[G.R. No. 122191. October 8, 1998]
Eventually, they were again put in service by
SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF
APPEALS, MILAGROS P. MORADA and HON. RODOLFO
A. ORTIZ, in his capacity as Presiding Judge of Branch 89,
Regional Trial Court of Quezon City, respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of
Court seeks to annul and set aside the Resolution[1] dated
September 27, 1995 and the Decision[2] dated April 10, 1996
of the Court of Appeals[3] in CA-G.R. SP No. 36533,[4] and
the Orders[5] dated August 29, 1994[6] and February 2,
1995[7] that were issued by the trial court in Civil Case No.
Q-93-18394.[8]
The pertinent antecedent facts which gave rise to the instant
petition, as stated in the questioned Decision[9], are as
follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a
Flight Attendant for its airlines based in Jeddah, Saudi Arabia.
xxx
On April 27, 1990, while on a lay-over in Jakarta, Indonesia,
plaintiff went to a disco dance with fellow crew members
Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi
nationals. Because it was almost morning when they returned
to their hotels, they agreed to have breakfast together at the
room of Thamer. When they were in te (sic) room, Allah left
on some pretext. Shortly after he did, Thamer attempted to
rape plaintiff. Fortunately, a roomboy and several security
personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-
Gazzawi, the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several
SAUDIA officials interrogated her about the Jakarta
incident. They then requested her to go back to Jakarta to help
arrange the release of Thamer and Allah. In Jakarta, SAUDIA
Legal Officer Sirah Akkad and base manager Baharini
negotiated with the police for the immediate release of the
detained crew members but did not succeed because plaintiff
refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to
understand the local dialect. She also declined to sign a blank
paper and a document written in the local dialect. Eventually,
SAUDIA allowed plaintiff to return to Jeddah but barred her
from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi
Arabian government, the Indonesian authorities agreed to
deport Thamer and Allah after two weeks of
detention.
defendant SAUDI (sic). In September 1990, defendant
SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the
Jakarta incident was already behind her, her superiors
requested her to see Mr. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
passport and questioned her about the Jakarta
incident.Miniewy simply stood by as the police put pressure
on her to make a statement dropping the case against Thamer
and Allah. Not until she agreed to do so did the police return
her passport and allowed her to catch the afternoon flight out
of Jeddah.
One year and a half later or on June 16, 1993, in Riyadh,
Saudi Arabia, a few minutes before the departure of her flight
to Manila, plaintiff was not allowed to board the plane and
instead ordered to take a later flight to Jeddah to see Mr.
Miniewy, the Chief Legal Officer of SAUDIA. When she did,
a certain Khalid of the SAUDIA office brought her to a Saudi
court where she was asked to sign a document written in
Arabic. They told her that this was necessary to close the case
against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27,
1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27, 1993
for further investigation. Plaintiff did so after receiving
assurance from SAUDIAs Manila manager, Aslam Saleemi,
that the investigation was routinary and that it posed no danger
to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the
same Saudi court on June 27, 1993. Nothing happened then
but on June 28, 1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however,
just as her plane was about to take off, a SAUDIA officer told
her that the airline had forbidden her to take flight. At the
Inflight Service Office where she was told to go, the secretary
of Mr. Yahya Saddick took away her passport and told her to
remain in Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted
plaintiff to the same court where the judge, to her
astonishment and shock, rendered a decision, translated to her
in English, sentencing her to five months imprisonment and to
286 lashes. Only then did she realize that the Saudi court had
tried her, together with Thamer and Allah, for what happened
in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
going to a disco, dancing and listening to the music in
violation of Islamic laws; and (3) socializing with the male
crew, in contravention of Islamic tradition.[10]
Facing conviction, private respondent sought the help of her
employer, petitioner SAUDIA. Unfortunately, she was denied
any assistance. She then asked the Philippine Embassy in
Jeddah to help her while her case is on appeal. Meanwhile, to
pay for her upkeep, she worked on the domestic flight of
SAUDIA, while Thamer and Allah continued to serve in the
international flights.[11]
Because she was wrongfully convicted, the Prince of Makkah
dismissed the case against her and allowed her to leave Saudi
Arabia. Shortly before her return to Manila,[12] she was
terminated from the service by SAUDIA, without her being
informed of the cause.
On November 23, 1993, Morada filed a Complaint[13] for
damages against SAUDIA, and Khaled Al-Balawi (Al-
Balawi), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To
Dismiss[14] which raised the following grounds, to wit: (1)
that the Complaint states no cause of action against Saudia; (2)
that defendant Al-Balawi is not a real party in interest; (3) that
the claim or demand set forth in the Complaint has been
waived, abandoned or otherwise extinguished; and (4) that the
trial court has no jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To
Motion to Dismiss)[15] Saudia filed a reply[16] thereto on
March 3, 1994.
