CONFLICT OF LAWS digest

1st LIST OF CASES

1. Saudi Arabian Airlines vs. CA, GR No. 122191,
October 8, 1998
FACTS:
Plaintiff was a flight attendant went out with two Saudi
nationals to which one attempted to rape her but failed
due to arrival of Indonesia police who then arrested the
said nationals.When brought to SAUDI court, plaintiff
was made to sign a document in Arabic and such was
actually a notice to appear. In the same court, plaintiff
was
erroneously
sentenced
to
five
months
imprisonment and to 286 lashes for being allegedly
guilty of(1) adultery; (2) going to a disco, dancing and
listening to the music in violation of Islamic laws; and
(3) socializing with the male crew, in contravention of
Islamic tradition. Plaintiff sued for damages
ISSUES:
a. Whether RTC has juridisdiction.
b. Whether Philippine Law governs.
HELD:
a. Yes, RTC has jurisdiction
b. Yes, Philippine Law governs
Where the factual antecedents satisfactorily establish
the existence of a foreign element, we agree with
petitioner that the problem herein could present a
"conflicts" case.
A factual situation that cuts across territorial lines and
is affected by the diverse laws of two or more states is
said to contain a "foreign element". The presence of a
foreign element is inevitable since social and economic
affairs of individuals and associations are rarely
confined to the geographic limits of their birth or
conception. The forms in which this foreign element
may appear are many. The foreign element may simply
consist in the fact that one of the parties to a contract
is an alien or has a foreign domicile, or that a contract
between nationals of one State involves properties
situated in another State. In other cases, the foreign
element may assume a complex form.
In the instant case, the foreign element consisted in
the fact that private respondent Morada is a resident
Philippine national, and that petitioner SAUDIA is a
resident foreign corporation. Also, by virtue of the
employment of Morada with the petitioner Saudia as a
flight stewardess, events did transpire during her many
occasions of travel across national borders, particularly
from Manila, Philippines to Jeddah, Saudi Arabia, and
vice versa, that caused a "conflicts" situation to arise.
We thus find private respondent's assertion that the
case is purely domestic, imprecise. A conflicts problem
presents itself here, and the question of jurisdiction 43
confronts the court a quo.After a careful study of the
private respondent's Amended Complaint, 44 and the
Comment thereon, we note that she aptly predicated
her cause of action on Articles 19 and 21 of the New
Civil Code.
Pragmatic considerations, including the convenience of
the parties, also weigh heavily in favor of the RTC
Quezon City assuming jurisdiction. Paramount is the
private interest of the litigant. Enforceability of a
judgment if one is obtained is quite obvious. Relative
advantages and obstacles to a fair trial are equally
important. Plaintiff may not, by choice of an
inconvenient forum, "vex", "harass", or "oppress" the
defendant, e.g. by inflicting upon him needless
expense or disturbance. But unless the balance is
strongly in favor of the defendant, the plaintiffs choice
of forum should rarely be disturbed.
Clearly, petitioner had submitted to the jurisdiction of
the Regional Trial Court of Quezon City. Thus, we find
that the trial court has jurisdiction over the case and
that its exercise thereof, justified.
As to the choice of applicable law, we note that choiceof-law problems seek to answer two important
questions: (1) What legal system should control a given

situation where some of the significant facts occurred

in two or more states; and (2) to what extent should
the chosen legal system regulate the situation. 53
Several theories have been propounded in order to
identify the legal system that should ultimately control.
Although ideally, all choice-of-law theories should
intrinsically advance both notions of justice and
predictability, they do not always do so. The forum is
then faced with the problem of deciding which of these
two important values should be stressed. 54
Before a choice can be made, it is necessary for us to
determine under what category a certain set of facts or
rules fall. This process is known as "characterization",
or the "doctrine of qualification". It is the "process of
deciding whether or not the facts relate to the kind of
question specified in a conflicts rule." 55 The purpose of
"characterization" is to enable the forum to select the
proper law. 56
Our starting point of analysis here is not a legal
relation, but a factual situation, event, or operative
fact. 57 An essential element of conflict rules is the
indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a
factual relationship (such as property right, contract
claim) and a connecting factor or point of contact, such
as the situs of the res, the place of celebration, the
place of performance, or the place of wrongdoing. 58
Note that one or more circumstances may be present
to serve as the possible test for the determination of
the applicable law. 59 These "test factors" or "points of
contact" or "connecting factors" could be any of the
following:
(1) The nationality of a person, his domicile, his
residence, his place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a
corporation;
(3) the situs of a thing, that is, the place where a
thing is, or is deemed to be situated. In particular,
the lex situs is decisive when real rights are
involved;
(4) the place where an act has been done, the
locus actus, such as the place where a contract
has been made, a marriage celebrated, a will
signed or a tort committed. The lex loci actus is
particularly important in contracts and torts;
(5) the place where an act is intended to come into
effect, e.g., the place of performance of contractual
duties, or the place where a power of attorney is to
be exercised;
(6) the intention of the contracting parties as to the
law that should govern their agreement, the lex
loci intentionis;
(7) the place where judicial or administrative
proceedings are instituted or done. The lex fori
the law of the forum is particularly important
because, as we have seen earlier, matters of
"procedure" not going to the substance of the
claim involved are governed by it; and because the
lex fori applies whenever the content of the
otherwise applicable foreign law is excluded from
application in a given case for the reason that it
falls under one of the exceptions to the
applications of foreign law; and
(8) the flag of a ship, which in many cases is
decisive of practically all legal relationships of the
ship and of its master or owner as such. It also
covers
contractual
relationships
particularly
contracts of affreightment.
After a careful study of the pleadings on record,
including allegations in the Amended Complaint
deemed admitted for purposes of the motion to
dismiss, we are convinced that there is reasonable
basis for private respondent's assertion that although
she was already working in Manila, petitioner brought
her to Jeddah on the pretense that she would merely
testify in an investigation of the charges she made
against the two SAUDIA crew members for the attack
on her person while they were in Jakarta. As it turned
out, she was the one made to face trial for very serious

