G.R. No.

149177 November 23, 2007 When the STAR Project was near completion, the complaint for lack of jurisdiction. They asserted
KAZUHIRO HASEGAWA and NIPPON Department of Public Works and Highways that the claim for improper pre-termination of
ENGINEERING CONSULTANTS CO., LTD., (DPWH) engaged the consultancy services of respondent's ICA could only be heard and
Petitioners, Nippon, on January 28, 2000, this time for the ventilated in the proper courts of Japan following
vs. detailed engineering and construction supervision the principles of lex loci celebrationis and lex
MINORU KITAMURA, Respondent. of the Bongabon-Baler Road Improvement (BBRI) contractus.12
DECISION Project.7 Respondent was named as the project In the meantime, on June 20, 2000, the DPWH
NACHURA, J.: manager in the contract's Appendix 3.1.8 approved Nippon's request for the replacement of
Before the Court is a petition for review on On February 28, 2000, petitioner Kazuhiro Kitamura by a certain Y. Kotake as project manager
certiorari under Rule 45 of the Rules of Court Hasegawa, Nippon's general manager for its of the BBRI Project.13
assailing the April 18, 2001 Decision1 of the Court International Division, informed respondent that On June 29, 2000, the RTC, invoking our ruling in
of Appeals (CA) in CA-G.R. SP No. 60827, and the the company had no more intention of Insular Government v. Frank14 that matters
July 25, 2001 Resolution2 denying the motion for automatically renewing his ICA. His services would connected with the performance of contracts are
reconsideration thereof. be engaged by the company only up to the regulated by the law prevailing at the place of
On March 30, 1999, petitioner Nippon Engineering substantial completion of the STAR Project on performance,15 denied the motion to dismiss.16
Consultants Co., Ltd. (Nippon), a Japanese March 31, 2000, just in time for the ICA's expiry.9 The trial court subsequently denied petitioners'
consultancy firm providing technical and Threatened with impending unemployment, motion for reconsideration,17 prompting them to
management support in the infrastructure projects respondent, through his lawyer, requested a file with the appellate court, on August 14, 2000,
of foreign governments,3 entered into an negotiation conference and demanded that he be their first Petition for Certiorari under Rule 65
Independent Contractor Agreement (ICA) with assigned to the BBRI project. Nippon insisted that [docketed as CA-G.R. SP No. 60205].18 On August
respondent Minoru Kitamura, a Japanese national respondent’s contract was for a fixed term that 23, 2000, the CA resolved to dismiss the petition on
permanently residing in the Philippines.4 The had already expired, and refused to negotiate for procedural grounds—for lack of statement of
agreement provides that respondent was to the renewal of the ICA.10 material dates and for insufficient verification and
extend professional services to Nippon for a year As he was not able to generate a positive response certification against forum shopping.19 An Entry of
starting on April 1, 1999.5 Nippon then assigned from the petitioners, respondent consequently Judgment was later issued by the appellate court
respondent to work as the project manager of the initiated on June 1, 2000 Civil Case No. 00-0264 for on September 20, 2000.20
Southern Tagalog Access Road (STAR) Project in specific performance and damages with the Aggrieved by this development, petitioners filed
the Philippines, following the company's Regional Trial Court of Lipa City.11 with the CA, on September 19, 2000, still within the
consultancy contract with the Philippine For their part, petitioners, contending that the ICA reglementary period, a second Petition for
Government.6 had been perfected in Japan and executed by and Certiorari under Rule 65 already stating therein the
between Japanese nationals, moved to dismiss the material dates and attaching thereto the proper
verification and certification. This second petition, B. THE HONORABLE COURT OF APPEALS GRAVELY Court on the statement of the material dates.29 The
which substantially raised the same issues as those ERRED IN OVERLOOKING THE NEED TO REVIEW dismissal being without prejudice, petitioners can
in the first, was docketed as CA-G.R. SP No. OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI re-file the petition, or file a second petition
60827.21 SOLUTIONIS IN THE LIGHT OF RECENT attaching thereto the appropriate verification and
Ruling on the merits of the second petition, the DEVELOPMENT[S] IN PRIVATE INTERNATIONAL certification—as they, in fact did—and stating
appellate court rendered the assailed April 18, LAWS.26 therein the material dates, within the prescribed
2001 Decision22 finding no grave abuse of The pivotal question that this Court is called upon period30 in Section 4, Rule 65 of the said Rules.31
discretion in the trial court's denial of the motion to resolve is whether the subject matter The dismissal of a case without prejudice signifies
to dismiss. The CA ruled, among others, that the jurisdiction of Philippine courts in civil cases for the absence of a decision on the merits and leaves
principle of lex loci celebrationis was not applicable specific performance and damages involving the parties free to litigate the matter in a
to the case, because nowhere in the pleadings was contracts executed outside the country by foreign subsequent action as though the dismissed action
the validity of the written agreement put in issue. nationals may be assailed on the principles of lex had not been commenced. In other words, the
The CA thus declared that the trial court was loci celebrationis, lex contractus, the "state of the termination of a case not on the merits does not
correct in applying instead the principle of lex loci most significant relationship rule," or forum non bar another action involving the same parties, on
solutionis.23 conveniens. the same subject matter and theory.32
Petitioners' motion for reconsideration was However, before ruling on this issue, we must first Necessarily, because the said dismissal is without
subsequently denied by the CA in the assailed July dispose of the procedural matters raised by the prejudice and has no res judicata effect, and even
25, 2001 Resolution.24 respondent. if petitioners still indicated in the verification and
Remaining steadfast in their stance despite the Kitamura contends that the finality of the appellate certification of the second certiorari petition that
series of denials, petitioners instituted the instant court's decision in CA-G.R. SP No. 60205 has the first had already been dismissed on procedural
Petition for Review on Certiorari25 imputing the already barred the filing of the second petition grounds,33 petitioners are no longer required by
following errors to the appellate court: docketed as CA-G.R. SP No. 60827 (fundamentally the Rules to indicate in their certification of non-
A. THE HONORABLE COURT OF APPEALS GRAVELY raising the same issues as those in the first one) forum shopping in the instant petition for review of
ERRED IN FINDING THAT THE TRIAL COURT and the instant petition for review thereof. the second certiorari petition, the status of the
VALIDLY EXERCISED JURISDICTION OVER THE We do not agree. When the CA dismissed CA-G.R. aforesaid first petition before the CA. In any case,
INSTANT CONTROVERSY, DESPITE THE FACT THAT SP No. 60205 on account of the petition's defective an omission in the certificate of non-forum
THE CONTRACT SUBJECT MATTER OF THE certification of non-forum shopping, it was a shopping about any event that will not constitute
PROCEEDINGS A QUO WAS ENTERED INTO BY AND dismissal without prejudice.27 The same holds true res judicata and litis pendentia, as in the present
BETWEEN TWO JAPANESE NATIONALS, WRITTEN in the CA's dismissal of the said case due to defects case, is not a fatal defect. It will not warrant the
WHOLLY IN THE JAPANESE LANGUAGE AND in the formal requirement of verification28 and in dismissal and nullification of the entire
EXECUTED IN TOKYO, JAPAN. the other requirement in Rule 46 of the Rules of proceedings, considering that the evils sought to
be prevented by the said certificate are no longer even the subsequent August 17, 2001 there are recognized exceptions to this rule,45
present.34 Authorization were issued only by Nippon's petitioners' case does not fall among them.
The Court also finds no merit in respondent's president and chief executive officer, not by the This brings us to the discussion of the substantive
contention that petitioner Hasegawa is only company's board of directors. In not a few cases, issue of the case.
authorized to verify and certify, on behalf of we have ruled that corporate powers are exercised Asserting that the RTC of Lipa City is an
Nippon, the certiorari petition filed with the CA and by the board of directors; thus, no person, not even inconvenient forum, petitioners question its
not the instant petition. True, the Authorization35 its officers, can bind the corporation, in the jurisdiction to hear and resolve the civil case for
dated September 4, 2000, which is attached to the absence of authority from the board.40 Considering specific performance and damages filed by the
second certiorari petition and which is also that Hasegawa verified and certified the petition respondent. The ICA subject of the litigation was
attached to the instant petition for review, is only on his behalf and not on behalf of the other entered into and perfected in Tokyo, Japan, by
limited in scope—its wordings indicate that petitioner, the petition has to be denied pursuant Japanese nationals, and written wholly in the
Hasegawa is given the authority to sign for and act to Loquias v. Office of the Ombudsman.41 Japanese language. Thus, petitioners posit that
on behalf of the company only in the petition filed Substantial compliance will not suffice in a matter local courts have no substantial relationship to the
with the appellate court, and that authority cannot that demands strict observance of the Rules.42 parties46 following the [state of the] most
extend to the instant petition for review.36 In a While technical rules of procedure are designed significant relationship rule in Private International
plethora of cases, however, this Court has liberally not to frustrate the ends of justice, nonetheless, Law.47
applied the Rules or even suspended its application they are intended to effect the proper and orderly The Court notes that petitioners adopted an
whenever a satisfactory explanation and a disposition of cases and effectively prevent the additional but different theory when they elevated
subsequent fulfillment of the requirements have clogging of court dockets.43 the case to the appellate court. In the Motion to
been made.37 Given that petitioners herein Further, the Court has observed that petitioners Dismiss48 filed with the trial court, petitioners
sufficiently explained their misgivings on this point incorrectly filed a Rule 65 petition to question the never contended that the RTC is an inconvenient
and appended to their Reply38 an updated trial court's denial of their motion to dismiss. It is a forum. They merely argued that the applicable law
Authorization39 for Hasegawa to act on behalf of well-established rule that an order denying a which will determine the validity or invalidity of
the company in the instant petition, the Court finds motion to dismiss is interlocutory, and cannot be respondent's claim is that of Japan, following the
the same as sufficient compliance with the Rules. the subject of the extraordinary petition for principles of lex loci celebrationis and lex
However, the Court cannot extend the same liberal certiorari or mandamus. The appropriate recourse contractus.49 While not abandoning this stance in
treatment to the defect in the verification and is to file an answer and to interpose as defenses their petition before the appellate court,
certification. As respondent pointed out, and to the objections raised in the motion, to proceed to petitioners on certiorari significantly invoked the
which we agree, Hasegawa is truly not authorized trial, and, in case of an adverse decision, to elevate defense of forum non conveniens.50 On petition for
to act on behalf of Nippon in this case. The the entire case by appeal in due course.44 While review before this Court, petitioners dropped their
aforesaid September 4, 2000 Authorization and other arguments, maintained the forum non
conveniens defense, and introduced their new question of whether the courts of that state have not capable of pecuniary estimation and is
argument that the applicable principle is the [state jurisdiction to enter a judgment.56 properly cognizable by the RTC of Lipa City.62 What
of the] most significant relationship rule.51 In this case, only the first phase is at issue— they rather raise as grounds to question subject
Be that as it may, this Court is not inclined to deny jurisdiction.1âwphi1 Jurisdiction, however, has matter jurisdiction are the principles of lex loci
this petition merely on the basis of the change in various aspects. For a court to validly exercise its celebrationis and lex contractus, and the "state of
theory, as explained in Philippine Ports Authority v. power to adjudicate a controversy, it must have the most significant relationship rule."
City of Iloilo.52 We only pointed out petitioners' jurisdiction over the plaintiff or the petitioner, over The Court finds the invocation of these grounds
inconstancy in their arguments to emphasize their the defendant or the respondent, over the subject unsound.
incorrect assertion of conflict of laws principles. matter, over the issues of the case and, in cases Lex loci celebrationis relates to the "law of the
To elucidate, in the judicial resolution of conflicts involving property, over the res or the thing which place of the ceremony"63 or the law of the place
problems, three consecutive phases are involved: is the subject of the litigation.57 In assailing the trial where a contract is made.64 The doctrine of lex
jurisdiction, choice of law, and recognition and court's jurisdiction herein, petitioners are actually contractus or lex loci contractus means the "law of
enforcement of judgments. Corresponding to referring to subject matter jurisdiction. the place where a contract is executed or to be
these phases are the following questions: (1) Jurisdiction over the subject matter in a judicial performed."65 It controls the nature, construction,
Where can or should litigation be initiated? (2) proceeding is conferred by the sovereign authority and validity of the contract66 and it may pertain to
Which law will the court apply? and (3) Where can which establishes and organizes the court. It is the law voluntarily agreed upon by the parties or
the resulting judgment be enforced?53 given only by law and in the manner prescribed by the law intended by them either expressly or
Analytically, jurisdiction and choice of law are two law.58 It is further determined by the allegations of implicitly.67 Under the "state of the most
distinct concepts.54 Jurisdiction considers whether the complaint irrespective of whether the plaintiff significant relationship rule," to ascertain what
it is fair to cause a defendant to travel to this state; is entitled to all or some of the claims asserted state law to apply to a dispute, the court should
choice of law asks the further question whether therein.59 To succeed in its motion for the dismissal determine which state has the most substantial
the application of a substantive law which will of an action for lack of jurisdiction over the subject connection to the occurrence and the parties. In a
determine the merits of the case is fair to both matter of the claim,60 the movant must show that case involving a contract, the court should consider
parties. The power to exercise jurisdiction does not the court or tribunal cannot act on the matter where the contract was made, was negotiated,
automatically give a state constitutional authority submitted to it because no law grants it the power was to be performed, and the domicile, place of
to apply forum law. While jurisdiction and the to adjudicate the claims.61 business, or place of incorporation of the parties.68
choice of the lex fori will often coincide, the In the instant case, petitioners, in their motion to This rule takes into account several contacts and
"minimum contacts" for one do not always provide dismiss, do not claim that the trial court is not evaluates them according to their relative
the necessary "significant contacts" for the other.55 properly vested by law with jurisdiction to hear the importance with respect to the particular issue to
The question of whether the law of a state can be subject controversy for, indeed, Civil Case No. 00- be resolved.69
applied to a transaction is different from the 0264 for specific performance and damages is one
Since these three principles in conflict of laws make it may choose to recognize laws of foreign nations,
reference to the law applicable to a dispute, they the court is not limited by foreign sovereign law
are rules proper for the second phase, the choice short of treaties or other formal agreements, even
of law.70 They determine which state's law is to be in matters regarding rights provided by foreign
applied in resolving the substantive issues of a sovereigns.75
conflicts problem.71 Necessarily, as the only issue Neither can the other ground raised, forum non
in this case is that of jurisdiction, choice-of-law conveniens,76 be used to deprive the trial court of 2) Saudi Arabian Airlines vs. Rebesemcio et. al.
rules are not only inapplicable but also not yet its jurisdiction herein. First, it is not a proper basis January 14, 2015,
called for. for a motion to dismiss because Section 1, Rule 16
Further, petitioners' premature invocation of of the Rules of Court does not include it as a G.R. No. 198587, January 14, 2015
choice-of-law rules is exposed by the fact that they ground.77 Second, whether a suit should be SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J.
have not yet pointed out any conflict between the entertained or dismissed on the basis of the said BETIA, Petitioners, v. MA. JOPETTE M. REBESENCIO,
laws of Japan and ours. Before determining which doctrine depends largely upon the facts of the MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A.
law should apply, first there should exist a conflict particular case and is addressed to the sound CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ,
of laws situation requiring the application of the discretion of the trial court.78 In this case, the RTC Respondents.
conflict of laws rules.72 Also, when the law of a decided to assume jurisdiction. Third, the propriety DECISION
foreign country is invoked to provide the proper of dismissing a case based on this principle requires LEONEN, J.:
rules for the solution of a case, the existence of a factual determination; hence, this conflicts All Filipinos are entitled to the protection of the rights
such law must be pleaded and proved.73 principle is more properly considered a matter of guaranteed in the Constitution.
It should be noted that when a conflicts case, one defense.79
involving a foreign element, is brought before a Accordingly, since the RTC is vested by law with the This is a Petition for Review on Certiorari with
court or administrative agency, there are three power to entertain and hear the civil case filed by application for the issuance of a temporary restraining
alternatives open to the latter in disposing of it: (1) respondent and the grounds raised by petitioners order and/or writ of preliminary injunction under Rule
dismiss the case, either because of lack of to assail that jurisdiction are inappropriate, the 45 of the 1997 Rules of Civil Procedure praying that
jurisdiction or refusal to assume jurisdiction over trial and appellate courts correctly denied the judgment be rendered reversing and setting aside the
the case; (2) assume jurisdiction over the case and petitioners’ motion to dismiss. June 16, 2011 Decision1 and September 13, 2011
apply the internal law of the forum; or (3) assume WHEREFORE, premises considered, the petition for Resolution2 of the Court of Appeals in CA-G.R. SP. No.
jurisdiction over the case and take into account or review on certiorari is DENIED. 113006.
apply the law of some other State or States.74 The SO ORDERED.
court’s power to hear cases and controversies is ANTONIO EDUARDO B. NACHURA Petitioner Saudi Arabian Airlines (Saudia) is a foreign
derived from the Constitution and the laws. While Associate Justice corporation established and existing under the laws of
Jeddah, Kingdom of Saudi Arabia. It has a Philippine (Loraine) on August 27, 1995.8 also personally informed by Abdulmalik on October 17,
office located at 4/F, Metro House Building, Sen. Gil J. 2006 after being required to report to the office by her
Puyat Avenue, Makati City.3 In its Petition filed with Respondents continued their employment with Saudia Group Supervisor.15 Loraine received a call on October
this court, Saudia identified itself as until they were separated from service on various 12, 2006 from her Group Supervisor, Dakila Salvador.16
follows:chanroblesvirtuallawlibrary dates in 2006.9
1. Petitioner SAUDIA is a foreign corporation Saudia anchored its disapproval of respondents'
established and existing under the Royal Decree No. Respondents contended that the termination of their maternity leaves and demand for their resignation on
M/24 of 18.07.1385H (10.02.1962G) in Jeddah, employment was illegal. They alleged that the its "Unified Employment Contract for Female Cabin
Kingdom of Saudi Arabia ("KSA"). Its Philippine Office is termination was made solely because they were Attendants" (Unified Contract).17 Under the Unified
located at 4/F Metro House Building, Sen, Gil J. Puyat pregnant.10 Contract, the employment of a Flight Attendant who
Avenue, Makati City (Philippine Office). It may be becomes pregnant is rendered void. It
served with orders of this Honorable Court through As respondents alleged, they had informed Saudia of provides:chanroblesvirtuallawlibrary
undersigned counsel at 4th and 6th Floors, Citibank their respective pregnancies and had gone through the (H) Due to the essential nature of the Air Hostess
Center Bldg., 8741 Paseo de Roxas, Makati City.4 necessary procedures to process their maternity functions to be physically fit on board to provide
(Emphasis supplied) leaves. Initially, Saudia had given its approval but later various services required in normal or emergency
Respondents (complainants before the Labor Arbiter) on informed respondents that its management in cases on both domestic/international flights beside
were recruited and hired by Saudia as Temporary Jeddah, Saudi Arabia had disapproved their maternity her role in maintaining continuous safety and security
Flight Attendants with the accreditation and approval leaves. In addition, it required respondents to file their of passengers, and since she will not be able to
of the Philippine Overseas Employment resignation letters.11 maintain the required medical fitness while at work in
5
Administration. After undergoing seminars required case of pregnancy, accordingly, if the Air Hostess
by the Philippine Overseas Employment Respondents were told that if they did not resign, becomes pregnant at any time during the term of this
Administration for deployment overseas, as well as Saudia would terminate them all the same. The threat contract, this shall render her employment contract
training modules offered by Saudia (e.g., initial flight of termination entailed the loss of benefits, such as as void and she will be terminated due to lack of
attendant/training course and transition training), and separation pay and ticket discount entitlements.12 medical fitness.18 (Emphasis supplied)
after working as Temporary Flight Attendants, In their Comment on the present Petition,19
respondents became Permanent Flight Attendants. Specifically, Ma. Jopette received a call on October 16, respondents emphasized that the Unified Contract
They then entered into Cabin Attendant contracts with 2006 from Saudia's Base Manager, Abdulmalik Saddik took effect on September 23, 2006 (the first day of
Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on (Abdulmalik).13 Montassah was informed personally by Ramadan),20 well after they had filed and had their
May 16, 1990;6 Montassah B. Sacar-Adiong Abdulmalik and a certain Faisal Hussein on October 20, maternity leaves approved. Ma. Jopette filed her
(Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth) 2006 after being required to report to the office one maternity leave application on September 5, 2006.21
on May 22, 1993;7 and Loraine Schneider-Cruz (1) month into her maternity leave.14 Rouen Ruth was Montassah filed her maternity leave application on
August 29, 2006, and its approval was already for underpayment of salary, overtime pay, premium conveniens, it noted that there were no special
indicated in Saudia's computer system by August 30, pay for holiday, rest day, premium, service incentive circumstances that warranted its abstention from
2006.22 Rouen Ruth filed her maternity leave leave pay, 13th month pay, separation pay, night shift exercising jurisdiction.35 On the issue of whether
application on September 13, 2006,23 and Loraine filed differentials, medical expense reimbursements, respondents were validly dismissed, it held that there
her maternity leave application on August 22, 2006.24 retirement benefits, illegal deduction, lay-over was nothing on record to support Saudia's claim that
expense and allowances, moral and exemplary respondents resigned voluntarily.
Rather than comply and tender resignation letters, damages, and attorney's fees.28 The case was initially
respondents filed separate appeal letters that were all assigned to Labor Arbiter Hermino V. Suelo and The dispositive portion of the November 19, 2009
rejected.25 docketed as NLRC NCR Case No. 00-11-12342-07. National Labor Relations Commission Decision36
reads:chanroblesvirtuallawlibrary
Despite these initial rejections, respondents each Saudia assailed the jurisdiction of the Labor Arbiter.29 WHEREFORE, premises considered, judgment is
received calls on the morning of November 6, 2006 It claimed that all the determining points of contact hereby rendered finding the appeal impressed with
from Saudia's office secretary informing them that referred to foreign law and insisted that the Complaint merit. The respondents-appellees are hereby directed
their maternity leaves had been approved. Saudia, ought to be dismissed on the ground of forum non to pay complainants-appellants the aggregate amount
however, was quick to renege on its approval. On the conveniens.30 It added that respondents had no cause of SR614,001.24 corresponding to their backwages
evening of November 6, 2006, respondents again of action as they resigned voluntarily.31 and separation pay plus ten (10%) percent thereof as
received calls informing them that it had received attorney's fees. The decision of the Labor Arbiter dated
notification from Jeddah, Saudi Arabia that their On December 12, 2008, Executive Labor Arbiter Fatima December 12, 2008 is hereby VACATED and SET ASIDE.
maternity leaves had been disapproved.26 Jambaro-Franco rendered the Decision32 dismissing Attached is the computation prepared by this
respondents' Complaint. The dispositive portion of this Commission and made an integral part of this
Faced with the dilemma of resigning or totally losing Decision reads:chanroblesvirtuallawlibrary Decision.37cralawlawlibrary
their benefits, respondents executed handwritten WHEREFORE, premises' considered, judgment is In the Resolution dated February 11, 2010,38 the
resignation letters. In Montassah's and Rouen Ruth's hereby rendered DISMISSING the instant complaint National Labor Relations Commission denied
cases, their resignations were executed on Saudia's for lack of jurisdiction/merit.33cralawlawlibrary petitioners' Motion for Reconsideration.
blank letterheads that Saudia had provided. These On respondents' appeal, the National Labor Relations
letterheads already had the word "RESIGNATION" Commission's Sixth Division reversed the ruling of In the June 16, 2011 Decision,39 the Court of Appeals
typed on the subject portions of their headings when Executive Labor Arbiter Jambaro-Franco. It explained denied petitioners' Rule 65 Petition and modified the
these were handed to respondents.27 that "[considering that complainants-appellants are Decision of the National Labor Relations Commission
OFWs, the Labor Arbiters and the NLRC has [sic] with respect to the award of separation pay and
On November 8, 2007, respondents filed a Complaint jurisdiction to hear and decide their complaint for backwages.
against Saudia and its officers for illegal dismissal and illegal termination."34 On the matter of forum non
The dispositive portion of the Court of Appeals Relations Commission may exercise jurisdiction over
Decision reads:chanroblesvirtuallawlibrary Saudi Arabian Airlines and apply Philippine law in Lastly, it was with "Saudia Jeddah" that respondents
WHEREFORE, the instant petition is hereby DENIED. adjudicating the present dispute; filed their resignations.44
The Decision dated November 19, 2009 issued by
public respondent, Sixth Division of the National Labor Second, whether respondents' voluntarily resigned or Saudia posits that respondents' Complaint was
Relations Commission - National Capital Region is were illegally terminated; and brought against the wrong party because "Saudia
MODIFIED only insofar as the computation of the Manila," upon which summons was served, was never
award of separation pay and backwages. For greater Lastly, whether Brenda J. Betia may be held personally the employer of respondents.45
clarity, petitioners are ordered to pay private liable along with Saudi Arabian
respondents separation pay which shall be computed Airlines.chanRoblesvirtualLawlibrary Saudia is vainly splitting hairs in its effort to absolve
from private respondents' first day of employment up I itself of liability. Other than its bare allegation, there is
to the finality of this decision, at the rate of one month no basis for concluding that "Saudia Jeddah" is distinct
per year of service and backwages which shall be Summons were validly served on Saudia and from "Saudia Manila."
computed from the date the private respondents were jurisdiction over it validly acquired.
illegally terminated until finality of this decision. What is clear is Saudia's statement in its own Petition
Consequently, the ten percent (10%) attorney's fees There is no doubt that the pleadings and summons that what it has is a "Philippine Office . . . located at 4/F
shall be based on the total amount of the award. The were served on Saudia through its counsel.42 Saudia, Metro House Building, Sen. Gil J. Puyat Avenue, Makati
assailed Decision is affirmed in all other respects. however, claims that the Labor Arbiter and the City."46 Even in the position paper that Saudia
National Labor Relations Commission had no submitted to the Labor Arbiter,47 what Saudia now
The labor arbiter is hereby DIRECTED to make a jurisdiction over it because summons were never refers to as "Saudia Jeddah" was then only referred to
recomputation based on the served on it but on "Saudia Manila."43 Referring to as "Saudia Head Office at Jeddah, KSA,"48 while what
foregoing.40cralawlawlibrary itself as "Saudia Jeddah," it claims that "Saudia Jeddah" Saudia now refers to as "Saudia Manila" was then only
In the Resolution dated September 13, 2011,41 the and not "Saudia Manila" was the employer of referred to as "Saudia's office in Manila."49
Court of Appeals denied petitioners' Motion for respondents because:
Reconsideration. By its own admission, Saudia, while a foreign
First, "Saudia Manila" was never a party to the Cabin corporation, has a Philippine office.
Hence, this Appeal was filed. Attendant contracts entered into by respondents;
Section 3(d) of Republic Act No.. 7042, otherwise
The issues for resolution are the following: Second, it was "Saudia Jeddah" that provided the known as the Foreign Investments Act of 1991,
funds to pay for respondents' salaries and benefits; provides the following:chanroblesvirtuallawlibrary
First, whether the Labor Arbiter and the National Labor and
The phrase "doing business" shall include . . . opening principle of forum non conveniens, thereby rendering not subsumed by, the second of these.
offices, whether called "liaison" offices or branches; . improper the exercise of jurisdiction by Philippine
. . and any other act or acts that imply a continuity of tribunals.51 Likewise, contractual choice of law is not
commercial dealings or arrangements and determinative of jurisdiction. Stipulating on the laws of
contemplate to that extent the performance of acts or A choice of law governing the validity of contracts or a given jurisdiction as the governing law of a contract
works, or the exercise of some of the functions the interpretation of its provisions dees not necessarily does not preclude the exercise of jurisdiction by
normally incident to, and in progressive prosecution of imply forum non conveniens. Choice of law and forum tribunals elsewhere. The reverse is equally true: The
commercial gain or of the purpose and object of the non conveniens are entirely different matters. assumption of jurisdiction by tribunals does not ipso
business organization. (Emphasis supplied) facto mean that it cannot apply and rule on the basis
A plain application of Section 3(d) of the Foreign Choice of law provisions are an offshoot of the of the parties' stipulation. In Hasegawa v.
Investments Act leads to no other conclusion than that fundamental principle of autonomy of contracts. Kitamura:52ChanRoblesVirtualawlibrary
Saudia is a foreign corporation doing business in the Article 1306 of the Civil Code firmly ensconces Analytically, jurisdiction and choice of law are two
Philippines. As such, Saudia may be sued in the this:chanroblesvirtuallawlibrary distinct concepts. Jurisdiction considers whether it is
Philippines and is subject to the jurisdiction of Article 1306. The contracting parties may establish fair to cause a defendant to travel to this state; choice
Philippine tribunals. such stipulations, clauses, terms and conditions as of law asks the further question whether the
they may deem convenient, provided they are not application of a substantive law V'hich will determine
Moreover, since there is no real distinction between contrary to law, morals, good customs, public order, or the merits of the case is fair to both parties. The power
"Saudia Jeddah" and "Saudia Manila" — the latter public policy. to exercise jurisdiction does not automatically give a
being nothing more than Saudia's local office — In contrast, forum non conveniens is a device akin to state constitutional authority to apply forum law.
service of summons to Saudia's office in Manila the rule against forum shopping. It is designed to While jurisdiction and the choice of the lex fori will
sufficed to vest jurisdiction over Saudia's person in frustrate illicit means for securing advantages and often, coincide, the "minimum contacts" for one do
Philippine tribunals.chanRoblesvirtualLawlibrary vexing litigants that would otherwise be possible if the not always provide the necessary "significant
II venue of litigation (or dispute resolution) were left contacts" for the other. The question of whether the
entirely to the whim of either party. law of a state can be applied to a transaction is
Saudia asserts that Philippine courts and/or tribunals different from the question of whether the courts of
are not in a position to make an intelligent decision as Contractual choice of law provisions factor into that state have jurisdiction to enter a
to the law and the facts. This is because respondents' transnational litigation and dispute resolution in one judgment.53cralawlawlibrary
Cabin Attendant contracts require the application of of or in a combination of four ways: (1) procedures for As various dealings, commercial or otherwise, are
the laws of Saudi Arabia, rather than those of the settling disputes, e.g., arbitration; (2) forum, i.e., facilitated by the progressive ease of communication
Philippines.50 It claims that the difficulty of venue; (3) governing law; and (4) basis for and travel, persons from various jurisdictions find
ascertaining foreign law calls into operation the interpretation. Forum non conveniens relates to, but is themselves transacting with each other. Contracts
involving foreign elements are, however, nothing new. settling conflict of laws situations on matters selected may be implied from such factors as
Conflict of laws situations precipitated by disputes and pertaining to substantive content of contracts. It has substantial connection with the transaction, or the
litigation anchored on these contracts are not totally been noted that three (3) modes have emerged: (1) lex nationality or domicile of the parties. Philippine courts
novel. loci contractus or the law of the place of the making; would do well to adopt the first and most basic rule in
(2) lex loci solutionis or the law of the place of most legal systems, namely, to allow the parties to
Transnational transactions entail differing laws on the performance; and (3) lex loci intentionis or the law select the law applicable to their contract, subject to
requirements Q for the validity of the formalities and intended by the parties.56 the limitation that it is not against the law, morals, or
substantive provisions of contracts and their public policy of the forum and that the chosen law must
interpretation. These transactions inevitably lend Given Saudia's assertions, of particular relevance to bear a substantive relationship to the transaction.59
themselves to the possibility of various fora for resolving the present dispute is lex loci intentionis. (Emphasis in the original)
litigation and dispute resolution. As observed by an Saudia asserts that stipulations set in the Cabin
eminent expert on transnational An author observed that Spanish jurists and Attendant contracts require the application of the laws
law:chanroblesvirtuallawlibrary commentators "favor lex loci intentionis."57 These of Saudi Arabia. It insists that the need to comply with
The more jurisdictions having an interest in, or merely jurists and commentators proceed from the Civil Code these stipulations calls into operation the doctrine of
even a point of contact with, a transaction or of Spain, which, like our Civil Code, is silent on what forum non conveniens and, in turn, makes it necessary
relationship, the greater the number of potential fora governs the intrinsic validity of contracts, and the for Philippine tribunals to refrain from exercising
for the resolution of disputes arising out of or related same civil law traditions from which we draw ours. jurisdiction.
to that transaction or relationship. In a world of
increased mobility, where business and personal In this jurisdiction, this court, in Philippine Export and As mentioned, contractual choice of laws factors into
transactions transcend national boundaries, the Foreign Loan Guarantee v. V.P. Eusebio Construction, transnational litigation in any or a combination of four
jurisdiction of a number of different fora may easily be Inc.,58 manifested preference for allowing the parties (4) ways. Moreover, forum non conveniens relates to
invoked in a single or a set of related to select the law applicable to their one of these: choosing between multiple possible fora.
disputes.54cralawlawlibrary contract":chanroblesvirtuallawlibrary
Philippine law is definite as to what governs the formal No conflicts rule on essential validity of contracts is Nevertheless, the possibility of parallel litigation in
or extrinsic validity of contracts. The first paragraph of expressly provided for in our laws. The rule followed multiple fora — along with the host of difficulties it
Article 17 of the Civil Code provides that "[t]he forms by most legal systems, however, is that the intrinsic poses — is not unique to transnational litigation. It is a
and solemnities of contracts . . . shall be governed by validity of a contract must be governed by the lex difficulty that similarly arises in disputes well within
the laws of the country in which they are executed"55 contractus or "proper law of the contract." This is the the bounds of a singe jurisdiction.
