AZNAR vs.
GARCIA of his death, he was domiciled in the PH as admitted
Edward Christensen executed a will in Manila on Mar.
5, 1951. Pursuant thereto, he declared Maria Lucy (now
Mrs. Bernard Daney), as his only heir. He bequeathed to
Maria Lucy all income from the rest of his property.
Meanwhile, he bequeath unto Maria Helen (now Mrs.
Garcia) P3,600.00; the same to be deposited in trust for
Maria Helen with PNB, and paid to her at the rate of
P100/per month until the principal thereof as well as any
interest which may have accrued thereon, is exhausted.
Pursuant thereto, the executor in his final account and
project of partition, ratified the payment of only
P3,600 to Helen and proposed that the residue of the
estate be transferred to his daughter, Maria Lucy.
Helen filed an opposition to the project of partition
insofar as it deprives her of her legitime as an
acknowledged natural child. She claimed that: 1) the
distribution should be governed by PH laws, and 2)
the order of distribution is contrary thereto insofar as
it denies her ½ of the estate in full ownership; 3) the
entire American law, and not only the internal law of
California alone, should govern the case because
several foreign elements are involved; 4) the forum is
the PH and even if the case were decided in
California, Sec. 946 of California CC is applicable.
Said law requires that the domicile of the decedent
should apply.
CFI: deceased Edward was a citizen of the U.S. and 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 [w/c
provides: 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]. Accordingly, CFI approved the final
accounts of the executor; 1) executor was ordered to
reimburse Maria Lucy P3,600 paid by her to Helen as
her legacy; 2) Maria Lucy --entitled to the residue of
the property to be enjoyed during her lifetime, and in
case of death without issue, ½ of said residue to be
payable to Mrs. Carrie Borton, etc., in accordance
with the provisions of the will of Edward.
ISSUE: W/N CFI erred in failing to recognize that under
the renvoi doctrine, the intrinsic validity of the
testamentary disposition of the distribution of the estate
of Edward should be governed by the PH laws.
HELD: YES. While Edward was a citizen of the U.S.
and of California at the time of his death, at the time
by the executor himself.
The law that governs the validity of his testamentary
dispositions is defined in Art. 16 of the CC of the PH.
With respect to his real & personal prop, the same is
governed by the law of the country where it is
situated; with re: 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, the same shall be regulated
by the national law of the person whose succession is
under consideration.
What is then the meaning of "national law"?
Note: there is no single American law governing the
validity of testamentary provisions in the U.S; each
state of the Union have its own private law applicable
to its citizens only and in force only within the state.
The "national law" indicated in Art. 16 refers to the
private law of the California.
Under the California Probate Code, a testator may
dispose of his property by will in the form and manner
he desires.
But Helen invokes the provisions of Art. 946 of the
CC of California [“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.”] She insists that Art. 946 applies, and
in accordance therewith, and following the doctrine of
the renvoi, the question here of the validity of the
testamentary provision should be referred back to the
law of the decedent's domicile, which is the PH.
doctrine of renvoi (in the narrower sense): 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.
Under the said doctrine, in determining the question
before it, 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.
Art. 946 of the California CC 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 Art. 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.
Aznar et al: what Art. 16, of PH CC pointed out as the
national law is the internal law of California.
SC: 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.
Aznar et al: the clause in Sec. 946 of the California
CC refers to Art. 16 of the CC of the PH and that the
law to the contrary in the PH is the provision in said
Art. 16 that the national law of the deceased should
govern.
SC: such Contention – untenable.
The national law mentioned in Art. 16 of our CC is the
law on conflict of laws in the California CC, i.e., Art.
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, Art. 946, CC
refers back the case--when a decedent is not domiciled
in California--to the law of his domicile, the PH in this
case.
The court of the domicile cannot refer the case back to
California. The PH 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 PH law,
Arts. 887(4) and 894, CC of the PH, makes natural
children legally acknowledged forced heirs of the
parent recognizing them.
Thus, as the domicile of the deceased Edward is the
PH, the validity of the provisions of his will depriving
his acknowledged natural child Helen should be
governed by the PH Law--his domicile pursuant to
Art. 946, CC of California, not by California internal law.
HASEGAWA vs. KITAMURA
Pet. Nippon Engineering, a Japanese consultancy firm
providing technical &management support in infrastructure
projects of foreign Gov’ts, entered into an Independent
Contractor Agreement (ICA) with Rsp. Kitamura, a
Japanese national permanently residing in the PH.
AGREEMENT: Kitamura was to extend professional
services to Nippon for a year.
Later, Nippon assigned Kitamura as project manager
of the STAR Project in the PH.
Feb. 28, 2000 - Pet. Hasegawa (Nippon's Gen.Mgr. for its
Int’l Division), informed Kitamura that the company
had no more intention of automatically renewing his
ICA. His services would be engaged only up to the
substantial completion of the STAR Project.
Kitamura then filed a suit for specific performance
and damages against pets. before the RTC.
Pets. filed a MTD; ground: lack of jurisdiction since
the ICA had been perfected in Japan and executed
between Japanese nationals. The claim for improper
pre-termination of Kitamura's ICA could only be
heard in proper courts of Japan following the
principles of lex loci celebrationis and lex contractus.
RTC denied the MTD; matters connected with the
performance of contracts are regulated by the law
prevailing at the place of performance. CA affirmed.
TC correctly applied the principle of lex loci solutionis.
ISSUE: W/N the subject matter jurisdiction of PH
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.
PET.: RTC of Lipa is an inconvenient forum bec. the
subject ICA was entered into and perfected in Tokyo,
by Japanese nationals, and written wholly in Japanese
language. Thus, RTC Lipa have no substantial
relationship to the parties following the state of the
most significant relationship rule.
SC: in the resolution of conflicts problems, 3
consecutive phases are involved: jurisdiction, choice
of law, and recognition & enforcement of judgments.
Corresponding these phases are the questions: 1)
Where should litigation be initiated? 2) Which law
will the court apply? and 3) Where can the judgment
be enforced?
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 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. 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.
Here, only the first phase is at issue—jurisdiction.
For a court to validly exercise its power to adjudicate
a controversy, it must have jurisdiction over the
plaintiff or the Pet., over the defendant or the Rsp.,
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.
Pets. assail the subject matter jurisdiction of the TC.
Jurisdiction over the subject matter in a judicial
proceeding is given only by law and in the manner
prescribed by law. It is determined by the allegations
of the complaint.
Here, Pets., in their MTD, do not claim that TC is not
properly vested by law with jurisdiction to hear the
subject controversy for, indeed, the case for specific
performance and damages is one not capable of
pecuniary estimation, hence, cognizable by the RTC.
What Pets. 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."
Lex loci celebrationis relates to the "law of the place
of the ceremony" or the law of the place where a
contract is made. The doctrine of lex contractus or lex
loci contractus means the "law of the place where a
contract is executed or to be performed." It controls
the nature, construction, and validity of the contract
and it may pertain to the law voluntarily agreed upon
by the parties or the law intended by them either
expressly or implicitly.
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 inCorp. of the parties.
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.
They determine which state's law is to be applied in
resolving the substantive issues of a conflicts problem.
Here, as the only issue is that of jurisdiction, choice-
of-law rules are not yet called for.
Further, Pets.' 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.
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.
When a conflicts case is brought before a court or
administrative agency, there are 3 alternatives for 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.
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.
Neither can the ground of forum non conveniens, be
used to deprive TC of its jurisdiction. It is not a proper
basis for a MTD under Sec. 1, Rule 16, RoC.
Whether a suit should be entertained or dismissed on
the basis of the said doctrine depends upon the facts of
the particular case and is addressed to the sound
discretion of TC. Here, TC decided to assume
jurisdiction. Also, 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.
BANK OF AMERICA vs. CA
The Litonjuas filed a Complaint before RTC of Pasig
against the herein pets. Banks.
Claim: 1) they owned 2 vessels through their wholly-
owned Corps.; 2) they deposited their revenues from
said business together with other funds with the
Branches of pet. banks in UK and HK up to 1979; 3)
pets. banks induced them to increase the number of
their ships in operation, offering them easy loans to
acquire said vessels; 4) the banks acquired 4 vessels
through the Litonjuas' Corps. as the borrowers; 5) the
possession the vessels was placed by the banks in the
hands of persons selected by them; 6) the banks as
trustees, did not fully render an account of all the
income derived from the operation of the vessels as
well as of the proceeds of the subsequent foreclosure
sale; 7) because of the breach of their fiduciary duties
and/or negligence of Pets. and/or the persons
designated by them in the operation of the Litonjuas'
vessels, the revenues derived from the operation of all
the vessels declined drastically; 8) the bank thereafter
foreclosed and sold at public auction the vessels to
answer for the obligations incurred for and in behalf
of the operation of the vessels. Prayer: accounting of
revenues derived in the operation of the vessels and of
the proceeds of the sale thereof at the foreclosure
proceedings instituted by Pets.; damages for breach of
trust
Pets. banks filed a MTD; grounds: 1) forum non
conveniens and 2) lack of CoA against them.
TC denied the MTD. Pets. filed a pet. for review on
certiorari before the CA. Petition—dismissed.