charges, including adultery and violation of Islamic

laws and tradition.
Prescinding from this premise that the Philippines is the
situs of the tort complained of and the place "having
the most interest in the problem", we find, by way of
recapitulation, that the Philippine law on tort liability
should have paramount application to and control in
the resolution of the legal issues arising out of this
case. Further, we hold that the respondent Regional
Trial Court has jurisdiction over the parties and the
subject matter of the complaint; the appropriate venue
is in Quezon City, which could properly apply Philippine
law.
2. In the Matter of the Estate of Edward E.
Christensen vs. Adolfo C. Aznar, GR No.L-16749
FACTS:
Edward E. Christense, a citizen of the United States and
of the State of California at the time of his death. Made
a will disposing wealth to daughter.
ISSUE:
Whether Philippine Laws should govern the intrinsic
validity of testamentary disposition of the distribution
of the estate of deceased, under doctrine of renvoi.
HELD:
In arriving at the conclusion that the domicile of the
deceased is the Philippines, we are persuaded by the
fact that he was born in New York, migrated to
California and resided there for nine years, and since
he came to the Philippines in 1913 he returned to
California very rarely and only for short visits (perhaps
to relatives), and considering that he appears never to
have owned or acquired a home or properties in that
state, which would indicate that he would ultimately
abandon the Philippines and make home in the State of
California.
The terms "'residence" and "domicile" might well be
taken to mean the same thing, a place of permanent
abode. But domicile, as has been shown, has acquired
a technical meaning. Thus one may be domiciled in a
place where he has never been. And he may reside in a
place where he has no domicile. The man with two
homes, between which he divides his time, certainly
resides in each one, while living in it. But if he went on
business which would require his presence for several
weeks or months, he might properly be said to have
sufficient connection with the place to be called a
resident. It is clear, however, that, if he treated his
settlement as continuing only for the particular
business in hand, not giving up his former "home," he
could not be a domiciled New Yorker. Acquisition of a
domicile of choice requires the exercise of intention as
well as physical presence. "Residence simply requires
bodily presence of an inhabitant in a given place, while
domicile requires bodily presence in that place and also
an intention to make it one's domicile." Residence,
however, is a term used with many shades of meaning,
from the merest temporary presence to the most
permanent abode, and it is not safe to insist that any
one use et the only proper one.
ART. 16. Real property as well as personal property is
subject to the law of the country where it is situated.
However, 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 where said
property may be found.
The conflict of laws rule in California, Article 946, Civil
Code, precisely 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 the
domicile can not and should not refer the case back to
California; such action would leave the issue incapable
of determination because the case will then be like a
football, tossed back and forth between the two states,
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 the Philippine law, Arts. 887(4) and 894,
Civil Code of the Philippines, makes natural children
legally acknowledged forced heirs of the parent
recognizing them.
We therefore find that as the domicile of the deceased
Christensen, a citizen of California, is the Philippines,
the validity of the provisions of his will depriving his
acknowledged natural child, the appellant, should be
governed by the Philippine Law, the domicile, pursuant
to Art. 946 of the Civil Code of California, not by the
internal law of California..
3. Allison G. Gibbs vs. Government of the
Philippine Islands, GR No.L-35694, December
23, 1933
FACTS:
Gibbs survived his wife, both citizens of State of
California and domiciled. Claiming under California law
that he will the sole owner of all conjugal properties left
petitioned to be such. The register of deeds of the City
of Manila, declined to accept as binding said decree of
court of September 22,1930, and refused to register
the transfer of title of the said conjugal property to
Allison D. Gibbs, on the ground that the corresponding
inheritance tax had not been paid.
HELD:
Under the provisions of the Civil Code and the
jurisprudence prevailing here, the wife, upon the
acquisition of any conjugal property, becomes
immediately vested with an interest and title therein
equal to that of her husband, subject to the power of
management and disposition which the law vests in the
husband. Immediately upon her death, if there are no
obligations of the decedent, as is true in the present
case, her share in the conjugal property is transmitted
to her heirs by succession. (Articles 657, 659, 661, Civil
Code; cf. also Coronel vs. Ona, 33 Phil., 456, 469.)
It results that the wife of the appellee was, by the law
of the Philippine Islands, vested of a descendible
interest, equal to that of her husband, in the Philippine
lands covered by certificates of title Nos. 20880, 28336
and 28331, from the date of their acquisition to the
date of her death. That appellee himself believed that
his wife was vested of such a title and interest in
manifest from the second of said certificates, No.
28336, dated May 14, 1927, introduced by him in
evidence, in which it is certified that "the spouses
Allison D. Gibbs and Eva Johnson Gibbs are the owners
in fee simple of the conjugal lands therein described."
The descendible interest of Eva Johnson Gibbs in the
lands aforesaid was transmitted to her heirs by virtue
of inheritance and this transmission plainly falls within
the language of section 1536 of Article XI of Chapter 40
of the Administrative Code which levies a tax on
inheritances. (Cf.
4. Cadalin vs. POEA, et al., GR No.L-104776, 5
December 1994
FACTS:
Cadalin, Amul and Evangelista filed a class suit with
POEA for money claims arising from recruitment by AIBC
and employment by BRII. They sought payment for
unexpired portion of employment contracts and other
unpaid benefits.
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:
Article 156 of the Amiri Decree No. 23 of 1976
provides:

A claim arising out of a contract of employment shall

not be actionable after the lapse of one year from the
date of the expiry of the contract. (G.R. Nos. 10502931, Rollo, p. 226).
As a general rule, a foreign procedural law will not be
applied in the forum. Procedural matters, such as
service of process, joinder of actions, period and
requisites for appeal, and so forth, are governed by the
laws of the forum. This is true even if the action is
based upon a foreign substantive law (Restatement of
the Conflict of Laws, Sec. 685; Salonga, Private
International Law, 131 [1979]).
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.
Thus in Bournias v. Atlantic Maritime Company, supra,
the American court applied the statute of limitations of
New York, instead of the Panamanian law, after finding
that there was no showing that the Panamanian law on
prescription was intended to be substantive. Being
considered merely a procedural law even in Panama, it
has to give way to the law of the forum on prescription
of actions.
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
(Goodrich, Conflict of Laws 152-153 [1938]). 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 (Siegel, Conflicts, 183
[1975]). 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 (Goodrich and Scoles, Conflict of
Laws, 152-153 [1938]). 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 Philippines Islands.
Section 48 has not been repealed or amended by the
Civil Code of the Philippines. Article 2270 of said Code
repealed only those provisions of the Code of Civil
Procedures as to which were inconsistent with it. There
is no provision in the Civil Code of the Philippines,
which is inconsistent with or contradictory to Section
48 of the Code of Civil Procedure (Paras, Philippine
Conflict of Laws 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section
48 cannot be enforced ex proprio 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
claim obnoxious to the forum's public policy (Canadian
Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct.
402, 64 L. ed. 713 [1920]). To enforce the one-year
prescriptive period of the Amiri Decree No. 23 of 1976
as regards the claims in question would contravene the
public policy on the protection to labor.
In the Declaration of Principles and State Policies, the
1987 Constitution emphasized that:
The state shall promote social justice in all
phases of national development. (Sec. 10).
The state affirms labor as a primary social
economic force. It shall protect the rights of
workers and promote their welfare (Sec. 18).
In article XIII on Social Justice and Human Rights, the
1987 Constitution provides:
Sec. 3. The State shall afford full protection to
labor, local and overseas, organized and unorganized,
and promote full employment and equality of
employment opportunities for all.
Having determined that the applicable law on
prescription is the Philippine law, the next question is
whether the prescriptive period governing the filing of
the claims is three years, as provided by the Labor

Code or ten years, as provided by the Civil Code of the

Philippines.
5. Van Dorn vs. Romillo, GR No.68470, 8 October
1985, 139 SCRA 140
FACTS:
Petitioner is a citizen of the Philippines while private
respondent is a citizen of the United States; that they
were married in Hongkong in 1972; that, after the
marriage, they established their residence in the
Philippines; that they begot two children born on April
4, 1973 and December 18, 1975, respectively; that the
parties were divorced in Nevada, United States, in
1982; and that petitioner has re-married also in
Nevada, this time to Theodore Van Dorn. Private
respondent filed suit against petitioner in Civil stating
that petitioner's business in Ermita, Manila, (the
Galleon Shop, for short), is conjugal property of the
parties, and asked he be declared with right to manage
the conjugal property.
ISSUE: Effect of Foreign Divorce on parties and conjugal
properties
HELD:
There can be no question as to the validity of that
Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as
an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of
the Union. What he is contending in this case is that
the divorce is not valid and binding in this jurisdiction,
the same being contrary to local law and public policy.
It is true that owing to the nationality principle
embodied in Article 15 of the Civil Code, 5 only
Philippine nationals are covered by the policy against
absolute divorces the same being considered contrary
to our concept of public police and morality. However,
aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid
according to their national law. 6 In this case, the
divorce in Nevada released private respondent from
the marriage from the standards of American law,
under which divorce dissolves the marriage. As stated
by the Federal Supreme Court of the United States in
Atherton vs. Atherton, 45 L. Ed. 794, 799:
The purpose and effect of a decree of divorce from the
bond of matrimony by a court of competent jurisdiction
are to change the existing status or domestic relation
of husband and wife, and to free them both from the
bond. The marriage tie when thus severed as to one
party, ceases to bind either. A husband without a wife,
or a wife without a husband, is unknown to the law.
When the law provides, in the nature of a penalty. that
the guilty party shall not marry again, that party, as
well as the other, is still absolutely freed from the bond
of the former marriage.
Thus, pursuant to his national law, private respondent
is no longer the husband of petitioner. He would have
no standing to sue in the case below as petitioner's
husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own
country's Court, which validly exercised jurisdiction
over him, and whose decision he does not repudiate,
he is estopped by his own representation before said
Court from asserting his right over the alleged conjugal
property.
To maintain, as private respondent does, that, under
our laws, petitioner has to be considered still married
to private respondent and still subject to a wife's
obligations under Article 109, et. seq. of the Civil Code
cannot be just. Petitioner should not be obliged to live
together with, observe respect and fidelity, and render
support to private respondent. The latter should not
continue to be one of her heirs with possible rights to
conjugal property. She should not be discriminated
against in her own country if the ends of justice are to
be served.

