LIST OF CASES 1

BANK OF AMERICA VS. AMERICAN REALTY CORPORATION

GR 133876 December 29, 1999

Facts:Petitioner granted loans to 3 foreign corporations. As security, the latter mortgaged a property located in the Philippines owned by herein respondent ARC. ARC is a third party mortgagor who pledged its own property in favor of the 3 debtor-foreign corporations.

The debtors failed to pay. Thus, petitioner filed collection suits in foreign courts to enforce the loan. Subsequently, it filed a petition in the Sheriff to extra-judicially foreclose the said mortgage, which was granted.

On 12 February 1993, private respondent filed before the Pasig RTC, Branch 159, an action for damages against the petitioner, for the latter’s act of foreclosing extra-judicially the real estate mortgages despite the pendency of civil suits before foreign courts for the collection of the principal loan.

Issue:WON petitioner’s act of filing a collection suit against the principal debtors for the recovery of the loan before foreign courts constituted a waiver of the remedy of foreclosure.

Held: Yes.

1. Loan; Mortgage; remedies:

In the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor either a personal action or debt or a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of the two remedies is complete in itself.In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative. Notably, an election of one remedy operates as a waiver of the other. For this purpose, a remedy is deemed chosen upon the filing of the suit for collection or upon the filing of the complaint in an action for foreclosure of mortgage. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the petition not with any court of justice but with the Office of the Sheriff of the province where the sale is to be made.

In the case at bar, petitioner only has one cause of action which is non-payment of the debt. Nevertheless, alternative remedies are available for its enjoyment and exercise. Petitioner then may opt to exercise only one of two remedies so as not to violate the rule against splitting a cause of action.

Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency of filing four civil suits before foreign courts, necessarily abandoned the remedy to foreclose the real estate mortgages constituted over the properties of third-party mortgagor and herein private respondent ARC. Moreover, by filing the four civil actions and by eventually foreclosing extra-judicially the mortgages, petitioner in effect transgressed the rules against splitting a cause of action well-enshrined in jurisprudence and our statute books.

2. Conflicts of Law

Incidentally, petitioner alleges that under English Law, which according to petitioner is the governing law with regard to the principal agreements, the mortgagee does not lose its security interest by simply filing civil actions for sums of money.

We rule in the negative.

In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that there is no judicial notice of any foreign law. A foreign law must be properly pleaded and proved as a fact. Thus, if the foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law is the same as our local or domestic or internallaw. This is what we refer to as the doctrine of processual presumption.

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved in said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public 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 by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the splitting up of a single cause of action.

Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental principles of Conflict of Laws.Clearly then, English Law is not applicable.

1 CONFLICT OF LAWS AGUSTIN, E.P.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 133876 December 29, 1999

BANK OF AMERICA, NT and SA, petitioner, vs.AMERICAN REALTY CORPORATION and COURT OF APPEALS, respondents.

BUENA, J.:

Does a mortgage-creditor waive its remedy to foreclose the real estate mortgage constituted over a third party mortgagor's property situated in the Philippines by filing an action for the collection of the principal loan before foreign courts?

Sought to be reversed in the instant petition for review on certiorari under Rule 45 of the Rules of Court are the decision 1 of public respondent Court of Appeals in CA G.R. CV No. 51094, promulgated on 30 September 1997 and its resolution, 2 dated 22 May 1998, denying petitioner's motion for reconsideration.

Petitioner Bank of America NT & SA (BANTSA) is an international banking and financing institution duly licensed to do business in the Philippines, organized and existing under and by virtue of the laws of the State of California, United States of America while private respondent American Realty Corporation (ARC) is a domestic corporation.

Bank of America International Limited (BAIL), on the other hand, is a limited liability company organized and existing under the laws of England.

As borne by the records, BANTSA and BAIL on several occasions granted three major multi-million United States (US) Dollar loans to the following corporate borrowers: (1) Liberian Transport Navigation, S.A.; (2) El Challenger S.A. and (3) Eshley Compania Naviera S.A. (hereinafter collectively referred to as "borrowers"), all of which are existing under and by virtue of the laws of the Republic of Panama and are foreign affiliates of privaterespondent. 3

Due to the default in the payment of the loan amortizations, BANTSA and the corporate borrowers signed and entered into restructuring agreements. As additional security for the restructured loans, private respondent ARC as third party mortgagor executed two real estate mortgages, 4 dated 17 February 1983 and 20 July 1984, over its parcels of land including improvements thereon, located at Barrio Sto. Cristo, San Jose Del Monte, Bulacan, and which are covered by Transfer Certificate of Title Nos. T-78759, T-78760, T-78761, T-78762 and T-78763.

Eventually, the corporate borrowers defaulted in the payment of the restructured loans prompting petitioner BANTSA to file civil actions 5 before foreign courts for the collection of the principal loan, to wit:

a) In England, in its High Court of Justice, Queen's Bench Division, Commercial Court (1992-Folio No 2098) against Liberian Transport Navigation S.A., Eshley Compania Naviera S.A., El Challenger S.A., Espriona Shipping Company S.A., Eddie Navigation Corp., S.A., Eduardo Katipunan Litonjua and Aurelio Katipunan Litonjua on June 17, 1992.

b) In England, in its High Court of Justice, Queen's Bench Division, Commercial Court (1992-Folio No. 2245) against El Challenger S.A., Espriona Shipping Company S.A., Eduardo Katipuan Litonjua & Aurelio Katipunan Litonjua on July 2, 1992;

c) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4039 of 1992) against Eshley Compania Naviera S.A., El Challenger S.A., Espriona Shipping Company S.A. Pacific Navigators Corporation, Eddie Navigation Corporation S.A., Litonjua Chartering (Edyship) Co., Inc., Aurelio Katipunan Litonjua, Jr. and Eduardo Katipunan Litonjua on November 19, 1992; and

d) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4040 of 1992) against Eshley Compania Naviera S.A., El Challenger S.A., Espriona Shipping Company, S.A., Pacific Navigators Corporation, Eddie Navigation Corporation S.A., Litonjua Chartering (Edyship) Co., Jr. and Eduardo Katipunan Litonjua on November 21, 1992.


In the civil suits instituted before the foreign courts, private respondent ARC, being a third party mortgagor, was private not impleaded as party-defendant.

On 16 December 1992, petitioner BANTSA filed before the Office of the Provincial Sheriff of Bulacan, Philippines an application for extrajudicial foreclosure 6 of real estate mortgage.

On 22 January 1993, after due publication and notice, the mortgaged real properties were sold at public auction in an extrajudicial foreclosure sale, with Integrated Credit and Corporation Services Co (ICCS) as the highest bidder for the sum of Twenty four Million Pesos (P24,000.000.00). 7

On 12 February 1993, private respondent filed before the Pasig Regional Trial Court, Branch 159, an action for damages 8 against the petitioner, for the latter's act of foreclosing extrajudicially the real estate mortgages despite the pendency of civil suits before foreign courts for the collection of the principal loan.

In its answer 9 petitioner alleged that the rule prohibiting the mortgagee from foreclosing the mortgage after an ordinary suit for collection has been filed, is not applicable in the present case, claiming that:

a) The plaintiff, being a mere third party mortgagor and not a party to the principal restructuring agreements, was never made a party defendant in the civil cases filed in Hongkong and England;

b) There is actually no civil suit for sum of money filed in the Philippines since the civil actions were filed in Hongkong and England. As such, any decisions (sic) which may be rendered in the abovementioned courts are not (sic) enforceable in the Philippines unless a separate action to enforce the foreign judgments is first filed in the Philippines, pursuant to Rule 39, Section 50 of the Revised Rules of Court.

c) Under English Law, which is the governing law under the principal agreements, the mortgagee does not lose its security interest by filing civil actions for sums of money.

On 14 December 1993, private respondent filed a motion forsuspension 10 of the redemption period on the ground that "it cannot exercise said right of redemption without

at the same time waiving or contradicting its contentions in the case that the foreclosure of the mortgage on its properties is legally improper and therefore invalid."

In an order 11 dated 28 January 1994, the trial court granted the private respondent's motion for suspension after which a copy of said order was duly received by the Register of Deeds of Meycauayan, Bulacan.

On 07 February 1994, ICCS, the purchaser of the mortgaged properties at the foreclosure sale, consolidated its ownership over the real properties, resulting to the issuance of Transfer Certificate of Title Nos. T-18627, T-186272, T-186273, T-16471 and T-16472 in its name.

On 18 March 1994, after the consolidation of ownership in its favor, ICCS sold the real properties to Stateland Investment Corporation for the amount of Thirty Nine Million Pesos (P39,000,000.00). 12 Accordingly, Transfer Certificate of Title Nos. T-187781(m), T-187782(m), T-187783(m), T-16653P(m) and T-16652P(m) were issued in the latter's name.

After trial, the lower court rendered a decision 13 in favor of private respondent ARC dated 12 May 1993, the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered declaring that the filing in foreign courts by the defendant of collection suits against the principal debtors operated as a waiver of the security of the mortgages. Consequently, the plaintiff's rights as owner and possessor of the properties then covered by Transfer Certificates of Title Nos. T-78759, T-78762, T-78763, T-78760 and T-78761, all of the Register of Deeds of Meycauayan, Bulacan, Philippines, were violated when the defendant caused the extrajudicial foreclosure of the mortgages constituted thereon.

Accordingly, the defendant is hereby ordered to pay the plaintiff the following sums, all with legal interest thereon from the date of the filing of the complaint up to the date of actual payment:

1) Actual or compensatory damages in the amount of Ninety Nine Million Pesos (P99,000,000.00);


2) Exemplary damages in the amount of Five Million Pesos (P5,000,000.00); and

3) Costs of suit.

SO ORDERED.

On appeal, the Court of Appeals affirmed the assailed decision of the lower court prompting petitioner to file a motion for reconsideration which the appellate court denied.

Hence, the instant petition for review 14 on certiorari where herein petitioner BANTSA ascribes to the Court of Appeals the following assignment of errors:

1. The Honorable Court of Appeals disregarded the doctrines laid down by this Hon. Supreme Court in the cases of Caltex Philippines, Inc. vs. Intermediate Appellate Court docketed as G.R. No. 74730 promulgated on August 25, 1989 and Philippine Commercial International Bank vs. IAC, 196 SCRA 29 (1991 case), although said cases were duly cited, extensively discussed and specifically mentioned, as one of the issues in the assignment of errors found on page 5 of the decision dated September 30, 1997.

2. The Hon. Court of Appeals acted with grave abuse of discretion when it awarded the private respondent actual and exemplary damages totalling P171,600,000.00, as of July 12, 1998 although such huge amount was not asked nor prayed for in private respondent's complaint, is contrary to law and is totally unsupported by evidence (sic).

In fine, this Court is called upon to resolve two main issues:

1. Whether or not the petitioner's act of filing a collection suit against the principal debtors for the recovery of the loan before foreign courts constituted a waiver of the remedy of foreclosure.

2. Whether or not the award by the lower court of actual and exemplary damages in favor of private respondent ARC, as third-party mortgagor, is proper.

The petition is bereft of merit.

First, as to the issue of availability of remedies, petitioner submits that a waiver of the remedy of foreclosure requires the concurrence of two requisites: an ordinary civil action for collection should be filed and subsequently a final judgment be correspondingly rendered therein.

According to petitioner, the mere filing of a personal action to collect the principal loan does not suffice; a final judgment must be secured and obtained in the personal action so that waiver of the remedy of foreclosure may be appreciated. To put it differently, absent any of the two requisites, the mortgagee-creditor is deemed not to have waived the remedy of foreclosure.

We do not agree.

Certainly, this Court finds petitioner's arguments untenable and upholds the jurisprudence laid down in Bachrach 15 and similar cases adjudicated thereafter, thus:

In the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor either a personal action or debt or a real action to foreclose the mortgage. In other words, he may he may pursue either of the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of the two remedies is complete in itself. Thus, an election to bring a personal action will leave open to him all the properties of the debtor for attachment and execution, even including the mortgaged property itself. And, if he waives such personal action and pursues his remedy against the mortgaged property, an unsatisfied judgment thereon would still give him the right to sue for a deficiency judgment, in which case, all the properties of the defendant, other than the mortgaged property, are again open to him for the satisfaction of the deficiency. In either case, his remedy is complete, his cause of action undiminished, and any advantages attendant to the pursuit of one or the other remedy are purely accidental and are all under his right of election. On the other hand, a rule that would authorize the plaintiff to bring a personal action against the debtor and simultaneously or successively another action against the mortgaged property, would result not only in multiplicity of


suits so offensive to justice (Soriano vs. Enriques, 24 Phil. 584) and obnoxious to law and equity (Osorio vs. San Agustin, 25 Phil., 404), but also in subjecting the defendant to the vexation of being sued in the place of his residence or of the residence of the plaintiff, and then again in the place where the property lies.

In Danao vs. Court of Appeals, 16 this Court, reiterating jurisprudence enunciated in Manila Trading and Supply Co vs. Co Kim 17 and Movido vs.RFC, 18 invariably held:

. . . The rule is now settled that a mortgage creditor may elect to waive his security and bring, instead, an ordinary action to recover the indebtedness with the right to execute a judgment thereon on all the properties of the debtor, including the subject matter of the mortgage . . . , subject to the qualification that if he fails in the remedy by him elected, he cannot pursue further the remedy he has waived. (Emphasis Ours)

Anent real properties in particular, the Court has laid down the rule that a mortgage creditor may institute against the mortgage debtor either a personal action for debt or a real action to foreclose the mortgage. 19

In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative. Notably, an election of one remedy operates as a waiver of the other. For this purpose, a remedy is deemed chosen upon the filing of the suit for collection or upon the filing of the complaint in an action for foreclosure of mortgage, pursuant to the provision of Rule 68 of the of the 1997 Rules of Civil Procedure. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the petition not with any court of justice but with the Office of the Sheriff of the province where the sale is to be made, in accordance with the provisions of Act No. 3135, as amended by Act No. 4118.

In the case at bench, private respondent ARC constituted real estate mortgages over its properties as security for the debt of the principal debtors. By doing so, private respondent subjected itself to the liabilities of a third party mortgagor. Under the law, third persons who are not parties to a loan may secure the latter by pledging or mortgaging their own property. 20

Notwithstanding, there is no legal provision nor jurisprudence in our jurisdiction which makes a third person who secures the fulfillment of another's obligation

by mortgaging his own property, to be solidarily bound with the principal obligor. The signatory to the principal contract—loan—remains to be primarily bound. It is only upon default of the latter that the creditor may have recourse on the mortgagors by foreclosing the mortgaged properties in lieu of an action for the recovery of the amount of the loan. 21

In the instant case, petitioner's contention that the requisites of filing the action for collection and rendition of final judgment therein should concur, is untenable.

Thus, in Cerna vs. Court of Appeals, 22 we agreed with the petitioner in said case, that the filing of a collection suit barred the foreclosure of the mortgage:

A mortgagee who files a suit for collection abandons the remedy of foreclosure of the chattel mortgage constituted over the personal property as security for the debt or value of the promissory note when he seeks to recover in the said collection suit.

. . . When the mortgagee elects to file a suit for collection, not foreclosure, thereby abandoning the chattel mortgage as basis for relief, he clearly manifests his lack of desire and interest to go after the mortgaged property as security for the promissory note . . . .

Contrary to petitioner's arguments, we therefore reiterate the rule, for clarity and emphasis, that the mere act of filing of an ordinary action for collection operates as a waiver of the mortgage-creditor's remedy to foreclose the mortgage. By the mere filing of the ordinary action for collection against the principal debtors, the petitioner in the present case is deemed to have elected a remedy, as a result of which a waiver of the other necessarily must arise. Corollarily, no final judgment in the collection suit is required for the rule on waiver to apply.

Hence, in Caltex Philippines, Inc. vs. Intermediate-Appellate Court, 23 a case relied upon by petitioner, supposedly to buttress its contention, this Court had occasion to rule that the mere act of filing a collection suit for the recovery of a debt secured by a mortgage constitutes waiver of the other remedy of foreclosure.

In the case at bar, petitioner BANTSA only has one cause of action which is non-payment of the debt. Nevertheless, alternative remedies are available for its enjoyment and exercise. Petitioner then may opt to exercise only one of two remedies so as not to violate the rule against splitting a cause of action.


As elucidated by this Court in the landmark case of Bachrach Motor Co., Inc, vs. Icarangal. 24

For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor. This single cause of action consists in the recovery of the credit with execution of the security. In other words, the creditor in his action may make two demands, the payment of the debt and the foreclosure of his mortgage. But both demands arise from the same cause, the non-payment of the debt, and for that reason, they constitute a single cause of action. Though the debt and the mortgage constitute separate agreements, the latter is subsidiary to the former, and both refer to one and the same obligation. Consequently, there exists only one cause of action for a single breach of that obligation. Plaintiff, then, by applying the rules above stated, cannot split up his single cause of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the subsequent complaint. By allowing the creditor to file two separate complaints simultaneously or successively, one to recover his credit and another to foreclose his mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at so much cost to the courts and with so much vexation and oppression to the debtor.

Petitioner further faults the Court of Appeals for allegedly disregarding the doctrine enunciated in Caltex wherein this High Court relaxed the application of the general rules to wit:

In the present case, however, we shall not follow this rule to the letter but declare that it is the collection suit which was waived and/or abandoned. This ruling is more in harmony with the principles underlying our judicial system. It is of no moment that the collection suit was filed ahead, what is determinative is the fact that the foreclosure proceedings ended even before the decision in the collection suit was rendered. . . .

Notably, though, petitioner took the Caltex ruling out of context. We must stress that the Caltex case was never intended to overrule the well-entrenched doctrine enunciated Bachrach, which to our mind still finds applicability in cases of this sort. To reiterate, Bachrach is still good law.

We then quote the decision 25 of the trial court, in the present case, thus:

The aforequoted ruling in Caltex is the exception rather than the rule, dictated by the peculiar circumstances obtaining therein. In the said case, the Supreme Court chastised Caltex for making ". . . a mockery of our judicial system when it initially filed a collection suit then, during the pendency thereof, foreclosed extrajudicially the mortgaged property which secured the indebtedness, and still pursued the collection suit to the end." Thus, to prevent a mockery of our judicial system", the collection suit had to be nullified because the foreclosure proceedings have already been pursued to their end and can no longer be undone.

xxx xxx xxx

In the case at bar, it has not been shown whether the defendant pursued to the end or are still pursuing the collection suits filed in foreign courts. There is no occasion, therefore, for this court to apply the exception laid down by the Supreme Court in Caltex by nullifying the collection suits. Quite obviously, too, the aforesaid collection suits are beyond the reach of this Court. Thus the only way the court may prevent the spector of a creditor having "plural redress for a single breach of contract" is by holding, as the Court hereby holds, that the defendant has waived the right to foreclose the mortgages constituted by the plaintiff on its properties originally covered by Transfer Certificates of Title Nos. T-78759, T-78762, T-78760 and T-78761. (RTC Decision pp., 10-11)

In this light, the actuations of Caltex are deserving of severe criticism, to say the least. 26

Moreover, petitioner attempts to mislead this Court by citing the case of PCIB vs. IAC. 27 Again, petitioner tried to fit a square peg in a round hole. It must be stressed that far from overturning the doctrine laid down in Bachrach,


this Court in PCIB buttressed its firm stand on this issue by declaring:

While the law allows a mortgage creditor to either institute a personal action for the debt or a real action to foreclosure the mortgage, he cannot pursue both remedies simultaneously or successively as was done by PCIB in this case.

xxx xxx xxx

Thus, when the PCIB filed Civil Case No. 29392 to enforce payment of the 1.3 million promissory note secured by real estate mortgages and subsequently filed a petition for extrajudicial foreclosure, it violates the rule against splitting a cause of action.

Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency of filing four civil suits before foreign courts, necessarily abandoned the remedy to foreclose the real estate mortgages constituted over the properties of third-party mortgagor and herein private respondent ARC. Moreover, by filing the four civil actions and by eventually foreclosing extrajudicially the mortgages, petitioner in effect transgressed the rules against splitting a cause of action well-enshrined in jurisprudence and our statute books.

In Bachrach, this Court resolved to deny the creditor the remedy of foreclosure after the collection suit was filed, considering that the creditor should not be afforded "plural redress for a single breach of contract." For cause of action should not be confused with the remedy created for its enforcement. 28

Notably, it is not the nature of the redress which is crucial but the efficacy of the remedy chosen in addressing the creditor's cause. Hence, a suit brought before a foreign court having competence and jurisdiction to entertain the action is deemed, for this purpose, to be within the contemplation of the remedy available to the mortgagee-creditor. This pronouncement would best serve the interest of justice and fair play and further discourage the noxious practice of splitting up a lone cause of action.

Incidentally, BANTSA alleges that under English Law, which according to petitioner is the governing law with regard to the principal agreements, the mortgagee does not lose its security interest by simply filing civil actions for sums of money. 29

We rule in the negative.

This argument shows desperation on the part of petitioner to rivet its crumbling cause. In the case at bench, Philippine law shall apply notwithstanding the evidence presented by petitioner to prove the English law on the matter.

In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that there is no judicial notice of any foreign law. A foreign law must be properly pleaded and proved as a fact. 30 Thus, if the foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law is the same as our local or domestic or internallaw. 31 This is what we refer to as the doctrine of processual presumption.

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved in accordance with Section 24, Rule 132 of the Rules of Court and the jurisprudence laid down in Yao Kee, et al. vs.Sy-Gonzales, 32 said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment or order shall not be applied. 33

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 by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. 34

The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the splitting up of a single cause of action.

Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent —

If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others.

Moreover, foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental principles of Conflict of Laws. 35

Clearly then, English Law is not applicable.


As to the second pivotal issue, we hold that the private respondent is entitled to the award of actual or compensatory damages inasmuch as the act of petitioner BANTSA in extrajudicially foreclosing the real estate mortgages constituted a clear violation of the rights of herein private respondent ARC, as third-party mortgagor.

Actual or compensatory damages are those recoverable because of pecuniary loss in business, trade, property, profession, job or occupation and the same must be proved, otherwise if the proof is flimsy and non-substantial, no damages will be given. 36 Indeed, the question of the value of property is always a difficult one to settle as valuation of real property is an imprecise process since real estate has no inherent value readily ascertainable by an appraiser or by the court. 37 The opinions of men vary so much concerning the real value of property that the best the courts can do is hear all of the witnesses which the respective parties desire to present, and then, by carefully weighing that testimony, arrive at a conclusion which is just and equitable. 38

In the instant case, petitioner assails the Court of Appeals for relying heavily on the valuation made by Philippine Appraisal Company. In effect, BANTSA questions the act of the appellate court in giving due weight to the appraisal report composed of twenty three pages, signed by Mr. Lauro Marquez and submitted as evidence by private respondent. The appraisal report, as the records would readily show, was corroborated by the testimony of Mr. Reynaldo Flores, witness for private respondent.

On this matter, the trial court observed:

The record herein reveals that plaintiff-appellee formally offered as evidence the appraisal report dated March 29, 1993 (Exhibit J, Records, p. 409), consisting of twenty three (23) pages which set out in detail the valuation of the property to determine its fair market value (TSN, April 22, 1994, p. 4), in the amount of P99,986,592.00 (TSN, ibid., p. 5), together with the corroborative testimony of one Mr. Reynaldo F. Flores, an appraiser and director of Philippine Appraisal Company, Inc. (TSN, ibid., p. 3). The latter's testimony was subjected to extensive cross-examination by counsel for defendant-appellant (TSN, April 22, 1994, pp. 6-22). 39

In the matter of credibility of witnesses, the Court reiterates the familiar and well-entrenched rule that the factual findings of the trial court should be respected. 40

The time-tested jurisprudence is that the findings and conclusions of the trial court on the credibility of witnesses enjoy a badge of respect for the reason that

trial courts have the advantage of observing the demeanor of witnesses as they testify. 41

This Court will not alter the findings of the trial court on the credibility of witnesses, principally because they are in a better position to assess the same than the appellate court. 42 Besides, trial courts are in a better position to examine real evidence as well as observe the demeanor of witnesses. 43

Similarly, the appreciation of evidence and the assessment of the credibility of witnesses rest primarily with the trial court. 44 In the case at bar, we see no reason that would justify this Court to disturb the factual findings of the trial court, as affirmed by the Court of Appeals, with regard to the award of actual damages.

In arriving at the amount of actual damages, the trial court justified the award by presenting the following ratiocination in its assailed decision 45, to wit:

Indeed, the Court has its own mind in the matter of valuation. The size of the subject real properties are (sic) set forth in their individuals titles, and the Court itself has seen the character and nature of said properties during the ocular inspection it conducted. Based principally on the foregoing, the Court makes the following observations:

1. The properties consist of about 39 hectares in Bo. Sto. Cristo, San Jose del Monte, Bulacan, which is (sic) not distant from Metro Manila — the biggest urban center in the Philippines — and are easily accessible through well-paved roads;

2. The properties are suitable for development into a subdivision for low cost housing, as admitted by defendant's own appraiser (TSN, May 30, 1994, p. 31);

3. The pigpens which used to exist in the property have already been demolished. Houses of strong materials are found in the vicinity of the property (Exhs. 2, 2-1 to 2-7), and the vicinity is a growing community. It has even been shown that the house of the Barangay Chairman is located adjacent to the property in question (Exh. 27), and the only remaining piggery (named Cherry Farm) in the vicinity is about 2 kilometers away from the western


boundary of the property in question (TSN, November 19, p. 3);

4. It will not be hard to find interested buyers of the property, as indubitably shown by the fact that on March 18, 1994, ICCS (the buyer during the foreclosure sale) sold the consolidated real estate properties to Stateland Investment Corporation, in whose favor new titles were issued, i.e., TCT Nos. T-187781(m); T-187782(m), T-187783(m); T-16653P(m) and T-166521(m) by the Register of Deeds of Meycauayan (sic), Bulacan;

5. The fact that ICCS was able to sell the subject properties to Stateland Investment Corporation for Thirty Nine Million (P39,000,000.00) Pesos, which is more than triple defendant's appraisal (Exh. 2) clearly shows that the Court cannot rely on defendant's aforesaid estimate (Decision, Records, p. 603).

It is a fundamental legal aphorism that the conclusions of the trial judge on the credibility of witnesses command great respect and consideration especially when the conclusions are supported by the evidence on record. 46

Applying the foregoing principle, we therefore hold that the trial court committed no palpable error in giving credence to the testimony of Reynaldo Flores, who according to the records, is a licensed real estate broker, appraiser and director of Philippine Appraisal Company, Inc. since 1990. 47 As the records show, Flores had been with the company for 26 years at the time of his testimony.

Of equal importance is the fact that the trial court did not confine itself to the appraisal report dated 29 March 1993, and the testimony given by Mr. Reynaldo Flores, in determining the fair market value of the real property. Above all these, the record would likewise show that the trial judge in order to appraise himself of the characteristics and condition of the property, conducted an ocular inspection where the opposing parties appeared and were duly represented.

Based on these considerations and the evidence submitted, we affirm the ruling of the trial court as regards the valuation of the property —

. . . a valuation of Ninety Nine Million Pesos (P99,000,000.00) for the 39-hectare properties (sic) translates to just about Two Hundred Fifty Four Pesos (P254.00) per square meter. This appears to be, as the court so holds, a better approximation of the fair market

value of the subject properties. This is the amount which should be restituted by the defendant to the plaintiff by way of actual or compensatory damages . . . . 48

Further, petitioner ascribes error to the lower court awarding an amount allegedly not asked nor prayed for in private respondent's complaint.

Notwithstanding the fact that the award of actual and compensatory damages by the lower court exceeded that prayed for in the complaint, the same is nonetheless valid, subject to certain qualifications.

On this issue, Rule 10, Section 5 of the Rules of Court is pertinent:

Sec. 5. Amendment to conform to or authorize presentation of evidence. — When issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgement; but failure to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice will be subserved thereby. The court may grant a continuance to enable the amendment to be made.

The jurisprudence enunciated in Talisay-Silay Milling Co., Inc. vs. Asociacion de Agricultures de Talisay-Silay, Inc. 49

citing Northern Cement Corporation vs. Intermediate Appellate Court 50 is enlightening:

There have been instances where the Court has held that even without the necessary amendment, the amount proved at the trial may be validly awarded, as in Tuazon v. Bolanos (95 Phil. 106), where we said that if the facts shown entitled plaintiff to relief other than that asked for, no amendment to the complaint was necessary, especially where defendant had himself raised the point on which


recovery was based. The appellate court could treat the pleading as amended to conform to the evidence although the pleadings were actually not amended. Amendment is also unnecessary when only clerical error or non substantial matters are involved, as we held in Bank of the Philippine Islands vs. Laguna (48 Phil. 5). In Co Tiamco vs. Diaz (75 Phil. 672), we stressed that the rule on amendment need not be applied rigidly, particularly where no surprise or prejudice is caused the objecting party. And in the recent case of National Power Corporation vs. Court of Appeals (113 SCRA 556), we held that where there is a variance in the defendant's pleadings and the evidence adduced by it at the trial, the Court may treat the pleading as amended to conform with the evidence.

It is the view of the Court that pursuant to the above-mentioned rule and in light of the decisions cited, the trial court should not be precluded from awarding an amount higher than that claimed in the pleading notwithstanding the absence of the required amendment. But it is upon the condition that the evidence of such higher amount has been presented properly, with full opportunity on the part of the opposing parties to support their respective contentions and to refute each other's evidence.

The failure of a party to amend a pleading to conform to the evidence adduced during trial does not preclude an adjudication by the court on the basis of such evidence which may embody new issues not raised in the pleadings, or serve as a basis for a higher award of damages. Although the pleading may not have been amended to conform to the evidence submitted during trial, judgment may nonetheless be rendered, not simply on the basis of the issues alleged but also the basis of issues discussed and the assertions of fact proved in the course of trial. The court may treat the pleading as if it had been amended to conform to the evidence, although it had not been actually so amended. Former Chief Justice Moran put the matter in this way:

When evidence is presented by one party, with the expressed or implied consent of the adverse party, as to issues not alleged in the pleadings, judgment may be rendered validly as regards those issues, which shall be considered as if they have been raised in the pleadings. There is implied consent to the evidence thus presented when the adverse party fails to object thereto.

Clearly, a court may rule and render judgment on the basis of the evidence before it even though the relevant pleading had not been previously amended, so long as no surprise or prejudice is thereby caused to the adverse party. Put a little differently, so long as the basis requirements of fair play had been met, as where litigants were given full opportunity to support their respective contentions and to object to or refute each other's evidence, the court may validly treat the pleadings as if they had been amended to conform to the evidence and proceed to adjudicate on the basis of all the evidence before it.

In the instant case, inasmuch as the petitioner was afforded the opportunity to refute and object to the evidence, both documentary and testimonial, formally offered by private respondent, the rudiments of fair play are deemed satisfied. In fact, the testimony of Reynaldo Flores was put under scrutiny during the course of the cross-examination. Under these circumstances, the court acted within the bounds of its jurisdiction and committed no reversible error in awarding actual damages the amount of which is higher than that prayed for. Verily, the lower court's actuations are sanctioned by the Rules and supported by jurisprudence.

Similarly, we affirm the grant of exemplary damages although the amount of Five Million Pesos (P5,000,000.00) awarded, being excessive, is subject to reduction. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. 51 Considering its purpose, it must be fair and reasonable in every case and should not be awarded to unjustly enrich a prevailing party. 52 In our view, an award of P50,000.00 as exemplary damages in the present case qualifies the test of reasonableness.


WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION of the amount awarded as exemplary damages. According, petitioner is hereby ordered to pay private respondent the sum of P99,000,000.00 as actual or compensatory damages; P50,000.00 as exemplary damage and the costs of suit.

SO ORDERED.

Bellosillo, Mendoza, Quisumbing and De Leon, Jr., JJ., concur.

SAUDI ARABIAN AIRLINES VS. COURT OF APPEALSG.R. No. 122191 October 8, 1998

FACTS: Milagros Morada was working as a stewardess for Saudia Arabian Airlines. In 1990, while she and some co-workers were in a lay-over in Jakarta, Indonesia, an Arab co-worker tried to rape her in a hotel room. Fortunately, a roomboy heard her cry for help and two of her Arab co-workers were arrested and detained in Indonesia. Later, Saudia Airlines re-assigned her to work in their Manila office. While working in Manila, Saudia Airlines advised her to meet with a Saudia Airlines officer in Saudi. She did but to her surprise, she was brought to a Saudi court where she was interrogated and eventually sentenced to 5 months imprisonment and 289 lashes; she allegedly violated Muslim customs by partying with males. The Prince of Makkah got wind of her conviction and the Prince determined that she was wrongfully convicted hence the Prince absolved her and sent her back to the Philippines. Saudia Airlines later on dismissed Morada. Morada then sued Saudia Airlines for damages under Article 19 and 21 of the Civil Code. Saudia Airlines filed a motion to dismiss on the ground that the RTC has no jurisdiction over the case because the applicable law should be the law of Saudi Arabia. Saudia Airlines also prayed for other reliefs under the premises.

ISSUE: Whether or not Saudia Airlines’ contention is correct.

HELD: No. Firstly, the RTC has acquired jurisdiction over Saudia Airlines when the latter filed a motion to dismiss with petition for other reliefs. The asking for other reliefs effectively asked the court to make a determination of Saudia Airlines’s rights hence a submission to the court’s jurisdiction.

Secondly, the RTC has acquired jurisdiction over the case because as alleged in the complaint of Morada, she is bringing the suit for damages under the provisions of our Civil Law and not of the Arabian Law. Morada then has the 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 (case at bar) in the place where she resides or where the defendant resides. Obviously, it is well within her right to file the case here because if she’ll file it in Saudi Arabia, it will be very disadvantageous for her (and of course, again, Philippine Civil Law is the law invoked).

Thirdly, one important test factor to determine where to file a case, if there is a foreign element involved, is the so called “locus actus” or where an act has been done. In the case at bar, Morada was already working in Manila when she was summoned by her superior to go to Saudi Arabia to meet with a Saudia Airlines officer. She was not informed that she was going to appear in a court trial. Clearly, she was defrauded into appearing before a court trial which led to her wrongful conviction. The act of defrauding, which is tortuous, was committed in Manila and this led to her humiliation, misery, and suffering. And applying the torts principle in a conflicts case, the SC finds that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place).



Manila

FIRST DIVISION

G.R. No. 122191 October 8, 1998

SAUDI ARABIAN AIRLINES, petitioner, vs.COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City, respondents.

QUISUMBING, J.:

This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set aside the Resolution 1 dated September 27, 1995 and the Decision 2

dated April 10, 1996 of the Court of Appeals 3 in CA-G.R. SP No. 36533, 4 and the Orders 5 dated August 29, 1994 6

and February 2, 1995 7 that were issued by the trial court in Civil Case No. Q-93-18394. 8

The pertinent antecedent facts which gave rise to the instant petition, as stated in the questioned Decision 9, are as follows:

On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. . . .

On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in te (sic) room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.

When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights.

Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDI (sic). In September 1990, defendant SAUDIA transferred plaintiff to Manila.

On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make


a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah.

One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.

Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIA's Manila manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her.

In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight. At the Inflight Service Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders.

On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only

then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. 10

Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the internationalflights. 11

Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, 12 she was terminated from the service by SAUDIA, without her being informed of the cause.

On November 23, 1993, Morada filed a Complaint 13 for damages against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country manager.

On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the following grounds, to wit: (1) that the Complaint states no cause of action against Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no jurisdiction to try the case.

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) 15. Saudia filed a reply 16 thereto on March 3, 1994.

On June 23, 1994, Morada filed an Amended Complaint 17

wherein Al-Balawi was dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to Dismiss Amended Complaint 18.

The trial court issued an Order 19 dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by Saudia.

From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA filed on September 20, 1994, its Motion for Reconsideration 21 of the Order dated August 29, 1994. It alleged that the trial court has no jurisdiction to hear and try the case on the basis of Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 14, 1994,


Morada filed her Opposition 22 (To Defendant's Motion for Reconsideration).

In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its Motion for Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the same.

Respondent Judge subsequently issued another Order 24

dated February 2, 1995, denying SAUDIA's Motion for Reconsideration. The pertinent portion of the assailed Order reads as follows:

Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which is one for the recovery of actual, moral and exemplary damages plus attorney's fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be reconsidered, the motion for reconsideration of the defendant, is DENIED.

SO ORDERED. 25

Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order 26 with the Court of Appeals.

Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order 27 dated February 23, 1995, prohibiting the respondent Judge from further conducting any proceeding, unless otherwise directed, in the interim.

In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate court denied SAUDIA's

Petition for the Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit:

The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED, after considering the Answer, with Prayer to Deny Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder, it appearing that herein petitioner is not clearly entitled thereto (Unciano Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335, April 7, 1993, Second Division).

SO ORDERED.

On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition 29 for Review with Prayer for Temporary Restraining Order dated October 13, 1995.

However, during the pendency of the instant Petition, respondent Court of Appeals rendered the Decision 30

dated April 10, 1996, now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaint's basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal.

On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining Order 31

dated April 30, 1996, given due course by this Court. After both parties submitted their Memoranda, 32 the instant case is now deemed submitted for decision.

Petitioner SAUDIA raised the following issues:

I

The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article 21 of the New Civil Code since the proper law applicable is the law of the Kingdom of Saudi Arabia inasmuch as this case involves what is known in private international law as a "conflicts problem". Otherwise, the Republic of the Philippines will sit in judgment of the acts done by another sovereign state which is abhorred.

