G.R. No.

149177 November 23, 2007 Threatened with impending unemployment, respondent, through his lawyer,
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., requested a negotiation conference and demanded that he be assigned to the
Petitioners, BBRI project. Nippon insisted that respondent’s contract was for a fixed term that
vs. had already expired, and refused to negotiate for the renewal of the ICA.10
MINORU KITAMURA, Respondent. As he was not able to generate a positive response from the petitioners,
DECISION respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for
NACHURA, J.: specific performance and damages with the Regional Trial Court of Lipa City.11
Before the Court is a petition for review on certiorari under Rule 45 of the Rules For their part, petitioners, contending that the ICA had been perfected in Japan
of Court assailing the April 18, 2001 Decision1 of the Court of Appeals (CA) in CA- and executed by and between Japanese nationals, moved to dismiss the complaint
G.R. SP No. 60827, and the July 25, 2001 Resolution2 denying the motion for for lack of jurisdiction. They asserted that the claim for improper pre-termination
reconsideration thereof. of respondent's ICA could only be heard and ventilated in the proper courts of
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), Japan following the principles of lex loci celebrationis and lex contractus.12
a Japanese consultancy firm providing technical and management support in the In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the
infrastructure projects of foreign governments,3 entered into an Independent replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI
Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese Project.13
national permanently residing in the Philippines.4 The agreement provides that On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank14
respondent was to extend professional services to Nippon for a year starting on that matters connected with the performance of contracts are regulated by the
April 1, 1999.5 Nippon then assigned respondent to work as the project manager law prevailing at the place of performance,15 denied the motion to dismiss.16 The
of the Southern Tagalog Access Road (STAR) Project in the Philippines, following trial court subsequently denied petitioners' motion for reconsideration,17
the company's consultancy contract with the Philippine Government.6 prompting them to file with the appellate court, on August 14, 2000, their first
When the STAR Project was near completion, the Department of Public Works and Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On
Highways (DPWH) engaged the consultancy services of Nippon, on January 28, August 23, 2000, the CA resolved to dismiss the petition on procedural grounds—
2000, this time for the detailed engineering and construction supervision of the for lack of statement of material dates and for insufficient verification and
Bongabon-Baler Road Improvement (BBRI) Project. 7 Respondent was named as certification against forum shopping.19 An Entry of Judgment was later issued by
the project manager in the contract's Appendix 3.1.8 the appellate court on September 20, 2000.20
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager Aggrieved by this development, petitioners filed with the CA, on September 19,
for its International Division, informed respondent that the company had no more 2000, still within the reglementary period, a second Petition for Certiorari under
intention of automatically renewing his ICA. His services would be engaged by the Rule 65 already stating therein the material dates and attaching thereto the
company only up to the substantial completion of the STAR Project on March 31, proper verification and certification. This second petition, which substantially
2000, just in time for the ICA's expiry.9 raised the same issues as those in the first, was docketed as CA-G.R. SP No.
60827.21
Ruling on the merits of the second petition, the appellate court rendered the SP No. 60827 (fundamentally raising the same issues as those in the first one) and
assailed April 18, 2001 Decision22 finding no grave abuse of discretion in the trial the instant petition for review thereof.
court's denial of the motion to dismiss. The CA ruled, among others, that the We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the
principle of lex loci celebrationis was not applicable to the case, because nowhere petition's defective certification of non-forum shopping, it was a dismissal without
in the pleadings was the validity of the written agreement put in issue. The CA prejudice.27 The same holds true in the CA's dismissal of the said case due to
thus declared that the trial court was correct in applying instead the principle of defects in the formal requirement of verification28 and in the other requirement
lex loci solutionis.23 in Rule 46 of the Rules of Court on the statement of the material dates. 29 The
Petitioners' motion for reconsideration was subsequently denied by the CA in the dismissal being without prejudice, petitioners can re-file the petition, or file a
assailed July 25, 2001 Resolution. 24 second petition attaching thereto the appropriate verification and certification—
Remaining steadfast in their stance despite the series of denials, petitioners as they, in fact did—and stating therein the material dates, within the prescribed
instituted the instant Petition for Review on Certiorari25 imputing the following period30 in Section 4, Rule 65 of the said Rules.31
errors to the appellate court: The dismissal of a case without prejudice signifies the absence of a decision on the
A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE merits and leaves the parties free to litigate the matter in a subsequent action as
TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT though the dismissed action had not been commenced. In other words, the
CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE termination of a case not on the merits does not bar another action involving the
PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE same parties, on the same subject matter and theory.32
NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN Necessarily, because the said dismissal is without prejudice and has no res judicata
TOKYO, JAPAN. effect, and even if petitioners still indicated in the verification and certification of
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE the second certiorari petition that the first had already been dismissed on
NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN procedural grounds,33 petitioners are no longer required by the Rules to indicate
THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.26 in their certification of non-forum shopping in the instant petition for review of the
The pivotal question that this Court is called upon to resolve is whether the subject second certiorari petition, the status of the aforesaid first petition before the CA.
matter jurisdiction of Philippine courts in civil cases for specific performance and In any case, an omission in the certificate of non-forum shopping about any event
damages involving contracts executed outside the country by foreign nationals that will not constitute res judicata and litis pendentia, as in the present case, is
may be assailed on the principles of lex loci celebrationis, lex contractus, the "state not a fatal defect. It will not warrant the dismissal and nullification of the entire
of the most significant relationship rule," or forum non conveniens. proceedings, considering that the evils sought to be prevented by the said
However, before ruling on this issue, we must first dispose of the procedural certificate are no longer present.34
matters raised by the respondent. The Court also finds no merit in respondent's contention that petitioner Hasegawa
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP is only authorized to verify and certify, on behalf of Nippon, the certiorari petition
No. 60205 has already barred the filing of the second petition docketed as CA-G.R. filed with the CA and not the instant petition. True, the Authorization35 dated
September 4, 2000, which is attached to the second certiorari petition and which
is also attached to the instant petition for review, is limited in scope—its wordings decision, to elevate the entire case by appeal in due course.44 While there are
indicate that Hasegawa is given the authority to sign for and act on behalf of the recognized exceptions to this rule,45 petitioners' case does not fall among them.
company only in the petition filed with the appellate court, and that authority This brings us to the discussion of the substantive issue of the case.
cannot extend to the instant petition for review.36 In a plethora of cases, however, Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question
this Court has liberally applied the Rules or even suspended its application its jurisdiction to hear and resolve the civil case for specific performance and
whenever a satisfactory explanation and a subsequent fulfillment of the damages filed by the respondent. The ICA subject of the litigation was entered
requirements have been made.37 Given that petitioners herein sufficiently into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in
explained their misgivings on this point and appended to their Reply38 an updated the Japanese language. Thus, petitioners posit that local courts have no
Authorization39 for Hasegawa to act on behalf of the company in the instant substantial relationship to the parties46 following the [state of the] most
petition, the Court finds the same as sufficient compliance with the Rules. significant relationship rule in Private International Law.47
However, the Court cannot extend the same liberal treatment to the defect in the The Court notes that petitioners adopted an additional but different theory when
verification and certification. As respondent pointed out, and to which we agree, they elevated the case to the appellate court. In the Motion to Dismiss48 filed with
Hasegawa is truly not authorized to act on behalf of Nippon in this case. The the trial court, petitioners never contended that the RTC is an inconvenient forum.
aforesaid September 4, 2000 Authorization and even the subsequent August 17, They merely argued that the applicable law which will determine the validity or
2001 Authorization were issued only by Nippon's president and chief executive invalidity of respondent's claim is that of Japan, following the principles of lex loci
officer, not by the company's board of directors. In not a few cases, we have ruled celebrationis and lex contractus.49 While not abandoning this stance in their
that corporate powers are exercised by the board of directors; thus, no person, petition before the appellate court, petitioners on certiorari significantly invoked
not even its officers, can bind the corporation, in the absence of authority from the defense of forum non conveniens.50 On petition for review before this Court,
the board.40 Considering that Hasegawa verified and certified the petition only on petitioners dropped their other arguments, maintained the forum non conveniens
his behalf and not on behalf of the other petitioner, the petition has to be denied defense, and introduced their new argument that the applicable principle is the
pursuant to Loquias v. Office of the Ombudsman.41 Substantial compliance will not [state of the] most significant relationship rule.51
suffice in a matter that demands strict observance of the Rules.42 While technical Be that as it may, this Court is not inclined to deny this petition merely on the basis
rules of procedure are designed not to frustrate the ends of justice, nonetheless, of the change in theory, as explained in Philippine Ports Authority v. City of Iloilo.52
they are intended to effect the proper and orderly disposition of cases and We only pointed out petitioners' inconstancy in their arguments to emphasize
effectively prevent the clogging of court dockets.43 their incorrect assertion of conflict of laws principles.
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition To elucidate, in the judicial resolution of conflicts problems, three consecutive
to question the trial court's denial of their motion to dismiss. It is a well- phases are involved: jurisdiction, choice of law, and recognition and enforcement
established rule that an order denying a motion to dismiss is interlocutory, and of judgments. Corresponding to these phases are the following questions: (1)
cannot be the subject of the extraordinary petition for certiorari or mandamus. Where can or should litigation be initiated? (2) Which law will the court apply?
The appropriate recourse is to file an answer and to interpose as defenses the and (3) Where can the resulting judgment be enforced?53
objections raised in the motion, to proceed to trial, and, in case of an adverse
Analytically, jurisdiction and choice of law are two distinct concepts.54 Jurisdiction matter jurisdiction are the principles of lex loci celebrationis and lex contractus,
considers whether it is fair to cause a defendant to travel to this state; choice of and the "state of the most significant relationship rule."
law asks the further question whether the application of a substantive law which The Court finds the invocation of these grounds unsound.
will determine the merits of the case is fair to both parties. The power to exercise Lex loci celebrationis relates to the "law of the place of the ceremony"63 or the law
jurisdiction does not automatically give a state constitutional authority to apply of the place where a contract is made.64 The doctrine of lex contractus or lex loci
forum law. While jurisdiction and the choice of the lex fori will often coincide, the contractus means the "law of the place where a contract is executed or to be
"minimum contacts" for one do not always provide the necessary "significant performed."65 It controls the nature, construction, and validity of the contract66
contacts" for the other.55 The question of whether the law of a state can be and it may pertain to the law voluntarily agreed upon by the parties or the law
applied to a transaction is different from the question of whether the courts of intended by them either expressly or implicitly.67 Under the "state of the most
that state have jurisdiction to enter a judgment.56 significant relationship rule," to ascertain what state law to apply to a dispute, the
In this case, only the first phase is at issue—jurisdiction.1âwphi1 Jurisdiction, court should determine which state has the most substantial connection to the
however, has various aspects. For a court to validly exercise its power to occurrence and the parties. In a case involving a contract, the court should
adjudicate a controversy, it must have jurisdiction over the plaintiff or the consider where the contract was made, was negotiated, was to be performed, and
petitioner, over the defendant or the respondent, over the subject matter, over the domicile, place of business, or place of incorporation of the parties.68 This rule
the issues of the case and, in cases involving property, over the res or the thing takes into account several contacts and evaluates them according to their relative
which is the subject of the litigation.57 In assailing the trial court's jurisdiction importance with respect to the particular issue to be resolved.69
herein, petitioners are actually referring to subject matter jurisdiction. Since these three principles in conflict of laws make reference to the law
Jurisdiction over the subject matter in a judicial proceeding is conferred by the applicable to a dispute, they are rules proper for the second phase, the choice of
sovereign authority which establishes and organizes the court. It is given only by law.70 They determine which state's law is to be applied in resolving the
law and in the manner prescribed by law.58 It is further determined by the substantive issues of a conflicts problem.71 Necessarily, as the only issue in this
allegations of the complaint irrespective of whether the plaintiff is entitled to all case is that of jurisdiction, choice-of-law rules are not only inapplicable but also
or some of the claims asserted therein.59 To succeed in its motion for the dismissal not yet called for.
of an action for lack of jurisdiction over the subject matter of the claim, 60 the Further, petitioners' premature invocation of choice-of-law rules is exposed by the
movant must show that the court or tribunal cannot act on the matter submitted fact that they have not yet pointed out any conflict between the laws of Japan and
to it because no law grants it the power to adjudicate the claims.61 ours. Before determining which law should apply, first there should exist a conflict
In the instant case, petitioners, in their motion to dismiss, do not claim that the of laws situation requiring the application of the conflict of laws rules.72 Also, when
trial court is not properly vested by law with jurisdiction to hear the subject the law of a foreign country is invoked to provide the proper rules for the solution
controversy for, indeed, Civil Case No. 00-0264 for specific performance and of a case, the existence of such law must be pleaded and proved.73
damages is one not capable of pecuniary estimation and is properly cognizable by It should be noted that when a conflicts case, one involving a foreign element, is
the RTC of Lipa City.62 What they rather raise as grounds to question subject brought before a court or administrative agency, there are three alternatives open
to the latter in disposing of it: (1) dismiss the case, either because of lack of
jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction 2) Saudi Arabian Airlines vs. Rebesemcio et. al. January 14, 2015,
over the case and apply the internal law of the forum; or (3) assume jurisdiction
over the case and take into account or apply the law of some other State or G.R. No. 198587, January 14, 2015
States.74 The court’s power to hear cases and controversies is derived from the SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA, Petitioners, v. MA.
Constitution and the laws. While it may choose to recognize laws of foreign JOPETTE M. REBESENCIO, MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A.
nations, the court is not limited by foreign sovereign law short of treaties or other CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ, Respondents.
formal agreements, even in matters regarding rights provided by foreign DECISION
sovereigns.75 LEONEN, J.:
Neither can the other ground raised, forum non conveniens,76 be used to deprive All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.
the trial court of its jurisdiction herein. First, it is not a proper basis for a motion
to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a This is a Petition for Review on Certiorari with application for the issuance of a
ground.77 Second, whether a suit should be entertained or dismissed on the basis temporary restraining order and/or writ of preliminary injunction under Rule 45 of
of the said doctrine depends largely upon the facts of the particular case and is the 1997 Rules of Civil Procedure praying that judgment be rendered reversing and
addressed to the sound discretion of the trial court.78 In this case, the RTC decided setting aside the June 16, 2011 Decision1 and September 13, 2011 Resolution2 of the
to assume jurisdiction. Third, the propriety of dismissing a case based on this Court of Appeals in CA-G.R. SP. No. 113006.
principle requires a factual determination; hence, this conflicts principle is more
properly considered a matter of defense.79 Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and
Accordingly, since the RTC is vested by law with the power to entertain and hear existing under the laws of Jeddah, Kingdom of Saudi Arabia. It has a Philippine office
the civil case filed by respondent and the grounds raised by petitioners to assail located at 4/F, Metro House Building, Sen. Gil J. Puyat Avenue, Makati City. 3 In its
that jurisdiction are inappropriate, the trial and appellate courts correctly denied Petition filed with this court, Saudia identified itself as
the petitioners’ motion to dismiss. follows:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the petition for review on certiorari is DENIED. 1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal
SO ORDERED. Decree No. M/24 of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of Saudi Arabia
ANTONIO EDUARDO B. NACHURA ("KSA"). Its Philippine Office is located at 4/F Metro House Building, Sen, Gil J. Puyat
Associate Justice Avenue, Makati City (Philippine Office). It may be served with orders of this Honorable
Court through undersigned counsel at 4th and 6th Floors, Citibank Center Bldg., 8741
Paseo de Roxas, Makati City.4 (Emphasis supplied)
Respondents (complainants before the Labor Arbiter) were recruited and hired by
Saudia as Temporary Flight Attendants with the accreditation and approval of the
Philippine Overseas Employment Administration.5 After undergoing seminars
required by the Philippine Overseas Employment Administration for deployment
overseas, as well as training modules offered by Saudia (e.g., initial flight
attendant/training course and transition training), and after working as Temporary Saudia anchored its disapproval of respondents' maternity leaves and demand for
Flight Attendants, respondents became Permanent Flight Attendants. They then their resignation on its "Unified Employment Contract for Female Cabin Attendants"
entered into Cabin Attendant contracts with Saudia: Ma. Jopette M. Rebesencio (Ma. (Unified Contract).17 Under the Unified Contract, the employment of a Flight
Jopette) on May 16, 1990;6 Montassah B. Sacar-Adiong (Montassah) and Rouen Ruth Attendant who becomes pregnant is rendered void. It
A. Cristobal (Rouen Ruth) on May 22, 1993;7 and Loraine Schneider-Cruz (Loraine) on provides:chanroblesvirtuallawlibrary
August 27, 1995.8 (H) Due to the essential nature of the Air Hostess functions to be physically fit on
board to provide various services required in normal or emergency cases on both
Respondents continued their employment with Saudia until they were separated from domestic/international flights beside her role in maintaining continuous safety and
service on various dates in 2006.9 security of passengers, and since she will not be able to maintain the required medical
fitness while at work in case of pregnancy, accordingly, if the Air Hostess becomes
Respondents contended that the termination of their employment was illegal. They pregnant at any time during the term of this contract, this shall render her
alleged that the termination was made solely because they were pregnant.10 employment contract as void and she will be terminated due to lack of medical
fitness.18 (Emphasis supplied)
As respondents alleged, they had informed Saudia of their respective pregnancies and In their Comment on the present Petition,19 respondents emphasized that the Unified
had gone through the necessary procedures to process their maternity leaves. Contract took effect on September 23, 2006 (the first day of Ramadan),20 well after
Initially, Saudia had given its approval but later on informed respondents that its they had filed and had their maternity leaves approved. Ma. Jopette filed her
management in Jeddah, Saudi Arabia had disapproved their maternity leaves. In maternity leave application on September 5, 2006. 21 Montassah filed her maternity
addition, it required respondents to file their resignation letters.11 leave application on August 29, 2006, and its approval was already indicated in
Saudia's computer system by August 30, 2006.22 Rouen Ruth filed her maternity leave
Respondents were told that if they did not resign, Saudia would terminate them all application on September 13, 2006, 23 and Loraine filed her maternity leave
the same. The threat of termination entailed the loss of benefits, such as separation application on August 22, 2006.24
pay and ticket discount entitlements.12
Rather than comply and tender resignation letters, respondents filed separate appeal
Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base letters that were all rejected.25
Manager, Abdulmalik Saddik (Abdulmalik).13 Montassah was informed personally by
Abdulmalik and a certain Faisal Hussein on October 20, 2006 after being required to Despite these initial rejections, respondents each received calls on the morning of
report to the office one (1) month into her maternity leave.14 Rouen Ruth was also November 6, 2006 from Saudia's office secretary informing them that their maternity
personally informed by Abdulmalik on October 17, 2006 after being required to report leaves had been approved. Saudia, however, was quick to renege on its approval. On
to the office by her Group Supervisor.15 Loraine received a call on October 12, 2006 the evening of November 6, 2006, respondents again received calls informing them
from her Group Supervisor, Dakila Salvador.16 that it had received notification from Jeddah, Saudi Arabia that their maternity leaves
had been disapproved.26 circumstances that warranted its abstention from exercising jurisdiction.35 On the
issue of whether respondents were validly dismissed, it held that there was nothing
Faced with the dilemma of resigning or totally losing their benefits, respondents on record to support Saudia's claim that respondents resigned voluntarily.
executed handwritten resignation letters. In Montassah's and Rouen Ruth's cases,
their resignations were executed on Saudia's blank letterheads that Saudia had The dispositive portion of the November 19, 2009 National Labor Relations
provided. These letterheads already had the word "RESIGNATION" typed on the Commission Decision36 reads:chanroblesvirtuallawlibrary
subject portions of their headings when these were handed to respondents.27 WHEREFORE, premises considered, judgment is hereby rendered finding the appeal
impressed with merit. The respondents-appellees are hereby directed to pay
On November 8, 2007, respondents filed a Complaint against Saudia and its officers complainants-appellants the aggregate amount of SR614,001.24 corresponding to
for illegal dismissal and for underpayment of salary, overtime pay, premium pay for their backwages and separation pay plus ten (10%) percent thereof as attorney's fees.
holiday, rest day, premium, service incentive leave pay, 13th month pay, separation The decision of the Labor Arbiter dated December 12, 2008 is hereby VACATED and
pay, night shift differentials, medical expense reimbursements, retirement benefits, SET ASIDE. Attached is the computation prepared by this Commission and made an
illegal deduction, lay-over expense and allowances, moral and exemplary damages, integral part of this Decision.37cralawlawlibrary
and attorney's fees.28 The case was initially assigned to Labor Arbiter Hermino V. Suelo In the Resolution dated February 11, 2010,38 the National Labor Relations Commission
and docketed as NLRC NCR Case No. 00-11-12342-07. denied petitioners' Motion for Reconsideration.

Saudia assailed the jurisdiction of the Labor Arbiter.29 It claimed that all the In the June 16, 2011 Decision,39 the Court of Appeals denied petitioners' Rule 65
determining points of contact referred to foreign law and insisted that the Complaint Petition and modified the Decision of the National Labor Relations Commission with
ought to be dismissed on the ground of forum non conveniens.30 It added that respect to the award of separation pay and backwages.
respondents had no cause of action as they resigned voluntarily. 31
The dispositive portion of the Court of Appeals Decision
On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered the reads:chanroblesvirtuallawlibrary
Decision32 dismissing respondents' Complaint. The dispositive portion of this Decision WHEREFORE, the instant petition is hereby DENIED. The Decision dated November
reads:chanroblesvirtuallawlibrary 19, 2009 issued by public respondent, Sixth Division of the National Labor Relations
WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING the Commission - National Capital Region is MODIFIED only insofar as the computation of
instant complaint for lack of jurisdiction/merit.33cralawlawlibrary the award of separation pay and backwages. For greater clarity, petitioners are
On respondents' appeal, the National Labor Relations Commission's Sixth Division ordered to pay private respondents separation pay which shall be computed from
reversed the ruling of Executive Labor Arbiter Jambaro-Franco. It explained that private respondents' first day of employment up to the finality of this decision, at the
"[considering that complainants-appellants are OFWs, the Labor Arbiters and the rate of one month per year of service and backwages which shall be computed from
NLRC has [sic] jurisdiction to hear and decide their complaint for illegal termination."34 the date the private respondents were illegally terminated until finality of this
On the matter of forum non conveniens, it noted that there were no special decision. Consequently, the ten percent (10%) attorney's fees shall be based on the
total amount of the award. The assailed Decision is affirmed in all other respects.
Second, it was "Saudia Jeddah" that provided the funds to pay for respondents'
The labor arbiter is hereby DIRECTED to make a recomputation based on the salaries and benefits; and
foregoing.40cralawlawlibrary
In the Resolution dated September 13, 2011,41 the Court of Appeals denied Lastly, it was with "Saudia Jeddah" that respondents filed their resignations.44
petitioners' Motion for Reconsideration.
Saudia posits that respondents' Complaint was brought against the wrong party
Hence, this Appeal was filed. because "Saudia Manila," upon which summons was served, was never the employer
of respondents.45
The issues for resolution are the following:
Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its
First, whether the Labor Arbiter and the National Labor Relations Commission may bare allegation, there is no basis for concluding that "Saudia Jeddah" is distinct from
exercise jurisdiction over Saudi Arabian Airlines and apply Philippine law in "Saudia Manila."
adjudicating the present dispute;
What is clear is Saudia's statement in its own Petition that what it has is a "Philippine
Second, whether respondents' voluntarily resigned or were illegally terminated; and Office . . . located at 4/F Metro House Building, Sen. Gil J. Puyat Avenue, Makati City."46
Even in the position paper that Saudia submitted to the Labor Arbiter,47 what Saudia
Lastly, whether Brenda J. Betia may be held personally liable along with Saudi Arabian now refers to as "Saudia Jeddah" was then only referred to as "Saudia Head Office at
Airlines.chanRoblesvirtualLawlibrary Jeddah, KSA,"48 while what Saudia now refers to as "Saudia Manila" was then only
I referred to as "Saudia's office in Manila."49

Summons were validly served on Saudia and jurisdiction over it validly acquired. By its own admission, Saudia, while a foreign corporation, has a Philippine office.