6. Pilapil vs. Ibay-Somera, GR No.80116, 30 June

1989, 174 SCRA 663
FACTS:
Petitioner Imelda Manalaysay Pilapil, a Filipino citizen,
and private respondent Erich Ekkehard Geiling, a
German national, were married in Germany. Couple
lived together and had a child Isabella Pilapil Geiling,
was born on April 20, 1980. After about three and a
half years of marriage, private respondent initiating a
divorce proceeding against petitioner in Germany
before the Schoneberg Local Court in January, 1983. He
claimed that there was failure of their marriage and
that they had been living apart since April, 1982. More
than five months after the issuance of the divorce
decree, private respondent filed two complaints for
adultery before the City Fiscal of Manila alleging that,
while still married to said respondent, petitioner "had
an affair with a certain William Chia as early as 1982
and with yet another man named Jesus Chua sometime
in 1983"
ISSUE:
WON court has jurisdiction to try and decide charge od
adultery which is a private offense since complainant is
a foreigner and WON he qualifies as offended spouse.
HELD:
We are convinced that in cases of such nature, the
status of the complainant vis-a-vis the accused must
be determined as of the time the complaint was filed.
Thus, the person who initiates the adultery case must
be an offended spouse, and by this is meant that he is
still married to the accused spouse, at the time of the
filing of the complaint.
In the present case, the fact that private respondent
obtained a valid divorce in his country, the Federal
Republic of Germany, is admitted. Said divorce and its
legal effects may be recognized in the Philippines
insofar as private respondent is concerned 23 in view of
the nationality principle in our civil law on the matter of
status of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et
al., 24 after a divorce was granted by a United States
court between Alice Van Dornja Filipina, and her
American husband, the latter filed a civil case in a trial
court here alleging that her business concern was
conjugal property and praying that she be ordered to
render an accounting and that the plaintiff be granted
the right to manage the business. Rejecting his
pretensions, this Court perspicuously demonstrated the
error of such stance, thus:
There can be no question as to the validity of that
Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as
an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of
the Union. ...
It is true that owing to the nationality principle
embodied in Article 15 of the Civil Code, only Philippine
nationals are covered by the policy against absolute
divorces the same being considered contrary to our
concept of public policy and morality. However, aliens
may obtain divorces abroad, which may be recognized
in the Philippines, provided they are valid according to
their national law. ...
Thus, pursuant to his national law, private respondent
is no longer the husband of petitioner. He would have
no standing to sue in the case below as petitioner's
husband entitled to exercise control over conjugal
assets. ... 25
Under the same considerations and rationale, private
respondent, being no longer the husband of petitioner,
had no legal standing to commence the adultery case
under the imposture that he was the offended spouse
at the time he filed suit.
7. Llorente vs. CA, GR No.124371, 23 November
2000, 345 SCRA 592
FACTS:

Lorenzo and Paula Llorented were married in Camarines

Sur. Lorenzo departed for US and Paula stayed in Phils.
Lorenzo was admitted US Citizenship and certificate of
naturalization. When he went back to Phils, his wife was
pregnant and havinga relationship with his brother.
Lorenzo returned to US and filed divorce and married
Alicia Llorente. He executed a will and bequeathed
property to Alicia and their 3 children. Paula filed for
letters of administration and was opposed by Alicia. RTC
granted paulas petition. CA affirmed RTC.
ISSUE: Who are entitled to inherit from Lorenzo Llorente?
What is the applicable law?
HELD:
Case remanded to trial court to rule intrinsic validity. The
fact that the late Lorenzo N. Llorente became an
American citizen long before and at the time of: (1) his
divorce from Paula; (2) marriage to Alicia; (3) execution
of his will; and (4) death, is duly established, admitted
and undisputed.
Thus, as a rule, issues arising from these incidents are
necessarily governed by foreign law. The Civil Code
clearly provides:
Art. 15. Laws relating to family rights and duties, or
to the status, condition and legal capacity of persons
are binding upon citizens of the Philippines, even
though living abroad.
Art. 16. Real property as well as personal property is
subject to the law of the country where it is situated.
However, intestate and testamentary succession, both
with respect to the order of succession and to the
amount of successional rights and to the intrinsic
validity of testamentary provisions, shall be
regulated by the national law of the person
whose succession
is
under
consideration,
whatever may be the nature of the property and
regardless of the country wherein said property may be
found. (emphasis ours)
True, foreign laws do not prove themselves in our
jurisdiction and our courts are not authorized to take
judicial notice of them. Like any other fact, they must
be alleged and proved.
While the substance of the foreign law was pleaded,
the Court of Appeals did not admit the foreign law. The
Court of Appeals and the trial court called to the fore
the renvoi doctrine, where the case was referred
back to the law of the decedents domicile, in this
case, Philippine law.
We note that while the trial court stated that the law of
New York was not sufficiently proven, in the same
breath it made the categorical, albeit equally unproven
statement that American law follows the domiciliary
theory hence, Philippine law applies when determining
the validity of Lorenzos will.
First, there is no such thing as one American law. The
"national law" indicated in Article 16 of the Civil Code
cannot possibly apply to general American law. There
is no such law governing the validity of testamentary
provisions in the United States. Each State of the
union has its own law applicable to its citizens and in
force only within the State. It can therefore refer to no
other than the law of the State of which the decedent
was a resident. Second, there is no showing that the
application of the renvoi doctrine is called for or
required by New York State law.
The trial court held that the will was intrinsically invalid
since it contained dispositions in favor of Alice, who in
the trial courts opinion was a mere paramour. The
trial court threw the will out, leaving Alice, and her two
children, Raul and Luz, with nothing.
The Court of Appeals also disregarded the will. It
declared Alice entitled to one half (1/2) of whatever
property she and Lorenzo acquired during their
cohabitation, applying Article 144 of the Civil Code of
the Philippines. The hasty application of Philippine law
and the complete disregard of the will, already
probated as duly executed in accordance with the
formalities of Philippine law, is fatal, especially in

light of the factual and legal circumstances here

obtaining.
We hold that the divorce obtained by Lorenzo H.
Llorente from his first wife Paula was valid and
recognized in this jurisdiction as a matter of comity.
Now, the effects of this divorce (as to the succession to
the estate of the decedent) are matters best left to the
determination of the trial court.
Whether the will is intrinsically valid and who shall
inherit from Lorenzo are issues best proved by foreign
law which must be pleaded and proved. Whether the
will was executed in accordance with the formalities
required is answered by referring to Philippine law. In
fact, the will was duly probated. Case remanded.
8. Garcia vs. Recio, GR No.138322, 2 October
2001, 366 SCRA 437
FACTS:
Rederick A. Recio, a Filipino, was married to Editha
Samson, an Australian citizen, in Malabon, Rizal, on
March 1, 1987.4 They lived together as husband and
wife in Australia. On May 18, 1989, 5 a decree of
divorce, purportedly dissolving the marriage, was
issued by an Australian family court. Petitioner filed a
Complaint for Declaration of Nullity of Marriage 10 in the
court a quo, on the ground of bigamy respondent
allegedly had a prior subsisting marriage at the time he
married her on January 12, 1994. She claimed that she
learned of respondent's marriage to Editha Samson
only in November, 1997
ISSUE: (1) whether the divorce between respondent
and Editha Samson was proven, and (2) whether
respondent was proven to be legally capacitated to
marry petitioner. Because of our ruling on these two,
there is no more necessity to take up the rest.
HELD:
A divorce obtained abroad by an alien may be
recognized in our jurisdiction, provided such decree is
valid according to the national law of the foreigner.
However, the divorce decree and the governing
personal law of the alien spouse who obtained the
divorce must be proven. Our courts do not take judicial
notice of foreign laws and judgment; hence, like any
other facts, both the divorce decree and the national
law of the alien must be alleged and proven according
to our law on evidence.
Philippine law does not provide for absolute divorce;
hence, our courts cannot grant it. 21 A marriage
between two Filipinos cannot be dissolved even by a
divorce obtained abroad, because of Articles 15 22 and
1723 of the Civil Code.24 In mixed marriages involving a
Filipino and a foreigner, Article 2625 of the Family Code
allows the former to contract a subsequent marriage in
case the divorce is "validly obtained abroad by the
alien spouse capacitating him or her to remarry." 26 A
divorce obtained abroad by a couple, who are both
aliens, may be recognized in the Philippines, provided
it is consistent with their respective national laws. 27
A comparison between marriage and divorce, as far as
pleading and proof are concerned, can be made. Van
Dorn v. Romillo Jr. decrees that "aliens may obtain
divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their
national law."28 Therefore, before a foreign divorce
decree can be recognized by our courts, the party
pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing
it.29 Presentation solely of the divorce decree is
insufficient.
Before a foreign judgment is given presumptive
evidentiary value, the document must first be
presented and admitted in evidence. 30 A divorce
obtained abroad is proven by the divorce decree itself.
Indeed the best evidence of a judgment is the
judgment itself.31 The decree purports to be a written
act or record of an act of an officially body or tribunal
of a foreign country.32
Under Sections 24 and 25 of Rule 132, on the other
hand, a writing or document may be proven as a public
or official record of a foreign country by either (1) an

