G.R. No. 130339 December 22, 1998 OMANFIL INTERNATIONAL MANPOWER DEVELOPMENT CORPORATION, petitioner, vs. NATIONAL LA OR RELATION!

COMMI!!ION "T#IRD DIVI!ION$ %&' LORA FELIPE, respondents. P(NO, J.: This special civil action for certiorari seeks to annul two (2) resolutions 1 of public respondent NLRC (Third Division) awardin !"#2$,%&2.&2 to the private respondent for the death of her husband and '&( of said a)ount as attorne*+s fees. The facts and the issues are accuratel* stated in the ,ebruar* '', '%%$ Resolution of the public respondent which we -uote. The bare facts culled fro) the record show that /duardo 0. ,elipe was )arried to the co)plainant and the union produced a child, 1ichelle ,. ,elipe. /duardo 0. ,elipe was hired b* 2*undai /n ineerin and Construction Co., Ltd., throu h its local a ent 0)anfil 3nternational 1anpower Develop)ent Corporation, as 0ffshore Ri er so)eti)e on ,ebruar* $, '%%4. 0n or about 5une $, '%%4, the ferr* boat where /duardo ,elipe was on board )et an accident, clai)in the life of one worker but the bod* of /duardo ,elipe was never found, despite dili ent efforts to locate the sa)e. Co)plainant received fro) the 1elaka Labor 0ffice a certification which reads as follows. "ir, "!6 . D/C/7"/D /D!7RD0 0. ,/L38/ on $.9.%4 :ith reference the )one* should be paid accordin l* to "ection ; of Labour 1ala*sia, '%<2 as follows. 3nco)e in a )onth R1',9<<.<2 (!"92&.&=) 3nterest R1 > 1edical R1 > ,ood R1 > (or R1'&<?%&?$& which ever )ore) Total clai) R1',9<< @ =< )onth A R1$=,=%;.=& (or R1'=,=&& which ever less) A !"#2$,%&2.&2 3f *ou a reed BsicC to the above calculation please pa* the )one* R1'=,=&& (!"<,4%4.2%) to 86N?886 to the ne@t of kin of the deceased. /nclosed please find the followin for) BsicC to fill. a) ' cop* ,or) D7D > 6uruh 42 b) 4 cop* BsicC 7 reed 1e)orandu). 8lease e)pt* for the si nature of the deceased ne@t of kin.

8lease return all the for) BsicC to ether with the clai) and sta)p D2asilD R12.$& (!"'.&'') within 4& da*s fro) the date of this letter. Thank *ou. Eours faithfull*, Likewise, the 1elaka Labor 0ffice issued a receipt showin that 2*undai /n ineerin deposited R1'=,=&&.&& with the 1elaka Labor 0ffice. The fact of death of /duardo 0. ,elipe was not raised as an issue in this 0ffice inas)uch as the sa)e was ad)itted in respondents+ pleadin s. Thus, the issue raised before the Labor 7rbiter is the a)ount of death benefits due the co)plainant and whether the deposit )ade b* 2*undai with the 1elaka Labor 0ffice constitutes valid pa*)ent. Co)plainant alle es that the a)ount should be !"#2$,%&2.&2 and that the deposit )ade b* 2*undai /n ineerin to the 1elaka Labor 0ffice did not constitute pa*)ent. 0n the 0ther hand, respondents contend that the co)plainant is onl* entitled to R1'=,=&&.&& or !"#<,4%4.2% and that their deposit of the said a)ount with the 1elaka Labor 0ffice e@tin uished their obli ation. The Labor 7rbiter ordered petitioner to pa* private respondent !"#2$,%&2.&2 as death benefit and '&( thereof as attorne*+s fees. 2 The public respondent NLRC (Third Division) affir)ed the decision of the Labor 7rbiter. 3 3t held. @@@ @@@ @@@ The core of the )atter in the case at bar is the interpretation of the certification issued b* the Labor 0ffice of 1elaka and the provisions of the :ork)en+s Co)pensation Law of 1ala*sia. The Certification of the 1elaka Labor 0ffice reads as follows. "ir, "!6 . D/C/7"/D /D!7RD0 0. ,/L38/ on $.9.%4 :ith reference the )one* should be paid accordin l* to "ection ; of Labour 1ala*sia, '%<2 as follows. 3nco)e in a )onth R1',9<<.<2(!"92&.&=) 3nterest R1 > 1edical R1 > ,ood R1 > (or R1'&<?%&?$& which ever )ore) Total clai) R1',9<< @ =< )onth A R1$=,=%;.=& (or R1'=,=&& which ever less) A !"2$,%&2.&2 3f *ou a reed BsicC to the above calculation please pa* the )one* R1'=,=&& (!"<,4%4.2%) to 86N?886 to the ne@t of kin of the deceased. /nclosed please find the followin for) BsicC to fill. a) ' cop* ,or) D7D > 6uruh 42. b) 4 cop* BsicC 7 reed 1e)orandu). 8lease e)pt*
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for the si nature of the deceased ne@t of kin. 8lease return all the for) BsicC to ether with the clai) and sta)p D2asilD R12.$& (!"'.&'') within 4& da*s fro) the date of this letter. Thank *ou. Eours faithfull*, 0n the other hand, "ection ; of the :ork)en+s Co)pensation 7ct of 1ala*sia, reads as follows. :here death has resulted fro) the inFur*, a lu)p su) e-ual to fort* five )onths earnin s or fourteen thousand four hundred rin it, whichever is the lessG 7 perusal of the fore oin certification and provision of the :ork)en+s Co)pensation 7ct of 1ala*sia, as correctl* pointed out b* the co)plainant, are BsicC susceptible of two different interpretations. The Certification is indeed a)bi uous inas)uch as it oes to the e@tent of co)putin the death benefits based on fort* five )onths of the deceased )onthl* earnin s and at the sa)e ti)e adds the phrase DR1'=,=&&.&&, whichever lessD. The a)bi uit* beco)es )ore apparent b* virtue of the fi ure !"#2$,%&2.&2 which appears below the phrase Dwhich everlessD. 3f the intention of the Labor 0ffice of 1elaka was to award R1'=,=&&.&& it should have not otherwise put the a)ount of !"#2$,'%&2.&2. 3n rulin in favor of co)plainant, we but render obedience to the well>entrenched principle that in case of doubt, a labor case )ust be decided in favor of the workin )an. (7-uino et al. vs. NLRC, et al., H.R. No. ;$94, ,ebruar* '', '%%2). This is in consonance with the liberal and co)passionate spirit which ave birth to labor laws as social Fustice )easures and as )anifestation of the "tate+s avowed polic* to ive )a@i)u) aid and protection to labor (see "ar)iento vs. /)plo*ees Co)pensation Co))ission, '&4 "CR7 42%). 0n the second and third issues, we also rule in favor of co)plainant. 7lthou h, there was deposited of BsicC R1'=,=&&.&& with the 1elaka Labor 0ffice, the sa)e is not valid. :e do not a ree with respondents+ contention that the* had no option but to pa* directl* to the 1elaka Labor 0ffice. 3t is clear fro) the sa)e certification that respondents were iven the option to pa* the co)pensation benefits to D8N6?886 to the ne@t of kin of the deceased.D Therefore, respondents should have paid directl* to herein co)plainant, she bein the ne@t of kin of the deceased. ,urther)ore, under 8hilippine laws, pa*)ent to the ne@t of kin of the deceased is valid. ,inall*, as a ain correctl* pointed out b* co)plainant, the a)ount deposited with the 1elaka Labor 0ffice is less than the a)ount to which co)plainant is entitled, so )uch so that the deposit of the sa)e is not the co)plete pa*)ent needed to e@tin uish respondents+ obli ation. 8etitioner char es the public respondent with rave abuse of discretion and sub)its the followin issues for resolution.

,irst. :hether or not the public respondent seriousl* erred and ravel* abused its discretion a)ountin to lack or in e@cess of Furisdiction in affir)in the decision of the 2onorable Labor 7rbiter findin that the benefits due the private respondent was !"#2$,%&2.&2. "econd. :hether or not the public respondent seriousl* erred and ravel* abused its discretion a)ountin to lack or in e@cess of Furisdiction in holdin that the Certification?Co)putation )arked as 7nne@ D,D above and "ection ; of the :ork)en+s Co)pensation 7ct of 1ala*sia were susceptible to two different interpretations and thereafter applied the rule that in case of doubt, settle the doubt in favor of labor. Third. :hether or not the public respondent seriousl* erred and ravel* abused its discretion in disre ardin the e@press lan ua e of 7nne@es D3D, D3>'D, D3>2D, D3 >4D and D3>=D. ,ourth. :hether or not the public respondent seriousl* erred and ravel* abused its discretion when it affir)ed the decision of the Labor 7rbiter findin that deposit of R1'=,=&& was not a valid pa*)ent. :e find the petition )eritorious. ,irst. :e hold that there is no a)bi uit* in the afore-uoted Co)putation? Certification fro) the 1alacca Labor 0ffice. The co)putation is in co)plete accord with "ection ; of the :ork)en+s Co)pensation 7ct of 1ala*sia which states. @@@ @@@ @@@ ; "ubFect to this 7ct, the a)ount of co)pensation shall be as follows, na)el* I a :here death has resulted fro) the inFur*, a lu)p su) e-ual to fort*>five )onths earnin s or fourteen thousand four hundred rin it, whichever is less. Clearl* what is due to the private respondent as death benefit is '=,=&& 1ala*sian Rin it since that a)ount is less than !" #2$,%&2.&2. "econd. To clinch its content, that private respondent is onl* entitled to the pa*)ent of R1'=,=&&, petitioner also sub)itted the followin Certification issued b* "h. Eah*a 6in "h. 1oha)ed, Director Heneral of Labour 8eninsular, 1ala*sia. ) 36! 8/5767T 5767T7N 6!R!2, "/1/N7N5!NH 17L7E"37 (J/1/NT/R37N "!16/R 17N!"37), 87R7" <, 6L0J 6 (!T7R7), Telefon. &4>2<<$2&& 8!"7T 67ND7R D717N"7R7, &4>2<<%''' <&<42 J!7L7 L!18!R. Telefa@. &4>2<49&=& KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKK KKKKKKKRuF Tuan.RuF Ja)i. (;)6"1 .%?'2?=9?%9Tarikh. ?(1ac '%%$ To :ho) 3t 1a* Concern, ,atal 7ccident to /duardo 0. ,elipe On 7.6. 1993 in Malacca :e re ret to infor) *ou that the abovena)ed work)an passed awa* on $.9. '%%4 as a result of an accident arisin out of and in the course of his e)plo*)ent. 2owever, we still need the death certificate or an* certification concerned.
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Subject to Section 8(a) Work en!s "o #ensation $ct 19%& ($ct &73) 'aw o( Mala)sia* the a ount o( co #ensation where +eath has resulte+ (ro the injur) or e #lo) ent acci+ent is subjecte+ to the a,i u u# to -M1.*.//.// (not ore than -M1.*.//.//). 0ut it can be less than -M1.*.//.// i( the onthl) salar) o( the concerne+ work an is less than -M3&/.// #er onth. 1n the case o( 2+uar+o O. 3eli#e* his onthl) salar) -M1*6%%.//. So* the a ount shoul+ be +e#osite+ with the 4irector o( 'abour Malacca* Mala)sia b) the e #lo)er is -M1.*.// (not less neither ore than -M1.*.//.//) as re5uire+ b) Section 8(a) an+ 1/(1) Work en!s "o #ensation $ct 19%& ($ct &73) 'aw o( Mala)sia. !pon receivin the a)ount of R1'=,=&&.&&, the Co))issioner of Labour of 1ala*sia shall )ake an in-uir* under "ection 2$ :ork)en+s Co)pensation 7ct '%<2 (7ct 2$4) Law of 1ala*sia to deter)ine the nu)ber of dependents of a deceased work)an and the e@tent to which the* were dependent upon hi). 6he e #lo)er ha+ alrea+) +e#osite+ the sai+ a ount on &&...199.. 7ttached are relevant section BsicC of The :ork)en+s Co)pensation 7ct '%<2 (7ct 2$4) Law of 1ala*sia and assess)ent for fatal case. Thank *ou. Eours faithfull*, " d. ("2. E72E7 63N "2. 10271/D) for Director Heneral of Labour 8eninsular, 1ala*sia. s.k. 8en arah 6uruh Ne eri, 1elaka. (/)phasis supplied) This Certification was dul* authenticated b* 1r. 6a*ani L. 1an ibin, our Consul Heneral in Juala Lu)pur, 1ala*sia. * 3t is uncontested b* respondents. The Certification clearl* establishes that the a)ount due to private respondent under the laws of 1ala*sia is R1'=,=&&.&&. Third. "ection '& of the :ork)en+s Co)pensation Law of 1ala*sia prescribes the )ode of pa*)ent of co)pensation of death benefits, vi7. + '&. (') No pa*)ent of co)pensation in respect of a work)an whose inFur* has resulted in death, and no pa*)ent of a lu)p su) as co)pensation to wo)an or to a )inor, shall be )ade otherwise than b* deposit with the Co))issioner, and an* such pa*)ent )ade directl* to an* dependent of a deceased work)an or to an* wo)an or )inor shall be dee)ed not to be a pa*)ent of co)pensation for the purposes of this 7ct. @@@ @@@ @@@ (4) The receipt of the Co))issioner shall be a sufficient dischar e for an* co)pensation deposited with hi). 8etitioner co)plied with this provision when 2*undai deposited the a)ount of R1'=,=&& with the 0ffice of the Director of Labour of 1elaka. 8rivate respondent was thereafter dul* infor)ed of this deposit. 8etitioner cannot now be faulted b* the public respondent for co)pl*in with the said law of 1ala*sia. Resultantl*, we hold that it has dischar ed its )onetar* obli ation to the private respondent. 3N L3/: :2/R/0,, the petition is ranted and the i)pu ned resolutions of the public respondent are annulled and set aside. No costs.

"0 0RD/R/D. 0)anfil 3nternational 1anpower Develop)ent Corporation vs National Labor Relations Co))ission o& ,%&-%r. ), 2013 3// S"-$ &13 8 "on(lict o( 'aws 8 9rivate 1nternational 'aw 8 9roo( o( 3orei:n 'aw 3n ,ebruar* '%%4, 2*undai /n ineerin and Construction Co., Ltd., throu h its local a ent, 0)anfil 3nternational 1anpower Develop)ent Corporation, en a ed /duardo ,elipe to work as a ri er in 1ala*sia. 3n 5une '%%4, the ferr* boat in which /duardo was assi ned )et an accident. 2is bod* was never found. 7 provision in the 1ala*sia labor law provides. :here death has resulted fro) the inFur*, a lu)p su) e-ual to (ort) (ive onths earnin:s or (ourteen thousan+ (our hun+re+ rin::it BR1C, whichever is the less; 7 local labor office in 1ala*sia then wrote a letter to 2*undai advisin the latter of the co)putation it arrived at, to witG =< )onths @ !" #92&.&= ()onthl* salar* of /duardo) A !" #2$,%&2.&2. R1'=,=&& which is e-uivalent to !" #<,4%4.2% is less than !" #2$,%&2.&2, hence, 2*undai deposited the lesser a)ount with the said labor office. The wife of /duardo, Lora ,elipe, does not a ree that 2*undai is liable for the lesser a)ount hence she filed a labor case a ainst 2*undaiMs a ent, 0)anfil. The labor arbiter ordered 0)anfil to pa* #2$,%&2.&2 to Lora. This was affir)ed b* the National Labor Relations Co))ission. 3t was ruled that the 1ala*sian labor law is susceptible to two interpretations because it is va ueG that in case of doubt of labor laws, it )ust be construed in favor of the laborer. I!!(E/ :hether or not the National Labor Relations is correct. #ELD/ No. The 1ala*sian Law in -uestion is not va ue. Clearl* what is due to Lora as death benefit (for her dead husband) is '=,=&& 1ala*sian Rin it since that a)ount is less than !" #2$,%&2.&2. ,urther, it appears that the Director Heneral of Labor of 1ala*sia certified that /duardo is onl* entitled to a )a@i)u) of R1'=,&&&.&& pursuant to the labor law in -uestion. This certification is dul* authenticated b* 1r. 6a*ani L. 1an ibin, our Consul Heneral in Juala Lu)pur, 1ala*sia. "uch authentication of the said Certification, which provides an interpretation of said forei n labor law b* none other than the Director of Labor of 1ala*sia is proof of the forei n law. ,urther still, this was never contested b* Lora.

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G.R. No. 119+02 Oc0ober +, 2000 WILDVALLE1 !#IPPING CO., LTD. petitioner, vs. CO(RT OF APPEAL! %&' P#ILIPPINE PRE!IDENT LINE! INC., respondents. D/C3"30N (ENA, J.: This is a petition for review on certiorari seekin to set aside the decision of the Court of 7ppeals which reversed the decision of the lower court in C7>H.R. CL No. 49;2', entitled D:ildvalle* "hippin Co., Ltd., plaintiff>appellant, versus 8hilippine 8resident Lines, 3nc., defendant> appellant.D The antecedent facts of the case are as follows. "o)eti)e in ,ebruar* '%;;, the 8hilippine Ro@as, a vessel owned b* 8hilippine 8resident Lines, 3nc., private respondent herein, arrived in 8uerto 0rdaN, LeneNuela, to load iron ore. !pon the co)pletion of the loadin and when the vessel was read* to leave port, 1r. /NNar del Lalle "olarNano Las-ueN, an official pilot of LeneNuela, was desi nated b* the harbour authorities in 8uerto 0rdaN to navi ate the 8hilippine Ro@as throu h the 0rinoco River. ' 2e was asked to pilot the said vessel on ,ebruar* '', '%;;2 boardin it that ni ht at ''.&& p.).4 The )aster (captain) of the 8hilippine Ro@as, Captain Nicandro Colon, was at the brid e to ether with the pilot (Las-ueN), the vessel+s third )ate (then the officer on watch), and a hel)s)an when the vessel left the port = at '.=& a.). on ,ebruar* '2, '%;;. < Captain Colon left the brid e when the vessel was under wa*.9 The 8hilippine Ro@as e@perienced so)e vibrations when it entered the "an Ro-ue Channel at )ile '$2.$ The vessel proceeded on its wa*, with the pilot assurin the watch officer that the vibration was a result of the shallowness of the channel.; 6etween )ile '<; and '<$, the vessel a ain e@perienced so)e vibrations. % These occurred at =.'2 a.).'& 3t was then that the watch officer called the )aster to the brid e.'' The )aster (captain) checked the position of the vessel '2 and verified that it was in the centre of the channel.'42e then went to confir), or set down, the position of the vessel on the chart. '= 2e ordered "i)plicio 7. 1onis, Chief 0fficer of the 8resident Ro@as, to check all the double botto) tanks.'< 7t around =.4< a.)., the 8hilippine Ro@as ran a round in the 0rinoco River, '9 thus obstructin the in ress and e ress of vessels. 7s a result of the blocka e, the 1alandrinon, a vessel owned b* herein petitioner :ildvalle* "hippin Co)pan*, Ltd., was unable to sail out of 8uerto 0rdaN on that da*. "ubse-uentl*, :ildvalle* "hippin Co)pan*, Ltd. filed a suit with the Re ional Trial Court of 1anila, 6ranch 333 a ainst 8hilippine 8resident Lines, 3nc. and 8ioneer 3nsurance Co)pan* (the underwriter?insurer of 8hilippine Ro@as) for da)a es in the for) of unearned profits, and interest thereon a)ountin to !" #=&&,&&&.&& plus attorne*+s fees, costs, and e@penses of liti ation. The co)plaint a ainst 8ioneer 3nsurance Co)pan* was dis)issed in an 0rder dated Nove)ber $, '%;;.'$ 7t the pre>trial conference, the parties a reed on the followin facts. D'. The Furisdictional facts, as specified in their respective pleadin sG D2. That defendant 88L was the owner of the vessel 8hilippine Ro@as at the ti)e of the incidentG D4. That defendant 8ioneer 3nsurance was the insurance underwriter for defendant 88LG D=. That plaintiff :ildvalle* "hippin Co., 3nc. is the owner of the vessel 1alandrinon, whose passa e was obstructed b* the vessel 8hilippine Ro@as at 8uerto 0rdaN, LeneNuela, as specified in par. =, pa e 2 of the co)plaintG D<. That on ,ebruar* '2, '%;;, while the 8hilippine Ro@as was navi atin the channel at 8uerto 0rdaN, the said vessel rounded and as a result, obstructed navi ation at the channelG D9. That the 0rinoco River in 8uerto 0rdaN is a co)pulsor* pilota e channelG D$. That at the ti)e of the incident, the vessel, 8hilippine Ro@as, was under the co))and of the pilot /NNar "olarNano, assi ned b* the overn)ent thereat, but plaintiff clai)s that it is under the co))and of the )asterG D;. The plaintiff filed a case in 1iddlebur , 2olland which is related to the present caseG

D%. The plaintiff caused the arrest of the 8hilippine Collier, a vessel owned b* the defendant 88LG D'&. The 0rinoco River is '<& )iles lon and it takes appro@i)atel* '2 hours to navi ate out of the said riverG D''. That no securit* for the plaintiff+s clai) was iven until after the 8hilippine Collier was arrestedG and D'2. That a letter of uarantee, dated '2>1a*>;; was issued b* the "tea)ship 1utual !nderwriters Ltd.D'; The trial court rendered its decision on 0ctober '9, '%%' in favor of the petitioner, :ildvalle* "hippin Co., Ltd. The dispositive portion thereof reads as follows. D:2/R/,0R/, Fud )ent is rendered for the plaintiff, orderin defendant 8hilippine 8resident Lines, 3nc. to pa* to the plaintiff the su) of !.". #2<%,2=4.=4, as actual and co)pensator* da)a es, and !.". #'92,&4'.<4, as e@penses incurred abroad for its forei n law*ers, plus additional su) of !.". #22,&&&.&&, as and for attorne*+s fees of plaintiff+s local law*er, and to pa* the cost of this suit. DDefendant+s counterclai) is dis)issed for lack of )erit. D"0 0RD/R/D.D'% 6oth parties appealed. the petitioner appealin the non>award of interest with the private respondent -uestionin the decision on the )erits of the case. 7fter the re-uisite pleadin s had been filed, the Court of 7ppeals ca)e out with its -uestioned decision dated 5une '=, '%%=,2& the dispositive portion of which reads as follows. D:2/R/,0R/, findin defendant>appellant+s appeal to be )eritorious, Fud )ent is hereb* rendered reversin the Decision of the lower court. 8laintiff>appellant+s Co)plaint is dis)issed and it is ordered to pa* defendant>appellant the a)ount of Three 2undred Twent*>three Thousand, ,ort*>two 8esos and ,ift*>three Centavos (8424,&=2.<4) as and for attorne*+s fees plus cost of suit. 8laintiff>appellant+s appeal is D3"13""/D. D"0 0RD/R/D.D2' 8etitioner filed a )otion for reconsideration 22 but the sa)e was denied for lack of )erit in the resolution dated 1arch 2%, '%%<.24 2ence, this petition. The petitioner assi ns the followin errors to the court a 5uo. '. R/"80ND/NT C0!RT 0, 788/7L" "/R30!"LE /RR/D 3N ,3ND3NH T27T !ND/R 823L3883N/ L7: N0 ,7!LT 0R N/HL3H/NC/ C7N 6/ 7TTR36!T/D T0 T2/ 17"T/R N0R T2/ 0:N/R 0, T2/ D823L3883N/ R0O7"D ,0R T2/ HR0!ND3NH 0, "73D L/""/L R/"!LT3NH 3N T2/ 6L0CJ7H/ 0, T2/ R30 0R3N0C0G 2. R/"80ND/NT C0!RT 0, 788/7L" "/R30!"LE /RR/D 3N R/L/R"3NH T2/ ,3ND3NH" 0, ,7CT" 0, T2/ TR37L C0!RT C0NTR7RE T0 /L3D/NC/G 4. R/"80ND/NT C0!RT 0, 788/7L" "/R30!"LE /RR/D 3N ,3ND3NH T27T T2/ D823L3883N/ R0O7"D 3" "/7:0RT2EG =. R/"80ND/NT C0!RT 0, 788/7L" "/R30!"LE /RR/D 3N D3"R/H7RD3NH L/N/P!/L7N L7: D/"83T/ T2/ ,7CT T27T T2/ "71/ 27" 6//N "!6"T7NT37LLE 8R0L/D 3N T2/ TR37L C0!RT :3T20!T 7NE 065/CT30N ,R01 8R3L7T/ R/"80ND/NT, 7ND :20"/ 065/CT30N :7" 3NT/R80"/D 6/L7T/DLE 0N 788/7LG <. R/"80ND/NT C0!RT 0, 788/7L" "/R30!"LE /RR/D 3N 7:7RD3NH 7TT0RN/E+" ,//" 7ND C0"T" T0 8R3L7T/ R/"80ND/NT :3T20!T 7NE ,73R 0R R/7"0N76L/ 67"3" :27T"0/L/RG 9. R/"80ND/NT C0!RT 0, 788/7L" "/R30!"LE /RR/D 3N N0T ,3ND3NH T27T 8/T3T30N/R+" C7!"/ 3" 1/R3T0R30!" 2/NC/, 8/T3T30N/R "20!LD 6/ /NT3TL/D T0 7TT0RN/E+" ,//", C0"T" 7ND 3NT/R/"T. The petition is without )erit. The pri)ar* issue to be deter)ined is whether or not LeneNuelan law is applicable to the case at bar. 3t is well>settled that forei n laws do not prove the)selves in our Furisdiction and our courts are not authoriNed to take Fudicial notice of the). Like an* other fact, the* )ust be alle ed and proved.2= CONFLICT OF LAWS CASES |4

