G.R. No.

L-16749             January 31, 1963 my death and which may have come to me from any source
whatsoever, during her lifetime: ....
IN THE MATTER OF THE TESTATE ESTATE OF EDWARD
E. CHRISTENSEN, DECEASED. It is in accordance with the above-quoted provisions that the executor
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, in his final account and project of partition ratified the payment of
Heir of the deceased, Executor and Heir-appellees, only P3,600 to Helen Christensen Garcia and proposed that the
vs. residue of the estate be transferred to his daughter, Maria Lucy
HELEN CHRISTENSEN GARCIA, oppositor-appellant. Christensen.

M. R. Sotelo for executor and heir-appellees. Opposition to the approval of the project of partition was filed by
Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant. Helen Christensen Garcia, insofar as it deprives her (Helen) of her
legitime as an acknowledged natural child, she having been declared
LABRADOR, J.: by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the
deceased Edward E. Christensen. The legal grounds of opposition are
(a) that the distribution should be governed by the laws of the
This is an appeal from a decision of the Court of First Instance of Philippines, and (b) that said order of distribution is contrary thereto
Davao, Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding insofar as it denies to Helen Christensen, one of two acknowledged
No. 622 of said court, dated September 14, 1949, approving among natural children, one-half of the estate in full ownership. In
things the final accounts of the executor, directing the executor to amplification of the above grounds it was alleged that the law that
reimburse Maria Lucy Christensen the amount of P3,600 paid by her should govern the estate of the deceased Christensen should not be
to Helen Christensen Garcia as her legacy, and declaring Maria Lucy the internal law of California alone, but the entire law thereof because
Christensen entitled to the residue of the property to be enjoyed several foreign elements are involved, that the forum is the
during her lifetime, and in case of death without issue, one-half of Philippines and even if the case were decided in California, Section
said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in 946 of the California Civil Code, which requires that the domicile of
accordance with the provisions of the will of the testator Edward E. the decedent should apply, should be applicable. It was also alleged
Christensen. The will was executed in Manila on March 5, 1951 and that Maria Helen Christensen having been declared an acknowledged
contains the following provisions: natural child of the decedent, she is deemed for all purposes
legitimate from the time of her birth.
3. I declare ... that I have but ONE (1) child, named
MARIA LUCY CHRISTENSEN (now Mrs. Bernard The court below ruled that as Edward E. Christensen was a citizen of
Daney), who was born in the Philippines about twenty- the United States and of the State of California at the time of his
eight years ago, and who is now residing at No. 665 Rodger death, the successional rights and intrinsic validity of the provisions
Young Village, Los Angeles, California, U.S.A. in his will are to be governed by the law of California, in accordance
with which a testator has the right to dispose of his property in the
4. I further declare that I now have no living ascendants, way he desires, because the right of absolute dominion over his
and no descendants except my above named daughter, property is sacred and inviolable (In re McDaniel's Estate, 77 Cal.
MARIA LUCY CHRISTENSEN DANEY. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49
Pac. 192, cited in page 179, Record on Appeal). Oppositor Maria
xxx     xxx     xxx Helen Christensen, through counsel, filed various motions for
reconsideration, but these were denied. Hence, this appeal.

7. I give, devise and bequeath unto MARIA HELEN

CHRISTENSEN, now married to Eduardo Garcia, about The most important assignments of error are as follows:
eighteen years of age and who, notwithstanding the fact
that she was baptized Christensen, is not in any way related I
to me, nor has she been at any time adopted by me, and
who, from all information I have now resides in Egpit, THE LOWER COURT ERRED IN IGNORING THE DECISION
Digos, Davao, Philippines, the sum of THREE OF THE HONORABLE SUPREME COURT THAT HELEN IS
THOUSAND SIX HUNDRED PESOS (P3,600.00), THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E.
Philippine Currency the same to be deposited in trust for CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER
the said Maria Helen Christensen with the Davao Branch of OF HER JUST SHARE IN THE INHERITANCE.
the Philippine National Bank, and paid to her at the rate of
One Hundred Pesos (P100.00), Philippine Currency per
month until the principal thereof as well as any interest II
which may have accrued thereon, is exhausted..
THE LOWER COURT ERRED IN ENTIRELY IGNORING
xxx     xxx     xxx AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF
SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES
CALLING FOR THE APPLICATION OF INTERNAL LAW.
12. I hereby give, devise and bequeath, unto my well-
beloved daughter, the said MARIA LUCY
CHRISTENSEN DANEY (Mrs. Bernard Daney), now III
residing as aforesaid at No. 665 Rodger Young Village, Los
Angeles, California, U.S.A., all the income from the rest, THE LOWER COURT ERRED IN FAILING TO RECOGNIZE
remainder, and residue of my property and estate, real, THAT UNDER INTERNATIONAL LAW, PARTICULARLY
personal and/or mixed, of whatsoever kind or character, UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY
and wheresoever situated, of which I may be possessed at OF THE TESTAMENTARY DISPOSITION OF THE
1
DISTRIBUTION OF THE ESTATE OF THE DECEASED St. Luke's Hospital in the City of Manila on April 30, 1953.
EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY THE (pp. 2-3)
LAWS OF THE PHILIPPINES.
In arriving at the conclusion that the domicile of the deceased is the
IV Philippines, we are persuaded by the fact that he was born in New
York, migrated to California and resided there for nine years, and
THE LOWER COURT ERRED IN NOT DECLARING THAT THE since he came to the Philippines in 1913 he returned to California
SCHEDULE OF DISTRIBUTION SUBMITTED BY THE very rarely and only for short visits (perhaps to relatives), and
EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS. considering that he appears never to have owned or acquired a home
or properties in that state, which would indicate that he would
ultimately abandon the Philippines and make home in the State of
V California.

THE LOWER COURT ERRED IN NOT DECLARING THAT Sec. 16. Residence is a term used with many shades of
UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN meaning from mere temporary presence to the most
GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE permanent abode. Generally, however, it is used to denote
IN FULL OWNERSHIP. something more than mere physical presence. (Goodrich on
Conflict of Laws, p. 29)
There is no question that Edward E. Christensen was a citizen of the
United States and of the State of California at the time of his death. As to his citizenship, however, We find that the citizenship that he
But there is also no question that at the time of his death he was acquired in California when he resided in Sacramento, California
domiciled in the Philippines, as witness the following facts admitted from 1904 to 1913, was never lost by his stay in the Philippines, for
by the executor himself in appellee's brief: the latter was a territory of the United States (not a state) until 1946
and the deceased appears to have considered himself as a citizen of
In the proceedings for admission of the will to probate, the California by the fact that when he executed his will in 1951 he
facts of record show that the deceased Edward E. declared that he was a citizen of that State; so that he appears never to
Christensen was born on November 29, 1875 in New York have intended to abandon his California citizenship by acquiring
City, N.Y., U.S.A.; his first arrival in the Philippines, as an another. This conclusion is in accordance with the following principle
appointed school teacher, was on July 1, 1901, on board the expounded by Goodrich in his Conflict of Laws.
U.S. Army Transport "Sheridan" with Port of Embarkation
as the City of San Francisco, in the State of California, The terms "'residence" and "domicile" might well be taken
U.S.A. He stayed in the Philippines until 1904. to mean the same thing, a place of permanent abode. But
domicile, as has been shown, has acquired a technical
In December, 1904, Mr. Christensen returned to the United meaning. Thus one may be domiciled in a place where he
States and stayed there for the following nine years until has never been. And he may reside in a place where he has
1913, during which time he resided in, and was teaching no domicile. The man with two homes, between which he
school in Sacramento, California. divides his time, certainly resides in each one, while living
in it. But if he went on business which would require his
Mr. Christensen's next arrival in the Philippines was in July presence for several weeks or months, he might properly be
of the year 1913. However, in 1928, he again departed the said to have sufficient connection with the place to be
Philippines for the United States and came back here the called a resident. It is clear, however, that, if he treated his
following year, 1929. Some nine years later, in 1938, he settlement as continuing only for the particular business in
again returned to his own country, and came back to the hand, not giving up his former "home," he could not be a
Philippines the following year, 1939. domiciled New Yorker. Acquisition of a domicile of choice
requires the exercise of intention as well as physical
presence. "Residence simply requires bodily presence of an
Wherefore, the parties respectfully pray that the foregoing inhabitant in a given place, while domicile requires bodily
stipulation of facts be admitted and approved by this presence in that place and also an intention to make it one's
Honorable Court, without prejudice to the parties adducing domicile." Residence, however, is a term used with many
other evidence to prove their case not covered by this shades of meaning, from the merest temporary presence to
stipulation of facts. 1äwphï1.ñët the most permanent abode, and it is not safe to insist that
any one use et the only proper one. (Goodrich, p. 29)
Being an American citizen, Mr. Christensen was interned
by the Japanese Military Forces in the Philippines during The law that governs the validity of his testamentary dispositions is
World War II. Upon liberation, in April 1945, he left for defined in Article 16 of the Civil Code of the Philippines, which is as
the United States but returned to the Philippines in follows:
December, 1945. Appellees Collective Exhibits "6", CFI
Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-
Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p. 473, ART. 16. Real property as well as personal property is
t.s.n., July 21, 1953.) subject to the law of the country where it is situated.

In April, 1951, Edward E. Christensen returned once more However, intestate and testamentary successions, both with
to California shortly after the making of his last will and respect to the order of succession and to the amount of
testament (now in question herein) which he executed at his successional rights and to the intrinsic validity of
lawyers' offices in Manila on March 5, 1951. He died at the testamentary provisions, shall be regulated by the national
law of the person whose succession is under consideration,
2
whatever may be the nature of the property and regardless renvoi would have looked merely to the internal law of
of the country where said property may be found. Illinois, thus rejecting the renvoi or the reference back. Yet
there seems no compelling logical reason why the original
The application of this article in the case at bar requires the reference should be the internal law rather than to the
determination of the meaning of the term "national law" is used Conflict of Laws rule. It is true that such a solution avoids
therein. going on a merry-go-round, but those who have accepted
the renvoi theory avoid this inextricabilis circulas by
getting off at the second reference and at that point
There is no single American law governing the validity of applying internal law. Perhaps the opponents of
testamentary provisions in the United States, each state of the Union the renvoi are a bit more consistent for they look always to
having its own private law applicable to its citizens only and in force internal law as the rule of reference.
only within the state. The "national law" indicated in Article 16 of the
Civil Code above quoted can not, therefore, possibly mean or apply
to any general American law. So it can refer to no other than the Strangely enough, both the advocates for and the objectors
private law of the State of California. to the renvoi plead that greater uniformity will result from
adoption of their respective views. And still more strange is
the fact that the only way to achieve uniformity in this
The next question is: What is the law in California governing the choice-of-law problem is if in the dispute the two states
disposition of personal property? The decision of the court below, whose laws form the legal basis of the litigation disagree as
sustains the contention of the executor-appellee that under the to whether the renvoi should be accepted. If both reject, or
California Probate Code, a testator may dispose of his property by both accept the doctrine, the result of the litigation will vary
will in the form and manner he desires, citing the case of Estate of with the choice of the forum. In the case stated above, had
McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant the Michigan court rejected the renvoi, judgment would
invokes the provisions of Article 946 of the Civil Code of California, have been against the woman; if the suit had been brought
which is as follows: in the Illinois courts, and they too rejected the renvoi,
judgment would be for the woman. The same result would
If there is no law to the contrary, in the place where happen, though the courts would switch with respect to
personal property is situated, it is deemed to follow the which would hold liability, if both courts accepted
person of its owner, and is governed by the law of his the renvoi.
domicile.
The Restatement accepts the renvoi theory in two instances:
The existence of this provision is alleged in appellant's opposition where the title to land is in question, and where the validity
and is not denied. We have checked it in the California Civil Code of a decree of divorce is challenged. In these cases the
and it is there. Appellee, on the other hand, relies on the case cited in Conflict of Laws rule of the situs of the land, or the
the decision and testified to by a witness. (Only the case of Kaufman domicile of the parties in the divorce case, is applied by the
is correctly cited.) It is argued on executor's behalf that as the forum, but any further reference goes only to the internal
deceased Christensen was a citizen of the State of California, the law. Thus, a person's title to land, recognized by the situs,
internal law thereof, which is that given in the abovecited case, will be recognized by every court; and every divorce, valid
should govern the determination of the validity of the testamentary by the domicile of the parties, will be valid everywhere.
provisions of Christensen's will, such law being in force in the State (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)
of California of which Christensen was a citizen. Appellant, on the
other hand, insists that Article 946 should be applicable, and in X, a citizen of Massachusetts, dies intestate, domiciled in
accordance therewith and following the doctrine of the renvoi, the France, leaving movable property in Massachusetts,
question of the validity of the testamentary provision in question England, and France. The question arises as to how this
should be referred back to the law of the decedent's domicile, which property is to be distributed among X's next of kin.
is the Philippines.
Assume (1) that this question arises in a Massachusetts
The theory of doctrine of renvoi has been defined by various authors, court. There the rule of the conflict of laws as to intestate
thus: succession to movables calls for an application of the law
of the deceased's last domicile. Since by hypothesis X's last
The problem has been stated in this way: "When the domicile was France, the natural thing for the
Conflict of Laws rule of the forum refers a jural matter to a Massachusetts court to do would be to turn to French
foreign law for decision, is the reference to the purely statute of distributions, or whatever corresponds thereto in
internal rules of law of the foreign system; i.e., to the French law, and decree a distribution accordingly. An
totality of the foreign law minus its Conflict of Laws examination of French law, however, would show that if a
rules?" French court were called upon to determine how this
property should be distributed, it would refer the
On logic, the solution is not an easy one. The Michigan distribution to the national law of the deceased, thus
court chose to accept the renvoi, that is, applied the applying the Massachusetts statute of distributions. So on
Conflict of Laws rule of Illinois which referred the matter the surface of things the Massachusetts court has open to it
back to Michigan law. But once having determined the the alternative course of action: (a) either to apply the French
Conflict of Laws principle is the rule looked to, it is law is to intestate succession, or (b) to resolve itself into a
difficult to see why the reference back should not have French court and apply the Massachusetts statute of
been to Michigan Conflict of Laws. This would have distributions, on the assumption that this is what a French
resulted in the "endless chain of references" which has so court would do. If it accepts the so-called renvoi doctrine, it
often been criticized be legal writers. The opponents of the will follow the latter course, thus applying its own law.

3
This is one type of renvoi. A jural matter is presented (b) The decision of two or more foreign systems
which the conflict-of-laws rule of the forum refers to a of law, provided it be certain that one of them is
foreign law, the conflict-of-laws rule of which, in turn, necessarily competent, which agree in attributing
refers the matter back again to the law of the forum. This is the determination of a question to the same
renvoi in the narrower sense. The German term for this system of law.
judicial process is 'Ruckverweisung.'" (Harvard Law
Review, Vol. 31, pp. 523-571.) xxx     xxx     xxx

After a decision has been arrived at that a foreign law is to If, for example, the English law directs its judge to
be resorted to as governing a particular case, the further distribute the personal estate of an Englishman who has
question may arise: Are the rules as to the conflict of laws died domiciled in Belgium in accordance with the law of
contained in such foreign law also to be resorted to? This is his domicile, he must first inquire whether the law of
a question which, while it has been considered by the courts Belgium would distribute personal property upon death in
in but a few instances, has been the subject of frequent accordance with the law of domicile, and if he finds that the
discussion by textwriters and essayists; and the doctrine Belgian law would make the distribution in accordance
involved has been descriptively designated by them as the with the law of nationality — that is the English law — he
"Renvoyer" to send back, or the "Ruchversweisung", or the must accept this reference back to his own law.
"Weiterverweisung", since an affirmative answer to the
question postulated and the operation of the adoption of the
foreign law in toto would in many cases result in returning We note that Article 946 of the California Civil Code is its conflict of
the main controversy to be decided according to the law of laws rule, while the rule applied in In re Kaufman, Supra, its internal
the forum. ... (16 C.J.S. 872.) law. If the law on succession and the conflict of laws rules of
California are to be enforced jointly, each in its own intended and
appropriate sphere, the principle cited In re Kaufman should apply to
Another theory, known as the "doctrine of renvoi", has citizens living in the State, but Article 946 should apply to such of its
been advanced. The theory of the doctrine of renvoi is that citizens as are not domiciled in California but in other jurisdictions.
the court of the forum, in determining the question before The rule laid down of resorting to the law of the domicile in the
it, must take into account the whole law of the other determination of matters with foreign element involved is in accord
jurisdiction, but also its rules as to conflict of laws, and with the general principle of American law that the domiciliary law
then apply the law to the actual question which the rules of should govern in most matters or rights which follow the person of
the other jurisdiction prescribe. This may be the law of the the owner.
forum. The doctrine of the renvoi has generally been
repudiated by the American authorities. (2 Am. Jur. 296)
When a man dies leaving personal property in one or more
states, and leaves a will directing the manner of distribution
The scope of the theory of renvoi has also been defined and the of the property, the law of the state where he was domiciled
reasons for its application in a country explained by Prof. Lorenzen in at the time of his death will be looked to in deciding legal
an article in the Yale Law Journal, Vol. 27, 1917-1918, pp. 529-531. questions about the will, almost as completely as the law of
The pertinent parts of the article are quoted herein below: situs is consulted in questions about the devise of land. It is
logical that, since the domiciliary rules control devolution
The recognition of the renvoi theory implies that the rules of the personal estate in case of intestate succession, the
of the conflict of laws are to be understood as incorporating same rules should determine the validity of an attempted
not only the ordinary or internal law of the foreign state or testamentary dispostion of the property. Here, also, it is not
country, but its rules of the conflict of laws as well. that the domiciliary has effect beyond the borders of the
According to this theory 'the law of a country' means the domiciliary state. The rules of the domicile are recognized
whole of its law. as controlling by the Conflict of Laws rules at the situs
property, and the reason for the recognition as in the case of
xxx     xxx     xxx intestate succession, is the general convenience of the
doctrine. The New York court has said on the point: 'The
general principle that a dispostiton of a personal property,
Von Bar presented his views at the meeting of the Institute valid at the domicile of the owner, is valid anywhere, is one
of International Law, at Neuchatel, in 1900, in the form of of the universal application. It had its origin in that
the following theses: international comity which was one of the first fruits of
civilization, and it this age, when business intercourse and
(1) Every court shall observe the law of its country as the process of accumulating property take but little notice
regards the application of foreign laws. of boundary lines, the practical wisdom and justice of the
rule is more apparent than ever. (Goodrich, Conflict of
(2) Provided that no express provision to the contrary Laws, Sec. 164, pp. 442-443.)
exists, the court shall respect:
Appellees argue that what Article 16 of the Civil Code of the
(a) The provisions of a foreign law which Philippines pointed out as the national law is the internal law of
disclaims the right to bind its nationals abroad as California. But as above explained the laws of California have
regards their personal statute, and desires that prescribed two sets of laws for its citizens, one for residents therein
said personal statute shall be determined by the and another for those domiciled in other jurisdictions. Reason
law of the domicile, or even by the law of the demands that We should enforce the California internal law
place where the act in question occurred. prescribed for its citizens residing therein, and enforce the conflict of
laws rules for the citizens domiciled abroad. If we must enforce the

4
law of California as in comity we are bound to go, as so declared in vs.
Article 16 of our Civil Code, then we must enforce the law of EDWARD A. BELLIS, ET AL., heirs-appellees.
California in accordance with the express mandate thereof and as
above explained, i.e., apply the internal law for residents therein, and Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
its conflict-of-laws rule for those domiciled abroad. Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A.
Bellis, et al.
It is argued on appellees' behalf that the clause "if there is no law to Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
the contrary in the place where the property is situated" in Sec. 946 of J. R. Balonkita for appellee People's Bank & Trust Company.
the California Civil Code refers to Article 16 of the Civil Code of the Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
Philippines and that the law to the contrary in the Philippines is the
provision in said Article 16 that the national law of the deceased BENGZON, J.P., J.:
should govern. This contention can not be sustained. As explained in
the various authorities cited above the national law mentioned in
Article 16 of our Civil Code is the law on conflict of laws in the This is a direct appeal to Us, upon a question purely of law, from an
California Civil Code, i.e., Article 946, which authorizes the order of the Court of First Instance of Manila dated April 30, 1964,
reference or return of the question to the law of the testator's approving the project of partition filed by the executor in Civil Case
domicile. The conflict of laws rule in California, Article 946, Civil No. 37089 therein.1äwphï1.ñët
Code, precisely refers back the case, when a decedent is not
domiciled in California, to the law of his domicile, the Philippines in The facts of the case are as follows:
the case at bar. The court of the domicile can not and should not refer
the case back to California; such action would leave the issue Amos G. Bellis, born in Texas, was "a citizen of the State of Texas
incapable of determination because the case will then be like a and of the United States." By his first wife, Mary E. Mallen, whom
football, tossed back and forth between the two states, between the he divorced, he had five legitimate children: Edward A. Bellis,
country of which the decedent was a citizen and the country of his George Bellis (who pre-deceased him in infancy), Henry A. Bellis,
domicile. The Philippine court must apply its own law as directed in Alexander Bellis and Anna Bellis Allsman; by his second wife,
the conflict of laws rule of the state of the decedent, if the question Violet Kennedy, who survived him, he had three legitimate children:
has to be decided, especially as the application of the internal law of Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he
California provides no legitime for children while the Philippine law, had three illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis
Arts. 887(4) and 894, Civil Code of the Philippines, makes natural and Miriam Palma Bellis.
children legally acknowledged forced heirs of the parent recognizing
them.
On August 5, 1952, Amos G. Bellis executed a will in the
Philippines, in which he directed that after all taxes, obligations, and
The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. expenses of administration are paid for, his distributable estate should
Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock be divided, in trust, in the following order and manner: (a)
Templeton vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. $240,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his
Government, 59 Phil. 293.) cited by appellees to support the decision three illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis,
can not possibly apply in the case at bar, for two important reasons, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing
i.e., the subject in each case does not appear to be a citizen of a state two items have been satisfied, the remainder shall go to his seven
in the United States but with domicile in the Philippines, and it does surviving children by his first and second wives, namely: Edward A.
not appear in each case that there exists in the state of which the Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman,
subject is a citizen, a law similar to or identical with Art. 946 of the Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal
California Civil Code. shares.1äwphï1.ñët

We therefore find that as the domicile of the deceased Christensen, a Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of
citizen of California, is the Philippines, the validity of the provisions San Antonio, Texas, U.S.A. His will was admitted to probate in the
of his will depriving his acknowledged natural child, the appellant, Court of First Instance of Manila on September 15, 1958.
should be governed by the Philippine Law, the domicile, pursuant to
Art. 946 of the Civil Code of California, not by the internal law of
California.. The People's Bank and Trust Company, as executor of the will, paid
all the bequests therein including the amount of $240,000.00 in the
form of shares of stock to Mary E. Mallen and to the three (3)
WHEREFORE, the decision appealed from is hereby reversed and illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and
the case returned to the lower court with instructions that the partition Miriam Palma Bellis, various amounts totalling P40,000.00 each in
be made as the Philippine law on succession provides. Judgment satisfaction of their respective legacies, or a total of P120,000.00,
reversed, with costs against appellees. which it released from time to time according as the lower court
approved and allowed the various motions or petitions filed by the
latter three requesting partial advances on account of their respective
legacies.
G.R. No. L-23678             June 6, 1967
On January 8, 1964, preparatory to closing its administration, the
executor submitted and filed its "Executor's Final Account, Report of
TESTATE ESTATE OF AMOS G. BELLIS, deceased. Administration and Project of Partition" wherein it reported, inter
PEOPLE'S BANK and TRUST COMPANY, executor. alia, the satisfaction of the legacy of Mary E. Mallen by the delivery
MARIA CRISTINA BELLIS and MIRIAM PALMA to her of shares of stock amounting to $240,000.00, and the legacies
BELLIS, oppositors-appellants, of Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in
the amount of P40,000.00 each or a total of P120,000.00. In the
5
project of partition, the executor — pursuant to the "Twelfth" clause ART. 1039. Capacity to succeed is governed by the law of
of the testator's Last Will and Testament — divided the residuary the nation of the decedent.
estate into seven equal portions for the benefit of the testator's seven
legitimate children by his first and second marriages. Appellants would however counter that Art. 17, paragraph three, of
the Civil Code, stating that —
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis
filed their respective oppositions to the project of partition on the Prohibitive laws concerning persons, their acts or property,
ground that they were deprived of their legitimes as illegitimate and those which have for their object public order, public
children and, therefore, compulsory heirs of the deceased. policy and good customs shall not be rendered ineffective
by laws or judgments promulgated, or by determinations or
Amos Bellis, Jr. interposed no opposition despite notice to him, proof conventions agreed upon in a foreign country.
of service of which is evidenced by the registry receipt submitted on
April 27, 1964 by the executor.1 prevails as the exception to Art. 16, par. 2 of the Civil Code afore-
quoted. This is not correct. Precisely, Congress deleted the phrase,
After the parties filed their respective memoranda and other pertinent "notwithstanding the provisions of this and the next preceding article"
pleadings, the lower court, on April 30, 1964, issued an order when they incorporated Art. 11 of the old Civil Code as Art. 17 of the
overruling the oppositions and approving the executor's final account, new Civil Code, while reproducing without substantial change the
report and administration and project of partition. Relying upon Art. second paragraph of Art. 10 of the old Civil Code as Art. 16 in the
16 of the Civil Code, it applied the national law of the decedent, new. It must have been their purpose to make the second paragraph of
which in this case is Texas law, which did not provide for legitimes. Art. 16 a specific provision in itself which must be applied in testate
and intestate succession. As further indication of this legislative
Their respective motions for reconsideration having been denied by intent, Congress added a new provision, under Art. 1039, which
the lower court on June 11, 1964, oppositors-appellants appealed to decrees that capacity to succeed is to be governed by the national law
this Court to raise the issue of which law must apply — Texas law or of the decedent.
Philippine law.
It is therefore evident that whatever public policy or good customs
In this regard, the parties do not submit the case on, nor even discuss, may be involved in our System of legitimes, Congress has not
the doctrine of renvoi, applied by this Court in Aznar v. Christensen intended to extend the same to the succession of foreign nationals.
Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent For it has specifically chosen to leave, inter alia, the amount of
where the decedent is a national of one country, and a domicile of successional rights, to the decedent's national law. Specific provisions
another. In the present case, it is not disputed that the decedent was must prevail over general ones.
both a national of Texas and a domicile thereof at the time of his
death.2 So that even assuming Texas has a conflict of law rule Appellants would also point out that the decedent executed two wills
providing that the domiciliary system (law of the domicile) should — one to govern his Texas estate and the other his Philippine estate
govern, the same would not result in a reference back (renvoi) to — arguing from this that he intended Philippine law to govern his
Philippine law, but would still refer to Texas law. Nonetheless, if Philippine estate. Assuming that such was the decedent's intention in
Texas has a conflicts rule adopting the situs theory (lex rei sitae) executing a separate Philippine will, it would not alter the law, for as
calling for the application of the law of the place where the properties this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in
are situated, renvoi would arise, since the properties here involved are a foreigner's will to the effect that his properties shall be distributed
found in the Philippines. In the absence, however, of proof as to the in accordance with Philippine law and not with his national law, is
conflict of law rule of Texas, it should not be presumed different illegal and void, for his national law cannot be ignored in regard to
from ours.3 Appellants' position is therefore not rested on the doctrine those matters that Article 10 — now Article 16 — of the Civil Code
of renvoi. As stated, they never invoked nor even mentioned it in states said national law should govern.
their arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in The parties admit that the decedent, Amos G. Bellis, was a citizen of
relation to Article 16 of the Civil Code. the State of Texas, U.S.A., and that under the laws of Texas, there are
no forced heirs or legitimes. Accordingly, since the intrinsic validity
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable of the provision of the will and the amount of successional rights are
the national law of the decedent, in intestate or testamentary to be determined under Texas law, the Philippine law on legitimes
successions, with regard to four items: (a) the order of succession; (b) cannot be applied to the testacy of Amos G. Bellis.
the amount of successional rights; (e) the intrinsic validity of the
provisions of the will; and (d) the capacity to succeed. They provide Wherefore, the order of the probate court is hereby affirmed in toto,
that — with costs against appellants. So ordered.