There is no doubt that the pleadings and summons were served on Saudia through its Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign Investments
counsel.42 Saudia, however, claims that the Labor Arbiter and the National Labor Act of 1991, provides the following:chanroblesvirtuallawlibrary
Relations Commission had no jurisdiction over it because summons were never served The phrase "doing business" shall include . . . opening offices, whether called
on it but on "Saudia Manila."43 Referring to itself as "Saudia Jeddah," it claims that "liaison" offices or branches; . . . and any other act or acts that imply a continuity of
"Saudia Jeddah" and not "Saudia Manila" was the employer of respondents because: commercial dealings or arrangements and contemplate to that extent the
performance of acts or works, or the exercise of some of the functions normally
First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered into incident to, and in progressive prosecution of commercial gain or of the purpose and
by respondents; object of the business organization. (Emphasis supplied)
A plain application of Section 3(d) of the Foreign Investments Act leads to no other entirely to the whim of either party.
conclusion than that Saudia is a foreign corporation doing business in the Philippines.
As such, Saudia may be sued in the Philippines and is subject to the jurisdiction of Contractual choice of law provisions factor into transnational litigation and dispute
Philippine tribunals. resolution in one of or in a combination of four ways: (1) procedures for settling
disputes, e.g., arbitration; (2) forum, i.e., venue; (3) governing law; and (4) basis for
Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia interpretation. Forum non conveniens relates to, but is not subsumed by, the second
Manila" — the latter being nothing more than Saudia's local office — service of of these.
summons to Saudia's office in Manila sufficed to vest jurisdiction over Saudia's person
in Philippine tribunals.chanRoblesvirtualLawlibrary Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on
II the laws of a given jurisdiction as the governing law of a contract does not preclude
the exercise of jurisdiction by tribunals elsewhere. The reverse is equally true: The
Saudia asserts that Philippine courts and/or tribunals are not in a position to make an assumption of jurisdiction by tribunals does not ipso facto mean that it cannot apply
intelligent decision as to the law and the facts. This is because respondents' Cabin and rule on the basis of the parties' stipulation. In Hasegawa v.
Attendant contracts require the application of the laws of Saudi Arabia, rather than Kitamura:52ChanRoblesVirtualawlibrary
those of the Philippines.50 It claims that the difficulty of ascertaining foreign law calls Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction
into operation the principle of forum non conveniens, thereby rendering improper the considers whether it is fair to cause a defendant to travel to this state; choice of law
exercise of jurisdiction by Philippine tribunals.51 asks the further question whether the application of a substantive law V'hich will
determine the merits of the case is fair to both parties. The power to exercise
A choice of law governing the validity of contracts or the interpretation of its jurisdiction does not automatically give a state constitutional authority to apply forum
provisions dees not necessarily imply forum non conveniens. Choice of law and forum law. While jurisdiction and the choice of the lex fori will often, coincide, the "minimum
non conveniens are entirely different matters. contacts" for one do not always provide the necessary "significant contacts" for the
other. The question of whether the law of a state can be applied to a transaction is
Choice of law provisions are an offshoot of the fundamental principle of autonomy of different from the question of whether the courts of that state have jurisdiction to
contracts. Article 1306 of the Civil Code firmly ensconces enter a judgment.53cralawlawlibrary
this:chanroblesvirtuallawlibrary As various dealings, commercial or otherwise, are facilitated by the progressive ease
Article 1306. The contracting parties may establish such stipulations, clauses, terms of communication and travel, persons from various jurisdictions find themselves
and conditions as they may deem convenient, provided they are not contrary to law, transacting with each other. Contracts involving foreign elements are, however,
morals, good customs, public order, or public policy. nothing new. Conflict of laws situations precipitated by disputes and litigation
In contrast, forum non conveniens is a device akin to the rule against forum shopping. anchored on these contracts are not totally novel.
It is designed to frustrate illicit means for securing advantages and vexing litigants that
would otherwise be possible if the venue of litigation (or dispute resolution) were left Transnational transactions entail differing laws on the requirements Q for the validity
of the formalities and substantive provisions of contracts and their interpretation. Eusebio Construction, Inc.,58 manifested preference for allowing the parties to select
These transactions inevitably lend themselves to the possibility of various fora for the law applicable to their contract":chanroblesvirtuallawlibrary
litigation and dispute resolution. As observed by an eminent expert on transnational No conflicts rule on essential validity of contracts is expressly provided for in our laws.
law:chanroblesvirtuallawlibrary The rule followed by most legal systems, however, is that the intrinsic validity of a
The more jurisdictions having an interest in, or merely even a point of contact with, a contract must be governed by the lex contractus or "proper law of the contract." This
transaction or relationship, the greater the number of potential fora for the resolution is the law voluntarily agreed upon by the parties (the lex loci voluntatis) or the law
of disputes arising out of or related to that transaction or relationship. In a world of intended by them either expressly or implicitly (the lex loci intentionis). The law
increased mobility, where business and personal transactions transcend national selected may be implied from such factors as substantial connection with the
boundaries, the jurisdiction of a number of different fora may easily be invoked in a transaction, or the nationality or domicile of the parties. Philippine courts would do
single or a set of related disputes.54cralawlawlibrary well to adopt the first and most basic rule in most legal systems, namely, to allow the
Philippine law is definite as to what governs the formal or extrinsic validity of parties to select the law applicable to their contract, subject to the limitation that it is
contracts. The first paragraph of Article 17 of the Civil Code provides that "[t]he forms not against the law, morals, or public policy of the forum and that the chosen law must
and solemnities of contracts . . . shall be governed by the laws of the country in which bear a substantive relationship to the transaction.59 (Emphasis in the original)
they are executed"55 (i.e., lex loci celebrationis). Saudia asserts that stipulations set in the Cabin Attendant contracts require the
application of the laws of Saudi Arabia. It insists that the need to comply with these
In contrast, there is no statutorily established mode of settling conflict of laws stipulations calls into operation the doctrine of forum non conveniens and, in turn,
situations on matters pertaining to substantive content of contracts. It has been noted makes it necessary for Philippine tribunals to refrain from exercising jurisdiction.
that three (3) modes have emerged: (1) lex loci contractus or the law of the place of
the making; (2) lex loci solutionis or the law of the place of performance; and (3) lex As mentioned, contractual choice of laws factors into transnational litigation in any or
loci intentionis or the law intended by the parties.56 a combination of four (4) ways. Moreover, forum non conveniens relates to one of
these: choosing between multiple possible fora.
Given Saudia's assertions, of particular relevance to resolving the present dispute is
lex loci intentionis. Nevertheless, the possibility of parallel litigation in multiple fora — along with the
host of difficulties it poses — is not unique to transnational litigation. It is a difficulty
An author observed that Spanish jurists and commentators "favor lex loci that similarly arises in disputes well within the bounds of a singe jurisdiction.
intentionis."57 These jurists and commentators proceed from the Civil Code of Spain,
which, like our Civil Code, is silent on what governs the intrinsic validity of contracts, When parallel litigation arises strictly within the context of a single jurisdiction, such
and the same civil law traditions from which we draw ours. rules as those on forum shopping, litis pendentia, and res judicata come into
operation. Thus, in the Philippines, the 1997 Rules on Civil Procedure provide for
In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P. willful and deliberate forum shopping as a ground not only for summary dismissal with
prejudice but also for citing parties and counsels in direct contempt, as well as for the
imposition of administrative sanctions.60 Likewise, the same rules expressly provide jurisdiction on account of forum non conveniens is a deferential gesture to the
that a party may seek the dismissal of a Complaint or another pleading asserting a tribunals of another sovereign. It is a measure that prevents the former's having to
claim on the ground "[t]hat there is another action pending between the same parties interfere in affairs which are better and more competently addressed by the latter.
for the same cause," i.e., litis pendentia, or "[t]hat the cause of action is barred by a Further, forum non conveniens entails a recognition not only that tribunals elsewhere
prior judgment,"61 i.e., res judicata. are better suited to rule on and resolve a controversy, but also, that these tribunals
are better positioned to enforce judgments and, ultimately, to dispense justice. Forum
Forum non conveniens, like the rules of forum shopping, litis pendentia, and res non conveniens prevents the embarrassment of an awkward situation where a
judicata, is a means of addressing the problem of parallel litigation. While the rules of tribunal is rendered incompetent in the face of the greater capability — both
forum shopping, litis pendentia, and res judicata are designed to address the problem analytical and practical — of a tribunal in another jurisdiction.
of parallel litigation within a single jurisdiction, forum non conveniens is a means
devised to address parallel litigation arising in multiple jurisdictions. The wisdom of avoiding conflicting and unenforceable judgments is as much a matter
of efficiency and economy as it is a matter of international courtesy. A court would
Forum non conveniens literally translates to "the forum is inconvenient."62 It is a effectively be neutering itself if it insists on adjudicating a controversy when it knows
concept in private international law and was devised to combat the "less than full well that it is in no position to enforce its judgment. Doing so is not only an exercise
honorable" reasons and excuses that litigants use to secure procedural advantages, in futility; it is an act of frivolity. It clogs the dockets of a.tribunal and leaves it to waste
annoy and harass defendants, avoid overcrowded dockets, and select a "friendlier" its efforts on affairs, which, given transnational exigencies, will be reduced to mere
venue.63 Thus, the doctrine of forum non conveniens addresses the same rationale academic, if not trivial, exercises.
that the rule against forum shopping does, albeit on a multijurisdictional scale.
Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law
Forum non conveniens, like res judicata,64is a concept originating in common law.65 cases, may refuse impositions on its jurisdiction where it is not the most 'convenient'
However, unlike the rule on res judicata, as well as those on litis pendentia and forum or available forum and the parties are not precluded from seeking remedies
shopping, forum non conveniens finds no textual anchor, whether in statute or in elsewhere."67 In Puyat v. Zabarte,68 this court recognized the following situations as
procedural rules, in our civil law system. Nevertheless, jurisprudence has applied among those that may warrant a court's desistance from exercising
forum non conveniens as basis for a court to decline its exercise of jurisdiction.66 jurisdiction:chanroblesvirtuallawlibrary
1) The belief that the matter can be better tried and decided elsewhere, either
Forum non conveniens is soundly applied not only to address parallel litigation and because the main aspects of the case transpired in a foreign jurisdiction or the
undermine a litigant's capacity to vex and secure undue advantages by engaging in material witnesses have their residence there;
forum shopping on an international scale. It is also grounded on principles of comity 2) The belief that the non-resident plaintiff sought the forum[,] a practice known as
and judicial efficiency. forum shopping[,] merely to secure procedural advantages or to convey or harass
the defendant;
Consistent with the principle of comity, a tribunal's desistance in exercising
3) The unwillingness to extend local judicial facilities to non residents or aliens when pleaded as such at the earliest possible opportunity. Otherwise, it shall be deemed
the docket may already be overcrowded; waived.
4) The inadequacy of the local judicial machinery for effectuating the right sought to
be maintained; and This court notes that in Hasegawa,76 this court stated that forum non conveniens is
5) The difficulty of ascertaining foreign law.69 not a ground for a motion to dismiss. The factual ambience of this case however does
In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,70 not squarely raise the viability of this doctrine. Until the opportunity comes to review
this court underscored that a Philippine court may properly assume jurisdiction over the use of motions to dismiss for parallel litigation, Hasegawa remains existing
a case if it chooses to do so to the extent: "(1) that the Philippine Court is one to which doctrine.
the parties may conveniently resort to; (2) that the Philippine Court is in a position to
make an intelligent decision as to the law and the facts; and (3) that the Philippine Consistent with forum non conveniens as fundamentally a factual matter, it is
Court has or is likely to have power to enforce its decision."71 imperative that it proceed from & factually established basis. It would be improper to
dismiss an action pursuant to forum non conveniens based merely on a perceived,
The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"72) in the likely, or hypothetical multiplicity of fora. Thus, a defendant must also plead and show
decisions shows that the matter of jurisdiction rests on the sound discretion of a court. that a prior suit has, in fact, been brought in another jurisdiction.
Neither the mere invocation of forum non conveniens nor the averment of foreign
elements operates to automatically divest a court of jurisdiction. Rather, a court The existence of a prior suit makes real the vexation engendered by duplicitous
should renounce jurisdiction only "after 'vital facts are established, to determine litigation, the embarrassment of intruding into the affairs of another sovereign, and
whether special circumstances' require the court's desistance."73 As the propriety of the squandering of judicial efforts in resolving a dispute already lodged and better
applying forum non conveniens is contingent on a factual determination, it is, resolved elsewhere. As has been noted:chanroblesvirtuallawlibrary
therefore, a matter of defense.74 A case will not be stayed o dismissed on [forum] non conveniens grounds unless the
plaintiff is shown to have an available alternative forum elsewhere. On this, the
The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is moving party bears the burden of proof.
exclusive in its recital of the grounds for dismissal that are exempt from the omnibus
motion rule: (1) lack of jurisdiction over the subject matter; (2) litis pendentia; (3) res A number of factors affect the assessment of an alternative forum's adequacy. The
judicata; and (4) prescription. Moreover, dismissal on account offorum non statute of limitations abroad may have run, of the foreign court may lack either
conveniens is a fundamentally discretionary matter. It is, therefore, not a matter for a subject matter or personal jurisdiction over the defendant. . . . Occasionally, doubts
defendant to foist upon the court at his or her own convenience; rather, it must be will be raised as to the integrity or impartiality of the foreign court (based, for
pleaded at the earliest possible opportunity. example, on suspicions of corruption or bias in favor of local nationals), as to the
fairness of its judicial procedures, or as to is operational efficiency (due, for example,
On the matter of pleading forum non conveniens, we state the rule, thus: Forum non to lack of resources, congestion and delay, or interfering circumstances such as a civil
conveniens must not only be clearly pleaded as a ground for dismissal; it must be
unrest). In one noted case, [it was found] that delays of 'up to a quarter of a century' The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a
rendered the foreign forum... inadequate for these purposes.77cralawlawlibrary foreign tribunal and can be resolved by juxtaposing the competencies and practical
We deem it more appropriate and in the greater interest of prudence that a defendant circumstances of the tribunals in alternative fora. Exigencies, like the statute of
not only allege supposed dangerous tendencies in litigating in this jurisdiction; the limitations, capacity to enforce orders and judgments, access to records,
defendant must also show that such danger is real and present in that litigation or requirements for the acquisition of jurisdiction, and even questions relating to the
dispute resolution has commenced in another jurisdiction and that a foreign tribunal integrity of foreign courts, may render undesirable or even totally unfeasible recourse
has chosen to exercise jurisdiction. to a foreign court. As mentioned, we consider it in the greater interest of prudence
III that a defendant show, in pleading forum non conveniens, that litigation has
commenced in another jurisdiction and that a foieign tribunal has, in fact, chosen to
Forum non conveniens finds no application and does not operate to divest Philippine exercise jurisdiction.
tribunals of jurisdiction and to require the application of foreign law.
Two (2) factors weigh into a court's appraisal of the balance of interests inhering in a
Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the dispute: first, the vinculum which the parties and their relation have to a given
Cabin Attendant contracts that require the application of the laws of Saudi Arabia. jurisdiction; and second, the public interest that must animate a tribunal, in its
capacity as an agent of the sovereign, in choosing to assume or decline jurisdiction.
Forum non conveniens relates to forum, not to the choice of governing law. Thai forum The first is more concerned with the parties, their personal circumstances, and private
non conveniens may ultimately result in the application of foreign law is merely an interests; the second concerns itself with the state and the greater social order.
incident of its application. In this strict sense, forum non conveniens is not applicable.
It is not the primarily pivotal consideration in this case. In considering the vinculum, a court must look into the preponderance of linkages
which the parties and their transaction may have to either jurisdiction. In this respect,
In any case, even a further consideration of the applicability of forum non conveniens factors, such as the parties' respective nationalities and places of negotiation,
on the incidental matter of the law governing respondents' relation with Saudia leads execution, performance, engagement or deployment, come into play.
to the conclusion that it is improper for Philippine tribunals to divest themselves of
jurisdiction. In considering public interest, a court proceeds with a consciousness that it is an organ
of the state. It must, thus, determine if the interests of the sovereign (which acts
Any evaluation of the propriety of contracting parties' choice of a forum and'its through it) are outweighed by those of the alternative jurisdiction. In this respect, the
incidents must grapple with two (2) considerations: first, the availability and adequacy court delves into a consideration of public policy. Should it find that public interest
of recourse to a foreign tribunal; and second, the question of where, as between the weighs more heavily in favor of its assumption of jurisdiction, it should proceed in
forum court and a foreign court, the balance of interests inhering in a dispute weighs adjudicating the dispute, any doubt or .contrary view arising from the preponderance
more heavily. of linkages notwithstanding.
Our law on contracts recognizes the validity of contractual choice of law provisions. 1981, respectively,81 is part of the law of the land. In view of the widespread signing
Where such provisions exist, Philippine tribunals, acting as the forum court, generally and ratification of, as well as adherence (in practice) to it by states, it may even be
defer to the parties' articulated choice. said that many provisions of the CEDAW may have become customary international
law. The CEDAW gives effect to the Constitution's policy statement in Article II, Section
This is consistent with the fundamental principle of autonomy of contracts. Article 14. Article I of the CEDAW defines "discrimination against women"
1306 of the Civ:l Code expressly provides that "[t]he contracting parties may establish as:chanroblesvirtuallawlibrary
'such stipulations, clauses, terms and conditions as they may deem convenient."78 any distinction, exclusion or restriction made on the basis of sex which has the effect
Nevertheless, while a Philippine tribunal (acting as the forum court) is called upon to or purpose of impairing or nullifying the recognition, enjoyment or exercise by
respect the parties' choice of governing law, such respect must not be so permissive women, irrespective of their marital status, on a basis of equality of men and women,
as to lose sight of considerations of law, morals, good customs, public order, or public of human rights and fundamental freedoms in the political, economic, social, cultural,
policy that underlie the contract central to the controversy. civil or any other field.82cralawlawlibrary
The constitutional exhortation to ensure fundamental equality, as illumined by its
Specifically with respect to public policy, in Pakistan International Airlines Corporation enabling law, the CEDAW, must inform and animate all the actions of all personalities
v. Ople,79 this court explained that:chanroblesvirtuallawlibrary acting on behalf of the State. It is, therefore, the bounden duty of this court, in
counter-balancing the principle of autonomy of contracting parties is the equally rendering judgment on the disputes brought before it, to ensure that no
general rule that provisions of applicable law, especially provisions relating to matters discrimination is heaped upon women on the mere basis of their being women. This
affected with public policy, are deemed written inta the contract. Put a little is a point so basic and central that all our discussions and pronouncements —
differently, the governing principle is that parties may not contract away applicable regardless of whatever averments there may be of foreign law — must proceed from
provisions of law especially peremptory provisions dealing with matters heavily this premise.
impressed with public interest.80 (Emphasis supplied)
Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure So informed and animated, we emphasize the glaringly discriminatory nature of
the fundamental equality before the law of women and men." Contrasted with Article Saudia's policy. As argued by respondents, Saudia's policy entails the termination of
II, Section 1 of the 1987 Constitution's statement that "[n]o person shall ... be denied employment of flight attendants who become pregnant. At the risk of stating the
the equal protection of the laws," Article II, Section 14 exhorts the State to "ensure." obvious, pregnancy is an occurrence that pertains specifically to women. Saudia's
This does not only mean that the Philippines shall not countenance nor lend legal policy excludes from and restricts employment on the basis of no other consideration
recognition and approbation to measures that discriminate on the basis of one's being but sex.
male or female. It imposes an obligation to actively engage in securing the
fundamental equality of men and women. We do not lose sight of the reality that pregnancy does present physical limitations
that may render difficult the performance of functions associated with being a flight
The Convention on the Elimination of all Forms of Discrimination against Women attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a
(CEDAW), signed and ratified by the Philippines on July 15, 1980, and on August 5, disability so permanent and immutable that, it must entail the termination of one's
employment. It is clear to us that any individual, regardless of gender, may be subject conveniens has been shattered, it follows that Philippine tribunals may properly
to exigencies that limit the performance of functions. However, we fail to appreciate assume jurisdiction over the present controversy. Philippine jurisprudence provides
how pregnancy could be such an impairing occurrence that it leaves no other recourse ample illustrations of when a court's renunciation of jurisdiction on account of forum
but the complete termination of the means through which a woman earns a living. non conveniens is proper or improper.'

Apart from the constitutional policy on the fundamental equality before the law of In Philsec Investment Corporation v. Court of Appeals,85 this court noted that the trial
men and women, it is settled that contracts relating to labor and employment are court failed to consider that one of the plaintiffs was a domestic corporation, that one
impressed with public interest. Article 1700 of the Civil Code provides that "[t]he of the defendants was a Filipino, and that it was the extinguishment of the latter's
relation between capital and labor are not merely contractual. They are so impressed debt that was the object of the transaction subject of the litigation. Thus, this court
with public interest that labor contracts must yield to the common good." held, among others, that the trial court's refusal to assume jurisdiction was not
justified by forum non conveniens and remanded the case to the trial court.
Consistent with this, this court's pronouncements in Pakistan International Airlines
Corporation83 are clear and unmistakable:chanroblesvirtuallawlibrary In Raytheon International, Inc. v. Rouzie, Jr.,86 this court sustained the trial court's
Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which assumption of jurisdiction considering that the trial court could properly enforce
specifies, firstly, the law of Pakistan as the applicable law of the agreement, and, judgment on the petitioner which was a foreign corporation licensed to do business
secondly, lays the venue for settlement of any dispute arising out of or in connection in the Philippines.
with the agreement "only [in] courts of Karachi, Pakistan". The first clause of
paragraph 10 cannot be invoked to prevent the application of Philippine labor laws In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court found no reason to disturb the
and'regulations to the subject matter of this case, i.e., the employer-employee trial court's assumption of jurisdiction over a case in which, as noted by the trial court,
relationship between petitioner PIA and private respondents. We have already "it is more convenient to hear and decide the case in the Philippines because Todaro
pointed out that the relationship is much affected with public interest and that the [the plaintiff] resides in the Philippines and the contract allegedly breached involve[d]
otherwise applicable Philippine laws and regulations cannot be rendered illusory by employment in the Philippines."88
the parties agreeing upon some other law to govern their relationship. . . . Under these
circumstances, paragraph 10 of the employment agreement cannot be given effect so In Pacific Consultants International Asia, Inc. v. Schonfeld,89 this court held that the
as to oust Philippine agencies and courts of the jurisdiction vested upon them by fact that the complainant in an illegal dismissal case was a Canadian citizen and a
Philippine law.84 (Emphasis supplied) repatriate did not warrant the application of forum non conveniens considering that:
As the present dispute relates to (what the respondents allege to be) the illegal (1) the Labor Code does not include forum non conveniens as a ground for the
termination of respondents' employment, this case is immutably a matter of public dismissal of a complaint for illegal dismissal; (2) the propriety of dismissing a case
interest and public policy. Consistent with clear pronouncements in law and based on forum non conveniens requires a factual determination; and (3) the
jurisprudence, Philippine laws properly find application in and govern this case. requisites for assumption of jurisdiction as laid out in Bank of America, NT&SA90 were
'Moreover, as this premise for Saudia's insistence on the application forum non all satisfied.
 circumstances enumerated in Puyat,92 which this court recognized as possibly
In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations justifying the desistance of Philippine tribunals from exercising jurisdiction.
Commission91 that the National Labor Relations Q Commission was a seriously
inconvenient forum. In that case, private respondent Marcelo G. Santos was working First, there is no basis for concluding that the case can be more conveniently tried
in the Sultanate of Oman when he received a letter from Palace Hotel recruiting him elsewhere. As established earlier, Saudia is doing business in the Philippines. For their
for employment in Beijing, China. Santos accepted the offer. Subsequently, however, part, all four (4) respondents are Filipino citizens maintaining residence in the
he was released from employment supposedly due to business reverses arising from Philippines and, apart from their previous employment with Saudia, have no other
political upheavals in China (i.e., the Tiananmen Square incidents of 1989). Santos connection to the Kingdom of Saudi Arabia. It would even be to respondents'
later filed a Complaint for illegal dismissal impleading Palace Hotel's General Manager, inconvenience if this case were to be tried elsewhere.
Mr. Gerhard Schmidt, the Manila Hotel International Company Ltd. (which was,
responsible for training Palace Hotel's personnel and staff), and the Manila Hotel Second, the records are bereft of any indication that respondents filed their Complaint
Corporation (which owned 50% of Manila Hotel International Company Ltd.'s capital in an effort to engage in forum shopping or to vex and inconvenience Saudia.
stock).
Third, there is no indication of "unwillingness to extend local judicial facilities to non-
In ruling against the National Labor Relations Commission's exercise of jurisdiction, residents or aliens."93 That Saudia has managed to bring the present controversy all
this court noted that the main aspects of the case transpired in two (2) foreign the way to this court proves this.
jurisdictions, Oman and China, and that the case involved purely foreign elements.
Specifically, Santos was directly hired by a foreign employer through correspondence Fourth, it cannot be said that the local judicial machinery is inadequate for
sent to Oman. Also, the proper defendants were neither Philippine nationals nor effectuating the right sought to be maintained. Summons was properly served on
engaged in business in the Philippines, while the main witnesses were not residents Saudia and jurisdiction over its person was validly acquired.
of the Philippines. Likewise, this court noted that the National Labor Relations
Commission was in no position to conduct the following: first, determine the law Lastly, there is not even room for considering foreign law. Philippine law properly
governing the employment contract, as it was entered into in foreign soil; second, governs the present dispute.
determine the facts, as Santos' employment was terminated in Beijing; and third,
enforce its judgment, since Santos' employer, Palace Hotel, was incorporated under As the question of applicable law has been settled, the supposed difficulty of
the laws of China and was not even served with summons. ascertaining foreign law (which requires the application of forum non conveniens)
provides no insurmountable inconvenience or special circumstance that will justify
Contrary to Manila Hotel, the case now before us does not entail a preponderance of depriving Philippine tribunals of jurisdiction.
linkages that favor a foreign jurisdiction.
Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia
Here, the circumstances of the parties and their relation do not approximate the which should apply, it does not follow that Philippine tribunals should refrain from
exercising jurisdiction. To. recall our pronouncements in Puyat,94 as well as in Bank of IV
America, NT&SA,95 it is not so much the mere applicability of foreign law which calls
into operation forum non conveniens. Rather, what justifies a court's desistance from Respondents were illegally terminated.
exercising jurisdiction is "[t]he difficulty of ascertaining foreign law"96 or the inability
of a "Philippine Court to make an intelligent decision as to the law[.]"97 In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as "the
voluntary act of an employee who is in a situation where one believes that personal
Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., reasons cannot be sacrificed in favor of the exigency of the service, and one has no
"to make an intelligent decision"98), Philippine tribunals may apply the foreign law other choice but to dissociate oneself from employment. It is a formal
selected by the parties. In fact, (albeit without meaning to make a pronouncement on pronouncement or relinquishment of an office, with the intention of relinquishing the
the accuracy and reliability of respondents' citation) in this case, respondents office accompanied by the act of relinquishment." 102 Thus, essential to the act of
themselves have made averments as to the laws of Saudi Arabia. In their Comment, resignation is voluntariness. It must be the result of an employee's exercise of his or
respondents write:chanroblesvirtuallawlibrary her own will.
Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful
to terminate the employment of any woman by virtue of pregnancy. The law in Saudi In the same case of Bilbao, this court advanced a means for determining whether an
Arabia is even more harsh and strict [sic] in that no employer can terminate the employee resigned voluntarily:chanroblesvirtuallawlibrary
employment of a female worker or give her a warning of the same while on Maternity As the intent to relinquish must concur with the overt act of relinquishment, the acts
Leave, the specific provision of Saudi Labor Laws on the matter is hereto quoted as of the employee before and after the alleged resignation must be considered in
follows:chanroblesvirtuallawlibrary determining whether he or she, in fact, intended, to sever his or her employment.103
"An employer may not terminate the employment of a female worker or give her a (Emphasis supplied)
warning of the same while on maternity leave." (Article 155, Labor Law of the On the other hand, constructive dismissal has been defined as "cessation of work
Kingdom of Saudi Arabia, Royal Decree No. M/51.)99cralawlawlibrary because 'continued employment is rendered impossible, unreasonable or unlikely, as
All told, the considerations for assumption of jurisdiction by Philippine tribunals as an offer involving a demotion in rank or a diminution in pay' and other benefits." 104
outlined in Bank of America, NT&SA100 have been satisfied. First, all the parties are
based in the Philippines and all the material incidents transpired in this jurisdiction. In Penaflor v. Outdoor Clothing Manufacturing Corporation,105 constructive dismissal
Thus, the parties may conveniently seek relief from Philippine tribunals. Second, has been described as tantamount to "involuntarily [sic] resignation due to the harsh,
Philippine tribunals are in a position to make an intelligent decision as to the law and hostile, and unfavorable conditions set by the employer."106 In the same case, it was
the facts. Third, Philippine tribunals are in a position to enforce their decisions. There noted that "[t]he gauge for constructive dismissal is whether a reasonable person in
is no compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the employee's position would feel compelled to give up his employment under the
the immense public policy considerations attendant to this case behoove Philippine prevailing circumstances."107
tribunals to not shy away from their duty to rule on the
case.chanRoblesvirtualLawlibrary Applying the cited standards on resignation and constructive dismissal, it is clear that
respondents were constructively dismissed. Hence, their termination was illegal. Saudia's blank letterheads that Saudia had provided. These letterheads already had
the word "RESIGNATION" typed on the subject portion of their respective headings
The termination of respondents' employment happened when they were pregnant when these were handed to respondents.113ChanRoblesVirtualawlibrary
and expecting to incur costs on account of child delivery and infant rearing. As noted
by the Court of Appeals, pregnancy is a time when they need employment to sustain "In termination cases, the burden of proving just or valid cause for dismissing an
their families.108 Indeed, it goes against normal and reasonable human behavior to employee rests on the employer."114 In this case, Saudia makes much of how
abandon one's livelihood in a time of great financial need. respondents supposedly completed their exit interviews, executed quitclaims,
received their separation pay, and took more than a year to file their Complaint.115 If
It is clear that respondents intended to remain employed with Saudia. All they did was at all, however, these circumstances prove only the fact of their occurrence, nothing
avail of their maternity leaves. Evidently, the very nature of a maternity leave means more. The voluntariness of respondents' departure from Saudia is non sequitur.
that a pregnant employee will not report for work only temporarily and that she will
resume the performance of her duties as soon as the leave allowance expires. Mere compliance with standard procedures or processes, such as the completion of
their exit interviews, neither negates compulsion nor indicates voluntariness.
It is also clear that respondents exerted all efforts to' remain employed with Saudia.
Each of them repeatedly filed appeal letters (as much as five [5] letters in the case of As with respondent's resignation letters, their exit interview forms even support their
Rebesencio109) asking Saudia to reconsider the ultimatum that they resign or be claim of illegal dismissal and militates against Saudia's arguments. These exit
terminated along with the forfeiture of their benefits. Some of them even went to interview forms, as reproduced by Saudia in its own Petition, confirms the unfavorable
Saudia's office to personally seek reconsideration.110 conditions as regards respondents' maternity leaves. Ma. Jopette's and Loraine's exit
interview forms are particularly telling:chanroblesvirtuallawlibrary
Respondents also adduced a copy of the "Unified Employment Contract for Female a. From Ma. Jopette's exit interview form:
Cabin Attendants."111 This contract deemed void the employment of a flight attendant
who becomes pregnant and threatened termination due to lack of medical fitness.112 3. In what respects has the job met or failed to meet your expectations?
The threat of termination (and the forfeiture of benefits that it entailed) is enough to THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE.116
compel a reasonable person in respondents' position to give up his or her
employment. b. From Loraine's exit interview form:

Saudia draws attention to how respondents' resignation letters were supposedly 1. What are your main reasons for leaving Saudia? What company are you joining?
made in their own handwriting. This minutia fails to surmount all the other indications xxx xxx xxx
negating any voluntariness on respondents' part. If at all, these same resignation
letters are proof of how any supposed resignation did not arise from respondents' Others
own initiative. As earlier pointed out, respondents' resignations were executed on CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY) 117
As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v. involvement with labor unions,123 injuries sustained in the course of employment, 124
Paramio,118 this court noted that "[i]f (a) there is clear proof that the waiver was development of a medical condition due to the employer's own violation of the
wangled from an unsuspecting or gullible person; or (b) the terms of the settlement employment contract,125 and lodging of a Complaint against the employer.126
are unconscionable, and on their face invalid, such quitclaims must be struck down as Exemplary damages were also awarded to employees who were deemed illegally
invalid or illegal."119 Respondents executed their quitclaims after having been unfairly dismissed by an employer in an attempt to evade compliance with statutorily
given an ultimatum to resign or be terminated (and forfeit their established employee benefits.127 Likewise, employees dismissed for supposedly just
benefits).chanRoblesvirtualLawlibrary causes, but in violation of due process requirements, were awarded exemplary
V damages.128

Having been illegally and unjustly dismissed, respondents are entitled to full These examples pale in comparison to the present controversy. Stripped of all
backwages and benefits from the time of their termination until the finality of this unnecessary complexities, respondents were dismissed for no other reason than
Decision. They are likewise entitled to separation pay in the amount of one (1) simply that they were pregnant. This is as wanton, oppressive, and tainted with bad
month's salary for every year of service until the fmality of this Decision, with a faith as any reason for termination of employment can be. This is no ordinary case of
fraction of a year of at least six (6) months being counted as one (1) whole year. illegal dismissal. This is a case of manifest gender discrimination. It is an affront not
only to our statutes and policies on employees' security of tenure, but more so, to the
Moreover, "[m]oral damages are awarded in termination cases where the employee's Constitution's dictum of fundamental equality between men and women.129
dismissal was attended by bad faith, malice or fraud, or where it constitutes an act
oppressive to labor, or where it was done in a manner contrary to morals, good The award of exemplary damages is, therefore, warranted, not only to remind
customs or public policy."120 In this case, Saudia terminated respondents' employers of the need to adhere to the requirements of procedural and substantive
employment in a manner that is patently discriminatory and running afoul of the due process in termination of employment, but more importantly, to demonstrate
public interest that underlies employer-employee relationships. As such, respondents that gender discrimination should in no case be countenanced.
are entitled to moral damages.
Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal,
121
To provide an "example or correction for the public good" as against such respondents are likewise entitled to attorney's fees in the amount of 10% of the total
discriminatory and callous schemes, respondents are likewise entitled to exemplary monetary award.130
damages. VI

