I.

INTRODUCTION

3. Functions of Conflict of Laws

a. To proscribe the conditions under which a court or agency is competent to entertain a suit or
proceeding involving facts containing a foreign element.
b. To determine the extent, validity and enforceability of foreign judgment.
c. To determine for each class of cases the particular system if law by reference to which the rights
of the parties must be ascertained.
d. To provide rational and valid rules or guidelines in deciding cases where either the parties,
events or transactions are linked to more than one jurisdiction.
e. To promote stability and uniformity of solutions provided by the laws and courts of each state
called upon to decide conflicts cases.

A. SCOPE OF CONFLICT OF LAWS

1. Definition of Conflict of Laws

That part of the law of each state or nation which determines whether, in dealing with a legal
situation, the law of some other state or nation will be recognized, given effect or applied.

The law concerning the rights of persons within the territory and dominion of one nation, by
reason of acts, private or public, done within the dominion of another nation.

That part of municipal law which governs cases involving a foreign element.

The principles of conflict of laws incorporated in municipal laws of many states are based on
comity of nations.

That part of municipal law of a State which directs its courts and administrative agencies, when
confronted with a legal problem involving a foreign element, whether or not they should apply a
foreign law.

COMITY: is the recognition which one nation allows within its territory to the legislative,
executive, or judicial acts of another nation having due regard both to international duty and
convenience, and to the rights of its own citizens or of other persons who are under the protection
of its laws (Hilton v. Guyot, 1895)

Hilton v. Guyot, 1895: The law concerning the rights of persons within the territory and dominion
of one nation, by reason of acts, private or public, done within the dominion of another nation.

Those universal principles of right and justice which governs the courts of one state having before
them cases involving the operation and effect of laws of another state or country.

That part of law which comes into play when the issue before the court affects some fact or event,
or transaction that is so closely connected with a foreign system of law as to necessitate recourse to
that system.

That part of the law of each state or nation which determines whether, in dealing with a legal
situation, the law of some other state or nation will be recognized, given effect, or applied.

A difference between the laws of two or more jurisdictions with some connection to a case, such
that the outcome depends on which jurisdiction's law will be used to resolve each issue in
dispute. The conflicting legal rules may come from U.S. federal law, the laws of U.S. states, or the
laws of other countries.

An opposition, conflict, or antagonism between different laws of the same state or sovereignty
upon the same subject-matter.

A similar inconsistency between the municipal laws of different states or countries, arising in the
case of persons who have acquired rights or a status, or made contracts, or incurred obligations,
within the territory of two or more states.

That branch of jurisprudence, arising from the diversity of the laws of different nations in their
application to rights and remedies, which reconciles the inconsistency, or decides which law or
system is to govern in the particular case, or settles the degree of force to be accorded to the law of
a foreign country, (the acts or rights in question having arisen under it,) either where it varies from
the domestic law, or where the domestic law is silent or not exclusively applicable to the case in
point. In this sense it is more properly called private international law.

Dissimilarity or discrepancy between the laws of different legal orders, such as states or nations,
with regard to the applicable legal rules and principles in a matter that each legal order wishes to
regulate.

Also called private international law. the branch of law dealing with the determination of the
law applicable to a private-law matter, of the legal order having jurisdiction to adjudicate such a
matter, and of the extent to which an adjudication in such a matter by another legal order is to be
recognized and enforced locally.

Concerns relations across different legal jurisdictions between persons, and sometimes also
companies, corporations and other legal entities.

Part of the Law of every State which deals with cases having a foreign element.

4. Significance/Importance of Conflict of Laws

Will encompass both conflicts of theory and practice of courts in applying these theories in
various areas of substantive law.
5. Identifying Issues of Conflict of Laws
a. Issue of adjudicatory jurisdiction which determines the circumstances that allow for a legal
order to impose upon its judiciary the task of deciding multi-state and multinational disputes.
b. Choice-of-law which refers to the probable sources from which the applicable law of the
controversy may be derived.
c. The recognition and enforcement of foreign judgments. This deals with the study of situations
which justify recognition by the forum court of a judgment rendered by a foreign court or the enforcement of
such within the forum.
B. CONFLICT OF LAWS AND PUBLIC INTERNATIONAL LAW
1. Distinguish
In contradistinction to Public International Law, which seeks primarily to regulate the relations
between different sovereign States and is, at any rate in theory, the same everywhere, the rules of PIL are
different from country to country.
CONFLICT OF LAWS
LAW OF NATIONS
(Private International Law)
(Public International Law)
PRIL principally governs individuals in their private Except in cases involving violation of human
transactions which involve a foreign element, e.g., rights, PIL principally governs states in their
cutting across more than one municipal law relationships amongst themselves.
jurisdiction.
As to Nature or Character
National, municipal or local in character.
International in character.
The central distinction lies in the sources of law
Generally derived from the internal law of each state Article 38 of the Statute of the International Court
and not from any international law extraneous to of Justice, namely, custom, treaty, and general
municipal law.
principles of law recognized by civilized nations
XPN: Conflict of laws question governed by a treaty, and juridical decisions and teachings of the most
e.g., the Hague Convention on the Conflict of Laws highly qualified publicists.
relating to the Form of Testamentary Dispositions,
signed by 18 parties whose municipal courts are
accordingly bound to apply the convention.
Persons involved
Governs individuals or corporations.
Governs only states and internationally
recognized entities, or organizations.
As to Transactions
Relates to private transactions between individuals.
Involves state-to-state or government-togovernment matters.
As to Remedies
All the remedies are provided by municipal laws of the
In case of violation of international law, a state
state, such as resort to courts or administrative
may resort to diplomatic protest, peaceful means
tribunals.
of settlement of international disputes such as
diplomatic negotiations, arbitration or
conciliation, or adjudication by filing a case before
international tribunals. The state may even use
force short of war and eventually go to war.

2. Elements of Conflict of Laws

a. Internationality/Foreign Element
* FOREIGN ELEMENT may refer to parties, property, events, or
transactions.
* A contract with some system of Law other than the domestic Law.
b. Horizontal Relations

There is a legal problem involving a foreign element; a case involving a factual situation that
cuts across territorial lines and is affected by diverse laws of two or more States is said to
contain a foreign element.

The primary function is to determine whether the rules of law or the judgments of some other
State/s will govern and if so, to what extent should these be recognized or applied in the forum.

2. Sources
a. Direct Sources
- Constitution
- Bilateral and multilateral treaties and international conventions
- Codifications and special statutes
- Special laws
- Judicial decisions
- International customs
b. Indirect Sources
- The natural moral law
- The writings and treatises of thinkers, famous writers and jurists

Art. 815. When a Filipino is in a foreign country, he is authorized to make a will in any of the forms
established by the law of the country in which he may be. Such will may be probated in the Philippines.
Art. 816. The will of an alien who is abroad produces effect in the Philippines if made with the formalities
prescribed by the law of the place in which he resides, or according to the formalities observed in his country,
or in conformity with those which this Code prescribes.
Art. 817. A will made in the Philippines by a citizen or subject of another country, which is executed in
accordance with the law of the country of which he is a citizen or subject, and which might be proved and
allowed by the law of his own country, shall have the same effect as if executed according to the laws of the
Philippines.
Art. 818. Two or more persons cannot make a will jointly, or in the same instrument, either for their
reciprocal benefit or for the benefit of a third person.
Art. 819. Wills, prohibited by the preceding article, executed by Filipinos in a foreign country shall not be
valid in the Philippines, even though authorized by the laws of the country where they may have been
executed.
Art. 829. A revocation done outside the Philippines, by a person who does not have his domicile in this
country, is valid when it is done according to the law of the place where the will was made, or according to the
law of the place in which the testator had his domicile at the time; and if the revocation takes place in this
country, when it is in accordance with the provisions of this Code.
Art. 1039. Capacity to succeed is governed by the law of the nation of the decedent.
SECTION 1. - Consent
Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it came to his
knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer was
made.
Art. 1753. The law of the country to which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration.

C. CONFLICT OF LAWS UNDER COMMON LAW AND PRIVATE

INTERNATIONAL LAW UNDER CIVIL LAW
D. SOURCES OF CONFLICTS OF LAW RULES
1. Domestic
a. Constitution, Art. IV and V, Sec. 1
ARTICLE IV
CITIZENSHIP
Section 1. The following are citizens of the Philippines:
1.
Those who are citizens of the Philippines at the time of the adoption of this Constitution;
2.
Those whose fathers or mothers are citizens of the Philippines;
3.
Those born before January 17, 1973, of Filipino mothers, who elect Philippine Citizenship upon
reaching the age of majority; and
4.
Those who are naturalized in the accordance with law.
Section 2. Natural-born citizens are those who are citizens of the Philippines from birth without having to
perform any act to acquire or perfect their Philippine citizenship. Those who elect Philippine citizenship in
accordance with paragraph (3), Section 1 hereof shall be deemed natural-born citizens.
Section 3. Philippine citizenship may be lost or reacquired in the manner provided by law.
Section 4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their act or
omission they are deemed, under the law to have renounced it.
Section 5. Dual allegiance of citizens is inimical to the national interest and shall be dealt with by law.
ARTICLE V
SUFFRAGE
Section 1. Suffrage may be exercised by all citizens of the Philippines, not otherwise disqualified by law, who
are at least eighteen years of age, and who shall have resided in the Philippines for at least one year and in the
place wherein they propose to vote, for at least six months immediately preceding the election. No literacy,
property, or other substantive requirement shall be imposed on the exercise of suffrage.
Section 2. The Congress shall provide a system for securing the secrecy and sanctity of the ballot as well as a
system for absentee voting by qualified Filipinos abroad.
The Congress shall also design a procedure for the disabled and the illiterates to vote without the assistance of
other persons. Until then, they shall be allowed to vote under existing laws and such rules as the Commission
on Elections may promulgate to protect the secrecy of the ballot.

c. Family Code of the Philippines, Arts. 10, 21, 26, 35, 36, 37, 38,
80, 96, 184 & 187
Art. 10. Marriages between Filipino citizens abroad may be solemnized by a consul-general, consul or viceconsul of the Republic of the Philippines. The issuance of the marriage license and the duties of the local civil
registrar and of the solemnizing officer with regard to the celebration of marriage shall be performed by said
consular official.
Art. 21. When either or both of the contracting parties are citizens of a foreign country, it shall be necessary
for them before a marriage license can be obtained, to submit a certificate of legal capacity to contract
marriage, issued by their respective diplomatic or consular officials.
Stateless persons or refugees from other countries shall, in lieu of the certificate of legal capacity
herein required, submit an affidavit stating the circumstances showing such capacity to contract marriage.
Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country
where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited
under Articles 35 (1), (4), (5) and (6), 3637 and 38. (17a)
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law.
Chapter 3. Void and Voidable Marriages
Art. 35. The following marriages shall be void from the beginning:
(1) Those contracted by any party below eighteen years of age even with the consent of parents or guardians;
(2) Those solemnized by any person not legally authorized to perform marriages unless such marriages were
contracted with either or both parties believing in good faith that the solemnizing officer had the legal
authority to do so;
(3) Those solemnized without license, except those covered the preceding Chapter;
(4) Those bigamous or polygamous marriages not failing under Article 41;
(5) Those contracted through mistake of one contracting party as to the identity of the other; and
(6) Those subsequent marriages that are void under Article 53.
Art. 36. A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, shall likewise be void even if such
incapacity becomes manifest only after its solemnization. (As amended by Executive Order 227)
Art. 37. Marriages between the following are incestuous and void from the beginning, whether relationship
between the parties be legitimate or illegitimate:
(1) Between ascendants and descendants of any degree; and
(2) Between brothers and sisters, whether of the full or half blood. (81a)
Art. 38. The following marriages shall be void from the beginning for reasons of public policy:
(1) Between collateral blood relatives whether legitimate or illegitimate, up to the fourth civil degree;

b. Civil Code, Arts. 14, 15, 16, 17, 815, 816, 817, 818, 819, 829,
1039, 1319 & 1753
Art. 14. Penal laws and those of public security and safety shall be obligatory upon all who live or sojourn in
the Philippine territory, subject to the principles of public international law and to treaty stipulations.
Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even though living abroad.
Art. 16. Real property as well as personal property is subject to the law of the country where it is stipulated.
However, intestate and testamentary successions, both with respect to the order of succession and to the
amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the
national law of the person whose succession is under consideration, whatever may be the nature of the
property and regardless of the country wherein said property may be found.
Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the
laws of the country in which they are executed.
When the acts referred to are executed before the diplomatic or consular officials of the Republic of
the Philippines in a foreign country, the solemnities established by Philippine laws shall be observed in their
execution.
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.

(2) Between step-parents and step-children;

(3) Between parents-in-law and children-in-law;
(4) Between the adopting parent and the adopted child;
(5) Between the surviving spouse of the adopting parent and the adopted child;
(6) Between the surviving spouse of the adopted child and the adopter;
(7) Between an adopted child and a legitimate child of the adopter;
(8) Between adopted children of the same adopter; and
(9) Between parties where one, with the intention to marry the other, killed that other person's spouse, or his
or her own spouse.
Art. 80. In the absence of a contrary stipulation in a marriage settlement, the property relations of the
spouses shall be governed by Philippine laws, regardless of the place of the celebration of the marriage and
their residence.
This rule shall not apply:
(1) Where both spouses are aliens;
(2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and
executed in the country where the property is located; and
(3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property
situated in a foreign country whose laws require different formalities for its extrinsic validity.
Section 4. Ownership, Administrative,
Enjoyment and Disposition of the Community Property
Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In
case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for
proper remedy, which must be availed of within five years from the date of the contract implementing such
decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the common properties, the other spouse may assume sole powers of administration. These
powers do not include disposition or encumbrance without authority of the court or the written consent of the
other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void.
However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the
third person, and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.
Art. 184. The following persons may not adopt:
(1) The guardian with respect to the ward prior to the approval of the final accounts rendered upon the
termination of their guardianship relation;
(2) Any person who has been convicted of a crime involving moral turpitude;
(3) An alien, except:
(a) A former Filipino citizen who seeks to adopt a relative by consanguinity;
(b) One who seeks to adopt the legitimate child of his or her Filipino spouse; or
(c) One who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse a relative by
consanguinity of the latter.
Aliens not included in the foregoing exceptions may adopt Filipino children in accordance with the
rules on inter-country adoptions as may be provided by law.
Art. 187. The following may not be adopted:
(1) A person of legal age, unless he or she is a child by nature of the adopter or his or her spouse, or, prior to
the adoption, said person has been consistently considered and treated by the adopter as his or her own child
during minority.
(2) An alien with whose government the Republic of the Philippines has no diplomatic relations; and
(3) A person who has already been adopted unless such adoption has been previously revoked or rescinded.

