Pril - Cases - II - Addressing Conclicts

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Conflicts of Law
Addressing Conflict of Laws Problems
G.R. No. 122191 October 8, 1998
SAUDI ARABIAN AIRLINES, petitioner,
vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as
Presiding Judge of Branch 89, Regional Trial Court of Quezon City, respondents.
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and set
aside the Resolution1 dated September 27, 1995 and the Decision2 dated April 10, 1996 of
the Court of Appeals3 in CA-G.R. SP No. 36533,4 and the Orders5 dated August 29, 1994 6
and February 2, 19957 that were issued by the trial court in Civil Case No. Q-93-18394.8
The pertinent antecedent facts which gave rise to the instant petition, as stated in the
questioned Decision9, are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines
based in Jeddah, Saudi Arabia. . . .
On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance
with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals.
Because it was almost morning when they returned to their hotels, they agreed to have
breakfast together at the room of Thamer. When they were in te (sic) room, Allah left on
some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a
roomboy and several security personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an
accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her
about the Jakarta incident. They then requested her to go back to Jakarta to help arrange
the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base
manager Baharini negotiated with the police for the immediate release of the detained crew
members but did not succeed because plaintiff refused to cooperate. She was afraid that
she might be tricked into something she did not want because of her inability to understand
the local dialect. She also declined to sign a blank paper and a document written in the local
dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the
Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian government, the
Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention.
Eventually, they were again put in service by defendant SAUDI (sic). In September 1990,
defendant SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta incident was already
behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station
where the police took her passport and questioned her about the Jakarta incident. Miniewy
simply stood by as the police put pressure on her to make a statement dropping the case
against Thamer and Allah. Not until she agreed to do so did the police return her passport
and allowed her to catch the afternoon flight out of Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before
the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead
ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of
SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court
where she was asked to sign a document written in Arabic. They told her that this was
necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again
and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving
assurance from SAUDIA's Manila manager, Aslam Saleemi, that the investigation was
routinary and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27,
1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta incident. After one hour of interrogation, they let
her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer
told her that the airline had forbidden her to take flight. At the Inflight Service Office where
she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her
to remain in Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the
judge, to her astonishment and shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes. Only then did she realize
that the Saudi court had tried her, together with Thamer and Allah, for what happened in
Jakarta. The court found plaintiff 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. 10
Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA.
Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in
Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked
on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the
international
flights. 11
Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her
and allowed her to leave Saudi Arabia. Shortly before her return to Manila, 12 she was
terminated from the service by SAUDIA, without her being informed of the cause.
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Conflicts of Law
Addressing Conflict of Laws Problems
On November 23, 1993, Morada filed a Complaint 13 for damages against SAUDIA, and
Khaled Al-Balawi ("Al-Balawi"), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the
following grounds, to wit: (1) that the Complaint states no cause of action against Saudia; (2)
that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth
in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the
trial court has no jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) 15. Saudia filed a
reply 16 thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi was dropped as
party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to Dismiss
Amended Complaint 18.
The trial court issued an Order 19 dated August 29, 1994 denying the Motion to Dismiss
Amended Complaint filed by Saudia.
From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA filed on
September 20, 1994, its Motion for Reconsideration 21 of the Order dated August 29, 1994. It
alleged that the trial court has no jurisdiction to hear and try the case on the basis of Article
21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia.
On October 14, 1994, Morada filed her Opposition 22 (To Defendant's Motion for
Reconsideration).
In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its
Motion for Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus
Motion Rule does not apply, even if that ground is raised for the first time on appeal.
Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the
prosecution of the instant case, and hence, without jurisdiction to adjudicate the same.
Respondent Judge subsequently issued another Order 24 dated February 2, 1995, denying
SAUDIA's Motion for Reconsideration. The pertinent portion of the assailed Order reads as
follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru
counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru
counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian
Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the
plaintiffs Amended Complaint, which is one for the recovery of actual, moral and
exemplary damages plus attorney's fees, upon the basis of the applicable Philippine law,
Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this
Court as regards the subject matter, and there being nothing new of substance which
might cause the reversal or modification of the order sought to be reconsidered, the
motion for reconsideration of the defendant, is DENIED. SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and Prohibition
with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order
26 with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order 27
dated February 23, 1995, prohibiting the respondent Judge from further conducting any
proceeding, unless otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate
court denied SAUDIA's Petition for the Issuance of a Writ of Preliminary Injunction dated
February 18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED, after
considering the Answer, with Prayer to Deny Writ of Preliminary Injunction (Rollo, p. 135)
the Reply and Rejoinder, it appearing that herein petitioner is not clearly entitled thereto
(Unciano Paramedical College, et. Al., v. Court of Appeals, et. Al., 100335, April 7, 1993,
Second Division). SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition 29 for
Review with Prayer for Temporary Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of Appeals rendered
the Decision 30 dated April 10, 1996, now also assailed. It ruled that the Philippines is an
appropriate forum considering that the Amended Complaint's basis for recovery of damages is
Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It
further held that certiorari is not the proper remedy in a denial of a Motion to Dismiss,
inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling,
find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary
Restraining Order 31 dated April 30, 1996, given due course by this Court. After both parties
submitted their Memoranda, 32 the instant case is now deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article
21 of the New Civil Code since the proper law applicable is the law of the Kingdom of Saudi
Arabia inasmuch as this case involves what is known in private international law as a "conflicts
problem". Otherwise, the Republic of the Philippines will sit in judgment of the acts done by
another sovereign state which is abhorred.
II
Leave of court before filing a supplemental pleading is not a jurisdictional requirement.
Besides, the matter as to absence of leave of court is now moot and academic when this
Honorable Court required the respondents to comment on petitioner's April 30, 1996
Supplemental Petition For Review With Prayer For A Temporary Restraining Order Within Ten
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Conflicts of Law
Addressing Conflict of Laws Problems
(10) Days From Notice Thereof. Further, the Revised Rules of Court should be construed with
liberality pursuant to Section 2, Rule 1 thereof.
III
Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533
entitled "Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al." and filed its April 30, 1996
Supplemental Petition For Review With Prayer For A Temporary Restraining Order on May 7,
1996 at 10:29 a.m. or within the 15-day reglementary period as provided for under Section 1,
Rule 45 of the Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has
not yet become final and executory and this Honorable Court can take cognizance of this case.
