Forum Non Conveniens ‘8) The Superior Court for the State of California, County of Contra

Costa[,] did not properly acquire jurisdiction over the subject matter
G.R. No. 141536. February 26, 2001 of and over the persons involved in [C]ase #C21-00265.

GIL MIGUEL T. PUYAT, petitioner, ‘9) The Judgment on Stipulations for Entry in Judgment in Case #C21-
vs. 00265 dated December 12, 1991 was obtained without the assistance
RON ZABARTE, respondent. of counsel for [petitioner] and without sufficient notice to him and
therefore, was rendered in clear violation of [petitioner’s]
DECISION constitutional rights to substantial and procedural due process.

PANGANIBAN, J.: ‘10) The Judgment on Stipulation for Entry in Judgment in Case #C21-
00265 dated December 12, 1991 was procured by means of fraud or
Summary judgment in a litigation is resorted to if there is no genuine issue as to collusion or undue influence and/or based on a clear mistake of fact
any material fact, other than the amount of damages. If this verity is evident and law.
from the pleadings and the supporting affidavits, depositions and admissions
on file with the court, the moving party is entitled to such remedy as a matter ‘11) The Judgment on Stipulation for Entry in Judgment in Case #C21-
of course. 00265 dated December 12, 1991 is contrary to the laws, public policy
and canons of morality obtaining in the Philippines and the
The Case enforcement of such judgment in the Philippines would result in the
unjust enrichment of [respondent] at the expense of [petitioner] in this
case.
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, challenging the August 31, 1999 Decision 1 of the Court of Appeals
(CA), which affirmed the Regional Trial Court (RTC) of Pasig City, Branch 67 in ‘12) The Judgment on Stipulation for Entry in Judgment in Case #C21-
Civil Case No. 64107; and the January 20, 2000 CA Resolution 2 which denied 00265 dated December 12, 1991 is null and void and unenforceable
reconsideration. in the Philippines.

The assailed CA Decision disposed as follows: ‘13) In the transaction, which is the subject matter in Case #C21-
00265, [petitioner] is not in any way liable, in fact and in law, to
[respondent] in this case, as contained in [petitioner’s] ‘Answer to
“WHEREFORE, finding no error in the judgment appealed from, the same is
Complaint’ in Case #C21-00265 dated April 1, 1991, Annex ‘B’ of
AFFIRMED." 3
[respondent’s] ‘Complaint’ dated December 6, 1993.

The Facts
’14) [Respondent] is guilty of misrepresentation or falsification in the
filing of his ‘Complaint’ in this case dated December 6, 1993. Worse,
The facts of this case, as narrated by the Court of Appeals, are as follows: 4
[respondent] has no capacity to sue in the Philippines.

“It appears that on 24 January 1994, [Respondent] Ron Zabarte commenced

’15) Venue has been improperly laid in this case.’
[an action] to enforce the money judgment rendered by the Superior Court
for the State of California, County of Contra Costa, U.S.A. On 18 March 1994,
(Record, pp. 42-44)
[petitioner] filed his Answer with the following special and affirmative defenses:

xxx xxx xxx

1
“On 1 August 1994, [respondent] filed a [M]otion for [S]ummary [c]ounty [c]lerk of the County of Contra Costa of the State of
[J]udgment under Rule 34 of the Rules of Court alleging that the California.
[A]nswer filed by [petitioner] failed to tender any genuine issue as to
the material facts. In his [O]pposition to [respondent’s] motion, Exhibit ‘G’ - Certificate of [A]uthentication of the [W]rit of [E]xecution.
[petitioner] demurred as follows:
“On 6 April 1995, the court a quo issued an [O]rder granting [respondent’s]
‘2) [Petitioner] begs to disagree[;] in support hereof, [he] wishes to [M]otion for [S]ummary [J]udgment [and] likewise granting [petitioner] ten (10)
mention that in his ‘Answer with Special and Affirmative Defenses’ days to submit opposing affidavits, after which the case would be deemed
dated March 16, 1994 [petitioner] has interposed that the ‘Judgment submitted for resolution (Record, pp. 152-153). [Petitioner] filed a [M]otion for
on Stipulations for Entry in Judgment’ is null and void, fraudulent, [R]econsideration of the aforesaid [O]rder and [respondent] filed [C]omment.
illegal and unenforceable, the same having been obtained by means On 30 June 1995, [petitioner] filed a [M]otion to [D]ismiss on the ground of lack
of fraud, collusion, undue influence and/or clear mistake of fact and of jurisdiction over the subject matter of the case and forum-non-conveniens
law. In addition, [he] has maintained that said ‘Judgment on (Record, pp. 166-170). In his [O]pposition to the [M]otion (Record, pp. 181-182)
Stipulations for Entry in Judgment’ was obtained without the [respondent] contended that [petitioner could] no longer question the
assistance of counsel for [petitioner] and without sufficient notice to jurisdiction of the lower court on the ground that [the latter’s] Answer had
him and therefore, was rendered in violation of his constitutional rights failed to raise the issue of jurisdiction. [Petitioner] countered by asserting in his
to substantial and procedural due process.’ Reply that jurisdiction [could] not be fixed by agreement of the parties. The
lower court dismissed [his] [M]otion for [R]econsideration and [M]otion [to]
“The [M]otion for [S]ummary [J]udgment was set for hearing on 12 [D]ismiss (Record, pp. 196-198), x x x.”
August 1994 during which [respondent] marked and submitted in
evidence the following: The RTC 5 eventually rendered its February 21, 1997 Decision, 6 which disposed
as follows:
Exhibit ‘A’ - x x x Judgment on Stipulation For Entry In Judgment of the
Supreme Court of the State of California[,] County of Contra Costa[,] “WHEREFORE, judgment is hereby rendered, ordering [petitioner] to pay
signed by Hon. Ellen James, Judge of the Superior Court. [respondent] the following amounts:

Exhibit ‘B’ - x x x Certificate of Authentication of the [O]rder signed by “1. The amount of U.S. dollars $241,991.33, with the interest of legal rate from
the Hon. Ellen James, issued by the Consulate General of the Republic October 18, 1991, or its peso equivalent, pursuant to the [J]udgment of
of the Philippines. [S]tipulation for [E]ntry in [J]udgment dated December 19, 1991;

Exhibit ‘C’ - [R]eturn of the [W]rit of [E]xecution (writ unsatisfied) issued “2. The amount of P30,000.00 as attorney’s fees;
by the sheriff/marshall, County of Santa Clara, State of California.
“3. To pay the costs of suit.
Exhibit ‘D’ - [W]rit of [E]xecution
“The claim for moral damages, not having been substantiated, it is hereby
Exhibit 'E' [P]roof of [S]ervice of copies of [W]rit of [E]xecution, [N]otice denied.” 7
of [L]evy, [M]emorandum of [G]arnishee, [E]xemptions from
[E]nforcement of [J]udgment. Ruling of the Court of Appeals

Exhibit ‘F’ - Certification issued by the Secretary of State, State of Affirming the trial court, the Court of Appeals held that petitioner was
California that Stephen Weir is the duly elected, qualified and acting estopped from assailing the judgment that had become final and had, in

2
fact, been partially executed. The CA also ruled that summary judgment was Petitioner vehemently insists that summary judgment is inappropriate to resolve
proper, because petitioner had failed to tender any genuine issue of fact and the case at bar, arguing that his Answer allegedly raised genuine and
was merely maneuvering to delay the full effects of the judgment. material factual matters which he should have been allowed to prove during
trial.
Citing Ingenohl v. Olsen, 8 the CA also rejected petitioner’s argument that the
RTC should have dismissed the action for the enforcement of a foreign On the other hand, respondent argues that the alleged “genuine issues of
judgment, on the ground of forum non conveniens. It reasoned out that the fact” raised by petitioner are mere conclusions of law, or “propositions arrived
recognition of the foreign judgment was based on comity, reciprocity and res at not by any process of natural reasoning from a fact or a combination of
judicata. facts stated but by the application of the artificial rules of law to the facts
pleaded.” 11
Hence, this Petition. 9
The RTC granted respondent’s Motion for Summary Judgment because
Issue petitioner, in his Answer, admitted the existence of the Judgment on
Stipulation for Entry in Judgment. Besides, he had already paid $5,000 to
In his Memorandum, petitioner submits this lone but all-embracing issue: respondent, as provided in the foreign judgment sought to be enforced. 12
Hence, the trial court ruled that, there being no genuine issue as to any
“Whether or not the Court of Appeals acted in a manner x x x contrary to law material fact, the case should properly be resolved through summary
when it affirmed the Order of the trial court granting respondent’s Motion for judgment. The CA affirmed this ruling.
Summary Judgment and rendering judgment against the petitioner.” 10
We concur with the lower courts. Summary judgment is a procedural device
In his discussion, petitioner contends that the CA erred in ruling in this wise: for the prompt disposition of actions in which the pleadings raise only a legal
issue, and not a genuine issue as to any material fact. By genuine issue is
meant a question of fact that calls for the presentation of evidence. It should
1. That his Answer failed to tender a genuine issue of fact regarding the
be distinguished from an issue that is sham, contrived, set in bad faith and
following:
patently unsubstantial. 13

(a) the jurisdiction of a foreign court over the subject matter

Summary judgment is resorted to in order to avoid long drawn out litigations
and useless delays. When affidavits, depositions and admissions on file show
(b) the validity of the foreign judgment
that there are no genuine issues of fact to be tried, the Rules allow a party to
pierce the allegations in the pleadings and to obtain immediate relief by way
(c) the judgment’s conformity to Philippine laws, public policy, canons of
of summary judgment. In short, since the facts are not in dispute, the court is
morality, and norms against unjust enrichment
allowed to decide the case summarily by applying the law to the material
facts.
2. That the principle of forum non conveniens was inapplicable to the instant
case.
Petitioner contends that by allowing summary judgment, the two courts a quo
prevented him from presenting evidence to substantiate his claims. We do not
This Court’s Ruling agree. Summary judgment is based on facts directly proven by affidavits,
depositions or admissions. 14 In this case, the CA and the RTC both merely ruled
The Petition has no merit. that trial was not necessary to resolve the case. Additionally and correctly, the
RTC specifically ordered petitioner to submit opposing affidavits to support his
First Question: Summary Judgment contentions that (1) the Judgment on Stipulation for Entry in Judgment was
procured on the basis of fraud, collusion, undue influence, or a clear mistake

3
of law or fact; and (2) that it was contrary to public policy or the canons of In our jurisdiction, such a case falls under the jurisdiction of civil courts, not of
morality. 15 the Securities and Exchange Commission (SEC). The jurisdiction of the latter is
exclusively over matters enumerated in Section 5, PD 902-A, 21 prior to its latest
Again, in its Order 16 dated November 29, 1995, the trial court clarified that the amendment. If the foreign court did not really have jurisdiction over the case,
opposing affidavits were “for [petitioner] to spell out the facts or as petitioner claims, it would have been very easy for him to show this. Since
circumstances [that] would constitute lack of jurisdiction over the subject jurisdiction is determined by the allegations in a complaint, he only had to
matter of and over the persons involved in Case No. C21-00265,” and that submit a copy of the complaint filed with the foreign court. Clearly, this issue
would render the judgment therein null and void. In this light, petitioner’s did not warrant trial.
contention that he was not allowed to present evidence to substantiate his
claims is clearly untenable. Rights to Counsel and to Due Process

For summary judgment to be valid, Rule 34, Section 3 of the Rules of Court, Petitioner contends that the foreign judgment, which was in the form of a
requires (a) that there must be no genuine issue as to any material fact, Compromise Agreement, cannot be executed without the parties being
except for the amount of damages; and (b) that the party presenting the assisted by their chosen lawyers. The reason for this, he points out, is to
motion for summary judgment must be entitled to a judgment as a matter of eliminate collusion, undue influence and/or improper exertion of ascendancy
law. 17 As mentioned earlier, petitioner admitted that a foreign judgment had by one party over the other. He alleges that he discharged his counsel during
been rendered against him and in favor of respondent, and that he had paid the proceedings, because he felt that the latter was not properly attending to
$5,000 to the latter in partial compliance therewith. Hence, respondent, as the the case. The judge, however, did not allow him to secure the services of
party presenting the Motion for Summary Judgment, was shown to be entitled another counsel. Insisting that petitioner settle the case with respondent, the
to the judgment. judge practically imposed the settlement agreement on him. In his Opposing
Affidavit, petitioner states:
The CA made short shrift of the first requirement. To show that petitioner had
raised no genuine issue, it relied instead on the finality of the foreign judgment “It is true that I was initially represented by a counsel in the proceedings in
which was, in fact, partially executed. Hence, we shall show in the following #C21-00625. I discharged him because I then felt that he was not properly
discussion how the defenses presented by petitioner failed to tender any attending to my case or was not competent enough to represent my interest.
genuine issue of fact, and why a full-blown trial was not necessary for the I asked the Judge for time to secure another counsel but I was practically
resolution of the issues. discouraged from engaging one as the Judge was insistent that I settle the
case at once with the [respondent]. Being a foreigner and not a lawyer at
Jurisdiction that I did not know what to do. I felt helpless and the Judge and
[respondent’s] lawyer were the ones telling me what to do. Under ordinary
Petitioner alleges that jurisdiction over Case No. C21-00265, which involved circumstances, their directives should have been taken with a grain of salt
partnership interest, was vested in the Securities and Exchange Commission, especially so [since respondent’s] counsel, who was telling me what to do,
not in the Superior Court of California, County of Contra Costa. had an interest adverse to mine. But [because] time constraints and undue
influence exerted by the Judge and [respondent’s] counsel on me disturbed
We disagree. In the absence of proof of California law on the jurisdiction of and seriously affected my freedom to act according to my best judgment
courts, we presume that such law, if any, is similar to Philippine law. We base and belief. In point of fact, the terms of the settlement were practically
this conclusion on the presumption of identity or similarity, also known as imposed on me by the Judge seconded all the time by [respondent’s]
processual presumption. 18 The Complaint, 19 which respondent filed with the counsel. I was then helpless as I had no counsel to assist me and the collusion
trial court, was for the enforcement of a foreign judgment. He alleged therein between the Judge and [respondent’s] counsel was becoming more evident
that the action of the foreign court was for the collection of a sum of money, by the way I was treated in the Superior Court of [t]he State of California. I
breach of promissory notes, and damages. 20 signed the ‘Judgment on Stipulation for Entry in Judgment’ without any lawyer

4
assisting me at the time and without being fully aware of its terms and defendants whom he represented were liable together with him. This is not a
stipulations.” 22 case of unjust enrichment.

The manifestation of petitioner that the judge and the counsel for the We do not see, either, how the foreign judgment could be contrary to law,
opposing party had pressured him would gain credibility only if he had not morals, public policy or the canons of morality obtaining in the country.
been given sufficient time to engage the services of a new lawyer. Petitioner owed money, and the judgment required him to pay it. That is the
Respondent’s Affidavit 23 dated May 23, 1994, clarified, however, that long and the short of this case.
petitioner had sufficient time, but he failed to retain a counsel. Having
dismissed his lawyer as early as June 19, 1991, petitioner directly handled his In addition, the maneuverings of petitioner before the trial court reinforce our
own defense and negotiated a settlement with respondent and his counsel in belief that his claims are unfounded. Instead of filing opposing affidavits to
December 1991. Respondent also stated that petitioner, ignoring the judge’s support his affirmative defenses, he filed a Motion for Reconsideration of the
reminder of the importance of having a lawyer, argued that “he would be the Order allowing summary judgment, as well as a Motion to Dismiss the action
one to settle the case and pay” anyway. Eventually, the Compromise on the ground of forum non conveniens. His opposing affidavits were filed only
Agreement was presented in court and signed before Judge Ellen James on after the Order of November 29, 1995 had denied both Motions. 26 Such
January 3, 1992. Hence, petitioner’s rights to counsel and to due process were actuation was considered by the trial court as a dilatory ploy which justified
not violated. the resolution of the action by summary judgment. According to the CA,
petitioner’s allegations sought to delay the full effects of the judgment; hence,
Unjust Enrichment summary judgment was proper. On this point, we concur with both courts.

Petitioner avers that the Compromise Agreement violated the norm against Second Question: Forum Non Conveniens
unjust enrichment because the judge made him shoulder all the liabilities in
the case, even if there were two other defendants, G.S.P & Sons, Inc. and the Petitioner argues that the RTC should have refused to entertain the Complaint
Genesis Group. for enforcement of the foreign judgment on the principle of forum non
conveniens. He claims that the trial court had no jurisdiction, because the
We cannot exonerate petitioner from his obligation under the foreign case involved partnership interest, and there was difficulty in ascertaining the
judgment, even if there are other defendants who are not being held liable applicable law in California. All the aspects of the transaction took place in a
together with him. First, the foreign judgment itself does not mention these foreign country, and respondent is not even Filipino.
other defendants, their participation or their liability to respondent. Second,
petitioner’s undated Opposing Affidavit states: “[A]lthough myself and these We disagree. Under the principle of forum non conveniens, even if the
entities were initially represented by Atty. Lawrence L. Severson of the Law Firm exercise of jurisdiction is authorized by law, courts may nonetheless refuse to
Kouns, Quinlivan & Severson, x x x I discharged x x x said lawyer. Subsequently, entertain a case for any of the following practical reasons:
I assumed the representation for myself and these firms and this was allowed
by the Superior Court of the State of California without any authorization from “1) The belief that the matter can be better tried and decided elsewhere,
G.G.P. & Sons, Inc. and the Genesis Group.” 24 Clearly, it was petitioner who either because the main aspects of the case transpired in a foreign jurisdiction
chose to represent the other defendants; hence, he cannot now be allowed or the material witnesses have their residence there;
to impugn a decision based on this ground.
2) The belief that the non-resident plaintiff sought the forum[,] a practice
In any event, contrary to petitioner’s contention, unjust enrichment or solutio known as forum shopping[,] merely to secure procedural advantages or to
indebiti does not apply to this case. This doctrine contemplates payment convey or harass the defendant;
when there is no duty to pay, and the person who receives the payment has
no right to receive it. 25 In this case, petitioner merely argues that the other two

5
3) The unwillingness to extend local judicial facilities to non-residents or aliens the lower courts that he was merely maneuvering to avoid or delay payment
when the docket may already be overcrowded; of his obligation.

4) The inadequacy of the local judicial machinery for effectuating the right WHEREFORE, the Petition is hereby DENIED and the assailed Decision and
sought to be maintained; and Resolution AFFIRMED. Double costs against petitioner.

The difficulty of ascertaining foreign law.” 27

None of the aforementioned reasons barred the RTC from exercising its
jurisdiction. In the present action, there was no more need for material
witnesses, no forum shopping or harassment of petitioner, no inadequacy in
the local machinery to enforce the foreign judgment, and no question raised
as to the application of any foreign law.

Authorities agree that the issue of whether a suit should be entertained or

dismissed on the basis of the above-mentioned principle depends largely
upon the facts of each case and on the sound discretion of the trial court. 28
Since the present action lodged in the RTC was for the enforcement of a
foreign judgment, there was no need to ascertain the rights and the
obligations of the parties based on foreign laws or contracts. The parties
needed only to perform their obligations under the Compromise Agreement
they had entered into. 1âwphi1.nêt

Under Section 48, Rule 39 of the 1997 Rules of Civil Procedure, a judgment in
an action in personam rendered by a foreign tribunal clothed with jurisdiction
is presumptive evidence of a right as between the parties and their
successors-in-interest by a subsequent title. 29

Also, under Section 5(n) of Rule 131, a court -- whether in the Philippines or
elsewhere -- enjoys the presumption that it is acting in the lawful exercise of its
jurisdiction, and that it is regularly performing its official duty. 30 Its judgment
may, however, be assailed if there is evidence of want of jurisdiction, want of
notice to the party, collusion, fraud or clear mistake of law or fact. But
precisely, this possibility signals the need for a local trial court to exercise
jurisdiction. Clearly, the application of forum non coveniens is not called for.

The grounds relied upon by petitioner are contradictory. On the one hand, he
insists that the RTC take jurisdiction over the enforcement case in order to
invalidate the foreign judgment; yet, he avers that the trial court should not
exercise jurisdiction over the same case on the basis of forum non conveniens.
Not only do these defenses weaken each other, but they bolster the finding of

6
Forum Non Conveniens vessels, the revenues derived from the operation of all the vessels declined
drastically; the loans acquired for the purchase of the four additional vessels
G.R. No. 120135 March 31, 2003 then matured and remained unpaid, prompting defendant banks to have all
the six vessels, including the two vessels originally owned by the private
BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD., respondents, foreclosed and sold at public auction to answer for the
petitioners, obligations incurred for and in behalf of the operation of the vessels; they
vs. (Litonjuas) lost sizeable amounts of their own personal funds equivalent to ten
COURT OF APPEALS, HON. MANUEL PADOLINA, EDUARDO LITONJUA, SR., and percent (10%) of the acquisition cost of the four vessels and were left with the
AURELIO K. LITONJUA, JR., respondents. unpaid balance of their loans with defendant banks.11 The Litonjuas prayed
for the accounting of the revenues derived in the operation of the six vessels
AUSTRIA-MARTINEZ, J.: and of the proceeds of the sale thereof at the foreclosure proceedings
instituted by petitioners; damages for breach of trust; exemplary damages
and attorney's fees.12
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 Appeals1 and the
April 28, 1995 resolution denying petitioners' motion for reconsideration. Defendant banks filed a Motion to Dismiss on grounds of forum non
conveniens and lack of cause of action against them.13

The factual background of the case is as follows:

On December 3, 1993, the trial court issued an Order denying the Motion to
Dismiss, thus:
On May 10, 1993, Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas, for
brevity) filed a Complaint2 before the Regional Trial Court of Pasig against the
Bank of America NT&SA and Bank of America International, Ltd. (defendant "WHEREFORE, and in view of the foregoing consideration, the Motion
banks for brevity) alleging that: they were engaged in the shipping business; to Dismiss is hereby DENIED. The defendant is therefore, given a period
they owned two vessels: Don Aurelio and El Champion, through their wholly- of ten (10) days to file its Answer to the complaint.
owned corporations; they deposited their revenues from said business
together with other funds with the branches of said banks in the United "SO ORDERED."14
Kingdom and Hongkong up to 1979; with their business doing well, the
defendant banks induced them to increase the number of their ships in Instead of filing an answer the defendant banks went to the Court of Appeals
operation, offering them easy loans to acquire said vessels;3 thereafter, the on a "Petition for Review on Certiorari"15 which was aptly treated by the
defendant banks acquired, through their (Litonjuas') corporations as the appellate court as a petition for certiorari. They assailed the above-quoted
borrowers: (a) El Carrier4; (b) El General5; (c) El Challenger6; and (d) El order as well as the subsequent denial of their Motion for Reconsideration.16
Conqueror7; the vessels were registered in the names of their corporations; the The appellate court dismissed the petition and denied petitioners' Motion for
operation and the funds derived therefrom were placed under the complete Reconsideration.17
and exclusive control and disposition of the petitioners;8 and the possession
the vessels was also placed by defendant banks in the hands of persons Hence, herein petition anchored on the following grounds:
selected and designated by them (defendant banks).9
"1. RESPONDENT COURT OF APPEALS FAILED TO CONSIDER THE FACT
The Litonjuas claimed that defendant banks as trustees did not fully render an THAT THE SEPARATE PERSONALITIES OF THE PRIVATE RESPONDENTS
account of all the income derived from the operation of the vessels as well as (MERE STOCKHOLDERS) AND THE FOREIGN CORPORATIONS (THE REAL
of the proceeds of the subsequent foreclosure sale;10 because of the breach BORROWERS) CLEARLY SUPPORT, BEYOND ANY DOUBT, THE
of their fiduciary duties and/or negligence of the petitioners and/or the PROPOSITION THAT THE PRIVATE RESPONDENTS HAVE NO
persons designated by them in the operation of private respondents' six PERSONALITIES TO SUE.

7
 "2. THE RESPONDENT COURT OF APPEALS FAILED TO REALIZE THAT WHILE court congestion; (b) the local interest in having localized
THE PRINCIPLE OF FORUM NON CONVENIENS IS NOT MANDATORY, controversies decided at home; (c) the avoidance of unnecessary
THERE ARE, HOWEVER, SOME GUIDELINES TO FOLLOW IN DETERMINING problems in conflict of laws or in the application of foreign law; or (d)
WHETHER THE CHOICE OF FORUM SHOULD BE DISTURBED. UNDER THE the unfairness of burdening citizens in an unrelated forum with jury
CIRCUMSTANCES SURROUNDING THE INSTANT CASE, DISMISSAL OF THE duty."23
COMPLAINT ON THE GROUND OF FORUM NON-CONVENIENS IS MORE
APPROPRIATE AND PROPER. In support of their claim that the local court is not the proper forum, petitioners
allege the following:
"3. THE PRINCIPLE OF RES JUDICATA IS NOT LIMITED TO FINAL
JUDGMENT IN THE PHILIPPINES. IN FACT, THE PENDENCY OF FOREIGN "i) The Bank of America Branches involved, as clearly mentioned in the
ACTION MAY BE THE LEGAL BASIS FOR THE DISMISSAL OF THE Complaint, are based in Hongkong and England. As such, the
COMPLAINT FILED BY THE PRIVATE RESPONDENT. COROLLARY TO THIS, evidence and the witnesses are not readily available in the
THE RESPONDENT COURT OF APPEALS FAILED TO CONSIDER THE FACT Philippines;
THAT PRIVATE RESPONDENTS ARE GUILTY OF FORUM SHOPPING." 18
"ii) The loan transactions were obtained, perfected, performed,
As to the first assigned error: Petitioners argue that the borrowers and the consummated and partially paid outside the Philippines;
registered owners of the vessels are the foreign corporations and not private
respondents Litonjuas who are mere stockholders; and that the revenues "iii) The monies were advanced outside the Philippines. Furthermore,
derived from the operations of all the vessels are deposited in the accounts of the mortgaged vessels were part of an offshore fleet, not based in the
the corporations. Hence, petitioners maintain that these foreign corporations Philippines;
are the legal entities that have the personalities to sue and not herein private
respondents; that private respondents, being mere shareholders, have no "iv) All the loans involved were granted to the Private Respondents'
claim on the vessels as owners since they merely have an inchoate right to foreign CORPORATIONS;
whatever may remain upon the dissolution of the said foreign corporations
and after all creditors have been fully paid and satisfied;19 and that while
"v) The Restructuring Agreements were ALL governed by the laws of
private respondents may have allegedly spent amounts equal to 10% of the
England;
acquisition costs of the vessels in question, their 10% however represents their
investments as stockholders in the foreign corporations.20
"vi) The subsequent sales of the mortgaged vessels and the
application of the sales proceeds occurred and transpired outside
Anent the second assigned error, petitioners posit that while the application of
the Philippines, and the deliveries of the sold mortgaged vessels were
the principle of forum non conveniens is discretionary on the part of the Court,
likewise made outside the Philippines;
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
"vii) The revenues of the vessels and the proceeds of the sales of these
be disturbed, as elucidated in Gulf Oil Corp. vs. Gilbert21 and Piper Aircraft Co.
vessels were ALL deposited to the Accounts of the foreign
vs. Reyno,22 to wit:
CORPORATIONS abroad; and

"Private interest factors include: (a) the relative ease of access to

"viii) Bank of America International Ltd. is not licensed nor engaged in
sources of proof; (b) the availability of compulsory process for the
trade or business in the Philippines."24
attendance of unwilling witnesses; (c) the cost of obtaining
attendance of willing witnesses; or (d) all other practical problems
Petitioners argue further that the loan agreements, security documentation
that make trial of a case easy, expeditious and inexpensive. Public
and all subsequent restructuring agreements uniformly, unconditionally and
interest factors include: (a) the administrative difficulties flowing from

