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KOREA TECHNOLOGIES CO. LTD VS LERMA (GR NO.

143581 Thus, it can be gleaned that the concept of a final and binding arbitral
JANUARY 7, 2008) award is similar to judgments or awards given by some of our quasi-judicial
bodies, like the National Labor Relations Commission and Mines
Adjudication Board, whose final judgments are stipulated to be final and
Korea Technologies Co. Ltd vs Lerma
binding, but not immediately executory in the sense that they may still be
GR No. 143581 January 7, 2008
judicially reviewed, upon the instance of any party. Therefore, the final
foreign arbitral awards are similarly situated in that they need first to be
Facts: Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean confirmed by the RTC.
corporation which is engaged in the supply and installation of Liquefied
Petroleum Gas (LPG) Cylinder manufacturing plants, while private
PIA VS OPLE
respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a
domestic corporation. On March 5, 1997, PGSMC and KOGIES executed a MARCH 28, 2013 ~ VBDIAZ
Contract whereby KOGIES would set up an LPG Cylinder Manufacturing PAKISTAN INTERNATIONAL AIRLINES (PIA) CORPORATION vs
Plant in Carmona, Cavite. The contract was executed in the Philippines. On HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON.
April 7, 1997, the parties executed, in Korea, an Amendment for Contract VICENTE LEOGARDO, JR., in his capacity as Deputy Minister;
No. KLP-970301 dated March 5, 1997 amending the terms of payment. The ETHELYNNE B. FARRALES and MARIA MOONYEEN MAMASIG
contract and its amendment stipulated that KOGIES will ship the machinery G.R. No. 61594 September 28, 1990
and facilities necessary for manufacturing LPG cylinders for which
PGSMC would pay USD 1,224,000. KOGIES would install and initiate the
operation of the plant for which PGSMC bound itself to pay USD 306,000 FACTS: On 2 December 1978, petitioner Pakistan International Airlines
upon the plants production of the 11-kg. LPG cylinder samples. Thus, the Corporation (PIA), a foreign corporation licensed to do business in the
total contract price amounted to USD 1,530,000. On October 14, 1997, Philippines, executed in Manila 2 separate contracts of employment, one
PGSMC entered into a Contract of Lease with Worth Properties, Inc. with private respondent Farrales and the other with private respondent
(Worth) for use of Worths 5,079-square meter property with a 4,032-square Mamasig. 1 The contracts, which became effective on 9 January 1979,
meter warehouse building to house the LPG manufacturing plant. The provided in pertinent portion as follows:
monthly rental was PhP 322,560 commencing on January 1, 1998 with a 5. DURATION OF EMPLOYMENT AND PENALTY
10% annual increment clause. Subsequently, the machineries, equipment,
and facilities for the manufacture of LPG cylinders were shipped, delivered,
and installed in the Carmona plant. PGSMC paid KOGIES USD 1,224,000.
However, gleaned from the Certificate executed by the parties on January
This agreement is for a period of 3 years, but can be extended by the mutual
22, 1998, after the installation of the plant, the initial operation could not be
consent of the parties.
conducted as PGSMC encountered financial difficulties affecting the supply
of materials, thus forcing the parties to agree that KOGIES would be
deemed to have completely complied with the terms and conditions of the
March 5, 1997 contract. For the remaining balance of USD306,000 for the
installation and initial operation of the plant, PGSMC issued two postdated xxx xxx xxx
checks: (1) BPI Check No. 0316412 dated January 30, 1998 for PhP
4,500,000; and (2) BPI Check No. 0316413 dated March 30, 1998 for PhP
4,500,000. When KOGIES deposited the checks, these were dishonored for
the reason PAYMENT STOPPED. Thus, on May 8, 1998, KOGIES sent a 6. TERMINATION
demand letter to PGSMC threatening criminal action for violation of Batas
Pambansa Blg. 22 in case of nonpayment. On the same date, the wife of
PGSMCs President faxed a letter dated May 7, 1998 to KOGIES President
who was then staying at a Makati City hotel. She complained that not only xxx xxx xxx
did KOGIES deliver a different brand of hydraulic press from that agreed
upon but it had not delivered several equipment parts already paid for.

Issue: Whether or not the arbitration clause in the contract of the parties Notwithstanding anything to contrary as herein provided, PIA reserves the
should govern. 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
Held: Yes. Established in this jurisdiction is the rule that the law of the months salary.
place where the contract is made governs. Lex loci contractus. The contract xxx xxx xxx
in this case was perfected here in the Philippines. Therefore, our laws ought
to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity
of mutually agreed arbitral clause or the finality and binding effect of an
arbitral award. Art. 2044 provides, Any stipulation that the arbitrators 10. APPLICABLE LAW:
award or decision shall be final, is valid, without prejudice to Articles 2038,
2039 and 2040.

The arbitration clause was mutually and voluntarily agreed upon by the This agreement shall be construed and governed under and by the laws of
parties. It has not been shown to be contrary to any law, or against morals, Pakistan, and only the Courts of Karachi, Pakistan shall have the
good customs, public order, or public policy. There has been no showing jurisdiction to consider any matter arising out of or under this agreement.
that the parties have not dealt with each other on equal footing. We find no
reason why the arbitration clause should not be respected and complied
with by both parties. In Gonzales v. Climax Mining Ltd., we held that Farrales & Mamasig (employees) were hired as flight attendants after
submission to arbitration is a contract and that a clause in a contract undergoing training. Base station was in Manila and flying assignments to
providing that all matters in dispute between the parties shall be referred to different parts of the Middle East and Europe.
arbitration is a contract. Again in Del Monte Corporation-USA v. Court of
Appeals, we likewise ruled that [t]he provision to submit to arbitration any
dispute arising therefrom and the relationship of the parties is part of that
roughly 1 year and 4 months prior to the expiration of the contracts of
contract and is itself a contract.
employment, PIA through Mr. Oscar Benares, counsel for and official of
the local branch of PIA, sent separate letters, informing them that they will
Having said that the instant arbitration clause is not against public policy, be terminated effective September 1, 1980.
we come to the question on what governs an arbitration clause specifying
that in case of any dispute arising from the contract, an arbitral panel will
be constituted in a foreign country and the arbitration rules of the foreign
country would govern and its award shall be final and binding. Farrales and Mamasig jointly instituted a complaint, for illegal dismissal

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and non-payment of company benefits and bonuses, against PIA with the invoked by petitioner PIA in terms of their consistency with applicable
then Ministry of Labor and Employment (MOLE). Philippine law and regulations.

