G.R. No.

149177               November 23, 2007 January 28, 2000, this time for the detailed in the proper courts of Japan following the principles
KAZUHIRO HASEGAWA and NIPPON ENGINEERING engineering and construction supervision of the of lex loci celebrationis and lex contractus.12
CONSULTANTS CO., LTD., Petitioners, Bongabon-Baler Road Improvement (BBRI) Project.7 In the meantime, on June 20, 2000, the DPWH
vs. Respondent was named as the project manager in approved Nippon's request for the replacement of
MINORU KITAMURA, Respondent. the contract's Appendix 3.1.8 Kitamura by a certain Y. Kotake as project manager
DECISION On February 28, 2000, petitioner Kazuhiro of the BBRI Project.13
NACHURA, J.: Hasegawa, Nippon's general manager for its On June 29, 2000, the RTC, invoking our ruling in
Before the Court is a petition for review on certiorari International Division, informed respondent that the Insular Government v. Frank14 that matters
under Rule 45 of the Rules of Court assailing the company had no more intention of automatically connected with the performance of contracts are
April 18, 2001 Decision1 of the Court of Appeals (CA) renewing his ICA. His services would be engaged by regulated by the law prevailing at the place of
in CA-G.R. SP No. 60827, and the July 25, 2001 the company only up to the substantial completion performance,15 denied the motion to dismiss. 16 The
Resolution2 denying the motion for reconsideration of the STAR Project on March 31, 2000, just in time trial court subsequently denied petitioners' motion
thereof. for the ICA's expiry.9 for reconsideration,17 prompting them to file with
On March 30, 1999, petitioner Nippon Engineering Threatened with impending unemployment, the appellate court, on August 14, 2000, their first
Consultants Co., Ltd. (Nippon), a Japanese respondent, through his lawyer, requested a Petition for Certiorari under Rule 65 [docketed as CA-
consultancy firm providing technical and negotiation conference and demanded that he be G.R. SP No. 60205].18 On August 23, 2000, the CA
management support in the infrastructure projects assigned to the BBRI project. Nippon insisted that resolved to dismiss the petition on procedural
of foreign governments,3 entered into an respondent’s contract was for a fixed term that had grounds—for lack of statement of material dates and
Independent Contractor Agreement (ICA) with already expired, and refused to negotiate for the for insufficient verification and certification against
respondent Minoru Kitamura, a Japanese national renewal of the ICA.10 forum shopping.19 An Entry of Judgment was later
permanently residing in the Philippines. 4 The As he was not able to generate a positive response issued by the appellate court on September 20,
agreement provides that respondent was to extend from the petitioners, respondent consequently 2000.20
professional services to Nippon for a year starting on initiated on June 1, 2000 Civil Case No. 00-0264 for Aggrieved by this development, petitioners filed with
April 1, 1999.5 Nippon then assigned respondent to specific performance and damages with the Regional the CA, on September 19, 2000, still within the
work as the project manager of the Southern Trial Court of Lipa City.11 reglementary period, a second Petition for Certiorari
Tagalog Access Road (STAR) Project in the For their part, petitioners, contending that the ICA under Rule 65 already stating therein the material
Philippines, following the company's consultancy had been perfected in Japan and executed by and dates and attaching thereto the proper verification
contract with the Philippine Government.6 between Japanese nationals, moved to dismiss the and certification. This second petition, which
When the STAR Project was near completion, the complaint for lack of jurisdiction. They asserted that substantially raised the same issues as those in the
Department of Public Works and Highways (DPWH) the claim for improper pre-termination of first, was docketed as CA-G.R. SP No. 60827.21
engaged the consultancy services of Nippon, on respondent's ICA could only be heard and ventilated
 Ruling on the merits of the second petition, the DEVELOPMENT[S] IN PRIVATE INTERNATIONAL fact did—and stating therein the material dates,
appellate court rendered the assailed April 18, 2001 LAWS.26 within the prescribed period30 in Section 4, Rule 65 of
Decision22 finding no grave abuse of discretion in the The pivotal question that this Court is called upon to the said Rules.31
trial court's denial of the motion to dismiss. The CA resolve is whether the subject matter jurisdiction of The dismissal of a case without prejudice signifies the
ruled, among others, that the principle of lex loci Philippine courts in civil cases for specific absence of a decision on the merits and leaves the
celebrationis was not applicable to the case, because performance and damages involving contracts parties free to litigate the matter in a subsequent
nowhere in the pleadings was the validity of the executed outside the country by foreign nationals action as though the dismissed action had not been
written agreement put in issue. The CA thus declared may be assailed on the principles of lex loci commenced. In other words, the termination of a
that the trial court was correct in applying instead celebrationis, lex contractus, the "state of the most case not on the merits does not bar another action
the principle of lex loci solutionis.23 significant relationship rule," or forum non involving the same parties, on the same subject
Petitioners' motion for reconsideration was conveniens. matter and theory.32
subsequently denied by the CA in the assailed July 25, However, before ruling on this issue, we must first Necessarily, because the said dismissal is without
2001 Resolution.24 dispose of the procedural matters raised by the prejudice and has no res judicata effect, and even if
Remaining steadfast in their stance despite the series respondent. petitioners still indicated in the verification and
of denials, petitioners instituted the instant Petition Kitamura contends that the finality of the appellate certification of the second certiorari petition that the
for Review on Certiorari25 imputing the following court's decision in CA-G.R. SP No. 60205 has already first had already been dismissed on procedural
errors to the appellate court: barred the filing of the second petition docketed as grounds,33 petitioners are no longer required by the
A. THE HONORABLE COURT OF APPEALS GRAVELY CA-G.R. SP No. 60827 (fundamentally raising the Rules to indicate in their certification of non-forum
ERRED IN FINDING THAT THE TRIAL COURT VALIDLY same issues as those in the first one) and the instant shopping in the instant petition for review of the
EXERCISED JURISDICTION OVER THE INSTANT petition for review thereof. second certiorari petition, the status of the aforesaid
CONTROVERSY, DESPITE THE FACT THAT THE We do not agree. When the CA dismissed CA-G.R. SP first petition before the CA. In any case, an omission
CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A No. 60205 on account of the petition's defective in the certificate of non-forum shopping about any
QUO WAS ENTERED INTO BY AND BETWEEN TWO certification of non-forum shopping, it was a dismissal event that will not constitute res judicata and litis
JAPANESE NATIONALS, WRITTEN WHOLLY IN THE without prejudice.27 The same holds true in the CA's pendentia, as in the present case, is not a fatal defect.
JAPANESE LANGUAGE AND EXECUTED IN TOKYO, dismissal of the said case due to defects in the formal It will not warrant the dismissal and nullification of
JAPAN. requirement of verification28 and in the other the entire proceedings, considering that the evils
B. THE HONORABLE COURT OF APPEALS GRAVELY requirement in Rule 46 of the Rules of Court on the sought to be prevented by the said certificate are no
ERRED IN OVERLOOKING THE NEED TO REVIEW OUR statement of the material dates.29 The dismissal being longer present.34
ADHERENCE TO THE PRINCIPLE OF LEX LOCI without prejudice, petitioners can re-file the petition, The Court also finds no merit in respondent's
SOLUTIONIS IN THE LIGHT OF RECENT or file a second petition attaching thereto the contention that petitioner Hasegawa is only
appropriate verification and certification—as they, in authorized to verify and certify, on behalf of Nippon,
the certiorari petition filed with the CA and not the person, not even its officers, can bind the damages filed by the respondent. The ICA subject of
instant petition. True, the Authorization 35 dated corporation, in the absence of authority from the the litigation was entered into and perfected in
September 4, 2000, which is attached to the second board.40 Considering that Hasegawa verified and Tokyo, Japan, by Japanese nationals, and written
certiorari petition and which is also attached to the certified the petition only on his behalf and not on wholly in the Japanese language. Thus, petitioners
instant petition for review, is limited in scope—its behalf of the other petitioner, the petition has to be posit that local courts have no substantial relationship
wordings indicate that Hasegawa is given the denied pursuant to Loquias v. Office of the to the parties46 following the [state of the] most
authority to sign for and act on behalf of the company Ombudsman.41 Substantial compliance will not suffice significant relationship rule in Private International
only in the petition filed with the appellate court, and in a matter that demands strict observance of the Law.47
that authority cannot extend to the instant petition Rules.42 While technical rules of procedure are The Court notes that petitioners adopted an
for review.36 In a plethora of cases, however, this designed not to frustrate the ends of justice, additional but different theory when they elevated
Court has liberally applied the Rules or even nonetheless, they are intended to effect the proper the case to the appellate court. In the Motion to
suspended its application whenever a satisfactory and orderly disposition of cases and effectively Dismiss48 filed with the trial court, petitioners never
explanation and a subsequent fulfillment of the prevent the clogging of court dockets.43 contended that the RTC is an inconvenient forum.
requirements have been made.37 Given that Further, the Court has observed that petitioners They merely argued that the applicable law which will
petitioners herein sufficiently explained their incorrectly filed a Rule 65 petition to question the determine the validity or invalidity of respondent's
misgivings on this point and appended to their Reply38 trial court's denial of their motion to dismiss. It is a claim is that of Japan, following the principles of lex
an updated Authorization39 for Hasegawa to act on well-established rule that an order denying a motion loci celebrationis and lex contractus.49 While not
behalf of the company in the instant petition, the to dismiss is interlocutory, and cannot be the subject abandoning this stance in their petition before the
Court finds the same as sufficient compliance with the of the extraordinary petition for certiorari or appellate court, petitioners on certiorari significantly
Rules. mandamus. The appropriate recourse is to file an invoked the defense of forum non conveniens.50 On
However, the Court cannot extend the same liberal answer and to interpose as defenses the objections petition for review before this Court, petitioners
treatment to the defect in the verification and raised in the motion, to proceed to trial, and, in case dropped their other arguments, maintained the
certification. As respondent pointed out, and to which of an adverse decision, to elevate the entire case by forum non conveniens defense, and introduced their
we agree, Hasegawa is truly not authorized to act on appeal in due course.44 While there are recognized new argument that the applicable principle is the
behalf of Nippon in this case. The aforesaid exceptions to this rule,45 petitioners' case does not fall [state of the] most significant relationship rule.51
September 4, 2000 Authorization and even the among them. Be that as it may, this Court is not inclined to deny
subsequent August 17, 2001 Authorization were This brings us to the discussion of the substantive this petition merely on the basis of the change in
issued only by Nippon's president and chief executive issue of the case. theory, as explained in Philippine Ports Authority v.
officer, not by the company's board of directors. In Asserting that the RTC of Lipa City is an inconvenient City of Iloilo.52 We only pointed out petitioners'
not a few cases, we have ruled that corporate powers forum, petitioners question its jurisdiction to hear inconstancy in their arguments to emphasize their
are exercised by the board of directors; thus, no and resolve the civil case for specific performance and incorrect assertion of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts the subject of the litigation. 57 In assailing the trial contract is made.64 The doctrine of lex contractus or
problems, three consecutive phases are involved: court's jurisdiction herein, petitioners are actually lex loci contractus means the "law of the place where
jurisdiction, choice of law, and recognition and referring to subject matter jurisdiction. a contract is executed or to be performed."65 It
enforcement of judgments. Corresponding to these Jurisdiction over the subject matter in a judicial controls the nature, construction, and validity of the
phases are the following questions: (1) Where can or proceeding is conferred by the sovereign authority contract66 and it may pertain to the law voluntarily
should litigation be initiated? (2) Which law will the which establishes and organizes the court. It is given agreed upon by the parties or the law intended by
court apply? and (3) Where can the resulting only by law and in the manner prescribed by law. 58 It them either expressly or implicitly.67 Under the "state
judgment be enforced?53 is further determined by the allegations of the of the most significant relationship rule," to ascertain
Analytically, jurisdiction and choice of law are two complaint irrespective of whether the plaintiff is what state law to apply to a dispute, the court should
distinct concepts.54 Jurisdiction considers whether it is entitled to all or some of the claims asserted determine which state has the most substantial
fair to cause a defendant to travel to this state; choice therein.59 To succeed in its motion for the dismissal of connection to the occurrence and the parties. In a
of law asks the further question whether the an action for lack of jurisdiction over the subject case involving a contract, the court should consider
application of a substantive law which will determine matter of the claim,60 the movant must show that the where the contract was made, was negotiated, was to
the merits of the case is fair to both parties. The court or tribunal cannot act on the matter submitted be performed, and the domicile, place of business, or
power to exercise jurisdiction does not automatically to it because no law grants it the power to adjudicate place of incorporation of the parties. 68 This rule takes
give a state constitutional authority to apply forum the claims.61 into account several contacts and evaluates them
law. While jurisdiction and the choice of the lex fori In the instant case, petitioners, in their motion to according to their relative importance with respect to
will often coincide, the "minimum contacts" for one dismiss, do not claim that the trial court is not the particular issue to be resolved.69
do not always provide the necessary "significant properly vested by law with jurisdiction to hear the Since these three principles in conflict of laws make
contacts" for the other.55 The question of whether the subject controversy for, indeed, Civil Case No. 00- reference to the law applicable to a dispute, they are
law of a state can be applied to a transaction is 0264 for specific performance and damages is one rules proper for the second phase, the choice of law. 70
different from the question of whether the courts of not capable of pecuniary estimation and is properly They determine which state's law is to be applied in
that state have jurisdiction to enter a judgment.56 cognizable by the RTC of Lipa City. 62 What they rather resolving the substantive issues of a conflicts
In this case, only the first phase is at issue— raise as grounds to question subject matter problem.71 Necessarily, as the only issue in this case is
jurisdiction.1âwphi1 Jurisdiction, however, has jurisdiction are the principles of lex loci celebrationis that of jurisdiction, choice-of-law rules are not only
various aspects. For a court to validly exercise its and lex contractus, and the "state of the most inapplicable but also not yet called for.
power to adjudicate a controversy, it must have significant relationship rule." Further, petitioners' premature invocation of choice-
jurisdiction over the plaintiff or the petitioner, over The Court finds the invocation of these grounds of-law rules is exposed by the fact that they have not
the defendant or the respondent, over the subject unsound. yet pointed out any conflict between the laws of
matter, over the issues of the case and, in cases Lex loci celebrationis relates to the "law of the place Japan and ours. Before determining which law should
involving property, over the res or the thing which is of the ceremony"63 or the law of the place where a apply, first there should exist a conflict of laws
situation requiring the application of the conflict of Third, the propriety of dismissing a case based on this application for the issuance of a temporary
laws rules.72 Also, when the law of a foreign country is principle requires a factual determination; hence, this restraining order and/or writ of preliminary injunction
invoked to provide the proper rules for the solution of conflicts principle is more properly considered a under Rule 45 of the 1997 Rules of Civil Procedure
a case, the existence of such law must be pleaded and matter of defense.79 praying that judgment be rendered reversing and
proved.73 Accordingly, since the RTC is vested by law with the setting aside the June 16, 2011 Decision 1 and
It should be noted that when a conflicts case, one power to entertain and hear the civil case filed by September 13, 2011 Resolution2 of the Court of
involving a foreign element, is brought before a court respondent and the grounds raised by petitioners to Appeals in CA-G.R. SP. No. 113006.
or administrative agency, there are three alternatives assail that jurisdiction are inappropriate, the trial and
open to the latter in disposing of it: (1) dismiss the appellate courts correctly denied the petitioners’ Petitioner Saudi Arabian Airlines (Saudia) is a foreign
case, either because of lack of jurisdiction or refusal motion to dismiss. corporation established and existing under the laws
to assume jurisdiction over the case; (2) assume WHEREFORE, premises considered, the petition for of Jeddah, Kingdom of Saudi Arabia. It has a
jurisdiction over the case and apply the internal law review on certiorari is DENIED. Philippine office located at 4/F, Metro House Building,
of the forum; or (3) assume jurisdiction over the case SO ORDERED. Sen. Gil J. Puyat Avenue, Makati City. 3 In its Petition
and take into account or apply the law of some other ANTONIO EDUARDO B. NACHURA filed with this court, Saudia identified itself as
State or States.74 The court’s power to hear cases and Associate Justice follows:chanroblesvirtuallawlibrary
controversies is derived from the Constitution and 1. Petitioner SAUDIA is a foreign corporation
the laws. While it may choose to recognize laws of 2) Saudi Arabian Airlines vs. Rebesemcio et. al. established and existing under the Royal Decree No.
foreign nations, the court is not limited by foreign January 14, 2015, M/24 of 18.07.1385H (10.02.1962G) in Jeddah,
sovereign law short of treaties or other formal Kingdom of Saudi Arabia ("KSA"). Its Philippine Office
agreements, even in matters regarding rights G.R. No. 198587, January 14, 2015 is located at 4/F Metro House Building, Sen, Gil J.
provided by foreign sovereigns.75 SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. Puyat Avenue, Makati City (Philippine Office). It may
Neither can the other ground raised, forum non BETIA, Petitioners, v. MA. JOPETTE M. REBESENCIO, be served with orders of this Honorable Court
conveniens,76 be used to deprive the trial court of its MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A. through undersigned counsel at 4th and 6th Floors,
jurisdiction herein. First, it is not a proper basis for a CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ, Citibank Center Bldg., 8741 Paseo de Roxas, Makati
motion to dismiss because Section 1, Rule 16 of the Respondents. City.4 (Emphasis supplied)
Rules of Court does not include it as a ground. 77 DECISION Respondents (complainants before the Labor Arbiter)
Second, whether a suit should be entertained or LEONEN, J.: were recruited and hired by Saudia as Temporary
dismissed on the basis of the said doctrine depends All Filipinos are entitled to the protection of the rights Flight Attendants with the accreditation and approval
largely upon the facts of the particular case and is guaranteed in the Constitution. of the Philippine Overseas Employment
addressed to the sound discretion of the trial court. 78 5
Administration. After undergoing seminars required
In this case, the RTC decided to assume jurisdiction. This is a Petition for Review on Certiorari with by the Philippine Overseas Employment
Administration for deployment overseas, as well as Saudia would terminate them all the same. The threat becomes pregnant at any time during the term of
training modules offered by Saudia (e.g., initial flight of termination entailed the loss of benefits, such as this contract, this shall render her employment
attendant/training course and transition training), separation pay and ticket discount entitlements. 12 contract as void and she will be terminated due to
and after working as Temporary Flight Attendants, lack of medical fitness.18 (Emphasis supplied)
respondents became Permanent Flight Attendants. Specifically, Ma. Jopette received a call on October In their Comment on the present Petition, 19
They then entered into Cabin Attendant contracts 16, 2006 from Saudia's Base Manager, Abdulmalik respondents emphasized that the Unified Contract
with Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) Saddik (Abdulmalik).13 Montassah was informed took effect on September 23, 2006 (the first day of
on May 16, 1990;6 Montassah B. Sacar-Adiong personally by Abdulmalik and a certain Faisal Hussein Ramadan),20 well after they had filed and had their
(Montassah) and Rouen Ruth A. Cristobal (Rouen on October 20, 2006 after being required to report to maternity leaves approved. Ma. Jopette filed her
Ruth) on May 22, 1993;7 and Loraine Schneider-Cruz the office one (1) month into her maternity leave. 14 maternity leave application on September 5, 2006. 21
(Loraine) on August 27, 1995. 8 Rouen Ruth was also personally informed by Montassah filed her maternity leave application on
Abdulmalik on October 17, 2006 after being required August 29, 2006, and its approval was already
Respondents continued their employment with to report to the office by her Group Supervisor. 15 indicated in Saudia's computer system by August 30,
Saudia until they were separated from service on Loraine received a call on October 12, 2006 from her 2006.22 Rouen Ruth filed her maternity leave
various dates in 2006.9 Group Supervisor, Dakila Salvador.16 application on September 13, 2006, 23 and Loraine
filed her maternity leave application on August 22,
Respondents contended that the termination of their Saudia anchored its disapproval of respondents' 2006.24
employment was illegal. They alleged that the maternity leaves and demand for their resignation on
termination was made solely because they were its "Unified Employment Contract for Female Cabin Rather than comply and tender resignation letters,
pregnant.10 Attendants" (Unified Contract).17 Under the Unified respondents filed separate appeal letters that were
Contract, the employment of a Flight Attendant who all rejected.25
As respondents alleged, they had informed Saudia of becomes pregnant is rendered void. It
their respective pregnancies and had gone through provides:chanroblesvirtuallawlibrary Despite these initial rejections, respondents each
the necessary procedures to process their maternity (H) Due to the essential nature of the Air Hostess received calls on the morning of November 6, 2006
leaves. Initially, Saudia had given its approval but functions to be physically fit on board to provide from Saudia's office secretary informing them that
later on informed respondents that its management various services required in normal or emergency their maternity leaves had been approved. Saudia,
in Jeddah, Saudi Arabia had disapproved their cases on both domestic/international flights beside however, was quick to renege on its approval. On the
maternity leaves. In addition, it required respondents her role in maintaining continuous safety and security evening of November 6, 2006, respondents again
to file their resignation letters.11 of passengers, and since she will not be able to received calls informing them that it had received
maintain the required medical fitness while at work in notification from Jeddah, Saudi Arabia that their
Respondents were told that if they did not resign, case of pregnancy, accordingly, if the Air Hostess maternity leaves had been disapproved. 26
 dismissing respondents' Complaint. The dispositive and SET ASIDE. Attached is the computation prepared
Faced with the dilemma of resigning or totally losing portion of this Decision by this Commission and made an integral part of this
their benefits, respondents executed handwritten reads:chanroblesvirtuallawlibrary Decision.37cralawlawlibrary
resignation letters. In Montassah's and Rouen Ruth's WHEREFORE, premises' considered, judgment is In the Resolution dated February 11, 2010, 38 the
cases, their resignations were executed on Saudia's hereby rendered DISMISSING the instant complaint National Labor Relations Commission denied
blank letterheads that Saudia had provided. These for lack of jurisdiction/merit.33cralawlawlibrary petitioners' Motion for Reconsideration.
letterheads already had the word "RESIGNATION" On respondents' appeal, the National Labor Relations
typed on the subject portions of their headings when Commission's Sixth Division reversed the ruling of In the June 16, 2011 Decision,39 the Court of Appeals
these were handed to respondents.27 Executive Labor Arbiter Jambaro-Franco. It explained denied petitioners' Rule 65 Petition and modified the
that "[considering that complainants-appellants are Decision of the National Labor Relations Commission
On November 8, 2007, respondents filed a Complaint OFWs, the Labor Arbiters and the NLRC has [sic] with respect to the award of separation pay and
against Saudia and its officers for illegal dismissal and jurisdiction to hear and decide their complaint for backwages.
for underpayment of salary, overtime pay, premium illegal termination."34 On the matter of forum non
pay for holiday, rest day, premium, service incentive conveniens, it noted that there were no special The dispositive portion of the Court of Appeals
leave pay, 13th month pay, separation pay, night shift circumstances that warranted its abstention from Decision reads:chanroblesvirtuallawlibrary
differentials, medical expense reimbursements, exercising jurisdiction.35 On the issue of whether WHEREFORE, the instant petition is hereby DENIED.
retirement benefits, illegal deduction, lay-over respondents were validly dismissed, it held that there The Decision dated November 19, 2009 issued by
expense and allowances, moral and exemplary was nothing on record to support Saudia's claim that public respondent, Sixth Division of the National
damages, and attorney's fees.28 The case was initially respondents resigned voluntarily. Labor Relations Commission - National Capital Region
assigned to Labor Arbiter Hermino V. Suelo and is MODIFIED only insofar as the computation of the
docketed as NLRC NCR Case No. 00-11-12342-07. The dispositive portion of the November 19, 2009 award of separation pay and backwages. For greater
National Labor Relations Commission Decision 36 clarity, petitioners are ordered to pay private
Saudia assailed the jurisdiction of the Labor Arbiter. 29 reads:chanroblesvirtuallawlibrary respondents separation pay which shall be computed
It claimed that all the determining points of contact WHEREFORE, premises considered, judgment is from private respondents' first day of employment up
referred to foreign law and insisted that the hereby rendered finding the appeal impressed with to the finality of this decision, at the rate of one
Complaint ought to be dismissed on the ground of merit. The respondents-appellees are hereby directed month per year of service and backwages which shall
forum non conveniens.30 It added that respondents to pay complainants-appellants the aggregate be computed from the date the private respondents
had no cause of action as they resigned voluntarily. 31 amount of SR614,001.24 corresponding to their were illegally terminated until finality of this decision.
backwages and separation pay plus ten (10%) percent Consequently, the ten percent (10%) attorney's fees
On December 12, 2008, Executive Labor Arbiter thereof as attorney's fees. The decision of the Labor shall be based on the total amount of the award. The
Fatima Jambaro-Franco rendered the Decision 32 Arbiter dated December 12, 2008 is hereby VACATED assailed Decision is affirmed in all other respects.
 National Labor Relations Commission had no submitted to the Labor Arbiter,47 what Saudia now
The labor arbiter is hereby DIRECTED to make a jurisdiction over it because summons were never refers to as "Saudia Jeddah" was then only referred to
recomputation based on the served on it but on "Saudia Manila." 43 Referring to as "Saudia Head Office at Jeddah, KSA," 48 while what
foregoing.40cralawlawlibrary itself as "Saudia Jeddah," it claims that "Saudia Saudia now refers to as "Saudia Manila" was then
In the Resolution dated September 13, 2011, 41 the Jeddah" and not "Saudia Manila" was the employer of only referred to as "Saudia's office in Manila." 49
Court of Appeals denied petitioners' Motion for respondents because:
Reconsideration. By its own admission, Saudia, while a foreign
First, "Saudia Manila" was never a party to the Cabin corporation, has a Philippine office.
Hence, this Appeal was filed. Attendant contracts entered into by respondents;
Section 3(d) of Republic Act No.. 7042, otherwise
The issues for resolution are the following: Second, it was "Saudia Jeddah" that provided the known as the Foreign Investments Act of 1991,
funds to pay for respondents' salaries and benefits; provides the following:chanroblesvirtuallawlibrary
First, whether the Labor Arbiter and the National and The phrase "doing business" shall include . . .
Labor Relations Commission may exercise jurisdiction opening offices, whether called "liaison" offices or
over Saudi Arabian Airlines and apply Philippine law Lastly, it was with "Saudia Jeddah" that respondents branches; . . . and any other act or acts that imply a
in adjudicating the present dispute; filed their resignations.44 continuity of commercial dealings or arrangements
and contemplate to that extent the performance of
Second, whether respondents' voluntarily resigned or Saudia posits that respondents' Complaint was acts or works, or the exercise of some of the
were illegally terminated; and brought against the wrong party because "Saudia functions normally incident to, and in progressive
Manila," upon which summons was served, was never prosecution of commercial gain or of the purpose and
Lastly, whether Brenda J. Betia may be held the employer of respondents.45 object of the business organization. (Emphasis
personally liable along with Saudi Arabian supplied)
Airlines.chanRoblesvirtualLawlibrary Saudia is vainly splitting hairs in its effort to absolve A plain application of Section 3(d) of the Foreign
I itself of liability. Other than its bare allegation, there Investments Act leads to no other conclusion than
is no basis for concluding that "Saudia Jeddah" is that Saudia is a foreign corporation doing business in
Summons were validly served on Saudia and distinct from "Saudia Manila." the Philippines. As such, Saudia may be sued in the
jurisdiction over it validly acquired. Philippines and is subject to the jurisdiction of
What is clear is Saudia's statement in its own Petition Philippine tribunals.
There is no doubt that the pleadings and summons that what it has is a "Philippine Office . . . located at
were served on Saudia through its counsel. 42 Saudia, 4/F Metro House Building, Sen. Gil J. Puyat Avenue, Moreover, since there is no real distinction between
however, claims that the Labor Arbiter and the Makati City."46 Even in the position paper that Saudia "Saudia Jeddah" and "Saudia Manila" — the latter
being nothing more than Saudia's local office — contrary to law, morals, good customs, public order, the merits of the case is fair to both parties. The
service of summons to Saudia's office in Manila or public policy. power to exercise jurisdiction does not automatically
sufficed to vest jurisdiction over Saudia's person in In contrast, forum non conveniens is a device akin to give a state constitutional authority to apply forum
Philippine tribunals.chanRoblesvirtualLawlibrary the rule against forum shopping. It is designed to law. While jurisdiction and the choice of the lex fori
II frustrate illicit means for securing advantages and will often, coincide, the "minimum contacts" for one
vexing litigants that would otherwise be possible if do not always provide the necessary "significant
Saudia asserts that Philippine courts and/or tribunals the venue of litigation (or dispute resolution) were contacts" for the other. The question of whether the
are not in a position to make an intelligent decision as left entirely to the whim of either party. law of a state can be applied to a transaction is
to the law and the facts. This is because respondents' different from the question of whether the courts of
Cabin Attendant contracts require the application of Contractual choice of law provisions factor into that state have jurisdiction to enter a
the laws of Saudi Arabia, rather than those of the transnational litigation and dispute resolution in one judgment.53cralawlawlibrary
Philippines.50 It claims that the difficulty of of or in a combination of four ways: (1) procedures As various dealings, commercial or otherwise, are
ascertaining foreign law calls into operation the for settling disputes, e.g., arbitration; (2) forum, i.e., facilitated by the progressive ease of communication
principle of forum non conveniens, thereby rendering venue; (3) governing law; and (4) basis for and travel, persons from various jurisdictions find
improper the exercise of jurisdiction by Philippine interpretation. Forum non conveniens relates to, but themselves transacting with each other. Contracts
tribunals.51 is not subsumed by, the second of these. involving foreign elements are, however, nothing
new. Conflict of laws situations precipitated by
A choice of law governing the validity of contracts or Likewise, contractual choice of law is not disputes and litigation anchored on these contracts
the interpretation of its provisions does not determinative of jurisdiction. Stipulating on the laws are not totally novel.
necessarily imply forum non conveniens. Choice of of a given jurisdiction as the governing law of a
law and forum non conveniens are entirely different contract does not preclude the exercise of jurisdiction Transnational transactions entail differing laws on the
matters. by tribunals elsewhere. The reverse is equally true: requirements Q for the validity of the formalities and
The assumption of jurisdiction by tribunals does not substantive provisions of contracts and their
Choice of law provisions are an offshoot of the ipso facto mean that it cannot apply and rule on the interpretation. These transactions inevitably lend
fundamental principle of autonomy of contracts. basis of the parties' stipulation. In Hasegawa v. themselves to the possibility of various fora for
Article 1306 of the Civil Code firmly ensconces Kitamura:52ChanRoblesVirtualawlibrary litigation and dispute resolution. As observed by an
this:chanroblesvirtuallawlibrary Analytically, jurisdiction and choice of law are two eminent expert on transnational
Article 1306. The contracting parties may establish distinct concepts. Jurisdiction considers whether it is law:chanroblesvirtuallawlibrary
such stipulations, clauses, terms and conditions as fair to cause a defendant to travel to this state; choice The more jurisdictions having an interest in, or merely
they may deem convenient, provided they are not of law asks the further question whether the even a point of contact with, a transaction or
application of a substantive law which will determine relationship, the greater the number of potential fora
for the resolution of disputes arising out of or related same civil law traditions from which we draw ours. exercising jurisdiction.
to that transaction or relationship. In a world of
increased mobility, where business and personal In this jurisdiction, this court, in Philippine Export and As mentioned, contractual choice of laws factors into
transactions transcend national boundaries, the Foreign Loan Guarantee v. V.P. Eusebio Construction, transnational litigation in any or a combination of
jurisdiction of a number of different fora may easily Inc.,58 manifested preference for allowing the parties four (4) ways. Moreover, forum non conveniens
be invoked in a single or a set of related to select the law applicable to their relates to one of these: choosing between multiple
disputes.54cralawlawlibrary contract":chanroblesvirtuallawlibrary possible fora.