(i.e., lex loci celebrationis). law voluntarily agreed upon by the parties (the lex loci
voluntatis) or the law intended by them either When parallel litigation arises strictly within the
In contrast, there is no statutorily established mode of expressly or implicitly (the lex loci intentionis). The law context of a single jurisdiction, such rules as those on
forum shopping, litis pendentia, and res judicata come conveniens addresses the same rationale that the rule Forum non conveniens prevents the embarrassment of
into operation. Thus, in the Philippines, the 1997 Rules against forum shopping does, albeit on a an awkward situation where a tribunal is rendered
on Civil Procedure provide for willful and deliberate multijurisdictional scale. incompetent in the face of the greater capability —
forum shopping as a ground not only for summary both analytical and practical — of a tribunal in another
dismissal with prejudice but also for citing parties and Forum non conveniens, like res judicata,64 is a concept jurisdiction.
counsels in direct contempt, as well as for the originating in common law.65 However, unlike the rule
imposition of administrative sanctions.60 Likewise, the on res judicata, as well as those on litis pendentia and The wisdom of avoiding conflicting and unenforceable
same rules expressly provide that a party may seek the forum shopping, forum non conveniens finds no judgments is as much a matter of efficiency and
dismissal of a Complaint or another pleading asserting textual anchor, whether in statute or in procedural economy as it is a matter of international courtesy. A
a claim on the ground "[t]hat there is another action rules, in our civil law system. Nevertheless, court would effectively be neutering itself if it insists
pending between the same parties for the same jurisprudence has applied forum non conveniens as on adjudicating a controversy when it knows full well
cause," i.e., litis pendentia, or "[t]hat the cause of basis for a court to decline its exercise of jurisdiction.66 that it is in no position to enforce its judgment. Doing
action is barred by a prior judgment,"61 i.e., res so is not only an exercise in futility; it is an act of
judicata. Forum non conveniens is soundly applied not only to frivolity. It clogs the dockets of a.tribunal and leaves it
address parallel litigation and undermine a litigant's to waste its efforts on affairs, which, given
Forum non conveniens, like the rules of forum capacity to vex and secure undue advantages by transnational exigencies, will be reduced to mere
shopping, litis pendentia, and res judicata, is a means engaging in forum shopping on an international scale. academic, if not trivial, exercises.
of addressing the problem of parallel litigation. While It is also grounded on principles of comity and judicial
the rules of forum shopping, litis pendentia, and res efficiency. Accordingly, under the doctrine of forum non
judicata are designed to address the problem of conveniens, "a court, in conflicts of law cases, may
parallel litigation within a single jurisdiction, forum non Consistent with the principle of comity, a tribunal's refuse impositions on its jurisdiction where it is not the
conveniens is a means devised to address parallel desistance in exercising jurisdiction on account of most 'convenient' or available forum and the parties
litigation arising in multiple jurisdictions. forum non conveniens is a deferential gesture to the are not precluded from seeking remedies
tribunals of another sovereign. It is a measure that elsewhere."67 In Puyat v. Zabarte,68 this court
Forum non conveniens literally translates to "the prevents the former's having to interfere in affairs recognized the following situations as among those
forum is inconvenient."62 It is a concept in private which are better and more competently addressed by that may warrant a court's desistance from exercising
international law and was devised to combat the "less the latter. Further, forum non conveniens entails a jurisdiction:chanroblesvirtuallawlibrary
than honorable" reasons and excuses that litigants use recognition not only that tribunals elsewhere are 1) The belief that the matter can be better tried and
to secure procedural advantages, annoy and harass better suited to rule on and resolve a controversy, but decided elsewhere, either because the main aspects
defendants, avoid overcrowded dockets, and select a also, that these tribunals are better positioned to of the case transpired in a foreign jurisdiction or the
"friendlier" venue.63 Thus, the doctrine of forum non enforce judgments and, ultimately, to dispense justice. material witnesses have their residence there;
2) The belief that the non-resident plaintiff sought the forum non conveniens is contingent on a factual proceed from & factually established basis. It would be
forum[,] a practice known as forum shopping[,] determination, it is, therefore, a matter of defense.74 improper to dismiss an action pursuant to forum non
merely to secure procedural advantages or to conveniens based merely on a perceived, likely, or
convey or harass the defendant; The second sentence of Rule 9, Section 1 of the 1997 hypothetical multiplicity of fora. Thus, a defendant
3) The unwillingness to extend local judicial facilities to Rules of Civil Procedure is exclusive in its recital of the must also plead and show that a prior suit has, in fact,
non residents or aliens when the docket may grounds for dismissal that are exempt from the been brought in another jurisdiction.
already be overcrowded; omnibus motion rule: (1) lack of jurisdiction over the
4) The inadequacy of the local judicial machinery for subject matter; (2) litis pendentia; (3) res judicata; and The existence of a prior suit makes real the vexation
effectuating the right sought to be maintained; and (4) prescription. Moreover, dismissal on account engendered by duplicitous litigation, the
5) The difficulty of ascertaining foreign law.69 offorum non conveniens is a fundamentally embarrassment of intruding into the affairs of another
In Bank of America, NT&SA, Bank of America discretionary matter. It is, therefore, not a matter for sovereign, and the squandering of judicial efforts in
International, Ltd. v. Court of Appeals,70 this court a defendant to foist upon the court at his or her own resolving a dispute already lodged and better resolved
underscored that a Philippine court may properly convenience; rather, it must be pleaded at the earliest elsewhere. As has been
assume jurisdiction over a case if it chooses to do so to possible opportunity. noted:chanroblesvirtuallawlibrary
the extent: "(1) that the Philippine Court is one to A case will not be stayed o dismissed on [forum] non
which the parties may conveniently resort to; (2) that On the matter of pleading forum non conveniens, we conveniens grounds unless the plaintiff is shown to
the Philippine Court is in a position to make an state the rule, thus: Forum non conveniens must not have an available alternative forum elsewhere. On
intelligent decision as to the law and the facts; and (3) only be clearly pleaded as a ground for dismissal; it this, the moving party bears the burden of proof.
that the Philippine Court has or is likely to have power must be pleaded as such at the earliest possible
to enforce its decision."71 opportunity. Otherwise, it shall be deemed waived. A number of factors affect the assessment of an
alternative forum's adequacy. The statute of
The use of the word "may" (i.e., "may refuse This court notes that in Hasegawa,76 this court stated limitations abroad may have run, of the foreign court
impositions on its jurisdiction"72) in the decisions that forum non conveniens is not a ground for a motion may lack either subject matter or personal jurisdiction
shows that the matter of jurisdiction rests on the to dismiss. The factual ambience of this case however over the defendant. . . . Occasionally, doubts will be
sound discretion of a court. Neither the mere does not squarely raise the viability of this doctrine. raised as to the integrity or impartiality of the foreign
invocation of forum non conveniens nor the averment Until the opportunity comes to review the use of court (based, for example, on suspicions of corruption
of foreign elements operates to automatically divest a motions to dismiss for parallel litigation, Hasegawa or bias in favor of local nationals), as to the fairness of
court of jurisdiction. Rather, a court should renounce remains existing doctrine. its judicial procedures, or as to is operational efficiency
jurisdiction only "after 'vital facts are established, to (due, for example, to lack of resources, congestion and
determine whether special circumstances' require the Consistent with forum non conveniens as delay, or interfering circumstances such as a civil
court's desistance."73 As the propriety of applying fundamentally a factual matter, it is imperative that it unrest). In one noted case, [it was found] that delays
of 'up to a quarter of a century' rendered the foreign applicability of forum non conveniens on the incidental balance of interests inhering in a dispute: first, the
forum... inadequate for these matter of the law governing respondents' relation with vinculum which the parties and their relation have to
77
purposes. cralawlawlibrary Saudia leads to the conclusion that it is improper for a given jurisdiction; and second, the public interest
We deem it more appropriate and in the greater Philippine tribunals to divest themselves of that must animate a tribunal, in its capacity as an agent
interest of prudence that a defendant not only allege jurisdiction. of the sovereign, in choosing to assume or decline
supposed dangerous tendencies in litigating in this jurisdiction. The first is more concerned with the
jurisdiction; the defendant must also show that such Any evaluation of the propriety of contracting parties' parties, their personal circumstances, and private
danger is real and present in that litigation or dispute choice of a forum and'its incidents must grapple with interests; the second concerns itself with the state and
resolution has commenced in another jurisdiction and two (2) considerations: first, the availability and the greater social order.
that a foreign tribunal has chosen to exercise adequacy of recourse to a foreign tribunal; and second,
jurisdiction. the question of where, as between the forum court and In considering the vinculum, a court must look into the
III a foreign court, the balance of interests inhering in a preponderance of linkages which the parties and their
dispute weighs more heavily. transaction may have to either jurisdiction. In this
Forum non conveniens finds no application and does respect, factors, such as the parties' respective
not operate to divest Philippine tribunals of The first is a pragmatic matter. It relates to the viability nationalities and places of negotiation, execution,
jurisdiction and to require the application of foreign of ceding jurisdiction to a foreign tribunal and can be performance, engagement or deployment, come into
law. resolved by juxtaposing the competencies and play.
practical circumstances of the tribunals in alternative
Saudia invokes forum non conveniens to supposedly fora. Exigencies, like the statute of limitations, capacity In considering public interest, a court proceeds with a
effectuate the stipulations of the Cabin Attendant to enforce orders and judgments, access to records, consciousness that it is an organ of the state. It must,
contracts that require the application of the laws of requirements for the acquisition of jurisdiction, and thus, determine if the interests of the sovereign (which
Saudi Arabia. even questions relating to the integrity of foreign acts through it) are outweighed by those of the
courts, may render undesirable or even totally alternative jurisdiction. In this respect, the court
Forum non conveniens relates to forum, not to the unfeasible recourse to a foreign court. As mentioned, delves into a consideration of public policy. Should it
choice of governing law. Thai forum non conveniens we consider it in the greater interest of prudence that find that public interest weighs more heavily in favor
may ultimately result in the application of foreign law a defendant show, in pleading forum non conveniens, of its assumption of jurisdiction, it should proceed in
is merely an incident of its application. In this strict that litigation has commenced in another jurisdiction adjudicating the dispute, any doubt or .contrary view
sense, forum non conveniens is not applicable. It is not and that a foieign tribunal has, in fact, chosen to arising from the preponderance of linkages
the primarily pivotal consideration in this case. exercise jurisdiction. notwithstanding.

In any case, even a further consideration of the Two (2) factors weigh into a court's appraisal of the Our law on contracts recognizes the validity of
contractual choice of law provisions. Where such Article II, Section 14 of the 1987 Constitution provides rights and fundamental freedoms in the political,
provisions exist, Philippine tribunals, acting as the that "[t]he State ... shall ensure the fundamental economic, social, cultural, civil or any other
forum court, generally defer to the parties' articulated equality before the law of women and men." field.82cralawlawlibrary
choice. Contrasted with Article II, Section 1 of the 1987 The constitutional exhortation to ensure fundamental
Constitution's statement that "[n]o person shall ... be equality, as illumined by its enabling law, the CEDAW,
This is consistent with the fundamental principle of denied the equal protection of the laws," Article II, must inform and animate all the actions of all
autonomy of contracts. Article 1306 of the Civ:l Code Section 14 exhorts the State to "ensure." This does not personalities acting on behalf of the State. It is,
expressly provides that "[t]he contracting parties may only mean that the Philippines shall not countenance therefore, the bounden duty of this court, in rendering
establish 'such stipulations, clauses, terms and nor lend legal recognition and approbation to judgment on the disputes brought before it, to ensure
conditions as they may deem convenient."78 measures that discriminate on the basis of one's being that no discrimination is heaped upon women on the
Nevertheless, while a Philippine tribunal (acting as the male or female. It imposes an obligation to actively mere basis of their being women. This is a point so
forum court) is called upon to respect the parties' engage in securing the fundamental equality of men basic and central that all our discussions and
choice of governing law, such respect must not be so and women. pronouncements — regardless of whatever averments
permissive as to lose sight of considerations of law, there may be of foreign law — must proceed from this
morals, good customs, public order, or public policy The Convention on the Elimination of all Forms of premise.
that underlie the contract central to the controversy. Discrimination against Women (CEDAW), signed and
ratified by the Philippines on July 15, 1980, and on So informed and animated, we emphasize the glaringly
Specifically with respect to public policy, in Pakistan August 5, 1981, respectively,81 is part of the law of the discriminatory nature of Saudia's policy. As argued by
International Airlines Corporation v. Ople,79 this court land. In view of the widespread signing and ratification respondents, Saudia's policy entails the termination of
explained that:chanroblesvirtuallawlibrary of, as well as adherence (in practice) to it by states, it employment of flight attendants who become
counter-balancing the principle of autonomy of may even be said that many provisions of the CEDAW pregnant. At the risk of stating the obvious, pregnancy
contracting parties is the equally general rule that may have become customary international law. The is an occurrence that pertains specifically to women.
provisions of applicable law, especially provisions CEDAW gives effect to the Constitution's policy Saudia's policy excludes from and restricts
relating to matters affected with public policy, are statement in Article II, Section 14. Article I of the employment on the basis of no other consideration
deemed written inta the contract. Put a little CEDAW defines "discrimination against women" but sex.
differently, the governing principle is that parties may as:chanroblesvirtuallawlibrary
not contract away applicable provisions of law any distinction, exclusion or restriction made on the We do not lose sight of the reality that pregnancy does
especially peremptory provisions dealing with matters basis of sex which has the effect or purpose of present physical limitations that may render difficult
heavily impressed with public interest.80 (Emphasis impairing or nullifying the recognition, enjoyment or the performance of functions associated with being a
supplied) exercise by women, irrespective of their marital status, flight attendant. Nevertheless, it would be the height
on a basis of equality of men and women, of human of iniquity to view pregnancy as a disability so
permanent and immutable that, it must entail the petitioner PIA and private respondents. We have that was the object of the transaction subject of the
termination of one's employment. It is clear to us that already pointed out that the relationship is much litigation. Thus, this court held, among others, that the
any individual, regardless of gender, may be subject to affected with public interest and that the otherwise trial court's refusal to assume jurisdiction was not
exigencies that limit the performance of functions. applicable Philippine laws and regulations cannot be justified by forum non conveniens and remanded the
However, we fail to appreciate how pregnancy could rendered illusory by the parties agreeing upon some case to the trial court.
be such an impairing occurrence that it leaves no other other law to govern their relationship. . . . Under these
recourse but the complete termination of the means circumstances, paragraph 10 of the employment In Raytheon International, Inc. v. Rouzie, Jr.,86 this
through which a woman earns a living. agreement cannot be given effect so as to oust court sustained the trial court's assumption of
Philippine agencies and courts of the jurisdiction jurisdiction considering that the trial court could
Apart from the constitutional policy on the vested upon them by Philippine law.84 (Emphasis properly enforce judgment on the petitioner which
fundamental equality before the law of men and supplied) was a foreign corporation licensed to do business in
women, it is settled that contracts relating to labor and As the present dispute relates to (what the the Philippines.
employment are impressed with public interest. respondents allege to be) the illegal termination of
Article 1700 of the Civil Code provides that "[t]he respondents' employment, this case is immutably a In Pioneer International, Ltd. v. Guadiz, Jr.,87 this court
relation between capital and labor are not merely matter of public interest and public policy. Consistent found no reason to disturb the trial court's assumption
contractual. They are so impressed with public interest with clear pronouncements in law and jurisprudence, of jurisdiction over a case in which, as noted by the trial
that labor contracts must yield to the common good." Philippine laws properly find application in and govern court, "it is more convenient to hear and decide the
this case. 'Moreover, as this premise for Saudia's case in the Philippines because Todaro [the plaintiff]
Consistent with this, this court's pronouncements in insistence on the application forum non conveniens resides in the Philippines and the contract allegedly
Pakistan International Airlines Corporation 83 are clear has been shattered, it follows that Philippine tribunals breached involve[d] employment in the Philippines."88
and unmistakable:chanroblesvirtuallawlibrary may properly assume jurisdiction over the present
Petitioner PIA cannot take refuge in paragraph 10 of its controversy. Philippine jurisprudence provides ample In Pacific Consultants International Asia, Inc. v.
employment agreement which specifies, firstly, the illustrations of when a court's renunciation of Schonfeld,89 this court held that the fact that the
law of Pakistan as the applicable law of the agreement, jurisdiction on account of forum non conveniens is complainant in an illegal dismissal case was a Canadian
and, secondly, lays the venue for settlement of any proper or improper.' citizen and a repatriate did not warrant the application
dispute arising out of or in connection with the of forum non conveniens considering that: (1) the
agreement "only [in] courts of Karachi, Pakistan". The In Philsec Investment Corporation v. Court of Labor Code does not include forum non conveniens as
first clause of paragraph 10 cannot be invoked to Appeals,85 this court noted that the trial court failed to a ground for the dismissal of a complaint for illegal
prevent the application of Philippine labor laws consider that one of the plaintiffs was a domestic dismissal; (2) the propriety of dismissing a case based
and'regulations to the subject matter of this case, i.e., corporation, that one of the defendants was a Filipino, on forum non conveniens requires a factual
the employer-employee relationship between and that it was the extinguishment of the latter's debt determination; and (3) the requisites for assumption
of jurisdiction as laid out in Bank of America, NT&SA90 main witnesses were not residents of the Philippines. Second, the records are bereft of any indication that
were all satisfied. Likewise, this court noted that the National Labor respondents filed their Complaint in an effort to
Relations Commission was in no position to conduct engage in forum shopping or to vex and inconvenience
In contrast, this court ruled in The Manila Hotel Corp. the following: first, determine the law governing the Saudia.
v. National Labor Relations Commission91 that the employment contract, as it was entered into in foreign
National Labor Relations Q Commission was a seriously soil; second, determine the facts, as Santos' Third, there is no indication of "unwillingness to
inconvenient forum. In that case, private respondent employment was terminated in Beijing; and third, extend local judicial facilities to non-residents or
Marcelo G. Santos was working in the Sultanate of enforce its judgment, since Santos' employer, Palace aliens."93 That Saudia has managed to bring the
Oman when he received a letter from Palace Hotel Hotel, was incorporated under the laws of China and present controversy all the way to this court proves
recruiting him for employment in Beijing, China. was not even served with summons. this.
Santos accepted the offer. Subsequently, however, he
was released from employment supposedly due to Contrary to Manila Hotel, the case now before us does Fourth, it cannot be said that the local judicial
business reverses arising from political upheavals in not entail a preponderance of linkages that favor a machinery is inadequate for effectuating the right
China (i.e., the Tiananmen Square incidents of 1989). foreign jurisdiction. sought to be maintained. Summons was properly
Santos later filed a Complaint for illegal dismissal served on Saudia and jurisdiction over its person was
impleading Palace Hotel's General Manager, Mr. Here, the circumstances of the parties and their validly acquired.
Gerhard Schmidt, the Manila Hotel International relation do not approximate the circumstances
Company Ltd. (which was, responsible for training enumerated in Puyat,92 which this court recognized as Lastly, there is not even room for considering foreign
Palace Hotel's personnel and staff), and the Manila possibly justifying the desistance of Philippine law. Philippine law properly governs the present
Hotel Corporation (which owned 50% of Manila Hotel tribunals from exercising jurisdiction. dispute.
International Company Ltd.'s capital stock).
First, there is no basis for concluding that the case can As the question of applicable law has been settled, the
In ruling against the National Labor Relations be more conveniently tried elsewhere. As established supposed difficulty of ascertaining foreign law (which
Commission's exercise of jurisdiction, this court noted earlier, Saudia is doing business in the Philippines. For requires the application of forum non conveniens)
that the main aspects of the case transpired in two (2) their part, all four (4) respondents are Filipino citizens provides no insurmountable inconvenience or special
foreign jurisdictions, Oman and China, and that the maintaining residence in the Philippines and, apart circumstance that will justify depriving Philippine
case involved purely foreign elements. Specifically, from their previous employment with Saudia, have no tribunals of jurisdiction.
Santos was directly hired by a foreign employer other connection to the Kingdom of Saudi Arabia. It
through correspondence sent to Oman. Also, the would even be to respondents' inconvenience if this Even if we were to assume, for the sake of discussion,
proper defendants were neither Philippine nationals case were to be tried elsewhere. that it is the laws of Saudi Arabia which should apply,
nor engaged in business in the Philippines, while the it does not follow that Philippine tribunals should
refrain from exercising jurisdiction. To. recall our Kingdom of Saudi Arabia, Royal Decree No. must be the result of an employee's exercise of his or
pronouncements in Puyat,94 as well as in Bank of M/51.)99cralawlawlibrary her own will.
America, NT&SA,95 it is not so much the mere All told, the considerations for assumption of
applicability of foreign law which calls into operation jurisdiction by Philippine tribunals as outlined in Bank In the same case of Bilbao, this court advanced a
forum non conveniens. Rather, what justifies a court's of America, NT&SA100 have been satisfied. First, all the means for determining whether an employee resigned
desistance from exercising jurisdiction is "[t]he parties are based in the Philippines and all the material voluntarily:chanroblesvirtuallawlibrary
difficulty of ascertaining foreign law"96 or the inability incidents transpired in this jurisdiction. Thus, the As the intent to relinquish must concur with the overt
of a "Philippine Court to make an intelligent decision parties may conveniently seek relief from Philippine act of relinquishment, the acts of the employee before
as to the law[.]"97 tribunals. Second, Philippine tribunals are in a position and after the alleged resignation must be considered in
to make an intelligent decision as to the law and the determining whether he or she, in fact, intended, to
Consistent with lex loci intentionis, to the extent that it facts. Third, Philippine tribunals are in a position to sever his or her employment.103 (Emphasis supplied)
is proper and practicable (i.e., "to make an intelligent enforce their decisions. There is no compelling basis On the other hand, constructive dismissal has been
decision"98), Philippine tribunals may apply the foreign for ceding jurisdiction to a foreign tribunal. Quite the defined as "cessation of work because 'continued
law selected by the parties. In fact, (albeit without contrary, the immense public policy considerations employment is rendered impossible, unreasonable or
meaning to make a pronouncement on the accuracy attendant to this case behoove Philippine tribunals to unlikely, as an offer involving a demotion in rank or a
and reliability of respondents' citation) in this case, not shy away from their duty to rule on the diminution in pay' and other benefits."104
respondents themselves have made averments as to case.chanRoblesvirtualLawlibrary
the laws of Saudi Arabia. In their Comment, IV In Penaflor v. Outdoor Clothing Manufacturing
respondents write:chanroblesvirtuallawlibrary Corporation,105 constructive dismissal has been
Under the Labor Laws of Saudi Arabia and the Respondents were illegally terminated. described as tantamount to "involuntarily [sic]
Philippines[,] it is illegal and unlawful to terminate the resignation due to the harsh, hostile, and unfavorable
employment of any woman by virtue of pregnancy. In Bilbao v. Saudi Arabian Airlines,101 this court defined conditions set by the employer."106 In the same case, it
The law in Saudi Arabia is even more harsh and strict voluntary resignation as "the voluntary act of an was noted that "[t]he gauge for constructive dismissal
[sic] in that no employer can terminate the employee who is in a situation where one believes that is whether a reasonable person in the employee's
employment of a female worker or give her a warning personal reasons cannot be sacrificed in favor of the position would feel compelled to give up his
of the same while on Maternity Leave, the specific exigency of the service, and one has no other choice employment under the prevailing circumstances."107
provision of Saudi Labor Laws on the matter is hereto but to dissociate oneself from employment. It is a
quoted as follows:chanroblesvirtuallawlibrary formal pronouncement or relinquishment of an office, Applying the cited standards on resignation and
"An employer may not terminate the employment of a with the intention of relinquishing the office constructive dismissal, it is clear that respondents
female worker or give her a warning of the same while accompanied by the act of relinquishment."102 Thus, were constructively dismissed. Hence, their
on maternity leave." (Article 155, Labor Law of the essential to the act of resignation is voluntariness. It termination was illegal.
 pregnant and threatened termination due to lack of Mere compliance with standard procedures or
The termination of respondents' employment medical fitness.112 The threat of termination (and the processes, such as the completion of their exit
happened when they were pregnant and expecting to forfeiture of benefits that it entailed) is enough to interviews, neither negates compulsion nor indicates
incur costs on account of child delivery and infant compel a reasonable person in respondents' position voluntariness.
rearing. As noted by the Court of Appeals, pregnancy to give up his or her employment.
is a time when they need employment to sustain their As with respondent's resignation letters, their exit
families.108 Indeed, it goes against normal and Saudia draws attention to how respondents' interview forms even support their claim of illegal
reasonable human behavior to abandon one's resignation letters were supposedly made in their own dismissal and militates against Saudia's arguments.
livelihood in a time of great financial need. handwriting. This minutia fails to surmount all the These exit interview forms, as reproduced by Saudia in
other indications negating any voluntariness on its own Petition, confirms the unfavorable conditions
It is clear that respondents intended to remain respondents' part. If at all, these same resignation as regards respondents' maternity leaves. Ma.
employed with Saudia. All they did was avail of their letters are proof of how any supposed resignation did Jopette's and Loraine's exit interview forms are
maternity leaves. Evidently, the very nature of a not arise from respondents' own initiative. As earlier particularly telling:chanroblesvirtuallawlibrary
maternity leave means that a pregnant employee will pointed out, respondents' resignations were executed a. From Ma. Jopette's exit interview form:
not report for work only temporarily and that she will on Saudia's blank letterheads that Saudia had
resume the performance of her duties as soon as the provided. These letterheads already had the word 3. In what respects has the job met or failed to meet
leave allowance expires. "RESIGNATION" typed on the subject portion of their your expectations?
respective headings when these were handed to THE SUDDEN TWIST OF DECISION REGARDING THE
It is also clear that respondents exerted all efforts to' respondents.113ChanRoblesVirtualawlibrary MATERNITY LEAVE.116
remain employed with Saudia. Each of them
repeatedly filed appeal letters (as much as five [5] "In termination cases, the burden of proving just or b. From Loraine's exit interview form:
letters in the case of Rebesencio109) asking Saudia to valid cause for dismissing an employee rests on the
reconsider the ultimatum that they resign or be employer."114 In this case, Saudia makes much of how 1. What are your main reasons for leaving Saudia?
terminated along with the forfeiture of their benefits. respondents supposedly completed their exit What company are you joining?
Some of them even went to Saudia's office to interviews, executed quitclaims, received their xxx xxx xxx
personally seek reconsideration.110 separation pay, and took more than a year to file their
Complaint.115 If at all, however, these circumstances Others
Respondents also adduced a copy of the "Unified prove only the fact of their occurrence, nothing more. CHANGING POLICIES REGARDING MATERNITY LEAVE
Employment Contract for Female Cabin The voluntariness of respondents' departure from (PREGNANCY)117
111
Attendants." This contract deemed void the Saudia is non sequitur. As to respondents' quitclaims, in Phil. Employ Services
employment of a flight attendant who becomes and Resources, Inc. v. Paramio,118 this court noted that
"[i]f (a) there is clear proof that the waiver was good"121 as against such discriminatory and callous to our statutes and policies on employees' security of
wangled from an unsuspecting or gullible person; or schemes, respondents are likewise entitled to tenure, but more so, to the Constitution's dictum of
(b) the terms of the settlement are unconscionable, exemplary damages. fundamental equality between men and women.129
and on their face invalid, such quitclaims must be
struck down as invalid or illegal."119 Respondents In a long line of cases, this court awarded exemplary The award of exemplary damages is, therefore,
executed their quitclaims after having been unfairly damages to illegally dismissed employees whose warranted, not only to remind employers of the need
given an ultimatum to resign or be terminated (and "dismissal[s were] effected in a wanton, oppressive or to adhere to the requirements of procedural and
forfeit their benefits).chanRoblesvirtualLawlibrary malevolent manner."122 This court has awarded substantive due process in termination of
V exemplary damages to employees who were employment, but more importantly, to demonstrate
terminated on such frivolous, arbitrary, and unjust that gender discrimination should in no case be
Having been illegally and unjustly dismissed, grounds as membership in or involvement with labor countenanced.
respondents are entitled to full backwages and unions,123 injuries sustained in the course of
benefits from the time of their termination until the employment,124 development of a medical condition Having been compelled to litigate to seek reliefs for
finality of this Decision. They are likewise entitled to due to the employer's own violation of the their illegal and unjust dismissal, respondents are
separation pay in the amount of one (1) month's salary employment contract,125 and lodging of a Complaint likewise entitled to attorney's fees in the amount of
for every year of service until the fmality of this against the employer.126 Exemplary damages were 10% of the total monetary award.130
Decision, with a fraction of a year of at least six (6) also awarded to employees who were deemed illegally VI
months being counted as one (1) whole year. dismissed by an employer in an attempt to evade
compliance with statutorily established employee Petitioner Brenda J. Betia may not be held liable.
Moreover, "[m]oral damages are awarded in benefits.127 Likewise, employees dismissed for
termination cases where the employee's dismissal was supposedly just causes, but in violation of due process A corporation has a personality separate and distinct
attended by bad faith, malice or fraud, or where it requirements, were awarded exemplary damages.128 from those of the persons composing it. Thus, as a rule,
constitutes an act oppressive to labor, or where it was corporate directors and officers are not liable for the
done in a manner contrary to morals, good customs or These examples pale in comparison to the present illegal termination of a corporation's employees. It is
public policy."120 In this case, Saudia terminated controversy. Stripped of all unnecessary complexities, only when they acted in bad faith or with malice that
respondents' employment in a manner that is patently respondents were dismissed for no other reason than they become solidarity liable with the corporation. 131
discriminatory and running afoul of the public interest simply that they were pregnant. This is as wanton,
that underlies employer-employee relationships. As oppressive, and tainted with bad faith as any reason In Ever Electrical Manufacturing, Inc. (EEMI) v.
such, respondents are entitled to moral damages. for termination of employment can be. This is no Samahang Manggagawa ng Ever Electrical,132 this
ordinary case of illegal dismissal. This is a case of court clarified that "[b]ad faith does not connote bad
To provide an "example or correction for the public manifest gender discrimination. It is an affront not only judgment or negligence; it imports a dishonest
purpose or some moral obliquity and conscious doing (4)Exemplary damages in the amount of P200,000.00 in Special Proceeding No. 622 of said court, dated
of wrong; it means breach of a known duty through per respondent; and September 14, 1949, approving among things the final
some motive or interest or ill will; it partakes of the (5)Attorney's fees equivalent to 10% of the total accounts of the executor, directing the executor to
nature of fraud."133 award. reimburse Maria Lucy Christensen the amount of
P3,600 paid by her to Helen Christensen Garcia as her
Respondents have not produced proof to show that Interest of 6% per annum shall likewise be imposed on legacy, and declaring Maria Lucy Christensen entitled
Brenda J. Betia acted in bad faith or with malice as the total judgment award from the finality of this to the residue of the property to be enjoyed during her
regards their termination. Thus, she may not be held Decision until full satisfaction thereof. lifetime, and in case of death without issue, one-half
solidarity liable with Saudia.cralawred of said residue to be payable to Mrs. Carrie Louise C.
This case is REMANDED to the Labor Arbiter to make a Borton, etc., in accordance with the provisions of the
WHEREFORE, with the MODIFICATIONS that first, detailed computation of the amounts due to will of the testator Edward E. Christensen. The will was
petitioner Brenda J. Betia is not solidarity liable with respondents which petitioner Saudi Arabian Airlines executed in Manila on March 5, 1951 and contains the
petitioner Saudi Arabian Airlines, and second, that should pay without delay. following provisions:
petitioner Saudi Arabian Airlines is liable for moral and 3. I declare ... that I have but ONE (1) child,
exemplary damages. The June 16, 2011 Decision and SO ORDERED. named MARIA LUCY CHRISTENSEN (now Mrs.
the September 13, 2011 Resolution of the Court of Bernard Daney), who was born in the
Appeals in CA-G.R. SP. No. 113006 are hereby 3) Aznar vs. Garcia January 31, 1963, Philippines about twenty-eight years ago, and
AFFIRMED in all other respects. Accordingly, petitioner who is now residing at No. 665 Rodger Young
Saudi Arabian Airlines is ordered to pay respondents: G.R. No. L-16749 January 31, 1963 Village, Los Angeles, California, U.S.A.