PET.BANKS: 1) while the application of the principle
of forum non conveniens is discretionary on the part of
the Court, said discretion is limited by the guidelines
pertaining to the private and public interest factors in
determining whether plaintiffs' choice of forum should
be disturbed; 2) the local court is not the proper forum
bec.: "i) The Banks involved are based in HK and
England. As such, the evidence and the witnesses are
not readily available in the PH; ii) The loan
transactions were obtained, perfected, performed,
consummated and partially paid outside the PH; iii)
The monies were advanced outside the PH; iv) The
Restructuring Agreements were ALL governed by the
laws of England; v) The subsequent sales of the
mortgaged vessels and the application of the sales
proceeds transpired outside the PH, and the deliveries
of the sold mortgaged vessels were made outside the
PH; vi) the revenues of the vessels and the proceeds
of the sales of these vessels were ALL deposited to the
Accounts of the foreign CORP.S abroad; also, 3) the
loan agreements, security documentation and all
subsequent restructuring agreements expressly
provided that they will be governed by the laws of
England. PH Courts would then have to apply English
law in resolving whatever issues may be presented to
it in the event it recognizes and accepts herein case; 4)
the inconvenience and difficulty of applying English
law with respect to a wholly foreign transaction in a
case pending in the PH may be avoided by its
dismissal on the ground of forum non conveniens.; 5)
the Litonjuas have already waived their alleged CoA
for their refusal to contest the foreign civil cases
earlier filed by Pets. against them in HK and England.
The Litonjuas: while the complaint was filed only by
the stockholders of the corporate borrowers, the latter
are wholly-owned by the Litonjuas who are Filipinos
and hence under PH laws; aside from said corporate
borrowers being but their alter-egos, they have
interests of their own in the vessels. Also, TC’s
decision in not applying the principle of forum non
conveniens is in the lawful exercise of its discretion.
ISSUE: W/N the complaint be dismissed on the
ground of forum non-conveniens.
HELD: No. The doctrine of forum non-conveniens
provides that a court, in conflicts of law 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.
Whether a suit should be entertained or dismissed on
the basis of said doctrine depends on the facts of the
case and is addressed to TC’s sound discretion.
PH Court may assume jurisdiction over the case if it
chooses to do so; provided that: 1) PH Court is one to
which the parties may conveniently resort to; 2) PH
Court is in a position to make an intelligent decision
as to the law and the facts; and, 3) PH Court has or is
likely to have power to enforce its decision. All these
requisites are present in the instant case.
Moreover, the doctrine of forum non conveniens
should not be used as a ground for a MTD because it
was not provided for under Sec. 1, Rule 16, RoC.
While it is within the discretion of TC 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. The propriety of dismissing a case based
on this doctrine requires a factual determination,
hence it ore properly considered a matter of defense.
RAYTHEON INT’L vs. STOCKTON ROUZIE, JR.
BMSI, a Corp. duly organized and existing under the
laws of Connecticut, USA, and Rsp. Rouzie, Jr., an
American citizen, entered into a contract whereby
BMSI hired Rouzie as its representative to negotiate
the sale of services in several Gov’t projects in the PH
for a remuneration of 10% of the gross receipts.
Later, Rouzie filed before the NLRC a suit against
BMSI, among others, for nonpayment of commissions,
illegal termination and breach of employment
contract.
LA: in favour of Rouzie. NLRC reversed and
dismissed Rouzie’s complaint; ground: lack of
jurisdiction.
Meanwhile, Rouzie, then a resident of La Union,
instituted an action for damages before RTC of
Bauang, La Union, against Pet. Raytheon.
Pet. sought the dismissal of the complaint; grounds:
failure to state a CoA and forum non conveniens; it
prayed for damages by way of compulsory
counterclaim.
TC: the factual allegations in the complaint were
sufficient for TC to render a valid judgment thereon.
The principle of forum non conveniens was
inapplicable bec. TC could enforce judgment on Pet.,
it being a foreign Corp. licensed to do business here.
CA affirmed.
PET.: the written contract between Rouzie and BMSI
included a valid choice of law clause, that is, that the
contract shall be governed by the laws of Connecticut.
Bec. of the presence of foreign elements–the parties
and witnesses involved are American Corps. and
citizens and the evidence to be presented is located
outside the PH –our local courts are deemed
inconvenient forums. The foreign elements of the
dispute necessitate the immediate application of the
doctrine of forum non conveniens.
ISSUE:
HELD:
3 consecutive phases involved in judicial resolution of
conflicts-of-laws problems (see discussions in Hasegawa
vs. Kitamura).
On the matter of jurisdiction over a conflicts-of-laws
problem where the case is filed in a PH 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.
Jurisdiction over the nature and subject matter of an
action is conferred by the Constitution and the law and
by the material allegations in the complaint,
irrespective of W/N the plaintiff is entitled to recover
all or some of the claims or reliefs sought therein.
Here, the case is an action for damages arising from
an alleged breach of contract. The nature of the action
and the amount of damages prayed are within the
jurisdiction of the RTC.
As regards jurisdiction over the parties, TC acquired
jurisdiction over Rouzie (party plaintiff) upon the
filing of the complaint. Jurisdiction over the person of
Pet. (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 Connecticut
does not suggest that the PH courts, or other foreign
tribunal, are precluded from hearing the civil action.
Jurisdiction and choice of law are two distinct
concepts. (see discussion in Hasegawa vs. Kitamura)
The choice of law stipulation becomes relevant only
when the substantive issues of the case develop, i.e,
after hearing on the merits proceeds before TC.
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.
Pet.’s averments of the foreign elements in this case
are not sufficient to oust TC of its jurisdiction over the
Civil Case and the parties involved.
Moreover, the propriety of dismissing a case based on
the principle of forum non conveniens requires a
factual determination; hence, more properly
considered as a matter of defense.
SAUDI ARABIAN AIRLINES vs. CA
Herein pet. SAUDIA hired pr.rsp. Milagros Morada as
Flight Attendant for its airlines based in Jeddah, Saudi
Arabia.
While on a lay-over in Jakarta, Indonesia, Milagros
went to a disco dance with fellow crew members
Thamer and Allah Al-Gazzawi-- Saudi nationals. Because
it was almost morning when they returned to their
hotels, they agreed to have breakfast together at the
room of Thamer. Thamer attempted to rape Milagros.
Later, the Indonesian police arrested Thamer and
Allah.
When Milagros 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 and base manager
negotiated with the police for the immediate release of
the detained crew members but did not succeed
because Milagros refused to cooperate.
SAUDIA allowed her to return to Jeddah but barred
her from the Jakarta flights.
Later, her superiors requested her to see Mr. Meniewy,
Chief Legal Officer of SAUDIA, in Jeddah. He then
brought her to the police station. The police took her
passport and questioned her about the Jakarta incident.
Miniewy put pressure on Milagros 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.
1 ½ year later, few minutes before the departure of her
flight to Manila, Milagros was not allowed to board
the plane and was ordered to take a later flight to
Jeddah to see Mr. Miniewy. 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, she signed a notice for her to appear before the
court on June 27, 1993. Thereafter, she returned to
Manila.
SAUDIA summoned Milagros to report to Jeddah
once again and see Miniewy on June 27 for further
investigation. She assented after receiving assurance
from SAUDIA's Manila manager that the
investigation was routinary.
In Jeddah, a SAUDIA legal officer brought Milagros
to the same Saudi court. A Saudi judge interrogated
her through an interpreter about the Jakarta incident.
After an hour of interrogation, they let her go.
However, at the airport, 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.
A SAUDIA legal officer again escorted Milagros to
the same court where the judge rendered a decision
sentencing her to 5 mos. imprisonment and to 286
lashes. Only then did she realize that the Saudi court
had tried her. The court found her guilty of 1)
adultery; 2) going to a disco, dancing and listening to
the music in violation of Islamic laws; and 3) socializing
with male crew, in contravention of Islamic tradition.
To pay for her upkeep, she worked on the domestic
flight of SAUDIA, while Thamer and Allah continued
to serve in the Int’l flights.
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, she was terminated from the service by
SAUDIA, without her being informed of the cause.
Milagros filed a Complaint for damages against
SAUDIA, and its country manager.
SAUDIA filed an Omnibus MTD; grounds: 1) the
Complaint states no CoA; 2) the claim set forth in the
Complaint has been waived, abandoned or extinguished; and
3) TC has no jurisdiction to try the case pursuant to
Art. 21, CC, since the proper law applicable is the law
of the Kingdom of Saudi Arabia.
TC: denied Saudia’s MTD. CA affirmed. PH is an
appropriate forum considering that the Complaint's
basis for recovery of damages is Art. 21 of the CC,
and thus, clearly within the jurisdiction of our Court.
ISSUES: I. W/N CA erred in holding that RTC of QC has
jurisdiction to hear and try the civil case.
II. W/N CA erred in ruling that in this case PH law should
govern.
PET.: Milagros's claim for alleged abuse of rights
occurred in the Saudi Arabia. The existence of a
foreign element calls for the application of the law of
Saudi Arabia, by virtue of lex loci delicti commissi.
MILAGROS: since her Complaint is based on Art.19
& 21, CC, the instant case is a matter of domestic law.
HELD:
The foreign element consisted in the fact that
Milagros is a resident PH national, and Pet. SAUDIA
is a resident foreign Corp. Also, by virtue of her
employment with Pet. as a flight stewardess, events
transpired during her many occasions of travel across
national borders-- from Manila, PH to Jeddah, Saudi
Arabia, and vice versa.
Thus, Milagros’s assertion that the case is purely
domestic is imprecise. A conflicts problem presents
itself here, and the question of jurisdiction confronts
the court.
Reading her Complaint, she aptly predicated her CoA
on Art. 19 and 21, NCC.
Although Art. 19 merely declares a principle of law,
Art. 21 gives flesh to its provisions.
Milagros is correct that violations of Art.19 and 21 are
actionable, with judicially enforceable remedies in the
municipal forum.
Pursuant thereto, RTC of QC possesses jurisdiction
over the subject matter of the suit. Its authority to try
and hear the case is provided for under Sec. 19 of RA
7691. “RTCs shall exercise exclusive jurisdiction: (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 P100k or, in such other cases in Metro
Manila, where the demand, exclusive of the above-
mentioned items exceeds P200k.”
And following Sec. 2 (b), Rule 4 of the Revised RoC
— the venue, QC, is appropriate: Personal 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.
