1. Saudi Arabian Airlines v.

CA

Milagros Morada was working as a stewardess for Saudia Arabian Airlines. In 1990, while she
and some co-workers were in a lay-over in Jakarta, Indonesia, an Arab co-worker tried to rape
her in a hotel room. Fortunately, a roomboy heard her cry for help and two of her Arab co-
workers were arrested and detained in Indonesia. Later, Saudia Airlines re-assigned her to work
in their Manila office. While working in Manila, Saudia Airlines advised her to meet with a Saudia
Airlines officer in Saudi. She did but to her surprise, she was brought to a Saudi court where she
was interrogated and eventually sentenced to 5 months imprisonment and 289 lashes; she
allegedly violated Muslim customs by partying with males. The Prince of Makkah got wind of her
conviction and the Prince determined that she was wrongfully convicted hence the Prince
absolved her and sent her back to the Philippines. Saudia Airlines later on dismissed Morada.
Morada then sued Saudia Airlines for damages under Article 19 and 21 of the Civil Code.
Saudia Airlines filed a motion to dismiss on the ground that the RTC has no jurisdiction over the
case because the applicable law should be the law of Saudi Arabia. Saudia Airlines also prayed
for other reliefs under the premises.

ISSUE: Whether or not Saudia Airlines’ contention is correct.

HELD: No. Firstly, the RTC has acquired jurisdiction over Saudia Airlines when the latter filed a
motion to dismiss with petition for other reliefs. The asking for other reliefs effectively asked the
court to make a determination of Saudia Airlines’s rights hence a submission to the court’s
jurisdiction.

Secondly, the RTC has acquired jurisdiction over the case because as alleged in the complaint
of Morada, she is bringing the suit for damages under the provisions of our Civil Law and not of
the Arabian Law. Morada then has the right to file it in the QC RTC because under the Rules of
Court, a plaintiff may elect whether to file an action in personam (case at bar) in the place where
she resides or where the defendant resides. Obviously, it is well within her right to file the case
here because if she’ll file it in Saudi Arabia, it will be very disadvantageous for her (and of
course, again, Philippine Civil Law is the law invoked).

Thirdly, one important test factor to determine where to file a case, if there is a foreign element
involved, is the so called “locus actus” or where an act has been done. In the case at bar,
Morada was already working in Manila when she was summoned by her superior to go to Saudi
Arabia to meet with a Saudia Airlines officer. She was not informed that she was going to
appear in a court trial. Clearly, she was defrauded into appearing before a court trial which led
to her wrongful conviction. The act of defrauding, which is tortuous, was committed in Manila
and this led to her humiliation, misery, and suffering. And applying the torts principle in a
conflicts case, the SC finds that the Philippines could be said as a situs of the tort (the place
where the alleged tortious conduct took place).
 2. HSBC v. Sherman

FACTS: It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd.
(COMPANY), a company incorporated in Singapore applied with and was granted by HSBC
Singapore branch an overdraft facility in the maximum amount of Singapore dollars 200,000
with interest at 3% over HSBC prime rate, payable monthly, on amounts due under said
overdraft facility.

As a security for the repayment by the COMPANY of sums advanced by HSBC to it through the
aforesaid overdraft facility, in 1982, both private respondents and a certain Lowe, all of whom
were directors of the COMPANY at such time, executed a Joint and Several Guarantee in favor
of HSBC whereby private respondents and Lowe agreed to pay, jointly and severally, on
demand all sums owed by the COMPANY to petitioner BANK under the aforestated overdraft
facility.

The Joint and Several Guarantee provides, inter alia, that:

This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and
determined under and may be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts of Singapore shall have jurisdiction over all
disputes arising under this guarantee. …

The COMPANY failed to pay its obligation. Thus, HSBC demanded payment and inasmuch as
the private respondents still failed to pay, HSBC filed A complaint for collection of a sum of
money against private respondents Sherman and Reloj before RTC of Quezon City.

Private respondents filed an MTD on the ground of lack of jurisdiction over the subject matter.
The trial court denied the motion. They then filed before the respondent IAC a petition for
prohibition with preliminary injunction and/or prayer for a restraining order. The IAC rendered a
decision enjoining the RTC Quezon City from taking further cognizance of the case and to
dismiss the same for filing with the proper court of Singapore which is the proper forum. MR
denied, hence this petition.

ISSUE: Do Philippine courts have jurisdiction over the suit, vis-a-vis the Guarantee stipulation
regarding jurisdiction?

HELD: YES

One basic principle underlies all rules of jurisdiction in International Law: a State does not have
jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings
are in rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on
some minimum contacts that will not offend traditional notions of fair play and substantial justice

The defense of private respondents that the complaint should have been filed in Singapore is
based merely on technicality. They did not even claim, much less prove, that the filing of the
action here will cause them any unnecessary trouble, damage, or expense. On the other hand,
there is no showing that petitioner BANK filed the action here just to harass private respondents.

In the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., where the stipulation was “[i]n case
of litigation, jurisdiction shall be vested in the Court of Davao City.” We held:

Anent the claim that Davao City had been stipulated as the venue, suffice it to say that a
stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or
defendant under Section 2 (b), Rule 4, ROC, in the absence of qualifying or restrictive words in
the agreement which would indicate that the place named is the only venue agreed upon by the
parties.

Applying the foregoing to the case at bar, the parties did not thereby stipulate that only the
courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in
question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is
often defined as the light of a State to exercise authority over persons and things within its
boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over
travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign
military units stationed in or marching through State territory with the permission of the latter’s
authorities. This authority, which finds its source in the concept of sovereignty, is exclusive
within and throughout the domain of the State. A State is competent to take hold of any judicial
matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases
brought before them

NOTES:

The respondent IAC likewise ruled that:

… In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by
law to exercise jurisdiction. And even if it is so authorized, it may still refuse to entertain the
case by applying the principle of forum non conveniens. …

However, whether a suit should be entertained or dismissed on the basis of the principle of
forum non conveniens depends largely upon the facts of the particular case and is addressed to
the sound discretion of the trial court. Thus, the IAC should not have relied on such principle.
 3. ISAE vs. QUISUMBING

FACTS:

Private respondent International School, Inc. (School), pursuant to PD 732, is a domestic

educational institution established primarily for dependents of foreign diplomatic personnel and
other temporary residents. The decree authorizes the School to employ its own teaching and
management personnel selected by it either locally or abroad, from Philippine or other
nationalities, such personnel being exempt from otherwise applicable laws and regulations
attending their employment, except laws that have been or will be enacted for the protection of
employees. School hires both foreign and local teachers as members of its faculty, classifying
the same into two: (1) foreign-hires and (2) local-hires.

The School grants foreign-hires certain benefits not accorded local-hires. Foreign-hires are also
paid a salary rate 25% more than local-hires.

When negotiations for a new CBA were held on June 1995, petitioner ISAE, a legitimate labor
union and the collective bargaining representative of all faculty members of the School,
contested the difference in salary rates between foreign and local-hires. This issue, as well as
the question of whether foreign-hires should be included in the appropriate bargaining unit,
eventually caused a deadlock between the parties.

ISAE filed a notice of strike. Due to the failure to reach a compromise in the NCMB, the matter
reached the DOLE which favored the School. Hence this petition.

ISSUE:

Whether the foreign-hires should be included in bargaining unit of local- hires.

RULING:

NO. The Constitution, Article XIII, Section 3, specifically provides that labor is entitled to
“humane conditions of work.” These conditions are not restricted to the physical workplace – the
factory, the office or the field – but include as well the manner by which employers treat their
employees.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 248
declares it an unfair labor practice for an employer to discriminate in regard to wages in order to
encourage or discourage membership in any labor organization.

The Constitution enjoins the State to “protect the rights of workers and promote their welfare, In
Section 18, Article II of the constitution mandates “to afford labor full protection”. The State has
the right and duty to regulate the relations between labor and capital. These relations are not
merely contractual but are so impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common good.

However, foreign-hires do not belong to the same bargaining unit as the local-hires.

A bargaining unit is a group of employees of a given employer, comprised of all or less than all
of the entire body of employees, consistent with equity to the employer indicate to be the best
suited to serve the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law.

The factors in determining the appropriate collective bargaining unit are (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions (Substantial
Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment
status. The basic test of an asserted bargaining unit’s acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights.