ART. 16. Real property as well as personal property is

subject to the law of the country where it is situated.
[G.R. No. 104776. December 5, 1994.]
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of BIENVENIDO M. CADALIN, ROLANDO M. AMUL,
successional rights and to the intrinsic validity of DONATO B. EVANGELISTA, and the rest of 1, 767 NAMED-
testamentary provisions, shall be regulated by the national COMPLAINANTS, thru and by their Attorney-in-fact, Atty.
law of the person whose succession is under consideration, GERARDO A. DEL MUNDO, Petitioners, v. PHILIPPINE
whatever may he the nature of the property and regardless OVERSEAS EMPLOYMENT ADMINISTRATION’S
of the country wherein said property may be found. ADMINISTRATOR, NATIONAL LABOR RELATIONS
6
COMMISSION, BROWN & ROOT INTERNATIONAL, INC. NUMERIANO SAN MATEO, FELIZARDO DE LOS SANTOS,
AND/OR ASIA INTERNATIONAL BUILDERS JR., GABRIEL SANTOS, JUANITO SANTOS, PAQUITO
CORPORATION, Respondents. SOLANTE, CONRADO A. SOLIS, JR., RODOLFO SULTAN,
ISAIAS TALACTAC, WILLIAM TARUC, MENANDRO
[G.R. Nos. 104911-14. December 5, 1994.] TEMPROSA, BIENVENIDO S. TOLENTINO, BENEDICTO
TORRES, MAXIMIANO TORRES, FRANCISCO G. TRIAS,
BIENVENIDO M. CADALIN, ET AL., Petitioners, v. HON. SERGIO A. URSOLINO, ROGELIO VALDEZ, LEGORIO E.
NATIONAL LABOR RELATIONS COMMISSION, BROWN & VERGARA, DELFIN VICTORIA, GILBERT VICTORIA,
ROOT INTERNATIONAL, INC. and/or ASIA HERNANE VICTORIANO, FRANCISCO VILLAFLORES,
INTERNATIONAL BUILDERS CORPORATION, Respondents. DOMINGO VILLAHERMOSA, ROLANDO VILLALOBOS,
ANTONIO VILLAUZ, DANILO VILLANUEVA, ROGELIO
[G.R. Nos. 105029-32. December 5, 1994.] VILLANUEVA, ANGEL VILLARBA, JUANITO VILLARINO,
FRANCISCO ZARA, ROGELIO AALAGOS, NICANOR B.
ASIA INTERNATIONAL BUILDER CORPORATION and ABAD, ANDRES ABANES, REYNALDO ABANES, EDUARDO
BROWN & ROOT INTERNATIONAL, INC., Petitioners, v. ABANTE, JOSE ABARRO, JOSEFINO ABARRO, CELSO S.
NATIONAL LABOR RELATIONS COMMISSION, ABELANIO, HERMINIO ABELLA, MIGUEL ABESTANO,
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, RODRIGO G. ABUBO, JOSE B. ABUSTAN, DANTE ACERES,
DONATO B. EVANGELISTA, ROMEO PATAG, RIZALINO REYNALDO S. ACOJIDO, LEOWILIN ACTA, EUGENIO C.
REYES, IGNACIO DE VERA, SOLOMON B. REYES, JOSE M. ACUEZA, EDUARDO ACUPAN, REYNALDO ACUPAN,
ABAN, EMIGDIO N. ABARQUEZ, ANTONIO ACUPAN, SOLANO ACUPAN, MANUEL P. ADANA, FLORENTINO R.
ROMEO ACUPAN, BENJAMIN ALEJANDRE, WILFREDO D. AGNE, QUITERIO R. AGUDO, MANUEL P. AGUINALDO,
ALIGADO, MARTIN AMISTAD, JR., ROLANDO B. AMUL, DANTE AGUIRRE, HERMINIO AGUIRRE, GONZALO
AMORSOLO ANADING, ANTONIO T. ANGLO, VICENTE ALBERTO, JR., CONRADO ALCANTARA, LAMBERTO Q.
ARLITA, HERBERT AYO, SILVERIO BALATAZO, ALCANTARA, MARIANITO J. ALCANTARA, BENCIO
ALFREDO BALOBO, FALCONERO BANAAG, RAMON ALDOVER, EULALIO V. ALEJANDRO, BENJAMIN
BARBOSA, FELIX BARCENA, FERNANDO BAS, MARIO ALEJANDRO, EDUARDO L. ALEJANDRO, MAXIMINO
BATACLAN, ROBERTO S. BATICA, ENRICO BELEN, ALEJANDRO, ALBERTO ALMENAR, ARNALDO ALONZO,
ARISTEO BICOL, LARRY C. BICOL, PETRONILLO AMADO ALORIA, CAMILO ALVAREZ, MANUEL C.
BISCOCHO, FELIX M. BOBIER, DIONISIO BOBONGO, ALVAREZ, BENJAMIN R. AMBROCIO, CARLOS AMORES,
BAYANI S. BRACAMANTE, PABLITO BUSTILLO, BERNARD P. ANCHETA, TIMOTEO O. ANCHETA,
GUILLERMO CABEZAS, BIENVENIDO CADALIN, JEOFREY ANI, ELINO P. ANTILLON, ARMANDRO B.
RODOLFO CAGATAN, AMANTE CAILAO, IRENEO ANTIPONO, LARRY T. ANTONIO, ANTONIO APILADO,
CANDOR, JOSE CASTILLO, MANUEL CASTILLO, REMAR ARTURO P. APILADO, FRANCISCO APOLINARIO,
CASTROJERES, REYNALDO CAYAS, ROMEO CECILIO, BARTOLOME M. AQUINO, ISIDRO AQUINO, PASTOR
TEODULO CREUS, BAYANI DAYRIT, RICARDO DAYRIT, AQUINO, ROSENDO M. AQUINO, ROBERTO ARANGORIN,
ERNESTO T. DELA CRUZ, FRANCISCO DE GUZMAN, BENJAMIN O. ARATEA, ARTURO V. ARAULLO,
ONOFRE DE RAMA, IGNACIO DE VERA, MODESTO PRUDENCIO ARAULLO, ALEXANDER ARCAIRA,
DIZON, REYNALDO DIZON, ANTONIO S. DOMINGUEZ, FRANCISCO ARCIAGA, JOSE AREVALO, JUANITO
GILBERT EBRADA, RICARDO EBRADA, ANTONIO AREVALO, RAMON AREVALO, RODOLFO AREVALO,
EJERCITO, JR., EDUARTE ERIDAO, ELADIO ESCOTOTO, EULALIO ARGUELLES, WILFREDO P. ARICA, JOSE M.
JOHN ESGUERRA, EDUARDO ESPIRITU, ERNESTO ADESILLO, ANTONIO ASUNCION, ARTEMIO M.
ESPIRITU, RODOLFO ESPIRITU, NESTOR M. ESTEVA, ASUNCION, EDGARDO ASUNCION, REXY M. ASUNCION,
BENJAMIN ESTRADA, VALERIO EVANGELISTA, VICENTE AURELIO, ANGEL AUSTRIA, RICARDO P.
OLIGARIO FRANCISCO, JESUS GABAWAN, ROLANDO AVERILLA, JR., VIRGILIO AVILA, BARTOLOME AXALAN,
GARCIA, ANGEL GUDA, PACITO HERNANDEZ, ANTONIO ALFREDO BABILONIA, FELIMON BACAL, JOSE L.
HILARIO, HENRY L. JACOB, HONESTO JARDINIANO, BACANI, ROMULO R. BALBIERAN, VICENTE BALBIERAN,
ANTONIO JOCSON, GERARDO LACSAMANA, EFREN U. RODOLFO BALITBIT, TEODORO Y. BALOBO, DANILO O.
LIRIO LORETO LONTOC, ISRAEL LORENZO, BARBA, BERNARDO BARRO, JUAN A. BASILAN,
ALEJANDRO LORINO, JOSE MABALAY, HERMIE CEFERINO BATITIS, VIVENCIO C. BAUAN, GAUDENCIO S.
MARANAN, LEOVIGILDO MARCIAL, NOEL MARTINEZ, BAUTISTA, LEONARDO BAUTISTA, JOSE BAUTISTA,
DANTE MATREO, LUCIANO MELENDEZ, RENATO MELO, ROSTICO BAUTISTA, RUPERTO B. BAUTISTA, TEODORO
FRANCIS MEDIODA, JOSE C. MILANES, RAYMUNDO C. S. BAUTISTA, VIRGILIO BAUTISTA, JESUS R. BAYA,
MILAY, CRESENCIANO MIRANDA, ILDEFONSO C. WINIEFREDO BAYACAL, WINIEFREDO BEBIT, BEN G.
MOLINA, ARMANDO B. MONDEJAR RESURRECCION D. BELIR, ERIC B. BELTRAN, EMELIANO BENALES, JR.,
NAZARENO, JUAN OLINDO, FRANCISCO R. OLIVARES, RAUL BENITEZ, PERFECTO BENSAN, IRENEO
PEDRO ORBISTA, JR., RICARDO ORDOÑEZ, ERNIE BERGONIO, ISABELO BERMUDEZ, ROLANDO I.
PANCHO, JOSE PANCHO , GORGONIO P. PARALA, BERMUDEZ, DANILO BERON, BENJAMIN BERSAMIN,
MODESTO PINPIN, JUANITO PAREA, ROMEO I. PATAG, ANGELITO BICOL, ANSELMO BICOL, CELESTINO BICOL,
FRANCISCO PINPIN, LEONARDO POBLETE, JAIME JR., FRANCISCO BICOL, ROGELIO BICOL, ROMULO L.
POLLOS DOMINGO PONDALIS, EUGENIO RAMIREZ, BICOL, ROGELIO BILLIONES, TEOFILO N. BITO,
LUCIEN M. RESPALL, GAUDENCIO RETANAN, JR., FERNANDO BLANCO, AUGUSTO BONDOC, DOMINGO
TOMAS B. RETENER, ALVIN C. REYES, RIZALINO REYES, BONDOC, PEPE S. BOOC, JAMES R. BORJA, WILFREDO
SOLOMON B. REYES, VIRGILIO G. RICAZA, RODELIO BRACEROS, ANGELES C. BRECINO, EURECLYDON G.
RIETA , JR., BENITO RIVERA, JR., BERNARDO J. BRIONES, AMADO BRUGE, PABLITO BUDILLO,
ROBILLOS, PABLO A. ROBLES, JOSE ROBLEZA, QUIRINO ARCHIMEDES BUENAVENTURA, BASILIO
RONQUILLO, AVELINO M. ROQUE, MENANDRO L. BUENAVENTURA, GUILLERMO BUENCONSEJO,
SABINO, PEDRO SALGATAR, EDGARDO SALONGA, ALEXANDER BUSTAMANTE, VIRGILIO BUTIONG, JR.,
7
HONESTO P. CABALLA, DELFIN CABALLERO, ROBERTO S. GARCIA, OSIAS G. GAROFIL, RAYMUNDO C.
BENEDICTO CABANIGAN, MOISES CABATAY, GARON, ROLANDO G. GATELA, AVELINO GAYETA,
HERMANELI CABRERA, PEDRO CAGATAN, JOVEN C. RAYMUNDO GERON, PLACIDO GONZALES, RUPERTO H.
CAGAYAT, ROGELIO L. CALAGOS, REYNALDO V. GONZALES, ROGELIO D. GUANIO, MARTIN V.
CALDERON, OSCAR C. CALDERON, NESTOR D. CALLEJA, GUERRERO, JR., ALEXIS GUNO, RICARDO L. GUNO,
RENATO R. CALMA, NELSON T. CAMACHO, SANTOS T. FRANCISCO GUPIT, DENNIS J. GUTIERREZ, IGNACIO B.
CAMACHO, ROBERTO CAMANA, FLORANTE C. GUTIERREZ, ANGELITO DE GUZMAN, JR., CESAR H.
CAMANAG EDGARDO M. CANDA, SEVERINO CANTOS, HABANA, RAUL G. HERNANDEZ, REYNALDO
EPIFANIO A. CAPONPON, ELIAS, D. CARILLO, JR., HERNANDEZ, JOVENIANO D. HILADO, JUSTO HILAPO,
ARMANDO CARREON, MENANDRO M. CASTAÑEDA, ROSTITO HINAHON, FELICISIMO HINGADA, EDUARDO
BENIGNO A. CASTILLO, CORNELIO L. CASTILLO, HIPOLITO, RAUL L. IGNACIO, MANUEL L. ILAGAN,
JOSEPH B. CASTILLO, ANSELMO CASTILLO, JOAQUIN RENATO L . ILAGAN, CONRADO A. INSIONG, GRACIANO
CASTILLO, PABLO L. CASTILLO, ROMEO P. CASTILLO, G. ISLA, ARNEL L. JACOB, OSCAR J. JAPITENGA, CIRILO
SESINANDO CATIBOG, DANILO CASTRO, PRUDENCIO A. HICBAN, MAXIMIANO HONRADES, GENEROSO IGNACIO,
CASTRO, RAMO CASTRO, JR., ROMEO A. DE CASTRO, FELIPE ILAGAN, EXPEDITO N. JACOB, MARIO JASMIN,
JAIME B. CATLI, DURANA D. CEFERINO, RODOLFO B. BIENVENIDO JAVIER, ROMEO M. JAVIER, PRIMO DE
CELIS, HERMINIGILDO CEREZO, VICTORIANO JESUS, REYNALDO DE JESUS, CARLOS A. JIMENEZ,
CELESTINO, BENJAMIN CHAN, ANTONIO C. CHUA, DANILO E. JIMENEZ, PEDRO C. JOAQUIN, FELIPE W.
VIVENCIO B. CIABAL, RODRIGO CLARETE, AUGUSTO JOCSON, FELINO M. JOCSON, PEDRO N. JOCSON,
COLOMA, TURIANO CONCEPCION, TERESITO VALENTINO S. JOCSON, PEDRO B. JOLOYA, ESTEBAN P.
CONSTANTINO, ARMANDO CORALES, RENATO C. JOSE, JR., RAUL JOSE, RICARDO SAN JOSE, GERTRUDO
CORCUERA, APOLINAR CORONADO, ABELARDO KABIGTING, EDUARDO S. KOLIMLIM, SR., LAURO J.
CORONEL, FELIX CORONEL, JR., LEONARDO CORPUZ, LABAY, EMMANUEL C. LABELLA, EDGARDO B.
JESUS M. CORRALES, CESAR CORTEMPRATO, LACERONA, JOSE B. LACSON, MARIO J. LADINES,
FRANCISCO O. CORVERA, FRANCISCO COSTALES, SR., RUFINO LAGAC, RODRIGO LAGANAPAN, EFREN M.
CELEDONIO CREDITO, ALBERTO A. CREUS, ANACLETO LAMADRID, GUADENCIO LATANAN, VIRGILIO
V. CRUZ, DOMINGO DELA CRUZ, AMELIANO DELA LATAYAN, EMILIANO LATOJA, WENCESLAO LAUREL,
CRUZ, JR., PANCHITO CRUZ, REYNALDO B. DELA CRUZ, ALFREDO LAXAMANA, DANIEL R. LAZARO, ANTONIO C.
ROBERTO P. CRUZ, TEODORO S. CRUZ, ZOSIMO DELA LEANO, ARTURO S. LEGASPI, BENITO DE LEMOS, JR.,
CRUZ, DIONISIO A. CUARESMA, FELIMON CUIZON, PEDRO G. DE LEON, MANOLITO C. LILOC, GERARDO
FERMIN DAGONDON, RICHARD DAGUINSIN, CRISANTO LIMUACO, ERNESTO S. LISING, RENATO LISING,
A. DATAY, NICASIO DANTINGUINOO, JOSE DATOON, WILFREDO S. LISING, CRISPULO LONTOC, PEDRO M.
EDUARDO DAVID, ENRICO T. DAVID, FAVIO DAVID, LOPERA, ROGELIO LOPERA, CARLITO M. LOPEZ,
VICTORIANO S. DAVID, EDGARDO N. DAYACAP, CLODY LOPEZ, GARLITO LOPEZ, GEORGE F. LOPEZ,
JOSELITO T. DELOSO, CELERINO DE GUZMAN, ROMULO VIRGILIO M. LOPEZ, BERNARDITO G. LOREJA,
DE GUZMAN, LIBERATO DE GUZMAN, JOSE DE LEON, DOMINGO B. LORICO, DOMINGO LOYOLA, DANTE
JOSELITO L. DE LUMBAN, NAPOLEON S. DE LUNA, LUAGE, ANTONIO M. LUALHATI, EMMANUEL
RICARDO DE RAMA, GENEROSO DEL ROSARIO, LUALHATI, JR., LEONIDEZ C. LUALHATI, SEBASTIAN
ALBERTO DELA CRUZ, JOSE DELA CRUZ, LEONARDO LUALHATI, FRANCISCO LUBAT, ARMANDO LUCERO,
DELOS REYES, ERNESTO F. DIATA, EDUARDO A. DIAZ, JOSELITO L. DE LUMBAN, THOMAS VICENTE O. LUNA,
FELIX DIAZ, MELCHOR DIAZ, NICANOR S. DIAZ, NOLI MACALADLAD, ALFREDO MACALINO, RICARDO
GERARDO C. DIGA, CLEMENTE DIMATULAC, ROLANDO MACALINO, ARTURO V. MACARAIG, ERNESTO V.
DIONISIO, PHILIPP G. DISMAYA, BENJAMIN MACARAIG, RODOLFO V. MACARAIG, BENJAMIN
DOCTOLERO, ALBERTO STO. DOMINGO, BENJAMIN E. MACATANGAY, HERMOGENES MACATANGAY, RODEL
DOZA, BENJAMIN DUPA, DANILO C. DURAN, GREGORIO MACATANGAY, ROMULO MACATANGAY, OSIAS Q.
D. DURAN, RENATO A. EDUARTE, GODOFREDO E. EISMA, MADLANGBAYAN, NICOLAS P. MADRID, EDELBERTO G.
ARDON B. ELLO, UBED B. ELLO, JOSEFINO ENANO, MAGAT, EFREN C. MAGBANUA, BENJAMIN MAGBUHAT,
REYNALDO ENCARNACION, EDGARDO ENGUANCIO, ALFREDO C. MAGCALENG, ANTONIO MAGNAYE,
ELIAS EQUIPANO, FELIZARDO ESCARMOSA, MIGUEL ALFONSO MAGPANTAY, RICARDO C. MAGPANTAY,
ESCARMOSA, ARMANDO ESCOBAR, ROMEO T. SIMEON M. MAGPANTAY, ARMANDO M. MAGSINO,
ESCUYOS, ANGELITO ESPIRITU, EDUARDO S. ESPIRITU, MACARIO S. MAGSINO, ANTONIO MAGTIBAY, VICTOR
REYNALDO ESPIRITU, ROLANDO ESPIRITU, JULIAN V. MAGTIBAY, GERONIMO MAHILUM, MANUEL
ESPREGANTE, IGMIDIO ESTANISLAO, ERNESTO M. MALONZO, RICARDO MAMADIS, RODOLFO MANA,
ESTEBAN, MELANIO R. ESTRO, ERNESTO M. ESTEVA, BERNARDO A. MANALILI, MANUEL MANALILI, ANGELO
CONRADO ESTUAR, CLYDE ESTUYE, ELISEO FAJARDO, MANALO, AGUILES L. MANALO, LEOPOLDO
PORFIRIO FALQUEZA, WILFREDO P. FAUSTINO, EMILIO MANGAHAS, BAYANI MANIGBAS, ROLANDO C.
E. FERNANDEZ, ARTEMIO FERRER, MISAEL M. MANIMTIM, DANIEL MANONSON,. ERNESTO F. MANUEL,
FIGURACION, ARMANDO F. FLORES, BENJAMIN EDUARDO MANZANO, RICARDO N. MAPA, RAMON
FLORES, EDGARDO C. FLORES, BUENAVENTURA MAPILE, ROBERTO C. MARANA, NEMESIO MARASIGAN,
FRANCISCO, MANUEL S. FRANCISCO, ROLANDO WENCESLAO MARASIGAN, LEONARDO MARCELO,
FRANCISCO, VALERIANO FRANCISCO, RODOLFO HENRY F. MARIANO, JOEL MARIDABLE, SANTOS E.
GABAWAN, ESMERALDO GAHUTAN, CESAR C. GALANG, MARINO, NARCISO A. MARQUEZ, RICARDO MARTINEZ,
SANTIAGO N. GALOSO, GABRIEL GAMBOA, BERNARDO DIEGO MASICAMPO, AURELIO MATABERDE, RENATO
GANDAMON, JUAN GANZON, ANDRES GARCIA, JR., MATILLA, VICTORIANO MATILLA, VIRGILIO MEDEL,
ARMANDO M. GARCIA, EUGENIO GARCIA, MARCELO L. LOLITO M. MELECIO, BENIGNO MELENDEZ, RENER J.
GARCIA, PATRICIO L. GARCIA, JR., PANCIANO G. MEMIJE, REYNALDO F. MEMIJE, RODEL MEMIJE,
GARCIA, PONCIANO G. GARCIA, JR., RAFAEL P. GARCIA, AVELINO MENDOZA, JR., CLARO MENDOZA, TIMOTEO
8
MENDOZA, GREGORIO MERCADO, ERNANI DELA RENATO D. SANTOS, MIGUEL SAPUYOT, ALEX S.
MERCED, RICARDO MERCENA, NEMESIO METRELLO, SERQUINA, DOMINADOR P. SERRA, ROMEO SIDRO,
RODEL MEMIJE, GASPAR MINIMO, BENJAMIN AMADO M. SILANG, FAUSTINO D. SILANG, RODOLFO B.
MIRANDA, FELIXBERTO D. MISA, CLAUDIO A. DE SILOS, ANICETO G. SILVA, EDGARDO M. SILVA,
MODESTO, JR., OSCAR MONDEDO, GENEROSO MONTON, ROLANDO C. SILVERTO, ARTHUR B. SIMBAHON,
RENATO MORADA, RICARDO MORADA, RODOLFO DOMINGO SOLANO, JOSELITO C. SOLANTE, CARLITO
MORADA, ROLANDO M. MORALES, FEDERICO M. SOLIS, CONRADO SOLIS, III, EDGARDO SOLIS, ERNESTO
MORENO, VICTORINO A. MORTEL, JR., ESPIRITU A. SOLIS, ISAGANI M. SOLIS, EDUARDO L. SOTTO,
MUNOZ, IGNACIO MUNOZ, ILDEFONSO MUNOZ, ERNESTO G. STA. MARIA, VICENTE G. STELLA,
ROGELIO MUNOZ, ERNESTO NAPALAN, MARCELO A. FELIMON SUPANG, PETER TANGUINOO, MAXIMINO
NARCIZO, REYNALDO NATALIA, FERNANDO C. TALIBSAO, FELICISMO P. TALUSIK, FERMIN TARUC, JR.,
NAVARETTE, PACIFICO D. NAVARRO, FLORANTE LEVY S. TEMPLO, RODOLFO S. TIAMSON, LEONILO
NAZARENO, RIZAL B. NAZARIO, JOSUE NEGRITE, TIPOSO, ARNEL TOLENTINO, MARIO M. TOLENTINO,
ALFREDO NEPUMUCENO, HERBERT G. NG, FLORENCIO FELIPE TORRALBA, JOVITO V. TORRES, LEONARDO DE
NICOLAS, ERNESTO C. NINON, AVELINO NUQUI, TORRES, GAVINO U. TUAZON, AUGUSTO B. TUNGUIA,
NEMESIO D. OBA, DANILO OCAMPO, EDGARDO FRANCISCO UMALI, SIMPLICIO UNIDA, WILFREDO V.
OCAMPO, RODRIGO E. OCAMPO, ANTONIO B. OCCIANO, UNTALAN, ANTONIO VALDERAMA, RAMON
REYNALDO P. OCSON, BENJAMIN ODESA, ANGEL VALDERAMA, NILO VALENCIANO, EDGARDO C.
OLASO, FRANCISCO OLIGARIO, ZOSIMO OLIMBO, VASQUEZ, ELPIDIO VELASQUEZ, NESTOR DE VERA,
BENJAMIN V. ORALLO, ROMEO S. ORIGINES, DANILO R. WILFREDO D. VERA, BIENVENIDO VERGARA, ALFREDO
ORTANEZ, WILFREDO OSIAS, VIRGILIO PA-A, DAVID VERGARA, RAMON R. VERZOSA, FELICITO P.
PAALAN, JESUS N. PACHECO, ALFONSO L. PADILLA, VICMUNDO, ALFREDO VICTORIANO, TEOFILO P.
DANILO PAGSANJAN, NUMERIANO PAGSISIHAN, VIDALLO, SABINO N. VIERNEZ, JESUS J. VILLA, JOVEN
RICARDO T. PAGUIO, EMELIO PAKINGAN, LEANDRO VILLABLANCO, EDGARDO G. VILLAFLORES, CEFERINO
PALABRICA, QUINCIANO PALO, JOSE PAMATIAN, VILLAGERA, ALEX VILLAHERMOZA, DANILO A.
GONZALO PAN, PORFIRIO PAN, BIENVENIDO PANGAN, VILLANUEVA, ELITO VILLANUEVA, LEONARDO M.
ERNESTO PANGAN, FRANCISCO V. PASIA, EDILBERTO VILLANUEVA, MANUEL R. VILLANUEVA, NEPTHALI
PASIMIO, JR., JOSE V. PASION, ANGELITO M. PENA, VILLAR, JOSE V. VILLAREAL, FELICISIMO VILLARINO,
DIONISIO PENDRAS, HERMINIO PERALTA, REYNALDO RAFAEL VILLAROMAN, CARLOS VILLENA, FERDINAND
M. PERALTA, ANTONIO PEREZ, ANTOLIANO E. PEREZ, VIVO, ROBERTO YABUT, VICENTE YNGENTE, AND ORO
JUAN PEREZ, LEON PEREZ, ROMEO E. PEREZ, ROMULO C. ZUNIGA, Respondents.
PEREZ, WILLIAM PEREZ, FERNANDO G. PERINO,
FLORENTINO DEL PILAR, DELMAR F. PINEDA,
SALVADOR PINEDA, ELIZALDE PINPIN, WILFREDO
PINPIN, ARTURO POBLETE, DOMINADOR R. PRIELA, DECISION
BUENAVENTURA PRUDENTE, CARMELITO PRUDENTE,
DANTE PUEYO, REYNALDO Q. PUEYO, RODOLFO O.
PULIDO, ALEJANDRO PUNIO, FEDERICO QUIMAN, QUIASON, J.:
ALFREDO L. QUINTO, ROMEO QUINTOS, EDUARDO W.
RACABO, RICARDO C. DE RAMA, RICARDO L. DE RAMA,
ROLANDO DE RAMA, FERNANDO A. RAMIREZ, LITO S.
RAMIREZ, RICARDO G. RAMIREZ, RODOLFO V. The petition in G.R. No. 104776, entitled "Bienvenido M. Cadalin, et.
RAMIREZ, ALBERTO RAMOS, ANSELMO C. RAMOS, al. v. Philippine Overseas Employment Administration’s
TOBIAS RAMOS, WILLARFREDO RAYMUNDO, Administrator, et. al.," was filed under Rule 65 of the Revised Rules
REYNALDO RAQUEDAN, MANUEL F. RAVELAS, of Court:chanrob1es virtual 1aw library
WILFREDO D. RAYMUNDO, ERNESTO E. RECOLASO,
ALBERTO REDAZA, ARTHUR REJUSO, TORIBIO M. (1) to modify the Resolution dated September 2, 1991 of the National
RELLAMA, JAIME RELLOSA, EUGENIO A. REMOQUILLO, Labor Relations Commission (NLRC) in POEA Cases Nos. L-84-06-
GERARDO RENTOZA, REDENTOR C. REY, ALFREDO S. 555, L-85-10-777, L-85-10-779 and L-86-05-460;
REYES, AMABLE S. REYES, BENEDICTO R. REYES,
GREGORIO B. REYES, JOSE A. REYES, JOSE C. REYES, (2) to render a new decision: (i) declaring private respondents as in
ROMULO M. REYES, SERGIO REYES, ERNESTO F. RICO, default; (ii) declaring the said labor cases as a class suit; (iii) ordering
FERNANDO M. RICO, EMMANUEL RIETA, RICARDO Asia International Builders Corporation (AIBC) and Brown and Root
RIETA, LEO B. ROBLES, RUBEN ROBLES, RODOLFO International Inc. (BRII) to pay the claims of the 1,767 claimants in
ROBLEZA, RODRIGO ROBLEZA, EDUARDO ROCABO, said labor cases; (iv) declaring Atty. Florante M. de Castro guilty of
ANTONIO R. RODRIGUEZ, BERNARDO RODRIGUEZ, forum-shopping; and (v) dismissing POEA Case No. L-86-05-460;
ELIGIO RODRIGUEZ, ALMONTE ROMEO, ELIAS and
RONQUILLO, ELISE RONQUILLO, LUIS VAL B.
RONQUILLO, REYNOSO P. RONQUILLO, RODOLFO (3) to reverse the Resolution dated March 24, 1992 of the NLRC,
RONQUILLO, ANGEL ROSALES, RAMON ROSALES, denying the motion for reconsideration of its Resolution dated
ALBERTO DEL ROSARIO, GENEROSO DEL ROSARIO, September 2, 1991 (Rollo, pp. 8-288).
TEODORICO DEL ROSARIO, VIRGILIO L. ROSARIO,
CARLITO SALVADOR, JOSE SAMPARADA, ERNESTO SAN The petition in G.R. Nos. 104911-14, entitled "Bienvenido M.
PEDRO, ADRIANO V. SANCHA, GERONIMO M. SANCHA, Cadalin, et. al., v. Hon. National Labor Relations Commission, et.
ARTEMIO B. SANCHEZ, NICASIO SANCHEZ, APOLONIO al.," was filed under Rule 65 of the Revised Rules of
P. SANTIAGO, JOSELITO S. SANTIAGO, SERGIO Court:chanrob1es virtual 1aw library
SANTIAGO, EDILBERTO C. SANTOS, EFREN S. SANTOS,
9
(1) to reverse the Resolution dated September 2, 1991 of NLRC in
POEA Cases Nos. L-84-06-555, L-85-10-777, L-85-10-799 and L- The amended complaint principally sought the payment of the
86-05-460 insofar as it: (i) applied the three-year prescriptive period unexpired portion of the employment contracts, which was
under the Labor Code of the Philippines instead of the ten-year terminated prematurely, and secondarily, the payment of the interest
prescriptive period under the Civil Code of the Philippines; and (ii) of the earnings of the Travel and Reserved Fund, interest on all the
denied the "three-hour daily average" formula in the computation of unpaid benefits; area wage and salary differential pay; fringe benefits;
petitioners’ overtime pay; and refund of SSS and premium not remitted to the SSS; refund of
withholding tax not remitted to the BIR; penalties for committing
(2) to reverse the Resolution dated March 24, 1992 of NLRC, prohibited practices; as well as the suspension of the license of AIBC
denying the motion for reconsideration of its Resolution dated and the accreditation of BRII (G.R. No. 104776, Rollo, pp. 13-14).
September 2, 1991 (Rollo, pp. 8-25; 26-220).
At the hearing on June 25, 1984, AIBC was furnished a copy of the
The petition in G.R. Nos. 105029-32, entitled "Asia International complaint and was given, together with BRII, up to July 5, 1984 to
Builders Corporation, et. al., v. National Labor Relations file its answer.
Commission, et. al." was filed under Rule 65 of the Revised Rules of
Court:chanrob1es virtual 1aw library On July 3, 1984, POEA Administrator, upon motion of AIBC and
BRII, ordered the claimants to file a bill of particulars within ten days
(1) to reverse the Resolution dated September 2, 1991 of NLRC in from receipt of the order and the movants to file their answers within
POEA Cases Nos. L-84-06-555, L-85-10-777, L-85-10-779 and L- ten days from receipt of the bill of particulars. The POEA
86-05-460, insofar as it granted the claims of 149 claimants; and Administrator also scheduled a pre-trial conference on July 25, 1984.

