Page 1 of 42

G.R. No. 162894

February 26, 2008

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

INC., petitioner,

DECISION
TINGA, J.:
Before this Court is a petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure which seeks the
reversal of the Decision1 and Resolution2 of the Court of
Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil
case filed by respondent against petitioner with the trial court.
As culled from the records of the case, the following
antecedents appear:
Sometime in 1990, Brand Marine Services, Inc. (BMSI), a
corporation duly organized and existing under the laws of the
State of Connecticut, United States of America, and
respondent Stockton W. Rouzie, Jr., an American citizen,
entered into a contract whereby BMSI hired respondent as its
representative to negotiate the sale of services in several
government projects in the Philippines for an agreed
remuneration of 10% of the gross receipts. On 11 March 1992,
respondent secured a service contract with the Republic of the
Philippines on behalf of BMSI for the dredging of rivers
affected by the Mt. Pinatubo eruption and mudflows.3
On 16 July 1994, respondent filed before the Arbitration Branch
of the National Labor Relations Commission (NLRC) a suit
against BMSI and Rust International, Inc. (RUST), Rodney C.
Gilbert and Walter G. Browning for alleged nonpayment of
commissions, illegal termination and breach of employment
contract.4 On 28 September 1995, Labor Arbiter Pablo C.
Espiritu, Jr. rendered judgment ordering BMSI and RUST to
pay respondents money claims.5 Upon appeal by BMSI, the
NLRC reversed the decision of the Labor Arbiter and dismissed
respondents complaint on the ground of lack of
jurisdiction.6 Respondent elevated the case to this Court but
was dismissed in a Resolution dated 26 November 1997. The
Resolution became final and executory on 09 November 1998.
On 8 January 1999, respondent, then a resident of La Union,
instituted an action for damages before the Regional Trial
Court (RTC) of Bauang, La Union. The Complaint, 7 docketed
as Civil Case No. 1192-BG, named as defendants herein
petitioner Raytheon International, Inc. as well as BMSI and
RUST, the two corporations impleaded in the earlier labor
case. The complaint essentially reiterated the allegations in the
labor case that BMSI verbally employed respondent to
negotiate the sale of services in government projects and that
respondent was not paid the commissions due him from the
Pinatubo dredging project which he secured on behalf of BMSI.
The complaint also averred that BMSI and RUST as well as
petitioner itself had combined and functioned as one company.
In its Answer,8 petitioner alleged that contrary to respondents
claim, it was a foreign corporation duly licensed to do business
in the Philippines and denied entering into any arrangement

with respondent or paying the latter any sum of money.

Petitioner also denied combining with BMSI and RUST for the
purpose of assuming the alleged obligation of the said
companies.9 Petitioner also referred to the NLRC decision
which disclosed that per the written agreement between
respondent and BMSI and RUST, denominated as "Special
Sales Representative Agreement," the rights and obligations of
the parties shall be governed by the laws of the State of
Connecticut.10 Petitioner sought the dismissal of the complaint
on grounds of failure to state a cause of action and forum non
conveniens and prayed for damages by way of compulsory
counterclaim.11
On 18 May 1999, petitioner filed an Omnibus Motion for
Preliminary Hearing Based on Affirmative Defenses and for
Summary Judgment12 seeking the dismissal of the complaint
on grounds of forum non conveniens and failure to state a
cause of action. Respondent opposed the same. Pending the
resolution of the omnibus motion, the deposition of Walter
Browning was taken before the Philippine Consulate General
in Chicago.13
In an Order14 dated 13 September 2000, the RTC denied
petitioners omnibus motion. The trial court held that the factual
allegations in the complaint, assuming the same to be
admitted, were sufficient for the trial court to render a valid
judgment thereon. It also ruled that the principle of forum non
conveniens was inapplicable because the trial court could
enforce judgment on petitioner, it being a foreign corporation
licensed to do business in the Philippines.15
Petitioner filed a Motion for Reconsideration16 of the order,
which motion was opposed by respondent.17 In an Order dated
31 July 2001,18 the trial court denied petitioners motion. Thus,
it filed a Rule 65 Petition19 with the Court of Appeals praying for
the issuance of a writ of certiorari and a writ of injunction to set
aside the twin orders of the trial court dated 13 September
2000 and 31 July 2001 and to enjoin the trial court from
conducting further proceedings.20
On 28 August 2003, the Court of Appeals rendered the
assailed Decision21 denying the petition for certiorari for lack of
merit. It also denied petitioners motion for reconsideration in
the assailed Resolution issued on 10 March 2004.22
The appellate court held that although the trial court should not
have confined itself to the allegations in the complaint and
should have also considered evidence aliunde in resolving
petitioners omnibus motion, it found the evidence presented
by petitioner, that is, the deposition of Walter Browning,
insufficient for purposes of determining whether the complaint
failed to state a cause of action. The appellate court also
stated that it could not rule one way or the other on the issue of
whether the corporations, including petitioner, named as
defendants in the case had indeed merged together based
solely on the evidence presented by respondent. Thus, it held
that the issue should be threshed out during trial. 23 Moreover,
the appellate court deferred to the discretion of the trial court
when the latter decided not to desist from assuming jurisdiction
on the ground of the inapplicability of the principle of forum non
conveniens.
Hence, this petition raising the following issues:

Page 2 of 42
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
REFUSING TO DISMISS THE COMPLAINT FOR FAILURE TO
STATE A CAUSE OF ACTION AGAINST RAYTHEON
INTERNATIONAL, INC.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
REFUSING TO DISMISS THE COMPLAINT ON THE
GROUND OF FORUM NON CONVENIENS.24
Incidentally, respondent failed to file a comment despite
repeated notices. The Ceferino Padua Law Office, counsel on
record for respondent, manifested that the lawyer handling the
case, Atty. Rogelio Karagdag, had severed relations with the
law firm even before the filing of the instant petition and that it
could no longer find the whereabouts of Atty. Karagdag or of
respondent despite diligent efforts. In a Resolution 25 dated 20
November 2006, the Court resolved to dispense with the filing
of a comment.
The instant petition lacks merit.
Petitioner mainly asserts that the written contract between
respondent and BMSI included a valid choice of law clause,
that is, that the contract shall be governed by the laws of the
State of Connecticut. It also mentions the presence of foreign
elements in the dispute namely, the parties and witnesses
involved are American corporations and citizens and the
evidence to be presented is located outside the Philippines
that renders our local courts inconvenient forums. Petitioner
theorizes that the foreign elements of the dispute necessitate
the immediate application of the doctrine of forum non
conveniens.
Recently in Hasegawa v. Kitamura,26 the Court outlined three
consecutive phases involved in judicial resolution of conflictsof-laws problems, namely: jurisdiction, choice of law, and
recognition and enforcement of judgments. Thus, in the
instances27 where the Court held that the local judicial
machinery was adequate to resolve controversies with a
foreign element, the following requisites had to be proved: (1)
that the Philippine Court is one to which the parties may
conveniently resort; (2) that the Philippine Court is in a position
to make an intelligent decision as to the law and the facts; and
(3) that the Philippine Court has or is likely to have the power
to enforce its decision.28
On the matter of jurisdiction over a conflicts-of-laws problem
where the case is filed in a Philippine court and where the
court has jurisdiction over the subject matter, the parties and
the res, it may or can proceed to try the case even if the rules
of conflict-of-laws or the convenience of the parties point to a
foreign forum. This is an exercise of sovereign prerogative of
the country where the case is filed.29
Jurisdiction over the nature and subject matter of an action is
conferred by the Constitution and the law30 and by the material
allegations in the complaint, irrespective of whether or not the
plaintiff is entitled to recover all or some of the claims or reliefs
sought therein.31 Civil Case No. 1192-BG is an action for
damages arising from an alleged breach of contract.
Undoubtedly, the nature of the action and the amount of
damages prayed are within the jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired

jurisdiction over herein respondent (as party plaintiff) upon the
filing of the complaint. On the other hand, jurisdiction over the
person of petitioner (as party defendant) was acquired by its
voluntary appearance in court.32
That the subject contract included a stipulation that the same
shall be governed by the laws of the State of Connecticut does
not suggest that the Philippine courts, or any other foreign
tribunal for that matter, are precluded from hearing the civil
action. Jurisdiction and choice of law are two distinct concepts.
Jurisdiction considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further question
whether the application of a substantive law which will
determine the merits of the case is fair to both parties. 33 The
choice of law stipulation will become relevant only when the
substantive issues of the instant case develop, that is, after
hearing on the merits proceeds before the trial court.
Under the doctrine of forum non conveniens, a court, in
conflicts-of-laws cases, may refuse impositions on its
jurisdiction where it is not the most "convenient" or available
forum and the parties are not precluded from seeking remedies
elsewhere.34 Petitioners averments of the foreign elements in
the instant case are not sufficient to oust the trial court of its
jurisdiction over Civil Case No. No. 1192-BG and the parties
involved.
Moreover, the propriety of dismissing a case based on the
principle of forum non conveniens requires a factual
determination; hence, it is more properly considered as a
matter of defense. While it is within the discretion of the trial
court to abstain from assuming jurisdiction on this ground, it
should do so only after vital facts are established, to determine
whether special circumstances require the courts desistance.35
Finding no grave abuse of discretion on the trial court, the
Court of Appeals respected its conclusion that it can assume
jurisdiction over the dispute notwithstanding its foreign
elements. In the same manner, the Court defers to the sound
discretion of the lower courts because their findings are binding
on this Court.
Petitioner also contends that the complaint in Civil Case No.
1192-BG failed to state a cause of action against petitioner.
Failure to state a cause of action refers to the insufficiency of
allegation in the pleading.36 As a general rule, the elementary
test for failure to state a cause of action is whether the
complaint alleges facts which if true would justify the relief
demanded.37
The complaint alleged that petitioner had combined with BMSI
and RUST to function as one company. Petitioner contends
that the deposition of Walter Browning rebutted this allegation.
On this score, the resolution of the Court of Appeals is
instructive, thus:
x x x Our examination of the deposition of Mr. Walter Browning
as well as other documents produced in the hearing shows that
these evidence aliunde are not quite sufficient for us to mete a
ruling that the complaint fails to state a cause of action.
Annexes "A" to "E" by themselves are not substantial,
convincing and conclusive proofs that Raytheon Engineers and

Page 3 of 42
Constructors, Inc. (REC) assumed the warranty obligations of
defendant Rust International in the Makar Port Project in
General Santos City, after Rust International ceased to exist
after being absorbed by REC. Other documents already
submitted in evidence are likewise meager to preponderantly
conclude that Raytheon International, Inc., Rust International[,]
Inc. and Brand Marine Service, Inc. have combined into one
company, so much so that Raytheon International, Inc., the
surviving company (if at all) may be held liable for the
obligation of BMSI to respondent Rouzie for unpaid
commissions. Neither these documents clearly speak
otherwise.38
As correctly pointed out by the Court of Appeals, the question
of whether petitioner, BMSI and RUST merged together
requires the presentation of further evidence, which only a fullblown trial on the merits can afford.
WHEREFORE, the instant petition for review on certiorari
is DENIED. The Decision and Resolution of the Court of
Appeals
in
CA-G.R.
SP
No.
67001
are
hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 149177

November 23, 2007

KAZUHIRO HASEGAWA and NIPPON ENGINEERING

CONSULTANTS
CO.,
LTD., Petitioners,
vs.
MINORU KITAMURA, Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under
Rule 45 of the Rules of Court assailing the April 18, 2001
Decision1 of the Court of Appeals (CA) in CA-G.R. SP No.
60827, and the July 25, 2001 Resolution2 denying the motion
for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants
Co., Ltd. (Nippon), a Japanese consultancy firm providing
technical and management support in the infrastructure
projects of foreign governments,3 entered into an Independent
Contractor Agreement (ICA) with respondent Minoru Kitamura,
a Japanese national permanently residing in the
Philippines.4 The agreement provides that respondent was to
extend professional services to Nippon for a year starting on
April 1, 1999.5 Nippon then assigned respondent to work as the
project manager of the Southern Tagalog Access Road (STAR)
Project in the Philippines, following the company's consultancy
contract with the Philippine Government.6
When the STAR Project was near completion, the Department
of Public Works and Highways (DPWH) engaged the
consultancy services of Nippon, on January 28, 2000, this time
for the detailed engineering and construction supervision of the
Bongabon-Baler
Road
Improvement
(BBRI)
Project.7 Respondent was named as the project manager in
the contract's Appendix 3.1.8

On February 28, 2000, petitioner Kazuhiro Hasegawa,

Nippon's general manager for its International Division,
informed respondent that the company had no more intention
of automatically renewing his ICA. His services would be
engaged by the company only up to the substantial completion
of the STAR Project on March 31, 2000, just in time for the
ICA's expiry.9
Threatened with impending unemployment, respondent,
through his lawyer, requested a negotiation conference and
demanded that he be assigned to the BBRI project. Nippon
insisted that respondents contract was for a fixed term that
had already expired, and refused to negotiate for the renewal
of the ICA.10
As he was not able to generate a positive response from the
petitioners, respondent consequently initiated on June 1, 2000
Civil Case No. 00-0264 for specific performance and damages
with the Regional Trial Court of Lipa City.11
For their part, petitioners, contending that the ICA had been
perfected in Japan and executed by and between Japanese
nationals, moved to dismiss the complaint for lack of
jurisdiction. They asserted that the claim for improper pretermination of respondent's ICA could only be heard and
ventilated in the proper courts of Japan following the principles
of lex loci celebrationis and lex contractus.12
In the meantime, on June 20, 2000, the DPWH approved
Nippon's request for the replacement of Kitamura by a certain
Y. Kotake as project manager of the BBRI Project.13
On June 29, 2000, the RTC, invoking our ruling in Insular
Government v. Frank14 that matters connected with the
performance of contracts are regulated by the law prevailing at
the place of performance,15 denied the motion to dismiss.16 The
trial court subsequently denied petitioners' motion for
reconsideration,17 prompting them to file with the appellate
court,
on
August
14,
2000,
their first Petition
for Certiorari under Rule 65 [docketed as CA-G.R. SP No.
60205].18 On August 23, 2000, the CA resolved to dismiss the
petition on procedural groundsfor lack of statement of
material dates and for insufficient verification and certification
against forum shopping.19 An Entry of Judgment was later
issued by the appellate court on September 20, 2000.20
Aggrieved by this development, petitioners filed with the CA,
on September 19, 2000, still within the reglementary period,
a second Petition for Certiorari under Rule 65 already stating
therein the material dates and attaching thereto the proper
verification and certification. This second petition, which
substantially raised the same issues as those in the first, was
docketed as CA-G.R. SP No. 60827.21
Ruling on the merits of the second petition, the appellate court
rendered the assailed April 18, 2001 Decision22finding no grave
abuse of discretion in the trial court's denial of the motion to
dismiss. The CA ruled, among others, that the principle of lex
loci celebrationis was not applicable to the case, because
nowhere in the pleadings was the validity of the written
agreement put in issue. The CA thus declared that the trial
court was correct in applying instead the principle of lex loci
solutionis.23

Page 4 of 42
Petitioners' motion for reconsideration was subsequently
denied by the CA in the assailed July 25, 2001 Resolution.24
Remaining steadfast in their stance despite the series of
denials, petitioners instituted the instant Petition for Review
on Certiorari25 imputing the following errors to the appellate
court:
A. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN FINDING THAT THE TRIAL COURT VALIDLY
EXERCISED
JURISDICTION
OVER
THE
INSTANT
CONTROVERSY, DESPITE THE FACT THAT THE
CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A
QUO WAS ENTERED INTO BY AND BETWEEN TWO
JAPANESE NATIONALS, WRITTEN WHOLLY IN THE
JAPANESE LANGUAGE AND EXECUTED IN TOKYO,
JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN OVERLOOKING THE NEED TO REVIEW OUR
ADHERENCE TO THE PRINCIPLE OF LEX LOCI
SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S]
IN PRIVATE INTERNATIONAL LAWS.26
The pivotal question that this Court is called upon to resolve is
whether the subject matter jurisdiction of Philippine courts in
civil cases for specific performance and damages involving
contracts executed outside the country by foreign nationals
may be assailed on the principles of lex loci celebrationis, lex
contractus, the "state of the most significant relationship rule,"
or forum non conveniens.
However, before ruling on this issue, we must first dispose of
the procedural matters raised by the respondent.
Kitamura contends that the finality of the appellate court's
decision in CA-G.R. SP No. 60205 has already barred the filing
of the second petition docketed as CA-G.R. SP No. 60827
(fundamentally raising the same issues as those in the first
one) and the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No.
60205 on account of the petition's defective certification of nonforum shopping, it was a dismissal without prejudice.27 The
same holds true in the CA's dismissal of the said case due to
defects in the formal requirement of verification 28 and in the
other requirement in Rule 46 of the Rules of Court on the
statement of the material dates.29 The dismissal being without
prejudice, petitioners can re-file the petition, or file a second
petition attaching thereto the appropriate verification and
certificationas they, in fact didand stating therein the
material dates, within the prescribed period30 in Section 4, Rule
65 of the said Rules.31
The dismissal of a case without prejudice signifies the absence
of a decision on the merits and leaves the parties free to
litigate the matter in a subsequent action as though the
dismissed action had not been commenced. In other words,
the termination of a case not on the merits does not bar
another action involving the same parties, on the same subject
matter and theory.32

Necessarily, because the said dismissal is without prejudice

and has no res judicata effect, and even if petitioners still
indicated in the verification and certification of the
second certiorari petition that the first had already been
dismissed on procedural grounds,33 petitioners are no longer
required by the Rules to indicate in their certification of nonforum shopping in the instant petition for review of the second
certiorari petition, the status of the aforesaid first petition before
the CA. In any case, an omission in the certificate of non-forum
shopping about any event that will not constitute res judicata
and litis pendentia, as in the present case, is not a fatal defect.
It will not warrant the dismissal and nullification of the entire
proceedings, considering that the evils sought to be prevented
by the said certificate are no longer present.34
The Court also finds no merit in respondent's contention that
petitioner Hasegawa is only authorized to verify and certify, on
behalf of Nippon, the certiorari petition filed with the CA and not
the instant petition. True, the Authorization 35 dated September
4, 2000, which is attached to the second certiorari petition and
which is also attached to the instant petition for review, is
limited in scopeits wordings indicate that Hasegawa is given
the authority to sign for and act on behalf of the company only
in the petition filed with the appellate court, and that authority
cannot extend to the instant petition for review.36 In a plethora
of cases, however, this Court has liberally applied the Rules or
even suspended its application whenever a satisfactory
explanation and a subsequent fulfillment of the requirements
have been made.37 Given that petitioners herein sufficiently
explained their misgivings on this point and appended to their
Reply38 an updated Authorization39 for Hasegawa to act on
behalf of the company in the instant petition, the Court finds
the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment
to the defect in the verification and certification. As respondent
pointed out, and to which we agree, Hasegawa is truly not
authorized to act on behalf of Nippon in this case. The
aforesaid September 4, 2000 Authorization and even the
subsequent August 17, 2001 Authorization were issued only by
Nippon's president and chief executive officer, not by the
company's board of directors. In not a few cases, we have
ruled that corporate powers are exercised by the board of
directors; thus, no person, not even its officers, can bind the
corporation, in the absence of authority from the
board.40 Considering that Hasegawa verified and certified the
petition only on his behalf and not on behalf of the other
petitioner, the petition has to be denied pursuant to Loquias v.
Office of the Ombudsman.41 Substantial compliance will not
suffice in a matter that demands strict observance of the
Rules.42 While technical rules of procedure are designed not to
frustrate the ends of justice, nonetheless, they are intended to
effect the proper and orderly disposition of cases and
effectively prevent the clogging of court dockets.43
Further, the Court has observed that petitioners incorrectly filed
a Rule 65 petition to question the trial court's denial of their
motion to dismiss. It is a well-established rule that an order
denying a motion to dismiss is interlocutory, and cannot be the
subject of the extraordinary petition for certiorari or mandamus.
The appropriate recourse is to file an answer and to interpose
as defenses the objections raised in the motion, to proceed to
trial, and, in case of an adverse decision, to elevate the entire
case by appeal in due course.44 While there are recognized

Page 5 of 42
exceptions to this rule,45 petitioners' case does not fall among
them.
This brings us to the discussion of the substantive issue of the
case.
Asserting that the RTC of Lipa City is an inconvenient forum,
petitioners question its jurisdiction to hear and resolve the civil
case for specific performance and damages filed by the
respondent. The ICA subject of the litigation was entered into
and perfected in Tokyo, Japan, by Japanese nationals, and
written wholly in the Japanese language. Thus, petitioners
posit that local courts have no substantial relationship to the
parties46 following the [state of the] most significant relationship
rule in Private International Law.47
The Court notes that petitioners adopted an additional but
different theory when they elevated the case to the appellate
court. In the Motion to Dismiss48 filed with the trial court,
petitioners never contended that the RTC is an inconvenient
forum. They merely argued that the applicable law which will
determine the validity or invalidity of respondent's claim is that
of
Japan,
following
the
principles
of lex
loci
celebrationis and lex contractus.49 While not abandoning this
stance in their petition before the appellate court, petitioners
on certiorari significantly invoked the defense of forum non
conveniens.50 On petition for review before this Court,
petitioners dropped their other arguments, maintained
the forum non conveniens defense, and introduced their new
argument that the applicable principle is the [state of the] most
significant relationship rule.51
Be that as it may, this Court is not inclined to deny this petition
merely on the basis of the change in theory, as explained
in Philippine Ports Authority v. City of Iloilo.52 We only pointed
out petitioners' inconstancy in their arguments to emphasize
their incorrect assertion of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts problems,
three consecutive phases are involved: jurisdiction, choice of
law, and recognition and enforcement of judgments.
Corresponding to these phases are the following questions: (1)
Where can or should litigation be initiated? (2) Which law will
the court apply? and (3) Where can the resulting judgment be
enforced?53
Analytically, jurisdiction and choice of law are two distinct
concepts.54 Jurisdiction considers whether it is fair to cause a
defendant to travel to this state; choice of law asks the further
question whether the application of a substantive law which will
determine the merits of the case is fair to both parties. The
power to exercise jurisdiction does not automatically give a
state constitutional authority to apply forum law. While
jurisdiction and the choice of the lex fori will often coincide, the
"minimum contacts" for one do not always provide the
necessary "significant contacts" for the other.55 The question of
whether the law of a state can be applied to a transaction is
different from the question of whether the courts of that state
have jurisdiction to enter a judgment.56
In this case, only the first phase is at issue
jurisdiction.1wphi1 Jurisdiction, however, has various aspects.
For a court to validly exercise its power to adjudicate a
controversy, it must have jurisdiction over the plaintiff or the

petitioner, over the defendant or the respondent, over the

subject matter, over the issues of the case and, in cases
involving property, over the res or the thing which is the subject
of the litigation.57 In assailing the trial court's jurisdiction herein,
petitioners are actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is
conferred by the sovereign authority which establishes and
organizes the court. It is given only by law and in the manner
prescribed by law.58 It is further determined by the allegations
of the complaint irrespective of whether the plaintiff is entitled
to all or some of the claims asserted therein. 59 To succeed in its
motion for the dismissal of an action for lack of jurisdiction over
the subject matter of the claim,60 the movant must show that
the court or tribunal cannot act on the matter submitted to it
because no law grants it the power to adjudicate the claims.61
In the instant case, petitioners, in their motion to dismiss, do
not claim that the trial court is not properly vested by law with
jurisdiction to hear the subject controversy for, indeed, Civil
Case No. 00-0264 for specific performance and damages is
one not capable of pecuniary estimation and is properly
cognizable by the RTC of Lipa City.62 What they rather raise as
grounds to question subject matter jurisdiction are the
principles of lex loci celebrationis and lex contractus, and the
"state of the most significant relationship rule."
The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the "law of the place of the
ceremony"63 or the law of the place where a contract is
made.64 The doctrine of lex contractus or lex loci
contractus means the "law of the place where a contract is
executed or to be performed."65 It controls the nature,
construction, and validity of the contract 66 and it may pertain to
the law voluntarily agreed upon by the parties or the law
intended by them either expressly or implicitly.67 Under the
"state of the most significant relationship rule," to ascertain
what state law to apply to a dispute, the court should determine
which state has the most substantial connection to the
occurrence and the parties. In a case involving a contract, the
court should consider where the contract was made, was
negotiated, was to be performed, and the domicile, place of
business, or place of incorporation of the parties. 68 This rule
takes into account several contacts and evaluates them
according to their relative importance with respect to the
particular issue to be resolved.69
Since these three principles in conflict of laws make reference
to the law applicable to a dispute, they are rules proper for the
second phase, the choice of law.70 They determine which
state's law is to be applied in resolving the substantive issues
of a conflicts problem.71 Necessarily, as the only issue in this
case is that of jurisdiction, choice-of-law rules are not only
inapplicable but also not yet called for.
Further, petitioners' premature invocation of choice-of-law rules
is exposed by the fact that they have not yet pointed out any
conflict between the laws of Japan and ours. Before
determining which law should apply, first there should exist a
conflict of laws situation requiring the application of the conflict
of laws rules.72 Also, when the law of a foreign country is
invoked to provide the proper rules for the solution of a case,
the existence of such law must be pleaded and proved.73

Page 6 of 42
It should be noted that when a conflicts case, one involving a
foreign element, is brought before a court or administrative
agency, there are three alternatives open to the latter in
disposing of it: (1) dismiss the case, either because of lack of
jurisdiction or refusal to assume jurisdiction over the case; (2)
assume jurisdiction over the case and apply the internal law of
the forum; or (3) assume jurisdiction over the case and take
into account or apply the law of some other State or
States.74 The courts power to hear cases and controversies is
derived from the Constitution and the laws. While it may
choose to recognize laws of foreign nations, the court is not
limited by foreign sovereign law short of treaties or other formal
agreements, even in matters regarding rights provided by
foreign sovereigns.75
Neither can the other ground raised, forum non
conveniens,76 be used to deprive the trial court of its jurisdiction
herein. First, it is not a proper basis for a motion to dismiss
because Section 1, Rule 16 of the Rules of Court does not
include it as a ground.77 Second, whether a suit should be
entertained or dismissed on the basis of the said doctrine
depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court.78 In this
case, the RTC decided to assume jurisdiction. Third, the
propriety of dismissing a case based on this principle requires
a factual determination; hence, this conflicts principle is more
properly considered a matter of defense.79
Accordingly, since the RTC is vested by law with the power to
entertain and hear the civil case filed by respondent and the
grounds raised by petitioners to assail that jurisdiction are
inappropriate, the trial and appellate courts correctly denied the
petitioners motion to dismiss.
WHEREFORE, premises considered, the petition for review
on certiorari is DENIED.
SO ORDERED.
G.R. No. 72494 August 11, 1989
HONGKONG
AND
SHANGHAI
BANKING
CORPORATION, petitioner,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE
INTERMEDIATE APPELLATE COURT, respondents.
Quiason, Makalintal, Barot & Torres for petitioner.
Alejandro, Aranzaso & Associates for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the
Intermediate Appellate Court (now Court of Appeals) dated
August 2, 1985, which reversed the order of the Regional Trial
Court dated February 28,1985 denying the Motion to Dismiss
filed by private respondents Jack Robert Sherman and
Deodato Reloj.
A complaint for collection of a sum of money (pp. 49-52, Rollo)
was filed by petitioner Hongkong and Shanghai Banking
Corporation (hereinafter referred to as petitioner BANK)
against private respondents Jack Robert Sherman and
Deodato Reloj, docketed as Civil Case No. Q-42850 before the
Regional Trial Court of Quezon City, Branch 84.