Philippine law is definite as to what governs the No conflicts rule on essential validity of contracts is
formal or extrinsic validity of contracts. The first expressly provided for in our laws. The rule followed Nevertheless, the possibility of parallel litigation in
paragraph of Article 17 of the Civil Code provides that by most legal systems, however, is that the intrinsic multiple fora — along with the host of difficulties it
"[t]he forms and solemnities of contracts . . . shall be validity of a contract must be governed by the lex poses — is not unique to transnational litigation. It is
governed by the laws of the country in which they are contractus or "proper law of the contract." This is the a difficulty that similarly arises in disputes well within
executed"55 (i.e., lex loci celebrationis). law voluntarily agreed upon by the parties (the lex the bounds of a singe jurisdiction.
loci voluntatis) or the law intended by them either
In contrast, there is no statutorily established mode expressly or implicitly (the lex loci intentionis). The When parallel litigation arises strictly within the
of settling conflict of laws situations on matters law selected may be implied from such factors as context of a single jurisdiction, such rules as those on
pertaining to substantive content of contracts. It has substantial connection with the transaction, or the forum shopping, litis pendentia, and res judicata
been noted that three (3) modes have emerged: (1) nationality or domicile of the parties. Philippine come into operation. Thus, in the Philippines, the
lex loci contractus or the law of the place of the courts would do well to adopt the first and most basic 1997 Rules on Civil Procedure provide for willful and
making; (2) lex loci solutionis or the law of the place rule in most legal systems, namely, to allow the deliberate forum shopping as a ground not only for
of performance; and (3) lex loci intentionis or the law parties to select the law applicable to their contract, summary dismissal with prejudice but also for citing
intended by the parties.56 subject to the limitation that it is not against the law, parties and counsels in direct contempt, as well as for
morals, or public policy of the forum and that the the imposition of administrative sanctions. 60 Likewise,
Given Saudia's assertions, of particular relevance to chosen law must bear a substantive relationship to the same rules expressly provide that a party may
resolving the present dispute is lex loci intentionis. the transaction.59 (Emphasis in the original) seek the dismissal of a Complaint or another pleading
Saudia asserts that stipulations set in the Cabin asserting a claim on the ground "[t]hat there is
An author observed that Spanish jurists and Attendant contracts require the application of the another action pending between the same parties for
commentators "favor lex loci intentionis."57 These laws of Saudi Arabia. It insists that the need to comply the same cause," i.e., litis pendentia, or "[t]hat the
jurists and commentators proceed from the Civil Code with these stipulations calls into operation the cause of action is barred by a prior judgment," 61 i.e.,
of Spain, which, like our Civil Code, is silent on what doctrine of forum non conveniens and, in turn, makes res judicata.
governs the intrinsic validity of contracts, and the it necessary for Philippine tribunals to refrain from
Forum non conveniens, like the rules of forum address parallel litigation and undermine a litigant's to waste its efforts on affairs, which, given
shopping, litis pendentia, and res judicata, is a means capacity to vex and secure undue advantages by transnational exigencies, will be reduced to mere
of addressing the problem of parallel litigation. While engaging in forum shopping on an international scale. academic, if not trivial, exercises.
the rules of forum shopping, litis pendentia, and res It is also grounded on principles of comity and judicial
judicata are designed to address the problem of efficiency. Accordingly, under the doctrine of forum non
parallel litigation within a single jurisdiction, forum conveniens, "a court, in conflicts of law cases, may
non conveniens is a means devised to address parallel Consistent with the principle of comity, a tribunal's refuse impositions on its jurisdiction where it is not
litigation arising in multiple jurisdictions. desistance in exercising jurisdiction on account of the most 'convenient' or available forum and the
forum non conveniens is a deferential gesture to the parties are not precluded from seeking remedies
Forum non conveniens literally translates to "the tribunals of another sovereign. It is a measure that elsewhere."67 In Puyat v. Zabarte,68 this court
forum is inconvenient."62 It is a concept in private prevents the former's having to interfere in affairs recognized the following situations as among those
international law and was devised to combat the "less which are better and more competently addressed by that may warrant a court's desistance from exercising
than honorable" reasons and excuses that litigants the latter. Further, forum non conveniens entails a jurisdiction:chanroblesvirtuallawlibrary
use to secure procedural advantages, annoy and recognition not only that tribunals elsewhere are 1) The belief that the matter can be better tried and
harass defendants, avoid overcrowded dockets, and better suited to rule on and resolve a controversy, but decided elsewhere, either because the main
select a "friendlier" venue.63 Thus, the doctrine of also, that these tribunals are better positioned to aspects of the case transpired in a foreign
forum non conveniens addresses the same rationale enforce judgments and, ultimately, to dispense jurisdiction or the material witnesses have their
that the rule against forum shopping does, albeit on a justice. Forum non conveniens prevents the residence there;
multijurisdictional scale. embarrassment of an awkward situation where a 2) The belief that the non-resident plaintiff sought
tribunal is rendered incompetent in the face of the the forum[,] a practice known as forum shopping[,]
Forum non conveniens, like res judicata,64 is a concept greater capability — both analytical and practical — merely to secure procedural advantages or to
originating in common law.65 However, unlike the rule of a tribunal in another jurisdiction. convey or harass the defendant;
on res judicata, as well as those on litis pendentia and 3) The unwillingness to extend local judicial facilities
forum shopping, forum non conveniens finds no The wisdom of avoiding conflicting and unenforceable to non residents or aliens when the docket may
textual anchor, whether in statute or in procedural judgments is as much a matter of efficiency and already be overcrowded;
rules, in our civil law system. Nevertheless, economy as it is a matter of international courtesy. A 4) The inadequacy of the local judicial machinery for
jurisprudence has applied forum non conveniens as court would effectively be neutering itself if it insists effectuating the right sought to be maintained; and
basis for a court to decline its exercise of on adjudicating a controversy when it knows full well 5) The difficulty of ascertaining foreign law.69
jurisdiction.66 that it is in no position to enforce its judgment. Doing In Bank of America, NT&SA, Bank of America
so is not only an exercise in futility; it is an act of International, Ltd. v. Court of Appeals,70 this court
Forum non conveniens is soundly applied not only to frivolity. It clogs the dockets of a.tribunal and leaves it underscored that a Philippine court may properly
assume jurisdiction over a case if it chooses to do so earliest possible opportunity. better resolved elsewhere. As has been
to the extent: "(1) that the Philippine Court is one to noted:chanroblesvirtuallawlibrary
which the parties may conveniently resort to; (2) that On the matter of pleading forum non conveniens, we A case will not be stayed o dismissed on [forum] non
the Philippine Court is in a position to make an state the rule, thus: Forum non conveniens must not conveniens grounds unless the plaintiff is shown to
intelligent decision as to the law and the facts; and (3) only be clearly pleaded as a ground for dismissal; it have an available alternative forum elsewhere. On
that the Philippine Court has or is likely to have must be pleaded as such at the earliest possible this, the moving party bears the burden of proof.
power to enforce its decision."71 opportunity. Otherwise, it shall be deemed waived.
A number of factors affect the assessment of an
76
The use of the word "may" (i.e., "may refuse This court notes that in Hasegawa, this court stated alternative forum's adequacy. The statute of
impositions on its jurisdiction" 72) in the decisions that forum non conveniens is not a ground for a limitations abroad may have run, of the foreign court
shows that the matter of jurisdiction rests on the motion to dismiss. The factual ambience of this case may lack either subject matter or personal jurisdiction
sound discretion of a court. Neither the mere however does not squarely raise the viability of this over the defendant. . . . Occasionally, doubts will be
invocation of forum non conveniens nor the averment doctrine. Until the opportunity comes to review the raised as to the integrity or impartiality of the foreign
of foreign elements operates to automatically divest a use of motions to dismiss for parallel litigation, court (based, for example, on suspicions of corruption
court of jurisdiction. Rather, a court should renounce Hasegawa remains existing doctrine. or bias in favor of local nationals), as to the fairness of
jurisdiction only "after 'vital facts are established, to its judicial procedures, or as to is operational
determine whether special circumstances' require the Consistent with forum non conveniens as efficiency (due, for example, to lack of resources,
court's desistance."73 As the propriety of applying fundamentally a factual matter, it is imperative that it congestion and delay, or interfering circumstances
forum non conveniens is contingent on a factual proceed from & factually established basis. It would such as a civil unrest). In one noted case, [it was
determination, it is, therefore, a matter of defense.74 be improper to dismiss an action pursuant to forum found] that delays of 'up to a quarter of a century'
non conveniens based merely on a perceived, likely, rendered the foreign forum... inadequate for these
The second sentence of Rule 9, Section 1 of the 1997 or hypothetical multiplicity of fora. Thus, a defendant purposes.77cralawlawlibrary
Rules of Civil Procedure is exclusive in its recital of the must also plead and show that a prior suit has, in We deem it more appropriate and in the greater
grounds for dismissal that are exempt from the fact, been brought in another jurisdiction. interest of prudence that a defendant not only allege
omnibus motion rule: (1) lack of jurisdiction over the supposed dangerous tendencies in litigating in this
subject matter; (2) litis pendentia; (3) res judicata; The existence of a prior suit makes real the vexation jurisdiction; the defendant must also show that such
and (4) prescription. Moreover, dismissal on account engendered by duplicitous litigation, the danger is real and present in that litigation or dispute
offorum non conveniens is a fundamentally embarrassment of intruding into the affairs of resolution has commenced in another jurisdiction and
discretionary matter. It is, therefore, not a matter for another sovereign, and the squandering of judicial that a foreign tribunal has chosen to exercise
a defendant to foist upon the court at his or her own efforts in resolving a dispute already lodged and jurisdiction.
convenience; rather, it must be pleaded at the III
 inhering in a dispute weighs more heavily. their transaction may have to either jurisdiction. In
Forum non conveniens finds no application and does this respect, factors, such as the parties' respective
not operate to divest Philippine tribunals of The first is a pragmatic matter. It relates to the nationalities and places of negotiation, execution,
jurisdiction and to require the application of foreign viability of ceding jurisdiction to a foreign tribunal and performance, engagement or deployment, come into
law. can be resolved by juxtaposing the competencies and play.
practical circumstances of the tribunals in alternative
Saudia invokes forum non conveniens to supposedly fora. Exigencies, like the statute of limitations, In considering public interest, a court proceeds with a
effectuate the stipulations of the Cabin Attendant capacity to enforce orders and judgments, access to consciousness that it is an organ of the state. It must,
contracts that require the application of the laws of records, requirements for the acquisition of thus, determine if the interests of the sovereign
Saudi Arabia. jurisdiction, and even questions relating to the (which acts through it) are outweighed by those of
integrity of foreign courts, may render undesirable or the alternative jurisdiction. In this respect, the court
Forum non conveniens relates to forum, not to the even totally unfeasible recourse to a foreign court. As delves into a consideration of public policy. Should it
choice of governing law. Thai forum non conveniens mentioned, we consider it in the greater interest of find that public interest weighs more heavily in favor
may ultimately result in the application of foreign law prudence that a defendant show, in pleading forum of its assumption of jurisdiction, it should proceed in
is merely an incident of its application. In this strict non conveniens, that litigation has commenced in adjudicating the dispute, any doubt or .contrary view
sense, forum non conveniens is not applicable. It is another jurisdiction and that a foieign tribunal has, in arising from the preponderance of linkages
not the primarily pivotal consideration in this case. fact, chosen to exercise jurisdiction. notwithstanding.

In any case, even a further consideration of the Two (2) factors weigh into a court's appraisal of the Our law on contracts recognizes the validity of
applicability of forum non conveniens on the balance of interests inhering in a dispute: first, the contractual choice of law provisions. Where such
incidental matter of the law governing respondents' vinculum which the parties and their relation have to provisions exist, Philippine tribunals, acting as the
relation with Saudia leads to the conclusion that it is a given jurisdiction; and second, the public interest forum court, generally defer to the parties'
improper for Philippine tribunals to divest themselves that must animate a tribunal, in its capacity as an articulated choice.
of jurisdiction. agent of the sovereign, in choosing to assume or
decline jurisdiction. The first is more concerned with This is consistent with the fundamental principle of
Any evaluation of the propriety of contracting parties' the parties, their personal circumstances, and private autonomy of contracts. Article 1306 of the Civ:l Code
choice of a forum and'its incidents must grapple with interests; the second concerns itself with the state expressly provides that "[t]he contracting parties may
two (2) considerations: first, the availability and and the greater social order. establish 'such stipulations, clauses, terms and
adequacy of recourse to a foreign tribunal; and conditions as they may deem convenient."78
second, the question of where, as between the forum In considering the vinculum, a court must look into Nevertheless, while a Philippine tribunal (acting as
court and a foreign court, the balance of interests the preponderance of linkages which the parties and the forum court) is called upon to respect the parties'
choice of governing law, such respect must not be so averments there may be of foreign law — must
permissive as to lose sight of considerations of law, The Convention on the Elimination of all Forms of proceed from this premise.
morals, good customs, public order, or public policy Discrimination against Women (CEDAW), signed and
that underlie the contract central to the controversy. ratified by the Philippines on July 15, 1980, and on So informed and animated, we emphasize the
August 5, 1981, respectively,81 is part of the law of the glaringly discriminatory nature of Saudia's policy. As
Specifically with respect to public policy, in Pakistan land. In view of the widespread signing and argued by respondents, Saudia's policy entails the
International Airlines Corporation v. Ople,79 this court ratification of, as well as adherence (in practice) to it termination of employment of flight attendants who
explained that:chanroblesvirtuallawlibrary by states, it may even be said that many provisions of become pregnant. At the risk of stating the obvious,
counter-balancing the principle of autonomy of the CEDAW may have become customary pregnancy is an occurrence that pertains specifically
contracting parties is the equally general rule that international law. The CEDAW gives effect to the to women. Saudia's policy excludes from and restricts
provisions of applicable law, especially provisions Constitution's policy statement in Article II, Section employment on the basis of no other consideration
relating to matters affected with public policy, are 14. Article I of the CEDAW defines "discrimination but sex.
deemed written inta the contract. Put a little against women" as:chanroblesvirtuallawlibrary
differently, the governing principle is that parties may any distinction, exclusion or restriction made on the We do not lose sight of the reality that pregnancy
not contract away applicable provisions of law basis of sex which has the effect or purpose of does present physical limitations that may render
especially peremptory provisions dealing with matters impairing or nullifying the recognition, enjoyment or difficult the performance of functions associated with
heavily impressed with public interest.80 (Emphasis exercise by women, irrespective of their marital being a flight attendant. Nevertheless, it would be the
supplied) status, on a basis of equality of men and women, of height of iniquity to view pregnancy as a disability so
Article II, Section 14 of the 1987 Constitution provides human rights and fundamental freedoms in the permanent and immutable that, it must entail the
that "[t]he State ... shall ensure the fundamental political, economic, social, cultural, civil or any other termination of one's employment. It is clear to us that
equality before the law of women and men." field.82cralawlawlibrary any individual, regardless of gender, may be subject
Contrasted with Article II, Section 1 of the 1987 The constitutional exhortation to ensure fundamental to exigencies that limit the performance of functions.
Constitution's statement that "[n]o person shall ... be equality, as illumined by its enabling law, the CEDAW, However, we fail to appreciate how pregnancy could
denied the equal protection of the laws," Article II, must inform and animate all the actions of all be such an impairing occurrence that it leaves no
Section 14 exhorts the State to "ensure." This does personalities acting on behalf of the State. It is, other recourse but the complete termination of the
not only mean that the Philippines shall not therefore, the bounden duty of this court, in means through which a woman earns a living.
countenance nor lend legal recognition and rendering judgment on the disputes brought before
approbation to measures that discriminate on the it, to ensure that no discrimination is heaped upon Apart from the constitutional policy on the
basis of one's being male or female. It imposes an women on the mere basis of their being women. This fundamental equality before the law of men and
obligation to actively engage in securing the is a point so basic and central that all our discussions women, it is settled that contracts relating to labor
fundamental equality of men and women. and pronouncements — regardless of whatever and employment are impressed with public interest.
Article 1700 of the Civil Code provides that "[t]he As the present dispute relates to (what the the Philippines.
relation between capital and labor are not merely respondents allege to be) the illegal termination of
contractual. They are so impressed with public respondents' employment, this case is immutably a In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court
interest that labor contracts must yield to the matter of public interest and public policy. Consistent found no reason to disturb the trial court's
common good." with clear pronouncements in law and jurisprudence, assumption of jurisdiction over a case in which, as
Philippine laws properly find application in and noted by the trial court, "it is more convenient to
Consistent with this, this court's pronouncements in govern this case. 'Moreover, as this premise for hear and decide the case in the Philippines because
Pakistan International Airlines Corporation83 are clear Saudia's insistence on the application forum non Todaro [the plaintiff] resides in the Philippines and
and unmistakable:chanroblesvirtuallawlibrary conveniens has been shattered, it follows that the contract allegedly breached involve[d]
Petitioner PIA cannot take refuge in paragraph 10 of Philippine tribunals may properly assume jurisdiction employment in the Philippines."88
its employment agreement which specifies, firstly, the over the present controversy. Philippine
law of Pakistan as the applicable law of the jurisprudence provides ample illustrations of when a In Pacific Consultants International Asia, Inc. v.
agreement, and, secondly, lays the venue for court's renunciation of jurisdiction on account of Schonfeld,89 this court held that the fact that the
settlement of any dispute arising out of or in forum non conveniens is proper or improper.' complainant in an illegal dismissal case was a
connection with the agreement "only [in] courts of Canadian citizen and a repatriate did not warrant the
Karachi, Pakistan". The first clause of paragraph 10 In Philsec Investment Corporation v. Court of application of forum non conveniens considering that:
cannot be invoked to prevent the application of Appeals,85 this court noted that the trial court failed (1) the Labor Code does not include forum non
Philippine labor laws and'regulations to the subject to consider that one of the plaintiffs was a domestic conveniens as a ground for the dismissal of a
matter of this case, i.e., the employer-employee corporation, that one of the defendants was a complaint for illegal dismissal; (2) the propriety of
relationship between petitioner PIA and private Filipino, and that it was the extinguishment of the dismissing a case based on forum non conveniens
respondents. We have already pointed out that the latter's debt that was the object of the transaction requires a factual determination; and (3) the
relationship is much affected with public interest and subject of the litigation. Thus, this court held, among requisites for assumption of jurisdiction as laid out in
that the otherwise applicable Philippine laws and others, that the trial court's refusal to assume Bank of America, NT&SA90 were all satisfied.
regulations cannot be rendered illusory by the parties jurisdiction was not justified by forum non conveniens
agreeing upon some other law to govern their and remanded the case to the trial court. In contrast, this court ruled in The Manila Hotel Corp.
relationship. . . . Under these circumstances, v. National Labor Relations Commission 91 that the
paragraph 10 of the employment agreement cannot In Raytheon International, Inc. v. Rouzie, Jr.,86 this National Labor Relations Q Commission was a
be given effect so as to oust Philippine agencies and court sustained the trial court's assumption of seriously inconvenient forum. In that case, private
courts of the jurisdiction vested upon them by jurisdiction considering that the trial court could respondent Marcelo G. Santos was working in the
Philippine law.84 (Emphasis supplied) properly enforce judgment on the petitioner which Sultanate of Oman when he received a letter from
was a foreign corporation licensed to do business in Palace Hotel recruiting him for employment in
Beijing, China. Santos accepted the offer. laws of China and was not even served with aliens."93 That Saudia has managed to bring the
Subsequently, however, he was released from summons. present controversy all the way to this court proves
employment supposedly due to business reverses this.
arising from political upheavals in China (i.e., the Contrary to Manila Hotel, the case now before us
Tiananmen Square incidents of 1989). Santos later does not entail a preponderance of linkages that Fourth, it cannot be said that the local judicial
filed a Complaint for illegal dismissal impleading favor a foreign jurisdiction. machinery is inadequate for effectuating the right
Palace Hotel's General Manager, Mr. Gerhard sought to be maintained. Summons was properly
Schmidt, the Manila Hotel International Company Ltd. Here, the circumstances of the parties and their served on Saudia and jurisdiction over its person was
(which was, responsible for training Palace Hotel's relation do not approximate the circumstances validly acquired.
personnel and staff), and the Manila Hotel enumerated in Puyat,92 which this court recognized as
Corporation (which owned 50% of Manila Hotel possibly justifying the desistance of Philippine Lastly, there is not even room for considering foreign
International Company Ltd.'s capital stock). tribunals from exercising jurisdiction. law. Philippine law properly governs the present
dispute.
In ruling against the National Labor Relations First, there is no basis for concluding that the case
Commission's exercise of jurisdiction, this court noted can be more conveniently tried elsewhere. As As the question of applicable law has been settled,
that the main aspects of the case transpired in two established earlier, Saudia is doing business in the the supposed difficulty of ascertaining foreign law
(2) foreign jurisdictions, Oman and China, and that Philippines. For their part, all four (4) respondents are (which requires the application of forum non
the case involved purely foreign elements. Filipino citizens maintaining residence in the conveniens) provides no insurmountable
Specifically, Santos was directly hired by a foreign Philippines and, apart from their previous inconvenience or special circumstance that will justify
employer through correspondence sent to Oman. employment with Saudia, have no other connection depriving Philippine tribunals of jurisdiction.
Also, the proper defendants were neither Philippine to the Kingdom of Saudi Arabia. It would even be to
nationals nor engaged in business in the Philippines, respondents' inconvenience if this case were to be Even if we were to assume, for the sake of discussion,
while the main witnesses were not residents of the tried elsewhere. that it is the laws of Saudi Arabia which should apply,
Philippines. Likewise, this court noted that the it does not follow that Philippine tribunals should
National Labor Relations Commission was in no Second, the records are bereft of any indication that refrain from exercising jurisdiction. To. recall our
position to conduct the following: first, determine the respondents filed their Complaint in an effort to pronouncements in Puyat,94 as well as in Bank of
law governing the employment contract, as it was engage in forum shopping or to vex and America, NT&SA,95 it is not so much the mere
entered into in foreign soil; second, determine the inconvenience Saudia. applicability of foreign law which calls into operation
facts, as Santos' employment was terminated in forum non conveniens. Rather, what justifies a court's
Beijing; and third, enforce its judgment, since Santos' Third, there is no indication of "unwillingness to desistance from exercising jurisdiction is "[t]he
employer, Palace Hotel, was incorporated under the extend local judicial facilities to non-residents or difficulty of ascertaining foreign law" 96 or the inability
of a "Philippine Court to make an intelligent decision material incidents transpired in this jurisdiction. Thus, As the intent to relinquish must concur with the overt
as to the law[.]"97 the parties may conveniently seek relief from act of relinquishment, the acts of the employee
Philippine tribunals. Second, Philippine tribunals are before and after the alleged resignation must be
Consistent with lex loci intentionis, to the extent that in a position to make an intelligent decision as to the considered in determining whether he or she, in fact,
it is proper and practicable (i.e., "to make an law and the facts. Third, Philippine tribunals are in a intended, to sever his or her employment.103
intelligent decision"98), Philippine tribunals may apply position to enforce their decisions. There is no (Emphasis supplied)
the foreign law selected by the parties. In fact, (albeit compelling basis for ceding jurisdiction to a foreign On the other hand, constructive dismissal has been
without meaning to make a pronouncement on the tribunal. Quite the contrary, the immense public defined as "cessation of work because 'continued
accuracy and reliability of respondents' citation) in policy considerations attendant to this case behoove employment is rendered impossible, unreasonable or
this case, respondents themselves have made Philippine tribunals to not shy away from their duty unlikely, as an offer involving a demotion in rank or a
averments as to the laws of Saudi Arabia. In their to rule on the case.chanRoblesvirtualLawlibrary diminution in pay' and other benefits." 104
Comment, respondents IV
write:chanroblesvirtuallawlibrary In Penaflor v. Outdoor Clothing Manufacturing
Under the Labor Laws of Saudi Arabia and the Respondents were illegally terminated. Corporation,105 constructive dismissal has been
Philippines[,] it is illegal and unlawful to terminate the described as tantamount to "involuntarily [sic]
employment of any woman by virtue of pregnancy. In Bilbao v. Saudi Arabian Airlines,101 this court resignation due to the harsh, hostile, and unfavorable
The law in Saudi Arabia is even more harsh and strict defined voluntary resignation as "the voluntary act of conditions set by the employer."106 In the same case,
[sic] in that no employer can terminate the an employee who is in a situation where one believes it was noted that "[t]he gauge for constructive
employment of a female worker or give her a warning that personal reasons cannot be sacrificed in favor of dismissal is whether a reasonable person in the
of the same while on Maternity Leave, the specific the exigency of the service, and one has no other employee's position would feel compelled to give up
provision of Saudi Labor Laws on the matter is hereto choice but to dissociate oneself from employment. It his employment under the prevailing
quoted as follows:chanroblesvirtuallawlibrary is a formal pronouncement or relinquishment of an circumstances."107
"An employer may not terminate the employment of office, with the intention of relinquishing the office
a female worker or give her a warning of the same accompanied by the act of relinquishment." 102 Thus, Applying the cited standards on resignation and
while on maternity leave." (Article 155, Labor Law of essential to the act of resignation is voluntariness. It constructive dismissal, it is clear that respondents
the Kingdom of Saudi Arabia, Royal Decree No. must be the result of an employee's exercise of his or were constructively dismissed. Hence, their
M/51.)99cralawlawlibrary her own will. termination was illegal.
All told, the considerations for assumption of
jurisdiction by Philippine tribunals as outlined in Bank In the same case of Bilbao, this court advanced a The termination of respondents' employment
of America, NT&SA100 have been satisfied. First, all the means for determining whether an employee happened when they were pregnant and expecting to
parties are based in the Philippines and all the resigned voluntarily:chanroblesvirtuallawlibrary incur costs on account of child delivery and infant
rearing. As noted by the Court of Appeals, pregnancy to give up his or her employment.
is a time when they need employment to sustain their As with respondent's resignation letters, their exit
families.108 Indeed, it goes against normal and Saudia draws attention to how respondents' interview forms even support their claim of illegal
reasonable human behavior to abandon one's resignation letters were supposedly made in their dismissal and militates against Saudia's arguments.
livelihood in a time of great financial need. own handwriting. This minutia fails to surmount all These exit interview forms, as reproduced by Saudia
the other indications negating any voluntariness on in its own Petition, confirms the unfavorable
It is clear that respondents intended to remain respondents' part. If at all, these same resignation conditions as regards respondents' maternity leaves.
employed with Saudia. All they did was avail of their letters are proof of how any supposed resignation did Ma. Jopette's and Loraine's exit interview forms are
maternity leaves. Evidently, the very nature of a not arise from respondents' own initiative. As earlier particularly telling:chanroblesvirtuallawlibrary
maternity leave means that a pregnant employee will pointed out, respondents' resignations were executed a. From Ma. Jopette's exit interview form:
not report for work only temporarily and that she will on Saudia's blank letterheads that Saudia had
resume the performance of her duties as soon as the provided. These letterheads already had the word     3. In what respects has the job met or failed to
leave allowance expires. "RESIGNATION" typed on the subject portion of their meet your expectations?
respective headings when these were handed to THE SUDDEN TWIST OF DECISION REGARDING THE
It is also clear that respondents exerted all efforts to' respondents.113ChanRoblesVirtualawlibrary MATERNITY LEAVE.116
remain employed with Saudia. Each of them
repeatedly filed appeal letters (as much as five [5] "In termination cases, the burden of proving just or b. From Loraine's exit interview form:
letters in the case of Rebesencio109) asking Saudia to valid cause for dismissing an employee rests on the
reconsider the ultimatum that they resign or be employer."114 In this case, Saudia makes much of how     1. What are your main reasons for leaving Saudia?
terminated along with the forfeiture of their benefits. respondents supposedly completed their exit What company are you joining?
Some of them even went to Saudia's office to interviews, executed quitclaims, received their         xxx xxx xxx
personally seek reconsideration.110 separation pay, and took more than a year to file
their Complaint.115 If at all, however, these         Others
Respondents also adduced a copy of the "Unified circumstances prove only the fact of their occurrence, CHANGING POLICIES REGARDING MATERNITY LEAVE
Employment Contract for Female Cabin nothing more. The voluntariness of respondents' (PREGNANCY)117
111
Attendants." This contract deemed void the departure from Saudia is non sequitur. As to respondents' quitclaims, in Phil. Employ Services
employment of a flight attendant who becomes and Resources, Inc. v. Paramio,118 this court noted
pregnant and threatened termination due to lack of Mere compliance with standard procedures or that "[i]f (a) there is clear proof that the waiver was
medical fitness.112 The threat of termination (and the processes, such as the completion of their exit wangled from an unsuspecting or gullible person; or
forfeiture of benefits that it entailed) is enough to interviews, neither negates compulsion nor indicates (b) the terms of the settlement are unconscionable,
compel a reasonable person in respondents' position voluntariness. and on their face invalid, such quitclaims must be
struck down as invalid or illegal." 119 Respondents dictum of fundamental equality between men and
executed their quitclaims after having been unfairly In a long line of cases, this court awarded exemplary women.129
given an ultimatum to resign or be terminated (and damages to illegally dismissed employees whose
forfeit their benefits).chanRoblesvirtualLawlibrary "dismissal[s were] effected in a wanton, oppressive or The award of exemplary damages is, therefore,
V malevolent manner."122 This court has awarded warranted, not only to remind employers of the need
exemplary damages to employees who were to adhere to the requirements of procedural and
Having been illegally and unjustly dismissed, terminated on such frivolous, arbitrary, and unjust substantive due process in termination of
respondents are entitled to full backwages and grounds as membership in or involvement with labor employment, but more importantly, to demonstrate
benefits from the time of their termination until the unions,123 injuries sustained in the course of that gender discrimination should in no case be
finality of this Decision. They are likewise entitled to employment,124 development of a medical condition countenanced.
separation pay in the amount of one (1) month's due to the employer's own violation of the
salary for every year of service until the fmality of this employment contract,125 and lodging of a Complaint Having been compelled to litigate to seek reliefs for
Decision, with a fraction of a year of at least six (6) against the employer.126 Exemplary damages were their illegal and unjust dismissal, respondents are
months being counted as one (1) whole year. also awarded to employees who were deemed likewise entitled to attorney's fees in the amount of
illegally dismissed by an employer in an attempt to 10% of the total monetary award.130
Moreover, "[m]oral damages are awarded in evade compliance with statutorily established VI
termination cases where the employee's dismissal employee benefits.127 Likewise, employees dismissed
was attended by bad faith, malice or fraud, or where for supposedly just causes, but in violation of due Petitioner Brenda J. Betia may not be held liable.
it constitutes an act oppressive to labor, or where it process requirements, were awarded exemplary
was done in a manner contrary to morals, good damages.128 A corporation has a personality separate and distinct
customs or public policy."120 In this case, Saudia from those of the persons composing it. Thus, as a
terminated respondents' employment in a manner These examples pale in comparison to the present rule, corporate directors and officers are not liable for
that is patently discriminatory and running afoul of controversy. Stripped of all unnecessary complexities, the illegal termination of a corporation's employees.
the public interest that underlies employer-employee respondents were dismissed for no other reason than It is only when they acted in bad faith or with malice
relationships. As such, respondents are entitled to simply that they were pregnant. This is as wanton, that they become solidarity liable with the
moral damages. oppressive, and tainted with bad faith as any reason corporation.131
for termination of employment can be. This is no
To provide an "example or correction for the public ordinary case of illegal dismissal. This is a case of In Ever Electrical Manufacturing, Inc. (EEMI) v.
good"121 as against such discriminatory and callous manifest gender discrimination. It is an affront not Samahang Manggagawa ng Ever Electrical,132 this
schemes, respondents are likewise entitled to only to our statutes and policies on employees' court clarified that "[b]ad faith does not connote bad
exemplary damages. security of tenure, but more so, to the Constitution's judgment or negligence; it imports a dishonest
purpose or some moral obliquity and conscious doing (3 Moral damages in the amount of P100,000.00 per LABRADOR, J.:
of wrong; it means breach of a known duty through ) respondent; This is an appeal from a decision of the Court of First
some motive or interest or ill will; it partakes of the (4 Exemplary damages in the amount of P200,000.00 Instance of Davao, Hon. Vicente N. Cusi, Jr., presiding,
nature of fraud."133 ) per respondent; and in Special Proceeding No. 622 of said court, dated
(5 Attorney's fees equivalent to 10% of the total September 14, 1949, approving among things the
Respondents have not produced proof to show that ) award. final accounts of the executor, directing the executor
Brenda J. Betia acted in bad faith or with malice as to reimburse Maria Lucy Christensen the amount of
regards their termination. Thus, she may not be held Interest of 6% per annum shall likewise be imposed P3,600 paid by her to Helen Christensen Garcia as her
solidarity liable with Saudia.cralawred on the total judgment award from the finality of this legacy, and declaring Maria Lucy Christensen entitled
Decision until full satisfaction thereof. to the residue of the property to be enjoyed during
WHEREFORE, with the MODIFICATIONS that first, her lifetime, and in case of death without issue, one-
petitioner Brenda J. Betia is not solidarity liable with This case is REMANDED to the Labor Arbiter to make half of said residue to be payable to Mrs. Carrie
petitioner Saudi Arabian Airlines, and second, that a detailed computation of the amounts due to Louise C. Borton, etc., in accordance with the
petitioner Saudi Arabian Airlines is liable for moral respondents which petitioner Saudi Arabian Airlines provisions of the will of the testator Edward E.
and exemplary damages. The June 16, 2011 Decision should pay without delay. Christensen. The will was executed in Manila on
and the September 13, 2011 Resolution of the Court March 5, 1951 and contains the following provisions:
of Appeals in CA-G.R. SP. No. 113006 are hereby SO ORDERED. 3. I declare ... that I have but ONE (1) child,
AFFIRMED in all other respects. Accordingly, named MARIA LUCY CHRISTENSEN (now Mrs.
petitioner Saudi Arabian Airlines is ordered to pay 3) Aznar vs. Garcia January 31, 1963, Bernard Daney), who was born in the
respondents: Philippines about twenty-eight years ago, and
(1 Full backwages and all other benefits computed G.R. No. L-16749             January 31, 1963 who is now residing at No. 665 Rodger Young
) from the respective dates in which each of the IN THE MATTER OF THE TESTATE ESTATE OF Village, Los Angeles, California, U.S.A.
respondents were illegally terminated until the EDWARD E. CHRISTENSEN, DECEASED. 4. I further declare that I now have no living
finality of this Decision; ADOLFO C. AZNAR, Executor and LUCY ascendants, and no descendants except my
(2 Separation pay computed from the respective CHRISTENSEN, Heir of the deceased, Executor and above named daughter, MARIA LUCY
) dates in which each of the respondents Heir-appellees, CHRISTENSEN DANEY.
commenced employment until the finality of this vs. xxx     xxx     xxx
Decision at the rate of one (1) month's salary for HELEN CHRISTENSEN GARCIA, oppositor-appellant. 7. I give, devise and bequeath unto MARIA
every year of service, with a fraction of a year of at M. R. Sotelo for executor and heir-appellees. HELEN CHRISTENSEN, now married to Eduardo
least six (6) months being counted as one (1) whole Leopoldo M. Abellera and Jovito Salonga for Garcia, about eighteen years of age and who,
year; oppositor-appellant. notwithstanding the fact that she was
 baptized Christensen, is not in any way related Christensen Garcia and proposed that the residue of rights and intrinsic validity of the provisions in his will
to me, nor has she been at any time adopted the estate be transferred to his daughter, Maria Lucy are to be governed by the law of California, in
by me, and who, from all information I have Christensen. accordance with which a testator has the right to
now resides in Egpit, Digos, Davao, Opposition to the approval of the project of partition dispose of his property in the way he desires, because
Philippines, the sum of THREE THOUSAND SIX was filed by Helen Christensen Garcia, insofar as it the right of absolute dominion over his property is
HUNDRED PESOS (P3,600.00), Philippine deprives her (Helen) of her legitime as an sacred and inviolable (In re McDaniel's Estate, 77 Cal.