In the case at bar, it does not appear that foreign-hires have indicated their intention to be
grouped together with local-hires for purposes of collective bargaining. The collective bargaining
history in the School also shows that these groups were always treated separately. Foreign-
hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform
similar functions under the same working conditions as the local-hires, foreign-hires are
accorded certain benefits not granted to local-hires such as housing, transportation, shipping
costs, taxes and home leave travel allowances. These benefits are reasonably related to their
status as foreign-hires, and justify the exclusion of the former from the latter. To include foreign-
hires in a bargaining unit with local-hires would not assure either group the exercise of their
respective collective bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN
PART.
 4. Salvacion v. Central Bank

FACTS: Greg Bartelli, an American tourist, was arrested for committing four counts of rape and
serious illegal detention against Karen Salvacion. Police recovered from him several dollar
checks and a dollar account in the China Banking Corp. He was, however, able to escape from
prison. In a civil case filed against him, the trial court awarded Salvacion moral, exemplary and
attorney’s fees amounting to almost P1,000,000.00.

Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking
Corp. but the latter refused arguing that Section 11 of Central Bank Circular No. 960 exempts
foreign currency deposits from attachment, garnishment, or any other order or process of any
court, legislative body, government agency or any administrative body whatsoever. Salvacion
therefore filed this action for declaratory relief in the Supreme Court.

ISSUE: Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No.
6426, as amended by PD 1246, otherwise known as the Foreign Currency Deposit Act be made
applicable to a foreign transient?

HELD: NO.

The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it
amends Section 8 of Republic Act No. 6426, are hereby held to be INAPPLICABLE to this case
because of its peculiar circumstances. Respondents are hereby required to comply with the writ
of execution issued in the civil case and to release to petitioners the dollar deposit of Bartelli in
such amount as would satisfy the judgment.

Supreme Court ruled that the questioned law makes futile the favorable judgment and award of
damages that Salvacion and her parents fully deserve. It then proceeded to show that the
economic basis for the enactment of RA No. 6426 is not anymore present; and even if it still
exists, the questioned law still denies those entitled to due process of law for being
unreasonable and oppressive. The intention of the law may be good when enacted. The law
failed to anticipate the iniquitous effects producing outright injustice and inequality such as the
case before us.

The SC adopted the comment of the Solicitor General who argued that the Offshore Banking
System and the Foreign Currency Deposit System were designed to draw deposits from foreign
lenders and investors and, subsequently, to give the latter protection. However, the foreign
currency deposit made by a transient or a tourist is not the kind of deposit encouraged by PD
Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor
stays only for a few days in the country and, therefore, will maintain his deposit in the bank only
for a short time. Considering that Bartelli is just a tourist or a transient, he is not entitled to the
protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246 against
attachment, garnishment or other court processes.

Further, the SC said: “In fine, the application of the law depends on the extent of its justice.
Eventually, if we rule that the questioned Section 113 of Central Bank Circular No. 960 which
exempts from attachment, garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever, is applicable to a foreign
transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused
Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that “in case of
doubt in the interpretation or application of laws, it is presumed that the lawmaking body
intended right and justice to prevail.”

NOTES:

On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner
Karen Salvacion, then 12 years old to go with him to his apartment. Therein, Greg Bartelli
detained Karen Salvacion for four days, or up to February 7, 1989 and was able to rape the
child once on February 4, and three times each day on February 5, 6, and 7, 1989. On February
7, 1989, after policemen and people living nearby, rescued Karen, Greg Bartelli was arrested
and detained at the Makati Municipal Jail. The policemen recovered from Bartelli the following
items: 1.) Dollar Check No. 368, Control No. 021000678-1166111303, US 3,903.20; 2.)
COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account — China Banking
Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door
Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.

5. Reagan v. CIR

William Reagan is a US citizen assigned at Clark Air Base to help provide technical assistance
to the US Air Force (USAF). In April 1960 Reagan imported a 1960 Cadillac car valued at
$6,443.83. Two months later, he got permission to sell the same car provided that he would sell
the car to a US citizen or a member of the USAF. He sold it to Willie Johnson, Jr. for $6,600.00
as shown by a Bill of Sale. The sale took place within Clark Air Base. As a result of this
transaction, the Commissioner of Internal Revenue calculated the net taxable income of Reagan
to be at P17,912.34 and that his income tax would be P2,797.00. Reagan paid the assessed tax
but at the same time he sought for a refund because he claims that he is exempt. Reagan
claims that the sale took place in “foreign soil” since Clark Air Base, in legal contemplation is a
base outside the Philippines. Reagan also cited that under the Military Bases Agreement, he, by
nature of his employment, is exempt from Philippine taxation.

ISSUE: Is the sale considered done in a foreign soil not subject to Philippine income tax?

HELD: No. The Philippines is independent and sovereign, its authority may be exercised over its
entire domain. There is no portion thereof that is beyond its power. Within its limits, its decrees
are supreme, its commands paramount. Its laws govern therein, and everyone to whom it
applies must submit to its terms. That is the extent of its jurisdiction, both territorial and
personal. On the other hand, there is nothing in the Military Bases Agreement that lends support
to Reagan’s assertion. The Base has not become foreign soil or territory. This country’s
jurisdictional rights therein, certainly not excluding the power to tax, have been preserved, the
Philippines merely consents that the US exercise jurisdiction in certain cases – this is just a
matter of comity, courtesy and expediency. It is likewise noted that he indeed is employed by
the USAF and his income is derived from US source but the income derived from the sale is not
of US source hence taxable.

6. Sison v. Board of Accountancy

Facts:

The Board of Accountancy issued a CPA certificate to a British national named Robert Orr
Ferguson to practice his profession in the Philippines without examination. The issuance of the
said certificate was questioned by herein petitioner on the ground that there is no reciprocity
between the Philippines and the United Kingdom as regards the practice of accountancy.

To resolve this matter, the Board of Accountancy suspended the validity of the CPA certificates
until it can be proven that (a) Filipinos are allowed to take the professional accountant
examination given by the British government, if any, and (b) Filipino certified public accountants
can, upon application, be registered as chartered accountants or granted similar degrees by the
British Government." This resolution is based on the findings that there is no law which
regulates the practice of accountancy in England. However, the Philippine Accountancy Law
explicitly provides that the suspension or revocation of the certificate issued under the said Act
may be done by the board for unprofessional conduct of the holder or other sufficient cause.
The Secretary of Justice further said that he believes that "the change in administrative
interpretation with respect to the existence of reciprocity between the Philippines and Great
Britain as to the practice of accountancy," does not constitute sufficient cause for the
suspension or revocation of the certificates in question within the meaning of said provision.

Issue:

W/N the issuance of the CPA certificates was valid in the absence of reciprocity between the
Philippines and the British Government?

Ruling:
Yes it is valid as it comes within the realm of comity as contemplated in our law. Comity is
defined as the recognition which one nation allows within its territory the acts of foreign
governments and tribunals, having due regard both to the international duty and convenience
and the rights of its own citizens or of other persons who are under the protection of its laws.

The British minister in a note sent to the President of the Philippines wrote that that qualified
Philippine citizen are allowed to practice the profession of accountancy including income tax
accounting, in the United Kingdom since there is no governmental control of the accounting
profession in the said country and any resident of the United Kingdom, of whatever nationality,
may engage in the profession of accounting without formality.

Therefore, the SC finds no reason why Robert Orr Ferguson who had previously been
registered as certified public accountants and issued the corresponding certificate public
accountant in the Philippine Islands, should be suspended from the practice of his profession in
these Islands.

7. Cadalin v. POEA Administrator, 238 SCRA 721

FACTS:

This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in the Supreme

Court for Certiorari.

On June 6, 1984, Cadalin, Amul and Evangelista, in their own behalf and on behalf
of 728 other OCWs instituted a class suit by filing an “Amended Complaint” with
the POEA for money claims arising from their recruitment by ASIA
INTERNATIONAL BUILDERS CORPORATION (AIBC) and employment by
BROWN & ROOT INTERNATIONAL, INC (BRI) which is a foreign corporation with
headquarters in Houston, Texas, and is engaged in construction; while AIBC is a
domestic corporation licensed as a service contractor to recruit, mobilize and
deploy Filipino workers for overseas employment on behalf of its foreign principals.

The amended complaint sought the payment of the unexpired portion of the
employment contracts, which was terminated prematurely, and secondarily, the
payment of the interest of the earnings of the Travel and Reserved Fund; interest
on all the unpaid benefits; area wage and salary differential pay; fringe benefits;
reimbursement of SSS and premium not remitted to the SSS; refund of withholding
tax not remitted to the BIR; penalties for committing prohibited practices; as well as
the suspension of the license of AIBC and the accreditation of BRII

On October 2, 1984, the POEA Administrator denied the “Motion to Strike Out of
the Records” filed by AIBC but required the claimants to correct the deficiencies in
the complaint pointed out.

AIB and BRII kept on filing Motion for Extension of Time to file their answer. The
POEA kept on granting such motions.

On November 14, 1984, claimants filed an opposition to the motions for extension
of time and asked that AIBC and BRII declared in default for failure to file their
answers.