It appears that sometime in 1981, Eastern Book Supply

Service PTE, Ltd. (hereinafter referred to as COMPANY), a
company incorporated in Singapore applied with, and was
granted by, the Singapore branch of petitioner BANK an
overdraft facility in the maximum amount of Singapore dollars
200,000.00 (which amount was subsequently increased to
Singapore dollars 375,000.00) with interest at 3% over
petitioner BANK prime rate, payable monthly, on amounts due
under said overdraft facility; as a security for the repayment by
the COMPANY of sums advanced by petitioner BANK to it
through the aforesaid overdraft facility, on October 7, 1982,
both private respondents and a certain Robin de Clive Lowe,
all of whom were directors of the COMPANY at such time,
executed a Joint and Several Guarantee (p. 53, Rollo) in favor
of petitioner BANK whereby private respondents and Lowe
agreed to pay, jointly and severally, on demand all sums owed
by the COMPANY to petitioner BANK under the aforestated
overdraft facility.
The Joint and Several Guarantee provides, inter alia, that:
This guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may
be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts of Singapore shall
have jurisdiction over all disputes arising under this
guarantee. ... (p. 33-A, Rollo).
The COMPANY failed to pay its obligation. Thus, petitioner
BANK demanded payment of the obligation from private
respondents, conformably with the provisions of the Joint and
Several Guarantee. Inasmuch as the private respondents still
failed to pay, petitioner BANK filed the above-mentioned
complaint.
On December 14,1984, private respondents filed a motion to
dismiss (pp 54-56, Rollo) which was opposed by petitioner
BANK (pp. 58-62, Rollo). Acting on the motion, the trial court
issued an order dated February 28, 1985 (pp, 64-65, Rollo),
which read as follows:
In a Motion to Dismiss filed on December 14, 1984, the
defendants seek the dismissal of the complaint on two
grounds, namely:
1. That the court has no jurisdiction over the subject matter of
the complaint; and
2. That the court has no jurisdiction over the persons of the
defendants.
In the light of the Opposition thereto filed by plaintiff, the Court
finds no merit in the motion. "On the first ground, defendants
claim that by virtue of the provision in the Guarantee (the
actionable document) which reads
This guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may
be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the courts in Singapore shall
have jurisdiction over all disputes arising under this guarantee,
the Court has no jurisdiction over the subject matter of the
case. The Court finds and concludes otherwise. There is
nothing in the Guarantee which says that the courts of
Singapore shall have jurisdiction to the exclusion of the courts
of other countries or nations. Also, it has long been established
in law and jurisprudence that jurisdiction of courts is fixed by
law; it cannot be conferred by the will, submission or consent
of the parties.
On the second ground, it is asserted that defendant Robert' ,
Sherman is not a citizen nor a resident of the Philippines. This
argument holds no water. Jurisdiction over the persons of
defendants is acquired by service of summons and copy of the
complaint on them. There has been a valid service of

Page 7 of 42
summons on both defendants and in fact the same is admitted
when said defendants filed a 'Motion for Extension of Time to
File Responsive Pleading on December 5, 1984.
WHEREFORE, the Motion to Dismiss is hereby DENIED.
SO ORDERED.
A motion for reconsideration of the said order was filed by
private respondents which was, however, denied (p. 66,Rollo).
Private respondents then filed before the respondent
Intermediate Appellate Court (now Court of Appeals) a petition
for prohibition with preliminary injunction and/or prayer for a
restraining order (pp. 39-48, Rollo). On August 2, 1985, the
respondent Court rendered a decision (p. 37, Rollo), the
dispositive portion of which reads:
WHEREFORE, the petition for prohibition with preliminary
injuction is hereby GRANTED. The respondent Court is
enjoined from taking further cognizance of the case and to
dismiss the same for filing with the proper court of Singapore
which is the proper forum. No costs.
SO ORDERED.
The motion for reconsideration was denied (p. 38, Rollo),
hence, the present petition.
The main issue is whether or not Philippine courts have
jurisdiction over the suit.
The controversy stems from the interpretation of a provision in
the Joint and Several Guarantee, to wit:
(14) This guarantee and all rights, obligations and liabilites
arising hereunder shall be construed and determined under
and may be enforced in accordance with the laws of the
Republic of Singapore. We hereby agree that the Courts in
Singapore shall have jurisdiction over all disputes arising under
this guarantee. ... (p. 53-A, Rollo)
In rendering the decision in favor of private respondents, the
Court of Appeals made, the following observations (pp. 3536, Rollo):
There are significant aspects of the case to which our attention
is invited. The loan was obtained by Eastern Book Service
PTE, Ltd., a company incorporated in Singapore. The loan was
granted by theSingapore Branch of Hongkong and Shanghai
Banking Corporation. The Joint and Several Guarantee was
also concluded in Singapore. The loan was in Singaporean
dollars and the repayment thereof also in the same currency.
The transaction, to say the least, took place in Singporean
setting in which the law of that country is the measure by which
that relationship of the parties will be governed.
xxx xxx xxx
Contrary to the position taken by respondents, the guarantee
agreement compliance that any litigation will be before the
courts of Singapore and that the rights and obligations of the
parties shall be construed and determined in accordance with
the laws of the Republic of Singapore. A closer examination of
paragraph 14 of the Guarantee Agreement upon which the
motion to dismiss is based, employs in clear and
unmistakeable (sic) terms the word 'shall' which under
statutory construction is mandatory.
Thus it was ruled that:
... the word 'shall' is imperative, operating to impose a duty
which may be enforced (Dizon vs. Encarnacion, 9 SCRA
714).lwph1.t
There is nothing more imperative and restrictive than what the
agreement categorically commands that 'all rights, obligations,
and liabilities arising hereunder shall be construed and
determined under and may be enforced in accordance with
the laws of the Republic of Singapore.'

While it is true that "the transaction took place in Singaporean

setting" and that the Joint and Several Guarantee contains a
choice-of-forum clause, the very essence of due process
dictates that the stipulation that "[t]his guarantee and all rights,
obligations and liabilities arising hereunder shall be construed
and determined under and may be enforced in accordance
with the laws of the Republic of Singapore. We hereby agree
that the Courts in Singapore shall have jurisdiction over all
disputes arising under this guarantee" be liberally construed.
One basic principle underlies all rules of jurisdiction in
International Law: a State does not have jurisdiction in the
absence of some reasonable basis for exercising it, whether
the proceedings are in rem quasi in rem or in personam. To be
reasonable, the jurisdiction must be based on some minimum
contacts that will not offend traditional notions of fair play and
substantial justice (J. Salonga, Private International Law, 1981,
p. 46). Indeed, as pointed-out by petitioner BANK at the outset,
the instant case presents a very odd situation. In the ordinary
habits of life, anyone would be disinclined to litigate before a
foreign tribunal, with more reason as a defendant. However, in
this case, private respondents are Philippine residents (a fact
which was not disputed by them) who would rather face a
complaint against them before a foreign court and in the
process incur considerable expenses, not to mention
inconvenience, than to have a Philippine court try and resolve
the case.
Private respondents'
stance is hardly
comprehensible, unless their ultimate intent is to evade, or at
least delay, the payment of a just obligation.
The defense of private respondents that the complaint should
have been filed in Singapore is based merely on technicality.
They did not even claim, much less prove, that the filing of the
action here will cause them any unnecessary trouble, damage,
or expense. On the other hand, there is no showing that
petitioner BANK filed the action here just to harass private
respondents.
In the case of Polytrade Corporation vs. Blanco, G.R. No. L27033, October 31, 1969, 30 SCRA 187, it was ruled:
... An accurate reading, however, of the stipulation, 'The parties
agree to sue and be sued in the Courts of Manila,' does not
preclude the filing of suits in the residence of plaintiff or
defendant. The plain meaning is that the parties merely
consented to be sued in Manila. Qualifying or restrictive words
which would indicate that Manila and Manila alone is the venue
are totally absent therefrom. We cannot read into that clause
that plaintiff and defendant bound themselves to file suits with
respect to the last two transactions in question only or
exclusively in Manila. For, that agreement did not change or
transfer venue. It simply is permissive. The parties solely
agreed to add the courts of Manila as tribunals to which they
may resort. They did not waive their right to pursue remedy in
the courts specifically mentioned in Section 2(b) of Rule
4. Renuntiatio non praesumitur.
This ruling was reiterated in the case of Neville Y. Lamis Ents.,
et al. v. Lagamon, etc., et al., G.R. No. 57250, October 30,
1981, 108 SCRA 740, where the stipulation was "[i]n case of
litigation, jurisdiction shall be vested in the Court of Davao
City." We held:
Anent the claim that Davao City had been stipulated as the
venue, suffice it to say that a stipulation as to venue does not
preclude the filing of suits in the residence of plaintiff or
defendant under Section 2 (b), Rule 4, Rules of Court, in the
absence of qualifying or restrictive words in the agreement
which would indicate that the place named is the only venue
agreed upon by the parties.
Applying the foregoing to the case at bar, the parties did not
thereby stipulate that only the courts of Singapore, to the
exclusion of all the rest, has jurisdiction. Neither did the clause
in question operate to divest Philippine courts of jurisdiction. In

Page 8 of 42
International Law, jurisdiction is often defined as the light of a
State to exercise authority over persons and things within its
boundaries subject to certain exceptions. Thus, a State does
not assume jurisdiction over travelling sovereigns,
ambassadors and diplomatic representatives of other States,
and foreign military units stationed in or marching through
State territory with the permission of the latter's authorities.
This authority, which finds its source in the concept of
sovereignty, is exclusive within and throughout the domain of
the State. A State is competent to take hold of any judicial
matter it sees fit by making its courts and agencies assume
jurisdiction over all kinds of cases brought before them (J.
Salonga, Private International Law, 1981, pp. 3738).lwph1.t
As regards the issue on improper venue, petitioner BANK
avers that the objection to improper venue has been waived.
However, We agree with the ruling of the respondent Court
that:
While in the main, the motion to dismiss fails to categorically
use with exactitude the words 'improper venue' it can be
perceived from the general thrust and context of the motion
that what is meant is improper venue, The use of the word
'jurisdiction' was merely an attempt to copy-cat the same word
employed in the guarantee agreement but conveys the concept
of venue. Brushing aside all technicalities, it would appear that
jurisdiction was used loosely as to be synonymous with venue.
It is in this spirit that this Court must view the motion to
dismiss. ... (p. 35, Rollo).
At any rate, this issue is now of no moment because We hold
that venue here was properly laid for the same reasons
discussed above.
The respondent Court likewise ruled that (pp. 36-37, Rollo):
... In a conflict problem, a court will simply refuse to entertain
the case if it is not authorized by law to exercise jurisdiction.
And even if it is so authorized, it may still refuse to entertain
the case by applying the principle of forum non conveniens. ...
However, whether a suit should be entertained or dismissed on
the basis of the principle of forum non conveniensdepends
largely upon the facts of the particular case and is addressed
to the sound discretion of the trial court (J. Salonga, Private
International Law, 1981, p. 49).lwph1.t Thus, the
respondent Court should not have relied on such principle.
Although the Joint and Several Guarantee prepared by
petitioner BANK is a contract of adhesion and that
consequently, it cannot be permitted to take a stand contrary to
the stipulations of the contract, substantial bases exist for
petitioner Bank's choice of forum, as discussed earlier.
Lastly, private respondents allege that neither the petitioner
based at Hongkong nor its Philippine branch is involved in the
transaction sued upon. This is a vain attempt on their part to
further thwart the proceedings below inasmuch as well-known
is the rule that a defendant cannot plead any defense that has
not been interposed in the court below.
ACCORDINGLY, the decision of the respondent Court is
hereby REVERSED and the decision of the Regional Trial
Court is REINSTATED, with costs against private respondents.
This decision is immediately executory.
SO ORDERED.
G.R. No. 122191 October 8, 1998
SAUDI
ARABIAN
AIRLINES, petitioner,
vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON.
RODOLFO A. ORTIZ, in his capacity as Presiding Judge of
Branch
89,
Regional
Trial
Court
of
Quezon
City, respondents.

QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of
Court seeks to annul and set aside the Resolution 1dated
September 27, 1995 and the Decision 2 dated April 10, 1996 of
the Court of Appeals 3 in CA-G.R. SP No. 36533, 4 and the
Orders 5 dated August 29, 1994 6 and February 2, 1995 7 that
were issued by the trial court in Civil Case No. Q-93-18394. 8
The pertinent antecedent facts which gave rise to the instant
petition, as stated in the questioned Decision 9, are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a
Flight Attendant for its airlines based in Jeddah, Saudi Arabia. .
..
On April 27, 1990, while on a lay-over in Jakarta, Indonesia,
plaintiff went to a disco dance with fellow crew members
Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi
nationals. Because it was almost morning when they returned
to their hotels, they agreed to have breakfast together at the
room of Thamer. When they were in te (sic) room, Allah left on
some pretext. Shortly after he did, Thamer attempted to rape
plaintiff. Fortunately, a roomboy and several security personnel
heard her cries for help and rescued her. Later, the Indonesian
police came and arrested Thamer and Allah Al-Gazzawi, the
latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several
SAUDIA officials interrogated her about the Jakarta incident.
They then requested her to go back to Jakarta to help arrange
the release of Thamer and Allah. In Jakarta, SAUDIA Legal
Officer Sirah Akkad and base manager Baharini negotiated
with the police for the immediate release of the detained crew
members but did not succeed because plaintiff refused to
cooperate. She was afraid that she might be tricked into
something she did not want because of her inability to
understand the local dialect. She also declined to sign a blank
paper and a document written in the local dialect. Eventually,
SAUDIA allowed plaintiff to return to Jeddah but barred her
from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi
Arabian government, the Indonesian authorities agreed to
deport Thamer and Allah after two weeks of detention.
Eventually, they were again put in service by defendant SAUDI
(sic). In September 1990, defendant SAUDIA transferred
plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the
Jakarta incident was already behind her, her superiors
requested her to see Mr. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
passport and questioned her about the Jakarta incident.
Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and
Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of
Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to
Manila, plaintiff was not allowed to board the plane and instead
ordered to take a later flight to Jeddah to see Mr. Miniewy, the
Chief Legal Officer of SAUDIA. When she did, a certain Khalid
of the SAUDIA office brought her to a Saudi court where she
was asked to sign a document written in Arabic. They told her
that this was necessary to close the case against Thamer and
Allah. As it turned out, plaintiff signed a notice to her to appear
before the court on June 27, 1993. Plaintiff then returned to
Manila.

Page 9 of 42
Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27,
1993 for further investigation. Plaintiff did so after receiving
assurance from SAUDIA's Manila manager, Aslam Saleemi,
that the investigation was routinary and that it posed no danger
to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same
Saudi court on June 27, 1993. Nothing happened then but on
June 28, 1993, a Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one hour of
interrogation, they let her go. At the airport, however, just as
her plane was about to take off, a SAUDIA officer told her that
the airline had forbidden her to take flight. At the Inflight
Service Office where she was told to go, the secretary of Mr.
Yahya Saddick took away her passport and told her to remain
in Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff
to the same court where the judge, to her astonishment and
shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes.
Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta.
The court found plaintiff guilty of (1) adultery; (2) going to a
disco, dancing and listening to the music in violation of Islamic
laws; and (3) socializing with the male crew, in contravention of
Islamic tradition. 10
Facing conviction, private respondent sought the help of her
employer, petitioner SAUDIA. Unfortunately, she was denied
any assistance. She then asked the Philippine Embassy in
Jeddah to help her while her case is on appeal. Meanwhile, to
pay for her upkeep, she worked on the domestic flight of
SAUDIA, while Thamer and Allah continued to serve in the
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 Defendant's Motion for Reconsideration).

In the Reply 23 filed with the trial court on October 24, 1994,
SAUDIA alleged that since its Motion for Reconsideration
raised lack of jurisdiction as its cause of action, the Omnibus
Motion Rule does not apply, even if that ground is raised for
the first time on appeal. Additionally, SAUDIA alleged that the
Philippines does not have any substantial interest in the
prosecution of the instant case, and hence, without jurisdiction
to adjudicate the same.
Respondent Judge subsequently issued another Order 24 dated
February 2, 1995, denying SAUDIA's Motion for
Reconsideration. The pertinent portion of the assailed Order
reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi
Arabian Airlines filed, thru counsel, on September 20, 1994,
and the Opposition thereto of the plaintiff filed, thru counsel, on
October 14, 1994, as well as the Reply therewith of defendant
Saudi Arabian Airlines filed, thru counsel, on October 24, 1994,
considering that a perusal of the plaintiffs Amended Complaint,
which is one for the recovery of actual, moral and exemplary
damages plus attorney's fees, upon the basis of the applicable
Philippine law, Article 21 of the New Civil Code of the
Philippines, is, clearly, within the jurisdiction of this Court as
regards the subject matter, and there being nothing new of
substance which might cause the reversal or modification of
the order sought to be reconsidered, the motion for
reconsideration of the defendant, is DENIED.
SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition
for Certiorari and Prohibition with Prayer for Issuance of Writ of
Preliminary
Injunction
and/or
Temporary
Restraining
Order 26 with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with
Temporary Restraining Order 27 dated February 23, 1995,
prohibiting the respondent Judge from further conducting any
proceeding, unless otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27, 1995,
now assailed, the appellate court denied SAUDIA's Petition for
the Issuance of a Writ of Preliminary Injunction dated February
18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction
is hereby DENIED, after considering the Answer, with Prayer to
Deny Writ of Preliminary Injunction (Rollo, p. 135) the Reply
and Rejoinder, it appearing that herein petitioner is not clearly
entitled thereto (Unciano Paramedical College, et. Al., v. Court
of Appeals, et. Al., 100335, April 7, 1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court
the instant Petition 29 for Review with Prayer for Temporary
Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition,
respondent Court of Appeals rendered the Decision 30 dated
April 10, 1996, now also assailed. It ruled that the Philippines is
an appropriate forum considering that the Amended
Complaint's basis for recovery of damages is Article 21 of the
Civil Code, and thus, clearly within the jurisdiction of
respondent Court. It further held that certiorari is not the proper
remedy in a denial of a Motion to Dismiss, inasmuch as the
petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for
Review with Prayer for Temporary Restraining Order 31dated
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:

Page 10 of 42
I
The trial court has no jurisdiction to hear and try Civil Case No.
Q-93-18394 based on Article 21 of the New Civil Code since
the proper law applicable is the law of the Kingdom of Saudi
Arabia inasmuch as this case involves what is known in private
international law as a "conflicts problem". Otherwise, the
Republic of the Philippines will sit in judgment of the acts done
by another sovereign state which is abhorred.
II
Leave of court before filing a supplemental pleading is not a
jurisdictional requirement. Besides, the matter as to absence of
leave of court is now moot and academic when this Honorable
Court required the respondents to comment on petitioner's
April 30, 1996 Supplemental Petition For Review With Prayer
For A Temporary Restraining Order Within Ten (10) Days From
Notice Thereof. Further, the Revised Rules of Court should be
construed with liberality pursuant to Section 2, Rule 1 thereof.
III
Petitioner received on April 22, 1996 the April 10, 1996
decision in CA-G.R. SP NO. 36533 entitled "Saudi Arabian
Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its April 30,
1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or
within the 15-day reglementary period as provided for under
Section 1, Rule 45 of the Revised Rules of Court. Therefore,
the decision in CA-G.R. SP NO. 36533 has not yet become
final and executory and this Honorable Court can take
cognizance of this case. 33
From the foregoing factual and procedural antecedents, the
following issues emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
HOLDING THAT THE REGIONAL TRIAL COURT OF
QUEZON CITY HAS JURISDICTION TO HEAR AND TRY
CIVIL CASE NO. Q-93-18394 ENTITLED "MILAGROS P.
MORADA V. SAUDI ARABIAN AIRLINES".
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD
GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws
that must be settled at the outset. It maintains that private
respondent's claim for alleged abuse of rights occurred in the
Kingdom of Saudi Arabia. It alleges that the existence of a
foreign element qualifies the instant case for the application of
the law of the Kingdom of Saudi Arabia, by virtue of the lex loci
delicti commissi rule. 34
On the other hand, private respondent contends that since her
Amended Complaint is based on Articles 19 35 and 21 36 of the
Civil Code, then the instant case is properly a matter of
domestic law. 37
Under the factual antecedents obtaining in this case, there is
no dispute that the interplay of events occurred in two states,
the Philippines and Saudi Arabia.
As stated by private respondent
Complaint 38 dated June 23, 1994:

in

her

Amended

2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a

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

6. Plaintiff learned that, through the intercession of the Saudi

Arabian government, the Indonesian authorities agreed to
deport Thamer and Allah after two weeks of detention.
Eventually, they were again put in service by defendant
SAUDIA. In September 1990, defendant SAUDIA transferred
plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the
Jakarta incident was already behind her, her superiors
reauested her to see MR. Ali Meniewy, Chief Legal Officer of
SAUDIA in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
passport and questioned her about the Jakarta incident.
Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and
Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of
Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh,
Saudi Arabia, a few minutes before the departure of her flight
to Manila, plaintiff was not allowed to board the plane and
instead ordered to take a later flight to Jeddah to see Mr.
Meniewy, the Chief Legal Officer of SAUDIA. When she did, a
certain Khalid of the SAUDIA office brought her to a Saudi
court where she was asked to sigh a document written in
Arabic. They told her that this was necessary to close the case
against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27,
1993.Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff
to report to Jeddah once again and see Miniewy on June 27,
1993 for further investigation. Plaintiff did so after receiving
assurance from SAUDIA's Manila manger, Aslam Saleemi, that
the investigation was routinary and that it posed no danger to
her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the
same Saudi court on June 27, 1993. Nothing happened then
but on June 28, 1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however,
just as her plane was about to take off, a SAUDIA officer told
her that the airline had forbidden her to take that flight. At the
Inflight Service Office where she was told to go, the secretary
of Mr. Yahya Saddick took away her passport and told her to
remain in Jeddah, at the crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted
plaintiff to the same court where the judge, to her astonishment
and shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes.
Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta.
The court found plaintiff guilty of (1) adultery; (2) going to a
disco, dancing, and listening to the music in violation of Islamic
laws; (3) socializing with the male crew, in contravention of
Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case,
plaintiff sought the help of the Philippines Embassy in Jeddah.
The latter helped her pursue an appeal from the decision of the
court. To pay for her upkeep, she worked on the domestic
flights of defendant SAUDIA while, ironically, Thamer and Allah
freely served the international flights. 39
Where the factual antecedents satisfactorily establish the
existence of a foreign element, we agree with petitioner that
the problem herein could present a "conflicts" case.
A factual situation that cuts across territorial lines and is
affected by the diverse laws of two or more states is said to
contain a "foreign element". The presence of a foreign element
is inevitable since social and economic affairs of individuals

Page 11 of 42
and associations are rarely confined to the geographic limits of
their birth or conception. 40

above-mentioned items exceeds Two hundred Thousand

pesos (P200,000.00). (Emphasis ours)

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

xxx xxx xxx

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.

(a) xxx xxx xxx

We thus find private respondent's assertion that the case is

purely domestic, imprecise. A conflicts problem presents itself
here, and the question of jurisdiction 43 confronts the court a
quo.
After a careful study of the private respondent's Amended
Complaint, 44 and the Comment thereon, we note that she aptly
predicated her cause of action on Articles 19 and 21 of the
New Civil Code.
On one hand, Article 19 of the New Civil Code provides:
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice give everyone
his due and observe honesty and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of
Appeals, 45 this Court held that:
The aforecited provisions on human relations were intended to
expand the concept of torts in this jurisdiction by granting
adequate legal remedy for the untold number of moral wrongs
which is impossible for human foresight to specifically provide
in the statutes.
Although Article 19 merely declares a principle of law, Article
21 gives flesh to its provisions. Thus, we agree with private
respondent's assertion that violations of Articles 19 and 21 are
actionable, with judicially enforceable remedies in the
municipal forum.
Based on the allegations 46 in the Amended Complaint, read in
the light of the Rules of Court on jurisdiction 47 we find that the
Regional Trial Court (RTC) of Quezon City possesses
jurisdiction over the subject matter of the suit. 48 Its authority to
try and hear the case is provided for under Section 1 of
Republic Act No. 7691, to wit:
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise
known as the "Judiciary Reorganization Act of 1980", is hereby
amended to read as follows:
Sec. 19. Jurisdiction in Civil Cases. Regional Trial Courts
shall exercise exclusive jurisdiction:
xxx xxx xxx
(8) In all other cases in which demand, exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses,
and cots or the value of the property in controversy exceeds
One hundred thousand pesos (P100,000.00) or, in such other
cases in Metro Manila, where the demand, exclusive of the

And following Section 2 (b), Rule 4 of the Revised Rules of

Court the venue, Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. [Now Regional
Trial Court]
(b) Personal actions. All other actions may be commenced
and tried where the defendant or any of the defendants resides
or may be found, or where the plaintiff or any of the plaintiff
resides, at the election of the plaintiff.
Pragmatic considerations, including the convenience of the
parties, also weigh heavily in favor of the RTC Quezon City
assuming jurisdiction. Paramount is the private interest of the
litigant. Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are
equally important. Plaintiff may not, by choice of an
inconvenient forum, "vex", "harass", or "oppress" the
defendant, e.g. by inflicting upon him needless expense or
disturbance. But unless the balance is strongly in favor of the
defendant, the plaintiffs choice of forum should rarely be
disturbed. 49
Weighing the relative claims of the parties, the court a
quo found it best to hear the case in the Philippines. Had it
refused to take cognizance of the case, it would be forcing
plaintiff (private respondent now) to seek remedial action
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no
longer maintains substantial connections. That would have
caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no
unnecessary difficulties and inconvenience have been shown
by either of the parties. The choice of forum of the plaintiff (now
private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the
persons of the parties herein. By filing her Complaint and
Amended Complaint with the trial court, private respondent has
voluntary submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several
motions 50 praying for the dismissal of Morada's Amended
Complaint. SAUDIA also filed an Answer In Ex Abundante
Cautelam dated February 20, 1995. What is very patent and
explicit from the motions filed, is that SAUDIA prayed for other
reliefs under the premises. Undeniably, petitioner SAUDIA has
effectively submitted to the trial court's jurisdiction by praying
for the dismissal of the Amended Complaint on grounds other
than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.: 51
We observe that the motion to dismiss filed on April 14, 1962,
aside from disputing the lower court's jurisdiction over
defendant's person, prayed for dismissal of the complaint on
the ground that plaintiff's cause of action has prescribed. By
interposing such second ground in its motion to dismiss, Ker
and Co., Ltd. availed of an affirmative defense on the basis of
which it prayed the court to resolve controversy in its favor. For
the court to validly decide the said plea of defendant Ker & Co.,
Ltd., it necessarily had to acquire jurisdiction upon the latter's
person, who, being the proponent of the affirmative defense,
should be deemed to have abandoned its special appearance
and voluntarily submitted itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that;
When the appearance is by motion for the purpose of objecting
to the jurisdiction of the court over the person, it must be for
the sole and separate purpose of objecting to the jurisdiction of

Page 12 of 42
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, thelex situs is decisive
when real rights are involved;
(4) the place where an act has been done, the locus actus,
such as the place where a contract has been made, a
marriage celebrated, a will signed or a tort committed. The lex
loci actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g.,
the place of performance of contractual duties, or the place
where a power of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that
should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are
instituted or done. The lex fori the law of the forum is
particularly important because, as we have seen earlier,
matters of "procedure" not going to the substance of the claim
involved are governed by it; and because the lex fori applies

whenever the content of the otherwise applicable foreign law is

excluded from application in a given case for the reason that it
falls under one of the exceptions to the applications of foreign
law; and
(8) the flag of a ship, which in many cases is decisive of
practically all legal relationships of the ship and of its master or
owner as such. It also covers contractual relationships
particularly contracts of affreightment. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including
allegations in the Amended Complaint deemed admitted for
purposes of the motion to dismiss, we are convinced that there
is reasonable basis for private respondent's assertion that
although she was already working in Manila, petitioner brought
her to Jeddah on the pretense that she would merely testify in
an investigation of the charges she made against the two
SAUDIA crew members for the attack on her person while they
were in Jakarta. As it turned out, she was the one made to face
trial for very serious charges, including adultery and violation of
Islamic laws and tradition.
There is likewise logical basis on record for the claim that the
"handing over" or "turning over" of the person of private
respondent to Jeddah officials, petitioner may have acted
beyond its duties as employer. Petitioner's purported act
contributed to and amplified or even proximately caused
additional humiliation, misery and suffering of private
respondent. Petitioner thereby allegedly facilitated the arrest,
detention and prosecution of private respondent under the
guise of petitioner's authority as employer, taking advantage of
the trust, confidence and faith she reposed upon it. As
purportedly found by the Prince of Makkah, the alleged
conviction and imprisonment of private respondent was
wrongful. But these capped the injury or harm allegedly
inflicted upon her person and reputation, for which petitioner
could be liable as claimed, to provide compensation or redress
for the wrongs done, once duly proven.
Considering that the complaint in the court a quo is one
involving torts, the "connecting factor" or "point of contact"
could be the place or places where the tortious conduct or lex
loci actus occurred. And applying the torts principle in a
conflicts case, we find that the Philippines could be said as a
situs of the tort (the place where the alleged tortious conduct
took place). This is because it is in the Philippines where
petitioner allegedly deceived private respondent, a Filipina
residing and working here. According to her, she had honestly
believed that petitioner would, in the exercise of its rights and
in the performance of its duties, "act with justice, give her due
and observe honesty and good faith." Instead, petitioner failed
to protect her, she claimed. That certain acts or parts of the
injury allegedly occurred in another country is of no moment.
For in our view what is important here is the place where the
over-all harm or the totality of the alleged injury to the person,
reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the
Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule
of lex loci delicti commissi, modern theories and rules on tort
liability 61 have been advanced to offer fresh judicial
approaches to arrive at just results. In keeping abreast with the
modern theories on tort liability, we find here an occasion to
apply the "State of the most significant relationship" rule, which
in our view should be appropriate to apply now, given the
factual context of this case.
In applying said principle to determine the State which has the
most significant relationship, the following contacts are to be
taken into account and evaluated according to their relative
importance with respect to the particular issue: (a) the place
where the injury occurred; (b) the place where the conduct

Page 13 of 42
causing the injury occurred; (c) the domicile, residence,
nationality, place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any,
between the parties is centered. 62
As already discussed, there is basis for the claim that over-all
injury occurred and lodged in the Philippines. There is likewise
no question that private respondent is a resident Filipina
national, working with petitioner, a resident foreign corporation
engaged here in the business of international air carriage.
Thus, the "relationship" between the parties was centered
here, although it should be stressed that this suit is not based
on mere labor law violations. From the record, the claim that
the Philippines has the most significant contact with the matter
in this dispute, 63 raised by private respondent as plaintiff below
against defendant (herein petitioner), in our view, has been
properly established.
Prescinding from this premise that the Philippines is the situs
of the tort complained of and the place "having the most
interest in the problem", we find, by way of recapitulation, that
the Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues
arising out of this case. Further, we hold that the respondent
Regional Trial Court has jurisdiction over the parties and the
subject matter of the complaint; the appropriate venue is in
Quezon City, which could properly apply Philippine law.
Moreover, we find untenable petitioner's insistence that "[s]ince
private respondent instituted this suit, she has the burden of
pleading and proving the applicable Saudi law on the
matter." 64 As aptly said by private respondent, she has "no
obligation to plead and prove the law of the Kingdom of Saudi
Arabia since her cause of action is based on Articles 19 and
21" of the Civil Code of the Philippines. In her Amended
Complaint and subsequent pleadings, she never alleged that
Saudi law should govern this case.65 And as correctly held by
the respondent appellate court, "considering that it was the
petitioner who was invoking the applicability of the law of Saudi
Arabia, then the burden was on it [petitioner] to plead and to
establish what the law of Saudi Arabia is". 66
Lastly, no error could be imputed to the respondent appellate
court in upholding the trial court's denial of defendant's (herein
petitioner's) motion to dismiss the case. Not only was
jurisdiction in order and venue properly laid, but appeal after
trial was obviously available, and expeditious trial itself
indicated by the nature of the case at hand. Indubitably, the
Philippines is the state intimately concerned with the ultimate
outcome of the case below, not just for the benefit of all the
litigants, but also for the vindication of the country's system of
law and justice in a transnational setting. With these guidelines
in mind, the trial court must proceed to try and adjudge the
case in the light of relevant Philippine law, with due
consideration of the foreign element or elements involved.
Nothing said herein, of course, should be construed as
prejudging the results of the case in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby
DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P.
Morada vs. Saudi Arabia Airlines" is hereby REMANDED to
Regional Trial Court of Quezon City, Branch 89 for further
proceedings.
SO ORDERED.
G.R. No. L-104776 December 5, 1994
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO
B. EVANGELISTA, and the rest of 1,767 NAMEDCOMPLAINANTS, thru and by their Attorney-in-fact, Atty.
GERARDO
A.
DEL
MUNDO, petitioners,
vs.
PHILIPPINE
OVERSEAS
EMPLOYMENT
ADMINISTRATION'S ADMINISTRATOR, NATIONAL LABOR