7 distinction is to be )ade as to the )anner of provin a written and an unwritten law. The for)er falls under "ection 2=, Rule '42 of the Rules of Court, as a)ended, the entire provision of which is -uoted hereunder. :here the forei n law sou ht to be proved is Dunwritten,D the oral testi)on* of e@pert witnesses is ad)issible, as are printed and published books of reports of decisions of the courts of the countr* concerned if proved to be co))onl* ad)itted in such courts.2< "ection 2= of Rule '42 of the Rules of Court, as a)ended, provides. D"ec. 2=. 8roof of official record. >> The record of public docu)ents referred to in para raph (a) of "ection '%, when ad)issible for an* purpose, )a* be evidenced b* an official publication thereof or b* a cop* attested b* the officer havin the le al custod* of the record, or b* his deput*, and acco)panied, if the record is not kept in the 8hilippines, 2304 % cer0353c%0e 04%0 6-c4 o553cer 4%6 04e c-60o'.. 3f the office in which the record is kept is in a forei n countr*, the certificate )a* be )ade b* a secretar* of the e)bass* or le ation, consul eneral, consul, vice consul, or consular a ent or b* an* officer in the forei n service of the 8hilippines stationed in the forei n countr* in which the record is kept, and authenticated b* the seal of his office.D (!nderscorin supplied) The court has interpreted "ection 2< (now "ection 2=) to include co)petent evidence like the testi)on* of a witness to prove the e@istence of a written forei n law. 29 3n the noted case of Willamette Iron & Steel Works vs. Muzzal,2$ it was held that. DQ 1r. 7rthur :. 6olton, an attorne*>at>law of "an ,rancisco, California, since the *ear '%'; under oath, -uoted verbati) section 422 of the California Civil Code and stated that said section was in force at the ti)e the obli ations of defendant to the plaintiff were incurred, i.e. on Nove)ber <, '%2; and Dece)ber 22, '%2;. This evidence sufficientl* established the fact that the section in -uestion was the law of the "tate of California on the above dates. 7 readin of sections 4&& and 4&' of our Code of Civil 8rocedure will convince one that these sections do not e@clude the presentation of other co)petent evidence to prove the e@istence of a forei n law. DRThe forei n law is a )atter of fact QEou ask the witness what the law isG he )a*, fro) his recollection, or on producin and referrin to books, sa* what it is.+ (Lord Ca)pbell concurrin in an opinion of Lord Chief 5ustice Den)an in a well>known /n lish case where a witness was called upon to prove the Ro)an laws of )arria e and was per)itted to testif*, thou h he referred to a book containin the decrees of the Council of Trent as controllin , 5ones on /vidence, "econd /dition, Lolu)e =, pa es 4'=;>4'<2.) @ @ @.D :e do not dispute the co)petenc* of Capt. 0scar Leon 1onNon, the 7ssistant 2arbor 1aster and Chief of 8ilots at 8uerto 0rdaN, LeneNuela, 2; to testif* on the e@istence of the -e:la ento <eneral +e la 'e) +e 9ilotaje (pilota e law of LeneNuela)2% and the -e:la ento 9ara la =ona +e 9ilotaje >o 1 +el Orinoco (rules overnin the navi ation of the 0rinoco River). Captain 1onNon has held the afore)entioned posts for ei ht *ears. 4& 7s such he is in char e of desi natin the pilots for )aneuverin and navi atin the 0rinoco River. 2e is also in char e of the docu)ents that co)e into the office of the harbour )asters.4' Nevertheless, we take note that these written laws were not proven in the )anner provided b* "ection 2= of Rule '42 of the Rules of Court. The -e:la ento <eneral +e la 'e) +e 9ilotaje was published in the <aceta O(icial42 of the Republic of LeneNuela. 7 photocop* of the <aceta O(icial was presented in evidence as an official publication of the Republic of LeneNuela. The -e:la ento 9ara la =ona +e 9ilotaje >o 1 +el Orinoco is published in a book issued b* the Ministerio +e "o unicaciones of LeneNuela.44 0nl* a photocop* of the said rules was likewise presented as evidence. 6oth of these docu)ents are considered in 8hilippine Furisprudence to be public docu)ents for the* are the written official acts, or records of the official acts of the soverei n authorit*, official bodies and tribunals, and public officers of LeneNuela.4= ,or a cop* of a forei n public docu)ent to be ad)issible, the followin re-uisites are )andator*. (') 3t )ust be attested b* the officer havin le al custod* of the records or b* his deput*G and (2) 3t )ust be acco)panied b* a certificate b* a secretar* of the e)bass* or le ation, consul eneral, consul, vice consular or consular a ent or forei n service officer, and with the seal of his office.4< The latter re-uire)ent is not a )ere technicalit* but is intended to Fustif* the ivin of full faith and credit to the enuineness of a docu)ent in a forei n countr*.49 3t is not enou h that the <aceta O(icial, or a book published b* the Ministerio +e "o unicaciones of LeneNuela, was presented as evidence with Captain 1onNon attestin it. 3t

is also re-uired b* "ection 2= of Rule '42 of the Rules of Court that a certificate that Captain 1onNon, who attested the docu)ents, is the officer who had le al custod* of those records )ade b* a secretar* of the e)bass* or le ation, consul eneral, consul, vice consul or consular a ent or b* an* officer in the forei n service of the 8hilippines stationed in LeneNuela, and authenticated b* the seal of his office acco)pan*in the cop* of the public docu)ent. No such certificate could be found in the records of the case. :ith respect to proof of written laws, parol proof is obFectionable, for the written law itself is the best evidence. 7ccordin to the wei ht of authorit*, when a forei n statute is involved, the best evidence rule re-uires that it be proved b* a dul* authenticated cop* of the statute.4$ 7t this Functure, we have to point out that the LeneNuelan law was not pleaded before the lower court. 7 forei n law is considered to be pleaded if there is an alle ation in the pleadin about the e@istence of the forei n law, its i)port and le al conse-uence on the event or transaction in issue.4; 7 review of the Co)plaint4% revealed that it was never alle ed or invoked despite the fact that the roundin of the 1?L 8hilippine Ro@as occurred within the territorial Furisdiction of LeneNuela. :e reiterate that under the rules of private international law, a forei n law )ust be properl* pleaded and proved as a fact. 3n the absence of pleadin and proof, the laws of a forei n countr*, or state, will be presu)ed to be the sa)e as our own local or do)estic law and this is known as processual presu)ption.=& 2avin cleared this point, we now proceed to a thorou h stud* of the errors assi ned b* the petitioner. 8etitioner alle es that there was ne li ence on the part of the private respondent that would warrant the award of da)a es. There bein no contractual obli ation, the private respondent is obli ed to ive onl* the dili ence re-uired of a ood father of a fa)il* in accordance with the provisions of 7rticle ''$4 of the New Civil Code, thus. D7rt. ''$4. The fault or ne li ence of the obli or consists in the o)ission of that dili ence which is re-uired b* the nature of the obli ation and corresponds with the circu)stances of the persons, of the ti)e and of the place. :hen ne li ence shows bad faith, the provisions of articles ''$' and 22&', para raph 2, shall appl*. D3f the law or contract does not state the dili ence which is to be observed in the perfor)ance, that which is e@pected of a ood father of a fa)il* shall be re-uired.D The dili ence of a ood father of a fa)il* re-uires onl* that dili ence which an ordinar* prudent )an would e@ercise with re ard to his own propert*. This we have found private respondent to have e@ercised when the vessel sailed onl* after the D)ain en ine, )achineries, and other au@iliariesD were checked and found to be in ood runnin conditionG =' when the )aster left a co)petent officer, the officer on watch on the brid e with a pilot who is e@perienced in navi atin the 0rinoco RiverG when the )aster ordered the inspection of the vessel+s double botto) tanks when the vibrations occurred anew.=2 The 8hilippine rules on pilota e, e)bodied in 8hilippine 8orts 7uthorit* 7d)inistrative 0rder No. &4>;<, otherwise known as the Rules and Re ulations Hovernin 8ilota e "ervices, the Conduct of 8ilots and 8ilota e ,ees in 8hilippine 8orts enunciate the duties and responsibilities of a )aster of a vessel and its pilot, a)on other thin s. The pertinent provisions of the said ad)inistrative order overnin these persons are -uoted hereunder. D"ec. ''. Control of Lessels and Liabilit* for Da)a e. >> 0n co)pulsor* pilota e rounds, the 2arbor 8ilot providin the service to a vessel shall be responsible for the da)a e caused to a vessel or to life and propert* at ports due to his ne li ence or fault. 2e can be absolved fro) liabilit* if the accident is caused b* force )aFeure or natural cala)ities provided he has e@ercised prudence and e@tra dili ence to prevent or )ini)iNe the da)a e. DThe 1aster shall retain overall co))and of the vessel even on pilota e rounds whereb* he can counter)and or overrule the order or co))and of the 2arbor 8ilot on board. 3n such event, an* da)a e caused to a vessel or to life and propert* at ports b* reason of the fault or ne li ence of the 1aster shall be the responsibilit* and liabilit* of the re istered owner of the vessel concerned without preFudice to recourse a ainst said 1aster. CONFLICT OF LAWS CASES |5

D"uch liabilit* of the owner or 1aster of the vessel or its pilots shall be deter)ined b* co)petent authorit* in appropriate proceedin s in the li ht of the facts and circu)stances of each particular case. D@ @ @ D"ec. 42. Duties and Responsibilities of the 8ilots or 8ilotsM 7ssociation. >> The duties and responsibilities of the 2arbor 8ilot shall be as follows. D@ @ @ Df) 7 pilot shall be held responsible for the direction of a vessel fro) the ti)e he assu)es his work as a pilot thereof until he leaves it anchored or berthed safel*G 8rovided, however, that his responsibilit* shall cease at the )o)ent the 1aster ne lects or refuses to carr* out his order.D The Code of Co))erce likewise provides for the obli ations e@pected of a captain of a vessel, to wit. D7rt. 9'2. The followin obli ations shall be inherent in the office of captain. D@ @ @ D$. To be on deck on reachin land and to take co))and on enterin and leavin ports, canals, roadsteads, and rivers, unless there is a pilot on board dischar in his duties. @ @ @.D The law is ver* e@plicit. The )aster re)ains the overall co))ander of the vessel even when there is a pilot on board. 2e re)ains in control of the ship as he can still perfor) the duties conferred upon hi) b* law=4 despite the presence of a pilot who is te)poraril* in char e of the vessel. 3t is not re-uired of hi) to be on the brid e while the vessel is bein navi ated b* a pilot. 2owever, "ection ; of 887 7d)inistrative 0rder No. &4>;<, provides. D"ec. ;. "o #ulsor) 9ilota:e Service > ,or enterin a harbor and anchorin thereat, or passin throu h rivers or straits within a pilota e district, as well as dockin and undockin at an* pier?wharf, or shiftin fro) one berth or another, ever* vessel en a ed in coastwise and forei n trade shall be under co)pulsor* pilota e. D@@@.D The 0rinoco River bein a co)pulsor* pilota e channel necessitated the en a in of a pilot who was presu)ed to be knowled eable of ever* shoal, bank, deep and shallow ends of the river. 3n his deposition, pilot /NNar "olarNano Las-ueN testified that he is an official pilot in the 2arbour at 8ort 0rdaN, LeneNuela,== and that he had been a pilot for twelve ('2) *ears.=< 2e also had e@perience in navi atin the waters of the 0rinoco River.=9 The law does provide that the )aster can counter)and or overrule the order or co))and of the harbor pilot on board. The )aster of the 8hilippine Ro@as dee)ed it best not to order hi) (the pilot) to stop the vessel,=$)a*hap, because the latter had assured hi) that the* were navi atin nor)all* before the roundin of the vessel.=; 1oreover, the pilot had ad)itted that on account of his e@perience he was ver* fa)iliar with the confi uration of the river as well as the course headin s, and that he does not even refer to river charts when navi atin the 0rinoco River.=% 6ased on these declarations, it co)es as no surprise to us that the )aster chose not to re ain control of the ship. 7d)ittin his li)ited knowled e of the 0rinoco River, Captain Colon relied on the knowled e and e@perience of pilot Las-ueN to uide the vessel safel*. DLicensed pilots, enFo*in the e)olu)ents of co)pulsor* pilota e, are in a different class fro) ordinar* e)plo*ees, for the* assu)e to have a skill and a knowled e of navi ation in the particular waters over which their licenses e@tend superior to that of the )asterG pilots are bound to use due dili ence and reasonable care and skill. 7 pilot+s ordinar* skill is in proportion to the pilot+s responsibilities, and i)plies a knowled e and observance of the usual rules of navi ation, ac-uaintance with the waters piloted in their ordinar* condition, and nautical skill in avoidin all known obstructions. The character of the skill and knowled e re-uired of a pilot in char e of a vessel on the rivers of a countr* is ver* different fro) that which enables a navi ator to carr* a vessel safel* in the ocean. 0n the ocean, a knowled e of the rules of navi ation, with charts that disclose the places of hidden rocks, dan erous shores, or other dan ers of the wa*, are the )ain ele)ents of a pilot+s knowled e and skill. 6ut the pilot of a river vessel, like the harbor pilot, is selected for the individual+s personal knowled e of the topo raph* throu h which the vessel is steered.D<& :e find that the roundin of the vessel is attributable to the pilot. :hen the vibrations were first felt the watch officer asked hi) what was oin on, and pilot Las-ueN replied that D(the*) were in the )iddle of the channel and that the vibration was as (sic) a result of the shallowness of the channel.D<'

8ilot /NNar "olarNano Las-ueN was assi ned to pilot the vessel 8hilippine Ro@as as well as other vessels on the 0rinoco River due to his knowled e of the sa)e. 3n his e@perience as a pilot, he should have been aware of the portions which are shallow and which are not. 2is failure to deter)ine the depth of the said river and his decision to plod on his set course, in all probabilit*, caused da)a e to the vessel. Thus, we hold hi) as ne li ent and liable for its roundin . 3n the case of Homer Ramsdell Transportation Company vs. a Compa!nie "enerale Transatlanti#ue, ';2 !.". =&9, it was held that. D@ @ @ The )aster of a ship, and the owner also, is liable for an* inFur* done b* the ne li ence of the crew e)plo*ed in the ship. The sa)e doctrine will appl* to the case of a pilot e)plo*ed b* the )aster or owner, b* whose ne li ence an* inFur* happens to a third person or his propert*. as, for e@a)ple, b* a collision with another ship, occasioned b* his ne li ence. 7nd it will )ake no difference in the case that the pilot, if an* is e)plo*ed, is re-uired to be a licensed pilotG provided the )aster is at libert* to take a pilot, or not, at his pleasure, for in such a case the )aster acts voluntaril*, althou h he is necessaril* re-uired to select fro) a particular class. 0n the other hand, 35 30 36 com7-8639e -7o& 04e m%60er 0o 0%:e % 738o0, %&', a $ortiori, 35 4e 36 bo-&' 0o 'o 6o -&'er 7e&%80., 04e&, %&' 3& 6-c4 c%6e, &e304er 4e &or 04e o2&er 2388 be 83%b8e 5or 3&;-r3e6 occ%63o&e' b. 04e &e<83<e&ce o5 04e 738o0 G for in such a case the pilot cannot be dee)ed properl* the servant of the )aster or the owner, but is forced upon the), and the )a@i) ?ui (acit #er aliu (acit #er se does not appl*.D (!nderscorin supplied) 7nent the river passa e plan, we find that, while there was none, <2 the vo*a e has been sufficientl* planned and )onitored as shown b* the followin actions undertaken b* the pilot, /NNar "olarNano Las-ueN, to wit. contactin the radio )arina via L2, for infor)ation re ardin the channel, river traffic,<4 soundin s of the river, depth of the river, bulletin on the buo*s. <= The officer on watch also )onitored the vo*a e.<< :e, therefore, do not find the absence of a river passa e plan to be the cause for the roundin of the vessel. The doctrine of res i#sa lo5uitur does not appl* to the case at bar because the circu)stances surroundin the inFur* do not clearl* indicate ne li ence on the part of the private respondent. ,or the said doctrine to appl*, the followin conditions )ust be )et. (') the accident was of such character as to warrant an inference that it would not have happened e@cept for defendant+s ne li enceG (2) the accident )ust have been caused b* an a enc* or instru)entalit* within the e@clusive )ana e)ent or control of the person char ed with the ne li ence co)plained ofG and (4) the accident )ust not have been due to an* voluntar* action or contribution on the part of the person inFured.<9 7s has alread* been held above, there was a te)porar* shift of control over the ship fro) the )aster of the vessel to the pilot on a co)pulsor* pilota e channel. Thus, two of the re-uisites necessar* for the doctrine to appl*, i.e., ne li ence and control, to render the respondent liable, are absent. 7s to the clai) that the ship was unseaworth*, we hold that it is not. The Llo*dMs Re ister of "hippin confir)ed the vesselMs seaworthiness in a Confir)ation of Class issued on ,ebruar* '9, '%;; b* findin that Dthe above na)ed ship (8hilippine Ro@as) )aintained the class DS'&&7' "tren thened for 0re Car oes, Nos. 2 and ; 2olds )a* be e)pt* (CC) and SL1CD fro) 4'?'2?;$ up until the ti)e of casualt* on or about '2?2?;;.D <$ The sa)e would not have been issued had not the vessel been built accordin to the standards set b* Llo*d+s. "a)uel Li), a )arine surve*or, at Llo*d+s Re ister of "hippin testified thus. DT Now, in *our opinion, as a surve*or, did top side tank have an* bearin at all to the seaworthiness of the vesselU D7 :ell, Fud in on this particular vessel, and also basin on the class record of the vessel, wherein reco))endations were )ade on the top side tank, and it was iven sufficient ti)e to be repaired, it )eans that the vessel is fit to travel even with those defects on the ship. DC0!RT :hat do *ou )ean b* thatU Eou e@plain. The vessel is fit to travel even with defectsU 3s that what *ou )eanU /@plain. D:3TN/""

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D7 Ees, *our 2onor. 6ecause the class societ* which re ister (sic) is the third part* lookin into the condition of the vessel and as far as their record states, the vessel was class or )aintained, and she is fit to travel durin that vo*a e.D D@ @ @ D7TTE. 13"7 6efore we proceed to other )atter, will *ou kindl* tell us what is (sic) the +class S'&&7' "tren thened for 0re Car oes+, )eanU D:3TN/"" D7 8lus '&&7' )eans that the vessel was built accordin to Llo*d+s rules and she is capable of carr*in ore bulk car oes, but she is particularl* capable of carr*in 0re Car oes with No. 2 and No. ; holds e)pt*. D@ @ @ DC0!RT The vessel is classed, )eanin U D7 1eanin she is fit to travel, *our 2onor, or seaworth*.D<; 3t is not re-uired that the vessel )ust be perfect. To be seaworth*, a ship )ust be reasonabl* fit to perfor) the services, and to encounter the ordinar* perils of the vo*a e, conte)plated b* the parties to the polic*.<% 7s further evidence that the vessel was seaworth*, we -uote the deposition of pilot Las-ueN. DT :as there an* instance when *our orders or directions were not co)plied with because of the inabilit* of the vessel to do soU D7 No. DT. :as the vessel able to respond to all *our co))ands and ordersU D7. The vessel was navi atin nor)all*.D9& /duardo 8. 1ata, "econd /n ineer of the 8hilippine Ro@as sub)itted an accident report wherein he stated that on ,ebruar* '', '%;;, he checked and prepared the )ain en ine, )achineries and all other au@iliaries and found the) all to be in ood runnin condition and read* for )aneuverin . That sa)e da* the )ain en ine, brid e and en ine tele raph and steerin ear )otor were also tested.9' /n ineer 1ata also prepared the fuel for consu)ption for )aneuverin and checked the en ine enerators.92 ,inall*, we find the award of attorne*Ms fee Fustified.1@w#hi1 7rticle 22&; of the New Civil Code provides that. D7rt. 22&;. 3n the absence of stipulation, attorne*+s fees and e@penses of liti ation, other than Fudicial costs, cannot be recovered, e@cept. D@ @ @ D('') 3n an* other case where the court dee)s it Fust and e-uitable that attorne*+s fees and e@penses of liti ation should be recovered. D@ @ @D Due to the unfounded filin of this case, the private respondent was unFustifiabl* forced to liti ate, thus the award of attorne*Ms fees was proper. W#EREFORE, 3N L3/: 0, T2/ ,0R/H03NH, the petition is D/N3/D and the decision of the Court of 7ppeals in C7 H.R. CL No. 49;2' is 7,,3R1/D. "0 0RD/R/D. =PROCE!!(AL PRE!(MPTION DOCTRINE> F%c06. The 8hilippine Ro@as, a vessel owned b* 8hilippine 8resident Lines, 3nc., private respondent herein, arrived in8uerto 0rdaN, LeneNuela, to load iron ore. !pon the co)pletion of the loadin and when the vessel was read* to leave port, an official pilot of LeneNuela, was desi nated b* the harbour authorities in 8uerto 0rdaN to navi ate the 8hilippine Ro@as throu h the 0rinoco River. The 8hilippine Ro@as e@perienced so)e vibrations when it entered the "an Ro-ue Channel. The vessel proceeded on its wa*, with the pilot assurin the watch officer that the vibration was a result of the shallowness of the channel. The )aster (captain) checked the position of the vessel and verified that it was in the centre of the channel. The 8hilippine Ro@as ran around in the 0rinocoRiver, thus obstructin the in ress and e ress of vessels. 7s a result of the blocka e, the 1alandrinon, a vessel owned b* herein petitioner :ild valle* "hippin Co)pan*, Ltd., was unable to sail out of 8uerto 0rdaN on that da*. "ubse-uentl*, :ild valle*

