 Another reason for the rule is to avoid global forum shopping, which is the filing of repetitious suits in courts of different jurisdiction. 8
Assume Jurisdiction
The presence of any one of the following factors would justify the application of internal law:
1 2 3
4 5 6
7 8
ALICIA SEMPIO-DIY, HANDBOOK ON CONFLICT OF LAWS 4 (2004). Id. Id.; JORGE COQUIA & ELIZABETH AGUILING-PANGALANGAN, CONFLICT OF LAWS: CASES, MATERIALS AND COMMENTS 39 (2000). SEMPIO-DIY, supra note 98, at 4. Id.; COQUIA & AGUILING-PANGALANGAN, supra note 100, at 51. COQUIA & AGUILING-PANGALANGAN, supra note 100, at 40-41, quoting Joseph Dainov, The Inappropriate EV. 867 (1934). Forum, 29 ILL.L.R EV Id. at 40. Id. at 41. 1
1. a specific law of the forum decrees that internal law should apply; 2. the proper foreign law was not properly pleaded and proved; or 3. the case falls under any of o f the exceptions to the application of foreign law.9 Notably, forum law is also applied when there th ere is failure to plead and prove prov e the pertinent 10 law because it leads to the presumption that it is the same as forum law. Forum law should also be applied if the case falls under the exceptions to the application of the foreign law. They are: 1. 2. 3. 4. 5.
when the foreign law is contrary to an important public policy of the forum; when the foreign law is penal in nature; when the foreign law is procedural in nature; when the foreign law is purely fiscal or administrative; ad ministrative; when the application of foreign law will work undeniable injustice to the citizens of the forum; 6. when the case involves real or personal property situated in the forum; 7. when the application of the foreign law might endanger the vital interest of the state; and 8. when the foreign law is contrary to good morals.11 Doctrine of
L ex L oci oci Contractus
As a general rule, the law of the place where a contract is made or entered into governs with respect to its nature and validity, as well as obligation and interpretation. This has been said to be the rule even though the place where the contract was made is different from the place where it is to be performed, and particularly so if the place of the making and the place of performance are the same. Hence, the court should apply the law of the place where the airline ticket was issued, when the passengers are residents and nationals of the forum and the ticket is issued in such state by the defendant airline.
Jurisdiction over the person
Jurisdiction over the person is acquired by the voluntary appearance of a party and his submission to authority.12 The court also acquires jurisdiction over the person of the plaintiff the moment he invokes the aid of the court by filing a suit.13 Jurisdiction over the defendant may be had by personal service or substituted service of summons.14 Jurisdiction over subject matter
9 10 11 12 13 14
Id. at 51-52. Id. at 52. Id. at 57. Id. at 21. Id. See R ULES ULES OF COURT, Rule 14, secs. 6-7. 2
Jurisdiction over the subject matter is more than the general power conferred by law to take cognizance of cases of a general class to which the case belongs. It is not enough that a court has power in abstract to try and decide that class of litigation to which a case belongs; it is necessary that said power be properly invoked by filing a petition.15 It cannot be conferred by the consent of the parties and a decision may be set aside where the court exceeds its jurisdiction. 16 Jurisdiction over the res or property
Jurisdiction over the property which is the subject matter of litigation results either from the seizure of the property under legal process or from the institution of legal proceedings wherein the court’s power over the proper ty is recognized and made effective.17 Cases:
Carnival Cruise Lines v. Schute, 499 U.S. 585 (1991)
Facts: After the spouses Schute (Washington) purchased passage for a 7-day cruise on the ship Tropicale owned by Carnival Cruise (Florida-based line) thru an agent, Carnival Cruise sent them tickets containing a forum selection clause designating courts in Florida as the agreed-upon fora. Mrs. Shute suffered injuries when she slipped on a deck mat during a guided tour of the ship’s gallery. The Shutes filed suit in Washington. Is the stipulation limiting the fora to Florida courts valid? Was the case improperly filed in Washington as it was within the jurisdiction of Florida courts? Held: YES, the appellate court erred in refusing to enforce the forum selection clause. Since the facts in the case of Bremen are different from the facts of this case, Bremen is inapplicable to negate the application of the forum selection clause in the case at bar. The statement ―the serious inconvenience of the contractual forum to one or both of the parties might carry great weight in determining the reasonableness of the forum clause‖ was made in the context of a hypothetical ―agreement between two Americans to resolve their essentially local disputes in a remote alien forum.‖ Here, in contrast, Florida is not such a forum, nor – given the location of Mrs. Shute’s accident – is this dispute an essentially local one inherently more suited to resolution in Washington than in Florida. In the light of these distinctions, and because the Shutes do not claim lack of notice of the forum clause, nor was there any finding by the Washington court that the Shutes were financially incapable of pursuing litigation in Florida. They have not satisfied the heavy burden of proof required to set aside the clause on grounds of inconvenience. Although forum selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness, there is no indication that Carnival Cruise Lines selected Florida to discourage cruise passengers from pursuing legitimate claims or obtained the Shutes’ accession to the forum clause by fraud or overreaching. Burger King v. Rudzewicz, 471 U.S. 462 (1985)
Facts: Rudzevicz (Michigan) entered into a twenty-year franchise contract with Burger King [―BK‖] (Florida) to operate a restaurant in Michigan. The contract provides that the f ranchise relationship is established in Miami and governed by Florida law. It calls for payment of a $40,000 franchise fee and all required monthly royalties and fees; forwarding of all relevant 15 16 17
Caluag v. Pecson, 82 Phil. 8 (1948). COQUIA & AGUILING-PANGALANGAN, supra note100, at 37, citing Caluag v. Pecson, 82 Phil. at 8. Id. at 23, citing Banco Espanol-Filipino v. Palanca, 37 Phil. 921 (1918). 3
notices to the Miami headquarters. The Miami headquarters set policies and work directly with the franchisees in attempting to resolve major problems. Day-to-day monitoring of franchises, however, is conducted through district offices that in turn report to Miami headquarters. Subsequently, when the restaurant’s patronage declined, the franchisees fell behind their monthly payments. Headquarters terminated the franchise and ordered the franchisees to vacate the premises. They refused and continued to operate the restaurant. BK then brought a diversity action in Florida. Franchisees claimed that because they were Michigan residents and because BK’s claim did not ―arise‖ within Florida, the district court lacked personal jurisdiction over them. Held: Florida court has jurisdiction. A forum may assert specific jurisdiction over a nonresident defendant where an alleged injury arises out of or relates to actions by the defendant himself that are purposefully directed toward forum residents and where jurisdiction would not otherwise offend ―fair play and substantial justice‖. Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum. So long as a commercial actor’s efforts are ―purposefully directed‖ toward residents of another state, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there. The Bremen v. Zapata Offshore Co., 407 U.S. 1 (1972)