8
expressly provided that they will be governed by the laws of England;25 that (g) AURELIO KATIPUNAN LITONJUA, RJ., and (h) EDUARDO KATIPUNAN
Philippine Courts would then have to apply English law in resolving whatever LITONJUA."
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 that private respondents' alleged cause of action is already barred by
and burden not only upon the parties to the transaction but also to the local the pendency of another action or by litis pendentia as shown above.27
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 On the other hand, private respondents contend that certain material facts
Philippines may be avoided by its dismissal on the ground of forum non and pleadings are omitted and/or misrepresented in the present petition for
conveniens. 26 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
Finally, petitioners claim that private respondents have already waived their located in the Philippines;28 that while the complaint was filed only by the
alleged causes of action in the case at bar for their refusal to contest the stockholders of the corporate borrowers, the latter are wholly-owned by the
foreign civil cases earlier filed by the petitioners against them in Hongkong private respondents who are Filipinos and therefore under Philippine laws,
and England, to wit: aside from the said corporate borrowers being but their alter-egos, they have
interests of their own in the vessels.29 Private respondents also argue that the
"1.) Civil action in England in its High Court of Justice, Queen's Bench dismissal by the Court of Appeals of the petition for certiorari was justified
Division Commercial Court (1992-Folio No. 2098) against (a) LIBERIAN because there was neither allegation nor any showing whatsoever by the
TRANSPORT NAVIGATION. SA.; (b) ESHLEY COMPANIA NAVIERA SA., (c) petitioners that they had no appeal, nor any plain, speedy, and adequate
EL CHALLENGER SA; (d) ESPRIONA SHIPPING CO. SA; (e) PACIFIC remedy in the ordinary course of law from the Order of the trial judge denying
NAVIGATOS CORP. SA; (f) EDDIE NAVIGATION CORP. SA; (g) their Motion to Dismiss; that the remedy available to the petitioners after their
EDUARDO K. LITONJUA & (h) AURELIO K. LITONJUA. Motion to Dismiss was denied was to file an Answer to the complaint;30 that as
upheld by the Court of Appeals, the decision of the trial court in not applying
"2.) Civil action in England in its High Court of Justice, Queen's Bench the principle of forum non conveniens is in the lawful exercise of its discretion.31
Division, Commercial Court (1992-Folio No. 2245) against (a) EL Finally, private respondents aver that the statement of petitioners that the
CHALLENGER S.A., (b) ESPRIONA SHIPPING COMPANY S.A., (c) doctrine of res judicata also applies to foreign judgment is merely an opinion
EDUARDO KATIPUNAN LITONJUA and (d) AURELIO KATIPUNAN advanced by them and not based on a categorical ruling of this Court;32 and
LITONJUA. that herein private respondents did not actually participate in the
proceedings in the foreign courts.33
"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 We deny the petition for lack of merit.
CHALLENGER S.A., (c) ESPRIONA SHIPPING COMPANY S.A., (d)
PACIFIC NAVIGATORS CORPORATION (e) EDDIE NAVIGATION It is a well-settled rule that the order denying the motion to dismiss cannot be
CORPORATION S.A., (f) LITONJUA CHARTERING (EDYSHIP) CO., INC., the subject of petition for certiorari. Petitioners should have filed an answer to
(g) AURELIO KATIPUNAN LITONJUA, JR., and (h) EDUARDO KATIPUNAN the complaint, proceed to trial and await judgment before making an
LITONJUA. appeal. As repeatedly held by this Court:

"4.) A civil action in the Supreme Court of Hong Kong High Court "An order denying a motion to dismiss is interlocutory and cannot be
(Action No. 4040 of 1992), against (a) ESHLEY COMPANIA NAVIERA the subject of the extraordinary petition for certiorari or mandamus.
S.A., (b) EL CHALLENGER S.A., (c) ESPRIONA SHIPPING COMPANY S.A., The remedy of the aggrieved party is to file an answer and to
(d) PACIFIC NAVIGATORS CORPORATION (e) EDDIE NAVIGATION interpose as defenses the objections raised in his motion to dismiss,
CORPORATION S.A., (f) LITONJUA CHARTERING (EDYSHIP) CO., INC., proceed to trial, and in case of an adverse decision, to elevate the
entire case by appeal in due course. xxx Under certain situations,

9
 recourse to certiorari or mandamus is considered appropriate, i.e., (a) complaint, while "lack of cause of action" may be raised any time after the
when the trial court issued the order without or in excess of jurisdiction; questions of fact have been resolved on the basis of stipulations, admissions or
(b) where there is patent grave abuse of discretion by the trial court; evidence presented.39
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 In the case at bar, the complaint contains the three elements of a cause of
injurious effects of the patently mistaken order maintaining the action. It alleges that: (1) plaintiffs, herein private respondents, have the right
plaintiff's baseless action and compelling the defendant needlessly to to demand for an accounting from defendants (herein petitioners), as trustees
go through a protracted trial and clogging the court dockets by by reason of the fiduciary relationship that was created between the parties
another futile case."34 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.
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 Petitioners insist that they do not have any obligation to the private
motion to dismiss constitute a patent grave abuse of discretion? Would respondents as they are mere stockholders of the corporation; that the
appeal, under the circumstances, not prove to be a speedy and adequate corporate entities have juridical personalities separate and distinct from those
remedy? We will resolve said questions in conjunction with the issues raised by of the private respondents. Private respondents maintain that the corporations
the parties. 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
First issue. Did the trial court commit grave abuse of discretion in refusing to petitioners to invest on the additional ships.
dismiss the complaint on the ground that plaintiffs have no cause of action
against defendants since plaintiffs are merely stockholders of the corporations We agree with private respondents. As held in the San Lorenzo case,40
which are the registered owners of the vessels and the borrowers of
petitioners? "xxx assuming that the allegation of facts constituting plaintiffs' cause
of action is not as clear and categorical as would otherwise be
No. Petitioners' argument that private respondents, being mere stockholders desired, any uncertainty thereby arising should be so resolved as to
of the foreign corporations, have no personalities to sue, and therefore, the enable a full inquiry into the merits of the action."
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. As this Court has explained in the San Lorenzo case, such a course, would
Lack of personality to sue can be used as a ground for a Motion to Dismiss preclude multiplicity of suits which the law abhors, and conduce to the
based on the fact that the complaint, on the face thereof, evidently states no definitive determination and termination of the dispute. To do otherwise, that
cause of action.35 In San Lorenzo Village Association, Inc. vs. Court of is, to abort the action on account of the alleged fatal flaws of the complaint
Appeals,36 this Court clarified that a complaint states a cause of action where would obviously be indecisive and would not end the controversy, since the
it contains three essential elements of a cause of action, namely: (1) the legal institution of another action upon a revised complaint would not be
right of the plaintiff, (2) the correlative obligation of the defendant, and (3) foreclosed.41
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 Second Issue. Should the complaint be dismissed on the ground of forum non-
dismiss on the ground of failure to state a cause of action.37 To emphasize, it is conveniens?
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.38
No. The doctrine of forum non-conveniens, literally meaning 'the forum is
"Failure to state a cause of action" refers to the insufficiency of allegation in
inconvenient', emerged in private international law to deter the practice of
the pleading, unlike "lack of cause of action" which refers to the insufficiency
global forum shopping,42 that is to prevent non-resident litigants from choosing
of factual basis for the action. "Failure to state a cause of action" may be
the forum or place wherein to bring their suit for malicious reasons, such as to
raised at the earliest stages of an action through a motion to dismiss the

10
secure procedural advantages, to annoy and harass the defendant, to avoid In case at bar, not all the requirements for litis pendentia are present. While
overcrowded dockets, or to select a more friendly venue. Under this doctrine, there may be identity of parties, notwithstanding the presence of other
a court, in conflicts of law cases, may refuse impositions on its jurisdiction respondents,51 as well as the reversal in positions of plaintiffs and defendants52,
where it is not the most "convenient" or available forum and the parties are still the other requirements necessary for litis pendentia were not shown by
not precluded from seeking remedies elsewhere.43 petitioner. It merely mentioned that civil cases were filed in Hongkong and
England without however showing the identity of rights asserted and the reliefs
Whether a suit should be entertained or dismissed on the basis of said doctrine sought for as well as the presence of the elements of res judicata should one
depends largely upon the facts of the particular case and is addressed to the of the cases be adjudged.
sound discretion of the trial court.44 In the case of Communication Materials
and Design, Inc. vs. Court of Appeals,45 this Court held that "xxx [a Philippine As the Court of Appeals aptly observed:
Court may assume jurisdiction over the case if it chooses to do so; provided,
that the following requisites are met: (1) that the Philippine Court is one to "xxx [T]he petitioners, by simply enumerating the civil actions instituted
which the parties may conveniently resort to; (2) that the Philippine Court is in abroad involving the parties herein xxx, failed to provide this Court
a position to make an intelligent decision as to the law and the facts; and, (3) with relevant and clear specifications that would show the presence
that the Philippine Court has or is likely to have power to enforce its of the above-quoted elements or requisites for res judicata. While it is
decision."46 Evidently, all these requisites are present in the instant case. true that the petitioners in their motion for reconsideration (CA Rollo,
p. 72), after enumerating the various civil actions instituted abroad,
Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court did aver that "Copies of the foreign judgments are hereto attached
of Appeals,47 that the doctrine of forum non conveniens should not be used as and made integral parts hereof as Annexes 'B', 'C', 'D' and 'E'", they
a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court failed, wittingly or inadvertently, to include a single foreign judgment
does not include said doctrine as a ground. This Court further ruled that while it in their pleadings submitted to this Court as annexes to their petition.
is within the discretion of the trial court to abstain from assuming jurisdiction on How then could We have been expected to rule on this issue even if
this ground, it should do so only after vital facts are established, to determine We were to hold that foreign judgments could be the basis for the
whether special circumstances require the court's desistance; and that the application of the aforementioned principle of res judicata?"53
propriety of dismissing a case based on this principle of forum non conveniens
requires a factual determination, hence it is more properly considered a Consequently, both courts correctly denied the dismissal of herein subject
matter of defense.48 complaint.

Third issue. Are private respondents guilty of forum shopping because of the WHEREFORE, the petition is DENIED for lack of merit.
pendency of foreign action?
Costs against petitioners.
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 SO ORDERED.
other.49 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.50

11
Forum Non Conveniens them; subsequently, PIL and Todaro came to an agreement wherein the
former consented to engage the services of the latter as a consultant for two
G.R. No. 154830 June 8, 2007 to three months, after which, he would be employed as the manager of PIL's
ready-mix concrete operations should the company decide to invest in the
PIONEER CONCRETE PHILIPPINES, INC., PIONEER PHILIPPINES HOLDINGS, and Philippines; subsequently, PIL started its operations in the Philippines; however,
PHILIP J. KLEPZIG, petitioners, it refused to comply with its undertaking to employ Todaro on a permanent
vs. basis.4
ANTONIO D. TODARO, respondent.
Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss
DECISION the complaint on the grounds that the complaint states no cause of action,
that the RTC has no jurisdiction over the subject matter of the complaint, as
AUSTRIA-MARTINEZ, J.: the same is within the jurisdiction of the NLRC, and that the complaint should
be dismissed on the basis of the doctrine of forum non conveniens.5
Before the Court is a Petition for Review on Certiorari seeking to annul and set
aside the Decision1 of the Court of Appeals (CA) dated October 31, 2000 in In its Order dated January 4, 1999, the RTC of Makati, Branch 147, denied
CA-G.R. SP No. 54155 and its Resolution2 of August 21, 2002 denying herein petitioners' respective motions to dismiss.6 Herein petitioners, as
petitioners’ Motion for Reconsideration. defendants, filed an Urgent Omnibus Motion7 for the reconsideration of the
trial court's Order of January 4, 1999 but the trial court denied it via its Order 8
dated June 3, 1999.
The factual and procedural antecedents of the case are as follows:

On August 3, 1999, herein petitioners filed a Petition for Certiorari with the CA.9
On January 16, 1998, herein respondent Antonio D. Todaro (Todaro) filed with
On October 31, 2000, the CA rendered its presently assailed Decision denying
the Regional Trial Court (RTC) of Makati City, a complaint for Sum of Money
herein petitioners' Petition for Certiorari. Petitioners filed a Motion for
and Damages with Preliminary Attachment against Pioneer International
Reconsideration but the CA denied it in its Resolution dated August 21, 2002.
Limited (PIL), Pioneer Concrete Philippines, Inc. (PCPI), Pioneer Philippines
Holdings, Inc. (PPHI), John G. McDonald (McDonald) and Philip J. Klepzig
(Klepzig).3 Hence, herein Petition for Review on Certiorari based on the following
assignment of errors:

In his complaint, Todaro alleged that PIL is a corporation duly organized and
existing under the laws of Australia and is principally engaged in the ready-mix A.
concrete and concrete aggregates business; PPHI is the company established
by PIL to own and hold the stocks of its operating company in the Philippines; THE COURT OF APPEALS' CONCLUSION THAT THE COMPLAINT STATES A
PCPI is the company established by PIL to undertake its business of ready-mix CAUSE OF ACTION AGAINST PETITIONERS IS WITHOUT ANY LEGAL BASIS.
concrete, concrete aggregates and quarrying operations in the Philippines; THE ANNEXES TO THE COMPLAINT CLEARLY BELIE THE ALLEGATION OF
McDonald is the Chief Executive of the Hongkong office of PIL; and, Klepzig is EXISTENCE OF AN EMPLOYMENT CONTRACT BETWEEN PRIVATE
the President and Managing Director of PPHI and PCPI; Todaro has been the RESPONDENT AND PETITIONERS.
managing director of Betonval Readyconcrete, Inc. (Betonval), a company
engaged in pre-mixed concrete and concrete aggregate production; he B.
resigned from Betonval in February 1996; in May 1996, PIL contacted Todaro
and asked him if he was available to join them in connection with their THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A
intention to establish a ready-mix concrete plant and other related operations WAY NOT IN ACCORD WITH LAW AND WITH APPLICABLE DECISIONS OF
in the Philippines; Todaro informed PIL of his availability and interest to join THE SUPREME COURT WHEN IT UPHELD THE JURISDICTION OF THE TRIAL

12
 COURT DESPITE THE FACT THAT THE COMPLAINT INDUBITABLY SHOWS Code, a contract is not binding upon and cannot be enforced against one
THAT IT IS AN ACTION FOR AN ALLEGED BREACH OF EMPLOYMENT who was not a party to it even if he be aware of such contract and has acted
CONTRACT, AND HENCE, FALLS WITHIN THE EXLCUSIVE JURISDICTION with knowledge thereof.
OF THE NATIONAL LABOR RELATIONS COMMISSION.
Petitioners further assert that petitioner Klepzig may not be held liable
C because he is simply acting in his capacity as president of PCPI and PPHI and
settled is the rule that an officer of a corporation is not personally liable for
THE COURT OF APPEALS DISREGARDED AND FAILED TO CONSIDER THE acts done in the performance of his duties and within the bounds of the
PRINCIPLE OF "FORUM NON CONVENIENS" AS A VALID GROUND FOR authority conferred on him. Furthermore, petitioners argue that even if PCPI
DISMISSING A COMPLAINT.10 and PPHI are held liable, respondent still has no cause of action against
Klepzig because PCPI and PPHI have personalities which are separate and
In their first assigned error, petitioners contend that there was no perfected distinct from those acting in their behalf, such as Klepzig.
employment contract between PIL and herein respondent. Petitioners assert
that the annexes to respondent's complaint show that PIL's offer was for As to their second assigned error, petitioners contend that since herein
respondent to be employed as the manager only of its pre-mixed concrete respondent's claims for actual, moral and exemplary damages are solely
operations and not as the company's managing director or CEO. Petitioners premised on the alleged breach of employment contract, the present case
argue that when respondent reiterated his intention to become the manager should be considered as falling within the exclusive jurisdiction of the NLRC.
of PIL's overall business venture in the Philippines, he, in effect did not accept
PIL's offer of employment and instead made a counter-offer, which, however, With respect to the third assigned error, petitioners assert that the principle of
was not accepted by PIL. Petitioners also contend that under Article 1318 of forum non conveniens dictates that even where exercise of jurisidiction is
the Civil Code, one of the requisites for a contract to be perfected is the authorized by law, courts may refuse to entertain a case involving a foreign
consent of the contracting parties; that under Article 1319 of the same Code, element where the matter can be better tried and decided elsewhere, either
consent is manifested by the meeting of the offer and the acceptance upon because the main aspects of the case transpired in a foreign jurisdiction or the
the thing and the cause which are to constitute the contract; that the offer material witnesses have their residence there and the plaintiff sought the
must be certain and the acceptance absolute; that a qualified acceptance forum merely to secure procedural advantage or to annoy or harass the
constitutes a counter-offer. Petitioners assert that since PIL did not accept defendant. Petitioners also argue that one of the factors in determining the
respondent's counter-offer, there never was any employment contract that most convenient forum for conflicts problem is the power of the court to
was perfected between them. enforce its decision. Petitioners contend that since the majority of the
defendants in the present case are not residents of the Philippines, they are
Petitioners further argue that respondent's claim for damages based on the not subject to compulsory processes of the Philippine court handling the case
provisions of Articles 19 and 21 of the Civil Code is baseless because it was for purposes of requiring their attendance during trial. Even assuming that they
shown that there was no perfected employment contract. can be summoned, their appearance would entail excessive costs. Petitioners
further assert that there is no allegation in the complaint from which one can
Assuming, for the sake of argument, that PIL may be held liable for breach of conclude that the evidence to be presented during the trial can be better
employment contract, petitioners contend that PCPI and PPHI, may not also obtained in the Philippines. Moreover, the events which led to the present
be held liable because they are juridical entities with personalities which are controversy occurred outside the Philippines. Petitioners conclude that based
separate and distinct from PIL, even if they are subsidiary corporations of the on the foregoing factual circumstances, the case should be dismissed under
latter. Petitioners also aver that the annexes to respondent's complaint show the principle of forum non conveniens.
that the negotiations on the alleged employment contract took place
between respondent and PIL through its office in Hongkong. In other words, In his Comment, respondent extensively quoted the assailed CA Decision
PCPI and PPHI were not privy to the negotiations between PIL and respondent maintaining that the factual allegations in the complaint determine whether
for the possible employment of the latter; and under Article 1311 of the Civil or not the complaint states a cause of action.

13
As to the question of jurisdiction, respondent contends that the complaint he The elementary test for failure to state a cause of action is whether
filed was not based on a contract of employment. Rather, it was based on the complaint alleges facts which if true would justify the relief
petitioners' unwarranted breach of their contractual obligation to employ demanded. Stated otherwise, may the court render a valid judgment
respondent. This breach, respondent argues, gave rise to an action for upon the facts alleged therein? The inquiry is into the sufficiency, not
damages which is cognizable by the regular courts. the veracity of the material allegations. If the allegations in the
complaint furnish sufficient basis on which it can be maintained, it
Even assuming that there was an employment contract, respondent asserts should not be dismissed regardless of the defense that may be
that for the NLRC to acquire jurisdiction, the claim for damages must have a presented by the defendants.13
reasonable causal connection with the employer-employee relationship of
petitioners and respondent. Moreover, the complaint does not have to establish or allege facts proving
the existence of a cause of action at the outset; this will have to be done at
Respondent further argues that there is a perfected contract between him the trial on the merits of the case.14 To sustain a motion to dismiss for lack of
and petitioners as they both agreed that the latter shall employ him to cause of action, the complaint must show that the claim for relief does not
manage and operate their ready-mix concrete operations in the Philippines. exist, rather than that a claim has been defectively stated, or is ambiguous,
Even assuming that there was no perfected contract, respondent contends indefinite or uncertain.15
that his complaint alleges an alternative cause of action which is based on
the provisions of Articles 19 and 21 of the Civil Code. Hence, in resolving whether or not the Complaint in the present case states a
cause of action, the trial court correctly limited itself to examining the
As to the applicability of the doctrine of forum non conveniens, respondent sufficiency of the allegations in the Complaint as well as the annexes thereto.
avers that the question of whether a suit should be entertained or dismissed on It is proscribed from inquiring into the truth of the allegations in the Complaint
the basis of the principle of forum non conveniens depends largely upon the or the authenticity of any of the documents referred or attached to the
facts of the particular case and is addressed to the sound discretion of the Complaint, since these are deemed hypothetically admitted by the
trial judge, who is in the best position to determine whether special respondent.
circumstances require that the court desist from assuming jurisdiction over the
suit. This Court has reviewed respondent’s allegations in its Complaint. In a nutshell,
respondent alleged that herein petitioners reneged on their contractual
The petition lacks merit. obligation to employ him on a permanent basis. This allegation is sufficient to
constitute a cause of action for damages.
Section 2, Rule 2 of the Rules of Court, as amended, defines a cause of action
as the act or omission by which a party violates a right of another. A cause of The issue as to whether or not there was a perfected contract between
action exists if the following elements are present: (1) a right in favor of the petitioners and respondent is a matter which is not ripe for determination in
plaintiff by whatever means and under whatever law it arises or is created; (2) the present case; rather, this issue must be taken up during trial, considering
an obligation on the part of the named defendant to respect or not to violate that its resolution would necessarily entail an examination of the veracity of
such right; and, (3) an act or omission on the part of such defendant violative the allegations not only of herein respondent as plaintiff but also of petitioners
of the right of the plaintiff or constituting a breach of the obligation of the as defendants.
defendant to the plaintiff for which the latter may maintain an action for
recovery of damages.11 The Court does not agree with petitioners' contention that they were not privy
to the negotiations for respondent's possible employment. It is evident from
In Hongkong and Shanghai Banking Corporation Limited v. Catalan,12 this paragraphs 24 to 28 of the Complaint16 that, on various occasions, Klepzig
Court held: conducted negotiations with respondent regarding the latter's possible
employment. In fact, Annex "H"17 of the complaint shows that it was Klepzig
who informed respondent that his company was no longer interested in

14
employing respondent. Hence, based on the allegations in the Complaint the Philippine Court has or is likely to have power to enforce its
and the annexes attached thereto, respondent has a cause of action against decision."
herein petitioners.
Moreover, this Court enunciated in Philsec. Investment Corporation vs.
As to the question of jurisdiction, this Court has consistently held that where no Court of Appeals, that the doctrine of forum non conveniens should
employer-employee relationship exists between the parties and no issue is not be used as a ground for a motion to dismiss because Sec. 1, Rule
involved which may be resolved by reference to the Labor Code, other labor 16 of the Rules of Court does not include said doctrine as a ground.
statutes or any collective bargaining agreement, it is the Regional Trial Court This Court further ruled that while it is within the discretion of the trial
that has jurisdiction.18 In the present case, no employer-employee relationship court to abstain from assuming jurisdiction on this ground, it should do
exists between petitioners and respondent. In fact, in his complaint, private so only after vital facts are established, to determine whether special
respondent is not seeking any relief under the Labor Code, but seeks payment circumstances require the court’s desistance; and that the propriety of
of damages on account of petitioners' alleged breach of their obligation dismissing a case based on this principle of forum non conveniens
under their agreement to employ him. It is settled that an action for breach of requires a factual determination, hence it is more properly considered
contractual obligation is intrinsically a civil dispute.19 In the alternative, a matter of defense.22 (emphasis supplied)
respondent seeks redress on the basis of the provisions of Articles 19 and 21 of
the Civil Code. Hence, it is clear that the present action is within the realm of In the present case, the factual circumstances cited by petitioners which
civil law, and jurisdiction over it belongs to the regular courts.20 would allegedly justify the application of the doctrine of forum non
conveniens are matters of defense, the merits of which should properly be
With respect to the applicability of the principle of forum non conveniens in threshed out during trial.
the present case, this Court's ruling in Bank of America NT & SA v. Court of
Appeals21 is instructive, to wit: WHEREFORE, the instant petition is DENIED and the assailed Decision and
Resolution of the Court of Appeals are AFFIRMED.
The doctrine of forum non conveniens, literally meaning ‘the forum is
inconvenient’, emerged in private international law to deter the Costs against petitioners.
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.

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 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

15
Forum Non Conveniens 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.
G.R. No. 162894 February 26, 2008 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
RAYTHEON INTERNATIONAL, INC., petitioner, corporations impleaded in the earlier labor case. The complaint essentially
vs. reiterated the allegations in the labor case that BMSI verbally employed
STOCKTON W. ROUZIE, JR., respondent. respondent to negotiate the sale of services in government projects and that
respondent was not paid the commissions due him from the Pinatubo
DECISION 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.
TINGA, J.:

In its Answer,8 petitioner alleged that contrary to respondent’s claim, it was a

Before this Court is a petition for review on certiorari under Rule 45 of the 1997
foreign corporation duly licensed to do business in the Philippines and denied
Rules of Civil Procedure which seeks the reversal of the Decision1 and
entering into any arrangement with respondent or paying the latter any sum
Resolution2 of the Court of Appeals in CA-G.R. SP No. 67001 and the dismissal
of money. Petitioner also denied combining with BMSI and RUST for the
of the civil case filed by respondent against petitioner with the trial court.
purpose of assuming the alleged obligation of the said companies.9 Petitioner
also referred to the NLRC decision which disclosed that per the written
As culled from the records of the case, the following antecedents appear:
agreement between respondent and BMSI and RUST, denominated as
"Special Sales Representative Agreement," the rights and obligations of the
Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly
parties shall be governed by the laws of the State of Connecticut.10 Petitioner
organized and existing under the laws of the State of Connecticut, United
sought the dismissal of the complaint on grounds of failure to state a cause of
States of America, and respondent Stockton W. Rouzie, Jr., an American
action and forum non conveniens and prayed for damages by way of
citizen, entered into a contract whereby BMSI hired respondent as its
compulsory counterclaim.11
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
On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing
11 March 1992, respondent secured a service contract with the Republic of
Based on Affirmative Defenses and for Summary Judgment12 seeking the
the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt.
dismissal of the complaint on grounds of forum non conveniens and failure to
Pinatubo eruption and mudflows.3
state a cause of action. Respondent opposed the same. Pending the
resolution of the omnibus motion, the deposition of Walter Browning was taken
On 16 July 1994, respondent filed before the Arbitration Branch of the National
before the Philippine Consulate General in Chicago.13
Labor Relations Commission (NLRC) a suit against BMSI and Rust International,
Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged
In an Order14 dated 13 September 2000, the RTC denied petitioner’s omnibus
nonpayment of commissions, illegal termination and breach of employment
motion. The trial court held that the factual allegations in the complaint,
contract.4 On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered
assuming the same to be admitted, were sufficient for the trial court to render
judgment ordering BMSI and RUST to pay respondent’s money claims.5 Upon
a valid judgment thereon. It also ruled that the principle of forum non
appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and
conveniens was inapplicable because the trial court could enforce judgment
dismissed respondent’s complaint on the ground of lack of jurisdiction.6
on petitioner, it being a foreign corporation licensed to do business in the
Respondent elevated the case to this Court but was dismissed in a Resolution
Philippines.15
dated 26 November 1997. The Resolution became final and executory on 09
November 1998.
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

16
denied petitioner’s motion. Thus, it filed a Rule 65 Petition 19 with the Court of The instant petition lacks merit.
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 Petitioner mainly asserts that the written contract between respondent and
July 2001 and to enjoin the trial court from conducting further proceedings.20 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
On 28 August 2003, the Court of Appeals rendered the assailed Decision21 presence of foreign elements in the dispute – namely, the parties and
denying the petition for certiorari for lack of merit. It also denied petitioner’s witnesses involved are American corporations and citizens and the evidence
motion for reconsideration in the assailed Resolution issued on 10 March to be presented is located outside the Philippines – that renders our local
2004.22 courts inconvenient forums. Petitioner theorizes that the foreign elements of
the dispute necessitate the immediate application of the doctrine of forum
The appellate court held that although the trial court should not have non conveniens.
confined itself to the allegations in the complaint and should have also
considered evidence aliunde in resolving petitioner’s omnibus motion, it found Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive
the evidence presented by petitioner, that is, the deposition of Walter phases involved in judicial resolution of conflicts-of-laws problems, namely:
Browning, insufficient for purposes of determining whether the complaint jurisdiction, choice of law, and recognition and enforcement of judgments.
failed to state a cause of action. The appellate court also stated that it could Thus, in the instances27 where the Court held that the local judicial machinery
not rule one way or the other on the issue of whether the corporations, was adequate to resolve controversies with a foreign element, the following
including petitioner, named as defendants in the case had indeed merged requisites had to be proved: (1) that the Philippine Court is one to which the
together based solely on the evidence presented by respondent. Thus, it held parties may conveniently resort; (2) that the Philippine Court is in a position to
that the issue should be threshed out during trial.23 Moreover, the appellate make an intelligent decision as to the law and the facts; and (3) that the
court deferred to the discretion of the trial court when the latter decided not Philippine Court has or is likely to have the power to enforce its decision.28
to desist from assuming jurisdiction on the ground of the inapplicability of the
principle of forum non conveniens. 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
Hence, this petition raising the following issues: 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
WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO foreign forum. This is an exercise of sovereign prerogative of the country where
DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION the case is filed.29
AGAINST RAYTHEON INTERNATIONAL, INC.
Jurisdiction over the nature and subject matter of an action is conferred by
WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO the Constitution and the law30 and by the material allegations in the
DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON complaint, irrespective of whether or not the plaintiff is entitled to recover all
CONVENIENS.24 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,
Incidentally, respondent failed to file a comment despite repeated notices. the nature of the action and the amount of damages prayed are within the
The Ceferino Padua Law Office, counsel on record for respondent, manifested jurisdiction of the RTC.
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 As regards jurisdiction over the parties, the trial court acquired jurisdiction over
it could no longer find the whereabouts of Atty. Karagdag or of respondent herein respondent (as party plaintiff) upon the filing of the complaint. On the
despite diligent efforts. In a Resolution25 dated 20 November 2006, the Court other hand, jurisdiction over the person of petitioner (as party defendant) was
resolved to dispense with the filing of a comment. acquired by its voluntary appearance in court.32

17
That the subject contract included a stipulation that the same shall be x x x Our examination of the deposition of Mr. Walter Browning as well
governed by the laws of the State of Connecticut does not suggest that the as other documents produced in the hearing shows that these
Philippine courts, or any other foreign tribunal for that matter, are precluded evidence aliunde are not quite sufficient for us to mete a ruling that
from hearing the civil action. Jurisdiction and choice of law are two distinct the complaint fails to state a cause of action.
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 Annexes "A" to "E" by themselves are not substantial, convincing and
application of a substantive law which will determine the merits of the case is conclusive proofs that Raytheon Engineers and Constructors, Inc.
fair to both parties.33 The choice of law stipulation will become relevant only (REC) assumed the warranty obligations of defendant Rust
when the substantive issues of the instant case develop, that is, after hearing International in the Makar Port Project in General Santos City, after
on the merits proceeds before the trial court. Rust International ceased to exist after being absorbed by REC. Other
documents already submitted in evidence are likewise meager to
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws preponderantly conclude that Raytheon International, Inc., Rust
cases, may refuse impositions on its jurisdiction where it is not the most International[,] Inc. and Brand Marine Service, Inc. have combined
"convenient" or available forum and the parties are not precluded from into one company, so much so that Raytheon International, Inc., the
seeking remedies elsewhere.34 Petitioner’s averments of the foreign elements surviving company (if at all) may be held liable for the obligation of
in the instant case are not sufficient to oust the trial court of its jurisdiction over BMSI to respondent Rouzie for unpaid commissions. Neither these
Civil Case No. No. 1192-BG and the parties involved. documents clearly speak otherwise.38

Moreover, the propriety of dismissing a case based on the principle of forum As correctly pointed out by the Court of Appeals, the question of whether
non conveniens requires a factual determination; hence, it is more properly petitioner, BMSI and RUST merged together requires the presentation of further
considered as a matter of defense. While it is within the discretion of the trial evidence, which only a full-blown trial on the merits can afford.
court to abstain from assuming jurisdiction on this ground, it should do so only
after vital facts are established, to determine whether special circumstances WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision
require the court’s desistance.35 and Resolution of the Court of Appeals in CA-G.R. SP No. 67001 are hereby
AFFIRMED. Costs against petitioner.
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:

18
Forum Non Conveniens Petitioners are the Manila Hotel Corporation (hereinafter referred to as "MHC")
and the Manila Hotel International Company, Limited (hereinafter referred to
G.R. No. 120077 October 13, 2000 as "MHICL").

THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD., petitioners, When the case was filed in 1990, MHC was still a government-owned and
vs. controlled corporation duly organized and existing under the laws of the
NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA Philippines.
AND MARCELO G. SANTOS, respondents.
MHICL is a corporation duly organized and existing under the laws of Hong
PARDO, J.: Kong.7 MHC is an "incorporator" of MHICL, owning 50% of its capital stock.8

The case before the Court is a petition for certiorari1 to annul the following By virtue of a "management agreement"9 with the Palace Hotel (Wang Fu
orders of the National Labor Relations Commission (hereinafter referred to as Company Limited), MHICL10 trained the personnel and staff of the Palace
"NLRC") for having been issued without or with excess jurisdiction and with Hotel at Beijing, China.
grave abuse of discretion:2
Now the facts.
(1) Order of May 31, 1993.3 Reversing and setting aside its earlier
resolution of August 28, 1992.4 The questioned order declared that the During his employment with the Mazoon Printing Press in the Sultanate of
NLRC, not the Philippine Overseas Employment Administration Oman, respondent Santos received a letter dated May 2, 1988 from Mr.
(hereinafter referred to as "POEA"), had jurisdiction over private Gerhard R. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr.
respondent's complaint; Schmidt informed respondent Santos that he was recommended by one
Nestor Buenio, a friend of his.
(2) Decision of December 15, 1994.5 Directing petitioners to jointly and
severally pay private respondent twelve thousand and six hundred Mr. Shmidt offered respondent Santos the same position as printer, but with a
dollars (US$ 12,600.00) representing salaries for the unexpired portion higher monthly salary and increased benefits. The position was slated to open
of his contract; three thousand six hundred dollars (US$3,600.00) as on October 1, 1988.11
extra four months salary for the two (2) year period of his contract,
three thousand six hundred dollars (US$3,600.00) as "14th month pay" On May 8, 1988, respondent Santos wrote to Mr. Shmidt and signified his
or a total of nineteen thousand and eight hundred dollars acceptance of the offer.
(US$19,800.00) or its peso equivalent and attorney's fees amounting to
ten percent (10%) of the total award; and On May 19, 1988, the Palace Hotel Manager, Mr. Hans J. Henk mailed a ready
to sign employment contract to respondent Santos. Mr. Henk advised
(3) Order of March 30, 1995.6 Denying the motion for reconsideration respondent Santos that if the contract was acceptable, to return the same to
of the petitioners. Mr. Henk in Manila, together with his passport and two additional pictures for
his visa to China.
In May, 1988, private respondent Marcelo Santos (hereinafter referred to as
"Santos") was an overseas worker employed as a printer at the Mazoon On May 30, 1988, respondent Santos resigned from the Mazoon Printing Press,
Printing Press, Sultanate of Oman. Subsequently, in June 1988, he was directly effective June 30, 1988, under the pretext that he was needed at home to
hired by the Palace Hotel, Beijing, People's Republic of China and later help with the family's piggery and poultry business.
terminated due to retrenchment.

19
On June 4, 1988, respondent Santos wrote the Palace Hotel and "We sincerely regret that a decision like this has to be made, but rest
acknowledged Mr. Henk's letter. Respondent Santos enclosed four (4) signed assured this does in no way reflect your past performance which we
copies of the employment contract (dated June 4, 1988) and notified them found up to our expectations."
that he was going to arrive in Manila during the first week of July 1988.
"Should a turnaround in the business happen, we will contact you
The employment contract of June 4, 1988 stated that his employment would directly and give you priority on future assignment."
commence September 1, 1988 for a period of two years.12 It provided for a
monthly salary of nine hundred dollars (US$900.00) net of taxes, payable On September 5, 1989, the Palace Hotel terminated the employment of
fourteen (14) times a year.13 respondent Santos and paid all benefits due him, including his plane fare
back to the Philippines.
On June 30, 1988, respondent Santos was deemed resigned from the Mazoon
Printing Press. On October 3, 1989, respondent Santos was repatriated to the Philippines.

On July 1, 1988, respondent Santos arrived in Manila. On October 24, 1989, respondent Santos, through his lawyer, Atty. Ednave
wrote Mr. Shmidt, demanding full compensation pursuant to the employment
On November 5, 1988, respondent Santos left for Beijing, China. He started to agreement.
work at the Palace Hotel.14
On November 11, 1989, Mr. Shmidt replied, to wit:17
Subsequently, respondent Santos signed an amended "employment
agreement" with the Palace Hotel, effective November 5, 1988. In the His service with the Palace Hotel, Beijing was not abruptly terminated
contract, Mr. Shmidt represented the Palace Hotel. The Vice President but we followed the one-month notice clause and Mr. Santos
(Operations and Development) of petitioner MHICL Miguel D. Cergueda received all benefits due him.
signed the employment agreement under the word "noted".
"For your information the Print Shop at the Palace Hotel is still not
From June 8 to 29, 1989, respondent Santos was in the Philippines on vacation operational and with a low business outlook, retrenchment in various
leave. He returned to China and reassumed his post on July 17, 1989. departments of the hotel is going on which is a normal management
practice to control costs.
On July 22, 1989, Mr. Shmidt's Executive Secretary, a certain Joanna
suggested in a handwritten note that respondent Santos be given one (1) "When going through the latest performance ratings, please also be
month notice of his release from employment. advised that his performance was below average and a Chinese
National who is doing his job now shows a better approach.
On August 10, 1989, the Palace Hotel informed respondent Santos by letter
signed by Mr. Shmidt that his employment at the Palace Hotel print shop "In closing, when Mr. Santos received the letter of notice, he hardly
would be terminated due to business reverses brought about by the political showed up for work but still enjoyed free
upheaval in China.15 We quote the letter:16 accommodation/laundry/meals up to the day of his departure."

"After the unfortunate happenings in China and especially Beijing On February 20, 1990, respondent Santos filed a complaint for illegal dismissal
(referring to Tiannamen Square incidents), our business has been with the Arbitration Branch, National Capital Region, National Labor Relations
severely affected. To reduce expenses, we will not open/operate Commission (NLRC). He prayed for an award of nineteen thousand nine
printshop for the time being. hundred and twenty three dollars (US$19,923.00) as actual damages, forty
thousand pesos (P40,000.00) as exemplary damages and attorney's fees

20
equivalent to 20% of the damages prayed for. The complaint named MHC, On May 31, 1993, the NLRC granted the motion and reversed itself. The NLRC
MHICL, the Palace Hotel and Mr. Shmidt as respondents. directed Labor Arbiter Emerson Tumanon to hear the case on the question of
whether private respondent was retrenched or dismissed.22
The Palace Hotel and Mr. Shmidt were not served with summons and neither
participated in the proceedings before the Labor Arbiter.18 On January 13, 1994, Labor Arbiter Tumanon completed the proceedings
based on the testimonial and documentary evidence presented to and
On June 27, 1991, Labor Arbiter Ceferina J. Diosana, decided the case against heard by him.23
petitioners, thus:19
Subsequently, Labor Arbiter Tumanon was re-assigned as trial Arbiter of the
"WHEREFORE, judgment is hereby rendered: National Capital Region, Arbitration Branch, and the case was transferred to
Labor Arbiter Jose G. de Vera.24
"1. directing all the respondents to pay complainant jointly and
severally; On November 25, 1994, Labor Arbiter de Vera submitted his report.25 He
found that respondent Santos was illegally dismissed from employment and
"a) $20,820 US dollars or its equivalent in Philippine currency as recommended that he be paid actual damages equivalent to his salaries for
unearned salaries; the unexpired portion of his contract.26

"b) P50,000.00 as moral damages; On December 15, 1994, the NLRC ruled in favor of private respondent, to
wit:27
"c) P40,000.00 as exemplary damages; and
"WHEREFORE, finding that the report and recommendations of Arbiter
"d) Ten (10) percent of the total award as attorney's fees. de Vera are supported by substantial evidence, judgment is hereby
rendered, directing the respondents to jointly and severally pay
complainant the following computed contractual benefits: (1)
"SO ORDERED."
US$12,600.00 as salaries for the unexpired portion of the parties'
contract; (2) US$3,600.00 as extra four (4) months salary for the two (2)
On July 23, 1991, petitioners appealed to the NLRC, arguing that the POEA,
years period (sic) of the parties' contract; (3) US$3,600.00 as "14th
not the NLRC had jurisdiction over the case.
month pay" for the aforesaid two (2) years contract stipulated by the
parties or a total of US$19,800.00 or its peso equivalent, plus (4)
On August 28, 1992, the NLRC promulgated a resolution, stating:20
attorney's fees of 10% of complainant's total award.

"WHEREFORE, let the appealed Decision be, as it is hereby, declared

"SO ORDERED."
null and void for want of jurisdiction. Complainant is hereby enjoined
to file his complaint with the POEA.
On February 2, 1995, petitioners filed a motion for reconsideration arguing that
Labor Arbiter de Vera's recommendation had no basis in law and in fact.28
"SO ORDERED."

On March 30, 1995, the NLRC denied the motion for reconsideration.29
On September 18, 1992, respondent Santos moved for reconsideration of the
afore-quoted resolution. He argued that the case was not cognizable by the
Hence, this petition.30
POEA as he was not an "overseas contract worker."21

21
On October 9, 1995, petitioners filed with this Court an urgent motion for the Under the rule of forum non conveniens, a Philippine court or agency may
issuance of a temporary restraining order and/or writ of preliminary injunction assume jurisdiction over the case if it chooses to do so provided: (1) that the
and a motion for the annulment of the entry of judgment of the NLRC dated Philippine court is one to which the parties may conveniently resort to; (2) that
July 31, 1995.31 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
On November 20, 1995, the Court denied petitioner's urgent motion. The Court enforce its decision.37 The conditions are unavailing in the case at bar.
required respondents to file their respective comments, without giving due
course to the petition.32 Not Convenient. — We fail to see how the NLRC is a convenient forum given
that all the incidents of the case — from the time of recruitment, to
On March 8, 1996, the Solicitor General filed a manifestation stating that after employment to dismissal occurred outside the Philippines. The inconvenience
going over the petition and its annexes, they can not defend and sustain the is compounded by the fact that the proper defendants, the Palace Hotel and
position taken by the NLRC in its assailed decision and orders. The Solicitor MHICL are not nationals of the Philippines. Neither .are they "doing business in
General prayed that he be excused from filing a comment on behalf of the the Philippines." Likewise, the main witnesses, Mr. Shmidt and Mr. Henk are non-
NLRC33 residents of the Philippines.

On April 30,1996, private respondent Santos filed his comment.34 No power to determine applicable law. — Neither can an intelligent decision
be made as to the law governing the employment contract as such was
On June 26, 1996, the Court granted the manifestation of the Solicitor General perfected in foreign soil. This calls to fore the application of the principle of lex
and required the NLRC to file its own comment to the petition.35 loci contractus (the law of the place where the contract was made).38

On January 7, 1997, the NLRC filed its comment. The employment contract was not perfected in the Philippines. Respondent
Santos signified his acceptance by writing a letter while he was in the
The petition is meritorious. Republic of Oman. This letter was sent to the Palace Hotel in the People's
Republic of China.
I. Forum Non-Conveniens
No power to determine the facts. — Neither can the NLRC determine the
facts surrounding the alleged illegal dismissal as all acts complained of took
The NLRC was a seriously inconvenient forum.
place in Beijing, People's Republic of China. The NLRC was not in a position to
determine whether the Tiannamen Square incident truly adversely affected
We note that the main aspects of the case transpired in two foreign
operations of the Palace Hotel as to justify respondent Santos' retrenchment.
jurisdictions and the case involves purely foreign elements. The only link that
the Philippines has with the case is that respondent Santos is a Filipino citizen.
Principle of effectiveness, no power to execute decision. — Even assuming
The Palace Hotel and MHICL are foreign corporations. Not all cases involving
that a proper decision could be reached by the NLRC, such would not have
our citizens can be tried here.
any binding effect against the employer, the Palace Hotel. The Palace Hotel is
a corporation incorporated under the laws of China and was not even served
The employment contract. — Respondent Santos was hired directly by the
with summons. Jurisdiction over its person was not acquired.
Palace Hotel, a foreign employer, through correspondence sent to the
Sultanate of Oman, where respondent Santos was then employed. He was
This is not to say that Philippine courts and agencies have no power to solve
hired without the intervention of the POEA or any authorized recruitment
controversies involving foreign employers. Neither are we saying that we do
agency of the government.36
not have power over an employment contract executed in a foreign country.
If Santos were an "overseas contract worker", a Philippine forum, specifically

22
the POEA, not the NLRC, would protect him.39 He is not an "overseas contract III. MHICL not Liable
worker" a fact which he admits with conviction.40
Respondent Santos predicates MHICL's liability on the fact that MHICL "signed"
Even assuming that the NLRC was the proper forum, even on the merits, the his employment contract with the Palace Hotel. This fact fails to persuade us.
NLRC's decision cannot be sustained.
First, we note that the Vice President (Operations and Development) of
II. MHC Not Liable MHICL, Miguel D. Cergueda signed the employment contract as a mere
witness. He merely signed under the word "noted".
Even if we assume two things: (1) that the NLRC had jurisdiction over the case,
and (2) that MHICL was liable for Santos' retrenchment, still MHC, as a When one "notes" a contract, one is not expressing his agreement or approval,
separate and distinct juridical entity cannot be held liable. as a party would.46 In Sichangco v. Board of Commissioners of Immigration,47
the Court recognized that the term "noted" means that the person so noting
True, MHC is an incorporator of MHICL and owns fifty percent (50%) of its has merely taken cognizance of the existence of an act or declaration,
capital stock. However, this is not enough to pierce the veil of corporate without exercising a judicious deliberation or rendering a decision on the
fiction between MHICL and MHC. matter.

Piercing the veil of corporate entity is an equitable remedy. It is resorted to Mr. Cergueda merely signed the "witnessing part" of the document. The
when the corporate fiction is used to defeat public convenience, justify "witnessing part" of the document is that which, "in a deed or other formal
wrong, protect fraud or defend a crime. 41 It is done only when a corporation instrument is that part which comes after the recitals, or where there are no
is a mere alter ego or business conduit of a person or another corporation. recitals, after the parties (emphasis ours)."48 As opposed to a party to a
contract, a witness is simply one who, "being present, personally sees or
In Traders Royal Bank v. Court of Appeals,42 we held that "the mere ownership perceives a thing; a beholder, a spectator, or eyewitness."49 One who "notes"
by a single stockholder or by another corporation of all or nearly all of the something just makes a "brief written statement"50 a memorandum or
capital stock of a corporation is not of itself a sufficient reason for disregarding observation.
the fiction of separate corporate personalities."
Second, and more importantly, there was no existing employer-employee
The tests in determining whether the corporate veil may be pierced are: First, relationship between Santos and MHICL. In determining the existence of an
the defendant must have control or complete domination of the other employer-employee relationship, the following elements are considered:51
corporation's finances, policy and business practices with regard to the
transaction attacked. There must be proof that the other corporation had no "(1) the selection and engagement of the employee;
separate mind, will or existence with respect the act complained of. Second,
control must be used by the defendant to commit fraud or wrong. Third, the "(2) the payment of wages;
aforesaid control or breach of duty must be the proximate cause of the injury
or loss complained of. The absence of any of the elements prevents the "(3) the power to dismiss; and
piercing of the corporate veil.43
"(4) the power to control employee's conduct."
It is basic that a corporation has a personality separate and distinct from those
composing it as well as from that of any other legal entity to which it may be MHICL did not have and did not exercise any of the aforementioned powers.
related.44 Clear and convincing evidence is needed to pierce the veil of It did not select respondent Santos as an employee for the Palace Hotel. He
corporate fiction.45 In this case, we find no evidence to show that MHICL and was referred to the Palace Hotel by his friend, Nestor Buenio. MHICL did not
MHC are one and the same entity. engage respondent Santos to work. The terms of employment were

23
negotiated and finalized through correspondence between respondent "6. Except claims for Employees Compensation, Social Security,
Santos, Mr. Schmidt and Mr. Henk, who were officers and representatives of Medicare and maternity benefits, all other claims, arising from
the Palace Hotel and not MHICL. Neither did respondent Santos adduce any employer-employee relations, including those of persons in domestic
proof that MHICL had the power to control his conduct. Finally, it was the or household service, involving an amount exceeding five thousand
Palace Hotel, through Mr. Schmidt and not MHICL that terminated respondent pesos (P5,000.00) regardless of whether accompanied with a claim
Santos' services. for reinstatement."

Neither is there evidence to suggest that MHICL was a "labor-only In all these cases, an employer-employee relationship is an indispensable
contractor."52 There is no proof that MHICL "supplied" respondent Santos or jurisdictional requirement.
even referred him for employment to the Palace Hotel.
The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor
Likewise, there is no evidence to show that the Palace Hotel and MHICL are Code is limited to disputes arising from an employer-employee relationship
one and the same entity. The fact that the Palace Hotel is a member of the which can be resolved by reference to the Labor Code, or other labor
"Manila Hotel Group" is not enough to pierce the corporate veil between statutes, or their collective bargaining agreements.54
MHICL and the Palace Hotel.
"To determine which body has jurisdiction over the present controversy, we
IV. Grave Abuse of Discretion rely on the sound judicial principle that jurisdiction over the subject matter is
conferred by law and is determined by the allegations of the complaint
Considering that the NLRC was forum non-conveniens and considering further irrespective of whether the plaintiff is entitled to all or some of the claims
that no employer-employee relationship existed between MHICL, MHC and asserted therein."55
respondent Santos, Labor Arbiter Ceferina J. Diosana clearly had no
jurisdiction over respondent's claim in NLRC NCR Case No. 00-02-01058-90. The lack of jurisdiction of the Labor Arbiter was obvious from the allegations of
the complaint. His failure to dismiss the case amounts to grave abuse of
Labor Arbiters have exclusive and original jurisdiction only over the discretion.56
following:53
V. The Fallo
"1. Unfair labor practice cases;
WHEREFORE, the Court hereby GRANTS the petition for certiorari and ANNULS
"2. Termination disputes; the orders and resolutions of the National Labor Relations Commission dated
May 31, 1993, December 15, 1994 and March 30, 1995 in NLRC NCR CA No.
"3. If accompanied with a claim for reinstatement, those cases that 002101-91 (NLRC NCR Case No. 00-02-01058-90).
workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;

"4. Claims for actual, moral, exemplary and other forms of damages
arising from employer-employee relations;

"5. Cases arising from any violation of Article 264 of this Code,
including questions involving legality of strikes and lockouts; and

24
Assume jurisdiction and apply foreign law In addition, the due execution of the will was not established. The only
evidence on this point is to be found in the testimony of the petitioner. Aside
G.R. No. L-32636 March 17, 1930 from this, there was nothing to indicate that the will was acknowledged by the
testator in the presence of two competent witnesses, of that these witnesses
In the matter Estate of Edward Randolph Hix, deceased. subscribed the will in the presence of the testator and of each other as the
A.W. FLUEMER, petitioner-appellant, law of West Virginia seems to require. On the supposition that the witnesses to
vs. the will reside without the Philippine Islands, it would then the duty of the
ANNIE COUSHING HIX, oppositor-appellee. petitioner to prove execution by some other means (Code of Civil Procedure,
sec. 633.)
C.A. Sobral for appellant.
Harvey & O' Brien and Gibbs & McDonough for appellee. It was also necessary for the petitioner to prove that the testator had his
domicile in West Virginia and not establish this fact consisted of the recitals in
MALCOLM, J.: the CATHY will and the testimony of the petitioner. Also in beginning
administration proceedings orginally in the Philippine Islands, the petitioner
violated his own theory by attempting to have the principal administration in
The special administrator of the estate of Edward Randolph Hix appeals from
the Philippine Islands.
a decision of Judge of First Instance Tuason denying the probate of the
document alleged to by the last will and testament of the deceased.
Appellee is not authorized to carry on this appeal. We think, however, that the While the appeal pending submission in this court, the attorney for the
appellant, who appears to have been the moving party in these proceedings, appellant presented an unverified petition asking the court to accept as part
was a "person interested in the allowance or disallowance of a will by a Court of the evidence the documents attached to the petition. One of these
of First Instance," and so should be permitted to appeal to the Supreme Court documents discloses that a paper writing purporting to be the was presented
from the disallowance of the will (Code of Civil Procedure, sec. 781, as for probate on June 8, 1929, to the clerk of Randolph Country, State of West
amended; Villanueva vs. De Leon [1925], 42 Phil., 780). Virginia, in vacation, and was duly proven by the oaths of Dana Wamsley and
Joseph L. MAdden, the subscribing witnesses thereto , and ordered to be
recorded and filed. It was shown by another document that, in vacation, on
It is theory of the petitioner that the alleged will was executed in Elkins, West
June 8, 1929, the clerk of court of Randolph Country, West Virginia, appointed
Virginia, on November 3, 1925, by Hix who had his residence in that jurisdiction,
Claude W. Maxwell as administrator, cum testamento annexo, of the estate of
and that the laws of West Verginia Code, Annotated, by Hogg, Charles E., vol.
Edward Randolph Hix, deceased. In this connection, it is to be noted that the
2, 1914, p. 1690, and as certified to by the Director of the National Library. But
application for the probate of the will in the Philippines was filed on February
this was far from a compliance with the law. The laws of a foreign jurisdiction
20, 1929, while the proceedings in West Virginia appear to have been initiated
do not prove themselves in our courts. the courts of the Philippine Islands are
on June 8, 1929. These facts are strongly indicative of an intention to make the
not authorized to take American Union. Such laws must be proved as facts. (In
Philippines the principal administration and West Virginia the ancillary
re Estate of Johnson [1918], 39 Phil., 156.) Here the requirements of the law
administration. However this may be, no attempt has been made to comply
were not met. There was no was printed or published under the authority of
with Civil Procedure, for no hearing on the question of the allowance of a will
the State of West Virginia, as provided in section 300 of the Code of Civil
said to have been proved and allowed in West Virginia has been requested.
Procedure. Nor was the extract from the law attested by the certificate of the
There is no showing that the deceased left any property at any place other
officer having charge of the original, under the sale of the State of West
than the Philippine Islands and no contention that he left any in West Virginia.
Virginia, as provided in section 301 of the Code of Civil Procedure. No
evidence was introduced to show that the extract from the laws of West
Virginia was in force at the time the alleged will was executed. Reference has been made by the parties to a divorce purported to have
been awarded Edward Randolph Hix from Annie Cousins Hix on October 8,
1925, in the State of West specific pronouncements on the validity or validity of
this alleged divorce.

25
For all of the foregoing, the judgment appealed from will be affirmed, with the
costs of this instance against the appellant.