PIAs Contention: The PIA submitted its position paper, but no evidence, G.R. No. 66006
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 AQUINO, J.:
respondents to discontinue that practice. PIA further claimed that the
services of both private respondents were terminated pursuant to the The issue in this case is whether the shipboard employment contract or
provisions of the employment contract. Hongkong law should govern the amount of death compensation due to the
wife of Guillermo Pancho who was employed by Golden Star Shipping,
Ltd. a Hongkong based firm
Favorable decision for the respondents. 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 shipboard employment contract dated June 1, 1978 was executed in
the period of the employment contract to 3 years was null and void as this country between Pancho and Bagong Filipinas Overseas Corporation,
violative of the provisions of the Labor Code and its implementing rules the local agent of Golden Star Shipping. It was approved by the defunct
and regulations on regular and casual employment; and that the dismissal, National Seamen Board. Pancho was hired as an oiler in the M/V
having been carried out without the requisite clearance from the MOLE, Olivine for 12 months with a gross monthly wage of US$195.
was illegal and entitled private respondents to reinstatement with full
backwages. In October, 1978, he had a cerebral stroke. He was rushed to the hospital
Decision sustained on appeal. Hence, this petition for certiorari while the vessel was docked at Gothenberg, Sweden. He was repatriated to
the Philippines and confined at the San Juan de Dios Hospital. He died on
December 13, 1979.
ISSUE: (Relative to the subject) Which law should govern over the case?
Which court has jurisdiction?
The National Seamen Board awarded his widow, Proserfina, P20,000 as
HELD: Philippine Law and Philippine courts
disability compensation benefits pursuant to the above-mentioned
Petitioner PIA cannot take refuge in paragraph 10 of its employment
employment contract plus P2,000 as attorney's fees. Proserfina appealed to
agreement which specifies, firstly, the law of Pakistan as the applicable law
the National Labor Relations Commission which awarded her $621 times
of the agreement and, secondly, lays the venue for settlement of any dispute
36 months or its equivalent in Philippine currency plus 10% of the benefits
arising out of or in connection with the agreement only [in] courts of
as attorney's fees. Golden Star Shipping assailed that decision by certiorari.
Karachi Pakistan.
We have already pointed out that the relationship is much affected with
We hold that the shipboard employment contract is controlling in this
public interest and that the otherwise applicable Philippine laws and
case. The contract provides that the beneficiaries of the seaman are entitled
regulations cannot be rendered illusory by the parties agreeing upon some
to P20,000 "over and above the benefits" for which the Philippine
other law to govern their relationship.
Government is liable under Philippine law.
the contract was not only executed in the Philippines, it was also performed
here, at least partially; private respondents are Philippine citizens and
Hongkong law on workmen's compensation is not the applicable law. The
respondents, while petitioner, although a foreign corporation, is licensed to
case of Norse Management Co. vs. National Seamen Board, G.R. No.
do business (and actually doing business) and hence resident in the
54204, September 30, 1982, 117 SCRA 486 cannot be a precedent because
Philippines; lastly, private respondents were based in the Philippines in
it was expressly stipulated in the employment contract in that case that the
between their assigned flights to the Middle East and Europe. All the above
workmen's compensation payable to the employee should be in accordance
contacts point to the Philippine courts and administrative agencies as a
with Philippine Law or the Workmen's Insurance Law of the country where
proper forum for the resolution of contractual disputes between the parties.
the vessel is registered "whichever is greater".
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 Solicitor General opines that the employment contract should be
the petitioner PIA did not undertake to plead and prove the contents of
applied. For that reason, he refused to uphold the decision of the NLRC.
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
WHEREFORE, the judgment of the National Labor Relations
provisions of Philippine law.
Commission is reversed and set aside. The decision of the National
Seamen Board dated February 26, 1981 is affirmed. No costs.
[DOCTRINE OF PROCESSUAL PRESUMPTION, eh?]
SO ORDERED.
Petition denied.
_______
NOTES:
Another Issue: petitioner PIA invokes paragraphs 5 and 6 of its contract of Triple Eight Integrated Services, Inc. vs. NLRC
employment with private respondents Farrales and Mamasig, arguing that
its relationship with them was governed by the provisions of its contract
on 6:55 AM in Case Digests, Labor Law, Private International Law
rather than by the general provisions of the Labor Code.
0
A contract freely entered into should, of course, be respected, as PIA
G.R. No. 129584, December 3, 1998
argues, since a contract is the law between the parties. 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. o LABOR LAW: Disease as Ground for Dismissal, requisites: (1) the
Thus, counter-balancing the principle of autonomy of contracting parties is disease must be such that employees continued employment is prohibited
the equally general rule that provisions of applicable law, especially by law or prejudicial to his health as well as to the health of his co-
provisions relating to matters affected with public policy, are deemed employees; and (2) there must be a certification by competent public
written into the contract. Put a little differently, the governing principle is authority that the disease is of such nature or at such a stage that it cannot
that parties may not contract away applicable provisions of law especially be cured within a period of 6 months with proper medical treatment.
peremptory provisions dealing with matters heavily impressed with public o LABOR LAW: same; The requirement for a medical certificate under
interest. The law relating to labor and employment is clearly such an area Article 284 of the Labor Code cannot be dispensed with; otherwise, it
and parties are not at liberty to insulate themselves and their relationships would sanction the unilateral and arbitrary determination by the employer
from the impact of labor laws and regulations by simply contracting with of the gravity or extent of the employees illness and thus defeat the public
each other. It is thus necessary to appraise the contractual provisions policy on the protection of labor.

