Conflicts Cases Second Set of Ass.

FIRST DIVISION
The cause of the non-boarding of the Fontanillas on United Airlines

Flight No. 1108 makes up the bone of contention of this controversy.
[G.R. No. 124110. April 20, 2001]

Private respondents' version is as follows:
UNITED AIRLINES, INC., petitioner, vs. COURT OF APPEALS, ANICETO
FONTANILLA, in his personal capacity and in behalf of his
minor son MYCHAL ANDREW FONTANILLA respondents.
DECISION
KAPUNAN, J.:
On March 1, 1989, private respondent Aniceto Fontanilla purchased
from petitioner United Airlines, through the Philippine Travel Bureau in
Manila, three (3) Visit the U.S.A. tickets for himself, his wife and his minor
son Mychal for the following routes:
Aniceto Fontanilla and his son Mychal claim that on May 5, 1989, upon
their arrival at the Los Angeles Airport for their flight, they proceeded to
United Airlines counter where they were attended by an employee wearing a
nameplate bearing the name LINDA. Linda examined their tickets, punched
something into her computer and then told them that boarding would be in
fifteen minutes.[4]
When the flight was called, the Fontanillas proceeded to the plane. To
their surprise, the stewardess at the gate did not allow them to board the
plane, as they had no assigned seat numbers.They were then directed to go
back to the check-in counter where Linda subsequently informed them that
the flight had been overbooked and asked them to wait. [5]
(a) San Francisco to Washington (15 April 1989);

(b) Washington to Chicago (25 April 1989);
(c) Chicago to Los Angeles (29 April 1989);
(d) Los Angeles to San Francisco (01 May 1989 for petitioners wife and 05
May 1989 for petitioner and his son).[1]
All flights had been confirmed previously by United Airlines.[2]
The Fontanillas proceeded to the United States as planned, where they
used the first coupon from San Francisco to Washington. On April 24, 1989,
Aniceto Fontanilla bought two (2) additional coupons each for himself, his
wife and his son from petitioner at its office in Washington Dulles
Airport. After paying the penalty for rewriting their tickets, the Fontanillas
were issued tickets with corresponding boarding passes with the words
CHECK-IN REQUIRED, for United Airlines Flight No. 1108, set to leave from
Los Angeles to San Francisco at 10:30 a.m. on May 5, 1989. [3]
1 |CONFLICTS cases - Set # 2
The Fontanillas tried to explain to Linda the special circumstances of

their visit. However, Linda told them in arrogant manner, So what, I can not
do anything about it.[6]
Subsequently, three other passengers with Caucasian features were
graciously allowed to board, after the Fontanillas were told that the flight had
been overbooked.[7]
The plane then took off with the Fontanillas baggage in tow, leaving
them behind.[8]
The Fontanillas then complained to Linda, who in turn gave them an
ugly stare and rudely uttered, Its not my fault. Its the fault of the
company. Just sit down and wait.[9] When Mr. Fontanilla reminded Linda of
the inconvenience being caused to them, she bluntly retorted, Who do you
think you are? You lousy Flips are good for nothing beggars. You always ask
for American aid. After which she remarked Dont worry about your
baggage. Anyway there is nothing in there. What are you doing here
anyway? I will report you to immigration. You Filipinos should go home.
[10]
Such rude statements were made in front of other people in the airport
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causing the Fontanillas to suffer shame, humiliation and embarrassment. The

chastening situation even caused the younger Fontanilla to break into tears.
The Fontanillas then proceeded to the United Airlines customer service

counter to plead their case. The male employee at the counter reacted by
shouting that he was ready for it and left without saying anything. [13]
On appeal, the Court of Appeals ruled in favor of the Fontanillas. The

appellate court found that there was an admission on the part of United
Airlines that the Fontanillas did in fact observe the check-in requirement. It
ruled further that even assuming there was a failure to observe the check-in
requirement, United Airlines failed to comply with the procedure laid down in
cases where a passenger is denied boarding. The appellate court likewise
gave credence to the claim of Aniceto Fontanilla that the employees of
United Airlines were discourteous and arbitrary and, worse, discriminatory. In
light of such treatment, the Fontanillas were entitled to moral damages. The
dispositive portion of the decision of the respondent Court of Appeals dated
29 September 1995, states as follows:
The Fontanillas were not booked on the next flight, which departed for
San Francisco at 11:00 a.m. It was only at 12:00 noon that they were able to
leave Los Angeles on United Airlines Flight No. 803.
WHEREFORE, in view of the foregoing, judgment appealed herefrom is

hereby REVERSED and SET ASIDE, and a new judgment is entered
ordering defendant-appellee to pay plaintiff-appellant the following:
Petitioner United Airlines has a different version of what occurred at the

Los Angeles Airport on May 5, 1989.
a) P200,000.00 as moral damages;
[11]
After some time, Linda, without any explanation, offered the Fontanillas
$50.00 each. She simply said Take it or leave it. This, the Fontanillas
declined.[12]
b) P200,000.00 as exemplary damages;

According to United Airlines, the Fontanillas did not initially go to the
check-in counter to get their seat assignments for UA Flight 1108. They
instead proceeded to join the queue boarding the aircraft without first
securing their seat assignments as required in their ticket and boarding
passes. Having no seat assignments, the stewardess at the door of the plane
instructed them to go to the check-in counter. When the Fontanillas
proceeded to the check-in counter, Linda Allen, the United Airlines Customer
Representative at the counter informed them that the flight was
overbooked. She booked them on the next available flight and offered them
denied boarding compensation. Allen vehemently denies uttering the
derogatory and racist words attributed to her by the Fontanillas. [14]
The incident prompted the Fontanillas to file Civil Case No. 89-4268 for
damages before the Regional Trial Court of Makati. After trial on the merits,
the trial court rendered a decision, the dispositive portion of which reads as
follows:
WHEREFORE, judgment is rendered dismissing the complaint. The
counterclaim is likewise dismissed as it appears that plaintiffs were not
actuated by legal malice when they filed the instant complaint. [15]
c) P50, 000.00 as attorneys fees.

No pronouncement as to costs.
SO ORDERED.[16]
Petitioner United Airlines now comes to this Court raising the following
assignment of errors:
I
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING
THAT THE TRIAL COURT WAS WRONG IN FAILING TO CONSIDER
THE ALLEGED ADMISSION THAT PRIVATE RESPONDENT
OBSERVED THE CHECK-IN REQUIREMENT.
II
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THAT PRIVATE RESPONDENTS FAILURE TO CHECK-IN WILL NOT
DEFEAT HIS CLAIMS BECAUSE THE DENIED BOARDING RULES
WERE NOT COMPLIED WITH.
III
THAT PRIVATE RESPONDENT IS ENTITLED TO MORAL DAMAGES
OF P200, 000.
IV
THAT PRIVATE RESPONDENT IS ENTITLED TO EXEMPLARY
DAMAGES OF P200,000.
V
THAT PRIVATE RESPONDENT IS ENTITLED TO ATTORNEYS FEES
OF P50, 000.[17]
On the first issue raised by the petitioner, the respondent Court of
Appeals ruled that when Rule 9, Section 1 of the Rules of Court, [18] there was
an implied admission in petitioner's answer in the allegations in the complaint
that private respondent and his son observed the check-in requirement at the
Los Angeles Airport. Thus:
7. On May 5, 1989 at 9:45 a.m., plaintiff and his son checked in at

defendants designated counter at the airport in Los Angeles for their
scheduled flight to San Francisco on defendants Flight No. 1108. [20]
Responding to the above allegations, petitioner averred in paragraph 4
of its answer, thus:
4. Admits the allegation set forth in paragraph 7 of the complaint except to
deny that plaintiff and his son checked in at 9:45 a.m., for lack of knowledge
or information at this point in time as to the truth thereof.[21]
The rule authorizing an answer that the defendant has no knowledge or
information sufficient to form a belief as to the truth of an averment and
giving such answer the effect of a denial, does not apply where the fact as to
which want of knowledge is asserted is so plainly and necessarily within the
defendant's knowledge that his averment of ignorance must be palpably
untrue.[22]Whether or not private respondents checked in at petitioner's
designated counter at the airport at 9:45 a.m. on May 5, 1989 must
necessarily be within petitioner's knowledge.
While there was no specific denial as to the fact of compliance with the
check-in requirement by private respondents, petitioner presented evidence
to support its contention that there indeed was no compliance.
Private respondents then are said to have waived the rule on
admission. It not only presented evidence to support its contention that there
was compliance with the check-in requirement, it even allowed petitioner to
present rebuttal evidence. In the case of Yu Chuck vs. "Kong Li Po," we ruled
that:
A perusal of the above pleadings filed before the trial court disclosed
that there exists a blatant admission on the part of the defendant-appellee
that the plaintiffs-appellants indeed observed the check-in requirement at the
Los Angeles Airport on May 5, 1989. In view of defendant-appellees
admission of plaintiffs-appellants material averment in the complaint, We find
no reason why the trial court should rule against such admission. [19]
The object of the rule is to relieve a party of the trouble and expense in
proving in the first instance an alleged fact, the existence or non-existence of
which is necessarily within the knowledge of the adverse party, and of the
necessity (to his opponents case) of establishing which such adverse party is
notified by his opponents pleadings.
We disagree with the above conclusion reached by respondent Court of

Appeals. Paragraph 7 of private respondents' complaint states:
The plaintiff may, of course, waive the rule and that is what must be
considered to have done (sic) by introducing evidence as to the execution of
the document and failing to object to the defendants evidence in refutation;
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all this evidence is now competent and the case must be decided thereupon.
[23]
made him the laughing stock among the passengers. [28] Hence, as correctly
observed by the trial court:
The determination of the other issues raised is dependent on whether or

not there was a breach of contract in bad faith on the part of the petitioner in
not allowing the Fontanillas to board United Airlines Flight 1108.
Plaintiffs fail to realize that their failure to check in, as expressly required in
their boarding passes, is the very reason why they were not given their
respective seat numbers, which resulted in their being denied boarding. [29]
It must be remembered that the general rule in civil cases is that the
party having the burden of proof of an essential fact must produce a
preponderance of evidence thereon. [24] Although the evidence adduced by
the plaintiff is stronger than that presented by the defendant, a judgment
cannot be entered in favor of the former, if his evidence is not sufficient to
sustain his cause of action. The plaintiff must rely on the strength of his own
evidence and not upon the weakness of the defendants. [25] Proceeding from
this, and considering the contradictory findings of facts by the Regional Trial
Court and the Court of Appeals, the question before this Court is whether or
not private respondents were able to prove with adequate evidence his
allegations of breach of contract in bad faith.
Neither do we agree with the conclusion reached by the appellate court

that private respondents' failure to comply with the check-in requirement will
not defeat his claim as the denied boarding rules were not complied
with. Notably, the appellate court relied on the Code of Federal Regulation
Part on Oversales, which states:
We rule in the negative.

Time and again, the Court has pronounced that appellate courts should
not, unless for strong and cogent reasons, reverse the findings of facts of trial
courts. This is so because trial judges are in a better position to examine real
evidence and at a vantage point to observe the actuation and the demeanor
of the witnesses.[26] While not the sole indicator of the credibility of a witness,
it is of such weight that it has been said to be the touchstone of credibility.[27]
Aniceto Fontanillas assertion that upon arrival at the airport at 9:45 a.m.,
he immediately proceeded to the check-in counter, and that Linda Allen
punched in something into the computer is specious and not supported by
the evidence on record. In support of their allegations, private respondents
submitted a copy of the boarding pass. Explicitly printed on the boarding
pass are the words Check-In Required. Curiously, the said pass did not
indicate any seat number. If indeed the Fontanillas checked in at the
designated time as they claimed, why then were they not assigned seat
numbers? Absent any showing that Linda was so motivated, we do not buy
into private respondents' claim that Linda intentionally deceived him, and
250.6 Exceptions to eligibility for denied boarding compensation.

