G.R. No.
122191 October 8, 1998 and several security personnel heard her cries for
(NOTE: Subject matter of this case is the concept of foreign
element)
SAUDI ARABIAN AIRLINES, petitioner,
vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON.
RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch
89, Regional Trial Court of Quezon City, respondents.
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court
seeks to annul and set aside the Resolution1dated September 27, 1995
and the Decision2 dated April 10, 1996 of the Court of Appeals3 in
CA-G.R. SP No. 36533,4 and the Orders5 dated August 29, 1994 6 and
February 2, 19957 that were issued by the trial court in Civil Case No.
Q-93-18394.8
The pertinent antecedent facts which gave rise to the instant petition,
as stated in the questioned Decision9, are as follows:
On January 21, 1988 defendant SAUDIA hired
plaintiff as a Flight Attendant for its airlines based in
Jeddah, Saudi Arabia. . . .
On April 27, 1990, while on a lay-over in Jakarta,
Indonesia, plaintiff went to a disco dance with
fellow crew members Thamer Al-Gazzawi and Allah
Al-Gazzawi, both Saudi nationals. Because it was
almost morning when they returned to their hotels,
they agreed to have breakfast together at the room
of Thamer. When they were in te (sic) room, Allah
left on some pretext. Shortly after he did, Thamer
attempted to rape plaintiff. Fortunately, a roomboy
help and rescued her. Later, the Indonesian police
came and arrested Thamer and Allah Al-Gazzawi,
the latter as an accomplice.
When plaintiff returned to Jeddah a few days later,
several SAUDIA officials interrogated her about the
Jakarta incident. They then requested her to go back
to Jakarta to help arrange the release of Thamer and
Allah. In Jakarta, SAUDIA Legal Officer Sirah
Akkad and base manager Baharini negotiated with
the police for the immediate release of the detained
crew members but did not succeed because plaintiff
refused to cooperate. She was afraid that she might
be tricked into something she did not want because
of her inability to understand the local dialect. She
also declined to sign a blank paper and a document
written in the local dialect. Eventually, SAUDIA
allowed plaintiff to return to Jeddah but barred her
from the Jakarta flights.
Plaintiff learned that, through the intercession of the
Saudi Arabian government, the Indonesian
authorities agreed to deport Thamer and Allah after
two weeks of detention. Eventually, they were again
put in service by defendant SAUDI (sic). In
September 1990, defendant SAUDIA transferred
plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that
the Jakarta incident was already behind her, her
superiors requested her to see Mr. Ali Meniewy,
Chief Legal Officer of SAUDIA, in Jeddah, Saudi
Arabia. When she saw him, he brought her to the
police station where the police took her passport and
questioned her about the Jakarta incident. Miniewy
simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer
and Allah. Not until she agreed to do so did the
police return her passport and allowed her to catch
the afternoon flight out of Jeddah.
One year and a half later or on lune 16, 1993, in
Riyadh, Saudi Arabia, a few minutes before the
departure of her flight to Manila, plaintiff was not
allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Miniewy, the
Chief Legal Officer of SAUDIA. When she did, a
certain Khalid of the SAUDIA office brought her to a
Saudi court where she was asked to sign a document
written in Arabic. They told her that this was
necessary to close the case against Thamer and
Allah. As it turned out, plaintiff signed a notice to
her to appear before the court on June 27, 1993.
Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned
plaintiff to report to Jeddah once again and see
Miniewy on June 27, 1993 for further investigation.
Plaintiff did so after receiving assurance from
SAUDIA's Manila manager, Aslam Saleemi, that the
investigation was routinary and that it posed no
danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff
to the same Saudi court on June 27, 1993. Nothing
happened then but on June 28, 1993, a Saudi judge
interrogated plaintiff through an interpreter about
the Jakarta incident. After one hour of interrogation,
they let her go. At the airport, however, just as her
plane was about to take off, a SAUDIA officer told
her that the airline had forbidden her to take flight.
At the Inflight Service Office where she was told to
go, the secretary of Mr. Yahya Saddick took away
her passport and told her to remain in Jeddah, at the
crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again
escorted plaintiff to the same court where the judge,
to her astonishment and shock, rendered a decision,
translated to her in English, sentencing her to five
months imprisonment and to 286 lashes. Only then
did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened
in Jakarta. The court found plaintiff guilty of (1)
adultery; (2) going to a disco, dancing and listening
to the music in violation of Islamic laws; and (3)
socializing with the male crew, in contravention of
Islamic tradition. 10
Facing conviction, private respondent sought the help of her
employer, petitioner SAUDIA. Unfortunately, she was denied any
assistance. She then asked the Philippine Embassy in Jeddah to help
her while her case is on appeal. Meanwhile, to pay for her upkeep,
she worked on the domestic flight of SAUDIA, while Thamer and
Allah continued to serve in the international
flights. 11
Because she was wrongfully convicted, the Prince of Makkah
dismissed the case against her and allowed her to leave Saudi
Arabia. Shortly before her return to Manila, 12 she was terminated
from the service by SAUDIA, without her being informed of the
cause.
On November 23, 1993, Morada filed a Complaint 13 for damages
against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country
manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To
Dismiss 14 which raised the following grounds, to wit: (1) that the
Complaint states no cause of action against Saudia; (2) that
defendant Al-Balawi is not a real party in interest; (3) that the claim
or demand set forth in the Complaint has been waived, abandoned
or otherwise extinguished; and (4) that the trial court has no
jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To Motion to
Dismiss) 15. Saudia filed a reply 16 thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint 17 wherein
Al-Balawi was dropped as party defendant. On August 11, 1994,
Saudia filed its Manifestation and Motion to Dismiss Amended
Complaint 18.