Facts: Unterweser (German) entered into an agreement to tow Zapata’s (US) drilling rig from Louisiana to Italy. The contract contained a forum-selection clause providing for the litigation of any dispute in the High Court of Justice in London. The contract was executed by Zapata at Houston and was sent and accepted by Unterweser in Germany. When the rig under tow was damaged in a storm, Zapata instructed Unterweser to tow the rig to Tampa, the nearest port of refuge. There, Zapata brought suit in admiralty against Bremen. Unterweser invoked the forum clause in moving for dismissal for want of jurisdiction and brought suit in an English court, which ruled it had jurisdiction under the contractual forum provision. Held: London court has jurisdiction. Forum selection clauses are prima facie VALID and should be enforced, unless enforcement is shown by the resisting party to be ―unreasonable‖ under the circumstances. The threshold question is whether that court should have exercised its jurisdiction to do more than give effect to the legitimate expectations of the parties, manifested in their freely negotiated agreement, by specifically enforcing the forum clause. Forum selection is valid UNLESS it (1) contravenes a strong public policy of the forum and (2) is seriously inconvenient for the trial of the action. The forum selection clause, which was a vital part of the towing contract, is BINDING on the parties, unless Zapata off-shore can meet the heavy burden of showing that its enforcement would be unreasonable, unfair, or unjust. Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981)
Facts: A small commercial aircraft crashed in Scotland. 5 passengers died, they were all Scottish. The aircraft was manufactured by Piper (US). Reyno, representative of the heirs, instituted an action in the US. Reyno sought to recover from Piper Aircraft on the basis of negligence or strict liability (NOT recognized by Scottish law), and admitted that the action was filed in the US because its laws regarding liability, capacity to sue, and damages are more favorable to Reyno’s/heirs’ position than those of Scotland. Held: The Scottish court has jurisdiction. Reyno may not defeat a motion to dismiss on the 4
ground of forum non conveniens merely by showing that the substantive law that would be applied in the alternative forum is less favorable to them than that of the chosen forum. The possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry. But if the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory, that is no remedy at all, the unfavorable change in law may be given substantial weight; the district court may conclude that dismissal would not be in the interests of justice. Scottish laws do not deprive the heirs of any remedy. The District Court properly decided that the presumption in favor of the plaintiff’s forum choice applied with less than maximum force when the plaintiffs are foreign. When the plaintiff has chosen the home forum, it is reasonable to assume that the choice is convenient; but when the plaintiffs are foreign this assumption is much less reasonable and the plaintiff’s choice deserves less deference. National Rental v. Szukhent, 375 U.S. 311 (1964)
Facts: National Rental (New York) sued Szukhent, et al . (Michigan) in a federal court in New York, claiming that Szukhent had defaulted in payments due under a farm equipment lease. The last paragraph of the lease provided that ―the lessee hereby designates Florence Weinberg as agent for the purpose of accepting service of any process within the state of New York‖. Szukhent, et al. were NOT acquainted with Florence and she had not expressly undertaken to transmit notice to them. The Marshall delivered two copies of the summons and complaint to Florence. That same day, she mailed the summons and complaint to Szukhent, together with a letter stating that the documents had been served upon her as Szukhent’s agent for the purpose of accepting service of process in New York, in accordance with the agreement contained in the lease. Held: The service of processes was validly made, thereby vesting jurisdiction in the New York court. Parties to a contract may agree in advance to submit to the jurisdiction of a given court, to permit notice to be served by the opposing party, or even to waive notice altogether. The purpose underlying the contractual provision is to assure that any litigation under the lease should be conducted in the state of New York. Weinberg’s prompt acceptance and transmittal to Szukhent of the summons and complaint pursuant to the authorization was itself sufficient to validate the agency, even though there was no explicit previous promise on her part to do so. The fact that the designated agent was not personally known to Szukhent at the time of her appointment, and that she may be related to an officer of National Rental, did not invalidate the agency. United Airlines v. Court of Appeals, 357 SCRA 99 (2001)
Facts: The Fontanillas bought tickets from United Airlines through its agent in Manila. When in Washington, they rewrote their tickets. They were bumped off their flight and three caucasians were allowed to board instead of them. They were also rudely insulted by an employee of United Airlines so they sued for damages. Which law applies: US Code of Federal Regulation or Philippine law?
Held: The Court of Appeals erred in applying the US Code of Federal Regulation. Philippine law applies. Although the contract of carriage was to be performed in the United States, the tickets were purchased thru United Airlines’ agent in Manila. 5
Pakistan International Airlines v. Ople, 190 SCRA 90 (1990)
Facts: Pakistan International Airways [―PIA‖] (Pakistan and is licensed to do business under Philippine laws) hired 2 Filipino flight attendants. The contract of employment was entered into in the Philippines and their base station was in the Philippines. The contract stipulated that laws of Pakistan would apply and Pakistani courts have jurisdiction. When PIA terminated their contracts, the flight attendants filed an action for illegal dismissal in the Philippines. Which laws apply, Pakistani or Philippine?
Held: Philippine laws apply. Parties may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest. 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". 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. Cadalin v. POEA, 238 SCRA 721 (1994)
Facts: Brown and Root International Inc. (BRII) (Texas) employed Filipino OCWs through its recruiting agent in the Philippines to work in the Middle East. The Contract stipulated that the employees were entitled to benefits under Bahrain law which provides for a prescriptive period of merely 1 year. They filed an action in the Philippines. Which law will apply, Labor Code or Bahrain Law?