Currency the same to be deposited in trust for acknowledged natural child, she having been declared Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117
the said Maria Helen Christensen with the by Us in G.R. Nos. L-11483-84 an acknowledged Cal. 286, 49 Pac. 192, cited in page 179, Record on
Davao Branch of the Philippine National Bank, natural child of the deceased Edward E. Christensen. Appeal). Oppositor Maria Helen Christensen, through
and paid to her at the rate of One Hundred The legal grounds of opposition are (a) that the counsel, filed various motions for reconsideration,
Pesos (P100.00), Philippine Currency per distribution should be governed by the laws of the but these were denied. Hence, this appeal.
month until the principal thereof as well as Philippines, and (b) that said order of distribution is The most important assignments of error are as
any interest which may have accrued thereon, contrary thereto insofar as it denies to Helen follows:
is exhausted.. Christensen, one of two acknowledged natural I
xxx     xxx     xxx children, one-half of the estate in full ownership. In THE LOWER COURT ERRED IN IGNORING THE
12. I hereby give, devise and bequeath, unto amplification of the above grounds it was alleged that DECISION OF THE HONORABLE SUPREME COURT
my well-beloved daughter, the said MARIA the law that should govern the estate of the deceased THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD
LUCY CHRISTENSEN DANEY (Mrs. Bernard Christensen should not be the internal law of OF EDWARD E. CHRISTENSEN AND, CONSEQUENTLY,
Daney), now residing as aforesaid at No. 665 California alone, but the entire law thereof because IN DEPRIVING HER OF HER JUST SHARE IN THE
Rodger Young Village, Los Angeles, California, several foreign elements are involved, that the forum INHERITANCE.
U.S.A., all the income from the rest, is the Philippines and even if the case were decided in II
remainder, and residue of my property and California, Section 946 of the California Civil Code, THE LOWER COURT ERRED IN ENTIRELY IGNORING
estate, real, personal and/or mixed, of which requires that the domicile of the decedent AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF
whatsoever kind or character, and should apply, should be applicable. It was also alleged SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES
wheresoever situated, of which I may be that Maria Helen Christensen having been declared CALLING FOR THE APPLICATION OF INTERNAL LAW.
possessed at my death and which may have an acknowledged natural child of the decedent, she is III
come to me from any source whatsoever, deemed for all purposes legitimate from the time of THE LOWER COURT ERRED IN FAILING TO RECOGNIZE
during her lifetime: .... her birth. THAT UNDER INTERNATIONAL LAW, PARTICULARLY
It is in accordance with the above-quoted provisions The court below ruled that as Edward E. Christensen UNDER THE RENVOI DOCTRINE, THE INTRINSIC
that the executor in his final account and project of was a citizen of the United States and of the State of VALIDITY OF THE TESTAMENTARY DISPOSITION OF
partition ratified the payment of only P3,600 to Helen California at the time of his death, the successional THE DISTRIBUTION OF THE ESTATE OF THE DECEASED
EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY Mr. Christensen's next arrival in the Philippines was in California and resided there for nine years, and since
THE LAWS OF THE PHILIPPINES. July of the year 1913. However, in 1928, he again he came to the Philippines in 1913 he returned to
IV departed the Philippines for the United States and California very rarely and only for short visits (perhaps
THE LOWER COURT ERRED IN NOT DECLARING THAT came back here the following year, 1929. Some nine to relatives), and considering that he appears never
THE SCHEDULE OF DISTRIBUTION SUBMITTED BY THE years later, in 1938, he again returned to his own to have owned or acquired a home or properties in
EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS. country, and came back to the Philippines the that state, which would indicate that he would
V following year, 1939. ultimately abandon the Philippines and make home in
THE LOWER COURT ERRED IN NOT DECLARING THAT Wherefore, the parties respectfully pray that the the State of California.
UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN foregoing stipulation of facts be admitted and Sec. 16. Residence is a term used with many shades
GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE approved by this Honorable Court, without prejudice of meaning from mere temporary presence to the
ESTATE IN FULL OWNERSHIP. to the parties adducing other evidence to prove their most permanent abode. Generally, however, it is
There is no question that Edward E. Christensen was a case not covered by this stipulation of facts. used to denote something more than mere physical
citizen of the United States and of the State of 1äwphï1.ñët presence. (Goodrich on Conflict of Laws, p. 29)
California at the time of his death. But there is also no Being an American citizen, Mr. Christensen was As to his citizenship, however, We find that the
question that at the time of his death he was interned by the Japanese Military Forces in the citizenship that he acquired in California when he
domiciled in the Philippines, as witness the following Philippines during World War II. Upon liberation, in resided in Sacramento, California from 1904 to 1913,
facts admitted by the executor himself in appellee's April 1945, he left for the United States but returned was never lost by his stay in the Philippines, for the
brief: to the Philippines in December, 1945. Appellees latter was a territory of the United States (not a state)
In the proceedings for admission of the will to Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as until 1946 and the deceased appears to have
probate, the facts of record show that the deceased Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", considered himself as a citizen of California by the
Edward E. Christensen was born on November 29, "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, fact that when he executed his will in 1951 he
1875 in New York City, N.Y., U.S.A.; his first arrival in 1953.) declared that he was a citizen of that State; so that he
the Philippines, as an appointed school teacher, was In April, 1951, Edward E. Christensen returned once appears never to have intended to abandon his
on July 1, 1901, on board the U.S. Army Transport more to California shortly after the making of his last California citizenship by acquiring another. This
"Sheridan" with Port of Embarkation as the City of will and testament (now in question herein) which he conclusion is in accordance with the following
San Francisco, in the State of California, U.S.A. He executed at his lawyers' offices in Manila on March 5, principle expounded by Goodrich in his Conflict of
stayed in the Philippines until 1904. 1951. He died at the St. Luke's Hospital in the City of Laws.
In December, 1904, Mr. Christensen returned to the Manila on April 30, 1953. (pp. 2-3) The terms "'residence" and "domicile" might well be
United States and stayed there for the following nine In arriving at the conclusion that the domicile of the taken to mean the same thing, a place of permanent
years until 1913, during which time he resided in, and deceased is the Philippines, we are persuaded by the abode. But domicile, as has been shown, has
was teaching school in Sacramento, California. fact that he was born in New York, migrated to acquired a technical meaning. Thus one may be
 domiciled in a place where he has never been. And regulated by the national law of the person whose The existence of this provision is alleged in appellant's
he may reside in a place where he has no domicile. succession is under consideration, whatever may be opposition and is not denied. We have checked it in
The man with two homes, between which he divides the nature of the property and regardless of the the California Civil Code and it is there. Appellee, on
his time, certainly resides in each one, while living in country where said property may be found. the other hand, relies on the case cited in the
it. But if he went on business which would require The application of this article in the case at bar decision and testified to by a witness. (Only the case
his presence for several weeks or months, he might requires the determination of the meaning of the of Kaufman is correctly cited.) It is argued on
properly be said to have sufficient connection with term "national law" is used therein. executor's behalf that as the deceased Christensen
the place to be called a resident. It is clear, however, There is no single American law governing the validity was a citizen of the State of California, the internal
that, if he treated his settlement as continuing only of testamentary provisions in the United States, each law thereof, which is that given in the abovecited
for the particular business in hand, not giving up his state of the Union having its own private law case, should govern the determination of the validity
former "home," he could not be a domiciled New applicable to its citizens only and in force only within of the testamentary provisions of Christensen's will,
Yorker. Acquisition of a domicile of choice requires the state. The "national law" indicated in Article 16 of such law being in force in the State of California of
the exercise of intention as well as physical the Civil Code above quoted can not, therefore, which Christensen was a citizen. Appellant, on the
presence. "Residence simply requires bodily possibly mean or apply to any general American law. other hand, insists that Article 946 should be
presence of an inhabitant in a given place, while So it can refer to no other than the private law of the applicable, and in accordance therewith and following
domicile requires bodily presence in that place and State of California. the doctrine of the renvoi, the question of the validity
also an intention to make it one's domicile." The next question is: What is the law in California of the testamentary provision in question should be
Residence, however, is a term used with many governing the disposition of personal property? The referred back to the law of the decedent's domicile,
shades of meaning, from the merest temporary decision of the court below, sustains the contention which is the Philippines.
presence to the most permanent abode, and it is not of the executor-appellee that under the California The theory of doctrine of renvoi has been defined by
safe to insist that any one use et the only proper Probate Code, a testator may dispose of his property various authors, thus:
one. (Goodrich, p. 29) by will in the form and manner he desires, citing the The problem has been stated in this way: "When the
The law that governs the validity of his testamentary case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 Conflict of Laws rule of the forum refers a jural matter
dispositions is defined in Article 16 of the Civil Code of P. 2d 952. But appellant invokes the provisions of to a foreign law for decision, is the reference to the
the Philippines, which is as follows: Article 946 of the Civil Code of California, which is as purely internal rules of law of the foreign system; i.e.,
ART. 16. Real property as well as personal property is follows: to the totality of the foreign law minus its Conflict of
subject to the law of the country where it is situated. If there is no law to the contrary, in the place where Laws rules?"
However, intestate and testamentary successions, personal property is situated, it is deemed to follow On logic, the solution is not an easy one. The
both with respect to the order of succession and to the person of its owner, and is governed by the law of Michigan court chose to accept the renvoi, that is,
the amount of successional rights and to the intrinsic his domicile. applied the Conflict of Laws rule of Illinois which
validity of testamentary provisions, shall be referred the matter back to Michigan law. But once
having determined the the Conflict of Laws principle too rejected the renvoi, judgment would be for the how this property should be distributed, it would
is the rule looked to, it is difficult to see why the woman. The same result would happen, though the refer the distribution to the national law of the
reference back should not have been to Michigan courts would switch with respect to which would hold deceased, thus applying the Massachusetts statute of
Conflict of Laws. This would have resulted in the liability, if both courts accepted the renvoi. distributions. So on the surface of things the
"endless chain of references" which has so often been The Restatement accepts the renvoi theory in two Massachusetts court has open to it alternative course
criticized be legal writers. The opponents of the instances: where the title to land is in question, and of action: (a) either to apply the French law is to
renvoi would have looked merely to the internal law where the validity of a decree of divorce is intestate succession, or (b) to resolve itself into a
of Illinois, thus rejecting the renvoi or the reference challenged. In these cases the Conflict of Laws rule of French court and apply the Massachusetts statute of
back. Yet there seems no compelling logical reason the situs of the land, or the domicile of the parties in distributions, on the assumption that this is what a
why the original reference should be the internal law the divorce case, is applied by the forum, but any French court would do. If it accepts the so-called
rather than to the Conflict of Laws rule. It is true that further reference goes only to the internal law. Thus, renvoi doctrine, it will follow the latter course, thus
such a solution avoids going on a merry-go-round, but a person's title to land, recognized by the situs, will be applying its own law.
those who have accepted the renvoi theory avoid this recognized by every court; and every divorce, valid by This is one type of renvoi. A jural matter is presented
inextricabilis circulas by getting off at the second the domicile of the parties, will be valid everywhere. which the conflict-of-laws rule of the forum refers to
reference and at that point applying internal law. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.) a foreign law, the conflict-of-laws rule of which, in
Perhaps the opponents of the renvoi are a bit more X, a citizen of Massachusetts, dies intestate, turn, refers the matter back again to the law of the
consistent for they look always to internal law as the domiciled in France, leaving movable property in forum. This is renvoi in the narrower sense. The
rule of reference. Massachusetts, England, and France. The question German term for this judicial process is
Strangely enough, both the advocates for and the arises as to how this property is to be distributed 'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp.
objectors to the renvoi plead that greater uniformity among X's next of kin. 523-571.)
will result from adoption of their respective views. Assume (1) that this question arises in a After a decision has been arrived at that a foreign law
And still more strange is the fact that the only way to Massachusetts court. There the rule of the conflict of is to be resorted to as governing a particular case, the
achieve uniformity in this choice-of-law problem is if laws as to intestate succession to movables calls for further question may arise: Are the rules as to the
in the dispute the two states whose laws form the an application of the law of the deceased's last conflict of laws contained in such foreign law also to
legal basis of the litigation disagree as to whether the domicile. Since by hypothesis X's last domicile was be resorted to? This is a question which, while it has
renvoi should be accepted. If both reject, or both France, the natural thing for the Massachusetts court been considered by the courts in but a few instances,
accept the doctrine, the result of the litigation will to do would be to turn to French statute of has been the subject of frequent discussion by
vary with the choice of the forum. In the case stated distributions, or whatever corresponds thereto in textwriters and essayists; and the doctrine involved
above, had the Michigan court rejected the renvoi, French law, and decree a distribution accordingly. An has been descriptively designated by them as the
judgment would have been against the woman; if the examination of French law, however, would show "Renvoyer" to send back, or the "Ruchversweisung",
suit had been brought in the Illinois courts, and they that if a French court were called upon to determine or the "Weiterverweisung", since an affirmative
answer to the question postulated and the operation Von Bar presented his views at the meeting of the Kaufman, Supra, its internal law. If the law on
of the adoption of the foreign law in toto would in Institute of International Law, at Neuchatel, in 1900, succession and the conflict of laws rules of California
many cases result in returning the main controversy in the form of the following theses: are to be enforced jointly, each in its own intended
to be decided according to the law of the forum. ... (1) Every court shall observe the law of its country as and appropriate sphere, the principle cited In re
(16 C.J.S. 872.) regards the application of foreign laws. Kaufman should apply to citizens living in the State,
Another theory, known as the "doctrine of renvoi", (2) Provided that no express provision to the contrary but Article 946 should apply to such of its citizens as
has been advanced. The theory of the doctrine of exists, the court shall respect: are not domiciled in California but in other
renvoi is that the court of the forum, in determining (a) The provisions of a foreign law which disclaims jurisdictions. The rule laid down of resorting to the
the question before it, must take into account the the right to bind its nationals abroad as regards their law of the domicile in the determination of matters
whole law of the other jurisdiction, but also its rules personal statute, and desires that said personal with foreign element involved is in accord with the
as to conflict of laws, and then apply the law to the statute shall be determined by the law of the general principle of American law that the domiciliary
actual question which the rules of the other domicile, or even by the law of the place where the law should govern in most matters or rights which
jurisdiction prescribe. This may be the law of the act in question occurred. follow the person of the owner.
forum. The doctrine of the renvoi has generally been (b) The decision of two or more foreign systems of When a man dies leaving personal property in one or
repudiated by the American authorities. (2 Am. Jur. law, provided it be certain that one of them is more states, and leaves a will directing the manner of
296) necessarily competent, which agree in attributing distribution of the property, the law of the state
The scope of the theory of renvoi has also been the determination of a question to the same system where he was domiciled at the time of his death will
defined and the reasons for its application in a of law. be looked to in deciding legal questions about the
country explained by Prof. Lorenzen in an article in xxx     xxx     xxx will, almost as completely as the law of situs is
the Yale Law Journal, Vol. 27, 1917-1918, pp. 529- If, for example, the English law directs its judge to consulted in questions about the devise of land. It is
531. The pertinent parts of the article are quoted distribute the personal estate of an Englishman who logical that, since the domiciliary rules control
herein below: has died domiciled in Belgium in accordance with the devolution of the personal estate in case of intestate
The recognition of the renvoi theory implies that the law of his domicile, he must first inquire whether the succession, the same rules should determine the
rules of the conflict of laws are to be understood as law of Belgium would distribute personal property validity of an attempted testamentary dispostion of
incorporating not only the ordinary or internal law of upon death in accordance with the law of domicile, the property. Here, also, it is not that the domiciliary
the foreign state or country, but its rules of the and if he finds that the Belgian law would make the has effect beyond the borders of the domiciliary
conflict of laws as well. According to this theory 'the distribution in accordance with the law of nationality state. The rules of the domicile are recognized as
law of a country' means the whole of its law. — that is the English law — he must accept this controlling by the Conflict of Laws rules at the situs
xxx     xxx     xxx reference back to his own law. property, and the reason for the recognition as in the
We note that Article 946 of the California Civil Code is case of intestate succession, is the general
its conflict of laws rule, while the rule applied in In re convenience of the doctrine. The New York court has
said on the point: 'The general principle that a Philippines and that the law to the contrary in the Babcock, 52 Phil. 130; and Gibbs vs. Government, 59
dispostiton of a personal property, valid at the Philippines is the provision in said Article 16 that the Phil. 293.) cited by appellees to support the decision
domicile of the owner, is valid anywhere, is one of the national law of the deceased should govern. This can not possibly apply in the case at bar, for two
universal application. It had its origin in that contention can not be sustained. As explained in the important reasons, i.e., the subject in each case does
international comity which was one of the first fruits various authorities cited above the national law not appear to be a citizen of a state in the United
of civilization, and it this age, when business mentioned in Article 16 of our Civil Code is the law on States but with domicile in the Philippines, and it
intercourse and the process of accumulating property conflict of laws in the California Civil Code, i.e., Article does not appear in each case that there exists in the
take but little notice of boundary lines, the practical 946, which authorizes the reference or return of the state of which the subject is a citizen, a law similar to
wisdom and justice of the rule is more apparent than question to the law of the testator's domicile. The or identical with Art. 946 of the California Civil Code.
ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442- conflict of laws rule in California, Article 946, Civil We therefore find that as the domicile of the
443.) Code, precisely refers back the case, when a decedent deceased Christensen, a citizen of California, is the
Appellees argue that what Article 16 of the Civil Code is not domiciled in California, to the law of his Philippines, the validity of the provisions of his will
of the Philippines pointed out as the national law is domicile, the Philippines in the case at bar. The court depriving his acknowledged natural child, the
the internal law of California. But as above explained of the domicile can not and should not refer the case appellant, should be governed by the Philippine Law,
the laws of California have prescribed two sets of back to California; such action would leave the issue the domicile, pursuant to Art. 946 of the Civil Code of
laws for its citizens, one for residents therein and incapable of determination because the case will then California, not by the internal law of California..
another for those domiciled in other jurisdictions. be like a football, tossed back and forth between the WHEREFORE, the decision appealed from is hereby
Reason demands that We should enforce the two states, between the country of which the reversed and the case returned to the lower court
California internal law prescribed for its citizens decedent was a citizen and the country of his with instructions that the partition be made as the
residing therein, and enforce the conflict of laws rules domicile. The Philippine court must apply its own law Philippine law on succession provides. Judgment
for the citizens domiciled abroad. If we must enforce as directed in the conflict of laws rule of the state of reversed, with costs against appellees.
the law of California as in comity we are bound to go, the decedent, if the question has to be decided,
as so declared in Article 16 of our Civil Code, then we especially as the application of the internal law of 4) Bellis vs. Bellis June 6, 1967,
must enforce the law of California in accordance with California provides no legitime for children while the
the express mandate thereof and as above explained, Philippine law, Arts. 887(4) and 894, Civil Code of the G.R. No. L-23678             June 6, 1967
i.e., apply the internal law for residents therein, and Philippines, makes natural children legally TESTATE ESTATE OF AMOS G. BELLIS, deceased.
its conflict-of-laws rule for those domiciled abroad. acknowledged forced heirs of the parent recognizing PEOPLE'S BANK and TRUST COMPANY, executor.
It is argued on appellees' behalf that the clause "if them. MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS,
there is no law to the contrary in the place where the The Philippine cases (In re Estate of Johnson, 39 Phil. oppositors-appellants,
property is situated" in Sec. 946 of the California Civil 156; Riera vs. Palmaroli, 40 Phil. 105; Miciano vs. vs.
Code refers to Article 16 of the Civil Code of the Brimo, 50 Phil. 867; Babcock Templeton vs. Rider EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for trust, in the following order and manner: (a) alia, the satisfaction of the legacy of Mary E. Mallen
oppositors appellants. $240,000.00 to his first wife, Mary E. Mallen; (b) by the delivery to her of shares of stock amounting to
Paredes, Poblador, Cruz and Nazareno for heirs- P120,000.00 to his three illegitimate children, Amos $240,000.00, and the legacies of Amos Bellis, Jr.,
appellees E. A. Bellis, et al. Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or Maria Cristina Bellis and Miriam Palma Bellis in the
Quijano and Arroyo for heirs-appellees W. S. Bellis, et P40,000.00 each and (c) after the foregoing two items amount of P40,000.00 each or a total of P120,000.00.
al. have been satisfied, the remainder shall go to his In the project of partition, the executor — pursuant
J. R. Balonkita for appellee People's Bank & Trust seven surviving children by his first and second wives, to the "Twelfth" clause of the testator's Last Will and
Company. namely: Edward A. Bellis, Henry A. Bellis, Alexander Testament — divided the residuary estate into seven
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman. Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter equal portions for the benefit of the testator's seven
BENGZON, J.P., J.: S. Bellis, and Dorothy E. Bellis, in equal legitimate children by his first and second marriages.
This is a direct appeal to Us, upon a question purely shares.1äwphï1.ñët On January 17, 1964, Maria Cristina Bellis and Miriam
of law, from an order of the Court of First Instance of Subsequently, or on July 8, 1958, Amos G. Bellis died Palma Bellis filed their respective oppositions to the
Manila dated April 30, 1964, approving the project of a resident of San Antonio, Texas, U.S.A. His will was project of partition on the ground that they were
partition filed by the executor in Civil Case No. 37089 admitted to probate in the Court of First Instance of deprived of their legitimes as illegitimate children
therein.1äwphï1.ñët Manila on September 15, 1958. and, therefore, compulsory heirs of the deceased.
The facts of the case are as follows: The People's Bank and Trust Company, as executor of Amos Bellis, Jr. interposed no opposition despite
Amos G. Bellis, born in Texas, was "a citizen of the the will, paid all the bequests therein including the notice to him, proof of service of which is evidenced
State of Texas and of the United States." By his first amount of $240,000.00 in the form of shares of stock by the registry receipt submitted on April 27, 1964 by
wife, Mary E. Mallen, whom he divorced, he had five to Mary E. Mallen and to the three (3) illegitimate the executor.1
legitimate children: Edward A. Bellis, George Bellis children, Amos Bellis, Jr., Maria Cristina Bellis and After the parties filed their respective memoranda
(who pre-deceased him in infancy), Henry A. Bellis, Miriam Palma Bellis, various amounts totalling and other pertinent pleadings, the lower court, on
Alexander Bellis and Anna Bellis Allsman; by his P40,000.00 each in satisfaction of their respective April 30, 1964, issued an order overruling the
second wife, Violet Kennedy, who survived him, he legacies, or a total of P120,000.00, which it released oppositions and approving the executor's final
had three legitimate children: Edwin G. Bellis, Walter from time to time according as the lower court account, report and administration and project of
S. Bellis and Dorothy Bellis; and finally, he had three approved and allowed the various motions or partition. Relying upon Art. 16 of the Civil Code, it
illegitimate children: Amos Bellis, Jr., Maria Cristina petitions filed by the latter three requesting partial applied the national law of the decedent, which in
Bellis and Miriam Palma Bellis. advances on account of their respective legacies. this case is Texas law, which did not provide for
On August 5, 1952, Amos G. Bellis executed a will in On January 8, 1964, preparatory to closing its legitimes.
the Philippines, in which he directed that after all administration, the executor submitted and filed its Their respective motions for reconsideration having
taxes, obligations, and expenses of administration are "Executor's Final Account, Report of Administration been denied by the lower court on June 11, 1964,
paid for, his distributable estate should be divided, in and Project of Partition" wherein it reported, inter oppositors-appellants appealed to this Court to raise
the issue of which law must apply — Texas law or four items: (a) the order of succession; (b) the provisions of this and the next preceding article"
Philippine law. amount of successional rights; (e) the intrinsic validity when they incorporated Art. 11 of the old Civil Code
In this regard, the parties do not submit the case on, of the provisions of the will; and (d) the capacity to as Art. 17 of the new Civil Code, while reproducing
nor even discuss, the doctrine of renvoi, applied by succeed. They provide that — without substantial change the second paragraph of
this Court in Aznar v. Christensen Garcia, L-16749, ART. 16. Real property as well as personal Art. 10 of the old Civil Code as Art. 16 in the new. It
January 31, 1963. Said doctrine is usually pertinent property is subject to the law of the country must have been their purpose to make the second
where the decedent is a national of one country, and where it is situated. paragraph of Art. 16 a specific provision in itself which
a domicile of another. In the present case, it is not However, intestate and testamentary must be applied in testate and intestate succession.
disputed that the decedent was both a national of successions, both with respect to the order of As further indication of this legislative intent,
Texas and a domicile thereof at the time of his death. 2 succession and to the amount of successional Congress added a new provision, under Art. 1039,
So that even assuming Texas has a conflict of law rule rights and to the intrinsic validity of which decrees that capacity to succeed is to be
providing that the domiciliary system (law of the testamentary provisions, shall be regulated by governed by the national law of the decedent.
domicile) should govern, the same would not result in the national law of the person whose It is therefore evident that whatever public policy or
a reference back (renvoi) to Philippine law, but would succession is under consideration, whatever good customs may be involved in our System of
still refer to Texas law. Nonetheless, if Texas has a may he the nature of the property and legitimes, Congress has not intended to extend the
conflicts rule adopting the situs theory (lex rei sitae) regardless of the country wherein said same to the succession of foreign nationals. For it has
calling for the application of the law of the place property may be found. specifically chosen to leave, inter alia, the amount of
where the properties are situated, renvoi would arise, ART. 1039. Capacity to succeed is governed by successional rights, to the decedent's national law.
since the properties here involved are found in the the law of the nation of the decedent. Specific provisions must prevail over general ones.
Philippines. In the absence, however, of proof as to Appellants would however counter that Art. 17, Appellants would also point out that the decedent
the conflict of law rule of Texas, it should not be paragraph three, of the Civil Code, stating that — executed two wills — one to govern his Texas estate
presumed different from ours.3 Appellants' position is Prohibitive laws concerning persons, their acts and the other his Philippine estate — arguing from
therefore not rested on the doctrine of renvoi. As or property, and those which have for their this that he intended Philippine law to govern his
stated, they never invoked nor even mentioned it in object public order, public policy and good Philippine estate. Assuming that such was the
their arguments. Rather, they argue that their case customs shall not be rendered ineffective by decedent's intention in executing a separate
falls under the circumstances mentioned in the third laws or judgments promulgated, or by Philippine will, it would not alter the law, for as this
paragraph of Article 17 in relation to Article 16 of the determinations or conventions agreed upon in Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a
Civil Code. a foreign country. provision in a foreigner's will to the effect that his
Article 16, par. 2, and Art. 1039 of the Civil Code, prevails as the exception to Art. 16, par. 2 of the Civil properties shall be distributed in accordance with
render applicable the national law of the decedent, in Code afore-quoted. This is not correct. Precisely, Philippine law and not with his national law, is illegal
intestate or testamentary successions, with regard to Congress deleted the phrase, "notwithstanding the and void, for his national law cannot be ignored in
regard to those matters that Article 10 — now Article LABOR RELATIONS COMMISSION, BROWN & ROOT The petition in G.R. Nos. 104911-14, entitled
16 — of the Civil Code states said national law should INTERNATIONAL, INC. AND/OR ASIA "Bienvenido M. Cadalin, et. al., v. Hon. National Labor
govern. INTERNATIONAL BUILDERS CORPORATION, Relations Commission, et. al.," was filed under Rule
The parties admit that the decedent, Amos G. Bellis, respondents. 65 of the Revised Rules of Court:
was a citizen of the State of Texas, U.S.A., and that Gerardo A. Del Mundo and Associates for petitioners. (1) to reverse the Resolution dated September 2,
under the laws of Texas, there are no forced heirs or Romulo, Mabanta, Sayoc, Buenaventura, De los 1991 of NLRC in POEA Cases Nos. L-84-06-555, L-85-
legitimes. Accordingly, since the intrinsic validity of Angeles Law Offices for BRII/AIBC. 10-777, L-85-10-799 and
the provision of the will and the amount of Florante M. De Castro for private respondents in L-86-05-460 insofar as it: (i) applied the three-year
successional rights are to be determined under Texas 105029-32. prescriptive period under the Labor Code of the
law, the Philippine law on legitimes cannot be applied Philippines instead of the ten-year prescriptive period
to the testacy of Amos G. Bellis. QUIASON, J.: under the Civil Code of the Philippines; and (ii) denied
Wherefore, the order of the probate court is hereby The petition in G.R. No. 104776, entitled "Bienvenido the
affirmed in toto, with costs against appellants. So M. Cadalin, et. al. v. Philippine Overseas Employment "three-hour daily average" formula in the
ordered. Administration's Administrator, et. al.," was filed computation of petitioners' overtime pay; and
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, under Rule 65 of the Revised Rules of Court: (2) to reverse the Resolution dated March 24, 1992 of
Makalintal, Zaldivar, Sanchez and Castro, JJ., concur. (1) to modify the Resolution dated September 2, 1991 NLRC, denying the motion for reconsideration of its
of the National Labor Relations Commission (NLRC) in Resolution dated September 2, 1991 (Rollo, pp. 8-25;
POEA Cases Nos. 26-220).
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05- The petition in G.R. Nos. 105029-32, entitled "Asia
460; (2) to render a new decision: (i) declaring private International Builders Corporation, et. al., v. National
respondents as in default; (ii) declaring the said labor Labor Relations Commission, et. al." was filed under
5) Cadali. et. al. vs. POEA Administrator, cases as a class suit; (iii) ordering Asia International Rule 65 of the Revised Rules of Court:
G.R. No. L-104776 December 5, 1994 Builders Corporation (AIBC) and Brown and Root (1) to reverse the Resolution dated September 2,
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, International Inc. (BRII) to pay the claims of the 1,767 1991 of NLRC in POEA Cases Nos. L-84-06-555, L-85-
DONATO B. EVANGELISTA, and the rest of 1,767 claimants in said labor cases; (iv) declaring Atty. 10-777, L-85-10-779 and
NAMED-COMPLAINANTS, thru and by their Florante M. de Castro guilty of forum-shopping; and L-86-05-460, insofar as it granted the claims of 149
Attorney-in-fact, Atty. GERARDO A. DEL MUNDO, (v) dismissing POEA Case No. L-86-05-460; and claimants; and
petitioners, (3) to reverse the Resolution dated March 24, 1992 of (2) to reverse the Resolution dated March 21, 1992 of
vs. NLRC, denying the motion for reconsideration of its NLRC insofar as it denied the motions for
PHILIPPINE OVERSEAS EMPLOYMENT Resolution dated September 2, 1991 (Rollo, pp. 8- reconsideration of AIBC and BRII (Rollo, pp. 2-59; 61-
ADMINISTRATION'S ADMINISTRATOR, NATIONAL 288). 230).