(2) to reverse the Resolution dated March 21, 1992 of NLRC insofar On July 13, 1984, the claimants submitted their "Compliance and
as it denied the motions for reconsideration of AIBC and BRII Manifestation." On July 23, 1984, AIBC filed a "Motion to Strike
(Rollo, pp. 2-59; 61-230). Out of the Records", the "Complaint" and the "Compliance and
Manifestation." On July 25, 1984, the claimants filed their "Rejoinder
The Resolution dated September 2, 1991 of NLRC, which modified and Comments," averring, among other matters, the failure of AIBC
the decision of POEA in four labor cases: (1) awarded monetary and BRII to file their answers and to attend the pre-trial conference
benefits only to 149 claimants and (2) directed Labor Arbiter Fatima on July 25, 1984. The claimants alleged that AIBC and BRII had
J. Franco to conduct hearings and to receive evidence on the claims waived their right to present evidence and had defaulted by failing to
dismissed by the POEA for lack of substantial evidence or proof of file their answers and attend the pre-trial conference.
employment.
On October 2, 1984, the POEA Administrator denied the "Motion to
Consolidation of Cases Strike Out of the Records" filed by AIBC but required the claimants
to correct the deficiencies in the complaint pointed out in the order.
G.R. Nos. 104776 and 105029-32 were originally raffled to the Third
Division while G.R. Nos. 104911-14 were raffled to the Second On October 10, 1984, claimants asked for time within which to
Division. In the Resolution dated July 26, 1993, the Second Division comply with the Order of October 2, 1984 and filed an "Urgent
referred G.R. Nos. 104911-14 to the Third Division (G.R. No. Manifestation," praying that the POEA Administrator direct the
104911-14, Rollo, p. 895). parties to submit simultaneously their position papers, after which the
case should be deemed submitted for decision. On the same day,
In the Resolution dated September 29, 1993, the Third Division Atty. Florante de Castro filed another complaint for the same money
granted the motion filed in G.R. Nos. 104911-14 for the consolidation claims and benefits in behalf of several claimants, some of whom
of said cases with G.R. Nos. 104776 and 105029-32, which were were also claimants in POEA Case No. L-84-06-555 (POEA Case
assigned to the First Division (G.R. Nos. 104911-14, Rollo, pp. 986- No. 85-10-779).
1,107; G.R. Nos. 105029-30, Rollo, pp. 369-377, 426-432). In the
Resolution dated October 27, 1993, the First Division granted the On October 19, 1984, claimants filed their "Compliance" with the
motion to consolidate G.R. Nos. 104911-14 with G.R. No. 104776 Order dated October 2, 1984 and an "Urgent Manifestation," praying
(G.R. Nos. 104911-14, Rollo, p. 1109; G.R. No. 105029-32, Rollo, p. that the POEA direct the parties to submit simultaneously their
1562). position papers after which the case would be deemed submitted for
decision. On the same day, AIBC asked for time to file its comment
I on the "Compliance" and "Urgent Manifestation" of claimants. On
November 6, 1984, it filed a second motion for extension of time to
file the comment.
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and
Donato B. Evangelista, in their own behalf and on behalf of 728 other On November 8, 1984, the POEA Administrator informed AIBC that
overseas contract workers (OCWs) instituted a class suit by filing an its motion for extension of time was granted.
"Amended Complaint" with the Philippine Overseas Employment
Administration (POEA) for money claims arising from their On November 14, 1984, claimants filed an opposition to the motions
recruitment by AIBC and employment by BRII (POEA Case NO. L- for extension of time and asked that AIBC and BRII be declared in
84-06-555). The claimants were represented by Atty. Gerardo del default for failure to file their answers.
Mundo.
On November 20, 1984, AIBC and BRII filed a "Comment" praying,
BRII is a foreign corporation with headquarters in Houston, Texas, among other reliefs, that claimants should be ordered to amend their
and is engaged in construction; while AIBC is a domestic corporation complaint.
licensed as a service contractor to recruit, mobilize and deploy
Filipino workers for overseas employment on behalf of its foreign On December 27, 1984, the POEA Administrator issued an order
principals. directing AIBC and BRII to file their answers within ten days from
10
receipt of the order. September 26, 1985 and Administrative Case No. 2858 on March 18,
1986. On May 13, 1987, the Supreme Court issued a resolution in
On February 27, 1985, AIBC and BRII appealed to NLRC seeking Administrative Case No. 2858 directing the POEA Administrator to
the reversal of the said order of the POEA Administrator. Claimants resolve the issues raised in the motions and oppositions filed in
opposed the appeal, claiming that it was dilatory and praying that POEA Cases Nos. L-84-06-555 and L-86-05-460 and to decide the
AIBC and BRII be declared in default. labor cases with deliberate dispatch.

On April 2, 1985, the original claimants filed an "Amended AIBC also filed a petition in the Supreme Court (G.R. No. 78489),
Complaint and/or Position Paper" dated March 24, 1985, adding new questioning the Order dated September 4, 1985 of the POEA
demands: namely, the payment of overtime pay, extra night work Administrator. Said order required BRII and AIBC to answer the
pay, annual leave differential pay, leave indemnity pay, retirement amended complaint in POEA Case No. L-84-06-555. In a resolution
and savings benefits and their share of forfeitures (G.R. No. 104776, dated November 9, 1987, we dismissed the petition by informing
Rollo, pp. 14-16). On April 15, 1985, the POEA Administrator AIBC that all its technical objections may properly be resolved in the
directed AIBC to file its answer to the amended complaint (G.R. No. hearings before the POEA.
104776, Rollo, p. 20).
Complaints were also filed before the Ombudsman. The first was
On May 28, 1985, claimants filed an "Urgent Motion for Summary filed on September 22, 1988 by claimant Hermie Arguelles and 18
Judgment." On the same day, the POEA issued an order directing co-claimants against the POEA Administrator and several NLRC
AIBC and BRII to file their answers to the "Amended Complaint," Commissioners. The Ombudsman merely referred the complaint to
otherwise, they would be deemed to have waived their right to the Secretary of Labor and Employment with a request for the early
present evidence and the case would be resolved on the basis of disposition of POEA Case No. L-84-06-555. The second was filed on
complainants’ evidence. April 28, 1989 by claimants Emigdio P. Bautista and Rolando R.
Lobeta charging AIBC and BRII for violation of labor and social
On June 5, 1985, AIBC countered with a "Motion to Dismiss as legislations. The third was filed by Jose R. Santos, Maximino N.
Improper Class Suit and Motion for Bill of Particulars Re: Amended Talibsao and Amado B. Bruce denouncing AIBC and BRII of
Complaint dated March 24, 1985." Claimants opposed the motions. violations of labor laws.

On September 4, 1985, the POEA Administrator reiterated his On January 13, 1987, AIBC filed a motion for reconsideration of the
directive to AIBC and BRII to file their answers in POEA Case No. NLRC Resolution dated December 12, 1986.
L-84-06-555.
On January 14, 1987, AIBC reiterated before the POEA
On September 18, 1985, AIBC filed its second appeal to the NLRC, Administrator its motion for suspension of the period for filing an
together with a petition for the issuance of a writ of injunction. On answer or motion for extension of time to file the same until the
September 19, 1985, NLRC enjoined the POEA Administrator from resolution of its motion for reconsideration of the order of the NLRC
hearing the labor cases and suspended the period for the filing of the dismissing the two appeals. On April 28, 1987, NLRC en banc denied
answers of AIBC and BRII. the motion for reconsideration.

On September 19, 1985, claimants asked the POEA Administrator to At the hearing on June 19, 1987, AIBC submitted its answer to the
include additional claimants in the case and to investigate alleged complaint. At the same hearing, the parties were given a period of 15
wrongdoings of BRII, AIBC and their respective lawyers. days from said date within which to submit their respective position
papers. On June 24, 1987 claimants filed their "Urgent Motion to
On October 10, 1985, Romeo Patag and two co-claimants filed a Strike Out Answer," alleging that the answer was filed out of time.
complaint (POEA Case No. L-85-10-777) against AIBC and BRII On June 29, 1987, claimants filed their "Supplement to Urgent
with the POEA, demanding monetary claims similar to those subject Manifestational Motion" to comply with the POEA Order of June 19,
of POEA Case No. L-84-06-555. In the same month, Solomon Reyes 1987. On February 24, 1988, AIBC and BRII submitted their position
also filed his own complaint (POEA Case No. L-85-10-779) against paper. On March 4, 1988, claimants filed their "Ex-parte Motion to
AIBC and BRII. Expunge from the Records" the position paper of AIBC and BRII,
claiming that it was filed out of time.
On October 17, 1985, the law firm of Florante M. de Castro &
Associates asked for the substitution of the original counsel of record On September 1, 1988, the claimants represented by Atty. De Castro
and the cancellation of the special powers of attorney given the filed their memorandum in POEA Case No. L-86-05-460. On
original counsel. September 6, 1988, AIBC and BRII submitted their Supplemental
Memorandum. On September 12, 1988, BRII filed its "Reply to
On December 12, 1985, Atty. Del Mundo filed in NLRC a notice of Complainant’s Memorandum." On October 26, 1988, claimants
the claim to enforce attorney’s lien. submitted their "Ex-parte Manifestational Motion and Counter-
Supplemental Motion," together with 446 individual contracts of
On May 29, 1986, Atty. De Castro filed a complaint for money employments and service records. On October 27, 1988, AIBC and
claims (POEA Case No. 86-05-460) in behalf of 11 claimants BRII filed a "Consolidated Reply."cralaw virtua1aw library
including Bienvenido Cadalin, a claimant in POEA Case No. 84-06-
555. On January 30, 1989, the POEA Administrator rendered his decision
in POEA Case No. L-84-06-555 and the other consolidated cases,
On December 12, 1986, the NLRC dismissed the two appeals filed on which awarded the amount of $824,652.44 in favor of only 324
February 27, 1985 and September 18, 1985 by AIBC and BRII. complainants.chanrobles virtual lawlibrary

In narrating the proceedings of the labor cases before the POEA On February 10, 1989, claimants submitted their "Appeal
Administrator, it is not amiss to mention that two cases were filed in Memorandum for Partial Appeal" from the decision of the POEA. On
the Supreme Court by the claimants, namely — G.R. No. 72132 on the same day, AIBC also filed its motion for reconsideration and/or
11
appeal in addition to the "Notice of Appeal" filed earlier on February made an integral part of this Resolution, whose awards decreed by
6, 1989 by another counsel for AIBC. the POEA, to Our mind, are not supported by substantial evidence"
(G.R. No. 104776; Rollo, pp. 113-115; G.R. Nos. 104911-14, pp. 85-
On February 17, 1989, claimants filed their "Answer to Appeal," 87; G.R. Nos. 105029-31, pp. 120-122).
praying for the dismissal of the appeal of AIBC and BRII.
On November 27, 1991, claimant Amado S. Tolentino and 12 co-
On March 15, 1989, claimants filed their "Supplement to claimants, who were former clients of Atty. Del Mundo, filed a
Complainants’ Appeal Memorandum," together with their "newly petition for certiorari with the Supreme Court (G.R. Nos. 120741-
discovered evidence" consisting of payroll records. 44). The petition was dismissed in a resolution dated January 27,
1992.
On April 5, 1989, AIBC and BRII submitted to NLRC their
"Manifestation," stating among other matters that there were only 728 Three motions for reconsideration of the September 2, 1991
named claimants. On April 20, 1989, the claimants filed their Resolution of the NLRC were filed. The first, by the claimants
"Counter-Manifestation," alleging that there were 1,767 of them. represented by Atty. Del Mundo; the second, by the claimants
represented by Atty. De Castro; and the third, by AIBC and BRII.
On July 27, 1989, claimants filed their "Urgent Motion for
Execution" of the Decision dated January 30, 1989 on the grounds In its Resolution dated March 24, 1992, NLRC denied all the motions
that BRII had failed to appeal on time and AIBC had not posted the for reconsideration.
supersedeas bond in the amount of $824,652.44.
Hence, these petitions filed by the claimants represented by Atty. Del
On December 23, 1989, claimants filed another motion to resolve the Mundo (G.R. No. 104776), the claimants represented by Atty. De
labor cases. Castro (G.R. Nos. 104911-14) and by AIBC and BRII (G.R. Nos.
105029-32).
On August 21, 1990, claimants filed their "Manifestational Motion,"
praying that all the 1,767 claimants be awarded their monetary claims II
for failure of private respondents to file their answers within the
reglementary period required by law.
Compromise Agreements
On September 2, 1991, NLRC promulgated its Resolution, disposing
as follows:jgc:chanrobles.com.ph Before this Court, the claimants represented by Atty. De Castro and
AIBC and BRII have submitted, from time to time, compromise
"WHEREFORE, premises considered, the Decision of the POEA in agreements for our approval and jointly moved for the dismissal of
these consolidated cases is modified to the extent and in accordance their respective petitions insofar as the claimants-parties to the
with the following dispositions:chanrob1es virtual 1aw library compromise agreements were concerned (See Annex A for list of
claimants who signed quitclaims).
1. The claims of the 94 complainants identified and listed in Annex
"A" hereof are dismissed for having prescribed; Thus the following manifestations that the parties had arrived at a
compromise agreement and the corresponding motions for the
2. Respondents AIBC and Brown & Root are hereby ordered, jointly approval of the agreements were filed by the parties and approved by
and severally, to pay the 149 complainants, identified and listed in the Court:chanrob1es virtual 1aw library
Annex "B" hereof, the peso equivalent, at the time of payment, of the
total amount in US dollars indicated opposite their respective names; 1) Joint Manifestation and Motion involving claimant Emigdio
Abarquez and 47 co-claimants dated September 2, 1992 (G.R. Nos.
3. The awards given by the POEA to the 19 complaints classified and 104911-14, Rollo, pp. 263-406; G.R. Nos. 105029-32, Rollo, pp.
listed in Annex "C" hereof, who appear to have worked elsewhere 470-615);
than in Bahrain are hereby set aside.
2) Joint Manifestation and Motion involving petitioner Bienvenido
4. All claims other than those indicated in Annex "B", including those Cadalin and 82 co-petitioners dated September 3, 1992 (G.R. No.
for overtime work and favorably granted by the POEA, are hereby 104776, Rollo, pp. 364-507);
dismissed for lack of substantial evidence in support thereof or are
beyond the competence of this Commission to pass upon. 3) Joint Manifestation and Motion involving claimant Jose M. Aban
and 36 co-claimants dated September 17, 1992 (G.R. Nos. 105029-
In addition, this Commission, in the exercise of its powers and 32, Rollo, pp. 613-722; G.R. No. 104776, Rollo, pp. 518-626; G.R.
authority under Article 218 (c) of the Labor Code, as amended by Nos. 104911-14, Rollo, pp. 407-516);
R.A. 6715, hereby directs Labor Arbiter Fatima J. Franco of this
Commission to summon parties, conduct hearings and receive 4) Joint Manifestation and Motion involving claimant Antonio T.
evidence, as expeditiously as possible, and thereafter submit a written Anglo and 17 co-claimants dated October 14, 1992 (G.R. Nos.
report to this Commission (First Division) of the proceedings taken, 105029-32, Rollo, pp. 778-843; G.R. No. 104776, Rollo, pp. 650-
regarding the claims of the following:chanrob1es virtual 1aw library 713; G.R. Nos. 104911-14, Rollo, pp. 530-590);

(a) complainants identified and listed in Annex "D" attached and 5) Joint Manifestation and Motion involving claimant Dionisio
made an integral part of this Resolution, whose claims were Bobongo and 6 co-claimants dated January 15, 1993 (G.R. No.
dismissed by the POEA for lack of proof of employment in Bahrain 104776, Rollo, pp. 813-836; G.R. Nos. 104911-14, Rollo, pp. 629-
(these complainants numbering 683, are listed in pages 13 to 23 of 652);
the decision of POEA, subject of the appeals) and,
6) Joint Manifestation and Motion involving claimant Valerio A.
(b) complainants identified and listed in Annex "E" attached and Evangelista and 4 co-claimants dated March 10, 1993 (G.R. Nos.
12
104911-14, Rollo, pp. 731-746; G.R. No. 104776, Rollo, pp. 1815-
1829); PART B —

7) Joint Manifestation and Motion involving claimants Palconeri (1) Employment Position
Banaag and 5 co-claimants dated March 17, 1993 (G.R. No. 104776,
Rollo, pp. 1657-1703; G.R. Nos. 104911-14, Rollo, pp. 655-675); Classification : —————————

8) Joint Manifestation and Motion involving claimant Benjamin (Code) : —————————

Ambrosio and 15 other co-claimants dated May 4, 1993 (G.R. No.
105029-32, Rollo, pp. 906-956; G.R. Nos. 104911-14, Rollo, pp. (2) Company Employment
679-729; G.R. No. 104776, Rollo, pp. 1773-1814);
Status : —————————
9) Joint Manifestation and Motion involving Valerio Evangelista and
3 co-claimants dated May 10, 1993 (G.R. No. 104776, Rollo, pp. (3) Date of Employment
1815-1829);
to Commence on : —————————
10) Joint Manifestation and Motion involving petitioner Quiterio R.
Agudo and 36 co-claimants dated June 14, 1993 (G.R. Nos. 105029- (4) Basic Working
32, Rollo, pp. 974-1190; G.R. Nos. 104911-14, Rollo, pp. 748-864;
G.R. No. 104776, Rollo, pp. 1066-1183); Hours Per Week : —————————

11) Joint Manifestation and Motion involving claimant Arnaldo J. (5) Basic Working
Alonzo and 19 co-claimants dated July 22, 1993 (G.R. No. 104776,
Rollo, pp. 1173-1235; G.R. Nos. 105029-32, Rollo, pp. 1193-1256; Hours per Month : —————————
G.R. Nos. 104911-14, Rollo, pp. 896-959);
(6) Basic Hourly Rate : —————————
12) Joint Manifestation and Motion involving claimant Ricardo C.
Dayrit and 2 co-claimants dated September 7, 1993 (G.R. Nos. (7) Overtime Rate
105029-3, Rollo, pp. 1266-1278; G.R. No. 104776, Rollo, pp. 1243-
1254; G.R. Nos. 104911-14, Rollo, pp. 972-984); Per Hour : —————————

13) Joint Manifestation and Motion involving claimant Dante C. (8) Projected Period of Service
Aceres and 37 co-claimants dated September 8, 1993 (G.R. No.
104776, Rollo, pp. 1257-1375; G.R. Nos. 104911-14, Rollo, pp. 987- (Subject to C (1) of this [sic]) : —————————
1105; G.R. Nos. 105029-32, Rollo, pp. 1280-1397);
Months and/or
14) Joint Manifestation and Motion involving Vivencio V. Abella
and 27 co-claimants dated January 10, 1994 (G.R. Nos. 105029-32, Job Completion
Rollo, Vol. II);
x       x       x
15) Joint Manifestation and Motion involving Domingo B. Solano
and six co-claimants dated August 25, 1994 (G.R. Nos. 105029-32;
G.R. No. 104776; G.R. No. 104911-14). 3. HOURS OF WORK AND COMPENSATION

III a) The Employee is employed at the hourly rate and overtime rate as
set out in Part B of this Document.

The facts as found by the NLRC are as b) The hours of work shall be those set forth by the Employer, and
follows:jgc:chanrobles.com.ph Employer may, at his sole option, change or adjust such hours as
maybe deemed necessary from time to time.
"We have taken painstaking efforts to sift over the more than fifty
volumes now comprising the records of these cases. From the 4. TERMINATION
records, it appears that the complainants-appellants allege that they
were recruited by respondent-appellant AIBC for its accredited a) Notwithstanding any other terms and conditions of this agreement,
foreign principal, Brown & Root, on various dates from 1975 to the Employer may, at his sole discretion, terminate employee’s
1983. They were all deployed at various projects undertaken by service with cause, under this agreement at any time. If the Employer
Brown & Root in several countries in the Middle East, such as Saudi terminates the services of the Employee under this Agreement
Arabia, Libya, United Arab Emirates and Bahrain, as well as in because of the completion or termination, or suspension of the work
Southeast Asia, in Indonesia and Malaysia. on which the Employee’s services were being utilized, or because of
a reduction in force due to a decrease in scope of such work, or by
Having been officially processed as overseas contract workers by the change in the type of construction of such work. The Employer will
Philippine Government, all the individual complainants signed be responsible for his return transportation to his country of origin.
standard overseas employment contracts (Records, Vols. 25-32. Normally on the most expeditious air route, economy class
Hereafter, reference to the records would be sparingly made, accommodation.
considering their chaotic arrangement) with AIBC before their
departure from the Philippines. These overseas employment contracts x       x       x
invariably contained the following relevant terms and conditions.
13
duration may be terminated by either party thereto after giving the
other party thirty days’ prior notice before such termination, in
10. VACATION/SICK LEAVE BENEFITS writing, in respect of monthly paid workers and fifteen days’ notice
in respect of other workers. The party terminating a contract without
a) After one (1) year of continuous service and/or satisfactory giving the required notice shall pay to the other party compensation
completion of contract, employee shall be entitled to 12-days equivalent to the amount of wages payable to the worker for the
vacation leave with pay. This shall be computed at the basic wage period of such notice or the unexpired portion thereof.
rate. Fractions of a year’s service will be computed on a pro-rata
basis. Art. 111: . . . the employer concerned shall pay to such worker, upon
termination of employment, a leaving indemnity for the period of his
b) Sick leave of 15 days shall be granted to the employee for every employment calculated on the basis of fifteen days’ wages for each
year of service for non-work connected injuries or illness. If the year of the first three years of service and of one month’s wages for
employee failed to avail of such leave benefits, the same shall be each year of service thereafter. Such worker shall be entitled to
forfeited at the end of the year in which said sick leave is granted. payment of leaving indemnity upon a quantum meruit in proportion
to the period of his service completed within a year."cralaw
11. BONUS virtua1aw library

A bonus of 20% (for offshore work) of gross income will be accrued All the individual complainants-appellants have already been
and payable only upon satisfactory completion of this contract. repatriated to the Philippines at the time of the filing of these cases
(R.R. No. 104776, Rollo, pp. 59-65).
12. OFFDAY PAY
IV
The seventh day of the week shall be observed as a day of rest with 8
hours regular pay. If work is performed on this day, all hours work
shall be paid at the premium rate. However, this offday pay provision The issues raised before and resolved by the NLRC were:chanrob1es
is applicable only when the laws of the Host Country require virtual 1aw library
payments for rest day.
First: — Whether or not complainants are entitled to the benefits
In the State of Bahrain, where some of the individual complainants provided by Amiri Decree No. 23 of Bahrain;
were deployed, His Majesty Isa Bin Salman Al Kaifa, Amir of
Bahrain, issued his Amiri Decree No. 23 on June 16, 1976, otherwise (a) Whether or not the complainants who have worked in Bahrain are
known as the Labour Law for the Private Sector (Records, Vol. 18). entitled to the above-mentioned benefits.
This decree took effect on August 16, 1976. Some of the provisions
of Amiri Decree No. 23 that are relevant to the claims of the (b) Whether or not Art. 44 of the same Decree (allegedly prescribing
complainants-appellants are as follows (Emphasis a more favorable treatment of alien employees) bars complainants
supplied):chanrob1es virtual 1aw library from enjoying its benefits.

