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PHILIPPINE ALUMINUM WHEELS, INC. V. FASGI ENTERPRISES, INC.

342 SCRA 722


G.R. NO. 137378
October 12, 2000
Facts:
FASGI is a corporation organized and existing under and by virtue of the
laws of the State of California, USA, entered into a distributorship arrangement
with PAWI, a Philippine corporation, and Pedrini Sarezzo S.P.A (FPS), an Italian
Corporation. The arrangement provided for the purchase, importation and
distributorship in the US of aluminium wheels manufactured by PAWI.
Pursuant to the contract, PAWI shipped to FASGI a total of 8,594 wheels.
Thereabout, FASGI paid PAWI the FOB value of the wheels. Unfortunately,
FASGI later found the shipment to be defective and non-compliance with stated
requirements. FASGI instituted an action against PAWI for breach of contract
and recovery of damages before the US District Court of the Central District of
California. During the pendency of the case, the parties entered into settlement
where it was stipulated that FPS and PAWI would accept the return of not less
than 8,100 wheels after restoring to FASGI the purchase price. The rescission
of the contract of distributorship was to be effected within the period starting
January up until April 1980.
PAWI president expressed the companys inability to comply with the
foregoing agreement and proposed a revised schedule of payment. Despite its
assurances and FASGIs insistence, PAWI failed to open the 1st LC allegedly
due to CB inquiries and restrictions prompting FASGI to pursue its complaint
for damages against PAWI before the California district court. Unable to obtain
satisfaction of the final judgement within the US, FASGI filed a complaint for
enforcement of foreign judgement before the RTC of Makati. The RTC
dismissed the case, thereby denying the enforcement of the foreign judgement
within Philippine jurisdiction, on the ground that the decree was tainted with
collusion, fraud, and clear mistake or law and fact.
RTC: The foreign judgement ignored the reciprocal obligations of the
parties. While the assailed judgement ordered the return by PAWI of the
purchase amount, no similar order was made requiring FASGI to return to
PAWI the 3rd and 4th containers of wheels. This situation amounted to unjust
enrichment on the part of FASGI. Furthermore, the supplemental agreement
and the subsequent motion for entry of judgement upon which the California
Court had based its judgement were a nullity for having been entered into by
Mr. Thomas Ready, counsel of PAWI, without the latters conset.

The CA reversed the decision of the trial court and ordered the full
enforcement of the California judgement.
Issue:
Whether or not the California judgement can be enforced in the
Philippine jurisdiction.
Held:
Yes. The decision of the CA is affirmed. No costs.
Ratio:
Generally, in the absence of special compact, no sovereign is bound to
give effect within its dominion to a judgement rendered by a tribunal of another
country; however, the rules of comity, utility and convenience of nations have
established a usage among civilized states by which final judgements of foreign
courts of competent jurisdiction are reciprocally respected and rendered
efficacious under certain conditions that may vary in different countries.
In this jurisdiction, a valid judgement rendered by a foreign tribunal may
be recognized insofar as the immediate parties and the underlying cause of
action are concerned so long as it is convincingly shown that there has been an
opportunity for a full and fair hearing before a court of competent jurisdiction;
that the trial upon regular proceedings has been conducted, following due
citation or voluntary appearance of the defendant and under a system of
jurisprudence likely to secure an impartial administration of justice; and that
there is nothing to indicate either a prejudice in court and in the system of
laws under which it is sitting or fraud in procuring the judgement. A foreign
judgement 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.
Fraud, to hinder the enforcement within this jurisdiction of a foreign
judgment, must be extrinsic, i.e., fraud based on facts not controverted or
resolved in the case where judgement is rendered, or that which would go to
the jurisdiction of the court or would deprive the party against whom
judgement is rendered a chance to defend the action to which he has a
meritorious or defense. In fine, intrinsic fraud, that is, fraud which goes to the
very existence of the cause of action such as fraud in obtaining the consent to
a contract is deemed already adjudged, and it, therefore, cannot militate
against the recognition or enforcement of the foreign judgement.