The Resolution dated September 2, 1991 of NLRC, Administration (POEA) for money claims arising from Administrator also scheduled a pre-trial conference
which modified the decision of POEA in four labor their recruitment by AIBC and employment by BRII on July 25, 1984.
cases: (1) awarded monetary benefits only to 149 (POEA Case No. L-84-06-555). The claimants were On July 13, 1984, the claimants submitted their
claimants and (2) directed Labor Arbiter Fatima J. represented by Atty. Gerardo del Mundo. "Compliance and Manifestation." On July 23, 1984,
Franco to conduct hearings and to receive evidence BRII is a foreign corporation with headquarters in AIBC filed a "Motion to Strike Out of the Records", the
on the claims dismissed by the POEA for lack of Houston, Texas, and is engaged in construction; while "Complaint" and the "Compliance and
substantial evidence or proof of employment. AIBC is a domestic corporation licensed as a service Manifestation." On July 25, 1984, the claimants filed
Consolidation of Cases contractor to recruit, mobilize and deploy Filipino their "Rejoinder and Comments," averring, among
G.R. Nos. 104776 and 105029-32 were originally workers for overseas employment on behalf of its other matters, the failure of AIBC and BRII to file their
raffled to the Third Division while G.R. Nos. 104911- foreign principals. answers and to attend the pre-trial conference on
14 were raffled to the Second Division. In the The amended complaint principally sought the July 25, 1984. The claimants alleged that AIBC and
Resolution dated July 26, 1993, the Second Division payment of the unexpired portion of the employment BRII had waived their right to present evidence and
referred G.R. Nos. 104911-14 to the Third Division contracts, which was terminated prematurely, and had defaulted by failing to file their answers and to
(G.R. Nos. 104911-14, Rollo, p. 895). secondarily, the payment of the interest of the attend the pre-trial conference.
In the Resolution dated September 29, 1993, the earnings of the Travel and Reserved Fund, interest on On October 2, 1984, the POEA Administrator denied
Third Division granted the motion filed in G.R. Nos. all the unpaid benefits; area wage and salary the "Motion to Strike Out of the Records" filed by
104911-14 for the consolidation of said cases with differential pay; fringe benefits; refund of SSS and AIBC but required the claimants to correct the
G.R. Nos. 104776 and 105029-32, which were premium not remitted to the SSS; refund of deficiencies in the complaint pointed out in the order.
assigned to the First Division (G.R. Nos. 104911-14, withholding tax not remitted to the BIR; penalties for On October 10, 1984, claimants asked for time within
Rollo, pp. 986-1,107; G.R. Nos. 105029-30, Rollo, pp. committing prohibited practices; as well as the which to comply with the Order of October 2, 1984
369-377, 426-432). In the Resolution dated October suspension of the license of AIBC and the and filed an "Urgent Manifestation," praying that the
27, 1993, the First Division granted the motion to accreditation of BRII (G.R. No. 104776, Rollo, pp. 13- POEA Administrator direct the parties to submit
consolidate G.R. Nos. 104911-14 with G.R. No. 14). simultaneously their position papers, after which the
104776 (G.R. Nos. 104911-14, Rollo, p. 1109; G.R. At the hearing on June 25, 1984, AIBC was furnished a case should be deemed submitted for decision. On
Nos. 105029-32, Rollo, p. 1562). copy of the complaint and was given, together with the same day, Atty. Florante de Castro filed another
I BRII, up to July 5, 1984 to file its answer. complaint for the same money claims and benefits in
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. On July 3, 1984, POEA Administrator, upon motion of behalf of several claimants, some of whom were also
Amul and Donato B. Evangelista, in their own behalf AIBC and BRII, ordered the claimants to file a bill of claimants in POEA Case No. L-84-06-555 (POEA Case
and on behalf of 728 other overseas contract workers particulars within ten days from receipt of the order No. 85-10-779).
(OCWs) instituted a class suit by filing an "Amended and the movants to file their answers within ten days On October 19, 1984, claimants filed their
Complaint" with the Philippine Overseas Employment from receipt of the bill of particulars. The POEA "Compliance" with the Order dated October 2, 1984
and an "Urgent Manifestation," praying that the annual leave differential pay, leave indemnity pay, On October 10, 1985, Romeo Patag and two co-
POEA direct the parties to submit simultaneously retirement and savings benefits and their share of claimants filed a complaint (POEA Case No. L-85-10-
their position papers after which the case would be forfeitures (G.R. No. 104776, Rollo, pp. 14-16). On 777) against AIBC and BRII with the POEA, demanding
deemed submitted for decision. On the same day, April 15, 1985, the POEA Administrator directed AIBC monetary claims similar to those subject of POEA
AIBC asked for time to file its comment on the to file its answer to the amended complaint (G.R. No. Case No. L-84-06-555. In the same month, Solomon
"Compliance" and "Urgent Manifestation" of 104776, Rollo, p. 20). Reyes also filed his own complaint (POEA Case No. L-
claimants. On November 6, 1984, it filed a second On May 28, 1985, claimants filed an "Urgent Motion 85-10-779) against AIBC and BRII.
motion for extension of time to file the comment. for Summary Judgment." On the same day, the POEA On October 17, 1985, the law firm of Florante M. de
On November 8, 1984, the POEA Administrator issued an order directing AIBC and BRII to file their Castro & Associates asked for the substitution of the
informed AIBC that its motion for extension of time answers to the "Amended Complaint," otherwise, original counsel of record and the cancellation of the
was granted. they would be deemed to have waived their right to special powers of attorney given the original counsel.
On November 14, 1984, claimants filed an opposition present evidence and the case would be resolved on On December 12, 1985, Atty. Del Mundo filed in NLRC
to the motions for extension of time and asked that the basis of complainant's evidence. a notice of the claim to enforce attorney's lien.
AIBC and BRII be declared in default for failure to file On June 5, 1985, AIBC countered with a "Motion to On May 29, 1986, Atty. De Castro filed a complaint for
their answers. Dismiss as Improper Class Suit and Motion for Bill of money claims (POEA Case No. 86-05-460) in behalf of
On November 20, 1984, AIBC and BRII filed a Particulars Re: Amended Complaint dated March 24, 11 claimants including Bienvenido Cadalin, a claimant
"Comment" praying, among other reliefs, that 1985." Claimants opposed the motions. in POEA Case No. 84-06-555.
claimants should be ordered to amend their On September 4, 1985, the POEA Administrator On December 12, 1986, the NLRC dismissed the two
complaint. reiterated his directive to AIBC and BRII to file their appeals filed on February 27, 1985 and September 18,
On December 27, 1984, the POEA Administrator answers in POEA Case No. L-84-06-555. 1985 by AIBC and BRII.
issued an order directing AIBC and BRII to file their On September 18, 1985, AIBC filed its second appeal In narrating the proceedings of the labor cases before
answers within ten days from receipt of the order. to the NLRC, together with a petition for the issuance the POEA Administrator, it is not amiss to mention
On February 27, 1985, AIBC and BRII appealed to of a writ of injunction. On September 19, 1985, NLRC that two cases were filed in the Supreme Court by the
NLRC seeking the reversal of the said order of the enjoined the POEA Administrator from hearing the claimants, namely — G.R. No. 72132 on September
POEA Administrator. Claimants opposed the appeal, labor cases and suspended the period for the filing of 26, 1985 and Administrative Case No. 2858 on March
claiming that it was dilatory and praying that AIBC the answers of AIBC and BRII. 18, 1986. On May 13, 1987, the Supreme Court issued
and BRII be declared in default. On September 19, 1985, claimants asked the POEA a resolution in Administrative Case No. 2858 directing
On April 2, 1985, the original claimants filed an Administrator to include additional claimants in the the POEA Administrator to resolve the issues raised in
"Amended Complaint and/or Position Paper" dated case and to investigate alleged wrongdoings of BRII, the motions and oppositions filed in POEA Cases Nos.
March 24, 1985, adding new demands: namely, the AIBC and their respective lawyers. L-84-06-555 and L-86-05-460 and to decide the labor
payment of overtime pay, extra night work pay, cases with deliberate dispatch.
AIBC also filed a petition in the Supreme Court (G.R. the two appeals. On April 28, 1987, NLRC en banc amount of $824,652.44 in favor of only 324
No. 78489), questioning the Order dated September denied the motion for reconsideration. complainants.
4, 1985 of the POEA Administrator. Said order At the hearing on June 19, 1987, AIBC submitted its On February 10, 1989, claimants submitted their
required BRII and AIBC to answer the amended answer to the complaint. At the same hearing, the "Appeal Memorandum For Partial Appeal" from the
complaint in POEA Case No. L-84-06-555. In a parties were given a period of 15 days from said date decision of the POEA. On the same day, AIBC also
resolution dated November 9, 1987, we dismissed the within which to submit their respective position filed its motion for reconsideration and/or appeal in
petition by informing AIBC that all its technical papers. On June 24, 1987 claimants filed their addition to the "Notice of Appeal" filed earlier on
objections may properly be resolved in the hearings "Urgent Motion to Strike Out Answer," alleging that February 6, 1989 by another counsel for AIBC.
before the POEA. the answer was filed out of time. On June 29, 1987, On February 17, 1989, claimants filed their "Answer
Complaints were also filed before the Ombudsman. claimants filed their "Supplement to Urgent to Appeal," praying for the dismissal of the appeal of
The first was filed on September 22, 1988 by claimant Manifestational Motion" to comply with the POEA AIBC and BRII.
Hermie Arguelles and 18 co-claimants against the Order of June 19, 1987. On February 24, 1988, AIBC On March 15, 1989, claimants filed their "Supplement
POEA Administrator and several NLRC and BRII submitted their position paper. On March 4, to Complainants' Appeal Memorandum," together
Commissioners. The Ombudsman merely referred the 1988, claimants filed their "Ex-Parte Motion to with their "newly discovered evidence" consisting of
complaint to the Secretary of Labor and Employment Expunge from the Records" the position paper of payroll records.
with a request for the early disposition of POEA Case AIBC and BRII, claiming that it was filed out of time. On April 5, 1989, AIBC and BRII submitted to NLRC
No. L-84-06-555. The second was filed on April 28, On September 1, 1988, the claimants represented by their "Manifestation," stating among other matters
1989 by claimants Emigdio P. Bautista and Rolando R. Atty. De Castro filed their memorandum in POEA Case that there were only 728 named claimants. On April
Lobeta charging AIBC and BRII for violation of labor No. L-86-05-460. On September 6, 1988, AIBC and 20, 1989, the claimants filed their "Counter-
and social legislations. The third was filed by Jose R. BRII submitted their Supplemental Memorandum. On Manifestation," alleging that there were 1,767 of
Santos, Maximino N. Talibsao and Amado B. Bruce September 12, 1988, BRII filed its "Reply to them.
denouncing AIBC and BRII of violations of labor laws. Complainant's Memorandum." On October 26, 1988, On July 27, 1989, claimants filed their "Urgent Motion
On January 13, 1987, AIBC filed a motion for claimants submitted their "Ex-Parte Manifestational for Execution" of the Decision dated January 30, 1989
reconsideration of the NLRC Resolution dated Motion and Counter-Supplemental Motion," together on the grounds that BRII had failed to appeal on time
December 12, 1986. with 446 individual contracts of employments and and AIBC had not posted the supersedeas bond in the
On January 14, 1987, AIBC reiterated before the POEA service records. On October 27, 1988, AIBC and BRII amount of $824,652.44.
Administrator its motion for suspension of the period filed a "Consolidated Reply." On December 23, 1989, claimants filed another
for filing an answer or motion for extension of time to On January 30, 1989, the POEA Administrator motion to resolve the labor cases.
file the same until the resolution of its motion for rendered his decision in POEA Case No. L-84-06-555 On August 21, 1990, claimants filed their
reconsideration of the order of the NLRC dismissing and the other consolidated cases, which awarded the "Manifestational Motion," praying that all the 1,767
claimants be awarded their monetary claims for
failure of private respondents to file their answers Commission to summon parties, conduct hearings In its Resolution dated March 24, 1992, NLRC denied
within the reglamentary period required by law. and receive evidence, as expeditiously as possible, all the motions for reconsideration.
On September 2, 1991, NLRC promulgated its and thereafter submit a written report to this Hence, these petitions filed by the claimants
Resolution, disposing as follows: Commission (First Division) of the proceedings taken, represented by Atty. Del Mundo (G.R. No. 104776),
WHEREFORE, premises considered, the Decision of regarding the claims of the following: the claimants represented by Atty. De Castro (G.R.
the POEA in these consolidated cases is modified to (a) complainants identified and listed in Annex "D" Nos. 104911-14) and by AIBC and BRII (G.R. Nos.
the extent and in accordance with the following attached and made an integral part of this 105029-32).
dispositions: Resolution, whose claims were dismissed by the II
1. The claims of the 94 complainants identified and POEA for lack of proof of employment in Bahrain Compromise Agreements
listed in Annex "A" hereof are dismissed for having (these complainants numbering 683, are listed in Before this Court, the claimants represented by Atty.
prescribed; pages 13 to 23 of the decision of POEA, subject of De Castro and AIBC and BRII have submitted, from
2. Respondents AIBC and Brown & Root are hereby the appeals) and, time to time, compromise agreements for our
ordered, jointly and severally, to pay the 149 (b) complainants identified and listed in Annex "E" approval and jointly moved for the dismissal of their
complainants, identified and listed in Annex "B" attached and made an integral part of this respective petitions insofar as the claimants-parties
hereof, the peso equivalent, at the time of payment, Resolution, whose awards decreed by the POEA, to to the compromise agreements were concerned (See
of the total amount in US dollars indicated opposite Our mind, are not supported by substantial Annex A for list of claimants who signed quitclaims).
their respective names; evidence" (G.R. No. 104776; Rollo, pp. 113-115; G.R. Thus the following manifestations that the parties
3. The awards given by the POEA to the 19 Nos. 104911-14, pp. 85-87; G.R. Nos. 105029-31, pp. had arrived at a compromise agreement and the
complainants classified and listed in Annex "C" 120-122). corresponding motions for the approval of the
hereof, who appear to have worked elsewhere than On November 27, 1991, claimant Amado S. Tolentino agreements were filed by the parties and approved
in Bahrain are hereby set aside. and 12 by the Court:
4. All claims other than those indicated in Annex "B", co-claimants, who were former clients of Atty. Del 1) Joint Manifestation and Motion involving claimant
including those for overtime work and favorably Mundo, filed a petition for certiorari with the Emigdio Abarquez and 47 co-claimants dated
granted by the POEA, are hereby dismissed for lack Supreme Court (G.R. Nos. 120741-44). The petition September 2, 1992 (G.R. Nos. 104911-14, Rollo, pp.
of substantial evidence in support thereof or are was dismissed in a resolution dated January 27, 1992. 263-406; G.R. Nos. 105029-32, Rollo, pp.
beyond the competence of this Commission to pass Three motions for reconsideration of the September 470-615);
upon. 2, 1991 Resolution of the NLRC were filed. The first, 2) Joint Manifestation and Motion involving
In addition, this Commission, in the exercise of its by the claimants represented by Atty. Del Mundo; the petitioner Bienvenido Cadalin and 82 co-petitioners
powers and authority under Article 218(c) of the second, by the claimants represented by Atty. De dated September 3, 1992 (G.R. No. 104776, Rollo,
Labor Code, as amended by R.A. 6715, hereby Castro; and the third, by AIBC and BRII. pp. 364-507);
directs Labor Arbiter Fatima J. Franco of this
3) Joint Manifestation and Motion involving claimant 9) Joint Manifestation and Motion involving Valerio III
Jose Evangelista and 3 co-claimants dated May 10, 1993 The facts as found by the NLRC are as follows:
M. Aban and 36 co-claimants dated September 17, (G.R. No. 104776, Rollo, pp. 1815-1829); We have taken painstaking efforts to sift over the
1992 (G.R. Nos. 105029-32, Rollo, pp. 613-722; G.R. 10) Joint Manifestation and Motion involving more than fifty volumes now comprising the records
No. 104776, Rollo, pp. 518-626; G.R. Nos. 104911-14, petitioner Quiterio R. Agudo and 36 co-claimants of these cases. From the records, it appears that the
Rollo, pp. 407-516); dated June 14, 1993 (G.R. Nos. 105029-32, Rollo, pp. complainants-appellants allege that they were
4) Joint Manifestation and Motion involving claimant 974-1190; G.R. Nos. 104911-14, Rollo, pp. 748-864; recruited by respondent-appellant AIBC for its
Antonio T. Anglo and 17 co-claimants dated October G.R. No. 104776, Rollo, pp. 1066-1183); accredited foreign principal, Brown & Root, on
14, 1992 (G.R. Nos. 11) Joint Manifestation and Motion involving various dates from 1975 to 1983. They were all
105029-32, Rollo, pp. 778-843; G.R. No. 104776, claimant Arnaldo J. Alonzo and 19 co-claimants deployed at various projects undertaken by Brown &
Rollo, pp. 650-713; G.R. Nos. 104911-14, Rollo, pp. dated July 22, 1993 (G.R. No. 104776, Rollo, pp. Root in several countries in the Middle East, such as
530-590); 1173-1235; G.R. Nos. 105029-32, Rollo, pp. 1193- Saudi Arabia, Libya, United Arab Emirates and
5) Joint Manifestation and Motion involving claimant 1256; G.R. Nos. 104911-14, Rollo, pp. 896-959); Bahrain, as well as in Southeast Asia, in Indonesia
Dionisio Bobongo and 6 co-claimants dated January 12) Joint Manifestation and Motion involving and Malaysia.
15, 1993 (G.R. No. 104776, Rollo, pp. 813-836; G.R. claimant Ricardo C. Dayrit and 2 co-claimants dated Having been officially processed as overseas contract
Nos. 104911-14, Rollo, pp. 629-652); September 7, 1993 (G.R. Nos. workers by the Philippine Government, all the
6) Joint Manifestation and Motion involving claimant 105029-32, Rollo, pp. 1266-1278; G.R. No. 104776, individual complainants signed standard overseas
Valerio A. Evangelista and 4 co-claimants dated Rollo, pp. 1243-1254; G.R. Nos. 104911-14, Rollo, pp. employment contracts (Records, Vols. 25-32.
March 10, 1993 (G.R. Nos. 104911-14, Rollo, pp. 731- 972-984); Hereafter, reference to the records would be
746; G.R. No. 104776, Rollo, pp. 1815-1829); 13) Joint Manifestation and Motion involving sparingly made, considering their chaotic
7) Joint Manifestation and Motion involving claimant Dante C. Aceres and 37 co-claimants dated arrangement) with AIBC before their departure from
claimants Palconeri Banaag and 5 co-claimants dated September 8, 1993 (G.R. No. 104776, Rollo, pp. the Philippines. These overseas employment
March 17, 1993 (G.R. No. 104776, Rollo, pp. 1657- 1257-1375; G.R. Nos. 104911-14, Rollo, pp. 987- contracts invariably contained the following relevant
1703; G.R. Nos. 104911-14, Rollo, pp. 655-675); 1105; G.R. Nos. 105029-32, Rollo, pp. 1280-1397); terms and conditions.
8) Joint Manifestation and Motion involving claimant 14) Joint Manifestation and Motion involving PART B —
Benjamin Ambrosio and 15 other co-claimants dated Vivencio V. Abella and 27 co-claimants dated January (1) Employment Position Classification :
May 4, 1993 (G.R. Nos. 105029-32, Rollo, pp. 906- 10, 1994 (G.R. Nos. 105029-32, Rollo, Vol. II); —————————
956; G.R. Nos. 104911-14, Rollo, pp. 679-729; G.R. 15) Joint Manifestation and Motion involving (Code) :—————————
No. 104776, Rollo, pp. 1773-1814); Domingo B. Solano and six co-claimants dated (2) Company Employment Status :
August 25, 1994 (G.R. Nos. 105029-32; G.R. No. —————————
104776; G.R. Nos. 104911-14). (3) Date of Employment to Commence on :
————————— his return transportation to his country of origin. Decree No. 23 on June 16, 1976, otherwise known as
(4) Basic Working Hours Per Week : Normally on the most expeditious air route, the Labour Law for the Private Sector (Records, Vol.
————————— economy class accommodation. 18). This decree took effect on August 16, 1976.
(5) Basic Working Hours Per Month : xxx xxx xxx Some of the provisions of Amiri Decree No. 23 that
————————— 10. VACATION/SICK LEAVE BENEFITS are relevant to the claims of the complainants-
(6) Basic Hourly Rate :————————— a) After one (1) year of continuous service and/or appellants are as follows (italics supplied only for
(7) Overtime Rate Per Hour :————————— satisfactory completion of contract, employee shall emphasis):
(8) Projected Period of Service be entitled to 12-day vacation leave with pay. This Art. 79: . . . A worker shall receive payment for each
(Subject to C(1) of this [sic]) :————————— shall be computed at the basic wage rate. Fractions extra hour equivalent to his wage entitlement
Months and/or of a year's service will be computed on a pro-rata increased by a minimum of twenty-five per centum
Job Completion basis. thereof for hours worked during the day; and by a
xxx xxx xxx b) Sick leave of 15-days shall be granted to the minimum of fifty per centum thereof for hours
3. HOURS OF WORK AND COMPENSATION employee for every year of service for non-work worked during the night which shall be deemed to
a) The Employee is employed at the hourly rate and connected injuries or illness. If the employee failed being from seven o'clock in the evening until seven
overtime rate as set out in Part B of this Document. to avail of such leave benefits, the same shall be o'clock in the morning. . . .
b) The hours of work shall be those set forth by the forfeited at the end of the year in which said sick Art. 80: Friday shall be deemed to be a weekly day of
Employer, and Employer may, at his sole option, leave is granted. rest on full pay.
change or adjust such hours as maybe deemed 11. BONUS . . . an employer may require a worker, with his
necessary from time to time. A bonus of 20% (for offshore work) of gross income consent, to work on his weekly day of rest if
4. TERMINATION will be accrued and payable only upon satisfactory circumstances so require and in respect of which an
a) Notwithstanding any other terms and conditions completion of this contract. additional sum equivalent to 150% of his normal
of this agreement, the Employer may, at his sole 12. OFFDAY PAY wage shall be paid to him. . . .
discretion, terminate employee's service with cause, The seventh day of the week shall be observed as a Art. 81: . . . When conditions of work require the
under this agreement at any time. If the Employer day of rest with 8 hours regular pay. If work is worker to work on any official holiday, he shall be
terminates the services of the Employee under this performed on this day, all hours work shall be paid paid an additional sum equivalent to 150% of his
Agreement because of the completion or at the premium rate. However, this offday pay normal wage.
termination, or suspension of the work on which the provision is applicable only when the laws of the Art. 84: Every worker who has completed one year's
Employee's services were being utilized, or because Host Country require payments for rest day. continuous service with his employer shall be entitled
of a reduction in force due to a decrease in scope of In the State of Bahrain, where some of the individual to leave on full pay for a period of not less than 21
such work, or by change in the type of construction complainants were deployed, His Majesty Isa Bin days for each year increased to a period not less
of such work. The Employer will be responsible for Salman Al Kaifa, Amir of Bahrain, issued his Amiri than 28 days after five continuous years of service.
 A worker shall be entitled to such leave upon a First: — Whether or not complainants are entitled to complainants-appellants are supported by
quantum meruit in respect of the proportion of his the benefits provided by Amiri Decree No. 23 of substantial evidence;
service in that year. Bahrain; (f) Whether or not the POEA awarded sums beyond
Art. 107: A contract of employment made for a (a) Whether or not the complainants who have what the complainants-appellants prayed for; and, if
period of indefinite duration may be terminated by worked in Bahrain are entitled to the above- so, whether or not these awards are valid.
either party thereto after giving the other party mentioned benefits. Fifth: — Whether or not the POEA erred in holding
thirty days' prior notice before such termination, in (b) Whether or not Art. 44 of the same Decree respondents AIBC and Brown & Root jointly are
writing, in respect of monthly paid workers and (allegedly prescribing a more favorable treatment of severally liable for the judgment awards despite the
fifteen days' notice in respect of other workers. The alien employees) bars complainants from enjoying alleged finding that the former was the employer of
party terminating a contract without giving the its benefits. the complainants;
required notice shall pay to the other party Second: — Assuming that Amiri Decree No. 23 of (a) Whether or not the POEA has acquired
compensation equivalent to the amount of wages Bahrain is applicable in these cases, whether or not jurisdiction over Brown & Root;
payable to the worker for the period of such notice complainants' claim for the benefits provided (b) Whether or not the undisputed fact that AIBC
or the unexpired portion thereof. therein have prescribed. was a licensed construction contractor precludes a
Art. 111: . . . the employer concerned shall pay to Third: — Whether or not the instant cases qualify as finding that Brown & Root is liable for complainants
such worker, upon termination of employment, a a class suit. claims.
leaving indemnity for the period of his employment Fourth: — Whether or not the proceedings Sixth: — Whether or not the POEA Administrator's
calculated on the basis of fifteen days' wages for conducted by the POEA, as well as the decision that failure to hold respondents in default constitutes a
each year of the first three years of service and of is the subject of these appeals, conformed with the reversible error.
one month's wages for each year of service requirements of due process; Seventh: — Whether or not the POEA Administrator
thereafter. Such worker shall be entitled to payment (a) Whether or not the respondent-appellant was erred in dismissing the following claims:
of leaving indemnity upon a quantum meruit in denied its right to due process; a. Unexpired portion of contract;
proportion to the period of his service completed (b) Whether or not the admission of evidence by the b. Interest earnings of Travel and Reserve Fund;
within a year. POEA after these cases were submitted for decision c. Retirement and Savings Plan benefits;
All the individual complainants-appellants have was valid; d. War Zone bonus or premium pay of at least 100%
already been repatriated to the Philippines at the (c) Whether or not the POEA acquired jurisdiction of basic pay;
time of the filing of these cases (R.R. No. 104776, over Brown & Root International, Inc.; e. Area Differential Pay;
Rollo, pp. 59-65). (d) Whether or not the judgment awards are f. Accrued interests on all the unpaid benefits;
IV supported by substantial evidence; g. Salary differential pay;
The issues raised before and resolved by the NLRC (e) Whether or not the awards based on the h. Wage differential pay;
were: averages and formula presented by the i. Refund of SSS premiums not remitted to SSS;
 j. Refund of withholding tax not remitted to BIR; NLRC, however, held that the Amiri Decree No. 23 at the very least, the indirect employer, with AIBC as
k. Fringe benefits under B & R's "A Summary of applied only to the claimants, who worked in Bahrain, the labor contractor.
Employee Benefits" (Annex "Q" of Amended and set aside awards of the POEA Administrator in NLRC also held that jurisdiction over BRII was
Complaint); favor of the claimants, who worked elsewhere. acquired by the POEA Administrator through the
l. Moral and exemplary damages; On the second issue, NLRC ruled that the prescriptive summons served on AIBC, its local agent.
m. Attorney's fees of at least ten percent of the period for the filing of the claims of the complainants On the sixth issue, NLRC held that the POEA
judgment award; was three years, as provided in Article 291 of the Administrator was correct in denying the Motion to
n. Other reliefs, like suspending and/or cancelling Labor Code of the Philippines, and not ten years as Declare AIBC in default.
the license to recruit of AIBC and the accreditation provided in Article 1144 of the Civil Code of the On the seventh issue, which involved other money
of B & R issued by POEA; Philippines nor one year as provided in the Amiri claims not based on the Amiri Decree No. 23, NLRC
o. Penalty for violations of Article 34 (prohibited Decree No. 23 of 1976. ruled:
practices), not excluding reportorial requirements On the third issue, NLRC agreed with the POEA (1) that the POEA Administrator has no jurisdiction
thereof. Administrator that the labor cases cannot be treated over the claims for refund of the SSS premiums and
Eighth: — Whether or not the POEA Administrator as a class suit for the simple reason that not all the refund of withholding taxes and the claimants should
erred in not dismissing POEA Case No. (L) 86-65-460 complainants worked in Bahrain and therefore, the file their claims for said refund with the appropriate
on the ground of multiplicity of suits (G.R. Nos. subject matter of the action, the claims arising from government agencies;
104911-14, Rollo, pp. 25-29, 51-55). the Bahrain law, is not of common or general interest (2) the claimants failed to establish that they are
Anent the first issue, NLRC set aside Section 1, Rule to all the complainants. entitled to the claims which are not based on the
129 of the 1989 Revised Rules on Evidence governing On the fourth issue, NLRC found at least three overseas employment contracts nor the Amiri
the pleading and proof of a foreign law and admitted infractions of the cardinal rules of administrative due Decree No. 23 of 1976;
in evidence a simple copy of the Bahrain's Amiri process: namely, (1) the failure of the POEA (3) that the POEA Administrator has no jurisdiction
Decree No. 23 of 1976 (Labour Law for the Private Administrator to consider the evidence presented by over claims for moral and exemplary damages and
Sector). NLRC invoked Article 221 of the Labor Code AIBC and BRII; (2) some findings of fact were not nonetheless, the basis for granting said damages was
of the Philippines, vesting on the Commission ample supported by substantial evidence; and (3) some of not established;
discretion to use every and all reasonable means to the evidence upon which the decision was based (4) that the claims for salaries corresponding to the
ascertain the facts in each case without regard to the were not disclosed to AIBC and BRII during the unexpired portion of their contract may be allowed if
technicalities of law or procedure. NLRC agreed with hearing. filed within the three-year prescriptive period;
the POEA Administrator that the Amiri Decree No. 23, On the fifth issue, NLRC sustained the ruling of the (5) that the allegation that complainants were
being more favorable and beneficial to the workers, POEA Administrator that BRII and AIBC are solidarily prematurely repatriated prior to the expiration of
should form part of the overseas employment liable for the claims of the complainants and held that their overseas contract was not established; and
contract of the complainants. BRII was the actual employer of the complainants, or
(6) that the POEA Administrator has no jurisdiction (3) the NLRC and POEA Administrator erred in not salaries pertaining to the unexpired portion of the
over the complaint for the suspension or cancellation holding that the labor cases filed by AIBC and BRII contracts while others being for pure money claims.
of the AIBC's recruitment license and the cancellation cannot be considered a class suit; Each claimant demanded separate claims peculiar
of the accreditation of BRII. (4) that the prescriptive period for the filing of the only to himself and depending upon the particular
NLRC passed sub silencio the last issue, the claim that claims is ten years; and circumstances obtaining in his case;
POEA Case No. (L) 86-65-460 should have been (5) that NLRC and the POEA Administrator should (4) that the prescriptive period for filing the claims is
dismissed on the ground that the claimants in said have dismissed POEA Case No. L-86-05-460, the case that prescribed by Article 291 of the Labor Code of
case were also claimants in POEA Case No. (L) 84-06- filed by Atty. Florante de Castro (Rollo, pp. 31-40). the Philippines (three years) and not the one
555. Instead of dismissing POEA Case No. (L) 86-65- AIBC and BRII, commenting on the petition in G.R. No. prescribed by Article 1144 of the Civil Code of the
460, the POEA just resolved the corresponding claims 104776, argued: Philippines (ten years); and
in POEA Case No. (L) 84-06-555. In other words, the (1) that they were not responsible for the delay in the (5) that they are not concerned with the issue of
POEA did not pass upon the same claims twice. disposition of the labor cases, considering the great whether POEA Case No. L-86-05-460 should be
V difficulty of getting all the records of the more than dismissed, this being a private quarrel between the
G.R. No. 104776 1,500 claimants, the piece-meal filing of the two labor lawyers (Rollo, pp. 292-305).
Claimants in G.R. No. 104776 based their petition for complaints and the addition of hundreds of new Attorney's Lien
certiorari on the following grounds: claimants by petitioners; On November 12, 1992, Atty. Gerardo A. del Mundo
(1) that they were deprived by NLRC and the POEA of (2) that considering the number of complaints and moved to strike out the joint manifestations and
their right to a speedy disposition of their cases as claimants, it was impossible to prepare the answers motions of AIBC and BRII dated September 2 and 11,
guaranteed by Section 16, Article III of the 1987 within the ten-day period provided in the NLRC Rules, 1992, claiming that all the claimants who entered into
Constitution. The POEA Administrator allowed private that when the motion to declare AIBC in default was the compromise agreements subject of said
respondents to file their answers in two years (on filed on July 19, 1987, said party had already filed its manifestations and motions were his clients and that
June 19, 1987) after the filing of the original answer, and that considering the staggering amount Atty. Florante M. de Castro had no right to represent
complaint (on April 2, 1985) and NLRC, in total of the claims (more than US$50,000,000.00) and the them in said agreements. He also claimed that the
disregard of its own rules, affirmed the action of the complicated issues raised by the parties, the ten-day claimants were paid less than the award given them
POEA Administrator; rule to answer was not fair and reasonable; by NLRC; that Atty. De Castro collected additional
(2) that NLRC and the POEA Administrator should (3) that the claimants failed to refute NLRC's finding attorney's fees on top of the 25% which he was
have declared AIBC and BRII in default and should that entitled to receive; and that the consent of the
have rendered summary judgment on the basis of the there was no common or general interest in the claimants to the compromise agreements and
pleadings and evidence submitted by claimants; subject matter of the controversy — which was the quitclaims were procured by fraud (G.R. No. 104776,
applicability of the Amiri Decree No. 23. Likewise, the Rollo, pp. 838-810). In the Resolution dated
nature of the claims varied, some being based on November 23, 1992, the Court denied the motion to
strike out the Joint Manifestations and Motions dated formula based on an average overtime pay of three contravention of petitioner's constitutional right to
September 2 and 11, 1992 (G.R. Nos. 104911-14, hours a day (Rollo, pp. 18-22). due process; and (3) ordered the POEA Administrator
Rollo, pp. 608-609). The claimants argue that said method was proposed to hold new hearings for the 683 claimants whose
On December 14, 1992, Atty. Del Mundo filed a by BRII itself during the negotiation for an amicable claims had been dismissed for lack of proof by the
"Notice and Claim to Enforce Attorney's Lien," settlement of their money claims in Bahrain as shown POEA Administrator or NLRC itself. Lastly, they allege
alleging that the claimants who entered into in the Memorandum dated April 16, 1983 of the that assuming that the Amiri Decree No. 23 of 1976
compromise agreements with AIBC and BRII with the Ministry of Labor of Bahrain (Rollo, pp. 21-22). was applicable, NLRC erred when it did not apply the
assistance of Atty. De Castro, had all signed a retainer BRII and AIBC, in their Comment, reiterated their one-year prescription provided in said law (Rollo, pp.
agreement with his law firm (G.R. No. 104776, Rollo, contention in G.R. No. 104776 that the prescriptive 29-30).
pp. 623-624; 838-1535). period in the Labor Code of the Philippines, a special VI
Contempt of Court law, prevails over that provided in the Civil Code of G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos.
