Conflicts of Laws- Case Digests (Contractual Relations)

7/25/2019 Conflicts of Laws- Case Digests (Contractual Relations)

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PAKISTAN INTERNATIONAL AIRLINES CORPORATION v. HON. BLAS F. OPLE, FARRALES,

MAMASIG [G.R. No. 61594. Septe!e" #$, 199%.&

N't("e o) t*e C'+e A complaint for illegal dismissal and non-payment of company benefits and

bonuses against PIA with the then Ministry of Labor and Employment.

F'-t+ o) t*e C'+e Pakistan International Airlines Corporation !PIA!"# a foreign corporation licensed

to do business in the Philippines# e$ecuted in Manila two %" separate contracts of employment# one

with pri&ate respondent Ethelynne '. (arrales and the other with pri&ate respondent Ma. M.C.

Mamasig.

)he contracts pro&ided that *" the +uration of Employment is for a period of , years# %" PIA

reser&es the right to terminate this agreement at any time by gi&ing the EMPLEE notice in writing in

ad&ance one month before the intended termination or in lieu thereof# by paying the EMPLEE wages

e/ui&alent to one month0s salary1 and ," the agreement shall be construed and go&erned under and

by the laws of Pakistan# and only the Courts of 2arachi# Pakistan shall ha&e the 3urisdiction to consider

any matter arising out of or under this agreement.

(arrales and Mamasig then commenced training in Pakistan and after such# they began discharging

their 3ob functions as flight attendants with base station in Manila and flying assignments to different

parts of the Middle East and Europe.

4oughly one *" year and four 5" months prior to the e$piration of the contracts of employment# PIA

sent separate letters to pri&ate respondents ad&ising both that their ser&ices as flight stewardesses

would be terminated. PIA claimed that both were habitual absentees# were in the habit of bringing in

from abroad si6eable /uantities of !personal effects!.

P"o" P"o-ee/0+ Regional Director of MOLEordered the reinstatement of pri&ate respondents with

full backwages or# in the alternati&e# the payment to them of the amounts e/ui&alent to their salaries

for the remainder of the fi$ed three-year period of their employment contracts ha&ing attained the

status of regular employees.

On appeal the Deputy Minister of MOLE# adopted the findings of fact and conclusions of the 4egional

+irector and affirmed the latter0s award sa&e for the portion thereof gi&ing PIA the option# in lieu of

reinstatement# !to pay each of the complainants 7pri&ate respondents8 their salaries corresponding to

the une$pired portion of the contract7s8 7of employment8 . . .!

Hence, this instant Petition for Certiorari by PIA.

I++(e 9ere the orders issued in disregard and in &iolation of petitioner0s rights under the

employment contracts with pri&ate respondents:


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He2/ '0/ R'to NO.

PIA contends that the pro&isions of the contract must go&ern rather than the general pro&isions of the

Labor Code. PIA in&okes paragraphs ; of the contract that set a term of three ," years for that

relationship# e$tendible by agreement between the parties and paragraph < which pro&ided that PIA

had the right to terminate the employment agreement at any time by gi&ing one-month0s notice to the

employee or# in lieu of such notice# one-month0s salary.

A contract freely entered into should# of course# be respected# as PIA argues# since a contract is the

law between the parties. )he principle of party autonomy in contracts is not# howe&er# an absolute

principle. )he rule in Article *,== of the

Labor Code clearly appears to ha&e been# as already obser&ed# to pre&ent circum&ention of the

employee0s right to be secure in his tenure# the clause in said article indiscriminately and completely

ruling out all written or oral agreements conflicting with the concept of regular employment as defined

therein should be construed to refer to the substanti&e e&il that the Code itself has singled out?agreements entered into precisely to circum&ent security of tenure. &irtua*awlibrary

E$amining the pro&isions of paragraphs ; and < of the employment agreement between petitioner PIA

and pri&ate respondents# we consider that those pro&isions must be read together and when so read#

the fi$ed period of three ," years specified in paragraph ; will be seen to ha&e been effecti&ely

neutrali6ed by the pro&isions of paragraph < of that agreement. Paragraph < in effect took back from

the employee the fi$ed three ,"-year period ostensibly granted by paragraph ; by rendering such

period in effect a facultati&e one at the option of the employer PIA. (or petitioner PIA claims to be

authori6ed to shorten that term# at any time and for any cause satisfactory to itself# to a one-month

period# or e&en less by simply paying the employee a month0s salary. 'ecause the net effect ofparagraphs ; and < of the agreement here in&ol&ed is to render the employment of pri&ate

respondents (arrales and Mamasig basically employment at the pleasure of petitioner PIA# the Court

considers that paragraphs ; and < were intended to pre&ent any security of tenure from accruing in

fa&or of pri&ate respondents e&en during the limited period of three ," years# *, and thus to escape

completely the thrust of Articles %>= and %>* of the Labor Code.

Petitioner PIA cannot take refuge in paragraph *= of its employment agreement which specifies# firstly#


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the law of Pakistan as the applicable law of the agreement and# secondly# lays the &enue for

settlement of any dispute arising out of or in connection with the agreement !only 7in8 courts of

2arachi# Pakistan.!