On December 27, 1984, the POEA Administrator issued an order directing AIBC
and BRII to file their answers within ten days from receipt of the order.

(at madami pang motions ang na-file, new complainants joined the case, ang
daming inavail na remedies ng both parties)
On June 19, 1987, AIBC finally submitted its answer to the complaint. At the same
hearing, the parties were given a period of 15 days from said date within which to
submit their respective position papers. On February 24, 1988, AIBC and BRII
submitted position paper. On October 27, 1988, AIBC and BRII filed a
“Consolidated Reply,” POEA Adminitartor rendered his decision which awarded
the amount of $824, 652.44 in favor of only 324 complainants. Claimants
submitted their “Appeal Memorandum For Partial Appeal” from the decision of the
POEA. AIBC also filed its MR and/or appeal in addition to the “Notice of Appeal”
filed earlier.

NLRC promulgated its Resolution, modifying the decision of the POEA. The
resolution removed some of the benefits awarded in favor of the claimants. NLRC
denied all the MRs. Hence, these petitions filed by the claimants and by AlBC and
BRII.

The case rooted from the Labor Law enacted by Bahrain where most of the
complainants were deployed. His Majesty Ise Bin Selman Al Kaifa, Amir of
Bahrain, issued his Amiri Decree No. 23 on June 16, 1176, otherwise known re the
Labour Law for the Private Sector. Some of the provision of Amiri Decree No. 23
that are relevant to the claims of the complainants-appellants are as follows:

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

Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
If employee worked, 150% of his normal wage shall be paid to him x x x.”

Art. 81; x x x When conditions of work require the worker to work on any official
holiday, he shall be paid an additional sum equivalent to 150% of his normal
wage.”

Art. 84: Every worker who has completed one year’s continuous service with his
employer shall be entitled to Laos on full pay for a period of not less than 21 days
for each year increased to a period not less than 28 days after five continuous
years of service.”

A worker shall be entitled to such leave upon a quantum meruit in respect of the
proportion of his service in that year.”

Art. 107: A contract of employment made for a period of indefinite duration may be
terminated by either party thereto after giving the other party prior notice before
such termination, in writing, in respect of monthly paid workers and fifteen days’
notice in respect of other workers. The party terminating a contract without the
required notice shall pay to the other party compensation equivalent to the amount
of wages payable to the worker for the period of such notice or the unexpired
portion thereof.”

Art. Ill: x x x the employer concerned shall pay to such worker, upon termination of
employment, a leaving indemnity for the period of his employment calculated on
the basis of fifteen days’ wages for each year of the first three years of service and
of one month’s wages for each year of service thereafter. Such worker shall be
entitled to payment of leaving indemnity upon a quantum meruit in proportion to
the period of his service completed within a year.”

ISSUE:

1. WON the foreign law should govern or the contract of the parties.(WON the
complainants who have worked in Bahrain are entitled to the above-mentioned
benefits provided by Amiri Decree No. 23 of Bahrain).

2. WON the Bahrain Law should apply in the case. (Assuming it is applicable WON
complainants’ claim for the benefits provided therein have prescribed.)

3. Whether or not the instant cases qualify as; a class suit (siningit ko nalang)
(the rest of the issues in the full text of the case refer to Labor Law)

RULING:

1. NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence
governing the pleading and proof of a foreign law and admitted in evidence a
simple copy of the Bahrain’s Amiri Decree No. 23 of 1976 (Labour Law for the
Private Sector).

NLRC applied the Amiri Deere, No. 23 of 1976, which provides for greater benefits
than those stipulated in the overseas-employment contracts of the claimants. It
was of the belief that where the laws of the host country are more favorable and
beneficial to the workers, then the laws of the host country shall form part of the
overseas employment contract. It approved the observation of the POEA
Administrator that in labor proceedings, all doubts in the implementation of the
provisions of the Labor Code and its implementing regulations shall be resolved in
favor of labor.

The overseas-employment contracts, which were prepared by AIBC and BRII

themselves, provided that the laws of the host country became applicable to said
contracts if they offer terms and conditions more favorable than those stipulated
therein. However there was a part of the employment contract which provides that
the compensation of the employee may be “adjusted downward so that the total
computation plus the non-waivable benefits shall be equivalent to the
compensation” therein agree,’ another part of the same provision categorically
states “that total remuneration and benefits do not fall below that of the host
country regulation and custom.”

Any ambiguity in the overseas-employment contracts should be interpreted against

AIBC and BRII, the parties that drafted it. Article 1377 of the Civil Code of the
Philippines provides:
‘The interpretation of obscure words or stipulations in a contract shall not favor the
party who caused the obscurity.”

Said rule of interpretation is applicable to contracts of adhesion where there is

already a prepared form containing the stipulations of the employment contract
and the employees merely “take it or leave it.” The presumption is that there was
an imposition by one party against the other and that the employees signed the
contracts out of necessity that reduced their bargaining power.
We read the overseas employment contracts in question as adopting the
provisions of the Amiri Decree No. 23 of 1976 as part and parcel thereof. The
parties to a contract may select the law by which it is to be governed. In such a
case, the foreign law is adopted as a “system” to regulate the relations of the
parties, including questions of their capacity to enter into the contract, the
formalities to be observed by them, matters of performance, and so forth. Instead
of adopting the entire mass of the foreign law, the parties may just agree that
specific provisions of a foreign statute shall be deemed incorporated into their
contract “as a set of terms.” By such reference to the provisions of the foreign law,
the contract does not become a foreign contract to be governed by the foreign law.
The said law does not operate as a statute but as a set of contractual terms
deemed written in the contract.

A basic policy of contract is to protect the expectation of the parties. Such party
expectation is protected by giving effect to the parties’ own choice of the applicable
law. The choice of law must, however, bear some relationship the parties or their
transaction. There is no question that the contracts sought to be enforced by
claimants have a direct connection with the Bahrain law because the services
were rendered in that country.

2. NLRC ruled that the prescriptive period for the filing of the claims of the
complainants was 3 years, as provided in Article 291 of the Labor Code of the
Philippines, and not ten years as provided in Article 1144 of the Civil Code of the
Philippines nor one year as provided in the Amiri Decree No. 23 of 1976.

Article 156 of the Amiri Decree No. 23 of 1976 provides:

“A claim arising out of a contract of employment shall not actionable after the lapse
of one year from the date of the expiry of the Contract”.

As a general rule, a foreign procedural law will not be applied in the forum (local
court), Procedural matters, such as service of process, joinder of actions, period
and requisites for appeal, and so forth, are governed by the laws of the forum. This
is true even if the action is based upon a foreign substantive law.

A law on prescription of actions is sui generis in Conflict of Laws in the sense that
it may be viewed either as procedural or substantive, depending on the
characterization given such a law. In Bournias v. Atlantic Maritime Company (220
F. 2d. 152, 2d Cir. [1955]), where the issue was the applicability of the Panama
Labor Code in a case filed in the State of New York for claims arising from said
Code, the claims would have prescribed under the Panamanian Law but not under
the Statute of Limitations of New York. The U.S. Circuit Court of Appeals held that
the Panamanian Law was procedural as it was not “specifically intended to be
substantive,” hence, the prescriptive period provided in the law of the forum should
apply. The Court observed: “. . . we are dealing with a statute of limitations of a
foreign country, and it is not clear on the face of the statute that its purpose was to
limit the enforceability, outside as well as within the foreign country concerned, of
the substantive rights to which the statute pertains. We think that as a yardstick for
determining whether that was the purpose, this test is the most satisfactory one.

The Court further noted: “Applying that test here it appears to us that the libellant is
entitled to succeed, for the respondents have failed to satisfy us that the
Panamanian period of limitation in question was specifically aimed against the
particular rights which the libellant seeks to enforce. The Panama Labor Code is a
statute having broad objectives.” The American court applied the statute of
limitations of New York, instead of the Panamanian law, after finding that there
was no showing that the Panamanian law on prescription was intended to be
substantive. Being considered merely a procedural law even in Panama, it has to
give way to the law of the forum (local Court) on prescription of actions.

However the characterization of a statute into a procedural or substantive law

becomes irrelevant when the country of the forum (local Court) has a “borrowing
statute.” Said statute has the practical effect of treating the foreign statute of
limitation as one of substance. A “borrowing statute” directs the state of the forum
(local Court) to apply the foreign statute of limitations to the pending claims based
on a foreign law. While there are several kinds of “borrowing statutes,” one form
provides that an action barred by the laws of the place where it accrued will not be
enforced in the forum even though the local statute was not run against it.

Section 48 of Code of Civil Procedure is of this kind. It provides: “If by the laws of
the state or country where the cause of action arose, the action is barred, it is also
barred in the Philippine Islands.”

