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G.R. No.

122191 October 8, 1998 Indonesian authorities agreed to deport Thamer and Allah
and they were again put in service. While, Morada was
Laws Applicable: Art 19 and 21 of Civil Code transferred to Manila.
Lessons Applicable: Conflict of Laws, factual situation, January 14, 1992: Morada was asked to see Mr. Ali Meniewy,
connecting factor, characterization, choice of law, State of Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. He
the most significant relationship brought her to the police station where the police took her
FACTS:Saudi Arabian Airlines (SAUDIA), foreign airlines passport and questioned her about the Jakarta incident. The
corporation doing business in the Philippines and may be police pressured her to drop the case against Thamer and
served summons in agent in Makati, hired Milagros P. Morada Allah. Not until she agreed to do so did the police return her
as a flight attendant for its airlines based in Jeddah, Saudi passport and allowed her to catch the afternoon flight out of
Arabia. Jeddah.

April 27, 1990: While on a lay-over in Jakarta, Indonesia, June 16, 1993: Morada, while in Riyadh Saudi Arabia, was not
Morada went to a disco dance with fellow crew members allowed to board the plane to Manila and instead ordered to
Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi take a later flight to Jeddah to see Mr. Miniewy. Khalid of the
nationals. It was almost morning when they returned to their SAUDIA office brought her to a Saudi court where she was
hotels so they agreed to have breakfast together at the room asked to sign a document written in Arabic. They told her
of Thamer. Shortly after Allah left the room, Thamer that this was necessary to close the case against Thamer and
attempted to rape Morada. Fortunately, a roomboy and Allah but it was actually a notice for her to appear before the
several security personnel heard her cries for help and court on June 27, 1993. Plaintiff then returned to Manila.
rescued her. Indonesian police arrested Thamer and Allah Al- June 27, 1993: SAUDIA's Manila manager, Aslam Saleemi,
Gazzawi, the latter as an accomplice. assured Morada that the investigation was routinary and that
When Morada returned to Jeddah, SAUDIA officials it posed no danger to her so she reported to Miniewy in
interrogated her about the Jakarta incident and requested her Jeddah for further investigation. She was brought to the
to go back to Jakarta to help arrange the release of Thamer Saudi court.
and Allah. In Jakarta, SAUDIA Legal Officers negotiated with June 28, 1993: Saudi judge interrogated Morada through an
the police for the immediate release of the detained crew interpreter about the Jakarta incident for an hour and let her
members but did not succeed. Afraid that she might be go. SAUDIA officers forbidden her to take flight. She was
tricked into something she did not want because of her told to go the Inflight Service Office where her passport was
inability to understand the local dialect, Morado refused to taken and they told her to remain in Jeddah, at the crew
cooperate and declined to sign a blank paper and a quarters, until further orders.
document written in the local dialect. Eventually, SAUDIA
allowed Morada to return to Jeddah but barred her from the July 3, 1993: She was brought to court again and to her
Jakarta flights. astonishment and shock, rendered a decision, translated to
her in English, sentencing her to five months imprisonment
and to 286 lashes. The court tried her, together with Thamer Temporary Restraining Order with the Court of Appeals. TRO
and Allah, and found her guilty of (1) adultery (2) going to a was granted but Writ of Preliminary Injunction was denied.
disco, dancing and listening to the music in violation of
Islamic laws and (3) socializing with the male crew, in CA: Philippines is an appropriate forum considering that the
contravention of Islamic tradition. Amended Complaint's basis for recovery of damages is
Article 21 of the Civil Code, and thus, clearly within the
Failing to seek the assistance of her employer, SAUDIA, she jurisdiction of respondent Court. It further held that certiorari
asked the Philippine Embassy in Jeddah to help her while her is not the proper remedy in a denial of a Motion to Dismiss,
case is on appeal. She continued to workon the domestic inasmuch as the petitioner should have proceeded to trial,
flight of SAUDIA, while Thamer and Allah continued to serve and in case of an adverse ruling, find recourse in an appeal.
in the international flights.
SAUDIA filed its Supplemental Petition for Review with Prayer
Because she was wrongfully convicted, the Prince of Makkah for Temporary Restraining Order:
dismissed the case against her and allowed her to leave
Saudi Arabia. Before her return to Manila, she was CLICK TO SEE MORE
terminated from the service by SAUDIA, without her being
o It is a conflict of laws that must be settled at the outset:
informed of the cause.
Morada's claim for alleged abuse of rights occurred in the
November 23, 1993: Morada filed a Complaint for damages
Kingdom of Saudi Arabia.
against SAUDIA, and Khaled Al-Balawi, its country manager.
Existence of a foreign element qualifies the instant case for
January 19, 1994: SAUDIA filed an Omnibus Motion To
the application of the law of the Kingdom of Saudi Arabia, by
Dismiss on following grounds: (1) that the Complaint states
virtue of the lex loci delicti commissi rule.
no cause of action against SAUDIA (2) that defendant Al-
Balawi is not a real party in interest (3) that the claim or Morada: Amended Complaint is based on Articles 19 and 21
demand set forth in the Complaint has been waived, of the Civil Code which is a matter of domestic law
abandoned or otherwise extinguished and (4) that the trial
court has no jurisdiction to try the case.

After opposition to the motion to dismiss by Morada and reply ISSUE: W/N the RTC of Quezon City has jurisdiction over the
by SAUDIA, Morada filed an Amended Complaint dropping Al- case and it is the proper forum for recovery of damages
Balawi. SAUDIA filed its Manifestation, Motion to Dismiss under Art. 21 of the Civil Code which should govern.
Amended Complaint, subsequently motion for
reconsideration which were all denied.
HELD: YES. petition for certiorari is hereby DISMISSED.
SAUDIA filed its Petition for Certiorari and Prohibition with
REMANDED to RTC of Quezon City, Branch 89 for further
Prayer for Issuance of Writ of Preliminary Injunction and/or
proceedings
Where the factual antecedents satisfactorily establish the Plaintiff may not, by choice of an inconvenient forum,
existence of a foreign element, the problem could present a "vex", "harass", or "oppress" the defendant, e.g. by inflicting
"conflicts" case upon him needless expense or disturbance. but unless the
balance is strongly in favor of the defendant, the plaintiffs
A factual situation that cuts across territorial lines and is choice of forum should rarely be disturbed.
affected by the diverse laws of two or more states is said to
contain a "foreign element". Weighing the relative claims of the parties, the court a quo
found it best to hear the case in the Philippines. Had it
o Morada is a resident Philippine national refused to take cognizance of the case, it would be forcing
o SAUDIA is a resident foreign corporation plaintiff (private respondent now) to seek remedial action
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no
o by virtue of the employment of Morada with the SAUDIA longer maintains substantial connections. That would have
as a flight stewardess, events did transpire during her many caused a fundamental unfairness to her. Moreover, by
occasions of travel across national borders, particularly from hearing the case in the Philippines no unnecessary difficulties
Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, and inconvenience have been shown by either of the parties.
that caused a "conflicts" situation to arise
Trial court possesses jurisdiction over the persons of the
Forms of foreign element: parties

o Simple: one of the parties to a contract is an alien or has o By filing her Complaint and Amended Complaint with the
a foreign domicile, or that a contract between nationals of trial court, private respondent has voluntary submitted
one State involves properties situated in another State herself to the jurisdiction of the court

o Complex o SAUDIA has effectively submitted to the trial court's


jurisdiction by praying for the dismissal of the Amended
Violations of Articles 19 and 21 are actionable, with judicially Complaint on grounds other than lack of jurisdiction.
enforceable remedies in the municipal forum. RTC of Quezon
City possesses jurisdiction over the subject matter of the suit. As to the choice of applicable law, it seeks to answer 2
important questions:
Pragmatic considerations, including the convenience of the
parties, also weigh heavily in favor of the RTC Quezon City o (1) What legal system should control a given situation
assuming jurisdiction: where some of the significant facts occurred in two or more
states
o private interest of the litigant
o (2) to what extent should the chosen legal system
o enforceability of a judgment if one is obtained regulate the situation
o relative advantages and obstacles to a fair trial 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 marriage celebrated, a will signed or a tort committed. The
of deciding which of these two important values should be lex loci actus is particularly important in contracts and torts
stressed.
(5) the place where an act is intended to come into effect,
Before a choice can be made, it is necessary for us to e.g., the place of performance of contractual duties, or the
determine under what category a certain set of facts or rules place where a power of attorney is to be exercised
fall
(6) the intention of the contracting parties as to the law
o "characterization" or the "doctrine of qualification that should govern their agreement, the lex loci intentionis;

process of deciding whether or not the facts relate to the (7) the place where judicial or administrative proceedings
kind of question specified in a conflicts rule are instituted or done. The lex fori the law of the forum
is particularly important because, as we have seen earlier,
purpose: to enable the forum to select the proper law matters of "procedure" not going to the substance of the
Choice-of-law rules invariably consist of: (essential element of claim involved are governed by it; and because the lex fori
conflict rules) applies whenever the content of the otherwise applicable
foreign law is excluded from application in a given case for
o factual situation/relationship or operative fact (such as the reason that it falls under one of the exceptions to the
property right, contract claim); and applications of foreign law; and

starting point of analysis (8) the flag of a ship, which in many cases is decisive of
practically all legal relationships of the ship and of its master
o test or connecting factor or point of contact (such as the or owner as such. It also covers contractual relationships
situs of the res, the place of celebration, the place of particularly contracts of affreightment
performance, or the place of wrongdoing) could be:
Note that one or more circumstances may be present to
(1) The nationality of a person, his domicile, his residence, serve as the possible test for the determination of the
his place of sojourn, or his origin applicable law.
(2) the seat of a legal or juridical person, such as a Based on pleadings on record, including allegations in the
corporation Amended Complaint:
(3) the situs of a thing, that is, the place where a thing is, o Morada was made to face trial for very serious charges,
or is deemed to be situated. In particular, the lex situs is including adultery and violation of Islamic laws and tradition
decisive when real rights are involved
o SAUDIA may have acted beyond its duties as employer by
(4) the place where an act has been done, the locus actus, handing over the person of Morada to Jeddah officials which
such as the place where a contract has been made, a contributed to and amplified or even proximately caused
additional humiliation, misery and suffering. It also took
advantage of the trust, confidence and faith in the guise of 89, RTC of Quezon City
authority as employer. G.R. No. 122191 October 8, 1998