A passenger denied board involuntarily from an oversold flight shall not be
eligible for denied board compensation if:
(a) The passenger does not comply with the carriers contract of carriage or
tariff provisions regarding ticketing, reconfirmation, check-in, and
acceptability for transformation.
The appellate court, however, erred in applying the laws of the United
States as, in the case at bar, Philippine law is the applicable law. Although,
the contract of carriage was to be performed in the United States, the tickets
were purchased through petitioners agent in Manila. It is true that the tickets
were rewritten in Washington, D.C. However, such fact did not change the
nature of the original contract of carriage entered into by the parties in
Manila.
In the case of Zalamea vs. Court of Appeals,[30] this Court applied the
doctrine of lex loci contractus. According to the doctrine, as a general rule,
the law of the place where a contract is made or entered into governs with
respect to its nature and validity, obligation and interpretation. This has been
said to be the rule even though the place where the contract was made is
different from the place where it is to be performed, and particularly so, if the
place of the making and the place of performance are the same. Hence, the
court should apply the law of the place where the airline ticket was issued,
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when the passengers are residents and nationals of the forum and the ticket
is issued in such State by the defendant airline.
The law of the forum on the subject matter is Economic Regulations No.
7 as amended by Boarding Priority and Denied Boarding Compensation of
the Civil Aeronautics Board, which provides that the check-in requirement be
complied with before a passenger may claim against a carrier for being
denied boarding:
SEC. 5. Amount of Denied Boarding Compensation Subject to the exceptions
provided hereinafter under Section 6, carriers shall pay to passengers
holding confirmed reserved space and who have presented themselves at
the proper place and time and fully complied with the carriers check-in
and reconfirmation procedures and who are acceptable for carriage under
the Carriers tariffs but who have been denied boarding for lack of space, a
compensation at the rate of: xx
Private respondents' narration that they were subjected to harsh and
derogatory remarks seems incredulous. However, this Court will not attempt
to surmise what really happened. Suffice to say, private respondent was not
able to prove his cause of action, for as the trial court correctly observed:
xxx plaintiffs claim to have been discriminated against and insulted in the
presence of several people. Unfortunately, plaintiffs limited their evidence to
the testimony [of] Aniceto Fontanilla, without any corroboration by the people
who saw or heard the discriminatory remarks and insults; while such limited
testimony could possibly be true, it does not enable the Court to reach the
conclusion that plaintiffs have, by a preponderance of evidence, proven that
they are entitled to P1,650,000.00 damages from defendant. [31]
As to the award of moral and exemplary damages, we find error in the
award of such by the Court of Appeals. For the plaintiff to be entitled to an
award of moral damages arising from a breach of contract of carriage, the
carrier must have acted with fraud or bad faith. The appellate court
predicated its award on our pronouncement in the case of Zalamea vs. Court
of Appeals, supra, where we stated:
Existing jurisprudence explicitly states that overbooking amounts to bad faith,
entitling passengers concerned to an award of moral damages. In Alitalia
Airways v. Court of Appeals, where passengers with confirmed booking were

refused carriage on the last minute, this Court held that when an airline
issues a ticket to a passenger confirmed on a particular flight, on a certain
date, a contract of carriage arises, and the passenger has every right to
expect that he would fly on that flight and on that date. If he does not, then
the carrier opens itself to a suit for breach of contract of carriage. Where an
airline had deliberately overbooked, it took the risk of having to deprive
some passengers of their seats in case all of them would show up for check
in. For the indignity and inconvenience of being refused a confirmed seat on
the last minute, said passenger is entitled to moral damages. (Emphasis
supplied.)
However, the Courts ruling in said case should be read in consonance
with existing laws, particularly, Economic Regulations No. 7, as amended, of
the Civil Aeronautics Board:
Sec 3. Scope. This regulation shall apply to every Philippine and foreign air
carrier with respect to its operation of flights or portions of flights originating
from or terminating at, or serving a point within the territory of the Republic of
the Philippines insofar as it denies boarding to a passenger on a flight, or
portion of a flight inside or outside the Philippines, for which he holds
confirmed reserved space. Furthermore, this Regulation is designed to cover
only honest mistakes on the part of the carriers and excludes deliberate and
willful acts of non-accommodation.Provided, however, that overbooking
not exceeding 10% of the seating capacity of the aircraft shall not be
considered as a deliberate and willful act of non-accommodation.
What this Court considers as bad faith is the willful and deliberate
overbooking on the part of the airline carrier. The above-mentioned law
clearly states that when the overbooking does not exceed ten percent (10%),
it is not considered as deliberate and therefore does not amount to bad
faith. While there may have been overbooking in this case, private
respondents were not able to prove that the overbooking on United Airlines
Flight 1108 exceeded ten percent.
As earlier stated, the Court is of the opinion that the private respondents
were not able to prove that they were subjected to coarse and harsh
treatment by the ground crew of United Airlines.Neither were they able to
show that there was bad faith on part of the carrier airline. Hence, the award
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of moral and exemplary damages by the Court of Appeals is

improper. Corollarily, the award of attorney's fees is, likewise, denied for lack
of any legal and factual basis.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 37044 is hereby REVERSED and
SET ASIDE. The decision of the Regional Trial Court of Makati City in Civil
Case No. 89-4268 dated April 8, 1991 is hereby REINSTATED.
SO ORDERED.
Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-104776 December 5, 1994
Cadalin vs. POEA Administrator, 238 SCRA 721, 774-775 (1994)
QUIASON, J.:
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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 forumshopping; 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:
Resolution dated September 2, 1991 (Rollo, pp. 8-25; 26220).
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.
(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
Consolidation of Cases
(2) to reverse the Resolution dated March 24, 1992 of

NLRC, denying the motion for reconsideration of its
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. 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).
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(G.R. Nos. 104911-14, Rollo, pp. 986-1,107; G.R. Nos. 105029-30, 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. 10502932, 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).
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.
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.
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
On November 8, 1984, the POEA Administrator informed AIBC that its motion
for extension of time was granted.
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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 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-8406-555. 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 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 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
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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-86-05460 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-84-06-555. 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-8406-555. 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.
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 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-86-05-460. 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.
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
MJRTB
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:
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:
1. The claims of the 94 complainants

identified and listed in Annex "A" hereof are
dismissed for having prescribed;
(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,
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
(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
WHEREFORE, premises considered, the Decision of the

POEA in these consolidated cases is modified to the extent
and in accordance with the following dispositions:
MJRTB
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.
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.
105029-32, 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);
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).
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);
II
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);
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
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
MJRTB
(G.R. No. 104776, Rollo, pp. 1657-1703; G.R. Nos. 10491114, Rollo, pp. 655-675);
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).
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.
1773-1814);
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.
1066-1183);
Arnaldo J. Alonzo and 19 co-claimants dated July 22, 1993
(G.R. No. 104776, Rollo, pp. 1173-1235; G.R. Nos. 10502932, Rollo, pp. 1193-1256; G.R. Nos. 104911-14, Rollo, pp.
896-959);
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.
1280-1397);
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);
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 complainantsappellants allege that they were recruited by respondentappellant 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 Commence on :
(4) Basic Working Hours Per Week :

(5) Basic Working Hours Per Month :
MJRTB
(6) Basic Hourly Rate :

(7) Overtime Rate Per Hour :
(8) Projected Period of Service
(Subject to C(1) of this [sic]) :
Months and/or
Job Completion
xxx xxx xxx
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.
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.
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

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
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 are relevant to the claims of the complainantsappellants are as follows (italics supplied only for emphasis):
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
MJRTB
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. . . .
Art. 80: Friday shall be deemed to be a
weekly day of rest on full pay.
. . . 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;
(a) Whether or not the complainants who
have worked in Bahrain are entitled to the
above-mentioned benefits.
(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.
MJRTB
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.
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;
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;
(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.
(a) Whether or not the respondent-appellant

was denied its right to due process;
(b) Whether or not the admission of
evidence by the POEA after these cases
were submitted for decision was valid;
Seventh: Whether or not the POEA Administrator erred in

dismissing the following claims:
a. Unexpired portion of contract;
(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;
(e) Whether or not the awards based on the
averages and formula presented by the
complainants-appellants 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.
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;
Fifth: Whether or not the POEA erred in holding

respondents AIBC and Brown & Root jointly are severally
i. Refund of SSS premiums not remitted to

SSS;
MJRTB
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;
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.
m. Attorney's fees of at least ten percent of

the judgment award;
n. Other reliefs, like suspending and/or
cancelling the license to recruit of AIBC and
the accreditation of B & R issued by POEA;
o. Penalty for violations of Article 34
(prohibited practices), not excluding
reportorial requirements thereof.
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. 2529, 51-55).
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 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.
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:
MJRTB
(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 three-year prescriptive period;
(5) that the allegation that complainants were prematurely
repatriated prior to the expiration of their overseas contract
was not established; 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.
NLRC passed sub silencio the last issue, the claim that POEA Case No. (L)
86-65-460 should have been dismissed on the 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.
(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;
V
G.R. No. 104776
Claimants in G.R. No. 104776 based their petition for certiorari on the
following grounds:
(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
MJRTB
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;
(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
(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. 292-305).
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.
623-624; 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.
Attorney's Lien
G.R. Nos. 104911-14
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
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
MJRTB
shown in the Memorandum dated April 16, 1983 of the Ministry of Labor of
Bahrain (Rollo, pp. 21-22).
All the petitions raise the common issue of prescription although they
disagreed as to the time that should be embraced within the prescriptive
period.
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).
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.
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
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
MJRTB
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).
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).
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:
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
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
MJRTB
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 of limitations (G.R. No. 104776, Rollo, pp.
92-94).
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.
MJRTB
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, 152-153 [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 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.
MJRTB
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."
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 abovementioned 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 employeremployee 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
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:
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).
MJRTB
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.
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.
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.
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
MJRTB
Resolution, September 2, 1991, pp. 18-19; G.R. No.

104776, Rollo, pp. 73-74).
Atty. Del Mundo, included:
1. Unexpired portion of contract;

2. Interest earnings of Travel and Fund;
3. Retirement and Savings Plan benefit;
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.
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;
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.
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;
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.
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
NLRC blamed the parties and their lawyers for the delay in terminating the
proceedings, thus:
15. Penalty for violation of Article 34 (Prohibited practices)

not excluding reportorial requirements thereof (NLRC
MJRTB
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 far-fetched to
imagine that both counsel, unwittingly, perhaps, 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. 5859).
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."
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
MJRTB
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.
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.
While Administrative Circular No. 04-94 extended the application of the antiforum 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
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 self-appointed representatives, would surely claim denial of due
process.
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).
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.
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
MJRTB
Contempt of Court
xxx xxx xxx

The Company in its computation reached the following
averages:
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
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.
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. 21-22).
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 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.
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.
MJRTB
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 counter-offers 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 overseas-employment 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]).
MJRTB
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 overseas-employment

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 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
MJRTB
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."
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).
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 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.
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).
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."
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.
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.
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
MJRTB
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.
WHEREFORE, all the three petitions are DISMISSED.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 61594 September 28, 1990
PAKISTAN INTERNATIONAL AIRLINES CORPORATION, petitioner,
vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON.
VICENTE LEOGARDO, JR., in his capacity as Deputy Minister;
ETHELYNNE B. FARRALES and MARIA MOONYEEN
MAMASIG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for petitioner.
MJRTB
Ledesma, Saludo & Associates for private respondents.
Respondents then commenced training in Pakistan. After their training