RELATIONS
COMMISSION,
BROWN
&
ROOT
INTERNATIONAL, INC. AND/OR ASIA INTERNATIONAL
BUILDERS CORPORATION, respondents.
G.R. Nos. 104911-14 December 5, 1994
BIENVENIDO
M.
CADALIN,
ET
AL., petitioners,
vs.
HON. NATIONAL LABOR RELATIONS COMMISSION,
BROWN & ROOT INTERNATIONAL, INC. and/or ASIA
INTERNATIONAL BUILDERS CORPORATION, respondents.
G.R. Nos. 105029-32 December 5, 1994
ASIA INTERNATIONAL BUILDER CORPORATION and
BROWN & ROOT INTERNATIONAL, INC., petitioners,
vs.
NATIONAL
LABOR
RELATIONS
COMMISSION,
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO
B. EVANGELISTA, ROMEO PATAG, RIZALINO REYES,
IGNACIO DE VERA, SOLOMON B. REYES, JOSE M. ABAN,
EMIGDIO N. ABARQUEZ, ANTONIO ACUPAN, ROMEO
ACUPAN, BENJAMIN ALEJANDRE, WILFREDO D.
ALIGADO, MARTIN AMISTAD, JR., ROLANDO B. AMUL,
AMORSOLO ANADING, ANTONIO T. ANGLO, VICENTE
ARLITA, HERBERT AYO, SILVERIO BALATAZO, ALFREDO
BALOBO, FALCONERO BANAAG, RAMON BARBOSA,
FELIX BARCENA, FERNANDO BAS, MARIO BATACLAN,
ROBERTO S. BATICA, ENRICO BELEN, ARISTEO BICOL,
LARRY C. BICOL, PETRONILLO BISCOCHO, FELIX M.
BOBIER, DIONISIO BOBONGO, BAYANI S. BRACAMANTE,
PABLITO
BUSTILLO,
GUILLERMO
CABEZAS,
BIENVENIDO CADALIN, RODOLFO CAGATAN, AMANTE
CAILAO, IRENEO CANDOR, JOSE CASTILLO, MANUEL
CASTILLO, REMAR CASTROJERES, REYNALDO CAYAS,
ROMEO CECILIO, TEODULO CREUS, BAYANI DAYRIT,
RICARDO DAYRIT, ERNESTO T. DELA CRUZ, FRANCISCO
DE GUZMAN, ONOFRE DE RAMA, IGNACIO DE VERA,
MODESTO DIZON, REYNALDO DIZON, ANTONIO S.
DOMINGUEZ, GILBERT EBRADA, RICARDO EBRADA,
ANTONIO EJERCITO, JR., EDUARTE ERIDAO, ELADIO
ESCOTOTO, JOHN ESGUERRA, EDUARDO ESPIRITU,
ERNESTO ESPIRITU, RODOLFO ESPIRITU, NESTOR M.
ESTEVA, BENJAMIN ESTRADA, VALERIO EVANGELISTA,
OLIGARIO FRANCISCO, JESUS GABAWAN, ROLANDO
GARCIA, ANGEL GUDA, PACITO HERNANDEZ, ANTONIO
HILARIO, HENRY L. JACOB, HONESTO JARDINIANO,
ANTONIO JOCSON, GERARDO LACSAMANA, EFREN U.
LIRIO LORETO LONTOC, ISRAEL LORENZO, ALEJANDRO
LORINO,
JOSE
MABALAY,
HERMIE
MARANAN,
LEOVIGILDO MARCIAL, NOEL MARTINEZ, DANTE
MATREO, LUCIANO MELENDEZ, RENATO MELO, FRANCIS
MEDIODIA, JOSE C. MILANES, RAYMUNDO C. MILAY,
CRESENCIANO MIRANDA, ILDEFONSO C. MOLINA,
ARMANDO
B.
MONDEJAR
RESURRECCION
D.
NAZARENO, JUAN OLINDO, FRANCISCO R. OLIVARES,
PEDRO ORBISTA, JR., RICARDO ORDONEZ, ERNIE
PANCHO, JOSE PANCHO, GORGONIO P. PARALA,
MODESTO PINPIN, JUANITO PAREA, ROMEO I. PATAG,
FRANCISCO PINPIN, LEONARDO POBLETE, JAIME
POLLOS, DOMINGO PONDALIS, EUGENIO RAMIREZ,
LUCIEN M. RESPALL, GAUDENCIO RETANAN, JR., TOMAS
B. RETENER, ALVIN C. REYES, RIZALINO REYES,
SOLOMON B. REYES, VIRGILIO G. RICAZA, RODELIO
RIETA, JR., BENITO RIVERA, JR., BERNARDO J.
ROBILLOS, PABLO A. ROBLES, JOSE ROBLEZA,
QUIRINO RONQUILLO, AVELINO M. ROQUE, MENANDRO
L. SABINO, PEDRO SALGATAR, EDGARDO SALONGA,
NUMERIANO SAN MATEO, FELIZARDO DE LOS SANTOS,
JR., GABRIEL SANTOS, JUANITO SANTOS, PAQUITO
SOLANTE, CONRADO A. SOLIS, JR., RODOLFO SULTAN,
ISAIAS TALACTAC, WILLIAM TARUC, MENANDRO
TEMPROSA, BIENVENIDO S. TOLENTINO, BENEDICTO

Page 14 of 42
TORRES, MAXIMIANO TORRES, FRANCISCO G. TRIAS,
SERGIO A. URSOLINO, ROGELIO VALDEZ, LEGORIO E.
VERGARA, DELFIN VICTORIA, GILBERT VICTORIA,
HERNANE VICTORIANO, FRANCISCO VILLAFLORES,
DOMINGO VILLAHERMOSA, ROLANDO VILLALOBOS,
ANTONIO VILLAUZ, DANILO VILLANUEVA, ROGELIO
VILLANUEVA, ANGEL VILLARBA, JUANITO VILLARINO,
FRANCISCO ZARA, ROGELIO AALAGOS, NICANOR B.
ABAD,
ANDRES
ABANES,
REYNALDO
ABANES,
EDUARDO ABANTE, JOSE ABARRO, JOSEFINO ABARRO,
CELSO S. ABELANIO, HERMINIO ABELLA, MIGUEL
ABESTANO, RODRIGO G. ABUBO, JOSE B. ABUSTAN,
DANTE ACERES, REYNALDO S. ACOJIDO, LEOWILIN
ACTA, EUGENIO C. ACUEZA, EDUARDO ACUPAN,
REYNALDO ACUPAN, SOLANO ACUPAN, MANUEL P.
ADANA, FLORENTINO R. AGNE, QUITERIO R. AGUDO,
MANUEL P. AGUINALDO, DANTE AGUIRRE, HERMINIO
AGUIRRE,
GONZALO ALBERTO,
JR.,
CONRADO
ALCANTARA, LAMBERTO Q. ALCANTARA, MARIANITO J.
ALCANTARA,
BENCIO
ALDOVER,
EULALIO
V.
ALEJANDRO, BENJAMIN ALEJANDRO, EDUARDO L.
ALEJANDRO,
MAXIMINO
ALEJANDRO,
ALBERTO
ALMENAR, ARNALDO ALONZO, AMADO ALORIA, CAMILO
ALVAREZ, MANUEL C. ALVAREZ, BENJAMIN R.
AMBROCIO, CARLOS AMORES, BERNARD P. ANCHETA,
TIMOTEO O. ANCHETA, JEOFREY ANI, ELINO P.
ANTILLON, ARMANDRO B. ANTIPONO, LARRY T.
ANTONIO, ANTONIO APILADO, ARTURO P. APILADO,
FRANCISCO APOLINARIO, BARTOLOME M. AQUINO,
ISIDRO AQUINO, PASTOR AQUINO, ROSENDO M.
AQUINO, ROBERTO ARANGORIN, BENJAMIN O. ARATEA,
ARTURO
V.
ARAULLO,
PRUDENCIO
ARAULLO,
ALEXANDER ARCAIRA, FRANCISCO ARCIAGA, JOSE
AREVALO, JUANTO AREVALO, RAMON AREVALO,
RODOLFO AREVALO, EULALIO ARGUELLES, WILFREDO
P. ARICA, JOSE M. ADESILLO, ANTONIO ASUNCION,
ARTEMIO M. ASUNCION, EDGARDO ASUNCION, REXY M.
ASUNCION, VICENTE AURELIO, ANGEL AUSTRIA,
RICARDO
P.
AVERILLA,
JR.,
VIRGILIO
AVILA,
BARTOLOME AXALAN, ALFREDO BABILONIA, FELIMON
BACAL, JOSE L. BACANI, ROMULO R. BALBIERAN,
VICENTE BALBIERAN, RODOLFO BALITBIT, TEODORO Y.
BALOBO, DANILO O. BARBA, BERNARDO BARRO, JUAN
A. BASILAN, CEFERINO BATITIS, VIVENCIO C. BAUAN,
GAUDENCIO S. BAUTISTA, LEONARDO BAUTISTA, JOSE
D. BAUTISTA, ROSTICO BAUTISTA, RUPERTO B.
BAUTISTA, TEODORO S. BAUTISTA, VIRGILIO BAUTISTA,
JESUS R. BAYA, WINIEFREDO BAYACAL, WINIEFREDO
BEBIT, BEN G. BELIR, ERIC B. BELTRAN, EMELIANO
BENALES, JR., RAUL BENITEZ, PERFECTO BENSAN,
IRENEO BERGONIO, ISABELO BERMUDEZ, ROLANDO I.
BERMUDEZ, DANILO BERON, BENJAMIN BERSAMIN,
ANGELITO BICOL, ANSELMO BICOL, CELESTINO BICOL,
JR., FRANCISCO BICOL, ROGELIO BICOL, ROMULO L.
BICOL, ROGELIO BILLIONES, TEOFILO N. BITO,
FERNANDO BLANCO, AUGUSTO BONDOC, DOMINGO
BONDOC, PEPE S. BOOC, JAMES R. BORJA, WILFREDO
BRACEROS, ANGELES C. BRECINO, EURECLYDON G.
BRIONES,
AMADO
BRUGE,
PABLITO
BUDILLO,
ARCHIMEDES
BUENAVENTURA,
BASILIO
BUENAVENTURA,
GUILLERMO
BUENCONSEJO,
ALEXANDER BUSTAMANTE, VIRGILIO BUTIONG, JR.,
HONESTO
P.
CABALLA,
DELFIN
CABALLERO,
BENEDICTO
CABANIGAN,
MOISES
CABATAY,
HERMANELI CABRERA, PEDRO CAGATAN, JOVEN C.
CAGAYAT, ROGELIO L. CALAGOS, REYNALDO V.
CALDEJON, OSCAR C. CALDERON, NESTOR D.
CALLEJA, RENATO R. CALMA, NELSON T. CAMACHO,
SANTOS T. CAMACHO, ROBERTO CAMANA, FLORANTE
C. CAMANAG EDGARDO M. CANDA, SEVERINO CANTOS,
EPIFANIO A. CAPONPON, ELIAS D. CARILLO, JR.,

ARMANDO CARREON, MENANDRO M. CASTAEDA,

BENIGNO A. CASTILLO, CORNELIO L. CASTILLO,
JOSEPH B. CASTILLO, ANSELMO CASTILLO, JOAQUIN
CASTILLO, PABLO L. CASTILLO, ROMEO P. CASTILLO,
SESINANDO CATIBOG, DANILO CASTRO, PRUDENCIO A.
CASTRO, RAMO CASTRO, JR., ROMEO A. DE CASTRO,
JAIME B. CATLI, DURANA D. CEFERINO, RODOLFO B.
CELIS,
HERMINIGILDO
CEREZO,
VICTORIANO
CELESTINO, BENJAMIN CHAN, ANTONIO C. CHUA,
VIVENCIO B. CIABAL, RODRIGO CLARETE, AUGUSTO
COLOMA,
TURIANO
CONCEPCION,
TERESITO
CONSTANTINO, ARMANDO CORALES, RENATO C.
CORCUERA,
APOLINAR
CORONADO,
ABELARDO
CORONEL, FELIX CORONEL, JR., LEONARDO CORPUZ,
JESUS
M.
CORRALES,
CESAR
CORTEMPRATO,
FRANCISCO O. CORVERA, FRANCISCO COSTALES, SR.,
CELEDONIO CREDITO, ALBERTO A. CREUS, ANACLETO
V. CRUZ, DOMINGO DELA CRUZ, AMELIANO DELA CRUZ,
JR., PANCHITO CRUZ, REYNALDO B. DELA CRUZ,
ROBERTO P. CRUZ, TEODORO S. CRUZ, ZOSIMO DELA
CRUZ, DIONISIO A. CUARESMA, FELIMON CUIZON,
FERMIN DAGONDON, RICHARD DAGUINSIN, CRISANTO
A. DATAY, NICASIO DANTINGUINOO, JOSE DATOON,
EDUARDO DAVID, ENRICO T. DAVID, FAVIO DAVID,
VICTORIANO S. DAVID, EDGARDO N. DAYACAP,
JOSELITO T. DELOSO, CELERINO DE GUZMAN, ROMULO
DE GUZMAN, LIBERATO DE GUZMAN, JOSE DE LEON,
JOSELITO L. DE LUMBAN, NAPOLEON S. DE LUNA,
RICARDO DE RAMA, GENEROSO DEL ROSARIO,
ALBERTO DELA CRUZ, JOSE DELA CRUZ, LEONARDO
DELOS REYES, ERNESTO F. DIATA, EDUARDO A. DIAZ,
FELIX DIAZ, MELCHOR DIAZ, NICANOR S. DIAZ,
GERARDO C. DIGA, CLEMENTE DIMATULAC, ROLANDO
DIONISIO, PHILIPP G. DISMAYA, BENJAMIN DOCTOLERO,
ALBERTO STO. DOMINGO, BENJAMIN E. DOZA,
BENJAMIN DUPA, DANILO C. DURAN, GREGORIO D.
DURAN, RENATO A. EDUARTE, GODOFREDO E. EISMA,
ARDON B. ELLO, UBED B. ELLO, JOSEFINO ENANO,
REYNALDO ENCARNACION, EDGARDO ENGUANCIO,
ELIAS EQUIPANO, FELIZARDO ESCARMOSA, MIGUEL
ESCARMOSA,
ARMANDO
ESCOBAR,
ROMEO
T.
ESCUYOS, ANGELITO ESPIRITU, EDUARDO S. ESPIRITU,
REYNALDO ESPIRITU, ROLANDO ESPIRITU, JULIAN
ESPREGANTE, IGMIDIO ESTANISLAO, ERNESTO M.
ESTEBAN, MELANIO R. ESTRO, ERNESTO M. ESTEVA,
CONRADO ESTUAR, CLYDE ESTUYE, ELISEO FAJARDO,
PORFIRIO FALQUEZA, WILFREDO P. FAUSTINO, EMILIO
E. FERNANDEZ, ARTEMIO FERRER, MISAEL M.
FIGURACION, ARMANDO F. FLORES, BENJAMIN FLORES,
EDGARDO C. FLORES, BUENAVENTURA FRANCISCO,
MANUEL S. FRANCISCO, ROLANDO FRANCISCO,
VALERIANO
FRANCISCO,
RODOLFO
GABAWAN,
ESMERALDO GAHUTAN, CESAR C. GALANG, SANTIAGO
N.
GALOSO,
GABRIEL
GAMBOA,
BERNARDO
GANDAMON, JUAN GANZON, ANDRES GARCIA, JR.,
ARMANDO M. GARCIA, EUGENIO GARCIA, MARCELO L.
GARCIA, PATRICIO L. GARCIA, JR., PONCIANO G.
GARCIA, PONCIANO G. GARCIA, JR., RAFAEL P. GARCIA,
ROBERTO S. GARCIA, OSIAS G. GAROFIL, RAYMUNDO C.
GARON, ROLANDO G. GATELA, AVELINO GAYETA,
RAYMUNDO GERON, PLACIDO GONZALES, RUPERTO H.
GONZALES,
ROGELIO D.
GUANIO,
MARTIN
V.
GUERRERO, JR., ALEXIS GUNO, RICARDO L. GUNO,
FRANCISCO GUPIT, DENNIS J. GUTIERREZ, IGNACIO B.
GUTIERREZ, ANGELITO DE GUZMAN, JR., CESAR H.
HABANA,
RAUL
G.
HERNANDEZ,
REYNALDO
HERNANDEZ, JOVENIANO D. HILADO, JUSTO HILAPO,
ROSTITO HINAHON, FELICISIMO HINGADA, EDUARDO
HIPOLITO, RAUL L. IGNACIO, MANUEL L. ILAGAN,
RENATO L. ILAGAN, CONRADO A. INSIONG, GRACIANO
G. ISLA, ARNEL L. JACOB, OSCAR J. JAPITENGA, CIRILO

Page 15 of 42
HICBAN, MAXIMIANO HONRADES, GENEROSO IGNACIO,
FELIPE ILAGAN, EXPEDITO N. JACOB, MARIO JASMIN,
BIENVENIDO JAVIER, ROMEO M. JAVIER, PRIMO DE
JESUS, REYNALDO DE JESUS, CARLOS A. JIMENEZ,
DANILO E. JIMENEZ, PEDRO C. JOAQUIN, FELIPE W.
JOCSON, FELINO M. JOCSON, PEDRO N. JOCSON,
VALENTINO S. JOCSON, PEDRO B. JOLOYA, ESTEBAN P.
JOSE, JR., RAUL JOSE, RICARDO SAN JOSE, GERTRUDO
KABIGTING, EDUARDO S. KOLIMLIM, SR., LAURO J.
LABAY, EMMANUEL C. LABELLA, EDGARDO B.
LACERONA, JOSE B. LACSON, MARIO J. LADINES,
RUFINO LAGAC, RODRIGO LAGANAPAN, EFREN M.
LAMADRID, GUADENCIO LATANAN, VIRGILIO LATAYAN,
EMILIANO LATOJA, WENCESLAO LAUREL, ALFREDO
LAXAMANA, DANIEL R. LAZARO, ANTONIO C. LEANO,
ARTURO S. LEGASPI, BENITO DE LEMOS, JR., PEDRO G.
DE LEON, MANOLITO C. LILOC, GERARDO LIMUACO,
ERNESTO S. LISING, RENATO LISING, WILFREDO S.
LISING, CRISPULO LONTOC, PEDRO M. LOPERA,
ROGELIO LOPERA, CARLITO M. LOPEZ, CLODY LOPEZ,
GARLITO LOPEZ, GEORGE F. LOPEZ, VIRGILIO M. LOPEZ,
BERNARDITO G. LOREJA, DOMINGO B. LORICO,
DOMINGO LOYOLA, DANTE LUAGE, ANTONIO M.
LUALHATI, EMMANUEL LUALHATI, JR., LEONIDEZ C.
LUALHATI, SEBASTIAN LUALHATI, FRANCISCO LUBAT,
ARMANDO LUCERO, JOSELITO L. DE LUMBAN, THOMAS
VICENTE O. LUNA, NOLI MACALADLAD, ALFREDO
MACALINO,
RICARDO
MACALINO,
ARTURO
V.
MACARAIG, ERNESTO V. MACARAIG, RODOLFO V.
MACARAIG, BENJAMIN MACATANGAY, HERMOGENES
MACATANGAY,
RODEL
MACATANGAY,
ROMULO
MACATANGAY, OSIAS Q. MADLANGBAYAN, NICOLAS P.
MADRID, EDELBERTO G. MAGAT, EFREN C. MAGBANUA,
BENJAMIN MAGBUHAT, ALFREDO C. MAGCALENG,
ANTONIO MAGNAYE, ALFONSO MAGPANTAY, RICARDO
C. MAGPANTAY, SIMEON M. MAGPANTAY, ARMANDO M.
MAGSINO, MACARIO S. MAGSINO, ANTONIO MAGTIBAY,
VICTOR V. MAGTIBAY, GERONIMO MAHILUM, MANUEL
MALONZO, RICARDO MAMADIS, RODOLFO MANA,
BERNARDO A. MANALILI, MANUEL MANALILI, ANGELO
MANALO, AGUILES L. MANALO, LEOPOLDO MANGAHAS,
BAYANI MANIGBAS, ROLANDO C. MANIMTIM, DANIEL
MANONSON,
ERNESTO
F.
MANUEL,
EDUARDO
MANZANO, RICARDO N. MAPA, RAMON MAPILE,
ROBERTO
C.
MARANA,
NEMESIO
MARASIGAN,
WENCESLAO MARASIGAN, LEONARDO MARCELO,
HENRY F. MARIANO, JOEL MARIDABLE, SANTOS E.
MARINO, NARCISO A. MARQUEZ, RICARDO MARTINEZ,
DIEGO MASICAMPO, AURELIO MATABERDE, RENATO
MATILLA, VICTORIANO MATILLA, VIRGILIO MEDEL,
LOLITO M. MELECIO, BENIGNO MELENDEZ, RENER J.
MEMIJE, REYNALDO F. MEMIJE, RODEL MEMIJE,
AVELINO MENDOZA, JR., CLARO MENDOZA, TIMOTEO
MENDOZA, GREGORIO MERCADO, ERNANI DELA
MERCED, RICARDO MERCENA, NEMESIO METRELLO,
RODEL MEMIJE, GASPAR MINIMO, BENJAMIN MIRANDA,
FELIXBERTO D. MISA, CLAUDIO A. MODESTO, JR.,
OSCAR MONDEDO, GENEROSO MONTON, RENATO
MORADA, RICARDO MORADA, RODOLFO MORADA,
ROLANDO M. MORALES, FEDERICO M. MORENO,
VICTORINO A. MORTEL, JR., ESPIRITU A. MUNOZ,
IGNACIO MUNOZ, ILDEFONSO MUNOZ, ROGELIO MUNOZ,
ERNESTO NAPALAN, MARCELO A. NARCIZO, REYNALDO
NATALIA, FERNANDO C. NAVARETTE, PACIFICO D.
NAVARRO, FLORANTE NAZARENO, RIZAL B. NAZARIO,
JOSUE NEGRITE, ALFREDO NEPUMUCENO, HERBERT G.
NG, FLORENCIO NICOLAS, ERNESTO C. NINON, AVELINO
NUQUI, NEMESIO D. OBA, DANILO OCAMPO, EDGARDO
OCAMPO, RODRIGO E. OCAMPO, ANTONIO B. OCCIANO,
REYNALDO P. OCSON, BENJAMIN ODESA, ANGEL
OLASO, FRANCISCO OLIGARIO, ZOSIMO OLIMBO,

BENJAMIN V. ORALLO, ROMEO S. ORIGINES, DANILO R.

ORTANEZ, WILFREDO OSIAS, VIRGILIO PA-A, DAVID
PAALAN, JESUS N. PACHECO, ALFONSO L. PADILLA,
DANILO
PAGSANJAN,
NUMERIANO
PAGSISIHAN,
RICARDO T. PAGUIO, EMILIO PAKINGAN, LEANDRO
PALABRICA, QUINCIANO PALO, JOSE PAMATIAN,
GONZALO PAN, PORFIRIO PAN, BIENVENIDO PANGAN,
ERNESTO PANGAN, FRANCISCO V. PASIA, EDILBERTO
PASIMIO, JR., JOSE V. PASION, ANGELITO M. PENA,
DIONISIO PENDRAS, HERMINIO PERALTA, REYNALDO M.
PERALTA, ANTONIO PEREZ, ANTOLIANO E. PEREZ, JUAN
PEREZ, LEON PEREZ, ROMEO E. PEREZ, ROMULO
PEREZ, WILLIAM PEREZ, FERNANDO G. PERINO,
FLORENTINO DEL PILAR, DELMAR F. PINEDA,
SALVADOR PINEDA, ELIZALDE PINPIN, WILFREDO
PINPIN, ARTURO POBLETE, DOMINADOR R. PRIELA,
BUENAVENTURA PRUDENTE, CARMELITO PRUDENTE,
DANTE PUEYO, REYNALDO Q. PUEYO, RODOLFO O.
PULIDO, ALEJANDRO PUNIO, FEDERICO QUIMAN,
ALFREDO L. QUINTO, ROMEO QUINTOS, EDUARDO W.
RACABO, RICARDO C. DE RAMA, RICARDO L. DE RAMA,
ROLANDO DE RAMA, FERNANDO A. RAMIREZ, LITO S.
RAMIREZ, RICARDO G. RAMIREZ, RODOLFO V. RAMIREZ,
ALBERTO RAMOS, ANSELMO C. RAMOS, TOBIAS
RAMOS,
WILLARFREDO
RAYMUNDO,
REYNALDO
RAQUEDAN, MANUEL F. RAVELAS, WILFREDO D.
RAYMUNDO, ERNESTO E. RECOLASO, ALBERTO
REDAZA, ARTHUR REJUSO, TORIBIO M. RELLAMA,
JAIME RELLOSA, EUGENIO A. REMOQUILLO, GERARDO
RENTOZA, REDENTOR C. REY, ALFREDO S. REYES,
AMABLE S. REYES, BENEDICTO R. REYES, GREGORIO B.
REYES, JOSE A. REYES, JOSE C. REYES, ROMULO M.
REYES, SERGIO REYES, ERNESTO F. RICO, FERNANDO
M. RICO, EMMANUEL RIETA, RICARDO RIETA, LEO B.
ROBLES, RUBEN ROBLES, RODOLFO ROBLEZA,
RODRIGO ROBLEZA, EDUARDO ROCABO, ANTONIO R.
RODRIGUEZ,
BERNARDO
RODRIGUEZ,
ELIGIO
RODRIGUEZ, ALMONTE ROMEO, ELIAS RONQUILLO,
ELISE RONQUILLO, LUIS VAL B. RONQUILLO, REYNOSO
P. RONQUILLO,
RODOLFO
RONQUILLO,
ANGEL
ROSALES, RAMON ROSALES, ALBERTO DEL ROSARIO,
GENEROSO DEL ROSARIO, TEODORICO DEL ROSARIO,
VIRGILIO L. ROSARIO, CARLITO SALVADOR, JOSE
SAMPARADA, ERNESTO SAN PEDRO, ADRIANO V.
SANCHA, GERONIMO M. SANCHA, ARTEMIO B.
SANCHEZ, NICASIO SANCHEZ, APOLONIO P. SANTIAGO,
JOSELITO
S.
SANTIAGO,
SERGIO
SANTIAGO,
EDILBERTO C. SANTOS, EFREN S. SANTOS, RENATO D.
SANTOS, MIGUEL SAPUYOT, ALEX S. SERQUINA,
DOMINADOR P. SERRA, ROMEO SIDRO, AMADO M.
SILANG, FAUSTINO D. SILANG, RODOLFO B. DE SILOS,
ANICETO G. SILVA, EDGARDO M. SILVA, ROLANDO C.
SILVERTO, ARTHUR B. SIMBAHON, DOMINGO SOLANO,
JOSELITO C. SOLANTE, CARLITO SOLIS, CONRADO
SOLIS, III, EDGARDO SOLIS, ERNESTO SOLIS, ISAGANI
M. SOLIS, EDUARDO L. SOTTO, ERNESTO G. STA. MARIA,
VICENTE G. STELLA, FELIMON SUPANG, PETER
TANGUINOO, MAXIMINO TALIBSAO, FELICISMO P.
TALUSIK, FERMIN TARUC, JR., LEVY S. TEMPLO,
RODOLFO S. TIAMSON, LEONILO TIPOSO, ARNEL
TOLENTINO, MARIO M. TOLENTINO, FELIPE TORRALBA,
JOVITO V. TORRES, LEONARDO DE TORRES, GAVINO U.
TUAZON, AUGUSTO B. TUNGUIA, FRANCISCO UMALI,
SIMPLICIO UNIDA, WILFREDO V. UNTALAN, ANTONIO
VALDERAMA, RAMON VALDERAMA, NILO VALENCIANO,
EDGARDO C. VASQUEZ, ELPIDIO VELASQUEZ, NESTOR
DE VERA, WILFREDO D. VERA, BIENVENIDO VERGARA,
ALFREDO VERGARA, RAMON R. VERZOSA, FELICITO P.
VICMUNDO, ALFREDO VICTORIANO, TEOFILO P.
VIDALLO, SABINO N. VIERNEZ, JESUS J. VILLA, JOVEN
VILLABLANCO, EDGARDO G. VILLAFLORES, CEFERINO