official publication or (2) a copy thereof attested 33 by

the officer having legal custody of the document. If the
record is not kept in the Philippines, such copy must be
(a) accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the
record is kept and (b) authenticated by the seal of his
office.34
The divorce decree between respondent and Editha
Samson appears to be an authentic one issued by an
Australian family court.35 However, appearance is not
sufficient; compliance with the aforemetioned rules on
evidence must be demonstrated.
Based on the above records, we cannot conclude that
respondent, who was then a naturalized Australian
citizen, was legally capacitated to marry petitioner on
January 12, 1994. We agree with petitioner's
contention that the court a quo erred in finding that the
divorce decree ipso facto clothed respondent with the
legal capacity to remarry without requiring him to
adduce sufficient evidence to show the Australian
personal law governing his status; or at the very least,
to prove his legal capacity to contract the second
marriage.
9. Republic
vs.
Iyoy,
GR
No.152577,
21
September 2005 NO MORE
FACTS:
Respondent Crasus married Fely on 16 December 1961
at Cebu City. They had five children now all of legal
ages.
After the celebration of their marriage,
respondent Crasus discovered that Fely was hottempered, a nagger and extravagant. In 1984, Fely
left the Philippines for the United States of America
(U.S.A.). Barely a year after Fely left for the U.S.A.,
respondent Crasus received a letter from her
requesting that he sign the enclosed divorce papers;
he disregarded the said request. Respondent Crasus
learned, through the letters sent by Fely to their
children, that Fely got married to an American, with
whom she eventually had a child. Respondent Crasus
filed Complaint that Felys acts brought danger and
dishonor to the family, and clearly demonstrated her
psychological incapacity to perform the essential
obligations of marriage
ISSUE: WON psychological incapacity is the right
ground. WON art.26 applicable.
HELD:
The totality of evidence presented during trial is
insufficient to support the finding of psychological
incapacity of Fely.
Article 26 of the Family Code provides:
Art. 26. All marriages solemnized outside the
Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there
as such, shall also be valid in this country, except
those prohibited under Articles 35(1), (4), (5) and (6),
36, 37 and 38.
WHERE A MARRIAGE BETWEEN A FILIPINO
CITIZEN AND A FOREIGNER IS VALIDLY CELEBRATED
AND A DIVORCE IS THEREAFTER VALIDLY OBTAINED
ABROAD BY THE ALIEN SPOUSE CAPACITATING HIM OR
HER TO REMARRY, THE FILIPINO SPOUSE SHALL
LIKEWISE HAVE CAPACITY TO REMARRY UNDER
PHILIPPINE LAW.
The rationale behind the second paragraph of
the above-quoted provision is to avoid the absurd and
unjust situation of a Filipino citizen still being married
to his or her alien spouse, although the latter is no
longer married to the Filipino spouse because he or
she has obtained a divorce abroad. In the case at
bench, the defendant has undoubtedly acquired her
American husbands citizenship and thus has become
an alien as well. This Court cannot see why the

benefits of Art. 26 aforequoted can not be extended to

a Filipino citizen whose spouse eventually embraces
another citizenship and thus becomes herself an alien.
It would be the height of unfairness if, under
these circumstances, plaintiff would still be considered
as married to defendant, given her total incapacity to
honor her marital covenants to the former. To
condemn plaintiff to remain shackled in a marriage
that in truth and in fact does not exist and to remain
married to a spouse who is incapacitated to discharge
essential marital covenants, is verily to condemn him
to a perpetual disadvantage which this Court finds
abhorrent and will not countenance. Justice dictates
that plaintiff be given relief by affirming the trial
courts declaration of the nullity of the marriage of the
parties.
As it is worded, Article 26, paragraph 2, refers to a
special situation wherein one of the couple getting
married is a Filipino citizen and the other a foreigner at
the time the marriage was celebrated. By its plain
and literal interpretation, the said provision
cannot be applied to the case of respondent
Crasus and his wife Fely because at the time Fely
obtained her divorce, she was still a Filipino
citizen. Although the exact date was not established,
Fely herself admitted in her Answer filed before the RTC
that she obtained a divorce from respondent Crasus
sometime after she left for the United States in 1984,
after which she married her American husband in
1985. In the same Answer, she alleged that she had
been an American citizen since 1988. At the time she
filed for divorce, Fely was still a Filipino citizen, and
pursuant to the nationality principle embodied in
Article 15 of the Civil Code of the Philippines, she was
still bound by Philippine laws on family rights and
duties, status, condition, and legal capacity, even when
she was already living abroad. Philippine laws, then
and even until now, do not allow and recognize divorce
between Filipino spouses. Thus, Fely could not have
validly obtained a divorce from respondent Crasus.
10. Republic vs.
October 2005

Obrecido,

GR

No.154380,

FACTS:
Cipriano Orbecido III married Lady Myros M.
Villanueva at Ozamis City. They had with a son and a
daughter. Ciprianos wife left for the United States
bringing along their son Kristoffer and he discovered
that his wife had been naturalized as an American
citizen. He learned from his son that his wife had
obtained a divorce decree and then married a certain
Innocent Stanley. She, Stanley and her child by him
currently live at California. Cipriano thereafter filed
petition for authority to remarry.
ISSUE: Given a valid marriage between two Filipino
citizens, where one party is later naturalized as a
foreign citizen and obtains a valid divorce decree
capacitating him or her to remarry, can the Filipino
spouse likewise remarry under Philippine law?
HELD:
ART. 26. All marriages solemnized outside the
Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there
as such, shall also be valid in this country, except
those prohibited under Articles 35(1), (4), (5) and (6),
36, 37 and 38.
Where a marriage between a Filipino citizen and a
foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law.
(Emphasis supplied)
On its face, the foregoing provision does not appear to
govern the situation presented by the case at hand. It

seems to apply only to cases where at the time of the

celebration of the marriage, the parties are a Filipino
citizen and a foreigner. The instant case is one where
at the time the marriage was solemnized, the parties
were two Filipino citizens, but later on, the wife was
naturalized as an American citizen and subsequently
obtained a divorce granting her capacity to remarry,
and indeed she remarried an American citizen while
residing in the U.S.A.
Does the same principle apply to a case where
at the time of the celebration of the marriage, the
parties were Filipino citizens, but later on, one of them
obtains a foreign citizenship by naturalization?
The jurisprudential answer lies latent in the
1998 case of Quita v. Court of Appeals.[11] In Quita,
the parties were, as in this case, Filipino citizens when
they got married. The wife became a naturalized
American citizen in 1954 and obtained a divorce in the
same year. The Court therein hinted, by way of obiter
dictum, that a Filipino divorced by his naturalized
foreign spouse is no longer married under Philippine
law and can thus remarry.
Thus, taking into consideration the legislative intent
and applying the rule of reason, we hold that
Paragraph 2 of Article 26 should be interpreted to
include cases involving parties who, at the time of the
celebration of the marriage were Filipino citizens, but
later on, one of them becomes naturalized as a foreign
citizen and obtains a divorce decree. The Filipino
spouse should likewise be allowed to remarry as if the
other party were a foreigner at the time of the
solemnization of the marriage. To rule otherwise would
be to sanction absurdity and injustice. Where the
interpretation of a statute according to its exact and
literal import would lead to mischievous results or
contravene the clear purpose of the legislature, it
should be construed according to its spirit and reason,
disregarding as far as necessary the letter of the law.
A statute may therefore be extended to cases not
within the literal meaning of its terms, so long as they
come within its spirit or intent
If we are to give meaning to the legislative
intent to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who, after
obtaining a divorce is no longer married to the Filipino
spouse, then the instant case must be deemed as
coming within the contemplation of Paragraph 2 of
Article 26.
In view of the foregoing, we state the twin
elements for the application of Paragraph 2 of Article
26 as follows:
1. There is a valid marriage that has been
celebrated between a Filipino citizen
and a foreigner; and
2.
A valid divorce is obtained abroad by
the alien spouse capacitating him or
her to remarry.
The reckoning point is not the citizenship of the
parties at the time of the celebration of the marriage,
but their citizenship at the time a valid divorce is
obtained abroad by the alien spouse capacitating the
latter to remarry.
In this case, when Ciprianos wife was
naturalized as an American citizen, there was still a
valid marriage that has been celebrated between her
and Cipriano. As fate would have it, the naturalized
alien wife subsequently obtained a valid divorce
capacitating her to remarry. Clearly, the twin requisites
for the application of Paragraph 2 of Article 26 are both
present in this case. Thus Cipriano, the divorced
Filipino spouse, should be allowed to remarry.
11. Perkins vs. Dizon, 69 Phil. 186
FACTS:
Eugene Arthur Perkins, instituted an action in the Court
of First Instance of Manila against the Benguet
Consolidated Mining Company for dividends amounting
to P71,379.90 on 52,874 shares of stock registered in

his name, payment of which was being withheld by the

company; and, for the recognition of his right to the
control and disposal of said shares, to the exclusion of
all others.
ISSUE:
Whether or not the Court of First Instance of Manila has
acquired jurisdiction over the person of the present
petitioner
as
a
non-resident
defendant,
or,
notwithstanding the want of such jurisdiction, whether
or not said court may validly try the case.