In a long line of cases, this court awarded exemplary damages to illegally dismissed Petitioner Brenda J. Betia may not be held liable.
employees whose "dismissal[s were] effected in a wanton, oppressive or malevolent
manner."122 This court has awarded exemplary damages to employees who were A corporation has a personality separate and distinct from those of the persons
terminated on such frivolous, arbitrary, and unjust grounds as membership in or composing it. Thus, as a rule, corporate directors and officers are not liable for the
illegal termination of a corporation's employees. It is only when they acted in bad faith the finality of this Decision until full satisfaction thereof.
or with malice that they become solidarity liable with the corporation.131
This case is REMANDED to the Labor Arbiter to make a detailed computation of the
In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever amounts due to respondents which petitioner Saudi Arabian Airlines should pay
Electrical,132 this court clarified that "[b]ad faith does not connote bad judgment or without delay.
negligence; it imports a dishonest purpose or some moral obliquity and conscious
doing of wrong; it means breach of a known duty through some motive or interest or SO ORDERED.
ill will; it partakes of the nature of fraud."133
3) Aznar vs. Garcia January 31, 1963,
Respondents have not produced proof to show that Brenda J. Betia acted in bad faith
or with malice as regards their termination. Thus, she may not be held solidarity liable G.R. No. L-16749 January 31, 1963
with Saudia.cralawred IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased, Executor
WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not and Heir-appellees,
solidarity liable with petitioner Saudi Arabian Airlines, and second, that petitioner vs.
Saudi Arabian Airlines is liable for moral and exemplary damages. The June 16, 2011 HELEN CHRISTENSEN GARCIA, oppositor-appellant.
Decision and the September 13, 2011 Resolution of the Court of Appeals in CA-G.R. M. R. Sotelo for executor and heir-appellees.
SP. No. 113006 are hereby AFFIRMED in all other respects. Accordingly, petitioner Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.
Saudi Arabian Airlines is ordered to pay respondents: LABRADOR, J.:
(1) Full backwages and all other benefits computed from the respective dates in This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente
which each of the respondents were illegally terminated until the finality of this N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, dated September
Decision; 14, 1949, approving among things the final accounts of the executor, directing the
(2) Separation pay computed from the respective dates in which each of the executor to reimburse Maria Lucy Christensen the amount of P3,600 paid by her to
respondents commenced employment until the finality of this Decision at the rate Helen Christensen Garcia as her legacy, and declaring Maria Lucy Christensen entitled
of one (1) month's salary for every year of service, with a fraction of a year of at to the residue of the property to be enjoyed during her lifetime, and in case of death
least six (6) months being counted as one (1) whole year; without issue, one-half of said residue to be payable to Mrs. Carrie Louise C. Borton,
(3) Moral damages in the amount of P100,000.00 per respondent; etc., in accordance with the provisions of the will of the testator Edward E.
(4) Exemplary damages in the amount of P200,000.00 per respondent; and Christensen. The will was executed in Manila on March 5, 1951 and contains the
(5) Attorney's fees equivalent to 10% of the total award. following provisions:
3. I declare ... that I have but ONE (1) child, named MARIA LUCY CHRISTENSEN
Interest of 6% per annum shall likewise be imposed on the total judgment award from (now Mrs. Bernard Daney), who was born in the Philippines about twenty-
 eight years ago, and who is now residing at No. 665 Rodger Young Village, Los are (a) that the distribution should be governed by the laws of the Philippines, and (b)
Angeles, California, U.S.A. that said order of distribution is contrary thereto insofar as it denies to Helen
4. I further declare that I now have no living ascendants, and no descendants Christensen, one of two acknowledged natural children, one-half of the estate in full
except my above named daughter, MARIA LUCY CHRISTENSEN DANEY. ownership. In amplification of the above grounds it was alleged that the law that
xxx xxx xxx should govern the estate of the deceased Christensen should not be the internal law
7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now married of California alone, but the entire law thereof because several foreign elements are
to Eduardo Garcia, about eighteen years of age and who, notwithstanding the involved, that the forum is the Philippines and even if the case were decided in
fact that she was baptized Christensen, is not in any way related to me, nor California, Section 946 of the California Civil Code, which requires that the domicile of
has she been at any time adopted by me, and who, from all information I have the decedent should apply, should be applicable. It was also alleged that Maria Helen
now resides in Egpit, Digos, Davao, Philippines, the sum of THREE THOUSAND Christensen having been declared an acknowledged natural child of the decedent, she
SIX HUNDRED PESOS (P3,600.00), Philippine Currency the same to be is deemed for all purposes legitimate from the time of her birth.
deposited in trust for the said Maria Helen Christensen with the Davao Branch The court below ruled that as Edward E. Christensen was a citizen of the United States
of the Philippine National Bank, and paid to her at the rate of One Hundred and of the State of California at the time of his death, the successional rights and
Pesos (P100.00), Philippine Currency per month until the principal thereof as intrinsic validity of the provisions in his will are to be governed by the law of California,
well as any interest which may have accrued thereon, is exhausted.. in accordance with which a testator has the right to dispose of his property in the way
xxx xxx xxx he desires, because the right of absolute dominion over his property is sacred and
12. I hereby give, devise and bequeath, unto my well-beloved daughter, the inviolable (In re McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re
said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing as Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor
aforesaid at No. 665 Rodger Young Village, Los Angeles, California, U.S.A., all Maria Helen Christensen, through counsel, filed various motions for reconsideration,
the income from the rest, remainder, and residue of my property and estate, but these were denied. Hence, this appeal.
real, personal and/or mixed, of whatsoever kind or character, and The most important assignments of error are as follows:
wheresoever situated, of which I may be possessed at my death and which I
may have come to me from any source whatsoever, during her lifetime: .... THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE
It is in accordance with the above-quoted provisions that the executor in his final SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF EDWARD
account and project of partition ratified the payment of only P3,600 to Helen E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER JUST SHARE IN THE
Christensen Garcia and proposed that the residue of the estate be transferred to his INHERITANCE.
daughter, Maria Lucy Christensen. II
Opposition to the approval of the project of partition was filed by Helen Christensen THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO RECOGNIZE
Garcia, insofar as it deprives her (Helen) of her legitime as an acknowledged natural THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES CALLING FOR
child, she having been declared by Us in G.R. Nos. L-11483-84 an acknowledged THE APPLICATION OF INTERNAL LAW.
natural child of the deceased Edward E. Christensen. The legal grounds of opposition III
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER INTERNATIONAL adducing other evidence to prove their case not covered by this stipulation of facts.
LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY OF THE 1äwphï1.ñët
TESTAMENTARY DISPOSITION OF THE DISTRIBUTION OF THE ESTATE OF THE Being an American citizen, Mr. Christensen was interned by the Japanese Military
DECEASED EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE Forces in the Philippines during World War II. Upon liberation, in April 1945, he left
PHILIPPINES. for the United States but returned to the Philippines in December, 1945. Appellees
IV Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-
THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF DISTRIBUTION Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)
SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS. In April, 1951, Edward E. Christensen returned once more to California shortly after
V the making of his last will and testament (now in question herein) which he executed
THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE LAWS at his lawyers' offices in Manila on March 5, 1951. He died at the St. Luke's Hospital in
HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE IN FULL the City of Manila on April 30, 1953. (pp. 2-3)
OWNERSHIP. In arriving at the conclusion that the domicile of the deceased is the Philippines, we
There is no question that Edward E. Christensen was a citizen of the United States and are persuaded by the fact that he was born in New York, migrated to California and
of the State of California at the time of his death. But there is also no question that at resided there for nine years, and since he came to the Philippines in 1913 he returned
the time of his death he was domiciled in the Philippines, as witness the following to California very rarely and only for short visits (perhaps to relatives), and considering
facts admitted by the executor himself in appellee's brief: that he appears never to have owned or acquired a home or properties in that state,
In the proceedings for admission of the will to probate, the facts of record show that which would indicate that he would ultimately abandon the Philippines and make
the deceased Edward E. Christensen was born on November 29, 1875 in New York home in the State of California.
City, N.Y., U.S.A.; his first arrival in the Philippines, as an appointed school teacher, Sec. 16. Residence is a term used with many shades of meaning from mere temporary
was on July 1, 1901, on board the U.S. Army Transport "Sheridan" with Port of presence to the most permanent abode. Generally, however, it is used to denote
Embarkation as the City of San Francisco, in the State of California, U.S.A. He stayed something more than mere physical presence. (Goodrich on Conflict of Laws, p. 29)
in the Philippines until 1904. As to his citizenship, however, We find that the citizenship that he acquired in
In December, 1904, Mr. Christensen returned to the United States and stayed there California when he resided in Sacramento, California from 1904 to 1913, was never
for the following nine years until 1913, during which time he resided in, and was lost by his stay in the Philippines, for the latter was a territory of the United States
teaching school in Sacramento, California. (not a state) until 1946 and the deceased appears to have considered himself as a
Mr. Christensen's next arrival in the Philippines was in July of the year 1913. However, citizen of California by the fact that when he executed his will in 1951 he declared that
in 1928, he again departed the Philippines for the United States and came back here he was a citizen of that State; so that he appears never to have intended to abandon
the following year, 1929. Some nine years later, in 1938, he again returned to his own his California citizenship by acquiring another. This conclusion is in accordance with
country, and came back to the Philippines the following year, 1939. the following principle expounded by Goodrich in his Conflict of Laws.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be The terms "'residence" and "domicile" might well be taken to mean the same thing,
admitted and approved by this Honorable Court, without prejudice to the parties a place of permanent abode. But domicile, as has been shown, has acquired a
 technical meaning. Thus one may be domiciled in a place where he has never been. The next question is: What is the law in California governing the disposition of
And he may reside in a place where he has no domicile. The man with two homes, personal property? The decision of the court below, sustains the contention of the
between which he divides his time, certainly resides in each one, while living in it. executor-appellee that under the California Probate Code, a testator may dispose of
But if he went on business which would require his presence for several weeks or his property by will in the form and manner he desires, citing the case of Estate of
months, he might properly be said to have sufficient connection with the place to be McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant invokes the provisions of
called a resident. It is clear, however, that, if he treated his settlement as continuing Article 946 of the Civil Code of California, which is as follows:
only for the particular business in hand, not giving up his former "home," he could If there is no law to the contrary, in the place where personal property is situated, it
not be a domiciled New Yorker. Acquisition of a domicile of choice requires the is deemed to follow the person of its owner, and is governed by the law of his
exercise of intention as well as physical presence. "Residence simply requires bodily domicile.
presence of an inhabitant in a given place, while domicile requires bodily presence in The existence of this provision is alleged in appellant's opposition and is not denied.
that place and also an intention to make it one's domicile." Residence, however, is a We have checked it in the California Civil Code and it is there. Appellee, on the other
term used with many shades of meaning, from the merest temporary presence to hand, relies on the case cited in the decision and testified to by a witness. (Only the
the most permanent abode, and it is not safe to insist that any one use et the only case of Kaufman is correctly cited.) It is argued on executor's behalf that as the
proper one. (Goodrich, p. 29) deceased Christensen was a citizen of the State of California, the internal law thereof,
The law that governs the validity of his testamentary dispositions is defined in Article which is that given in the abovecited case, should govern the determination of the
16 of the Civil Code of the Philippines, which is as follows: validity of the testamentary provisions of Christensen's will, such law being in force in
ART. 16. Real property as well as personal property is subject to the law of the the State of California of which Christensen was a citizen. Appellant, on the other
country where it is situated. hand, insists that Article 946 should be applicable, and in accordance therewith and
However, intestate and testamentary successions, both with respect to the order of following the doctrine of the renvoi, the question of the validity of the testamentary
succession and to the amount of successional rights and to the intrinsic validity of provision in question should be referred back to the law of the decedent's domicile,
testamentary provisions, shall be regulated by the national law of the person whose which is the Philippines.
succession is under consideration, whatever may be the nature of the property and The theory of doctrine of renvoi has been defined by various authors, thus:
regardless of the country where said property may be found. The problem has been stated in this way: "When the Conflict of Laws rule of the forum
The application of this article in the case at bar requires the determination of the refers a jural matter to a foreign law for decision, is the reference to the purely
meaning of the term "national law" is used therein. internal rules of law of the foreign system; i.e., to the totality of the foreign law minus
There is no single American law governing the validity of testamentary provisions in its Conflict of Laws rules?"
the United States, each state of the Union having its own private law applicable to its On logic, the solution is not an easy one. The Michigan court chose to accept the
citizens only and in force only within the state. The "national law" indicated in Article renvoi, that is, applied the Conflict of Laws rule of Illinois which referred the matter
16 of the Civil Code above quoted can not, therefore, possibly mean or apply to any back to Michigan law. But once having determined the the Conflict of Laws principle
general American law. So it can refer to no other than the private law of the State of is the rule looked to, it is difficult to see why the reference back should not have been
California. to Michigan Conflict of Laws. This would have resulted in the "endless chain of
references" which has so often been criticized be legal writers. The opponents of the law of the deceased's last domicile. Since by hypothesis X's last domicile was France,
renvoi would have looked merely to the internal law of Illinois, thus rejecting the the natural thing for the Massachusetts court to do would be to turn to French statute
renvoi or the reference back. Yet there seems no compelling logical reason why the of distributions, or whatever corresponds thereto in French law, and decree a
original reference should be the internal law rather than to the Conflict of Laws rule. distribution accordingly. An examination of French law, however, would show that if
It is true that such a solution avoids going on a merry-go-round, but those who have a French court were called upon to determine how this property should be
accepted the renvoi theory avoid this inextricabilis circulas by getting off at the second distributed, it would refer the distribution to the national law of the deceased, thus
reference and at that point applying internal law. Perhaps the opponents of the renvoi applying the Massachusetts statute of distributions. So on the surface of things the
are a bit more consistent for they look always to internal law as the rule of reference. Massachusetts court has open to it alternative course of action: (a) either to apply the
Strangely enough, both the advocates for and the objectors to the renvoi plead that French law is to intestate succession, or (b) to resolve itself into a French court and
greater uniformity will result from adoption of their respective views. And still more apply the Massachusetts statute of distributions, on the assumption that this is what
strange is the fact that the only way to achieve uniformity in this choice-of-law a French court would do. If it accepts the so-called renvoi doctrine, it will follow the
problem is if in the dispute the two states whose laws form the legal basis of the latter course, thus applying its own law.
litigation disagree as to whether the renvoi should be accepted. If both reject, or both This is one type of renvoi. A jural matter is presented which the conflict-of-laws rule
accept the doctrine, the result of the litigation will vary with the choice of the forum. of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers
In the case stated above, had the Michigan court rejected the renvoi, judgment would the matter back again to the law of the forum. This is renvoi in the narrower sense.
have been against the woman; if the suit had been brought in the Illinois courts, and The German term for this judicial process is 'Ruckverweisung.'" (Harvard Law Review,
they too rejected the renvoi, judgment would be for the woman. The same result Vol. 31, pp. 523-571.)
would happen, though the courts would switch with respect to which would hold After a decision has been arrived at that a foreign law is to be resorted to as governing
liability, if both courts accepted the renvoi. a particular case, the further question may arise: Are the rules as to the conflict of
The Restatement accepts the renvoi theory in two instances: where the title to land is laws contained in such foreign law also to be resorted to? This is a question which,
in question, and where the validity of a decree of divorce is challenged. In these cases while it has been considered by the courts in but a few instances, has been the subject
the Conflict of Laws rule of the situs of the land, or the domicile of the parties in the of frequent discussion by textwriters and essayists; and the doctrine involved has
divorce case, is applied by the forum, but any further reference goes only to the been descriptively designated by them as the "Renvoyer" to send back, or the
internal law. Thus, a person's title to land, recognized by the situs, will be recognized "Ruchversweisung", or the "Weiterverweisung", since an affirmative answer to the
by every court; and every divorce, valid by the domicile of the parties, will be valid question postulated and the operation of the adoption of the foreign law in toto
everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.) would in many cases result in returning the main controversy to be decided according
X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving movable to the law of the forum. ... (16 C.J.S. 872.)
property in Massachusetts, England, and France. The question arises as to how this Another theory, known as the "doctrine of renvoi", has been advanced. The theory of
property is to be distributed among X's next of kin. the doctrine of renvoi is that the court of the forum, in determining the question
Assume (1) that this question arises in a Massachusetts court. There the rule of the before it, must take into account the whole law of the other jurisdiction, but also its
conflict of laws as to intestate succession to movables calls for an application of the rules as to conflict of laws, and then apply the law to the actual question which the
rules of the other jurisdiction prescribe. This may be the law of the forum. The We note that Article 946 of the California Civil Code is its conflict of laws rule, while
doctrine of the renvoi has generally been repudiated by the American authorities. (2 the rule applied in In re Kaufman, Supra, its internal law. If the law on succession and
Am. Jur. 296) the conflict of laws rules of California are to be enforced jointly, each in its own
The scope of the theory of renvoi has also been defined and the reasons for its intended and appropriate sphere, the principle cited In re Kaufman should apply to
application in a country explained by Prof. Lorenzen in an article in the Yale Law citizens living in the State, but Article 946 should apply to such of its citizens as are
Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of the article are quoted not domiciled in California but in other jurisdictions. The rule laid down of resorting
herein below: to the law of the domicile in the determination of matters with foreign element
The recognition of the renvoi theory implies that the rules of the conflict of laws are involved is in accord with the general principle of American law that the domiciliary
to be understood as incorporating not only the ordinary or internal law of the foreign law should govern in most matters or rights which follow the person of the owner.
state or country, but its rules of the conflict of laws as well. According to this theory When a man dies leaving personal property in one or more states, and leaves a will
'the law of a country' means the whole of its law. directing the manner of distribution of the property, the law of the state where he
xxx xxx xxx was domiciled at the time of his death will be looked to in deciding legal questions
Von Bar presented his views at the meeting of the Institute of International Law, at about the will, almost as completely as the law of situs is consulted in questions about
Neuchatel, in 1900, in the form of the following theses: the devise of land. It is logical that, since the domiciliary rules control devolution of
(1) Every court shall observe the law of its country as regards the application of foreign the personal estate in case of intestate succession, the same rules should determine
laws. the validity of an attempted testamentary dispostion of the property. Here, also, it is
(2) Provided that no express provision to the contrary exists, the court shall respect: not that the domiciliary has effect beyond the borders of the domiciliary state. The
(a) The provisions of a foreign law which disclaims the right to bind its nationals rules of the domicile are recognized as controlling by the Conflict of Laws rules at the
abroad as regards their personal statute, and desires that said personal statute shall situs property, and the reason for the recognition as in the case of intestate
be determined by the law of the domicile, or even by the law of the place where the succession, is the general convenience of the doctrine. The New York court has said
act in question occurred. on the point: 'The general principle that a dispostiton of a personal property, valid at
(b) The decision of two or more foreign systems of law, provided it be certain that the domicile of the owner, is valid anywhere, is one of the universal application. It had
one of them is necessarily competent, which agree in attributing the determination its origin in that international comity which was one of the first fruits of civilization,
of a question to the same system of law. and it this age, when business intercourse and the process of accumulating property
xxx xxx xxx take but little notice of boundary lines, the practical wisdom and justice of the rule is
If, for example, the English law directs its judge to distribute the personal estate of an more apparent than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)
Englishman who has died domiciled in Belgium in accordance with the law of his Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out
domicile, he must first inquire whether the law of Belgium would distribute personal as the national law is the internal law of California. But as above explained the laws
property upon death in accordance with the law of domicile, and if he finds that the of California have prescribed two sets of laws for its citizens, one for residents therein
Belgian law would make the distribution in accordance with the law of nationality — and another for those domiciled in other jurisdictions. Reason demands that We
that is the English law — he must accept this reference back to his own law. should enforce the California internal law prescribed for its citizens residing therein,
and enforce the conflict of laws rules for the citizens domiciled abroad. If we must in the state of which the subject is a citizen, a law similar to or identical with Art. 946
enforce the law of California as in comity we are bound to go, as so declared in Article of the California Civil Code.
16 of our Civil Code, then we must enforce the law of California in accordance with We therefore find that as the domicile of the deceased Christensen, a citizen of
the express mandate thereof and as above explained, i.e., apply the internal law for California, is the Philippines, the validity of the provisions of his will depriving his
residents therein, and its conflict-of-laws rule for those domiciled abroad. acknowledged natural child, the appellant, should be governed by the Philippine Law,
It is argued on appellees' behalf that the clause "if there is no law to the contrary in the domicile, pursuant to Art. 946 of the Civil Code of California, not by the internal
the place where the property is situated" in Sec. 946 of the California Civil Code refers law of California..
to Article 16 of the Civil Code of the Philippines and that the law to the contrary in the WHEREFORE, the decision appealed from is hereby reversed and the case returned to
Philippines is the provision in said Article 16 that the national law of the deceased the lower court with instructions that the partition be made as the Philippine law on
should govern. This contention can not be sustained. As explained in the various succession provides. Judgment reversed, with costs against appellees.
authorities cited above the national law mentioned in Article 16 of our Civil Code is
the law on conflict of laws in the California Civil Code, i.e., Article 946, which 4) Bellis vs. Bellis June 6, 1967,
authorizes the reference or return of the question to the law of the testator's
domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers G.R. No. L-23678 June 6, 1967
back the case, when a decedent is not domiciled in California, to the law of his TESTATE ESTATE OF AMOS G. BELLIS, deceased.
domicile, the Philippines in the case at bar. The court of the domicile can not and PEOPLE'S BANK and TRUST COMPANY, executor.
should not refer the case back to California; such action would leave the issue MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
incapable of determination because the case will then be like a football, tossed back vs.
and forth between the two states, between the country of which the decedent was a EDWARD A. BELLIS, ET AL., heirs-appellees.
citizen and the country of his domicile. The Philippine court must apply its own law as Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
directed in the conflict of laws rule of the state of the decedent, if the question has to Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
be decided, especially as the application of the internal law of California provides no Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
legitime for children while the Philippine law, Arts. 887(4) and 894, Civil Code of the J. R. Balonkita for appellee People's Bank & Trust Company.
Philippines, makes natural children legally acknowledged forced heirs of the parent Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
recognizing them. BENGZON, J.P., J.:
The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40 Phil. This is a direct appeal to Us, upon a question purely of law, from an order of the Court
105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider Babcock, 52 Phil. of First Instance of Manila dated April 30, 1964, approving the project of partition filed
130; and Gibbs vs. Government, 59 Phil. 293.) cited by appellees to support the by the executor in Civil Case No. 37089 therein.1äwphï1.ñët
decision can not possibly apply in the case at bar, for two important reasons, i.e., the The facts of the case are as follows:
subject in each case does not appear to be a citizen of a state in the United States but Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United
with domicile in the Philippines, and it does not appear in each case that there exists States." By his first wife, Mary E. Mallen, whom he divorced, he had five legitimate
children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A. — pursuant to the "Twelfth" clause of the testator's Last Will and Testament —
Bellis, Alexander Bellis and Anna Bellis Allsman; by his second wife, Violet Kennedy, divided the residuary estate into seven equal portions for the benefit of the testator's
who survived him, he had three legitimate children: Edwin G. Bellis, Walter S. Bellis seven legitimate children by his first and second marriages.
and Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their
Maria Cristina Bellis and Miriam Palma Bellis. respective oppositions to the project of partition on the ground that they were
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of
directed that after all taxes, obligations, and expenses of administration are paid for, the deceased.
his distributable estate should be divided, in trust, in the following order and manner: Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of
(a) $240,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his three which is evidenced by the registry receipt submitted on April 27, 1964 by the
illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or executor.1
P40,000.00 each and (c) after the foregoing two items have been satisfied, the After the parties filed their respective memoranda and other pertinent pleadings, the
remainder shall go to his seven surviving children by his first and second wives, lower court, on April 30, 1964, issued an order overruling the oppositions and
namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman, approving the executor's final account, report and administration and project of
Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët partition. Relying upon Art. 16 of the Civil Code, it applied the national law of the
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, decedent, which in this case is Texas law, which did not provide for legitimes.
U.S.A. His will was admitted to probate in the Court of First Instance of Manila on Their respective motions for reconsideration having been denied by the lower court
September 15, 1958. on June 11, 1964, oppositors-appellants appealed to this Court to raise the issue of
The People's Bank and Trust Company, as executor of the will, paid all the bequests which law must apply — Texas law or Philippine law.
therein including the amount of $240,000.00 in the form of shares of stock to Mary E. In this regard, the parties do not submit the case on, nor even discuss, the doctrine of
Mallen and to the three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis renvoi, applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963.
and Miriam Palma Bellis, various amounts totalling P40,000.00 each in satisfaction of Said doctrine is usually pertinent where the decedent is a national of one country, and
their respective legacies, or a total of P120,000.00, which it released from time to time a domicile of another. In the present case, it is not disputed that the decedent was
according as the lower court approved and allowed the various motions or petitions both a national of Texas and a domicile thereof at the time of his death.2 So that even
filed by the latter three requesting partial advances on account of their respective assuming Texas has a conflict of law rule providing that the domiciliary system (law of
legacies. the domicile) should govern, the same would not result in a reference back (renvoi)
On January 8, 1964, preparatory to closing its administration, the executor submitted to Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a
and filed its "Executor's Final Account, Report of Administration and Project of conflicts rule adopting the situs theory (lex rei sitae) calling for the application of the
Partition" wherein it reported, inter alia, the satisfaction of the legacy of Mary E. law of the place where the properties are situated, renvoi would arise, since the
Mallen by the delivery to her of shares of stock amounting to $240,000.00, and the properties here involved are found in the Philippines. In the absence, however, of
legacies of Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in the amount proof as to the conflict of law rule of Texas, it should not be presumed different from
of P40,000.00 each or a total of P120,000.00. In the project of partition, the executor ours.3 Appellants' position is therefore not rested on the doctrine of renvoi. As stated,
they never invoked nor even mentioned it in their arguments. Rather, they argue that indication of this legislative intent, Congress added a new provision, under Art. 1039,
their case falls under the circumstances mentioned in the third paragraph of Article which decrees that capacity to succeed is to be governed by the national law of the
17 in relation to Article 16 of the Civil Code. decedent.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law It is therefore evident that whatever public policy or good customs may be involved
of the decedent, in intestate or testamentary successions, with regard to four items: in our System of legitimes, Congress has not intended to extend the same to the
(a) the order of succession; (b) the amount of successional rights; (e) the intrinsic succession of foreign nationals. For it has specifically chosen to leave, inter alia, the
validity of the provisions of the will; and (d) the capacity to succeed. They provide that amount of successional rights, to the decedent's national law. Specific provisions must
— prevail over general ones.
ART. 16. Real property as well as personal property is subject to the law of the Appellants would also point out that the decedent executed two wills — one to govern
country where it is situated. his Texas estate and the other his Philippine estate — arguing from this that he
However, intestate and testamentary successions, both with respect to the intended Philippine law to govern his Philippine estate. Assuming that such was the
order of succession and to the amount of successional rights and to the decedent's intention in executing a separate Philippine will, it would not alter the law,
intrinsic validity of testamentary provisions, shall be regulated by the national for as this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a foreigner's
law of the person whose succession is under consideration, whatever may he will to the effect that his properties shall be distributed in accordance with Philippine
the nature of the property and regardless of the country wherein said property law and not with his national law, is illegal and void, for his national law cannot be
may be found. ignored in regard to those matters that Article 10 — now Article 16 — of the Civil Code
ART. 1039. Capacity to succeed is governed by the law of the nation of the states said national law should govern.
decedent. The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas,
Appellants would however counter that Art. 17, paragraph three, of the Civil Code, U.S.A., and that under the laws of Texas, there are no forced heirs or legitimes.
stating that — Accordingly, since the intrinsic validity of the provision of the will and the amount of
Prohibitive laws concerning persons, their acts or property, and those which successional rights are to be determined under Texas law, the Philippine law on
have for their object public order, public policy and good customs shall not be legitimes cannot be applied to the testacy of Amos G. Bellis.
rendered ineffective by laws or judgments promulgated, or by determinations Wherefore, the order of the probate court is hereby affirmed in toto, with costs
or conventions agreed upon in a foreign country. against appellants. So ordered.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro,
correct. Precisely, Congress deleted the phrase, "notwithstanding the provisions of JJ., concur.
this and the next preceding article" when they incorporated Art. 11 of the old Civil
Code as Art. 17 of the new Civil Code, while reproducing without substantial change
the second paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must
have been their purpose to make the second paragraph of Art. 16 a specific provision
in itself which must be applied in testate and intestate succession. As further
5) Cadali. et. al. vs. POEA Administrator, (1) to reverse the Resolution dated September 2, 1991 of NLRC in POEA Cases Nos. L-
G.R. No. L-104776 December 5, 1994 84-06-555, L-85-10-777, L-85-10-799 and
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, and the L-86-05-460 insofar as it: (i) applied the three-year prescriptive period under the Labor
rest of 1,767 NAMED-COMPLAINANTS, thru and by their Attorney-in-fact, Atty. Code of the Philippines instead of the ten-year prescriptive period under the Civil
GERARDO A. DEL MUNDO, petitioners, Code of the Philippines; and (ii) denied the
vs. "three-hour daily average" formula in the computation of petitioners' overtime pay;
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION'S ADMINISTRATOR, and
NATIONAL LABOR RELATIONS COMMISSION, BROWN & ROOT INTERNATIONAL, (2) to reverse the Resolution dated March 24, 1992 of NLRC, denying the motion for
INC. AND/OR ASIA INTERNATIONAL BUILDERS CORPORATION, respondents. reconsideration of its Resolution dated September 2, 1991 (Rollo, pp. 8-25; 26-220).
Gerardo A. Del Mundo and Associates for petitioners. The petition in G.R. Nos. 105029-32, entitled "Asia International Builders Corporation,
Romulo, Mabanta, Sayoc, Buenaventura, De los Angeles Law Offices for BRII/AIBC. et. al., v. National Labor Relations Commission, et. al." was filed under Rule 65 of the
Florante M. De Castro for private respondents in 105029-32. Revised Rules of Court:
(1) to reverse the Resolution dated September 2, 1991 of NLRC in POEA Cases Nos. L-
QUIASON, J.: 84-06-555, L-85-10-777, L-85-10-779 and
The petition in G.R. No. 104776, entitled "Bienvenido M. Cadalin, et. al. v. Philippine L-86-05-460, insofar as it granted the claims of 149 claimants; and
Overseas Employment Administration's Administrator, et. al.," was filed under Rule (2) to reverse the Resolution dated March 21, 1992 of NLRC insofar as it denied the
65 of the Revised Rules of Court: motions for reconsideration of AIBC and BRII (Rollo, pp. 2-59; 61-230).
(1) to modify the Resolution dated September 2, 1991 of the National Labor Relations The Resolution dated September 2, 1991 of NLRC, which modified the decision of
Commission (NLRC) in POEA Cases Nos. POEA in four labor cases: (1) awarded monetary benefits only to 149 claimants and
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-460; (2) to render a new decision: (2) directed Labor Arbiter Fatima J. Franco to conduct hearings and to receive
(i) declaring private respondents as in default; (ii) declaring the said labor cases as a evidence on the claims dismissed by the POEA for lack of substantial evidence or proof
class suit; (iii) ordering Asia International Builders Corporation (AIBC) and Brown and of employment.
Root International Inc. (BRII) to pay the claims of the 1,767 claimants in said labor Consolidation of Cases
cases; (iv) declaring Atty. Florante M. de Castro guilty of forum-shopping; and (v) G.R. Nos. 104776 and 105029-32 were originally raffled to the Third Division while
dismissing POEA Case No. L-86-05-460; and G.R. Nos. 104911-14 were raffled to the Second Division. In the Resolution dated July
(3) to reverse the Resolution dated March 24, 1992 of NLRC, denying the motion for 26, 1993, the Second Division referred G.R. Nos. 104911-14 to the Third Division (G.R.
reconsideration of its Resolution dated September 2, 1991 (Rollo, pp. 8-288). Nos. 104911-14, Rollo, p. 895).
The petition in G.R. Nos. 104911-14, entitled "Bienvenido M. Cadalin, et. al., v. Hon. In the Resolution dated September 29, 1993, the Third Division granted the motion
National Labor Relations Commission, et. al.," was filed under Rule 65 of the Revised filed in G.R. Nos. 104911-14 for the consolidation of said cases with G.R. Nos. 104776
Rules of Court: and 105029-32, which were assigned to the First Division (G.R. Nos. 104911-14, Rollo,
pp. 986-1,107; G.R. Nos. 105029-30, Rollo, pp. 369-377, 426-432). In the Resolution
dated October 27, 1993, the First Division granted the motion to consolidate G.R. Nos. BRII to file their answers and to attend the pre-trial conference on July 25, 1984. The
104911-14 with G.R. No. 104776 (G.R. Nos. 104911-14, Rollo, p. 1109; G.R. Nos. claimants alleged that AIBC and BRII had waived their right to present evidence and
105029-32, Rollo, p. 1562). had defaulted by failing to file their answers and to attend the pre-trial conference.
I On October 2, 1984, the POEA Administrator denied the "Motion to Strike Out of the
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. Evangelista, Records" filed by AIBC but required the claimants to correct the deficiencies in the
in their own behalf and on behalf of 728 other overseas contract workers (OCWs) complaint pointed out in the order.
instituted a class suit by filing an "Amended Complaint" with the Philippine Overseas On October 10, 1984, claimants asked for time within which to comply with the Order
Employment Administration (POEA) for money claims arising from their recruitment of October 2, 1984 and filed an "Urgent Manifestation," praying that the POEA
by AIBC and employment by BRII (POEA Case No. L-84-06-555). The claimants were Administrator direct the parties to submit simultaneously their position papers, after
represented by Atty. Gerardo del Mundo. which the case should be deemed submitted for decision. On the same day, Atty.
BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in Florante de Castro filed another complaint for the same money claims and benefits in
construction; while AIBC is a domestic corporation licensed as a service contractor to behalf of several claimants, some of whom were also claimants in POEA Case No. L-
recruit, mobilize and deploy Filipino workers for overseas employment on behalf of 84-06-555 (POEA Case No. 85-10-779).
its foreign principals. On October 19, 1984, claimants filed their "Compliance" with the Order dated October
The amended complaint principally sought the payment of the unexpired portion of 2, 1984 and an "Urgent Manifestation," praying that the POEA direct the parties to
the employment contracts, which was terminated prematurely, and secondarily, the submit simultaneously their position papers after which the case would be deemed
payment of the interest of the earnings of the Travel and Reserved Fund, interest on submitted for decision. On the same day, AIBC asked for time to file its comment on
all the unpaid benefits; area wage and salary differential pay; fringe benefits; refund the "Compliance" and "Urgent Manifestation" of claimants. On November 6, 1984, it
of SSS and premium not remitted to the SSS; refund of withholding tax not remitted filed a second motion for extension of time to file the comment.
to the BIR; penalties for committing prohibited practices; as well as the suspension of On November 8, 1984, the POEA Administrator informed AIBC that its motion for
the license of AIBC and the accreditation of BRII (G.R. No. 104776, Rollo, pp. 13-14). extension of time was granted.
At the hearing on June 25, 1984, AIBC was furnished a copy of the complaint and was On November 14, 1984, claimants filed an opposition to the motions for extension of
given, together with BRII, up to July 5, 1984 to file its answer. time and asked that AIBC and BRII be declared in default for failure to file their
On July 3, 1984, POEA Administrator, upon motion of AIBC and BRII, ordered the answers.
claimants to file a bill of particulars within ten days from receipt of the order and the On November 20, 1984, AIBC and BRII filed a "Comment" praying, among other reliefs,
movants to file their answers within ten days from receipt of the bill of particulars. that claimants should be ordered to amend their complaint.
The POEA Administrator also scheduled a pre-trial conference on July 25, 1984. On December 27, 1984, the POEA Administrator issued an order directing AIBC and
On July 13, 1984, the claimants submitted their "Compliance and Manifestation." On BRII to file their answers within ten days from receipt of the order.
July 23, 1984, AIBC filed a "Motion to Strike Out of the Records", the "Complaint" and On February 27, 1985, AIBC and BRII appealed to NLRC seeking the reversal of the said
the "Compliance and Manifestation." On July 25, 1984, the claimants filed their order of the POEA Administrator. Claimants opposed the appeal, claiming that it was
"Rejoinder and Comments," averring, among other matters, the failure of AIBC and dilatory and praying that AIBC and BRII be declared in default.
On April 2, 1985, the original claimants filed an "Amended Complaint and/or Position On December 12, 1985, Atty. Del Mundo filed in NLRC a notice of the claim to enforce
Paper" dated March 24, 1985, adding new demands: namely, the payment of attorney's lien.
overtime pay, extra night work pay, annual leave differential pay, leave indemnity pay, On May 29, 1986, Atty. De Castro filed a complaint for money claims (POEA Case No.
retirement and savings benefits and their share of forfeitures (G.R. No. 104776, Rollo, 86-05-460) in behalf of 11 claimants including Bienvenido Cadalin, a claimant in POEA
pp. 14-16). On April 15, 1985, the POEA Administrator directed AIBC to file its answer Case No. 84-06-555.
to the amended complaint (G.R. No. 104776, Rollo, p. 20). On December 12, 1986, the NLRC dismissed the two appeals filed on February 27,
On May 28, 1985, claimants filed an "Urgent Motion for Summary Judgment." On the 1985 and September 18, 1985 by AIBC and BRII.
same day, the POEA issued an order directing AIBC and BRII to file their answers to In narrating the proceedings of the labor cases before the POEA Administrator, it is
the "Amended Complaint," otherwise, they would be deemed to have waived their not amiss to mention that two cases were filed in the Supreme Court by the claimants,
right to present evidence and the case would be resolved on the basis of namely — G.R. No. 72132 on September 26, 1985 and Administrative Case No. 2858
complainant's evidence. on March 18, 1986. On May 13, 1987, the Supreme Court issued a resolution in
On June 5, 1985, AIBC countered with a "Motion to Dismiss as Improper Class Suit and Administrative Case No. 2858 directing the POEA Administrator to resolve the issues
Motion for Bill of Particulars Re: Amended Complaint dated March 24, 1985." raised in the motions and oppositions filed in POEA Cases Nos. L-84-06-555 and L-86-
Claimants opposed the motions. 05-460 and to decide the labor cases with deliberate dispatch.
On September 4, 1985, the POEA Administrator reiterated his directive to AIBC and AIBC also filed a petition in the Supreme Court (G.R. No. 78489), questioning the Order
BRII to file their answers in POEA Case No. L-84-06-555. dated September 4, 1985 of the POEA Administrator. Said order required BRII and
On September 18, 1985, AIBC filed its second appeal to the NLRC, together with a AIBC to answer the amended complaint in POEA Case No. L-84-06-555. In a resolution
petition for the issuance of a writ of injunction. On September 19, 1985, NLRC dated November 9, 1987, we dismissed the petition by informing AIBC that all its
enjoined the POEA Administrator from hearing the labor cases and suspended the technical objections may properly be resolved in the hearings before the POEA.
period for the filing of the answers of AIBC and BRII. Complaints were also filed before the Ombudsman. The first was filed on September
On September 19, 1985, claimants asked the POEA Administrator to include additional 22, 1988 by claimant Hermie Arguelles and 18 co-claimants against the POEA
claimants in the case and to investigate alleged wrongdoings of BRII, AIBC and their Administrator and several NLRC Commissioners. The Ombudsman merely referred the
respective lawyers. complaint to the Secretary of Labor and Employment with a request for the early
On October 10, 1985, Romeo Patag and two co-claimants filed a complaint (POEA Case disposition of POEA Case No. L-84-06-555. The second was filed on April 28, 1989 by
No. L-85-10-777) against AIBC and BRII with the POEA, demanding monetary claims claimants Emigdio P. Bautista and Rolando R. Lobeta charging AIBC and BRII for
similar to those subject of POEA Case No. L-84-06-555. In the same month, Solomon violation of labor and social legislations. The third was filed by Jose R. Santos,
Reyes also filed his own complaint (POEA Case No. L-85-10-779) against AIBC and BRII. Maximino N. Talibsao and Amado B. Bruce denouncing AIBC and BRII of violations of
On October 17, 1985, the law firm of Florante M. de Castro & Associates asked for the labor laws.
substitution of the original counsel of record and the cancellation of the special On January 13, 1987, AIBC filed a motion for reconsideration of the NLRC Resolution
powers of attorney given the original counsel. dated December 12, 1986.
On January 14, 1987, AIBC reiterated before the POEA Administrator its motion for On March 15, 1989, claimants filed their "Supplement to Complainants' Appeal
suspension of the period for filing an answer or motion for extension of time to file Memorandum," together with their "newly discovered evidence" consisting of payroll
the same until the resolution of its motion for reconsideration of the order of the records.
NLRC dismissing the two appeals. On April 28, 1987, NLRC en banc denied the motion On April 5, 1989, AIBC and BRII submitted to NLRC their "Manifestation," stating
for reconsideration. among other matters that there were only 728 named claimants. On April 20, 1989,
At the hearing on June 19, 1987, AIBC submitted its answer to the complaint. At the the claimants filed their "Counter-Manifestation," alleging that there were 1,767 of
same hearing, the parties were given a period of 15 days from said date within which them.
to submit their respective position papers. On June 24, 1987 claimants filed their On July 27, 1989, claimants filed their "Urgent Motion for Execution" of the Decision
"Urgent Motion to Strike Out Answer," alleging that the answer was filed out of time. dated January 30, 1989 on the grounds that BRII had failed to appeal on time and AIBC
On June 29, 1987, claimants filed their "Supplement to Urgent Manifestational had not posted the supersedeas bond in the amount of $824,652.44.
Motion" to comply with the POEA Order of June 19, 1987. On February 24, 1988, AIBC On December 23, 1989, claimants filed another motion to resolve the labor cases.
and BRII submitted their position paper. On March 4, 1988, claimants filed their "Ex- On August 21, 1990, claimants filed their "Manifestational Motion," praying that all
Parte Motion to Expunge from the Records" the position paper of AIBC and BRII, the 1,767 claimants be awarded their monetary claims for failure of private
claiming that it was filed out of time. respondents to file their answers within the reglamentary period required by law.
On September 1, 1988, the claimants represented by Atty. De Castro filed their On September 2, 1991, NLRC promulgated its Resolution, disposing as follows:
memorandum in POEA Case No. L-86-05-460. On September 6, 1988, AIBC and BRII WHEREFORE, premises considered, the Decision of the POEA in these consolidated
submitted their Supplemental Memorandum. On September 12, 1988, BRII filed its cases is modified to the extent and in accordance with the following dispositions:
"Reply to Complainant's Memorandum." On October 26, 1988, claimants submitted 1. The claims of the 94 complainants identified and listed in Annex "A" hereof are
their "Ex-Parte Manifestational Motion and Counter-Supplemental Motion," together dismissed for having prescribed;
with 446 individual contracts of employments and service records. On October 27, 2. Respondents AIBC and Brown & Root are hereby ordered, jointly and severally, to
1988, AIBC and BRII filed a "Consolidated Reply." pay the 149 complainants, identified and listed in Annex "B" hereof, the peso
On January 30, 1989, the POEA Administrator rendered his decision in POEA Case No. equivalent, at the time of payment, of the total amount in US dollars indicated
L-84-06-555 and the other consolidated cases, which awarded the amount of opposite their respective names;
$824,652.44 in favor of only 324 complainants. 3. The awards given by the POEA to the 19 complainants classified and listed in Annex
On February 10, 1989, claimants submitted their "Appeal Memorandum For Partial "C" hereof, who appear to have worked elsewhere than in Bahrain are hereby set
Appeal" from the decision of the POEA. On the same day, AIBC also filed its motion aside.
for reconsideration and/or appeal in addition to the "Notice of Appeal" filed earlier 4. All claims other than those indicated in Annex "B", including those for overtime
on February 6, 1989 by another counsel for AIBC. work and favorably granted by the POEA, are hereby dismissed for lack of substantial
On February 17, 1989, claimants filed their "Answer to Appeal," praying for the evidence in support thereof or are beyond the competence of this Commission to
dismissal of the appeal of AIBC and BRII. pass upon.
 In addition, this Commission, in the exercise of its powers and authority under Article parties to the compromise agreements were concerned (See Annex A for list of
218(c) of the Labor Code, as amended by R.A. 6715, hereby directs Labor Arbiter claimants who signed quitclaims).
Fatima J. Franco of this Commission to summon parties, conduct hearings and Thus the following manifestations that the parties had arrived at a compromise
receive evidence, as expeditiously as possible, and thereafter submit a written report agreement and the corresponding motions for the approval of the agreements were
to this Commission (First Division) of the proceedings taken, regarding the claims of filed by the parties and approved by the Court:
the following: 1) Joint Manifestation and Motion involving claimant Emigdio Abarquez and 47 co-
(a) complainants identified and listed in Annex "D" attached and made an integral claimants dated September 2, 1992 (G.R. Nos. 104911-14, Rollo, pp. 263-406; G.R.
part of this Resolution, whose claims were dismissed by the POEA for lack of proof of Nos. 105029-32, Rollo, pp.
employment in Bahrain (these complainants numbering 683, are listed in pages 13 470-615);
to 23 of the decision of POEA, subject of the appeals) and, 2) Joint Manifestation and Motion involving petitioner Bienvenido Cadalin and 82 co-
(b) complainants identified and listed in Annex "E" attached and made an integral petitioners dated September 3, 1992 (G.R. No. 104776, Rollo, pp. 364-507);
part of this Resolution, whose awards decreed by the POEA, to Our mind, are not 3) Joint Manifestation and Motion involving claimant Jose
supported by substantial evidence" (G.R. No. 104776; Rollo, pp. 113-115; G.R. Nos. M. Aban and 36 co-claimants dated September 17, 1992 (G.R. Nos. 105029-32, Rollo,
104911-14, pp. 85-87; G.R. Nos. 105029-31, pp. 120-122). pp. 613-722; G.R. No. 104776, Rollo, pp. 518-626; G.R. Nos. 104911-14, Rollo, pp.
On November 27, 1991, claimant Amado S. Tolentino and 12 407-516);
co-claimants, who were former clients of Atty. Del Mundo, filed a petition for 4) Joint Manifestation and Motion involving claimant Antonio T. Anglo and 17 co-
certiorari with the Supreme Court (G.R. Nos. 120741-44). The petition was dismissed claimants dated October 14, 1992 (G.R. Nos.
in a resolution dated January 27, 1992. 105029-32, Rollo, pp. 778-843; G.R. No. 104776, Rollo, pp. 650-713; G.R. Nos.
Three motions for reconsideration of the September 2, 1991 Resolution of the NLRC 104911-14, Rollo, pp. 530-590);
were filed. The first, by the claimants represented by Atty. Del Mundo; the second, by 5) Joint Manifestation and Motion involving claimant Dionisio Bobongo and 6 co-
the claimants represented by Atty. De Castro; and the third, by AIBC and BRII. claimants dated January 15, 1993 (G.R. No. 104776, Rollo, pp. 813-836; G.R. Nos.
In its Resolution dated March 24, 1992, NLRC denied all the motions for 104911-14, Rollo, pp. 629-652);
reconsideration. 6) Joint Manifestation and Motion involving claimant Valerio A. Evangelista and 4 co-
Hence, these petitions filed by the claimants represented by Atty. Del Mundo (G.R. claimants dated March 10, 1993 (G.R. Nos. 104911-14, Rollo, pp. 731-746; G.R. No.
No. 104776), the claimants represented by Atty. De Castro (G.R. Nos. 104911-14) and 104776, Rollo, pp. 1815-1829);
by AIBC and BRII (G.R. Nos. 105029-32). 7) Joint Manifestation and Motion involving claimants Palconeri Banaag and 5 co-
II claimants dated March 17, 1993 (G.R. No. 104776, Rollo, pp. 1657-1703; G.R. Nos.
Compromise Agreements 104911-14, Rollo, pp. 655-675);
Before this Court, the claimants represented by Atty. De Castro and AIBC and BRII 8) Joint Manifestation and Motion involving claimant Benjamin Ambrosio and 15
have submitted, from time to time, compromise agreements for our approval and other co-claimants dated May 4, 1993 (G.R. Nos. 105029-32, Rollo, pp. 906-956; G.R.
jointly moved for the dismissal of their respective petitions insofar as the claimants- Nos. 104911-14, Rollo, pp. 679-729; G.R. No. 104776, Rollo, pp. 1773-1814);
 9) Joint Manifestation and Motion involving Valerio Evangelista and 3 co-claimants sparingly made, considering their chaotic arrangement) with AIBC before their
dated May 10, 1993 (G.R. No. 104776, Rollo, pp. 1815-1829); departure from the Philippines. These overseas employment contracts invariably
10) Joint Manifestation and Motion involving petitioner Quiterio R. Agudo and 36 co- contained the following relevant terms and conditions.
claimants dated June 14, 1993 (G.R. Nos. 105029-32, Rollo, pp. 974-1190; G.R. Nos. PART B —
104911-14, Rollo, pp. 748-864; G.R. No. 104776, Rollo, pp. 1066-1183); (1) Employment Position Classification :—————————
11) Joint Manifestation and Motion involving claimant Arnaldo J. Alonzo and 19 co- (Code) :—————————
claimants dated July 22, 1993 (G.R. No. 104776, Rollo, pp. 1173-1235; G.R. Nos. (2) Company Employment Status :—————————
105029-32, Rollo, pp. 1193-1256; G.R. Nos. 104911-14, Rollo, pp. 896-959); (3) Date of Employment to Commence on :—————————
12) Joint Manifestation and Motion involving claimant Ricardo C. Dayrit and 2 co- (4) Basic Working Hours Per Week :—————————
claimants dated September 7, 1993 (G.R. Nos. (5) Basic Working Hours Per Month :—————————
105029-32, Rollo, pp. 1266-1278; G.R. No. 104776, Rollo, pp. 1243-1254; G.R. Nos. (6) Basic Hourly Rate :—————————
104911-14, Rollo, pp. 972-984); (7) Overtime Rate Per Hour :—————————
13) Joint Manifestation and Motion involving claimant Dante C. Aceres and 37 co- (8) Projected Period of Service
claimants dated September 8, 1993 (G.R. No. 104776, Rollo, pp. 1257-1375; G.R. Nos. (Subject to C(1) of this [sic]) :—————————
104911-14, Rollo, pp. 987-1105; 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 Job Completion
dated January 10, 1994 (G.R. Nos. 105029-32, Rollo, Vol. II); xxx xxx xxx
15) Joint Manifestation and Motion involving Domingo B. Solano and six co-claimants 3. HOURS OF WORK AND COMPENSATION
dated August 25, 1994 (G.R. Nos. 105029-32; G.R. No. 104776; G.R. Nos. 104911-14). a) The Employee is employed at the hourly rate and overtime rate as set out in Part
III B of this Document.
The facts as found by the NLRC are as follows: b) The hours of work shall be those set forth by the Employer, and Employer may, at
We have taken painstaking efforts to sift over the more than fifty volumes now his sole option, change or adjust such hours as maybe deemed necessary from time
comprising the records of these cases. From the records, it appears that the to time.
complainants-appellants allege that they were recruited by respondent-appellant 4. TERMINATION
AIBC for its accredited foreign principal, Brown & Root, on various dates from 1975 a) Notwithstanding any other terms and conditions of this agreement, the Employer
to 1983. They were all deployed at various projects undertaken by Brown & Root in may, at his sole discretion, terminate employee's service with cause, under this
several countries in the Middle East, such as Saudi Arabia, Libya, United Arab agreement at any time. If the Employer terminates the services of the Employee
Emirates and Bahrain, as well as in Southeast Asia, in Indonesia and Malaysia. under this Agreement because of the completion or termination, or suspension of
Having been officially processed as overseas contract workers by the Philippine the work on which the Employee's services were being utilized, or because of a
Government, all the individual complainants signed standard overseas employment reduction in force due to a decrease in scope of such work, or by change in the type
contracts (Records, Vols. 25-32. Hereafter, reference to the records would be of construction of such work. The Employer will be responsible for his return
transportation to his country of origin. Normally on the most expeditious air route, Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