TITLE XV
FOREIGN CORPORATIONS
Sec. 123. Definition and rights of foreign corporations. - For the purposes of this Code, a foreign
corporation is one formed, organized or existing under any laws other than those of the Philippines and whose
laws allow Filipino citizens and corporations to do business in its own country or state. It shall have the right
to transact business in the Philippines after it shall have obtained a license to transact business in this country
in accordance with this Code and a certificate of authority from the appropriate government agency.
Sec. 129. Law applicable. - Any foreign corporation lawfully doing business in the Philippines shall be
bound by all laws, rules and regulations applicable to domestic corporations of the same class, except such
only as provide for the creation, formation, organization or dissolution of corporations or those which fix the
relations, liabilities, responsibilities, or duties of stockholders, members, or officers of corporations to each
other or to the corporation.
Sec. 133. Doing business without a license. - No foreign corporation transacting business in the
Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any
action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may
be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action
recognized under Philippine laws.
f. Rules of Court, Rule 4, Sec. 2; Rule 8, Sec. 6; Rule 11, Sec. 2;
Rule 14, Sec. 12, 14, 15, & 16; Rule 23, Secs. 11 & 12; Rule 39,
Sec. 48; Rule 73, Sec. 1; Rule 77, Sec. 1; Rule 92, Sec. 1; Rule
131, Sec. 3(n); Rule 132, Secs. 19(a), 24 & 25
RULE 4
VENUE OF ACTIONS
Sec. 2. Venue of personal actions. All other actions may be commenced and tried where the plaintiff or
any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in
the case of a non-resident defendant where he may be found, at the election of the plaintiff.
RULE 8
MANNER OF MAKING ALLEGATIONS IN PLEADINGS
Sec. 6. Judgment. In pleading a judgment or decision of a domestic or foreign court, judicial or quasijudicial tribunal, or of a board or officer, it is sufficient to aver the judgment or decision without setting forth
matter showing jurisdiction to render it.
RULE 11
WHEN TO FILE RESPONSIVE PLEADINGS
Sec. 2. Answer of a defendant foreign private juridical entity. Where the defendant is a foreign
private juridical entity and service of summons is made on the government official designated by law to receive
the same, the answer shall be filed within thirty (30) days after receipt of summons by such entity.
RULE 14
SUMMONS
Sec. 12. Service upon foreign private juridical entity. When the defendant is a foreign private juridical
entity which has transacted business in the Philippines, service may be made on its resident agent designated
in accordance with law for that purpose, or, if there be no such agent, on the government official designated by
law to that effect, or on any of its officers or agents within the Philippines.
Sec. 13. Service upon public corporations. When the defendant is the Republic of the Philippines,
service may be effected on the Solicitor General; in case of a province, city or municipality, or like public
corporations, service may be effected on its executive head, or on such other officer or officers as the law or the
court may direct.
Sec. 14. Service upon defendant whose identity or whereabouts are unknown. In any action
where the defendant is designated as an unknown owner, or the like, or whenever his whereabouts are
unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon him by
publication in a newspaper of general circulation and in such places and for such time as the court may order.
Sec. 15. Extraterritorial service. When the defendant does not reside and is not found in the Philippines,
and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property
within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which
the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the
property of the defendant has been attached within the Philippines, service may, by leave of court, be effected
out of the Philippines by personal service as under section 6; or by publication in a newspaper of general
circulation in such places and for such time as the court may order, in which case a copy of the summons and
order of the court shall be sent by registered mail to the last known address of the defendant, or in any other
manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which
shall not be less than sixty (60) days after notice, within which the defendant must answer.
Sec. 16. Residents temporarily out of the Philippines. When any action is commenced against a
defendant who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave
of court, be also effected out of the Philippines, as under the preceding section.

d. Revised Penal Code, Art. 2

Art. 2. Application of its provisions. Except as provided in the treaties and laws of preferential
application, the provisions of this Code shall be enforced not only within the Philippine Archipelago, including
its atmosphere, its interior waters and maritime zone, but also outside of its jurisdiction, against those who: 1.
Should commit an offense while on a Philippine ship or airship
2. Should forge or counterfeit any coin or currency note of the Philippine Islands or obligations and securities
issued by the Government of the Philippine Islands;
3. Should be liable for acts connected with the introduction into these islands of the obligations and securities
mentioned in the presiding number;
4. While being public officers or employees, should commit an offense in the exercise of their functions; or
5. Should commit any of the crimes against national security and the law of nations, defined in Title One of
Book Two of this Code.
e. Corporation Code, Secs. 123, 129 & 133

RULE 23
DEPOSITIONS PENDING ACTIONS
Sec. 11. Persons before whom depositions may be taken in foreign countries. In a foreign state or
country, depositions may be taken (a) on notice before a secretary of embassy or legation, consul general,
consul, vice-consul, or consular agent of the Republic of the Philippines; (b) before such person or officer as
may be appointed by commission or under letters rogatory; or (c) the person referred to in section 14 hereof.
Sec. 12. Commission or letters rogatory. A commission or letters rogatory shall be issued only when
necessary or convenient, on application and notice, and on such terms and with such direction as are just and
appropriate. Officers may be designated in notices or commissions either by name or descriptive title and
letters rogatory may be addressed to the appropriate judicial authority in the foreign country.
RULE 39
EXECUTION, SATISFACTION AND EFFECT OF JUDGMENTS
Sec. 48. Effect of foreign judgments or final orders. The effect of a judgment or final order of a
tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows:
(a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon
the title to the thing; and
(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence
of a right as between the parties and their successors in interest by a subsequent title.
In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact.
SETTLEMENT OF ESTATE OF DECEASED PERSONS
RULE 73
VENUE AND PROCESSES
Sec. 1. Where estate of deceased person settled. If the decedent is an inhabitant of the Philippines at
the time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration
granted, and his estate settled, in the Court of First Instance in the province in which he resides at the time of
his death, and if he is an inhabitant of a foreign country, the Court of First Instance of any province in which
he had estate. The court first taking cognizance of the settlement of the estate of a decedent, shall exercise
jurisdiction to the exclusion of all other courts. The jurisdiction assumed by a court, so far as it depends on the
place of residence of the decedent, or of the location of his estate, shall not be contested in a suit or proceeding,
except in an appeal from that court, in the original case, or when the want of jurisdiction appears on the
record.
RULE 77
ALLOWANCE OF WILL PROVED OUTSIDE OF PHILIPPINES AND ADMINISTRATION OF
ESTATE THEREUNDER
Sec. 1. Will proved outside Philippines may be allowed here. Wills proved and allowed in a foreign
country, according to the laws of such country, may be allowed, filed, and recorded by the proper Court of First
Instance in the Philippines.
RULE 92
VENUE
Sec. 1. Where to institute proceedings. Guardianship of the person or estate of a minor or incompetent
may be instituted in the Court of First Instance of the province, or in the justice of the peace court of the
municipality, or in the municipal court of the chartered city where the minor or incompetent person resides,
and if he resides in a foreign country, in the Court of First Instance of the province wherein his property or
part thereof is situated; provided, however, that where the value of the property of such minor or incompetent
exceeds the jurisdiction of the justice of the peace or municipal court, the proceedings shall be instituted in the
Court of First Instance. In the City of Manila, the proceedings shall be instituted in the Juvenile and Domestic
Relations Court.
RULE 131
Burden of Proof and Presumptions
Sec. 3 . Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but
may be contradicted and overcome by other evidence:
(n)That a court, or judge acting as such, whether in the Philippines or elsewhere, was acting in the lawful
exercise of jurisdiction;
RULE 132
PRESENTATION OF EVIDENCE
A. EXAMINATION OF WITNESSES
B. AUTHENTICATION AND PROOF OF DOCUMENTS
Sec. 19 . Classes of Documents. For the purpose of their presentation 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 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.
Sec. 25 . What attestation of copy must state. Whenever a copy of a document or record is attested for
the purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the original,
or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting
officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court.
2. International
a. Statutes of Hague Convention Conference on Private
International Law
(Entered into force on 15 July 1955)
The Governments of the countries hereinafter specified:
the Federal Republic of Germany, Austria, Belgium, Denmark, Spain, Finland, France, Italy, Japan, Luxembourg, Norway, the
Netherlands, Portugal, the United Kingdom of Great Britain and Northern Ireland, Sweden and Switzerland;
In view of the permanent character of the Hague Conference on Private International Law;
Desiring to stress that character;
Having, to that end, deemed it desirable to provide the Conference with a Statute;
Have agreed upon the following provisions:
Article 1
The purpose of the Hague Conference is to work for the progressive unification of the rules of private international law.
Article 2
(1) Members of the Hague Conference on Private International Law are the States which have already participated in one or
more Sessions of the Conference and which accept the present Statute.
(2) Any other State, the participation of which is from a juridical point of view of importance for the work of the Conference,
may become a Member. The admission of new Member States shall be decided upon by the Governments of the participating
States, upon the proposal of one or more of them, by a majority of the votes cast, within a period of six months from the date on
which that proposal is submitted to the Governments.
(3) The admission shall become effective upon the acceptance of the present Statute by the State concerned.
Article 3
(1) The Member States of the Conference may, at a meeting concerning general affairs and policy where the majority of
Member States is present, by a majority of the votes cast, decide to admit also as a Member any Regional Economic Integration
Organisation which has submitted an application for membership to the Secretary General. References to Members under this
Statute shall include such Member Organisations, except as otherwise expressly provided. The admission shall become effective
upon the acceptance of the Statute by the Regional Economic Integration Organisation concerned.
(2) To be eligible to apply for membership of the Conference, a Regional Economic Integration Organisation must be one
constituted solely by sovereign States, and to which its Member States have transferred competence over a range of matters
within the purview of the Conference, including the authority to make decisions binding on its Member States in respect of those
matters.
(3) Each Regional Economic Integration Organisation applying for membership shall, at the time of such application, submit a
declaration of competence specifying the matters in respect of which competence has been transferred to it by its Member States.
(4) Each Member Organisation and its Member States shall ensure that any change regarding the competence of the Member
Organisation or in its membership shall be notified to the Secretary General, who shall circulate such information to the other
Members of the Conference.
(5) Member States of the Member Organisation shall be presumed to retain competence over all matters in respect of which
transfers of competence have not been specifically declared or notified.
(6) Any Member of the Conference may request the Member Organisation and its Member States to provide information as to
whether the Member Organisation has competence in respect of any specific question which is before the Conference. The
Member Organisation and its Member States shall ensure that this information is provided on such request.
(7) The Member Organisation shall exercise membership rights on an alternative basis with its Member States that are
Members of the Conference, in the areas of their respective competences.
(8)
The Member Organisation may exercise on matters within its competence, in any meetings of the Conference in which it is
entitled to participate, a number of votes equal to the number of its Member States which have transferred competence to the
Member Organisation in respect of the matter in question, and which are entitled to vote in and have registered for such
meetings. Whenever the Member Organisation exercises its right to vote, its Member States shall not exercise theirs, and
conversely.
(9) "Regional Economic Integration Organisation" means an international organisation that is constituted solely by sovereign
States, and to which its Member States have transferred competence over a range of matters, including the authority to make
decisions binding on its Member States in respect of those matters.
Article 4
(1) The Council on General Affairs and Policy (hereafter "the Council"), composed of all Members, has charge of the operation
of the Conference. Meetings of the Council shall, in principle, be held annually.
(2) The Council ensures such operation through a Permanent Bureau, the activities of which it directs.
(3) The Council shall examine all proposals intended to be placed on the Agenda of the Conference. It shall be free to
determine the action to be taken on such proposals.
(4) The Netherlands Standing Government Committee, instituted by Royal Decree of 20 February 1897 with a view to
promoting the codification of private international law, shall, after consultation with the Members of the Conference, determ ine
the date of the Diplomatic Sessions.
(5) The Standing Government Committee shall address itself to the Government of the Netherlands for the convocation of the
Members. The Chair of the Standing Government Committee presides over the Sessions of the Conference.
(6) The Ordinary Sessions of the Conference shall, in principle, be held every four years.
(7) If necessary, the Council may, after consultation with the Standing Government Committee, request the Government of the
Netherlands to convene the Conference in Extraordinary Session.
(8)
The Council may consult the Standing Government Committee on any other matter relevant to the Conference.