"hippin Co)pan*, Ltd. filed a suit with the Re ional Trial Court of 1anila, 6ranch 333 a ainst 8hilippine 8resident Lines, 3nc. and 8ioneer 3nsurance Co)pan* (the underwriter?insurer of 8hilippine Ro@as) for da)a es in the for) of unearned profits, and interest thereon a)ountin to !" #=&&,&&&.&&plus attorne*+s fees, costs, and e@penses of liti ation. I66-e. :hether or not LeneNuelan law is applicable to the case at barU R-83&</ 3t is well>settled that forei n laws do not prove the)selves in our Furisdiction and our courts are not authoriNed to take Fudicial notice of the). Like an* other fact, the* )ust be alle ed and proved. For % co7. o5 % 5ore3<& 7-b83c 'oc-me&0 0o be %'m3663b8e, 04e 5o88o23&< re?-3630e6 %re m%&'%0or.. "1$ I0 m-60 be %00e60e' b. 04e o553cer 4%93&< 8e<%8 c-60o'. o5 04e recor'6 or b. 436 'e7-0.@ "2$ I0 m-60 be %ccom7%&3e' b. % cer0353c%0e b. % 6ecre0%r. o5 04e emb%66. or 8e<%03o&, co&6-8 <e&er%8, co&6-8, 93ce co&6-8%r or co&6-8%r %<e&0 or 5ore3<& 6er93ce o553cer, %&' 2304 04e 6e%8 o5 436 o553ce. T4e 8%00er re?-3reme&0 36 &o0 % mere 0ec4&3c%830. b-0 36 3&0e&'e' 0o ;-6035. 04e <393&< o5 5-88 5%304 %&' cre'30 0o 04e <e&-3&e&e66 o5 % 'oc-me&0 3& % 5ore3<& co-&0r.. W304 re67ec0 0o 7roo5 o5 2r300e& 8%26, 7%ro8 7roo5 36 ob;ec03o&%b8e, 5or 04e 2r300e& 8%2 306e85 36 04e be60 e93'e&ce. Accor'3&< 0o 04e 2e3<40 o5 %-04or30., 24e& % 5ore3<& 60%0-0e 36 3&9o89e', 04e be60 e93'e&ce r-8e re?-3re6 04%0 30 be 7ro9e' b. % '-8. %-04e&03c%0e' co7. o5 04e 60%0-0e. A0 0436 ;-&c0-re, 2e 4%9e 0o 7o3&0 o-0 04%0 04e Ve&eA-e8%& 8%2 2%6 &o0 78e%'e' be5ore 04e 8o2er co-r0. A 5ore3<& 8%2 36 co&63'ere' 0o be 78e%'e' 35 04ere 36 %& %88e<%03o& 3& 04e 78e%'3&< %bo-0 04e eB360e&ce o5 04e 5ore3<& 8%2, 306 3m7or0 %&' 8e<%8 co&6e?-e&ce o& 04e e9e&0 or 0r%&6%c03o& 3& 366-e. 7 review of the Co)plaint revealed that it was never alle ed or invoked despite the fact that the roundin of the 1?L 8hilippine Ro@as occurred within the territorial Furisdiction of LeneNuela. :e reiterate that under the rules of private international law, a forei n law )ust be properl* pleaded and proved as a fact. 3n the absence of pleadin and proof, the laws of a forei n countr*, or state, will be presu)ed to be the sa)e as our own local or do)estic law and this is known as 7roce66-%8 7re6-m703o&.

CONFLICT OF LAWS CASES

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G.R. No. 11)CC+ Febr-%r. 2, 2000 MENANDRO . LA(REANO, petitioner, vs. CO(RT OF APPEAL! AND !INGAPORE AIRLINE! LIMITED, respondents. D(I!(M ING, J.: This petition for review on certiorari under Rule =< of the Rules of Court seeks to reverse the Decision of theCourt of 7ppeals, dated 0ctober 2%, '%%4, in C.7. H.R. No. CL 4==$9, as well as its Resolution dated ,ebruar* 2;, '%%=, which denied the )otion for reconsideration. The facts of the case as su))ariNed b* the respondent appellate court are as follows. "o)eti)e in '%$;, plaintiff B1enandro 6. Laureano, herein petitionerC, then Director of ,li ht 0perations and Chief 8ilot of 7ir 1anila, applied for e)plo*)ent with defendant co)pan* Bherein private respondentC throu h its 7rea 1ana er in 1anila. 0n "epte)ber 4&, '%$;, after the usual personal interview, defendant wrote to plaintiff, offerin a contract of e)plo*)ent as an e@patriate 6> $&$ captain for an ori inal period of two (2) *ears co))encin on 5anuar* 2', '%$;. 8laintiff accepted the offer and co))enced workin on 5anuar* 2&, '%$%. 7fter passin the si@>)onth probation period, plaintiffs appoint)ent was confir)ed effective 5ul* 2', '%$%. (7nne@ D6D, p. 4&, -ollo). 0n 5ul* 2', '%$%, defendant offered plaintiff an e@tension of his two>*ear contract to five (<) *ears effective 5anuar* 2', '%$% to 5anuar* 2&, '%;= subFect to the ter)s and conditions set forth in the contract of e)plo*)ent, which the latter accepted (7nne@ DCD p. 4', Rec.). Durin his service as 6>$&$ captain, plaintiff on 7u ust 2=, '%;&, while in co))and of a fli ht, co))itted a noise violation offense at the Purich 7irport, for which plaintiff apolo iNed.(/@h. D4D, p. 4&$, Rec.). "o)eti)e in '%;&, plaintiff featured in a tail scrapin incident wherein the tail of the aircraft scraped or touched the runwa* durin landin . 2e was suspended for a few da*s until he was investi ated b* board headed b* Capt. Cho*. 2e was repri)anded. 0n "epte)ber 2<, '%;', plaintiff was invited to take a course of 7>4&& conversion trainin at 7erofor)acion, Toulouse, ,rance at dependant+s e@pense. 2avin successfull* co)pleted and passed thetrainin course, plaintiff was cleared on 7pril $, '%;', for solo dut* as captain of the 7irbus 7>4&& and subse-uentl* appointed as captain of the 7>4&& fleet co))andin an 7irbus 7>4&& in fli hts over "outheast 7sia. (7nne@es DDD, D/D and D,D, pp. 4=>4;, Rec.). "o)eti)e in '%;2, defendant, hit b* a recession, initiated cost>cuttin )easures. "eventeen ('$) e@patriate captains in the 7irbus fleet were found in e@cess of the defendant+s re-uire)ent (t.s.n., 5ul* 9, '%;;. p. ''). Conse-uentl*, defendant infor)ed its e@patriate pilots includin plaintiff of the situation and advised the) to take advance leaves. (/@h. D'<D, p. =99, Rec.) RealiNin that the recession would not be for a short ti)e, defendant decided to ter)inate its e@cess personnel (t.s.n., 5ul* 9, '%;;, p. '$). 3t did not, however, i))ediatel* ter)inate it+s 7>4&& pilots. 3t reviewed

their -ualifications for possible pro)otion to the 6>$=$ fleet. 7)on the '$ e@cess 7irbus pilots reviewed, twelve were found -ualified. !nfortunatel*, plaintiff was not one of the twelve. 0n 0ctober <, '%;2, defendant infor)ed plaintiff of his ter)ination effective Nove)ber ', '%;2 and that he will be paid three (4) )onths salar* in lieu of three )onths notice (7nne@ D3D, pp. ='>=2, Rec.). 6ecause he could not uproot his fa)il* on such short notice, plaintiff re-uested a three>)onth notice to afford hi) ti)e to e@haust all possible avenues for reconsideration and retention. Defendant ave onl* two (2) )onths notice and one (') )onth salar*. (t.s.n., Nov. '2, '%;$. p. 2<). 7 rieved, plaintiff on 5une 2%, '%;4, instituted a case for ille al dis)issal before the Labor 7rbiter. Defendant )oved to dis)iss on Furisdiction rounds. 6efore said )otion was resolved, the co)plaint was withdrawn. Thereafter, plaintiff filed the instant case for da)a es due to ille al ter)ination of contract of services before the court a 5uo (Co)plaint, pp. '>'&, Rec.). 7 ain, defendant on ,ebruar* '', '%;$ filed a )otion to dis)iss alle in inter alia. (') that the court has no Furisdiction over the subFect )atter of the case, and (2) that 8hilippine courts have no Furisdiction over the instant case. Defendant contends that the co)plaint is for ille al dis)issal to ether with a )one* clai) arisin out of and in the course of plaintiffs e)plo*)ent Dthus it is the Labor 7rbiter and the NLRC who have the Furisdiction pursuant to 7rticle 2'$ of the Labor CodeD and that, since plaintiff was e)plo*ed in "in apore, all other aspects of his e)plo*)ent contract and?or docu)ents e@ecuted in "in apore. Thus, defendant postulates that "in apore laws should appl* and courts thereat shall have Furisdiction. (pp. <&>9%, Rec.). 3n traversin defendant+s ar u)ents, plaintiff clai)ed that. (') where the ite)s de)anded in a co)plaint are the natural conse-uences flowin fro) a breach of an obli ation and not labor benefits, the case is intrinsicall* a civil disputeG (2) the case involves a -uestion that is be*ond the field of specialiNation of labor arbitersG and (4) if the co)plaint is rounded not on the e)plo*ee+s dis)issal #er se but on the )anner of said dis)issal and the conse-uence thereof, the case falls under the Furisdiction of the civil courts. (pp. $&>$4, Rec.) 0n 1arch 24, '%;$, the court a 5uo denied defendant+s )otion to dis)iss (pp. ;2>;=, 1bi+). The )otion for reconsideration was likewise denied. (p. %< ibi+.) 0n "epte)ber '9, '%;$, defendant filed its answer reiteratin the rounds relied upon in its )otion to dis)iss and further ar uin that plaintiff is barred b* laches, waiver, and estoppel fro) institutin the co)plaint and that he has no cause of action . (pp. '&2>''<) ' 0n 7pril '&, '%%', the trial court handed down its decision in favor of plaintiff. The dispositive portion of which reads. :2/R/,0R/, Fud )ent is hereb* rendered in favor of plaintiff 1enandro Laureano and a ainst defendant"in apore 7irlines Li)ited, orderin defendant to pa* plaintiff the a)ounts of I "3N#4%9,'&=.&&, or its e-uivalent in 8hilippine currenc* at the current rate of e@chan e at the ti)e of pa*)ent, as and for unearned
CONFLICT OF LAWS CASES |8

co)pensation with le al interest fro) the filin of the co)plaint until full* paidG "3N#'<=,$=2.&&, or its e-uivalent in 8hilippine currenc* at the current rate of e@chan e at the ti)e of pa*)entG and the further a)ounts of 89$,<&&.&& as conse-uential da)a es with le al interest fro) the filin of the co)plaint until full* paidG 8',&&&,&&&.&& as and for )oral da)a esG 8',&&&,&&&.&& as and for e@e)plar* da)a esG and 8'&&,&&&.&& as and for attorne*+s fees. Costs a ainst defendant. "0 0RD/R/D.2 "in apore 7irlines ti)el* appealed before the respondent court and raised the issues of Furisdiction, validit* of ter)ination, estoppel, and da)a es. 0n 0ctober 2%, '%%4, the appellate court set aside the decision of the trial court, thus, . . . 3n the instant case, the action for da)a es due to ille al ter)ination was filed b* plaintiff>appellee onl* on 5anuar* ;, '%;$ or )ore than four (=) *ears after the effectivit* date of his dis)issal on Nove)ber ', '%;2. Clearl*, plaintiff>appellee+s action has alread* prescribed. :2/R/,0R/, the appealed decision is hereb* R/L/R"/D and "/T 7"3D/. The co)plaint is hereb* dis)issed. "0 0RD/R/D.4 8etitioner+s and "in apore 7irlines+ respective )otions for reconsideration were denied. Now, before the Court, petitioner poses the followin -ueries. '. 3" T2/ 8R/"/NT 7CT30N 0N/ 67"/D 0N C0NTR7CT :23C2 8R/"CR36/" 3N T/N E/7R" !ND/R 7RT3CL/ ''== 0, T2/ N/: C3L3L C0D/ 0R 0N/ ,0R D717H/" 7R3"3NH ,R01 7N 3N5!RE T0 T2/ R3H2T" 0, T2/ 8L73NT3,, :23C2 8R/"CR36/" 3N ,0!R E/7R" !ND/R 7RT3CL/ ''=9 0, T2/ N/: C3L3L C0D/U 2. C7N 7N /18L0E// :3T2 7 ,3O/D 8/R30D 0, /18L0E1/NT 6/ R/TR/NC2/D 6E 23" /18L0E/RU 4. C7N T2/R/ 6/ L7L3D R/TR/NC21/NT 3, 7N /18L0E/R 1/R/LE ,73L" T0 R/7L3P/ T2/ /O8/CT/D 8R0,3T" /L/N 3, 3T :/R/ N0T, 3N ,7CT, 3NC!RR3NH L0""/"U 7t the outset, we find it necessar* to state our concurrence on the assu)ption of Furisdiction b* the Re ional Trial Court of 1anila, 6ranch %. The trial court ri htl* ruled on the application of 8hilippine law, thus. Neither can the Court deter)ine whether the ter)ination of the plaintiff is le al under the "in apore Laws because of the defendant+s failure to show which specific laws of "in apore Laws appl* to this case. 7s substantiall* discussed in the precedin para raphs, the 8hilippine Courts do not take Fudicial notice of the laws of "in apore. The defendant that clai)s the applicabilit* of the "in apore Laws to this case has the burden of proof. The defendant has failed to do so. Therefore, the 8hilippine law should be applied.= Respondent Court of 7ppeals ac-uired Furisdiction when defendant filed its appeal before said court. < 0n this )atter, respondent court was correct when it barred defendant>appellant below fro) raisin further the issue of Furisdiction. 9

8etitioner now raises the issue of whether his action is one based on 7rticle ''== or on 7rticle ''=9 of the Civil Code. 7ccordin to hi), his ter)ination of e)plo*)ent effective Nove)ber ', '%;2, was based on an e)plo*)ent contract which is under 7rticle ''==, so his action should prescribe in '& *ears as provided for in said article. Thus he clai)s the rulin of the appellate court based on 7rticle ''=9 where prescription is onl* four (=) *ears, is an error. The appellate court concluded that the action for ille al dis)issal ori inall* filed before the Labor 7rbiter on 5une 2%, '%;4, but which was withdrawn, then filed a ain in '%;$ before the Re ional Trial Court, had alread* prescribed. 3n our view, neither 7rticle ''==$ nor 7rticle ''=9; of the Civil Code is here pertinent. :hat is applicable is 7rticle 2%' of the Labor Code, vi7. 7rt. 2%'. Mone) clai s. I 7ll )one* clai)s arisin fro) e)plo*ee> e)plo*er relations accruin durin the effectivit* of this Code shall be filed within three (4) *ears fro) the ti)e the cause of action accruedG otherwise the* shall be forever barred. @@@ @@@ @@@ :hat rules on prescription should appl* in cases like this one has lon been decided b* this Court. 3n ille al dis)issal, it is settled, that the ten>*ear prescriptive period fi@ed in 7rticle ''== of the Civil Code a) not be invoked b* petitioners, for the Civil Code is a law of eneral application, while the prescriptive period fi@ed in 7rticle 2%2 of the Labor Code Bnow 7rticle 2%'C is a "8/C37L L7: applicable to clai)s arisin fro) e)plo*ee>e)plo*er relations. % 1ore recentl* in 4e <u7 an vs. "ourt o( $##eals,'& where the )one* clai) was based on a written contract, the Collective 6ar ainin 7 ree)ent, the Court held. . . . The lan ua e of 7rt. 2%' of the Labor Code does not li)it its application onl* to D)one* clai)s specificall* recoverable under said CodeD but covers all )one* clai)s arisin fro) an e)plo*ee>e)plo*er relationsD (Citin Cadalin v. 80/7 7d)inistrator, 24; "CR7 $2', $9= B'%%=CG and !* v. National Labor Relations Co))ission, 29' "CR7 <&<, <'< B'%%9C). . . . 3t should be noted further that 7rticle 2%' of the Labor Code is a special law applicable to )one* clai)s arisin fro) e)plo*er>e)plo*ee relationsG thus, it necessaril* prevails over 7rticle ''== of the Civil Code, a eneral law. 6asic is the rule in statutor* construction that Dwhere two statutes are of e-ual theoretical application to a particular case, the one desi ned therefore should prevail.D (Citin LeveriNa v. 3nter)ediate 7ppellate Court, '<$ "CR7 2;2, 2%=.) <eneralia s#ecialibus non +ero:ant.'' 3n the li ht of 7rticle 2%', aforecited, we a ree with the appellate court+s conclusion that petitioner+s action for +a a:es +ue to ille:al ter ination filed a ain on 5anuar* ;, '%;$ or )ore than four (=) *ears after the effective date of his dis)issal on Nove)ber ', '%;2 has alread* prescribed. 3n the instant case, the action for da)a es due to ille al ter)ination was filed b* plaintiff>appelle onl* on 5anuar* ;, '%;$ or )ore than four (=) *ears after the effectivit* date of his dis)issal on Nove)ber ', '%;2. Clearl*, plaintiff>appellee+s action has alread* prescribed. :e base our conclusion not on 7rticle ''== of the Civil Code but on which sets the prescription period at three (4) *ears and which overns under this Furisdiction.
CONFLICT OF LAWS CASES |9

8etitioner clai)s that the runnin of the prescriptive period was tolled when he filed his co)plaint for ille al dis)issal before the Labor 7rbiter of the National Labor Relations Co))ission. 2owever, this clai) deserves scant considerationG it has no le al le to stand on. 3n Ol) #ia 1nternational* 1nc., vs., "ourt o( $##eals, we held that Dalthou h the co))ence)ent of a civil action stops the runnin of the statute of prescription or li)itations, its dis)issal or voluntar* abandon)ent b* the plaintiff leaves in e@actl* the sa)e position as thou h no action had been co))enced at all.D '2 Now, as to whether petitioner+s separation fro) the co)pan* due to retrench)ent was valid, the appellate court found that the e)plo*)ent contract of petitioner allowed for pre>ter)ination of e)plo*)ent. :e a ree with the Court of 7ppeals when it said, 3t is a settled rule that contracts have the force of law between the parties. ,ro) the )o)ent the sa)e is perfected, the parties are bound not onl* to the fulfill)ent of what has been e@pressl* stipulated but also to all conse-uences which, accordin to their nature, )a* be in keepin with ood faith, usa e and law. Thus, when plaintiff>appellee accepted the offer of e)plo*)ent, he was bound b* the ter)s and conditions set forth in the contract, a)on others, the ri ht of )utual ter)ination b* ivin three )onths written notice or b* pa*)ent of three )onths salar*. "uch provision is clear and readil* understandable, hence, there is no roo) for interpretation. @@@ @@@ @@@ ,urther, plaintiff>appellee+s contention that he is not bound b* the provisions of the 7 ree)ent, as he is not a si nator* thereto, deserves no )erit. 3t )ust be noted that when plaintiff>appellee+s e)plo*)ent was confir)ed, he applied for )e)bership with the "in apore 7irlines Li)ited (8ilots) 7ssociation, the si nator* to the afore)entioned 7 ree)ent. 7s such, plaintiff>appellee is estopped fro) -uestionin the le alit* of the said a ree)ent or an* proviso contained therein. '4 1oreover, the records of the present case clearl* show that respondent court+s decision is a)pl* supported b* evidence and it did not err in its findin s, includin the reason for the retrench)ent. :hen defendant>appellant was faced with the world>wide recession of the airline industr* resultin in a slow down in the co)pan*+s rowth particularl* in the re ional operation (7sian 7rea) where the 7irbus 4&& operates. 3t had no choice but to adopt cost cuttin )easures, such as cuttin down services, nu)ber of fre-uencies of fli hts, and reduction of the nu)ber of fl*in points for the 7>4&& fleet (t.s.n., 5ul* 9, '%;;, pp. '$>';). 7s a result, defendant>appellant had to la* off 7>4&& pilots, includin plaintiff>appellee, which it found to be in e@cess of what is reasonabl* needed.'= 7ll these considered, we find sufficient factual and le al basis to conclude that petitioner+s ter)ination fro) e)plo*)ent was for an authoriNed cause, for which he was iven a)ple notice and opportunit* to be heard, b* respondent co)pan*. No error nor rave abuse of discretion, therefore, could be attributed to respondent appellate court.1@w#hi1.nAt 7CC0RD3NHLE, the instant petition is D3"13""/D. The decision of the Court of 7ppeals in C.7. CL No. 4==$9 is 7,,3R1/D.

"0 0RD/R/D. 1enandro Laureano vs Court of 7ppeals o& Febr-%r. +, 2013 3&. S"-$ .1. 8 "on(lict o( 'aws 8 9rivate 1nternational 'aw 8 9roo( o( 3orei:n 'aw B $##licabilit) o( 3orei:n 'aws 3n '%$;, 1enandro Laureano was hired as a pilot b* the "in apore 7irlines Li)ited ("7L). 3n '%;2 however, "7L was hit b* recession and so it had to la* off so)e e)plo*ees. Laureano was one of the). Laureano asked for reconsideration but it was not ranted. 7 rieved, Laureano filed a labor case for ille al dis)issal a ainst "7L. 6ut in '%;$, he withdrew the labor case and instead filed a civil case for da)a es due to ille al ter)ination of contract a ainst "7L. Laureano filed the case here in the 8hilippines. "7L )oved for the dis)issal of the case on the round of lack of Furisdiction. The )otion was denied. 0n trial, "7L alle ed that the ter)ination of Laureano is valid pursuant to "in aporean law. The trial court ruled in favor of Laureano. "7L appealed the case raisin the issue of lack of Furisdiction, non applicabilit* of 8hilippine laws, and estoppel, a)on others. The Court of 7ppeals reversed the trial court. I!!(E/ :hether or not "in aporean Law is applicable to this case. #ELD/ No. The specific "in aporean Law which holds valid the dis)issal of Laureano is not proved in court. 7s such, the trial court cannot )ake a deter)ination if the ter)ination is indeed valid under "in aporean Law. 8hilippine courts do not take Fudicial notice of the laws of "in apore. "7L has the burden of proof. "7L failed to prove such law hence 8hilippine law shall appl*. 2owever, the case )ust be dis)issed on the round of estoppel. !nder our laws, all )one* clai)s arisin fro) e)plo*er>e)plo*ee relationships )ust be filed within three *ears fro) the ti)e the cause of action accrued. LaureanoMs cause of action accrued in '%;2 when he was ter)inated but he onl* filed the )one* clai) in '%;$ or )ore than three *ears fro) '%;2. 2ence he is alread* barred b* prescription.