economy class accommodation. . . . an employer may require a worker, with his consent, to work on his weekly day of
xxx xxx xxx rest if circumstances so require and in respect of which an additional sum equivalent
10. VACATION/SICK LEAVE BENEFITS to 150% of his normal wage shall be paid to him. . . .
a) After one (1) year of continuous service and/or satisfactory completion of contract, Art. 81: . . . When conditions of work require the worker to work on any official
employee shall be entitled to 12-days vacation leave with pay. This shall be computed holiday, he shall be paid an additional sum equivalent to 150% of his normal wage.
at the basic wage rate. Fractions of a year's service will be computed on a pro-rata Art. 84: Every worker who has completed one year's continuous service with his
basis. employer shall be entitled to leave on full pay for a period of not less than 21 days for
b) Sick leave of 15-days shall be granted to the employee for every year of service for each year increased to a period not less than 28 days after five continuous years of
non-work connected injuries or illness. If the employee failed to avail of such leave service.
benefits, the same shall be forfeited at the end of the year in which said sick leave is A worker shall be entitled to such leave upon a quantum meruit in respect of the
granted. proportion of his service in that year.
11. BONUS Art. 107: A contract of employment made for a period of indefinite duration may be
A bonus of 20% (for offshore work) of gross income will be accrued and payable only terminated by either party thereto after giving the other party thirty days' prior
upon satisfactory completion of this contract. notice before such termination, in writing, in respect of monthly paid workers and
12. OFFDAY PAY fifteen days' notice in respect of other workers. The party terminating a contract
The seventh day of the week shall be observed as a day of rest with 8 hours regular without giving the required notice shall pay to the other party compensation
pay. If work is performed on this day, all hours work shall be paid at the premium equivalent to the amount of wages payable to the worker for the period of such notice
rate. However, this offday pay provision is applicable only when the laws of the Host or the unexpired portion thereof.
Country require payments for rest day. Art. 111: . . . the employer concerned shall pay to such worker, upon termination of
In the State of Bahrain, where some of the individual complainants were deployed, employment, a leaving indemnity for the period of his employment calculated on the
His Majesty Isa Bin Salman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23 basis of fifteen days' wages for each year of the first three years of service and of one
on June 16, 1976, otherwise known as the Labour Law for the Private Sector (Records, month's wages for each year of service thereafter. Such worker shall be entitled to
Vol. 18). This decree took effect on August 16, 1976. Some of the provisions of Amiri payment of leaving indemnity upon a quantum meruit in proportion to the period of
Decree No. 23 that are relevant to the claims of the complainants-appellants are as his service completed within a year.
follows (italics supplied only for emphasis): All the individual complainants-appellants have already been repatriated to the
Art. 79: . . . A worker shall receive payment for each extra hour equivalent to his wage Philippines at the time of the filing of these cases (R.R. No. 104776, Rollo, pp. 59-65).
entitlement increased by a minimum of twenty-five per centum thereof for hours IV
worked during the day; and by a minimum of fifty per centum thereof for hours The issues raised before and resolved by the NLRC were:
worked during the night which shall be deemed to being from seven o'clock in the First: — Whether or not complainants are entitled to the benefits provided by Amiri
evening until seven o'clock in the morning. . . . Decree No. 23 of Bahrain;
(a) Whether or not the complainants who have worked in Bahrain are entitled to the a. Unexpired portion of contract;
above-mentioned benefits. b. Interest earnings of Travel and Reserve Fund;
(b) Whether or not Art. 44 of the same Decree (allegedly prescribing a more favorable c. Retirement and Savings Plan benefits;
treatment of alien employees) bars complainants from enjoying its benefits. d. War Zone bonus or premium pay of at least 100% of basic pay;
Second: — Assuming that Amiri Decree No. 23 of Bahrain is applicable in these cases, e. Area Differential Pay;
whether or not complainants' claim for the benefits provided therein have f. Accrued interests on all the unpaid benefits;
prescribed. g. Salary differential pay;
Third: — Whether or not the instant cases qualify as a class suit. h. Wage differential pay;
Fourth: — Whether or not the proceedings conducted by the POEA, as well as the i. Refund of SSS premiums not remitted to SSS;
decision that is the subject of these appeals, conformed with the requirements of j. Refund of withholding tax not remitted to BIR;
due process; k. Fringe benefits under B & R's "A Summary of Employee Benefits" (Annex "Q" of
(a) Whether or not the respondent-appellant was denied its right to due process; Amended Complaint);
(b) Whether or not the admission of evidence by the POEA after these cases were l. Moral and exemplary damages;
submitted for decision was valid; m. Attorney's fees of at least ten percent of the judgment award;
(c) Whether or not the POEA acquired jurisdiction over Brown & Root International, n. Other reliefs, like suspending and/or cancelling the license to recruit of AIBC and
Inc.; the accreditation of B & R issued by POEA;
(d) Whether or not the judgment awards are supported by substantial evidence; o. Penalty for violations of Article 34 (prohibited practices), not excluding reportorial
(e) Whether or not the awards based on the averages and formula presented by the requirements thereof.
complainants-appellants are supported by substantial evidence; Eighth: — Whether or not the POEA Administrator erred in not dismissing POEA
(f) Whether or not the POEA awarded sums beyond what the complainants- Case No. (L) 86-65-460 on the ground of multiplicity of suits (G.R. Nos. 104911-14,
appellants prayed for; and, if so, whether or not these awards are valid. Rollo, pp. 25-29, 51-55).
Fifth: — Whether or not the POEA erred in holding respondents AIBC and Brown & Anent the first issue, NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on
Root jointly are severally liable for the judgment awards despite the alleged finding Evidence governing the pleading and proof of a foreign law and admitted in evidence
that the former was the employer of the complainants; a simple copy of the Bahrain's Amiri Decree No. 23 of 1976 (Labour Law for the Private
(a) Whether or not the POEA has acquired jurisdiction over Brown & Root; Sector). NLRC invoked Article 221 of the Labor Code of the Philippines, vesting on the
(b) Whether or not the undisputed fact that AIBC was a licensed construction Commission ample discretion to use every and all reasonable means to ascertain the
contractor precludes a finding that Brown & Root is liable for complainants claims. facts in each case without regard to the technicalities of law or procedure. NLRC
Sixth: — Whether or not the POEA Administrator's failure to hold respondents in agreed with the POEA Administrator that the Amiri Decree No. 23, being more
default constitutes a reversible error. favorable and beneficial to the workers, should form part of the overseas employment
Seventh: — Whether or not the POEA Administrator erred in dismissing the contract of the complainants.
following claims:
NLRC, however, held that the Amiri Decree No. 23 applied only to the claimants, who (3) that the POEA Administrator has no jurisdiction over claims for moral and
worked in Bahrain, and set aside awards of the POEA Administrator in favor of the exemplary damages and nonetheless, the basis for granting said damages was not
claimants, who worked elsewhere. established;
On the second issue, NLRC ruled that the prescriptive period for the filing of the claims (4) that the claims for salaries corresponding to the unexpired portion of their
of the complainants was three years, as provided in Article 291 of the Labor Code of contract may be allowed if filed within the three-year prescriptive period;
the Philippines, and not ten years as provided in Article 1144 of the Civil Code of the (5) that the allegation that complainants were prematurely repatriated prior to the
Philippines nor one year as provided in the Amiri Decree No. 23 of 1976. expiration of their overseas contract was not established; and
On the third issue, NLRC agreed with the POEA Administrator that the labor cases (6) that the POEA Administrator has no jurisdiction over the complaint for the
cannot be treated as a class suit for the simple reason that not all the complainants suspension or cancellation of the AIBC's recruitment license and the cancellation of
worked in Bahrain and therefore, the subject matter of the action, the claims arising the accreditation of BRII.
from the Bahrain law, is not of common or general interest to all the complainants. NLRC passed sub silencio the last issue, the claim that POEA Case No. (L) 86-65-460
On the fourth issue, NLRC found at least three infractions of the cardinal rules of should have been dismissed on the ground that the claimants in said case were also
administrative due process: namely, (1) the failure of the POEA Administrator to claimants in POEA Case No. (L) 84-06-555. Instead of dismissing POEA Case No. (L) 86-
consider the evidence presented by AIBC and BRII; (2) some findings of fact were not 65-460, the POEA just resolved the corresponding claims in POEA Case No. (L) 84-06-
supported by substantial evidence; and (3) some of the evidence upon which the 555. In other words, the POEA did not pass upon the same claims twice.
decision was based were not disclosed to AIBC and BRII during the hearing. V
On the fifth issue, NLRC sustained the ruling of the POEA Administrator that BRII and G.R. No. 104776
AIBC are solidarily liable for the claims of the complainants and held that BRII was the Claimants in G.R. No. 104776 based their petition for certiorari on the following
actual employer of the complainants, or at the very least, the indirect employer, with grounds:
AIBC as the labor contractor. (1) that they were deprived by NLRC and the POEA of their right to a speedy
NLRC also held that jurisdiction over BRII was acquired by the POEA Administrator disposition of their cases as guaranteed by Section 16, Article III of the 1987
through the summons served on AIBC, its local agent. Constitution. The POEA Administrator allowed private respondents to file their
On the sixth issue, NLRC held that the POEA Administrator was correct in denying the answers in two years (on June 19, 1987) after the filing of the original complaint (on
Motion to Declare AIBC in default. April 2, 1985) and NLRC, in total disregard of its own rules, affirmed the action of the
On the seventh issue, which involved other money claims not based on the Amiri POEA Administrator;
Decree No. 23, NLRC ruled: (2) that NLRC and the POEA Administrator should have declared AIBC and BRII in
(1) that the POEA Administrator has no jurisdiction over the claims for refund of the default and should have rendered summary judgment on the basis of the pleadings
SSS premiums and refund of withholding taxes and the claimants should file their and evidence submitted by claimants;
claims for said refund with the appropriate government agencies; (3) the NLRC and POEA Administrator erred in not holding that the labor cases filed by
(2) the claimants failed to establish that they are entitled to the claims which are not AIBC and BRII cannot be considered a class suit;
based on the overseas employment contracts nor the Amiri Decree No. 23 of 1976; (4) that the prescriptive period for the filing of the claims is ten years; and
(5) that NLRC and the POEA Administrator should have dismissed POEA Case No. L-86- Castro had no right to represent them in said agreements. He also claimed that the
05-460, the case filed by Atty. Florante de Castro (Rollo, pp. 31-40). claimants were paid less than the award given them by NLRC; that Atty. De Castro
AIBC and BRII, commenting on the petition in G.R. No. 104776, argued: collected additional attorney's fees on top of the 25% which he was entitled to
(1) that they were not responsible for the delay in the disposition of the labor cases, receive; and that the consent of the claimants to the compromise agreements and
considering the great difficulty of getting all the records of the more than 1,500 quitclaims were procured by fraud (G.R. No. 104776, Rollo, pp. 838-810). In the
claimants, the piece-meal filing of the complaints and the addition of hundreds of new Resolution dated November 23, 1992, the Court denied the motion to strike out the
claimants by petitioners; Joint Manifestations and Motions dated September 2 and 11, 1992 (G.R. Nos. 104911-
(2) that considering the number of complaints and claimants, it was impossible to 14, Rollo, pp. 608-609).
prepare the answers within the ten-day period provided in the NLRC Rules, that when On December 14, 1992, Atty. Del Mundo filed a "Notice and Claim to Enforce
the motion to declare AIBC in default was filed on July 19, 1987, said party had already Attorney's Lien," alleging that the claimants who entered into compromise
filed its answer, and that considering the staggering amount of the claims (more than agreements with AIBC and BRII with the assistance of Atty. De Castro, had all signed a
US$50,000,000.00) and the complicated issues raised by the parties, the ten-day rule retainer agreement with his law firm (G.R. No. 104776, Rollo, pp. 623-624; 838-1535).
to answer was not fair and reasonable; Contempt of Court
(3) that the claimants failed to refute NLRC's finding that On February 18, 1993, an omnibus motion was filed by Atty. Del Mundo to cite Atty.
there was no common or general interest in the subject matter of the controversy — De Castro and Atty. Katz Tierra for contempt of court and for violation of Canons 1, 15
which was the applicability of the Amiri Decree No. 23. Likewise, the nature of the and 16 of the Code of Professional Responsibility. The said lawyers allegedly misled
claims varied, some being based on salaries pertaining to the unexpired portion of the this Court, by making it appear that the claimants who entered into the compromise
contracts while others being for pure money claims. Each claimant demanded agreements were represented by Atty. De Castro, when in fact they were represented
separate claims peculiar only to himself and depending upon the particular by Atty. Del Mundo (G.R. No. 104776, Rollo, pp. 1560-1614).
circumstances obtaining in his case; On September 23, 1994, Atty. Del Mundo reiterated his charges against Atty. De
(4) that the prescriptive period for filing the claims is that prescribed by Article 291 Castro for unethical practices and moved for the voiding of the quitclaims submitted
of the Labor Code of the Philippines (three years) and not the one prescribed by by some of the claimants.
Article 1144 of the Civil Code of the Philippines (ten years); and G.R. Nos. 104911-14
(5) that they are not concerned with the issue of whether POEA Case No. L-86-05- The claimants in G.R. Nos. 104911-14 based their petition for certiorari on the grounds
460 should be dismissed, this being a private quarrel between the two labor lawyers that NLRC gravely abused its discretion when it: (1) applied the three-year prescriptive
(Rollo, pp. 292-305). period under the Labor Code of the Philippines; and (2) it denied the claimant's
Attorney's Lien formula based on an average overtime pay of three hours a day (Rollo, pp. 18-22).
On November 12, 1992, Atty. Gerardo A. del Mundo moved to strike out the joint The claimants argue that said method was proposed by BRII itself during the
manifestations and motions of AIBC and BRII dated September 2 and 11, 1992, negotiation for an amicable settlement of their money claims in Bahrain as shown in
claiming that all the claimants who entered into the compromise agreements subject the Memorandum dated April 16, 1983 of the Ministry of Labor of Bahrain (Rollo, pp.
of said manifestations and motions were his clients and that Atty. Florante M. de 21-22).
BRII and AIBC, in their Comment, reiterated their contention in G.R. No. 104776 that The claimants in G.R. No. 104776 and G.R. Nos. 104911-14, invoking different
the prescriptive period in the Labor Code of the Philippines, a special law, prevails grounds, insisted that NLRC erred in ruling that the prescriptive period applicable to
over that provided in the Civil Code of the Philippines, a general law. the claims was three years, instead of ten years, as found by the POEA Administrator.
As to the memorandum of the Ministry of Labor of Bahrain on the method of The Solicitor General expressed his personal view that the prescriptive period was one
computing the overtime pay, BRII and AIBC claimed that they were not bound by what year as prescribed by the Amiri Decree No. 23 of 1976 but he deferred to the ruling of
appeared therein, because such memorandum was proposed by a subordinate NLRC that Article 291 of the Labor Code of the Philippines was the operative law.
Bahrain official and there was no showing that it was approved by the Bahrain The POEA Administrator held the view that:
Minister of Labor. Likewise, they claimed that the averaging method was discussed in These money claims (under Article 291 of the Labor Code) refer to those arising from
the course of the negotiation for the amicable settlement of the dispute and any offer the employer's violation of the employee's right as provided by the Labor Code.
made by a party therein could not be used as an admission by him (Rollo, pp. 228- In the instant case, what the respondents violated are not the rights of the workers as
236). provided by the Labor Code, but the provisions of the Amiri Decree No. 23 issued in
G.R. Nos. 105029-32 Bahrain, which ipso facto amended the worker's contracts of employment.
In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC gravely abused its discretion Respondents consciously failed to conform to these provisions which specifically
when it: (1) enforced the provisions of the Amiri Decree No. 23 of 1976 and not the provide for the increase of the worker's rate. It was only after June 30, 1983, four
terms of the employment contracts; (2) granted claims for holiday, overtime and leave months after the brown builders brought a suit against B & R in Bahrain for this same
indemnity pay and other benefits, on evidence admitted in contravention of claim, when respondent AIBC's contracts have undergone amendments in Bahrain for
petitioner's constitutional right to due process; and (3) ordered the POEA the new hires/renewals (Respondent's Exhibit 7).
Administrator to hold new hearings for the 683 claimants whose claims had been Hence, premises considered, the applicable law of prescription to this instant case is
dismissed for lack of proof by the POEA Administrator or NLRC itself. Lastly, they allege Article 1144 of the Civil Code of the Philippines, which provides:
that assuming that the Amiri Decree No. 23 of 1976 was applicable, NLRC erred when Art. 1144. The following actions may be brought within ten years from the time the
it did not apply the one-year prescription provided in said law (Rollo, pp. 29-30). cause of action accrues:
VI (1) Upon a written contract;
G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos. 105029-32 (2) Upon an obligation created by law;
All the petitions raise the common issue of prescription although they disagreed as to Thus, herein money claims of the complainants against the respondents shall
the time that should be embraced within the prescriptive period. prescribe in ten years from August 16, 1976. Inasmuch as all claims were filed within
To the POEA Administrator, the prescriptive period was ten years, applying Article the ten-year prescriptive period, no claim suffered the infirmity of being prescribed
1144 of the Civil Code of the Philippines. NLRC believed otherwise, fixing the (G.R. No. 104776, Rollo, 89-90).
prescriptive period at three years as provided in Article 291 of the Labor Code of the In overruling the POEA Administrator, and holding that the prescriptive period is three
Philippines. years as provided in Article 291 of the Labor Code of the Philippines, the NLRC argued
as follows:
The Labor Code provides that "all money claims arising from employer-employee The court further noted:
relations . . . shall be filed within three years from the time the cause of action xxx xxx xxx
accrued; otherwise they shall be forever barred" (Art. 291, Labor Code, as amended). Applying that test here it appears to us that the libelant is entitled to succeed, for the
This three-year prescriptive period shall be the one applied here and which should be respondents have failed to satisfy us that the Panamanian period of limitation in
reckoned from the date of repatriation of each individual complainant, considering question was specifically aimed against the particular rights which the libelant seeks
the fact that the case is having (sic) filed in this country. We do not agree with the to enforce. The Panama Labor Code is a statute having broad objectives, viz: "The
POEA Administrator that this three-year prescriptive period applies only to money present Code regulates the relations between capital and labor, placing them on a
claims specifically recoverable under the Philippine Labor Code. Article 291 gives no basis of social justice, so that, without injuring any of the parties, there may be
such indication. Likewise, We can not consider complainants' cause/s of action to have guaranteed for labor the necessary conditions for a normal life and to capital an
accrued from a violation of their employment contracts. There was no violation; the equitable return to its investment." In pursuance of these objectives the Code gives
claims arise from the benefits of the law of the country where they worked. (G.R. No. laborers various rights against their employers. Article 623 establishes the period of
104776, Rollo, pp. limitation for all such rights, except certain ones which are enumerated in Article 621.
90-91). And there is nothing in the record to indicate that the Panamanian legislature gave
Anent the applicability of the one-year prescriptive period as provided by the Amiri special consideration to the impact of Article 623 upon the particular rights sought
Decree No. 23 of 1976, NLRC opined that the applicability of said law was one of to be enforced here, as distinguished from the other rights to which that Article is
characterization, i.e., whether to characterize the foreign law on prescription or also applicable. Were we confronted with the question of whether the limitation
statute of limitation as "substantive" or "procedural." NLRC cited the decision in period of Article 621 (which carves out particular rights to be governed by a shorter
Bournias v. Atlantic Maritime Company (220 F. 2d. 152, 2d Cir. [1955], where the issue limitation period) is to be regarded as "substantive" or "procedural" under the rule
was the applicability of the Panama Labor Code in a case filed in the State of New York of "specifity" we might have a different case; but here on the surface of things we
for claims arising from said Code. In said case, the claims would have prescribed under appear to be dealing with a "broad," and not a "specific," statute of limitations (G.R.
the Panamanian Law but not under the Statute of Limitations of New York. The U.S. No. 104776, Rollo, pp.
Circuit Court of Appeals held that the Panamanian Law was procedural as it was not 92-94).
"specifically intended to be substantive," hence, the prescriptive period provided in Claimants in G.R. Nos. 104911-14 are of the view that Article 291 of the Labor Code
the law of the forum should apply. The Court observed: of the Philippines, which was applied by NLRC, refers only to claims "arising from the
. . . And where, as here, we are dealing with a statute of limitations of a foreign employer's violation of the employee's right as provided by the Labor Code." They
country, and it is not clear on the face of the statute that its purpose was to limit the assert that their claims are based on the violation of their employment contracts, as
enforceability, outside as well as within the foreign country concerned, of the amended by the Amiri Decree No. 23 of 1976 and therefore the claims may be brought
substantive rights to which the statute pertains, we think that as a yardstick for within ten years as provided by Article 1144 of the Civil Code of the Philippines (Rollo,
determining whether that was the purpose this test is the most satisfactory one. It G.R. Nos. 104911-14, pp.
does not lead American courts into the necessity of examining into the unfamiliar 18-21). To bolster their contention, they cite PALEA v. Philippine Airlines, Inc., 70 SCRA
peculiarities and refinements of different foreign legal systems. . . 244 (1976).
AIBC and BRII, insisting that the actions on the claims have prescribed under the Amiri "borrowing statutes," one form provides that an action barred by the laws of the place
Decree No. 23 of 1976, argue that there is in force in the Philippines a "borrowing where it accrued, will not be enforced in the forum even though the local statute has
law," which is Section 48 of the Code of Civil Procedure and that where such kind of not run against it (Goodrich and Scoles, Conflict of Laws, 152-153 [1938]). Section 48
law exists, it takes precedence over the common-law conflicts rule (G.R. No. 104776, of our Code of Civil Procedure is of this kind. Said Section provides:
Rollo, pp. 45-46). If by the laws of the state or country where the cause of action arose, the action is
First to be determined is whether it is the Bahrain law on prescription of action based barred, it is also barred in the Philippines Islands.
on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be Section 48 has not been repealed or amended by the Civil Code of the Philippines.
the governing law. Article 2270 of said Code repealed only those provisions of the Code of Civil
Article 156 of the Amiri Decree No. 23 of 1976 provides: Procedures as to which were inconsistent with it. There is no provision in the Civil
A claim arising out of a contract of employment shall not be actionable after the lapse Code of the Philippines, which is inconsistent with or contradictory to Section 48 of
of one year from the date of the expiry of the contract. (G.R. Nos. 105029-31, Rollo, the Code of Civil Procedure (Paras, Philippine Conflict of Laws 104 [7th ed.]).
p. 226). In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex
As a general rule, a foreign procedural law will not be applied in the forum. Procedural proprio vigore insofar as it ordains the application in this jurisdiction of Section 156 of
matters, such as service of process, joinder of actions, period and requisites for the Amiri Decree No. 23 of 1976.
appeal, and so forth, are governed by the laws of the forum. This is true even if the The courts of the forum will not enforce any foreign claim obnoxious to the forum's
action is based upon a foreign substantive law (Restatement of the Conflict of Laws, public policy (Canadian Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64
Sec. 685; Salonga, Private International Law, 131 [1979]). L. ed. 713 [1920]). To enforce the one-year prescriptive period of the Amiri Decree
A law on prescription of actions is sui generis in Conflict of Laws in the sense that it No. 23 of 1976 as regards the claims in question would contravene the public policy
may be viewed either as procedural or substantive, depending on the characterization on the protection to labor.
given such a law. In the Declaration of Principles and State Policies, the 1987 Constitution emphasized
Thus in Bournias v. Atlantic Maritime Company, supra, the American court applied the that:
statute of limitations of New York, instead of the Panamanian law, after finding that The state shall promote social justice in all phases of national development. (Sec. 10).
there was no showing that the Panamanian law on prescription was intended to be The state affirms labor as a primary social economic force. It shall protect the rights
substantive. Being considered merely a procedural law even in Panama, it has to give of workers and promote their welfare (Sec. 18).
way to the law of the forum on prescription of actions. In article XIII on Social Justice and Human Rights, the 1987 Constitution provides:
However, the characterization of a statute into a procedural or substantive law Sec. 3. The State shall afford full protection to labor, local and overseas, organized and
becomes irrelevant when the country of the forum has a "borrowing statute." Said unorganized, and promote full employment and equality of employment
statute has the practical effect of treating the foreign statute of limitation as one of opportunities for all.
substance (Goodrich, Conflict of Laws 152-153 [1938]). A "borrowing statute" directs Having determined that the applicable law on prescription is the Philippine law, the
the state of the forum to apply the foreign statute of limitations to the pending claims next question is whether the prescriptive period governing the filing of the claims is
based on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of
three years, as provided by the Labor Code or ten years, as provided by the Civil Code Any action to enforce any cause of action under this Act shall be commenced within
of the Philippines. three years after the cause of action accrued otherwise such action shall be forever
The claimants are of the view that the applicable provision is Article 1144 of the Civil barred, . . . .
Code of the Philippines, which provides: The court further explained:
The following actions must be brought within ten years from the time the right of The three-year prescriptive period fixed in the Eight-Hour Labor Law (CA No. 444 as
action accrues: amended) will apply, if the claim for differentials for overtime work is solely based on
(1) Upon a written contract; said law, and not on a collective bargaining agreement or any other contract. In the
(2) Upon an obligation created by law; instant case, the claim for overtime compensation is not so much because of
(3) Upon a judgment. Commonwealth Act No. 444, as amended but because the claim is demandable right
NLRC, on the other hand, believes that the applicable provision is Article 291 of the of the employees, by reason of the above-mentioned collective bargaining
Labor Code of the Philippines, which in pertinent part provides: agreement.
Money claims-all money claims arising from employer-employee relations accruing Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for filing
during the effectivity of this Code shall be filed within three (3) years from the time "actions to enforce any cause of action under said law." On the other hand, Article
the cause of action accrued, otherwise they shall be forever barred. 291 of the Labor Code of the Philippines provides the prescriptive period for filing
xxx xxx xxx "money claims arising from employer-employee relations." The claims in the cases at
The case of Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 70 bench all arose from the employer-employee relations, which is broader in scope than
SCRA 244 (1976) invoked by the claimants in G.R. Nos. 104911-14 is inapplicable to claims arising from a specific law or from the collective bargaining agreement.
the cases at bench (Rollo, p. 21). The said case involved the correct computation of The contention of the POEA Administrator, that the three-year prescriptive period
overtime pay as provided in the collective bargaining agreements and not the Eight- under Article 291 of the Labor Code of the Philippines applies only to money claims
Hour Labor Law. specifically recoverable under said Code, does not find support in the plain language
As noted by the Court: "That is precisely why petitioners did not make any reference of the provision. Neither is the contention of the claimants in G.R. Nos. 104911-14
as to the computation for overtime work under the Eight-Hour Labor Law (Secs. 3 and that said Article refers only to claims "arising from the employer's violation of the
4, CA No. 494) and instead insisted that work computation provided in the collective employee's right," as provided by the Labor Code supported by the facial reading of
bargaining agreements between the parties be observed. Since the claim for pay the provision.
differentials is primarily anchored on the written contracts between the litigants, the VII
ten-year prescriptive period provided by Art. 1144(1) of the New Civil Code should G.R. No. 104776
govern." A. As to the first two grounds for the petition in G.R. No. 104776, claimants aver: (1)
Section 7-a of the Eight-Hour Labor Law (CA No. 444 as amended by R.A. No. 19933) that while their complaints were filed on June 6, 1984 with POEA, the case was
provides: decided only on January 30, 1989, a clear denial of their right to a speedy disposition
of the case; and (2) that NLRC and the POEA Administrator should have declared AIBC
and BRII in default (Rollo, pp. Since July 25, 1984 or a month after AIBC and BRII were served with a copy of the
31-35). amended complaint, claimants had been asking that AIBC and BRII be declared in
Claimants invoke a new provision incorporated in the 1987 Constitution, which default for failure to file their answers within the ten-day period provided in Section
provides: 1, Rule III of Book VI of the Rules and Regulations of the POEA. At that time, there was
Sec. 16. All persons shall have the right to a speedy disposition of their cases before a pending motion of AIBC and BRII to strike out of the records the amended complaint
all judicial, quasi-judicial, or administrative bodies. and the "Compliance" of claimants to the order of the POEA, requiring them to submit
It is true that the constitutional right to "a speedy disposition of cases" is not limited a bill of particulars.
to the accused in criminal proceedings but extends to all parties in all cases, including The cases at bench are not of the run-of-the-mill variety, such that their final
civil and administrative cases, and in all proceedings, including judicial and quasi- disposition in the administrative level after seven years from their inception, cannot
judicial hearings. Hence, under the Constitution, any party to a case may demand be said to be attended by unreasonable, arbitrary and oppressive delays as to violate
expeditious action on all officials who are tasked with the administration of justice. the constitutional rights to a speedy disposition of the cases of complainants.
However, as held in Caballero v. Alfonso, Jr., 153 SCRA 153 (1987), "speedy disposition The amended complaint filed on June 6, 1984 involved a total of 1,767 claimants. Said
of cases" is a relative term. Just like the constitutional guarantee of "speedy trial" complaint had undergone several amendments, the first being on April 3, 1985.
accorded to the accused in all criminal proceedings, "speedy disposition of cases" is a The claimants were hired on various dates from 1975 to 1983. They were deployed in
flexible concept. It is consistent with delays and depends upon the circumstances of different areas, one group in and the other groups outside of, Bahrain. The monetary
each case. What the Constitution prohibits are unreasonable, arbitrary and oppressive claims totalling more than US$65 million according to Atty. Del Mundo, included:
delays which render rights nugatory. 1. Unexpired portion of contract;
Caballero laid down the factors that may be taken into consideration in determining 2. Interest earnings of Travel and Fund;
whether or not the right to a "speedy disposition of cases" has been violated, thus: 3. Retirement and Savings Plan benefit;
In the determination of whether or not the right to a "speedy trial" has been violated, 4. War Zone bonus or premium pay of at least 100% of basic pay;
certain factors may be considered and balanced against each other. These are length 5. Area Differential pay;
of delay, reason for the delay, assertion of the right or failure to assert it, and prejudice 6. Accrued Interest of all the unpaid benefits;
caused by the delay. The same factors may also be considered in answering judicial 7. Salary differential pay;
inquiry whether or not a person officially charged with the administration of justice 8. Wage Differential pay;
has violated the speedy disposition of cases. 9. Refund of SSS premiums not remitted to Social Security System;
Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298, (1991), we held: 10. Refund of Withholding Tax not remitted to Bureau of Internal Revenue (B.I.R.);
It must be here emphasized that the right to a speedy disposition of a case, like the 11. Fringe Benefits under Brown & Root's "A Summary of Employees Benefits
right to speedy trial, is deemed violated only when the proceeding is attended by consisting of 43 pages (Annex "Q" of Amended Complaint);
vexatious, capricious, and oppressive delays; or when unjustified postponements of 12. Moral and Exemplary Damages;
the trial are asked for and secured, or when without cause or justified motive a long 13. Attorney's fees of at least ten percent of amounts;
period of time is allowed to elapse without the party having his case tried.
 14. Other reliefs, like suspending and/or cancelling the license to recruit of AIBC and parties and counsel is remarkable. As late as last month, this Commission made a last
issued by the POEA; and and final attempt to bring the counsel of all the parties (this Commission issued a
15. Penalty for violation of Article 34 (Prohibited practices) not excluding reportorial special order directing respondent Brown & Root's resident agent/s to appear) to
requirements thereof (NLRC Resolution, September 2, 1991, pp. 18-19; G.R. No. come to a more conciliatory stance. Even this failed (Rollo,
104776, Rollo, pp. 73-74). p. 58).
Inasmuch as the complaint did not allege with sufficient definiteness and clarity of The squabble between the lawyers of claimants added to the delay in the disposition
some facts, the claimants were ordered to comply with the motion of AIBC for a bill of the cases, to the lament of NLRC, which complained:
of particulars. When claimants filed their "Compliance and Manifestation," AIBC It is very evident from the records that the protagonists in these consolidated cases
moved to strike out the complaint from the records for failure of claimants to submit appear to be not only the individual complainants, on the one hand, and AIBC and
a proper bill of particulars. While the POEA Administrator denied the motion to strike Brown & Root, on the other hand. The two lawyers for the complainants, Atty.
out the complaint, he ordered the claimants "to correct the deficiencies" pointed out Gerardo Del Mundo and Atty. Florante De Castro, have yet to settle the right of
by AIBC. representation, each one persistently claiming to appear in behalf of most of the
Before an intelligent answer could be filed in response to the complaint, the records complainants. As a result, there are two appeals by the complainants. Attempts by
of employment of the more than 1,700 claimants had to be retrieved from various this Commission to resolve counsels' conflicting claims of their respective authority to
countries in the Middle East. Some of the records dated as far back as 1975. represent the complainants prove futile. The bickerings by these two counsels are
The hearings on the merits of the claims before the POEA Administrator were reflected in their pleadings. In the charges and countercharges of falsification of
interrupted several times by the various appeals, first to NLRC and then to the documents and signatures, and in the disbarment proceedings by one against the
Supreme Court. other. All these have, to a large extent, abetted in confounding the issues raised in
Aside from the inclusion of additional claimants, two new cases were filed against these cases, jumble the presentation of evidence, and even derailed the prospects of
AIBC and BRII on October 10, 1985 (POEA Cases Nos. an amicable settlement. It would not be far-fetched to imagine that both counsel,
L-85-10-777 and L-85-10-779). Another complaint was filed on May 29, 1986 (POEA unwittingly, perhaps, painted a rainbow for the complainants, with the proverbial pot
Case No. L-86-05-460). NLRC, in exasperation, noted that the exact number of of gold at its end containing more than US$100 million, the aggregate of the claims in
claimants had never been completely established (Resolution, Sept. 2, 1991, G.R. No. these cases. It is, likewise, not improbable that their misplaced zeal and exuberance
104776, Rollo, p. 57). All the three new cases were consolidated with POEA Case No. caused them to throw all caution to the wind in the matter of elementary rules of
L-84-06-555. procedure and evidence (Rollo, pp. 58-59).
NLRC blamed the parties and their lawyers for the delay in terminating the Adding to the confusion in the proceedings before NLRC, is the listing of some of the
proceedings, thus: complainants in both petitions filed by the two lawyers. As noted by NLRC, "the
These cases could have been spared the long and arduous route towards resolution problem created by this situation is that if one of the two petitions is dismissed, then
had the parties and their counsel been more interested in pursuing the truth and the the parties and the public respondents would not know which claim of which
merits of the claims rather than exhibiting a fanatical reliance on technicalities. Parties petitioner was dismissed and which was not."
and counsel have made these cases a litigation of emotion. The intransigence of
B. Claimants insist that all their claims could properly be consolidated in a "class suit" that can be accorded to them under the Rules of Court is to be allowed to join as
because "all the named complainants have similar money claims and similar rights plaintiffs in one complaint (Revised Rules of Court, Rule 3, Sec. 6).
sought irrespective of whether they worked in Bahrain, United Arab Emirates or in The Court is extra-cautious in allowing class suits because they are the exceptions to
Abu Dhabi, Libya or in any part of the Middle East" (Rollo, pp. 35-38). the condition sine qua non, requiring the joinder of all indispensable parties.
A class suit is proper where the subject matter of the controversy is one of common In an improperly instituted class suit, there would be no problem if the decision
or general interest to many and the parties are so numerous that it is impracticable secured is favorable to the plaintiffs. The problem arises when the decision is adverse
to bring them all before the court (Revised Rules of Court, Rule 3, Sec. 12). to them, in which case the others who were impleaded by their self-appointed
While all the claims are for benefits granted under the Bahrain Law, many of the representatives, would surely claim denial of due process.
claimants worked outside Bahrain. Some of the claimants were deployed in Indonesia C. The claimants in G.R. No. 104776 also urged that the POEA Administrator and NLRC
and Malaysia under different terms and conditions of employment. should have declared Atty. Florante De Castro guilty of "forum shopping, ambulance
NLRC and the POEA Administrator are correct in their stance that inasmuch as the first chasing activities, falsification, duplicity and other unprofessional activities" and his
requirement of a class suit is not present (common or general interest based on the appearances as counsel for some of the claimants as illegal (Rollo, pp. 38-40).
Amiri Decree of the State of Bahrain), it is only logical that only those who worked in The Anti-Forum Shopping Rule (Revised Circular No. 28-91) is intended to put a stop
Bahrain shall be entitled to file their claims in a class suit. to the practice of some parties of filing multiple petitions and complaints involving the
While there are common defendants (AIBC and BRII) and the nature of the claims is same issues, with the result that the courts or agencies have to resolve the same
the same (for employee's benefits), there is no common question of law or fact. While issues. Said Rule, however, applies only to petitions filed with the Supreme Court and
some claims are based on the Amiri Law of Bahrain, many of the claimants never the Court of Appeals. It is entitled "Additional Requirements For Petitions Filed with
worked in that country, but were deployed elsewhere. Thus, each claimant is the Supreme Court and the Court of Appeals To Prevent Forum Shopping or Multiple
interested only in his own demand and not in the claims of the other employees of Filing of Petitioners and Complainants." The first sentence of the circular expressly
defendants. The named claimants have a special or particular interest in specific states that said circular applies to an governs the filing of petitions in the Supreme
benefits completely different from the benefits in which the other named claimants Court and the Court of Appeals.
and those included as members of a "class" are claiming (Berses v. Villanueva, 25 Phil. While Administrative Circular No. 04-94 extended the application of the anti-forum
473 [1913]). It appears that each claimant is only interested in collecting his own shopping rule to the lower courts and administrative agencies, said circular took effect
claims. A claimants has no concern in protecting the interests of the other claimants only on April 1, 1994.
as shown by the fact, that hundreds of them have abandoned their co-claimants and POEA and NLRC could not have entertained the complaint for unethical conduct
have entered into separate compromise settlements of their respective claims. A against Atty. De Castro because NLRC and POEA have no jurisdiction to investigate
principle basic to the concept of "class suit" is that plaintiffs brought on the record charges of unethical conduct of lawyers.
must fairly represent and protect the interests of the others (Dimayuga v. Court of Attorney's Lien
Industrial Relations, 101 Phil. 590 [1957]). For this matter, the claimants who worked The "Notice and Claim to Enforce Attorney's Lien" dated December 14, 1992 was filed
in Bahrain can not be allowed to sue in a class suit in a judicial proceeding. The most by Atty. Gerardo A. Del Mundo to protect his claim for attorney's fees for legal services
rendered in favor of the claimants (G.R. No. 104776, Rollo, pp. 841-844).
A statement of a claim for a charging lien shall be filed with the court or administrative A. 1. The average duration of the actual service of the employee is 35 months for the
agency which renders and executes the money judgment secured by the lawyer for Philippino (sic) employees . . . .
his clients. The lawyer shall cause written notice thereof to be delivered to his clients 2. The average wage per hour for the Philippino (sic) employee is US$2.69 . . . .
and to the adverse party (Revised Rules of Court, Rule 138, Sec. 37). The statement of 3. The average hours for the overtime is 3 hours plus in all public holidays and
the claim for the charging lien of Atty. Del Mundo should have been filed with the weekends.
administrative agency that rendered and executed the judgment. 4. Payment of US$8.72 per months (sic) of service as compensation for the difference
Contempt of Court of the wages of the overtime done for each Philippino (sic) employee . . . (Rollo, p.22).
The complaint of Atty. Gerardo A. Del Mundo to cite Atty. Florante De Castro and Atty. BRII and AIBC countered: (1) that the Memorandum was not prepared by them but by
Katz Tierra for violation of the Code of Professional Responsibility should be filed in a a subordinate official in the Bahrain Department of Labor; (2) that there was no
separate and appropriate proceeding. showing that the Bahrain Minister of Labor had approved said memorandum; and (3)
G.R. No. 104911-14 that the offer was made in the course of the negotiation for an amicable settlement
Claimants charge NLRC with grave abuse of discretion in not accepting their formula of the claims and therefore it was not admissible in evidence to prove that anything
of "Three Hours Average Daily Overtime" in computing the overtime payments. They is due to the claimants.
claim that it was BRII itself which proposed the formula during the negotiations for While said document was presented to the POEA without observing the rule on
the settlement of their claims in Bahrain and therefore it is in estoppel to disclaim said presenting official documents of a foreign government as provided in Section 24, Rule
offer (Rollo, pp. 21-22). 132 of the 1989 Revised Rules on Evidence, it can be admitted in evidence in
Claimants presented a Memorandum of the Ministry of Labor of Bahrain dated April proceedings before an administrative body. The opposing parties have a copy of the
16, 1983, which in pertinent part states: said memorandum, and they could easily verify its authenticity and accuracy.
After the perusal of the memorandum of the Vice President and the Area Manager, The admissibility of the offer of compromise made by BRII as contained in the
Middle East, of Brown & Root Co. and the Summary of the compensation offered by memorandum is another matter. Under Section 27, Rule 130 of the 1989 Revised
the Company to the employees in respect of the difference of pay of the wages of the Rules on Evidence, an offer to settle a claim is not an admission that anything is due.
overtime and the difference of vacation leave and the perusal of the documents Said Rule provides:
attached thereto i.e., minutes of the meetings between the Representative of the Offer of compromise not admissible. — In civil cases, an offer of
employees and the management of the Company, the complaint filed by the compromise is not an admission of any liability, and is not admissible
employees on 14/2/83 where they have claimed as hereinabove stated, sample of the in evidence against the offeror.
Service Contract executed between one of the employees and the company through This Rule is not only a rule of procedure to avoid the cluttering of the record with
its agent in (sic) Philippines, Asia International Builders Corporation where it has been unwanted evidence but a statement of public policy. There is great public interest in
provided for 48 hours of work per week and an annual leave of 12 days and an having the protagonists settle their differences amicable before these ripen into
overtime wage of 1 & 1/4 of the normal hourly wage. litigation. Every effort must be taken to encourage them to arrive at a settlement. The
xxx xxx xxx submission of offers and counter-offers in the negotiation table is a step in the right
The Company in its computation reached the following averages:
direction. But to bind a party to his offers, as what claimants would make this Court compensation hereunder, plus the non-waivable benefits shall be equivalent to the
do, would defeat the salutary purpose of the Rule. compensation herein agreed (Rollo, pp. 352-353).
G.R. Nos. 105029-32 The overseas-employment contracts could have been drafted more felicitously. While
A. NLRC applied the Amiri Decree No. 23 of 1976, which provides for greater benefits a part thereof provides that the compensation to the employee may be "adjusted
than those stipulated in the overseas-employment contracts of the claimants. It was downward so that the total computation (thereunder) plus the non-waivable benefits
of the belief that "where the laws of the host country are more favorable and shall be equivalent to the compensation" therein agreed, another part of the same
beneficial to the workers, then the laws of the host country shall form part of the provision categorically states "that total remuneration and benefits do not fall below
overseas employment contract." It quoted with approval the observation of the POEA that of the host country regulation and custom."
Administrator that ". . . in labor proceedings, all doubts in the implementation of the Any ambiguity in the overseas-employment contracts should be interpreted against
provisions of the Labor Code and its implementing regulations shall be resolved in AIBC and BRII, the parties that drafted it (Eastern Shipping Lines, Inc. v. Margarine-
favor of labor" (Rollo, pp. 90-94). Verkaufs-Union, 93 SCRA 257 [1979]).
AIBC and BRII claim that NLRC acted capriciously and whimsically when it refused to Article 1377 of the Civil Code of the Philippines provides:
enforce the overseas-employment contracts, which became the law of the parties. The interpretation of obscure words or stipulations in a contract shall
They contend that the principle that a law is deemed to be a part of a contract applies not favor the party who caused the obscurity.
only to provisions of Philippine law in relation to contracts executed in the Philippines. Said rule of interpretation is applicable to contracts of adhesion where there is already
The overseas-employment contracts, which were prepared by AIBC and BRII a prepared form containing the stipulations of the employment contract and the
themselves, provided that the laws of the host country became applicable to said employees merely "take it or leave it." The presumption is that there was an
contracts if they offer terms and conditions more favorable that those stipulated imposition by one party against the other and that the employees signed the contracts
therein. It was stipulated in said contracts that: out of necessity that reduced their bargaining power (Fieldmen's Insurance Co., Inc.
The Employee agrees that while in the employ of the Employer, he will not engage in v. Songco, 25 SCRA 70 [1968]).
any other business or occupation, nor seek employment with anyone other than the Applying the said legal precepts, we read the overseas-employment contracts in
Employer; that he shall devote his entire time and attention and his best energies, and question as adopting the provisions of the Amiri Decree No. 23 of 1976 as part and
abilities to the performance of such duties as may be assigned to him by the Employer; parcel thereof.
that he shall at all times be subject to the direction and control of the Employer; and The parties to a contract may select the law by which it is to be governed (Cheshire,
that the benefits provided to Employee hereunder are substituted for and in lieu of Private International Law, 187 [7th ed.]). In such a case, the foreign law is adopted as
all other benefits provided by any applicable law, provided of course, that total a "system" to regulate the relations of the parties, including questions of their
remuneration and benefits do not fall below that of the host country regulation or capacity to enter into the contract, the formalities to be observed by them, matters
custom, it being understood that should applicable laws establish that fringe benefits, of performance, and so forth (16 Am Jur 2d,
or other such benefits additional to the compensation herein agreed cannot be waived, 150-161).
Employee agrees that such compensation will be adjusted downward so that the total Instead of adopting the entire mass of the foreign law, the parties may just agree that
specific provisions of a foreign statute shall be deemed incorporated into their
contract "as a set of terms." By such reference to the provisions of the foreign law, in the employment contract that the foreign law would be applicable if it afforded
the contract does not become a foreign contract to be governed by the foreign law. greater compensation.
The said law does not operate as a statute but as a set of contractual terms deemed B. AIBC and BRII claim that they were denied by NLRC of their right to due process
written in the contract (Anton, Private International Law, 197 [1967]; Dicey and when said administrative agency granted Friday-pay differential, holiday-pay
Morris, The Conflict of Laws, 702-703, [8th ed.]). differential, annual-leave differential and leave indemnity pay to the claimants listed
A basic policy of contract is to protect the expectation of the parties (Reese, Choice of in Annex B of the Resolution. At first, NLRC reversed the resolution of the POEA
Law in Torts and Contracts, 16 Columbia Journal of Transnational Law 1, 21 [1977]). Administrator granting these benefits on a finding that the POEA Administrator failed
Such party expectation is protected by giving effect to the parties' own choice of the to consider the evidence presented by AIBC and BRII, that some findings of fact of the
applicable law (Fricke v. Isbrandtsen Co., Inc., 151 F. Supp. 465, 467 [1957]). The POEA Administrator were not supported by the evidence, and that some of the
choice of law must, however, bear some relationship to the parties or their evidence were not disclosed to AIBC and BRII (Rollo, pp. 35-36; 106-107). But instead
transaction (Scoles and Hayes, Conflict of Law 644-647 [1982]). There is no question of remanding the case to the POEA Administrator for a new hearing, which means
that the contracts sought to be enforced by claimants have a direct connection with further delay in the termination of the case, NLRC decided to pass upon the validity
the Bahrain law because the services were rendered in that country. of the claims itself. It is this procedure that AIBC and BRII complain of as being irregular
In Norse Management Co. (PTE) v. National Seamen Board, 117 SCRA 486 (1982), the and a "reversible error."
"Employment Agreement," between Norse Management Co. and the late husband of They pointed out that NLRC took into consideration evidence submitted on appeal,
the private respondent, expressly provided that in the event of illness or injury to the the same evidence which NLRC found to have been "unilaterally submitted by the
employee arising out of and in the course of his employment and not due to his own claimants and not disclosed to the adverse parties" (Rollo, pp. 37-39).
misconduct, "compensation shall be paid to employee in accordance with and subject NLRC noted that so many pieces of evidentiary matters were submitted to the POEA
to the limitation of the Workmen's Compensation Act of the Republic of the administrator by the claimants after the cases were deemed submitted for resolution
Philippines or the Worker's Insurance Act of registry of the vessel, whichever is and which were taken cognizance of by the POEA Administrator in resolving the cases.
greater." Since the laws of Singapore, the place of registry of the vessel in which the While AIBC and BRII had no opportunity to refute said evidence of the claimants
late husband of private respondent served at the time of his death, granted a better before the POEA Administrator, they had all the opportunity to rebut said evidence
compensation package, we applied said foreign law in preference to the terms of the and to present their
contract. counter-evidence before NLRC. As a matter of fact, AIBC and BRII themselves were
The case of Bagong Filipinas Overseas Corporation v. National Labor Relations able to present before NLRC additional evidence which they failed to present before
Commission, 135 SCRA 278 (1985), relied upon by AIBC and BRII is inapposite to the the POEA Administrator.
facts of the cases at bench. The issue in that case was whether the amount of the Under Article 221 of the Labor Code of the Philippines, NLRC is enjoined to "use every
death compensation of a Filipino seaman should be determined under the shipboard and all reasonable means to ascertain the facts in each case speedily and objectively
employment contract executed in the Philippines or the Hongkong law. Holding that and without regard to technicalities of law or procedure, all in the interest of due
the shipboard employment contract was controlling, the court differentiated said case process."
from Norse Management Co. in that in the latter case there was an express stipulation
In deciding to resolve the validity of certain claims on the basis of the evidence of both Constitution. These cardinal rules are collated in Ang Tibay v. Court of Industrial
parties submitted before the POEA Administrator and NLRC, the latter considered that Relations, 69 Phil. 635 (1940).
it was not expedient to remand the cases to the POEA Administrator for that would VIII
only prolong the already protracted legal controversies. The three petitions were filed under Rule 65 of the Revised Rules of Court on the
Even the Supreme Court has decided appealed cases on the merits instead of grounds that NLRC had committed grave abuse of discretion amounting to lack of
remanding them to the trial court for the reception of evidence, where the same can jurisdiction in issuing the questioned orders. We find no such abuse of discretion.
be readily determined from the uncontroverted facts on record (Development Bank WHEREFORE, all the three petitions are DISMISSED.
of the Philippines v. Intermediate Appellate Court, 190 SCRA 653 [1990]; Pagdonsalan SO ORDERED.
v. National Labor Relations Commission, 127 SCRA 463 [1984]). Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur
C. AIBC and BRII charge NLRC with grave abuse of discretion when it ordered the POEA
Administrator to hold new hearings for 683 claimants listed in Annex D of the 6) Dacasin vs. Dacasin February 5, 2010,
Resolution dated September 2, 1991 whose claims had been denied by the POEA
Administrator "for lack of proof" and for 69 claimants listed in Annex E of the same G.R. No. 168785 February 5, 2010
Resolution, whose claims had been found by NLRC itself as not "supported by
evidence" (Rollo, pp. 41-45). HERALD BLACK DACASIN, Petitioner,
NLRC based its ruling on Article 218(c) of the Labor Code of the Philippines, which vs.
empowers it "[to] conduct investigation for the determination of a question, matter SHARON DEL MUNDO DACASIN, Respondent.
or controversy, within its jurisdiction, . . . ."
It is the posture of AIBC and BRII that NLRC has no authority under Article 218(c) to DECISION
remand a case involving claims which had already been dismissed because such
CARPIO, J.:
provision contemplates only situations where there is still a question or controversy
to be resolved (Rollo, pp. 41-42).
The Case
A principle well embedded in Administrative Law is that the technical rules of
procedure and evidence do not apply to the proceedings conducted by administrative For review1 is a dismissal2 of a suit to enforce a post-foreign divorce child custody
agencies (First Asian Transport & Shipping Agency, Inc. v. Ople, 142 SCRA 542 [1986]; agreement for lack of jurisdiction.
Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219 [1987]). This principle is
enshrined in Article 221 of the Labor Code of the Philippines and is now the bedrock The Facts
of proceedings before NLRC.
Notwithstanding the non-applicability of technical rules of procedure and evidence in Petitioner Herald Dacasin (petitioner), American, and respondent Sharon Del Mundo
administrative proceedings, there are cardinal rules which must be observed by the Dacasin (respondent), Filipino, were married in Manila in April 1994. They have one
hearing officers in order to comply with the due process requirements of the daughter, Stephanie, born on 21 September 1995. In June 1999, respondent sought and
obtained from the Circuit Court, 19th Judicial Circuit, Lake County, Illinois (Illinois
court) a divorce decree against petitioner.3 In its ruling, the Illinois court dissolved the In its Order dated 23 June 2005, the trial court denied reconsideration, holding that
marriage of petitioner and respondent, awarded to respondent sole custody of Stephanie unlike in the case of respondent, the divorce decree is binding on petitioner under the
and retained jurisdiction over the case for enforcement purposes. laws of his nationality.