o Conviction and imprisonment was wrongful but injury or FACTS: Petitioner SAUDIA hired private respondent MORADA
harm was inflicted upon her person and reputation which as a flight attendant in 1988, based in Jeddah. On 1990,
must be compensated or redress for the wrong doing while on a lay-over in Jakarta, Indonesia, she went to party
with 2 male attendants, and on the following morning in their
Complaint involving torts hotel, one of the male attendants attempted to rape her. She
"connecting factor" or "point of contact" - place or places was rescued by hotel attendants who heard her cry for help.
where the tortious conduct or lex loci actus occurred = The Indonesian police arrested the 2.
Philippines where SAUDIA deceived Morada, a Filipina MORADA returned to Jeddah, but was asked by the company
residing and working here. to go back to Jakarta and help arrange the release of the 2
"State of the most significant relationship" applied male attendants. MORADA did not cooperate when she got to
Jakarta.
o taken into account and evaluated according to their
relative importance with respect to the particular issue: What followed was a series of interrogations from the Saudi
Courts which she did not understand as this was in their
(a) the place where the injury occurred language. In 1993, she was surprised, upon being ordered by
SAUDIA to go to the Saudi court, that she was being
(b) the place where the conduct causing the injury convicted of (1) adultery; (2) going to a disco, dancing and
occurred listening to the music in violation of Islamic laws; and (3)
socializing with the male crew, in contravention of Islamic
(c) the domicile, residence, nationality, place of
tradition, sentencing her to five months imprisonment and to
incorporation and place of business of the parties
286 lashes. Only then did she realize that the Saudi court had
(d) the place where the relationship, if any, between the tried her, together with the 2, for what happened in Jakarta.
parties is centered
SAUDIA denied her the assistance she requested, But
v private respondent is a resident Filipina national, working because she was wrongfully convicted, Prince of Makkah
here dismissed the case against her and allowed her to leave
Saudi Arabia. Shortly before her return to Manila, she was
v a resident foreign corporation engaged here in the terminated from the service by SAUDIA, without her being
business of international air carriage informed of the cause.
SAUDI ARABIAN AIRLINES (SAUDIA) vs. COURT OF On November 23, 1993, Morada filed a Complaint for
APPEALS, MILAGROS P. MORADA and HON. RODOLFO damages against SAUDIA, and Khaled Al-Balawi (Al-Balawi),
A. ORTIZ, in his capacity as Presiding Judge of Branch its country manager.
SAUDIA ALLEGES: Private respondents claim for alleged
abuse of rights occurred in the Kingdom of Saudi Arabia. It COURT disagrees with MORADA that his is purely a domestic
alleges that the existence of a foreign element qualifies the case. However, the court finds that the RTC of Quezon City
instant case for the application of the law of the Kingdom of possesses jurisdiction over the subject matter of the suit. Its
Saudi Arabia, by virtue of the lex loci delicti commissi rule. authority to try and hear the case is provided for under
Section 1 of Republic Act No. 7691, to wit:
MORADA ALLEGES: Since her Amended Complaint is based
on Articles 19 and 21 of the Civil Code, then the instant case BP129 Sec. 19. Jurisdiction in Civil Cases. Regional Trial
is properly a matter of domestic law. Courts shall exercise exclusive jurisdiction:
xxx xxx xxx
ISSUE: WON the Philippine courts have jurisdiction to try the (8) In all other cases in which demand, exclusive of interest,
case damages of whatever kind, attorney`ys fees, litigation
HELD: YES. expenses, and cots or the value of the property in
controversy exceeds One hundred thousand pesos
On the presence of a Foreign Element in the case: A factual (P100,000.00) or, in such other cases in Metro Manila, where
situation that cuts across territorial lines and is affected by the demand, exclusive of the above-mentioned items
the diverse laws of two or more states is said to contain a exceeds Two hundred Thousand pesos (P200,000.00).
foreign element. The presence of a foreign element is (Emphasis ours)
inevitable since social and economic affairs of individuals and xxx xxx xxx
associations are rarely confined to the geographic limits of Section 2 (b), Rule 4 of the Revised Rules of Court the
their birth or conception. The forms in which this foreign venue, Quezon City, is appropriate:
element may appear are many. The foreign element may Sec. 2 Venue in Courts of First Instance. [Now Regional
simply consist in the fact that one of the parties to a contract Trial Court]
is an alien or has a foreign domicile, or that a contract (a) xxx xxx xxx
between nationals of one State involves properties situated (b) Personal actions. All other actions may be commenced
in another State. In other cases, the foreign element may and tried where the defendant or any of the defendants
assume a complex form. resides or may be found, or where the plaintiff or any of the
plaintiff resides, at the election of the plaintiff.
In the instant case, the foreign element consisted in the fact
that private respondent Morada is a resident Philippine Weighing the relative claims of the parties, the court a quo
national, and that petitioner SAUDIA is a resident foreign found it best to hear the case in the Philippines. Had it
corporation. Also, by virtue of the employment of Morada refused to take cognizance of the case, it would be forcing
with the petitioner Saudia as a flight stewardess, events did plaintiff (private respondent now) to seek remedial action
transpire during her many occasions of travel across national elsewhere, i.e. in the Kingdom of Saudi Arabia where she no
borders, particularly from Manila, Philippines to Jeddah, Saudi longer maintains substantial connections. That would have
Arabia, and vice versa, that caused a conflicts situation to caused a fundamental unfairness to her.
arise. Moreover, by hearing the case in the Philippines no
unnecessary difficulties and inconvenience have been shown
by either of the parties. The choice of forum of the plaintiff In applying State of the most significant relationship rule,
(now private respondent) should be upheld. to determine the State which has the most significant
relationship, the following contacts are to be taken into
The trial court also acquired jurisdiction over the parties. account and evaluated according to their relative importance
MORADA through her act of filing, and SAUDIA by praying for with respect to the particular issue: (a) the place where the
the dismissal of the Amended Complaint on grounds other injury occurred; (b) the place where the conduct causing the
than lack of jurisdiction. injury occurred; (c) the domicile, residence, nationality, place
As to the choice of applicable law, we note that choice-of-law of incorporation and place of business of the parties, and (d)
problems seek to answer two important questions: the place where the relationship, if any, between the parties
(1) What legal system should control a given situation where is centered.
some of the significant facts occurred in two or more states; As already discussed, there is basis for the claim that over-all
and injury occurred and lodged in the Philippines. There is
(2) to what extent should the chosen legal system regulate likewise no question that private respondent is a resident
the situation. Filipina national, working with petitioner, a resident foreign
Considering that the complaint in the court a quo is one corporation engaged here in the business of international air
involving torts, the connecting factor or point of contact carriage. Thus, the relationship between the parties was
could be the place or places where the tortious conduct or centered here, although it should be stressed that this suit is
lex loci actus occurred. And applying the torts principle in a not based on mere labor law violations. From the record, the
conflicts case, we find that the Philippines could be said as a claim that the Philippines has the most significant contact
situs of the tort (the place where the alleged tortious conduct with the matter in this dispute, raised by private respondent
took place). This is because it is in the Philippines where as plaintiff below against defendant (herein petitioner), in our
petitioner allegedly deceived private respondent, a Filipina view, has been properly established.
residing and working here. According to her, she had NOTE:
honestly believed that petitioner would, in the exercise of its
rights and in the performance of its duties, act with justice, These test factors or points of contact or connecting
give her due and observe honesty and good faith. Instead, factors could be any of the following:
petitioner failed to protect her, she claimed. That certain acts
or parts of the injury allegedly occurred in another country is (1) The nationality of a person, his domicile, his residence,
of no moment. For in our view what is important here is the his place of sojourn, or his origin;
place where the over-all harm or the totality of the alleged (2) the seat of a legal or juridical person, such as a
injury to the person, reputation, social standing and human corporation;
rights of complainant, had lodged, according to the plaintiff (3) the situs of a thing, that is, the place where a thing is, or
below (herein private respondent). All told, it is not without is deemed to be situated. In particular, the lex situs is
basis to identify the Philippines as the situs of the alleged decisive when real rights are involved;
tort. (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 Morada then sued Saudia Airlines for damages under Article
lex loci actus is particularly important in contracts and torts; 19 and 21 of the Civil Code. Saudia Airlines filed a motion to
(5) the place where an act is intended to come into effect, dismiss on the ground that the RTC has no jurisdiction over
e.g., the place of performance of contractual duties, or the the case because the applicable law should be the law of
place where a power of attorney is to be exercised; Saudi Arabia. Saudia Airlines also prayed for other reliefs
(6) the intention of the contracting parties as to the law that under the premises.
should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are ISSUE: Whether or not Saudia Airlines contention is correct.
instituted or done. The lex fori the law of the forum is HELD: No. Firstly, the RTC has acquired jurisdiction over
particularly important because, as we have seen earlier, Saudia Airlines when the latter filed a motion to dismiss with
matters of procedure not going to the substance of the petition for other reliefs. The asking for other reliefs
claim involved are governed by it; and because the lex fori effectively asked the court to make a determination of Saudia
applies whenever the content of the otherwise applicable Airliness rights hence a submission to the courts
foreign law is excluded from application in a given case for jurisdiction.
the reason that it falls under one of the exceptions to the
applications of foreign law; and Secondly, the RTC has acquired jurisdiction over the case
(8) the flag of a ship, which in many cases is decisive of because as alleged in the complaint of Morada, she is
practically all legal relationships of the ship and of its master bringing the suit for damages under the provisions of our
or owner as such. It also covers contractual relationships Civil Law and not of the Arabian Law. Morada then has the
particularly contracts of affreightment. right to file it in the QC RTC because under the Rules of Court,
a plaintiff may elect whether to file an action in personam
Milagros Morada was working as a stewardess for Saudia (case at bar) in the place where she resides or where the
Arabian Airlines. In 1990, while she and some co-workers defendant resides. Obviously, it is well within her right to file
were in a lay-over in Jakarta, Indonesia, an Arab co-worker the case here because if shell file it in Saudi Arabia, it will be
tried to rape her in a hotel room. Fortunately, a roomboy very disadvantageous for her (and of course, again,
heard her cry for help and two of her Arab co-workers were Philippine Civil Law is the law invoked).
arrested and detained in Indonesia. Later, Saudia Airlines re-
assigned her to work in their Manila office. While working in Thirdly, one important test factor to determine where to file a
Manila, Saudia Airlines advised her to meet with a Saudia case, if there is a foreign element involved, is the so called
Airlines officer in Saudi. She did but to her surprise, she was locus actus or where an act has been done. In the case at
brought to a Saudi court where she was interrogated and bar, Morada was already working in Manila when she was
eventually sentenced to 5 months imprisonment and 289 summoned by her superior to go to Saudi Arabia to meet
lashes; she allegedly violated Muslim customs by partying with a Saudia Airlines officer. She was not informed that she
with males. The Prince of Makkah got wind of her conviction was going to appear in a court trial. Clearly, she was
and the Prince determined that she was wrongfully convicted defrauded into appearing before a court trial which led to her
hence the Prince absolved her and sent her back to the wrongful conviction. The act of defrauding, which is tortuous,
Philippines. Saudia Airlines later on dismissed Morada. was committed in Manila and this led to her humiliation,
misery, and suffering. And applying the torts principle in a Subject Matter: Applications of the provisions of Art. 2 of the
conflicts case, the SC finds that the Philippines could be said Revised Penal Code
as a situs of the tort (the place where the alleged tortious Facts:
conduct took place).
In August 12, 1901, the defendants were accused of the theft
UNITED STATES vs. FOWLER December 31, 1902 (1 Phil of 16 champagne bottles worth 20 dollars while on board the
614) vessel, Lawton. The counsel for defendants alleged to the
Court of First Instance of Manila that they were without
PARTIES: jurisdiction over the crime charged. Since it happened in the
Complainant and appellant: United States high seas and not in the city of Manila or in the territory in
which the jurisdiction of the court extends, they asked that
Defendants and appellees: William Fowler et. al. the case be dismissed.

FACTS:

August 12, 1901, the defendants were accused of the theft of Issue:
16 champagne bottles worth 20 dollars while on board the
vessel Lawton. The counsel for defendants alleged to the Whether or not the Court of First Instance of Manila has
Court of First Instance that they were without jurisdiction jurisdiction over the criminal case theft committed on board
over the crime charged . Since it happened in the high seas while navigating on high seas on a vessel not registered in
and not in the city of Manila or in the territory in which the the Philippines.
jurisdiction of the court extends, they asked that the case be Held:No. The Philippine court has jurisdiction over the crime
dismissed. of theft committed on high seas on board a vessel not
ISSUE:Whether or not the Court of First Instance has registered or licensed in the Philippines. The English Rule
jurisdiction over crimes committed on the high seas on board states that such crimes are triable in our country when
of transport not registered in the Philippines crimes are committed on board a foreign vessel sailing from
a foreign port and which enters the Philippine waters. In the
HELD:No. The Philippine court has no jurisdiction over the case at bar, the vessel Lawton was navigating the high seas
crime of theft committed on high seas on board a vessel not at the commission of the crime. Given the location of the
registered or licensed in teh Philippines. The transport vessel at the time, such act is not triable within our
Lawton not being a vessel of this class, our courts are jurisdiction.
without jurisdiction to take a cognizance of a crime
committed on board the same.

