CADALIN ET AL VS.

POEA ET AL 1 comment
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, and the rest of 1,767 NAMEDCOMPLAINANTS, thru and by their Attorney-in-fact, Atty. GERARDO A. DEL MUNDOvs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATIONS ADMINISTRATOR, NLRC, BROWN & ROOT INT ERNATIONAL, INC. AND/OR ASIA INTERNATIONAL BUILDERS CORPORATION GRN 104776, December 5,1994. FACTS:

This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in the Supreme Court for Certiorari. On June 6, 1984, Cadalin, Amul and Evangelista, in their own behalf and on behalf of 728 other OCWs instituted a class suit by filing an Amended Complaint with the POEA for money claims arising from their recruitment by ASIA INTERNATIONAL BUILDERS CORPORATION (AIBC) and employment by BROWN & ROOT INTERNATIONAL, INC (BRI) which is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; while AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino workers for overseas employment on behalf of its foreign principals. The amended complaint sought the payment of the unexpired portion of the employment contracts, which was terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and Reserved Fund; interest on all the unpaid benefits; area wage and salary differential pay; fringe benefits; reimbursement of SSS and premium not remitted to the SSS; refund of withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the suspension of the license of AIBC and the accreditation of BRII On October 2, 1984, the POEA Administrator denied the Motion to Strike Out of the Records filed by AIBC but required the claimants to correct the deficiencies in the complaint pointed out. AIB and BRII kept on filing Motion for Extension of Time to file their answer. The POEA kept on granting such motions. On November 14, 1984, claimants filed an opposition to the motions for extension of time and asked that AIBC and BRII declared in default for failure to file their answers. On December 27, 1984, the POEA Administrator issued an order directing AIBC and BRII to file their answers within ten days from receipt of the order. (at madami pang motions ang na-file, new complainants joined the case, ang daming inavail na remedies ng both parties) On June 19, 1987, AIBC finally submitted its answer to the complaint. At the same hearing, the parties were given a period of 15 days from said date within which to submit their respective position papers. On February 24, 1988, AIBC and BRII submitted position paper. On October 27, 1988, AIBC and BRII filed a Consolidated Reply, POEA Adminitartor rendered his decision whic h awarded the amount of $824, 652.44 in favor of only 324 complainants. Claimants submitted their Appeal Memorandum For Partial Appeal from the decision of the POEA. AIBC also filed its MR and/or appeal in addition to the Notice of Appeal filed earli er. NLRC promulgated its Resolution, modifying the decision of the POEA. The resolution removed some of the benefits awarded in favor of the claimants. NLRC denied all the MRs. Hence, these petitions filed by the claimants and by AlBC and BRII. The case rooted from the Labor Law enacted by Bahrain where most of the complainants were deployed. His Majesty Ise Bin Selman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23 on June 16, 1176, otherwise known re the Labour Law for the Private Sector. Some of the provision of Amiri Decree No. 23 that are relevant to the claims of the complainants-appellants are as follows: Art. 79: x x x A worker shall receive payment for each extra hour equivalent to his wage entitlement increased by a minimum of twenty-rive per centurn thereof for hours worked during the day; and by a minimum off fifty per centurn thereof for hours worked during the night which shall be deemed to being from seven oclock in the evening until seven oclock in the morning . Art. 80: Friday shall be deemed to be a weekly day of rest on full pay. If employee worked, 150% of his normal wage shall be paid to him x x x. Art. 81; x x x When conditions of work require the worker to work on any official holiday, he shall be paid an additional sum equivalent to 150% of his normal wage. Art. 84: Every worker who has completed one years continuous service with his employer shall be entitled to Laos on full pay for a period of not less than 21 days for each year increased to a period not less than 28 days after five continuous years of serv ice. A worker shall be entitled to such leave upon a quantum meruit in respect of the proportion of his service in that year. Art. 107: A contract of employment made for a period of indefinite duration may be terminated by either party thereto after giving the other party prior notice before such termination, in writing, in respect of monthly paid workers and fifteen days notice in

respect of other workers. The party terminating a contract without the required notice shall pay to the other party compensation equivalent to the amount of wages payable to the worker for the period of such notice or the unexpired portion thereof. Art. Ill: x x x the employer concerned shall pay to such worker, upon termination of employment, a leaving indemnity for the period of his employment calculated on the basis of fifteen days wages for each year of the first three years of service and of one months wages for each year of service thereafter. Such worker shall be entitled to payment of leaving indemnity upon a quantum meruit in proportion to the period of his service completed within a year. ISSUE: 1. WON the foreign law should govern or the contract of the parties.(WON the complainants who have worked in Bahrain are entitled to the above-mentioned benefits provided by Amiri Decree No. 23 of Bahrain). 2. WON the Bahrain Law should apply in the case. (Assuming it is applicable WON complainants claim for the benefits provided therein have prescribed.) 3. Whether or not the instant cases qualify as; a class suit (siningit ko nalang) (the rest of the issues in the full text of the case refer to Labor Law) RULING: 1. NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence governing the pleading and proof of a foreign law and admitted in evidence a simple copy of the Bah rains Amiri Decree No. 23 of 1976 (Labour Law for the Private Sector). NLRC applied the Amiri Deere, No. 23 of 1976, which provides for greater benefits than those stipulated in the overseasemployment contracts of the claimants. It was of the belief that where the laws of the host country are more favorable and beneficial to the workers, then the laws of the host country shall form part of the overseas employment contract. It approved the observation of the POEA Administrator that in labor proceedings, all doubts in the implementation of the provisions of the Labor Code and its implementing regulations shall be resolved in favor of labor. The overseas-employment contracts, which were prepared by AIBC and BRII themselves, provided that the laws of the host country became applicable to said contracts if they offer terms and conditions more favorable than those stipulated therein. However there was a part of the employment contract which provides that the compensation of the employee may be adjusted downward so that the total computation plus the non-waivable benefits shall be equivalent to the compensation therein agree, another part of the same provision categorically states that total remuneration and benefits do not fall below that of the host country r egulation and custom. Any ambiguity in the overseas-employment contracts should be interpreted against AIBC and BRII, the parties that drafted it. Article 1377 of the Civil Code of the Philippines provides: The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. Said rule of interpretation is applicable to contracts of adhesion where there is already a prepared form containing the stipulations of the employment contract and the employees merely take it or leave it. The presumption is that there was an imposition by one party against the other and that the employees signed the contracts out of necessity that reduced their bargaining power. We read the overseas employment contracts in question as adopting the provisions of the Amiri Decree No. 23 of 1976 as part and parcel thereof. The parties to a contract may select the law by which it is to be governed. In such a case, the foreign law is adopted as a system to regulate the relations of the parties, including questions of their capacity to enter into the contract, the formalities to be observed by them, matters of performance, and so forth. Instead of adopting the entire mass of the foreign law, the parties may just agree that specific provis ions of a foreign statute shall be deemed incorporated into their contract as a set of terms. By such reference to the provisions of the foreign law, the contract does not become a foreign contract to be governed by the foreign law. The said law does not operate as a statute but as a set of contractual terms deemed written in the contract. A basic policy of contract is to protect the expectation of the parties. Such party expectation is protected by giving effect to the parties own choice of the applicab le law. The choice of law must, however, bear some relationship the parties or their transaction. There is no question that the contracts sought to be enforced by claimants have a direct connection with the Bahrain law because the services were rendered in that country. 2. NLRC ruled that the prescriptive period for the filing of the claims of the complainants was 3 years, as provided in Article 291 of the Labor Code of the Philippines, and not ten years as provided in Article 1144 of the Civil Code of the Philippines nor one year as provided in the Amiri Decree No. 23 of 1976. Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the date of the expiry of the Contract. As a general rule, a foreign procedural law will not be applied in the forum (local court), Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law.

A law on prescription of actions is sui generis (of its own kind) in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on the characterization given such a law. In Bournias v. Atlantic Maritime Company (220 F. 2d. 152, 2d Cir. [1955]), where the issue was the applicability of the Panama Labor Code in a case filed in the State of New York for claims arising from said Code, the claims would have prescribed under the Panamanian Law but not under the Statute of Limitations of New York. The U.S. Circuit Court of Appeals held that the Panamanian Law was procedural as i t was not specifically intended to be substantive, hence, the prescriptive period provided in the law of the forum should apply. The Court observed: . . . we are dealing with a statute of limitations of a foreign country, and it is not clear on the face of the statute that its purpose was to limit the enforceability, outside as well as within the foreign country concerned, of the substantive rights to which the statute pertains. We think that as a yardstick for determining whether that was the purpose, this test is the most satisfactory one. The Court further noted: Applying that test here it appears to us that the libellant is entitled to succeed, for the respond ents have failed to satisfy us that the Panamanian period of limitation in question was specifically aimed against the particular rights which the libellant seeks to enforce. The Panama Labor Code is a statute having broad objectives. The American court applied the statu te of limitations of New York, instead of the Panamanian law, after finding that there was no showing that the Panamanian law on prescription was intended to be substantive. Being considered merely a procedural law even in Panama, it has to give way to the law of the forum (local Court) on prescription of actions. However the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum (local Court) has a borrowing statute. Said statute has the practical effect of treating the foreign statute of limitation as one of substance. A borrowing statute directs the state of the forum (local Court) to apply the foreign statute of limitations to the pending claims based on a foreign law. While there are several kinds of borrowing statutes, one form provides that an actio n barred by the laws of the place where it accrued will not be enforced in the forum even though the local statute was not run against it. Section 48 of Code of Civil Procedure is of this kind. It provides: If by the laws of the state or country where the cause o f action arose, the action is barred, it is also barred in the Philippine Islands. Section 48 has not been repealed or amended by the Civil Code of the Philippines. In the light of the 1987 Constitution, howe ver, Section 48 cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976. The courts of the forum (local Court) will not enforce any foreign claim obnoxious to the forums public policy. To enforce t he oneyear prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor. In the Declaration of Principles and State Policies, the 1987 Constitution emphasized that:The state shall pr omote social justice in all phases of national development (Sec. 10). The state affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare (Sec. 18). In Article XIII on Social Justice and Human Rights, the 1987 Constitution provides: Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full emp loyment and equality of employment opportunities for all. Thus, the applicable law on prescription is the Philippine law. The next question is whether the prescriptive period governing the filing of the claims is 3 years, as provided by the Labor Code or 10 years, as provided by the Civil Code of the Philippines. Article 1144 of the Civil Code of the Philippines provides: The following actions must be brought within ten years from the time the right of action accross: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment In this case, the claim for pay differentials is primarily anchored on the written contracts between the litigants, the ten-year prescriptive period provided by Art. 1144(l) of the New Civil Code should govern. 3. NO. A class suit is proper where the subject matter of the controversy is one of common or general interest to many and the parties are so numerous that it is impracticable to bring them all before the court. When all the claims are for benefits granted under the Bahrain law many of the claimants worked outside Bahrain. Some of the claimants were deployed in Indonesia under different terms and condition of employment. Inasmuch as the First requirement of a class suit is not present (common or general interest based on the Amiri Decree of the State of Bahrain), it is only logical that only those who worked in Bahrain shall be entitled to rile their claims in a class suit. While there are common defendants (AIBC and BRII) and the nature of the claims is the same (for employees be nefits), there is no common question of law or fact. While some claims are based on the Amiri Law of Bahrain, many of the claimants never worked in that country, but were deployed elsewhere. Thus, each claimant is interested only in his own demand and not in the claims of the other employees of defendants. A claimant has no concern in protecting the interests of the other claimants as shown by the fact,

that hundreds of them have abandoned their co-claimants and have entered into separate compromise settlements of their respective claims. The claimants who worked in Bahrain can not be allowed to sue in a class suit in a judicial proceeding. WHEREFORE, all the three petitioners are DISMISSED.

G.R. No. L-104776 December 5, 1994 BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, and the rest of 1,767 NAMED-COMPLAINANTS, thru and by their Attorney-in-fact, Atty. GERARDO A. DEL MUNDO, petitioners, vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION'S ADMINISTRATOR, NATIONAL LABOR RELATIONS COMMISSION, BROWN & ROOT INTERNATIONAL, INC. AND/OR ASIA INTERNATIONAL BUILDERS CORPORATION, respondents. G.R. Nos. 104911-14 December 5, 1994 BIENVENIDO M. CADALIN, ET AL., petitioners, vs. HON. NATIONAL LABOR RELATIONS COMMISSION, BROWN & ROOT INTERNATIONAL, INC. and/or ASIA INTERNATIONAL BUILDERS CORPORATION, respondents. G.R. Nos. 105029-32 December 5, 1994 ASIA INTERNATIONAL BUILDER CORPORATION and BROWN & ROOT INTERNATIONAL, INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, ROMEO PATAG, RIZALINO REYES, IGNACIO DE VERA, SOLOMON B. REYES, JOSE M. ABAN, EMIGDIO N. ABARQUEZ, ANTONIO ACUPAN, ROMEO ACUPAN, BENJAMIN ALEJANDRE, WILFREDO D. ALIGADO, MARTIN AMISTAD, JR., ROLANDO B. AMUL, AMORSOLO ANADING, ANTONIO T. ANGLO, VICENTE ARLITA, HERBERT AYO, SILVERIO BALATAZO, ALFREDO BALOBO, FALCONERO BANAAG, RAMON BARBOSA, FELIX BARCENA, FERNANDO BAS, MARIO BATACLAN, ROBERTO S. BATICA, ENRICO BELEN, ARISTEO BICOL, LARRY C. BICOL, PETRONILLO BISCOCHO, FELIX M. BOBIER, DIONISIO BOBONGO, BAYANI S. BRACAMANTE, PABLITO BUSTILLO, GUILLERMO CABEZAS, BIENVENIDO CADALIN, RODOLFO CAGATAN, AMANTE CAILAO, IRENEO CANDOR, JOSE CASTILLO, MANUEL CASTILLO, REMAR CASTROJERES, REYNALDO CAYAS, ROMEO CECILIO, TEODULO CREUS, BAYANI DAYRIT, RICARDO DAYRIT, ERNESTO T. DELA CRUZ, FRANCISCO DE GUZMAN, ONOFRE DE RAMA, IGNACIO DE VERA, MODESTO DIZON, REYNALDO DIZON, ANTONIO S. DOMINGUEZ, GILBERT EBRADA, RICARDO EBRADA, ANTONIO EJERCITO, JR., EDUARTE ERIDAO, ELADIO ESCOTOTO, JOHN ESGUERRA, EDUARDO ESPIRITU, ERNESTO ESPIRITU, RODOLFO ESPIRITU, NESTOR M. ESTEVA, BENJAMIN ESTRADA, VALERIO EVANGELISTA, OLIGARIO FRANCISCO, JESUS GABAWAN, ROLANDO GARCIA, ANGEL GUDA, PACITO HERNANDEZ, ANTONIO HILARIO, HENRY L. JACOB, HONESTO JARDINIANO, ANTONIO JOCSON, GERARDO LACSAMANA, EFREN U. LIRIO LORETO LONTOC, ISRAEL LORENZO, ALEJANDRO LORINO, JOSE MABALAY, HERMIE MARANAN, LEOVIGILDO MARCIAL, NOEL MARTINEZ, DANTE MATREO, LUCIANO MELENDEZ, RENATO MELO, FRANCIS MEDIODIA, JOSE C. MILANES, RAYMUNDO C. MILAY, CRESENCIANO MIRANDA, ILDEFONSO C. MOLINA, ARMANDO B. MONDEJAR RESURRECCION D. NAZARENO, JUAN OLINDO, FRANCISCO R. OLIVARES, PEDRO ORBISTA, JR., RICARDO ORDONEZ, ERNIE PANCHO, JOSE PANCHO, GORGONIO P. PARALA, MODESTO PINPIN, JUANITO PAREA, ROMEO I.