II


Leave of court before filing a supplemental pleading is not a jurisdictional requirement. Besides, the matter as to absence of leave of court is now moot and academic when this Honorable Court required the respondents to comment on petitioner's April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining Order Within Ten (10) Days From Notice Thereof. Further, the Revised Rules of Court should be construed with liberality pursuant to Section 2, Rule 1 thereof.

III

Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period as provided for under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has not yet become final and executory and this Honorable Court can take cognizance of this case. 33

From the foregoing factual and procedural antecedents, the following issues emerge for our resolution:

I.

WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES".

II.

WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD GOVERN.

Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondent's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant

case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule. 34

On the other hand, private respondent contends that since her Amended Complaint is based on Articles 19 35

and 21 36 of the Civil Code, then the instant case is properly a matter of domestic law. 37

Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia.

As stated by private respondent in her Amended Complaint 38 dated June 23, 1994:

2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation doing business in the Philippines. It may be served with summons and other court processes at Travel Wide Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro Manila.

xxx xxx xxx

6. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDIA. In September 1990, defendant SAUDIA transferred plaintiff to Manila.

7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors reauested her to see MR. Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah.

8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her


flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sigh a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.

9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIA's Manila manger, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her.

10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take that flight. At the Inflight Service Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders.

11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing, and listening to the music in violation of Islamic laws; (3) socializing with the male crew, in contravention of Islamic tradition.

12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the help of the Philippines Embassy in Jeddah. The latter helped her pursue an appeal from the decision of the court. To pay for her upkeep, she worked on the domestic flights of defendant SAUDIA while, ironically, Thamer and Allah freely served the international flights. 39

Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a "conflicts" case.

A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a "foreign element". The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. 40

The forms in which this foreign element may appear are many. 41 The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex form. 42

In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner Saudia as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a "conflicts" situation to arise.

We thus find private respondent's assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here, and the question of jurisdiction 43

confronts the court a quo.

After a careful study of the private respondent's Amended Complaint, 44 and the Comment thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code.

On one hand, Article 19 of the New Civil Code provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice give everyone his due and observe honesty and good faith.


On the other hand, Article 21 of the New Civil Code provides:

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages.

Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this Court held that:

The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes.

Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondent's assertion that violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum.

Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of Court on jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City possesses jurisdiction over the subject matter of the suit. 48 Its authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691, to wit:

Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows:

Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive jurisdiction:

xxx xxx xxx

(8) In all other cases in which demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and cots or the value of the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where

the demand, exclusive of the above-mentioned items exceeds Two hundred Thousand pesos (P200,000.00). (Emphasis ours)

xxx xxx xxx

And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City, is appropriate:

Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]

(a) xxx xxx xxx

(b) Personal actions. — All other actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff resides, at the election of the plaintiff.

Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. 49

Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental unfairness to her.

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 (now private respondent) should be upheld.

Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntary submitted herself to the jurisdiction of the court.


The records show that petitioner SAUDIA has filed several motions 50 praying for the dismissal of Morada's Amended Complaint. SAUDIA also filed an Answer In Ex Abundante Cautelam dated February 20, 1995. What is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial court's jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.

As held by this Court in Republic vs. Ker and Company, Ltd.: 51

We observe that the motion to dismiss filed on April 14, 1962, aside from disputing the lower court's jurisdiction over defendant's person, prayed for dismissal of the complaint on the ground that plaintiff's cause of action has prescribed. By interposing such second ground in its motion to dismiss, Ker and Co., Ltd. availed of an affirmative defense on the basis of which it prayed the court to resolve controversy in its favor. For the court to validly decide the said plea of defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction upon the latter's person, who, being the proponent of the affirmative defense, should be deemed to have abandoned its special appearance and voluntarily submitted itself to the jurisdiction of the court.

Similarly, the case of De Midgely vs. Ferandos, held that;

When the appearance is by motion for the purpose of objecting to the jurisdiction of the court over the person, it must be for the sole and separate purpose of objecting to the jurisdiction of the court. If his motion is for any other purpose than to object to the jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of the court. A special appearance by motion made for the purpose of objecting to the jurisdiction of the court over the person will be held to be a general appearance, if the party in said motion should, for example, ask for a dismissal of the action upon the further ground that the court had no jurisdiction over the subject matter. 52

Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City. Thus, we find that the

trial court has jurisdiction over the case and that its exercise thereof, justified.

As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation. 53

Several theories have been propounded in order to identify the legal system that should ultimately control. Although ideally, all choice-of-law theories should intrinsically advance both notions of justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed. 54

Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as "characterization", or the "doctrine of qualification". It is the "process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule." 55 The purpose of "characterization" is to enable the forum to select the proper law. 56

Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. 57 An essential element of conflict rules is the indication of a "test" or "connecting factor" or "point of contact". Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing. 58

Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. 59 These "test factors" or "points of contact" or "connecting factors" could be any of the following:

(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;

(2) the seat of a legal or juridical person, such as a corporation;

(3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real rights are involved;

(4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a


marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts;

(5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised;

(6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis;

(7) the place where judicial or administrative proceedings are instituted or done. The lex fori — the law of the forum — is particularly important because, as we have seen earlier, matters of "procedure" not going to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and

(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment. 60 (Emphasis ours.)

After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed admitted for purposes of the motion to dismiss, we are convinced that there is reasonable basis for private respondent's assertion that although she was already working in Manila, petitioner brought her to Jeddah on the pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew members for the attack on her person while they were in Jakarta. As it turned out, she was the one made to face trial for very serious charges, including adultery and violation of Islamic laws and tradition.

There is likewise logical basis on record for the claim that the "handing over" or "turning over" of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioner's purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution

of private respondent under the guise of petitioner's authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven.

Considering that the complaint in the court a quo is one involving torts, the "connecting factor" or "point of contact" could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, "act with justice, give her due and observe honesty and good faith." Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort.

Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liability 61 have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the "State of the most significant relationship" rule, which in our view should be appropriate to apply now, given the factual context of this case.

In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. 62

As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business


of international air carriage. Thus, the "relationship" between the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, 63 raised by private respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established.

Prescinding from this premise that the Philippines is the situs of the tort complained of and the place "having the most interest in the problem", we find, by way of recapitulation, that the Philippine law on tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find untenable petitioner's insistence that "[s]ince private respondent instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter." 64 As aptly said by private respondent, she has "no obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and 21" of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never alleged that Saudi law should govern this case. 65

And as correctly held by the respondent appellate court, "considering that it was the petitioner who was invoking the applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is". 66

Lastly, no error could be imputed to the respondent appellate court in upholding the trial court's denial of defendant's (herein petitioner's) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the case below, not just for the benefit of all the litigants, but also for the vindication of the country's system of law and justice in a transnational setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is hereby REMANDED to Regional Trial Court of Quezon City, Branch 89 for further proceedings.

SO ORDERED.

Davide, Jr., Bellosillo, Vitug and Panganiban, JJ., concur.


PNB VS. CABANSAGG.R. No. 157010 June 21, 2005

Facts:

Florence Cabansag went to Singapore as a tourist. While she was there, she looked for a job and eventually applied with the Singapore Branch of the Philippine National Bank. PNB is a private banking corporation organized and existing under Philippine laws. She was eventually employed and was issued an employment pass. In her job offer, it was stated, among others, that she was to be put on probation for 3 months and termination of her employment may be made by either party after 1 day notice while on probation, and 1 month notice or 1 month pay in lieu of notice upon confirmation. She accepted the terms and was issued an OEC by the POEA. She was commended for her good work. However, she was informed by Ruben Tobias, the bank president, that she would have to resign in line with some cost cutting and realignment measures of the company. She refused but was informed by Tobias that if she does not resign, he will terminate her instead.

Issues:

1. W/N the arbitration branch of the NLRC has jurisdiction

2. W/N the arbitration of the NLRC in the NCR is the proper venue

3. W/N Cabansag was illegally dismissed

Ruling:

1. Labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee relations including termination disputes involving all workers, including OFWs. Here, Cabansag applied for and secured an OEC from the POEA through the Philippine Embassy. The OEC authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes. Although she may been a direct hire at the commencement of her employment, she became an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. When she was illegally terminated, she already possessed the POEA employment certificate.

2. A migrant worker “refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas Filipino worker.”Here, Cabansag was a Filipino, not a legal resident of Singapore, and employed by petitioner in its branch office in Singapore. She is clearly an OFW/migrant worker. Thus, she has the option where to file her Complaint for illegal dismissal. She can either file at the Regional Arbitration Branch where she resides or the RAB where the employer is situated. Thus, in filing her Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue.

3. The appellate court was correct in holding that respondent was already a regular employee at the time of her dismissal, because her three-month probationary period of employment had already ended. This ruling is in accordance with Article 281 of the Labor Code: “An employee who is allowed to work after a probationary period shall be considered a regular employee.” Indeed, petitioner recognized respondent as such at the time it dismissed her, by giving her one month’s salary in lieu of a one-month notice, consistent with provision No. 6 of her employment Contract.



Manila

THIRD DIVISION

G.R. No. 157010 June 21, 2005

PHILIPPINE NATIONAL BANK, petitioner, vs.FLORENCE O. CABANSAG, respondent.

D E C I S I O N

PANGANIBAN, J.:

The Court reiterates the basic policy that all Filipino workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislations. Our labor statutes may not be rendered ineffective by laws or judgments promulgated, or stipulations agreed upon, in a foreign country.

The Case

Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, seeking to reverse and set aside the July 16, 2002 Decision2 and the January 29, 2003 Resolution3 of the Court of Appeals (CA) in CA-GR SP No. 68403. The assailed Decision dismissed the CA Petition (filed by herein petitioner), which had sought to reverse the National Labor Relations Commission (NLRC)’s June 29, 2001 Resolution,4 affirming Labor Arbiter Joel S. Lustria’s January 18, 2000 Decision.5

The assailed CA Resolution denied herein petitioner’s Motion for Reconsideration.

The Facts

The facts are narrated by the Court of Appeals as follows:

"In late 1998, [herein Respondent Florence Cabansag] arrived in Singapore as a tourist. She applied for employment, with the Singapore Branch of the Philippine National Bank, a private banking corporation organized and existing under the laws of the Philippines, with principal offices at the PNB Financial Center, Roxas Boulevard, Manila. At the time, the Singapore PNB Branch was under the helm of Ruben C. Tobias, a lawyer, as General Manager, with the rank of Vice-President of the Bank. At the time, too, the Branch Office had two (2) types of employees: (a) expatriates or the regular employees, hired in Manila and assigned abroad including Singapore, and (b) locally (direct) hired. She applied for employment as Branch Credit Officer, at a total monthly package of $SG4,500.00, effective upon assumption of duties after approval. Ruben C. Tobias found her eminently qualified and wrote on October 26, 1998, a letter to the President of the Bank in Manila, recommending the appointment of Florence O. Cabansag, for the position.

x x x x x x x x x

"The President of the Bank was impressed with the credentials of Florence O. Cabansag that he approved the recommendation of Ruben C. Tobias. She then filed an ‘Application,’ with the Ministry of Manpower of the Government of Singapore, for the issuance of an ‘Employment Pass’ as an employee of the Singapore PNB Branch. Her application was approved for a period of two (2) years.

"On December 7, 1998, Ruben C. Tobias wrote a letter to Florence O. Cabansag offering her a temporary appointment, as Credit Officer, at a basic salary of Singapore Dollars 4,500.00, a month and, upon her successful completion of her probation to be determined solely, by the Bank, she may be extended at the discretion of the Bank, a permanent appointment and that her temporary appointment was subject to the following terms and conditions:

‘1. You will be on probation for a period of three (3) consecutive months from the date of your assumption of duty.

‘2. You will observe the Bank’s rules and regulations and those that may be adopted from time to time.

‘3. You will keep in strictest confidence all matters related to transactions between the Bank and its clients.


http://www.lawphil.net/judjuris/juri2005/jun2005/gr_157010_2005.html#fnt5





‘4. You will devote your full time during business hours in promoting the business and interest of the Bank.

‘5. You will not, without prior written consent of the Bank, be employed in anyway for any purpose whatsoever outside business hours by any person, firm or company.

‘6. Termination of your employment with the Bank may be made by either party after notice of one (1) day in writing during probation, one month notice upon confirmation or the equivalent of one (1) day’s or month’s salary in lieu of notice.’

"Florence O. Cabansag accepted the position and assumed office. In the meantime, the Philippine Embassy in Singapore processed the employment contract of Florence O. Cabansag and, on March 8, 1999, she was issued by the Philippine Overseas Employment Administration, an ‘Overseas Employment Certificate,’ certifying that she was a bona fide contract worker for Singapore.

x x x x x x x x x

"Barely three (3) months in office, Florence O. Cabansag submitted to Ruben C. Tobias, on March 9, 1999, her initial ‘Performance Report.’ Ruben C. Tobias was so impressed with the ‘Report’ that he made a notation and, on said ‘Report’: ‘GOOD WORK.’ However, in the evening of April 14, 1999, while Florence O. Cabansag was in the flat, which she and Cecilia Aquino, the Assistant Vice-President and Deputy General Manager of the Branch and Rosanna Sarmiento, the Chief Dealer of the said Branch, rented, she was told by the two (2) that Ruben C. Tobias has asked them to tell Florence O. Cabansag to resign from her job. Florence O. Cabansag was perplexed at the sudden turn of events and the runabout way Ruben C. Tobias procured her resignation from the Bank. The next day, Florence O. Cabansag talked to Ruben C. Tobias and inquired if what Cecilia Aquino and Rosanna Sarmiento had told her was true. Ruben C. Tobias confirmed the veracity of the information, with the explanation that her resignation was imperative as a ‘cost-cutting measure’ of the Bank. Ruben C. Tobias, likewise, told Florence O. Cabansag that the PNB Singapore Branch will be sold or transformed into a remittance office and that, in either way, Florence O. Cabansag had to resign from her employment. The more Florence O. Cabansag was perplexed. She then asked Ruben C. Tobias that she be furnished with a ‘Formal Advice’ from the PNB Head Office in Manila. However, Ruben C. Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation.

"On April 16, 1999, Ruben C. Tobias again summoned Florence O. Cabansag to his office and demanded that

she submit her letter of resignation, with the pretext that he needed a Chinese-speaking Credit Officer to penetrate the local market, with the information that a Chinese-speaking Credit Officer had already been hired and will be reporting for work soon. She was warned that, unless she submitted her letter of resignation, her employment record will be blemished with the notation ‘DISMISSED’ spread thereon. Without giving any definitive answer, Florence O. Cabansag asked Ruben C. Tobias that she be given sufficient time to look for another job. Ruben C. Tobias told her that she should be ‘out’ of her employment by May 15, 1999.

"However, on April 19, 1999, Ruben C. Tobias again summoned Florence O. Cabansag and adamantly ordered her to submit her letter of resignation. She refused. On April 20, 1999, she received a letter from Ruben C. Tobias terminating her employment with the Bank.

x x x x x x x x x

"On January 18, 2000, the Labor Arbiter rendered judgment in favor of the Complainant and against the Respondents, the decretal portion of which reads as follows:

‘WHEREFORE, considering the foregoing premises, judgment is hereby rendered finding respondents guilty of Illegal dismissal and devoid of due process, and are hereby ordered:

1. To reinstate complainant to her former or substantially equivalent position without loss of seniority rights, benefits and privileges;

2. Solidarily liable to pay complainant as follows:

a) To pay complainant her backwages from 16 April 1999 up to her actual reinstatement. Her backwages as of the date of the promulgation of this decision amounted to SGD 40,500.00 or its equivalent in Philippine Currency at the time of payment;

b) Mid-year bonus in the amount of SGD 2,250.00 or its equivalent in Philippine Currency at the time of payment;

c) Allowance for Sunday banking in the amount of SGD 120.00 or its equivalent in Philippine Currency at the time of payment;

d) Monetary equivalent of leave credits earned on Sunday banking in the amount of SGD 1,557.67 or its


equivalent in Philippine Currency at the time of payment;

e) Monetary equivalent of unused sick leave benefits in the amount of SGD 1,150.60 or its equivalent in Philippine Currency at the time of payment.

f) Monetary equivalent of unused vacation leave benefits in the amount of SGD 319.85 or its equivalent in Philippine Currency at the time of payment.

g) 13th month pay in the amount of SGD 4,500.00 or its equivalent in Philippine Currency at the time of payment;

3. Solidarily to pay complainant actual damages in the amount of SGD 1,978.00 or its equivalent in Philippine Currency at the time of payment, and moral damages in the amount of PhP 200,000.00, exemplary damages in the amount of PhP 100,000.00;

4. To pay complainant the amount of SGD 5,039.81 or its equivalent in Philippine Currency at the time of payment, representing attorney’s fees.

SO ORDERED." 6 [Emphasis in the original.]

PNB appealed the labor arbiter’s Decision to the NLRC. In a Resolution dated June 29, 2001, the Commission affirmed that Decision, but reduced the moral damages to P100,000 and the exemplary damages to P50,000. In a subsequent Resolution, the NLRC denied PNB’s Motion for Reconsideration.

Ruling of the Court of Appeals

In disposing of the Petition for Certiorari, the CA noted that petitioner bank had failed to adduce in evidence the Singaporean law supposedly governing the latter’s employment Contract with respondent. The appellate court found that the Contract had actually been processed by the Philippine Embassy in Singapore and approved by the Philippine Overseas Employment Administration (POEA), which then used that Contract as a basis for issuing an Overseas Employment Certificate in favor of respondent.

According to the CA, even though respondent secured an employment pass from the Singapore Ministry of Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the labor arbiter or the NLRC

over her Complaint for illegal dismissal. In so doing, neither did she submit herself solely to the Ministry of Manpower of Singapore’s jurisdiction over disputes arising from her employment. The appellate court further noted that a cursory reading of the Ministry’s letter will readily show that no such waiver or submission is stated or implied.

Finally, the CA held that petitioner had failed to establish a just cause for the dismissal of respondent. The bank had also failed to give her sufficient notice and an opportunity to be heard and to defend herself. The CA ruled that she was consequently entitled to reinstatement and back wages, computed from the time of her dismissal up to the time of her reinstatement.

Hence, this Petition.7

Issues

Petitioner submits the following issues for our consideration:

"1. Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy;

"2. Whether or not the arbitration of the NLRC in the National Capital Region is the most convenient venue or forum to hear and decide the instant controversy; and

"3. Whether or not the respondent was illegally dismissed, and therefore, entitled to recover moral and exemplary damages and attorney’s fees."8

In addition, respondent assails, in her Comment,9 the propriety of Rule 45 as the procedural mode for seeking a review of the CA Decision affirming the NLRC Resolution. Such issue deserves scant consideration. Respondent miscomprehends the Court’s discourse in St. Martin Funeral Home v. NLRC,10 which has indeed affirmed that the proper mode of review of NLRC decisions, resolutions or orders is by a special civil action for certiorari under Rule 65 of the Rules of Court. The Supreme Court and the Court of Appeals have concurrent original jurisdiction over such petitions for certiorari. Thus, in observance of the doctrine on the hierarchy of courts, these petitions should be initially filed with the CA.11

Rightly, the bank elevated the NLRC Resolution to the CA by way of a Petition for Certiorari. In seeking a review by this Court of the CA Decision -- on questions of jurisdiction, venue and validity of employment termination -- petitioner is likewise correct in invoking Rule 45.12









It is true, however, that in a petition for review on certiorari, the scope of the Supreme Court’s judicial review of decisions of the Court of Appeals is generally confined only to errors of law. It does not extend to questions of fact. This doctrine applies with greater force in labor cases. Factual questions are for the labor tribunals to resolve. 13 In the present case, the labor arbiter and the NLRC have already determined the factual issues. Their findings, which are supported by substantial evidence, were affirmed by the CA. Thus, they are entitled to great respect and are rendered conclusive upon this Court, absent a clear showing of palpable error or arbitrary disregard of evidence.14

The Court’s Ruling

The Petition has no merit.

First Issue:

Jurisdiction

The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code as follows:

"ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount of

exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

(b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

x x x x x x x x x."

More specifically, Section 10 of RA 8042 reads in part:

"SECTION 10. Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages.

x x x x x x x x x"

Based on the foregoing provisions, labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers (OFW).15

We are not unmindful of the fact that respondent was directly hired, while on a tourist status in Singapore, by the PNB branch in that city state. Prior to employing respondent, petitioner had to obtain an employment pass for her from the Singapore Ministry of Manpower. Securing the pass was a regulatory requirement pursuant to the immigration regulations of that country.16

Similarly, the Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here. That permit, however, does not automatically mean that the non-citizen is thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of one’s national laws on labor. Absent any clear and convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the issuing country.1avvphil.zw+

Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore. The Certificate, issued on March 8, 1999, declared her a bona fide contract worker for Singapore. Under Philippine law, this document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes. Thus, even assuming arguendo that she was considered at the start






of her employment as a "direct hire" governed by and subject to the laws, common practices and customs prevailing in Singapore17 she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. At the time her employment was illegally terminated, she already possessed the POEA employment Certificate.

Moreover, petitioner admits that it is a Philippine corporation doing business through a branch office in Singapore.18 Significantly, respondent’s employment by the Singapore branch office had to be approved by Benjamin P. Palma Gil,19 the president of the bank whose principal offices were in Manila. This circumstance militates against petitioner’s contention that respondent was "locally hired"; and totally "governed by and subject to the laws, common practices and customs" of Singapore, not of the Philippines. Instead, with more reason does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker, in this case one deployed in Singapore. Hence, petitioner cannot escape the application of Philippine laws or the jurisdiction of the NLRC and the labor arbiter.

In any event, we recall the following policy pronouncement of the Court in Royal Crown Internationale v. NLRC:20

"x x x. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers.1awphi1.net For the State assures the basic rights of all workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section 18, Article II and Section 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws ‘which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determination or conventions agreed upon in a foreign country.’"

Second Issue:

Proper Venue

Section 1(a) of Rule IV of the NLRC Rules of Procedure reads:

"Section 1. Venue – (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the

Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner; Provided, however that cases of Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration Branch where the complainant resides or where the principal office of the respondent/employer is situated, at the option of the complainant.

"For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to their employers."

Under the "Migrant Workers and Overseas Filipinos Act of 1995" (RA 8042), a migrant worker "refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas Filipino worker."21 Undeniably, respondent was employed by petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within the category of "migrant worker" or "overseas Filipino worker."

As such, it is her option to choose the venue of her Complaint against petitioner for illegal dismissal. The law gives her two choices: (1) at the Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where the principal office of her employer is situated. Since her dismissal by petitioner, respondent has returned to the Philippines -- specifically to her residence at Filinvest II, Quezon City. Thus, in filing her Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue.

Third Issue:

Illegal Dismissal

The appellate court was correct in holding that respondent was already a regular employee at the time of her dismissal, because her three-month probationary period of employment had already ended. This ruling is in accordance with Article 281 of the Labor Code: "An employee who is allowed to work after a probationary period shall be considered a regular employee." Indeed, petitioner recognized respondent as such at the time it dismissed her, by giving her one month’s salary in lieu of a one-month notice, consistent with provision No. 6 of her employment Contract.







Notice and Hearing Not Complied With

As a regular employee, respondent was entitled to all rights, benefits and privileges provided under our labor laws. One of her fundamental rights is that she may not be dismissed without due process of law. The twin requirements of notice and hearing constitute the essential elements of procedural due process, and neither of these elements can be eliminated without running afoul of the constitutional guarantee.22

In dismissing employees, the employer must furnish them two written notices: 1) one to apprise them of the particular acts or omissions for which their dismissal is sought; and 2) the other to inform them of the decision to dismiss them. As to the requirement of a hearing, its essence lies simply in the opportunity to be heard.23

The evidence in this case is crystal-clear. Respondent was not notified of the specific act or omission for which her dismissal was being sought. Neither was she given any chance to be heard, as required by law. At any rate, even if she were given the opportunity to be heard, she could not have defended herself effectively, for she knew no cause to answer to.

All that petitioner tendered to respondent was a notice of her employment termination effective the very same day, together with the equivalent of a one-month pay. This Court has already held that nothing in the law gives an employer the option to substitute the required prior notice and opportunity to be heard with the mere payment of 30 days’ salary.24

Well-settled is the rule that the employer shall be sanctioned for noncompliance with the requirements of, or for failure to observe, due process that must be observed in dismissing an employee.25

No Valid Cause for Dismissal

Moreover, Articles 282,26 28327 and 28428 of the Labor Code provide the valid grounds or causes for an employee’s dismissal. The employer has the burden of proving that it was done for any of those just or authorized causes. The failure to discharge this burden means that the dismissal was not justified, and that the employee is entitled to reinstatement and back wages.29

Notably, petitioner has not asserted any of the grounds provided by law as a valid reason for terminating the employment of respondent. It merely insists that her dismissal was validly effected pursuant to the provisions of her employment Contract, which she had voluntarily agreed to be bound to.

Truly, the contracting parties may establish such stipulations, clauses, terms and conditions as they want,

and their agreement would have the force of law between them. However, petitioner overlooks the qualification that those terms and conditions agreed upon must not be contrary to law, morals, customs, public policy or public order.30 As explained earlier, the employment Contract between petitioner and respondent is governed by Philippine labor laws. Hence, the stipulations, clauses, and terms and conditions of the Contract must not contravene our labor law provisions.

Moreover, a contract of employment is imbued with public interest. The Court has time and time again reminded parties that they "are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other."31 Also, while a contract is the law between the parties, the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties.32

Basic in our jurisprudence is the principle that when there is no showing of any clear, valid, and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal.33

Awards for Damages Justified

Finally, moral damages are recoverable when the dismissal of an employee is attended by bad faith or constitutes an act oppressive to labor or is done in a manner contrary to morals, good customs or public policy.34 Awards for moral and exemplary damages would be proper if the employee was harassed and arbitrarily dismissed by the employer.35

In affirming the awards of moral and exemplary damages, we quote with approval the following ratiocination of the labor arbiter:

"The records also show that [respondent’s] dismissal was effected by [petitioners’] capricious and high-handed manner, anti-social and oppressive, fraudulent and in bad faith, and contrary to morals, good customs and public policy. Bad faith and fraud are shown in the acts committed by [petitioners] before, during and after [respondent’s] dismissal in addition to the manner by which she was dismissed. First, [respondent] was pressured to resign for two different and contradictory reasons, namely, cost-cutting and the need for a Chinese[-]speaking credit officer, for which no written advice was given despite complainant’s request. Such wavering stance or vacillating position indicates bad faith and a dishonest purpose. Second, she was employed on account of her qualifications, experience and readiness for the position of credit officer and pressured to resign a month after she was commended for her good work. Third, the demand for [respondent’s] instant resignation on 19 April 1999 to give way to her replacement who was allegedly reporting soonest, is whimsical, fraudulent and
















in bad faith, because on 16 April 1999 she was given a period of [sic] until 15 May 1999 within which to leave. Fourth, the pressures made on her to resign were highly oppressive, anti-social and caused her absolute torture, as [petitioners] disregarded her situation as an overseas worker away from home and family, with no prospect for another job. She was not even provided with a return trip fare. Fifth, the notice of termination is an utter manifestation of bad faith and whim as it totally disregards [respondent’s] right to security of tenure and due process. Such notice together with the demands for [respondent’s] resignation contravenes the fundamental guarantee and public policy of the Philippine government on security of tenure.

"[Respondent] likewise established that as a proximate result of her dismissal and prior demands for resignation, she suffered and continues to suffer mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock and social humiliation. Her standing in the social and business community as well as prospects for employment with other entities have been adversely affected by her dismissal. [Petitioners] are thus liable for moral damages under Article 2217 of the Civil Code.

x x x x x x x x x

"[Petitioners] likewise acted in a wanton, oppressive or malevolent manner in terminating [respondent’s] employment and are therefore liable for exemplary damages. This should served [sic] as protection to other employees of [petitioner] company, and by way of example or correction for the public good so that persons similarly minded as [petitioners] would be deterred from committing the same acts."36

The Court also affirms the award of attorney’s fees. It is settled that when an action is instituted for the recovery of wages, or when employees are forced to litigate and consequently incur expenses to protect their rights and interests, the grant of attorney’s fees is legally justifiable.37

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioner.

SO ORDERED.

Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur.




CORPUS VS. STO. TOMASG.R. No. 186571, 11 August 2010

Nature of the Case: Direct Appeal from RTC decision, a petition for review on certiorari

Facts:

Petitioner was a former Filipino citizen who acquired Canadian citizenship through naturalization. He was married to the respondent but was shocked of the infidelity on the part of his wife. He went back to Canada and filed a petition for divorce and was granted. Desirous to marry another woman he now loved, he registered the divorce decree in the Civil Registry Office and was informed that the foreign decree must first be judicially recognized by a competent Philippine court. Petitioner filed for judicial recognition of foreign divorce and declaration of marriage as dissolved with the RTC where respondent failed to submit any response. The RTC denied the petition on the basis that the petitioner lacked locus standi. Thus, this case was filed before the Court.

Issues:

WON the second paragraph of Art 26 of the FC extends to aliens the right to petition a court of this jurisdiction fro the recognition of a foreign divorce decree.

Decision:

The alien spouse cannot claim under the second paragraph of Art 26 of the Family Code because the substantive right it establishes is in favour of the Filipino spouse. Only the Filipino spouse can invoke the second par of Art 26 of the Family Code.

The unavailability of the second paragraph of Art 26 of the Family Code to aliens does not necessarily strip the petitioner of legal interest to petition the RTC for the recognition of his foreign divorce decree. The petitioner, being a naturalized Canadian citizen now, is clothed by the presumptive evidence of the authenticity of foreign divorce decree with conformity to alien’s national law.

The Pasig City Civil Registry acted out of line when it registered the foreign decree of divorce on the petitioner and respondent’s marriage certificate without judicial order recognizing the said decree. The registration of the foreign divorce decree without the requisite judicial recognition is void.

The petition for review on certiorari is granted, the RTC decision is reversed and Court ordered t6he remand of the case to the trial court for further proceedings in light of the ruling.

CORPUZ VS. STO. TOMAS & OSGGR 186571

Facts

Corpuz was a former Filipino who acquired Canadian citizenship through naturalization

He married Sto. Tomas, a Filipina, in Pasig City

Corpuz went to Canada for work and when he returned to the Philippines he found out that his wife was having an affair with another man

He filed a petition for divorce in Canada and the same was granted

After two years from the effectivity of the divorce decree, Corpuz found a new Filipina to love

Corpuz went to the Pasig Civil Registry Office and registered the divorce decree on his and Sto. Tomas' marriage certificate

Corpuz filed a petition for judicial recognition of foreign divorce before the RTC


RTC denied his petition, it ruled that only the Filipino spouse can avail of the remedy under Art. 26(2) of the Family Code

IssueW/N Art. 26(2) of the Family Code extends to aliens the right to petition a court of this jurisdiction for the recognition of a foreign divorce decree

Ruling

The alien spouse can claim no right undert Art. 26(2) of the Family Code as the substantive right it establishes is in favor of the Filipino spouse

The legislative intent behind Art 26(2) is “to avoid the absurd situation whre the Filipino spouse remains married to the alien spouse who, after obtaining a divorce is no longer married to the Filipino spouse”. The legislative intent is for the benefit of the Filipino spouse by clarifying his or her marital status, settling the doubts created by the divorce decree

Art. 17 of the New Civil Code provides that the policy against absolute divorces cannot be subverted by judgments promulgated in a foreign country. The inclusion of Art. 26(2) of the Family Code provides the direct exception to the rule and serves as basis for recognizing the dissolution of the marriage between the Filipino spouse and his or her alien spouse

An action based on Art. 26(2) is not limited to the recognition of the foreign divorce decree. If the court finds that the decree capacitated the aliens spouse to remarry, the courts can declare the Filipino spouse is likewise capacitated to contract another marriage. No court in this jurisdiction, however, can make a similar declaration for the alien spouse (other than that already established by the decree) whose status and legal capacity are generally governed by his national law

Remedy Available to Alien Spouse

The availability under Art 26(2) of the Family Code to aliens does not necessarily strip the alien spouse of legal interest to petition the RTC for the recognition of his foreign divorce decree

The foreign divorce decree itself, after its authenticity and conformity with the alien's national law have been duly proven according to our rules of evidence, serves as a presumptive evidence in favor of the alien spouse, pursuant to Sec. 48, Rule 39 of the Rules of Court which provides for the effect of foreign judgment (Please see pertinent provisions of the Rules of Court, particularly Sec. 48, Rule 39 and Sec. 24 Rule 132)

* Please take note: In this case, the SC considered the recording of the divorce decree on Corpuz and Sto. Tomas' marriage certificate as legally improper. No judicial order yet exists recognizing the foreign divorce decree, thus, the Pasig City Civil Registry Office acted totally out of turn and without authority of law when it annotated the Canadian divorce decree of Corpuz and Sto. Tomas' marriage certificate, on the strength alone of the foreign decree presented by Corpuz (Please see Art. 407 of the New Civil Code and the Law on Registry of Civil Status -Act No. 3753)



Manila

THIRD DIVISION

G.R. No. 186571 August 11, 2010

GERBERT R. CORPUZ, Petitioner, vs.DAISYLYN TIROL STO. TOMAS and The SOLICITOR GENERAL, Respondents.

D E C I S I O N

BRION, J.:

Before the Court is a direct appeal from the decision1 of the Regional Trial Court (RTC) of Laoag City, Branch 11, elevated via a petition for review on certiorari2 under Rule 45 of the Rules of Court (present petition).

Petitioner Gerbert R. Corpuz was a former Filipino citizen who acquired Canadian citizenship through naturalization on November 29, 2000.3 On January 18, 2005, Gerbert married respondent Daisylyn T. Sto. Tomas, a Filipina, in Pasig City.4 Due to work and other professional commitments, Gerbert left for Canada soon after the wedding. He returned to the Philippines sometime in April 2005 to surprise Daisylyn, but was shocked to discover that his wife was having an affair with another man. Hurt and disappointed, Gerbert returned to Canada and filed a petition for divorce. The Superior Court of Justice, Windsor, Ontario, Canada granted Gerbert’s petition for divorce on December 8, 2005. The divorce decree took effect a month later, on January 8, 2006.5

Two years after the divorce, Gerbert has moved on and has found another Filipina to love. Desirous of marrying his new Filipina fiancée in the Philippines, Gerbert went to the Pasig City Civil Registry Office and registered the Canadian divorce decree on his and Daisylyn’s marriage certificate. Despite the registration of the divorce decree, an official of the National Statistics Office (NSO) informed Gerbert that the marriage between him and Daisylyn still subsists under Philippine law; to be enforceable, the foreign divorce decree must first be judicially recognized by a competent Philippine court, pursuant to NSO Circular No. 4, series of 1982.6

Accordingly, Gerbert filed a petition for judicial recognition of foreign divorce and/or declaration of marriage as dissolved (petition) with the RTC. Although summoned, Daisylyn did not file any responsive pleading but submitted instead a notarized letter/manifestation to the trial court. She offered no opposition to Gerbert’s petition and, in fact, alleged her desire to file a similar case herself but was prevented by financial and personal circumstances. She, thus, requested that she be considered as a party-in-interest with a similar prayer to Gerbert’s.

In its October 30, 2008 decision,7 the RTC denied Gerbert’s petition. The RTC concluded that Gerbert was not the proper party to institute the action for judicial recognition of the foreign divorce decree as he is a naturalized Canadian citizen. It ruled that only the Filipino spouse can avail of the remedy, under the second paragraph of Article 26 of the Family Code,8 in order for him or her to be able to remarry under Philippine law.9

Article 26 of the Family Code reads:

Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating


http://www.lawphil.net/judjuris/juri2010/aug2010/gr_186571_2010.html#fnt9









him or her to remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law.

This conclusion, the RTC stated, is consistent with the legislative intent behind the enactment of the second paragraph of Article 26 of the Family Code, as determined by the Court in Republic v. Orbecido III;10 the provision was enacted to "avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse."11

THE PETITION

From the RTC’s ruling,12 Gerbert filed the present petition.13

Gerbert asserts that his petition before the RTC is essentially for declaratory relief, similar to that filed in Orbecido; he, thus, similarly asks for a determination of his rights under the second paragraph of Article 26 of the Family Code. Taking into account the rationale behind the second paragraph of Article 26 of the Family Code, he contends that the provision applies as well to the benefit of the alien spouse. He claims that the RTC ruling unduly stretched the doctrine in Orbecido by limiting the standing to file the petition only to the Filipino spouse – an interpretation he claims to be contrary to the essence of the second paragraph of Article 26 of the Family Code. He considers himself as a proper party, vested with sufficient legal interest, to institute the case, as there is a possibility that he might be prosecuted for bigamy if he marries his Filipina fiancée in the Philippines since two marriage certificates, involving him, would be on file with the Civil Registry Office. The Office of the Solicitor General and Daisylyn, in their respective Comments,14

both support Gerbert’s position.

Essentially, the petition raises the issue of whether the second paragraph of Article 26 of the Family Code extends to aliens the right to petition a court of this jurisdiction for the recognition of a foreign divorce decree.

THE COURT’S RULING

The alien spouse can claim no right under the second paragraph of Article 26 of the Family Code as the substantive right it establishes is in favor of the Filipino spouse

The resolution of the issue requires a review of the legislative history and intent behind the second paragraph of Article 26 of the Family Code.