period, they began discharging their job functions as flight attendants, with
base station in Manila and flying assignments to different parts of the Middle
East and Europe.
FELICIANO, J.:
On 2 December 1978, petitioner Pakistan International Airlines Corporation
("PIA"), a foreign corporation licensed to do business in the Philippines,
executed in Manila two (2) separate contracts of employment, one with
private respondent Ethelynne B. Farrales and the other with private
respondent Ma. M.C. Mamasig. 1 The contracts, which became effective on 9
January 1979, provided in pertinent portion as follows:
5. DURATION OF EMPLOYMENT AND PENALTY
This agreement is for a period of three (3) years, but can be
extended by the mutual consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided, PIA
reserves the right to terminate this agreement at any time by
giving the EMPLOYEE notice in writing in advance one
month before the intended termination or in lieu thereof, by
paying the EMPLOYEE wages equivalent to one month's
salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under and
by the laws of Pakistan, and only the Courts of Karachi,
Pakistan shall have the jurisdiction to consider any matter
arising out of or under this agreement.
On 2 August 1980, roughly one (1) year and four (4) months prior to the
expiration of the contracts of employment, PIA through Mr. Oscar Benares,
counsel for and official of the local branch of PIA, sent separate letters both
dated 1 August 1980 to private respondents Farrales and Mamasig advising
both that their services as flight stewardesses would be terminated "effective
1 September 1980, conformably to clause 6 (b) of the employment
agreement [they had) executed with [PIA]." 2
On 9 September 1980, private respondents Farrales and Mamasig jointly
instituted a complaint, docketed as NCR-STF-95151-80, for illegal dismissal
and non-payment of company benefits and bonuses, against PIA with the
then Ministry of Labor and Employment ("MOLE"). After several unfruitful
attempts at conciliation, the MOLE hearing officer Atty. Jose M. Pascual
ordered the parties to submit their position papers and evidence supporting
their respective positions. The PIA submitted its position paper, 3 but no
evidence, and there claimed that both private respondents were habitual
absentees; that both were in the habit of bringing in from abroad sizeable
quantities of "personal effects"; and that PIA personnel at the Manila
International Airport had been discreetly warned by customs officials to
advise private respondents to discontinue that practice. PIA further claimed
that the services of both private respondents were terminated pursuant to the
provisions of the employment contract.
In his Order dated 22 January 1981, Regional Director Francisco L. Estrella
ordered the reinstatement of private respondents with full backwages or, in
the alternative, the payment to them of the amounts equivalent to their
salaries for the remainder of the fixed three-year period of their employment
contracts; the payment to private respondent Mamasig of an amount
equivalent to the value of a round trip ticket Manila-USA Manila; and payment
of a bonus to each of the private respondents equivalent to their one-month
salary. 4 The Order stated that private respondents had attained the status of
regular employees after they had rendered more than a year of continued
service; that the stipulation limiting the period of the employment contract to
three (3) years was null and void as violative of the provisions of the Labor
MJRTB
Code and its implementing rules and regulations on regular and casual
employment; and that the dismissal, having been carried out without the
requisite clearance from the MOLE, was illegal and entitled private
respondents to reinstatement with full backwages.
On appeal, in an Order dated 12 August 1982, Hon. Vicente Leogardo, Jr.,
Deputy Minister, MOLE, adopted the findings of fact and conclusions of the
Regional Director and affirmed the latter's award save for the portion thereof
giving PIA the option, in lieu of reinstatement, "to pay each of the
complainants [private respondents] their salaries corresponding to the
unexpired portion of the contract[s] [of employment] . . .". 5
In the instant Petition for Certiorari, petitioner PIA assails the award of the
Regional Director and the Order of the Deputy Minister as having been
rendered without jurisdiction; for having been rendered without support in the
evidence of record since, allegedly, no hearing was conducted by the hearing
officer, Atty. Jose M. Pascual; and for having been issued in disregard and in
violation of petitioner's rights under the employment contracts with private
respondents.
1. Petitioner's first contention is that the Regional Director, MOLE, had no
jurisdiction over the subject matter of the complaint initiated by private
respondents for illegal dismissal, jurisdiction over the same being lodged in
the Arbitration Branch of the National Labor Relations Commission ("NLRC")
It appears to us beyond dispute, however, that both at the time the complaint
was initiated in September 1980 and at the time the Orders assailed were
rendered on January 1981 (by Regional Director Francisco L. Estrella) and
August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional
Director had jurisdiction over termination cases.
Art. 278 of the Labor Code, as it then existed, forbade the termination of the
services of employees with at least one (1) year of service without prior
clearance from the Department of Labor and Employment:
during the last two (2) years, whether such service is

continuous or broken, without prior written authority issued in
accordance with such rules and regulations as the Secretary
may promulgate . . . (emphasis supplied)
Rule XIV, Book No. 5 of the Rules and Regulations Implementing the
Labor Code, made clear that in case of a termination without the
necessary clearance, the Regional Director was authorized to order
the reinstatement of the employee concerned and the payment of
backwages; necessarily, therefore, the Regional Director must have
been given jurisdiction over such termination cases:
Sec. 2. Shutdown or dismissal without clearance. Any
shutdown or dismissal without prior clearance shall be
conclusively presumed to be termination of employment
without a just cause. The Regional Director shall, in such
case order the immediate reinstatement of the employee and
the payment of his wages from the time of the shutdown or
dismissal until the time of reinstatement. (emphasis
supplied)
Policy Instruction No. 14 issued by the Secretary of Labor, dated 23
April 1976, was similarly very explicit about the jurisdiction of the
Regional Director over termination of employment cases:
Under PD 850, termination cases with or without CBA
are now placed under the original jurisdiction of the Regional
Director. Preventive suspension cases, now made
cognizable for the first time, are also placed under the
Regional Director. Before PD 850, termination cases where
there was a CBA were under the jurisdiction of the grievance
machinery and voluntary arbitration, while termination cases
where there was no CBA were under the jurisdiction of the
Conciliation Section.
Art. 278. Miscellaneous Provisions . . .

(b) With or without a collective agreement, no employer may
shut down his establishment or dismiss or terminate the
employment of employees with at least one year of service
In more details, the major innovations introduced by PD 850

and its implementing rules and regulations with respect to
termination and preventive suspension cases are:
MJRTB
1. The Regional Director is now required to rule on every

application for clearance, whether there is opposition or not,
within ten days from receipt thereof.
3. In its third contention, petitioner PIA invokes paragraphs 5 and 6 of its

contract of employment with private respondents Farrales and Mamasig,
arguing that its relationship with them was governed by the provisions of its
contract rather than by the general provisions of the Labor Code. 9
xxx xxx xxx

(Emphasis supplied)
2. The second contention of petitioner PIA is that, even if the Regional
Director had jurisdiction, still his order was null and void because it had been
issued in violation of petitioner's right to procedural due process . 6 This
claim, however, cannot be given serious consideration. Petitioner was
ordered by the Regional Director to submit not only its position paper but also
such evidence in its favor as it might have. Petitioner opted to rely solely
upon its position paper; we must assume it had no evidence to sustain its
assertions. Thus, even if no formal or oral hearing was conducted, petitioner
had ample opportunity to explain its side. Moreover, petitioner PIA was able
to appeal his case to the Ministry of Labor and Employment. 7
There is another reason why petitioner's claim of denial of due process must
be rejected. At the time the complaint was filed by private respondents on 21
September 1980 and at the time the Regional Director issued his questioned
order on 22 January 1981, applicable regulation, as noted above, specified
that a "dismissal without prior clearance shall be conclusively presumed to
be termination of employment without a cause", and the Regional Director
was required in such case to" order the immediate reinstatement of the
employee and the payment of his wages from the time of the shutdown or
dismiss until . . . reinstatement." In other words, under the then applicable
rule, the Regional Director did not even have to require submission of
position papers by the parties in view of the conclusive (juris et de jure)
character of the presumption created by such applicable law and regulation.
In Cebu Institute of Technology v. Minister of Labor and Employment, 8 the
Court pointed out that "under Rule 14, Section 2, of the Implementing Rules
and Regulations, the termination of [an employee] which was without
previous clearance from the Ministry of Labor is conclusively presumed to be
without [just] cause . . . [a presumption which] cannot be overturned by any
contrary proof however strong."
Paragraph 5 of that contract set a term of three (3) years for that relationship,
extendible by agreement between the parties; while paragraph 6 provided
that, notwithstanding any other provision in the Contract, PIA had the right to
terminate the employment agreement at any time by giving one-month's
notice to the employee or, in lieu of such notice, one-months salary.
A contract freely entered into should, of course, be respected, as PIA argues,
since a contract is the law between the parties. 10 The principle of party
autonomy in contracts is not, however, an absolute principle. The rule in
Article 1306, of our Civil Code is that the contracting parties may establish
such stipulations as they may deem convenient, "provided they are not
contrary to law, morals, good customs, public order or public policy." Thus,
counter-balancing the principle of autonomy of contracting parties is the
equally general rule that provisions of applicable law, especially provisions
relating to matters affected with public policy, are deemed written into the
contract. 11 Put a little differently, the governing principle is that parties may
not contract away applicable provisions of law especially peremptory
provisions dealing with matters heavily impressed with public interest. The
law relating to labor and employment is clearly such an area and parties are
not at liberty to insulate themselves and their relationships from the impact of
labor laws and regulations by simply contracting with each other. It is thus
necessary to appraise the contractual provisions invoked by petitioner PIA in
terms of their consistency with applicable Philippine law and regulations.
As noted earlier, both the Labor Arbiter and the Deputy Minister, MOLE, in
effect held that paragraph 5 of that employment contract was inconsistent
with Articles 280 and 281 of the Labor Code as they existed at the time the
contract of employment was entered into, and hence refused to give effect to
said paragraph 5. These Articles read as follows:
Art. 280. Security of Tenure. In cases of regular
employment, the employer shall not terminate the services of
an employee except for a just cause or when authorized by
this Title An employee who is unjustly dismissed from work
MJRTB
shall be entitled to reinstatement without loss of seniority

rights and to his backwages computed from the time his
compensation was withheld from him up to the time his
reinstatement.
Art. 281. Regular and Casual Employment. The provisions of
written agreement to the contrary notwithstanding and
regardless of the oral agreements of the parties, an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services
to be performed is seasonal in nature and the employment is
for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: provided, that, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered as regular employee with respect to the activity
in which he is employed and his employment shall continue
while such actually exists. (Emphasis supplied)
In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., 12 the Court had
occasion to examine in detail the question of whether employment for a fixed
term has been outlawed under the above quoted provisions of the Labor
Code. After an extensive examination of the history and development of
Articles 280 and 281, the Court reached the conclusion that a contract
providing for employment with a fixed period was not necessarily unlawful:
There can of course be no quarrel with the proposition
that where from the circumstances it is apparent that periods
have been imposed to preclude acquisition of tenurial
security by the employee, they should be struck down or
disregarded as contrary to public policy, morals, etc. But
where no such intent to circumvent the law is shown, or
stated otherwise, where the reason for the law does not exist
e.g. where it is indeed the employee himself who insists
upon a period or where the nature of the engagement is
such that, without being seasonal or for a specific project, a
definite date of termination is a sine qua non would an
agreement fixing a period be essentially evil or illicit,
therefore anathema Would such an agreement come within
the scope of Article 280 which admittedly was enacted "to
prevent the circumvention of the right of the employee to be
secured in . . . (his) employment?"
As it is evident from even only the three examples already
given that Article 280 of the Labor Code, under a narrow and
literal interpretation, not only fails to exhaust the gamut of
employment contracts to which the lack of a fixed period
would be an anomaly, but would also appear to restrict,
without reasonable distinctions, the right of an employee to
freely stipulate with his employer the duration of his
engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must
be given reasonable interpretation, to preclude absurdity in
its application. Outlawing the whole concept of term
employment and subverting to boot the principle of freedom
of contract to remedy the evil of employers" using it as a
means to prevent their employees from obtaining security of
tenure is like cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the head.
xxx xxx xxx
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present Article
280 of the Labor Code clearly appears to have been, as
already observed, to prevent circumvention of the
employee's right to be secure in his tenure, the clause in
said article indiscriminately and completely ruling out all
written or oral agreements conflicting with the concept of
regular employment as defined therein should be construed
to refer to the substantive evil that the Code itself has
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singled out: agreements entered into precisely to circumvent