Title: US v. Fowler, 1 Phil. 614 Brief Fact Summary. Defendants published an article and
reenacted a play about Plaintiff and his family being held
hostage. The article and play were false, but were portrayed
by Defendant to be the truth. Plaintiff sued Defendant for
false light. exposure is an essential incident of life in a society, which
places a primary value on freedom of speech and of press. A
Synopsis of Rule of Law. Defendants published an article and broadly defined freedom of the press assures the
reenacted a play about Plaintiff and his family being held maintenance of our political system. Fear of litigation will
hostage. The article and play were false, but were portrayed inevitably create the danger that the legitimate utterance will
by Defendant to be the truth. Plaintiff sued Defendant for be penalized. However, constitutional guarantees cannot
false light. tolerate sanctions against calculated falsehood without
significant impairment of their essential function.
* The evidence in this case reasonably would support a jury
Facts. Hill (Plaintiff), his wife, and five children were held finding of either innocent or merely negligent misstatement
hostage in their suburban Philadelphia home by three by Defendant, or a finding that Defendant portrayed the play
escaped convicts. Plaintiff and his family were released as a re-enactment of the Hill familys experience reckless of
without any harm but the story made the front pages of the the truth or with actual knowledge that the portrayal was
newspapers. Plaintiffs then moved to Connecticut. Time, Inc. false.
(Defendant) published an article that told of a new Broadway
thriller, The Desperate Hours. The article said Plaintiff and his Dissent. (J. Fortas) Altering or changing the true facts so the
family rose in heroism in the time of crisis. The article article as published was a fictionalized account is a knowing
included pictures of scenes from the play that was to be or reckless falsity per se. Alteration denotes a positive act
reenacted in Plaintiffs Philadelphia home. Plaintiff sued and not a negligent or inadvertent happening.
under Sections 50-51 of the New York Civil Rights Law; Concurrence. There are two concurring opinions. Justice
Defendants publication of the issues gave the impression Harlan concurs in part and dissents in part.
that the play was true when in fact it did not accurately * (J. Douglas) It seems to me to be irrelevant to talk about
recount Plaintiffs actual experience and Defendant knew the any right of privacy in the context of this highly public event.
article was false and untrue. Defendant answered that the Plaintiff was catapulted into the public domain by events over
article was a subject of a legitimate news article. The trial which he had no control. His activities are now a matter of
judge denied Defendants motion to dismiss and the j public domain.
ury awarded Plaintiff $50,000 in actual damages and $25,000 * (J. Harlan) Constitutional standards would be met by a
in punitive damages. The New York Court of Appeals affirmed. finding of negligence by Defendant. Plaintiff is neither a
The Supreme Court granted certiorari. public figure nor a public official. It would be unreasonable to
assume that Plaintiff could find a forum for making a
Issue. Does a publication of a false report on a matter of successful refutation of Defendants material. Plaintiff came
public interest need only meet the New York Times test of to the public attention through an unfortunate circumstance
actual malice to permit recovery in a lawsuit for false light? and without any voluntary acts on his part. He has not
Held. Yes. Reversed and remanded. waived his privacy nor any protections afforded by the State
* Exposure of the self to others in varying degrees is a from irresponsible publicity.
concomitant of life in a civilized community. The risk of their
-WEC international filed for Temp Injunction to stop issuance
Discussion. Sanctions against either innocent or negligent of certificate of incorp for WEC
misrepresentation would present a grave hazard of
discouraging the press from exercising constitutional Defense: WEC is a foreign corp not licensed, nor is doing
guarantees. However, constitutional guarantees can tolerate business, in RP so has no legal capacity to sue
sanctions against calculated falsehood without significant WON WEC HAS LEGAL CAPACITY TO SUE TO PROTECT ITS
impairment of their essential function. The trial judge did not REPUTATION EVEN IF ITS NOT REGISTERED NOR DOING
instruct the jury properly in that a finding of liability could BUSINESS IN RP? YES
only be based on a finding of knowing and reckless falsity in
the publication of the article. -the right to use the company's corporate and trade name is
a property right which may be asseted against the whole
WESTERN EQUIPMENT AND SUPPLY CO V. REYES world
(1925)
-HANOVER STAR MILLING V. ALLEN AND WHEELER CORP:
Short Summary: A foreign corporation wanted to enjoin a trademark acknowledges no territorial boundaries of
domestic corporation who intends to use the foreign corp's municipalities or states or nations, but extends to every
name in RP, and would engage in the same business as the market where the trader's goods have become known and
foreign corp, from using its name. Court held that even if the identified by the use of the mark
corporation is not doing business and is not licensed in the
Philippines, it could still protect the use of its trade name.

Facts:
RA 8293: INTELLECTUAL PROPERTY CODE OF 1998
-a foreign corporation organized under laws of Nevada was
issued a provisional license by Director of Bureau of -established the Intellectual Property Ofice
Commerce and Industry
-does not allow corps to register as their trade names those
-it then started importing and selling in RP electrical and which are
telephone apparatus and supplies manufactured by Western
Electric Co (WEC international), a foreign corpo, never Well known internationally and in the RP, WON registered in
licensed nor engaged in business in RP; they had been in the RP (already used as a mark by some other person)
business for the past 50 years and have acquired high trade
Used for identical or similar goods or services
reputation
-allows a corporation w/c may not be engaged in business or
-Herman et. Al filed Articles of Incorporation as a Philippine
is not registered in RP to still file suit (civil or administrative)
corp w/ name Western Electric Company (WEC)+ they are
to protect its trade name (note: only owners of registered
also engaged in manufacturing of electrical and telephone
marks in RP can recover damages for trademark
apparatus and supplies.
infringement)
corporation by Herman, et. al. as fraudulent and contrary to
law, as it attempts to unjustly compete with the real Western
Western Equipment vs. Reyes GR 27897, 2 December Electric Co. Inc. and deceive Filipinos into thinking that the
1927; En Banc, Johns (J) Facts: In 1925, Western goods they propose to sell are goods of manufacture of the
Equipment and Supply Co. applied for the issuance of a real Western Electric Co. states or nations, but extends to
license to engage in business in the Philippines. On the other every market where the traders goods have become known
hand, Western Electric Co. has never been licensed to and identified by the use of the mark.
engage in business, nor has it ever engaged in business in
the Philippines. Western Equipment, since the issuance of its Sterling Products Vs. Farbenfabriken Bayer GR L-19906, 30
license, engaged in the importation and sale of electrical and April 1969; En Banc, Sanchez (J). Facts: The Bayer Cross in
telephone apparatus and supplies manufactured by Western circle trademark was registered in Germany in 1904 to
Electric. A local corporation, Electric Supply Co. Inc. has been Farbenfabriken vorm. Friedr. Bayer (FFB), successor to the
importing the same products in the Philippines. In 1926, original Friedr. Bauyer et. Comp., and predecessor to
Electric Supplys president, Henry Herman, along with other Farbenfabriken Bayer aktiengessel craft (FB2). The Bayer,
persons sought to organize a corporation to be known as and Bayer Cross in circle trademarks were acquired by
Western Electric Co. Inc. Western Equipment, et al. filed sterling Drug Inc. when it acquired FFBs subsidiary Bayer Co.
against Herman to prevent them from organizing said of New York as a result of the sequestration of its assets by
corporation. The trial court ruled in favor of Western the US Alien Property Custodian during World War I. Bayer
Equipment, holding that the purpose of the incorporation of products have been known in Philippines by the close of the
the proposed corporation is illegal or void. 19th century. Sterling Drugs, Inc., however, owns the
trademarks Bayer in relation to medicine. FBA attempted
Issue: Whether the foreign corporation Western Electric Co. to register its chemical products with the Bayer Cross in
Inc. has right of action to prevent an officer of the circle trademarks. Sterling Products International and FBA
government from issuing a certificate of incorporation to seek to exclude each other from use of the trademarks in the
Philippine residents who attempt to pirate the corporate Philippines. The trial court sustained SPIs right to use the
name of the foreign corporation and engage in the same Bayer trademark for medicines and directed FBA to add
business. distinctive word(s) in their mark to indicate their products
Held: Yes. A trademark acknowledges no territorial come from Germany. Both appealed. Issue: Whether SPIs
boundaries of municipalities, ownership of the trademarks extends to products not related
to medicine. Held: No. SPIs certificates of registration as to
Rights to the use of its corporate name or trade name is a the Bayer trademarks registered in the Philippines cover
property right, a right in rem, which it may assert and protect medicines only. Nothing in the certificates include chemicals
against the whole world, in any of the courts in the world or insecticides. SPI thus may not claim first use of the
even in jurisdictions where it does not transact business trademarks prior to the registrations thereof on any product
just the same as it may protect its tangible property, real or other than medicines. For if otherwise held, a situation may
personal, against trespass or conversion. The trial court was arise whereby an applicant may be tempte3d to register a
correct in holding that the purpose of the proposed trademark on any and all goods which his mind may conceive
even if he had never intended to use the trademark for the Issue: Whether the proceedings before the patent office is a
said goods. Omnibus registration is not contemplated by the prejudicial question that need to be resolved before the
Trademark Law. The net result of the decision is that SPI may criminal action for unfair competition may be pursued. Held:
hold on its Bayer trademark for medicines and FBA may No. The proceedings pending before the Patent Office do not
continue using the same trademarks for insecticide and other partake of the nature of a prejudicial question which must
chemicals, not medicine. The formula fashioned by the lower first be definitely resolved. The case which suspends the
court avoids the mischief of confusion of origin, and does not criminal action must be a civil case, not a mere
visit FBA with reprobation and condemnation. A statement administrative case, which is determinative of the innocence
that its product came from Germany anyhow is but a or guilt of the accused. The issue whether a trademark used
statement of fact. is different from anothers trademark is a matter of defense
and will be better resolved in the criminal proceedings before
La Chemise Lacoste vs. Fernandez GR 63796-97, 21 a court of justice instead of raising it as a preliminary matter
May 1984; First Division, Gutierrez Jr. (J) Facts: La in an administrative proceeding. Inasmuch as the goodwill
chemise Lacoste is a French corporation and the actual and reputation of La Chemise Lacoste products date back
owner of the trademarks Lacoste, Chemise Lacoste, even before 1964, Hemandas cannot be allowed to continue
Crocodile Device and a composite mark consisting of the the trademark Lacoste for the reason that he was the first
word Lacoste and a representation of a crocodile/alligator, registrant in the Supplemental Register of a trademark used
used on clothings and other goods sold in many parts of the in international commerce. Registration in the Supplemental
world and which has been marketed in the Philippines Register cannot be given a posture as if the registration is in
(notably by Rustans) since 1964. In 1975 and 1977, the Principal Register. It must be noted that one may be
Hemandas Q. Co. was issued certificate of registration for the declared an unfair competitor even if his competing
trademark Chemise Lacoste and Q Crocodile Device both in trademark is registered. La Chemise Lacoste is world
the supplemental and Principal Registry. In 1980, La Chemise renowned mark, and by virtue of the 20 November 1980
Lacoste SA filed for the registration of the Crocodile device Memorandum of the Minister of Trade to the director of
and Lacoste. Games and Garments (Gobindram Hemandas, patents in compliance with the Paris Convention for the
assignee of Hemandas Q.Co.) opposed the registration of protection of industrial property, effectively cancels the
Lacoste. In 1983, La Chemise Lacoste filed with the NBI a registration of contrary claimants to the enumerated marks,
letter-complaint alleging acts of unfair competition which include Lacoste.
committed by Hemandas and requesting the agencys
assistance. A search warrant was issued by the trial court. LA CHEMISE LACOSTE V. FERNANDEZ (G.R. NO. L-
Various goods and articles were seized upon the execution of 63796-97)
the warrants. Hemandas filed motion to quash the warrants,
which the court granted. The search warrants were recalled, Facts:Petitioner La Chemise Lacoste is a foreign corporation
and the goods ordered to be returned. La Chemise Lacoste and the actual owner of the trademarks Lacoste, Chemise
filed a petition for certiorari. Lacoste, and Crocodile Device used on clothing and other
goods that are sold in many parts of the world. Herein
respondent Hemadas & Co., a domestic firm, applied and was
granted registration of the mark Chemise Lacoste and The Intermediate Appellate Court, in the La Chemise Lacoste
Crocodile Device for its garment products. Sometime later, S.A. v. Sadhwani decision which we cite with approval
petitioner applied for the registration of its mark Crocodile sustained the power of the Minister of Trade to issue the
Device and Lacoste but was opposed by herein respondent. implementing memorandum and declared La Chemise
Later, petitioner filed a letter-complaint of unfair competition Lacoste S.A. the owner of the disputed trademark, stating:
before the NBI which led to the issuance of search warrants In the case at bar, the Minister of Trade, as the competent
and the seizure of goods of respondent Hemadas. authority of the country of registration, has found that
Respondent moved to quash the warrants alleging that its among other well-known trademarks Lacoste is the subject
trademark was different from petitioners trademark. of conflicting claims. For this reason, applications for its
Respondent court ruled to set aside the warrants and to registration must be rejected or refused, pursuant to the
return the seized goods. treaty obligation of the Philippines.