Section 48 has not been repealed or amended by the Civil Code of the Philippines.
In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex
proprio vigore insofar as it ordains the application in this jurisdiction of Section 156
of the Amiri Decree No. 23 of 1976.

The courts of the forum (local Court) will not enforce any foreign claim obnoxious
to the forum’s public policy. To enforce the one-year prescriptive period of the
Amiri Decree No. 23 of 1976 as regards the claims in question would contravene
the public policy on the protection to labor.

In the Declaration of Principles and State Policies, the 1987 Constitution

emphasized that:“The state shall promote social justice in all phases of national
development” (Sec. 10).
‘The state affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare” (Sec. 18).

In Article XIII on Social Justice and Human Rights, the 1987 Constitution provides:
“Sec. 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.”

Thus, the applicable law on prescription is the Philippine law.

The next question is whether the prescriptive period governing the filing of the
claims is 3 years, as provided by the Labor Code or 10 years, as provided by the
Civil Code of the Philippines.

Article 1144 of the Civil Code of the Philippines provides:

“The following actions must be brought within ten years from the time the right of
action accross:

(1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a
judgment”
In this case, the claim for pay differentials is primarily anchored on the written
contracts between the litigants, the ten-year prescriptive period provided by Art.
1144(l) of the New Civil Code should govern.

3. NO. A class suit is proper where the subject matter of the controversy is one of
common or general interest to many and the parties are so numerous that it is
impracticable to bring them all before the court. When all the claims are for
benefits granted under the Bahrain law many of the claimants worked outside
Bahrain. Some of the claimants were deployed in Indonesia under different terms
and condition of employment.
 Inasmuch as the First requirement of a class suit is not present (common or
general interest based on the Amiri Decree of the State of Bahrain), it is only
logical that only those who worked in Bahrain shall be entitled to rile their claims in
a class suit.

While there are common defendants (AIBC and BRII) and the nature of the claims
is the same (for employee’s benefits), there is no common question of law or fact.
While some claims are based on the Amiri Law of Bahrain, many of the claimants
never worked in that country, but were deployed elsewhere. Thus, each claimant is
interested only in his own demand and not in the claims of the other employees of
defendants. A claimant has no concern in protecting the interests of the other
claimants as shown by the fact, that hundreds of them have abandoned their co-
claimants and have entered into separate compromise settlements of their
respective claims. The claimants who worked in Bahrain can not be allowed to sue
in a class suit in a judicial proceeding.

WHEREFORE, all the three petitioners are DISMISSED.

8. Oh Hek Kow v. Republic, 29 SCRA 94

Facts:

Petitioner Oh Hek How having been granted naturalization through his petition filed
a motion alleging that he had complied with the requirements of Republic Act No.
530 and praying that he be allowed to take his oath of allegiance as such citizen
and issued the corresponding certificate of naturalization. The Court of First
Instance of Zamboanga del Norte issued forthwith an order authorizing the taking
of said oath. On that same date, petitioner took it and the certificate of
naturalization was issued to him. The Government seasonably gave notice of its
intention to appeal from said order of February9, 1966 and filed its record on
appeal among the grounds that the oath was taken prior to judgment having been
final and executory.

Issue:

- Is the oath valid

- Whether or not a permission to renounce citizenship is necessary from the

Minister of the Interior of Nationalist China.
 Held:

First issue:

The order of February 9, 1966 (oath-taking) had not — and up to the present has
not become final and executory in view of the appeal duly taken by the
Government.

2nd Issue:

It is argued that the permission is not required by our laws and that the
naturalization of an alien, as a citizen of the Philippines, is governed exclusively by
such laws and cannot be controlled by any foreign law.

However, the question of how a Chinese citizen may strip himself of that status is
necessarily governed —pursuant to Articles 15 and 16 of our Civil Code — by the
laws of China, not by those of thePhilippines. As a consequence, a Chinese
national cannot be naturalized as a citizen of thePhilippines, unless he has
complied with the laws of Nationalist China requiring previous permission of its
Minister of the Interior for the renunciation of nationality.

Section 12 of Commonwealth Act No.473 provides, however, that before the

naturalization certificate is issued, the petitioner shall "solemnly swear," interalia,
that he renounces "absolutely and forever all allegiance and fidelity to any foreign
prince, potentate" and particularly to the state "of which" he is "a subject or
citizen." The obvious purpose of this requirement is to divest him of his former
nationality, before acquiring Philippine citizenship, because, otherwise, he would
have two nationalities and owe allegiance to two (2) distinct sovereignties, which
our laws do not permit, except that, pursuant to Republic Act No. 2639, "the
acquisition of citizenship by a natural-born Filipino citizen from one of the Iberian
and any friendly democratic Ibero-American countries shall not produce loss or
forfeiture of his Philippine citizenship, if the law of that country grants the same
privilege to its citizens and such had been agreed upon by treaty between the
Philippines and the foreign country from which citizenship is acquired."

9. Zapanta v. Local Civil Registrar of Davao, 237 SCRA 25

o GENERAL RULE: Rule 108, Rules of Court justifies the correction of

innocuous or clerical errors apparent on the face of the record and capable
of being corrected by mere reference to it.

o EXCEPTION: Even substantial errors in a civil registry may be corrected

and the true facts established provided the parties aggrieved by the error
avail themselves of the appropriate adversary proceeding.
FACTS:

Petitioner Gliceria Zapanta is the widow of Florencio B. Zapanta. When Florencio

died, the local civil registrar of Davao City issued a death certificate. However, she
found that the name appearing therein was “Flaviano Castro Zapanta” albeit the
date of death and all other circumstances and information reflected therein clearly
and conclusively revealed that the person referred to therein was no other than her
late husband, Florencio. Gliceria, therefore, filed a petition for correction of entry in
the register of death. The trial court dismissed the petition on the ground that the
correction of the name “Flaviano Castro Zapanta” to “Florencio B. Zapanta” was
not merely clerical but substantial in nature.

ISSUE:

o Whether or not the trial court committed reversible error

HELD:

The Supreme Court held in the affirmative.

The general perception was that the judicial proceeding under Art. 412 of the Civil
Code, implemented by Rule 108 of the Rules of Court, could only justify the
correction of innocuous or clerical errors apparent on the face of the record and
capable of being corrected by mere reference to it, such as misspellings and
obvious mistakes.

However, in later cases, the Court has held that it adheres to the principle that
even substantial errors in a civil registry may be corrected and the true facts
established provided the parties aggrieved by the error avail themselves of the
appropriate adversary proceeding.

Adversary Proceeding, defined

Black’s Law Dictionary defines “adversary proceeding” as follows:

One having opposing parties; contested, as distinguished from an ex parte

application, one of which the party seeking relief has given legal warning to the
other party, and afforded the latter an opportunity to contest it...”
 Thus, provided the trial court has conducted proceedings where all relevant facts
have been fully and properly developed, where opposing counsel has been given
opportunity to demolish the opposite party’s case, and where the evidence has
been thoroughly weighed and considered, the suit or proceeding is “appropriate.”

10. Nazareno v. CA, 343 SCRA 637

- Maximino Nazareno, Sr. and Aurea Poblete were husband and wife. Aurea
died on April 15, 1970, while Maximino, Sr. died on December 18, 1980.

- They had five children, namely, Natividad, Romeo, Jose, Pacifico, and
Maximino, Jr. Natividad and Maximino, Jr. are petitioners in this case, while
the estate of Maximino, Sr., Romeo, and his wife Eliza Nazareno are the
respondents.

- After the death of Maximino, Sr., Romeo filed an intestate case and was
appointed administrator of his father's estate.

- In the course of the intestate proceedings, Romeo discovered that his

parents had executed several deeds of sale conveying a number of real
properties in favor of his sister, Natividad.

- One of the deeds involved six lots in Quezon City which were allegedly
sold by Maximino, Sr., with the consent of Aurea, to Natividad on January
29, 1970. By virtue of these deeds, TCTs were issued to Natividad for lots
3-B, 3, 10, 11, 13 & 14

- Unknown to Romeo, Natividad sold Lot 3-B, w/c had been occupied by
Romeo, his wife, & Maximino, Jr., to Maximino, Jr.

- Romeo filed the present case for annulment of sale w/ damages against
Natividad & Maximino Jr. on the ground that both sales were void for lack
of consideration

- Romeo presented the Deed of Partition & Distribution executed by

Maximino Sr. & Aurea in 1962 & duly signed by all of their children, except
Jose, who was then abroad. However, this deed was not carried out. In
1969, their parents instead offered to sell to them the lots

- He testified that, although the deeds of sale executed by his parents in their
favor stated that the sale was for a consideration, they never really paid
any amount for the supposed sale. The transfer was made in this manner
in order to avoid the payment of inheritance taxes.