security of tenure. It should have no application to instances
where a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any force,
duress or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his
consent, or where it satisfactorily appears that the employer
and employee dealt with each other on more or less equal
terms with no moral dominance whatever being exercised by
the former over the latter. Unless thus limited in its purview,
the law would be made to apply to purposes other than
those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt to lead to
absurd and unintended consequences. (emphasis supplied)
It is apparent from Brent School that the critical consideration is the
presence or absence of a substantial indication that the period
specified in an employment agreement was designed to circumvent
the security of tenure of regular employees which is provided for in
Articles 280 and 281 of the Labor Code. This indication must
ordinarily rest upon some aspect of the agreement other than the
mere specification of a fixed term of the ernployment agreement, or
upon evidence aliunde of the intent to evade.
Examining the provisions of paragraphs 5 and 6 of the employment
agreement between petitioner PIA and private respondents, we consider that
those provisions must be read together and when so read, the fixed period of
three (3) years specified in paragraph 5 will be seen to have been effectively
neutralized by the provisions of paragraph 6 of that agreement. Paragraph 6
in effect took back from the employee the fixed three (3)-year period
ostensibly granted by paragraph 5 by rendering such period in effect a
facultative one at the option of the employer PIA. For petitioner PIA claims to
be authorized to shorten that term, at any time and for any cause satisfactory
to itself, to a one-month period, or even less by simply paying the employee
a month's salary. Because the net effect of paragraphs 5 and 6 of the
agreement here involved is to render the employment of private respondents
Farrales and Mamasig basically employment at the pleasure of petitioner
PIA, the Court considers that paragraphs 5 and 6 were intended to prevent
any security of tenure from accruing in favor of private respondents even
during the limited period of three (3) years, 13 and thus to escape completely
the thrust of Articles 280 and 281 of the Labor Code.
Petitioner PIA cannot take refuge in paragraph 10 of its employment
agreement which specifies, firstly, the law of Pakistan as the applicable law
of the agreement and, secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement "only [in] courts of Karachi
Pakistan". The first clause of paragraph 10 cannot be invoked to prevent the
application of Philippine labor laws and regulations to the subject matter of
this case, i.e., the employer-employee relationship between petitioner PIA
and private respondents. We have already pointed out that the relationship is
much affected with public interest and that the otherwise applicable
Philippine laws and regulations cannot be rendered illusory by the parties
agreeing upon some other law to govern their relationship. Neither may
petitioner invoke the second clause of paragraph 10, specifying the Karachi
courts as the sole venue for the settlement of dispute; between the
contracting parties. Even a cursory scrutiny of the relevant circumstances of
this case will show the multiple and substantive contacts between Philippine
law and Philippine courts, on the one hand, and the relationship between the
parties, upon the other: the contract was not only executed in the Philippines,
it was also performed here, at least partially; private respondents are
Philippine citizens and respondents, while petitioner, although a foreign
corporation, is licensed to do business (and actually doing business) and
hence resident in the Philippines; lastly, private respondents were based in
the Philippines in between their assigned flights to the Middle East and
Europe. All the above contacts point to the Philippine courts and
administrative agencies as a proper forum for the resolution of contractual
disputes between the parties. Under these circumstances, paragraph 10 of
the employment agreement cannot be given effect so as to oust Philippine
agencies and courts of the jurisdiction vested upon them by Philippine law.
Finally, and in any event, the petitioner PIA did not undertake to plead and
prove the contents of Pakistan law on the matter; it must therefore be
presumed that the applicable provisions of the law of Pakistan are the same
as the applicable provisions of Philippine law. 14
We conclude that private respondents Farrales and Mamasig were illegally
dismissed and that public respondent Deputy Minister, MOLE, had not
committed any grave abuse of discretion nor any act without or in excess of
jurisdiction in ordering their reinstatement with backwages. Private
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respondents are entitled to three (3) years backwages without qualification or

deduction. Should their reinstatement to their former or other substantially
equivalent positions not be feasible in view of the length of time which has
gone by since their services were unlawfully terminated, petitioner should be
required to pay separation pay to private respondents amounting to one (1)
month's salary for every year of service rendered by them, including the three
(3) years service putatively rendered.
TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositorsappellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
BENGZON, J.P., J.:
ACCORDINGLY, the Petition for certiorari is hereby DISMISSED for lack of

merit, and the Order dated 12 August 1982 of public respondent is hereby
AFFIRMED, except that (1) private respondents are entitled to three (3)
years backwages, without deduction or qualification; and (2) should
reinstatement of private respondents to their former positions or to
substantially equivalent positions not be feasible, then petitioner shall, in lieu
thereof, pay to private respondents separation pay amounting to one (1)month's salary for every year of service actually rendered by them and for the
three (3) years putative service by private respondents. The Temporary
Restraining Order issued on 13 September 1982 is hereby LIFTED. Costs
against petitioner.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. L-23678
June 6, 1967
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.
MJRTB
The People's Bank and Trust Company, as executor of the will, paid all the
bequests therein including the amount of $240,000.00 in the form of shares
of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts
totalling P40,000.00 each in satisfaction of their respective legacies, or a total
of P120,000.00, which it released from time to time according as the lower
court approved and allowed the various motions or petitions filed by the latter
three requesting partial advances on account of their respective legacies.
On January 8, 1964, preparatory to closing its administration, the executor
submitted and filed its "Executor's Final Account, Report of Administration
and Project of Partition" wherein it reported, inter alia, the satisfaction of the
legacy of Mary E. Mallen by the delivery to her of shares of stock amounting
to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis in the amount of P40,000.00 each or a total of
P120,000.00. In the project of partition, the executor pursuant to the
"Twelfth" clause of the testator's Last Will and Testament divided the
residuary estate into seven equal portions for the benefit of the testator's
seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their
respective oppositions to the project of partition on the ground that they were
deprived of their legitimes as illegitimate children and, therefore, compulsory
heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of
service of which is evidenced by the registry receipt submitted on April 27,
1964 by the executor.1
After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order overruling the
oppositions and approving the executor's final account, report and
administration and project of partition. Relying upon Art. 16 of the Civil Code,
it applied the national law of the decedent, which in this case is Texas law,
which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the lower
court on June 11, 1964, oppositors-appellants appealed to this Court to raise
the issue of which law must apply Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the
doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L16749, January 31, 1963. Said doctrine is usually pertinent where the
decedent is a national of one country, and a domicile of another. In the
present case, it is not disputed that the decedent was both a national of
Texas and a domicile thereof at the time of his death. 2 So that even assuming
Texas has a conflict of law rule providing that the domiciliary system (law of
the domicile) should govern, the same would not result in a reference back
(renvoi) to Philippine law, but would still refer to Texas law. Nonetheless, if
Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling for
the application of the law of the place where the properties are situated,
renvoi would arise, since the properties here involved are found in the
Philippines. In the absence, however, of proof as to the conflict of law rule of
Texas, it should not be presumed different from ours. 3 Appellants' position is
therefore not rested on the doctrine of renvoi. As stated, they never invoked
nor even mentioned it in their arguments. Rather, they argue that their case
falls under the circumstances mentioned in the third paragraph of Article 17
in relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions, with
regard to four items: (a) the order of succession; (b) the amount of
successional rights; (e) the intrinsic validity of the provisions of the will; and
(d) the capacity to succeed. They provide that
ART. 16. Real property as well as personal property is subject to the
law of the country where it is situated.
However, intestate and testamentary successions, both with respect
to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is
under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation
of the decedent.
MJRTB
Appellants would however counter that Art. 17, paragraph three, of the Civil
Code, stating that
Prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted.
This is not correct. Precisely, Congress deleted the phrase, "notwithstanding
the provisions of this and the next preceding article" when they incorporated
Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while
reproducing without substantial change the second paragraph of Art. 10 of
the old Civil Code as Art. 16 in the new. It must have been their purpose to
make the second paragraph of Art. 16 a specific provision in itself which must
be applied in testate and intestate succession. As further indication of this
legislative intent, Congress added a new provision, under Art. 1039, which
decrees that capacity to succeed is to be governed by the national law of the
decedent.
It is therefore evident that whatever public policy or good customs may be
involved in our System of legitimes, Congress has not intended to extend the
same to the succession of foreign nationals. For it has specifically chosen to
leave, inter alia, the amount of successional rights, to the decedent's national
law. Specific provisions must prevail over general ones.
Appellants would also point out that the decedent executed two wills one
to govern his Texas estate and the other his Philippine estate arguing from
this that he intended Philippine law to govern his Philippine estate. Assuming
that such was the decedent's intention in executing a separate Philippine will,
it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil.
867, 870, a provision in a foreigner's will to the effect that his properties shall
be distributed in accordance with Philippine law and not with his national law,
is illegal and void, for his national law cannot be ignored in regard to those
matters that Article 10 now Article 16 of the Civil Code states said
national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no forced
heirs or legitimes. Accordingly, since the intrinsic validity of the provision of
the will and the amount of successional rights are to be determined under
Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with
costs against appellants.
So ordered.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 104235 November 18, 1993
SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA
ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES,
INC., respondents.
Sycip, Salazar, Hernandez, Gatmaitan for petitioners.
Quisumbing, Torres & Evangelista for private-respondent.
NOCON, J.:
Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate them in
TWA Flight 007 departing from New York to Los Angeles on June 6, 1984
despite possession of confirmed tickets, petitioners filed an action for
damages before the Regional Trial Court of Makati, Metro Manila, Branch
145. Advocating petitioner's position, the trial court categorically ruled that
respondent TransWorld Airlines (TWA) breached its contract of carriage with
petitioners and that said breach was "characterized by bad faith." On appeal,
MJRTB
however, the appellate court found that while there was a breach of contract
on respondent TWA's part, there was neither fraud nor bad faith because
under the Code of Federal Regulations by the Civil Aeronautics Board of the
United States of America it is allowed to overbook flights.
of petitioners in its decision 1 dated January 9, 1989 the dispositive portion of

which states as follows:
WHEREFORE, judgment is hereby rendered ordering the
defendant to pay plaintiffs the following amounts:
The factual backdrop of the case is as follows:

Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their
daughter, Liana Zalamea, purchased three (3) airline tickets from the Manila
agent of respondent TransWorld Airlines, Inc. for a flight to New York to Los
Angeles on June 6, 1984. The tickets of petitioners-spouses were purchased
at a discount of 75% while that of their daughter was a full fare ticket. All
three tickets represented confirmed reservations.
While in New York, on June 4, 1984, petitioners received notice of the
reconfirmation of their reservations for said flight. On the appointed date,
however, petitioners checked in at 10:00 a.m., an hour earlier than the
scheduled flight at 11:00 a.m. but were placed on the wait-list because the
number of passengers who had checked in before them had already taken all
the seats available on the flight. Liana Zalamea appeared as the No. 13 on
the wait-list while the two other Zalameas were listed as "No. 34, showing a
party of two." Out of the 42 names on the wait list, the first 22 names were
eventually allowed to board the flight to Los Angeles, including petitioner
Cesar Zalamea. The two others, on the other hand, at No. 34, being ranked
lower than 22, were not able to fly. As it were, those holding full-fare tickets
were given first priority among the wait-listed passengers. Mr. Zalamea, who
was holding the full-fare ticket of his daughter, was allowed to board the
plane; while his wife and daughter, who presented the discounted tickets
were denied boarding. According to Mr. Zalamea, it was only later when he
discovered the he was holding his daughter's full-fare ticket.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter,
could not be accommodated because it was also fully booked. Thus, they
were constrained to book in another flight and purchased two tickets from
American Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners filed an action for damages
based on breach of contract of air carriage before the Regional Trial Court of
Makati, Metro Manila, Branch 145. As aforesaid, the lower court ruled in favor
(1) US $918.00, or its peso equivalent at the time of payment

representing the price of the tickets bought by Suthira and
Liana Zalamea from American Airlines, to enable them to fly
to Los Angeles from New York City;
(2) US $159.49, or its peso equivalent at the time of
payment, representing the price of Suthira Zalamea's ticket
for TWA Flight 007;
(3) Eight Thousand Nine Hundred Thirty-Four Pesos and
Fifty Centavos (P8,934.50, Philippine Currency, representing
the price of Liana Zalamea's ticket for TWA Flight 007,
(4) Two Hundred Fifty Thousand Pesos (P250,000.00),
Philippine Currency, as moral damages for all the plaintiffs'
(5) One Hundred Thousand Pesos (P100,000.00), Philippine
Currency, as and for attorney's fees; and
(6) The costs of suit.
SO ORDERED. 2
On appeal, the respondent Court of Appeals held that moral damages are
recoverable in a damage suit predicated upon a breach of contract of
carriage only where there is fraud or bad faith. Since it is a matter of record
that overbooking of flights is a common and accepted practice of airlines in
the United States and is specifically allowed under the Code of Federal
Regulations by the Civil Aeronautics Board, no fraud nor bad faith could be
imputed on respondent TransWorld Airlines.
Moreover, while respondent TWA was remiss in not informing petitioners that
the flight was overbooked and that even a person with a confirmed
MJRTB
reservation may be denied accommodation on an overbooked flight,

nevertheless it ruled that such omission or negligence cannot under the
circumstances be considered to be so gross as to amount to bad faith.
Finally, it also held that there was no bad faith in placing petitioners in the
wait-list along with forty-eight (48) other passengers where full-fare first class
tickets were given priority over discounted tickets.
The dispositive portion of the decision of respondent Court of Appeals 3 dated
October 25, 1991 states as follows:
WHEREFORE, in view of all the foregoing, the decision
under review is hereby MODIFIED in that the award of moral
and exemplary damages to the plaintiffs is eliminated, and
the defendant-appellant is hereby ordered to pay the plaintiff
the following amounts:
(1) US$159.49, or its peso equivalent at the time of the
payment, representing the price of Suthira Zalamea's ticket
for TWA Flight 007;
(2) US$159.49, or its peso equivalent at the time of the
payment, representing the price of Cesar Zalamea's ticket
for TWA Flight 007;
(3) P50,000.00 as and for attorney's fees.
(4) The costs of suit.
. . . IN HOLDING THAT THERE WAS NO FRAUD OR BAD