Issue:Whether or not petitioners trademark is a well-known Advertisements


mark protected under the Paris Convention.
Wells Fargo vs. Collector of Internal Revenue GR
Ruling: YES. 46720, 28 June 1940 First Division, Moran (J): 4 concur,
1 concur in result Facts: Birdie Lillian Eye died on 16
In upholding the right of the petitioner to maintain the September 1932, at Los Angeles, California, the place of her
present suit before our courts for unfair competition or alleged last residence and domicile. Among the properties
infringement of trademarks of a foreign corporation, we are she left was her 1/2 conjugal shares of stock in the Benguet
moreover recognizing our duties and the rights of foreign Consolidated Mining Co., an anonymous partnership
states under the Paris Convention for the Protection of (sociedad anonima), organized under the laws of the
Industrial Property to which the Philippines and France are Philippines. She left a will duly admitted to probate in
parties. California where her estate was administered and settled.
Pursuant to this obligation, the Ministry of Trade issued a Wells Fargo bank and Union Trust Co. was duly appointed
memorandum addressed to the Director of the Patents Office trustee of the trust by the said will. The Federal and
directing the latter to reject all pending applications for California States inheritance taxes due thereon have been
Philippine registration of signature and other world famous duly paid. The Collector of Internal Revenue in the
trademarks by applicants other than its original owners or Philippines, however, sought to subject the shares of stock to
users. The conflicting claims over internationally known inheritance tax, to which Wells Fargo objected. Issue:
trademarks involve such name brands as Lacoste, et. al. It is Whether the shares of stock are subject to Philippine
further directed that, in cases where warranted, Philippine inheritance tax considering that the decedent was domiciled
registrants of such trademarks should be asked to surrender in California. Held: Originally, the settled law in the United
their certificates of registration, if any, to avoid suits for States is that intangibles have only one situs for the purpose
damages and other legal action by the trademarks foreign or of inheritance tax, and such situs is in the domicile of the
local owners or original users. decedent at the time of his or her death. But the rule has
been relaxed. The maxim mobila sequuntur personam,
upon which the rule rests, has been decried as a mere The Collector of Internal Revenue sought to assess and
fiction of law having its origin in considerations of general collect estate tax on the said shares. Wells Fargo Banks &
convenience and public policy, and cannot be applied to limit Union Trust Company, the trustee of the estate of the
or control teh right of the State to tax property within its decedent Eye, objected to said assessment. Wells Fargo
jurisdiction and must yield to established fact of legal averred that said shares were already subjected to
ownership, actual presence and control elsewhere, and inheritance tax in California and hence cannot be taxed again
cannot be applied if to do so whould result in inescapable in the Philippines (note at that time the Philippines was
and patent injustice. The relaxation of the original rule rests still under the Commonwealth and were not yet totally
on either of two fundamental considerations: (1) upon the independent from the US).
recognition of the inherent power of each government to tax
persons, properties, and rights within its jurisdiction and ISSUE: Whether or not the shares are subject to estate tax in
enjoying, thus, the protection of its laws; and (2) upon the the Philippines.
principle that as to intangibles, a single location in space is HELD: Yes. The Supreme Court ruled that even though the
hardly possible, considering the multiple, distinct Philippines was considered a US territory at that time, it is
relationships which may be entered into with respect thereto. still a separate jurisdiction from the US in several aspects
Herein, the actual situs of the shares of stock is in the particularly taxation. Hence, the Philippines has the power to
Philippines, the corporation being domiciled therein. The tax said shares. The situs of taxation is here in the Philippines
certificates of stock remained in the Philippines up to the because the situs of the shares of stock concerned is here in
time when the deceased died in California, and they were in the Philippines because of the fact that the said shares were
possession of one Syrena McKee, secretary of the issued here by a corporation organized and existing under
corporation, to whom they have been delivered and indorsed the laws of the Philippines which is also domiciled here.
in blank. McKee had the legal title to the certificates of stock Further, (and this is the deeper reason), when Eye was alive,
held in trust for the true owner thereof. The owner residing in she actually delivered the title to said shares to the resident
California has extended here her activities with respect to her secretary of the corporation here in the Philippines hence the
intangibles so as to avail hereself of the protection and shares never left the Philippines.
benefit of Philippine laws. Accordingly, the jurisdiction of the
Philippine Government to tax must be upheld. Note: As a rule, intangibles follow the person (mobilia
sequuntur personam). Hence, intangibles are taxable in the
70 Phil. 325 Mercantile Law Corporation Code place where their owner may be domiciled. However, Section
Shares of Stock Situs of Shares of Stock 104 of the NIRC provides that if the shares have attained
In September 1932, Birdie Lillian Eye died in Los Angeles, business situs here in the Philippines, then said shares are
California, USA which was also her place of domicile. She left taxable here even if the owner of said shares are domiciled
various properties. Among those properties include some abroad.
intangibles consisting of 70,000 shares in the Benguet PHILIP MORRIS, INC. VS COURT OF APPEALS
Consolidated Mining Company, a corporation organized and
existing under Philippine laws. G.R. No. 91332 July 16, 1993
Facts: Discussions:

This is a petition for review under Rule 45 of the Rules of Following universal acquiescence and comity, our municipal
Court, to seek the reversal and setting aside of the following law on trademarks regarding the requirement of actual use in
issuances of the Court of Appeals (CA). the Philippines must subordinate an international agreement
inasmuch as the apparent clash is being decided by a
Philip Morris, Inc. and two other petitioners are ascribing municipal tribunal. Withal, the fact that international law has
whimsical exercise of the faculty conferred upon magistrates been made part of the law of the land does not by any means
by Section 6, Rule 58 of the Revised Rules of Court when imply the primacy of international law over national law in
respondent Court of Appeals lifted the writ of preliminary the municipal sphere. Under the doctrine of incorporation as
injunction it earlier had issued against Fortune Tobacco applied in most countries, rules of international law are given
Corporation, from manufacturing and selling MARK a standing equal, not superior, to national legislative
cigarettes in the local market. Banking on the thesis that enactments
petitioners respective symbols MARK VII, MARK TEN, and
MARK, also for cigarettes, must be protected against Ruling/s:
unauthorized appropriation.
No. There is no proof that any of petitioners products which
All petitioners are not doing business in the Philippines but they seek to protect from any adverse effect of the
are suing on an isolated transaction, They Invoked provisions trademark applied for by defendant, is in actual use and
of the Paris Convention for the Protection of Industrial and available for commercial purposes anywhere in the
Intellectual Property. As corporate nationals of member- Philippines.
countries of the Paris Union, they can sue before Philippine
courts for infringement of trademarks, or for unfair A fundamental principle of Philippine Trademark Law is that
competition, without need of obtaining registration or a actual use in commerce in the Philippines is a pre-requisite to
license to do business in the Philippines, and without the acquisition of ownership over a trademark or a trade
necessity of actually doing business in the Philippines. name.

Philip Morris and its subsidiaries filed the complaint for In view of the explicit representation of petitioners in the
infringement and damages against Fortune Tobacco before complaint that they are not engaged in business in the
the Pasig Regional Trial Court (RTC) for manufacturing and Philippines, it inevitably follows that no conceivable damage
selling cigarettes bearing the trademark Mark which is can be suffered by them not to mention the foremost
identical and confusingly similar to Philip Morris trademarks. consideration heretofore discussed on the absence of their
The said act was dismissed. Hence, this petition at bar. right to be protected.

Issue/s: PHILIP MORRIS V. CA (G.R. NO. 91332)

Whether or not there has been an invasion of plaintiffs right Facts:


of property to such trademark or trade name.
Petitioners are foreign corporations organized under US laws Petitioners may have the capacity to sue for infringement
not doing business in the Philippines and registered owners irrespective of lack of business activity in the Philippines on
of symbols MARK VII, MARK TEN, and LARK used in their account of Section 21-A of the Trademark Law but the
cigarette products. Petitioners moved to enjoin respondent question whether they have an exclusive right over their
Fortune Tobacco from manufacturing and selling cigarettes symbol as to justify issuance of the controversial writ will
bearing the symbol MARK asserting that it is identical or depend on actual use of their trademarks in the Philippines in
confusingly similar with their trademarks. Petitioners relied line with Sections 2 and 2-A of the same law. It is thus
on Section 21-A of the Trademark Law to bring their suit and incongruous for petitioners to claim that when a foreign
the Paris Convention to protect their trademarks. The court corporation not licensed to do business in Philippines files a
denied the prayer for injunction stating that since petitioners complaint for infringement, the entity need not be actually
are not doing business in the Philippines, respondents using its trademark in commerce in the Philippines. Such a
cigarettes would not cause irreparable damage to petitioner. foreign corporation may have the personality to file a suit for
CA granted the injunction but on a subsequent motion, infringement but it may not necessarily be entitled to
dissolved the writ. protection due to absence of actual use of the emblem in the
local market.
Issues:
(2) NO. More telling are the allegations of petitioners in their
(1) Whether or not petitioners mark may be afforded complaint as well as in the very petition filed with this Court
protection under said laws; indicating that they are not doing business in the Philippines,
(2) Whether or not petitioner may be granted injunctive for these frank representations are inconsistent and
relief. incongruent with any pretense of a right which can breached.
Indeed, to be entitled to an injunctive writ, petitioner must
Ruling: show that there exists a right to be protected and that the
facts against which injunction is directed are violative of said
(1) NO. Yet, insofar as this discourse is concerned, there is no right. On the economic repercussion of this case, we are
necessity to treat the matter with an extensive response extremely bothered by the thought of having to participate in
because adherence of the Philippines to the 1965 throwing into the streets Filipino workers engaged in the
international covenant due to pact sunt servanda had been manufacture and sale of private respondents MARK
acknowledged in La Chemise. Given these confluence of cigarettes who might be retrenched and forced to join the
existing laws amidst the cases involving trademarks, there ranks of the many unemployed and unproductive as a result
can be no disagreement to the guiding principle in of the issuance of a simple writ of preliminary injunction and
commercial law that foreign corporations not engaged in this, during the pendency of the case before the trial court,
business in the Philippines may maintain a cause of action for not to mention the diminution of tax revenues represented to
infringement primarily because of Section 21-A of the be close to a quarter million pesos annually. On the other
Trademark Law when the legal standing to sue is alleged, hand, if the status quo is maintained, there will be no
which petitioners have done in the case at hand. damage that would be suffered by petitioners inasmuch as
they are not doing business in the Philippines. In view of the
explicit representation of petitioners in the complaint that 4. the dominant feature of the Gallo cigarette was the
they are not engaged in business in the Philippines, it rooster device with the manufacturers name clearly
inevitably follows that no conceivable damage can be indicated as MIGHTY CORPORATION, while in the case of
suffered by them not to mention the foremost consideration Gallo Winerys wines, it was the full names of the founders-
heretofore discussed on the absence of their right to be owners ERNEST & JULIO GALLO or just their surname GALLO;
protected.
On April 21, 1993, the Makati RTC denied, for lack of merit,
MIGHTY CORPORATION and LA CAMPANA FABRICA DE respondents prayer for the issuance of a writ of preliminary
TABACO, INC. vs. E.J. GALLO WINERY and THE injunction.
ANDRESONS GROUP, INC.
On August 19, 1993, respondents motion for reconsideration
FACTS: On March 12, 1993, respondents sued petitioners in was denied.
the RTC-Makati for trademark and trade name infringement
and unfair competition, with a prayer for damages and On February 20, 1995, the CA likewise dismissed
preliminary injunction. respondents petition for review on certiorari.