33
From the foregoing factual and procedural antecedents, the following issues emerge for our
resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL
COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-18394
ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES".
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE
PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset.
It maintains that private respondent's claim for alleged abuse of rights occurred in the
Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the
instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex
loci delicti commissi rule. 34
On the other hand, private respondent contends that since her Amended Complaint is based
on Articles 19 35 and 21 36 of the Civil Code, then the instant case is properly a matter of
domestic law. 37
Under the factual antecedents obtaining in this case, there is no dispute that the interplay of
events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint 38 dated June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation doing
business in the Philippines. It may be served with summons and other court processes at
Travel Wide Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero St.,
Salcedo Village, Makati, Metro Manila.
xxx
xxx
xxx
6. Plaintiff learned that, through the intercession of the Saudi Arabian government, the
Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention.
Eventually, they were again put in service by defendant SAUDIA. In September 1990,
defendant SAUDIA transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was already
behind her, her superiors reauested her to see MR. Ali Meniewy, Chief Legal Officer of
SAUDIA in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station
where the police took her passport and questioned her about the Jakarta incident. Miniewy
simply stood by as the police put pressure on her to make a statement dropping the case
against Thamer and Allah. Not until she agreed to do so did the police return her passport
and allowed her to catch the afternoon flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few minutes
before the departure of her flight to Manila, plaintiff was not allowed to board the plane
and instead ordered to take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal
Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a
Saudi court where she was asked to sigh a document written in Arabic. They told her that
this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff
signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned
to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once
again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after
receiving assurance from SAUDIA's Manila manger, Aslam Saleemi, that the investigation
was routinary and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27,
1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta incident. After one hour of interrogation, they let
her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer
told her that the airline had forbidden her to take that flight. At the Inflight Service Office
where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and
told her to remain in Jeddah, at the crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court
where the judge, to her astonishment and shock, rendered a decision, translated to her in
English, sentencing her to five months imprisonment and to 286 lashes. Only then did she
realize that the Saudi court had tried her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco,
dancing, and listening to the music in violation of Islamic laws; (3) socializing with the
male crew, in contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the help of
the Philippines Embassy in Jeddah. The latter helped her pursue an appeal from the
decision of the court. To pay for her upkeep, she worked on the domestic flights of
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Conflicts of Law
Addressing Conflict of Laws Problems
defendant SAUDIA while, ironically, Thamer and Allah freely served the international
flights. 39
Where the factual antecedents satisfactorily establish the existence of a foreign element, we
agree with petitioner that the problem herein could present a "conflicts" case.
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. 40
The forms in which this foreign element may appear are many. 41 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. 42
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.
We thus find private respondent's assertion that the case is purely domestic, imprecise. A
conflicts problem presents itself here, and the question of jurisdiction 43 confronts the court a
quo.
After a careful study of the private respondent's Amended Complaint, 44 and the Comment
thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the
New Civil Code.
On one hand, Article 19 of the New Civil Code provides:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice give everyone his due and observe honesty and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for
damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this Court held that:
The aforecited provisions on human relations were intended to expand the concept of torts
in this jurisdiction by granting adequate legal remedy for the untold number of moral
wrongs which is impossible for human foresight to specifically provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions.
Thus, we agree with private respondent's assertion that violations of Articles 19 and 21 are
actionable, with judicially enforceable remedies in the municipal forum.
Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of Court
on jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City possesses
jurisdiction over the subject matter of the suit. 48 Its authority to try and hear the case is
provided for under Section 1 of Republic Act No. 7691, to wit:
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary
Reorganization Act of 1980", is hereby amended to read as follows:
Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive
jurisdiction:
xxx
xxx
xxx
(8) In all other cases in which demand, exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and cots or the value of the property in controversy
exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro
Manila, where the demand, exclusive of the above-mentioned items exceeds Two hundred
Thousand pesos (P200,000.00). (Emphasis ours)
xxx
xxx
xxx
And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City, is
appropriate:
Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]
(a) xxx xxx xxx
(b) Personal actions. — All other actions may be commenced and tried where the
defendant or any of the defendants resides or may be found, or where the plaintiff or any
of the plaintiff resides, at the election of the plaintiff.
Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor
of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of the litigant.
Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and
obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient
forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting upon him needless
expense or disturbance. But unless the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be disturbed. 49
Weighing the relative claims of the parties, the court a quo found it best to hear the case in
the Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff
(private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi
Arabia where she no longer maintains substantial connections. That would have caused a
fundamental unfairness to her.
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Conflicts of Law
Addressing Conflict of Laws Problems
Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience
have been shown by either of the parties. The choice of forum of the plaintiff (now private
respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By
filing her Complaint and Amended Complaint with the trial court, private respondent has
voluntary submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several motions 50 praying for the
dismissal of Morada's Amended Complaint. SAUDIA also filed an Answer In Ex Abundante
Cautelam dated February 20, 1995. What is very patent and explicit from the motions filed, is
that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has
effectively submitted to the trial court's jurisdiction by praying for the dismissal of the
Amended Complaint on grounds other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.: 51
We observe that the motion to dismiss filed on April 14, 1962, aside from disputing the
lower court's jurisdiction over defendant's person, prayed for dismissal of the complaint on
the ground that plaintiff's cause of action has prescribed. By interposing such second
ground in its motion to dismiss, Ker and Co., Ltd. availed of an affirmative defense on the
basis of which it prayed the court to resolve controversy in its favor. For the court to
validly decide the said plea of defendant Ker & Co., Ltd., it necessarily had to acquire
jurisdiction upon the latter's person, who, being the proponent of the affirmative defense,
should be deemed to have abandoned its special appearance and voluntarily submitted
itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that;
When the appearance is by motion for the purpose of objecting to the jurisdiction of the
court over the person, it must be for the sole and separate purpose of objecting to the
jurisdiction of the court. If his motion is for any other purpose than to object to the
jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of
the court. A special appearance by motion made for the purpose of objecting to the
jurisdiction of the court over the person will be held to be a general appearance, if the
party in said motion should, for example, ask for a dismissal of the action upon the further
ground that the court had no jurisdiction over the subject matter. 52
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City.