- Allegedly, it was only Natividad who bought the lots in question because
 she was the only one financially able to do so

- The trial court rendered a decision declaring the nullity of the Deed of Sale
dated January 29, 1970, except as to Lots 3, 3-B, 13 and 14 which had
passed on to third persons.

- On appeal to the Court of Appeals, the decision of the trial court was
modified in the sense that titles to Lot 3 (in the name of Romeo Nazareno)
and Lot 3-B (in the name of Maximino Nazareno, Jr.), as well as to Lots 10
and 11 were cancelled and ordered restored to the estate of Maximino
Nazareno, Sr. Hence, the present petition.

Issue:

1) Whether the restoration of the titles to the lots in question to the estate of
Maximino Sr. was proper

2) Whether it was the intention of Maximino, Sr. to give the subject lots to
Natividad

Held:

1) Yes. The Nazareno spouses transferred their properties to their children

by fictitious sales in order to avoid the payment of inheritance taxes. Facts
& circumstances indicate badges of a simulated sale w/c make the Jan 29,
1970 sale void & of no effect. Natividad never acquired ownership over the
property because the Deed of Sale in her favor is also void for being w/o
consideration.

2) Yes. It cannot be denied that Maximino, Sr. intended to give the six
Quezon City lots to Natividad. As Romeo testified, their parents executed
the Deed of Sale in favor of Natividad because the latter was the only
"female and the only unmarried member of the family." She was thus
entrusted with the real properties in behalf of her siblings. As she herself
admitted, she intended to convey Lots 10 and 11 to Jose in the event the
latter returned from abroad. There was thus an implied trust constituted in
her favor. Art. 1449 of the Civil Code states:

There is also an implied trust when a donation is made to a person but it appears
that although the legal estate is transmitted to the donee, he nevertheless is either
to have no beneficial interest or only a part thereof.
 There being an implied trust, the lots in question are therefore subject to collation
in accordance with Art. 1061 which states:

Every compulsory heir, who succeeds with other compulsory heirs, must bring into
the mass of the estate any property or right which he may have received from the
decedent, during the lifetime of the latter, by way of donation, or any other
gratuitous title, in order that it may be computed in the determination of the
legitime of each heir, and in the account of the partition.

As held by the trial court, the sale of Lots 13 and 14 to Ros-Alva Marketing, Corp.
will have to be upheld for it is an innocent purchaser for value which relied on the
title of Natividad. (calo)

11. Bellis v. Bellis, 20 SCRA 358

FACTS:
Amos Bellis, born in Texas, was a citizen of the State of Texas and of the United
States. He had 5 legitimate children with his wife, Mary Mallen, whom he had
divorced, 3 legitimate children with his 2nd wife, Violet Kennedy and finally, 3
illegitimate children.

Prior to his death, Amos Bellis executed a will in the Philippines in which his
distributable estate should be divided in trust in the following order and manner:

a. $240,000 to his 1st wife Mary Mallen;

b. P120,000 to his 3 illegitimate children at P40,000 each;
c. The remainder shall go to his surviving children by his 1st and 2nd wives, in
equal shares.

Subsequently, Amos Bellis died a resident of San Antonio, Texas, USA. His will
was admitted to probate in the Philippines. The People’s Bank and Trust
Company, an executor of the will, paid the entire bequest therein.

Preparatory to closing its administration, the executor submitted and filed its
“Executor’s Final Account, Report of Administration and Project of Partition” where
it reported, inter alia, the satisfaction of the legacy of Mary Mallen by the shares of
stock amounting to $240,000 delivered to her, and the legacies of the 3 illegitimate
children in the amount of P40,000 each or a total of P120,000. In the project
partition, the executor divided the residuary estate into 7 equal portions
for the benefit of the testator’s 7 legitimate children by his 1st and 2nd marriages.

Among the 3 illegitimate children, Mari Cristina and Miriam Palma Bellis filed their
respective opposition to the project partition on the ground that they were deprived
 of their legitimates as illegitimate children.

The lower court denied their respective motions for reconsideration.

ISSUE:
Whether Texan Law of Philippine Law must apply.

RULING:
It is not disputed that the decedent was both a national of Texas and a domicile
thereof at the time of his death. So that even assuming Texan has a conflict of law
rule providing that the same would not result in a reference back (renvoi) to
Philippine Law, but would still refer to Texas Law.

Nonetheless, if Texas has conflict rule adopting the situs theory (lex rei sitae)
calling for the application of the law of the place where the properties are situated,
renvoi would arise, since the properties here involved are found in the Philippines.
In the absence, however of proofs as to the conflict of law rule of Texas, it should
not be presumed different from our appellants, position is therefore not rested on
the doctrine of renvoi.

The parties admit that the decedent, Amos Bellis, was a citizen of the State of
Texas, USA and that under the Laws of Texas, there are no forced heirs or
legitimates. Accordingly, since the intrinsic validity of the provision of the will and
the amount of successional rights has to be determined under Texas Law, the
Philippine Law on legitimates can not be applied to the testate of Amos Bellis.

12. Government v. Frank, 13 Phil 236

FACTS: In 1903, in the city of Chicago, Illinois, Frank entered into a contract for a
period of 2 years with the Plaintiff, by which Frank was to receive a salary as a
stenographer in the service of the said Plaintiff, and in addition thereto was to be
paid in advance the expenses incurred in traveling from the said city of Chicago to
Manila, and one-half salary during said period of travel.

Said contract contained a provision that in case of a violation of its terms on the
part of Frank, he should become liable to the Plaintiff for the amount expended by
the Government by way of expenses incurred in traveling from Chicago to Manila
and the one-half salary paid during such period.

Frank entered upon the performance of his contract and was paid half-salary from
the date until the date of his arrival in the Philippine Islands.

Thereafter, Frank left the service of the Plaintiff and refused to make a further
compliance with the terms of the contract.

The Plaintiff commenced an action in the CFI-Manila to recover from Frank the
sum of money, which amount the Plaintiff claimed had been paid to Frank as
expenses incurred in traveling from Chicago to Manila, and as half-salary for the
period consumed in travel.

It was expressly agreed between the parties to said contract that Laws No. 80 and
No. 224 should constitute a part of said contract.

The Defendant filed a general denial and a special defense, alleging in his special
defense that
(1) the Government of the Philippine Islands had amended Laws No. 80 and No.
224 and had thereby materially altered the said contract, and also that
(2) he was a minor at the time the contract was entered into and was therefore not
responsible under the law.
the lower court rendered a judgment against Frank and in favor of the Plaintiff for
the sum of 265. 90 dollars

ISSUE:

1. Did the amendment of the laws altered the tenor of the contract entered into
between Plaintiff and Defendant?
2. Can the defendant allege minority/infancy?

HELD: the judgment of the lower court is affirmed

1. NO; It may be said that the mere fact that the legislative department of the
Government of the Philippine Islands had amended said Acts No. 80 and No. 224
by Acts No. 643 and No. 1040 did not have the effect of changing the terms of the
contract made between the Plaintiff and the Defendant. The legislative department
of the Government is expressly prohibited by section 5 of the Act of Congress of
1902 from altering or changing the terms of a contract. The right which the
Defendant had acquired by virtue of Acts No. 80 and No. 224 had not been
changed in any respect by the fact that said laws had been amended. These acts,
constituting the terms of the contract, still constituted a part of said contract and
were enforceable in favor of the Defendant.

2. NO; The Defendant alleged in his special defense that he was a minor and
therefore the contract could not be enforced against him. The record discloses
that, at the time the contract was entered into in the State of Illinois, he was an
adult under the laws of that State and had full authority to contract. Frank claims
that, by reason of the fact that, under that laws of the Philippine Islands at the time
the contract was made, made persons in said Islands did not reach their majority
until they had attained the age of 23 years, he was not liable under said contract,
contending that the laws of the Philippine Islands governed.
 It is not disputed — upon the contrary the fact is admitted — that at the time and
place of the making of the contract in question the Defendant had full capacity to
make the same. No rule is better settled in law than that matters bearing upon the
execution, interpretation and validity of a contract are determined b the law of the
place where the contract is made. Matters connected with its performance are
regulated by the law prevailing at the place of performance. Matters respecting a
remedy, such as the bringing of suit, admissibility of evidence, and statutes of
limitations, depend upon the law of the place where the suit is brought.