On June 23, 1994, Morada filed an Amended
Complaint[17] wherein Al-Balawi was dropped as party
defendant. On August 11, 1994, Saudia filed its Manifestation
and Motion to Dismiss Amended Complaint[18].
The trial court issued an Order[19] dated August 29, 1994
denying the Motion to Dismiss Amended Complaint filed by
Saudia.
From the Order of respondent Judge[20] denying the Motion
to Dismiss, SAUDIA filed on September 20, 1994, its Motion
for Reconsideration[21] of the Order dated August 29, 1994. It
alleged that the trial court has no jurisdiction to hear and try
the case on the basis of Article 21 of the Civil Code, since the
proper law applicable is the law of the Kingdom of Saudi
Arabia.On October 14, 1994, Morada filed her
Opposition[22] (To Defendants Motion for Reconsideration).
In the Reply[23] filed with the trial court on October 24, 1994,
SAUDIA alleged that since its Motion for Reconsideration
raised lack of jurisdiction as its cause of action, the Omnibus
Motion Rule does not apply, even if that ground is raised for
the first time on appeal. Additionally, SAUDIA alleged that
the Philippines does not have any substantial interest in the
prosecution of the instant case, and hence, without jurisdiction
to adjudicate the same.
Respondent Judge subsequently issued another
Order[24] dated February 2, 1995, denying SAUDIAs Motion
for Reconsideration. The pertinent portion of the assailed
Order reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi
Arabian Airlines filed, thru counsel, on September 20, 1994,
and the Opposition thereto of the plaintiff filed, thru counsel,
on October 14, 1994, as well as the Reply therewith of
defendant Saudi Arabian Airlines filed, thru counsel, on
October 24, 1994, considering that a perusal of the plaintiffs
Amended Complaint, which is one for the recovery of actual,
moral and exemplary damages plus attorneys fees, upon the
basis of the applicable Philippine law, Article 21 of the New
Civil Code of the Philippines, is, clearly, within the
jurisdiction of this Court as regards the subject matter, and
there being nothing new of substance which might cause the
reversal or modification of the order sought to be
reconsidered, the motion for reconsideration of the defendant,
is DENIED.
SO ORDERED.[25]
Consequently, on February 20, 1995, SAUDIA filed its
Petition for Certiorari and Prohibition with Prayer for Issuance
of Writ of Preliminary Injunction and/or Temporary
Restraining Order[26] with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with
Temporary Restraining Order[27] dated February 23, 1995,
prohibiting the respondent Judge from further conducting any
proceeding, unless otherwise directed, in the interim.
In another Resolution[28] promulgated on September 27,
1995, now assailed, the appellate court denied SAUDIAs
Petition for the Issuance of a Writ of Preliminary Injunction
dated February 18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary
Injunction is hereby DENIED, after considering the Answer,
with Prayer to Deny Writ of Preliminary Injunction (Rollo, p.
135) the Reply and Rejoinder, it appearing that herein
petitioner is not clearly entitled thereto (Unciano Paramedical
College, et. Al., v. Court of Appeals, et. Al., 100335, April 7,
1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable
Court the instant Petition[29] for Review with Prayer for
Temporary Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition,
respondent Court of Appeals rendered the Decision[30] dated
April 10, 1996, now also assailed. It ruled that the Philippines
is an appropriate forum considering that the Amended
Complaints basis for recovery of damages is Article 21 of the
Civil Code, and thus, clearly within the jurisdiction of
respondent Court. It further held that certiorari is not the
proper remedy in a denial of a Motion to Dismiss, inasmuch as
the petitioner should have proceeded to trial, and in case of an
adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for
Review with Prayer for Temporary Restraining
Order[31] dated April 30, 1996, given due course by this
Court. After both parties submitted their Memoranda,[32] the
instant case is now deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I the law of the Kingdom of Saudi Arabia, by virtue of the lex
The trial court has no jurisdiction to hear and try Civil Case
No. Q-93-18394 based on Article 21 of the New Civil Code
since the proper law applicable is the law of the Kingdom of
Saudi Arabia inasmuch as this case involves what is known in
private international law as a conflicts problem. Otherwise, the
Republic of the Philippines will sit in judgment of the acts
done by another sovereign state which is abhorred.
II.