G.R. No. 1)**8C 0ctober 29, 2&&$ EDIE!TAFF (ILDER! INTERNATIONAL, INC., #etitioner* vs. NATIONAL LA OR RELATION! COMMI!!ION %&' ELEAFAR !. GRAN, res#on+ents. CONFLICT OF LAWS CASES | 10

DECI!ION C2'$S"O* D-.* D.E T4e C%6e This 8etition for Review on Certiorari ' seeks to set aside the 0ctober ';, 2&&& Decision 2 of the Court of 7ppeals (C7) in C7>H.R. "8 No. <9'2& which affir)ed the 5anuar* '<, '%%% Decision4 and "epte)ber 4&, '%%% Resolution = rendered b* the National Labor Relations Co))ission (NLRC) (Third Division) in 80/7 7D5 (L) %=>&9>2'%=, orderin /@pertise "earch 3nternational (/"3), /D3>"taffbuilders 3nternational, 3nc. (/D3), and 0)ar 7h)ed 7li 6in 6echr /st. (076) Fointl* and severall* to pa* /leaNar ". Hran (Hran) the a)ount of !"D '9,'<&.&& as unpaid salaries. T4e F%c06 8etitioner /D3 is a corporation en a ed in recruit)ent and place)ent of 0verseas ,ilipino :orkers (0,:s).< /"3 is anotherrecruit)ent a enc* which collaborated with /D3 to process the docu)entation and deplo*)ent of private respondent to "audi 7rabia. 8rivate respondent Hran was an 0,: recruited b* /D3, and deplo*ed b* /"3 to work for 076, in Ri*adh, Jin do) of "audi 7rabia.9 3t appears that 076 asked /D3 throu h its 0ctober 4, '%%4 letter for curricula vitae of -ualified applicants for the position of VCo)puter "pecialist.W$ 3n a facsi)ile trans)ission dated Nove)ber 2%, '%%4, 076 infor)ed /D3 that, fro) the applicantsM curricula vitae sub)itted to it for evaluation, it selected Hran for the position of VCo)puter "pecialist.W The fa@ed letter also stated that if Hran a rees to the ter)s and conditions of e)plo*)ent contained in it, one of which was a )onthl* salar* of "R ("audi Ri*al) 2,2<&.&& (!"D 9&&.&&), /D3 )a* arran e for HranMs i))ediate dispatch.; 7fter acceptin 076Ms offer of e)plo*)ent, Hran si ned an e)plo*)ent contract % that ranted hi) a )onthl* salar* of !"D ;<&.&& for a period of two *ears. Hran was then deplo*ed to Ri*adh, Jin do) of "audi 7rabia on ,ebruar* $, '%%=. !pon arrival in Ri*adh, Hran -uestioned the discrepanc* in his )onthl* salar*Ihis e)plo*)ent contract stated !"D ;<&.&&G while his 8hilippine 0verseas /)plo*)ent 7 enc* (80/7) 3nfor)ation "heet indicated !"D 9&&.&& onl*. 2owever, throu h the assistance of the /D3 office in Ri*adh, 076 a reed to pa* Hran !"D ;<&.&& a )onth.'& 7fter Hran had been workin for about five )onths for 076, his e)plo*)ent was ter)inated throu h 076Ms 5ul* %, '%%= letter,'' on the followin rounds. '. Non>co)pliance to contract re-uire)ents b* the recruit)ent a enc* pri)aril* on *our salar* and contract duration. 2. Non>co)pliance to pre>-ualification re-uire)ents b* the recruit)ent a enc*B,C vide 076 letter ref. ,><$<'>%4, dated 0ctober 4, '%%4.'2 4. 3nsubordination or disobedience to Top 1ana e)ent 0rder and?or instructions (non>sub)ittal of dail* activit* reports despite several instructions). 0n 5ul* '', '%%=, Hran received fro) 076 the total a)ount of "R 2,%=;.&& representin his final pa*, and on the sa)e da*, he e@ecuted a Declaration '4 releasin 076 fro) an* financial obli ation or otherwise, towards hi). 7fter his arrival in the 8hilippines, Hran instituted a co)plaint, on 5ul* 2', '%%=, a ainst /"3?/D3, 076, Countr* 6ankers 3nsurance Corporation, and :estern Huarant* Corporation with the NLRC, National Capital Re ion, TueNon Cit*, which was docketed as 80/7 7D5 (L) %=>&9> 2'%= for underpa*)ent of wa es?salaries and ille al dis)issal. T4e R-83&< o5 04e L%bor Arb30er 3n his ,ebruar* '&, '%%; Decision,'= Labor 7rbiter 1anuel R. Cada*, to who) HranMs case was assi ned, ruled that there was neither underpa*)ent nor ille al dis)issal. The Labor 7rbiter reasoned that there was no underpa*)ent of salaries since accordin to the 80/7>0verseas Contract :orker (0C:) 3nfor)ation "heet, HranMs )onthl* salar* was !"D 9&&.&&, and in his Confir)ation of 7ppoint)ent as Co)puter "pecialist, his )onthl* basic salar* was fi@ed at "R 2,<&&.&&, which was e-uivalent to !"D 9&&.&&. 7rbiter Cada* also cited the Declaration e@ecuted b* Hran, to Fustif* that Hran had no clai) for unpaid salaries or wa es a ainst 076. :ith re ard to the issue of ille al dis)issal, the Labor 7rbiter found that Hran failed to refute /D3Ms alle ationsG na)el*, (') that Hran did not sub)it a sin le activit* report of his dail* activit* as dictated b* co)pan* polic*G (2) that he was not -ualified for the Fob as co)puter specialist due to his insufficient knowled e in pro ra))in and lack of knowled e in 7C7D s*ste)G (4)

that Hran refused to follow )ana e)entMs instruction for hi) to ain )ore knowled e of the Fob to prove his worth as co)puter specialistG (=) that HranMs e)plo*)ent contract had never been substitutedG (<) and that Hran was paid a )onthl* salar* of !"D ;<&.&&, and !"D 4<&.&& )onthl* as food allowance. 7ccordin l*, the Labor 7rbiter decided that Hran was validl* dis)issed fro) his work due to insubordination, disobedience, and his failure to sub)it dail* activit* reports. Thus, on ,ebruar* '&, '%%;, 7rbiter Cada* dis)issed HranMs co)plaint for lack of )erit. Dissatisfied, Hran filed an 7ppeal'< on 7pril 9, '%%; with the NLRC, Third Division. 2owever, it appears fro) the records that Hran failed to furnish /D3 with a cop* of his 7ppeal 1e)orandu). T4e R-83&< o5 04e NLRC The NLRC held that /D3Ms see)in l* har)less transfer of HranMs contract to /"3 is actuall* Vreprocessin ,W which is a prohibited transaction under 7rticle 4= (b) of the Labor Code. This sche)e constituted )isrepresentation throu h the conspirac* between /D3 and /"3 in )isleadin Hran and even 80/7 of the actual ter)s and conditions of the 0,:Ms e)plo*)ent. 3n addition, it was found that Hran did not co))it an* act that constituted a le al round for dis)issal. The alle ed non>co)pliance with contractual stipulations relatin to HranMs salar* and contract duration, and the absence of pre>-ualification re-uire)ents cannot be attributed to Hran but to /D3, which dealt directl* with 076. 3n addition, the char e of insubordination was not substantiated, and Hran was not even afforded the re-uired notice and investi ation on his alle ed offenses. Thus, the NLRC reversed the Labor 7rbiterMs Decision and rendered a new one, the dispositive portion of which reads. :2/R/,0R/, the assailed decision is "/T 7"3D/. Respondents /@pertise "earch 3nternational, 3nc., /D3 "taffbuilders 3ntMl., 3nc. and 0)ar 7h)ed 7li 6in 6echr /st. (076) are hereb* ordered Fointl* and severall* liable to pa* the co)plainant /leaNar Hran the 8hilippine peso e-uivalent at the ti)e of actual pa*)ent of "3OT//N T20!"7ND 0N/ 2!NDR/D ,3,TE !" D0LL7R" (!"#'9,'<&.&&) representin his salaries for the une@pired portion of his contract. "0 0RD/R/D.'9 Hran then filed a 1otion for /@ecution of 5ud )ent'$ on 1arch 2%, '%%% with the NLRC and petitioner receivin a cop* of this )otion on the sa)e date.'; To prevent the e@ecution, petitioner filed an 0pposition '% to HranMs )otion ar uin that the :rit of /@ecution cannot issue because it was not notified of the appellate proceedin s before the NLRC and was not iven a cop* of the )e)orandu) of appeal nor an* opportunit* to participate in the appeal. "eein that the NLRC did not act on HranMs )otion after /D3 had filed its 0pposition, petitioner filed, on 7u ust 29, '%%%, a 1otion for Reconsideration of the NLRC Decision after receivin a cop* of the Decision on 7u ust '9, '%%%.2& The NLRC then issued a Resolution 2' den*in petitionerMs 1otion for Reconsideration, ratiocinatin that the issues and ar u)ents raised in the )otion Vhad alread* been a)pl* discussed, considered, and ruled uponW in the Decision, and that there was Vno co ent reason or patent or palpable error that warrant an* disturbance thereof.W !nconvinced of the NLRCMs reasonin , /D3 filed a 8etition for Certiorari before the C7. 8etitioner clai)ed in its petition that the NLRC co))itted rave abuse of discretion in ivin due course to the appeal despite HranMs failure to perfect the appeal. T4e R-83&< o5 04e Co-r0 o5 A77e%86 The C7 subse-uentl* ruled on the procedural and substantive issues of /D3Ms petition. 0n the procedural issue, the appellate court held that VHranMs failure to furnish a cop* of his appeal )e)orandu) Bto /D3 wasC a )ere for)al lapse, an e@cusable ne lect and not a Furisdictional defect which would Fustif* the dis)issal of his appeal.W 22 The court also held that petitioner /D3 failed to prove that private respondent was ter)inated for a valid cause and in accordance with due processG and that HranMs Declaration releasin 076 fro) an* )onetar* obli ation had no force and effect. The appellate court ratiocinated that /D3 had the burden of provin HranMs inco)petenceG however, other than the ter)ination letter, no evidence was presented to show how and wh* Hran was considered to be inco)petent. The court held that since the law re-uires the recruit)ent a encies to subFect 0,:s to trade tests before deplo*)ent, Hran )ust have been co)petent and -ualifiedG otherwise, he would not have been hired and deplo*ed abroad. CONFLICT OF LAWS CASES | 11

7s for the char e of insubordination and disobedience due to HranMs failure to sub)it a VDail* 7ctivit* Report,W the appellate court found that /D3 failed to show that the sub)ission of the VDail* 7ctivit* ReportW was a part of HranMs dut* or the co)pan*Ms polic*. The court also held that even if Hran was uilt* of insubordination, he should have Fust been suspended or repri)anded, but not dis)issed. The C7 also held that Hran was not afforded due process, iven that 076 did not abide b* the twin notice re-uire)ent. The court found that Hran was ter)inated on the sa)e da* he received the ter)ination letter, without havin been apprised of the bases of his dis)issal or afforded an opportunit* to e@plain his side. ,inall*, the C7 held that the Declaration si ned b* Hran did not bar hi) fro) de)andin benefits to which he was entitled. The appellate court found that the Declaration was in the for) of a -uitclai), and as such is frowned upon as contrar* to public polic* especiall* where the )onetar* consideration iven in the Declaration was ver* )uch less than what he was le all* entitled toIhis backwa es a)ountin to !"D '9,'<&.&&. 7s a result of these findin s, on 0ctober ';, 2&&&, the appellate court denied the petition to set aside the NLRC Decision. 2ence, this instant petition is before the Court. T4e I66-e6 8etitioner raises the followin issues for our consideration. 3. :2/T2/R T2/ ,73L!R/ 0, HR7N T0 ,!RN3"2 7 C08E 0, 23" 788/7L 1/10R7ND!1 T0 8/T3T30N/R /D3 :0!LD C0N"T3T!T/ 7 5!R3"D3CT30N7L D/,/CT 7ND 7 D/8R3L7T30N 0, 8/T3T30N/R /D3M" R3H2T T0 D!/ 8R0C/"" 7" :0!LD 5!"T3,E T2/ D3"13""7L 0, HR7NM" 788/7L. 33. :2/T2/R 8/T3T30N/R /D3 27" /"T76L3"2/D 6E :7E 0, "!6"T7NT37L /L3D/NC/ T27T HR7NM" T/R13N7T30N :7" 5!"T3,376L/ 6E R/7"0N 0, 3NC018/T/NC/. C0R0LL7RE 2/R/T0, :2/T2/R T2/ 8R3/T0 L". NLRC R!L3NH, 7" 788L3/D 6E T2/ C0!RT 0, 788/7L", 3" 788L3C76L/ 3N T2/ 3N"T7NT C7"/. 333. :2/T2/R 8/T3T30N/R 27" /"T76L3"2/D 6E :7E 0, "!6"T7NT37L /L3D/NC/ T27T HR7NM" T/R13N7T30N :7" 5!"T3,376L/ 6E R/7"0N 0, 3N"!60RD3N7T30N 7ND D3"06/D3/NC/. 3L. :2/T2/R HR7N :7" 7,,0RD/D D!/ 8R0C/"" 8R30R T0 T/R13N7T30N. L. :2/T2/R HR7N 3" /NT3TL/D T0 67CJ:7H/" ,0R T2/ !N/O83R/D 80RT30N 0, 23" C0NTR7CT.24 T4e Co-r0G6 R-83&< The petition lacks )erit e@cept with respect to HranMs failure to furnish /D3 with his 7ppeal 1e)orandu) filed with the NLRC. F3r60 I66-e/ NLRCG6 D-0. 36 0o Re?-3re Re67o&'e&0 0o Pro93'e Pe0303o&er % Co7. o5 04e A77e%8 8etitioner /D3 clai)s that HranMs failure to furnish it a cop* of the 7ppeal 1e)orandu) constitutes a Furisdictional defect and a deprivation of due process that would warrant a reFection of the appeal. This position is devoid of )erit. 3n a catena of cases, it was ruled that 5%38-re o5 %77e88%&0 0o 5-r&364 % co7. o5 04e %77e%8 0o 04e %'9er6e 7%r0. 36 &o0 5%0%8 0o 04e %77e%8. 3n 2stra+a v. >ational 'abor -elations "o ission,2= this Court set aside the order of the NLRC which dis)issed an appeal on the sole round that the appellant did not furnish the appellee a )e)orandu) of appeal contrar* to the re-uire)ents of 7rticle 224 of the New Labor Code and "ection %, Rule O333 of its 3)ple)entin Rules and Re ulations. 7lso, in D.4. Ma:#a)o "usto s 0rokera:e "or#. v. >'-" , the order of dis)issal of an appeal to the NLRC based on the round that V there is no showin: whatsoever that a co#) o( the a##eal was serve+ b) the a##ellant on the a##elleeV2<was annulled. The Court ratiocinated as follows. The failure to ive a cop* of the appeal to the adverse part* was a )ere for)al lapse, an e@cusable ne lect. Ti)e and a ain :e have acted on petitions to review decisions of the Court of 7ppeals even in the absence of proof of service of a cop* thereof to the Court of 7ppeals as re-uired b* "ection ' of Rule =<, Rules of Court. We %c0 o& 04e 7e0303o&6 %&' 63m78. re?-3re 04e 7e0303o&er6 0o com78. 2304 04e r-8e.29 (/)phasis supplied.)

The D.4. Ma:#a)o rulin was reiterated in "arnation 9hili##ines 2 #lo)ees 'abor FnionB33W v. >ational 'abor -elations "o ission* 2$ 9a:+onsalan v. >'-",2; and in Sunrise Mannin: $:enc)* 1nc. v. >'-".2% Thus, the doctrine that evolved fro) these cases is that failure to furnish the adverse part* with a cop* of the appeal is treated onl* as a for)al lapse, an e@cusable ne lect, and hence, not a Furisdictional defect. 7ccordin l*, in such a situation, the appeal should not be dis)issedG however, it should not be iven due course either. 7s enunciated in D.4. Ma:#a)o, 04e '-0. 04%0 36 3m7o6e' o& 04e NLRC, 3& 6-c4 % c%6e, 36 0o re?-3re 04e %77e88%&0 0o com78. 2304 04e r-8e 04%0 04e o77o63&< 7%r0. 64o-8' be 7ro93'e' 2304 % co7. o5 04e %77e%8 memor%&'-m. :hile HranMs failure to furnish /D3 with a cop* of the 7ppeal 1e)orandu) is e@cusable, the abFect failure of the NLRC to order Hran to furnish /D3 with the 7ppeal 1e)orandu) constitutes :rave abuse o( +iscretion. The records reveal that the NLRC discovered that Hran failed to furnish /D3 a cop* of the 7ppeal 1e)orandu). The NLRC then ordered Hran to present proof of service. 3n co)pliance with the order, Hran sub)itted a cop* of Ca)p Cra)e 8ost 0fficeMs list of )ail?parcels sent on 7pril $, '%%;.4& The post officeMs list shows that private respondent Hran sent two pieces of )ail on the sa)e date. one addressed to a certain Dan 0. de HuN)an of Le aspi Lilla e, 1akatiG and the other appears to be addressed to Neil 6. Harcia (or Hran), 4' of /r)ita, 1anilaIboth of who) are not connected with petitioner. This )ailin list, however, is not a conclusive proof that /D3 indeed received a cop* of the 7ppeal 1e)orandu). "ec. < of the NLRC Rules of 8rocedure ('%%&) provides for the proof and co)pleteness of service in proceedin s before the NLRC. "ection <.42 8roof and co)pleteness of service.IThe return is #ri a (acie proof of the facts indicated therein.!er93ce b. re<360ere' m%38 36 com78e0e -7o& rece370 b. 04e %''re66ee or 436 %<e&0G but if the addressee fails to clai) his )ail fro) the post office within five (<) da*s fro) the date of first notice of the post)aster, service shall take effect after such ti)e. (/)phasis supplied.) 2ence, if the service is done throu h re istered )ail, it is onl* dee)ed co)plete when the addressee or his a ent received the )ail or after five (<) da*s fro) the date of first notice of the post)aster. 2owever, the NLRC Rules do not state what would constitute proper proof of service. "ec. '4, Rule '4 of the Rules of Court, provides for proofs of service. "ection '4. 9roo( o( service.I8roof of personal service shall consist of a written ad)ission of the part* served or the official return of the server, or the affidavit of the part* servin , containin a full state)ent of the date, place and )anner of service. 3f the service is b* ordinar* )ail, proof thereof shall consist of an affidavit of the person )ailin of facts showin co)pliance with section $ of this Rule. I5 6er93ce 36 m%'e b. re<360ere' m%38, 7roo5 64%88 be m%'e b. 6-c4 %553'%930 %&' re<360r. rece370 366-e' b. 04e m%383&< o553ce . T4e re<360r. re0-r& c%r' 64%88 be 538e' 3mme'3%0e8. -7o& 306 rece370 b. 04e 6e&'er, or 3& 83e- 04ereo5 04e -&c8%3me' 8e00er 0o<e04er 2304 04e cer0353e' or 62or& co7. o5 04e &o03ce <39e& b. 04e 7o60m%60er 0o 04e %''re66ee(e)phasis supplied). 6ased on the fore oin provision, it is obvious that the list sub)itted b* Hran is not conclusive proof that he had served a cop* of his appeal )e)orandu) to /D3, nor is it conclusive proof that /D3 received its cop* of the 7ppeal 1e)orandu). 2e should have sub)itted an affidavit provin that he )ailed the 7ppeal 1e)orandu) to ether with the re istr* receipt issued b* the post officeG afterwards, Hran should have i))ediatel* filed the re istr* return card. 2ence, after seein that Hran failed to attach the proof of service, the NLRC should not have si)pl* accepted the post officeMs list of )ail and parcels sentG but 30 64o-8' 4%9e re?-3re' Gr%& 0o 7ro7er8. 5-r&364 04e o77o63&< 7%r03e6 2304 co73e6 o5 436 A77e%8 Memor%&'-m %6 7re6cr3be' 3& J.%. Ma!payo %&' 04e o04er c%6e6. The NLRC should not have proceeded with the adFudication of the case, as this constitutes :rave abuse o( +iscretion. The larin failure of NLRC to ensure that Hran should have furnished petitioner /D3 a cop* of the 7ppeal 1e)orandu) before renderin Fud )ent reversin the dis)issal of HranMs co)plaint constitutes an evasion of the pertinent NLRC Rules and established Furisprudence. :orse, this failure deprived /D3 of procedural due process uaranteed b* the Constitution which can serve as basis for the nullification of proceedin s in the appeal before the NLRC. 0ne can onl* CONFLICT OF LAWS CASES | 12

sur)ise the shock and dis)a* that 076, /D3, and /"3 e@perienced when the* thou ht that the dis)issal of HranMs co)plaint beca)e final, onl* to receive a cop* of HranMs 1otion for /@ecution of 5ud )ent which also infor)ed the) that Hran had obtained a favorable NLRC Decision. This is not level pla*in field and absolutel* unfair and discri)inator* a ainst the e)plo*er and the Fob recruiters. The ri hts of the e)plo*ers to procedural due process cannot be cavalierl* disre arded for the* too have ri hts assured under the Constitution. 2owever, instead of annullin the dispositions of the NLRC and re)andin the case for further proceedin s we will resolve the petition based on the records before us to avoid a protracted liti ation.44 The second and third issues have a co))on )atterIwhether there was Fust cause for HranMs dis)issalIhence, the* will be discussed Fointl*. !eco&' %&' T43r' I66-e6/ W4e04er Gr%&G6 '36m366%8 36 ;-60353%b8e b. re%6o& o5 3&com7e0e&ce, 3&6-bor'3&%03o&, %&' '36obe'3e&ce 3n cases involvin 0,:s, the ri hts and obli ations a)on and between the 0,:, the local recruiter?a ent, and the forei n e)plo*er?principal are overned b* the e)plo*)ent contract. 7 contract freel* entered into is considered law between the partiesG and hence, should be respected. 3n for)ulatin the contract, the parties )a* establish such stipulations, clauses, ter)s and conditions as the* )a* dee) convenient, provided the* are not contrar* to law, )orals, ood custo)s, public order, or public polic*.4= 3n the present case, the e)plo*)ent contract si ned b* Hran specificall* states that "audi Labor Laws will overn )atters not provided for in the contract (e. . specific causes for ter)ination, ter)ination procedures, etc.). 6ein the law intended b* the parties ( le, loci intentiones) to appl* to the contract, "audi Labor Laws should overn all )atters relatin to the ter)ination of the e)plo*)ent of Hran. 3n international law, the part* who wants to have a forei n law applied to a dispute or case has the burden of provin the forei n law. The forei n law is treated as a -uestion of fact to be properl* pleaded and proved as the Fud e or labor arbiter cannot take Fudicial notice of a forei n law. 2e is presu)ed to know onl* do)estic or foru) law.4< !nfortunatel* for petitioner, it did not prove the pertinent "audi laws on the )atterG thus, the 3nternational Law doctrine of#resu e+Bi+entit) a##roach or #rocessual #resu #tion co)es into pla*.49 :here a forei n law is not pleaded or, even if pleaded, is not proved, the presu)ption is that forei n law is the sa)e as ours. 4$ Thus, we appl* 8hilippine labor laws in deter)inin the issues presented before us. 8etitioner /D3 clai)s that it had proven that Hran was le all* dis)issed due to inco)petence and insubordination or disobedience. This clai) has no )erit. 3n ille al dis)issal cases, it has been established b* 8hilippine law and Furisprudence that the e)plo*er should prove that the dis)issal of e)plo*ees or personnel is le al and Fust. "ection 44 of 7rticle 2$$ of the Labor Code4; states that. 7RT. 2$$. 13"C/LL7N/0!" 8R0L3"30N" 4% (b) "ubFect to the constitutional ri ht of workers to securit* of tenure and their ri ht to be protected a ainst dis)issal e@cept for a Fust and authoriNed cause and without preFudice to the re-uire)ent of notice under 7rticle 2;4 of this Code, the e)plo*er shall furnish the worker whose e)plo*)ent is sou ht to be ter)inated a written notice containin a state)ent of the causes for ter)ination and shall afford the latter a)ple opportunit* to be heard and to defend hi)self with the assistance of his representative if he so desires in accordance with co)pan* rules and re ulations pro)ul ated pursuant to uidelines set b* the Depart)ent of Labor and /)plo*)ent. 7n* decision taken b* the e)plo*er shall be without preFudice to the ri ht of the workers to contest the validit* or le alit* of his dis)issal b* filin a co)plaint with the re ional branch of the National Labor Relations Co))ission. T4e b-r'e& o5 7ro93&< 04%0 04e 0erm3&%03o& 2%6 5or % 9%83' or %-04or3Ae' c%-6e 64%88 re60 o& 04e em78o.er . @ @ @ 3n )an* cases, it has been held that in ter)ination disputes or ille al dis)issal cases, the e)plo*er has the burden of provin that the dis)issal is for Fust and valid causesG and failure to do so would necessaril* )ean that the dis)issal was not Fustified and therefore ille al. =& Takin into account the character of the char es and the penalt* )eted to an e)plo*ee, the e)plo*er is bound to adduce clear, accurate, consistent, and convincin evidence to prove that the dis)issal is valid and le al. =' This is consistent with the principle of securit) o( tenure as