Art. 79: . . . A worker shall receive payment for each extra hour Second: — Assuming that Amiri Decree No. 23 of Bahrain is
equivalent to his wage entitlement increased by a minimum of applicable in these cases, whether or not complainants’ claim for the
twenty-five per centum thereof for hours worked during the day; and benefits provided therein have prescribed.
by a minimum of fifty per centum thereof for hours worked during
the night which shall be deemed to being from seven o’clock in the Third: — Whether or not the instant cases qualify as a class suit.
evening until seven o’clock in the morning . . . ."cralaw virtua1aw
library Fourth: — Whether or not the proceedings conducted by the POEA,
as well as the decision that is the subject of these appeals, conformed
Art. 80: Friday shall be deemed to be a weekly day of rest on full pay. with the requirements of due process;

. . . an employer may require a worker, with his consent, to work on (a) Whether or not the respondent-appellant was denied its right to
his weekly day of rest if circumstances so require and in respect of due process;
which an additional sum equivalent to 150% of his normal wage shall
be paid to him . . . ."cralaw virtua1aw library (b) Whether or not the admission of evidence by the POEA after
these cases were submitted for decision was valid;
Art. 81: . . . When conditions of work require the worker to work on
any official holiday, he shall be paid an additional sum equivalent to (c) Whether or not the POEA acquired jurisdiction over Brown &
150% of his normal wage. Root International, Inc.;

Art. 84: Every worker who has completed one year’s continuous (d) Whether or not the judgment awards are supported by substantial
service with his employer shall be entitled to leave on full pay for a evidence;
period of not less than 21 days for each year increased to a period not
less than 28 days after five continuous years of service."cralaw (e) Whether or not the awards based on the averages and formula
virtua1aw library presented by the complainants-appellants are supported by substantial
evidence;
A worker shall be entitled to such leave upon a quantum meruit in
respect of the proportion of his service in that year."cralaw virtua1aw (f) Whether or not the POEA awarded sums beyond what the
library complainants-appellants prayed for; and, if so, whether or not these
awards are valid.
Art. 107: A contract of employment made for a period of indefinite
14
Fifth: — Whether or not the POEA erred in holding respondents
AIBC and Brown & Root jointly are severally liable for the judgment NLRC, however, held that the Amiri Decree No. 23 applied only to
awards despite the alleged finding that the former was the employer the claimants, who worked in Bahrain, and set aside awards of the
of the complainants; POEA Administrator in favor of the claimants, who worked
elsewhere.
(a) Whether or not the POEA has acquired jurisdiction over Brown &
Root; On the second issue, NLRC ruled that the prescriptive period for the
filing of the claims of the complainants was three years, as provided
(b) Whether or not the undisputed fact that AIBC was a licensed in Article 291 of the Labor Code of the Philippines, and not ten years
construction contractor precludes a finding that Brown & Root is as provided in Article 1144 of the Civil Code of the Philippines nor
liable for complainants claims. one year as provided in the Amiri Decree No. 23 of 1976.

Sixth: — Whether or not the POEA Administrator’s failure to hold On the third issue, NLRC agreed with the POEA Administrator that
respondents in default constitutes a reversible error. the labor cases cannot be treated as a class suit for the simple reason
that not all the complainants worked in Bahrain and therefore, the
Seventh: — Whether or not the POEA Administrator erred in subject matter of the action, the claims arising from the Bahrain law,
dismissing the following claims:chanrob1es virtual 1aw library is not of common or general interest to all the complainants.

a. Unexpired portion of contract; On the fourth issue, NLRC found at least three infractions of the
cardinal rules of administrative due process: namely, (1) the failure of
b. Interest earnings of Travel and Reserve Fund; the POEA Administrator to consider the evidence presented by AIBC
and BRII; (2) some findings of fact were not supported by substantial
c. Retirement and Savings Plan benefits; evidence; and (3) some of the evidence upon which the decision was
based were not disclosed to AIBC and BRII during the hearing.
d. War Zone bonus or premium pay of at least 100% of basic pay;
On the fifth issue, NLRC sustained the ruling of the POEA
e. Area Differential Pay; Administrator that BRII and AIBC are solidarily liable for the claims
of the complainants and held that BRII was the actual employer of
f. Accrued interests on all the unpaid benefits; the complainants, or at the very least, the indirect employer, with
AIBC as the labor contractor.
g. Salary differential pay;
NLRC also held that jurisdiction over BRII was acquired by the
h. Wage differential pay; POEA Administrator through the summons served on AIBC, its local
agent.
i. Refund of SSS premiums not remitted to SSS;
On the sixth issue, NLRC held that the POEA Administrator was
j. Refund of withholding tax not remitted to BIR; correct in denying the Motion to Declare AIBC in default.

k. Fringe benefits under B & R’s "A Summary of Employee On the seventh issue, which involved other money claims not based
on the Amiri Decree No. 23, NLRC ruled:chanrob1es virtual 1aw
Benefits" (Annex "Q" of Amended Complaint); library

l. Moral and exemplary damages; (1) that the POEA Administrator has no jurisdiction over the claims
for refund of the SSS premiums and refund of withholding taxes and
m. Attorney’s fees of at least ten percent of the judgment award; the claimants should file their claims for said refund with the
appropriate government agencies;
n. Other reliefs, like suspending and/or cancelling the license to
recruit of AIBC and the accreditation of B & R issued by POEA; (2) the claimants failed to establish that they are entitled to the claims
which are not based on the overseas employment contracts nor the
o. Penalty for violations of Article 34 (prohibited practices), not Amiri Decree No. 23 of 1976;
excluding reportorial requirements thereof.
(3) that the POEA Administrator has no jurisdiction over claims for
Eight: — Whether or not the POEA Administrator erred in not moral and exemplary damages and nonetheless, the basis for granting
dismissing POEA Case No. (L) 86-65-460 on the ground of said damages was not established;
multiplicity of suits (G.R. Nos. 104911-14, Rollo, pp. 25-29, 51-55).
(4) that the claims for salaries corresponding to the unexpired portion
Anent the first issue, NLRC set aside Section 1, Rule 129 of the 1989 of their contract may be allowed if filed within the three-year
Revised Rules on Evidence governing the pleading and proof of a prescriptive period;
foreign law and admitted in evidence a simple copy of the Bahrain’s
Amiri Decree No. 23 of 1976 (Labour Law for the Private Sector). (5) that the allegation that complainants were prematurely repatriated
NLRC invoked Article 221 of the Labor Code of the Philippines, prior to the expiration of their overseas contract was not established;
vesting on the Commission ample discretion to use every and all and
reasonable means to ascertain the facts in each case without regard to
the technicalities of law or procedure. NLRC agreed with the POEA (6) that the POEA Administrator has no jurisdiction over the
Administrator that the Amiri Decree No. 23, being more favorable complaint for the suspension or cancellation of the AIBC’s
and beneficial to the workers, should form part of the overseas recruitment license and the cancellation of the accreditation of BRII.
employment contract of the complainants.
15
NLRC passed sub silencio the last issue, the claim that POEA Case not the one prescribed by Article 1144 of the Civil Code of the
No. (L) 86-65-460 should have been dismissed on the ground that the Philippines (ten years); and
claimants in said case were also claimants in POEA Case No. (L) 84-
06-555. Instead of dismissing POEA Case No. (L) 86-65-460, the (5) that they are not concerned with the issue of whether POEA Case
POEA just resolved the corresponding claims in POEA Case No. (L) No. L-86-05-460 should be dismissed, this being a private quarrel
84-06-555. In other words, the POEA did not pass upon the same between the two labor lawyers (Rollo, pp. 292-305).
claims twice.
Attorney’s Lien
V
On November 12, 1992, Atty. Gerardo A. del Mundo moved to strike
out the joint manifestations and motions of AIBC and BRII dated
G.R. No. 104776 September 2 and 11, 1992, claiming that all the claimants who
entered into the compromise agreements subject of said
Claimants in G.R. No. 104776 based their petition for certiorari on manifestations and motions were his clients and that Atty. Florante
the following grounds:chanrob1es virtual 1aw library M. de Castro had no right to represent them in said agreements. He
also claimed that the claimants were paid less than the award given
(1) that they were deprived by NLRC and the POEA of their right to them by NLRC; that Atty. De Castro collected additional attorney’s
a speedy disposition of their cases as guaranteed by Section 16, fees on top of the 25% which he was entitled to receive; and that the
Article III of the 1987 Constitution. The POEA Administrator consent of the claimants to the compromise agreements and
allowed private respondents to file their answers in two years (on quitclaims were procured by fraud (G.R. No. 104776, Rollo, pp. 838-
June 19, 1987) after the filing of the original complaint (on April 2, 810). In the Resolution dated November 23, 1992, the Court denied
1985) and NLRC, in total disregard of its own rules, affirmed the the motion to strike out the Joint Manifestations and Motions dated
action of the POEA Administrator; September 2 and 11, 1992 (G.R. No. 104911-14, Rollo, pp. 608-609).

(2) that NLRC and the POEA Administrator should have declared On December 14, 1992, Atty. Del Mundo filed a "Notice and Claim
AIBC and BRII in default and should have rendered summary to Enforce Attorney’s Lien," alleging that the claimants who entered
judgment on the basis of the pleadings and evidence submitted by into compromise agreements with AIBI and BRII with the assistance
claimants; of Atty. De Castro, had all signed a retainer agreement with his law
firm (G.R. No. 104776, Rollo, pp. 623-624; 838-1535).
(3) the NLRC and POEA Administrator erred in not holding that the
labor cases filed by AIBC and BRII cannot be considered a class suit; Contempt of Court

(4) that the prescriptive period for the filing of the claims is ten years; On February 18, 1993, an omnibus motion was filed by Atty. Del
and Mundo to cite Atty. De Castro and Atty. Katz Tierra for contempt of
court and for violation of Canons 1, 15 and 16 of the Code of
(5) that NLRC and the POEA Administrator should have dismissed Professional Responsibility. The said lawyers allegedly misled this
POEA Case No. L-86-05-460, the case filed by Atty. Florante de Court, by making it appear that the claimants who entered into the
Castro (Rollo, pp. 31-40). compromise agreements were represented by Atty. De Castro, when
in fact they were represented by Atty. Del Mundo (G.R. No. 104776,
AIBC and BRII, commenting on the petition in G.R. No. 104776, Rollo, pp. 1560-1614).
argued:chanrob1es virtual 1aw library
On September 23, 1994, Atty. Del Mundo reiterated his charges
(1) that they were not responsible for the delay in the disposition of against Atty. De Castro for unethical practices and moved for the
the labor cases, considering the great difficulty of getting all the voiding of the quitclaims submitted by some of the claimants.
records of the more than 1,500 claimants, the piece-meal filing of the
complaints and the addition of hundreds of new claimants by G.R. Nos. 104911-14
petitioners;
The claimants in G.R. Nos. 104911-14 based their petition
(2) that considering the number of complaints and claimants, it was for certiorari on the grounds that NLRC gravely abused its discretion
impossible to prepare the answers within the ten-day period provided when it: (1) applied the three-year prescriptive period under the
in the NLRC Rules, that when the motion to declare AIBC in default Labor Code of the Philippines; and (2) it denied the claimant’s
was filed on July 19, 1987, said party had already filed its answer, formula based on an average overtime pay of three hours a day
and that considering the staggering amount of the claims (more than (Rollo, pp. 18-22).
US$50,000,000.00) and the complicated issues raised by the parties,
the ten-day rule to answer was not fair and reasonable; The claimants argue that said method was proposed by BRII itself
during the negotiation for an amicable settlement of their money
(3) that the claimants failed to refute NLRC’s finding that there was claims in Bahrain as shown in the Memorandum dated April 16, 1983
no common or general interest in the subject matter of the of the Ministry of Labor of Bahrain (Rollo, pp. 21-22).
controversy — which was the applicability of the Amiri Decree No.
23. Likewise, the nature of the claims varied, some being based on BRII and AIBC, in their Comment, reiterated their contention in G.R.
salaries pertaining to the unexpired portion of the contracts while No. 104776 that the prescriptive period in the Labor Code of the
others being for pure money claims. Each claimant demanded Philippines, a special law, prevails over that provided in the Civil
separate claims peculiar only to himself and depending upon the Code of the Philippines, a general law.
particular circumstances obtaining in his case;
As to the memorandum of the Ministry of Labor of Bahrain on the
(4) that the prescriptive period for filing the claims is that prescribed method of computing the overtime pay, BRII and AIBC claimed that
by Article 291 of the Labor Code of the Philippines (three years) and they were not bound by what appeared therein, because such
16
memorandum was proposed by a subordinate Bahrain official and Hence, premises considered, the applicable law of prescription to this
there was no showing that it was approved by the Bahrain Minister of instant case is Article 1144 of the Civil Code of the Philippines,
Labor. Likewise, they claimed that the averaging method was which provides:chanrob1es virtual 1aw library
discussed in the course of the negotiation for the amicable settlement
of the dispute and any offer made by a party therein could not be used ‘Art. 1144. The following actions may be brought within ten years
as an admission by him (Rollo, pp. 228-236). from the time the cause of action accrues:chanrob1es virtual 1aw
library
G.R. Nos. 105029-32
(1) Upon a written contract;
In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC gravely
abused its discretion when it: (1) enforced the provisions of the Amiri (2) Upon an obligation created by law;’
Decree No. 23 of 1976 and not the terms of the employment
contracts; (2) granted claims for holiday, overtime and leave Thus, herein money claims of the complainants against the
indemnity pay and other benefits, on evidence admitted in respondents shall prescribe in ten years from August 16, 1976.
contravention of petitioner’s constitutional right to due process; and Inasmuch as all claims were filed within the ten-year prescriptive
(3) ordered the POEA Administrator to hold new hearings for the 683 period, no claim suffered the infirmity of being prescribed" (G.R. No.
claimants whose claims had been dismissed for lack of proof by the 104776, Rollo, 89-90).
POEA Administrator or NLRC itself. Lastly, they allege that
assuming that the Amiri Decree No. 23 of 1976 was applicable, In overruling the POEA Administrator, and holding that the
NLRC erred when it did not apply the one-year prescription provided prescriptive period is three years as provided in Article 291 of the
in said law (Rollo, pp. 29-30). Labor Code of the Philippines, the NLRC argued as
follows:jgc:chanrobles.com.ph
VI
"The Labor Code provides that ‘all money claims arising from
employer-employee relations . . . shall be filed within three years
G.R. No. 104776 from the time the cause of action accrued; otherwise they shall be
forever barred’ (Art. 291, Labor Code, as amended). This three-year
G.R. Nos. 104911-14 prescriptive period shall be the one applied here and which should be
reckoned from the date of repatriation of each individual
G.R. Nos. 105029-32 complainant, considering the fact that the case is having (sic) filed in
this country. We do not agree with the POEA Administrator that this
All the petitions raise the common issue of prescription although they three-year prescriptive period applies only to money claims
disagreed as to the time that should be embraced within the specifically recoverable under the Philippine Labor Code. Article 291
prescriptive period. gives no such indication. Likewise, We can not consider
complainants’ cause/s of action to have accrued from a violation of
To the POEA Administrator, the prescriptive period was ten years, their employment contracts. There was no violation; the claims arise
applying Article 1144 of the Civil Code of the Philippines. NLRC from the benefits of the law of the country where they worked. (G.R.
believed otherwise, fixing the prescriptive period at three years as No. 104776, Rollo, pp. 90-91).
provided in Article 291 of the Labor Code of the Philippines.
Anent the applicability of the one-year prescriptive period as
The claimants in G.R. No. 104776 and G.R. Nos. 104911-14, provided by the Amiri Decree No. 23 of 1976, NLRC opined that the
invoking different grounds, insisted that NLRC erred in ruling that applicability of said law was one of characterization, i.e., whether to
the prescriptive period applicable to the claims was three years, characterize the foreign law on prescription or statute of limitation as
instead of ten years, as found by the POEA Administrator. "substantive" or "procedural." NLRC cited the decision in Bournias
v. Atlantic Maritime Company (220 F. 2d. 152, 2d Cir. [1955], where
The Solicitor General expressed his personal view that the the issue was the applicability of the Panama Labor Code in a case
prescriptive period was one year as prescribed by the Amiri Decree filed in the State of New York for claims arising from said Code. In
No. 23 of 1976 but he deferred to the ruling of NLRC that Article 291 said case, the claims would have prescribed under the Panamanian
of the Labor Code of the Philippines was the operative law. Law but not under the Statute of Limitations of New York. The U.S.
Circuit Court of Appeals held that the Panamanian Law was
The POEA Administrator held the view that:jgc:chanrobles.com.ph procedural as it was not "specifically intended to be substantive,"
hence, the prescriptive period provided in the law of the forum should
"These money claims (under Article 291 of the Labor Code) refer to apply. The Court observed:jgc:chanrobles.com.ph
those arising from the employer’s violation of the employee’s right as
provided by the Labor Code. ". . . And where, as here, we are dealing with a statute of limitations
of a foreign country, and it is not clear on the face of the statute that
In the instant case, what the respondents violated are not the rights of its purpose was to limit the enforceability, outside as well as within
the workers as provided by the Labor Code, but the provisions of the the foreign country concerned, of the substantive rights to which the
Amiri Decree No. 23 issued in Bahrain, which ipso facto amended statute pertains, we think that as a yardstick for determining whether
the worker’s contracts of employment. Respondents consciously that was the purpose this test is the most satisfactory one. It does not
failed to conform to these provisions which specifically provide for lead American courts into the necessity of examining into the
the increase of the worker’s rate. It was only after June 30, 1983, four unfamiliar peculiarities and refinements of different foreign legal
months after the brown builders brought a suit against B & R in systems. . ."cralaw virtua1aw library
Bahrain for this same claim, when respondent AIBC’s contracts have
undergone amendments in Bahrain for the new hires/renewals The court further noted:chanrob1es virtual 1aw library
(Respondent’s Exhibit 7).
x       x       x
17
American court applied the statute of limitations of New York,
instead of the Panamanian law, after finding that there was no
"Applying that test here it appears to us that the libelant is entitled to showing that the Panamanian law on prescription was intended to be
succeed, for the respondents have failed to satisfy us that the substantive. Being considered merely a procedural law even in
Panamanian period of limitation in question was specifically aimed Panama, it has to give way to the law of the forum on prescription of
against the particular rights which the libelant seeks to enforce. The actions.
Panama Labor Code is a statute having broad objectives, viz: ‘The
present Code regulates the relations between capital and labor, However, the characterization of a statute into a procedural or
placing them on a basis of social justice, so that, without injuring any substantive law becomes irrelevant when the country of the forum
of the parties, there may be guaranteed for labor the necessary has a "borrowing statute." Said statute has the practical effect of
conditions for a normal life and to capital an equitable return to its treating the foreign statute of limitation as one of substance
investment.’ In pursuance of these objectives the Code gives laborers (Goodrich, Conflict of Laws 152-153 [1938]). A "borrowing statute"
various rights against their employers. Article 623 establishes the directs the state of the forum to apply the foreign statute of
period of limitation for all such rights, except certain ones which are limitations to the pending claims based on a foreign law (Siegel,
enumerated in Article 621. And there is nothing in the record to Conflicts 183 [1975]). While there are several kinds of "borrowing
indicate that the Panamanian legislature gave special consideration to statutes," one from provides that an action barred by the laws of the
the impact of Article 623 upon the particular rights sought to be place where it accrued, will not be enforced in the forum even though
enforced here, as distinguished from the other rights to which that the local statute has not run against it (Goodrich and Scoles, Conflict
Article is also applicable. Were we confronted with the question of of Laws 152-153 [1938]). Section 48 of our Code of Civil Procedure
whether the limitation period of Article 621 (which carves out is of this kind. Said Section provides:jgc:chanrobles.com.ph
particular rights to be governed by a shorter limitation period) is to be
regarded as ‘substantive’ or ‘procedural’ under the rule of ‘specifity’ "If by the laws of the state or country where the cause of action arose,
we might have a different case; but here on the surface of things we the action is barred, it is also barred in the Philippines Islands."cralaw
appear to be dealing with a ‘broad,’ and not a ‘specific,’ statute of virtua1aw library
limitations" (G.R. No. 104776, Rollo, pp. 92-94).
Section 48 has not been repealed or amended by the Civil Code of the
Claimants in G.R. Nos. 104911-14 are of the view that Article 291 of Philippines. Article 2270 of said Code repealed only those provisions
the Labor Code of the Philippines, which was applied by NLRC, of the Code of Civil Procedures as to which were inconsistent with it.
refers only to claims "arising from the employer’s violation of the There is no provision in the Civil Code of the Philippines, which is
employee’s right as provided by the Labor Code." They assert that inconsistent with or contradictory to Section 48 of the Code of Civil
their claims are based on the violation of their employment contracts, Procedure (Paras, Philippine Conflict of Laws 104 [7th ed.]).
as amended by the Amiri Decree No. 23 of 1976 and therefore the
claims may be brought within ten years as provided by Article 1144 In the light of the 1987 Constitution, however, Section 48 cannot be
of the Civil Code of the Philippines (Rollo, G.R. Nos. 104911-14, pp. enforced ex proprio vigore insofar as it ordains the application in this
18-21). To bolster their contention, they cite PALEA v. Philippine jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.
Airlines, Inc., 70 SCRA 244 (1976).
The courts of the forum will not enforce any foreign claim obnoxious
AIBC and BRII, insisting that the actions on the claims have to the forum’s public policy (Canadian Northern Railway Co. v.
prescribed under the Amiri Decree No. 23 of 1976, argue that there is Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce
in force in the Philippines a "borrowing law," which is Section 48 of the one-year prescriptive period of the Amiri Decree No. 23 of 1976
the Code of Civil Procedure and that where such kind of law exists, it as regards the claims in question would contravene the public policy
takes precedence over the common-law conflicts rule (G.R. No. on the protection to labor.
104776, Rollo, pp. 45-46).
In the Declaration of Principles and State Policies, the 1987
First to be determined is whether it is the Bahrain law on prescription Constitution emphasized that:jgc:chanrobles.com.ph
of action based on the Amiri Decree No. 23 of 1976 or a Philippine
law on prescription that shall be the governing law. "The state shall promote social justice in all phases of national
development" (Sec. 10).
Article 156 of the Amiri Decree No. 23 of 1976
provides:jgc:chanrobles.com.ph "The state affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare" (Sec. 18).
"A claim arising out of a contract of employment shall not be
actionable after the lapse of one year from the date of the expiry of In article XIII on Social Justice and Human Rights, the 1987
the contract" (G.R. Nos. 105029-31, Rollo, p. 226). Constitution provides:jgc:chanrobles.com.ph

As a general rule, a foreign procedural law will not be applied in the "Sec. 3. The State shall afford full protection to labor, local and
forum. Procedural matters, such as service of process, joinder of overseas, organized and unorganized, and promote full employment
actions, period and requisites for appeal, and so forth, are governed and equality of employment opportunities for all."cralaw virtua1aw
by the laws of the forum. This is true even if the action is based upon library
a foreign substantive law (Restatement of the Conflict of Laws, Sec.
685; Salonga, Private International Law 131 [1979]). Having determined that the applicable law on prescription is the
Philippine law, the next question is whether the prescriptive period
A law on prescription of actions is sui generis in Conflict of Laws in governing the filing of the claims is three years, as provided by the
the sense that it may be viewed either as procedural or substantive, Labor Code or ten years, as provided by the Civil Code of the
depending on the characterization given such a law. Philippines.

Thus in Bournias v. Atlantic Maritime Company, supra, the The claimants are of the view that the applicable provision is Article
18
1144 of the Civil Code of the Philippines, which The contention of the POEA Administrator, that the three-year
provides:jgc:chanrobles.com.ph prescriptive period under Article 291 of the Labor Code of the
Philippines applies only to money claims specifically recoverable
"The following actions must be brought within ten years from the under said Code does not find support in the plain language of the
right of action accrues:chanrob1es virtual 1aw library provision. Neither is the contention of the claimants in G.R. No.
104911-14 that said Article refers only to claims "arising from the
(1) Upon a written contract; employer’s violation of the employee’s right," as provided by the
Labor Code supported by the facial reading of the provision.
(2) Upon an obligation created by law;
VII
(3) Upon a judgment."cralaw virtua1aw library

NLRC, on the other hand, believes that the applicable provision is G.R. No. 104776
Article 291 of the Labor Code of the Philippines, which in pertinent
part provides:jgc:chanrobles.com.ph A. As the first two grounds for the petition in G.R. No. 104776,
claimants aver: (1) that while their complaints were filed on June 6,
"Money claims-all money claims arising from employer-employee 1984 with POEA, the case was decided only on January 30, 1989, a
relations accruing during the effectivity of this Code shall be filed clear denial of their right to a speedy disposition of the case; and (2)
within three (3) years from the time the cause of action accrued, that NLRC and the POEA Administrator should have declared AIBC
otherwise they shall be forever barred. and BRII in default (Rollo, pp. 31-35).

x       x       x" Claimants invoke a new provision incorporated in the 1987

Constitution, which provides:jgc:chanrobles.com.ph
The case of Philippine Air Lines Employees Association v.
Philippine Air Lines, Inc., 70 SCRA (1976) invoked by the claimants "Sec. 16. All persons shall have the right to a speedy disposition of
in G.R. Nos. 104911-14 is inapplicable to the cases at bench (Rollo, their cases before all judicial, quasi-judicial, or administrative
p. 21). The said case involved the correct computation of overtime bodies."cralaw virtua1aw library
pay as provided in the collective bargaining agreements and not the
Eight-Hour Labor Law. It is true that the constitutional right to "a speedy disposition of cases"
is not limited to the accused in criminal proceedings but extends to all
As noted by the Court: "That is precisely why petitioners did not parties in all cases, including civil and administrative cases, and in all
make any reference as to the computation for overtime work under proceedings, including judicial and quasi-judicial hearings. Hence,
the Eight-Hour Labor Law (Secs. 3 and 4, CA No. 494) and instead under the Constitution, any party to a case may demand expeditious
insisted that work computation provided in the collective bargaining action on all officials who are tasked with the administration of
agreements between the parties be observed. Since the claim for pay justice.
differentials is primarily anchored on the written contracts between
the litigants, the ten-year prescriptive period provided by Art. 1144(1) However, as held in Caballero v. Alfonso, Jr., 153 SCRA 153 (1987),
of the New Civil Code should govern."cralaw virtua1aw library "speedy disposition of cases" is a relative term. Just like the
constitutional guarantee of "speedy trial" accorded to the accused in
Section 7-a of the Eight-Hour Labor Law (CA No. 444 as amended all criminal proceedings, "speedy disposition of cases" is a flexible
by R.A. No. 19933) provides:jgc:chanrobles.com.ph concept. It is consistent with delays and depends upon the
circumstances of each case. What the Constitution prohibits are
"Any action to enforce any cause of action under this Act shall be unreasonable, arbitrary and oppressive delays which render rights
commenced within three years after the cause of action accrued nugatory.
otherwise such action shall be forever barred, . . ."cralaw virtua1aw
library Caballero laid down the factors that may be taken into consideration
in determining whether or not the right to a "speedy disposition of
The court further explained:jgc:chanrobles.com.ph cases" has been violated, thus:jgc:chanrobles.com.ph

"The three-year prescriptive period fixed in the Eight-Hour Labor "In the determination of whether or not the right to a "speedy trial"
Law (CA No. 444 as amended) will apply, if the claim for has been violated, certain factors may be considered and balanced
differentials for overtime work is solely based on said law, and not on against each other. These are length of delay, reason for the delay,
a collective bargaining agreement or any other contract. In the instant assertion of the right or failure to assert it, and prejudice caused by
case, the claim for overtime compensation is not so much because of the delay. The same factors may also be considered in answering
Commonwealth Act No. 444, as amended but because the claim is judicial inquiry whether or not a person officially charged with the
demandable right of the employees, by reason of the above- administration of justice has violated the speedy disposition of
mentioned collective bargaining agreement."cralaw virtua1aw library cases."cralaw virtua1aw library

Section 7-a of the Eight-Hour Labor Law provides the prescriptive Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298, (1991), we
period for filing "actions to enforce any cause of action under said held:jgc:chanrobles.com.ph
law." On the other hand, Article 291 of the Labor Code of the
Philippines provides the prescriptive period for filing "money claims "It must be here emphasized that the right to a speedy disposition of a
arising from employer-employee relations." The claim is the cases at case, like the right to speedy trial, is deemed violated only when the
bench all arose from the employer-employee relations, which is proceeding is attended by vexatious, capricious, and oppressive
broader in scope than claims arising from a specific law or from the delays; or when unjustified postponements of the trial are asked for
collective bargaining agreement. and secured, or when without cause or justified motive a long period
of time is allowed to elapse without the party having his case
19
tried."cralaw virtua1aw library complaint from the records for failure of claimants to submit a proper
bill of particulars. While the POEA Administrator denied the motion
Since July 25, 1984 or a month after AIBC and BRII were served to strike out the complaint, he ordered the claimants "to correct the
with a copy of the amended complaint, claimants had been asking deficiencies" pointed out by AIBC.
that AIBC and BRII be declared in default for failure to file their
answers within the ten-day period provided in Section 1, Rule III of Before an intelligent answer could be filed in response to the
Book VI of the Rules and Regulations of the POEA. At that time, complaint, the records of employment of the more than 1,700
there was a pending motion of AIBC and BRII to strike out of the claimants had to be retrieved from various countries in the Middle
records the amended complaint and the "Compliance" of claimants to East. Some of the records dated as far back as 1975.
the order of the POEA, requiring them to submit a bill of particulars.
The hearings on the merits of the claims before the POEA
The cases at bench are not of the run-of-the-mill variety, such that Administrator were interrupted several times by the various appeals,
their final disposition in the administrative level after seven years first to NLRC and then to the Supreme Court.
from their inception, cannot be said to be attended by unreasonable,
arbitrary and oppressive delays as to violate the constitutional rights Aside from the inclusion of additional claimants, two new cases were
to a speedy disposition of the cases of complainants. filed against AIBC and BRII on October 10, 1985 (POEA Cases No.
L-85-10-777 and L-85-10-779). Another complaint was filed on May
The amended complaint filed on June 6, 1984 involved a total of 29, 1986 (POEA Case No. L-86-05- 460). NLRC, in exasperation,
1,767 claimants. Said complaint had undergone several amendments, noted that the exact number of claimants had never been completely
the first being on April 3, 1985. established (Resolution, Sept. 2, 1991, G.R. No. 104776, Rollo, p.
57). All the three new cases were consolidated with POEA Case No.
The claimants were hired on various dates from 1975 to 1983. They L-84-06-555.
were deployed in different areas, one group in and the other groups
outside of, Bahrain. The monetary claims totalling more than US$65 NLRC blamed the parties and their lawyers for the delay in
million according to Atty. Del Mundo, terminating the proceedings, thus:jgc:chanrobles.com.ph
included:jgc:chanrobles.com.ph
"These cases could have been spared the long and arduous route
"1. Unexpired portion of contract; towards resolution had the parties and their counsel been more
interested in pursuing the truth and the merits of the claims rather
2. Interest earnings of Travel and Fund; than exhibiting a fanatical reliance on technicalities. Parties and
counsel have made these cases a litigation of emotion. The
3. Retirement and Savings Plan benefit; intransigence of parties and counsel is remarkable. As late as last
month, this Commission made a last and final attempt to bring the
4. War Zone bonus or premium pay of at least 100% of basic pay; counsel of all the parties (this Commission issued a special order
directing respondent Brown & Root’s resident agent/s to appear) to
5. Area Differential pay; come to a more conciliatory stance. Even this failed" (Rollo, p. 58).