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o PRIVATE INTERNATIONAL LAW: Lex Loci Contractus: Established is Philippine public health authority the alluded medical certificate that public
the rule that lex loci contractus (the law of the place where the contract is respondents illness will not be cured within a period of six months.
made) governs in this jurisdiction. There is no question that the contract of
employment in this case was perfected here in the Philippines. Petitioner entirely misses the point, as counsel for private respondent states
o PRIVATE INTERNATIONAL LAW: Law of the Forum vis-a-vis Public in the Comment. The rule simply prescribes a certification by a competent
Policy: Settled is the rule that the courts of the forum will not enforce any public health authority and not a Philippine public health authority.
foreign claim obnoxious to the forums public policy. Here in the
Philippines, employment agreements are more than contractual in If, indeed, Osdana was physically unfit to continue her employment, her
nature. The Constitution itself, in Article XIII Section 3, guarantees the employer could have easily obtained a certification to that effect from a
special protection of workers. competent public health authority in Saudi Arabia, thereby heading off any
complaint for illegal dismissal.

FACTS:
The requirement for a medical certificate under Article 284 of the Labor
Osdana, a Filipino citizen, was recruited by Triple Eight for employment Code cannot be dispensed with; otherwise, it would sanction the unilateral
with the latters principal, Gulf Catering Company (GCC), a firm based in and arbitrary determination by the employer of the gravity or extent of the
the Kingdom of Saudi Arabia. The employment contract (originally as employees illness and thus defeat the public policy on the protection of
food server but later changed to waitress) was executed in the labor. As the Court observed in Prieto v. NLRC, The Court is not unaware
Philippines but was to be performed in Riyadh. Once in Riyadh, however, of the many abuses suffered by our overseas workers in the foreign land
Osdana was made to perform strenuous tasks (washing dishes, janitorial where they have ventured, usually with heavy hearts, in pursuit of a more
work), which were not included in her designation as a waitress. Because of fulfilling future. Breach of contract, maltreatment, rape, insufficient
the long hours and strenuous nature of her work, she suffered from Carpal nourishment, sub-human lodgings, insults and other forms of debasement,
Tunnel Syndrome, for which she had to undergo surgery. But during her are only a few of the inhumane acts to which they are subjected by their
weeks of confinement at the hospital for her recovery, she was not given foreign employers, who probably feel they can do as they please in their
any salary. And after she was discharged from the hospital, GCC suddenly country. While these workers may indeed have relatively little defense
dismissed her from work, allegedly on the ground of illness. She was not against exploitation while they are abroad, that disadvantage must not
given any separation pay nor was she paid her salaries for the periods when continue to burden them when they return to their own territory to voice
she was not allowed to work. Thus, upon her return to the Philippines, she their muted complaint. There is no reason why, in their own land, the
filed a complaint against Triple Eight, praying for unpaid and underpaid protection of our own laws cannot be extended to them in full measure for
salaries, among others. the redress of their grievances
.

Which law should apply: Lex Loci Contractus


The LA ruled in her favour, which ruling NLRC affirmed. Hence, this
petition for certiorari.
Petitioner likewise attempts to sidestep the medical certificate requirement
by contending that since Osdana was working in Saudi Arabia, her
ISSUE: employment was subject to the laws of the host country. Apparently,
petitioner hopes to make it appear that the labor laws of Saudi Arabia do
not require any certification by a competent public health authority in the
o Whether or not Osdana was illegally dismissed dismissal of employees due to illness.
o If so, whether or not she is entitled to award for salaries for the
unexpired portion of the contract
Again, petitioners argument is without merit.

