Asiavest Limited vs Court of Appeals on November 21, 2012 295 SCRA 469 Conflict of Laws Private International Law

aw Service of Summons to a Non Resident Processual Presumption In 1984, a Hong Kong court ordered Antonio Heras to pay US$1.8 million or its equivalent, with interest, to Asiavest Ltd. Apparently, Heras guaranteed a certain loan in Hong Kong and the debtor in said loan defaulted hence, the creditor, Asiavest, ran after Heras. But before said judgment was issued and even during trial, Heras already left for good Hong Kong and he returned to the Philippines. So when in 1987, when Asiavest filed a complaint in court seeking to enforce the foreign judgment against Heras, the latter claim that he never received any summons, not in Hong Kong and not in the Philippines. He also claimed that he never received a copy of the foreign judgment. Asiavest however contends that Heras was actually given service of summons when a messenger from the Sycip Salazar Law Firm served said summons by leaving a copy to one Dionisio Lopez who was Heras son in law. ISSUE: Whether or not the foreign judgment can be enforced against Heras in the Philippines. HELD: No. Although the foreign judgment was duly authenticated (Asiavest was able to adduce evidence in support thereto) and Heras was never able to overcome the validity of it, it cannot be enforced against Heras here in the Philippines because Heras was not properly served summons. Hence, as far as Philippine law is concerned, the Hong Kong court has never acquired jurisdiction over Heras. This means then that Philippine courts cannot act to enforce the said foreign judgment. The action against Heras is an action in personam and as far as Hong Kong is concerned, Heras is a non resident. He is a non resident because prior to the judgment, he already abandoned Hong Kong. The Hong Kong law on service of summons in in personam cases against non residents was never presented in court hence processual presumption is applied where it is now presumed that Hong Kong law in as far as this case is concerned is the same as Philippine laws. And under our laws, in an action in personam wherein the defendant is a non-resident who does not voluntarily submit himself to the authority of the court, personal service of summons within the state is essential to the acquisition of jurisdiction over her person. This method of service is possible if such defendant is physically present in the country. If he is not found therein, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him. Without a personal service of summons, the Hong Kong court never acquired jurisdiction. Needless to say, the summons tendered to Lopez was an invalid service because the same does not satisfy the requirement of personal service.

Saudi Arabian Airlines vs Court of Appeals on November 21, 2012 297 SCRA 469 Conflict of Laws Private International Law Situs Locus Actus Milagros Morada was working as a stewardess for Saudia Arabian Airlines. In 1990, while she and some co-workers were in a lay-over in Jakarta, Indonesia, an Arab co-worker tried to rape her in a hotel room. Fortunately, a roomboy heard her cry for help and two of her Arab co-workers were arrested and detained in Indonesia. Later, Saudia Airlines re-assigned her to work in their Manila office. While working in Manila, Saudia Airlines advised her to meet with a Saudia Airlines officer in Saudi. She did but to her surprise, she was brought to a Saudi court where she was interrogated and eventually sentenced to 5 months imprisonment and 289 lashes; she allegedly violated Muslim customs by partying with males. The Prince of Makkah got wind of her conviction and the Prince determined that she was wrongfully convicted hence the Prince absolved her and sent her back to the Philippines. Saudia Airlines later on dismissed Morada. Morada then sued Saudia Airlines for damages under Article 19 and 21 of the Civil Code. Saudia Airlines filed a motion to dismiss on the ground that the RTC has no jurisdiction over the case because the applicable law should be the law of Saudi Arabia. Saudia Airlines also prayed for other reliefs under the premises. ISSUE: Whether or not Saudia Airlines contention is correct. HELD: No. Firstly, the RTC has acquired jurisdiction over Saudia Airlines when the latter filed a motion to dismiss with petition for other reliefs. The asking for other reliefs effectively asked the court to make a determination of Saudia Airliness rights hence a submission to the courts jurisdiction. Secondly, the RTC has acquired jurisdiction over the case because as alleged in the complaint of Morada, she is bringing the suit for damages under the provisions of our Civil Law and not of the Arabian Law. Morada then has the right to file it in the QC RTC because under the Rules of Court, a plaintiff may elect whether to file an action in personam (case at bar) in the place where she resides or where the defendant resides. Obviously, it is well within her right to file the case here because if shell file it in Saudi Arabia, it will be very disadvantageous for her (and of course, again, Philippine Civil Law is the law invoked). Thirdly, one important test factor to determine where to file a case, if there is a foreign element involved, is the so called locus actus or where an act has been done. In the case at bar, Morada was already working in Manila when she was summoned by her superior to go to Saudi Arabia to meet with a Saudia Airlines officer. She was not informed that she was going to appear in a court trial. Clearly, she was defrauded into appearing before a court trial which led to her wrongful conviction. The act of defrauding, which is tortuous, was committed in Manila and this led to her humiliation,