Leave of court before filing a supplemental pleading is not a
jurisdictional requirement. Besides, the matter as to absence of
leave of court is now moot and academic when this Honorable
Court required the respondents to comment on petitioners
April 30, 1996 Supplemental Petition For Review With Prayer
For A Temporary Restraining Order Within Ten (10) Days
From Notice Thereof. Further, the Revised Rules of Court
should be construed with liberality pursuant to Section 2, Rule
1 thereof.
III.
Petitioner received on April 22, 1996 the April 10, 1996
decision in CA-G.R. SP NO. 36533 entitled Saudi Arabian
Airlines v. Hon. Rodolfo A. Ortiz, et al. and filed its April 30,
1996 Supplemental Petition For Review With Prayer For A
Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or
within the 15-day reglementary period as provided for under
Section 1, Rule 45 of the Revised Rules of Court. Therefore,
the decision in CA-G.R. SP NO. 36533 has not yet become
final and executory and this Honorable Court can take
cognizance of this case.[33]
From the foregoing factual and procedural antecedents, the
following issues emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED
IN HOLDING THAT THE REGIONAL TRIAL COURT OF
QUEZON CITY HAS JURISDICTION TO HEAR AND TRY
CIVIL CASE NO. Q-93-18394 ENTITLED MILAGROS P.
MORADA V. SAUDI ARABIAN AIRLINES.
II.
WHETHER RESPONDENT APPELLATE COURT ERRED
IN RULING THAT IN THE CASE PHILIPPINE LAW
SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws
that must be settled at the outset. It maintains that private
respondents claim for alleged abuse of rights occurred in the
Kingdom of Saudi Arabia. It alleges that the existence of a
foreign element qualifies the instant case for the application of
loci delicti commissi rule.[34]
On the other hand, private respondent contends that since her
Amended Complaint is based on Articles 19[35] and 21[36] of
the Civil Code, then the instant case is properly a matter of
domestic law.[37]
Under the factual antecedents obtaining in this case, there is
no dispute that the interplay of events occurred in two states,
the Philippines and Saudi Arabia.
As stated by private respondent in her Amended
Complaint[38] dated June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a
foreign airlines corporation doing business in the
Philippines. It may be served with summons and other court
processes at Travel Wide Associated Sales (Phils.), Inc.,
3rd Floor, Cougar Building, 114 Valero St., Salcedo Village,
Makati, Metro Manila.
xxxxxxxxx
6. Plaintiff learned that, through the intercession of the Saudi
Arabian government, the Indonesian authorities agreed to
deport Thamer and Allah after two weeks of
detention.Eventually, they were again put in service by
defendant SAUDIA. In September 1990, defendant SAUDIA
transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the
Jakarta incident was already behind her, her superiors
requested her to see MR. Ali Meniewy, Chief Legal Officer of
SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her
passport and questioned her about the Jakarta
incident.Miniewy simply stood by as the police put pressure
on her to make a statement dropping the case against Thamer
and Allah. Not until she agreed to do so did the police return
her passport and allowed her to catch the afternoon flight out
of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh,
Saudi Arabia, a few minutes before the departure of her flight
to Manila, plaintiff was not allowed to board the plane and
instead ordered to take a later flight to Jeddah to see Mr.
Meniewy, the Chief Legal Officer of SAUDIA. When she did,
a certain Khalid of the SAUDIA office brought her to a Saudi
court where she was asked to sign a document written in
Arabic. They told her that this was necessary to close the case
against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27,
1993. Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff
to report to Jeddah once again and see Miniewy on June 27,
1993 for further investigation. Plaintiff did so after receiving
assurance from SAUDIAs Manila manager, Aslam Saleemi,
that the investigation was routinary and that it posed no danger
to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the
same Saudi court on June 27, 1993. Nothing happened then
but on June 28, 1993, a Saudi judge interrogated plaintiff
through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however,
just as her plane was about to take off, a SAUDIA officer told
her that the airline had forbidden her to take that flight. At the
Inflight Service Office where she was told to go, the secretary
of Mr. Yahya Saddick took away her passport and told her to
remain in Jeddah, at the crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted
plaintiff to the same court where the judge, to her
astonishment and shock, rendered a decision, translated to her
in English, sentencing her to five months imprisonment and to
286 lashes. Only then did she realize that the Saudi court had
tried her, together with Thamer and Allah, for what happened
in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
going to a disco, dancing, and listening to the music in
violation of Islamic laws; (3) socializing with the male crew,
in contravention of Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case,
plaintiff sought the help of the Philippine Embassy in
Jeddah. The latter helped her pursue an appeal from the
decision of the court. To pay for her upkeep, she worked on
the domestic flights of defendant SAUDIA while, ironically,
Thamer and Allah freely served the international flights.[39]
Where the factual antecedents satisfactorily establish the
existence of a foreign element, we agree with petitioner that
the problem herein could present a conflicts case.