f. Protocol on the Law Applicable to Maintenance Obligations,

23 November 2007

Article 5
(1) The Permanent Bureau shall have its seat at The Hague. It shall be composed of a Secretary General and four Secretaries
who shall be appointed by the Government of the Netherlands upon presentation by the Standing Government Committee.
(2) The Secretary General and the Secretaries must possess appropriate legal knowledge and practical experience. In their
appointment account shall also be taken of diversity of geographic representation and of legal expertise.
(3) The number of Secretaries may be increased after consultation with the Council and in accordance with Article 10.
Article 6
Under the direction of the Council, the Permanent Bureau shall be charged with a)
the preparation and organisation of the Sessions of the Hague Conference and the meetings of the Council and of any
Special Commissions;
b)
the work of the Secretariat of the Sessions and meetings envisaged above;
c)
all the tasks which are included in the activity of a secretariat.
Article 7
(1) With a view to facilitating communication between the Members of the Conference and the Permanent Bureau, the
Government of each of the Member States shall designate a national organ and each Member Organisation a contact organ.
(2) The Permanent Bureau may correspond with all the organs so designated and with the competent international
organisations.
Article 8
(1) The Sessions and, in the interval between Sessions, the Council, may set up Special Commissions to prepare draft
Conventions or to study all questions of private international law which come within the purpose of the Conference.
(2) The Sessions, Council and Special Commissions shall, to the furthest extent possible, operate on the basis of consensus.
Article 9
(1) The budgeted costs of the Conference shall be apportioned among the Member States of the Conference.
(2) A Member Organisation shall not be required to contribute in addition to its Member States to the annual budget of the
Conference, but shall pay a sum to be determined by the Conference, in consultation with the Member Organisa tion, to cover
additional administrative expenses arising out of its membership.
(3) In any case, travelling and living expenses of the delegates to the Council and the Special Commissions shall be payable by
the Members represented.
Article 10
(1) The budget of the Conference shall be submitted each year to the Council of Diplomatic Representatives of the Member
States at The Hague for approval.
(2) These Representatives shall also apportion among the Member States the expenses which are charged in that budget to the
latter.
(3) The Diplomatic Representatives shall meet for such purposes under the chairmanship of the Minister of Foreign Affairs of
the Kingdom of the Netherlands.
Article 11
(1) The expenses resulting from the Ordinary and Extraordinary Sessions of the Conference shall be borne by the Government
of the Netherlands.
(2) In any case, the travelling and living expenses of the delegates shall be payable by the respective Members.
Article 12
The usages of the Conference shall continue to be observed on all points, unless contrary to the present Statute or to the
Regulations.
Article 13
(1) Amendments to the Statute must be adopted by consensus of the Member States present at a meeting concerning general
affairs and policy.
(2) Such amendments shall enter into force, for all Members, three months after they are approved by two thirds of the
Member States in accordance with their respective internal procedures, but not earlier than nine months from the date of their
adoption.
(3) The meeting referred to in paragraph 1 may change by consensus the periods of time referred to in paragraph 2.
Article 14
To provide for their execution, the provisions of the present Statute will be complemented by Regulations. The Regulations shall
be established by the Permanent Bureau and submitted to a Diplomatic Session, the Council of Diplomatic Representatives or the
Council on General Affairs and Policy for approval.
Article 15
(1) The present Statute shall be submitted for acceptance to the Governments of States which participated in one or more
Sessions of the Conference. It shall enter into force as soon as it is accepted by the majority of the States represented at the
Seventh Session.
(2) The statement of acceptance shall be deposited with the Netherlands Government, which shall make it known to the
Governments referred to in the first paragraph of this Article.
(3) The Netherlands Government shall, in the case of the admission of a new Member, inform all Members of the declaration
of acceptance of that new Member.
Article 16
(1) Each Member may denounce the present Statute after a period of five years from the date of its entry into force under the
terms of Article 15, paragraph 1.
(2) Notice of the denunciation shall be given to the Ministry of Foreign Affairs of the Kingdom of the Netherlands at least six
months before the expiration of the budgetary year of the Conference, and shall become effective at the expiration of the said
year, but only with respect to the Member which has given notice thereof.

E. GENERAL FRAMEWORK OF RESOLUTION OF CONFLICTS PROBLEMS

1. Jurisdiction
Where can or should litigation be initiated
2. Choice of Law/Characterization
Which law will the court apply
3. Enforcement of Judgment
Where can the resulting judgment be enforced

b. Convention on the Jurisdiction of the Selected Forum in the

Case of International Sales of Goods, 15 April 1958
c. Convention on the Settlement of the Conflicts between the
Law of Nationality and the Law of Domicile, 15 June 1955
d. Convention on the Recognition of the Legal Personality of
Foreign Companies, Associations and Institutions, 1 June
1956
e. Convention on the Choice of Court Agreements, 30 June 2005

CASES:

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 the Reply and Rejoinder, it
appearing that herein petitioner is not clearly entitled thereto
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition 29 for Review
with Prayer for Temporary Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of Appeals rendered the
Decision 30 dated April 10, 1996, now also assailed. It ruled that the Philippines is an appropriate forum
considering that the Amended Complaint's basis for recovery of damages is Article 21 of the Civil Code, and
thus, clearly within the jurisdiction of respondent Court. It further held that certiorari is not the proper
remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in
case of an adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary
Restraining Order 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.

1. G.R. No. 122191 October 8, 1998

SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF APPEALS, MILAGROS P. MORADA and
HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial
Court of Quezon City, respondents.
FACTS:

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 the room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape
plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her.
Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her about
the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and
Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for
the immediate release of the detained crew members but did not succeed because plaintiff refused to
cooperate. She was afraid that she might be tricked into something she did not want because of her inability to
understand the local dialect. She also declined to sign a blank paper and a document written in the local
dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian
authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDI (sic). In September 1990, defendant SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her,
her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia.
When she saw him, he brought her to the police station where the police took her passport and questioned her
about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement
dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport
and allowed her to catch the afternoon flight out of Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the
departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a
later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of
the SAUDIA office brought her to a Saudi court where she was asked to sign a document written in Arabic.
They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff
signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.
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 AlBalawi ("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

Petitioner SAUDIA raised the following issues:

I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article 21 of the New
Civil Code since the proper law applicable is the law of the Kingdom of Saudi Arabia inasmuch as this case
involves what is known in private international law as a "conflicts problem". Otherwise, the Republic of the
Philippines will sit in judgment of the acts done by another sovereign state which is abhorred.
II
Leave of court before filing a supplemental pleading is not a jurisdictional requirement. Besides, the matter as
to absence of leave of court is now moot and academic when this Honorable Court required the respondents to
comment on petitioner's April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary
Restraining Order Within Ten (10) Days From Notice Thereof. Further, the Revised Rules of Court should be
construed with liberality pursuant to Section 2, Rule 1 thereof.
III

Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533 entitled "Saudi
Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental Petition For Review
With Prayer For A Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day
reglementary period as provided for under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the
decision in CA-G.R. SP NO. 36533 has not yet become final and executory and this Honorable Court can take
cognizance of this case. 33

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.

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.
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.

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:
(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).
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.

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 occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any, between the parties is centered. 62
As already discussed, there is basis for the claim that over-all injury occurred and lodged in the
Philippines. There is likewise no question that private respondent is a resident Filipina national, working with
petitioner, a resident foreign corporation engaged here in the business of international air carriage.
Thus,
the "relationship" between the parties was centered here, although it should be stressed that this suit is not
based on mere labor law violations. From the record, the claim that the Philippines has the most significant
contact with the matter in this dispute, 63 raised by private respondent as plaintiff below against defendant
(herein petitioner), in our view, has been properly established.
Prescinding from this premise that the Philippines is the situs of the tort complained of and the
place "having the most interest in the problem", we find, by way of recapitulation, that the Philippine law on
tort liability should have paramount application to and control in the resolution of the legal issues arising out
of this case. Further, we hold that the respondent Regional Trial Court has jurisdiction over the parties and the
subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply
Philippine law.
Moreover, we find untenable petitioner's insistence that "[s]ince private respondent
instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter." 64 As
aptly said by private respondent, she has "no obligation to plead and prove the law of the Kingdom of Saudi
Arabia since her cause of action is based on Articles 19 and 21" of the Civil Code of the Philippines. In her
Amended Complaint and subsequent pleadings, she never alleged that Saudi law should govern this case. 65
And as correctly held by the respondent appellate court, "considering that it was the petitioner who was
invoking the applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to
establish what the law of Saudi Arabia is". 66
Lastly, no error could be imputed to the respondent appellate court in upholding the trial court's
denial of defendant's (herein petitioner's) motion to dismiss the case. Not only was jurisdiction in order and
venue properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the
nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate
outcome of the case below, not just for the benefit of all the litigants, but also for the vindication of the
country's system of law and justice in a transnational setting. With these guidelines in mind, the trial court
must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the
foreign element or elements involved. Nothing said herein, of course, should be construed as prejudging the
results of the case in any manner whatsoever.

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." 55 The
purpose of "characterization" is to enable the forum to select the proper law. 56
Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative
fact. 57 An essential element of conflict rules is the indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim)
and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing. 58
Note that one or more circumstances may be present to serve as the possible test for the
determination of the applicable law. 59 These "test factors" or "points of contact" or "connecting factors" could
be any of the following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular,
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, the lex
loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done. The lex fori the
law of the forum is particularly important because, as we have seen earlier, matters of "procedure" not going
to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content
of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls
under one of the exceptions to the applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship
and of its master or owner as such. It also covers contractual relationships particularly contracts of
affreightment.
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

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-93-18394 entitled
"Milagros P. Morada vs. Saudi Arabia Airlines" is hereby REMANDED to Regional Trial Court of Quezon City,
Branch 89 for further proceedings.
SO ORDERED.

buildings in Nampeidai. The other building in Roppongi shall then be used as the Philippine Embassy
Chancery. At the end of the lease period, all the three leased buildings shall be occupied and used by the
Philippine government. No change of ownership or title shall occur. (See Annex "B" to Reply to Comment) The
Philippine government retains the title all throughout the lease period and thereafter. However, the
government has not acted favorably on this proposal which is pending approval and ratification between the
parties. Instead, on August 11, 1986, President Aquino created a committee to study the disposition/utilization
of Philippine government properties in Tokyo and Kobe, Japan through Administrative Order No. 3, followed
by Administrative Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or
entities to avail of separations' capital goods and services in the event of sale, lease or disposition. The four
properties in Japan including the Roppongi were specifically mentioned in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great
vigor, its decision to sell the reparations properties starting with the Roppongi lot. The property has twice been
set for bidding at a minimum floor price of $225 million. The first bidding was a failure since only one bidder
qualified. The second one, after postponements, has not yet materialized. The last scheduled bidding on
February 21, 1990 was restrained by his Court. Later, the rules on bidding were changed such that the $225
million floor price became merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R. No.
92013 objects to the alienation of the Roppongi property to anyone while the petitioner in G.R. No. 92047 adds
as a principal objection the alleged unjustified bias of the Philippine government in favor of selling the
property to non-Filipino citizens and entities. These petitions have been consolidated and are resolved at the
same time for the objective is the same - to stop the sale of the Roppongi property.

2. G.R. No. 92013 July 25, 1990

SALVADOR H. LAUREL, petitioner, vs. RAMON GARCIA, as head of the Asset Privatization
Trust, RAUL MANGLAPUS, as Secretary of Foreign Affairs, and CATALINO MACARAIG, as
Executive Secretary, respondents.
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner, vs. EXECUTIVE SECRETARY MACARAIG, JR., ASSETS
PRIVATIZATION TRUST CHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL
ROSARIO, et al., as members of the PRINCIPAL AND BIDDING COMMITTEES ON THE
UTILIZATION/DISPOSITION PETITION OF PHILIPPINE GOVERNMENT PROPERTIES IN
JAPAN, respondents.
These are two petitions for prohibition seeking to enjoin respondents, their representatives and
agents from proceeding with the bidding for the sale of the 3,179 square meters of land at 306 Roppongi, 5 Chome Minato-ku Tokyo, Japan scheduled on February 21, 1990. We granted the prayer for a temporary
restraining order effective February 20, 1990. One of the petitioners (in G.R. No. 92047) likewise prayes for a
writ of mandamus to compel the respondents to fully disclose to the public the basis of their decision to push
through with the sale of the Roppongi property inspire of strong public opposition and to explain the
proceedings which effectively prevent the participation of Filipino citizens and entities in the bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on March
13, 1990. After G.R. No. 92047, Ojeda v. Secretary Macaraig, et al. was filed, the respondents were required
to file a comment by the Court's resolution dated February 22, 1990. The two petitions were consolidated on
March 27, 1990 when the memoranda of the parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the respondents filed a motion for an
extension of thirty (30) days to file comment in G.R. No. 92047, followed by a second motion for an extension
of another thirty (30) days which we granted on May 8, 1990, a third motion for extension of time granted on
May 24, 1990 and a fourth motion for extension of time which we granted on June 5, 1990 but calling the
attention of the respondents to the length of time the petitions have been pending. After the comment was
filed, the petitioner in G.R. No. 92047 asked for thirty (30) days to file a reply. We noted his motion and
resolved to decide the two (2) cases.
I
The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan on May 9, 1956, the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area of
approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72 square meters and
categorized as a commercial lot now being used as a warehouse and parking lot for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a residential lot
which is now vacant.
The properties and the capital goods and services procured from the Japanese government for national
development projects are part of the indemnification to the Filipino people for their losses in life and property
and their suffering during World War II.
The Reparations Agreement provides that reparations valued at $550 million would be payable in
twenty (20) years in accordance with annual schedules of procurements to be fixed by the Philippine and
Japanese governments (Article 2, Reparations Agreement). Rep. Act No. 1789, the Reparations Law,
prescribes the national policy on procurement and utilization of reparations and development loans. The
procurements are divided into those for use by the government sector and those for private parties in projects
as the then National Economic Council shall determine. Those intended for the private sector shall be made
available by sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entities in national
development projects.
The Roppongi property was acquired from the Japanese government under the Second Year
Schedule and listed under the heading "Government Sector", through Reparations Contract No. 300 dated
June 27, 1958. The Roppongi property consists of the land and building "for the Chancery of the Philippine
Embassy" (Annex M-D to Memorandum for Petitioner, p. 503). As intended, it became the site of the
Philippine Embassy until the latter was transferred to Nampeidai on July 22, 1976 when the Roppongi
building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi
property has remained undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to
Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a Japanese firm - Kajima
Corporation which shall construct two (2) buildings in Roppongi and one (1) building in Nampeidai and
renovate the present Philippine Chancery in Nampeidai. The consideration of the construction would be the
lease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi and the two (2)