Practical considerations, including the convenience of
the parties, also weigh heavily in favor of the RTC QC
assuming jurisdiction. Paramount is the private
interest of the litigant, i.e., the enforceability of a
judgment if one is obtained. Relative advantages and
obstacles to a fair trial are equally important. Unless
the balance is strongly in favor of the defendant, the
plaintiff’s choice of forum should rarely be disturbed.
Weighing the relative claims of the parties, TC found
it best to hear the case in the PH.
Moreover, by hearing the case in the PH no
unnecessary difficulties and inconvenience have been
shown by either of the parties. The choice of forum of
plaintiff therein (Milagros) should be upheld.
TC also possesses jurisdiction over the persons of the
parties. By filing her Complaint with TC, Milagros
has voluntary submitted herself to the jurisdiction of
the court. Pet. SAUDIA, on the other hand, filed
several motions praying for the dismissal of
Milagros's Complaint. It also filed an Answer and
prayed for other reliefs. It effectively submitted to
TC's jurisdiction by praying for the dismissal of the
Complaint on grounds other than lack of jurisdiction.
Thus, TC has jurisdiction over the case and that its
exercise thereof, justified.
As to the choice of applicable law, note that before a
choice can be made, it is necessary for 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 W/N the facts relate to the kind of question
specified in a conflicts rule. Purpose: to enable the
forum to select the proper law.
An essential element of conflict rules is the indication
of a "test" or "connecting factor" or "point of contact".
Choice-of-law rules 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).
These "points of contact" could be: 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.
Here, there is reasonable basis for Milagros's assertion
that although she was already working in Manila, Pet.
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 the
charges.
There is also logical basis on record for the claim that
the "turning over" of Milagros to Jeddah officials, Pet.
may have acted beyond its duties as employer.
Considering that the complaint is one involving torts,
the "point of contact" could be the place or places
where the tortious conduct or lex loci actus occurred.
Applying the torts principle in a conflicts case, PH
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 PH where Pet. allegedly deceived Milagros, a
Filipina residing and working here.
Pet. failed to protect her, she claimed. That certain
acts or parts of the injury allegedly occurred in
another country is immaterial. 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 Milagros.
Moreover, considering the "State of the most
significant relationship" rule, the ff. contacts are to be
taken into account and evaluated according to their
relative importance with respect to the particular
issue: a) place where the injury occurred; b) place
where the conduct causing the injury occurred; c)
domicile, residence, nationality, place of inCorp. and
place of business of the parties, and d) place where the
relationship, if any, between the parties is centered.
Here, over-all injury occurred and lodged in the PH.
Moreover, Milagros is a resident Filipina national,
working with Pet., a resident foreign Corp. engaged
here in the business of Int’l air carriage.
Thus, the "relationship" between the parties was
centered here. PH has the most significant contact
with the matter in this dispute.
Since PH is the situs of the tort complained of and the
place "having the most interest in the problem", PH
law on torts controls the resolution of the case.
Further, Rsp. RTC has jurisdiction over the parties and
the subject matter of the complaint; the appropriate
venue is in QC, which could properly apply PH law.
Note: pr.Rsp., has "no obligation to plead and prove the law
of the Kingdom of Saudi Arabia since her CoA is based on
Art.s 19 and 21" of the CC of the PH.
PHILGUARANTEE vs. V.P. EUSEBIO CONSTRUCTION
A service contract was entered into by a Filipino
construction firm with the Iraqi Gov’t for the
construction of the Institute of Physical Therapy-
Medical Center, Phase II, in Baghdad, Iraq.
Pet. Philguarantee filed a civ.case for reimbursement
against Rsps. for the sum of money it paid to Al Ahli
Bank of Kuwait pursuant to a guarantee it issued for
Rsp. V.P. Eusebio Construction, Inc. (VPECI).
Nov. 1980 - the State Organization of Buildings (SOB),
Ministry of Housing and Construction, Baghdad, Iraq,
awarded the construction of the Medical
Rehabilitation Project to Ajyal Trading --a firm duly
licensed with the Kuwait Chamber of Commerce for a
total contract price of about US$18,739,668.
Mar. 1981- Rsp. Sps. Santos, in behalf of Rsp. 3-Plex
(a local contractor) entered into a JVA with Ajyal
wherein the sps. undertook the execution of the entire
Project, Ajyal would be entitled to a commission of
4% of the contract price.
Apr. 1981 - 3-Plex assigned all its rights and interests
under the JVA to rsp. VPECI (construction and
engineering firm).
May 1981 - 3-Plex and VPECI entered into an
agreement that the execution of the Project would be
under their joint management.
SOB required the contractors to submit 1) a
performance bond representing 5% of the total
contract price and 2) an advance payment bond
representing 10% of the advance payment to be
released upon signing of the contract.
To comply thereto, 3-Plex and VPECI applied for the
issuance of a guarantee with Pet. Philguarantee (a
Gov’t financial institution empowered to issue guarantees
for qualified Filipino contractors) to secure the
performance of approved service contracts abroad.
Philguarantee approved Rsps.' application.
Subsequently, it issued letters of guarantee to Rafidain
Bank of Baghdad covering 100% of the performance
and advance payment bonds. However, they were not
accepted by SOB.
Upon the application of 3-Plex and VPECI,
Philguarantee issued in favor of Al Ahli Bank of
Kuwait a Performance Bond Guarantee and the amount of
Advance Payment Guarantee. These letters of guarantee
were secured by 1) a Deed of Undertaking executed
by VPECI, Sps. Eusebio, 3-Plex, and Sps. Santos; and
2) a surety bond issued by Rsp. First Integrated
Bonding and Insurance Company, Inc. (FIBICI).
The Surety Bond was later amended to increase the
amount of coverage from P6.4M to P6.967M and to
change the bank in whose favour Pet.'s guarantee was
issued, from Rafidain Bank to Al Ahli Bank.
June 1981 - SOB and the joint venture VPECI and
Ajyal executed the service contract for the
construction of the Project. CONTRACT: the Joint
Venture would supply manpower and materials, and
SOB would refund to the former 25% of the project
cost in Iraqi Dinar and the 75% in US dollars at the
exchange rate of 1 Dinar to 3.37777 US Dollars.
The construction, which was supposed to start on 2
June 1981, commenced only on the last week of Aug.
1981. Due to this delay, the Project was not completed
on 15 Nov. 1982 as scheduled.
Oct. 1982 - upon foreseeing the impossibility of
meeting the deadline and upon the request of Al Ahli
Bank, the joint venture contractor worked for the
renewal/ extension of the Performance Bond and
Advance Payment Guarantee.
As of Mar. 1986, the status of the Project was 51%
accomplished; the structures were already finished.
The remaining 47% consisted in electro-mechanical
works and the 2%, sanitary works, which both
required importation of equipment and materials.
Oct. 1986 - Al Ahli Bank sent a telex call to Pet.
demanding full payment of its performance bond
counter-guarantee.
Upon receiving a copy of the same, VPECI requested
Iraq Trade and Economic Development Minister
Mohammad Hussein to recall the telex call on the
performance guarantee for being a drastic action in
contravention of its mutual agreement with the latter.
It also wrote SOB protesting the call for lack of basis,
since the failure to complete the Project was due to 1)
the Iraqi Gov’t's lack of foreign exchange with which
to pay its (VPECI's) accomplishments and 2) SOB's
noncompliance with the provision in the contract that
75% of the billings would be paid in US dollars.
Nov. 1986 - VPECI advised Pet. not to pay yet Al Ahli
Bank because efforts were being exerted for the
amicable settlement of the Project.
Apr. 1987 - Pet. received another message from Al Ahli
Bank stating that it had already paid to Rafidain Bank
under its letter of guarantee, and demanding
reimbursement by Pet. of what it paid to the bank +
intrest.
Aug. 1987 - VPECI requested the Central Bank to hold
in abeyance the payment by Pet. to allow the
diplomatic machinery to take its course, for otherwise,
the PH Gov’t, thru Philguarantee and the Central
Bank, would become instruments of the Iraqi Gov’t in
consummating an act of injustice against a Filipino
contractor.
June 1991 - Pet. sent Rsps. separate letters demanding
full payment of P47,872,373.98 + accruing interest,
penalty charges, and 10% attorney's fees pursuant to their
joint and solidary obligations under the deed of
undertaking and surety bond.
Rsps. failed to pay. Pet. filed a collection suit against
the Rsps. before the RTC Makati City.
TC: complaint-- dismissed; Pet. had no valid CoA
against Rsps. At the time the call was made on the
guarantee, the guarantee had already lapsed. No valid
extension of the guarantee for failure of the Pet. to secure
Rsps.' express consent thereto. TC also found that the joint
venture contractor incurred no delay in the execution of the
Project. Considering the Project owner's violations of the
contract which rendered impossible the joint venture
contractor's performance of its undertaking, no valid call on
the guarantee could be made. Furthermore, no valid notice
was first made by the Project owner SOB to the joint
venture contractor before the call on the guarantee. CA
affirmed.
ISSUE: 1. W/N Pet. is entitled to reimbursement of what it
paid under Letter of Guarantee it issued to Al Ahli Bank
based on the deed of undertaking and surety bond from
Rsps.
HELD: An unconditional guarantee is still subject to
the condition that the principal debtor should default
in his obligation first before resort to the guarantor
could be had.
It appearing that Letter of Guarantee merely stated
that in the event of default by Rsp. VPECI the Pet.
shall pay, the obligation assumed by the Pet. was
simply that of an unconditional guaranty. But the fact
that Pet.'s guaranty is unconditional does not make it a
surety. Besides, surety is never presumed.
Having determined Pet.'s liability as guarantor, the
next question is whether the Rsp. contractor has
defaulted in its obligations that would justify resort to
the guaranty.
ISSUE: 2. What law should be applied in determining
whether Rsp. contractor defaulted in the performance
of its obligations under the service contract. The
question pertains to the essential or intrinsic validity of a
contract.