On February 18, 1993, an omnibus motion was filed the Philippines, a general law. 105029-32
by Atty. Del Mundo to cite Atty. De Castro and Atty. As to the memorandum of the Ministry of Labor of All the petitions raise the common issue of
Katz Tierra for contempt of court and for violation of Bahrain on the method of computing the overtime prescription although they disagreed as to the time
Canons 1, 15 and 16 of the Code of Professional pay, BRII and AIBC claimed that they were not bound that should be embraced within the prescriptive
Responsibility. The said lawyers allegedly misled this by what appeared therein, because such period.
Court, by making it appear that the claimants who memorandum was proposed by a subordinate To the POEA Administrator, the prescriptive period
entered into the compromise agreements were Bahrain official and there was no showing that it was was ten years, applying Article 1144 of the Civil Code
represented by Atty. De Castro, when in fact they approved by the Bahrain Minister of Labor. Likewise, of the Philippines. NLRC believed otherwise, fixing the
were represented by Atty. Del Mundo (G.R. No. they claimed that the averaging method was prescriptive period at three years as provided in
104776, Rollo, pp. 1560-1614). discussed in the course of the negotiation for the Article 291 of the Labor Code of the Philippines.
On September 23, 1994, Atty. Del Mundo reiterated amicable settlement of the dispute and any offer The claimants in G.R. No. 104776 and G.R. Nos.
his charges against Atty. De Castro for unethical made by a party therein could not be used as an 104911-14, invoking different grounds, insisted that
practices and moved for the voiding of the quitclaims admission by him (Rollo, pp. 228-236). NLRC erred in ruling that the prescriptive period
submitted by some of the claimants. G.R. Nos. 105029-32 applicable to the claims was three years, instead of
G.R. Nos. 104911-14 In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC ten years, as found by the POEA Administrator.
The claimants in G.R. Nos. 104911-14 based their gravely abused its discretion when it: (1) enforced the The Solicitor General expressed his personal view that
petition for certiorari on the grounds that NLRC provisions of the Amiri Decree No. 23 of 1976 and not the prescriptive period was one year as prescribed by
gravely abused its discretion when it: (1) applied the the terms of the employment contracts; (2) granted the Amiri Decree No. 23 of 1976 but he deferred to
three-year prescriptive period under the Labor Code claims for holiday, overtime and leave indemnity pay the ruling of NLRC that Article 291 of the Labor Code
of the Philippines; and (2) it denied the claimant's and other benefits, on evidence admitted in of the Philippines was the operative law.
The POEA Administrator held the view that: suffered the infirmity of being prescribed (G.R. No. of limitation as "substantive" or "procedural." NLRC
These money claims (under Article 291 of the Labor 104776, Rollo, 89-90). cited the decision in Bournias v. Atlantic Maritime
Code) refer to those arising from the employer's In overruling the POEA Administrator, and holding Company (220 F. 2d. 152, 2d Cir. [1955], where the
violation of the employee's right as provided by the that the prescriptive period is three years as provided issue was the applicability of the Panama Labor Code
Labor Code. in Article 291 of the Labor Code of the Philippines, the in a case filed in the State of New York for claims
In the instant case, what the respondents violated are NLRC argued as follows: arising from said Code. In said case, the claims would
not the rights of the workers as provided by the Labor The Labor Code provides that "all money claims have prescribed under the Panamanian Law but not
Code, but the provisions of the Amiri Decree No. 23 arising from employer-employee relations . . . shall be under the Statute of Limitations of New York. The U.S.
issued in Bahrain, which ipso facto amended the filed within three years from the time the cause of Circuit Court of Appeals held that the Panamanian
worker's contracts of employment. Respondents action accrued; otherwise they shall be forever Law was procedural as it was not "specifically
consciously failed to conform to these provisions barred" (Art. 291, Labor Code, as amended). This intended to be substantive," hence, the prescriptive
which specifically provide for the increase of the three-year prescriptive period shall be the one period provided in the law of the forum should apply.
worker's rate. It was only after June 30, 1983, four applied here and which should be reckoned from the The Court observed:
months after the brown builders brought a suit date of repatriation of each individual complainant, . . . And where, as here, we are dealing with a statute
against B & R in Bahrain for this same claim, when considering the fact that the case is having (sic) filed of limitations of a foreign country, and it is not clear
respondent AIBC's contracts have undergone in this country. We do not agree with the POEA on the face of the statute that its purpose was to limit
amendments in Bahrain for the new hires/renewals Administrator that this three-year prescriptive period the enforceability, outside as well as within the
(Respondent's Exhibit 7). applies only to money claims specifically recoverable foreign country concerned, of the substantive rights
Hence, premises considered, the applicable law of under the Philippine Labor Code. Article 291 gives no to which the statute pertains, we think that as a
prescription to this instant case is Article 1144 of the such indication. Likewise, We can not consider yardstick for determining whether that was the
Civil Code of the Philippines, which provides: complainants' cause/s of action to have accrued from purpose this test is the most satisfactory one. It does
Art. 1144. The following actions may be brought a violation of their employment contracts. There was not lead American courts into the necessity of
within ten years from the time the cause of action no violation; the claims arise from the benefits of the examining into the unfamiliar peculiarities and
accrues: law of the country where they worked. (G.R. No. refinements of different foreign legal systems. . .
(1) Upon a written contract; 104776, Rollo, pp. The court further noted:
(2) Upon an obligation created by law; 90-91). xxx xxx xxx
Thus, herein money claims of the complainants Anent the applicability of the one-year prescriptive Applying that test here it appears to us that the
against the respondents shall prescribe in ten years period as provided by the Amiri Decree No. 23 of libelant is entitled to succeed, for the respondents
from August 16, 1976. Inasmuch as all claims were 1976, NLRC opined that the applicability of said law have failed to satisfy us that the Panamanian period
filed within the ten-year prescriptive period, no claim was one of characterization, i.e., whether to of limitation in question was specifically aimed
characterize the foreign law on prescription or statute against the particular rights which the libelant seeks
 to enforce. The Panama Labor Code is a statute employee's right as provided by the Labor Code." based upon a foreign substantive law (Restatement of
having broad objectives, viz: "The present Code They assert that their claims are based on the the Conflict of Laws, Sec. 685; Salonga, Private
regulates the relations between capital and labor, violation of their employment contracts, as amended International Law, 131 [1979]).
placing them on a basis of social justice, so that, by the Amiri Decree No. 23 of 1976 and therefore the A law on prescription of actions is sui generis in
without injuring any of the parties, there may be claims may be brought within ten years as provided Conflict of Laws in the sense that it may be viewed
guaranteed for labor the necessary conditions for a by Article 1144 of the Civil Code of the Philippines either as procedural or substantive, depending on the
normal life and to capital an equitable return to its (Rollo, G.R. Nos. 104911-14, pp. characterization given such a law.
investment." In pursuance of these objectives the 18-21). To bolster their contention, they cite PALEA v. Thus in Bournias v. Atlantic Maritime Company,
Code gives laborers various rights against their Philippine Airlines, Inc., 70 SCRA 244 (1976). supra, the American court applied the statute of
employers. Article 623 establishes the period of AIBC and BRII, insisting that the actions on the claims limitations of New York, instead of the Panamanian
limitation for all such rights, except certain ones have prescribed under the Amiri Decree No. 23 of law, after finding that there was no showing that the
which are enumerated in Article 621. And there is 1976, argue that there is in force in the Philippines a Panamanian law on prescription was intended to be
nothing in the record to indicate that the "borrowing law," which is Section 48 of the Code of substantive. Being considered merely a procedural
Panamanian legislature gave special consideration to Civil Procedure and that where such kind of law law even in Panama, it has to give way to the law of
the impact of Article 623 upon the particular rights exists, it takes precedence over the common-law the forum on prescription of actions.
sought to be enforced here, as distinguished from conflicts rule (G.R. No. 104776, Rollo, pp. 45-46). However, the characterization of a statute into a
the other rights to which that Article is also First to be determined is whether it is the Bahrain law procedural or substantive law becomes irrelevant
applicable. Were we confronted with the question of on prescription of action based on the Amiri Decree when the country of the forum has a "borrowing
whether the limitation period of Article 621 (which No. 23 of 1976 or a Philippine law on prescription that statute." Said statute has the practical effect of
carves out particular rights to be governed by a shall be the governing law. treating the foreign statute of limitation as one of
shorter limitation period) is to be regarded as Article 156 of the Amiri Decree No. 23 of 1976 substance (Goodrich, Conflict of Laws 152-153
"substantive" or "procedural" under the rule of provides: [1938]). A "borrowing statute" directs the state of the
"specifity" we might have a different case; but here A claim arising out of a contract of employment shall forum to apply the foreign statute of limitations to
on the surface of things we appear to be dealing not be actionable after the lapse of one year from the the pending claims based on a foreign law (Siegel,
with a "broad," and not a "specific," statute of date of the expiry of the contract. (G.R. Nos. 105029- Conflicts, 183 [1975]). While there are several kinds
limitations (G.R. No. 104776, Rollo, pp. 31, Rollo, p. 226). of "borrowing statutes," one form provides that an
92-94). As a general rule, a foreign procedural law will not be action barred by the laws of the place where it
Claimants in G.R. Nos. 104911-14 are of the view that applied in the forum. Procedural matters, such as accrued, will not be enforced in the forum even
Article 291 of the Labor Code of the Philippines, service of process, joinder of actions, period and though the local statute has not run against it
which was applied by NLRC, refers only to claims requisites for appeal, and so forth, are governed by (Goodrich and Scoles, Conflict of Laws, 152-153
"arising from the employer's violation of the the laws of the forum. This is true even if the action is
[1938]). Section 48 of our Code of Civil Procedure is of The state affirms labor as a primary social economic xxx xxx xxx
this kind. Said Section provides: force. It shall protect the rights of workers and The case of Philippine Air Lines Employees Association
If by the laws of the state or country where the cause promote their welfare (Sec. 18). v. Philippine Air Lines, Inc., 70 SCRA 244 (1976)
of action arose, the action is barred, it is also barred In article XIII on Social Justice and Human Rights, the invoked by the claimants in G.R. Nos. 104911-14 is
in the Philippines Islands. 1987 Constitution provides: inapplicable to the cases at bench (Rollo, p. 21). The
Section 48 has not been repealed or amended by the Sec. 3. The State shall afford full protection to labor, said case involved the correct computation of
Civil Code of the Philippines. Article 2270 of said Code local and overseas, organized and unorganized, and overtime pay as provided in the collective bargaining
repealed only those provisions of the Code of Civil promote full employment and equality of agreements and not the Eight-Hour Labor Law.
Procedures as to which were inconsistent with it. employment opportunities for all. As noted by the Court: "That is precisely why
There is no provision in the Civil Code of the Having determined that the applicable law on petitioners did not make any reference as to the
Philippines, which is inconsistent with or prescription is the Philippine law, the next question is computation for overtime work under the Eight-Hour
contradictory to Section 48 of the Code of Civil whether the prescriptive period governing the filing Labor Law (Secs. 3 and 4, CA No. 494) and instead
Procedure (Paras, Philippine Conflict of Laws 104 [7th of the claims is three years, as provided by the Labor insisted that work computation provided in the
ed.]). Code or ten years, as provided by the Civil Code of collective bargaining agreements between the parties
In the light of the 1987 Constitution, however, the Philippines. be observed. Since the claim for pay differentials is
Section 48 cannot be enforced ex proprio vigore The claimants are of the view that the applicable primarily anchored on the written contracts between
insofar as it ordains the application in this jurisdiction provision is Article 1144 of the Civil Code of the the litigants, the ten-year prescriptive period
of Section 156 of the Amiri Decree No. 23 of 1976. Philippines, which provides: provided by Art. 1144(1) of the New Civil Code should
The courts of the forum will not enforce any foreign The following actions must be brought within ten govern."
claim obnoxious to the forum's public policy years from the time the right of action accrues: Section 7-a of the Eight-Hour Labor Law (CA No. 444
(Canadian Northern Railway Co. v. Eggen, 252 U.S. (1) Upon a written contract; as amended by R.A. No. 19933) provides:
553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce (2) Upon an obligation created by law; Any action to enforce any cause of action under this
the one-year prescriptive period of the Amiri Decree (3) Upon a judgment. Act shall be commenced within three years after the
No. 23 of 1976 as regards the claims in question NLRC, on the other hand, believes that the applicable cause of action accrued otherwise such action shall
would contravene the public policy on the protection provision is Article 291 of the Labor Code of the be forever barred, . . . .
to labor. Philippines, which in pertinent part provides: The court further explained:
In the Declaration of Principles and State Policies, the Money claims-all money claims arising from The three-year prescriptive period fixed in the Eight-
1987 Constitution emphasized that: employer-employee relations accruing during the Hour Labor Law (CA No. 444 as amended) will apply, if
The state shall promote social justice in all phases of effectivity of this Code shall be filed within three (3) the claim for differentials for overtime work is solely
national development. (Sec. 10). years from the time the cause of action accrued, based on said law, and not on a collective bargaining
otherwise they shall be forever barred. agreement or any other contract. In the instant case,
the claim for overtime compensation is not so much case was decided only on January 30, 1989, a clear right to a "speedy disposition of cases" has been
because of Commonwealth Act No. 444, as amended denial of their right to a speedy disposition of the violated, thus:
but because the claim is demandable right of the case; and (2) that NLRC and the POEA Administrator In the determination of whether or not the right to a
employees, by reason of the above-mentioned should have declared AIBC and BRII in default (Rollo, "speedy trial" has been violated, certain factors may
collective bargaining agreement. pp. be considered and balanced against each other.
Section 7-a of the Eight-Hour Labor Law provides the 31-35). These are length of delay, reason for the delay,
prescriptive period for filing "actions to enforce any Claimants invoke a new provision incorporated in the assertion of the right or failure to assert it, and
cause of action under said law." On the other hand, 1987 Constitution, which provides: prejudice caused by the delay. The same factors may
Article 291 of the Labor Code of the Philippines Sec. 16. All persons shall have the right to a speedy also be considered in answering judicial inquiry
provides the prescriptive period for filing "money disposition of their cases before all judicial, quasi- whether or not a person officially charged with the
claims arising from employer-employee relations." judicial, or administrative bodies. administration of justice has violated the speedy
The claims in the cases at bench all arose from the It is true that the constitutional right to "a speedy disposition of cases.
employer-employee relations, which is broader in disposition of cases" is not limited to the accused in Likewise, in Gonzales v. Sandiganbayan, 199 SCRA
scope than claims arising from a specific law or from criminal proceedings but extends to all parties in all 298, (1991), we held:
the collective bargaining agreement. cases, including civil and administrative cases, and in It must be here emphasized that the right to a speedy
The contention of the POEA Administrator, that the all proceedings, including judicial and quasi-judicial disposition of a case, like the right to speedy trial, is
three-year prescriptive period under Article 291 of hearings. Hence, under the Constitution, any party to deemed violated only when the proceeding is
the Labor Code of the Philippines applies only to a case may demand expeditious action on all officials attended by vexatious, capricious, and oppressive
money claims specifically recoverable under said who are tasked with the administration of justice. delays; or when unjustified postponements of the
Code, does not find support in the plain language of However, as held in Caballero v. Alfonso, Jr., 153 SCRA trial are asked for and secured, or when without
the provision. Neither is the contention of the 153 (1987), "speedy disposition of cases" is a relative cause or justified motive a long period of time is
claimants in G.R. Nos. 104911-14 that said Article term. Just like the constitutional guarantee of allowed to elapse without the party having his case
refers only to claims "arising from the employer's "speedy trial" accorded to the accused in all criminal tried.
violation of the employee's right," as provided by the proceedings, "speedy disposition of cases" is a flexible Since July 25, 1984 or a month after AIBC and BRII
Labor Code supported by the facial reading of the concept. It is consistent with delays and depends were served with a copy of the amended complaint,
provision. upon the circumstances of each case. What the claimants had been asking that AIBC and BRII be
VII Constitution prohibits are unreasonable, arbitrary and declared in default for failure to file their answers
G.R. No. 104776 oppressive delays which render rights nugatory. within the ten-day period provided in Section 1, Rule
A. As to the first two grounds for the petition in G.R. Caballero laid down the factors that may be taken III of Book VI of the Rules and Regulations of the
No. 104776, claimants aver: (1) that while their into consideration in determining whether or not the POEA. At that time, there was a pending motion of
complaints were filed on June 6, 1984 with POEA, the AIBC and BRII to strike out of the records the
amended complaint and the "Compliance" of 10. Refund of Withholding Tax not remitted to The hearings on the merits of the claims before the
claimants to the order of the POEA, requiring them to Bureau of Internal Revenue (B.I.R.); POEA Administrator were interrupted several times
submit a bill of particulars. 11. Fringe Benefits under Brown & Root's "A by the various appeals, first to NLRC and then to the
The cases at bench are not of the run-of-the-mill Summary of Employees Benefits consisting of 43 Supreme Court.
variety, such that their final disposition in the pages (Annex "Q" of Amended Complaint); Aside from the inclusion of additional claimants, two
administrative level after seven years from their 12. Moral and Exemplary Damages; new cases were filed against AIBC and BRII on
inception, cannot be said to be attended by 13. Attorney's fees of at least ten percent of October 10, 1985 (POEA Cases Nos.
unreasonable, arbitrary and oppressive delays as to amounts; L-85-10-777 and L-85-10-779). Another complaint was
violate the constitutional rights to a speedy 14. Other reliefs, like suspending and/or cancelling filed on May 29, 1986 (POEA Case No. L-86-05-460).
disposition of the cases of complainants. the license to recruit of AIBC and issued by the NLRC, in exasperation, noted that the exact number
The amended complaint filed on June 6, 1984 POEA; and of claimants had never been completely established
involved a total of 1,767 claimants. Said complaint 15. Penalty for violation of Article 34 (Prohibited (Resolution, Sept. 2, 1991, G.R. No. 104776, Rollo, p.
had undergone several amendments, the first being practices) not excluding reportorial requirements 57). All the three new cases were consolidated with
on April 3, 1985. thereof (NLRC Resolution, September 2, 1991, pp. POEA Case No. L-84-06-555.
The claimants were hired on various dates from 1975 18-19; G.R. No. 104776, Rollo, pp. 73-74). NLRC blamed the parties and their lawyers for the
to 1983. They were deployed in different areas, one Inasmuch as the complaint did not allege with delay in terminating the proceedings, thus:
group in and the other groups outside of, Bahrain. sufficient definiteness and clarity of some facts, the These cases could have been spared the long and
The monetary claims totalling more than US$65 claimants were ordered to comply with the motion of arduous route towards resolution had the parties and
million according to Atty. Del Mundo, included: AIBC for a bill of particulars. When claimants filed their counsel been more interested in pursuing the
1. Unexpired portion of contract; their "Compliance and Manifestation," AIBC moved to truth and the merits of the claims rather than
2. Interest earnings of Travel and Fund; strike out the complaint from the records for failure exhibiting a fanatical reliance on technicalities. Parties
3. Retirement and Savings Plan benefit; of claimants to submit a proper bill of particulars. and counsel have made these cases a litigation of
4. War Zone bonus or premium pay of at least 100% While the POEA Administrator denied the motion to emotion. The intransigence of parties and counsel is
of basic pay; strike out the complaint, he ordered the claimants "to remarkable. As late as last month, this Commission
5. Area Differential pay; correct the deficiencies" pointed out by AIBC. made a last and final attempt to bring the counsel of
6. Accrued Interest of all the unpaid benefits; Before an intelligent answer could be filed in all the parties (this Commission issued a special order
7. Salary differential pay; response to the complaint, the records of directing respondent Brown & Root's resident agent/s
8. Wage Differential pay; employment of the more than 1,700 claimants had to to appear) to come to a more conciliatory stance.
9. Refund of SSS premiums not remitted to Social be retrieved from various countries in the Middle Even this failed (Rollo,
Security System; East. Some of the records dated as far back as 1975. p. 58).
The squabble between the lawyers of claimants all caution to the wind in the matter of elementary is only logical that only those who worked in Bahrain
added to the delay in the disposition of the cases, to rules of procedure and evidence (Rollo, pp. 58-59). shall be entitled to file their claims in a class suit.
the lament of NLRC, which complained: Adding to the confusion in the proceedings before While there are common defendants (AIBC and BRII)
It is very evident from the records that the NLRC, is the listing of some of the complainants in and the nature of the claims is the same (for
protagonists in these consolidated cases appear to be both petitions filed by the two lawyers. As noted by employee's benefits), there is no common question of
not only the individual complainants, on the one NLRC, "the problem created by this situation is that if law or fact. While some claims are based on the Amiri
hand, and AIBC and Brown & Root, on the other one of the two petitions is dismissed, then the parties Law of Bahrain, many of the claimants never worked
hand. The two lawyers for the complainants, Atty. and the public respondents would not know which in that country, but were deployed elsewhere. Thus,
Gerardo Del Mundo and Atty. Florante De Castro, claim of which petitioner was dismissed and which each claimant is interested only in his own demand
have yet to settle the right of representation, each was not." and not in the claims of the other employees of
one persistently claiming to appear in behalf of most B. Claimants insist that all their claims could properly defendants. The named claimants have a special or
of the complainants. As a result, there are two be consolidated in a "class suit" because "all the particular interest in specific benefits completely
appeals by the complainants. Attempts by this named complainants have similar money claims and different from the benefits in which the other named
Commission to resolve counsels' conflicting claims of similar rights sought irrespective of whether they claimants and those included as members of a "class"
their respective authority to represent the worked in Bahrain, United Arab Emirates or in Abu are claiming (Berses v. Villanueva, 25 Phil. 473
complainants prove futile. The bickerings by these Dhabi, Libya or in any part of the Middle East" (Rollo, [1913]). It appears that each claimant is only
two counsels are reflected in their pleadings. In the pp. 35-38). interested in collecting his own claims. A claimants
charges and countercharges of falsification of A class suit is proper where the subject matter of the has no concern in protecting the interests of the
documents and signatures, and in the disbarment controversy is one of common or general interest to other claimants as shown by the fact, that hundreds
proceedings by one against the other. All these have, many and the parties are so numerous that it is of them have abandoned their co-claimants and have
to a large extent, abetted in confounding the issues impracticable to bring them all before the court entered into separate compromise settlements of
raised in these cases, jumble the presentation of (Revised Rules of Court, Rule 3, Sec. 12). their respective claims. A principle basic to the
evidence, and even derailed the prospects of an While all the claims are for benefits granted under concept of "class suit" is that plaintiffs brought on the
amicable settlement. It would not be far-fetched to the Bahrain Law, many of the claimants worked record must fairly represent and protect the interests
imagine that both counsel, unwittingly, perhaps, outside Bahrain. Some of the claimants were of the others (Dimayuga v. Court of Industrial
painted a rainbow for the complainants, with the deployed in Indonesia and Malaysia under different Relations, 101 Phil. 590 [1957]). For this matter, the
proverbial pot of gold at its end containing more than terms and conditions of employment. claimants who worked in Bahrain can not be allowed
US$100 million, the aggregate of the claims in these NLRC and the POEA Administrator are correct in their to sue in a class suit in a judicial proceeding. The most
cases. It is, likewise, not improbable that their stance that inasmuch as the first requirement of a that can be accorded to them under the Rules of
misplaced zeal and exuberance caused them to throw class suit is not present (common or general interest Court is to be allowed to join as plaintiffs in one
based on the Amiri Decree of the State of Bahrain), it complaint (Revised Rules of Court, Rule 3, Sec. 6).
The Court is extra-cautious in allowing class suits While Administrative Circular No. 04-94 extended the G.R. No. 104911-14
because they are the exceptions to the condition sine application of the anti-forum shopping rule to the Claimants charge NLRC with grave abuse of discretion
qua non, requiring the joinder of all indispensable lower courts and administrative agencies, said circular in not accepting their formula of "Three Hours
parties. took effect only on April 1, 1994. Average Daily Overtime" in computing the overtime
In an improperly instituted class suit, there would be POEA and NLRC could not have entertained the payments. They claim that it was BRII itself which
no problem if the decision secured is favorable to the complaint for unethical conduct against Atty. De proposed the formula during the negotiations for the
plaintiffs. The problem arises when the decision is Castro because NLRC and POEA have no jurisdiction settlement of their claims in Bahrain and therefore it
adverse to them, in which case the others who were to investigate charges of unethical conduct of is in estoppel to disclaim said offer (Rollo, pp. 21-22).
impleaded by their self-appointed representatives, lawyers. Claimants presented a Memorandum of the Ministry
would surely claim denial of due process. Attorney's Lien of Labor of Bahrain dated April 16, 1983, which in
C. The claimants in G.R. No. 104776 also urged that The "Notice and Claim to Enforce Attorney's Lien" pertinent part states:
the POEA Administrator and NLRC should have dated December 14, 1992 was filed by Atty. Gerardo After the perusal of the memorandum of the Vice
declared Atty. Florante De Castro guilty of "forum A. Del Mundo to protect his claim for attorney's fees President and the Area Manager, Middle East, of
shopping, ambulance chasing activities, falsification, for legal services rendered in favor of the claimants Brown & Root Co. and the Summary of the
duplicity and other unprofessional activities" and his (G.R. No. 104776, Rollo, pp. 841-844). compensation offered by the Company to the
appearances as counsel for some of the claimants as A statement of a claim for a charging lien shall be employees in respect of the difference of pay of the
illegal (Rollo, pp. 38-40). filed with the court or administrative agency which wages of the overtime and the difference of vacation
The Anti-Forum Shopping Rule (Revised Circular No. renders and executes the money judgment secured leave and the perusal of the documents attached
28-91) is intended to put a stop to the practice of by the lawyer for his clients. The lawyer shall cause thereto i.e., minutes of the meetings between the
some parties of filing multiple petitions and written notice thereof to be delivered to his clients Representative of the employees and the
complaints involving the same issues, with the result and to the adverse party (Revised Rules of Court, Rule management of the Company, the complaint filed by
that the courts or agencies have to resolve the same 138, Sec. 37). The statement of the claim for the the employees on 14/2/83 where they have claimed
issues. Said Rule, however, applies only to petitions charging lien of Atty. Del Mundo should have been as hereinabove stated, sample of the Service Contract
filed with the Supreme Court and the Court of filed with the administrative agency that rendered executed between one of the employees and the
Appeals. It is entitled "Additional Requirements For and executed the judgment. company through its agent in (sic) Philippines, Asia
Petitions Filed with the Supreme Court and the Court Contempt of Court International Builders Corporation where it has been
of Appeals To Prevent Forum Shopping or Multiple The complaint of Atty. Gerardo A. Del Mundo to cite provided for 48 hours of work per week and an
Filing of Petitioners and Complainants." The first Atty. Florante De Castro and Atty. Katz Tierra for annual leave of 12 days and an overtime wage of 1 &
sentence of the circular expressly states that said violation of the Code of Professional Responsibility 1/4 of the normal hourly wage.
circular applies to an governs the filing of petitions in should be filed in a separate and appropriate xxx xxx xxx
the Supreme Court and the Court of Appeals. proceeding.