26
Assume jurisdiction and apply foreign law accordance with the laws of the state of Nevada and admits the
same to probate. Accordingly, the Philippine Trust Company, named
G.R. No. L-12105 January 30, 1960 as the executor of the will, is hereby appointed to such executor and
upon the filing of a bond in the sum of P10,000.00, let letters
TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor- testamentary be issued and after taking the prescribed oath, it may
appellee, enter upon the execution and performance of its trust. (pp. 26-27,
vs. R.O.A.).
MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA
BOHANAN, oppositors-appellants. It does not appear that the order granting probate was ever questions on
appeal. The executor filed a project of partition dated January 24, 1956,
Jose D. Cortes for appellants. making, in accordance with the provisions of the will, the following
Ohnick, Velilla and Balonkita for appellee. adjudications: (1) one-half of the residuary estate, to the Farmers and
Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the
LABRADOR, J.: benefit of testator's grandson Edward George Bohanan, which consists of
several mining companies; (2) the other half of the residuary estate to the
testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and
Appeal against an order of the Court of First Instance of Manila, Hon. Ramon
share alike. This consist in the same amount of cash and of shares of mining
San Jose, presiding, dismissing the objections filed by Magdalena C. Bohanan,
stock similar to those given to testator's grandson; (3) legacies of P6,000 each
Mary Bohanan and Edward Bohanan to the project of partition submitted by
to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia
the executor and approving the said project.
Bohanan, to be paid in three yearly installments; (4) legacies to Clara Daen, in
the amount of P10,000.00; Katherine Woodward, P2,000; Beulah Fox, P4,000;
On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo,
and Elizabeth Hastings, P2,000;
presiding, admitted to probate a last will and testament of C. O. Bohanan,
executed by him on April 23, 1944 in Manila. In the said order, the court made
It will be seen from the above that out of the total estate (after deducting
the following findings:
administration expenses) of P211,639.33 in cash, the testator gave his
grandson P90,819.67 and one-half of all shares of stock of several mining
According to the evidence of the opponents the testator was born in
companies and to his brother and sister the same amount. To his children he
Nebraska and therefore a citizen of that state, or at least a citizen of
gave a legacy of only P6,000 each, or a total of P12,000.
California where some of his properties are located. This contention in
untenable. Notwithstanding the long residence of the decedent in
The wife Magadalena C. Bohanan and her two children question the validity
the Philippines, his stay here was merely temporary, and he continued
of the testamentary provisions disposing of the estate in the manner above
and remained to be a citizen of the United States and of the state of
indicated, claiming that they have been deprived of the legitimate that the
his pertinent residence to spend the rest of his days in that state. His
laws of the form concede to them.
permanent residence or domicile in the United States depended
upon his personal intent or desire, and he selected Nevada as his
homicide and therefore at the time of his death, he was a citizen of The first question refers to the share that the wife of the testator, Magdalena
that state. Nobody can choose his domicile or permanent residence C. Bohanan, should be entitled to received. The will has not given her any
for him. That is his exclusive personal right. share in the estate left by the testator. It is argued that it was error for the trial
court to have recognized the Reno divorce secured by the testator from his
Filipino wife Magdalena C. Bohanan, and that said divorce should be
Wherefore, the court finds that the testator C. O. Bohanan was at the
declared a nullity in this jurisdiction, citing the case of Querubin vs. Querubin,
time of his death a citizen of the United States and of the State of
87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852,
Nevada and declares that his will and testament, Exhibit A, is fully in
Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court

27
below refused to recognize the claim of the widow on the ground that the The old Civil Code, which is applicable to this case because the testator died
laws of Nevada, of which the deceased was a citizen, allow him to dispose of in 1944, expressly provides that successional rights to personal property are to
all of his properties without requiring him to leave any portion of his estate to be earned by the national law of the person whose succession is in question.
his wife. Section 9905 of Nevada Compiled Laws of 1925 provides: Says the law on this point:

Every person over the age of eighteen years, of sound mind, may, by Nevertheless, legal and testamentary successions, in respect to the
last will, dispose of all his or her estate, real and personal, the same order of succession as well as to the extent of the successional rights
being chargeable with the payment of the testator's debts. and the intrinsic validity of their provisions, shall be regulated by the
national law of the person whose succession is in question, whatever
Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to may be the nature of the property and the country in which it is
a share in the testator's estafa had already been passed upon adversely found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art.
against her in an order dated June 19, 1955, (pp. 155-159, Vol II Records, Court 16, new Civil Code.)
of First Instance), which had become final, as Magdalena C. Bohanan does
not appear to have appealed therefrom to question its validity. On December In the proceedings for the probate of the will, it was found out and it was
16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 decided that the testator was a citizen of the State of Nevada because he
from the funds of the estate, chargeable against her share in the conjugal had selected this as his domicile and his permanent residence. (See Decision
property, (See pp. 294-297, Vol. I, Record, Court of First Instance), and the dated April 24, 1950, supra). So the question at issue is whether the
court in its said error found that there exists no community property owned by estementary dispositions, especially hose for the children which are short of
the decedent and his former wife at the time the decree of divorce was the legitime given them by the Civil Code of the Philippines, are valid. It is not
issued. As already and Magdalena C. Bohanan may no longer question the disputed that the laws of Nevada allow a testator to dispose of all his
fact contained therein, i.e. that there was no community property acquired properties by will (Sec. 9905, Complied Nevada Laws of 1925, supra). It does
by the testator and Magdalena C. Bohanan during their converture. not appear that at time of the hearing of the project of partition, the above-
quoted provision was introduced in evidence, as it was the executor's duly to
Moreover, the court below had found that the testator and Magdalena C. do. The law of Nevada, being a foreign law can only be proved in our courts
Bohanan were married on January 30, 1909, and that divorce was granted to in the form and manner provided for by our Rules, which are as follows:
him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married
Carl Aaron and this marriage was subsisting at the time of the death of the SEC. 41. Proof of public or official record. — An official record or an
testator. Since no right to share in the inheritance in favor of a divorced wife entry therein, when admissible for any purpose, may be evidenced by
exists in the State of Nevada and since the court below had already found an official publication thereof or by a copy tested by the officer
that there was no conjugal property between the testator and Magdalena C. having the legal custody of he record, or by his deputy, and
Bohanan, the latter can now have no longer claim to pay portion of the accompanied, if the record is not kept in the Philippines, with a
estate left by the testator. certificate that such officer has the custody. . . . (Rule 123).

The most important issue is the claim of the testator's children, Edward and We have, however, consulted the records of the case in the court below and
Mary Lydia, who had received legacies in the amount of P6,000 each only, we have found that during the hearing on October 4, 1954 of the motion of
and, therefore, have not been given their shares in the estate which, in Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign
accordance with the laws of the forum, should be two-thirds of the estate left law, especially Section 9905, Compiled Nevada Laws. was introduced in
by the testator. Is the failure old the testator to give his children two-thirds of evidence by appellant's (herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II,
the estate left by him at the time of his death, in accordance with the laws of and t.s.n. pp. 24-44, Records, Court of First Instance). Again said laws
the forum valid? presented by the counsel for the executor and admitted by the Court as
Exhibit "B" during the hearing of the case on January 23, 1950 before Judge
Rafael Amparo (se Records, Court of First Instance, Vol. 1).

28
In addition, the other appellants, children of the testator, do not dispute the
above-quoted provision of the laws of the State of Nevada. Under all the
above circumstances, we are constrained to hold that the pertinent law of
Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can
be taken judicial notice of by us, without proof of such law having been
offered at the hearing of the project of partition.

As in accordance with Article 10 of the old Civil Code, the validity of

testamentary dispositions are to be governed by the national law of the
testator, and as it has been decided and it is not disputed that the national
law of the testator is that of the State of Nevada, already indicated above,
which allows a testator to dispose of all his property according to his will, as in
the case at bar, the order of the court approving the project of partition
made in accordance with the testamentary provisions, must be, as it is hereby
affirmed, with costs against appellants.

29
Renvoi EDUARDO ESPIRITU, ERNESTO ESPIRITU, RODOLFO ESPIRITU, NESTOR M. ESTEVA,
BENJAMIN ESTRADA, VALERIO EVANGELISTA, OLIGARIO FRANCISCO, JESUS
G.R. No. L-104776 December 5, 1994 GABAWAN, ROLANDO GARCIA, ANGEL GUDA, PACITO HERNANDEZ, ANTONIO
HILARIO, HENRY L. JACOB, HONESTO JARDINIANO, ANTONIO JOCSON,
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, and GERARDO LACSAMANA, EFREN U. LIRIO LORETO LONTOC, ISRAEL LORENZO,
the rest of 1,767 NAMED-COMPLAINANTS, thru and by their Attorney-in-fact, ALEJANDRO LORINO, JOSE MABALAY, HERMIE MARANAN, LEOVIGILDO
Atty. GERARDO A. DEL MUNDO, petitioners, MARCIAL, NOEL MARTINEZ, DANTE MATREO, LUCIANO MELENDEZ, RENATO
vs. MELO, FRANCIS MEDIODIA, JOSE C. MILANES, RAYMUNDO C. MILAY,
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION'S ADMINISTRATOR, CRESENCIANO MIRANDA, ILDEFONSO C. MOLINA, ARMANDO B. MONDEJAR
NATIONAL LABOR RELATIONS COMMISSION, BROWN & ROOT INTERNATIONAL, RESURRECCION D. NAZARENO, JUAN OLINDO, FRANCISCO R. OLIVARES, PEDRO
INC. AND/OR ASIA INTERNATIONAL BUILDERS CORPORATION, respondents. ORBISTA, JR., RICARDO ORDONEZ, ERNIE PANCHO, JOSE PANCHO, GORGONIO
P. PARALA, MODESTO PINPIN, JUANITO PAREA, ROMEO I. PATAG, FRANCISCO
G.R. Nos. 104911-14 December 5, 1994 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,
BIENVENIDO M. CADALIN, ET AL., petitioners,
RODELIO RIETA, JR., BENITO RIVERA, JR., BERNARDO J. ROBILLOS, PABLO A.
vs.
ROBLES, JOSE ROBLEZA, QUIRINO RONQUILLO, AVELINO M. ROQUE, MENANDRO
HON. NATIONAL LABOR RELATIONS COMMISSION, BROWN & ROOT
L. SABINO, PEDRO SALGATAR, EDGARDO SALONGA, NUMERIANO SAN MATEO,
INTERNATIONAL, INC. and/or ASIA INTERNATIONAL BUILDERS CORPORATION,
FELIZARDO DE LOS SANTOS, JR., GABRIEL SANTOS, JUANITO SANTOS, PAQUITO
respondents.
SOLANTE, CONRADO A. SOLIS, JR., RODOLFO SULTAN, ISAIAS TALACTAC,
WILLIAM TARUC, MENANDRO TEMPROSA, BIENVENIDO S. TOLENTINO,
G.R. Nos. 105029-32 December 5, 1994
BENEDICTO TORRES, MAXIMIANO TORRES, FRANCISCO G. TRIAS, SERGIO A.
URSOLINO, ROGELIO VALDEZ, LEGORIO E. VERGARA, DELFIN VICTORIA, GILBERT
ASIA INTERNATIONAL BUILDER CORPORATION and BROWN & ROOT
VICTORIA, HERNANE VICTORIANO, FRANCISCO VILLAFLORES, DOMINGO
INTERNATIONAL, INC., petitioners,
VILLAHERMOSA, ROLANDO VILLALOBOS, ANTONIO VILLAUZ, DANILO
vs.
VILLANUEVA, ROGELIO VILLANUEVA, ANGEL VILLARBA, JUANITO VILLARINO,
NATIONAL LABOR RELATIONS COMMISSION, BIENVENIDO M. CADALIN,
FRANCISCO ZARA, ROGELIO AALAGOS, NICANOR B. ABAD, ANDRES ABANES,
ROLANDO M. AMUL, DONATO B. EVANGELISTA, ROMEO PATAG, RIZALINO
REYNALDO ABANES, EDUARDO ABANTE, JOSE ABARRO, JOSEFINO ABARRO,
REYES, IGNACIO DE VERA, SOLOMON B. REYES, JOSE M. ABAN, EMIGDIO N.
CELSO S. ABELANIO, HERMINIO ABELLA, MIGUEL ABESTANO, RODRIGO G.
ABARQUEZ, ANTONIO ACUPAN, ROMEO ACUPAN, BENJAMIN ALEJANDRE,
ABUBO, JOSE B. ABUSTAN, DANTE ACERES, REYNALDO S. ACOJIDO, LEOWILIN
WILFREDO D. ALIGADO, MARTIN AMISTAD, JR., ROLANDO B. AMUL, AMORSOLO
ACTA, EUGENIO C. ACUEZA, EDUARDO ACUPAN, REYNALDO ACUPAN, SOLANO
ANADING, ANTONIO T. ANGLO, VICENTE ARLITA, HERBERT AYO, SILVERIO
ACUPAN, MANUEL P. ADANA, FLORENTINO R. AGNE, QUITERIO R. AGUDO,
BALATAZO, ALFREDO BALOBO, FALCONERO BANAAG, RAMON BARBOSA, FELIX
MANUEL P. AGUINALDO, DANTE AGUIRRE, HERMINIO AGUIRRE, GONZALO
BARCENA, FERNANDO BAS, MARIO BATACLAN, ROBERTO S. BATICA, ENRICO
ALBERTO, JR., CONRADO ALCANTARA, LAMBERTO Q. ALCANTARA, MARIANITO
BELEN, ARISTEO BICOL, LARRY C. BICOL, PETRONILLO BISCOCHO, FELIX M.
J. ALCANTARA, BENCIO ALDOVER, EULALIO V. ALEJANDRO, BENJAMIN
BOBIER, DIONISIO BOBONGO, BAYANI S. BRACAMANTE, PABLITO BUSTILLO,
ALEJANDRO, EDUARDO L. ALEJANDRO, MAXIMINO ALEJANDRO, ALBERTO
GUILLERMO CABEZAS, BIENVENIDO CADALIN, RODOLFO CAGATAN, AMANTE
ALMENAR, ARNALDO ALONZO, AMADO ALORIA, CAMILO ALVAREZ, MANUEL C.
CAILAO, IRENEO CANDOR, JOSE CASTILLO, MANUEL CASTILLO, REMAR
ALVAREZ, BENJAMIN R. AMBROCIO, CARLOS AMORES, BERNARD P. ANCHETA,
CASTROJERES, REYNALDO CAYAS, ROMEO CECILIO, TEODULO CREUS, BAYANI
TIMOTEO O. ANCHETA, JEOFREY ANI, ELINO P. ANTILLON, ARMANDRO B.
DAYRIT, RICARDO DAYRIT, ERNESTO T. DELA CRUZ, FRANCISCO DE GUZMAN,
ANTIPONO, LARRY T. ANTONIO, ANTONIO APILADO, ARTURO P. APILADO,
ONOFRE DE RAMA, IGNACIO DE VERA, MODESTO DIZON, REYNALDO DIZON,
FRANCISCO APOLINARIO, BARTOLOME M. AQUINO, ISIDRO AQUINO, PASTOR
ANTONIO S. DOMINGUEZ, GILBERT EBRADA, RICARDO EBRADA, ANTONIO
AQUINO, ROSENDO M. AQUINO, ROBERTO ARANGORIN, BENJAMIN O. ARATEA,
EJERCITO, JR., EDUARTE ERIDAO, ELADIO ESCOTOTO, JOHN ESGUERRA,
30
ARTURO V. ARAULLO, PRUDENCIO ARAULLO, ALEXANDER ARCAIRA, FRANCISCO NICASIO DANTINGUINOO, JOSE DATOON, EDUARDO DAVID, ENRICO T. DAVID,
ARCIAGA, JOSE AREVALO, JUANTO AREVALO, RAMON AREVALO, RODOLFO FAVIO DAVID, VICTORIANO S. DAVID, EDGARDO N. DAYACAP, JOSELITO T.
AREVALO, EULALIO ARGUELLES, WILFREDO P. ARICA, JOSE M. ADESILLO, DELOSO, CELERINO DE GUZMAN, ROMULO DE GUZMAN, LIBERATO DE GUZMAN,
ANTONIO ASUNCION, ARTEMIO M. ASUNCION, EDGARDO ASUNCION, REXY M. JOSE DE LEON, JOSELITO L. DE LUMBAN, NAPOLEON S. DE LUNA, RICARDO DE
ASUNCION, VICENTE AURELIO, ANGEL AUSTRIA, RICARDO P. AVERILLA, JR., RAMA, GENEROSO DEL ROSARIO, ALBERTO DELA CRUZ, JOSE DELA CRUZ,
VIRGILIO AVILA, BARTOLOME AXALAN, ALFREDO BABILONIA, FELIMON BACAL, LEONARDO DELOS REYES, ERNESTO F. DIATA, EDUARDO A. DIAZ, FELIX DIAZ,
JOSE L. BACANI, ROMULO R. BALBIERAN, VICENTE BALBIERAN, RODOLFO MELCHOR DIAZ, NICANOR S. DIAZ, GERARDO C. DIGA, CLEMENTE DIMATULAC,
BALITBIT, TEODORO Y. BALOBO, DANILO O. BARBA, BERNARDO BARRO, JUAN A. ROLANDO DIONISIO, PHILIPP G. DISMAYA, BENJAMIN DOCTOLERO, ALBERTO
BASILAN, CEFERINO BATITIS, VIVENCIO C. BAUAN, GAUDENCIO S. BAUTISTA, STO. DOMINGO, BENJAMIN E. DOZA, BENJAMIN DUPA, DANILO C. DURAN,
LEONARDO BAUTISTA, JOSE D. BAUTISTA, ROSTICO BAUTISTA, RUPERTO B. GREGORIO D. DURAN, RENATO A. EDUARTE, GODOFREDO E. EISMA, ARDON B.
BAUTISTA, TEODORO S. BAUTISTA, VIRGILIO BAUTISTA, JESUS R. BAYA, ELLO, UBED B. ELLO, JOSEFINO ENANO, REYNALDO ENCARNACION, EDGARDO
WINIEFREDO BAYACAL, WINIEFREDO BEBIT, BEN G. BELIR, ERIC B. BELTRAN, ENGUANCIO, ELIAS EQUIPANO, FELIZARDO ESCARMOSA, MIGUEL ESCARMOSA,
EMELIANO BENALES, JR., RAUL BENITEZ, PERFECTO BENSAN, IRENEO BERGONIO, ARMANDO ESCOBAR, ROMEO T. ESCUYOS, ANGELITO ESPIRITU, EDUARDO S.
ISABELO BERMUDEZ, ROLANDO I. BERMUDEZ, DANILO BERON, BENJAMIN ESPIRITU, REYNALDO ESPIRITU, ROLANDO ESPIRITU, JULIAN ESPREGANTE, IGMIDIO
BERSAMIN, ANGELITO BICOL, ANSELMO BICOL, CELESTINO BICOL, JR., ESTANISLAO, ERNESTO M. ESTEBAN, MELANIO R. ESTRO, ERNESTO M. ESTEVA,
FRANCISCO BICOL, ROGELIO BICOL, ROMULO L. BICOL, ROGELIO BILLIONES, CONRADO ESTUAR, CLYDE ESTUYE, ELISEO FAJARDO, PORFIRIO FALQUEZA,
TEOFILO N. BITO, FERNANDO BLANCO, AUGUSTO BONDOC, DOMINGO WILFREDO P. FAUSTINO, EMILIO E. FERNANDEZ, ARTEMIO FERRER, MISAEL M.
BONDOC, PEPE S. BOOC, JAMES R. BORJA, WILFREDO BRACEROS, ANGELES C. FIGURACION, ARMANDO F. FLORES, BENJAMIN FLORES, EDGARDO C. FLORES,
BRECINO, EURECLYDON G. BRIONES, AMADO BRUGE, PABLITO BUDILLO, BUENAVENTURA FRANCISCO, MANUEL S. FRANCISCO, ROLANDO FRANCISCO,
ARCHIMEDES BUENAVENTURA, BASILIO BUENAVENTURA, GUILLERMO VALERIANO FRANCISCO, RODOLFO GABAWAN, ESMERALDO GAHUTAN, CESAR
BUENCONSEJO, ALEXANDER BUSTAMANTE, VIRGILIO BUTIONG, JR., HONESTO P. C. GALANG, SANTIAGO N. GALOSO, GABRIEL GAMBOA, BERNARDO
CABALLA, DELFIN CABALLERO, BENEDICTO CABANIGAN, MOISES CABATAY, GANDAMON, JUAN GANZON, ANDRES GARCIA, JR., ARMANDO M. GARCIA,
HERMANELI CABRERA, PEDRO CAGATAN, JOVEN C. CAGAYAT, ROGELIO L. EUGENIO GARCIA, MARCELO L. GARCIA, PATRICIO L. GARCIA, JR., PONCIANO
CALAGOS, REYNALDO V. CALDEJON, OSCAR C. CALDERON, NESTOR D. G. GARCIA, PONCIANO G. GARCIA, JR., RAFAEL P. GARCIA, ROBERTO S.
CALLEJA, RENATO R. CALMA, NELSON T. CAMACHO, SANTOS T. CAMACHO, GARCIA, OSIAS G. GAROFIL, RAYMUNDO C. GARON, ROLANDO G. GATELA,
ROBERTO CAMANA, FLORANTE C. CAMANAG EDGARDO M. CANDA, SEVERINO AVELINO GAYETA, RAYMUNDO GERON, PLACIDO GONZALES, RUPERTO H.
CANTOS, EPIFANIO A. CAPONPON, ELIAS D. CARILLO, JR., ARMANDO GONZALES, ROGELIO D. GUANIO, MARTIN V. GUERRERO, JR., ALEXIS GUNO,
CARREON, MENANDRO M. CASTAÑEDA, BENIGNO A. CASTILLO, CORNELIO L. RICARDO L. GUNO, FRANCISCO GUPIT, DENNIS J. GUTIERREZ, IGNACIO B.
CASTILLO, JOSEPH B. CASTILLO, ANSELMO CASTILLO, JOAQUIN CASTILLO, GUTIERREZ, ANGELITO DE GUZMAN, JR., CESAR H. HABANA, RAUL G.
PABLO L. CASTILLO, ROMEO P. CASTILLO, SESINANDO CATIBOG, DANILO HERNANDEZ, REYNALDO HERNANDEZ, JOVENIANO D. HILADO, JUSTO HILAPO,
CASTRO, PRUDENCIO A. CASTRO, RAMO CASTRO, JR., ROMEO A. DE CASTRO, ROSTITO HINAHON, FELICISIMO HINGADA, EDUARDO HIPOLITO, RAUL L.
JAIME B. CATLI, DURANA D. CEFERINO, RODOLFO B. CELIS, HERMINIGILDO IGNACIO, MANUEL L. ILAGAN, RENATO L. ILAGAN, CONRADO A. INSIONG,
CEREZO, VICTORIANO CELESTINO, BENJAMIN CHAN, ANTONIO C. CHUA, GRACIANO G. ISLA, ARNEL L. JACOB, OSCAR J. JAPITENGA, CIRILO HICBAN,
VIVENCIO B. CIABAL, RODRIGO CLARETE, AUGUSTO COLOMA, TURIANO MAXIMIANO HONRADES, GENEROSO IGNACIO, FELIPE ILAGAN, EXPEDITO N.
CONCEPCION, TERESITO CONSTANTINO, ARMANDO CORALES, RENATO C. JACOB, MARIO JASMIN, BIENVENIDO JAVIER, ROMEO M. JAVIER, PRIMO DE
CORCUERA, APOLINAR CORONADO, ABELARDO CORONEL, FELIX CORONEL, JESUS, REYNALDO DE JESUS, CARLOS A. JIMENEZ, DANILO E. JIMENEZ, PEDRO C.
JR., LEONARDO CORPUZ, JESUS M. CORRALES, CESAR CORTEMPRATO, JOAQUIN, FELIPE W. JOCSON, FELINO M. JOCSON, PEDRO N. JOCSON,
FRANCISCO O. CORVERA, FRANCISCO COSTALES, SR., CELEDONIO CREDITO, VALENTINO S. JOCSON, PEDRO B. JOLOYA, ESTEBAN P. JOSE, JR., RAUL JOSE,
ALBERTO A. CREUS, ANACLETO V. CRUZ, DOMINGO DELA CRUZ, AMELIANO RICARDO SAN JOSE, GERTRUDO KABIGTING, EDUARDO S. KOLIMLIM, SR., LAURO
DELA CRUZ, JR., PANCHITO CRUZ, REYNALDO B. DELA CRUZ, ROBERTO P. CRUZ, J. LABAY, EMMANUEL C. LABELLA, EDGARDO B. LACERONA, JOSE B. LACSON,
TEODORO S. CRUZ, ZOSIMO DELA CRUZ, DIONISIO A. CUARESMA, FELIMON MARIO J. LADINES, RUFINO LAGAC, RODRIGO LAGANAPAN, EFREN M.
CUIZON, FERMIN DAGONDON, RICHARD DAGUINSIN, CRISANTO A. DATAY, LAMADRID, GUADENCIO LATANAN, VIRGILIO LATAYAN, EMILIANO LATOJA,

31
WENCESLAO LAUREL, ALFREDO LAXAMANA, DANIEL R. LAZARO, ANTONIO C. PAGSANJAN, NUMERIANO PAGSISIHAN, RICARDO T. PAGUIO, EMILIO
LEANO, ARTURO S. LEGASPI, BENITO DE LEMOS, JR., PEDRO G. DE LEON, PAKINGAN, LEANDRO PALABRICA, QUINCIANO PALO, JOSE PAMATIAN,
MANOLITO C. LILOC, GERARDO LIMUACO, ERNESTO S. LISING, RENATO LISING, GONZALO PAN, PORFIRIO PAN, BIENVENIDO PANGAN, ERNESTO PANGAN,
WILFREDO S. LISING, CRISPULO LONTOC, PEDRO M. LOPERA, ROGELIO LOPERA, FRANCISCO V. PASIA, EDILBERTO PASIMIO, JR., JOSE V. PASION, ANGELITO M.
CARLITO M. LOPEZ, CLODY LOPEZ, GARLITO LOPEZ, GEORGE F. LOPEZ, VIRGILIO PENA, DIONISIO PENDRAS, HERMINIO PERALTA, REYNALDO M. PERALTA,
M. LOPEZ, BERNARDITO G. LOREJA, DOMINGO B. LORICO, DOMINGO LOYOLA, ANTONIO PEREZ, ANTOLIANO E. PEREZ, JUAN PEREZ, LEON PEREZ, ROMEO E.
DANTE LUAGE, ANTONIO M. LUALHATI, EMMANUEL LUALHATI, JR., LEONIDEZ C. PEREZ, ROMULO PEREZ, WILLIAM PEREZ, FERNANDO G. PERINO, FLORENTINO DEL
LUALHATI, SEBASTIAN LUALHATI, FRANCISCO LUBAT, ARMANDO LUCERO, PILAR, DELMAR F. PINEDA, SALVADOR PINEDA, ELIZALDE PINPIN, WILFREDO
JOSELITO L. DE LUMBAN, THOMAS VICENTE O. LUNA, NOLI MACALADLAD, PINPIN, ARTURO POBLETE, DOMINADOR R. PRIELA, BUENAVENTURA PRUDENTE,
ALFREDO MACALINO, RICARDO MACALINO, ARTURO V. MACARAIG, ERNESTO CARMELITO PRUDENTE, DANTE PUEYO, REYNALDO Q. PUEYO, RODOLFO O.
V. MACARAIG, RODOLFO V. MACARAIG, BENJAMIN MACATANGAY, PULIDO, ALEJANDRO PUNIO, FEDERICO QUIMAN, ALFREDO L. QUINTO, ROMEO
HERMOGENES MACATANGAY, RODEL MACATANGAY, ROMULO MACATANGAY, QUINTOS, EDUARDO W. RACABO, RICARDO C. DE RAMA, RICARDO L. DE RAMA,
OSIAS Q. MADLANGBAYAN, NICOLAS P. MADRID, EDELBERTO G. MAGAT, EFREN ROLANDO DE RAMA, FERNANDO A. RAMIREZ, LITO S. RAMIREZ, RICARDO G.
C. MAGBANUA, BENJAMIN MAGBUHAT, ALFREDO C. MAGCALENG, ANTONIO RAMIREZ, RODOLFO V. RAMIREZ, ALBERTO RAMOS, ANSELMO C. RAMOS, TOBIAS
MAGNAYE, ALFONSO MAGPANTAY, RICARDO C. MAGPANTAY, SIMEON M. RAMOS, WILLARFREDO RAYMUNDO, REYNALDO RAQUEDAN, MANUEL F.
MAGPANTAY, ARMANDO M. MAGSINO, MACARIO S. MAGSINO, ANTONIO RAVELAS, WILFREDO D. RAYMUNDO, ERNESTO E. RECOLASO, ALBERTO REDAZA,
MAGTIBAY, VICTOR V. MAGTIBAY, GERONIMO MAHILUM, MANUEL MALONZO, ARTHUR REJUSO, TORIBIO M. RELLAMA, JAIME RELLOSA, EUGENIO A.
RICARDO MAMADIS, RODOLFO MANA, BERNARDO A. MANALILI, MANUEL REMOQUILLO, GERARDO RENTOZA, REDENTOR C. REY, ALFREDO S. REYES,
MANALILI, ANGELO MANALO, AGUILES L. MANALO, LEOPOLDO MANGAHAS, AMABLE S. REYES, BENEDICTO R. REYES, GREGORIO B. REYES, JOSE A. REYES,
BAYANI MANIGBAS, ROLANDO C. MANIMTIM, DANIEL MANONSON, ERNESTO F. JOSE C. REYES, ROMULO M. REYES, SERGIO REYES, ERNESTO F. RICO, FERNANDO
MANUEL, EDUARDO MANZANO, RICARDO N. MAPA, RAMON MAPILE, ROBERTO M. RICO, EMMANUEL RIETA, RICARDO RIETA, LEO B. ROBLES, RUBEN ROBLES,
C. MARANA, NEMESIO MARASIGAN, WENCESLAO MARASIGAN, LEONARDO RODOLFO ROBLEZA, RODRIGO ROBLEZA, EDUARDO ROCABO, ANTONIO R.
MARCELO, HENRY F. MARIANO, JOEL MARIDABLE, SANTOS E. MARINO, RODRIGUEZ, BERNARDO RODRIGUEZ, ELIGIO RODRIGUEZ, ALMONTE ROMEO,
NARCISO A. MARQUEZ, RICARDO MARTINEZ, DIEGO MASICAMPO, AURELIO ELIAS RONQUILLO, ELISE RONQUILLO, LUIS VAL B. RONQUILLO, REYNOSO P.
MATABERDE, RENATO MATILLA, VICTORIANO MATILLA, VIRGILIO MEDEL, LOLITO RONQUILLO, RODOLFO RONQUILLO, ANGEL ROSALES, RAMON ROSALES,
M. MELECIO, BENIGNO MELENDEZ, RENER J. MEMIJE, REYNALDO F. MEMIJE, ALBERTO DEL ROSARIO, GENEROSO DEL ROSARIO, TEODORICO DEL ROSARIO,
RODEL MEMIJE, AVELINO MENDOZA, JR., CLARO MENDOZA, TIMOTEO VIRGILIO L. ROSARIO, CARLITO SALVADOR, JOSE SAMPARADA, ERNESTO SAN
MENDOZA, GREGORIO MERCADO, ERNANI DELA MERCED, RICARDO MERCENA, PEDRO, ADRIANO V. SANCHA, GERONIMO M. SANCHA, ARTEMIO B. SANCHEZ,
NEMESIO METRELLO, RODEL MEMIJE, GASPAR MINIMO, BENJAMIN MIRANDA, NICASIO SANCHEZ, APOLONIO P. SANTIAGO, JOSELITO S. SANTIAGO, SERGIO
FELIXBERTO D. MISA, CLAUDIO A. MODESTO, JR., OSCAR MONDEDO, SANTIAGO, EDILBERTO C. SANTOS, EFREN S. SANTOS, RENATO D. SANTOS,
GENEROSO MONTON, RENATO MORADA, RICARDO MORADA, RODOLFO MIGUEL SAPUYOT, ALEX S. SERQUINA, DOMINADOR P. SERRA, ROMEO SIDRO,
MORADA, ROLANDO M. MORALES, FEDERICO M. MORENO, VICTORINO A. AMADO M. SILANG, FAUSTINO D. SILANG, RODOLFO B. DE SILOS, ANICETO G.
MORTEL, JR., ESPIRITU A. MUNOZ, IGNACIO MUNOZ, ILDEFONSO MUNOZ, SILVA, EDGARDO M. SILVA, ROLANDO C. SILVERTO, ARTHUR B. SIMBAHON,
ROGELIO MUNOZ, ERNESTO NAPALAN, MARCELO A. NARCIZO, REYNALDO DOMINGO SOLANO, JOSELITO C. SOLANTE, CARLITO SOLIS, CONRADO SOLIS,
NATALIA, FERNANDO C. NAVARETTE, PACIFICO D. NAVARRO, FLORANTE III, EDGARDO SOLIS, ERNESTO SOLIS, ISAGANI M. SOLIS, EDUARDO L. SOTTO,
NAZARENO, RIZAL B. NAZARIO, JOSUE NEGRITE, ALFREDO NEPUMUCENO, ERNESTO G. STA. MARIA, VICENTE G. STELLA, FELIMON SUPANG, PETER
HERBERT G. NG, FLORENCIO NICOLAS, ERNESTO C. NINON, AVELINO NUQUI, TANGUINOO, MAXIMINO TALIBSAO, FELICISMO P. TALUSIK, FERMIN TARUC, JR.,
NEMESIO D. OBA, DANILO OCAMPO, EDGARDO OCAMPO, RODRIGO E. LEVY S. TEMPLO, RODOLFO S. TIAMSON, LEONILO TIPOSO, ARNEL TOLENTINO,
OCAMPO, ANTONIO B. OCCIANO, REYNALDO P. OCSON, BENJAMIN ODESA, MARIO M. TOLENTINO, FELIPE TORRALBA, JOVITO V. TORRES, LEONARDO DE
ANGEL OLASO, FRANCISCO OLIGARIO, ZOSIMO OLIMBO, BENJAMIN V. TORRES, GAVINO U. TUAZON, AUGUSTO B. TUNGUIA, FRANCISCO UMALI,
ORALLO, ROMEO S. ORIGINES, DANILO R. ORTANEZ, WILFREDO OSIAS, VIRGILIO SIMPLICIO UNIDA, WILFREDO V. UNTALAN, ANTONIO VALDERAMA, RAMON
PA-A, DAVID PAALAN, JESUS N. PACHECO, ALFONSO L. PADILLA, DANILO VALDERAMA, NILO VALENCIANO, EDGARDO C. VASQUEZ, ELPIDIO VELASQUEZ,