PATAG, FRANCISCO PINPIN, LEONARDO POBLETE, JAIME POLLOS, DOMINGO PONDALIS, EUGENIO RAMIREZ, LUCIEN M. RESPALL, GAUDENCIO RETANAN, JR., TOMAS B. RETENER, ALVIN C. REYES, RIZALINO REYES, SOLOMON B. REYES, VIRGILIO G. RICAZA, RODELIO RIETA, JR., BENITO RIVERA, JR., BERNARDO J. ROBILLOS, PABLO A. ROBLES, JOSE ROBLEZA, QUIRINO RONQUILLO, AVELINO M. ROQUE, MENANDRO L. SABINO, PEDRO SALGATAR, EDGARDO SALONGA, NUMERIANO SAN MATEO, FELIZARDO DE LOS SANTOS, JR., GABRIEL SANTOS, JUANITO SANTOS, PAQUITO SOLANTE, CONRADO A. SOLIS, JR., RODOLFO SULTAN, ISAIAS TALACTAC, WILLIAM TARUC, MENANDRO TEMPROSA, BIENVENIDO S. TOLENTINO, BENEDICTO TORRES, MAXIMIANO TORRES, FRANCISCO G. TRIAS, SERGIO A. URSOLINO, ROGELIO VALDEZ, LEGORIO E. VERGARA, DELFIN VICTORIA, GILBERT VICTORIA, HERNANE VICTORIANO, FRANCISCO VILLAFLORES, DOMINGO VILLAHERMOSA, ROLANDO VILLALOBOS, ANTONIO VILLAUZ, DANILO VILLANUEVA, ROGELIO VILLANUEVA, ANGEL VILLARBA, JUANITO VILLARINO, FRANCISCO ZARA, ROGELIO AALAGOS, NICANOR B. ABAD, ANDRES ABANES, REYNALDO ABANES, EDUARDO ABANTE, JOSE ABARRO, JOSEFINO ABARRO, CELSO S. ABELANIO, HERMINIO ABELLA, MIGUEL ABESTANO, RODRIGO G. ABUBO, JOSE B. ABUSTAN, DANTE ACERES, REYNALDO S. ACOJIDO, LEOWILIN ACTA, EUGENIO C. ACUEZA, EDUARDO ACUPAN, REYNALDO ACUPAN, SOLANO ACUPAN, MANUEL P. ADANA, FLORENTINO R. AGNE, QUITERIO R. AGUDO, MANUEL P. AGUINALDO, DANTE AGUIRRE, HERMINIO AGUIRRE, GONZALO ALBERTO, JR., CONRADO ALCANTARA, LAMBERTO Q. ALCANTARA, MARIANITO J. ALCANTARA, BENCIO ALDOVER, EULALIO V. ALEJANDRO, BENJAMIN ALEJANDRO, EDUARDO L. ALEJANDRO, MAXIMINO ALEJANDRO, ALBERTO ALMENAR, ARNALDO ALONZO, AMADO ALORIA, CAMILO ALVAREZ, MANUEL C. ALVAREZ, BENJAMIN R. AMBROCIO, CARLOS AMORES, BERNARD P. ANCHETA, TIMOTEO O. ANCHETA, JEOFREY ANI, ELINO P. ANTILLON, ARMANDRO B. ANTIPONO, LARRY T. ANTONIO, ANTONIO APILADO, ARTURO P. APILADO, FRANCISCO APOLINARIO, BARTOLOME M. AQUINO, ISIDRO AQUINO, PASTOR AQUINO, ROSENDO M. AQUINO, ROBERTO ARANGORIN, BENJAMIN O. ARATEA, ARTURO V. ARAULLO, PRUDENCIO ARAULLO, ALEXANDER ARCAIRA, FRANCISCO ARCIAGA, JOSE AREVALO, JUANTO AREVALO, RAMON AREVALO, RODOLFO AREVALO, EULALIO ARGUELLES, WILFREDO P. ARICA, JOSE M. ADESILLO, ANTONIO ASUNCION, ARTEMIO M. ASUNCION, EDGARDO ASUNCION, REXY M. ASUNCION, VICENTE AURELIO, ANGEL AUSTRIA, RICARDO P. AVERILLA, JR., VIRGILIO AVILA, BARTOLOME AXALAN, ALFREDO BABILONIA, FELIMON BACAL, JOSE L. BACANI, ROMULO R. BALBIERAN, VICENTE BALBIERAN, RODOLFO BALITBIT, TEODORO Y. BALOBO, DANILO O. BARBA, BERNARDO BARRO, JUAN A. BASILAN, CEFERINO BATITIS, VIVENCIO C. BAUAN, GAUDENCIO S. BAUTISTA, LEONARDO BAUTISTA, JOSE D. BAUTISTA, ROSTICO BAUTISTA, RUPERTO B. BAUTISTA, TEODORO S. BAUTISTA, VIRGILIO BAUTISTA, JESUS R. BAYA, WINIEFREDO BAYACAL, WINIEFREDO BEBIT, BEN G. BELIR, ERIC B. BELTRAN, EMELIANO BENALES, JR., RAUL BENITEZ, PERFECTO BENSAN, IRENEO BERGONIO, ISABELO BERMUDEZ, ROLANDO I. BERMUDEZ, DANILO BERON, BENJAMIN BERSAMIN, ANGELITO BICOL, ANSELMO BICOL, CELESTINO BICOL, JR., FRANCISCO BICOL, ROGELIO BICOL, ROMULO L. BICOL, ROGELIO BILLIONES, TEOFILO N. BITO, FERNANDO BLANCO, AUGUSTO BONDOC, DOMINGO BONDOC, PEPE S. BOOC, JAMES R. BORJA, WILFREDO BRACEROS, ANGELES C. BRECINO, EURECLYDON G. BRIONES, AMADO BRUGE, PABLITO BUDILLO, ARCHIMEDES BUENAVENTURA, BASILIO BUENAVENTURA, GUILLERMO BUENCONSEJO, ALEXANDER BUSTAMANTE, VIRGILIO BUTIONG, JR., HONESTO P. CABALLA, DELFIN CABALLERO, BENEDICTO CABANIGAN, MOISES CABATAY, HERMANELI CABRERA, PEDRO CAGATAN, JOVEN C. CAGAYAT, ROGELIO L. CALAGOS, REYNALDO V. CALDEJON, OSCAR C. CALDERON, NESTOR D. CALLEJA, RENATO R. CALMA, NELSON T. CAMACHO, SANTOS T. CAMACHO, ROBERTO CAMANA, FLORANTE C. CAMANAG EDGARDO M. CANDA, SEVERINO CANTOS, EPIFANIO A. CAPONPON, ELIAS D. CARILLO, JR., ARMANDO CARREON, MENANDRO M. CASTAEDA, BENIGNO A. CASTILLO, CORNELIO L. CASTILLO, JOSEPH B. CASTILLO, ANSELMO

CASTILLO, JOAQUIN CASTILLO, PABLO L. CASTILLO, ROMEO P. CASTILLO, SESINANDO CATIBOG, DANILO CASTRO, PRUDENCIO A. CASTRO, RAMO CASTRO, JR., ROMEO A. DE CASTRO, JAIME B. CATLI, DURANA D. CEFERINO, RODOLFO B. CELIS, HERMINIGILDO CEREZO, VICTORIANO CELESTINO, BENJAMIN CHAN, ANTONIO C. CHUA, VIVENCIO B. CIABAL, RODRIGO CLARETE, AUGUSTO COLOMA, TURIANO CONCEPCION, TERESITO CONSTANTINO, ARMANDO CORALES, RENATO C. CORCUERA, APOLINAR CORONADO, ABELARDO CORONEL, FELIX CORONEL, JR., LEONARDO CORPUZ, JESUS M. CORRALES, CESAR CORTEMPRATO, FRANCISCO O. CORVERA, FRANCISCO COSTALES, SR., CELEDONIO CREDITO, ALBERTO A. CREUS, ANACLETO V. CRUZ, DOMINGO DELA CRUZ, AMELIANO DELA CRUZ, JR., PANCHITO CRUZ, REYNALDO B. DELA CRUZ, ROBERTO P. CRUZ, TEODORO S. CRUZ, ZOSIMO DELA CRUZ, DIONISIO A. CUARESMA, FELIMON CUIZON, FERMIN DAGONDON, RICHARD DAGUINSIN, CRISANTO A. DATAY, NICASIO DANTINGUINOO, JOSE DATOON, EDUARDO DAVID, ENRICO T. DAVID, FAVIO DAVID, VICTORIANO S. DAVID, EDGARDO N. DAYACAP, JOSELITO T. DELOSO, CELERINO DE GUZMAN, ROMULO DE GUZMAN, LIBERATO DE GUZMAN, JOSE DE LEON, JOSELITO L. DE LUMBAN, NAPOLEON S. DE LUNA, RICARDO DE RAMA, GENEROSO DEL ROSARIO, ALBERTO DELA CRUZ, JOSE DELA CRUZ, LEONARDO DELOS REYES, ERNESTO F. DIATA, EDUARDO A. DIAZ, FELIX DIAZ, MELCHOR DIAZ, NICANOR S. DIAZ, GERARDO C. DIGA, CLEMENTE DIMATULAC, ROLANDO DIONISIO, PHILIPP G. DISMAYA, BENJAMIN DOCTOLERO, ALBERTO STO. DOMINGO, BENJAMIN E. DOZA, BENJAMIN DUPA, DANILO C. DURAN, GREGORIO D. DURAN, RENATO A. EDUARTE, GODOFREDO E. EISMA, ARDON B. ELLO, UBED B. ELLO, JOSEFINO ENANO, REYNALDO ENCARNACION, EDGARDO ENGUANCIO, ELIAS EQUIPANO, FELIZARDO ESCARMOSA, MIGUEL ESCARMOSA, ARMANDO ESCOBAR, ROMEO T. ESCUYOS, ANGELITO ESPIRITU, EDUARDO S. ESPIRITU, REYNALDO ESPIRITU, ROLANDO ESPIRITU, JULIAN ESPREGANTE, IGMIDIO ESTANISLAO, ERNESTO M. ESTEBAN, MELANIO R. ESTRO, ERNESTO M. ESTEVA, CONRADO ESTUAR, CLYDE ESTUYE, ELISEO FAJARDO, PORFIRIO FALQUEZA, WILFREDO P. FAUSTINO, EMILIO E. FERNANDEZ, ARTEMIO FERRER, MISAEL M. FIGURACION, ARMANDO F. FLORES, BENJAMIN FLORES, EDGARDO C. FLORES, BUENAVENTURA FRANCISCO, MANUEL S. FRANCISCO, ROLANDO FRANCISCO, VALERIANO FRANCISCO, RODOLFO GABAWAN, ESMERALDO GAHUTAN, CESAR C. GALANG, SANTIAGO N. GALOSO, GABRIEL GAMBOA, BERNARDO GANDAMON, JUAN GANZON, ANDRES GARCIA, JR., ARMANDO M. GARCIA, EUGENIO GARCIA, MARCELO L. GARCIA, PATRICIO L. GARCIA, JR., PONCIANO G. GARCIA, PONCIANO G. GARCIA, JR., RAFAEL P. GARCIA, ROBERTO S. GARCIA, OSIAS G. GAROFIL, RAYMUNDO C. GARON, ROLANDO G. GATELA, AVELINO GAYETA, RAYMUNDO GERON, PLACIDO GONZALES, RUPERTO H. GONZALES, ROGELIO D. GUANIO, MARTIN V. GUERRERO, JR., ALEXIS GUNO, RICARDO L. GUNO, FRANCISCO GUPIT, DENNIS J. GUTIERREZ, IGNACIO B. GUTIERREZ, ANGELITO DE GUZMAN, JR., CESAR H. HABANA, RAUL G. HERNANDEZ, REYNALDO HERNANDEZ, JOVENIANO D. HILADO, JUSTO HILAPO, ROSTITO HINAHON, FELICISIMO HINGADA, EDUARDO HIPOLITO, RAUL L. IGNACIO, MANUEL L. ILAGAN, RENATO L. ILAGAN, CONRADO A. INSIONG, GRACIANO G. ISLA, ARNEL L. JACOB, OSCAR J. JAPITENGA, CIRILO HICBAN, MAXIMIANO HONRADES, GENEROSO IGNACIO, FELIPE ILAGAN, EXPEDITO N. JACOB, MARIO JASMIN, BIENVENIDO JAVIER, ROMEO M. JAVIER, PRIMO DE JESUS, REYNALDO DE JESUS, CARLOS A. JIMENEZ, DANILO E. JIMENEZ, PEDRO C. JOAQUIN, FELIPE W. JOCSON, FELINO M. JOCSON, PEDRO N. JOCSON, VALENTINO S. JOCSON, PEDRO B. JOLOYA, ESTEBAN P. JOSE, JR., RAUL JOSE, RICARDO SAN JOSE, GERTRUDO KABIGTING, EDUARDO S. KOLIMLIM, SR., LAURO J. LABAY, EMMANUEL C. LABELLA, EDGARDO B. LACERONA, JOSE B. LACSON, MARIO J. LADINES, RUFINO LAGAC, RODRIGO LAGANAPAN, EFREN M. LAMADRID, GUADENCIO LATANAN, VIRGILIO LATAYAN, EMILIANO LATOJA, WENCESLAO LAUREL, ALFREDO LAXAMANA, DANIEL R. LAZARO, ANTONIO C. LEANO, ARTURO S. LEGASPI, BENITO DE LEMOS, JR., PEDRO G. DE LEON, MANOLITO C. LILOC, GERARDO LIMUACO, ERNESTO S. LISING, RENATO LISING, WILFREDO S. LISING, CRISPULO LONTOC,

PEDRO M. LOPERA, ROGELIO LOPERA, CARLITO M. LOPEZ, CLODY LOPEZ, GARLITO LOPEZ, GEORGE F. LOPEZ, VIRGILIO M. LOPEZ, BERNARDITO G. LOREJA, DOMINGO B. LORICO, DOMINGO LOYOLA, DANTE LUAGE, ANTONIO M. LUALHATI, EMMANUEL LUALHATI, JR., LEONIDEZ C. LUALHATI, SEBASTIAN LUALHATI, FRANCISCO LUBAT, ARMANDO LUCERO, JOSELITO L. DE LUMBAN, THOMAS VICENTE O. LUNA, NOLI MACALADLAD, ALFREDO MACALINO, RICARDO MACALINO, ARTURO V. MACARAIG, ERNESTO V. MACARAIG, RODOLFO V. MACARAIG, BENJAMIN MACATANGAY, HERMOGENES MACATANGAY, RODEL MACATANGAY, ROMULO MACATANGAY, OSIAS Q. MADLANGBAYAN, NICOLAS P. MADRID, EDELBERTO G. MAGAT, EFREN C. MAGBANUA, BENJAMIN MAGBUHAT, ALFREDO C. MAGCALENG, ANTONIO MAGNAYE, ALFONSO MAGPANTAY, RICARDO C. MAGPANTAY, SIMEON M. MAGPANTAY, ARMANDO M. MAGSINO, MACARIO S. MAGSINO, ANTONIO MAGTIBAY, VICTOR V. MAGTIBAY, GERONIMO MAHILUM, MANUEL MALONZO, RICARDO MAMADIS, RODOLFO MANA, BERNARDO A. MANALILI, MANUEL MANALILI, ANGELO MANALO, AGUILES L. MANALO, LEOPOLDO MANGAHAS, BAYANI MANIGBAS, ROLANDO C. MANIMTIM, DANIEL MANONSON, ERNESTO F. MANUEL, EDUARDO MANZANO, RICARDO N. MAPA, RAMON MAPILE, ROBERTO C. MARANA, NEMESIO MARASIGAN, WENCESLAO MARASIGAN, LEONARDO MARCELO, HENRY F. MARIANO, JOEL MARIDABLE, SANTOS E. MARINO, NARCISO A. MARQUEZ, RICARDO MARTINEZ, DIEGO MASICAMPO, AURELIO MATABERDE, RENATO MATILLA, VICTORIANO MATILLA, VIRGILIO MEDEL, LOLITO M. MELECIO, BENIGNO MELENDEZ, RENER J. MEMIJE, REYNALDO F. MEMIJE, RODEL MEMIJE, AVELINO MENDOZA, JR., CLARO MENDOZA, TIMOTEO MENDOZA, GREGORIO MERCADO, ERNANI DELA MERCED, RICARDO MERCENA, NEMESIO METRELLO, RODEL MEMIJE, GASPAR MINIMO, BENJAMIN MIRANDA, FELIXBERTO D. MISA, CLAUDIO A. MODESTO, JR., OSCAR MONDEDO, GENEROSO MONTON, RENATO MORADA, RICARDO MORADA, RODOLFO MORADA, ROLANDO M. MORALES, FEDERICO M. MORENO, VICTORINO A. MORTEL, JR., ESPIRITU A. MUNOZ, IGNACIO MUNOZ, ILDEFONSO MUNOZ, ROGELIO MUNOZ, ERNESTO NAPALAN, MARCELO A. NARCIZO, REYNALDO NATALIA, FERNANDO C. NAVARETTE, PACIFICO D. NAVARRO, FLORANTE NAZARENO, RIZAL B. NAZARIO, JOSUE NEGRITE, ALFREDO NEPUMUCENO, HERBERT G. NG, FLORENCIO NICOLAS, ERNESTO C. NINON, AVELINO NUQUI, NEMESIO D. OBA, DANILO OCAMPO, EDGARDO OCAMPO, RODRIGO E. OCAMPO, ANTONIO B. OCCIANO, REYNALDO P. OCSON, BENJAMIN ODESA, ANGEL OLASO, FRANCISCO OLIGARIO, ZOSIMO OLIMBO, BENJAMIN V. ORALLO, ROMEO S. ORIGINES, DANILO R. ORTANEZ, WILFREDO OSIAS, VIRGILIO PA-A, DAVID PAALAN, JESUS N. PACHECO, ALFONSO L. PADILLA, DANILO PAGSANJAN, NUMERIANO PAGSISIHAN, RICARDO T. PAGUIO, EMILIO PAKINGAN, LEANDRO PALABRICA, QUINCIANO PALO, JOSE PAMATIAN, GONZALO PAN, PORFIRIO PAN, BIENVENIDO PANGAN, ERNESTO PANGAN, FRANCISCO V. PASIA, EDILBERTO PASIMIO, JR., JOSE V. PASION, ANGELITO M. PENA, DIONISIO PENDRAS, HERMINIO PERALTA, REYNALDO M. PERALTA, ANTONIO PEREZ, ANTOLIANO E. PEREZ, JUAN PEREZ, LEON PEREZ, ROMEO E. PEREZ, ROMULO PEREZ, WILLIAM PEREZ, FERNANDO G. PERINO, FLORENTINO DEL PILAR, DELMAR F. PINEDA, SALVADOR PINEDA, ELIZALDE PINPIN, WILFREDO PINPIN, ARTURO POBLETE, DOMINADOR R. PRIELA, BUENAVENTURA PRUDENTE, CARMELITO PRUDENTE, DANTE PUEYO, REYNALDO Q. PUEYO, RODOLFO O. PULIDO, ALEJANDRO PUNIO, FEDERICO QUIMAN, ALFREDO L. QUINTO, ROMEO QUINTOS, EDUARDO W. RACABO, RICARDO C. DE RAMA, RICARDO L. DE RAMA, ROLANDO DE RAMA, FERNANDO A. RAMIREZ, LITO S. RAMIREZ, RICARDO G. RAMIREZ, RODOLFO V. RAMIREZ, ALBERTO RAMOS, ANSELMO C. RAMOS, TOBIAS RAMOS, WILLARFREDO RAYMUNDO, REYNALDO RAQUEDAN, MANUEL F. RAVELAS, WILFREDO D. RAYMUNDO, ERNESTO E. RECOLASO, ALBERTO REDAZA, ARTHUR REJUSO, TORIBIO M. RELLAMA, JAIME RELLOSA, EUGENIO A. REMOQUILLO, GERARDO RENTOZA, REDENTOR C. REY, ALFREDO S. REYES, AMABLE S. REYES, BENEDICTO R. REYES, GREGORIO B. REYES, JOSE A. REYES, JOSE C. REYES, ROMULO M. REYES, SERGIO REYES, ERNESTO F. RICO, FERNANDO M. RICO, EMMANUEL RIETA,