Held: As a general rule, a foreign procedural law will not be applied in the forum. A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may 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 p ending claims based on a foreign law. Sec 48 of the Rules of Civil Procedure provide: 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 Philippines Islands. However, since their prescriptive period was unconstitutional and against the public policy of protecting labor, the Labor Code will be applied. Sweet Lines v. Teves, 83 SCRA 361 (1978)
Facts: Attys. Tandog and Tiro bought two tickets from the main office of Sweet Lines. They were to board M/S Sweet Hope bound for Tagbilaran. Upon learning that the vessel was not proceeding to Bohol, Attys. Tandog and Tiro went to the branch office for proper relocation to M/S Sweet Town. Because the said vessel was already filled to capacity, they were forced to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard. They sued Sweet Lines in the Court of First Instance of Misamis Oriental for breach of contract of carriage. Sweet Lines moved to dismiss the complaint on the ground of improper venue. The motion was premised on the condition printed at the back of the tickets that actions arising from 6
the provisions of this ticket shall be filed in the competent courts in the City of Cebu. Is the condition valid and enforceable?
Held: NO, venue was proper. The condition is VOID. Reasons: (1) under circumstances obtaining in the inter-island shipping industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets printed in fine letters, and (2) the condition subverts the public policy on transfer of venue since the same will prejudice rights and interests of innumerable passengers in different parts of the countr y. The Court may declare the agreement as to venue to be in effect contrary to public policy despite that, in general, changes and transfers of venue by written agreement of the parties are allowable — whenever it is shown that a stipulation as to venue works injustice by practically denying to the party concerned the remedy provided by the rules. Hongkong and Shanghai Banking Corp. (HSBC) v. Sherman, 176 SCRA 331 (1989)
Facts: Eastern Book & Supply Service (Singapore) was granted by HSBC Singapore an overdraft facility. Sherman, et. al. and directors of Eastern Book executed a Joint and Several Guarantee in favor of HSBC. Eastern Book defaulted. Hence, HSBC filed a suit for collection against them before the Regional Trial Court of Quezon City. Sherman filed a Motion to Dismiss on the ground of lack of jurisdiction over the complaint and persons of the defendants. The guarantee provides: ―This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore‖. Held: Philippine courts have jurisdiction over the suit. The stipulation shall be liberally construed. A stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or defendant under Sec 2 (b), Rule 4 of the Rules of Court, in the absence of qualifying or restrictive words in the agreement which indicate that the place named is the only venue agreed upon by the parties. The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, have jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the right of a state to exercise authority over persons and things within its boundaries subject to certain exceptions. This authority, which finds its source in the concept of sovereignty, is exclusive within and throughout the domain of the state. A state is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them. International Shoe Co. v. Washington, 326 U.S. 310 (1945)
Facts: International Shoe is a Delaware Corporation with principal office in Missouri. International Shoe has no sales outlets or offices in Washington but its salesmen reside and solicit orders in Washington. Only display rooms are in Washington and sales are made in places other than Washington. A suit for tax liability is filed in Washington against International Shoe. Held: The Washington court has jurisdiction over International Shoe. Regular and systematic solicitation of orders in Washington was sufficient to constitute doing business in Washington so as to make International Shoe amenable to suits in its courts. There were sufficient additional activities which constitute doing business such as display of samples in permanent display rooms and continuous maintenance of salesmen residence in Washington. 7
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 should have certain minimum contacts with it su ch that the maintenance of the suit does not offend the ―traditional notions of fair play and substantial justice‖. The corporation’s presence can be manifested only by activities carried on in its behalf by those who are authorized to act for it. Thus, service of summons on the salesmen and service by registered mail at its home office are sufficient to bind International Shoe. Perkins v. Benguet Consolidated Mining, 93 Phil. 1034 (1954)
Facts: Perkins filed an action for recovery of dividends due her as a stockholder of Benguet Consolidated Mining (―BCM‖). BCM has been carrying on in Ohio a continuous and systematic but limited part of its general business. Its president, while engaged in doing such business in Ohio, has been served with summons in this proceeding. The cause of action did not arise in Ohio and does not relate to the corporation’s activities there. Thus, the trial court sustained a motion to quash service of summons on BCM. Held: Ohio court has jurisdiction. The service of summons is valid. If an authorized representative of a foreign corporation is physically present in the state of forum and be there engaged in activities appropriate to accepting service or receiving notice on its behalf, there is no unfairness in subjecting the corporation to the jurisdiction of courts of that state through such service of process upon the representative. This has been squarely held to be so in a proceeding in personam against such a corporation, at least in relation to a cause of action arising out of the corporation’s activities within the state of the forum. The amount and kind of activities, however, which must be carried on by the foreign corporation in the state of the forum so as to make it reasonable and just to subject the corporation to the jurisdiction of that state are to be determined in each case. Philsec Investment Corp. v. Court of Appeals, 274 SCRA 102 (1997)