32
NESTOR DE VERA, WILFREDO D. VERA, BIENVENIDO VERGARA, ALFREDO (1) to reverse the Resolution dated September 2, 1991 of
VERGARA, RAMON R. VERZOSA, FELICITO P. VICMUNDO, ALFREDO NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L-85-10-799
VICTORIANO, TEOFILO P. VIDALLO, SABINO N. VIERNEZ, JESUS J. VILLA, JOVEN and
VILLABLANCO, EDGARDO G. VILLAFLORES, CEFERINO VILLAGERA, ALEX L-86-05-460 insofar as it: (i) applied the three-year prescriptive
VILLAHERMOZA, DANILO A. VILLANUEVA, ELITO VILLANUEVA, LEONARDO M. period under the Labor Code of the Philippines instead of the
VILLANUEVA, MANUEL R. VILLANUEVA, NEPTHALI VILLAR, JOSE V. VILLAREAL, ten-year prescriptive period under the Civil Code of the
FELICISIMO VILLARINO, RAFAEL VILLAROMAN, CARLOS VILLENA, FERDINAND Philippines; and (ii) denied the
VIVO, ROBERTO YABUT, VICENTE YNGENTE, AND ORO C. ZUNIGA, respondents. "three-hour daily average" formula in the computation of
petitioners' overtime pay; and
Gerardo A. Del Mundo and Associates for petitioners.
(2) to reverse the Resolution dated March 24, 1992 of NLRC,
Romulo, Mabanta, Sayoc, Buenaventura, De los Angeles Law Offices for denying the motion for reconsideration of its Resolution dated
BRII/AIBC. September 2, 1991 (Rollo, pp. 8-25; 26-220).

Florante M. De Castro for private respondents in 105029-32. The petition in G.R. Nos. 105029-32, entitled "Asia International Builders
Corporation, et. al., v. National Labor Relations Commission, et. al." was filed
QUIASON, J.: under Rule 65 of the Revised Rules of Court:

The petition in G.R. No. 104776, entitled "Bienvenido M. Cadalin, et. al. v. (1) to reverse the Resolution dated September 2, 1991 of
Philippine Overseas Employment Administration's Administrator, et. al.," was NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L-85-10-779
filed under Rule 65 of the Revised Rules of Court: and
L-86-05-460, insofar as it granted the claims of 149 claimants;
(1) to modify the Resolution dated September 2, 1991 of the and
National Labor Relations Commission (NLRC) in POEA Cases
Nos. (2) to reverse the Resolution dated March 21, 1992 of NLRC
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-460; (2) to insofar as it denied the motions for reconsideration of AIBC
render a new decision: (i) declaring private respondents as in and BRII (Rollo, pp. 2-59; 61-230).
default; (ii) declaring the said labor cases as a class suit; (iii)
ordering Asia International Builders Corporation (AIBC) and The Resolution dated September 2, 1991 of NLRC, which modified the decision
Brown and Root International Inc. (BRII) to pay the claims of of POEA in four labor cases: (1) awarded monetary benefits only to 149
the 1,767 claimants in said labor cases; (iv) declaring Atty. claimants and (2) directed Labor Arbiter Fatima J. Franco to conduct hearings
Florante M. de Castro guilty of forum-shopping; and (v) and to receive evidence on the claims dismissed by the POEA for lack of
dismissing POEA Case No. L-86-05-460; and substantial evidence or proof of employment.

(3) to reverse the Resolution dated March 24, 1992 of NLRC, Consolidation of Cases
denying the motion for reconsideration of its Resolution dated
September 2, 1991 (Rollo, pp. 8-288). 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
The petition in G.R. Nos. 104911-14, entitled "Bienvenido M. Cadalin, et. al., v. dated July 26, 1993, the Second Division referred G.R. Nos. 104911-14 to the
Hon. National Labor Relations Commission, et. al.," was filed under Rule 65 of Third Division (G.R. Nos. 104911-14, Rollo, p. 895).
the Revised Rules of Court:

33
In the Resolution dated September 29, 1993, the Third Division granted the On July 13, 1984, the claimants submitted their "Compliance and
motion filed in G.R. Nos. 104911-14 for the consolidation of said cases with G.R. Manifestation." On July 23, 1984, AIBC filed a "Motion to Strike Out of the
Nos. 104776 and 105029-32, which were assigned to the First Division (G.R. Nos. Records", the "Complaint" and the "Compliance and Manifestation." On July
104911-14, Rollo, pp. 986-1,107; G.R. Nos. 105029-30, Rollo, pp. 369-377, 426- 25, 1984, the claimants filed their "Rejoinder and Comments," averring, among
432). In the Resolution dated October 27, 1993, the First Division granted the other matters, the failure of AIBC and BRII to file their answers and to attend
motion to consolidate G.R. Nos. 104911-14 with G.R. No. 104776 (G.R. Nos. the pre-trial conference on July 25, 1984. The claimants alleged that AIBC and
104911-14, Rollo, p. 1109; G.R. Nos. 105029-32, Rollo, p. 1562). BRII had waived their right to present evidence and had defaulted by failing
to file their answers and to attend the pre-trial conference.
I
On October 2, 1984, the POEA Administrator denied the "Motion to Strike Out
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. of the Records" filed by AIBC but required the claimants to correct the
Evangelista, in their own behalf and on behalf of 728 other overseas contract deficiencies in the complaint pointed out in the order.
workers (OCWs) instituted a class suit by filing an "Amended Complaint" with
the Philippine Overseas Employment Administration (POEA) for money claims On October 10, 1984, claimants asked for time within which to comply with
arising from their recruitment by AIBC and employment by BRII (POEA Case the Order of October 2, 1984 and filed an "Urgent Manifestation," praying that
No. L-84-06-555). The claimants were represented by Atty. Gerardo del the POEA Administrator direct the parties to submit simultaneously their
Mundo. position papers, after which the case should be deemed submitted for
decision. On the same day, Atty. Florante de Castro filed another complaint
BRII is a foreign corporation with headquarters in Houston, Texas, and is for the same money claims and benefits in behalf of several claimants, some
engaged in construction; while AIBC is a domestic corporation licensed as a of whom were also claimants in POEA Case No. L-84-06-555 (POEA Case No.
service contractor to recruit, mobilize and deploy Filipino workers for overseas 85-10-779).
employment on behalf of its foreign principals.
On October 19, 1984, claimants filed their "Compliance" with the Order dated
The amended complaint principally sought the payment of the unexpired October 2, 1984 and an "Urgent Manifestation," praying that the POEA direct
portion of the employment contracts, which was terminated prematurely, and the parties to submit simultaneously their position papers after which the case
secondarily, the payment of the interest of the earnings of the Travel and would be deemed submitted for decision. On the same day, AIBC asked for
Reserved Fund, interest on all the unpaid benefits; area wage and salary time to file its comment on the "Compliance" and "Urgent Manifestation" of
differential pay; fringe benefits; refund of SSS and premium not remitted to the claimants. On November 6, 1984, it filed a second motion for extension of time
SSS; refund of withholding tax not remitted to the BIR; penalties for committing to file the comment.
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). On November 8, 1984, the POEA Administrator informed AIBC that its motion
for extension of time was granted.
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 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
On July 3, 1984, POEA Administrator, upon motion of AIBC and BRII, ordered failure to file their answers.
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 On November 20, 1984, AIBC and BRII filed a "Comment" praying, among
bill of particulars. The POEA Administrator also scheduled a pre-trial other reliefs, that claimants should be ordered to amend their complaint.
conference on July 25, 1984.

34
On December 27, 1984, the POEA Administrator issued an order directing AIBC same month, Solomon Reyes also filed his own complaint (POEA Case No. L-
and BRII to file their answers within ten days from receipt of the order. 85-10-779) against AIBC and BRII.

On February 27, 1985, AIBC and BRII appealed to NLRC seeking the reversal of On October 17, 1985, the law firm of Florante M. de Castro & Associates asked
the said order of the POEA Administrator. Claimants opposed the appeal, for the substitution of the original counsel of record and the cancellation of
claiming that it was dilatory and praying that AIBC and BRII be declared in the special powers of attorney given the original counsel.
default.
On December 12, 1985, Atty. Del Mundo filed in NLRC a notice of the claim to
On April 2, 1985, the original claimants filed an "Amended Complaint and/or enforce attorney's lien.
Position Paper" dated March 24, 1985, adding new demands: namely, the
payment of overtime pay, extra night work pay, annual leave differential pay, On May 29, 1986, Atty. De Castro filed a complaint for money claims (POEA
leave indemnity pay, retirement and savings benefits and their share of Case No. 86-05-460) in behalf of 11 claimants including Bienvenido Cadalin, a
forfeitures (G.R. No. 104776, Rollo, pp. 14-16). On April 15, 1985, the POEA claimant in POEA Case No. 84-06-555.
Administrator directed AIBC to file its answer to the amended complaint (G.R.
No. 104776, Rollo, p. 20). On December 12, 1986, the NLRC dismissed the two appeals filed on February
27, 1985 and September 18, 1985 by AIBC and BRII.
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 In narrating the proceedings of the labor cases before the POEA
answers to the "Amended Complaint," otherwise, they would be deemed to Administrator, it is not amiss to mention that two cases were filed in the
have waived their right to present evidence and the case would be resolved Supreme Court by the claimants, namely — G.R. No. 72132 on September 26,
on the basis of complainant's evidence. 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
On June 5, 1985, AIBC countered with a "Motion to Dismiss as Improper Class directing the POEA Administrator to resolve the issues raised in the motions
Suit and Motion for Bill of Particulars Re: Amended Complaint dated March 24, and oppositions filed in POEA Cases Nos. L-84-06-555 and L-86-05-460 and to
1985." Claimants opposed the motions. decide the labor cases with deliberate dispatch.

On September 4, 1985, the POEA Administrator reiterated his directive to AIBC AIBC also filed a petition in the Supreme Court (G.R. No. 78489), questioning
and BRII to file their answers in POEA Case No. L-84-06-555. 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.
On September 18, 1985, AIBC filed its second appeal to the NLRC, together L-84-06-555. In a resolution dated November 9, 1987, we dismissed the petition
with a petition for the issuance of a writ of injunction. On September 19, 1985, by informing AIBC that all its technical objections may properly be resolved in
NLRC enjoined the POEA Administrator from hearing the labor cases and the hearings before the POEA.
suspended the period for the filing of the answers of AIBC and BRII.
Complaints were also filed before the Ombudsman. The first was filed on
On September 19, 1985, claimants asked the POEA Administrator to include September 22, 1988 by claimant Hermie Arguelles and 18 co-claimants
additional claimants in the case and to investigate alleged wrongdoings of against the POEA Administrator and several NLRC Commissioners. The
BRII, AIBC and their respective lawyers. 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-
On October 10, 1985, Romeo Patag and two co-claimants filed a complaint 555. The second was filed on April 28, 1989 by claimants Emigdio P. Bautista
(POEA Case No. L-85-10-777) against AIBC and BRII with the POEA, demanding and Rolando R. Lobeta charging AIBC and BRII for violation of labor and social
monetary claims similar to those subject of POEA Case No. L-84-06-555. In the

35
legislations. The third was filed by Jose R. Santos, Maximino N. Talibsao and On February 17, 1989, claimants filed their "Answer to Appeal," praying for the
Amado B. Bruce denouncing AIBC and BRII of violations of labor laws. dismissal of the appeal of AIBC and BRII.

On January 13, 1987, AIBC filed a motion for reconsideration of the NLRC On March 15, 1989, claimants filed their "Supplement to Complainants' Appeal
Resolution dated December 12, 1986. Memorandum," together with their "newly discovered evidence" consisting of
payroll records.
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 On April 5, 1989, AIBC and BRII submitted to NLRC their "Manifestation," stating
to file the same until the resolution of its motion for reconsideration of the order among other matters that there were only 728 named claimants. On April 20,
of the NLRC dismissing the two appeals. On April 28, 1987, NLRC en banc 1989, the claimants filed their "Counter-Manifestation," alleging that there
denied the motion for reconsideration. were 1,767 of them.

At the hearing on June 19, 1987, AIBC submitted its answer to the complaint. On July 27, 1989, claimants filed their "Urgent Motion for Execution" of the
At the same hearing, the parties were given a period of 15 days from said Decision dated January 30, 1989 on the grounds that BRII had failed to appeal
date within which to submit their respective position papers. On June 24, 1987 on time and AIBC had not posted the supersedeas bond in the amount of
claimants filed their "Urgent Motion to Strike Out Answer," alleging that the $824,652.44.
answer was filed out of time. On June 29, 1987, claimants filed their
"Supplement to Urgent Manifestational Motion" to comply with the POEA On December 23, 1989, claimants filed another motion to resolve the labor
Order of June 19, 1987. On February 24, 1988, AIBC and BRII submitted their cases.
position paper. On March 4, 1988, claimants filed their "Ex-Parte Motion to
Expunge from the Records" the position paper of AIBC and BRII, claiming that On August 21, 1990, claimants filed their "Manifestational Motion," praying that
it was filed out of time. 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
On September 1, 1988, the claimants represented by Atty. De Castro filed their law.
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 On September 2, 1991, NLRC promulgated its Resolution, disposing as follows:
filed its "Reply to Complainant's Memorandum." On October 26, 1988,
claimants submitted their "Ex-Parte Manifestational Motion and Counter- WHEREFORE, premises considered, the Decision of the POEA
Supplemental Motion," together with 446 individual contracts of employments in these consolidated cases is modified to the extent and in
and service records. On October 27, 1988, AIBC and BRII filed a "Consolidated accordance with the following dispositions:
Reply."

1. The claims of the 94 complainants

On January 30, 1989, the POEA Administrator rendered his decision in POEA identified and listed in Annex "A" hereof are
Case No. L-84-06-555 and the other consolidated cases, which awarded the dismissed for having prescribed;
amount of $824,652.44 in favor of only 324 complainants.
2. Respondents AIBC and Brown & Root are
On February 10, 1989, claimants submitted their "Appeal Memorandum For hereby ordered, jointly and severally, to pay
Partial Appeal" from the decision of the POEA. On the same day, AIBC also the 149 complainants, identified and listed in
filed its motion for reconsideration and/or appeal in addition to the "Notice of Annex "B" hereof, the peso equivalent, at the
Appeal" filed earlier on February 6, 1989 by another counsel for AIBC. time of payment, of the total amount in US

36
 dollars indicated opposite their respective 14, pp. 85-87; G.R. Nos. 105029-31, pp. 120-
names; 122).

3. The awards given by the POEA to the 19 On November 27, 1991, claimant Amado S. Tolentino and 12
complainants classified and listed in Annex co-claimants, who were former clients of Atty. Del Mundo, filed a petition for
"C" hereof, who appear to have worked certiorari with the Supreme Court (G.R. Nos. 120741-44). The petition was
elsewhere than in Bahrain are hereby set dismissed in a resolution dated January 27, 1992.
aside.
Three motions for reconsideration of the September 2, 1991 Resolution of the
4. All claims other than those indicated in NLRC were filed. The first, by the claimants represented by Atty. Del Mundo;
Annex "B", including those for overtime work the second, by the claimants represented by Atty. De Castro; and the third,
and favorably granted by the POEA, are by AIBC and BRII.
hereby dismissed for lack of substantial
evidence in support thereof or are beyond In its Resolution dated March 24, 1992, NLRC denied all the motions for
the competence of this Commission to pass reconsideration.
upon.
Hence, these petitions filed by the claimants represented by Atty. Del Mundo
In addition, this Commission, in the exercise of its powers and (G.R. No. 104776), the claimants represented by Atty. De Castro (G.R. Nos.
authority under Article 218(c) of the Labor Code, as 104911-14) and by AIBC and BRII (G.R. Nos. 105029-32).
amended by R.A. 6715, hereby directs Labor Arbiter Fatima J.
Franco of this Commission to summon parties, conduct II
hearings and receive evidence, as expeditiously as possible,
and thereafter submit a written report to this Commission (First Compromise Agreements
Division) of the proceedings taken, regarding the claims of
the following:
Before this Court, the claimants represented by Atty. De Castro and AIBC and
BRII have submitted, from time to time, compromise agreements for our
(a) complainants identified and listed in approval and jointly moved for the dismissal of their respective petitions insofar
Annex "D" attached and made an integral as the claimants-parties to the compromise agreements were concerned
part of this Resolution, whose claims were (See Annex A for list of claimants who signed quitclaims).
dismissed by the POEA for lack of proof of
employment in Bahrain (these complainants
Thus the following manifestations that the parties had arrived at a compromise
numbering 683, are listed in pages 13 to 23 of
agreement and the corresponding motions for the approval of the
the decision of POEA, subject of the appeals)
agreements were filed by the parties and approved by the Court:
and,

1) Joint Manifestation and Motion involving claimant Emigdio

(b) complainants identified and listed in
Abarquez and 47 co-claimants dated September 2, 1992
Annex "E" attached and made an integral
(G.R. Nos. 104911-14, Rollo, pp. 263-406; G.R. Nos. 105029-32,
part of this Resolution, whose awards
Rollo, pp.
decreed by the POEA, to Our mind, are not
470-615);
supported by substantial evidence" (G.R. No.
104776; Rollo, pp. 113-115; G.R. Nos. 104911-

37
2) Joint Manifestation and Motion involving petitioner 10) Joint Manifestation and Motion involving petitioner
Bienvenido Cadalin and 82 co-petitioners dated September Quiterio R. Agudo and 36 co-claimants dated June 14, 1993
3, 1992 (G.R. No. 104776, Rollo, pp. 364-507); (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);
3) Joint Manifestation and Motion involving claimant Jose
M. Aban and 36 co-claimants dated September 17, 1992 11) Joint Manifestation and Motion involving claimant
(G.R. Nos. 105029-32, Rollo, pp. 613-722; G.R. No. 104776, Arnaldo J. Alonzo and 19 co-claimants dated July 22, 1993
Rollo, pp. 518-626; G.R. Nos. 104911-14, Rollo, pp. 407-516); (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);
4) Joint Manifestation and Motion involving claimant Antonio
T. Anglo and 17 co-claimants dated October 14, 1992 (G.R. 12) Joint Manifestation and Motion involving claimant Ricardo
Nos. C. Dayrit and 2 co-claimants dated September 7, 1993 (G.R.
105029-32, Rollo, pp. 778-843; G.R. No. 104776, Rollo, pp. 650- Nos.
713; G.R. Nos. 104911-14, Rollo, pp. 530-590); 105029-32, Rollo, pp. 1266-1278; G.R. No. 104776, Rollo, pp.
1243-1254; G.R. Nos. 104911-14, Rollo, pp. 972-984);
5) Joint Manifestation and Motion involving claimant Dionisio
Bobongo and 6 co-claimants dated January 15, 1993 (G.R. 13) Joint Manifestation and Motion involving claimant Dante
No. 104776, Rollo, pp. 813-836; G.R. Nos. 104911-14, Rollo, pp. C. Aceres and 37 co-claimants dated September 8, 1993
629-652); (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);
6) Joint Manifestation and Motion involving claimant Valerio
A. Evangelista and 4 co-claimants dated March 10, 1993 14) Joint Manifestation and Motion involving Vivencio V.
(G.R. Nos. 104911-14, Rollo, pp. 731-746; G.R. No. 104776, Abella and 27 co-claimants dated January 10, 1994 (G.R.
Rollo, pp. 1815-1829); Nos. 105029-32, Rollo, Vol. II);

7) Joint Manifestation and Motion involving claimants 15) Joint Manifestation and Motion involving Domingo B.
Palconeri Banaag and 5 co-claimants dated March 17, 1993 Solano and six co-claimants dated August 25, 1994 (G.R. Nos.
(G.R. No. 104776, Rollo, pp. 1657-1703; G.R. Nos. 104911-14, 105029-32; G.R. No. 104776; G.R. Nos. 104911-14).
Rollo, pp. 655-675);
III
8) Joint Manifestation and Motion involving claimant
Benjamin Ambrosio and 15 other co-claimants dated May 4, The facts as found by the NLRC are as follows:
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- We have taken painstaking efforts to sift over the more than
1814); fifty volumes now comprising the records of these cases. From
the records, it appears that the complainants-appellants
9) Joint Manifestation and Motion involving Valerio allege that they were recruited by respondent-appellant
Evangelista and 3 co-claimants dated May 10, 1993 (G.R. No. AIBC for its accredited foreign principal, Brown & Root, on
104776, Rollo, pp. 1815-1829); 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,

38
United Arab Emirates and Bahrain, as well as in Southeast a) Notwithstanding any other terms and conditions of this
Asia, in Indonesia and Malaysia. agreement, the Employer may, at his sole discretion,
terminate employee's service with cause, under this
Having been officially processed as overseas contract agreement at any time. If the Employer terminates the
workers by the Philippine Government, all the individual services of the Employee under this Agreement because of
complainants signed standard overseas employment the completion or termination, or suspension of the work on
contracts (Records, Vols. 25-32. Hereafter, reference to the which the Employee's services were being utilized, or
records would be sparingly made, considering their chaotic because of a reduction in force due to a decrease in scope
arrangement) with AIBC before their departure from the of such work, or by change in the type of construction of such
Philippines. These overseas employment contracts invariably work. The Employer will be responsible for his return
contained the following relevant terms and conditions. transportation to his country of origin. Normally on the most
expeditious air route, economy class accommodation.
PART B —
xxx xxx xxx
(1) Employment Position Classification :—————————
(Code) :————————— 10. VACATION/SICK LEAVE BENEFITS

(2) Company Employment Status :————————— a) After one (1) year of continuous service and/or satisfactory
(3) Date of Employment to Commence on :———————— completion of contract, employee shall be entitled to 12-
— days vacation leave with pay. This shall be computed at the
(4) Basic Working Hours Per Week :————————— basic wage rate. Fractions of a year's service will be
(5) Basic Working Hours Per Month :————————— computed on a pro-rata basis.
(6) Basic Hourly Rate :—————————
(7) Overtime Rate Per Hour :————————— b) Sick leave of 15-days shall be granted to the employee for
(8) Projected Period of Service every year of service for non-work connected injuries or illness.
(Subject to C(1) of this [sic]) :————————— If the employee failed to avail of such leave benefits, the
Months and/or same shall be forfeited at the end of the year in which said
Job Completion sick leave is granted.

xxx xxx xxx 11. BONUS

3. HOURS OF WORK AND COMPENSATION A bonus of 20% (for offshore work) of gross income will be
accrued and payable only upon satisfactory completion of
a) The Employee is employed at the hourly rate and overtime this contract.
rate as set out in Part B of this Document.
12. OFFDAY PAY
b) The hours of work shall be those set forth by the Employer,
and Employer may, at his sole option, change or adjust such The seventh day of the week shall be observed as a day of
hours as maybe deemed necessary from time to time. 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
4. TERMINATION

39
offday pay provision is applicable only when the laws of the A worker shall be entitled to such leave upon
Host Country require payments for rest day. a quantum meruit in respect of the
proportion of his service in that year.
In the State of Bahrain, where some of the individual
complainants were deployed, His Majesty Isa Bin Salman Al Art. 107: A contract of employment made for
Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23 on June a period of indefinite duration may be
16, 1976, otherwise known as the Labour Law for the Private terminated by either party thereto after
Sector (Records, Vol. 18). This decree took effect on August giving the other party thirty days' prior notice
16, 1976. Some of the provisions of Amiri Decree No. 23 that before such termination, in writing, in respect
are relevant to the claims of the complainants-appellants are of monthly paid workers and fifteen days'
as follows (italics supplied only for emphasis): notice in respect of other workers. The party
terminating a contract without giving the
Art. 79: . . . A worker shall receive payment required notice shall pay to the other party
for each extra hour equivalent to his wage compensation equivalent to the amount of
entitlement increased by a minimum of wages payable to the worker for the period
twenty-five per centum thereof for hours of such notice or the unexpired portion
worked during the day; and by a minimum of thereof.
fifty per centum thereof for hours worked
during the night which shall be deemed to Art. 111: . . . the employer concerned shall
being from seven o'clock in the evening until pay to such worker, upon termination of
seven o'clock in the morning. . . . employment, a leaving indemnity for the
period of his employment calculated on the
Art. 80: Friday shall be deemed to be a basis of fifteen days' wages for each year of
weekly day of rest on full pay. the first three years of service and of one
month's wages for each year of service
. . . an employer may require a worker, with thereafter. Such worker shall be entitled to
his consent, to work on his weekly day of rest payment of leaving indemnity upon a
if circumstances so require and in respect of quantum meruit in proportion to the period
which an additional sum equivalent to 150% of his service completed within a year.
of his normal wage shall be paid to him. . . .
All the individual complainants-appellants
Art. 81: . . . When conditions of work require have already been repatriated to the
the worker to work on any official holiday, he Philippines at the time of the filing of these
shall be paid an additional sum equivalent to cases (R.R. No. 104776, Rollo, pp. 59-65).
150% of his normal wage.
IV
Art. 84: Every worker who has completed one
year's continuous service with his employer The issues raised before and resolved by the NLRC were:
shall be entitled to leave on full pay for a
period of not less than 21 days for each year First: — Whether or not complainants are entitled to the
increased to a period not less than 28 days benefits provided by Amiri Decree No. 23 of Bahrain;
after five continuous years of service.
40
 (a) Whether or not the complainants who prayed for; and, if so, whether or not these
have worked in Bahrain are entitled to the awards are valid.
above-mentioned benefits.
Fifth: — Whether or not the POEA erred in holding respondents
(b) Whether or not Art. 44 of the same AIBC and Brown & Root jointly are severally liable for the
Decree (allegedly prescribing a more judgment awards despite the alleged finding that the former
favorable treatment of alien employees) was the employer of the complainants;
bars complainants from enjoying its benefits.
(a) Whether or not the POEA has acquired
Second: — Assuming that Amiri Decree No. 23 of Bahrain is jurisdiction over Brown & Root;
applicable in these cases, whether or not complainants'
claim for the benefits provided therein have prescribed. (b) Whether or not the undisputed fact that
AIBC was a licensed construction contractor
Third: — Whether or not the instant cases qualify as a class precludes a finding that Brown & Root is
suit. liable for complainants claims.