Thus, we find that the trial court has jurisdiction over the case and that its exercise thereof,
justified.
As to the choice of applicable law, we note that 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. 53
Several theories have been propounded in order to identify the legal system that should
ultimately control. Although ideally, all choice-of-law theories should intrinsically advance both
notions of justice and predictability, they do not always do so. The forum is then faced with
the problem of deciding which of these two important values should be stressed. 54
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." 55 The purpose of "characterization" is to enable the
forum to select the proper law. 56
Our starting point of analysis here is not a legal relation, but a factual situation, event, or
operative fact. 57 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 a factual
relationship (such as property right, contract claim) and a connecting factor or point of
contact, such as the situs of the res, the place of celebration, the place of performance, or the
place of wrongdoing. 58
Note that one or more circumstances may be present to serve as the possible test for the
determination of the applicable law. 59 These "test factors" or "points of contact" or
"connecting factors" could be any of the following:
(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his
origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) 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;
(4) 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;
(5) 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;
(6) the intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis;
(7) 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
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Addressing Conflict of Laws Problems
(8) the flag of a 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. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including allegations in the Amended
Complaint deemed admitted for purposes of the motion to dismiss, we are convinced that
there is reasonable basis for private respondent's assertion that although she was already
working in Manila, petitioner brought her to Jeddah on the pretense that she would merely
testify in an investigation of the charges she made against the two SAUDIA crew members for
the attack on her person while they were in Jakarta. As it turned out, she was the one made
to face trial for very serious charges, including adultery and violation of Islamic laws and
tradition.
There is likewise logical basis on record for the claim that the "handing over" or "turning over"
of the person of private respondent to Jeddah officials, petitioner may have acted beyond its
duties as employer. Petitioner's purported act contributed to and amplified or even
proximately caused additional humiliation, misery and suffering of private respondent.
Petitioner thereby allegedly facilitated the arrest, detention and prosecution of private
respondent under the guise of petitioner's authority as employer, taking advantage of the
trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah,
the alleged conviction and imprisonment of private respondent was wrongful. But these
capped the injury or harm allegedly inflicted upon her person and reputation, for which
petitioner could be liable as claimed, to provide compensation or redress for the wrongs done,
once duly proven.
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 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 totality of the alleged injury to the person, reputation, social standing and human rights
of 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 61 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. 62
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, 63 raised by private respondent as plaintiff below against defendant (herein
petitioner), in our view, has been properly established.
Prescinding from this premise that the Philippines is the situs of the tort complained of and
the place "having the most interest in the problem", we find, by way of recapitulation, that the
Philippine law on tort liability should have paramount application to and control in the
resolution of the legal issues arising out of this case. Further, we hold that the respondent
Regional Trial Court has jurisdiction over the parties and the subject matter of the complaint;
the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover,
we find untenable petitioner's insistence that "[s]ince private respondent instituted this suit,
she has the burden of pleading and proving the applicable Saudi law on the matter." 64 As
aptly said by private respondent, she has "no obligation to plead and prove the law of the
Kingdom of Saudi Arabia since her cause of action is based on Articles 19 and 21" of the Civil
Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never
alleged that Saudi law should govern this case. And as correctly held by the respondent
appellate court, "considering that it was the petitioner who was invoking the applicability of
the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what
the law of Saudi Arabia is". 66
Lastly, no error could be imputed to the respondent appellate court in upholding the trial
court's denial of defendant's (herein petitioner's) motion to dismiss the case. Not only was
jurisdiction in order and venue properly laid, but appeal after trial was obviously available,
and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the
Philippines is the state intimately concerned with the ultimate outcome of the case below, not
just for the benefit of all the litigants, but also for the vindication of the country's system of
law and justice in a transnational setting. With these guidelines in mind, the trial court must
proceed to try and adjudge the case in the light of relevant Philippine law, with due
consideration of the foreign element or elements involved. Nothing said herein, of course,
should be construed as prejudging the results of the case in any manner whatsoever.
6
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Addressing Conflict of Laws Problems
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No. Q-9318394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is hereby REMANDED to Regional
Trial Court of Quezon City, Branch 89 for further proceedings.
SO ORDERED.
7
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Addressing Conflict of Laws Problems
G.R. No. 92013 July 25, 1990
I
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as Secretary of
Foreign Affairs, and CATALINO MACARAIG, as Executive Secretary, respondents.
The subject property in this case is one of the four (4) properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan on May 9,
1956, the other lots being:
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner,
vs.
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION TRUST CHAIRMAN RAMON
T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., as members of the PRINCIPAL AND
BIDDING COMMITTEES ON THE UTILIZATION/DISPOSITION PETITION OF PHILIPPINE
GOVERNMENT PROPERTIES IN JAPAN, respondents.
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area
of approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy
Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72
square meters and categorized as a commercial lot now being used as a warehouse and
parking lot for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a
residential lot which is now vacant.
GUTIERREZ, JR., J.:
These are two petitions for prohibition seeking to enjoin respondents, their representatives
and agents from proceeding with the bidding for the sale of the 3,179 square meters of land
at 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on February 21, 1990. We
granted the prayer for a temporary restraining order effective February 20, 1990. One of the
petitioners (in G.R. No. 92047) likewise prayes for a writ of mandamus to compel the
respondents to fully disclose to the public the basis of their decision to push through with the
sale of the Roppongi property inspire of strong public opposition and to explain the
proceedings which effectively prevent the participation of Filipino citizens and entities in the
bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on
March 13, 1990. After G.R. No. 92047, Ojeda v. Secretary Macaraig, et al. was filed, the
respondents were required to file a comment by the Court's resolution dated February 22,
1990. The two petitions were consolidated on March 27, 1990 when the memoranda of the
parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the respondents filed a motion
for an extension of thirty (30) days to file comment in G.R. No. 92047, followed by a second
motion for an extension of another thirty (30) days which we granted on May 8, 1990, a third
motion for extension of time granted on May 24, 1990 and a fourth motion for extension of
time which we granted on June 5, 1990 but calling the attention of the respondents to the
length of time the petitions have been pending. After the comment was filed, the petitioner in
G.R. No. 92047 asked for thirty (30) days to file a reply. We noted his motion and resolved to
decide the two (2) cases.