misery, and suffering. And applying the torts principle in a conflicts case, the SC finds that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). G.R. No. 122191, Oct. 8, 1998 FACTS: Plaintiff Morada is a flight attendant for defendant SAUDIAs airlines based in Jeddah. On April 27, 1990, while on a lay-over in Jakarta, Indonesia, Morada became a victim of attempted rape by fellow crewmembers, Thamer and Allah, who are both Saudi nationals. The two were eventually arrested and deported back to Saudi Arabia while Morada was transferred to Manila. On various dates after the incident, Morada was summoned to Jeddah by her employer in order to sign documents, purporting to be statements dropping the case against Thamer and Allah. However, it turned out that a case was in fact filed against her before the Saudi court, which later found her guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. Hence, Morada filed this complaint for damages based on Article 21 of the New Civil Code against SAUDIA and its country manager. ISSUE: Whether or not the trial court has jurisdiction over the case Whether the proper law applicable is Philippine law or the law of the Kingdom of Saudi Arabia Whether or not the case involves a conficts problem

A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a foreign element. The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. The forms in which this foreign element may appear are many. The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex form. In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner SAUDIA as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts situation to arise. Applicability of Art. 19 and 21, NCC and Jurisdiction of Quezon City RTC The Supreme Court held that private respondent aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code. Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the municipal forum. Based on the allegations in the Amended Complaint, read in the light of the Rules of Court on jurisdiction, the Supreme Court found that the RTC of Quezon City possesses jurisdiction over the subject matter of the suit. Its authority to try and hear the case is provided under Section 1 of RA 7691. Venue was also held to be proper. Furthermore, jurisdiction over the person of the plaintiff and defendant were properly acquired. Choice-of-law Problem

HELD: Is there a conflicts case? The Supreme Court held in the affirmative. Choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation.

Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as characterization, or the doctrine of qualification. It is the process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule. The purpose of characterization is to enable the forum to select the proper law. Our starting point of analysis here is not a legal relation, but a factual situation, event or operative fact. An essential element of conflict rules is the indication of a test or connecting factor or point of contact. Choice-of-law rules invariably consist of factual relationship (such as property right, contract claim) and a connecting factor or point of contract, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing. Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. These test factors or points of contact or connecting factors could be any of the following: The nationality of a person, his domicile, his residence, his place of sojourn, or his origin; The seat of a legal or juridical person, such as a corporation; The situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisive when real rights are involved; The place where an act has been done, the locus actus, such as the place where a contract has been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts; The place where an act is intended to come into effect, e.g. the place of performance of contractual duties, or the place where a power of attorney is to be exercised; The intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis; The place where judicial or administrative proceedings are instituted or done. The lex fori the law of the forum is particularly important because, as we have seen earlier, matters of procedure not going to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and The flag of the ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.

Considering that the complaint in the court a quo is one involving torts, the connecting factor or point of contact could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, act with justice, give her her due and observe honesty and good faith. Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the fatality of the alleged injury to the person, reputation, social standing and human rights of the complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort. Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liability have been advanced to offer fresh judicial approaches to arrive at just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the State of the most significant relationship rule, which in our view should be appropriate to apply now, given the factual context of this case. In applying said principle to determine the State which has the most significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. Over-all injury occurred in the Philippines As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the relationship between the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, raised by private respondent as

plaintiff below against defendant (herein petitioner), in our view, has been properly established. Banco Do Brasil vs Court of Appeals on December 5, 2012 333 SCRA 545 Conflict of Laws Private International Law Service of Summons in In Personam Cases In 1989, Cesar Urbino, Sr. sued Poro Point Shipping Services for damages the former incurred when one of the latters ship ran aground causing losses to Urbino. Urbino impleaded Banco Do Brasil (BDB), a foreign corporation not engaged in business in the Philippines nor does it have any office here or any agent. BDB was impleaded simply because it has a claim over the sunken ship. BDB however failed to appear multiple times. Eventually, a judgment was rendered and BDB was adjudged to pay $300,000.00 in damages in favor of Urbino for BDB being a nuisance defendant. BDB assailed the said decision as it argued that there was no valid service of summons because the summons was issued to the ambassador of Brazil. Further, the other summons which were made through publication is not applicable to BDB as it alleged that the action against them is in personam. ISSUE: Whether or not the court acquired jurisdiction over Banco Do Brasil. HELD: No. Banco Do Brasil is correct. Although the suit is originally in rem as it was BDBs claim on the sunken ship which was used as the basis for it being impleaded, the action nevertheless became an in personam one when Urbino asked for damages in the said amount. As such, only a personal service of summons would have vested the court jurisdiction over BDB. Where the action is in personam, one brought against a person on the basis of his personal liability, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. When the defendant is a nonresident, personal service of summons within the state is essential to the acquisition of jurisdiction over the person. This cannot be done, however, if the defendant is not physically present in the country, and thus, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him. Kazuhiro Hasegawa vs Minoru Kitamura on December 5, 2012 538 SCRA 261 Conflict of Laws Private International Law Jurisdiction Lex Loci Celebrationis Lex Loci Solutionis State of the Most Significant Relationship Forum Non Conveniens In March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was contracted by the Department of Public Works and Highways (DPWH) to supervise the construction

