FIRST DIVISION

[G.R. No. 122191. October 8, 1998]

SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF APPEALS,
MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his
capacity as Presiding Judge of Branch 89, Regional Trial Court
of Quezon City, respondents.
D E C I S I O N
QUISUMBING, J .:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul
and set aside the Resolution
[1]
dated September 27, 1995 and the Decision
[2]
dated April
10, 1996 of the Court of Appeals
[3]
in CA-G.R. SP No. 36533,
[4]
and the Orders
[5]
dated
August 29, 1994
[6]
and February 2, 1995
[7]
that were issued by the trial court in Civil Case
No. Q-93-18394.
[8]

The pertinent antecedent facts which gave rise to the instant petition, as stated in
the questioned Decision
[9]
, are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight
Attendant for its airlines based in Jeddah, Saudi Arabia. x x x
On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff
went to a disco dance with fellow crew members Thamer Al-Gazzawi
and Allah Al-Gazzawi, both Saudi nationals. Because it was almost
morning when they returned to their hotels, they agreed to have
breakfast together at the room of Thamer. When they were in te (sic)
room, Allah left on some pretext. Shortly after he did, Thamer
attempted to rape plaintiff. Fortunately, a roomboy and several security
personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi,
the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA
officials interrogated her about the Jakarta incident. They then
requested her to go back to Jakarta to help arrange the release of
Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and
base manager Baharini negotiated with the police for the immediate
release of the detained crew members but did not succeed because
plaintiff refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to understand
the local dialect. She also declined to sign a blank paper and a
document written in the local dialect. Eventually, SAUDIA allowed
plaintiff to return to Jeddah but barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDI (sic). In September 1990, defendant
SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors requested her to see
Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi
Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and allowed
her to catch the afternoon flight out of Jeddah.
One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia,
a few minutes before the departure of her flight to Manila, plaintiff was
not allowed to board the plane and instead ordered to take a later flight
to Jeddah to see Mr. Miniewy, the Chief Legal Officer of
SAUDIA. When she did, a certain Khalid of the SAUDIA office brought
her to a Saudi court where she was asked to sign a document written
in Arabic. They told her that this was necessary to close the case
against Thamer and Allah. As it turned out, plaintiff signed a notice to
her to appear before the court on June 27, 1993. Plaintiff then returned
to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to
Jeddah once again and see Miniewy on June 27, 1993 for further
investigation. Plaintiff did so after receiving assurance from SAUDIAs
Manila manager, Aslam Saleemi, that the investigation was routinary
and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi
court on June 27, 1993. Nothing happened then but on June 28, 1993,
a Saudi judge interrogated plaintiff through an interpreter about the
Jakarta incident. After one hour of interrogation, they let her go. At the
airport, however, just as her plane was about to take off, a SAUDIA
officer told her that the airline had forbidden her to take flight. At the
Inflight Service Office where she was told to go, the secretary of Mr.
Yahya Saddick took away her passport and told her to remain in
Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the
same court where the judge, to her astonishment and shock, rendered
a decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the
Saudi court had tried her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
going to a disco, dancing and listening to the music in violation of
Islamic laws; and (3) socializing with the male crew, in contravention of
Islamic tradition.
[10]

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

Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila,
[12]
she was terminated from the service by SAUDIA, without her being informed
of the cause.
On November 23, 1993, Morada filed a Complaint
[13]
for damages against SAUDIA,
and Khaled Al-Balawi (Al- Balawi), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss
[14]
which raised
the following grounds, to wit: (1) that the Complaint states no cause of action against
Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or
demand set forth in the Complaint has been waived, abandoned or otherwise
extinguished; and (4) that the trial court has no jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss)
[15]
Saudia
filed a reply
[16]
thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint
[17]
wherein Al-Balawi was
dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and
Motion to Dismiss Amended Complaint
[18]
.
The trial court issued an Order
[19]
dated August 29, 1994 denying the Motion to
Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judge
[20]
denying the Motion to Dismiss, SAUDIA filed
on September 20, 1994, its Motion for Reconsideration
[21]
of the Order dated August 29,
1994. It alleged that the trial court has no jurisdiction to hear and try the case on the
basis of Article 21 of the Civil Code, since the proper law applicable is the law of the
Kingdom of Saudi Arabia. On October 14, 1994, Morada filed her Opposition
[22]
(To
Defendants Motion for Reconsideration).
In the Reply
[23]
filed with the trial court on October 24, 1994, SAUDIA alleged that
since its Motion for Reconsideration raised lack of jurisdiction as its cause of action, the
Omnibus Motion Rule does not apply, even if that ground is raised for the first time on
appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial
interest in the prosecution of the instant case, and hence, without jurisdiction to
adjudicate the same.
Respondent Judge subsequently issued another Order
[24]
dated February 2, 1995,
denying SAUDIAs Motion for Reconsideration. The pertinent portion of the assailed
Order reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian
Airlines filed, thru counsel, on September 20, 1994, and the
Opposition thereto of the plaintiff filed, thru counsel, on October 14,
1994, as well as the Reply therewith of defendant Saudi Arabian
Airlines filed, thru counsel, on October 24, 1994, considering that a
perusal of the plaintiffs Amended Complaint, which is one for the
recovery of actual, moral and exemplary damages plus attorneys
fees, upon the basis of the applicable Philippine law, Article 21 of the
New Civil Code of the Philippines, is, clearly, within the jurisdiction of
this Court as regards the subject matter, and there being nothing new
of substance which might cause the reversal or modification of the
order sought to be reconsidered, the motion for reconsideration of the
defendant, is DENIED.
SO ORDERED.
[25]

Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary
Restraining Order
[26]
with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with Temporary
Restraining Order
[27]
dated February 23, 1995, prohibiting the respondent Judge from
further conducting any proceeding, unless otherwise directed, in the interim.
In another Resolution
[28]
promulgated on September 27, 1995, now assailed, the
appellate court denied SAUDIAs Petition for the Issuance of a Writ of Preliminary
Injunction dated February 18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction is
hereby DENIED, after considering the Answer, with Prayer to Deny
Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder,
it appearing that herein petitioner is not clearly entitled thereto
(Unciano Paramedical College, et. Al., v. Court of Appeals, et. Al.,
100335, April 7, 1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the instant
Petition
[29]
for Review with Prayer for Temporary Restraining Order dated October 13,
1995.
However, during the pendency of the instant Petition, respondent Court of Appeals
rendered the Decision
[30]
dated April 10, 1996, now also assailed. It ruled that the
Philippines is an appropriate forum considering that the Amended Complaints basis for
recovery of damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in
a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to
trial, and in case of an adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for
Temporary Restraining Order
[31]
dated April 30, 1996, given due course by this
Court. After both parties submitted their Memoranda,
[32]
the instant case is now deemed
submitted for decision.
Petitioner SAUDIA raised the following issues:
I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394
based on Article 21 of the New Civil Code since the proper law applicable is
the law of the Kingdom of Saudi Arabia inasmuch as this case involves what
is known in private international law as a conflicts problem. Otherwise, the
Republic of the Philippines will sit in judgment of the acts done by another
sovereign state which is abhorred.
II.
Leave of court before filing a supplemental pleading is not a jurisdictional
requirement. Besides, the matter as to absence of leave of court is now moot
and academic when this Honorable Court required the respondents to
comment on petitioners April 30, 1996 Supplemental Petition For Review
With Prayer For A Temporary Restraining Order Within Ten (10) Days From
Notice Thereof. Further, the Revised Rules of Court should be construed with
liberality pursuant to Section 2, Rule 1 thereof.
III.
Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R.
SP NO. 36533 entitled Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al.
and filed its April 30, 1996 Supplemental Petition For Review With Prayer For
A Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-
day reglementary period as provided for under Section 1, Rule 45 of the
Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533
has not yet become final and executory and this Honorable Court can take
cognizance of this case.
[33]

From the foregoing factual and procedural antecedents, the following issues
emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON CITY
HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-
18394 ENTITLED MILAGROS P. MORADA V. SAUDI ARABIAN
AIRLINES.
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING
THAT IN THE CASE PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at
the outset. It maintains that private respondents claim for alleged abuse of rights
occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign
element qualifies the instant case for the application of the law of the Kingdom of Saudi
Arabia, by virtue of the lex loci delicti commissirule.
[34]

On the other hand, private respondent contends that since her Amended Complaint
is based on Articles 19
[35]
and 21
[36]
of the Civil Code, then the instant case is properly a
matter of domestic law.
[37]

Under the factual antecedents obtaining in this case, there is no dispute that the
interplay of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint
[38]
dated June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign
airlines corporation doing business in the Philippines. It may be
served with summons and other court processes at Travel Wide
Associated Sales (Phils.), Inc., 3
rd
Floor, Cougar Building, 114 Valero
St., Salcedo Village, Makati, Metro Manila.
x x x x x x x x x
6. Plaintiff learned that, through the intercession of the Saudi
Arabian government, the Indonesian authorities agreed to deport
Thamer and Allah after two weeks of detention. Eventually, they were
again put in service by defendant SAUDIA. In September 1990,
defendant SAUDIA transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors requested her to see
MR. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi
Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and
allowed her to catch the afternoon flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal
Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA
office brought her to a Saudi court where she was asked to sign a
document written in Arabic. They told her that this was necessary to
close the case against Thamer and Allah. As it turned out, plaintiff
signed a notice to her to appear before the court on June 27,
1993. Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27, 1993 for
further investigation. Plaintiff did so after receiving assurance from
SAUDIAs Manila manager, Aslam Saleemi, that the investigation was
routinary and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same
Saudi court on June 27, 1993. Nothing happened then but on June
28, 1993, a Saudi judge interrogated plaintiff through an interpreter
about the Jakarta incident. After one hour of interrogation, they let her
go. At the airport, however, just as her plane was about to take off, a
SAUDIA officer told her that the airline had forbidden her to take that
flight. At the Inflight Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her passport and told her to
remain in Jeddah, at the crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to
the same court where the judge, to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to five
months imprisonment and to 286 lashes. Only then did she realize
that the Saudi court had tried her, together with Thamer and Allah, for
what happened in Jakarta. The court found plaintiff guilty of (1)
adultery; (2) going to a disco, dancing, and listening to the music in
violation of Islamic laws; (3) socializing with the male crew, in
contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff
sought the help of the Philippine Embassy in Jeddah. The latter
helped her pursue an appeal from the decision of the court. To pay for
her upkeep, she worked on the domestic flights of defendant SAUDIA
while, ironically, Thamer and Allah freely served the international
flights.
[39]

Where the factual antecedents satisfactorily establish the existence of a foreign
element, we agree with petitioner that the problem herein could present a conflicts
case.
A factual situation that cuts across territorial lines and is affected by the diverse
laws of two or more states is said to contain a foreign element. The presence of a
foreign element is inevitable since social and economic affairs of individuals and
associations are rarely confined to the geographic limits of their birth or conception.
[40]

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

In the instant case, the foreign element consisted in the fact that private respondent
Morada is a resident Philippine national, and that petitioner SAUDIA is a resident
foreign corporation. Also, by virtue of the employment of Morada with the petitioner
Saudia as a flight stewardess, events did transpire during her many occasions of travel
across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia,
and vice versa, that caused a conflicts situation to arise.
We thus find private respondents assertion that the case is purely domestic,
imprecise. A conflicts problem presents itself here, and the question of
jurisdiction
[43]
confronts the court a quo.
After a careful study of the private respondents Amended Complaint,
[44]
and the
Comment thereon, we note that she aptly predicated her cause of action on Articles 19
and 21 of the New Civil Code.
On one hand, Article 19 of the New Civil Code provides;
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice give everyone his due and
observe honesty and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals,
[45]
this Court held that:
The aforecited provisions on human relations were intended to
expand the concept of torts in this jurisdiction by granting adequate
legal remedy for the untold number of moral wrongs which is
impossible for human foresight to specifically provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21 gives flesh to its
provisions. Thus, we agree with private respondents assertion that violations of Articles
19 and 21 are actionable, with judicially enforceable remedies in the municipal forum.
Based on the allegations
[46]
in the Amended Complaint, read in the light of the Rules
of Court on jurisdiction
[47]
we find that the Regional Trial Court (RTC) of Quezon City
possesses jurisdiction over the subject matter of the suit.
[48]
Its authority to try and hear
the case is provided for under Section 1 of Republic Act No. 7691, to wit:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known
as the Judiciary Reorganization Act of 1980, is hereby amended to
read as follows:
SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise
exclusive jurisdiction:
x x x x x x x x x
(8) In all other cases in which demand, exclusive of interest, damages of
whatever kind, attorneys fees, litigation expenses, and costs or the value of
the property in controversy exceeds One hundred thousand pesos
(P100,000.00) or, in such other cases in Metro Manila, where the demand,
exclusive of the above-mentioned items exceeds Two hundred Thousand
pesos (P200,000.00). (Emphasis ours)
x x x x x x x x x
And following Section 2 (b), Rule 4 of the Revised Rules of Courtthe venue,
Quezon City, is appropriate:
SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
(a) x x x x x x x x x
(b) Personal actions. All other actions may be commenced and tried
where the defendant or any of the defendants resides or may be
found, or where the plaintiff or any of the plaintiff resides, at the
election of the plaintiff.
Pragmatic considerations, including the convenience of the parties, also weigh
heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the private
interest of the litigant. Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are equally
important. Plaintiff may not, by choice of an inconvenient forum, vex, harass, or
oppress the defendant, e.g. by inflicting upon him needless expense or
disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs
choice of forum should rarely be disturbed.
[49]