Fourth: — Whether or not the proceedings conducted by the Sixth: — Whether or not the POEA Administrator's failure to
POEA, as well as the decision that is the subject of these hold respondents in default constitutes a reversible error.
appeals, conformed with the requirements of due process;
Seventh: — Whether or not the POEA Administrator erred in
(a) Whether or not the respondent-appellant dismissing the following claims:
was denied its right to due process;
a. Unexpired portion of contract;
(b) Whether or not the admission of evidence
by the POEA after these cases were b. Interest earnings of Travel and Reserve
submitted for decision was valid; Fund;

(c) Whether or not the POEA acquired c. Retirement and Savings Plan benefits;
jurisdiction over Brown & Root International,
Inc.; d. War Zone bonus or premium pay of at
least 100% of basic pay;
(d) Whether or not the judgment awards are
supported by substantial evidence; e. Area Differential Pay;

(e) Whether or not the awards based on the f. Accrued interests on all the unpaid
averages and formula presented by the benefits;
complainants-appellants are supported by
substantial evidence; g. Salary differential pay;

(f) Whether or not the POEA awarded sums h. Wage differential pay;
beyond what the complainants-appellants

41
 i. Refund of SSS premiums not remitted to SSS; 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
j. Refund of withholding tax not remitted to the Labor Code of the Philippines, and not ten years as provided in Article
BIR; 1144 of the Civil Code of the Philippines nor one year as provided in the Amiri
Decree No. 23 of 1976.
k. Fringe benefits under B & R's "A Summary of
Employee Benefits" (Annex "Q" of Amended On the third issue, NLRC agreed with the POEA Administrator that the labor
Complaint); 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
l. Moral and exemplary damages; action, the claims arising from the Bahrain law, is not of common or general
interest to all the complainants.
m. Attorney's fees of at least ten percent of
the judgment award; 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
n. Other reliefs, like suspending and/or Administrator to consider the evidence presented by AIBC and BRII; (2) some
cancelling the license to recruit of AIBC and findings of fact were not supported by substantial evidence; and (3) some of
the accreditation of B & R issued by POEA; the evidence upon which the decision was based were not disclosed to AIBC
and BRII during the hearing.
o. Penalty for violations of Article 34
(prohibited practices), not excluding On the fifth issue, NLRC sustained the ruling of the POEA Administrator that BRII
reportorial requirements thereof. 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.
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. 104911-14, Rollo, pp. 25-29, 51- NLRC also held that jurisdiction over BRII was acquired by the POEA
55). Administrator through the summons served on AIBC, its local agent.

Anent the first issue, NLRC set aside Section 1, Rule 129 of the 1989 Revised On the sixth issue, NLRC held that the POEA Administrator was correct in
Rules on Evidence governing the pleading and proof of a foreign law and denying the Motion to Declare AIBC in default.
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 On the seventh issue, which involved other money claims not based on the
Labor Code of the Philippines, vesting on the Commission ample discretion to Amiri Decree No. 23, NLRC ruled:
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 (1) that the POEA Administrator has no jurisdiction over the
the POEA Administrator that the Amiri Decree No. 23, being more favorable claims for refund of the SSS premiums and refund of
and beneficial to the workers, should form part of the overseas employment withholding taxes and the claimants should file their claims for
contract of the complainants. said refund with the appropriate government agencies;

NLRC, however, held that the Amiri Decree No. 23 applied only to the (2) the claimants failed to establish that they are entitled to
claimants, who worked in Bahrain, and set aside awards of the POEA the claims which are not based on the overseas employment
Administrator in favor of the claimants, who worked elsewhere. contracts nor the Amiri Decree No. 23 of 1976;

42
 (3) that the POEA Administrator has no jurisdiction over claims summary judgment on the basis of the pleadings and
for moral and exemplary damages and nonetheless, the evidence submitted by claimants;
basis for granting said damages was not established;
(3) the NLRC and POEA Administrator erred in not holding that
(4) that the claims for salaries corresponding to the unexpired the labor cases filed by AIBC and BRII cannot be considered
portion of their contract may be allowed if filed within the a class suit;
three-year prescriptive period;
(4) that the prescriptive period for the filing of the claims is ten
(5) that the allegation that complainants were prematurely years; and
repatriated prior to the expiration of their overseas contract
was not established; and (5) that NLRC and the POEA Administrator should have
dismissed POEA Case No. L-86-05-460, the case filed by Atty.
(6) that the POEA Administrator has no jurisdiction over the Florante de Castro (Rollo, pp. 31-40).
complaint for the suspension or cancellation of the AIBC's
recruitment license and the cancellation of the accreditation AIBC and BRII, commenting on the petition in G.R. No. 104776, argued:
of BRII.
(1) that they were not responsible for the delay in the
NLRC passed sub silencio the last issue, the claim that POEA Case No. (L) 86- disposition of the labor cases, considering the great difficulty
65-460 should have been dismissed on the ground that the claimants in said of getting all the records of the more than 1,500 claimants,
case were also claimants in POEA Case No. (L) 84-06-555. Instead of dismissing the piece-meal filing of the complaints and the addition of
POEA Case No. (L) 86-65-460, the POEA just resolved the corresponding claims hundreds of new claimants by petitioners;
in POEA Case No. (L) 84-06-555. In other words, the POEA did not pass upon
the same claims twice. (2) that considering the number of complaints and claimants,
it was impossible to prepare the answers within the ten-day
V period provided in the NLRC Rules, that when the motion to
declare AIBC in default was filed on July 19, 1987, said party
G.R. No. 104776 had already filed its answer, and that considering the
staggering amount of the claims (more than
Claimants in G.R. No. 104776 based their petition for certiorari on the following US$50,000,000.00) and the complicated issues raised by the
grounds: parties, the ten-day rule to answer was not fair and
reasonable;
(1) that they were deprived by NLRC and the POEA of their
right to a speedy disposition of their cases as guaranteed by (3) that the claimants failed to refute NLRC's finding that
Section 16, Article III of the 1987 Constitution. The POEA there was no common or general interest in the subject
Administrator allowed private respondents to file their answers matter of the controversy — which was the applicability of
in two years (on June 19, 1987) after the filing of the original the Amiri Decree No. 23. Likewise, the nature of the claims
complaint (on April 2, 1985) and NLRC, in total disregard of its varied, some being based on salaries pertaining to the
own rules, affirmed the action of the POEA Administrator; unexpired portion of the contracts while others being for pure
money claims. Each claimant demanded separate claims
(2) that NLRC and the POEA Administrator should have peculiar only to himself and depending upon the particular
declared AIBC and BRII in default and should have rendered circumstances obtaining in his case;

43
 (4) that the prescriptive period for filing the claims is that On September 23, 1994, Atty. Del Mundo reiterated his charges against Atty.
prescribed by Article 291 of the Labor Code of the Philippines De Castro for unethical practices and moved for the voiding of the quitclaims
(three years) and not the one prescribed by Article 1144 of submitted by some of the claimants.
the Civil Code of the Philippines (ten years); and
G.R. Nos. 104911-14
(5) that they are not concerned with the issue of whether
POEA Case No. L-86-05-460 should be dismissed, this being a The claimants in G.R. Nos. 104911-14 based their petition for certiorari on the
private quarrel between the two labor lawyers (Rollo, pp. 292- grounds that NLRC gravely abused its discretion when it: (1) applied the three-
305). 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
Attorney's Lien hours a day (Rollo, pp. 18-22).

On November 12, 1992, Atty. Gerardo A. del Mundo moved to strike out the The claimants argue that said method was proposed by BRII itself during the
joint manifestations and motions of AIBC and BRII dated September 2 and 11, negotiation for an amicable settlement of their money claims in Bahrain as
1992, claiming that all the claimants who entered into the compromise shown in the Memorandum dated April 16, 1983 of the Ministry of Labor of
agreements subject of said manifestations and motions were his clients and Bahrain (Rollo, pp. 21-22).
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 BRII and AIBC, in their Comment, reiterated their contention in G.R. No. 104776
award given them by NLRC; that Atty. De Castro collected additional that the prescriptive period in the Labor Code of the Philippines, a special law,
attorney's fees on top of the 25% which he was entitled to receive; and that prevails over that provided in the Civil Code of the Philippines, a general law.
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 As to the memorandum of the Ministry of Labor of Bahrain on the method of
dated November 23, 1992, the Court denied the motion to strike out the Joint computing the overtime pay, BRII and AIBC claimed that they were not
Manifestations and Motions dated September 2 and 11, 1992 (G.R. Nos. bound by what appeared therein, because such memorandum was
104911-14, Rollo, pp. 608-609). 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
On December 14, 1992, Atty. Del Mundo filed a "Notice and Claim to Enforce the averaging method was discussed in the course of the negotiation for the
Attorney's Lien," alleging that the claimants who entered into compromise amicable settlement of the dispute and any offer made by a party therein
agreements with AIBC and BRII with the assistance of Atty. De Castro, had all could not be used as an admission by him (Rollo, pp. 228-236).
signed a retainer agreement with his law firm (G.R. No. 104776, Rollo, pp. 623-
624; 838-1535). G.R. Nos. 105029-32

Contempt of Court 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
On February 18, 1993, an omnibus motion was filed by Atty. Del Mundo to cite 1976 and not the terms of the employment contracts; (2) granted claims for
Atty. De Castro and Atty. Katz Tierra for contempt of court and for violation of holiday, overtime and leave indemnity pay and other benefits, on evidence
Canons 1, 15 and 16 of the Code of Professional Responsibility. The said admitted in contravention of petitioner's constitutional right to due process;
lawyers allegedly misled this Court, by making it appear that the claimants and (3) ordered the POEA Administrator to hold new hearings for the 683
who entered into the compromise agreements were represented by Atty. De claimants whose claims had been dismissed for lack of proof by the POEA
Castro, when in fact they were represented by Atty. Del Mundo (G.R. No. Administrator or NLRC itself. Lastly, they allege that assuming that the Amiri
104776, Rollo, pp. 1560-1614).

44
Decree No. 23 of 1976 was applicable, NLRC erred when it did not apply the undergone amendments in Bahrain for the new
one-year prescription provided in said law (Rollo, pp. 29-30). hires/renewals (Respondent's Exhibit 7).

VI Hence, premises considered, the applicable law of

prescription to this instant case is Article 1144 of the Civil Code
G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos. 105029-32 of the Philippines, which provides:

All the petitions raise the common issue of prescription although they Art. 1144. The following actions may be
disagreed as to the time that should be embraced within the prescriptive brought within ten years from the time the
period. cause of action accrues:

To the POEA Administrator, the prescriptive period was ten years, applying (1) Upon a written contract;
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 (2) Upon an obligation created by law;
Labor Code of the Philippines.
Thus, herein money claims of the complainants against the
The claimants in G.R. No. 104776 and G.R. Nos. 104911-14, invoking different respondents shall prescribe in ten years from August 16, 1976.
grounds, insisted that NLRC erred in ruling that the prescriptive period Inasmuch as all claims were filed within the ten-year
applicable to the claims was three years, instead of ten years, as found by the prescriptive period, no claim suffered the infirmity of being
POEA Administrator. prescribed (G.R. No. 104776, Rollo, 89-90).

The Solicitor General expressed his personal view that the prescriptive period In overruling the POEA Administrator, and holding that the prescriptive period
was one year as prescribed by the Amiri Decree No. 23 of 1976 but he is three years as provided in Article 291 of the Labor Code of the Philippines,
deferred to the ruling of NLRC that Article 291 of the Labor Code of the the NLRC argued as follows:
Philippines was the operative law.
The Labor Code provides that "all money claims arising from
The POEA Administrator held the view that: employer-employee relations . . . shall be filed within three
years from the time the cause of action accrued; otherwise
These money claims (under Article 291 of the Labor Code) they shall be forever barred" (Art. 291, Labor Code, as
refer to those arising from the employer's violation of the amended). This three-year prescriptive period shall be the
employee's right as provided by the Labor Code. one applied here and which should be reckoned from the
date of repatriation of each individual complainant,
In the instant case, what the respondents violated are not the considering the fact that the case is having (sic) filed in this
rights of the workers as provided by the Labor Code, but the country. We do not agree with the POEA Administrator that
provisions of the Amiri Decree No. 23 issued in Bahrain, which this three-year prescriptive period applies only to money
ipso facto amended the worker's contracts of employment. claims specifically recoverable under the Philippine Labor
Respondents consciously failed to conform to these provisions Code. Article 291 gives no such indication. Likewise, We can
which specifically provide for the increase of the worker's not consider complainants' cause/s of action to have
rate. It was only after June 30, 1983, four months after the accrued from a violation of their employment contracts.
brown builders brought a suit against B & R in Bahrain for this There was no violation; the claims arise from the benefits of
same claim, when respondent AIBC's contracts have the law of the country where they worked. (G.R. No. 104776,

45
 Rollo, pp. objectives the Code gives laborers various rights against their
90-91). employers. Article 623 establishes the period of limitation for
all such rights, except certain ones which are enumerated in
Anent the applicability of the one-year prescriptive period as provided by the Article 621. And there is nothing in the record to indicate that
Amiri Decree No. 23 of 1976, NLRC opined that the applicability of said law the Panamanian legislature gave special consideration to the
was one of characterization, i.e., whether to characterize the foreign law on impact of Article 623 upon the particular rights sought to be
prescription or statute of limitation as "substantive" or "procedural." NLRC cited enforced here, as distinguished from the other rights to which
the decision in Bournias v. Atlantic Maritime Company (220 F. 2d. 152, 2d Cir. that Article is also applicable. Were we confronted with the
[1955], where the issue was the applicability of the Panama Labor Code in a question of whether the limitation period of Article 621 (which
case filed in the State of New York for claims arising from said Code. In said carves out particular rights to be governed by a shorter
case, the claims would have prescribed under the Panamanian Law but not limitation period) is to be regarded as "substantive" or
under the Statute of Limitations of New York. The U.S. Circuit Court of Appeals "procedural" under the rule of "specifity" we might have a
held that the Panamanian Law was procedural as it was not "specifically different case; but here on the surface of things we appear to
intended to be substantive," hence, the prescriptive period provided in the be dealing with a "broad," and not a "specific," statute of
law of the forum should apply. The Court observed: limitations (G.R. No. 104776, Rollo, pp.
92-94).
. . . And where, as here, we are dealing with a statute of
limitations of a foreign country, and it is not clear on the face Claimants in G.R. Nos. 104911-14 are of the view that Article 291 of the Labor
of the statute that its purpose was to limit the enforceability, Code of the Philippines, which was applied by NLRC, refers only to claims
outside as well as within the foreign country concerned, of "arising from the employer's violation of the employee's right as provided by
the substantive rights to which the statute pertains, we think the Labor Code." They assert that their claims are based on the violation of
that as a yardstick for determining whether that was the their employment contracts, as amended by the Amiri Decree No. 23 of 1976
purpose this test is the most satisfactory one. It does not lead and therefore the claims may be brought within ten years as provided by
American courts into the necessity of examining into the Article 1144 of the Civil Code of the Philippines (Rollo, G.R. Nos. 104911-14, pp.
unfamiliar peculiarities and refinements of different foreign 18-21). To bolster their contention, they cite PALEA v. Philippine Airlines, Inc., 70
legal systems. . . SCRA 244 (1976).

The court further noted: 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
xxx xxx xxx "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
Applying that test here it appears to us that the libelant is conflicts rule (G.R. No. 104776, Rollo, pp. 45-46).
entitled to succeed, for the respondents have failed to satisfy
us that the Panamanian period of limitation in question was First to be determined is whether it is the Bahrain law on prescription of action
specifically aimed against the particular rights which the based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription
libelant seeks to enforce. The Panama Labor Code is a that shall be the governing law.
statute having broad objectives, viz: "The present Code
regulates the relations between capital and labor, placing Article 156 of the Amiri Decree No. 23 of 1976 provides:
them on a basis of social justice, so that, without injuring any
of the parties, there may be guaranteed for labor the A claim arising out of a contract of employment shall not be
necessary conditions for a normal life and to capital an actionable after the lapse of one year from the date of the
equitable return to its investment." In pursuance of these expiry of the contract. (G.R. Nos. 105029-31, Rollo, p. 226).

46
As a general rule, a foreign procedural law will not be applied in the forum. In the light of the 1987 Constitution, however, Section 48 cannot be enforced
Procedural matters, such as service of process, joinder of actions, period and ex proprio vigore insofar as it ordains the application in this jurisdiction of
requisites for appeal, and so forth, are governed by the laws of the forum. This Section 156 of the Amiri Decree No. 23 of 1976.
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 The courts of the forum will not enforce any foreign claim obnoxious to the
[1979]). 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
A law on prescription of actions is sui generis in Conflict of Laws in the sense of the Amiri Decree No. 23 of 1976 as regards the claims in question would
that it may be viewed either as procedural or substantive, depending on the contravene the public policy on the protection to labor.
characterization given such a law.
In the Declaration of Principles and State Policies, the 1987 Constitution
Thus in Bournias v. Atlantic Maritime Company, supra, the American court emphasized that:
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 The state shall promote social justice in all phases of national
prescription was intended to be substantive. Being considered merely a development. (Sec. 10).
procedural law even in Panama, it has to give way to the law of the forum on
prescription of actions. The state affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare
However, the characterization of a statute into a procedural or substantive (Sec. 18).
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 In article XIII on Social Justice and Human Rights, the 1987 Constitution
limitation as one of substance (Goodrich, Conflict of Laws 152-153 [1938]). A provides:
"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, Sec. 3. The State shall afford full protection to labor, local and
183 [1975]). While there are several kinds of "borrowing statutes," one form overseas, organized and unorganized, and promote full
provides that an action barred by the laws of the place where it accrued, will employment and equality of employment opportunities for
not be enforced in the forum even though the local statute has not run all.
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:
Having determined that the applicable law on prescription is the Philippine
law, the next question is whether the prescriptive period governing the filing of
If by the laws of the state or country where the cause of the claims is three years, as provided by the Labor Code or ten years, as
action arose, the action is barred, it is also barred in the provided by the Civil Code of the Philippines.
Philippines Islands.
The claimants are of the view that the applicable provision is Article 1144 of
Section 48 has not been repealed or amended by the Civil Code of the the Civil Code of the Philippines, which provides:
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
The following actions must be brought within ten years from
provision in the Civil Code of the Philippines, which is inconsistent with or
the time the right of action accrues:
contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine
Conflict of Laws 104 [7th ed.]).
(1) Upon a written contract;

47
 (2) Upon an obligation created by law; and not on a collective bargaining agreement or any other
contract. In the instant case, the claim for overtime
(3) Upon a judgment. compensation is not so much because of Commonwealth
Act No. 444, as amended but because the claim is
NLRC, on the other hand, believes that the applicable provision is Article 291 demandable right of the employees, by reason of the above-
of the Labor Code of the Philippines, which in pertinent part provides: mentioned collective bargaining agreement.

Money claims-all money claims arising from employer- Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for
employee relations accruing during the effectivity of this filing "actions to enforce any cause of action under said law." On the other
Code shall be filed within three (3) years from the time the hand, Article 291 of the Labor Code of the Philippines provides the prescriptive
cause of action accrued, otherwise they shall be forever period for filing "money claims arising from employer-employee relations." The
barred. 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
xxx xxx xxx collective bargaining agreement.

The case of Philippine Air Lines Employees Association v. Philippine Air Lines, The contention of the POEA Administrator, that the three-year prescriptive
Inc., 70 SCRA 244 (1976) invoked by the claimants in G.R. Nos. 104911-14 is period under Article 291 of the Labor Code of the Philippines applies only to
inapplicable to the cases at bench (Rollo, p. 21). The said case involved the money claims specifically recoverable under said Code, does not find support
correct computation of overtime pay as provided in the collective bargaining in the plain language of the provision. Neither is the contention of the
agreements and not the Eight-Hour Labor Law. 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.
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 VII
provided in the collective bargaining agreements between the parties be
observed. Since the claim for pay differentials is primarily anchored on the G.R. No. 104776
written contracts between the litigants, the ten-year prescriptive period
provided by Art. 1144(1) of the New Civil Code should govern." 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
Section 7-a of the Eight-Hour Labor Law (CA No. 444 as amended by R.A. No. was decided only on January 30, 1989, a clear denial of their right to a speedy
19933) provides: disposition of the case; and (2) that NLRC and the POEA Administrator should
have declared AIBC and BRII in default (Rollo, pp.
Any action to enforce any cause of action under this Act shall 31-35).
be commenced within three years after the cause of action
accrued otherwise such action shall be forever barred, . . . . Claimants invoke a new provision incorporated in the 1987 Constitution, which
provides:
The court further explained:
Sec. 16. All persons shall have the right to a speedy disposition
The three-year prescriptive period fixed in the Eight-Hour of their cases before all judicial, quasi-judicial, or
Labor Law (CA No. 444 as amended) will apply, if the claim administrative bodies.
for differentials for overtime work is solely based on said law,

48
It is true that the constitutional right to "a speedy disposition of cases" is not POEA. At that time, there was a pending motion of AIBC and BRII to strike out
limited to the accused in criminal proceedings but extends to all parties in all of the records the amended complaint and the "Compliance" of claimants to
cases, including civil and administrative cases, and in all proceedings, the order of the POEA, requiring them to submit a bill of particulars.
including judicial and quasi-judicial hearings. Hence, under the Constitution,
any party to a case may demand expeditious action on all officials who are The cases at bench are not of the run-of-the-mill variety, such that their final
tasked with the administration of justice. disposition in the administrative level after seven years from their inception,
cannot be said to be attended by unreasonable, arbitrary and oppressive
However, as held in Caballero v. Alfonso, Jr., 153 SCRA 153 (1987), "speedy delays as to violate the constitutional rights to a speedy disposition of the
disposition of cases" is a relative term. Just like the constitutional guarantee of cases of complainants.
"speedy trial" accorded to the accused in all criminal proceedings, "speedy
disposition of cases" is a flexible concept. It is consistent with delays and The amended complaint filed on June 6, 1984 involved a total of 1,767
depends upon the circumstances of each case. What the Constitution claimants. Said complaint had undergone several amendments, the first
prohibits are unreasonable, arbitrary and oppressive delays which render being on April 3, 1985.
rights nugatory.
The claimants were hired on various dates from 1975 to 1983. They were
Caballero laid down the factors that may be taken into consideration in deployed in different areas, one group in and the other groups outside of,
determining whether or not the right to a "speedy disposition of cases" has Bahrain. The monetary claims totalling more than US$65 million according to
been violated, thus: Atty. Del Mundo, included:

In the determination of whether or not the right to a "speedy 1. Unexpired portion of contract;
trial" has been violated, certain factors may be considered
and balanced against each other. These are length of delay, 2. Interest earnings of Travel and Fund;
reason for the delay, assertion of the right or failure to assert it,
and prejudice caused by the delay. The same factors may 3. Retirement and Savings Plan benefit;
also be considered in answering judicial inquiry whether or
not a person officially charged with the administration of
4. War Zone bonus or premium pay of at least 100% of basic
justice has violated the speedy disposition of cases.
pay;

Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298, (1991), we held:

5. Area Differential pay;

It must be here emphasized that the right to a speedy

6. Accrued Interest of all the unpaid benefits;
disposition of a case, like the right to speedy trial, is deemed
violated only when the proceeding is attended by vexatious,
7. Salary differential pay;
capricious, and oppressive delays; or when unjustified
postponements of the trial are asked for and secured, or
8. Wage Differential pay;
when without cause or justified motive a long period of time is
allowed to elapse without the party having his case tried.
9. Refund of SSS premiums not remitted to Social Security
System;
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 10. Refund of Withholding Tax not remitted to Bureau of
provided in Section 1, Rule III of Book VI of the Rules and Regulations of the Internal Revenue (B.I.R.);

49
 11. Fringe Benefits under Brown & Root's "A Summary of NLRC blamed the parties and their lawyers for the delay in terminating the
Employees Benefits consisting of 43 pages (Annex "Q" of proceedings, thus:
Amended Complaint);
These cases could have been spared the long and arduous
12. Moral and Exemplary Damages; route towards resolution had the parties and their counsel
been more interested in pursuing the truth and the merits of
13. Attorney's fees of at least ten percent of amounts; the claims rather than exhibiting a fanatical reliance on
technicalities. Parties and counsel have made these cases a
14. Other reliefs, like suspending and/or cancelling the license litigation of emotion. The intransigence of parties and counsel
to recruit of AIBC and issued by the POEA; and is remarkable. As late as last month, this Commission made a
last and final attempt to bring the counsel of all the parties
15. Penalty for violation of Article 34 (Prohibited practices) not (this Commission issued a special order directing respondent
excluding reportorial requirements thereof (NLRC Resolution, Brown & Root's resident agent/s to appear) to come to a
September 2, 1991, pp. 18-19; G.R. No. 104776, Rollo, pp. 73- more conciliatory stance. Even this failed (Rollo,
74). p. 58).