First, established is the rule that lex loci contractus (the law of the place
HELD: where the contract is made) governs in this jurisdiction. There is no
question that the contract of employment in this case was perfected here in
The petition must fail. the Philippines. Therefore, the Labor Code, its implementing rules and
regulations, and other laws affecting labor apply in this case. Furthermore,
settled is the rule that the courts of the forum will not enforce any foreign
Disease as a Ground for Dismissal claim obnoxious to the forums public policy. Here in the Philippines,
employment agreements are more than contractual in nature. The
Constitution itself, in Article XIII Section 3, guarantees the special
Under Article 284 of the Labor Code and the Omnibus Rules Implementing protection of workers.
the Labor Code, for disease to be a valid ground for termination, the
following requisites must be present:
This public policy should be borne in mind in this case because to allow
foreign employers to determine for and by themselves whether an overseas
contract worker may be dismissed on the ground of illness would encourage
illegal or arbitrary pre-termination of employment contracts.
1. The disease must be such that employees continued employment is
prohibited by law or prejudicial to his health as well as to the health of his Award of Salaries granted but reduced
co-employees
2. There must be a certification by competent public authority that the disease
is of such nature or at such a stage that it cannot be cured within a period of In the case at bar, while it would appear that the employment contract
6 months with proper medical treatment approved by the POEA was only for a period of twelve months, Osdanas
actual stint with the foreign principal lasted for one year and seven-and-a-
half months. It may be inferred, therefore, that the employer renewed her
In the first place, Osdanas continued employment despite her illness was employment contract for another year. Thus, the award for the unexpired
not prohibited by law nor was it prejudicial to her health, as well as that portion of the contract should have been US$1,260 (US$280 x 4 months)
of her co-employees. In fact, the medical report issued after her second or its equivalent in Philippine pesos, not US$2,499 as adjudged by the labor
operation stated that she had very good improvement of the arbiter and affirmed by the NLRC.
symptoms. Besides, Carpal Tunnel Syndrome is not a contagious
disease.
As for the award for unpaid salaries and differential amounting to
On the medical certificate requirement, petitioner erroneously argues that US$1,076 representing seven months unpaid salaries and one month
private respondent was employed in Saudi Arabia and not here in the underpaid salary, the same is proper because, as correctly pointed out by
Philippines. Hence, there was a physical impossibility to secure from a Osdana, the no work, no pay rule relied upon by petitioner does not apply
in this case. In the first place, the fact that she had not worked from June
3|Page
18 to August 22, 1993 and then from January 24 to April 29, 1994, was due
to her illness which was clearly work-related. Second, from August 23 to
October 5, 1993, Osdana actually worked as food server and cook for seven
days a week at the Hota Bani Tameem Hospital, but was not paid any salary HELD: YES. AFFIRMED with the MODIFICATION that the award to
for the said period. Finally, from October 6 to October 23, 1993, she was private respondent Osdana should be one thousand two hundred sixty US
confined to quarters and was not given any work for no reason at all. dollars (US$1,260), or its equivalent in Philippine pesos, as salaries for the
unexpired portion of the employment contract, and one thousand seventy
Moral Damages granted but reduced six US dollars (US$1,076), or its equivalent in Philippine pesos,
representing unpaid salaries for seven (7) months and underpaid salary for
one (1) month, plus interest. Petitioner is likewise ordered to pay private
Now, with respect to the award of moral and exemplary damages, the same respondent P30,000.00 in moral damages, P10,000.00 in exemplary
is likewise proper but should be reduced. Worth reiterating is the rule that damages and 10% attorney's fees.
moral damages are recoverable where the dismissal of the employee was
attended by bad faith or fraud or constituted an act oppressive to labor, or In termination cases, the burden of proof rests on the employer to
was done in a manner contrary to morals, good customs, or public policy. show that the dismissal is for a just cause.
Likewise, exemplary damages may be awarded if the dismissal was Osdana's continued employment despite her illness was not prohibited
effected in a wanton, oppressive or malevolent manner. by law nor was it prejudicial to her health, as well as that of her co-
employees. Carpal Tunnel Syndrome" is not a contagious disease and
According to the facts of the case as stated by public respondent, Osdana her medical report indicated that she had very good improvement of
was made to perform such menial chores, as dishwashing and janitorial the symptoms
work, among others, contrary to her job designation as waitress. She was
also made to work long hours without overtime pay. Because of such
The requirement for a medical certificate under Article 284 of the
Labor Code cannot be dispensed with; otherwise, it would sanction
arduous working conditions, she developed Carpal Tunnel Syndrome. Her
the unilateral and arbitrary determination by the employer of the
illness was such that she had to undergo surgery twice. Since her employer
gravity or extent of the employee's illness and thus defeat the public
determined for itself that she was no longer fit to continue working, they
policy on the protection of labor.
sent her home posthaste without as much as separation pay or compensation
for the months when she was unable to work because of her illness. Since lex loci contactus (the law of the place where the contract is made)
the employer is deemed to have acted in bad faith, the award for attorneys governs in this jurisdiction. Furthermore, settled is the rule that the
fees is likewise upheld. courts of the forum will not enforce any foreign claim obnoxious to
the forum's public policy
employment contract approved by the POEA was only for a period of
twelve months, Osdana's actual stint with the foreign principal lasted
Lessons Applicable: Moral Damage for Labor Cases (Torts and Damages) for one year and seven-and-a-half months. It may be inferred,
Laws Applicable: Art. 284 of the Labor Code, Section 8, Rule 1, Book VI therefore, that the employer renewed her employment contract for
of the Omnibus Rules Implementing the Labor Code another year. Thus, the award for the unexpired portion of the
contract should have been US$1,260 (US$280 x 4 1/2 months) or its
equivalent in Philippine pesos, not US$2,499 as adjudged by the labor
FACTS: arbiter and affirmed by the NLRC.
As for the award for unpaid salaries and differential amounting to
US$ 1,076 representing seven months' unpaid salaries and one month
August 1992: Osdana was recruited by Triple Eight Integrated
underpaid salary, the same is proper because, as correctly pointed out
Services Inc. for employment as "Food Server" for 36
by Osdana, the "no work, no pay" rule relied upon by petitioner does
months with Gulf Catering Company (GCC) based in the Kingdom of
not apply in this case. In the first place, the fact that she had not
Saudi Arabia for 36 months. She was required to pay P11,950
worked from June 18 to August 22, 1993 and then from January 24 to
placement fees. Subsequently, she was asked to sign a contract for a
April 29, 1994, was due to her illness which was clearly work-related.
salary of $280 which was approved by POEA.
Second, from August 23 to October 5, 1993, Osdana actually worked
September 16, 1992: Osdana commeced work as staff to College of as food server and cook for seven days a week at the Hota Bani
Public Administration made to wash dishes, cooking pots, and Tameem Hospital, but was not paid any salary for the said period.
utensils, perform janitorial work and other tasks which were unrelated Finally, from October 6 to October 23, 1993, she was confined to
to her job designation as waitress on a 12-hour shift without overtime quarters and was not given any work for no reason at all.
pay
award of moral and exemplary damages, the same is likewise proper
Because of the long hours and the strenuous nature of her work, she but should be reduced. Worth reiterating is the rule that moral
felt numbness and pain in her arms so she was confined at the Ladies damages are recoverable where the dismissal of the employee was
Villa during June 18 to August 22, 1993 for which she was not paid attended by bad faith or fraud or constituted an act oppressive to
her salaries labor, or was done in a manner contrary to morals, good customs, or
August 22 to October 5, 1993: She worked as a Food Server and public policy. Likewise, exemplary damages may be awarded if the
Cook at the Hota Bani Tameem Hospital for which she was not dismissal was effected in a wanton, oppressive or malevolent
compensated manner. Since the employer is deemed to have acted in bad faith, the
October 6 to October 23, 1993: She was confined at the Ladies Villa award for attorney's fees is likewise upheld
for no reason and was not paid her salary it does not appear that petitioner took steps to have its principal
October 24, 1993: She was assigned at Oleysha University to wash included as co-respondent thus, it is the only one liable. The POEA,
dishes and do other menial tasks at long hours and later the labor arbiter, did not acquire jurisdiction over the foreign
January 1994 and April 23, 1994: She underwent operation because principal
of her pains and was not given work during the period even though
her doctor advised that she can do light work. She did not receive any
compensation.
April 27, 1994: She was discharged from work without separation pay Santos III vs. Northwest Orient Airlines
on the ground of illness
labor arbiter: favored Osdana holding Triple Eight liable
for US$2,499.00 as salaries for the unexpired portion of the contract, on 6:56 AM in Case Digests, Political Law, Private International Law
and US$1,076.00 as unpaid salary and salary differential, or its 0
equivalent in Philippine Peso and P50,000 moral damages, P20,000 G.R. No. 101538, June 23, 1992
exemplary damages and 10% of the monetary award as attorney's fee
NLRC: affirmed
Triple Eight filed a petition for certiorari for awarding without legal o INTERNATIONAL LAW: Warsaw Convention is constitutional, a treaty
basis commitment voluntarily assumed by the Philippine government and, as
ISSUE: W/N Osdana is entitled Moral Damages such, has the force and effect of law in this country.
o INTERNATIONAL LAW: Warsaw Convention, when applicable: To all
"international transportations of persons by aircraft for hire." Whether the