(1)Full backwages and all other benefits computed IN THE MATTER OF THE TESTATE ESTATE OF EDWARD 4. I further declare that I now have no living
from the respective dates in which each of the E. CHRISTENSEN, DECEASED. ascendants, and no descendants except my
respondents were illegally terminated until the ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, above named daughter, MARIA LUCY
finality of this Decision; Heir of the deceased, Executor and Heir-appellees, CHRISTENSEN DANEY.
(2)Separation pay computed from the respective dates vs. xxx xxx xxx
in which each of the respondents commenced HELEN CHRISTENSEN GARCIA, oppositor-appellant. 7. I give, devise and bequeath unto MARIA
employment until the finality of this Decision at the M. R. Sotelo for executor and heir-appellees. HELEN CHRISTENSEN, now married to Eduardo
rate of one (1) month's salary for every year of Leopoldo M. Abellera and Jovito Salonga for oppositor- Garcia, about eighteen years of age and who,
service, with a fraction of a year of at least six (6) appellant. notwithstanding the fact that she was baptized
months being counted as one (1) whole year; LABRADOR, J.: Christensen, is not in any way related to me,
(3)Moral damages in the amount of P100,000.00 per This is an appeal from a decision of the Court of First nor has she been at any time adopted by me,
respondent; Instance of Davao, Hon. Vicente N. Cusi, Jr., presiding, and who, from all information I have now
 resides in Egpit, Digos, Davao, Philippines, the deprives her (Helen) of her legitime as an Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117
sum of THREE THOUSAND SIX HUNDRED PESOS acknowledged natural child, she having been declared Cal. 286, 49 Pac. 192, cited in page 179, Record on
(P3,600.00), Philippine Currency the same to by Us in G.R. Nos. L-11483-84 an acknowledged natural Appeal). Oppositor Maria Helen Christensen, through
be deposited in trust for the said Maria Helen child of the deceased Edward E. Christensen. The legal counsel, filed various motions for reconsideration, but
Christensen with the Davao Branch of the grounds of opposition are (a) that the distribution these were denied. Hence, this appeal.
Philippine National Bank, and paid to her at the should be governed by the laws of the Philippines, and The most important assignments of error are as
rate of One Hundred Pesos (P100.00), (b) that said order of distribution is contrary thereto follows:
Philippine Currency per month until the insofar as it denies to Helen Christensen, one of two I
principal thereof as well as any interest which acknowledged natural children, one-half of the estate THE LOWER COURT ERRED IN IGNORING THE DECISION
may have accrued thereon, is exhausted.. in full ownership. In amplification of the above OF THE HONORABLE SUPREME COURT THAT HELEN IS
xxx xxx xxx grounds it was alleged that the law that should govern THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E.
12. I hereby give, devise and bequeath, unto the estate of the deceased Christensen should not be CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING
my well-beloved daughter, the said MARIA the internal law of California alone, but the entire law HER OF HER JUST SHARE IN THE INHERITANCE.
LUCY CHRISTENSEN DANEY (Mrs. Bernard thereof because several foreign elements are involved, II
Daney), now residing as aforesaid at No. 665 that the forum is the Philippines and even if the case THE LOWER COURT ERRED IN ENTIRELY IGNORING
Rodger Young Village, Los Angeles, California, were decided in California, Section 946 of the AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF
U.S.A., all the income from the rest, remainder, California Civil Code, which requires that the domicile SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES
and residue of my property and estate, real, of the decedent should apply, should be applicable. It CALLING FOR THE APPLICATION OF INTERNAL LAW.
personal and/or mixed, of whatsoever kind or was also alleged that Maria Helen Christensen having III
character, and wheresoever situated, of which been declared an acknowledged natural child of the THE LOWER COURT ERRED IN FAILING TO RECOGNIZE
I may be possessed at my death and which may decedent, she is deemed for all purposes legitimate THAT UNDER INTERNATIONAL LAW, PARTICULARLY
have come to me from any source whatsoever, from the time of her birth. UNDER THE RENVOI DOCTRINE, THE INTRINSIC
during her lifetime: .... The court below ruled that as Edward E. Christensen VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE
It is in accordance with the above-quoted provisions was a citizen of the United States and of the State of DISTRIBUTION OF THE ESTATE OF THE DECEASED
that the executor in his final account and project of California at the time of his death, the successional EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY
partition ratified the payment of only P3,600 to Helen rights and intrinsic validity of the provisions in his will THE LAWS OF THE PHILIPPINES.
Christensen Garcia and proposed that the residue of are to be governed by the law of California, in IV
the estate be transferred to his daughter, Maria Lucy accordance with which a testator has the right to THE LOWER COURT ERRED IN NOT DECLARING THAT
Christensen. dispose of his property in the way he desires, because THE SCHEDULE OF DISTRIBUTION SUBMITTED BY THE
Opposition to the approval of the project of partition the right of absolute dominion over his property is EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS.
was filed by Helen Christensen Garcia, insofar as it sacred and inviolable (In re McDaniel's Estate, 77 Cal. V
THE LOWER COURT ERRED IN NOT DECLARING THAT Wherefore, the parties respectfully pray that the abandon the Philippines and make home in the State
UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN foregoing stipulation of facts be admitted and of California.
GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE approved by this Honorable Court, without prejudice Sec. 16. Residence is a term used with many shades of
ESTATE IN FULL OWNERSHIP. to the parties adducing other evidence to prove their meaning from mere temporary presence to the most
There is no question that Edward E. Christensen was a case not covered by this stipulation of facts. permanent abode. Generally, however, it is used to
citizen of the United States and of the State of 1äwphï1.ñët denote something more than mere physical presence.
California at the time of his death. But there is also no Being an American citizen, Mr. Christensen was (Goodrich on Conflict of Laws, p. 29)
question that at the time of his death he was domiciled interned by the Japanese Military Forces in the As to his citizenship, however, We find that the
in the Philippines, as witness the following facts Philippines during World War II. Upon liberation, in citizenship that he acquired in California when he
admitted by the executor himself in appellee's brief: April 1945, he left for the United States but returned resided in Sacramento, California from 1904 to 1913,
In the proceedings for admission of the will to probate, to the Philippines in December, 1945. Appellees was never lost by his stay in the Philippines, for the
the facts of record show that the deceased Edward E. Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as latter was a territory of the United States (not a state)
Christensen was born on November 29, 1875 in New Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", until 1946 and the deceased appears to have
York City, N.Y., U.S.A.; his first arrival in the Philippines, "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, considered himself as a citizen of California by the fact
as an appointed school teacher, was on July 1, 1901, 1953.) that when he executed his will in 1951 he declared that
on board the U.S. Army Transport "Sheridan" with Port In April, 1951, Edward E. Christensen returned once he was a citizen of that State; so that he appears never
of Embarkation as the City of San Francisco, in the more to California shortly after the making of his last to have intended to abandon his California citizenship
State of California, U.S.A. He stayed in the Philippines will and testament (now in question herein) which he by acquiring another. This conclusion is in accordance
until 1904. executed at his lawyers' offices in Manila on March 5, with the following principle expounded by Goodrich in
In December, 1904, Mr. Christensen returned to the 1951. He died at the St. Luke's Hospital in the City of his Conflict of Laws.
United States and stayed there for the following nine Manila on April 30, 1953. (pp. 2-3) The terms "'residence" and "domicile" might well be
years until 1913, during which time he resided in, and In arriving at the conclusion that the domicile of the taken to mean the same thing, a place of permanent
was teaching school in Sacramento, California. deceased is the Philippines, we are persuaded by the abode. But domicile, as has been shown, has acquired
Mr. Christensen's next arrival in the Philippines was in fact that he was born in New York, migrated to a technical meaning. Thus one may be domiciled in a
July of the year 1913. However, in 1928, he again California and resided there for nine years, and since place where he has never been. And he may reside in
departed the Philippines for the United States and he came to the Philippines in 1913 he returned to a place where he has no domicile. The man with two
came back here the following year, 1929. Some nine California very rarely and only for short visits (perhaps homes, between which he divides his time, certainly
years later, in 1938, he again returned to his own to relatives), and considering that he appears never to resides in each one, while living in it. But if he went on
country, and came back to the Philippines the have owned or acquired a home or properties in that business which would require his presence for several
following year, 1939. state, which would indicate that he would ultimately weeks or months, he might properly be said to have
sufficient connection with the place to be called a
 resident. It is clear, however, that, if he treated his There is no single American law governing the validity determination of the validity of the testamentary
settlement as continuing only for the particular of testamentary provisions in the United States, each provisions of Christensen's will, such law being in force
business in hand, not giving up his former "home," he state of the Union having its own private law in the State of California of which Christensen was a
could not be a domiciled New Yorker. Acquisition of a applicable to its citizens only and in force only within citizen. Appellant, on the other hand, insists that
domicile of choice requires the exercise of intention the state. The "national law" indicated in Article 16 of Article 946 should be applicable, and in accordance
as well as physical presence. "Residence simply the Civil Code above quoted can not, therefore, therewith and following the doctrine of the renvoi, the
requires bodily presence of an inhabitant in a given possibly mean or apply to any general American law. question of the validity of the testamentary provision
place, while domicile requires bodily presence in that So it can refer to no other than the private law of the in question should be referred back to the law of the
place and also an intention to make it one's domicile." State of California. decedent's domicile, which is the Philippines.
Residence, however, is a term used with many shades The next question is: What is the law in California The theory of doctrine of renvoi has been defined by
of meaning, from the merest temporary presence to governing the disposition of personal property? The various authors, thus:
the most permanent abode, and it is not safe to insist decision of the court below, sustains the contention of The problem has been stated in this way: "When the
that any one use et the only proper one. (Goodrich, p. the executor-appellee that under the California Conflict of Laws rule of the forum refers a jural matter
29) Probate Code, a testator may dispose of his property to a foreign law for decision, is the reference to the
The law that governs the validity of his testamentary by will in the form and manner he desires, citing the purely internal rules of law of the foreign system; i.e.,
dispositions is defined in Article 16 of the Civil Code of case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. to the totality of the foreign law minus its Conflict of
the Philippines, which is as follows: 2d 952. But appellant invokes the provisions of Article Laws rules?"
ART. 16. Real property as well as personal property is 946 of the Civil Code of California, which is as follows: On logic, the solution is not an easy one. The Michigan
subject to the law of the country where it is situated. If there is no law to the contrary, in the place where court chose to accept the renvoi, that is, applied the
However, intestate and testamentary successions, personal property is situated, it is deemed to follow Conflict of Laws rule of Illinois which referred the
both with respect to the order of succession and to the person of its owner, and is governed by the law of matter back to Michigan law. But once having
the amount of successional rights and to the intrinsic his domicile. determined the the Conflict of Laws principle is the
validity of testamentary provisions, shall be regulated The existence of this provision is alleged in appellant's rule looked to, it is difficult to see why the reference
by the national law of the person whose succession is opposition and is not denied. We have checked it in the back should not have been to Michigan Conflict of
under consideration, whatever may be the nature of California Civil Code and it is there. Appellee, on the Laws. This would have resulted in the "endless chain of
the property and regardless of the country where said other hand, relies on the case cited in the decision and references" which has so often been criticized be legal
property may be found. testified to by a witness. (Only the case of Kaufman is writers. The opponents of the renvoi would have
The application of this article in the case at bar correctly cited.) It is argued on executor's behalf that looked merely to the internal law of Illinois, thus
requires the determination of the meaning of the term as the deceased Christensen was a citizen of the State rejecting the renvoi or the reference back. Yet there
"national law" is used therein. of California, the internal law thereof, which is that seems no compelling logical reason why the original
given in the abovecited case, should govern the reference should be the internal law rather than to the
Conflict of Laws rule. It is true that such a solution goes only to the internal law. Thus, a person's title to This is one type of renvoi. A jural matter is presented
avoids going on a merry-go-round, but those who have land, recognized by the situs, will be recognized by which the conflict-of-laws rule of the forum refers to a
accepted the renvoi theory avoid this inextricabilis every court; and every divorce, valid by the domicile of foreign law, the conflict-of-laws rule of which, in turn,
circulas by getting off at the second reference and at the parties, will be valid everywhere. (Goodrich, refers the matter back again to the law of the forum.
that point applying internal law. Perhaps the Conflict of Laws, Sec. 7, pp. 13-14.) This is renvoi in the narrower sense. The German term
opponents of the renvoi are a bit more consistent for X, a citizen of Massachusetts, dies intestate, domiciled for this judicial process is 'Ruckverweisung.'" (Harvard
they look always to internal law as the rule of in France, leaving movable property in Massachusetts, Law Review, Vol. 31, pp. 523-571.)
reference. England, and France. The question arises as to how this After a decision has been arrived at that a foreign law
Strangely enough, both the advocates for and the property is to be distributed among X's next of kin. is to be resorted to as governing a particular case, the
objectors to the renvoi plead that greater uniformity Assume (1) that this question arises in a Massachusetts further question may arise: Are the rules as to the
will result from adoption of their respective views. And court. There the rule of the conflict of laws as to conflict of laws contained in such foreign law also to be
still more strange is the fact that the only way to intestate succession to movables calls for an resorted to? This is a question which, while it has been
achieve uniformity in this choice-of-law problem is if in application of the law of the deceased's last domicile. considered by the courts in but a few instances, has
the dispute the two states whose laws form the legal Since by hypothesis X's last domicile was France, the been the subject of frequent discussion by textwriters
basis of the litigation disagree as to whether the renvoi natural thing for the Massachusetts court to do would and essayists; and the doctrine involved has been
should be accepted. If both reject, or both accept the be to turn to French statute of distributions, or descriptively designated by them as the "Renvoyer" to
doctrine, the result of the litigation will vary with the whatever corresponds thereto in French law, and send back, or the "Ruchversweisung", or the
choice of the forum. In the case stated above, had the decree a distribution accordingly. An examination of "Weiterverweisung", since an affirmative answer to
Michigan court rejected the renvoi, judgment would French law, however, would show that if a French the question postulated and the operation of the
have been against the woman; if the suit had been court were called upon to determine how this property adoption of the foreign law in toto would in many
brought in the Illinois courts, and they too rejected the should be distributed, it would refer the distribution to cases result in returning the main controversy to be
renvoi, judgment would be for the woman. The same the national law of the deceased, thus applying the decided according to the law of the forum. ... (16 C.J.S.
result would happen, though the courts would switch Massachusetts statute of distributions. So on the 872.)
with respect to which would hold liability, if both surface of things the Massachusetts court has open to Another theory, known as the "doctrine of renvoi", has
courts accepted the renvoi. it alternative course of action: (a) either to apply the been advanced. The theory of the doctrine of renvoi is
The Restatement accepts the renvoi theory in two French law is to intestate succession, or (b) to resolve that the court of the forum, in determining the
instances: where the title to land is in question, and itself into a French court and apply the Massachusetts question before it, must take into account the whole
where the validity of a decree of divorce is challenged. statute of distributions, on the assumption that this is law of the other jurisdiction, but also its rules as to
In these cases the Conflict of Laws rule of the situs of what a French court would do. If it accepts the so- conflict of laws, and then apply the law to the actual
the land, or the domicile of the parties in the divorce called renvoi doctrine, it will follow the latter course, question which the rules of the other jurisdiction
case, is applied by the forum, but any further reference thus applying its own law. prescribe. This may be the law of the forum. The
doctrine of the renvoi has generally been repudiated determination of a question to the same system of he was domiciled at the time of his death will be
by the American authorities. (2 Am. Jur. 296) law. looked to in deciding legal questions about the will,
The scope of the theory of renvoi has also been defined xxx xxx xxx almost as completely as the law of situs is consulted in
and the reasons for its application in a country If, for example, the English law directs its judge to questions about the devise of land. It is logical that,
explained by Prof. Lorenzen in an article in the Yale distribute the personal estate of an Englishman who since the domiciliary rules control devolution of the
Law Journal, Vol. 27, 1917-1918, pp. 529-531. The has died domiciled in Belgium in accordance with the personal estate in case of intestate succession, the
pertinent parts of the article are quoted herein below: law of his domicile, he must first inquire whether the same rules should determine the validity of an
The recognition of the renvoi theory implies that the law of Belgium would distribute personal property attempted testamentary dispostion of the property.
rules of the conflict of laws are to be understood as upon death in accordance with the law of domicile, Here, also, it is not that the domiciliary has effect
incorporating not only the ordinary or internal law of and if he finds that the Belgian law would make the beyond the borders of the domiciliary state. The rules
the foreign state or country, but its rules of the conflict distribution in accordance with the law of nationality of the domicile are recognized as controlling by the
of laws as well. According to this theory 'the law of a — that is the English law — he must accept this Conflict of Laws rules at the situs property, and the
country' means the whole of its law. reference back to his own law. reason for the recognition as in the case of intestate
xxx xxx xxx We note that Article 946 of the California Civil Code is succession, is the general convenience of the doctrine.
Von Bar presented his views at the meeting of the its conflict of laws rule, while the rule applied in In re The New York court has said on the point: 'The general
Institute of International Law, at Neuchatel, in 1900, in Kaufman, Supra, its internal law. If the law on principle that a dispostiton of a personal property,
the form of the following theses: succession and the conflict of laws rules of California valid at the domicile of the owner, is valid anywhere,
(1) Every court shall observe the law of its country as are to be enforced jointly, each in its own intended and is one of the universal application. It had its origin in
regards the application of foreign laws. appropriate sphere, the principle cited In re Kaufman that international comity which was one of the first
(2) Provided that no express provision to the contrary should apply to citizens living in the State, but Article fruits of civilization, and it this age, when business
exists, the court shall respect: 946 should apply to such of its citizens as are not intercourse and the process of accumulating property
(a) The provisions of a foreign law which disclaims the domiciled in California but in other jurisdictions. The take but little notice of boundary lines, the practical
right to bind its nationals abroad as regards their rule laid down of resorting to the law of the domicile wisdom and justice of the rule is more apparent than
personal statute, and desires that said personal in the determination of matters with foreign element ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-
statute shall be determined by the law of the involved is in accord with the general principle of 443.)
domicile, or even by the law of the place where the American law that the domiciliary law should govern in Appellees argue that what Article 16 of the Civil Code
act in question occurred. most matters or rights which follow the person of the of the Philippines pointed out as the national law is the
(b) The decision of two or more foreign systems of owner. internal law of California. But as above explained the
law, provided it be certain that one of them is When a man dies leaving personal property in one or laws of California have prescribed two sets of laws for
necessarily competent, which agree in attributing the more states, and leaves a will directing the manner of its citizens, one for residents therein and another for
distribution of the property, the law of the state where those domiciled in other jurisdictions. Reason
demands that We should enforce the California states, between the country of which the decedent instructions that the partition be made as the
internal law prescribed for its citizens residing therein, was a citizen and the country of his domicile. The Philippine law on succession provides. Judgment
and enforce the conflict of laws rules for the citizens Philippine court must apply its own law as directed in reversed, with costs against appellees.
domiciled abroad. If we must enforce the law of the conflict of laws rule of the state of the decedent, if
California as in comity we are bound to go, as so the question has to be decided, especially as the 4) Bellis vs. Bellis June 6, 1967,
declared in Article 16 of our Civil Code, then we must application of the internal law of California provides no
enforce the law of California in accordance with the legitime for children while the Philippine law, Arts. G.R. No. L-23678 June 6, 1967
express mandate thereof and as above explained, i.e., 887(4) and 894, Civil Code of the Philippines, makes TESTATE ESTATE OF AMOS G. BELLIS, deceased.
apply the internal law for residents therein, and its natural children legally acknowledged forced heirs of PEOPLE'S BANK and TRUST COMPANY, executor.
conflict-of-laws rule for those domiciled abroad. the parent recognizing them. MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS,
It is argued on appellees' behalf that the clause "if The Philippine cases (In re Estate of Johnson, 39 Phil. oppositors-appellants,
there is no law to the contrary in the place where the 156; Riera vs. Palmaroli, 40 Phil. 105; Miciano vs. vs.
property is situated" in Sec. 946 of the California Civil Brimo, 50 Phil. 867; Babcock Templeton vs. Rider EDWARD A. BELLIS, ET AL., heirs-appellees.
Code refers to Article 16 of the Civil Code of the Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Vicente R. Macasaet and Jose D. Villena for oppositors
Philippines and that the law to the contrary in the Phil. 293.) cited by appellees to support the decision appellants.
Philippines is the provision in said Article 16 that the can not possibly apply in the case at bar, for two Paredes, Poblador, Cruz and Nazareno for heirs-
national law of the deceased should govern. This important reasons, i.e., the subject in each case does appellees E. A. Bellis, et al.
contention can not be sustained. As explained in the not appear to be a citizen of a state in the United States Quijano and Arroyo for heirs-appellees W. S. Bellis, et
various authorities cited above the national law but with domicile in the Philippines, and it does not al.
mentioned in Article 16 of our Civil Code is the law on appear in each case that there exists in the state of J. R. Balonkita for appellee People's Bank & Trust
conflict of laws in the California Civil Code, i.e., Article which the subject is a citizen, a law similar to or Company.
946, which authorizes the reference or return of the identical with Art. 946 of the California Civil Code. Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
question to the law of the testator's domicile. The We therefore find that as the domicile of the deceased BENGZON, J.P., J.:
conflict of laws rule in California, Article 946, Civil Christensen, a citizen of California, is the Philippines, This is a direct appeal to Us, upon a question purely of
Code, precisely refers back the case, when a decedent the validity of the provisions of his will depriving his law, from an order of the Court of First Instance of
is not domiciled in California, to the law of his domicile, acknowledged natural child, the appellant, should be Manila dated April 30, 1964, approving the project of
the Philippines in the case at bar. The court of the governed by the Philippine Law, the domicile, pursuant partition filed by the executor in Civil Case No. 37089
domicile can not and should not refer the case back to to Art. 946 of the Civil Code of California, not by the therein.1äwphï1.ñët
California; such action would leave the issue incapable internal law of California.. The facts of the case are as follows:
of determination because the case will then be like a WHEREFORE, the decision appealed from is hereby Amos G. Bellis, born in Texas, was "a citizen of the
football, tossed back and forth between the two reversed and the case returned to the lower court with State of Texas and of the United States." By his first
wife, Mary E. Mallen, whom he divorced, he had five to Mary E. Mallen and to the three (3) illegitimate the registry receipt submitted on April 27, 1964 by the
legitimate children: Edward A. Bellis, George Bellis children, Amos Bellis, Jr., Maria Cristina Bellis and executor.1
(who pre-deceased him in infancy), Henry A. Bellis, Miriam Palma Bellis, various amounts totalling After the parties filed their respective memoranda and
Alexander Bellis and Anna Bellis Allsman; by his second P40,000.00 each in satisfaction of their respective other pertinent pleadings, the lower court, on April 30,
wife, Violet Kennedy, who survived him, he had three legacies, or a total of P120,000.00, which it released 1964, issued an order overruling the oppositions and
legitimate children: Edwin G. Bellis, Walter S. Bellis and from time to time according as the lower court approving the executor's final account, report and
Dorothy Bellis; and finally, he had three illegitimate approved and allowed the various motions or petitions administration and project of partition. Relying upon
children: Amos Bellis, Jr., Maria Cristina Bellis and filed by the latter three requesting partial advances on Art. 16 of the Civil Code, it applied the national law of
Miriam Palma Bellis. account of their respective legacies. the decedent, which in this case is Texas law, which did
On August 5, 1952, Amos G. Bellis executed a will in On January 8, 1964, preparatory to closing its not provide for legitimes.
the Philippines, in which he directed that after all administration, the executor submitted and filed its Their respective motions for reconsideration having
taxes, obligations, and expenses of administration are "Executor's Final Account, Report of Administration been denied by the lower court on June 11, 1964,
paid for, his distributable estate should be divided, in and Project of Partition" wherein it reported, inter alia, oppositors-appellants appealed to this Court to raise
trust, in the following order and manner: (a) the satisfaction of the legacy of Mary E. Mallen by the the issue of which law must apply — Texas law or
$240,000.00 to his first wife, Mary E. Mallen; (b) delivery to her of shares of stock amounting to Philippine law.
P120,000.00 to his three illegitimate children, Amos $240,000.00, and the legacies of Amos Bellis, Jr., Maria In this regard, the parties do not submit the case on,
Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or Cristina Bellis and Miriam Palma Bellis in the amount nor even discuss, the doctrine of renvoi, applied by this
P40,000.00 each and (c) after the foregoing two items of P40,000.00 each or a total of P120,000.00. In the Court in Aznar v. Christensen Garcia, L-16749, January
have been satisfied, the remainder shall go to his seven project of partition, the executor — pursuant to the 31, 1963. Said doctrine is usually pertinent where the
surviving children by his first and second wives, "Twelfth" clause of the testator's Last Will and decedent is a national of one country, and a domicile
namely: Edward A. Bellis, Henry A. Bellis, Alexander Testament — divided the residuary estate into seven of another. In the present case, it is not disputed that
Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter equal portions for the benefit of the testator's seven the decedent was both a national of Texas and a
S. Bellis, and Dorothy E. Bellis, in equal legitimate children by his first and second marriages. domicile thereof at the time of his death.2 So that even
shares.1äwphï1.ñët On January 17, 1964, Maria Cristina Bellis and Miriam assuming Texas has a conflict of law rule providing that
Subsequently, or on July 8, 1958, Amos G. Bellis died a Palma Bellis filed their respective oppositions to the the domiciliary system (law of the domicile) should
resident of San Antonio, Texas, U.S.A. His will was project of partition on the ground that they were govern, the same would not result in a reference back
admitted to probate in the Court of First Instance of deprived of their legitimes as illegitimate children and, (renvoi) to Philippine law, but would still refer to Texas
Manila on September 15, 1958. therefore, compulsory heirs of the deceased. law. Nonetheless, if Texas has a conflicts rule adopting
The People's Bank and Trust Company, as executor of Amos Bellis, Jr. interposed no opposition despite the situs theory (lex rei sitae) calling for the application
the will, paid all the bequests therein including the notice to him, proof of service of which is evidenced by of the law of the place where the properties are
amount of $240,000.00 in the form of shares of stock situated, renvoi would arise, since the properties here
involved are found in the Philippines. In the absence, Appellants would however counter that Art. 17, Appellants would also point out that the decedent
however, of proof as to the conflict of law rule of paragraph three, of the Civil Code, stating that — executed two wills — one to govern his Texas estate
Texas, it should not be presumed different from ours.3 Prohibitive laws concerning persons, their acts and the other his Philippine estate — arguing from this
Appellants' position is therefore not rested on the or property, and those which have for their that he intended Philippine law to govern his
doctrine of renvoi. As stated, they never invoked nor object public order, public policy and good Philippine estate. Assuming that such was the
even mentioned it in their arguments. Rather, they customs shall not be rendered ineffective by decedent's intention in executing a separate Philippine
argue that their case falls under the circumstances laws or judgments promulgated, or by will, it would not alter the law, for as this Court ruled
mentioned in the third paragraph of Article 17 in determinations or conventions agreed upon in in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a
relation to Article 16 of the Civil Code. a foreign country. foreigner's will to the effect that his properties shall be
Article 16, par. 2, and Art. 1039 of the Civil Code, prevails as the exception to Art. 16, par. 2 of the Civil distributed in accordance with Philippine law and not
render applicable the national law of the decedent, in Code afore-quoted. This is not correct. Precisely, with his national law, is illegal and void, for his national
intestate or testamentary successions, with regard to Congress deleted the phrase, "notwithstanding the law cannot be ignored in regard to those matters that
four items: (a) the order of succession; (b) the amount provisions of this and the next preceding article" when Article 10 — now Article 16 — of the Civil Code states
of successional rights; (e) the intrinsic validity of the they incorporated Art. 11 of the old Civil Code as Art. said national law should govern.
provisions of the will; and (d) the capacity to succeed. 17 of the new Civil Code, while reproducing without The parties admit that the decedent, Amos G. Bellis,
They provide that — substantial change the second paragraph of Art. 10 of was a citizen of the State of Texas, U.S.A., and that
ART. 16. Real property as well as personal the old Civil Code as Art. 16 in the new. It must have under the laws of Texas, there are no forced heirs or
property is subject to the law of the country been their purpose to make the second paragraph of legitimes. Accordingly, since the intrinsic validity of the
where it is situated. Art. 16 a specific provision in itself which must be provision of the will and the amount of successional
However, intestate and testamentary applied in testate and intestate succession. As further rights are to be determined under Texas law, the
successions, both with respect to the order of indication of this legislative intent, Congress added a Philippine law on legitimes cannot be applied to the
succession and to the amount of successional new provision, under Art. 1039, which decrees that testacy of Amos G. Bellis.
rights and to the intrinsic validity of capacity to succeed is to be governed by the national Wherefore, the order of the probate court is hereby
testamentary provisions, shall be regulated by law of the decedent. affirmed in toto, with costs against appellants. So
the national law of the person whose It is therefore evident that whatever public policy or ordered.
succession is under consideration, whatever good customs may be involved in our System of Concepcion, C.J., Reyes, J.B.L., Dizon, Regala,
may he the nature of the property and legitimes, Congress has not intended to extend the Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.
regardless of the country wherein said same to the succession of foreign nationals. For it has
property may be found. specifically chosen to leave, inter alia, the amount of
ART. 1039. Capacity to succeed is governed by successional rights, to the decedent's national law.
the law of the nation of the decedent. Specific provisions must prevail over general ones.
 Builders Corporation (AIBC) and Brown and Root (1) to reverse the Resolution dated September 2, 1991
5) Cadali. et. al. vs. POEA Administrator, International Inc. (BRII) to pay the claims of the 1,767 of NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777,
G.R. No. L-104776 December 5, 1994 claimants in said labor cases; (iv) declaring Atty. L-85-10-779 and
BIENVENIDO M. CADALIN, ROLANDO M. AMUL, Florante M. de Castro guilty of forum-shopping; and (v) L-86-05-460, insofar as it granted the claims of 149
DONATO B. EVANGELISTA, and the rest of 1,767 dismissing POEA Case No. L-86-05-460; and claimants; and
NAMED-COMPLAINANTS, thru and by their Attorney- (3) to reverse the Resolution dated March 24, 1992 of (2) to reverse the Resolution dated March 21, 1992 of
in-fact, Atty. GERARDO A. DEL MUNDO, petitioners, NLRC, denying the motion for reconsideration of its NLRC insofar as it denied the motions for
vs. Resolution dated September 2, 1991 (Rollo, pp. 8-288). reconsideration of AIBC and BRII (Rollo, pp. 2-59; 61-
PHILIPPINE OVERSEAS EMPLOYMENT The petition in G.R. Nos. 104911-14, entitled 230).
ADMINISTRATION'S ADMINISTRATOR, NATIONAL "Bienvenido M. Cadalin, et. al., v. Hon. National Labor The Resolution dated September 2, 1991 of NLRC,
LABOR RELATIONS COMMISSION, BROWN & ROOT Relations Commission, et. al.," was filed under Rule 65 which modified the decision of POEA in four labor
INTERNATIONAL, INC. AND/OR ASIA INTERNATIONAL of the Revised Rules of Court: cases: (1) awarded monetary benefits only to 149
BUILDERS CORPORATION, respondents. (1) to reverse the Resolution dated September 2, 1991 claimants and (2) directed Labor Arbiter Fatima J.
Gerardo A. Del Mundo and Associates for petitioners. of NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, Franco to conduct hearings and to receive evidence on
Romulo, Mabanta, Sayoc, Buenaventura, De los L-85-10-799 and the claims dismissed by the POEA for lack of
Angeles Law Offices for BRII/AIBC. L-86-05-460 insofar as it: (i) applied the three-year substantial evidence or proof of employment.
Florante M. De Castro for private respondents in prescriptive period under the Labor Code of the Consolidation of Cases
105029-32. Philippines instead of the ten-year prescriptive period G.R. Nos. 104776 and 105029-32 were originally
under the Civil Code of the Philippines; and (ii) denied raffled to the Third Division while G.R. Nos. 104911-14
QUIASON, J.: the were raffled to the Second Division. In the Resolution
The petition in G.R. No. 104776, entitled "Bienvenido "three-hour daily average" formula in the computation dated July 26, 1993, the Second Division referred G.R.
M. Cadalin, et. al. v. Philippine Overseas Employment of petitioners' overtime pay; and Nos. 104911-14 to the Third Division (G.R. Nos.
Administration's Administrator, et. al.," was filed (2) to reverse the Resolution dated March 24, 1992 of 104911-14, Rollo, p. 895).
under Rule 65 of the Revised Rules of Court: NLRC, denying the motion for reconsideration of its In the Resolution dated September 29, 1993, the Third
(1) to modify the Resolution dated September 2, 1991 Resolution dated September 2, 1991 (Rollo, pp. 8-25; Division granted the motion filed in G.R. Nos. 104911-
of the National Labor Relations Commission (NLRC) in 26-220). 14 for the consolidation of said cases with G.R. Nos.