RICARDO RIETA, LEO B. ROBLES, RUBEN ROBLES, RODOLFO ROBLEZA, RODRIGO ROBLEZA, EDUARDO ROCABO, ANTONIO R. RODRIGUEZ, BERNARDO RODRIGUEZ, ELIGIO RODRIGUEZ, ALMONTE ROMEO, ELIAS RONQUILLO, ELISE RONQUILLO, LUIS VAL B. RONQUILLO, REYNOSO P. RONQUILLO, RODOLFO RONQUILLO, ANGEL ROSALES, RAMON ROSALES, ALBERTO DEL ROSARIO, GENEROSO DEL ROSARIO, TEODORICO DEL ROSARIO, VIRGILIO L. ROSARIO, CARLITO SALVADOR, JOSE SAMPARADA, ERNESTO SAN PEDRO, ADRIANO V. SANCHA, GERONIMO M. SANCHA, ARTEMIO B. SANCHEZ, NICASIO SANCHEZ, APOLONIO P. SANTIAGO, JOSELITO S. SANTIAGO, SERGIO SANTIAGO, EDILBERTO C. SANTOS, EFREN S. SANTOS, RENATO D. SANTOS, MIGUEL SAPUYOT, ALEX S. SERQUINA, DOMINADOR P. SERRA, ROMEO SIDRO, AMADO M. SILANG, FAUSTINO D. SILANG, RODOLFO B. DE SILOS, ANICETO G. SILVA, EDGARDO M. SILVA, ROLANDO C. SILVERTO, ARTHUR B. SIMBAHON, DOMINGO SOLANO, JOSELITO C. SOLANTE, CARLITO SOLIS, CONRADO SOLIS, III, EDGARDO SOLIS, ERNESTO SOLIS, ISAGANI M. SOLIS, EDUARDO L. SOTTO, ERNESTO G. STA. MARIA, VICENTE G. STELLA, FELIMON SUPANG, PETER TANGUINOO, MAXIMINO TALIBSAO, FELICISMO P. TALUSIK, FERMIN TARUC, JR., LEVY S. TEMPLO, RODOLFO S. TIAMSON, LEONILO TIPOSO, ARNEL TOLENTINO, MARIO M. TOLENTINO, FELIPE TORRALBA, JOVITO V. TORRES, LEONARDO DE TORRES, GAVINO U. TUAZON, AUGUSTO B. TUNGUIA, FRANCISCO UMALI, SIMPLICIO UNIDA, WILFREDO V. UNTALAN, ANTONIO VALDERAMA, RAMON VALDERAMA, NILO VALENCIANO, EDGARDO C. VASQUEZ, ELPIDIO VELASQUEZ, NESTOR DE VERA, WILFREDO D. VERA, BIENVENIDO VERGARA, ALFREDO VERGARA, RAMON R. VERZOSA, FELICITO P. VICMUNDO, ALFREDO VICTORIANO, TEOFILO P. VIDALLO, SABINO N. VIERNEZ, JESUS J. VILLA, JOVEN VILLABLANCO, EDGARDO G. VILLAFLORES, CEFERINO VILLAGERA, ALEX VILLAHERMOZA, DANILO A. VILLANUEVA, ELITO VILLANUEVA, LEONARDO M. VILLANUEVA, MANUEL R. VILLANUEVA, NEPTHALI VILLAR, JOSE V. VILLAREAL, FELICISIMO VILLARINO, RAFAEL VILLAROMAN, CARLOS VILLENA, FERDINAND VIVO, ROBERTO YABUT, VICENTE YNGENTE, AND ORO C. ZUNIGA,respondents. Gerardo A. Del Mundo and Associates for petitioners. Romulo, Mabanta, Sayoc, Buenaventura, De los Angeles Law Offices for BRII/AIBC. Florante M. De Castro for private respondents in 105029-32.

QUIASON, J.: The petition in G.R. No. 104776, entitled "Bienvenido M. Cadalin, et. al. v. Philippine Overseas Employment Administration's Administrator, et. al.," was filed under Rule 65 of the Revised Rules of Court: (1) to modify the Resolution dated September 2, 1991 of the National Labor Relations Commission (NLRC) in POEA Cases Nos. L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-460; (2) to render a new decision: (i) declaring private respondents as in default; (ii) declaring the said labor cases as a class suit; (iii) ordering Asia International Builders Corporation (AIBC) and Brown and Root International Inc. (BRII) to pay the claims of the 1,767 claimants in said labor cases; (iv) declaring Atty. Florante M. de Castro guilty of forum-shopping; and (v) dismissing POEA Case No. L-86-05-460; and

(3) to reverse the Resolution dated March 24, 1992 of NLRC, denying the motion for reconsideration of its Resolution dated September 2, 1991 (Rollo, pp. 8-288). The petition in G.R. Nos. 104911-14, entitled "Bienvenido M. Cadalin, et. al., v. Hon. National Labor Relations Commission, et. al.," was filed under Rule 65 of the Revised Rules of Court: (1) to reverse the Resolution dated September 2, 1991 of NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L-85-10-799 and L-86-05-460 insofar as it: (i) applied the three-year prescriptive period under the Labor Code of the Philippines instead of the ten-year prescriptive period under the Civil Code of the Philippines; and (ii) denied the "three-hour daily average" formula in the computation of petitioners' overtime pay; and (2) to reverse the Resolution dated March 24, 1992 of NLRC, denying the motion for reconsideration of its Resolution dated September 2, 1991 (Rollo, pp. 8-25; 26-220). The petition in G.R. Nos. 105029-32, entitled "Asia International Builders Corporation, et. al., v. National Labor Relations Commission, et. al." was filed under Rule 65 of the Revised Rules of Court: (1) to reverse the Resolution dated September 2, 1991 of NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-460, insofar as it granted the claims of 149 claimants; and (2) to reverse the Resolution dated March 21, 1992 of NLRC insofar as it denied the motions for reconsideration of AIBC and BRII (Rollo, pp. 2-59; 61-230). The Resolution dated September 2, 1991 of NLRC, which modified the decision of POEA in four labor cases: (1) awarded monetary benefits only to 149 claimants and (2) directed Labor Arbiter Fatima J. Franco to conduct hearings and to receive evidence on the claims dismissed by the POEA for lack of substantial evidence or proof of employment. Consolidation of Cases G.R. Nos. 104776 and 105029-32 were originally raffled to the Third Division while G.R. Nos. 104911-14 were raffled to the Second Division. In the Resolution dated July 26, 1993, the Second Division referred G.R. Nos. 104911-14 to the Third Division (G.R. Nos. 104911-14, Rollo, p. 895). In the Resolution dated September 29, 1993, the Third Division granted the motion filed in G.R. Nos. 104911-14 for the consolidation of said cases with G.R. Nos. 104776 and 105029-32, which were assigned to the First Division (G.R. Nos. 104911-14, Rollo, pp. 986-1,107; G.R. Nos. 10502930, Rollo, pp. 369-377, 426-432). In the Resolution dated October 27, 1993, the First Division granted the motion to consolidate G.R. Nos. 104911-14 with G.R. No. 104776 (G.R. Nos. 10491114, Rollo, p. 1109; G.R. Nos. 105029-32, Rollo, p. 1562). I On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. Evangelista, in their own behalf and on behalf of 728 other overseas contract workers (OCWs) instituted a class suit by filing an "Amended Complaint" with the Philippine Overseas Employment Administration (POEA) for

money claims arising from their recruitment by AIBC and employment by BRII (POEA Case No. L84-06-555). The claimants were represented by Atty. Gerardo del Mundo. BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; while AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino workers for overseas employment on behalf of its foreign principals. The amended complaint principally sought the payment of the unexpired portion of the employment contracts, which was terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and Reserved Fund, interest on all the unpaid benefits; area wage and salary differential pay; fringe benefits; refund of SSS and premium not remitted to the SSS; refund of withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the suspension of the license of AIBC and the accreditation of BRII (G.R. No. 104776, Rollo, pp. 13-14). At the hearing on June 25, 1984, AIBC was furnished a copy of the complaint and was given, together with BRII, up to July 5, 1984 to file its answer. On July 3, 1984, POEA Administrator, upon motion of AIBC and BRII, ordered the claimants to file a bill of particulars within ten days from receipt of the order and the movants to file their answers within ten days from receipt of the bill of particulars. The POEA Administrator also scheduled a pre-trial conference on July 25, 1984. On July 13, 1984, the claimants submitted their "Compliance and Manifestation." On July 23, 1984, AIBC filed a "Motion to Strike Out of the Records", the "Complaint" and the "Compliance and Manifestation." On July 25, 1984, the claimants filed their "Rejoinder and Comments," averring, among other matters, the failure of AIBC and BRII to file their answers and to attend the pre-trial conference on July 25, 1984. The claimants alleged that AIBC and BRII had waived their right to present evidence and had defaulted by failing to file their answers and to attend the pre-trial conference. On October 2, 1984, the POEA Administrator denied the "Motion to Strike Out of the Records" filed by AIBC but required the claimants to correct the deficiencies in the complaint pointed out in the order. On October 10, 1984, claimants asked for time within which to comply with the Order of October 2, 1984 and filed an "Urgent Manifestation," praying that the POEA Administrator direct the parties to submit simultaneously their position papers, after which the case should be deemed submitted for decision. On the same day, Atty. Florante de Castro filed another complaint for the same money claims and benefits in behalf of several claimants, some of whom were also claimants in POEA Case No. L-84-06-555 (POEA Case No. 85-10-779). On October 19, 1984, claimants filed their "Compliance" with the Order dated October 2, 1984 and an "Urgent Manifestation," praying that the POEA direct the parties to submit simultaneously their position papers after which the case would be deemed submitted for decision. On the same day, AIBC asked for time to file its comment on the "Compliance" and "Urgent Manifestation" of claimants. On November 6, 1984, it filed a second motion for extension of time to file the comment. On November 8, 1984, the POEA Administrator informed AIBC that its motion for extension of time was granted. On November 14, 1984, claimants filed an opposition to the motions for extension of time and asked that AIBC and BRII be declared in default for failure to file their answers.

On November 20, 1984, AIBC and BRII filed a "Comment" praying, among other reliefs, that claimants should be ordered to amend their complaint. On December 27, 1984, the POEA Administrator issued an order directing AIBC and BRII to file their answers within ten days from receipt of the order. On February 27, 1985, AIBC and BRII appealed to NLRC seeking the reversal of the said order of the POEA Administrator. Claimants opposed the appeal, claiming that it was dilatory and praying that AIBC and BRII be declared in default. On April 2, 1985, the original claimants filed an "Amended Complaint and/or Position Paper" dated March 24, 1985, adding new demands: namely, the payment of overtime pay, extra night work pay, annual leave differential pay, leave indemnity pay, retirement and savings benefits and their share of forfeitures (G.R. No. 104776, Rollo, pp. 14-16). On April 15, 1985, the POEA Administrator directed AIBC to file its answer to the amended complaint (G.R. No. 104776, Rollo, p. 20). On May 28, 1985, claimants filed an "Urgent Motion for Summary Judgment." On the same day, the POEA issued an order directing AIBC and BRII to file their answers to the "Amended Complaint," otherwise, they would be deemed to have waived their right to present evidence and the case would be resolved on the basis of complainant's evidence. On June 5, 1985, AIBC countered with a "Motion to Dismiss as Improper Class Suit and Motion for Bill of Particulars Re: Amended Complaint dated March 24, 1985." Claimants opposed the motions. On September 4, 1985, the POEA Administrator reiterated his directive to AIBC and BRII to file their answers in POEA Case No. L-84-06-555. On September 18, 1985, AIBC filed its second appeal to the NLRC, together with a petition for the issuance of a writ of injunction. On September 19, 1985, NLRC enjoined the POEA Administrator from hearing the labor cases and suspended the period for the filing of the answers of AIBC and BRII. On September 19, 1985, claimants asked the POEA Administrator to include additional claimants in the case and to investigate alleged wrongdoings of BRII, AIBC and their respective lawyers. On October 10, 1985, Romeo Patag and two co-claimants filed a complaint (POEA Case No. L-8510-777) against AIBC and BRII with the POEA, demanding monetary claims similar to those subject of POEA Case No. L-84-06-555. In the same month, Solomon Reyes also filed his own complaint (POEA Case No. L-85-10-779) against AIBC and BRII. On October 17, 1985, the law firm of Florante M. de Castro & Associates asked for the substitution of the original counsel of record and the cancellation of the special powers of attorney given the original counsel. On December 12, 1985, Atty. Del Mundo filed in NLRC a notice of the claim to enforce attorney's lien. On May 29, 1986, Atty. De Castro filed a complaint for money claims (POEA Case No. 86-05-460) in behalf of 11 claimants including Bienvenido Cadalin, a claimant in POEA Case No. 84-06-555.

On December 12, 1986, the NLRC dismissed the two appeals filed on February 27, 1985 and September 18, 1985 by AIBC and BRII. In narrating the proceedings of the labor cases before the POEA Administrator, it is not amiss to mention that two cases were filed in the Supreme Court by the claimants, namely G.R. No. 72132 on September 26, 1985 and Administrative Case No. 2858 on March 18, 1986. On May 13, 1987, the Supreme Court issued a resolution in Administrative Case No. 2858 directing the POEA Administrator to resolve the issues raised in the motions and oppositions filed in POEA Cases Nos. L-84-06-555 and L-86-05-460 and to decide the labor cases with deliberate dispatch. AIBC also filed a petition in the Supreme Court (G.R. No. 78489), questioning the Order dated September 4, 1985 of the POEA Administrator. Said order required BRII and AIBC to answer the amended complaint in POEA Case No. L-84-06-555. In a resolution dated November 9, 1987, we dismissed the petition by informing AIBC that all its technical objections may properly be resolved in the hearings before the POEA. Complaints were also filed before the Ombudsman. The first was filed on September 22, 1988 by claimant Hermie Arguelles and 18 co-claimants against the POEA Administrator and several NLRC Commissioners. The Ombudsman merely referred the complaint to the Secretary of Labor and Employment with a request for the early disposition of POEA Case No. L-84-06-555. The second was filed on April 28, 1989 by claimants Emigdio P. Bautista and Rolando R. Lobeta charging AIBC and BRII for violation of labor and social legislations. The third was filed by Jose R. Santos, Maximino N. Talibsao and Amado B. Bruce denouncing AIBC and BRII of violations of labor laws. On January 13, 1987, AIBC filed a motion for reconsideration of the NLRC Resolution dated December 12, 1986. On January 14, 1987, AIBC reiterated before the POEA Administrator its motion for suspension of the period for filing an answer or motion for extension of time to file the same until the resolution of its motion for reconsideration of the order of the NLRC dismissing the two appeals. On April 28, 1987, NLRC en banc denied the motion for reconsideration. At the hearing on June 19, 1987, AIBC submitted its answer to the complaint. At the same hearing, the parties were given a period of 15 days from said date within which to submit their respective position papers. On June 24, 1987 claimants filed their "Urgent Motion to Strike Out Answer," alleging that the answer was filed out of time. On June 29, 1987, claimants filed their "Supplement to Urgent Manifestational Motion" to comply with the POEA Order of June 19, 1987. On February 24, 1988, AIBC and BRII submitted their position paper. On March 4, 1988, claimants filed their "ExParte Motion to Expunge from the Records" the position paper of AIBC and BRII, claiming that it was filed out of time. On September 1, 1988, the claimants represented by Atty. De Castro filed their memorandum in POEA Case No. L-86-05-460. On September 6, 1988, AIBC and BRII submitted their Supplemental Memorandum. On September 12, 1988, BRII filed its "Reply to Complainant's Memorandum." On October 26, 1988, claimants submitted their "Ex-Parte Manifestational Motion and CounterSupplemental Motion," together with 446 individual contracts of employments and service records. On October 27, 1988, AIBC and BRII filed a "Consolidated Reply." On January 30, 1989, the POEA Administrator rendered his decision in POEA Case No. L-84-06555 and the other consolidated cases, which awarded the amount of $824,652.44 in favor of only 324 complainants.