uaranteed b* the Constitution and reinforced b* 7rticle 2$$ (b) of the Labor Code of the 8hilippines.=2 3n the instant case, petitioner clai)s that private respondent Hran was validl* dis)issed for Fust cause, due to inco)petence and insubordination or disobedience. To prove its alle ations, /D3 sub)itted two letters as evidence. The first is the 5ul* %, '%%= ter)ination letter, =4 addressed to Hran, fro) 7ndrea /. Nicolaou, 1ana in Director of 076. The second is an unsi ned 7pril '', '%%< letter== fro) 076 addressed to /D3 and /"3, which outlined the reasons wh* 076 had ter)inated HranMs e)plo*)ent. 8etitioner clai)s that Hran was inco)petent for the Co)puter "pecialist position because he had Vinsufficient knowled e in pro ra))in and Nero knowled e of BtheC 7C7D s*ste).W=< 8etitioner also clai)s that Hran was Fustifiabl* dis)issed due to insubordination or disobedience because he continuall* failed to sub)it the re-uired VDail* 7ctivit* Reports.W=92owever, other than the above)entioned letters, no other evidence was presented to show how and wh* Hran was considered inco)petent, insubordinate, or disobedient. 8etitioner /D3 had clearl* failed to overco)e the burden of provin that Hran was validl* dis)issed. 8etitionerMs i)putation of inco)petence on private respondent due to his Vinsufficient knowled e in pro ra))in and Nero knowled e of the 7C7D s*ste)W based onl* on the above )entioned letters, without an* other evidence, cannot be iven credence. 7n alle ation of inco)petence should have a factual foundation. 3nco)petence )a* be shown b* wei hin it a ainst a standard, bench)ark, or criterion. 2owever, /D3 failed to establish an* such bases to show how petitioner found Hran inco)petent. 3n addition, the ele)ents that )ust concur for the char e of insubordination or willful disobedience to prosper were not present. 3n Micro Sales O#eration >etwork v. >'-", we held that. ,or willful disobedience to be a valid cause for dis)issal, the followin twin ele)ents )ust concur. (') the e)plo*eeMs assailed conduct )ust have been willful, that is, characteriNed b* a wron ful and perverse attitudeG and (2) the order violated )ust have been reasonable, lawful, )ade known to the e)plo*ee and )ust pertain to the duties which he had been en a ed to dischar e.=$ /D3 failed to dischar e the burden of provin HranMs insubordination or willful disobedience. 7s indicated b* the second re-uire)ent provided for in Micro Sales O#eration >etwork, in order to Fustif* willful disobedience, we )ust deter)ine whether the order violated b* the e)plo*ee is reasonable, lawful, )ade known to the e)plo*ee, and pertains to the duties which he had been en a ed to dischar e. 3n the case at bar, petitioner failed to show that the order of the co)pan* which was violatedIthe sub)ission of VDail* 7ctivit* ReportsWIwas part of HranMs duties as a Co)puter "pecialist. 6efore the Labor 7rbiter, /D3 should have provided a cop* of the co)pan* polic*, HranMs Fob description, or an* other docu)ent that would show that the VDail* 7ctivit* ReportsW were re-uired for sub)ission b* the e)plo*ees, )ore particularl* b* a Co)puter "pecialist. /ven thou h /D3 and?or /"3 were )erel* the local e)plo*)ent or recruit)ent a encies and not the forei n e)plo*er, the* should have adduced additional evidence to convincin l* show that HranMs e)plo*)ent was validl* and le all* ter)inated. The burden devolves not onl* upon the forei n>based e)plo*er but also on the e)plo*)ent or recruit)ent a enc* for the latter is not onl* an a ent of the for)er, but is also solidaril* liable with the forei n principal for an* clai)s or liabilities arisin fro) the dis)issal of the worker. =; Thus, 7e0303o&er 5%38e' 0o 7ro9e 04%0 Gr%& 2%6 ;-60353%b8. '36m366e' '-e 0o 3&com7e0e&ce, 3&6-bor'3&%03o&, or 23885-8 '36obe'3e&ce. 8etitioner also raised the issue that 9rieto v. >'-",=% as used b* the C7 in its Decision, is not applicable to the present case. 3n 9rieto, this Court ruled that VBiCt is presu)ed that before their deplo*)ent, the petitioners were subFected to trade tests re-uired b* law to be conducted b* the recruitin a enc* to insure e)plo*)ent of onl* technicall* -ualified workers for the forei n principal.W <& The C7, usin the rulin in the said case, ruled that Hran )ust have passed the testG otherwise, he would not have been hired. Therefore, /D3 was at fault when it deplo*ed Hran who was alle edl* Vinco)petentW for the Fob. 7ccordin to petitioner, the 9rieto rulin is not applicable because in the case at hand, Hran )isrepresented hi)self in hiscurriculu vitae as a Co)puter "pecialistG thus, he was not -ualified for the Fob for which he was hired. CONFLICT OF LAWS CASES | 13

:e disa ree. The C7 is correct in appl*in 9rieto. The purpose of the re-uired trade test is to weed out inco)petent applicants fro) the pool of available workers. 3t is supposed to reveal applicants with false educational back rounds, and e@pose bo us -ualifications. "ince /D3 deplo*ed Hran to Ri*adh, it can be presu)ed that Hran had passed the re-uired trade test and that Hran is -ualified for the Fob. /ven if there was no obFective trade test done b* /D3, it was still /D3Ms responsibilit* to subFect Hran to a trade testG and its failure to do so onl* weakened its position but should not in an* wa* preFudice Hran. 3n an* case, the issue is rendered )oot and acade)ic because HranMs inco)petenc* is unproved. Fo-r04 I66-e/ Gr%& 2%6 &o0 A55or'e' D-e Proce66 7s discussed earlier, in the absence of proof of "audi laws, 8hilippine Labor laws and re ulations shall overn the relationship between Hran and /D3. Thus, our laws and rules on the re-uisites of due process relatin to ter)ination of e)plo*)ent shall appl*. 8etitioner /D3 clai)s that private respondent Hran was afforded due process, since he was allowed to work and i)prove his capabilities for five )onths prior to his ter)ination. <' /D3 also clai)s that the re-uire)ents of due process, as enunciated in Santos* Dr. v. >'-",<2 and Mala)a Shi##in: Services* 1nc. v. >'-" ,<4 cited b* the C7 in its Decision, were properl* observed in the present case. This position is untenable. 3n $:abon v. >'-",<= this Court held that. 8rocedurall*, (') if the dis)issal is based on a Fust cause under 7rticle 2;2, the e)plo*er )ust ive the e)plo*ee two written notices and a hearin or opportunit* to be heard if re-uested b* the e)plo*ee before ter)inatin the e)plo*)ent. a notice specif*in the rounds for which dis)issal is sou ht a hearin or an opportunit* to be heard and after hearin or opportunit* to be heard, a notice of the decision to dis)issG and (2) if the dis)issal is based on authoriNed causes under 7rticles 2;4 and 2;=, the e)plo*er )ust ive the e)plo*ee and the Depart)ent of Labor and /)plo*)ent written notices 4& da*s prior to the effectivit* of his separation. !nder the twin notice re-uire)ent, the e)plo*ees )ust be iven two (2) notices before their e)plo*)ent could be ter)inated. (') a first notice to apprise the e)plo*ees of their fault, and (2) a second notice to co))unicate to the e)plo*ees that their e)plo*)ent is bein ter)inated. 3n between the first and second notice, the e)plo*ees should be iven a hearin or opportunit* to defend the)selves personall* or b* counsel of their choice.<< 7 careful e@a)ination of the records revealed that, indeed, 076Ms )anner of dis)issin Hran fell short of the two notice re-uire)ent. :hile it furnished Hran the written notice infor)in hi) of his dis)issal, it failed to furnish Hran the written notice apprisin hi) of the char es a ainst hi), as prescribed b* the Labor Code.<9 Conse-uentl*, he was denied the opportunit* to respond to said notice. 3n addition, 076 did not schedule a hearin or conference with Hran to defend hi)self and adduce evidence in support of his defenses. 1oreover, the 5ul* %, '%%= ter)ination letter was effective on the sa)e da*. This shows that 076 had alread* conde)ned Hran to dis)issal, even before Hran was furnished the ter)ination letter. 3t should also be pointed out that 076 failed to ive Hran the chance to be heard and to defend hi)self with the assistance of a representative in accordance with 7rticle 2$$ of the Labor Code. Clearl*, there was no intention to provide Hran with due process. "u))in up, Hran was notified and his e)plo*)ent arbitraril* ter)inated on the sa)e da*, throu h the sa)e letter, and for unFustified rounds. 0bviousl*, Gr%& 2%6 &o0 %55or'e' '-e 7roce66. 8ursuant to the doctrine laid down in $:abon,<$ an e)plo*er is liable to pa* no)inal da)a es as inde)nit* for violatin the e)plo*eeMs ri ht to statutor* due process. "ince 076 was in breach of the due process re-uire)ents under the Labor Code and its re ulations, 076, /"3, and /D3, Fointl* and solidaril*, are liable to Hran in the a)ount of 8h8 4&,&&&.&& as inde)nit*. F3504 %&' L%60 I66-e/ Gr%& 36 E&0308e' 0o %c:2%<e6 :e reiterate the rule that with re ard to e)plo*ees hired for a fi@ed period of e)plo*)ent, in cases arisin before the effectivit* of R.7. No. ;&=2<; (1i rant :orkers and 0verseas ,ilipinos 7ct) on 7u ust 2<, '%%<, that when the contract is for a fi@ed ter) and the e)plo*ees are dis)issed without Fust cause, the* are entitled to the pa*)ent of their salaries correspondin to the une@pired portion of their contract. <% 0n the other hand, for cases arisin after the effectivit* of R.7. No. ;&=2, when the ter)ination of e)plo*)ent is without Fust, valid or authoriNed cause as defined b* law or contract, the worker shall be entitled to the full rei)burse)ent of his place)ent fee with interest of twelve percent ('2() per annu), plus his salaries for the

une@pired portion of his e)plo*)ent contract or for three (4) )onths for ever* *ear of the une@pired ter) whichever is less.9& 3n the present case, the e)plo*)ent contract provides that the e)plo*)ent contract shall be valid for a period of two (2) *ears fro) the date the e)plo*ee starts to work with the e)plo*er.9' Hran arrived in Ri*adh, "audi 7rabia and started to work on ,ebruar* $, '%%=G92 hence, his e)plo*)ent contract is until ,ebruar* $, '%%9. "ince he was ille all* dis)issed on 5ul* %, '%%=, before the effectivit* of R.7. No. ;&=2, he is therefore entitled to backwa es correspondin to the une@pired portion of his contract, which was e-uivalent to !"D '9,'<&. 8etitioner /D3 -uestions the le alit* of the award of backwa es and )ainl* relies on the Declaration which is clai)ed to have been freel* and voluntaril* e@ecuted b* Hran. The relevant portions of the Declaration are as follows. 3, /L/7P7R HR7N (C018!T/R "8/C37L3"T) 7,T/R R/C/3L3NH 1E ,3N7L "/TTL/1/NT 0N T23" D7T/ T2/ 710!NT 0,. ".R. 2,%=;.&& ("7!D3 R3E7L" T:0 T20!"7ND N3N/ 2!NDR/D ,0RTE /3H2T 0NLE) R/8R/"/NT3NH C018L/T/ 87E1/NT (C018/N"7T30N) ,0R T2/ "/RL3C/" 3 R/ND/R/D T0 076 /"T76L3"21/NT. 3 2/R/6E D/CL7R/ T27T 076 /"T. 27" N0 ,3N7NC37L 06L3H7T30N 3N 1E ,7L0!R 7,T/R R/C/3L3NH T2/ 760L/ 1/NT30N/D 710!NT 3N C7"2. 3 "T7T/ ,!RT2/R T27T 076 /"T. 27" N0 06L3H7T30N T0:7RD" 1/ 3N :27T/L/R ,0R1. 3 7TT/"T T0 T2/ TR!T2,!LN/"" 0, T23" "T7T/1/NT 6E 7,,3O3NH 1E "3HN7T!R/ L0L!NT7R3LE. "3HN/D. /L/7P7R HR7N Courts )ust undertake a )eticulous and ri orous review of -uitclai)s or waivers, )ore particularl* those e@ecuted b* e)plo*ees. This re-uire)ent was clearl* articulated b* Chief 5ustice 7rte)io L. 8an aniban in 'an+ an+ Gousin: 4evelo# ent "or#oration v. 2s5uillo. Tuitclai)s, releases and other waivers of benefits ranted b* laws or contracts in favor of workers should be strictl* scrutiniNed to protect the weak and the disadvanta ed . T4e 2%39er6 64o-8' be c%re5-88. eB%m3&e', 3& re<%r' &o0 o&8. 0o 04e 2or'6 %&' 0erm6 -6e', b-0 %86o 04e 5%c0-%8 c3rc-m60%&ce6 -&'er 243c4 04e. 4%9e bee& eBec-0e'.94 (/)phasis supplied.) This Court had also outlined in 'an+ an+ Gousin: 4evelo# ent "or#oration, citin 9eri5uet v. >'-",9= the para)eters for valid co)pro)ise a ree)ents, waivers, and -uitclai)s. Not all waivers and -uitclai)s are invalid as a ainst public polic*. 3f the a ree)ent was voluntaril* entered into and represents a reasonable settle)ent, it is bindin on the parties and )a* not later be disowned si)pl* because of a chan e of )ind. 3t is onl* where there is clear proof that the waiver was wan led fro) an unsuspectin or ullible person, or the ter)s of settle)ent are unconscionable on its face, that the law will step in to annul the -uestionable transaction. 6ut where it is shown that the 7er6o& m%:3&< 04e 2%39er '3' 6o 9o8-&0%r38., 2304 5-88 -&'er60%&'3&< o5 24%0 4e 2%6 'o3&<, %&' 04e co&63'er%03o& 5or 04e ?-30c8%3m 36 cre'3b8e %&' re%6o&%b8e, the transaction )ust be reco niNed as a valid and bindin undertakin . (/)phasis supplied.) 3s the waiver and -uitclai) labeled a Declaration validU 3t is not. The Court finds the waiver and -uitclai) null and void for the followin reasons. '. The salar* paid to Hran upon his ter)ination, in the a)ount of "R 2,%=;.&&, is unreasonabl* low. 7s correctl* pointed out b* the court a 5uo, the pa*)ent of "R 2,%=;.&& is even lower than his )onthl* salar* of "R 4,'%&.&& (!"D ;<&.&&). 3n addition, it is also ver* )uch less than the !"D '9,'<&.&& which is the a)ount Hran is le all* entitled to et fro) petitioner /D3 as backwa es. 2. The Declaration reveals that the pa*)ent of "R 2,%=;.&& is actuall* the pa*)ent for HranMs salar* for the services he rendered to 076 as Co)puter "pecialist. 3f the Declaration is a -uitclai), then the consideration should be )uch )uch )ore than the )onthl* salar* of "R 4,'%&.&& (!"D ;<&.&&)Ialthou h possibl* less than the esti)ated HranMs salaries for the re)ainin duration of his contract and other benefits as e)plo*ee of 076. 7 -uitclai) will understandabl* be lower than the su) total of the a)ounts and benefits that can possibl* be awarded to e)plo*ees or to be earned for the re)ainder of the contract period since it is a CONFLICT OF LAWS CASES | 14

co)pro)ise where the e)plo*ees will have to forfeit a certain portion of the a)ounts the* are clai)in in e@chan e for the earl* pa*)ent of a co)pro)ise a)ount. The court )a* however step in when such a)ount is unconscionabl* low or unreasonable althou h the e)plo*ee voluntaril* a reed to it. 3n the case of the Declaration, the a)ount is unreasonabl* s)all co)pared to the future wa es of Hran. 4. The factual circu)stances surroundin the e@ecution of the Declaration would show that Hran did not voluntaril* and freel* e@ecute the docu)ent. Consider the followin chronolo * of events. a. 0n 5ul* %, '%%=, Hran received a cop* of his letter of ter)inationG b. 0n 5ul* '&, '%%=, Hran was instructed to depart "audi 7rabia and re-uired to pa* his plane ticketG9< c. 0n 5ul* '', '%%=, he si ned the DeclarationG d. 0n 5ul* '2, '%%=, Hran departed fro) Ri*adh, "audi 7rabiaG and e. 0n 5ul* 2', '%%=, Hran filed the Co)plaint before the NLRC. The fore oin events readil* reveal that Hran was VforcedW to si n the Declaration and constrained to receive the a)ount of "R 2,%=;.&& even if it was a ainst his willIsince he was told on 5ul* '&, '%%= to leave Ri*adh on 5ul* '2, '%%=. 2e had no other choice but to si n the Declaration as he needed the a)ount of "R 2,%=;.&& for the pa*)ent of his ticket. 2e could have entertained so)e apprehensions as to the status of his sta* or safet* in "audi 7rabia if he would not si n the -uitclai). =. The court a 5uo is correct in its findin that the Declaration is a contract of adhesion which should be construed a ainst the e)plo*er, 076. 7n adhesion contract is contrar* to public polic* as it leaves the weaker part*Ithe e)plo*eeIin a Vtake>it>or>leave>itW situation. Certainl*, the e)plo*er is bein unFust to the e)plo*ee as there is no )eanin ful choice on the part of the e)plo*ee while the ter)s are unreasonabl* favorable to the e)plo*er.99 Thus, the Declaration purportin to be a -uitclai) and waiver is unenforceable under 8hilippine laws in the absence of proof of the applicable law of "audi 7rabia. 3n order to prevent disputes on the validit* and enforceabilit* of -uitclai)s and waivers of e)plo*ees under 8hilippine laws, said a ree)ents should contain the followin . '. 7 fi@ed a)ount as full and final co)pro)ise settle)entG 2. The benefits of the e)plo*ees if possible with the correspondin a)ounts, which the e)plo*ees are ivin up in consideration of the fi@ed co)pro)ise a)ountG 4. 7 state)ent that the e)plo*er has clearl* e@plained to the e)plo*ee in /n lish, ,ilipino, or in the dialect known to the e)plo*eesIthat b* si nin the waiver or -uitclai), the* are forfeitin or relin-uishin their ri ht to receive the benefits which are due the) under the lawG and =. 7 state)ent that the e)plo*ees si ned and e@ecuted the docu)ent voluntaril*, and had full* understood the contents of the docu)ent and that their consent was freel* iven without an* threat, violence, duress, inti)idation, or undue influence e@erted on their person. 3t is advisable that the stipulations be )ade in /n lish and Ta alo or in the '3%8ec0 :&o2& 0o 04e em78o.ee. There should be two (2) witnesses to the e@ecution of the -uitclai) who )ust also si n the -uitclai). The docu)ent should be subscribed and sworn to under oath preferabl* before an* ad)inisterin official of the Depart)ent of Labor and /)plo*)ent or its re ional office, the 6ureau of Labor Relations, the NLRC or a labor attachX in a forei n countr*. "uch official shall assist the parties re ardin the e@ecution of the -uitclai) and waiver. 9$ This co)pro)ise settle)ent beco)es final and bindin under 7rticle 22$ of the Labor Code which provides that. B7Cn* co)pro)ise settle)ent voluntaril* a reed upon with the assistance of the 6ureau of Labor Relations or the re ional office of the D0L/, shall be final and bindin upon the parties and the NLRC or an* court Vshall not assu)e Furisdiction over issues involved therein e@cept in case of non>co)pliance thereof or if there is #ri a (acie evidence that the settle)ent was obtained throu h fraud, )isrepresentation, or coercion. 3t is )ade clear that the fore oin rules on -uitclai) or waiver shall appl* onl* to labor contracts of 0,:s in the absence of proof of the laws of the forei n countr* a reed upon to overn said contracts. 0therwise, the forei n laws shall appl*. W#EREFORE, the petition is DENIED. The 0ctober ';, 2&&& Decision in C7>H.R. "8 No. <9'2& of the Court of 7ppeals affir)in the 5anuar* '<, '%%% Decision and "epte)ber 4&, '%%% Resolution of the NLRC

is AFFIRMED with the MODIFICATION that petitioner /D3>"taffbuilders 3nternational, 3nc. shall pa* the a)ount of 8h8 4&,&&&.&& to respondent Hran as no)inal da)a es for non>co)pliance with statutor* due process. No costs. !O ORDERED. %37 S"-$ ./9 8 "on(lict o( 'aws 8 9rivate 1nternational 'aw 8 9roo( o( 3orei:n 'aw 3n '%%4, /D3>"taffbuilders, 3nc. (/D3), upon re-uest of 0)ar 7h)ed 7li 6in 6echr /st. (076), a co)pan* in "audi 7rabia, sent to 076 resu)es fro) which 076 can choose a co)puter specialist. /leaNar Hran was selected. 3t was a reed that his )onthl* salar* shall be #;<&.&&. 6ut five )onths into his service in "audi 7rabia, Hran received a ter)ination letter and ri ht there and then was re)oved fro) his post. The ter)ination letter states that he was inco)petent because he does not know the 7C7D s*ste) which is re-uired in his line of workG that he failed to enrich his knowled e durin his < )onth sta* to prove his co)petenceG that he is disobedient because he failed to sub)it the re-uired dail* reports to 076. Hran then si ned a -uitclai) whereb* he declared that he is releasin 076 fro) an* liabilit* in e@chan e of 2,%=;.&& Ri*al. :hen Hran returned, he filed a labor case for ille al dis)issal a ainst /D3 and 076. /D3 in its defense averred that the dis)issal is valid because when Hran and 076 si ned the e)plo*)ent contract, both parties a reed that "audi labor laws shall overn all )atters relatin to the ter)ination of HranMs e)plo*)entG that under "audi labor laws, HranMs ter)ination due to inco)petence and insubordination is validG that HranMs insubordination and inco)petence is outlined in the ter)ination letter Hran received. The labor arbiter dis)issed the labor case but on appeal, the National Labor Relations Co))ission (NLRC) reversed the decision of the arbiter. The Court of 7ppeals likewise affir)ed the NLRC. I!!(E/ :hether or not the "audi labor laws should be applied. #ELD/ No. The specific "audi labor laws were not proven in court. /D3 did not present proof as to the e@istence and the specific provisions of such forei n law. 2ence, processual presu)ption applies and 8hilippine labor laws shall be used. !nder our laws, an e)plo*ee like Hran shall onl* be ter)inated upon Fust cause. The alle ations a ainst hi), at worst, shall onl* )erit a suspension not a dis)issal. 2is inco)petence is not proven because prior to bein sent to "audi 7rabia, he underwent the re-uired trade test to prove his co)petence. The presu)ption therefore is that he is co)petent and that it is upon 076 and /D3 to prove otherwise. No proof of his inco)petence was ever adduced in court. 2is alle ed insubordination is likewise not proven. 3t was not proven that the sub)ission of dail* track records is part of his Fob as a co)puter specialist. There was also a lack of due process. !nder our laws, Hran is entitled to the two notice rule whereb* prior to ter)ination he should receive two notices. 3n the case at bar, he onl* received one and he was i))ediatel* ter)inated on the sa)e da* he received the notice. Lastl*, the -uitclai) )a* not also release 076 fro) liabilit*. 8hilippine laws is a ain applied here sans proof of "audi laws. !nder 8hilippine Laws, a -uitclai) is enerall* frowned upon and are strictl* e@a)ined. 3n this case, based on the circu)stances, Hran at that ti)e has no option but to si n the -uitclai). The -uitclai) is also void because his separation pa* was )erel* 2,%=; Ri*al which is lower than the #;<&.&& )onthl* salar* (4,'%& Ri*al).