The petitioner in G.R. No. 92013 raises the following issues:

(1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?; and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the Roppongi
property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the
government to alienate the Roppongi property assails the constitutionality of Executive Order No. 296 in
making the property available for sale to non-Filipino citizens and entities. He also questions the bidding
procedures of the Committee on the Utilization or Disposition of Philippine Government Properties in Japan
for being discriminatory against Filipino citizens and Filipino-owned entities by denying them the right to be
informed about the bidding requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots were acquired as
part of the reparations from the Japanese government for diplomatic and consular use by the Philippine
government. Vice-President Laurel states that the Roppongi property is classified as one of public dominion,
and not of private ownership under Article 420 of the Civil Code.
The petitioner submits that the Roppongi property comes under "property intended for public
service" in paragraph 2 of the above provision. He states that being one of public dominion, no ownership by
any one can attach to it, not even by the State. The Roppongi and related properties were acquired for "sites for
chancery, diplomatic, and consular quarters, buildings and other improvements" (Second Year Reparations
Schedule). The petitioner states that they continue to be intended for a necessary service. They are held by the
State in anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated, is
outside the commerce of man, or to put it in more simple terms, it cannot be alienated nor be the subject
matter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the non-use of the
Roppongi property at the moment, the petitioner avers that the same remains property of public dominion so
long as the government has not used it for other purposes nor adopted any measure constituting a removal of
its original purpose or use.
The respondents, for their part, refute the petitioner's contention by saying that the subject
property is not governed by our Civil Code but by the laws of Japan where the property is located. They rely
upon the rule of lex situs which is used in determining the applicable law regarding the acquisition, transfer
and devolution of the title to a property. They also invoke Opinion No. 21, Series of 1988, dated January 27,
1988 of the Secretary of Justice which used the lex situs in explaining the inapplicability of Philippine law
regarding a property situated in Japan.
The respondents add that even assuming for the sake of argument that the Civil Code is applicable,
the Roppongi property has ceased to become property of public dominion. It has become patrimonial property
because it has not been used for public service or for diplomatic purposes for over thirteen (13) years now
(Citing Article 422, Civil Code) and because the intention by the Executive Department and the Congress to
convert it to private use has been manifested by overt acts, such as, among others: (1) the transfer of the
Philippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibility of alienating the
four government properties in Japan; (3) the issuance of Executive Order No. 296; (4) the enactment by the
Congress of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law] on June 10, 1988 which contains a
provision stating that funds may be taken from the sale of Philippine properties in foreign countries; (5) the
holding of the public bidding of the Roppongi property but which failed; (6) the deferment by the Senate in
Resolution No. 55 of the bidding to a future date; thus an acknowledgment by the Senate of the government's

intention to remove the Roppongi property from the public service purpose; and (7) the resolution of this
Court dismissing the petition in Ojeda v. Bidding Committee, et al., G.R. No. 87478 which sought to enjoin the
second bidding of the Roppongi property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality of Executive
Order No. 296. He had earlier filed a petition in G.R. No. 87478 which the Court dismissed on August 1, 1989.
He now avers that the executive order contravenes the constitutional mandate to conserve and develop the
national patrimony stated in the Preamble of the 1987 Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable lands of the public domain to Filipino
citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 of Commonwealth Act 141).itc-asl
(2) The preference for Filipino citizens in the grant of rights, privileges and concessions covering the national
economy and patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair competition and trade practices;
(4) The guarantee of the right of the people to information on all matters of public concern (Section 7, Article
III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned by Filipino citizens of
capital goods received by the Philippines under the Reparations Act (Sections 2 and 12 of Rep. Act No. 1789);
and
(6) The declaration of the state policy of full public disclosure of all transactions involving public interest
(Section 28, Article III, Constitution).
Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional
executive order is a misapplication of public funds He states that since the details of the bidding for the
Roppongi property were never publicly disclosed until February 15, 1990 (or a few days before the scheduled
bidding), the bidding guidelines are available only in Tokyo, and the accomplishment of requirements and the
selection of qualified bidders should be done in Tokyo, interested Filipino citizens or entities owned by them
did not have the chance to comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi
shall be sold for a minimum price of $225 million from which price capital gains tax under Japanese law of
about 50 to 70% of the floor price would still be deducted.
IV
The petitioners and respondents in both cases do not dispute the fact that the Roppongi site and the three
related properties were through reparations agreements, that these were assigned to the government sector
and that the Roppongi property itself was specifically designated under the Reparations Agreement to house
the Philippine Embassy.
The nature of the Roppongi lot as property for public service is expressly spelled out. It is dictated
by the terms of the Reparations Agreement and the corresponding contract of procurement which bind both
the Philippine government and the Japanese government.
There can be no doubt that it is of public dominion unless it is convincingly shown that the
property has become patrimonial. This, the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be
alienated. Its ownership is a special collective ownership for general use and enjoyment, an application to the
satisfaction of collective needs, and resides in the social group. The purpose is not to serve the State as a
juridical person, but the citizens; it is intended for the common and public welfare and cannot be the object of
appropration.

definite Abandonment cannot be inferred from the non-use alone specially if the non-use was attributable not
to the government's own deliberate and indubitable will but to a lack of financial support to repair and
improve the property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must be a
certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose. Even the failure by the government to repair the building in Roppongi is
not abandonment since as earlier stated, there simply was a shortage of government funds. The recent
Administrative Orders authorizing a study of the status and conditions of government properties in Japan
were merely directives for investigation but did not in any way signify a clear intention to dispose of the
properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a provision
in its text expressly authorizing the sale of the four properties procured from Japan for the government sector.
The executive order does not declare that the properties lost their public character. It merely intends to make
the properties available to foreigners and not to Filipinos alone in case of a sale, lease or other disposition. It
merely eliminates the restriction under Rep. Act No. 1789 that reparations goods may be sold only to Filipino
citizens and one hundred (100%) percent Filipino-owned entities. The text of Executive Order No. 296
provides:
Section 1. The provisions of Republic Act No. 1789, as amended, and of other laws to the contrary
notwithstanding, the above-mentioned properties can be made available for sale, lease or any other manner of
disposition to non-Filipino citizens or to entities owned by non-Filipino citizens.
Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi and the
three other properties were earlier converted into alienable real properties. As earlier stated, Rep. Act No. 1789
differentiates the procurements for the government sector and the private sector (Sections 2 and 12, Rep. Act
No. 1789). Only the private sector properties can be sold to end-users who must be Filipinos or entities owned
by Filipinos. It is this nationality provision which was amended by Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources of funds
for its implementation, the proceeds of the disposition of the properties of the Government in foreign
countries, did not withdraw the Roppongi property from being classified as one of public dominion when it
mentions Philippine properties abroad. Section 63 (c) refers to properties which are alienable and not to those
reserved for public use or service. Rep Act No. 6657, therefore, does not authorize the Executive Department to
sell the Roppongi property. It merely enumerates possible sources of future funding to augment (as and when
needed) the Agrarian Reform Fund created under Executive Order No. 299. Obviously any property outside of
the commerce of man cannot be tapped as a source of funds.
The respondents try to get around the public dominion character of the Roppongi property by
insisting that Japanese law and not our Civil Code should apply.
It is exceedingly strange why our top government officials, of all people, should be the ones to
insist that in the sale of extremely valuable government property, Japanese law and not Philippine law should
prevail. The Japanese law - its coverage and effects, when enacted, and exceptions to its provision is not
presented to the Court It is simply asserted that the lex loci rei sitae or Japanese law should apply without
stating what that law provides. It is a ed on faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A
conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable,
such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity
and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined (See Salonga,
Private International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land ownership and its
conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine
which law should apply.

The applicable provisions of the Civil Code are:

ART. 419. Property is either of public dominion or of private ownership.
ART. 420. The following things are property of public dominion
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks shores roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public service or
for the development of the national wealth.
ART. 421. All other property of the State, which is not of the character stated in the preceding article, is
patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as
property belonging to the State and intended for some public service.
Has the intention of the government regarding the use of the property been changed because the
lot has been Idle for some years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time for actual Embassy service does
not automatically convert it to patrimonial property. Any such conversion happens only if the property is
withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property
continues to be part of the public domain, not available for private appropriation or ownership until there is a
formal declaration on the part of the government to withdraw it from being such (Ignacio v. Director of Lands,
108 Phil. 335 [1960]).
The respondents enumerate various pronouncements by concerned public officials insinuating a
change of intention. We emphasize, however, that an abandonment of the intention to use the Roppongi
property for public service and to make it patrimonial property under Article 422 of the Civil Code must be

In the instant case, none of the above elements exists.

The issues are not concerned with validity of ownership or title. There is no question that the
property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of
property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed
by Philippine Law. The rule of lex situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex
situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured through
reparations nor the existence in what body of the authority to sell them. In discussing who are capable of
acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can
acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to
Filipino citizens and entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether
or not this opinion is correct. Why should we discuss who can acquire the Roppongi lot when there is no
showing that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of the recommendation by the
investigating committee to sell the Roppongi property was premature or, at the very least, conditioned on a
valid change in the public character of the Roppongi property. Moreover, the approval does not have the force

10

and effect of law since the President already lost her legislative powers. The Congress had already convened for
more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of public
dominion, there is another obstacle to its sale by the respondents.

memorials to the countless Filipinos who died and suffered. Even if we should become paupers we should not
think of selling them. For it would be as if we sold the lives and blood and tears of our countrymen.
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese government in atonement for its
past belligerence for the valiant sacrifice of life and limb and for deaths, physical dislocation and economic
devastation the whole Filipino people endured in World War II.
It is for what it stands for, and for what it could never bring back to life, that its significance today
remains undimmed, inspire of the lapse of 45 years since the war ended, inspire of the passage of 32 years
since the property passed on to the Philippine government.
Roppongi is a reminder that cannot should not be dissipated.
It is indeed true that the Roppongi property is valuable not so much because of the inflated prices
fetched by real property in Tokyo but more so because of its symbolic value to all Filipinos veterans and
civilians alike.
Whether or not the Roppongi and related properties will eventually be sold is a policy
determination where both the President and Congress must concur. Considering the properties' importance
and value, the laws on conversion and disposition of property of public dominion must be faithfully followed.

There is no law authorizing its conveyance.

Section 79 (f) of the Revised Administrative Code of 1917 provides
Section 79 (f ) Conveyances and contracts to which the Government is a party. In cases in
which the Government of the Republic of the Philippines is a party to any deed or other instrument conveying
the title to real estate or to any other property the value of which is in excess of one hundred thousand pesos,
the respective Department Secretary shall prepare the necessary papers which, together with the proper
recommendations, shall be submitted to the Congress of the Philippines for approval by the same. Such deed,
instrument, or contract shall be executed and signed by the President of the Philippines on behalf of the
Government of the Philippines unless the Government of the Philippines unless the authority therefor be
expressly vested by law in another officer.
The requirement has been retained in Section 48, Book I of the Administrative Code of 1987 (Executive Order
No. 292).
SEC. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the
government by the following:
(1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless
the authority therefor is expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision
or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
It is not for the President to convey valuable real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the Congress. It requires
executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of the
Roppongi property does not withdraw the property from public domain much less authorize its sale. It is a
mere resolution; it is not a formal declaration abandoning the public character of the Roppongi property. In
fact, the Senate Committee on Foreign Relations is conducting hearings on Senate Resolution No. 734 which
raises serious policy considerations and calls for a fact-finding investigation of the circumstances behind the
decision to sell the Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon the
constitutionality of Executive Order No. 296. Contrary to respondents' assertion, we did not uphold the
authority of the President to sell the Roppongi property. The Court stated that the constitutionality of the
executive order was not the real issue and that resolving the constitutional question was "neither necessary nor
finally determinative of the case." The Court noted that "[W]hat petitioner ultimately questions is the use of
the proceeds of the disposition of the Roppongi property." In emphasizing that "the decision of the Executive
to dispose of the Roppongi property to finance the CARP ... cannot be questioned" in view of Section 63 (c) of
Rep. Act No. 6657, the Court did not acknowledge the fact that the property became alienable nor did it
indicate that the President was authorized to dispose of the Roppongi property. The resolution should be read
to mean that in case the Roppongi property is re-classified to be patrimonial and alienable by authority of law,
the proceeds of a sale may be used for national economic development projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed 1990
sale of the Roppongi property. We are resolving the issues raised in these petitions, not the issues raised in
1989.
Having declared a need for a law or formal declaration to withdraw the Roppongi property from
public domain to make it alienable and a need for legislative authority to allow the sale of the property, we see
no compelling reason to tackle the constitutional issues raised by petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions unless these questions are
properly raised in appropriate cases and their resolution is necessary for the determination of the case (People
v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional question although properly
presented by the record if the case can be disposed of on some other ground such as the application of a statute
or general law.

WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition is issued
enjoining the respondents from proceeding with the sale of the Roppongi property in Tokyo, Japan. The
February 20, 1990 Temporary Restraining Order is made PERMANENT.
SO ORDERED.
3. G.R. No. 149177
November 23, 2007
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., vs. MINORU
KITAMURA,
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese
consultancy firm providing technical and management support in the infrastructure projects of foreign
governments,3 entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a
Japanese national permanently residing in the Philippines.4 The agreement provides that respondent was to
extend professional services to Nippon for a year starting on April 1, 1999.5 Nippon then assigned respondent
to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines,
following the company's consultancy contract with the Philippine Government.6
When the STAR Project was near completion, the Department of Public Works and Highways
(DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project.7
Respondent was named as the project manager in the contract's Appendix 3.1.8
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its
International Division, informed respondent that the company had no more intention of automatically
renewing his ICA. His services would be engaged by the company only up to the substantial completion of the
STAR Project on March 31, 2000, just in time for the ICA's expiry.9
Threatened with impending unemployment, respondent, through his lawyer, requested a
negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted that
respondents contract was for a fixed term that had already expired, and refused to negotiate for the renewal of
the ICA.1 0
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].1 8 On August 23, 2000, the CA resolved to dismiss the petition on
procedural groundsfor lack of statement of material dates and for insufficient verification and certification
against forum shopping.19 An Entry of Judgment was later issued by the appellate court on September 20,
2000.20
Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within
the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material
dates and attaching thereto the proper verification and certification. This second petition, which substantially
raised the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.21

The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
The Roppongi property is not just like any piece of property. It was given to the Filipino people in
reparation for the lives and blood of Filipinos who died and suffered during the Japanese military occupation,
for the suffering of widows and orphans who lost their loved ones and kindred, for the homes and other
properties lost by countless Filipinos during the war. The Tokyo properties are a monument to the bravery and
sacrifice of the Filipino people in the face of an invader; like the monuments of Rizal, Quezon, and other
Filipino heroes, we do not expect economic or financial benefits from them. But who would think of selling
these monuments? Filipino honor and national dignity dictate that we keep our properties in Japan as

11

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18,
2001 Decision22 finding 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 certificationas they, in fact didand stating therein the material dates, within
the prescribed period30 in Section 4, Rule 65 of the said Rules.31
The dismissal of a case without prejudice signifies the absence of a decision on the merits and
leaves the parties free to litigate the matter in a subsequent action as though the dismissed action had not been
commenced. In other words, the termination of a case not on the merits does not bar another action involving
the same parties, on the same subject matter and theory.32
Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and
even if petitioners still indicated in the verification and certification of the second certiorari petition that the
first had already been dismissed on procedural grounds,33 petitioners are no longer required by the Rules to
indicate in their certification of 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 scopeits wordings indicate
that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition filed with
the appellate court, and that authority cannot extend to the instant petition for review.36 In a plethora of cases,
however, this Court has liberally applied the Rules or even suspended its application whenever a satisfactory
explanation and a subsequent fulfillment of the requirements have been made.37 Given that petitioners herein
sufficiently explained their misgivings on this point and appended to their Reply38 an updated Authorization39
for Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient
compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the defect in the verification and
certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act on
behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent August
17, 2001 Authorization were issued only by Nippon's president and chief executive officer, not by the
company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by the
board of directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority
from the board.40 Considering that Hasegawa verified and certified the petition only on his behalf and not on
behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office of the Ombudsman.41
Substantial compliance will not suffice in a matter that demands strict observance of the Rules.42 While

technical rules of procedure are designed not to frustrate the ends of justice, nonetheless, they are intended to
effect the proper and orderly disposition of cases and effectively prevent the clogging of court dockets.43
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the
trial court's denial of their motion to dismiss. It is a well-established rule that an order denying a motion to
dismiss is interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus.
The appropriate recourse is to file an answer and to interpose as defenses the objections raised in the motion,
to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course. 44
While there are recognized 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.5 0 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.5 4 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 issuejurisdiction.1wphi1 Jurisdiction, however, has various
aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the
plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the
case and, in cases involving property, over the res or the thing which is the subject of the litigation.57 In
assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority
which establishes and organizes the court. It is given only by law and in the manner prescribed by law.5 8 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

12

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.7 0 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.7 4 The courts power to hear cases and
controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign
nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in
matters regarding rights provided by foreign sovereigns.75
Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court of
its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the
Rules of Court does not include it as a ground.77 Second, whether a suit should be entertained or dismissed on
the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the
sound discretion of the trial court.7 8 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.

In the meantime, the Provincial Director of the Labor Office in Zambales furnished, on August 2,
1974, petitioner 9 a list of forty-six (46) members of respondent union BTEA-KILUSAN and former drivers of
the Blaylock Transport Service, 10 who are within the coverage of the decision of the Secretary of Labor, and
requesting petitioner to report its action on the matter directly to the Chairman, NLRC, Manila. Subsequently,
Santiago A. Guerrero received a letter dated September 24, 1974 11 from Col. Levi L. Basilla, PC (GSC) Camp
Olivas, San Fernando, Pampanga, requesting compliance with the Order dated July 19, 1974 of the NLRC in
NLRC Case No. 214. In his reply letter dated October 4, 1974, Guerrero informed Col. Basilia that he had
substantially complied with the decision of the Secretary of Labor affirming the NLRC Resolution of October
31, 1974 in NLRC Case No. 214, and that any apparent non-compliance therewith was attributable to the
individual complainants who failed to submit themselves for processing and examination as requested by the
authorities of the U.S. Naval Base in Subic, Zambales, preparatory to their absorption by petitioner.
On January 18, 1975, Acting Executive Secretary Roberto V. Reyes, pursuant to Section 10 of
Presidential Decree No. 21, directed the Chief of Constabulary to arrest the executive officers of petitioner. 12
On February 20, 1975, petitioner informed Secretary Reyes that it has substantially complied with the NLRC
Resolution of October 31, 1975 as out of those listed by the Regional Labor Director, only a few passed the
examination given and some of those who passed failed to comply with the final requirements of the U.S.
Naval Base Authority; that only those who passed and complied with the requirements of the U.S. Naval Base
Authority were extended appointments as early as December 16, 1974, but none of them, for evident lack of
interest, has reported for work. 13 In his 1st endorsement dated March 26, 1975, Secretary Zamora required the
Secretary of Labor to verify petitioner's allegations. 14 On the same date, respondent Labor Arbiter Francisco
M. de los Reyes, upon a motion for execution filed by respondent union, issued an Order stating that "upon the
finality thereof and by way of implementing any writ of execution that might be issued in this case, further
hearings shall be held to determine the members of respondent union who are entitled to reinstatement in
accordance with the basic guidelines finally determined in this case." 15
On June 20, 1975, respondent Labor Arbiter De los Reyes ordered the reinstatement of 129
individuals "to their former or substantially equivalent positions without loss of seniority and other rights and
privileges". 16
On July 16,1975, respondent BTEA-KILUSAN filed a Motion for Issuance of Writ of Execution with
respondent Labor Arbiter, 17 but this was objected to by petitioner contending that the Labor Arbiter has no
jurisdiction over NLRC Case No. 214 and, therefore, his proceedings and orders resulting therefrom are null
and void. 18
On September 1, 1975, the Provincial Director of the Zambales Labor Office, pursuant to the
directive of the Secretary of Labor, 19 and the NLRC Resolution dated October 21, 1975 20 submitted a detailed
information to the Assistant Secretary of the Department of Labor on petitioner's compliance, "to enable the
Department of Labor to formally close" NLRC Case No. 214. 21
On September 25, 1975, respondent Labor Arbiter, acting on the motion for execution filed by
respondent union BTEA-KILUSAN, and finding that both the Orders, dated March 26 and June 20, 1975, have
not been appealed pursuant to Article 223 of the Labor Code, declared said Orders final and executory and
directed petitioner Guerrero's Transport Services, Inc. to reinstate the 129 complainants and to pay them the
amount of P4,290.00 each, or a total of P592,110.00 as back wages covering the period from August 22, 1974
to September 20, 1975. 22
On September 26, 1975, respondent Labor Arbiter issued a writ directing the respondent Deputy
Sheriff of Manila levy on the moneys and/or properties of petitioner, 23 and on the same date respondent
Sheriff immediately serve said writ on petitioner who was given a period of five (5) days within which to
comply therewith.
It was on this factual environment that petitioner instituted the present petition for certiorari and
prohibition with preliminary injunction on October 6, 1975. Petitioner asserts that the afore-mentioned Orders
were issued by respondent Labor Arbiter without jurisdiction.
As prayed for, this Court, on October 6, 1975, issued a temporary restraining order and required
the respondents to file an answer within ten (10) days from notice.
On October 11, 1975, respondent Labor Arbiter De los Reyes and Sheriff Jose Cruz filed their
Comment by way of answer to the petition, explaining the legal justifications of their action on the premises.
Upon motion filed on October 11, 1975 by respondent union BTEA-KILUSAN for reconsideration
and to lift the temporary restraining order of October 6, 1975, this Court, on October 15, 1975, lifted said
restraining order and set the case for hearing on Monday, October 20, 1975 at 3:00 p.m.
At the hearing of this case on October 20, 1975, a Compromise Agreement was arrived at by the
parties wherein they agreed to submit to the Office of t he Secretary of Labor the determination of members of
the respondent union BTEA-KILUSAN who shall be reinstated or absorbed by the herein petitioner in the
transportation service inside the naval base, which determination shall be considered final. This Court
approved this agreement and enjoined "all the parties to strictly observe the terms thereof." This agreement is
deemed to have superseded the Resolution of the National Labor Relations Commission of October 31, 1973, as
affirmed by the Secretary of Labor on December 27, 1973.
Pursuant to this agreement which was embodied in the Resolution of this Court of October 24,
1975, Secretary of Labor Blas F. Ople issued an Order dated November 13, 1975, the pertinent portion of which
reads as follows:

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.
4. G.R. No. L-41518 June 30, 1976
GUERRERO'S
TRANSPORT
SERVICES,
INC.,
petitioner,
vs.
BLAYLOCK TRANSPORTATION SERVICES EMPLOYEES ASSOCIATION-KILUSAN (BTEAKILUSAN), LABOR ARBITER FRANCISCO M. DE LOS REYES and JOSE CRUZ, respondents.
On June 1, 1972, the United states Naval Base authorities at Subic, Zambales, conducted a public
bidding for a five-year contract for the right to operate and/or manage the transportation services inside the
naval base. This bidding was won by Santiago Guerrero, owner- operator of Guerrero's Transport Services,
Inc., herein petitioner, over Concepcion F. Blaylock, the then incumbent concessionaire doing business under
the name of "Blaylock Transport Services", whose 395 employees are members of respondent union BTEAKILUSAN. When petitioner, after the commencement of its operation on January 1, 1973, refused to employ
the members of the respondent union, the latter. On January, 12, 1975, filed a complaint 1 with the National
Labor Relations Commission 2 docketed as NLRC Case No. 214, against Guerrero's Transport Services, Inc.
and Santiago Guerrero, to compel them to employ its members pursuant to Article 1, Section 2 of the RP-US
Base Agreement dated May 27, 1968. 3 This case was dismissed by the National Labor Relations Commission
on March 13, 1973, upon petitioner's motion to dismiss on jurisdictional grounds, there being no employeremployee
relationship
between
the
parties. 4
Respondent union then appealed said Order on March 26,1973 to the Secretary of the Department
of Labor, who, instead of deciding the appeal, remanded the case for review to the NLRC which, subsequently,
summoned both parties to a series of conferences. Thereafter, or on October .11, 1973, the NLRC issue a
Resolution 5 ordering petitioner, among others, "to absorb all the complainants who filed their applications on
or before the deadline" set by petitioner "on 15 November 1972 except those who may have derogatory records
with the U.S. Naval Authorities in Subic, Zambales" and directing the Officer-in-charge of the provincial office
of the Department of Labor in Olongapo City to "oversee the preparation of the list of those qualified for
absorption in accordance with this resolution."
Petitioner appealed to Secretary of Labor Blas F. Ople who, in turn, rendered a Decision on
December 27, 1973, affirming said Resolution. 6 On January 22, 1974, Santiago A. Guerrero) appealed the
decision to the President of the Philippines, 7 but on July 9, 1974, the President, through Assistant Executive
Secretary Ronaldo B. Zamora, returned the case to the Secretary of Labor for appropriate action on the appeal,
it appearing, that the same does not involve national interest. 8