POEA Cases Nos. The petition in G.R. Nos. 105029-32, entitled "Asia 104776 and 105029-32, which were assigned to the
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05- International Builders Corporation, et. al., v. National First Division (G.R. Nos. 104911-14, Rollo, pp. 986-
460; (2) to render a new decision: (i) declaring private Labor Relations Commission, et. al." was filed under 1,107; G.R. Nos. 105029-30, Rollo, pp. 369-377, 426-
respondents as in default; (ii) declaring the said labor Rule 65 of the Revised Rules of Court: 432). In the Resolution dated October 27, 1993, the
cases as a class suit; (iii) ordering Asia International First Division granted the motion to consolidate G.R.
Nos. 104911-14 with G.R. No. 104776 (G.R. Nos. At the hearing on June 25, 1984, AIBC was furnished a case should be deemed submitted for decision. On the
104911-14, Rollo, p. 1109; G.R. Nos. 105029-32, Rollo, copy of the complaint and was given, together with same day, Atty. Florante de Castro filed another
p. 1562). BRII, up to July 5, 1984 to file its answer. complaint for the same money claims and benefits in
I On July 3, 1984, POEA Administrator, upon motion of behalf of several claimants, some of whom were also
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. AIBC and BRII, ordered the claimants to file a bill of claimants in POEA Case No. L-84-06-555 (POEA Case
Amul and Donato B. Evangelista, in their own behalf particulars within ten days from receipt of the order No. 85-10-779).
and on behalf of 728 other overseas contract workers and the movants to file their answers within ten days On October 19, 1984, claimants filed their
(OCWs) instituted a class suit by filing an "Amended from receipt of the bill of particulars. The POEA "Compliance" with the Order dated October 2, 1984
Complaint" with the Philippine Overseas Employment Administrator also scheduled a pre-trial conference on and an "Urgent Manifestation," praying that the POEA
Administration (POEA) for money claims arising from July 25, 1984. direct the parties to submit simultaneously their
their recruitment by AIBC and employment by BRII On July 13, 1984, the claimants submitted their position papers after which the case would be deemed
(POEA Case No. L-84-06-555). The claimants were "Compliance and Manifestation." On July 23, 1984, submitted for decision. On the same day, AIBC asked
represented by Atty. Gerardo del Mundo. AIBC filed a "Motion to Strike Out of the Records", the for time to file its comment on the "Compliance" and
BRII is a foreign corporation with headquarters in "Complaint" and the "Compliance and Manifestation." "Urgent Manifestation" of claimants. On November 6,
Houston, Texas, and is engaged in construction; while On July 25, 1984, the claimants filed their "Rejoinder 1984, it filed a second motion for extension of time to
AIBC is a domestic corporation licensed as a service and Comments," averring, among other matters, the file the comment.
contractor to recruit, mobilize and deploy Filipino failure of AIBC and BRII to file their answers and to On November 8, 1984, the POEA Administrator
workers for overseas employment on behalf of its attend the pre-trial conference on July 25, 1984. The informed AIBC that its motion for extension of time
foreign principals. claimants alleged that AIBC and BRII had waived their was granted.
The amended complaint principally sought the right to present evidence and had defaulted by failing On November 14, 1984, claimants filed an opposition
payment of the unexpired portion of the employment to file their answers and to attend the pre-trial to the motions for extension of time and asked that
contracts, which was terminated prematurely, and conference. AIBC and BRII be declared in default for failure to file
secondarily, the payment of the interest of the On October 2, 1984, the POEA Administrator denied their answers.
earnings of the Travel and Reserved Fund, interest on the "Motion to Strike Out of the Records" filed by AIBC On November 20, 1984, AIBC and BRII filed a
all the unpaid benefits; area wage and salary but required the claimants to correct the deficiencies "Comment" praying, among other reliefs, that
differential pay; fringe benefits; refund of SSS and in the complaint pointed out in the order. claimants should be ordered to amend their
premium not remitted to the SSS; refund of On October 10, 1984, claimants asked for time within complaint.
withholding tax not remitted to the BIR; penalties for which to comply with the Order of October 2, 1984 and On December 27, 1984, the POEA Administrator issued
committing prohibited practices; as well as the filed an "Urgent Manifestation," praying that the POEA an order directing AIBC and BRII to file their answers
suspension of the license of AIBC and the accreditation Administrator direct the parties to submit within ten days from receipt of the order.
of BRII (G.R. No. 104776, Rollo, pp. 13-14). simultaneously their position papers, after which the
On February 27, 1985, AIBC and BRII appealed to NLRC enjoined the POEA Administrator from hearing the 1985 and Administrative Case No. 2858 on March 18,
seeking the reversal of the said order of the POEA labor cases and suspended the period for the filing of 1986. On May 13, 1987, the Supreme Court issued a
Administrator. Claimants opposed the appeal, the answers of AIBC and BRII. resolution in Administrative Case No. 2858 directing
claiming that it was dilatory and praying that AIBC and On September 19, 1985, claimants asked the POEA the POEA Administrator to resolve the issues raised in
BRII be declared in default. Administrator to include additional claimants in the the motions and oppositions filed in POEA Cases Nos.
On April 2, 1985, the original claimants filed an case and to investigate alleged wrongdoings of BRII, L-84-06-555 and L-86-05-460 and to decide the labor
"Amended Complaint and/or Position Paper" dated AIBC and their respective lawyers. cases with deliberate dispatch.
March 24, 1985, adding new demands: namely, the On October 10, 1985, Romeo Patag and two co- AIBC also filed a petition in the Supreme Court (G.R.
payment of overtime pay, extra night work pay, annual claimants filed a complaint (POEA Case No. L-85-10- No. 78489), questioning the Order dated September 4,
leave differential pay, leave indemnity pay, retirement 777) against AIBC and BRII with the POEA, demanding 1985 of the POEA Administrator. Said order required
and savings benefits and their share of forfeitures (G.R. monetary claims similar to those subject of POEA Case BRII and AIBC to answer the amended complaint in
No. 104776, Rollo, pp. 14-16). On April 15, 1985, the No. L-84-06-555. In the same month, Solomon Reyes POEA Case No. L-84-06-555. In a resolution dated
POEA Administrator directed AIBC to file its answer to also filed his own complaint (POEA Case No. L-85-10- November 9, 1987, we dismissed the petition by
the amended complaint (G.R. No. 104776, Rollo, p. 20). 779) against AIBC and BRII. informing AIBC that all its technical objections may
On May 28, 1985, claimants filed an "Urgent Motion On October 17, 1985, the law firm of Florante M. de properly be resolved in the hearings before the POEA.
for Summary Judgment." On the same day, the POEA Castro & Associates asked for the substitution of the Complaints were also filed before the Ombudsman.
issued an order directing AIBC and BRII to file their original counsel of record and the cancellation of the The first was filed on September 22, 1988 by claimant
answers to the "Amended Complaint," otherwise, they special powers of attorney given the original counsel. Hermie Arguelles and 18 co-claimants against the
would be deemed to have waived their right to present On December 12, 1985, Atty. Del Mundo filed in NLRC POEA Administrator and several NLRC Commissioners.
evidence and the case would be resolved on the basis a notice of the claim to enforce attorney's lien. The Ombudsman merely referred the complaint to the
of complainant's evidence. On May 29, 1986, Atty. De Castro filed a complaint for Secretary of Labor and Employment with a request for
On June 5, 1985, AIBC countered with a "Motion to money claims (POEA Case No. 86-05-460) in behalf of the early disposition of POEA Case No. L-84-06-555.
Dismiss as Improper Class Suit and Motion for Bill of 11 claimants including Bienvenido Cadalin, a claimant The second was filed on April 28, 1989 by claimants
Particulars Re: Amended Complaint dated March 24, in POEA Case No. 84-06-555. Emigdio P. Bautista and Rolando R. Lobeta charging
1985." Claimants opposed the motions. On December 12, 1986, the NLRC dismissed the two AIBC and BRII for violation of labor and social
On September 4, 1985, the POEA Administrator appeals filed on February 27, 1985 and September 18, legislations. The third was filed by Jose R. Santos,
reiterated his directive to AIBC and BRII to file their 1985 by AIBC and BRII. Maximino N. Talibsao and Amado B. Bruce denouncing
answers in POEA Case No. L-84-06-555. In narrating the proceedings of the labor cases before AIBC and BRII of violations of labor laws.
On September 18, 1985, AIBC filed its second appeal to the POEA Administrator, it is not amiss to mention that On January 13, 1987, AIBC filed a motion for
the NLRC, together with a petition for the issuance of two cases were filed in the Supreme Court by the reconsideration of the NLRC Resolution dated
a writ of injunction. On September 19, 1985, NLRC claimants, namely — G.R. No. 72132 on September 26, December 12, 1986.
On January 14, 1987, AIBC reiterated before the POEA service records. On October 27, 1988, AIBC and BRII On December 23, 1989, claimants filed another motion
Administrator its motion for suspension of the period filed a "Consolidated Reply." to resolve the labor cases.
for filing an answer or motion for extension of time to On January 30, 1989, the POEA Administrator On August 21, 1990, claimants filed their
file the same until the resolution of its motion for rendered his decision in POEA Case No. L-84-06-555 "Manifestational Motion," praying that all the 1,767
reconsideration of the order of the NLRC dismissing and the other consolidated cases, which awarded the claimants be awarded their monetary claims for failure
the two appeals. On April 28, 1987, NLRC en banc amount of $824,652.44 in favor of only 324 of private respondents to file their answers within the
denied the motion for reconsideration. complainants. reglamentary period required by law.
At the hearing on June 19, 1987, AIBC submitted its On February 10, 1989, claimants submitted their On September 2, 1991, NLRC promulgated its
answer to the complaint. At the same hearing, the "Appeal Memorandum For Partial Appeal" from the Resolution, disposing as follows:
parties were given a period of 15 days from said date decision of the POEA. On the same day, AIBC also filed WHEREFORE, premises considered, the Decision of the
within which to submit their respective position its motion for reconsideration and/or appeal in POEA in these consolidated cases is modified to the
papers. On June 24, 1987 claimants filed their "Urgent addition to the "Notice of Appeal" filed earlier on extent and in accordance with the following
Motion to Strike Out Answer," alleging that the answer February 6, 1989 by another counsel for AIBC. dispositions:
was filed out of time. On June 29, 1987, claimants filed On February 17, 1989, claimants filed their "Answer to 1. The claims of the 94 complainants identified and
their "Supplement to Urgent Manifestational Motion" Appeal," praying for the dismissal of the appeal of AIBC listed in Annex "A" hereof are dismissed for having
to comply with the POEA Order of June 19, 1987. On and BRII. prescribed;
February 24, 1988, AIBC and BRII submitted their On March 15, 1989, claimants filed their "Supplement 2. Respondents AIBC and Brown & Root are hereby
position paper. On March 4, 1988, claimants filed their to Complainants' Appeal Memorandum," together ordered, jointly and severally, to pay the 149
"Ex-Parte Motion to Expunge from the Records" the with their "newly discovered evidence" consisting of complainants, identified and listed in Annex "B"
position paper of AIBC and BRII, claiming that it was payroll records. hereof, the peso equivalent, at the time of payment,
filed out of time. On April 5, 1989, AIBC and BRII submitted to NLRC their of the total amount in US dollars indicated opposite
On September 1, 1988, the claimants represented by "Manifestation," stating among other matters that their respective names;
Atty. De Castro filed their memorandum in POEA Case there were only 728 named claimants. On April 20, 3. The awards given by the POEA to the 19
No. L-86-05-460. On September 6, 1988, AIBC and BRII 1989, the claimants filed their "Counter- complainants classified and listed in Annex "C"
submitted their Supplemental Memorandum. On Manifestation," alleging that there were 1,767 of hereof, who appear to have worked elsewhere than
September 12, 1988, BRII filed its "Reply to them. in Bahrain are hereby set aside.
Complainant's Memorandum." On October 26, 1988, On July 27, 1989, claimants filed their "Urgent Motion 4. All claims other than those indicated in Annex "B",
claimants submitted their "Ex-Parte Manifestational for Execution" of the Decision dated January 30, 1989 including those for overtime work and favorably
Motion and Counter-Supplemental Motion," together on the grounds that BRII had failed to appeal on time granted by the POEA, are hereby dismissed for lack of
with 446 individual contracts of employments and and AIBC had not posted the supersedeas bond in the substantial evidence in support thereof or are beyond
amount of $824,652.44. the competence of this Commission to pass upon.
 In addition, this Commission, in the exercise of its second, by the claimants represented by Atty. De dated September 3, 1992 (G.R. No. 104776, Rollo, pp.
powers and authority under Article 218(c) of the Castro; and the third, by AIBC and BRII. 364-507);
Labor Code, as amended by R.A. 6715, hereby directs In its Resolution dated March 24, 1992, NLRC denied 3) Joint Manifestation and Motion involving claimant
Labor Arbiter Fatima J. Franco of this Commission to all the motions for reconsideration. Jose
summon parties, conduct hearings and receive Hence, these petitions filed by the claimants M. Aban and 36 co-claimants dated September 17,
evidence, as expeditiously as possible, and thereafter represented by Atty. Del Mundo (G.R. No. 104776), the 1992 (G.R. Nos. 105029-32, Rollo, pp. 613-722; G.R.
submit a written report to this Commission (First claimants represented by Atty. De Castro (G.R. Nos. No. 104776, Rollo, pp. 518-626; G.R. Nos. 104911-14,
Division) of the proceedings taken, regarding the 104911-14) and by AIBC and BRII (G.R. Nos. 105029- Rollo, pp. 407-516);
claims of the following: 32). 4) Joint Manifestation and Motion involving claimant
(a) complainants identified and listed in Annex "D" II Antonio T. Anglo and 17 co-claimants dated October
attached and made an integral part of this Resolution, Compromise Agreements 14, 1992 (G.R. Nos.
whose claims were dismissed by the POEA for lack of Before this Court, the claimants represented by Atty. 105029-32, Rollo, pp. 778-843; G.R. No. 104776,
proof of employment in Bahrain (these complainants De Castro and AIBC and BRII have submitted, from Rollo, pp. 650-713; G.R. Nos. 104911-14, Rollo, pp.
numbering 683, are listed in pages 13 to 23 of the time to time, compromise agreements for our 530-590);
decision of POEA, subject of the appeals) and, approval and jointly moved for the dismissal of their 5) Joint Manifestation and Motion involving claimant
(b) complainants identified and listed in Annex "E" respective petitions insofar as the claimants-parties to Dionisio Bobongo and 6 co-claimants dated January
attached and made an integral part of this Resolution, the compromise agreements were concerned (See 15, 1993 (G.R. No. 104776, Rollo, pp. 813-836; G.R.
whose awards decreed by the POEA, to Our mind, are Annex A for list of claimants who signed quitclaims). Nos. 104911-14, Rollo, pp. 629-652);
not supported by substantial evidence" (G.R. No. Thus the following manifestations that the parties had 6) Joint Manifestation and Motion involving claimant
104776; Rollo, pp. 113-115; G.R. Nos. 104911-14, pp. arrived at a compromise agreement and the Valerio A. Evangelista and 4 co-claimants dated
85-87; G.R. Nos. 105029-31, pp. 120-122). corresponding motions for the approval of the March 10, 1993 (G.R. Nos. 104911-14, Rollo, pp. 731-
On November 27, 1991, claimant Amado S. Tolentino agreements were filed by the parties and approved by 746; G.R. No. 104776, Rollo, pp. 1815-1829);
and 12 the Court: 7) Joint Manifestation and Motion involving claimants
co-claimants, who were former clients of Atty. Del 1) Joint Manifestation and Motion involving claimant Palconeri Banaag and 5 co-claimants dated March 17,
Mundo, filed a petition for certiorari with the Supreme Emigdio Abarquez and 47 co-claimants dated 1993 (G.R. No. 104776, Rollo, pp. 1657-1703; G.R.
Court (G.R. Nos. 120741-44). The petition was September 2, 1992 (G.R. Nos. 104911-14, Rollo, pp. Nos. 104911-14, Rollo, pp. 655-675);
dismissed in a resolution dated January 27, 1992. 263-406; G.R. Nos. 105029-32, Rollo, pp. 8) Joint Manifestation and Motion involving claimant
Three motions for reconsideration of the September 2, 470-615); Benjamin Ambrosio and 15 other co-claimants dated
1991 Resolution of the NLRC were filed. The first, by 2) Joint Manifestation and Motion involving May 4, 1993 (G.R. Nos. 105029-32, Rollo, pp. 906-956;
the claimants represented by Atty. Del Mundo; the petitioner Bienvenido Cadalin and 82 co-petitioners G.R. Nos. 104911-14, Rollo, pp. 679-729; G.R. No.
104776, Rollo, pp. 1773-1814);
9) Joint Manifestation and Motion involving Valerio III —————
Evangelista and 3 co-claimants dated May 10, 1993 The facts as found by the NLRC are as follows: (4) Basic Working Hours Per Week :————————
(G.R. No. 104776, Rollo, pp. 1815-1829); We have taken painstaking efforts to sift over the —
10) Joint Manifestation and Motion involving more than fifty volumes now comprising the records (5) Basic Working Hours Per Month :———————
petitioner Quiterio R. Agudo and 36 co-claimants of these cases. From the records, it appears that the ——
dated June 14, 1993 (G.R. Nos. 105029-32, Rollo, pp. complainants-appellants allege that they were (6) Basic Hourly Rate :—————————
974-1190; G.R. Nos. 104911-14, Rollo, pp. 748-864; recruited by respondent-appellant AIBC for its (7) Overtime Rate Per Hour :—————————
G.R. No. 104776, Rollo, pp. 1066-1183); accredited foreign principal, Brown & Root, on (8) Projected Period of Service
11) Joint Manifestation and Motion involving various dates from 1975 to 1983. They were all (Subject to C(1) of this [sic]) :—————————
claimant Arnaldo J. Alonzo and 19 co-claimants dated deployed at various projects undertaken by Brown & Months and/or
July 22, 1993 (G.R. No. 104776, Rollo, pp. 1173-1235; Root in several countries in the Middle East, such as Job Completion
G.R. Nos. 105029-32, Rollo, pp. 1193-1256; G.R. Nos. Saudi Arabia, Libya, United Arab Emirates and xxx xxx xxx
104911-14, Rollo, pp. 896-959); Bahrain, as well as in Southeast Asia, in Indonesia and 3. HOURS OF WORK AND COMPENSATION
12) Joint Manifestation and Motion involving Malaysia. a) The Employee is employed at the hourly rate and
claimant Ricardo C. Dayrit and 2 co-claimants dated Having been officially processed as overseas contract overtime rate as set out in Part B of this Document.
September 7, 1993 (G.R. Nos. workers by the Philippine Government, all the b) The hours of work shall be those set forth by the
105029-32, Rollo, pp. 1266-1278; G.R. No. 104776, individual complainants signed standard overseas Employer, and Employer may, at his sole option,
Rollo, pp. 1243-1254; G.R. Nos. 104911-14, Rollo, pp. employment contracts (Records, Vols. 25-32. change or adjust such hours as maybe deemed
972-984); Hereafter, reference to the records would be necessary from time to time.
13) Joint Manifestation and Motion involving sparingly made, considering their chaotic 4. TERMINATION
claimant Dante C. Aceres and 37 co-claimants dated arrangement) with AIBC before their departure from a) Notwithstanding any other terms and conditions of
September 8, 1993 (G.R. No. 104776, Rollo, pp. 1257- the Philippines. These overseas employment this agreement, the Employer may, at his sole
1375; G.R. Nos. 104911-14, Rollo, pp. 987-1105; G.R. contracts invariably contained the following relevant discretion, terminate employee's service with cause,
Nos. 105029-32, Rollo, pp. 1280-1397); terms and conditions. under this agreement at any time. If the Employer
14) Joint Manifestation and Motion involving Vivencio PART B — terminates the services of the Employee under this
V. Abella and 27 co-claimants dated January 10, 1994 (1) Employment Position Classification :—————— Agreement because of the completion or
(G.R. Nos. 105029-32, Rollo, Vol. II); ——— termination, or suspension of the work on which the
15) Joint Manifestation and Motion involving (Code) :————————— Employee's services were being utilized, or because of
Domingo B. Solano and six co-claimants dated August (2) Company Employment Status :———————— a reduction in force due to a decrease in scope of such
25, 1994 (G.R. Nos. 105029-32; G.R. No. 104776; G.R. — work, or by change in the type of construction of such
Nos. 104911-14). (3) Date of Employment to Commence on :———— work. The Employer will be responsible for his return
transportation to his country of origin. Normally on the Labour Law for the Private Sector (Records, Vol. A worker shall be entitled to such leave upon a
the most expeditious air route, economy class 18). This decree took effect on August 16, 1976. Some quantum meruit in respect of the proportion of his
accommodation. of the provisions of Amiri Decree No. 23 that are service in that year.
xxx xxx xxx relevant to the claims of the complainants-appellants Art. 107: A contract of employment made for a period
10. VACATION/SICK LEAVE BENEFITS are as follows (italics supplied only for emphasis): of indefinite duration may be terminated by either
a) After one (1) year of continuous service and/or Art. 79: . . . A worker shall receive payment for each party thereto after giving the other party thirty days'
satisfactory completion of contract, employee shall extra hour equivalent to his wage entitlement prior notice before such termination, in writing, in
be entitled to 12-days vacation leave with pay. This increased by a minimum of twenty-five per centum respect of monthly paid workers and fifteen days'
shall be computed at the basic wage rate. Fractions of thereof for hours worked during the day; and by a notice in respect of other workers. The party
a year's service will be computed on a pro-rata basis. minimum of fifty per centum thereof for hours worked terminating a contract without giving the required
b) Sick leave of 15-days shall be granted to the during the night which shall be deemed to being from notice shall pay to the other party compensation
employee for every year of service for non-work seven o'clock in the evening until seven o'clock in the equivalent to the amount of wages payable to the
connected injuries or illness. If the employee failed to morning. . . . worker for the period of such notice or the unexpired
avail of such leave benefits, the same shall be Art. 80: Friday shall be deemed to be a weekly day of portion thereof.
forfeited at the end of the year in which said sick leave rest on full pay. Art. 111: . . . the employer concerned shall pay to such
is granted. . . . an employer may require a worker, with his worker, upon termination of employment, a leaving
11. BONUS consent, to work on his weekly day of rest if indemnity for the period of his employment calculated
A bonus of 20% (for offshore work) of gross income circumstances so require and in respect of which an on the basis of fifteen days' wages for each year of the
will be accrued and payable only upon satisfactory additional sum equivalent to 150% of his normal wage first three years of service and of one month's wages
completion of this contract. shall be paid to him. . . . for each year of service thereafter. Such worker shall
12. OFFDAY PAY Art. 81: . . . When conditions of work require the be entitled to payment of leaving indemnity upon a
The seventh day of the week shall be observed as a worker to work on any official holiday, he shall be paid quantum meruit in proportion to the period of his
day of rest with 8 hours regular pay. If work is an additional sum equivalent to 150% of his normal service completed within a year.
performed on this day, all hours work shall be paid at wage. All the individual complainants-appellants have
the premium rate. However, this offday pay provision Art. 84: Every worker who has completed one year's already been repatriated to the Philippines at the
is applicable only when the laws of the Host Country continuous service with his employer shall be entitled time of the filing of these cases (R.R. No. 104776,
require payments for rest day. to leave on full pay for a period of not less than 21 Rollo, pp. 59-65).
In the State of Bahrain, where some of the individual days for each year increased to a period not less than IV
complainants were deployed, His Majesty Isa Bin 28 days after five continuous years of service. The issues raised before and resolved by the NLRC
Salman Al Kaifa, Amir of Bahrain, issued his Amiri were:
Decree No. 23 on June 16, 1976, otherwise known as
First: — Whether or not complainants are entitled to (e) Whether or not the awards based on the averages i. Refund of SSS premiums not remitted to SSS;
the benefits provided by Amiri Decree No. 23 of and formula presented by the complainants- j. Refund of withholding tax not remitted to BIR;
Bahrain; appellants are supported by substantial evidence; k. Fringe benefits under B & R's "A Summary of
(a) Whether or not the complainants who have (f) Whether or not the POEA awarded sums beyond Employee Benefits" (Annex "Q" of Amended
worked in Bahrain are entitled to the above- what the complainants-appellants prayed for; and, if Complaint);
mentioned benefits. so, whether or not these awards are valid. l. Moral and exemplary damages;
(b) Whether or not Art. 44 of the same Decree Fifth: — Whether or not the POEA erred in holding m. Attorney's fees of at least ten percent of the
(allegedly prescribing a more favorable treatment of respondents AIBC and Brown & Root jointly are judgment award;
alien employees) bars complainants from enjoying its severally liable for the judgment awards despite the n. Other reliefs, like suspending and/or cancelling
benefits. alleged finding that the former was the employer of the license to recruit of AIBC and the accreditation of
Second: — Assuming that Amiri Decree No. 23 of the complainants; B & R issued by POEA;
Bahrain is applicable in these cases, whether or not (a) Whether or not the POEA has acquired o. Penalty for violations of Article 34 (prohibited
complainants' claim for the benefits provided therein jurisdiction over Brown & Root; practices), not excluding reportorial requirements
have prescribed. (b) Whether or not the undisputed fact that AIBC was thereof.
Third: — Whether or not the instant cases qualify as a a licensed construction contractor precludes a Eighth: — Whether or not the POEA Administrator
class suit. finding that Brown & Root is liable for complainants erred in not dismissing POEA Case No. (L) 86-65-460
Fourth: — Whether or not the proceedings conducted claims. on the ground of multiplicity of suits (G.R. Nos.
by the POEA, as well as the decision that is the subject Sixth: — Whether or not the POEA Administrator's 104911-14, Rollo, pp. 25-29, 51-55).
of these appeals, conformed with the requirements failure to hold respondents in default constitutes a Anent the first issue, NLRC set aside Section 1, Rule 129
of due process; reversible error. of the 1989 Revised Rules on Evidence governing the
(a) Whether or not the respondent-appellant was Seventh: — Whether or not the POEA Administrator pleading and proof of a foreign law and admitted in
denied its right to due process; erred in dismissing the following claims: evidence a simple copy of the Bahrain's Amiri Decree
(b) Whether or not the admission of evidence by the a. Unexpired portion of contract; No. 23 of 1976 (Labour Law for the Private Sector).
POEA after these cases were submitted for decision b. Interest earnings of Travel and Reserve Fund; NLRC invoked Article 221 of the Labor Code of the
was valid; c. Retirement and Savings Plan benefits; Philippines, vesting on the Commission ample
(c) Whether or not the POEA acquired jurisdiction d. War Zone bonus or premium pay of at least 100% discretion to use every and all reasonable means to
over Brown & Root International, Inc.; of basic pay; ascertain the facts in each case without regard to the
(d) Whether or not the judgment awards are e. Area Differential Pay; technicalities of law or procedure. NLRC agreed with
supported by substantial evidence; f. Accrued interests on all the unpaid benefits; the POEA Administrator that the Amiri Decree No. 23,
g. Salary differential pay; being more favorable and beneficial to the workers,
h. Wage differential pay;
should form part of the overseas employment contract BRII was the actual employer of the complainants, or (6) that the POEA Administrator has no jurisdiction
of the complainants. at the very least, the indirect employer, with AIBC as over the complaint for the suspension or cancellation
NLRC, however, held that the Amiri Decree No. 23 the labor contractor. of the AIBC's recruitment license and the cancellation
applied only to the claimants, who worked in Bahrain, NLRC also held that jurisdiction over BRII was acquired of the accreditation of BRII.
and set aside awards of the POEA Administrator in by the POEA Administrator through the summons NLRC passed sub silencio the last issue, the claim that
favor of the claimants, who worked elsewhere. served on AIBC, its local agent. POEA Case No. (L) 86-65-460 should have been
On the second issue, NLRC ruled that the prescriptive On the sixth issue, NLRC held that the POEA dismissed on the ground that the claimants in said case
period for the filing of the claims of the complainants Administrator was correct in denying the Motion to were also claimants in POEA Case No. (L) 84-06-555.
was three years, as provided in Article 291 of the Labor Declare AIBC in default. Instead of dismissing POEA Case No. (L) 86-65-460, the
Code of the Philippines, and not ten years as provided On the seventh issue, which involved other money POEA just resolved the corresponding claims in POEA
in Article 1144 of the Civil Code of the Philippines nor claims not based on the Amiri Decree No. 23, NLRC Case No. (L) 84-06-555. In other words, the POEA did
one year as provided in the Amiri Decree No. 23 of ruled: not pass upon the same claims twice.
1976. (1) that the POEA Administrator has no jurisdiction V
On the third issue, NLRC agreed with the POEA over the claims for refund of the SSS premiums and G.R. No. 104776
Administrator that the labor cases cannot be treated refund of withholding taxes and the claimants should Claimants in G.R. No. 104776 based their petition for
as a class suit for the simple reason that not all the file their claims for said refund with the appropriate certiorari on the following grounds:
complainants worked in Bahrain and therefore, the government agencies; (1) that they were deprived by NLRC and the POEA of
subject matter of the action, the claims arising from (2) the claimants failed to establish that they are their right to a speedy disposition of their cases as
the Bahrain law, is not of common or general interest entitled to the claims which are not based on the guaranteed by Section 16, Article III of the 1987
to all the complainants. overseas employment contracts nor the Amiri Decree Constitution. The POEA Administrator allowed private
On the fourth issue, NLRC found at least three No. 23 of 1976; respondents to file their answers in two years (on June
infractions of the cardinal rules of administrative due (3) that the POEA Administrator has no jurisdiction 19, 1987) after the filing of the original complaint (on
process: namely, (1) the failure of the POEA over claims for moral and exemplary damages and April 2, 1985) and NLRC, in total disregard of its own
Administrator to consider the evidence presented by nonetheless, the basis for granting said damages was rules, affirmed the action of the POEA Administrator;
AIBC and BRII; (2) some findings of fact were not not established; (2) that NLRC and the POEA Administrator should have
supported by substantial evidence; and (3) some of the (4) that the claims for salaries corresponding to the declared AIBC and BRII in default and should have
evidence upon which the decision was based were not unexpired portion of their contract may be allowed if rendered summary judgment on the basis of the
disclosed to AIBC and BRII during the hearing. filed within the three-year prescriptive period; pleadings and evidence submitted by claimants;
On the fifth issue, NLRC sustained the ruling of the (5) that the allegation that complainants were (3) the NLRC and POEA Administrator erred in not
POEA Administrator that BRII and AIBC are solidarily prematurely repatriated prior to the expiration of their holding that the labor cases filed by AIBC and BRII
liable for the claims of the complainants and held that overseas contract was not established; and cannot be considered a class suit;
(4) that the prescriptive period for the filing of the to himself and depending upon the particular On December 14, 1992, Atty. Del Mundo filed a
claims is ten years; and circumstances obtaining in his case; "Notice and Claim to Enforce Attorney's Lien," alleging
(5) that NLRC and the POEA Administrator should have (4) that the prescriptive period for filing the claims is that the claimants who entered into compromise
dismissed POEA Case No. L-86-05-460, the case filed by that prescribed by Article 291 of the Labor Code of the agreements with AIBC and BRII with the assistance of
Atty. Florante de Castro (Rollo, pp. 31-40). Philippines (three years) and not the one prescribed Atty. De Castro, had all signed a retainer agreement
AIBC and BRII, commenting on the petition in G.R. No. by Article 1144 of the Civil Code of the Philippines (ten with his law firm (G.R. No. 104776, Rollo, pp. 623-624;
104776, argued: years); and 838-1535).
(1) that they were not responsible for the delay in the (5) that they are not concerned with the issue of Contempt of Court
disposition of the labor cases, considering the great whether POEA Case No. L-86-05-460 should be On February 18, 1993, an omnibus motion was filed by
difficulty of getting all the records of the more than dismissed, this being a private quarrel between the Atty. Del Mundo to cite Atty. De Castro and Atty. Katz
1,500 claimants, the piece-meal filing of the two labor lawyers (Rollo, pp. 292-305). Tierra for contempt of court and for violation of
complaints and the addition of hundreds of new Attorney's Lien Canons 1, 15 and 16 of the Code of Professional
claimants by petitioners; On November 12, 1992, Atty. Gerardo A. del Mundo Responsibility. The said lawyers allegedly misled this
(2) that considering the number of complaints and moved to strike out the joint manifestations and Court, by making it appear that the claimants who
claimants, it was impossible to prepare the answers motions of AIBC and BRII dated September 2 and 11, entered into the compromise agreements were
within the ten-day period provided in the NLRC Rules, 1992, claiming that all the claimants who entered into represented by Atty. De Castro, when in fact they were
that when the motion to declare AIBC in default was the compromise agreements subject of said represented by Atty. Del Mundo (G.R. No. 104776,
filed on July 19, 1987, said party had already filed its manifestations and motions were his clients and that Rollo, pp. 1560-1614).
answer, and that considering the staggering amount of Atty. Florante M. de Castro had no right to represent On September 23, 1994, Atty. Del Mundo reiterated
the claims (more than US$50,000,000.00) and the them in said agreements. He also claimed that the his charges against Atty. De Castro for unethical
complicated issues raised by the parties, the ten-day claimants were paid less than the award given them by practices and moved for the voiding of the quitclaims
rule to answer was not fair and reasonable; NLRC; that Atty. De Castro collected additional submitted by some of the claimants.