FAITH ON THE PART OF RESPONDENT TWA BECAUSE
IT HAS A RIGHT TO OVERBOOK FLIGHTS.
II.
. . . IN ELIMINATING THE AWARD OF EXEMPLARY
DAMAGES.
III.
. . . IN NOT ORDERING THE REFUND OF LIANA
ZALAMEA'S TWA TICKET AND PAYMENT FOR THE
AMERICAN AIRLINES
TICKETS. 5
That there was fraud or bad faith on the part of respondent airline when it did
not allow petitioners to board their flight for Los Angeles in spite of confirmed
tickets cannot be disputed. The U.S. law or regulation allegedly authorizing
overbooking has never been proved. Foreign laws do not prove themselves
nor can the courts take judicial notice of them. Like any other fact, they must
be alleged and proved. 6 Written law may be evidenced by an official
publication thereof or by a copy attested by the officer having the legal
custody of the record, or by his deputy, and accompanied with a certificate
that such officer has custody. The certificate may be made by a secretary of
an embassy or legation, consul general, consul, vice-consul, or consular
agent or by any officer in the foreign service of the Philippines stationed in
the foreign country in which the record is kept, and authenticated by the seal
of his office. 7
SO ORDERED. 4
Not satisfied with the decision, petitioners raised the case on petition for
review on certiorari and alleged the following errors committed by the
respondent Court of Appeals, to wit:
I.
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its
customer service agent, in her deposition dated January 27, 1986 that the
Code of Federal Regulations of the Civil Aeronautics Board allows
overbooking. Aside from said statement, no official publication of said code
was presented as evidence. Thus, respondent court's finding that
overbooking is specifically allowed by the US Code of Federal Regulations
has no basis in fact.
MJRTB
Even if the claimed U.S. Code of Federal Regulations does exist, the same is
not applicable to the case at bar in accordance with the principle of lex loci
contractus which require that the law of the place where the airline ticket was
issued should be applied by the court where the passengers are residents
and nationals of the forum and the ticket is issued in such State by the
defendant airline. 8 Since the tickets were sold and issued in the Philippines,
the applicable law in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith,
entitling the passengers concerned to an award of moral damages. In Alitalia
Airways v. Court of Appeals, 9 where passengers with confirmed bookings
were refused carriage on the last minute, this Court held that when an airline
issues a ticket to a passenger confirmed on a particular flight, on a certain
date, a contract of carriage arises, and the passenger has every right to
expect that he would fly on that flight and on that date. If he does not, then
the carrier opens itself to a suit for breach of contract of carriage. Where an
airline had deliberately overbooked, it took the risk of having to deprive some
passengers of their seats in case all of them would show up for the check in.
For the indignity and inconvenience of being refused a confirmed seat on the
last minute, said passenger is entitled to an award of moral damages.
A contract to transport passengers is quite different in kind and degree from

any other contractual relation. So ruled this Court in Zulueta v. Pan American
World Airways, Inc. 12 This is so, for a contract of carriage generates a
relation attended with public duty a duty to provide public service and
convenience to its passengers which must be paramount to self-interest or
enrichment. Thus, it was also held that the switch of planes from Lockheed
1011 to a smaller Boeing 707 because there were only 138 confirmed
economy class passengers who could very well be accommodated in the
smaller planes, thereby sacrificing the comfort of its first class passengers for
the sake of economy, amounts to bad faith. Such inattention and lack of care
for the interest of its passengers who are entitled to its utmost consideration
entitles the passenger to an award of moral damages. 13
Even on the assumption that overbooking is allowed, respondent TWA is still
guilty of bad faith in not informing its passengers beforehand that it could
breach the contract of carriage even if they have confirmed tickets if there
was overbooking. Respondent TWA should have incorporated stipulations on
overbooking on the tickets issued or to properly inform its passengers about
these policies so that the latter would be prepared for such eventuality or
would have the choice to ride with another airline.
Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where private

respondent was not allowed to board the plane because her seat had already
been given to another passenger even before the allowable period for
passengers to check in had lapsed despite the fact that she had a confirmed
ticket and she had arrived on time, this Court held that petitioner airline acted
in bad faith in violating private respondent's rights under their contract of
carriage and is therefore liable for the injuries she has sustained as a result.
Respondent TWA contends that Exhibit I, the detached flight coupon upon
which were written the name of the passenger and the points of origin and
destination, contained such a notice. An examination of Exhibit I does not
bear this out. At any rate, said exhibit was not offered for the purpose of
showing the existence of a notice of overbooking but to show that Exhibit I
was used for flight 007 in first class of June 11, 1984 from New York to Los
Angeles.
In fact, existing jurisprudence abounds with rulings where the breach of

contract of carriage amounts to bad faith. In Pan American World Airways,
Inc. v. Intermediate Appellate Court, 11 where a would-be passenger had the
necessary ticket, baggage claim and clearance from immigration all clearly
and unmistakably showing that she was, in fact, included in the passenger
manifest of said flight, and yet was denied accommodation in said flight, this
Court did not hesitate to affirm the lower court's finding awarding her
damages.
Moreover, respondent TWA was also guilty of not informing its passengers of
its alleged policy of giving less priority to discounted tickets. While the
petitioners had checked in at the same time, and held confirmed tickets, yet,
only one of them was allowed to board the plane ten minutes before
departure time because the full-fare ticket he was holding was given priority
over discounted tickets. The other two petitioners were left behind.
It is respondent TWA's position that the practice of overbooking and the

airline system of boarding priorities are reasonable policies, which when
implemented do not amount to bad faith. But the issue raised in this case is
MJRTB
not the reasonableness of said policies but whether or not said policies were
incorporated or deemed written on petitioners' contracts of carriage.
Respondent TWA failed to show that there are provisions to that effect.
Neither did it present any argument of substance to show that petitioners
were duly apprised of the overbooked condition of the flight or that there is a
hierarchy of boarding priorities in booking passengers. It is evident that
petitioners had the right to rely upon the assurance of respondent TWA, thru
its agent in Manila, then in New York, that their tickets represented confirmed
seats without any qualification. The failure of respondent TWA to so inform
them when it could easily have done so thereby enabling respondent to hold
on to them as passengers up to the last minute amounts to bad faith.
Evidently, respondent TWA placed its self-interest over the rights of
petitioners under their contracts of carriage. Such conscious disregard of
petitioners' rights makes respondent TWA liable for moral damages. To deter
breach of contracts by respondent TWA in similar fashion in the future, we
adjudge respondent TWA liable for exemplary damages, as well.
Petitioners also assail the respondent court's decision not to require the
refund of Liana Zalamea's ticket because the ticket was used by her father.
On this score, we uphold the respondent court. Petitioners had not shown
with certainty that the act of respondent TWA in allowing Mr. Zalamea to use
the ticket of her daughter was due to inadvertence or deliberate act.
Petitioners had also failed to establish that they did not accede to said
agreement. The logical conclusion, therefore, is that both petitioners and
respondent TWA agreed, albeit impliedly, to the course of action taken.
The respondent court erred, however, in not ordering the refund of the
American Airlines tickets purchased and used by petitioners Suthira and
Liana. The evidence shows that petitioners Suthira and Liana were
constrained to take the American Airlines flight to Los Angeles not because
they "opted not to use their TWA tickets on another TWA flight" but because
respondent TWA could not accommodate them either on the next TWA flight
which was also fully booked. 14 The purchase of the American Airlines tickets
by petitioners Suthira and Liana was the consequence of respondent TWA's
unjustifiable breach of its contracts of carriage with petitioners. In accordance
with Article 2201, New Civil Code, respondent TWA should, therefore, be
responsible for all damages which may be reasonably attributed to the nonperformance of its obligation. In the previously cited case of Alitalia Airways
v. Court of Appeals, 15 this Court explicitly held that a passenger is entitled to
be reimbursed for the cost of the tickets he had to buy for a flight to another
airline. Thus, instead of simply being refunded for the cost of the unused
TWA tickets, petitioners should be awarded the actual cost of their flight from
New York to Los Angeles. On this score, we differ from the trial court's ruling
which ordered not only the reimbursement of the American Airlines tickets but
also the refund of the unused TWA tickets. To require both prestations would
have enabled petitioners to fly from New York to Los Angeles without any
fare being paid.
The award to petitioners of attorney's fees is also justified under Article
2208(2) of the Civil Code which allows recovery when the defendant's act or
omission has compelled plaintiff to litigate or to incur expenses to protect his
interest. However, the award for moral damages and exemplary damages by
the trial court is excessive in the light of the fact that only Suthira and Liana
Zalamea were actually "bumped off." An award of P50,000.00 moral
damages and another P50,000.00 exemplary damages would suffice under
the circumstances obtaining in the instant case.
WHEREFORE, the petition is hereby GRANTED and the decision of the
respondent Court of Appeals is hereby MODIFIED to the extent of adjudging
respondent TransWorld Airlines to pay damages to petitioners in the following
amounts, to wit:
(1) US$918.00 or its peso equivalent at the time of payment representing the
price of the tickets bought by Suthira and Liana Zalamea from American
Airlines, to enable them to fly to Los Angeles from New York City;
(2) P50,000.00 as moral damages;
(3) P50,000.00 as exemplary damages;
(4) P50,000.00 as attorney's fees; and
(5) Costs of suit.
SO ORDERED.
MJRTB
The assailed Order denied reconsideration of the above-quoted

Decision.
The Facts
THIRD DIVISION
[G.R. No. 138322. October 2, 2001]
GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, vs.
REDERICK A. RECIO, respondent.
DECISION
PANGANIBAN, J.:
A divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided such decree is valid according to the national law of the
foreigner. However, the divorce decree and the governing personal law of the
alien spouse who obtained the divorce must be proven. Our courts do not
take judicial notice of foreign laws and judgments; hence, like any other facts,
both the divorce decree and the national law of the alien must be alleged and
proven according to our law on evidence.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court,
seeking to nullify the January 7, 1999 Decision [1] and the March 24, 1999
Order[2] of the Regional Trial Court of Cabanatuan City, Branch 28, in Civil
Case No. 3026AF. The assailed Decision disposed as follows:
WHEREFORE, this Court declares the marriage between Grace J. Garcia
and Rederick A. Recio solemnized on January 12, 1994 at Cabanatuan City
as dissolved and both parties can now remarry under existing and applicable
laws to any and/or both parties.[3]
Rederick A. Recio, a Filipino, was married to Editha Samson, an

Australian citizen, in Malabon, Rizal, on March 1, 1987. [4] They lived together
as husband and wife in Australia. On May 18, 1989, [5] a decree of divorce,
purportedly dissolving the marriage, was issued by an Australian family court.
On June 26, 1992, respondent became an Australian citizen, as shown
by a Certificate of Australian Citizenship issued by the Australian
government.[6] Petitioner -- a Filipina -- and respondent were married on
January 12, 1994 in Our Lady of Perpetual Help Church in Cabanatuan City.
[7]
In their application for a marriage license, respondent was declared as
single and Filipino.[8]
Starting October 22, 1995, petitioner and respondent lived separately
without prior judicial dissolution of their marriage. While the two were still in
Australia, their conjugal assets were divided on May 16, 1996, in accordance
with their Statutory Declarations secured in Australia. [9]
On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity
of Marriage[10] in the court a quo, on the ground of bigamy -- respondent
allegedly had a prior subsisting marriage at the time he married her on
January 12, 1994. She claimed that she learned of respondents marriage to
Editha Samson only in November, 1997.
In his Answer, respondent averred that, as far back as 1993, he had
revealed to petitioner his prior marriage and its subsequent dissolution.[11] He
contended that his first marriage to an Australian citizen had been validly
dissolved by a divorce decree obtained in Australia in 1989; [12] thus, he was
legally capacitated to marry petitioner in 1994.
On July 7, 1998 -- or about five years after the couples wedding and
while the suit for the declaration of nullity was pending -- respondent was
able to secure a divorce decree from a family court in Sydney, Australia
because the marriage ha[d] irretrievably broken down. [13]
Respondent prayed in his Answer that the Complaint be dismissed on
the ground that it stated no cause of action. [14] The Office of the Solicitor
General agreed with respondent.[15] The court marked and admitted the
documentary evidence of both parties. [16] After they submitted their respective
memoranda, the case was submitted for resolution. [17]
Thereafter, the trial court rendered the assailed Decision and Order.
Ruling of the Trial Court
The trial court declared the marriage dissolved on the ground that the
divorce issued in Australia was valid and recognized in the Philippines. It
deemed the marriage ended, but not on the basis of any defect in an
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essential element of the marriage; that is, respondents alleged lack of legal
capacity to remarry. Rather, it based its Decision on the divorce decree
obtained by respondent. The Australian divorce had ended the marriage;
thus, there was no more marital union to nullify or annul.
Hence, this Petition.[18]
Issues
Petitioner submits the following issues for our consideration:
1
The trial court gravely erred in finding that the divorce decree obtained in
Australia by the respondent ipso facto terminated his first marriage to Editha
Samson thereby capacitating him to contract a second marriage with the
petitioner.
2
The failure of the respondent, who is now a naturalized Australian, to present
a certificate of legal capacity to marry constitutes absence of a substantial
requisite voiding the petitioners marriage to the respondent
3
The trial court seriously erred in the application of Art. 26 of the Family Code
in this case.
4
The trial court patently and grievously erred in disregarding Arts. 11, 13, 21,
35, 40, 52 and 53 of the Family Code as the applicable provisions in this
case.
5
The trial court gravely erred in pronouncing that the divorce decree obtained
by the respondent in Australia ipso facto capacitated the parties to remarry,
without first securing a recognition of the judgment granting the divorce
decree before our courts.[19]
The Petition raises five issues, but for purposes of this Decision, we
shall concentrate on two pivotal ones: (1) whether the divorce between
respondent and Editha Samson was proven, and (2) whether respondent
was proven to be legally capacitated to marry petitioner. Because of our
ruling on these two, there is no more necessity to take up the rest.
The Courts Ruling
The Petition is partly meritorious.
First Issue:
Proving the Divorce Between Respondent and Editha Samson
Petitioner assails the trial courts recognition of the divorce between