On February 10, 1989, claimants submitted their "Appeal Memorandum For Partial Appeal" from the decision of the POEA. On the same day, AIBC also filed its motion for reconsideration and/or appeal in addition to the "Notice of Appeal" filed earlier on February 6, 1989 by another counsel for AIBC. On February 17, 1989, claimants filed their "Answer to Appeal," praying for the dismissal of the appeal of AIBC and BRII. On March 15, 1989, claimants filed their "Supplement to Complainants' Appeal Memorandum," together with their "newly discovered evidence" consisting of payroll records. On April 5, 1989, AIBC and BRII submitted to NLRC their "Manifestation," stating among other matters that there were only 728 named claimants. On April 20, 1989, the claimants filed their "Counter-Manifestation," alleging that there were 1,767 of them. On July 27, 1989, claimants filed their "Urgent Motion for Execution" of the Decision dated January 30, 1989 on the grounds that BRII had failed to appeal on time and AIBC had not posted the supersedeas bond in the amount of $824,652.44. On December 23, 1989, claimants filed another motion to resolve the labor cases. On August 21, 1990, claimants filed their "Manifestational Motion," praying that all the 1,767 claimants be awarded their monetary claims for failure of private respondents to file their answers within the reglamentary period required by law. On September 2, 1991, NLRC promulgated its Resolution, disposing as follows: WHEREFORE, premises considered, the Decision of the POEA in these consolidated cases is modified to the extent and in accordance with the following dispositions: 1. The claims of the 94 complainants identified and listed in Annex "A" hereof are dismissed for having prescribed; 2. Respondents AIBC and Brown & Root are hereby ordered, jointly and severally, to pay the 149 complainants, identified and listed in Annex "B" hereof, the peso equivalent, at the time of payment, of the total amount in US dollars indicated opposite their respective names; 3. The awards given by the POEA to the 19 complainants classified and listed in Annex "C" hereof, who appear to have worked elsewhere than in Bahrain are hereby set aside. 4. All claims other than those indicated in Annex "B", including those for overtime work and favorably granted by the POEA, are hereby dismissed for lack of substantial evidence in support thereof or are beyond the competence of this Commission to pass upon. In addition, this Commission, in the exercise of its powers and authority under Article 218(c) of the Labor Code, as amended by R.A. 6715, hereby directs Labor Arbiter Fatima J. Franco of this Commission to summon parties, conduct hearings and receive evidence, as expeditiously as possible, and thereafter submit a written report

to this Commission (First Division) of the proceedings taken, regarding the claims of the following: (a) complainants identified and listed in Annex "D" attached and made an integral part of this Resolution, whose claims were dismissed by the POEA for lack of proof of employment in Bahrain (these complainants numbering 683, are listed in pages 13 to 23 of the decision of POEA, subject of the appeals) and, (b) complainants identified and listed in Annex "E" attached and made an integral part of this Resolution, whose awards decreed by the POEA, to Our mind, are not supported by substantial evidence" (G.R. No. 104776; Rollo, pp. 113-115; G.R. Nos. 104911-14, pp. 8587; G.R. Nos. 105029-31, pp. 120-122). On November 27, 1991, claimant Amado S. Tolentino and 12 co-claimants, who were former clients of Atty. Del Mundo, filed a petition for certiorari with the Supreme Court (G.R. Nos. 120741-44). The petition was dismissed in a resolution dated January 27, 1992. Three motions for reconsideration of the September 2, 1991 Resolution of the NLRC were filed. The first, by the claimants represented by Atty. Del Mundo; the second, by the claimants represented by Atty. De Castro; and the third, by AIBC and BRII. In its Resolution dated March 24, 1992, NLRC denied all the motions for reconsideration. Hence, these petitions filed by the claimants represented by Atty. Del Mundo (G.R. No. 104776), the claimants represented by Atty. De Castro (G.R. Nos. 104911-14) and by AIBC and BRII (G.R. Nos. 105029-32). II Compromise Agreements Before this Court, the claimants represented by Atty. De Castro and AIBC and BRII have submitted, from time to time, compromise agreements for our approval and jointly moved for the dismissal of their respective petitions insofar as the claimants-parties to the compromise agreements were concerned (See Annex A for list of claimants who signed quitclaims). Thus the following manifestations that the parties had arrived at a compromise agreement and the corresponding motions for the approval of the agreements were filed by the parties and approved by the Court: 1) Joint Manifestation and Motion involving claimant Emigdio Abarquez and 47 coclaimants dated September 2, 1992 (G.R. Nos. 104911-14, Rollo, pp. 263-406; G.R. Nos. 105029-32, Rollo, pp. 470-615); 2) Joint Manifestation and Motion involving petitioner Bienvenido Cadalin and 82 copetitioners dated September 3, 1992 (G.R. No. 104776, Rollo, pp. 364-507);

3) Joint Manifestation and Motion involving claimant Jose M. Aban and 36 co-claimants dated September 17, 1992 (G.R. Nos. 10502932, Rollo, pp. 613-722; G.R. No. 104776, Rollo, pp. 518-626; G.R. Nos. 10491114, Rollo, pp. 407-516); 4) Joint Manifestation and Motion involving claimant Antonio T. Anglo and 17 coclaimants dated October 14, 1992 (G.R. Nos. 105029-32, Rollo, pp. 778-843; G.R. No. 104776, Rollo, pp. 650-713; G.R. Nos. 104911-14, Rollo, pp. 530-590); 5) Joint Manifestation and Motion involving claimant Dionisio Bobongo and 6 coclaimants dated January 15, 1993 (G.R. No. 104776, Rollo, pp. 813-836; G.R. Nos. 104911-14, Rollo, pp. 629-652); 6) Joint Manifestation and Motion involving claimant Valerio A. Evangelista and 4 coclaimants dated March 10, 1993 (G.R. Nos. 104911-14, Rollo, pp. 731-746; G.R. No. 104776, Rollo, pp. 1815-1829); 7) Joint Manifestation and Motion involving claimants Palconeri Banaag and 5 coclaimants dated March 17, 1993 (G.R. No. 104776, Rollo, pp. 1657-1703; G.R. Nos. 104911-14, Rollo, pp. 655-675); 8) Joint Manifestation and Motion involving claimant Benjamin Ambrosio and 15 other co-claimants dated May 4, 1993 (G.R. Nos. 105029-32, Rollo, pp. 906-956; G.R. Nos. 104911-14, Rollo, pp. 679-729; G.R. No. 104776, Rollo, pp. 1773-1814); 9) Joint Manifestation and Motion involving Valerio Evangelista and 3 co-claimants dated May 10, 1993 (G.R. No. 104776, Rollo, pp. 1815-1829); 10) Joint Manifestation and Motion involving petitioner Quiterio R. Agudo and 36 coclaimants dated June 14, 1993 (G.R. Nos. 105029-32, Rollo, pp. 974-1190; G.R. Nos. 104911-14, Rollo, pp. 748-864; G.R. No. 104776, Rollo, pp. 1066-1183); 11) Joint Manifestation and Motion involving claimant Arnaldo J. Alonzo and 19 coclaimants dated July 22, 1993 (G.R. No. 104776, Rollo, pp. 1173-1235; G.R. Nos. 105029-32, Rollo, pp. 1193-1256; G.R. Nos. 104911-14, Rollo, pp. 896-959); 12) Joint Manifestation and Motion involving claimant Ricardo C. Dayrit and 2 coclaimants dated September 7, 1993 (G.R. Nos. 105029-32, Rollo, pp. 1266-1278; G.R. No. 104776, Rollo, pp. 1243-1254; G.R. Nos. 104911-14,Rollo, pp. 972-984); 13) Joint Manifestation and Motion involving claimant Dante C. Aceres and 37 coclaimants dated September 8, 1993 (G.R. No. 104776, Rollo, pp. 1257-1375; G.R. Nos. 104911-14, Rollo, pp. 987-1105; G.R. Nos. 105029-32, Rollo, pp. 1280-1397); 14) Joint Manifestation and Motion involving Vivencio V. Abella and 27 co-claimants dated January 10, 1994 (G.R. Nos. 105029-32, Rollo, Vol. II);

15) Joint Manifestation and Motion involving Domingo B. Solano and six co-claimants dated August 25, 1994 (G.R. Nos. 105029-32; G.R. No. 104776; G.R. Nos. 10491114). III The facts as found by the NLRC are as follows: We have taken painstaking efforts to sift over the more than fifty volumes now comprising the records of these cases. From the records, it appears that the complainants-appellants allege that they were recruited by respondent-appellant AIBC for its accredited foreign principal, Brown & Root, on various dates from 1975 to 1983. They were all deployed at various projects undertaken by Brown & Root in several countries in the Middle East, such as Saudi Arabia, Libya, United Arab Emirates and Bahrain, as well as in Southeast Asia, in Indonesia and Malaysia. Having been officially processed as overseas contract workers by the Philippine Government, all the individual complainants signed standard overseas employment contracts (Records, Vols. 25-32. Hereafter, reference to the records would be sparingly made, considering their chaotic arrangement) with AIBC before their departure from the Philippines. These overseas employment contracts invariably contained the following relevant terms and conditions. PART B (1) Employment Position Classification : (Code) : (2) Company Employment Status : (3) Date of Employment to Commence on : (4) Basic Working Hours Per Week : (5) Basic Working Hours Per Month : (6) Basic Hourly Rate : (7) Overtime Rate Per Hour : (8) Projected Period of Service (Subject to C(1) of this [sic]) : Months and/or Job Completion xxx xxx xxx 3. HOURS OF WORK AND COMPENSATION a) The Employee is employed at the hourly rate and overtime rate as set out in Part B of this Document. b) The hours of work shall be those set forth by the Employer, and Employer may, at his sole option, change or adjust such hours as maybe deemed necessary from time to time. 4. TERMINATION

a) Notwithstanding any other terms and conditions of this agreement, the Employer may, at his sole discretion, terminate employee's service with cause, under this agreement at any time. If the Employer terminates the services of the Employee under this Agreement because of the completion or termination, or suspension of the work on which the Employee's services were being utilized, or because of a reduction in force due to a decrease in scope of such work, or by change in the type of construction of such work. The Employer will be responsible for his return transportation to his country of origin. Normally on the most expeditious air route, economy class accommodation. xxx xxx xxx 10. VACATION/SICK LEAVE BENEFITS a) After one (1) year of continuous service and/or satisfactory completion of contract, employee shall be entitled to 12-days vacation leave with pay. This shall be computed at the basic wage rate. Fractions of a year's service will be computed on a pro-rata basis. b) Sick leave of 15-days shall be granted to the employee for every year of service for non-work connected injuries or illness. If the employee failed to avail of such leave benefits, the same shall be forfeited at the end of the year in which said sick leave is granted. 11. BONUS A bonus of 20% (for offshore work) of gross income will be accrued and payable only upon satisfactory completion of this contract. 12. OFFDAY PAY The seventh day of the week shall be observed as a day of rest with 8 hours regular pay. If work is performed on this day, all hours work shall be paid at the premium rate. However, this offday pay provision is applicable only when the laws of the Host Country require payments for rest day. In the State of Bahrain, where some of the individual complainants were deployed, His Majesty Isa Bin Salman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23 on June 16, 1976, otherwise known as the Labour Law for the Private Sector (Records, Vol. 18). This decree took effect on August 16, 1976. Some of the provisions of Amiri Decree No. 23 that are relevant to the claims of the complainantsappellants are as follows (italics supplied only for emphasis): Art. 79: . . . A worker shall receive payment for each extra hour equivalent to his wage entitlement increased by a minimum of twentyfive per centum thereof for hours worked during the day; and by a minimum of fifty per centum thereof for hours worked during the night which shall be deemed to being from seven o'clock in the evening until seven o'clock in the morning. . . . Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.

. . . an employer may require a worker, with his consent, to work on his weekly day of rest if circumstances so require and in respect of which an additional sum equivalent to 150% of his normal wage shall be paid to him. . . . Art. 81: . . . When conditions of work require the worker to work on any official holiday, he shall be paid an additional sum equivalent to 150% of his normal wage. Art. 84: Every worker who has completed one year's continuous service with his employer shall be entitled to leave on full pay for a period of not less than 21 days for each year increased to a period not less than 28 days after five continuous years of service. A worker shall be entitled to such leave upon a quantum meruit in respect of the proportion of his service in that year. Art. 107: A contract of employment made for a period of indefinite duration may be terminated by either party thereto after giving the other party thirty days' prior notice before such termination, in writing, in respect of monthly paid workers and fifteen days' notice in respect of other workers. The party terminating a contract without giving the required notice shall pay to the other party compensation equivalent to the amount of wages payable to the worker for the period of such notice or the unexpired portion thereof. Art. 111: . . . the employer concerned shall pay to such worker, upon termination of employment, a leaving indemnity for the period of his employment calculated on the basis of fifteen days' wages for each year of the first three years of service and of one month's wages for each year of service thereafter. Such worker shall be entitled to payment of leaving indemnity upon a quantum meruit in proportion to the period of his service completed within a year. All the individual complainants-appellants have already been repatriated to the Philippines at the time of the filing of these cases (R.R. No. 104776, Rollo, pp. 59-65). IV The issues raised before and resolved by the NLRC were: First: Whether or not complainants are entitled to the benefits provided by Amiri Decree No. 23 of Bahrain; (a) Whether or not the complainants who have worked in Bahrain are entitled to the above-mentioned benefits. (b) Whether or not Art. 44 of the same Decree (allegedly prescribing a more favorable treatment of alien employees) bars complainants from enjoying its benefits.

Second: Assuming that Amiri Decree No. 23 of Bahrain is applicable in these cases, whether or not complainants' claim for the benefits provided therein have prescribed. Third: Whether or not the instant cases qualify as a class suit. Fourth: Whether or not the proceedings conducted by the POEA, as well as the decision that is the subject of these appeals, conformed with the requirements of due process; (a) Whether or not the respondent-appellant was denied its right to due process; (b) Whether or not the admission of evidence by the POEA after these cases were submitted for decision was valid; (c) Whether or not the POEA acquired jurisdiction over Brown & Root International, Inc.; (d) Whether or not the judgment awards are supported by substantial evidence; (e) Whether or not the awards based on the averages and formula presented by the complainants-appellants are supported by substantial evidence; (f) Whether or not the POEA awarded sums beyond what the complainants-appellants prayed for; and, if so, whether or not these awards are valid. Fifth: Whether or not the POEA erred in holding respondents AIBC and Brown & Root jointly are severally liable for the judgment awards despite the alleged finding that the former was the employer of the complainants; (a) Whether or not the POEA has acquired jurisdiction over Brown & Root; (b) Whether or not the undisputed fact that AIBC was a licensed construction contractor precludes a finding that Brown & Root is liable for complainants claims. Sixth: Whether or not the POEA Administrator's failure to hold respondents in default constitutes a reversible error. Seventh: Whether or not the POEA Administrator erred in dismissing the following claims: a. Unexpired portion of contract; b. Interest earnings of Travel and Reserve Fund;

c. Retirement and Savings Plan benefits; d. War Zone bonus or premium pay of at least 100% of basic pay; e. Area Differential Pay; f. Accrued interests on all the unpaid benefits; g. Salary differential pay; h. Wage differential pay; i. Refund of SSS premiums not remitted to SSS; j. Refund of withholding tax not remitted to BIR; k. Fringe benefits under B & R's "A Summary of Employee Benefits" (Annex "Q" of Amended Complaint); l. Moral and exemplary damages; m. Attorney's fees of at least ten percent of the judgment award; n. Other reliefs, like suspending and/or cancelling the license to recruit of AIBC and the accreditation of B & R issued by POEA; o. Penalty for violations of Article 34 (prohibited practices), not excluding reportorial requirements thereof. Eighth: Whether or not the POEA Administrator erred in not dismissing POEA Case No. (L) 86-65-460 on the ground of multiplicity of suits (G.R. Nos. 10491114, Rollo, pp. 25-29, 51-55). Anent the first issue, NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence governing the pleading and proof of a foreign law and admitted in evidence a simple copy of the Bahrain's Amiri Decree No. 23 of 1976 (Labour Law for the Private Sector). NLRC invoked Article 221 of the Labor Code of the Philippines, vesting on the Commission ample discretion to use every and all reasonable means to ascertain the facts in each case without regard to the technicalities of law or procedure. NLRC agreed with the POEA Administrator that the Amiri Decree No. 23, being more favorable and beneficial to the workers, should form part of the overseas employment contract of the complainants. NLRC, however, held that the Amiri Decree No. 23 applied only to the claimants, who worked in Bahrain, and set aside awards of the POEA Administrator in favor of the claimants, who worked elsewhere. On the second issue, NLRC ruled that the prescriptive period for the filing of the claims of the complainants was three years, as provided in Article 291 of the Labor Code of the Philippines, and not ten years as provided in Article 1144 of the Civil Code of the Philippines nor one year as provided in the Amiri Decree No. 23 of 1976.