The trial court issued an Order 19 dated August 29, 1994 denying the
Motion to Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judge 20 denying the Motion to
Dismiss, SAUDIA filed on September 20, 1994, its Motion for
Reconsideration 21 of the Order dated August 29, 1994. It alleged that
the trial court has no jurisdiction to hear and try the case on the basis
of Article 21 of the Civil Code, since the proper law applicable is the
law of the Kingdom of Saudi Arabia. On October 14, 1994, Morada
filed her Opposition 22(To Defendant's Motion for Reconsideration).
In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA
alleged that since its Motion for Reconsideration raised lack of
jurisdiction as its cause of action, the Omnibus Motion Rule does not
apply, even if that ground is raised for the first time on appeal.
Additionally, SAUDIA alleged that the Philippines does not have
any substantial interest in the prosecution of the instant case, and
hence, without jurisdiction to adjudicate the same.
Respondent Judge subsequently issued another Order 24 dated
February 2, 1995, denying SAUDIA's Motion for Reconsideration.
The pertinent portion of the assailed Order reads as follows:
Acting on the Motion for Reconsideration of
defendant Saudi Arabian Airlines filed, thru
counsel, on September 20, 1994, and the Opposition
thereto of the plaintiff filed, thru counsel, on October
14, 1994, as well as the Reply therewith of defendant
Saudi Arabian Airlines filed, thru counsel, on
October 24, 1994, considering that a perusal of the
plaintiffs Amended Complaint, which is one for the
recovery of actual, moral and exemplary damages
plus attorney's fees, upon the basis of the applicable
Philippine law, Article 21 of the New Civil Code of
the Philippines, is, clearly, within the jurisdiction of
this Court as regards the subject matter, and there
being nothing new of substance which might cause
the reversal or modification of the order sought to be
reconsidered, the motion for reconsideration of the
defendant, is DENIED.
SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition
for Certiorari and Prohibition with Prayer for Issuance of Writ of
Preliminary Injunction and/or Temporary Restraining Order 26 with
the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with
Temporary Restraining Order 27 dated February 23, 1995, prohibiting
the respondent Judge from further conducting any proceeding,
unless otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27, 1995, now
assailed, the appellate court denied SAUDIA's Petition for the
Issuance of a Writ of Preliminary Injunction dated February 18, 1995,
to wit:
The Petition for the Issuance of a Writ of Preliminary
Injunction is hereby DENIED, after considering the
 Answer, with Prayer to Deny Writ of Preliminary
Injunction (Rollo, p. 135) the Reply and Rejoinder, it
appearing that herein petitioner is not clearly
entitled thereto (Unciano Paramedical College,
et. Al., v. Court of Appeals, et. Al., 100335, April 7,
1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the
instant Petition 29 for Review with Prayer for Temporary Restraining
Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent
Court of Appeals rendered the Decision 30dated April 10, 1996, now
also assailed. It ruled that the Philippines is an appropriate forum
considering that the Amended Complaint's basis for recovery of
damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court. It further held that certiorari is not
the proper remedy in a denial of a Motion to Dismiss, inasmuch as
the petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review
with Prayer for Temporary Restraining Order 31 dated April 30, 1996,
given due course by this Court. After both parties submitted their
Memoranda, 32 the instant case is now deemed submitted for
decision.
Petitioner SAUDIA raised the following issues:
I 36533 has not yet become final and executory and
The trial court has no jurisdiction to hear and try
Civil Case No. Q-93-18394 based on Article 21 of the
New Civil Code since the proper law applicable is
the law of the Kingdom of Saudi Arabia inasmuch as
this case involves what is known in private
international law as a "conflicts problem".
Otherwise, the Republic of the Philippines will sit in
judgment of the acts done by another sovereign state
which is abhorred.
II
Leave of court before filing a supplemental pleading
is not a jurisdictional requirement. Besides, the
matter as to absence of leave of court is now moot
and academic when this Honorable Court required
the respondents to comment on petitioner's April 30,
1996 Supplemental Petition For Review With Prayer
For A Temporary Restraining Order Within Ten (10)
Days From Notice Thereof. Further, the Revised
Rules of Court should be construed with liberality
pursuant to Section 2, Rule 1 thereof.
III
Petitioner received on April 22, 1996 the April 10,
1996 decision in CA-G.R. SP NO. 36533 entitled
"Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et
al." and filed its April 30, 1996 Supplemental Petition
For Review With Prayer For A Temporary
Restraining Order on May 7, 1996 at 10:29 a.m. or
within the 15-day reglementary period as provided
for under Section 1, Rule 45 of the Revised Rules of
Court. Therefore, the decision in CA-G.R. SP NO.
this Honorable Court can take cognizance of this
case. 33
From the foregoing factual and procedural antecedents, the
following issues emerge for our resolution:
 I.
WHETHER RESPONDENT APPELLATE COURT
ERRED IN HOLDING THAT THE REGIONAL
TRIAL COURT OF QUEZON CITY HAS
JURISDICTION TO HEAR AND TRY CIVIL CASE
NO. Q-93-18394 ENTITLED "MILAGROS P.
MORADA V. SAUDI ARABIAN AIRLINES".
II.