The Family Code recognizes only two types of defective marriages – void15 and voidable16 marriages. In both cases, the basis for the judicial declaration of absolute

nullity or annulment of the marriage exists before or at the time of the marriage. Divorce, on the other hand, contemplates the dissolution of the lawful union for cause arising after the marriage.17 Our family laws do not recognize absolute divorce between Filipino citizens.18

Recognizing the reality that divorce is a possibility in marriages between a Filipino and an alien, President Corazon C. Aquino, in the exercise of her legislative powers under the Freedom Constitution,19 enacted Executive Order No. (EO) 227, amending Article 26 of the Family Code to its present wording, as follows:

Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law.

Through the second paragraph of Article 26 of the Family Code, EO 227 effectively incorporated into the law this Court’s holding in Van Dorn v. Romillo, Jr.20 and Pilapil v. Ibay-Somera.21 In both cases, the Court refused to acknowledge the alien spouse’s assertion of marital rights after a foreign court’s divorce decree between the alien and the Filipino. The Court, thus, recognized that the foreign divorce had already severed the marital bond between the spouses. The Court reasoned in Van Dorn v. Romillo that:

To maintain x x x that, under our laws, [the Filipino spouse] has to be considered still married to [the alien spouse] and still subject to a wife's obligations x x x cannot be just. [The Filipino spouse] should not be obliged to live together with, observe respect and fidelity, and render support to [the alien spouse]. The latter should not continue to be one of her heirs with possible rights to conjugal property. She should not be discriminated against in her own country if the ends of justice are to be served.22

As the RTC correctly stated, the provision was included in the law "to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse."23 The legislative intent is for the benefit of the Filipino spouse, by clarifying his or her marital status, settling the doubts created by the divorce decree. Essentially, the second paragraph of Article 26 of the Family Code provided the Filipino spouse a substantive right to have his or her marriage to the alien spouse considered as dissolved, capacitating him or her to remarry.24 Without the second paragraph of Article 26 of

















the Family Code, the judicial recognition of the foreign decree of divorce, whether in a proceeding instituted precisely for that purpose or as a related issue in another proceeding, would be of no significance to the Filipino spouse since our laws do not recognize divorce as a mode of severing the marital bond;25 Article 17 of the Civil Code provides that the policy against absolute divorces cannot be subverted by judgments promulgated in a foreign country. The inclusion of the second paragraph in Article 26 of the Family Code provides the direct exception to this rule and serves as basis for recognizing the dissolution of the marriage between the Filipino spouse and his or her alien spouse.

Additionally, an action based on the second paragraph of Article 26 of the Family Code is not limited to the recognition of the foreign divorce decree. If the court finds that the decree capacitated the alien spouse to remarry, the courts can declare that the Filipino spouse is likewise capacitated to contract another marriage. No court in this jurisdiction, however, can make a similar declaration for the alien spouse (other than that already established by the decree), whose status and legal capacity are generally governed by his national law.26

Given the rationale and intent behind the enactment, and the purpose of the second paragraph of Article 26 of the Family Code, the RTC was correct in limiting the applicability of the provision for the benefit of the Filipino spouse. In other words, only the Filipino spouse can invoke the second paragraph of Article 26 of the Family Code; the alien spouse can claim no right under this provision.

The foreign divorce decree is presumptive evidence of a right that clothes the party with legal interest to petition for its recognition in this jurisdiction

We qualify our above conclusion – i.e., that the second paragraph of Article 26 of the Family Code bestows no rights in favor of aliens – with the complementary statement that this conclusion is not sufficient basis to dismiss Gerbert’s petition before the RTC. In other words, the unavailability of the second paragraph of Article 26 of the Family Code to aliens does not necessarily strip Gerbert of legal interest to petition the RTC for the recognition of his foreign divorce decree. The foreign divorce decree itself, after its authenticity and conformity with the alien’s national law have been duly proven according to our rules of evidence, serves as a presumptive evidence of right in favor of Gerbert, pursuant to Section 48, Rule 39 of the Rules of Court which provides for the effect of foreign judgments. This Section states:

SEC. 48. Effect of foreign judgments or final orders.—The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows:

(a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title of the thing; and

(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title.

In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

To our mind, direct involvement or being the subject of the foreign judgment is sufficient to clothe a party with the requisite interest to institute an action before our courts for the recognition of the foreign judgment. In a divorce situation, we have declared, no less, that the divorce obtained by an alien abroad may be recognized in the Philippines, provided the divorce is valid according to his or her national law.27

The starting point in any recognition of a foreign divorce judgment is the acknowledgment that our courts do not take judicial notice of foreign judgments and laws. Justice Herrera explained that, as a rule, "no sovereign is bound to give effect within its dominion to a judgment rendered by a tribunal of another country."28 This means that the foreign judgment and its authenticity must be proven as facts under our rules on evidence, together with the alien’s applicable national law to show the effect of the judgment on the alien himself or herself.29 The recognition may be made in an action instituted specifically for the purpose or in another action where a party invokes the foreign decree as an integral aspect of his claim or defense.

In Gerbert’s case, since both the foreign divorce decree and the national law of the alien, recognizing his or her capacity to obtain a divorce, purport to be official acts of a sovereign authority, Section 24, Rule 132 of the Rules of Court comes into play. This Section requires proof, either by (1) official publications or (2) copies attested by the officer having legal custody of the documents. If the copies of official records are not kept in the Philippines, these must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office.

The records show that Gerbert attached to his petition a copy of the divorce decree, as well as the required certificates proving its authenticity,30 but failed to include a copy of the Canadian law on divorce.31 Under this situation, we can, at this point, simply dismiss the petition for insufficiency of supporting evidence, unless we deem









it more appropriate to remand the case to the RTC to determine whether the divorce decree is consistent with the Canadian divorce law.

We deem it more appropriate to take this latter course of action, given the Article 26 interests that will be served and the Filipina wife’s (Daisylyn’s) obvious conformity with the petition. A remand, at the same time, will allow other interested parties to oppose the foreign judgment and overcome a petitioner’s presumptive evidence of a right by proving want of jurisdiction, want of notice to a party, collusion, fraud, or clear mistake of law or fact. Needless to state, every precaution must be taken to ensure conformity with our laws before a recognition is made, as the foreign judgment, once recognized, shall have the effect of res judicata32 between the parties, as provided in Section 48, Rule 39 of the Rules of Court.33

In fact, more than the principle of comity that is served by the practice of reciprocal recognition of foreign judgments between nations, the res judicata effect of the foreign judgments of divorce serves as the deeper basis for extending judicial recognition and for considering the alien spouse bound by its terms. This same effect, as discussed above, will not obtain for the Filipino spouse were it not for the substantive rule that the second paragraph of Article 26 of the Family Code provides.

Considerations beyond the recognition of the foreign divorce decree

As a matter of "housekeeping" concern, we note that the Pasig City Civil Registry Office has already recorded the divorce decree on Gerbert and Daisylyn’s marriage certificate based on the mere presentation of the decree.34 We consider the recording to be legally improper; hence, the need to draw attention of the bench and the bar to what had been done.

Article 407 of the Civil Code states that "[a]cts, events and judicial decrees concerning the civil status of persons shall be recorded in the civil register." The law requires the entry in the civil registry of judicial decrees that produce legal consequences touching upon a person’s legal capacity and status, i.e., those affecting "all his personal qualities and relations, more or less permanent in nature, not ordinarily terminable at his own will, such as his being legitimate or illegitimate, or his being married or not."35

A judgment of divorce is a judicial decree, although a foreign one, affecting a person’s legal capacity and status that must be recorded. In fact, Act No. 3753 or the Law on Registry of Civil Status specifically requires the registration of divorce decrees in the civil registry:

Sec. 1. Civil Register. – A civil register is established for recording the civil status of persons, in which shall be entered:

(a) births;

(b) deaths;

(c) marriages;

(d) annulments of marriages;

(e) divorces;

(f) legitimations;

(g) adoptions;

(h) acknowledgment of natural children;

(i) naturalization; and

(j) changes of name.

x x x x

Sec. 4. Civil Register Books. — The local registrars shall keep and preserve in their offices the following books, in which they shall, respectively make the proper entries concerning the civil status of persons:

(1) Birth and death register;

(2) Marriage register, in which shall be entered not only the marriages solemnized but also divorces and dissolved marriages.

(3) Legitimation, acknowledgment, adoption, change of name and naturalization register.

But while the law requires the entry of the divorce decree in the civil registry, the law and the submission of the decree by themselves do not ipso facto authorize the decree’s registration. The law should be read in relation with the requirement of a judicial recognition of the foreign judgment before it can be given res judicata effect. In the context of the present case, no judicial order as yet exists recognizing the foreign divorce decree. Thus, the Pasig City Civil Registry Office acted totally out of turn and without authority of law when it annotated the Canadian divorce decree on Gerbert and Daisylyn’s marriage certificate, on the strength alone of the foreign decree presented by Gerbert.

Evidently, the Pasig City Civil Registry Office was aware of the requirement of a court recognition, as it cited NSO






Circular No. 4, series of 1982,36 and Department of Justice Opinion No. 181, series of 198237 – both of which required a final order from a competent Philippine court before a foreign judgment, dissolving a marriage, can be registered in the civil registry, but it, nonetheless, allowed the registration of the decree. For being contrary to law, the registration of the foreign divorce decree without the requisite judicial recognition is patently void and cannot produce any legal effect.1avvphi1

Another point we wish to draw attention to is that the recognition that the RTC may extend to the Canadian divorce decree does not, by itself, authorize the cancellation of the entry in the civil registry. A petition for recognition of a foreign judgment is not the proper proceeding, contemplated under the Rules of Court, for the cancellation of entries in the civil registry.

Article 412 of the Civil Code declares that "no entry in a civil register shall be changed or corrected, without judicial order." The Rules of Court supplements Article 412 of the Civil Code by specifically providing for a special remedial proceeding by which entries in the civil registry may be judicially cancelled or corrected. Rule 108 of the Rules of Court sets in detail the jurisdictional and procedural requirements that must be complied with before a judgment, authorizing the cancellation or correction, may be annotated in the civil registry. It also requires, among others, that the verified petition must be filed with the RTC of the province where the corresponding civil registry is located;38 that the civil registrar and all persons who have or claim any interest must be made parties to the proceedings;39 and that the time and place for hearing must be published in a newspaper of general circulation.40 As these basic jurisdictional requirements have not been met in the present case, we cannot consider the petition Gerbert filed with the RTC as one filed under Rule 108 of the Rules of Court.

We hasten to point out, however, that this ruling should not be construed as requiring two separate proceedings for the registration of a foreign divorce decree in the civil registry – one for recognition of the foreign decree and another specifically for cancellation of the entry under Rule 108 of the Rules of Court. The recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of special 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. Moreover, Rule 108 of the Rules of Court can serve as the appropriate adversarial proceeding41 by which the applicability of the foreign judgment can be measured and tested in terms of jurisdictional infirmities, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

WHEREFORE, we GRANT the petition for review on certiorari, and REVERSE the October 30, 2008 decision of

the Regional Trial Court of Laoag City, Branch 11, as well as its February 17, 2009 order. We order the REMAND of the case to the trial court for further proceedings in accordance with our ruling above. Let a copy of this Decision be furnished the Civil Registrar General. No costs.

SO ORDERED.








FUJIKI VS. MARINAYG.R. No. 196049 June 26, 2013

FACTS:Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria Paz Galela Marinay (Marinay) in

the Philippines on 23 January 2004. The marriage did not

sit well with petitioner’s parents. Thus, Fujiki could not bring his wife to Japan where he resides. Eventually, they lost contact with each other.In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first marriage being dissolved, Marinay and Maekara were married on 15 May 2008 in

Quezon City, Philippines. Maekara brought Marinay to Japan. However, Marinay allegedly suffered physical abuse from Maekara. She left Maekara and started to contact Fujiki.Fujiki and Marinay met in Japan and they were able to 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 petition in the RTC entitled: “Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of Marriage).”

DECISION OF LOWER COURTS:

(1) RTC: dismissed the petition for "Judicial Recognition of Foreign Judgment ·(or Decree of Absolute Nullity of Marriage)" based on improper venue and the lack of personality of petitioner, Minoru Fujiki, to file the petition.

ISSUES & RULING:

(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) is applicable.

No. Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a foreign country.

Moreover, in Juliano-Llave v. Republic, this Court held that

the rule in 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 apply if the reason behind the

petition is bigamy.” While the Philippines has no divorce

law, the Japanese Family Court judgment is fully consistent with Philippine public policy, as bigamous marriages are declared void from the beginning under Article 35(4) of the Family Code. Bigamy is a crime under Article 349 of the Revised Penal Code. Thus, Fujiki can prove the existence of the Japanese Family Court judgment in accordance with Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.

(2) Whether a husband or wife of a prior marriage can file a petition to recognize a foreign judgment nullifying the subsequent marriage between his or her spouse and a foreign citizen on the ground of bigamy.

Yes. “[t]he recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of special 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 states:


Sec. 1. Who may file petition. — Any person interested in any act, event, order or decree concerning the civil status of persons which has been recorded in the civil register, may file a verified petition for the cancellation or correction of any entry relating thereto, with the Regional Trial Court of the province where the corresponding civil registry is located. (Emphasis supplied)There is no doubt that the prior spouse has a personal and material interest in maintaining the integrity of the marriage he contracted and the property relations arising from it.

(3) Whether the Regional Trial Court can recognize the foreign judgment in a proceeding for cancellation or correction of entries in the Civil Registry under Rule 108 of the Rules of Court.

Yes. There is neither circumvention of the substantive and procedural safeguards of marriage under Philippine law, nor of the jurisdiction of Family Courts under R.A. No. 8369. A recognition of a foreign judgment is not an action to nullify a marriage. It is an action for Philippine courts to recognize the effectivity of a foreign judgment, which presupposes a case which was already tried and decided under foreign law.

In the recognition of foreign judgments, Philippine courts are incompetent to substitute their judgment on how a case was decided under foreign law. They cannot decide on the “family rights and duties, or on the status, condition and legal capacity” of the foreign citizen who is a party to the foreign judgment. Thus, Philippine courts are limited to the question of whether to extend the effect of a foreign judgment in the Philippines. In a foreign judgment relating to the status of a marriage involving a citizen of a foreign country, Philippine courts only decide whether to extend its effect to the Filipino party, under the rule of lex nationalii expressed in Article 15 of the Civil Code.

For this purpose, Philippine courts will only determine (1) whether the foreign judgment is inconsistent with an overriding public policy in the Philippines; and (2) whether any alleging party is able to prove an extrinsic ground to repel the foreign judgment, i.e. want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. If there is neither inconsistency with public policy nor adequate proof to repel the judgment, Philippine courts should, by default, recognize the foreign judgment as part of the comity of nations.


Manila

SECOND DIVISION

G.R. No. 196049 June 26, 2013

MINORU FUJIKI, PETITIONER, vs.MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL REGISTRAR OF QUEZON CITY, AND THE ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE NATIONAL STATISTICS OFFICE, RESPONDENTS.

D E C I S I O N

CARPIO, J.:

The Case

This is a direct recourse to this Court from the Regional Trial Court (RTC), Branch 107, Quezon City, through a petition for review on certiorari under Rule 45 of the Rules of Court on a pure question of law. The petition assails the Order1 dated 31 January 2011 of the RTC in Civil Case No. Q-11-68582 and its Resolution dated 2 March 2011 denying petitioner’s Motion for Reconsideration. The RTC dismissed the petition for "Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of Marriage)" based on improper venue and the lack of personality of petitioner, Minoru Fujiki, to file the petition.

The Facts

Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria Paz Galela Marinay (Marinay) in the Philippines2 on 23 January 2004. The marriage did not sit well with petitioner’s parents. Thus, Fujiki could not bring his wife to Japan where he resides. Eventually, they lost contact with each other.

In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first marriage being dissolved, Marinay and Maekara were married on 15 May 2008 in Quezon City, Philippines. Maekara brought Marinay to Japan. However, Marinay allegedly suffered physical abuse from Maekara. She left Maekara and started to contact Fujiki.3

Fujiki and Marinay met in Japan and they were able to 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.4 On 14 January 2011, Fujiki filed a petition in the RTC entitled: "Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of Marriage)." Fujiki prayed that (1) the Japanese Family Court judgment be recognized; (2) that the bigamous marriage between Marinay and Maekara be declared void ab initio under Articles 35(4) and 41 of the Family Code of the Philippines;5 and (3) for the RTC to direct the Local Civil Registrar of Quezon City to annotate the Japanese Family Court judgment on the Certificate of







Marriage between Marinay and Maekara and to endorse such annotation to the Office of the Administrator and Civil Registrar General in the National Statistics Office (NSO).6

The Ruling of the Regional Trial Court

A few days after the filing of the petition, the RTC immediately issued an Order dismissing the petition and withdrawing the case from its active civil docket.7 The RTC cited the following provisions of the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC):

Sec. 2. Petition for declaration of absolute nullity of void marriages. –

(a) Who may file. – A petition for declaration of absolute nullity of void marriage may be filed solely by the husband or the wife.

x x x x

Sec. 4. Venue. – The petition shall be filed in the Family Court of the province or city where the petitioner or the respondent has been residing for at least six months prior to the date of filing, or in the case of a non-resident respondent, where he may be found in the Philippines, at the election of the petitioner. x x x

The RTC ruled, without further explanation, that the petition was in "gross violation" of the above provisions. The trial court based its dismissal on Section 5(4) of A.M. No. 02-11-10-SC which provides that "[f]ailure to comply with any of the preceding requirements may be a ground for immediate dismissal of the petition."8 Apparently, the RTC took the view that only "the husband or the wife," in this case either Maekara or Marinay, can file the petition to declare their marriage void, and not Fujiki.

Fujiki moved that the Order be reconsidered. He argued that A.M. No. 02-11-10-SC contemplated ordinary civil actions for declaration of nullity and annulment of marriage. Thus, A.M. No. 02-11-10-SC does not apply. A petition for recognition of foreign judgment is a special proceeding, which "seeks to establish a status, a right or a particular fact,"9 and not a civil action which is "for the enforcement or protection of a right, or the prevention or redress of a wrong."10 In other words, the petition in the RTC sought to establish (1) the status and concomitant rights of Fujiki and Marinay as husband and wife and (2) the fact of the rendition of the Japanese Family Court judgment declaring the marriage between Marinay and Maekara as void on the ground of bigamy. The petitioner contended that the Japanese judgment was consistent with Article 35(4) of the Family Code of the Philippines11

on bigamy and was therefore entitled to recognition by Philippine courts.12

In any case, it was also Fujiki’s view that A.M. No. 02-11-10-SC applied only to void marriages under Article 36 of the Family Code on the ground of psychological incapacity.13 Thus, Section 2(a) of A.M. No. 02-11-10-SC provides that "a petition for declaration of absolute nullity of void marriages may be filed solely by the husband or the wife." To apply Section 2(a) in bigamy would be absurd because only the guilty parties would be permitted to sue. In the words of Fujiki, "[i]t is not, of course, difficult to realize that the party interested in having a bigamous marriage declared a nullity would be the husband in the prior, pre-existing marriage."14 Fujiki had material interest and therefore the personality to nullify a bigamous marriage.

Fujiki argued that Rule 108 (Cancellation or Correction of Entries in the Civil Registry) of the Rules of Court is applicable. Rule 108 is the "procedural implementation" of the Civil Register Law (Act No. 3753)15 in relation to Article 413 of the Civil Code.16 The Civil Register Law imposes a duty on the "successful petitioner for divorce or annulment of marriage to send a copy of the final decree of the court to the local registrar of the municipality where the dissolved or annulled marriage was solemnized."17 Section 2 of Rule 108 provides that entries in the civil registry relating to "marriages," "judgments of annulments of marriage" and "judgments declaring marriages void from the beginning" are subject to cancellation or correction.18 The petition in the RTC sought (among others) to annotate the judgment of the Japanese Family Court on the certificate of marriage between Marinay and Maekara.

Fujiki’s motion for reconsideration in the RTC also asserted that the trial court "gravely erred" when, on its own, it dismissed the petition based on improper venue. Fujiki stated that the RTC may be confusing the concept of venue with the concept of jurisdiction, because it is lack of jurisdiction which allows a court to dismiss a case on its own. Fujiki cited Dacoycoy v. Intermediate Appellate Court19 which held that the "trial court cannot pre-empt the defendant’s prerogative to object to the improper laying of the venue by motu proprio dismissing the case."20 Moreover, petitioner alleged that the trial court should not have "immediately dismissed" the petition under Section 5 of A.M. No. 02-11-10-SC because he substantially complied with the provision.

On 2 March 2011, the RTC resolved to deny petitioner’s motion for reconsideration. In its Resolution, the RTC stated that A.M. No. 02-11-10-SC applies because the petitioner, in effect, prays for a decree of absolute nullity of marriage.21 The trial court reiterated its two grounds for dismissal, i.e. lack of personality to sue and improper venue under Sections 2(a) and 4 of A.M. No. 02-11-10-SC. The RTC considered Fujiki as a "third person"22 in the proceeding because he "is not the husband in the decree of divorce issued by the Japanese Family Court, which he now seeks to be judicially recognized, x x x."23 On the other hand, the RTC did not explain its ground of




















impropriety of venue. It only said that "[a]lthough the Court cited Sec. 4 (Venue) x x x as a ground for dismissal of this case[,] it should be taken together with the other ground cited by the Court x x x which is Sec. 2(a) x x x."24

The RTC further justified its motu proprio dismissal of the petition based on Braza v. The City Civil Registrar of Himamaylan City, Negros Occidental.25 The Court in Braza ruled that "[i]n a special proceeding for correction of entry under Rule 108 (Cancellation or Correction of Entries in the Original Registry), the trial court has no jurisdiction to nullify marriages x x x."26 Braza emphasized that the "validity of marriages as well as legitimacy and filiation can be questioned only in a direct action seasonably filed by the proper party, and not through a collateral attack such as [a] petition [for correction of entry] x x x."27

The RTC considered the petition as a collateral attack on the validity of marriage between Marinay and Maekara. The trial court held that this is a "jurisdictional ground" to dismiss the petition.28 Moreover, the verification and certification against forum shopping of the petition was not authenticated as required under Section 529 of A.M. No. 02-11-10-SC. Hence, this also warranted the "immediate dismissal" of the petition under the same provision.

The Manifestation and Motion of the Office of the Solicitor General and the Letters of Marinay and Maekara

On 30 May 2011, the Court required respondents to file their comment on the petition for review.30 The public respondents, the Local Civil Registrar of Quezon City and the Administrator and Civil Registrar General of the NSO, participated through the Office of the Solicitor General. Instead of a comment, the Solicitor General filed a Manifestation and Motion.31

The Solicitor General agreed with the petition. He prayed that the RTC’s "pronouncement that the petitioner failed to comply with x x x A.M. No. 02-11-10-SC x x x be set aside" and that the case be reinstated in the trial court for further proceedings.32 The Solicitor General argued that Fujiki, as the spouse of the first marriage, is an injured party who can sue to declare the bigamous marriage between Marinay and Maekara void. The Solicitor General cited Juliano-Llave v. Republic33 which held that Section 2(a) of A.M. No. 02-11-10-SC does not apply in cases of bigamy. In Juliano-Llave, this Court explained:

[t]he subsequent spouse may only be expected to take action if he or she had only discovered during the connubial period that the marriage was bigamous, and especially if the conjugal bliss had already vanished. Should parties in a subsequent marriage benefit from the bigamous marriage, it would not be expected that they

would file an action to declare the marriage void and thus, in such circumstance, the "injured spouse" who should be given a legal remedy is the one in a subsisting previous marriage. The latter is clearly the aggrieved party as the bigamous marriage not only threatens the financial and the property ownership aspect of the prior marriage but most of all, it causes an emotional burden to the prior spouse. The subsequent marriage will always be a reminder of the infidelity of the spouse and the disregard of the prior marriage which sanctity is protected by the Constitution.34

The Solicitor General contended that the petition to recognize the Japanese Family Court judgment may be made in a Rule 108 proceeding.35 In Corpuz v. Santo Tomas,36 this Court held that "[t]he recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of special 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."37 While Corpuz concerned a foreign divorce decree, in the present case the Japanese Family Court judgment also affected the civil status of the parties, especially Marinay, who is a Filipino citizen.

The Solicitor General asserted that Rule 108 of the Rules of Court is the procedure to record "[a]cts, events and judicial decrees concerning the civil status of persons" in the civil registry as required by Article 407 of the Civil Code. In other words, "[t]he law requires the entry in the civil registry of judicial decrees that produce legal consequences upon a person’s legal capacity and status x x x."38 The Japanese Family Court judgment directly bears on the civil status of a Filipino citizen and should therefore be proven as a fact in a Rule 108 proceeding.

Moreover, the Solicitor General argued that there is no jurisdictional infirmity in assailing a void marriage under Rule 108, citing De Castro v. De Castro39 and Niñal v. Bayadog40 which declared that "[t]he validity of a void marriage may be collaterally attacked."41

Marinay and Maekara individually sent letters to the Court to comply with the directive for them to comment on the petition.42 Maekara wrote that Marinay concealed from him the fact that she was previously married to Fujiki.43

Maekara also denied that he inflicted any form of violence on Marinay.44 On the other hand, Marinay wrote that she had no reason to oppose the petition.45 She would like to maintain her silence for fear that anything she say might cause misunderstanding between her and Fujiki.46

The Issues

Petitioner raises the following legal issues:

(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of

























Voidable Marriages (A.M. No. 02-11-10-SC) is applicable.

(2) Whether a husband or wife of a prior marriage can file a petition to recognize a foreign judgment nullifying the subsequent marriage between his or her spouse and a foreign citizen on the ground of bigamy.

(3) Whether the Regional Trial Court can recognize the foreign judgment in a proceeding for cancellation or correction of entries in the Civil Registry under Rule 108 of the Rules of Court.

The Ruling of the Court

We grant the petition.

The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a foreign country. Moreover, in Juliano-Llave v. Republic,47 this Court held that the rule in 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 apply if the reason behind the petition is bigamy."48

I.

For Philippine courts to recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a foreign country, the petitioner only needs to prove the foreign judgment as a fact under the Rules of Court. To be more specific, a copy of the foreign judgment may be admitted in evidence and proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.49 Petitioner may prove the Japanese Family Court judgment through (1) an official publication or (2) a certification or copy attested by the officer who has custody of the judgment. If the office which has custody is in a foreign country such as Japan, the certification may be made by the proper diplomatic or consular officer of the Philippine foreign service in Japan and authenticated by the seal of office.50

To hold that A.M. No. 02-11-10-SC applies to a petition for recognition of foreign judgment would mean that the trial court and the parties should follow its provisions, including the form and contents of the petition,51 the service of summons,52 the investigation of the public prosecutor,53 the setting of pre-trial,54 the trial55 and the judgment of the trial court.56 This is absurd because it will litigate the case anew. It will defeat the purpose of recognizing foreign judgments, which is "to limit repetitive litigation on claims and issues."57 The

interpretation of the RTC is tantamount to relitigating the case on the merits. In Mijares v. Rañada,58 this Court explained that "[i]f every judgment of a foreign court were reviewable on the merits, the plaintiff would be forced back on his/her original cause of action, rendering immaterial the previously concluded litigation."59

A foreign judgment relating to the status of a marriage affects the civil status, condition and legal capacity of its parties. However, the effect of a foreign judgment is not automatic. To extend the effect of a foreign judgment in the Philippines, Philippine courts must determine if the foreign judgment is consistent with domestic public policy and other mandatory laws.60 Article 15 of the Civil Code provides that "[l]aws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad." This is the rule of lex nationalii in private international law. Thus, the Philippine State may require, for effectivity in the Philippines, recognition by Philippine courts of a foreign judgment affecting its citizen, over whom it exercises personal jurisdiction relating to the status, condition and legal capacity of such citizen.

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 status, condition and legal capacity of the foreign citizen who is under the jurisdiction of another state. Thus, Philippine courts can only recognize the foreign judgment as a fact according to the rules of evidence.

Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final order against a person creates a "presumptive evidence of a right as between the parties and their successors in interest by a subsequent title." Moreover, Section 48 of the Rules of Court states that "the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact." Thus, Philippine courts exercise limited review on foreign judgments. Courts are not allowed to delve into the merits of a foreign judgment. Once a foreign judgment is admitted and proven in a Philippine court, it can only be repelled on grounds external to its merits, i.e. , "want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact." The rule on limited review embodies the policy of efficiency and the protection of party expectations,61 as well as respecting the jurisdiction of other states.62

Since 1922 in Adong v. Cheong Seng Gee,63 Philippine courts have recognized foreign divorce decrees between a Filipino and a foreign citizen if they are successfully proven under the rules of evidence.64 Divorce involves the




















dissolution of a marriage, but the recognition of a foreign divorce decree does not involve the extended procedure under A.M. No. 02-11-10-SC or the rules of ordinary trial. While the Philippines does not have a divorce law, Philippine courts may, however, recognize a foreign divorce decree under the second paragraph of Article 26 of the Family Code, to capacitate a Filipino citizen to remarry when his or her foreign spouse obtained a divorce decree abroad.65

There is therefore no reason to disallow Fujiki to simply prove as a fact the Japanese Family Court judgment nullifying the marriage between Marinay and Maekara on the ground of bigamy. While the Philippines has no divorce law, the Japanese Family Court judgment is fully consistent with Philippine public policy, as bigamous marriages are declared void from the beginning under Article 35(4) of the Family Code. Bigamy is a crime under Article 349 of the Revised Penal Code. Thus, Fujiki can prove the existence of the Japanese Family Court judgment in accordance with Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.

II.

Since the recognition of a foreign judgment only requires proof of fact of the judgment, it may be made in a special proceeding for cancellation or correction of entries in the civil registry under Rule 108 of the Rules of Court. Rule 1, Section 3 of the Rules of Court provides that "[a] special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact." Rule 108 creates a remedy to rectify facts of a person’s life which are recorded by the State pursuant to the Civil Register Law or Act No. 3753. These are facts of public consequence such as birth, death or marriage,66 which the State has an interest in recording. As noted by the Solicitor General, in Corpuz v. Sto. Tomas this Court declared that "[t]he recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of special 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."67

Rule 108, Section 1 of the Rules of Court states:

Sec. 1. Who may file petition. — Any person interested in any act, event, order or decree concerning the civil status of persons which has been recorded in the civil register, may file a verified petition for the cancellation or correction of any entry relating thereto, with the Regional Trial Court of the province where the corresponding civil registry is located. (Emphasis supplied)

Fujiki has the personality to file a petition to recognize the Japanese Family Court judgment nullifying the marriage between Marinay and Maekara on the ground of

bigamy because the judgment concerns his civil status as married to Marinay. For the same reason he has the personality to file a petition under Rule 108 to cancel the entry of marriage between Marinay and Maekara in the civil registry on the basis of the decree of the Japanese Family Court.

There is no doubt that the prior spouse has a personal and material interest in maintaining the integrity of the marriage he contracted and the property relations arising from it. There is also no doubt that he is interested in the cancellation of an entry of a bigamous marriage in the civil registry, which compromises the public record of his marriage. The interest derives from the substantive right of the spouse not only to preserve (or dissolve, in limited instances68) his most intimate human relation, but also to protect his property interests that arise by operation of law the moment he contracts marriage.69 These property interests in marriage include the right to be supported "in keeping with the financial capacity of the family"70 and preserving the property regime of the marriage.71

Property rights are already substantive rights protected by the Constitution,72 but a spouse’s right in a marriage extends further to relational rights recognized under Title III ("Rights and Obligations between Husband and Wife") of the Family Code.73 A.M. No. 02-11-10-SC cannot "diminish, increase, or modify" the substantive right of the spouse to maintain the integrity of his marriage.74 In any case, Section 2(a) of A.M. No. 02-11-10-SC preserves this substantive right by limiting the personality to sue to the husband or the wife of the union recognized by law.

Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse of a subsisting marriage to question the validity of a subsequent marriage on the ground of bigamy. On the contrary, when Section 2(a) states that "[a] petition for declaration of absolute nullity of void marriage may be filed solely by the husband or the wife"75—it refers to the husband or the wife of the subsisting marriage. Under Article 35(4) of the Family Code, bigamous marriages are void from the beginning. Thus, the parties in a bigamous marriage are neither the husband nor the wife under the law. The husband or the wife of the prior subsisting marriage is the one who has the personality to file a petition for declaration of absolute nullity of void marriage under Section 2(a) of A.M. No. 02-11-10-SC.

Article 35(4) of the Family Code, which declares bigamous marriages void from the beginning, is the civil aspect of Article 349 of the Revised Penal Code,76 which penalizes bigamy. Bigamy is a public crime. Thus, anyone can initiate prosecution for bigamy because any citizen has an interest in the prosecution and prevention of crimes.77 If anyone can file a criminal action which leads to the declaration of nullity of a bigamous marriage,78

there is more reason to confer personality to sue on the husband or the wife of a subsisting marriage. The prior spouse does not only share in the public interest of
















prosecuting and preventing crimes, he is also personally interested in the purely civil aspect of protecting his marriage.

When the right of the spouse to protect his marriage is violated, the spouse is clearly an injured party and is therefore interested in the judgment of the suit.79 Juliano-Llave ruled that the prior spouse "is clearly the aggrieved party as the bigamous marriage not only threatens the financial and the property ownership aspect of the prior marriage but most of all, it causes an emotional burden to the prior spouse."80 Being a real party in interest, the prior spouse is entitled to sue in order to declare a bigamous marriage void. For this purpose, he can petition a court to recognize a foreign judgment nullifying the bigamous marriage and judicially declare as a fact that such judgment is effective in the Philippines. Once established, there should be no more impediment to cancel the entry of the bigamous marriage in the civil registry.

III.

In Braza v. The City Civil Registrar of Himamaylan City, Negros Occidental, this Court held that a "trial court has no jurisdiction to nullify marriages" in a special proceeding for cancellation or correction of entry under Rule 108 of the Rules of Court.81 Thus, the "validity of marriage[] x x x can be questioned only in a direct action" to nullify the marriage.82 The RTC relied on Braza in dismissing the petition for recognition of foreign judgment as a collateral attack on the marriage between Marinay and Maekara.

Braza is not applicable because Braza does not involve a recognition of a foreign judgment nullifying a bigamous marriage where one of the parties is a citizen of the foreign country.

To be sure, a petition for correction or cancellation of an entry in the civil registry cannot substitute for an action to invalidate a marriage. A direct action is necessary to prevent circumvention of the substantive and procedural safeguards of marriage under the Family Code, A.M. No. 02-11-10-SC and other related laws. Among these safeguards are the requirement of proving the limited grounds for the dissolution of marriage,83 support pendente lite of the spouses and children,84 the liquidation, partition and distribution of the properties of the spouses,85 and the investigation of the public prosecutor to determine collusion.86 A direct action for declaration of nullity or annulment of marriage is also necessary to prevent circumvention of the jurisdiction of the Family Courts under the Family Courts Act of 1997 (Republic Act No. 8369), as a petition for cancellation or correction of entries in the civil registry may be filed in the Regional Trial Court "where the corresponding civil registry is located."87 In other words, a Filipino citizen

cannot dissolve his marriage by the mere expedient of changing his entry of marriage in the civil registry.

However, this does not apply in a petition for correction or cancellation of a civil registry entry based on the recognition of a foreign judgment annulling a marriage where one of the parties is a citizen of the foreign country. There is neither circumvention of the substantive and procedural safeguards of marriage under Philippine law, nor of the jurisdiction of Family Courts under R.A. No. 8369. A recognition of a foreign judgment is not an action to nullify a marriage. It is an action for Philippine courts to recognize the effectivity of a foreign judgment, which presupposes a case which was already tried and decided under foreign law. The procedure in A.M. No. 02-11-10-SC does not apply in a petition to recognize a foreign judgment annulling a bigamous marriage where one of the parties is a citizen of the foreign country. Neither can R.A. No. 8369 define the jurisdiction of the foreign court.

Article 26 of the Family Code confers jurisdiction on Philippine courts to extend the effect of a foreign divorce 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 foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law." In Republic v. Orbecido,88 this Court recognized the legislative intent of the second paragraph of Article 26 which is "to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse"89 under the laws of his or her country. The second paragraph of Article 26 of the Family Code only authorizes Philippine courts to adopt the effects of a foreign divorce decree precisely because the Philippines does not allow divorce. Philippine courts cannot try the case on the merits because it is tantamount to trying a case for divorce.

The second paragraph of Article 26 is only a corrective measure to address the anomaly that results from a marriage between a Filipino, whose laws do not allow divorce, and a foreign citizen, whose laws allow divorce. The anomaly consists in the Filipino spouse being tied to the marriage while the foreign spouse is free to marry under the laws of his or her country. The correction is made by extending in the Philippines the effect of the foreign divorce decree, which is already effective in the country where it was rendered. The second paragraph of Article 26 of the Family Code is based on this Court’s decision in Van Dorn v. Romillo90 which declared that the Filipino spouse "should not be discriminated against in her own country if the ends of justice are to be served."91















The principle in Article 26 of the Family Code applies in a marriage between a Filipino and a foreign citizen who obtains a foreign judgment nullifying the marriage on the ground of bigamy. The Filipino spouse may file a petition abroad to declare the marriage void on the ground of bigamy. The principle in the second paragraph of Article 26 of the Family Code applies because the foreign spouse, after the foreign judgment nullifying the marriage, is capacitated to remarry under the laws of his or her country. If the foreign judgment is not recognized in the Philippines, the Filipino spouse will be discriminated—the foreign spouse can remarry while the Filipino spouse cannot remarry.