On the third issue, NLRC agreed with the POEA Administrator that the labor cases cannot be treated as a class suit for the simple reason that not all the complainants worked in Bahrain and therefore, the subject matter of the action, the claims arising from the Bahrain law, is not of common or general interest to all the complainants. On the fourth issue, NLRC found at least three infractions of the cardinal rules of administrative due process: namely, (1) the failure of the POEA Administrator to consider the evidence presented by AIBC and BRII; (2) some findings of fact were not supported by substantial evidence; and (3) some of the evidence upon which the decision was based were not disclosed to AIBC and BRII during the hearing. On the fifth issue, NLRC sustained the ruling of the POEA Administrator that BRII and AIBC are solidarily liable for the claims of the complainants and held that BRII was the actual employer of the complainants, or at the very least, the indirect employer, with AIBC as the labor contractor. NLRC also held that jurisdiction over BRII was acquired by the POEA Administrator through the summons served on AIBC, its local agent. On the sixth issue, NLRC held that the POEA Administrator was correct in denying the Motion to Declare AIBC in default. On the seventh issue, which involved other money claims not based on the Amiri Decree No. 23, NLRC ruled: (1) that the POEA Administrator has no jurisdiction over the claims for refund of the SSS premiums and refund of withholding taxes and the claimants should file their claims for said refund with the appropriate government agencies; (2) the claimants failed to establish that they are entitled to the claims which are not based on the overseas employment contracts nor the Amiri Decree No. 23 of 1976; (3) that the POEA Administrator has no jurisdiction over claims for moral and exemplary damages and nonetheless, the basis for granting said damages was not established; (4) that the claims for salaries corresponding to the unexpired portion of their contract may be allowed if filed within the three-year prescriptive period; (5) that the allegation that complainants were prematurely repatriated prior to the expiration of their overseas contract was not established; and (6) that the POEA Administrator has no jurisdiction over the complaint for the suspension or cancellation of the AIBC's recruitment license and the cancellation of the accreditation of BRII. NLRC passed sub silencio the last issue, the claim that POEA Case No. (L) 86-65-460 should have been dismissed on the ground that the claimants in said case were also claimants in POEA Case No. (L) 84-06-555. Instead of dismissing POEA Case No. (L) 86-65-460, the POEA just resolved the corresponding claims in POEA Case No. (L) 84-06-555. In other words, the POEA did not pass upon the same claims twice.

V G.R. No. 104776 Claimants in G.R. No. 104776 based their petition for certiorari on the following grounds: (1) that they were deprived by NLRC and the POEA of their right to a speedy disposition of their cases as guaranteed by Section 16, Article III of the 1987 Constitution. The POEA Administrator allowed private respondents to file their answers in two years (on June 19, 1987) after the filing of the original complaint (on April 2, 1985) and NLRC, in total disregard of its own rules, affirmed the action of the POEA Administrator; (2) that NLRC and the POEA Administrator should have declared AIBC and BRII in default and should have rendered summary judgment on the basis of the pleadings and evidence submitted by claimants; (3) the NLRC and POEA Administrator erred in not holding that the labor cases filed by AIBC and BRII cannot be considered a class suit; (4) that the prescriptive period for the filing of the claims is ten years; and (5) that NLRC and the POEA Administrator should have dismissed POEA Case No. L-86-05-460, the case filed by Atty. Florante de Castro (Rollo, pp. 31-40). AIBC and BRII, commenting on the petition in G.R. No. 104776, argued: (1) that they were not responsible for the delay in the disposition of the labor cases, considering the great difficulty of getting all the records of the more than 1,500 claimants, the piece-meal filing of the complaints and the addition of hundreds of new claimants by petitioners; (2) that considering the number of complaints and claimants, it was impossible to prepare the answers within the ten-day period provided in the NLRC Rules, that when the motion to declare AIBC in default was filed on July 19, 1987, said party had already filed its answer, and that considering the staggering amount of the claims (more than US$50,000,000.00) and the complicated issues raised by the parties, the ten-day rule to answer was not fair and reasonable; (3) that the claimants failed to refute NLRC's finding that there was no common or general interest in the subject matter of the controversy which was the applicability of the Amiri Decree No. 23. Likewise, the nature of the claims varied, some being based on salaries pertaining to the unexpired portion of the contracts while others being for pure money claims. Each claimant demanded separate claims peculiar only to himself and depending upon the particular circumstances obtaining in his case; (4) that the prescriptive period for filing the claims is that prescribed by Article 291 of the Labor Code of the Philippines (three years) and not the one prescribed by Article 1144 of the Civil Code of the Philippines (ten years); and

(5) that they are not concerned with the issue of whether POEA Case No. L-86-05460 should be dismissed, this being a private quarrel between the two labor lawyers (Rollo, pp. 292-305). Attorney's Lien On November 12, 1992, Atty. Gerardo A. del Mundo moved to strike out the joint manifestations and motions of AIBC and BRII dated September 2 and 11, 1992, claiming that all the claimants who entered into the compromise agreements subject of said manifestations and motions were his clients and that Atty. Florante M. de Castro had no right to represent them in said agreements. He also claimed that the claimants were paid less than the award given them by NLRC; that Atty. De Castro collected additional attorney's fees on top of the 25% which he was entitled to receive; and that the consent of the claimants to the compromise agreements and quitclaims were procured by fraud (G.R. No. 104776, Rollo, pp. 838-810). In the Resolution dated November 23, 1992, the Court denied the motion to strike out the Joint Manifestations and Motions dated September 2 and 11, 1992 (G.R. Nos. 104911-14, Rollo, pp. 608-609). On December 14, 1992, Atty. Del Mundo filed a "Notice and Claim to Enforce Attorney's Lien," alleging that the claimants who entered into compromise agreements with AIBC and BRII with the assistance of Atty. De Castro, had all signed a retainer agreement with his law firm (G.R. No. 104776, Rollo, pp. 623-624; 838-1535). Contempt of Court On February 18, 1993, an omnibus motion was filed by Atty. Del Mundo to cite Atty. De Castro and Atty. Katz Tierra for contempt of court and for violation of Canons 1, 15 and 16 of the Code of Professional Responsibility. The said lawyers allegedly misled this Court, by making it appear that the claimants who entered into the compromise agreements were represented by Atty. De Castro, when in fact they were represented by Atty. Del Mundo (G.R. No. 104776, Rollo, pp. 1560-1614). On September 23, 1994, Atty. Del Mundo reiterated his charges against Atty. De Castro for unethical practices and moved for the voiding of the quitclaims submitted by some of the claimants. G.R. Nos. 104911-14 The claimants in G.R. Nos. 104911-14 based their petition for certiorari on the grounds that NLRC gravely abused its discretion when it: (1) applied the three-year prescriptive period under the Labor Code of the Philippines; and (2) it denied the claimant's formula based on an average overtime pay of three hours a day (Rollo, pp. 18-22). The claimants argue that said method was proposed by BRII itself during the negotiation for an amicable settlement of their money claims in Bahrain as shown in the Memorandum dated April 16, 1983 of the Ministry of Labor of Bahrain (Rollo, pp. 21-22). BRII and AIBC, in their Comment, reiterated their contention in G.R. No. 104776 that the prescriptive period in the Labor Code of the Philippines, a special law, prevails over that provided in the Civil Code of the Philippines, a general law. As to the memorandum of the Ministry of Labor of Bahrain on the method of computing the overtime pay, BRII and AIBC claimed that they were not bound by what appeared therein, because such memorandum was proposed by a subordinate Bahrain official and there was no showing that it was

approved by the Bahrain Minister of Labor. Likewise, they claimed that the averaging method was discussed in the course of the negotiation for the amicable settlement of the dispute and any offer made by a party therein could not be used as an admission by him (Rollo, pp. 228-236). G.R. Nos. 105029-32 In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC gravely abused its discretion when it: (1) enforced the provisions of the Amiri Decree No. 23 of 1976 and not the terms of the employment contracts; (2) granted claims for holiday, overtime and leave indemnity pay and other benefits, on evidence admitted in contravention of petitioner's constitutional right to due process; and (3) ordered the POEA Administrator to hold new hearings for the 683 claimants whose claims had been dismissed for lack of proof by the POEA Administrator or NLRC itself. Lastly, they allege that assuming that the Amiri Decree No. 23 of 1976 was applicable, NLRC erred when it did not apply the one-year prescription provided in said law (Rollo, pp. 29-30). VI G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos. 105029-32 All the petitions raise the common issue of prescription although they disagreed as to the time that should be embraced within the prescriptive period. To the POEA Administrator, the prescriptive period was ten years, applying Article 1144 of the Civil Code of the Philippines. NLRC believed otherwise, fixing the prescriptive period at three years as provided in Article 291 of the Labor Code of the Philippines. The claimants in G.R. No. 104776 and G.R. Nos. 104911-14, invoking different grounds, insisted that NLRC erred in ruling that the prescriptive period applicable to the claims was three years, instead of ten years, as found by the POEA Administrator. The Solicitor General expressed his personal view that the prescriptive period was one year as prescribed by the Amiri Decree No. 23 of 1976 but he deferred to the ruling of NLRC that Article 291 of the Labor Code of the Philippines was the operative law. The POEA Administrator held the view that: These money claims (under Article 291 of the Labor Code) refer to those arising from the employer's violation of the employee's right as provided by the Labor Code. In the instant case, what the respondents violated are not the rights of the workers as provided by the Labor Code, but the provisions of the Amiri Decree No. 23 issued in Bahrain, which ipso factoamended the worker's contracts of employment. Respondents consciously failed to conform to these provisions which specifically provide for the increase of the worker's rate. It was only after June 30, 1983, four months after the brown builders brought a suit against B & R in Bahrain for this same claim, when respondent AIBC's contracts have undergone amendments in Bahrain for the new hires/renewals (Respondent's Exhibit 7). Hence, premises considered, the applicable law of prescription to this instant case is Article 1144 of the Civil Code of the Philippines, which provides:

Art. 1144. The following actions may be brought within ten years from the time the cause of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; Thus, herein money claims of the complainants against the respondents shall prescribe in ten years from August 16, 1976. Inasmuch as all claims were filed within the ten-year prescriptive period, no claim suffered the infirmity of being prescribed (G.R. No. 104776, Rollo, 89-90). In overruling the POEA Administrator, and holding that the prescriptive period is three years as provided in Article 291 of the Labor Code of the Philippines, the NLRC argued as follows: The Labor Code provides that "all money claims arising from employer-employee relations . . . shall be filed within three years from the time the cause of action accrued; otherwise they shall be forever barred" (Art. 291, Labor Code, as amended). This three-year prescriptive period shall be the one applied here and which should be reckoned from the date of repatriation of each individual complainant, considering the fact that the case is having (sic) filed in this country. We do not agree with the POEA Administrator that this three-year prescriptive period applies only to money claims specifically recoverable under the Philippine Labor Code. Article 291 gives no such indication. Likewise, We can not consider complainants' cause/s of action to have accrued from a violation of their employment contracts. There was no violation; the claims arise from the benefits of the law of the country where they worked. (G.R. No. 104776, Rollo, pp. 90-91). Anent the applicability of the one-year prescriptive period as provided by the Amiri Decree No. 23 of 1976, NLRC opined that the applicability of said law was one of characterization, i.e., whether to characterize the foreign law on prescription or statute of limitation as "substantive" or "procedural." NLRC cited the decision in Bournias v. Atlantic Maritime Company (220 F. 2d. 152, 2d Cir. [1955], where the issue was the applicability of the Panama Labor Code in a case filed in the State of New York for claims arising from said Code. In said case, the claims would have prescribed under the Panamanian Law but not under the Statute of Limitations of New York. The U.S. Circuit Court of Appeals held that the Panamanian Law was procedural as it was not "specifically intended to be substantive," hence, the prescriptive period provided in the law of the forum should apply. The Court observed: . . . And where, as here, we are dealing with a statute of limitations of a foreign country, and it is not clear on the face of the statute that its purpose was to limit the enforceability, outside as well as within the foreign country concerned, of the substantive rights to which the statute pertains, we think that as a yardstick for determining whether that was the purpose this test is the most satisfactory one. It does not lead American courts into the necessity of examining into the unfamiliar peculiarities and refinements of different foreign legal systems. . . The court further noted: xxx xxx xxx

Applying that test here it appears to us that the libelant is entitled to succeed, for the respondents have failed to satisfy us that the Panamanian period of limitation in question was specifically aimed against the particular rights which the libelant seeks to enforce. The Panama Labor Code is a statute having broad objectives, viz: "The present Code regulates the relations between capital and labor, placing them on a basis of social justice, so that, without injuring any of the parties, there may be guaranteed for labor the necessary conditions for a normal life and to capital an equitable return to its investment." In pursuance of these objectives the Code gives laborers various rights against their employers. Article 623 establishes the period of limitation for all such rights, except certain ones which are enumerated in Article 621. And there is nothing in the record to indicate that the Panamanian legislature gave special consideration to the impact of Article 623 upon the particular rights sought to be enforced here, as distinguished from the other rights to which that Article is also applicable. Were we confronted with the question of whether the limitation period of Article 621 (which carves out particular rights to be governed by a shorter limitation period) is to be regarded as "substantive" or "procedural" under the rule of "specifity" we might have a different case; but here on the surface of things we appear to be dealing with a "broad," and not a "specific," statute of limitations (G.R. No. 104776, Rollo, pp. 92-94). Claimants in G.R. Nos. 104911-14 are of the view that Article 291 of the Labor Code of the Philippines, which was applied by NLRC, refers only to claims "arising from the employer's violation of the employee's right as provided by the Labor Code." They assert that their claims are based on the violation of their employment contracts, as amended by the Amiri Decree No. 23 of 1976 and therefore the claims may be brought within ten years as provided by Article 1144 of the Civil Code of the Philippines (Rollo, G.R. Nos. 104911-14, pp. 18-21). To bolster their contention, they cite PALEA v. Philippine Airlines, Inc., 70 SCRA 244 (1976). AIBC and BRII, insisting that the actions on the claims have prescribed under the Amiri Decree No. 23 of 1976, argue that there is in force in the Philippines a "borrowing law," which is Section 48 of the Code of Civil Procedure and that where such kind of law exists, it takes precedence over the common-law conflicts rule (G.R. No. 104776,Rollo, pp. 45-46). First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law. Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the date of the expiry of the contract. (G.R. Nos. 105029-31, Rollo, p. 226). As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]). A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on the characterization given such a law.

Thus in Bournias v. Atlantic Maritime Company, supra, the American court applied the statute of limitations of New York, instead of the Panamanian law, after finding that there was no showing that the Panamanian law on prescription was intended to be substantive. Being considered merely a procedural law even in Panama, it has to give way to the law of the forum on prescription of actions. However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a "borrowing statute." Said statute has the practical effect of treating the foreign statute of limitation as one of substance (Goodrich, Conflict of Laws 152-153 [1938]). A "borrowing statute" directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of "borrowing statutes," one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides: If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippines Islands. Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedures as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine Conflict of Laws 104 [7th ed.]). In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976. The courts of the forum will not enforce any foreign claim obnoxious to the forum's public policy (Canadian Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor. In the Declaration of Principles and State Policies, the 1987 Constitution emphasized that: The state shall promote social justice in all phases of national development. (Sec. 10). The state affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare (Sec. 18). In article XIII on Social Justice and Human Rights, the 1987 Constitution provides: Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. Having determined that the applicable law on prescription is the Philippine law, the next question is whether the prescriptive period governing the filing of the claims is three years, as provided by the Labor Code or ten years, as provided by the Civil Code of the Philippines.