Weighing the relative claims of the parties, the court a quo found it best to hear the
case in the Philippines. Had it refused to take cognizance of the case, it would be
forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the
Kingdom of Saudi Arabia where she no longer maintains substantial connections. That
would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of the
plaintiff (now private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the parties
herein. By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several motions
[50]
praying for the
dismissal of Moradas Amended Complaint. SAUDIA also filed an Answer In Ex
Abundante Cautelamdated February 20, 1995. What is very patent and explicit from the
motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably,
petitioner SAUDIA has effectively submitted to the trial courts jurisdiction by praying for
the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.:
[51]

We observe that the motion to dismiss filed on April 14, 1962, aside
from disputing the lower courts jurisdiction over defendants person,
prayed for dismissal of the complaint on the ground that plaintiffs
cause of action has prescribed. By interposing such second ground in
its motion to dismiss, Ker and Co., Ltd. availed of an affirmative
defense on the basis of which it prayed the court to resolve
controversy in its favor. For the court to validly decide the said plea of
defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction
upon the latters person, who, being the proponent of the affirmative
defense, should be deemed to have abandoned its special
appearance and voluntarily submitted itself to the jurisdiction of the
court.
Similarly, the case of De Midgely vs. Ferandos, held that:
When the appearance is by motion for the purpose of objecting to the
jurisdiction of the court over the person, it must be for the sole and
separate purpose of objecting to the jurisdiction of the court. If his
motion is for any other purpose than to object to the jurisdiction of the
court over his person, he thereby submits himself to the jurisdiction of
the court. A special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will be held to
be a general appearance, if the party in said motion should, for
example, ask for a dismissal of the action upon the further ground that
the court had no jurisdiction over the subject matter.
[52]

Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of
Quezon City. Thus, we find that the trial court has jurisdiction over the case and that its
exercise thereof, justified.
As to the choice of applicable law, we note that choice-of-law problems seek to
answer two important questions: (1) What legal system should control a given situation
where some of the significant facts occurred in two or more states; and (2) to what
extent should the chosen legal system regulate the situation.
[53]

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

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

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

Note that one or more circumstances may be present to serve as the possible test
for the determination of the applicable law.
[59]
These test factors or points of contact or
connecting factors could be any of the following:
(1) The nationality of a person, his domicile, his residence, his place
of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed
to be situated. In particular, the lex situs is decisive when real rights
are involved;
(4) the place where an act has been done, the locus actus, such
as the place where a contract has been made, a marriage
celebrated, a will signed or a tort committed. The lex loci actus is
particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the
place of performance of contractual duties, or the place where a power
of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should
govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted
or done. The lex forithe law of the forumis particularly important
because, as we have seen earlier, matters of procedure not going to
the substance of the claim involved are governed by it; and because
the lex fori applies whenever the content of the otherwise applicable
foreign law is excluded from application in a given case for the reason
that it falls under one of the exceptions to the applications of foreign
law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of
affreightment.
[60]
(Underscoring ours.)
After a careful study of the pleadings on record, including allegations in the
Amended Complaint deemed submitted for purposes of the motion to dismiss, we are
convinced that there is reasonable basis for private respondents assertion that although
she was already working in Manila, petitioner brought her to Jeddah on the pretense
that she would merely testify in an investigation of the charges she made against the
two SAUDIA crew members for the attack on her person while they were in Jakarta. As
it turned out, she was the one made to face trial for very serious charges, including
adultery and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the handing over or
turning over of the person of private respondent to Jeddah officials, petitioner may
have acted beyond its duties as employer. Petitioners purported act contributed to and
amplified or even proximately caused additional humiliation, misery and suffering of
private respondent. Petitioner thereby allegedly facilitated the arrest, detention and
prosecution of private respondent under the guise of petitioners authority as employer,
taking advantage of the trust, confidence and faith she reposed upon it. As purportedly
found by the Prince of Makkah, the alleged conviction and imprisonment of private
respondent was wrongful. But these capped the injury or harm allegedly inflicted upon
her person and reputation, for which petitioner could be liable as claimed, to provide
compensation or redress for the wrongs done, once duly proven.
Considering that the complaint in the court a quo is one involving torts, the
connecting factor or point of contact could be the place or places where the tortious
conduct or lex loci actusoccurred. And applying the torts principle in a conflicts case,
we find that the Philippines could be said as a situs of the tort (the place where the
alleged tortious conduct took place). This is because it is in the Philippines where
petitioner allegedly deceived private respondent, a Filipina residing and working
here. According to her, she had honestly believed that petitioner would, in the exercise
of its rights and in the performance of its duties, act with justice, give her her due and
observe honesty and good faith. Instead, petitioner failed to protect her, she
claimed. That certain acts or parts of the injury allegedly occurred in another country is
of no moment. For in our view what is important here is the place where the over-all
harm or the fatality of the alleged injury to the person, reputation, social standing and
human rights of complainant, had lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the Philippines as the situs of the
alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti
commissi, modern theories and rules on tort liability
[61]
have been advanced to offer fresh
judicial approaches to arrive at just results. In keeping abreast with the modern
theories on tort liability, we find here an occasion to apply the State of the most
significant relationship rule, which in our view should be appropriate to apply now,
given the factual context of this case.
In applying said principle to determine the State which has the most significant
relationship, the following contacts are to be taken into account and evaluated
according to their relative importance with respect to the particular issue: (a) the place
where the injury occurred; (b) the place where the conduct causing the injury occurred;
(c) the domicile, residence, nationality, place of incorporation and place of business of
the parties, and (d) the place where the relationship, if any, between the parties is
centered.
[62]