Inasmuch as the complaint did not allege with sufficient definiteness and The squabble between the lawyers of claimants added to the delay in the
clarity of some facts, the claimants were ordered to comply with the motion of disposition of the cases, to the lament of NLRC, which complained:
AIBC for a bill of particulars. When claimants filed their "Compliance and
Manifestation," AIBC moved to strike out the complaint from the records for It is very evident from the records that the protagonists in
failure of claimants to submit a proper bill of particulars. While the POEA these consolidated cases appear to be not only the
Administrator denied the motion to strike out the complaint, he ordered the individual complainants, on the one hand, and AIBC and
claimants "to correct the deficiencies" pointed out by AIBC. Brown & Root, on the other hand. The two lawyers for the
complainants, Atty. Gerardo Del Mundo and Atty. Florante
Before an intelligent answer could be filed in response to the complaint, the De Castro, have yet to settle the right of representation, each
records of employment of the more than 1,700 claimants had to be retrieved one persistently claiming to appear in behalf of most of the
from various countries in the Middle East. Some of the records dated as far complainants. As a result, there are two appeals by the
back as 1975. complainants. Attempts by this Commission to resolve
counsels' conflicting claims of their respective authority to
represent the complainants prove futile. The bickerings by
The hearings on the merits of the claims before the POEA Administrator were
these two counsels are reflected in their pleadings. In the
interrupted several times by the various appeals, first to NLRC and then to the
charges and countercharges of falsification of documents
Supreme Court.
and signatures, and in the disbarment proceedings by one
against the other. All these have, to a large extent, abetted in
Aside from the inclusion of additional claimants, two new cases were filed
confounding the issues raised in these cases, jumble the
against AIBC and BRII on October 10, 1985 (POEA Cases Nos.
presentation of evidence, and even derailed the prospects
L-85-10-777 and L-85-10-779). Another complaint was filed on May 29, 1986
of an amicable settlement. It would not be far-fetched to
(POEA Case No. L-86-05-460). NLRC, in exasperation, noted that the exact
imagine that both counsel, unwittingly, perhaps, painted a
number of claimants had never been completely established (Resolution,
rainbow for the complainants, with the proverbial pot of gold
Sept. 2, 1991, G.R. No. 104776, Rollo, p. 57). All the three new cases were
at its end containing more than US$100 million, the aggregate
consolidated with POEA Case No. L-84-06-555.
of the claims in these cases. It is, likewise, not improbable that
their misplaced zeal and exuberance caused them to throw

50
 all caution to the wind in the matter of elementary rules of entered into separate compromise settlements of their respective claims. A
procedure and evidence (Rollo, pp. 58-59). 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
Adding to the confusion in the proceedings before NLRC, is the listing of some v. Court of Industrial Relations, 101 Phil. 590 [1957]). For this matter, the
of the complainants in both petitions filed by the two lawyers. As noted by claimants who worked in Bahrain can not be allowed to sue in a class suit in a
NLRC, "the problem created by this situation is that if one of the two petitions is judicial proceeding. The most that can be accorded to them under the Rules
dismissed, then the parties and the public respondents would not know which of Court is to be allowed to join as plaintiffs in one complaint (Revised Rules of
claim of which petitioner was dismissed and which was not." Court, Rule 3, Sec. 6).

B. Claimants insist that all their claims could properly be consolidated in a The Court is extra-cautious in allowing class suits because they are the
"class suit" because "all the named complainants have similar money claims exceptions to the condition sine qua non, requiring the joinder of all
and similar rights sought irrespective of whether they worked in Bahrain, United indispensable parties.
Arab Emirates or in Abu Dhabi, Libya or in any part of the Middle East" (Rollo,
pp. 35-38). 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
A class suit is proper where the subject matter of the controversy is one of adverse to them, in which case the others who were impleaded by their self-
common or general interest to many and the parties are so numerous that it is appointed representatives, would surely claim denial of due process.
impracticable to bring them all before the court (Revised Rules of Court, Rule
3, Sec. 12). 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
While all the claims are for benefits granted under the Bahrain Law, many of shopping, ambulance chasing activities, falsification, duplicity and other
the claimants worked outside Bahrain. Some of the claimants were deployed unprofessional activities" and his appearances as counsel for some of the
in Indonesia and Malaysia under different terms and conditions of claimants as illegal (Rollo, pp. 38-40).
employment.
The Anti-Forum Shopping Rule (Revised Circular No. 28-91) is intended to put a
NLRC and the POEA Administrator are correct in their stance that inasmuch as stop to the practice of some parties of filing multiple petitions and complaints
the first requirement of a class suit is not present (common or general interest involving the same issues, with the result that the courts or agencies have to
based on the Amiri Decree of the State of Bahrain), it is only logical that only resolve the same issues. Said Rule, however, applies only to petitions filed with
those who worked in Bahrain shall be entitled to file their claims in a class suit. the Supreme Court and the Court of Appeals. It is entitled "Additional
Requirements For Petitions Filed with the Supreme Court and the Court of
While there are common defendants (AIBC and BRII) and the nature of the Appeals To Prevent Forum Shopping or Multiple Filing of Petitioners and
claims is the same (for employee's benefits), there is no common question of Complainants." The first sentence of the circular expressly states that said
law or fact. While some claims are based on the Amiri Law of Bahrain, many of circular applies to an governs the filing of petitions in the Supreme Court and
the claimants never worked in that country, but were deployed elsewhere. the Court of Appeals.
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 While Administrative Circular No. 04-94 extended the application of the anti-
or particular interest in specific benefits completely different from the benefits forum shopping rule to the lower courts and administrative agencies, said
in which the other named claimants and those included as members of a circular took effect only on April 1, 1994.
"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 POEA and NLRC could not have entertained the complaint for unethical
no concern in protecting the interests of the other claimants as shown by the conduct against Atty. De Castro because NLRC and POEA have no
fact, that hundreds of them have abandoned their co-claimants and have jurisdiction to investigate charges of unethical conduct of lawyers.
51
 Attorney's Lien 14/2/83 where they have claimed as hereinabove stated,
sample of the Service Contract executed between one of
The "Notice and Claim to Enforce Attorney's Lien" dated December 14, 1992 the employees and the company through its agent in (sic)
was filed by Atty. Gerardo A. Del Mundo to protect his claim for attorney's fees Philippines, Asia International Builders Corporation where it
for legal services rendered in favor of the claimants (G.R. No. 104776, Rollo, has been provided for 48 hours of work per week and an
pp. 841-844). annual leave of 12 days and an overtime wage of 1 & 1/4 of
the normal hourly wage.
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 xxx xxx xxx
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 The Company in its computation reached the following
of Court, Rule 138, Sec. 37). The statement of the claim for the charging lien of averages:
Atty. Del Mundo should have been filed with the administrative agency that
rendered and executed the judgment. A. 1. The average duration of the actual service of the
employee is 35 months for the Philippino (sic) employees . . . .
Contempt of Court
2. The average wage per hour for the Philippino (sic)
The complaint of Atty. Gerardo A. Del Mundo to cite Atty. Florante De Castro employee is US$2.69 . . . .
and Atty. Katz Tierra for violation of the Code of Professional Responsibility
should be filed in a separate and appropriate proceeding. 3. The average hours for the overtime is 3 hours plus in all
public holidays and weekends.
G.R. No. 104911-14
4. Payment of US$8.72 per months (sic) of service as
Claimants charge NLRC with grave abuse of discretion in not accepting their compensation for the difference of the wages of the
formula of "Three Hours Average Daily Overtime" in computing the overtime overtime done for each Philippino (sic) employee . . . (Rollo,
payments. They claim that it was BRII itself which proposed the formula during p.22).
the negotiations for the settlement of their claims in Bahrain and therefore it is
in estoppel to disclaim said offer (Rollo, pp. 21-22). 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
Claimants presented a Memorandum of the Ministry of Labor of Bahrain there was no showing that the Bahrain Minister of Labor had approved said
dated April 16, 1983, which in pertinent part states: 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
After the perusal of the memorandum of the Vice President admissible in evidence to prove that anything is due to the claimants.
and the Area Manager, Middle East, of Brown & Root Co.
and the Summary of the compensation offered by the While said document was presented to the POEA without observing the rule
Company to the employees in respect of the difference of on presenting official documents of a foreign government as provided in
pay of the wages of the overtime and the difference of Section 24, Rule 132 of the 1989 Revised Rules on Evidence, it can be admitted
vacation leave and the perusal of the documents attached in evidence in proceedings before an administrative body. The opposing
thereto i.e., minutes of the meetings between the parties have a copy of the said memorandum, and they could easily verify its
Representative of the employees and the management of authenticity and accuracy.
the Company, the complaint filed by the employees on

52
The admissibility of the offer of compromise made by BRII as contained in the said contracts if they offer terms and conditions more favorable that those
memorandum is another matter. Under Section 27, Rule 130 of the 1989 stipulated therein. It was stipulated in said contracts that:
Revised Rules on Evidence, an offer to settle a claim is not an admission that
anything is due. The Employee agrees that while in the employ of the
Employer, he will not engage in any other business or
Said Rule provides: occupation, nor seek employment with anyone other than
the Employer; that he shall devote his entire time and
Offer of compromise not admissible. — In civil cases, an offer attention and his best energies, and abilities to the
of compromise is not an admission of any liability, and is not performance of such duties as may be assigned to him by the
admissible in evidence against the offeror. Employer; that he shall at all times be subject to the direction
and control of the Employer; and that the benefits provided
This Rule is not only a rule of procedure to avoid the cluttering of the record to Employee hereunder are substituted for and in lieu of all
with unwanted evidence but a statement of public policy. There is great other benefits provided by any applicable law, provided of
public interest in having the protagonists settle their differences amicable course, that total remuneration and benefits do not fall below
before these ripen into litigation. Every effort must be taken to encourage that of the host country regulation or custom, it being
them to arrive at a settlement. The submission of offers and counter-offers in understood that should applicable laws establish that fringe
the negotiation table is a step in the right direction. But to bind a party to his benefits, or other such benefits additional to the
offers, as what claimants would make this Court do, would defeat the salutary compensation herein agreed cannot be waived, Employee
purpose of the Rule. agrees that such compensation will be adjusted downward
so that the total compensation hereunder, plus the non-
G.R. Nos. 105029-32 waivable benefits shall be equivalent to the compensation
herein agreed (Rollo, pp. 352-353).
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 The overseas-employment contracts could have been drafted more
claimants. It was of the belief that "where the laws of the host country are felicitously. While a part thereof provides that the compensation to the
more favorable and beneficial to the workers, then the laws of the host employee may be "adjusted downward so that the total computation
country shall form part of the overseas employment contract." It quoted with (thereunder) plus the non-waivable benefits shall be equivalent to the
approval the observation of the POEA Administrator that ". . . in labor compensation" therein agreed, another part of the same provision
proceedings, all doubts in the implementation of the provisions of the Labor categorically states "that total remuneration and benefits do not fall below
Code and its implementing regulations shall be resolved in favor of labor" that of the host country regulation and custom."
(Rollo, pp. 90-94).
Any ambiguity in the overseas-employment contracts should be interpreted
AIBC and BRII claim that NLRC acted capriciously and whimsically when it against AIBC and BRII, the parties that drafted it (Eastern Shipping Lines, Inc. v.
refused to enforce the overseas-employment contracts, which became the Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).
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 Article 1377 of the Civil Code of the Philippines provides:
contracts executed in the Philippines.
The interpretation of obscure words or stipulations in a
The overseas-employment contracts, which were prepared by AIBC and BRII contract shall not favor the party who caused the obscurity.
themselves, provided that the laws of the host country became applicable to
Said rule of interpretation is applicable to contracts of adhesion where there is
already a prepared form containing the stipulations of the employment
53
contract and the employees merely "take it or leave it." The presumption is Workmen's Compensation Act of the Republic of the Philippines or the
that there was an imposition by one party against the other and that the Worker's Insurance Act of registry of the vessel, whichever is greater." Since the
employees signed the contracts out of necessity that reduced their laws of Singapore, the place of registry of the vessel in which the late husband
bargaining power (Fieldmen's Insurance Co., Inc. v. Songco, 25 SCRA 70 of private respondent served at the time of his death, granted a better
[1968]). compensation package, we applied said foreign law in preference to the
terms of the contract.
Applying the said legal precepts, we read the overseas-employment
contracts in question as adopting the provisions of the Amiri Decree No. 23 of The case of Bagong Filipinas Overseas Corporation v. National Labor Relations
1976 as part and parcel thereof. 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
The parties to a contract may select the law by which it is to be governed amount of the death compensation of a Filipino seaman should be
(Cheshire, Private International Law, 187 [7th ed.]). In such a case, the foreign determined under the shipboard employment contract executed in the
law is adopted as a "system" to regulate the relations of the parties, including Philippines or the Hongkong law. Holding that the shipboard employment
questions of their capacity to enter into the contract, the formalities to be contract was controlling, the court differentiated said case from Norse
observed by them, matters of performance, and so forth (16 Am Jur 2d, Management Co. in that in the latter case there was an express stipulation in
150-161). the employment contract that the foreign law would be applicable if it
afforded greater compensation.
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 B. AIBC and BRII claim that they were denied by NLRC of their right to due
incorporated into their contract "as a set of terms." By such reference to the process when said administrative agency granted Friday-pay differential,
provisions of the foreign law, the contract does not become a foreign holiday-pay differential, annual-leave differential and leave indemnity pay to
contract to be governed by the foreign law. The said law does not operate as the claimants listed in Annex B of the Resolution. At first, NLRC reversed the
a statute but as a set of contractual terms deemed written in the contract resolution of the POEA Administrator granting these benefits on a finding that
(Anton, Private International Law, 197 [1967]; Dicey and Morris, The Conflict of the POEA Administrator failed to consider the evidence presented by AIBC
Laws, 702-703, [8th ed.]). 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
A basic policy of contract is to protect the expectation of the parties (Reese, disclosed to AIBC and BRII (Rollo, pp. 35-36; 106-107). But instead of remanding
Choice of Law in Torts and Contracts, 16 Columbia Journal of Transnational the case to the POEA Administrator for a new hearing, which means further
Law 1, 21 [1977]). Such party expectation is protected by giving effect to the delay in the termination of the case, NLRC decided to pass upon the validity
parties' own choice of the applicable law (Fricke v. Isbrandtsen Co., Inc., 151 of the claims itself. It is this procedure that AIBC and BRII complain of as being
F. Supp. 465, 467 [1957]). The choice of law must, however, bear some irregular and a "reversible error."
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 They pointed out that NLRC took into consideration evidence submitted on
enforced by claimants have a direct connection with the Bahrain law appeal, the same evidence which NLRC found to have been "unilaterally
because the services were rendered in that country. submitted by the claimants and not disclosed to the adverse parties" (Rollo,
pp. 37-39).
In Norse Management Co. (PTE) v. National Seamen Board, 117 SCRA 486
(1982), the "Employment Agreement," between Norse Management Co. and NLRC noted that so many pieces of evidentiary matters were submitted to the
the late husband of the private respondent, expressly provided that in the POEA administrator by the claimants after the cases were deemed submitted
event of illness or injury to the employee arising out of and in the course of his for resolution and which were taken cognizance of by the POEA Administrator
employment and not due to his own misconduct, "compensation shall be in resolving the cases. While AIBC and BRII had no opportunity to refute said
paid to employee in accordance with and subject to the limitation of the evidence of the claimants before the POEA Administrator, they had all the

54
opportunity to rebut said evidence and to present their administrative agencies (First Asian Transport & Shipping Agency, Inc. v. Ople,
counter-evidence before NLRC. As a matter of fact, AIBC and BRII themselves 142 SCRA 542 [1986]; Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219
were able to present before NLRC additional evidence which they failed to [1987]). This principle is enshrined in Article 221 of the Labor Code of the
present before the POEA Administrator. Philippines and is now the bedrock of proceedings before NLRC.

Under Article 221 of the Labor Code of the Philippines, NLRC is enjoined to "use Notwithstanding the non-applicability of technical rules of procedure and
every and all reasonable means to ascertain the facts in each case speedily evidence in administrative proceedings, there are cardinal rules which must
and objectively and without regard to technicalities of law or procedure, all in be observed by the hearing officers in order to comply with the due process
the interest of due process." requirements of the Constitution. These cardinal rules are collated in Ang Tibay
v. Court of Industrial Relations, 69 Phil. 635 (1940).
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, VIII
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 The three petitions were filed under Rule 65 of the Revised Rules of Court on
controversies. 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
Even the Supreme Court has decided appealed cases on the merits instead of discretion.
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 WHEREFORE, all the three petitions are DISMISSED.
(Development Bank of the Philippines v. Intermediate Appellate Court, 190
SCRA 653 [1990]; Pagdonsalan v. National Labor Relations Commission, 127 SO ORDERED.
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

55
Renvoi On July 6, 1999, respondent resigned. In his letter to MMG, he also stated:

G.R. No. 172342 July 13, 2009 xxxx

LWV CONSTRUCTION CORPORATION, Petitioner, I am aware that I still have to do a final settlement with the company and
vs. hope that during my more than seven (7) [years] services, as the Saudi Law
MARCELO B. DUPO, Respondent. stated, I am entitled for a long service award.5 (Emphasis supplied.)

DECISION xxxx

QUISUMBING, J.: According to respondent, when he followed up his claim for long service
award on December 7, 2000, petitioner informed him that MMG did not
Petitioner LWV Construction Corporation appeals the Decision1 dated respond.6
December 6, 2005 of the Court of Appeals in CA-G.R. SP No. 76843 and its
Resolution2 dated April 12, 2006, denying the motion for reconsideration. The On December 11, 2000, respondent filed a complaint7 for payment of service
Court of Appeals had ruled that under Article 87 of the Saudi Labor and award against petitioner before the National Labor Relations Commission
Workmen Law (Saudi Labor Law), respondent Marcelo Dupo is entitled to a (NLRC), Regional Arbitration Branch, Cordillera Administrative Region, Baguio
service award or longevity pay amounting to US$12,640.33. City. In support of his claim, respondent averred in his position paper that:

The antecedent facts are as follows: xxxx

Petitioner, a domestic corporation which recruits Filipino workers, hired Under the Law of Saudi Arabia, an employee who rendered at least five (5)
respondent as Civil Structural Superintendent to work in Saudi Arabia for its years in a company within the jurisdiction of Saudi Arabia, is entitled to the so-
principal, Mohammad Al-Mojil Group/Establishment (MMG). On February 26, called long service award which is known to others as longevity pay of at least
1992, respondent signed his first overseas employment contract, renewable one half month pay for every year of service. In excess of five years an
after one year. It was renewed five times on the following dates: May 10, 1993, employee is entitled to one month pay for every year of service. In both cases
November 16, 1994, January 22, 1996, April 14, 1997, and March 26, 1998. All inclusive of all benefits and allowances.
were fixed-period contracts for one year. The sixth and last contract stated
that respondent’s employment starts upon reporting to work and ends when This benefit was offered to complainant before he went on vacation, hence,
he leaves the work site. Respondent left Saudi Arabia on April 30, 1999 and this was engrained in his mind. He reconstructed the computation of his long
arrived in the Philippines on May 1, 1999. service award or longevity pay and he arrived at the following computation
exactly the same with the amount he was previously offered [which is
On May 28, 1999, respondent informed MMG, through the petitioner, that he US$12,640.33].8 (Emphasis supplied.)
needs to extend his vacation because his son was hospitalized. He also sought
a promotion with salary adjustment.3 In reply, MMG informed respondent that xxxx
his promotion is subject to management’s review; that his services are still
needed; that he was issued a plane ticket for his return flight to Saudi Arabia Respondent said that he did not grab the offer for he intended to return after
on May 31, 1999; and that his decision regarding his employment must be his vacation.
made within seven days, otherwise, MMG "will be compelled to cancel [his]
slot."4 For its part, petitioner offered payment and prescription as defenses. Petitioner
maintained that MMG "pays its workers their Service Award or Severance Pay

56
every conclusion of their Labor Contracts pursuant to Article 87 of the [Saudi denied. The NLRC decision dated November 29, 2002 as well as and (sic) its
Labor Law]." Under Article 87, "payment of the award is at the end or January 31, 2003 Resolution are hereby AFFIRMED in toto.
termination of the Labor Contract concluded for a specific period." Based on
the payroll,9 respondent was already paid his service award or severance pay SO ORDERED.15
for his latest (sixth) employment contract.
After its motion for reconsideration was denied, petitioner filed the instant
Petitioner added that under Article 1310 of the Saudi Labor Law, the action to petition raising the following issues:
enforce payment of the service award must be filed within one year from the
termination of a labor contract for a specific period. Respondent’s six I.
contracts ended when he left Saudi Arabia on the following dates: April 15,
1993, June 8, 1994, December 18, 1995, March 21, 1997, March 16, 1998 and WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING NO
April 30, 1999. Petitioner concluded that the one-year prescriptive period had GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
lapsed because respondent filed his complaint on December 11, 2000 or one JURISDICTION ON THE PART OF PUBLIC RESPONDENT NATIONAL LABOR
year and seven months after his sixth contract ended.11 RELATIONS COMMISSION.

In his June 18, 2001 Decision,12 the Labor Arbiter ordered petitioner to pay II.
respondent longevity pay of US$12,640.33 or ₱648,562.69 and attorney’s fees
of ₱64,856.27 or a total of ₱713,418.96.13
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT
THE SERVICE AWARD OF THE RESPONDENT [HAS] NOT PRESCRIBED WHEN HIS
The Labor Arbiter ruled that respondent’s seven-year employment with MMG COMPLAINT WAS FILED ON DECEMBER 11, 2000.
had sufficiently oriented him on the benefits given to workers; that petitioner
was unable to convincingly refute respondent’s claim that MMG offered him
III.
longevity pay before he went on vacation on May 1, 1999; and that
respondent’s claim was not barred by prescription since his claim on July 6,
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN APPLYING IN
1999, made a month after his cause of action accrued, interrupted the
THE CASE AT BAR [ARTICLE 1155 OF THE CIVIL CODE].
prescriptive period under the Saudi Labor Law until his claim was categorically
denied.
IV.

Petitioner appealed. However, the NLRC dismissed the appeal and affirmed
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN APPLYING
the Labor Arbiter’s decision.14 The NLRC ruled that respondent is entitled to
ARTICLE NO. 7 OF THE SAUDI LABOR AND WORKMEN LAW TO SUPPORT ITS
longevity pay which is different from severance pay.
FINDING THAT THE BASIS OF THE SERVICE AWARD IS LONGEVITY [PAY] OR
LENGTH OF SERVICE RENDERED BY AN EMPLOYEE.16
Aggrieved, petitioner brought the case to the Court of Appeals through a
petition for certiorari under Rule 65 of the Rules of Court. The Court of Appeals
Essentially, the issue is whether the Court of Appeals erred in ruling that
denied the petition and affirmed the NLRC. The Court of Appeals ruled that
respondent is entitled to a service award or longevity pay of US$12,640.33
service award is the same as longevity pay, and that the severance pay
under the provisions of the Saudi Labor Law. Related to this issue are
received by respondent cannot be equated with service award. The
petitioner’s defenses of payment and prescription.
dispositive portion of the Court of Appeals decision reads:

Petitioner points out that the Labor Arbiter awarded longevity pay although
WHEREFORE, finding no grave abuse of discretion amounting to lack or in (sic)
the Saudi Labor Law grants no such benefit, and the NLRC confused longevity
excess of jurisdiction on the part of public respondent NLRC, the petition is
pay and service award. Petitioner maintains that the benefit granted by

57
Article 87 of the Saudi Labor Law is service award which was already paid by B. If a workman resigns because of marriage or childbirth.
MMG each time respondent’s contract ended.
C. If the workman is leaving the work as a result of a force majeure
Petitioner insists that prescription barred respondent’s claim for service award beyond his control.17 (Emphasis supplied.)
as the complaint was filed one year and seven months after the sixth contract
ended. Petitioner alleges that the Court of Appeals erred in ruling that Respondent, however, has called the benefit other names such as long
respondent’s July 6, 1999 claim interrupted the running of the prescriptive service award and longevity pay. On the other hand, petitioner claimed that
period. Such ruling is contrary to Article 13 of the Saudi Labor Law which the service award is the same as severance pay. Notably, the Labor Arbiter
provides that no case or claim relating to any of the rights provided for under was unable to specify any law to support his award of longevity pay.18 He
said law shall be heard after the lapse of 12 months from the date of the anchored the award on his finding that respondent’s allegations were more
termination of the contract. credible because his seven-year employment at MMG had sufficiently
oriented him on the benefits given to workers. To the NLRC, respondent is
Respondent counters that he is entitled to longevity pay under the provisions entitled to service award or longevity pay under Article 87 and that longevity
of the Saudi Labor Law and quotes extensively the decision of the Court of pay is different from severance pay. The Court of Appeals agreed.
Appeals. He points out that petitioner has not refuted the Labor Arbiter’s
finding that MMG offered him longevity pay of US$12,640.33 before his one- Considering that Article 87 expressly grants a service award, why is it correct to
month vacation in the Philippines in 1999. Thus, he "submits that such offer agree with respondent that service award is the same as longevity pay, and
indeed exists" as he sees no reason for MMG to offer the benefit if no law wrong to agree with petitioner that service award is the same as severance
grants it. pay? And why would it be correct to say that service award is severance pay,
and wrong to call service award as longevity pay?
After a careful study of the case, we are constrained to reverse the Court of
Appeals. We find that respondent’s service award under Article 87 of the We found the answer in the pleadings and evidence presented. Respondent’s
Saudi Labor Law has already been paid. Our computation will show that the position paper mentioned how his long service award or longevity pay is
severance pay received by respondent was his service award. computed: half-month’s pay per year of service and one-month’s pay per
year after five years of service. Article 87 has the same formula to compute
Article 87 clearly grants a service award. It reads: the service award.

Article 87 The payroll submitted by petitioner showed that respondent received

severance pay of SR2,786 for his sixth employment contract covering the
Where the term of a labor contract concluded for a specified period comes period April 21, 1998 to April 29, 1999.19 The computation below shows that
to an end or where the employer cancels a contract of unspecified period, respondent’s severance pay of SR2,786 was his service award under Article 87.
the employer shall pay to the workman an award for the period of his service
to be computed on the basis of half a month’s pay for each of the first five Service Award = ½ (SR5,438)20 + (9 days/365 days)21 x ½ (SR5,438)
years and one month’s pay for each of the subsequent years. The last rate of
pay shall be taken as basis for the computation of the award. For fractions of Service Award = SR2,786.04
a year, the workman shall be entitled to an award which is proportionate to
his service period during that year. Furthermore, the workman shall be entitled Respondent’s service award for the sixth contract is equivalent only to half-
to the service award provided for at the beginning of this article in the month’s pay plus the proportionate amount for the additional nine days of
following cases: service he rendered after one year. Respondent’s employment contracts
expressly stated that his employment ended upon his departure from work.
A. If he is called to military service. Each year he departed from work and successively new contracts were

58
executed before he reported for work anew. His service was not cumulative. In Cadalin v. POEA’s Administrator,27 we held that Article 291 covers all money
Pertinently, in Brent School, Inc. v. Zamora,22 we said that "a fixed term is an claims from employer-employee relationship and is broader in scope than
essential and natural appurtenance" of overseas employment contracts,23 as claims arising from a specific law. It is not limited to money claims recoverable
in this case. We also said in that case that under American law, "[w]here a under the Labor Code, but applies also to claims of overseas contract
contract specifies the period of its duration, it terminates on the expiration of workers.28 The following ruling in Cadalin v. POEA’s Administrator is instructive:
such period. A contract of employment for a definite period terminates by its
own terms at the end of such period."24 As it is, Article 72 of the Saudi Labor First to be determined is whether it is the Bahrain law on prescription of action
Law is also of similar import. It reads: based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription
that shall be the governing law.
A labor contract concluded for a specified period shall terminate upon the
expiry of its term. If both parties continue to enforce the contract, thereafter, it Article 156 of the Amiri Decree No. 23 of 1976 provides:
shall be considered renewed for an unspecified period.25
"A claim arising out of a contract of employment shall not be actionable after
Regarding respondent’s claim that he was offered US$12,640.33 as longevity the lapse of one year from the date of the expiry of the contract" x x x.
pay before he returned to the Philippines on May 1, 1999, we find that he was
not candid on this particular point. His categorical assertion about the offer As a general rule, a foreign procedural law will not be applied in the
being "engrained in his mind" such that he "reconstructed the computation … forum.1avvphi1 Procedural matters, such as service of process, joinder of
and arrived at the … computation exactly the same with the amount he was actions, period and requisites for appeal, and so forth, are governed by the
previously offered" is not only beyond belief. Such assertion is also a stark laws of the forum. This is true even if the action is based upon a foreign
departure from his July 6, 1999 letter to MMG where he could only express his substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga,
hope that he was entitled to a long service award and where he never Private International Law, 131 [1979]).
mentioned the supposed previous offer. Moreover, respondent’s claim that his
monthly compensation is SR10,248.9226 is belied by the payroll which shows A law on prescription of actions is sui generis in Conflict of Laws in the sense
that he receives SR5,438 per month. that it may be viewed either as procedural or substantive, depending on the
characterization given such a law.
We therefore emphasize that such payroll should have prompted the lower
tribunals to examine closely respondent’s computation of his supposed xxxx
longevity pay before adopting that computation as their own.
However, the characterization of a statute into a procedural or substantive
On the matter of prescription, however, we cannot agree with petitioner that law becomes irrelevant when the country of the forum has a "borrowing
respondent’s action has prescribed under Article 13 of the Saudi Labor Law. statute." Said statute has the practical effect of treating the foreign statute of
What applies is Article 291 of our Labor Code which reads: 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
ART. 291. Money claims. — All money claims arising from employer-employee of limitations to the pending claims based on a foreign law (Siegel, Conflicts,
relations accruing during the effectivity of this Code shall be filed within three 183 [1975]). While there are several kinds of "borrowing statutes," one form
(3) years from the time the cause of action accrued; otherwise they shall be provides that an action barred by the laws of the place where it accrued, will
forever barred. 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
xxxx of our Code of Civil Procedure is of this kind. Said Section provides:

59
"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 Philippine 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 Procedure 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 [of the Code of Civil
Procedure] cannot be enforced ex proprio vigore insofar as it ordains the
application in this jurisdiction of [Article] 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 x x x. 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.29

xxxx

Thus, in our considered view, respondent’s complaint was filed well within the
three-year prescriptive period under Article 291 of our Labor Code. This point,
however, has already been mooted by our finding that respondent’s service
award had been paid, albeit the payroll termed such payment as severance
pay.