On 28 January 2002, petitioner and respondent executed in Manila a contract Hence, this petition.
(Agreement4 ) for the joint custody of Stephanie. The parties chose Philippine courts
as exclusive forum to adjudicate disputes arising from the Agreement. Respondent Petitioner submits the following alternative theories for the validity of the Agreement
undertook to obtain from the Illinois court an order "relinquishing" jurisdiction to to justify its enforcement by the trial court: (1) the Agreement novated the valid divorce
Philippine courts. decree, modifying the terms of child custody from sole (maternal) to joint;8 or (2) the
Agreement is independent of the divorce decree obtained by respondent.
In 2004, petitioner sued respondent in the Regional Trial Court of Makati City, Branch
60 (trial court) to enforce the Agreement. Petitioner alleged that in violation of the The Issue
Agreement, respondent exercised sole custody over Stephanie.
The question is whether the trial court has jurisdiction to take cognizance of petitioner’s
Respondent sought the dismissal of the complaint for, among others, lack of suit and enforce the Agreement on the joint custody of the parties’ child.
jurisdiction because of the Illinois court’s retention of jurisdiction to enforce the
divorce decree. The Ruling of the Court

The Ruling of the Trial Court The trial court has jurisdiction to entertain petitioner’s suit but not to enforce the
Agreement which is void. However, factual and equity considerations militate against
In its Order dated 1 March 2005, the trial court sustained respondent’s motion and the dismissal of petitioner’s suit and call for the remand of the case to settle the question
dismissed the case for lack of jurisdiction. The trial court held that: (1) it is precluded of Stephanie’s custody.
from taking cognizance over the suit considering the Illinois court’s retention of
jurisdiction to enforce its divorce decree, including its order awarding sole custody of Regional Trial Courts Vested With Jurisdiction
Stephanie to respondent; (2) the divorce decree is binding on petitioner following the to Enforce Contracts
"nationality rule" prevailing in this jurisdiction;5 and (3) the Agreement is void for
contravening Article 2035, paragraph 5 of the Civil Code6 prohibiting compromise Subject matter jurisdiction is conferred by law. At the time petitioner filed his suit in
agreements on jurisdiction.7 the trial court, statutory law vests on Regional Trial Courts exclusive original
jurisdiction over civil actions incapable of pecuniary estimation.9 An action for specific
Petitioner sought reconsideration, raising the new argument that the divorce decree performance, such as petitioner’s suit to enforce the Agreement on joint child custody,
obtained by respondent is void. Thus, the divorce decree is no bar to the trial court’s belongs to this species of actions.10 Thus, jurisdiction-wise, petitioner went to the right
exercise of jurisdiction over the case. court.
Indeed, the trial court’s refusal to entertain petitioner’s suit was grounded not on its The Agreement is not only void ab initio for being contrary to law, it has also been
lack of power to do so but on its thinking that the Illinois court’s divorce decree stripped repudiated by the mother when she refused to allow joint custody by the father. The
it of jurisdiction. This conclusion is unfounded. What the Illinois court retained was Agreement would be valid if the spouses have not divorced or separated because the
"jurisdiction x x x for the purpose of enforcing all and sundry the various provisions of law provides for joint parental authority when spouses live together.21 However, upon
[its] Judgment for Dissolution."11 Petitioner’s suit seeks the enforcement not of the separation of the spouses, the mother takes sole custody under the law if the child is
"various provisions" of the divorce decree but of the post-divorce Agreement on joint below seven years old and any agreement to the contrary is void. Thus, the law
child custody. Thus, the action lies beyond the zone of the Illinois court’s so-called suspends the joint custody regime for (1) children under seven of (2) separated or
"retained jurisdiction." divorced spouses. Simply put, for a child within this age bracket (and for
commonsensical reasons), the law decides for the separated or divorced parents how
Petitioner’s Suit Lacks Cause of Action best to take care of the child and that is to give custody to the separated mother. Indeed,
the separated parents cannot contract away the provision in the Family Code on the
The foregoing notwithstanding, the trial court cannot enforce the Agreement which is maternal custody of children below seven years anymore than they can privately agree
contrary to law. that a mother who is unemployed, immoral, habitually drunk, drug addict, insane or
afflicted with a communicable disease will have sole custody of a child under seven as
In this jurisdiction, parties to a contract are free to stipulate the terms of agreement these are reasons deemed compelling to preclude the application of the exclusive
subject to the minimum ban on stipulations contrary to law, morals, good customs, maternal custody regime under the second paragraph of Article 213.22
public order, or public policy.12 Otherwise, the contract is denied legal existence,
deemed "inexistent and void from the beginning."13 For lack of relevant stipulation in It will not do to argue that the second paragraph of Article 213 of the Family Code
the Agreement, these and other ancillary Philippine substantive law serve as default applies only to judicial custodial agreements based on its text that "No child under
parameters to test the validity of the Agreement’s joint child custody stipulations.14 seven years of age shall be separated from the mother, unless the court finds compelling
reasons to order otherwise." To limit this provision’s enforceability to court sanctioned
At the time the parties executed the Agreement on 28 January 2002, two facts are agreements while placing private agreements beyond its reach is to sanction a double
undisputed: (1) Stephanie was under seven years old (having been born on 21 standard in custody regulation of children under seven years old of separated parents.
September 1995); and (2) petitioner and respondent were no longer married under the This effectively empowers separated parents, by the simple expedient of avoiding the
laws of the United States because of the divorce decree. The relevant Philippine law on courts, to subvert a legislative policy vesting to the separated mother sole custody of
child custody for spouses separated in fact or in law 15 (under the second paragraph of her children under seven years of age "to avoid a tragedy where a mother has seen her
Article 213 of the Family Code) is also undisputed: "no child under seven years of age baby torn away from her."23 This ignores the legislative basis that "[n]o man can sound
shall be separated from the mother x x x."16 (This statutory awarding of sole parental the deep sorrows of a mother who is deprived of her child of tender age."24
custody17 to the mother is mandatory,18 grounded on sound policy consideration,19
subject only to a narrow exception not alleged to obtain here.20 ) Clearly then, the It could very well be that Article 213’s bias favoring one separated parent (mother)
Agreement’s object to establish a post-divorce joint custody regime between over the other (father) encourages paternal neglect, presumes incapacity for joint
respondent and petitioner over their child under seven years old contravenes Philippine parental custody, robs the parents of custodial options, or hijacks decision-making
law. between the separated parents.25 However, these are objections which question the
law’s wisdom not its validity or uniform enforceability. The forum to air and remedy State of the Union. What he is contending in this case is that the divorce is not valid
these grievances is the legislature, not this Court. At any rate, the rule’s seeming and binding in this jurisdiction, the same being contrary to local law and public policy.
harshness or undesirability is tempered by ancillary agreements the separated parents
may wish to enter such as granting the father visitation and other privileges. These It is true that owing to the nationality principle embodied in Article 15 of the Civil
arrangements are not inconsistent with the regime of sole maternal custody under the Code, only Philippine nationals are covered by the policy against absolute divorces the
second paragraph of Article 213 which merely grants to the mother final authority on same being considered contrary to our concept of public policy and morality. However,
the care and custody of the minor under seven years of age, in case of aliens may obtain divorces abroad, which may be recognized in the Philippines,
disagreements.1avvphi1 provided they are valid according to their national law. In this case, the divorce in
Nevada released private respondent from the marriage from the standards of American
Further, the imposed custodial regime under the second paragraph of Article 213 is law, under which divorce dissolves the marriage.
limited in duration, lasting only until the child’s seventh year. From the eighth year
until the child’s emancipation, the law gives the separated parents freedom, subject to xxxx
the usual contractual limitations, to agree on custody regimes they see fit to adopt.
Lastly, even supposing that petitioner and respondent are not barred from entering into Thus, pursuant to his national law, private respondent is no longer the husband of
the Agreement for the joint custody of Stephanie, respondent repudiated the Agreement petitioner. He would have no standing to sue in the case below as petitioner’s husband
by asserting sole custody over Stephanie. Respondent’s act effectively brought the entitled to exercise control over conjugal assets. As he is bound by the Decision of his
parties back to ambit of the default custodial regime in the second paragraph of Article own country’s Court, which validly exercised jurisdiction over him, and whose
213 of the Family Code vesting on respondent sole custody of Stephanie. decision he does not repudiate, he is estopped by his own representation before said
Court from asserting his right over the alleged conjugal property. (Emphasis supplied)
Nor can petitioner rely on the divorce decree’s alleged invalidity - not because the
Illinois court lacked jurisdiction or that the divorce decree violated Illinois law, but We reiterated Van Dorn in Pilapil v. Ibay-Somera29 to dismiss criminal complaints for
because the divorce was obtained by his Filipino spouse26 - to support the Agreement’s adultery filed by the alien divorcee (who obtained the foreign divorce decree) against
enforceability. The argument that foreigners in this jurisdiction are not bound by his former Filipino spouse because he no longer qualified as "offended spouse" entitled
foreign divorce decrees is hardly novel. Van Dorn v. Romillo27 settled the matter by to file the complaints under Philippine procedural rules. Thus, it should be clear by now
holding that an alien spouse of a Filipino is bound by a divorce decree obtained that a foreign divorce decree carries as much validity against the alien divorcee in this
abroad.28 There, we dismissed the alien divorcee’s Philippine suit for accounting of jurisdiction as it does in the jurisdiction of the alien’s nationality, irrespective of who
alleged post-divorce conjugal property and rejected his submission that the foreign obtained the divorce.
divorce (obtained by the Filipino spouse) is not valid in this jurisdiction in this wise:
The Facts of the Case and Nature of Proceeding
There can be no question as to the validity of that Nevada divorce in any of the States Justify Remand
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 Instead of ordering the dismissal of petitioner’s suit, the logical end to its lack of cause
of action, we remand the case for the trial court to settle the question of Stephanie’s
custody. Stephanie is now nearly 15 years old, thus removing the case outside of the
ambit of the mandatory maternal custody regime under Article 213 and bringing it 7) Wildvalley Shipping vs. CA October 6, 2000,
within coverage of the default standard on child custody proceedings – the best interest
of the child.30 As the question of custody is already before the trial court and the child’s G.R. No. 119602 October 6, 2000
parents, by executing the Agreement, initially showed inclination to share custody, it
is in the interest of swift and efficient rendition of justice to allow the parties to take WILDVALLEY SHIPPING CO., LTD. petitioner,
advantage of the court’s jurisdiction, submit evidence on the custodial arrangement best vs.
serving Stephanie’s interest, and let the trial court render judgment. This disposition is COURT OF APPEALS and PHILIPPINE PRESIDENT LINES INC.,
consistent with the settled doctrine that in child custody proceedings, equity may be respondents.
invoked to serve the child’s best interest.31
DECISION
WHEREFORE, we REVERSE the Orders dated 1 March 2005 and 23 June 2005 of
the Regional Trial Court of Makati City, Branch 60. The case is REMANDED for BUENA, J.:
further proceedings consistent with this ruling.
This is a petition for review on certiorari seeking to set aside the decision of the
SO ORDERED. Court of Appeals which reversed the decision of the lower court in CA-G.R. CV No.
36821, entitled "Wildvalley Shipping Co., Ltd., plaintiff-appellant, versus Philippine
ANTONIO T. CARPIO President Lines, Inc., defendant-appellant."
Associate Justice
The antecedent facts of the case are as follows:

Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine

President Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela,
to load iron ore. Upon the completion of the loading and when the vessel was ready to
leave port, Mr. Ezzar del Valle Solarzano Vasquez, an official pilot of Venezuela,
was designated by the harbour authorities in Puerto Ordaz to navigate the Philippine
Roxas through the Orinoco River.1 He was asked to pilot the said vessel on February
11, 19882 boarding it that night at 11:00 p.m.3

The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the
bridge together with the pilot (Vasquez), the vessel's third mate (then the officer on
watch), and a helmsman when the vessel left the port4 at 1:40 a.m. on February 12,
1988.5 Captain Colon left the bridge when the vessel was under way.6
The Philippine Roxas experienced some vibrations when it entered the San Roque "3. That defendant Pioneer Insurance was the insurance underwriter for
Channel at mile 172.7 The vessel proceeded on its way, with the pilot assuring the defendant PPL;
watch officer that the vibration was a result of the shallowness of the channel.8
"4. That plaintiff Wildvalley Shipping Co., Inc. is the owner of the vessel
Between mile 158 and 157, the vessel again experienced some vibrations.9 These Malandrinon, whose passage was obstructed by the vessel Philippine Roxas at
occurred at 4:12 a.m.10 It was then that the watch officer called the master to the Puerto Ordaz, Venezuela, as specified in par. 4, page 2 of the complaint;
bridge.11
"5. That on February 12, 1988, while the Philippine Roxas was navigating the
The master (captain) checked the position of the vessel12 and verified that it was in channel at Puerto Ordaz, the said vessel grounded and as a result, obstructed
the centre of the channel.13 He then went to confirm, or set down, the position of the navigation at the channel;
vessel on the chart.14 He ordered Simplicio A. Monis, Chief Officer of the President
Roxas, to check all the double bottom tanks.15 "6. That the Orinoco River in Puerto Ordaz is a compulsory pilotage channel;

At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River,16 thus "7. That at the time of the incident, the vessel, Philippine Roxas, was under
obstructing the ingress and egress of vessels. the command of the pilot Ezzar Solarzano, assigned by the government
thereat, but plaintiff claims that it is under the command of the master;
As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner
Wildvalley Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that "8. The plaintiff filed a case in Middleburg, Holland which is related to the
day. present case;

Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial "9. The plaintiff caused the arrest of the Philippine Collier, a vessel owned by
Court of Manila, Branch III against Philippine President Lines, Inc. and Pioneer the defendant PPL;
Insurance Company (the underwriter/insurer of Philippine Roxas) for damages in the
form of unearned profits, and interest thereon amounting to US $400,000.00 plus "10. The Orinoco River is 150 miles long and it takes approximately 12 hours
attorney's fees, costs, and expenses of litigation. The complaint against Pioneer to navigate out of the said river;
Insurance Company was dismissed in an Order dated November 7, 1988.17
"11. That no security for the plaintiff's claim was given until after the
At the pre-trial conference, the parties agreed on the following facts: Philippine Collier was arrested; and

"1. The jurisdictional facts, as specified in their respective pleadings; "12. That a letter of guarantee, dated 12-May-88 was issued by the Steamship
Mutual Underwriters Ltd."18
"2. That defendant PPL was the owner of the vessel Philippine Roxas at the
time of the incident;
The trial court rendered its decision on October 16, 1991 in favor of the petitioner, The petitioner assigns the following errors to the court a quo:
Wildvalley Shipping Co., Ltd. The dispositive portion thereof reads as follows:
1. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
"WHEREFORE, judgment is rendered for the plaintiff, ordering defendant Philippine FINDING THAT UNDER PHILIPPINE LAW NO FAULT OR
President Lines, Inc. to pay to the plaintiff the sum of U.S. $259,243.43, as actual and NEGLIGENCE CAN BE ATTRIBUTED TO THE MASTER NOR THE
compensatory damages, and U.S. $162,031.53, as expenses incurred abroad for its OWNER OF THE "PHILIPPINE ROXAS" FOR THE GROUNDING OF
foreign lawyers, plus additional sum of U.S. $22,000.00, as and for attorney's fees of SAID VESSEL RESULTING IN THE BLOCKAGE OF THE RIO
plaintiff's local lawyer, and to pay the cost of this suit. ORINOCO;

"Defendant's counterclaim is dismissed for lack of merit. 2. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
REVERSING THE FINDINGS OF FACTS OF THE TRIAL COURT
"SO ORDERED."19 CONTRARY TO EVIDENCE;

Both parties appealed: the petitioner appealing the non-award of interest with the 3. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
private respondent questioning the decision on the merits of the case. FINDING THAT THE "PHILIPPINE ROXAS" IS SEAWORTHY;

After the requisite pleadings had been filed, the Court of Appeals came out with its 4. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
questioned decision dated June 14, 1994,20 the dispositive portion of which reads as DISREGARDING VENEZUELAN LAW DESPITE THE FACT THAT THE
follows: SAME HAS BEEN SUBSTANTIALLY PROVED IN THE TRIAL COURT
WITHOUT ANY OBJECTION FROM PRIVATE RESPONDENT, AND
"WHEREFORE, finding defendant-appellant's appeal to be meritorious, judgment is WHOSE OBJECTION WAS INTERPOSED BELATEDLY ON APPEAL;
hereby rendered reversing the Decision of the lower court. Plaintiff-appellant's
Complaint is dismissed and it is ordered to pay defendant-appellant the amount of 5. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
Three Hundred Twenty-three Thousand, Forty-two Pesos and Fifty-three Centavos AWARDING ATTORNEY'S FEES AND COSTS TO PRIVATE
(₱323,042.53) as and for attorney's fees plus cost of suit. Plaintiff-appellant's appeal RESPONDENT WITHOUT ANY FAIR OR REASONABLE BASIS
is DISMISSED. WHATSOEVER;

"SO ORDERED."21 6. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT

FINDING THAT PETITIONER'S CAUSE IS MERITORIOUS HENCE,
Petitioner filed a motion for reconsideration22 but the same was denied for lack of PETITIONER SHOULD BE ENTITLED TO ATTORNEY'S FEES, COSTS
merit in the resolution dated March 29, 1995.23 AND INTEREST.

Hence, this petition. The petition is without merit.

The primary issue to be determined is whether or not Venezuelan law is applicable to "… Mr. Arthur W. Bolton, an attorney-at-law of San Francisco, California, since the
the case at bar. year 1918 under oath, quoted verbatim section 322 of the California Civil Code and
stated that said section was in force at the time the obligations of defendant to the
It is well-settled that foreign laws do not prove themselves in our jurisdiction and our plaintiff were incurred, i.e. on November 5, 1928 and December 22, 1928. This
courts are not authorized to take judicial notice of them. Like any other fact, they evidence sufficiently established the fact that the section in question was the law of
must be alleged and proved.24 the State of California on the above dates. A reading of sections 300 and 301 of our
Code of Civil Procedure will convince one that these sections do not exclude the
A distinction is to be made as to the manner of proving a written and an unwritten presentation of other competent evidence to prove the existence of a foreign law.
law. The former falls under Section 24, Rule 132 of the Rules of Court, as amended,
the entire provision of which is quoted hereunder. Where the foreign law sought to be "`The foreign law is a matter of fact …You ask the witness what the law is; he may,
proved is "unwritten," the oral testimony of expert witnesses is admissible, as are from his recollection, or on producing and referring to books, say what it is.' (Lord
printed and published books of reports of decisions of the courts of the country Campbell concurring in an opinion of Lord Chief Justice Denman in a well-known
concerned if proved to be commonly admitted in such courts.25 English case where a witness was called upon to prove the Roman laws of marriage
and was permitted to testify, though he referred to a book containing the decrees of
Section 24 of Rule 132 of the Rules of Court, as amended, provides: the Council of Trent as controlling, Jones on Evidence, Second Edition, Volume 4,
pages 3148-3152.) x x x."
"Sec. 24. Proof of official record. -- The record of public documents referred to in
paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by We do not dispute the competency of Capt. Oscar Leon Monzon, the Assistant
an official publication thereof or by a copy attested by the officer having the legal Harbor Master and Chief of Pilots at Puerto Ordaz, Venezuela,28 to testify on the
custody of the record, or by his deputy, and accompanied, if the record is not kept in existence of the Reglamento General de la Ley de Pilotaje (pilotage law of
the Philippines, with a certificate that such officer has the custody. If the office in Venezuela)29 and the Reglamento Para la Zona de Pilotaje No 1 del Orinoco (rules
which the record is kept is in a foreign country, the certificate may be made by a governing the navigation of the Orinoco River). Captain Monzon has held the
secretary of the embassy or legation, consul general, consul, vice consul, or consular aforementioned posts for eight years.30 As such he is in charge of designating the
agent or by any officer in the foreign service of the Philippines stationed in the pilots for maneuvering and navigating the Orinoco River. He is also in charge of the
foreign country in which the record is kept, and authenticated by the seal of his documents that come into the office of the harbour masters.31
office." (Underscoring supplied)
Nevertheless, we take note that these written laws were not proven in the manner
The court has interpreted Section 25 (now Section 24) to include competent evidence provided by Section 24 of Rule 132 of the Rules of Court.
like the testimony of a witness to prove the existence of a written foreign law.26
The Reglamento General de la Ley de Pilotaje was published in the Gaceta Oficial32
In the noted case of Willamette Iron & Steel Works vs. Muzzal,27 it was held that: of the Republic of Venezuela. A photocopy of the Gaceta Oficial was presented in
evidence as an official publication of the Republic of Venezuela.
The Reglamento Para la Zona de Pilotaje No 1 del Orinoco is published in a book A foreign law is considered to be pleaded if there is an allegation in the pleading
issued by the Ministerio de Comunicaciones of Venezuela.33 Only a photocopy of about the existence of the foreign law, its import and legal consequence on the event
the said rules was likewise presented as evidence. or transaction in issue.38

Both of these documents are considered in Philippine jurisprudence to be public A review of the Complaint39 revealed that it was never alleged or invoked despite the
documents for they are the written official acts, or records of the official acts of the fact that the grounding of the M/V Philippine Roxas occurred within the territorial
sovereign authority, official bodies and tribunals, and public officers of Venezuela.34 jurisdiction of Venezuela.

For a copy of a foreign public document to be admissible, the following requisites are We reiterate that under the rules of private international law, a foreign law must be
mandatory: (1) It must be attested by the officer having legal custody of the records properly pleaded and proved as a fact. In the absence of pleading and proof, the laws
or by his deputy; and (2) It must be accompanied by a certificate by a secretary of the of a foreign country, or state, will be presumed to be the same as our own local or
embassy or legation, consul general, consul, vice consular or consular agent or domestic law and this is known as processual presumption.40
foreign service officer, and with the seal of his office.35 The latter requirement is not
a mere technicality but is intended to justify the giving of full faith and credit to the Having cleared this point, we now proceed to a thorough study of the errors assigned
genuineness of a document in a foreign country.36 by the petitioner.

It is not enough that the Gaceta Oficial, or a book published by the Ministerio de Petitioner alleges that there was negligence on the part of the private respondent that
Comunicaciones of Venezuela, was presented as evidence with Captain Monzon would warrant the award of damages.
attesting it. It is also required by Section 24 of Rule 132 of the Rules of Court that a
certificate that Captain Monzon, who attested the documents, is the officer who had There being no contractual obligation, the private respondent is obliged to give only
legal custody of those records made by a secretary of the embassy or legation, consul the diligence required of a good father of a family in accordance with the provisions
general, consul, vice consul or consular agent or by any officer in the foreign service of Article 1173 of the New Civil Code, thus:
of the Philippines stationed in Venezuela, and authenticated by the seal of his office
accompanying the copy of the public document. No such certificate could be found in "Art. 1173. The fault or negligence of the obligor consists in the omission of that
the records of the case. diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence shows
With respect to proof of written laws, parol proof is objectionable, for the written law bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply.
itself is the best evidence. According to the weight of authority, when a foreign
statute is involved, the best evidence rule requires that it be proved by a duly "If the law or contract does not state the diligence which is to be observed in the
authenticated copy of the statute.37 performance, that which is expected of a good father of a family shall be required."

At this juncture, we have to point out that the Venezuelan law was not pleaded before The diligence of a good father of a family requires only that diligence which an
the lower court. ordinary prudent man would exercise with regard to his own property. This we have
found private respondent to have exercised when the vessel sailed only after the "x x x
"main engine, machineries, and other auxiliaries" were checked and found to be in
good running condition;41 when the master left a competent officer, the officer on "Sec. 32. Duties and Responsibilities of the Pilots or Pilots’ Association. -- The duties
watch on the bridge with a pilot who is experienced in navigating the Orinoco River; and responsibilities of the Harbor Pilot shall be as follows:
when the master ordered the inspection of the vessel's double bottom tanks when the
vibrations occurred anew.42 "x x x

The Philippine rules on pilotage, embodied in Philippine Ports Authority "f) A pilot shall be held responsible for the direction of a vessel from the time he
Administrative Order No. 03-85, otherwise known as the Rules and Regulations assumes his work as a pilot thereof until he leaves it anchored or berthed safely;
Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Provided, however, that his responsibility shall cease at the moment the Master
Ports enunciate the duties and responsibilities of a master of a vessel and its pilot, neglects or refuses to carry out his order."
among other things.
The Code of Commerce likewise provides for the obligations expected of a captain of
The pertinent provisions of the said administrative order governing these persons are a vessel, to wit:
quoted hereunder:
"Art. 612. The following obligations shall be inherent in the office of captain:
"Sec. 11. Control of Vessels and Liability for Damage. -- On compulsory pilotage
grounds, the Harbor Pilot providing the service to a vessel shall be responsible for the "x x x
damage caused to a vessel or to life and property at ports due to his negligence or
fault. He can be absolved from liability if the accident is caused by force majeure or "7. To be on deck on reaching land and to take command on entering and leaving
natural calamities provided he has exercised prudence and extra diligence to prevent ports, canals, roadsteads, and rivers, unless there is a pilot on board discharging his
or minimize the damage. duties. x x x."