respondent and Editha Samson. Citing Adong v. Cheong Seng Gee,
[20]
petitioner argues that the divorce decree, like any other foreign judgment,
may be given recognition in this jurisdiction only upon proof of the existence
of (1) the foreign law allowing absolute divorce and (2) the alleged divorce
decree itself.She adds that respondent miserably failed to establish these
elements.
Petitioner adds that, based on the first paragraph of Article 26 of the
Family Code, marriages solemnized abroad are governed by the law of the
place where they were celebrated (the lex loci celebrationis). In effect, the
Code requires the presentation of the foreign law to show the conformity of
the marriage in question to the legal requirements of the place where the
marriage was performed.
At the outset, we lay the following basic legal principles as the take-off
points for our discussion. Philippine law does not provide for absolute
divorce; hence, our courts cannot grant it. [21] A marriage between two
Filipinos cannot be dissolved even by a divorce obtained abroad, because of
Articles 15[22] and 17[23] of the Civil Code.[24] In mixed marriages involving a
Filipino and a foreigner, Article 26[25] of the Family Code allows the former to
contract a subsequent marriage in case the divorce is validly obtained
abroad by the alien spouse capacitating him or her to remarry. [26] A divorce
obtained abroad by a couple, who are both aliens, may be recognized in the
Philippines, provided it is consistent with their respective national laws. [27]
A comparison between marriage and divorce, as far as pleading and
proof are concerned, can be made. Van Dorn v. Romillo Jr. decrees that
aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national law.
[28]
Therefore, before a foreign divorce decree can be recognized by our
courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it. [29] Presentation
solely of the divorce decree is insufficient.
Divorce as a Question of Fact
Petitioner insists that before a divorce decree can be admitted in
evidence, it must first comply with the registration requirements under
Articles 11, 13 and 52 of the Family Code. These articles read as follows:
ART. 11. Where a marriage license is required, each of the contracting
parties shall file separately a sworn application for such license with the
proper local civil registrar which shall specify the following:
xxxxxxxxx
(5) If previously married, how, when and where the previous marriage was
dissolved or annulled;
xxxxxxxxx
ART. 13. In case either of the contracting parties has been previously
married, the applicant shall be required to
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ART. 13. In case either of the contracting parties has been previously
married, the applicant shall be required to furnish, instead of the birth or
baptismal certificate required in the last preceding article, the death
certificate of the deceased spouse or the judicial decree of the absolute
divorce, or the judicial decree of annulment or declaration of nullity of his or
her previous marriage. x x x.
ART. 52. The judgment of annulment or of absolute nullity of the marriage,
the partition and distribution of the properties of the spouses, and the delivery
of the childrens presumptive legitimes shall be recorded in the appropriate
civil registry and registries of property; otherwise, the same shall not affect
their persons.
Respondent, on the other hand, argues that the Australian divorce
decree is a public document -- a written official act of an Australian family
court. Therefore, it requires no further proof of its authenticity and due
execution.
Respondent is getting ahead of himself. Before a foreign judgment is
given presumptive evidentiary value, the document must first be presented
and admitted in evidence.[30] A divorce obtained abroad is proven by the
divorce decree itself. Indeed the best evidence of a judgment is the judgment
itself.[31] The decree purports to be a written act or record of an act of an
official body or tribunal of a foreign country.[32]
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or
document may be proven as a public or official record of a foreign country by
either (1) an official publication or (2) a copy thereof attested [33] by the officer
having legal custody of the document. If the record is not kept in the
Philippines, such copy must be (a) accompanied by a certificate issued by
the proper diplomatic or consular officer in the Philippine foreign service
stationed in the foreign country in which the record is kept and (b)
authenticated by the seal of his office. [34]
The divorce decree between respondent and Editha Samson appears to
be an authentic one issued by an Australian family court. [35] However,
appearance is not sufficient; compliance with the aforementioned rules on
evidence must be demonstrated.
Fortunately for respondents cause, when the divorce decree of May 18,
1989 was submitted in evidence, counsel for petitioner objected, not to its
admissibility, but only to the fact that it had not been registered in the Local
Civil Registry of Cabanatuan City.[36] The trial court ruled that it was
admissible, subject to petitioners qualification. [37] Hence, it was admitted in
evidence and accorded weight by the judge. Indeed, petitioners failure to
object properly rendered the divorce decree admissible as a written act of the
Family Court of Sydney, Australia.[38]
Compliance with the quoted articles (11, 13 and 52) of the Family Code
is not necessary; respondent was no longer bound by Philippine personal
laws after he acquired Australian citizenship in 1992. [39] Naturalization is the
legal act of adopting an alien and clothing him with the political and civil
rights belonging to a citizen. [40] Naturalized citizens, freed from the protective
cloak of their former states, don the attires of their adoptive countries. By
becoming an Australian, respondent severed his allegiance to the Philippines
and the vinculum juris that had tied him to Philippine personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian divorce law
falls upon petitioner, because she is the party challenging the validity of a
foreign judgment. He contends that petitioner was satisfied with the original
of the divorce decree and was cognizant of the marital laws of Australia,
because she had lived and worked in that country for quite a long
time. Besides, the Australian divorce law is allegedly known by Philippine
courts; thus, judges may take judicial notice of foreign laws in the exercise of
sound discretion.
We are not persuaded. The burden of proof lies with the party who
alleges the existence of a fact or thing necessary in the prosecution or
defense of an action.[41] In civil cases, plaintiffs have the burden of proving
the material allegations of the complaint when those are denied by the
answer; and defendants have the burden of proving the material allegations
in their answer when they introduce new matters. [42] Since the divorce was a
defense raised by respondent, the burden of proving the pertinent Australian
law validating it falls squarely upon him.
It is well-settled in our jurisdiction that our courts cannot take judicial
notice of foreign laws.[43] Like any other facts, they must be alleged and
proved. Australian marital laws are not among those matters that judges are
supposed to know by reason of their judicial function. [44] The power of judicial
notice must be exercised with caution, and every reasonable doubt upon the
subject should be resolved in the negative.
Second Issue: Respondents Legal Capacity to Remarry
Petitioner contends that, in view of the insufficient proof of the divorce,
respondent was legally incapacitated to marry her in 1994. Hence, she
concludes that their marriage was void ab initio.
Respondent replies that the Australian divorce decree, which was validly
admitted in evidence, adequately established his legal capacity to marry
under Australian law.
Respondents
contention
is
untenable. In
its
strict
legal
sense, divorce means the legal dissolution of a lawful union for a cause
arising after marriage. But divorces are of different types. The two basic ones
are (1) absolute divorce or a vinculo matrimonii and (2) limited divorce or a
mensa et thoro. The first kind terminates the marriage, while the second
suspends it and leaves the bond in full force. [45] There is no showing in the
case at bar which type of divorce was procured by respondent.
Respondent presented a decree nisi or an interlocutory decree -- a
conditional or provisional judgment of divorce. It is in effect the same as a
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separation from bed and board, although an absolute divorce may follow
after the lapse of the prescribed period during which no reconciliation is
effected.[46]
Even after the divorce becomes absolute, the court may under some
foreign statutes and practices, still restrict remarriage. Under some other
jurisdictions, remarriage may be limited by statute; thus, the guilty party in a
divorce which was granted on the ground of adultery may be prohibited from
marrying again. The court may allow a remarriage only after proof of good
behavior.[47]
On its face, the herein Australian divorce decree contains a restriction
that reads:
1. A party to a marriage who marries again before this decree
becomes absolute (unless the other party has died) commits the
offence of bigamy.[48]
This quotation bolsters our contention that the divorce obtained by
respondent may have been restricted. It did not absolutely establish his legal
capacity to remarry according to his national law. Hence, we find no basis for
the ruling of the trial court, which erroneously assumed that the Australian
divorce ipso facto restored respondents capacity to remarry despite the
paucity of evidence on this matter.
We also reject the claim of respondent that the divorce decree raises a
disputable presumption or presumptive evidence as to his civil status based
on Section 48, Rule 39[49] of the Rules of Court, for the simple reason that no
proof has been presented on the legal effects of the divorce decree obtained
under Australian laws.
Significance of the Certificate of Legal Capacity
Petitioner argues that the certificate of legal capacity required by Article
21 of the Family Code was not submitted together with the application for a
marriage license. According to her, its absence is proof that respondent did
not have legal capacity to remarry.
We clarify. To repeat, the legal capacity to contract marriage is
determined by the national law of the party concerned. The certificate
mentioned in Article 21 of the Family Code would have been sufficient to
establish the legal capacity of respondent, had he duly presented it in
court. A duly authenticated and admitted certificate is prima facie evidence of
legal capacity to marry on the part of the alien applicant for a marriage
license.[50]
As it is, however, there is absolutely no evidence that proves
respondents legal capacity to marry petitioner. A review of the records before
this Court shows that only the following exhibits were presented before the
lower court: (1) for petitioner: (a) Exhibit A Complaint; [51] (b) Exhibit B
Certificate of Marriage Between Rederick A. Recio (Filipino-Australian) and
Grace J. Garcia (Filipino) on January 12, 1994 in Cabanatuan City, Nueva
Ecija;[52] (c) Exhibit C Certificate of Marriage Between Rederick A. Recio