WHETHER RESPONDENT APPELLATE COURT
ERRED IN RULING THAT IN THIS CASE
PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that
must be settled at the outset. It maintains that private respondent's
claim for alleged abuse of rights occurred in the Kingdom of Saudi
Arabia. It alleges that the existence of a foreign element qualifies the
instant case for the application of the law of the Kingdom of Saudi
Arabia, by virtue of the lex loci delicti commissi rule. 34
On the other hand, private respondent contends that since her
Amended Complaint is based on Articles 19 35 and 21 36 of the Civil
Code, then the instant case is properly a matter of domestic law. 37
Under the factual antecedents obtaining in this case, there is no
dispute that the interplay of events occurred in two states, the
Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint 38 dated
June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or
SAUDIA is a foreign airlines corporation doing
business in the Philippines. It may be served with
summons and other court processes at Travel Wide
Associated Sales (Phils.). Inc., 3rd Floor, Cougar
Building, 114 Valero St., Salcedo Village, Makati,
Metro Manila.
xxx xxx xxx
6. Plaintiff learned that, through the intercession of
the Saudi Arabian government, the Indonesian
authorities agreed to deport Thamer and Allah after
two weeks of detention. Eventually, they were again
put in service by defendant SAUDIA. In September
1990, defendant SAUDIA transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that
the Jakarta incident was already behind her, her superiors
reauested her to see MR. Ali Meniewy, Chief Legal
Officer of SAUDIA in Jeddah, Saudi Arabia. When she
saw him, he brought her to the police station where
the police took her passport and questioned her
about the Jakarta incident. Miniewy simply stood by
as the police put pressure on her to make a
statement dropping the case against Thamer and
Allah. Not until she agreed to do so did the police
return her passport and allowed her to catch the
afternoon flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in
Riyadh, Saudi Arabia, a few minutes before the
departure of her flight to Manila, plaintiff was not
allowed to board the plane and instead ordered to
take a later flight to Jeddah to see Mr. Meniewy, the
Chief Legal Officer of SAUDIA. When she did, a
certain Khalid of the SAUDIA office brought her to a
Saudi court where she was asked to sigh a document
written in Arabic. They told her that this was
necessary to close the case against Thamer and
Allah. As it turned out, plaintiff signed a notice to
her to appear before the court on June 27,
1993. Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned
plaintiff to report to Jeddah once again and see Miniewy
on June 27, 1993 for further investigation. Plaintiff did so
after receiving assurance from SAUDIA's Manila
manger, Aslam Saleemi, that the investigation was
routinary and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought
plaintiff to the same Saudi court on June 27, 1993.
Nothing happened then but on June 28, 1993, a
Saudi judge interrogated plaintiff through an
interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport,
however, just as her plane was about to take off, a
SAUDIA officer told her that the airline had
forbidden her to take that flight. At the Inflight
Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her
passport and told her to remain in Jeddah, at the
crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again
escorted plaintiff to the same court where the judge,
to her astonishment and shock, rendered a decision,
translated to her in English, sentencing her to five
months imprisonment and to 286 lashes. Only then
did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened
in Jakarta. The court found plaintiff guilty of (1)
adultery; (2) going to a disco, dancing, and listening
to the music in violation of Islamic laws; (3)
socializing with the male crew, in contravention of
Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the
case, plaintiff sought the help of the Philippines Embassy
in Jeddah. The latter helped her pursue an appeal
from the decision of the court. To pay for her
upkeep, she worked on the domestic flights of
defendant SAUDIA while, ironically, Thamer and
Allah freely served the international flights. 39
Where the factual antecedents satisfactorily establish the existence of
a foreign element, we agree with petitioner that the problem herein
could present a "conflicts" case.
A factual situation that cuts across territorial lines and is affected by
the diverse laws of two or more states is said to contain a "foreign
element". The presence of a foreign element is inevitable since social
and economic affairs of individuals and associations are rarely
confined to the geographic limits of their birth or conception. 40
The forms in which this foreign element may appear are
many. 41 The foreign element may simply consist in the fact that one
of the parties to a contract is an alien or has a foreign domicile, or
that a contract between nationals of one State involves properties
situated in another State. In other cases, the foreign element may
assume a complex form. 42
In the instant case, the foreign element consisted in the fact that
private respondent Morada is a resident Philippine national, and
that petitioner SAUDIA is a resident foreign corporation. Also, by
virtue of the employment of Morada with the petitioner Saudia as a
flight stewardess, events did transpire during her many occasions of
travel across national borders, particularly from Manila, Philippines
to Jeddah, Saudi Arabia, and vice versa, that caused a "conflicts"
situation to arise.
We thus find private respondent's assertion that the case is purely
domestic, imprecise. A conflicts problem presents itself here, and the
question of jurisdiction 43 confronts the court a quo.
After a careful study of the private respondent's Amended
Complaint, 44 and the Comment thereon, we note that she aptly
predicated her cause of action on Articles 19 and 21 of the New Civil
Code.
On one hand, Article 19 of the New Civil Code provides:
Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act with
justice give everyone his due and observe honesty
and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or
injury to another in a manner that is contrary to
morals, good customs or public policy shall
compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this
Court held that:
The aforecited provisions on human relations were
intended to expand the concept of torts in this
jurisdiction by granting adequate legal remedy for
the untold number of moral wrongs which is
impossible for human foresight to specifically
provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21
gives flesh to its provisions. Thus, we agree with private
respondent's assertion that violations of Articles 19 and 21 are
actionable, with judicially enforceable remedies in the municipal
forum.