The properties and the capital goods and services procured from the Japanese government for
national development projects are part of the indemnification to the Filipino people for their
losses in life and property and their suffering during World War II.
The Reparations Agreement provides that reparations valued at $550 million would be payable
in twenty (20) years in accordance with annual schedules of procurements to be fixed by the
Philippine and Japanese governments (Article 2, Reparations Agreement). Rep. Act No. 1789,
the Reparations Law, prescribes the national policy on procurement and utilization of
reparations and development loans. The procurements are divided into those for use by the
government sector and those for private parties in projects as the then National Economic
Council shall determine. Those intended for the private sector shall be made available by sale
to Filipino citizens or to one hundred (100%) percent Filipino-owned entities in national
development projects.
The Roppongi property was acquired from the Japanese government under the Second Year
Schedule and listed under the heading "Government Sector", through Reparations Contract
No. 300 dated June 27, 1958. The Roppongi property consists of the land and building "for the
Chancery of the Philippine Embassy" (Annex M-D to Memorandum for Petitioner, p. 503). As
intended, it became the site of the Philippine Embassy until the latter was transferred to
Nampeidai on July 22, 1976 when the Roppongi building needed major repairs. Due to the
failure of our government to provide necessary funds, the Roppongi property has remained
undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to
Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a
8
Conflicts of Law
Addressing Conflict of Laws Problems
Japanese firm - Kajima Corporation — which shall construct two (2) buildings in Roppongi and
one (1) building in Nampeidai and renovate the present Philippine Chancery in Nampeidai. The
consideration of the construction would be the lease to the foreign corporation of one (1) of
the buildings to be constructed in Roppongi and the two (2) buildings in Nampeidai. The other
building in Roppongi shall then be used as the Philippine Embassy Chancery. At the end of the
lease period, all the three leased buildings shall be occupied and used by the Philippine
government. No change of ownership or title shall occur. (See Annex "B" to Reply to
Comment) The Philippine government retains the title all throughout the lease period and
thereafter. However, the government has not acted favorably on this proposal which is
pending approval and ratification between the parties. Instead, on August 11, 1986, President
Aquino created a committee to study the disposition/utilization of Philippine government
properties in Tokyo and Kobe, Japan through Administrative Order No. 3, followed by
Administrative Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens
or entities to avail of separations' capital goods and services in the event of sale, lease or
disposition. The four properties in Japan including the Roppongi were specifically mentioned in
the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been
pushing, with great vigor, its decision to sell the reparations properties starting with the
Roppongi lot. The property has twice been set for bidding at a minimum floor price of $225
million. The first bidding was a failure since only one bidder qualified. The second one, after
postponements, has not yet materialized. The last scheduled bidding on February 21, 1990
was restrained by his Court. Later, the rules on bidding were changed such that the $225
million floor price became merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R.
No. 92013 objects to the alienation of the Roppongi property to anyone while the petitioner in
G.R. No. 92047 adds as a principal objection the alleged unjustified bias of the Philippine
government in favor of selling the property to non-Filipino citizens and entities. These
petitions have been consolidated and are resolved at the same time for the objective is the
same - to stop the sale of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated by the Philippine
Government?; and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to
sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the
government to alienate the Roppongi property assails the constitutionality of Executive Order
No. 296 in making the property available for sale to non-Filipino citizens and entities. He also
questions the bidding procedures of the Committee on the Utilization or Disposition of
Philippine Government Properties in Japan for being discriminatory against Filipino citizens
and Filipino-owned entities by denying them the right to be informed about the bidding
requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots
were acquired as part of the reparations from the Japanese government for diplomatic and
consular use by the Philippine government. Vice-President Laurel states that the Roppongi
property is classified as one of public dominion, and not of private ownership under Article
420 of the Civil Code (See infra).
The petitioner submits that the Roppongi property comes under "property intended for public
service" in paragraph 2 of the above provision. He states that being one of public dominion,
no ownership by any one can attach to it, not even by the State. The Roppongi and related
properties were acquired for "sites for chancery, diplomatic, and consular quarters, buildings
and other improvements" (Second Year Reparations Schedule). The petitioner states that they
continue to be intended for a necessary service. They are held by the State in anticipation of
an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated, is outside the
commerce of man, or to put it in more simple terms, it cannot be alienated nor be the subject
matter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the
non-use of the Roppongi property at the moment, the petitioner avers that the same remains
property of public dominion so long as the government has not used it for other purposes nor
adopted any measure constituting a removal of its original purpose or use.
The respondents, for their part, refute the petitioner's contention by saying that the subject
property is not governed by our Civil Code but by the laws of Japan where the property is
located. They rely upon the rule of lex situs which is used in determining the applicable law
regarding the acquisition, transfer and devolution of the title to a property. They also invoke
Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of Justice which used
the lex situs in explaining the inapplicability of Philippine law regarding a property situated in
Japan.
The respondents add that even assuming for the sake of argument that the Civil Code is
applicable, the Roppongi property has ceased to become property of public dominion. It has
become patrimonial property because it has not been used for public service or for diplomatic
purposes for over thirteen (13) years now (Citing Article 422, Civil Code) and because the
intention by the Executive Department and the Congress to convert it to private use has been
9
Conflicts of Law
Addressing Conflict of Laws Problems
manifested by overt acts, such as, among others: (1) the transfer of the Philippine Embassy
to Nampeidai (2) the issuance of administrative orders for the possibility of alienating the four
government properties in Japan; (3) the issuance of Executive Order No. 296; (4) the
enactment by the Congress of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law]
on June 10, 1988 which contains a provision stating that funds may be taken from the sale of
Philippine properties in foreign countries; (5) the holding of the public bidding of the Roppongi
property but which failed; (6) the deferment by the Senate in Resolution No. 55 of the bidding
to a future date; thus an acknowledgment by the Senate of the government's intention to
remove the Roppongi property from the public service purpose; and (7) the resolution of this
Court dismissing the petition in Ojeda v. Bidding Committee, et al., G.R. No. 87478 which
sought to enjoin the second bidding of the Roppongi property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality
of Executive Order No. 296. He had earlier filed a petition in G.R. No. 87478 which the Court
dismissed on August 1, 1989. He now avers that the executive order contravenes the
constitutional mandate to conserve and develop the national patrimony stated in the Preamble
of the 1987 Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable lands of the public domain to
Filipino citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 of
Commonwealth Act 141).i•t•c-aüsl
(2) The preference for Filipino citizens in the grant of rights, privileges and concessions
covering the national economy and patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair competition and trade practices;
(4) The guarantee of the right of the people to information on all matters of public concern
(Section 7, Article III, Constitution);
few days before the scheduled bidding), the bidding guidelines are available only in Tokyo,
and the accomplishment of requirements and the selection of qualified bidders should be done
in Tokyo, interested Filipino citizens or entities owned by them did not have the chance to
comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shall be sold
for a minimum price of $225 million from which price capital gains tax under Japanese law of
about 50 to 70% of the floor price would still be deducted.