HELD: No conflicts rule on essential validity of
contracts is expressly provided for in our laws. But
most legal systems follow the rule that, the intrinsic
validity of a contract must be governed by the lex
contractus (proper law of the contract). This is the law
voluntarily agreed upon by the parties (the lex loci
voluntatis) or the law intended by them either expressly
or implicitly (the lex loci intentionis).
The law selected may be implied from such factors as
substantial connection with the transaction, or the
nationality or domicile of the parties.
PH courts adopts the most basic rule -- allow the
parties to select the law applicable to their contract,
subject to the limitation that it is not against the law,
morals, or public policy of the forum and that the
chosen law must bear a substantive relationship to the
transaction.
Here, the service contract between SOB and VPECI
contains no express choice of the law that would
govern it. In the U.S. and Europe, (1) the parties may
choose the governing law; and (2) in the absence of
such a choice, the applicable law is that of the State
that "has the most significant relationship to the
transaction and the parties." Another authority
proposed that all matters relating to the time, place,
and manner of performance and valid excuses for non-
performance are determined by the law of the place of
performance or lex loci solutionis, which is useful
because it is undoubtedly always connected to the
contract in a significant way.
Here, the laws of Iraq bear substantial connection to
the transaction, since one of the parties is the Iraqi
Gov’t and the place of performance is in Iraq. Hence,
the issue of whether VPECI defaulted in its
obligations may be determined by the laws of Iraq.
However, since that foreign law was not properly
pleaded or proved, the presumption of identity
(processual presumption), comes into play. Where
foreign law is not pleaded or, even if pleaded, is not
proved, the presumption is that foreign law is the
same as ours.
Art. 1169, last parag., of the CC, provides: "In
reciprocal obligations, neither party incurs in delay if
the other party does not comply or is not ready to
comply in a proper manner with what is incumbent
upon him."
Default of the debtor is the delay in the fulfillment of
the prestation by reason of a cause imputable to the
former. It is the non-fulfillment of an obligation with
respect to time.
Only 51.7% of the total work had been accomplished.
The 48.3% unfinished portion consisted in the
purchase and installation of electro-mechanical
equipment and materials, which were available from
foreign suppliers, thus requiring US Dollars for their
importation. The monthly billings and payments by
SOB reveal that the agreement between the parties
was a periodic payment by the Project owner to the
contractor depending on the percentage of
accomplishment within the period. The payments
were, in turn, to be used by the contractor to finance
the subsequent phase of the work.
However, the payment by SOB purely in Dinars
adversely affected the completion of the project.
As found by both CA and TC, the delay or the non-
completion of the Project was caused by factors not
imputable to Rsp. contractor. It was rather due mainly
to the persistent violations by SOB of the terms and
conditions of the contract, particularly its failure to
pay 75% of the accomplished work in US Dollars.
Indeed, where one of the parties to a contract does not
perform in a proper manner the prestation which he is
bound to perform under the contract, he is not entitled
to demand the performance of the other party. A party
does not incur in delay if the other party fails to
perform the obligation incumbent upon him.
The Pet., however, maintains that the payments by
SOB of the monthly billings in purely Iraqi Dinars did
not render impossible the performance of the Project
by VPECI.
For a debtor be considered in default, it is necessary
that the ff. requisites be present: 1) the obligation be
demandable and already liquidated; 2) the debtor
delays performance; and 3) the creditor requires the
performance as it must appear that the tolerance or
benevolence of the creditor must have ended.
Here, SOB cannot yet demand complete performance
from VPECI because it has not yet itself performed its
obligation in a proper manner, i.e., the payment of the
75% of the cost of the Project in US Dollars. VPECI
cannot yet be said to have incurred in delay.
Even assuming there was delay and it was attributable
to VPECI, still the effects of that delay ceased upon
the renunciation by the creditor, SOB, which could be
implied when the latter granted several extensions of
to the former.
Besides, no demand has yet been made by SOB
against Rsp. contractor. Demand is generally
necessary even if a period has been fixed in the
obligation.
Moreover, Pet. as a guarantor is entitled to the benefit
of excussion, that is, it cannot be compelled to pay the
creditor SOB unless the property of the debtor VPECI
has been exhausted and all legal remedies against the
said debtor have been resorted to by the creditor.
However, here, Pet. has clearly waived these rights
and remedies by making the payment of an obligation
that was yet to be shown to be rightfully due the
creditor and demandable of the principal debtor.
DILWEG vs. PHILLIPS, et al
Dilweg, a nonresident American, thru counsel, filed a
suit for damages against defendants Phillips, Dineros,
and Esceta, bec. of an alleged libelous statements
uttered and published in the PH by defendants.
TC issued an order, which is the subject of the present
appeal. It held that the action is based on a tort, which
under the PH law, is a criminal offense. At the time
the libelous statements were uttered, Dilweg was in
Washington D.C. where he has always been a resident.
TC ruled that it cannot assume jurisdiction over the
case; that in a personal action, it can only acquire
jurisdiction over the person of the plaintiff if he
resides within our territorial jurisdiction.
ISSUE: W/N PH courts can rightfully refuse to
assume jurisdiction over personal action instituted by
a nonresident alien.
HELD: NO. Non-residents may maintain personal
actions against our residents in PH courts.
As a personal action, sounding in tort, it was
transitory in its nature, following the person of the
defendant.
It is not indispensable for a foreigner to establish
residence, nor need he be physically present in a state
of which he is not a resident or citizen in order that he
may initiate or maintain a personal action against a
resident or citizen of that other state for rights of
action arising in, or for violations of laws committed
within, the territorial jurisdiction of that other state.
In this jurisdiction, no general law has come to our
knowledge or notice which restricts the right of non-
resident aliens to sue in our courts.
Here, Dilweg's CoAs arose in, and that defendants are
within, our territorial jurisdiction.
It is conceded by both parties that the law under which
the instant case falls is silent on the matter of the right
of an alien to sue in our courts.
On the other hand, the particular law availed of by
Dilweg in filing his complaint is Art. 33, CC (PH),
which provides: “In cases of defamation, fraud, and
physical injuries, a civil action for damages entirely
separate and distinct from the criminal action may be
brought by the injured party. Such civil action shall proceed
independently of the criminal prosecution and shall require
only preponderance of evidence.”
Said provision does not make any distinction as to
whether the "injured party", who may maintain an
action for damages based on defamation, is a Filipino
citizen or a resident or an alien.
The fact that there are counterclaims against the non-
resident plaintiff is immaterial. RoC provide for remedies
against nonresident defendants.
LWV CONSTRUCTION vs. DUPO
Pet. LWV, a domestic Corp. which recruits Filipino
workers, hired Rsp. Dupo as Civil Structural
Superintendent to work in Saudi Arabia for its
principal, MMG. Dupo’s overseas employment
contract was renewed 5 times.
Dupo left Saudi Arabia on Apr. 30, 1999 and arrived
in the PH on May 1, 1999.
May 28, 1999 –he informed MMG, thru LWV, that he
ought to extend his vacation as his son was hospitalized.
He also sought promotion w/salary adjustment.
MMG informed Dupo that his promotion is subject to
management’s review; that he was issued a plane
ticket for his return flight to Saudi Arabia on May 31,
1999.
July 6, 1999 - Dupo resigned. In his letter to MMG, he
stated that based on the Saudi Law stated, he is
entitled for a long service award (for his 7yrs service)
When LWV did not respond, Dupo filed a complaint
for payment of service award against LWV before the
NLRC. Claim: Under the Law of Saudi Arabia, an
employee who rendered at least 5 years in a company
within the jurisdiction of Saudi Arabia, is entitled to
long service award, a.k.a longevity pay of at ½ month
pay for every year of service.
LWV’s defense: payment and prescription. MMG
"pays its workers their Service Award or Severance
Pay every conclusion of their Labor Contracts
pursuant to Art. 87 of Saudi Labor Law. Under Art.
87, payment of the award is at the end or termination
of the Labor Contract concluded for a specific period.
Based on the payroll, Dupo was already paid his
service award or severance pay for his latest 6 th
employment contract; also, under Art. 13 of the Saudi
Labor Law, the action to enforce payment of the
service award must be filed within 1 year from the
termination of a labor contract for a specific period.
Dupo’s 6 contracts ended when he left Saudi Arabia
on the ff. dates: Apr. 15, 1993, June 8, 1994, Dec. 18,
1995, Mar. 21, 1997, Mar. 16, 1998 and Apr. 30, 1999.
LWV concluded that the 1-yr prescriptive period had
lapsed because Dupo filed his complaint on Dec. 11,
2000 (1yr. and 7mos. after his sixth contract ended)
LA: ordered LWV to pay Dupo longevity pay of
US$12,640.33 or ₱648,562.69 and attorney’s fees of
₱64,856.27 or a total of ₱713,418.96. Dupo’s claim was
not barred by prescription since his claim on July 6,
1999, made a month after his CoA accrued,
interrupted the prescriptive period under the Saudi
Labor Law until his claim was categorically denied.
NLRC affirmed. Dupo is entitled to longevity pay
which is different from severance pay. CA affirmed.
Service award is the same as longevity pay; severance
pay received by Dupo cannot be equated with service
award.
LWV: the LA awarded longevity pay although the
Saudi Labor Law grants no such benefit; NLRC
confused longevity pay and service award. The benefit
granted by Art. 87 of the Saudi Labor Law is service
award which was already paid by MMG each time
Dupo’s contract ended. CA erred in ruling that Rsp.’s
claim interrupted the running of the prescriptive
period. Such ruling is contrary to Art. 13 of the Saudi
Labor Law which provides that no case or claim
relating to any of the rights provided for under said
law shall be heard after the lapse of 12 mos. from the
date of the termination of the contract.
Dupo: he is entitled to longevity pay under the
provisions of the Saudi Labor Law.
ISSUE: W/N Dupo is still entitled to longetivity pay.