Facts: Ducat obtained loans from Ayala International Finance and Philsec secured by shares of stock. 1488 Inc. assumed Ducat’s obligation. 1488 sold to Athona Holdings a parcel of land in Harris County, Texas while Philsec and Ayala extended a loan to Athona to finance payment of the purchase price. Thus, Ducat was released from the obligation. As Athona failed to pay the balance of the purchase price, the entire debt became due and demandable. 1488 sued Philsec, Ayala and Athona in the US for payment of the balance plus damages. While the case was pending, Philsec filed a complaint against Ducat, et al. in the Regional Trial Court of Makati. Ducat filed a motion to dismiss on the ground of litis pendentia and forum non conveniens. The trial court granted Ducat’s motion even as it n oted that Ducat was not a party in the US case. Held: The dismissal of the case was improper. The case was arbitrarily dismissed. While this court has given the effect of res judicata to foreign judgments in several cases, it was after the parties opposed to the judgment had been given ample opportunity to repel them on grounds allowed under the law. Neither the trial court nor the appellate court was even furnished copies of the pleadings in the US Court or apprised of the evidence presented thereat, to assure a proper determination of whether the issues then being litigated in the US court were exactly the issues raised in this case such that the judgment that might be rendered would constitute res judicata. The trial court arbitrarily dismissed the case even after finding that Ducat was not a party in the US case. 8
World Wide Volkswagen v. Woodson, 444 U.S. 286 (1980)
Facts: The Robinsons (New York [―NY‖]) purchased a new Audi automobile from Seaway Volkswagen (NY). The following year the Robinson family, who resided in NY, left that State for a new home in Arizona. As they passed through the State of Oklahoma, another car struck their Audi in the rear, causing a fire which severely burned Kay and her 2 kids. Thus, the Robinsons brought a products liability action against the retailer Seaway Volkswagen and its wholesale distributor Worldwide Volkswagen (NY), among others, in an Oklahoma court. Held: Oklahoma court does not have jurisdiction. The only connection to Oklahoma is that the accident occurred there. Consistently with the Due Process Clause, the Oklahoma trial court may NOT exercise in personam jurisdiction over Seaway and WW Volkswagen. Oklahoma court’s exercise of in personam jurisdiction, under the Long-Arm Statute, over the NY auto retailer and wholesale distributor for products liability action arising from an automobile accident in Oklahoma, is violative of due process. 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. There are no such contacts here. 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 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. 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. Calder v. Jones, 465 U.S. 783 (1984)
Facts: Jones (California) brought suit in California, claiming that she had been libeled in an article written and edited by Calder and South in Florida, and published in the National Enquirer, a national magazine having its largest circulation in California. Calder and South, both residents of Florida, were served with process by mail in Florida and, on special appearances, moved to quash the service of process for lack of personal jurisdiction. Held: California court has jurisdiction. Jurisdiction over Calder and South in California is proper because of their intentional conduct in Florida allegedly calculated to cause injury to Jones in California. The Due Process Clause permits personal jurisdiction over a defendant in any state with which the defendant has certain minimum contacts such that the maintenance of the suit does not offend ―traditional notions of fair play and substantial justice‖. In judging minimum contracts, a court properly focuses on the relationship among the defendant, the forum, and the litigation. The plaintiff’s lack of contacts will not defeat otherwise proper jurisdiction, but the plaintiff’s contacts may be so manifold as to permit jurisdiction when it would not exist in their absence. Here, California is the focal point of both the allegedly libelous article and of the harm suffered. Jurisdiction over Calder and South is therefore proper in California based on the ―effects‖ of their Florida conduct in California. Calder and South are not charged with mere untargeted negligence, but rather their intentional, and allegedly tortuous, actions expressly aimed at California. They wrote and edited an article that they knew would have a potentially devastating impact upon Jones, and they knew that the brunt of that injury would be felt by Jones in the state in which she lives and works, and in which the magazine has its largest circulation. Under these circumstances, Calder and South must ―reasonably anticipate being haled into court 9
there‖ to answer for the truth of the statements made in the article. Compuserve v. Patterson, 89 F.3d 1257 (6th Cir. 1996)
Facts: Patterson (Texas) entered into contracts with Compuserve (Ohio) wherein he would use its services to sell his software programs to others. These contracts provide that they are entered into in Ohio and would be governed by Ohio laws. Compuserve started coming out with its own programs which were like those of Patterson. Patterson demanded at least $100,000 to settle. Compuserve filed a declaratory judgment action in Ohio. Held: Ohio has jurisdiction. To determine whether personal jurisdiction exists over a defendant, federal courts apply the law of the forum state, subject to the limits of the Due Process Clause. The Ohio long-arm statute allows an Ohio court to exercise personal jurisdiction over nonresidents of Ohio on claims arising from the non-residents transacting any business in Ohio. Also, the following requisites were present: 1.) Purposeful availment (physical presence not necessary. He entered into a contract with Compuserve and injected his software product into the stream of commerce – these together are enough); 2.) Claim arises out of forum-related activities; and 3.) Reasonableness: whether exercise of personal jurisdiction would comport with the traditional notions of fair play and substantial justice. A court must consider several factors including: 1.) 2.) 3.) 4.)
the burden of the defendant; the interest of the forum state; the plaintiff’s interest in obtaining relief; and the interest of other states in securing the most efficient resolution of controversies.
Although burdensome for Patterson to defend a suit in Ohio, he knowingly made an effort – and in fact, purposefully contracted – to market a product in other states, with Ohio based Compuserve operating, in effect, as his distribution center. Thus, it is reasonable to subject Patterson to suit in Ohio, the State which is home to the computer network service he chose to employ. Rush v. Savchuk, 444 U.S. 320 (1980)
Facts: While a resident of Indiana, Savchuk was injured in an accident in Indiana while riding as a passenger in a car driven by Rush, also an Indiana resident. After moving to Minnesota, Savchuk commenced this action against Rush in a Minnesota state court, alleging negligence and seeking damages. As Rush had no contacts with Minnesota that would support in personam jurisdiction, Savchuk attempted to obtain quasi in rem jurisdiction by garnishing the contractual obligation of State Farm Mutual Automobile Insurance to defend and indemnify Rush in connection with such a suit. Held: Indiana has jurisdiction. A state may not constitutionally exercise quasi in rem jurisdiction over a defendant who has no forum contacts by attaching the contractual obligation of an insurer licensed to do business in the state to defend and indemnify him in connection with the suit. A state may exercise jurisdiction over an absent defendant only if the defendant has 10
certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. The mere presence of property in a state does not establish a sufficient relationship between the owner of the property and the state to support the exercise of jurisdiction over an unrelated cause of action, and it cannot be said that the defendant engaged in any purposeful activity related to the forum that would make the exercise of jurisdiction fair, just, or reasonable merely because his insurer does business there. Neither does the policy provide significant contacts between the litigation and the forum, for the policy obligations pertain only to the conduct, not the substance, of the litigation. Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947)
Facts: Gilbert (Virginia) sued Gulf Oil (Virginia and New York) for damages for allegedly being careless in handling a delivery of gasoline to his warehouse (in Virginia) thereby causing an explosion and fire destroying his warehouse. Gulf Oil, invoking the doctrine of forum non conveniens, claimed that the appropriate place for trial is Virginia where Gilbert lives and Gulf Oil 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 Gilbert and are able to obtain jurisdiction over Gulf Oil. Held: Virginia court has jurisdiction but not on the ground of forum non conveniens. The doctrine of forum non conveniens can never apply if there is absence of jurisdiction or mistake of venue. Everything happened in Virginia and all witnesses are there. It is Gilbert’s residence and Gulf Oil does business there. Apparently, Gilbert only wanted to file the case in NY because NY juries are accustomed to large awards of damages. NY court lacks jurisdiction. Virginia court is competent to take cognizance of the case. Manila Hotel v. NLRC, G. R. No. 120077, 13 October 2000
Facts: Santos worked at Palace Hotel but was terminated due to political upheaval. He filed a complaint for illegal dismissal in the Philippines. Forum non conveniens is invoked by defendants. Held: NLRC lacks jurisdiction. NLRC was a seriously inconvenient forum. 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 Santos is a Filipino citizen. The Palace Hotel and Manila Hotel International are foreign corporations. Not all cases involving our citizens can be tried here. Santos was hired by Palace Hotel (foreign employer) thru correspondence sent to the Sultanate of Oman. Santos was hired without the intervention of POEA or any authorized recruitment agency of the government. Under the rule of forum non conveniens, a Philippine court 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; 2.) That the Philippine court is in a position to make an intelligent decision as to the law and the facts; 3.) That the Philippine court has or is likely to have power to enforce its decision. The conditions are unavailing in this case. IF Santos were an OCW, a Philippine forum, 11
especifically the POEA, not the NLRC would protect him. He is NOT, however, an OCW, a fact which he admits with conviction. K. K. Shell v. Court of Appeals, 188 SCRA 145 (1990)
Facts: Kumagai (Japan) filed a complaint for collection of sum of money against Atlantic Venus (Panama / M/V Estella owner ), the vessel M/V Estella & Crestamonte Shipping Corporation (Philippines) with the Manila Regional Trial Court (―RTC‖). The complaint alleged that Crestamonte, as bareboat charterer of M/V Estella, appointed NS Shipping Corp. (Japan) as its general agent in Japan. NS Shipping appointed Kumagai as its local agent in Osaka, Japan. Kumagai supplied the M/V Estella with supplies and services, but, despite repeated demands, Crestamonte failed to pay the amounts due. Fu Hing Oil (Hongkong) filed a motion for leave to intervene alleging that it supplied marine diesel oil to M/V Estella & incurred barge expenses but has remained unpaid. KK Shell (Japan) also filed a Motion to Intervene alleging that it also provided M/V Estella with marine diesel. The RTC allowed the intervention. The Court of Appeals (―CA‖) REVERSED. The CA held that Fu Hing and KK Shell were not suppliers but subagents of NS Shipping, hence, they were bound by the Agency Agreement between Crestamonte and NS Shipping, particularly, the choice of forum clause which provides that Japanese courts would have jurisdiction. Held: Manila RTC has jurisdiction. A reading of the Agency Agreement fails to support the conclusion that KK Shell is a sub-agent of NS Shipping and is therefore bound by the agreement. As the choice of forum clause has not been conclusively shown to be binding upon KK Shell, additional evidence would have to be presented to establish this defense. KK Shell cannot therefore, as of yet, be barred from instituting an action in the Philippines. The Supreme Court is not ready to rule on Crestamonte’s invocation of forum non conveniens, as the exact nature of the relationship of the parties is still to be established. The Supreme Court leaves the matter to the sound discretion of the trial court judge who is in the best position, after some vital facts are established, to determine whether special circumstances require that his court desist from assuming jurisdiction over the suit. Communication Materials v. Court of Appeals, 260 SCRA 673 (1996)
Facts: International Inc. (ITEC) (Alabama) entered into a Representative Agreement with ASPAC Multi-trade, Inc. (ASPAC) (Philippines). Pursuant to the contract, ITEC engaged ASPAC as its ―exclusive representative‖ in the Philippines for the sale of its products, in consideration of which ASPAC was paid a stipulated commission. ITEC decided to terminate the contract because ASPAC allegedly violated its contractual commitment. ITEC charges ASPAC and Digital Base Communications (Philippines), whose presidents are the same, of using knowledge and information on ITEC’s product specs to develop their own line of equipment and product support which are similar to ITEC’s own & offering them to ITEC’s former customer. ITEC filed its complaint with the Regional Trial Court of Makati. Defendants filed a Motion to Dismiss on the grounds of (1) lack of ITEC’s legal cap acity to sue and (2) forum non conveniens. Held: Makati RTC has jurisdiction. Forum non conveniens is not applicable. Through forum non conveniens, the Philippine court may refuse to assume jurisdiction in spite of its having acquired jurisdiction. Conversely, the court may assume jurisdiction over the case if it chooses to do so, provided, that the following requisites are met: 1.) That the Philippine court is one to which the parties may conveniently resort to; 12
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 aforesaid requirements having been met, and in view of the court’s disposition to give due course to the questioned action, the matter of the present forum not being the ―most convenient‖ as ground for the suit’s dismissal deserves scant consideration.