As already discussed, there is basis for the claim that over-all injury occurred and
lodged in the Philippines. There is likewise no question that private respondent is a
resident Filipina national, working with petitioner, a resident foreign corporation engaged
here in the business of international air carriage. Thus, the relationship between the
parties was centered here, although it should be stressed that this suit is not based on
mere labor law violations. From the record, the claim that the Philippines has the most
significant contact with the matter in this dispute,
[63]
raised by private respondent as
plaintiff below against defendant (herein petitioner), in our view, has been properly
established.
Prescinding from this premise that the Philippines is the situs of the tort complaint of
and the place having the most interest in the problem, we find, by way of
recapitulation, that the Philippine law on tort liability should have paramount application
to and control in the resolution of the legal issues arising out of this case. Further, we
hold that the respondent Regional Trial Court has jurisdiction over the parties and the
subject matter of the complaint; the appropriate venue is in Quezon City, which could
properly apply Philippine law. Moreover, we find untenable petitioners insistence that
[s]ince private respondent instituted this suit, she has the burden of pleading and
proving the applicable Saudi law on the matter.
[64]
As aptly said by private respondent,
she has no obligation to plead and prove the law of the Kingdom of Saudi Arabia since
her cause of action is based on Articles 19 and 21 of the Civil Code of the
Philippines. In her Amended Complaint and subsequent pleadings she never alleged
that Saudi law should govern this case.
[65]
And as correctly held by the respondent
appellate court, considering that it was the petitioner who was invoking the applicability
of the law of Saudi Arabia, thus the burden was on it [petitioner] to plead and to
establish what the law of Saudi Arabia is.
[66]

Lastly, no error could be imputed to the respondent appellate court in upholding the
trial courts denial of defendants (herein petitioners) motion to dismiss the case. Not
only was jurisdiction in order and venue properly laid, but appeal after trial was
obviously available, and the expeditious trial itself indicated by the nature of the case at
hand. Indubitably, the Philippines is the state intimately concerned with the ultimate
outcome of the case below not just for the benefit of all the litigants, but also for the
vindication of the countrys system of law and justice in a transnational setting. With
these guidelines in mind, the trial court must proceed to try and adjudge the case in the
light of relevant Philippine law, with due consideration of the foreign element or
elements involved. Nothing said herein, of course, should be construed as prejudging
the results of the case in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case
No. Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby
REMANDED to Regional Trial Court of Quezon City, Branch 89 for further proceedings.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Panganiban, JJ., concur



































THIRD DIVISION


ATCI OVERSEAS
CORPORATION, AMALIA
G. IKDAL and MINISTRY
OF PUBLIC HEALTH-
KUWAIT
Petitioners,


- versus -



MA. JOSEFA ECHIN,
Respondent.

G.R. No. 178551

Present:

CARPIO MORALES, Chairperson, J.,
BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.


Promulgated:

October 11, 2010
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x



D E C I S I O N

CARPIO MORALES, J .:

Josefina Echin (respondent) was hired by petitioner ATCI Overseas
Corporation in behalf of its principal-co-petitioner, the Ministry of Public Health
of Kuwait (the Ministry), for the position of medical technologist under a two-year
contract, denominated as a Memorandum of Agreement (MOA), with a monthly
salary of US$1,200.00.

Under the MOA,
[1]
all newly-hired employees undergo a probationary period
of one (1) year and are covered by Kuwaits Civil Service Board Employment
Contract No. 2.

Respondent was deployed on February 17, 2000 but was terminated from
employment on February 11, 2001, she not having allegedly passed the
probationary period.

As the Ministry denied respondents request for reconsideration, she
returned to the Philippines on March 17, 2001, shouldering her own air fare.

On July 27, 2001, respondent filed with the National Labor Relations
Commission (NLRC) a complaint
[2]
for illegal dismissal against petitioner ATCI as
the local recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and
the Ministry, as the foreign principal.

By Decision
[3]
of November 29, 2002, the Labor Arbiter, finding that
petitioners neither showed that there was just cause to warrant respondents
dismissal nor that she failed to qualify as a regular employee, held that respondent
was illegally dismissed and accordingly ordered petitioners to pay her
US$3,600.00, representing her salary for the three months unexpired portion of
her contract.

On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor
Arbiters decision by Resolution
[4]
of January 26, 2004. Petitioners motion for
reconsideration having been denied by Resolution
[5]
of April 22, 2004, they
appealed to the Court of Appeals, contending that their principal, the Ministry,
being a foreign government agency, is immune from suit and, as such, the
immunity extended to them; and that respondent was validly dismissed for her
failure to meet the performance rating within the one-year period as required under
Kuwaits Civil Service Laws. Petitioners further contended that Ikdal should not be
liable as an officer of petitioner ATCI.

By Decision
[6]
of March 30, 2007, the appellate court affirmed the NLRC
Resolution.

In brushing aside petitioners contention that they only acted as agent of the
Ministry and that they cannot be held jointly and solidarily liable with it, the
appellate court noted that under the law, a private employment agency shall
assume all responsibilities for the implementation of the contract of employment of
an overseas worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of
employment.

As to Ikdals liability, the appellate court held that under Sec. 10 of Republic
Act No. 8042, the Migrant and Overseas Filipinos Act of 1995, corporate
officers, directors and partners of a recruitment agency may themselves be jointly
and solidarily liable with the recruitment agency for money claims and damages
awarded to overseas workers.

Petitioners motion for reconsideration having been denied by the appellate
court by Resolution
[7]
of June 27, 2007, the present petition for review on certiorari
was filed.

Petitioners maintain that they should not be held liable because respondents
employment contract specifically stipulates that her employment shall be governed
by the Civil Service Law and Regulations of Kuwait. They thus conclude that it
was patent error for the labor tribunals and the appellate court to apply the Labor
Code provisions governing probationary employment in deciding the present case.

Further, petitioners argue that even the Philippine Overseas Employment
Act (POEA) Rules relative to master employment contracts (Part III, Sec. 2 of the
POEA Rules and Regulations) accord respect to the customs, practices, company
policies and labor laws and legislation of the host country.

Finally, petitioners posit that assuming arguendo that Philippine labor laws
are applicable, given that the foreign principal is a government agency which is
immune from suit, as in fact it did not sign any document agreeing to be held
jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more
so since the Ministrys liability had not been judicially determined as jurisdiction
was not acquired over it.

The petition fails.

Petitioner ATCI, as a private recruitment agency, cannot evade
responsibility for the money claims of Overseas Filipino workers (OFWs) which it
deploys abroad by the mere expediency of claiming that its foreign principal is a
government agency clothed with immunity from suit, or that such foreign
principals liability must first be established before it, as agent, can be held jointly
and solidarily liable.