WHEREFORE, the petition is GRANTED. The assailed Decision dated December

6, 2005 and Resolution dated April 12, 2006, of the Court of Appeals in CA-G.R.
SP No. 76843, as well as the Decision dated June 18, 2001 of the Labor Arbiter
in NLRC Case No. RAB-CAR-12-0649-00 and the Decision dated November 29,
2002 and Resolution dated January 31, 2003 of the NLRC in NLRC CA No.
028994-01 (NLRC RAB-CAR-12-0649-00) are REVERSED and SET ASIDE. The
Complaint of respondent is hereby DISMISSED.

60
Renvoi me, and who, from all information I have now resides in Egpit, Digos,
Davao, Philippines, the sum of THREE THOUSAND SIX HUNDRED PESOS
G.R. No. L-16749 January 31, 1963 (P3,600.00), Philippine Currency the same to be deposited in trust for
the said Maria Helen Christensen with the Davao Branch of the
IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED. Philippine National Bank, and paid to her at the rate of One Hundred
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased, Pesos (P100.00), Philippine Currency per month until the principal
Executor and Heir-appellees, thereof as well as any interest which may have accrued thereon, is
vs. exhausted..
HELEN CHRISTENSEN GARCIA, oppositor-appellant.
xxx xxx xxx
M. R. Sotelo for executor and heir-appellees.
Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant. 12. I hereby give, devise and bequeath, unto my well-beloved
daughter, the said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard
LABRADOR, J.: Daney), now residing as aforesaid at No. 665 Rodger Young Village,
Los Angeles, California, U.S.A., all the income from the rest, remainder,
This is an appeal from a decision of the Court of First Instance of Davao, Hon. and residue of my property and estate, real, personal and/or mixed,
Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, of whatsoever kind or character, and wheresoever situated, of which I
dated September 14, 1949, approving among things the final accounts of the may be possessed at my death and which may have come to me
executor, directing the executor to reimburse Maria Lucy Christensen the from any source whatsoever, during her lifetime: ....
amount of P3,600 paid by her to Helen Christensen Garcia as her legacy, and
declaring Maria Lucy Christensen entitled to the residue of the property to be It is in accordance with the above-quoted provisions that the executor in his
enjoyed during her lifetime, and in case of death without issue, one-half of final account and project of partition ratified the payment of only P3,600 to
said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in accordance Helen Christensen Garcia and proposed that the residue of the estate be
with the provisions of the will of the testator Edward E. Christensen. The will was transferred to his daughter, Maria Lucy Christensen.
executed in Manila on March 5, 1951 and contains the following provisions:
Opposition to the approval of the project of partition was filed by Helen
3. I declare ... that I have but ONE (1) child, named MARIA LUCY Christensen Garcia, insofar as it deprives her (Helen) of her legitime as an
CHRISTENSEN (now Mrs. Bernard Daney), who was born in the acknowledged natural child, she having been declared by Us in G.R. Nos. L-
Philippines about twenty-eight years ago, and who is now residing at 11483-84 an acknowledged natural child of the deceased Edward E.
No. 665 Rodger Young Village, Los Angeles, California, U.S.A. Christensen. The legal grounds of opposition are (a) that the distribution should
be governed by the laws of the Philippines, and (b) that said order of
4. I further declare that I now have no living ascendants, and no distribution is contrary thereto insofar as it denies to Helen Christensen, one of
descendants except my above named daughter, MARIA LUCY two acknowledged natural children, one-half of the estate in full ownership. In
CHRISTENSEN DANEY. amplification of the above grounds it was alleged that the law that should
govern the estate of the deceased Christensen should not be the internal law
xxx xxx xxx of California alone, but the entire law thereof because several foreign
elements are involved, that the forum is the Philippines and even if the case
were decided in California, Section 946 of the California Civil Code, which
7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now
requires that the domicile of the decedent should apply, should be
married to Eduardo Garcia, about eighteen years of age and who,
applicable. It was also alleged that Maria Helen Christensen having been
notwithstanding the fact that she was baptized Christensen, is not in
declared an acknowledged natural child of the decedent, she is deemed for
any way related to me, nor has she been at any time adopted by
all purposes legitimate from the time of her birth.

61
The court below ruled that as Edward E. Christensen was a citizen of the THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE LAWS
United States and of the State of California at the time of his death, the HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE IN
successional rights and intrinsic validity of the provisions in his will are to be FULL OWNERSHIP.
governed by the law of California, in accordance with which a testator has
the right to dispose of his property in the way he desires, because the right of There is no question that Edward E. Christensen was a citizen of the United
absolute dominion over his property is sacred and inviolable (In re McDaniel's States and of the State of California at the time of his death. But there is also
Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49 no question that at the time of his death he was domiciled in the Philippines,
Pac. 192, cited in page 179, Record on Appeal). Oppositor Maria Helen as witness the following facts admitted by the executor himself in appellee's
Christensen, through counsel, filed various motions for reconsideration, but brief:
these were denied. Hence, this appeal.
In the proceedings for admission of the will to probate, the facts of
The most important assignments of error are as follows: record show that the deceased Edward E. Christensen was born on
November 29, 1875 in New York City, N.Y., U.S.A.; his first arrival in the
I Philippines, as an appointed school teacher, was on July 1, 1901, on
board the U.S. Army Transport "Sheridan" with Port of Embarkation as
THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE the City of San Francisco, in the State of California, U.S.A. He stayed in
SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF the Philippines until 1904.
EDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER
JUST SHARE IN THE INHERITANCE. In December, 1904, Mr. Christensen returned to the United States and
stayed there for the following nine years until 1913, during which time
II he resided in, and was teaching school in Sacramento, California.

THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO Mr. Christensen's next arrival in the Philippines was in July of the year
RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND 1913. However, in 1928, he again departed the Philippines for the
CIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL LAW. United States and came back here the following year, 1929. Some
nine years later, in 1938, he again returned to his own country, and
III came back to the Philippines the following year, 1939.

THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER Wherefore, the parties respectfully pray that the foregoing stipulation
INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE of facts be admitted and approved by this Honorable Court, without
INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE DISTRIBUTION OF prejudice to the parties adducing other evidence to prove their case
THE ESTATE OF THE DECEASED EDWARD E. CHRISTENSEN SHOULD BE GOVERNED not covered by this stipulation of facts. 1äwphï1.ñët
BY THE LAWS OF THE PHILIPPINES.
Being an American citizen, Mr. Christensen was interned by the
IV Japanese Military Forces in the Philippines during World War II. Upon
liberation, in April 1945, he left for the United States but returned to the
THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF Philippines in December, 1945. Appellees Collective Exhibits "6", CFI
DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINE Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs.
LAWS. "MM", "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)

62
 In April, 1951, Edward E. Christensen returned once more to California choice requires the exercise of intention as well as physical presence.
shortly after the making of his last will and testament (now in question "Residence simply requires bodily presence of an inhabitant in a given
herein) which he executed at his lawyers' offices in Manila on March place, while domicile requires bodily presence in that place and also
5, 1951. He died at the St. Luke's Hospital in the City of Manila on April an intention to make it one's domicile." Residence, however, is a term
30, 1953. (pp. 2-3) used with many shades of meaning, from the merest temporary
presence to the most permanent abode, and it is not safe to insist
In arriving at the conclusion that the domicile of the deceased is the that any one use et the only proper one. (Goodrich, p. 29)
Philippines, we are persuaded by the fact that he was born in New York,
migrated to California and resided there for nine years, and since he came to The law that governs the validity of his testamentary dispositions is defined in
the Philippines in 1913 he returned to California very rarely and only for short Article 16 of the Civil Code of the Philippines, which is as follows:
visits (perhaps to relatives), and considering that he appears never to have
owned or acquired a home or properties in that state, which would indicate ART. 16. Real property as well as personal property is subject to the
that he would ultimately abandon the Philippines and make home in the State law of the country where it is situated.
of California.
However, intestate and testamentary successions, both with respect
Sec. 16. Residence is a term used with many shades of meaning from to the order of succession and to the amount of successional rights
mere temporary presence to the most permanent abode. Generally, and to the intrinsic validity of testamentary provisions, shall be
however, it is used to denote something more than mere physical regulated by the national law of the person whose succession is under
presence. (Goodrich on Conflict of Laws, p. 29) consideration, whatever may be the nature of the property and
regardless of the country where said property may be found.
As to his citizenship, however, We find that the citizenship that he acquired in
California when he resided in Sacramento, California from 1904 to 1913, was The application of this article in the case at bar requires the determination of
never lost by his stay in the Philippines, for the latter was a territory of the the meaning of the term "national law" is used therein.
United States (not a state) until 1946 and the deceased appears to have
considered himself as a citizen of California by the fact that when he There is no single American law governing the validity of testamentary
executed his will in 1951 he declared that he was a citizen of that State; so provisions in the United States, each state of the Union having its own private
that he appears never to have intended to abandon his California citizenship law applicable to its citizens only and in force only within the state. The
by acquiring another. This conclusion is in accordance with the following "national law" indicated in Article 16 of the Civil Code above quoted can not,
principle expounded by Goodrich in his Conflict of Laws. therefore, possibly mean or apply to any general American law. So it can refer
to no other than the private law of the State of California.
The terms "'residence" and "domicile" might well be taken to mean the
same thing, a place of permanent abode. But domicile, as has been The next question is: What is the law in California governing the disposition of
shown, has acquired a technical meaning. Thus one may be personal property? The decision of the court below, sustains the contention of
domiciled in a place where he has never been. And he may reside in the executor-appellee that under the California Probate Code, a testator
a place where he has no domicile. The man with two homes, may dispose of his property by will in the form and manner he desires, citing
between which he divides his time, certainly resides in each one, the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But
while living in it. But if he went on business which would require his appellant invokes the provisions of Article 946 of the Civil Code of California,
presence for several weeks or months, he might properly be said to which is as follows:
have sufficient connection with the place to be called a resident. It is
clear, however, that, if he treated his settlement as continuing only for
the particular business in hand, not giving up his former "home," he
could not be a domiciled New Yorker. Acquisition of a domicile of

63
 If there is no law to the contrary, in the place where personal property Strangely enough, both the advocates for and the objectors to the
is situated, it is deemed to follow the person of its owner, and is renvoi plead that greater uniformity will result from adoption of their
governed by the law of his domicile. respective views. And still more strange is the fact that the only way to
achieve uniformity in this choice-of-law problem is if in the dispute the
The existence of this provision is alleged in appellant's opposition and is not two states whose laws form the legal basis of the litigation disagree as
denied. We have checked it in the California Civil Code and it is there. to whether the renvoi should be accepted. If both reject, or both
Appellee, on the other hand, relies on the case cited in the decision and accept the doctrine, the result of the litigation will vary with the
testified to by a witness. (Only the case of Kaufman is correctly cited.) It is choice of the forum. In the case stated above, had the Michigan
argued on executor's behalf that as the deceased Christensen was a citizen court rejected the renvoi, judgment would have been against the
of the State of California, the internal law thereof, which is that given in the woman; if the suit had been brought in the Illinois courts, and they too
abovecited case, should govern the determination of the validity of the rejected the renvoi, judgment would be for the woman. The same
testamentary provisions of Christensen's will, such law being in force in the result would happen, though the courts would switch with respect to
State of California of which Christensen was a citizen. Appellant, on the other which would hold liability, if both courts accepted the renvoi.
hand, insists that Article 946 should be applicable, and in accordance
therewith and following the doctrine of the renvoi, the question of the validity The Restatement accepts the renvoi theory in two instances: where
of the testamentary provision in question should be referred back to the law of the title to land is in question, and where the validity of a decree of
the decedent's domicile, which is the Philippines. divorce is challenged. In these cases the Conflict of Laws rule of the
situs of the land, or the domicile of the parties in the divorce case, is
The theory of doctrine of renvoi has been defined by various authors, thus: applied by the forum, but any further reference goes only to the
internal law. Thus, a person's title to land, recognized by the situs, will
The problem has been stated in this way: "When the Conflict of Laws be recognized by every court; and every divorce, valid by the
rule of the forum refers a jural matter to a foreign law for decision, is domicile of the parties, will be valid everywhere. (Goodrich, Conflict
the reference to the purely internal rules of law of the foreign system; of Laws, Sec. 7, pp. 13-14.)
i.e., to the totality of the foreign law minus its Conflict of Laws rules?"
X, a citizen of Massachusetts, dies intestate, domiciled in France,
On logic, the solution is not an easy one. The Michigan court chose to leaving movable property in Massachusetts, England, and France. The
accept the renvoi, that is, applied the Conflict of Laws rule of Illinois question arises as to how this property is to be distributed among X's
which referred the matter back to Michigan law. But once having next of kin.
determined the the Conflict of Laws principle is the rule looked to, it is
difficult to see why the reference back should not have been to Assume (1) that this question arises in a Massachusetts court. There the
Michigan Conflict of Laws. This would have resulted in the "endless rule of the conflict of laws as to intestate succession to movables calls
chain of references" which has so often been criticized be legal for an application of the law of the deceased's last domicile. Since by
writers. The opponents of the renvoi would have looked merely to the hypothesis X's last domicile was France, the natural thing for the
internal law of Illinois, thus rejecting the renvoi or the reference back. Massachusetts court to do would be to turn to French statute of
Yet there seems no compelling logical reason why the original distributions, or whatever corresponds thereto in French law, and
reference should be the internal law rather than to the Conflict of decree a distribution accordingly. An examination of French law,
Laws rule. It is true that such a solution avoids going on a merry-go- however, would show that if a French court were called upon to
round, but those who have accepted the renvoi theory avoid this determine how this property should be distributed, it would refer the
inextricabilis circulas by getting off at the second reference and at distribution to the national law of the deceased, thus applying the
that point applying internal law. Perhaps the opponents of the renvoi Massachusetts statute of distributions. So on the surface of things the
are a bit more consistent for they look always to internal law as the Massachusetts court has open to it alternative course of action: (a)
rule of reference. either to apply the French law is to intestate succession, or (b) to

64
 resolve itself into a French court and apply the Massachusetts statute the conflict of laws as well. According to this theory 'the law of a
of distributions, on the assumption that this is what a French court country' means the whole of its law.
would do. If it accepts the so-called renvoi doctrine, it will follow the
latter course, thus applying its own law. xxx xxx xxx

This is one type of renvoi. A jural matter is presented which the Von Bar presented his views at the meeting of the Institute of
conflict-of-laws rule of the forum refers to a foreign law, the conflict- International Law, at Neuchatel, in 1900, in the form of the following
of-laws rule of which, in turn, refers the matter back again to the law theses:
of the forum. This is renvoi in the narrower sense. The German term for
this judicial process is 'Ruckverweisung.'" (Harvard Law Review, Vol. 31, (1) Every court shall observe the law of its country as regards the
pp. 523-571.) application of foreign laws.

After a decision has been arrived at that a foreign law is to be (2) Provided that no express provision to the contrary exists, the court
resorted to as governing a particular case, the further question may shall respect:
arise: Are the rules as to the conflict of laws contained in such foreign
law also to be resorted to? This is a question which, while it has been (a) The provisions of a foreign law which disclaims the right to
considered by the courts in but a few instances, has been the subject bind its nationals abroad as regards their personal statute,
of frequent discussion by textwriters and essayists; and the doctrine and desires that said personal statute shall be determined by
involved has been descriptively designated by them as the the law of the domicile, or even by the law of the place
"Renvoyer" to send back, or the "Ruchversweisung", or the where the act in question occurred.
"Weiterverweisung", since an affirmative answer to the question
postulated and the operation of the adoption of the foreign law in
(b) The decision of two or more foreign systems of law,
toto would in many cases result in returning the main controversy to
provided it be certain that one of them is necessarily
be decided according to the law of the forum. ... (16 C.J.S. 872.)
competent, which agree in attributing the determination of a
question to the same system of law.
Another theory, known as the "doctrine of renvoi", has been
advanced. The theory of the doctrine of renvoi is that the court of the
xxx xxx xxx
forum, in determining the question before it, must take into account
the whole law of the other jurisdiction, but also its rules as to conflict of
If, for example, the English law directs its judge to distribute the
laws, and then apply the law to the actual question which the rules of
personal estate of an Englishman who has died domiciled in Belgium
the other jurisdiction prescribe. This may be the law of the forum. The
in accordance with the law of his domicile, he must first inquire
doctrine of the renvoi has generally been repudiated by the
whether the law of Belgium would distribute personal property upon
American authorities. (2 Am. Jur. 296)
death in accordance with the law of domicile, and if he finds that the
Belgian law would make the distribution in accordance with the law
The scope of the theory of renvoi has also been defined and the reasons for its
of nationality — that is the English law — he must accept this
application in a country explained by Prof. Lorenzen in an article in the Yale
reference back to his own law.
Law Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of the article
are quoted herein below:
We note that Article 946 of the California Civil Code is its conflict of laws rule,
while the rule applied in In re Kaufman, Supra, its internal law. If the law on
The recognition of the renvoi theory implies that the rules of the
succession and the conflict of laws rules of California are to be enforced
conflict of laws are to be understood as incorporating not only the
jointly, each in its own intended and appropriate sphere, the principle cited In
ordinary or internal law of the foreign state or country, but its rules of

65
re Kaufman should apply to citizens living in the State, but Article 946 should It is argued on appellees' behalf that the clause "if there is no law to the
apply to such of its citizens as are not domiciled in California but in other contrary in the place where the property is situated" in Sec. 946 of the
jurisdictions. The rule laid down of resorting to the law of the domicile in the California Civil Code refers to Article 16 of the Civil Code of the Philippines and
determination of matters with foreign element involved is in accord with the that the law to the contrary in the Philippines is the provision in said Article 16
general principle of American law that the domiciliary law should govern in that the national law of the deceased should govern. This contention can not
most matters or rights which follow the person of the owner. be sustained. As explained in the various authorities cited above the national
law mentioned in Article 16 of our Civil Code is the law on conflict of laws in
When a man dies leaving personal property in one or more states, the California Civil Code, i.e., Article 946, which authorizes the reference or
and leaves a will directing the manner of distribution of the property, return of the question to the law of the testator's domicile. The conflict of laws
the law of the state where he was domiciled at the time of his death rule in California, Article 946, Civil Code, precisely refers back the case, when
will be looked to in deciding legal questions about the will, almost as a decedent is not domiciled in California, to the law of his domicile, the
completely as the law of situs is consulted in questions about the Philippines in the case at bar. The court of the domicile can not and should
devise of land. It is logical that, since the domiciliary rules control not refer the case back to California; such action would leave the issue
devolution of the personal estate in case of intestate succession, the incapable of determination because the case will then be like a football,
same rules should determine the validity of an attempted tossed back and forth between the two states, between the country of which
testamentary dispostion of the property. Here, also, it is not that the the decedent was a citizen and the country of his domicile. The Philippine
domiciliary has effect beyond the borders of the domiciliary state. The court must apply its own law as directed in the conflict of laws rule of the state
rules of the domicile are recognized as controlling by the Conflict of of the decedent, if the question has to be decided, especially as the
Laws rules at the situs property, and the reason for the recognition as application of the internal law of California provides no legitime for children
in the case of intestate succession, is the general convenience of the while the Philippine law, Arts. 887(4) and 894, Civil Code of the Philippines,
doctrine. The New York court has said on the point: 'The general makes natural children legally acknowledged forced heirs of the parent
principle that a dispostiton of a personal property, valid at the recognizing them.
domicile of the owner, is valid anywhere, is one of the universal
application. It had its origin in that international comity which was one The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40
of the first fruits of civilization, and it this age, when business Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider
intercourse and the process of accumulating property take but little Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.) cited by
notice of boundary lines, the practical wisdom and justice of the rule appellees to support the decision can not possibly apply in the case at bar,
is more apparent than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. for two important reasons, i.e., the subject in each case does not appear to
442-443.) be a citizen of a state in the United States but with domicile in the Philippines,
and it does not appear in each case that there exists in the state of which the
Appellees argue that what Article 16 of the Civil Code of the Philippines subject is a citizen, a law similar to or identical with Art. 946 of the California
pointed out as the national law is the internal law of California. But as above Civil Code.
explained the laws of California have prescribed two sets of laws for its
citizens, one for residents therein and another for those domiciled in other We therefore find that as the domicile of the deceased Christensen, a citizen
jurisdictions. Reason demands that We should enforce the California internal of California, is the Philippines, the validity of the provisions of his will depriving
law prescribed for its citizens residing therein, and enforce the conflict of laws his acknowledged natural child, the appellant, should be governed by the
rules for the citizens domiciled abroad. If we must enforce the law of California Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of
as in comity we are bound to go, as so declared in Article 16 of our Civil California, not by the internal law of California..
Code, then we must enforce the law of California in accordance with the
express mandate thereof and as above explained, i.e., apply the internal law WHEREFORE, the decision appealed from is hereby reversed and the case
for residents therein, and its conflict-of-laws rule for those domiciled abroad. returned to the lower court with instructions that the partition be made as the

66
Philippine law on succession provides. Judgment reversed, with costs against
appellees.

67
Renvoi children by his first and second wives, namely: Edward A. Bellis, Henry A. Bellis,
Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and
G.R. No. L-23678 June 6, 1967 Dorothy E. Bellis, in equal shares.1äwphï1.ñët

TESTATE ESTATE OF AMOS G. BELLIS, deceased. Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio,
PEOPLE'S BANK and TRUST COMPANY, executor. Texas, U.S.A. His will was admitted to probate in the Court of First Instance of
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants, Manila on September 15, 1958.
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees. The People's Bank and Trust Company, as executor of the will, paid all the
bequests therein including the amount of $240,000.00 in the form of shares of
Vicente R. Macasaet and Jose D. Villena for oppositors appellants. stock to Mary E. Mallen and to the three (3) illegitimate children, Amos Bellis,
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al. Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts totalling
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al. P40,000.00 each in satisfaction of their respective legacies, or a total of
J. R. Balonkita for appellee People's Bank & Trust Company. P120,000.00, which it released from time to time according as the lower court
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman. approved and allowed the various motions or petitions filed by the latter three
requesting partial advances on account of their respective legacies.
BENGZON, J.P., J.:
On January 8, 1964, preparatory to closing its administration, the executor
This is a direct appeal to Us, upon a question purely of law, from an order of submitted and filed its "Executor's Final Account, Report of Administration and
the Court of First Instance of Manila dated April 30, 1964, approving the Project of Partition" wherein it reported, inter alia, the satisfaction of the legacy
project of partition filed by the executor in Civil Case No. 37089 of Mary E. Mallen by the delivery to her of shares of stock amounting to
therein.1äwphï1.ñët $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00.
The facts of the case are as follows: In the project of partition, the executor — pursuant to the "Twelfth" clause of
the testator's Last Will and Testament — divided the residuary estate into seven
equal portions for the benefit of the testator's seven legitimate children by his
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the
first and second marriages.
United States." By his first wife, Mary E. Mallen, whom he divorced, he had five
legitimate children: Edward A. Bellis, George Bellis (who pre-deceased him in
infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman; by his second On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their
wife, Violet Kennedy, who survived him, he had three legitimate children: respective oppositions to the project of partition on the ground that they were
Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three deprived of their legitimes as illegitimate children and, therefore, compulsory
illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma heirs of the deceased.
Bellis.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he of which is evidenced by the registry receipt submitted on April 27, 1964 by the
directed that after all taxes, obligations, and expenses of administration are executor.1
paid for, his distributable estate should be divided, in trust, in the following
order and manner: (a) $240,000.00 to his first wife, Mary E. Mallen; (b) After the parties filed their respective memoranda and other pertinent
P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina pleadings, the lower court, on April 30, 1964, issued an order overruling the
Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two oppositions and approving the executor's final account, report and
items have been satisfied, the remainder shall go to his seven surviving administration and project of partition. Relying upon Art. 16 of the Civil Code,

68
it applied the national law of the decedent, which in this case is Texas law, ART. 1039. Capacity to succeed is governed by the law of the nation
which did not provide for legitimes. of the decedent.

Their respective motions for reconsideration having been denied by the lower Appellants would however counter that Art. 17, paragraph three, of the Civil
court on June 11, 1964, oppositors-appellants appealed to this Court to raise Code, stating that —
the issue of which law must apply — Texas law or Philippine law.
Prohibitive laws concerning persons, their acts or property, and those
In this regard, the parties do not submit the case on, nor even discuss, the which have for their object public order, public policy and good
doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L- customs shall not be rendered ineffective by laws or judgments
16749, January 31, 1963. Said doctrine is usually pertinent where the decedent promulgated, or by determinations or conventions agreed upon in a
is a national of one country, and a domicile of another. In the present case, it foreign country.
is not disputed that the decedent was both a national of Texas and a
domicile thereof at the time of his death.2 So that even assuming Texas has a prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This
conflict of law rule providing that the domiciliary system (law of the domicile) is not correct. Precisely, Congress deleted the phrase, "notwithstanding the
should govern, the same would not result in a reference back (renvoi) to provisions of this and the next preceding article" when they incorporated Art.
Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a 11 of the old Civil Code as Art. 17 of the new Civil Code, while reproducing
conflicts rule adopting the situs theory (lex rei sitae) calling for the application without substantial change the second paragraph of Art. 10 of the old Civil
of the law of the place where the properties are situated, renvoi would arise, Code as Art. 16 in the new. It must have been their purpose to make the
since the properties here involved are found in the Philippines. In the absence, second paragraph of Art. 16 a specific provision in itself which must be
however, of proof as to the conflict of law rule of Texas, it should not be applied in testate and intestate succession. As further indication of this
presumed different from ours.3 Appellants' position is therefore not rested on legislative intent, Congress added a new provision, under Art. 1039, which
the doctrine of renvoi. As stated, they never invoked nor even mentioned it in decrees that capacity to succeed is to be governed by the national law of
their arguments. Rather, they argue that their case falls under the the decedent.
circumstances mentioned in the third paragraph of Article 17 in relation to
Article 16 of the Civil Code. It is therefore evident that whatever public policy or good customs may be
involved in our System of legitimes, Congress has not intended to extend the
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the same to the succession of foreign nationals. For it has specifically chosen to
national law of the decedent, in intestate or testamentary successions, with leave, inter alia, the amount of successional rights, to the decedent's national
regard to four items: (a) the order of succession; (b) the amount of law. Specific provisions must prevail over general ones.
successional rights; (e) the intrinsic validity of the provisions of the will; and (d)
the capacity to succeed. They provide that — Appellants would also point out that the decedent executed two wills — one
to govern his Texas estate and the other his Philippine estate — arguing from
ART. 16. Real property as well as personal property is subject to the this that he intended Philippine law to govern his Philippine estate. Assuming
law of the country where it is situated. that such was the decedent's intention in executing a separate Philippine will,
it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil.
However, intestate and testamentary successions, both with respect 867, 870, a provision in a foreigner's will to the effect that his properties shall be
to the order of succession and to the amount of successional rights distributed in accordance with Philippine law and not with his national law, is
and to the intrinsic validity of testamentary provisions, shall be illegal and void, for his national law cannot be ignored in regard to those
regulated by the national law of the person whose succession is under matters that Article 10 — now Article 16 — of the Civil Code states said
consideration, whatever may he the nature of the property and national law should govern.
regardless of the country wherein said property may be found.

69
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State
of Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or
legitimes. Accordingly, since the intrinsic validity of the provision of the will and
the amount of successional rights are to be determined under Texas law, the
Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with costs
against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez

and Castro, JJ., concur.

70