Based on the allegations 46 in the Amended Complaint, read in the
light of the Rules of Court on jurisdiction 47 we find that the Regional
Trial Court (RTC) of Quezon City possesses jurisdiction over the
subject matter of the suit. 48 Its authority to try and hear the case is
provided for under Section 1 of Republic Act No. 7691, to wit:
Sec. 1. Section 19 of Batas Pambansa Blg. 129,
otherwise known as the "Judiciary Reorganization
Act of 1980", is hereby amended to read as follows:
Sec. 19. Jurisdiction in Civil Cases. — Regional Trial
Courts shall exercise exclusive jurisdiction:
xxx xxx xxx
(8) In all other cases in which
demand, exclusive of interest, damages
of whatever kind, attorney's fees,
litigation expenses, and cots or the
value of the property in controversy
exceeds One hundred thousand
pesos (P100,000.00) or, in such other
cases in Metro Manila, where the
demand, exclusive of the above-
mentioned items exceeds Two
hundred Thousand pesos
(P200,000.00). (Emphasis ours)
xxx xxx xxx
And following Section 2 (b), Rule 4 of the Revised Rules of Court —
the venue, Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. — [Now
Regional Trial Court]
 (a) xxx xxx xxx
(b) Personal actions. — All other actions may be
commenced and tried where the defendant or any of
the defendants resides or may be found, or where
the plaintiff or any of the plaintiff resides, at the
election of the plaintiff.
Pragmatic considerations, including the convenience of the parties,
also weigh heavily in favor of the RTC Quezon City assuming
jurisdiction. Paramount is the private interest of the litigant.
Enforceability of a judgment if one is obtained is quite obvious.
Relative advantages and obstacles to a fair trial are equally
important. Plaintiff may not, by choice of an inconvenient forum,
"vex", "harass", or "oppress" the defendant, e.g. by inflicting upon
him needless expense or disturbance. But unless the balance is
strongly in favor of the defendant, the plaintiffs choice of forum
should rarely be disturbed. 49
Weighing the relative claims of the parties, the court a quo found it
best to hear the case in the Philippines. Had it refused to take
cognizance of the case, it would be forcing plaintiff (private
respondent now) to seek remedial action elsewhere, i.e. in the
Kingdom of Saudi Arabia where she no longer maintains substantial
connections. That would have caused a fundamental unfairness to
her.
Moreover, by hearing the case in the Philippines no unnecessary
difficulties and inconvenience have been shown by either of the
parties. The choice of forum of the plaintiff (now private respondent)
should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons
of the parties herein. By filing her Complaint and Amended
Complaint with the trial court, private respondent has voluntary
submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several
motions 50 praying for the dismissal of Morada's Amended
Complaint. SAUDIA also filed an Answer In Ex Abundante
Cautelam dated February 20, 1995. What is very patent and explicit
from the motions filed, is that SAUDIA prayed for other reliefs
under the premises. Undeniably, petitioner SAUDIA has effectively
submitted to the trial court's jurisdiction by praying for the dismissal
of the Amended Complaint on grounds other than lack of
jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.: 51
We observe that the motion to dismiss filed on April
14, 1962, aside from disputing the lower court's
jurisdiction over defendant's person, prayed for
dismissal of the complaint on the ground that
plaintiff's cause of action has prescribed. By
interposing such second ground in its motion to
dismiss, Ker and Co., Ltd. availed of an affirmative
defense on the basis of which it prayed the court to
resolve controversy in its favor. For the court to
validly decide the said plea of defendant Ker & Co.,
Ltd., it necessarily had to acquire jurisdiction upon
the latter's person, who, being the proponent of the
affirmative defense, should be deemed to have
abandoned its special appearance and voluntarily
submitted itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that;
When the appearance is by motion for the purpose
of objecting to the jurisdiction of the court over the
person, it must be for the sole and separate purpose
of objecting to the jurisdiction of the court. If his
motion is for any other purpose than to object to the
jurisdiction of the court over his person, he thereby
submits himself to the jurisdiction of the court. A
 special appearance by motion made for the purpose
of objecting to the jurisdiction of the court over the
person will be held to be a general appearance, if the
party in said motion should, for example, ask for a
dismissal of the action upon the further ground that
the court had no jurisdiction over the subject
matter. 52
Clearly, petitioner had submitted to the jurisdiction of the Regional
Trial Court of Quezon City. Thus, we find that the trial court has
jurisdiction over the case and that its exercise thereof, justified.
As to the choice of applicable law, we note that choice-of-law
problems seek to answer two important questions: (1) What legal
system should control a given situation where some of the
significant facts occurred in two or more states; and (2) to what
extent should the chosen legal system regulate the situation. 53
Several theories have been propounded in order to identify the legal
system that should ultimately control. Although ideally, all choice-
of-law theories should intrinsically advance both notions of justice
and predictability, they do not always do so. The forum is then faced
with the problem of deciding which of these two important values
should be stressed. 54
Before a choice can be made, it is necessary for us to determine
under what category a certain set of facts or rules fall. This process is
known as "characterization", or the "doctrine of qualification". It is
the "process of deciding whether or not the facts relate to the kind of
question specified in a conflicts rule." 55The purpose of
"characterization" is to enable the forum to select the proper law. 56
Our starting point of analysis here is not a legal relation, but a factual
situation, event, or operative fact. 57An essential element of conflict
rules is the indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a factual
relationship (such as property right, contract claim) and a connecting
factor or point of contact, such as the situs of the res, the place of
celebration, the place of performance, or the place of wrongdoing. 58
Note that one or more circumstances may be present to serve as the
possible test for the determination of the applicable law. 59 These
"test factors" or "points of contact" or "connecting factors" could be
any of the following:
(1) The nationality of a person, his domicile, his
residence, his place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a
corporation;
(3) the situs of a thing, that is, the place where a
thing is, or is deemed to be situated. In particular,
the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus,
such as the place where a contract has been made, a
marriage celebrated, a will signed or a tort committed.