13. Santos III v. Northwest Orient Airlines, 210 SCRA 256

Augusto Benedicto Santos III is a minor represented by his dad. In October 1986,
he bought a round trip ticket from Northwest Orient Airlines (NOA) in San
Francisco. His flight would be from San Francisco to Manila via Tokyo and back to
San Francisco. His scheduled flight was in December. A day before his departure
he checked with NOA and NOA said he made no reservation and that he bought
no ticket. The next year, due to the incident, he sued NOA for damages. He sued
NOA in Manila. NOA argued that Philippine courts have no jurisdiction over the
matter pursuant to Article 28(1) of the Warsaw Convention, which provides that
complaints against international carriers can only be instituted in:

1. the court of the domicile of the carrier (NOA’s domicile is in the USA);

2. the court of its principal place of business (which is San Francisco, USA);

3. the court where it has a place of business through which the contract had been
made (ticket was purchased in San Francisco so that’s where the contract was
made);

4. the court of the place of destination (Santos bought a round trip ticket which
final destination is San Francisco).

The lower court ruled in favor of NOA. Santos III averred that Philippine courts
have jurisdiction over the case and he questioned the constitutionality of Article 28
(1) of the Warsaw Convention.

ISSUE: Whether or not Philippine courts have jurisdiction over the matter to
conduct judicial review.

HELD: No. The Supreme Court ruled that they cannot rule over the matter for the
SC is bound by the provisions of the Warsaw Convention which was ratified by the
Senate. Until & unless there would be amendment to the Warsaw Convention, the
only remedy for Santos III is to sue in any of the place indicated in the Convention
such as in San Francisco, USA.
 The SC cannot rule upon the constitutionality of Article 28(1) of the Warsaw
Convention. In the first place, it is a treaty which was a joint act by the legislative
and the executive. The presumption is that it was first carefully studied and
determined to be constitutional before it was adopted and given the force of law in
this country. In this case, Santos was not able to offer any compelling argument to
overcome the presumption.

14. Aznar v. Garcia, 7 SCRA 95

Edward Christensen was born in New York but he migrated to California where he
resided for a period of 9 years. In 1913, he came to the Philippines where he
became a domiciliary until his death. In his will, he instituted an acknowledged
natural daughter, Maria Lucy Christensen (legitimate), as his only heir, but left a
legacy sum of money in favor of Helen Christensen Garcia (illegitimate). Adolfo
Aznar was the executor of the estate. Counsel for Helen claims that under Article
16, paragraph 2 of the Civil Code, California law should be applied; that under
California law, the matter is referred back to the law of the domicile. On the other
hand, counsel for Maria, averred that the national law of the deceased must apply,
illegitimate children not being entitled to anything under California law.

ISSUE: Whether or not the national law of the deceased should be applied in
determining the successional rights of his heirs.

HELD: The Supreme Court deciding to grant more successional rights to Helen
said in effect that there are two rules in California on the matter; the internal law
which applies to Californians domiciled in California and the conflict rule for
Californians domiciled outside of California. Christensen being domiciled in the
Philippines, the law of his domicile must be followed. The case was remanded to
the lower court for further proceedings – the determination of the successional
rights under Philippine law only.

15. Bank of America v. American Realty Corp., 321 SCRA 659, G.R. No. 133876,
December 29, 1999

Facts:

Petitioner granted loans to 3 foreign corporations. As security, the latter mortgaged

a property located in the Philippines owned by herein respondent ARC. ARC is a
third party mortgagor who pledged its own property in favor of the 3 debtor-foreign
corporations.

The debtors failed to pay. Thus, petitioner filed collection suits in foreign courts to
enforce the loan. Subsequently, it filed a petition in the Sheriff to extra-judicially
foreclose the said mortgage, which was granted.

On 12 February 1993, private respondent filed before the Pasig RTC, Branch 159,
an action for damages against the petitioner, for the latter’s act of foreclosing
extra-judicially the real estate mortgages despite the pendency of civil suits before
foreign courts for the collection of the principal loan.

Issue:

WON petitioner’s act of filing a collection suit against the principal debtors for the
recovery of the loan before foreign courts constituted a waiver of the remedy of
foreclosure.

Held: Yes.

1. Loan; Mortgage; remedies:

In the absence of express statutory provisions, a mortgage creditor may institute

against the mortgage debtor either a personal action or debt or a real action to
foreclose the mortgage. In other words, he may pursue either of the two remedies,
but not both. By such election, his cause of action can by no means be impaired,
for each of the two remedies is complete in itself.

In our jurisdiction, the remedies available to the mortgage creditor are deemed
alternative and not cumulative. Notably, an election of one remedy operates as a
waiver of the other. For this purpose, a remedy is deemed chosen upon the filing
of the suit for collection or upon the filing of the complaint in an action for
foreclosure of mortgage. As to extrajudicial foreclosure, such remedy is deemed
elected by the mortgage creditor upon filing of the petition not with any court of
justice but with the Office of the Sheriff of the province where the sale is to be
made.

In the case at bar, petitioner only has one cause of action which is non-payment of
the debt. Nevertheless, alternative remedies are available for its enjoyment and
exercise. Petitioner then may opt to exercise only one of two remedies so as not to
violate the rule against splitting a cause of action.

Accordingly, applying the foregoing rules, we hold that petitioner, by the

expediency of filing four civil suits before foreign courts, necessarily abandoned
the remedy to foreclose the real estate mortgages constituted over the properties
of third-party mortgagor and herein private respondent ARC. Moreover, by filing
the four civil actions and by eventually foreclosing extra-judicially the mortgages,
petitioner in effect transgressed the rules against splitting a cause of action well-
enshrined in jurisprudence and our statute books.

2. Conflicts of Law
 Incidentally, petitioner alleges that under English Law, which according to
petitioner is the governing law with regard to the principal agreements, the
mortgagee does not lose its security interest by simply filing civil actions for sums
of money.

We rule in the negative.

In a long line of decisions, this Court adopted the well-imbedded principle in our
jurisdiction that there is no judicial notice of any foreign law. A foreign law must be
properly pleaded and proved as a fact. Thus, if the foreign law involved is not
properly pleaded and proved, our courts will presume that the foreign law is the
same as our local or domestic or internal
law. This is what we refer to as the doctrine of processual presumption.

In the instant case, assuming arguendo that the English Law on the matter were
properly pleaded and proved in said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and
established public policy of the forum, the said foreign law, judgment or order shall
not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good customs shall not
be rendered ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.

The public policy sought to be protected in the instant case is the principle
imbedded in our jurisdiction proscribing the splitting up of a single cause of action.

Moreover, foreign law should not be applied when its application would work
undeniable injustice to the citizens or residents of the forum. To give justice is the
most important function of law; hence, a law, or judgment or contract that is
obviously unjust negates the fundamental principles of Conflict of Laws.

Clearly then, English Law is not applicable.

16. Tenchavez v. Escano, 17 SCRA 674

FACTS:

27 years old Vicenta Escano who belong to a prominent Filipino Family of Spanish
ancestry got married on Feburary 24, 1948 with Pastor Tenchavez, 32 years old
engineer, and ex-army officer before Catholic chaplain Lt. Moises Lavares. The
marriage was a culmination of the love affair of the couple and was duly registered
in the local civil registry. A certain Pacita Noel came to be their match-maker and
go-between who had an amorous relationship with Tenchavez as written by a San
Carlos college student where she and Vicenta are studying. Vicenta and Pastor
are supposed to renew their vows/ marriage in a church as suggested by Vicenta’s
parents. However after translating the said letter to Vicenta’s dad , he disagreed
for a new marriage. Vicenta continued leaving with her parents in Cebu while
Pastor went back to work in Manila.

Vicenta applied for a passport indicating that she was single and when it was
approved she left for the United States and filed a complaint for divorce against
Pastor which was later on approved and issued by the Second Judicial Court of
the State of Nevada. She then sought for the annulment of her marriage to the
Archbishop of Cebu. Vicenta married Russell Leo Moran, an American, in Nevada
and has begotten children. She acquired citizenship on August 8, 1958. Petitioner
filed a complaint against Vicenta and her parents whom he alleged to have
dissuaded Vicenta from joining her husband.

ISSUE: Whether the divorce sought by Vicenta Escano is valid and binding upon
courts of the Philippines.

HELD:

Civil Code of the Philippines does not admit divorce. Philippine courts cannot give
recognition on foreign decrees of absolute divorce between Filipino citizens
because it would be a violation of the Civil Code. Such grant would arise to
discrimination in favor of rich citizens who can afford divorce in foreign
countries. The adulterous relationship of Escano with her American husband is
enough grounds for the legal separation prayed by Tenchavez. In the eyes of
Philippine laws, Tenchavez and Escano are still married. A foreign divorce
between Filipinos sought and decreed is not entitled to recognition neither is the
marriage of the divorcee entitled to validity in the Philippines. Thus, the desertion
and securing of an invalid divorce decree by one spouse entitled the other for
damages.