The Company in its computation reached the The admissibility of the offer of compromise made by proceedings, all doubts in the implementation of the
following averages: BRII as contained in the memorandum is another provisions of the Labor Code and its implementing
A. 1. The average duration of the actual service of the matter. Under Section 27, Rule 130 of the 1989 regulations shall be resolved in favor of labor" (Rollo,
employee is 35 months for the Philippino (sic) Revised Rules on Evidence, an offer to settle a claim is pp. 90-94).
employees . . . . not an admission that anything is due. AIBC and BRII claim that NLRC acted capriciously and
2. The average wage per hour for the Philippino (sic) Said Rule provides: whimsically when it refused to enforce the overseas-
employee is US$2.69 . . . . Offer of compromise not admissible. — In civil cases, employment contracts, which became the law of the
3. The average hours for the overtime is 3 hours plus an offer of compromise is not an admission of any parties. They contend that the principle that a law is
in all public holidays and weekends. liability, and is not admissible in evidence against the deemed to be a part of a contract applies only to
4. Payment of US$8.72 per months (sic) of service as offeror. provisions of Philippine law in relation to contracts
compensation for the difference of the wages of the This Rule is not only a rule of procedure to avoid the executed in the Philippines.
overtime done for each Philippino (sic) employee . . . cluttering of the record with unwanted evidence but a The overseas-employment contracts, which were
(Rollo, p.22). statement of public policy. There is great public prepared by AIBC and BRII themselves, provided that
BRII and AIBC countered: (1) that the Memorandum interest in having the protagonists settle their the laws of the host country became applicable to
was not prepared by them but by a subordinate differences amicable before these ripen into said contracts if they offer terms and conditions more
official in the Bahrain Department of Labor; (2) that litigation. Every effort must be taken to encourage favorable that those stipulated therein. It was
there was no showing that the Bahrain Minister of them to arrive at a settlement. The submission of stipulated in said contracts that:
Labor had approved said memorandum; and (3) that offers and counter-offers in the negotiation table is a The Employee agrees that while in the employ of the
the offer was made in the course of the negotiation step in the right direction. But to bind a party to his Employer, he will not engage in any other business or
for an amicable settlement of the claims and offers, as what claimants would make this Court do, occupation, nor seek employment with anyone other
therefore it was not admissible in evidence to prove would defeat the salutary purpose of the Rule. than the Employer; that he shall devote his entire
that anything is due to the claimants. G.R. Nos. 105029-32 time and attention and his best energies, and abilities
While said document was presented to the POEA A. NLRC applied the Amiri Decree No. 23 of 1976, to the performance of such duties as may be assigned
without observing the rule on presenting official which provides for greater benefits than those to him by the Employer; that he shall at all times be
documents of a foreign government as provided in stipulated in the overseas-employment contracts of subject to the direction and control of the Employer;
Section 24, Rule 132 of the 1989 Revised Rules on the claimants. It was of the belief that "where the and that the benefits provided to Employee
Evidence, it can be admitted in evidence in laws of the host country are more favorable and hereunder are substituted for and in lieu of all other
proceedings before an administrative body. The beneficial to the workers, then the laws of the host benefits provided by any applicable law, provided of
opposing parties have a copy of the said country shall form part of the overseas employment course, that total remuneration and benefits do not
memorandum, and they could easily verify its contract." It quoted with approval the observation of fall below that of the host country regulation or
authenticity and accuracy. the POEA Administrator that ". . . in labor custom, it being understood that should applicable
laws establish that fringe benefits, or other such by one party against the other and that the 1, 21 [1977]). Such party expectation is protected by
benefits additional to the compensation herein employees signed the contracts out of necessity that giving effect to the parties' own choice of the
agreed cannot be waived, Employee agrees that such reduced their bargaining power (Fieldmen's Insurance applicable law (Fricke v. Isbrandtsen Co., Inc., 151 F.
compensation will be adjusted downward so that the Co., Inc. v. Songco, 25 SCRA 70 [1968]). Supp. 465, 467 [1957]). The choice of law must,
total compensation hereunder, plus the non-waivable Applying the said legal precepts, we read the however, bear some relationship to the parties or
benefits shall be equivalent to the compensation overseas-employment contracts in question as their transaction (Scoles and Hayes, Conflict of Law
herein agreed (Rollo, pp. 352-353). adopting the provisions of the Amiri Decree No. 23 of 644-647 [1982]). There is no question that the
The overseas-employment contracts could have been 1976 as part and parcel thereof. contracts sought to be enforced by claimants have a
drafted more felicitously. While a part thereof The parties to a contract may select the law by which direct connection with the Bahrain law because the
provides that the compensation to the employee may it is to be governed (Cheshire, Private International services were rendered in that country.
be "adjusted downward so that the total computation Law, 187 [7th ed.]). In such a case, the foreign law is In Norse Management Co. (PTE) v. National Seamen
(thereunder) plus the non-waivable benefits shall be adopted as a "system" to regulate the relations of the Board, 117 SCRA 486 (1982), the "Employment
equivalent to the compensation" therein agreed, parties, including questions of their capacity to enter Agreement," between Norse Management Co. and
another part of the same provision categorically into the contract, the formalities to be observed by the late husband of the private respondent, expressly
states "that total remuneration and benefits do not them, matters of performance, and so forth (16 Am provided that in the event of illness or injury to the
fall below that of the host country regulation and Jur 2d, employee arising out of and in the course of his
custom." 150-161). employment and not due to his own misconduct,
Any ambiguity in the overseas-employment contracts Instead of adopting the entire mass of the foreign "compensation shall be paid to employee in
should be interpreted against AIBC and BRII, the law, the parties may just agree that specific provisions accordance with and subject to the limitation of the
parties that drafted it (Eastern Shipping Lines, Inc. v. of a foreign statute shall be deemed incorporated Workmen's Compensation Act of the Republic of the
Margarine-Verkaufs-Union, 93 SCRA 257 [1979]). into their contract "as a set of terms." By such Philippines or the Worker's Insurance Act of registry
Article 1377 of the Civil Code of the Philippines reference to the provisions of the foreign law, the of the vessel, whichever is greater." Since the laws of
provides: contract does not become a foreign contract to be Singapore, the place of registry of the vessel in which
The interpretation of obscure words or stipulations in governed by the foreign law. The said law does not the late husband of private respondent served at the
a contract shall not favor the party who caused the operate as a statute but as a set of contractual terms time of his death, granted a better compensation
obscurity. deemed written in the contract (Anton, Private package, we applied said foreign law in preference to
Said rule of interpretation is applicable to contracts of International Law, 197 [1967]; Dicey and Morris, The the terms of the contract.
adhesion where there is already a prepared form Conflict of Laws, 702-703, [8th ed.]). The case of Bagong Filipinas Overseas Corporation v.
containing the stipulations of the employment A basic policy of contract is to protect the expectation National Labor Relations Commission, 135 SCRA 278
contract and the employees merely "take it or leave of the parties (Reese, Choice of Law in Torts and (1985), relied upon by AIBC and BRII is inapposite to
it." The presumption is that there was an imposition Contracts, 16 Columbia Journal of Transnational Law the facts of the cases at bench. The issue in that case
was whether the amount of the death compensation which NLRC found to have been "unilaterally can be readily determined from the uncontroverted
of a Filipino seaman should be determined under the submitted by the claimants and not disclosed to the facts on record (Development Bank of the Philippines
shipboard employment contract executed in the adverse parties" (Rollo, pp. 37-39). v. Intermediate Appellate Court, 190 SCRA 653
Philippines or the Hongkong law. Holding that the NLRC noted that so many pieces of evidentiary [1990]; Pagdonsalan v. National Labor Relations
shipboard employment contract was controlling, the matters were submitted to the POEA administrator by Commission, 127 SCRA 463 [1984]).
court differentiated said case from Norse the claimants after the cases were deemed submitted C. AIBC and BRII charge NLRC with grave abuse of
Management Co. in that in the latter case there was for resolution and which were taken cognizance of by discretion when it ordered the POEA Administrator to
an express stipulation in the employment contract the POEA Administrator in resolving the cases. While hold new hearings for 683 claimants listed in Annex D
that the foreign law would be applicable if it afforded AIBC and BRII had no opportunity to refute said of the Resolution dated September 2, 1991 whose
greater compensation. evidence of the claimants before the POEA claims had been denied by the POEA Administrator
B. AIBC and BRII claim that they were denied by NLRC Administrator, they had all the opportunity to rebut "for lack of proof" and for 69 claimants listed in
of their right to due process when said administrative said evidence and to present their Annex E of the same Resolution, whose claims had
agency granted Friday-pay differential, holiday-pay counter-evidence before NLRC. As a matter of fact, been found by NLRC itself as not "supported by
differential, annual-leave differential and leave AIBC and BRII themselves were able to present before evidence" (Rollo, pp. 41-45).
indemnity pay to the claimants listed in Annex B of NLRC additional evidence which they failed to present NLRC based its ruling on Article 218(c) of the Labor
the Resolution. At first, NLRC reversed the resolution before the POEA Administrator. Code of the Philippines, which empowers it "[to]
of the POEA Administrator granting these benefits on Under Article 221 of the Labor Code of the conduct investigation for the determination of a
a finding that the POEA Administrator failed to Philippines, NLRC is enjoined to "use every and all question, matter or controversy, within its
consider the evidence presented by AIBC and BRII, reasonable means to ascertain the facts in each case jurisdiction, . . . ."
that some findings of fact of the POEA Administrator speedily and objectively and without regard to It is the posture of AIBC and BRII that NLRC has no
were not supported by the evidence, and that some technicalities of law or procedure, all in the interest authority under Article 218(c) to remand a case
of the evidence were not disclosed to AIBC and BRII of due process." involving claims which had already been dismissed
(Rollo, pp. 35-36; 106-107). But instead of remanding In deciding to resolve the validity of certain claims on because such provision contemplates only situations
the case to the POEA Administrator for a new the basis of the evidence of both parties submitted where there is still a question or controversy to be
hearing, which means further delay in the before the POEA Administrator and NLRC, the latter resolved (Rollo, pp. 41-42).
termination of the case, NLRC decided to pass upon considered that it was not expedient to remand the A principle well embedded in Administrative Law is
the validity of the claims itself. It is this procedure cases to the POEA Administrator for that would only that the technical rules of procedure and evidence do
that AIBC and BRII complain of as being irregular and prolong the already protracted legal controversies. not apply to the proceedings conducted by
a "reversible error." Even the Supreme Court has decided appealed cases administrative agencies (First Asian Transport &
They pointed out that NLRC took into consideration on the merits instead of remanding them to the trial Shipping Agency, Inc. v. Ople, 142 SCRA 542 [1986];
evidence submitted on appeal, the same evidence court for the reception of evidence, where the same Asiaworld Publishing House, Inc. v. Ople, 152 SCRA
219 [1987]). This principle is enshrined in Article 221 For review1 is a dismissal2 of a suit to enforce a post- Respondent sought the dismissal of the complaint for,
of the Labor Code of the Philippines and is now the foreign divorce child custody agreement for lack of among others, lack of jurisdiction because of the
bedrock of proceedings before NLRC. jurisdiction. Illinois court’s retention of jurisdiction to enforce the
Notwithstanding the non-applicability of technical divorce decree.
rules of procedure and evidence in administrative The Facts
proceedings, there are cardinal rules which must be The Ruling of the Trial Court
observed by the hearing officers in order to comply Petitioner Herald Dacasin (petitioner), American, and
respondent Sharon Del Mundo Dacasin (respondent), In its Order dated 1 March 2005, the trial court
with the due process requirements of the
Filipino, were married in Manila in April 1994. They sustained respondent’s motion and dismissed the case
Constitution. These cardinal rules are collated in Ang
have one daughter, Stephanie, born on 21 September for lack of jurisdiction. The trial court held that: (1) it
Tibay v. Court of Industrial Relations, 69 Phil. 635
1995. In June 1999, respondent sought and obtained is precluded from taking cognizance over the suit
(1940). from the Circuit Court, 19th Judicial Circuit, Lake considering the Illinois court’s retention of jurisdiction
VIII County, Illinois (Illinois court) a divorce decree to enforce its divorce decree, including its order
The three petitions were filed under Rule 65 of the against petitioner.3 In its ruling, the Illinois court awarding sole custody of Stephanie to respondent; (2)
Revised Rules of Court on the grounds that NLRC had dissolved the marriage of petitioner and respondent, the divorce decree is binding on petitioner following
committed grave abuse of discretion amounting to awarded to respondent sole custody of Stephanie and the "nationality rule" prevailing in this jurisdiction;5
lack of jurisdiction in issuing the questioned orders. retained jurisdiction over the case for enforcement and (3) the Agreement is void for contravening Article
We find no such abuse of discretion. purposes. 2035, paragraph 5 of the Civil Code6 prohibiting
WHEREFORE, all the three petitions are DISMISSED. compromise agreements on jurisdiction.7
SO ORDERED. On 28 January 2002, petitioner and respondent
Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur executed in Manila a contract (Agreement 4 ) for the Petitioner sought reconsideration, raising the new
joint custody of Stephanie. The parties chose argument that the divorce decree obtained by
6) Dacasin vs. Dacasin February 5, 2010, Philippine courts as exclusive forum to adjudicate respondent is void. Thus, the divorce decree is no bar
disputes arising from the Agreement. Respondent to the trial court’s exercise of jurisdiction over the
G.R. No. 168785               February 5, 2010 undertook to obtain from the Illinois court an order case.
"relinquishing" jurisdiction to Philippine courts.
HERALD BLACK DACASIN, Petitioner, In its Order dated 23 June 2005, the trial court denied
vs. In 2004, petitioner sued respondent in the Regional reconsideration, holding that unlike in the case of
SHARON DEL MUNDO DACASIN, Respondent. Trial Court of Makati City, Branch 60 (trial court) to respondent, the divorce decree is binding on petitioner
enforce the Agreement. Petitioner alleged that in under the laws of his nationality.
The Case violation of the Agreement, respondent exercised sole
custody over Stephanie. Hence, this petition.
Petitioner submits the following alternative theories Thus, jurisdiction-wise, petitioner went to the right At the time the parties executed the Agreement on 28
for the validity of the Agreement to justify its court. January 2002, two facts are undisputed: (1) Stephanie
enforcement by the trial court: (1) the Agreement was under seven years old (having been born on 21
novated the valid divorce decree, modifying the terms Indeed, the trial court’s refusal to entertain petitioner’s September 1995); and (2) petitioner and respondent
of child custody from sole (maternal) to joint; 8 or (2) suit was grounded not on its lack of power to do so but were no longer married under the laws of the United
the Agreement is independent of the divorce decree on its thinking that the Illinois court’s divorce decree States because of the divorce decree. The relevant
obtained by respondent. stripped it of jurisdiction. This conclusion is Philippine law on child custody for spouses separated
unfounded. What the Illinois court retained was in fact or in law15 (under the second paragraph of
The Issue "jurisdiction x x x for the purpose of enforcing all and Article 213 of the Family Code) is also undisputed:
sundry the various provisions of [its] Judgment for "no child under seven years of age shall be separated
The question is whether the trial court has jurisdiction Dissolution."11 Petitioner’s suit seeks the enforcement from the mother x x x."16 (This statutory awarding of
to take cognizance of petitioner’s suit and enforce the not of the "various provisions" of the divorce decree sole parental custody17 to the mother is mandatory, 18
Agreement on the joint custody of the parties’ child. but of the post-divorce Agreement on joint child grounded on sound policy consideration,19 subject only
custody. Thus, the action lies beyond the zone of the to a narrow exception not alleged to obtain here. 20 )
The Ruling of the Court Illinois court’s so-called "retained jurisdiction." Clearly then, the Agreement’s object to establish a
post-divorce joint custody regime between respondent
The trial court has jurisdiction to entertain petitioner’s Petitioner’s Suit Lacks Cause of Action and petitioner over their child under seven years old
suit but not to enforce the Agreement which is void. contravenes Philippine law.
However, factual and equity considerations militate The foregoing notwithstanding, the trial court cannot
against the dismissal of petitioner’s suit and call for enforce the Agreement which is contrary to law. The Agreement is not only void ab initio for being
the remand of the case to settle the question of contrary to law, it has also been repudiated by the
Stephanie’s custody. In this jurisdiction, parties to a contract are free to mother when she refused to allow joint custody by the
stipulate the terms of agreement subject to the father. The Agreement would be valid if the spouses
Regional Trial Courts Vested With Jurisdiction minimum ban on stipulations contrary to law, morals, have not divorced or separated because the law
to Enforce Contracts good customs, public order, or public policy.12 provides for joint parental authority when spouses live
Otherwise, the contract is denied legal existence, together.21 However, upon separation of the spouses,
Subject matter jurisdiction is conferred by law. At the deemed "inexistent and void from the beginning."13 the mother takes sole custody under the law if the
time petitioner filed his suit in the trial court, statutory For lack of relevant stipulation in the Agreement, child is below seven years old and any agreement to
law vests on Regional Trial Courts exclusive original these and other ancillary Philippine substantive law the contrary is void. Thus, the law suspends the joint
jurisdiction over civil actions incapable of pecuniary serve as default parameters to test the validity of the custody regime for (1) children under seven of (2)
estimation.9 An action for specific performance, such Agreement’s joint child custody stipulations.14 separated or divorced spouses. Simply put, for a child
as petitioner’s suit to enforce the Agreement on joint within this age bracket (and for commonsensical
child custody, belongs to this species of actions. 10 reasons), the law decides for the separated or divorced
parents how best to take care of the child and that is to It could very well be that Article 213’s bias favoring Article 213 of the Family Code vesting on respondent
give custody to the separated mother. Indeed, the one separated parent (mother) over the other (father) sole custody of Stephanie.
separated parents cannot contract away the provision encourages paternal neglect, presumes incapacity for
in the Family Code on the maternal custody of joint parental custody, robs the parents of custodial Nor can petitioner rely on the divorce decree’s alleged
children below seven years anymore than they can options, or hijacks decision-making between the invalidity - not because the Illinois court lacked
privately agree that a mother who is unemployed, separated parents.25 However, these are objections jurisdiction or that the divorce decree violated Illinois
immoral, habitually drunk, drug addict, insane or which question the law’s wisdom not its validity or law, but because the divorce was obtained by his
afflicted with a communicable disease will have sole uniform enforceability. The forum to air and remedy Filipino spouse26 - to support the Agreement’s
custody of a child under seven as these are reasons these grievances is the legislature, not this Court. At enforceability. The argument that foreigners in this
deemed compelling to preclude the application of the any rate, the rule’s seeming harshness or undesirability jurisdiction are not bound by foreign divorce decrees
exclusive maternal custody regime under the second is tempered by ancillary agreements the separated is hardly novel. Van Dorn v. Romillo 27 settled the
paragraph of Article 213.22 parents may wish to enter such as granting the father matter by holding that an alien spouse of a Filipino is
visitation and other privileges. These arrangements are bound by a divorce decree obtained abroad.28 There,
It will not do to argue that the second paragraph of not inconsistent with the regime of sole maternal we dismissed the alien divorcee’s Philippine suit for
Article 213 of the Family Code applies only to judicial custody under the second paragraph of Article 213 accounting of alleged post-divorce conjugal property
custodial agreements based on its text that "No child which merely grants to the mother final authority on and rejected his submission that the foreign divorce
under seven years of age shall be separated from the the care and custody of the minor under seven years of (obtained by the Filipino spouse) is not valid in this
mother, unless the court finds compelling reasons to age, in case of disagreements.1avvphi1 jurisdiction in this wise:
order otherwise." To limit this provision’s
enforceability to court sanctioned agreements while Further, the imposed custodial regime under the There can be no question as to the validity of that
placing private agreements beyond its reach is to second paragraph of Article 213 is limited in duration, Nevada divorce in any of the States of the United
sanction a double standard in custody regulation of lasting only until the child’s seventh year. From the States. The decree is binding on private respondent as
children under seven years old of separated parents. eighth year until the child’s emancipation, the law an American citizen. For instance, private respondent
This effectively empowers separated parents, by the gives the separated parents freedom, subject to the cannot sue petitioner, as her husband, in any State of
simple expedient of avoiding the courts, to subvert a usual contractual limitations, to agree on custody the Union. What he is contending in this case is that
legislative policy vesting to the separated mother sole regimes they see fit to adopt. Lastly, even supposing the divorce is not valid and binding in this jurisdiction,
custody of her children under seven years of age "to that petitioner and respondent are not barred from the same being contrary to local law and public policy.
avoid a tragedy where a mother has seen her baby torn entering into the Agreement for the joint custody of
away from her."23 This ignores the legislative basis Stephanie, respondent repudiated the Agreement by It is true that owing to the nationality principle
that "[n]o man can sound the deep sorrows of a mother asserting sole custody over Stephanie. Respondent’s embodied in Article 15 of the Civil Code, only
who is deprived of her child of tender age."24 act effectively brought the parties back to ambit of the Philippine nationals are covered by the policy against
default custodial regime in the second paragraph of absolute divorces the same being considered contrary
to our concept of public policy and morality.
However, aliens may obtain divorces abroad, which The Facts of the Case and Nature of Proceeding ANTONIO T. CARPIO
may be recognized in the Philippines, provided they Justify Remand Associate Justice
are valid according to their national law. In this case,
the divorce in Nevada released private respondent Instead of ordering the dismissal of petitioner’s suit,
from the marriage from the standards of American the logical end to its lack of cause of action, we 7) Wildvalley Shipping vs. CA October 6, 2000,
law, under which divorce dissolves the marriage. remand the case for the trial court to settle the question
of Stephanie’s custody. Stephanie is now nearly 15 G.R. No. 119602               October 6, 2000
xxxx years old, thus removing the case outside of the ambit
of the mandatory maternal custody regime under WILDVALLEY SHIPPING CO., LTD. petitioner,
Thus, pursuant to his national law, private respondent Article 213 and bringing it within coverage of the vs.
is no longer the husband of petitioner. He would have default standard on child custody proceedings – the COURT OF APPEALS and PHILIPPINE
no standing to sue in the case below as petitioner’s best interest of the child.30 As the question of custody PRESIDENT LINES INC., respondents.
husband entitled to exercise control over conjugal is already before the trial court and the child’s parents,
assets. As he is bound by the Decision of his own by executing the Agreement, initially showed DECISION
country’s Court, which validly exercised jurisdiction inclination to share custody, it is in the interest of
over him, and whose decision he does not repudiate, swift and efficient rendition of justice to allow the BUENA, J.:
he is estopped by his own representation before said parties to take advantage of the court’s jurisdiction,
Court from asserting his right over the alleged submit evidence on the custodial arrangement best This is a petition for review on certiorari seeking to
conjugal property. (Emphasis supplied) serving Stephanie’s interest, and let the trial court set aside the decision of the Court of Appeals which
render judgment. This disposition is consistent with reversed the decision of the lower court in CA-G.R.
We reiterated Van Dorn in Pilapil v. Ibay-Somera 29 to the settled doctrine that in child custody proceedings, CV No. 36821, entitled "Wildvalley Shipping Co.,
dismiss criminal complaints for adultery filed by the equity may be invoked to serve the child’s best Ltd., plaintiff-appellant, versus Philippine President
alien divorcee (who obtained the foreign divorce interest.31 Lines, Inc., defendant-appellant."
decree) against his former Filipino spouse because he
no longer qualified as "offended spouse" entitled to WHEREFORE, we REVERSE the Orders dated 1 The antecedent facts of the case are as follows:
file the complaints under Philippine procedural rules. March 2005 and 23 June 2005 of the Regional Trial
Thus, it should be clear by now that a foreign divorce Court of Makati City, Branch 60. The case is Sometime in February 1988, the Philippine Roxas, a
decree carries as much validity against the alien REMANDED for further proceedings consistent with vessel owned by Philippine President Lines, Inc.,
divorcee in this jurisdiction as it does in the this ruling. private respondent herein, arrived in Puerto Ordaz,
jurisdiction of the alien’s nationality, irrespective of Venezuela, to load iron ore. Upon the completion of
who obtained the divorce. SO ORDERED. 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 At around 4:35 a.m., the Philippine Roxas ran aground "4. That plaintiff Wildvalley Shipping Co., Inc. is the
Philippine Roxas through the Orinoco River.1 He was in the Orinoco River,16 thus obstructing the ingress owner of the vessel Malandrinon, whose passage was
asked to pilot the said vessel on February 11, 19882 and egress of vessels. obstructed by the vessel Philippine Roxas at Puerto
boarding it that night at 11:00 p.m.3 Ordaz, Venezuela, as specified in par. 4, page 2 of the
As a result of the blockage, the Malandrinon, a vessel complaint;
The master (captain) of the Philippine Roxas, Captain owned by herein petitioner Wildvalley Shipping
Nicandro Colon, was at the bridge together with the Company, Ltd., was unable to sail out of Puerto Ordaz "5. That on February 12, 1988, while the Philippine
pilot (Vasquez), the vessel's third mate (then the on that day. Roxas was navigating the channel at Puerto Ordaz,
officer on watch), and a helmsman when the vessel the said vessel grounded and as a result, obstructed
left the port4 at 1:40 a.m. on February 12, 1988.5 Subsequently, Wildvalley Shipping Company, Ltd. navigation at the channel;
Captain Colon left the bridge when the vessel was filed a suit with the Regional Trial Court of Manila,
under way.6 Branch III against Philippine President Lines, Inc. and "6. That the Orinoco River in Puerto Ordaz is a
Pioneer Insurance Company (the underwriter/insurer compulsory pilotage channel;
The Philippine Roxas experienced some vibrations of Philippine Roxas) for damages in the form of
when it entered the San Roque Channel at mile 172.7 unearned profits, and interest thereon amounting to US "7. That at the time of the incident, the vessel,
The vessel proceeded on its way, with the pilot $400,000.00 plus attorney's fees, costs, and expenses Philippine Roxas, was under the command of the
assuring the watch officer that the vibration was a of litigation. The complaint against Pioneer Insurance pilot Ezzar Solarzano, assigned by the government
result of the shallowness of the channel.8 Company was dismissed in an Order dated November thereat, but plaintiff claims that it is under the
7, 1988.17 command of the master;
Between mile 158 and 157, the vessel again
experienced some vibrations.9 These occurred at 4:12 At the pre-trial conference, the parties agreed on the "8. The plaintiff filed a case in Middleburg, Holland
a.m.10 It was then that the watch officer called the following facts: which is related to the present case;
master to the bridge.11
"1. The jurisdictional facts, as specified in their "9. The plaintiff caused the arrest of the Philippine
The master (captain) checked the position of the respective pleadings; Collier, a vessel owned by the defendant PPL;
vessel12 and verified that it was in the centre of the
channel.13 He then went to confirm, or set down, the "2. That defendant PPL was the owner of the vessel "10. The Orinoco River is 150 miles long and it takes
position of the vessel on the chart.14 He ordered Philippine Roxas at the time of the incident; approximately 12 hours to navigate out of the said
Simplicio A. Monis, Chief Officer of the President river;
Roxas, to check all the double bottom tanks.15 "3. That defendant Pioneer Insurance was the
insurance underwriter for defendant PPL; "11. That no security for the plaintiff's claim was
given until after the Philippine Collier was arrested;
and
"12. That a letter of guarantee, dated 12-May-88 was reversing the Decision of the lower court. Plaintiff- 3. RESPONDENT COURT OF APPEALS
issued by the Steamship Mutual Underwriters Ltd."18 appellant's Complaint is dismissed and it is ordered to SERIOUSLY ERRED IN FINDING THAT THE
pay defendant-appellant the amount of Three Hundred "PHILIPPINE ROXAS" IS SEAWORTHY;
The trial court rendered its decision on October 16, Twenty-three Thousand, Forty-two Pesos and Fifty-
1991 in favor of the petitioner, Wildvalley Shipping three Centavos (₱323,042.53) as and for attorney's 4. RESPONDENT COURT OF APPEALS
Co., Ltd. The dispositive portion thereof reads as fees plus cost of suit. Plaintiff-appellant's appeal is SERIOUSLY ERRED IN DISREGARDING
follows: DISMISSED. VENEZUELAN LAW DESPITE THE FACT THAT
THE SAME HAS BEEN SUBSTANTIALLY
"WHEREFORE, judgment is rendered for the "SO ORDERED."21 PROVED IN THE TRIAL COURT WITHOUT
plaintiff, ordering defendant Philippine President ANY OBJECTION FROM PRIVATE
Lines, Inc. to pay to the plaintiff the sum of U.S. Petitioner filed a motion for reconsideration22 but the RESPONDENT, AND WHOSE OBJECTION WAS
$259,243.43, as actual and compensatory damages, same was denied for lack of merit in the resolution INTERPOSED BELATEDLY ON APPEAL;
and U.S. $162,031.53, as expenses incurred abroad for dated March 29, 1995.23
its foreign lawyers, plus additional sum of U.S. 5. RESPONDENT COURT OF APPEALS
$22,000.00, as and for attorney's fees of plaintiff's Hence, this petition. SERIOUSLY ERRED IN AWARDING
local lawyer, and to pay the cost of this suit. ATTORNEY'S FEES AND COSTS TO PRIVATE
The petitioner assigns the following errors to the court RESPONDENT WITHOUT ANY FAIR OR
"Defendant's counterclaim is dismissed for lack of a quo: REASONABLE BASIS WHATSOEVER;
merit.
1. RESPONDENT COURT OF APPEALS 6. RESPONDENT COURT OF APPEALS
"SO ORDERED."19 SERIOUSLY ERRED IN FINDING THAT UNDER SERIOUSLY ERRED IN NOT FINDING THAT
PHILIPPINE LAW NO FAULT OR NEGLIGENCE PETITIONER'S CAUSE IS MERITORIOUS
Both parties appealed: the petitioner appealing the CAN BE ATTRIBUTED TO THE MASTER NOR HENCE, PETITIONER SHOULD BE ENTITLED
non-award of interest with the private respondent THE OWNER OF THE "PHILIPPINE ROXAS" TO ATTORNEY'S FEES, COSTS AND INTEREST.
questioning the decision on the merits of the case. FOR THE GROUNDING OF SAID VESSEL
RESULTING IN THE BLOCKAGE OF THE RIO The petition is without merit.
After the requisite pleadings had been filed, the Court ORINOCO;
of Appeals came out with its questioned decision The primary issue to be determined is whether or not
dated June 14, 1994,20 the dispositive portion of 2. RESPONDENT COURT OF APPEALS Venezuelan law is applicable to the case at bar.
which reads as follows: SERIOUSLY ERRED IN REVERSING THE
FINDINGS OF FACTS OF THE TRIAL COURT It is well-settled that foreign laws do not prove
"WHEREFORE, finding defendant-appellant's appeal CONTRARY TO EVIDENCE; themselves in our jurisdiction and our courts are not
to be meritorious, judgment is hereby rendered
authorized to take judicial notice of them. Like any The court has interpreted Section 25 (now Section 24) We do not dispute the competency of Capt. Oscar
other fact, they must be alleged and proved.24 to include competent evidence like the testimony of a Leon Monzon, the Assistant Harbor Master and Chief
witness to prove the existence of a written foreign of Pilots at Puerto Ordaz, Venezuela,28 to testify on
A distinction is to be made as to the manner of law.26 the existence of the Reglamento General de la Ley de
proving a written and an unwritten law. The former Pilotaje (pilotage law of Venezuela)29 and the
falls under Section 24, Rule 132 of the Rules of Court, In the noted case of Willamette Iron & Steel Works Reglamento Para la Zona de Pilotaje No 1 del Orinoco
as amended, the entire provision of which is quoted vs. Muzzal,27 it was held that: (rules governing the navigation of the Orinoco River).
hereunder. Where the foreign law sought to be proved Captain Monzon has held the aforementioned posts for
is "unwritten," the oral testimony of expert witnesses "… Mr. Arthur W. Bolton, an attorney-at-law of San eight years.30 As such he is in charge of designating
is admissible, as are printed and published books of Francisco, California, since the year 1918 under oath, the pilots for maneuvering and navigating the Orinoco
reports of decisions of the courts of the country quoted verbatim section 322 of the California Civil River. He is also in charge of the documents that come
concerned if proved to be commonly admitted in such Code and stated that said section was in force at the into the office of the harbour masters.31
courts.25 time the obligations of defendant to the plaintiff were
incurred, i.e. on November 5, 1928 and December 22, Nevertheless, we take note that these written laws
Section 24 of Rule 132 of the Rules of Court, as 1928. This evidence sufficiently established the fact were not proven in the manner provided by Section 24
amended, provides: that the section in question was the law of the State of of Rule 132 of the Rules of Court.
California on the above dates. A reading of sections
"Sec. 24. Proof of official record. -- The record of 300 and 301 of our Code of Civil Procedure will The Reglamento General de la Ley de Pilotaje was
public documents referred to in paragraph (a) of convince one that these sections do not exclude the published in the Gaceta Oficial32 of the Republic of
Section 19, when admissible for any purpose, may be presentation of other competent evidence to prove the Venezuela. A photocopy of the Gaceta Oficial was
evidenced by an official publication thereof or by a existence of a foreign law. presented in evidence as an official publication of the
copy attested by the officer having the legal custody of Republic of Venezuela.
the record, or by his deputy, and accompanied, if the "`The foreign law is a matter of fact …You ask the
record is not kept in the Philippines, with a certificate witness what the law is; he may, from his recollection, The Reglamento Para la Zona de Pilotaje No 1 del
that such officer has the custody. If the office in or on producing and referring to books, say what it is.' Orinoco is published in a book issued by the
which the record is kept is in a foreign country, the (Lord Campbell concurring in an opinion of Lord Ministerio de Comunicaciones of Venezuela.33 Only
certificate may be made by a secretary of the embassy Chief Justice Denman in a well-known English case a photocopy of the said rules was likewise presented
or legation, consul general, consul, vice consul, or where a witness was called upon to prove the Roman as evidence.
consular agent or by any officer in the foreign service laws of marriage and was permitted to testify, though
of the Philippines stationed in the foreign country in he referred to a book containing the decrees of the Both of these documents are considered in Philippine
which the record is kept, and authenticated by the seal Council of Trent as controlling, Jones on Evidence, jurisprudence to be public documents for they are the
of his office." (Underscoring supplied) Second Edition, Volume 4, pages 3148-3152.) x x x." written official acts, or records of the official acts of
the sovereign authority, official bodies and tribunals, a foreign statute is involved, the best evidence rule There being no contractual obligation, the private
and public officers of Venezuela.34 requires that it be proved by a duly authenticated copy respondent is obliged to give only the diligence
of the statute.37 required of a good father of a family in accordance
For a copy of a foreign public document to be with the provisions of Article 1173 of the New Civil
admissible, the following requisites are mandatory: (1) At this juncture, we have to point out that the Code, thus:
It must be attested by the officer having legal custody Venezuelan law was not pleaded before the lower
of the records or by his deputy; and (2) It must be court. "Art. 1173. The fault or negligence of the obligor
accompanied by a certificate by a secretary of the consists in the omission of that diligence which is
embassy or legation, consul general, consul, vice A foreign law is considered to be pleaded if there is an required by the nature of the obligation and
consular or consular agent or foreign service officer, allegation in the pleading about the existence of the corresponds with the circumstances of the persons, of
and with the seal of his office.35 The latter foreign law, its import and legal consequence on the the time and of the place. When negligence shows bad
requirement is not a mere technicality but is intended event or transaction in issue.38 faith, the provisions of articles 1171 and 2201,
to justify the giving of full faith and credit to the paragraph 2, shall apply.
genuineness of a document in a foreign country.36 A review of the Complaint39 revealed that it was
never alleged or invoked despite the fact that the "If the law or contract does not state the diligence
It is not enough that the Gaceta Oficial, or a book grounding of the M/V Philippine Roxas occurred which is to be observed in the performance, that which
published by the Ministerio de Comunicaciones of within the territorial jurisdiction of Venezuela. is expected of a good father of a family shall be
Venezuela, was presented as evidence with Captain required."
Monzon attesting it. It is also required by Section 24 We reiterate that under the rules of private
of Rule 132 of the Rules of Court that a certificate that international law, a foreign law must be properly The diligence of a good father of a family requires
Captain Monzon, who attested the documents, is the pleaded and proved as a fact. In the absence of only that diligence which an ordinary prudent man
officer who had legal custody of those records made pleading and proof, the laws of a foreign country, or would exercise with regard to his own property. This
by a secretary of the embassy or legation, consul state, will be presumed to be the same as our own we have found private respondent to have exercised
general, consul, vice consul or consular agent or by local or domestic law and this is known as processual when the vessel sailed only after the "main engine,
any officer in the foreign service of the Philippines presumption.40 machineries, and other auxiliaries" were checked and
stationed in Venezuela, and authenticated by the seal found to be in good running condition;41 when the
of his office accompanying the copy of the public Having cleared this point, we now proceed to a master left a competent officer, the officer on watch
document. No such certificate could be found in the thorough study of the errors assigned by the petitioner. on the bridge with a pilot who is experienced in
records of the case. navigating the Orinoco River; when the master
Petitioner alleges that there was negligence on the part ordered the inspection of the vessel's double bottom
With respect to proof of written laws, parol proof is of the private respondent that would warrant the award tanks when the vibrations occurred anew.42
objectionable, for the written law itself is the best of damages.
evidence. According to the weight of authority, when
The Philippine rules on pilotage, embodied in in appropriate proceedings in the light of the facts and pilot on board. He remains in control of the ship as he
Philippine Ports Authority Administrative Order No. circumstances of each particular case. can still perform the duties conferred upon him by
03-85, otherwise known as the Rules and Regulations law43 despite the presence of a pilot who is
Governing Pilotage Services, the Conduct of Pilots "x x x temporarily in charge of the vessel. It is not required
and Pilotage Fees in Philippine Ports enunciate the of him to be on the bridge while the vessel is being
duties and responsibilities of a master of a vessel and "Sec. 32. Duties and Responsibilities of the Pilots or navigated by a pilot.
its pilot, among other things. Pilots’ Association. -- The duties and responsibilities
of the Harbor Pilot shall be as follows: However, Section 8 of PPA Administrative Order No.