They claimed that petitioners adopted the Gallo After the trial on the merits, however, the Makati RTC,
trademark to ride on Gallo Winerys and Gallo and Ernest & on November 26, 1998, held petitioners liable for,
Julio Gallo trademarks established reputation and popularity, permanently enjoined from committing trademark
thus causing confusion, deception and mistake on the part of infringement and unfair competition with respect to the
the purchasing public who had always associated Gallo and GALLO trademark.
Ernest and Julio & Gallo trademarks with Gallo Winerys On appeal, the CA affirmed the Makati RTCs decision and
wines. subsequently denied petitioners motion for reconsideration.
In their answer, petitioners alleged, among other ISSUEWhether GALLO cigarettes and GALLO wines were
affirmative defenses that: petitioners Gallo cigarettes and identical, similar or related goods for the reason alone that
Gallo Winerys wine were totally unrelated products. To wit: they were purportedly forms of vice.
1. Gallo Winerys GALLO trademark registration certificates HELD Wines and cigarettes are not identical, similar,
covered wines only, and not cigarettes; competing or related goods.
2. GALLO cigarettes and GALLO wines were sold through In resolving whether goods are related, several
different channels of trade; factors come into play:
3. the target market of Gallo Winerys wines was the the business (and its location) to which the goods
middle or high-income bracket while Gallo cigarette buyers belong
were farmers, fishermen, laborers and other low-income
workers; the class of product to which the good belong
the products quality, quantity, or size, including the Respondent Eugene Arthur Perkins instituted an action in the
nature of the package, wrapper or container CFI of Manila against the Benguet Consolidated Mining
Company for dividends on shares of stock registered in his
the nature and cost of the articles name, payment of which was being withheld by the
the descriptive properties, physical attributes or essential company; and, for the recognition of his right to the control
characteristics with reference to their form, composition, and disposal of said shares, to the exclusion of all others.
texture or quality Benguet Consolidated Mining Company, in its Answer to
the purpose of the goods the Complaint averred that in connection with the shares of
stock in question, conflicting claims were being made upon it
whether the article is bought for immediate consumption, by said Respondent Eugene Arthur Perkins, his wife Idonah
that is, day-to-day household items Slade Perkins, and one named George H. Engelhard, and
prayed that these last two be made parties to the action and
the field of manufacture served with Summons by Publication, so that the three
Claimants may litigate their conflicting claims and settle their
the conditions under which the article is usually
rights among themselves. The court has NOT issued
purchased and
an Order compelling the Conflicting Claimants to interplead
the articles of the trade through which the goods flow, with one another and litigate their several claims among
how they are distribted, marketed, displayed and sold. themselves, but instead ordered Respondent Eugene Arthur
Perkins to amend his Complaint including the other two
The test of fraudulent simulation is to the likelihood of the Claimants as Parties-Defendant. The Complaint was
deception of some persons in some measure acquainted with accordingly amended and in addition to the relief prayed for
an established design and desirous of purchasing the in the Original Complaint, Respondent Eugene Arthur Perkins
commodity with which that design has been associated. The prayed that Petitioner Idonah Slade Perkins and George
simulation, in order to be objectionable, must be as appears Engelhard be adjudged without interest in the shares of stock
likely to mislead the ordinary intelligent buyer who has a in question and excluded from any claim they assert thereon.
need to supply and is familiar with the article that he seeks Thereafter, Summons by Publication were served upon the
to purchase. non-resident Defendants, Idonah Slade Perkins and George H.
Engelhard, pursuant to the Order of the trial court.
The petitioners are not liable for trademark infringement,
unfair competition or damages. Non-resident Defendant Engelhard filed his Answer to
the Amended Complaint, while Petitioner Idonah Slade
WHEREFORE, petition is granted.
Perkins, through counsel, filed her pleading entitled
G.R. No. 46631 (November 16, 1939) MORAN, J.: objection to venue, motion to quash, and demurrer to
jurisdiction wherein she challenged the jurisdiction of the
FACTS: lower court over her person. Petitioners
objection, Motion and Demurrer having been overruled as
well as her Motion for Reconsideration of the Order of Denial, the res, and its jurisdiction over the person of the non-
she now brought the present Petition for Certiorari, praying resident is non-essential. In order that the court may exercise
that the Summons by Publication issued against her be power over the res, it is not necessary that the court should
declared null and void, and that, with respect to her, take actual custody of the property, potential custody thereof
Respondent Judge be permanently prohibited from taking any being sufficient. There is potential custody when, from the
action on the case. nature of the action brought, the power of the court over the
property is impliedly recognized by law In an action in
ISSUE: rem or quasi in rem against a non-resident defendant,
Whether or not the CFI of Manila has acquired jurisdiction jurisdiction over his person is non-essential, and if the law
over the person of the Petitioner as a non-resident requires in such case that the summons upon the defendant
Defendant, or, notwithstanding the want of such jurisdiction, be served by publication, it is merely to satisfy the
whether or not said court may validly try the case? constitutional requirement of due process.

ARGUMENTS: The reason for the rule that Philippine courts cannot acquire
jurisdiction over the person of a non-resident, as laid down by
Petitioner contends that the proceeding instituted against her the Supreme Court of the United States in Pennoyer v. Neff
is one of interpleading and is therefore an action in [1878], may be found in a recognized principle of public law
personam. She contends that the lower court had not to the effect that no State can exercise direct jurisdiction
acquired jurisdiction over her person not only because she is and authority over persons or property without its territory
a non-resident, but also because the court had no jurisdiction (Story, Confl. L., ch. 2; Wheat, Int. L., pt. 2, ch. 2). The
over the subject-matter of the action. several States are of equal dignity and authority, and the
independence of one implies the exclusion of power from all
RULING: others. And so it is laid down by jurists, as an elementary
principle, that the laws of one State have no operation
Yes. Here, the service of the Summons by Publication was
outside of its territory, EXCEPT so far as is allowed by comity;
ordered by the lower court by virtue of an action quasi in
and that no tribunal established by it can extend its process
rem against the non-resident Defendant. The action
beyond that territory so as to subject either persons or
being quasi in rem, the CFI of Manila has jurisdiction over the
property to its decisions. Any exertion of authority of this
person of the Petitioner.
sort beyond this limit, says Story, is a mere nullity, and
Petition is DENIED with costs against the Petitioner. incapable of binding such persons or property in any other
tribunals Story, Confl. L., sec. 539 (Pennoyer v. Neff [1878],
RATIO DECIDENDI: 95 U.S., 714; 24 Law. ed., 565, 568-569).
The general rule is that a suit against a non-resident cannot When, however, the action relates to property located in the
be entertained by a Philippine court. Where, however, the Philippines, the Philippine courts may validly try the case,
action is in rem or quasi in rem in connection with property upon the principle that a State, through its tribunals, may
located in the Philippines, the court acquires jurisdiction over subject property situated within its limits owned by non-
residents to the payment of the demand of its own citizens It is true that, in a strict sense, a proceeding in rem is one
against them; and the exercise of this jurisdiction in no taken directly against property, and has for its object the
respect infringes upon the sovereignty of the State where the disposition of the property, without reference to the title of
owners are domiciled. Every State owes protection to its individual claimants; but, in a large and more general sense,
citizens; and, when non-residents deal with them, it is a the terms are applied to actions between parties, where the
legitimate and just exercise of authority to hold and direct object is to reach and dispose of property owned by
appropriate any property owned by such non-residents to them, or of some interest therein.
satisfy the claims of its citizens. It is in virtue of the States
jurisdiction over the property of the non-resident situated The action being in quasi in rem, the CFI of Manila has
within its limits that its tribunals can inquire into the non- jurisdiction over the person of the Petitioner. In order to
residents obligations to its own citizens, and the inquiry can satisfy the constitutional requirement of due
then be carried only to the extent necessary to control the process, Summons has been served upon her by publication.
disposition of the property. If the non-resident has no There is no question as to the adequacy of publication made
property in the State, there is nothing upon which the nor as to the mailing of the Order of Publication to the
tribunals can adjudicate. (Pennoyer v. Neff [1878]) Petitioners last known place of residence in the United
States. But, of course, the action being quasi in rem and
In the instant case, there can be no question that the action notice having be made by publication, the relief that may be
brought by Respondent Eugene Arthur Perkins in granted by the Philippine court must be confined to the res, it
his Amended Complaint against Petitioner Idonah Slade having no jurisdiction to render a personal judgment against
Perkins seeks to exclude her from any interest in a property the non-resident. In the Amended Complaint filed by
located in the Philippines. That property consists in certain Respondent Eugene Arthur Perkins, no money judgment or
shares of stocks of the Benguet Consolidated Mining other relief in personam is prayed for against the Petitioner.
Company, a sociedad anonima, organized in the Philippines The only relief sought therein is that she be declared to be
under the provisions of the Spanish Code of Commerce, with without any interest in the shares in controversy and that she
its principal office in the City of Manila and which conducts its be excluded from any claim thereto.
mining activities therein. The situs of the shares is in the
jurisdiction where the corporation is created, whether the Fujiki v Marinay
certificated evidencing the ownership of those shares are 2013 FACTS:
within or without that jurisdiction. (Fletcher Cyclopedia Petitioner Minoru Fujiki (Fujiki) is a Japanese national who
Corporations, Permanent ed. Vol. 11, p. 95). Under these married respondent Maria Paz Galela Marinay (Marinay) in
circumstances, SC holds that the action thus brought is quasi the Philippines on 23 January 2004. The marriage did not sit
in rem, for while the judgement that may be rendered therein well with petitioners parents. Thus, Fujiki could not bring his
is not strictly a judgment in rem, it fixes and settles the title wife to Japan where he resides. Eventually, they lost contact
to the property in controversy and to that extent partakes of with each other.
the nature of the judgment in rem (50 C.J., p 503). As held In 2008, Marinay met another Japanese, Shinichi Maekara
by the Supreme Court of the United States in Pennoyer v. (Maekara). Without the first marriage being dissolved,
Neff [1878]:
Marinay and Maekara were married on 15 May 2008 in marriages are declared void from the beginning under Article
Quezon City, Philippines. Maekara brought Marinay to Japan. 35(4) of the Family Code. Bigamy is a crime under Article 349
However, Marinay allegedly suffered physical abuse from of the Revised Penal Code. Thus, Fujiki can prove the
Maekara. She left Maekara and started to contact Fujiki. existence of the Japanese Family Court judgment in
accordance with Rule 132, Sections 24 and 25, in relation to
Fujiki and Marinay met in Japan and they were able to Rule 39, Section 48(b) of the Rules of Court.
reestablish their relationship. In 2010, Fujiki helped Marinay
obtain a judgment from a family court in Japan which
declared the marriage between Marinay and Maekara void on
the ground of bigamy. On 14 January 2011, Fujiki filed a (2) Whether a husband or wife of a prior marriage can file a
petition in the RTC entitled: Judicial Recognition of Foreign petition to recognize a foreign judgment nullifying the
Judgment (or Decree of Absolute Nullity of Marriage). subsequent marriage between his or her spouse and a
foreign citizen on the ground of bigamy.
DECISION OF LOWER COURTS:
(1) RTC: dismissed the petition for "Judicial Recognition of
Foreign Judgment (or Decree of Absolute Nullity of Yes. [t]he recognition of the foreign divorce decree may be
Marriage)" based on improper venue and the lack of made in a Rule 108 proceeding itself, as the object of special
personality of petitioner, Minoru Fujiki, to file the petition. proceedings (such as that in Rule 108 of the Rules of Court) is
precisely to establish the status or right of a party or a
particular fact.Rule 108, Section 1 of the Rules of Court
ISSUES & RULING: states:
(1) Whether the Rule on Declaration of Absolute Nullity of Sec. 1. Who may file petition. Any person interested in
Void Marriages and Annulment of Voidable Marriages (A.M. any act, event, order or decree concerning the civil status of
No. 02-11-10-SC) is applicable. persons which has been recorded in the civil register, may
file a verified petition for the cancellation or correction of any
No. Rule on Declaration of Absolute Nullity of Void Marriages entry relating thereto, with the Regional Trial Court of the
and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) province where the corresponding civil registry is located.
does not apply in a petition to recognize a foreign judgment (Emphasis supplied)
relating to the status of a marriage where one of the parties
is a citizen of a foreign country. Moreover, in Juliano-Llave v. There is no doubt that the prior spouse has a personal and
Republic, this Court held that the rule in A.M. No. 02- 11-10- material interest in maintaining the integrity of the marriage
SC that only the husband or wife can file a declaration of he contracted and the property relations arising from it.
nullity or annulment of marriage does not apply if the
reason behind the petition is bigamy. While the Philippines
has no divorce law, the Japanese Family Court judgment is
(3) Whether the Regional Trial Court can recognize the
fully consistent with Philippine public policy, as bigamous
foreign judgment in a proceeding for cancellation or
correction of entries in the Civil Registry under Rule 108 of Citation: G.R. No. 196049, June 26, 2013
the Rules of Court.
Ponente: Carpio; SECOND DIVISION