CONFLICT OF LAWS CASES

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HG.R. No. 13C3C8. Oc0ober 12, 2000I P#ILIPPINE 7L!13N!1 :2//L", INC., petitioner, vs. FA!GI ENTERPRI!E!, INC., respondent. DECI!ION VIT(G, J./ 0n &' 5une '%$;, ,7"H3 /nterprises 3ncorporated (D,7"H3D), a corporation or aniNed and e@istin under and b* virtue of the laws of the "tate of California, !nited "tates of 7)erica, entered into a distributorship arran e)ent with 8hilippine 7lu)inu) :heels, 3ncorporated (D87:3D), a 8hilippine corporation, and ,ratelli 8edrini "areNNo ".8.7. (D,8"D), an 3talian corporation.The a ree)ent provided for the purchase, i)portation and distributorship in the !nited "tates of alu)inu) wheels )anufactured b* 87:3. 8ursuant to the contract, 87:3 shipped to ,7"H3 a total of ei ht thousand five hundred ninet* four (;,<%=) wheels, with an ,06 value of !"#2'9,===.4& at the ti)e of ship)ent, the first batch arrivin in two containers and the second in three containers. Thereabouts, ,7"H3 paid 87:3 the ,06 value of the wheels. !nfortunatel*, ,7"H3 later found the ship)ent to be defective and in non> co)pliance with stated re-uire)ents, viNG D7. contrar* to the ter)s of the Distributorship 7 ree)ent and in violation of !.". law, the countr* of ori in (the 8hilippines) was not sta)ped on the wheelsG D6. the wheels did not have wei ht load li)its sta)ped on the) as re-uired to avoid )ountin on e@cessivel* heav* vehicles, resultin in risk of da)a e or bodil* inFur* to consu)ers arisin fro) possible shatterin of the wheelsG DC. )an* of the wheels did not have an indication as to which )odels of auto)obile the* would fitG DD. )an* of the wheels did not fit the )odel auto)obiles for which the* were purportedl* desi nedG D/. so)e of the wheels did not fit an* )odel auto)obile in use in the !nited "tatesG D,. )ost of the bo@es in which the wheels were packed indicated that the wheels were approved b* the "pecialt* /-uip)ent 1anufacturer+s 7ssociation (hereafter, R"/17+)G in fact no "/17 approval has been obtained and this indication was therefore false and could result in fraud upon retail custo)ers purchasin the wheels.DB'C 0n 2' "epte)ber '%$%, ,7"H3 instituted an action a ainst 87:3 and ,8" for breach of contract and recover* of da)a es in the a)ount of !"#2,4'9,<%'.&& before the !nited "tates District Court for the Central District of California. 3n 5anuar* '%;&, durin the pendenc* of the case, the parties entered into a settle)ent, entitled DTransactionD with the correspondin 3talian translation DConvenNione Transsativa,D where it was stipulated that ,8" and 87:3 would accept the return of not less than ;,'&& wheels after restorin to ,7"H3 the purchase price of !"#29;,$<&.&& viafour (=) irrevocable letters of credit (DLCD). The rescission of the contract of distributorship was to be effected within the period startin 5anuar* up until 7pril '%;&.B2C 3n a tele@ )essa e, dated &2 1arch '%;&, 87:3 president Ro)eo RoFas e@pressed the co)pan*+s inabilit* to co)pl* with the fore oin a ree)ent and proposed a revised schedule of pa*)ent. The )essa e, in part, read. D:e are )ost an@ious in fulfillin all our obli ations under co)pro)ise a ree)ent e@ecuted b* our 1r. Hiancarlo Dallera and *our Lan Curen. :e have tried our best to co)pl* with our co))it)ents, however, because of the situation as )entioned in the fore oin and currenc* re ulations and restrictions i)posed b* our overn)ent on the outflow, of forei n currenc* fro) our countr*, we are constrained to re-uest for a revised schedule of ship)ent and openin of L?Cs.

D7fter consultin with our bank and overn)ent )onetar* a encies and on the assu)ption that we sub)it the re-uired pro>for)a invoices we can open the letters of credit in *our favor under the followin schedule. D7) ,irst L?C > it will be issued in 7pril '%;& pa*able %& da*s thereafter D6) "econd L?C > it will be issued in 5une '%;& pa*able %& da*s thereafter DC) Third L?C > it will be issued in 7u ust '%;& pa*able %& da*s thereafter DD) ,ourth L?C > it will be issued in Nove)ber '%;& pa*able %& da*s thereafter D:e understand *our situation re ardin the lease of *our warehouse. ,or this reason, we are willin to defra* the e@tra stora e char es resultin fro) this new schedule. 3f *ou cannot renew the lease BofC *our present warehouse, perhaps *ou can arran e to transfer to another warehouse and stora e char es transfer thereon will be for our account. :e hope *ou understand our position. The dela* and the revised schedules were caused b* circu)stances totall* be*ond our control.DB4C 0n 2' 7pril '%;&, a ain throu h a tele@ )essa e, 87:3 infor)ed ,7"H3 that it was i)possible to open a letter of credit on or before 7pril '%;& but assured that it would do its best to co)pl* with the su ested schedule of pa*)ents.B=C 3n its tele@ repl* of 2% 7pril '%;&, ,7"H3 insisted that 87:3 should )eet the ter)s of the proposed schedule of pa*)ents, specificall* its undertakin to open the first LC within 7pril of '%;&, and that D3f the letter of credit is not opened b* 7pril 4&, '%;&, then @ @ @ Bit wouldC i))ediatel* take all necessar* le al action to protect BitsC position.DB<C Despite its assurances, and ,7"H3+s insistence, 87:3 failed to open the first LC in 7pril '%;& alle edl* due to Central 6ank Din-uiries and restrictions,D pro)ptin ,7"H3 to pursue its co)plaint for da)a es a ainst 87:3 before the California district court. 8re>trial conference was held on 2= Nove)ber '%;&. 3n the interi), the parties, realiNin the protracted process of liti ation, resolved to enter into another arran e)ent, this ti)e entitled D"upple)ental "ettle)ent 7 ree)ent,D on 29 Nove)ber '%;&. 3n substance, the covenant provided that ,7"H3 would deliver to 87:3 a container of wheels for ever* LC opened and paid b* 87:3. D4. 7 ree)ent D4.' "ellers a ree to pa* ,7"H3 Two 2undred "i@t*>/i ht Thousand, "even 2undred ,ift* and &&?'&& Dollars (#29;,$<&.&&), plus interest and stora e costs as described below. "ellers shall pa* such a)ount b* deliverin to ,7"H3 the followin four (=) irrevocable letters of credit, confir)ed b* Crocker 6ank, 1ain 6ranch, ,resno, California, as set forth below. D(i) on or before 5une 4&, '%;&, a docu)entar* letter of credit in the a)ount of (a) "i@t*>,ive Thousand, Three 2undred "i@t*>nine and &&?'&& Dollars (#9<,49%.&&), (b) plus interest on that a)ount at the annual rate of '9.2<( fro) 5anuar* ', '%;& until 5ul* 4', '%;&, (c) plus Two Thousand Nine 2undred ,ort* Dollars and &&?'&& (#2,%=&.&&) and (d) with interest on that su) at the annual rate of '9.2<( fro) 1a* ', '%;& to 5ul* 4', '%;&, pa*able on or after 7u ust 4', '%;&G D(ii) on or before "epte)ber ', '%;&, a docu)entar* letter of credit in the a)ount of (a) "i@t*>"even Thousand, "even 2undred Ninet*>Three Dollars and "i@t*>"even Cents (#9$,$%4.9$) plus (b) Two Thousand, Nine 2undred ,ort* and &&?'&& Dollars (#2,%=&.&&), plus (c) interest at an annual rate e-ual to the pri)e rate of Crocker 6ank, "an ,rancisco, in effect fro) ti)e to ti)e, plus two percent on the a)ount in (a) fro) 5anuar* ', '%;& until Dece)ber 2', '%;&, and on the a)ount set forth in (b) fro) 1a* ', '%;& until Dece)ber 2', '%;&, pa*able ninet* da*s after the date of the bill of ladin under the letter of creditG D(iii) on or before Nove)ber ', '%;&, a docu)entar* letter of credit in the a)ount of (a) "i@t*>"even Thousand, "even 2undred Ninet*>Three Dollars and "i@t*>"even Cents (#9$,$%4.9$) plus (b) Two Thousand, Nine 2undred ,ort* and &&?'&& Dollars (#2,=%&.&&), plus (c) interest at an annual rate e-ual to the pri)e rate of Crocker
CONFLICT OF LAWS CASES | 16

6ank, "an ,rancisco, in effect fro) ti)e to ti)e, plus two percent on the a)ount in (a) fro) 5anuar* ', '%;& until ,ebruar* 2', '%;', and on the a)ount set forth in (b) fro) 1a* ', '%;& until ,ebruar* 2', '%;', pa*able ninet* da*s after the date of the bill of ladin under the latter of creditG D(iv) on or before 5anuar* ', '%;', a docu)entar* letter of credit in the a)ount of (a) "i@t*>"even Thousand, "even 2undred Ninet*>Three Dollars and "i@t*>"even Cents (#9$,$%4.9$) plus (b) ,ive Thousand, /i ht 2undred /i ht* and &&?'&& Dollars (#<,;;&.&&), plus (c) interest at an annual rate e-ual to the pri)e rate of Crocker 6ank, "an ,rancisco, in effect fro) ti)e to ti)e, plus two percent on the a)ount in (a) fro) 5anuar* ', '%;& until 7pril 2', '%;', and on the a)ount set forth in (b) fro) 1a* ', '%;& until 7pril 2', '%;', pa*able ninet* da*s after the date of the bill of ladin under the latter of credit.DB9C 7nent the wheels still in the custod* of ,7"H3, the supple)ental settle)ent a ree)ent provided that > D4.= (a) !pon e@ecution of this "upple)ental "ettle)ent 7 ree)ent, the obli ations of ,7"H3 to store or )aintain the Containers and :heels shall be li)ited to (i) storin the :heels and Containers in their present warehouse location and (ii) )aintainin in effect ,7"H3+s current insurance in favor of ,7"H3, insurin a ainst usual co))ercial risks for such stora e in the principal a)ount of the Letters of Credit described in 8ara raph 4.'. ,7"H3 shall bear no liabilit*, responsibilit* or risk for uninsurable risks or casualties to the Containers or :heels. D@ @ @ @ @ @ @ @ @ D(e) ,ro) and after ,ebruar* 2;, '%;', unless deliver* of the Letters of Credit are dela*ed past such date pursuant to the penulti)ate 8ara raph 4.', in which case fro) and after such later date, ,7"H3 shall have no obli ation to )aintain, store or deliver an* of the Containers or :heels.DB$C The deal allowed ,7"H3 to enter before the California court the fore oin stipulations in the event of the failure of 87:3 to )ake ood the scheduled pa*)entsG thus > D4.< Concurrentl* with e@ecution and deliver* hereof, the parties have e@ecuted and delivered a 1utual Release (the R1utual Release+), and a "tipulation for 5ud )ent (the R"tipulation for 5ud )ent+) with respect to the 7ction. 3n the event of breach of this "upple)ental "ettle)ent 7 ree)ent b* "ellers, ,7"H3 shall have the ri ht to appl* i))ediatel* to the Court for entr* of 5ud )ent pursuant to the "tipulation for 5ud )ent in the full a)ount thereof, less credit for an* pa*)ents )ade b* "ellers pursuant to this "upple)ental "ettle)ent 7 ree)ent. ,7"H3 shall have the ri ht thereafter to enforce the 5ud )ent a ainst 87:3 and ,8" in the !nited "tates and in an* other countr* where assets of ,8" or 87:3 )a* be located, and ,8" and 87:3 hereb* waive all defenses in an* such countr* to e@ecution or enforce)ent of the 5ud )ent b* ,7"H3. "pecificall*, ,8" and 87:3 each consent to the Furisdiction of the 3talian and 8hilippine courts in an* action brou ht b* ,7"H3 to seek a Fud )ent in those countries based upon a Fud )ent a ainst ,8" or 87:3 in the 7ction.DB;C 3n accordance with the afore)entioned para raph 4.< of the a ree)ent, the parties )ade the followin stipulation before the California court. DThe undersi ned parties hereto, havin entered into a "upple)ental "ettle)ent 7 ree)ent in this action, D3T 3" 2/R/6E "T38!L7T/D b* and between plaintiff ,7"H3 /nterprises, 3nc. (R,7"H3+) and defendants 8hilippine 7lu)inu) :heels, 3nc., (R87:3+), and each of the), that Fud )ent )a* be entered in favor of plaintiff ,7"H3 and a ainst 87:3, in the a)ount of Two 2undred /i ht* Three Thousand ,our 2undred /i ht* 7nd &'?'&&ths Dollars (#2;4,=;&.&'). D8laintiff ,7"H3 shall also be entitled to its costs of suit, and to reasonable attorne*s+ fees as deter)ined b* the Court added to the above Fud )ent a)ount.DB%C

The fore oin supple)ental settle)ent a ree)ent, as well as the )otion for the entr* of Fud )ent, was e@ecuted b* ,7"H3 president /lena 6uholNer and 87:3 counsel 1r. Tho)as Read*. 87:3, a ain, proved to be re)iss in its obli ation under the supple)ental settle)ent a ree)ent. :hile it opened the first LC on '% 5une '%;&, it, however, onl* paid on it nine (%) )onths after, or on 2& 1arch '%;', when the letters of credit b* then were supposed to have all been alread* posted. This lapse, notwithstandin , ,7"H3 pro)ptl* shipped to 87:3 the first container of wheels. 7 ain, despite the dela* incurred b* 87:3 on the second LC, ,7"H3 readil* delivered the second container. Later, 87:3 totall* defaulted in openin and pa*in the third and the fourth LCs, scheduled to be opened on or before, respectivel*, &' "epte)ber '%;& and &' Nove)ber '%;&, and each to be paid ninet* (%&) da*s after the date of the bill of ladin under the LC. 7s so e@pressed in their affidavits, ,7"H3 counsel ,rank Jer and ,7"H3 president /lena 6uholNer were )ore inclined to believe that 87:3+s failure to pa* was due not to an* restriction b* the Central 6ank or an* other cause than its inabilit* to pa*. These doubts were based on the tele@ )essa e of 87:3 president Ro)eo RoFas who attached a cop* of a co))unication fro) the Central 6ank notif*in 87:3 of the bank+s approval of 87:3+s re-uest to open LCs to cover pa*)ent for the re>i)portation of the wheels. The co))unication havin been sent to ,7"H3 before the supple)ental settle)ent a ree)ent was e@ecuted, ,7"H3 speculated that at the ti)e 87:3 subse-uentl* entered into the supple)ental settle)ent a ree)ent, its re-uest to open LCs had alread* been approved b* the Central 6ank. 3rked b* 87:3+s persistent default, ,7"H3 filed with the !" District Court of the Central District of California the followin stipulation for Fud )ent a ainst 87:3. D8L/7"/ T7J/ N0T3C/ that on 1a* '$, '%;2 at '&.&& 7.1. in the Courtroo) of the 2onorable Lau hlin /. :aters of the above Court, plaintiff ,7"H3 /NT/R8R3"/", 3NC. (hereinafter R,7"H3+) will )ove the Court for entr* of 5ud )ent a ainst defendant 823L3883N/ 7L!13N!1 :2//L", 3NC. (hereinafter R87:3+), pursuant to the "tipulation for 5ud )ent filed concurrentl* herewith, e@ecuted on behalf of ,7"H3 and 87:3 b* their respective attorne*s, actin as their authoriNed a ents. D5ud )ent will be sou ht in the total a)ount of 82<2,;<&.9&, includin principal and interest accrued throu h 1a* '$, '%;2, plus the su) of #'$,<&&.&& as reasonable attorne*s+ fees for plaintiff in prosecutin this action. DThe 1otion will be )ade under Rule <= of the ,ederal Rules of Civil 8rocedure, pursuant to and based upon the "tipulation for 5ud )ent, the "upple)ental "ettle)ent 7 ree)ent filed herein on or about Nove)ber 2', '%;&, the 1e)orandu) of 8oints and 7uthorities and 7ffidavits of /lena 6uholNer, ,ranck H. Jer and "tan Cornwell all filed herewith, and upon all the records, files and pleadin s in this action. DThe 1otion is )ade on the rounds that defendant 87:3 has breached its obli ations as set forth in the "upple)ental "ettle)ent 7 ree)ent, and that the "upple)ental "ettle)ent 7 ree)ent e@pressl* per)its ,7"H3 to enter the "tipulation for 5ud )ent in the event that 87:3 has not perfor)ed under the "upple)ental "ettle)ent 7 ree)ent.DB'&C 0n 2= 7u ust '%;2, ,7"H3 filed a notice of entr* of Fud )ent. 7 certificate of finalit* of Fud )ent was issued, on &$ "epte)ber '%;2, b* the !" District 5ud e of the District Court for the Central District of California. 87:3, b* this ti)e, was appro@i)atel* twent* (2&) )onths in arrears in its obli ation under the supple)ental settle)ent a ree)ent. !nable to obtain satisfaction of the final Fud )ent within the !nited "tates, ,7"H3 filed a co)plaint for Denforce)ent of forei n Fud )entD in ,ebruar* '%;4, before the Re ional Trial Court, 6ranch 9', of 1akati, 8hilippines. The 1akati court,
CONFLICT OF LAWS CASES | 17

however, in an order of '' "epte)ber '%%&, dis)issed the case, thereb* den*in the enforce)ent of the forei n Fud )ent within 8hilippine Furisdiction, on the round that the decree was tainted with collusion, fraud, and clear )istake of law and fact. B''C The lower court ruled that the forei n Fud )ent i nored the reciprocal obli ations of the parties. :hile the assailed forei n Fud )ent ordered the return b* 87:3 of the purchase a)ount, no si)ilar order was )ade re-uirin ,7"H3 to return to 87:3 the third and fourth containers of wheels.B'2C This situation, the trial court )aintained, a)ounted to an unFust enrich)ent on the part of ,7"H3. ,urther)ore, the trial court said, the supple)ental settle)ent a ree)ent and the subse-uent )otion for entr* of Fud )ent upon which the California court had based its Fud )ent were a nullit* for havin been entered into b* 1r. Tho)as Read*, counsel for 87:3, without the latter+s authoriNation. ,7"H3 appealed the decision of the trial court to the Court of 7ppeals. 3n a decision,B'4C dated 4& 5ul* '%%$, the appellate court reversed the decision of the trial court and ordered the full enforce)ent of the California Fud )ent. 2ence this appeal. Henerall*, in the absence of a special co)pact, no soverei n is bound to ive effect within its do)inion to a Fud )ent rendered b* a tribunal of another countr*G B'=C however, the rules of co)it*, utilit* and convenience of nations have established a usa e a)on civiliNed states b* which final Fud )ents of forei n courts of co)petent Furisdiction are reciprocall* respected and rendered efficacious under certain conditions that )a* var* in different countries.B'<C 3n this Furisdiction, a valid Fud )ent rendered b* a forei n tribunal )a* be reco niNed insofar as the i))ediate parties and the underl*in cause of action are concerned so lon as it is convincin l* shown that there has been an opportunit* for a full and fair hearin before a court of co)petent FurisdictionG that trial upon re ular proceedin s has been conducted, followin due citation or voluntar* appearance of the defendant and under a s*ste) of Furisprudence likel* to secure an i)partial ad)inistration of FusticeG and that there is nothin to indicate either a preFudice in court and in the s*ste) of laws under which it is sittin or fraud in procurin the Fud )ent.B'9C 7 forei n Fud )ent is presu)ed to be valid and bindin in the countr* fro) which it co)es, until a contrar* showin , on the basis of a presu)ption of re ularit* of proceedin s and the ivin of due notice in the forei n foru). Rule 4%, section =; of the Rules of Court of the 8hilippines provides. !ec. )8. 2((ect o( (orei:n ju+: ents or (inal or+ers > The effect of a Fud )ent or final order of a tribunal of a forei n countr*, havin Furisdiction to render the Fud )ent or final order is as follows. @@@@ (b) 3n case of a Fud )ent or final order a ainst a person, the Fud )ent or final order is presu)ptive evidence of a ri ht as between the parties and their successors>in> interest b* a subse-uent title. 3n either case, the Fud )ent or final order )a* be repelled b* evidence a want of Furisdiction, want of notice to the part*, collusion, fraud, or clear )istake of law or fact. 3n "ooraF)ull Na ar)ull vs. 6inalba an>3sabela "u ar Co. 3nc., B'$C one of the earl* 8hilippine cases on the enforce)ent of forei n Fud )ents, this Court has ruled that a Fud )ent for a su) of )one* rendered in a forei n court is presu)ptive evidence of a ri ht between the parties and their successors>in>interest b* subse-uent title, but when suit for its enforce)ent is brou ht in a 8hilippine court, such Fud )ent )a* be repelled b* evidence of want of Furisdiction, want of notice to the part*, collusion, fraud or clear )istake of law or fact. 3n Northwest 0rient 7irlines, 3nc., vs. Court of 7ppeals,B';C the Court has said that a part* attackin a forei n Fud )ent is tasked with the burden of overco)in its presu)ptive validit*.