IDONAH SLADE PERKINS V. MAMERTO ROXAS ET AL.


72 PHIL 27
G.R. NO. 47517
June 27, 1941
Facts:
Eugene Arthur Perkins filed a complaint in the CFI of Manila against
Benguet Consolidated Mining Company for the recovery of the sum of 71,
379.90 pesos, consisting of dividends which have been declared and made
payable on 52,874 shares of stock registered in his name, payment of which
was being withheld by the company, and for the recognition of is right to the
control and disposal of said shares, to the exclusion of others. The company
alleged, by way of defense, that the withholding of the Eugenes right to the
disposal and control of the shares was due to certain demands made with
respect to said shares by Idonah Perkins and by one George Engelhard.
The trial court ordered Eugene to include in his complaint as parties,
Idonah Perkins and George Engelhard. Summons upon publication was served
upon non-resident Perkins and Engelhard. Engelhard first filed his answer and
Perkins objection to the courts jurisdiction over her person having been
overruled by the trial court and by this court. Idonah filed her answer with
cross-complaint in which she sets up a judgement allegedly obtained by her
against Eugene from the SC of the State of NY, wherein, it was declared that
she is the sole legal owner and entitled to the possession and control of the
shares of stock in question together with all the cash dividends declared
thereon by the BCI.
Issue:
Whether or not, in view of the alleged judgement entered in favour of
Idonah Perkins by the SC of NY, and which is claimed by her as res judicata,
the local court has no jurisdiction over the subject matter.
Held:
Petition denied. With costs against Idonah Perkins.
Ratio:

EMILIE BOUDARD, RAYMOND BOUDARD, GINETTE


MONIQUE BOUDARD V. STEWART EDDIE TAIT
67 PHIL170
G.R. NO. 45193
April 5, 1939

BOUDARD

AND

Facts:
Emilie Boudard, in her capacity as widow of Marie Theodore Boudard
and as guardian of her co-appellants, her children born during her marriage
with the deceased, obtained a judgement in their favour from the CFI of Hanoi
French, Indo-China, for the sum of 40,000 piastras or 56,905.77, Philippine
currency, plus interest in the amount which is not given. The judgement was
rendered against Stewart Eddie Tait who had been declared in default for his
failure to appear at the trial before said court.
Such action was based from the fact that, Marie Theodore Boudard, who
was an employee of Stewart, was killed in Hanoi by other employees of said
Tait, although outside of the fulfilment of a duty. The dismissal of the
appellants complaint by the lower court was based principally on the lack of
jurisdiction of the Court of Hanoi to render judgement in question, for the
execution of which this action was instituted in this jurisdiction. The lack of
jurisdiction was discovered in the action itself of the Court of Hanoi which
states that the appellee was no a resident of, nor had a known domicile in, that
country. The evidence adduced at the trial conclusively proves that neither the
appellee nor his agent or employees were ever in Hanoi, French Indo-China;
and that the deceased had never, at any time, been his employee
Issue:
Whether or not
Held:
Judgement is affirmed with costs against appellants.
Ratio:
The fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain a money judgement, must be based upon personal
service within the state which renders the judgement.
The process of a court of one state cannot run into another and
summon a party there domiciled to respond to proceedings against him. Notice
sent outside the state to a non-resident is unavailing to give jurisdiction in an
action against him personally for money recovery. There must be actual service
within the State of notice upon him or upon someone authorized to accept

service for him. A personal judgement rendered against a non-resident, who


has neither been served with process nor appeared in the suit, is without
validity. The mere transaction of business in a state by non-resident natural
persons does not imply consent to be bound by the process of its courts.
The process of a court has no extraterritorial effect, and no jurisdiction
is acquired over the person of the defendant by serving him beyond boundaries
of the state. Nor has a judgment of a court of a foreign country against a
resident of this country having no property in such foreign country based on
process served here, any effect here against either the defendant personally or
his property situated here.