4|Page
transportation is "international" is determined by the contract of the parties, contract made by the parties, the place of departure and the place of
which in the case of passengers is the ticket. When the contract of carriage destination, whether or not there be a break in the transportation or a
provides for the transportation of the passenger between certain designated transshipment, are situated [either] within the territories of two High
terminals "within the territories of two High Contracting Parties," the Contracting Parties . .
provisions of the Convention automatically apply and exclusively govern .
the rights and liabilities of the airline and its passenger.
o INTERNATIONAL LAW: Warsaw Convention, jurisdiction: Place of Whether the transportation is "international" is determined by the contract
Destination vis-a-vis Agreed Stopping Place: The contract is a single of the parties, which in the case of passengers is the ticket. When the
undivided operation, beginning with the place of departure and ending with contract of carriage provides for the transportation of the passenger between
the ultimate destination. The use of the singular in this expression indicates certain designated terminals "within the territories of two High Contracting
the understanding of the parties to the Convention that every contract of Parties," the provisions of the Convention automatically apply and
carriage has one place of departure and one place of destination. An exclusively govern the rights and liabilities of the airline and its passenger.
intermediate place where the carriage may be broken is not regarded as a
"place of destination." Since the flight involved in the case at bar is international, the same being
from the United States to the Philippines and back to the United States, it is
subject to the provisions of the Warsaw Convention, including Article
FACTS: 28(1), which enumerates the four places where an action for damages may
be brought.
Petitioner is a minor and a resident of the Philippines. Private respondent
Nortwest Orient Airlines (NOA) is a foreign corporation with principal Does Article 28(1) refer to Jurisdiction or Venue?
office in Minnesota, U.S.A. and licensed to do business and maintain a
branch office in the Philippines. The petitioner purchased from NOA a
round-trip ticket in San Francisco, U.S.A. In December 19, 1986, the ...where the matter is governed by the Warsaw Convention, jurisdiction
petitioner checked in the at the NOA counter in the San Francisco airport takes on a dual concept. Jurisdiction in the international sense must be
for his departure to Manila. Despite a previous confirmation and re- established in accordance with Article 28(1) of the Warsaw Convention,
confirmation, he was informed that he had no reservation for his flight for following which the jurisdiction of a particular court must be established
Tokyo to Manila. He therefore had to be wait-listed. On March 12, 1987, pursuant to the applicable domestic law. Only after the question of which
the petitioner sued NOA for damages in RTC Makati. NOA moved to court has jurisdiction is determined will the issue of venue be taken up. This
dismiss the complaint on the ground of lack of jurisdiction. second question shall be governed by the law of the court to which the case
is submitted.
ISSUE:
Was the case properly filed in the Philippines, since the plaintiffs
destination was Manila?
o Whether or not Article 28 (1) of the Warsaw Convention is in
accordance with the constitution so as to deprive the Philippine Courts
jurisdiction over the case The place of destination, within the meaning of the Warsaw Convention, is
determined by the terms of the contract of carriage or, specifically in this
case, the ticket between the passenger and the carrier. Examination of the
petitioner's ticket shows that his ultimate destination is San Francisco.
Although the date of the return flight was left open, the contract of carriage
HELD: between the parties indicates that NOA was bound to transport the
petitioner to San Francisco from Manila. Manila should therefore be
Art. 28. (1) An action for damage must be brought at the option of the considered merely an agreed stopping place and not the destination.
plaintiff, in the territory of one of the High Contracting Parties, either
before the court of the domicile of the carrier or of his principal place of Article 1(2) also draws a distinction between a "destination" and an "agreed
business, or where he has a place of business through which the contract stopping place." It is the "destination" and not an "agreed stopping place"
has been made, or before the court at the place of destination. that controls for purposes of ascertaining jurisdiction under the Convention.