(Filipino) and Editha D. Samson (Australian) on March 1, 1987 in Malabon,
Metro Manila;[53] (d) Exhibit D Office of the City Registrar of Cabanatuan City
Certification that no information of annulment between Rederick A. Recio and
Editha D. Samson was in its records; [54] and (e) Exhibit E Certificate of
Australian Citizenship of Rederick A. Recio;[55] (2) for respondent: (a) Exhibit
1 -- Amended Answer;[56] (b) Exhibit 2 Family Law Act 1975 Decree Nisi of
Dissolution of Marriage in the Family Court of Australia; [57] (c) Exhibit 3
Certificate of Australian Citizenship of Rederick A. Recio; [58] (d) Exhibit 4
Decree Nisi of Dissolution of Marriage in the Family Court of Australia
Certificate;[59] and Exhibit 5 -- Statutory Declaration of the Legal Separation
Between Rederick A. Recio and Grace J. Garcia Recio since October 22,
1995.[60]
Based on the above records, we cannot conclude that respondent, who
was then a naturalized Australian citizen, was legally capacitated to marry
petitioner on January 12, 1994. We agree with petitioners contention that the
court a quo erred in finding that the divorce decree ipso facto clothed
respondent with the legal capacity to remarry without requiring him to adduce
sufficient evidence to show the Australian personal law governing his status;
or at the very least, to prove his legal capacity to contract the second
marriage.
Neither can we grant petitioners prayer to declare her marriage to
respondent null and void on the ground of bigamy. After all, it may turn out
that under Australian law, he was really capacitated to marry petitioner as a
direct result of the divorce decree. Hence, we believe that the most judicious
course is to remand this case to the trial court to receive evidence, if any,
which show petitioners legal capacity to marry petitioner. Failing in that, then
the court a quo may declare a nullity of the parties marriage on the ground of
bigamy, there being already in evidence two existing marriage certificates,
which were both obtained in the Philippines, one in Malabon, Metro Manila
dated March 1, 1987 and the other, in Cabanatuan City dated January 12,
1994.
WHEREFORE, in the interest of orderly procedure and substantial
justice, we REMAND the case to the court a quo for the purpose of receiving
evidence which conclusively show respondents legal capacity to marry
petitioner; and failing in that, of declaring the parties marriage void on the
ground of bigamy, as above discussed. No costs.
SO ORDERED.
MJRTB
of petitioner Asiavest Merchant Bankers (M) Berhad for the enforcement of

the money judgment of the High Court of Malaya in Kuala Lumpur against
private respondent Philippine National Construction Corporation.
The petitioner Asiavest Merchant Bankers (M) Berhad is a corporation
organized under the laws of Malaysia while private respondent Philippine
National Construction Corporation is a corporation duly incorporated and
existing under Philippine laws.
It appears that sometime in 1983, petitioner initiated a suit for collection
against private respondent, then known as Construction and Development
Corporation of the Philippines, before the High Court of Malaya in Kuala
Lumpur entitled Asiavest Merchant Bankers (M) Berhad v. Asiavest CDCP
Sdn. Bhd. and Construction and Development Corporation of the Philippines.
[3]
SECOND DIVISION
[G.R. No. 110263. July 20, 2001]
ASIAVEST MERCHANT BANKERS (M) BERHAD, petitioner, vs. COURT

OF APPEALS and PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION, respondents.
Petitioner sought to recover the indemnity of the performance bond it

had put up in favor of private respondent to guarantee the completion of the
Felda Project and the non-payment of the loan it extended to Asiavest-CDCP
Sdn. Bhd. for the completion of Paloh Hanai and Kuantan By-Pass Project.
On September 13, 1985, the High Court of Malaya (Commercial
Division) rendered judgment in favor of the petitioner and against the private
respondent which is also designated therein as the 2nd Defendant. The
judgment reads in full:
SUIT NO. C638 of 1983

Between
DECISION
Asiavest Merchant Bankers (M) Berhad Plaintiffs

DE LEON, JR., J.:
And
1. Asiavest-CDCP Sdn. Bhd.
Before us is a petition for review on certiorari of the Decision [1] of the

Court of Appeals dated May 19, 1993 in CA-G.R. CV No. 35871 affirming the
Decision[2] dated October 14, 1991 of the Regional Trial Court of Pasig, Metro
Manila, Branch 168 in Civil Case No. 56368 which dismissed the complaint
2. Construction & Development

Corporation of the Philippines Defendant
MJRTB
Asiavest Merchant Bankers (M) Berhad Plaintiffs

JUDGMENT
And
The 2nd Defendant having entered appearance herein and the Court having
under Order 14, rule 3 ordered that judgment as hereinafter provided be
entered for the Plaintiffs against the 2ndDefendant.
1. Asiavest-CDCP Sdn. Bhd.
IT IS THIS DAY ADJUDGED that the 2nd defendant do pay the Plaintiffs the
sum of $5,108,290.23 (Ringgit Five million one hundred and eight thousand
two hundred and ninety and Sen twenty-three) together with interest at the
rate of 12% per annum on: -
Corporation of the Philippines Defendants
(i) the sum of $2,586,866.91 from the 2nd day of March 1983 to the
date of payment; and
(ii) the sum of $2,521,423.32 from the 11th day of March 1983 to
the date of payment; and $350.00 (Ringgit Three Hundred and
Fifty) costs.
Dated the 13th day of September, 1985.
Senior Assistant Registrar,
High Court, Kuala Lumpur
This Judgment is filed by Messrs. Skrine & Co., 3rd Floor, Straits Trading
Building, No. 4, Leboh Pasar, Besar, Kuala Lumpur, Solicitors for the
Plaintiffs abovenamed. (VP/Ong/81194.7/83)[4]
On the same day, September 13, 1985, the High Court of Malaya issued
an Order directing the private respondent (also designated therein as the
2nd Defendant) to pay petitioner interest on the sums covered by the said
Judgment, thus:
SUIT NO. C638 OF 1983
2. Construction & Development
BEFORE THE SENIOR ASSISTANT REGISTRAR

CIK SUSILA S. PARAM
THIS 13th DAY OF SEPTEMBER, 1985 IN CHAMBERS
ORDER
Upon the application of Asiavest Merchant Bankers (M) Berhad, the Plaintiffs
in this action AND UPON READING the Summons in Chambers dated the
16th day of August, 1984 and the Affidavit of Lee Foong Mee affirmed on the
14th day of August 1984 both filed herein AND UPON HEARING Mr. T.
Thomas of Counsel for the Plaintiffs and Mr. Khaw Chay Tee of Counsel for
the 2nd Defendant abovenamed on the 26th day of December 1984 IT WAS
ORDERED that the Plaintiffs be at liberty to sign final judgment against the
2nd Defendant for the sum of $5,108.290.23 AND IT WAS ORDERED that
the 2nd Defendant do pay the Plaintiffs the costs of suit at $350.00 AND IT
WAS FURTHER ORDERED that the plaintiffs be at liberty to apply for
payment of interest AND upon the application of the Plaintiffs for payment of
interest coming on for hearing on the 1st day of August in the presence of Mr.
Palpanaban Devarajoo of Counsel for the Plaintiffs and Mr. Khaw Chay Tee
of Counsel for the 2nd Defendant above-named AND UPON HEARING
Counsel as aforesaid BY CONSENT IT WAS ORDERED that the
2ndDefendant do pay the Plaintiffs interest at a rate to be assessed AND the
same coming on for assessment this day in the presence of Mr. Palpanaban
Devarajoo of Counsel for the Plaintiffs and Mr. Khaw Chay Tee of Counsel for
the 2nd Defendant AND UPON HEARING Counsel as aforesaid BY
CONSENT IT IS ORDERED that the 2nd Defendant do pay the Plaintiffs
interest at the rate of 12% per annum on:
Between
MJRTB
(i) the sum of $2,586,866.91 from the 2nd day of March 1983 to the
date of payment; and
Court of Appeals, but the appellate court dismissed the same and affirmed
the decision of the trial court in a Decision dated May 19, 1993.
(ii) the sum of $2,521,423.32 from the 11th day of March 1983 to
the date of Payment.
[12]
Dated the 13th day of September, 1985.

Senior Assistant Registrar,
High Court, Kuala Lumpur.[5]
Following unsuccessful attempts[6] to secure payment from private

respondent under the judgment, petitioner initiated on September 5, 1988 the
complaint before Regional Trial Court of Pasig, Metro Manila, to enforce the
judgment of the High Court of Malaya.[7]
Hence, the instant petition which is anchored on two (2) assigned errors,
to wit:
I
THE COURT OF APPEALS ERRED IN HOLDING THAT THE MALAYSIAN

COURT DID NOT ACQUIRE PERSONAL JURISDICTION OVER PNCC,
NOTWITHSTANDING THAT (a) THE FOREIGN COURT HAD SERVED
SUMMONS ON PNCC AT ITS MALAYSIA OFFICE, AND (b) PNCC ITSELF
APPEARED BY COUNSEL IN THE CASE BEFORE THAT COURT.
II
THE COURT OF APPEALS ERRED IN DENYING RECOGNITION AND
ENFORCEMENT TO (SIC) THE MALAYSIAN COURT JUDGMENT.
Private respondent sought the dismissal of the case via a Motion to

Dismiss filed on October 5, 1988, contending that the alleged judgment of the
High Court of Malaya should be denied recognition or enforcement since on
its face, it is tainted with want of jurisdiction, want of notice to private
respondent, collusion and/or fraud, and there is a clear mistake of law or fact.
[8]
Dismissal was, however, denied by the trial court considering that the
grounds relied upon are not the proper grounds in a motion to dismiss under
Rule 16 of the Revised Rules of Court.[9]
On May 22, 1989, private respondent filed its Answer with Compulsory
Counterclaim[10] and therein raised the grounds it brought up in its motion to
dismiss. In its Reply[11] filed on June 8, 1989, the petitioner contended that
the High Court of Malaya acquired jurisdiction over the person of private
respondent by its voluntary submission to the courts jurisdiction through its
appointed counsel, Mr. Khay Chay Tee. Furthermore, private respondents
counsel waived any and all objections to the High Courts jurisdiction in a
pleading filed before the court.
In due time, the trial court rendered its Decision dated October 14, 1991
dismissing petitioners complaint. Petitioner interposed an appeal with the
Generally, in the absence of a special compact, no sovereign is bound

to give effect within its dominion to a judgment rendered by a tribunal of
another country;[13] however, the rules of comity, utility and convenience of
nations have established a usage among civilized states by which final
judgments of foreign courts of competent jurisdiction are reciprocally
respected and rendered efficacious under certain conditions that may vary in
different countries.[14]
In this jurisdiction, a valid judgment rendered by a foreign tribunal may

be recognized insofar as the immediate parties and the underlying cause of
action are concerned so long as it is convincingly shown that there has been
an opportunity for a full and fair hearing before a court of competent
jurisdiction; that the trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the defendant and under a
system of jurisprudence likely to secure an impartial administration of justice;
and that there is nothing to indicate either a prejudice in court and in the
system of laws under which it is sitting or fraud in procuring the judgment. [15]
MJRTB
A foreign judgment is presumed to be valid and binding in the country

from which it comes, until a contrary showing, on the basis of a presumption
of regularity of proceedings and the giving of due notice in the foreign
forum. Under Section 50(b),[16] Rule 39 of the Revised Rules of Court, which
was the governing law at the time the instant case was decided by the trial
court and respondent appellate court, a judgment, against a person, of a
tribunal of a foreign country having jurisdiction to pronounce the same is
presumptive evidence of a right as between the parties and their successors
in interest by a subsequent title. The judgment may, however, be assailed by
evidence of want of jurisdiction, want of notice to the party, collusion, fraud,
or clear mistake of law or fact. In addition, under Section 3(n), Rule 131 of
the Revised Rules of Court, a court, whether in the Philippines or elsewhere,
enjoys the presumption that it was acting in the lawful exercise of its
jurisdiction. Hence, once the authenticity of the foreign judgment is proved,
the party attacking a foreign judgment, is tasked with the burden of
overcoming its presumptive validity.
In the instant case, petitioner sufficiently established the existence of the

money judgment of the High Court of Malaya by the evidence it
offered. Vinayak Prabhakar Pradhan, presented as petitioners sole witness,
testified to the effect that he is in active practice of the law profession in
Malaysia;[17] that he was connected with Skrine and Company as Legal
Assistant up to 1981;[18]that private respondent, then known as Construction
and Development Corporation of the Philippines, was sued by his client,
Asiavest Merchant Bankers (M) Berhad, in Kuala Lumpur; [19] that the writ of
summons were served on March 17, 1983 at the registered office of private
respondent and on March 21, 1983 on Cora S. Deala, a financial planning
officer of private respondent for Southeast Asia operations; [20] that upon the
filing of the case, Messrs. Allen and Gledhill, Advocates and Solicitors, with
address at 24th Floor, UMBC Building, Jalan Sulaiman, Kuala Lumpur,
entered their conditional appearance for private respondent questioning the
regularity of the service of the writ of summons but subsequently withdrew
the same when it realized that the writ was properly served; [21] that because
private respondent failed to file a statement of defense within two (2) weeks,
petitioner filed an application for summary judgment and submitted affidavits
and documentary evidence in support of its claim; [22] that the matter was then
heard before the High Court of Kuala Lumpur in a series of dates where
private respondent was represented by counsel; [23] and that the end result of
all these proceedings is the judgment sought to be enforced.
In addition to the said testimonial evidence, petitioner offered the

following documentary evidence:
(a) A certified and authenticated copy of the Judgment promulgated
by the Malaysian High Court dated September 13, 1985
directing private respondent to pay petitioner the sum of
$5,108,290.23 Malaysian Ringgit plus interests from March
1983 until fully paid;[24]
(b) A certified and authenticated copy of the Order dated
September 13, 1985 issued by the Malaysian High Court in Civil
Suit No. C638 of 1983;[25]
(c) Computation of principal and interest due as of January 31,
1990 on the amount adjudged payable to petitioner by private
respondent;[26]
(d) Letter and Statement of Account of petitioners counsel in
Malaysia indicating the costs for prosecuting and implementing
the Malaysian High Courts Judgment;[27]
(e) Letters between petitioners Malaysian counsel, Skrine and Co.,
and its local counsel, Sycip Salazar Law Offices, relative to
institution of the action in the Philippines;[28]
(f) Billing Memorandum of Sycip Salazar Law Offices dated
January 2, 1990 showing attorneys fees paid by and due from
petitioner;[29]
(g) Statement of Claim, Writ of Summons and Affidavit of Service of
such writ in petitioners suit against private respondent before
the Malaysian High Court;[30]
(h) Memorandum of Conditional Appearance dated March 28, 1983
filed by counsel for private respondent with the Malaysian High
Court;[31]
(i) Summons in Chambers and Affidavit of Khaw Chay Tee, counsel
for private respondent, submitted during the proceedings before
the Malaysian High Court;[32]
MJRTB
(j) Record of the Courts Proceedings in Civil Case No. C638 of