Under the second paragraph of Article 26 of the Family Code, Philippine courts are empowered to correct a situation where the Filipino spouse is still tied to the marriage while the foreign spouse is free to marry. Moreover, notwithstanding Article 26 of the Family Code, Philippine courts already have jurisdiction to extend the effect of a foreign judgment in the Philippines to the extent that the foreign judgment does not contravene domestic public policy. A critical difference between the case of a foreign divorce decree and a foreign judgment nullifying a bigamous marriage is that bigamy, as a ground for the nullity of marriage, is fully consistent with Philippine public policy as expressed in Article 35(4) of the Family Code and Article 349 of the Revised Penal Code. The Filipino spouse has the option to undergo full trial by filing a petition for declaration of nullity of marriage under A.M. No. 02-11-10-SC, but this is not the only remedy available to him or her. Philippine courts have jurisdiction to recognize a foreign judgment nullifying a bigamous marriage, without prejudice to a criminal prosecution for bigamy.

In the recognition of foreign judgments, Philippine courts are incompetent to substitute their judgment on how a case was decided under foreign law. They cannot decide on the "family rights and duties, or on the status, condition and legal capacity" of the foreign citizen who is a party to the foreign judgment. Thus, Philippine courts are limited to the question of whether to extend the effect of a foreign judgment in the Philippines. In a foreign judgment relating to the status of a marriage involving a citizen of a foreign country, Philippine courts only decide whether to extend its effect to the Filipino party, under the rule of lex nationalii expressed in Article 15 of the Civil Code.

For this purpose, Philippine courts will only determine (1) whether the foreign judgment is inconsistent with an overriding public policy in the Philippines; and (2) whether any alleging party is able to prove an extrinsic ground to repel the foreign judgment, i.e. want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. If there is neither inconsistency with public policy nor adequate proof to repel the judgment, Philippine courts should, by default, recognize the foreign judgment as part of the comity of

nations. Section 48(b), Rule 39 of the Rules of Court states that the foreign judgment is already "presumptive evidence of a right between the parties." Upon recognition of the foreign judgment, this right becomes conclusive and the judgment serves as the basis for the correction or cancellation of entry in the civil registry. The recognition of the foreign judgment nullifying a bigamous marriage is a subsequent event that establishes a new status, right and fact92 that needs to be reflected in the civil registry. Otherwise, there will be an inconsistency between the recognition of the effectivity of the foreign judgment and the public records in the Philippines.1âwphi1

However, the recognition of a foreign judgment nullifying a bigamous marriage is without prejudice to prosecution for bigamy under Article 349 of the Revised Penal Code.93

The recognition of a foreign judgment nullifying a bigamous marriage is not a ground for extinction of criminal liability under Articles 89 and 94 of the Revised Penal Code. Moreover, under Article 91 of the Revised Penal Code, "[t]he term of prescription [of the crime of bigamy] shall not run when the offender is absent from the Philippine archipelago."

Since A.M. No. 02-11-10-SC is inapplicable, the Court no longer sees the need to address the questions on venue and the contents and form of the petition under Sections 4 and 5, respectively, of A.M. No. 02-11-10-SC.

WHEREFORE, we GRANT the petition. The Order dated 31 January 2011 and the Resolution dated 2 March 2011 of the Regional Trial Court, Branch 107, Quezon City, in Civil Case No. Q-11-68582 are REVERSED and SET ASIDE. The Regional Trial Court is ORDERED to REINSTATE the petition for further proceedings in accordance with this Decision.

SO ORDERED.

Brion, Del Castillo, Perez, and Perlas-Bernabe, JJ., concur.




VALMONTE VS. CAG.R. No. 108538 January 22, 1996

Service of Summons

Facts:

1. Petitioner Lourdes A. Valmonte is a foreign resident. Petitioners Lourdes and Alfredo are husband and wife both residents of 90222 Carkeek Drive South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his profession in the Philippines, commuting for this purpose between his residence in the state of Washington and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila.

2. Private respondent Rosita Dimalanta, who is the sister of petitioner filed an action for partition against former and her husband. She alleged that, the plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses but, for purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmonte’s spouse holds office and where he can be found.He husband was also her counsel, who has a law office in the Philippines. The summons were served on her husband.

3. Petitioner in a letter, referred private respondent’s counsel to her husband as the party to whom all communications intended for her should be sent. Service of summons was then made upon petitioner Alfredo at his office in Manila. Alfredo D. Valmonte accepted his summons, but not the one for Lourdes, on the ground that he was not authorized to accept the process on her behalf. Accordingly the process server left without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.

4. Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the private respondent’s motion. RTC denied the MR of respondents. CA declared petitioner Lourdes in default. Said decision was received by Alfredo hence this petition.

Issue: Whether or not petitioner Lourdes A. Valmonte was validly served with summons. Ruling:


NO.There was no valid service of summons on Lourdes.

1. The action herein is in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendant’s interest in a specific property and not to render a judgment against him. As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, § 17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient.

2. In the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant resides. The service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, § 17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.

3. Secondly, the service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, § 17. As provided in § 19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the application.

4. Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes was not given ample time to file her Answer which, according to the rules, shall be not less than sixty (60) days after notice.


Manila

SECOND DIVISION

G.R. No. 108538 January 22, 1996

LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, vs.THE HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA, respondents.

D E C I S I O N

MENDOZA, J.:

Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in an action for partition filed against her and her husband, who is also her attorney, summons intended for her may be served on her husband, who has a law office in the Philippines. The Regional Trial Court of Manila, Branch 48, said no and refused to declare Lourdes A. Valmonte in default, but the Court of Appeals said yes. Hence this petition for review on certiorari.

The facts of the case are as follows:

Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and wife. They are both residents of 90222 Carkeek Drive South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his profession in the Philippines, commuting for this purpose between his residence in the state of Washington and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini Ermita, Manila.

On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of petitioner Lourdes A. Valmonte, filed a complaint for partition of real property and accounting of rentals against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte before the Regional Trial Court of Manila, Branch 48. The subject of the action is a three-door apartment located in Paco, Manila.

In her Complaint, private respondent alleged:

The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses, of legal age and at present residents of 90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St.,


Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmonte's spouse holds office and where he can be found.

Apparently, the foregoing averments were made on the basis of a letter previously sent by petitioner Lourdes A. Valmonte to private respondent's counsel in which, in regard to the partition of the property in question, she referred private respondent's counsel to her husband as the party to whom all communications intended for her should be sent. The letter reads:

July 4, 1991

Dear Atty. Balgos:

This is in response to your letter, dated 20 June 1991, which I received on 3 July 1991. Please address all communications to my lawyer, Atty. Alfredo D. Valmonte, whose address, telephone and fax numbers appear below.

c/o Prime MarineGedisco Center, Unit 3041564 A. Mabini, ErmitaMetro ManilaTelephone: 521-1736Fax: 521-2095

Service of summons was then made upon petitioner Alfredo D. Valmonte, who at the time, was at his office in Manila. Petitioner Alfredo D. Valmonte accepted the summons, insofar as he was concerned, but refused to accept the summons for his wife, Lourdes A. Valmonte, on the ground that he was not authorized to accept the process on her behalf. Accordingly the process server left without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.

Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the private respondent's motion.

In its Order dated July 3, 1992, the trial court, denied private respondent's motion to declare petitioner Lourdes A. Valmonte in default. A motion for reconsideration was similarly denied on September 23, 1992. Whereupon, private respondent filed a petition for certiorari, prohibition and mandamus with the Court of Appeals.

On December 29, 1992, the Court of Appeals rendered a decision granting the petition and declaring Lourdes A. Valmonte in default. A copy of the appellate court's

decision was received by petitioner Alfredo D. Valmonte on January 15, 1993 at his Manila office and on January 21, 1993 in Seattle, Washington. Hence, this petition.

The issue at bar is whether in light of the facts set forth above, petitioner Lourdes A. Valmonte was validly served with summons. In holding that she had been, the Court of Appeals stated:1

[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed the aforementioned counsel of Dimalanta to address all communications (evidently referring to her controversy with her sister Mrs. Dimalanta over the Paco property, now the subject of the instant case) to her lawyer who happens also to be her husband. Such directive was made without any qualification just as was her choice/designation of her husband Atty. Valmonte as her lawyer likewise made without any qualification or reservation. Any disclaimer therefore on the part of Atty. Valmonte as to his being his wife's attorney (at least with regard to the dispute vis-a-vis (sic) the Paco property) would appear to be feeble or trifling, if not incredible.

This view is bolstered by Atty. Valmonte's subsequent alleged special appearance made on behalf of his wife. Whereas Mrs. Valmonte had manifestly authorized her husband to serve as her lawyer relative to her dispute with her sister over the Paco property and to receive all communications regarding the same and subsequently to appear on her behalf by way of a so-called special appearance, she would nonetheless now insist that the same husband would nonetheless had absolutely no authority to receive summons on her behalf. In effect, she is asserting that representation by her lawyer (who is also her husband) as far as the Paco property controversy is concerned, should only be made by him when such representation would be favorable to her but not otherwise. It would obviously be inequitable for this Court to allow private respondent Lourdes A. Valmonte to hold that her husband has the authority to represent her when an advantage is to be obtained by her and to deny such authority when it would turn out to be her disadvantage. If this be allowed, Our Rules of Court, instead of being an instrument to promote justice would be made use of to thwart or frustrate the same.

xxx xxx xxx

Turning to another point, it would not do for Us to overlook the fact that the disputed summons was served not upon just an ordinary lawyer of private respondent Lourdes A. Valmonte, but upon her lawyer husband. But that is not all, the same lawyer/husband happens to be also her co-defendant in the instant case which involves real property which, according to her lawyer/husband/co-defendant, belongs to the conjugal partnership of the defendants (the


http://www.lawphil.net/judjuris/juri1996/jan1996/gr_108538_1996.html#fnt1

spouses Valmonte). It is highly inconceivable and certainly it would be contrary to human nature for the lawyer/husband/co-defendant to keep to himself the fact that they (the spouses Valmonte) had been sued with regard to a property which, he claims to be conjugal. Parenthetically, there is nothing in the records of the case before Us regarding any manifestation by private respondent Lourdes A. Valmonte about her lack of knowledge about the case instituted against her and her lawyer/husband/co-defendant by her sister Rosita. . . .

PREMISES CONSIDERED, the instant petition for certiorari, prohibition and mandamus is given due course. This Court hereby Resolves to nullify the orders of the court a quo dated July 3, 1992 and September 23, 1992 and further declares private respondent Lourdes Arreola Valmonte as having been properly served with summons.

Petitioners assail the aforequoted decision, alleging that the Court of Appeals erred (1) in refusing to apply the provisions of Rule 14, §17 of the Revised Rules of Court and applying instead Rule 14, §8 when the fact is that petitioner Lourdes A. Valmonte is a nonresident defendant; and (2) because even if Rule 14, §8 is the applicable provision, there was no valid substituted service as there was no strict compliance with the requirement by leaving a copy of the summons and complaint with petitioner Alfredo D. Valmonte. Private respondent, upon the other hand, asserts that petitioners are invoking a technicality and that strict adherence to the rules would only result in a useless ceremony.

We hold that there was no valid service of process on Lourdes A. Valmonte.

To provide perspective, it will be helpful to determine first the nature of the action filed against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte by private respondent, whether it is an action in personam, in rem or quasi in rem. This is because the rules on service of summons embodied in Rule 14 apply according to whether an action is one or the other of these actions.

In an action in personam, personal service of summons or, if this is not possible and he cannot be personally served, substituted service, as provided in Rule 14, §§7-82

is essential for the acquisition by the court of jurisdiction over the person of a defendant who does not voluntarily submit himself to the authority of the court.3 If defendant cannot be served with summons because he is temporarily abroad, but otherwise he is a Philippine resident, service of summons may, by leave of court, be made by publication.4 Otherwise stated, a resident defendant in an action in personam, who cannot be personally served with summons, may be summoned

either by means of substituted service in accordance with Rule 14, §8 or by publication as provided in §§ 17 and 18 of the same Rule.5

In all of these cases, it should be noted, defendant must be a resident of the Philippines, otherwise an action in personam cannot be brought because jurisdiction over his person is essential to make a binding decision.

On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not essential for giving the court jurisdiction so long as the court acquires jurisdiction over the res. If the defendant is a nonresident and he is not found in the country, summons may be served exterritorially in accordance with Rule 14, §17, which provides:

§17. Extraterritorial service. - When the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer..

In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the personal status of the plaintiff who is domiciled in the Philippines or the property litigated or attached.

Service of summons in the manner provided in §17 is not for the purpose of vesting it with jurisdiction but for complying with the requirements of fair play or due process, so that he will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is so minded.6

Applying the foregoing rules to the case at bar, private respondent's action, which is for partition and accounting







under Rule 69, is in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendant's interest in a specific property and not to render a judgment against him. As explained in the leading case of Banco Español Filipino v. Palanca :7

[An action quasi in rem is] an action which while not strictly speaking an action in rem partakes of that nature and is substantially such. . . . The action quasi in rem differs from the true action in rem in the circumstance that in the former an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. All proceedings having for their sole object the sale or other disposition of the property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in a general way thus designated. The judgment entered in these proceedings is conclusive only between the parties.

As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, §17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient.

Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes, the question is whether the service on her attorney, petitioner Alfredo D. Valmonte, can be justified under the third mode, namely, "in any . . . manner the court may deem sufficient."

We hold it cannot. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant resides.8 Moreover, there are several reasons why the service of summons on Atty. Alfredo D. Valmonte cannot be considered a valid service of summons on petitioner Lourdes A. Valmonte. In the first place, service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, §17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.

In the second place, service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, §17. As provided in §19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the application.

Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes A. Valmonte was not given ample time to file her Answer which, according to the rules, shall be not less than sixty (60) days after notice. It must be noted that the period to file an Answer in an action against a resident defendant differs from the period given in an action filed against a nonresident defendant who is not found in the Philippines. In the former, the period is fifteen (15) days from service of summons, while in the latter, it is at least sixty (60) days from notice.

Strict compliance with these requirements alone can assure observance of due process. That is why in one case,9 although the Court considered publication in the Philippines of the summons (against the contention that it should be made in the foreign state where defendant was residing) sufficient, nonetheless the service was considered insufficient because no copy of the summons was sent to the last known correct address in the Philippines..

Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,462-463 (1975), in which it was held that service of summons upon the defendant's husband was binding on her. But the ruling in that case is justified because summons were served upon defendant's husband in their conjugal home in Cebu City and the wife was only temporarily absent, having gone to Dumaguete City for a vacation. The action was for collection of a sum of money. In accordance with Rule 14, §8, substituted service could be made on any person of sufficient discretion in the dwelling place of the defendant, and certainly defendant's husband, who was there, was competent to receive the summons on her behalf. In any event, it appears that defendant in that case submitted to the jurisdiction of the court by instructing her husband to move for the dissolution of the writ of attachment issued in that case.

On the other hand, in the case of Gemperle v. Schenker, 10 it was held that service on the wife of a nonresident defendant was found sufficient because the defendant had appointed his wife as his attorney-in-fact. It was held that although defendant Paul Schenker was a Swiss citizen and resident of Switzerland, service of summons upon his wife Helen Schenker who was in the Philippines was sufficient because she was her husband's representative and attorney-in-fact in a civil case, which he had earlier filed against William Gemperle. In fact Gemperle's action was for damages arising from allegedly derogatory statements contained in the complaint filed in the first case. As this Court said, "[i]n other words, Mrs. Schenker had authority to sue, and had actually sued, on behalf of her husband, so that she was, also, empowered to represent him in suits filed against him, particularly in a case, like the one at bar, which is a consequence of the action brought by her on his behalf" 11 Indeed, if instead of filing an independent action Gemperle filed a counterclaim in the action brought by Mr. Schenker







against him, there would have been no doubt that the trial court could have acquired jurisdiction over Mr. Schenker through his agent and attorney-in-fact, Mrs. Schenker.

In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her husband as her attorney-in-fact. Although she wrote private respondent's attorney that "all communications" intended for her should be addressed to her husband who is also her lawyer at the latter's address in Manila, no power of attorney to receive summons for her can be inferred therefrom. In fact the letter was written seven months before the filing of this case below, and it appears that it was written in connection with the negotiations between her and her sister, respondent Rosita Dimalanta, concerning the partition of the property in question. As is usual in negotiations of this kind, the exchange of correspondence was carried on by counsel for the parties. But the authority given to petitioner's husband in these negotiations certainly cannot be construed as also including an authority to represent her in any litigation.

For the foregoing reasons, we hold that there was no valid service on petitioner Lourdes A. Valmonte in this case.

WHEREFORE, the decision appealed from is REVERSED and the orders dated July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila, Branch 48 are REINSTATED.

SO ORDERED.

Regalado, Romero and Puno, JJ., concur.

RAYRAY VS. CHAE KYUNG LEE G. R. No. L-18176 October 26, 1966

FACTS:

Plaintiff testified that he met the defendant in Pusan, Korea, sometime in 1952, where she was operating a night club; that they lived together from November 1952 to April 1955; that they were married in Pusan, Korea, on March 15, 1953, as attested to by their marriage certificate Exhibit D; that before the wedding she obtained the "police clearance" Exhibit A, written in Korean language, and dated February 16, 1953, which was necessary in order that she could contract marriage; that on June 30, 1953, he proceeded to India and left the defendant, then in advanced stage of pregnancy, in Korea; that in October, 1953, she joined him in India, bringing with her said Exhibit A, and its translation into English, Exhibit B; that he then noticed that, on February 16, 1953, defendant was already married, according to said Exhibit B; that as he confronted the defendant with the contents of this document, her reply was that it is not unusual for a Korean girl to marry twice in Korea; that when he inquired about her status on March 15, 1953, defendant confided to him that she had lived with about two (2) Americans and a Korean, adding, however, that there was no impediment to her contracting marriage with him; and that, later on, they were separated and her whereabouts are now unknown to him.

Plaintiff Lazaro Rayray seeks the annulment of his marriage to defendant Chae Kyung Lee. Inasmuch as, the latter's whereabouts is unknown, and she was formerly a resident of Pusan, Korea, summons was served by publication, as provided in the Rules of Court. Thereafter, plaintiff moved that defendant be declared in default, she not having filed an answer.

ISSUE:

WON Philippine court has jurisdiction to pass upon the validity of plaintiff's marriage to the defendant, it having been solemnized in Seoul, Korea.

RULING:

Yes.In order that a given case could be validly decided by a court of justice, it must have jurisdiction over: (1) the subject-matter of the litigation; (2) the person of the parties therein; and (3) in actions in rem or quasi-in-rem, the res.


The subject-matter of the present case is the annulment of plaintiff's marriage to the defendant, which is within the jurisdiction of our courts of first instance and, in Manila, of its Court of Juvenile and Domestic Relations.

The same acquired jurisdiction over plaintiff herein by his submission thereto in consequence of the filing of the complaint herein. Defendant was placed under the jurisdiction of said court, upon the service of summons by publication.

This is an action in rem, for it concerns the status of the parties herein, and status affects or binds the whole world. The res in the present case is the relation between said parties, or their marriage tie.[Jurisdiction over the same depends upon the nationality or domicile of the parties, not the place of celebration of marriage, or the locus celebrationis plaintiff herein is a citizen of the Philippines, domiciled therein. His status is, therefore, subject to our jurisdiction, on both counts. True that defendant was and - under plaintiff's theory -still is a non-resident alien. But, this fact does not deprive the lower court of its jurisdiction to pass upon the validity of her marriage to plaintiff herein.

The prevailing rule is, accordingly, that a court has jurisdiction over the res, in an action for annulment of marriage, provided, at least, one of the parties is domiciled in, or a national of, the forum.[8] Since plaintiff is a Filipino, domiciled in the Philippines, it follows that the lower court had jurisdiction over the res, in addition to its jurisdiction over the subject-matter and the parties. In other words, it could validly inquire into the legality of the marriage between the parties herein.


Manila

EN BANC

LAZARO B. RAYRAY, plaintiff-appellant, vs.

CHAE KYUNG LEE, defendant-appellee.

CONCEPCION, C.J.:

Appeal from a decision of the Court of Juvenile and Domestic Relations.

Plaintiff Lazaro Rayray seeks the annulment of his marriage to defendant Chae Kyung Lee. Inasmuch as, the latter's whereabouts is unknown, and she was formerly a resident of Pusan, Korea, summons was served by publication, as provided in the Rules of Court. Thereafter, plaintiff moved that defendant be declared in default, she not having filed an answer, and that a date be set for the reception of his evidence. Before acting on this motion, the lower court referred the case to the City Fiscal of Manila pursuant to Articles 88 and 101 of the Civil Code of the Philippines, for the purpose of determining whether or not a collusion between the parties exists. Said officer having found no such collusion, the case was heard on the merits. In due course, thereafter, decision was rendered dismissing plaintiff's complaint, without costs, upon the ground: (1) that the court could not nullify a marriage contracted abroad; and (2) that the facts proven do not warrant the relief prayed for. A reconsideration of this decision having been denied, plaintiff appealed to the Court of Appeals, which certified the case to the Supreme Court, the jurisdiction of the lower court being in issue in the appeal.

In relation thereto, the court a quo found that it had no jurisdiction to pass upon the validity of plaintiff's marriage to the defendant, it having been solemnized in Seoul, Korea. Said conclusion is erroneous. In order that a given case could be validly decided by a court of justice, it must have jurisdiction over (1) the subject-matter of the litigation; (2) the person of the parties therein; and (3) in actions in rem or quasi-in-rem, the res.1

The subject-matter of the present case is the annulment of plaintiff's marriage to the defendant, which is within the jurisdiction of our courts of first instance,2 and, in Manila, of its Court of Juvenile and Domestic Relations.3

The same acquired jurisdiction over plaintiff herein by his submission thereto in consequence of the filing of the complaint herein.4 Defendant was placed under the jurisdiction of said court, upon the service of summons by publication.5


This is an action in rem, for it concerns the status of the parties herein, and status affects or binds the whole word. The res in the present case is the relation between said parties, or their marriage tie.6 Jurisdiction over the same depends upon the nationality or domicile of the parties, not the place of celebration of marriage, or the locus celebrationis.7 Plaintiff here is a citizen of the Philippines, domiciled therein. His status is, therefore, subject to our jurisdiction, on both counts. True that defendant was and — under plaintiff's — theory still is a non-resident alien. But, this fact does not deprive the lower court of its jurisdiction to pass upon the validity of her marriage to plaintiff herein.

Indeed, marriage is one of the cases of double status, in that the status therein involves and affects two persons. One is married, never in abstract or a vacuum, but, always to somebody else. Hence, a judicial decree on the marriage status of a person necessarily reflects upon the status of another and the relation between them. The prevailing rule is, accordingly, that a court has jurisdiction over the res, in an action for annulment of marriage, provided, at least, one of the parties is domiciled in, or a national of, the forum.8 Since plaintiff is a Filipino, domiciled in the Philippines, it follows that the lower court had jurisdiction over the res, in addition to its jurisdiction over the subject-matter and the parties. In other words, it could validly inquire into the legality of the marriage between the parties herein.

As regards the substantial validity of said marriage, plaintiff testified that he met the defendant in Pusan Korea, sometime in 1952, where she was operating a nightclub; that they lived together from November 1952 to April 1955; that they were married in Pusan Korea, on March 15, 1953, as attested to by their marriage certificate Exhibit D; that before the wedding she obtained the "police clearance" Exhibit A, written in Korean language, and dated February 16, 1953, which was necessary in order that she could contract marriage; that on June 30, 1953, he proceeded to India and left the defendant, then in advanced stage of pregnancy, in Korea; that in October, 1953, she joined him in India, bringing with her said Exhibit A, and its translation into English, Exhibit B; that he then noticed that, on February 16, 1958, defendant was already married, according to said Exhibit B; that as he confronted the defendant with the contents of this document, her reply was that it is not unusual for a Korean girl to marry twice in Korea; that when he inquired about her status on March 15, 1953, defendant confided to him that she had lived with about two (2) Americans and a Korean, adding, however, that there was no impediment to her contracting marriage with him; and that, later on, they were separated and her whereabouts are now unknown to him.

The lower court considered plaintiffs evidence insufficient to establish that defendant was married to another person prior to March 15, 1953, and we agree with this conclusion. To begin with, Exhibit A is not signed. It

merely purports to bear the seal of the Chief of Pusan National Police. Secondly, the record does not show who prepared it, much less that he had personal knowledge of the truth of the entry therein concerning defendant's status on February 15, 1953. It should be noted, that defendant was a native, not of Pusan but of Seoul, Korea. Hence, Exhibit A could, at best, be no more than hearsay evidence. Again, when plaintiff allegedly confronted the defendant with the contents of Exhibit B, defendant did not say that she had been married before. Plaintiff declared that she admitted having previously lived with several other men, adding, however, that she had no impediment, thus, in effect, negating the alleged previous marriage.

Thirdly, if Exhibit A was obtained on February 16, 1953, in order to establish defendant's qualification to contract marriage, why is it that the wedding took place, despite the entry in said document to the effect that defendant was married already? There is no competent evidence to the effect that Korean laws permit bigamy or polygamy. Moreover, the presumption is that the foreign law is identical to the lex fori, or, in the case at bar, the Philippine Law.9 In fact, the statement, imputed by plaintiff to the defendant, to the effect that, although she had cohabited before with other men, there was no impediment to her marrying him, clearly suggests that a previous marriage on her part would have been, in her opinion, a legal obstacle to her marriage with the plaintiffs. Then too, the marriage certificate Exhibit D contains spaces for the entry of data on whether any of the contracting parties had been previously married; whether the prior marriage had been dissolved by a decree of divorce; and, if there had been such decree, the date thereof. Surely, these data would be absolutely irrelevant if polygamy were sanctioned in Korea. And, again, why is it that Exhibit D states that defendant had had no previous marriage?

Last, but not least, plaintiff cannot possibly secure the relief prayed for unless full faith and credence are given to his testimony, but we cannot believe him for the records show that he would not hesitate to lie when it suits his purpose. Thus, for instance, when plaintiff contracted marriage with the defendant, he said that he was single, although, he admitted, this was a lie, because, sometime in 1940, he married in Baguio, one Adelaida Melecio or Valdez.10 But, then he would, also, have us believe that his marriage with the latter was illegal or fictitious, because Adelaida and he did no more than sign, on a small window in the City Hall of Baguio, certain documents the contents of which he did not read.

WHEREFORE, the decision appealed from should be, as it is hereby, affirmed, with the costs of this instance against plaintiff-appellant. It is so ordered.


RAYTHEON V. ROUZIEG.R. No. 162894, February 26, 2008

FACTS:

Sometime in 1990, Brand Marine Services, Inc., a corporation duly organized and existing under the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows.

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission, a suit against BMSI and Rust International, Inc., Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of employment contract.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court of Bauang, La Union. The Complaint named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case.

Petitioner also referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as “Special Sales Representative Agreement,” the rights and obligations of the parties shall be governed by the laws of the State of Connecticut. Petitioner sought the dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim.

Petitioner asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall be governed by thelaws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute – namely, the parties and witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines – that renders our local courts inconvenient forums.

ISSUE:

WHETHER OR NOT THE COMPLAINT BE DISMISSED ON THE GROUND OF FORUM NON CONVENIENS?

RULING:


On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict of laws or the convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary appearance in court.

That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties.The choice of law stipulation will become relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from seeking remedies elsewhere. Petitioner’s averments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the court’s desistance.


Manila

SECOND DIVISION

G.R. No. 162894 February 26, 2008

RAYTHEON INTERNATIONAL, INC., petitioner, vs.STOCKTON W. ROUZIE, JR., respondent.

D E C I S I O N

TINGA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure which seeks the reversal of the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil case filed by respondent against petitioner with the trial court.

As culled from the records of the case, the following antecedents appear:

Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows.3

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of employment contract.4 On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to pay respondent’s money claims.5 Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and dismissed respondent’s complaint on the ground of lack of jurisdiction.6 Respondent elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997. The Resolution became final and executory on 09 November 1998.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the


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Regional Trial Court (RTC) of Bauang, La Union. The Complaint,7 docketed as Civil Case No. 1192-BG, named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the labor case that BMSI verbally employed respondent to negotiate the sale of services in government projects and that respondent was not paid the commissions due him from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself had combined and functioned as one company.

In its Answer,8 petitioner alleged that contrary to respondent’s claim, it was a foreign corporation duly licensed to do business in the Philippines and denied entering into any arrangement with respondent or paying the latter any sum of money. Petitioner also denied combining with BMSI and RUST for the purpose of assuming the alleged obligation of the said companies.9

Petitioner also referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as "Special Sales Representative Agreement," the rights and obligations of the parties shall be governed by the laws of the State of Connecticut.10 Petitioner sought the dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim.11

On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for Summary Judgment12 seeking the dismissal of the complaint on grounds of forum non conveniens and failure to state a cause of action. Respondent opposed the same. Pending the resolution of the omnibus motion, the deposition of Walter Browning was taken before the Philippine Consulate General in Chicago.13

In an Order14 dated 13 September 2000, the RTC denied petitioner’s omnibus motion. The trial court held that the factual allegations in the complaint, assuming the same to be admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle of forum non conveniens was inapplicable because the trial court could enforce judgment on petitioner, it being a foreign corporation licensed to do business in the Philippines.15

Petitioner filed a Motion for Reconsideration16 of the order, which motion was opposed by respondent.17 In an Order dated 31 July 2001,18 the trial court denied petitioner’s motion. Thus, it filed a Rule 65 Petition19 with the Court of Appeals praying for the issuance of a writ of certiorari and a writ of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting further proceedings.20

On 28 August 2003, the Court of Appeals rendered the assailed Decision21 denying the petition for certiorari for lack of merit. It also denied petitioner’s motion for reconsideration in the assailed Resolution issued on 10 March 2004.22

The appellate court held that although the trial court should not have confined itself to the allegations in the complaint and should have also considered evidence aliunde in resolving petitioner’s omnibus motion, it found the evidence presented by petitioner, that is, the deposition of Walter Browning, insufficient for purposes of determining whether the complaint failed to state a cause of action. The appellate court also stated that it could not rule one way or the other on the issue of whether the corporations, including petitioner, named as defendants in the case had indeed merged together based solely on the evidence presented by respondent. Thus, it held that the issue should be threshed out during trial.23 Moreover, the appellate court deferred to the discretion of the trial court when the latter decided not to desist from assuming jurisdiction on the ground of the inapplicability of the principle of forum non conveniens.

Hence, this petition raising the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST RAYTHEON INTERNATIONAL, INC.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.24

Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino Padua Law Office, counsel on record for respondent, manifested that the lawyer handling the case, Atty. Rogelio Karagdag, had severed relations with the law firm even before the filing of the instant petition and that it could no longer find the whereabouts of Atty. Karagdag or of respondent despite diligent efforts. In a Resolution25 dated 20 November 2006, the Court resolved to dispense with the filing of a comment.

The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute – namely, the parties and witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines – that renders our local courts





















inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate the immediate application of the doctrine of forum non conveniens.

Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances27 where the Court held that the local judicial machinery was adequate to resolve controversies with a foreign element, the following requisites had to be proved: (1) that the Philippine Court is one to which the parties may conveniently resort; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine Court has or is likely to have the power to enforce its decision.28

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed.29

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law30 and by the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.31 Civil Case No. 1192-BG is an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are within the jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary appearance in court.32

That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties.33

The choice of law stipulation will become relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most "convenient" or available forum and the parties are not precluded from seeking remedies elsewhere.34 Petitioner’s averments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the court’s desistance.35

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign elements. In the same manner, the Court defers to the sound discretion of the lower courts because their findings are binding on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action against petitioner. Failure to state a cause of action refers to the insufficiency of allegation in the pleading.36 As a general rule, the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded.37

The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. Petitioner contends that the deposition of Walter Browning rebutted this allegation. On this score, the resolution of the Court of Appeals is instructive, thus:

x x x Our examination of the deposition of Mr. Walter Browning as well as other documents produced in the hearing shows that these evidence aliunde are not quite sufficient for us to mete a ruling that the complaint fails to state a cause of action.

Annexes "A" to "E" by themselves are not substantial, convincing and conclusive proofs that Raytheon Engineers and Constructors, Inc. (REC) assumed the warranty obligations of defendant Rust International in the Makar Port Project in General Santos City, after Rust International ceased to exist after being absorbed by REC. Other documents already submitted in evidence are likewise meager to preponderantly conclude that Raytheon International, Inc., Rust International[,] Inc. and Brand Marine Service, Inc. have combined into one company, so much so that Raytheon














International, Inc., the surviving company (if at all) may be held liable for the obligation of BMSI to respondent Rouzie for unpaid commissions. Neither these documents clearly speak otherwise.38

As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged together requires the presentation of further evidence, which only a full-blown trial on the merits can afford.

WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 67001 are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

HASEGAWA VS. KITAMURAG.R. No. 149177 November 23, 2007

538 SCRA 261 – Conflict of Laws – Private International Law – Jurisdiction – Lex Loci Celebrationis – Lex Loci

Solutionis – State of the Most Significant Relationship – Forum Non Conveniens

FACTS:

In March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was contracted by the Department of Public Works and Highways (DPWH) to supervise the construction of the Southern Tagalog Access Road. In April 1999, Nippon entered into an independent contractor agreement (ICA) with Minoru Kitamura for the latter to head the said project. The ICA was entered into in Japan and is effective for a period of 1 year (so until April 2000). In January 2000, DPWH awarded the Bongabon-Baler Road project to Nippon. Nippon subsequently assigned Kitamura to head the road project. But in February 2000, Kazuhiro Hasegawa, the general manager of Nippon informed Kitamura that they are pre-terminating his contract. Kitamura sought Nippon to reconsider but Nippon refused to negotiate. Kitamura then filed a complaint for specific performance and damages against Nippon in the RTC of Lipa.

Hasegawa filed a motion to dismiss on the ground that the contract was entered in Japan hence, applying the principle of lex loci celebracionis, cases arising from the contract should be cognizable only by Japanese courts. The trial court denied the motion. Eventually, Nippon filed a petition for certiorari with the Supreme Court.

Hasegawa, on appeal significantly changed its theory, this time invoking forum non conveniens; that the RTC is an inconvenient forum because the parties are Japanese nationals who entered into a contract in Japan. Kitamura on the other hand invokes the trial court’s ruling which states that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance, so since the obligations in the ICA are executed in the Philippines, courts here have jurisdiction.

ISSUE: Whether or not the complaint against Nippon should be dismissed.

HELD: No. The trial court did the proper thing in taking cognizance of it.

In the first place, the case filed by Kitamura is a complaint for specific performance and damages. Such case is incapable of pecuniary estimation; such cases are within the jurisdiction of the regional trial court.



Hasegawa filed his motion to dismiss on the ground of forum non conveniens. However, such ground is not one of those provided for by the Rules as a ground for dismissing a civil case.

The Supreme Court also emphasized that the contention that Japanese laws should apply is premature. In conflicts cases, there are three phases and each next phase commences when one is settled, to wit:

1. Jurisdiction – Where should litigation be initiated? Court must have jurisdiction over the subject matter, the parties, the issues, the property, the res. Also considers, whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties.

2. Choice of Law – Which law will the court apply? Once a local court takes cognizance, it does not mean that the local laws must automatically apply. The court must determine which substantive law when applied to the merits will be fair to both parties.

3. Recognition and Enforcement of Judgment – Where can the resulting judgment be enforced?

This case is not yet in the second phase because upon the RTC’s taking cognizance of the case, Hasegawa immediately filed a motion to dismiss, which was denied. He filed a motion for reconsideration, which was also denied. Then he bypassed the proper procedure by immediately filing a petition for certiorari. The question of which law should be applied should have been settled in the trial court had Hasegawa not improperly appealed the interlocutory order denying his MFR.


Manila

THIRD DIVISION

G.R. No. 149177 November 23, 2007

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., Petitioners, vs.MINORU KITAMURA, Respondent.

NACHURA,

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001 Resolution2 denying the motion for reconsideration thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical and management support in the infrastructure projects of foreign governments,3 entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines.4 The agreement provides that respondent was to extend professional services to Nippon for a year starting on April 1, 1999.5

Nippon then assigned respondent to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy contract with the Philippine Government.6

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project.7 Respondent was named as the project manager in the contract's Appendix 3.1.8

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed respondent that the company had no more intention of automatically renewing his ICA. His services would be engaged by the company only up to the substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry.9

Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted that respondent’s contract was for a fixed term that had already expired, and refused to negotiate for the renewal of the ICA.10


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As he was not able to generate a positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with the Regional Trial Court of Lipa City.11

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for improper pre-termination of respondent's ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus.12

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI Project.13

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank14 that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance,15 denied the motion to dismiss.16 The trial court subsequently denied petitioners' motion for reconsideration,17 prompting them to file with the appellate court, on August 14, 2000, their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On August 23, 2000, the CA resolved to dismiss the petition on procedural grounds—for lack of statement of material dates and for insufficient verification and certification against forum shopping.19 An Entry of Judgment was later issued by the appellate court on September 20, 2000.20

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material dates and attaching thereto the proper verification and certification. This second petition, which substantially raised the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.21

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001 Decision22

finding no grave abuse of discretion in the trial court's denial of the motion to dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the case, because nowhere in the pleadings was the validity of the written agreement put in issue. The CA thus declared that the trial court was correct in applying instead the principle of lex loci solutionis.23

Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001 Resolution.24

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review on Certiorari25 imputing the following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.26

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex contractus, the "state of the most significant relationship rule," or forum non conveniens.