HELD: NO. Dupo’s service award under Art. 87 of
the Saudi Labor Law has already been paid. SC’s
computation will show that the severance pay received
by Dupo was his service award.
Art. 87 clearly grants a service award. Notably, the LA
was unable to specify any law to support his award of
longevity pay.
Considering that Art. 87 expressly grants a service
award, Dupo is correct that service award is the same
as longevity pay. Based on Dupo’s answer in the
pleadings and evidence presented, the computation for
long service award or longevity pay has the same
formula to compute the service award under Art.87.
A contract of employment for a definite period
terminates by its own terms at the end of such period.
As it is, Art. 72 of Saudi Labor Law is also of similar
import.
Re: prescription…. Dupo’s action has not yet
prescribed. What applies is Art. 291 of our Labor
Code: “All money claims arising from ER-EE relations
accruing during the effectivity of this Code shall be filed
within 3 years from the time the CoA accrued” Art. 291
covers all money claims from ER-EE rel.; It is not
limited to money claims recoverable under the Labor
Code, but applies also to claims of overseas contract
workers.
As a general rule, a foreign procedural law will not be
applied in the forum. Procedural matters, such as
service of process, joinder of actions, period and
requisites for appeal, and so forth, are governed by the
laws of the forum. This is true even if the action is
based upon a foreign substantive law.
A law on prescription of actions is sui generis in
Conflict of Laws in the sense that it may be viewed
either as procedural or substantive, depending on the
characterization given such a law.
However, the characterization of a statute into a
procedural or substantive law becomes irrelevant
when the country of the forum has a "borrowing
statute." Said statute has the practical effect of treating
the foreign statute of limitation as one of substance.
A "borrowing statute" directs the state of the forum to
apply the foreign statute of limitations to the pending
claims based on a foreign law.
One form of "borrowing statutes" provides that an
action barred by the laws of the place where it
accrued, will not be enforced in the forum even
though the local statute has not run against it. Sec. 48
of our Code of Civil Procedure is of this kind, this
provides: "If by the laws of the state or country where the
CoA arose, the action is barred, it is also barred in the PH
Islands."
There is no provision in the CC of the PH, which is
inconsistent with or contradictory to Sec. 48 of the
Code of Civil Procedure.
In the light of the 1987 Constitution, however, Sec. 48
of the Code of Civil Procedure cannot be enforced ex
proprio vigore insofar as it ordains the application in
this jurisdiction of Art. 156 of the Amiri Decree No.
23 of 1976.
The courts of the forum will not enforce any foreign
claim obnoxious to the forum’s public policy. To
enforce the one-year prescriptive period of the Amiri
Decree No. 23 of 1976 as regards the claims in
question would contravene public policy on the
protection to labor.
Thus, Dupo’s complaint was filed well within the 3-
year prescriptive period under Art. 291 of our Labor
Code. This point, however, has already been mooted by
our finding that Rsp.’s service award had been paid, albeit
the payroll termed such payment as severance pay. (thus, CA
—reversed)
BANK OF AMERICA vs. AMERICAN REALTY CORP.
Pet. BANTSA is an Int’l banking and financing
institution duly licensed to do business in the PH,
organized and existing under the laws of California,
USA while pr.Rsp. ARC is a domestic Corp. Bank of
America Int’l Limited (BAIL), on the other hand, is a
limited liability company organized under the laws of
England.
BANTSA and BAIL granted 3 major multi-million US
Dollar loans to corporate borrowers -- all of which are
existing under and by virtue of the laws of the Panama
and are foreign affiliates of ARC.
Due to default in payment of the loan amortizations,
BANTSA and the corporate borrowers entered into
restructuring agreements. As additional security
therefor, ARC as third party mortgagor, executed 2
REM over its parcels of land in Bulacan.
Eventually, the corporate borrowers defaulted in the
payment of the restructured loans. BANTSA filed
civil actions before foreign courts (2 in England, 2 in
HK) for the collection of the principal loan.
In said civil suits, ARC, being a third party mortgagor,
was not impleaded as party-defendant.
Dec. 1992 - BANTSA filed before the Office of the
Provincial Sheriff of Bulacan an application for extrajud.
foreclosure of REM. Eventually, the mortgaged props.
were sold at public auction in an extrajudicial
foreclosure sale. ICCS as the highest bidder.
Feb. 1993- ARC filed before the Pasig RTC, action for
damages against BANTSA, for foreclosing
extrajudicially the REMs despite the pendency of civil
suits before foreign courts for collection of the
principal loan.
BANTSA: the rule prohibiting the mortgagee from
foreclosing the mortgage after an ordinary suit for
collection has been filed, is inapplicable in the present
case. 1) ARC, 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 HK and England; 2) no civil suit for sum of
money was filed in the PH. As such, any decisions
which may be rendered in the abovementioned courts
are not enforceable in the PH unless a separate action
to enforce the foreign judgments is first filed in the
PH; 3) 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.
Meanwhile, ICCS as purchaser of the mortgaged
properties, consolidated its ownership over the same.
It then sold the props. to Stateland Investment Corp.
TC: in favor of ARC. 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, ARC’s rights as owner and
possessor of the properties were violated when
BANTSA caused the extrajudicial foreclosure of the
mortgages constituted thereon. CA affirmed.
ISSUE: W/N BANTSA'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: NO. First, as to the issue of availability of
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 he
may pursue either of the two remedies, but not both.
IF he fails in the remedy by him elected, he cannot
pursue further the remedy he has waived.
In re: real properties-- a mortgage creditor may
institute against the mortgage debtor either a personal
action for debt or a real action to foreclose the
mortgage. An election of one remedy operates as a
waiver of the other.
Here, ARC constituted REMs over its properties as
security for the debt of the principal debtors. By doing
so, it 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.
Notwithstanding, there is no law 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.
Note that BANTSA only has one CoA which is non-
payment of the debt. Nevertheless, alternative
remedies are available for its enjoyment and exercise.
It may opt to exercise only one of two remedies so as
not to violate the rule against splitting a CoA.
For non-payment of oblig. secured by mortgage, the
creditor has a single CoA against the debtor. It 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 CoA.
Thus, BANTSA, by filing 4 civil suits before foreign
courts, necessarily abandoned the remedy to foreclose
the REMS constituted over the properties of third-
party mortgagor and ARC.
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
discourage the noxious practice of splitting up CoA.
BANTSA alleges that under English Law, which
according to Pet. 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.
BANTSA’s contention is erroneous. Here, PH law
shall apply notwithstanding the evidence presented by
BANTSA to prove the English law on the matter.
A foreign law must be properly pleaded and proved as
a fact. If 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 internal
law (doctrine of processual presumption).
But, assuming that the English Law were properly
pleaded and proved, the same would still not apply.
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 this case is
the principle imbedded in our jurisdiction proscribing
the splitting up of a single CoA.
Moreover, foreign law should not be applied when its
application would work undeniable injustice to the
citizens or residents of the forum. A law, or judgment
or contract that is obviously unjust negates the
fundamental principles of Conflict of Laws. Thus,
English Law is not applicable.
LLORENTE vs. CA
Deceased Lorenzo Llorente was an enlisted
serviceman of the U.S. Navy from 1927 to 1957.
On Feb. 22, 1937, he and Pet. Paula got married in a
Catholic Church in Camarines Sur.
Before the Pacific War, Lorenzo went to US and Paula
stayed in the conjugal home in Camarines Sur.
Nov. 30, 1943 - Lorenzo was naturalized as an
American citizen pursuant to a Certificate of
Naturalization issued by the U.S. District Court, NY.
In 1945, Lorenzo was granted an accrued leave. He
then visited Paula in the PH. To his surprise, Paula
was pregnant and was living in an adulterous
relationship with his brother, Ceferino.
Paula and Lorenzo then drew a written agreement to
the effect that they would dissolve their marital union
in accordance with judicial proceedings.
Lorenzo returned to U.S. and on Nov. 16, 1951 filed
for divorce with the Superior Court of the California
in and for the County of San Diego. Paula was
represented by counsel, John Riley, and actively
participated in the proceedings. Superior Court of the
California issued a divorce decree.
In the meantime, Lorenzo returned to the PH and on
Jan. 16, 1958, he married Alicia Llorente in Manila.
Alicia had no knowledge of the first marriage.
From 1958 to 1985, Lorenzo and Alicia lived together
as husband and wife for 25yrs.
Mar. 13, 1981 - Lorenzo executed a Will (it was
notarized and duly signed by Lorenzo with attesting
witnesses Francisco Hugo, Francisco Neibres and Tito
Trajano). In the will, he bequeathed all his property to
Alicia and their 3 children.
Dec. 14, 1983, Lorenzo filed with RTC, Iriga, Camarines
Sur, a petition for the probate and allowance of his
will.
Jan. 24, 1984 -TC admitted the will to probate. But
before the proceedings terminates, Lorenzo died.
Sept. 4, 1985 - Paula filed with the same court a
pet.for letters of administration over Lorenzo’s estate.
She claimed to be Lorenzo’s surviving spouse. She
argued that Lorenzo’s will deprived her of her
legitime and ½ share in the conjugal property.
Dec. 13- Alicia filed in the testate proceeding, a
petition for the issuance of letters testamentary.
Oct. 14, 1985 - TC gave due course to Paula’s petition.
It found that the divorce decree granted to Lorenzo is
void and inapplicable in the PH. Consequently, his
marriage with Alicia is also void. Accordingly,
Alicia’s petition was denied. The intrinsic disposition
of the will of Lorenzo –void. CA affirmed.
ISSUE: Who are entitled to inherit from Lorenzo.
HELD: case was remanded to TC to rule on the intrinsic
validity of the will.
The Applicable Law
Lorenzo became an American citizen at the time of: 1)
his divorce from Paula; 2) marriage to Alicia; 3)
execution of his will; and 4) death. Thus, as a rule,
issues arising from these incidents are necessarily
governed by foreign law.