NAGARMULL V. BINALBAGAN-ISABELA SUGAR COMPANY, INC.


33 SCRA 46
G.R. NO. L-22470
May 28, 1970
Facts:
Under a contract, Nagarmull, a foreign corporation in Calcutta, India,
agreed to sell to Binalbagan, a domestic corporation, pieces of Hessian bags.
Shipment of these bags was to be made in equal installments during each
months of July, August, September and October. Nagarmull advised
Binalabagan that of the 850 bales scheduled of shipment in July and August,
the former was able to ship only 310 bales owing to the alleged failure of the
Adamjee Jute Mills to supply the goods in due time. The 425 bales scheduled
for shipment in September, 54 bales were likewise defaulted resulting in a total
of 154 bales which are now the object of the controversy. Binalbagan requested
Nagarmull to pay 5% of the value of the 154 bales defaulted as penalty which
Nagarmull did.
The Government of India increased the export duty on jute bags from 80
to 350 rupees per ton. Nagarmull requested Binalbagan to increase its letter of
credit to cover the enhanced rate of export duty imposed upon the goods. In
compliance with Nagarmulls request, Binalbagan increased its letters of credit.
Nagarmull further requested an increase in its letter of credit. Nagarmull,
reiterated its claim. Binalbagan received notification from the Bengal Chamber
of Commerce, Tribunal of Arbitration in Calcutta, India, advising it that
Nagarmull applied to said tribunal for arbitration regarding their claim. The
tribunal decided in favour of Nagarmull and ordered Binalbagan to pay to the
plaintiff the sum of 18, 562 rupees and 8 annas. This award was thereafter
referred to the Calcutta High Court which issued a decree affirming the award.
Nagarmull sought to enforce the said award which the defendant replied,
saying that they are not bound by the decision of the Bengal Chamber of
Commerce and consequently are not obligated to pay the claim in question.
Issue:
Whether or not the decision of the Tribunal of Arbitration of the Bengal
Chamber of Commerce, as affirmed by the High Court of Judicature of
Calcutta, is enforceable in the Philippines.
Held:
No, the appealed judgement is reversed and set aside. With costs.

Ratio:
It is true that under the provisions of Section 50 of Rule 39 of the Rules
of Court, a judgement for a sum of money rendered by a foreign court is
presumptive evidence of a right as between the parties and their successors in
interest by a subsequent title, but when suit for its enforcement is brought in
the Philippine court, said judgement may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of
law or fact.
Upon the facts of the record, we are constrained to hold that the decision
sought to be enforced was rendered upon a clear mistake of law and because
of that it makes Binalbagan an innocent party suffer the consequences of
the default or breach of contract committed by Nagarmull.

OIL AND NATURAL GAS COMMISSION V. COURT OF APPEALS AND


PACIFIC CEMENT COMPANY, INC.
293 SCRA 26
G.R. NO. 114323
July 23, 1998
Facts:
ONGC is a foreign corporation owned and controlled by the Government
of India while PCCI is a private corporation duly organized and existing under
the laws of the Philippines. ONGC and PCCI entered into a contract whereby
PCCI undertook to supply ONGC 4,300 metric tons of oil well cement. In
consideration therefore, ONGC bound itself to pay PCCI $477,300.00 by
opening an irrevocable, divisible and confirmed letter of credit in favour of the
latter. However, due to the dispute between the ship owner and PCCI the cargo
was held up in Bangkok and did not reach its point of destination.
Notwithstanding the fact that the PCCI had already received payment and
despite several demands made by the ONGC, PCCI failed to deliver the oil well
cement. Negotiations ensued between the parties and they agreed that the
PCCI will replace the entire 4.300 metric tons of oil well cement with Class G
cement cost free at the ONGCs designated port. However, upon inspection, the
Class G cement did not conform to ONGCs specification. ONGC then
informed PCCI that it was referring its claim to arbitration pursuant to clause
16 of their contract.
The chosen arbitrator resolved the dispute in favour of the ONGC. To
enable ONGC to execute the arbitrators award, it filed a petition before the
Court of the Civil Judge in Dehra Dun India, praying that the decision of the
arbitrator be made the Rule of Court in India. The PCCI sent its objections.
Said court directed the PCCI to pay the filing fees in order that the latters
objections could be given consideration. Instead of paying the required filing
fees, the PCCI sent a communication addressed to the Civil Judge. Without
responding to the communication, the foreign court refused to admit PCCIs
objections for failure to pay the required filing fees, and thereafter, issued an
order making the award made by the arbitrator Rule of Court.
Despite demands, PCCI refused to pay the amount. Accordingly, ONGC
filed a complaint with the RTC of Surigao City for the enforcement of the
judgement of the foreign court. RTC held that the rule prohibiting foreign
corporations transacting business in the Philippines without a license from
maintaining a suit in the Philippine courts admits an exception, that is, when
the foreign corporation is suing on an isolated transaction as in this case.
However, the RTC characterized the erroneous submission of the dispute to the