Doctrine:
Yes. There is neither circumvention of the substantive and
procedural safeguards of marriage under Philippine law, nor Recognition of foreign judgment declaring nullity of marriage
of the jurisdiction of Family Courts under R.A. No. 8369. A A recognition of a foreign judgment is not an action to
recognition of a foreign judgment is not an action to nullify a nullify a marriage. It is an action for Philippine courts to
marriage. It is an action for Philippine courts to recognize the recognize the effectivity of a foreign judgment, which
effectivity of a foreign judgment, which presupposes a case presupposes a case which was already tried and decided
which was already tried and decided under foreign law. under foreign law. Article 26 of the Family Code further
confers jurisdiction on Philippine courts to extend the effect
In the recognition of foreign judgments, Philippine courts are of a foreign divorce decree to a Filipino spouse without
incompetent to substitute their judgment on how a case was undergoing trial to determine the validity of the dissolution of
decided under foreign law. They cannot decide on the family the marriage. The second paragraph of Article 26 of the
rights and duties, or on the status, condition and legal Family Code provides that [w]here a marriage between a
capacity of the foreign citizen who is a party to the foreign Filipino citizen and a foreigner is validly celebrated and a
judgment. Thus, Philippine courts are limited to the question divorce is thereafter validly obtained abroad by the alien
of whether to extend the effect of a foreign judgment in the spouse capacitating him or her to remarry, the Filipino
Philippines. In a foreign judgment relating to the status of a spouse shall have capacity to remarry under Philippine law.
marriage involving a citizen of a foreign country, Philippine
courts only decide whether to extend its effect to the Filipino FACTS:
party, under the rule of lex nationalii expressed in Article 15 Petitioner Minoru Fujiki (Fujiki), a Japanese national married
of the Civil Code. respondent Maria Paz Galela Marinay (Marinay) in the
For this purpose, Philippine courts will only determine (1) Philippines on January 23, 2004. Sadly, petitioner Fujiki could
whether the foreign judgment is inconsistent with an not bring respondent Marinay back to Japan and they
overriding public policy in the Philippines; and (2) whether eventually lost contact with one another. In 2008, Marinay
any alleging party is able to prove an extrinsic ground to met Shinichi Maekara and they married without the earlier
repel the foreign judgment, i.e. want of jurisdiction, want of marriage being dissolved. Marinay suffered abuse from
notice to the party, collusion, fraud, or clear mistake of law or Maekara and so she left him and was able to reestablish
fact. If there is neither inconsistency with public policy nor contact with Fujiki and rekindle their relationship. The couple
adequate proof to repel the judgment, Philippine courts was able to obtain a judgment in a Japanese court that
should, by default, recognize the foreign judgment as part of declared Marinay's marriage to Maekara void on the ground
the comity of nations. of bigamy in 2010. Fujiki then filed a petition in the RTC
entitled: Judicial Recognition of Foreign Judgment (or
FUJIKI vs. MARINAY
Decree of Absolute Nullity of Marriage). In this case, ISSUE: Whether or not a husband or wife of a prior marriage
petitioner prayed that: can file a petition to recognize a foreign judgment nullifying
the subsequent marriage between his or her spouse and a
(1) the Japanese Family Court judgment be recognized; (2) foreign citizen on the ground of bigamy.
that the bigamous marriage between Marinay and Maekara
be declared void ab initio under Articles 35(4) and 41 of the HELD: YES. Firstly, the Rule on Declaration of Absolute Nullity
Family Code of the Philippines; and (3) for the RTC to direct of Void Marriages and Annulment of Voidable Marriages (A.M.
the Local Civil Registrar of Quezon City to annotate the No. 02-11-10-SC) does not apply in a petition to recognize a
Japanese Family Court judgment on the Certificate of foreign judgment relating to the status of a marriage where
Marriage between Marinay and Maekara and to endorse such one of the parties is a citizen of a foreign country. Moreover,
annotation to the Office of the Administrator and Civil in Juliano-Llave v. Republic, this Court held that the rule in
Registrar General in the National Statistics Office (NSO). A.M. No. 02-11-10-SC that only the husband or wife can file a
declaration of nullity or annulment of marriage does not
The trial court dismissed the petition on the ground that it did apply if the reason behind the petition is bigamy.
not meet standing and venue requirements as prescribed on
the Rule on Rule on Declaration of Absolute Nullity of Void The Supreme Court further held that:
Marriages and Annulment of Voidable Marriages (A.M. No. 02-
11-10-SC), specifically, only the spouses (i.e. Marimay or For Philippine courts to recognize a foreign judgment relating
Maekara) may file an action for declaration of nullity of to the status of a marriage where one of the parties is a
marriage. Petitioner in a Motion for Reconsideration claimed citizen of a foreign country, the petitioner only needs to
that the case should not be dismissed as the above rule prove the foreign judgment as a fact under the Rules of
applied only to cases of annulment of marriage on the Court. To be more specific, a copy of the foreign judgment
ground of psychological incapacity and not in a petition for may be admitted in evidence and proven as a fact under Rule
recognition of a foreign judgment. Notably, when the 132, Sections 24 and 25, in relation to Rule 39, Section 48(b)
Solicitor General was asked for comment, it agreed with the of the Rules of Court. Petitioner may prove the Japanese
Petitioner stating that the above rule should not apply to Family Court judgment through (1) an official publication or
cases of bigamy and that insofar as the Civil Registrar and (2) a certification or copy attested by the officer who has
the NSO are concerned, Rule 108 of the Rules of Court custody of the judgment. If the office which has custody is in
provide the procedure to be followed. Lastly, the Solicitor a foreign country such as Japan, the certification may be
General argued that there is no jurisdictional infirmity in made by the proper diplomatic or consular officer of the
assailing a void marriage under Rule 108, citing De Castro v. Philippine foreign service in Japan and authenticated by the
De Castro and Nial v. Bayadog which declared that [t]he seal of office.
validity of a void marriage may be collaterally attacked. A petition to recognize a foreign judgment declaring a
marriage void does not require relitigation under a Philippine
court of the case as if it were a new petition for declaration of
nullity of marriage. Philippine courts cannot presume to know
the foreign laws under which the foreign judgment was
rendered. They cannot substitute their judgment on the FACTS In 1979 to 1981, Philippine International Shipping
status, condition and legal capacity of the foreign citizen who Corporation (PISC) leased from Interpool Ltd. and its wholly
is under the jurisdiction of another state. Thus, Philippine owned subsidiary, the Container Trading Corporation, several
courts can only recognize the foreign judgment as a fact containers pursuant to the Membership Agreement and
according to the rules of evidence. Hiring Conditions and the Master Equipment Leasing
Agreement both dated June 8, 1979. The other petitioners
There is therefore no reason to disallow Fujiki to simply prove Philippine Construction Consortium Corporation, Pacific Mills
as a fact the Japanese Family Court judgment nullifying the Inc. and Universal Steel Smelting Company, guaranteed to
marriage between Marinay and Maekara on the ground of pay the obligation due and any liability of the PISC arising out
bigamy. While the Philippines has no divorce law, the of the leasing or purchasing of equipment.
Japanese Family Court judgment is fully consistent with
Philippine public policy, as bigamous marriages are declared In 1979 to 1981, PISC incurred outstanding and unpaid
void from the beginning under Article 35(4) of the Family obligations with Interpool, in the amount of $94,456.28,
Code. Bigamy is a crime under Article 349 of the Revised representing unpaid per diems, drop-off charges, interest and
Penal Code. Thus, Fujiki can prove the existence of the other agreed charges, resulting in a case before the US
Japanese Family Court judgment in accordance with Rule 132, District Court, Southern District of New York wherein a default
Sections 24 and 25, in relation to Rule 39, Section 48(b) of judgment against petitioners was rendered ordering the corp.
the Rules of Court. to pay in the amount of $80,779.33, as liquidated damages,
together with interest in the amount of $13,676.95 and costs
A recognition of a foreign judgment is not an action to nullify in the amount of $80.00. or for a total judgment of
a marriage. It is an action for Philippine courts to recognize $94,456.28. To enforce the default judgment of the US
the effectivity of a foreign judgment, which presupposes a District Court, a complaint was instituted against PISC and
case which was already tried and decided under foreign law. other guarantors before the QC RTC. PISC failed to answer
Article 26 of the Family Code further confers jurisdiction on the complaint and they were declared in default. The RTC
Philippine courts to extend the effect of a foreign divorce ruled in favor of Interpool and which was affirmed by the CA.
decree to a Filipino spouse without undergoing trial to
determine the validity of the dissolution of the marriage. The
second paragraph of Article 26 of the Family Code provides
that [w]here a marriage between a Filipino citizen and a In the first instance, petitioners contend that the U.S. District
foreigner is validly celebrated and a divorce is thereafter Court never acquired jurisdiction over their persons as they
validly obtained abroad by the alien spouse capacitating him had not been served with summons and a copy of the
or her to remarry, the Filipino spouse shall have capacity to Complaint in 83 Civil 290 (EW). In the second instance,
remarry under Philippine law. petitioners contend that such jurisdictional infirmity
effectively prevented the Regional Trial Court of Quezon City
Petition was granted and the RTC was ordered to reinstate from taking cognizance of the Complaint in Civil Case No. Q-
the proceedings. 39927 and from enforcing the U.S. District Court's Default
Judgment against them. Petitioners contend, finally, that
PHILIPPINE INTERNATIONAL SHIPPING vs. CA
assuming the validity of the disputed Default Judgment, the defendants in Civil Case No. Q- 39927, filed with Branch 93 of
same may be enforced only against petitioner PISC the 9 the Regional Trial Court of Quezon City. The record shows that
petitioners not having been impleaded originally in the case said 9 petitioners had executed continuing guarantees" to
filed in New York, U.S.A. secure performance by petitioner PISC of its contractual
obligations. As guarantors, they had held themselves out as
ISSUE W/N the US District Court default judgment can be liable. "whether jointly, severally, or in the alternative," to
enforced and against the 9 other petitioners? Yes. respondent Interpool under their separate "continuing
RULING To begin with, the evidence of record clearly shows guarantees" executed in the Philippines. The New York award
that the U.S. District Court had validly acquired jurisdiction of U.S.$94,456.28 is precisely premised upon a breach by
over PISC under the procedural law applicable in that forum PISC of its own obligations under those Agreements. The SC
i.e., the U.S. Federal Rules on Civil Procedure. Copies of the consider the 9 other petitioners as persons against whom [a]
Summons and Complaint which were in fact attached to the right to relief in respect to or arising out of the same
Petition for Review filed with the SC, were stamped transaction or series of transactions [has been] alleged to
"Received, 18 Jan 1983, PISC Manila." indicating that service exist" and, consequently, properly impleaded as defendants
thereof had been made upon and acknowledged by the PISC in Civil Case No. Q-39927. There was, in other words, no need
office in Manila on, 18 January 1983 That foreign judgment- at all, in order that Civil Case No. Q-39927 would prosper, for
which had become final and executory, no appeal having respondent Interpool to have first impleaded the 9 other
been taken therefrom and perfected by petitioner PISC-is petitioners in the New York case and there obtain judgment
thus "presumptive evidence of a right as between the parties against all 10 petitioners.
and their successors in interest by a subsequent title." The BOUDARD vs. TAIT
SC note, further that there has been in this case no showing
by petitioners that the Default Judgment rendered by the U.S. FACTS [Emilie Renee Boudard, as widow of Marie Theodore
District Court was vitiated by "want of notice to the party, Jerome Boudard and as guardian of their children, obtained a
collusion, fraud, or clear mistake of law or fact. " In other favorable judgment from the Court of First Instance of Hanoi,
words, the Default Judgment imposing upon petitioner PISC a French Indo-China, for the sum of 40,000 piastras, against
liability of U.S.$94,456.28 in favor of respondent Interpool, is Stewart Eddie Tait who had been declared in default for his
valid and may be enforced in this jurisdiction. failure to appear at the trial. Said judgment was based on the
fact that Mr. Boudard, who was an employee of Tait, was
The existence of liability on the part of petitioner PISC having killed in Hanoi by co-employees although outside the fulfill-
been duly established in the U.S. case, it was not improper ment of a duty.
for respondent Interpool, in seeking enforcement in this
jurisdiction of the foreign judgment imposing such liability, to
have included the other 9 petitioners herein (i.e., George Lim,
Marcos Bautista, Carlos Laude,Tan Sing Lim, Antonio Liu Lao, Emilie Bouderd filed a petition with the CFI of Manila for the
Ong Teh Philippine Consortium Construction Corporation, execution of the Hanoi judgment but the court dismissed the
Pacific Mills, Inc. and Universal Steel Smelting Co., Inc.) as complaint on the ground of lack of jurisdiction of the Hanoi
Court, Tait not being a resident of that country.
In view of the foregoing considerations, our conclusion is that
we find no merit in the errors assigned to the lower court and
RULING the appealed judgment is in accordance with the law."
". ..It is said that the French law regarding summons, SOORAJMULL NAGARMULL vs. BINALBAGAN-ISABELA
according to its English translation presented by the appel- SUGAR COMPANY, INC.
lants, is of the following tenor: G.R. No. L-22470; May 28, 1970
"SEC. 69 (par. 8). Those who have no known residence in Facts: Under a Contract dated May 6, 1949, plaintiff, a foreign
France, in the place of their present residence; if the place is corporation with offices at Calcutta, India, agreed to sell to
unknown, the writ shall be posted at the main door of the hall defendant, a domestic corporation with offices at the Manila,
of the court where the Complaint has been filed; a second 1,700,000 pieces of Hessian bags at $26.20 per 100 bags,
copy shall be given to the Attorney-General of the Republic C.I.F. Iloilo. Shipment of these bags was to be made in equal
who shall visae the origilLal." But then, Exhibits E, E-1, F and installments of 425,000 pcs. or 425 bales during each of the
F-1 show that the summons alleged to have been addressed months of July, August, September and October, 1949.
to the appellee, was delivered in Manila on September 18,
1933, to J.M. Shotwell, a representative or agent of Churchill On September 8, 1949, plaintiff advised defendant that of the
& Tait, Inc., which is an entity entirely different from the 850 bales scheduled for shipment in July and August, the
appellee. former was able to ship only 310 bales owing to the alleged
failure of the Adamjee Jute Mills to supply the goods in due
Moreover, the evidence of record shows that the appellee time. In a letter dated September 29, 1949, defendant
was not in Hanoi during the time mentioned in the complaint requested plaintiff to ship 100 bales of the 540 bales
of the appellants, nor were his employees or representatives. defaulted from the July and August shipments. In this
The rule in matters of this nature is that judicial proceedings connection, it may also be mentioned that of the 425 bales
in a foreign country, regarding payment of money, are only scheduled for shipment in September, 54 bales were likewise
effective against a party if summons is duly served on him defaulted resulting in a total of 154 bales which is now the
within such foreign country before the proceedings. "The object of the controversy.
fundamental rule is that jurisdiction in personam, over
nonresidents, so as to sustain a money judgment, must be Meanwhile, on October 1, 1949, the Government of India
based upon personal service within the state which renders increased the export duty of jute bags from 80 to 350 rupees
the judgment. per ton. On October 27, 1949, plaintiff wrote to defendant for
an increase of $4,000.00 in its letter of credit to cover the
It can not be said that the decision rendered by the Court of shipment of 154 bales which under the contract should have
Hanoi should be conclusive to such an extent that it cannot been included in the July, August and September shipments.
be contested, for it merely constitutes, from the viewpoint of
our laws, prima facie evidence of the justness of appellants' On February 6, 1951, defendant received notification from
claim, and, as such, naturally admits proof to the contrary... the Bengal Chamber of Commerce Tribunal of Arbitration in
Calcutta, India, advising it that on December 28, 1950,
Plaintiff applied to said Tribunal for arbitration regarding their To the extent, therefore, that the decisions of the Tribunal of
claim. The Tribunal requested the defendant to send them its Arbitration of the Bengal Chamber of Commerce and of the
version of the case. This, defendant did on March 1, 1951, High Court of Judicature of Calcutta fail to apply to the facts
thru the then Government Corporate Counsel, former Justice of this case fundamental principles of contract, the same
Pompeyo Diaz. may be impeached, as they have been sufficiently
impeached by appellant, on the ground of clear mistake of
The Bengal Chamber of Commerce, Tribunal of Arbitration, law. We can not sanction a clear mistake of law that would
refused to sustain defendants contention and decided in work an obvious injustice upon appellant.
favor of the plaintiff, ordering the defendant to pay to the
plaintiff the sum of 18,562 rupees and 8 annas. This award Northwest Orient Airlines v. CA 241 SCRA 192 [1995]
was thereafter referred to the Calcutta High Court which
issued a decree affirming the award. FACTS [In 1974, an International Passenger Sales Agency
Agreement was entered into by plaintiff Northwest Orient
Issue: WON the decision of the Tribunal of Arbitration of the Airlines (Northwest) and defendant C.F. Sharp & Co. (Sharp),
Bengal Chamber of Commerce, as affirmed by the High Court through its Japan branch, whereby Northwest authorized
of Judicature of Calcutta, is enforceable in the Philippines. Sharp to sell the former's airlines tickets.
Sharp failed to remit the proceeds of the ticket sales it made
Held: Under the Rules, a judgment for a sum of money on behalf of Northwest under the agreement which led the
rendered by a foreign court is presumptive evidence of a latter to sue in Tokyo for collection of the unremitted amount,
right as between the parties and their successors in interest with claim for damages.
by a subsequent title, but when suit for its enforcement is
brought in a Philippine court, said judgment may be repelled The Tokyo District Court of Japan issued a writ of summons
by evidence of a want of jurisdiction, want of notice to the against Sharp at its office in Yokohama, Japan but the bailiff
party, collusion, fraud, or clear mistake of law or fact failed twice to serve the writs. Finally, the Tokyo District Court
decided to have the writs of summons served at Sharp's
There is no question at all that appellee was guilty of a head office in Manila. Sharp accepted the writs but despite
breach of contract when it failed to deliver one-hundred fifty- such receipt, it failed to appear at the hearings. The District
four Hessian bales which, according to the contract entered Court proceeded to hear the complaint and rendered
into with appellant, should have been delivered to the latter judgment ordering Sharp to pay Northwest the sum of
in the months of July, August and September, all of the year 83,158,195 Yen plus damages. Sharp failed to appeal and the
1949. It is equally clear beyond doubt that had these one- judgment became final and executory.
hundred fifty-four bales been delivered in accordance with
the contract aforesaid, the increase in the export tax due Northwest failed to execute the decision in Japan, hence, it
upon them would not have been imposed because said filed a suit for enforcement of the judgment before the
increased export tax became effective only on October 1, Regional Trial Court of Manila. Sharp filed its answer averring
1949. that the judgment of the Japanese court is null and void and
unenforceable in this jurisdiction having been rendered
without due and proper notice to Sharp.
The case for enforcement of judgment was tried on the Consequently, the party attacking a foreign judgment has the
merits. Sharp filed a Motion for Judgment on a Demurrer to burden of overcoming the presumption of its validity. Being
Evidence. The trial court granted the demurrer motion, hold- the party challenging the judgment rendered by the Japanese
ing that the foreign judgment in the Japanese court sought to court, SHARP had the duty to demonstrate the invalidity of
be enforced is null and void for want of jurisdiction over the such judgment. In an attempt to discharge that burden, it
person of the defendant. Northwest appealed but the Court contends that the extraterritorial service of summons
of Appeals sustained the trial court, holding that the process effected as its home office in the Philippines was not only
of the court has no extraterritorial effect and no jurisdiction ineffectual but also void, and the Japanese Court did not,
was acquired over the person of the defendant by serving therefore, acquire jurisdiction over it.
him beyond the boundaries of the state. Hence, this appeal
by Northwest.] It is settled that matters of remedy and procedure such as
those relating to the service of process upon a defendant are
RULING: "A foreign judgment is presumed to be valid and governed by the lex fori or the internal law of the forum. In
binding in the country from which it comes, until the contrary this case, it is the procedural law of Japan where the
is shown. It is also proper to presume the regularity of the judgment was rendered that determines the validity of the
proceedings and the giving of due notice therein. extraterritorial service'of process on SHARP. As to what this
law is is a question of fact, not of law. It may not be taken
Under Section 50, Rule 39 of the Rules of Court, a judgment judicial notice of and must be pleaded and proved like any
in an action in personam of a tribunal of a foreign country other fact. Sections 24 and 25, Rule 132 of the Rules of Court
having jurisdiction to pronounce the same is presumptive provide that it may be evidenced by an official publication or
evidence of a right as between the parties and their by a duly attested or authenticated copy thereof. It was then
successors-in-interest by a subsequent title. The judgment incumbent upon SHARP to present evidence as to what that
may, however, be assailed by evidence of want of Japanese procedural law is and to show taat under it, the
jurisdiction, want of notice to the party, collusion, fraud, or assailed extraterritorial service is invalid. It did not. Accord-
clear mistake of law or fact. Also, under Section 3 of Rule ingly, the presumption of validity and regularity of the service
131, a court, whether of the Philippines or elsewhere, enjoys of summons and the decision thereafter rendered by the
the presumption that it was acting in the lawful exercise of Japanese court must stand.
jurisdiction and has regularly performed its official duty.
Alternatively, in the light of the absence of proof regarding
Japanese law, the presumption of identity or similarity or the
so-called processual presumpcion may be invoked. Applying
it, the Japanese law on the matter is presumed to be similar
with the Philippine law on service of summons on a private
foreign corporation doing business ir, the Philippines. Section
14 of the Rules of Court provides that if the defendant is a
foreign corporation doing business in the Philippines, service
may be made: 1) on its resident agent designated in
accordance with law for that purpose, or 2) if there is no such Ministry of Foreign Affairs of Japan, which in turn, forwarded
resident agent, on the government official designated by law the same to the Japanese Embassy in Manila. Thereafter, the
to that effect, or 3) on any of its officers or agents within the court processes were delivered to the Ministry (now
Philippines. Department) of Foreign Affairs of the Philippines then to the
Executive Judge of the Court of First Instance (now Regional
If the foreign corporation has designated an agent to receive Trial Court) of Manila, who forthwith ordered Deputy Sheriff
summons, the designation is exclusive, and service of Rolando Balingit to serve the same on SHARP at its principal
summons is without force and gives the court no jurisdiction office in Manila. This service is equivalent to service on the
unless made upon him. proper government official under Section 14, Rule 14 of the
Where the corporation has no such great agent, service shall Rules of Court, in relation to Section 128 of the Corporation
be made on the government official designated by law, to Code. Hence, SHARP's contention that such manner of
wit: (a) the Insurance Commissioner, in the case of a foreign service is not valid under Philippine law holds no water.
insurance company; (b) the Superintendent of Banks, in the Inasmuch as SHARP was admittedly doing business in Japan
case of a foreign banking corporation; and (c) the Securities through its four registered branches at the time the collection
and Exchange Commission, in the case of other foreign suit against it was filed, then in the light of the processual
corporations duly licensed to do business in the Philippines. presumption, SHARP may be deemed a resident of JAPAN,
Whenever service of process is so made, the government and, as such, was amenable to the jurisdiction of the courts
office or official served shall transmit by mail a copy of the therein and may be deemed to have assented to the said
summons or other legal process to the corporation at its courts' lawful methods of serving process.
home or principal office. The sending of such copy is a
necessary part of the service. Accordingly, the extraterritorial service of summons on it by
the Japanese Court was valid not only under the processual
Nowhere in its pleadings did SHARP profess to having had a presumption but also because of the presumption of
resident agent authorized to receive court processes in regularity of performance of official duty.
Japan. This silence could only mean, or at least create an
impression, that it had none. Hence, service on the NORTHWEST ORIENT AIRLINES, INC. vs. CA and C.F.
designated government official or any of its officers or agents SHARP & COMPANY INC. G.R. No. 112573 February 9,
in Japan could be availed of. 1995