Page 16 of 42
VILLAGERA,
ALEX
VILLAHERMOZA,
DANILO
A.
VILLANUEVA, ELITO VILLANUEVA, LEONARDO M.
VILLANUEVA, MANUEL R. VILLANUEVA, NEPTHALI
VILLAR, JOSE V. VILLAREAL, FELICISIMO VILLARINO,
RAFAEL VILLAROMAN, CARLOS VILLENA, FERDINAND
VIVO, ROBERTO YABUT, VICENTE YNGENTE, AND ORO C.
ZUNIGA,respondents.
Gerardo A. Del Mundo and Associates for petitioners.
Romulo, Mabanta, Sayoc, Buenaventura, De los Angeles Law
Offices for BRII/AIBC.
Florante M. De Castro for private respondents in 105029-32.
QUIASON, J.:
The petition in G.R. No. 104776, entitled "Bienvenido M.
Cadalin, et. al. v. Philippine Overseas Employment
Administration's Administrator, et. al.," was filed under Rule 65
of the Revised Rules of Court:
(1) to modify the Resolution dated September 2, 1991 of the
National Labor Relations Commission (NLRC) in POEA Cases
Nos.
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-460; (2)
to render a new decision: (i) declaring private respondents as
in default; (ii) declaring the said labor cases as a class suit; (iii)
ordering Asia International Builders Corporation (AIBC) and
Brown and Root International Inc. (BRII) to pay the claims of
the 1,767 claimants in said labor cases; (iv) declaring Atty.
Florante M. de Castro guilty of forum-shopping; and (v)
dismissing POEA Case No. L-86-05-460; and
(3) to reverse the Resolution dated March 24, 1992 of NLRC,
denying the motion for reconsideration of its Resolution dated
September 2, 1991 (Rollo, pp. 8-288).
The petition in G.R. Nos. 104911-14, entitled "Bienvenido M.
Cadalin, et. al., v. Hon. National Labor Relations Commission,
et. al.," was filed under Rule 65 of the Revised Rules of Court:
(1) to reverse the Resolution dated September 2, 1991 of
NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L-8510-799
and
L-86-05-460 insofar as it: (i) applied the three-year prescriptive
period under the Labor Code of the Philippines instead of the
ten-year prescriptive period under the Civil Code of the
Philippines;
and
(ii)
denied
the
"three-hour daily average" formula in the computation of
petitioners' overtime pay; and
(2) to reverse the Resolution dated March 24, 1992 of NLRC,
denying the motion for reconsideration of its Resolution dated
September 2, 1991 (Rollo, pp. 8-25; 26-220).
The petition in G.R. Nos. 105029-32, entitled "Asia
International Builders Corporation, et. al., v. National Labor
Relations Commission, et. al." was filed under Rule 65 of the
Revised Rules of Court:
(1) to reverse the Resolution dated September 2, 1991 of
NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L-8510-779
and
L-86-05-460, insofar as it granted the claims of 149 claimants;
and
(2) to reverse the Resolution dated March 21, 1992 of NLRC
insofar as it denied the motions for reconsideration of AIBC
and BRII (Rollo, pp. 2-59; 61-230).
The Resolution dated September 2, 1991 of NLRC, which
modified the decision of POEA in four labor cases: (1) awarded
monetary benefits only to 149 claimants and (2) directed Labor
Arbiter Fatima J. Franco to conduct hearings and to receive

evidence on the claims dismissed by the POEA for lack of

substantial evidence or proof of employment.
Consolidation of Cases
G.R. Nos. 104776 and 105029-32 were originally raffled to the
Third Division while G.R. Nos. 104911-14 were raffled to the
Second Division. In the Resolution dated July 26, 1993, the
Second Division referred G.R. Nos. 104911-14 to the Third
Division (G.R. Nos. 104911-14, Rollo, p. 895).
In the Resolution dated September 29, 1993, the Third Division
granted the motion filed in G.R. Nos. 104911-14 for the
consolidation of said cases with G.R. Nos. 104776 and
105029-32, which were assigned to the First Division (G.R.
Nos. 104911-14, Rollo, pp. 986-1,107; G.R. Nos. 10502930, Rollo, pp. 369-377, 426-432). In the Resolution dated
October 27, 1993, the First Division granted the motion to
consolidate G.R. Nos. 104911-14 with G.R. No. 104776 (G.R.
Nos. 104911-14, Rollo, p. 1109; G.R. Nos. 105029-32, Rollo, p.
1562).
I
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul
and Donato B. Evangelista, in their own behalf and on behalf of
728 other overseas contract workers (OCWs) instituted a class
suit by filing an "Amended Complaint" with the Philippine
Overseas Employment Administration (POEA) for money
claims arising from their recruitment by AIBC and employment
by BRII (POEA Case No. L-84-06-555). The claimants were
represented by Atty. Gerardo del Mundo.
BRII is a foreign corporation with headquarters in Houston,
Texas, and is engaged in construction; while AIBC is a
domestic corporation licensed as a service contractor to
recruit, mobilize and deploy Filipino workers for overseas
employment on behalf of its foreign principals.
The amended complaint principally sought the payment of the
unexpired portion of the employment contracts, which was
terminated prematurely, and secondarily, the payment of the
interest of the earnings of the Travel and Reserved Fund,
interest on all the unpaid benefits; area wage and salary
differential pay; fringe benefits; refund of SSS and premium not
remitted to the SSS; refund of withholding tax not remitted to
the BIR; penalties for committing prohibited practices; as well
as the suspension of the license of AIBC and the accreditation
of BRII (G.R. No. 104776, Rollo, pp. 13-14).
At the hearing on June 25, 1984, AIBC was furnished a copy of
the complaint and was given, together with BRII, up to July 5,
1984 to file its answer.
On July 3, 1984, POEA Administrator, upon motion of AIBC
and BRII, ordered the claimants to file a bill of particulars within
ten days from receipt of the order and the movants to file their
answers within ten days from receipt of the bill of particulars.
The POEA Administrator also scheduled a pre-trial conference
on July 25, 1984.
On July 13, 1984, the claimants submitted their "Compliance
and Manifestation." On July 23, 1984, AIBC filed a "Motion to
Strike Out of the Records", the "Complaint" and the
"Compliance and Manifestation." On July 25, 1984, the
claimants filed their "Rejoinder and Comments," averring,
among other matters, the failure of AIBC and BRII to file their
answers and to attend the pre-trial conference on July 25,
1984. The claimants alleged that AIBC and BRII had waived
their right to present evidence and had defaulted by failing to
file their answers and to attend the pre-trial conference.
On October 2, 1984, the POEA Administrator denied the
"Motion to Strike Out of the Records" filed by AIBC but required
the claimants to correct the deficiencies in the complaint
pointed out in the order.

Page 17 of 42
On October 10, 1984, claimants asked for time within which to
comply with the Order of October 2, 1984 and filed an "Urgent
Manifestation," praying that the POEA Administrator direct the
parties to submit simultaneously their position papers, after
which the case should be deemed submitted for decision. On
the same day, Atty. Florante de Castro filed another complaint
for the same money claims and benefits in behalf of several
claimants, some of whom were also claimants in POEA Case
No. L-84-06-555 (POEA Case No. 85-10-779).
On October 19, 1984, claimants filed their "Compliance" with
the Order dated October 2, 1984 and an "Urgent
Manifestation," praying that the POEA direct the parties to
submit simultaneously their position papers after which the
case would be deemed submitted for decision. On the same
day, AIBC asked for time to file its comment on the
"Compliance" and "Urgent Manifestation" of claimants. On
November 6, 1984, it filed a second motion for extension of
time to file the comment.
On November 8, 1984, the POEA Administrator informed AIBC
that its motion for extension of time was granted.
On November 14, 1984, claimants filed an opposition to the
motions for extension of time and asked that AIBC and BRII be
declared in default for failure to file their answers.
On November 20, 1984, AIBC and BRII filed a "Comment"
praying, among other reliefs, that claimants should be ordered
to amend their complaint.
On December 27, 1984, the POEA Administrator issued an
order directing AIBC and BRII to file their answers within ten
days from receipt of the order.
On February 27, 1985, AIBC and BRII appealed to NLRC
seeking the reversal of the said order of the POEA
Administrator. Claimants opposed the appeal, claiming that it
was dilatory and praying that AIBC and BRII be declared in
default.
On April 2, 1985, the original claimants filed an "Amended
Complaint and/or Position Paper" dated March 24, 1985,
adding new demands: namely, the payment of overtime pay,
extra night work pay, annual leave differential pay, leave
indemnity pay, retirement and savings benefits and their share
of forfeitures (G.R. No. 104776, Rollo, pp. 14-16). On April 15,
1985, the POEA Administrator directed AIBC to file its answer
to the amended complaint (G.R. No. 104776, Rollo, p. 20).
On May 28, 1985, claimants filed an "Urgent Motion for
Summary Judgment." On the same day, the POEA issued an
order directing AIBC and BRII to file their answers to the
"Amended Complaint," otherwise, they would be deemed to
have waived their right to present evidence and the case would
be resolved on the basis of complainant's evidence.
On June 5, 1985, AIBC countered with a "Motion to Dismiss as
Improper Class Suit and Motion for Bill of Particulars Re:
Amended Complaint dated March 24, 1985." Claimants
opposed the motions.
On September 4, 1985, the POEA Administrator reiterated his
directive to AIBC and BRII to file their answers in POEA Case
No. L-84-06-555.
On September 18, 1985, AIBC filed its second appeal to the
NLRC, together with a petition for the issuance of a writ of
injunction. On September 19, 1985, NLRC enjoined the POEA
Administrator from hearing the labor cases and suspended the
period for the filing of the answers of AIBC and BRII.
On September 19, 1985, claimants asked the POEA
Administrator to include additional claimants in the case and to
investigate alleged wrongdoings of BRII, AIBC and their
respective lawyers.

On October 10, 1985, Romeo Patag and two co-claimants filed

a complaint (POEA Case No. L-85-10-777) against AIBC and
BRII with the POEA, demanding monetary claims similar to
those subject of POEA Case No. L-84-06-555. In the same
month, Solomon Reyes also filed his own complaint (POEA
Case No. L-85-10-779) against AIBC and BRII.
On October 17, 1985, the law firm of Florante M. de Castro &
Associates asked for the substitution of the original counsel of
record and the cancellation of the special powers of attorney
given the original counsel.
On December 12, 1985, Atty. Del Mundo filed in NLRC a notice
of the claim to enforce attorney's lien.
On May 29, 1986, Atty. De Castro filed a complaint for money
claims (POEA Case No. 86-05-460) in behalf of 11 claimants
including Bienvenido Cadalin, a claimant in POEA Case No.
84-06-555.
On December 12, 1986, the NLRC dismissed the two appeals
filed on February 27, 1985 and September 18, 1985 by AIBC
and BRII.
In narrating the proceedings of the labor cases before the
POEA Administrator, it is not amiss to mention that two cases
were filed in the Supreme Court by the claimants, namely
G.R. No. 72132 on September 26, 1985 and Administrative
Case No. 2858 on March 18, 1986. On May 13, 1987, the
Supreme Court issued a resolution in Administrative Case No.
2858 directing the POEA Administrator to resolve the issues
raised in the motions and oppositions filed in POEA Cases
Nos. L-84-06-555 and L-86-05-460 and to decide the labor
cases with deliberate dispatch.
AIBC also filed a petition in the Supreme Court (G.R. No.
78489), questioning the Order dated September 4, 1985 of the
POEA Administrator. Said order required BRII and AIBC to
answer the amended complaint in POEA Case No. L-84-06555. In a resolution dated November 9, 1987, we dismissed
the petition by informing AIBC that all its technical objections
may properly be resolved in the hearings before the POEA.
Complaints were also filed before the Ombudsman. The first
was filed on September 22, 1988 by claimant Hermie Arguelles
and 18 co-claimants against the POEA Administrator and
several NLRC Commissioners. The Ombudsman merely
referred the complaint to the Secretary of Labor and
Employment with a request for the early disposition of POEA
Case No. L-84-06-555. The second was filed on April 28, 1989
by claimants Emigdio P. Bautista and Rolando R. Lobeta
charging AIBC and BRII for violation of labor and social
legislations. The third was filed by Jose R. Santos, Maximino
N. Talibsao and Amado B. Bruce denouncing AIBC and BRII of
violations of labor laws.
On January 13, 1987, AIBC filed a motion for reconsideration
of the NLRC Resolution dated December 12, 1986.
On January 14, 1987, AIBC reiterated before the POEA
Administrator its motion for suspension of the period for filing
an answer or motion for extension of time to file the same until
the resolution of its motion for reconsideration of the order of
the NLRC dismissing the two appeals. On April 28, 1987,
NLRC en banc denied the motion for reconsideration.
At the hearing on June 19, 1987, AIBC submitted its answer to
the complaint. At the same hearing, the parties were given a
period of 15 days from said date within which to submit their
respective position papers. On June 24, 1987 claimants filed
their "Urgent Motion to Strike Out Answer," alleging that the
answer was filed out of time. On June 29, 1987, claimants filed
their "Supplement to Urgent Manifestational Motion" to comply
with the POEA Order of June 19, 1987. On February 24, 1988,
AIBC and BRII submitted their position paper. On March 4,
1988, claimants filed their "Ex-Parte Motion to Expunge from

Page 18 of 42
the Records" the position paper of AIBC and BRII, claiming that
it was filed out of time.
On September 1, 1988, the claimants represented by Atty. De
Castro filed their memorandum in POEA Case No. L-86-05460. On September 6, 1988, AIBC and BRII submitted their
Supplemental Memorandum. On September 12, 1988, BRII
filed its "Reply to Complainant's Memorandum." On October
26, 1988, claimants submitted their "Ex-Parte Manifestational
Motion and Counter-Supplemental Motion," together with 446
individual contracts of employments and service records. On
October 27, 1988, AIBC and BRII filed a "Consolidated Reply."
On January 30, 1989, the POEA Administrator rendered his
decision in POEA Case No. L-84-06-555 and the other
consolidated cases, which awarded the amount of $824,652.44
in favor of only 324 complainants.
On February 10, 1989, claimants submitted their "Appeal
Memorandum For Partial Appeal" from the decision of the
POEA. On the same day, AIBC also filed its motion for
reconsideration and/or appeal in addition to the "Notice of
Appeal" filed earlier on February 6, 1989 by another counsel
for AIBC.
On February 17, 1989, claimants filed their "Answer to Appeal,"
praying for the dismissal of the appeal of AIBC and BRII.
On March 15, 1989, claimants filed their "Supplement to
Complainants' Appeal Memorandum," together with their
"newly discovered evidence" consisting of payroll records.
On April 5, 1989, AIBC and BRII submitted to NLRC their
"Manifestation," stating among other matters that there were
only 728 named claimants. On April 20, 1989, the claimants
filed their "Counter-Manifestation," alleging that there were
1,767 of them.
On July 27, 1989, claimants filed their "Urgent Motion for
Execution" of the Decision dated January 30, 1989 on the
grounds that BRII had failed to appeal on time and AIBC had
not posted the supersedeas bond in the amount of
$824,652.44.
On December 23, 1989, claimants filed another motion to
resolve the labor cases.
On August 21, 1990, claimants filed their "Manifestational
Motion," praying that all the 1,767 claimants be awarded their
monetary claims for failure of private respondents to file their
answers within the reglamentary period required by law.
On September 2, 1991, NLRC promulgated its Resolution,
disposing as follows:
WHEREFORE, premises considered, the Decision of the
POEA in these consolidated cases is modified to the extent
and in accordance with the following dispositions:
1. The claims of the 94 complainants identified and listed in
Annex "A" hereof are dismissed for having prescribed;
2. Respondents AIBC and Brown & Root are hereby ordered,
jointly and severally, to pay the 149 complainants, identified
and listed in Annex "B" hereof, the peso equivalent, at the time
of payment, of the total amount in US dollars indicated
opposite their respective names;
3. The awards given by the POEA to the 19 complainants
classified and listed in Annex "C" hereof, who appear to have
worked elsewhere than in Bahrain are hereby set aside.
4. All claims other than those indicated in Annex "B", including
those for overtime work and favorably granted by the POEA,
are hereby dismissed for lack of substantial evidence in
support thereof or are beyond the competence of this
Commission to pass upon.

In addition, this Commission, in the exercise of its powers and

authority under Article 218(c) of the Labor Code, as amended
by R.A. 6715, hereby directs Labor Arbiter Fatima J. Franco of
this Commission to summon parties, conduct hearings and
receive evidence, as expeditiously as possible, and thereafter
submit a written report to this Commission (First Division) of
the proceedings taken, regarding the claims of the following:
(a) complainants identified and listed in Annex "D" attached
and made an integral part of this Resolution, whose claims
were dismissed by the POEA for lack of proof of employment in
Bahrain (these complainants numbering 683, are listed in
pages 13 to 23 of the decision of POEA, subject of the
appeals) and,
(b) complainants identified and listed in Annex "E" attached
and made an integral part of this Resolution, whose awards
decreed by the POEA, to Our mind, are not supported by
substantial evidence" (G.R. No. 104776; Rollo, pp. 113-115;
G.R. Nos. 104911-14, pp. 85-87; G.R. Nos. 105029-31, pp.
120-122).
On November 27, 1991, claimant Amado S. Tolentino and 12
co-claimants, who were former clients of Atty. Del Mundo, filed
a petition for certiorari with the Supreme Court (G.R. Nos.
120741-44). The petition was dismissed in a resolution dated
January 27, 1992.
Three motions for reconsideration of the September 2, 1991
Resolution of the NLRC were filed. The first, by the claimants
represented by Atty. Del Mundo; the second, by the claimants
represented by Atty. De Castro; and the third, by AIBC and
BRII.
In its Resolution dated March 24, 1992, NLRC denied all the
motions for reconsideration.
Hence, these petitions filed by the claimants represented by
Atty. Del Mundo (G.R. No. 104776), the claimants represented
by Atty. De Castro (G.R. Nos. 104911-14) and by AIBC and
BRII (G.R. Nos. 105029-32).
II
Compromise Agreements
Before this Court, the claimants represented by Atty. De Castro
and AIBC and BRII have submitted, from time to time,
compromise agreements for our approval and jointly moved for
the dismissal of their respective petitions insofar as the
claimants-parties to the compromise agreements were
concerned (See Annex A for list of claimants who signed
quitclaims).
Thus the following manifestations that the parties had arrived
at a compromise agreement and the corresponding motions for
the approval of the agreements were filed by the parties and
approved by the Court:
1) Joint Manifestation and Motion involving claimant Emigdio
Abarquez and 47 co-claimants dated September 2, 1992 (G.R.
Nos. 104911-14, Rollo, pp. 263-406; G.R. Nos. 10502932, Rollo,
pp.
470-615);
2) Joint Manifestation and Motion involving petitioner
Bienvenido Cadalin and 82 co-petitioners dated September 3,
1992 (G.R. No. 104776, Rollo, pp. 364-507);
3) Joint Manifestation and Motion involving claimant Jose
M. Aban and 36 co-claimants dated September 17, 1992 (G.R.
Nos. 105029-32, Rollo, pp. 613-722; G.R. No. 104776, Rollo,
pp. 518-626; G.R. Nos. 104911-14, Rollo, pp. 407-516);
4) Joint Manifestation and Motion involving claimant Antonio T.
Anglo and 17 co-claimants dated October 14, 1992 (G.R. Nos.
105029-32, Rollo, pp. 778-843; G.R. No. 104776, Rollo, pp.
650-713; G.R. Nos. 104911-14, Rollo, pp. 530-590);

Page 19 of 42
5) Joint Manifestation and Motion involving claimant Dionisio
Bobongo and 6 co-claimants dated January 15, 1993 (G.R. No.
104776, Rollo, pp. 813-836; G.R. Nos. 104911-14, Rollo, pp.
629-652);
6) Joint Manifestation and Motion involving claimant Valerio A.
Evangelista and 4 co-claimants dated March 10, 1993 (G.R.
Nos. 104911-14, Rollo, pp. 731-746; G.R. No. 104776, Rollo,
pp. 1815-1829);
7) Joint Manifestation and Motion involving claimants Palconeri
Banaag and 5 co-claimants dated March 17, 1993 (G.R. No.
104776, Rollo, pp. 1657-1703; G.R. Nos. 104911-14, Rollo, pp.
655-675);
8) Joint Manifestation and Motion involving claimant Benjamin
Ambrosio and 15 other co-claimants dated May 4, 1993 (G.R.
Nos. 105029-32, Rollo, pp. 906-956; G.R. Nos. 10491114, Rollo, pp. 679-729; G.R. No. 104776, Rollo, pp. 17731814);
9) Joint Manifestation and Motion involving Valerio Evangelista
and 3 co-claimants dated May 10, 1993 (G.R. No.
104776, Rollo, pp. 1815-1829);
10) Joint Manifestation and Motion involving petitioner Quiterio
R. Agudo and 36 co-claimants dated June 14, 1993 (G.R. Nos.
105029-32, Rollo, pp. 974-1190; G.R. Nos. 104911-14, Rollo,
pp. 748-864; G.R. No. 104776, Rollo, pp. 1066-1183);
11) Joint Manifestation and Motion involving claimant Arnaldo
J. Alonzo and 19 co-claimants dated July 22, 1993 (G.R. No.
104776, Rollo, pp. 1173-1235; G.R. Nos. 105029-32, Rollo, pp.
1193-1256; G.R. Nos. 104911-14, Rollo, pp. 896-959);
12) Joint Manifestation and Motion involving claimant Ricardo
C. Dayrit and 2 co-claimants dated September 7, 1993 (G.R.
Nos.
105029-32, Rollo, pp. 1266-1278; G.R. No. 104776, Rollo, pp.
1243-1254; G.R. Nos. 104911-14, Rollo, pp. 972-984);
13) Joint Manifestation and Motion involving claimant Dante C.
Aceres and 37 co-claimants dated September 8, 1993 (G.R.
No. 104776, Rollo, pp. 1257-1375; G.R. Nos. 10491114, Rollo, pp. 987-1105; G.R. Nos. 105029-32, Rollo, pp. 12801397);
14) Joint Manifestation and Motion involving Vivencio V. Abella
and 27 co-claimants dated January 10, 1994 (G.R. Nos.
105029-32, Rollo, Vol. II);
15) Joint Manifestation and Motion involving Domingo B.
Solano and six co-claimants dated August 25, 1994 (G.R. Nos.
105029-32; G.R. No. 104776; G.R. Nos. 104911-14).
III
The facts as found by the NLRC are as follows:
We have taken painstaking efforts to sift over the more than
fifty volumes now comprising the records of these cases. From
the records, it appears that the complainants-appellants allege
that they were recruited by respondent-appellant AIBC for its
accredited foreign principal, Brown & Root, on various dates
from 1975 to 1983. They were all deployed at various projects
undertaken by Brown & Root in several countries in the Middle
East, such as Saudi Arabia, Libya, United Arab Emirates and
Bahrain, as well as in Southeast Asia, in Indonesia and
Malaysia.
Having been officially processed as overseas contract workers
by the Philippine Government, all the individual complainants
signed standard overseas employment contracts (Records,
Vols. 25-32. Hereafter, reference to the records would be
sparingly made, considering their chaotic arrangement) with
AIBC before their departure from the Philippines. These
overseas employment contracts invariably contained the
following relevant terms and conditions.

PART B
(1) Employment Position Classification :
(Code) :
(2) Company Employment Status
(3)
Date
of
Employment
to

(4) Basic Working Hours Per Week

(5) Basic Working Hours Per Month
(6)
Basic
Hourly
Rate
(7)
Overtime
Rate
Per
Hour
(8)
Projected
Period
(Subject to C(1) of this [sic])
Months
Job Completion

:
Commence
on
:
:
:
:
:
of
Service
:
and/or

xxx xxx xxx

3. HOURS OF WORK AND COMPENSATION
a) The Employee is employed at the hourly rate and overtime
rate as set out in Part B of this Document.
b) The hours of work shall be those set forth by the Employer,
and Employer may, at his sole option, change or adjust such
hours as maybe deemed necessary from time to time.
4. TERMINATION
a) Notwithstanding any other terms and conditions of this
agreement, the Employer may, at his sole discretion, terminate
employee's service with cause, under this agreement at any
time. If the Employer terminates the services of the Employee
under this Agreement because of the completion or
termination, or suspension of the work on which the
Employee's services were being utilized, or because of a
reduction in force due to a decrease in scope of such work, or
by change in the type of construction of such work. The
Employer will be responsible for his return transportation to his
country of origin. Normally on the most expeditious air route,
economy class accommodation.
xxx xxx xxx
10. VACATION/SICK LEAVE BENEFITS
a) After one (1) year of continuous service and/or satisfactory
completion of contract, employee shall be entitled to 12-days
vacation leave with pay. This shall be computed at the basic
wage rate. Fractions of a year's service will be computed on
a pro-rata basis.
b) Sick leave of 15-days shall be granted to the employee for
every year of service for non-work connected injuries or illness.
If the employee failed to avail of such leave benefits, the same
shall be forfeited at the end of the year in which said sick leave
is granted.
11. BONUS
A bonus of 20% (for offshore work) of gross income will be
accrued and payable only upon satisfactory completion of this
contract.
12. OFFDAY PAY
The seventh day of the week shall be observed as a day of
rest with 8 hours regular pay. If work is performed on this day,
all hours work shall be paid at the premium rate. However, this
offday pay provision is applicable only when the laws of the
Host Country require payments for rest day.
In the State of Bahrain, where some of the individual
complainants were deployed, His Majesty Isa Bin Salman Al
Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23 on June
16, 1976, otherwise known as the Labour Law for the Private
Sector (Records, Vol. 18). This decree took effect on August
16, 1976. Some of the provisions of Amiri Decree No. 23 that

Page 20 of 42
are relevant to the claims of the complainants-appellants are
as follows (italics supplied only for emphasis):

(a) Whether or not the respondent-appellant was denied its

right to due process;

Art. 79: . . . A worker shall receive payment for each extra hour
equivalent to his wage entitlement increased by a minimum of
twenty-five per centum thereof for hours worked during the
day; and by a minimum of fifty per centum thereof for hours
worked during the night which shall be deemed to being from
seven o'clock in the evening until seven o'clock in the morning.
...

(b) Whether or not the admission of evidence by the POEA

after these cases were submitted for decision was valid;

Art. 80: Friday shall be deemed to be a weekly day of rest on

full pay.

(e) Whether or not the awards based on the averages and

formula presented by the complainants-appellants are
supported by substantial evidence;

. . . an employer may require a worker, with his consent, to

work on his weekly day of restif circumstances so require
and in respect of which an additional sum equivalent to 150%
of his normal wage shall be paid to him. . . .
Art. 81: . . . When conditions of work require the worker to
work on any official holiday, he shall be paid an additional sum
equivalent to 150% of his normal wage.
Art. 84: Every worker who has completed one year's
continuous service with his employer shall be entitled to leave
on full pay for a period of not less than 21 days for each year
increased to a period not less than 28 days after five
continuous years of service.
A worker shall be entitled to such leave upon a quantum
meruit in respect of the proportion of his service in that year.
Art. 107: A contract of employment made for a period of
indefinite duration may be terminated by either party thereto
after giving the other party thirty days' prior notice before such
termination, in writing, in respect of monthly paid workers and
fifteen days' notice in respect of other workers. The party
terminating a contract without giving the required notice shall
pay to the other party compensation equivalent to the amount
of wages payable to the worker for the period of such notice or
the unexpired portion thereof.
Art. 111: . . . the employer concerned shall pay to such worker,
upon termination of employment, a leaving indemnity for the
period of his employment calculated on the basis of fifteen
days' wages for each year of the first three years of service
and of one month's wages for each year of service thereafter.
Such worker shall be entitled to payment of leaving indemnity
upon a quantum meruit in proportion to the period of his
service completed within a year.
All the individual complainants-appellants have already been
repatriated to the Philippines at the time of the filing of these
cases (R.R. No. 104776, Rollo, pp. 59-65).
IV
The issues raised before and resolved by the NLRC were:
First: Whether or not complainants are entitled to the
benefits provided by Amiri Decree No. 23 of Bahrain;

(c) Whether or not the POEA acquired jurisdiction over Brown

& Root International, Inc.;
(d) Whether or not the judgment awards are supported by
substantial evidence;

(f) Whether or not the POEA awarded sums beyond what the
complainants-appellants prayed for; and, if so, whether or not
these awards are valid.
Fifth: Whether or not the POEA erred in holding
respondents AIBC and Brown & Root jointly are severally liable
for the judgment awards despite the alleged finding that the
former was the employer of the complainants;
(a) Whether or not the POEA has acquired jurisdiction over
Brown & Root;
(b) Whether or not the undisputed fact that AIBC was a
licensed construction contractor precludes a finding that Brown
& Root is liable for complainants claims.
Sixth: Whether or not the POEA Administrator's failure to
hold respondents in default constitutes a reversible error.
Seventh: Whether or not the POEA Administrator erred in
dismissing the following claims:
a. Unexpired portion of contract;
b. Interest earnings of Travel and Reserve Fund;
c. Retirement and Savings Plan benefits;
d. War Zone bonus or premium pay of at least 100% of basic
pay;
e. Area Differential Pay;
f. Accrued interests on all the unpaid benefits;
g. Salary differential pay;
h. Wage differential pay;
i. Refund of SSS premiums not remitted to SSS;
j. Refund of withholding tax not remitted to BIR;
k. Fringe benefits under B & R's "A Summary of Employee
Benefits" (Annex "Q" of Amended Complaint);
l. Moral and exemplary damages;
m. Attorney's fees of at least ten percent of the judgment
award;

(a) Whether or not the complainants who have worked in

Bahrain are entitled to the above-mentioned benefits.

n. Other reliefs, like suspending and/or cancelling the license

to recruit of AIBC and the accreditation of B & R issued by
POEA;

(b) Whether or not Art. 44 of the same Decree (allegedly

prescribing a more favorable treatment of alien employees)
bars complainants from enjoying its benefits.

o. Penalty for violations of Article 34 (prohibited practices), not

excluding reportorial requirements thereof.

Second: Assuming that Amiri Decree No. 23 of Bahrain is

applicable in these cases, whether or not complainants' claim
for the benefits provided therein have prescribed.
Third: Whether or not the instant cases qualify as a class
suit.
Fourth: Whether or not the proceedings conducted by the
POEA, as well as the decision that is the subject of these
appeals, conformed with the requirements of due process;

Eighth: Whether or not the POEA Administrator erred in not

dismissing POEA Case No. (L) 86-65-460 on the ground of
multiplicity of suits (G.R. Nos. 104911-14, Rollo, pp. 25-29, 5155).
Anent the first issue, NLRC set aside Section 1, Rule 129 of
the 1989 Revised Rules on Evidence governing the pleading
and proof of a foreign law and admitted in evidence a simple
copy of the Bahrain's Amiri Decree No. 23 of 1976 (Labour Law
for the Private Sector). NLRC invoked Article 221 of the Labor
Code of the Philippines, vesting on the Commission ample

Page 21 of 42
discretion to use every and all reasonable means to ascertain
the facts in each case without regard to the technicalities of law
or procedure. NLRC agreed with the POEA Administrator that
the Amiri Decree No. 23, being more favorable and beneficial
to the workers, should form part of the overseas employment
contract of the complainants.

ground that the claimants in said case were also claimants in

POEA Case No. (L) 84-06-555. Instead of dismissing POEA
Case No. (L) 86-65-460, the POEA just resolved the
corresponding claims in POEA Case No. (L) 84-06-555. In
other words, the POEA did not pass upon the same claims
twice.

NLRC, however, held that the Amiri Decree No. 23 applied only
to the claimants, who worked in Bahrain, and set aside awards
of the POEA Administrator in favor of the claimants, who
worked elsewhere.

