CHOICE OF LAW THE GOVT OF THE PHILIPPINE ISLANDS vs. FRANK G. R. No.

2935 March 23, 1909 FACTS: In 1903, in the city of Chicago, Illinois, Frank entered into a contract for a period of 2 years with the Plaintiff, by which Frank was to receive a salary as a stenographer in the service of the said Plaintiff, and in addition thereto was to be paid in advance the expenses incurred in traveling from the said city of Chicago to Manila, and one-half salary during said period of travel. Said contract contained a provision that in case of a violation of its terms on the part of Frank, he should become liable to the Plaintiff for the amount expended by the Government by way of expenses incurred in traveling from Chicago to Manila and the one-half salary paid during such period. Frank entered upon the performance of his contract and was paid half-salary from the date until the date of his arrival in the Philippine Islands. Thereafter, Frank left the service of the Plaintiff and refused to make a further compliance with the terms of the contract. The Plaintiff commenced an action in the CFI-Manila to recover from Frank the sum of money, which amount the Plaintiff claimed had been paid to Frank as expenses incurred in traveling from Chicago to Manila, and as half-salary for the period consumed in travel. It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224 should constitute a part of said contract. The Defendant filed a general denial and a special defense, alleging in his special defense that (1) the Government of the Philippine Islands had amended Laws No. 80 and No. 224 and had thereby materially altered the said contract, and also that (2) he was a minor at the time the contract was entered into and was therefore not responsible under the law. The lower court rendered a judgment against Frank and in favor of the Plaintiff for the sum of $265. 90. ISSUE: 1. Did the amendment of the laws altered the tenor of the contract entered into between Plaintiff and Defendant? 2. Can the defendant allege minority/infancy?

HELD: the judgment of the lower court is affirmed 1. NO; It may be said that the mere fact that the legislative department of the Government of the Philippine Islands had amended said Acts No. 80 and No. 224 by Acts No. 643 and No. 1040 did not have the effect of changing the terms of the contract made between the Plaintiff and the Defendant. The legislative department of the Government is expressly prohibited by section 5 of the Act of Congress of 1902 from altering or changing the terms of a contract. The right which the Defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any respect by the fact that said laws had been amended. These acts, constituting the terms of the contract, still constituted a part of said contract and were enforceable in favor of the Defendant. 2. NO; The Defendant alleged in his special defense that he was a minor and therefore the contract could not be enforced against him. The record discloses that, at the time the contract was entered into in the State of Illinois, he was an adult under the laws of that State and had full authority to contract. Frank claims that, by reason of the fact that, under that laws of the Philippine Islands at the time the contract was made, made persons in said Islands did not reach their majority until they had attained the age of 23 years, he was not liable under said contract, contending that the laws of the Philippine Islands governed. It is not disputed upon the contrary the fact is admitted that at the time and place of the making of the contract in question the Defendant had full capacity to make the same. No rule is better settled in law than that matters bearing upon the execution, interpretation and validity of a contract are determined b the law of the place where the contract is made. Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting a remedy, such as the bringing of suit, admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought.

EN BANC [G. R. No. 2935. March 23, 1909.] THE GOVERNMENT OF THE PHILIPPINE ISLANDS, Plaintiff-Appellee, vs. GEORGE I. FRANK,Defendant-Appellant. DECISION JOHNSON, J.: Judgment was rendered in the lower court on the 5th day of September, 1905. the Defendantappealed. On the 12th day of October, 1905, the Appellant filed his printed bill of exceptions with the clerk of the Supreme Court. On the 5th day of December, 1905, the Appellant filed his brief with the clerk of the Supreme Court. On the 19th day of January, 1906, the Attorney-General filed his brief in said cause. Nothing further was done in said cause until on about the 30th day of January, 1909, when the respective parties were requested by this court to prosecute the appeal under penalty of having the same dismissed for failure so to do;