(3) that the claimants failed to refute NLRC's finding attorney's fees on top of the 25% which he was G.R. Nos. 104911-14
that entitled to receive; and that the consent of the The claimants in G.R. Nos. 104911-14 based their
there was no common or general interest in the claimants to the compromise agreements and petition for certiorari on the grounds that NLRC gravely
subject matter of the controversy — which was the quitclaims were procured by fraud (G.R. No. 104776, abused its discretion when it: (1) applied the three-
applicability of the Amiri Decree No. 23. Likewise, the Rollo, pp. 838-810). In the Resolution dated November year prescriptive period under the Labor Code of the
nature of the claims varied, some being based on 23, 1992, the Court denied the motion to strike out the Philippines; and (2) it denied the claimant's formula
salaries pertaining to the unexpired portion of the Joint Manifestations and Motions dated September 2 based on an average overtime pay of three hours a day
contracts while others being for pure money claims. and 11, 1992 (G.R. Nos. 104911-14, Rollo, pp. 608- (Rollo, pp. 18-22).
Each claimant demanded separate claims peculiar only 609).
The claimants argue that said method was proposed to hold new hearings for the 683 claimants whose These money claims (under Article 291 of the Labor
by BRII itself during the negotiation for an amicable claims had been dismissed for lack of proof by the Code) refer to those arising from the employer's
settlement of their money claims in Bahrain as shown POEA Administrator or NLRC itself. Lastly, they allege violation of the employee's right as provided by the
in the Memorandum dated April 16, 1983 of the that assuming that the Amiri Decree No. 23 of 1976 Labor Code.
Ministry of Labor of Bahrain (Rollo, pp. 21-22). was applicable, NLRC erred when it did not apply the In the instant case, what the respondents violated are
BRII and AIBC, in their Comment, reiterated their one-year prescription provided in said law (Rollo, pp. not the rights of the workers as provided by the Labor
contention in G.R. No. 104776 that the prescriptive 29-30). Code, but the provisions of the Amiri Decree No. 23
period in the Labor Code of the Philippines, a special VI issued in Bahrain, which ipso facto amended the
law, prevails over that provided in the Civil Code of the G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos. worker's contracts of employment. Respondents
Philippines, a general law. 105029-32 consciously failed to conform to these provisions
As to the memorandum of the Ministry of Labor of All the petitions raise the common issue of which specifically provide for the increase of the
Bahrain on the method of computing the overtime prescription although they disagreed as to the time worker's rate. It was only after June 30, 1983, four
pay, BRII and AIBC claimed that they were not bound that should be embraced within the prescriptive months after the brown builders brought a suit against
by what appeared therein, because such period. B & R in Bahrain for this same claim, when respondent
memorandum was proposed by a subordinate Bahrain To the POEA Administrator, the prescriptive period AIBC's contracts have undergone amendments in
official and there was no showing that it was approved was ten years, applying Article 1144 of the Civil Code Bahrain for the new hires/renewals (Respondent's
by the Bahrain Minister of Labor. Likewise, they of the Philippines. NLRC believed otherwise, fixing the Exhibit 7).
claimed that the averaging method was discussed in prescriptive period at three years as provided in Article Hence, premises considered, the applicable law of
the course of the negotiation for the amicable 291 of the Labor Code of the Philippines. prescription to this instant case is Article 1144 of the
settlement of the dispute and any offer made by a The claimants in G.R. No. 104776 and G.R. Nos. Civil Code of the Philippines, which provides:
party therein could not be used as an admission by him 104911-14, invoking different grounds, insisted that Art. 1144. The following actions may be brought
(Rollo, pp. 228-236). NLRC erred in ruling that the prescriptive period within ten years from the time the cause of action
G.R. Nos. 105029-32 applicable to the claims was three years, instead of ten accrues:
In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC years, as found by the POEA Administrator. (1) Upon a written contract;
gravely abused its discretion when it: (1) enforced the The Solicitor General expressed his personal view that (2) Upon an obligation created by law;
provisions of the Amiri Decree No. 23 of 1976 and not the prescriptive period was one year as prescribed by Thus, herein money claims of the complainants against
the terms of the employment contracts; (2) granted the Amiri Decree No. 23 of 1976 but he deferred to the the respondents shall prescribe in ten years from
claims for holiday, overtime and leave indemnity pay ruling of NLRC that Article 291 of the Labor Code of the August 16, 1976. Inasmuch as all claims were filed
and other benefits, on evidence admitted in Philippines was the operative law. within the ten-year prescriptive period, no claim
contravention of petitioner's constitutional right to The POEA Administrator held the view that: suffered the infirmity of being prescribed (G.R. No.
due process; and (3) ordered the POEA Administrator 104776, Rollo, 89-90).
In overruling the POEA Administrator, and holding that 152, 2d Cir. [1955], where the issue was the a basis of social justice, so that, without injuring any
the prescriptive period is three years as provided in applicability of the Panama Labor Code in a case filed of the parties, there may be guaranteed for labor the
Article 291 of the Labor Code of the Philippines, the in the State of New York for claims arising from said necessary conditions for a normal life and to capital
NLRC argued as follows: Code. In said case, the claims would have prescribed an equitable return to its investment." In pursuance
The Labor Code provides that "all money claims arising under the Panamanian Law but not under the Statute of these objectives the Code gives laborers various
from employer-employee relations . . . shall be filed of Limitations of New York. The U.S. Circuit Court of rights against their employers. Article 623 establishes
within three years from the time the cause of action Appeals held that the Panamanian Law was procedural the period of limitation for all such rights, except
accrued; otherwise they shall be forever barred" (Art. as it was not "specifically intended to be substantive," certain ones which are enumerated in Article 621.
291, Labor Code, as amended). This three-year hence, the prescriptive period provided in the law of And there is nothing in the record to indicate that the
prescriptive period shall be the one applied here and the forum should apply. The Court observed: Panamanian legislature gave special consideration to
which should be reckoned from the date of . . . And where, as here, we are dealing with a statute the impact of Article 623 upon the particular rights
repatriation of each individual complainant, of limitations of a foreign country, and it is not clear on sought to be enforced here, as distinguished from the
considering the fact that the case is having (sic) filed in the face of the statute that its purpose was to limit the other rights to which that Article is also applicable.
this country. We do not agree with the POEA enforceability, outside as well as within the foreign Were we confronted with the question of whether
Administrator that this three-year prescriptive period country concerned, of the substantive rights to which the limitation period of Article 621 (which carves out
applies only to money claims specifically recoverable the statute pertains, we think that as a yardstick for particular rights to be governed by a shorter
under the Philippine Labor Code. Article 291 gives no determining whether that was the purpose this test is limitation period) is to be regarded as "substantive"
such indication. Likewise, We can not consider the most satisfactory one. It does not lead American or "procedural" under the rule of "specifity" we might
complainants' cause/s of action to have accrued from courts into the necessity of examining into the have a different case; but here on the surface of
a violation of their employment contracts. There was unfamiliar peculiarities and refinements of different things we appear to be dealing with a "broad," and
no violation; the claims arise from the benefits of the foreign legal systems. . . not a "specific," statute of limitations (G.R. No.
law of the country where they worked. (G.R. No. The court further noted: 104776, Rollo, pp.
104776, Rollo, pp. xxx xxx xxx 92-94).
90-91). Applying that test here it appears to us that the Claimants in G.R. Nos. 104911-14 are of the view that
Anent the applicability of the one-year prescriptive libelant is entitled to succeed, for the respondents Article 291 of the Labor Code of the Philippines, which
period as provided by the Amiri Decree No. 23 of 1976, have failed to satisfy us that the Panamanian period was applied by NLRC, refers only to claims "arising
NLRC opined that the applicability of said law was one of limitation in question was specifically aimed from the employer's violation of the employee's right
of characterization, i.e., whether to characterize the against the particular rights which the libelant seeks as provided by the Labor Code." They assert that their
foreign law on prescription or statute of limitation as to enforce. The Panama Labor Code is a statute having claims are based on the violation of their employment
"substantive" or "procedural." NLRC cited the decision broad objectives, viz: "The present Code regulates the contracts, as amended by the Amiri Decree No. 23 of
in Bournias v. Atlantic Maritime Company (220 F. 2d. relations between capital and labor, placing them on 1976 and therefore the claims may be brought within
ten years as provided by Article 1144 of the Civil Code procedural or substantive, depending on the repealed only those provisions of the Code of Civil
of the Philippines (Rollo, G.R. Nos. 104911-14, pp. characterization given such a law. Procedures as to which were inconsistent with it.
18-21). To bolster their contention, they cite PALEA v. Thus in Bournias v. Atlantic Maritime Company, supra, There is no provision in the Civil Code of the
Philippine Airlines, Inc., 70 SCRA 244 (1976). the American court applied the statute of limitations Philippines, which is inconsistent with or contradictory
AIBC and BRII, insisting that the actions on the claims of New York, instead of the Panamanian law, after to Section 48 of the Code of Civil Procedure (Paras,
have prescribed under the Amiri Decree No. 23 of finding that there was no showing that the Philippine Conflict of Laws 104 [7th ed.]).
1976, argue that there is in force in the Philippines a Panamanian law on prescription was intended to be In the light of the 1987 Constitution, however, Section
"borrowing law," which is Section 48 of the Code of substantive. Being considered merely a procedural law 48 cannot be enforced ex proprio vigore insofar as it
Civil Procedure and that where such kind of law exists, even in Panama, it has to give way to the law of the ordains the application in this jurisdiction of Section
it takes precedence over the common-law conflicts forum on prescription of actions. 156 of the Amiri Decree No. 23 of 1976.
rule (G.R. No. 104776, Rollo, pp. 45-46). However, the characterization of a statute into a The courts of the forum will not enforce any foreign
First to be determined is whether it is the Bahrain law procedural or substantive law becomes irrelevant claim obnoxious to the forum's public policy (Canadian
on prescription of action based on the Amiri Decree when the country of the forum has a "borrowing Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct.
No. 23 of 1976 or a Philippine law on prescription that statute." Said statute has the practical effect of 402, 64 L. ed. 713 [1920]). To enforce the one-year
shall be the governing law. treating the foreign statute of limitation as one of prescriptive period of the Amiri Decree No. 23 of 1976
Article 156 of the Amiri Decree No. 23 of 1976 substance (Goodrich, Conflict of Laws 152-153 [1938]). as regards the claims in question would contravene the
provides: A "borrowing statute" directs the state of the forum to public policy on the protection to labor.
A claim arising out of a contract of employment shall apply the foreign statute of limitations to the pending In the Declaration of Principles and State Policies, the
not be actionable after the lapse of one year from the claims based on a foreign law (Siegel, Conflicts, 183 1987 Constitution emphasized that:
date of the expiry of the contract. (G.R. Nos. 105029- [1975]). While there are several kinds of "borrowing The state shall promote social justice in all phases of
31, Rollo, p. 226). statutes," one form provides that an action barred by national development. (Sec. 10).
As a general rule, a foreign procedural law will not be the laws of the place where it accrued, will not be The state affirms labor as a primary social economic
applied in the forum. Procedural matters, such as enforced in the forum even though the local statute force. It shall protect the rights of workers and
service of process, joinder of actions, period and has not run against it (Goodrich and Scoles, Conflict of promote their welfare (Sec. 18).
requisites for appeal, and so forth, are governed by the Laws, 152-153 [1938]). Section 48 of our Code of Civil In article XIII on Social Justice and Human Rights, the
laws of the forum. This is true even if the action is Procedure is of this kind. Said Section provides: 1987 Constitution provides:
based upon a foreign substantive law (Restatement of If by the laws of the state or country where the cause Sec. 3. The State shall afford full protection to labor,
the Conflict of Laws, Sec. 685; Salonga, Private of action arose, the action is barred, it is also barred in local and overseas, organized and unorganized, and
International Law, 131 [1979]). the Philippines Islands. promote full employment and equality of employment
A law on prescription of actions is sui generis in Conflict Section 48 has not been repealed or amended by the opportunities for all.
of Laws in the sense that it may be viewed either as Civil Code of the Philippines. Article 2270 of said Code
Having determined that the applicable law on As noted by the Court: "That is precisely why provides the prescriptive period for filing "money
prescription is the Philippine law, the next question is petitioners did not make any reference as to the claims arising from employer-employee relations." The
whether the prescriptive period governing the filing of computation for overtime work under the Eight-Hour claims in the cases at bench all arose from the
the claims is three years, as provided by the Labor Labor Law (Secs. 3 and 4, CA No. 494) and instead employer-employee relations, which is broader in
Code or ten years, as provided by the Civil Code of the insisted that work computation provided in the scope than claims arising from a specific law or from
Philippines. collective bargaining agreements between the parties the collective bargaining agreement.
The claimants are of the view that the applicable be observed. Since the claim for pay differentials is The contention of the POEA Administrator, that the
provision is Article 1144 of the Civil Code of the primarily anchored on the written contracts between three-year prescriptive period under Article 291 of the
Philippines, which provides: the litigants, the ten-year prescriptive period provided Labor Code of the Philippines applies only to money
The following actions must be brought within ten years by Art. 1144(1) of the New Civil Code should govern." claims specifically recoverable under said Code, does
from the time the right of action accrues: Section 7-a of the Eight-Hour Labor Law (CA No. 444 as not find support in the plain language of the provision.
(1) Upon a written contract; amended by R.A. No. 19933) provides: Neither is the contention of the claimants in G.R. Nos.
(2) Upon an obligation created by law; Any action to enforce any cause of action under this 104911-14 that said Article refers only to claims
(3) Upon a judgment. Act shall be commenced within three years after the "arising from the employer's violation of the
NLRC, on the other hand, believes that the applicable cause of action accrued otherwise such action shall be employee's right," as provided by the Labor Code
provision is Article 291 of the Labor Code of the forever barred, . . . . supported by the facial reading of the provision.
Philippines, which in pertinent part provides: The court further explained: VII
Money claims-all money claims arising from employer- The three-year prescriptive period fixed in the Eight- G.R. No. 104776
employee relations accruing during the effectivity of Hour Labor Law (CA No. 444 as amended) will apply, if A. As to the first two grounds for the petition in G.R.
this Code shall be filed within three (3) years from the the claim for differentials for overtime work is solely No. 104776, claimants aver: (1) that while their
time the cause of action accrued, otherwise they shall based on said law, and not on a collective bargaining complaints were filed on June 6, 1984 with POEA, the
be forever barred. agreement or any other contract. In the instant case, case was decided only on January 30, 1989, a clear
xxx xxx xxx the claim for overtime compensation is not so much denial of their right to a speedy disposition of the case;
The case of Philippine Air Lines Employees Association because of Commonwealth Act No. 444, as amended and (2) that NLRC and the POEA Administrator should
v. Philippine Air Lines, Inc., 70 SCRA 244 (1976) invoked but because the claim is demandable right of the have declared AIBC and BRII in default (Rollo, pp.
by the claimants in G.R. Nos. 104911-14 is inapplicable employees, by reason of the above-mentioned 31-35).
to the cases at bench (Rollo, p. 21). The said case collective bargaining agreement. Claimants invoke a new provision incorporated in the
involved the correct computation of overtime pay as Section 7-a of the Eight-Hour Labor Law provides the 1987 Constitution, which provides:
provided in the collective bargaining agreements and prescriptive period for filing "actions to enforce any Sec. 16. All persons shall have the right to a speedy
not the Eight-Hour Labor Law. cause of action under said law." On the other hand, disposition of their cases before all judicial, quasi-
Article 291 of the Labor Code of the Philippines judicial, or administrative bodies.
It is true that the constitutional right to "a speedy Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298, undergone several amendments, the first being on
disposition of cases" is not limited to the accused in (1991), we held: April 3, 1985.
criminal proceedings but extends to all parties in all It must be here emphasized that the right to a speedy The claimants were hired on various dates from 1975
cases, including civil and administrative cases, and in disposition of a case, like the right to speedy trial, is to 1983. They were deployed in different areas, one
all proceedings, including judicial and quasi-judicial deemed violated only when the proceeding is group in and the other groups outside of, Bahrain. The
hearings. Hence, under the Constitution, any party to attended by vexatious, capricious, and oppressive monetary claims totalling more than US$65 million
a case may demand expeditious action on all officials delays; or when unjustified postponements of the trial according to Atty. Del Mundo, included:
who are tasked with the administration of justice. are asked for and secured, or when without cause or 1. Unexpired portion of contract;
However, as held in Caballero v. Alfonso, Jr., 153 SCRA justified motive a long period of time is allowed to 2. Interest earnings of Travel and Fund;
153 (1987), "speedy disposition of cases" is a relative elapse without the party having his case tried. 3. Retirement and Savings Plan benefit;
term. Just like the constitutional guarantee of "speedy Since July 25, 1984 or a month after AIBC and BRII were 4. War Zone bonus or premium pay of at least 100%
trial" accorded to the accused in all criminal served with a copy of the amended complaint, of basic pay;
proceedings, "speedy disposition of cases" is a flexible claimants had been asking that AIBC and BRII be 5. Area Differential pay;
concept. It is consistent with delays and depends upon declared in default for failure to file their answers 6. Accrued Interest of all the unpaid benefits;
the circumstances of each case. What the Constitution within the ten-day period provided in Section 1, Rule 7. Salary differential pay;
prohibits are unreasonable, arbitrary and oppressive III of Book VI of the Rules and Regulations of the POEA. 8. Wage Differential pay;
delays which render rights nugatory. At that time, there was a pending motion of AIBC and 9. Refund of SSS premiums not remitted to Social
Caballero laid down the factors that may be taken into BRII to strike out of the records the amended Security System;
consideration in determining whether or not the right complaint and the "Compliance" of claimants to the 10. Refund of Withholding Tax not remitted to Bureau
to a "speedy disposition of cases" has been violated, order of the POEA, requiring them to submit a bill of of Internal Revenue (B.I.R.);
thus: particulars. 11. Fringe Benefits under Brown & Root's "A
In the determination of whether or not the right to a The cases at bench are not of the run-of-the-mill Summary of Employees Benefits consisting of 43
"speedy trial" has been violated, certain factors may variety, such that their final disposition in the pages (Annex "Q" of Amended Complaint);
be considered and balanced against each other. These administrative level after seven years from their 12. Moral and Exemplary Damages;
are length of delay, reason for the delay, assertion of inception, cannot be said to be attended by 13. Attorney's fees of at least ten percent of amounts;
the right or failure to assert it, and prejudice caused by unreasonable, arbitrary and oppressive delays as to 14. Other reliefs, like suspending and/or cancelling
the delay. The same factors may also be considered in violate the constitutional rights to a speedy disposition the license to recruit of AIBC and issued by the POEA;
answering judicial inquiry whether or not a person of the cases of complainants. and
officially charged with the administration of justice has The amended complaint filed on June 6, 1984 involved 15. Penalty for violation of Article 34 (Prohibited
violated the speedy disposition of cases. a total of 1,767 claimants. Said complaint had practices) not excluding reportorial requirements
 thereof (NLRC Resolution, September 2, 1991, pp. 18- NLRC blamed the parties and their lawyers for the The bickerings by these two counsels are reflected in
19; G.R. No. 104776, Rollo, pp. 73-74). delay in terminating the proceedings, thus: their pleadings. In the charges and countercharges of
Inasmuch as the complaint did not allege with These cases could have been spared the long and falsification of documents and signatures, and in the
sufficient definiteness and clarity of some facts, the arduous route towards resolution had the parties and disbarment proceedings by one against the other. All
claimants were ordered to comply with the motion of their counsel been more interested in pursuing the these have, to a large extent, abetted in confounding
AIBC for a bill of particulars. When claimants filed their truth and the merits of the claims rather than the issues raised in these cases, jumble the
"Compliance and Manifestation," AIBC moved to strike exhibiting a fanatical reliance on technicalities. Parties presentation of evidence, and even derailed the
out the complaint from the records for failure of and counsel have made these cases a litigation of prospects of an amicable settlement. It would not be
claimants to submit a proper bill of particulars. While emotion. The intransigence of parties and counsel is far-fetched to imagine that both counsel, unwittingly,
the POEA Administrator denied the motion to strike remarkable. As late as last month, this Commission perhaps, painted a rainbow for the complainants, with
out the complaint, he ordered the claimants "to made a last and final attempt to bring the counsel of the proverbial pot of gold at its end containing more
correct the deficiencies" pointed out by AIBC. all the parties (this Commission issued a special order than US$100 million, the aggregate of the claims in
Before an intelligent answer could be filed in response directing respondent Brown & Root's resident agent/s these cases. It is, likewise, not improbable that their
to the complaint, the records of employment of the to appear) to come to a more conciliatory stance. Even misplaced zeal and exuberance caused them to throw
more than 1,700 claimants had to be retrieved from this failed (Rollo, all caution to the wind in the matter of elementary
various countries in the Middle East. Some of the p. 58). rules of procedure and evidence (Rollo, pp. 58-59).
records dated as far back as 1975. The squabble between the lawyers of claimants added Adding to the confusion in the proceedings before
The hearings on the merits of the claims before the to the delay in the disposition of the cases, to the NLRC, is the listing of some of the complainants in both
POEA Administrator were interrupted several times by lament of NLRC, which complained: petitions filed by the two lawyers. As noted by NLRC,
the various appeals, first to NLRC and then to the It is very evident from the records that the "the problem created by this situation is that if one of
Supreme Court. protagonists in these consolidated cases appear to be the two petitions is dismissed, then the parties and the
Aside from the inclusion of additional claimants, two not only the individual complainants, on the one hand, public respondents would not know which claim of
new cases were filed against AIBC and BRII on October and AIBC and Brown & Root, on the other hand. The which petitioner was dismissed and which was not."
10, 1985 (POEA Cases Nos. two lawyers for the complainants, Atty. Gerardo Del B. Claimants insist that all their claims could properly
L-85-10-777 and L-85-10-779). Another complaint was Mundo and Atty. Florante De Castro, have yet to settle be consolidated in a "class suit" because "all the
filed on May 29, 1986 (POEA Case No. L-86-05-460). the right of representation, each one persistently named complainants have similar money claims and
NLRC, in exasperation, noted that the exact number of claiming to appear in behalf of most of the similar rights sought irrespective of whether they
claimants had never been completely established complainants. As a result, there are two appeals by the worked in Bahrain, United Arab Emirates or in Abu
(Resolution, Sept. 2, 1991, G.R. No. 104776, Rollo, p. complainants. Attempts by this Commission to resolve Dhabi, Libya or in any part of the Middle East" (Rollo,
57). All the three new cases were consolidated with counsels' conflicting claims of their respective pp. 35-38).
POEA Case No. L-84-06-555. authority to represent the complainants prove futile.
A class suit is proper where the subject matter of the in protecting the interests of the other claimants as The Anti-Forum Shopping Rule (Revised Circular No.
controversy is one of common or general interest to shown by the fact, that hundreds of them have 28-91) is intended to put a stop to the practice of some
many and the parties are so numerous that it is abandoned their co-claimants and have entered into parties of filing multiple petitions and complaints
impracticable to bring them all before the court separate compromise settlements of their respective involving the same issues, with the result that the
(Revised Rules of Court, Rule 3, Sec. 12). claims. A principle basic to the concept of "class suit" courts or agencies have to resolve the same issues.
While all the claims are for benefits granted under the is that plaintiffs brought on the record must fairly Said Rule, however, applies only to petitions filed with
Bahrain Law, many of the claimants worked outside represent and protect the interests of the others the Supreme Court and the Court of Appeals. It is
Bahrain. Some of the claimants were deployed in (Dimayuga v. Court of Industrial Relations, 101 Phil. entitled "Additional Requirements For Petitions Filed
Indonesia and Malaysia under different terms and 590 [1957]). For this matter, the claimants who with the Supreme Court and the Court of Appeals To
conditions of employment. worked in Bahrain can not be allowed to sue in a class Prevent Forum Shopping or Multiple Filing of
NLRC and the POEA Administrator are correct in their suit in a judicial proceeding. The most that can be Petitioners and Complainants." The first sentence of
stance that inasmuch as the first requirement of a class accorded to them under the Rules of Court is to be the circular expressly states that said circular applies
suit is not present (common or general interest based allowed to join as plaintiffs in one complaint (Revised to an governs the filing of petitions in the Supreme
on the Amiri Decree of the State of Bahrain), it is only Rules of Court, Rule 3, Sec. 6). Court and the Court of Appeals.
logical that only those who worked in Bahrain shall be The Court is extra-cautious in allowing class suits While Administrative Circular No. 04-94 extended the
entitled to file their claims in a class suit. because they are the exceptions to the condition sine application of the anti-forum shopping rule to the
While there are common defendants (AIBC and BRII) qua non, requiring the joinder of all indispensable lower courts and administrative agencies, said circular
and the nature of the claims is the same (for parties. took effect only on April 1, 1994.
employee's benefits), there is no common question of In an improperly instituted class suit, there would be POEA and NLRC could not have entertained the
law or fact. While some claims are based on the Amiri no problem if the decision secured is favorable to the complaint for unethical conduct against Atty. De
Law of Bahrain, many of the claimants never worked in plaintiffs. The problem arises when the decision is Castro because NLRC and POEA have no jurisdiction to
that country, but were deployed elsewhere. Thus, adverse to them, in which case the others who were investigate charges of unethical conduct of lawyers.
each claimant is interested only in his own demand impleaded by their self-appointed representatives, Attorney's Lien
and not in the claims of the other employees of would surely claim denial of due process. The "Notice and Claim to Enforce Attorney's Lien"
defendants. The named claimants have a special or C. The claimants in G.R. No. 104776 also urged that the dated December 14, 1992 was filed by Atty. Gerardo
particular interest in specific benefits completely POEA Administrator and NLRC should have declared A. Del Mundo to protect his claim for attorney's fees
different from the benefits in which the other named Atty. Florante De Castro guilty of "forum shopping, for legal services rendered in favor of the claimants
claimants and those included as members of a "class" ambulance chasing activities, falsification, duplicity (G.R. No. 104776, Rollo, pp. 841-844).
are claiming (Berses v. Villanueva, 25 Phil. 473 [1913]). and other unprofessional activities" and his A statement of a claim for a charging lien shall be filed
It appears that each claimant is only interested in appearances as counsel for some of the claimants as with the court or administrative agency which renders
collecting his own claims. A claimants has no concern illegal (Rollo, pp. 38-40). and executes the money judgment secured by the
lawyer for his clients. The lawyer shall cause written thereto i.e., minutes of the meetings between the amicable settlement of the claims and therefore it was
notice thereof to be delivered to his clients and to the Representative of the employees and the not admissible in evidence to prove that anything is
adverse party (Revised Rules of Court, Rule 138, Sec. management of the Company, the complaint filed by due to the claimants.
37). The statement of the claim for the charging lien of the employees on 14/2/83 where they have claimed as While said document was presented to the POEA
Atty. Del Mundo should have been filed with the hereinabove stated, sample of the Service Contract without observing the rule on presenting official
administrative agency that rendered and executed the executed between one of the employees and the documents of a foreign government as provided in
judgment. company through its agent in (sic) Philippines, Asia Section 24, Rule 132 of the 1989 Revised Rules on
Contempt of Court International Builders Corporation where it has been Evidence, it can be admitted in evidence in
The complaint of Atty. Gerardo A. Del Mundo to cite provided for 48 hours of work per week and an annual proceedings before an administrative body. The
Atty. Florante De Castro and Atty. Katz Tierra for leave of 12 days and an overtime wage of 1 & 1/4 of opposing parties have a copy of the said
violation of the Code of Professional Responsibility the normal hourly wage. memorandum, and they could easily verify its
should be filed in a separate and appropriate xxx xxx xxx authenticity and accuracy.
proceeding. The Company in its computation reached the following The admissibility of the offer of compromise made by
G.R. No. 104911-14 averages: BRII as contained in the memorandum is another
Claimants charge NLRC with grave abuse of discretion A. 1. The average duration of the actual service of the matter. Under Section 27, Rule 130 of the 1989
in not accepting their formula of "Three Hours Average employee is 35 months for the Philippino (sic) Revised Rules on Evidence, an offer to settle a claim is
Daily Overtime" in computing the overtime payments. employees . . . . not an admission that anything is due.
They claim that it was BRII itself which proposed the 2. The average wage per hour for the Philippino (sic) Said Rule provides:
formula during the negotiations for the settlement of employee is US$2.69 . . . . Offer of compromise not admissible. — In civil cases,
their claims in Bahrain and therefore it is in estoppel to 3. The average hours for the overtime is 3 hours plus in an offer of compromise is not an admission of any
disclaim said offer (Rollo, pp. 21-22). all public holidays and weekends. liability, and is not admissible in evidence against the
Claimants presented a Memorandum of the Ministry 4. Payment of US$8.72 per months (sic) of service as offeror.
of Labor of Bahrain dated April 16, 1983, which in compensation for the difference of the wages of the This Rule is not only a rule of procedure to avoid the
pertinent part states: overtime done for each Philippino (sic) employee . . . cluttering of the record with unwanted evidence but a
After the perusal of the memorandum of the Vice (Rollo, p.22). statement of public policy. There is great public
President and the Area Manager, Middle East, of BRII and AIBC countered: (1) that the Memorandum interest in having the protagonists settle their
Brown & Root Co. and the Summary of the was not prepared by them but by a subordinate official differences amicable before these ripen into litigation.
compensation offered by the Company to the in the Bahrain Department of Labor; (2) that there was Every effort must be taken to encourage them to arrive
employees in respect of the difference of pay of the no showing that the Bahrain Minister of Labor had at a settlement. The submission of offers and counter-
wages of the overtime and the difference of vacation approved said memorandum; and (3) that the offer offers in the negotiation table is a step in the right
leave and the perusal of the documents attached was made in the course of the negotiation for an direction. But to bind a party to his offers, as what
claimants would make this Court do, would defeat the than the Employer; that he shall devote his entire time Article 1377 of the Civil Code of the Philippines
salutary purpose of the Rule. and attention and his best energies, and abilities to the provides:
G.R. Nos. 105029-32 performance of such duties as may be assigned to him The interpretation of obscure words or stipulations in
A. NLRC applied the Amiri Decree No. 23 of 1976, by the Employer; that he shall at all times be subject to a contract shall not favor the party who caused the
which provides for greater benefits than those the direction and control of the Employer; and that the obscurity.
stipulated in the overseas-employment contracts of benefits provided to Employee hereunder are Said rule of interpretation is applicable to contracts of
the claimants. It was of the belief that "where the laws substituted for and in lieu of all other benefits adhesion where there is already a prepared form
of the host country are more favorable and beneficial provided by any applicable law, provided of course, containing the stipulations of the employment
to the workers, then the laws of the host country shall that total remuneration and benefits do not fall below contract and the employees merely "take it or leave
form part of the overseas employment contract." It that of the host country regulation or custom, it being it." The presumption is that there was an imposition by
quoted with approval the observation of the POEA understood that should applicable laws establish that one party against the other and that the employees
Administrator that ". . . in labor proceedings, all doubts fringe benefits, or other such benefits additional to the signed the contracts out of necessity that reduced
in the implementation of the provisions of the Labor compensation herein agreed cannot be waived, their bargaining power (Fieldmen's Insurance Co., Inc.
Code and its implementing regulations shall be Employee agrees that such compensation will be v. Songco, 25 SCRA 70 [1968]).
resolved in favor of labor" (Rollo, pp. 90-94). adjusted downward so that the total compensation Applying the said legal precepts, we read the overseas-
AIBC and BRII claim that NLRC acted capriciously and hereunder, plus the non-waivable benefits shall be employment contracts in question as adopting the
whimsically when it refused to enforce the overseas- equivalent to the compensation herein agreed (Rollo, provisions of the Amiri Decree No. 23 of 1976 as part
employment contracts, which became the law of the pp. 352-353). and parcel thereof.
parties. They contend that the principle that a law is The overseas-employment contracts could have been The parties to a contract may select the law by which
deemed to be a part of a contract applies only to drafted more felicitously. While a part thereof it is to be governed (Cheshire, Private International
provisions of Philippine law in relation to contracts provides that the compensation to the employee may Law, 187 [7th ed.]). In such a case, the foreign law is
executed in the Philippines. be "adjusted downward so that the total computation adopted as a "system" to regulate the relations of the
The overseas-employment contracts, which were (thereunder) plus the non-waivable benefits shall be parties, including questions of their capacity to enter
prepared by AIBC and BRII themselves, provided that equivalent to the compensation" therein agreed, into the contract, the formalities to be observed by
the laws of the host country became applicable to said another part of the same provision categorically states them, matters of performance, and so forth (16 Am Jur
contracts if they offer terms and conditions more "that total remuneration and benefits do not fall below 2d,
favorable that those stipulated therein. It was that of the host country regulation and custom." 150-161).
stipulated in said contracts that: Any ambiguity in the overseas-employment contracts Instead of adopting the entire mass of the foreign law,
The Employee agrees that while in the employ of the should be interpreted against AIBC and BRII, the the parties may just agree that specific provisions of a
Employer, he will not engage in any other business or parties that drafted it (Eastern Shipping Lines, Inc. v. foreign statute shall be deemed incorporated into
occupation, nor seek employment with anyone other Margarine-Verkaufs-Union, 93 SCRA 257 [1979]). their contract "as a set of terms." By such reference to
the provisions of the foreign law, the contract does not the vessel, whichever is greater." Since the laws of evidence were not disclosed to AIBC and BRII (Rollo,
become a foreign contract to be governed by the Singapore, the place of registry of the vessel in which pp. 35-36; 106-107). But instead of remanding the case
foreign law. The said law does not operate as a statute the late husband of private respondent served at the to the POEA Administrator for a new hearing, which
but as a set of contractual terms deemed written in the time of his death, granted a better compensation means further delay in the termination of the case,
contract (Anton, Private International Law, 197 [1967]; package, we applied said foreign law in preference to NLRC decided to pass upon the validity of the claims
Dicey and Morris, The Conflict of Laws, 702-703, [8th the terms of the contract. itself. It is this procedure that AIBC and BRII complain
ed.]). The case of Bagong Filipinas Overseas Corporation v. of as being irregular and a "reversible error."