87:3 clai)s that its counsel, 1r. Read*, has acted without its authorit*. Leril*, in this Furisdiction, it is clear that an attorne* cannot, without a client+s authoriNation, settle the action or subFect )atter of the liti ation even when he honestl* believes that such a settle)ent will best serve his client+s interest.B'%C 3n the instant case, the supple)ental settle)ent a ree)ent was si ned b* the parties, includin 1r. Tho)as Read*, on &9 0ctober '%;&. The a ree)ent was lod ed in the California case on29 Nove)ber '%;& or two (2) da*s after the pre>trial conference held on 2= Nove)ber '%;&. 3f 1r. Read* was indeed not authoriNed b* 87:3 to enter into the supple)ental settle)ent a ree)ent, 87:3 could have forthwith si nified to ,7"H3 a disclai)er of the settle)ent. 3nstead, )ore than a *ear after the e@ecution of the supple)ental settle)ent a ree)ent, particularl* on &% 0ctober '%;', 87:3 8resident Ro)eo ". RoFas sent a co))unication to /lena 6uholNer of ,7"H3 that failed to )ention 1r. Read*+s supposed lack of authorit*. 0n the contrar*, the letter confir)ed the ter)s of the a ree)ent when 1r. RoFas sou ht forbearance for the i)pendin dela* in the openin of the first letter of credit under the schedule stipulated in the a ree)ent. 3t is an accepted rule that when a client, upon beco)in aware of the co)pro)ise and the Fud )ent thereon, fails to pro)ptl* repudiate the action of his attorne*, he will not afterwards be heard to co)plain about it.B2&C Nor could 87:3 clai) an* preFudice b* the settle)ent. 87:3 was spared fro) possibl* pa*in ,7"H3 substantial a)ounts of da)a es and incurrin heav* liti ation e@penses nor)all* enerated in a full>blown trial. 87:3, under the a ree)ent was afforded ti)e to rei)burse ,7"H3 the price it had paid for the defective wheels. 87:3, should not, after its opportunit* to enFo* the benefits of the a ree)ent, be allowed to later disown the arran e)ent when the ter)s thereof ulti)atel* would prove to operate a ainst its hopeful e@pectations. 87:3 assailed not onl* 1r. Read*+s authorit* to si n on its behalf the "upple)ental "ettle)ent 7 ree)ent but denounced likewise his authorit* to enter into a stipulation for Fud )ent before the California court on &9 7u ust '%;2 on the round that it had b* then alread* ter)inated the for)er+s services. ,or his part, 1r. Read* ad)itted that while he did receive a re-uest fro) 1anuel "in son of 87:3 to withdraw fro) the )otion of Fud )ent, the re-uest unfortunatel* ca)e too late. 3n an e@planator* tele@, 1r. Read* told 1r. "in son that under 7)erican 5udicial 8rocedures when a )otion for Fud )ent had alread* been filed a counsel would not be per)itted to withdraw unilaterall* without a court order. ,ro) the ti)e the stipulation for Fud )ent was entered into on 29 7pril '%;2 until the certificate of finalit* of Fud )ent was issued b* the California court on &$ "epte)ber '%;2, no notification was issued b* 87:3 to ,7"H3 re ardin its ter)ination of 1r. Read*+s services. 3f 87:3 were indeed hoodwinked b* 1r. Read* who purportedl* acted in collusion with ,7"H3, it should have aptl* raised the issue before the foru) which issued the Fud )ent in line with the principle of international co)it* that a court of another Furisdiction should refrain, as a )atter of propriet* and fairness, fro) so assu)in the power of passin Fud )ent on the correctness of the application of law and the evaluation of the facts of the Fud )ent issued b* another tribunal.B2'C ,raud, to hinder the enforce)ent within this Furisdiction of a forei n Fud )ent, )ust be e@trinsic, i.e., fraud based on facts not controverted or resolved in the case where Fud )ent is rendered,B22C or that which would o to the Furisdiction of the court or would deprive the part* a ainst who) Fud )ent is rendered a chance to defend the action to which he has a )eritorious case or defense. 3n fine, intrinsic fraud, that is, fraud which oes to the ver* e@istence of the cause of action > such as fraud in obtainin the consent to a contract > is dee)ed alread* adFud ed, and it, therefore, cannot )ilitate a ainst the reco nition or enforce)ent of the forei n Fud )ent.B24C
CONFLICT OF LAWS CASES | 18

/ven while the !" Fud )ent was a ainst both ,8" and 87:3, ,7"H3 had ever* ri ht to seek enforce)ent of the Fud )ent solel* a ainst 87:3 or, for that )atter, onl* a ainst ,8". ,7"H3, in its co)plaint, e@plained. D'$. There e@ists, and at all ti)es relevant herein there e@isted, a unit* of interest and ownership between defendant 87:3 and defendant ,8", in that the* are owned and controlled b* the sa)e shareholders and )ana ers, such that an* individualit* and separateness between these defendants has ceased, if it ever e@isted, and defendant ,8" is the alter e o of defendant 87:3. The two entities are used interchan eabl* b* their shareholders and )ana ers, and plaintiff has found it i)possible to ascertain with which entit* it is dealin at an* one ti)e. 7dherence to the fiction of separate e@istence of these defendant corporations would per)it an abuse of the corporate privile e and would pro)ote inFustice a ainst this plaintiff because assets can easil* be shifted between the two co)panies thereb* frustratin plaintiff+s atte)pts to collect on an* Fud )ent rendered b* this Court.DB2=C 8ara raph '= of the "upple)ental "ettle)ent 7 ree)ent fi@ed the liabilit* of 87:3 and ,8" to be DFoint and severalD or solidar*. The enforce)ent of the Fud )ent a ainst 87:3 alone would not, of course, preclude it fro) pursuin and recoverin whatever contributor* liabilit* ,8" )i ht have pursuant to their own a ree)ent. 87:3 would ar ue that it was incu)bent upon ,7"H3 to first return the second and the third containers of defective wheels before it could be re-uired to return to ,7"H3 the purchase price therefor,B2<C rel*in on their ori inal a ree)ent (the DTransactionD).B29C !nfortunatel*, 87:3 defaulted on its covenants thereunder that thereb* occasioned the subse-uent e@ecution of the supple)ental settle)ent a ree)ent. This ti)e the parties a reed, under para raph 4.=(e)B2$C thereof, that an* further default b* 87:3 would release ,7"H3 fro) an* obli ation to )aintain, store or deliver the reFected wheels. The supple)ental settle)ent a ree)ent evidentl* superseded, at the ver* least on this point, the previous arran e)ents )ade b* the parties. 87:3 cannot, b* this petition for review, seek refu e over a business dealin and decision one awr*. Neither do the courts function to relieve a part* fro) the effects of an unwise or unfavorable contract freel* entered into. 7s has so aptl* been e@plained b* the appellate court, the over>all picture )i ht, indeed, appear to be onerous to 87:3 but it should bear e)phasis that the settle)ent which has beco)e the basis for the forei n Fud )ent has not been the start of a business venture but the end of a failed one, and each part*, naturall*, has had to ne otiate fro) either position of stren th or weakness dependin on its own perception of who )i ht have to bear the bla)e for the failure and the conse-uence of loss.B2;C 7lto ether, the Court finds no reversible error on the part of the appellate court in its appealed Fud )ent. :2/R/,0R/, the decision of the Court of 7ppeals is 7,,3R1/D. No costs. !O ORDERED. "on(lict o( 'aws 8 9rivate 1nternational 'aw 8 3orei:n Du+: ents 8 When Ma) 1t 0e 2n(orce+ 3n '%$;, ,7"H3 /nterprises 3nc. (,7"H3), a forei n corporation or aniNed under the laws of California, !"7, entered into a contract with 8hilippine 7lu)inu) :heels, 3nc. (87:3), a 8hilippine corporation, whereb* the latter a rees to deliver ;,<%= wheels to ,7"H3. ,7"H3 received the wheels and so it paid 87:3 #2'9,===.4&. Later however, ,7"H3 found out that the wheels are defective and did not co)pl* with certain !" standards. "o in '%$%, ,7"H3 sued 87:3 in a California court. 3n '%;&, a settle)ent was reached but 87:3 failed to co)pl* with the ter)s of the a ree)ent. 7 second a ree)ent was )ade but 87:3 was a ain re)iss in its obli ation. The a ree)ent basicall* provides that 87:3 shall return the purchase price in install)ent and

conversel*, ,7"H3 shall return the wheel in install)ent. 87:3 was onl* able to )ake two install)ents (which were actuall* )ade be*ond the scheduled date). ,7"H3 also returned the correspondin nu)ber of wheels. /ventuall* in '%;2, ,7"H3 sou ht the enforce)ent of the a ree)ent and it received a favorable Fud )ent fro) the California court. 87:3 is then ordered to pa* an e-uivalent of 82<2k plus da)a es but ,7"H3 was not ordered to return the re)ainin wheels. 87:3 was not able to co)pl* with the court order in the !". "o in '%;4, ,7"H3 filed a co)plaint for the enforce)ent of a forei n Fud )ent with RTC>1akati. 2earin s were )ade and in '%%&, the trial Fud e ruled a ainst ,7"H3 on the round that the forei n Fud )ent is tainted with fraud because ,7"H3 was not ordered to return the re)ainin wheels (unFust enrich)ent) and that 87:3Ms 7)erican law*er entered into the a ree)ents without the consent of 87:3. 0n appeal, the Court of 7ppeals reversed the trial court. I!!(E/ :hether or not the forei n Fud )ent )a* be enforced here in the 8hilippines. #ELD/ Ees. The Fud )ent is valid. 7 valid Fud )ent rendered b* a forei n tribunal )a* be reco niNed insofar as the i))ediate parties and the underl*in cause of action are concerned so lon as it is convincin l* shown that there has been an opportunit* for a full and fair hearin before a court of co)petent FurisdictionG that trial upon re ular proceedin s has been conducted, followin due citation or voluntar* appearance of the defendant and under a s*ste) of Furisprudence likel* to secure an i)partial ad)inistration of FusticeG and that there is nothin to indicate either a preFudice in court and in the s*ste) of laws under which it is sittin or fraud in procurin the Fud )ent. 7 forei n Fud )ent is presu)ed to be valid and bindin in the countr* fro) which it co)es, until a contrar* showin , on the basis of a presu)ption of re ularit* of proceedin s and the ivin of due notice in the forei n foru). 3n this case, 87:3 was ver* well represented in the California court. 87:3Ms insistence that its 7)erican law*er colluded with ,7"H3G that he entered into the co)pro)ise a ree)ent without 87:3Ms authorit* is belied b* the fact that 87:3 initiall* co)plied with the a ree)ent. 3t did not disclai) the a ree)ent. 3t sent two install)ents (thou h belatedl*) but failed to co)pl* on the rest. 3t cannot now aver that the a ree)ent is without its authorit*. ,urther, it is Fust but fair for the California court not to order ,7"H3 to return the re)ainin wheels because of 87:3Ms arrears.

CONFLICT OF LAWS CASES

| 19

G.R. No. 1102+3 ,-8. 20, 2001 A!IAVE!T MERC#ANT ANJER! "M$ ER#AD, petitioner, vs. CO(RT OF APPEAL! %&' P#ILIPPINE NATIONAL CON!TR(CTION CORPORATION, respondents. DELEON, ,R., J./ 6efore us is a petition for review on certiorari of the Decision ' of the Court of 7ppeals dated 1a* '%,'%%4 in C7>H.R. CE No. 4<;$' affir)in the Decision 2 dated 0ctober '=,'%%' of the Re ional Trial Court of 8asi , 1etro 1anila, 6ranch '9; in Civil Case No. <949; which dis)issed the co)plaint of petitioner 7siavest 1erchant 6ankers (1) 6erhad for the enforce)ent of the )one* of the Fud )ent of the 2i h Court of 1ala*sia in Juala Lu)pur a ainst private respondent 8hilippine National Construction Corporation.1@w#hi1.nAt The petitioner 7siavest 1erchant 6ankers (1) 6erhad is a corporation or aniNed under the laws of 1ala*sia while private respondent 8hilippine National Construction Corporation is a corporation dul* incorporated and e@istin under 8hilippine laws. 3t appears that so)eti)e in '%;4, petitioner initiated a suit for collection a ainst private respondent, then known as Construction and Develop)ent Corporation of the 8hilippines, before the 2i h Court of 1ala*a in Juala Lu)pur entitled D7siavest 1erchant 6ankers (1) 6erhad v. 7siavest CDC8 "dn. 6hd. and Construction and Develop)ent Corporation of the 8hilippines.D4 8etitioner sou ht to recover the inde)nit* of the perfor)ance bond it had put up in favor of private respondent to uarantee the co)pletion of the ,elda 8roFect and the nonpa*)ent of the loan it e@tended to 7siavest>CDC8 "dn. 6hd. for the co)pletion of 8aloh 2anai and Juantan 6* 8assG 8roFect. 0n "epte)ber '4, '%;<, the 2i h Court of 1ala*a (Co))ercial Division) rendered Fud )ent in favor of the petitioner and a ainst the private respondent which is also desi nated therein as the D2nd Defendant. D The Fud )ent reads in full. "!3T N0. C94; of '%;4 6etween 7siavest 1erchant 6ankers (1) 6erhad 7nd '. 7siavest >CDC8 "dn. 6hd. Defendant 2. Construction Y Develop)ent Corporation of the 8hilippines 5!DH1/NT The 2nd Defendant havin entered appearance herein and the Court havin under 0rder '=, rule 4 ordered that Fud )ent as hereinafter provided be entered for the 8laintiffs a ainst the 2nd Defendant. 3T 3" T23" D7E 7D5!DH/D that the 2nd defendant do pa* the 8laintiffs the su) of #<, '&;,2%&.24 (Rin it ,ive )illion one hundred and ei ht thousand two hundred and ninet* and "en twent*>three) to ether with interest at the rate of '2( per annu) on (i) the su) of #2,<;9,;99.%' fro) the 2nd da* of 1arch '%;4 to the date of pa*)entG and (ii) the su) of #2,<2',=24.42 fro) the '' th da* of 1arch '%;4 to the date of pa*)entG and #4<&.&& (Rin it Three 2undred and ,ift*) costs. Dated the '4th da* of "epte)ber, '%;<. "enior 7ssistant Re istrar, 2i h Court, Juala Lu)pur This 5ud )ent is filed b* 1essrs. "krine Y Co., 4 rd ,loor, "traits Tradin 6uildin , No.=, Leboh 8asar, 6esar, Juala Lu)pur, "olicitors for the 8laintiffs abovena)ed. (L8?0n ?;''%=.$?;4) = 0n the sa)e da*, "epte)ber '4, '%;<, the 2i h Court of 1ala*a issued an 0rder directin the private respondent (also desi nated therein as the D2nd DefendantD) to pa* petitioner interest on the su)s covered b* the said 5ud )ent, thus. "!3T N0. C94; of '%;4 6etween 8laintiffs

7siavest 1erchant 6ankers (1) 6erhad 7nd '. 7siavest >CDC8 "dn. 6hd. 2. Construction Y Develop)ent Corporation of the 8hilippines 6/,0R/ T2/ "/N30R 7""3"T7NT R/H3"TR7R

8laintiffs Defendants

C3J "!"3L7 ". 87R71 T23" '4th D7E 0, "/8T/16/R '%;< 3N C2716/R" 0RD/R !pon the application of 7siavest 1erchant 6ankers (1) 6erhad, the 8laintiffs in this action 7ND !80N R/7D3NHthe "u))ons in Cha)bers dated the '9th da* of 7u ust, '%;= and the 7ffidavit of Lee ,oon 1ee affir)ed on the '=th da* of 7u ust '%;= both filed herein 7ND !80N 2/7R3NH 1r. T. Tho)as of Counsel for the 8laintiffs and 1r. Jhaw Cha* Tee of Counsel for the 2nd Defendant abovena)ed on the 29th da* of Dece)ber '%;= 3T :7" 0RD/R/D that the 8laintiffs be at libert* to si n final Fud )ent a ainst the 2nd Defendant for the su) of #<,'&;,2%&.24 7ND 3T :7" 0RD/R/D that the 2nd Defendant do pa* the 8laintiffs the costs of suit at #4<&.&&7ND 3T :7" ,!RT2/R 0RD/R/D that the plaintiffs be at libert* to appl* for pa*)ent of interest 7ND upon the application of the 8laintiffs for pa*)ent of interest co)in on for hearin on the 'st da* of 7u ust in the presence of 1r. 8alpanaban DevaraFoo of Counsel for the 8laintiffs and 1r. Jhaw Cha* Tee of Counsel for the 2nd Defendant above> na)ed 7ND !80N 2/7R3NH Counsel as aforesaid 6E C0N"/NT 3T :7" 0RD/R/D that the 2nd Defendant do pa* the 8laintiffs interest at a rate to be assessed 7ND the sa)e co)in on for assess)ent this da* in the presence of 1r. 8alpanaban DevaraFoo of Counsel for the 8laintiffs and 1r. Jhaw Cha* Tee of Counsel for the 2nd Defendant 7ND !80N 2/7R3NH Counsel as aforesaid 6E C0N"/NT 3T 3" 0RD/R/D that the 2nd Defendant do pa* the 8laintiffs interest at the rate of '2( per annu) on. (i) the su) of #2,<;9,;99.%' fro) the 2nd da* of 1arch '%;4 to the date of pa*)entG and (ii) the su) 0f #2,<2',=24.42 fro) the ''th da* of 1arch '%;4 to the date of 8a*)ent. Dated the '4th da* of "epte)ber,'%;<. "enior 7ssistant Re istrar, 2i h Court, Juala Lu)pur.< ,ollowin unsuccessful atte)pts9 to secure pa*)ent fro) private respondent under the Fud )ent, petitioner initiated on "epte)ber <, '%;; the co)plaint before Re ional Trial Court of 8asi , 1etro 1anila, to enforce the Fud )ent of the 2i h Court of 1ala*a.$ 8rivate respondent sou ht the dis)issal of the case via a 1otion to Dis)iss filed on 0ctober <, '%;;, contendin that the alle ed Fud )ent of the 2i h Court of 1ala*a should be denied reco nition or enforce)ent since on in face, it is tainted with want of Furisdiction, want of notice to private respondent, collusion and?or fraud, and there is a clear )istake of law or fact.; Dis)issal was, however, denied b* the trial court considerin that the rounds relied upon are not the proper rounds in a )otion to dis)iss under Rule '9 of the Revised Rules of Court. % 0n 1a* 22, '%;%, private respondent filed its 7nswer with Co)pulsor* Counter clai)+s'& and therein raised the rounds it brou ht up in its )otion to dis)iss . 3n its Repl* filed'' on 5une ;, '%;%, the petitioner contended that the 2i h Court of 1ala*a ac-uired Furisdiction over the 8erson of private respondent b* its voluntar* sub)ission the court+s Furisdiction throu h its appointed counsel, 1r. Jha* Cha* Tee. ,urther)ore, private respondent+s counsel waived an* and all obFections to the 2i h Court+s Furisdiction in a pleadin filed before the court. 3n due ti)e, the trial court rendered its Decision dated 0ctober '=, '%%' dis)issin petitioner+s co)plaint.8etitioner interposed an appeal with the Court of 7ppeals, but the appellate court dis)issed the sa)e and affir)ed the decision of the trial court in a Decision dated 1a* '%, '%%4. 2ence, the instant 8etition which is anchored on two (2) assi ned errors,'2 to wit. 3 T2/ C0!RT 0, 788/7L" /RR/D 3N 20LD3NH T27T T2/ 17L7E"37N C0!RT D3D N0T 7CT!3R/ 8/R"0N7L 5!R3"D3CT30N 0L/R 8NCC, N0T:3T2"T7ND3NH T27T (a) T2/ ,0R/3HN C0!RT 27D "/RL/D "!110N" CONFLICT OF LAWS CASES | 20

0N 8NCC 7T 3T" 17L7E"l7 0,,3C/, 7ND (b) 8NCC 3T"/L, 788/7R/D 6E C0!N"/L 3N T2/ C7"/ 6/,0R/ T27T C0!RT. 33 T2/ C0!RT 0, 788/7L" /RR/D 3N D/NE3NH R/C0HN3T30N 7ND /N,0RC/1/NT T0 ("3C) T2/ 17L7E"37N C0!RT 5!DH1/NT. Henerall*, in the absence of a special co)pact, no soverei n is bound to ive effect within its do)inion to a Fud )ent rendered b* a tribunal of another countr*G '4 however, the rules of co)it*, utilit* and convenience of nations have established a usa e a)on civiliNed states b* which final Fud )ents of forei n courts of co)petent Furisdiction are reciprocall* respected and rendered efficacious under certain conditions that )a* var* in different countries.'= 3n this Furisdiction, a valid Fud )ent rendered b* a forei n tribunal )a* be reco niNed insofar as the i))ediate parties and the underl*in cause of action are concerned so lon as it is convincin l* shown that there has been an opportunit* for a full and fair hearin before a court of co)petent FurisdictionG that the trial upon re ular proceedin s has been conducted, followin due citation or voluntar* appearance of the defendant and under a s*ste) of Furisprudence likel* to secure an i)partial ad)inistration of FusticeG and that there is nothin to indicate either a preFudice in court and in the s*ste) of laws under which it is sittin or fraud in procurin the Fud )ent.'< 7 forei n Fud )ent is presu)ed to be valid and bindin in the countr* fro) which it co)es, until a contrar* showin , on the basis of a presu)ption of re ularit* of proceedin s and the ivin of due notice in the forei n foru) !nder "ection <&(b), '9 Rule 4% of the Revised Rules of Court, which was the overnin law at the ti)e the instant case was decided b* the trial court and respondent appellate court, a Fud )ent, a ainst a person, of a tribunal of a forei n countr* havin Furisdiction to pronounce the sa)e is presu)ptive evidence of a ri ht as between the parties and their successors in interest b* a subse-uent title. The Fud )ent )a*, however, be assailed b* evidence of want of Furisdiction, want of notice to the part*, collusion, fraud, or clear )istake of law or fact. 3n addition, under "ection 4(n), Rule '4' of the Revised Rules of Court, a court, whether in the 8hilippines or elsewhere, enFo*s the presu)ption that it was actin in the lawful e@ercise of its Furisdiction. 2ence, once the authenticit* of the forei n Fud )ent is proved, the part* attackin a forei n Fud )ent, is tasked with the burden of overco)in its presu)ptive validit*. 3n the instant case, petitioner sufficientl* established the e@istence of the )one* Fud )ent of the 2i h Court of 1ala*a b* the evidence it offered. Lina*ak 8rabhakar 8radhan, presented as petitioner+s sole witness, testified to the effect that he is in active practice of the law profession in 1ala*siaG'$ that he was connected with "krine and Co)pan* as Le al 7ssistant up to '%;'G'; that private respondent, then known as Construction and Develop)ent Corporation of the 8hilippines, was sued b* his client, 7siavest 1erchant 6ankers (1) 6erhad, in Juala Lu)purG'%that the writ of su))ons were served on 1arch '$, '%;4 at the re istered office of private respondent and on 1arch 2', '%;4 on Cora ". Deala, a financial plannin officer of private respondent for "outheast 7sia operationsG 2& that upon the filin of the case, 1essrs. 7llen and Hledhill, 7dvocates and "olicitors, with address at 2=th ,loor, !16C 6uildin , 5alan "ulai)an, Juala Lu)pur, entered their conditional appearance for private respondent -uestionin the re ularit* of the service of the writ of su))ons but subse-uentl* withdrew the sa)e when it realiNed that the writ was properl* servedG2' that because private respondent failed to file a state)ent of defense within two (2) weeks, petitioner filed an application for su))ar* Fud )ent and sub)itted affidavits and docu)entar* evidence in support of its clai)G 22 that the )atter was then heard before the 2i h Court of Juala Lu)pur in a series of dates where private respondent was represented b* counselG 24 and that the end result of all these proceedin s is the Fud )ent sou ht to be enforced. 3n addition to the said testi)onial evidence, petitioner offered the followin docu)entar* evidence. (a) 7 certified and authenticated cop* of the 5ud )ent pro)ul ated b* the 1ala*sian 2i h Court dated "epte)ber '4, '%;< directin private respondent to pa* petitioner the su) of #<,'&;,2%&.24 1ala*sian Rin it plus interests fro) 1arch '%;4 until full* paidG2= (b) 7 certified and authenticated cop* of the 0rder dated "epte)ber '4,'%;< issued b* the 1ala*sian 2i h Court in Civil "uit No. C94; of '%;4G2<