IV
The petitioners and respondents in both cases do not dispute the fact that the Roppongi site
and the three related properties were through reparations agreements, that these were
assigned to the government sector and that the Roppongi property itself was specifically
designated under the Reparations Agreement to house the Philippine Embassy.
The nature of the Roppongi lot as property for public service is expressly spelled out. It is
dictated by the terms of the Reparations Agreement and the corresponding contract of
procurement which bind both the Philippine government and the Japanese government.
There can be no doubt that it is of public dominion unless it is convincingly shown that the
property has become patrimonial. This, the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be
alienated. Its ownership is a special collective ownership for general use and enjoyment, an
application to the satisfaction of collective needs, and resides in the social group. The purpose
is not to serve the State as a juridical person, but the citizens; it is intended for the common
and public welfare and cannot be the object of appropration. (Taken from 3 Manresa, 66-69;
cited in Tolentino, Commentaries on the Civil Code of the Philippines, 1963 Edition, Vol. II, p.
26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion or of private ownership.
(5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned by
Filipino citizens of capital goods received by the Philippines under the Reparations Act
(Sections 2 and 12 of Rep. Act No. 1789); and
ART. 420. The following things are property of public dominion
(6) The declaration of the state policy of full public disclosure of all transactions involving
public interest (Section 28, Article III, Constitution).
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks shores roadsteads, and others of
similar character;
Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional
executive order is a misapplication of public funds He states that since the details of the
bidding for the Roppongi property were never publicly disclosed until February 15, 1990 (or a
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national wealth.
10
Conflicts of Law
Addressing Conflict of Laws Problems
ART. 421. All other property of the State, which is not of the character stated
in the preceding article, is patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code
as property belonging to the State and intended for some public service.
Has the intention of the government regarding the use of the property been changed because
the lot has been Idle for some years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time for actual Embassy service
does not automatically convert it to patrimonial property. Any such conversion happens only if
the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66
SCRA 481 [1975]). A property continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal declaration on the part of the
government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335
[1960]).
The respondents enumerate various pronouncements by concerned public officials insinuating
a change of intention. We emphasize, however, that an abandonment of the intention to use
the Roppongi property for public service and to make it patrimonial property under Article 422
of the Civil Code must be definite Abandonment cannot be inferred from the non-use alone
specially if the non-use was attributable not to the government's own deliberate and
indubitable will but to a lack of financial support to repair and improve the property (See Heirs
of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must be a certain and
positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose. Even the failure by the government to repair the
building in Roppongi is not abandonment since as earlier stated, there simply was a shortage
of government funds. The recent Administrative Orders authorizing a study of the status and
conditions of government properties in Japan were merely directives for investigation but did
not in any way signify a clear intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a
provision in its text expressly authorizing the sale of the four properties procured from Japan
for the government sector. The executive order does not declare that the properties lost their
public character. It merely intends to make the properties available to foreigners and not to
Filipinos alone in case of a sale, lease or other disposition. It merely eliminates the restriction
under Rep. Act No. 1789 that reparations goods may be sold only to Filipino citizens and one
hundred (100%) percent Filipino-owned entities. The text of Executive Order No. 296
provides:
Section 1. The provisions of Republic Act No. 1789, as amended, and of other
laws to the contrary notwithstanding, the above-mentioned properties can be
made available for sale, lease or any other manner of disposition to nonFilipino citizens or to entities owned by non-Filipino citizens.
Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi and
the three other properties were earlier converted into alienable real properties. As earlier
stated, Rep. Act No. 1789 differentiates the procurements for the government sector and the
private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private sector properties can
be sold to end-users who must be Filipinos or entities owned by Filipinos. It is this nationality
provision which was amended by Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources of
funds for its implementation, the proceeds of the disposition of the properties of the
Government in foreign countries, did not withdraw the Roppongi property from being classified
as one of public dominion when it mentions Philippine properties abroad. Section 63 (c) refers
to properties which are alienable and not to those reserved for public use or service. Rep Act
No. 6657, therefore, does not authorize the Executive Department to sell the Roppongi
property. It merely enumerates possible sources of future funding to augment (as and when
needed) the Agrarian Reform Fund created under Executive Order No. 299. Obviously any
property outside of the commerce of man cannot be tapped as a source of funds.
The respondents try to get around the public dominion character of the Roppongi property by
insisting that Japanese law and not our Civil Code should apply.
It is exceedingly strange why our top government officials, of all people, should be the ones to
insist that in the sale of extremely valuable government property, Japanese law and not
Philippine law should prevail. The Japanese law - its coverage and effects, when enacted, and
exceptions to its provision — is not presented to the Court It is simply asserted that the lex
loci rei sitae or Japanese law should apply without stating what that law provides. It is a ed on
faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no conflict of law situation
exists. A conflict of law situation arises only when: (1) There is a dispute over the title or
ownership of an immovable, such that the capacity to take and transfer immovables, the
formalities of conveyance, the essential validity and effect of the transfer, or the interpretation
and effect of a conveyance, are to be determined (See Salonga, Private International Law,
1981 ed., pp. 377-383); and (2) A foreign law on land ownership and its conveyance is
asserted to conflict with a domestic law on the same matters. Hence, the need to determine
which law should apply.
In the instant case, none of the above elements exists.