Aznar v. Garcia, 117 Phil. 96 (1963)
Facts: Edward (US) died leaving a will. Helen, natural acknowledged child, opposed the project of partition saying she was deprived of her legitime. She says that the distribution should be governed by the laws of the Philppines, and that the distribution would deprive her of her legitime. It was alleged that the law that should govern the estate should not be the internal law of California alone, but the entire law thereof because several foreign elements are involved, that the forum is the Philippines and even if the case were decided in California, Section 946 of the California Code of Commerce, which requires that the domicile of the decedent apply, should be applicable. Held: Philippine courts have jurisdiction. Being a non-resident Californian citizen, Philippine laws apply as provided by the California Civil Code. The conflict of law rule in California, Article 946, Civil Code, refers back the case, when a decedent is not domiciled in California, to the law of his domicile, the Philippines in the case at bar. The court of domicile should refer the case back to California, as the action would leave the issue incapable of determination, because the case will then be tossed back and forth between the two states (renvoi), that is, between the country of which the decedent was a citizen and the country of his domicile. The Philippine court must apply its own law as directed in the conflict of laws rule of the state of the decedent, if the question has to be decided, especially as the application of the internal law of California provides no legitime for children while Philippine law, Articles 887(4) and 894 of the Civil Code of the Philippines, makes natural children legally acknowledged forced heirs of the parent recognizing them. As the domicile of the deceased, who was a citizen of California, was the Philippines, the validity of the provisions of his will depriving his acknowledged natural child of the latter's legacy, should be governed by Philippine law, pursuant to Article 946 of the Civil Code of California, not by the law of California. Lueck v. Sunstrand, 99-15961 (9th Cir. Jan. 8, 2001)
Facts: Ansett New Zealand flight crashed allegedly due to faulty altimeter. Plane crash victims sued Sunstrand for damages. The sole American passenger in the crash settled his claims. To get higher damages, victims still pursued the case in Arizona. Held: Arizona has jurisdiction. In dismissing an action on forum non conveniens grounds the court must examine: 1.) Whether an adequate alternative forum exists; and 2.) Whether the balance of private & public interest factors favors the dismissal. 13
The district court was not required to ask whether plaintiffs could bring this lawsuit in New Zealand, but rather, whether New Zealand offers a remedy for their losses. The District Court did not abuse its discretion in finding that an adequate remedy is available in New Zealand. The foreign forum must provide the plaintiff with some remedy for his wrong in order for the alternative forum to be adequate. Ordinarily, a plaintiff’s choice of forum will not be disturbed unless the ―private interest‖ and ―public interest‖ factors strongly favor trial in a foreign country. If the balance of convenience suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court, dismissal is proper. Both private and public factors weigh against having the suit in Arizona. PRIVATE INTEREST FACTORS (1) (2) (3) (4) (5) (6) (7)
residence of the parties and witnesses forum’s convenience to the litigants access to physical evidence and other sources of proof unwilling witnesses can be compelled to testify cost of bringing witnesses to trial enforceability of the judgment all other practical problems that make trial of a case easy, expeditious, and inexpensive
PUBLIC INTEREST FACTORS (1) local interest of lawsuit (2) court’s familiarity with the governing law (3) burden on local courts & juries (4) congestion in the court (5) costs of resolving a dispute unrelated to this forum Monegro v. Rosa, 211 F.3d 509 (9th Cir. 2000)
Facts: Monegro and others (Dominican Republic) are aspiring professional baseball players and were recruited by Luis Rosa (California), the Giant’s (California) former Latin American scout. At Rosa’s instigation, each signed a 7-yearr Minor League Contract. Rosa expressly conditioned their continued employment to US teams upon their submitting to his sexual advances. They allege that the Giants’ management knew or had reason to know of Rosa’s misconduct. So Monegro filed suit in California. Suit was also filed in the Dominican Republic. Noting the pendency of this ―parallel‖ proceeding, Rosa filed motion to dismiss on the alternative grounds of forum non conveniens. The case was dismissed. Hence, this appeal. Held: California court has jurisdiction. This case is unlike Piper in a number of respects. (1) Unlike Piper, plaintiff’s chosen forum is more than merely the American defendants’ home forum. It is also a forum with substantial relation to the action. (2) Unlike Piper, there are no possible co-defendants or third-party defendants who could not be made to appear in the American forum. (3) Unlike Piper, there is no showing that access to proof, even aside from Rosa’s testimony, would be easier in the Dominican Republic. Traveler’s Health Association v. Virginia, 339 U .S. 643 (1950) 14
Facts: Traveler’s Health Association (Nebraska) conducts a mail-order health insurance business. After being served by registered mail in Nebraska, it was enjoined by the Virginia State Corporation Commission to cease and desist from further solicitation or sale of its certificates of insurance to Virginia residents. The Virginia Blue Sky Law provides that, as a condition for obtaining a permit to sell or offer securities, including certificates of insurance, a foreign corporation must appoint the secretary of state as its agent for service of process. It authorizes the State Corporation Commission to restrain violations of the act, and provides for service by registered mail where other kinds of service are unavailable. Is the Virginia Blue Sky Law violative of due process? Does the Virginia court have power to subject Traveler’s Health to the jurisdiction of the Commission?
Held: YES, Traveler’s Heatlh has sufficient contacts in Virginia. The jurisdiction of Virginia to serve the association by registered mail outside Virginia was upheld on the ground that its contacts with Virginia were sufficient to sustain such jurisdiction. The association systematically soliciting new members, usually through unpaid activities of Virginia residents who are already members, delivering insurance certificates through the mail, and investigating benefit claims in Virginia are deemed sufficient contacts. Due process is not violated by Virginia’s subjection of the association to the jurisdiction of the Commission, at least for the purpose of enforcing the statutory provision which requires the association to accept service of process on the secretary of state. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964)