activities therein. The situs of the shares is in the

jurisdiction where the corporation is created, whether
the certificated evidencing the ownership of those
shares are within or without that jurisdiction. Under
these circumstances, we hold that the action thus
brought is quasi in rem, for while the judgement that
may be rendered therein is not strictly a judgment in
rem, "it fixes and settles the title to the property in
controversy and to that extent partakes of the nature
of the judgment in rem." (50 C.J., p 503). As held by the
Supreme Court of the United States in Pennoyer v. Neff
(supra);

HELD:
Section 398 of our Code of Civil Procedure provides
that when a non-resident defendant is sued in the
Philippine courts and it appears, by the complaint or by
affidavits, that the action relates to real or personal
property within the Philippines in which said defendant
has or claims a lien or interest, actual or contingent, or
in which the relief demanded consists, wholly or in
part, in excluding such person from any interest
therein, service of summons maybe made by
publication.
The reason for the rule that Philippine courts
cannot acquire jurisdiction over the person of a nonresident, as laid down by the Supreme Court of the
United States in Pennoyer v. Neff, supra, may be found
in a recognized principle of public law to the effect that
"no State can exercise direct jurisdiction and authority
over persons or property without its territory. Story,
Confl. L., ch. 2; Wheat, Int. L., pt. 2, ch. 2. The several
States are of equal dignity and authority, and the
independence of one implies the exclusion of power
from all others. And so it is laid down by jurists, as an
elementary principle, that the laws of one State have
no operation outside of its territory, except so far as is
allowed by comity; and that no tribunal established by
it can extend its process beyond that territory so as to
subject either persons or property to its decisions. "Any
exertion of authority of this sort beyond this limit," says
Story, "is a mere nullity, and incapable of binding such
persons or property in any other tribunals." Story,
Confl. L., sec. 539." (Pennoyer v. Neff, 95 U.S., 714; 24
Law. ed., 565, 568-569.).
When, however, the action relates to property
located in the Philippines, the Philippine courts may
validly try the case, upon the principle that a "State,
through its tribunals, may subject property situated
within its limits owned by non-residents to the payment
of the demand of its own citizens against them; and
the exercise of this jurisdiction in no respect infringes
upon the sovereignty of the State where the owners
are domiciled. Every State owes protection to its
citizens; and, when non-residents deal with them, it is
a legitimate and just exercise of authority to hold and
appropriate any property owned by such non-residents
to satisfy the claims of its citizens. It is in virtue of the
State's jurisdiction over the property of the nonresident situated within its limits that its tribunals can
inquire into the non-resident's obligations to its own
citizens, and the inquiry can then be carried only to the
extent necessary to control the disposition of the
property. If the non-resident has no property in the
State, there is nothing upon which the tribunals can
adjudicate." (Pennoyer v. Neff, supra.)
In the instant case, there can be no question that
the action brought by Eugene Arthur Perkins in his
amended complaint against the petitioner, Idonah
Slade Perkins, seeks to exclude her from any interest in
a property located in the Philippines. That property
consists in certain shares of stocks of the Benguet
Consolidated Mining Company, a sociedad anonima,
organized in the Philippines under the provisions of the
Spanish Code of Commerce, with its principal office in
the City of Manila and which conducts its mining

It is true that, in a strict sense, a proceeding in

rem is one taken directly against property, and
has for its object the disposition of the
property, without reference to the title of
individual claimants; but , in a large and more
general sense, the terms are applied to actions
between parties, where the direct object is to
reach and dispose of property owned by them,
or of some interest therein.
The action being in quasi in rem, The Court of
First Instance of Manila has jurisdiction over the person
of the non-resident. In order to satisfy the
constitutional requirement of due process, summons
has been served upon her by publication. There is no
question as to the adequacy of publication made nor as
to the mailing of the order of publication to the
petitioner's last known place of residence in the United
States. But, of course, the action being quasi in rem
and notice having be made by publication, the relief
that may be granted by the Philippine court must be
confined to the res, it having no jurisdiction to render a
personal judgment against the non-resident. In the
amended complaint filed by Eugene Arthur Perkins, no
money judgment or other relief in personam is prayed
for against the petitioner. The only relief sought therein
is that she be declared to be without any interest in the
shares in controversy and that she be excluded from
any claim thereto.
12. Philsec Investment Corporation vs. CA, 274
SCRA 102
This
case
presents
for
determination
the
conclusiveness of a foreign judgment upon the rights of
the parties under the same cause of action asserted in
a case in our local court.
FACTS:
Private respondent Ventura O. Ducat obtained separate
loans from petitioners AYALA and PHILSEC) in the sum
of US$2,500,000.00, secured by shares of stock owned
by Ducat with a market value of P14,088,995.00. In
order to facilitate the payment of the loans, private
respondent assumed Ducat's obligation under an
Agreement, executed a Warranty Deed with Vendor's
Lien by which it sold to petitioner ATHONA a parcel of
land
in
Harris
County,
Texas,
U.S.A.,
for
US$2,807,209.02, while PHILSEC and AYALA extended a
loan to ATHONA in the amount of US$2,500,000.00 as
initial payment. The balance of US$307,209.02 was to
be paid by means of a promissory note executed by
ATHONA in favor of 1488, Inc..
As ATHONA failed to pay the interest on the balance of
US$307,209.02, the entire amount covered by the note
became due and demandable. Accordingly, on October
17, 1985, private respondent 1488, Inc. sued
petitioners PHILSEC, AYALA, and ATHONA in the United
States for payment of the balance of US$307,209.02
and for damages for breach of contract and for fraud
allegedly perpetrated by petitioners in misrepresenting
the marketability of the shares of stock delivered to
1488, Inc. under the Agreement. For this reason, the
U.S. court imposed so-called Rule 11 sanctions on
PHILSEC and AYALA and ordered them to pay damages
to Guevarra.

On April 10, 1987, while Civil Case No. H-86-440 was

pending in the United States, petitioners filed a
complaint "For Sum of Money with Damages and Writ
of Preliminary Attachment" against private respondents
in the Regional Trial Court of Makati, where it was
docketed as Civil Case No. 16563. The complaint
reiterated the allegation of petitioners in their
respective counterclaims in Civil Action No. H-86-440 of
the United States District Court of Southern Texas.
ISSUE: WON litis pendency and forum non conveniens
applicable. WON Civil Case No. 16536 is barred by the
judgment of the U.S. court.
HELD:
It was error therefore for the Court of Appeals to
summarily rule that petitioners' action is barred by the
principle of res judicata. Petitioners in fact questioned
the jurisdiction of the U.S. court over their persons, but
their claim was brushed aside by both the trial court
and the Court of Appeals. 13
Moreover, the Court notes that on April 22, 1992, 1488,
Inc. and Daic filed a petition for the enforcement of
judgment in the Regional Trial Court of Makati, where it
was docketed as Civil Case No. 92-1070 and assigned
to Branch 134, although the proceedings were
suspended because of the pendency of this case. To
sustain the appellate court's ruling that the foreign
judgment constitutes res judicata and is a bar to the
claim of petitioners would effectively preclude
petitioners from repelling the judgment in the case for
enforcement. An absurdity could then arise: a foreign
judgment is not subject to challenge by the plaintiff
against whom it is invoked, if it is pleaded to resist a
claim as in this case, but it may be opposed by the
defendant if the foreign judgment is sought to be
enforced against him in a separate proceeding. This is
plainly untenable. It has been held therefore that:
[A] foreign judgment may not be enforced if it
is not recognized in the jurisdiction where
affirmative relief is being sought. Hence, in the
interest of justice, the complaint should be
considered as a petition for the recognition of
the Hongkong judgment under Section 50 (b),
Rule 39 of the Rules of Court in order that the
defendant, private respondent herein, may
present evidence of lack of jurisdiction, notice,
collusion, fraud or clear mistake of fact and
law, if applicable. 14
Accordingly, to insure the orderly administration of
justice, this case and Civil Case No. 92-1070 should be
consolidated. 15 After all, the two have been filed in the
Regional Trial Court of Makati, albeit in different salas,
this case being assigned to Branch 56 (Judge Fernando
V. Gorospe), while Civil Case No. 92-1070 is pending in
Branch 134 of Judge Ignacio Capulong. In such
proceedings, petitioners should have the burden of
impeaching the foreign judgment and only in the event
they succeed in doing so may they proceed with their
action against private respondents.
Second. Nor is the trial court's refusal to take
cognizance of the case justifiable under the principle of
forum non conveniens. First, a motion to dismiss is
limited to the grounds under Rule 16, 1, which does
not include forum non conveniens. 16 The propriety of
dismissing a case based on this principle requires a
factual determination, hence, it is more properly
considered a matter of defense. Second, while it is
within the discretion of the trial court to abstain from
assuming jurisdiction on this ground, it should do so
only after "vital facts are established, to determine
whether special circumstances" require the court's
desistance. 17
In this case, the trial court abstained from taking
jurisdiction solely on the basis of the pleadings filed by
private respondents in connection with the motion to
dismiss. It failed to consider that one of the plaintiffs
(PHILSEC) is a domestic corporation and one of the