Art.15,CC: " Laws relating to family rights and duties,
or to the status, condition and legal capacity of persons
are binding upon citizens of the PH, even though living
abroad.
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 succession, 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 wherein said
property may be found."
Foreign laws do not prove themselves in our
jurisdiction. Our courts are not authorized to take
judicial notice of them. They must be alleged and
proved.
Here, while the substance of the foreign law was
pleaded, CA did not admit the foreign law. CA and TC
called to the fore the renvoi doctrine, where the case
was "referred back" to the law of the decedent’s
domicile, in this case, PH law.
While TC stated that the NY law was not sufficiently
proven, it stated that American law follows the
‘domiciliary theory’ hence, PH law applies when
determining the validity of Lorenzo’s will.
1st, The "national law" indicated in Art. 16 of the CC
cannot possibly apply to general American law. It thus
refer to the law of the State of which the decedent was
a resident. 2nd, there is no showing that the application
of the renvoi doctrine is called for or required by NY
State law.
TC held that the will was intrinsically bec. it contained
dispositions in favor of Alice, who in TC’s opinion was a
paramour. CA also disregarded the will and declared Alice
entitled to ½ of whatever property she and Lorenzo
acquired during their cohabitation, applying Art. 144 of the
CC of the PH.
The hasty application of PH law and the complete
disregard of the will, already probated as duly
executed in accordance with the formalities of PH law,
is fatal, especially in light of the factual and legal
circumstances of this case.
Validity of the Foreign Divorce
In one case, SC held that due to the nationality
principle under Art. 15, CC, only PH nationals are
covered by the policy against absolute divorces.
Aliens may obtain divorces abroad, provided they are
valid according to their national law.
For failing to apply these doctrines, CA -- reversed.
The divorce obtained by Lorenzo from his first wife
Paula was valid and recognized in this jurisdiction as a
matter of comity. The effects of this divorce (as to the
succession to the estate of the decedent) are matters best
left to the determination of TC.
Validity of the Will
Art. 17, CC: "The forms and solemnities of contracts,
wills, & other public instruments shall be governed by
the laws of the country in which they are executed.”
The clear intent of Lorenzo to bequeath his property to
Alicia and their children is shown in the will he
executed. We do not wish to frustrate his wishes, since
he was a foreigner, not covered by our laws on family
rights and duties, status, condition and legal capacity.
Whether the will is intrinsically valid and who shall
inherit from Lorenzo are issues best proved by foreign
law which must be pleaded and proved. Whether the
will was executed in accordance with the formalities
required is answered by referring to PH law. In fact,
the will was duly probated.
FLUEMER vs. HIX
The special administrator of the estate of Edward Hix
appeals from a decision of CFI denying the probate of
the document alleged to be Edward’s will.
Exec.Fleumer: 1) Hix executed the alleged will in
West Virginia, on Nov. 3, 1925; 2) he resides in Hix
and that the laws of West Verginia Code, as certified
to by the Director of the National Library.
ISSUE:
HELD: The laws of a foreign jurisdiction do not prove
themselves in our courts. It must be proved as facts.
Here the requirements of the law were not met. There
was no was printed or published under the authority of
the State of West Virginia, as provided in our Code of
Civil Procedure. Nor was the extract from the law
attested by the certificate of the officer having charge
of the original, under the sale of the State of West
Virginia, as provided in the same Code. No evidence
that the extract from the laws of West Virginia was in
force at the time the alleged will was executed.
In addition, the due execution of the will was not
established. The only evidence is the testimony of
Fleumer.
Moreover, there was nothing to indicate that the will
was acknowledged by the testator in the presence of 2
competent witnesses, and that these witnesses
subscribed the will in the presence of the testator and
of each other as the law of West Virginia seems to
require.
It was also necessary for Fleumer to prove that the
testator had his domicile in West Virginia.
Also in beginning administration proceedings
orginally in the PH, Fleumer violated his own theory
by attempting to have the principal administration in
the PH.
While the appeal pending submission in this court,
Fleumer’s attorney presented an unverified petition
asking the court to accept as part of the evidence the
documents attached to the petition. One of these
documents discloses that a paper writing purporting to
be the will presented for probate on June 8, 1929 to
West Virginia, in vacation, and was duly proven by the
oaths of Dana Wamsley and Joseph L. MAdden, the
subscribing witnesses thereto, and ordered to be
recorded and filed.
It was shown by another document that, in vacation,
on June 8, 1929, the clerk of court of Randolph
Country appointed Claude Maxwell as administrator
of the estate of Hix. It is to be noted that the
application for the probate of the will in the PH was
filed on Feb. 20, 1929, while the proceedings in West
Virginia appear to have been initiated on June 8, 1929.
These facts indicates an intention to make the PH the
principal administration and West Virginia the
ancillary administration. However this may be, no
attempt was made to comply with Civil Procedure as
no hearing on the question of the allowance of a will
said to have been proved and allowed in West Virginia
has been requested. There is no showing that the
deceased left any property at any place other than the
PH; no contention that he left any in West Virginia.
Brimo vs. BRIMO
The issue in this case is the partition of the estate left by
Joseph Brimo. The judicial administrator of this estate
filed a scheme of partition.
Andre Brimo, one of the brothers of the deceased,
opposed. Nevertheless, CFI approved the partition.
Hence this appeal.
Andre Brimo: TC erred in declaring that the Turkish
laws are impertinent to this cause, and in failing 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.
Andre’s opposition is based on the fact that the
partition puts into effect the provisions of Joseph
Brimo's will which are not in accordance with the
laws of his Turkish nationality, hence, they are void
being violative of Art. 10.
ISSUE:
HELD: Andre did not prove that the testimentary
dispositions are not in accordance with the Turkish
laws. He did not present 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 PH.
Turkish laws has not been proved.
TC did not err in refusing to give Andre another
opportunity to prove such laws. It is discretionary
with TC, and, taking into consideration that the
oppositor Andre was granted ample opportunity to
introduce competent evidence, no abuse of discretion
on the part of TC.
There is no evidence that the national law of testator
Joseph was violated in the testamentary dispositions in
question which, not being contrary to our laws in
force, must be complied with and executed.
Hence, the approval of the scheme of partition was not
erroneous.
Other issue: re: exclusion of Andre 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.
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 PH.
Said condition is void, being contrary to law. Art. 792,
CC provides: “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.”
Also, said condition is contrary to law because it
expressly ignores the testator's national law when,
according to Art. 10, CC, such national law of the
testator is the one to govern his testamentary
dispositions.
Said condition then, 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 are valid.
Thus, orders appealed from are modified and it is directed
that the distribution of this estate be made in such a manner
as to include Andre Brimo as one of the legatees, and the
scheme of partition submitted by the judicial administrator
is approved in all other respects.
SUNTAY vs. SUNTAY
CFI Bulacan disallowed the alleged will executed in
Manila on Nov. 1929, and the alleged will executed in
Kulangsu, Amoy, China, on 4 Jan. 1931, by Jose Suntay.
14 May 1934- Jose Suntay, a Filipino citizen and PH
resident, died in China, leaving properties in the PH
and a house in China, and children by the first
marriage with Manuela Cruz, and a child by second
marriage with Maria Natividad.
Intestate proceedings were instituted in CFI Bulacan.
Subsequently, letters of administration were issued to
Apolonio Suntay. After Apolonio's death, Federico
Suntay was appointed administrator of the estate.
15 Oct. 1934- the surviving widow filed a petition in
CFI Bulacan for the probate of a last will and
testament claimed to have been executed and signed
in the PH on Nov. 1929 by Jose Suntay.
CFI denied the petition because of the loss of said will
after the filing of the petition.
An appeal was taken from said order. SC held the
evidence before the probate court sufficient to prove
the loss of the will and remanded the case to CFI.
In spite of the fact that a commission from the probate
court was issued on 24 Apr. 1937 for the taking of the
deposition of Go Toh, an attesting witness to the will,
the probate court denied a motion for continuance of
the hearing sent by cablegram from China by the
surviving widow and dismissed the petition.
Later, claiming that he had found among the files,
records and documents of his late father, a will in
Chinese characters executed by Jose on 4 Jan. 1931
and that the same was probated in China, Silvino
Suntay filed a petition in the intestate proceedings
praying for the probate of the will executed in the PH
on Nov. 1929 or of the will executed in China, on 4
Jan. 1931.
ISSUE:
HELD: no merit in the contention that Pet. Silvino
Suntay and his mother Maria Natividad are estopped
from asking for the probate of the lost will or of the
foreign will because of the assignment of their share
right, title and interest in the estate of Jose Suntay to
Jose Gutierrez and Sps. Goño and the subsequent
assignment thereof to Francisco Pascual and by the
latter to Federico Suntay.
The validity and legality of such assignments cannot
be threshed out in this proceedings which is concerned
only with the probate of the will executed in the PH or
of the foreign will allegedly executed in China and
claimed to have been probated in China.
As to the lost will, Sec. 6, Rule 77, provides: “No will
shall be proved as a lost or destroyed will unless the
execution and validity of the same be established, and the
will is proved to have been in existence at the time of the
death of the testator, or is shown to have been fraudulently
or accidentally destroyed in the lifetime of the testator
without his knowledge, nor unless its provisions are clearly
and distinctly proved by at least two credible witnesses.
When a lost will is proved, the provisions thereof must be
distinctly stated and certified by the judge, under the seal of
the court, and the certificate must be filed and recorded as
other wills are filed and recorded.”
The witnesses who testified to the provisions of the
lost will are Go Toh, an attesting witness, Anastacio
Teodoro and Ana Suntay. Manuel Lopez, who was an
attesting witness, was dead at the time of the hearing.