Facts: Farr, Whitlock & Co. [―FW‖ (US)] contracted to purchase Cuban sugar from Compania Azucarera Vertientes-Camaguey de Cuba [―CAV‖ (Cuban)] whose capital stock was principally owned by US residents. US Congress then amended the Sugar Act of 1948 to permit a presidentially directed reduction of the sugar quota for Cuba. Cuba took this as an act of aggression justifying the taking of countermeasures. Thus, it enacted a law giving the Cuban President and Prime Minister discretionary power to nationalize by forced expropriation property or enterprises in which American Nationals had an interest. Thereafter, Cuba expropriated the property of the Cuban corporation and Banco Nacional was assigned the bills of lading. Banco Nacional instructed its agent in New York to deliver the bills and a sight draft to FW in return for payment. The agent’s initial tender of the documents was refused by FW, which on the same day was notified by CAV of its claim that as rightful owner of the sugar it was entitled to the proceeds. It refused to hand over the proceeds to Banco Nacional’s agent. Shortly thereafter, FW was served with an order of the New York Supreme Court, which appointed Sabbatino as temporary receiver of CAV’s NY Assets. Thus, FW transferred the funds to Sabbatino. Banco Nacional then instituted this action in NY seeking to recover the proceeds of the conversion of the bills of lading. The District Court granted summary judgment against Banco Nacional on the basis that the Cuban expropriatioin decree violated international law. The Court of Appeals affirmed. Held: New York court has no jurisdiction. The act of state doctrine, in its traditional formulation, precludes the courts of the US from inquiring into the validity of the public acts a recognized foreign sovereign power committed within its territory. The judiciary will not examine the validity of a taking of property within its own territory by a foreign sovereign government recognized by the US at the time of suit, in the absence of a 15
treaty or other unambiguous agreement regarding controlling legal principles, even if the complaint alleges that the taking violates customary international law. Hassan El Fadl v. Central Bank of Jordan, 75 F.3d 668 (D.C. Cir. 1996)
Facts: El Fadl is a Lebanese national who has lived in Jordan since 1982. He was employed by Petra International Banking Corporation (PIBC), a subsidiary in the District of Columbia of Petra Bank. Later, he was assigned in PIBC Jordan where he signed a contract under which he would be ―permanently employed for life‖ as senior manager of PIBC. Still, it was PIBC and NOT Petra Bank which employed El Fadl. Later, the Central Bank of Jordan announced that it had uncovered widespread financial improprieties at Petra Bank and placed Petra Bank in receivership. Since then, Petra Bank has been run by a Liquidation Committee appointed by the Jordanian government. Thereafter, El Fadl’s employment was terminated by Marto, Petra Bank’s Administrator. As part of the investigation of the Petra Bank Scandal, El Fadl was arrested, tortured and declared innocent by the military courts. Thereafter, El-Fadl filed suit in the District of Columbia. The case was DISMISSED pursuant to the Federal Sovereign Immunities Act. Held: Columbia has no jurisdiction. The Central Bank of Jordan was a ―foreign state‖ under the Federal Sovereign Immunities Act and had not waived its sovereign immunity. The act of state doctrine applies. Nabulsi and Marto were also immune because they were being sued in their official capacities as agents of the Central Bank. Holy See v. Judge Rosario, 238 SCRA 524 (1994)
Facts: Msgr. Cirilos, Jr., on behalf of the Holy See and the Philippine Realty Corporation (PRC) agreed to sell to Licup 3 parcels of land located in Parañaque. The agreement to sell was made on the condition that earnest money be paid by Licup to the sellers, and that the sellers clear the said lots of squatters. Licup assigned his rights over the property to Starbright Sales Enterprises. Thereafter, Starbright demanded that the sellers fulfill their undertaking and clear the property of squatters. Msgr. Cirilos informed Starbright of the squatters' refusal to vacate, proposing instead either that Starbright undertake the eviction or that the earnest money be returned to the latter. Starbright counterproposed that if it would undertake the eviction of the squatters, the purchase price of the lots should be reduced. Msgr. Cirilos returned the earnest money and wrote Starbright giving it 7 days from receipt of the letter to pay the original purchase price in cash. Starbright sent the earnest money back to the sellers, but later discovered that the Holy See and the PRC sold the lots to Tropicana, so it filed a complaint for annulment of sale, specific performance and damages. The Holy See and Msgr. Cirilos separately moved to dismiss the complaint for lack of jurisdiction based on sovereign immunity from suit. Held: The Holy See has sovereign immunity. The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. This Court has considered the following transactions by a foreign state with private parties as acts jure imperii: (1) lease by a foreign government of apartment buildings for the use of its military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) conduct of public bidding for the repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]). On the other hand, this Court has considered the following transactions by a foreign state with private parties as acts jure gestionis: (1) hiring of a cook in the recreation center, consisting 16
of three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop at the John Hay Air Station in Baguio City, to cater to American servicemen and the general public (United States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) bidding for the operation of barber shops in Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA 644 [1990]). The operation of the restaurants and other facilities open to the general public is undoubtedly for profit as a commercial and not a governmental activity. By entering into the employment contract with the cook in the discharge of its proprietary function, the United States government impliedly divested itself of its sovereign immunity from suit. In the absence of legislation defining what activities and transactions shall be considered "commercial" and as constituting acts jure gestionis, we have to come out with our own guidelines, tentative they may be. Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit. If the Holy See had bought and sold lands in the ordinary course of a real estate business, surely the said transaction can be categorized as an act jure gestionis. However, the Holy See did not acquire or dispose of property for profit. It had acquired the property for the site of its mission or the Apostolic Nunciature in the Philippines. Republic of Indonesia v. Vinzon, 405 SCRA 126 (2003)
Facts: The Republic of Indonesia entered into a Maintenance Agreement with Vinzon, wherein he would, for consideration, maintain specified equipment at the Embassy. When the Indonesian Embassy terminated the agreement, Vinzon filed a complaint against Indonesia with the Makati Regional Trial Court. The Republic of Indonesia filed a Motion to Dismiss claiming sovereign immunity from suit. Vinzon alleged that Indonesia has expressly waived its immunity from suit. He based this claim on the provision: ―Any legal action arising out of this Maintenance Agreement shall be settled according to the laws of the Philippines and by the proper court of Makati City, Philippines.‖ The motion to dismiss was denied. Held: Indonesia’s immunity from suit was not expressly waived. The existence alone of the said stipulation is NOT necessarily a waiver of sovereign immunity from suit. The aforesaid provision contains language NOT necessarily inconsistent with sovereign immunity. Submission by a foreign state to local jurisdiction must be clear & unequivocal. It must be given explicitly or by necessary implication. We find no such waiver in this case. The establishment of a diplomatic mission is an act jure imperii. A sovereign state does not merely establish a diplomatic mission and leave it at that. The establishment of a diplomatic mission encompasses its maintenance and upkeep. Thus, Indonesia was acting in pursuit of a sovereign activity when it entered into a contract with Vinzon for the upkeep of specified equipment.