defendants (Ventura Ducat) is a Filipino, and that it was

the extinguishment of the latter's debt which was the
object of the transaction under litigation. The trial court
arbitrarily dismissed the case even after finding that
Ducat was not a party in the U.S. case.
Third. It was error we think for the Court of Appeals and
the trial court to hold that jurisdiction over 1488, Inc.
and Daic could not be obtained because this is an
action in personam and summons were served by
extraterritorial service. Rule 14, 17 on extraterritorial
service provides that service of summons on a nonresident defendant may be effected out of the
Philippines by leave of Court where, among others,
"the property of the defendant has been attached
within the Philippines." 18 It is not disputed that the
properties, real and personal, of the private
respondents had been attached prior to service of
summons under the Order of the trial court dated April
20, 1987.
13. Raytheon International vs. Stockton Rouzie,
GR. No. 162894, 26 February 2008
FACTS:
Respondent filed before (NLRC) a suit against BMSI and
Rust International, Inc. (RUST), Rodney C. Gilbert and
Walter G. Browning for alleged nonpayment of
commissions, illegal termination and breach of
employment contract. respondent, then a resident of
La Union, instituted an action for damages before the
(RTC) of Bauang, La Union. The Complaint named as
defendants herein petitioner Raytheon International,
Inc. as well as BMSI and RUST, the two corporations
impleaded in the earlier labor case. Petitioner moved to
dismiss on grounds of forum non convenies and no
cause of action.
ISSUE:
WON CA ERRED IN REFUSING TO DISMISS THE
COMPLAINT FOR FAILURE TO STATE A CAUSE OF
ACTION AGAINST RAYTHEON INTERNATIONAL, INC. and
WON CA ERRED IN REFUSING TO DISMISS THE
COMPLAINT ON THE GROUND OF FORUM NON
CONVENIENS.
HELD:
Recently in Hasegawa v. Kitamura,26 the Court outlined
three consecutive phases involved in judicial resolution
of conflicts-of-laws problems, namely: jurisdiction,
choice of law, and recognition and enforcement of
judgments. Thus, in the instances 27 where the Court
held that the local judicial machinery was adequate to
resolve controversies with a foreign element, the
following requisites had to be proved: (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; and (3) that the Philippine Court has or is
likely to have the power to enforce its decision. 28
On the matter of jurisdiction over a conflicts-of-laws
problem where the case is filed in a Philippine court
and where the court has jurisdiction over the subject
matter, the parties and the res, it may or can proceed
to try the case even if the rules of conflict-of-laws or
the convenience of the parties point to a foreign forum.
This is an exercise of sovereign prerogative of the
country where the case is filed. 29
Jurisdiction over the nature and subject matter of an
action is conferred by the Constitution and the law 30
and by the material allegations in the complaint,
irrespective of whether or not the plaintiff is entitled to
recover all or some of the claims or reliefs sought
therein.31 Civil Case No. 1192-BG is an action for
damages arising from an alleged breach of contract.
Undoubtedly, the nature of the action and the amount
of damages prayed are within the jurisdiction of the
RTC.

As regards jurisdiction over the parties, the trial court

acquired jurisdiction over herein respondent (as party
plaintiff) upon the filing of the complaint. On the other
hand, jurisdiction over the person of petitioner (as
party defendant) was acquired by its voluntary
appearance in court.32
That the subject contract included a stipulation that
the same shall be governed by the laws of the State of
Connecticut does not suggest that the Philippine
courts, or any other foreign tribunal for that matter, are
precluded from hearing the civil action. Jurisdiction and
choice of law are two distinct concepts. Jurisdiction
considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further
question whether the application of a substantive law
which will determine the merits of the case is fair to
both parties.33 The choice of law stipulation will
become relevant only when the substantive issues of
the instant case develop, that is, after hearing on the
merits proceeds before the trial court.
Under the doctrine of forum non conveniens, a court, in
conflicts-of-laws cases, may refuse impositions on its
jurisdiction where it is not the most "convenient" or
available forum and the parties are not precluded from
seeking remedies elsewhere.34 Petitioners averments
of the foreign elements in the instant case are not
sufficient to oust the trial court of its jurisdiction over
Civil Case No. No. 1192-BG and the parties involved.
Moreover, the propriety of dismissing a case based on
the principle of forum non conveniens requires a
factual determination; hence, it is more properly
considered as a matter of defense. While it is within
the discretion of the trial court to abstain from
assuming jurisdiction on this ground, it should do so
only after vital facts are established, to determine
whether special circumstances require the courts
desistance.
14. The Manila Hotel Corporation vs. NLRC, G.R.
No.120077, 13 october 2000
FACTS:
Private respondent Marcelo Santos was an overseas
worker employed as a printer at the Mazoon Printing
Press, Sultanate of Oman. Subsequently, in June 1988,
he was directly hired by the Palace Hotel, Beijing,
People's Republic of China and later terminated due to
retrenchment.
On February 20, 1990, respondent Santos filed a
complaint for illegal dismissal (NLRC). He prayed
(US$19,923.00) as actual damages.
ISSUE:
WON NLRC is a convenient forum. WON MCH Liable.
HELD:
The NLRC was a seriously inconvenient forum. We note
that the main aspects of the case transpired in two
foreign jurisdictions and the case involves purely
foreign elements. The only link that the Philippines has
with the case is that respondent Santos is a Filipino
citizen. The Palace Hotel and MHICL are foreign
corporations. Not all cases involving our citizens can be
tried here.
The employment contract. Respondent Santos was
hired directly by the Palace Hotel, a foreign employer,
through correspondence sent to the Sultanate of
Oman, where respondent Santos was then employed.
He was hired without the intervention of the POEA or
any
authorized
recruitment
agency
of
the
government.36
Under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case

if it chooses to do so provided: (1) that the Philippine

court is one to which the parties may conveniently
resort to; (2) that the Philippine court is in a position to
make an intelligent decision as to the law and the
facts; and (3) that the Philippine court has or is likely to
have power to enforce its decision. 37 The conditions are
unavailing in the case at bar.
Not Convenient. We fail to see how the NLRC is a
convenient forum given that all the incidents of the
case from the time of recruitment, to employment to
dismissal occurred outside the Philippines. The
inconvenience is compounded by the fact that the
proper defendants, the Palace Hotel and MHICL are not
nationals of the Philippines. Neither .are they "doing
business in the Philippines." Likewise, the main
witnesses, Mr. Shmidt and Mr. Henk are non-residents
of the Philippines.
No power to determine applicable law. Neither can
an intelligent decision be made as to the law governing
the employment contract as such was perfected in
foreign soil. This calls to fore the application of the
principle of lex loci contractus (the law of the place
where the contract was made).38
The employment contract was not perfected in the
Philippines.
Respondent
Santos
signified
his
acceptance by writing a letter while he was in the
Republic of Oman. This letter was sent to the Palace
Hotel in the People's Republic of China.
No power to determine the facts. Neither can the
NLRC determine the facts surrounding the alleged
illegal dismissal as all acts complained of took place in
Beijing, People's Republic of China. The NLRC was not
in a position to determine whether the Tiannamen
Square incident truly adversely affected operations of
the Palace Hotel as to justify respondent Santos'
retrenchment.
Principle of effectiveness, no power to execute
decision. Even assuming that a proper decision
could be reached by the NLRC, such would not have
any binding effect against the employer, the Palace
Hotel. The Palace Hotel is a corporation incorporated
under the laws of China and was not even served with
summons. Jurisdiction over its person was not
acquired.
This is not to say that Philippine courts and agencies
have no power to solve controversies involving foreign
employers. Neither are we saying that we do not have
power over an employment contract executed in a
foreign country. If Santos were an "overseas contract
worker", a Philippine forum, specifically the POEA, not
the NLRC, would protect him.39 He is not an "overseas
contract worker" a fact which he admits with
conviction.40
Even assuming that the NLRC was the proper forum,
even on the merits, the NLRC's decision cannot be
sustained.
II. MHC Not Liable
It is basic that a corporation has a personality separate
and distinct from those composing it as well as from
that of any other legal entity to which it may be
related.44 Clear and convincing evidence is needed to
pierce the veil of corporate fiction. 45 In this case, we
find no evidence to show that MHICL and MHC are one
and the same entity.
Considering that the NLRC was forum non-conveniens
and considering further that no employer-employee
relationship existed between MHICL, MHC and