As found by the Court of Appeals, it was the Tokyo District FACTS: Petitioner Northwest Orient Airlines, Inc.
Court which ordered that summons for SHARP be served at (NORTHWEST), a corporation organized under the laws of the
its head office in the Philippines after the two attempts of State of Minnesota, U.S.A., sought to enforce in the RTC-
service had failed. The Tokyo District Court requested the Manila, a judgment rendered in its favor by a Japanese court
Supreme Court of Japan to cause the delivery of the against private respondent C.F. Sharp & Company, Inc.,
summons and other legal documents to the Philippines. (SHARP), a corporation incorporated under Philippine laws.
Acting on that request, the Supreme Court of Japan sent the
summons together with the other legal documents to the factual and procedural antecedents of this controversy:
On May 9, 1974, Northwest Airlines and Sharp, through its rendered judgment ordering the defendant to pay the
Japan branch, entered into an International Passenger Sales plaintiff the sum of 83,158,195 Yen and damages for delay at
Agency Agreement, whereby the former authorized the latter the rate of 6% per annum from August 28, 1980 up to and
to sell its air transportation tickets. Unable to remit the until payment is completed (pp. 12-14, Records).
proceeds of the ticket sales made by defendant on behalf of
the plaintiff under the said agreement, plaintiff on March 25, On March 24, 1981, defendant received from Deputy Sheriff
1980 sued defendant in Tokyo, Japan, for collection of the Balingit copy of the judgment. Defendant not having
unremitted proceeds of the ticket sales, with claim for appealed the judgment, the same became final and
damages. executory.