whereupon the Appellant, by petition, had the cause placed upon the calendar and the same was heard on the 2d day of February, 1909. The facts from the record appear to be as follows: First. That on or about the 17th day of April, 1903, in the city of Chicago, in the State of Illinois, in the United States, the Defendant, through a representative of the Insular Government of the Philippine Islands, entered into a contract for a period of two years with the Plaintiff, by which the Defendant was to receive a salary of 1,200 dollars per year as a stenographer in the service of the said Plaintiff, and in addition thereto was to be paid in advance the expenses incurred in traveling from the said city of Chicago to Manila, and one-half salary during said period of travel. Second. Said contract contained a provision that in case of a violation of its terms on the part of the Defendant, he should become liable to the Plaintiff for the amount expended by the Government by way of expenses incurred in traveling from Chicago to Manila and the one-half salary paid during such period. Third. The Defendant entered upon the performance of his contract upon the 30th day of April, 1903, and was paid half-salary from the date until June 4, 1903, the date of his arrival in the Philippine Islands. Fourth. That on the 11th day of February, 1904, the Defendant left the service of the Plaintiffand refused to make a further compliance with the terms of the contract. Fifth. On the 3d day of December, 1904, the Plaintiff commenced an action in the Court of First Instance of the city of Manila to recover from the Defendant the sum of 269. 23 dollars, which amount the Plaintiff claimed had been paid to the Defendant as expenses incurred in traveling from Chicago to Manila, and as half-salary for the period consumed in travel. Sixth. It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224 should constitute a part of said contract. To the complaint of the Plaintiff the Defendant filed a general denial and a special defense, alleging in his special defense that the Government of the Philippine Islands had amended Laws No. 80 and No. 224 and had thereby materially altered the said contract, and also that he was a minor at the time the contract was entered into and was therefore not responsible under the law. To the special defense of the Defendant the Plaintiff filed a demurrer, which demurrer the court sustained. Upon the issue thus presented, and after hearing the evidence adduced during the trial of the cause, the lower court rendered a judgment against the Defendant and in favor of the Plaintifffor the sum of 265. 90 dollars. The lower court found that at the time the Defendant quit the service of the Plaintiff there was due him from the said Plaintiff the sum of 3. 33 dollars, leaving a balance due the Plaintiff in the sum of 265. 90 dollars. From this judgment theDefendant appealed and made the following assignments of error: 1. 2. The court erred in sustaining Plaintiffs demurrer to Defendants special defenses. The court erred in rendering judgment against the Defendant on the facts.

With reference to the above assignments of error, it may be said that the mere fact that the legislative department of the Government of the Philippine Islands had amended said Acts No.

80 and No. 224 by Acts No. 643 and No. 1040 did not have the effect of changing the terms of the contract made between the Plaintiff and the Defendant. The legislative department of the Government is expressly prohibited by section 5 of the Act of Congress of 1902 from altering or changing the terms of a contract. The right which the Defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any respect by the fact that said laws had been amended. These acts, constituting the terms of the contract, still constituted a part of said contract and were enforceable in favor of the Defendant. The Defendant alleged in his special defense that he was a minor and therefore the contract could not be enforced against him. The record discloses that, at the time the contract was entered into in the State of Illinois, he was an adult under the laws of that State and had full authority to contract. The Plaintiff [the Defendant] claims that, by reason of the fact that, under that laws of the Philippine Islands at the time the contract was made, made persons in said Islands did not reach their majority until they had attained the age of 23 years, he was not liable under said contract, contending that the laws of the Philippine Islands governed. It is not disputed upon the contrary the fact is admitted that at the time and place of the making of the contract in question the Defendant had full capacity to make the same. No rule is better settled in law than that matters bearing upon the execution, interpretation and validity of a contract are determined b the law of the place where the contract is made. (Scudder vs. Union National Bank, 91 U. S., 406.) cralaw Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting a remedy, such as the bringing of suit, admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought. (Idem.) cralaw The Defendants claim that he was an adult when he left Chicago but was a minor when he arrived at Manila; that he was an adult a the time he made the contract but was a minor at the time the Plaintiff attempted to enforce the contract, more than a year later, is not tenable. Our conclusions with reference to the first above assignment of error are, therefore. First. That the amendments to Acts No. 80 and No. 224 in no way affected the terms of the contract in question; and Second. The Plaintiff [Defendant] being fully qualified to enter into the contract at the place and time the contract was made, he cannot plead infancy as a defense at the place where the contract is being enforced. We believe that the above conclusions also dispose of the second assignment of error. For the reasons above stated, the judgment of the lower court is affirmed, with costs. Arellano, C.J., Torres, Mapa, Carson and Willard, JJ., concur.