11
Conflicts of Law
Addressing Conflict of Laws Problems
The issues are not concerned with validity of ownership or title. There is no question that the
property belongs to the Philippines. The issue is the authority of the respondent officials to
validly dispose of property belonging to the State. And the validity of the procedures adopted
to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the
lex situs rule is misplaced. The opinion does not tackle the alienability of the real properties
procured through reparations nor the existence in what body of the authority to sell them. In
discussing who are capable of acquiring the lots, the Secretary merely explains that it is the
foreign law which should determine who can acquire the properties so that the constitutional
limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly
owned by Filipinos is inapplicable. We see no point in belaboring whether or not this opinion is
correct. Why should we discuss who can acquire the Roppongi lot when there is no showing
that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of the recommendation by
the investigating committee to sell the Roppongi property was premature or, at the very least,
conditioned on a valid change in the public character of the Roppongi property. Moreover, the
approval does not have the force and effect of law since the President already lost her
legislative powers. The Congress had already convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of
public dominion, there is another obstacle to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides
Section 79 (f ) Conveyances and contracts to which the Government is a party. — In cases
in which the Government of the Republic of the Philippines is a party to any deed or other
instrument conveying the title to real estate or to any other property the value of which is
in excess of one hundred thousand pesos, the respective Department Secretary shall
prepare the necessary papers which, together with the proper recommendations, shall be
submitted to the Congress of the Philippines for approval by the same. Such deed,
instrument, or contract shall be executed and signed by the President of the Philippines on
behalf of the Government of the Philippines unless the Government of the Philippines
unless the authority therefor be expressly vested by law in another officer. (Emphasis
supplied)
The requirement has been retained in Section 48, Book I of the Administrative Code of 1987
(Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real Property. — Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic of the Philippines, by
the President, unless the authority therefor is expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the name of any
political subdivision or of any corporate agency or instrumentality, by the executive head
of the agency or instrumentality. (Emphasis supplied)
It is not for the President to convey valuable real property of the government on his or her
own sole will. Any such conveyance must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of
the Roppongi property does not withdraw the property from public domain much less
authorize its sale. It is a mere resolution; it is not a formal declaration abandoning the public
character of the Roppongi property. In fact, the Senate Committee on Foreign Relations is
conducting hearings on Senate Resolution No. 734 which raises serious policy considerations
and calls for a fact-finding investigation of the circumstances behind the decision to sell the
Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon
the constitutionality of Executive Order No. 296. Contrary to respondents' assertion, we did
not uphold the authority of the President to sell the Roppongi property. The Court stated that
the constitutionality of the executive order was not the real issue and that resolving the
constitutional question was "neither necessary nor finally determinative of the case." The
Court noted that "[W]hat petitioner ultimately questions is the use of the proceeds of the
disposition of the Roppongi property." In emphasizing that "the decision of the Executive to
dispose of the Roppongi property to finance the CARP ... cannot be questioned" in view of
Section 63 (c) of Rep. Act No. 6657, the Court did not acknowledge the fact that the property
became alienable nor did it indicate that the President was authorized to dispose of the
Roppongi property. The resolution should be read to mean that in case the Roppongi property
is re-classified to be patrimonial and alienable by authority of law, the proceeds of a sale may
be used for national economic development projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed
1990 sale of the Roppongi property. We are resolving the issues raised in these petitions, not
the issues raised in 1989.
12
Conflicts of Law
Addressing Conflict of Laws Problems
Having declared a need for a law or formal declaration to withdraw the Roppongi property
from public domain to make it alienable and a need for legislative authority to allow the sale
of the property, we see no compelling reason to tackle the constitutional issues raised by
petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions unless these questions are
properly raised in appropriate cases and their resolution is necessary for the determination of
the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional
question although properly presented by the record if the case can be disposed of on some
other ground such as the application of a statute or general law (Siler v. Louisville and
Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v. Pullman Co., 312 U.S. 496
[1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
The Roppongi property is not just like any piece of property. It was given to the Filipino
people in reparation for the lives and blood of Filipinos who died and suffered during the
Japanese military occupation, for the suffering of widows and orphans who lost their loved
ones and kindred, for the homes and other properties lost by countless Filipinos during the
war. The Tokyo properties are a monument to the bravery and sacrifice of the Filipino
people in the face of an invader; like the monuments of Rizal, Quezon, and other Filipino
heroes, we do not expect economic or financial benefits from them. But who would think
of selling these monuments? Filipino honor and national dignity dictate that we keep our
properties in Japan as memorials to the countless Filipinos who died and suffered. Even if
we should become paupers we should not think of selling them. For it would be as if we
sold the lives and blood and tears of our countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese government in
atonement for its past belligerence for the valiant sacrifice of life and limb and for deaths,
physical dislocation and economic devastation the whole Filipino people endured in World
War II.
It is for what it stands for, and for what it could never bring back to life, that its
significance today remains undimmed, inspire of the lapse of 45 years since the war
ended, inspire of the passage of 32 years since the property passed on to the Philippine
government.
Roppongi is a reminder that cannot — should not — be dissipated ... (Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so much because of the inflated
prices fetched by real property in Tokyo but more so because of its symbolic value to all
Filipinos — veterans and civilians alike. Whether or not the Roppongi and related properties
will eventually be sold is a policy determination where both the President and Congress must
concur. Considering the properties' importance and value, the laws on conversion and
disposition of property of public dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition
is issued enjoining the respondents from proceeding with the sale of the Roppongi property in
Tokyo, Japan. The February 20, 1990 Temporary Restraining Order is made PERMANENT. SO
ORDERED.
13
Conflicts of Law
Addressing Conflict of Laws Problems
G.R. No. 149177
November 23, 2007
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD.,
Vs.