6. Accrued Interest of all the unpaid benefits; The squabble between the lawyers of claimants added to the delay in
the disposition of the cases, to the lament of NLRC, which
7. Salary differential pay; complained:jgc:chanrobles.com.ph

8. Wage Differential pay; "It is very evident from the records that the protagonists in these
consolidated cases appear to be not only the individual complainants,
9. Refund of SSS premiums not remitted to Social Security System; on the one hand, and AIBC and Brown & Root, on the other hand.
The two lawyers for the complainants, Atty. Gerardo Del Mundo and
10. Refund of Withholding Tax not remitted to Bureau of Internal Atty. Florante De Castro, have yet to settle the right of representation,
Revenue (B.I.R.); each one persistently claiming to appear in behalf of most of the
complainants. As a result, there are two appeals by the complainants.
11. Fringe Benefits under Brown & Root’s "A Summary of Attempts by this Commission to resolve counsels’ conflicting claims
Employees Benefits consisting of 43 pages (Annex "Q" of Amended of their respective authority to represent the complainants prove
Complaint); futile. The bickerings by these two counsels are reflected in their
pleadings. In the charges and countercharges of falsification of
12. Moral and Exemplary Damages; documents and signatures, and in the disbarment proceedings by one
against the other. All these have, to a large extent, abetted in
13. Attorney’s fees of at least ten percent of amounts; confounding the issues raised in these cases, jumble the presentation
of evidence, and even derailed the prospects of an amicable
14. Other reliefs, like suspending and/or cancelling the license to settlement. It would not be far-fetched to imagine that both counsel,
recruit of AIBC and issued by the POEA; and unwittingly, perhaps, painted a rainbow for the complainants, with
the proverbial pot of gold at its end containing more than US$100
15. Penalty for violation of Article 34 (Prohibited practices) not million, the aggregate of the claims in these cases. It is, likewise, not
excluding reportorial requirements thereof" (NLRC Resolution, improbable that their misplaced zeal and exuberance caused them to
September 2, 1991, pp. 18-19; G.R. No. 104776, Rollo, pp. 73-74). throw all caution to the wind in the matter of elementary rules of
procedure and evidence" (Rollo, pp. 58-59).
Inasmuch as the complaint did not allege with sufficient definiteness
and clarity of some facts, the claimants were ordered to comply with Adding to the confusion in the proceedings before NLRC, is the
the motion of AIBC for a bill of particulars. When claimants filed listing of some of the complainants in both petitions filed by the two
their "Compliance and Manifestation," AIBC moved to strike out the lawyers. As noted by NLRC, "the problem created by this situation is
20
that if one of the two petitions is dismissed, then the parties and the The Anti-Forum shopping Rule (Revised Circular No. 28-91) is
public respondents would not know which claim of which petitioner intended to put a stop to the practice of some parties of filing multiple
was dismissed and which was not."cralaw virtua1aw library petitions and complaints involving the same issues, with the result
that the courts or agencies have to resolve the same issues. Said Rule
B. Claimants insist that all their claims could properly be however, applies only to petitions filed with the Supreme Court and
consolidated in a "class suit" because "all the name complainants the Court of Appeals. It is entitled "Additional Requirements For
have similar money claims and similar rights sought irrespective of Petitions Filed with the Supreme Court and the Court of Appeals To
whether they worked in Bahrain, United Arab Emirates or in Abu Prevent Forum Shopping or Multiple Filing of Petitioners and
Dhabi, Libya or in any part of the Middle East" (Rollo, pp. 35-38). Complainants." The first sentence of the circular expressly states that
said circular applies to an governs the filing of petitions in the
A class suit is proper where the subject matter of the controversy is Supreme Court and the Court of Appeals.
one of common or general interest to many and the parties are so
numerous that it is impracticable to bring them all before the court While Administrative Circular No. 04-94 extended the application of
(Revised Rules of Court, Rule 3, Sec. 12). the anti-forum shopping rule to the lower courts and administrative
agencies, said circular took effect only on April 1, 1994.
While all the claims are for benefits granted under the Bahrain Law,
many of the claimants worked outside Bahrain. Some of the POEA and NLRC could not have entertained the complaint for
claimants were deployed in Indonesia and Malaysia under different unethical conduct against Atty. De Castro because NLRC and POEA
terms and conditions of employment. have no jurisdiction to investigate charges of unethical conduct of
lawyers.
NLRC and the POEA Administrator are correct in their stance that
inasmuch as the first requirement of a class suit is not present Attorney’s Lien
(common or general interest based on the Amiri Decree of the State
of Bahrain), it is only logical that only those who worked in Bahrain The "Notice and Claim to Enforce Attorney’s Lien" dated December
shall be entitled to file their claims in a class suit. 14, 1992 was filed by Atty. Gerardo A. Del Mundo to protect his
claim for attorney’s fees for legal services rendered in favor of the
While there are common defendants (AIBC and BRII) and the nature claimants (G.R. No. 104776, Rollo, pp. 838-810; 1525).
of the claims is the same (for employee’s benefits), there is no
common question of law or fact. While some claims are based on the A statement of a claim for a charging lien shall be filed with the court
Amiri Law of Bahrain, many of the claimants never worked in that or administrative agency which renders and executes the money
country, but were deployed elsewhere. Thus, each claimant is judgment secured by the lawyer for his clients. The lawyer shall
interested only in his own demand and not in the claims of the other cause written notice thereof to be delivered to his clients and to the
employees of defendants. The named claimants have a special or adverse party (Revised Rules of court, Rule 138, Sec. 37). The
particular interest in specific benefits completely different from the statement of the claim for the charging lien of Atty. Del Mundo
benefits in which the other named claimants and those included as should have been filed with the administrative agency that rendered
members of a "class" are claiming (Berses v. Villanueva, 25 Phil. 473 and executed the judgment.
[1913]). It appears that each claimant is only interested in collecting
his own claims. A claimants has no concern in protecting the interests Contempt of Court
of the other claimants as shown by the fact, that hundreds of them
have abandoned their co-claimants and have entered into separate The complaint of Atty. Gerardo A. Del Mundo to cite Atty. Florante
compromise settlements of their respective claims. A principle basic De Castro and Atty. Katz Tierra for violation of the Code of
to the concept of "class suit" is that plaintiffs brought on the record Professional Responsibility should be filed in a separate and
must fairly represent and protect the interests of the others appropriate proceeding.
(Dimayuga v. Court of Industrial Relations, 101 Phil. 590 [1957]).
For this matter, the claimants who worked in Bahrain can not be G.R. No. 104911-14
allowed to sue in a class suit in a judicial proceeding. The most that
can be accorded to them under the Rules of Court is to be allowed to Claimants charge NLRC with grave abuse of discretion in not
join as plaintiffs in one complaint (Revised Rules of Court, Rule 3, accepting their formula of "Three Hours Average Daily Overtime" in
Sec. 6). computing the overtime payments. They claim that it was BRII itself
which proposed the formula during the negotiations for the settlement
The Court is extra-cautious in allowing class suits because they are of their claims in Bahrain and therefore it is in estoppel to disclaim
the exceptions to the condition sine qua non, requiring the joinder of said offer (Rollo, pp. 21-22).
all indispensable parties.
Claimants presented a Memorandum of the Ministry of Labor of
In an improperly instituted class suit, there would be no problem if Bahrain dated April 16, 1983, which in pertinent part
the decision secured is favorable to the plaintiffs. The problem arises states:jgc:chanrobles.com.ph
when the decision is adverse to them, in which case the others who
were impleaded by their self-appointed representatives, would surely "After the perusal of the memorandum of the Vice President and the
claim denial of due process. Area Manager, Middle East, of Brown & Root Co. and the Summary
of the compensation offered by the Company to the employees in
C. The claimants in G.R. No. 104776 also urged that the POEA respect of the difference of pay of the wages of the overtime and the
Administrator and NLRC should have declared Atty. Florante De difference of vacation leave and the perusal of the documents
Castro guilty of "forum shopping, ambulance chasing activities, attached thereto e.e.., minutes of the meetings between the
falsification, duplicity and other unprofessional activities" and his Representative of the employees and the management of the
appearances as counsel for some of the claimants as illegal (Rollo, Company, the complaint filed by the employees on 14/2/83 where
pp. 38-40). they have claimed as hereinabove stated, sample of the Service
Contract executed between one of the employees and the company
21
through its agent in (sic) Philippines, Asia International Builders the host country are more favorable and beneficial to the workers,
Corporation where it has been provided for 48 hours of work per then the laws of the host country shall form part of the overseas
week and annual leave of 12 days and an overtime wage of 1 & 1/4 of employment contract." It quoted with approval the observation of the
the normal hourly wage. POEA Administrator that." . . in labor proceedings, all doubts in the
implementation of the provisions of the Labor Code and its
x       x       x implementing regulations shall be resolved in favor of labor" (Rollo,
pp. 90-94).

The Company in its computation reached the following AIBC and BRII claim that NLRC acted capriciously and whimsically
averages:chanrob1es virtual 1aw library when it refused to enforce the overseas-employment contracts, which
became the law of the parties. They contend that the principle that a
A. 1. The average duration of the actual service of the employee is 35 law is deemed to be a part of a contract applies only to provisions of
months for the Philippino (sic) employees . . . . Philippine law in relation to contracts executed in the Philippines.

2. The average wage per hour for the Philippino (sic) employee is The overseas-employment contracts, which were prepared by AIBC
US$2.69 . . . . and BRII themselves, provided that the laws of the host country
became applicable to said contracts if they offer terms and conditions
3. The average hours for the overtime is 3 hours plus in all public more favorable that those stipulated therein. It was stipulated in said
holidays and weekends. contracts that:

4. Payment of US$8.72 per months (sic) of service as compensation "The Employee agrees that while in the employ of the Employer, he
for the difference of the wages of the overtime done for each will not engage in any other business or occupation, nor seek
Philippino (sic) employee . . . (Rollo, p.22). employment with anyone other than the Employer; that he shall
devote his entire time and attention and his best energies, and abilities
BRII and AIBC countered: (1) that the Memorandum was not to the performance of such duties as may be assigned to him by the
prepared by them but by a subordinate official in the Bahrain Employer; that he shall at all times be subject to the direction and
Department of Labor; (2) that there was no showing that the Bahrain control of the employer; and that the benefits provided to Employee
Minister of Labor had approved said memorandum; and (3) that the hereunder are substituted for and in lieu of all other benefits provided
offer was made in the course of the negotiation for an amicable by any applicable law, provided of course, that total remuneration
settlement of the claims and therefore it was not admissible in and benefits do not fall below that of the host country regulation or
evidence to prove that anything is due to the claimants. custom, it being understood that should applicable laws establish that
fringe benefits, or other such benefits additional to the compensation
While said document was presented to the POEA without observing herein agreed cannot be waived, Employee agrees that such
the rule on presenting official documents of a foreign government as compensation will be adjusted downward so that the total
provided in Section 24, Rule 132 of the 1989 Revised Rules on compensation hereunder, plus the non-waivable benefits shall be
Evidence, it can be admitted in evidence in proceedings before an equivalent to the compensation herein agreed" (Rollo, pp. 352-353).
administrative body. The opposing parties have a copy of the said
memorandum, and they could easily verify its authenticity and The overseas-employment contracts could have been drafted more
accuracy.chanrobles virtualawlibrary felicitously. While a part thereof provides that the compensation to
chanrobles.com:chanrobles.com.ph the employee may be "adjusted downward so that the total
computation (thereunder) plus the non-waivable benefits shall be
The admissibility of the offer of compromise made by BRII as equivalent to the compensation" therein agreed, another part of the
contained in the memorandum is another matter. Under Section 27, same provision categorically states "that total remuneration and
Rule 130 of the 1989 Revised Rules on Evidence, an offer to settle a benefits do not fall below that of the host country regulation and
claim is not an admission that anything is due. custom."cralaw virtua1aw library

Said Rule provides:jgc:chanrobles.com.ph Any ambiguity in the overseas-employment contracts should be

interpreted against AIBC and BRII, the parties that drafted it (Eastern
"Offer of compromise not admissible. — In civil cases, an offer of Shipping Lines, Inc. v. Margarine-Verkaufs-Union, 93 SCRA 257
compromise is not an admission of any liability, and is not admissible [1979]).
in evidence against the offeror."cralaw virtua1aw library
Article 1377 of the Civil Code of the Philippines
This Rule is not only a rule of procedure to avoid the cluttering of the provides:jgc:chanrobles.com.ph
record with unwanted evidence but a statement of public policy.
There is great public interest in having the protagonists settle their "The interpretation of obscure words or stipulations in a contract shall
differences amicable before those ripen into litigation. Every effort not favor the party who caused the obscurity."cralaw virtua1aw
must be taken to encourage them to arrive at a settlement. The library
submission of offers and counter-offers in the negotiation table is a
step in the right direction. But to bind a party to his offers, as what Said rule of interpretation is applicable to contracts of adhesion
claimants would make this Court do, would defeat the salutary where there is already a prepared form containing the stipulations of
purpose of the Rule. the employment contract and the employees merely "take it or leave
it." The presumption is that there was an imposition by one party
G.R. Nos. 105029-32 against the other and that the employees signed the contracts out of
necessity that reduced their bargaining power (Fieldmen’s Insurance
A. NLRC applied the Amiri Decree No. 23 of 1976, which provides Co., Inc. v. Songco, 25 SCRA 70 [1968]).
for greater benefits than those stipulated in the overseas-employment
contracts of the claimants. It was of the belief that "where the laws of Applying the said legal precepts, we read the overseas-employment
22
contracts in question as adopting the provisions of the Amiri Decree which means further delay in the termination of the case, NLRC
No. 23 of 1976 as part and parcel thereof. decided to pass upon the validity of the claims itself. It is this
procedure that AIBC and BRII complain of as being irregular and a
The parties to a contract may select the law by which it is to be "reversible error."cralaw virtua1aw library
governed (Cheshire, Private International Law, 187 [7th ed]). In such
a case, the foreign law is adopted as a "system" to regulate the They pointed out that NLRC took into consideration evidence
relations of the parties, including questions of their capacity to enter submitted on appeal, the same evidence which NLRC found to have
into the contract, the formalities to be observed by them, matters of been "unilaterally submitted by the claimants and not disclosed to the
performance, and so forth (16 Am Jur 2d, 150-161). adverse parties" (Rollo, pp. 37-39).

Instead of adopting the entire mass of the foreign law, the parties may NLRC noted that so many pieces of evidentiary matters were
just agree that specific provisions of a foreign statute shall be deemed submitted to the POEA administrator by the claimants after the cases
incorporated into their contract "as a set of terms." By such reference were deemed submitted for resolution and which were taken
to the provisions of the foreign law, the contract does not become a cognizance of by the POEA Administrator in resolving the cases.
foreign contract to be governed by the foreign law. The said law does While AIBC and BRII had no opportunity to refute said evidence of
not operate as a statute but as a set of contractual terms deemed the claimants before the POEA Administrator, they had all the
written in the contract (Anton, Private International Law 197 [1967]; opportunity to rebut said evidence and to present their counter-
Dicey and Morris, The Conflict of Laws 702-703, [8th ed.]). evidence before NLRC. As a matter of fact, AIBC and BRII
themselves were able to present before NLRC additional evidence
A basic policy of contract is to protect the expectation of the parties which they failed to present before the POEA Administrator.
(Reese, Choice of Law in Torts and Contracts, 16 Columbia Journal
of Transnational Law 1, 21 [1977]). Such party expectation is Under Article 221 of the Labor Code of the Philippines, NLRC is
protected by giving effect to the parties’ own choice of the applicable enjoined to "use every and all reasonable means to ascertain the facts
law (Fricke v. Isbrandtsen Co. Inc., 151 F. Supp. 465, 467 [1957]). in each case speedily and objectively and without regard to
The choice of law must, however, bear some relationship to the technicalities of law or procedure, all in the interest of due
parties or their transaction (Scoles and Hayes, conflict of Law 644- process."cralaw virtua1aw library
647 [1982]). there is no question that the contracts sought to be
enforced by claimants have a direct connection with the Bahrain law In deciding to resolve the validity of certain claims on the basis of the
because the services were rendered in that country. evidence of both parties submitted before the POEA Administrator
and NLRC, the latter considered that it was not expedient to remand
In Norse Management Co. (PTE) v. National Seamen Board, 117 the cases to the POEA Administrator for that would only prolong the
SCRA 486 (1982), the "Employment Agreement," between Norse already protracted legal controversies.
Management co. and the late husband of the private respondent,
expressly provided that in the event of illness or injury to the Even the Supreme Court has decided appealed cases on the merits
employee arising out of and in the course of his employment and not instead of remanding them to the trial court for the reception of
due to his own misconduct, "compensation shall be paid to employee evidence, where the same can be readily determined from the
in accordance with and subject to the limitation of the Workmen’s uncontroverted facts on record (Development Bank of the Philippines
Compensation Act of the Republic of the Philippines or the Worker’s v. Intermediate Appellate Court, 190 SCRA 653 [1990]; Pagdonsalan
Insurance Act of registry of the vessel, whichever is greater." Since v. National Labor Relations Commission, 127 SCRA 463 [1984]).
the laws of Singapore, the place of registry of the vessel in which the
late husband of private respondent served at the time of his death, C. AIBC and BRII charge NLRC with grave abuse of discretion
granted a better compensation package, we applied said foreign law when it ordered the POEA Administrator to hold new hearings for
in preference to the terms of the contract. 683 claimants listed in Annex D of the Resolution dated September 2,
1991 whose claims had been denied by the POEA Administrator "for
The case of Bagong Filipinas Overseas Corporation v. National lack of proof" and for 69 claimants listed in Annex E of the same
Labor Relations Commission, 135 SCRA 278 (1985), relied upon by Resolution, whose claims had been found by NLRC itself as not
AIBC and BRII is inapposite to the facts of the cases at bench. The "supported by evidence" (Rollo, pp. 41-45).
issue in that case was whether the amount of the death compensation
of a Filipino seaman should be determined under the shipboard NLRC based its ruling on Article 218 (c) of the Labor Code of the
employment contract executed in the Philippines or the Hongkong Philippines, which empowers it" [to] conduct investigation for the
law. Holding that the shipboard employment contract was determination of a question, matter or controversy, within its
controlling, the court differentiated said case from Norse jurisdiction, . . . ."cralaw virtua1aw library
Management Co. in that in the latter case there was an express
stipulation in the employment contract that the foreign law would be It is the posture of AIBC and BRII that NLRC has no authority under
applicable if it afforded greater compensation. Article 218(c) to remand a case involving claims which had already
been dismissed because such provision contemplates only situations
B. AIBC and BRII claim that they were denied by NLRC of their where there is still a question or controversy to be resolved (Rollo,
right to due process when said administrative agency granted Friday- pp. 41-42).chanrobles virtual lawlibrary
pay differential, holiday-pay differential, annual-leave differential
and leave indemnity pay to the claimants listed in Annex B of the A principle well embedded in Administrative Law is that the
Resolution. At first, NLRC reversed the resolution of the POEA technical rules of procedure and evidence do not apply to the
Administrator granting these benefits on a finding that the POEA proceedings conducted by administrative agencies (First Asian
Administrator failed to consider the evidence presented by AIBC and Transport & Shipping Agency Inc v. Ople, 142 SCRA 542 [1986];
BRII, that some findings of fact of the POEA Administrator were not Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219 [1987]).
supported by the evidence, and that some of the evidence were not This principle is enshrined in Article 221 of the Labor Code of the
disclosed to AIBC and BRII (Rollo, pp. 35-36; 106-107). But instead Philippines and is now the bedrock of proceedings before NLRC.
of remanding the case to the POEA Administrator for a new hearing,
23
Notwithstanding the non-applicability of technical rules of procedure real estate mortgages, 4 dated 17 February 1983 and 20 July 1984,
and evidence in administrative proceedings, there are cardinal rules over its parcels of land including improvements thereon, located at
which must be observed by the hearing officers in order to comply Barrio Sto. Cristo, San Jose Del Monte, Bulacan, and which are
with the due process requirements of the Constitution. These cardinal covered by Transfer Certificate of Title Nos. T-78759, T-78760, T-
rules are collated in Ang Tibay v. Court of Industrial Relations, 69 78761, T-78762 and T-78763.
Phil. 635 (1940).
Eventually, the corporate borrowers defaulted in the payment of the
The three petitions were filed under Rule 65 of the Revised Rules of restructured loans prompting petitioner BANTSA to file civil
Court on the grounds that NLRC had committed grave abuse of actions 5 before foreign courts for the collection of the principal loan,
discretion amounting to lack of jurisdiction in issuing the questioned to wit:
orders. We find no such abuse of discretion.

WHEREFORE, all the three petitions are DISMISSED. a) In England, in its High
Court of Justice, Queen's
SO ORDERED. Bench Division, Commercial
Court (1992-Folio No 2098)
against Liberian Transport
Navigation S.A., Eshley
G.R. No. 133876 December 29, 1999 Compania Naviera S.A., El
Challenger S.A., Espriona
BANK OF AMERICA, NT and SA, petitioner, Shipping Company S.A.,
vs. Eddie Navigation Corp.,
AMERICAN REALTY CORPORATION and COURT OF S.A., Eduardo Katipunan
APPEALS, respondents. Litonjua and Aurelio
Katipunan Litonjua on June
17, 1992.
 
b) In England, in its High
BUENA, J.: Court of Justice, Queen's
Bench Division, Commercial
Does a mortgage-creditor waive its remedy to foreclose the real estate Court (1992-Folio No. 2245)
mortgage constituted over a third party mortgagor's property situated against El Challenger S.A.,
in the Philippines by filing an action for the collection of the principal Espriona Shipping Company
loan before foreign courts? S.A., Eduardo Katipuan
Litonjua & Aurelio
Sought to be reversed in the instant petition for review Katipunan Litonjua on July 2,
on certiorari under Rule 45 of the Rules of Court are the decision 1 of 1992;
public respondent Court of Appeals in CA G.R. CV No. 51094,
promulgated on 30 September 1997 and its resolution, 2 dated 22 May c) In Hongkong, in the
1998, denying petitioner's motion for reconsideration. Supreme Court of Hongkong
High Court (Action No. 4039
Petitioner Bank of America NT & SA (BANTSA) is an international of 1992) against Eshley
banking and financing institution duly licensed to do business in the Compania Naviera S.A., El
Philippines, organized and existing under and by virtue of the laws of Challenger S.A., Espriona
the State of California, United States of America while private Shipping Company S.A.
respondent American Realty Corporation (ARC) is a domestic Pacific Navigators
corporation. Corporation, Eddie
Navigation Corporation S.A.,
Litonjua Chartering
Bank of America International Limited (BAIL), on the other hand, is (Edyship) Co., Inc., Aurelio
a limited liability company organized and existing under the laws of Katipunan Litonjua, Jr. and
England. Eduardo Katipunan Litonjua
on November 19, 1992; and
As borne by the records, BANTSA and BAIL on several occasions
granted three major multi-million United States (US) Dollar loans to d) In Hongkong, in the
the following corporate borrowers: (1) Liberian Transport Supreme Court of Hongkong
Navigation, S.A.; (2) El Challenger S.A. and (3) Eshley Compania High Court (Action No. 4040
Naviera S.A. (hereinafter collectively referred to as "borrowers"), all of 1992) against Eshley
of which are existing under and by virtue of the laws of the Republic Compania Naviera S.A., El
of Panama and are foreign affiliates of private Challenger S.A., Espriona
respondent. 3 Shipping Company, S.A.,
Pacific Navigators
Due to the default in the payment of the loan amortizations, Corporation, Eddie
BANTSA and the corporate borrowers signed and entered into Navigation Corporation S.A.,
restructuring agreements. As additional security for the restructured Litonjua Chartering
loans, private respondent ARC as third party mortgagor executed two (Edyship) Co., Jr. and

24
Eduardo Katipunan Litonjua Title Nos. T-18627, T-186272, T-186273, T-16471 and T-16472 in
on November 21, 1992. its name.