1983;[33]
(k) Petitioners verified Application for Summary Judgment dated
August 14, 1984;[34] and
(l) Letter dated November 6, 1985 from petitioners Malaysian
counsel to private respondents counsel in Malaysia.[35]
Having thus proven, through the foregoing evidence, the existence and
authenticity of the foreign judgment, said foreign judgment enjoys
presumptive validity and the burden then fell upon the party who disputes its
validity, herein private respondent, to prove otherwise.
Private respondent failed to sufficiently discharge the burden that fell

upon it to prove by clear and convincing evidence the grounds which it relied
upon to prevent enforcement of the Malaysian High Court judgment, namely,
(a) that jurisdiction was not acquired by the Malaysian Court over the person
of private respondent due to alleged improper service of summons upon
private respondent and the alleged lack of authority of its counsel to appear
and represent private respondent in the suit; (b) the foreign judgment is
allegedly tainted by evident collusion, fraud and clear mistake of fact or law;
and (c) not only were the requisites for enforcement or recognition allegedly
not complied with but also that the Malaysian judgment is allegedly contrary
to the Constitutional prescription that the every decision must state the facts
and law on which it is based.[36]
Private respondent relied solely on the testimony of its two (2)
witnesses, namely, Mr. Alfredo N. Calupitan, an accountant of private
respondent, and Virginia Abelardo, Executive Secretary and a member of the
staff of the Corporate Secretariat Section of the Corporate Legal Division, of
private respondent, both of whom failed to shed light and amplify its defense
or claim for non-enforcement of the foreign judgment against it.
venture of private respondent and Asiavest Holdings; [37] that under the joint
venture, Asiavest Holdings would handle the financial aspect of the project,
which is fifty-one percent (51%) while private respondent would handle the
technical aspect of the project, or forty-nine percent (49%); [38] and, that Cora
Deala was not authorized to receive summons for and in behalf of the private
respondent.[39] Ms. Abelardos testimony, on the other hand, focused on the
following: that there was no board resolution authorizing Allen and Gledhill to
admit all the claims of petitioner in the suit brought before the High Court of
Malaya,[40] though on cross-examination she admitted that Allen and Gledhill
were the retained lawyers of private respondent in Malaysia. [41]
The foregoing reasons or grounds relied upon by private respondent in

preventing enforcement and recognition of the Malaysian judgment primarily
refer to matters of remedy and procedure taken by the Malaysian High Court
relative to the suit for collection initiated by petitioner. Needless to stress, the
recognition to be accorded a foreign judgment is not necessarily affected by
the fact that the procedure in the courts of the country in which such
judgment was rendered differs from that of the courts of the country in which
the judgment is relied on.[42] Ultimately, matters of remedy and procedure
such as those relating to the service of summons or court process upon the
defendant, the authority of counsel to appear and represent a defendant and
the formal requirements in a decision are governed by the lex fori or the
internal law of the forum,[43] i.e., the law of Malaysia in this case.
In this case, it is the procedural law of Malaysia where the judgment was
rendered that determines the validity of the service of court process on
private respondent as well as other matters raised by it. As to what the
Malaysian procedural law is, remains a question of fact, not of law. It may not
be taken judicial notice of and must be pleaded and proved like any other
fact. Sections 24 and 25 of Rule 132 of the Revised Rules of Court provide
that it may be evidenced by an official publication or by a duly attested or
authenticated copy thereof. It was then incumbent upon private respondent
to present evidence as to what that Malaysian procedural law is and to show
that under it, the assailed service of summons upon a financial officer of a
corporation, as alleged by it, is invalid. It did not. Accordingly, the
presumption of validity and regularity of service of summons and the decision
thereafter rendered by the High Court of Malaya must stand. [44]
Mr. Calupitans testimony centered on the following: that from January to

December 1982 he was assigned in Malaysia as Project Comptroller of the
Pahang Project Package A and B for road construction under the joint
MJRTB
On the matter of alleged lack of authority of the law firm of Allen and
Gledhill to represent private respondent, not only did the private respondents
witnesses admit that the said law firm of Allen and Gledhill were its counsels
in its transactions in Malaysia, [45] but of greater significance is the fact that
petitioner offered in evidence relevant Malaysian jurisprudence [46] to the effect
that (a) it is not necessary under Malaysian law for counsel appearing before
the Malaysian High Court to submit a special power of attorney authorizing
him to represent a client before said court, (b) that counsel appearing before
the Malaysian High Court has full authority to compromise the suit, and (c)
that counsel appearing before the Malaysian High Court need not comply
with certain pre-requisites as required under Philippine law to appear and
compromise judgments on behalf of their clients before said court. [47]
Furthermore, there is no basis for or truth to the appellate courts

conclusion that the conditional appearance of private respondents counsel
who was allegedly not authorized to appear and represent, cannot be
considered as voluntary submission to the jurisdiction of the High Court of
Malaya, inasmuch as said conditional appearance was not premised on the
alleged lack of authority of said counsel but the conditional appearance was
entered to question the regularity of the service of the writ of summons. Such
conditional appearance was in fact subsequently withdrawn when counsel
realized that the writ was properly served.[48]
On the ground that collusion, fraud and clear mistake of fact and law
tainted the judgment of the High Court of Malaya, no clear evidence of the
same was adduced or shown. The facts which the trial court found intriguing
amounted to mere conjectures and specious observations. The trial courts
finding on the absence of judgment against Asiavest-CDCP Sdn. Bhd. is
contradicted by evidence on record that recovery was also sought against
Asiavest-CDCP Sdn. Bhd. but the same was found insolvent. [49] Furthermore,
even when the foreign judgment is based on the drafts prepared by counsel
for the successful party, such is not per se indicative of collusion or
fraud. Fraud to hinder the enforcement within the jurisdiction of a foreign
judgment must be extrinsic, i.e., fraud based on facts not controverted or
resolved in the case where judgment is rendered, [50] or that which would go to
the jurisdiction of the court or would deprive the party against whom
judgment is rendered a chance to defend the action to which he has a
meritorious defense.[51] Intrinsic fraud is one which goes to the very existence
of the cause of action is deemed already adjudged, and it, therefore, cannot
militate against the recognition or enforcement of the foreign judgment.
[52]
Evidence is wanting on the alleged extrinsic fraud. Hence, such
unsubstantiated allegation cannot give rise to liability therein.
Lastly, there is no merit to the argument that the foreign judgment is not
enforceable in view of the absence of any statement of facts and law upon
which the award in favor of the petitioner was based. As aforestated, the lex
fori or the internal law of the forum governs matters of remedy and
procedure.[53] Considering that under the procedural rules of the High Court of
Malaya, a valid judgment may be rendered even without stating in the
judgment every fact and law upon which the judgment is based, then the
same must be accorded respect and the courts in this jurisdiction cannot
invalidate the judgment of the foreign court simply because our rules provide
otherwise.
All in all, private respondent had the ultimate duty to demonstrate the
alleged invalidity of such foreign judgment, being the party challenging the
judgment rendered by the High Court of Malaya. But instead of doing so,
private respondent merely argued, to which the trial court agreed, that the
burden lay upon petitioner to prove the validity of the money judgment. Such
is clearly erroneous and would render meaningless the presumption of
validity accorded a foreign judgment were the party seeking to enforce it be
required to first establish its validity.[54]
MJRTB
WHEREFORE, the instant petition is GRANTED. The Decision of the

Court of Appeals dated May 19, 1993 in CA-G.R. CV No. 35871 sustaining
the Decision dated October 14, 1991 in Civil Case No. 56368 of the Regional
Trial Court of Pasig, Branch 168 denying the enforcement of the Judgment
dated September 13, 1985 of the High Court of Malaya in Kuala Lumpur is
REVERSED and SET ASIDE, and another in its stead is hereby rendered
ORDERING private respondent Philippine National Construction Corporation
to pay petitioner Asiavest Merchant Bankers (M) Berhad the amounts
adjudged in the said foreign Judgment, subject of the said case.
Costs against the private respondent.
SO ORDERED.
MJRTB

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FIRST DIVISION

The cause of the non-boarding of the Fontanillas on United Airlines

[G.R. No. 124110. April 20, 2001]

(a) San Francisco to Washington (15 April 1989);

1 |CONFLICTS cases - Set # 2

The Fontanillas tried to explain to Linda the special circumstances of

causing the Fontanillas to suffer shame, humiliation and embarrassment. The

The Fontanillas then proceeded to the United Airlines customer service

On appeal, the Court of Appeals ruled in favor of the Fontanillas. The

WHEREFORE, in view of the foregoing, judgment appealed herefrom is

Petitioner United Airlines has a different version of what occurred at the

a) P200,000.00 as moral damages;

b) P200,000.00 as exemplary damages;

2 |CONFLICTS cases - Set # 2

c) P50, 000.00 as attorneys fees.

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING

7. On May 5, 1989 at 9:45 a.m., plaintiff and his son checked in at

We disagree with the above conclusion reached by respondent Court of

3 |CONFLICTS cases - Set # 2

The determination of the other issues raised is dependent on whether or

Neither do we agree with the conclusion reached by the appellate court

We rule in the negative.

4 |CONFLICTS cases - Set # 2

250.6 Exceptions to eligibility for denied boarding compensation.

5 |CONFLICTS cases - Set # 2

Airways v. Court of Appeals, where passengers with confirmed booking were

of moral and exemplary damages by the Court of Appeals is

Republic of the Philippines

G.R. No. L-104776 December 5, 1994

Cadalin vs. POEA Administrator, 238 SCRA 721, 774-775 (1994)

6 |CONFLICTS cases - Set # 2

(1) to modify the Resolution dated September 2, 1991 of the

Resolution dated September 2, 1991 (Rollo, pp. 8-25; 26220).

The petition in G.R. Nos. 105029-32, entitled "Asia International Builders

(1) to reverse the Resolution dated September 2, 1991 of

The Resolution dated September 2, 1991 of NLRC, which modified the

(1) to reverse the Resolution dated September 2, 1991 of

(2) to reverse the Resolution dated March 24, 1992 of

7 |CONFLICTS cases - Set # 2

BRII is a foreign corporation with headquarters in Houston, Texas, and is

The amended complaint principally sought the payment of the unexpired

the bill of particulars. The POEA Administrator also scheduled a pre-trial

On July 13, 1984, the claimants submitted their "Compliance and

8 |CONFLICTS cases - Set # 2

On November 14, 1984, claimants filed an opposition to the motions for

On April 2, 1985, the original claimants filed an "Amended Complaint and/or

On September 4, 1985, the POEA Administrator reiterated his directive to

On June 5, 1985, AIBC countered with a "Motion to Dismiss as Improper

9 |CONFLICTS cases - Set # 2

On September 1, 1988, the claimants represented by Atty. De Castro filed

On January 30, 1989, the POEA Administrator rendered his decision in

On March 15, 1989, claimants filed their "Supplement to Complainants'

10 |CONFLICTS cases - Set # 2

On April 5, 1989, AIBC and BRII submitted to NLRC their "Manifestation,"

On August 21, 1990, claimants filed their "Manifestational Motion," praying

On September 2, 1991, NLRC promulgated its Resolution, disposing as

the time of payment, of the total amount in

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

1. The claims of the 94 complainants

(a) complainants identified and listed in

2. Respondents AIBC and Brown & Root are

(b) complainants identified and listed in

WHEREFORE, premises considered, the Decision of the