In providing for the joint and solidary liability of private recruitment
agencies with their foreign principals, Republic Act No. 8042 precisely affords the
OFWs with a recourse and assures them of immediate and sufficient payment of
what is due them. Skippers United Pacific v. Maguad
[8]
explains:

. . . [T]he obligations covenanted in the recruitment agreement
entered into by and between the local agent and its foreign principal
are not coterminous with the term of such agreementso that if either
or both of the parties decide to end the agreement, the responsibilities of
such parties towards the contracted employees under the agreement do
not at all end, but the same extends up to and until the expiration of the
employment contracts of the employees recruited and employed pursuant
to the said recruitment agreement. Otherwise, this will render
nugatory the very purpose for which the law governing the
employment of workers for foreign jobs abroad was
enacted. (emphasis supplied)

The imposition of joint and solidary liability is in line with the policy of the state to
protect and alleviate the plight of the working class.
[9]
Verily, to allow petitioners
to simply invoke the immunity from suit of its foreign principal or to wait for the
judicial determination of the foreign principals liability before petitioner can be
held liable renders the law on joint and solidary liability inutile.

As to petitioners contentions that Philippine labor laws on probationary
employment are not applicable since it was expressly provided in respondents
employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations as in fact POEA Rules accord respect to such rules, customs and
practices of the host country, the same was not substantiated.

Indeed, a contract freely entered into is considered the law between the
parties who can establish stipulations, clauses, terms and conditions as they may
deem convenient, including the laws which they wish to govern their respective
obligations, as long as they are not contrary to law, morals, good customs, public
order or public policy.

It is hornbook principle, however, that the party invoking the application of
a foreign law has the burden of proving the law, under the doctrine of processual
presumptionwhich, in this case, petitioners failed to discharge. The Courts ruling
in EDI-Staffbuilders Intl., v. NLRC
[10]
illuminates:


In the present case, the employment contract signed by Gran
specifically states that Saudi Labor Laws will govern matters not
provided for in the contract (e.g. specific causes for termination,
termination procedures, etc.). Being the law intended by the parties (lex
loci intentiones) to apply to the contract, Saudi Labor Laws should
govern all matters relating to the termination of the employment of Gran.

In international law, the party who wants to have a foreign law
applied to a dispute or case has the burden of proving the foreign
law. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take
judicial notice of a foreign law. He is presumed to know only domestic
or forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi
laws on the matter; thus, the International Law doctrine
of presumed-identity approach or processual presumption comes into
play. Where a foreign law is not pleaded or, even if pleaded, is not
proved, the presumption is that foreign law is the same as ours.
Thus, we apply Philippine labor laws in determining the issues
presented before us. (emphasis and underscoring supplied)


The Philippines does not take judicial notice of foreign laws, hence, they
must not only be alleged; they must be proven. To prove a foreign law, the party
invoking it must present a copy thereof and comply with Sections 24 and 25
of Rule 132 of the Revised Rules of Court which reads:

SEC. 24. Proof of official record. The record of public
documents referred to in paragraph (a) of Section 19, when admissible
for any purpose, 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, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. If the
office in which the record is kept is in a foreign country, the
certificate may be 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 Philippines stationed in the
foreign country in which the record is kept, and authenticated by the
seal of his office. (emphasis supplied)


SEC. 25. What attestation of copy must state. Whenever a
copy of a document or record is attested for the purpose of the evidence,
the attestation must state, in substance, that the copy is a correct copy of
the original, or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting officer, if there
be any, or if he be the clerk of a court having a seal, under the seal of
such court.

To prove the Kuwaiti law, petitioners submitted the following: MOA
between respondent and the Ministry, as represented by ATCI, which provides
that the employee is subject to a probationary period of one (1) year and that the
host countrys Civil Service Laws and Regulations apply; a translated
copy
[11]
(Arabic to English) of the termination letter to respondent stating that she
did not pass the probation terms, without specifying the grounds therefor, and a
translated copy of the certificate of termination,
[12]
both of which documents were
certified by Mr. Mustapha Alawi, Head of the Department of Foreign Affairs-
Office of Consular Affairs Inslamic Certification and Translation Unit; and
respondents letter
[13]
of reconsideration to the Ministry, wherein she noted that in
her first eight (8) months of employment, she was given a rating of Excellent
albeit it changed due to changes in her shift of work schedule.

These documents, whether taken singly or as a whole, do not sufficiently
prove that respondent was validly terminated as a probationary employee under
Kuwaiti civil service laws. Instead of submitting a copy of the pertinent
Kuwaiti labor laws duly authenticated and translated by Embassy officials
thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the MOA
and the termination letter which does not prove at all that Kuwaiti civil
service laws differ from Philippine laws and that under such Kuwaiti laws,
respondent was validly terminated. Thus the subject certifications read:

x x x x

This is to certify that the herein attached translation/s from Arabic
to English/Tagalog and or vice versa was/were presented to this Office
for review and certification and the same was/were found to be in
order. This Office, however, assumes no responsibility as to the
contents of the document/s.

This certification is being issued upon request of the interested
party for whatever legal purpose it may serve. (emphasis supplied)


Respecting Ikdals joint and solidary liability as a corporate officer, the same
is in order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 10. Money Claims.Notwithstanding any provision of law
to the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship
or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual moral, exemplary and
other forms of damages.
The liability of the principal/employer and the recruitment/placement
agency for any and all claims under this section shall be joint and
several. This provision shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as
provided by law, shall be answerable for all money claims or damages
that may be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the
aforesaid claims and damages. (emphasis and underscoring supplied)

WHEREFORE, the petition is DENIED.

SO ORDERED.