13

The issue submitted for resolution hinges on the credibility of the alleged applications. Considering
that the employees are economically dependent on their jobs, they have all the reasons and zealousness to
pursue their jobs within the legitimate framework of our laws. The applicant are no strangers to the pains and
difficulties of unemployment. Because of these factors we cannot ignore the affidavits of proof presented by the
employees concerned as against the declaration of the herein respondent. Firmly entrenched is the rule in this
jurisdiction that doubts arising from labor disputes must be construed and interpreted in favor of the workers.
RESPONSIVE TO THE FOREGOING, the National Labor Relations Commission through Arbiter
Francisco delos Reyes is hereby directed to implement the absorption of the 175 members of the Blaylock
Transport Employees Association (BTEA-KILUSAN) into the Guerrero Transport Services, subject to the
following terms and conditions:
1) that they were bona fide employees of the Blaybock Transportation Service at the time its concession
expired:
2) that the appellants shall pass final screening and approval by the appropriate authorities of the U.S. Base
concerned.
The applicants to be processed for absorption shall be those in the list of 46 submitted by OIC
Liberator (Carino on 2 August 1974, and the list of 129 determined by Arbiter de los Reyes as embodied in the
Writ of Execution issued on 25 September 1975.
The Regional Director of Regional Office No. II, San Fernando, Pampanga, shall make available to
the parties the facilities of that Office in the implementation of the aforesaid absorption process. 24
On November 24, 1975, in compliance with the aforesaid directive of the Secretary of Labor, Labor
Arbiter Francisco M. delos Reyes conducted a hearing to receive evidence as to who were the bona fide
employees of the former concessionaire at the "time of its concession expire". Thereafter, Labor Arbiter De los
Reyes issued an Order, dated November 25, 1975, listing in Annex "A" thereof, 174 employees who were bona
fide employees of the private respondent, and transmitting a copy of said Order to the Base Commander, U.S.
Naval Base, Olongapo City, with the request for the immediate screening and approval of their applications in
accordance with applicable rules of said command. The pertinent portion of said Order reads as follows:
As far as this Labor Arbiter is concerned, his only participation in this case refers to that portion of
the Secretary of Labor's Order directing him to implement "* * * the absorption of the 175 members of the
Blaylock Transport Employees Association (BTEA-KILUSAN) into the Guerrero Transport Services," subject
to certain terms and conditions. Hence, any question of "prematurity" as espoused by respondent's counsel
may
not
he
entertained
by
this
Labor
Arbiter.
Going now to the applicants who should be entitled to absorption, the Honorable Secretary of
Labor specified that the same should be composed of the 46 submitted by OIC Liberator Carino on 2 August
1974 and the 129 applicants determined by this Labor Arbiter. Of the latter, only 128 will be named. A perusal
of said list show that the name "Renato Carriaga" has been doubly listed. For convenience, these two listings
have now been consolidated and alphabetically arranged and as an integral part of this Order has been made
as Annex "A" (pp 1 to 6).
For purposes of implementation, the initial step to be undertaken is for the submission of the name
of the applicants to the U.S. Navy authorities concerned, which means the U. S. Naval Base at Olongapo City
for the screening and approval by the appropriate authorities.
Regarding the determination of whether the applicants are bona fide employees of the Blaylock
Transportation Service at the time its concession expired, the parties appear to be in agreement that the
records of this case will eventually show whether the applicants are such employees. Further, we feel that such
employment will likewise appear in the records of the U. S. Naval Base at Olongapo City since persons
connected with the Base like the applicants, have to undergo processing by naval authority.
WHEREFORE, in view of the foregoing considerations, copies of this Order together with Annex
"A" hereof are hereby transmitted to the Base Commander, U. S. Naval Base , Olongapo City with the request
for the immediate screening and approval of said applicants, in accordance with applicable rules of that
command. 25
Pursuant to Section 6 of Article I of the Philippine-U S. Labor Agreement of May 27, 1968, the
United States Armed Forces undertook, consistent with military requirements, "to provide security for
employment, and, in the event certain services are contracted out, the United States Armed Forces shall
require the contractor or concessioner to give priority consideration to affected employees for employment.
(Emphasis supplied.)
A treaty has two (2) aspects as an international agreement between states, and as municipal law
for the people of each state to observe. As part of the municipal law, the aforesaid provision of the treaty enters
into and forms part of the contract between petitioner and the U.S. Naval Base authorities. In view of said
stipulation, the new contractor is, therefore, bound to give "priority" to the employment of the qualified
employees of the previous contractor. It is obviously in recognition of such obligation that petitioner entered
into the afore-mentioned Compromise Agreement.
As above indicated, under the Compromise Agreement as embodied in the Resolution of this Court
dated October 24, 1975, the parties agreed to submit to the Secretary of Labor the determination as to who of
the members of the respondent union BTEA-KILUSAN shall be absorbed or employed by the herein petitioner
Guerrero's Transport Services, Inc., and that such determination shall be considered as final. In connection
therewith, the Secretary of Labor issued an Order dated November 13, 1975, directing the National Labor
Relations Commission, through Labor Arbiter Francisco de los Reyes, to implement the absorption of the 175

members 26 into the Guerrero's Transport Services, subject to the following conditions, viz.: (a) that they were
bona fide employees of the Blaylock Transport Service at the time its concession expired; and (b) that they
should pass final screening and approval by the appropriate authorities of the U.S. Naval Base concerned.
According to private respondent, however, Commander Vertplaetse of the U.S. Navy Exchange declined to
implement the order of the Labor Arbiter, as it is the petitioner who should request for the screening and
approval of the applicants.
Considering that the afore-mentioned Compromise-Agreement of the parties, as approved by this
Court, is more than a mere contract and has the force and effect of any other judgment, it is, therefore,
conclusive upon the [parties and their privies. 27 For it is settled that a compromise has, upon the parties, the
effect and authority of res judicata and is enforceable by execution upon approval by the court. 28 Since the
resolution of the NLRC of October 31, 1973 required the absorption of the applicants subject to the conditions
therein contained, and there being no showing that such conditions were complied with, the Labor Arbiter
exceeded his authority in awarding back wages to the 129 complainants.
ACCORDINGLY, judgment is hereby rendered ordering petitioner to employ members of
respondent labor union BTEA-KILUSAN referred to in the Order of the Secretary of Labor dated November 13,
1975 who satisfy the criteria enunciated viz.: (a) those who were bona fide employees of the Blaylock Transport
Services at the time its concession expired; and (b) those who pass the final screening and approval by the
appropriate authorities of the U.S. Naval Base. For this purpose, petitioner is hereby ordered to submit to and
secure from the appropriate authorities of the U.S. naval Base at Subic, Zambales the requisite screening and
approval, the names of the afore-mentioned members of respondent union.
The Order dated September 25, 1975 of respondent Labor Arbiter Francisco M. de los Reyes,
awarding back wages to the 129 complainants in the total amount of P592,110.00, is hereby set aside. No
pronouncement as to costs.
5. U.S. Supreme Court
Northern Pacific R. Co. v. Babcock, 154 U.S. 190 (1894)
No. 328
Submitted March 28, 1894
Decided May 28, 1894
154 U.S. 190
ERROR TO THE CIRCUIT COURT OF THE UNITED
STATES FOR THE DISTRICT OF MINNESOTA
Syllabus
In an action by the representatives of a railroad employee against the company to recover damages
for the death of the employs caused by an accident while in its employ, which is tried in a different state from
that in which the contract of employment was made and in which the accident took place, the right to recover
and the limit of the amount of the judgment are governed by the lex loci, and not by the lex fori.
A railroad company is bound to furnish sound machinery for the use of its employee, and if one of
them is killed in an accident caused by a defective snow-plough, the right of his representative to recover
damages therefor is not affected by the fact that, some two weeks before he was sent out with the defective
machinery, he had discovered the defect, and had notified the master mechanic of it, and the latter had
undertaken to have it repaired.
Some alleged errors in the charge of the court below are examined and held to have no merit.
The plaintiff below, who was the administrator of the estate of Hugh M. Munro, sued in the District
Court of the fourth Judicial District of Minnesota to recover $25,000 damages for the killing of Munro on the
10th day of January, 1888 at or near a station known as Gray Cliff, on the Northern Pacific Railway, in the
Territory of Montana. The complaint contained the following allegations:
Page 154 U. S. 191
"That on the said 10th day of January, 1888, the said Hugh M. Munro, now deceased, was in the
employ of the said defendant corporation within the Territory of Montana in the capacity of locomotive
engineer, for hire and reward by the said defendant paid, and that the duty of running a locomotive engine
upon said defendant's line of railway within said territory was by said defendant assigned to said Hugh M.
Munro on the said 10th day of January, 1888, and the defendant directed and ordered the said Hugh M.
Munro to run a certain locomotive engine, the property of said defendant, known as engine 'No. 161,' over and
upon its said railway in said territory; that prior to and at the time the said orders were so presented to said
Munro, there had been, and then was, a severe snowstorm in progress, and defendant's line of railway over
and upon which said Munro was so ordered to run said engine was covered with drifting snow theretofore
accumulated thereon, and then fast accumulating, notwithstanding which the said defendant corporation did
willfully, improperly, negligently, and carelessly refuse and neglect to send a snow plow ahead of said engine
No. 161 to clear the snow and ice from said defendant's said track, which had accumulated and was
accumulating thereon by reason of said storm, so as to render the passage of said engine No. 161 safe and
proper."
"That there was attached to the forward part of said engine No. 161 a certain attachment known as
a 'pilot plow,' an appliance constructed thereon for the purpose of clearing the railway of snow and ice
accumulated thereon and render safe the passage of the engine to which said plow was attached over and upon
said railway of defendant."

14

"That on the said 10th day of January, 1888, the said defendant corporation knowingly, willfully,
negligently, and carelessly allowed to be and remain upon said engine No. 161, attached thereto as aforesaid, a
certain pilot plow the iron braces, bolts, and rods of which were broken, imperfect, and insufficient, by reason
of which condition the said plow was loose and insufficiently secured to the pilot of said engine, allowing the
said pilot to raise up and ride over obstructing Page 154 U. S. 192 snow and ice instead of cutting through the
same, as was the intention of its construction, rendering the running of said engine upon said railway
dangerous, and that the said defendant well knew of the broken, defective, and dangerous condition of said
engine No. 161 at the time the said Hugh M. Munro was so ordered to run the same upon and over said
railway, notwithstanding which the said defendant corporation did negligently and carelessly furnish to said
Hugh M. Munro said engine, with the said broken and imperfect pilot plow attached thereto, to run over and
upon its said line of railway."
"That while said Hugh M. Munro was running said engine in performance of his duty as such
engineer and pursuant to the orders of said defendant corporation, and before daylight on said 10th day of
January, 1888, near Gray Cliff, in said Territory of Montana, the said engine struck an accumulation of snow
and ice which said defendant had carelessly and negligently allowed to accumulate upon its said railway track,
and the pilot plow of said engine, by reason of its broken, loose, and imperfect condition aforesaid, did ride
upon said accumulation of snow and ice, thereby derailing said engine and throwing the same from said
railway track, whereby the said Hugh M. Munro was instantly killed."
"* * * *"
"That the law of the Territory of Montana governing actions for recovery of damages for causing
death was on the 10th day of January, 1888, and now is, sections 13 and 14 of title 2 of said chapter 1 of the
first division of Code of Civil Procedure of the Territory of Montana, which said sections of said law of said
territory are in the words and figures following, viz.:"
"SEC. 13. A father, or, in case of his death or desertion of his family, the mother, may maintain an action for
the injury or death of a child, or a guardian for the injury or death of his ward."
"SEC. 14. Where the death of a person not being a minor is caused by the wrongful act or neglect of another,
his heirs or personal representatives may maintain an action for Page 154 U. S. 193 damages against the
person causing the death, or if such person be employed by another person who is responsible for his action,
then also against such other person. In every action under this and the preceding section, such damages may
be given as under all the circumstances of the case may be just."
The case was removed to the Circuit Court of the United States for the District of Minnesota, where
an answer was filed by the defendant denying the averments of the complaint and alleging that the death of
Munro was caused solely by his negligence and carelessness, and not by the negligence of the defendant or any
of its servants or employees.
There was a verdict and judgment below in favor of the plaintiff for $10,000. To review that
judgment, this writ of error is sued out. The errors assigned are as follows:
"First. The court erred in charging the jury as follows:"
" Did it fail to discharge any duty which the law imposed upon it for the safety of its employee, the plaintiff's
intestate? If it did, and if such negligence was the cause of the death of the engineer, Munro, then the plaintiff
is entitled to recover."
"Second. The court erred further in charging the jury as follows:"
" The charge in this complaint is that this death was caused by the derailment of the engine, which took place
because the plow was out of repair as described, or at least that the defendant had not used reasonable care in
clearing its track, and that when the engineer, in that condition, arrived at this cut, two miles from Gray Cliff,
the snow had accumulated to such an extent that the engine was thereby derailed, and that it was this
negligence which caused the death."
"Third. The court erred further in charging the jury as follows:"
"Many states have different laws. The law in this state until recently was that only $5,000 could be given in a
case of death. It has lately been increased to $10,000."
"Fourth. The court erred further in charging the jury as follows:"
"If you believe from all the evidence in the case that the plaintiff is entitled to recovery, then it is for you to
determine what compensation you will give for the death of the plaintiff's intestate. The law of Montana limits
it to such an amount as you think would be proper under all circumstances Page 154 U. S. 194 of the case, and
that is the law which will govern in this case."
"Fifth. The court erred further in refusing to give to the jury the following request tendered by defendant's
counsel: 'You, the jury, are instructed to find a verdict for the defendant.'"
"Sixth. The court erred further in refusing to give to the jury the following request, tendered by defendant's
counsel: 'The laws of Minnesota limit the amount of damages to be recovered in this case to five thousand
dollars.'"
"Seventh. The court erred further in refusing to give to the jury the following request, tendered by defendant's
counsel:"
" The court instructs the jury that unless they find that it was customary for defendant company to send a snow
plow in advance of the trains running east from Livingston during storms of this character, and that unless,
further, the accident occurred by reason of the negligent and careless failure of the defendant to send such
snow plow in advance, they will find for the defendant."