The claimants are of the view that the applicable provision is Article 1144 of the Civil Code of the Philippines, which provides: The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. NLRC, on the other hand, believes that the applicable provision is Article 291 of the Labor Code of the Philippines, which in pertinent part provides: Money claims-all money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued, otherwise they shall be forever barred. xxx xxx xxx The case of Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 70 SCRA 244 (1976) invoked by the claimants in G.R. Nos. 104911-14 is inapplicable to the cases at bench (Rollo, p. 21). The said case involved the correct computation of overtime pay as provided in the collective bargaining agreements and not the Eight-Hour Labor Law. As noted by the Court: "That is precisely why petitioners did not make any reference as to the computation for overtime work under the Eight-Hour Labor Law (Secs. 3 and 4, CA No. 494) and instead insisted that work computation provided in the collective bargaining agreements between the parties be observed. Since the claim for pay differentials is primarily anchored on the written contracts between the litigants, the ten-year prescriptive period provided by Art. 1144(1) of the New Civil Code should govern." Section 7-a of the Eight-Hour Labor Law (CA No. 444 as amended by R.A. No. 19933) provides: Any action to enforce any cause of action under this Act shall be commenced within three years after the cause of action accrued otherwise such action shall be forever barred, . . . . The court further explained: The three-year prescriptive period fixed in the Eight-Hour Labor Law (CA No. 444 as amended) will apply, if the claim for differentials for overtime work is solely based on said law, and not on a collective bargaining agreement or any other contract. In the instant case, the claim for overtime compensation is not so much because of Commonwealth Act No. 444, as amended but because the claim is demandable right of the employees, by reason of the above-mentioned collective bargaining agreement. Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for filing "actions to enforce any cause of action under said law." On the other hand, Article 291 of the Labor Code of the

Philippines provides the prescriptive period for filing "money claims arising from employer-employee relations." The claims in the cases at bench all arose from the employer-employee relations, which is broader in scope than claims arising from a specific law or from the collective bargaining agreement. The contention of the POEA Administrator, that the three-year prescriptive period under Article 291 of the Labor Code of the Philippines applies only to money claims specifically recoverable under said Code, does not find support in the plain language of the provision. Neither is the contention of the claimants in G.R. Nos. 104911-14 that said Article refers only to claims "arising from the employer's violation of the employee's right," as provided by the Labor Code supported by the facial reading of the provision. VII G.R. No. 104776 A. As to the first two grounds for the petition in G.R. No. 104776, claimants aver: (1) that while their complaints were filed on June 6, 1984 with POEA, the case was decided only on January 30, 1989, a clear denial of their right to a speedy disposition of the case; and (2) that NLRC and the POEA Administrator should have declared AIBC and BRII in default (Rollo, pp. 31-35). Claimants invoke a new provision incorporated in the 1987 Constitution, which provides: Sec. 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies. It is true that the constitutional right to "a speedy disposition of cases" is not limited to the accused in criminal proceedings but extends to all parties in all cases, including civil and administrative cases, and in all proceedings, including judicial and quasi-judicial hearings. Hence, under the Constitution, any party to a case may demand expeditious action on all officials who are tasked with the administration of justice. However, as held in Caballero v. Alfonso, Jr., 153 SCRA 153 (1987), "speedy disposition of cases" is a relative term. Just like the constitutional guarantee of "speedy trial" accorded to the accused in all criminal proceedings, "speedy disposition of cases" is a flexible concept. It is consistent with delays and depends upon the circumstances of each case. What the Constitution prohibits are unreasonable, arbitrary and oppressive delays which render rights nugatory. Caballero laid down the factors that may be taken into consideration in determining whether or not the right to a "speedy disposition of cases" has been violated, thus: In the determination of whether or not the right to a "speedy trial" has been violated, certain factors may be considered and balanced against each other. These are length of delay, reason for the delay, assertion of the right or failure to assert it, and prejudice caused by the delay. The same factors may also be considered in answering judicial inquiry whether or not a person officially charged with the administration of justice has violated the speedy disposition of cases. Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298, (1991), we held:

It must be here emphasized that the right to a speedy disposition of a case, like the right to speedy trial, is deemed violated only when the proceeding is attended by vexatious, capricious, and oppressive delays; or when unjustified postponements of the trial are asked for and secured, or when without cause or justified motive a long period of time is allowed to elapse without the party having his case tried. Since July 25, 1984 or a month after AIBC and BRII were served with a copy of the amended complaint, claimants had been asking that AIBC and BRII be declared in default for failure to file their answers within the ten-day period provided in Section 1, Rule III of Book VI of the Rules and Regulations of the POEA. At that time, there was a pending motion of AIBC and BRII to strike out of the records the amended complaint and the "Compliance" of claimants to the order of the POEA, requiring them to submit a bill of particulars. The cases at bench are not of the run-of-the-mill variety, such that their final disposition in the administrative level after seven years from their inception, cannot be said to be attended by unreasonable, arbitrary and oppressive delays as to violate the constitutional rights to a speedy disposition of the cases of complainants. The amended complaint filed on June 6, 1984 involved a total of 1,767 claimants. Said complaint had undergone several amendments, the first being on April 3, 1985. The claimants were hired on various dates from 1975 to 1983. They were deployed in different areas, one group in and the other groups outside of, Bahrain. The monetary claims totalling more than US$65 million according to Atty. Del Mundo, included: 1. Unexpired portion of contract; 2. Interest earnings of Travel and Fund; 3. Retirement and Savings Plan benefit; 4. War Zone bonus or premium pay of at least 100% of basic pay; 5. Area Differential pay; 6. Accrued Interest of all the unpaid benefits; 7. Salary differential pay; 8. Wage Differential pay; 9. Refund of SSS premiums not remitted to Social Security System; 10. Refund of Withholding Tax not remitted to Bureau of Internal Revenue (B.I.R.); 11. Fringe Benefits under Brown & Root's "A Summary of Employees Benefits consisting of 43 pages (Annex "Q" of Amended Complaint); 12. Moral and Exemplary Damages;

13. Attorney's fees of at least ten percent of amounts; 14. Other reliefs, like suspending and/or cancelling the license to recruit of AIBC and issued by the POEA; and 15. Penalty for violation of Article 34 (Prohibited practices) not excluding reportorial requirements thereof (NLRC Resolution, September 2, 1991, pp. 18-19; G.R. No. 104776, Rollo, pp. 73-74). Inasmuch as the complaint did not allege with sufficient definiteness and clarity of some facts, the claimants were ordered to comply with the motion of AIBC for a bill of particulars. When claimants filed their "Compliance and Manifestation," AIBC moved to strike out the complaint from the records for failure of claimants to submit a proper bill of particulars. While the POEA Administrator denied the motion to strike out the complaint, he ordered the claimants "to correct the deficiencies" pointed out by AIBC. Before an intelligent answer could be filed in response to the complaint, the records of employment of the more than 1,700 claimants had to be retrieved from various countries in the Middle East. Some of the records dated as far back as 1975. The hearings on the merits of the claims before the POEA Administrator were interrupted several times by the various appeals, first to NLRC and then to the Supreme Court. Aside from the inclusion of additional claimants, two new cases were filed against AIBC and BRII on October 10, 1985 (POEA Cases Nos. L-85-10-777 and L-85-10-779). Another complaint was filed on May 29, 1986 (POEA Case No. L-8605-460). NLRC, in exasperation, noted that the exact number of claimants had never been completely established (Resolution, Sept. 2, 1991, G.R. No. 104776, Rollo, p. 57). All the three new cases were consolidated with POEA Case No. L-84-06-555. NLRC blamed the parties and their lawyers for the delay in terminating the proceedings, thus: These cases could have been spared the long and arduous route towards resolution had the parties and their counsel been more interested in pursuing the truth and the merits of the claims rather than exhibiting a fanatical reliance on technicalities. Parties and counsel have made these cases a litigation of emotion. The intransigence of parties and counsel is remarkable. As late as last month, this Commission made a last and final attempt to bring the counsel of all the parties (this Commission issued a special order directing respondent Brown & Root's resident agent/s to appear) to come to a more conciliatory stance. Even this failed (Rollo, p. 58). The squabble between the lawyers of claimants added to the delay in the disposition of the cases, to the lament of NLRC, which complained: It is very evident from the records that the protagonists in these consolidated cases appear to be not only the individual complainants, on the one hand, and AIBC and Brown & Root, on the other hand. The two lawyers for the complainants, Atty. Gerardo Del Mundo and Atty. Florante De Castro, have yet to settle the right of representation, each one persistently claiming to appear in behalf of most of the complainants. As a result, there are two appeals by the complainants. Attempts by this Commission to resolve counsels' conflicting claims of their respective authority to

represent the complainants prove futile. The bickerings by these two counsels are reflected in their pleadings. In the charges and countercharges of falsification of documents and signatures, and in the disbarment proceedings by one against the other. All these have, to a large extent, abetted in confounding the issues raised in these cases, jumble the presentation of evidence, and even derailed the prospects of an amicable settlement. It would not be far-fetched to imagine that both counsel, unwittingly, perhaps, painted a rainbow for the complainants, with the proverbial pot of gold at its end containing more than US$100 million, the aggregate of the claims in these cases. It is, likewise, not improbable that their misplaced zeal and exuberance caused them to throw all caution to the wind in the matter of elementary rules of procedure and evidence (Rollo, pp. 58-59). Adding to the confusion in the proceedings before NLRC, is the listing of some of the complainants in both petitions filed by the two lawyers. As noted by NLRC, "the problem created by this situation is that if one of the two petitions is dismissed, then the parties and the public respondents would not know which claim of which petitioner was dismissed and which was not." B. Claimants insist that all their claims could properly be consolidated in a "class suit" because "all the named complainants have similar money claims and similar rights sought irrespective of whether they worked in Bahrain, United Arab Emirates or in Abu Dhabi, Libya or in any part of the Middle East" (Rollo, pp. 35-38). A class suit is proper where the subject matter of the controversy is one of common or general interest to many and the parties are so numerous that it is impracticable to bring them all before the court (Revised Rules of Court, Rule 3, Sec. 12). While all the claims are for benefits granted under the Bahrain Law, many of the claimants worked outside Bahrain. Some of the claimants were deployed in Indonesia and Malaysia under different terms and conditions of employment. NLRC and the POEA Administrator are correct in their stance that inasmuch as the first requirement of a class suit is not present (common or general interest based on the Amiri Decree of the State of Bahrain), it is only logical that only those who worked in Bahrain shall be entitled to file their claims in a class suit. While there are common defendants (AIBC and BRII) and the nature of the claims is the same (for employee's benefits), there is no common question of law or fact. While some claims are based on the Amiri Law of Bahrain, many of the claimants never worked in that country, but were deployed elsewhere. Thus, each claimant is interested only in his own demand and not in the claims of the other employees of defendants. The named claimants have a special or particular interest in specific benefits completely different from the benefits in which the other named claimants and those included as members of a "class" are claiming (Berses v. Villanueva, 25 Phil. 473 [1913]). It appears that each claimant is only interested in collecting his own claims. A claimants has no concern in protecting the interests of the other claimants as shown by the fact, that hundreds of them have abandoned their co-claimants and have entered into separate compromise settlements of their respective claims. A principle basic to the concept of "class suit" is that plaintiffs brought on the record must fairly represent and protect the interests of the others (Dimayuga v. Court of Industrial Relations, 101 Phil. 590 [1957]). For this matter, the claimants who worked in Bahrain can not be allowed to sue in a class suit in a judicial proceeding. The most that can be accorded to them under the Rules of Court is to be allowed to join as plaintiffs in one complaint (Revised Rules of Court, Rule 3, Sec. 6).

The Court is extra-cautious in allowing class suits because they are the exceptions to the condition sine qua non, requiring the joinder of all indispensable parties. In an improperly instituted class suit, there would be no problem if the decision secured is favorable to the plaintiffs. The problem arises when the decision is adverse to them, in which case the others who were impleaded by their self-appointed representatives, would surely claim denial of due process. C. The claimants in G.R. No. 104776 also urged that the POEA Administrator and NLRC should have declared Atty. Florante De Castro guilty of "forum shopping, ambulance chasing activities, falsification, duplicity and other unprofessional activities" and his appearances as counsel for some of the claimants as illegal (Rollo, pp. 38-40). The Anti-Forum Shopping Rule (Revised Circular No. 28-91) is intended to put a stop to the practice of some parties of filing multiple petitions and complaints involving the same issues, with the result that the courts or agencies have to resolve the same issues. Said Rule, however, applies only to petitions filed with the Supreme Court and the Court of Appeals. It is entitled "Additional Requirements For Petitions Filed with the Supreme Court and the Court of Appeals To Prevent Forum Shopping or Multiple Filing of Petitioners and Complainants." The first sentence of the circular expressly states that said circular applies to an governs the filing of petitions in the Supreme Court and the Court of Appeals. While Administrative Circular No. 04-94 extended the application of the anti-forum shopping rule to the lower courts and administrative agencies, said circular took effect only on April 1, 1994. POEA and NLRC could not have entertained the complaint for unethical conduct against Atty. De Castro because NLRC and POEA have no jurisdiction to investigate charges of unethical conduct of lawyers. Attorney's Lien The "Notice and Claim to Enforce Attorney's Lien" dated December 14, 1992 was filed by Atty. Gerardo A. Del Mundo to protect his claim for attorney's fees for legal services rendered in favor of the claimants (G.R. No. 104776, Rollo, pp. 841-844). A statement of a claim for a charging lien shall be filed with the court or administrative agency which renders and executes the money judgment secured by the lawyer for his clients. The lawyer shall cause written notice thereof to be delivered to his clients and to the adverse party (Revised Rules of Court, Rule 138, Sec. 37). The statement of the claim for the charging lien of Atty. Del Mundo should have been filed with the administrative agency that rendered and executed the judgment. Contempt of Court The complaint of Atty. Gerardo A. Del Mundo to cite Atty. Florante De Castro and Atty. Katz Tierra for violation of the Code of Professional Responsibility should be filed in a separate and appropriate proceeding. G.R. No. 104911-14 Claimants charge NLRC with grave abuse of discretion in not accepting their formula of "Three Hours Average Daily Overtime" in computing the overtime payments. They claim that it was BRII

itself which proposed the formula during the negotiations for the settlement of their claims in Bahrain and therefore it is in estoppel to disclaim said offer (Rollo, pp. 21-22). Claimants presented a Memorandum of the Ministry of Labor of Bahrain dated April 16, 1983, which in pertinent part states: After the perusal of the memorandum of the Vice President and the Area Manager, Middle East, of Brown & Root Co. and the Summary of the compensation offered by the Company to the employees in respect of the difference of pay of the wages of the overtime and the difference of vacation leave and the perusal of the documents attached thereto i.e., minutes of the meetings between the Representative of the employees and the management of the Company, the complaint filed by the employees on 14/2/83 where they have claimed as hereinabove stated, sample of the Service Contract executed between one of the employees and the company through its agent in (sic)Philippines, Asia International Builders Corporation where it has been provided for 48 hours of work per week and an annual leave of 12 days and an overtime wage of 1 & 1/4 of the normal hourly wage. xxx xxx xxx The Company in its computation reached the following averages: A. 1. The average duration of the actual service of the employee is 35 months for the Philippino (sic) employees . . . . 2. The average wage per hour for the Philippino (sic) employee is US$2.69 . . . . 3. The average hours for the overtime is 3 hours plus in all public holidays and weekends. 4. Payment of US$8.72 per months (sic) of service as compensation for the difference of the wages of the overtime done for each Philippino (sic) employee . . . (Rollo, p.22). BRII and AIBC countered: (1) that the Memorandum was not prepared by them but by a subordinate official in the Bahrain Department of Labor; (2) that there was no showing that the Bahrain Minister of Labor had approved said memorandum; and (3) that the offer was made in the course of the negotiation for an amicable settlement of the claims and therefore it was not admissible in evidence to prove that anything is due to the claimants. While said document was presented to the POEA without observing the rule on presenting official documents of a foreign government as provided in Section 24, Rule 132 of the 1989 Revised Rules on Evidence, it can be admitted in evidence in proceedings before an administrative body. The opposing parties have a copy of the said memorandum, and they could easily verify its authenticity and accuracy. The admissibility of the offer of compromise made by BRII as contained in the memorandum is another matter. Under Section 27, Rule 130 of the 1989 Revised Rules on Evidence, an offer to settle a claim is not an admission that anything is due. Said Rule provides:

Offer of compromise not admissible. In civil cases, an offer of compromise is not an admission of any liability, and is not admissible in evidence against the offeror. This Rule is not only a rule of procedure to avoid the cluttering of the record with unwanted evidence but a statement of public policy. There is great public interest in having the protagonists settle their differences amicable before these ripen into litigation. Every effort must be taken to encourage them to arrive at a settlement. The submission of offers and counter-offers in the negotiation table is a step in the right direction. But to bind a party to his offers, as what claimants would make this Court do, would defeat the salutary purpose of the Rule. G.R. Nos. 105029-32 A. NLRC applied the Amiri Decree No. 23 of 1976, which provides for greater benefits than those stipulated in the overseas-employment contracts of the claimants. It was of the belief that "where the laws of the host country are more favorable and beneficial to the workers, then the laws of the host country shall form part of the overseas employment contract." It quoted with approval the observation of the POEA Administrator that ". . . in labor proceedings, all doubts in the implementation of the provisions of the Labor Code and its implementing regulations shall be resolved in favor of labor" (Rollo, pp. 90-94). AIBC and BRII claim that NLRC acted capriciously and whimsically when it refused to enforce the overseas-employment contracts, which became the law of the parties. They contend that the principle that a law is deemed to be a part of a contract applies only to provisions of Philippine law in relation to contracts executed in the Philippines. The overseas-employment contracts, which were prepared by AIBC and BRII themselves, provided that the laws of the host country became applicable to said contracts if they offer terms and conditions more favorable that those stipulated therein. It was stipulated in said contracts that: The Employee agrees that while in the employ of the Employer, he will not engage in any other business or occupation, nor seek employment with anyone other than the Employer; that he shall devote his entire time and attention and his best energies, and abilities to the performance of such duties as may be assigned to him by the Employer; that he shall at all times be subject to the direction and control of the Employer; and that the benefits provided to Employee hereunder are substituted for and in lieu of all other benefits provided by any applicable law, provided of course, that total remuneration and benefits do not fall below that of the host country regulation or custom, it being understood that should applicable laws establish that fringe benefits, or other such benefits additional to the compensation herein agreed cannot be waived, Employee agrees that such compensation will be adjusted downward so that the total compensation hereunder, plus the non-waivable benefits shall be equivalent to the compensation herein agreed (Rollo, pp. 352-353). The overseas-employment contracts could have been drafted more felicitously. While a part thereof provides that the compensation to the employee may be "adjusted downward so that the total computation (thereunder) plus the non-waivable benefits shall be equivalent to the compensation" therein agreed, another part of the same provision categorically states "that total remuneration and benefits do not fall below that of the host country regulation and custom." Any ambiguity in the overseas-employment contracts should be interpreted against AIBC and BRII, the parties that drafted it (Eastern Shipping Lines, Inc. v. Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).