However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.

Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has already barred the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the same issues as those in the first one) and the instant petition for review thereof.

We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective certification of non-forum shopping, it was a dismissal without prejudice.27 The same holds true in the CA's dismissal of the said case due to defects in the formal requirement of verification28 and in the other requirement in Rule 46 of the Rules of Court on the statement of the material dates.29 The dismissal being without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the appropriate verification and certification—as they, in fact did—and stating therein the material dates, within the prescribed period30 in Section 4, Rule 65 of the said Rules.31

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the























parties free to litigate the matter in a subsequent action as though the dismissed action had not been commenced. In other words, the termination of a case not on the merits does not bar another action involving the same parties, on the same subject matter and theory.32

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if petitioners still indicated in the verification and certification of the second certiorari petition that the first had already been dismissed on procedural grounds,33

petitioners are no longer required by the Rules to indicate in their certification of non-forum shopping in the instant petition for review of the second certiorari petition, the status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum shopping about any event that will not constitute res judicata and litis pendentia, as in the present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils sought to be prevented by the said certificate are no longer present.34

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the instant petition. True, the Authorization35 dated September 4, 2000, which is attached to the second certiorari petition and which is also attached to the instant petition for review, is limited in scope—its wordings indicate that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition filed with the appellate court, and that authority cannot extend to the instant petition for review.36 In a plethora of cases, however, this Court has liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a subsequent fulfillment of the requirements have been made.37 Given that petitioners herein sufficiently explained their misgivings on this point and appended to their Reply38 an updated Authorization39 for Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient compliance with the Rules.

However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent August 17, 2001 Authorization were issued only by Nippon's president and chief executive officer, not by the company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by the board of directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority from the board.40

Considering that Hasegawa verified and certified the petition only on his behalf and not on behalf of the other petitioner, the petition has to be denied pursuant to

Loquias v. Office of the Ombudsman.41 Substantial compliance will not suffice in a matter that demands strict observance of the Rules.42 While technical rules of procedure are designed not to frustrate the ends of justice, nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court dockets.43

Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's denial of their motion to dismiss. It is a well-established rule that an order denying a motion to dismiss is interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as defenses the objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course.44 While there are recognized exceptions to this rule,45 petitioners' case does not fall among them.

This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and resolve the civil case for specific performance and damages filed by the respondent. The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the parties46 following the [state of the] most significant relationship rule in Private International Law.47

The Court notes that petitioners adopted an additional but different theory when they elevated the case to the appellate court. In the Motion to Dismiss48 filed with the trial court, petitioners never contended that the RTC is an inconvenient forum. They merely argued that the applicable law which will determine the validity or invalidity of respondent's claim is that of Japan, following the principles of lex loci celebrationis and lex contractus.49 While not abandoning this stance in their petition before the appellate court, petitioners on certiorari significantly invoked the defense of forum non conveniens.50 On petition for review before this Court, petitioners dropped their other arguments, maintained the forum non conveniens defense, and introduced their new argument that the applicable principle is the [state of the] most significant relationship rule.51

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as explained in Philippine Ports Authority v. City of Iloilo.52

We only pointed out petitioners' inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws principles.























To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to these phases are the following questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be enforced?53

Analytically, jurisdiction and choice of law are two distinct concepts.54 Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the "minimum contacts" for one do not always provide the necessary "significant contacts" for the other.55 The question of whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment.56

In this case, only the first phase is at issue—jurisdiction.1âwphi1 Jurisdiction, however, has various aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the subject of the litigation.57 In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes the court. It is given only by law and in the manner prescribed by law.58 It is further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.59 To succeed in its motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim,60 the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims.61

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City.62 What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci celebrationis and lex contractus, and the "state of the most significant relationship rule."

The Court finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the "law of the place of the ceremony"63 or the law of the place where a contract is made.64 The doctrine of lex contractus or lex loci contractus means the "law of the place where a contract is executed or to be performed."65 It controls the nature, construction, and validity of the contract66 and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly.67 Under the "state of the most significant relationship rule," to ascertain what state law to apply to a dispute, the court should determine which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties.68 This rule takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved.69

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second phase, the choice of law.70

They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem.71

Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules.72 Also, when the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence of such law must be pleaded and proved.73

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into account or apply the law of some other State or States.74 The court’s power to hear cases and controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding rights provided by foreign sovereigns.75

Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court of its


























jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a ground.77 Second, whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court.78 In this case, the RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this principle requires a factual determination; hence, this conflicts principle is more properly considered a matter of defense.79

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and appellate courts correctly denied the petitioners’ motion to dismiss.

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

JOHANNES VS. HARVEY


Manila

EN BANC

G.R. No. 18600 March 9, 1922

B. E. JOHANNES, husband of Carmen Theodora Johannes, deceased, as a administrator; CARLOS D'ALMEIDA and IDA JOHANNES, with her husband, J. E. JOHANNES, relators, vs.Honorable GEORGE R. HARVEY, as judge of First Instance of Manila, ALFREDO D'ALMEIDA, brother of Carmen Johannes, as administrator, and PHILIPPINE TRUST COMPANY, as late guardian for a certain cash deposit of Carmen Johannes, respondent.

Amzi B. Kelly for relators.Fisher & Dewitt and Francis B. Mahoney for respondents.

MALCOLM, J.:

The relevant facts disclosed by this petition for certiorari and the return thereto may be stated as follows:

Mrs. Carmen Theodora Johannes nee Carmen D'Almeida, died intestate in Singapore, Straits Settlements, on August 31, 1921. Of her immediate family there remained the husband, B. E. Johannes, the brothers, Frederick Charles D'Almeida and Alfred D'Almeida, and the sister, Ida D'Almeida Johannes. Of these, the husband, the brother Frederick, and the sister Ida, were residents of Singapore, while the brother Alfred was in Manila. The Singapore heirs apparently joined in asking that letters of administration be granted by the Supreme Court of the Straits Settlements to B. E. Johannes, the lawful husband of the deceased. At least, on September 19, 1921, the husband of the deceased. At least, on September 19, 1921, the husband was named the administrator of the property of the deceased wife, which was locally situate within the jurisdiction of the Supreme Court of the Straits Settlements. (Under the British law [22 & 23 Charles II c 10, 29 Charles II c 3, and James II c 17], it would seem that the husband is entitled to the whole of the estate of his wife if she die intestate to the exclusive of any other next of kin.) On October 1, 1921, the brother Alfred D' Almeida was, on his petition, appointed administrator of the Manila estate of the deceased consisting of





P109,732.55. This sum it appears, was on deposit in the Manila banks under and by virtue of guardianship proceedings for the late Carmen Theodora Johannes, which were finally terminated by the discharge of the guardian, the Philippine Trust Company, on January 16, 1922.

The burden of the relator's contention is that the Honorable George R. Harvey, as judge of First Instance of the City of Manila, has acted in excess of his jurisdiction in appointing Alfred D'Almeida administrator of the funds of the estate on deposit in the Philippines, and that an administration in the jurisdiction is unnecessary. Accordingly, relators pray the court to annul the appointment of Alfred D'Almeida and to issue an order directing the Judge of First Instance to have placed to the credit of B. E. Johannes as administrator of the estate of Carmen Theodora Johannes all of the funds of the late Carmen D'Almeida Johannes, now on deposit and subject to the order of the court, with P5,000 as damages. The respondents, Judge Harvey, and the administrator Alfred D'Almeida, in compliance with the order to show cause why the writ should not issue, contend that the respondent judge has not in any manner acted in excess of the jurisdiction duly conferred upon and exercised by him in the manner provided by law, and that an order appointing an administrator is a final and appealable order.

Certain general observations may possibly serve to clarify the situation.

It is often necessary to have more than one administration of an estate. When a person dies intestate owning property in the country of his domicile as well as in a foreign country, administration is had in both countries. That which is granted in the jurisdiction of decedent's last domicile is termed the principal administration, while any other administration is termed the ancillary administration. The reason for the latter is because a grant of administration does not ex proprio vigore have any effect beyond the limits of the country in which it is granted. Hence, an administrator appointed in a foreign state has no authority in the United States. The ancillary administration is proper, whenever a person dies, leaving in a country other than that of his las domicile, property to be administered in the nature of assets of the decedent, liable for his individual debts or to be distributed among his heirs. (23 C. J., 1010, et seq.; 24 C. J., 1109, et seq.; Wilkins vs. Ellett [1882], 108 U. S., 256; Perez vs. Aguerria [1901], 1 Porto Rico Fed., 443; Vaughn vs. Barret [1833], 5 Vt., 333.)

The principal administration in this instance is that at the domicile of the late Carmen Theodora Johannes in Singapore, Straits Settlements. What is sought in the Philippine Islands is an ancillary administration subsidiary to the domiciliary administration, conformable to the provisions of sections 601, 602, and 603 of the Code of

Civil Procedure. The proper course of procedure would be for the ancillary administrator to pay the claims of creditors, if there be any, settle the accounts, and remit the surplus to the domiciliary jurisdiction, for distribution among the next of kin. Such administration appears to be required in this jurisdiction since the provisions of section 596 of the Code of Civil Procedure, which permit of the settlement of certain estates without legal proceedings, have not been met. The decision of this court in Baldemor vs. Malangyaon ([1916]), 34 Phil., 368), on which relators rely, is then not in point because predicated directly on the provisions of the section last cited.

It is almost a universal rule to give the surviving spouse a preference when an administrator is to be appointed, unless for strong reasons it is deemed advisable to name someone else. This preference has particular force under Spanish law precedents. (4 Escriche, Diccionario de Legislacion y Jurisprudencia, 1085.) However, the Code of Civil Procedure, in section 642, while naming the surviving husband or wife, as the case may be, as one to whom administration can be granted, leaves this to the discretion of the court to determine, for it may be found that the surviving spouse is unsuitable for the responsibility. Moreover, nonresidence is a factor to be considered in determining the propriety of the appointment, and in this connection, it is to be noted that the husband of the deceased, the administrator of the principal administration, resides in Singapore. Undoubtedly, if the husband should come into this jurisdiction, the court would give consideration to this petition that he be named the ancillary administrator for local purposes. Ancillary letters should ordinarily be granted to the domicilliary representative, if he applies therefor, or to his nominee, or attorney; but in the absence of express statutory requirement the court may in its discretion appoint some other person. (24 C. J., 1114.)

There is still another aspect to the case. This is that pursuant to section 783 of the Code of Civil Procedure, an order of a Court of First Instance appointing an administration of the estate of a deceased person constitutes a final determination of the rights of the parties thereunder, within the meaning of the statute, and is appealable. (Sy Hong Eng vs. Sy Lioc Suy [1907], 8 Phil., 594.)

As we reach the conclusion that the Court of First Instance has not acted in excess of its jurisdiction, and as there in an appeal, certiorari will not lie. Accordingly, the writ prayed for cannot be granted. Costs against the relators. So ordered.

Araullo, C.J., Street, Avanceña, Villamor, Ostrand, Johns and Romualdez, JJ., concur.


REPUBLIC VS. CIPRIANO ORBECIDO IIIGR. No. 154380, 5 October 2005

FACTS:

Given a valid marriage between two Filipino citizens, where one party is later naturalized as a foreign citizen and obtains a valid divorce decree capacitating him or her to remarry, can the Filipino spouse likewise remarry under Philippine law?

On 24 May 1981, Cipriano Orbecido III married Lady Myros M. Villanueva and their marriage was blessed with a son and a daughter, Kristoffer Simbortriz V. Orbecido and Lady Kimberly V. Orbecido.

In 1986, his wife left for the United States bringing along their son Kristoffer. A few years later, Cipriano discovered that his wife had been naturalized as an American citizen and sometime in 2000, learned from his son that his wife had obtained a divorce decree. His wife then married Innocent Stanley and is now currently living in San Gabriel, California with her child by him.

Cipriano thereafter filed with the trial court a petition for authority to remarry invoking Paragraph 2 of Article 26 of the Family Code (FC). No opposition was filed. Finding merit in the petition, the court granted the same. The Republic, herein petitioner, through the Office of the Solicitor General (OSG), sought reconsideration but it was denied. Hence, this petition.

ISSUE:

Whether or not respondent can remarry under Art. 26 of the Family Code

HELD: The petition is granted.

The OSG contends that par. 2 Art. 26 of FC is not applicable to the instant case because it only applies to a valid mixed marriage; that is, a marriage celebrated between a Filipino citizen and an alien. Furthermore, the OSG argues there is no law that governs the respondent’s situation. The OSG posits that this is a matter of legislation and not of judicial determination.

The respondent admits that Art. 26 is not directly applicable to his case, but insists that since his


naturalized alien wife obtained a divorce decree which capacitated her to remarry, he is likewise capacitated by operation of law pursuant to Section 12, Article II of the Constitution.

The Court noted that the petition for authority to remarry filed before the trial court actually constituted a petition for declaratory relief. The requisites of a petition for declaratory relief are: (1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) that the party seeking the relief has a legal interest in the controversy; and (4) that the issue is ripe for judicial determination. This case satisfies all the requisites for the grant of a petition for declaratory relief.

Article 26 does not appear to govern the situation presented by the case at hand. It seems to apply only to cases where at the time of the celebration of the marriage, the parties are a Filipino citizen and a foreigner. The instant case is one where at the time the marriage was solemnized, the parties were two Filipino citizens, but later on, the wife was naturalized as an American citizen and subsequently obtained a divorce granting her capacity to remarry, and indeed she remarried an American citizen while residing in the USA

RECENT JURISPRUDENCE – CIVIL LAW

Records of the proceedings of the FC deliberations showed that the intent of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse.

Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo, Jr., which involved a marriage between a Filipino citizen and a foreigner where the Court held that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and consequently, the Filipino spouse is capacitated to remarry under Philippine law.

In the 1998 case of Quita v. Court of Appeals, the parties were Filipino citizens when they got married. The wife became a naturalized American citizen in 1954 and obtained a divorce in the same year. The Court therein hinted, by way of obiter dictum, that a Filipino divorced by his naturalized foreign spouse is no longer married under Philippine law and can thus remarry.

Thus, taking into consideration the legislative intent and applying the rule of reason, the Court holds that Paragraph 2 of Article 26 should be interpreted to include cases involving parties who, at the time of the celebration of the marriage were Filipino citizens, but later on, one of

them became naturalized as a foreign citizen and obtained a divorce decree. The Filipino spouse should likewise be allowed to remarry as if the other party were a foreigner at the time of the solemnization of the marriage. To rule otherwise would be to sanction absurdity and injustice.

In view of the foregoing, the twin elements for the application of Paragraph 2 of Article 26 are as follows: (1) There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and (2) A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry. The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.

In this case, when Cipriano’s wife was naturalized as an American citizen, there was still a valid marriage that had been celebrated between her and Cipriano. Then the naturalized alien wife subsequently obtained a valid divorce capacitating her to remarry. Clearly, the twin requisites for the application of Paragraph 2 of Article 26 are both satisfied. Thus Cipriano, the “divorced” Filipino spouse, should be allowed to remarry.

However, the Court notes that the records are bereft of competent evidence duly submitted by respondent concerning the divorce decree and the naturalization of respondent’s wife. It is settled rule that one who alleges a fact has the burden of proving it and mere allegation is not evidence. For his plea to prosper, the respondent must prove his allegation that his wife was naturalized as an American citizen, must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it, and that such foreign law must also be proved as our courts cannot take judicial notice of foreign laws. Furthermore, the respondent must also show that the divorce decree allows his former wife to remarry as specifically required in Article 26. Otherwise, there would be no evidence sufficient to declare that he is capacitated to enter into another marriage.

Nevertheless, the Court is unanimous in holding that Paragraph 2 of Article 26 of the FC should be interpreted to allow a Filipino citizen, who has been divorced by a spouse who had

RECENT JURISPRUDENCE – CIVIL LAW

acquired foreign citizenship and remarried, also to remarry. However, due to lack of sufficient evidence submitted and on record, the Court is unable to declare, based on the respondent’s bare allegations that his wife, who was naturalized as an American citizen, had obtained a divorce decree and had remarried an American, that the respondent is now capacitated to remarry. Such declaration could only be made properly upon the


respondent’s submission of the aforecited evidence in his favor.


FIRST DIVISION

G.R. No. 154380 October 5, 2005

REPUBLIC OF THE PHILIPPINES, Petitioner, vs.CIPRIANO ORBECIDO III, Respondent.

D E C I S I O N

QUISUMBING, J.:

Given a valid marriage between two Filipino citizens, where one party is later naturalized as a foreign citizen and obtains a valid divorce decree capacitating him or her to remarry, can the Filipino spouse likewise remarry under Philippine law?

Before us is a case of first impression that behooves the Court to make a definite ruling on this apparently novel question, presented as a pure question of law.

In this petition for review, the Solicitor General assails the Decision1 dated May 15, 2002, of the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23 and its Resolution2 dated July 4, 2002 denying the motion for reconsideration. The court a quo had declared that herein respondent Cipriano Orbecido III is capacitated to remarry. The fallo of the impugned Decision reads:

WHEREFORE, by virtue of the provision of the second paragraph of Art. 26 of the Family Code and by reason of the divorce decree obtained against him by his American wife, the petitioner is given the capacity to remarry under the Philippine Law.

IT IS SO ORDERED.3

The factual antecedents, as narrated by the trial court, are as follows.

On May 24, 1981, Cipriano Orbecido III married Lady Myros M. Villanueva at the United Church of Christ in the Philippines in Lam-an, Ozamis City. Their marriage was blessed with a son and a daughter, Kristoffer Simbortriz V. Orbecido and Lady Kimberly V. Orbecido.


http://www.lawphil.net/judjuris/juri2005/oct2005/gr_154380_2005.html#fnt3



In 1986, Cipriano’s wife left for the United States bringing along their son Kristoffer. A few years later, Cipriano discovered that his wife had been naturalized as an American citizen.

Sometime in 2000, Cipriano learned from his son that his wife had obtained a divorce decree and then married a certain Innocent Stanley. She, Stanley and her child by him currently live at 5566 A. Walnut Grove Avenue, San Gabriel, California.

Cipriano thereafter filed with the trial court a petition for authority to remarry invoking Paragraph 2 of Article 26 of the Family Code. No opposition was filed. Finding merit in the petition, the court granted the same. The Republic, herein petitioner, through the Office of the Solicitor General (OSG), sought reconsideration but it was denied.

In this petition, the OSG raises a pure question of law:

WHETHER OR NOT RESPONDENT CAN REMARRY UNDER ARTICLE 26 OF THE FAMILY CODE4

The OSG contends that Paragraph 2 of Article 26 of the Family Code is not applicable to the instant case because it only applies to a valid mixed marriage; that is, a marriage celebrated between a Filipino citizen and an alien. The proper remedy, according to the OSG, is to file a petition for annulment or for legal separation.5

Furthermore, the OSG argues there is no law that governs respondent’s situation. The OSG posits that this is a matter of legislation and not of judicial determination.6

For his part, respondent admits that Article 26 is not directly applicable to his case but insists that when his naturalized alien wife obtained a divorce decree which capacitated her to remarry, he is likewise capacitated by operation of law pursuant to Section 12, Article II of the Constitution.7

At the outset, we note that the petition for authority to remarry filed before the trial court actually constituted a petition for declaratory relief. In this connection, Section 1, Rule 63 of the Rules of Court provides:

RULE 63

DECLARATORY RELIEF AND SIMILAR REMEDIES

Section 1. Who may file petition—Any person interested under a deed, will, contract or other written instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder.

. . .

The requisites of a petition for declaratory relief are: (1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) that the party seeking the relief has a legal interest in the controversy; and (4) that the issue is ripe for judicial determination.8

This case concerns the applicability of Paragraph 2 of Article 26 to a marriage between two Filipino citizens where one later acquired alien citizenship, obtained a divorce decree, and remarried while in the U.S.A. The interests of the parties are also adverse, as petitioner representing the State asserts its duty to protect the institution of marriage while respondent, a private citizen, insists on a declaration of his capacity to remarry. Respondent, praying for relief, has legal interest in the controversy. The issue raised is also ripe for judicial determination inasmuch as when respondent remarries, litigation ensues and puts into question the validity of his second marriage.

Coming now to the substantive issue, does Paragraph 2 of Article 26 of the Family Code apply to the case of respondent? Necessarily, we must dwell on how this provision had come about in the first place, and what was the intent of the legislators in its enactment?

Brief Historical Background

On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise known as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:

All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35, 37, and 38.

On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was added to Article 26. As so amended, it now provides:

ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have







capacity to remarry under Philippine law. (Emphasis supplied)

On its face, the foregoing provision does not appear to govern the situation presented by the case at hand. It seems to apply only to cases where at the time of the celebration of the marriage, the parties are a Filipino citizen and a foreigner. The instant case is one where at the time the marriage was solemnized, the parties were two Filipino citizens, but later on, the wife was naturalized as an American citizen and subsequently obtained a divorce granting her capacity to remarry, and indeed she remarried an American citizen while residing in the U.S.A.

Noteworthy, in the Report of the Public Hearings9 on the Family Code, the Catholic Bishops’ Conference of the Philippines (CBCP) registered the following objections to Paragraph 2 of Article 26:

1. The rule is discriminatory. It discriminates against those whose spouses are Filipinos who divorce them abroad. These spouses who are divorced will not be able to re-marry, while the spouses of foreigners who validly divorce them abroad can.

2. This is the beginning of the recognition of the validity of divorce even for Filipino citizens. For those whose foreign spouses validly divorce them abroad will also be considered to be validly divorced here and can re-marry. We propose that this be deleted and made into law only after more widespread consultation. (Emphasis supplied.)

Legislative Intent

Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse.

Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo, Jr.10 The Van Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and consequently, the Filipino spouse is capacitated to remarry under Philippine law.

Does the same principle apply to a case where at the time of the celebration of the marriage, the parties were Filipino citizens, but later on, one of them obtains a foreign citizenship by naturalization?

The jurisprudential answer lies latent in the 1998 case of Quita v. Court of Appeals.11 In Quita, the parties were, as in this case, Filipino citizens when they got married. The

wife became a naturalized American citizen in 1954 and obtained a divorce in the same year. The Court therein hinted, by way of obiter dictum, that a Filipino divorced by his naturalized foreign spouse is no longer married under Philippine law and can thus remarry.

Thus, taking into consideration the legislative intent and applying the rule of reason, we hold that Paragraph 2 of Article 26 should be interpreted to include cases involving parties who, at the time of the celebration of the marriage were Filipino citizens, but later on, one of them becomes naturalized as a foreign citizen and obtains a divorce decree. The Filipino spouse should likewise be allowed to remarry as if the other party were a foreigner at the time of the solemnization of the marriage. To rule otherwise would be to sanction absurdity and injustice. Where the interpretation of a statute according to its exact and literal import would lead to mischievous results or contravene the clear purpose of the legislature, it should be construed according to its spirit and reason, disregarding as far as necessary the letter of the law. A statute may therefore be extended to cases not within the literal meaning of its terms, so long as they come within its spirit or intent.12

If we are to give meaning to the legislative intent to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce is no longer married to the Filipino spouse, then the instant case must be deemed as coming within the contemplation of Paragraph 2 of Article 26.

In view of the foregoing, we state the twin elements for the application of Paragraph 2 of Article 26 as follows:

1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and

2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.

The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.

In this case, when Cipriano’s wife was naturalized as an American citizen, there was still a valid marriage that has been celebrated between her and Cipriano. As fate would have it, the naturalized alien wife subsequently obtained a valid divorce capacitating her to remarry. Clearly, the twin requisites for the application of Paragraph 2 of Article 26 are both present in this case. Thus Cipriano, the "divorced" Filipino spouse, should be allowed to remarry.

We are also unable to sustain the OSG’s theory that the proper remedy of the Filipino spouse is to file either a






petition for annulment or a petition for legal separation. Annulment would be a long and tedious process, and in this particular case, not even feasible, considering that the marriage of the parties appears to have all the badges of validity. On the other hand, legal separation would not be a sufficient remedy for it would not sever the marriage tie; hence, the legally separated Filipino spouse would still remain married to the naturalized alien spouse.

However, we note that the records are bereft of competent evidence duly submitted by respondent concerning the divorce decree and the naturalization of respondent’s wife. It is settled rule that one who alleges a fact has the burden of proving it and mere allegation is not evidence.13

Accordingly, for his plea to prosper, respondent herein must prove his allegation that his wife was naturalized as an American citizen. Likewise, before a foreign divorce decree can be recognized by our own courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it.14 Such foreign law must also be proved as our courts cannot take judicial notice of foreign laws. Like any other fact, such laws must be alleged and proved.15

Furthermore, respondent must also show that the divorce decree allows his former wife to remarry as specifically required in Article 26. Otherwise, there would be no evidence sufficient to declare that he is capacitated to enter into another marriage.

Nevertheless, we are unanimous in our holding that Paragraph 2 of Article 26 of the Family Code (E.O. No. 209, as amended by E.O. No. 227), should be interpreted to allow a Filipino citizen, who has been divorced by a spouse who had acquired foreign citizenship and remarried, also to remarry. However, considering that in the present petition there is no sufficient evidence submitted and on record, we are unable to declare, based on respondent’s bare allegations that his wife, who was naturalized as an American citizen, had obtained a divorce decree and had remarried an American, that respondent is now capacitated to remarry. Such declaration could only be made properly upon respondent’s submission of the aforecited evidence in his favor.

ACCORDINGLY, the petition by the Republic of the Philippines is GRANTED. The assailed Decision dated May 15, 2002, and Resolution dated July 4, 2002, of the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23, are hereby SET ASIDE.

No pronouncement as to costs.

SO ORDERED.

SAN LUIS VS. SAN LUISG.R. No. 133743 February 6, 2007

FACTS:

During his lifetime, Felicisimo San Luis (Rodolfo San Luis’s dad) contracted three marriages. His first marriage was with Virginia Sulit on March 17, 1942 out of which were born six children. On August 11, 1963, Virginia predeceased Felicisimo.

Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias. However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce before the Family Court of the First Circuit, State of Hawaii, which issued a Decree Granting Absolute Divorce and Awarding Child Custody on December 14, 1973. On June 20, 1974, Felicisimo married Felicidad San Luis, then surnamed Sagalongos. He had no children with Felicidad but lived with her for 18 years from the time of their marriage up to his death on December 18, 1992. Upon death of his dad, Rodolfo sought the dissolution of their Felicisimo’s conjugal partnership assets and the settlement of Felicisimo’s estate. On December 17, 1993, Felicidad filed a petition for letters of administration before the Regional Trial Court of Makati City. Rodolfo claimed that Felicidad has no legal personality to file the petition because she was only a mistress of Felicisimo since the latter, at the time of his death, was still legally married to Merry Lee. Felicidad presented the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that the marriage of Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the legal capacity to marry her by virtue of paragraph 2 Article 26 of the Family Code.

Rodolfo asserted that paragraph 2, Article 26 of the Family Code cannot be given retroactive effect to validate Felicidad’s bigamous marriage with Felicisimo because this would impair vested rights in derogation of Article 256.

ISSUE:

Whether or not Felicidad may file for letters of administration over Felicisimo’s estate.

HELD:

The divorce decree allegedly obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to file the





present petition as Felicisimo’s surviving spouse. However, the records show that there is insufficient evidence to prove the validity of the divorce obtained by Merry Lee as well as the marriage of Felicidad and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, the Court laid down the specific guidelines for pleading and proving foreign law and divorce judgments. It held that presentation solely of the divorce decree is insufficient and that proof of its authenticity and due execution must be presented. Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office.

With regard to Felicidad’s marriage to Felicisimo allegedly solemnized in California, U.S.A., she submitted photocopies of the Marriage Certificate and the annotated text of the Family Law Act of California which purportedly show that their marriage was done in accordance with the said law. As stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and proved.

The case should be remanded to the trial court for further reception of evidence on the divorce decree obtained by Merry Lee and the marriage of respondent and Felicisimo.


Manila

THIRD DIVISION

G.R. No. 133743 February 6, 2007

EDGAR SAN LUIS, Petitioner, vs.FELICIDAD SAN LUIS, Respondent.

x ---------------------------------------------------- x

G.R. No. 134029 February 6, 2007

RODOLFO SAN LUIS, Petitioner, vs.FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.

D E C I S I O N

YNARES-SANTIAGO, J.:

Before us are consolidated petitions for review assailing the February 4, 1998 Decision 1 of the Court of Appeals in CA-G.R. CV No. 52647, which reversed and set aside the September 12, 1995 2 and January 31, 1996 3 Resolutions of the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its May 15, 1998 Resolution 4

denying petitioners’ motion for reconsideration.

The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who was the former governor of the Province of Laguna. During his lifetime, Felicisimo contracted three marriages. His first marriage was with Virginia Sulit on March 17, 1942 out of which were born six children, namely: Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo.

Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias. However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce 5 before the Family Court of the First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a Decree Granting Absolute Divorce and Awarding Child Custody on December 14, 1973. 6

On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos, before








Rev. Fr. William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los Angeles, California, U.S.A. 7 He had no children with respondent but lived with her for 18 years from the time of their marriage up to his death on December 18, 1992.

Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of Felicisimo’s estate. On December 17, 1993, she filed a petition for letters of administration 8 before the Regional Trial Court of Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch 146 thereof.

Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the decedent was residing at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila; that the decedent’s surviving heirs are respondent as legal spouse, his six children by his first marriage, and son by his second marriage; that the decedent left real properties, both conjugal and exclusive, valued at P30,304,178.00 more or less; that the decedent does not have any unpaid debts. Respondent prayed that the conjugal partnership assets be liquidated and that letters of administration be issued to her.

On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first marriage, filed a motion to dismiss 9 on the grounds of improper venue and failure to state a cause of action. Rodolfo claimed that the petition for letters of administration should have been filed in the Province of Laguna because this was Felicisimo’s place of residence prior to his death. He further claimed that respondent has no legal personality to file the petition because she was only a mistress of Felicisimo since the latter, at the time of his death, was still legally married to Merry Lee.

On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo in seeking the dismissal 10

of the petition. On February 28, 1994, the trial court issued an Order 11 denying the two motions to dismiss.

Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her opposition 12

thereto. She submitted documentary evidence showing that while Felicisimo exercised the powers of his public office in Laguna, he regularly went home to their house in New Alabang Village, Alabang, Metro Manila which they bought sometime in 1982. Further, she presented the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that the marriage of Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the legal capacity to marry her by virtue of paragraph 2, 13 Article 26 of the Family Code and the doctrine laid down in Van Dorn v. Romillo, Jr. 14

Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed motions for reconsideration from the Order denying their motions to dismiss. 15 They asserted that paragraph 2, Article 26 of the Family Code cannot be given retroactive effect to validate respondent’s bigamous marriage with Felicisimo because this would impair vested rights in derogation of Article 256 16 of the Family Code.

On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a motion to disqualify Acting Presiding Judge Anthony E. Santos from hearing the case.

On October 24, 1994, the trial court issued an Order 17

denying the motions for reconsideration. It ruled that respondent, as widow of the decedent, possessed the legal standing to file the petition and that venue was properly laid. Meanwhile, the motion for disqualification was deemed moot and academic 18 because then Acting Presiding Judge Santos was substituted by Judge Salvador S. Tensuan pending the resolution of said motion.

Mila filed a motion for inhibition 19 against Judge Tensuan on November 16, 1994. On even date, Edgar also filed a motion for reconsideration 20 from the Order denying their motion for reconsideration arguing that it does not state the facts and law on which it was based.

On November 25, 1994, Judge Tensuan issued an Order 21

granting the motion for inhibition. The case was re-raffled to Branch 134 presided by Judge Paul T. Arcangel.

On April 24, 1995, 22 the trial court required the parties to submit their respective position papers on the twin issues of venue and legal capacity of respondent to file the petition. On May 5, 1995, Edgar manifested 23 that he is adopting the arguments and evidence set forth in his previous motion for reconsideration as his position paper. Respondent and Rodolfo filed their position papers on June 14, 24 and June 20, 25 1995, respectively.

On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that, at the time of his death, Felicisimo was the duly elected governor and a resident of the Province of Laguna. Hence, the petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that respondent was without legal capacity to file the petition for letters of administration because her marriage with Felicisimo was bigamous, thus, void ab initio. It found that the decree of absolute divorce dissolving Felicisimo’s marriage to Merry Lee was not valid in the Philippines and did not bind Felicisimo who was a Filipino citizen. It also ruled that paragraph 2, Article 26 of the Family Code cannot be retroactively applied because it would impair the vested rights of Felicisimo’s legitimate children.





















Respondent moved for reconsideration 26 and for the disqualification 27 of Judge Arcangel but said motions were denied. 28

Respondent appealed to the Court of Appeals which reversed and set aside the orders of the trial court in its assailed Decision dated February 4, 1998, the dispositive portion of which states:

WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby REVERSED and SET ASIDE; the Orders dated February 28 and October 24, 1994 are REINSTATED; and the records of the case is REMANDED to the trial court for further proceedings. 29

The appellante court ruled that under Section 1, Rule 73 of the Rules of Court, the term "place of residence" of the decedent, for purposes of fixing the venue of the settlement of his estate, refers to the personal, actual or physical habitation, or actual residence or place of abode of a person as distinguished from legal residence or domicile. It noted that although Felicisimo discharged his functions as governor in Laguna, he actually resided in Alabang, Muntinlupa. Thus, the petition for letters of administration was properly filed in Makati City.

The Court of Appeals also held that Felicisimo had legal capacity to marry respondent by virtue of paragraph 2, Article 26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. Ibay-Somera. 31 It found that the marriage between Felicisimo and Merry Lee was validly dissolved by virtue of the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii. As a result, under paragraph 2, Article 26, Felicisimo was capacitated to contract a subsequent marriage with respondent. Thus –

With the well-known rule – express mandate of paragraph 2, Article 26, of the Family Code of the Philippines, the doctrines in Van Dorn, Pilapil, and the reason and philosophy behind the enactment of E.O. No. 227, — there is no justiciable reason to sustain the individual view — sweeping statement — of Judge Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the basic policy of our state against divorce in any form whatsoever." Indeed, courts cannot deny what the law grants. All that the courts should do is to give force and effect to the express mandate of the law. The foreign divorce having been obtained by the Foreigner on December 14, 1992, 32 the Filipino divorcee, "shall x x x have capacity to remarry under Philippine laws". For this reason, the marriage between the deceased and petitioner should not be denominated as "a bigamous marriage.

Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse can institute the judicial proceeding for the settlement of the estate of the deceased. x x x 33

Edgar, Linda, and Rodolfo filed separate motions for reconsideration 34 which were denied by the Court of Appeals.

On July 2, 1998, Edgar appealed to this Court via the instant petition for review on certiorari. 35 Rodolfo later filed a manifestation and motion to adopt the said petition which was granted. 36

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the subject petition for letters of administration was improperly laid because at the time of his death, Felicisimo was a resident of Sta. Cruz, Laguna. They contend that pursuant to our rulings in Nuval v. Guray 37 and Romualdez v. RTC, Br. 7, Tacloban City, 38

"residence" is synonymous with "domicile" which denotes a fixed permanent residence to which when absent, one intends to return. They claim that a person can only have one domicile at any given time. Since Felicisimo never changed his domicile, the petition for letters of administration should have been filed in Sta. Cruz, Laguna.

Petitioners also contend that respondent’s marriage to Felicisimo was void and bigamous because it was performed during the subsistence of the latter’s marriage to Merry Lee. They argue that paragraph 2, Article 26 cannot be retroactively applied because it would impair vested rights and ratify the void bigamous marriage. As such, respondent cannot be considered the surviving wife of Felicisimo; hence, she has no legal capacity to file the petition for letters of administration.

The issues for resolution: (1) whether venue was properly laid, and (2) whether respondent has legal capacity to file the subject petition for letters of administration.

The petition lacks merit.

Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of administration of the estate of Felicisimo should be filed in the Regional Trial Court of the province "in which he resides at the time of his death." In the case of Garcia Fule v. Court of Appeals, 40

we laid down the doctrinal rule for determining the residence – as contradistinguished from domicile – of the decedent for purposes of fixing the venue of the settlement of his estate:

[T]he term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the application of venue statutes and rules – Section 1, Rule 73 of the Revised Rules of Court is of such nature – residence rather than domicile is the significant factor. Even where the statute uses the

















word "domicile" still it is construed as meaning residence and not domicile in the technical sense. Some cases make a distinction between the terms "residence" and "domicile" but as generally used in statutes fixing venue, the terms are synonymous, and convey the same meaning as the term "inhabitant." In other words, "resides" should be viewed or understood in its popular sense, meaning, the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one’s domicile. No particular length of time of residence is required though; however, the residence must be more than temporary. 41 (Emphasis supplied)

It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of the settlement of the estate of Felicisimo, is synonymous with "domicile." The rulings in Nuval and Romualdez are inapplicable to the instant case because they involve election cases. Needless to say, there is a distinction between "residence" for purposes of election laws and "residence" for purposes of fixing the venue of actions. In election cases, "residence" and "domicile" are treated as synonymous terms, that is, the fixed permanent residence to which when absent, one has the intention of returning. 42 However, for purposes of fixing venue under the Rules of Court, the "residence" of a person is his personal, actual or physical habitation, or actual residence or place of abode, which may not necessarily be his legal residence or domicile provided he resides therein with continuity and consistency. 43 Hence, it is possible that a person may have his residence in one place and domicile in another.