In his deposition Go Toh testifies that he was one of
the witnesses to the lost will signed by Jose Suntay;
that he knew the contents of the will written in
Spanish although he knew very little of that language
and all he knows about the contends of the lost will
was revealed to him by Jose B. Suntay at the time it
was executed; Jose Suntay told him that the contents
thereof are the same as those of the draft which he saw
in the office of Alberto Barretto in Nov. 1929 when
the will was signed; Mrs. Suntay had the draft of the
will translated into Chinese and he read the
translation; he did not read the will and did not
compare it with the draft.
Other witnesses were also not able to prove that they
knew of the contents of said will.
Granting that there was a will duly executed by Jose
Suntay and that it was in existence at the time of, and
not revoked before, his death, still the testimony of
Anastacio (attesting witness to the will) alone falls short
of the legal requirement that the provisions of the lost
will must be "clearly and distinctly proved by at least
two credible witnesses."
As to the will claimed to have been executed on
China, the law on the point in Rule 78. Sec. 1 of the
rule provides: Wills proved and allowed in a foreign
country, according to the laws of such country, may be
allowed, filed, and recorded by the proper CFI in the PH.
Sec. 2: When a copy of such will and the allowance
thereof, duly authenticated, is filed with a petition for
allowance in the PH, by the executor or other person
interested, in the court having jurisdiction, such court shall
fix a time and place for the hearing, and cause notice
thereof to be given as in case of an original will presented
for allowance.
Sec. 3: If it appears at the hearing that the will should be
allowed in the PH, the court shall so allow it, and a
certificate of its allowance, signed by the Judge, and
attested by the seal of the courts, to which shall be attached
a copy of the will, shall be filed and recorded by the clerk,
and the will shall have the same effect as if originally
proved and allowed in such court.
The fact that the municipal district court of Amoy,
China, is a probate court must be proved. The law of
China on procedure in the probate or allowance of
wills must also be proved.
The legal requirements for the execution of a valid
will in China in 1931 should also be established by
competent evidence. There is no proof on these points.
The unverified answers to the questions propounded
by counsel for the appellant Silvino to the Consul
General of China, objected to by counsel for Federico
Suntay, are inadmissible, because apart from the fact
that the office of Consul General does not qualify and
make the person who holds it an expert on the Chinese
law on procedure in probate matters, if the same be
admitted, the adverse party would be deprived of his
right to confront and cross-examine the witness.
Consuls are appointed to attend to trade matters.
Moreover, all the proceedings in the municipal district
court of Amoy were for the purpose of taking the
testimony of two attesting witnesses to the will and
that the order of the municipal district court of Amoy
does not purport to probate the will.
In the absence of proof that the municipal district
court of Amoy is a probate court and on the Chinese
law of procedure in probate matters, it may be
presumed that the proceedings in the matter of
probating or allowing a will in the Chinese courts are
the a deposition or to a perpetuation of testimony, and
even if it were so it does not measure same as those
provided for in our laws on the subject.
It is a proceedings in rem and for the validity of such
proceedings personal notice or by publication or both
to all interested parties must be made.
The interested parties in the case were known to reside
in the PH. Evidence shows that no such notice was
received by the interested parties residing in the PH.
The proceedings in China, may be likened toe or come
up to the standard of such proceedings in the PH for
lack of notice to all interested parties and the
proceedings were held at the back of such interested
parties.
The order of the municipal district court of Amoy,
China does not purport to probate or allow the will
which was the subject of the proceedings.
Thus, the will and the alleged probate thereof cannot
be said to have been done in accordance with the
accepted basic and fundamental concepts and
principles followed in the probate and allowance of
wills. Consequently, the authenticated transcript of
proceedings held in China, cannot be accepted as
proceedings leading to the probate or allowance of a
will and, thus, the will referred to therein cannot be
allowed by a competent court of this country.
BOHANAN vs. BOHANAN
CFI Manila: dismissed the objections filed by herein
oppossitor-appellants, the Bohanans, to the project of
partition submitted by the executor (PH Trust Co) and
approving the said project.
Earlier, CFI admitted to probate a last will and
testament of C.O. Bohanan he executed on Apr. 23,
1944 in Manila.
CFI’s findings: notwithstanding the long residence of
the decedent in the PH, his stay here was merely
temporary; he remained to be a citizen of the U.S. 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 U.S. depended upon his personal
intent or desire, and he selected Nevada as his
domicile.thus, C. O. Bohanan’s will is fully in
accordance with the laws of Nevada and admits the
same to probate. Accordingly, PH Trust Co, named as
the executor of the will, is appointed to such executor.
The executor filed a project of partition making, in
accordance with the provisions of the will, the ff.
adjudications: 1) ½ of the residuary estate, to the
Farmers Bank of LA, California, in trust only for the
benefit of testator's grandson Edward Bohanan; 2) the
other half to the testator's brother, F.L. Bohanan, and
his sister, Mrs. M. B. Galbraith, share and share alike;
3) legacies of P6,000 each to C.O. BOhanan’s son,
and his daughter; 4) legacies to Clara Daen, Katherine
Woodward, Beulah Fox, and Elizabeth Hastings.
Thus, out of the total estate of P211,639.33, the
testator gave his grandson P90,819.67 and ½ 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.
The wife Magadalena and her 2 children questioned
the validity of the testamentary provisions, claiming
that they have been deprived of their legitie.
ISSUE: RE: share that Magdalena should be entitled to
received.
HELD: note that the will has not given her any share
in the estate left by the testator.
It is argued that TC erred in recognizing the Reno
divorce secured by the testator from his Filipino wife
Magdalena; that said divorce should be declared void
in this jurisdiction.
TC refused to recognize the claim of the widow on the
ground that the laws of Nevada (Sec.9905), 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.
Besides, the right of the former wife of the testator to
a share in the testator's estafa had already been passed
upon adversely against her in an order dated June 19,
1955 of CFI.
CFI found that there exists no community property
owned by the decedent and his former wife at the time
the decree of divorce was issued.
Magdalena may no longer question the fact contained
therein, i.e. that there was no community property
acquired by the testator and Magdalena during their
converture.
Moreover, CFI had found that the testator and
Magdalena were married on Jan. 30, 1909, and that
divorce was granted to him on May 20, 1922; that
sometime in 1925, Magdalena 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
CFI had already found that there was no conjugal
property between the testator and Magdalena, the
latter can no longer claim to pay portion of the estate
left by the testator.
RE: claim of the testator's children who had received
legacies of P6,000 each only
CHILDREN: they have not been given their shares in
the estate which, in accordance with the laws of the
forum, should be 2/3 of the estate left by the testator.
Is the failure old the testator to give his children 2/3 of
the estate left by him at the time of his death, in
accordance with the laws of the forum valid?
The old CC, which is applicable to this case, 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.
Hence, the question: whether the testementary
dispositions for the children which are short of the
legitime given them by the CC of the PH, are valid.
The laws of Nevada allow a testator to dispose of all
his properties by will.
It does not appear that at time of the hearing of the
project of partition, the Nevada law 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. “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 PH, with a certificate that such
officer has the custody.”
However, it appears that during the hearing on Oct. 4,
1954 of the motion of Magdalena for withdrawal of
P20,000 as her share, the foreign law--Sec. 9905,
Compiled Nevada Laws-- was introduced in evidence
by herein appellant's counsel. Again said laws
presented by the counsel for the executor and admitted
by the Court during the hearing of the case on Jan. 23,
1950 before Judge Rafael Amparo (CFI).
In addition, the children of the testator, do not dispute
said provision of the laws of Nevada.
Thus, the pertinent law of Nevada, i.e. Sec. 9905 of the
Compiled Nevada Laws of 1925, can be taken judicial
notice by our courts, without proof of such law having
been offered at the hearing of the project of partition.
As in accordance with Art. 10 of the old CC, the
validity of testamentary dispositions are to be
governed by the national law of the testator.
Since the national law of the testator is that of Nevada,
which allows a testator to dispose of all his property
according to his will, the order of the court approving
the project of partition made in accordance with the
testamentary provisions, must be affirmed.
ZALAMEA vs. CA
Pets.Sps. Zalamea, and their daughter purchased 3
airline tickets from the Manila agent of Rsp. TWA for
a flight to NY to LA on June 6, 1984. The tickets of the
Sps. were purchased at a discount of 75% while that
of their daughter was a full fare ticket. All three tickets
represented confirmed reservations.
While in NY, on June 4, Pets. received notice of the
reconfirmation of their reservations for said flight.
On June 6, however, Pets. checked in but were placed
on the wait-list; passengers who checked in before
them had already taken all the seats available on the
flight.
Out of the 42 names on the wait list, the first 22 names
were eventually allowed to board the flight, including
Pet. Cesar Zalamea. As it were, those holding full-fare
tickets were given first priority among the wait-listed
passengers. Mr. Zalamea, who was unaware to be
holding the full-fare ticket of his daughter, was
allowed to board the plane; while his wife and
daughter, who presented the discounted tickets were
denied boarding.
Even in the next TWA flight Mrs. Zalamea and her
daughter, could not be accommodated because it was
also fully booked. Tey were constrained to book in
another flight and purchased two tickets from
American Airlines.
Upon arrival in the PH, Pets. filed an action for
damages based on breach of contract of air carriage
before RTC Makati.
TC: in favour of the Zalameas. It categorically ruled
that Rsp. TWA breached its contract of carriage with
Pets. and said breach was characterized by bad faith.
CA: reversed; while there was breach of contract,
there was no fraud or bad faith because under the
Code of Federal Regulations by the Civil Aeronautics
Board of US, it is allowed to overbook flights.
ISSUE: W/N CA erred in holding that there was no fraud
or bad faith on the part of TWA because it has a right to
overbook flights.
HELD: There was fraud or bad faith on the part of
TWA when it did not allow Pets. to board their flight
for LA in spite of confirmed ticket.
The U.S. law or regulation allegedly authorizing
overbooking has never been proved.