The lex loci actus is particularly important in contracts
and torts;
(5) the place where an act is intended to come into
effect, e.g., the place of performance of contractual
duties, or the place where a power of attorney is to
be exercised;
(6) the intention of the contracting parties as to the
law that should govern their agreement, thelex loci
intentionis;
(7) the place where judicial or administrative
proceedings are instituted or done. The lex fori — the
law of the forum — is particularly important
 because, as we have seen earlier, matters of
"procedure" not going to the substance of the claim
involved are governed by it; and because the lex
fori applies whenever the content of the otherwise
applicable foreign law is excluded from application
in a given case for the reason that it falls under one
of the exceptions to the applications of foreign law;
and
(8) the flag of a ship, which in many cases is decisive
of practically all legal relationships of the ship and
of its master or owner as such. It also covers
contractual relationships particularly contracts of
affreightment. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including
allegations in the Amended Complaint deemed admitted for
purposes of the motion to dismiss, we are convinced that there is
reasonable basis for private respondent's assertion that although she
was already working in Manila, petitioner brought her to Jeddah on
the pretense that she would merely testify in an investigation of the
charges she made against the two SAUDIA crew members for the
attack on her person while they were in Jakarta. As it turned out, she
was the one made to face trial for very serious charges, including
adultery and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the
"handing over" or "turning over" of the person of private respondent
to Jeddah officials, petitioner may have acted beyond its duties as
employer. Petitioner's purported act contributed to and amplified or
even proximately caused additional humiliation, misery and
suffering of private respondent. Petitioner thereby allegedly
facilitated the arrest, detention and prosecution of private
respondent under the guise of petitioner's authority as employer,
taking advantage of the trust, confidence and faith she reposed upon
it. As purportedly found by the Prince of Makkah, the alleged
conviction and imprisonment of private respondent was wrongful.
But these capped the injury or harm allegedly inflicted upon her
person and reputation, for which petitioner could be liable as
claimed, to provide compensation or redress for the wrongs done,
once duly proven.
Considering that the complaint in the court a quo is one involving
torts, the "connecting factor" or "point of contact" could be the place
or places where the tortious conduct or lex loci actus occurred. And
applying the torts principle in a conflicts case, we find that the
Philippines could be said as a situs of the tort (the place where the
alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent,
a Filipina residing and working here. According to her, she had
honestly believed that petitioner would, in the exercise of its rights
and in the performance of its duties, "act with justice, give her due
and observe honesty and good faith." Instead, petitioner failed to
protect her, she claimed. That certain acts or parts of the injury
allegedly occurred in another country is of no moment. For in our
view what is important here is the place where the over-all harm or
the totality of the alleged injury to the person, reputation, social
standing and human rights of complainant, had lodged, according to
the plaintiff below (herein private respondent). All told, it is not
without basis to identify the Philippines as the situs of the alleged
tort.
Moreover, with the widespread criticism of the traditional rule of lex
loci delicti commissi, modern theories and rules on tort liability 61 have
been advanced to offer fresh judicial approaches to arrive at just
results. In keeping abreast with the modern theories on tort liability,
we find here an occasion to apply the "State of the most significant
relationship" rule, which in our view should be appropriate to apply
now, given the factual context of this case.
In applying said principle to determine the State which has the most
significant relationship, the following contacts are to be taken into
account and evaluated according to their relative importance with
respect to the particular issue: (a) the place where the injury
occurred; (b) the place where the conduct causing the injury Lastly, no error could be imputed to the respondent appellate court
occurred; (c) the domicile, residence, nationality, place of in upholding the trial court's denial of defendant's (herein
incorporation and place of business of the parties, and (d) the place petitioner's) motion to dismiss the case. Not only was jurisdiction in
where the relationship, if any, between the parties is centered. 62 order and venue properly laid, but appeal after trial was obviously
available, and expeditious trial itself indicated by the nature of the
As already discussed, there is basis for the claim that over-all injury case at hand. Indubitably, the Philippines is the state intimately
occurred and lodged in the Philippines. There is likewise no question concerned with the ultimate outcome of the case below, not just for
that private respondent is a resident Filipina national, working with the benefit of all the litigants, but also for the vindication of the
petitioner, a resident foreign corporation engaged here in the country's system of law and justice in a transnational setting. With
business of international air carriage. Thus, the "relationship" these guidelines in mind, the trial court must proceed to try and
between the parties was centered here, although it should be adjudge the case in the light of relevant Philippine law, with due
stressed that this suit is not based on mere labor law violations. From consideration of the foreign element or elements involved. Nothing
the record, the claim that the Philippines has the most significant said herein, of course, should be construed as prejudging the results
contact with the matter in this dispute, 63 raised by private of the case in any manner whatsoever.
respondent as plaintiff below against defendant (herein petitioner),
in our view, has been properly established. WHEREFORE, the instant petition for certiorari is hereby
DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P.
Prescinding from this premise that the Philippines is the situs of the Morada vs. Saudi Arabia Airlines" is hereby REMANDED to
tort complained of and the place "having the most interest in the Regional Trial Court of Quezon City, Branch 89 for further
problem", we find, by way of recapitulation, that the Philippine law proceedings.
on tort liability should have paramount application to and control in
the resolution of the legal issues arising out of this case. Further, we SO ORDERED.
hold that the respondent Regional Trial Court has jurisdiction over
the parties and the subject matter of the complaint; the appropriate
venue is in Quezon City, which could properly apply Philippine law.