On the second issue, NLRC ruled that the prescriptive period

for the filing of the claims of the complainants was three years,
as provided in Article 291 of the Labor Code of the Philippines,
and not ten years as provided in Article 1144 of the Civil Code
of the Philippines nor one year as provided in the Amiri Decree
No. 23 of 1976.
On the third issue, NLRC agreed with the POEA Administrator
that the labor cases cannot be treated as a class suit for the
simple reason that not all the complainants worked in Bahrain
and therefore, the subject matter of the action, the claims
arising from the Bahrain law, is not of common or general
interest to all the complainants.
On the fourth issue, NLRC found at least three infractions of
the cardinal rules of administrative due process: namely, (1)
the failure of the POEA Administrator to consider the evidence
presented by AIBC and BRII; (2) some findings of fact were not
supported by substantial evidence; and (3) some of the
evidence upon which the decision was based were not
disclosed to AIBC and BRII during the hearing.
On the fifth issue, NLRC sustained the ruling of the POEA
Administrator that BRII and AIBC are solidarily liable for the
claims of the complainants and held that BRII was the actual
employer of the complainants, or at the very least, the indirect
employer, with AIBC as the labor contractor.
NLRC also held that jurisdiction over BRII was acquired by the
POEA Administrator through the summons served on AIBC, its
local agent.
On the sixth issue, NLRC held that the POEA Administrator
was correct in denying the Motion to Declare AIBC in default.
On the seventh issue, which involved other money claims not
based on the Amiri Decree No. 23, NLRC ruled:
(1) that the POEA Administrator has no jurisdiction over the
claims for refund of the SSS premiums and refund of
withholding taxes and the claimants should file their claims for
said refund with the appropriate government agencies;
(2) the claimants failed to establish that they are entitled to the
claims which are not based on the overseas employment
contracts nor the Amiri Decree No. 23 of 1976;
(3) that the POEA Administrator has no jurisdiction over claims
for moral and exemplary damages and nonetheless, the basis
for granting said damages was not established;
(4) that the claims for salaries corresponding to the unexpired
portion of their contract may be allowed if filed within the threeyear prescriptive period;

G.R. No. 104776

Claimants in G.R. No. 104776
for certiorari on the following grounds:

based

their

petition

(1) that they were deprived by NLRC and the POEA of their
right to a speedy disposition of their cases as guaranteed by
Section 16, Article III of the 1987 Constitution. The POEA
Administrator allowed private respondents to file their answers
in two years (on June 19, 1987) after the filing of the original
complaint (on April 2, 1985) and NLRC, in total disregard of its
own rules, affirmed the action of the POEA Administrator;
(2) that NLRC and the POEA Administrator should have
declared AIBC and BRII in default and should have rendered
summary judgment on the basis of the pleadings and evidence
submitted by claimants;
(3) the NLRC and POEA Administrator erred in not holding that
the labor cases filed by AIBC and BRII cannot be considered a
class suit;
(4) that the prescriptive period for the filing of the claims is ten
years; and
(5) that NLRC and the POEA Administrator should have
dismissed POEA Case No. L-86-05-460, the case filed by Atty.
Florante de Castro (Rollo, pp. 31-40).
AIBC and BRII, commenting on the petition in G.R. No.
104776, argued:
(1) that they were not responsible for the delay in the
disposition of the labor cases, considering the great difficulty of
getting all the records of the more than 1,500 claimants, the
piece-meal filing of the complaints and the addition of
hundreds of new claimants by petitioners;
(2) that considering the number of complaints and claimants, it
was impossible to prepare the answers within the ten-day
period provided in the NLRC Rules, that when the motion to
declare AIBC in default was filed on July 19, 1987, said party
had already filed its answer, and that considering the
staggering
amount
of
the
claims
(more
than
US$50,000,000.00) and the complicated issues raised by the
parties, the ten-day rule to answer was not fair and reasonable;
(3) that the claimants failed to refute NLRC's finding that
there was no common or general interest in the subject matter
of the controversy which was the applicability of the Amiri
Decree No. 23. Likewise, the nature of the claims varied, some
being based on salaries pertaining to the unexpired portion of
the contracts while others being for pure money claims. Each
claimant demanded separate claims peculiar only to himself
and depending upon the particular circumstances obtaining in
his case;

(5) that the allegation that complainants were prematurely

repatriated prior to the expiration of their overseas contract
was not established; and

(4) that the prescriptive period for filing the claims is that
prescribed by Article 291 of the Labor Code of the Philippines
(three years) and not the one prescribed by Article 1144 of the
Civil Code of the Philippines (ten years); and

(6) that the POEA Administrator has no jurisdiction over the

complaint for the suspension or cancellation of the AIBC's
recruitment license and the cancellation of the accreditation of
BRII.

(5) that they are not concerned with the issue of whether POEA
Case No. L-86-05-460 should be dismissed, this being a
private quarrel between the two labor lawyers (Rollo, pp. 292305).

NLRC passed sub silencio the last issue, the claim that POEA
Case No. (L) 86-65-460 should have been dismissed on the

Attorney's Lien

Page 22 of 42
On November 12, 1992, Atty. Gerardo A. del Mundo moved to
strike out the joint manifestations and motions of AIBC and
BRII dated September 2 and 11, 1992, claiming that all the
claimants who entered into the compromise agreements
subject of said manifestations and motions were his clients and
that Atty. Florante M. de Castro had no right to represent them
in said agreements. He also claimed that the claimants were
paid less than the award given them by NLRC; that Atty. De
Castro collected additional attorney's fees on top of the 25%
which he was entitled to receive; and that the consent of the
claimants to the compromise agreements and quitclaims were
procured by fraud (G.R. No. 104776, Rollo, pp. 838-810). In
the Resolution dated November 23, 1992, the Court denied the
motion to strike out the Joint Manifestations and Motions dated
September 2 and 11, 1992 (G.R. Nos. 104911-14, Rollo, pp.
608-609).
On December 14, 1992, Atty. Del Mundo filed a "Notice and
Claim to Enforce Attorney's Lien," alleging that the claimants
who entered into compromise agreements with AIBC and BRII
with the assistance of Atty. De Castro, had all signed a retainer
agreement with his law firm (G.R. No. 104776, Rollo, pp. 623624; 838-1535).
Contempt of Court
On February 18, 1993, an omnibus motion was filed by Atty.
Del Mundo to cite Atty. De Castro and Atty. Katz Tierra for
contempt of court and for violation of Canons 1, 15 and 16 of
the Code of Professional Responsibility. The said lawyers
allegedly misled this Court, by making it appear that the
claimants who entered into the compromise agreements were
represented by Atty. De Castro, when in fact they were
represented by Atty. Del Mundo (G.R. No. 104776, Rollo, pp.
1560-1614).
On September 23, 1994, Atty. Del Mundo reiterated his
charges against Atty. De Castro for unethical practices and
moved for the voiding of the quitclaims submitted by some of
the claimants.
G.R. Nos. 104911-14
The claimants in G.R. Nos. 104911-14 based their petition
for certiorari on the grounds that NLRC gravely abused its
discretion when it: (1) applied the three-year prescriptive period
under the Labor Code of the Philippines; and (2) it denied the
claimant's formula based on an average overtime pay of three
hours a day (Rollo, pp. 18-22).
The claimants argue that said method was proposed by BRII
itself during the negotiation for an amicable settlement of their
money claims in Bahrain as shown in the Memorandum dated
April 16, 1983 of the Ministry of Labor of Bahrain (Rollo, pp.
21-22).
BRII and AIBC, in their Comment, reiterated their contention in
G.R. No. 104776 that the prescriptive period in the Labor Code
of the Philippines, a special law, prevails over that provided in
the Civil Code of the Philippines, a general law.
As to the memorandum of the Ministry of Labor of Bahrain on
the method of computing the overtime pay, BRII and AIBC
claimed that they were not bound by what appeared therein,
because such memorandum was proposed by a subordinate
Bahrain official and there was no showing that it was approved
by the Bahrain Minister of Labor. Likewise, they claimed that
the averaging method was discussed in the course of the
negotiation for the amicable settlement of the dispute and any
offer made by a party therein could not be used as an
admission by him (Rollo, pp. 228-236).
G.R. Nos. 105029-32
In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC
gravely abused its discretion when it: (1) enforced the

provisions of the Amiri Decree No. 23 of 1976 and not the

terms of the employment contracts; (2) granted claims for
holiday, overtime and leave indemnity pay and other benefits,
on evidence admitted in contravention of petitioner's
constitutional right to due process; and (3) ordered the POEA
Administrator to hold new hearings for the 683 claimants
whose claims had been dismissed for lack of proof by the
POEA Administrator or NLRC itself. Lastly, they allege that
assuming that the Amiri Decree No. 23 of 1976 was applicable,
NLRC erred when it did not apply the one-year prescription
provided in said law (Rollo, pp. 29-30).
VI
G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos. 105029-32
All the petitions raise the common issue of prescription
although they disagreed as to the time that should be
embraced within the prescriptive period.
To the POEA Administrator, the prescriptive period was ten
years, applying Article 1144 of the Civil Code of the Philippines.
NLRC believed otherwise, fixing the prescriptive period at three
years as provided in Article 291 of the Labor Code of the
Philippines.
The claimants in G.R. No. 104776 and G.R. Nos. 104911-14,
invoking different grounds, insisted that NLRC erred in ruling
that the prescriptive period applicable to the claims was three
years, instead of ten years, as found by the POEA
Administrator.
The Solicitor General expressed his personal view that the
prescriptive period was one year as prescribed by the Amiri
Decree No. 23 of 1976 but he deferred to the ruling of NLRC
that Article 291 of the Labor Code of the Philippines was the
operative law.
The POEA Administrator held the view that:
These money claims (under Article 291 of the Labor Code)
refer to those arising from the employer's violation of the
employee's right as provided by the Labor Code.
In the instant case, what the respondents violated are not the
rights of the workers as provided by the Labor Code, but the
provisions of the Amiri Decree No. 23 issued in Bahrain,
which ipso factoamended the worker's contracts of
employment. Respondents consciously failed to conform to
these provisions which specifically provide for the increase of
the worker's rate. It was only after June 30, 1983, four months
after the brown builders brought a suit against B & R in Bahrain
for this same claim, when respondent AIBC's contracts have
undergone amendments in Bahrain for the new hires/renewals
(Respondent's Exhibit 7).
Hence, premises considered, the applicable law of prescription
to this instant case is Article 1144 of the Civil Code of the
Philippines, which provides:
Art. 1144. The following actions may be brought within ten
years from the time the cause of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
Thus, herein money claims of the complainants against the
respondents shall prescribe in ten years from August 16, 1976.
Inasmuch as all claims were filed within the ten-year
prescriptive period, no claim suffered the infirmity of being
prescribed (G.R. No. 104776, Rollo, 89-90).
In overruling the POEA Administrator, and holding that the
prescriptive period is three years as provided in Article 291 of
the Labor Code of the Philippines, the NLRC argued as
follows:

Page 23 of 42
The Labor Code provides that "all money claims arising from
employer-employee relations . . . shall be filed within three
years from the time the cause of action accrued; otherwise
they shall be forever barred" (Art. 291, Labor Code, as
amended). This three-year prescriptive period shall be the one
applied here and which should be reckoned from the date of
repatriation of each individual complainant, considering the fact
that the case is having (sic) filed in this country. We do not
agree with the POEA Administrator that this three-year
prescriptive period applies only to money claims specifically
recoverable under the Philippine Labor Code. Article 291 gives
no such indication. Likewise, We can not consider
complainants' cause/s of action to have accrued from a
violation of their employment contracts. There was no violation;
the claims arise from the benefits of the law of the country
where they worked. (G.R. No. 104776, Rollo, pp.
90-91).
Anent the applicability of the one-year prescriptive period as
provided by the Amiri Decree No. 23 of 1976, NLRC opined
that the applicability of said law was one of characterization,
i.e., whether to characterize the foreign law on prescription or
statute of limitation as "substantive" or "procedural." NLRC
cited the decision in Bournias v. Atlantic Maritime
Company (220 F. 2d. 152, 2d Cir. [1955], where the issue was
the applicability of the Panama Labor Code in a case filed in
the State of New York for claims arising from said Code. In said
case, the claims would have prescribed under the Panamanian
Law but not under the Statute of Limitations of New York. The
U.S. Circuit Court of Appeals held that the Panamanian Law
was procedural as it was not "specifically intended to be
substantive," hence, the prescriptive period provided in the law
of the forum should apply. The Court observed:
. . . And where, as here, we are dealing with a statute of
limitations of a foreign country, and it is not clear on the face of
the statute that its purpose was to limit the enforceability,
outside as well as within the foreign country concerned, of the
substantive rights to which the statute pertains, we think that
as a yardstick for determining whether that was the purpose
this test is the most satisfactory one. It does not lead American
courts into the necessity of examining into the unfamiliar
peculiarities and refinements of different foreign legal
systems. . .
The court further noted:
xxx xxx xxx
Applying that test here it appears to us that the libelant is
entitled to succeed, for the respondents have failed to satisfy
us that the Panamanian period of limitation in question was
specifically aimed against the particular rights which the
libelant seeks to enforce. The Panama Labor Code is a statute
having broad objectives, viz: "The present Code regulates the
relations between capital and labor, placing them on a basis of
social justice, so that, without injuring any of the parties, there
may be guaranteed for labor the necessary conditions for a
normal life and to capital an equitable return to its investment."
In pursuance of these objectives the Code gives laborers
various rights against their employers. Article 623 establishes
the period of limitation for all such rights, except certain ones
which are enumerated in Article 621. And there is nothing in
the record to indicate that the Panamanian legislature gave
special consideration to the impact of Article 623 upon the
particular rights sought to be enforced here, as distinguished
from the other rights to which that Article is also applicable.
Were we confronted with the question of whether the limitation
period of Article 621 (which carves out particular rights to be
governed by a shorter limitation period) is to be regarded as
"substantive" or "procedural" under the rule of "specifity" we
might have a different case; but here on the surface of things
we appear to be dealing with a "broad," and not a "specific,"

statute
92-94).

of

limitations

(G.R.

No.

104776, Rollo,

pp.

Claimants in G.R. Nos. 104911-14 are of the view that Article

291 of the Labor Code of the Philippines, which was applied by
NLRC, refers only to claims "arising from the employer's
violation of the employee's right as provided by the Labor
Code." They assert that their claims are based on the violation
of their employment contracts, as amended by the Amiri
Decree No. 23 of 1976 and therefore the claims may be
brought within ten years as provided by Article 1144 of the Civil
Code of the Philippines (Rollo, G.R. Nos. 104911-14, pp.
18-21). To bolster their contention, they cite PALEA v.
Philippine Airlines, Inc., 70 SCRA 244 (1976).
AIBC and BRII, insisting that the actions on the claims have
prescribed under the Amiri Decree No. 23 of 1976, argue that
there is in force in the Philippines a "borrowing law," which is
Section 48 of the Code of Civil Procedure and that where such
kind of law exists, it takes precedence over the common-law
conflicts rule (G.R. No. 104776,Rollo, pp. 45-46).
First to be determined is whether it is the Bahrain law on
prescription of action based on the Amiri Decree No. 23 of
1976 or a Philippine law on prescription that shall be the
governing law.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not be
actionable after the lapse of one year from the date of the
expiry of the contract. (G.R. Nos. 105029-31, Rollo, p. 226).
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
(Restatement of the Conflict of Laws, Sec. 685; Salonga,
Private International Law, 131 [1979]).
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.
Thus in Bournias v. Atlantic Maritime Company, supra, the
American court applied the statute of limitations of New York,
instead of the Panamanian law, after finding that there was no
showing that the Panamanian law on prescription was intended
to be substantive. Being considered merely a procedural law
even in Panama, it has to give way to the law of the forum on
prescription of actions.
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 (Goodrich, Conflict of Laws 152-153 [1938]). 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 (Siegel, Conflicts, 183 [1975]). While there are
several kinds of "borrowing statutes," one form 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 (Goodrich and Scoles, Conflict of Laws, 152153 [1938]). Section 48 of our Code of Civil Procedure is of this
kind. Said Section provides:
If by the laws of the state or country where the cause of action
arose, the action is barred, it is also barred in the Philippines
Islands.
Section 48 has not been repealed or amended by the Civil
Code of the Philippines. Article 2270 of said Code repealed
only those provisions of the Code of Civil Procedures as to

Page 24 of 42
which were inconsistent with it. There is no provision in the
Civil Code of the Philippines, which is inconsistent with or
contradictory to Section 48 of the Code of Civil Procedure
(Paras, Philippine Conflict of Laws 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48
cannot be enforced ex proprio vigore insofar as it ordains the
application in this jurisdiction of Section 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 (Canadian Northern
Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed.
713 [1920]). To enforce the one-year prescriptive period of the
Amiri Decree No. 23 of 1976 as regards the claims in question
would contravene the public policy on the protection to labor.
In the Declaration of Principles and State Policies, the 1987
Constitution emphasized that:
The state shall promote social justice in all phases of national
development. (Sec. 10).
The state affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare
(Sec. 18).
In article XIII on Social Justice and Human Rights, the 1987
Constitution provides:
Sec. 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
Having determined that the applicable law on prescription is
the Philippine law, the next question is whether the prescriptive
period governing the filing of the claims is three years, as
provided by the Labor Code or ten years, as provided by the
Civil Code of the Philippines.
The claimants are of the view that the applicable provision is
Article 1144 of the Civil Code of the Philippines, which
provides:
The following actions must be brought within ten years from
the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
NLRC, on the other hand, believes that the applicable
provision is Article 291 of the Labor Code of the Philippines,
which in pertinent part provides:
Money claims-all money claims arising from employeremployee relations accruing during the effectivity of this Code
shall be filed within three (3) years from the time the cause of
action accrued, otherwise they shall be forever barred.
xxx xxx xxx
The case of Philippine Air Lines Employees Association v.
Philippine Air Lines, Inc., 70 SCRA 244 (1976) invoked by the
claimants in G.R. Nos. 104911-14 is inapplicable to the cases
at bench (Rollo, p. 21). The said case involved the correct
computation of overtime pay as provided in the collective
bargaining agreements and not the Eight-Hour Labor Law.
As noted by the Court: "That is precisely why petitioners did
not make any reference as to the computation for overtime
work under the Eight-Hour Labor Law (Secs. 3 and 4, CA No.
494) and instead insisted that work computation provided in
the collective bargaining agreements between the parties be
observed. Since the claim for pay differentials is primarily
anchored on the written contracts between the litigants, the
ten-year prescriptive period provided by Art. 1144(1) of the
New Civil Code should govern."

Section 7-a of the Eight-Hour Labor Law (CA No. 444 as

amended by R.A. No. 19933) provides:
Any action to enforce any cause of action under this Act shall
be commenced within three years after the cause of action
accrued otherwise such action shall be forever barred, . . . .
The court further explained:
The three-year prescriptive period fixed in the Eight-Hour
Labor Law (CA No. 444 as amended) will apply, if the claim for
differentials for overtime work is solely based on said law, and
not on a collective bargaining agreement or any other contract.
In the instant case, the claim for overtime compensation is not
so much because of Commonwealth Act No. 444, as amended
but because the claim is demandable right of the employees,
by reason of the above-mentioned collective bargaining
agreement.
Section 7-a of the Eight-Hour Labor Law provides the
prescriptive period for filing "actions to enforce any cause of
action under said law." On the other hand, Article 291 of the
Labor Code of the Philippines provides the prescriptive period
for filing "money claims arising from employer-employee
relations." The claims in the cases at bench all arose from the
employer-employee relations, which is broader in scope than
claims arising from a specific law or from the collective
bargaining agreement.
The contention of the POEA Administrator, that the three-year
prescriptive period under Article 291 of the Labor Code of the
Philippines applies only to money claims specifically
recoverable under said Code, does not find support in the plain
language of the provision. Neither is the contention of the
claimants in G.R. Nos. 104911-14 that said Article refers only
to claims "arising from the employer's violation of the
employee's right," as provided by the Labor Code supported by
the facial reading of the provision.
VII
G.R. No. 104776
A. As to the first two grounds for the petition in G.R. No.
104776, claimants aver: (1) that while their complaints were
filed on June 6, 1984 with POEA, the case was decided only
on January 30, 1989, a clear denial of their right to a speedy
disposition of the case; and (2) that NLRC and the POEA
Administrator should have declared AIBC and BRII in default
(Rollo,
pp.
31-35).
Claimants invoke a new provision incorporated in the 1987
Constitution, which provides:
Sec. 16. All persons shall have the right to a speedy disposition
of their cases before all judicial, quasi-judicial, or administrative
bodies.
It is true that the constitutional right to "a speedy disposition of
cases" is not limited to the accused in criminal proceedings but
extends to all parties in all cases, including civil and
administrative cases, and in all proceedings, including judicial
and quasi-judicial hearings. Hence, under the Constitution, any
party to a case may demand expeditious action on all officials
who are tasked with the administration of justice.
However, as held in Caballero v. Alfonso, Jr., 153 SCRA 153
(1987), "speedy disposition of cases" is a relative term. Just
like the constitutional guarantee of "speedy trial" accorded to
the accused in all criminal proceedings, "speedy disposition of
cases" is a flexible concept. It is consistent with delays and
depends upon the circumstances of each case. What the
Constitution prohibits are unreasonable, arbitrary and
oppressive delays which render rights nugatory.

Page 25 of 42
Caballero laid down the factors that may be taken into
consideration in determining whether or not the right to a
"speedy disposition of cases" has been violated, thus:
In the determination of whether or not the right to a "speedy
trial" has been violated, certain factors may be considered and
balanced against each other. These are length of delay, reason
for the delay, assertion of the right or failure to assert it, and
prejudice caused by the delay. The same factors may also be
considered in answering judicial inquiry whether or not a
person officially charged with the administration of justice has
violated the speedy disposition of cases.
Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298,
(1991), we held:
It must be here emphasized that the right to a speedy
disposition of a case, like the right to speedy trial, is deemed
violated only when the proceeding is attended by vexatious,
capricious, and oppressive delays; or when unjustified
postponements of the trial are asked for and secured, or when
without cause or justified motive a long period of time is
allowed to elapse without the party having his case tried.
Since July 25, 1984 or a month after AIBC and BRII were
served with a copy of the amended complaint, claimants had
been asking that AIBC and BRII be declared in default for
failure to file their answers within the ten-day period provided in
Section 1, Rule III of Book VI of the Rules and Regulations of
the POEA. At that time, there was a pending motion of AIBC
and BRII to strike out of the records the amended complaint
and the "Compliance" of claimants to the order of the POEA,
requiring them to submit a bill of particulars.
The cases at bench are not of the run-of-the-mill variety, such
that their final disposition in the administrative level after seven
years from their inception, cannot be said to be attended by
unreasonable, arbitrary and oppressive delays as to violate the
constitutional rights to a speedy disposition of the cases of
complainants.
The amended complaint filed on June 6, 1984 involved a total
of 1,767 claimants. Said complaint had undergone several
amendments, the first being on April 3, 1985.
The claimants were hired on various dates from 1975 to 1983.
They were deployed in different areas, one group in and the
other groups outside of, Bahrain. The monetary claims totalling
more than US$65 million according to Atty. Del Mundo,
included:
1. Unexpired portion of contract;
2. Interest earnings of Travel and Fund;
3. Retirement and Savings Plan benefit;
4. War Zone bonus or premium pay of at least 100% of basic
pay;
5. Area Differential pay;
6. Accrued Interest of all the unpaid benefits;
7. Salary differential pay;
8. Wage Differential pay;
9. Refund of SSS premiums not remitted to Social Security
System;
10. Refund of Withholding Tax not remitted to Bureau of
Internal Revenue (B.I.R.);
11. Fringe Benefits under Brown & Root's "A Summary of
Employees Benefits consisting of 43 pages (Annex "Q" of
Amended Complaint);
12. Moral and Exemplary Damages;
13. Attorney's fees of at least ten percent of amounts;

14. Other reliefs, like suspending and/or cancelling the license

to recruit of AIBC and issued by the POEA; and
15. Penalty for violation of Article 34 (Prohibited practices) not
excluding reportorial requirements thereof (NLRC Resolution,
September 2, 1991, pp. 18-19; G.R. No. 104776, Rollo, pp. 7374).
Inasmuch as the complaint did not allege with sufficient
definiteness and clarity of some facts, the claimants were
ordered to comply with the motion of AIBC for a bill of
particulars. When claimants filed their "Compliance and
Manifestation," AIBC moved to strike out the complaint from
the records for failure of claimants to submit a proper bill of
particulars. While the POEA Administrator denied the motion to
strike out the complaint, he ordered the claimants "to correct
the deficiencies" pointed out by AIBC.
Before an intelligent answer could be filed in response to the
complaint, the records of employment of the more than 1,700
claimants had to be retrieved from various countries in the
Middle East. Some of the records dated as far back as 1975.
The hearings on the merits of the claims before the POEA
Administrator were interrupted several times by the various
appeals, first to NLRC and then to the Supreme Court.
Aside from the inclusion of additional claimants, two new cases
were filed against AIBC and BRII on October 10, 1985 (POEA
Cases
Nos.
L-85-10-777 and L-85-10-779). Another complaint was filed on
May 29, 1986 (POEA Case No. L-86-05-460). NLRC, in
exasperation, noted that the exact number of claimants had
never been completely established (Resolution, Sept. 2, 1991,
G.R. No. 104776, Rollo, p. 57). All the three new cases were
consolidated with POEA Case No. L-84-06-555.
NLRC blamed the parties and their lawyers for the delay in
terminating the proceedings, thus:
These cases could have been spared the long and arduous
route towards resolution had the parties and their counsel been
more interested in pursuing the truth and the merits of the
claims rather than exhibiting a fanatical reliance on
technicalities. Parties and counsel have made these cases a
litigation of emotion. The intransigence of parties and counsel
is remarkable. As late as last month, this Commission made a
last and final attempt to bring the counsel of all the parties (this
Commission issued a special order directing respondent Brown
& Root's resident agent/s to appear) to come to a more
conciliatory
stance.
Even
this
failed
(Rollo,
p. 58).
The squabble between the lawyers of claimants added to the
delay in the disposition of the cases, to the lament of NLRC,
which complained:
It is very evident from the records that the protagonists in these
consolidated cases appear to be not only the individual
complainants, on the one hand, and AIBC and Brown & Root,
on the other hand. The two lawyers for the complainants, Atty.
Gerardo Del Mundo and Atty. Florante De Castro, have yet to
settle the right of representation, each one persistently
claiming to appear in behalf of most of the complainants. As a
result, there are two appeals by the complainants. Attempts by
this Commission to resolve counsels' conflicting claims of their
respective authority to represent the complainants prove futile.
The bickerings by these two counsels are reflected in their
pleadings. In the charges and countercharges of falsification of
documents and signatures, and in the disbarment proceedings
by one against the other. All these have, to a large extent,
abetted in confounding the issues raised in these cases,
jumble the presentation of evidence, and even derailed the
prospects of an amicable settlement. It would not be farfetched to imagine that both counsel, unwittingly, perhaps,

Page 26 of 42
painted a rainbow for the complainants, with the proverbial pot
of gold at its end containing more than US$100 million, the
aggregate of the claims in these cases. It is, likewise, not
improbable that their misplaced zeal and exuberance caused
them to throw all caution to the wind in the matter of
elementary rules of procedure and evidence (Rollo, pp. 58-59).

C. The claimants in G.R. No. 104776 also urged that the POEA
Administrator and NLRC should have declared Atty. Florante
De Castro guilty of "forum shopping, ambulance chasing
activities, falsification, duplicity and other unprofessional
activities" and his appearances as counsel for some of the
claimants as illegal (Rollo, pp. 38-40).

Adding to the confusion in the proceedings before NLRC, is the

listing of some of the complainants in both petitions filed by the
two lawyers. As noted by NLRC, "the problem created by this
situation is that if one of the two petitions is dismissed, then the
parties and the public respondents would not know which claim
of which petitioner was dismissed and which was not."

The Anti-Forum Shopping Rule (Revised Circular No. 28-91) is

intended to put a stop to the practice of some parties of filing
multiple petitions and complaints involving the same issues,
with the result that the courts or agencies have to resolve the
same issues. Said Rule, however, applies only to petitions filed
with the Supreme Court and the Court of Appeals. It is entitled
"Additional Requirements For Petitions Filed with the Supreme
Court and the Court of Appeals To Prevent Forum Shopping or
Multiple Filing of Petitioners and Complainants." The first
sentence of the circular expressly states that said circular
applies to an governs the filing of petitions in the Supreme
Court and the Court of Appeals.

B. Claimants insist that all their claims could properly be

consolidated in a "class suit" because "all the named
complainants have similar money claims and similar rights
sought irrespective of whether they worked in Bahrain, United
Arab Emirates or in Abu Dhabi, Libya or in any part of the
Middle East" (Rollo, pp. 35-38).
A class suit is proper where the subject matter of the
controversy is one of common or general interest to many and
the parties are so numerous that it is impracticable to bring
them all before the court (Revised Rules of Court, Rule 3, Sec.
12).
While all the claims are for benefits granted under the Bahrain
Law, many of the claimants worked outside Bahrain. Some of
the claimants were deployed in Indonesia and Malaysia under
different terms and conditions of employment.
NLRC and the POEA Administrator are correct in their stance
that inasmuch as the first requirement of a class suit is not
present (common or general interest based on the Amiri
Decree of the State of Bahrain), it is only logical that only those
who worked in Bahrain shall be entitled to file their claims in a
class suit.
While there are common defendants (AIBC and BRII) and the
nature of the claims is the same (for employee's benefits),
there is no common question of law or fact. While some claims
are based on the Amiri Law of Bahrain, many of the claimants
never worked in that country, but were deployed elsewhere.
Thus, each claimant is interested only in his own demand and
not in the claims of the other employees of defendants. The
named claimants have a special or particular interest in
specific benefits completely different from the benefits in which
the other named claimants and those included as members of
a "class" are claiming (Berses v. Villanueva, 25 Phil. 473
[1913]). It appears that each claimant is only interested in
collecting his own claims. A claimants has no concern in
protecting the interests of the other claimants as shown by the
fact, that hundreds of them have abandoned their co-claimants
and have entered into separate compromise settlements of
their respective claims. A principle basic to the concept of
"class suit" is that plaintiffs brought on the record must fairly
represent and protect the interests of the others (Dimayuga v.
Court of Industrial Relations, 101 Phil. 590 [1957]). For this
matter, the claimants who worked in Bahrain can not be
allowed to sue in a class suit in a judicial proceeding. The most
that can be accorded to them under the Rules of Court is to be
allowed to join as plaintiffs in one complaint (Revised Rules of
Court, Rule 3, Sec. 6).
The Court is extra-cautious in allowing class suits because
they are the exceptions to the condition sine qua non, requiring
the joinder of all indispensable parties.
In an improperly instituted class suit, there would be no
problem if the decision secured is favorable to the plaintiffs.
The problem arises when the decision is adverse to them, in
which case the others who were impleaded by their selfappointed representatives, would surely claim denial of due
process.