On April 11, 1980, a writ of summons was issued by the 36th Plaintiff was unable to execute the decision in Japan, hence,
Civil Department, Tokyo District Court of Japan against on May 20, 1983, a suit for enforcement of the judgment was
defendant at its office at the Taiheiyo Building, 3rd floor, 132, filed by plaintiff before the Regional Trial Court of Manila
Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture. Branch 54.
The attempt to serve the summons was unsuccessful defendant filed its answer averring that the judgment of the
because the bailiff was advised by a person in the office that Japanese Court: (1) the foreign judgment sought to be
Mr. Dinozo, the person believed to be authorized to receive enforced is null and void for want of jurisdiction and (2) the
court processes was in Manila and would be back on April 24, said judgment is contrary to Philippine law and public policy
1980. and rendered without due process of law.
On April 24, 1980, bailiff returned to the defendants office to In its decision, the Court of Appeals sustained the trial court.
serve the summons. Mr. Dinozo refused to accept the same It agreed with the latter in its reliance upon Boudard vs. Tait
claiming that he was no longer an employee of the wherein it was held that the process of the court has no
defendant. extraterritorial effect and no jurisdiction is acquired over the
After the two attempts of service were unsuccessful, the person of the defendant by serving him beyond the
judge of the Tokyo District Court decided to have the boundaries of the state. To support its position, the Court of
complaint and the writs of summons served at the head Appeals further stated:
office of the defendant in Manila. On July 11, 1980, the In an action strictly in personam, such as the instant case,
Director of the Tokyo District Court requested the Supreme personal service of summons within the forum is required for
Court of Japan to serve the summons through diplomatic the court to acquire jurisdiction over the defendant
channels upon the defendants head office in Manila. (Magdalena Estate Inc. vs. Nieto, 125 SCRA 230). To confer
On August 28, 1980, defendant received from Deputy Sheriff jurisdiction on the court, personal or substituted service of
Rolando Balingit the writ of summons (p. 276, Records). summons on the defendant not extraterritorial service is
Despite receipt of the same, defendant failed to appear at necessary.
the scheduled hearing. Thus, the Tokyo Court proceeded to ISSUE: whether a Japanese court can acquire jurisdiction over
hear the plaintiffs complaint and on [January 29, 1981], a Philippine corporation doing business in Japan by serving
summons through diplomatic channels on the Philippine Philippines, service may be made: (1) on its resident agent
corporation at its principal office in Manila after prior designated in accordance with law for that purpose, or, (2) if
attempts to serve summons in Japan had failed. there is no such resident agent, on the government official
designated by law to that effect; or (3) on any of its officers
HELD: YES. A foreign judgment is presumed to be valid and or agents within the Philippines.
binding in the country from which it comes, until the contrary
is shown. It is also proper to presume the regularity of the Where the corporation has no such agent, service shall be
proceedings and the giving of due notice therein. 6 made on the government official designated by law, to wit:
The judgment may, however, be assailed by evidence of (a) the Insurance Commissioner in the case of a foreign
want of jurisdiction, want of notice to the party, collusion, insurance company; (b) the Superintendent of Banks, in the
fraud, or clear mistake of law or fact.(See Sec. 50, R 39) case of a foreign banking corporation; and (c) the Securities
and Exchange Commission, in the case of other foreign
Being the party challenging the judgment rendered by the corporations duly licensed to do business in the Philippines.
Japanese court, SHARP had the duty to demonstrate the
invalidity of such judgment. Nowhere in its pleadings did SHARP profess to having had a
resident agent authorized to receive court processes in
It is settled that matters of remedy and procedure such as Japan.
those relating to the service of process upon a defendant are While it may be true that service could have been made upon
governed by the lex fori or the internal law of the forum. 8 In any of the officers or agents of SHARP at its three other
this case, it is the procedural law of Japan where the branches in Japan, the availability of such a recourse would
judgment was rendered that determines the validity of the not preclude service upon the proper government official, as
extraterritorial service of process on SHARP. As to what this stated above.
law is is a question of fact, not of law. As found by the respondent court, two attempts at service
It was then incumbent upon SHARP to present evidence as to were made at SHARPs Yokohama branch. Both were
what that Japanese procedural law is and to show that under unsuccessful.
it, the assailed extraterritorial service is invalid. It did not. The Tokyo District Court requested the Supreme Court of
Accordingly, the presumption of validity and regularity of the Japan to cause the delivery of the summons and other legal
service of summons and the decision thereafter rendered by documents to the Philippines. Acting on that request, the
the Japanese court must stand. Supreme Court of Japan sent the summons together with the
Alternatively in the light of the absence of proof regarding other legal documents to the Ministry of Foreign Affairs of
Japanese law, the presumption of identity or similarity or the Japan which, in turn, forwarded the same to the Japanese
so-called processual presumption may be invoked. Applying Embassy in Manila . Thereafter, the court processes were
it, the Japanese law on the matter is presumed to be similar delivered to the Ministry (now Department) of Foreign Affairs
with the Philippine law on service of summons on a private of the Philippines, then to the Executive Judge of the Court of
foreign corporation doing business in the Philippines. First Instance (now Regional Trial Court) of Manila, who
Section 14, Rule 14 of the Rules of Court provides that if the forthwith ordered Deputy Sheriff Rolando Balingit to serve
defendant is a foreign corporation doing business in the the same on SHARP at its principal office in Manila. This
service is equivalent to service on the proper government the unremitted proceeds of the ticket sales, with claim for
official under Section 14, Rule 14 of the Rules of Court, in damages
relation to Section 128 of the Corporation Code. Hence,
SHARPs contention that such manner of service is not valid April 11, 1980: writ of summons was issued by the 36th Civil
under Philippine laws holds no water. Department, Tokyo District Court of Japan

We find NORTHWESTs claim for attorneys fees, litigation The attempt to serve the summons was unsuccessful
expenses, and exemplary damages to be without merit. We because Mr. Dinozo was in Manila and would be back on April
find no evidence that would justify an award for attorneys 24, 1980
fees and litigation expenses under Article 2208 of the Civil April 24, 1980: Mr. Dinozo returned to C.F. Office to serve the
Code of the Philippines. Nor is an award for exemplary summons but he refused to receive claiming that he no
damages warranted. longer an employee
WHEREFORE, the instant petition is partly GRANTED, and the After the 2 attempts of service were unsuccessful, Supreme
challenged decision is AFFIRMED insofar as it denied Court of Japan sent the summons together with the other
NORTHWESTs claims for attorneys fees, litigation expenses, legal documents to the Ministry of Foreign Affairs of Japan>
and exemplary damages but REVERSED insofar as in Japanese Embassy in Manila>Ministry (now Department) of
sustained the trial courts dismissal of NORTHWESTs Foreign Affairs of the Philippines>Executive Judge of the
complaint in Civil Case No. 83-17637 of Branch 54 of the Court of First Instance (now Regional Trial Court) of Manila
Regional Trial Court of Manila, and another in its stead is who ordered Deputy Sheriff Rolando Balingit>C.F. Main Office
hereby rendered ORDERING private respondent C.F. SHARP L
COMPANY, INC. to pay to NORTHWEST the amounts adjudged August 28, 1980: C.F. received from Deputy Sheriff Rolando
in the foreign judgment subject of said case, with interest Balingit the writ of summons but failed to appear at the
thereon at the legal rate from the filing of the complaint scheduled hearing.
therein until the said foreign judgment is fully satisfied.
January 29, 1981: Tokyo Court rendered judgment ordering
G.R. No. 112573 February 9, 1995 the C.F. to pay 83,158,195 Yen and damages for delay at the
rate of 6% per annum from August 28, 1980 up to and until
Lessons Applicable: Territoriality Principle (conflicts of law) payment is completed
FACTS: Northwest Airlines (Northwest) and C.F. Sharp & March 24, 1981: C.F. received from Deputy Sheriff Balingit
Company (C.F.), through its Japan branch, entered into an copy of the judgment. C.F. did not appeal so it became final
International Passenger Sales Agency Agreement, whereby and executory
the Northwest authorized the C.F. to sell its air transportation
tickets May 20, 1983: Northwest filed a suit for enforcement of the
judgment a RTC
March 25, 1980: Unable to remit the proceeds of the ticket
sales, Northwest sued C.F. in Tokyo, Japan, for collection of
July 16, 1983: C.F. averred that the Japanese Court sought to (1) on its resident agent designated in accordance with law
be enforced is null and void and unenforceable in this for that purpose, or,
jurisdiction having been rendered without due and proper
notice and/or with collusion or fraud and/or upon a clear (2) if there is no such resident agent, on the government
mistake of law and fact. The foreign judgment in the official designated by law to that effect; or
Japanese Court sought in this action is null and void for want (3) on any of its officers or agents within the Philippines.
of jurisdiction over the person of the defendant considering
that this is an action in personam. The process of the Court If the foreign corporation has designated an agent to receive
in Japan sent to the Philippines which is outside Japanese summons, the designation is exclusive, and service of
jurisdiction cannot confer jurisdiction over the defendant in summons is without force and gives the court no jurisdiction
the case before the Japanese Court of the case at bar unless made upon him.

CA sustained RTC: Court agrees that if the C.F. in a foreign Where the corporation has no such agent, service shall be
court is a resident in the court of that foreign court such made on the government official designated by law, to wit:
court could acquire jurisdiction over the person of C.F. but it
must be served in the territorial jurisdiction of the foreign (a) the Insurance Commissioner in the case of a foreign
court insurance company

ISSUE: W/N the Japanese Court has jurisdiction over C.F. (b) the Superintendent of Banks, in the case of a foreign
banking corporation
HELD: YES. instant petition is partly GRANTED, and the
challenged decision is AFFIRMED insofar as it denied (c) the Securities and Exchange Commission, in the case of
NORTHWEST's claims for attorneys fees, litigation expenses, other foreign corporations duly licensed to do business in the
and exemplary damages Philippines. Whenever service of process is so made, the
government office or official served shall transmit by mail a
Consequently, the party attacking (C.F.) a foreign judgment copy of the summons or other legal proccess to the
has the burden of overcoming the presumption of its validity corporation at its home or principal office. The sending of
such copy is a necessary part of the service.
Accordingly, the presumption of validity and regularity of the
service of summons and the decision thereafter rendered by The service on the proper government official under Section
the Japanese court must stand. 14, Rule 14 of the Rules of Court, in relation to Section 128 of
the Corporation Code
Applying it, the Japanese law on the matter is presumed to
be similar with the Philippine law on service of summons on a Our laws and jurisprudence indicate a purpose to assimilate
private foreign corporation doing business in the Philippines. foreign corporations, duly licensed to do business here, to the
Section 14, Rule 14 of the Rules of Court provides that if the status of domestic corporations
defendant is a foreign corporation doing business in the
Philippines, service may be made: We think it would be entirely out of line with this policy
should we make a discrimination against a foreign
corporation, like the petitioner, and subject its property to the courts therein and may be deemed to have assented to
the harsh writ of seizure by attachment when it has complied the said courts' lawful methods of serving process.
not only with every requirement of law made specially of
foreign corporations, but in addition with every requirement Accordingly, the extraterritorial service of summons on it by
of law made of domestic corporations the Japanese Court was valid not only under the processual
presumption but also because of the presumption of
In as much as SHARP was admittedly doing business in Japan regularity of performance of official duty.
through its four duly registered branches at the time the
collection suit against it was filed, then in the light of the
processual presumption, SHARP may be deemed a resident
of Japan, and, as such, was amenable to the jurisdiction of