respondent Santos, Labor Arbiter Ceferina J. Diosana

clearly had no jurisdiction over respondent's claim in
NLRC NCR Case No. 00-02-01058-90.
15. Bank of America vs. American Realty Corp.,
GR No. 133876, 29 December 1999
FACTS:
BANTSA and BAIL on several occasions granted three
major multi-million United States (US) Dollar loans to
the following corporate borrowers: (1) Liberian
Transport Navigation, S.A.; (2) El Challenger S.A. and
(3) Eshley Compania Naviera S.A. all of which are
existing under and by virtue of the laws of the Republic
of Panama and are foreign affiliates of private
respondent.
Due to the default in the payment of the loan
amortizations, BANTSA and the corporate borrowers
signed and entered into restructuring agreements. As
additional security for the restructured loans, private
respondent ARC as third party mortgagor executed
two real estate mortgages.Eventually, the corporate
borrowers defaulted in the payment of the restructured
loans prompting petitioner BANTSA to file civil actions
before foreign courts for the collection of the principal
loan. On 16 December 1992, petitioner BANTSA filed
before the Office of the Provincial Sheriff of Bulacan,
Philippines an application for extrajudicial foreclosure 6
of real estate mortgage.
ISSUE: Does a mortgage-creditor waive its remedy to
foreclose the real estate mortgage constituted over a
third party mortgagor's property situated in the
Philippines by filing an action for the collection of the
principal loan before foreign courts?
HELD:
Certainly, this Court finds petitioner's arguments
untenable and upholds the jurisprudence laid down in
Bachrach 15 and similar cases adjudicated thereafter,
thus:
In the absence of express statutory provisions, a
mortgage creditor may institute against the mortgage
debtor either a personal action or debt or a real action
to foreclose the mortgage. In other words, he may he
may pursue either of the two remedies, but not both.
By such election, his cause of action can by no means
be impaired, for each of the two remedies is complete
in itself. Thus, an election to bring a personal action will
leave open to him all the properties of the debtor for
attachment and execution, even including the
mortgaged property itself. And, if he waives such
personal action and pursues his remedy against the
mortgaged property, an unsatisfied judgment thereon
would still give him the right to sue for a deficiency
judgment, in which case, all the properties of the
defendant, other than the mortgaged property, are
again open to him for the satisfaction of the deficiency.
In either case, his remedy is complete, his cause of
action undiminished, and any advantages attendant to
the pursuit of one or the other remedy are purely
accidental and are all under his right of election. On
the other hand, a rule that would authorize the plaintiff
to bring a personal action against the debtor and
simultaneously or successively another action against
the mortgaged property, would result not only in
multiplicity of suits so offensive to justice (Soriano vs.
Enriques, 24 Phil. 584) and obnoxious to law and equity
(Osorio vs. San Agustin, 25 Phil., 404), but also in
subjecting the defendant to the vexation of being sued
in the place of his residence or of the residence of the
plaintiff, and then again in the place where the
property lies.

In Danao vs. Court of Appeals, 16 this Court, reiterating

jurisprudence enunciated in Manila Trading and Supply
17
Co
vs.
Co
Kim
and
Movido
vs.
18
RFC, invariably held:
. . . The rule is now settled that a mortgage creditor
may elect to waive his security and bring, instead, an
ordinary action to recover the indebtedness with the
right to execute a judgment thereon on all the
properties of the debtor, including the subject matter
of the mortgage . . . , subject to the qualification that if
he fails in the remedy by him elected, he cannot
pursue further the remedy he has waived.
Anent real properties in particular, the Court has laid
down the rule that a mortgage creditor may institute
against the mortgage debtor either a personal action
for debt or a real action to foreclose the mortgage. 19
In our jurisdiction, the remedies available to the
mortgage creditor are deemed alternative and not
cumulative. Notably, an election of one remedy
operates as a waiver of the other. For this purpose, a
remedy is deemed chosen upon the filing of the suit for
collection or upon the filing of the complaint in an
action for foreclosure of mortgage, pursuant to the
provision of Rule 68 of the of the 1997 Rules of Civil
Procedure. As to extrajudicial foreclosure, such remedy
is deemed elected by the mortgage creditor upon filing
of the petition not with any court of justice but with the
Office of the Sheriff of the province where the sale is to
be made, in accordance with the provisions of Act No.
3135, as amended by Act No. 4118.
In the case at bench, private respondent ARC
constituted real estate mortgages over its properties as
security for the debt of the principal debtors. By doing
so, private respondent subjected itself to the liabilities
of a third party mortgagor. Under the law, third persons
who are not parties to a loan may secure the latter by
pledging or mortgaging their own property. 20
Notwithstanding, there is no legal provision nor
jurisprudence in our jurisdiction which makes a third
person who secures the fulfillment of another's
obligation by mortgaging his own property, to be
solidarily bound with the principal obligor. The
signatory to the principal contractloanremains to
be primarily bound. It is only upon default of the latter
that the creditor may have recourse on the mortgagors
by foreclosing the mortgaged properties in lieu of an
action for the recovery of the amount of the loan. 21
Contrary to petitioner's arguments, we therefore
reiterate the rule, for clarity and emphasis, that the
mere act of filing of an ordinary action for collection
operates as a waiver of the mortgage-creditor's
remedy to foreclose the mortgage. By the mere filing
of the ordinary action for collection against the
principal debtors, the petitioner in the present case is
deemed to have elected a remedy, as a result of which
a waiver of the other necessarily must arise.
Corollarily, no final judgment in the collection suit is
required for the rule on waiver to apply.
In the case at bar, petitioner BANTSA only has one
cause of action which is non-payment of the debt.
Nevertheless, alternative remedies are available for its
enjoyment and exercise. Petitioner then may opt to
exercise only one of two remedies so as not to violate
the rule against splitting a cause of action.
16. Yao Kee, et al. vs. Aida Sy-Gonzales, GR
No.55960, 24 November 1988
FACTS:
Sy Kiat, a Chinese national. died on January 17, 1977 in