Choice Of Law Cases: 17
Huntington v. Attrill, 146 U.S. 657 (1892)
Facts: Collis Huntington secured a favorable judgment against Atrill in the court of New York. Since Atrill acquired a large amount of stock in Equitable Gas Light Company of Baltimore (Maryland Corp) and held the same in trust for his wife and three daughters, (residents of Canada), Huntington filed a bill in equity in Baltimore to set aside the said transfer of stock. Attrill contends that the New York judgment is unenforceable in the Maryland court because the law in question is penal in nature. The Baltimore court granted the bill of equity. The Court of Appeals of Maryland reversed and refused to enforce the New York judgment. Held: The New York judgment is enforceable in Maryland. As the statute imposes a burdensome liability on officers for their wrongful act, it may well be considered penal, in the sense that it should be strictly construed. But as it gives a civil remedy, at the private suit of the creditor only, and measured by the amount of his debt, it is as to him clearly remedial. To maintain such suit is not to administer a punishment imposed upon an offender against the state, but simply to enforce a private right secured under its laws to an individual. The statute of New York making the officers of a corporation who sign and record a false certificate of the amount of its capital stock liable for all its debts is not a penal law in the sense that it cannot be enforced in a foreign state or country. Bellis v. Bellis, 126 Phil. 726 (1967)
Facts: Amos Bellis, born in Texas, was a citizen of the state of Texas. With his first wife, he had 5 legitimate kids. With his second wife, he had 3 legitimate kids. Finally, he had 3 illegitimate kids. Bellis executed a will in the Philippines. Later, Bellis died, a resident of San Antonio, Texas, U.S.A.. His will was admitted to probate in the Court of First Instance of Manila. Later, Maria Cristina and Miriam Palma Bellis filed their oppositions to the project of partition on the ground that they were deprived of their legitimes as illegitimate children and compulsory heirs of the deceased. Held: Texas law applies. They are not entitled to legitimes. The doctrine of renvoi is usually pertinent where the decedent is a national of one country, and a domicile of another. In the present case, it is not disputed that the decedent was both a national of Texas and a domicile thereof at the time of his death, so that even assuming Texas has a conflict of law rule providing that the domiciliary system (law of the domicile) should govern, the same would not result in a reference back (renvoi) to Philippine law, but would still refer to Texas law. The parties admit that the decedent was a citizen of the state of Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or legitimates. Accordingly, since the intrinsic validity of the provision of the will and the amount of successional rights are to be determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of Amos Bellis. Zalamea v. Court of Appeals, 228 SCRA 23 (1993)
Facts: Despite confirming their tickets for a flight from New York to Los Angeles with TransWorld Airlines, Inc., the Zalameas were waitlisted when they checked in due to overbooking. The Regional Trial Court awarded moral damages finding bad faith in overbooking. The Court of Appeals reversed. Held: There was bad faith in overbooking. In this jurisdiction, jurisprudence states that overbooking amounts to bad faith, entitling passengers to an award of moral damages. 18
The U.S. law or regulation allegedly authorizing overbooking has never been proved. Foreign laws do not prove themselves nor can the courts take judicial notice of them. Like any other fact, they must be alleged and proved. 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 requires 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 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.
Garcia v. Recio, 418 Phil. 723 (2001)
Facts: Recio (Filipino) married Samson (Australian) in Malabon, Rizal. A decree of divorce was issued by an Australian court. Thereafter, Recio became an Australian citizen. Later, Garcia (Filipina) and Recio were married in Cabanatuan City. Garcia filed a complaint for declaration of nullity of marriage on the ground of bigamy. Recio says that his prior marriage had been validly dissolved and that he was legally capacitated to marry Garcia. While the suit for declaration of nullity was pending, Recio was able to secure a divorce decree from a family court in Australia. Thus, Recio prayed in his Answer that the complaint be dismissed on the ground that it stated no cause of action. The Regional Trial Court dissolved the marriage between Garcia and Recio NOT on the ground of Recio’s lack of legal capacity to remarry BUT on the basis of the divorce decree from Australia. Hence, this petition. Held: Recio was legally capacitated to marry Garcia. Divorce of the first marriage was proven. The case should be remanded to determine if Recio is capacitated to remarry. Philippine law does not provide for absolute divorce for its citizens even if they are abroad but aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law. A divorce decree does not raise a disputable presumption or presumptive evidence as to the civil status of the person presenting it where no proof has been presented on the legal effects of the divorce decree obtained under the foreign law. The legal capacity to contract marriage is determined by the national law of the party concerned. A divorce decree does not ipso facto clothe a divorcee with the legal capacity to remarry. He must still adduce sufficient evidence to show the foreign state’s personal law governing his status, or at the very least, he should still prove his legal capacity to contract the second marriage. The court may not declare the second marriage of a divorcee null and void on the ground of bigamy where there is a possibility that, under the foreign law, the divorcee was really capacitated to remarry as a result of the divorce decree. The most judicious course is to remand the case to the trial court to receive evidence, if any, which shows the divorcee’s legal capacity to remarry. Asiavest Merchant Bankers v. Court of Appeals, 361 SCRA 489 (2001)
Facts: Asiavest (Malaysia) initiated a suit for collection against Philippine National Construction Corporation (PNCC) (Philippines) before a Malaysian Court for the payment of the latter’s outstanding obligations. Judgment was rendered in favor of Asiavest. Asiavest initiated a complaint before the Pasig Regional Trial Court to enforce the judgment. PNCC contends that 19
the judgment is tainted with want of jurisdiction, want of notice to PNCC, fraud and clear mistake of law. Held: The Malaysian judgment is enforceable in the Philippines. 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. 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 the judgment was rendered differs from that of the courts of the country in which the judgment relied on. Matters of remedy and procedure, such as those relating to the service of summons or court process upon the defendant, the authority of counsel to appear and represent a defendant, and the formal requirements in a decision, are governed by the lex fori or the internal law of the forum i.e., the law of Malaysia in this case. In this case, it is the procedural law of Malaysia where the judgment was rendered that determines the validity of the service of court process on private respondent as well as other matters raised by it. As to what the Malaysian procedural law is remains a question of fact not of law. It may not be taken judicial notice of and must be pleaded and proved like any other fact. Sections 24 and 25 of Rule 132 of the Revised Rules of Court provide that it may be evidenced by an official publication or by a duly attested or authenticated copy thereof. It was then incumbent upon private respondent to present evidence as to what that Malaysian procedural law is and to show that, under it, the assailed service of summons upon a financial officer of a corporation, as alleged by it, is invalid. It did not. Accordingly, the presumption of validity and regularity of service of summons and the decision thereafter rendered by the High Court of Malaya must stand. Where under the procedural rules of another state 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. It is not for the party seeking enforcement of a foreign judgment to prove the validity of the same but for the opposing party to demonstrate the alleged invalidity of such foreign judgment, otherwise a contrary rule would render meaningless the presumption of validity accorded a foreign judgment. B.
ENFORCEMENT
A local court may refuse to recognize or enforce a foreign judgment when:18 1. The requisite proof of the foreign judgment may not have been presented;19 2. The foreign judgment may contravene a recognized and established policy in the country; or 3. The administration of justice in the country where the foreign judgment came from may be shockingly corrupt or not beyond reproach.
18 19
SEMPIO-DIY, supra note 98, at 152. R ULES OF COURT, Rule 132, sec. 5. 20
Enforcement includes recognition, while recognition does not necessarily include enforcement, where no affirmative relief is claimed. 20 A foreign judgment may be recognized and enforced in the Philippines only when the losing party is in the Philippines or he has property in the Philippines against which the judgment may be executed.21
20
21
R UBEN AGPALO, CONFLICT OF LAWS 579 (2004), citing Perkins v. Benguet Consolidated Mining Co., 93 Phil. 1034, 1053 (1954). Id. 21