FIRST DIVISION
[G.R. No. 136804. February 19, 2003]
MANUFACTURERS HANOVER TRUST CO. and/or CHEMICAL
BANK, petitioners, vs. RAFAEL MA. GUERRERO, respondent.
D E C I S I O N
CARPIO, J .:
The Case
This is a petition for review under Rule 45 of the Rules of Court to set
aside the Court of Appeals
[1]
Decision of August 24, 1998 and Resolution of
December 14, 1998 in CA-G.R. SP No. 42310
[2]
affirming the trial courts denial
of petitioners motion for partial summary judgment.
The Antecedents
On May 17, 1994, respondent Rafael Ma. Guerrero (Guerrero for brevity)
filed a complaint for damages against petitioner Manufacturers Hanover Trust
Co. and/or Chemical Bank (the Bank for brevity) with the Regional Trial
Court of Manila (RTC for brevity). Guerrero sought payment of
damages allegedly for (1) illegally withheld taxes charged against interests
on his checking account with the Bank; (2) a returned check worth
US$18,000.00 due to signature verification problems; and (3) unauthorized
conversion of his account. Guerrero amended his complaint on April 18,
1995.
On September 1, 1995, the Bank filed its Answer alleging, inter alia, that
by stipulation Guerreros account is governed by New York law and this law
does not permit any of Guerreros claims except actual
damages. Subsequently, the Bank filed a Motion for Partial Summary
Judgment seeking the dismissal of Guerreros claims for consequential,
nominal, temperate, moral and exemplary damages as well as attorneys fees
on the same ground alleged in its Answer. The Bank contended that the trial
should be limited to the issue of actual damages. Guerrero opposed the
motion.
The affidavit of Alyssa Walden, a New York attorney, supported the Banks
Motion for Partial Summary Judgment. Alyssa Waldens affidavit (Walden
affidavit for brevity) stated that Guerreros New York bank account stipulated
that the governing law is New York law and that this law bars all of Guerreros
claims except actual damages. The Philippine Consular Office in New York
authenticated the Walden affidavit.
The RTC denied the Banks Motion for Partial Summary Judgment and its
motion for reconsideration on March 6, 1996 and July 17, 1996,
respectively. The Bank filed a petition for certiorari and prohibition with the
Court of Appeals assailing the RTC Orders. In its Decision dated August 24,
1998, the Court of Appeals dismissed the petition. On December 14, 1998,
the Court of Appeals denied the Banks motion for reconsideration.
Hence, the instant petition.
The Ruling of the Court of Appeals
The Court of Appeals sustained the RTC orders denying the motion for
partial summary judgment. The Court of Appeals ruled that the Walden
affidavit does not serve as proof of the New York law and jurisprudence relied
on by the Bank to support its motion. The Court of Appeals considered the
New York law and jurisprudence as public documents defined in Section 19,
Rule 132 of the Rules on Evidence, as follows:
SEC. 19. Classes of Documents. For the purpose of their presentation in evidence,
documents are either public or private.
Public documents are:
(a) The written official acts, or records of the official acts of the sovereign
authority, official bodies and tribunals, and public officers, whether of the
Philippines, or of a foreign country;
x x x.
The Court of Appeals opined that the following procedure outlined in
Section 24, Rule 132 should be followed in proving foreign law:
SEC. 24. Proof of official record. The record of public documents referred to in
paragraph (a) of Section 19, when admissible for any purpose, 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, if the record is not kept in
the Philippines, with a certificate that such officer has the custody. If the office in
which the record is kept is in a foreign country, the certificate may be 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 Philippines stationed in the foreign
country in which the record is kept, and authenticated by the seal of his office.
The Court of Appeals likewise rejected the Banks argument that Section
2, Rule 34 of the old Rules of Court allows the Bank to move with the
supporting Walden affidavit for partial summary judgment in its favor. The
Court of Appeals clarified that the Walden affidavit is not the supporting
affidavit referred to in Section 2, Rule 34 that would prove the lack of genuine
issue between the parties. The Court of Appeals concluded that even if the
Walden affidavit is used for purposes of summary judgment, the Bank must
still comply with the procedure prescribed by the Rules to prove the foreign
law.
The Issues
The Bank contends that the Court of Appeals committed reversible error in
-
x x x HOLDING THAT [THE BANKS] PROOF OF FACTS TO SUPPORT ITS
MOTION FOR SUMMARY JUDGMENT MAY NOT BE GIVEN BY AFFIDAVIT;
x x x HOLDING THAT [THE BANKS] AFFIDAVIT, WHICH PROVES
FOREIGN LAW AS A FACT, IS HEARSAY AND THEREBY CANNOT
SERVE AS PROOF OF THE NEW YORK LAW RELIED UPON BY
PETITIONERS IN THEIR MOTION FOR SUMMARY JUDGMENT x x x.
[3]

First, the Bank argues that in moving for partial summary judgment, it was
entitled to use the Walden affidavit to prove that the stipulated foreign law
bars the claims for consequential, moral, temperate, nominal and exemplary
damages and attorneys fees. Consequently, outright dismissal by summary
judgment of these claims is warranted.
Second, the Bank claims that the Court of Appeals mixed up the
requirements of Rule 35 on summary judgments and those of a trial on the
merits in considering the Walden affidavit as hearsay. The Bank points out
that the Walden affidavit is not hearsay since Rule 35 expressly permits the
use of affidavits.
Lastly, the Bank argues that since Guerrero did not submit any opposing
affidavit to refute the facts contained in the Walden affidavit, he failed to show
the need for a trial on his claims for damages other than actual.
The Courts Ruling
The petition is devoid of merit.
The Bank filed its motion for partial summary judgment pursuant to Section
2, Rule 34 of the old Rules of Court which reads:
Section 2. Summary judgment for defending party. A party against whom a claim,
counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any
time, move with supporting affidavits for a summary judgment in his favor as to all or
any part thereof.
A court may grant a summary judgment to settle expeditiously a case if, on
motion of either party, there appears from the pleadings, depositions,
admissions, and affidavits that no important issues of fact are involved, except
the amount of damages. In such event, the moving party is entitled to a
judgment as a matter of law.
[4]

In a motion for summary judgment, the crucial question is: are the issues
raised in the pleadings genuine, sham or fictitious, as shown by affidavits,
depositions or admissions accompanying the motion?
[5]

A genuine issue means an issue of fact which calls for the presentation of
evidence as distinguished from an issue which is fictitious or contrived so as
not to constitute a genuine issue for trial.
[6]