"The Master shall retain overall command of the vessel even on pilotage grounds The law is very explicit. The master remains the overall commander of the vessel
whereby he can countermand or overrule the order or command of the Harbor Pilot even when there is a pilot on board. He remains in control of the ship as he can still
on board. In such event, any damage caused to a vessel or to life and property at ports perform the duties conferred upon him by law43 despite the presence of a pilot who is
by reason of the fault or negligence of the Master shall be the responsibility and temporarily in charge of the vessel. It is not required of him to be on the bridge while
liability of the registered owner of the vessel concerned without prejudice to recourse the vessel is being navigated by a pilot.
against said Master.
However, Section 8 of PPA Administrative Order No. 03-85, provides:
"Such liability of the owner or Master of the vessel or its pilots shall be determined
by competent authority in appropriate proceedings in the light of the facts and "Sec. 8. Compulsory Pilotage Service - For entering a harbor and anchoring thereat,
circumstances of each particular case. or passing through rivers or straits within a pilotage district, as well as docking and
undocking at any pier/wharf, or shifting from one berth or another, every vessel a vessel on the rivers of a country is very different from that which enables a
engaged in coastwise and foreign trade shall be under compulsory pilotage. navigator to carry a vessel safely in the ocean. On the ocean, a knowledge of the rules
of navigation, with charts that disclose the places of hidden rocks, dangerous shores,
"xxx." or other dangers of the way, are the main elements of a pilot's knowledge and skill.
But the pilot of a river vessel, like the harbor pilot, is selected for the individual's
The Orinoco River being a compulsory pilotage channel necessitated the engaging of personal knowledge of the topography through which the vessel is steered."50
a pilot who was presumed to be knowledgeable of every shoal, bank, deep and
shallow ends of the river. In his deposition, pilot Ezzar Solarzano Vasquez testified We find that the grounding of the vessel is attributable to the pilot. When the
that he is an official pilot in the Harbour at Port Ordaz, Venezuela,44 and that he had vibrations were first felt the watch officer asked him what was going on, and pilot
been a pilot for twelve (12) years.45 He also had experience in navigating the waters Vasquez replied that "(they) were in the middle of the channel and that the vibration
of the Orinoco River.46 was as (sic) a result of the shallowness of the channel."51

The law does provide that the master can countermand or overrule the order or Pilot Ezzar Solarzano Vasquez was assigned to pilot the vessel Philippine Roxas as
command of the harbor pilot on board. The master of the Philippine Roxas deemed it well as other vessels on the Orinoco River due to his knowledge of the same. In his
best not to order him (the pilot) to stop the vessel,47 mayhap, because the latter had experience as a pilot, he should have been aware of the portions which are shallow
assured him that they were navigating normally before the grounding of the vessel.48 and which are not. His failure to determine the depth of the said river and his decision
Moreover, the pilot had admitted that on account of his experience he was very to plod on his set course, in all probability, caused damage to the vessel. Thus, we
familiar with the configuration of the river as well as the course headings, and that he hold him as negligent and liable for its grounding.
does not even refer to river charts when navigating the Orinoco River.49
In the case of Homer Ramsdell Transportation Company vs. La Compagnie
Based on these declarations, it comes as no surprise to us that the master chose not to Generale Transatlantique, 182 U.S. 406, it was held that:
regain control of the ship. Admitting his limited knowledge of the Orinoco River,
Captain Colon relied on the knowledge and experience of pilot Vasquez to guide the "x x x The master of a ship, and the owner also, is liable for any injury done by the
vessel safely. negligence of the crew employed in the ship. The same doctrine will apply to the case
of a pilot employed by the master or owner, by whose negligence any injury happens
"Licensed pilots, enjoying the emoluments of compulsory pilotage, are in a different to a third person or his property: as, for example, by a collision with another ship,
class from ordinary employees, for they assume to have a skill and a knowledge of occasioned by his negligence. And it will make no difference in the case that the
navigation in the particular waters over which their licenses extend superior to that of pilot, if any is employed, is required to be a licensed pilot; provided the master is at
the master; pilots are bound to use due diligence and reasonable care and skill. A liberty to take a pilot, or not, at his pleasure, for in such a case the master acts
pilot's ordinary skill is in proportion to the pilot's responsibilities, and implies a voluntarily, although he is necessarily required to select from a particular class. On
knowledge and observance of the usual rules of navigation, acquaintance with the the other hand, if it is compulsive upon the master to take a pilot, and, a fortiori, if
waters piloted in their ordinary condition, and nautical skill in avoiding all known he is bound to do so under penalty, then, and in such case, neither he nor the
obstructions. The character of the skill and knowledge required of a pilot in charge of owner will be liable for injuries occasioned by the negligence of the pilot; for in
such a case the pilot cannot be deemed properly the servant of the master or the ship (Philippine Roxas) maintained the class "+100A1 Strengthened for Ore Cargoes,
owner, but is forced upon them, and the maxim Qui facit per alium facit per se does Nos. 2 and 8 Holds may be empty (CC) and +LMC" from 31/12/87 up until the time
not apply." (Underscoring supplied) of casualty on or about 12/2/88."57 The same would not have been issued had not the
vessel been built according to the standards set by Lloyd's.
Anent the river passage plan, we find that, while there was none,52 the voyage has
been sufficiently planned and monitored as shown by the following actions Samuel Lim, a marine surveyor, at Lloyd's Register of Shipping testified thus:
undertaken by the pilot, Ezzar Solarzano Vasquez, to wit: contacting the radio marina
via VHF for information regarding the channel, river traffic,53 soundings of the river, "Q Now, in your opinion, as a surveyor, did top side tank have any bearing at all to
depth of the river, bulletin on the buoys.54 The officer on watch also monitored the the seaworthiness of the vessel?
voyage.55
"A Well, judging on this particular vessel, and also basing on the class record of the
We, therefore, do not find the absence of a river passage plan to be the cause for the vessel, wherein recommendations were made on the top side tank, and it was given
grounding of the vessel. sufficient time to be repaired, it means that the vessel is fit to travel even with those
defects on the ship.
The doctrine of res ipsa loquitur does not apply to the case at bar because the
circumstances surrounding the injury do not clearly indicate negligence on the part of "COURT
the private respondent. For the said doctrine to apply, the following conditions must
be met: (1) the accident was of such character as to warrant an inference that it would What do you mean by that? You explain. The vessel is fit to travel even with defects?
not have happened except for defendant's negligence; (2) the accident must have been Is that what you mean? Explain.
caused by an agency or instrumentality within the exclusive management or control
of the person charged with the negligence complained of; and (3) the accident must "WITNESS
not have been due to any voluntary action or contribution on the part of the person
injured.56 "A Yes, your Honor. Because the class society which register (sic) is the third party
looking into the condition of the vessel and as far as their record states, the vessel was
As has already been held above, there was a temporary shift of control over the ship class or maintained, and she is fit to travel during that voyage."
from the master of the vessel to the pilot on a compulsory pilotage channel. Thus, two
of the requisites necessary for the doctrine to apply, i.e., negligence and control, to "x x x
render the respondent liable, are absent.
"ATTY. MISA
As to the claim that the ship was unseaworthy, we hold that it is not.
Before we proceed to other matter, will you kindly tell us what is (sic) the 'class
The Lloyd’s Register of Shipping confirmed the vessel’s seaworthiness in a +100A1 Strengthened for Ore Cargoes', mean?
Confirmation of Class issued on February 16, 1988 by finding that "the above named
"WITNESS condition and ready for maneuvering. That same day the main engine, bridge and
engine telegraph and steering gear motor were also tested.61 Engineer Mata also
"A Plus 100A1 means that the vessel was built according to Lloyd's rules and she is prepared the fuel for consumption for maneuvering and checked the engine
capable of carrying ore bulk cargoes, but she is particularly capable of carrying Ore generators.62
Cargoes with No. 2 and No. 8 holds empty.
Finally, we find the award of attorney’s fee justified.1âwphi1
"x x x
Article 2208 of the New Civil Code provides that:
"COURT
"Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
The vessel is classed, meaning? other than judicial costs, cannot be recovered, except:

"A Meaning she is fit to travel, your Honor, or seaworthy."58 "x x x

It is not required that the vessel must be perfect. To be seaworthy, a ship must be "(11) In any other case where the court deems it just and equitable that attorney's fees
reasonably fit to perform the services, and to encounter the ordinary perils of the and expenses of litigation should be recovered.
voyage, contemplated by the parties to the policy.59
"x x x"
As further evidence that the vessel was seaworthy, we quote the deposition of pilot
Vasquez: Due to the unfounded filing of this case, the private respondent was unjustifiably
forced to litigate, thus the award of attorney’s fees was proper.
"Q Was there any instance when your orders or directions were not complied with
because of the inability of the vessel to do so? WHEREFORE, IN VIEW OF THE FOREGOING, the petition is DENIED and the
decision of the Court of Appeals in CA G.R. CV No. 36821 is AFFIRMED.
"A No.
SO ORDERED.
"Q. Was the vessel able to respond to all your commands and orders?
Bellosillo, (Chairman), Mendoza, Quisumbing, and De leon, Jr., JJ., concur.
"A. The vessel was navigating normally."60

Eduardo P. Mata, Second Engineer of the Philippine Roxas submitted an accident

report wherein he stated that on February 11, 1988, he checked and prepared the main
engine, machineries and all other auxiliaries and found them all to be in good running
 Private respondent Gran was an OFW recruited by EDI, and deployed by ESI to work
8) Edi-Staff Builders Int’l vs. NLRC October 26, 2007, for OAB, in Riyadh, Kingdom of Saudi Arabia.6

G.R. No. 145587 October 26, 2007 It appears that OAB asked EDI through its October 3, 1993 letter for curricula vitae
of qualified applicants for the position of "Computer Specialist."7 In a facsimile
EDI-STAFFBUILDERS INTERNATIONAL, INC., petitioner, transmission dated November 29, 1993, OAB informed EDI that, from the applicants'
vs. curricula vitae submitted to it for evaluation, it selected Gran for the position of
NATIONAL LABOR RELATIONS COMMISSION and ELEAZAR S. GRAN, "Computer Specialist." The faxed letter also stated that if Gran agrees to the terms
respondents. and conditions of employment contained in it, one of which was a monthly salary of
SR (Saudi Riyal) 2,250.00 (USD 600.00), EDI may arrange for Gran's immediate
DECISION dispatch.8

VELASCO, JR., J.: After accepting OAB's offer of employment, Gran signed an employment contract9
that granted him a monthly salary of USD 850.00 for a period of two years. Gran was
The Case then deployed to Riyadh, Kingdom of Saudi Arabia on February 7, 1994.

This Petition for Review on Certiorari1 seeks to set aside the October 18, 2000 Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salary—his
Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 56120 which affirmed the employment contract stated USD 850.00; while his Philippine Overseas Employment
January 15, 1999 Decision3 and September 30, 1999 Resolution4 rendered by the Agency (POEA) Information Sheet indicated USD 600.00 only. However, through
National Labor Relations Commission (NLRC) (Third Division) in POEA ADJ (L) the assistance of the EDI office in Riyadh, OAB agreed to pay Gran USD 850.00 a
94-06-2194, ordering Expertise Search International (ESI), EDI-Staffbuilders month.10
International, Inc. (EDI), and Omar Ahmed Ali Bin Bechr Est. (OAB) jointly and
severally to pay Eleazar S. Gran (Gran) the amount of USD 16,150.00 as unpaid After Gran had been working for about five months for OAB, his employment was
salaries. terminated through OAB's July 9, 1994 letter,11 on the following grounds:

The Facts 1. Non-compliance to contract requirements by the recruitment agency

primarily on your salary and contract duration.
Petitioner EDI is a corporation engaged in recruitment and placement of Overseas
Filipino Workers (OFWs).5 ESI is another recruitment agency which collaborated 2. Non-compliance to pre-qualification requirements by the recruitment
with EDI to process the documentation and deployment of private respondent to agency[,] vide OAB letter ref. F-5751-93, dated October 3, 1993.12
Saudi Arabia.
 3. Insubordination or disobedience to Top Management Order and/or follow management's instruction for him to gain more knowledge of the job to prove
instructions (non-submittal of daily activity reports despite several his worth as computer specialist; (4) that Gran's employment contract had never been
instructions). substituted; (5) and that Gran was paid a monthly salary of USD 850.00, and USD
350.00 monthly as food allowance.
On July 11, 1994, Gran received from OAB the total amount of SR 2,948.00
representing his final pay, and on the same day, he executed a Declaration13 releasing Accordingly, the Labor Arbiter decided that Gran was validly dismissed from his
OAB from any financial obligation or otherwise, towards him. work due to insubordination, disobedience, and his failure to submit daily activity
reports.
After his arrival in the Philippines, Gran instituted a complaint, on July 21, 1994,
against ESI/EDI, OAB, Country Bankers Insurance Corporation, and Western Thus, on February 10, 1998, Arbiter Caday dismissed Gran's complaint for lack of
Guaranty Corporation with the NLRC, National Capital Region, Quezon City, which merit.
was docketed as POEA ADJ (L) 94-06-2194 for underpayment of wages/salaries and
illegal dismissal. Dissatisfied, Gran filed an Appeal15 on April 6, 1998 with the NLRC, Third Division.
However, it appears from the records that Gran failed to furnish EDI with a copy of
The Ruling of the Labor Arbiter his Appeal Memorandum.

In his February 10, 1998 Decision,14 Labor Arbiter Manuel R. Caday, to whom Gran's The Ruling of the NLRC
case was assigned, ruled that there was neither underpayment nor illegal dismissal.
The NLRC held that EDI's seemingly harmless transfer of Gran's contract to ESI is
The Labor Arbiter reasoned that there was no underpayment of salaries since actually "reprocessing," which is a prohibited transaction under Article 34 (b) of the
according to the POEA-Overseas Contract Worker (OCW) Information Sheet, Gran's Labor Code. This scheme constituted misrepresentation through the conspiracy
monthly salary was USD 600.00, and in his Confirmation of Appointment as between EDI and ESI in misleading Gran and even POEA of the actual terms and
Computer Specialist, his monthly basic salary was fixed at SR 2,500.00, which was conditions of the OFW's employment. In addition, it was found that Gran did not
equivalent to USD 600.00. commit any act that constituted a legal ground for dismissal. The alleged non-
compliance with contractual stipulations relating to Gran's salary and contract
Arbiter Caday also cited the Declaration executed by Gran, to justify that Gran had no duration, and the absence of pre-qualification requirements cannot be attributed to
claim for unpaid salaries or wages against OAB. Gran but to EDI, which dealt directly with OAB. In addition, the charge of
insubordination was not substantiated, and Gran was not even afforded the required
With regard to the issue of illegal dismissal, the Labor Arbiter found that Gran failed notice and investigation on his alleged offenses.
to refute EDI's allegations; namely, (1) that Gran did not submit a single activity
report of his daily activity as dictated by company policy; (2) that he was not Thus, the NLRC reversed the Labor Arbiter's Decision and rendered a new one, the
qualified for the job as computer specialist due to his insufficient knowledge in dispositive portion of which reads:
programming and lack of knowledge in ACAD system; (3) that Gran refused to
 WHEREFORE, the assailed decision is SET ASIDE. Respondents Expertise The Ruling of the Court of Appeals
Search International, Inc., EDI Staffbuilders Int'l., Inc. and Omar Ahmed Ali
Bin Bechr Est. (OAB) are hereby ordered jointly and severally liable to pay The CA subsequently ruled on the procedural and substantive issues of EDI's petition.
the complainant Eleazar Gran the Philippine peso equivalent at the time of
actual payment of SIXTEEN THOUSAND ONE HUNDRED FIFTY US On the procedural issue, the appellate court held that "Gran's failure to furnish a copy
DOLLARS (US$16,150.00) representing his salaries for the unexpired portion of his appeal memorandum [to EDI was] a mere formal lapse, an excusable neglect
of his contract. and not a jurisdictional defect which would justify the dismissal of his appeal." 22 The
court also held that petitioner EDI failed to prove that private respondent was
SO ORDERED.16 terminated for a valid cause and in accordance with due process; and that Gran's
Declaration releasing OAB from any monetary obligation had no force and effect.
Gran then filed a Motion for Execution of Judgment17 on March 29, 1999 with the The appellate court ratiocinated that EDI had the burden of proving Gran's
NLRC and petitioner receiving a copy of this motion on the same date.18 incompetence; however, other than the termination letter, no evidence was presented
to show how and why Gran was considered to be incompetent. The court held that
To prevent the execution, petitioner filed an Opposition19 to Gran's motion arguing since the law requires the recruitment agencies to subject OFWs to trade tests before
that the Writ of Execution cannot issue because it was not notified of the appellate deployment, Gran must have been competent and qualified; otherwise, he would not
proceedings before the NLRC and was not given a copy of the memorandum of have been hired and deployed abroad.
appeal nor any opportunity to participate in the appeal.
As for the charge of insubordination and disobedience due to Gran's failure to submit
Seeing that the NLRC did not act on Gran's motion after EDI had filed its Opposition, a "Daily Activity Report," the appellate court found that EDI failed to show that the
petitioner filed, on August 26, 1999, a Motion for Reconsideration of the NLRC submission of the "Daily Activity Report" was a part of Gran's duty or the company's
Decision after receiving a copy of the Decision on August 16, 1999.20 policy. The court also held that even if Gran was guilty of insubordination, he should
have just been suspended or reprimanded, but not dismissed.
The NLRC then issued a Resolution21 denying petitioner's Motion for
Reconsideration, ratiocinating that the issues and arguments raised in the motion "had The CA also held that Gran was not afforded due process, given that OAB did not
already been amply discussed, considered, and ruled upon" in the Decision, and that abide by the twin notice requirement. The court found that Gran was terminated on
there was "no cogent reason or patent or palpable error that warrant any disturbance the same day he received the termination letter, without having been apprised of the
thereof." bases of his dismissal or afforded an opportunity to explain his side.

Unconvinced of the NLRC's reasoning, EDI filed a Petition for Certiorari before the Finally, the CA held that the Declaration signed by Gran did not bar him from
CA. Petitioner claimed in its petition that the NLRC committed grave abuse of demanding benefits to which he was entitled. The appellate court found that the
discretion in giving due course to the appeal despite Gran's failure to perfect the Declaration was in the form of a quitclaim, and as such is frowned upon as contrary
appeal. to public policy especially where the monetary consideration given in the Declaration
was very much less than what he was legally entitled to—his backwages amounting V. WHETHER GRAN IS ENTITLED TO BACKWAGES FOR THE
to USD 16,150.00. UNEXPIRED PORTION OF HIS CONTRACT.23

As a result of these findings, on October 18, 2000, the appellate court denied the The Court's Ruling
petition to set aside the NLRC Decision.
The petition lacks merit except with respect to Gran's failure to furnish EDI with his
Hence, this instant petition is before the Court. Appeal Memorandum filed with the NLRC.

The Issues First Issue: NLRC's Duty is to Require Respondent to Provide Petitioner a Copy
of the Appeal
Petitioner raises the following issues for our consideration:
Petitioner EDI claims that Gran's failure to furnish it a copy of the Appeal
I. WHETHER THE FAILURE OF GRAN TO FURNISH A COPY OF HIS Memorandum constitutes a jurisdictional defect and a deprivation of due process that
APPEAL MEMORANDUM TO PETITIONER EDI WOULD CONSTITUTE would warrant a rejection of the appeal.
A JURISDICTIONAL DEFECT AND A DEPRIVATION OF PETITIONER
EDI'S RIGHT TO DUE PROCESS AS WOULD JUSTIFY THE This position is devoid of merit.
DISMISSAL OF GRAN'S APPEAL.
In a catena of cases, it was ruled that failure of appellant to furnish a copy of the
II. WHETHER PETITIONER EDI HAS ESTABLISHED BY WAY OF appeal to the adverse party is not fatal to the appeal.
SUBSTANTIAL EVIDENCE THAT GRAN'S TERMINATION WAS
JUSTIFIABLE BY REASON OF INCOMPETENCE. COROLLARY In Estrada v. National Labor Relations Commission,24 this Court set aside the order
HERETO, WHETHER THE PRIETO VS. NLRC RULING, AS APPLIED of the NLRC which dismissed an appeal on the sole ground that the appellant did not
BY THE COURT OF APPEALS, IS APPLICABLE IN THE INSTANT furnish the appellee a memorandum of appeal contrary to the requirements of Article
CASE. 223 of the New Labor Code and Section 9, Rule XIII of its Implementing Rules and
Regulations.
III. WHETHER PETITIONER HAS ESTABLISHED BY WAY OF
SUBSTANTIAL EVIDENCE THAT GRAN'S TERMINATION WAS Also, in J.D. Magpayo Customs Brokerage Corp. v. NLRC, the order of dismissal of
JUSTIFIABLE BY REASON OF INSUBORDINATION AND an appeal to the NLRC based on the ground that "there is no showing whatsoever that
DISOBEDIENCE. a copy of the appeal was served by the appellant on the appellee"25 was annulled. The
Court ratiocinated as follows:
IV. WHETHER GRAN WAS AFFORDED DUE PROCESS PRIOR TO
TERMINATION. The failure to give a copy of the appeal to the adverse party was a mere formal
lapse, an excusable neglect. Time and again We have acted on petitions to
 review decisions of the Court of Appeals even in the absence of proof of Sec. 5 of the NLRC Rules of Procedure (1990) provides for the proof and
service of a copy thereof to the Court of Appeals as required by Section 1 of completeness of service in proceedings before the NLRC:
Rule 45, Rules of Court. We act on the petitions and simply require the
petitioners to comply with the rule.26 (Emphasis supplied.) Section 5.32 Proof and completeness of service.—The return is prima facie
proof of the facts indicated therein. Service by registered mail is complete
The J.D. Magpayo ruling was reiterated in Carnation Philippines Employees Labor upon receipt by the addressee or his agent; but if the addressee fails to
Union-FFW v. National Labor Relations Commission,27 Pagdonsalan v. NLRC,28 and claim his mail from the post office within five (5) days from the date of first
in Sunrise Manning Agency, Inc. v. NLRC.29 notice of the postmaster, service shall take effect after such time. (Emphasis
supplied.)
Thus, the doctrine that evolved from these cases is that failure to furnish the adverse
party with a copy of the appeal is treated only as a formal lapse, an excusable neglect, Hence, if the service is done through registered mail, it is only deemed complete
and hence, not a jurisdictional defect. Accordingly, in such a situation, the appeal when the addressee or his agent received the mail or after five (5) days from the date
should not be dismissed; however, it should not be given due course either. As of first notice of the postmaster. However, the NLRC Rules do not state what would
enunciated in J.D. Magpayo, the duty that is imposed on the NLRC, in such a constitute proper proof of service.
case, is to require the appellant to comply with the rule that the opposing party
should be provided with a copy of the appeal memorandum. Sec. 13, Rule 13 of the Rules of Court, provides for proofs of service:

While Gran's failure to furnish EDI with a copy of the Appeal Memorandum is Section 13. Proof of service.—Proof of personal service shall consist of a
excusable, the abject failure of the NLRC to order Gran to furnish EDI with the written admission of the party served or the official return of the server, or the
Appeal Memorandum constitutes grave abuse of discretion. affidavit of the party serving, containing a full statement of the date, place and
manner of service. If the service is by ordinary mail, proof thereof shall
The records reveal that the NLRC discovered that Gran failed to furnish EDI a copy consist of an affidavit of the person mailing of facts showing compliance with
of the Appeal Memorandum. The NLRC then ordered Gran to present proof of section 7 of this Rule. If service is made by registered mail, proof shall be
service. In compliance with the order, Gran submitted a copy of Camp Crame Post made by such affidavit and registry receipt issued by the mailing office.
Office's list of mail/parcels sent on April 7, 1998.30 The post office's list shows that The registry return card shall be filed immediately upon its receipt by the
private respondent Gran sent two pieces of mail on the same date: one addressed to a sender, or in lieu thereof the unclaimed letter together with the certified
certain Dan O. de Guzman of Legaspi Village, Makati; and the other appears to be or sworn copy of the notice given by the postmaster to the addressee
addressed to Neil B. Garcia (or Gran),31 of Ermita, Manila—both of whom are not (emphasis supplied).
connected with petitioner.
Based on the foregoing provision, it is obvious that the list submitted by Gran is not
This mailing list, however, is not a conclusive proof that EDI indeed received a copy conclusive proof that he had served a copy of his appeal memorandum to EDI, nor is
of the Appeal Memorandum. it conclusive proof that EDI received its copy of the Appeal Memorandum. He should
have submitted an affidavit proving that he mailed the Appeal Memorandum together
with the registry receipt issued by the post office; afterwards, Gran should have In cases involving OFWs, the rights and obligations among and between the OFW,
immediately filed the registry return card. the local recruiter/agent, and the foreign employer/principal are governed by the
employment contract. A contract freely entered into is considered law between the
Hence, after seeing that Gran failed to attach the proof of service, the NLRC should parties; and hence, should be respected. In formulating the contract, the parties may
not have simply accepted the post office's list of mail and parcels sent; but it should establish such stipulations, clauses, terms and conditions as they may deem
have required Gran to properly furnish the opposing parties with copies of his convenient, provided they are not contrary to law, morals, good customs, public
Appeal Memorandum as prescribed in J.D. Magpayo and the other cases. The order, or public policy.34
NLRC should not have proceeded with the adjudication of the case, as this constitutes
grave abuse of discretion. In the present case, the employment contract signed by Gran specifically states that
Saudi Labor Laws will govern matters not provided for in the contract (e.g. specific
The glaring failure of NLRC to ensure that Gran should have furnished petitioner EDI causes for termination, termination procedures, etc.). Being the law intended by the
a copy of the Appeal Memorandum before rendering judgment reversing the parties (lex loci intentiones) to apply to the contract, Saudi Labor Laws should govern
dismissal of Gran's complaint constitutes an evasion of the pertinent NLRC Rules and all matters relating to the termination of the employment of Gran.
established jurisprudence. Worse, this failure deprived EDI of procedural due process
guaranteed by the Constitution which can serve as basis for the nullification of In international law, the party who wants to have a foreign law applied to a dispute or
proceedings in the appeal before the NLRC. One can only surmise the shock and case has the burden of proving the foreign law. The foreign law is treated as a
dismay that OAB, EDI, and ESI experienced when they thought that the dismissal of question of fact to be properly pleaded and proved as the judge or labor arbiter cannot
Gran's complaint became final, only to receive a copy of Gran's Motion for Execution take judicial notice of a foreign law. He is presumed to know only domestic or forum
of Judgment which also informed them that Gran had obtained a favorable NLRC law.35
Decision. This is not level playing field and absolutely unfair and discriminatory
against the employer and the job recruiters. The rights of the employers to procedural Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter;
due process cannot be cavalierly disregarded for they too have rights assured under thus, the International Law doctrine of presumed-identity approach or processual
the Constitution. presumption comes into play.36 Where a foreign law is not pleaded or, even if
pleaded, is not proved, the presumption is that foreign law is the same as ours.37 Thus,
However, instead of annulling the dispositions of the NLRC and remanding the case we apply Philippine labor laws in determining the issues presented before us.
for further proceedings we will resolve the petition based on the records before us to
avoid a protracted litigation.33 Petitioner EDI claims that it had proven that Gran was legally dismissed due to
incompetence and insubordination or disobedience.
The second and third issues have a common matter—whether there was just cause for
Gran's dismissal—hence, they will be discussed jointly. This claim has no merit.

Second and Third Issues: Whether Gran's dismissal is justifiable by reason of

incompetence, insubordination, and disobedience
In illegal dismissal cases, it has been established by Philippine law and jurisprudence In the instant case, petitioner claims that private respondent Gran was validly
that the employer should prove that the dismissal of employees or personnel is legal dismissed for just cause, due to incompetence and insubordination or disobedience.
and just. To prove its allegations, EDI submitted two letters as evidence. The first is the July 9,
1994 termination letter,43 addressed to Gran, from Andrea E. Nicolaou, Managing
Section 33 of Article 277 of the Labor Code38 states that: Director of OAB. The second is an unsigned April 11, 1995 letter44 from OAB
addressed to EDI and ESI, which outlined the reasons why OAB had terminated
ART. 277. MISCELLANEOUS PROVISIONS39 Gran's employment.

(b) Subject to the constitutional right of workers to security of tenure and their Petitioner claims that Gran was incompetent for the Computer Specialist position
right to be protected against dismissal except for a just and authorized cause because he had "insufficient knowledge in programming and zero knowledge of [the]
and without prejudice to the requirement of notice under Article 283 of this ACAD system."45 Petitioner also claims that Gran was justifiably dismissed due to
Code, the employer shall furnish the worker whose employment is sought to insubordination or disobedience because he continually failed to submit the required
be terminated a written notice containing a statement of the causes for "Daily Activity Reports."46 However, other than the abovementioned letters, no other
termination and shall afford the latter ample opportunity to be heard and to evidence was presented to show how and why Gran was considered incompetent,
defend himself with the assistance of his representative if he so desires in insubordinate, or disobedient. Petitioner EDI had clearly failed to overcome the
accordance with company rules and regulations promulgated pursuant to burden of proving that Gran was validly dismissed.
guidelines set by the Department of Labor and Employment. Any decision
taken by the employer shall be without prejudice to the right of the workers to Petitioner's imputation of incompetence on private respondent due to his "insufficient
contest the validity or legality of his dismissal by filing a complaint with the knowledge in programming and zero knowledge of the ACAD system" based only on
regional branch of the National Labor Relations Commission. The burden of the above mentioned letters, without any other evidence, cannot be given credence.
proving that the termination was for a valid or authorized cause shall rest
on the employer. x x x An allegation of incompetence should have a factual foundation. Incompetence may
be shown by weighing it against a standard, benchmark, or criterion. However, EDI
In many cases, it has been held that in termination disputes or illegal dismissal cases, failed to establish any such bases to show how petitioner found Gran incompetent.
the employer has the burden of proving that the dismissal is for just and valid causes;
and failure to do so would necessarily mean that the dismissal was not justified and In addition, the elements that must concur for the charge of insubordination or willful
therefore illegal.40 Taking into account the character of the charges and the penalty disobedience to prosper were not present.
meted to an employee, the employer is bound to adduce clear, accurate, consistent,
and convincing evidence to prove that the dismissal is valid and legal.41 This is In Micro Sales Operation Network v. NLRC, we held that:
consistent with the principle of security of tenure as guaranteed by the Constitution
and reinforced by Article 277 (b) of the Labor Code of the Philippines.42 For willful disobedience to be a valid cause for dismissal, the following twin
elements must concur: (1) the employee's assailed conduct must have been
willful, that is, characterized by a wrongful and perverse attitude; and (2) the
 order violated must have been reasonable, lawful, made known to the foreign principal."50 The CA, using the ruling in the said case, ruled that Gran must
employee and must pertain to the duties which he had been engaged to have passed the test; otherwise, he would not have been hired. Therefore, EDI was at
discharge.47 fault when it deployed Gran who was allegedly "incompetent" for the job.

EDI failed to discharge the burden of proving Gran's insubordination or willful According to petitioner, the Prieto ruling is not applicable because in the case at
disobedience. As indicated by the second requirement provided for in Micro Sales hand, Gran misrepresented himself in his curriculum vitae as a Computer Specialist;
Operation Network, in order to justify willful disobedience, we must determine thus, he was not qualified for the job for which he was hired.
whether the order violated by the employee is reasonable, lawful, made known to the
employee, and pertains to the duties which he had been engaged to discharge. In the We disagree.
case at bar, petitioner failed to show that the order of the company which was
violated—the submission of "Daily Activity Reports"—was part of Gran's duties as a The CA is correct in applying Prieto. The purpose of the required trade test is to weed
Computer Specialist. Before the Labor Arbiter, EDI should have provided a copy of out incompetent applicants from the pool of available workers. It is supposed to
the company policy, Gran's job description, or any other document that would show reveal applicants with false educational backgrounds, and expose bogus
that the "Daily Activity Reports" were required for submission by the employees, qualifications. Since EDI deployed Gran to Riyadh, it can be presumed that Gran had
more particularly by a Computer Specialist. passed the required trade test and that Gran is qualified for the job. Even if there was
no objective trade test done by EDI, it was still EDI's responsibility to subject Gran to
Even though EDI and/or ESI were merely the local employment or recruitment a trade test; and its failure to do so only weakened its position but should not in any
agencies and not the foreign employer, they should have adduced additional evidence way prejudice Gran. In any case, the issue is rendered moot and academic because
to convincingly show that Gran's employment was validly and legally terminated. Gran's incompetency is unproved.
The burden devolves not only upon the foreign-based employer but also on the
employment or recruitment agency for the latter is not only an agent of the former, Fourth Issue: Gran was not Afforded Due Process
but is also solidarily liable with the foreign principal for any claims or liabilities
arising from the dismissal of the worker.48 As discussed earlier, in the absence of proof of Saudi laws, Philippine Labor laws and
regulations shall govern the relationship between Gran and EDI. Thus, our laws and
Thus, petitioner failed to prove that Gran was justifiably dismissed due to rules on the requisites of due process relating to termination of employment shall
incompetence, insubordination, or willful disobedience. apply.