A basic policy of contract is to protect the expectation National Labor Relations Commission, 135 SCRA 278 They pointed out that NLRC took into consideration
of the parties (Reese, Choice of Law in Torts and (1985), relied upon by AIBC and BRII is inapposite to evidence submitted on appeal, the same evidence
Contracts, 16 Columbia Journal of Transnational Law 1, the facts of the cases at bench. The issue in that case which NLRC found to have been "unilaterally
21 [1977]). Such party expectation is protected by was whether the amount of the death compensation submitted by the claimants and not disclosed to the
giving effect to the parties' own choice of the of a Filipino seaman should be determined under the adverse parties" (Rollo, pp. 37-39).
applicable law (Fricke v. Isbrandtsen Co., Inc., 151 F. shipboard employment contract executed in the NLRC noted that so many pieces of evidentiary matters
Supp. 465, 467 [1957]). The choice of law must, Philippines or the Hongkong law. Holding that the were submitted to the POEA administrator by the
however, bear some relationship to the parties or their shipboard employment contract was controlling, the claimants after the cases were deemed submitted for
transaction (Scoles and Hayes, Conflict of Law 644-647 court differentiated said case from Norse resolution and which were taken cognizance of by the
[1982]). There is no question that the contracts sought Management Co. in that in the latter case there was an POEA Administrator in resolving the cases. While AIBC
to be enforced by claimants have a direct connection express stipulation in the employment contract that and BRII had no opportunity to refute said evidence of
with the Bahrain law because the services were the foreign law would be applicable if it afforded the claimants before the POEA Administrator, they had
rendered in that country. greater compensation. all the opportunity to rebut said evidence and to
In Norse Management Co. (PTE) v. National Seamen B. AIBC and BRII claim that they were denied by NLRC present their
Board, 117 SCRA 486 (1982), the "Employment of their right to due process when said administrative counter-evidence before NLRC. As a matter of fact,
Agreement," between Norse Management Co. and the agency granted Friday-pay differential, holiday-pay AIBC and BRII themselves were able to present before
late husband of the private respondent, expressly differential, annual-leave differential and leave NLRC additional evidence which they failed to present
provided that in the event of illness or injury to the indemnity pay to the claimants listed in Annex B of the before the POEA Administrator.
employee arising out of and in the course of his Resolution. At first, NLRC reversed the resolution of Under Article 221 of the Labor Code of the Philippines,
employment and not due to his own misconduct, the POEA Administrator granting these benefits on a NLRC is enjoined to "use every and all reasonable
"compensation shall be paid to employee in finding that the POEA Administrator failed to consider means to ascertain the facts in each case speedily and
accordance with and subject to the limitation of the the evidence presented by AIBC and BRII, that some objectively and without regard to technicalities of law
Workmen's Compensation Act of the Republic of the findings of fact of the POEA Administrator were not or procedure, all in the interest of due process."
Philippines or the Worker's Insurance Act of registry of supported by the evidence, and that some of the
In deciding to resolve the validity of certain claims on because such provision contemplates only situations HERALD BLACK DACASIN, Petitioner,
the basis of the evidence of both parties submitted where there is still a question or controversy to be vs.
before the POEA Administrator and NLRC, the latter resolved (Rollo, pp. 41-42). SHARON DEL MUNDO DACASIN, Respondent.
considered that it was not expedient to remand the A principle well embedded in Administrative Law is
cases to the POEA Administrator for that would only that the technical rules of procedure and evidence do The Case
prolong the already protracted legal controversies. not apply to the proceedings conducted by
Even the Supreme Court has decided appealed cases administrative agencies (First Asian Transport & For review1 is a dismissal2 of a suit to enforce a post-
on the merits instead of remanding them to the trial Shipping Agency, Inc. v. Ople, 142 SCRA 542 [1986]; foreign divorce child custody agreement for lack of
jurisdiction.
court for the reception of evidence, where the same Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219
can be readily determined from the uncontroverted [1987]). This principle is enshrined in Article 221 of the
The Facts
facts on record (Development Bank of the Philippines Labor Code of the Philippines and is now the bedrock
v. Intermediate Appellate Court, 190 SCRA 653 [1990]; of proceedings before NLRC. Petitioner Herald Dacasin (petitioner), American, and
Pagdonsalan v. National Labor Relations Commission, Notwithstanding the non-applicability of technical respondent Sharon Del Mundo Dacasin (respondent),
127 SCRA 463 [1984]). rules of procedure and evidence in administrative Filipino, were married in Manila in April 1994. They
C. AIBC and BRII charge NLRC with grave abuse of proceedings, there are cardinal rules which must be have one daughter, Stephanie, born on 21 September
discretion when it ordered the POEA Administrator to observed by the hearing officers in order to comply 1995. In June 1999, respondent sought and obtained
hold new hearings for 683 claimants listed in Annex D with the due process requirements of the Constitution. from the Circuit Court, 19th Judicial Circuit, Lake
of the Resolution dated September 2, 1991 whose These cardinal rules are collated in Ang Tibay v. Court County, Illinois (Illinois court) a divorce decree against
claims had been denied by the POEA Administrator of Industrial Relations, 69 Phil. 635 (1940). petitioner.3 In its ruling, the Illinois court dissolved the
"for lack of proof" and for 69 claimants listed in Annex VIII marriage of petitioner and respondent, awarded to
E of the same Resolution, whose claims had been The three petitions were filed under Rule 65 of the respondent sole custody of Stephanie and retained
found by NLRC itself as not "supported by evidence" Revised Rules of Court on the grounds that NLRC had jurisdiction over the case for enforcement purposes.
(Rollo, pp. 41-45). committed grave abuse of discretion amounting to
NLRC based its ruling on Article 218(c) of the Labor lack of jurisdiction in issuing the questioned orders. On 28 January 2002, petitioner and respondent
Code of the Philippines, which empowers it "[to] We find no such abuse of discretion. executed in Manila a contract (Agreement4 ) for the
joint custody of Stephanie. The parties chose Philippine
conduct investigation for the determination of a WHEREFORE, all the three petitions are DISMISSED.
courts as exclusive forum to adjudicate disputes arising
question, matter or controversy, within its jurisdiction, SO ORDERED.
from the Agreement. Respondent undertook to obtain
. . . ." Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur from the Illinois court an order "relinquishing"
It is the posture of AIBC and BRII that NLRC has no jurisdiction to Philippine courts.
authority under Article 218(c) to remand a case 6) Dacasin vs. Dacasin February 5, 2010,
involving claims which had already been dismissed
G.R. No. 168785 February 5, 2010
In 2004, petitioner sued respondent in the Regional respondent, the divorce decree is binding on petitioner law vests on Regional Trial Courts exclusive original
Trial Court of Makati City, Branch 60 (trial court) to under the laws of his nationality. jurisdiction over civil actions incapable of pecuniary
enforce the Agreement. Petitioner alleged that in estimation.9 An action for specific performance, such
violation of the Agreement, respondent exercised sole Hence, this petition. as petitioner’s suit to enforce the Agreement on joint
custody over Stephanie. child custody, belongs to this species of actions.10 Thus,
Petitioner submits the following alternative theories for jurisdiction-wise, petitioner went to the right court.
Respondent sought the dismissal of the complaint for, the validity of the Agreement to justify its enforcement
among others, lack of jurisdiction because of the by the trial court: (1) the Agreement novated the valid Indeed, the trial court’s refusal to entertain petitioner’s
Illinois court’s retention of jurisdiction to enforce the divorce decree, modifying the terms of child custody suit was grounded not on its lack of power to do so but
divorce decree. from sole (maternal) to joint;8 or (2) the Agreement is on its thinking that the Illinois court’s divorce decree
independent of the divorce decree obtained by stripped it of jurisdiction. This conclusion is
The Ruling of the Trial Court respondent. unfounded. What the Illinois court retained was
"jurisdiction x x x for the purpose of enforcing all and
In its Order dated 1 March 2005, the trial court The Issue sundry the various provisions of [its] Judgment for
sustained respondent’s motion and dismissed the case Dissolution."11 Petitioner’s suit seeks the enforcement
for lack of jurisdiction. The trial court held that: (1) it The question is whether the trial court has jurisdiction not of the "various provisions" of the divorce decree but
is precluded from taking cognizance over the suit to take cognizance of petitioner’s suit and enforce the of the post-divorce Agreement on joint child custody.
considering the Illinois court’s retention of jurisdiction Agreement on the joint custody of the parties’ child. Thus, the action lies beyond the zone of the Illinois
to enforce its divorce decree, including its order court’s so-called "retained jurisdiction."
awarding sole custody of Stephanie to respondent; (2) The Ruling of the Court
the divorce decree is binding on petitioner following the Petitioner’s Suit Lacks Cause of Action
"nationality rule" prevailing in this jurisdiction;5 and The trial court has jurisdiction to entertain petitioner’s
(3) the Agreement is void for contravening Article suit but not to enforce the Agreement which is void. The foregoing notwithstanding, the trial court cannot
2035, paragraph 5 of the Civil Code6 prohibiting However, factual and equity considerations militate enforce the Agreement which is contrary to law.
compromise agreements on jurisdiction.7 against the dismissal of petitioner’s suit and call for the
remand of the case to settle the question of Stephanie’s In this jurisdiction, parties to a contract are free to
Petitioner sought reconsideration, raising the new custody. stipulate the terms of agreement subject to the
argument that the divorce decree obtained by minimum ban on stipulations contrary to law, morals,
respondent is void. Thus, the divorce decree is no bar Regional Trial Courts Vested With Jurisdiction good customs, public order, or public policy.12
to the trial court’s exercise of jurisdiction over the case. to Enforce Contracts Otherwise, the contract is denied legal existence,
deemed "inexistent and void from the beginning."13 For
In its Order dated 23 June 2005, the trial court denied Subject matter jurisdiction is conferred by law. At the lack of relevant stipulation in the Agreement, these and
reconsideration, holding that unlike in the case of time petitioner filed his suit in the trial court, statutory other ancillary Philippine substantive law serve as
default parameters to test the validity of the separated or divorced spouses. Simply put, for a child "[n]o man can sound the deep sorrows of a mother who
Agreement’s joint child custody stipulations.14 within this age bracket (and for commonsensical is deprived of her child of tender age."24
reasons), the law decides for the separated or divorced
At the time the parties executed the Agreement on 28 parents how best to take care of the child and that is to It could very well be that Article 213’s bias favoring
January 2002, two facts are undisputed: (1) Stephanie give custody to the separated mother. Indeed, the one separated parent (mother) over the other (father)
was under seven years old (having been born on 21 separated parents cannot contract away the provision in encourages paternal neglect, presumes incapacity for
September 1995); and (2) petitioner and respondent the Family Code on the maternal custody of children joint parental custody, robs the parents of custodial
were no longer married under the laws of the United below seven years anymore than they can privately options, or hijacks decision-making between the
States because of the divorce decree. The relevant agree that a mother who is unemployed, immoral, separated parents.25 However, these are objections
Philippine law on child custody for spouses separated habitually drunk, drug addict, insane or afflicted with a which question the law’s wisdom not its validity or
in fact or in law15 (under the second paragraph of communicable disease will have sole custody of a child uniform enforceability. The forum to air and remedy
Article 213 of the Family Code) is also undisputed: "no under seven as these are reasons deemed compelling to these grievances is the legislature, not this Court. At
child under seven years of age shall be separated from preclude the application of the exclusive maternal any rate, the rule’s seeming harshness or undesirability
the mother x x x."16 (This statutory awarding of sole custody regime under the second paragraph of Article is tempered by ancillary agreements the separated
parental custody17 to the mother is mandatory,18 213.22 parents may wish to enter such as granting the father
grounded on sound policy consideration,19 subject only visitation and other privileges. These arrangements are
to a narrow exception not alleged to obtain here.20 ) It will not do to argue that the second paragraph of not inconsistent with the regime of sole maternal
Clearly then, the Agreement’s object to establish a post- Article 213 of the Family Code applies only to judicial custody under the second paragraph of Article 213
divorce joint custody regime between respondent and custodial agreements based on its text that "No child which merely grants to the mother final authority on the
petitioner over their child under seven years old under seven years of age shall be separated from the care and custody of the minor under seven years of age,
contravenes Philippine law. mother, unless the court finds compelling reasons to in case of disagreements.1avvphi1
order otherwise." To limit this provision’s
The Agreement is not only void ab initio for being enforceability to court sanctioned agreements while Further, the imposed custodial regime under the second
contrary to law, it has also been repudiated by the placing private agreements beyond its reach is to paragraph of Article 213 is limited in duration, lasting
mother when she refused to allow joint custody by the sanction a double standard in custody regulation of only until the child’s seventh year. From the eighth year
father. The Agreement would be valid if the spouses children under seven years old of separated parents. until the child’s emancipation, the law gives the
have not divorced or separated because the law This effectively empowers separated parents, by the separated parents freedom, subject to the usual
provides for joint parental authority when spouses live simple expedient of avoiding the courts, to subvert a contractual limitations, to agree on custody regimes
together.21 However, upon separation of the spouses, legislative policy vesting to the separated mother sole they see fit to adopt. Lastly, even supposing that
the mother takes sole custody under the law if the child custody of her children under seven years of age "to petitioner and respondent are not barred from entering
is below seven years old and any agreement to the avoid a tragedy where a mother has seen her baby torn into the Agreement for the joint custody of Stephanie,
contrary is void. Thus, the law suspends the joint away from her."23 This ignores the legislative basis that respondent repudiated the Agreement by asserting sole
custody regime for (1) children under seven of (2) custody over Stephanie. Respondent’s act effectively
brought the parties back to ambit of the default absolute divorces the same being considered contrary The Facts of the Case and Nature of Proceeding
custodial regime in the second paragraph of Article 213 to our concept of public policy and morality. However, Justify Remand
of the Family Code vesting on respondent sole custody aliens may obtain divorces abroad, which may be
of Stephanie. recognized in the Philippines, provided they are valid Instead of ordering the dismissal of petitioner’s suit, the
according to their national law. In this case, the divorce logical end to its lack of cause of action, we remand the
Nor can petitioner rely on the divorce decree’s alleged in Nevada released private respondent from the case for the trial court to settle the question of
invalidity - not because the Illinois court lacked marriage from the standards of American law, under Stephanie’s custody. Stephanie is now nearly 15 years
jurisdiction or that the divorce decree violated Illinois which divorce dissolves the marriage. old, thus removing the case outside of the ambit of the
law, but because the divorce was obtained by his mandatory maternal custody regime under Article 213
Filipino spouse26 - to support the Agreement’s xxxx and bringing it within coverage of the default standard
enforceability. The argument that foreigners in this on child custody proceedings – the best interest of the
jurisdiction are not bound by foreign divorce decrees is Thus, pursuant to his national law, private respondent child.30 As the question of custody is already before the
hardly novel. Van Dorn v. Romillo27 settled the matter is no longer the husband of petitioner. He would have trial court and the child’s parents, by executing the
by holding that an alien spouse of a Filipino is bound no standing to sue in the case below as petitioner’s Agreement, initially showed inclination to share
by a divorce decree obtained abroad.28 There, we husband entitled to exercise control over conjugal custody, it is in the interest of swift and efficient
dismissed the alien divorcee’s Philippine suit for assets. As he is bound by the Decision of his own rendition of justice to allow the parties to take
accounting of alleged post-divorce conjugal property country’s Court, which validly exercised jurisdiction advantage of the court’s jurisdiction, submit evidence
and rejected his submission that the foreign divorce over him, and whose decision he does not repudiate, he on the custodial arrangement best serving Stephanie’s
(obtained by the Filipino spouse) is not valid in this is estopped by his own representation before said Court interest, and let the trial court render judgment. This
jurisdiction in this wise: from asserting his right over the alleged conjugal disposition is consistent with the settled doctrine that in
property. (Emphasis supplied) child custody proceedings, equity may be invoked to
There can be no question as to the validity of that serve the child’s best interest.31
Nevada divorce in any of the States of the United We reiterated Van Dorn in Pilapil v. Ibay-Somera29 to
States. The decree is binding on private respondent as dismiss criminal complaints for adultery filed by the WHEREFORE, we REVERSE the Orders dated 1
an American citizen. For instance, private respondent alien divorcee (who obtained the foreign divorce March 2005 and 23 June 2005 of the Regional Trial
cannot sue petitioner, as her husband, in any State of decree) against his former Filipino spouse because he Court of Makati City, Branch 60. The case is
the Union. What he is contending in this case is that the no longer qualified as "offended spouse" entitled to file REMANDED for further proceedings consistent with
divorce is not valid and binding in this jurisdiction, the the complaints under Philippine procedural rules. Thus, this ruling.
same being contrary to local law and public policy. it should be clear by now that a foreign divorce decree
carries as much validity against the alien divorcee in SO ORDERED.
It is true that owing to the nationality principle this jurisdiction as it does in the jurisdiction of the
embodied in Article 15 of the Civil Code, only alien’s nationality, irrespective of who obtained the ANTONIO T. CARPIO
Philippine nationals are covered by the policy against divorce. Associate Justice
 said vessel on February 11, 19882 boarding it that night As a result of the blockage, the Malandrinon, a vessel
7) Wildvalley Shipping vs. CA October 6, 2000, at 11:00 p.m.3 owned by herein petitioner Wildvalley Shipping
Company, Ltd., was unable to sail out of Puerto Ordaz
G.R. No. 119602 October 6, 2000 The master (captain) of the Philippine Roxas, Captain on that day.
Nicandro Colon, was at the bridge together with the
WILDVALLEY SHIPPING CO., LTD. petitioner, pilot (Vasquez), the vessel's third mate (then the officer Subsequently, Wildvalley Shipping Company, Ltd.
vs. on watch), and a helmsman when the vessel left the filed a suit with the Regional Trial Court of Manila,
COURT OF APPEALS and PHILIPPINE port4 at 1:40 a.m. on February 12, 1988.5 Captain Branch III against Philippine President Lines, Inc. and
PRESIDENT LINES INC., respondents. Colon left the bridge when the vessel was under way.6 Pioneer Insurance Company (the underwriter/insurer of
Philippine Roxas) for damages in the form of unearned
DECISION The Philippine Roxas experienced some vibrations profits, and interest thereon amounting to US
when it entered the San Roque Channel at mile 172.7 $400,000.00 plus attorney's fees, costs, and expenses of
BUENA, J.: The vessel proceeded on its way, with the pilot assuring litigation. The complaint against Pioneer Insurance
the watch officer that the vibration was a result of the Company was dismissed in an Order dated November
This is a petition for review on certiorari seeking to set shallowness of the channel.8 7, 1988.17
aside the decision of the Court of Appeals which
reversed the decision of the lower court in CA-G.R. CV Between mile 158 and 157, the vessel again At the pre-trial conference, the parties agreed on the
No. 36821, entitled "Wildvalley Shipping Co., Ltd., experienced some vibrations.9 These occurred at 4:12 following facts:
plaintiff-appellant, versus Philippine President Lines, a.m.10 It was then that the watch officer called the
Inc., defendant-appellant." master to the bridge.11 "1. The jurisdictional facts, as specified in their
respective pleadings;
The antecedent facts of the case are as follows: The master (captain) checked the position of the
vessel12 and verified that it was in the centre of the "2. That defendant PPL was the owner of the vessel
Sometime in February 1988, the Philippine Roxas, a channel.13 He then went to confirm, or set down, the Philippine Roxas at the time of the incident;
vessel owned by Philippine President Lines, Inc., position of the vessel on the chart.14 He ordered
private respondent herein, arrived in Puerto Ordaz, Simplicio A. Monis, Chief Officer of the President "3. That defendant Pioneer Insurance was the
Venezuela, to load iron ore. Upon the completion of the Roxas, to check all the double bottom tanks.15 insurance underwriter for defendant PPL;
loading and when the vessel was ready to leave port,
Mr. Ezzar del Valle Solarzano Vasquez, an official pilot At around 4:35 a.m., the Philippine Roxas ran aground "4. That plaintiff Wildvalley Shipping Co., Inc. is the
of Venezuela, was designated by the harbour authorities in the Orinoco River,16 thus obstructing the ingress and owner of the vessel Malandrinon, whose passage was
in Puerto Ordaz to navigate the Philippine Roxas egress of vessels. obstructed by the vessel Philippine Roxas at Puerto
through the Orinoco River.1 He was asked to pilot the Ordaz, Venezuela, as specified in par. 4, page 2 of the
complaint;
"5. That on February 12, 1988, while the Philippine Co., Ltd. The dispositive portion thereof reads as plus cost of suit. Plaintiff-appellant's appeal is
Roxas was navigating the channel at Puerto Ordaz, the follows: DISMISSED.
said vessel grounded and as a result, obstructed
navigation at the channel; "WHEREFORE, judgment is rendered for the plaintiff, "SO ORDERED."21
ordering defendant Philippine President Lines, Inc. to
"6. That the Orinoco River in Puerto Ordaz is a pay to the plaintiff the sum of U.S. $259,243.43, as Petitioner filed a motion for reconsideration22 but the
compulsory pilotage channel; actual and compensatory damages, and U.S. same was denied for lack of merit in the resolution
$162,031.53, as expenses incurred abroad for its dated March 29, 1995.23
"7. That at the time of the incident, the vessel, foreign lawyers, plus additional sum of U.S.
Philippine Roxas, was under the command of the pilot $22,000.00, as and for attorney's fees of plaintiff's local Hence, this petition.
Ezzar Solarzano, assigned by the government thereat, lawyer, and to pay the cost of this suit.
but plaintiff claims that it is under the command of the The petitioner assigns the following errors to the court
master; "Defendant's counterclaim is dismissed for lack of a quo:
merit.
"8. The plaintiff filed a case in Middleburg, Holland 1. RESPONDENT COURT OF APPEALS
which is related to the present case; "SO ORDERED."19 SERIOUSLY ERRED IN FINDING THAT UNDER
PHILIPPINE LAW NO FAULT OR NEGLIGENCE
"9. The plaintiff caused the arrest of the Philippine Both parties appealed: the petitioner appealing the non- CAN BE ATTRIBUTED TO THE MASTER NOR
Collier, a vessel owned by the defendant PPL; award of interest with the private respondent THE OWNER OF THE "PHILIPPINE ROXAS" FOR
questioning the decision on the merits of the case. THE GROUNDING OF SAID VESSEL
"10. The Orinoco River is 150 miles long and it takes RESULTING IN THE BLOCKAGE OF THE RIO
approximately 12 hours to navigate out of the said After the requisite pleadings had been filed, the Court ORINOCO;
river; of Appeals came out with its questioned decision dated
June 14, 1994,20 the dispositive portion of which reads 2. RESPONDENT COURT OF APPEALS
"11. That no security for the plaintiff's claim was given as follows: SERIOUSLY ERRED IN REVERSING THE
until after the Philippine Collier was arrested; and FINDINGS OF FACTS OF THE TRIAL COURT
"WHEREFORE, finding defendant-appellant's appeal CONTRARY TO EVIDENCE;
"12. That a letter of guarantee, dated 12-May-88 was to be meritorious, judgment is hereby rendered
issued by the Steamship Mutual Underwriters Ltd."18 reversing the Decision of the lower court. Plaintiff- 3. RESPONDENT COURT OF APPEALS
appellant's Complaint is dismissed and it is ordered to SERIOUSLY ERRED IN FINDING THAT THE
The trial court rendered its decision on October 16, pay defendant-appellant the amount of Three Hundred "PHILIPPINE ROXAS" IS SEAWORTHY;
1991 in favor of the petitioner, Wildvalley Shipping Twenty-three Thousand, Forty-two Pesos and Fifty-
three Centavos (₱323,042.53) as and for attorney's fees
4. RESPONDENT COURT OF APPEALS Section 24, Rule 132 of the Rules of Court, as amended, In the noted case of Willamette Iron & Steel Works vs.
SERIOUSLY ERRED IN DISREGARDING the entire provision of which is quoted hereunder. Muzzal,27 it was held that:
VENEZUELAN LAW DESPITE THE FACT THAT Where the foreign law sought to be proved is
THE SAME HAS BEEN SUBSTANTIALLY "unwritten," the oral testimony of expert witnesses is "… Mr. Arthur W. Bolton, an attorney-at-law of San
PROVED IN THE TRIAL COURT WITHOUT ANY admissible, as are printed and published books of Francisco, California, since the year 1918 under oath,
OBJECTION FROM PRIVATE RESPONDENT, reports of decisions of the courts of the country quoted verbatim section 322 of the California Civil
AND WHOSE OBJECTION WAS INTERPOSED concerned if proved to be commonly admitted in such Code and stated that said section was in force at the time
BELATEDLY ON APPEAL; courts.25 the obligations of defendant to the plaintiff were
incurred, i.e. on November 5, 1928 and December 22,
5. RESPONDENT COURT OF APPEALS Section 24 of Rule 132 of the Rules of Court, as 1928. This evidence sufficiently established the fact
SERIOUSLY ERRED IN AWARDING amended, provides: that the section in question was the law of the State of
ATTORNEY'S FEES AND COSTS TO PRIVATE California on the above dates. A reading of sections 300
RESPONDENT WITHOUT ANY FAIR OR "Sec. 24. Proof of official record. -- The record of and 301 of our Code of Civil Procedure will convince
REASONABLE BASIS WHATSOEVER; public documents referred to in paragraph (a) of Section one that these sections do not exclude the presentation
19, when admissible for any purpose, may be evidenced of other competent evidence to prove the existence of a
6. RESPONDENT COURT OF APPEALS by an official publication thereof or by a copy attested foreign law.
SERIOUSLY ERRED IN NOT FINDING THAT by the officer having the legal custody of the record, or
PETITIONER'S CAUSE IS MERITORIOUS by his deputy, and accompanied, if the record is not "`The foreign law is a matter of fact …You ask the
HENCE, PETITIONER SHOULD BE ENTITLED kept in the Philippines, with a certificate that such witness what the law is; he may, from his recollection,
TO ATTORNEY'S FEES, COSTS AND INTEREST. officer has the custody. If the office in which the or on producing and referring to books, say what it is.'
record is kept is in a foreign country, the certificate may (Lord Campbell concurring in an opinion of Lord Chief
The petition is without merit. be made by a secretary of the embassy or legation, Justice Denman in a well-known English case where a
consul general, consul, vice consul, or consular agent witness was called upon to prove the Roman laws of
The primary issue to be determined is whether or not or by any officer in the foreign service of the marriage and was permitted to testify, though he
Venezuelan law is applicable to the case at bar. Philippines stationed in the foreign country in which the referred to a book containing the decrees of the Council
record is kept, and authenticated by the seal of his of Trent as controlling, Jones on Evidence, Second
It is well-settled that foreign laws do not prove office." (Underscoring supplied) Edition, Volume 4, pages 3148-3152.) x x x."
themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them. Like any The court has interpreted Section 25 (now Section 24) We do not dispute the competency of Capt. Oscar Leon
other fact, they must be alleged and proved.24 to include competent evidence like the testimony of a Monzon, the Assistant Harbor Master and Chief of
witness to prove the existence of a written foreign Pilots at Puerto Ordaz, Venezuela,28 to testify on the
A distinction is to be made as to the manner of proving law.26 existence of the Reglamento General de la Ley de
a written and an unwritten law. The former falls under Pilotaje (pilotage law of Venezuela)29 and the
Reglamento Para la Zona de Pilotaje No 1 del Orinoco accompanied by a certificate by a secretary of the A foreign law is considered to be pleaded if there is an
(rules governing the navigation of the Orinoco River). embassy or legation, consul general, consul, vice allegation in the pleading about the existence of the
Captain Monzon has held the aforementioned posts for consular or consular agent or foreign service officer, foreign law, its import and legal consequence on the
eight years.30 As such he is in charge of designating the and with the seal of his office.35 The latter requirement event or transaction in issue.38
pilots for maneuvering and navigating the Orinoco is not a mere technicality but is intended to justify the
River. He is also in charge of the documents that come giving of full faith and credit to the genuineness of a A review of the Complaint39 revealed that it was never
into the office of the harbour masters.31 document in a foreign country.36 alleged or invoked despite the fact that the grounding
of the M/V Philippine Roxas occurred within the
Nevertheless, we take note that these written laws were It is not enough that the Gaceta Oficial, or a book territorial jurisdiction of Venezuela.
not proven in the manner provided by Section 24 of published by the Ministerio de Comunicaciones of
Rule 132 of the Rules of Court. Venezuela, was presented as evidence with Captain We reiterate that under the rules of private international
Monzon attesting it. It is also required by Section 24 of law, a foreign law must be properly pleaded and proved
The Reglamento General de la Ley de Pilotaje was Rule 132 of the Rules of Court that a certificate that as a fact. In the absence of pleading and proof, the laws
published in the Gaceta Oficial32 of the Republic of Captain Monzon, who attested the documents, is the of a foreign country, or state, will be presumed to be the
Venezuela. A photocopy of the Gaceta Oficial was officer who had legal custody of those records made by same as our own local or domestic law and this is
presented in evidence as an official publication of the a secretary of the embassy or legation, consul general, known as processual presumption.40
Republic of Venezuela. consul, vice consul or consular agent or by any officer
in the foreign service of the Philippines stationed in Having cleared this point, we now proceed to a
The Reglamento Para la Zona de Pilotaje No 1 del Venezuela, and authenticated by the seal of his office thorough study of the errors assigned by the petitioner.
Orinoco is published in a book issued by the Ministerio accompanying the copy of the public document. No
de Comunicaciones of Venezuela.33 Only a photocopy such certificate could be found in the records of the Petitioner alleges that there was negligence on the part
of the said rules was likewise presented as evidence. case. of the private respondent that would warrant the award
of damages.
Both of these documents are considered in Philippine With respect to proof of written laws, parol proof is
jurisprudence to be public documents for they are the objectionable, for the written law itself is the best There being no contractual obligation, the private
written official acts, or records of the official acts of the evidence. According to the weight of authority, when a respondent is obliged to give only the diligence
sovereign authority, official bodies and tribunals, and foreign statute is involved, the best evidence rule required of a good father of a family in accordance with
public officers of Venezuela.34 requires that it be proved by a duly authenticated copy the provisions of Article 1173 of the New Civil Code,
of the statute.37 thus:
For a copy of a foreign public document to be
admissible, the following requisites are mandatory: (1) At this juncture, we have to point out that the "Art. 1173. The fault or negligence of the obligor
It must be attested by the officer having legal custody Venezuelan law was not pleaded before the lower court. consists in the omission of that diligence which is
of the records or by his deputy; and (2) It must be required by the nature of the obligation and corresponds
with the circumstances of the persons, of the time and "Sec. 11. Control of Vessels and Liability for Damage. "f) A pilot shall be held responsible for the direction of
of the place. When negligence shows bad faith, the -- On compulsory pilotage grounds, the Harbor Pilot a vessel from the time he assumes his work as a pilot
provisions of articles 1171 and 2201, paragraph 2, shall providing the service to a vessel shall be responsible for thereof until he leaves it anchored or berthed safely;
apply. the damage caused to a vessel or to life and property at Provided, however, that his responsibility shall cease at
ports due to his negligence or fault. He can be absolved the moment the Master neglects or refuses to carry out
"If the law or contract does not state the diligence which from liability if the accident is caused by force majeure his order."
is to be observed in the performance, that which is or natural calamities provided he has exercised
expected of a good father of a family shall be required." prudence and extra diligence to prevent or minimize the The Code of Commerce likewise provides for the
damage. obligations expected of a captain of a vessel, to wit:
The diligence of a good father of a family requires only
that diligence which an ordinary prudent man would "The Master shall retain overall command of the vessel "Art. 612. The following obligations shall be inherent
exercise with regard to his own property. This we have even on pilotage grounds whereby he can countermand in the office of captain:
found private respondent to have exercised when the or overrule the order or command of the Harbor Pilot
vessel sailed only after the "main engine, machineries, on board. In such event, any damage caused to a vessel "x x x
and other auxiliaries" were checked and found to be in or to life and property at ports by reason of the fault or
good running condition;41 when the master left a negligence of the Master shall be the responsibility and "7. To be on deck on reaching land and to take
competent officer, the officer on watch on the bridge liability of the registered owner of the vessel concerned command on entering and leaving ports, canals,
with a pilot who is experienced in navigating the without prejudice to recourse against said Master. roadsteads, and rivers, unless there is a pilot on board
Orinoco River; when the master ordered the inspection discharging his duties. x x x."
of the vessel's double bottom tanks when the vibrations "Such liability of the owner or Master of the vessel or
occurred anew.42 its pilots shall be determined by competent authority in The law is very explicit. The master remains the overall
appropriate proceedings in the light of the facts and commander of the vessel even when there is a pilot on
The Philippine rules on pilotage, embodied in circumstances of each particular case. board. He remains in control of the ship as he can still
Philippine Ports Authority Administrative Order No. perform the duties conferred upon him by law43 despite
03-85, otherwise known as the Rules and Regulations "x x x the presence of a pilot who is temporarily in charge of
Governing Pilotage Services, the Conduct of Pilots and the vessel. It is not required of him to be on the bridge
Pilotage Fees in Philippine Ports enunciate the duties "Sec. 32. Duties and Responsibilities of the Pilots or while the vessel is being navigated by a pilot.
and responsibilities of a master of a vessel and its pilot, Pilots’ Association. -- The duties and responsibilities of
among other things. the Harbor Pilot shall be as follows: However, Section 8 of PPA Administrative Order No.