A perusal of the parties respective pleadings would show that there are
genuine issues of fact that necessitate formal trial. Guerreros complaint
before the RTC contains a statement of the ultimate facts on which he relies
for his claim for damages. He is seeking damages for what he asserts as
illegally withheld taxes charged against interests on his checking account
with the Bank, a returned check worth US$18,000.00 due to signature
verification problems, and unauthorized conversion of his account. In its
Answer, the Bank set up its defense that the agreed foreign law to govern
their contractual relation bars the recovery of damages other than
actual. Apparently, facts are asserted in Guerreros complaint while specific
denials and affirmative defenses are set out in the Banks answer.
True, the court can determine whether there are genuine issues in a case
based merely on the affidavits or counter-affidavits submitted by the parties to
the court. However, as correctly ruled by the Court of Appeals, the Banks
motion for partial summary judgment as supported by the Walden affidavit
does not demonstrate that Guerreros claims are sham, fictitious or
contrived. On the contrary, the Walden affidavit shows that the facts and
material allegations as pleaded by the parties are disputed and there are
substantial triable issues necessitating a formal trial.
There can be no summary judgment where questions of fact are in issue
or where material allegations of the pleadings are in dispute.
[7]
The resolution
of whether a foreign law allows only the recovery of actual damages is a
question of fact as far as the trial court is concerned since foreign laws do not
prove themselves in our courts.
[8]
Foreign laws are not a matter of judicial
notice.
[9]
Like any other fact, they must be alleged and proven. Certainly, the
conflicting allegations as to whether New York law or Philippine law applies to
Guerreros claims present a clear dispute on material allegations which can be
resolved only by a trial on the merits.
Under Section 24 of Rule 132, the record of public documents of a
sovereign authority or tribunal may be proved by (1) an official
publication thereof or (2) a copy attested by the officer having the legal
custody thereof. Such official publication or copy must be accompanied, if
the record is not kept in the Philippines, with a certificate that the attesting
officer has the legal custody thereof. The certificate may be issued by any of
the authorized Philippine embassy or consular officials stationed in the foreign
country in which the record is kept, and authenticated by the seal of his
office. The attestation must state, in substance, that the copy is a correct
copy of the original, or a specific part thereof, as the case may be, and must
be under the official seal of the attesting officer.
Certain exceptions to this rule were recognized in Asiavest Limited v.
Court of Appeals
[10]
which held that:
x x x:
Although it is desirable that foreign law be proved in accordance with the above rule,
however, the Supreme Court held in the case of Willamette Iron and Steel Works v.
Muzzal, that Section 41, Rule 123 (Section 25, Rule 132 of the Revised Rules of
Court) does not exclude the presentation of other competent evidence to prove the
existence of a foreign law. In that case, the Supreme Court considered the testimony
under oath of an attorney-at-law of San Francisco, California, who quoted verbatim a
section of California Civil Code and who stated that the same was in force at the time
the obligations were contracted, as sufficient evidence to establish the existence of
said law. Accordingly, in line with this view, the Supreme Court in the Collector of
Internal Revenue v. Fisher et al., upheld the Tax Court in considering the pertinent
law of California as proved by the respondents witness. In that case, the counsel for
respondent testified that as an active member of the California Bar since 1951, he is
familiar with the revenue and taxation laws of the State of California. When asked by
the lower court to state the pertinent California law as regards exemption of intangible
personal properties, the witness cited Article 4, Sec. 13851 (a) & (b) of the California
Internal and Revenue Code as published in Derrings California Code, a publication
of Bancroft-Whitney Co., Inc. And as part of his testimony, a full quotation of the
cited section was offered in evidence by respondents. Likewise, in several
naturalization cases, it was held by the Court that evidence of the law of a foreign
country on reciprocity regarding the acquisition of citizenship, although not meeting
the prescribed rule of practice, may be allowed and used as basis for favorable action,
if, in the light of all the circumstances, the Court is satisfied of the authenticity of the
written proof offered. Thus, in a number of decisions, mere authentication of the
Chinese Naturalization Law by the Chinese Consulate General of Manila was held to
be competent proof of that law. (Emphasis supplied)
The Bank, however, cannot rely on Willamette Iron and Steel Works v.
Muzzal or Collector of Internal Revenue v. Fisher to support its cause.
These cases involved attorneys testifying in open court during the trial in the
Philippines and quoting the particular foreign laws sought to be
established. On the other hand, the Walden affidavit was taken abroad ex
parte and the affiant never testified in open court. The Walden affidavit
cannot be considered as proof of New York law on damages not only because
it is self-serving but also because it does not state the specific New York law
on damages. We reproduce portions of the Walden affidavit as follows:
3. In New York, [n]ominal damages are damages in name only, trivial sums such
as six cents or $1. Such damages are awarded both in tort and contract cases when the
plaintiff establishes a cause of action against the defendant, but is unable to prove
actual damages. Dobbs, Law of Remedies, 3.32 at 294 (1993). Since Guerrero is
claiming for actual damages, he cannot ask for nominal damages.
4. There is no concept of temperate damages in New York law. I have reviewed
Dobbs, a well-respected treatise, which does not use the phrase temperate damages
in its index. I have also done a computerized search for the phrase in all published
New York cases, and have found no cases that use it. I have never heard the phrase
used in American law.
5. The Uniform Commercial Code (UCC) governs many aspects of a Banks
relationship with its depositors. In this case, it governs Guerreros claim arising out of
the non-payment of the $18,000 check. Guerrero claims that this was a wrongful
dishonor. However, the UCC states that justifiable refusal to pay or accept as
opposed to dishonor, occurs when a bank refuses to pay a check for reasons such as a
missing indorsement, a missing or illegible signature or a forgery, 3-510, Official
Comment 2. .. to the Complaint, MHT returned the check because it had no
signature card on . and could not verify Guerreros signature. In my opinion,
consistent with the UCC, that is a legitimate and justifiable reason not to pay.
6. Consequential damages are not available in the ordinary case of a justifiable refusal
to pay. UCC 1-106 provides that neither consequential or special or punitive
damages may be had except as specifically provided in the Act or by other rule of
law. UCC 4-103 further provides that consequential damages can be recovered only
where there is bad faith. This is more restrictive than the New York common law,
which may allow consequential damages in a breach of contract case (as does the
UCC where there is a wrongful dishonor).
7. Under New York law, requests for lost profits, damage to reputation and mental
distress are considered consequential damages. Kenford Co., Inc. v. Country of Erie,
73 N.Y.2d 312, 319, 540 N.Y.S.2d 1, 4-5 (1989) (lost profits); Motif Construction
Corp. v. Buffalo Savings Bank, 50 A.D.2d 718, 374 N.Y.S..2d 868, 869-70 (4
th
Dept
1975) damage to reputation); Dobbs, Law of Remedies 12.4(1) at 63 (emotional
distress).
8. As a matter of New York law, a claim for emotional distress cannot be recovered
for a breach of contract. Geler v. National Westminster Bank U.S.A., 770 F. Supp.
210, 215 (S.D.N.Y. 1991); Pitcherello v. Moray Homes, Ltd., 150 A.D.2d 860,540
N.Y.S.2d 387, 390 (3d Dept 1989) Martin v. Donald Park Acres, 54 A.D.2d 975, 389
N.Y.S..2d 31, 32 (2
nd
Dept 1976). Damage to reputation is also not recoverable for a
contract. Motif Construction Corp. v. Buffalo Savings Bank, 374 N.Y.S.2d at 869-70.
9. In cases where the issue is the breach of a contract to purchase stock, New York
courts will not take into consideration the performance of the stock after the
breach. Rather, damages will be based on the value of the stock at the time of the
breach, Aroneck v. Atkin, 90 A.D.2d 966, 456 N.Y.S.2d 558, 559 (4
th
Dept
1982), app. den. 59 N.Y.2d 601, 449 N.E.2d 1276, 463 N.Y.S.2d 1023 (1983).
10. Under New York law, a party can only get consequential damages if they were the
type that would naturally arise from the breach and if they were brought within the
contemplation of parties as the probable result of the breach at the time of or prior to
contracting. Kenford Co., Inc. v. Country of Erie, 73 N.Y.2d 312, 319, 540 N.Y.S.2d
1, 3 (1989), (quoting Chapman v. Fargo, 223 N.Y. 32, 36 (1918).
11. Under New York law, a plaintiff is not entitled to attorneys fees unless they are
provided by contract or statute. E.g., Geler v. National Westminster Bank, 770 F.
Supp. 210, 213 (S.D.N.Y. 1991); Camatron Sewing Mach, Inc. v. F.M. Ring Assocs.,
Inc., 179 A.D.2d 165, 582 N.Y.S.2d 396 (1
st
Dept 1992); Stanisic v. Soho Landmark
Assocs., 73 A.D.2d 268, 577 N.Y.S.2d 280, 281 (1
st
Dept 1991). There is no statute
that permits attorneys fees in a case of this type.
12. Exemplary, or punitive damages are not allowed for a breach of contract, even
where the plaintiff claims the defendant acted with malice. Geler v. National
Westminster Bank, 770 F.Supp. 210, 215 (S.D.N.Y. 1991);Catalogue Service of
chester
[11]
_v. Insurance Co. of North America, 74 A.D.2d 837, 838, 425 N.Y.S.2d
635, 637 (2d Dept 1980); Senior v. Manufacturers Hanover Trust Co., 110 A.D.2d
833, 488 N.Y.S.2d 241, 242 (2d Dept 1985).
13. Exemplary or punitive damages may be recovered only where it is alleged and
proven that the wrong supposedly committed by defendant amounts to a fraud aimed
at the public generally and involves a high moral culpability. Walker v. Sheldon, 10
N.Y.2d 401, 179 N.E.2d 497, 223 N.Y.S.2d 488 (1961).
14. Furthermore, it has been consistently held under New York law that exemplary
damages are not available for a mere breach of contract for in such a case, as a matter
of law, only a private wrong and not a public right is involved. Thaler v. The North
Insurance Company, 63 A.D.2d 921, 406 N.Y.S.2d 66 (1
st
Dept 1978).
[12]