The pertinent provisions of the said administrative 03-85, provides:
order governing these persons are quoted hereunder: "x x x
"Sec. 8. Compulsory Pilotage Service - For entering a
"Sec. 11. Control of Vessels and Liability for Damage. "f) A pilot shall be held responsible for the direction harbor and anchoring thereat, or passing through rivers
-- On compulsory pilotage grounds, the Harbor Pilot of a vessel from the time he assumes his work as a or straits within a pilotage district, as well as docking
providing the service to a vessel shall be responsible pilot thereof until he leaves it anchored or berthed and undocking at any pier/wharf, or shifting from one
for the damage caused to a vessel or to life and safely; Provided, however, that his responsibility shall berth or another, every vessel engaged in coastwise
property at ports due to his negligence or fault. He can cease at the moment the Master neglects or refuses to and foreign trade shall be under compulsory pilotage.
be absolved from liability if the accident is caused by carry out his order."
force majeure or natural calamities provided he has "xxx."
exercised prudence and extra diligence to prevent or The Code of Commerce likewise provides for the
minimize the damage. obligations expected of a captain of a vessel, to wit: The Orinoco River being a compulsory pilotage
channel necessitated the engaging of a pilot who was
"The Master shall retain overall command of the "Art. 612. The following obligations shall be inherent presumed to be knowledgeable of every shoal, bank,
vessel even on pilotage grounds whereby he can in the office of captain: deep and shallow ends of the river. In his deposition,
countermand or overrule the order or command of the pilot Ezzar Solarzano Vasquez testified that he is an
Harbor Pilot on board. In such event, any damage "x x x official pilot in the Harbour at Port Ordaz,
caused to a vessel or to life and property at ports by Venezuela,44 and that he had been a pilot for twelve
reason of the fault or negligence of the Master shall be "7. To be on deck on reaching land and to take (12) years.45 He also had experience in navigating the
the responsibility and liability of the registered owner command on entering and leaving ports, canals, waters of the Orinoco River.46
of the vessel concerned without prejudice to recourse roadsteads, and rivers, unless there is a pilot on board
against said Master. discharging his duties. x x x." The law does provide that the master can countermand
or overrule the order or command of the harbor pilot
"Such liability of the owner or Master of the vessel or The law is very explicit. The master remains the on board. The master of the Philippine Roxas deemed
its pilots shall be determined by competent authority overall commander of the vessel even when there is a it best not to order him (the pilot) to stop the vessel,47
mayhap, because the latter had assured him that they and skill. But the pilot of a river vessel, like the harbor negligence. And it will make no difference in the case
were navigating normally before the grounding of the pilot, is selected for the individual's personal that the pilot, if any is employed, is required to be a
vessel.48 Moreover, the pilot had admitted that on knowledge of the topography through which the vessel licensed pilot; provided the master is at liberty to take
account of his experience he was very familiar with is steered."50 a pilot, or not, at his pleasure, for in such a case the
the configuration of the river as well as the course master acts voluntarily, although he is necessarily
headings, and that he does not even refer to river We find that the grounding of the vessel is attributable required to select from a particular class. On the other
charts when navigating the Orinoco River.49 to the pilot. When the vibrations were first felt the hand, if it is compulsive upon the master to take a
watch officer asked him what was going on, and pilot pilot, and, a fortiori, if he is bound to do so under
Based on these declarations, it comes as no surprise to Vasquez replied that "(they) were in the middle of the penalty, then, and in such case, neither he nor the
us that the master chose not to regain control of the channel and that the vibration was as (sic) a result of owner will be liable for injuries occasioned by the
ship. Admitting his limited knowledge of the Orinoco the shallowness of the channel."51 negligence of the pilot; for in such a case the pilot
River, Captain Colon relied on the knowledge and cannot be deemed properly the servant of the master
experience of pilot Vasquez to guide the vessel safely. Pilot Ezzar Solarzano Vasquez was assigned to pilot or the owner, but is forced upon them, and the maxim
the vessel Philippine Roxas as well as other vessels on Qui facit per alium facit per se does not apply."
"Licensed pilots, enjoying the emoluments of the Orinoco River due to his knowledge of the same. (Underscoring supplied)
compulsory pilotage, are in a different class from In his experience as a pilot, he should have been aware
ordinary employees, for they assume to have a skill of the portions which are shallow and which are not. Anent the river passage plan, we find that, while there
and a knowledge of navigation in the particular waters His failure to determine the depth of the said river and was none,52 the voyage has been sufficiently planned
over which their licenses extend superior to that of the his decision to plod on his set course, in all and monitored as shown by the following actions
master; pilots are bound to use due diligence and probability, caused damage to the vessel. Thus, we undertaken by the pilot, Ezzar Solarzano Vasquez, to
reasonable care and skill. A pilot's ordinary skill is in hold him as negligent and liable for its grounding. wit: contacting the radio marina via VHF for
proportion to the pilot's responsibilities, and implies a information regarding the channel, river traffic,53
knowledge and observance of the usual rules of In the case of Homer Ramsdell Transportation soundings of the river, depth of the river, bulletin on
navigation, acquaintance with the waters piloted in Company vs. La Compagnie Generale the buoys.54 The officer on watch also monitored the
their ordinary condition, and nautical skill in avoiding Transatlantique, 182 U.S. 406, it was held that: voyage.55
all known obstructions. The character of the skill and
knowledge required of a pilot in charge of a vessel on "x x x The master of a ship, and the owner also, is We, therefore, do not find the absence of a river
the rivers of a country is very different from that liable for any injury done by the negligence of the passage plan to be the cause for the grounding of the
which enables a navigator to carry a vessel safely in crew employed in the ship. The same doctrine will vessel.
the ocean. On the ocean, a knowledge of the rules of apply to the case of a pilot employed by the master or
navigation, with charts that disclose the places of owner, by whose negligence any injury happens to a The doctrine of res ipsa loquitur does not apply to the
hidden rocks, dangerous shores, or other dangers of third person or his property: as, for example, by a case at bar because the circumstances surrounding the
the way, are the main elements of a pilot's knowledge collision with another ship, occasioned by his injury do not clearly indicate negligence on the part of
the private respondent. For the said doctrine to apply, Samuel Lim, a marine surveyor, at Lloyd's Register of Before we proceed to other matter, will you kindly tell
the following conditions must be met: (1) the accident Shipping testified thus: us what is (sic) the 'class +100A1 Strengthened for
was of such character as to warrant an inference that it Ore Cargoes', mean?
would not have happened except for defendant's "Q Now, in your opinion, as a surveyor, did top side
negligence; (2) the accident must have been caused by tank have any bearing at all to the seaworthiness of the "WITNESS
an agency or instrumentality within the exclusive vessel?
management or control of the person charged with the "A Plus 100A1 means that the vessel was built
negligence complained of; and (3) the accident must "A Well, judging on this particular vessel, and also according to Lloyd's rules and she is capable of
not have been due to any voluntary action or basing on the class record of the vessel, wherein carrying ore bulk cargoes, but she is particularly
contribution on the part of the person injured.56 recommendations were made on the top side tank, and capable of carrying Ore Cargoes with No. 2 and No. 8
it was given sufficient time to be repaired, it means holds empty.
As has already been held above, there was a temporary that the vessel is fit to travel even with those defects
shift of control over the ship from the master of the on the ship. "x x x
vessel to the pilot on a compulsory pilotage channel.
Thus, two of the requisites necessary for the doctrine "COURT "COURT
to apply, i.e., negligence and control, to render the
respondent liable, are absent. What do you mean by that? You explain. The vessel is The vessel is classed, meaning?
fit to travel even with defects? Is that what you mean?
As to the claim that the ship was unseaworthy, we Explain. "A Meaning she is fit to travel, your Honor, or
hold that it is not. seaworthy."58
"WITNESS
The Lloyd’s Register of Shipping confirmed the It is not required that the vessel must be perfect. To be
vessel’s seaworthiness in a Confirmation of Class "A Yes, your Honor. Because the class society which seaworthy, a ship must be reasonably fit to perform
issued on February 16, 1988 by finding that "the register (sic) is the third party looking into the the services, and to encounter the ordinary perils of the
above named ship (Philippine Roxas) maintained the condition of the vessel and as far as their record states, voyage, contemplated by the parties to the policy.59
class "+100A1 Strengthened for Ore Cargoes, Nos. 2 the vessel was class or maintained, and she is fit to
and 8 Holds may be empty (CC) and +LMC" from travel during that voyage." As further evidence that the vessel was seaworthy, we
31/12/87 up until the time of casualty on or about quote the deposition of pilot Vasquez:
12/2/88."57 The same would not have been issued had "x x x
not the vessel been built according to the standards set "Q Was there any instance when your orders or
by Lloyd's. "ATTY. MISA directions were not complied with because of the
inability of the vessel to do so?
"A No. "x x x" This Petition for Review on Certiorari 1 seeks to set
aside the October 18, 2000 Decision2 of the Court of
"Q. Was the vessel able to respond to all your Due to the unfounded filing of this case, the private Appeals (CA) in CA-G.R. SP No. 56120 which
commands and orders? respondent was unjustifiably forced to litigate, thus the affirmed the January 15, 1999 Decision3 and
award of attorney’s fees was proper. September 30, 1999 Resolution4 rendered by the
"A. The vessel was navigating normally."60 National Labor Relations Commission (NLRC) (Third
WHEREFORE, IN VIEW OF THE FOREGOING, Division) in POEA ADJ (L) 94-06-2194, ordering
Eduardo P. Mata, Second Engineer of the Philippine the petition is DENIED and the decision of the Court Expertise Search International (ESI), EDI-
Roxas submitted an accident report wherein he stated of Appeals in CA G.R. CV No. 36821 is AFFIRMED. Staffbuilders International, Inc. (EDI), and Omar
that on February 11, 1988, he checked and prepared Ahmed Ali Bin Bechr Est. (OAB) jointly and
the main engine, machineries and all other auxiliaries SO ORDERED. severally to pay Eleazar S. Gran (Gran) the amount of
and found them all to be in good running condition USD 16,150.00 as unpaid salaries.
and ready for maneuvering. That same day the main Bellosillo, (Chairman), Mendoza, Quisumbing, and
engine, bridge and engine telegraph and steering gear De leon, Jr., JJ., concur. The Facts
motor were also tested.61 Engineer Mata also
prepared the fuel for consumption for maneuvering Petitioner EDI is a corporation engaged in recruitment
and checked the engine generators.62 and placement of Overseas Filipino Workers (OFWs).5
ESI is another recruitment agency which collaborated
Finally, we find the award of attorney’s fee with EDI to process the documentation and
justified.1âwphi1 deployment of private respondent to Saudi Arabia.
8) Edi-Staff Builders Int’l vs. NLRC October 26,
Article 2208 of the New Civil Code provides that: 2007, Private respondent Gran was an OFW recruited by
EDI, and deployed by ESI to work for OAB, in
"Art. 2208. In the absence of stipulation, attorney's G.R. No. 145587             October 26, 2007 Riyadh, Kingdom of Saudi Arabia.6
fees and expenses of litigation, other than judicial
costs, cannot be recovered, except: EDI-STAFFBUILDERS INTERNATIONAL, It appears that OAB asked EDI through its October 3,
INC., petitioner, 1993 letter for curricula vitae of qualified applicants
"x x x vs. for the position of "Computer Specialist." 7 In a
NATIONAL LABOR RELATIONS facsimile transmission dated November 29, 1993,
"(11) In any other case where the court deems it just COMMISSION and ELEAZAR S. GRAN, OAB informed EDI that, from the applicants'
and equitable that attorney's fees and expenses of respondents. curricula vitae submitted to it for evaluation, it
litigation should be recovered. selected Gran for the position of "Computer
The Case Specialist." The faxed letter also stated that if Gran
agrees to the terms and conditions of employment submittal of daily activity reports despite several Arbiter Caday also cited the Declaration executed by
contained in it, one of which was a monthly salary of instructions). Gran, to justify that Gran had no claim for unpaid
SR (Saudi Riyal) 2,250.00 (USD 600.00), EDI may salaries or wages against OAB.
arrange for Gran's immediate dispatch.8 On July 11, 1994, Gran received from OAB the total
amount of SR 2,948.00 representing his final pay, and With regard to the issue of illegal dismissal, the Labor
After accepting OAB's offer of employment, Gran on the same day, he executed a Declaration13 releasing Arbiter found that Gran failed to refute EDI's
signed an employment contract9 that granted him a OAB from any financial obligation or otherwise, allegations; namely, (1) that Gran did not submit a
monthly salary of USD 850.00 for a period of two towards him. single activity report of his daily activity as dictated
years. Gran was then deployed to Riyadh, Kingdom of by company policy; (2) that he was not qualified for
Saudi Arabia on February 7, 1994. After his arrival in the Philippines, Gran instituted a the job as computer specialist due to his insufficient
complaint, on July 21, 1994, against ESI/EDI, OAB, knowledge in programming and lack of knowledge in
Upon arrival in Riyadh, Gran questioned the Country Bankers Insurance Corporation, and Western ACAD system; (3) that Gran refused to follow
discrepancy in his monthly salary—his employment Guaranty Corporation with the NLRC, National management's instruction for him to gain more
contract stated USD 850.00; while his Philippine Capital Region, Quezon City, which was docketed as knowledge of the job to prove his worth as computer
Overseas Employment Agency (POEA) Information POEA ADJ (L) 94-06-2194 for underpayment of specialist; (4) that Gran's employment contract had
Sheet indicated USD 600.00 only. However, through wages/salaries and illegal dismissal. never been substituted; (5) and that Gran was paid a
the assistance of the EDI office in Riyadh, OAB monthly salary of USD 850.00, and USD 350.00
agreed to pay Gran USD 850.00 a month.10 The Ruling of the Labor Arbiter monthly as food allowance.

After Gran had been working for about five months In his February 10, 1998 Decision,14 Labor Arbiter Accordingly, the Labor Arbiter decided that Gran was
for OAB, his employment was terminated through Manuel R. Caday, to whom Gran's case was assigned, validly dismissed from his work due to
OAB's July 9, 1994 letter,11 on the following grounds: ruled that there was neither underpayment nor illegal insubordination, disobedience, and his failure to
dismissal. submit daily activity reports.
1. Non-compliance to contract requirements by the
recruitment agency primarily on your salary and The Labor Arbiter reasoned that there was no Thus, on February 10, 1998, Arbiter Caday dismissed
contract duration. underpayment of salaries since according to the Gran's complaint for lack of merit.
POEA-Overseas Contract Worker (OCW) Information
2. Non-compliance to pre-qualification requirements Sheet, Gran's monthly salary was USD 600.00, and in Dissatisfied, Gran filed an Appeal15 on April 6, 1998
by the recruitment agency[,] vide OAB letter ref. F- his Confirmation of Appointment as Computer with the NLRC, Third Division. However, it appears
5751-93, dated October 3, 1993.12 Specialist, his monthly basic salary was fixed at SR from the records that Gran failed to furnish EDI with a
2,500.00, which was equivalent to USD 600.00. copy of his Appeal Memorandum.
3. Insubordination or disobedience to Top
Management Order and/or instructions (non- The Ruling of the NLRC
The NLRC held that EDI's seemingly harmless SO ORDERED.16 The Ruling of the Court of Appeals
transfer of Gran's contract to ESI is actually
"reprocessing," which is a prohibited transaction under Gran then filed a Motion for Execution of Judgment 17 The CA subsequently ruled on the procedural and
Article 34 (b) of the Labor Code. This scheme on March 29, 1999 with the NLRC and petitioner substantive issues of EDI's petition.
constituted misrepresentation through the conspiracy receiving a copy of this motion on the same date.18
between EDI and ESI in misleading Gran and even On the procedural issue, the appellate court held that
POEA of the actual terms and conditions of the OFW's To prevent the execution, petitioner filed an "Gran's failure to furnish a copy of his appeal
employment. In addition, it was found that Gran did Opposition19 to Gran's motion arguing that the Writ of memorandum [to EDI was] a mere formal lapse, an
not commit any act that constituted a legal ground for Execution cannot issue because it was not notified of excusable neglect and not a jurisdictional defect which
dismissal. The alleged non-compliance with the appellate proceedings before the NLRC and was would justify the dismissal of his appeal." 22 The court
contractual stipulations relating to Gran's salary and not given a copy of the memorandum of appeal nor also held that petitioner EDI failed to prove that
contract duration, and the absence of pre-qualification any opportunity to participate in the appeal. private respondent was terminated for a valid cause
requirements cannot be attributed to Gran but to EDI, and in accordance with due process; and that Gran's
which dealt directly with OAB. In addition, the charge Seeing that the NLRC did not act on Gran's motion Declaration releasing OAB from any monetary
of insubordination was not substantiated, and Gran after EDI had filed its Opposition, petitioner filed, on obligation had no force and effect. The appellate court
was not even afforded the required notice and August 26, 1999, a Motion for Reconsideration of the ratiocinated that EDI had the burden of proving Gran's
investigation on his alleged offenses. NLRC Decision after receiving a copy of the Decision incompetence; however, other than the termination
on August 16, 1999.20 letter, no evidence was presented to show how and
Thus, the NLRC reversed the Labor Arbiter's Decision why Gran was considered to be incompetent. The
and rendered a new one, the dispositive portion of The NLRC then issued a Resolution 21 denying court held that since the law requires the recruitment
which reads: petitioner's Motion for Reconsideration, ratiocinating agencies to subject OFWs to trade tests before
that the issues and arguments raised in the motion deployment, Gran must have been competent and
WHEREFORE, the assailed decision is SET ASIDE. "had already been amply discussed, considered, and qualified; otherwise, he would not have been hired and
Respondents Expertise Search International, Inc., ruled upon" in the Decision, and that there was "no deployed abroad.
EDI Staffbuilders Int'l., Inc. and Omar Ahmed Ali cogent reason or patent or palpable error that warrant
Bin Bechr Est. (OAB) are hereby ordered jointly and any disturbance thereof." As for the charge of insubordination and disobedience
severally liable to pay the complainant Eleazar Gran due to Gran's failure to submit a "Daily Activity
the Philippine peso equivalent at the time of actual Unconvinced of the NLRC's reasoning, EDI filed a Report," the appellate court found that EDI failed to
payment of SIXTEEN THOUSAND ONE Petition for Certiorari before the CA. Petitioner show that the submission of the "Daily Activity
HUNDRED FIFTY US DOLLARS (US$16,150.00) claimed in its petition that the NLRC committed grave Report" was a part of Gran's duty or the company's
representing his salaries for the unexpired portion of abuse of discretion in giving due course to the appeal policy. The court also held that even if Gran was
his contract. despite Gran's failure to perfect the appeal. guilty of insubordination, he should have just been
suspended or reprimanded, but not dismissed.
The CA also held that Gran was not afforded due AND A DEPRIVATION OF PETITIONER EDI'S First Issue: NLRC's Duty is to Require Respondent
process, given that OAB did not abide by the twin RIGHT TO DUE PROCESS AS WOULD JUSTIFY to Provide Petitioner a Copy of the Appeal
notice requirement. The court found that Gran was THE DISMISSAL OF GRAN'S APPEAL.
terminated on the same day he received the Petitioner EDI claims that Gran's failure to furnish it a
termination letter, without having been apprised of the II. WHETHER PETITIONER EDI HAS copy of the Appeal Memorandum constitutes a
bases of his dismissal or afforded an opportunity to ESTABLISHED BY WAY OF SUBSTANTIAL jurisdictional defect and a deprivation of due process
explain his side. EVIDENCE THAT GRAN'S TERMINATION WAS that would warrant a rejection of the appeal.
JUSTIFIABLE BY REASON OF
Finally, the CA held that the Declaration signed by INCOMPETENCE. COROLLARY HERETO, This position is devoid of merit.
Gran did not bar him from demanding benefits to WHETHER THE PRIETO VS. NLRC RULING, AS
which he was entitled. The appellate court found that APPLIED BY THE COURT OF APPEALS, IS In a catena of cases, it was ruled that failure of
the Declaration was in the form of a quitclaim, and as APPLICABLE IN THE INSTANT CASE. appellant to furnish a copy of the appeal to the
such is frowned upon as contrary to public policy adverse party is not fatal to the appeal.
especially where the monetary consideration given in III. WHETHER PETITIONER HAS
the Declaration was very much less than what he was ESTABLISHED BY WAY OF SUBSTANTIAL In Estrada v. National Labor Relations Commission,24
legally entitled to—his backwages amounting to USD EVIDENCE THAT GRAN'S TERMINATION WAS this Court set aside the order of the NLRC which
16,150.00. JUSTIFIABLE BY REASON OF dismissed an appeal on the sole ground that the
INSUBORDINATION AND DISOBEDIENCE. appellant did not furnish the appellee a memorandum
As a result of these findings, on October 18, 2000, the of appeal contrary to the requirements of Article 223
appellate court denied the petition to set aside the IV. WHETHER GRAN WAS AFFORDED DUE of the New Labor Code and Section 9, Rule XIII of its
NLRC Decision. PROCESS PRIOR TO TERMINATION. Implementing Rules and Regulations.

Hence, this instant petition is before the Court. V. WHETHER GRAN IS ENTITLED TO Also, in J.D. Magpayo Customs Brokerage Corp. v.
BACKWAGES FOR THE UNEXPIRED PORTION NLRC, the order of dismissal of an appeal to the
The Issues OF HIS CONTRACT.23 NLRC based on the ground that "there is no showing
whatsoever that a copy of the appeal was served by
Petitioner raises the following issues for our The Court's Ruling the appellant on the appellee"25 was annulled. The
consideration: Court ratiocinated as follows:
The petition lacks merit except with respect to Gran's
I. WHETHER THE FAILURE OF GRAN TO failure to furnish EDI with his Appeal Memorandum The failure to give a copy of the appeal to the adverse
FURNISH A COPY OF HIS APPEAL filed with the NLRC. party was a mere formal lapse, an excusable neglect.
MEMORANDUM TO PETITIONER EDI WOULD Time and again We have acted on petitions to review
CONSTITUTE A JURISDICTIONAL DEFECT decisions of the Court of Appeals even in the absence
of proof of service of a copy thereof to the Court of present proof of service. In compliance with the order, Sec. 13, Rule 13 of the Rules of Court, provides for
Appeals as required by Section 1 of Rule 45, Rules of Gran submitted a copy of Camp Crame Post Office's proofs of service:
Court. We act on the petitions and simply require list of mail/parcels sent on April 7, 1998.30 The post
the petitioners to comply with the rule.26 (Emphasis office's list shows that private respondent Gran sent Section 13. Proof of service.—Proof of personal
supplied.) two pieces of mail on the same date: one addressed to service shall consist of a written admission of the
a certain Dan O. de Guzman of Legaspi Village, party served or the official return of the server, or the
The J.D. Magpayo ruling was reiterated in Carnation Makati; and the other appears to be addressed to Neil affidavit of the party serving, containing a full
Philippines Employees Labor Union-FFW v. National B. Garcia (or Gran),31 of Ermita, Manila—both of statement of the date, place and manner of service. If
Labor Relations Commission,27 Pagdonsalan v. whom are not connected with petitioner. the service is by ordinary mail, proof thereof shall
NLRC,28 and in Sunrise Manning Agency, Inc. v. consist of an affidavit of the person mailing of facts
NLRC.29 This mailing list, however, is not a conclusive proof showing compliance with section 7 of this Rule. If
that EDI indeed received a copy of the Appeal service is made by registered mail, proof shall be
Thus, the doctrine that evolved from these cases is that Memorandum. made by such affidavit and registry receipt issued
failure to furnish the adverse party with a copy of the by the mailing office. The registry return card
appeal is treated only as a formal lapse, an excusable Sec. 5 of the NLRC Rules of Procedure (1990) shall be filed immediately upon its receipt by the
neglect, and hence, not a jurisdictional defect. provides for the proof and completeness of service in sender, or in lieu thereof the unclaimed letter
Accordingly, in such a situation, the appeal should not proceedings before the NLRC: together with the certified or sworn copy of the
be dismissed; however, it should not be given due notice given by the postmaster to the addressee
course either. As enunciated in J.D. Magpayo, the Section 5.32 Proof and completeness of service.—The (emphasis supplied).
duty that is imposed on the NLRC, in such a case, return is prima facie proof of the facts indicated
is to require the appellant to comply with the rule therein. Service by registered mail is complete upon Based on the foregoing provision, it is obvious that the
that the opposing party should be provided with a receipt by the addressee or his agent; but if the list submitted by Gran is not conclusive proof that he
copy of the appeal memorandum. addressee fails to claim his mail from the post office had served a copy of his appeal memorandum to EDI,
within five (5) days from the date of first notice of the nor is it conclusive proof that EDI received its copy of
While Gran's failure to furnish EDI with a copy of the postmaster, service shall take effect after such time. the Appeal Memorandum. He should have submitted
Appeal Memorandum is excusable, the abject failure (Emphasis supplied.) an affidavit proving that he mailed the Appeal
of the NLRC to order Gran to furnish EDI with the Memorandum together with the registry receipt issued
Appeal Memorandum constitutes grave abuse of Hence, if the service is done through registered mail, it by the post office; afterwards, Gran should have
discretion. is only deemed complete when the addressee or his immediately filed the registry return card.
agent received the mail or after five (5) days from the
The records reveal that the NLRC discovered that date of first notice of the postmaster. However, the Hence, after seeing that Gran failed to attach the proof
Gran failed to furnish EDI a copy of the Appeal NLRC Rules do not state what would constitute proper of service, the NLRC should not have simply accepted
Memorandum. The NLRC then ordered Gran to proof of service. the post office's list of mail and parcels sent; but it
should have required Gran to properly furnish the The second and third issues have a common matter— as the judge or labor arbiter cannot take judicial notice
opposing parties with copies of his Appeal whether there was just cause for Gran's dismissal— of a foreign law. He is presumed to know only
Memorandum as prescribed in J.D. Magpayo and hence, they will be discussed jointly. domestic or forum law.35
the other cases. The NLRC should not have
proceeded with the adjudication of the case, as this Second and Third Issues: Whether Gran's Unfortunately for petitioner, it did not prove the
constitutes grave abuse of discretion. dismissal is justifiable by reason of incompetence, pertinent Saudi laws on the matter; thus, the
insubordination, and disobedience International Law doctrine of presumed-identity
The glaring failure of NLRC to ensure that Gran approach or processual presumption comes into
should have furnished petitioner EDI a copy of the In cases involving OFWs, the rights and obligations play.36 Where a foreign law is not pleaded or, even if
Appeal Memorandum before rendering judgment among and between the OFW, the local pleaded, is not proved, the presumption is that foreign
reversing the dismissal of Gran's complaint constitutes recruiter/agent, and the foreign employer/principal are law is the same as ours.37 Thus, we apply Philippine
an evasion of the pertinent NLRC Rules and governed by the employment contract. A contract labor laws in determining the issues presented before
established jurisprudence. Worse, this failure deprived freely entered into is considered law between the us.
EDI of procedural due process guaranteed by the parties; and hence, should be respected. In formulating
Constitution which can serve as basis for the the contract, the parties may establish such Petitioner EDI claims that it had proven that Gran was
nullification of proceedings in the appeal before the stipulations, clauses, terms and conditions as they may legally dismissed due to incompetence and
NLRC. One can only surmise the shock and dismay deem convenient, provided they are not contrary to insubordination or disobedience.
that OAB, EDI, and ESI experienced when they law, morals, good customs, public order, or public
thought that the dismissal of Gran's complaint became policy.34 This claim has no merit.
final, only to receive a copy of Gran's Motion for
Execution of Judgment which also informed them that In the present case, the employment contract signed by In illegal dismissal cases, it has been established by
Gran had obtained a favorable NLRC Decision. This Gran specifically states that Saudi Labor Laws will Philippine law and jurisprudence that the employer
is not level playing field and absolutely unfair and govern matters not provided for in the contract (e.g. should prove that the dismissal of employees or
discriminatory against the employer and the job specific causes for termination, termination personnel is legal and just.
recruiters. The rights of the employers to procedural procedures, etc.). Being the law intended by the
due process cannot be cavalierly disregarded for they parties (lex loci intentiones) to apply to the contract, Section 33 of Article 277 of the Labor Code38 states
too have rights assured under the Constitution. Saudi Labor Laws should govern all matters relating that:
to the termination of the employment of Gran.
