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CIR, digested

GR # L-26379, December 27, 1969 (Constitutional Law Power to Tax)

FACTS: Petitioner questioned the payment of an income tax assessed on him by public respondent on an
amount realized by him on a sale of his automobile to a member of the US Marine Corps, the
transaction having taken place at the Clark Field Air Base. Petitioner contends that the base is outside
Philippine territory and therefore beyond the jurisdictional power to tax.

ISSUE: Whether or not a sale made on a foreign military base is excluded from tax.

RULING: No. The said foreign military bases is not a foreign soil or territory for purposes of income tax
legislation. Philippine jurisdictional rights including the power to tax are preserved.

HSBC vs SHERMAN 176 SCRA 331 (1989)

Facts: Eastern Book & Supply Service (Singapore) was granted by HSBC Singapore an overdraft facility.
Sherman, et. al. and directors of Eastern Book executed a Joint and Several Guarantee in favor of HSBC.
Eastern Book defaulted. Hence, HSBC filed a suit for collection against them before the Regional Trial
Court of Quezon City. Sherman filed a Motion to Dismiss on the ground of lack of jurisdiction over the
complaint and persons of the defendants. The guarantee provides: This guarantee and all rights,
obligations and liabilities arising hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of Singapore.

Issue:W/N Philippine courts should have jurisdiction over the suit.

Ruling: Philippine courts have jurisdiction over the suit. The stipulation shall be liberally construed. A
stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or defendant
under Sec 2 (b), Rule 4 of the Rules of Court, in the absence of qualifying or restrictive words in the
agreement which indicate that the place named is the only venue agreed upon by the parties. The
parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, have
jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In
International Law, jurisdiction is often defined as the right of a state to exercise authority over persons
and things within its boundaries subject to certain exceptions. This authority, which finds its source in
the concept of sovereignty, is exclusive within and throughout the domain of the state. A state is
competent to take hold of any judicial matter it sees fit by making its courts and agencies assume
jurisdiction over all kinds of cases brought before them.
Saudi Arabian Airlines vs Court of Appeals

297 SCRA 469 Conflict of Laws Private International Law Situs Locus Actus

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 Airliness rights hence a submission to the courts 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 shell file it in
Saudi Arabia, it will be very disadvantageous for her (and of course, again, Philippine Civil Law is the law

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).