Petitioner also raised the issue that Prieto v. NLRC,49 as used by the CA in its Petitioner EDI claims that private respondent Gran was afforded due process, since he
Decision, is not applicable to the present case. was allowed to work and improve his capabilities for five months prior to his
termination.51 EDI also claims that the requirements of due process, as enunciated in
In Prieto, this Court ruled that "[i]t is presumed that before their deployment, the Santos, Jr. v. NLRC,52 and Malaya Shipping Services, Inc. v. NLRC,53 cited by the CA
petitioners were subjected to trade tests required by law to be conducted by the in its Decision, were properly observed in the present case.
recruiting agency to insure employment of only technically qualified workers for the
This position is untenable. Summing up, Gran was notified and his employment arbitrarily terminated on the
same day, through the same letter, and for unjustified grounds. Obviously, Gran was
In Agabon v. NLRC,54 this Court held that: not afforded due process.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, Pursuant to the doctrine laid down in Agabon,57 an employer is liable to pay nominal
the employer must give the employee two written notices and a hearing or damages as indemnity for violating the employee's right to statutory due process.
opportunity to be heard if requested by the employee before terminating the Since OAB was in breach of the due process requirements under the Labor Code and
employment: a notice specifying the grounds for which dismissal is sought a its regulations, OAB, ESI, and EDI, jointly and solidarily, are liable to Gran in the
hearing or an opportunity to be heard and after hearing or opportunity to be amount of PhP 30,000.00 as indemnity.
heard, a notice of the decision to dismiss; and (2) if the dismissal is based on
authorized causes under Articles 283 and 284, the employer must give the Fifth and Last Issue: Gran is Entitled to Backwages
employee and the Department of Labor and Employment written notices 30
days prior to the effectivity of his separation. We reiterate the rule that with regard to employees hired for a fixed period of
employment, in cases arising before the effectivity of R.A. No. 804258 (Migrant
Under the twin notice requirement, the employees must be given two (2) notices Workers and Overseas Filipinos Act) on August 25, 1995, that when the contract is
before their employment could be terminated: (1) a first notice to apprise the for a fixed term and the employees are dismissed without just cause, they are entitled
employees of their fault, and (2) a second notice to communicate to the employees to the payment of their salaries corresponding to the unexpired portion of their
that their employment is being terminated. In between the first and second notice, the contract.59 On the other hand, for cases arising after the effectivity of R.A. No. 8042,
employees should be given a hearing or opportunity to defend themselves personally when the termination of employment is without just, valid or authorized cause as
or by counsel of their choice.55 defined by law or contract, the worker shall be entitled to the full reimbursement of
his placement fee with interest of twelve percent (12%) per annum, plus his salaries
A careful examination of the records revealed that, indeed, OAB's manner of for the unexpired portion of his employment contract or for three (3) months for every
dismissing Gran fell short of the two notice requirement. While it furnished Gran the year of the unexpired term whichever is less.60
written notice informing him of his dismissal, it failed to furnish Gran the written
notice apprising him of the charges against him, as prescribed by the Labor Code.56 In the present case, the employment contract provides that the employment contract
Consequently, he was denied the opportunity to respond to said notice. In addition, shall be valid for a period of two (2) years from the date the employee starts to work
OAB did not schedule a hearing or conference with Gran to defend himself and with the employer.61 Gran arrived in Riyadh, Saudi Arabia and started to work on
adduce evidence in support of his defenses. Moreover, the July 9, 1994 termination February 7, 1994;62 hence, his employment contract is until February 7, 1996. Since
letter was effective on the same day. This shows that OAB had already condemned he was illegally dismissed on July 9, 1994, before the effectivity of R.A. No. 8042, he
Gran to dismissal, even before Gran was furnished the termination letter. It should is therefore entitled to backwages corresponding to the unexpired portion of his
also be pointed out that OAB failed to give Gran the chance to be heard and to defend contract, which was equivalent to USD 16,150.
himself with the assistance of a representative in accordance with Article 277 of the
Labor Code. Clearly, there was no intention to provide Gran with due process.
Petitioner EDI questions the legality of the award of backwages and mainly relies on Quitclaims, releases and other waivers of benefits granted by laws or contracts
the Declaration which is claimed to have been freely and voluntarily executed by in favor of workers should be strictly scrutinized to protect the weak and the
Gran. The relevant portions of the Declaration are as follows: disadvantaged. The waivers should be carefully examined, in regard not
only to the words and terms used, but also the factual circumstances
I, ELEAZAR GRAN (COMPUTER SPECIALIST) AFTER RECEIVING under which they have been executed.63 (Emphasis supplied.)
MY FINAL SETTLEMENT ON THIS DATE THE AMOUNT OF:
This Court had also outlined in Land and Housing Development Corporation, citing
S.R. 2,948.00 (SAUDI RIYALS TWO THOUSAND NINE Periquet v. NLRC,64 the parameters for valid compromise agreements, waivers, and
quitclaims:
HUNDRED FORTY EIGHT ONLY)
Not all waivers and quitclaims are invalid as against public policy. If the
REPRESENTING COMPLETE PAYMENT (COMPENSATION) FOR THE agreement was voluntarily entered into and represents a reasonable settlement,
SERVICES I RENDERED TO OAB ESTABLISHMENT. it is binding on the parties and may not later be disowned simply because of a
change of mind. It is only where there is clear proof that the waiver was
I HEREBY DECLARE THAT OAB EST. HAS NO FINANCIAL wangled from an unsuspecting or gullible person, or the terms of settlement
OBLIGATION IN MY FAVOUR AFTER RECEIVING THE ABOVE are unconscionable on its face, that the law will step in to annul the
MENTIONED AMOUNT IN CASH. questionable transaction. But where it is shown that the person making the
waiver did so voluntarily, with full understanding of what he was doing,
I STATE FURTHER THAT OAB EST. HAS NO OBLIGATION and the consideration for the quitclaim is credible and reasonable, the
TOWARDS ME IN WHATEVER FORM. transaction must be recognized as a valid and binding undertaking. (Emphasis
supplied.)
I ATTEST TO THE TRUTHFULNESS OF THIS STATEMENT BY
AFFIXING MY SIGNATURE VOLUNTARILY. Is the waiver and quitclaim labeled a Declaration valid? It is not.

SIGNED. The Court finds the waiver and quitclaim null and void for the following reasons:
ELEAZAR GRAN
1. The salary paid to Gran upon his termination, in the amount of SR 2,948.00, is
Courts must undertake a meticulous and rigorous review of quitclaims or waivers, unreasonably low. As correctly pointed out by the court a quo, the payment of SR
more particularly those executed by employees. This requirement was clearly 2,948.00 is even lower than his monthly salary of SR 3,190.00 (USD 850.00). In
articulated by Chief Justice Artemio V. Panganiban in Land and Housing addition, it is also very much less than the USD 16,150.00 which is the amount Gran
Development Corporation v. Esquillo: is legally entitled to get from petitioner EDI as backwages.
2. The Declaration reveals that the payment of SR 2,948.00 is actually the payment payment of his ticket. He could have entertained some apprehensions as to the status
for Gran's salary for the services he rendered to OAB as Computer Specialist. If the of his stay or safety in Saudi Arabia if he would not sign the quitclaim.
Declaration is a quitclaim, then the consideration should be much much more than the
monthly salary of SR 3,190.00 (USD 850.00)—although possibly less than the 4. The court a quo is correct in its finding that the Declaration is a contract of
estimated Gran's salaries for the remaining duration of his contract and other benefits adhesion which should be construed against the employer, OAB. An adhesion
as employee of OAB. A quitclaim will understandably be lower than the sum total of contract is contrary to public policy as it leaves the weaker party—the employee—in
the amounts and benefits that can possibly be awarded to employees or to be earned a "take-it-or-leave-it" situation. Certainly, the employer is being unjust to the
for the remainder of the contract period since it is a compromise where the employees employee as there is no meaningful choice on the part of the employee while the
will have to forfeit a certain portion of the amounts they are claiming in exchange for terms are unreasonably favorable to the employer.66
the early payment of a compromise amount. The court may however step in when
such amount is unconscionably low or unreasonable although the employee Thus, the Declaration purporting to be a quitclaim and waiver is unenforceable under
voluntarily agreed to it. In the case of the Declaration, the amount is unreasonably Philippine laws in the absence of proof of the applicable law of Saudi Arabia.
small compared to the future wages of Gran.
In order to prevent disputes on the validity and enforceability of quitclaims and
3. The factual circumstances surrounding the execution of the Declaration would waivers of employees under Philippine laws, said agreements should contain the
show that Gran did not voluntarily and freely execute the document. Consider the following:
following chronology of events:
1. A fixed amount as full and final compromise settlement;
a. On July 9, 1994, Gran received a copy of his letter of termination;
2. The benefits of the employees if possible with the corresponding amounts, which
b. On July 10, 1994, Gran was instructed to depart Saudi Arabia and required the employees are giving up in consideration of the fixed compromise amount;
to pay his plane ticket;65
3. A statement that the employer has clearly explained to the employee in English,
c. On July 11, 1994, he signed the Declaration; Filipino, or in the dialect known to the employees—that by signing the waiver or
quitclaim, they are forfeiting or relinquishing their right to receive the benefits which
d. On July 12, 1994, Gran departed from Riyadh, Saudi Arabia; and are due them under the law; and

e. On July 21, 1994, Gran filed the Complaint before the NLRC. 4. A statement that the employees signed and executed the document voluntarily, and
had fully understood the contents of the document and that their consent was freely
The foregoing events readily reveal that Gran was "forced" to sign the Declaration given without any threat, violence, duress, intimidation, or undue influence exerted
and constrained to receive the amount of SR 2,948.00 even if it was against his will— on their person.
since he was told on July 10, 1994 to leave Riyadh on July 12, 1994. He had no other
choice but to sign the Declaration as he needed the amount of SR 2,948.00 for the
It is advisable that the stipulations be made in English and Tagalog or in the dialect
known to the employee. There should be two (2) witnesses to the execution of the 9) Willamette Iron and Steel Works vs. Muzzal May 21, 1935
quitclaim who must also sign the quitclaim. The document should be subscribed and
sworn to under oath preferably before any administering official of the Department of G.R. No. L-42538 May 21, 1935
Labor and Employment or its regional office, the Bureau of Labor Relations, the
NLRC or a labor attaché in a foreign country. Such official shall assist the parties WILLAMETTE IRON & STEEL WORKS, plaintiff-appellee,
regarding the execution of the quitclaim and waiver.67 This compromise settlement vs.
becomes final and binding under Article 227 of the Labor Code which provides that: A.H. MUZZAL, defendant-appellant.

[A]ny compromise settlement voluntarily agreed upon with the assistance of Sidney C. Schwarzkopf and Eduardo D. Enriquez for appellant.
the Bureau of Labor Relations or the regional office of the DOLE, shall be John R. McFie, Jr., for appellee.
final and binding upon the parties and the NLRC or any court "shall not
assume jurisdiction over issues involved therein except in case of non- GODDARD, J.:
compliance thereof or if there is prima facie evidence that the settlement was
obtained through fraud, misrepresentation, or coercion. This is an appeal from a decision of the Court of First Instance of Zamboanga, the
dispositive part of which reads:
It is made clear that the foregoing rules on quitclaim or waiver shall apply only to
labor contracts of OFWs in the absence of proof of the laws of the foreign country In view of the considerations above stated, judgment is hereby entered in
agreed upon to govern said contracts. Otherwise, the foreign laws shall apply. favor of the plaintiff, ordering the defendant, for the first cause of action, to
pay to plaintiff the sum of P2,837.34, with interest thereon at the rate of 6 per
WHEREFORE, the petition is DENIED. The October 18, 2000 Decision in CA- cent per annum from March 11, 1929, until paid, and to pay also the amount
G.R. SP No. 56120 of the Court of Appeals affirming the January 15, 1999 Decision of P1,590.63, for the second cause of action, with interest thereon at 7 per cent
and September 30, 1999 Resolution of the NLRC per annum from April 8, 1929, until paid. The defendant is further ordered to
pay the amount of P500 as reasonable attorney's fees in prosecuting this
is AFFIRMED with the MODIFICATION that petitioner EDI-Staffbuilders action, and to pay the costs of these proceedings.
International, Inc. shall pay the amount of PhP 30,000.00 to respondent Gran as
nominal damages for non-compliance with statutory due process. This case involves the liability of the defendant, a former resident of the State of
California, now residing in the Philippine Islands, for obligations contracted by a
No costs. California corporation of which he was a stockholder at the time said obligations
were contracted with the plaintiff-appellee in this case.
SO ORDERED.
The section of the Civil Code of California under which the plaintiff seeks to recover
Quisumbing, Carpio, Tinga, Nachura, JJ., concur. reads:
 SEC. 322. Each stockholder of a corporation is individually and personally I became acquainted with the corporation by reason of being employed by it
liable for such proportion of all its debts and liabilities contracted or incurred in October, November and December of 1929 as a certified public accountant
during the time he was a stockholder as the amount of stock or shares owned and auditor to personally examine the company's books of account, stock and
by him bears to the whole of the subscribed capital stock or shares of the other records of the company for the purpose of certifying, if possible, to the
corporation. Any creditor of the corporation may institute joint or several correctness of a statement of the financial condition of the company on March
actions against any of its stockholders, for the proportion of his claim payable 31, 1929.
by each, and in such action the court must (1) ascertain the proportion of the
claim or debt for which each defendant is liable, and (2) a several judgment xxx xxx xxx
must be rendered against each, in conformity therewith. If any stockholder
pays his proportion of any debt due from the corporation, incurred while he 8. Please state, if you know, whether or not one A.H. Muzzal was a
was such stockholder, he is relieved from any further personal liability for stockholder of Meyer-Muzzal Company on November 5, 1928 and December
such debt, and if an action has been brought against him upon such debt, it 22, 1928, and if he was, please state the number and value of the shares of
must be dismissed, as to him, upon his paying the costs, or such proportion capital stock of Meyer-Muzzal Company subscribed and owned by said A.H.
thereof as may be properly chargeable against him. The liability of each Muzzal on November 5, 1928 and December 22, 1928?
stockholder is determined by the amount of stock or shares owned by him at
the time the debt or liability was incurred; and such liability is not released by A. Yes, Mr. A.H. Muzzal was a stockholder of the Meyer-Muzzal Company
any subsequent transfer of stock. on the dates specified. Fourteen hundred thirty-three shares of the capital
stock of Meyer-Muzzal Company of the par value of $10 each were
The defendant-appellant makes the following assignments of error: subscribed and owned by said A.H. Muzzal on November 5th, 1928 and on
December 22nd, 1928, and said shares were issued to and standing in the
I. The lower court erred in holding that the defendant was the holder of 1,432 name of A. H. Muzzal on the books of said company at said times.
shares of the capital stock of the Meyer-Muzzal Company.
9. If, by reason of the loss, destruction and/or disappearance of the stock and
II. The lower court erred in finding that plaintiff has proven the existence of other corporate records of the Meyer-Muzzal Company since the time you had
the foreign law involved in this action. occasion to examine them, you have been unable to make reference thereto in
answering the questions asked of you in this deposition, please answer each
III. The lower court erred in enforcing the law of California. and all of said questions by reference to any documents or working sheets
which you may be prepared upon the occasion of your examining and/or
IV. The lower court erred in rendering judgment against the defendant. auditing the books of account, stock and other records of the Meyer-Muzzal
Company.
As to the first assignment of error the witness Stanley H. Hermann, a certified public
accountant, testified that he knows that the Meyer-Muzzal Company is a corporation A. By reference to my working papers which I made at the time I examined
and further testified as follows: the books of account and stock records of Meyer-Muzzal Company in
 October, November, December, 1929, and which working papers are in my and was permitted to testify, though he referred to a book containing the decrees of
possession, I find and can state accordingly that these working papers show the Council of Trent as controlling, Jones on Evidence, Second Edition, Volume 4,
what the stock and other records of said Meyer-Muzzal Company recorded in pages 3148-3152.) Aside from the testimony of Attorney Bolton Ragland's Annotated
regard to the matters contained in questions No. 6, No. 7 and No. 8 and I can Civil Code of California was presented as evidence. This book contains that State's
state accordingly from my examination of said records and by reference to my Civil Code as adopted March 21, 1872, with the subsequent official statute
working papers that I know who the stockholders of Meyer-Muzzal company amendments to and including the year 1929.
were; that the amount of the subscribed capital stock of said Meyer-Muzzal
Company on said dates was 5,000 shares of the par value of $10 each, and that In the third and fourth assignments of error the appellant argues that since the law of
A.H. Muzzal was a stockholder of the Meyer-Muzzal Company on the dates California, as to the liability of stockholders of a corporation, is different from and
specified and that fourteen hundred thirty-three shares of the capital stock of inconsistent with the Philippine Corporation Law the courts here should not impose
Meyer-Muzzal Company of the par value of $10 each were subscribed and liability provided in that law upon a resident of these Islands who is a stockholder of a
owned by A.H. Muzzal on November 5, 1928 and on December 22nd, 1928 California corporation. The herein defendant is chargeable with notice of the law of
and said shares were issued to and standing in the name of A.H. Muzzal on California as to the liability of stockholders for debt of a corporation proportionate to
the books of said company at said times. their stock holdings, in view of the fact that he was one of the incorporators of the
Meyer-Muzzal Company in the year 1924 and was still a stockholder in that company
The above sufficiently establishes the fact that the defendant was the owner of 1,433 in the year 1928. Exhibit 10 of the plaintiff is a certified company of the articles of
shares of stock of the corporation Meyer-Muzzal Company when it contracted the incorporation of Meyer-Muzzal Company in which it appears that that company was
obligations alleged in the complaint. incorporated on August 22, 1924, and that the incorporators were A.H. Muzzal, Leo
W. Meyer and James Rolph, Jr., "all of whom are residents and citizens of the State
As to the second assignment of error Mr. Arthur W. Bolton, an attorney-at-law of San of California." The defendant cannot now escape liability by alleging that the
Francisco, California, since the year 1918, under oath, quoted verbatim section 322 of California law is unjust and different from the inconsistent with the Philippine
the California Civil Code and stated that said section was in force at the time the Corporation Law.
obligations of the defendant to the plaintiff were incurred, i. e., on November 5, 1928
and December 22, 1928. This evidence sufficiently established the fact that the The judgment of the trial court is affirmed with costs in both instances against the
section in question was the law of the State of California on the above dates. A defendant-appellant.
reading of sections 300 and 301 of our Code of Civil Procedure will convince one
that these sections do not exclude the presentation of other competent evidence to Malcolm, Abad Santos, Hull, Vickers, and Diaz, JJ., concur.
prove the existence of a foreign law.

"The foreign law is a matter of fact ... You ask the witness what the law is; he may
from his recollection, or on producing and referring to books, say what it is." (Lord
Campbell concurring in an opinion of Lord Chief Justice Denman in a well known
English case where a witness was called upon to prove the Roman laws of marriage
 an overdraft facility in the maximum amount of Singapore dollars 200,000.00
10) Hong Kong and Shanghai Banking Corp vs. Sherman et. al. August 11, 1989 (which amount was subsequently increased to Singapore dollars 375,000.00)
with interest at 3% over petitioner BANK prime rate, payable monthly, on
G.R. No. 72494 August 11, 1989 amounts due under said overdraft facility; as a security for the repayment by
the COMPANY of sums advanced by petitioner BANK to it through the
HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner, aforesaid overdraft facility, on October 7, 1982, both private respondents and
vs. a certain Robin de Clive Lowe, all of whom were directors of the COMPANY
JACK ROBERT SHERMAN, DEODATO RELOJ and THE INTERMEDIATE at such time, executed a Joint and Several Guarantee (p. 53, Rollo) in favor
APPELLATE COURT, respondents. of petitioner BANK whereby private respondents and Lowe agreed to pay,
jointly and severally, on demand all sums owed by the COMPANY to
Quiason, Makalintal, Barot & Torres for petitioner. petitioner BANK under the aforestated overdraft facility.

Alejandro, Aranzaso & Associates for private respondents. The Joint and Several Guarantee provides, inter alia, that:

This guarantee and all rights, obligations and liabilities arising

hereunder shall be construed and determined under and may
MEDIALDEA, J.: be enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts of Singapore shall
This is a petition for review on certiorari of the decision of the Intermediate have jurisdiction over all disputes arising under this guarantee.
Appellate Court (now Court of Appeals) dated August 2, 1985, which reversed ... (p. 33-A, Rollo).
the order of the Regional Trial Court dated February 28,1985 denying the
Motion to Dismiss filed by private respondents Jack Robert Sherman and The COMPANY failed to pay its obligation. Thus, petitioner BANK demanded
Deodato Reloj. payment of the obligation from private respondents, conformably with the
provisions of the Joint and Several Guarantee. Inasmuch as the private
A complaint for collection of a sum of money (pp. 49-52, Rollo) was filed by respondents still failed to pay, petitioner BANK filed the above-mentioned
petitioner Hongkong and Shanghai Banking Corporation (hereinafter referred complaint.
to as petitioner BANK) against private respondents Jack Robert Sherman and
Deodato Reloj, docketed as Civil Case No. Q-42850 before the Regional Trial On December 14,1984, private respondents filed a motion to dismiss (pp 54-
Court of Quezon City, Branch 84. 56, Rollo) which was opposed by petitioner BANK (pp. 58-62, Rollo). Acting
on the motion, the trial court issued an order dated February 28, 1985 (pp,
It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. 64-65, Rollo), which read as follows:
(hereinafter referred to as COMPANY), a company incorporated in Singapore
applied with, and was granted by, the Singapore branch of petitioner BANK
In a Motion to Dismiss filed on December 14, 1984, the argument holds no water. Jurisdiction over the persons of
defendants seek the dismissal of the complaint on two grounds, defendants is acquired by service of summons and copy of the
namely: complaint on them. There has been a valid service of summons
on both defendants and in fact the same is admitted when said
1. That the court has no jurisdiction over the subject matter of defendants filed a 'Motion for Extension of Time to File
the complaint; and Responsive Pleading on December 5, 1984.

2. That the court has no jurisdiction over the persons of the WHEREFORE, the Motion to Dismiss is hereby DENIED.
defendants.
SO ORDERED.
In the light of the Opposition thereto filed by plaintiff, the Court
finds no merit in the motion. "On the first ground, defendants A motion for reconsideration of the said order was filed by private
claim that by virtue of the provision in the Guarantee (the respondents which was, however, denied (p. 66, Rollo).
actionable document) which reads —
Private respondents then filed before the respondent Intermediate Appellate
This guarantee and all rights, obligations and Court (now Court of Appeals) a petition for prohibition with preliminary
liabilities arising hereunder shall be construed and injunction and/or prayer for a restraining order (pp. 39-48, Rollo). On August
determined under and may be enforced in 2, 1985, the respondent Court rendered a decision (p. 37, Rollo), the
accordance with the laws of the Republic of dispositive portion of which reads:
Singapore. We hereby agree that the courts in
Singapore shall have jurisdiction over all disputes WHEREFORE, the petition for prohibition with preliminary
arising under this guarantee, injuction is hereby GRANTED. The respondent Court is
enjoined from taking further cognizance of the case and to
the Court has no jurisdiction over the subject matter of the case. dismiss the same for filing with the proper court of Singapore
The Court finds and concludes otherwise. There is nothing in which is the proper forum. No costs.
the Guarantee which says that the courts of Singapore shall
have jurisdiction to the exclusion of the courts of other countries SO ORDERED.
or nations. Also, it has long been established in law and
jurisprudence that jurisdiction of courts is fixed by law; it cannot The motion for reconsideration was denied (p. 38, Rollo), hence, the present
be conferred by the will, submission or consent of the parties. petition.

On the second ground, it is asserted that defendant Robert' , The main issue is whether or not Philippine courts have jurisdiction over the
Sherman is not a citizen nor a resident of the Philippines. This suit.
The controversy stems from the interpretation of a provision in the Joint and (sic) terms the word 'shall' which under statutory construction is
Several Guarantee, to wit: mandatory.

(14) This guarantee and all rights, obligations and liabilites Thus it was ruled that:
arising hereunder shall be construed and determined under and
may be enforced in accordance with the laws of the Republic of ... the word 'shall' is imperative, operating to impose a duty
Singapore. We hereby agree that the Courts in Singapore shall which may be enforced (Dizon vs. Encarnacion, 9 SCRA
have jurisdiction over all disputes arising under this guarantee. 714).lâwphî1.ñèt
... (p. 53-A, Rollo)
There is nothing more imperative and restrictive than what the
In rendering the decision in favor of private respondents, the Court of Appeals agreement categorically commands that 'all rights, obligations,
made, the following observations (pp. 35-36, Rollo): and liabilities arising hereunder shall be construed and
determined under and may be enforced in accordance with the
There are significant aspects of the case to which our attention laws of the Republic of Singapore.'
is invited. The loan was obtained by Eastern Book Service PTE,
Ltd., a company incorporated in Singapore. The loan was While it is true that "the transaction took place in Singaporean setting" and
granted by the Singapore Branch of Hongkong and Shanghai that the Joint and Several Guarantee contains a choice-of-forum clause, the
Banking Corporation. The Joint and Several Guarantee was very essence of due process dictates that the stipulation that "[t]his guarantee
also concluded in Singapore. The loan was in Singaporean and all rights, obligations and liabilities arising hereunder shall be construed
dollars and the repayment thereof also in the same currency. and determined under and may be enforced in accordance with the laws of
The transaction, to say the least, took place in Singporean the Republic of Singapore. We hereby agree that the Courts in Singapore
setting in which the law of that country is the measure by which shall have jurisdiction over all disputes arising under this guarantee" be
that relationship of the parties will be governed. liberally construed. One basic principle underlies all rules of jurisdiction in
International Law: a State does not have jurisdiction in the absence of some
xxx xxx xxx reasonable basis for exercising it, whether the proceedings are in rem quasi
in rem or in personam. To be reasonable, the jurisdiction must be based on
Contrary to the position taken by respondents, the guarantee some minimum contacts that will not offend traditional notions of fair play and
agreement compliance that any litigation will be before the substantial justice (J. Salonga, Private International Law, 1981, p. 46).
courts of Singapore and that the rights and obligations of the Indeed, as pointed-out by petitioner BANK at the outset, the instant case
parties shall be construed and determined in accordance with presents a very odd situation. In the ordinary habits of life, anyone would be
the laws of the Republic of Singapore. A closer examination of disinclined to litigate before a foreign tribunal, with more reason as a
paragraph 14 of the Guarantee Agreement upon which the defendant. However, in this case, private respondents are Philippine
motion to dismiss is based, employs in clear and unmistakeable residents (a fact which was not disputed by them) who would rather face a
complaint against them before a foreign court and in the process incur where the stipulation was "[i]n case of litigation, jurisdiction shall be vested in
considerable expenses, not to mention inconvenience, than to have a the Court of Davao City." We held:
Philippine court try and resolve the case. Private respondents' stance is
hardly comprehensible, unless their ultimate intent is to evade, or at least Anent the claim that Davao City had been stipulated as the
delay, the payment of a just obligation. venue, suffice it to say that a stipulation as to venue does not
preclude the filing of suits in the residence of plaintiff or
The defense of private respondents that the complaint should have been filed defendant under Section 2 (b), Rule 4, Rules of Court, in the
in Singapore is based merely on technicality. They did not even claim, much absence of qualifying or restrictive words in the agreement
less prove, that the filing of the action here will cause them any unnecessary which would indicate that the place named is the only venue
trouble, damage, or expense. On the other hand, there is no showing that agreed upon by the parties.
petitioner BANK filed the action here just to harass private respondents.
Applying the foregoing to the case at bar, the parties did not thereby stipulate
In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033, October that only the courts of Singapore, to the exclusion of all the rest, has
31, 1969, 30 SCRA 187, it was ruled: jurisdiction. Neither did the clause in question operate to divest Philippine
courts of jurisdiction. In International Law, jurisdiction is often defined as the
... An accurate reading, however, of the stipulation, 'The parties light of a State to exercise authority over persons and things within its
agree to sue and be sued in the Courts of Manila,' does not boundaries subject to certain exceptions. Thus, a State does not assume
preclude the filing of suits in the residence of plaintiff or jurisdiction over travelling sovereigns, ambassadors and diplomatic
defendant. The plain meaning is that the parties merely representatives of other States, and foreign military units stationed in or
consented to be sued in Manila. Qualifying or restrictive words marching through State territory with the permission of the latter's authorities.
which would indicate that Manila and Manila alone is the venue This authority, which finds its source in the concept of sovereignty, is
are totally absent therefrom. We cannot read into that clause exclusive within and throughout the domain of the State. A State is competent
that plaintiff and defendant bound themselves to file suits with to take hold of any judicial matter it sees fit by making its courts and agencies
respect to the last two transactions in question only or assume jurisdiction over all kinds of cases brought before them (J. Salonga,
exclusively in Manila. For, that agreement did not change or Private International Law, 1981, pp. 37-38).lâwphî1.ñèt
transfer venue. It simply is permissive. The parties solely agreed
to add the courts of Manila as tribunals to which they may As regards the issue on improper venue, petitioner BANK avers that the
resort. They did not waive their right to pursue remedy in the objection to improper venue has been waived. However, We agree with the
courts specifically mentioned in Section 2(b) of Rule 4. ruling of the respondent Court that:
Renuntiatio non praesumitur.
While in the main, the motion to dismiss fails to categorically
This ruling was reiterated in the case of Neville Y. Lamis Ents., et al. v. use with exactitude the words 'improper venue' it can be
Lagamon, etc., et al., G.R. No. 57250, October 30, 1981, 108 SCRA 740, perceived from the general thrust and context of the motion that
 what is meant is improper venue, The use of the word inasmuch as well-known is the rule that a defendant cannot plead any
'jurisdiction' was merely an attempt to copy-cat the same word defense that has not been interposed in the court below.
employed in the guarantee agreement but conveys the concept
of venue. Brushing aside all technicalities, it would appear that ACCORDINGLY, the decision of the respondent Court is hereby REVERSED
jurisdiction was used loosely as to be synonymous with venue. and the decision of the Regional Trial Court is REINSTATED, with costs
It is in this spirit that this Court must view the motion to dismiss. against private respondents. This decision is immediately executory.
... (p. 35, Rollo).
SO ORDERED.
At any rate, this issue is now of no moment because We hold that venue here
was properly laid for the same reasons discussed above. Narvasa, Cruz, Gancayco and Griñ;o-Aquino, JJ., concur.

The respondent Court likewise ruled that (pp. 36-37, Rollo):

... In a conflict problem, a court will simply refuse to entertain the

case if it is not authorized by law to exercise jurisdiction. And
even if it is so authorized, it may still refuse to entertain the case
by applying the principle of forum non conveniens. ...

However, whether a suit should be entertained or dismissed on the basis of

the principle of forum non conveniens depends largely upon the facts of the
particular case and is addressed to the sound discretion of the trial court (J.
Salonga, Private International Law, 1981, p. 49).lâwphî1.ñèt Thus, the
respondent Court should not have relied on such principle.

Although the Joint and Several Guarantee prepared by petitioner BANK is a

contract of adhesion and that consequently, it cannot be permitted to take a
stand contrary to the stipulations of the contract, substantial bases exist for
petitioner Bank's choice of forum, as discussed earlier.

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