The Walden affidavit states conclusions from the affiants personal
interpretation and opinion of the facts of the case vis a vis the alleged laws
and jurisprudence without citing any law in particular. The citations in the
Walden affidavit of various U.S. court decisions do not constitute proof of the
official records or decisions of the U.S. courts. While the Bank attached
copies of some of the U.S. court decisions cited in the Walden affidavit, these
copies do not comply with Section 24 of Rule 132 on proof of official records
or decisions of foreign courts.
The Banks intention in presenting the Walden affidavit is to prove New
York law and jurisprudence. However, because of the failure to comply with
Section 24 of Rule 132 on how to prove a foreign law and decisions of foreign
courts, the Walden affidavit did not prove the current state of New York law
and jurisprudence. Thus, the Bank has only alleged, but has not proved, what
New York law and jurisprudence are on the matters at issue.
Next, the Bank makes much of Guerreros failure to submit an opposing
affidavit to the Walden affidavit. However, the pertinent provision of Section 3,
Rule 35 of the old Rules of Court did not make the submission of an opposing
affidavit mandatory, thus:
SEC. 3. Motion and proceedings thereon. The motion shall be served at least ten
(10) days before the time specified for the hearing. The adverse party prior to the day
of hearing may serve opposing affidavits. After the hearing, the judgment sought
shall be rendered forthwith if the pleadings, depositions and admissions on file,
together with the affidavits, show that, except as to the amount of damages, there is no
genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law. (Emphasis supplied)
It is axiomatic that the term may as used in remedial law, is only permissive
and not mandatory.
[13]

Guerrero cannot be said to have admitted the averments in the Banks
motion for partial summary judgment and the Walden affidavit just because he
failed to file an opposing affidavit. Guerrero opposed the motion for partial
summary judgment, although he did not present an opposing
affidavit. Guerrero may not have presented an opposing affidavit, as there
was no need for one, because the Walden affidavit did not establish what the
Bank intended to prove. Certainly, Guerrero did not admit, expressly or
impliedly, the veracity of the statements in the Walden affidavit. The Bank still
had the burden of proving New York law and jurisprudence even if Guerrero
did not present an opposing affidavit. As the party moving for summary
judgment, the Bank has the burden of clearly demonstrating the absence of
any genuine issue of fact and that any doubt as to the existence of such issue
is resolved against the movant.
[14]

Moreover, it would have been redundant and pointless for Guerrero to
submit an opposing affidavit considering that what the Bank seeks to be
opposed is the very subject matter of the complaint. Guerrero need not file an
opposing affidavit to the Walden affidavit because his complaint itself
controverts the matters set forth in the Banks motion and the Walden
affidavit. A party should not be made to deny matters already averred in his
complaint.
There being substantial triable issues between the parties, the courts a
quo correctly denied the Banks motion for partial summary judgment. There
is a need to determine by presentation of evidence in a regular trial if the Bank
is guilty of any wrongdoing and if it is liable for damages under the applicable
laws.
This case has been delayed long enough by the Banks resort to a motion
for partial summary judgment. Ironically, the Bank has successfully defeated
the very purpose for which summary judgments were devised in our rules,
which is, to aid parties in avoiding the expense and loss of time involved in a
trial.
WHEREFORE, the petition is DENIED for lack of merit. The Decision
dated August 24, 1998 and the Resolution dated December 14, 1998 of the
Court of Appeals in CA-G.R. SP No. 42310 is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug and Azcuna, JJ., concur.
Ynares-Santiago, J., no part