While Administrative Circular No. 04-94 extended the

application of the anti-forum shopping rule to the lower courts
and administrative agencies, said circular took effect only on
April 1, 1994.
POEA and NLRC could not have entertained the complaint for
unethical conduct against Atty. De Castro because NLRC and
POEA have no jurisdiction to investigate charges of unethical
conduct of lawyers.
Attorney's Lien
The "Notice and Claim to Enforce Attorney's Lien" dated
December 14, 1992 was filed by Atty. Gerardo A. Del Mundo to
protect his claim for attorney's fees for legal services rendered
in favor of the claimants (G.R. No. 104776,Rollo, pp. 841-844).
A statement of a claim for a charging lien shall be filed with the
court or administrative agency which renders and executes the
money judgment secured by the lawyer for his clients. The
lawyer shall cause written notice thereof to be delivered to his
clients and to the adverse party (Revised Rules of Court, Rule
138, Sec. 37). The statement of the claim for the charging lien
of Atty. Del Mundo should have been filed with the
administrative agency that rendered and executed the
judgment.
Contempt of Court
The complaint of Atty. Gerardo A. Del Mundo to cite Atty.
Florante De Castro and Atty. Katz Tierra for violation of the
Code of Professional Responsibility should be filed in a
separate and appropriate proceeding.
G.R. No. 104911-14
Claimants charge NLRC with grave abuse of discretion in not
accepting their formula of "Three Hours Average Daily
Overtime" in computing the overtime payments. They claim
that it was BRII itself which proposed the formula during the
negotiations for the settlement of their claims in Bahrain and
therefore it is in estoppel to disclaim said offer (Rollo, pp. 2122).
Claimants presented a Memorandum of the Ministry of Labor
of Bahrain dated April 16, 1983, which in pertinent part states:
After the perusal of the memorandum of the Vice President
and the Area Manager, Middle East, of Brown & Root Co. and
the Summary of the compensation offered by the Company to
the employees in respect of the difference of pay of the wages
of the overtime and the difference of vacation leave and the
perusal of the documents attached thereto i.e., minutes of the
meetings between the Representative of the employees and
the management of the Company, the complaint filed by the
employees on 14/2/83 where they have claimed as
hereinabove stated, sample of the Service Contract executed

Page 27 of 42
between one of the employees and the company through its
agent
in (sic) Philippines, Asia International
Builders
Corporation where it has been provided for 48 hours of work
per week and an annual leave of 12 days and an overtime
wage of 1 & 1/4 of the normal hourly wage.
xxx xxx xxx
The Company in its computation reached the following
averages:
A. 1. The average duration of the actual service of the
employee is 35 months for the Philippino (sic) employees . . . .
2. The average wage per hour for the Philippino (sic) employee
is US$2.69 . . . .
3. The average hours for the overtime is 3 hours plus in all
public holidays and weekends.
4. Payment of US$8.72 per months (sic) of service as
compensation for the difference of the wages of the overtime
done for each Philippino (sic) employee . . . (Rollo, p.22).
BRII and AIBC countered: (1) that the Memorandum was not
prepared by them but by a subordinate official in the Bahrain
Department of Labor; (2) that there was no showing that the
Bahrain Minister of Labor had approved said memorandum;
and (3) that the offer was made in the course of the negotiation
for an amicable settlement of the claims and therefore it was
not admissible in evidence to prove that anything is due to the
claimants.
While said document was presented to the POEA without
observing the rule on presenting official documents of a foreign
government as provided in Section 24, Rule 132 of the 1989
Revised Rules on Evidence, it can be admitted in evidence in
proceedings before an administrative body. The opposing
parties have a copy of the said memorandum, and they could
easily verify its authenticity and accuracy.
The admissibility of the offer of compromise made by BRII as
contained in the memorandum is another matter. Under
Section 27, Rule 130 of the 1989 Revised Rules on Evidence,
an offer to settle a claim is not an admission that anything is
due.
Said Rule provides:
Offer of compromise not admissible. In civil cases, an offer
of compromise is not an admission of any liability, and is not
admissible in evidence against the offeror.
This Rule is not only a rule of procedure to avoid the cluttering
of the record with unwanted evidence but a statement of public
policy. There is great public interest in having the protagonists
settle their differences amicable before these ripen into
litigation. Every effort must be taken to encourage them to
arrive at a settlement. The submission of offers and counteroffers in the negotiation table is a step in the right direction. But
to bind a party to his offers, as what claimants would make this
Court do, would defeat the salutary purpose of the Rule.
G.R. Nos. 105029-32
A. NLRC applied the Amiri Decree No. 23 of 1976, which
provides for greater benefits than those stipulated in the
overseas-employment contracts of the claimants. It was of the
belief that "where the laws of the host country are more
favorable and beneficial to the workers, then the laws of the
host country shall form part of the overseas employment
contract." It quoted with approval the observation of the POEA
Administrator that ". . . in labor proceedings, all doubts in the
implementation of the provisions of the Labor Code and its
implementing regulations shall be resolved in favor of labor"
(Rollo, pp. 90-94).

AIBC and BRII claim that NLRC acted capriciously and

whimsically when it refused to enforce the overseasemployment contracts, which became the law of the parties.
They contend that the principle that a law is deemed to be a
part of a contract applies only to provisions of Philippine law in
relation to contracts executed in the Philippines.
The overseas-employment contracts, which were prepared by
AIBC and BRII themselves, provided that the laws of the host
country became applicable to said contracts if they offer terms
and conditions more favorable that those stipulated therein. It
was stipulated in said contracts that:
The Employee agrees that while in the employ of the
Employer, he will not engage in any other business or
occupation, nor seek employment with anyone other than the
Employer; that he shall devote his entire time and attention and
his best energies, and abilities to the performance of such
duties as may be assigned to him by the Employer; that he
shall at all times be subject to the direction and control of the
Employer; and that the benefits provided to Employee
hereunder are substituted for and in lieu of all other benefits
provided by any applicable law, provided of course, that total
remuneration and benefits do not fall below that of the host
country regulation or custom, it being understood that should
applicable laws establish that fringe benefits, or other such
benefits additional to the compensation herein agreed cannot
be waived, Employee agrees that such compensation will be
adjusted downward so that the total compensation hereunder,
plus the non-waivable benefits shall be equivalent to the
compensation herein agreed (Rollo, pp. 352-353).
The overseas-employment contracts could have been drafted
more felicitously. While a part thereof provides that the
compensation to the employee may be "adjusted downward so
that the total computation (thereunder) plus the non-waivable
benefits shall be equivalent to the compensation" therein
agreed, another part of the same provision categorically states
"that total remuneration and benefits do not fall below that of
the host country regulation and custom."
Any ambiguity in the overseas-employment contracts should
be interpreted against AIBC and BRII, the parties that drafted it
(Eastern Shipping Lines, Inc. v. Margarine-Verkaufs-Union, 93
SCRA 257 [1979]).
Article 1377 of the Civil Code of the Philippines provides:
The interpretation of obscure words or stipulations in a contract
shall not favor the party who caused the obscurity.
Said rule of interpretation is applicable to contracts of adhesion
where there is already a prepared form containing the
stipulations of the employment contract and the employees
merely "take it or leave it." The presumption is that there was
an imposition by one party against the other and that the
employees signed the contracts out of necessity that reduced
their bargaining power (Fieldmen's Insurance Co., Inc. v.
Songco, 25 SCRA 70 [1968]).
Applying the said legal precepts, we read the overseasemployment contracts in question as adopting the provisions of
the Amiri Decree No. 23 of 1976 as part and parcel thereof.
The parties to a contract may select the law by which it is to be
governed (Cheshire, Private International Law, 187 [7th ed.]).
In such a case, the foreign law is adopted as a "system" to
regulate the relations of the parties, including questions of their
capacity to enter into the contract, the formalities to be
observed by them, matters of performance, and so forth (16
Am
Jur
2d,
150-161).
Instead of adopting the entire mass of the foreign law, the
parties may just agree that specific provisions of a foreign
statute shall be deemed incorporated into their contract "as a

Page 28 of 42
set of terms." By such reference to the provisions of the foreign
law, the contract does not become a foreign contract to be
governed by the foreign law. The said law does not operate as
a statute but as a set of contractual terms deemed written in
the contract (Anton, Private International Law, 197 [1967];
Dicey and Morris, The Conflict of Laws, 702-703, [8th ed.]).
A basic policy of contract is to protect the expectation of the
parties (Reese, Choice of Law in Torts and Contracts, 16
Columbia Journal of Transnational Law 1, 21 [1977]). Such
party expectation is protected by giving effect to the parties'
own choice of the applicable law (Fricke v. Isbrandtsen Co.,
Inc., 151 F. Supp. 465, 467 [1957]). The choice of law must,
however, bear some relationship to the parties or their
transaction (Scoles and Hayes, Conflict of Law 644-647
[1982]). There is no question that the contracts sought to be
enforced by claimants have a direct connection with the
Bahrain law because the services were rendered in that
country.
In Norse Management Co. (PTE) v. National Seamen Board,
117 SCRA 486 (1982), the "Employment Agreement," between
Norse Management Co. and the late husband of the private
respondent, expressly provided that in the event of illness or
injury to the employee arising out of and in the course of his
employment and not due to his own misconduct,
"compensation shall be paid to employee in accordance with
and subject to the limitation of the Workmen's Compensation
Act of the Republic of the Philippines or the Worker's Insurance
Act of registry of the vessel, whichever is greater." Since the
laws of Singapore, the place of registry of the vessel in which
the late husband of private respondent served at the time of his
death, granted a better compensation package, we applied
said foreign law in preference to the terms of the contract.
The case of Bagong Filipinas Overseas Corporation v. National
Labor Relations Commission, 135 SCRA 278 (1985), relied
upon by AIBC and BRII is inapposite to the facts of the cases
at bench. The issue in that case was whether the amount of
the death compensation of a Filipino seaman should be
determined under the shipboard employment contract
executed in the Philippines or the Hongkong law. Holding that
the shipboard employment contract was controlling, the court
differentiated said case from Norse Management Co. in that in
the latter case there was an express stipulation in the
employment contract that the foreign law would be applicable if
it afforded greater compensation.
B. AIBC and BRII claim that they were denied by NLRC of their
right to due process when said administrative agency granted
Friday-pay differential, holiday-pay differential, annual-leave
differential and leave indemnity pay to the claimants listed in
Annex B of the Resolution. At first, NLRC reversed the
resolution of the POEA Administrator granting these benefits
on a finding that the POEA Administrator failed to consider the
evidence presented by AIBC and BRII, that some findings of
fact of the POEA Administrator were not supported by the
evidence, and that some of the evidence were not disclosed to
AIBC and BRII (Rollo, pp. 35-36; 106-107). But instead of
remanding the case to the POEA Administrator for a new
hearing, which means further delay in the termination of the
case, NLRC decided to pass upon the validity of the claims
itself. It is this procedure that AIBC and BRII complain of as
being irregular and a "reversible error."

the cases. While AIBC and BRII had no opportunity to refute

said evidence of the claimants before the POEA Administrator,
they had all the opportunity to rebut said evidence and to
present
their
counter-evidence before NLRC. As a matter of fact, AIBC and
BRII themselves were able to present before NLRC additional
evidence which they failed to present before the POEA
Administrator.
Under Article 221 of the Labor Code of the Philippines, NLRC
is enjoined to "use every and all reasonable means to
ascertain the facts in each case speedily and objectively and
without regard to technicalities of law or procedure, all in the
interest of due process."
In deciding to resolve the validity of certain claims on the basis
of the evidence of both parties submitted before the POEA
Administrator and NLRC, the latter considered that it was not
expedient to remand the cases to the POEA Administrator for
that would only prolong the already protracted legal
controversies.
Even the Supreme Court has decided appealed cases on the
merits instead of remanding them to the trial court for the
reception of evidence, where the same can be readily
determined from the uncontroverted facts on record
(Development Bank of the Philippines v. Intermediate Appellate
Court, 190 SCRA 653 [1990]; Pagdonsalan v. National Labor
Relations Commission, 127 SCRA 463 [1984]).
C. AIBC and BRII charge NLRC with grave abuse of discretion
when it ordered the POEA Administrator to hold new hearings
for 683 claimants listed in Annex D of the Resolution dated
September 2, 1991 whose claims had been denied by the
POEA Administrator "for lack of proof" and for 69 claimants
listed in Annex E of the same Resolution, whose claims had
been found by NLRC itself as not "supported by evidence"
(Rollo, pp. 41-45).
NLRC based its ruling on Article 218(c) of the Labor Code of
the Philippines, which empowers it "[to] conduct investigation
for the determination of a question, matter or controversy,
within its jurisdiction, . . . ."
It is the posture of AIBC and BRII that NLRC has no authority
under Article 218(c) to remand a case involving claims which
had already been dismissed because such provision
contemplates only situations where there is still a question or
controversy to be resolved (Rollo, pp. 41-42).
A principle well embedded in Administrative Law is that the
technical rules of procedure and evidence do not apply to the
proceedings conducted by administrative agencies (First Asian
Transport & Shipping Agency, Inc. v. Ople, 142 SCRA 542
[1986]; Asiaworld Publishing House, Inc. v. Ople, 152 SCRA
219 [1987]). This principle is enshrined in Article 221 of the
Labor Code of the Philippines and is now the bedrock of
proceedings before NLRC.
Notwithstanding the non-applicability of technical rules of
procedure and evidence in administrative proceedings, there
are cardinal rules which must be observed by the hearing
officers in order to comply with the due process requirements
of the Constitution. These cardinal rules are collated in Ang
Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940).
VIII

They pointed out that NLRC took into consideration evidence

submitted on appeal, the same evidence which NLRC found to
have been "unilaterally submitted by the claimants and not
disclosed to the adverse parties" (Rollo, pp. 37-39).

The three petitions were filed under Rule 65 of the Revised

Rules of Court on the grounds that NLRC had committed grave
abuse of discretion amounting to lack of jurisdiction in issuing
the questioned orders. We find no such abuse of discretion.

NLRC noted that so many pieces of evidentiary matters were

submitted to the POEA administrator by the claimants after the
cases were deemed submitted for resolution and which were
taken cognizance of by the POEA Administrator in resolving

WHEREFORE, all the three petitions are DISMISSED.

SO ORDERED.

Page 29 of 42
G.R. No. 55380 September 26, 1994

The trial court committed a reversible error.

IN RE: PETITION FOR CORRECTION OF ENTRY IN THE

REGISTER OF DEATHS OF THE CIVIL REGISTRY OF
DAVAO CITY, FROM THE NAME "FLAVIANO CASTRO
ZAPANTA" TO "FLORENCIO B. ZAPANTA," GLICERIA S.
ZAPANTA, petitioners,
vs.
THE LOCAL CIVIL REGISTRAR OF THE CITY OF DAVAO
AND THE REPUBLIC OF THE PHILIPPINES,respondents.

Article 407 of the Civil Code provides that "(a)cts, events and
judicial decrees concerning the civil status of persons shall be
recorded in the Civil Register." The civil status referred to
pertains to one's birth, marriage, death, legal separation,
annulment of marriage, judgment declaring the nullity of
marriage, legitimation, adoption, acknowledgement of natural
children, naturalization, loss or recovery of citizenship, civil
interdiction, judicial determination of filiation, voluntary
emancipation of a minor and change of name. 1 Any change or
correction in a civil registry record is not allowed without a
judicial order. 2

Dante C. Sandiego for petitioner.

VITUG, J.:
The case at bench has been certified to us by the Court of
Appeals after its assessment that it merely raises a pure
question of law.
The case stemmed from the filing of a "Petition for Correction
of Entry in the Register of Deaths of the Civil Registry of Davao
City from the name "Flaviano Castro Zapanta" to "Florencio B.
Zapanta," by Gliceria S. Zapanta before the then Court of First
Instance (now Regional Trial Court) of Davao (docketed Sp.
No. 1913).
The narration of the case by the Court of Appeals is hereunder
quoted:
The petition alleges that petitioner Gliceria S. Zapanta is the
widow of the late "Florencio B. Zapanta;" that said deceased
was born in Sta. Rita, Pampanga, on 24 October 1899, as
evidenced by his certificate of baptism (p. 5, Record on
Appeal); that on 5 August 1965, the late Florencio B. Zapanta
was admitted and confined at the San Pedro Hospital, Davao
City, and met his untimely demise on 11 August 1965 (p. 6,
Record on Appeal); that after the traditional church ceremonies
at the Sta. Ana Church, Davao City, the remains of the
deceased was entombed at the municipal cemetery of Davao
City on 12 August 1965; that when petitioner requested the
Local Civil Registrar of Davao City for a certified true copy of
the death certificate of her late husband, she discovered, to her
dismay and surprise, that the name indicated in said death
certificate was "Flaviano Castro Zapanta," albeit the date of
death and all other circumstances and information reflected
therein clearly and conclusively revealed that the person
referred to therein was no other than her late husband,
Florencio B. Zapanta (p. 7, Record on Appeal). Hence,
petitioner prays that, after due notice and hearing, an order be
issued directing the Local Civil Registrar of Davao City to
correct the death certificate of her deceased husband by
changing his name from "Flaviano Castro Zapanta" to
"Florencio B. Zapanta."
After due publication of the notice of hearing, the Assistant City
Fiscal of Davao City filed a motion to dismiss the petition,
advancing inter-alia that petitioner seeks to correct not only a
clerical error, but indeed a substantial one. In support of the
opposition, heavy reliance has been made in the cases
ofSchultz vs. Republic, L-10055, 13 Sept. 1958; Black
vs. Republic, L-10869, 10 Nov. 1958; Ty Kong Tin vs. Republic,
50 O.G. 1078; Ansaldo vs. Republic, 55 O.G. 6541; Balite
vs. Republic, L-17332, 29 Nov. 1961; Tan Su vs. Republic, L12140, 29 April 1959, where all substantial corrections in the
civil registry were denied because only innocuous or clerical
error could be corrected (p. 10, Record on Appeal). Said
motion to dismiss was opposed by petitioner.
In dismissing the petition, in its 31st January 1975 Order, the
court a quo rationalized that the correction of the name
"Flaviano Castro Zapanta" to "Florencio B. Zapanta," was not
merely clerical but substantial in nature and that it thereby did
not have the power to grant the relief prayed for.

The
general
perception,
following Ty
Kong
Tin
vs. Republic 3 and
cases
contemporary
and
closely
subsequent to it, 4was that the judicial proceeding under Art.
412 of the Civil Code, implemented by Rule 108 5 of the Rules
of Court, could only justify the correction of innocuous or
clerical errors apparent on the face of the record and capable
of
being
corrected
by
mere
reference
to
it, 6 such as misspellings and obvious mistakes. Starting,
however, with the case of Republic vs. Hon. Macli-ing, 7 the
Court, through Justice Melencio-Herrera, explained:
It is true that the change from Esteban Sy to Sy Piao would
necessarily affect the identity of the father. In that sense, it can
be said to be substantial. However, we find indubitable
evidence to support the correction prayed for. In the Alien
Certificate of Registration of the father, his name appears as
"Sy Piao." The same is true in his Immigrant Certificate of
Residence. . . . The school records of Oscar Sy both in high
school
and
at St. Louis University in Baguio, recorded the name of his
father as "Sy Piao" . . . .
In the case of Ty Kong Tin vs. Republic, 94 Phil. 321 (1954), as
well as subsequent cases predicated thereon, we forbade only
the entering of material corrections in the record of birth by
virtue of a judgment in a summary action. The proceedings
below, although filed under Rule 108 of the Rules of Court,
were not summary.
Thereafter, in Republic vs. Valencia, 8 the Court, through
Justice Gutierrez, Jr., discussed, rather at length, the phrase
"appropriate proceeding" that could warrant the correction of
even non-clerical errors. There, Leonor Valencia, for and in
behalf of her minor children, Bernardo Go and Jessica Go, filed
with the then Court of First Instance of Cebu a petition for the
cancellation and correction of the entries of birth of Bernardo
Go and Jessica Go in the Civil Registry of Cebu City. The
Solicitor General opposed the petition, alleging that the petition
for correction of entry in the Civil Registry pursuant to Article
412 of the Civil Code, in relation to Rule 108 of the Revised
Rules of Court, contemplated a summary proceeding solely to
allow innocuous changes in registry entries. The Court ruled:
It is undoubtedly true that if the subject matter of a petition is
not for the correction of clerical errors of a harmless and
innocuous nature, but one involving nationality or citizenship,
which is indisputably substantial as well as controverted,
affirmative relief cannot be granted in a proceeding summary in
nature. However, it is also true that a right in law may be
enforced and a wrong may be remedied as long as the
appropriate remedy is used. This Court adheres to the principle
that even substantial errors in a civil registry may be corrected
and the true facts established provided the parties aggrieved
by the error avail themselves of the appropriate adversary
proceeding. As a matter of fact, the opposition of the Solicitor
General dated February 20, 1970 while questioning the use of
Article 412 of the Civil Code in relation to Rule 108 of the
Revised Rules of Court admits "that the entries sought to be
corrected should be threshed out in an appropriate
proceeding."

Page 30 of 42
What is meant by "appropriate adversary proceeding?" Black's
Law Dictionary defines "adversary proceeding" as follows:

vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.

One having opposing parties; contested, as distinguished from

an ex parte application, one of which the party seeking relief
has given legal warning to the other party, and afforded the
latter an opportunity to contest it. . . .

Vicente R. Macasaet and Jose D. Villena for oppositors

appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E.
A.
Bellis,
et
al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

xxx xxx xxx

Provided the trial court has conducted proceedings where all
relevant facts have been fully and properly developed, where
opposing counsel have been given opportunity to demolish the
opposite party's case, and where the evidence has been
thoroughly weighed and considered, the suit or proceeding is
"appropriate."
The pertinent sections of Rule 108 provide: . . .
Thus, the persons who must be made parties to a proceeding
concerning the cancellation or correction of an entry in the civil
register
are (1) the civil registrar, and (2) all persons who have or
claim any interest which would be affected thereby. Upon the
filing of the petition, it becomes the duty of the court to (1)
issue an order fixing the time and place for the hearing of the
petition, and (2) cause the order for hearing to be published
once a week for three (3) consecutive weeks in a newspaper of
general circulation in the province. The following are likewise
entitled to oppose the petition: (1) the civil registrar, and (2)
any person having or claiming any interest under the entry
whose cancellation or correction is sought.
If all these procedural requirements have been followed, a
petition for correction and/or cancellation of entries in the
record of birth even if filed and conducted under Rule 108 of
the Revised Rules of Court can no longer be described as
"summary." There can be no doubt that when an opposition to
the petition is filed either by the Civil Registrar or any person
having or claiming any interest in the entries sought to be
cancelled and/or corrected and the opposition is actively
prosecuted, the proceedings thereon become adversary
proceedings.
xxx xxx xxx
We are of the opinion that the petition filed by the respondent
in the lower court by way of a special proceeding for
cancellation and/or correction of entries in the civil register with
the requisite notice and publication and the recorded
proceedings that actually took place thereafter could very well
be regarded as that proper suit or appropriate action.
The
doctrine
was
reiterated
v. Zosa 9 and Republic v. Flojo. 10

in Chiao

Ben

Lim

Accordingly, the dismissal by the trial court of Gliceria's petition

must now be reversed. The records show that the publication
requirement has already been complied with. The next step
would thus be for the court a quo to consider the petition
before it to be, in substance, an adversary proceeding and to
allow petitioner and all adverse and interested parties their day
in court.
WHEREFORE, the questioned Order of the then Court of First
Instance (now Regional Trial Court) of Davao is hereby SET
ASIDE and Special Proceedings No. 1913 is ordered
reinstated. No costs.
SO ORDERED.
G.R. No. L-23678

June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS
and
MIRIAM
PALMA
BELLIS, oppositors-appellants,

BENGZON, J.P., J.:

This is a direct appeal to Us, upon a question purely of law,
from an order of the Court of First Instance of Manila dated
April 30, 1964, approving the project of partition filed by the
executor in Civil Case No. 37089 therein.1wph1.t
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of
Texas and of the United States." By his first wife, Mary E.
Mallen, whom he divorced, he had five legitimate children:
Edward A. Bellis, George Bellis (who pre-deceased him in
infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman; by his second wife, Violet Kennedy, who survived
him, he had three legitimate children: Edwin G. Bellis, Walter
S. Bellis and Dorothy Bellis; and finally, he had three
illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the
Philippines, in which he directed that after all taxes,
obligations, and expenses of administration are paid for, his
distributable estate should be divided, in trust, in the following
order and manner: (a) $240,000.00 to his first wife, Mary E.
Mallen; (b) P120,000.00 to his three illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or
P40,000.00 each and (c) after the foregoing two items have
been satisfied, the remainder shall go to his seven surviving
children by his first and second wives, namely: Edward A.
Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E.
Bellis, in equal shares.1wph1.t
Subsequently, or on July 8, 1958, Amos G. Bellis died a
resident of San Antonio, Texas, U.S.A. His will was admitted to
probate in the Court of First Instance of Manila on September
15, 1958.
The People's Bank and Trust Company, as executor of the will,
paid all the bequests therein including the amount of
$240,000.00 in the form of shares of stock to Mary E. Mallen
and to the three (3) illegitimate children, Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis, various amounts
totalling P40,000.00 each in satisfaction of their respective
legacies, or a total of P120,000.00, which it released from time
to time according as the lower court approved and allowed the
various motions or petitions filed by the latter three requesting
partial advances on account of their respective legacies.
On January 8, 1964, preparatory to closing its administration,
the executor submitted and filed its "Executor's Final Account,
Report of Administration and Project of Partition" wherein it
reported, inter alia, the satisfaction of the legacy of Mary E.
Mallen by the delivery to her of shares of stock amounting to
$240,000.00, and the legacies of Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis in the amount of
P40,000.00 each or a total of P120,000.00. In the project of
partition, the executor pursuant to the "Twelfth" clause of the
testator's Last Will and Testament divided the residuary
estate into seven equal portions for the benefit of the testator's
seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma
Bellis filed their respective oppositions to the project of partition

Page 31 of 42
on the ground that they were deprived of their legitimes as
illegitimate children and, therefore, compulsory heirs of the
deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him,
proof of service of which is evidenced by the registry receipt
submitted on April 27, 1964 by the executor.1
After the parties filed their respective memoranda and other
pertinent pleadings, the lower court, on April 30, 1964, issued
an order overruling the oppositions and approving the
executor's final account, report and administration and project
of partition. Relying upon Art. 16 of the Civil Code, it applied
the national law of the decedent, which in this case is Texas
law, which did not provide for legitimes.
Their respective motions for reconsideration having been
denied by the lower court on June 11, 1964, oppositorsappellants appealed to this Court to raise the issue of which
law must apply Texas law or Philippine law.

Congressdeleted the phrase, "notwithstanding the provisions of

this and the next preceding article" when they incorporated Art.
11 of the old Civil Code as Art. 17 of the new Civil Code, while
reproducing without substantial change the second paragraph
of Art. 10 of the old Civil Code as Art. 16 in the new. It must
have been their purpose to make the second paragraph of Art.
16 a specific provision in itself which must be applied in testate
and intestate succession. As further indication of this legislative
intent, Congress added a new provision, under Art. 1039,
which decrees that capacity to succeed is to be governed by
the national law of the decedent.
It is therefore evident that whatever public policy or good
customs may be involved in our System of legitimes, Congress
has not intended to extend the same to the succession of
foreign nationals. For it has specifically chosen to leave, inter
alia, the amount of successional rights, to the decedent's
national law. Specific provisions must prevail over general
ones.

In this regard, the parties do not submit the case on, nor even
discuss, the doctrine of renvoi, applied by this Court in Aznar v.
Christensen Garcia, L-16749, January 31, 1963. Said doctrine
is usually pertinent where the decedent is a national of one
country, and a domicile of another. In the present case, it is not
disputed that the decedent was both a national of Texas and a
domicile thereof at the time of his death. 2 So that even
assuming Texas has a conflict of law rule providing that the
domiciliary system (law of the domicile) should govern, the
same would not result in a reference back (renvoi) to Philippine
law, but would still refer to Texas law. Nonetheless, if Texas has
a conflicts rule adopting the situs theory (lex rei sitae) calling
for the application of the law of the place where the properties
are situated, renvoi would arise, since the properties here
involved are found in the Philippines. In the absence, however,
of proof as to the conflict of law rule of Texas, it should not be
presumed different from ours.3 Appellants' position is therefore
not rested on the doctrine of renvoi. As stated, they never
invoked nor even mentioned it in their arguments. Rather, they
argue that their case falls under the circumstances mentioned
in the third paragraph of Article 17 in relation to Article 16 of the
Civil Code.

Appellants would also point out that the decedent executed two
wills one to govern his Texas estate and the other his
Philippine estate arguing from this that he intended
Philippine law to govern his Philippine estate. Assuming that
such was the decedent's intention in executing a separate
Philippine will, it would not alter the law, for as this Court ruled
in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a
foreigner's will to the effect that his properties shall be
distributed in accordance with Philippine law and not with his
national law, is illegal and void, for his national law cannot be
ignored in regard to those matters that Article 10 now Article
16 of the Civil Code states said national law should govern.