MINORU KITAMURA,
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the April 18, 2001 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 60827,
and the July 25, 2001 Resolution[2] denying the motion for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a
Japanese consultancy firm providing technical and management support in the infrastructure
projects of foreign governments,[3] entered into an Independent Contractor Agreement (ICA)
with respondent Minoru Kitamura, a Japanese national permanently residing in the
Philippines.[4] The agreement provides that respondent was to extend professional services to
Nippon for a year starting on April 1, 1999.[5] Nippon then assigned respondent to work as the
project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines,
following the company's consultancy contract with the Philippine Government.[6]
When the STAR Project was near completion, the Department of Public Works and
Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time
for the detailed engineering and construction supervision of the Bongabon-Baler Road
Improvement (BBRI) Project.[7] Respondent was named as the project manager in the
contract's Appendix 3.1.[8]
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its
International Division, informed respondent that the company had no more intention of
automatically renewing his ICA. His services would be engaged by the company only up to the
substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's
expiry.[9]
Threatened with impending unemployment, respondent, through his lawyer, requested
a negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted
that respondents contract was for a fixed term that had already expired, and refused to
negotiate for the renewal of the ICA.[10]
As he was not able to generate a positive response from the petitioners, respondent
consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and
damages with the Regional Trial Court of Lipa City.[11]
For their part, petitioners, contending that the ICA had been perfected in Japan and
executed by and between Japanese nationals, moved to dismiss the complaint for lack of
jurisdiction. They asserted that the claim for improper pre-termination of respondent's ICA could
only be heard and ventilated in the proper courts of Japan following the principles of lex loci
celebrationis and lex contractus.[12]
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the
replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI Project.[13]
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank[14] that
matters connected with the performance of contracts are regulated by the law prevailing at the
place of performance,[15] denied the motion to dismiss.[16]
The
trial
court
subsequently denied petitioners' motion for reconsideration,[17] prompting them to file with
the appellate court, on August 14, 2000, their first Petition for Certiorari under Rule 65
[docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000, the CA resolved to dismiss the
petition on procedural grounds for lack of statement of material dates and for insufficient
verification and certification against forum shopping.[19] An Entry of Judgment was later issued
by the appellate court on September 20, 2000.[20]
Aggrieved by this development, petitioners filed with the CA, on September 19, 2000,
still within the reglementary period, a second Petition for Certiorari under Rule 65 already
stating therein the material dates and attaching thereto the proper verification and certification.
This second petition, which substantially raised the same issues as those in the first, was
docketed as CA-G.R. SP No. 60827.[21]
Ruling on the merits of the second petition, the appellate court rendered the assailed
April 18, 2001 Decision[22] finding no grave abuse of discretion in the trial court's denial of the
motion to dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was
not applicable to the case, because nowhere in the pleadings was the validity of the written
agreement put in issue. The CA thus declared that the trial court was correct in applying instead
the principle of lex loci solutionis.[23]
Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed
July 25, 2001 Resolution.[24]
Remaining steadfast in their stance despite the series of denials, petitioners instituted
the instant Petition for Review on Certiorari[25] imputing the following errors to the appellate
court:
A.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
THE TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT
CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER OF
THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO
JAPANESE NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND
EXECUTED IN TOKYO, JAPAN.
14
Conflicts of Law
Addressing Conflict of Laws Problems
B.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF
LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE
INTERNATIONAL LAWS.[26]
The pivotal question that this Court is called upon to resolve is whether the subject
matter jurisdiction of Philippine courts in civil cases for specific performance and damages
involving contracts executed outside the country by foreign nationals may be assailed on the
principles of lex loci celebrationis, lex contractus, the state of the most significant relationship
rule, or forum non conveniens.
However, before ruling on this issue, we must first dispose of the procedural matters
raised by the respondent.
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No.
60205 has already barred the filing of the second petition docketed as CA-G.R. SP No. 60827
(fundamentally raising the same issues as those in the first one) and the instant petition for
review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the
petition's defective certification of non-forum shopping, it was a dismissal without prejudice.[27]
The same holds true in the CA's dismissal of the said case due to defects in the formal
requirement of verification[28] and in the other requirement in Rule 46 of the Rules of Court on
the statement of the material dates.[29] The dismissal being without prejudice, petitioners can
re-file the petition, or file a second petition attaching thereto the appropriate verification and
certification as they, in fact did and stating therein the material dates, within the prescribed
period[30] in Section 4, Rule 65 of the said Rules.[31]
The dismissal of a case without prejudice signifies the absence of a decision on the
merits and leaves the parties free to litigate the matter in a subsequent action as though the
dismissed action had not been commenced. In other words, the termination of a case not on
the merits does not bar another action involving the same parties, on the same subject matter
and theory.[32]
Necessarily, because the said dismissal is without prejudice and has no res judicata
effect, and even if petitioners still indicated in the verification and certification of the second
certiorari petition that the first had already been dismissed on procedural grounds,[33]
petitioners are no longer required by the Rules to indicate in their certification of non-forum
shopping in the instant petition for review of the second certiorari petition, the status of the
aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum
shopping about any event that will not constitute res judicata and litis pendentia, as in the
present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire
proceedings, considering that the evils sought to be prevented by the said certificate are no
longer present.[34]
The Court also finds no merit in respondent's contention that petitioner Hasegawa is
only authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the
CA and not the instant petition. True, the Authorization[35] dated September 4, 2000, which is
attached to the second certiorari petition and which is also attached to the instant petition for
review, is limited in scope its wordings indicate that Hasegawa is given the authority to sign for
and act on behalf of the company only in the petition filed with the appellate court, and that
authority cannot extend to the instant petition for review.[36] In a plethora of cases, however,
this Court has liberally applied the Rules or even suspended its application whenever a
satisfactory explanation and a subsequent fulfillment of the requirements have been made.[37]
Given that petitioners herein sufficiently explained their misgivings on this point and appended
to their Reply[38] an updated Authorization[39] for Hasegawa to act on behalf of the company
in the instant petition, the Court finds the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the defect in the
verification and certification. As respondent pointed out, and to which we agree, Hasegawa is
truly not authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000
Authorization and even the subsequent August 17, 2001 Authorization were issued only by
Nippon's president and chief executive officer, not by the company's board of directors. In not
a few cases, we have ruled that corporate powers are exercised by the board of directors; thus,
no person, not even its officers, can bind the corporation, in the absence of authority from the
board.[40] Considering that Hasegawa verified and certified the petition only on his behalf and
not on behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office
of the Ombudsman.[41] Substantial compliance will not suffice in a matter that demands strict
observance of the Rules.[42] While technical rules of procedure are designed not to frustrate
the ends of justice, nonetheless, they are intended to effect the proper and orderly disposition
of cases and effectively prevent the clogging of court dockets.[43]
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to
question the trial court's denial of their motion to dismiss. It is a well-established rule that an
order denying a motion to dismiss is interlocutory, and cannot be the subject of the
extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer
and to interpose as defenses the objections raised in the motion, to proceed to trial, and, in
case of an adverse decision, to elevate the entire case by appeal in due course.[44] While there
are recognized exceptions to this rule,[45] petitioners' case does not fall among them.