In the civil suits instituted before the foreign courts, private On 18 March 1994, after the consolidation of ownership in its favor,
respondent ARC, being a third party mortgagor, was private not ICCS sold the real properties to Stateland Investment Corporation for
impleaded as party-defendant. the amount of Thirty Nine Million Pesos
(P39,000,000.00). 12 Accordingly, Transfer Certificate of Title Nos.
On 16 December 1992, petitioner BANTSA filed before the Office of T-187781(m), T-187782(m), T-187783(m), T-16653P(m) and T-
the Provincial Sheriff of Bulacan, Philippines an application for 16652P(m) were issued in the latter's name.
extrajudicial foreclosure 6 of real estate mortgage.
After trial, the lower court rendered a decision 13 in favor of private
On 22 January 1993, after due publication and notice, the mortgaged respondent ARC dated 12 May 1993, the decretal portion of which
real properties were sold at public auction in an extrajudicial reads:
foreclosure sale, with Integrated Credit and Corporation Services Co
(ICCS) as the highest bidder for the sum of Twenty four Million WHEREFORE, judgment is hereby rendered
Pesos (P24,000.000.00). 7 declaring that the filing in foreign courts by the
defendant of collection suits against the principal
On 12 February 1993, private respondent filed before the Pasig debtors operated as a waiver of the security of the
Regional Trial Court, Branch 159, an action for damages 8 against the mortgages. Consequently, the plaintiff's rights as
petitioner, for the latter's act of foreclosing extrajudicially the real owner and possessor of the properties then
estate mortgages despite the pendency of civil suits before foreign covered by Transfer Certificates of Title Nos. T-
courts for the collection of the principal loan. 78759, T-78762, T-78763, T-78760 and T-78761,
all of the Register of Deeds of Meycauayan,
Bulacan, Philippines, were violated when the
In its answer 9 petitioner alleged that the rule prohibiting the defendant caused the extrajudicial foreclosure of
mortgagee from foreclosing the mortgage after an ordinary suit for the mortgages constituted thereon.
collection has been filed, is not applicable in the present case,
claiming that:
Accordingly, the defendant is hereby ordered to
pay the plaintiff the following sums, all with legal
a) The plaintiff, being a mere third party interest thereon from the date of the filing of the
mortgagor and not a party to the principal complaint up to the date of actual payment:
restructuring agreements, was never made a party
defendant in the civil cases filed in Hongkong
and England; 1) Actual or compensatory damages in the
amount of Ninety Nine Million Pesos
(P99,000,000.00);
b) There is actually no civil suit for sum of
money filed in the Philippines since the civil
actions were filed in Hongkong and England. As 2) Exemplary damages in the amount of Five
such, any decisions (sic) which may be rendered Million Pesos (P5,000,000.00); and
in the abovementioned courts are not (sic)
enforceable in the Philippines unless a separate 3) Costs of suit.
action to enforce the foreign judgments is first
filed in the Philippines, pursuant to Rule 39, SO ORDERED.
Section 50 of the Revised Rules of Court.
On appeal, the Court of Appeals affirmed the assailed decision of the
c) Under English Law, which is the governing lower court prompting petitioner to file a motion for reconsideration
law under the principal agreements, the which the appellate court denied.
mortgagee does not lose its security interest by
filing civil actions for sums of money.
Hence, the instant petition for review 14 on certiorari where herein
petitioner BANTSA ascribes to the Court of Appeals the following
On 14 December 1993, private respondent filed a motion for assignment of errors:
suspension 10 of the redemption period on the ground that "it cannot
exercise said right of redemption without at the same time waiving or
contradicting its contentions in the case that the foreclosure of the 1. The Honorable Court of
mortgage on its properties is legally improper and therefore invalid." Appeals disregarded the
doctrines laid down by this
Hon. Supreme Court in the
In an order 11 dated 28 January 1994, the trial court granted the cases of Caltex Philippines,
private respondent's motion for suspension after which a copy of said Inc. vs. Intermediate
order was duly received by the Register of Deeds of Meycauayan, Appellate Court docketed as
Bulacan. G.R. No. 74730 promulgated
on August 25, 1989
On 07 February 1994, ICCS, the purchaser of the mortgaged and Philippine Commercial
properties at the foreclosure sale, consolidated its ownership over the International Bank vs. IAC,
real properties, resulting to the issuance of Transfer Certificate of 196 SCRA 29 (1991 case),

25
although said cases were duly or a real action to foreclose the mortgage. In
cited, extensively discussed other words, he may pursue either of the two
and specifically mentioned, remedies, but not both. By such election, his
as one of the issues in the cause of action can by no means be impaired, for
assignment of errors found on each of the two remedies is complete in itself.
page 5 of the decision dated Thus, an election to bring a personal action will
September 30, 1997. leave open to him all the properties of the debtor
for attachment and execution, even including the
2. The Hon. Court of Appeals mortgaged property itself. And, if he waives such
acted with grave abuse of personal action and pursues his remedy against
discretion when it awarded the mortgaged property, an unsatisfied judgment
the private respondent actual thereon would still give him the right to sue for a
and exemplary damages deficiency judgment, in which case, all the
totalling P171,600,000.00, as properties of the defendant, other than the
of July 12, 1998 although mortgaged property, are again open to him for the
such huge amount was not satisfaction of the deficiency. In either case, his
asked nor prayed for in remedy is complete, his cause of action
private respondent's undiminished, and any advantages attendant to
complaint, is contrary to law the pursuit of one or the other remedy are purely
and is totally unsupported by accidental and are all under his right of election.
evidence (sic). On the other hand, a rule that would authorize the
plaintiff to bring a personal action against the
debtor and simultaneously or successively
In fine, this Court is called upon to resolve two main issues: another action against the mortgaged property,
would result not only in multiplicity of suits so
1. Whether or not the offensive to justice (Soriano vs. Enriques, 24
petitioner's act of filing a Phil. 584) and obnoxious to law and equity
collection suit against the (Osorio vs. San Agustin, 25 Phil., 404), but also
principal debtors for the in subjecting the defendant to the vexation of
recovery of the loan before being sued in the place of his residence or of the
foreign courts constituted a residence of the plaintiff, and then again in the
waiver of the remedy of place where the property lies.
foreclosure.
In Danao vs. Court of Appeals, 16 this Court, reiterating jurisprudence
2. Whether or not the award enunciated in Manila Trading and Supply Co vs. Co
by the lower court of actual Kim 17 and Movido vs.
and exemplary damages in RFC, 18 invariably held:
favor of private respondent
ARC, as third-party . . . The rule is now settled that a mortgage
mortgagor, is proper. creditor may elect to waive his security and bring,
instead, an ordinary action to recover the
The petition is bereft of merit. indebtedness with the right to execute a judgment
thereon on all the properties of the debtor,
First, as to the issue of availability of remedies, petitioner submits including the subject matter of the
that a waiver of the remedy of foreclosure requires the concurrence of mortgage . . . , subject to the qualification that if
two requisites: an ordinary civil action for collection should be filed he fails in the remedy by him elected, he cannot
and subsequently a final judgment be correspondingly rendered pursue further the remedy he has waived.
therein. (Emphasis Ours)

According to petitioner, the mere filing of a personal action to collect Anent real properties in particular, the Court has laid down the rule
the principal loan does not suffice; a final judgment must be secured that a mortgage creditor may institute against the mortgage debtor
and obtained in the personal action so that waiver of the remedy of either a personal action for debt or a real action to foreclose the
foreclosure may be appreciated. To put it differently, absent any of mortgage. 19
the two requisites, the mortgagee-creditor is deemed not to have
waived the remedy of foreclosure. In our jurisdiction, the remedies available to the mortgage creditor are
deemed alternative and not cumulative. Notably, an election of one
We do not agree. remedy operates as a waiver of the other. For this purpose, a remedy
is deemed chosen upon the filing of the suit for collection or upon the
filing of the complaint in an action for foreclosure of mortgage,
Certainly, this Court finds petitioner's arguments untenable and pursuant to the provision of Rule 68 of the of the 1997 Rules of Civil
upholds the jurisprudence laid down in Bachrach 15 and similar cases Procedure. As to extrajudicial foreclosure, such remedy is deemed
adjudicated thereafter, thus: elected by the mortgage creditor upon filing of the petition not with
any court of justice but with the Office of the Sheriff of the province
In the absence of express statutory provisions, a where the sale is to be made, in accordance with the provisions of Act
mortgage creditor may institute against the No. 3135, as amended by Act No. 4118.
mortgage debtor either a personal action or debt
26
In the case at bench, private respondent ARC constituted real estate For non-payment of a note secured by mortgage,
mortgages over its properties as security for the debt of the principal the creditor has a single cause of action against
debtors. By doing so, private respondent subjected itself to the the debtor. This single cause of action consists in
liabilities of a third party mortgagor. Under the law, third persons the recovery of the credit with execution of the
who are not parties to a loan may secure the latter by pledging or security. In other words, the creditor in his action
mortgaging their own property. 20 may make two demands, the payment of the debt
and the foreclosure of his mortgage. But both
Notwithstanding, there is no legal provision nor jurisprudence in our demands arise from the same cause, the non-
jurisdiction which makes a third person who secures the fulfillment payment of the debt, and for that reason, they
of another's obligation by mortgaging his own property, to be constitute a single cause of action. Though the
solidarily bound with the principal obligor. The signatory to the debt and the mortgage constitute separate
principal contract—loan—remains to be primarily bound. It is only agreements, the latter is subsidiary to the former,
upon default of the latter that the creditor may have recourse on the and both refer to one and the same obligation.
mortgagors by foreclosing the mortgaged properties in lieu of an Consequently, there exists only one cause of
action for the recovery of the amount of the loan. 21 action for a single breach of that obligation.
Plaintiff, then, by applying the rules above stated,
cannot split up his single cause of action by filing
In the instant case, petitioner's contention that the requisites of filing a complaint for payment of the debt, and
the action for collection and rendition of final judgment therein thereafter another complaint for foreclosure of
should concur, is untenable. the mortgage. If he does so, the filing of the first
complaint will bar the subsequent complaint. By
Thus, in Cerna vs. Court of Appeals, 22 we agreed with the petitioner allowing the creditor to file two separate
in said case, that the filing of a collection suit barred the foreclosure complaints simultaneously or successively, one to
of the mortgage: recover his credit and another to foreclose his
mortgage, we will, in effect, be authorizing him
A mortgagee who files a suit for collection plural redress for a single breach of contract at so
abandons the remedy of foreclosure of the chattel much cost to the courts and with so much
mortgage constituted over the personal property vexation and oppression to the debtor.
as security for the debt or value of the promissory
note when he seeks to recover in the said Petitioner further faults the Court of Appeals for allegedly
collection suit. disregarding the doctrine enunciated in Caltex wherein this High
Court relaxed the application of the general rules to wit:
. . . When the mortgagee elects to file a suit for
collection, not foreclosure, thereby abandoning In the present case, however, we shall not follow
the chattel mortgage as basis for relief, he clearly this rule to the letter but declare that it is the
manifests his lack of desire and interest to go collection suit which was waived and/or
after the mortgaged property as security for the abandoned. This ruling is more in harmony with
promissory note . . . . the principles underlying our judicial system. It is
of no moment that the collection suit was filed
Contrary to petitioner's arguments, we therefore reiterate the rule, for ahead, what is determinative is the fact that the
clarity and emphasis, that the mere act of filing of an ordinary action foreclosure proceedings ended even before the
for collection operates as a waiver of the mortgage-creditor's remedy decision in the collection suit was rendered. . . .
to foreclose the mortgage. By the mere filing of the ordinary action
for collection against the principal debtors, the petitioner in the Notably, though, petitioner took the Caltex ruling out of context. We
present case is deemed to have elected a remedy, as a result of which must stress that the Caltex case was never intended to overrule the
a waiver of the other necessarily must arise. Corollarily, no final well-entrenched doctrine enunciated Bachrach, which to our mind
judgment in the collection suit is required for the rule on waiver to still finds applicability in cases of this sort. To reiterate, Bachrach is
apply. still good law.

Hence, in Caltex Philippines, Inc. vs. Intermediate-Appellate We then quote the decision 25 of the trial court, in the present case,
Court, 23 a case relied upon by petitioner, supposedly to buttress its thus:
contention, this Court had occasion to rule that the mere act of filing
a collection suit for the recovery of a debt secured by a mortgage The aforequoted ruling in Caltex is the exception
constitutes waiver of the other remedy of foreclosure. rather than the rule, dictated by the peculiar
circumstances obtaining therein. In the said case,
In the case at bar, petitioner BANTSA only has one cause of action the Supreme Court chastised Caltex for making ".
which is non-payment of the debt. Nevertheless, alternative remedies . . a mockery of our judicial system when it
are available for its enjoyment and exercise. Petitioner then may opt initially filed a collection suit then, during the
to exercise only one of two remedies so as not to violate the rule pendency thereof, foreclosed extrajudicially the
against splitting a cause of action. mortgaged property which secured the
indebtedness, and still pursued the collection suit
As elucidated by this Court in the landmark case of Bachrach Motor to the end." Thus, to prevent a mockery of our
Co., Inc, vs. Icarangal. 24 judicial system", the collection suit had to be
nullified because the foreclosure proceedings

27
have already been pursued to their end and can Hence, a suit brought before a foreign court having competence and
no longer be undone. jurisdiction to entertain the action is deemed, for this purpose, to be
within the contemplation of the remedy available to the mortgagee-
x x x           x x x          x x x creditor. This pronouncement would best serve the interest of justice
and fair play and further discourage the noxious practice of splitting
up a lone cause of action.
In the case at bar, it has not been shown whether
the defendant pursued to the end or are still
pursuing the collection suits filed in foreign Incidentally, BANTSA alleges that under English Law, which
courts. There is no occasion, therefore, for this according to petitioner is the governing law with regard to the
court to apply the exception laid down by the principal agreements, the mortgagee does not lose its security interest
Supreme Court in Caltex by nullifying the by simply filing civil actions for sums of money. 29
collection suits. Quite obviously, too, the
aforesaid collection suits are beyond the reach of We rule in the negative.
this Court. Thus the only way the court may
prevent the spector of a creditor having "plural This argument shows desperation on the part of petitioner to rivet its
redress for a single breach of contract" is by crumbling cause. In the case at bench, Philippine law shall apply
holding, as the Court hereby holds, that the notwithstanding the evidence presented by petitioner to prove the
defendant has waived the right to foreclose the English law on the matter.
mortgages constituted by the plaintiff on its
properties originally covered by Transfer
Certificates of Title Nos. T-78759, T-78762, T- In a long line of decisions, this Court adopted the well-imbedded
78760 and T-78761. (RTC Decision pp., 10-11) principle in our jurisdiction that there is no judicial notice of any
foreign law. A foreign law must be properly pleaded and proved as a
fact. 30 Thus, if the foreign law involved is not properly pleaded and
In this light, the actuations of Caltex are deserving of severe proved, our courts will presume that the foreign law is the same as
criticism, to say the least. 26 our local or domestic or internal
law. 31 This is what we refer to as the doctrine of processual
Moreover, petitioner attempts to mislead this Court by citing the case presumption.
of PCIB vs. IAC. 27 Again, petitioner tried to fit a square peg in a
round hole. It must be stressed that far from overturning the doctrine In the instant case, assuming arguendo that the English Law on the
laid down in Bachrach, this Court in PCIB buttressed its firm stand matter were properly pleaded and proved in accordance with Section
on this issue by declaring: 24, Rule 132 of the Rules of Court and the jurisprudence laid down
in Yao Kee, et al. vs.
While the law allows a mortgage creditor to Sy-Gonzales, 32 said foreign law would still not find applicability.
either institute a personal action for the debt or a
real action to foreclosure the mortgage, he cannot Thus, when the foreign law, judgment or contract is contrary to a
pursue both remedies simultaneously or sound and established public policy of the forum, the said foreign
successively as was done by PCIB in this case. law, judgment or order shall not be applied. 33

x x x           x x x          x x x Additionally, prohibitive laws concerning persons, their acts or

property, and those which have for their object public order, public
Thus, when the PCIB filed Civil Case No. 29392 policy and good customs shall not be rendered ineffective by laws or
to enforce payment of the 1.3 million promissory judgments promulgated, or by determinations or conventions agreed
note secured by real estate mortgages and upon in a foreign country. 34
subsequently filed a petition for extrajudicial
foreclosure, it violates the rule against splitting a The public policy sought to be protected in the instant case is the
cause of action. principle imbedded in our jurisdiction proscribing the splitting up of a
single cause of action.
Accordingly, applying the foregoing rules, we hold that petitioner, by
the expediency of filing four civil suits before foreign courts, Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent —
necessarily abandoned the remedy to foreclose the real estate
mortgages constituted over the properties of third-party mortgagor
and herein private respondent ARC. Moreover, by filing the four civil If two or more suits are instituted on the basis of
actions and by eventually foreclosing extrajudicially the mortgages, the same cause of action, the filing of one or a
petitioner in effect transgressed the rules against splitting a cause of judgment upon the merits in any one is available
action well-enshrined in jurisprudence and our statute books. as a ground for the dismissal of the others.

In Bachrach, this Court resolved to deny the creditor the remedy of Moreover, foreign law should not be applied when its application
foreclosure after the collection suit was filed, considering that the would work undeniable injustice to the citizens or residents of the
creditor should not be afforded "plural redress for a single breach of forum. To give justice is the most important function of law; hence, a
contract." For cause of action should not be confused with the remedy law, or judgment or contract that is obviously unjust negates the
created for its enforcement. 28 fundamental principles of Conflict of Laws. 35

Notably, it is not the nature of the redress which is crucial but the Clearly then, English Law is not applicable.
efficacy of the remedy chosen in addressing the creditor's cause.
28
As to the second pivotal issue, we hold that the private respondent is In arriving at the amount of actual damages, the trial court justified
entitled to the award of actual or compensatory damages inasmuch as the award by presenting the following ratiocination in its assailed
the act of petitioner BANTSA in extrajudicially foreclosing the real decision 45, to wit:
estate mortgages constituted a clear violation of the rights of herein
private respondent ARC, as third-party mortgagor. Indeed, the Court has its own mind in the matter
of valuation. The size of the subject real
Actual or compensatory damages are those recoverable because of properties are (sic) set forth in their individuals
pecuniary loss in business, trade, property, profession, job or titles, and the Court itself has seen the character
occupation and the same must be proved, otherwise if the proof is and nature of said properties during the ocular
flimsy and non-substantial, no damages will be given. 36 Indeed, the inspection it conducted. Based principally on the
question of the value of property is always a difficult one to settle as foregoing, the Court makes the following
valuation of real property is an imprecise process since real estate has observations:
no inherent value readily ascertainable by an appraiser or by the
court. 37 The opinions of men vary so much concerning the real value 1. The properties consist of about 39 hectares in
of property that the best the courts can do is hear all of the witnesses Bo. Sto. Cristo, San Jose del Monte, Bulacan,
which the respective parties desire to present, and then, by carefully which is (sic) not distant from Metro Manila —
weighing that testimony, arrive at a conclusion which is just and the biggest urban center in the Philippines — and
equitable. 38 are easily accessible through well-paved roads;

In the instant case, petitioner assails the Court of Appeals for relying 2. The properties are suitable for development
heavily on the valuation made by Philippine Appraisal Company. In into a subdivision for low cost housing, as
effect, BANTSA questions the act of the appellate court in giving due admitted by defendant's own appraiser (TSN,
weight to the appraisal report composed of twenty three pages, signed May 30, 1994, p. 31);
by Mr. Lauro Marquez and submitted as evidence by private
respondent. The appraisal report, as the records would readily show,
was corroborated by the testimony of Mr. Reynaldo Flores, witness 3. The pigpens which used to exist in the property
for private respondent. have already been demolished. Houses of strong
materials are found in the vicinity of the property
(Exhs. 2, 2-1 to 2-7), and the vicinity is a growing
On this matter, the trial court observed: community. It has even been shown that the
house of the Barangay Chairman is located
The record herein reveals that plaintiff-appellee adjacent to the property in question (Exh. 27),
formally offered as evidence the appraisal report and the only remaining piggery (named Cherry
dated March 29, 1993 (Exhibit J, Records, p. Farm) in the vicinity is about 2 kilometers away
409), consisting of twenty three (23) pages which from the western boundary of the property in
set out in detail the valuation of the property to question (TSN, November 19, p. 3);
determine its fair market value (TSN, April 22,
1994, p. 4), in the amount of P99,986,592.00 4. It will not be hard to find interested buyers of
(TSN, ibid., p. 5), together with the corroborative the property, as indubitably shown by the fact
testimony of one Mr. Reynaldo F. Flores, an that on March 18, 1994, ICCS (the buyer during
appraiser and director of Philippine Appraisal the foreclosure sale) sold the consolidated real
Company, Inc. (TSN, ibid., p. 3). The latter's estate properties to Stateland Investment
testimony was subjected to extensive cross- Corporation, in whose favor new titles were
examination by counsel for defendant-appellant issued, i.e., TCT Nos. T-187781(m); T-
(TSN, April 22, 1994, pp. 6-22). 39 187782(m), T-187783(m); T-16653P(m) and T-
166521(m) by the Register of Deeds of
In the matter of credibility of witnesses, the Court reiterates the Meycauayan (sic), Bulacan;
familiar and well-entrenched rule that the factual findings of the trial
court should be respected. 40 The time-tested jurisprudence is that the 5. The fact that ICCS was able to sell the subject
findings and conclusions of the trial court on the credibility of properties to Stateland Investment Corporation
witnesses enjoy a badge of respect for the reason that trial courts have for Thirty Nine Million (P39,000,000.00) Pesos,
the advantage of observing the demeanor of witnesses as they which is more than triple defendant's appraisal
testify. 41 (Exh. 2) clearly shows that the Court cannot rely
on defendant's aforesaid estimate (Decision,
This Court will not alter the findings of the trial court on the Records, p. 603).
credibility of witnesses, principally because they are in a better
position to assess the same than the appellate court. 42 Besides, trial It is a fundamental legal aphorism that the conclusions of the trial
courts are in a better position to examine real evidence as well as judge on the credibility of witnesses command great respect and
observe the demeanor of witnesses. 43 consideration especially when the conclusions are supported by the
evidence on record. 46 Applying the foregoing principle, we therefore
Similarly, the appreciation of evidence and the assessment of the hold that the trial court committed no palpable error in giving
credibility of witnesses rest primarily with the trial court. 44 In the credence to the testimony of Reynaldo Flores, who according to the
case at bar, we see no reason that would justify this Court to disturb records, is a licensed real estate broker, appraiser and director of
the factual findings of the trial court, as affirmed by the Court of Philippine Appraisal Company, Inc. since 1990. 47 As the records
Appeals, with regard to the award of actual damages. show, Flores had been with the company for 26 years at the time of
his testimony.
29
Of equal importance is the fact that the trial court did not confine amendment to the complaint was necessary,
itself to the appraisal report dated 29 March 1993, and the testimony especially where defendant had himself raised the
given by Mr. Reynaldo Flores, in determining the fair market value of point on which recovery was based. The appellate
the real property. Above all these, the record would likewise show court could treat the pleading as amended to
that the trial judge in order to appraise himself of the characteristics conform to the evidence although the pleadings
and condition of the property, conducted an ocular inspection where were actually not amended. Amendment is also
the opposing parties appeared and were duly represented. unnecessary when only clerical error or non
substantial matters are involved, as we held
Based on these considerations and the evidence submitted, we affirm in Bank of the Philippine Islands vs. Laguna (48
the ruling of the trial court as regards the valuation of the property — Phil. 5). In Co Tiamco vs. Diaz (75 Phil. 672), we
stressed that the rule on amendment need not be
applied rigidly, particularly where no surprise or
. . . a valuation of Ninety Nine Million Pesos prejudice is caused the objecting party. And in
(P99,000,000.00) for the 39-hectare properties the recent case of National Power Corporation
(sic) translates to just about Two Hundred Fifty vs. Court of Appeals (113 SCRA 556), we held
Four Pesos (P254.00) per square meter. This that where there is a variance in the defendant's
appears to be, as the court so holds, a better pleadings and the evidence adduced by it at the
approximation of the fair market value of the trial, the Court may treat the pleading as amended
subject properties. This is the amount which to conform with the evidence.
should be restituted by the defendant to the
plaintiff by way of actual or compensatory
damages . . . . 48 It is the view of the Court that pursuant to the
above-mentioned rule and in light of the
decisions cited, the trial court should not be
Further, petitioner ascribes error to the lower court awarding an precluded from awarding an amount higher than
amount allegedly not asked nor prayed for in private respondent's that claimed in the pleading notwithstanding the
complaint. absence of the required amendment. But it is
upon the condition that the evidence of such
Notwithstanding the fact that the award of actual and compensatory higher amount has been presented properly, with
damages by the lower court exceeded that prayed for in the full opportunity on the part of the opposing
complaint, the same is nonetheless valid, subject to certain parties to support their respective contentions and
qualifications. to refute each other's evidence.

On this issue, Rule 10, Section 5 of the Rules of Court is pertinent: The failure of a party to amend a pleading to
conform to the evidence adduced during trial
Sec. 5. Amendment to conform to or authorize does not preclude an adjudication by the court on
presentation of evidence. — When issues not the basis of such evidence which may embody
raised by the pleadings are tried with the express new issues not raised in the pleadings, or serve as
or implied consent of the parties, they shall be a basis for a higher award of damages. Although
treated in all respects as if they had been raised in the pleading may not have been amended to
the pleadings. Such amendment of the pleadings conform to the evidence submitted during trial,
as may be necessary to cause them to conform to judgment may nonetheless be rendered, not
the evidence and to raise these issues may be simply on the basis of the issues alleged but also
made upon motion of any party at any time, even the basis of issues discussed and the assertions of
after judgement; but failure to amend does not fact proved in the course of trial. The court may
affect the result of the trial of these issues. If treat the pleading as if it had been amended to
evidence is objected to at the trial on the ground conform to the evidence, although it had not been
that it is not within the issues made by the actually so amended. Former Chief Justice Moran
pleadings, the court may allow the pleadings to put the matter in this way:
be amended and shall do so with liberality if the
presentation of the merits of the action and the When evidence is presented
ends of substantial justice will be subserved by one party, with the
thereby. The court may grant a continuance to expressed or implied consent
enable the amendment to be made. of the adverse party, as to
issues not alleged in the
The jurisprudence enunciated in Talisay-Silay Milling Co., Inc. vs. pleadings, judgment may be
Asociacion de Agricultures de Talisay-Silay, Inc. 49 citing Northern rendered validly as regards
Cement Corporation vs. Intermediate Appellate Court 50 is those issues, which shall be
enlightening: considered as if they have
been raised in the pleadings.
There is implied consent to
There have been instances where the Court has the evidence thus presented
held that even without the necessary amendment, when the adverse party fails
the amount proved at the trial may be validly to object thereto.
awarded, as in Tuazon v. Bolanos (95 Phil. 106),
where we said that if the facts shown entitled
plaintiff to relief other than that asked for, no Clearly, a court may rule and render judgment on
the basis of the evidence before it even though
30
the relevant pleading had not been previously The Facts
amended, so long as no surprise or prejudice is
thereby caused to the adverse party. Put a little Petitioner Herald Dacasin (petitioner), American, and respondent
differently, so long as the basis requirements of Sharon Del Mundo Dacasin (respondent), Filipino, were married in
fair play had been met, as where litigants were Manila in April 1994. They have one daughter, Stephanie, born on 21
given full opportunity to support their respective September 1995. In June 1999, respondent sought and obtained from
contentions and to object to or refute each other's the Circuit Court, 19th Judicial Circuit, Lake County, Illinois (Illinois
evidence, the court may validly treat the court) a divorce decree against petitioner.3 In its ruling, the Illinois
pleadings as if they had been amended to court dissolved the marriage of petitioner and respondent, awarded to
conform to the evidence and proceed to respondent sole custody of Stephanie and retained jurisdiction over
adjudicate on the basis of all the evidence before the case for enforcement purposes.
it.
On 28 January 2002, petitioner and respondent executed in Manila a
In the instant case, inasmuch as the petitioner was afforded the contract (Agreement4 ) for the joint custody of Stephanie. The parties
opportunity to refute and object to the evidence, both documentary chose Philippine courts as exclusive forum to adjudicate disputes
and testimonial, formally offered by private respondent, the arising from the Agreement. Respondent undertook to obtain from
rudiments of fair play are deemed satisfied. In fact, the testimony of the Illinois court an order "relinquishing" jurisdiction to Philippine
Reynaldo Flores was put under scrutiny during the course of the courts.
cross-examination. Under these circumstances, the court acted within
the bounds of its jurisdiction and committed no reversible error in
awarding actual damages the amount of which is higher than that In 2004, petitioner sued respondent in the Regional Trial Court of
prayed for. Verily, the lower court's actuations are sanctioned by the Makati City, Branch 60 (trial court) to enforce the Agreement.
Rules and supported by jurisprudence. Petitioner alleged that in violation of the Agreement, respondent
exercised sole custody over Stephanie.
Similarly, we affirm the grant of exemplary damages although the
amount of Five Million Pesos (P5,000,000.00) awarded, being Respondent sought the dismissal of the complaint for, among others,
excessive, is subject to reduction. Exemplary or corrective damages lack of jurisdiction because of the Illinois court’s retention of
are imposed, by way of example or correction for the public good, in jurisdiction to enforce the divorce decree.
addition to the moral, temperate, liquidated or compensatory
damages. 51 Considering its purpose, it must be fair and reasonable in The Ruling of the Trial Court
every case and should not be awarded to unjustly enrich a prevailing
party. 52 In our view, an award of P50,000.00 as exemplary damages In its Order dated 1 March 2005, the trial court sustained
in the present case qualifies the test of reasonableness. respondent’s motion and dismissed the case for lack of jurisdiction.
The trial court held that: (1) it is precluded from taking cognizance
WHEREFORE, premises considered, the instant petition is DENIED over the suit considering the Illinois court’s retention of jurisdiction
for lack of merit. The decision of the Court of Appeals is hereby to enforce its divorce decree, including its order awarding sole
AFFIRMED with MODIFICATION of the amount awarded as custody of Stephanie to respondent; (2) the divorce decree is binding
exemplary damages. According, petitioner is hereby ordered to pay on petitioner following the "nationality rule" prevailing in this
private respondent the sum of P99,000,000.00 as actual or jurisdiction;5 and (3) the Agreement is void for contravening Article
compensatory damages; P50,000.00 as exemplary damage and the 2035, paragraph 5 of the Civil Code6 prohibiting compromise
costs of suit. agreements on jurisdiction.7

SO ORDERED. Petitioner sought reconsideration, raising the new argument that the
divorce decree obtained by respondent is void. Thus, the divorce
decree is no bar to the trial court’s exercise of jurisdiction over the
case.