03-85, provides:
The pertinent provisions of the said administrative "x x x
order governing these persons are quoted hereunder: "Sec. 8. Compulsory Pilotage Service - For entering a
harbor and anchoring thereat, or passing through rivers
or straits within a pilotage district, as well as docking Captain Colon relied on the knowledge and experience Pilot Ezzar Solarzano Vasquez was assigned to pilot the
and undocking at any pier/wharf, or shifting from one of pilot Vasquez to guide the vessel safely. vessel Philippine Roxas as well as other vessels on the
berth or another, every vessel engaged in coastwise and Orinoco River due to his knowledge of the same. In his
foreign trade shall be under compulsory pilotage. "Licensed pilots, enjoying the emoluments of experience as a pilot, he should have been aware of the
compulsory pilotage, are in a different class from portions which are shallow and which are not. His
"xxx." ordinary employees, for they assume to have a skill and failure to determine the depth of the said river and his
a knowledge of navigation in the particular waters over decision to plod on his set course, in all probability,
The Orinoco River being a compulsory pilotage which their licenses extend superior to that of the caused damage to the vessel. Thus, we hold him as
channel necessitated the engaging of a pilot who was master; pilots are bound to use due diligence and negligent and liable for its grounding.
presumed to be knowledgeable of every shoal, bank, reasonable care and skill. A pilot's ordinary skill is in
deep and shallow ends of the river. In his deposition, proportion to the pilot's responsibilities, and implies a In the case of Homer Ramsdell Transportation
pilot Ezzar Solarzano Vasquez testified that he is an knowledge and observance of the usual rules of Company vs. La Compagnie Generale
official pilot in the Harbour at Port Ordaz, navigation, acquaintance with the waters piloted in their Transatlantique, 182 U.S. 406, it was held that:
Venezuela,44 and that he had been a pilot for twelve ordinary condition, and nautical skill in avoiding all
(12) years.45 He also had experience in navigating the known obstructions. The character of the skill and "x x x The master of a ship, and the owner also, is liable
waters of the Orinoco River.46 knowledge required of a pilot in charge of a vessel on for any injury done by the negligence of the crew
the rivers of a country is very different from that which employed in the ship. The same doctrine will apply to
The law does provide that the master can countermand enables a navigator to carry a vessel safely in the ocean. the case of a pilot employed by the master or owner, by
or overrule the order or command of the harbor pilot on On the ocean, a knowledge of the rules of navigation, whose negligence any injury happens to a third person
board. The master of the Philippine Roxas deemed it with charts that disclose the places of hidden rocks, or his property: as, for example, by a collision with
best not to order him (the pilot) to stop the vessel,47 dangerous shores, or other dangers of the way, are the another ship, occasioned by his negligence. And it will
mayhap, because the latter had assured him that they main elements of a pilot's knowledge and skill. But the make no difference in the case that the pilot, if any is
were navigating normally before the grounding of the pilot of a river vessel, like the harbor pilot, is selected employed, is required to be a licensed pilot; provided
vessel.48 Moreover, the pilot had admitted that on for the individual's personal knowledge of the the master is at liberty to take a pilot, or not, at his
account of his experience he was very familiar with the topography through which the vessel is steered."50 pleasure, for in such a case the master acts voluntarily,
configuration of the river as well as the course although he is necessarily required to select from a
headings, and that he does not even refer to river charts We find that the grounding of the vessel is attributable particular class. On the other hand, if it is compulsive
when navigating the Orinoco River.49 to the pilot. When the vibrations were first felt the upon the master to take a pilot, and, a fortiori, if he
watch officer asked him what was going on, and pilot is bound to do so under penalty, then, and in such
Based on these declarations, it comes as no surprise to Vasquez replied that "(they) were in the middle of the case, neither he nor the owner will be liable for
us that the master chose not to regain control of the ship. channel and that the vibration was as (sic) a result of the injuries occasioned by the negligence of the pilot; for
Admitting his limited knowledge of the Orinoco River, shallowness of the channel."51 in such a case the pilot cannot be deemed properly the
servant of the master or the owner, but is forced upon
them, and the maxim Qui facit per alium facit per se Thus, two of the requisites necessary for the doctrine to What do you mean by that? You explain. The vessel is
does not apply." (Underscoring supplied) apply, i.e., negligence and control, to render the fit to travel even with defects? Is that what you mean?
respondent liable, are absent. Explain.
Anent the river passage plan, we find that, while there
was none,52 the voyage has been sufficiently planned As to the claim that the ship was unseaworthy, we hold "WITNESS
and monitored as shown by the following actions that it is not.
undertaken by the pilot, Ezzar Solarzano Vasquez, to "A Yes, your Honor. Because the class society which
wit: contacting the radio marina via VHF for The Lloyd’s Register of Shipping confirmed the register (sic) is the third party looking into the condition
information regarding the channel, river traffic,53 vessel’s seaworthiness in a Confirmation of Class of the vessel and as far as their record states, the vessel
soundings of the river, depth of the river, bulletin on the issued on February 16, 1988 by finding that "the above was class or maintained, and she is fit to travel during
buoys.54 The officer on watch also monitored the named ship (Philippine Roxas) maintained the class that voyage."
voyage.55 "+100A1 Strengthened for Ore Cargoes, Nos. 2 and 8
Holds may be empty (CC) and +LMC" from 31/12/87 "x x x
We, therefore, do not find the absence of a river passage up until the time of casualty on or about 12/2/88."57
plan to be the cause for the grounding of the vessel. The same would not have been issued had not the vessel "ATTY. MISA
been built according to the standards set by Lloyd's.
The doctrine of res ipsa loquitur does not apply to the Before we proceed to other matter, will you kindly tell
case at bar because the circumstances surrounding the Samuel Lim, a marine surveyor, at Lloyd's Register of us what is (sic) the 'class +100A1 Strengthened for Ore
injury do not clearly indicate negligence on the part of Shipping testified thus: Cargoes', mean?
the private respondent. For the said doctrine to apply,
the following conditions must be met: (1) the accident "Q Now, in your opinion, as a surveyor, did top side "WITNESS
was of such character as to warrant an inference that it tank have any bearing at all to the seaworthiness of the
would not have happened except for defendant's vessel? "A Plus 100A1 means that the vessel was built
negligence; (2) the accident must have been caused by according to Lloyd's rules and she is capable of carrying
an agency or instrumentality within the exclusive "A Well, judging on this particular vessel, and also ore bulk cargoes, but she is particularly capable of
management or control of the person charged with the basing on the class record of the vessel, wherein carrying Ore Cargoes with No. 2 and No. 8 holds
negligence complained of; and (3) the accident must not recommendations were made on the top side tank, and empty.
have been due to any voluntary action or contribution it was given sufficient time to be repaired, it means that
on the part of the person injured.56 the vessel is fit to travel even with those defects on the "x x x
ship.
As has already been held above, there was a temporary "COURT
shift of control over the ship from the master of the "COURT
vessel to the pilot on a compulsory pilotage channel. The vessel is classed, meaning?
"A Meaning she is fit to travel, your Honor, or Finally, we find the award of attorney’s fee
seaworthy."58 justified.1âwphi1 8) Edi-Staff Builders Int’l vs. NLRC October 26,
2007,
It is not required that the vessel must be perfect. To be Article 2208 of the New Civil Code provides that:
seaworthy, a ship must be reasonably fit to perform the G.R. No. 145587 October 26, 2007
services, and to encounter the ordinary perils of the "Art. 2208. In the absence of stipulation, attorney's fees
voyage, contemplated by the parties to the policy.59 and expenses of litigation, other than judicial costs, EDI-STAFFBUILDERS INTERNATIONAL, INC.,
cannot be recovered, except: petitioner,
As further evidence that the vessel was seaworthy, we vs.
quote the deposition of pilot Vasquez: "x x x NATIONAL LABOR RELATIONS
COMMISSION and ELEAZAR S. GRAN,
"Q Was there any instance when your orders or "(11) In any other case where the court deems it just and respondents.
directions were not complied with because of the equitable that attorney's fees and expenses of litigation
inability of the vessel to do so? should be recovered. The Case

"A No. "x x x" This Petition for Review on Certiorari1 seeks to set
aside the October 18, 2000 Decision2 of the Court of
"Q. Was the vessel able to respond to all your Due to the unfounded filing of this case, the private Appeals (CA) in CA-G.R. SP No. 56120 which
commands and orders? respondent was unjustifiably forced to litigate, thus the affirmed the January 15, 1999 Decision3 and September
award of attorney’s fees was proper. 30, 1999 Resolution4 rendered by the National Labor
"A. The vessel was navigating normally."60 Relations Commission (NLRC) (Third Division) in
WHEREFORE, IN VIEW OF THE FOREGOING, POEA ADJ (L) 94-06-2194, ordering Expertise Search
Eduardo P. Mata, Second Engineer of the Philippine the petition is DENIED and the decision of the Court of International (ESI), EDI-Staffbuilders International,
Roxas submitted an accident report wherein he stated Appeals in CA G.R. CV No. 36821 is AFFIRMED. Inc. (EDI), and Omar Ahmed Ali Bin Bechr Est. (OAB)
that on February 11, 1988, he checked and prepared the jointly and severally to pay Eleazar S. Gran (Gran) the
main engine, machineries and all other auxiliaries and SO ORDERED. amount of USD 16,150.00 as unpaid salaries.
found them all to be in good running condition and
ready for maneuvering. That same day the main engine, Bellosillo, (Chairman), Mendoza, Quisumbing, and De The Facts
bridge and engine telegraph and steering gear motor leon, Jr., JJ., concur.
were also tested.61 Engineer Mata also prepared the Petitioner EDI is a corporation engaged in recruitment
fuel for consumption for maneuvering and checked the and placement of Overseas Filipino Workers (OFWs).5
engine generators.62 ESI is another recruitment agency which collaborated
with EDI to process the documentation and deployment After Gran had been working for about five months for In his February 10, 1998 Decision,14 Labor Arbiter
of private respondent to Saudi Arabia. OAB, his employment was terminated through OAB's Manuel R. Caday, to whom Gran's case was assigned,
July 9, 1994 letter,11 on the following grounds: ruled that there was neither underpayment nor illegal
Private respondent Gran was an OFW recruited by EDI, dismissal.
and deployed by ESI to work for OAB, in Riyadh, 1. Non-compliance to contract requirements by the
Kingdom of Saudi Arabia.6 recruitment agency primarily on your salary and The Labor Arbiter reasoned that there was no
contract duration. underpayment of salaries since according to the POEA-
It appears that OAB asked EDI through its October 3, Overseas Contract Worker (OCW) Information Sheet,
1993 letter for curricula vitae of qualified applicants for 2. Non-compliance to pre-qualification requirements Gran's monthly salary was USD 600.00, and in his
the position of "Computer Specialist."7 In a facsimile by the recruitment agency[,] vide OAB letter ref. F- Confirmation of Appointment as Computer Specialist,
transmission dated November 29, 1993, OAB informed 5751-93, dated October 3, 1993.12 his monthly basic salary was fixed at SR 2,500.00,
EDI that, from the applicants' curricula vitae submitted which was equivalent to USD 600.00.
to it for evaluation, it selected Gran for the position of 3. Insubordination or disobedience to Top
"Computer Specialist." The faxed letter also stated that Management Order and/or instructions (non-submittal Arbiter Caday also cited the Declaration executed by
if Gran agrees to the terms and conditions of of daily activity reports despite several instructions). Gran, to justify that Gran had no claim for unpaid
employment contained in it, one of which was a salaries or wages against OAB.
monthly salary of SR (Saudi Riyal) 2,250.00 (USD On July 11, 1994, Gran received from OAB the total
600.00), EDI may arrange for Gran's immediate amount of SR 2,948.00 representing his final pay, and With regard to the issue of illegal dismissal, the Labor
dispatch.8 on the same day, he executed a Declaration13 releasing Arbiter found that Gran failed to refute EDI's
OAB from any financial obligation or otherwise, allegations; namely, (1) that Gran did not submit a
After accepting OAB's offer of employment, Gran towards him. single activity report of his daily activity as dictated by
signed an employment contract9 that granted him a company policy; (2) that he was not qualified for the
monthly salary of USD 850.00 for a period of two After his arrival in the Philippines, Gran instituted a job as computer specialist due to his insufficient
years. Gran was then deployed to Riyadh, Kingdom of complaint, on July 21, 1994, against ESI/EDI, OAB, knowledge in programming and lack of knowledge in
Saudi Arabia on February 7, 1994. Country Bankers Insurance Corporation, and Western ACAD system; (3) that Gran refused to follow
Guaranty Corporation with the NLRC, National Capital management's instruction for him to gain more
Upon arrival in Riyadh, Gran questioned the Region, Quezon City, which was docketed as POEA knowledge of the job to prove his worth as computer
discrepancy in his monthly salary—his employment ADJ (L) 94-06-2194 for underpayment of specialist; (4) that Gran's employment contract had
contract stated USD 850.00; while his Philippine wages/salaries and illegal dismissal. never been substituted; (5) and that Gran was paid a
Overseas Employment Agency (POEA) Information monthly salary of USD 850.00, and USD 350.00
Sheet indicated USD 600.00 only. However, through The Ruling of the Labor Arbiter monthly as food allowance.
the assistance of the EDI office in Riyadh, OAB agreed
to pay Gran USD 850.00 a month.10
Accordingly, the Labor Arbiter decided that Gran was Thus, the NLRC reversed the Labor Arbiter's Decision The NLRC then issued a Resolution21 denying
validly dismissed from his work due to insubordination, and rendered a new one, the dispositive portion of petitioner's Motion for Reconsideration, ratiocinating
disobedience, and his failure to submit daily activity which reads: that the issues and arguments raised in the motion "had
reports. already been amply discussed, considered, and ruled
WHEREFORE, the assailed decision is SET ASIDE. upon" in the Decision, and that there was "no cogent
Thus, on February 10, 1998, Arbiter Caday dismissed Respondents Expertise Search International, Inc., EDI reason or patent or palpable error that warrant any
Gran's complaint for lack of merit. Staffbuilders Int'l., Inc. and Omar Ahmed Ali Bin disturbance thereof."
Bechr Est. (OAB) are hereby ordered jointly and
Dissatisfied, Gran filed an Appeal15 on April 6, 1998 severally liable to pay the complainant Eleazar Gran Unconvinced of the NLRC's reasoning, EDI filed a
with the NLRC, Third Division. However, it appears the Philippine peso equivalent at the time of actual Petition for Certiorari before the CA. Petitioner claimed
from the records that Gran failed to furnish EDI with a payment of SIXTEEN THOUSAND ONE in its petition that the NLRC committed grave abuse of
copy of his Appeal Memorandum. HUNDRED FIFTY US DOLLARS (US$16,150.00) discretion in giving due course to the appeal despite
representing his salaries for the unexpired portion of Gran's failure to perfect the appeal.
The Ruling of the NLRC his contract.
The Ruling of the Court of Appeals
The NLRC held that EDI's seemingly harmless transfer SO ORDERED.16
of Gran's contract to ESI is actually "reprocessing," The CA subsequently ruled on the procedural and
which is a prohibited transaction under Article 34 (b) of Gran then filed a Motion for Execution of Judgment17 substantive issues of EDI's petition.
the Labor Code. This scheme constituted on March 29, 1999 with the NLRC and petitioner
misrepresentation through the conspiracy between EDI receiving a copy of this motion on the same date.18 On the procedural issue, the appellate court held that
and ESI in misleading Gran and even POEA of the "Gran's failure to furnish a copy of his appeal
actual terms and conditions of the OFW's employment. To prevent the execution, petitioner filed an memorandum [to EDI was] a mere formal lapse, an
In addition, it was found that Gran did not commit any Opposition19 to Gran's motion arguing that the Writ of excusable neglect and not a jurisdictional defect which
act that constituted a legal ground for dismissal. The Execution cannot issue because it was not notified of would justify the dismissal of his appeal."22 The court
alleged non-compliance with contractual stipulations the appellate proceedings before the NLRC and was not also held that petitioner EDI failed to prove that private
relating to Gran's salary and contract duration, and the given a copy of the memorandum of appeal nor any respondent was terminated for a valid cause and in
absence of pre-qualification requirements cannot be opportunity to participate in the appeal. accordance with due process; and that Gran's
attributed to Gran but to EDI, which dealt directly with Declaration releasing OAB from any monetary
OAB. In addition, the charge of insubordination was Seeing that the NLRC did not act on Gran's motion after obligation had no force and effect. The appellate court
not substantiated, and Gran was not even afforded the EDI had filed its Opposition, petitioner filed, on August ratiocinated that EDI had the burden of proving Gran's
required notice and investigation on his alleged 26, 1999, a Motion for Reconsideration of the NLRC incompetence; however, other than the termination
offenses. Decision after receiving a copy of the Decision on letter, no evidence was presented to show how and why
August 16, 1999.20 Gran was considered to be incompetent. The court held
that since the law requires the recruitment agencies to As a result of these findings, on October 18, 2000, the IV. WHETHER GRAN WAS AFFORDED DUE
subject OFWs to trade tests before deployment, Gran appellate court denied the petition to set aside the PROCESS PRIOR TO TERMINATION.
must have been competent and qualified; otherwise, he NLRC Decision.
would not have been hired and deployed abroad. V. WHETHER GRAN IS ENTITLED TO
Hence, this instant petition is before the Court. BACKWAGES FOR THE UNEXPIRED PORTION
As for the charge of insubordination and disobedience OF HIS CONTRACT.23
due to Gran's failure to submit a "Daily Activity The Issues
Report," the appellate court found that EDI failed to The Court's Ruling
show that the submission of the "Daily Activity Report" Petitioner raises the following issues for our
was a part of Gran's duty or the company's policy. The consideration: The petition lacks merit except with respect to Gran's
court also held that even if Gran was guilty of failure to furnish EDI with his Appeal Memorandum
insubordination, he should have just been suspended or I. WHETHER THE FAILURE OF GRAN TO filed with the NLRC.
reprimanded, but not dismissed. FURNISH A COPY OF HIS APPEAL
MEMORANDUM TO PETITIONER EDI WOULD First Issue: NLRC's Duty is to Require Respondent
The CA also held that Gran was not afforded due CONSTITUTE A JURISDICTIONAL DEFECT to Provide Petitioner a Copy of the Appeal
process, given that OAB did not abide by the twin AND A DEPRIVATION OF PETITIONER EDI'S
notice requirement. The court found that Gran was RIGHT TO DUE PROCESS AS WOULD JUSTIFY Petitioner EDI claims that Gran's failure to furnish it a
terminated on the same day he received the termination THE DISMISSAL OF GRAN'S APPEAL. copy of the Appeal Memorandum constitutes a
letter, without having been apprised of the bases of his jurisdictional defect and a deprivation of due process
dismissal or afforded an opportunity to explain his side. II. WHETHER PETITIONER EDI HAS that would warrant a rejection of the appeal.
ESTABLISHED BY WAY OF SUBSTANTIAL
Finally, the CA held that the Declaration signed by EVIDENCE THAT GRAN'S TERMINATION WAS This position is devoid of merit.
Gran did not bar him from demanding benefits to which JUSTIFIABLE BY REASON OF INCOMPETENCE.
he was entitled. The appellate court found that the COROLLARY HERETO, WHETHER THE PRIETO In a catena of cases, it was ruled that failure of
Declaration was in the form of a quitclaim, and as such VS. NLRC RULING, AS APPLIED BY THE appellant to furnish a copy of the appeal to the
is frowned upon as contrary to public policy especially COURT OF APPEALS, IS APPLICABLE IN THE adverse party is not fatal to the appeal.
where the monetary consideration given in the INSTANT CASE.
Declaration was very much less than what he was In Estrada v. National Labor Relations Commission,24
legally entitled to—his backwages amounting to USD III. WHETHER PETITIONER HAS ESTABLISHED this Court set aside the order of the NLRC which
16,150.00. BY WAY OF SUBSTANTIAL EVIDENCE THAT dismissed an appeal on the sole ground that the
GRAN'S TERMINATION WAS JUSTIFIABLE BY appellant did not furnish the appellee a memorandum
REASON OF INSUBORDINATION AND of appeal contrary to the requirements of Article 223 of
DISOBEDIENCE.
the New Labor Code and Section 9, Rule XIII of its that is imposed on the NLRC, in such a case, is to Service by registered mail is complete upon receipt
Implementing Rules and Regulations. require the appellant to comply with the rule that by the addressee or his agent; but if the addressee fails
the opposing party should be provided with a copy to claim his mail from the post office within five (5)
Also, in J.D. Magpayo Customs Brokerage Corp. v. of the appeal memorandum. days from the date of first notice of the postmaster,
NLRC, the order of dismissal of an appeal to the NLRC service shall take effect after such time. (Emphasis
based on the ground that "there is no showing While Gran's failure to furnish EDI with a copy of the supplied.)
whatsoever that a copy of the appeal was served by the Appeal Memorandum is excusable, the abject failure of
appellant on the appellee"25 was annulled. The Court the NLRC to order Gran to furnish EDI with the Appeal Hence, if the service is done through registered mail, it
ratiocinated as follows: Memorandum constitutes grave abuse of discretion. is only deemed complete when the addressee or his
agent received the mail or after five (5) days from the
The failure to give a copy of the appeal to the adverse The records reveal that the NLRC discovered that Gran date of first notice of the postmaster. However, the
party was a mere formal lapse, an excusable neglect. failed to furnish EDI a copy of the Appeal NLRC Rules do not state what would constitute proper
Time and again We have acted on petitions to review Memorandum. The NLRC then ordered Gran to present proof of service.
decisions of the Court of Appeals even in the absence proof of service. In compliance with the order, Gran
of proof of service of a copy thereof to the Court of submitted a copy of Camp Crame Post Office's list of Sec. 13, Rule 13 of the Rules of Court, provides for
Appeals as required by Section 1 of Rule 45, Rules of mail/parcels sent on April 7, 1998.30 The post office's proofs of service:
Court. We act on the petitions and simply require list shows that private respondent Gran sent two pieces
the petitioners to comply with the rule.26 (Emphasis of mail on the same date: one addressed to a certain Dan Section 13. Proof of service.—Proof of personal
supplied.) O. de Guzman of Legaspi Village, Makati; and the service shall consist of a written admission of the party
other appears to be addressed to Neil B. Garcia (or served or the official return of the server, or the
The J.D. Magpayo ruling was reiterated in Carnation Gran),31 of Ermita, Manila—both of whom are not affidavit of the party serving, containing a full
Philippines Employees Labor Union-FFW v. National connected with petitioner. statement of the date, place and manner of service. If
Labor Relations Commission,27 Pagdonsalan v. the service is by ordinary mail, proof thereof shall
NLRC,28 and in Sunrise Manning Agency, Inc. v. This mailing list, however, is not a conclusive proof consist of an affidavit of the person mailing of facts
NLRC.29 that EDI indeed received a copy of the Appeal showing compliance with section 7 of this Rule. If
Memorandum. service is made by registered mail, proof shall be
Thus, the doctrine that evolved from these cases is that made by such affidavit and registry receipt issued
failure to furnish the adverse party with a copy of the Sec. 5 of the NLRC Rules of Procedure (1990) provides by the mailing office. The registry return card shall
appeal is treated only as a formal lapse, an excusable for the proof and completeness of service in be filed immediately upon its receipt by the sender,
neglect, and hence, not a jurisdictional defect. proceedings before the NLRC: or in lieu thereof the unclaimed letter together with
Accordingly, in such a situation, the appeal should not the certified or sworn copy of the notice given by
be dismissed; however, it should not be given due Section 5.32 Proof and completeness of service.—The the postmaster to the addressee (emphasis supplied).
course either. As enunciated in J.D. Magpayo, the duty return is prima facie proof of the facts indicated therein.
Based on the foregoing provision, it is obvious that the which also informed them that Gran had obtained a In the present case, the employment contract signed by
list submitted by Gran is not conclusive proof that he favorable NLRC Decision. This is not level playing Gran specifically states that Saudi Labor Laws will
had served a copy of his appeal memorandum to EDI, field and absolutely unfair and discriminatory against govern matters not provided for in the contract (e.g.
nor is it conclusive proof that EDI received its copy of the employer and the job recruiters. The rights of the specific causes for termination, termination procedures,
the Appeal Memorandum. He should have submitted an employers to procedural due process cannot be etc.). Being the law intended by the parties (lex loci
affidavit proving that he mailed the Appeal cavalierly disregarded for they too have rights assured intentiones) to apply to the contract, Saudi Labor Laws
Memorandum together with the registry receipt issued under the Constitution. should govern all matters relating to the termination of
by the post office; afterwards, Gran should have the employment of Gran.
immediately filed the registry return card. However, instead of annulling the dispositions of the
NLRC and remanding the case for further proceedings In international law, the party who wants to have a
Hence, after seeing that Gran failed to attach the proof we will resolve the petition based on the records before foreign law applied to a dispute or case has the burden
of service, the NLRC should not have simply accepted us to avoid a protracted litigation.33 of proving the foreign law. The foreign law is treated as
the post office's list of mail and parcels sent; but it a question of fact to be properly pleaded and proved as
should have required Gran to properly furnish the The second and third issues have a common matter— the judge or labor arbiter cannot take judicial notice of
opposing parties with copies of his Appeal whether there was just cause for Gran's dismissal— a foreign law. He is presumed to know only domestic
Memorandum as prescribed in J.D. Magpayo and hence, they will be discussed jointly. or forum law.35
the other cases. The NLRC should not have proceeded
with the adjudication of the case, as this constitutes Second and Third Issues: Whether Gran's dismissal Unfortunately for petitioner, it did not prove the
grave abuse of discretion. is justifiable by reason of incompetence, pertinent Saudi laws on the matter; thus, the
insubordination, and disobedience International Law doctrine of presumed-identity
The glaring failure of NLRC to ensure that Gran should approach or processual presumption comes into play.36
have furnished petitioner EDI a copy of the Appeal In cases involving OFWs, the rights and obligations Where a foreign law is not pleaded or, even if pleaded,
Memorandum before rendering judgment reversing the among and between the OFW, the local recruiter/agent, is not proved, the presumption is that foreign law is the
dismissal of Gran's complaint constitutes an evasion of and the foreign employer/principal are governed by the same as ours.37 Thus, we apply Philippine labor laws in
the pertinent NLRC Rules and established employment contract. A contract freely entered into is determining the issues presented before us.
jurisprudence. Worse, this failure deprived EDI of considered law between the parties; and hence, should
procedural due process guaranteed by the Constitution be respected. In formulating the contract, the parties Petitioner EDI claims that it had proven that Gran was
which can serve as basis for the nullification of may establish such stipulations, clauses, terms and legally dismissed due to incompetence and
proceedings in the appeal before the NLRC. One can conditions as they may deem convenient, provided they insubordination or disobedience.
only surmise the shock and dismay that OAB, EDI, and are not contrary to law, morals, good customs, public
ESI experienced when they thought that the dismissal order, or public policy.34 This claim has no merit.
of Gran's complaint became final, only to receive a
copy of Gran's Motion for Execution of Judgment
In illegal dismissal cases, it has been established by burden of proving that the dismissal is for just and valid disobedient. Petitioner EDI had clearly failed to
Philippine law and jurisprudence that the employer causes; and failure to do so would necessarily mean that overcome the burden of proving that Gran was validly
should prove that the dismissal of employees or the dismissal was not justified and therefore illegal.40 dismissed.
personnel is legal and just. Taking into account the character of the charges and the
penalty meted to an employee, the employer is bound Petitioner's imputation of incompetence on private
Section 33 of Article 277 of the Labor Code38 states to adduce clear, accurate, consistent, and convincing respondent due to his "insufficient knowledge in
that: evidence to prove that the dismissal is valid and legal.41 programming and zero knowledge of the ACAD
This is consistent with the principle of security of system" based only on the above mentioned letters,
ART. 277. MISCELLANEOUS PROVISIONS39 tenure as guaranteed by the Constitution and reinforced without any other evidence, cannot be given credence.
by Article 277 (b) of the Labor Code of the
(b) Subject to the constitutional right of workers to Philippines.42 An allegation of incompetence should have a factual
security of tenure and their right to be protected against foundation. Incompetence may be shown by weighing
dismissal except for a just and authorized cause and In the instant case, petitioner claims that private it against a standard, benchmark, or criterion. However,
without prejudice to the requirement of notice under respondent Gran was validly dismissed for just cause, EDI failed to establish any such bases to show how
Article 283 of this Code, the employer shall furnish the due to incompetence and insubordination or petitioner found Gran incompetent.
worker whose employment is sought to be terminated a disobedience. To prove its allegations, EDI submitted
written notice containing a statement of the causes for two letters as evidence. The first is the July 9, 1994 In addition, the elements that must concur for the
termination and shall afford the latter ample termination letter,43 addressed to Gran, from Andrea E. charge of insubordination or willful disobedience to
opportunity to be heard and to defend himself with the Nicolaou, Managing Director of OAB. The second is prosper were not present.
assistance of his representative if he so desires in an unsigned April 11, 1995 letter44 from OAB
accordance with company rules and regulations addressed to EDI and ESI, which outlined the reasons In Micro Sales Operation Network v. NLRC, we held
promulgated pursuant to guidelines set by the why OAB had terminated Gran's employment. that:
Department of Labor and Employment. Any decision
taken by the employer shall be without prejudice to the Petitioner claims that Gran was incompetent for the For willful disobedience to be a valid cause for
right of the workers to contest the validity or legality of Computer Specialist position because he had dismissal, the following twin elements must concur: (1)
his dismissal by filing a complaint with the regional "insufficient knowledge in programming and zero the employee's assailed conduct must have been willful,
branch of the National Labor Relations Commission. knowledge of [the] ACAD system."45 Petitioner also that is, characterized by a wrongful and perverse
The burden of proving that the termination was for claims that Gran was justifiably dismissed due to attitude; and (2) the order violated must have been
a valid or authorized cause shall rest on the insubordination or disobedience because he continually reasonable, lawful, made known to the employee and
employer. x x x failed to submit the required "Daily Activity Reports."46 must pertain to the duties which he had been engaged
However, other than the abovementioned letters, no to discharge.47
In many cases, it has been held that in termination other evidence was presented to show how and why
disputes or illegal dismissal cases, the employer has the Gran was considered incompetent, insubordinate, or
EDI failed to discharge the burden of proving Gran's Petitioner also raised the issue that Prieto v. NLRC,49 as only weakened its position but should not in any way
insubordination or willful disobedience. As indicated used by the CA in its Decision, is not applicable to the prejudice Gran. In any case, the issue is rendered moot
by the second requirement provided for in Micro Sales present case. and academic because Gran's incompetency is
Operation Network, in order to justify willful unproved.
disobedience, we must determine whether the order In Prieto, this Court ruled that "[i]t is presumed that
violated by the employee is reasonable, lawful, made before their deployment, the petitioners were subjected Fourth Issue: Gran was not Afforded Due Process
known to the employee, and pertains to the duties which to trade tests required by law to be conducted by the
he had been engaged to discharge. In the case at bar, recruiting agency to insure employment of only As discussed earlier, in the absence of proof of Saudi
petitioner failed to show that the order of the company technically qualified workers for the foreign laws, Philippine Labor laws and regulations shall
which was violated—the submission of "Daily Activity principal."50 The CA, using the ruling in the said case, govern the relationship between Gran and EDI. Thus,
Reports"—was part of Gran's duties as a Computer ruled that Gran must have passed the test; otherwise, he our laws and rules on the requisites of due process
Specialist. Before the Labor Arbiter, EDI should have would not have been hired. Therefore, EDI was at fault relating to termination of employment shall apply.
provided a copy of the company policy, Gran's job when it deployed Gran who was allegedly
description, or any other document that would show "incompetent" for the job. Petitioner EDI claims that private respondent Gran was
that the "Daily Activity Reports" were required for afforded due process, since he was allowed to work and
submission by the employees, more particularly by a According to petitioner, the Prieto ruling is not improve his capabilities for five months prior to his
Computer Specialist. applicable because in the case at hand, Gran termination.51 EDI also claims that the requirements of
misrepresented himself in his curriculum vitae as a due process, as enunciated in Santos, Jr. v. NLRC,52 and
Even though EDI and/or ESI were merely the local Computer Specialist; thus, he was not qualified for the Malaya Shipping Services, Inc. v. NLRC,53 cited by the
employment or recruitment agencies and not the job for which he was hired. CA in its Decision, were properly observed in the
foreign employer, they should have adduced additional present case.
evidence to convincingly show that Gran's employment We disagree.
was validly and legally terminated. The burden This position is untenable.
devolves not only upon the foreign-based employer but The CA is correct in applying Prieto. The purpose of
also on the employment or recruitment agency for the the required trade test is to weed out incompetent In Agabon v. NLRC,54 this Court held that:
latter is not only an agent of the former, but is also applicants from the pool of available workers. It is
solidarily liable with the foreign principal for any supposed to reveal applicants with false educational Procedurally, (1) if the dismissal is based on a just
claims or liabilities arising from the dismissal of the backgrounds, and expose bogus qualifications. Since cause under Article 282, the employer must give the
worker.48 EDI deployed Gran to Riyadh, it can be presumed that employee two written notices and a hearing or
Gran had passed the required trade test and that Gran is opportunity to be heard if requested by the employee
Thus, petitioner failed to prove that Gran was qualified for the job. Even if there was no objective before terminating the employment: a notice
justifiably dismissed due to incompetence, trade test done by EDI, it was still EDI's responsibility specifying the grounds for which dismissal is sought a
insubordination, or willful disobedience. to subject Gran to a trade test; and its failure to do so hearing or an opportunity to be heard and after hearing
or opportunity to be heard, a notice of the decision to a representative in accordance with Article 277 of the the unexpired portion of his employment contract or for
dismiss; and (2) if the dismissal is based on authorized Labor Code. Clearly, there was no intention to provide three (3) months for every year of the unexpired term
causes under Articles 283 and 284, the employer must Gran with due process. Summing up, Gran was notified whichever is less.60
give the employee and the Department of Labor and and his employment arbitrarily terminated on the same
Employment written notices 30 days prior to the day, through the same letter, and for unjustified In the present case, the employment contract provides
effectivity of his separation. grounds. Obviously, Gran was not afforded due that the employment contract shall be valid for a period
process. of two (2) years from the date the employee starts to
Under the twin notice requirement, the employees must work with the employer.61 Gran arrived in Riyadh,
be given two (2) notices before their employment could Pursuant to the doctrine laid down in Agabon,57 an Saudi Arabia and started to work on February 7, 1994;62
be terminated: (1) a first notice to apprise the employer is liable to pay nominal damages as hence, his employment contract is until February 7,
employees of their fault, and (2) a second notice to indemnity for violating the employee's right to statutory 1996. Since he was illegally dismissed on July 9, 1994,
communicate to the employees that their employment due process. Since OAB was in breach of the due before the effectivity of R.A. No. 8042, he is therefore
is being terminated. In between the first and second process requirements under the Labor Code and its entitled to backwages corresponding to the unexpired
notice, the employees should be given a hearing or regulations, OAB, ESI, and EDI, jointly and solidarily, portion of his contract, which was equivalent to USD
opportunity to defend themselves personally or by are liable to Gran in the amount of PhP 30,000.00 as 16,150.
counsel of their choice.55 indemnity.