WHEREFORE, the decision under appeal is hereby modified as follows;

(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal

separation from defendant Vicenta F. Escaño;

(2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant

Tenchavez the amount of P25,000 for damages and attorneys' fees;

(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño
and the estate of his wife, the deceased Mena Escaño, P5,000 by way of damages
and attorneys' fees.
17. Pakistan International Airlines Corporation v. Ople, 190 SCRA 90

FACTS: On 2 December 1978, petitioner Pakistan International Airlines

Corporation (PIA), a foreign corporation licensed to do business in the Philippines,
executed in Manila 2 separate contracts of employment, one with private
respondent Farrales and the other with private respondent Mamasig. 1 The
contracts, which became effective on 9 January 1979, provided in pertinent portion
as follows:

5. DURATION OF EMPLOYMENT AND PENALTY

This agreement is for a period of 3 years, but can be extended by the mutual
consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided, PIA reserves the right to
terminate this agreement at any time by giving the EMPLOYEE notice in writing in
advance one month before the intended termination or in lieu thereof, by paying
the EMPLOYEE wages equivalent to one month’s salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under and by the laws of
Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction to
consider any matter arising out of or under this agreement.

Farrales & Mamasig (employees) were hired as flight attendants after undergoing
training. Base station was in Manila and flying assignments to different parts of the
Middle East and Europe.

roughly 1 year and 4 months prior to the expiration of the contracts of employment,
PIA through Mr. Oscar Benares, counsel for and official of the local branch of PIA,
sent separate letters, informing them that they will be terminated effective
September 1, 1980.
Farrales and Mamasig jointly instituted a complaint, for illegal dismissal and non-
payment of company benefits and bonuses, against PIA with the then Ministry of
Labor and Employment (MOLE).

PIA’s Contention: The PIA submitted its position paper, but no evidence, and there
claimed that both private respondents were habitual absentees; that both were in
the habit of bringing in from abroad sizeable quantities of “personal effects”; and
that PIA personnel at the Manila International Airport had been discreetly warned
by customs officials to advise private respondents to discontinue that practice. PIA
further claimed that the services of both private respondents were terminated
pursuant to the provisions of the employment contract.

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 period of the employment
contract to 3 years was null and void as violative of the provisions of the Labor
Code and its implementing rules and regulations on regular and casual
employment; and that the dismissal, having been carried out without the requisite
clearance from the MOLE, was illegal and entitled private respondents to
reinstatement with full backwages.
Decision sustained on appeal. Hence, this petition for certiorari

ISSUE: (Relative to the subject) Which law should govern over the case? Which
court has jurisdiction?

HELD: Philippine Law and Philippine courts

Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement

which specifies, firstly, the law of Pakistan as the applicable law of the agreement
and, secondly, lays the venue for settlement of any dispute arising out of or in
connection with the agreement “only [in] courts of Karachi Pakistan”.
We have already pointed out that the relationship is much affected with public
interest and that the otherwise applicable Philippine laws and regulations cannot
be rendered illusory by the parties agreeing upon some other law to govern their
relationship.
the contract was not only executed in the Philippines, it was also performed here,
at least partially; private respondents are Philippine citizens and respondents,
while petitioner, although a foreign corporation, is licensed to do business (and
actually doing business) and hence resident in the Philippines; lastly, private
respondents were based in the Philippines in between their assigned flights to the
Middle East and Europe. All the above contacts point to the Philippine courts and
administrative agencies as a proper forum for the resolution of contractual disputes
between the parties.
Under these circumstances, paragraph 10 of the employment agreement cannot
be given effect so as to oust Philippine agencies and courts of the jurisdiction
vested upon them by Philippine law. Finally, and in any event, the petitioner PIA
did not undertake to plead and prove the contents of Pakistan law on the matter; it
must therefore be presumed that the applicable provisions of the law of Pakistan
are the same as the applicable provisions of Philippine law.
[DOCTRINE OF PROCESSUAL PRESUMPTION, eh?]
Petition denied.
_______
NOTES:

Another Issue: petitioner PIA invokes paragraphs 5 and 6 of its contract of

employment with private respondents Farrales and Mamasig, arguing that its
relationship with them was governed by the provisions of its contract rather than by
the general provisions of the Labor Code.
 A contract freely entered into should, of course, be respected, as PIA 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.” Thus, counter-balancing the principle of
autonomy of contracting parties is the equally general rule that provisions of
applicable law, especially provisions relating to matters affected with public policy,
are deemed written into the contract. Put a little differently, the governing principle
is that parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest.
The law relating to labor and employment is clearly such an area and parties are
not at liberty to insulate themselves and their relationships from the impact of labor
laws and regulations by simply contracting with each other. It is thus necessary to
appraise the contractual provisions invoked by petitioner PIA in terms of their
consistency with applicable Philippine law and regulations.

18. Wildvalley v. Shipping Co., Ltd. v. CA, 342 SCRA 213, G.R. No. 119602, October
6, 2000

In the Orinoco River in Venezuela, it is a rule that ships passing through it must be
piloted by pilots familiar to the river. Hence, in 1988 Captain Nicandro Colon,
master of Philippine Roxas, a ship owned by Philippine President Lines, Inc.
(PPL), obtained the services of Ezzar Vasquez, a duly accredited pilot in
Venezuela to pilot the ship in the Orinoco River. Unfortunately, Philippine
Roxas ran aground in the Orinoco River while being piloted by Vasquez. As a
result, the stranded ship blocked other vessels. One such vessel was owned
Wildvalley Shipping Co., Ltd. (WSC). The blockade caused $400k worth of losses
to WSC as its ship was not able to make its delivery. Subsequently, WSC sued
PPL in the RTC of Manila. It averred that PPL is liable for the losses it incurred
under the laws of Venezuela, to wit: Reglamento General de la Ley de
Pilotaje andReglamento Para la Zona de Pilotaje No 1 del Orinoco. These two laws
provide that the master and owner of the ship is liable for the negligence of the
pilot of the ship. Vasquez was proven to be negligent when he failed to check on
certain vibrations that the ship was experiencing while traversing the river.

ISSUE: Whether or not Philippine President Lines, Inc. is liable under the said
Venezuelan laws.

HELD: No. The two Venezuelan Laws were not duly proven as fact before the
court. Only mere photocopies of the laws were presented as evidence. For a copy
of a foreign public document to be admissible, the following requisites are
mandatory:

(1) It must be attested by the officer having legal custody of the records or by his
 deputy; and

(2) It must be accompanied by a certificate by a secretary of the embassy or

legation, consul general, consul, vice consular or consular agent or foreign service
officer, and with the seal of his office.

And in case of unwritten foreign laws, the oral testimony of expert witnesses is
admissible, as are printed and published books of reports of decisions of the
courts of the country concerned if proved to be commonly admitted in such courts.

Failure to prove the foreign laws gives rise to processual presumption where the
foreign law is deemed to be the same as Philippine laws. Under Philippine laws,
PPL nor Captain Colon cannot be held liable for the negligence of Vasquez. PPL
and Colon had shown due diligence in selecting Vasquez to pilot the vessel.
Vasquez is competent and was a duly accredited pilot in Venezuela in good
standing when he was engaged.

19. Manufacturers Hanover Trust Co. v. Guerrero, G.R. No. 136804, February 19,
2003.

FACTS:

 On May 17, 1994, Guerrero filed a complaint for damages against Hanover
and/or Chemical Bank (Bank) with the RTC of Manila.

 Guerrero sought payment of damages for

a. Illegally withheld taxes charged against interests on his checking

account with the Bank

b. A returned check worth $18,000 due to signature verification problems

c. Unauthorized conversion of his account

 The Bank answered that by stipulation, Guerrero’s account is governed by

New York law, and such law does not permit any of Guerrero’s claims
except actual damages.

 The Bank filed a Motion for Partial Summary Judgment (PSJ), contending
that the trial should be limited to the issue of actual damages only.

 The “Walden Affidavit” was presented by the Bank to support its Motion for
PSJ.

 The RTC and CA denied the Bank’s Motion for PSJ, stating that the
Walden Affidavit does not serve as proof of the New York law and
 jurisprudence relied on by the Bank to support its Motion.

ISSUE:

 WON the Walden Affidavit was sufficient proof of the New York law
and jurisprudence relied upon by the Bank in its Motion for PSJ? –
NO.

HELD:

 NO. The Walden Affidavit failed to prove New York law and jurisprudence.
The SC denied the Bank’s petition for lack of merit.

 The CA considered the New York law and jurisprudence as public

documents defined in Rule 132 Sec 19 and 24 of the Rules of Evidence,
which should be followed in proving foreign law.

 SEC. 19. Classes of Documents. – For the purpose of their presentation in

evidence, documents are either public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the sovereign
authority, official bodies and tribunals, and public officers, whether of
the Philippines, or of a foreign country;

 SEC. 24. Proof of official record. – The record of public documents referred
to in paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a certificate
that such officer has the custody. If the office in which the record is kept is
in a foreign country, the certificate may be made by a secretary of the
embassy or legation, consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and authenticated by the seal of
his office.

