Bank of America, NT vs. American Realty Corporation, .G.R No. 133876, Dec.

29,
1999

:FACTS

Bank of America, duly licensed to do business in the Philippines and existing under
the laws of California, USA, granted US Dollar loans to certain foreign corporate
borrowers. These loans were secured by two real estate mortgages by American
Realty, a domestic corporation. When the borrowers defaulted, Bank of America sued
them before English courts. While these cases were pending, Bank of America
likewise judicially foreclosed the real estate mortgages in the Philippines. Thus,
.American Realty sued for damages against Bank of America

ISSUE: Whether or not Bank of America can judicially foreclose the real estate
mortgages despite pendency of the civil suits before English courts

:HELD

English law purportedly allows the filing of judicial foreclosure of mortgage despite
pendency of civil suit for collection. But English law was never properly impleaded
.and proven. Thus, the doctrine of processual presumption applies

SC further held that even assuming arguendo that English laws were proven, said
foreign law would still no find applicability. When the foreign law, judgment or
contract is contrary to a sound and establishedpublic policy of the forum, the said
.foreign law, judgment or order shall not be applied

Additionally, prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good customs shall not be
rendered ineffective b laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country. The public policysought to be protected
in the instant case is the principle imbedded in our jurisdiction proscribing the
.splitting of a single cause of action

Moreover, the foreign law should not be applied when its application would work
.undeniable injustice to the citizens or residents of the forum