Moreover, we find untenable petitioner's insistence that "[s]ince
private respondent instituted this suit, she has the burden of
pleading and proving the applicable Saudi law on the matter." 64As
aptly said by private respondent, she has "no obligation to plead and
prove the law of the Kingdom of Saudi Arabia since her cause of
action is based on Articles 19 and 21" of the Civil Code of the
Philippines. In her Amended Complaint and subsequent pleadings,
she never alleged that Saudi law should govern this case. 65 And as
correctly held by the respondent appellate court, "considering that it
was the petitioner who was invoking the applicability of the law of
Saudi Arabia, then the burden was on it [petitioner] to plead and to
establish what the law of Saudi Arabia is". 66
G.R. No. 149177 November 23, 2007
(NOTE: Subject matter of this case is about the stages in the
resolution of a conflicts problem)
KAZUHIRO HASEGAWA and NIPPON ENGINEERING
CONSULTANTS CO., LTD., Petitioners,
vs.
MINORU KITAMURA, Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45
of the Rules of Court assailing the April 18, 2001 Decision1 of the
Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25,
2001 Resolution2 denying the motion for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co.,
Ltd. (Nippon), a Japanese consultancy firm providing technical and
management support in the infrastructure projects of foreign
governments,3 entered into an Independent Contractor Agreement
(ICA) with respondent Minoru Kitamura, a Japanese national
permanently residing in the Philippines.4 The agreement provides
that respondent was to extend professional services to Nippon for a
year starting on April 1, 1999.5 Nippon then assigned respondent to
work as the project manager of the Southern Tagalog Access Road
(STAR) Project in the Philippines, following the company's
consultancy contract with the Philippine Government.6
When the STAR Project was near completion, the Department of
Public Works and Highways (DPWH) engaged the consultancy
services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler
Road Improvement (BBRI) Project.7 Respondent was named as the
project manager in the contract's Appendix 3.1.8
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's
general manager for its International Division, informed respondent
that the company had no more intention of automatically renewing
his ICA. His services would be engaged by the company only up to
the substantial completion of the STAR Project on March 31, 2000,
just in time for the ICA's expiry.9
Threatened with impending unemployment, respondent, through
his lawyer, requested a negotiation conference and demanded that
he be assigned to the BBRI project. Nippon insisted that respondent’s
contract was for a fixed term that had already expired, and refused
to negotiate for the renewal of the ICA.10
As he was not able to generate a positive response from the
petitioners, respondent consequently initiated on June 1, 2000 Civil
Case No. 00-0264 for specific performance and damages with the
Regional Trial Court of Lipa City.11
For their part, petitioners, contending that the ICA had been
perfected in Japan and executed by and between Japanese nationals,
moved to dismiss the complaint for lack of jurisdiction. They
asserted that the claim for improper pre-termination of respondent's
ICA could only be heard and ventilated in the proper courts of Japan
following the principles of lex loci celebrationis and lex contractus.12
In the meantime, on June 20, 2000, the DPWH approved Nippon's
request for the replacement of Kitamura by a certain Y. Kotake as
project manager of the BBRI Project.13
On June 29, 2000, the RTC, invoking our ruling in Insular Government
v. Frank14 that matters connected with the performance of contracts
are regulated by the law prevailing at the place of
performance,15 denied the motion to dismiss.16 The trial court
subsequently denied petitioners' motion for
reconsideration,17 prompting them to file with the appellate court, on
August 14, 2000, their first Petition for Certiorari under Rule 65
[docketed as CA-G.R. SP No. 60205].18 On August 23, 2000, the CA
resolved to dismiss the petition on procedural grounds—for lack of
statement of material dates and for insufficient verification and
certification against forum shopping.19 An Entry of Judgment was
later issued by the appellate court on September 20, 2000. 20
Aggrieved by this development, petitioners filed with the CA, on
September 19, 2000, still within the reglementary period,
a second Petition for Certiorari under Rule 65 already stating therein
the material dates and attaching thereto the proper verification and
certification. This second petition, which substantially raised the
same issues as those in the first, was docketed as CA-G.R. SP
No. 60827.21
Ruling on the merits of the second petition, the appellate court
rendered the assailed April 18, 2001 Decision22finding no grave
abuse of discretion in the trial court's denial of the motion to dismiss.
The CA ruled, among others, that the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the
pleadings was the validity of the written agreement put in issue. The
CA thus declared that the trial court was correct in applying instead
the principle of lex loci solutionis.23
Petitioners' motion for reconsideration was subsequently denied by
the CA in the assailed July 25, 2001 Resolution.24
Remaining steadfast in their stance despite the series of denials,
petitioners instituted the instant Petition for Review
on Certiorari25 imputing the following errors to the appellate court:
A. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN FINDING THAT THE TRIAL COURT VALIDLY
EXERCISED JURISDICTION OVER THE INSTANT
CONTROVERSY, DESPITE THE FACT THAT THE
CONTRACT SUBJECT MATTER OF THE
PROCEEDINGS A QUO WAS ENTERED INTO BY AND
BETWEEN TWO JAPANESE NATIONALS, WRITTEN
WHOLLY IN THE JAPANESE LANGUAGE AND
EXECUTED IN TOKYO, JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN OVERLOOKING THE NEED TO REVIEW OUR
ADHERENCE TO THE PRINCIPLE OF LEX LOCI
SOLUTIONIS IN THE LIGHT OF RECENT
DEVELOPMENT[S] IN PRIVATE INTERNATIONAL
LAWS.26
The pivotal question that this Court is called upon to resolve is
whether the subject matter jurisdiction of Philippine courts in civil
cases for specific performance and damages involving contracts
executed outside the country by foreign nationals may be assailed on
the principles of lex loci celebrationis, lex contractus, the "state of the
most significant relationship rule," or forum non conveniens.