)he circumstances of the case show substanti&e contacts between Philippine law and Philippine courts#

on the one hand# and the relationship between the parties# upon the other? the contract was not only

e$ecuted in the Philippines# it was also performed here# at least partially1 pri&ate respondents are

Philippine citi6ens and residents# while petitioner# although a foreign corporation# is licensed to do

business and actually doing business" and hence resident in the Philippines1 lastly# pri&ate

respondents were based in the Philippines in between their assigned flights to the Middle East and

Europe. All the abo&e contacts point to the Philippine courts and administrati&e agencies as a proper

forum for the resolution of contractual disputes between the parties. @nder these circumstances#

paragraph *= of the employment agreement cannot be gi&en effect so as to oust Philippine agencies

and courts of the 3urisdiction &ested upon them by Philippine law. (inally# and in any e&ent# the

petitioner PIA did not undertake to plead and pro&e the contents of Pakistan law on the matter1 it

must therefore be presumed that the applicable pro&isions of the law of Pakistan are the same as the

applicable pro&isions of Philippine law.

R3LING9e conclude that pri&ate respondents (arrales and Mamasig were illegally dismissed.

Petition for Certiorariis hereby +IMIE+ for lack of merit# and the rder dated *% August *B>% of

public respondent is hereby A((I4ME+# e$cept that *" pri&ate respondents are entitled to three ,"

years backwages# without deduction or /ualification1 and %" should reinstatement of pri&ate

respondents to their former positions or to substantially e/ui&alent positions not be feasible# then

petitioner shall# in lieu thereof# pay to pri&ate respondents separation pay amounting to one *"-

month0s salary for e&ery year of ser&ice actually rendered by them and for the three ," years putati&e

ser&ice by pri&ate respondents. )he )emporary 4estraining rder issued on *, eptember *B>% ishereby LI()E+. Costs against petitioner.


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KING MA3 3 v. FRANCISCO SCIP [G.R. No. L5$97. Ap"2 #8, 1954. &

N't("e o) t*e C'+e )his is an action to collect P;B#=>%.B%# together with lawful interests from *5

ctober *B5# the date of the written demand for payment# and costs.

F'-t+ o) t*e C'+e )he claim arises out of a shipment of *#=== tons of coconut oil emulsion sold by

the plaintiff# as agent of the defendant# to Das. Ma$well (assett# who in turn assigned it to (ortrade

Corporation.

@nder an agency agreement in ew ork addressed to the defendant and accepted by the latter# the

plaintiff was made the e$clusi&e agent of the defendant 0in the sale of Philippine coconut oil and its

deri&ati&es outside the Philippines and was to be paid % *F% per cent on the total actual sale price of

sales obtained through his efforts and in addition thereto ;= per cent of the difference between the

authori6ed sale price and the actual sale price.

'oth parties are in agreement that the only transaction or sale made by the plaintiff# as agent of the

defendant# was that of *#=== metric tons of coconut oil emulsion f.o.b. in Manila# Philippines# to Das.

Ma$well (assett.

P"o" p"o-ee/0+A 3udgment was rendered as prayed for in the complaint of the plaintiff. A motion

for reconsideration was denied. A motion for new trial was filed but the same was denied. )he

defendant is appealing from said 3udgment.

I++(eIs the plaintiff entitled to % G percent commission unpaid on the remaining shipment of

coconut oil emulsion:

He2/ '0/ R'to ES. )he defendant contends that the transaction for the sale of *#=== metric tons

of coconut oil emulsion was not co&ered by the agency contract and that it was an independent and

separate transaction for which the plaintiff has been duly compensated.

)he letter upon which defendant relies for his defense does not stipulate on the commission to be paid

to the plaintiff as agent# and yet if he paid the plaintiff a % *F% per cent commission on the first three

coconut oil emulsion shipments# there is no reason why he should not pay him the same commission

on the last shipment amounting to H,#B5.B5. )here can be no doubt that the sale of *#=== metric

tons of coconut oil emulsion was not a separate and independent contract from that of the agency

agreement of o&ember and accepted on %% o&ember *B5< by the defendant as e&idenced by&arious correspondence between the plaintiff and the defendant recogni6ing the fact that the

transaction was part of the agency contract.

Although the contract of agency was e$ecuted in ew ork# the Court of (irst Instance of Manila has

3urisdiction to try a personal action for the collection of a sum of money arising from such contract#

because a non-resident may sue a resident in the courts of this country where the defendant may be

summoned and his property le&iable upon e$ecution in case of a fa&orable# final and e$ecutory

3udgment. )here is no conflict of laws in&ol&ed in this case because it is only a /uestion of enforcing


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an obligation created by or arising from contract1 and unless the enforcement of the contract be

against public policy of the forum# it must be enforced.

R3LING)he plaintiff is entitled to collect P#;>B.>> for commission and P;=#=== for one-half of the

o&erprice# or a total of P;#;>B.>># lawful interests thereon from the date of the filing of the

complaint# and costs in both instances. As thus modified the 3udgment appealed from is affirmed# with

costs against theAppellant.

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Conflicts of Laws- Case Digests (Contractual Relations)