Article 16, par. 2, and Art. 1039 of the Civil Code, render
applicable the national law of the decedent, in intestate or
testamentary successions, with regard to four items: (a) the
order of succession; (b) the amount of successional rights; (e)
the intrinsic validity of the provisions of the will; and (d) the
capacity to succeed. They provide that

G.R. No. L-2935

ART. 16. Real property as well as personal property is subject

to the law of the country where it is situated.
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may he
the nature of the property and regardless of the country
wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the
nation of the decedent.
Appellants would however counter that Art. 17, paragraph
three, of the Civil Code, stating that
Prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code
afore-quoted.
This
is
not
correct.
Precisely,

The parties admit that the decedent, Amos G. Bellis, was a

citizen of the State of Texas, U.S.A., and that under the laws of
Texas, there are no forced heirs or legitimes. Accordingly, since
the intrinsic validity of the provision of the will and the amount
of successional rights are to be determined under Texas law,
the Philippine law on legitimes cannot be applied to the testacy
of Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in
toto, with costs against appellants. So ordered.
March 23, 1909

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiffappellee,

vs.
GEORGE I. FRANK, defendant-appellant.
Bishop
and
O'Brien
Attorney-General Wilfley for appellee.

for

appellant.

JOHNSON, J.:
Judgment was rendered in the lower court on the 5th day of
September, 1905. The defendant appealed. On the 12th day of
October, 1905, the appellant filed his printed bill of exceptions
with the clerk of the Supreme Court. On the 5th day of
December, 1905, the appellant filed his brief with the clerk of
the Supreme Court. On the 19th day of January, 1906, the
Attorney-General filed his brief in said cause. Nothing further
was done in said cause until on or about the 30th day of
January, 1909, when the respective parties were requested by
this court to prosecute the appeal under the penalty of having
the same dismissed for failure so to do; whereupon the
appellant, by petition, had the caused placed upon the
calendar and the same was heard on the 2d day of February,
1909.
The facts from the record appear to be as follows:
First. That on or about the 17th day of April, 1903, in the city of
Chicago, in the state of Illinois, in the United States, the
defendant, through a respective of the Insular Government of

Page 32 of 42
the Philippine Islands, entered into a contract for a period of
two years with the plaintiff, by which the defendant was to
receive a salary of 1,200 dollars per year as a stenographer in
the service of the said plaintiff, and in addition thereto was to
be paid in advance the expenses incurred in traveling from the
said city of Chicago to Manila, and one-half salary during said
period of travel.
Second. Said contract contained a provision that in case of a
violation of its terms on the part of the defendant, he should
become liable to the plaintiff for the amount expended by the
Government by way of expenses incurred in traveling from
Chicago to Manila and one-half salary paid during such period.
Third. The defendant entered upon the performance of his
contract upon the 30th day of April, 1903, and was paid halfsalary from that date until June 4, 1903, the date of his arrival
in the Philippine Islands.
Fourth. That on the 11th day of February, 1904, the defendant
left the service of the plaintiff and refused to make further
compliance with the terms of the contract.
Fifth. On the 3d day of December, 1904, the plaintiff
commenced an action in the Court of First Instance of the city
of Manila to recover from the defendant the sum of 269.23
dollars, which amount the plaintiff claimed had been paid to the
defendant as expenses incurred in traveling from Chicago to
Manila, and as half salary for the period consumed in travel.
Sixth. It was expressly agreed between the parties to said
contract that Laws No. 80 and No. 224 should constitute a part
of said contract.
To the complaint of the plaintiff the defendant filed a general
denial and a special defense, alleging in his special defense
that the Government of the Philippine Islands had amended
Laws No. 80 and No. 224 and had thereby materially altered
the said contract, and also that he was a minor at the time the
contract was entered into and was therefore not responsible
under the law.
To the special defense of the defendant the plaintiff filed a
demurrer, which demurrer the court sustained.
Upon the issue thus presented, and after hearing the evidence
adduced during the trial of the cause, the lower court rendered
a judgment against the defendant and in favor of the plaintiff
for the sum of 265.90 dollars. The lower court found that at the
time the defendant quit the service of the plaintiff there was
due him from the said plaintiff the sum of 3.33 dollars, leaving
a balance due the plaintiff in the sum of 265.90 dollars. From
this judgment the defendant appealed and made the following
assignments of error:
1. The court erred in sustaining plaintiff's demurrer to
defendant's special defenses.
2. The court erred in rendering judgment against the defendant
on the facts.
With reference to the above assignments of error, it may be
said that the mere fact that the legislative department of the
Government of the Philippine Islands had amended said Acts
No. 80 and No. 224 by the Acts No. 643 and No. 1040 did not
have the effect of changing the terms of the contract made
between the plaintiff and the defendant. The legislative
department of the Government is expressly prohibited by
section 5 of the Act of Congress of 1902 from altering or
changing the terms of the contract. The right which the
defendant had acquired by virtue of Acts No. 80 and No. 224
had not been changed in any respect by the fact that said laws
had been amended. These acts, constituting the terms of the
contract, still constituted a part of said contract and were
enforceable in favor of the defendant.

The defendant alleged in his special defense that he was a

minor and therefore the contract could not be enforced against
him. The record discloses that, at the time the contract was
entered into in the State of Illinois, he was an adult under the
laws of that State and had full authority to contract. The plaintiff
[the defendant] claims that, by reason of the fact that, under
the laws of the Philippine Islands at the time the contract was
made, male persons in said Islands did not reach their majority
until they had attained the age of 23 years, he was not liable
under said contract, contending that the laws of the Philippine
Islands governed. It is not disputed upon the contrary the
fact is admitted that at the time and place of the making of
the contract in question the defendant had full capacity to
make the same. No rule is better settled in law than that
matters bearing upon the execution, interpretation and validity
of a contract are determined by the law of the place where the
contract is made. (Scudder vs. Union National Bank, 91 U. S.,
406.) Matters connected with its performance are regulated by
the law prevailing at the place of performance. Matters
respecting a remedy, such as the bringing of suit, admissibility
of evidence, and statutes of limitations, depend upon the law of
the place where the suit is brought. (Idem.)
The defendant's claim that he was an adult when he left
Chicago but was a minor when he arrived at Manila; that he
was an adult at the time he made the contract but was a minor
at the time the plaintiff attempted to enforce the contract, more
than a year later, is not tenable.
Our conclusions with reference to the first above assignment of
error are, therefore:
First. That the amendments to Acts No. 80 and No. 224 in no
way affected the terms of the contract in question; and
Second. The plaintiff [defendant] being fully qualified to enter
into the contract at the place and time the contract was made,
he can not plead infancy as a defense at the place where the
contract is being enforced.
We believe that the above conclusions also dispose of the
second assignment of error.
For the reasons above stated, the judgment of the lower court
is affirmed, with costs.
G.R. No. L-16749

January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E.

CHRISTENSEN,
DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN,
Heir of the deceased, Executor and Heir-appellees,
vs.
HELEN CHRISTENSEN GARCIA, oppositor-appellant.
M.
R.
Sotelo
for
executor
and
heir-appellees.
Leopoldo M. Abellera and Jovito Salonga for oppositorappellant.
LABRADOR, J.:
This is an appeal from a decision of the Court of First Instance
of Davao, Hon. Vicente N. Cusi, Jr., presiding, in Special
Proceeding No. 622 of said court, dated September 14, 1949,
approving among things the final accounts of the executor,
directing the executor to reimburse Maria Lucy Christensen the
amount of P3,600 paid by her to Helen Christensen Garcia as
her legacy, and declaring Maria Lucy Christensen entitled to
the residue of the property to be enjoyed during her lifetime,
and in case of death without issue, one-half of said residue to
be payable to Mrs. Carrie Louise C. Borton, etc., in accordance
with the provisions of the will of the testator Edward E.
Christensen. The will was executed in Manila on March 5,
1951 and contains the following provisions:
3. I declare ... that I have but ONE (1) child, named MARIA
LUCY CHRISTENSEN (now Mrs. Bernard Daney), who was

Page 33 of 42
born in the Philippines about twenty-eight years ago, and who
is now residing at No. 665 Rodger Young Village, Los Angeles,
California, U.S.A.
4. I further declare that I now have no living ascendants, and
no descendants except my above named daughter, MARIA
LUCY CHRISTENSEN DANEY.
xxx

xxx

xxx

7. I give, devise and bequeath unto MARIA HELEN

CHRISTENSEN, now married to Eduardo Garcia, about
eighteen years of age and who, notwithstanding the fact that
she was baptized Christensen, is not in any way related to me,
nor has she been at any time adopted by me, and who, from all
information I have now resides in Egpit, Digos, Davao,
Philippines, the sum of THREE THOUSAND SIX HUNDRED
PESOS (P3,600.00), Philippine Currency the same to be
deposited in trust for the said Maria Helen Christensen with the
Davao Branch of the Philippine National Bank, and paid to her
at the rate of One Hundred Pesos (P100.00), Philippine
Currency per month until the principal thereof as well as any
interest which may have accrued thereon, is exhausted..
xxx

xxx

xxx

12. I hereby give, devise and bequeath, unto my well-beloved

daughter, the said MARIA LUCY CHRISTENSEN DANEY (Mrs.
Bernard Daney), now residing as aforesaid at No. 665 Rodger
Young Village, Los Angeles, California, U.S.A., all the income
from the rest, remainder, and residue of my property and
estate, real, personal and/or mixed, of whatsoever kind or
character, and wheresoever situated, of which I may be
possessed at my death and which may have come to me from
any source whatsoever, during her lifetime: ....
It is in accordance with the above-quoted provisions that the
executor in his final account and project of partition ratified the
payment of only P3,600 to Helen Christensen Garcia and
proposed that the residue of the estate be transferred to his
daughter, Maria Lucy Christensen.
Opposition to the approval of the project of partition was filed
by Helen Christensen Garcia, insofar as it deprives her (Helen)
of her legitime as an acknowledged natural child, she having
been declared by Us in G.R. Nos. L-11483-84 an
acknowledged natural child of the deceased Edward E.
Christensen. The legal grounds of opposition are (a) that the
distribution should be governed by the laws of the Philippines,
and (b) that said order of distribution is contrary thereto insofar
as it denies to Helen Christensen, one of two acknowledged
natural children, one-half of the estate in full ownership. In
amplification of the above grounds it was alleged that the law
that should govern the estate of the deceased Christensen
should not be the internal law of California alone, but the entire
law thereof because several foreign elements are involved,
that the forum is the Philippines and even if the case were
decided in California, Section 946 of the California Civil Code,
which requires that the domicile of the decedent should apply,
should be applicable. It was also alleged that Maria Helen
Christensen having been declared an acknowledged natural
child of the decedent, she is deemed for all purposes legitimate
from the time of her birth.
The court below ruled that as Edward E. Christensen was a
citizen of the United States and of the State of California at the
time of his death, the successional rights and intrinsic validity
of the provisions in his will are to be governed by the law of
California, in accordance with which a testator has the right to
dispose of his property in the way he desires, because the right
of absolute dominion over his property is sacred and inviolable
(In re McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952,
and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page
179, Record on Appeal). Oppositor Maria Helen Christensen,

through counsel, filed various motions for reconsideration, but

these were denied. Hence, this appeal.
The most important assignments of error are as follows:
I
THE LOWER COURT ERRED IN IGNORING THE DECISION
OF THE HONORABLE SUPREME COURT THAT HELEN IS
THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E.
CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER
OF HER JUST SHARE IN THE INHERITANCE.
II
THE LOWER COURT ERRED IN ENTIRELY IGNORING
AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF
SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES
CALLING FOR THE APPLICATION OF INTERNAL LAW.
III
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE
THAT UNDER INTERNATIONAL LAW, PARTICULARLY
UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY
OF THE TESTAMENTARY DISPOSITION OF THE
DISTRIBUTION OF THE ESTATE OF THE DECEASED
EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY
THE LAWS OF THE PHILIPPINES.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT
THE SCHEDULE OF DISTRIBUTION SUBMITTED BY THE
EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS.
V
THE LOWER COURT ERRED IN NOT DECLARING THAT
UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN
GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE
IN FULL OWNERSHIP.
There is no question that Edward E. Christensen was a citizen
of the United States and of the State of California at the time of
his death. But there is also no question that at the time of his
death he was domiciled in the Philippines, as witness the
following facts admitted by the executor himself in appellee's
brief:
In the proceedings for admission of the will to probate, the
facts of record show that the deceased Edward E. Christensen
was born on November 29, 1875 in New York City, N.Y.,
U.S.A.; his first arrival in the Philippines, as an appointed
school teacher, was on July 1, 1901, on board the U.S. Army
Transport "Sheridan" with Port of Embarkation as the City of
San Francisco, in the State of California, U.S.A. He stayed in
the Philippines until 1904.
In December, 1904, Mr. Christensen returned to the United
States and stayed there for the following nine years until 1913,
during which time he resided in, and was teaching school in
Sacramento, California.
Mr. Christensen's next arrival in the Philippines was in July of
the year 1913. However, in 1928, he again departed the
Philippines for the United States and came back here the
following year, 1929. Some nine years later, in 1938, he again
returned to his own country, and came back to the Philippines
the following year, 1939.
Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this Honorable
Court, without prejudice to the parties adducing other evidence
to prove their case not covered by this stipulation of
facts. 1wph1.t
Being an American citizen, Mr. Christensen was interned by
the Japanese Military Forces in the Philippines during World
War II. Upon liberation, in April 1945, he left for the United

Page 34 of 42
States but returned to the Philippines in December, 1945.
Appellees Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as
Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l",
"MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)
In April, 1951, Edward E. Christensen returned once more to
California shortly after the making of his last will and testament
(now in question herein) which he executed at his lawyers'
offices in Manila on March 5, 1951. He died at the St. Luke's
Hospital in the City of Manila on April 30, 1953. (pp. 2-3)
In arriving at the conclusion that the domicile of the deceased
is the Philippines, we are persuaded by the fact that he was
born in New York, migrated to California and resided there for
nine years, and since he came to the Philippines in 1913 he
returned to California very rarely and only for short visits
(perhaps to relatives), and considering that he appears never
to have owned or acquired a home or properties in that state,
which would indicate that he would ultimately abandon the
Philippines and make home in the State of California.
Sec. 16. Residence is a term used with many shades of
meaning from mere temporary presence to the most
permanent abode. Generally, however, it is used to denote
something more than mere physical presence. (Goodrich on
Conflict of Laws, p. 29)
As to his citizenship, however, We find that the citizenship that
he acquired in California when he resided in Sacramento,
California from 1904 to 1913, was never lost by his stay in the
Philippines, for the latter was a territory of the United States
(not a state) until 1946 and the deceased appears to have
considered himself as a citizen of California by the fact that
when he executed his will in 1951 he declared that he was a
citizen of that State; so that he appears never to have intended
to abandon his California citizenship by acquiring another. This
conclusion is in accordance with the following principle
expounded by Goodrich in his Conflict of Laws.
The terms "'residence" and "domicile" might well be taken to
mean the same thing, a place of permanent abode. But
domicile, as has been shown, has acquired a technical
meaning. Thus one may be domiciled in a place where he has
never been. And he may reside in a place where he has no
domicile. The man with two homes, between which he divides
his time, certainly resides in each one, while living in it. But if
he went on business which would require his presence for
several weeks or months, he might properly be said to have
sufficient connection with the place to be called a resident. It is
clear, however, that, if he treated his settlement as continuing
only for the particular business in hand, not giving up his
former "home," he could not be a domiciled New Yorker.
Acquisition of a domicile of choice requires the exercise of
intention as well as physical presence. "Residence simply
requires bodily presence of an inhabitant in a given place,
while domicile requires bodily presence in that place and also
an intention to make it one's domicile." Residence, however, is
a term used with many shades of meaning, from the merest
temporary presence to the most permanent abode, and it is not
safe to insist that any one use et the only proper one.
(Goodrich, p. 29)
The law that governs the validity of his testamentary
dispositions is defined in Article 16 of the Civil Code of the
Philippines, which is as follows:
ART. 16. Real property as well as personal property is subject
to the law of the country where it is situated.
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be

the nature of the property and regardless of the country where

said property may be found.
The application of this article in the case at bar requires the
determination of the meaning of the term "national law"is used
therein.
There is no single American law governing the validity of
testamentary provisions in the United States, each state of the
Union having its own private law applicable to its citizens only
and in force only within the state. The "national law" indicated
in Article 16 of the Civil Code above quoted can not, therefore,
possibly mean or apply to any general American law. So it can
refer to no other than the private law of the State of California.
The next question is: What is the law in California governing
the disposition of personal property? The decision of the court
below, sustains the contention of the executor-appellee that
under the California Probate Code, a testator may dispose of
his property by will in the form and manner he desires, citing
the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d
952. But appellant invokes the provisions of Article 946 of the
Civil Code of California, which is as follows:
If there is no law to the contrary, in the place where personal
property is situated, it is deemed to follow the person of its
owner, and is governed by the law of his domicile.
The existence of this provision is alleged in appellant's
opposition and is not denied. We have checked it in the
California Civil Code and it is there. Appellee, on the other
hand, relies on the case cited in the decision and testified to by
a witness. (Only the case of Kaufman is correctly cited.) It is
argued on executor's behalf that as the deceased Christensen
was a citizen of the State of California, the internal law thereof,
which is that given in the abovecited case, should govern the
determination of the validity of the testamentary provisions of
Christensen's will, such law being in force in the State of
California of which Christensen was a citizen. Appellant, on the
other hand, insists that Article 946 should be applicable, and in
accordance therewith and following the doctrine of the renvoi,
the question of the validity of the testamentary provision in
question should be referred back to the law of the decedent's
domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by various
authors, thus:
The problem has been stated in this way: "When the Conflict of
Laws rule of the forum refers a jural matter to a foreign law for
decision, is the reference to the purely internal rules of law of
the foreign system; i.e., to the totality of the foreign law minus
its Conflict of Laws rules?"
On logic, the solution is not an easy one. The Michigan court
chose to accept the renvoi, that is, applied the Conflict of Laws
rule of Illinois which referred the matter back to Michigan law.
But once having determined the the Conflict of Laws principle
is the rule looked to, it is difficult to see why the reference back
should not have been to Michigan Conflict of Laws. This would
have resulted in the "endless chain of references" which has
so often been criticized be legal writers. The opponents of the
renvoi would have looked merely to the internal law of Illinois,
thus rejecting the renvoi or the reference back. Yet there
seems no compelling logical reason why the original reference
should be the internal law rather than to the Conflict of Laws
rule. It is true that such a solution avoids going on a merry-goround, but those who have accepted the renvoi theory avoid
this inextricabilis circulas by getting off at the second reference
and at that point applying internal law. Perhaps the opponents
of the renvoi are a bit more consistent for they look always to
internal law as the rule of reference.
Strangely enough, both the advocates for and the objectors to
the renvoi plead that greater uniformity will result from adoption

Page 35 of 42
of their respective views. And still more strange is the fact that
the only way to achieve uniformity in this choice-of-law problem
is if in the dispute the two states whose laws form the legal
basis of the litigation disagree as to whether the renvoi should
be accepted. If both reject, or both accept the doctrine, the
result of the litigation will vary with the choice of the forum. In
the case stated above, had the Michigan court rejected
the renvoi, judgment would have been against the woman; if
the suit had been brought in the Illinois courts, and they too
rejected the renvoi, judgment would be for the woman. The
same result would happen, though the courts would switch with
respect to which would hold liability, if both courts accepted
therenvoi.
The Restatement accepts the renvoi theory in two instances:
where the title to land is in question, and where the validity of a
decree of divorce is challenged. In these cases the Conflict of
Laws rule of the situs of the land, or the domicile of the parties
in the divorce case, is applied by the forum, but any further
reference goes only to the internal law. Thus, a person's title to
land, recognized by the situs, will be recognized by every
court; and every divorce, valid by the domicile of the parties,
will be valid everywhere. (Goodrich, Conflict of Laws, Sec. 7,
pp. 13-14.)
X, a citizen of Massachusetts, dies intestate, domiciled in
France, leaving movable property in Massachusetts, England,
and France. The question arises as to how this property is to
be distributed among X's next of kin.
Assume (1) that this question arises in a Massachusetts court.
There the rule of the conflict of laws as to intestate succession
to movables calls for an application of the law of the
deceased's last domicile. Since by hypothesis X's last domicile
was France, the natural thing for the Massachusetts court to do
would be to turn to French statute of distributions, or whatever
corresponds thereto in French law, and decree a distribution
accordingly. An examination of French law, however, would
show that if a French court were called upon to determine how
this property should be distributed, it would refer the
distribution to the national law of the deceased, thus applying
the Massachusetts statute of distributions. So on the surface of
things the Massachusetts court has open to it alternative
course of action: (a) either to apply the French law is to
intestate succession, or (b) to resolve itself into a French court
and apply the Massachusetts statute of distributions, on the
assumption that this is what a French court would do. If it
accepts the so-called renvoidoctrine, it will follow the latter
course, thus applying its own law.
This is one type of renvoi. A jural matter is presented which the
conflict-of-laws rule of the forum refers to a foreign law, the
conflict-of-laws rule of which, in turn, refers the matter back
again to the law of the forum. This is renvoi in the narrower
sense. The German term for this judicial process is
'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523571.)
After a decision has been arrived at that a foreign law is to be
resorted to as governing a particular case, the further question
may arise: Are the rules as to the conflict of laws contained in
such foreign law also to be resorted to? This is a question
which, while it has been considered by the courts in but a few
instances, has been the subject of frequent discussion by
textwriters and essayists; and the doctrine involved has been
descriptively designated by them as the "Renvoyer" to send
back, or the "Ruchversweisung", or the "Weiterverweisung",
since an affirmative answer to the question postulated and the
operation of the adoption of the foreign law in toto would in
many cases result in returning the main controversy to be
decided according to the law of the forum. ... (16 C.J.S. 872.)
Another theory, known as the "doctrine of renvoi", has been
advanced. The theory of the doctrine of renvoi is that the court

of the forum, in determining the question before it, must take

into account the whole law of the other jurisdiction, but also its
rules as to conflict of laws, and then apply the law to the actual
question which the rules of the other jurisdiction prescribe. This
may be the law of the forum. The doctrine of the renvoi has
generally been repudiated by the American authorities. (2 Am.
Jur. 296)
The scope of the theory of renvoi has also been defined and
the reasons for its application in a country explained by Prof.
Lorenzen in an article in the Yale Law Journal, Vol. 27, 19171918, pp. 529-531. The pertinent parts of the article are quoted
herein below:
The recognition of the renvoi theory implies that the rules of the
conflict of laws are to be understood as incorporating not only
the ordinary or internal law of the foreign state or country, but
its rules of the conflict of laws as well. According to this theory
'the law of a country' means the whole of its law.
xxx

xxx

xxx

Von Bar presented his views at the meeting of the Institute of

International Law, at Neuchatel, in 1900, in the form of the
following theses:
(1) Every court shall observe the law of its country as regards
the application of foreign laws.
(2) Provided that no express provision to the contrary exists,
the court shall respect:
(a) The provisions of a foreign law which disclaims the right to
bind its nationals abroad as regards their personal statute, and
desires that said personal statute shall be determined by the
law of the domicile, or even by the law of the place where the
act in question occurred.
(b) The decision of two or more foreign systems of law,
provided it be certain that one of them is necessarily
competent, which agree in attributing the determination of a
question to the same system of law.
xxx

xxx

xxx

If, for example, the English law directs its judge to distribute the
personal estate of an Englishman who has died domiciled in
Belgium in accordance with the law of his domicile, he must
first inquire whether the law of Belgium would distribute
personal property upon death in accordance with the law of
domicile, and if he finds that the Belgian law would make the
distribution in accordance with the law of nationality that is
the English law he must accept this reference back to his
own law.
We note that Article 946 of the California Civil Code is its
conflict of laws rule, while the rule applied in In re
Kaufman, Supra, its internal law. If the law on succession and
the conflict of laws rules of California are to be enforced jointly,
each in its own intended and appropriate sphere, the principle
cited In re Kaufman should apply to citizens living in the State,
but Article 946 should apply to such of its citizens as are not
domiciled in California but in other jurisdictions. The rule laid
down of resorting to the law of the domicile in the
determination of matters with foreign element involved is in
accord with the general principle of American law that the
domiciliary law should govern in most matters or rights which
follow the person of the owner.
When a man dies leaving personal property in one or more
states, and leaves a will directing the manner of distribution of
the property, the law of the state where he was domiciled at the
time of his death will be looked to in deciding legal questions
about the will, almost as completely as the law of situs is
consulted in questions about the devise of land. It is logical
that, since the domiciliary rules control devolution of the
personal estate in case of intestate succession, the same rules

Page 36 of 42
should determine the validity of an attempted testamentary
dispostion of the property. Here, also, it is not that the
domiciliary has effect beyond the borders of the domiciliary
state. The rules of the domicile are recognized as controlling
by the Conflict of Laws rules at the situs property, and the
reason for the recognition as in the case of intestate
succession, is the general convenience of the doctrine. The
New York court has said on the point: 'The general principle
that a dispostiton of a personal property, valid at the domicile of
the owner, is valid anywhere, is one of the universal
application. It had its origin in that international comity which
was one of the first fruits of civilization, and it this age, when
business intercourse and the process of accumulating property
take but little notice of boundary lines, the practical wisdom
and justice of the rule is more apparent than ever. (Goodrich,
Conflict of Laws, Sec. 164, pp. 442-443.)
Appellees argue that what Article 16 of the Civil Code of the
Philippines pointed out as the national law is the internal law of
California. But as above explained the laws of California have
prescribed two sets of laws for its citizens, one for residents
therein and another for those domiciled in other jurisdictions.
Reason demands that We should enforce the California
internal law prescribed for its citizens residing therein, and
enforce the conflict of laws rules for the citizens domiciled
abroad. If we must enforce the law of California as in comity
we are bound to go, as so declared in Article 16 of our Civil
Code, then we must enforce the law of California in
accordance with the express mandate thereof and as above
explained, i.e., apply the internal law for residents therein, and
its conflict-of-laws rule for those domiciled abroad.
It is argued on appellees' behalf that the clause "if there is no
law to the contrary in the place where the property is situated"
in Sec. 946 of the California Civil Code refers to Article 16 of
the Civil Code of the Philippines and that the law to the
contrary in the Philippines is the provision in said Article 16 that
the national law of the deceased should govern. This
contention can not be sustained. As explained in the various
authorities cited above the national law mentioned in Article 16
of our Civil Code is the law on conflict of laws in the California
Civil Code, i.e., Article 946, which authorizes the reference or
return of the question to the law of the testator's domicile. The
conflict of laws rule in California, Article 946, Civil Code,
precisely refers back the case, when a decedent is not
domiciled in California, to the law of his domicile, the
Philippines in the case at bar. The court of the domicile can not
and should not refer the case back to California; such action
would leave the issue incapable of determination because the
case will then be like a football, tossed back and forth between
the two states, between the country of which the decedent was
a citizen and the country of his domicile. The Philippine court
must apply its own law as directed in the conflict of laws rule of
the state of the decedent, if the question has to be decided,
especially as the application of the internal law of California
provides no legitime for children while the Philippine law, Arts.
887(4) and 894, Civil Code of the Philippines, makes natural
children legally acknowledged forced heirs of the parent
recognizing them.
The Philippine cases (In re Estate of Johnson, 39 Phil. 156;
Riera vs. Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil.
867; Babcock Templeton vs. Rider Babcock, 52 Phil. 130; and
Gibbs vs. Government, 59 Phil. 293.) cited by appellees to
support the decision can not possibly apply in the case at bar,
for two important reasons, i.e., the subject in each case does
not appear to be a citizen of a state in the United States but
with domicile in the Philippines, and it does not appear in each
case that there exists in the state of which the subject is a
citizen, a law similar to or identical with Art. 946 of the
California Civil Code.