However, before ruling on this issue, we must first dispose of the
procedural matters raised by the respondent.
Kitamura contends that the finality of the appellate court's decision
in CA-G.R. SP No. 60205 has already barred the filing of the second
petition docketed as CA-G.R. SP No. 60827 (fundamentally raising
the same issues as those in the first one) and the instant petition for
review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on
account of the petition's defective certification of non-forum
shopping, it was a dismissal without prejudice.27 The same holds
true in the CA's dismissal of the said case due to defects in the
formal requirement of verification28 and in the other requirement in
Rule 46 of the Rules of Court on the statement of the material
dates.29 The dismissal being without prejudice, petitioners can re-file
the petition, or file a second petition attaching thereto the
appropriate verification and certification—as they, in fact did—and
stating therein the material dates, within the prescribed period 30 in
Section 4, Rule 65 of the said Rules.31
The dismissal of a case without prejudice signifies the absence of a
decision on the merits and leaves the parties free to litigate the
matter in a subsequent action as though the dismissed action had not
been commenced. In other words, the termination of a case not on
the merits does not bar another action involving the same parties, on
the same subject matter and theory.32
Necessarily, because the said dismissal is without prejudice and has
no res judicata effect, and even if petitioners still indicated in the
verification and certification of the second certiorari petition that the
first had already been dismissed on procedural
grounds,33 petitioners are no longer required by the Rules to indicate
in their certification of non-forum shopping in the instant petition for
review of the second certiorari petition, the status of the aforesaid first
petition before the CA. In any case, an omission in the certificate of
non-forum shopping about any event that will not constitute res
judicata and litis pendentia, as in the present case, is not a fatal
defect. It will not warrant the dismissal and nullification of the entire
proceedings, considering that the evils sought to be prevented by the
said certificate are no longer present.34
The Court also finds no merit in respondent's contention that
petitioner Hasegawa is only authorized to verify and certify, on
behalf of Nippon, the certiorari petition filed with the CA and not the
instant petition. True, the Authorization35 dated September 4, 2000,
which is attached to the second certiorari petition and which is also
attached to the instant petition for review, is limited in scope—its
wordings indicate that Hasegawa is given the authority to sign for
and act on behalf of the company only in the petition filed with the
appellate court, and that authority cannot extend to the instant
petition for review.36 In a plethora of cases, however, this Court has
liberally applied the Rules or even suspended its application
whenever a satisfactory explanation and a subsequent fulfillment of
the requirements have been made.37 Given that petitioners herein
sufficiently explained their misgivings on this point and appended
to their Reply38 an updated Authorization39 for Hasegawa to act on
behalf of the company in the instant petition, the Court finds the
same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the
defect in the verification and certification. As respondent pointed
out, and to which we agree, Hasegawa is truly not authorized to act
on behalf of Nippon in this case. The aforesaid September 4, 2000
Authorization and even the subsequent August 17, 2001
Authorization were issued only by Nippon's president and chief
executive officer, not by the company's board of directors. In not a
few cases, we have ruled that corporate powers are exercised by the
board of directors; thus, no person, not even its officers, can bind the
corporation, in the absence of authority from the
board.40 Considering that Hasegawa verified and certified the
petition only on his behalf and not on behalf of the other petitioner,
the petition has to be denied pursuant to Loquias v. Office of the
Ombudsman.41 Substantial compliance will not suffice in a matter that
demands strict observance of the Rules.42 While technical rules of
procedure are designed not to frustrate the ends of justice,
nonetheless, they are intended to effect the proper and orderly
disposition of cases and effectively prevent the clogging of court
dockets.43
Further, the Court has observed that petitioners incorrectly filed a
Rule 65 petition to question the trial court's denial of their motion to
dismiss. It is a well-established rule that an order denying a motion
to dismiss is interlocutory, and cannot be the subject of the
extraordinary petition for certiorari or mandamus. The appropriate
recourse is to file an answer and to interpose as defenses the
objections raised in the motion, to proceed to trial, and, in case of an
adverse decision, to elevate the entire case by appeal in due
course.44 While there are recognized exceptions to this
rule,45 petitioners' case does not fall among them.
This brings us to the discussion of the substantive issue of the case.