Article 1377 of the Civil Code of the Philippines provides: The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. Said rule of interpretation is applicable to contracts of adhesion where there is already a prepared form containing the stipulations of the employment contract and the employees merely "take it or leave it." The presumption is that there was an imposition by one party against the other and that the employees signed the contracts out of necessity that reduced their bargaining power (Fieldmen's Insurance Co., Inc. v. Songco, 25 SCRA 70 [1968]). Applying the said legal precepts, we read the overseas-employment contracts in question as adopting the provisions of the Amiri Decree No. 23 of 1976 as part and parcel thereof. The parties to a contract may select the law by which it is to be governed (Cheshire, Private International Law, 187 [7th ed.]). In such a case, the foreign law is adopted as a "system" to regulate the relations of the parties, including questions of their capacity to enter into the contract, the formalities to be observed by them, matters of performance, and so forth (16 Am Jur 2d, 150-161). Instead of adopting the entire mass of the foreign law, the parties may just agree that specific provisions of a foreign statute shall be deemed incorporated into their contract "as a set of terms." By such reference to the provisions of the foreign law, the contract does not become a foreign contract to be governed by the foreign law. The said law does not operate as a statute but as a set of contractual terms deemed written in the contract (Anton, Private International Law, 197 [1967]; Dicey and Morris, The Conflict of Laws, 702-703, [8th ed.]). A basic policy of contract is to protect the expectation of the parties (Reese, Choice of Law in Torts and Contracts, 16 Columbia Journal of Transnational Law 1, 21 [1977]). Such party expectation is protected by giving effect to the parties' own choice of the applicable law (Fricke v. Isbrandtsen Co., Inc., 151 F. Supp. 465, 467 [1957]). The choice of law must, however, bear some relationship to the parties or their transaction (Scoles and Hayes, Conflict of Law 644-647 [1982]). There is no question that the contracts sought to be enforced by claimants have a direct connection with the Bahrain law because the services were rendered in that country. In Norse Management Co. (PTE) v. National Seamen Board, 117 SCRA 486 (1982), the "Employment Agreement," between Norse Management Co. and the late husband of the private respondent, expressly provided that in the event of illness or injury to the employee arising out of and in the course of his employment and not due to his own misconduct, "compensation shall be paid to employee in accordance with and subject to the limitation of the Workmen's Compensation Act of the Republic of the Philippines or the Worker's Insurance Act of registry of the vessel, whichever is greater." Since the laws of Singapore, the place of registry of the vessel in which the late husband of private respondent served at the time of his death, granted a better compensation package, we applied said foreign law in preference to the terms of the contract. The case of Bagong Filipinas Overseas Corporation v. National Labor Relations Commission, 135 SCRA 278 (1985), relied upon by AIBC and BRII is inapposite to the facts of the cases at bench. The issue in that case was whether the amount of the death compensation of a Filipino seaman should be determined under the shipboard employment contract executed in the Philippines or the Hongkong law. Holding that the shipboard employment contract was controlling, the court differentiated said case from Norse Management Co. in that in the latter case there was an express

stipulation in the employment contract that the foreign law would be applicable if it afforded greater compensation. B. AIBC and BRII claim that they were denied by NLRC of their right to due process when said administrative agency granted Friday-pay differential, holiday-pay differential, annual-leave differential and leave indemnity pay to the claimants listed in Annex B of the Resolution. At first, NLRC reversed the resolution of the POEA Administrator granting these benefits on a finding that the POEA Administrator failed to consider the evidence presented by AIBC and BRII, that some findings of fact of the POEA Administrator were not supported by the evidence, and that some of the evidence were not disclosed to AIBC and BRII (Rollo, pp. 35-36; 106-107). But instead of remanding the case to the POEA Administrator for a new hearing, which means further delay in the termination of the case, NLRC decided to pass upon the validity of the claims itself. It is this procedure that AIBC and BRII complain of as being irregular and a "reversible error." They pointed out that NLRC took into consideration evidence submitted on appeal, the same evidence which NLRC found to have been "unilaterally submitted by the claimants and not disclosed to the adverse parties" (Rollo, pp. 37-39). NLRC noted that so many pieces of evidentiary matters were submitted to the POEA administrator by the claimants after the cases were deemed submitted for resolution and which were taken cognizance of by the POEA Administrator in resolving the cases. While AIBC and BRII had no opportunity to refute said evidence of the claimants before the POEA Administrator, they had all the opportunity to rebut said evidence and to present their counter-evidence before NLRC. As a matter of fact, AIBC and BRII themselves were able to present before NLRC additional evidence which they failed to present before the POEA Administrator. Under Article 221 of the Labor Code of the Philippines, NLRC is enjoined to "use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process." In deciding to resolve the validity of certain claims on the basis of the evidence of both parties submitted before the POEA Administrator and NLRC, the latter considered that it was not expedient to remand the cases to the POEA Administrator for that would only prolong the already protracted legal controversies. Even the Supreme Court has decided appealed cases on the merits instead of remanding them to the trial court for the reception of evidence, where the same can be readily determined from the uncontroverted facts on record (Development Bank of the Philippines v. Intermediate Appellate Court, 190 SCRA 653 [1990]; Pagdonsalan v. National Labor Relations Commission, 127 SCRA 463 [1984]). C. AIBC and BRII charge NLRC with grave abuse of discretion when it ordered the POEA Administrator to hold new hearings for 683 claimants listed in Annex D of the Resolution dated September 2, 1991 whose claims had been denied by the POEA Administrator "for lack of proof" and for 69 claimants listed in Annex E of the same Resolution, whose claims had been found by NLRC itself as not "supported by evidence" (Rollo, pp. 41-45). NLRC based its ruling on Article 218(c) of the Labor Code of the Philippines, which empowers it "[to] conduct investigation for the determination of a question, matter or controversy, within its jurisdiction, . . . ."

It is the posture of AIBC and BRII that NLRC has no authority under Article 218(c) to remand a case involving claims which had already been dismissed because such provision contemplates only situations where there is still a question or controversy to be resolved (Rollo, pp. 41-42). A principle well embedded in Administrative Law is that the technical rules of procedure and evidence do not apply to the proceedings conducted by administrative agencies (First Asian Transport & Shipping Agency, Inc. v. Ople, 142 SCRA 542 [1986]; Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219 [1987]). This principle is enshrined in Article 221 of the Labor Code of the Philippines and is now the bedrock of proceedings before NLRC. Notwithstanding the non-applicability of technical rules of procedure and evidence in administrative proceedings, there are cardinal rules which must be observed by the hearing officers in order to comply with the due process requirements of the Constitution. These cardinal rules are collated in Ang Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940). VIII The three petitions were filed under Rule 65 of the Revised Rules of Court on the grounds that NLRC had committed grave abuse of discretion amounting to lack of jurisdiction in issuing the questioned orders. We find no such abuse of discretion. WHEREFORE, all the three petitions are DISMISSED. SO ORDERED. Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur.

RAYTHEON V. ROUZIE (2008)

FACTS:
Sometime in 1990, Brand Marine Services, Inc., a corporation duly organized and existing under the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows. On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission, a suit against BMSI and Rust International, Inc., Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of employment contract. On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court of Bauang, La Union. The Complaint named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case. Petitioner also referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as Special Sales Representative Agreement, the rights and obligations of the parties shall be governed by the laws of the State of Connecticut. Petitioner sought the dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim.

Petitioner asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute namely, the parties and witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines that renders our local courts inconvenient forums.

ISSUE:
WHETHER OR NOT THE COMPLAINT BE DISMISSED ON THE GROUND OF FORUM NON CONVENIENS?

RULING:
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed. As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary appearance in court. That the subject contract included a stipulation that the same shall be governed by the lawsof the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. 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 choice of law stipulation will become relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court. Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most convenient or available forum and the parties are not precluded from seeking remedies elsewhere. Petitioners aver ments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved. Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the c ourts desistance.

RAYTHEON INTERNATIONAL, INC., petitioner, vs. STOCKTON W. ROUZIE, JR., respondent. DECISION TINGA, J.: Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure which seeks the reversal of the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil case filed by respondent against petitioner with the trial court. As culled from the records of the case, the following antecedents appear: Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows. 3 On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions,

illegal termination and breach of employment contract.4 On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to pay respondents money claims.5 Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and dismissed respondents complaint on the ground of lack of jurisdiction. 6 Respondent elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997. The Resolution became final and executory on 09 November 1998. On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court (RTC) of Bauang, La Union. The Complaint,7 docketed as Civil Case No. 1192-BG, named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the labor case that BMSI verbally employed respondent to negotiate the sale of services in government projects and that respondent was not paid the commissions due him from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself had combined and functioned as one company. In its Answer,8 petitioner alleged that contrary to respondents claim, it was a foreign corporation duly licensed to do business in the Philippines and denied entering into any arrangement with respondent or paying the latter any sum of money. Petitioner also denied combining with BMSI and RUST for the purpose of assuming the alleged obligation of the said companies. 9 Petitioner also referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as "Special Sales Representative Agreement," the rights and obligations of the parties shall be governed by the laws of the State of Connecticut.10Petitioner sought the dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim. 11 On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for Summary Judgment12 seeking the dismissal of the complaint on grounds of forum non conveniens and failure to state a cause of action. Respondent opposed the same. Pending the resolution of the omnibus motion, the deposition of Walter Browning was taken before the Philippine Consulate General in Chicago.13 In an Order14 dated 13 September 2000, the RTC denied petitioners omnibus motion. The trial court held that the factual allegations in the complaint, assuming the same to be admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle of forum non conveniens was inapplicable because the trial court could enforce judgment on petitioner, it being a foreign corporation licensed to do business in the Philippines. 15 Petitioner filed a Motion for Reconsideration16 of the order, which motion was opposed by respondent.17 In an Order dated 31 July 2001,18 the trial court denied petitioners motion. Thus, it filed a Rule 65 Petition19 with the Court of Appeals praying for the issuance of a writ of certiorari and a writ of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting further proceedings.20 On 28 August 2003, the Court of Appeals rendered the assailed Decision21 denying the petition for certiorari for lack of merit. It also denied petitioners motion for reconsideration in the assailed Resolution issued on 10 March 2004. 22 The appellate court held that although the trial court should not have confined itself to the allegations in the complaint and should have also considered evidence aliunde in resolving petitioners omnibus motion, it found the evidence presented by petitioner, that is, the deposition of Walter Browning, insufficient for purposes of determining whether the complaint failed to state a cause of action. The appellate court also stated that it could not rule one way or the other on the issue of whether the corporations, including petitioner, named as defendants in the case had indeed merged together based solely on the evidence presented by respondent. Thus, it held that the issue should be threshed out during trial.23 Moreover, the appellate court deferred to the discretion of the trial court when the latter decided not to desist from assuming jurisdiction on the ground of the inapplicability of the principle of forum non conveniens. Hence, this petition raising the following issues: WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST RAYTHEON INTERNATIONAL, INC. WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.24 Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino Padua Law Office, counsel on record for respondent, manifested that the lawyer handling the case, Atty. Rogelio Karagdag, had severed relations with the law firm even before the filing of the instant petition and that it could no longer find the whereabouts of Atty. Karagdag or of respondent despite diligent efforts. In a Resolution25 dated 20 November 2006, the Court resolved to dispense with the filing of a comment. The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute namely, the parties and witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines that renders our local courts inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate the immediate application of the doctrine of forum non conveniens. Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances27 where the Court held that the local judicial machinery was adequate to resolve controversies with a foreign element, the following requisites had to be proved: (1) that the Philippine Court is one to which the parties may conveniently resort; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine Court has or is likely to have the power to enforce its decision.28 On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed.29 Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law30 and by the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.31 Civil Case No. 1192-BG is an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are within the jurisdiction of the RTC. As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary appearance in court.32 That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. 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.33The choice of law stipulation will become relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court. Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most "convenient" or available forum and the parties are not precluded from seeking remedies elsewhere.34 Petitioners averments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved. Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the courts desistance.35 Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign elements. In the same manner, the Court defers to the sound discretion of the lower courts because their findings are binding on this Court. Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action against petitioner. Failure to state a cause of action refers to the insufficiency of allegation in the pleading. 36 As a general rule, the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded. 37 The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. Petitioner contends that the deposition of Walter Browning rebutted this allegation. On this score, the resolution of the Court of Appeals is instructive, thus: x x x Our examination of the deposition of Mr. Walter Browning as well as other documents produced in the hearing shows that these evidence aliunde are not quite sufficient for us to mete a ruling that the complaint fails to state a cause of action. Annexes "A" to "E" by themselves are not substantial, convincing and conclusive proofs that Raytheon Engineers and Constructors, Inc. (REC) assumed the warranty obligations of defendant Rust International in the Makar Port Project in General Santos City, after Rust International ceased to exist after being absorbed by REC. Other documents already submitted in evidence are likewise meager to preponderantly conclude that Raytheon International, Inc., Rust International[,] Inc. and Brand Marine Service, Inc. have combined into one company, so much so that Raytheon

International, Inc., the surviving company (if at all) may be held liable for the obligation of BMSI to respondent Rouzie for unpaid commissions. Neither these documents clearly speak otherwise. 38 As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged together requires the presentation of further evidence, which only a full-blown trial on the merits can afford. WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals in CAG.R. SP No. 67001 are hereby AFFIRMED. Costs against petitioner. SO ORDERED.

[G.R. No. 120135. March 31, 2003]

BANK OF AMERICA NT&SA, BANK OF AMERICA INTERNATIONAL, LTD., petitioners, vs. COURT OF APPEALS, HON. MANUEL PADOLINA, EDUARDO LITONJUA, SR., and AURELIO K. LITONJUA, JR., respondents. DECISION
AUSTRIA-MARTINEZ, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the November 29, 1994 decision of the Court of Appeals and the April 28, 1995 resolution denying petitioners motion for reconsideration.
[1]

The factual background of the case is as follows: On May 10, 1993, Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas, for brevity) filed a Complaint before the Regional Trial Court of Pasig against the Bank of America NT&SA and Bank of America International, Ltd. (defendant banks for brevity) alleging that: they were engaged in the shipping business; they owned two vessels: Don Aurelio and El Champion, through their wholly-owned corporations; they deposited their revenues from said business together with other funds with the branches of said banks in the United Kingdom and Hongkong up to 1979; with their business doing well, the defendant banks induced them to increase the number of their ships in operation, offering them easy loans to acquire said vessels; thereafter, the defendant banks acquired, through their (Litonjuas) corporations as the borrowers: (a) El Carrier ; (b) El General ; (c) El Challenger ; and (d) El Conqueror ; the vessels were registered in the names of their corporations; the operation and the funds derived therefrom were placed under the complete and exclusive control and disposition of the petitioners; and the
[2] [3] [4] [5] [6] [7] [8]

possession the vessels was also placed by defendant banks in the hands of persons selected and designated by them (defendant banks).
[9]

The Litonjuas claimed that defendant banks as trustees did not fully render an account of all the income derived from the operation of the vessels as well as of the proceeds of the subsequent foreclosure sale; because of the breach of their fiduciary duties and/or negligence of the petitioners and/or the persons designated by them in the operation of private respondents six vessels, the revenues derived from the operation of all the vessels declined drastically; the loans acquired for the purchase of the four additional vessels then matured and remained unpaid, prompting defendant banks to have all the six vessels, including the two vessels originally owned by the private respondents, foreclosed and sold at public auction to answer for the obligations incurred for and in behalf of the operation of the vessels; they (Litonjuas) lost sizeable amounts of their own personal funds equivalent to ten percent (10%) of the acquisition cost of the four vessels and were left with the unpaid balance of their loans with defendant banks. The Litonjuas prayed for the accounting of the revenues derived in the operation of the six vessels and of the proceeds of the sale thereof at the foreclosure proceedings instituted by petitioners; damages for breach of trust; exemplary damages and attorneys fees.
[10] [11] [12]

Defendant banks filed a Motion to Dismiss on grounds of forum non conveniens and lack of cause of action against them.
[13]

On December 3, 1993, the trial court issued an Order denying the Motion to Dismiss, thus: WHEREFORE, and in view of the foregoing consideration, the Motion to Dismiss is hereby DENIED. The defendant is therefore, given a period of ten (10) days to file its Answer to the complaint. SO ORDERED.
[14]

Instead of filing an answer the defendant banks went to the Court of Appeals on a Petition for Review on Certiorari which was aptly treated by the appellate court as a petition for certiorari. They assailed the above-quoted order as well as the subsequent denial of their Motion for Reconsideration. The appellate court dismissed the petition and denied petitioners Motion for Reconsideration.
[15] [16] [17]

Hence, herein petition anchored on the following grounds:

1. RESPONDENT COURT OF APPEALS FAILED TO CONSIDER THE FACT THAT THE SEPARATE PERSONALITIES OF THE PRIVATE RESPONDENTS (MERE STOCKHOLDERS) AND THE FOREIGN CORPORATIONS (THE REAL BORROWERS) CLEARLY SUPPORT, BEYOND ANY DOUBT, THE PROPOSITION THAT THE PRIVATE RESPONDENTS HAVE NO PERSONALITIES TO SUE. 2. THE RESPONDENT COURT OF APPEALS FAILED TO REALIZE THAT WHILE THE PRINCIPLE OF FORUM NON CONVENIENS IS NOT MANDATORY, THERE ARE, HOWEVER, SOME GUIDELINES TO FOLLOW IN DETERMINING WHETHER THE CHOICE OF FORUM SHOULD BE DISTURBED. UNDER THE CIRCUMSTANCES SURROUNDING THE INSTANT CASE, DISMISSAL OF THE COMPLAINT ON THE GROUND OF FORUM NON-CONVENIENS IS MORE APPROPRIATE AND PROPER. 3. THE PRINCIPLE OF RES JUDICATA IS NOT LIMITED TO FINAL JUDGMENT IN THE PHILIPPINES. IN FACT, THE PENDENCY OF FOREIGN ACTION MAY BE THE LEGAL BASIS FOR THE DISMISSAL OF THE COMPLAINT FILED BY THE PRIVATE RESPONDENT. COROLLARY TO THIS, THE RESPONDENT COURT OF APPEALS FAILED TO CONSIDER THE FACT THAT PRIVATE RESPONDENTS ARE GUILTY OF FORUM SHOPPING.
[18]