Caloocan City where he was then residing, leaving

behind real and personal properties here in the
Philippines worth P300,000.00 more or less. Thereafter,
Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and
Rodolfo Sy filed a petition for the grant of letters of
administration and opposed by The petition was
opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and Sy
Yun Chen who alleged that: (a) Yao Kee is the lawful
wife of Sy Kiat whom he married on January 19, 1931 in
China; (b) the other oppositors are the legitimate
children of the deceased with Yao Kee; and, (c) Sze
Sook Wah is the eldest among them and is competent,
willing and desirous to become the administratrix of
the estate of Sy Kiat.
ISSUE:
WON CA ERRED IN DECLARING THE MARRIAGE OF SY
KIAT TO YAO YEE AS NOT HAVE BEEN PROVEN VALID IN
ACCORDANCE WITH LAWS OF THE PEOPLE'S REPUBLIC
OF CHINA and WON CA ERRED IN DECLARING AIDA SYGONZALES, MANUEL SY, TERESITA SY-BERNABE AND
RODOLFO SY AS NATURAL CHILDREN OF SY KIAT WITH
ASUNCION GILLEGO.
HELD:
These evidence may very well prove the fact of
marriage between Yao Kee and Sy Kiat. However, the
same do not suffice to establish the validity of said
marriage in accordance with Chinese law or custom.
Custom is defined as "a rule of conduct formed by
repetition of acts, uniformly observed (practiced) as a
social rule, legally binding and obligatory". The law
requires that "a custom must be proved as a fact,
according to the rules of evidence" [Article 12, Civil
Code.] On this score the Court had occasion to state
that "a local custom as a source of right can not be
considered by a court of justice unless such custom is
properly established by competent evidence like any
other fact" The same evidence, if not one of a higher
degree, should be required of a foreign custom.
The law on foreign marriages is provided by Article 71
of the Civil Code which states that:
Art. 71. All marriages performed outside the Philippines
in accordance with the laws in force in the country
where they were performed and valid there as such,
shall also be valid in this country, except bigamous,
Polygamous, or incestuous marriages, as determined
by Philippine law. (Emphasis supplied.) ***
Construing this provision of law the Court has held that
to establish a valid foreign marriage two things must
be proven, namely: (1) the existence of the foreign law
as a question of fact; and (2) the alleged foreign
marriage by convincing evidence.
In proving a foreign law the procedure is provided in
the Rules of Court. With respect to an unwritten foreign
law, Rule 130 section 45 states that:
SEC. 45. Unwritten law.The oral testimony of
witnesses, skilled therein, is admissible as evidence of
the unwritten law of a foreign country, as are also
printed and published books of reports of decisions of
the courts of the foreign country, if proved to be
commonly admitted in such courts.
Proof of a written foreign law, on the other hand, is
provided for under Rule 132 section 25, thus:
SEC. 25. Proof of public or official record.An official
record or an entry therein, when admissible for any
purpose, may be evidenced by an official publication
thereof or by a copy attested by the officer having the

legal custody of the record, or by his deputy, and

accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a
secretary of embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer
in the foreign service of the Philippines stationed in the
foreign country in which the record is kept and
authenticated by the seal of his office.
The Court has interpreted section 25 to include
competent evidence like the testimony of a witness to
prove the existence of a written foreign law.
In the case at bar petitioners did not present any
competent evidence relative to the law and custom of
China on marriage. The testimonies of Yao and Gan
Ching cannot be considered as proof of China's law or
custom on marriage not only because they are
self-serving evidence, but more importantly, there is no
showing that they are competent to testify on the
subject matter. For failure to prove the foreign law or
custom, and consequently, the validity of the marriage
in accordance with said law or custom, the marriage
between Yao Kee and Sy Kiat cannot be recognized in
this jurisdiction.
Well-established in this jurisdiction is the principle that
Philippine courts cannot take judicial notice of foreign
laws. They must be alleged and proved as any other
fact.
17. Recto vs. Harden,
November 1956

GR

No.

L-6897,

29

FACTS:
Atty. Recto was the counsel of Mrs. Harden pursuant to
a CONTRACT OF PROFESSIONAL SERVICES and to which
Recto represented her in the case Esperanza P. de
Harden vs. Fred M. Harden and Jose Salumbides.
Defendants-Appellants, in turn, moved for the dismissal
of the case, to which Appellee objected. Acting upon
the issues raised in such motion for dismissal and in
Appellees motion to establish and enforce his charging
lien, as counsel for Mrs. Harden The lower court
rendered a decision dated April 30, 1953, adopting
substantially said report of the commissioner who
recommends that Atty. Claro M. Recto be paid the
equivalent amount of 20% of Esperanza P. de Hardens
share of the conjugal properties or the sum of
P369,410.04 as his contingent fee for services
rendered in her behalf but increasing the contingent
fee to P384,110.97. Hence, this appeal taken by Mr.
and Mrs. Harden.
ISSUES:
WON contract of services is void upon the ground: (1)
that Mrs. Harden cannot bind the conjugal partnership
without her husbands consent; (2) that Article 1491 of
the Civil Code of the Philippines in effect prohibits
contingent fees; (3) that the contract in question has
for its purpose to secure a decree of divorce, allegedly
in violation of Articles 1305, 1352 and 1409 of the Civil
Code of the Philippines; (4) that the terms of said
contract are harsh, inequitable and oppressive.
HELD:
The first objection has no foundation in fact, for the
contract in dispute does not seek to bind the conjugal
partnership. By virtue of said contract, Mrs. Harden
merely bound herself or assumed the personal
obligation to pay, by way of contingent fees, 20% of
her share in said partnership. The contract neither
gives, nor purports to give, to the Appellee any right
whatsoever, personal or real, in and to her aforesaid
share. The amount thereof is simply a basis for the
computation of said fees.

For the same reason, the second objection is, likewise,

untenable. Moreover, it has already been held that
contingent fees are not prohibited in the Philippines
and are impliedly sanctioned by our Cannons (No. 13)
of Professional Ethics.
cralaw in the United States, the great weight of
authority recognizes the validity of contracts for
contingent fees, provided such contracts are not in
contravention of public policy, and it is only when the
attorney has taken an unfair or unreasonable
advantage of his client that such a claim is
condemned.
Needless to say, there is absolutely nothing in the
records before us to show that Appellee herein had, in
any manner, taken an unfair or unreasonable
advantage of his client Mrs. Harden.
The third objection is not borne out, either by the
language of the contract between them, or by the
intent of the parties thereto. Its purpose was not to
secure a divorce, or to facilitate or promote the
procurement of a divorce. It merely sought to protect
the interest of Mrs. Harden in the conjugal partnership,
during the pendency of a divorce suit she intended to
file in the United States. What is more, inasmuch as Mr.
and Mrs. Harden are admittedly citizens of the United
States, their status and the dissolution thereof are
governed pursuant to Article 9 of the Civil Code of
Spain (which was in force in the Philippines at the time
of the execution of the contract in question) and Article
15 of the Civil Code of the Philippines by the laws of
the United States, which sanction divorce. In short, the
contract of services, between Mrs. Harden and herein
Appellee, is not contrary to law, morals, good customs,
public order or public policy.
The last objection is based upon principles of equity,
but, pursuant thereto, one who seeks equity must
come with clean hands and Appellants have not done
so, for the circumstances surrounding the case show,
to our satisfaction, that their aforementioned
agreements, ostensibly for the settlement of the
differences between husband and wife, were made for
the purpose of circumventing or defeating the rights of
herein Appellee, under his above-quoted contract of
services with Mrs. Harden.
In short, considering the character of the services
rendered by the Appellee, the nature and importance
of the issues in said litigations, the amount of labor,
time (1941 to 1952) and trouble involved therein, the
skill displayed in connection with said cases, the value
of the property affected by the controversy, the
professional character and standing of the Appellee,
the risks assumed and the results obtained, we are of
the opinion, and so hold, that the contract of services
in question is neither harsh nor oppressive or
inequitable.
In other words, the occurrence, within the time
contemplated by the parties bearing in mind the
nature of, and the circumstances under which they
entered into, said contract of services of the event
upon which the amount of said fees depended, was
rendered impossible by Mrs. Harden. Hence, whether
such event be regarded as a condition or as a period,
she may not insist upon its occurrence, prior to the
enforcement of the rights of the herein Appellee, for
the condition shall be deemed fulfilled when the
obligor voluntarily prevents its fulfillment (Art. 1186,
Civil Code) and the debtor shall lose every right to
make use of the period when he violates any
undertaking, in consideration of which the creditor
agreed to the period.
It should be noted, also, that the compensation agreed
upon for Appellees services, consists of three (3) parts,
namely: (a) 25% of the increase in the allowance of
Mrs. Harden; (b) litis expensae; (c) 20% of her share in
the conjugal partnership. The first part was dealt with
in the first paragraph of their contract of services. The

second and third parts were the object of the second

and third paragraphs, respectively. The first paragraph
limited the rights of Appellee thereunder to two (2)
years, in the event of termination of the case or
amicable settlement thereof within two (2) years from
the filing of the complaint. No such limitation appears
in the second and third paragraphs of said contract.
Hence, the same were intended by the parties to be
fully operative under any and all conditions.
It may not be amiss to add that the value of the
properties involved has been assessed, not summarily,
but after due notice and full dress hearing, in the
course of which both parties introduced testimonial
and documentary evidence.
In conclusion, it appears that the assets of the conjugal
partnership between Mr. and Mrs. Harden are
reasonably valued at P3,841,109.70. One-half (1/2)
thereof, representing the share of Mrs. Harden, is
therefore, worth P1,920,554.85. Twenty percentum
(20%) of this sum is P384,110.97, which is the
contingent fee due to the Appellee, apart from the litis
expensae already paid to him.