Cadalin vs. POEA G.R. No. L-104776, Dec. 5, 1994

GENERAL RULE: A foreign procedural law will not be applied in the forum. EXCEPTION: When the country of the forum has a "borrowing statute," the country of the forum will apply the foreign statute of limitations. EXCEPTION TO THE EXCEPTION: The court of the forum will not enforce any foreign claim obnoxious to the forum's public policy.

FACTS: 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. The case arose when their overseasemployment 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. 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 teh 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 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 pending claims based on a foreign law. While there are several kinds of borrowing statutes, one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it. Section 48 of our Code of Civil Procedure is of this kind. Said Section provides: If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippine Islands. 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 forums 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 publicpolicy on the protection to labor.

HSBC vs. Sherman G.R. No. 72494, Aug. 11, 1989

Choice-of-forum clause Jurisdiction and Venue Parties can stipulate as to their choice of venue. But if the stipulation is not restrictive, it shall be treated as merely permissive and will not bar the other party from airing the case in a different forum which has jurisdiction over the subject matter.

FACTS: Sometime in 1981, Eastern Book Supply PTE, Ltd. (Company), a company incorporated in Singapore, applied with and was granted by the Singapore Branch of HSBC an overdraft facility. To secure the overdraft facility, private respondents who were directors of the Company executed a Joint and Several Guarantee in favour of HSBC, which provides that: 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. We hereby agree that the Courts ofSingapore shall have jurisdiction over all disputes arising under this guarantee.

However, when the Company failed to pay its obligation, HSBC filed this action with the Philippine courts. In a Motion to Dismiss, the private respondents raised the abovementioned provision of the Joint and Several Guarantee. The trial courtaffirmed the plaintiffs but CA reversed, citing said provision as basis. ISSUE:

Whether or not Philippine courts have jurisdiction over the suit

HELD: The Supreme Court held that the clause in question did not operate to divest the Philippine courts of jurisdiction. While it is true that the transaction took place in Singaporean setting and that the Joint and Several Guarantee contains a choice-of-forum clause, the very essence of due process dictates that the stipulation that [t]his 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. We hereby agree that the Courts in Singapore shall have jurisdiction over all disputes arising under this guarantee be liberally construed. One basic principle underlies all rules of jurisdiction in International Law: a State does not have jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings are in rem, quasi in rem, or in personam. To be reasonable, the jurisdiction must be based on some minimum contacts that will not offend traditional notions of fair play and substantial justice. Indeed, as pointed-out by petitioner BANK at the outset, the instant case presents a very odd situation. In the ordinary habits of life, anyone would be disinclined to litigate before a foreign tribunal, with more reason as a defendant. However, in this case, private respondents are Philippine residents (a fact which was not disputed by them) who would rather face a complaint against them before a foreign court and in the process incur considerable expenses, not to mention inconvenience, than to have a Philippine court try and resolve the case. Private respondents' stance is hardly comprehensible, unless their ultimate intent is to evade, or at least delay, the payment of a just obligation. The defense of private respondents that the complaint should have been filed in Singapore is based merely on technicality. They did not even claim, much less prove, that the filing of the action here will cause them any unnecessary trouble, damage, or expense. On the other hand, there is no showing that petitioner BANK filed the action here just to harass private respondents. The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over travelling sovereigns, ambassadors and diplomatic

representatives of other States, and foreign military units stationed in or marching through State territory with the permission of the latter's authorities. 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.