Foreign laws do not prove themselves nor can the
courts take judicial notice of them. Like any other
fact, they must be alleged and proved.
Written law may be evidenced by an official
publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his
deputy, and accompanied with a certificate that such
officer has custody. The certificate may be made by a
secretary of an embassy or legation, consul general,
consul, vice-consul, or consular agent or by any
officer in the foreign service of the PH stationed in the
foreign country in which the record is kept, and
authenticated by the seal of his office.
TWA relied solely on the statement of Ms. Lather, its
customer service agent, in her deposition that the
Code of Federal Regulations of the Civil Aeronautics
Board allows overbooking.
Aside from said statement, no official publication of
said code was presented as evidence. CA has no basis
in finding that overbooking is specifically allowed by
the US Code of Federal Regulations.
Even if the claimed U.S. Code exists, the same is
inapplicable here in accordance with the principle of
lex loci contractus which require that the law of the
place where the airline ticket was issued should be
applied by the court where the passengers are
residents and nationals of the forum and the ticket is
issued in such State by the defendant airline.
ince the tickets were sold and issued in the PH, the
applicable law in this case would be PH law.
Existing jurisprudence explicitly states that
overbooking amounts to bad faith, entitling the
passengers concerned to an award of moral damages.
Even on the assumption that overbooking is allowed,
TWA is still guilty of bad faith in not informing its
passengers beforehand that it could breach the
contract of carriage even if they have confirmed
tickets if there was overbooking. TWA should have
incorporated stipulations on overbooking on the
tickets issued or to properly inform its passengers
about these policies so that the latter would be
prepared for such eventuality or would have the
choice to ride with another airline.
Moreover, TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority
to discounted tickets.
WILDVALLEY SHIPPING vs. CA
PH Roxas, a vessel owned by pr.rsp. PH President
Lines, arrived in Puerto Ordaz, Venezuela, to load iron
ore.
Upon completion of the loading and when the vessel
was ready to leave port, Mr. Vasquez (official pilot of
Venezuela), was designated by the harbour authorities
in Puerto Ordaz to pilot the PH Roxas through the
Orinoco River.
The captain of the PH Roxas, Cpt. Colon, was at the
bridge together with pilot Vasquez, among others,
when the vessel left the port. Colon left the bridge
when the vessel was under way.
The PH Roxas experienced some vibrations when it
entered the San Roque Channel. It proceeded on its
way, with the pilot assuring the watch officer that the
vibration was a result of the shallowness of the
channel.
After series of vibrations, the watch officer called the
master to the bridge. The master (captain) checked the
position of the vessel and verified that it was in the
centre of the channel. He ordered Simplicio Monis,
Chief Officer of the President Roxas, to check all the
double bottom tanks.
Subsequently, PH Roxas ran aground in the Orinoco
River, thus obstructing the ingress & egress of vessels.
As a result, the Malandrinon, a vessel of Pet.
Wildvalley, was unable to sail out of Puerto Ordaz.
Wildvalley then filed a suit with RTC Manila against
PH President Lines, Inc. for damages.
TC: in favor of Wildvalley, ordering PH President Lines,
Inc. to pay to Wildvalley. CA reversed.
ISSUE: W/N Venezuelan law is applicable.
HELD: Foreign laws do not prove themselves in our
jurisdiction and our courts are not authorized to take
judicial notice of them. They must be alleged and
proved.
A distinction is to be made as to the manner of proving a
written and an unwritten law.
Where the foreign law sought to be proved is
"unwritten," the oral testimony of expert witnesses is
admissible, as are printed and published books of
reports of decisions of the courts of the country
concerned if proved to be commonly admitted in such
courts. On the other hand, to prove written law, Sec.
24, Rule 132 of the RoC, must be complied with.
Note: Sec. 25 (now Sec. 24) includes competent evidence
like the testimony of a witness to prove the existence of a
written foreign law.
The competency of Cpt. Monzon, the Assistant
Harbor Master and Chief of Pilots at Puerto Ordaz,
Venezuela-- to testify on the existence of the
Reglamento General de la Ley de Pilotaje (pilotage law
of Venezuela) and the Reglamento Para la Zona de
Pilotaje No 1 del Orinoco (rules governing the
navigation of the Orinoco River)-- is not disputed.
Cpt. Monzon has held the aforementioned posts for
8yrs. As such, he is in charge of designating the pilots
for maneuvering and navigating the Orinoco River. He
is also in charge of the documents that come into the
office of the harbour masters.
Nevertheless, the above written laws were not proven
in the manner provided by Sec. 24 of Rule 132, RoC.
The Reglamento General de la Ley de Pilotaje was
published in the Gaceta Oficial of Venezuela. A
photocopy of the Gaceta Oficial was presented in
evidence as an official publication of Venezuela. The
Reglamento Para la Zona de Pilotaje No 1 del Orinoco is
published in a book issued by the Ministerio de
Comunicaciones of Venezuela. Only a photocopy of the
said rules was likewise presented as evidence.
Both of these documents are considered in PH as
public documents for they are the written official acts,
or records of the official acts of the sovereign
authority, official bodies and tribunals, and public
officers of Venezuela.
For a copy of a foreign public document to be
admissible, the ff. must be complied with: 1) It must
be attested by the officer having legal custody of the
records or by his deputy; and 2) It must be
accompanied by a certificate by a secretary of the
embassy or legation, consul general, consul, vice
consular or consular agent or foreign service officer,
and with the seal of his office.
It is not enough that the Gaceta Oficial, or a book
published by the Ministerio de Comunicaciones of
Venezuela, was presented as evidence with
Cpt.Monzon attesting it.
It is also required by the RoC that a certificate that
Captain Monzon, who attested the documents, is the
officer who had legal custody of those records made
by a secretary of the embassy or legation, consul
general, consul, vice consul or consular agent or by
any officer in the foreign service of the PH stationed
in Venezuela, and authenticated by the seal of his
office accompanying the copy of the public document.
No such certificate was presented here.
With respect to proof of written laws, parol proof is
objectionable bec. the written law itself is the best
evidence. When a foreign statute is involved, the best
evidence rule requires that it be proved by a duly
authenticated copy of the statute.
The Venezuelan law was not pleaded before the lower
court. A foreign law is considered to be pleaded if
there is an allegation in the pleading about the
existence of the foreign law, its import and legal
consequence on the event or transaction in issue.
Here, the Complaint did not allege or invoke said law
despite the fact that the grounding of the PH Roxas
occurred within the territory of Venezuela.
Accordingly, in the absence of pleading and proof, the
laws of a foreign country, or state, will be presumed to
be the same as our own local or domestic law -- Pilot Vasquez testified that he is an official pilot in the
processual presumption. Harbour at Port Ordaz, Venezuela, and had been a pilot
for 12yrs. He also had experience in navigating the
Re: assigned errors by the Pet. waters of the Orinoco River.

PET.: there was negligence on the part of the pr.Rsp. that
would warrant the award of damages.
SC: There being no contractual obligation, the pr.Rsp. is
obliged to give only the diligence required of a good
father of a family in accordance with the provisions of
Art. 1173 of the NCC.
Such degree of diligence was exercised by pr.rsp. when
the vessel sailed only after the "main engine,
machineries, and other auxiliaries" were checked and
found to be in good running condition; when the master
left a competent officer, the officer on watch on the
bridge with a pilot who is experienced in navigating the
Orinoco River; when the master ordered the inspection
of the vessel's double bottom tanks when the vibrations
occurred anew.
PH rules on pilotage --Rules and Regulations Governing
Pilotage Services, the Conduct of Pilots and Pilotage
Fees in PH Ports-- enunciate the duties and
responsibilities of a master of a vessel and its pilot,
among other things.
The law provides that the master can countermand the
order of the harbor pilot on board. The master of the PH
Roxas deemed it best not to order the pilot to stop the
vessel because the latter had assured him that they were
navigating normally before the grounding of the vessel.
Moreover, the pilot had admitted that on account of his
experience he was very familiar with the configuration
of the river as well as the course headings, and that he
does not even refer to river charts when navigating the
Orinoco River.
Thus, it comes as no surprise to us that the master chose
not to regain control of the ship. Admitting his limited
knowledge of the Orinoco River, Cpt. Colon relied on
the knowledge and experience of pilot Vasquez to guide
the vessel safely.
Thus, the grounding of the vessel is attributable to the
pilot. When the vibrations were first felt the watch
officer asked him what was going on, and pilot Vasquez
replied that they were in the middle of the channel and
that the vibration was as a result of the shallowness of
the channel.

The Code of Commerce likewise provides for the Pilot Vasquez was assigned to pilot the vessel PH Roxas
obligations expected of a captain of a vessel. as well as other vessels on the Orinoco River due to his
knowledge of the same. In his experience as a pilot, he
should have been aware of the portions which are
Based on the above rules, the master remains the overall
shallow and which are not. His failure to determine the
commander of the vessel even when there is a pilot on
depth of the said river and his decision to plod on his set
board. He remains in control of the ship as he can still
course, in all probability, caused damage to the vessel.
perform the duties conferred upon him by law despite
Thus, we hold him as negligent and liable for its
the presence of a pilot who is temporarily in charge of
grounding.
the vessel. He is not required to be on the bridge while
the vessel is being navigated by a pilot.

However, Sec. 8 of PPA Administrative Order No. 03-

85, provides: "Sec. 8. Compulsory Pilotage Service -
For entering a harbor and anchoring thereat, or passing
through rivers or straits within a pilotage district, as well
as docking and undocking at any pier/wharf, or shifting
from one berth or another, every vessel engaged in
coastwise and foreign trade shall be under compulsory
pilotage."

The Orinoco River, being a compulsory pilotage

channel, necessitated the engaging of a pilot who was
presumed to be knowledgeable of every shoal, bank,
deep and shallow ends of the river.