Constitutionality of the Warsaw Convention The contract is a single undivided operation, beginning with the place of
departure and ending with the ultimate destination. The use of the singular
in this expression indicates the understanding of the parties to the
The Republic of the Philippines is a party to the Convention for the Convention that every contract of carriage has one place of departure and
Unification of Certain Rules Relating to International Transportation by one place of destination. An intermediate place where the carriage may be
Air, otherwise known as the Warsaw Convention. It took effect on February broken is not regarded as a "place of destination."
13, 1933. The Convention was concurred in by the Senate, through its
Resolution No. 19, on May 16, 1950. The Philippine instrument of
accession was signed by President Elpidio Quirino on October 13, 1950, WHEREFORE, the petition is DENIED, with costs against the petitioner. It
and was deposited with the Polish government on November 9, 1950. The is so ordered
Convention became applicable to the Philippines on February 9, 1951. On
September 23, 1955, President Ramon Magsaysay issued Proclamation No.
201, declaring our formal adherence thereto. "to the end that the same and
every article and clause thereof may be observed and fulfilled in good faith
by the Republic of the Philippines and the citizens thereof." United Airlines vs. Uy
The Convention is thus a treaty commitment voluntarily assumed by the
Philippine government and, as such, has the force and effect of law in this on 7:36 AM in Civil Law, Private International Law
country. 0
G.R. No. 127768, Nov. 19, 1999
Does the Warsaw Convention apply in this case?
INTERNATIONAL LAW: Applicability of the Warsaw Convention: the
Convention's provisions do not regulate or exclude liability for other
By its own terms, the Convention applies to all international transportation breaches of contract by the carrier or misconduct of its officers and
of persons performed by aircraft for hire. employees, or for some particular or exceptional type of damage. Neither
may the Convention be invoked to justify the disregard of some
extraordinary sort of damage resulting to a passenger and preclude recovery
International transportation is defined in paragraph (2) of Article 1 as therefor beyond the limits set by said Convention. Likewise, we have held
follows: that the Convention does not preclude the operation of the Civil Code and
other pertinent laws. It does not regulate, much less exempt, the carrier
(2) For the purposes of this convention, the expression "international from liability for damages for violating the rights of its passengers under
transportation" shall mean any transportation in which, according to the the contract of carriage, especially if willful misconduct on the part of the
carrier's employees is found or established
5|Page
Within our jurisdiction we have held that the Warsaw Convention can be
applied, or ignored, depending on the peculiar facts presented by each case.
FACTS: Thus, we have ruled that the Convention's provisions do not regulate or
exclude liability for other breaches of contract by the carrier or misconduct
October 13, 1989 Respondent Willie Uy is a passenger of petitioner of its officers and employees, or for some particular or exceptional type of
United Airlines, bound from San Francisco to Manila. While in San damage. Neither may the Convention be invoked to justify the disregard of
Francisco, it was found that one piece of his luggage was over the some extraordinary sort of damage resulting to a passenger and preclude
maximum weight allowance of 70 kg. per bag. A United Airlines employee recovery therefor beyond the limits set by said Convention. Likewise, we
rebuked him and in a loud voice, in front of the milling crowd, ordered him have held that the Convention does not preclude the operation of the Civil
to repack his things accordingly. Wishing not to create a scene, Willie did Code and other pertinent laws. It does not regulate, much less exempt, the
as asked. Unfortunately, his luggage was still overweight so the airline carrier from liability for damages for violating the rights of its passengers
billed him overweight charges. Willie offered to pay the charges with a under the contract of carriage, especially if willful misconduct on the part
Miscellaneous Charge Order (MCO) or an airline pre-paid credit but the of the carrier's employees is found or established.
same employee, and an airline supervisor, refused to honor it, contending
that there were discrepancies in the figures. Thus, Willie was forced to pay
the charges with his American Express credit card. Upon arrival in Manila,
Willie discovered that one of his bags had been slashed and its contents, Respondent's complaint reveals that he is suing on two (2) causes of
amounting to US$5,310.00, stolen. action: (a) the shabby and humiliating treatment he received from
petitioner's employees at the San Francisco Airport which caused him
extreme embarrassment and social humiliation; and, (b) the slashing of his
luggage and the loss of his personal effects amounting to US $5,310.00.
October 16, 1989 he sent his first letter of demand to United Airlines. The
airline did not refute Willies allegations and mailed a check representing While his second cause of action - an action for damages arising from theft
payment of his loss based on the maximum liability of US$9.70 per pound. or damage to property or goods - is well within the bounds of the Warsaw
Willie, thinking the amount to be grossly inadequate to compensate him for Convention, his first cause of action -an action for damages arising from the
his losses as well as for the indignities he was subjected to, sent two more misconduct of the airline employees and the violation of respondent's rights
letters to petitioner airline, one dated January 4, 1990 and the other dated as passenger - clearly is not.
October 28, 1991, demanding out-of-court settlement of P1,000,000.00.

June 9, 1992 Willie filed a complaint for damages before the Philippine Action for damages arising from the misconduct of the airline employees
courts. He had two causes of action: (1) the shabby and humiliating and the violation of the respondents rights as passengers is covered under
treatment he received from petitioners employees at the San Francisco the Civil Code
Airport which caused him extreme embarrassment and social humiliation;
and (2) the slashing of his luggage and the loss of personal effects
amounting to US$5,310.00. Consequently, insofar as the first cause of action is concerned, respondent's
failure to file his complaint within the two (2)-year limitation of the
Warsaw Convention does not bar his action since petitioner airline may still
For its part, United Airlines moved to dismiss the complaint on the ground be held liable for breach of other provisions of the Civil Code which
that it was filed out of time. Under Art. 29 of the Warsaw Convention, the prescribe a different period or procedure for instituting the action,
right to damages shall be extinguished if an action is not brought within 2 specifically, Art. 1146 thereof which prescribes four (4) years for filing an
years. However, the second paragraph of the said provision stated that the action based on torts.
method of calculating the period of limitation shall be determined by the
law of the court to which the case is submitted. It is Willies position that
our rules on interruption of prescriptive period should apply. When he sent
his letters of demand, the 2-year period was tolled, giving him ample time Exception to the Application of the 2-year prescriptive period: When airline
to file his complaint. employed delaying tactics

The trial court ordered the dismissal of the case, holding that Art. 29(2)
refers not to the local forums rules in interrupting the prescriptive period
but only to the rules of determining the time in which the action was As for respondent's second cause of action, indeed the travaux preparatories
deemed commenced (meaning filed). Willie filed his motion for of the Warsaw Convention reveal that the delegates thereto intended the
reconsideration of the order of dismissal only on the 14th day. The trial two (2)-year limitation incorporated in Art. 29 as an absolute bar to suit and
court denied his motion and 2 days later Willie filed his notice of appeal. not to be made subject to the various tolling provisions of the laws of the
United Airlines this time contended that the notice of appeal was filed forum. This therefore forecloses the application of our own rules on
beyond the 15-day reglementary period and should therefore be dismissed. interruption of prescriptive periods. Article 29, par. (2), was intended only
The CA, however, took cognizance of the case in the interest of justice and to let local laws determine whether an action had been commenced within
ruled in favour of respondent. Hence, this petition for certiorari. the two (2)-year period, and within our jurisdiction an action shall be
deemed commenced upon the filing of a complaint. Since it is indisputable
ISSUE: Whether or not the action for damages is barred by the lapse that respondent filed the present action beyond the two (2)-year time frame
of the 2-year prescriptive period under Art. 29 of the Warsaw his second cause of action must be barred. Nonetheless, it cannot be
Convention doubted that respondent exerted efforts to immediately convey his loss to
petitioner, even employed the services of two (2) lawyers to follow up his
claims, and that the filing of the action itself was delayed because of
petitioner's evasion.
HELD:
Verily, respondent filed his complaint more than two (2) years later, beyond
Supreme Court held that although the 2-year prescriptive period under the the period of limitation prescribed by the Warsaw Convention for filing a
Warsaw Convention has lapsed, it did not preclude the application of other claim for damages. However, it is obvious that respondent was forestalled
pertinent provisions of the Civil Code. Thus, the action for damages could from immediately filing an action because petitioner airline gave him the
still be filed based on tort which can be filed within 4 years from the time runaround, answering his letters but not giving in to his demands. True,
cause of action accrued. As for the action pertaining to the loss of the respondent should have already filed an action at the first instance when his
contents of the luggage, while it was well within the bounds of the Warsaw claims were denied by petitioner but the same could only be due to his
Convention, the Supreme Court found that there was an exception to the desire to make an out-of-court settlement for which he cannot be
applicability of the 2-year prescriptive period that is when the airline faulted. Hence, despite the express mandate of Art. 29 of the Warsaw
employed delaying tactics and gave the passenger the run-around. Convention that an action for damages should be filed within two (2) years
from the arrival at the place of destination, such rule shall not be applied in
Applicability of the Warsaw Convention: Courts have discretion whether to the instant case because of the delaying tactics employed by petitioner
apply them or not airline itself. Thus, private respondent's second cause of action cannot be
considered as time-barred under Art. 29 of the Warsaw Convention.