In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, Laguna, respondent proved that he also maintained a residence in Alabang, Muntinlupa from 1982 up to the time of his death. Respondent submitted in evidence the Deed of Absolute Sale 44 dated January 5, 1983 showing that the deceased purchased the aforesaid property. She also presented billing statements 45 from the Philippine Heart Center and Chinese General Hospital for the period August to December 1992 indicating the address of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa." Respondent also presented proof of membership of the deceased in the Ayala Alabang Village Association 46 and Ayala Country Club, Inc., 47 letter-envelopes 48 from 1988 to 1990 sent by the deceased’s children to him at his Alabang address, and the deceased’s calling cards 49

stating that his home/city address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna."

From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing the venue of the settlement of his estate. Consequently, the subject petition for letters of administration was validly filed in the Regional Trial Court 50 which has territorial jurisdiction over Alabang, Muntinlupa. The subject petition was filed on December 17, 1993. At that time, Muntinlupa was still a municipality and the branches of the Regional Trial Court of the National Capital Judicial Region which had territorial jurisdiction over Muntinlupa were then seated in Makati City as per Supreme Court Administrative Order No. 3. 51 Thus, the subject petition was validly filed before the Regional Trial Court of Makati City.

Anent the issue of respondent Felicidad’s legal personality to file the petition for letters of administration, we must first resolve the issue of whether a Filipino who is divorced by his alien spouse abroad may validly remarry under the Civil Code, considering that Felicidad’s marriage to Felicisimo was solemnized on June 20, 1974, or before the Family Code took effect on August 3, 1988. In resolving this issue, we need not retroactively apply the provisions of the Family Code, particularly Art. 26, par. (2) considering that there is sufficient jurisprudential basis allowing us to rule in the affirmative.

The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a foreigner and his Filipino wife, which marriage was subsequently dissolved through a divorce obtained abroad by the latter. Claiming that the divorce was not valid under Philippine law, the alien spouse alleged that his interest in the properties from their conjugal partnership should be protected. The Court, however, recognized the validity of the divorce and held that the alien spouse had no interest in the properties acquired by the Filipino wife after the divorce. Thus:

In this case, the divorce in Nevada released private respondent from the marriage from the standards of American law, under which divorce dissolves the marriage. As stated by the Federal Supreme Court of the United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:

"The purpose and effect of a decree of divorce from the bond of matrimony by a competent jurisdiction are to change the existing status or domestic relation of husband and wife, and to free them both from the bond. The marriage tie, when thus severed as to one party, ceases to bind either. A husband without a wife, or a wife without a husband, is unknown to the law. When the law provides, in the nature of a penalty, that the guilty party shall not marry again, that party, as well as the other, is still absolutely freed from the bond of the former marriage."

Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would have no standing to sue in the case below as petitioner’s husband entitled to exercise control over conjugal assets. As he is














bound by the Decision of his own country’s Court, which validly exercised jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own representation before said Court from asserting his right over the alleged conjugal property. 53

As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be considered married to the alien spouse. Further, she should not be required to perform her marital duties and obligations. It held:

To maintain, as private respondent does, that, under our laws, petitioner has to be considered still married to private respondent and still subject to a wife's obligations under Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not be obliged to live together with, observe respect and fidelity, and render support to private respondent. The latter should not continue to be one of her heirs with possible rights to conjugal property. She should not be discriminated against in her own country if the ends of justice are to be served. 54 (Emphasis added)

This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the Court recognized the validity of a divorce obtained abroad. In the said case, it was held that the alien spouse is not a proper party in filing the adultery suit against his Filipino wife. The Court stated that "the severance of the marital bond had the effect of dissociating the former spouses from each other, hence the actuations of one would not affect or cast obloquy on the other." 56

Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino is divorced by his naturalized foreign spouse, the ruling in Van Dorn applies. 58 Although decided on December 22, 1998, the divorce in the said case was obtained in 1954 when the Civil Code provisions were still in effect.

The significance of the Van Dorn case to the development of limited recognition of divorce in the Philippines cannot be denied. The ruling has long been interpreted as severing marital ties between parties in a mixed marriage and capacitating the Filipino spouse to remarry as a necessary consequence of upholding the validity of a divorce obtained abroad by the alien spouse. In his treatise, Dr. Arturo M. Tolentino cited Van Dorn stating that "if the foreigner obtains a valid foreign divorce, the Filipino spouse shall have capacity to remarry under Philippine law." 59 In Garcia v. Recio, 60 the Court likewise cited the aforementioned case in relation to Article 26. 61

In the recent case of Republic v. Orbecido III, 62 the historical background and legislative intent behind paragraph 2, Article 26 of the Family Code were discussed, to wit:

Brief Historical Background

On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise known as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:

All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35, 37, and 38.

On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was added to Article 26. As so amended, it now provides:

ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law. (Emphasis supplied)

x x x xLegislative Intent

Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse.

Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo, Jr. The Van Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and consequently, the Filipino spouse is capacitated to remarry under Philippine law. 63 (Emphasis added)

As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is validly obtained abroad by the alien spouse. With the enactment of the Family Code and paragraph 2, Article 26 thereof, our lawmakers codified the law already established through judicial precedent.1awphi1.net













Indeed, when the object of a marriage is defeated by rendering its continuance intolerable to one of the parties and productive of no possible good to the community, relief in some way should be obtainable. 64 Marriage, being a mutual and shared commitment between two parties, cannot possibly be productive of any good to the society where one is considered released from the marital bond while the other remains bound to it. Such is the state of affairs where the alien spouse obtains a valid divorce abroad against the Filipino spouse, as in this case.

Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the divorce is void under Philippine law insofar as Filipinos are concerned. However, in light of this Court’s rulings in the cases discussed above, the Filipino spouse should not be discriminated against in his own country if the ends of justice are to be served. 67 In Alonzo v. Intermediate Appellate Court, 68 the Court stated:

But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render justice.

Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not bound, because only of our nature and functions, to apply them just the same, in slavish obedience to their language. What we do instead is find a balance between the word and the will, that justice may be done even as the law is obeyed.

As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where these words import a policy that goes beyond them."

x x x x

More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render every one his due." That wish continues to motivate this Court when it assesses the facts and the law in every case brought to it for decision. Justice is always an essential ingredient of

its decisions. Thus when the facts warrants, we interpret the law in a way that will render justice, presuming that it was the intention of the lawmaker, to begin with, that the law be dispensed with justice. 69

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to file the present petition as Felicisimo’s surviving spouse. However, the records show that there is insufficient evidence to prove the validity of the divorce obtained by Merry Lee as well as the marriage of respondent and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, 70 the Court laid down the specific guidelines for pleading and proving foreign law and divorce judgments. It held that presentation solely of the divorce decree is insufficient and that proof of its authenticity and due execution must be presented. Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office. 71

With regard to respondent’s marriage to Felicisimo allegedly solemnized in California, U.S.A., she submitted photocopies of the Marriage Certificate and the annotated text 72 of the Family Law Act of California which purportedly show that their marriage was done in accordance with the said law. As stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and proved. 73

Therefore, this case should be remanded to the trial court for further reception of evidence on the divorce decree obtained by Merry Lee and the marriage of respondent and Felicisimo.

Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find that the latter has the legal personality to file the subject petition for letters of administration, as she may be considered the co-owner of Felicisimo as regards the properties that were acquired through their joint efforts during their cohabitation.

Section 6, 74 Rule 78 of the Rules of Court states that letters of administration may be granted to the surviving spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part:

SEC. 2. Contents of petition for letters of administration. – A petition for letters of administration must be filed by an













interested person and must show, as far as known to the petitioner: x x x.

An "interested person" has been defined as one who would be benefited by the estate, such as an heir, or one who has a claim against the estate, such as a creditor. The interest must be material and direct, and not merely indirect or contingent. 75

In the instant case, respondent would qualify as an interested person who has a direct interest in the estate of Felicisimo by virtue of their cohabitation, the existence of which was not denied by petitioners. If she proves the validity of the divorce and Felicisimo’s capacity to remarry, but fails to prove that her marriage with him was validly performed under the laws of the U.S.A., then she may be considered as a co-owner under Article 144 76

of the Civil Code. This provision governs the property relations between parties who live together as husband and wife without the benefit of marriage, or their marriage is void from the beginning. It provides that the property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on co-ownership. In a co-ownership, it is not necessary that the property be acquired through their joint labor, efforts and industry. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. Hence, the portions belonging to the co-owners shall be presumed equal, unless the contrary is proven. 77

Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the applicable provision would be Article 148 of the Family Code which has filled the hiatus in Article 144 of the Civil Code by expressly regulating the property relations of couples living together as husband and wife but are incapacitated to marry. 78 In Saguid v. Court of Appeals, 79 we held that even if the cohabitation or the acquisition of property occurred before the Family Code took effect, Article 148 governs. 80 The Court described the property regime under this provision as follows:

The regime of limited co-ownership of property governing the union of parties who are not legally capacitated to marry each other, but who nonetheless live together as husband and wife, applies to properties acquired during said cohabitation in proportion to their respective contributions. Co-ownership will only be up to the extent of the proven actual contribution of money, property or industry. Absent proof of the extent thereof, their contributions and corresponding shares shall be presumed to be equal.

x x x x

In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of properties acquired by the parties to a bigamous

marriage and an adulterous relationship, respectively, we ruled that proof of actual contribution in the acquisition of the property is essential. x x x

As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be had on the strength of the party’s own evidence and not upon the weakness of the opponent’s defense. x x x 81

In view of the foregoing, we find that respondent’s legal capacity to file the subject petition for letters of administration may arise from her status as the surviving wife of Felicisimo or as his co-owner under Article 144 of the Civil Code or Article 148 of the Family Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating and affirming the February 28, 1994 Order of the Regional Trial Court which denied petitioners’ motion to dismiss and its October 24, 1994 Order which dismissed petitioners’ motion for reconsideration is AFFIRMED. Let this case be REMANDED to the trial court for further proceedings.

SO ORDERED.









PHIL SEA INV. VS. CAJune 19, 1992


TUNGHO vs. TING GUANG.R. No. 182153 April 7, 2014


Baguio City

SECOND DIVISION

G.R. No. 182153 April 7, 2014

TUNG HO STEEL ENTERPRISES CORPORATION, Petitioner, vs.TING GUAN TRADING CORPORATION, Respondent.

D E C I S I O N

BRION, J.:

We resolve the petition for review on, certiorari1 filed by petitioner Tung Ho Steel Enterprises Corp. (Tung Ho) to challenge the July 5, 2006 decision2 and the March 12, 2008 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 92828.

The Factual Antecedents

Tung Ho is a foreign corporation organized under the laws of Taiwan, Republic of China.4 On the other hand, respondent Ting Guan Trading Corp. (Ting Guan) is a domestic corporation organized under the laws of the Philippines.5

On January 9, 2002, Ting Guan obligated itself under a contract of sale to deliver heavy metal scrap iron and steel to Tung Ho. Subsequently, Tung Ho filed a request for arbitration before the ICC International Court of Arbitration (ICC) in Singapore after Ting Guan failed to deliver the full quantity of the promised heavy metal scrap iron and steel.6

The ICC ruled in favor of Tung Ho on June 18, 2004 and ordered Ting Guan to pay Tung Ho the following: (1) actual damages in the amount of US$ 659,646.15 with interest of 6% per annum from December 4, 2002 until final payment; (2) cost of arbitration in the amount of US $ 47,000.00; and (3) legal costs and expenses in the amount of NT $ 761,448.00 and US $ 34,552.83.7


http://www.lawphil.net/judjuris/juri2014/apr2014/gr_182153_2014.html#fnt7







On October 24, 2004, Tung Ho filed an action against Ting Guan for the recognition and enforcement of the arbitral award before the Regional Trial Court (RTC) of Makati, Branch 145. Ting Guan moved to dismiss the case based on Tung Ho’s lack of capacity to sue and for prematurity. Ting Guan subsequently filed a supplemental motion to dismiss based on improper venue. Ting Guan argued that the complaint should have been filed in Cebu where its principal place of business was located.8

The Proceedings before the RTC

The RTC denied Ting Guan’s motion to dismiss in an order dated May 11, 2005. Ting Guan moved to reconsider the order and raised the RTC’s alleged lack of jurisdiction over its person as additional ground for the dismissal of the complaint. Ting Guan insisted that Ms. Fe Tejero, on whom personal service was served, was not its corporate secretary and was not a person allowed under Section 11, Rule 14 of the Rules of Court to receive a summons. It also asserted that Tung Ho cannot enforce the award in the Philippines without violating public policy as Taiwan is not a signatory to the New York Convention.9

The RTC denied the motion in an order dated November 21, 2005 and ruled that Ting Guan had voluntarily submitted to the court’s jurisdiction when it raised other arguments apart from lack of jurisdiction in its motion to dismiss.

The Proceedings before the CA

Ting Guan responded to the denials by filing a petition for certiorari before the CA with an application for the issuance of a temporary restraining order and a writ of preliminary injunction.10

In its Memorandum, Tung Ho argued that a Rule 65 petition is not the proper remedy to assail the denial of a motion to dismiss. It pointed out that the proper recourse for Ting Guan was to file an answer and to subsequently appeal the case. It also posited that beyond the reglementary period for filing an answer, Ting Guan was barred from raising other grounds for the dismissal of the case. Tung Ho also claimed that the RTC acquired jurisdiction over the person of Ting Guan since the return of service of summons expressly stated that Tejero was a corporate secretary.11

In its decision dated July 5, 2006, the CA dismissed the complaint for lack of jurisdiction over the person of Ting Guan. The CA held that Tung Ho failed to establish that Tejero was Ting Guan’s corporate secretary. The CA also ruled that a petition for certiorari is the proper remedy to assail the denial of a motion to dismiss if the ground raised in the motion is lack of jurisdiction. Furthermore, any of the grounds for the dismissal of the case can be raised in a motion to dismiss provided that the grounds

were raised before the filing of an answer. The CA likewise ruled that Tung Ho properly filed the complaint before the RTC-Makati.12

Subsequently, both parties moved to partially reconsider the CA decision. Tung Ho reiterated that there was proper service of summons. On the other hand, Ting Guan sought to modify the CA decision with respect to the proper venue of the case. The CA denied Ting Guan’s motion for partial reconsideration in an order dated December 5, 2006.13

Ting Guan immediately proceeded to file a petition for review on certiorari before this Court to question the CA’s rulings as discussed below. In the interim (on February 11, 2008), Tung Ho (whose motion for reconsideration of the CA decision was still pending with that court) filed a "Motion to Supplement and Resolve Motion for Reconsideration" before the CA. In this motion, Tung Ho prayed for the issuance of an alias summons if the service of summons had indeed been defective, but its motion proved unsuccessful.14

It was not until March 12, 2008, after the developments described below, that the CA finally denied Tung Ho’s partial motion for reconsideration for lack of merit.

Ting Guan’s Petition before this Court

(G.R. No. 176110)

Ting Guan’s petition before this Court was docketed as G.R. No. 176110. Ting Guan argued that the dismissal of the case should be based on the following additional grounds: first, the complaint was prematurely filed; second, the foreign arbitral award is null and void; third, the venue was improperly laid in Makati; and lastly, the enforcement of the arbitral award was against public policy.15

On April 24, 2007, Tung Ho filed its Comment dated April 24, 2007 in G.R. No. 176110, touching on the issue of jurisdiction, albeit lightly. Tung Ho complained in its Comment that Ting Guan engaged in dilatory tactics when Ting Guan belatedly raised the issue of jurisdiction in the motion for reconsideration before the RTC. However, Tung Ho did not affirmatively seek the reversal of the July 5, 2006 decision. Instead, it merely stated that Ting Guan’s petition "cannot be dismissed on the ground that the summons was wrongfully issued as the petitioner can always move for the issuance of an alias summons to be served". Furthermore, Tung Ho only prayed that Ting Guan’s petition be denied in G.R. No. 176110 and for other just and equitable reliefs. In other words, Tung Ho failed to effectively argue its case on the merits before the Court in G.R. No. 176110.










On June 18, 2007, we issued our Resolution denying Ting Guan’s petition for lack of merit. On November 12, 2007, we also denied Ting Guan’s motion for reconsideration. On January 8, 2008, the Court issued an entry of judgment in Ting Guan’s petition, G.R. No. 176110.

After the entry of judgment, we referred the matter back to the RTC for further proceedings. On January 16, 2008, the RTC declared the case closed and terminated. Its order stated:

Upon examination of the entire records of this case, an answer with caution was actually filed by the respondent to which a reply was submitted by the petitioner. Since the answer was with the qualification that respondent is not waiving its claim of lack of jurisdiction over its person on the ground of improper service of summons upon it and that its petition to this effect filed before the Court of Appeals was acted favorably and this case was dismissed on the aforementioned ground and it appearing that the Decision as well as the Order denying the motion for reconsideration of the petitioner now final and executory, the Order of November 9, 2007 referring this petition to the Court Annexed Mediation for possible amicable settlement is recalled it being moot and academic. This case is now considered closed and terminated.

On February 6, 2008, Tung Ho moved to reconsider the RTC order. Nothing in the records shows whether the RTC granted or denied this motion for reconsideration.

Tung Ho’s Petition before this Court

(G.R. No. 182153)

On May 7, 2008, Tung Ho seasonably filed a petition for review on certiorari to seek the reversal of the July 5, 2006 decision and the March 12, 2008 resolution of the CA. This is the present G.R. No. 182153 now before us.

Tung Ho reiterates that the RTC acquired jurisdiction over the person of Ting Guan. It also claims that the return of service of summons is a prima facie evidence of the recited facts i.e., that Tejero is a corporate secretary as stated therein and that the sheriff is presumed to have regularly performed his official duties in serving the summons. In the alternative, Tung Ho argues that Ting Guan’s successive motions before the RTC are equivalent to voluntary appearance. Tung Ho also prays for the issuance of alias summons to cure the alleged defective service of summons.16

Respondent Ting Guan’s Position

(G.R. No. 182153)

In its Comment, Ting Guan submits that the appeal is already barred by res judicata. It also stresses that the Court has already affirmed with finality the dismissal of the complaint.17 Ting Guan also argues that Tung Ho raises a factual issue that is beyond the scope of a petition for review on certiorari under Rule 45 of the Rules of Court.18

The Issues

This case presents to us the following issues:

1) Whether the present petition is barred by res judicata; and

2) Whether the trial court acquired jurisdiction over the person of Ting Guan, specifically:

a) Whether Tejero was the proper person to receive the summons; and

b) Whether Ting Guan made a voluntary appearance before the trial court.

The Court’s Ruling

We find the petition meritorious.

I. The Court is not precluded from ruling on the jurisdictional issue raised in the petition

A. The petition is not barred by res judicata

Res judicata refers to the rule that a final judgment or decree on the merits by a court of competent jurisdiction is conclusive on the rights of the parties or their privies in all later suits on all points and matters determined in the former suit.19 For res judicata to apply, the final judgment must be on the merits of the case which means that the court has unequivocally determined the parties’ rights and obligations with respect to the causes of action and the subject matter of the case.20

Contrary to Ting Guan’s position, our ruling in G.R. No. 176110 does not operate as res judicata on Tung Ho’s appeal; G.R. No. 176110 did not conclusively rule on all issues raised by the parties in this case so that this Court would now be barred from taking cognizance of Tung Ho’s petition. Our disposition in G.R. No. 176110 only dwelt on technical or collateral aspects of the case, and not on its merits. Specifically, we did not rule on whether Tung Ho may enforce the foreign arbitral award against Ting Guan in that case.

B. The appellate court cannot be ousted of jurisdiction until it finally disposes of the case







The court’s jurisdiction, once attached, cannot be ousted until it finally disposes of the case. When a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to the final determination of the case is retained.21 A judge is competent to act on the case while its incidents remain pending for his disposition.

The CA was not ousted of its jurisdiction with the promulgation of G.R. No. 176110. The July 5, 2006 decision has not yet become final and executory for the reason that there remained a pending incident before the CA – the resolution of Tung Ho’s motion for reconsideration – when this Court promulgated G.R. No. 176110. In this latter case, on the other hand, we only resolved procedural issues that are divorced from the present jurisdictional question before us. Thus, what became immutable in G.R. No. 176110 was the ruling that Tung Ho’s complaint is not dismissible on grounds of prematurity, nullity of the foreign arbitral award, improper venue, and the foreign arbitral award’s repugnance to local public policy. This leads us to the conclusion that in the absence of any ruling on the merits on the issue of jurisdiction, res judicata on this point could not have set in.

C. Tung Ho’s timely filing of a motion for reconsideration and of a petition for review on certiorari prevented the July 5, 2006 decision from attaining finality

Furthermore, under Section 2, Rule 45 of the Rules of Court, Tung Ho may file a petition for review on certiorari before the Court within (15) days from the denial of its motion for reconsideration filed in due time after notice of the judgment. Tung Ho’s timely filing of a motion for reconsideration before the CA and of a Rule 45 petition before this Court prevented the July 5, 2006 CA decision from attaining finality. For this Court to deny Tung Ho’s petition would result in an anomalous situation where a party litigant is penalized and deprived of his fair opportunity to appeal the case by faithfully complying with the Rules of Court.

II. The trial court acquired jurisdiction over the person of Ting Guan

A. Tejero was not the proper person to receive the summons

Nonetheless, we see no reason to disturb the lower courts’ finding that Tejero was not a corporate secretary and, therefore, was not the proper person to receive the summons under Section 11, Rule 14 of the Rules of Court. This Court is not a trier of facts; we cannot re-examine, review or re-evaluate the evidence and the factual review made by the lower courts. In the absence of compelling reasons, we will not deviate from the rule that factual findings of the lower courts are final and binding on this Court.22

B. Ting Guan voluntarily appeared before the trial court

However, we cannot agree with the legal conclusion that the appellate court reached, given the established facts.23 To our mind, Ting Guan voluntarily appeared before the trial court in view of the procedural recourse that it took before that court. Its voluntary appearance is equivalent to service of summons.24

As a basic principle, courts look with disfavor on piecemeal arguments in motions filed by the parties. Under the omnibus motion rule, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available.25 The purpose of this rule is to obviate multiplicity of motions and to discourage dilatory motions and pleadings. Party litigants should not be allowed to reiterate identical motions, speculating on the possible change of opinion of the courts or of the judges thereof.

In this respect, Section 1, Rule 16 of the Rules of Court requires the defendant to file a motion to dismiss within the time for, but before filing the answer to the complaint or pleading asserting a claim. Section 1, Rule 11 of the Rules of Court, on the other hand, commands the defendant to file his answer within fifteen (15) days after service of summons, unless a different period is fixed by the trial court. Once the trial court denies the motion, the defendant should file his answer within the balance of fifteen (15) days to which he was entitled at the time of serving his motion, but the remaining period cannot be less than five (5) days computed from his receipt of the notice of the denial.26

Instead of filing an answer, the defendant may opt to file a motion for reconsideration. Only after the trial court shall have denied the motion for reconsideration does the defendant become bound to file his answer.27 If the defendant fails to file an answer within the reglementary period, the plaintiff may file a motion to declare the defendant in default. This motion shall be with notice to the defendant and shall be supported by proof of the failure.28

The trial court’s denial of the motion to dismiss is not a license for the defendant to file a Rule 65 petition before the CA. An order denying a motion to dismiss cannot be the subject of a petition for certiorari as the defendant still has an adequate remedy before the trial court – i.e., to file an answer and to subsequently appeal the case if he loses the case.29 As exceptions, the defendant may avail of a petition for certiorari if the ground raised in the motion to dismiss is lack of jurisdiction over the person of the defendant30 or over the subject matter.31

We cannot allow and simply passively look at Ting Guan’s blatant disregard of the rules of procedure in the present case. The Rules of Court only allows the filing of a motion to dismiss once.32 Ting Guan’s filing of successive














motions to dismiss, under the guise of "supplemental motion to dismiss" or "motion for reconsideration", is not only improper but also dilatory.33 Ting Guan’s belated reliance on the improper service of summons was a mere afterthought, if not a bad faith ploy to avoid the foreign arbitral award’s enforcement which is still at its preliminary stage after the lapse of almost a decade since the filing of the complaint.

Furthermore, Ting Guan’s failure to raise the alleged lack of jurisdiction over its person in the first motion to dismiss is fatal to its cause. Ting Guan voluntarily appeared before the RTC when it filed a motion to dismiss and a "supplemental motion to dismiss" without raising the RTC’s lack of jurisdiction over its person. In Anunciacion v. Bocanegra,34 we categorically stated that the defendant should raise the affirmative defense of lack of jurisdiction over his person in the very first motion to dismiss. Failure to raise the issue of improper service of summons in the first motion to dismiss is a waiver of this defense and cannot be belatedly raised in succeeding motions and pleadings.

Even assuming that Ting Guan did not voluntarily appear before the RTC, the CA should have ordered the RTC to issue an alias summons instead. In Lingner & Fisher GMBH vs. Intermediate Appellate Court35, we enunciated the policy that the courts should not dismiss a case simply because there was an improper service of summons. The lower courts should be cautious in haphazardly dismissing complaints on this ground alone considering that the trial court can cure this defect and order the issuance of alias summons on the proper person in the interest of substantial justice and to expedite the proceedings.

III. A Final Note

As a final note, we are not unaware that the present case has been complicated by its unique development. The complication arose when the CA, instead of resolving the parties’ separate partial motions for reconsideration in one resolution, proceeded to first resolve and to deny Ting Guan’s partial motion. Ting Guan, therefore, went to this Court via a petition for review on certiorari while Tung Ho’s partial motion for reconsideration was still unresolved.

Expectedly, Ting Guan did not question the portions of the CA decision favorable to it when it filed its petition with this Court. Instead, Ting Guan reiterated that the CA should have included additional grounds to justify the dismissal of Tung Ho’s complaint with the RTC. The Court denied Ting Guan’s petition, leading to the entry of judgment that improvidently followed. Later, the CA denied Tung Ho’s partial motion for reconsideration, prompting Tung Ho’s own petition with this Court, which is the present G.R. No. 182153.

Under the Rules of Court, entry of judgment may only be made if no appeal or motion for reconsideration was timely filed.36 In the proceedings before the CA, if a motion for reconsideration (including a partial motion for reconsideration37) is timely filed by the proper party, execution of the CA’s judgment or final resolution shall be stayed.38 This rule is applicable even to proceedings before the Supreme Court, as provided in Section 4, Rule 56 of the Rules of Court.39

In the present case, Tung Ho timely filed its motion for reconsideration with the CA and seasonably appealed the CA’s rulings with the Court through the present petition (G.R. No. 182153).

To now recognize the finality of the Resolution of Ting Guan petition (G.R. No. 176110) based on its entry of judgment and to allow it to foreclose the present meritorious petition of Tung Ho, would of course cause unfair and unjustified injury to Tung Ho. First, as previously mentioned, the Ting Guan petition did not question or assail the full merits of the CA decision. It was Tung Ho, the party aggrieved by the CA decision, who substantially questioned the merits of the CA decision in its petition; this petition showed that the CA indeed committed error and Tung Ho’s complaint before the RTC should properly proceed. Second, the present case is for the enforcement of an arbitral award involving millions of pesos. Tung Ho already won in the foreign arbitration and the present case is simply for the enforcement of this arbitral award in our jurisdiction. Third, and most importantly, Tung Ho properly and timely availed of the remedies available to it under the Rules of Court, which provide that filing and pendency of a motion for reconsideration stays the execution of the CA judgment. Therefore, at the time of the entry of judgment in G.R. No. 176110 in the Supreme Court on January 8, 2008, the CA decision which the Court affirmed was effectively not yet be final.

Significantly, the rule that a timely motion for reconsideration stays the execution of the assailed judgment is in accordance with Rule 51, Section 10 (Rules governing the CA proceedings) which provides that "entry of judgments may only be had if there is no appeal or motion for reconsideration timely filed. The date when the judgment or final resolution becomes executory shall be deemed as the date of its entry." Incidentally, this procedure also governs before Supreme Court proceedings.40 Following these rules, therefore, the pendency of Tung Ho’s MR with the CA made the entry of the judgment of the Court in the Ting Guan petition premature and inefficacious for not being final and executory.

Based on the above considerations, the Court would not be in error if it applies its ruling in the case of Realty Sales Enterprises, Inc. and Macondray Farms, Inc. v. Intermediate Appellate Court, et al.41 where the Court, in











a per curiam resolution, ruled that an entry of judgment may be recalled or lifted motu proprio when it is clear that the decision assailed of has not yet become final under the rules:

The March 6, 1985 resolution denying reconsideration of the January 30, 1985 resolution was, to repeat, not served on the petitioners until March 20, 1985 - and therefore the Jan. 30, 1985 resolution could not be deemed final and executory until one (1) full day (March 21) had elapsed, or on March 22, 1985 (assuming inaction on petitioners' part.) The entry of judgment relative to the January 30, 1985 resolution, made on March 18, 1985, was therefore premature and inefficacious. An entry of judgment does not make the judgment so entered final and execution when it is not so in truth. An entry of judgment merely records the fact that a judgment, order or resolution has become final and executory; but it is not the operative act that make the judgment, order or resolution final and executory. In the case at bar, the entry of judgment on March 18, 1985 did not make the January 30, 1985 resolution subject of the entry, final and executory, As of the date of entry, March 18, 1985, notice of the resolution denying reconsideration of the January 30, 1985 resolution had not yet been served on the petitioners or any of the parties, since March 18, 1985 was also the date of the notice (and release) of the March 6, 1985 resolution denying reconsideration.1âwphi1

According to this ruling, the motu proprio recall or setting aside of the entry of final judgment was proper and "entirely consistent with the inherent power of every court inter alia to amend and control its process and orders so as to make them conformable to law and justice [Sec. 5(g), Rule 135, Rules of Court,]. That the recall has in fact served to achieve a verdict consistent with law and justice is clear from the judgment subsequently rendered on the merits." This course of action is effectively what the Court undertook today, adapted of course to the circumstances of the present case.

In light of these premises, we hereby REVERSE and SET ASIDE the July 5, 2006 decision and the March 12, 2008 resolution of the Court of Appeals in CA-G.R. SP No. 92828. SP. Proc. No. 11.-5954 is hereby ordered reinstated. Let the records of this case be remanded to the court of origin for further proceedings. No costs.

SO ORDERED.

NORTHWEST AIRLINES vs. CAG.R. No. 112573 February 9, 1995

FACTS:

Northwest Airlines (Northwest) and C.F. Sharp & Company (C.F.), through its Japan branch, entered into an International Passenger Sales Agency Agreement, whereby the Northwest authorized the C.F. to sell its air transportation tickets

March 25, 1980: Unable to remit the proceeds of the ticket sales, Northwest sued C.F. in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with claim for damages

April 11, 1980: writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan

o The attempt to serve the summons was

unsuccessful because Mr. Dinozo was in Manila and would be back on April 24, 1980

April 24, 1980: Mr. Dinozo returned to C.F. Office to serve the summons but he refused to receive claiming that he no longer an employee

After the 2 attempts of service were unsuccessful, Supreme Court of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of Japan> Japanese Embassy in Manila>Ministry (now Department) of Foreign Affairs of the Philippines>Executive Judge of the Court of First Instance (now Regional Trial Court) of Manila who ordered Deputy Sheriff Rolando Balingit>C.F. Main Office

August 28, 1980: C.F. received from Deputy Sheriff Rolando Balingit the writ of summons but failed to appear at the scheduled hearing.

January 29, 1981: Tokyo Court rendered judgment ordering 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 payment is completed


March 24, 1981: C.F. received from Deputy Sheriff Balingit copy of the judgment. C.F. did not appeal so it became final and executory

May 20, 1983: Northwest filed a suit for enforcement of the judgment a RTC

July 16, 1983: C.F. averred that the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction having been rendered without due and proper notice and/or with collusion or fraud and/or upon a clear mistake of law and fact. The foreign judgment in the Japanese Court sought in this action is null and void for want of jurisdiction over the person of the defendant considering that this is an action in personam. The process of the Court in Japan sent to the Philippines which is outside Japanese jurisdiction cannot confer jurisdiction over the defendant in the case before the Japanese Court of the case at bar

CA sustained RTC: Court agrees that if the C.F. in a foreign court is a resident in the court of that foreign court such court could acquire jurisdiction over the person of C.F. but it must be served in the territorial jurisdiction of the foreign court

ISSUE: W/N the Japanese Court has jurisdiction over C.F.

HELD: YES. instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it denied NORTHWEST's claims for attorneys fees, litigation expenses, and exemplary damages

Consequently, the party attacking (C.F.) a foreign judgment has the burden of overcoming the presumption of its validity

Accordingly, the presumption of validity and regularity of the service of summons and the decision thereafter rendered by the Japanese court must stand.

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 in the Philippines. Section 14, Rule 14 of the Rules of Court provides that if the defendant is a foreign corporation doing business in the Philippines, service may be made:

o (1) on its resident agent designated in

accordance with law for that purpose, or,

o (2) if there is no such resident agent, on

the government official designated by law to that effect; or

o (3) on any of its officers or agents

within the Philippines.

o If the foreign corporation has

designated an agent to receive summons, the designation is exclusive, and service of summons is without force and gives the court no jurisdiction unless made upon him.

o Where the corporation has no such

agent, service shall be made on the government official designated by law, to wit:

(a) the Insurance Commissioner in the case of a foreign insurance company

(b) the Superintendent of Banks, in the case of a foreign banking corporation

(c) the Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do business in the Philippines. Whenever service of process is so made, the government office or official served shall transmit by mail a copy of the summons or other legal proccess to the corporation at its home or principal office. The sending of such copy is a necessary part of the service.

The service on the proper government official under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code

Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed to do business here, to the status of domestic corporations

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 harsh writ of seizure by attachment when it has complied not only with every requirement of law made specially of foreign corporations, but in addition with every requirement of law made of domestic corporations

In as much as SHARP was admittedly doing business in Japan 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 the courts therein and may be deemed to have assented to the said courts' lawful methods of serving process.

Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual presumption but also because of the presumption of regularity of performance of official duty.


Manila

FIRST DIVISION

G.R. No. 112573 February 9, 1995

NORTHWEST ORIENT AIRLINES, INC. petitioner, vs.COURT OF APPEALS and C.F. SHARP & COMPANY INC., respondents.

PADILLA, JR., J.:

This petition for review on certiorari seeks to set aside the decision of the Court of Appeals affirming the dismissal of the petitioner's complaint to enforce the judgment of a Japanese court. The principal issue here is whether a Japanese court can acquire jurisdiction over a Philippine corporation doing business in Japan by serving summons through diplomatic channels on the Philippine corporation at its principal office in Manila after prior attempts to serve summons in Japan had failed.

Petitioner Northwest Orient Airlines, Inc. (hereinafter NORTHWEST), a corporation organized under the laws of the State of Minnesota, U.S.A., sought to enforce in Civil Case No. 83-17637 of the Regional Trial Court (RTC), Branch 54, Manila, a judgment rendered in its favor by a Japanese court against private respondent C.F. Sharp &


Company, Inc., (hereinafter SHARP), a corporation incorporated under Philippine laws.

As found by the Court of Appeals in the challenged decision of 10 November 1993, 1 the following are the factual and procedural antecedents of this controversy:

On May 9, 1974, plaintiff Northwest Airlines and defendant C.F. Sharp & Company, through its Japan branch, entered into an International Passenger Sales Agency Agreement, whereby the former authorized the latter to sell its air transportation tickets. Unable to remit the proceeds of the ticket sales made by defendant on behalf of the plaintiff under the said agreement, plaintiff on March 25, 1980 sued defendant in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with claim for damages.

On April 11, 1980, a writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan against defendant at its office at the Taiheiyo Building, 3rd floor, 132, Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture. The attempt to serve the summons was unsuccessful because the bailiff was advised by a person in the office that Mr. Dinozo, the person believed to be authorized to receive court processes was in Manila and would be back on April 24, 1980.

On April 24, 1980, bailiff returned to the defendant's office to serve the summons. Mr. Dinozo refused to accept the same claiming that he was no longer an employee of the defendant.

After the two attempts of service were unsuccessful, the judge of the Tokyo District Court decided to have the complaint and the writs of summons served at the head office of the defendant in Manila. On July 11, 1980, the Director of the Tokyo District Court requested the Supreme Court of Japan to serve the summons through diplomatic channels upon the defendant's head office in Manila.

On August 28, 1980, defendant received from Deputy Sheriff Rolando Balingit the writ of summons (p. 276, Records). Despite receipt of the same, defendant failed to appear at the scheduled hearing. Thus, the Tokyo Court proceeded to hear the plaintiff's complaint and on [January 29, 1981],

rendered judgment ordering the defendant to pay the plaintiff the sum of 83,158,195 Yen and damages for delay at the rate of 6% per annum from August 28, 1980 up to and until payment is completed (pp. 12-14, Records).

On March 24, 1981, defendant received from Deputy Sheriff Balingit copy of the judgment. Defendant not having appealed the judgment, the same became final and executory.