In its Order dated 23 June 2005, the trial court denied

reconsideration, holding that unlike in the case of respondent, the
G.R. No. 168785               February 5, 2010
divorce decree is binding on petitioner under the laws of his
nationality.
HERALD BLACK DACASIN, Petitioner,
vs.
Hence, this petition.
SHARON DEL MUNDO DACASIN, Respondent.

Petitioner submits the following alternative theories for the validity of

DECISION
the Agreement to justify its enforcement by the trial court: (1) the
Agreement novated the valid divorce decree, modifying the terms of
CARPIO, J.: child custody from sole (maternal) to joint;8 or (2) the Agreement is
independent of the divorce decree obtained by respondent.
The Case
The Issue
For review1 is a dismissal2 of a suit to enforce a post-foreign divorce
child custody agreement for lack of jurisdiction.

31
The question is whether the trial court has jurisdiction to take The Agreement is not only void ab initio for being contrary to law, it
cognizance of petitioner’s suit and enforce the Agreement on the joint has also been repudiated by the mother when she refused to allow
custody of the parties’ child. joint custody by the father. The Agreement would be valid if the
spouses have not divorced or separated because the law provides for
The Ruling of the Court joint parental authority when spouses live together. 21 However, upon
separation of the spouses, the mother takes sole custody under the
law if the child is below seven years old and any agreement to the
The trial court has jurisdiction to entertain petitioner’s suit but not to contrary is void. Thus, the law suspends the joint custody regime for
enforce the Agreement which is void. However, factual and equity (1) children under seven of (2) separated or divorced spouses. Simply
considerations militate against the dismissal of petitioner’s suit and put, for a child within this age bracket (and for commonsensical
call for the remand of the case to settle the question of Stephanie’s reasons), the law decides for the separated or divorced parents how
custody. best to take care of the child and that is to give custody to the
separated mother. Indeed, the separated parents cannot contract away
Regional Trial Courts Vested With Jurisdiction the provision in the Family Code on the maternal custody of children
to Enforce Contracts below seven years anymore than they can privately agree that a
mother who is unemployed, immoral, habitually drunk, drug addict,
Subject matter jurisdiction is conferred by law. At the time petitioner insane or afflicted with a communicable disease will have sole
filed his suit in the trial court, statutory law vests on Regional Trial custody of a child under seven as these are reasons deemed
Courts exclusive original jurisdiction over civil actions incapable of compelling to preclude the application of the exclusive maternal
pecuniary estimation.9 An action for specific performance, such as custody regime under the second paragraph of Article 213.22
petitioner’s suit to enforce the Agreement on joint child custody,
belongs to this species of actions.10 Thus, jurisdiction-wise, petitioner It will not do to argue that the second paragraph of Article 213 of the
went to the right court. Family Code applies only to judicial custodial agreements based on
its text that "No child under seven years of age shall be separated
Indeed, the trial court’s refusal to entertain petitioner’s suit was from the mother, unless the court finds compelling reasons to order
grounded not on its lack of power to do so but on its thinking that the otherwise." To limit this provision’s enforceability to court
Illinois court’s divorce decree stripped it of jurisdiction. This sanctioned agreements while placing private agreements beyond its
conclusion is unfounded. What the Illinois court retained was reach is to sanction a double standard in custody regulation of
"jurisdiction x x x for the purpose of enforcing all and sundry the children under seven years old of separated parents. This effectively
various provisions of [its] Judgment for Dissolution."11 Petitioner’s empowers separated parents, by the simple expedient of avoiding the
suit seeks the enforcement not of the "various provisions" of the courts, to subvert a legislative policy vesting to the separated mother
divorce decree but of the post-divorce Agreement on joint child sole custody of her children under seven years of age "to avoid a
custody. Thus, the action lies beyond the zone of the Illinois court’s tragedy where a mother has seen her baby torn away from her." 23 This
so-called "retained jurisdiction." ignores the legislative basis that "[n]o man can sound the deep
sorrows of a mother who is deprived of her child of tender age."24

Petitioner’s Suit Lacks Cause of Action

It could very well be that Article 213’s bias favoring one separated
parent (mother) over the other (father) encourages paternal neglect,
The foregoing notwithstanding, the trial court cannot enforce the presumes incapacity for joint parental custody, robs the parents of
Agreement which is contrary to law. custodial options, or hijacks decision-making between the separated
parents.25 However, these are objections which question the law’s
In this jurisdiction, parties to a contract are free to stipulate the terms wisdom not its validity or uniform enforceability. The forum to air
of agreement subject to the minimum ban on stipulations contrary to and remedy these grievances is the legislature, not this Court. At any
law, morals, good customs, public order, or public rate, the rule’s seeming harshness or undesirability is tempered by
policy.12 Otherwise, the contract is denied legal existence, deemed ancillary agreements the separated parents may wish to enter such as
"inexistent and void from the beginning."13 For lack of relevant granting the father visitation and other privileges. These
stipulation in the Agreement, these and other ancillary Philippine arrangements are not inconsistent with the regime of sole maternal
substantive law serve as default parameters to test the validity of the custody under the second paragraph of Article 213 which merely
Agreement’s joint child custody stipulations.14 grants to the mother final authority on the care and custody of the
minor under seven years of age, in case of disagreements.1avvphi1
At the time the parties executed the Agreement on 28 January 2002,
two facts are undisputed: (1) Stephanie was under seven years old Further, the imposed custodial regime under the second paragraph of
(having been born on 21 September 1995); and (2) petitioner and Article 213 is limited in duration, lasting only until the child’s
respondent were no longer married under the laws of the United seventh year. From the eighth year until the child’s emancipation, the
States because of the divorce decree. The relevant Philippine law on law gives the separated parents freedom, subject to the usual
child custody for spouses separated in fact or in law15 (under the contractual limitations, to agree on custody regimes they see fit to
second paragraph of Article 213 of the Family Code) is also adopt. Lastly, even supposing that petitioner and respondent are not
undisputed: "no child under seven years of age shall be separated barred from entering into the Agreement for the joint custody of
from the mother x x x."16 (This statutory awarding of sole parental Stephanie, respondent repudiated the Agreement by asserting sole
custody17 to the mother is mandatory,18 grounded on sound policy custody over Stephanie. Respondent’s act effectively brought the
consideration,19 subject only to a narrow exception not alleged to parties back to ambit of the default custodial regime in the second
obtain here.20 ) Clearly then, the Agreement’s object to establish a paragraph of Article 213 of the Family Code vesting on respondent
post-divorce joint custody regime between respondent and petitioner sole custody of Stephanie.
over their child under seven years old contravenes Philippine law.
Nor can petitioner rely on the divorce decree’s alleged invalidity - not
because the Illinois court lacked jurisdiction or that the divorce
32
decree violated Illinois law, but because the divorce was obtained by trial court render judgment. This disposition is consistent with the
his Filipino spouse26 - to support the Agreement’s enforceability. The settled doctrine that in child custody proceedings, equity may be
argument that foreigners in this jurisdiction are not bound by foreign invoked to serve the child’s best interest.31
divorce decrees is hardly novel. Van Dorn v. Romillo 27 settled the
matter by holding that an alien spouse of a Filipino is bound by a WHEREFORE, we REVERSE the Orders dated 1 March 2005 and
divorce decree obtained abroad.28 There, we dismissed the alien 23 June 2005 of the Regional Trial Court of Makati City, Branch 60.
divorcee’s Philippine suit for accounting of alleged post-divorce The case is REMANDED for further proceedings consistent with this
conjugal property and rejected his submission that the foreign divorce ruling.
(obtained by the Filipino spouse) is not valid in this jurisdiction in
this wise:
SO ORDERED.
There can be no question as to the validity of that Nevada divorce in
any of the States of the United States. The decree is binding on
private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of the G.R. No. 136804             February 19, 2003
Union. What he is contending in this case is that the divorce is not
valid and binding in this jurisdiction, the same being contrary to local
law and public policy. MANUFACTURERS HANOVER TRUST CO. and/or
CHEMICAL BANK, petitioners,
vs.
It is true that owing to the nationality principle embodied in Article RAFAEL MA. GUERRERO, respondent.
15 of the Civil Code, only Philippine nationals are covered by the
policy against absolute divorces the same being considered contrary
to our concept of public policy and morality. However, aliens may DECISION
obtain divorces abroad, which may be recognized in the Philippines,
provided they are valid according to their national law. In this case, CARPIO, J.:
the divorce in Nevada released private respondent from the marriage
from the standards of American law, under which divorce dissolves The Case
the marriage.

This is a petition for review under Rule 45 of the Rules of Court to

xxxx set aside the Court of Appeals’1 Decision of August 24, 1998 and
Resolution of December 14, 1998 in CA-G.R. SP No.
Thus, pursuant to his national law, private respondent is no longer the 423102 affirming the trial court’s denial of petitioners’ motion for
husband of petitioner. He would have no standing to sue in the case partial summary judgment.
below as petitioner’s husband entitled to exercise control over
conjugal assets. As he is bound by the Decision of his own country’s The Antecedents
Court, which validly exercised jurisdiction over him, and whose
decision he does not repudiate, he is estopped by his own
representation before said Court from asserting his right over the On May 17, 1994, respondent Rafael Ma. Guerrero ("Guerrero" for
alleged conjugal property. (Emphasis supplied) brevity) filed a complaint for damages against petitioner
Manufacturers Hanover Trust Co. and/or Chemical Bank ("the Bank"
for brevity) with the Regional Trial Court of Manila ("RTC" for
We reiterated Van Dorn in Pilapil v. Ibay-Somera29 to dismiss brevity). Guerrero sought payment of damages allegedly for (1)
criminal complaints for adultery filed by the alien divorcee (who illegally withheld taxes charged against interests on his checking
obtained the foreign divorce decree) against his former Filipino account with the Bank; (2) a returned check worth US$18,000.00 due
spouse because he no longer qualified as "offended spouse" entitled
to signature verification problems; and (3) unauthorized conversion
to file the complaints under Philippine procedural rules. Thus, it of his account. Guerrero amended his complaint on April 18, 1995.
should be clear by now that a foreign divorce decree carries as much
validity against the alien divorcee in this jurisdiction as it does in the
jurisdiction of the alien’s nationality, irrespective of who obtained the On September 1, 1995, the Bank filed its Answer alleging, inter
divorce. alia, that by stipulation Guerrero’s account is governed by New York
law and this law does not permit any of Guerrero’s claims except
actual damages. Subsequently, the Bank filed a Motion for Partial
The Facts of the Case and Nature of Proceeding Summary Judgment seeking the dismissal of Guerrero’s claims for
Justify Remand consequential, nominal, temperate, moral and exemplary damages as
well as attorney’s fees on the same ground alleged in its Answer. The
Instead of ordering the dismissal of petitioner’s suit, the logical end Bank contended that the trial should be limited to the issue of actual
to its lack of cause of action, we remand the case for the trial court to damages. Guerrero opposed the motion.
settle the question of Stephanie’s custody. Stephanie is now nearly 15
years old, thus removing the case outside of the ambit of the The affidavit of Alyssa Walden, a New York attorney, supported the
mandatory maternal custody regime under Article 213 and bringing it Bank’s Motion for Partial Summary Judgment. Alyssa Walden’s
within coverage of the default standard on child custody proceedings affidavit ("Walden affidavit" for brevity) stated that Guerrero’s New
– the best interest of the child.30 As the question of custody is already York bank account stipulated that the governing law is New York law
before the trial court and the child’s parents, by executing the and that this law bars all of Guerrero’s claims except actual damages.
Agreement, initially showed inclination to share custody, it is in the The Philippine Consular Office in New York authenticated the
interest of swift and efficient rendition of justice to allow the parties Walden affidavit.
to take advantage of the court’s jurisdiction, submit evidence on the
custodial arrangement best serving Stephanie’s interest, and let the
33
The RTC denied the Bank’s Motion for Partial Summary Judgment "x x x HOLDING THAT [THE BANK’S] PROOF OF FACTS TO
and its motion for reconsideration on March 6, 1996 and July 17, SUPPORT ITS MOTION FOR SUMMARY JUDGMENT MAY
1996, respectively. The Bank filed a petition for certiorari and NOT BE GIVEN BY AFFIDAVIT;
prohibition with the Court of Appeals assailing the RTC Orders. In its
Decision dated August 24, 1998, the Court of Appeals dismissed the x x x HOLDING THAT [THE BANK’S] AFFIDAVIT, WHICH
petition. On December 14, 1998, the Court of Appeals denied the PROVES FOREIGN LAW AS A FACT, IS "HEARSAY" AND
Bank’s motion for reconsideration. THEREBY ‘CANNOT SERVE AS PROOF OF THE NEW YORK
LAW RELIED UPON BY PETITIONERS IN THEIR MOTION
Hence, the instant petition. FOR SUMMARY JUDGMENT x x x’."3

The Ruling of the Court of Appeals First, the Bank argues that in moving for partial summary
judgment, it was entitled to use the Walden affidavit to
The Court of Appeals sustained the RTC orders denying the motion prove that the stipulated foreign law bars the claims for
for partial summary judgment. The Court of Appeals ruled that the consequential, moral, temperate, nominal and exemplary
Walden affidavit does not serve as proof of the New York law and damages and attorney’s fees. Consequently, outright
jurisprudence relied on by the Bank to support its motion. The Court dismissal by summary judgment of these claims is
of Appeals considered the New York law and jurisprudence as public warranted.
documents defined in Section 19, Rule 132 of the Rules on Evidence,
as follows: Second, the Bank claims that the Court of Appeals mixed
up the requirements of Rule 35 on summary judgments and
"SEC. 19. Classes of Documents. – For the purpose of their those of a trial on the merits in considering the Walden
presentation in evidence, documents are either public or private. affidavit as "hearsay." The Bank points out that the Walden
affidavit is not hearsay since Rule 35 expressly permits the
use of affidavits.
Public documents are:
Lastly, the Bank argues that since Guerrero did not submit
(a) The written official acts, or records of the official acts of the any opposing affidavit to refute the facts contained in the
sovereign authority, official bodies and tribunals, and public officers, Walden affidavit, he failed to show the need for a trial on
whether of the Philippines, or of a foreign country; his claims for damages other than actual.

x x x." The Court’s Ruling

The Court of Appeals opined that the following procedure outlined in The petition is devoid of merit.
Section 24, Rule 132 should be followed in proving foreign law:
The Bank filed its motion for partial summary judgment pursuant to
"SEC. 24. Proof of official record. – The record of public documents Section 2, Rule 34 of the old Rules of Court which reads:
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 "Section 2. Summary judgment for defending party. – A party against
by his deputy, and accompanied, if the record is not kept in the whom a claim, counterclaim, or cross-claim is asserted or a
Philippines, with a certificate that such officer has the custody. If the declaratory relief is sought may, at any time, move with supporting
office in which the record is kept is in a foreign country, the affidavits for a summary judgment in his favor as to all or any part
certificate may be made by a secretary of the embassy or legation, thereof."
consul general, consul, vice consul, or consular agent or by any
officer in the foreign service of the Philippines stationed in the A court may grant a summary judgment to settle expeditiously a case
foreign country in which the record is kept, and authenticated by the if, on motion of either party, there appears from the pleadings,
seal of his office." depositions, admissions, and affidavits that no important issues of
fact are involved, except the amount of damages. In such event, the
The Court of Appeals likewise rejected the Bank’s argument that moving party is entitled to a judgment as a matter of law.4
Section 2, Rule 34 of the old Rules of Court allows the Bank to move
with the supporting Walden affidavit for partial summary judgment in In a motion for summary judgment, the crucial question is: are the
its favor. The Court of Appeals clarified that the Walden affidavit is issues raised in the pleadings genuine, sham or fictitious, as shown
not the supporting affidavit referred to in Section 2, Rule 34 that by affidavits, depositions or admissions accompanying the motion?5
would prove the lack of genuine issue between the parties. The Court
of Appeals concluded that even if the Walden affidavit is used for A genuine issue means an issue of fact which calls for the
purposes of summary judgment, the Bank must still comply with the presentation of evidence as distinguished from an issue which
procedure prescribed by the Rules to prove the foreign law. is fictitious or contrived so as not to constitute a genuine issue for
trial.6
The Issues
A perusal of the parties’ respective pleadings would show that there
The Bank contends that the Court of Appeals committed reversible are genuine issues of fact that necessitate formal trial. Guerrero’s
error in - complaint before the RTC contains a statement of the ultimate facts
on which he relies for his claim for damages. He is seeking damages
for what he asserts as "illegally withheld taxes charged against
34
interests on his checking account with the Bank, a returned check the witness cited Article 4, Sec. 13851 (a) & (b) of the California
worth US$18,000.00 due to signature verification problems, and Internal and Revenue Code as published in Derring’s California
unauthorized conversion of his account." In its Answer, the Bank set Code, a publication of Bancroft-Whitney Co., Inc. And as part of his
up its defense that the agreed foreign law to govern their contractual testimony, a full quotation of the cited section was offered in
relation bars the recovery of damages other than actual. Apparently, evidence by respondents." Likewise, in several naturalization cases, it
facts are asserted in Guerrero’s complaint while specific denials and was held by the Court that evidence of the law of a foreign country
affirmative defenses are set out in the Bank’s answer. on reciprocity regarding the acquisition of citizenship, although not
meeting the prescribed rule of practice, may be allowed and used as
True, the court can determine whether there are genuine issues in a basis for favorable action, if, in the light of all the circumstances, the
case based merely on the affidavits or counter-affidavits submitted by Court is "satisfied of the authenticity of the written proof offered."
the parties to the court. However, as correctly ruled by the Court of Thus, in a number of decisions, mere authentication of the Chinese
Appeals, the Bank’s motion for partial summary judgment as Naturalization Law by the Chinese Consulate General of Manila was
supported by the Walden affidavit does not demonstrate that held to be competent proof of that law." (Emphasis supplied)
Guerrero’s claims are sham, fictitious or contrived. On the contrary,
the Walden affidavit shows that the facts and material allegations as The Bank, however, cannot rely on Willamette Iron and Steel Works
pleaded by the parties are disputed and there are substantial triable v. Muzzal or Collector of Internal Revenue v. Fisher to support its
issues necessitating a formal trial. cause. These cases involved attorneys testifying in open court during
the trial in the Philippines and quoting the particular foreign laws
There can be no summary judgment where questions of fact are in sought to be established. On the other hand, the Walden affidavit was
issue or where material allegations of the pleadings are in taken abroad ex parte and the affiant never testified in open court.1a\
dispute.7 The resolution of whether a foreign law allows only the ^/phi1.net The Walden affidavit cannot be considered as proof of
recovery of actual damages is a question of fact as far as the trial New York law on damages not only because it is self-serving but also
court is concerned since foreign laws do not prove themselves in our because it does not state the specific New York law on damages. We
courts.8 Foreign laws are not a matter of judicial notice.9 Like any reproduce portions of the Walden affidavit as follows:
other fact, they must be alleged and proven. Certainly, the conflicting
allegations as to whether New York law or Philippine law applies to "3. In New York, "[n]ominal damages are damages in name
Guerrero’s claims present a clear dispute on material allegations only, trivial sums such as six cents or $1. Such damages are
which can be resolved only by a trial on the merits. awarded both in tort and contract cases when the plaintiff
establishes a cause of action against the defendant, but is
Under Section 24 of Rule 132, the record of public documents of a unable to prove" actual damages. Dobbs, Law of Remedies,
sovereign authority or tribunal may be proved by (1) an official § 3.32 at 294 (1993). Since Guerrero is claiming for actual
publication thereof or (2) a copy attested by the officer having the damages, he cannot ask for nominal damages.
legal custody thereof. Such official publication or copy must be
accompanied, if the record is not kept in the Philippines, with a 4. There is no concept of temperate damages in New York
certificate that the attesting officer has the legal custody thereof. The law. I have reviewed Dobbs, a well-respected treatise,
certificate may be issued by any of the authorized Philippine embassy which does not use the phrase "temperate damages" in its
or consular officials stationed in the foreign country in which the index. I have also done a computerized search for the
record is kept, and authenticated by the seal of his office. The phrase in all published New York cases, and have found no
attestation must state, in substance, that the copy is a correct copy of cases that use it. I have never heard the phrase used in
the original, or a specific part thereof, as the case may be, and must American law.
be under the official seal of the attesting officer.
5. The Uniform Commercial Code ("UCC") governs many
Certain exceptions to this rule were recognized in Asiavest Limited v. aspects of a Bank’s relationship with its depositors. In this
Court of Appeals10 which held that: case, it governs Guerrero’s claim arising out of the non-
payment of the $18,000 check. Guerrero claims that this
"x x x: was a wrongful dishonor. However, the UCC states that
"justifiable refusal to pay or accept" as opposed to
dishonor, occurs when a bank refuses to pay a check for
Although it is desirable that foreign law be proved in accordance with reasons such as a missing indorsement, a missing or
the above rule, however, the Supreme Court held in the case illegible signature or a forgery, § 3-510, Official Comment
of Willamette Iron and Steel Works v. Muzzal, that Section 41, Rule 2. ….. to the Complaint, MHT returned the check because
123 (Section 25, Rule 132 of the Revised Rules of Court) does not it had no signature card on …. and could not verify
exclude the presentation of other competent evidence to prove the Guerrero’s signature. In my opinion, consistent with the
existence of a foreign law. In that case, the Supreme Court considered UCC, that is a legitimate and justifiable reason not to pay.
the testimony under oath of an attorney-at-law of San Francisco,
California, who quoted verbatim a section of California Civil Code
and who stated that the same was in force at the time the obligations 6. Consequential damages are not available in the ordinary
were contracted, as sufficient evidence to establish the existence of case of a justifiable refusal to pay. UCC 1-106 provides that
said law. Accordingly, in line with this view, the Supreme Court in "neither consequential or special or punitive damages may
the Collector of Internal Revenue v. Fisher et al., upheld the Tax be had except as specifically provided in the Act or by
Court in considering the pertinent law of California as proved by the other rule of law". UCC 4-103 further provides that
respondents’ witness. In that case, the counsel for respondent consequential damages can be recovered only where there
"testified that as an active member of the California Bar since 1951, is bad faith. This is more restrictive than the New York
he is familiar with the revenue and taxation laws of the State of common law, which may allow consequential damages in a
California. When asked by the lower court to state the pertinent breach of contract case (as does the UCC where there is a
California law as regards exemption of intangible personal properties, wrongful dishonor).

35
7. Under New York law, requests for lost profits, damage to mere breach of contract for in such a case, as a matter of
reputation and mental distress are considered consequential law, only a private wrong and not a public right is
damages. Kenford Co., Inc. v. Country of Erie, 73 N.Y.2d involved. Thaler v. The North Insurance Company, 63
312, 319, 540 N.Y.S.2d 1, 4-5 (1989) (lost profits); Motif A.D.2d 921, 406 N.Y.S.2d 66 (1st Dep’t 1978)."12
Construction Corp. v. Buffalo Savings Bank, 50 A.D.2d
718, 374 N.Y.S..2d 868, 869-70 (4th Dep’t 1975) damage The Walden affidavit states conclusions from the affiant’s personal
to reputation); Dobbs, Law of Remedies §12.4(1) at 63 interpretation and opinion of the facts of the case vis a vis the alleged
(emotional distress). laws and jurisprudence without citing any law in particular. The
citations in the Walden affidavit of various U.S. court decisions do
8. As a matter of New York law, a claim for emotional not constitute proof of the official records or decisions of the U.S.
distress cannot be recovered for a breach of contract. Geler courts. While the Bank attached copies of some of the U.S. court
v. National Westminster Bank U.S.A., 770 F. Supp. 210, decisions cited in the Walden affidavit, these copies do not comply
215 (S.D.N.Y. 1991); Pitcherello v. Moray Homes, with Section 24 of Rule 132 on proof of official records or decisions
Ltd., 150 A.D.2d 860,540 N.Y.S.2d 387, 390 (3d Dep’t of foreign courts.
1989) Martin v. Donald Park Acres, 54 A.D.2d 975, 389
N.Y.S..2d 31, 32 (2nd Dep’t 1976). Damage to reputation is The Bank’s intention in presenting the Walden affidavit is to prove
also not recoverable for a contract. Motif Construction New York law and jurisprudence. However, because of the failure to
Corp. v. Buffalo Savings Bank, 374 N.Y.S.2d at 869-70.1a\ comply with Section 24 of Rule 132 on how to prove a foreign law
^/phi1.net and decisions of foreign courts, the Walden affidavit did not prove
the current state of New York law and jurisprudence. Thus, the Bank
9. In cases where the issue is the breach of a contract to has only alleged, but has not proved, what New York law and
purchase stock, New York courts will not take into jurisprudence are on the matters at issue.
consideration the performance of the stock after the breach.
Rather, damages will be based on the value of the stock at Next, the Bank makes much of Guerrero’s failure to submit an
the time of the breach, Aroneck v. Atkin, 90 A.D.2d 966, opposing affidavit to the Walden affidavit. However, the pertinent
456 N.Y.S.2d 558, 559 (4th Dep’t 1982), app. den. 59 provision of Section 3, Rule 35 of the old Rules of Court did not
N.Y.2d 601, 449 N.E.2d 1276, 463 N.Y.S.2d 1023 (1983). make the submission of an opposing affidavit mandatory, thus:

10. Under New York law, a party can only get "SEC. 3. Motion and proceedings thereon. – The motion shall be
consequential damages if they were the type that would served at least ten (10) days before the time specified for the hearing.
naturally arise from the breach and if they were "brought The adverse party prior to the day of hearing may serve opposing
within the contemplation of parties as the probable result of affidavits. After the hearing, the judgment sought shall be rendered
the breach at the time of or prior to contracting." Kenford forthwith if the pleadings, depositions and admissions on file,
Co., Inc. v. Country of Erie, 73 N.Y.2d 312, 319, 540 together with the affidavits, show that, except as to the amount of
N.Y.S.2d 1, 3 (1989), (quoting Chapman v. Fargo, 223 damages, there is no genuine issue as to any material fact and that the
N.Y. 32, 36 (1918). moving party is entitled to a judgment as a matter of law." (Emphasis
supplied)
11. Under New York law, a plaintiff is not entitled to
attorneys’ fees unless they are provided by contract or It is axiomatic that the term "may" as used in remedial law, is only
statute. E.g., Geler v. National Westminster Bank, 770 F. permissive and not mandatory.13
Supp. 210, 213 (S.D.N.Y. 1991); Camatron Sewing Mach,
Inc. v. F.M. Ring Assocs., Inc., 179 A.D.2d 165, 582
N.Y.S.2d 396 (1st Dep’t 1992); Stanisic v. Soho Landmark Guerrero cannot be said to have admitted the averments in the Bank’s
Assocs., 73 A.D.2d 268, 577 N.Y.S.2d 280, 281 (1st Dep’t motion for partial summary judgment and the Walden affidavit just
1991). There is no statute that permits attorney’s fees in a because he failed to file an opposing affidavit. Guerrero opposed the
case of this type. motion for partial summary judgment, although he did not present an
opposing affidavit. Guerrero may not have presented an opposing
affidavit, as there was no need for one, because the Walden affidavit
12. Exemplary, or punitive damages are not allowed for a did not establish what the Bank intended to prove. Certainly,
breach of contract, even where the plaintiff claims the Guerrero did not admit, expressly or impliedly, the veracity of the
defendant acted with malice. Geler v. National Westminster statements in the Walden affidavit. The Bank still had the burden of
Bank, 770 F.Supp. 210, 215 (S.D.N.Y. 1991); Catalogue proving New York law and jurisprudence even if Guerrero did not
Service of …chester11 _v. Insurance Co. of North America, present an opposing affidavit. As the party moving for summary
74 A.D.2d 837, 838, 425 N.Y.S.2d 635, 637 (2d Dep’t judgment, the Bank has the burden of clearly demonstrating the
1980); Senior v. Manufacturers Hanover Trust Co., 110 absence of any genuine issue of fact and that any doubt as to the
A.D.2d 833, 488 N.Y.S.2d 241, 242 (2d Dep’t 1985). existence of such issue is resolved against the movant.14

13. Exemplary or punitive damages may be recovered only Moreover, it would have been redundant and pointless for Guerrero
where it is alleged and proven that the wrong supposedly to submit an opposing affidavit considering that what the Bank seeks
committed by defendant amounts to a fraud aimed at the to be opposed is the very subject matter of the complaint. Guerrero
public generally and involves a high moral need not file an opposing affidavit to the Walden affidavit because
culpability. Walker v. Sheldon, 10 N.Y.2d 401, 179 N.E.2d his complaint itself controverts the matters set forth in the Bank’s
497, 223 N.Y.S.2d 488 (1961). motion and the Walden affidavit. A party should not be made to deny
matters already averred in his complaint.
14. Furthermore, it has been consistently held under New
York law that exemplary damages are not available for a
36
There being substantial triable issues between the parties, the courts a because the National Seamen Board cannot take judicial notice of the
quo correctly denied the Bank’s motion for partial summary Workmen's Insurance Law of Singapore. As an alternative, they
judgment. There is a need to determine by presentation of evidence in offered to pay private respondent Restituta C. Abordo the sum of
a regular trial if the Bank is guilty of any wrongdoing and if it is P30,000.00 as death benefits based on the Board's Memorandum
liable for damages under the applicable laws. Circular No. 25 which they claim should apply in this case.