Petitioner EDI questions the legality of the award of
A careful examination of the records revealed that, Fifth and Last Issue: Gran is Entitled to Backwages backwages and mainly relies on the Declaration which
indeed, OAB's manner of dismissing Gran fell short of is claimed to have been freely and voluntarily executed
the two notice requirement. While it furnished Gran the We reiterate the rule that with regard to employees by Gran. The relevant portions of the Declaration are as
written notice informing him of his dismissal, it failed hired for a fixed period of employment, in cases arising follows:
to furnish Gran the written notice apprising him of the before the effectivity of R.A. No. 804258 (Migrant
charges against him, as prescribed by the Labor Code.56 Workers and Overseas Filipinos Act) on August 25, I, ELEAZAR GRAN (COMPUTER SPECIALIST)
Consequently, he was denied the opportunity to 1995, that when the contract is for a fixed term and the AFTER RECEIVING MY FINAL SETTLEMENT
respond to said notice. In addition, OAB did not employees are dismissed without just cause, they are ON THIS DATE THE AMOUNT OF:
schedule a hearing or conference with Gran to defend entitled to the payment of their salaries corresponding
himself and adduce evidence in support of his defenses. to the unexpired portion of their contract.59 On the other S.R. 2,948.00 (SAUDI RIYALS TWO THOUSAND
Moreover, the July 9, 1994 termination letter was hand, for cases arising after the effectivity of R.A. No. NINE
effective on the same day. This shows that OAB had 8042, when the termination of employment is without
already condemned Gran to dismissal, even before just, valid or authorized cause as defined by law or HUNDRED FORTY EIGHT ONLY)
Gran was furnished the termination letter. It should also contract, the worker shall be entitled to the full
be pointed out that OAB failed to give Gran the chance reimbursement of his placement fee with interest of
to be heard and to defend himself with the assistance of twelve percent (12%) per annum, plus his salaries for
REPRESENTING COMPLETE PAYMENT under which they have been executed.63 (Emphasis SR 2,948.00 is even lower than his monthly salary of
(COMPENSATION) FOR THE SERVICES I supplied.) SR 3,190.00 (USD 850.00). In addition, it is also very
RENDERED TO OAB ESTABLISHMENT. much less than the USD 16,150.00 which is the amount
This Court had also outlined in Land and Housing Gran is legally entitled to get from petitioner EDI as
I HEREBY DECLARE THAT OAB EST. HAS NO Development Corporation, citing Periquet v. NLRC,64 backwages.
FINANCIAL OBLIGATION IN MY FAVOUR the parameters for valid compromise agreements,
AFTER RECEIVING THE ABOVE MENTIONED waivers, and quitclaims: 2. The Declaration reveals that the payment of SR
AMOUNT IN CASH. 2,948.00 is actually the payment for Gran's salary for
Not all waivers and quitclaims are invalid as against the services he rendered to OAB as Computer
I STATE FURTHER THAT OAB EST. HAS NO public policy. If the agreement was voluntarily entered Specialist. If the Declaration is a quitclaim, then the
OBLIGATION TOWARDS ME IN WHATEVER into and represents a reasonable settlement, it is consideration should be much much more than the
FORM. binding on the parties and may not later be disowned monthly salary of SR 3,190.00 (USD 850.00)—
simply because of a change of mind. It is only where although possibly less than the estimated Gran's salaries
I ATTEST TO THE TRUTHFULNESS OF THIS there is clear proof that the waiver was wangled from for the remaining duration of his contract and other
STATEMENT BY AFFIXING MY SIGNATURE an unsuspecting or gullible person, or the terms of benefits as employee of OAB. A quitclaim will
VOLUNTARILY. settlement are unconscionable on its face, that the law understandably be lower than the sum total of the
will step in to annul the questionable transaction. But amounts and benefits that can possibly be awarded to
SIGNED. where it is shown that the person making the waiver employees or to be earned for the remainder of the
ELEAZAR GRAN did so voluntarily, with full understanding of what contract period since it is a compromise where the
he was doing, and the consideration for the employees will have to forfeit a certain portion of the
Courts must undertake a meticulous and rigorous quitclaim is credible and reasonable, the transaction amounts they are claiming in exchange for the early
review of quitclaims or waivers, more particularly those must be recognized as a valid and binding undertaking. payment of a compromise amount. The court may
executed by employees. This requirement was clearly (Emphasis supplied.) however step in when such amount is unconscionably
articulated by Chief Justice Artemio V. Panganiban in low or unreasonable although the employee voluntarily
Land and Housing Development Corporation v. Is the waiver and quitclaim labeled a Declaration valid? agreed to it. In the case of the Declaration, the amount
Esquillo: It is not. is unreasonably small compared to the future wages of
Gran.
Quitclaims, releases and other waivers of benefits The Court finds the waiver and quitclaim null and void
granted by laws or contracts in favor of workers should for the following reasons: 3. The factual circumstances surrounding the execution
be strictly scrutinized to protect the weak and the of the Declaration would show that Gran did not
disadvantaged. The waivers should be carefully 1. The salary paid to Gran upon his termination, in the voluntarily and freely execute the document. Consider
examined, in regard not only to the words and amount of SR 2,948.00, is unreasonably low. As the following chronology of events:
terms used, but also the factual circumstances correctly pointed out by the court a quo, the payment of
a. On July 9, 1994, Gran received a copy of his letter of of the employee while the terms are unreasonably It is advisable that the stipulations be made in English
termination; favorable to the employer.66 and Tagalog or in the dialect known to the employee.
There should be two (2) witnesses to the execution of
b. On July 10, 1994, Gran was instructed to depart Thus, the Declaration purporting to be a quitclaim and the quitclaim who must also sign the quitclaim. The
Saudi Arabia and required to pay his plane ticket;65 waiver is unenforceable under Philippine laws in the document should be subscribed and sworn to under oath
absence of proof of the applicable law of Saudi Arabia. preferably before any administering official of the
c. On July 11, 1994, he signed the Declaration; Department of Labor and Employment or its regional
In order to prevent disputes on the validity and office, the Bureau of Labor Relations, the NLRC or a
d. On July 12, 1994, Gran departed from Riyadh, Saudi enforceability of quitclaims and waivers of employees labor attaché in a foreign country. Such official shall
Arabia; and under Philippine laws, said agreements should contain assist the parties regarding the execution of the
the following: quitclaim and waiver.67 This compromise settlement
e. On July 21, 1994, Gran filed the Complaint before becomes final and binding under Article 227 of the
the NLRC. 1. A fixed amount as full and final compromise Labor Code which provides that:
settlement;
The foregoing events readily reveal that Gran was [A]ny compromise settlement voluntarily agreed upon
"forced" to sign the Declaration and constrained to 2. The benefits of the employees if possible with the with the assistance of the Bureau of Labor Relations or
receive the amount of SR 2,948.00 even if it was against corresponding amounts, which the employees are the regional office of the DOLE, shall be final and
his will—since he was told on July 10, 1994 to leave giving up in consideration of the fixed compromise binding upon the parties and the NLRC or any court
Riyadh on July 12, 1994. He had no other choice but to amount; "shall not assume jurisdiction over issues involved
sign the Declaration as he needed the amount of SR therein except in case of non-compliance thereof or if
2,948.00 for the payment of his ticket. He could have 3. A statement that the employer has clearly explained there is prima facie evidence that the settlement was
entertained some apprehensions as to the status of his to the employee in English, Filipino, or in the dialect obtained through fraud, misrepresentation, or coercion.
stay or safety in Saudi Arabia if he would not sign the known to the employees—that by signing the waiver or
quitclaim. quitclaim, they are forfeiting or relinquishing their right It is made clear that the foregoing rules on quitclaim or
to receive the benefits which are due them under the waiver shall apply only to labor contracts of OFWs in
4. The court a quo is correct in its finding that the law; and the absence of proof of the laws of the foreign country
Declaration is a contract of adhesion which should be agreed upon to govern said contracts. Otherwise, the
construed against the employer, OAB. An adhesion 4. A statement that the employees signed and executed foreign laws shall apply.
contract is contrary to public policy as it leaves the the document voluntarily, and had fully understood the
weaker party—the employee—in a "take-it-or-leave-it" contents of the document and that their consent was WHEREFORE, the petition is DENIED. The October
situation. Certainly, the employer is being unjust to the freely given without any threat, violence, duress, 18, 2000 Decision in CA-G.R. SP No. 56120 of the
employee as there is no meaningful choice on the part intimidation, or undue influence exerted on their Court of Appeals affirming the January 15, 1999
person.
Decision and September 30, 1999 Resolution of the plaintiff the sum of P2,837.34, with interest thereon at incurred while he was such stockholder, he is relieved
NLRC the rate of 6 per cent per annum from March 11, 1929, from any further personal liability for such debt, and if
until paid, and to pay also the amount of P1,590.63, for an action has been brought against him upon such debt,
is AFFIRMED with the MODIFICATION that the second cause of action, with interest thereon at 7 it must be dismissed, as to him, upon his paying the
petitioner EDI-Staffbuilders International, Inc. shall per cent per annum from April 8, 1929, until paid. The costs, or such proportion thereof as may be properly
pay the amount of PhP 30,000.00 to respondent Gran as defendant is further ordered to pay the amount of P500 chargeable against him. The liability of each
nominal damages for non-compliance with statutory as reasonable attorney's fees in prosecuting this action, stockholder is determined by the amount of stock or
due process. and to pay the costs of these proceedings. shares owned by him at the time the debt or liability
was incurred; and such liability is not released by any
No costs. This case involves the liability of the defendant, a subsequent transfer of stock.
former resident of the State of California, now residing
SO ORDERED. in the Philippine Islands, for obligations contracted by The defendant-appellant makes the following
a California corporation of which he was a stockholder assignments of error:
Quisumbing, Carpio, Tinga, Nachura, JJ., concur. at the time said obligations were contracted with the
plaintiff-appellee in this case. I. The lower court erred in holding that the defendant
was the holder of 1,432 shares of the capital stock of
9) Willamette Iron and Steel Works vs. Muzzal May The section of the Civil Code of California under which the Meyer-Muzzal Company.
21, 1935 the plaintiff seeks to recover reads:
II. The lower court erred in finding that plaintiff has
G.R. No. L-42538 May 21, 1935 SEC. 322. Each stockholder of a corporation is proven the existence of the foreign law involved in this
individually and personally liable for such proportion action.
WILLAMETTE IRON & STEEL WORKS, of all its debts and liabilities contracted or incurred
plaintiff-appellee, during the time he was a stockholder as the amount of III. The lower court erred in enforcing the law of
vs. stock or shares owned by him bears to the whole of the California.
A.H. MUZZAL, defendant-appellant. subscribed capital stock or shares of the corporation.
Any creditor of the corporation may institute joint or IV. The lower court erred in rendering judgment
This is an appeal from a decision of the Court of First several actions against any of its stockholders, for the against the defendant.
Instance of Zamboanga, the dispositive part of which proportion of his claim payable by each, and in such
reads: action the court must (1) ascertain the proportion of the As to the first assignment of error the witness Stanley
claim or debt for which each defendant is liable, and H. Hermann, a certified public accountant, testified that
In view of the considerations above stated, judgment (2) a several judgment must be rendered against each, he knows that the Meyer-Muzzal Company is a
is hereby entered in favor of the plaintiff, ordering the in conformity therewith. If any stockholder pays his corporation and further testified as follows:
defendant, for the first cause of action, to pay to proportion of any debt due from the corporation,
I became acquainted with the corporation by reason of make reference thereto in answering the questions The above sufficiently establishes the fact that the
being employed by it in October, November and asked of you in this deposition, please answer each and defendant was the owner of 1,433 shares of stock of the
December of 1929 as a certified public accountant and all of said questions by reference to any documents or corporation Meyer-Muzzal Company when it
auditor to personally examine the company's books of working sheets which you may be prepared upon the contracted the obligations alleged in the complaint.
account, stock and other records of the company for occasion of your examining and/or auditing the books
the purpose of certifying, if possible, to the correctness of account, stock and other records of the Meyer- As to the second assignment of error Mr. Arthur W.
of a statement of the financial condition of the Muzzal Company. Bolton, an attorney-at-law of San Francisco, California,
company on March 31, 1929. since the year 1918, under oath, quoted verbatim
A. By reference to my working papers which I made section 322 of the California Civil Code and stated that
xxx xxx xxx at the time I examined the books of account and stock said section was in force at the time the obligations of
records of Meyer-Muzzal Company in October, the defendant to the plaintiff were incurred, i. e., on
8. Please state, if you know, whether or not one A.H. November, December, 1929, and which working November 5, 1928 and December 22, 1928. This
Muzzal was a stockholder of Meyer-Muzzal Company papers are in my possession, I find and can state evidence sufficiently established the fact that the
on November 5, 1928 and December 22, 1928, and if accordingly that these working papers show what the section in question was the law of the State of
he was, please state the number and value of the shares stock and other records of said Meyer-Muzzal California on the above dates. A reading of sections 300
of capital stock of Meyer-Muzzal Company Company recorded in regard to the matters contained and 301 of our Code of Civil Procedure will convince
subscribed and owned by said A.H. Muzzal on in questions No. 6, No. 7 and No. 8 and I can state one that these sections do not exclude the presentation
November 5, 1928 and December 22, 1928? accordingly from my examination of said records and of other competent evidence to prove the existence of a
by reference to my working papers that I know who foreign law.
A. Yes, Mr. A.H. Muzzal was a stockholder of the the stockholders of Meyer-Muzzal company were; that
Meyer-Muzzal Company on the dates specified. the amount of the subscribed capital stock of said "The foreign law is a matter of fact ... You ask the
Fourteen hundred thirty-three shares of the capital Meyer-Muzzal Company on said dates was 5,000 witness what the law is; he may from his recollection,
stock of Meyer-Muzzal Company of the par value of shares of the par value of $10 each, and that A.H. or on producing and referring to books, say what it is."
$10 each were subscribed and owned by said A.H. Muzzal was a stockholder of the Meyer-Muzzal (Lord Campbell concurring in an opinion of Lord Chief
Muzzal on November 5th, 1928 and on December Company on the dates specified and that fourteen Justice Denman in a well known English case where a
22nd, 1928, and said shares were issued to and hundred thirty-three shares of the capital stock of witness was called upon to prove the Roman laws of
standing in the name of A. H. Muzzal on the books of Meyer-Muzzal Company of the par value of $10 each marriage and was permitted to testify, though he
said company at said times. were subscribed and owned by A.H. Muzzal on referred to a book containing the decrees of the Council
November 5, 1928 and on December 22nd, 1928 and of Trent as controlling, Jones on Evidence, Second
9. If, by reason of the loss, destruction and/or said shares were issued to and standing in the name of Edition, Volume 4, pages 3148-3152.) Aside from the
disappearance of the stock and other corporate records A.H. Muzzal on the books of said company at said testimony of Attorney Bolton Ragland's Annotated
of the Meyer-Muzzal Company since the time you had times. Civil Code of California was presented as evidence.
occasion to examine them, you have been unable to This book contains that State's Civil Code as adopted
March 21, 1872, with the subsequent official statute 10) Hong Kong and Shanghai Banking Corp vs. Sherman Singapore branch of petitioner BANK an overdraft
amendments to and including the year 1929. et. al. August 11, 1989 facility in the maximum amount of Singapore
dollars 200,000.00 (which amount was
In the third and fourth assignments of error the G.R. No. 72494 August 11, 1989 subsequently increased to Singapore dollars
appellant argues that since the law of California, as to 375,000.00) with interest at 3% over petitioner
the liability of stockholders of a corporation, is different HONGKONG AND SHANGHAI BANKING BANK prime rate, payable monthly, on amounts
from and inconsistent with the Philippine Corporation CORPORATION, petitioner, due under said overdraft facility; as a security for
Law the courts here should not impose liability vs. the repayment by the COMPANY of sums
provided in that law upon a resident of these Islands JACK ROBERT SHERMAN, DEODATO RELOJ advanced by petitioner BANK to it through the
who is a stockholder of a California corporation. The and THE INTERMEDIATE APPELLATE COURT, aforesaid overdraft facility, on October 7, 1982,
herein defendant is chargeable with notice of the law of respondents. both private respondents and a certain Robin de
California as to the liability of stockholders for debt of Clive Lowe, all of whom were directors of the
a corporation proportionate to their stock holdings, in This is a petition for review on certiorari of the COMPANY at such time, executed a Joint and
view of the fact that he was one of the incorporators of decision of the Intermediate Appellate Court (now Several Guarantee (p. 53, Rollo) in favor of
the Meyer-Muzzal Company in the year 1924 and was Court of Appeals) dated August 2, 1985, which petitioner BANK whereby private respondents and
still a stockholder in that company in the year 1928. reversed the order of the Regional Trial Court Lowe agreed to pay, jointly and severally, on
Exhibit 10 of the plaintiff is a certified company of the dated February 28,1985 denying the Motion to demand all sums owed by the COMPANY to
articles of incorporation of Meyer-Muzzal Company in Dismiss filed by private respondents Jack Robert petitioner BANK under the aforestated overdraft
which it appears that that company was incorporated on Sherman and Deodato Reloj. facility.
August 22, 1924, and that the incorporators were A.H.
Muzzal, Leo W. Meyer and James Rolph, Jr., "all of A complaint for collection of a sum of money (pp. The Joint and Several Guarantee provides, inter
whom are residents and citizens of the State of 49-52, Rollo) was filed by petitioner Hongkong and alia, that:
California." The defendant cannot now escape liability Shanghai Banking Corporation (hereinafter
by alleging that the California law is unjust and referred to as petitioner BANK) against private This guarantee and all rights, obligations and
different from the inconsistent with the Philippine respondents Jack Robert Sherman and Deodato liabilities arising hereunder shall be construed and
Corporation Law. Reloj, docketed as Civil Case No. Q-42850 before determined under and may be enforced in
the Regional Trial Court of Quezon City, Branch accordance with the laws of the Republic of
The judgment of the trial court is affirmed with costs in 84. Singapore. We hereby agree that the Courts of
both instances against the defendant-appellant. Singapore shall have jurisdiction over all disputes
It appears that sometime in 1981, Eastern Book arising under this guarantee. ... (p. 33-A, Rollo).
Malcolm, Abad Santos, Hull, Vickers, and Diaz, JJ., Supply Service PTE, Ltd. (hereinafter referred to
concur. as COMPANY), a company incorporated in The COMPANY failed to pay its obligation. Thus,
Singapore applied with, and was granted by, the petitioner BANK demanded payment of the
obligation from private respondents, conformably Singapore. We hereby agree that the courts in A motion for reconsideration of the said order was
with the provisions of the Joint and Several Singapore shall have jurisdiction over all filed by private respondents which was, however,
Guarantee. Inasmuch as the private respondents disputes arising under this guarantee, denied (p. 66, Rollo).
still failed to pay, petitioner BANK filed the above-
mentioned complaint. the Court has no jurisdiction over the subject Private respondents then filed before the
matter of the case. The Court finds and respondent Intermediate Appellate Court (now
On December 14,1984, private respondents filed concludes otherwise. There is nothing in the Court of Appeals) a petition for prohibition with
a motion to dismiss (pp 54-56, Rollo) which was Guarantee which says that the courts of preliminary injunction and/or prayer for a
opposed by petitioner BANK (pp. 58-62, Rollo). Singapore shall have jurisdiction to the restraining order (pp. 39-48, Rollo). On August 2,
Acting on the motion, the trial court issued an order exclusion of the courts of other countries or 1985, the respondent Court rendered a decision
dated February 28, 1985 (pp, 64-65, Rollo), which nations. Also, it has long been established in (p. 37, Rollo), the dispositive portion of which
read as follows: law and jurisprudence that jurisdiction of courts reads:
is fixed by law; it cannot be conferred by the will,
In a Motion to Dismiss filed on December 14, submission or consent of the parties. WHEREFORE, the petition for prohibition with
1984, the defendants seek the dismissal of the preliminary injuction is hereby GRANTED. The
complaint on two grounds, namely: On the second ground, it is asserted that respondent Court is enjoined from taking further
defendant Robert' , Sherman is not a citizen nor cognizance of the case and to dismiss the same
1. That the court has no jurisdiction over the a resident of the Philippines. This argument for filing with the proper court of Singapore which
subject matter of the complaint; and holds no water. Jurisdiction over the persons of is the proper forum. No costs.
defendants is acquired by service of summons
2. That the court has no jurisdiction over the and copy of the complaint on them. There has SO ORDERED.
persons of the defendants. been a valid service of summons on both
defendants and in fact the same is admitted The motion for reconsideration was denied (p. 38,
In the light of the Opposition thereto filed by when said defendants filed a 'Motion for Rollo), hence, the present petition.
plaintiff, the Court finds no merit in the motion. "On Extension of Time to File Responsive Pleading
the first ground, defendants claim that by virtue of on December 5, 1984. The main issue is whether or not Philippine courts
the provision in the Guarantee (the actionable have jurisdiction over the suit.
document) which reads — WHEREFORE, the Motion to Dismiss is hereby
DENIED. The controversy stems from the interpretation of a
This guarantee and all rights, obligations and provision in the Joint and Several Guarantee, to
liabilities arising hereunder shall be construed SO ORDERED. wit:
and determined under and may be enforced in
accordance with the laws of the Republic of
(14) This guarantee and all rights, obligations and the laws of the Republic of Singapore. A closer not have jurisdiction in the absence of some
liabilites arising hereunder shall be construed and examination of paragraph 14 of the Guarantee reasonable basis for exercising it, whether the
determined under and may be enforced in Agreement upon which the motion to dismiss is proceedings are in rem quasi in rem or in
accordance with the laws of the Republic of based, employs in clear and unmistakeable (sic) personam. To be reasonable, the jurisdiction must
Singapore. We hereby agree that the Courts in terms the word 'shall' which under statutory be based on some minimum contacts that will not
Singapore shall have jurisdiction over all disputes construction is mandatory. offend traditional notions of fair play and
arising under this guarantee. ... (p. 53-A, Rollo) substantial justice (J. Salonga, Private
Thus it was ruled that: International Law, 1981, p. 46). Indeed, as
In rendering the decision in favor of private pointed-out by petitioner BANK at the outset, the
respondents, the Court of Appeals made, the ... the word 'shall' is imperative, operating to instant case presents a very odd situation. In the
following observations (pp. 35-36, Rollo): impose a duty which may be enforced (Dizon vs. ordinary habits of life, anyone would be disinclined
Encarnacion, 9 SCRA 714).lâwphî1.ñèt to litigate before a foreign tribunal, with more
There are significant aspects of the case to which reason as a defendant. However, in this case,
our attention is invited. The loan was obtained by There is nothing more imperative and restrictive private respondents are Philippine residents (a
Eastern Book Service PTE, Ltd., a company than what the agreement categorically commands fact which was not disputed by them) who would
incorporated in Singapore. The loan was granted that 'all rights, obligations, and liabilities arising rather face a complaint against them before a
by the Singapore Branch of Hongkong and hereunder shall be construed and determined foreign court and in the process incur considerable
Shanghai Banking Corporation. The Joint and under and may be enforced in accordance with the expenses, not to mention inconvenience, than to
Several Guarantee was also concluded in laws of the Republic of Singapore.' have a Philippine court try and resolve the case.
Singapore. The loan was in Singaporean dollars Private respondents' stance is hardly
and the repayment thereof also in the same While it is true that "the transaction took place in comprehensible, unless their ultimate intent is to
currency. The transaction, to say the least, took Singaporean setting" and that the Joint and evade, or at least delay, the payment of a just
place in Singporean setting in which the law of that Several Guarantee contains a choice-of-forum obligation.
country is the measure by which that relationship clause, the very essence of due process dictates
of the parties will be governed. that the stipulation that "[t]his guarantee and all The defense of private respondents that the
rights, obligations and liabilities arising hereunder complaint should have been filed in Singapore is
xxx xxx xxx shall be construed and determined under and may based merely on technicality. They did not even
be enforced in accordance with the laws of the claim, much less prove, that the filing of the action
Contrary to the position taken by respondents, the Republic of Singapore. We hereby agree that the here will cause them any unnecessary trouble,
guarantee agreement compliance that any Courts in Singapore shall have jurisdiction over all damage, or expense. On the other hand, there is
litigation will be before the courts of Singapore and disputes arising under this guarantee" be liberally no showing that petitioner BANK filed the action
that the rights and obligations of the parties shall construed. One basic principle underlies all rules here just to harass private respondents.
be construed and determined in accordance with of jurisdiction in International Law: a State does
In the case of Polytrade Corporation vs. Blanco, stipulation as to venue does not preclude the has been waived. However, We agree with the
G.R. No. L-27033, October 31, 1969, 30 SCRA filing of suits in the residence of plaintiff or ruling of the respondent Court that:
187, it was ruled: defendant under Section 2 (b), Rule 4, Rules of
Court, in the absence of qualifying or restrictive While in the main, the motion to dismiss fails to
... An accurate reading, however, of the words in the agreement which would indicate that categorically use with exactitude the words
stipulation, 'The parties agree to sue and be sued the place named is the only venue agreed upon 'improper venue' it can be perceived from the
in the Courts of Manila,' does not preclude the by the parties. general thrust and context of the motion that what
filing of suits in the residence of plaintiff or is meant is improper venue, The use of the word
defendant. The plain meaning is that the parties Applying the foregoing to the case at bar, the 'jurisdiction' was merely an attempt to copy-cat
merely consented to be sued in Manila. Qualifying parties did not thereby stipulate that only the the same word employed in the guarantee
or restrictive words which would indicate that courts of Singapore, to the exclusion of all the rest, agreement but conveys the concept of venue.
Manila and Manila alone is the venue are totally has jurisdiction. Neither did the clause in question Brushing aside all technicalities, it would appear
absent therefrom. We cannot read into that clause operate to divest Philippine courts of jurisdiction. that jurisdiction was used loosely as to be
that plaintiff and defendant bound themselves to In International Law, jurisdiction is often defined as synonymous with venue. It is in this spirit that this
file suits with respect to the last two transactions the light of a State to exercise authority over Court must view the motion to dismiss. ... (p. 35,
in question only or exclusively in Manila. For, that persons and things within its boundaries subject to Rollo).
agreement did not change or transfer venue. It certain exceptions. Thus, a State does not assume
simply is permissive. The parties solely agreed to jurisdiction over travelling sovereigns, At any rate, this issue is now of no moment
add the courts of Manila as tribunals to which they ambassadors and diplomatic representatives of because We hold that venue here was properly
may resort. They did not waive their right to pursue other States, and foreign military units stationed in laid for the same reasons discussed above.
remedy in the courts specifically mentioned in or marching through State territory with the
Section 2(b) of Rule 4. Renuntiatio non permission of the latter's authorities. This The respondent Court likewise ruled that (pp. 36-
praesumitur. authority, which finds its source in the concept of 37, Rollo):
sovereignty, is exclusive within and throughout the
This ruling was reiterated in the case of Neville Y. domain of the State. A State is competent to take ... In a conflict problem, a court will simply refuse
Lamis Ents., et al. v. Lagamon, etc., et al., G.R. hold of any judicial matter it sees fit by making its to entertain the case if it is not authorized by law
No. 57250, October 30, 1981, 108 SCRA 740, courts and agencies assume jurisdiction over all to exercise jurisdiction. And even if it is so
where the stipulation was "[i]n case of litigation, kinds of cases brought before them (J. Salonga, authorized, it may still refuse to entertain the case
jurisdiction shall be vested in the Court of Davao Private International Law, 1981, pp. 37- by applying the principle of forum non
City." We held: 38).lâwphî1.ñèt conveniens. ...

Anent the claim that Davao City had been As regards the issue on improper venue, petitioner However, whether a suit should be entertained or
stipulated as the venue, suffice it to say that a BANK avers that the objection to improper venue dismissed on the basis of the principle of forum
non conveniens depends largely upon the facts of Narvasa, Cruz, Gancayco and Griñ;o-Aquino, JJ.,
the particular case and is addressed to the sound concur.
discretion of the trial court (J. Salonga, Private
International Law, 1981, p. 49).lâwphî1.ñèt Thus,
the respondent Court should not have relied on
such principle.

Although the Joint and Several Guarantee

prepared by petitioner BANK is a contract of
adhesion and that consequently, it cannot be
permitted to take a stand contrary to the
stipulations of the contract, substantial bases exist
for petitioner Bank's choice of forum, as discussed
earlier.

Lastly, private respondents allege that neither the

petitioner based at Hongkong nor its Philippine
branch is involved in the transaction sued upon.
This is a vain attempt on their part to further thwart
the proceedings below inasmuch as well-known is
the rule that a defendant cannot plead any
defense that has not been interposed in the court
below.

ACCORDINGLY, the decision of the respondent

Court is hereby REVERSED and the decision of
the Regional Trial Court is REINSTATED, with
costs against private respondents. This decision is
immediately executory.

SO ORDERED.