Plaintiff was unable to execute the decision in Japan, hence, on May 20, 1983, a suit for enforcement of the judgment was filed by plaintiff before the Regional Trial Court of Manila Branch 54. 2

On July 16, 1983, defendant filed its answer averring that the judgment of the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction having been rendered without due and proper notice to the defendant and/or with collusion or fraud and/or upon a clear mistake of law and fact (pp. 41-45, Rec.).

Unable to settle the case amicably, the case was tried on the merits. After the plaintiff rested its case, defendant on April 21, 1989, filed a Motion for Judgment on a Demurrer to Evidence based on two grounds: (1) the foreign judgment sought to be enforced is null and void for want of jurisdiction and (2) the said judgment is contrary to Philippine law and public policy and rendered without due process of law. Plaintiff filed its opposition after which the court a quo rendered the now assailed decision dated June 21, 1989 granting the demurrer motion and dismissing the complaint (Decision, pp. 376-378, Records). In granting the demurrer motion, the trial court held that:

The foreign judgment in the Japanese Court sought in this action is null and void for want of jurisdiction over the person of the defendant considering that this is an action in personam; the Japanese Court did not acquire


jurisdiction over the person of the defendant because jurisprudence requires that the defendant be served with summons in Japan in order for the Japanese Court to acquire jurisdiction over it, the process of the Court in Japan sent to the Philippines which is outside Japanese jurisdiction cannot confer jurisdiction over the defendant in the case before the Japanese Court of the case at bar. Boudard versus Tait 67 Phil. 170. The plaintiff contends that the Japanese Court acquired jurisdiction because the defendant is a resident of Japan, having four (4) branches doing business therein and in fact had a permit from the Japanese government to conduct business in Japan (citing the exhibits presented by the plaintiff); if this is so then service of summons should have been made upon the defendant in Japan in any of these alleged four branches; as admitted by the plaintiff the service of the summons issued by the Japanese Court was made in the Philippines thru a Philippine Sheriff. This Court agrees that if the defendant in a foreign court is a resident in the court of that foreign court such court could acquire jurisdiction over the person of the defendant but it must be served upon the defendant in the territorial jurisdiction of the foreign court. Such is not the case here because the defendant was served with summons in the Philippines and not in Japan.

Unable to accept the said decision, plaintiff on July 11, 1989 moved for reconsideration of the decision, filing at the same time a conditional Notice of Appeal, asking the court to treat the said notice of appeal "as in effect after and upon issuance of the court's denial of the motion for reconsideration."

Defendant opposed the motion for reconsideration to which a Reply dated August 28, 1989 was filed by the plaintiff.

On October 16, 1989, the lower court disregarded the Motion for

Reconsideration and gave due course to the plaintiff's Notice of Appeal. 3

In its decision, the Court of Appeals sustained the trial court. It agreed with the latter in its reliance upon Boudard vs. Tait 4 wherein it was held that "the process of the court has no extraterritorial effect and no jurisdiction is acquired over the person of the defendant by serving him beyond the boundaries of the state." To support its position, the Court of Appeals further stated:

In an action strictly in personam, such as the instant case, personal service of summons within the forum is required for the court to acquire jurisdiction over the defendant (Magdalena Estate Inc. vs. Nieto, 125 SCRA 230). To confer jurisdiction on the court, personal or substituted service of summons on the defendant not extraterritorial service is necessary (Dial Corp vs. Soriano, 161 SCRA 739).

But while plaintiff-appellant concedes that the collection suit filed is an action in personam, it is its theory that a distinction must be made between an action in personam against a resident defendant and an action in personam against a non-resident defendant. Jurisdiction is acquired over a non-resident defendant only if he is served personally within the jurisdiction of the court and over a resident defendant if by personal, substituted or constructive service conformably to statutory authorization. Plaintiff-appellant argues that since the defendant-appellee maintains branches in Japan it is considered a resident defendant. Corollarily, personal, substituted or constructive service of summons when made in compliance with the procedural rules is sufficient to give the court jurisdiction to render judgment in personam.

Such an argument does not persuade.

It is a general rule that processes of the court cannot lawfully be served outside the territorial limits of the jurisdiction of the court from which it issues (Carter vs. Carter; 41 S.E. 2d 532, 201) and this is regardless of the residence or citizenship of the party thus served (Iowa-Rahr vs. Rahr, 129 NW 494, 150 Iowa 511, 35 LRC, NS, 292, Am. Case 1912 D680). There must be actual


service within the proper territorial limits on defendant or someone authorized to accept service for him. Thus, a defendant, whether a resident or not in the forum where the action is filed, must be served with summons within that forum.

But even assuming a distinction between a resident defendant and non-resident defendant were to be adopted, such distinction applies only to natural persons and not in the corporations. This finds support in the concept that "a corporation has no home or residence in the sense in which those terms are applied to natural persons" (Claude Neon Lights vs. Phil. Advertising Corp., 57 Phil. 607). Thus, as cited by the defendant-appellee in its brief:

Residence is said to be an attribute of a natural person, and can be predicated on an artificial being only by more or less imperfect analogy. Strictly speaking, therefore, a corporation can have no local residence or habitation. It has been said that a corporation is a mere ideal existence, subsisting only in contemplation of law — an invisible being which can have, in fact, no locality and can occupy no space, and therefore cannot have a dwelling place. (18 Am. Jur. 2d, p. 693 citing Kimmerle v. Topeka, 88 370, 128 p. 367; Wood v. Hartfold F. Ins. Co., 13 Conn 202)

Jurisprudence so holds that the foreign or domestic character of a corporation is to be determined by the place of its origin where its charter was granted and not by the location of its business activities (Jennings v. Idaho Rail Light & P. Co., 26 Idaho 703, 146 p. 101), A corporation is a "resident" and an inhabitant of the state in which it is incorporated and no other (36 Am. Jur. 2d, p. 49).

Defendant-appellee is a Philippine Corporation duly organized under the Philippine laws. Clearly, its residence is the Philippines, the place of its incorporation, and not Japan. While defendant-appellee maintains branches in Japan, this will not make it a resident of Japan. A corporation does not become a resident of another by engaging in business there even though

licensed by that state and in terms given all the rights and privileges of a domestic corporation (Galveston H. & S.A.R. Co. vs. Gonzales, 151 US 496, 38 L ed. 248, 4 S Ct. 401).

On this premise, defendant appellee is a non-resident corporation. As such, court processes must be served upon it at a place within the state in which the action is brought and not elsewhere (St. Clair vs. Cox, 106 US 350, 27 L ed. 222, 1 S. Ct. 354). 5

It then concluded that the service of summons effected in Manila or beyond the territorial boundaries of Japan was null and did not confer jurisdiction upon the Tokyo District Court over the person of SHARP; hence, its decision was void.

Unable to obtain a reconsideration of the decision, NORTHWEST elevated the case to this Court contending that the respondent court erred in holding that SHARP was not a resident of Japan and that summons on SHARP could only be validly served within that country.

A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is also proper to presume the regularity of the proceedings and the giving of due notice therein. 6

Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in personam of a tribunal of a foreign country having jurisdiction to pronounce the same is presumptive evidence of a right as between the parties and their successors-in-interest by a subsequent title. The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere, enjoys the presumption that it was acting in the lawful exercise of jurisdiction and has regularly performed its official duty.

Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity. 7 Being the party challenging the judgment rendered by the Japanese court, SHARP had the duty to demonstrate the invalidity of such judgment. In an attempt to discharge that burden, it contends that the extraterritorial service of summons effected at its home office in the Philippines was not only ineffectual but also void, and the Japanese Court did not, therefore acquire jurisdiction over it.

It is settled that matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lex fori or the internal law


of the forum. 8 In this case, it is the procedural law of Japan where the judgment was rendered that determines the validity of the 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 judicial notice of and must be pleaded and proved like any other fact. 9 Sections 24 and 25, Rule 132 of the Rules of Court provide that it may be evidenced by an official publication or by a duly attested or authenticated copy thereof. It was then incumbent upon SHARP to present evidence as to what that Japanese procedural law is and to show that under it, the assailed extraterritorial service is invalid. It did not. Accordingly, the presumption of validity and regularity of the service of summons and the decision thereafter rendered by the Japanese court must stand.

Alternatively in the light of the absence of proof regarding Japanese law, the presumption of identity or similarity or the so-called processual presumption 10 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 in the Philippines. Section 14, Rule 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 resident agent, on the government official designated by law to that effect; or (3) on any of its officers or agents within the Philippines.

If the foreign corporation has designated an agent to receive summons, the designation is exclusive, and service of summons is without force and gives the court no jurisdiction unless made upon him. 11

Where the corporation has no such agent, service shall be made on the government official designated by law, to wit: (a) the Insurance Commissioner in the case of a foreign insurance company; (b) the Superintendent of Banks, in the case of a foreign banking corporation; and (c) the Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do business in the Philippines. Whenever service of process is so made, the government office or official served shall transmit by mail a copy of the summons or other legal proccess to the corporation at its home or principal office. The sending of such copy is a necessary part of the service. 12

SHARP contends that the laws authorizing service of process upon the Securities and Exchange Commission, the Superintendent of Banks, and the Insurance Commissioner, as the case may be, presuppose a situation wherein the foreign corporation doing business in the country no longer has any branches or offices within the Philippines. Such contention is belied by the pertinent provisions of the said laws. Thus, Section 128 of

the Corporation Code 13 and Section 190 of the Insurance Code 14 clearly contemplate two situations: (1) if the corporation had left the Philippines or had ceased to transact business therein, and (2) if the corporation has no designated agent. Section 17 of the General Banking Act 15 does not even speak a corporation which had ceased to transact business in the Philippines.

Nowhere in its pleadings did SHARP profess to having had a resident agent authorized to receive court processes in Japan. This silence could only mean, or least create an impression, that it had none. Hence, service on the designated government official or on any of SHARP's officers or agents in Japan could be availed of. The respondent, however, insists that only service of any of its officers or employees in its branches in Japan could be resorted to. We do not agree. As found by the respondent court, two attempts at service were made at SHARP's Yokohama branch. Both were unsuccessful. On the first attempt, Mr. Dinozo, who was believed to be the person authorized to accept court process, was in Manila. On the second, Mr. Dinozo was present, but to accept the summons because, according to him, he was no longer an employee of SHARP. While it may be true that service could have been made upon any of the officers or agents of SHARP at its three other branches in Japan, the availability of such a recourse would not preclude service upon the proper government official, as stated above.

As found by the Court of Appeals, it was the Tokyo District Court which ordered that summons for SHARP be served at its head office in the Philippine's after the two attempts of service had failed. 16 The Tokyo District Court requested the Supreme Court of Japan to cause the delivery of the summons and other legal documents to the Philippines. Acting on that request, the Supreme Court of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of Japan which, in turn, forwarded the same to the Japanese Embassy in Manila . Thereafter, the court processes were delivered to the Ministry (now Department) of Foreign Affairs of the Philippines, then to the Executive Judge of the Court of First Instance (now Regional Trial Court) of Manila, who forthwith ordered Deputy Sheriff Rolando Balingit to serve the same on SHARP at its principal office in Manila. This service is equivalent to service on the proper government official under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code. Hence, SHARP's contention that such manner of service is not valid under Philippine laws holds no water. 17

In deciding against the petitioner, the respondent court sustained the trial court's reliance on Boudard vs. Tait 18

where this Court held:

The fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain a money judgment, must be


based upon personal service within the state which renders the judgment.

xxx xxx xxx

The process of a court, has no extraterritorial effect, and no jurisdiction is acquired over the person of the defendant by serving him beyond the boundaries of the state. Nor has a judgment of a court of a foreign country against a resident of this country having no property in such foreign country based on process served here, any effect here against either the defendant personally or his property situated here.

Process issuing from the courts of one state or country cannot run into another, and although a nonresident defendant may have been personally served with such process in the state or country of his domicile, it will not give such jurisdiction as to authorize a personal judgment against him.

It further availed of the ruling in Magdalena Estate, Inc. vs. Nieto 19 and Dial Corp. vs. Soriano, 20 as well as the principle laid down by the Iowa Supreme Court in the 1911 case of Raher vs. Raher. 21

The first three cases are, however, inapplicable. Boudard involved the enforcement of a judgment of the civil division of the Court of First Instance of Hanoi, French Indo-China. The trial court dismissed the case because the Hanoi court never acquired jurisdiction over the person of the defendant considering that "[t]he, evidence adduced at the trial conclusively proves that neither the appellee [the defendant] nor his agent or employees were ever in Hanoi, French Indo-China; and that the deceased Marie Theodore Jerome Boudard had never, at any time, been his employee." In Magdalena Estate, what was declared invalid resulting in the failure of the court to acquire jurisdiction over the person of the defendants in an action in personam was the service of summons through publication against non-appearing resident defendants. It was claimed that the latter concealed themselves to avoid personal service of summons upon them. In Dial, the defendants were foreign corporations which were not, domiciled and licensed to engage in business in the Philippines and which did not have officers or agents, places of business, or properties here. On the other hand, in the instant case, SHARP was doing business in Japan and was maintaining four branches therein.

Insofar as to the Philippines is concerned, Raher is a thing of the past. In that case, a divided Supreme Court of Iowa

declared that the principle that there can be no jurisdiction in a court of a territory to render a personal judgment against anyone upon service made outside its limits was applicable alike to cases of residents and non-residents. The principle was put at rest by the United States Supreme Court when it ruled in the 1940 case of Milliken vs. Meyer 22 that domicile in the state is alone sufficient to bring an absent defendant within the reach of the state's jurisdiction for purposes of a personal judgment by means of appropriate substituted service or personal service without the state. This principle is embodied in section 18, Rule 14 of the Rules of Court which allows service of summons on residents temporarily out of the Philippines to be made out of the country. The rationale for this rule was explained in Milliken as follows:

[T]he authority of a state over one of its citizens is not terminated by the mere fact of his absence from the state. The state which accords him privileges and affords protection to him and his property by virtue of his domicile may also exact reciprocal duties. "Enjoyment of the privileges of residence within the state, and the attendant right to invoke the protection of its laws, are inseparable" from the various incidences of state citizenship. The responsibilities of that citizenship arise out of the relationship to the state which domicile creates. That relationship is not dissolved by mere absence from the state. The attendant duties, like the rights and privileges incident to domicile, are not dependent on continuous presence in the state. One such incident of domicile is amenability to suit within the state even during sojourns without the state, where the state has provided and employed a reasonable method for apprising such an absent party of the proceedings against him. 23

The domicile of a corporation belongs to the state where it was incorporated. 24 In a strict technical sense, such domicile as a corporation may have is single in its essence and a corporation can have only one domicile which is the state of its creation. 25

Nonetheless, a corporation formed in one-state may, for certain purposes, be regarded a resident in another state in which it has offices and transacts business. This is the rule in our jurisdiction and apropos thereto, it may be necessery to quote what we stated in State Investment House, Inc, vs. Citibank, N.A., 26 to wit:


The issue is whether these Philippine branches or units may be considered "residents of the Philippine Islands" as that term is used in Section 20 of the Insolvency Law . . . or residents of the state under the laws of which they were respectively incorporated. The answer cannot be found in the Insolvency Law itself, which contains no definition of the term, resident, or any clear indication of its meaning. There are however other statutes, albeit of subsequent enactment and effectivity, from which enlightening notions of the term may be derived.

The National Internal Revenue Code declares that the term "'resident foreign corporation' applies to a foreign corporation engaged in trade or business within the Philippines," as distinguished from a "'non-resident foreign corporation' . . . (which is one) not engaged in trade or bussiness within the Philippines." [Sec. 20, pars. (h) and (i)].

The Offshore Banking Law, Presidential Decree No. 1034, states "that branches, subsidiaries, affiliation, extension offices or any other units of corporation or juridical person organized under the laws of any foreign country operating in the Philippines shall be considered residents of the Philippines. [Sec. 1(e)].

The General Banking Act, Republic Act No. 337, places "branches and agencies in the Philippines of foreign banks . . . (which are) called Philippine branches," in the same category as "commercial banks, savings associations, mortgage banks, development banks, rural banks, stock savings and loan associations" (which have been formed and organized under Philippine laws), making no distinction between the former and the latter in so far as the terms "banking institutions" and "bank" are used in the Act [Sec. 2], declaring on the contrary that in "all matters not specifically covered by special provisions applicable only to foreign banks, or their branches and agencies in the Philippines, said foreign banks or their branches and agencies lawfully doing business in the Philippines "shall be bound by all laws, rules, and regulations applicable to domestic banking corporations of the same class,

except such laws, rules and regulations as provided for the creation, formation, organization, or dissolution of corporations or as fix the relation, liabilities, responsibilities, or duties of members, stockholders or officers of corporation. [Sec. 18].

This court itself has already had occasion to hold [Claude Neon Lights, Fed. Inc. vs. Philippine Advertising Corp., 57 Phil. 607] that a foreign corporation licitly doing business in the Philippines, which is a defendant in a civil suit, may not be considered a non-resident within the scope of the legal provision authorizing attachment against a defendant not residing in the Philippine Islands; [Sec. 424, in relation to Sec. 412 of Act No. 190, the Code of Civil Procedure; Sec. 1(f), Rule 59 of the Rules of 1940, Sec. 1(f), Rule 57, Rules of 1964] in other words, a preliminary attachment may not be applied for and granted solely on the asserted fact that the defendant is a foreign corporation authorized to do business in the Philippines — and is consequently and necessarily, "a party who resides out of the Philippines." Parenthetically, if it may not be considered as a party not residing in the Philippines, or as a party who resides out of the country, then, logically, it must be considered a party who does reside in the Philippines, who is a resident of the country. Be this as it may, this Court pointed out that:

. . . Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed to do business here, to the status of domestic corporations. (Cf. Section 73, Act No. 1459, and Marshall Wells Co. vs. Henry W. Elser & Co., 46 Phil. 70, 76; Yu Cong Eng vs. Trinidad, 47 Phil. 385, 411) 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 harsh writ of seizure by attachment when it has complied not only with every requirement of law


made specially of foreign corporations, but in addition with every requirement of law made of domestic corporations. . . .

Obviously, the assimilation of foreign corporations authorized to do business in the Philippines "to the status of domestic corporations, subsumes their being found and operating as corporations, hence, residing, in the country.

The same principle is recognized in American law: that the residence of a corporation, if it can be said to have a residence, is necessarily where it exercises corporate functions . . .;" that it is considered as dwelling "in the place where its business is done . . .," as being "located where its franchises are exercised . . .," and as being "present where it is engaged in the prosecution of the corporate enterprise;" that a "foreign corporation licensed to do business in a state is a resident of any country where it maintains an office or agent for transaction of its usual and customary business for venue purposes;" and that the "necessary element in its signification is locality of existence." [Words and Phrases, Permanent Ed., vol. 37, pp. 394, 412, 493].

In as much as SHARP was admittedly doing business in Japan 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 the courts therein and may be deemed to have assented to the said courts' lawful methods of serving process. 27

Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual presumption but also because of the presumption of regularity of performance of official duty.

We find NORTHWEST's claim for attorney's fees, litigation expenses, and exemplary damages to be without merit. We find no evidence that would justify an award for attorney's fees and litigation expenses under Article 2208 of the Civil Code of the Philippines. Nor is an award for exemplary damages warranted. Under Article 2234 of the Civil Code, before the court may consider the question of whether or not exemplary damages should be awarded, the plaintiff must show that he is entitled to moral,

temperate, or compensatory damaged. There being no such proof presented by NORTHWEST, no exemplary damages may be adjudged in its favor.

WHEREFORE, the instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it denied NORTHWEST's claims for attorneys fees, litigation expenses, and exemplary damages but REVERSED insofar as in sustained the trial court's dismissal of NORTHWEST's complaint in Civil Case No. 83-17637 of Branch 54 of the Regional Trial Court of Manila, and another in its stead is hereby rendered ORDERING private respondent C.F. SHARP L COMPANY, INC. to pay to NORTHWEST the amounts adjudged in the foreign judgment subject of said case, with interest thereon at the legal rate from the filing of the complaint therein until the said foreign judgment is fully satisfied.

Costs against the private respondent.

SO ORDERED.

Padilla, Bellosillo, Quaison and Kapunan, JJ., concur.

HANG LUNG BANK VS. SAULOGG.R. No. 73765 August 26, 1991


Manila

THIRD DIVISION

G.R. No. 73765 August 26, 1991

HANG LUNG BANK, LTD., petitioner, vs.HON. FELINTRIYE G. SAULOG, Presiding Judge, Regional Trial Court, National Capital Judicial Region, Branch CXLII, Makati, Metro Manila, and CORDOVA CHIN SAN, respondents.

Belo, Abiera & Associates for petitioner.

Castelo Law Office for private respondent.

FERNAN, C.J.:p


Challenged in this petition for certiorari which is anchored on grave abuse of discretion, are two orders of the Regional Trial Court, Branch CXLII of Makati, Metro Manila dismissing the complaint for collection of a sum of money and denying the motion for reconsideration of the dismissal order on the ground that petitioner, a Hongkong-based bank, is barred by the General Banking Act from maintaining a suit in this jurisdiction.

The records show that on July 18, 1979, petitioner Hang Lung Bank, Ltd., which was not doing business in the Philippines, entered into two (2) continuing guarantee agreements with Cordova Chin San in Hongkong whereby the latter agreed to pay on demand all sums of money which may be due the bank from Worlder Enterprises to the extent of the total amount of two hundred fifty thousand Hongkong dollars (HK $250,000). 1

Worlder Enterprises having defaulted in its payment, petitioner filed in the Supreme Court of Hongkong a collection suit against Worlder Enterprises and Chin San. Summonses were allegedly served upon Worlder Enterprises and Chin San at their addresses in Hongkong but they failed to respond thereto. Consequently, the Supreme Court of Hongkong issued the following:

J U D G M E N T

THE 14th DAY OF JUNE, 1984

No notice of intention to defend having been given by the 1st and 2nd Defendants herein, IT IS THIS DAY ADJUDGED that: —

(1) the 1st Defendant (Ko Ching Chong Trading otherwise known as the Worlder Enterprises) do pay the Plaintiff the sum of HK$1,117,968.36 together with interest on the respective principal sums of HK$196,591.38, HK$200,216.29, HK$526,557.63, HK$49,350.00 and HK$3,965.50 at the rates of 1.7% per month (or HK$111.40 per day), 18.5% per annum (or HK$101.48 per day), 1.85% per month (or HK$324.71 per day), 1.55% per month (or HK$25.50 per day) and 1.7% per month (or HK$2.25 per day) respectively from 4th May 1984 up to the date of payment; and

(2) the 2nd Defendant (Cordova Chin San) do pay the Plaintiff the sum of HK$279,325.00 together with interest on the principal sum of HK$250,000.00 at the rate of 1.7% per month (or

HK$141.67 per day) from 4th May 1984 up to the date of payment.

AND IT IS ADJUDGED that the 1st and 2nd Defendants do pay the Plaintiff the sum of HK$970.00 fixed costs.

N.J. BARNETT Registrar

Thereafter, petitioner through counsel sent a demand letter to Chin San at his Philippine address but again, no response was made thereto. Hence, on October 18, 1984, petitioner instituted in the court below an action seeking "the enforcement of its just and valid claims against private respondent, who is a local resident, for a sum of money based on a transaction which was perfected, executed and consummated abroad." 2

In his answer to the complaint, Chin San raised as affirmative defenses: lack of cause of action, incapacity to sue and improper venue. 3

Pre-trial of the case was set for June 17, 1985 but it was postponed to July 12, 1985. However, a day before the latter pre-trial date, Chin San filed a motion to dismiss the case and to set the same for hearing the next day. The motion to dismiss was based on the grounds that petitioner had no legal capacity to sue and that venue was improperly laid.

Acting on said motion to dismiss, on December 20, 1985, the lower court 4 issued the following order:

On defendant Chin San Cordova's motion to dismiss, dated July 10, 1985; plaintiff's opposition, dated July 12, 1985; defendant's reply, dated July 22, 1985; plaintiff's supplemental opposition, dated September 13, 1985, and defendant's rejoinder filed on September 23, 1985, said motion to dismiss is granted.

Section 14, General Banking Act provides:

"No foreign bank or banking corporation formed, organized or existing under any laws other than those of the Republic of the Philippines, shall be permitted to transact business in the Philippines, or maintain by itself any


suit for the recovery of any debt, claims or demands whatsoever until after it shall have obtained, upon order of the Monetary Board, a license for that purpose."

Plaintiff Hang Lung Bank, Ltd. with business and postal address at the 3rd Floor, United Centre, 95 Queensway, Hongkong, does not do business in the Philippines. The continuing guarantee, Annexes "A" and "B" appeared to have been transacted in Hongkong. Plaintiff's Annex "C" shows that it had already obtained judgment from the Supreme Court of Hongkong against defendant involving the same claim on June 14, 1984.

The cases of Mentholatum Company, Inc. versus Mangaliman, 72 Phil. 524 and Eastern Seaboard Navigation, Ltd. versus Juan Ysmael & Company, Inc., 102 Phil. 1-8, relied upon by plaintiff, deal with isolated transaction in the Philippines of foreign corporation. Such transaction though isolated is the one that conferred jurisdiction to Philippine courts, but in the instant case, the transaction occurred in Hongkong.

Case dismissed. The instant complaint not the proper action.

SO ORDERED. 5

Petitioner filed a motion for the reconsideration of said order but it was denied for lack of merit. 6 Hence, the instant petition for certiorari seeking the reversal of said orders "so as to allow petitioner to enforce through the court below its claims against private respondent as recognized by the Supreme Court of Hongkong." 7

Petitioner asserts that the lower court gravely abused its discretion in: (a) holding that the complaint was not the proper action for purposes of collecting the amount guaranteed by Chin San "as recognized and adjudged by the Supreme Court of Hongkong;" (b) interpreting Section 14 of the General Banking Act as precluding petitioner from maintaining a suit before Philippine courts because it is a foreign corporation not licensed to do business in the Philippines despite the fact that it does not do business here; and (c) impliedly sustaining private respondent's allegation of improper venue.

We need not detain ourselves on the issue of improper venue. Suffice it to state that private respondent waived his right to invoke it when he forthwith filed his answer to the complaint thereby necessarily implying submission to the jurisdiction of the court. 8

The resolution of this petition hinges on a determination of whether petitioner foreign banking corporation has the capacity to file the action below.

Private respondent correctly contends that since petitioner is a bank, its capacity to file an action in this jurisdiction is governed by the General Banking Act (Republic Act No. 337), particularly Section 14 thereof which provides:

SEC. 14. No foreign bank or banking corporation formed, organized or existing under any laws other than those of the Republic of the Philippines shall be permitted to transact business in the Philippines, or maintain by itself or assignee any suit for the recovery of any debt, claims, or demand whatsoever, until after it shall have obtained, upon order of the Monetary Board, a license for that purpose from the Securities and Exchange Commissioner. Any officer, director or agent of any such corporation who transacts business in the Philippines without the said license shall be punished by imprisonment for not less than one year nor more than ten years and by a fine of not less than one thousand pesos nor more than ten thousand pesos. (45 O.G. No. 4, 1647, 1649-1650)

In construing this provision, we adhere to the interpretation given by this Court to the almost identical Section 69 of the old Corporation Law (Act No. 1459) which reads:

SEC. 69. No foreign corporation or corporation formed, organized, or existing under any laws other than those of the Philippines shall be permitted to transact business in the Philippines or maintain by itself or assignee any suit for the recovery of any debt, claim, or demand whatever, unless it shall have the license prescribed in the section immediately preceding. Any officer, director or agent of the corporation or any person transacting business for any foreign corporation not having the license prescribed shall be punished by


imprisonment for not less than six months nor more than two years or by a fine of not less than two hundred pesos nor more than one thousand pesos, or by both such imprisonment and fine, in the discretion of the Court.

In a long line of cases, this Court has interpreted this last quoted provision as not altogether prohibiting a foreign corporation not licensed to do business in the Philippines from suing or maintaining an action in Philippine courts. 9

What it seeks to prevent is a foreign corporation doing business in the Philippines without a license from gaining access to Philippine courts. As elucidated in Marshall-Wells Co. vs. Elser & Co., 46 Phil. 70:

The object of the statute was to subject the foreign corporation doing business in the Philippines to the jurisdiction of its courts. The object of the statute was not to prevent it from performing single acts but to prevent it from acquiring a domicile for the purpose of business without taking the steps necessary to render it amenable to suit in the local courts. The implication of the law is that it was never the purpose of the Legislature to exclude a foreign corporation which happens to obtain an isolated order for business from the Philippines from securing redress from Philippine courts, and thus, in effect, to permit persons to avoid their contract made with such foreign corporation. The effect of the statute preventing foreign corporations from doing business and from bringing actions in the local courts, except on compliance with elaborate requirements, must not be unduly extended or improperly applied. It should not be construed to extend beyond the plain meaning of its terms, considered in connection with its object, and in connection with the spirit of the entire law.

The fairly recent case of Universal Shipping Lines vs. Intermediate Appellate Court, 10 although dealing with the amended version of Section 69 of the old Corporation Law, Section 133 of the Corporation Code (Batas Pambansa Blg. 68), but which is nonetheless apropos, states the rule succinctly: "it is not the lack of the prescribed license (to do business in the Philippines) but doing business without license, which bars a foreign corporation from access to our courts."

Thus, we have ruled that a foreign corporation not licensed to do business in the Philippines may file a suit in this country due to the collision of two vessels at the

harbor of Manila 11 and for the loss of goods bound for Hongkong but erroneously discharged in Manila. 12

Indeed, the phraseologies of Section 14 of the General Banking Act and its almost identical counterpart Section 69 of the old Corporation Law are misleading in that they seem to require a foreign corporation, including a foreign bank or banking corporation, not licensed to do business and not doing business in the Philippines to secure a license from the Securities and Exchange Commission before it can bring or maintain an action in Philippine courts. To avert such misimpression, Section 133 of the Corporation Code is now more plainly worded thus:

No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines.

Under this provision, we have ruled that a foreign corporation may sue in this jurisdiction for infringement of trademark and unfair competition although it is not doing business in the Philippines 13 because the Philippines was a party to the Convention of the Union of Paris for the Protection of IndustrialProperty. 14

We even went further to say that a foreign corporation not licensed to do business in the Philippines may not be denied the right to file an action in our courts for an isolated transaction in this country. 15

Since petitioner foreign banking corporation was not doing business in the Philippines, it may not be denied the privilege of pursuing its claims against private respondent for a contract which was entered into and consummated outside the Philippines. Otherwise we will be hampering the growth and development of business relations between Filipino citizens and foreign nationals. Worse, we will be allowing the law to serve as a protective shield for unscrupulous Filipino citizens who have business relationships abroad.

In its pleadings before the court, petitioner appears to be in a quandary as to whether the suit below is one for enforcement or recognition of the Hongkong judgment. Its complaint states:

COMES NOW Plaintiff, by undersigned counsel, and to this Honorable Court, most respectfully alleges that:

1. Plaintiff is a corporation duly organized and existing under and by virtue of the laws of Hongkong with


business and postal address at the 3rd Floor, United Centre, 95 Queensway, Hongkong, not doing business in the Philippines, but is suing for this isolated transaction, but for purposes of this complaint may be served with summons and legal processes of this Honorable Court, at the 6th Floor, Cibeles Building, 6780 Ayala Avenue, Makati, Metro Manila, while defendant Cordova Chin San, may be served with summons and other legal processes of this Honorable Court at the Municipality of Moncada, Province of Tarlac, Philippines;

2. On July 18, 1979 and July 25, 1980, the defendant executed Continuing Guarantees, in consideration of plaintiff's from time to time making advances, or coming to liability or discounting bills or otherwise giving credit or granting banking facilities from time to time to, or on account of the Wolder Enterprises (sic), photocopies of the Contract of Continuing Guarantees are hereto attached as Annexes "A" and "B", respectively, and made parts hereof;

3. In June 1984, a complaint was filed by plaintiff against the Wolder Enterprises (sic) and defendant Cordova Chin San, in The Supreme Court of Hongkong, under Case No. 3176, and pursuant to which complaint, a judgment dated 14th day of July, 1984 was rendered by The Supreme Court of Hongkong ordering to (sic) defendant Cordova Chin San to pay the plaintiff the sum of HK$279,325.00 together with interest on the principal sum of HK$250,000.00 at the rate of HK$1.7% per month or (HK$141.67) per day from 4th May, 1984 up to the date the said amount is paid in full, and to pay the sum of HK$970.00 as fixed cost, a photocopy of the Judgment rendered by The Supreme Court of Hongkong is hereto attached as Annex "C" and made an integral part hereof.

4. Plaintiff has made demands upon the defendant in this case to pay the aforesaid amount the last of which is by letter dated July 16, 1984 sent by undersigned counsel, a photocopy of the letter of demand is hereto attached as Annex "D" and the Registry Return Card hereto attached as Annex "E",

respectively, and made parts hereof. However, this notwithstanding, defendant failed and refused and still continue to fail and refuse to make any payment to plaintiff on the aforesaid amount of HK$279,325.00 plus interest on the principal sum of HK$250,000.00 at the rate of (HK$141.67) per day from May 4, 1984 up to the date of payment;

5. In order to protect and safeguard the rights and interests of herein plaintiff, it has engaged the services of undersigned counsel, to file the suit at bar, and for whose services it has agreed to pay an amount equivalent to 25% of the total amount due and owing, as of and by way of attorney's fees plus costs of suit.

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that judgment be rendered ordering the defendant:

a) To pay plaintiff the sum of HK$279,325.00 together with interest on the principal sum of HK$260,000.00 at the rate of HK$1.7% (sic) per month (or HK$141.67 per day) from May 4, 1984 until the aforesaid amount is paid in full;

b) To pay an amount equivalent to 25% of the total amount due and demandable as of and by way of attorney's fees; and

c) To pay costs of suit, and

Plaintiff prays for such other and further reliefs, to which it may by law and equity, be entitled. 16

The complaint therefore appears to be one of the enforcement of the Hongkong judgment because it prays for the grant of the affirmative relief given by said foreign judgment. 17 Although petitioner asserts that it is merely seeking the recognition of its claims based on the contract sued upon and not the enforcement of the Hongkong judgment 18 it should be noted that in the prayer of the complaint, petitioner simply copied the Hongkong judgment with respect to private respondent's liability.

However, a foreign judgment may not be enforced if it is not recognized in the jurisdiction where affirmative relief is being sought. Hence, in the interest of justice, the


complaint should be considered as a petition for the recognition of the Hongkong judgment under Section 50 (b), Rule 39 of the Rules of Court in order that the defendant, private respondent herein, may present evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of fact and law, if applicable.

WHEREFORE, the questioned orders of the lower court are hereby set aside. Civil Case No. 8762 is reinstated and the lower court is directed to proceed with dispatch in the disposition of said case. This decision is immediately executory. No costs.

SO ORDERED.

BELLIS v. BELLIS20 SCRA 358

FACTS Mr. Bellis was a citizen and resident of Texas at the time of his death. He had five (5) legitimate children with his first wife, Mary Mallen, whom he divorced. He had three (3) legitimate daughters with his second wife, Violet, who survived him, and another three (3) illegitimate children with another woman. Before he died, he executed two (2) wills, disposing of his Texas properties, the other disposing his Philippine properties. In both wills, he recognized his illegitimate children but they were not given anything. Under Texas law, there are no compulsory heirs or legitime reserved to illegitimate children.

Naturally, the illegitimate children, Maria Cristina and Merriam Palma, opposed the wills on the ground that they were deprived of their legitime as illegitimate children. Under Philippine law, they are entitled to inherit even if they are illegitimate children. They claim that Philippine law should be applied.


ISSUE What law should be applied, the Philippine law or the Texas law? May the illegitimate daughters inherit?

HELDWhat applies is the Texas law. Mr. Bellis is a national and domicile of Texas at the time of his death. Hence, both the intrinsic validity of the will (substance or successional rights) and the extrinsic validity (forms of the will) are governed by Texas law. Since under Texas law, the decedent may dispose of his property as he wishes, the Will should be respected. The illegitimate daughters are not entitled to any legitime.

Assuming that Texas law is in conflict of law rule providing that the domiciliary system (law of domicile) should govern, the same should not result in a reference back (renvoi) to the Philippine law since Mr. Bellis was both a national and domicile of Texas at the time of his death. Nonetheless, if Texas law has a conflict rule, renvoi would not arise, since the properties covered by the second will are found in the Philippines. The renvoi doctrine applied in the case of Aznar v. Garcia cannot be applied since said doctrine is pertinent where the decedent is a national of one country and domiciliary of another country. Moreover, it has been pointed out that the decedent executed two (2) wills- one to govern his Texas properties and the other his Philippine estate; the latter being the basis of the argument of illegitimate children that he intended Philippine law to govern. Assuming that such was the intention of the decedent in executing a separate Philippine will, it would not alter the law. As rule in Miciano v. Brimo, a provision of foreigner’s will to the effect that his properties shall be distributed in accordance with Philippine law and not with the national law, is illegal and void, for his national law cannot be ignored.


Manila

EN BANC

G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased. PEOPLE'S BANK and TRUST COMPANY, executor. MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants, vs.EDWARD A. BELLIS, ET AL., heirs-appellees.