"Eighth. The court erred further in refusing to give to the jury the following request, tendered by defendant's
counsel:"
" The court instructs the jury that unless they find that the defendant carelessly and negligently furnished to
the deceased engineer a plow attached to his engine the iron bolts and rods of which were broken, imperfect,
and insufficient, and that by reason of which condition the said plow was loose and insufficiently secured to
the pilot of said engine, and that when the said engine struck the snow at the cut, as testified to, the pilot plow
of said engine, by reason of its said broken, loose, and imperfect condition, did ride upon the accumulated
snow and ice at said cut, and that thereby the said engine was thrown from the track, the jury will find for the
defendant. "
Page 154 U. S. 196
MR. JUSTICE WHITE, after stating the case, delivered the opinion of the Court.
For convenience, we shall consider the various assignments of error without regard to their numerical order.
The third, fourth, and sixth assignments involve the same question, and may be decided upon
together.
The plaintiff's intestate was an engineer in the employ of the defendant corporation in the Territory
of Montana, and the accident by which he lost his life occurred there. The law of the Territory of Montana at
the time provided as follows:
"Where the death of a person not being a minor is caused by the wrongful act or neglect of another
his heirs or personal representatives may maintain an action for damages against the person causing the
death, or if such person be employed by another person who is responsible for his action, then also Page 154 U.
S. 197 against such other person. In every action under this and the preceding section, such damages may be
given as under all the circumstances of the case may be just."
Section 14, Title II, Chapter I, first division of the Code of Civil Procedure of the Territory of Montana.
Under the law of Minnesota, when the death occurred, the limit of recovery in case of death was
$5,000, but at the time of the trial of the case in the court below, this limit had been increased to $10,000 by
amendment of the Minnesota statutes.
The question which those assignments of errors present is was the amount of damage to be
controlled by the law of the place of employment and where the accident occurred, or by the law of the forum
in which the suit was pending? In the case of Herrick v. Minneapolis & St. Louis Railway Company, reported
in 31 Minn. 11, which involved the question of whether the courts of Minnesota would enforce and apply to a
suit in that state, for a cause of action originating in Iowa, a law of the State of Iowa making railroad
corporations liable for damages sustained by its employees in consequence of the neglect of fellow servants,
the court said:
"The statute of another state has, of course, no extraterritorial force, but rights acquired under it
will always, in comity, be enforced if not against the public policy of the laws of the former. In such cases, the
law of the place where the right was acquired or the liability was incurred will govern as to the right of action,
while all that pertains merely to the remedy will be controlled by the law of the state where the action is
brought. And we think the principle is the same whether the right of action be ex contractu or ex delicto."
"The defendant admits the general rule to be as thus stated, but contends that as to statutory
actions like the present, it is subject to the qualification that to sustain the action, the law of the forum and the
law of the place where the right of action accrued must concur in holding that the act done gives a right of
action. We admit that some text writers -- notably, Rorer on Interstate Law -- seem to lay Page 154 U. S. 198
down this rule, but the authorities cited generally fail to sustain it."
"* * * *"
"But it by no means follows that because the statute of one state differs from the law of another
state, therefore it would be held contrary to the policy of the laws of the latter state. Every day our courts are
enforcing rights under foreign contracts where the lex loci contractus and the lex fori are altogether different,
and yet we construe these contracts and enforce rights under them according to their force and effect under
the laws of the state where made. To justify a court in refusing to enforce a right of action which accrued
under the law of another state because against the policy of our laws, it must appear that it is against good
morals or natural justice or that for some other such reason the enforcement of it would be prejudicial to the
general interests of our own citizens. If the State of Iowa sees fit to impose this obligation upon those operating
railroads within her bounds, and to make it a condition of the employment of those who enter their service, we
see nothing in such a law repugnant either to good morals or natural justice or prejudicial to the interests of
our own citizens."
This opinion of the Supreme Court of Minnesota is in accord with the rule announced by Chief
Justice Marshall in The Antelope, 10 Wheat. 66. In referring to that case in Pacific Railway v. Cox, 145 U. S.
593, the Court said:
"The courts of no country execute the penal laws of another. But we have held that that rule cannot
be invoked as applied to a statute of this kind, which merely authorizes a civil action to recover damages for a
civil injury."
The rule thus enunciated had been adopted in previous cases, and has since been approved by this
Court. Smith v. Condry, 1 How. 28; The China, 7 Wall. 53, 74 U. S. 64; Dennick v. Railroad Co., 103 U. S. 11;
The Scotland, 105 U. S. 24, 105 U. S. 29; Huntington v. Attrill, 146 U. S. 670. Indeed, in Railroad Co. v. Cox,
supra, MR. CHIEF JUSTICE FULLER, speaking for the Court, said "The question, however, is one of general
law, and we regard it as settled in Dennick v. Railroad Co."

15

Page 154 U. S. 199

The contract of employment was made in Montana, and the accident occurred in that state, while
the suit was brought in Minnesota. We think there was no error in holding that the right to recover was
governed by the lex loci, and not by the lex fori.
The fifth error assigned is the refusal to instruct the jury to find a verdict for the defendant.
The evidence tended to show that Munro was an engineer in the employ of the railroad company at
the Town of Livingston; that, as such engineer, he was driving engine No. 161 sometime in the latter part of
December; that while driving the engine, he discovered that an appliance known as the "pilot plow," which was
attached to the engine, was out of order and in a dangerous condition.
The purpose of such a plow
is to push the snow from the track, and if not properly braced, as stated by one of the witnesses, it is likely to
"rise up, and ride over the drift instead of going through it, and the natural result would be to throw the engine
trucks from the tracks." After Munro discovered that the plow was defective, he called the attention of the
foreman of the shop and master mechanic to its condition. On or about the second of January, Munro was
taken sick, and did not pursue his occupation until January 9th, when he reported for duty. At about 12 o'clock
that night, while a severe snowstorm was raging, Munro was sent for by messenger to take out a passenger
train. The train was delayed in getting away from Livingston, and left that place about two o'clock in the
morning, drawn by engine No. 161, with Munro in charge as engineer. At a place called Gray Cliff, the engine,
in passing through a cut, capsized and Munro was killed.
There was no conflict of evidence as to the fact that the plow was defective some two weeks before
the accident, when Munro so stated to the foreman and master mechanic, but there was a conflict upon the
question whether or not it had been subsequently repaired. Testimony was adduced by the plaintiff tending to
show that the necessary repairs had not been made, and that at midnight on the 9th, when the engineer was
called upon to take charge of the engine, the condition Page 154 U. S. 200 of the plow was quite as defective as
it had been some two weeks before, when the engineer had made his report of its condition to the foreman. On
the other hand, the defendant offered testimony which tended to show that the repairs had been made. It was
proven that at the time Munro was called upon to take charge of the engine on the night of the 9th, the
roundhouse was so full of steam that the engine could not have been critically examined by him. The presence
of this steam was due to the fact that there was no heating apparatus in the roundhouse, and therefore steam
was allowed to escape therein in order to prevent the engines from freezing. There was some evidence that the
effect of the defective pilot plow would be to throw the train from the track whenever the engine struck an
accumulation of snow which had been in any way impacted, the resistance of the snow having the effect of
pushing the defective plow up and thus derailing the engine. On the other hand, there was other evidence that
such a result could not have followed from the defect in the plow.
Under this condition of proof, it is clear that the instruction was rightfully refused. The obligation
of the employer to furnish to his employee sound implements is established. Hough v. Railway Co., 100 U. S.
213, 100 U. S. 218; Union Pacific Railway Co. v. Snyder, 152 U. S. 684. And the fact that the engineer, when
called upon at midnight on the 9th to perform duty, took the engine out under the conditions surrounding it in
the roundhouse implies no assumption by him of the risk of defective machinery. The proof showed, or tended
to show, that notification by the engineer to the foreman and master mechanic of the existence of the defect
was given some ten or twelve days before the accident, and that at the time there was an impression created in
Munro's mind that it was to be remedied. It also shows that work of this character was usually done in the
shops at Livingston, over which the foreman presided and in which the engine lay when the notice was given.
From the time of the notice up to the time when the engineer was called upon to use the engine, he was not on
duty, but was absent on sick leave. As the employee had Page 154 U. S. 201 given notice of the defect to the
proper officer whose duty it was to make the repairs, and the impression had been conveyed to him that these
would be made, he had a right to assume that they had been made, and to act upon that assumption. The mere
fact of his taking the engine out at midnight, under the circumstances, did not of itself, unsupported by other
proof, imply an assumption by him of the risk resulting from the dangerous and defective condition of the
attachment to the engine. Hough v. Railway Co., 100 U. S. 225.
The first assignment of error is, we think, without merit. The language of the charge complained of
is:
"Did it [the defendant company] fail to discharge any duty which the law imposed upon it for the
safety of its employee, the plaintiff's intestate? If it did, and if such negligence was the cause of the death of the
engineer, Munro, then the plaintiff is entitled to recover."
Separated from the context, this general language might have misled, but when considered in
proper connection with the rest of the instruction given, it could not have done so.
The eighth error assigned was to a refusal of the court to give the following charge:
"The court instructs the jury that unless they find that the defendant carelessly and negligently
furnished to the deceased engineer a plow attached to his engine the iron bolts and rods of which were broken,
imperfect, and insufficient, and that by reason of which condition, the said plow was loose and insufficiently
secured to the pilot of said engine, and that when the said engine struck the snow at the cut, as testified to, the
pilot plow of said engine, by reason of its said broken, loose, and imperfect condition did ride upon the
accumulated snow and ice at said cut, and that thereby the said engine was thrown from the track, the jury will
find for the defendant."
The charge which the court gave was substantially as requested, and correctly stated the law. It was
as follows:

"The court instructs you that unless you find that the defendant negligently and carelessly
furnished to the deceased engineer a plow attached to his engine, the iron bolts and rods of which were
broken, Page 154 U. S. 202 imperfect, and insufficient, and by reason of said imperfect condition, when the
engine struck the snow at the cut, as testified to, the engine and tender were derailed by reason thereof, which
caused the accident in question, then the defendant would be entitled to a verdict. The claim is that the snow
had accumulated to such an extent in that cut that when the engine struck it, the plow being in the condition in
which it was, it was unable to clear the track, the accumulation of snow being so great, and that, as described
by some witnesses, it rode up, and threw the engine off the track from the fact that the front trucks of the
engine could not ride over it. I instruct you that unless the cause of this derailment and the throwing over of
the engine was the imperfect condition of this plow -- that it could not clear the cut from the snow which had
accumulated there, but the engine was thrown over, and thereby death ensued -- unless this is found to be true
to the satisfaction of the jury, the defendant would be entitled to a verdict."
We can see no material variance between the charge requested and the charge which was given.
The seventh error assigned is to the refusal of the court to instruct the jury "that unless they find
that it was customary for defendant company to send a snow plow in advance of the trains running east from
Livingston during storms of this character, and that unless, further, the accident occurred by reason of the
negligent and careless failure of the defendant to send such snow plow in advance, they will find for the
defendant."
This instruction was, of course, justly refused because it implied that the defendant was entitled to
a verdict unless, contrary to its custom, it had not sent a snow plow in advance of the train, without reference
to the defective condition of the pilot plow, which was the cause of action upon which the plaintiff relied.
Indeed, although the complaint charged negligence on the part of the defendant in failing to send a snow plow
ahead of the train, the action, as stated in the complaint, was predicated upon the defect in the machinery, or
pilot plow, the failure to send the snow plow being alleged as a mere incident, or remote cause of damage. And
this distinction was elucidated Page 154 U. S. 203 with great clearness in the charge of the court. It nowhere
indicated that there could be any liability on the part of the defendant arising from the failure to send a snow
plow ahead of the train, as a distinct and substantive cause of action. It referred to the failure to send a snow
plow ahead of the train merely as the reason why it was necessary to have the pilot plow attached to the engine.
The court said:
"The charge in this complaint is that this death was caused by the derailment of the engine, which took place
because the plow was out of repair as described, or at least that the defendant had not used reasonable care in
clearing its tracks, and that when the engineer, with the engine in that condition, arrived at this cut, two miles
from Grey Cliff, the snow had accumulated to such an extent that the engine was thereby derailed, and that it
was this negligence on the part of the defendant that caused the death."
In other words, throughout the whole charge, the court instructed the jury that the liability, if any,
must result from the defective condition of the machinery or pilot plow of the engine, and where it referred to
the failure to send a snow plow ahead of the train as an act of negligence, treated it as negligence giving rise
only remotely, and not proximately, to the injury, the proximate cause being the defective machinery, and the
remote the accumulation of snow which rendered the use of the engine unsafe because of the defect in the pilot
plow attached thereto.
Judgment affirmed.
6. G.R. No. 128845
June 1, 2000
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner, vs. HON.
LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and Employment; HON.
CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and Employment;
DR. BRIAN MACCAULEY in his capacity as the Superintendent of International School-Manila;
and INTERNATIONAL SCHOOL, INC., respondents.
Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent
School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues
in other schools is, of course, beside the point. The point is that employees should be given equal pay for work
of equal value. That is a principle long honored in this jurisdiction. That is a principle that rests on
fundamental notions of justice. That is the principle we uphold today.
Private respondent International School, Inc. (the School, for short), pursuant to Presidential
Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic
personnel and other temporary residents.1 To enable the School to continue carrying out its educational
program and improve its standard of instruction, Section 2(c) of the same 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.
Accordingly, the 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 employs four tests to determine whether a
faculty member should be classified as a foreign-hire or a local hire:
a. What is one's domicile?
b. Where is one's home economy?