We therefore find that as the domicile of the deceased

Christensen, a citizen of California, is the Philippines, the
validity of the provisions of his will depriving his acknowledged
natural child, the appellant, should be governed by the
Philippine Law, the domicile, pursuant to Art. 946 of the Civil
Code of California, not by the internal law of California..
WHEREFORE, the decision appealed from is hereby reversed
and the case returned to the lower court with instructions that
the partition be made as the Philippine law on succession
provides. Judgment reversed, with costs against appellees.
G.R. No. 133876 December 29, 1999
BANK
OF
AMERICA,
NT
and
SA, petitioner,
vs.
AMERICAN REALTY CORPORATION and COURT OF
APPEALS, respondents.
BUENA, J.:
Does a mortgage-creditor waive its remedy to foreclose the
real estate mortgage constituted over a third party mortgagor's
property situated in the Philippines by filing an action for the
collection of the principal loan before foreign courts?
Sought to be reversed in the instant petition for review
on certiorari under Rule 45 of the Rules of Court are the
decision 1 of public respondent Court of Appeals in CA G.R. CV
No. 51094, promulgated on 30 September 1997 and its
resolution, 2 dated 22 May 1998, denying petitioner's motion for
reconsideration.
Petitioner Bank of America NT & SA (BANTSA) is an
international banking and financing institution duly licensed to
do business in the Philippines, organized and existing under
and by virtue of the laws of the State of California, United
States of America while private respondent American Realty
Corporation (ARC) is a domestic corporation.
Bank of America International Limited (BAIL), on the other
hand, is a limited liability company organized and existing
under the laws of England.
As borne by the records, BANTSA and BAIL on several
occasions granted three major multi-million United States (US)
Dollar loans to the following corporate borrowers: (1) Liberian
Transport Navigation, S.A.; (2) El Challenger S.A. and (3)
Eshley Compania Naviera S.A. (hereinafter collectively
referred to as "borrowers"), all of which are existing under and
by virtue of the laws of the Republic of Panama and are foreign
affiliates
of
private
respondent. 3
Due to the default in the payment of the loan amortizations,
BANTSA and the corporate borrowers signed and entered into
restructuring agreements. As additional security for the
restructured loans, private respondent ARC as third party
mortgagor executed two real estate mortgages, 4 dated 17
February 1983 and 20 July 1984, over its parcels of land
including improvements thereon, located at Barrio Sto. Cristo,
San Jose Del Monte, Bulacan, and which are covered by
Transfer Certificate of Title Nos. T-78759, T-78760, T-78761, T78762 and T-78763.
Eventually, the corporate borrowers defaulted in the payment
of the restructured loans prompting petitioner BANTSA to file
civil actions 5 before foreign courts for the collection of the
principal loan, to wit:
a) In England, in its High Court of Justice, Queen's Bench
Division, Commercial Court (1992-Folio No 2098) against
Liberian Transport Navigation S.A., Eshley Compania Naviera
S.A., El Challenger S.A., Espriona Shipping Company S.A.,

Page 37 of 42
Eddie Navigation Corp., S.A., Eduardo Katipunan Litonjua and
Aurelio Katipunan Litonjua on June 17, 1992.

of said order was duly received by the Register of Deeds of

Meycauayan, Bulacan.

b) In England, in its High Court of Justice, Queen's Bench

Division, Commercial Court (1992-Folio No. 2245) against El
Challenger S.A., Espriona Shipping Company S.A., Eduardo
Katipuan Litonjua & Aurelio Katipunan Litonjua on July 2, 1992;

On 07 February 1994, ICCS, the purchaser of the mortgaged

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

c) In Hongkong, in the Supreme Court of Hongkong High Court

(Action No. 4039 of 1992) against Eshley Compania Naviera
S.A., El Challenger S.A., Espriona Shipping Company S.A.
Pacific Navigators Corporation, Eddie Navigation Corporation
S.A., Litonjua Chartering (Edyship) Co., Inc., Aurelio Katipunan
Litonjua, Jr. and Eduardo Katipunan Litonjua on November 19,
1992; and
d) In Hongkong, in the Supreme Court of Hongkong High Court
(Action No. 4040 of 1992) against Eshley Compania Naviera
S.A., El Challenger S.A., Espriona Shipping Company, S.A.,
Pacific Navigators Corporation, Eddie Navigation Corporation
S.A., Litonjua Chartering (Edyship) Co., Jr. and Eduardo
Katipunan Litonjua on November 21, 1992.
In the civil suits instituted before the foreign courts, private
respondent ARC, being a third party mortgagor, was private not
impleaded as party-defendant.
On 16 December 1992, petitioner BANTSA filed before the
Office of the Provincial Sheriff of Bulacan, Philippines an
application for extrajudicial foreclosure 6 of real estate
mortgage.
On 22 January 1993, after due publication and notice, the
mortgaged real properties were sold at public auction in an
extrajudicial foreclosure sale, with Integrated Credit and
Corporation Services Co (ICCS) as the highest bidder for the
sum of Twenty four Million Pesos (P24,000.000.00). 7
On 12 February 1993, private respondent filed before the
Pasig Regional Trial Court, Branch 159, an action for
damages 8 against the petitioner, for the latter's act of
foreclosing extrajudicially the real estate mortgages despite the
pendency of civil suits before foreign courts for the collection of
the principal loan.
In its answer 9 petitioner alleged that the rule prohibiting the
mortgagee from foreclosing the mortgage after an ordinary suit
for collection has been filed, is not applicable in the present
case, claiming that:
a) The plaintiff, being a mere third party mortgagor and not a
party to the principal restructuring agreements, was never
made a party defendant in the civil cases filed in Hongkong
and England;
b) There is actually no civil suit for sum of money filed in the
Philippines since the civil actions were filed in Hongkong and
England. As such, any decisions (sic) which may be rendered
in the abovementioned courts are not (sic) enforceable in the
Philippines unless a separate action to enforce the foreign
judgments is first filed in the Philippines, pursuant to Rule 39,
Section 50 of the Revised Rules of Court.
c) Under English Law, which is the governing law under the
principal agreements, the mortgagee does not lose its security
interest by filing civil actions for sums of money.
On 14 December 1993, private respondent filed a motion for
suspension 10 of the redemption period on the ground that "it
cannot exercise said right of redemption without at the same
time waiving or contradicting its contentions in the case that
the foreclosure of the mortgage on its properties is legally
improper and therefore invalid."
In an order 11 dated 28 January 1994, the trial court granted the
private respondent's motion for suspension after which a copy

On 18 March 1994, after the consolidation of ownership in its

favor, ICCS sold the real properties to Stateland Investment
Corporation for the amount of Thirty Nine Million Pesos
(P39,000,000.00). 12 Accordingly, Transfer Certificate of Title
Nos. T-187781(m), T-187782(m), T-187783(m), T-16653P(m)
and T-16652P(m) were issued in the latter's name.
After trial, the lower court rendered a decision 13 in favor of
private respondent ARC dated 12 May 1993, the decretal
portion of which reads:
WHEREFORE, judgment is hereby rendered declaring that the
filing in foreign courts by the defendant of collection suits
against the principal debtors operated as a waiver of the
security of the mortgages. Consequently, the plaintiff's rights as
owner and possessor of the properties then covered by
Transfer Certificates of Title Nos. T-78759, T-78762, T-78763,
T-78760 and T-78761, all of the Register of Deeds of
Meycauayan, Bulacan, Philippines, were violated when the
defendant caused the extrajudicial foreclosure of the
mortgages constituted thereon.
Accordingly, the defendant is hereby ordered to pay the plaintiff
the following sums, all with legal interest thereon from the date
of the filing of the complaint up to the date of actual payment:
1) Actual or compensatory damages in the amount of Ninety
Nine Million Pesos (P99,000,000.00);
2) Exemplary damages in the amount of Five Million Pesos
(P5,000,000.00); and
3) Costs of suit.
SO ORDERED.
On appeal, the Court of Appeals affirmed the assailed decision
of the lower court prompting petitioner to file a motion for
reconsideration which the appellate court denied.
Hence, the instant petition for review 14 on certiorari where
herein petitioner BANTSA ascribes to the Court of Appeals the
following assignment of errors:
1. The Honorable Court of Appeals disregarded the doctrines
laid down by this Hon. Supreme Court in the cases of Caltex
Philippines, Inc. vs. Intermediate Appellate Courtdocketed as
G.R. No. 74730 promulgated on August 25, 1989
and Philippine Commercial International Bank vs. IAC, 196
SCRA 29 (1991 case), although said cases were duly cited,
extensively discussed and specifically mentioned, as one of
the issues in the assignment of errors found on page 5 of the
decision dated September 30, 1997.
2. The Hon. Court of Appeals acted with grave abuse of
discretion when it awarded the private respondent actual and
exemplary damages totalling P171,600,000.00, as of July 12,
1998 although such huge amount was not asked nor prayed
for in private respondent's complaint, is contrary to law and is
totally unsupported by evidence (sic).
In fine, this Court is called upon to resolve two main issues:
1. Whether or not the petitioner's act of filing a collection suit
against the principal debtors for the recovery of the loan before
foreign courts constituted a waiver of the remedy of
foreclosure.

Page 38 of 42
2. Whether or not the award by the lower court of actual and
exemplary damages in favor of private respondent ARC, as
third-party mortgagor, is proper.
The petition is bereft of merit.
First, as to the issue of availability of remedies, petitioner
submits that a waiver of the remedy of foreclosure requires the
concurrence of two requisites: an ordinary civil action for
collection should be filed and subsequently a final judgment be
correspondingly rendered therein.
According to petitioner, the mere filing of a personal action to
collect the principal loan does not suffice; a final judgment
must be secured and obtained in the personal action so that
waiver of the remedy of foreclosure may be appreciated. To put
it differently, absent any of the two requisites, the mortgageecreditor is deemed not to have waived the remedy of
foreclosure.
We do not agree.
Certainly, this Court finds petitioner's arguments untenable and
upholds the jurisprudence laid down in Bachrach 15and similar
cases adjudicated thereafter, thus:
In the absence of express statutory provisions, a mortgage
creditor may institute against the mortgage debtor either a
personal action or debt or a real action to foreclose the
mortgage. In other words, he may he may pursue either of the
two remedies, but not both. By such election, his cause of
action can by no means be impaired, for each of the two
remedies is complete in itself. Thus, an election to bring a
personal action will leave open to him all the properties of the
debtor for attachment and execution, even including the
mortgaged property itself. And, if he waives such personal
action and pursues his remedy against the mortgaged
property, an unsatisfied judgment thereon would still give him
the right to sue for a deficiency judgment, in which case, all the
properties of the defendant, other than the mortgaged property,
are again open to him for the satisfaction of the deficiency. In
either case, his remedy is complete, his cause of action
undiminished, and any advantages attendant to the pursuit of
one or the other remedy are purely accidental and are all under
his right of election. On the other hand, a rule that would
authorize the plaintiff to bring a personal action against the
debtor and simultaneously or successively another action
against the mortgaged property, would result not only in
multiplicity of suits so offensive to justice (Soriano vs.
Enriques, 24 Phil. 584) and obnoxious to law and equity
(Osorio vs. San Agustin, 25 Phil., 404), but also in subjecting
the defendant to the vexation of being sued in the place of his
residence or of the residence of the plaintiff, and then again in
the place where the property lies.
In Danao vs. Court of Appeals, 16 this Court, reiterating
jurisprudence enunciated in Manila Trading and Supply Co vs.
Co
Kim 17 and Movido
vs.
RFC, 18 invariably held:
. . . The rule is now settled that a mortgage creditor may elect
to waive his security and bring, instead, an ordinary action to
recover the indebtedness with the right to execute a judgment
thereon on all the properties of the debtor, including the subject
matter of the mortgage . . . , subject to the qualification that if
he fails in the remedy by him elected, he cannot pursue further
the remedy he has waived. (Emphasis Ours)
Anent real properties in particular, the Court has laid down the
rule that a mortgage creditor may institute against the
mortgage debtor either a personal action for debt or a real
action to foreclose the mortgage. 19
In our jurisdiction, the remedies available to the mortgage
creditor are deemed alternative and not cumulative. Notably,
an election of one remedy operates as a waiver of the other.

For this purpose, a remedy is deemed chosen upon the filing of

the suit for collection or upon the filing of the complaint in an
action for foreclosure of mortgage, pursuant to the provision of
Rule 68 of the of the 1997 Rules of Civil Procedure. As to
extrajudicial foreclosure, such remedy is deemed elected by
the mortgage creditor upon filing of the petition not with any
court of justice but with the Office of the Sheriff of the province
where the sale is to be made, in accordance with the
provisions of Act No. 3135, as amended by Act No. 4118.
In the case at bench, private respondent ARC constituted real
estate mortgages over its properties as security for the debt of
the principal debtors. By doing so, private respondent
subjected itself to the liabilities of a third party mortgagor.
Under the law, third persons who are not parties to a loan may
secure the latter by pledging or mortgaging their own
property. 20
Notwithstanding, there is no legal provision nor jurisprudence
in our jurisdiction which makes a third person who secures the
fulfillment of another's obligation by mortgaging his own
property, to be solidarily bound with the principal obligor. The
signatory to the principal contractloanremains to be
primarily bound. It is only upon default of the latter that the
creditor may have recourse on the mortgagors by foreclosing
the mortgaged properties in lieu of an action for the recovery of
the amount of the loan. 21
In the instant case, petitioner's contention that the requisites of
filing the action for collection and rendition of final judgment
therein should concur, is untenable.
Thus, in Cerna vs. Court of Appeals, 22 we agreed with the
petitioner in said case, that the filing of a collection suit barred
the foreclosure of the mortgage:
A mortgagee who files a suit for collection abandons the
remedy of foreclosure of the chattel mortgage constituted over
the personal property as security for the debt or value of the
promissory note when he seeks to recover in the said
collection suit.
. . . When the mortgagee elects to file a suit for collection, not
foreclosure, thereby abandoning the chattel mortgage as basis
for relief, he clearly manifests his lack of desire and interest to
go after the mortgaged property as security for the promissory
note . . . .
Contrary to petitioner's arguments, we therefore reiterate the
rule, for clarity and emphasis, that the mere act of filing of an
ordinary action for collection operates as a waiver of the
mortgage-creditor's remedy to foreclose the mortgage. By the
mere filing of the ordinary action for collection against the
principal debtors, the petitioner in the present case is deemed
to have elected a remedy, as a result of which a waiver of the
other necessarily must arise. Corollarily, no final judgment in
the collection suit is required for the rule on waiver to apply.
Hence, in Caltex Philippines, Inc. vs. Intermediate-Appellate
Court, 23 a case relied upon by petitioner, supposedly to
buttress its contention, this Court had occasion to rule that the
mere act of filing a collection suit for the recovery of a debt
secured by a mortgage constitutes waiver of the other remedy
of foreclosure.
In the case at bar, petitioner BANTSA only has one cause of
action which is non-payment of the debt. Nevertheless,
alternative remedies are available for its enjoyment and
exercise. Petitioner then may opt to exercise only one of two
remedies so as not to violate the rule against splitting a cause
of action.
As elucidated by this Court in the landmark case of Bachrach
Motor Co., Inc, vs. Icarangal. 24

Page 39 of 42
For non-payment of a note secured by mortgage, the creditor
has a single cause of action against the debtor. This single
cause of action consists in the recovery of the credit with
execution of the security. In other words, the creditor in his
action may make two demands, the payment of the debt and
the foreclosure of his mortgage. But both demands arise from
the same cause, the non-payment of the debt, and for that
reason, they constitute a single cause of action. Though the
debt and the mortgage constitute separate agreements, the
latter is subsidiary to the former, and both refer to one and the
same obligation. Consequently, there exists only one cause of
action for a single breach of that obligation. Plaintiff, then, by
applying the rules above stated, cannot split up his single
cause of action by filing a complaint for payment of the debt,
and thereafter another complaint for foreclosure of the
mortgage. If he does so, the filing of the first complaint will bar
the subsequent complaint. By allowing the creditor to file two
separate complaints simultaneously or successively, one to
recover his credit and another to foreclose his mortgage, we
will, in effect, be authorizing him plural redress for a single
breach of contract at so much cost to the courts and with so
much vexation and oppression to the debtor.
Petitioner further faults the Court of Appeals for allegedly
disregarding the doctrine enunciated in Caltex wherein this
High Court relaxed the application of the general rules to wit:
In the present case, however, we shall not follow this rule to
the letter but declare that it is the collection suit which was
waived and/or abandoned. This ruling is more in harmony with
the principles underlying our judicial system. It is of no moment
that the collection suit was filed ahead, what is determinative is
the fact that the foreclosure proceedings ended even before
the decision in the collection suit was rendered. . . .
Notably, though, petitioner took the Caltex ruling out of context.
We must stress that the Caltex case was never intended to
overrule the well-entrenched doctrine enunciated Bachrach,
which to our mind still finds applicability in cases of this sort. To
reiterate, Bachrach is still good law.
We then quote the decision 25 of the trial court, in the present
case, thus:
The aforequoted ruling in Caltex is the exception rather than
the rule, dictated by the peculiar circumstances obtaining
therein. In the said case, the Supreme Court chastised Caltex
for making ". . .a mockery of our judicial system when it initially
filed a collection suit then, during the pendency thereof,
foreclosed extrajudicially the mortgaged property which
secured the indebtedness, and still pursued the collection suit
to the end." Thus, to prevent a mockery of our judicial system",
the collection suit had to be nullified because the foreclosure
proceedings have already been pursued to their end and can
no longer be undone.
xxx xxx xxx
In the case at bar, it has not been shown whether the
defendant pursued to the end or are still pursuing the
collection suits filed in foreign courts. There is no occasion,
therefore, for this court to apply the exception laid down by the
Supreme Court in Caltex by nullifying the collection suits. Quite
obviously, too, the aforesaid collection suits are beyond the
reach of this Court. Thus the only way the court may prevent
the spector of a creditor having "plural redress for a single
breach of contract" is by holding, as the Court hereby holds,
that the defendant has waived the right to foreclose the
mortgages constituted by the plaintiff on its properties originally
covered by Transfer Certificates of Title Nos. T-78759, T78762, T-78760 and T-78761. (RTC Decision pp., 10-11)
In this light, the actuations of Caltex are deserving of severe
criticism, to say the least. 26

Moreover, petitioner attempts to mislead this Court by citing the

case of PCIB vs. IAC. 27 Again, petitioner tried to fit a square
peg in a round hole. It must be stressed that far from
overturning the doctrine laid down in Bachrach, this Court in
PCIB buttressed its firm stand on this issue by declaring:
While the law allows a mortgage creditor to either institute a
personal action for the debt or a real action to foreclosure the
mortgage, he cannot pursue both remedies simultaneously or
successively as was done by PCIB in this case.
xxx xxx xxx
Thus, when the PCIB filed Civil Case No. 29392 to enforce
payment of the 1.3 million promissory note secured by real
estate mortgages and subsequently filed a petition for
extrajudicial foreclosure, it violates the rule against splitting a
cause of action.
Accordingly, applying the foregoing rules, we hold that
petitioner, by the expediency of filing four civil suits before
foreign courts, necessarily abandoned the remedy to foreclose
the real estate mortgages constituted over the properties of
third-party mortgagor and herein private respondent ARC.
Moreover, by filing the four civil actions and by eventually
foreclosing extrajudicially the mortgages, petitioner in effect
transgressed the rules against splitting a cause of action wellenshrined in jurisprudence and our statute books.
In Bachrach, this Court resolved to deny the creditor the
remedy of foreclosure after the collection suit was filed,
considering that the creditor should not be afforded "plural
redress for a single breach of contract." For cause of action
should not be confused with the remedy created for its
enforcement. 28
Notably, it is not the nature of the redress which is crucial but
the efficacy of the remedy chosen in addressing the creditor's
cause. Hence, a suit brought before a foreign court having
competence and jurisdiction to entertain the action is deemed,
for this purpose, to be within the contemplation of the remedy
available to the mortgagee-creditor. This pronouncement would
best serve the interest of justice and fair play and further
discourage the noxious practice of splitting up a lone cause of
action.
Incidentally, BANTSA alleges that under English Law, which
according to petitioner is the governing law with regard to the
principal agreements, the mortgagee does not lose its security
interest by simply filing civil actions for sums of money. 29
We rule in the negative.
This argument shows desperation on the part of petitioner to
rivet its crumbling cause. In the case at bench, Philippine law
shall apply notwithstanding the evidence presented by
petitioner to prove the English law on the matter.
In a long line of decisions, this Court adopted the wellimbedded principle in our jurisdiction that there is no judicial
notice of any foreign law. A foreign law must be properly
pleaded and proved as a fact. 30 Thus, if the foreign law
involved is not properly pleaded and proved, our courts will
presume that the foreign law is the same as our local or
domestic
or
internal
law. 31 This is what we refer to as the doctrine of processual
presumption.
In the instant case, assuming arguendo that the English Law
on the matter were properly pleaded and proved in accordance
with Section 24, Rule 132 of the Rules of Court and the
jurisprudence
laid
down
in Yao
Kee,
et
al. vs.
Sy-Gonzales, 32 said foreign law would still not find applicability.
Thus, when the foreign law, judgment or contract is contrary to
a sound and established public policy of the forum, the said
foreign law, judgment or order shall not be applied. 33

Page 40 of 42
Additionally, prohibitive laws concerning persons, their acts or
property, and those which have for their object public order,
public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign
country. 34
The public policy sought to be protected in the instant case is
the principle imbedded in our jurisdiction proscribing the
splitting up of a single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is
pertinent
If two or more suits are instituted on the basis of the same
cause of action, the filing of one or a judgment upon the merits
in any one is available as a ground for the dismissal of the
others.
Moreover, foreign law should not be applied when its
application would work undeniable injustice to the citizens or
residents of the forum. To give justice is the most important
function of law; hence, a law, or judgment or contract that is
obviously unjust negates the fundamental principles of Conflict
of Laws. 35
Clearly then, English Law is not applicable.
As to the second pivotal issue, we hold that the private
respondent is entitled to the award of actual or compensatory
damages inasmuch as the act of petitioner BANTSA in
extrajudicially foreclosing the real estate mortgages constituted
a clear violation of the rights of herein private respondent ARC,
as third-party mortgagor.
Actual or compensatory damages are those recoverable
because of pecuniary loss in business, trade, property,
profession, job or occupation and the same must be proved,
otherwise if the proof is flimsy and non-substantial, no
damages will be given. 36 Indeed, the question of the value of
property is always a difficult one to settle as valuation of real
property is an imprecise process since real estate has no
inherent value readily ascertainable by an appraiser or by the
court.37 The opinions of men vary so much concerning the real
value of property that the best the courts can do is hear all of
the witnesses which the respective parties desire to present,
and then, by carefully weighing that testimony, arrive at a
conclusion which is just and equitable. 38
In the instant case, petitioner assails the Court of Appeals for
relying heavily on the valuation made by Philippine Appraisal
Company. In effect, BANTSA questions the act of the appellate
court in giving due weight to the appraisal report composed of
twenty three pages, signed by Mr. Lauro Marquez and
submitted as evidence by private respondent. The appraisal
report, as the records would readily show, was corroborated by
the testimony of Mr. Reynaldo Flores, witness for private
respondent.
On this matter, the trial court observed:
The record herein reveals that plaintiff-appellee formally
offered as evidence the appraisal report dated March 29, 1993
(Exhibit J, Records, p. 409), consisting of twenty three (23)
pages which set out in detail the valuation of the property to
determine its fair market value (TSN, April 22, 1994, p. 4), in
the amount of P99,986,592.00 (TSN, ibid., p. 5), together with
the corroborative testimony of one Mr. Reynaldo F. Flores, an
appraiser and director of Philippine Appraisal Company, Inc.
(TSN, ibid., p. 3). The latter's testimony was subjected to
extensive cross-examination by counsel for defendantappellant (TSN, April 22, 1994, pp. 6-22). 39
In the matter of credibility of witnesses, the Court reiterates the
familiar and well-entrenched rule that the factual findings of the
trial
court
should
be
respected. 40 The
time-tested

jurisprudence is that the findings and conclusions of the trial

court on the credibility of witnesses enjoy a badge of respect
for the reason that trial courts have the advantage of observing
the demeanor of witnesses as they testify. 41
This Court will not alter the findings of the trial court on the
credibility of witnesses, principally because they are in a better
position to assess the same than the appellate
court. 42 Besides, trial courts are in a better position to examine
real evidence as well as observe the demeanor of witnesses. 43
Similarly, the appreciation of evidence and the assessment of
the credibility of witnesses rest primarily with the trial
court. 44 In the case at bar, we see no reason that would justify
this Court to disturb the factual findings of the trial court, as
affirmed by the Court of Appeals, with regard to the award of
actual damages.
In arriving at the amount of actual damages, the trial court
justified the award by presenting the following ratiocination in
its assailed decision 45, to wit:
Indeed, the Court has its own mind in the matter of valuation.
The size of the subject real properties are (sic) set forth in their
individuals titles, and the Court itself has seen the character
and nature of said properties during the ocular inspection it
conducted. Based principally on the foregoing, the Court
makes the following observations:
1. The properties consist of about 39 hectares in Bo. Sto.
Cristo, San Jose del Monte, Bulacan, which is (sic) not distant
from Metro Manila the biggest urban center in the
Philippines and are easily accessible through well-paved
roads;
2. The properties are suitable for development into a
subdivision for low cost housing, as admitted by defendant's
own appraiser (TSN, May 30, 1994, p. 31);
3. The pigpens which used to exist in the property have
already been demolished. Houses of strong materials are
found in the vicinity of the property (Exhs. 2, 2-1 to 2-7), and
the vicinity is a growing community. It has even been shown
that the house of the Barangay Chairman is located adjacent to
the property in question (Exh. 27), and the only remaining
piggery (named Cherry Farm) in the vicinity is about 2
kilometers away from the western boundary of the property in
question (TSN, November 19, p. 3);
4. It will not be hard to find interested buyers of the property, as
indubitably shown by the fact that on March 18, 1994, ICCS
(the buyer during the foreclosure sale) sold the consolidated
real estate properties to Stateland Investment Corporation, in
whose favor new titles were issued, i.e., TCT Nos. T187781(m); T-187782(m), T-187783(m); T-16653P(m) and T166521(m) by the Register of Deeds of Meycauayan (sic),
Bulacan;
5. The fact that ICCS was able to sell the subject properties to
Stateland Investment Corporation for Thirty Nine Million
(P39,000,000.00) Pesos, which is more than triple defendant's
appraisal (Exh. 2) clearly shows that the Court cannot rely on
defendant's aforesaid estimate (Decision, Records, p. 603).
It is a fundamental legal aphorism that the conclusions of the
trial judge on the credibility of witnesses command great
respect and consideration especially when the conclusions are
supported by the evidence on record. 46Applying the foregoing
principle, we therefore hold that the trial court committed no
palpable error in giving credence to the testimony of Reynaldo
Flores, who according to the records, is a licensed real estate
broker, appraiser and director of Philippine Appraisal Company,
Inc. since 1990. 47 As the records show, Flores had been with
the company for 26 years at the time of his testimony.

Page 41 of 42
Of equal importance is the fact that the trial court did not
confine itself to the appraisal report dated 29 March 1993, and
the testimony given by Mr. Reynaldo Flores, in determining the
fair market value of the real property. Above all these, the
record would likewise show that the trial judge in order to
appraise himself of the characteristics and condition of the
property, conducted an ocular inspection where the opposing
parties appeared and were duly represented.
Based on these considerations and the evidence submitted,
we affirm the ruling of the trial court as regards the valuation of
the property
. . . a valuation of Ninety Nine Million Pesos (P99,000,000.00)
for the 39-hectare properties (sic) translates to just about Two
Hundred Fifty Four Pesos (P254.00) per square meter. This
appears to be, as the court so holds, a better approximation of
the fair market value of the subject properties. This is the
amount which should be restituted by the defendant to the
plaintiff by way of actual or compensatory damages . . . . 48
Further, petitioner ascribes error to the lower court awarding an
amount allegedly not asked nor prayed for in private
respondent's complaint.
Notwithstanding the fact that the award of actual and
compensatory damages by the lower court exceeded that
prayed for in the complaint, the same is nonetheless valid,
subject to certain qualifications.
On this issue, Rule 10, Section 5 of the Rules of Court is
pertinent:
Sec. 5. Amendment to conform to or authorize presentation of
evidence. When issues not raised by the pleadings are tried
with the express or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the
pleadings. Such amendment of the pleadings as may be
necessary to cause them to conform to the evidence and to
raise these issues may be made upon motion of any party at
any time, even after judgement; but failure to amend does not
affect the result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is not within the
issues made by the pleadings, the court may allow the
pleadings to be amended and shall do so with liberality if the
presentation of the merits of the action and the ends of
substantial justice will be subserved thereby. The court may
grant a continuance to enable the amendment to be made.
The jurisprudence enunciated in Talisay-Silay Milling Co., Inc.
vs.
Asociacion
de
Agricultures
de
Talisay-Silay,
Inc. 49citing Northern Cement Corporation vs. Intermediate
Appellate Court 50 is enlightening:
There have been instances where the Court has held that even
without the necessary amendment, the amount proved at the
trial may be validly awarded, as in Tuazon v. Bolanos (95 Phil.
106), where we said that if the facts shown entitled plaintiff to
relief other than that asked for, no amendment to the complaint
was necessary, especially where defendant had himself raised
the point on which recovery was based. The appellate court
could treat the pleading as amended to conform to the
evidence although the pleadings were actually not amended.
Amendment is also unnecessary when only clerical error or
non substantial matters are involved, as we held in Bank of the
Philippine Islands vs. Laguna(48 Phil. 5). In Co Tiamco vs.
Diaz (75 Phil. 672), we stressed that the rule on amendment
need not be applied rigidly, particularly where no surprise or
prejudice is caused the objecting party. And in the recent case
of National Power Corporation vs. Court of Appeals (113 SCRA
556), we held that where there is a variance in the defendant's
pleadings and the evidence adduced by it at the trial, the Court
may treat the pleading as amended to conform with the
evidence.

It is the view of the Court that pursuant to the above-mentioned

rule and in light of the decisions cited, the trial court should not
be precluded from awarding an amount higher than that
claimed in the pleading notwithstanding the absence of the
required amendment. But it is upon the condition that the
evidence of such higher amount has been presented properly,
with full opportunity on the part of the opposing parties to
support their respective contentions and to refute each other's
evidence.
The failure of a party to amend a pleading to conform to the
evidence adduced during trial does not preclude an
adjudication by the court on the basis of such evidence which
may embody new issues not raised in the pleadings, or serve
as a basis for a higher award of damages. Although the
pleading may not have been amended to conform to the
evidence submitted during trial, judgment may nonetheless be
rendered, not simply on the basis of the issues alleged but also
the basis of issues discussed and the assertions of fact proved
in the course of trial. The court may treat the pleading as if it
had been amended to conform to the evidence, although it had
not been actually so amended. Former Chief Justice Moran put
the matter in this way:
When evidence is presented by one party, with the expressed
or implied consent of the adverse party, as to issues not
alleged in the pleadings, judgment may be rendered validly as
regards those issues, which shall be considered as if they have
been raised in the pleadings. There is implied consent to the
evidence thus presented when the adverse party fails to object
thereto.
Clearly, a court may rule and render judgment on the basis of
the evidence before it even though the relevant pleading had
not been previously amended, so long as no surprise or
prejudice is thereby caused to the adverse party. Put a little
differently, so long as the basis requirements of fair play had
been met, as where litigants were given full opportunity to
support their respective contentions and to object to or refute
each other's evidence, the court may validly treat the pleadings
as if they had been amended to conform to the evidence and
proceed to adjudicate on the basis of all the evidence before it.
In the instant case, inasmuch as the petitioner was afforded
the opportunity to refute and object to the evidence, both
documentary and testimonial, formally offered by private
respondent, the rudiments of fair play are deemed satisfied. In
fact, the testimony of Reynaldo Flores was put under scrutiny
during the course of the cross-examination. Under these
circumstances, the court acted within the bounds of its
jurisdiction and committed no reversible error in awarding
actual damages the amount of which is higher than that prayed
for. Verily, the lower court's actuations are sanctioned by the
Rules and supported by jurisprudence.
Similarly, we affirm the grant of exemplary damages although
the amount of Five Million Pesos (P5,000,000.00) awarded,
being excessive, is subject to reduction. Exemplary or
corrective damages are imposed, by way of example or
correction for the public good, in addition to the moral,
temperate,
liquidated
or
compensatory
damages.51 Considering its purpose, it must be fair and
reasonable in every case and should not be awarded to
unjustly enrich a prevailing party. 52 In our view, an award of
P50,000.00 as exemplary damages in the present case
qualifies the test of reasonableness.
WHEREFORE, premises considered, the instant petition is
DENIED for lack of merit. The decision of the Court of Appeals
is hereby AFFIRMED with MODIFICATION of the amount
awarded as exemplary damages. According, petitioner is
hereby ordered to pay private respondent the sum of
P99,000,000.00 as actual or compensatory damages;
P50,000.00 as exemplary damage and the costs of suit.

Page 42 of 42
SO ORDERED.