Vicente R. Macasaet and Jose D. Villena for oppositors appellants.Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.J. R. Balonkita for appellee People's Bank & Trust Company.Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J.:


This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First Instance of Manila dated April 30, 1964, approving the project of partition filed by the executor in Civil Case No. 37089 therein.1äwphï1.ñët

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By his first wife, Mary E. Mallen, whom he divorced, he had five legitimate children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he had three legitimate children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis.

On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that after all taxes, obligations, and expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner: (a) $240,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two items have been satisfied, the remainder shall go to his seven surviving children by his first and second wives, namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A. His will was admitted to probate in the Court of First Instance of Manila on September 15, 1958.

The People's Bank and Trust Company, as executor of the will, paid all the bequests therein including the amount of $240,000.00 in the form of shares of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts totalling P40,000.00 each in satisfaction of their respective legacies, or a total of P120,000.00, which it released from time to time according as the lower court approved and allowed the various motions or petitions filed by the latter three requesting partial advances on account of their respective legacies.

On January 8, 1964, preparatory to closing its administration, the executor submitted and filed its "Executor's Final Account, Report of Administration and Project of Partition" wherein it reported, inter alia, the satisfaction of the legacy of Mary E. Mallen by the delivery to her of shares of stock amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria

Cristina Bellis and Miriam Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In the project of partition, the executor — pursuant to the "Twelfth" clause of the testator's Last Will and Testament — divided the residuary estate into seven equal portions for the benefit of the testator's seven legitimate children by his first and second marriages.

On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions to the project of partition on the ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased.

Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is evidenced by the registry receipt submitted on April 27, 1964 by the executor.1

After the parties filed their respective memoranda and other pertinent pleadings, the lower court, on April 30, 1964, issued an order overruling the oppositions and approving the executor's final account, report and administration and project of partition. Relying upon Art. 16 of the Civil Code, it applied the national law of the decedent, which in this case is Texas law, which did not provide for legitimes.

Their respective motions for reconsideration having been denied by the lower court on June 11, 1964, oppositors-appellants appealed to this Court to raise the issue of which law must apply — Texas law or Philippine law.

In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent where the decedent is a national of one country, and a domicile of another. In the present case, it is not disputed that the decedent was both a national of Texas and a domicile thereof at the time of his death.2 So that even assuming Texas has a conflict of law rule providing that the domiciliary system (law of the domicile) should govern, the same would not result in a reference back (renvoi) to Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling for the application of the law of the place where the properties are situated, renvoi would arise, since the properties here involved are found in the Philippines. In the absence, however, of proof as to the conflict of law rule of Texas, it should not be presumed different from ours.3 Appellants' position is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even mentioned it in their arguments. Rather, they argue that their case falls under the circumstances mentioned in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in intestate


or testamentary successions, with regard to four items: (a) the order of succession; (b) the amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the capacity to succeed. They provide that —

ART. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may he the nature of the property and regardless of the country wherein said property may be found.

ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.

Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that —

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 by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct. Precisely, Congress deleted the phrase, "notwithstanding the provisions of this and the next preceding article" when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while reproducing without substantial change the second paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must have been their purpose to make the second paragraph of Art. 16 a specific provision in itself which must be applied in testate and intestate succession. As further indication of this legislative intent, Congress added a new provision, under Art. 1039, which decrees that capacity to succeed is to be governed by the national law of the decedent.

It is therefore evident that whatever public policy or good customs may be involved in our System of legitimes, Congress has not intended to extend the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to the decedent's national law. Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two wills — one to govern his Texas estate and

the other his Philippine estate — arguing from this that he intended Philippine law to govern his Philippine estate. Assuming that such was the decedent's intention in executing a separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to the effect that his properties shall be distributed in accordance with Philippine law and not with his national law, is illegal and void, for his national law cannot be ignored in regard to those matters that Article 10 — now Article 16 — of the Civil Code states said national law should govern.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of the provision of the will and the amount of successional rights are to be determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with costs against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.

MICIANO v. BRIMOGR No.L-22595, November 1, 1927

50 PHIL 867

FACTS: Joseph Brimo, a Turkish national, died leaving a will which one of the clauses states that the law of the Philippines shall govern the partition and not the law of his nationality, and that legatees have to respect the will, otherwise the dispositions accruing to them shall be annulled. By virtue of such condition, his brother, Andre Brimo, an instituted heir was thus excluded because, by his action of having opposed the partition scheme, he did not respect the will. Andre sued contending that the conditions are void being contrary to law which provides that the will shall be probated according to the laws of the nationality of the decedent.

ISSUE: Is the condition as set by the testator valid?

HELD: No. A foreigner's will to the effect that his properties shall be distributed in accordance with Philippine law and not with his national law, is illegal and void, for his national law cannot be ignored in regard to those matters that Article 10 of the Civil Code states said national law should govern. Said condition then, in the light of the legal provisions above cited, is considered


unwritten, and the institution of legatees in said will is unconditional and consequently valid and effective even as to the herein oppositor. ____________________________________________________

FACTS:

A will of an American testator provided that his estate should be disposed of in accordance with the Philippine law. The testator further provided that whoever would oppose his wishes that his estate should be distributed in accordance with Philippine laws would forfeit their inheritance

ISSUE:

Will there be forfeiture?

HELD:

Even if the testator’s wishes must be given paramount importance, if the wishes of the testator contravene a specific provision of law, then that provision in a will should not be given effect. A person’s will is merely an instrument which is PERMITTED, so his right is not absolute. It should be subject to the provisions of the Philippine laws.

The estate of a decedent shall be distributed in accordance with his national law. He cannot provide otherwise.

The SC held that those who opposed would not forfeit their inheritance because that provision is not legal.


Manila

EN BANC

G.R. No. L-22595 November 1, 1927

Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator, petitioner-appellee, vs.ANDRE BRIMO, opponent-appellant.

Ross, Lawrence and Selph for appellant.Camus and Delgado for appellee.

ROMUALDEZ, J.:

The partition of the estate left by the deceased Joseph G. Brimo is in question in this case.

The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the brothers of the deceased, opposed it. The court, however, approved it.

The errors which the oppositor-appellant assigns are:


(1) The approval of said scheme of partition; (2) denial of his participation in the inheritance; (3) the denial of the motion for reconsideration of the order approving the partition; (4) the approval of the purchase made by the Pietro Lana of the deceased's business and the deed of transfer of said business; and (5) the declaration that the Turkish laws are impertinent to this cause, and the failure not to postpone the approval of the scheme of partition and the delivery of the deceased's business to Pietro Lanza until the receipt of the depositions requested in reference to the Turkish laws.

The appellant's opposition is based on the fact that the partition in question puts into effect the provisions of Joseph G. Brimo's will which are not in accordance with the laws of his Turkish nationality, for which reason they are void as being in violation or article 10 of the Civil Code which, among other things, provides the following:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the amount of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property or the country in which it may be situated.

But the fact is that the oppositor did not prove that said testimentary dispositions are not in accordance with the Turkish laws, inasmuch as he did not present any evidence showing what the Turkish laws are on the matter, and in the absence of evidence on such laws, they are presumed to be the same as those of the Philippines. (Lim and Lim vs. Collector of Customs, 36 Phil., 472.)

It has not been proved in these proceedings what the Turkish laws are. He, himself, acknowledges it when he desires to be given an opportunity to present evidence on this point; so much so that he assigns as an error of the court in not having deferred the approval of the scheme of partition until the receipt of certain testimony requested regarding the Turkish laws on the matter.

The refusal to give the oppositor another opportunity to prove such laws does not constitute an error. It is discretionary with the trial court, and, taking into consideration that the oppositor was granted ample opportunity to introduce competent evidence, we find no abuse of discretion on the part of the court in this particular. There is, therefore, no evidence in the record that the national law of the testator Joseph G. Brimo was violated in the testamentary dispositions in question which, not being contrary to our laws in force, must be complied with and executed. lawphil.net

Therefore, the approval of the scheme of partition in this respect was not erroneous.

In regard to the first assignment of error which deals with the exclusion of the herein appellant as a legatee, inasmuch as he is one of the persons designated as such in will, it must be taken into consideration that such exclusion is based on the last part of the second clause of the will, which says:

Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship having been conferred upon me by conquest and not by free choice, nor by nationality and, on the other hand, having resided for a considerable length of time in the Philippine Islands where I succeeded in acquiring all of the property that I now possess, it is my wish that the distribution of my property and everything in connection with this, my will, be made and disposed of in accordance with the laws in force in the Philippine islands, requesting all of my relatives to respect this wish, otherwise, I annul and cancel beforehand whatever disposition found in this will favorable to the person or persons who fail to comply with this request.

The institution of legatees in this will is conditional, and the condition is that the instituted legatees must respect the testator's will to distribute his property, not in accordance with the laws of his nationality, but in accordance with the laws of the Philippines.

If this condition as it is expressed were legal and valid, any legatee who fails to comply with it, as the herein oppositor who, by his attitude in these proceedings has not respected the will of the testator, as expressed, is prevented from receiving his legacy.

The fact is, however, that the said condition is void, being contrary to law, for article 792 of the civil Code provides the following:

Impossible conditions and those contrary to law or good morals shall be considered as not imposed and shall not prejudice the heir or legatee in any manner whatsoever, even should the testator otherwise provide.

And said condition is contrary to law because it expressly ignores the testator's national law when, according to article 10 of the civil Code above quoted, such national law of the testator is the one to govern his testamentary dispositions.

Said condition then, in the light of the legal provisions above cited, is considered unwritten, and the institution


of legatees in said will is unconditional and consequently valid and effective even as to the herein oppositor.

It results from all this that the second clause of the will regarding the law which shall govern it, and to the condition imposed upon the legatees, is null and void, being contrary to law.

All of the remaining clauses of said will with all their dispositions and requests are perfectly valid and effective it not appearing that said clauses are contrary to the testator's national law.

Therefore, the orders appealed from are modified and it is directed that the distribution of this estate be made in such a manner as to include the herein appellant Andre Brimo as one of the legatees, and the scheme of partition submitted by the judicial administrator is approved in all other respects, without any pronouncement as to costs.

So ordered.

AZNAR VS. GARCIAG.R. No. L-16749 January 31, 1963

7 SCRA 95 – Civil Law – Application of Laws – Foreign Law – Nationality Principle – Internal and Conflict Rule

Application of the Renvoi Doctrine

Edward Christensen was born in New York but he migrated to California where he resided for a period of 9 years. In 1913, he came to the Philippines where he became a domiciliary until his death. In his will, he instituted an acknowledged natural daughter, Maria Lucy Christensen (legitimate), as his only heir, but left a legacy sum of money in favor of Helen Christensen Garcia (illegitimate). Adolfo Aznar was the executor of the estate. Counsel for Helen claims that under Article 16, paragraph 2 of the Civil Code, California law should be applied; that under California law, the matter is referred back to the law of the domicile. On the other hand, counsel for Maria, averred that the national law of the deceased must apply, illegitimate children not being entitled to anything under California law.


ISSUE: Whether or not the national law of the deceased should be applied in determining the successional rights of his heirs.

HELD: The Supreme Court deciding to grant more successional rights to Helen said in effect that there are two rules in California on the matter; the internal law which applies to Californians domiciled in California and the conflict rule for Californians domiciled outside of California. Christensen being domiciled in the Philippines, the law of his domicile must be followed. The case was remanded to the lower court for further proceedings – the determination of the successional rights under Philippine law only.

____________________________________________________

Facts: Edward S. Christensen, though born in New York, migrated to California where he resided and consequently was considered a California Citizen for a period of nine years to 1913. He came to the Philippines where he became a domiciliary until the time of his death. However, during the entire period of his residence in this country, he had always considered himself as a citizen of California.

In his will, executed on March 5, 1951, he instituted an acknowledged natural daughter, Maria Lucy Christensen as his only heir but left a legacy of some money in favor of Helen Christensen Garcia who, in a decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his. Counsel of Helen claims that under Art. 16 (2) of the civil code, California law should be applied, the matter is returned back to the law of domicile, that Philippine law is ultimately applicable, that the share of Helen must be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand, counsel for daughter Maria , in as much that it is clear under Art, 16 (2) of the Mew Civil Code, the national of the deceased must apply, our courts must apply internal law of California on the matter. Under California law, there are no compulsory heirs and consequently a testator should dispose any property possessed by him in absolute dominion.

Issue: Whether Philippine Law or California Law should apply.

Held: The Supreme Court deciding to grant more successional rights to Helen Christensen Garcia said in effect that there be two rules in California on the matter.

1. The conflict rule which should apply to Californian’s outside the California, and

2. The internal Law which should apply to California domiciles in califronia.

The California conflict rule, found on Art. 946 of the California Civil code States that “if there is no law to the contrary in the place where personal property is

situated, it is deemed to follow the decree of its owner and is governed by the law of the domicile.”

Christensen being domiciled outside california, the law of his domicile, the Philippines is ought to be followed.

Wherefore, the decision appealed is reversed and case is remanded to the lower court with instructions that partition be made as that of the Philippine law provides.

Aznar v. Garcia - Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as the national law is the internal law of California. But as above explained the laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Reason demands that We should enforce the California internal law prescribed for its citizens residing therein, and enforce the conflict of laws rules for the citizens domiciled abroad. If we must enforce the law of California as in comity we are bound to go, as so declared in Article 16 of our Civil Code, then we must enforce the law of California in accordance with the express mandate thereof and as above explained, i.e., apply the internal law for residents therein, and its conflict-of-laws rule for those domiciled abroad. x x x We therefore find that as the domicile of the deceased Christensen, a citizen of California, is the Philippines, the validity of the provisions of his will depriving his acknowledged natural child, the appellant, should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of California, not by the internal law of California.


Manila

EN BANC

G.R. No. L-16749 January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED. ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased, Executor and Heir-appellees, vs.HELEN CHRISTENSEN GARCIA, oppositor-appellant.

M. R. Sotelo for executor and heir-appellees.Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.

LABRADOR, J.:


This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, dated September 14, 1949, approving among things the final accounts of the executor, directing the executor to reimburse Maria Lucy Christensen the amount of P3,600 paid by her to Helen Christensen Garcia as her legacy, and declaring Maria Lucy Christensen entitled to the residue of the property to be enjoyed during her lifetime, and in case of death without issue, one-half of said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in accordance with the provisions of the will of the testator Edward E. Christensen. The will was executed in Manila on March 5, 1951 and contains the following provisions:

3. I declare ... that I have but ONE (1) child, named MARIA LUCY CHRISTENSEN (now Mrs. Bernard Daney), who was born in the Philippines about twenty-eight years ago, and who is now residing at No. 665 Rodger Young Village, Los Angeles, California, U.S.A.

4. I further declare that I now have no living ascendants, and no descendants except my above named daughter, MARIA LUCY CHRISTENSEN DANEY.

x x x x x x x x x

7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now married to Eduardo Garcia, about eighteen years of age and who, notwithstanding the fact that she was baptized Christensen, is not in any way related to me, nor has she been at any time adopted by me, and who, from all information I have now resides in Egpit, Digos, Davao, Philippines, the sum of THREE THOUSAND SIX HUNDRED PESOS (P3,600.00), Philippine Currency the same to be deposited in trust for the said Maria Helen Christensen with the Davao Branch of the Philippine National Bank, and paid to her at the rate of One Hundred Pesos (P100.00), Philippine Currency per month until the principal thereof as well as any interest which may have accrued thereon, is exhausted..

x x x x x x x x x

12. I hereby give, devise and bequeath, unto my well-beloved daughter, the said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing as aforesaid at No. 665 Rodger Young Village, Los Angeles, California, U.S.A., all the income from the rest, remainder, and residue of my property and estate, real, personal and/or mixed, of whatsoever kind or character, and wheresoever situated, of which I may be

possessed at my death and which may have come to me from any source whatsoever, during her lifetime: ....

It is in accordance with the above-quoted provisions that the executor in his final account and project of partition ratified the payment of only P3,600 to Helen Christensen Garcia and proposed that the residue of the estate be transferred to his daughter, Maria Lucy Christensen.

Opposition to the approval of the project of partition was filed by Helen Christensen Garcia, insofar as it deprives her (Helen) of her legitime as an acknowledged natural child, she having been declared by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the deceased Edward E. Christensen. The legal grounds of opposition are (a) that the distribution should be governed by the laws of the Philippines, and (b) that said order of distribution is contrary thereto insofar as it denies to Helen Christensen, one of two acknowledged natural children, one-half of the estate in full ownership. In amplification of the above grounds it was alleged that the law that should govern the estate of the deceased Christensen should not be the internal law of California alone, but the entire law thereof because several foreign elements are involved, that the forum is the Philippines and even if the case were decided in California, Section 946 of the California Civil Code, which requires that the domicile of the decedent should apply, should be applicable. It was also alleged that Maria Helen Christensen having been declared an acknowledged natural child of the decedent, she is deemed for all purposes legitimate from the time of her birth.

The court below ruled that as Edward E. Christensen was a citizen of the United States and of the State of California at the time of his death, the successional rights and intrinsic validity of the provisions in his will are to be governed by the law of California, in accordance with which a testator has the right to dispose of his property in the way he desires, because the right of absolute dominion over his property is sacred and inviolable (In re McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor Maria Helen Christensen, through counsel, filed various motions for reconsideration, but these were denied. Hence, this appeal.

The most important assignments of error are as follows:

I

THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER JUST SHARE IN THE INHERITANCE.


II

THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL LAW.

III

THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE DISTRIBUTION OF THE ESTATE OF THE DECEASED EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES.

IV

THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS.

V

THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE IN FULL OWNERSHIP.

There is no question that Edward E. Christensen was a citizen of the United States and of the State of California at the time of his death. But there is also no question that at the time of his death he was domiciled in the Philippines, as witness the following facts admitted by the executor himself in appellee's brief:

In the proceedings for admission of the will to probate, the facts of record show that the deceased Edward E. Christensen was born on November 29, 1875 in New York City, N.Y., U.S.A.; his first arrival in the Philippines, as an appointed school teacher, was on July 1, 1901, on board the U.S. Army Transport "Sheridan" with Port of Embarkation as the City of San Francisco, in the State of California, U.S.A. He stayed in the Philippines until 1904.

In December, 1904, Mr. Christensen returned to the United States and stayed there for the following nine years until 1913, during which time he resided in, and was teaching school in Sacramento, California.

Mr. Christensen's next arrival in the Philippines was in July of the year 1913. However, in 1928, he again departed the Philippines for the United

States and came back here the following year, 1929. Some nine years later, in 1938, he again returned to his own country, and came back to the Philippines the following year, 1939.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët

Being an American citizen, Mr. Christensen was interned by the Japanese Military Forces in the Philippines during World War II. Upon liberation, in April 1945, he left for the United States but returned to the Philippines in December, 1945. Appellees Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)

In April, 1951, Edward E. Christensen returned once more to California shortly after the making of his last will and testament (now in question herein) which he executed at his lawyers' offices in Manila on March 5, 1951. He died at the St. Luke's Hospital in the City of Manila on April 30, 1953. (pp. 2-3)

In arriving at the conclusion that the domicile of the deceased is the Philippines, we are persuaded by the fact that he was born in New York, migrated to California and resided there for nine years, and since he came to the Philippines in 1913 he returned to California very rarely and only for short visits (perhaps to relatives), and considering that he appears never to have owned or acquired a home or properties in that state, which would indicate that he would ultimately abandon the Philippines and make home in the State of California.

Sec. 16. Residence is a term used with many shades of meaning from mere temporary presence to the most permanent abode. Generally, however, it is used to denote something more than mere physical presence. (Goodrich on Conflict of Laws, p. 29)

As to his citizenship, however, We find that the citizenship that he acquired in California when he resided in Sacramento, California from 1904 to 1913, was never lost by his stay in the Philippines, for the latter was a territory of the United States (not a state) until 1946 and the deceased appears to have considered himself as a citizen of California by the fact that when he executed his will in 1951 he declared that he was a citizen of that State; so that he appears never to have intended to abandon his California citizenship by acquiring another.


This conclusion is in accordance with the following principle expounded by Goodrich in his Conflict of Laws.

The terms "'residence" and "domicile" might well be taken to mean the same thing, a place of permanent abode. But domicile, as has been shown, has acquired a technical meaning. Thus one may be domiciled in a place where he has never been. And he may reside in a place where he has no domicile. The man with two homes, between which he divides his time, certainly resides in each one, while living in it. But if he went on business which would require his presence for several weeks or months, he might properly be said to have sufficient connection with the place to be called a resident. It is clear, however, that, if he treated his settlement as continuing only for the particular business in hand, not giving up his former "home," he could not be a domiciled New Yorker. Acquisition of a domicile of choice requires the exercise of intention as well as physical presence. "Residence simply requires bodily presence of an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile." Residence, however, is a term used with many shades of meaning, from the merest temporary presence to the most permanent abode, and it is not safe to insist that any one use et the only proper one. (Goodrich, p. 29)

The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows:

ART. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found.

The application of this article in the case at bar requires the determination of the meaning of the term "national law" is used therein.

There is no single American law governing the validity of testamentary provisions in the United States, each state of the Union having its own private law applicable to its citizens only and in force only within the state. The "national law" indicated in Article 16 of the Civil Code

above quoted can not, therefore, possibly mean or apply to any general American law. So it can refer to no other than the private law of the State of California.

The next question is: What is the law in California governing the disposition of personal property? The decision of the court below, sustains the contention of the executor-appellee that under the California Probate Code, a testator may dispose of his property by will in the form and manner he desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant invokes the provisions of Article 946 of the Civil Code of California, which is as follows:

If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile.

The existence of this provision is alleged in appellant's opposition and is not denied. We have checked it in the California Civil Code and it is there. Appellee, on the other hand, relies on the case cited in the decision and testified to by a witness. (Only the case of Kaufman is correctly cited.) It is argued on executor's behalf that as the deceased Christensen was a citizen of the State of California, the internal law thereof, which is that given in the abovecited case, should govern the determination of the validity of the testamentary provisions of Christensen's will, such law being in force in the State of California of which Christensen was a citizen. Appellant, on the other hand, insists that Article 946 should be applicable, and in accordance therewith and following the doctrine of the renvoi, the question of the validity of the testamentary provision in question should be referred back to the law of the decedent's domicile, which is the Philippines.

The theory of doctrine of renvoi has been defined by various authors, thus:

The problem has been stated in this way: "When the Conflict of Laws rule of the forum refers a jural matter to a foreign law for decision, is the reference to the purely internal rules of law of the foreign system; i.e., to the totality of the foreign law minus its Conflict of Laws rules?"

On logic, the solution is not an easy one. The Michigan court chose to accept the renvoi, that is, applied the Conflict of Laws rule of Illinois which referred the matter back to Michigan law. But once having determined the the Conflict of Laws principle is the rule looked to, it is difficult to see why the reference back should not have been to Michigan Conflict of Laws. This would have resulted in the "endless chain of references" which has so often been criticized be legal writers. The opponents of the renvoi would


have looked merely to the internal law of Illinois, thus rejecting the renvoi or the reference back. Yet there seems no compelling logical reason why the original reference should be the internal law rather than to the Conflict of Laws rule. It is true that such a solution avoids going on a merry-go-round, but those who have accepted the renvoi theory avoid this inextricabilis circulas by getting off at the second reference and at that point applying internal law. Perhaps the opponents of the renvoi are a bit more consistent for they look always to internal law as the rule of reference.

Strangely enough, both the advocates for and the objectors to the renvoi plead that greater uniformity will result from adoption of their respective views. And still more strange is the fact that the only way to achieve uniformity in this choice-of-law problem is if in the dispute the two states whose laws form the legal basis of the litigation disagree as to whether the renvoi should be accepted. If both reject, or both accept the doctrine, the result of the litigation will vary with the choice of the forum. In the case stated above, had the Michigan court rejected the renvoi, judgment would have been against the woman; if the suit had been brought in the Illinois courts, and they too rejected the renvoi, judgment would be for the woman. The same result would happen, though the courts would switch with respect to which would hold liability, if both courts accepted the renvoi.

The Restatement accepts the renvoi theory in two instances: where the title to land is in question, and where the validity of a decree of divorce is challenged. In these cases the Conflict of Laws rule of the situs of the land, or the domicile of the parties in the divorce case, is applied by the forum, but any further reference goes only to the internal law. Thus, a person's title to land, recognized by the situs, will be recognized by every court; and every divorce, valid by the domicile of the parties, will be valid everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)

X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving movable property in Massachusetts, England, and France. The question arises as to how this property is to be distributed among X's next of kin.

Assume (1) that this question arises in a Massachusetts court. There the rule of the conflict of laws as to intestate succession to movables calls for an application of the law of the deceased's last domicile. Since by

hypothesis X's last domicile was France, the natural thing for the Massachusetts court to do would be to turn to French statute of distributions, or whatever corresponds thereto in French law, and decree a distribution accordingly. An examination of French law, however, would show that if a French court were called upon to determine how this property should be distributed, it would refer the distribution to the national law of the deceased, thus applying the Massachusetts statute of distributions. So on the surface of things the Massachusetts court has open to it alternative course of action: (a) either to apply the French law is to intestate succession, or (b) to resolve itself into a French court and apply the Massachusetts statute of distributions, on the assumption that this is what a French court would do. If it accepts the so-called renvoi doctrine, it will follow the latter course, thus applying its own law.

This is one type of renvoi. A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back again to the law of the forum. This is renvoi in the narrower sense. The German term for this judicial process is 'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523-571.)

After a decision has been arrived at that a foreign law is to be resorted to as governing a particular case, the further question may arise: Are the rules as to the conflict of laws contained in such foreign law also to be resorted to? This is a question which, while it has been considered by the courts in but a few instances, has been the subject of frequent discussion by textwriters and essayists; and the doctrine involved has been descriptively designated by them as the "Renvoyer" to send back, or the "Ruchversweisung", or the "Weiterverweisung", since an affirmative answer to the question postulated and the operation of the adoption of the foreign law in toto would in many cases result in returning the main controversy to be decided according to the law of the forum. ... (16 C.J.S. 872.)

Another theory, known as the "doctrine of renvoi", has been advanced. The theory of the doctrine of renvoi is that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum. The doctrine of the renvoi has generally been


repudiated by the American authorities. (2 Am. Jur. 296)

The scope of the theory of renvoi has also been defined and the reasons for its application in a country explained by Prof. Lorenzen in an article in the Yale Law Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of the article are quoted herein below:

The recognition of the renvoi theory implies that the rules of the conflict of laws are to be understood as incorporating not only the ordinary or internal law of the foreign state or country, but its rules of the conflict of laws as well. According to this theory 'the law of a country' means the whole of its law.

x x x x x x x x x

Von Bar presented his views at the meeting of the Institute of International Law, at Neuchatel, in 1900, in the form of the following theses:

(1) Every court shall observe the law of its country as regards the application of foreign laws.

(2) Provided that no express provision to the contrary exists, the court shall respect:

(a) The provisions of a foreign law which disclaims the right to bind its nationals abroad as regards their personal statute, and desires that said personal statute shall be determined by the law of the domicile, or even by the law of the place where the act in question occurred.

(b) The decision of two or more foreign systems of law, provided it be certain that one of them is necessarily competent, which agree in attributing the determination of a question to the same system of law.

x x x x x x x x x

If, for example, the English law directs its judge to distribute the personal estate of an Englishman who has died domiciled in Belgium in accordance with the law of his domicile, he must first inquire whether the law of Belgium would distribute personal property upon death in accordance with the law of domicile, and if he finds that the Belgian law would make the distribution in accordance with the law of

nationality — that is the English law — he must accept this reference back to his own law.

We note that Article 946 of the California Civil Code is its conflict of laws rule, while the rule applied in In re Kaufman, Supra, its internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the principle cited In re Kaufman should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The rule laid down of resorting to the law of the domicile in the determination of matters with foreign element involved is in accord with the general principle of American law that the domiciliary law should govern in most matters or rights which follow the person of the owner.

When a man dies leaving personal property in one or more states, and leaves a will directing the manner of distribution of the property, the law of the state where he was domiciled at the time of his death will be looked to in deciding legal questions about the will, almost as completely as the law of situs is consulted in questions about the devise of land. It is logical that, since the domiciliary rules control devolution of the personal estate in case of intestate succession, the same rules should determine the validity of an attempted testamentary dispostion of the property. Here, also, it is not that the domiciliary has effect beyond the borders of the domiciliary state. The rules of the domicile are recognized as controlling by the Conflict of Laws rules at the situs property, and the reason for the recognition as in the case of intestate succession, is the general convenience of the doctrine. The New York court has said on the point: 'The general principle that a dispostiton of a personal property, valid at the domicile of the owner, is valid anywhere, is one of the universal application. It had its origin in that international comity which was one of the first fruits of civilization, and it this age, when business intercourse and the process of accumulating property take but little notice of boundary lines, the practical wisdom and justice of the rule is more apparent than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)

Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as the national law is the internal law of California. But as above explained the laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Reason demands that We should enforce the California internal law prescribed for its citizens residing therein, and enforce the conflict of laws rules for the citizens domiciled abroad. If we must


enforce the law of California as in comity we are bound to go, as so declared in Article 16 of our Civil Code, then we must enforce the law of California in accordance with the express mandate thereof and as above explained, i.e., apply the internal law for residents therein, and its conflict-of-laws rule for those domiciled abroad.

It is argued on appellees' behalf that the clause "if there is no law to the contrary in the place where the property is situated" in Sec. 946 of the California Civil Code refers to Article 16 of the Civil Code of the Philippines and that the law to the contrary in the Philippines is the provision in said Article 16 that the national law of the deceased should govern. This contention can not be sustained. As explained in the various authorities cited above the national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, the Philippines in the case at bar. The court of the domicile can not and should not refer the case back to California; such action would leave the issue incapable of determination because the case will then be like a football, tossed back and forth between the two states, between the country of which the decedent was a citizen and the country of his domicile. The Philippine court must apply its own law as directed in the conflict of laws rule of the state of the decedent, if the question has to be decided, especially as the application of the internal law of California provides no legitime for children while the Philippine law, Arts. 887(4) and 894, Civil Code of the Philippines, makes natural children legally acknowledged forced heirs of the parent recognizing them.

The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.) cited by appellees to support the decision can not possibly apply in the case at bar, for two important reasons, i.e., the subject in each case does not appear to be a citizen of a state in the United States but with domicile in the Philippines, and it does not appear in each case that there exists in the state of which the subject is a citizen, a law similar to or identical with Art. 946 of the California Civil Code.

We therefore find that as the domicile of the deceased Christensen, a citizen of California, is the Philippines, the validity of the provisions of his will depriving his acknowledged natural child, the appellant, should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of California, not by the internal law of California..

WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower court with instructions that the partition be made as the Philippine law on succession provides. Judgment reversed, with costs against appellees.

Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.Bengzon, C.J., took no part.

TESTATE ESTATE OF C. O. BOHANAN, PHILIPPINE TRUST CO., v. MAGDALENA C. BOHANAN, EDWARD

C. BOHANAN, and MARY LYDIA BOHANAN

G.R. No. L-12105 January 30, 1960

Doctrine: As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be governed by the national law of the testator provided that the law be evidenced in the court.

FACTS: Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922.

Decedent in this case gave out of the total estate (after deducting administration expenses) of


P211,639.33 in cash, his grandson P90,819.67 and one-half of all shares of stock of several mining companies and to his brother and sister the same amount. To his children he gave a legacy of only P6,000 each, or a total of P12,000.

The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions disposing of the estate in the manner above indicated, claiming that they have been deprived of the legitimate that the laws of the form concede to them.

Lower Court Ruling: Dismissed the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward Bohanan to the project of partition submitted by the executor and approving the said project.

The testator permanent residence or domicile in the United States depended upon his personal intent or desire, and he selected Nevada as his homicide and therefore at the time of his death, he was a citizen of that state.

Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and admits the same to probate.

ISSUES:

1. Whether Magdalena C. Bohanan can claim. NO2. Whether the testamentary dispositions,

especially those for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid NO.

RATIO: The court below had found that the testator and Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the court below had already found that there was no conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator.

Edward and Mary Lydia, who had received legacies in the amount of P6,000 each only, and, therefore, have not been given their shares in the estate which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator.

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly

provides that successional rights to personal property are to be earned by the national law of the person whose succession is in question.

In the proceedings for the probate of the will, it was found out and it was decided that the testator was a citizen of the State of Nevada because he had selected this as his domicile and his permanent residence. (See Decision dated April 24, 1950, supra). So the question at issue is whether the testementary dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will (Sec. 9905, Complied Nevada Laws of 1925, supra). The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules, which are as follows:

SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. . . . (Rule 123).

We have, however, consulted the records of the case in the court below and we have found that the foreign law was introduced in evidence by appellant's (herein) counsel as Exhibits "2".

In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition.


Manila

EN BANC

G.R. No. L-12105 January 30, 1960

TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-appellee, vs.MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA BOHANAN, oppositors-appellants.


Jose D. Cortes for appellants.Ohnick, Velilla and Balonkita for appellee.

LABRADOR, J.:

Appeal against an order of the Court of First Instance of Manila, Hon. Ramon San Jose, presiding, dismissing the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward Bohanan to the project of partition submitted by the executor and approving the said project.

On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding, admitted to probate a last will and testament of C. O. Bohanan, executed by him on April 23, 1944 in Manila. In the said order, the court made the following findings:

According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of that state, or at least a citizen of California where some of his properties are located. This contention in untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely temporary, and he continued and remained to be a citizen of the United States and of the state of his pertinent residence to spend the rest of his days in that state. His permanent residence or domicile in the United States depended upon his personal intent or desire, and he selected Nevada as his homicide and therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or permanent residence for him. That is his exclusive personal right.

Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking the prescribed oath, it may enter upon the execution and performance of its trust. (pp. 26-27, R.O.A.).

It does not appear that the order granting probate was ever questions on appeal. The executor filed a project of partition dated January 24, 1956, making, in accordance with the provisions of the will, the following adjudications: (1) one-half of the residuary estate, to the Farmers and Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the benefit of testator's grandson Edward George Bohanan, which consists of several mining companies; (2) the other half of the residuary estate to

the testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike. This consist in the same amount of cash and of shares of mining stock similar to those given to testator's grandson; (3) legacies of P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be paid in three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;

It will be seen from the above that out of the total estate (after deducting administration expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of all shares of stock of several mining companies and to his brother and sister the same amount. To his children he gave a legacy of only P6,000 each, or a total of P12,000.

The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions disposing of the estate in the manner above indicated, claiming that they have been deprived of the legitimate that the laws of the form concede to them.

The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should be entitled to received. The will has not given her any share in the estate left by the testator. It is argued that it was error for the trial court to have recognized the Reno divorce secured by the testator from his Filipino wife Magdalena C. Bohanan, and that said divorce should be declared a nullity in this jurisdiction, citing the case of Querubin vs. Querubin, 87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852, Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to recognize the claim of the widow on the ground that the laws of Nevada, of which the deceased was a citizen, allow him to dispose of all of his properties without requiring him to leave any portion of his estate to his wife. Section 9905 of Nevada Compiled Laws of 1925 provides:

Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her estate, real and personal, the same being chargeable with the payment of the testator's debts.

Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the testator's estafa had already been passed upon adversely against her in an order dated June 19, 1955, (pp. 155-159, Vol II Records, Court of First Instance), which had become final, as Magdalena C. Bohanan does not appear to have appealed therefrom to question its validity. On December 16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 from the funds of the estate, chargeable against her share in the conjugal property,


(See pp. 294-297, Vol. I, Record, Court of First Instance), and the court in its said error found that there exists no community property owned by the decedent and his former wife at the time the decree of divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact contained therein, i.e. that there was no community property acquired by the testator and Magdalena C. Bohanan during their converture.

Moreover, the court below had found that the testator and Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the court below had already found that there was no conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator.

The most important issue is the claim of the testator's children, Edward and Mary Lydia, who had received legacies in the amount of P6,000 each only, and, therefore, have not been given their shares in the estate which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator. Is the failure old the testator to give his children two-thirds of the estate left by him at the time of his death, in accordance with the laws of the forum valid?

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides that successional rights to personal property are to be earned by the national law of the person whose succession is in question. Says the law on this point:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the extent of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property and the country in which it is found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16, new Civil Code.)

In the proceedings for the probate of the will, it was found out and it was decided that the testator was a citizen of the State of Nevada because he had selected this as his domicile and his permanent residence. (See Decision dated April 24, 1950, supra). So the question at issue is whether the estementary dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will (Sec. 9905, Complied

Nevada Laws of 1925, supra). It does not appear that at time of the hearing of the project of partition, the above-quoted provision was introduced in evidence, as it was the executor's duly to do. The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules, which are as follows:

SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. . . . (Rule 123).

We have, however, consulted the records of the case in the court below and we have found that during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws. was introduced in evidence by appellant's (herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II, and t.s.n. pp. 24-44, Records, Court of First Instance). Again said laws presented by the counsel for the executor and admitted by the Court as Exhibit "B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo (se Records, Court of First Instance, Vol. 1).

In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition.

As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be governed by the national law of the testator, and as it has been decided and it is not disputed that the national law of the testator is that of the State of Nevada, already indicated above, which allows a testator to dispose of all his property according to his will, as in the case at bar, the order of the court approving the project of partition made in accordance with the testamentary provisions, must be, as it is hereby affirmed, with costs against appellants.

Paras, Bengzon, C.J., Padilla, Bautista Angelo and Endencia, JJ., concur.Barrera, J., concurs in the result.


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