As to the first assigned error: Petitioners argue that the borrowers and the registered owners of the vessels are the foreign corporations and not private respondents Litonjuas who are mere stockholders; and that the revenues derived from the operations of all the vessels are deposited in the accounts of the corporations. Hence, petitioners maintain that these foreign corporations are the legal entities that have the personalities to sue and not herein private respondents; that private respondents, being mere shareholders, have no claim on the vessels as owners since they merely have an inchoate right to whatever may remain upon the dissolution of the said foreign corporations and after all creditors have been fully paid and satisfied; and that while private respondents may have allegedly spent amounts equal to 10% of the acquisition costs of the vessels in question, their 10% however represents their investments as stockholders in the foreign corporations.
[19] [20]

Anent the second assigned error, petitioners posit that while the application of the principle of forum non conveniens is discretionary on the part of the Court, said discretion is limited by the guidelines pertaining to the private as well as public interest factors in determining whether plaintiffs

choice of forum should be disturbed, as elucidated in Gulf Oil Corp. vs. Gilbert and Piper Aircraft Co. vs. Reyno, to wit:
[21] [22]

Private interest factors include: (a) the relative ease of access to sources of proof; (b) the availability of compulsory process for the attendance of unwilling witnesses; (c) the cost of obtaining attendance of willing witnesses; or (d) all other practical problems that make trial of a case easy, expeditious and inexpensive. Public interest factors include: (a) the administrative difficulties flowing from court congestion; (b) the local interest in having localized controversies decided at home; (c) the avoidance of unnecessary problems in conflict of laws or in the application of foreign law; or (d) the unfairness of burdening citizens in an unrelated forum with jury duty.
[23]

In support of their claim that the local court is not the proper forum, petitioners allege the following: i) The Bank of America Branches involved, as clearly mentioned in the Complaint, are based in Hongkong and England. As such, the evidence and the witnesses are not readily available in the Philippines; ii) The loan transactions were obtained, perfected, performed, consummated and partially paid outside the Philippines; iii) The monies were advanced outside the Philippines. Furthermore, the mortgaged vessels were part of an offshore fleet, not based in the Philippines; iv) All the loans involved were granted to the Private Respondents foreign CORPORATIONS; v) The Restructuring Agreements were ALL governed by the laws of England;

vi) The subsequent sales of the mortgaged vessels and the application of the sales proceeds occurred and transpired outside the Philippines, and the deliveries of the sold mortgaged vessels were likewise made outside the Philippines; vii) The revenues of the vessels and the proceeds of the sales of these vessels were ALL deposited to the Accounts of the foreign CORPORATIONS abroad; and viii) Bank of America International Ltd. is not licensed nor engaged in trade or business in the Philippines.
[24]

Petitioners argue further that the loan agreements, security documentation and all subsequent restructuring agreements uniformly, unconditionally and

expressly provided that they will be governed by the laws of England; that Philippine Courts would then have to apply English law in resolving whatever issues may be presented to it in the event it recognizes and accepts herein case; that it would then be imposing a significant and unnecessary expense and burden not only upon the parties to the transaction but also to the local court. Petitioners insist that the inconvenience and difficulty of applying English law with respect to a wholly foreign transaction in a case pending in the Philippines may be avoided by its dismissal on the ground of forum non conveniens.
[25] [26]

Finally, petitioners claim that private respondents have already waived their alleged causes of action in the case at bar for their refusal to contest the foreign civil cases earlier filed by the petitioners against them in Hongkong and England, to wit: 1.) Civil action in England in its High Court of Justice, Queens Bench Division Commercial Court (1992-Folio No. 2098) against (a) LIBERIAN TRANSPORT NAVIGATION. SA.; (b) ESHLEY COMPANIA NAVIERA SA., (c) EL CHALLENGER SA; (d) ESPRIONA SHIPPING CO. SA; (e) PACIFIC NAVIGATOS CORP. SA; (f) EDDIE NAVIGATION CORP. SA; (g) EDUARDO K. LITONJUA & (h) AURELIO K. LITONJUA. 2.) Civil action in England in its High Court of Justice, Queens Bench Division, Commercial Court (1992-Folio No. 2245) against (a) EL CHALLENGER S.A., (b) ESPRIONA SHIPPING COMPANY S.A., (c) EDUARDO KATIPUNAN LITONJUA and (d) AURELIO KATIPUNAN LITONJUA. 3.) Civil action in the Supreme Court of Hongkong High Court (Action No. 4039 of 1992), against (a) ESHLEY COMPANIA NAVIERA S.A., (b) EL CHALLENGER S.A., (c) ESPRIONA SHIPPING COMPANY S.A., (d) PACIFIC NAVIGATORS CORPORATION (e) EDDIE NAVIGATION CORPORATION S.A., (f) LITONJUA CHARTERING (EDYSHIP) CO., INC., (g) AURELIO KATIPUNAN LITONJUA, JR., and (h) EDUARDO KATIPUNAN LITONJUA. 4.) A civil action in the Supreme Court of Hong Kong High Court (Action No. 4040 of 1992), against (a) ESHLEY COMPANIA NAVIERA S.A., (b) EL CHALLENGER S.A., (c) ESPRIONA SHIPPING COMPANY S.A., (d) PACIFIC NAVIGATORS CORPORATION (e) EDDIE NAVIGATION CORPORATION S.A., (f) LITONJUA CHARTERING (EDYSHIP) CO., INC., (g) AURELIO KATIPUNAN LITONJUA, RJ., and (h) EDUARDO KATIPUNAN LITONJUA.

and that private respondents alleged cause of action is already barred by the pendency of another action or by litis pendentia as shown above.
[27]

On the other hand, private respondents contend that certain material facts and pleadings are omitted and/or misrepresented in the present petition for certiorari; that the prefatory statement failed to state that part of the security of the foreign loans were mortgages on a 39-hectare piece of real estate located in the Philippines; that while the complaint was filed only by the stockholders of the corporate borrowers, the latter are wholly-owned by the private respondents who are Filipinos and therefore under Philippine laws, aside from the said corporate borrowers being but their alter-egos, they have interests of their own in the vessels. Private respondents also argue that the dismissal by the Court of Appeals of the petition for certiorari was justified because there was neither allegation nor any showing whatsoever by the petitioners that they had no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law from the Order of the trial judge denying their Motion to Dismiss; that the remedy available to the petitioners after their Motion to Dismiss was denied was to file an Answer to the complaint; that as upheld by the Court of Appeals, the decision of the trial court in not applying the principle of forum non conveniens is in the lawful exercise of its discretion. Finally, private respondents aver that the statement of petitioners that the doctrine of res judicata also applies to foreign judgment is merely an opinion advanced by them and not based on a categorical ruling of this Court; and that herein private respondents did not actually participate in the proceedings in the foreign courts.
[28] [29] [30] [31] [32] [33]

We deny the petition for lack of merit. It is a well-settled rule that the order denying the motion to dismiss cannot be the subject of petition for certiorari. Petitioners should have filed an answer to the complaint, proceed to trial and await judgment before making an appeal. As repeatedly held by this Court: An order denying a motion to dismiss is interlocutory and cannot be the subject of the extraordinary petition for certiorari or mandamus. The remedy of the aggrieved party is to file an answer and to interpose as defenses the objections raised in his motion to dismiss, proceed to trial, and in case of an adverse decision, to elevate the entire case by appeal in due course. xxx Under certain situations, recourse to certiorari or mandamus is considered appropriate, i.e., (a) when the trial court issued the order without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion by the trial court; or (c) appeal would not prove to be a speedy and adequate remedy as when an appeal would not promptly relieve a defendant from the injurious effects of the patently mistaken order maintaining the plaintiffs baseless

action and compelling the defendant needlessly to go through a protracted trial and clogging the court dockets by another futile case.
[34]

Records show that the trial court acted within its jurisdiction when it issued the assailed Order denying petitioners motion to dismiss. Does the denial of the motion to dismiss constitute a patent grave abuse of discretion? Would appeal, under the circumstances, not prove to be a speedy and adequate remedy? We will resolve said questions in conjunction with the issues raised by the parties. First issue. Did the trial court commit grave abuse of discretion in refusing to dismiss the complaint on the ground that plaintiffs have no cause of action against defendants since plaintiffs are merely stockholders of the corporations which are the registered owners of the vessels and the borrowers of petitioners? No. Petitioners argument that private respondents, being mere stockholders of the foreign corporations, have no personalities to sue, and therefore, the complaint should be dismissed, is untenable. A case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-in-interest. Lack of personality to sue can be used as a ground for a Motion to Dismiss based on the fact that the complaint, on the face thereof, evidently states no cause of action. In San Lorenzo Village Association, Inc. vs. Court of Appeals, this Court clarified that a complaint states a cause of action where it contains three essential elements of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation of said legal right. If these elements are absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action. To emphasize, it is not the lack or absence of cause of action that is a ground for dismissal of the complaint but rather the fact that the complaint states no cause of action. Failure to state a cause of action refers to the insufficiency of allegation in the pleading, unlike lack of cause of action which refers to the insufficiency of factual basis for the action. Failure to state a cause of action may be raised at the earliest stages of an action through a motion to dismiss the complaint, while lack of cause of action may be raised any time after the questions of fact have been resolved on the basis of stipulations, admissions or evidence presented.
[35] [36] [37] [38] [39]

In the case at bar, the complaint contains the three elements of a cause of action. It alleges that: (1) plaintiffs, herein private respondents, have the right to demand for an accounting from defendants (herein petitioners), as trustees by reason of the fiduciary relationship that was created between the parties

involving the vessels in question; (2) petitioners have the obligation, as trustees, to render such an accounting; and (3) petitioners failed to do the same. Petitioners insist that they do not have any obligation to the private respondents as they are mere stockholders of the corporation; that the corporate entities have juridical personalities separate and distinct from those of the private respondents. Private respondents maintain that the corporations are wholly owned by them and prior to the incorporation of such entities, they were clients of petitioners which induced them to acquire loans from said petitioners to invest on the additional ships. We agree with private respondents. As held in the San Lorenzo case,
[40]

xxx assuming that the allegation of facts constituting plaintiffs cause of action is not as clear and categorical as would otherwise be desired, any uncertainty thereby arising should be so resolved as to enable a full inquiry into the merits of the action. As this Court has explained in the San Lorenzo case, such a course, would preclude multiplicity of suits which the law abhors, and conduce to the definitive determination and termination of the dispute. To do otherwise, that is, to abort the action on account of the alleged fatal flaws of the complaint would obviously be indecisive and would not end the controversy, since the institution of another action upon a revised complaint would not be foreclosed.
[41]

Second Issue. Should the complaint be dismissed on the ground of forum non-conveniens? No. The doctrine of forum non-conveniens, literally meaning the forum is inconvenient, emerged in private international law to deter the practice of global forum shopping, that is to prevent non-resident litigants from choosing the forum or place wherein to bring their suit for malicious reasons, such as to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. Under this doctrine, a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most convenient or available forum and the parties are not precluded from seeking remedies elsewhere.
[42] [43]

Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. In the case of Communication Materials and Design, Inc. vs. Court of Appeals, this Court held that xxx [a] Philippine Court may assume jurisdiction over the case if it
[44] [45]

chooses to do so; provided, that the following requisites are met: (1) that the Philippine Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is likely to have power to enforce its decision. Evidently, all these requisites are present in the instant case.
[46]

Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of Appeals, that the doctrine of forum non conveniens should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground. This Court further ruled that while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the courts desistance; and that the propriety of dismissing a case based on this principle of forum non conveniens requires a factual determination, hence it is more properly considered a matter of defense.
[47] [48]

Third issue. Are private respondents guilty of forum shopping because of the pendency of foreign action? No. Forum shopping exists where the elements of litis pendentia are present and where a final judgment in one case will amount to res judicata in the other. Parenthetically, for litis pendentia to be a ground for the dismissal of an action there must be: (a) identity of the parties or at least such as to represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same acts; and (c) the identity in the two cases should be such that the judgment which may be rendered in one would, regardless of which party is successful, amount to res judicata in the other.
[49] [50]

In case at bar, not all the requirements for litis pendentia are present. While there may be identity of parties, notwithstanding the presence of other respondents, as well as the reversal in positions of plaintiffs and defendants , still the other requirements necessary for litis pendentia were not shown by petitioner. It merely mentioned that civil cases were filed in Hongkong and England without however showing the identity of rights asserted and the reliefs sought for as well as the presence of the elements of res judicata should one of the cases be adjudged.
[51] [52]

As the Court of Appeals aptly observed: xxx [T]he petitioners, by simply enumerating the civil actions instituted abroad involving the parties herein xxx, failed to provide this Court with relevant and clear

specifications that would show the presence of the above-quoted elements or requisites for res judicata. While it is true that the petitioners in their motion for reconsideration (CA Rollo, p. 72), after enumerating the various civil actions instituted abroad, did aver that Copies of the foreign judgments are hereto attached and made integral parts hereof as Annexes B, C, D and E, they failed, wittingly or inadvertently, to include a single foreign judgment in their pleadings submitted to this Court as annexes to their petition. How then could We have been expected to rule on this issue even if We were to hold that foreign judgments could be the basis for the application of the aforementioned principle of res judicata?
[53]

Consequently, both courts correctly denied the dismissal of herein subject complaint. WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioners. SO ORDERED.
Bank of America, NT & SA v. Litonjua G.R. No. 120135 March 31, 2003 Ponente: Austria-Martinez, J. Facts: 1. The Litonjuas (Eduardo and Aurelio), private respondents, were engaged in the shipping business. They owned 2 vesselsthrough their company and deposited their revenues with the petitioner banks in both Hongkong and UK. The respondents alleged that the petitioner offered easy loans to help them acquire additional three (3) vessels through their company. The operation and the funds were then placed under the control of the petitioner while the possession of the vessels were left in the hands of persons designated. 2. The said vessels were subsequently foreclosed when the business of respondents declined. However, the bank as trustee failed to render an accounting of the incomes of the said vessels. This prompted the Litonjuas to file a complaint. The petitioner bank filed a motion to dismiss on the ground of forum non conveniens and lack of cause of action. The MD was denied by the lower court. The petitioner filed a petition for review on certiorari with the CA. The Court of Appeals dismissed. It was treated by the CA as a petition for certiorari. Issue: Whether or not the case should have been dismissed on the ground of FNC HELD: NO. Whether a suit is to be dismissed on the ground of FNC depends largely upon the facts of the case and is addressed to the sound discretion of the courts. The following requisites must be met: - The Philippine court must be one to which the parties may conveniently resort to - The Philippine courts is in the position to make intelligent decisions as to law and facts - It has or likely have the power to enforce its decision. As to the issue on forum shopping, the court held that there is no forum shopping due to the pendency of the foreign action. Forum shopping exists where elements of litis pendentia are present and where a final judgement is one case will amount to res judicata in the other. Litis pendentia presuposses the existence of these elements; identity of parties, identity of righs asserted and relief prayed for (founded on the same acts) and the identity of the two cases is such that judgement in one case would amount to res judicata in the other. Not all the elements for litis pendentia are present here. The petitioner failed to show these as it merely mentioned that civil cases were filed in Hongkong and UK without showing the identity of the rights asserted or reliefs sought, as well as the presence of elements of res judicata should one of the case be adjudged. Hasegawa and Nippon Eng. v. Kitamura G.R. No. 149177 November 23, 2007 Ponente: Justice Nachura Facts: 1. The petitioner Nippon Engineering Consultants Co. is a Japanese consultancy firm which provides technical and management support in the infrastructure project of foreign governments. It entered into a Independent Contractor Agreement (ICA) with respondent Kitamura, a Japanese national permanently residing in the Philippines. Under the ICA, the respondent will extend professional services to the petitioner for a year. 2. Subsequently Kitamura was assigned as project manager of STAR project in 1999. In 2000, he was informed by the petitioner that it will no longer renew the ICA and that he will be retained until its expiration. Kitamura filed a civil casefor specific performance before the RTC of Lipa and damages. 3. The lower court ruled that it has jurisdiction over the dispute and denied the petitioner's motion to dismiss since accordingly, it is vested by law with the power to entertain and hear the civil case filed by Kitamura. The Court of Appeals upheld the lower court's decision. Issue: Whether or not the RTC has jurisdiction over the case HELD: YES 1. The only issue is the jurisdiction, hence, choice-of-law rules as raised by the petitioner is inapplicable and not yet called for (reference to lex loci, lex contractus, or state of most significant rule). The petitioner prematurelyinvoked the said rules before pointing out any conflict between the laws of Japan and the Philippines. 2. The doctrine on forum non conveniens cannot be invoked to deprive the RTC of its jurisdiction. Dismissing the case on this ground requires a factual determination hence the principle is considered to be more a matter of defense.

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 o f 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. 2. 3.

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. 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. 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 m otion 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.

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., Petitioners,

G.R. No. 149177

Present:

YNARES-SANTIAGO, J., Chairperson, - versus AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ.

MINORU KITAMURA, Respondent.

Promulgated:

November 23, 2007

x------------------------------------------------------------------------------------x

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) [7] Project. 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 pretermination 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 groundsfor 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.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONISIN 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 CAG.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 certificationas they, in fact didand 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 thedismissal 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 scopeits 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 wellestablished 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 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] 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 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. 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 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 de rived 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.[75]

Neither can the other ground raised, forum non conveniens,[76] 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.[77] 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.[78] 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.[79] 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 on certiorari is DENIED. considered, the petition for review