The Walden Affidavit Failed to Prove New York Law and Jurisprudence

 The Bank’s motion for PSJ as supported by the Walden Affidavit does not
demonstrate that Guerrero’s claims are sham, fictitious or contrived. On the
 contrary, the Walden affidavit shows that the facts and material allegations
as pleaded by the parties are disputed and there are substantial triable
issues necessitating a formal trial.

 Foreign laws are not a matter of judicial notice. Like any other fact, they
must be alleged and proven. Certainly, the conflicting allegations as to
whether New York law or Philippine law applies to Guerrero’s claims
present a clear dispute on material allegations which can be resolved only
by a trial on the merits.

 The Bank, however, cannot rely on Willamette Iron and Steel Works v.
Muzzal or Collector of Internal Revenue v. Fisher to support its cause.
These cases involved attorneys testifying in open court during the trial in
the Philippines and quoting the particular foreign laws sought to be
established. On the other hand, the Walden Affidavit was taken abroad ex
parte and the affiant never testified in open court. The Walden Affidavit
cannot be considered as proof of New York law on damages not only
because it is self-serving but also because it does not state the specific
New York law on damages.

 The Walden Affidavit states conclusions from the affiant’s personal

interpretation and opinion of the facts of the case vis a vis the alleged laws
and jurisprudence without citing any law in particular. The citations in the
Walden Affidavit of various U.S. court decisions do not constitute proof of
the official records or decisions of the U.S. courts.

 While the Bank attached copies of some of the U.S. court decisions cited in
the Walden affidavit, these copies do not comply with Section 24 of Rule
132 on proof of official records or decisions of foreign courts.

 The Bank failed to comply with Section 24 of Rule 132 on how to prove a
foreign law and decisions of foreign courts. The Walden Affidavit did not
prove the current state of New York law and jurisprudence. Thus, the Bank
has only alleged, but has not proved, what New York law and jurisprudence
are on the matters at issue.

It Was Not Mandatory for Guerrero to Submit an Opposing Affidavit to the

Walden Affidavit

 Next, the Bank makes much of Guerrero’s failure to submit an opposing

affidavit to the Walden Affidavit. However, the pertinent provision of Rule
35 Sec 3 of the old Rules of Court did not make the submission of an
opposing affidavit mandatory. Guerrero need not file an opposing affidavit
to the Walden affidavit because his complaint itself controverts the matters
 set forth in the Bank’s motion and the Walden affidavit. A party should not
be made to deny matters already averred in his complaint.

 There being substantial triable issues between the parties, the courts a
quo correctly denied the Bank’s motion for partial summary judgment.
There is a need to determine by presentation of evidence in a regular trial if
the Bank is guilty of any wrongdoing and if it is liable for damages under
the applicable laws.

20. Hasegawa v. Kitamura, G.R. No. 149177, November 23, 2007

In March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was
contracted by the Department of Public Works and Highways (DPWH) to supervise
the construction of the Southern Tagalog Access Road. In April 1999, Nippon
entered into an independent contractor agreement (ICA) with Minoru Kitamura for
the latter to head the said project. The ICA was entered into in Japan and is
effective for a period of 1 year (so until April 2000). In January 2000, DPWH
awarded the Bongabon-Baler Road project to Nippon. Nippon subsequently
assigned Kitamura to head the road project. But in February 2000, Kazuhiro
Hasegawa, the general manager of Nippon informed Kitamura that they are pre-
terminating his contract. Kitamura sought Nippon to reconsider but Nippon refused
to negotiate. Kitamura then filed a complaint for specific performance and
damages against Nippon in the RTC of Lipa.

Hasegawa filed a motion to dismiss on the ground that the contract was entered in
Japan hence, applying the principle of lex loci celebracionis, cases arising from the
contract should be cognizable only by Japanese courts. The trial court denied the
motion. Eventually, Nippon filed a petition for certiorari with the Supreme Court.

Hasegawa, on appeal significantly changed its theory, this time invoking forum non
conveniens; that the RTC is an inconvenient forum because the parties are
Japanese nationals who entered into a contract in Japan. Kitamura on the other
hand invokes the trial court’s ruling which states that matters connected with the
performance of contracts are regulated by the law prevailing at the place of
performance, so since the obligations in the ICA are executed in the Philippines,
courts here have jurisdiction.

ISSUE: Whether or not the complaint against Nippon should be dismissed.

HELD: No. The trial court did the proper thing in taking cognizance of it.

In the first place, the case filed by Kitamura is a complaint for specific performance
and damages. Such case is incapable of pecuniary estimation; such cases are
 within the jurisdiction of the regional trial court.

Hasegawa filed his motion to dismiss on the ground of forum non conveniens.
However, such ground is not one of those provided for by the Rules as a ground
for dismissing a civil case.

The Supreme Court also emphasized that the contention that Japanese laws
should apply is premature. In conflicts cases, there are three phases and each
next phase commences when one is settled, to wit:

1. Jurisdiction – Where should litigation be initiated? Court must have

jurisdiction over the subject matter, the parties, the issues, the property, the
res. Also 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.

2. Choice of Law – Which law will the court apply? Once a local court takes
cognizance, it does not mean that the local laws must automatically apply.
The court must determine which substantive law when applied to the merits
will be fair to both parties.

3. Recognition and Enforcement of Judgment – Where can the resulting

judgment be enforced?

This case is not yet in the second phase because upon the RTC’s taking
cognizance of the case, Hasegawa immediately filed a motion to dismiss, which
was denied. He filed a motion for reconsideration, which was also denied. Then he
bypassed the proper procedure by immediately filing a petition for certiorari. The
question of which law should be applied should have been settled in the trial court
had Hasegawa not improperly appealed the interlocutory order denying his MFR.

21. Edi-Staff Builders International v. NLRC, G.R. No. 145587, October 26, 2007

In 1993, EDI-Staffbuilders, Inc. (EDI), upon request of Omar Ahmed Ali Bin Bechr
Est. (OAB), a company in Saudi Arabia, sent to OAB resumes from which OAB
can choose a computer specialist. Eleazar Gran was selected. It was agreed that
his monthly salary shall be $850.00. But five months into his service in Saudi
Arabia, Gran received a termination letter and right there and then was removed
from his post. The termination letter states that he was incompetent because he
does not know the ACAD system which is required in his line of work; that he failed
to enrich his knowledge during his 5 month stay to prove his competence; that he
is disobedient because he failed to submit the required daily reports to OAB. Gran
then signed a quitclaim whereby he declared that he is releasing OAB from any
liability in exchange of 2,948.00 Riyal.

When Gran returned, he filed a labor case for illegal dismissal against EDI and
OAB. EDI in its defense averred that the dismissal is valid because when Gran
and OAB signed the employment contract, both parties agreed that Saudi labor
laws shall govern all matters relating to the termination of Gran’s employment; that
under Saudi labor laws, Gran’s termination due to incompetence and
insubordination is valid; that Gran’s insubordination and incompetence is outlined
in the termination letter Gran received. The labor arbiter dismissed the labor case
but on appeal, the National Labor Relations Commission (NLRC) reversed the
decision of the arbiter. The Court of Appeals likewise affirmed the NLRC.

ISSUE: Whether or not the Saudi labor laws should be applied.

HELD: No. The specific Saudi labor laws were not proven in court. EDI did not
present proof as to the existence and the specific provisions of such foreign law.
Hence, processual presumption applies and Philippine labor laws shall be used.
Under our laws, an employee like Gran shall only be terminated upon just cause.
The allegations against him, at worst, shall only merit a suspension not a
dismissal. His incompetence is not proven because prior to being sent to Saudi
Arabia, he underwent the required trade test to prove his competence. The
presumption therefore is that he is competent and that it is upon OAB and EDI to
prove otherwise. No proof of his incompetence was ever adduced in court. His
alleged insubordination is likewise not proven. It was not proven that the
submission of daily track records is part of his job as a computer specialist. There
was also a lack of due process. Under our laws, Gran is entitled to the two notice
rule whereby prior to termination he should receive two notices. In the case at bar,
he only received one and he was immediately terminated on the same day he
received the notice.

Lastly, the quitclaim may not also release OAB from liability. Philippine laws is
again applied here sans proof of Saudi laws. Under Philippine Laws, a quitclaim is
generally frowned upon and are strictly examined. In this case, based on the
circumstances, Gran at that time has no option but to sign the quitclaim. The
quitclaim is also void because his separation pay was merely 2,948 Riyal which is
lower than the $850.00 monthly salary (3,190 Riyal).