Carnival Cruise Lines, Inc. v. Shute Citation. 499 U.S. 585, 111 S. Ct. 1522, 113 L. Ed. 2d 622 (1991) Brief Fact Summary. Plaintiff Carnival Cruise Lines, Inc. opposes a suit by a passenger injured on one of their cruise ships, because the cruise tickets contained an agreement that all matters relating to the cruise would be litigated before a Florida court. Synopsis of Rule of Law. Forum-selection clauses forcing individuals to agree to submit to jurisdiction in a particular place are enforceable so long as they pass the test for judicial fairness. Facts. Defendant Shute purchased passage for a seven day cruise on the Tropicale, a ship owned by Plaintiff, through a Washington travel agent. The face of each ticket contained terms and conditions of passage, which included an agreement that all matters disputed or litigated subject to the travel agreement, would be before a Florida court. Defendant boarded the ship in California, which then sailed to Puerto Vallarta, Mexico before returning to Los Angeles. While the ship was in international waters, Defendant Eulala Shute was injured from slipping on a deck mat. Defendants filed suit in Federal District Court in Washington. Defendant filed a motion for summary judgment, alleging that the clause in the tickets required Defendants to bring their suit in Florida. Issue. Whether the court should enforce a forum-selection clause forcing individuals to submit to jurisdiction in a particular state. Held. Yes. The Supreme Court of the United States held that the Court of Appeals erred in refusing to enforce the forum-selection clause. Forum-selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness, but where they are not lacking in fairness, they will be enforced. Dissent. Justice Stevens dissented, in which he was joined by Justice Marshall. Essentially Justice Stevens feels that adhesion contracts, particularly forum-selection clauses, are void as contrary to public policy if they were not freely bargained for, create additional expense for one party, or deny one party a remedy.

Discussion. In reaching its decision, the court noted that there is no evidence that Plaintiff set Florida as the forum as a means of discouraging cruise passengers from pursuing their claims. Such a suggestion is negated by the fact that Plaintiff has its headquarters in Florida, and many of its cruises depart from Florida.

Bellis vs Bellis FACTS: Amos Bellis was a citizen of the State of Texas, and of the United States. By his first wife whom he divorced he had five legitimate children, by his second wife, who survived him, he had three legitimate children, and three illegitimate children. Before he died, he made two wills, one disposing of his Texas properties and the other disposing his Philippine properties. In both wills, his illegitimate children were not given anything. The illegitimate children opposed the will on the ground that they have been deprived of their legitimes to which they should be entitled, if Philippine law were to be applied. ISSUE: Whether or not the national law of the deceased should determine the successional rights of the illegitimate children. HELD: The Supreme Court held that the said children are not entitled to their legitimes under the Texas Law, being the national law of the deceased, there are no legitimes. The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or legitimes. 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 G. Bellis. Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in intestate or testamentary successions, with regard to four items: (a) the order of succession; (b) the amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the capacity to succeed. Intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found.

Aznar vs. Garcia [7 SCRA 95]

Facts: Edward Christensens (citizen of the State of California) will was executed in Manila where it provides that Helen Christensen Garcia receive a payment of P3,600 and proposed that the residue of the estate be transferred to his daughter Maria Lucy Christensen. Helen Christensen Garcia opposed the project of partition of Edwards estate claiming that she was deprived of her legitime as acknowledged natural child under the Philippine law.

Issue: Whether or not the California law or the Philippine law should apply in the case at bar.

Held: Philippine law should be applied. The State of California prescribes two sets of laws for its citizens residing therein and a conflict of law rules for its citizens domiciled in other jurisdictions. Art. 946 of the California Civil Code states that If there is no law to the contrary in the place where personal property is situated, it is deemed to follow the person of its owner and is governed by the law of his domicile. Edward, a citizen of the State of California, is considered to have his domicile in the Philippines. The court of domicile cannot and should not refer the case back to the California, as such action would leave the issue incapable of determination, because the case would then be tossed back and forth between the states(doctrine of renvoi). The validity of the provisions of Edwards will depriving his acknowledged natural child of latters legacy, should be governed by the Philippine law.

The decision appealed from is reversed and the case returned to the lower court with instruction that the partition be made as the Philippine law on succession provides.