of the Southern Tagalog Access Road. In April 1999, Nippon entered into an independent contractor agreement (ICA) with Minoru Kitamura for the latter to head the said project. The ICA was entered into in Japan and is effective for a period of 1 year (so until April 2000). In January 2000, DPWH awarded the Bongabon-Baler Road project to Nippon. Nippon subsequently assigned Kitamura to head the road project. But in February 2000, Kazuhiro Hasegawa, the general manager of Nippon informed Kitamura that they are pre-terminating his contract. Kitamura sought Nippon to reconsider but Nippon refused to negotiate. Kitamura then filed a complaint for specific performance and damages against Nippon in the RTC of Lipa. Hasegawa filed a motion to dismiss on the ground that the contract was entered in Japan hence, applying the principle of lex loci celebracionis, cases arising from the contract should be cognizable only by Japanese courts. The trial court denied the motion. Eventually, Nippon filed a petition for certiorari with the Supreme Court. Hasegawa, on appeal significantly changed its theory, this time invoking forum non conveniens; that the RTC is an inconvenient forum because the parties are Japanese nationals who entered into a contract in Japan. Kitamura on the other hand invokes the trial courts ruling which states that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance, so since the obligations in the ICA are executed in the Philippines, courts here have jurisdiction. ISSUE: Whether or not the complaint against Nippon should be dismissed. HELD: No. The trial court did the proper thing in taking cognizance of it. In the first place, the case filed by Kitamura is a complaint for specific performance and damages. Such case is incapable of pecuniary estimation; such cases are within the jurisdiction of the regional trial court. Hasegawa filed his motion to dismiss on the ground of forum non conveniens. However, such ground is not one of those provided for by the Rules as a ground for dismissing a civil case. The Supreme Court also emphasized that the contention that Japanese laws should apply is premature. In conflicts cases, there are three phases and each next phase commences when one is settled, to wit: 1. Jurisdiction Where should litigation be initiated? Court must have jurisdiction over the subject matter, the parties, the issues, the property, the res. Also considers, whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. 2. Choice of Law Which law will the court apply? Once a local court takes cognizance, it does not mean that the local laws must automatically apply. The court must

determine which substantive law when applied to the merits will be fair to both parties. 3. Recognition and Enforcement of Judgment Where can the resulting judgment be enforced? This case is not yet in the second phase because upon the RTCs taking cognizance of the case, Hasegawa immediately filed a motion to dismiss, which was denied. He filed a motion for reconsideration, which was also denied. Then he bypassed the proper procedure by immediately filing a petition for certiorari. The question of which law should be applied should have been settled in the trial court had Hasegawa not improperly appealed the interlocutory order denying his MFR. Victoria Regner vs Cynthia Logarta 537 SCRA 277 Conflict of Laws Private International Law Service of Summons Personal Action Real Action Extraterritorial Service Cynthia Logarta and Teresa Tormis were the daughters of Luis Regner in his first marriage with Anicita Regner. Victoria Regner is the second wife of Luis. In 1999, Victoria alleged that Cynthia and Teresa with the help of another sibling defrauded Luis, who was then very ill and was unable to write, into placing his thumbmark into a Deed of Donation. In said Deed, Luis purportedly donated a Proprietary Ownership Certificate pertaining to membership shares in the Cebu Country Club. Victoria alleged that said Deed is void because the placing of thumbmark by Luis was done without the latters free will and voluntariness considering his physical state; that it was done without Luiss lawyer; that the ratification made by Luis before he died is likewise void because of similar circumstances. In the same year, Victoria filed a complaint to annul said deed with the RTC of Cebu. The sheriff could not deliver the summonses against Cynthia and Teresa because apparently, although they are Filipinos, they are not residing here; they are residing in California. It was only in the year 2000 that one of the summonses was served to one of the sisters, Teresa, when she came back to the Philippines. Teresa immediately filed a motion to dismiss on the ground that Victoria failed to prosecute her case for an unreasonable length of time. Naturally, Victoria opposed the MTD. Teresa, in her rejoinder, alleged that the case should be dismissed because Cynthia, who is an indispensable party, was not issued any summons, hence, since an indispensable party is not served with summons, without her who has such an interest in the controversy or subject matter there can be no proper determination of the case. The trial court ruled in favor of Teresa; this was affirmed by the Court of Appeals. ISSUE: Whether or not the dismissal of Victorias complaint is correct.