6|Page
WHEREFORE, the assailed Decision of the Court of Appeals reversing and mandate of Article 29 of the Warsaw Convention that an action for
setting aside the appealed order of the trial court granting the motion to damages should be filed within 2 years from the arrival at the place of
dismiss the complaint, as well as its Resolution denying reconsideration, is destination, such rule shall not be applied in the instant case because of the
AFFIRMED. Let the records of the case be remanded to the court of origin delaying tactics employed by petitioner airlines itself. Thus, respondents
for further proceedings taking its bearings from this disquisition. 2nd cause of action cannot be considered as time barred.

SO ORDERED.
Vda. De Perez vs. Tolete
Facts: On October 13, 1989, respondent, a passenger of United Airlines,
checked in together with his luggage one piece of which was found to be on 7:04 AM in Case Digests, Civil Law, Private International Law
overweight at the airline counter. To his utter humiliation, an employee of 0
petitioner rebuked him saying that he should have known the maximum G.R. No. 76714, June 2, 1994
weight allowance per bag and that he should have packed his things
accordingly. Then, in a loud voice in front of the milling crowd, she told
respondent to repair his things and transfer some of them to the light ones.
Respondent acceded but his luggage was still overweight. Petitioner billed o PRIVATE INTERNATIONAL LAW: Extrinsic Validity of Wills of Non-
him overweight charges but its employee reused to honor the miscellaneous Resident Aliens
charges under MCD which he offered to pay with. Not wanting to leave o PRIVATE INTERNATIONAL LAW: Reprobate of Foreign Wills:
without his luggage, he paid with his credit card. Upon arrival in manila, he Requirement of Notices
discovered that one of his bags had been slashed and its contents stolen. In
a letter dated October 16, 1989, he notified petitioner of his loss and
requested reimbursement. Petitioner paid for his loss based on the FACTS:
maximum liability per pound. Respondent considered the amount grossly
inadequate. He sent two more letters to petition but to no avail. On June 9, Dr. Jose Cunanan and his wife, Dr. Evelyn Perez-Cunanan, who became
1992, respondent filed a complaint for damages against petitioner Airline. American citizens and residents of New York, each executed a will also in
Petitioner moved to dismiss the complaint invoking the provisions of New York, containing provisions on presumption of survivorship (in the
Article 29 of the Warsaw Convention. Respondent countered that according event that it is not known which one of the spouses died first, the husband
to par. 2 of Article 29, the method of calculating the period of limitation shall be presumed to have predeceased his wife). Later, the entire family
shall be determined by the law of the court to which the case is submitted. perished in a fire that gutted their home. Thus, Rafael, who was named
trustee in Joses will, filed for separate probate proceedings of the wills.

Issues: Later, Evelyns mother, Salud Perez, filed a petition for reprobate in
1) Does the Warsaw Convention preclude the operation of the Civil Code Bulacan. Rafael opposed, arguing that Salud was not an heir according to
and other pertinent laws? New York law. He contended that since the wills were executed in New
York, New York law should govern. He further argued that, by New York
2) Has the respondents cause of action prescribed? law, he and his brothers and sisters were Joses heirs and as such entitled to
notice of the reprobate proceedings, which Salud failed to give.

For her part, Salud said she was the sole heir of her daughter, Evelyn, and
Held: 1) No. Within our jurisdiction we have held that the Warsaw that the two wills were in accordance with New York law. But before she
Convention can be applied, or ignored, depending on the peculiar facts could present evidence to prove the law of New York, the reprobate court
presented by each case. Convention provisions do not regulate or exclude already issued an order, disallowing the wills.
liabilities for other breaches of contract by the carrier or misconduct of its
officers and employees, or for some particular or exceptional type of
damage. Neither may the Convention be invoked to justify the disregard of ISSUE: Whether or not the reprobate of the wills should be allowed
some extraordinary type of damage. Neither may the Convention be
invoked to justify the disregard of some extraordinary sort of damage
resulting to a passenger and preclude recovery therefore3 beyond the limits
et by said convention. Likewise, we have held that the Convention does not HELD:
preclude the operation of the Civil Code and other pertinent laws. It does
not regulate, much less exempt, the carrier from liability for damages for Extrinsic Validity of Wills of Non-Resident Aliens
violating the rights of its passengers under the contract of carriage,
especially if willful misconduct on the part of the carriers employees is The respective wills of the Cunanan spouses, who were American citizens,
found or established. will only be effective in this country upon compliance with the following
provision of the Civil Code of the Philippines:

2) No. While his 2nd cause of action (an action for damages arising from Art. 816. The will of an alien who is abroad produces effect in the
theft or damage to property or goods) is well within the bounds of the Philippines if made with the formalities prescribed by the law of the place
Warsaw convention, his 1st cause of action (an action for damages arising in which he resides, or according to the formalities observed in his country,
from the misconduct of the airline employees and the violation of or in conformity with those which this Code prescribes.
respondents rights as passengers) clearly is not.
Thus, proof that both wills conform with the formalities prescribed by New
York laws or by Philippine laws is imperative.
The 2-yr limitation incorporated in Art. 29 of the Warsaw Convention as an
absolute bar to suit and not to be made subject to the various tolling
provisions of the laws of the forum, forecloses the application of our own Evidence for Reprobate of Wills Probated outside the Philippines
rules on interruption of prescriptive periods. (Art. 29, par. 2 was indented
only to let local laws determine whether an action shall be deemed The evidence necessary for the reprobate or allowance of wills which have
commenced upon the filing of a complaint.) Since, it is indisputable that been probated outside of the Philippines are as follows: (1) the due
respondent filed the present action beyond the 2-yr time frame his 2nd execution of the will in accordance with the foreign laws; (2) the testator
cause of action must be barred. has his domicile in the foreign country and not in the Philippines; (3) the
will has been admitted to probate in such country; (4) the fact that the
foreign tribunal is a probate court, and (5) the laws of a foreign country on
However, it is obvious that respondent was forestalled from immediately procedure and allowance of wills (III Moran Commentaries on the Rules of
filing an action because petitioner gave him the runaround, answering his Court, 1970 ed., pp. 419-429; Suntay v. Suntay, 95 Phil. 500 [1954];
letters but not giving in to his demands. True, respondent should have Fluemer v. Hix, 54 Phil. 610 [1930]). Except for the first and last
already filed an action at the first instance when petitioner denied his claims requirements, the petitioner submitted all the needed evidence.
but the same could only be due to his desire to make an out-of-court
settlement for which he cannot be faulted. Hence, despite the express
7|Page
The necessity of presenting evidence on the foreign laws upon which the A will of an American testator provided that his estate should be
probate in the foreign country is based is impelled by the fact that our disposed of in accordance with the Philippine law. The testator further
courts cannot take judicial notice of them. provided that whoever would oppose his wishes that his estate should be
distributed in accordance with Philippine laws would forfeit their
inheritance
On Lack of Notice to Joses Heirs
ISSUE:

This petition cannot be completely resolved without touching on a very Will there be forfeiture?
glaring fact - petitioner has always considered herself the sole heir of Dr.
Evelyn Perez Cunanan and because she does not consider herself an heir of HELD:
Dr. Jose F. Cunanan, she noticeably failed to notify his heirs of the filing of
the proceedings. Thus, even in the instant petition, she only impleaded Even if the testators wishes must be given paramount
respondent Judge, forgetting that a judge whose order is being assailed is importance, if the wishes of the testator contravene a specific provision
merely a nominal or formal party (Calderon v. Solicitor General, 215 of law, then that provision in a will should not be given effect. A
SCRA 876 [1992]). persons will is merely an instrument which is PERMITTED, so his right is
not absolute. It should be subject to the provisions of the Philippine laws.

The rule that the court having jurisdiction over the reprobate of a will shall The estate of a decedent shall be distributed in accordance with
"cause notice thereof to be given as in case of an original will presented for his national law. He cannot provide otherwise.
allowance" (Revised Rules of Court, Rule 27, Section 2) means that with
regard to notices, the will probated abroad should be treated as if it were an The SC held that those who opposed would not forfeit their
"original will" or a will that is presented for probate for the first time. inheritance because that provision is not legal.
Accordingly, compliance with Sections 3 and 4 of Rule 76, which require
publication and notice by mail or personally to the "known heirs, legatees, Miciano vs. Brimo
and devisees of the testator resident in the Philippines" and to the executor,
if he is not the petitioner, are required.
G.R. No. L-22595, November 1, 1927 Krist
The brothers and sisters of Dr. Jose F. Cunanan, contrary to petitioner's
claim, are entitled to notices of the time and place for proving the wills.
Under Section 4 of Rule 76 of the Revised Rules of Court, the "court shall
also cause copies of the notice of the time and place fixed for proving the
will to be addressed to the designated or other known heirs, legatees, and
devisees of the testator, . . . " Facts:

WHEREFORE, the questioned Order is SET ASIDE. Respondent Judge The judicial administrator of the estate of the deceased, Joseph Brimo, filed
shall allow petitioner reasonable time within which to submit evidence a scheme of partition. However, one of the brothers of the deceased
needed for the joint probate of the wills of the Cunanan spouses and see to opposed the said partition.
it that the brothers and sisters of Dr. Jose F. Cunanan are given all notices
and copies of all pleadings pertinent to the probate proceedings.

SO ORDERED. According to the scheme and its provision, that the deceased requests that
all his relatives respect his wishes, otherwise those who opposed the same
shall be cancelled in said disposition in favor of the oppositor.
Miciano vs Brimo
TITLE: Juan Miciano v Andre Brimo
CITATION: GR No.22595, November 1, 1927| 50 Phil 867 The apellant in the case, who opposed the same, based his opposition on the
fact that the deceased was a Turkish citizen, that his disposition should be
FACTS: in accordance with the laws of his nationality.

Juan Miciano, judicial administrator of the estate in question, filed a


scheme of partition. Andre Brimo, one of the brothers of the deceased
(Joseph Brimo) opposed Micianos participation in the inheritance. Joseph
Brimo is a Turkish citizen.

ISSUE: Whether Turkish law or Philippine law will be the basis on the Issue:
distribution of Joseph Brimos estates.

HELD: WON the disposition shall be made in accordance with Philippine Laws

Though the last part of the second clause of the will expressly said that it
be made and disposed of in accordance with the laws in force in the
WON there shall be cancellation of disposition/s in favor of the appellant-
Philippine Island, this condition, described as impossible conditions, shall
oppositor
be considered as not imposed and shall not prejudice the heir or legatee in
any manner whatsoever, even should the testator otherwise
provide. Impossible conditions are further defined as those contrary to law
or good morals. Thus, national law of the testator shall govern in his
testamentary dispositions.
The court approved the scheme of partition submitted by the judicial
administrator, in such manner as to include Andre Brimo, as one of the Held:
legatees.

MICIANO vs. BRIMO


No, although the disposition provides an express provision that it shall be
governed by Philippine Laws and those who opposed the condition of the
50 PHIL 867
provisions given shall be cancelled from the disposition, the fact is that the
condition itself is void for being contrary to law. Article 792 of the Civil
FACTS:
Code provides:

8|Page
Impossible conditions and those contrary to law or good morals shall be
considered as not imposed and shall not prejudice the heir or legatee in any
manner whatsoever, even should the testator otherwise provide.

It is contrary to law because it expressly ignores the decedents national


law, according to Article 10 of the Civil Code, such national law shall
govern his testamentary dispositions.

Therefore, the institution of the legatees are unconditional and are valid, as
well as those favorable to herein appellant-oppositor.

9|Page

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