(c) Co)putation of principal and interest due as of 5anuar* 4', '%%& on the a)ount adFud ed pa*able to petitioner b* private respondentG29 (d) Letter and "tate)ent of 7ccount of petitioner+s counsel in 1ala*sia indicatin the costs for prosecutin and i)ple)entin the 1ala*sian 2i h Court+s 5ud )entG2$ (e) Letters between petitioner+s 1ala*sian counsel, "krine and Co., and its local counsel, "*cip "alaNar Law 0ffices, relative to institution of the action in the 8hilippinesG2; (f) 6illin 1e)orandu) of "*cip "alaNar Law 0ffices dated 5anuar* 2, '%%& showin attorne*+s fees paid b* and due fro) petitionerG 2% ( ) "tate)ent of Clai), :rit of "u))ons and 7ffidavit of "ervice of such writ in petitioner+s suit a ainst private respondent before the 1ala*sian 2i h CourtG 4& (h) 1e)orandu) of Conditional 7ppearance dated 1arch 2;, '%;4 filed b* counsel for private respondent with the 1ala*sian 2i h CourtG4' (i) "u))ons in Cha)bers and 7ffidavit of Jhaw Cha* Tee, cot)sel for private respondent, sub)itted durin the proceedin s before the 1ala*sian 2i h CourtG42 (F) Record of the Court+s 8roceedin s in Civil Case No. C94; of '%;4.44 (k) 8etitioner +s verified 7pplication for "u))ar* 5ud )ent dated 7u ust '=, '%;=G4= and (l) Letter dated Nove)ber 9, '%;< fro) petitioner+s 1ala*sian Counsel to private respondent+s counsel in 1ala*sia.4< 2avin thus proven, throu h the fore oin evidence, the e@istence and authenticit* of the forei n Fud )ent, said forei n Fud )ent enFo*s presu)ptive validit* and the burden then fell upon the part* who disputes its validit*, herein private respondent, to prove otherwise. 8rivate respondent failed to sufficientl* dischar e the burden that fell upon it > to prove b* clear and convincin evidence the rounds which it relied upon to prevent enforce)ent of the 1ala*sian 2i h Court Fud )ent, na)el*, (a) that Furisdiction was not ac-uired b* the 1ala*sian Court over the person of private respondent due to alle ed i)proper service of su))ons upon private respondent and the alle ed lack of authorit* of its counsel to appear and represent private respondent in the suitG (b) the forei n Fud )ent is alle edl* tainted b* evident collusion, fraud and clear )istake of fact or lawG and (c) not onl* were the re-uisites for enforce)ent or reco nition alle edl* not co)plied with but also that the 1ala*sian Fud )ent is alle edl* contrar* to the Constitutional prescription that the Dever* decision )ust state the facts and law on which it is based.D49 8rivate respondent relied solel* on the testi)on* of its two (2) witnesses, na)el*, 1r. 7lfredo. Calupitan, an accountant of private respondent, and Lir inia 7belardo, /@ecutive "ecretar* and a )e)ber of the staff of the Corporate "ecretariat "ection of the Corporate Le al Division, of private respondent, both of who) failed to shed li ht and a)plif* its defense or clai) for non> enforce)ent of the forei n Fud )ent a ainst it. 1r. Calupitan+s testi)on* centered on the followin . that fro) 5anuar* to Dece)ber '%;2 he was assi ned in 1ala*sia as 8roFect Co)ptroller of the 8ahan 8roFect 8acka e 7 and 6 for road construction under the Foint venture of private respondent and 7siavest 2oldin sG 4$ that under the Foint venture, 7siavest 2oldin s would handle the financial aspect of the proFect, which is fift*>one percent (<' () while private respondent would handle the technical aspect of the proFect, or fort*>nine percent (=%()G 4; and, that Cora Deala was not authoriNed to receive su))ons for and in behalf of the private respondent.4% 1s. 7belardo+s testi)on*, on the other hand, focused on the followin . that there was no board resolution authoriNin 7llen and Hledhill to ad)it all the clai)s of petitioner in the suit brou ht before the 2i h Court of 1ala*a, =& thou h on cross>e@a)ination she ad)itted that 7llen and Hledhill were the retained law*ers of private respondent in 1ala*sia. =' The fore oin reasons or rounds relied upon b* private respondent in preventin enforce)ent and reco nition of the 1ala*sian Fud )ent pri)aril* refer to )atters of re)ed* and procedure taken b* the 1ala*sian 2i h Court relative to the suit for collection initiated b* petitioner. Needless to stress, the reco nition to be accorded a forei n Fud )ent is not necessaril* affected b* the fact that the procedure in the courts of the countr* in which such Fud )ent was rendered differs fro) that of the courts of the countr* in which the Fud )ent is relied on. =2!lti)atel*, )atters of re)ed* and procedure such as those relatin to the service of su))ons or court process upon the defendant, the authorit* of counsel to appear and represent a defendant and CONFLICT OF LAWS CASES | 21

the for)al re-uire)ents in a decision are overned b* the le, (ori or the internal law of the foru),=4 i.e.* the law of 1ala*sia in this case. 3n this case, it is the procedural law of 1ala*sia where the Fud )ent was rendered that deter)ines the validit* of the service of court process on private respondent as well as other )atters raised b* it. 7s to what the 1ala*sian procedural law is, re)ains a -uestion of fact, not of law. 3t )a* not be taken Fudicial notice of and )ust be pleaded and proved like an* other fact. "ections 2= and 2< of Rule '42 of the Revised Rules of Court provide that it )a* be evidenced b* an official publication or b* a dul* attested or authenticated cop* thereof. 3t was then incu)bent upon private respondent to present evidence as to what that 1ala*sian procedural law is and to show that under it, the assailed service of su))ons upon a financial officer of a corporation, as alle ed b* it, is invalid. 3t did not. 7ccordin l*, the presu)ption of validit* and re ularit* of service of su))ons and the decision thereafter rendered b* the 2i h Court of 1ala*a )ust stand.== 0n the )atter of alle ed lack of authorit* of the law fir) of 7llen and Hledhill to represent private respondent, not onl* did the private respondent+s witnesses ad)it that the said law fir) of 7llen and Hledhill were its counsels in its transactions in 1ala*sia, =< but of reater si nificance is the fact that petitioner offered in evidence relevant 1ala*sian Furisprudence =9 to the effect that (a) it is not necessar* under 1ala*sian law for counsel appearin before the 1ala*sian 2i h Court to sub)it a special power of attorne* authoriNin hi) to represent a client before said court, (b) that counsel appearin before the 1ala*sian 2i h Court has full authorit* to co)pro)ise the suit, and (c) that counsel appearin before the 1ala*sian 2i h Court need not co)pl* with certain pre>re-uisites as re-uired under 8hilippine law to appear and co)pro)ise Fud )ents on behalf of their clients before said court.=$ ,urther)ore, there is no basis for or truth to the appellate court+s conclusion that the conditional appearance of private respondent+s counsel who was alle edl* not authoriNed to appear and represent, cannot be considered as voluntar* sub)ission to the Furisdiction of the 2i h Court of 1ala*a, inas)uch as said conditional appearance was not pre)ised on the alle ed lack of authorit* of said counsel but the conditional appearance was entered to -uestion the re ularit* of the service of the writ of su))ons. "uch conditional appearance was in fact subse-uentl* withdrawn when counsel realiNed that the writ was properl* served.=; 0n the round that collusion, fraud and, clear )istake of fact and law tainted the Fud )ent of the 2i h Court of 1ala*a, no clear evidence of the sa)e was adduced or shown. The facts which the trial court found Dintri uin D a)ounted to )ere conFectures and specious observations. The trial court+s findin on the absence of Fud )ent a ainst 7siavest>CDC8 "dn. 6hd. is contradicted b* evidence on record that recover* was also sou ht a ainst 7siavest>CDC8 "dn. 6hd. but the sa)e was found insolvent. =% ,urther)ore, even when the forei n Fud )ent is based on the drafts prepared b* counsel for the successful part*, such is not #er se indicative of collusion or fraud. ,raud to hinder the enforce)ent within the Furisdiction of a forei n Fud )ent )ust be e@trinsic, i.e.* fraud based on facts not controverted or resolved in the case where Fud )ent is rendered,<& or that which would o to the Furisdiction of the court or would deprive the part* a ainst who) Fud )ent is rendered a chance to defend the action to which he has a )eritorious defense.<' 3ntrinsic fraud is one which oes to the ver* e@istence of the cause of action is dee)ed alread* adFud ed, and it, therefore, cannot )ilitate a ainst the reco nition or enforce)ent of the forei n Fud )ent.<2 /vidence is wantin on the alle ed e@trinsic fraud. 2ence, such unsubstantiated alle ation cannot ive rise to liabilit* therein. Lastl*, there is no )erit to the ar u)ent that the forei n Fud )ent is not enforceable in view of the absence of an* state)ent of facts and law upon which the award in favor of the petitioner was based. 7s aforestated, the le, (ori or the internal law of the foru) overns )atters of re)ed* and procedure.<4 Considerin that under the procedural rules of the 2i h Court of 1ala*a, a valid Fud )ent )a* be rendered even without statin in the Fud )ent ever* fact and law upon which the Fud )ent is based, then the sa)e )ust be accorded respect and the courts in the Furisdiction cannot invalidate the Fud )ent of the forei n court si)pl* because our rules provide otherwise. 7ll in all, private respondent had the ulti)ate dut* to de)onstrate the alle ed invalidit* of such forei n Fud )ent, bein the part* challen in the Fud )ent rendered b* the 2i h Court of 1ala*a. 6ut instead of doin so, private respondent )erel* ar ued, to which the trial court a reed, that the burden la* upon petitioner to prove the validit* of the )one* Fud )ent. "uch is

clearl* erroneous and would render )eanin less the presu)ption of validit* accorded a forei n Fud )ent were the part* seekin to enforce it be re-uired to first establish its validit*. <= W#EREFORE, the instant petition is GRANTED. The Decision of the Court of 7ppeals dated 1a* '%,'%%4 in C7>H.R CE No. 4<;$' sustainin the Decision dated 0ctober '=, '%%' in Civil Case No. <949; of the Re ional Trial Court of 8asi , 6ranch '9; den*in the enforce)ent of the 5ud )ent dated "epte)ber '4, '%;< of the 2i h Court of 1ala*a in Juala Lu)pur is REVER!ED and !ET A!IDE, and another in its stead is hereb* rendered ORDERING private respondent 8hilippine National Construction Corporation to pa* petitioner 7siavest 1erchant 6ankers (1) 6erhad the a)ounts adFud ed in the said forei n 5ud )ent, subFect of the said case. Costs a ainst the private respondent. !O ORDERED.

361 S"-$ .89 8 "on(lict o( 'aws 8 9rivate 1nternational 'aw 8 3orei:n Du+: ents 8 Gow $ssaile+ 3n '%;<, the 2i h Court of 1ala*sia ordered the 8hilippine National Construction Corporation (8NCC) to pa* #<.' )illion to 7siavest 1erchant 6ankers (1) 6erhad. This was the result of a recover* suit filed b* 7siavest a ainst 8NCC in 1ala*sia for 8NCCMs failure to co)plete a construction proFect there despite due pa*)ent fro) 7siavest. Despite de)and, 8NCC failed to co)pl* with the Fud )ent in 1ala*sia hence 7siavest filed a co)plaint for the enforce)ent of the 1ala*sian rulin a ainst 8NCC in the 8hilippines. The case was filed with the 8asi RTC which eventuall* denied the co)plaint. The Court of 7ppeals affir)ed the decision of the RTC. 7siavest appealed. 3n its defense, 8NCC alle ed that the forei n Fud )ent cannot be enforced here because of want of Furisdiction, want of notice to 8NCC, collusion and?or fraud, and there is a clear )istake of law or fact. 7siavest assailed the ar u)ents of 8NCC on the round that 8NCCMs counsel participated in all the proceedin s in the 1ala*sian Court. I!!(E/ :hether or not the 1ala*sian Court Fud )ent should be enforced a ainst 8NCC in the 8hilippines. #ELD/ Ees. 8NCC failed to prove and substantiate its bare alle ations of want of Furisdiction, want of notice, collusion and?or fraud, and )istake of fact. 0n the contrar*, 7siavest was able to present evidence as to the validit* of the proceedin s that took place in 1ala*sia. 7siavest presented the certified and authenticated copies of the Fud )ent and the order issued b* the 1ala*sian Court. 3t also presented correspondences between 7siavestMs law*ers and 8NCCMs law*ers in and out of court which belied 8NCCMs alle ation that the 1ala*sian court never ac-uired Furisdiction over it. 8NCCMs alle ation of fraud is not sufficient too, further, it never invoked the sa)e in the 1ala*sian Court. The "upre)e Court notes, to assail a forei n Fud )ent the part* )ust present evidence of want of Furisdiction, want of notice to the part*, collusion, fraud, or clear )istake of law or fact. 0therwise, the Fud )ent enFo*s the presu)ption of validit* so lon as it was dul* certified and authenticated. 3n this case, 8NCC failed to present the re-uired evidence.

CONFLICT OF LAWS CASES

| 22

.M. No. 1+C8 Dece)ber '$, 2&&$ PETITION FOR LEAVE TO RE!(ME EN,AMIN M. DACANA1, #etitioner.

PRACTICE

OF

LAW,

RE!OL(TION "O-O>$* D.E This bar )atter concerns the petition of petitioner 6enFa)in 1. Dacana* for leave to resu)e the practice of law. 8etitioner was ad)itted to the 8hilippine bar in 1arch '%9&. 2e practiced law until he )i rated to Canada in Dece)ber '%%; to seek )edical attention for his ail)ents. 2e subse-uentl* applied for Canadian citiNenship to avail of CanadaMs free )edical aid pro ra). 2is application was approved and he beca)e a Canadian citiNen in 1a* 2&&=. 0n 5ul* '=, 2&&9, pursuant to Republic 7ct (R7) %22< (CitiNenship Retention and Re>7c-uisition 7ct of 2&&4), petitioner reac-uired his 8hilippine citiNenship. ' 0n that da*, he took his oath of alle iance as a ,ilipino citiNen before the 8hilippine Consulate Heneral in Toronto, Canada. Thereafter, he returned to the 8hilippines and now intends to resu)e his law practice. There is a -uestion, however, whether petitioner 6enFa)in 1. Dacana* lost his )e)bership in the 8hilippine bar when he ave up his 8hilippine citiNenship in 1a* 2&&=. Thus, this petition. 3n a report dated 0ctober '9, 2&&$, the 0ffice of the 6ar Confidant cites "ection 2, Rule '4; (7ttorne*s and 7d)ission to 6ar) of the Rules of Court. "/CT30N 2. -e5uire ents (or all a##licants (or a+ ission to the bar . Z /ver* applicant for ad)ission as a )e)ber of the bar m-60 be % c303Ae& o5 04e P4383773&e6, at least twent*>one *ears of a e, of ood )oral character, and a resident of the 8hilippinesG and )ust produce before the "upre)e Court satisfactor* evidence of ood )oral character, and that no char es a ainst hi), involvin )oral turpitude, have been filed or are pendin in an* court in the 8hilippines. 7ppl*in the provision, the 0ffice of the 6ar Confidant opines that, b* virtue of his reac-uisition of 8hilippine citiNenship, in 2&&9, petitioner has a ain )et all the -ualifications and has none of the dis-ualifications for )e)bership in the bar. 3t reco))ends that he be allowed to resu)e the practice of law in the 8hilippines, conditioned on his retakin the law*erMs oath to re)ind hi) of his duties and responsibilities as a )e)ber of the 8hilippine bar. :e approve the reco))endation of the 0ffice of the 6ar Confidant with certain )odifications. The practice of law is a privile e burdened with conditions. 2 3t is so delicatel* affected with public interest that it is both a power and a dut* of the "tate (throu h this Court) to control and re ulate it in order to protect and pro)ote the public welfare. 4 7dherence to ri id standards of )ental fitness, )aintenance of the hi hest de ree of )oralit*, faithful observance of the rules of the le al profession, co)pliance with the )andator* continuin le al education re-uire)ent and pa*)ent of )e)bership fees to the 3nte rated 6ar of the 8hilippines (368)

are the conditions re-uired for )e)bership in ood standin in the bar and for enFo*in the privile e to practice law. 7n* breach b* a law*er of an* of these conditions )akes hi) unworth* of the trust and confidence which the courts and clients repose in hi) for the continued e@ercise of his professional privile e. = "ection ', Rule '4; of the Rules of Court provides. "/CT30N '. Who a) #ractice law . Z 7n* person heretofore dul* ad)itted as a )e)ber of the bar, or thereafter ad)itted as such in accordance with the provisions of this Rule, and who is in ood and re ular standin , is entitled to practice law. 8ursuant thereto, an* person ad)itted as a )e)ber of the 8hilippine bar in accordance with the statutor* re-uire)ents and who is in ood and re ular standin is entitled to practice law. 7d)ission to the bar re-uires certain -ualifications. The Rules of Court )andates that an applicant for ad)ission to the bar be a citiNen of the 8hilippines, at least twent*>one *ears of a e, of ood )oral character and a resident of the 8hilippines. < 2e )ust also produce before this Court satisfactor* evidence of ood )oral character and that no char es a ainst hi), involvin )oral turpitude, have been filed or are pendin in an* court in the 8hilippines. 9 1oreover, ad)ission to the bar involves various phases such as furnishin satisfactor* proof of educational, )oral and other -ualificationsG $ passin the bar e@a)inationsG ; takin the law*erMs oath % and si nin the roll of attorne*s and receivin fro) the clerk of court of this Court a certificate of the license to practice. '& The second re-uisite for the practice of law [ )e)bership in ood standin [ is a continuin re-uire)ent. This )eans continued )e)bership and, conco)itantl*, pa*)ent of annual )e)bership dues in the 368G '' pa*)ent of the annual professional ta@G'2 co)pliance with the )andator* continuin le al education re-uire)entG '4 faithful observance of the rules and ethics of the le al profession and bein continuall* subFect to Fudicial disciplinar* control. '= Hiven the fore oin , )a* a law*er who has lost his ,ilipino citiNenship still practice law in the 8hilippinesU No. The Constitution provides that the practice of all professions in the 8hilippines shall be li)ited to ,ilipino citiNens save in cases prescribed b* law. '< "ince ,ilipino citiNenship is a re-uire)ent for ad)ission to the bar, loss thereof ter)inates )e)bership in the 8hilippine bar and, conse-uentl*, the privile e to en a e in the practice of law. 3n other words, the loss of ,ilipino citiNenship i#so jure ter)inates the privile e to practice law in the 8hilippines. The practice of law is a privile e denied to forei ners. '9 The e@ception is when ,ilipino citiNenship is lost b* reason of naturaliNation as a citiNen of another countr* but subse-uentl* reac-uired pursuant to R7 %22<. This is because Vall 8hilippine citiNens who beco)e citiNens of another countr* shall be +ee e+ not to have lost their 9hili##ine citi7enshi# under the conditions of BR7 %22<C.W '$ Therefore, a ,ilipino law*er who beco)es a
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citiNen of another countr* is dee)ed never to have lost his 8hilippine citiNenship 35 4e re%c?-3re6 30 3& %ccor'%&ce 2304 RA 922* . 7lthou h he is also dee)ed never to have ter)inated his )e)bership in the 8hilippine bar, no auto)atic ri ht to resu)e law practice accrues. !nder R7 %22<, if a person intends to practice the le al profession in the 8hilippines and he reac-uires his ,ilipino citiNenship pursuant to its provisions V(he) shall appl* with the proper authorit* for a license or per)it to en a e in such practice.W '; "tated otherwise, before a law*er who reac-uires ,ilipino citiNenship pursuant to R7 %22< can resu)e his law practice, he )ust first secure fro) this Court the authorit* to do so, conditioned on. (a) the updatin and pa*)ent in full of the annual )e)bership dues in the 368G (b) the pa*)ent of professional ta@G (c) the co)pletion of at least 49 credit hours of )andator* continuin le al educationG this is speciall* si nificant to refresh the applicant?petitionerMs knowled e of 8hilippine laws and update hi) of le al develop)ents and (d) the re0%:3&< o5 04e 8%2.erG6 o%04 which will not onl* re)ind hi) of his duties and responsibilities as a law*er and as an officer of the Court, but also renew his pled e to )aintain alle iance to the Republic of the 8hilippines. Co)pliance with these conditions will restore his ood standin as a )e)ber of the 8hilippine bar. W#EREFORE, the petition of 7ttorne* 6enFa)in 1. Dacana* is hereb* GRANTED, subFect to co)pliance with the conditions stated above and sub)ission of proof of such co)pliance to the 6ar Confidant, after which he )a* retake his oath as a )e)ber of the 8hilippine bar. !O ORDERED. %./ S"-$ .&. 8 "ivil 'aw 8 9rivate 1nternational 'aw 8 >ationalit) 6heor) 8 9ractice o( 'aw is -eserve+ (or 3ili#inos 3n '%%;, 7tt*. 6enFa)in Dacana* went to Canada to seek )edical help. 3n order for hi) to take advanta e of CanadaMs free )edical aid pro ra) he beca)e a Canadian citiNen in 2&&=. 3n 2&&9 however, he re>ac-uired his 8hilippine citiNenship pursuant to Republic 7ct %22< of the CitiNenship Retention and Re>7c-uisition 7ct of 2&&4. 3n the sa)e *ear, he returned to the 8hilippines and he now intends to resu)e his practice of law. I!!(E/ :hether or not 6enFa)in Dacana* )a* still resu)e his practice of law. #ELD/ Ees. 7s a rule, the practice of law and other professions in the 8hilippines are reserved and li)ited onl* to ,ilipino citiNens. 8hilippine citiNenship is a re-uire)ent for ad)ission to the bar. "o when Dacana* beca)e a Canadian citiNen in 2&&=, he ceased to have the privile e to practice law in the 8hilippines. 2owever, under R7 %22<, a ,ilipino law*er who beco)es a citiNen of another countr* is dee)ed never to have lost his 8hilippine citiNenship 35 4e re%c?-3re6 436 F38373&o c303Ae&6437 3& %ccor'%&ce 2304 RA 922*. 2ence, when Dacana* reac-uires his ,ilipino

citiNenship in 2&&9, his )e)bership to the 8hilippine bar was dee)ed to have never been ter)inated. 0ut +oes this also ean that he can auto aticall) resu e his #ractice o( law ri:ht a(ter reac5uisitionH No. Dacana* )ust still co)pl* with several conditions before he can resu)e his practice of law, to wit. (a) the updatin and pa*)ent in full of the annual )e)bership dues in the 368G (b) the pa*)ent of professional ta@G (c) the co)pletion of at least 49 credit hours of )andator* continuin le al educationG this is especiall* si nificant to refresh the applicant?petitionerMs knowled e of 8hilippine laws and update hi) of le al develop)ents and (d) the re0%:3&< o5 04e 8%2.erG6 o%04 which will not onl* re)ind hi) of his duties and responsibilities as a law*er and as an officer of the Court, but also renew his pled e to )aintain alle iance to the Republic of the 8hilippines. Co)pliance with these conditions will restore his ood standin as a )e)ber of the 8hilippine bar.

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