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c. To which country does one owe economic allegiance?

d. Was the individual hired abroad specifically to work in the School and was the School
responsible for bringing that individual to the Philippines?2
Should the answer to any of these queries point to the Philippines, the faculty member is classified
as a local hire; otherwise, he or she is deemed a foreign-hire.
The School grants foreign-hires certain benefits not accorded local-hires. These include housing,
transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate
twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant
economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited
tenure. The School explains:
A foreign-hire would necessarily have to uproot himself from his home country, leave his family
and friends, and take the risk of deviating from a promising career path all for the purpose of pursuing his
profession as an educator, but this time in a foreign land. The new foreign hire is faced with economic realities:
decent abode for oneself and/or for one's family, effective means of transportation, allowance for the
education of one's children, adequate insurance against illness and death, and of course the primary benefit of
a basic salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with the same economic reality
after his term: that he will eventually and inevitably return to his home country where he will have to confront
the uncertainty of obtaining suitable employment after along period in a foreign land.
The compensation scheme is simply the School's adaptive measure to remain competitive on an
international level in terms of attracting competent professionals in the field of international education.3
When negotiations for a new collective bargaining agreement were held on June 1995, petitioner
International School Alliance of Educators, "a legitimate labor union and the collective bargaining
representative of all faculty members"4 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.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation
and Mediation Board to bring the parties to a compromise prompted the Department of Labor and
Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary,
Crescenciano B. Trajano, issued an Order resolving the parity and representation issues in favor of the School.
Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for reconsideration in
an Order dated March 19, 1997. Petitioner now seeks relief in this Court.
Petitioner claims that the point-of-hire classification employed by the School is discriminatory to
Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in
all, with nationalities other than Filipino, who have been hired locally and classified as local hires.5 The Acting
Secretary of Labor found that these non-Filipino local-hires received the same benefits as the Filipino localhires.
The compensation package given to local-hires has been shown to apply to all, regardless of race.
Truth to tell, there are foreigners who have been hired locally and who are paid equally as Filipino local hires.6
The Acting secretary upheld the point-of-hire classification for the distinction in salary rates:
The Principle "equal pay for equal work" does not find applications in the present case. The
international character of the School requires the hiring of foreign personnel to deal with different
nationalities and different cultures, among the student population.
We also take cognizance of the existence of a system of salaries and benefits accorded to foreign
hired personnel which system is universally recognized. We agree that certain amenities have to be provided to
these people in order to entice them to render their services in the Philippines and in the process remain
competitive in the international market.
Furthermore, we took note of the fact that foreign hires have limited contract of employment
unlike the local hires who enjoy security of tenure. To apply parity therefore, in wages and other benefits
would also require parity in other terms and conditions of employment which include the employment which
include the employment contract.
A perusal of the parties' 1992-1995 CBA points us to the conditions and provisions for salary and
professional compensation wherein the parties agree as follows:
All members of the bargaining unit shall be compensated only in accordance with Appendix C
hereof provided that the Superintendent of the School has the discretion to recruit and hire expatriate teachers
from abroad, under terms and conditions that are consistent with accepted international practice.
Appendix C of said CBA further provides:
The new salary schedule is deemed at equity with the Overseas Recruited Staff (OSRS) salary
schedule. The 25% differential is reflective of the agreed value of system displacement and contracted status of
the OSRS as differentiated from the tenured status of Locally Recruited Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition of the difference in the status of
two types of employees, hence, the difference in their salaries.
The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an
established principle of constitutional law that the guarantee of equal protection of the laws is not violated by
legislation or private covenants based on reasonable classification. A classification is reasonable if it is based

on substantial distinctions and apply to all members of the same class. Verily, there is a substantial distinction
between foreign hires and local hires, the former enjoying only a limited tenure, having no amenities of their
own in the Philippines and have to be given a good compensation package in order to attract them to join the
teaching faculty of the School.7
We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our Constitution
and laws reflect the policy against these evils. The Constitution8 in the Article on Social Justice and Human
Rights exhorts Congress to "give highest priority to the enactment of measures that protect and enhance the
right of all people to human dignity, reduce social, economic, and political inequalities." The very broad Article
19 of the Civil Code requires every person, "in the exercise of his rights and in the performance of his duties,
[to] act with justice, give everyone his due, and observe honesty and good faith.
International law, which springs from general principles of law,9 likewise proscribes
discrimination. General principles of law include principles of equity, 1 0 i.e., the general principles of fairness
and justice, based on the test of what is reasonable. 11 The Universal Declaration of Human Rights, 12 the
International Covenant on Economic, Social, and Cultural Rights, 1 3 the International Convention on the
Elimination of All Forms of Racial Discrimination, 1 4 the Convention against Discrimination in Education, 15
the Convention (No. 111) Concerning Discrimination in Respect of Employment and Occupation 16 all
embody the general principle against discrimination, the very antithesis of fairness and justice. The
Philippines, through its Constitution, has incorporated this principle as part of its national laws.
In the workplace, where the relations between capital and labor are often skewed in favor of
capital, inequality and discrimination by the employer are all the more reprehensible.
The Constitution 17 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.
The Constitution 18 also directs the State to promote "equality of employment opportunities for all."
Similarly, the Labor Code 1 9 provides that the State shall "ensure equal work opportunities regardless of sex,
race or creed." It would be an affront to both the spirit and letter of these provisions if the State, in spite of its
primordial obligation to promote and ensure equal employment opportunities, closes its eyes to unequal and
discriminatory terms and conditions of employment. 20
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for
example, prohibits and penalizes 21 the payment of lesser compensation to a female employee as against a male
employee for work of equal value. 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.
Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7
thereof, provides:
The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just
and favourable conditions of work, which ensure, in particular:
a. Remuneration which provides all workers, as a minimum, with:
(i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in
particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay
for equal work;
The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal
truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should be paid similar salaries. 22 This rule applies to the School, its
"international character" notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires perform work equal
to that of foreign-hires. 23 The Court finds this argument a little cavalier. If an employer accords employees the
same position and rank, the presumption is that these employees perform equal work. This presumption is
borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive more. That would be adding insult to injury.
The employer has discriminated against that employee; it is for the employer to explain why the employee is
treated unfairly.
The employer in this case has failed to discharge this burden. There is no evidence here that
foreign-hires perform 25% more efficiently or effectively than the local-hires. Both groups have similar
functions and responsibilities, which they perform under similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the
distinction in salary rates without violating the principle of equal work for equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for services
performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the "[c]onsideration paid at
regular intervals for the rendering of services." In Songco v. National Labor Relations Commission, 24 we said
that:
"salary" means a recompense or consideration made to a person for his pains or industry in
another man's business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the
Roman soldier, it carries with it the fundamental idea of compensation for services rendered.

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While we recognize the need of the School to attract foreign-hires, salaries should not be used as an
enticement to the prejudice of local-hires. The local-hires perform the same services as foreign-hires and they
ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreignhires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor
and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them
which are not enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and home leave
travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote their welfare," 25
"to afford labor full protection." 26 The State, therefore, has the right and duty to regulate the relations between
labor and capital. 27 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. 28 Should such
contracts contain stipulations that are contrary to public policy, courts will not hesitate to strike down these
stipulations.
In this case, we find the point-of-hire classification employed by respondent School to justify the
distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no
reasonable distinction between the services rendered by foreign-hires and local-hires. The practice of the
School of according higher salaries to foreign-hires contravenes public policy and, certainly, does not deserve
the sympathy of this Court.
We agree, however, that 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." 29 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. 30 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. 31
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. These benefits, such as housing,
transportation, shipping costs, taxes, and home leave travel allowance, 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.

In the case just cited the court said:

While the literal construction of the section would require a certificate, as therein stated, from
every Chinese person, other than a laborer, who should come into the country, yet such a construction leads to
what we think an absurd result, for it requires a certificate for a wife of a merchant, among others, in regard to
whom its would be impossible to give the particulars which the statute requires shall be stated in such
certificate.
"Nothing is better settled," says the present Chief Justice, in Lau Ow Bew vs. United States (144 U.
S., 59) "than that statutes should receive a sensible construction, such as will effectuate the legislative
intention, and, if possible, so as to avoid and unjust or an absurd conclusion.
The purposes of the sixth section, requiring the certificate, was not to prevent the persons named
in the second article of the treaty from coming into the country, but to prevent Chinese laborers from entering
under the guise of being one of the classes permitted by the treaty. It is the coming of Chinese laborers that the
act is aimed against.
It was said in the opinion in the Lau Ow Bew case, in speaking of the provisions that the sole
evidence permissible should be the certificate: "This rule of evidence was evidently prescribed by the
amendment as a means of effectually preventing the violation or evasion of the prohibition against the coming
of Chinese laborers. It was designed as a safeguard to prevent the unlawful entry of such laborers, under the
pretense that they belong to the merchant class or to some other of the admitted classes."
It was also held in that case that although the literal wording of the statute of 1884, section six,
would require a certificate in the case of a merchant already domiciled in the United States and who had left
the country for temporary purposes, animo revertendi, yet its true and proper construction did not include his
case, and the general terms used in the act were limited to those persons to whom Congress manifestly
intended to apply them, which would be those who were about to come to the United States for the first time,
and not to those Chinese merchants already domiciled in the United States who had gone to China for
temporary purposes only, with the intention of returning. The case of Wan Shing vs. United States (140 U. S.,
24), was referred to, and attention called to the fact that the appellant therein was not a merchant but a
laborer, who had acquired no commercial domicile in this county, and was clearly within the exception
requiring him to procure and produce the certificate specified in the act. The rule was approved, and the
differences in the two cases pointed out by the Chief Justice.
To hold that a certificate is required in this case is to decide that the woman cannot come into this
country at all, for it is not possible for her to comply with the act, because she cannot in any event procure the
certificate even by returning to China. She must come in as the wife of her domiciled husband or not at all. The
act was never meant to accomplish the result of permanently excluding the wife under the circumstances of
this case, and we think that, properly and reasonably construed, it does not do so. If we hold that she is
entitled to come in as the wife, because the true construction of the treaty and the act permits it, there is no
provision which makes the certificate the only proof of the fact that she is such wife.
In the case of the minor children, the same result must follow as in that of the wife. All the reasons
which favor the construction of the statute as exempting the wife from the necessity of procuring a certificate
apply with equal force to the case of minor children of a member or members of the admitted classes. They
come in by reason of their relationship to the father, and whether they accompany or follow him, a certificate is
not necessary in either case. When the fact is established to the satisfaction of the authorities that the person
claiming to enter, either as wife or minor child, is in fact the wife or minor child of one of the members of the
class mentioned in the treaty as entitled to enter, them that person in entitled to admission without the
certificate.
We are not advised of any provision of Chinese law which differentiates the status of infant
children, born out of lawful wedlock, from that of similar children under the laws in force in the Philippine
Islands. We assume, therefore, that in China as well as in the Philippine Islands such children have the right to
look to their mother for their maintenance and education, and that she is entitled to their custody and control
in fulfilling the obligations towards them which are imposed upon her, not only by the natural impulses of love
and affection, but also by the express mandate of the law. And it having been held on the highest authority that
the general terms of the Act were limited to those to whom Congress manifestly intended to apply them as set
forth in the foregoing opinion, and that "nothing is better settled than that statutes should receive a sensible
construction, such as will effectuate the legislative intention, and, if possible, so as to avoid an unjust or an
absurd conclusion," we are of opinion that the Chinese Immigration Laws should not be construed so as to
exclude infant children of a Filipino mother, born out of lawful wedlock, seeking entrance to the Philippine
Islands for the purpose of taking up their residence with her in her native land.
It has been suggested that such a ruling opens the door to fraud and evasion, but we are not much
impressed with the force of this suggestion, knowing as we do that the immigration authorities have been
furnished by the law with peculiarly effective machinery for its enforcement, well calculated to defeat any
attempt to make an unauthorized or improper use of so manifestly reasonable an exception from the literal
construction and application of its general provisions.
Some confusion seems to have arisen in the court below as to the precise nature and effect of the
somewhat inartificial pleadings upon which these proceedings were submitted. The case appears to have been
submitted upon an answer to an order to show cause why a writ of habeas corpus should not issue upon the
petition filed on behalf of the infant children. In the form in which the answer is couched, there is much in the

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The Orders
of the Secretary of Labor and Employment dated June 10, 1996 and March 19, 1997, are hereby REVERSED
and SET ASIDE insofar as they uphold the practice of respondent School of according foreign-hires higher
salaries than local-hires.
SO ORDERED.
7. G.R. No. L-11759
March 16, 1917
CAYETANO LIM and MARCIANO LIM, petitioners-appellants, vs. THE INSULAR COLLECTOR OF
CUSTOMS, respondent-appellee.
The real question raised on this appeal is whether the Insular Collector of Customs may lawfully
deny entry into the Philippine Islands to two children aged 8 and 14 years, respectively, under and by authority
of the Chinese Immigration, Laws, it appearing that the children arrived at the Port of Manila accompanied by
and in the custody of their mother, a Filipino woman; that they were born in China, out of lawful wedlock; and
that their father was a Chinese person.
It is contended, on behalf of the Insular Collector of Customs, that these children being Chinese
persons are denied the right of entrance into the Philippine Islands under the express terms of the Chinese
immigration laws. On the other hand, it is urged on behalf of the children that they are entitled to enter,
regardless of the provisions of the Chinese immigration laws, since the admitted facts, as it is said, disclose
that they are citizens of the Philippine Islands; and for the further reason, that their mother, who is entitled to
their custody and charged with their maintenance and education, is clearly entitled to take up her residence in
the Philippine Islands and should not be required, to that end, to abandon her minor children.
Without discussing or deciding any of the contentions of the parties as to the rights of citizenship
of these children, actual or inchoate, we are of opinion that by analogous reasoning to that upon which the
Supreme Court of the United States held that the wives and minor children of Chinese merchants domiciled in
the United States may enter that country without certificates, these children must be held to be entitled to
enter the Philippine Islands with their mother, for the purpose of taking up their residence here with her, it
appearing that she is natural guardian, entitled to their custody and charged with their maintenance and
education. (U. S. vs. Gue Lim, 176 U. S. 459.)

18

contention of the appellee that the trial court should have treated the answer as in substance and effect a
demurrer to the petition, admitting the truth of the facts alleged therein, but praying judgment as to whether it
sets forth facts sufficient to constitute a cause of action and to justify the issuance of the writ. We are inclined
to think, however, that the understanding of the parties and of the court below was that the answer should be
treated rather as in the nature of a return to a writ of habeas corpus, accepting as true the allegations of the
petition but maintaining the legality of the detention upon the facts thus submitted. Without considering at
this time whether in habeas corpus proceedings the respondent may, without consent of court, demur to,
instead of answering an order to show cause why the writ should not issue, and without considering or
deciding the course which should be pursued where a respondent attempts to file a demurrer to a petition for a
writ of habeas corpus in lieu of the return prescribed by the statute to the writ when actually issued; we treat
the answer to the order to show cause in the case at bar as we think the parties and the court below understood
it should be treated, that is to say, as in substance and effect the return which the Insular Collector desired to
make to the writ of habeas corpus issued or assumed to have been issued in response to the petition on behalf
of the children held in custody by him.
We conclude, therefore, that, it appearing that the respondent Collector of Customs is detaining
the petitioners under an erroneous construction of the immigration laws, and it appearing from the facts
disclosed by the administrative proceedings that these children are entitled to admission into the Philippine
Islands, the order entered in the court below should be reversed, and in lieu thereof an order should be entered
directing the discharge of these children from the custody of the Insular Collector of Customs, with the costs in
both instances, de officio. So ordered.

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