arbitrator as a mistake of law or fact amounting to want of jurisdiction and


held that the proceedings before the arbitrator are null and void and dismissed
the complaint. The Court of Appeals affirmed the decision of the RTC.
Issue:
Whether or not the judgement of the foreign court is enforceable in this
jurisdiction in view of PCCIs allegation that it is bereft of any statement of facts
and law upon which the award in favour of the ONGC was based.
Held:
Yes. The instant petition is granted and the assailed decision of the Court
of Appeals sustaining the decision of the trial court is reversed.
Ratio:
The recognition, to be accorded foreign judgement is not necessarily
affected by the fact that the procedure in the courts of the country in which
such judgement was rendered differs from that of the courts of the country in
which judgment is relied on. This court has held that, matters of remedy and
procedure are governed by the lex fori or the internal law of the forum. Thus, if
under the procedural rules of the Civil Court of Dehra Dun, India, a valid
judgement may be rendered by adopting the arbitrators findings, then the
same must be accorded respect. In the same vein, if the procedures in the
foreign courts mandate that an order of the court becomes final and executor
upon failure to pay the necessary docket fees, then the courts in this
jurisdiction cannot invalidate the order of the foreign court simply because our
rules provide otherwise.
The party attacking a foreign judgment, the private respondent herein, had the
burden of overcoming the presumption of its validity which it failed to do in the
instant case.

INTESTATE ESTATE OF IDONAH SLADE PERKINS


RENATO TAYAG, ancillary administrator V. BENGUET CONSOLIDATED
INC.
26 SCRA 242
G.R. NO. L-23145
November 29, 1968
Facts:
Idonah Slade Perkins left 2 stocks certificate covering 33, 002 shares of
BCI, the certificates being in possession of the Country Trust Company (CTC)
of New York, which as noted, is the domiciliary administrator of the state of the
deceased. Prospero Sanidad instituted ancillary administration proceedings in
the CFI of Manila. Lazaro marquez was appointed ancillary administrator, then
he was substituted by Renato Tayag. A dispute arose between the domiciliary
administrator in New York and the ancillary administrator in the Philippines as
to which of them is entitled to the possession of the stock certificates in
question. The CFI ordered the domiciliary administrator, CTC to produce and
deposit them with the ancillary administrator or with the Clerk of Court. The
domiciliary administrator did not comply with the order. The ancillary
administrator petitioned the court to issue an order declaring the certificate of
stocks be declared or considered as lost.
It is to be noted further that BCI admits that it is immaterial as far as it
is concerned as to who is entitled to the possession of the stock certificates;
appellant opposed the petition of the ancillary administrator because the said
stock certificates are in existence, they are today in the possession of the
domiciliary administrator, the CTC, in NY. It is its view therefore, that under
the circumstances, the stocks certificates cannot be declared or considered as
lost.
Issue:
Whether or not the ancillary administration is entitled to the possession
of the stocks certificates in questioned.
Held:
Yes. The appealed order is affirmed. Cost against the Benguet
Consolidated Inc.
Ratio:

No one could dispute the power of an ancillary administrator to gain


control and possession of all assets of the decedent within the jurisdiction of
the Philippines. Such a power is inherent in his duty to settle her estate and
satisfy the claims of local creditors. It is a general rule universally recognized
that administration, whether principal or ancillary, certainly extends to assets
of a decedent found within the state or country where it was granted, corollary
being that an administrator appointed in one state or country has no power
over property in another state or country.
It would follow then that the authority of the probate court to require
that ancillary administrators right to the stock certificates covering the 33,
002 shares standing in her name in the books of BCI be respected is equally
beyond question. For BCI is a Philippine corporation owing full allegiance and
subject to the unrestricted jurisdiction of local courts. Its shares of stocks
cannot therefore be considered in any wise as immune from lawful court
orders.

ASIAVEST MERCHANT BAKERS (M) BERHAD V. COURT OF APPEALS AND


PHILIPPINE NATIONAL CONSTRUCTION CORPORATION
361 SCRA 489
G.R. NO. 110263
July 20, 2001
Facts:
Asiavest Merchant Bankers (M) Berhad is a corporation organized under
the laws of Malaysia while Philippine National Construction Corporation
(PNCC) is a corporation duly incorporated and existing under the Philippine
laws.
Asiavest initiated a suit for collection against PNCC, then known as
Construction and Development Corporation of the Philippines, before the High
Court of Malaya, Kuala Lumpur. They sought to recover the indemnity of the
performance bond it had put up in favour of PNCC to guarantee the completion
of the Felda Project and non-payment of the loan it extended. The High Court
of Malaya rendered judgement in favor of Asiavest and directed PNCC to pay
petitioner interest on the sums covered by the said judgement.
Following unsuccessful attempts to secure payment from PNCC under
the judgement, Asiavest initiated the complaint before the RTC of Pasig to
enforce the judgement of the High Court of Malaya. The contention of the PNCC
is that, judgement of the High Court of Malaya should be denied recognition or
enforcement since on its face, it is tainted with want of jurisdiction, want of
notice to the PNCC, collusion and/or fraud and there is a clear mistake of fact.
Asiavest contends that the High Court of Malaya acquired jurisdiction over the
person of the PNCC by its voluntary submission to the courts jurisdiction.
The trial court dismissed Asiavests complaint. The Court of Appeals
affirmed the decision of the trial court.
Issue:
Whether or not the judgement of the High Court of Malaya should be denied
recognition or enforcement by the courts in the Philippines by reason that the
service of summons made was invalid.
Held:
No. The instant petition is granted. The decision of the CA sustaining the
decision of the RTC of Pasig denying the enforcement of judgement of the High
Court of Malaya in Kuala Lumpur is reversed and set aside. Costs against
PNCC.

Ratio:
Needless to stress, the recognition to be accorded a foreign judgement is
not necessarily affected by the fact that the procedure in the courts of the
country in which such judgement was rendered differs from that of the courts
of the country in which the judgement is relied on. Ultimately, matters of
remedy and procedure such as those relating to the service of summons or
court process upon the defendant, the authority of counsel to appear and
represent a defendant and the formal requisites in a decision are governed by
the lex fori or the internal law of the forum, the law of Malaysia in this case.
In this case, it is the procedural law of Malaysia where the judgement 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 respondents 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. Accordingly, the presumption of validity and regularity of
service of summons and the decision thereafter rendered by the High Court of
Malaya must stand.
All in all, private respondent had the ultimate duty to demonstrate the
alleged invalidity of such foreign judgement, being the party challenging the
judgement rendered by the High Court of Malaya. But instead of doing so,
private respondent merely argued, to which the trial court agreed, that the
burden lay upon petitioner to prove the validity of the money judgement. Such
is clearly erroneous and would render meaningless the presumption of validity
accorded a foreign judgement were the party seeking to enforce it be required
to first establish its validity.