This brings us to the discussion of the substantive issue of the case.
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its
jurisdiction to hear and resolve the civil case for specific performance and damages filed by the
respondent. The ICA subject of the litigation was entered into and perfected in Tokyo, Japan,
by Japanese nationals, and written wholly in the Japanese language. Thus, petitioners posit that
15
Conflicts of Law
Addressing Conflict of Laws Problems
local courts have no substantial relationship to the parties[46] following the [state of the] most
significant relationship rule in Private International Law.[47]
The Court notes that petitioners adopted an additional but different theory when they
elevated the case to the appellate court. In the Motion to Dismiss[48] filed with the trial court,
petitioners never contended that the RTC is an inconvenient forum. They merely argued that
the applicable law which will determine the validity or invalidity of respondent's claim is that of
Japan, following the principles of lex loci celebrationis and lex contractus.[49] While not
abandoning this stance in their petition before the appellate court, petitioners on certiorari
significantly invoked the defense of forum non conveniens.[50] On petition for review before
this Court, petitioners dropped their other arguments, maintained the forum non conveniens
defense, and introduced their new argument that the applicable principle is the [state of the]
most significant relationship rule.[51]
prescribed by law.[58] It is further determined by the allegations of the complaint irrespective
of whether the plaintiff is entitled to all or some of the claims asserted therein.[59] To succeed
in its motion for the dismissal of an action for lack of jurisdiction over the subject matter of the
claim,[60] the movant must show that the court or tribunal cannot act on the matter submitted
to it because no law grants it the power to adjudicate the claims.[61]
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial
court is not properly vested by law with jurisdiction to hear the subject controversy for, indeed,
Civil Case No. 00-0264 for specific performance and damages is one not capable of pecuniary
estimation and is properly cognizable by the RTC of Lipa City.[62] What they rather raise as
grounds to question subject matter jurisdiction are the principles of lex loci celebrationis and
lex contractus, and the state of the most significant relationship rule.
The Court finds the invocation of these grounds unsound.
Be that as it may, this Court is not inclined to deny this petition merely on the basis of
the change in theory, as explained in Philippine Ports Authority v. City of Iloilo.[52] We only
pointed out petitioners' inconstancy in their arguments to emphasize their incorrect assertion
of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts problems, three consecutive phases
are involved: jurisdiction, choice of law, and recognition and enforcement of judgments.
Corresponding to these phases are the following questions: (1) Where can or should litigation
be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be
enforced?[53]
Analytically, jurisdiction and choice of law are two distinct concepts.[54] Jurisdiction
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. The power to exercise jurisdiction does not automatically give a
state constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori
will often coincide, the minimum contacts for one do not always provide the necessary significant
contacts for the other.[55] The question of whether the law of a state can be applied to a
transaction is different from the question of whether the courts of that state have jurisdiction
to enter a judgment.[56]
In this case, only the first phase is at issue jurisdiction. Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a controversy, it must
have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over
the subject matter, over the issues of the case and, in cases involving property, over the res or
the thing which is the subject of the litigation.[57] In assailing the trial court's jurisdiction
herein, petitioners are actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign
authority which establishes and organizes the court. It is given only by law and in the manner
Lex loci celebrationis relates to the law of the place of the ceremony[63] or the law of
the place where a contract is made.[64] The doctrine of lex contractus or lex loci contractus
means the law of the place where a contract is executed or to be performed.[65] It controls the
nature, construction, and validity of the contract[66] and it may pertain to the law voluntarily
agreed upon by the parties or the law intended by them either expressly or implicitly.[67] Under
the state of the most significant relationship rule, to ascertain what state law to apply to a
dispute, the court should determine which state has the most substantial connection to the
occurrence and the parties. In a case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the domicile, place of business,
or place of incorporation of the parties.[68] This rule takes into account several contacts and
evaluates them according to their relative importance with respect to the particular issue to be
resolved.[69]
Since these three principles in conflict of laws make reference to the law applicable to a
dispute, they are rules proper for the second phase, the choice of law.[70] They determine
which state's law is to be applied in resolving the substantive issues of a conflicts problem.[71]
Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only
inapplicable but also not yet called for.
Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact
that they have not yet pointed out any conflict between the laws of Japan and ours. Before
determining which law should apply, first there should exist a conflict of laws situation requiring
the application of the conflict of laws rules.[72] Also, when the law of a foreign country is
invoked to provide the proper rules for the solution of a case, the existence of such law must
be pleaded and proved.[73]
It should be noted that when a conflicts case, one involving a foreign element, is brought
before a court or administrative agency, there are three alternatives open to the latter in
disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume
16
Conflicts of Law
Addressing Conflict of Laws Problems
jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of
the forum; or (3) assume jurisdiction over the case and take into account or apply the law of
some other State or States.[74] The courts power to hear cases and controversies is derived
from the Constitution and the laws. While it may choose to recognize laws of foreign nations,
the court is not limited by foreign sovereign law short of treaties or other formal agreements,
even in matters regarding rights provided by foreign sovereigns.
Neither can the other ground raised, forum non conveniens, be used to deprive the trial court
of its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section
1, Rule 16 of the Rules of Court does not include it as a ground. Second, whether a suit should
be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of
the particular case and is addressed to the sound discretion of the trial court. In this case, the
RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this
principle requires a factual determination; hence, this conflicts principle is more properly
considered a matter of defense.
Accordingly, since the RTC is vested by law with the power to entertain and hear the
civil case filed by respondent and the grounds raised by petitioners to assail that jurisdiction
are inappropriate, the trial and appellate courts correctly denied the petitioners motion to
dismiss.
WHEREFORE, premises considered, the petition for review on certiorari is DENIED. SO
ORDERED.
17
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