Asserting that the RTC of Lipa City is an inconvenient forum,
petitioners question its jurisdiction to hear and resolve the civil case
for specific performance and damages filed by the respondent. The
ICA subject of the litigation was entered into and perfected in Tokyo,
Japan, by Japanese nationals, and written wholly in the Japanese
language. Thus, petitioners posit that local courts have no substantial
relationship to the parties46 following the [state of the] most
significant relationship rule in Private International Law.47
The Court notes that petitioners adopted an additional but different
theory when they elevated the case to the appellate court. In the
Motion to Dismiss48 filed with the trial court, petitioners never
contended that the RTC is an inconvenient forum. They merely
argued that the applicable law which will determine the validity or
invalidity of respondent's claim is that of Japan, following the
principles of lex loci celebrationis and lex contractus.49 While not
abandoning this stance in their petition before the appellate court,
petitioners on certiorari significantly invoked the defense of forum
non conveniens.50 On petition for review before this Court, petitioners
dropped their other arguments, maintained the forum non
conveniens defense, and introduced their new argument that the
applicable principle is the [state of the] most significant relationship
rule.51
Be that as it may, this Court is not inclined to deny this petition
merely on the basis of the change in theory, as explained in Philippine
Ports Authority v. City of Iloilo.52 We only pointed out petitioners'
inconstancy in their arguments to emphasize their incorrect assertion
of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts problems, three
consecutive phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to these
phases are the following questions: (1) Where can or should
litigation be initiated? (2) Which law will the court apply? and (3)
Where can the resulting judgment be enforced?53
Analytically, jurisdiction and choice of law are two distinct
concepts.54 Jurisdiction considers whether it is fair to cause a
defendant to travel to this state; choice of law asks the further
question whether the application of a substantive law which will
determine the merits of the case is fair to both parties. The power to
exercise jurisdiction does not automatically give a state
constitutional authority to apply forum law. While jurisdiction and
the choice of the lex fori will often coincide, the "minimum contacts"
for one do not always provide the necessary "significant contacts" for
the other.55 The question of whether the law of a state can be applied
to a transaction is different from the question of whether the courts
of that state have jurisdiction to enter a judgment.56
In this case, only the first phase is at issue—
jurisdiction.1âwphi1 Jurisdiction, however, has various aspects. For a
court to validly exercise its power to adjudicate a controversy, it
must have jurisdiction over the plaintiff or the petitioner, over the
defendant or the respondent, over the subject matter, over the issues
of the case and, in cases involving property, over the res or the thing
which is the subject of the litigation.57 In assailing the trial court's
jurisdiction herein, petitioners are actually referring to subject matter
jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is
conferred by the sovereign authority which establishes and
organizes the court. It is given only by law and in the manner
prescribed by law.58 It is further determined by the allegations of the
complaint irrespective of whether the plaintiff is entitled to all or
some of the claims asserted therein.59 To succeed in its motion for the
dismissal of an action for lack of jurisdiction over the subject matter
of the claim,60 the movant must show that the court or tribunal
cannot act on the matter submitted to it because no law grants it the
power to adjudicate the claims.61
In the instant case, petitioners, in their motion to dismiss, do not
claim that the trial court is not properly vested by law with
jurisdiction to hear the subject controversy for, indeed, Civil Case
No. 00-0264 for specific performance and damages is one not capable
of pecuniary estimation and is properly cognizable by the RTC of
Lipa City.62 What they rather raise as grounds to question subject
matter jurisdiction are the principles of lex loci celebrationis and lex
contractus, and the "state of the most significant relationship rule."
The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the "law of the place of the
ceremony"63 or the law of the place where a contract is made. 64 The
doctrine of lex contractus or lex loci contractus means the "law of the
place where a contract is executed or to be performed." 65 It controls
the nature, construction, and validity of the contract66 and it may
pertain to the law voluntarily agreed upon by the parties or the law
intended by them either expressly or implicitly.67 Under the "state of
the most significant relationship rule," to ascertain what state law to
apply to a dispute, the court should determine which state has the
most substantial connection to the occurrence and the parties. In a
case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the
domicile, place of business, or place of incorporation of the
parties.68 This rule takes into account several contacts and evaluates
them according to their relative importance with respect to the
particular issue to be resolved.69
Since these three principles in conflict of laws make reference to the
law applicable to a dispute, they are rules proper for the second
phase, the choice of law.70 They determine which state's law is to be
applied in resolving the substantive issues of a conflicts
problem.71 Necessarily, as the only issue in this case is that of
jurisdiction, choice-of-law rules are not only inapplicable but also
not yet called for.
Further, petitioners' premature invocation of choice-of-law rules is
exposed by the fact that they have not yet pointed out any conflict
between the laws of Japan and ours. Before determining which law
should apply, first there should exist a conflict of laws situation
requiring the application of the conflict of laws rules.72 Also, when
the law of a foreign country is invoked to provide the proper rules
for the solution of a case, the existence of such law must be pleaded
and proved.73
It should be noted that when a conflicts case, one involving a foreign
element, is brought before a court or administrative agency, there are
three alternatives open to the latter in disposing of it: (1) dismiss the
case, either because of lack of jurisdiction or refusal to assume
jurisdiction over the case; (2) assume jurisdiction over the case and
apply the internal law of the forum; or (3) assume jurisdiction over
the case and take into account or apply the law of some other State
or States.74 The court’s power to hear cases and controversies is
derived from the Constitution and the laws. While it may choose to
recognize laws of foreign nations, the court is not limited by foreign
sovereign law short of treaties or other formal agreements, even in
matters regarding rights provided by foreign sovereigns.75
Neither can the other ground raised, forum non conveniens,76 be used
to deprive the trial court of its jurisdiction herein. First, it is not a
proper basis for a motion to dismiss because Section 1, Rule 16 of the
Rules of Court does not include it as a ground.77 Second, whether a
suit should be entertained or dismissed on the basis of the said
doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court.78 In this case, the
RTC decided to assume jurisdiction. Third, the propriety of
dismissing a case based on this principle requires a factual
determination; hence, this conflicts principle is more properly
considered a matter of defense.79
Accordingly, since the RTC is vested by law with the power to
entertain and hear the civil case filed by respondent and the grounds
raised by petitioners to assail that jurisdiction are inappropriate, the
trial and appellate courts correctly denied the petitioners’ motion to
dismiss.

WHEREFORE, premises considered, the petition for review

on certiorari is DENIED.

SO ORDERED.