HELD: Yes. The Supreme Court agreed with the arguments presented by Teresa. The Supreme Court also emphasized: There are generally two types of actions: actions in rem and actions in personam. An action in personam is an action against a person on the basis of his personal liability, while an action in rem is an action against the thing itself, instead of against the person. The certificate, subject of the donation, is a personal property. The action filed by Victoria is therefore a personal action. So in order for the court to acquire jurisdiction over the respondents, summons must be served upon them. Further, the certificate is indivisible, Cynthias and Teresas interests thereto can only be determined if both are summoned in court. In personal actions, if the respondents are residents of the Philippines, they may be served summons in the following order: 1. Personal Service; 2. If (1) is not possible, Substituted Service; 3. If respondent cant be found because he is abroad but still a resident of the Philippines, by publication with leave of court. In personal actions still, if the respondents are non-residents, they may be served summons in the following manner: 1. Personal service through the Philippine embassy; 2. By publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or 3. in any other manner which the court may deem sufficient. The above must be with leave of court. In the case at bar, Cynthia was never served any summons in any of the manners authorized by the Rules of Court. The summons served to Teresa cannot bind Cynthia. It is incumbent upon Victoria to compel the court to authorize the extraterritorial service of summons against Cynthia. Her failure to do so for a long period of time constitutes a failure to prosecute on her part. What if the petition is an action in rem? What are the applicable rules? If the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not essential for giving the court jurisdiction so long as the court acquires jurisdiction over the res. If the defendant is a nonresident and he is not found in the country, summons may be served extraterritorially in the following instances: 1. when the action affects the personal status of the plaintiff; 2. when the action relates to, or the subject of which is property within the Philippines, on which the defendant claims a lien or an interest, actual or contingent;

3. when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and 4. when the defendant non-residents property has been attached within the Philippines. In the above instances, summons may be effected by: 1. personal service out of the country, with leave of court; 2. publication, also with leave of court; or 3. any other manner the court may deem sufficient. First Philippine International Bank vs Court of Appeals on October 12, 2012 252 SCRA 259 Legal Ethics Forum Shopping Civil Law Contract of Sale Parties to a Sales Contract Producers Bank (now called First Philippine International Bank), which has been under conservatorship since 1984, is the owner of 6 parcels of land. The Bank had an agreement with Demetrio Demetria and Jose Janolo for the two to purchase the parcels of land for a purchase price of P5.5 million pesos. The said agreement was made by Demetria and Janolo with the Banks manager, Mercurio Rivera. Later however, the Bank, through its conservator, Leonida Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized to enter into such an agreement, hence there was no valid contract of sale. Subsequently, Demetria and Janolo sued Producers Bank. The regional trial court ruled in favor of Demetria et al. The Bank filed an appeal with the Court of Appeals. Meanwhile, Henry Co, who holds 80% shares of stocks with the said Bank, filed a motion for intervention with the trial court. The trial court denied the motion since the trial has been concluded already and the case is now pending appeal. Subsequently, Co, assisted by ACCRA law office, filed a separate civil case against Demetria and Janolo seeking to have the purported contract of sale be declared unenforceable against the Bank. Demetria et al argued that the second case constitutes forum shopping. ISSUES: 1. Whether or not there is forum shopping. 2. Whether or not there is a perfected contract of sale. HELD: 1. Yes. There is forum shopping because there is identity of interest and parties between the first case and the second case. There is identity of interest because both cases sought to have the agreement, which involves the same property, be declared unenforceable as against the Bank. There is identity of parties even though the first case is in the name of the bank as defendant, and the second case is in the

name of Henry Co as plaintiff. There is still forum shopping here because Henry Co essentially represents the bank. Both cases aim to have the bank escape liability from the agreement it entered into with Demetria et al. The Supreme Court did not lay down any disciplinary action against the ACCRA lawyers but they were warned that a repetition will be dealt with more severely. 2. Yes. There is a perfected contract of sale because the bank manager, Rivera, entered into the agreement with apparent authority. This apparent authority has been duly proved by the evidence presented which showed that in all the dealings and transactions, Rivera participated actively without the opposition of the conservator. In fact, in the advertisements and announcements of the bank, Rivera was designated as the go-to guy in relation to the disposition of the Banks assets.