This case has been delayed long enough by the Bank’s resort to a The Hearing Officer III, Rebene C. Carrera of the Ministry of Labor
motion for partial summary judgment. Ironically, the Bank has and Employment, after hearing the case, rendered judgment on June
successfully defeated the very purpose for which summary judgments 20, 1979, ordering herein petitioners "to pay jointly and severally the
were devised in our rules, which is, to aid parties in avoiding the following:
expense and loss of time involved in a trial.
I. US$30,600 (the 36-month salary of the
WHEREFORE, the petition is DENIED for lack of merit. The decreased)) or its equivalent in Philippine
Decision dated August 24, 1998 and the Resolution dated December currency as death compensation benefits;
14, 1998 of the Court of Appeals in CA-G.R. SP No. 42310 is
AFFIRMED. II. US$500.00 or its equivalent in Philippine
currency as funeral expenses;
SO ORDERED.
III. US$3,110 or 10% of the total amount
recovered as attorney's fees.

G.R. No. L-54204 September 30, 1982 It is also ordered that payment must be made thru
the National Seamen Board within ten (10) days
from receipt of this decision.
NORSE MANAGEMENT CO. (PTE) and PACIFIC SEAMEN
SERVICES, INC., petitioners,
vs. Petitioners appealed to the Ministry of Labor. On December 11,
NATIONAL SEAMEN BOARD, HON. CRESCENCIO M. 1979, the Ministry rendered its decision in this case as follows:
SIDDAYAO, OSCAR M. TORRES, REBENE C. CARRERA
and RESTITUTA C. ABORDO, respondents. Motion for reconsideration filed by respondents
from the Order of this Board dated 20 June 1979
Bito, Misa & Lozada Law Offices for petitioners. requiring them to pay complainant, jointly and
severally, the amount of Thirty-four thousand and
two hundred ten dollars ($34,210.00)
The Solicitor General and Jose A. Rico for respondents. representing death benefits, funeral expenses and
attorney's fees.

The facts in the main are not disputed. The

RELOVA, J.: deceased, husband of complainant herein, was
employed as a Second Engineer by respondents
In this petition for certiorari, petitioners pray that the order dated June and served as such in the vessel "M.T. Cherry
20, 1979 of the National Seamen Board, and the decision dated Earl" until that fatal day in May 1978 when,
December 11, 1979 of the Ministry of Labor be nullified and set while at sea, he suffered an apoplectic stroke and
aside, and that "if petitioners are found liable to private respondent, died four days later or on 29 May 1978. In her
such a liability be reduced to P30,000.00 only, in accordance with complaint filed before this Board, Abordo argued
respondent NSB's Standard Format of a Service Agreement." that the amount of compensation due her should
be based on the law where the vessel is
registered, which is Singapore law. Agreeing
Napoleon B. Abordo, the deceased husband of private respondent with said argument, this Board issued the
Restituta C. Abordo, was the Second Engineer of M.T. "Cherry Earl" questioned Order. Hence this Motion for
when he died from an apoplectic stroke in the course of his Reconsideration.
employment with petitioner NORSE MANAGEMENT COMPANY
(PTE). The M.T. "Cherry Earl" is a vessel of Singaporean Registry.
The late Napoleon B. Abordo at the time of his death was receiving a In their motion for reconsideration, respondents
monthly salary of US$850.00 (Petition, page 5). strongly argue that the law of Singapore should
not be applied in the case considering that their
responsibility was not alleged in the complaint
In her complaint for "death compensation benefits, accrued leave pay that no proof of the existence of the Workmen's
and time-off allowances, funeral expenses, attorney's fees and other Insurance Law of Singapore was ever presented
benefits and reliefs available in connection with the death of and that the Board cannot take judicial notice of
Napoleon B. Abordo," filed before the National Seamen Board, the Workmen's Insurance Law of Singapore. As
Restituta C. Abordo alleged that the amount of compensation due her an alternative, they offered to pay complainant
from petitioners Norse Management Co. (PTE) and Pacific Seamen the amount of Thirty Thousand Pesos
Services, Inc., principal and agent, respectively, should be based on (P30,000.00) as death benefits based on this
the law where the vessel is registered. On the other hand, petitioners Board's Memorandum Circular No. 25 which,
contend that the law of Singapore should not be applied in this case they maintained, should apply in this case.
37
The only issue we are called upon to rule is Philippines or the Workmen's Insurance Law of
whether or not the law of Singapore ought to be registry of the vessel whichever is
applied in this case. greater. (Emphasis supplied)

After an exhaustive study of jurisprudence on the In the aforementioned "Employment Agreement" between petitioners
matter. we rule in the affirmative. Respondents and the late Napoleon B. Abordo, it is clear that compensation shall
came out with a well-prepared motion which, to be paid under Philippine Law or the law of registry of petitioners'
our mind, is more appropriate and perhaps vessel, whichever is greater. Since private respondent Restituta C.
acceptable in the regular court of justice. Nothing Abordo was offered P30,000.00 only by the petitioners, Singapore
is raised in their motion but question of evidence. law was properly applied in this case.
But evidence is usually a matter of procedure of
which this Board, being merely a quasi-judicial The "Employment Agreement" is attached to the Supplemental
body, is not strict about. Complaint of Restituta C. Abordo and, therefore, it forms part
thereof. As it is familiar with Singapore Law, the National Seamen
It is true that the law of Singapore was not Board is justified in taking judicial notice of and in applying that law.
alleged and proved in the course of the hearing. In the case of VirJen Shipping and Marine Services, Inc. vs. National
And following Supreme Court decisions in a long Seamen Board, et al (L41297), the respondent Board promulgated a
line of cases that a foreign law, being a matter of decision, as follows:
evidence, must be alleged and proved, the law of
Singapore ought not to be recognized in this case. The facts established and/or admitted by the
But it is our considered opinion that the parties are the following: that the late Remigio
jurisprudence on this matter was never meant to Roldan was hired by the respondent as Ordinary
apply to cases before administrative or quasi- Seamen on board the M/V "Singapura Pertama,"
judicial bodies such as the National Seamen a vessel of Singapore Registry; that on September
Board. For well-settled also is the rule that 27, 1973, the deceased Remigio Roldan met an
administrative and quasi-judicial bodies are not accident resulting in his death while on board the
bound strictly by technical rules. It has always said M/V "Singapura Pertama" during the
been the policy of this Board, as enunciated in a performance of his duties; that on December 3,
long line of cases, that in cases of valid claims for 1973, the respondent Virjen Shipping and Marine
benefits on account of injury or death while in the Services, Inc. paid the complainant Natividad
course of employment, the law of the country in Roldan the amount of P6,000.00 representing
which the vessel is registered shall be considered. Workmen's Compensation benefits and donations
We see no reason to deviate from this well- of the company; that the amount of P4,870 was
considered policy. Certainly not on technical spent by the respondent company as burial
grounds as movants herein would like us to. expenses of the deceased Remegio Roldan.

WHEREFORE, the motion for reconsideration is The only issue therefore remaining to be resolved
hereby denied and the Order of tills Board dated by the Board in connection with the particular
20 June 1979 affirmed. Let execution issue case, is whether or not under the existing laws
immediately. (Philippine and foreign), the complainant
Natividad Roldan is entitled to additional benefits
In Section 5(B) of the "Employment Agreement" between Norse other than those mentioned earlier. The Board
Management Co. (PTE) and the late Napoleon B. Abordo, which is takes judicial notice, (as a matter of fact, the
Annex "C" of the Supplemental Complaint, it was stipulated that: respondent having admitted in its memorandum)
of the fact that "Singapura Pertama" is a foreign
In the event of illness or injury to Employee vessel of Singapore Registry and it is the policy
arising out of and in the course of his of this Board that in case of award of benefits to
employment and not due to his own willful seamen who were either injured in the
misconduct and occurring whilst on board any performance of its duties or who died while in the
vessel to which he may be assigned, but not any course of employment is to consider the benefits
other time, the EMPLOYER win provide allowed by the country where the vessel is
employee with free medical attention, including registered. Likewise, the Board takes notice that
hospital treatment, also essential medical Singapore maritime laws relating to workmen's
treatment in the course of repatriation and until compensation benefits are similar to that of the
EMPLOYEE's arrival at his point of origin. If Hongkong maritime laws which provides that in
such illness or injury incapacitates the case of death, the heirs of the deceased seaman
EMPLOYEE to the extent the EMPLOYEE's should receive the equivalent of 36 months wages
services must be terminated as determined by a of the deceased seaman; in other words, 36
qualified physician designated by the months multiplied by the basic monthly wages. In
EMPLOYER and provided such illness or injury the employment contract submitted with this
was not due in part or whole to his willful act, Board, the terms of which have never been at
neglect or misconduct compensation shall be issue, is shown that the monthly salary of the
paid to employee in accordance with and subject deceased Remigio Roldan at the time of his death
to the limitations of the Workmen's was US$80.00; such that, 36 months multiplied
Compensation Act of the Republic of the by $80 would come up to US$2,880 and at the
rate of P7.00 to $1.00, the benefits due the
38
claimant would be P20,160. However, since there 1. REMEDIAL LAW; ACTIONS; VENUE; STIPULATIONS AS
was voluntary payment made in the amount of TO VENUE BETWEEN PARTIES DOES NOT PRECLUDE
P6,000 and funeral expenses which under the FILING OF SUITS IN THE RESIDENCE OF PLAINTIFF OR
Workmen's Compensation Law had a maximum DEFENDANT. — A stipulation as to venue does not preclude the
of P200.00, the amount of P6,200.00 should be filing of suits in the residence of plaintiff or defendant under Section
deducted from P20,160 and the difference would 2 (b), Rule 4, Rules of Court, in the absence of qualifying or
be P13,960.00. restrictive word a in the agreement which would indicate that the
place named is the only venue agreed upon by the parties. (Polytrade
WHEREFORE, the Board orders the respondent Corporation v. Blanco, G.R. No. L-27033, December 31, 1969 and
Virjen Shipping and Marine Services, Inc. to pay other cases cited)
the complainant Natividad Roldan the amount of
P13,960.00 within ten (10) days from receipt of 2. INTERNATIONAL LAW; JURISDICTION, DEFINED. — In
this Decision. The Board also orders the International Law, jurisdiction is often defined as the right of a State
respondent that payment should be made through to exercise authority over persons and things within its boundaries
the National Seamen Board. subject to certain exceptions.

3. ID.; SOVEREIGNTY; CONCEPT, CONSTRUED. — A State

The foregoing decision was assailed as null and void for allegedly does not assume jurisdiction over traveling sovereigns, ambassadors
having been rendered without jurisdiction and for awarding and diplomatic representatives of other States, and foreign military
compensation benefits beyond the maximum allowable and on the units stationed in or marching through State territory with the
ground of res judicata. This Court in its resolution dated October 27, permission of the latter’s authorities. This authority, which finds its
1975 and December 12, 1975, respectively dismissed for lack of source in the concept of sovereignty, is exclusive within and
merit the petition as well as the motion for reconsideration in said throughout the domain of the State. A State is competent to take hold
G.R. No. L- 41297. of any judicial matter it sees fit by making its courts and agencies
assume jurisdiction over all kinds of cases brought before them (J.
Furthermore, Article 20, Labor Code of the Philippines, provides that Salonga, Private International Law, 1981, pp. 37-38).
the National Seamen Board has original and exclusive jurisdiction
over all matters or cases including money claims, involving 4. ID.; JURISDICTION; PRINCIPLE OF FORUM NON
employer-employee relations, arising out of or by virtue of any law or CONVENIENS; APPLICATION OF PRINCIPLE ADDRESSED
contracts involving Filipino seamen for overseas employment. Thus, TO THE SOUND DISCRETION OF THE COURT. — Whether a
it is safe to assume that the Board is familiar with pertinent Singapore suit should be entertained or dismissed on the basis of the principle of
maritime laws relative to workmen's compensation. Moreover, the forum non conveniens depends largely upon the facts of the particular
Board may apply the rule on judicial notice and, "in administrative case and is addressed to the, sound discretion of the trial court (J.
proceedings, the technical rules of procedure — particularly of Salonga, Private International Law, 1981, p. 49).
evidence — applied in judicial trials, do not strictly apply." (Oromeca
Lumber Co. Inc. vs. Social Security Commission, 4 SCRA 1188). 5. REMEDIAL LAW; ACTIONS; APPEAL, A DEFENDANT
CANNOT PLEAD ANY DEFENSE NOT INTERPOSED IN THE
Finally, Article IV of the Labor Code provides that "all doubts in the COURT BELOW. — Lastly, private respondents allege that neither
implementation and interpretation of the provisions of this code, the petitioner based at Hongkong nor its Philippine branch is
including its implementing rules and resolved in favor of labor. involved in the transaction sued upon. This is a vain attempt on their
part to further thwart the proceedings below inasmuch as well-known
is the rule that a defendant cannot plead any defense that has not been
For lack of merit, this petition is DENIED. interposed in the court below.

SO ORDERED.

DECISION

MEDIALDEA, J.:
[G.R. No. 72494. August 11, 1989.]

HONGKONG AND SHANGHAI BANKING This is a petition for review on certiorari of the decision of the
CORPORATION, Petitioner, v. JACK ROBERT SHERMAN, Intermediate Appellate Court (now Court of Appeals) dated August
DEODATO RELOJ AND THE INTERMEDIATE APPELLATE 2, 1985, which reversed the order of the Regional Trial Court dated
COURT, Respondents. February 28, 1985 denying the Motion to Dismiss filed by private
respondents Jack Robert Sherman and Deodato Reloj.chanrobles
Quiason, Makalintal, Barot & Torres for Petitioner. virtualawlibrary chanrobles.com:chanrobles.com.ph

Alejandro, Aranzaso & Associates for Private Respondents. A complaint for collection of a sum of money (pp. 49-52, Rollo) was
filed by petitioner Hongkong and Shanghai Banking Corporation
(hereinafter referred to as petitioner BANK) against private
SYLLABUS respondents Jack Robert Sherman and Deodato Reloj, docketed as
Civil Case No. Q-42850 before the Regional Trial Court of Quezon
City, Branch 84.

39
It appears that sometime in 1981, Eastern Book Supply Service PTE, "On the second ground, it is asserted that defendant Robert Sherman
Ltd. (hereinafter referred to as COMPANY), a company incorporated is not a citizen nor a resident of the Philippines. This argument holds
in Singapore applied with, and was granted by, the’ Singapore branch no water. Jurisdiction over the persons of defendants is acquired by
of petitioner BANK an overdraft facility in the maximum amount of service of summons and copy of the complaint on them. There has
Singapore dollars 200,000.00 (which amount was subsequently been a valid service of summons on both defendants and in fact the
increased to Singapore dollar 375,000.00) with interest at 3% over same is admitted when said defendants filed a ‘Motion for Extension
petitioner BANK’s prime rate, payable monthly, on amounts due of Time to File Responsive Pleading’ on December 5,
under said overdraft facility; as a security for the repayment by the 1984.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
COMPANY of sum advanced by petitioner BANK to it through the
aforesaid overdraft facility, on October 7, 1982, both private "WHEREFORE, the Motion to Dismiss is hereby DENIED.
respondents and a certain Robin de Clive Lowe, all of whom were
directors of the COMPANY at such time, executed a Joint and "SO ORDERED."cralaw virtua1aw library
Several Guarantee (p. 53, Rollo) in favor of petitioner BANK
whereby private respondents and Lowe agreed to pay, jointly and A motion for reconsideration of the said order was filed by private
severally, on demand all sums owed by the COMPANY to petitioner respondents which was, however, denied (p. 66, Rollo). Private
BANK under the a forestated overdraft facility. respondents then filed before the respondent Intermediate Appellate
Court (now Court of Appeals) a petition for prohibition with
The Joint and Several Guarantee provides, inter alia, that: preliminary injunction and/or prayer for a restraining order (pp. 39-
48, Rollo). On August 2, 1985, the respondent Court rendered a
"This guarantee and all rights, obligations and liabilities arising decision (p. 37, Rollo), the dispositive portion of which
hereunder shall be construed and determined under and may be reads:jgc:chanrobles.com.ph
enforced in accordance with the laws of the Republic of Singapore.
We hereby agree that the Courts of Singapore shall have jurisdiction "WHEREFORE, the petition for prohibition with preliminary
overall disputes arising under this guarantee . . ." (p. 33-A, Rollo). injunction is hereby GRANTED. The respondent Court is enjoined a
taking from further cognizance of the case and to dismiss the same
The COMPANY failed to pay its obligation. Thus, petitioner BANK for filing with the proper court of Singapore which is the proper
demanded payment of the obligation from private respondents, forum. No costs.
conformably with the provisions of the Joint and Several Guarantee.
Inasmuch as the private respondents still failed to pay, petitioner SO ORDERED."cralaw virtua1aw library
BANK filed the abovementioned complaint.
The motion for reconsideration was denied (p. 38, Rollo),hence, the
On December 14, 1984, private respondents filed a motion to dismiss present petition.
(pp. 54-56, Rollo) which was opposed by petitioner BANK (pp. 58-
62, Rollo). Acting on the motion, the trial court issued an order dated The main issue is whether or not Philippine courts have jurisdiction
February 28, 1985 (pp. 6465, Rollo), which read as over the suit.
follows:jgc:chanrobles.com.ph
The controversy stems from the interpretation of a provision in the
"In a Motion to Dismiss filed on December 14, 1984, the defendants Joint and Several Guarantee, to wit:jgc:chanrobles.com.ph
seek the dismissal of the complaint on two grounds,
namely:jgc:chanrobles.com.ph "(14) This guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may be
"1. That the court has no jurisdiction over the subject matter of the enforced in accordance with the laws of the Republic of Singapore.
complaint; and We hereby agree that the Courts in Singapore shall have jurisdiction
over all disputes arising under this guarantee . . ." (p. 53-A, Rollo)
"2. That the court has no jurisdiction over the persons of the
defendants. In rendering the decision in favor of private respondents, the Court of
Appeals made the following observations (pp. 35-36,
"In the light of the Opposition thereto filed by plaintiff, the Court Rollo):jgc:chanrobles.com.ph
finds no merit in the motion.
"There are significant aspects of the case to which our attention is
"On the first ground, defendants claim that by virtue of the provision invited. The loan was obtained by Eastern Book Service PTE, Ltd., a
in the Guarantee (the actionable document) which reads — company, incorporated in Singapore. The loan was granted by the
Singapore Branch of Hongkong and Shanghai Banking Corporation.
"This guarantee and all rights, obligations and liabilities arising The Joint and Several Guarantee was also concluded in Singapore.
hereunder shall be construed and determined under and may be The loan was in Singaporean dollars and the repayment thereof also
enforced in accordance with the laws of the Republic of Singapore. is the same currency. The transaction, to say the least, took place in
We hereby agree that the courts in Singapore shall have jurisdiction Singaporean setting in which the law of that country is the measure
over all disputes arising under this guarantee,’ by which that relationship of the panties will be governed.

the Court has no jurisdiction over the subject matter of the case. The x       x       x
Court finds and concludes otherwise. There is nothing in the
Guarantee which says that the courts of Singapore shall have
jurisdiction to the exclusion of the courts of other countries or "Contrary to the position taken by respondents, the guarantee
nations. Also, it has long been established in law and jurisprudence agreement commands that any litigation will be before the courts of
that jurisdiction of courts is fixed by law; it cannot be conferred by Singapore and that the rights and obligations of the parties shall be
the will, submission or consent of the parties. constructed and determined in accordance with the laws of the
Republic of Singapore. A closer examination of paragraph 14 of the
40
Guarantee Agreement upon which the motion to dismiss is based, Al. v. Lagamon, etc., Et Al., G.R. No. 57250, October 30, 1981, 108
employs in clear and unmistakable (sic) terms the word ‘shall’ which SCRA 740, where the stipulation was" (i)n case of litigation,
under statutory construction is mandatory. jurisdiction shall be vested in the Court of Davao City." We held:

"Thus, it was ruled that:chanrob1es virtual 1aw library "Anent the claim that Davao City had been stipulated as the venue,
suffice it to say that a stipulation as to venue does not preclude the
‘. . . the word ‘shall’ is imperative, operating to impose a duty which filing of suits in the residence of plaintiff or defendant under Section
may be enforced’ (Dizon v. Encarnacion, 9 SCRA 714). 2 (b), Rule 4, Rules of Court, in the absence of qualifying or
restrictive word a in the agreement which would indicate that the
"There is nothing more imperative and restrictive than what the place named is the only venue agreed upon by the parties."
agreement categorically commands that ‘all rights, obligations, and
liabilities arising hereunder shall be construed and determined under Applying the foregoing to the case at bar, the parties did not thereby
and may be enforced in accordance with the laws of the Republic of stipulate that only the courts of Singapore, to the exclusion of all the
Singapore."cralaw virtua1aw library rest, has jurisdiction. Neither did the clause in question operate to
divest Philippine courts of jurisdiction, In International Law,
While it is true that "the transaction took place in Singaporean jurisdiction is often defined as the right of a State to exercise
setting" and that the Joint and Several Guarantee contains a choice- authority over persons and things within its boundaries subject to
of-forum clause, the very essence of due process dictates that the certain exceptions. Thus, a State does not assume jurisdiction over
stipulation that" [t]his guarantee and all rights, obligations and traveling sovereigns, ambassadors and diplomatic representatives of
liabilities arising hereunder shall be construed and determined under other States, and foreign military units stationed in or marching
and may be enforced in accordance with the laws of the Republic of through State territory with the permission of the latter’s authorities.
Singapore. We hereby agree that the Courts in Singapore shall have This authority, which finds its source in the concept of sovereignty, is
jurisdiction over all disputes arising under this guarantee" be liberally exclusive within and throughout the domain of the State. A State is
construed. One basic principle underlies all rules of jurisdiction in competent to take hold of any judicial matter it sees fit by making its
International Law: a State does not have jurisdiction in the absence of courts and agencies assume jurisdiction over all kinds of cases
some reasonable basis for exercising it, whether the proceedings are brought before them (J. Salonga, Private International Law, 1981, pp.
in rem, quasi in rem or in personam. To be reasonable, the 37-38).
jurisdiction must be based on some minimum contacts that will not
offend traditional notions of fair play and substantial justice (J. As regards the issue on improper venue, petitioner BANK avers that
Salonga, Private International Law, 1981, p. 46). Indeed, as pointed- the objection to improper venue has been waived. However, We
out by petitioner BANK at the outset, the instant case presents a very agree with the ruling of the respondent Court
odd situation. In the ordinary habits of life, anyone would be that:jgc:chanrobles.com.ph
disinclined to litigate before a foreign tribunal, with more reason as a
defendant. However, in this case, private respondents are Philippine "While in the main, the motion to dismiss fails to categorically use
residents (a fact which was not disputed by them) who would rather with exactitude the words ‘improper venue’ it can be perceived from
face a complaint against them before a foreign court and in the the general thrust and context of the motion that what is meant is
process incur considerable expenses, not to mention inconvenience, improper venue. The use of the word ‘jurisdiction’ was merely an
than to have a Philippine court try and resolve the case. Private attempt to copy-cat the same word employed in the guarantee
respondents’ stance is hardly comprehensible, unless their ultimate agreement but conveys the concept of `venue.’ Brushing aside all
intent is to evade, or at least delay, the payment of a just technicalities, it would appear that jurisdiction was used loosely as to
obligation.chanrobles law library be synonymous with venue. It is in this spirit that this Court must
view the motion to dismiss. . . ." (p. 35, Rollo).
The defense of private respondents that the complaint should have
been filed in Singapore is based merely on technicality. They did not At any rate, this issue is now of no moment because We hold that
even claim, much less prove, that the filing of the action here will venue here was properly laid for the same reasons discussed above.
cause them any unnecessary trouble, damage, or expense. On the
other hand, there is no showing that petitioner BANK filed the action The respondent Court likewise ruled that (pp. 36-37,
here just to harass private respondents. Rollo):jgc:chanrobles.com.ph

In the case of Polytrade Corporation v. Blanco, G.R. No. L-27033, ". . .In a convict problem, a court will simply refuse to entertain the
October 31, 1969, 30 SCRA 187, it was ruled:jgc:chanrobles.com.ph case if it is not authorized by law to exercise jurisdiction. And even if
it is so authorized, it may still refuse to entertain the case by applying
". . . An accurate reading, however, of the stipulation, "The parties the principle of forum non conveniens. . . ."cralaw virtua1aw library
agree to sue and be sued in the Courts of Manila,’ does not preclude
the filing of suits in the residence of plaintiff or defendant. The plain However, whether a suit should be entertained or dismissed on the
meaning is that the parties merely consented to be sued in Manila. basis of the principle of forum non conveniens depends largely upon
Qualifying or restrictive words which would indicate that Manila and the facts of the particular case and is addressed to the, sound
Manila alone is the venue are totally absent therefrom. We cannot discretion of the trial court (J. Salonga, Private International Law,
read into that clause that plaintiff and defendant bound themselves to 1981, p. 49). Thus, the respondent Court should not have relied on
file suits with respect to the last two transactions in question only or such principle.
exclusively in Manila. For, that agreement did not change or transfer
venue. It simply is permissive. The parties solely agreed to add the Although the Joint and Several Guarantee prepared by petitioner
courts of Manila as tribunals to which they may resort. They did not BANK is a contract of adhesion and that consequently, it cannot be
waive their right to pursue remedy in the courts specifically permitted to take a stand contrary to the stipulations of the contract,
mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur." substantial bases exist for petitioner BANK’s choice of forum, as
discussed earlier.
This ruling was reiterated in the case of Neville Y. Lamis Ents., Et.
41
Lastly, private respondents allege that neither the petitioner based at
Hongkong nor its Philippine branch is involved in the transaction
sued upon. This is a vain attempt on their part to further thwart the
proceedings below inasmuch as well-known is the rule that a
defendant cannot plead any defense that has not been interposed in
the court below.

ACCORDINGLY, the decision of the respondent Court is hereby

REVERSED and the decision of the Regional Trial Court is
REINSTATED, with costs against private respondents. This decision
is immediately executory.

SO ORDERED.

42