However, instead of annulling the dispositions of the ART. 277. MISCELLANEOUS PROVISIONS39
NLRC and remanding the case for further proceedings In international law, the party who wants to have a
we will resolve the petition based on the records foreign law applied to a dispute or case has the burden (b) Subject to the constitutional right of workers to
before us to avoid a protracted litigation.33 of proving the foreign law. The foreign law is treated security of tenure and their right to be protected
as a question of fact to be properly pleaded and proved against dismissal except for a just and authorized
cause and without prejudice to the requirement of In the instant case, petitioner claims that private it against a standard, benchmark, or criterion.
notice under Article 283 of this Code, the employer respondent Gran was validly dismissed for just cause, However, EDI failed to establish any such bases to
shall furnish the worker whose employment is sought due to incompetence and insubordination or show how petitioner found Gran incompetent.
to be terminated a written notice containing a disobedience. To prove its allegations, EDI submitted
statement of the causes for termination and shall two letters as evidence. The first is the July 9, 1994 In addition, the elements that must concur for the
afford the latter ample opportunity to be heard and to termination letter,43 addressed to Gran, from Andrea E. charge of insubordination or willful disobedience to
defend himself with the assistance of his Nicolaou, Managing Director of OAB. The second is prosper were not present.
representative if he so desires in accordance with an unsigned April 11, 1995 letter44 from OAB
company rules and regulations promulgated pursuant addressed to EDI and ESI, which outlined the reasons In Micro Sales Operation Network v. NLRC, we held
to guidelines set by the Department of Labor and why OAB had terminated Gran's employment. that:
Employment. Any decision taken by the employer
shall be without prejudice to the right of the workers Petitioner claims that Gran was incompetent for the For willful disobedience to be a valid cause for
to contest the validity or legality of his dismissal by Computer Specialist position because he had dismissal, the following twin elements must concur:
filing a complaint with the regional branch of the "insufficient knowledge in programming and zero (1) the employee's assailed conduct must have been
National Labor Relations Commission. The burden knowledge of [the] ACAD system."45 Petitioner also willful, that is, characterized by a wrongful and
of proving that the termination was for a valid or claims that Gran was justifiably dismissed due to perverse attitude; and (2) the order violated must have
authorized cause shall rest on the employer. x x x insubordination or disobedience because he been reasonable, lawful, made known to the employee
continually failed to submit the required "Daily and must pertain to the duties which he had been
In many cases, it has been held that in termination Activity Reports."46 However, other than the engaged to discharge.47
disputes or illegal dismissal cases, the employer has abovementioned letters, no other evidence was
the burden of proving that the dismissal is for just and presented to show how and why Gran was considered EDI failed to discharge the burden of proving Gran's
valid causes; and failure to do so would necessarily incompetent, insubordinate, or disobedient. Petitioner insubordination or willful disobedience. As indicated
mean that the dismissal was not justified and therefore EDI had clearly failed to overcome the burden of by the second requirement provided for in Micro Sales
illegal.40 Taking into account the character of the proving that Gran was validly dismissed. Operation Network, in order to justify willful
charges and the penalty meted to an employee, the disobedience, we must determine whether the order
employer is bound to adduce clear, accurate, Petitioner's imputation of incompetence on private violated by the employee is reasonable, lawful, made
consistent, and convincing evidence to prove that the respondent due to his "insufficient knowledge in known to the employee, and pertains to the duties
dismissal is valid and legal.41 This is consistent with programming and zero knowledge of the ACAD which he had been engaged to discharge. In the case at
the principle of security of tenure as guaranteed by the system" based only on the above mentioned letters, bar, petitioner failed to show that the order of the
Constitution and reinforced by Article 277 (b) of the without any other evidence, cannot be given credence. company which was violated—the submission of
Labor Code of the Philippines.42 "Daily Activity Reports"—was part of Gran's duties as
An allegation of incompetence should have a factual a Computer Specialist. Before the Labor Arbiter, EDI
foundation. Incompetence may be shown by weighing should have provided a copy of the company policy,
Gran's job description, or any other document that Therefore, EDI was at fault when it deployed Gran Petitioner EDI claims that private respondent Gran
would show that the "Daily Activity Reports" were who was allegedly "incompetent" for the job. was afforded due process, since he was allowed to
required for submission by the employees, more work and improve his capabilities for five months
particularly by a Computer Specialist. According to petitioner, the Prieto ruling is not prior to his termination.51 EDI also claims that the
applicable because in the case at hand, Gran requirements of due process, as enunciated in Santos,
Even though EDI and/or ESI were merely the local misrepresented himself in his curriculum vitae as a Jr. v. NLRC,52 and Malaya Shipping Services, Inc. v.
employment or recruitment agencies and not the Computer Specialist; thus, he was not qualified for the NLRC,53 cited by the CA in its Decision, were properly
foreign employer, they should have adduced job for which he was hired. observed in the present case.
additional evidence to convincingly show that Gran's
employment was validly and legally terminated. The We disagree. This position is untenable.
burden devolves not only upon the foreign-based
employer but also on the employment or recruitment The CA is correct in applying Prieto. The purpose of In Agabon v. NLRC,54 this Court held that:
agency for the latter is not only an agent of the former, the required trade test is to weed out incompetent
but is also solidarily liable with the foreign principal applicants from the pool of available workers. It is Procedurally, (1) if the dismissal is based on a just
for any claims or liabilities arising from the dismissal supposed to reveal applicants with false educational cause under Article 282, the employer must give the
of the worker.48 backgrounds, and expose bogus qualifications. Since employee two written notices and a hearing or
EDI deployed Gran to Riyadh, it can be presumed that opportunity to be heard if requested by the employee
Thus, petitioner failed to prove that Gran was Gran had passed the required trade test and that Gran before terminating the employment: a notice
justifiably dismissed due to incompetence, is qualified for the job. Even if there was no objective specifying the grounds for which dismissal is sought
insubordination, or willful disobedience. trade test done by EDI, it was still EDI's responsibility a hearing or an opportunity to be heard and after
to subject Gran to a trade test; and its failure to do so hearing or opportunity to be heard, a notice of the
Petitioner also raised the issue that Prieto v. NLRC,49 only weakened its position but should not in any way decision to dismiss; and (2) if the dismissal is based
as used by the CA in its Decision, is not applicable to prejudice Gran. In any case, the issue is rendered moot on authorized causes under Articles 283 and 284, the
the present case. and academic because Gran's incompetency is employer must give the employee and the
unproved. Department of Labor and Employment written
In Prieto, this Court ruled that "[i]t is presumed that notices 30 days prior to the effectivity of his
before their deployment, the petitioners were Fourth Issue: Gran was not Afforded Due Process separation.
subjected to trade tests required by law to be
conducted by the recruiting agency to insure As discussed earlier, in the absence of proof of Saudi Under the twin notice requirement, the employees
employment of only technically qualified workers for laws, Philippine Labor laws and regulations shall must be given two (2) notices before their employment
the foreign principal."50 The CA, using the ruling in govern the relationship between Gran and EDI. Thus, could be terminated: (1) a first notice to apprise the
the said case, ruled that Gran must have passed the our laws and rules on the requisites of due process employees of their fault, and (2) a second notice to
test; otherwise, he would not have been hired. relating to termination of employment shall apply. communicate to the employees that their employment
is being terminated. In between the first and second due process requirements under the Labor Code and July 9, 1994, before the effectivity of R.A. No. 8042,
notice, the employees should be given a hearing or its regulations, OAB, ESI, and EDI, jointly and he is therefore entitled to backwages corresponding to
opportunity to defend themselves personally or by solidarily, are liable to Gran in the amount of PhP the unexpired portion of his contract, which was
counsel of their choice.55 30,000.00 as indemnity. equivalent to USD 16,150.

A careful examination of the records revealed that, Fifth and Last Issue: Gran is Entitled to Petitioner EDI questions the legality of the award of
indeed, OAB's manner of dismissing Gran fell short of Backwages backwages and mainly relies on the Declaration which
the two notice requirement. While it furnished Gran is claimed to have been freely and voluntarily
the written notice informing him of his dismissal, it We reiterate the rule that with regard to employees executed by Gran. The relevant portions of the
failed to furnish Gran the written notice apprising him hired for a fixed period of employment, in cases Declaration are as follows:
of the charges against him, as prescribed by the Labor arising before the effectivity of R.A. No. 8042 58
Code.56 Consequently, he was denied the opportunity (Migrant Workers and Overseas Filipinos Act) on I, ELEAZAR GRAN (COMPUTER SPECIALIST)
to respond to said notice. In addition, OAB did not August 25, 1995, that when the contract is for a fixed AFTER RECEIVING MY FINAL SETTLEMENT
schedule a hearing or conference with Gran to defend term and the employees are dismissed without just ON THIS DATE THE AMOUNT OF:
himself and adduce evidence in support of his cause, they are entitled to the payment of their salaries
defenses. Moreover, the July 9, 1994 termination letter corresponding to the unexpired portion of their S.R. 2,948.00 (SAUDI RIYALS TWO THOUSAND
was effective on the same day. This shows that OAB contract.59 On the other hand, for cases arising after NINE
had already condemned Gran to dismissal, even before the effectivity of R.A. No. 8042, when the termination
Gran was furnished the termination letter. It should of employment is without just, valid or authorized HUNDRED FORTY EIGHT ONLY)
also be pointed out that OAB failed to give Gran the cause as defined by law or contract, the worker shall
chance to be heard and to defend himself with the be entitled to the full reimbursement of his placement REPRESENTING COMPLETE PAYMENT
assistance of a representative in accordance with fee with interest of twelve percent (12%) per annum, (COMPENSATION) FOR THE SERVICES I
Article 277 of the Labor Code. Clearly, there was no plus his salaries for the unexpired portion of his RENDERED TO OAB ESTABLISHMENT.
intention to provide Gran with due process. Summing employment contract or for three (3) months for every
up, Gran was notified and his employment arbitrarily year of the unexpired term whichever is less.60 I HEREBY DECLARE THAT OAB EST. HAS NO
terminated on the same day, through the same letter, FINANCIAL OBLIGATION IN MY FAVOUR
and for unjustified grounds. Obviously, Gran was not In the present case, the employment contract provides AFTER RECEIVING THE ABOVE MENTIONED
afforded due process. that the employment contract shall be valid for a AMOUNT IN CASH.
period of two (2) years from the date the employee
Pursuant to the doctrine laid down in Agabon,57 an starts to work with the employer.61 Gran arrived in I STATE FURTHER THAT OAB EST. HAS NO
employer is liable to pay nominal damages as Riyadh, Saudi Arabia and started to work on February OBLIGATION TOWARDS ME IN WHATEVER
indemnity for violating the employee's right to 7, 1994;62 hence, his employment contract is until FORM.
statutory due process. Since OAB was in breach of the February 7, 1996. Since he was illegally dismissed on
I ATTEST TO THE TRUTHFULNESS OF THIS only where there is clear proof that the waiver was salaries for the remaining duration of his contract and
STATEMENT BY AFFIXING MY SIGNATURE wangled from an unsuspecting or gullible person, or other benefits as employee of OAB. A quitclaim will
VOLUNTARILY. the terms of settlement are unconscionable on its understandably be lower than the sum total of the
face, that the law will step in to annul the amounts and benefits that can possibly be awarded to
SIGNED. questionable transaction. But where it is shown that employees or to be earned for the remainder of the
ELEAZAR GRAN the person making the waiver did so voluntarily, contract period since it is a compromise where the
with full understanding of what he was doing, and employees will have to forfeit a certain portion of the
Courts must undertake a meticulous and rigorous the consideration for the quitclaim is credible and amounts they are claiming in exchange for the early
review of quitclaims or waivers, more particularly reasonable, the transaction must be recognized as a payment of a compromise amount. The court may
those executed by employees. This requirement was valid and binding undertaking. (Emphasis supplied.) however step in when such amount is unconscionably
clearly articulated by Chief Justice Artemio V. low or unreasonable although the employee
Panganiban in Land and Housing Development Is the waiver and quitclaim labeled a Declaration voluntarily agreed to it. In the case of the Declaration,
Corporation v. Esquillo: valid? It is not. the amount is unreasonably small compared to the
future wages of Gran.
Quitclaims, releases and other waivers of benefits The Court finds the waiver and quitclaim null and
granted by laws or contracts in favor of workers void for the following reasons: 3. The factual circumstances surrounding the
should be strictly scrutinized to protect the weak and execution of the Declaration would show that Gran did
the disadvantaged. The waivers should be carefully 1. The salary paid to Gran upon his termination, in the not voluntarily and freely execute the document.
examined, in regard not only to the words and amount of SR 2,948.00, is unreasonably low. As Consider the following chronology of events:
terms used, but also the factual circumstances correctly pointed out by the court a quo, the payment
under which they have been executed.63 (Emphasis of SR 2,948.00 is even lower than his monthly salary a. On July 9, 1994, Gran received a copy of his letter
supplied.) of SR 3,190.00 (USD 850.00). In addition, it is also of termination;
very much less than the USD 16,150.00 which is the
This Court had also outlined in Land and Housing amount Gran is legally entitled to get from petitioner b. On July 10, 1994, Gran was instructed to depart
Development Corporation, citing Periquet v. NLRC,64 EDI as backwages. Saudi Arabia and required to pay his plane ticket;65
the parameters for valid compromise agreements,
waivers, and quitclaims: 2. The Declaration reveals that the payment of SR c. On July 11, 1994, he signed the Declaration;
2,948.00 is actually the payment for Gran's salary for
Not all waivers and quitclaims are invalid as against the services he rendered to OAB as Computer d. On July 12, 1994, Gran departed from Riyadh,
public policy. If the agreement was voluntarily Specialist. If the Declaration is a quitclaim, then the Saudi Arabia; and
entered into and represents a reasonable settlement, it consideration should be much much more than the
is binding on the parties and may not later be monthly salary of SR 3,190.00 (USD 850.00)— e. On July 21, 1994, Gran filed the Complaint before
disowned simply because of a change of mind. It is although possibly less than the estimated Gran's the NLRC.
The foregoing events readily reveal that Gran was 2. The benefits of the employees if possible with the [A]ny compromise settlement voluntarily agreed upon
"forced" to sign the Declaration and constrained to corresponding amounts, which the employees are with the assistance of the Bureau of Labor Relations
receive the amount of SR 2,948.00 even if it was giving up in consideration of the fixed compromise or the regional office of the DOLE, shall be final and
against his will—since he was told on July 10, 1994 to amount; binding upon the parties and the NLRC or any court
leave Riyadh on July 12, 1994. He had no other choice "shall not assume jurisdiction over issues involved
but to sign the Declaration as he needed the amount of 3. A statement that the employer has clearly explained therein except in case of non-compliance thereof or if
SR 2,948.00 for the payment of his ticket. He could to the employee in English, Filipino, or in the dialect there is prima facie evidence that the settlement was
have entertained some apprehensions as to the status known to the employees—that by signing the waiver obtained through fraud, misrepresentation, or
of his stay or safety in Saudi Arabia if he would not or quitclaim, they are forfeiting or relinquishing their coercion.
sign the quitclaim. right to receive the benefits which are due them under
the law; and It is made clear that the foregoing rules on quitclaim
4. The court a quo is correct in its finding that the or waiver shall apply only to labor contracts of OFWs
Declaration is a contract of adhesion which should be 4. A statement that the employees signed and executed in the absence of proof of the laws of the foreign
construed against the employer, OAB. An adhesion the document voluntarily, and had fully understood the country agreed upon to govern said contracts.
contract is contrary to public policy as it leaves the contents of the document and that their consent was Otherwise, the foreign laws shall apply.
weaker party—the employee—in a "take-it-or-leave- freely given without any threat, violence, duress,
it" situation. Certainly, the employer is being unjust to intimidation, or undue influence exerted on their WHEREFORE, the petition is DENIED. The
the employee as there is no meaningful choice on the person. October 18, 2000 Decision in CA-G.R. SP No. 56120
part of the employee while the terms are unreasonably of the Court of Appeals affirming the January 15,
favorable to the employer.66 It is advisable that the stipulations be made in English 1999 Decision and September 30, 1999 Resolution of
and Tagalog or in the dialect known to the employee. the NLRC
Thus, the Declaration purporting to be a quitclaim and There should be two (2) witnesses to the execution of
waiver is unenforceable under Philippine laws in the the quitclaim who must also sign the quitclaim. The is AFFIRMED with the MODIFICATION that
absence of proof of the applicable law of Saudi document should be subscribed and sworn to under petitioner EDI-Staffbuilders International, Inc. shall
Arabia. oath preferably before any administering official of pay the amount of PhP 30,000.00 to respondent Gran
the Department of Labor and Employment or its as nominal damages for non-compliance with statutory
In order to prevent disputes on the validity and regional office, the Bureau of Labor Relations, the due process.
enforceability of quitclaims and waivers of employees NLRC or a labor attaché in a foreign country. Such
under Philippine laws, said agreements should contain official shall assist the parties regarding the execution No costs.
the following: of the quitclaim and waiver.67 This compromise
settlement becomes final and binding under Article SO ORDERED.
1. A fixed amount as full and final compromise 227 of the Labor Code which provides that:
settlement; Quisumbing, Carpio, Tinga, Nachura, JJ., concur.
 was a stockholder at the time said obligations were The defendant-appellant makes the following
9) Willamette Iron and Steel Works vs. Muzzal contracted with the plaintiff-appellee in this case. assignments of error:
May 21, 1935
The section of the Civil Code of California under I. The lower court erred in holding that the defendant
G.R. No. L-42538             May 21, 1935 which the plaintiff seeks to recover reads: was the holder of 1,432 shares of the capital stock of
the Meyer-Muzzal Company.
WILLAMETTE IRON & STEEL WORKS, SEC. 322. Each stockholder of a corporation is
plaintiff-appellee, individually and personally liable for such proportion II. The lower court erred in finding that plaintiff has
vs. of all its debts and liabilities contracted or incurred proven the existence of the foreign law involved in
A.H. MUZZAL, defendant-appellant. during the time he was a stockholder as the amount of this action.
stock or shares owned by him bears to the whole of
This is an appeal from a decision of the Court of First the subscribed capital stock or shares of the III. The lower court erred in enforcing the law of
Instance of Zamboanga, the dispositive part of which corporation. Any creditor of the corporation may California.
reads: institute joint or several actions against any of its
stockholders, for the proportion of his claim payable IV. The lower court erred in rendering judgment
In view of the considerations above stated, judgment by each, and in such action the court must (1) against the defendant.
is hereby entered in favor of the plaintiff, ordering the ascertain the proportion of the claim or debt for
defendant, for the first cause of action, to pay to which each defendant is liable, and (2) a several As to the first assignment of error the witness Stanley
plaintiff the sum of P2,837.34, with interest thereon judgment must be rendered against each, in H. Hermann, a certified public accountant, testified
at the rate of 6 per cent per annum from March 11, conformity therewith. If any stockholder pays his that he knows that the Meyer-Muzzal Company is a
1929, until paid, and to pay also the amount of proportion of any debt due from the corporation, corporation and further testified as follows:
P1,590.63, for the second cause of action, with incurred while he was such stockholder, he is
interest thereon at 7 per cent per annum from April 8, relieved from any further personal liability for such I became acquainted with the corporation by reason
1929, until paid. The defendant is further ordered to debt, and if an action has been brought against him of being employed by it in October, November and
pay the amount of P500 as reasonable attorney's fees upon such debt, it must be dismissed, as to him, upon December of 1929 as a certified public accountant
in prosecuting this action, and to pay the costs of his paying the costs, or such proportion thereof as and auditor to personally examine the company's
these proceedings. may be properly chargeable against him. The liability books of account, stock and other records of the
of each stockholder is determined by the amount of company for the purpose of certifying, if possible, to
This case involves the liability of the defendant, a stock or shares owned by him at the time the debt or the correctness of a statement of the financial
former resident of the State of California, now liability was incurred; and such liability is not condition of the company on March 31, 1929.
residing in the Philippine Islands, for obligations released by any subsequent transfer of stock.
contracted by a California corporation of which he xxx     xxx     xxx
8. Please state, if you know, whether or not one A.H. November, December, 1929, and which working incurred, i. e., on November 5, 1928 and December
Muzzal was a stockholder of Meyer-Muzzal papers are in my possession, I find and can state 22, 1928. This evidence sufficiently established the
Company on November 5, 1928 and December 22, accordingly that these working papers show what the fact that the section in question was the law of the
1928, and if he was, please state the number and stock and other records of said Meyer-Muzzal State of California on the above dates. A reading of
value of the shares of capital stock of Meyer-Muzzal Company recorded in regard to the matters contained sections 300 and 301 of our Code of Civil Procedure
Company subscribed and owned by said A.H. Muzzal in questions No. 6, No. 7 and No. 8 and I can state will convince one that these sections do not exclude
on November 5, 1928 and December 22, 1928? accordingly from my examination of said records and the presentation of other competent evidence to prove
by reference to my working papers that I know who the existence of a foreign law.
A. Yes, Mr. A.H. Muzzal was a stockholder of the the stockholders of Meyer-Muzzal company were;
Meyer-Muzzal Company on the dates specified. that the amount of the subscribed capital stock of said "The foreign law is a matter of fact ... You ask the
Fourteen hundred thirty-three shares of the capital Meyer-Muzzal Company on said dates was 5,000 witness what the law is; he may from his recollection,
stock of Meyer-Muzzal Company of the par value of shares of the par value of $10 each, and that A.H. or on producing and referring to books, say what it is."
$10 each were subscribed and owned by said A.H. Muzzal was a stockholder of the Meyer-Muzzal (Lord Campbell concurring in an opinion of Lord
Muzzal on November 5th, 1928 and on December Company on the dates specified and that fourteen Chief Justice Denman in a well known English case
22nd, 1928, and said shares were issued to and hundred thirty-three shares of the capital stock of where a witness was called upon to prove the Roman
standing in the name of A. H. Muzzal on the books of Meyer-Muzzal Company of the par value of $10 each laws of marriage and was permitted to testify, though
said company at said times. were subscribed and owned by A.H. Muzzal on he referred to a book containing the decrees of the
November 5, 1928 and on December 22nd, 1928 and Council of Trent as controlling, Jones on Evidence,
9. If, by reason of the loss, destruction and/or said shares were issued to and standing in the name Second Edition, Volume 4, pages 3148-3152.) Aside
disappearance of the stock and other corporate of A.H. Muzzal on the books of said company at said from the testimony of Attorney Bolton Ragland's
records of the Meyer-Muzzal Company since the times. Annotated Civil Code of California was presented as
time you had occasion to examine them, you have evidence. This book contains that State's Civil Code as
been unable to make reference thereto in answering The above sufficiently establishes the fact that the adopted March 21, 1872, with the subsequent official
the questions asked of you in this deposition, please defendant was the owner of 1,433 shares of stock of statute amendments to and including the year 1929.
answer each and all of said questions by reference to the corporation Meyer-Muzzal Company when it
any documents or working sheets which you may be contracted the obligations alleged in the complaint. In the third and fourth assignments of error the
prepared upon the occasion of your examining and/or appellant argues that since the law of California, as to
auditing the books of account, stock and other As to the second assignment of error Mr. Arthur W. the liability of stockholders of a corporation, is
records of the Meyer-Muzzal Company. Bolton, an attorney-at-law of San Francisco, different from and inconsistent with the Philippine
California, since the year 1918, under oath, quoted Corporation Law the courts here should not impose
A. By reference to my working papers which I made verbatim section 322 of the California Civil Code and liability provided in that law upon a resident of these
at the time I examined the books of account and stock stated that said section was in force at the time the Islands who is a stockholder of a California
records of Meyer-Muzzal Company in October, obligations of the defendant to the plaintiff were corporation. The herein defendant is chargeable with
notice of the law of California as to the liability of and THE INTERMEDIATE APPELLATE aforesaid overdraft facility, on October 7, 1982,
stockholders for debt of a corporation proportionate to COURT, respondents. both private respondents and a certain Robin de
their stock holdings, in view of the fact that he was Clive Lowe, all of whom were directors of the
one of the incorporators of the Meyer-Muzzal This is a petition for review on certiorari of the COMPANY at such time, executed a Joint and
Company in the year 1924 and was still a stockholder decision of the Intermediate Appellate Court (now Several Guarantee (p. 53, Rollo) in favor of
in that company in the year 1928. Exhibit 10 of the Court of Appeals) dated August 2, 1985, which petitioner BANK whereby private respondents
plaintiff is a certified company of the articles of reversed the order of the Regional Trial Court and Lowe agreed to pay, jointly and severally, on
incorporation of Meyer-Muzzal Company in which it dated February 28,1985 denying the Motion to demand all sums owed by the COMPANY to
appears that that company was incorporated on August Dismiss filed by private respondents Jack Robert petitioner BANK under the aforestated overdraft
22, 1924, and that the incorporators were A.H. Sherman and Deodato Reloj. facility.
Muzzal, Leo W. Meyer and James Rolph, Jr., "all of
whom are residents and citizens of the State of A complaint for collection of a sum of money (pp. The Joint and Several Guarantee provides, inter
California." The defendant cannot now escape liability 49-52, Rollo) was filed by petitioner Hongkong alia, that:
by alleging that the California law is unjust and and Shanghai Banking Corporation (hereinafter
different from the inconsistent with the Philippine referred to as petitioner BANK) against private This guarantee and all rights, obligations and
Corporation Law. respondents Jack Robert Sherman and Deodato liabilities arising hereunder shall be construed
Reloj, docketed as Civil Case No. Q-42850 and determined under and may be enforced in
The judgment of the trial court is affirmed with costs before the Regional Trial Court of Quezon City, accordance with the laws of the Republic of
in both instances against the defendant-appellant. Branch 84. Singapore. We hereby agree that the Courts of
Singapore shall have jurisdiction over all disputes
Malcolm, Abad Santos, Hull, Vickers, and Diaz, JJ., It appears that sometime in 1981, Eastern Book arising under this guarantee. ... (p. 33-A, Rollo).
concur. Supply Service PTE, Ltd. (hereinafter referred to
as COMPANY), a company incorporated in The COMPANY failed to pay its obligation. Thus,
10) Hong Kong and Shanghai Banking Corp vs. Singapore applied with, and was granted by, the petitioner BANK demanded payment of the
Sherman et. al. August 11, 1989 Singapore branch of petitioner BANK an obligation from private respondents, conformably
overdraft facility in the maximum amount of with the provisions of the Joint and Several
G.R. No. 72494 August 11, 1989 Singapore dollars 200,000.00 (which amount was Guarantee. Inasmuch as the private respondents
subsequently increased to Singapore dollars still failed to pay, petitioner BANK filed the above-
HONGKONG AND SHANGHAI BANKING 375,000.00) with interest at 3% over petitioner mentioned complaint.
CORPORATION, petitioner, BANK prime rate, payable monthly, on amounts
vs. due under said overdraft facility; as a security for On December 14,1984, private respondents filed
JACK ROBERT SHERMAN, DEODATO RELOJ the repayment by the COMPANY of sums a motion to dismiss (pp 54-56, Rollo) which was
advanced by petitioner BANK to it through the opposed by petitioner BANK (pp. 58-62, Rollo).
Acting on the motion, the trial court issued an exclusion of the courts of other countries or (p. 37, Rollo), the dispositive portion of which
order dated February 28, 1985 (pp, 64-65, Rollo), nations. Also, it has long been established in reads:
which read as follows: law and jurisprudence that jurisdiction of courts
is fixed by law; it cannot be conferred by the WHEREFORE, the petition for prohibition with
In a Motion to Dismiss filed on December 14, will, submission or consent of the parties. preliminary injuction is hereby GRANTED. The
1984, the defendants seek the dismissal of the respondent Court is enjoined from taking further
complaint on two grounds, namely: On the second ground, it is asserted that cognizance of the case and to dismiss the same
defendant Robert' , Sherman is not a citizen for filing with the proper court of Singapore
1. That the court has no jurisdiction over the nor a resident of the Philippines. This which is the proper forum. No costs.
subject matter of the complaint; and argument holds no water. Jurisdiction over the
persons of defendants is acquired by service SO ORDERED.
2. That the court has no jurisdiction over the of summons and copy of the complaint on
persons of the defendants. them. There has been a valid service of The motion for reconsideration was denied (p.
summons on both defendants and in fact the 38, Rollo), hence, the present petition.
In the light of the Opposition thereto filed by same is admitted when said defendants filed a
plaintiff, the Court finds no merit in the motion. 'Motion for Extension of Time to File The main issue is whether or not Philippine
"On the first ground, defendants claim that by Responsive Pleading on December 5, 1984. courts have jurisdiction over the suit.
virtue of the provision in the Guarantee (the
actionable document) which reads — WHEREFORE, the Motion to Dismiss is The controversy stems from the interpretation of
hereby DENIED. a provision in the Joint and Several Guarantee, to
This guarantee and all rights, obligations and wit:
liabilities arising hereunder shall be construed SO ORDERED.
and determined under and may be enforced in (14) This guarantee and all rights, obligations and
accordance with the laws of the Republic of A motion for reconsideration of the said order liabilites arising hereunder shall be construed and
Singapore. We hereby agree that the courts in was filed by private respondents which was, determined under and may be enforced in
Singapore shall have jurisdiction over all however, denied (p. 66, Rollo). accordance with the laws of the Republic of
disputes arising under this guarantee, Singapore. We hereby agree that the Courts in
Private respondents then filed before the Singapore shall have jurisdiction over all disputes
the Court has no jurisdiction over the subject respondent Intermediate Appellate Court (now arising under this guarantee. ... (p. 53-A, Rollo)
matter of the case. The Court finds and Court of Appeals) a petition for prohibition with
concludes otherwise. There is nothing in the preliminary injunction and/or prayer for a In rendering the decision in favor of private
Guarantee which says that the courts of restraining order (pp. 39-48, Rollo). On August 2, respondents, the Court of Appeals made, the
Singapore shall have jurisdiction to the 1985, the respondent Court rendered a decision following observations (pp. 35-36, Rollo):
There are significant aspects of the case to which There is nothing more imperative and restrictive with more reason as a defendant. However, in
our attention is invited. The loan was obtained by than what the agreement categorically this case, private respondents are Philippine
Eastern Book Service PTE, Ltd., a company commands that 'all rights, obligations, and residents (a fact which was not disputed by them)
incorporated in Singapore. The loan was granted liabilities arising hereunder shall be construed who would rather face a complaint against them
by the Singapore Branch of Hongkong and and determined under and may be enforced in before a foreign court and in the process incur
Shanghai Banking Corporation. The Joint and accordance with the laws of the Republic of considerable expenses, not to mention
Several Guarantee was also concluded in Singapore.' inconvenience, than to have a Philippine court try
Singapore. The loan was in Singaporean dollars and resolve the case. Private respondents'
and the repayment thereof also in the same While it is true that "the transaction took place in stance is hardly comprehensible, unless their
currency. The transaction, to say the least, took Singaporean setting" and that the Joint and ultimate intent is to evade, or at least delay, the
place in Singporean setting in which the law of Several Guarantee contains a choice-of-forum payment of a just obligation.
that country is the measure by which that clause, the very essence of due process dictates
relationship of the parties will be governed. that the stipulation that "[t]his guarantee and all The defense of private respondents that the
rights, obligations and liabilities arising hereunder complaint should have been filed in Singapore is
xxx xxx xxx shall be construed and determined under and based merely on technicality. They did not even
may be enforced in accordance with the laws of claim, much less prove, that the filing of the
Contrary to the position taken by respondents, the Republic of Singapore. We hereby agree that action here will cause them any unnecessary
the guarantee agreement compliance that any the Courts in Singapore shall have jurisdiction trouble, damage, or expense. On the other hand,
litigation will be before the courts of Singapore over all disputes arising under this guarantee" be there is no showing that petitioner BANK filed the
and that the rights and obligations of the parties liberally construed. One basic principle underlies action here just to harass private respondents.
shall be construed and determined in accordance all rules of jurisdiction in International Law: a
with the laws of the Republic of Singapore. A State does not have jurisdiction in the absence of In the case of Polytrade Corporation vs. Blanco,
closer examination of paragraph 14 of the some reasonable basis for exercising it, whether G.R. No. L-27033, October 31, 1969, 30 SCRA
Guarantee Agreement upon which the motion to the proceedings are in rem quasi in rem or in 187, it was ruled:
dismiss is based, employs in clear and personam. To be reasonable, the jurisdiction
unmistakeable (sic) terms the word 'shall' which must be based on some minimum contacts that ... An accurate reading, however, of the
under statutory construction is mandatory. will not offend traditional notions of fair play and stipulation, 'The parties agree to sue and be sued
substantial justice (J. Salonga, Private in the Courts of Manila,' does not preclude the
Thus it was ruled that: International Law, 1981, p. 46). Indeed, as filing of suits in the residence of plaintiff or
pointed-out by petitioner BANK at the outset, the defendant. The plain meaning is that the parties
... the word 'shall' is imperative, operating to instant case presents a very odd situation. In the merely consented to be sued in Manila.
impose a duty which may be enforced (Dizon vs. ordinary habits of life, anyone would be Qualifying or restrictive words which would
Encarnacion, 9 SCRA 714).lâwphî1.ñèt disinclined to litigate before a foreign tribunal, indicate that Manila and Manila alone is the
venue are totally absent therefrom. We cannot question operate to divest Philippine courts of of venue. Brushing aside all technicalities, it
read into that clause that plaintiff and defendant jurisdiction. In International Law, jurisdiction is would appear that jurisdiction was used loosely
bound themselves to file suits with respect to the often defined as the light of a State to exercise as to be synonymous with venue. It is in this
last two transactions in question only or authority over persons and things within its spirit that this Court must view the motion to
exclusively in Manila. For, that agreement did not boundaries subject to certain exceptions. Thus, a dismiss. ... (p. 35, Rollo).
change or transfer venue. It simply is permissive. State does not assume jurisdiction over travelling
The parties solely agreed to add the courts of sovereigns, ambassadors and diplomatic At any rate, this issue is now of no moment
Manila as tribunals to which they may resort. representatives of other States, and foreign because We hold that venue here was properly
They did not waive their right to pursue remedy in military units stationed in or marching through laid for the same reasons discussed above.
the courts specifically mentioned in Section 2(b) State territory with the permission of the latter's
of Rule 4. Renuntiatio non praesumitur. authorities. This authority, which finds its source The respondent Court likewise ruled that (pp. 36-
in the concept of sovereignty, is exclusive within 37, Rollo):
This ruling was reiterated in the case of Neville Y. and throughout the domain of the State. A State
Lamis Ents., et al. v. Lagamon, etc., et al., G.R. is competent to take hold of any judicial matter it ... In a conflict problem, a court will simply refuse
No. 57250, October 30, 1981, 108 SCRA 740, sees fit by making its courts and agencies to entertain the case if it is not authorized by law
where the stipulation was "[i]n case of litigation, assume jurisdiction over all kinds of cases to exercise jurisdiction. And even if it is so
jurisdiction shall be vested in the Court of Davao brought before them (J. Salonga, Private authorized, it may still refuse to entertain the
City." We held: International Law, 1981, pp. 37-38).lâwphî1.ñèt case by applying the principle of forum non
conveniens. ...
Anent the claim that Davao City had been As regards the issue on improper venue,
stipulated as the venue, suffice it to say that a petitioner BANK avers that the objection to However, whether a suit should be entertained or
stipulation as to venue does not preclude the improper venue has been waived. However, We dismissed on the basis of the principle of forum
filing of suits in the residence of plaintiff or agree with the ruling of the respondent Court non conveniens depends largely upon the facts
defendant under Section 2 (b), Rule 4, Rules of that: of the particular case and is addressed to the
Court, in the absence of qualifying or restrictive sound discretion of the trial court (J. Salonga,
words in the agreement which would indicate While in the main, the motion to dismiss fails to Private International Law, 1981, p.
that the place named is the only venue agreed categorically use with exactitude the words 49).lâwphî1.ñèt Thus, the respondent Court
upon by the parties. 'improper venue' it can be perceived from the should not have relied on such principle.
general thrust and context of the motion that
Applying the foregoing to the case at bar, the what is meant is improper venue, The use of the Although the Joint and Several Guarantee
parties did not thereby stipulate that only the word 'jurisdiction' was merely an attempt to prepared by petitioner BANK is a contract of
courts of Singapore, to the exclusion of all the copy-cat the same word employed in the adhesion and that consequently, it cannot be
rest, has jurisdiction. Neither did the clause in guarantee agreement but conveys the concept 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

ACCORDINGLY, the decision of the respondent

SO ORDERED.

Narvasa, Cruz, Gancayco and Griñ;o-Aquino,