A factual situation that cuts across territorial lines and is
affected by the diverse laws of two or more states is said to
contain a foreign element. The presence of a foreign element
is inevitable since social and economic affairs of individuals
and associations are rarely confined to the geographic limits of
their birth or conception.[40]
The forms in which this foreign element may appear are
many.[41] The foreign element may simply consist in the fact
that one of the parties to a contract is an alien or has a foreign
domicile, or that a contract between nationals of one State
involves properties situated in another State. In other cases,
the foreign element may assume a complex form.[42]
In the instant case, the foreign element consisted in the fact
that private respondent Morada is a resident Philippine
national, and that petitioner SAUDIA is a resident foreign
corporation. Also, by virtue of the employment of Morada
with the petitioner Saudia as a flight stewardess, events did
transpire during her many occasions of travel across national
borders, particularly from Manila, Philippines to Jeddah,
Saudi Arabia, and vice versa, that caused a conflicts situation
to arise.
We thus find private respondents assertion that the case is
purely domestic, imprecise. A conflicts problem presents itself
here, and the question of jurisdiction[43] confronts the court a
quo.
After a careful study of the private respondents Amended
Complaint,[44] and the Comment thereon, we note that she
aptly predicated her cause of action on Articles 19 and 21 of
the New Civil Code.
On one hand, Article 19 of the New Civil Code provides;
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice give everyone
his due and observe honesty and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of
Appeals,[45] this Court held that:
The aforecited provisions on human relations were intended to
expand the concept of torts in this jurisdiction by granting
adequate legal remedy for the untold number of moral wrongs
which is impossible for human foresight to specifically
provide in the statutes.
Although Article 19 merely declares a principle of law, Article
21 gives flesh to its provisions. Thus, we agree with private
respondents assertion that violations of Articles 19 and 21 are
actionable, with judicially enforceable remedies in the
municipal forum.
Based on the allegations[46] in the Amended Complaint, read
in the light of the Rules of Court on jurisdiction[47] we find
that the Regional Trial Court (RTC) of Quezon City possesses
jurisdiction over the subject matter of the suit.[48] Its
authority to try and hear the case is provided for under Section
1 of Republic Act No. 7691, to wit:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise
known as the Judiciary Reorganization Act of 1980, is hereby
amended to read as follows:
SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts
shall exercise exclusive jurisdiction:
xxxxxxxxx
(8) In all other cases in which demand, exclusive of interest,
damages of whatever kind, attorneys fees, litigation expenses,
and costs or the value of the property in controversy exceeds
One hundred thousand pesos (P100,000.00) or, in such other
cases in Metro Manila, where the demand, exclusive of the
above-mentioned items exceeds Two hundred Thousand pesos
(P200,000.00). (Emphasis ours)
xxxxxxxxx
And following Section 2 (b), Rule 4 of the Revised Rules of
Courtthe venue, Quezon City, is appropriate:
SEC. 2 Venue in Courts of First Instance. [Now Regional
Trial Court]
(a) x x x x x x x x x
(b) Personal actions. All other actions may be commenced and
tried where the defendant or any of the defendants resides or
may be found, or where the plaintiff or any of the plaintiff
resides, at the election of the plaintiff.
Pragmatic considerations, including the convenience of the
parties, also weigh heavily in favor of the RTC Quezon City
assuming jurisdiction. Paramount is the private interest of the
litigant. Enforceability of a judgment if one is obtained is quite
obvious. Relative advantages and obstacles to a fair trial are
equally important. Plaintiff may not, by choice of an
inconvenient forum, vex, harass, or oppress the defendant, e.g.
by inflicting upon him needless expense or disturbance. But
unless the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be disturbed.[49]
Weighing the relative claims of the parties, the court a
quo found it best to hear the case in the Philippines. Had it
refused to take cognizance of the case, it would be forcing
plaintiff (private respondent now) to seek remedial action
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no
longer maintains substantial connections. That would have
caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no
unnecessary difficulties and inconvenience have been shown
by either of the parties. The choice of forum of the plaintiff
(now private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the
persons of the parties herein. By filing her Complaint and
Amended Complaint with the trial court, private respondent
has voluntary submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several
motions[50] praying for the dismissal of Moradas Amended
Complaint. SAUDIA also filed an Answer In Ex Abundante
Cautelam dated February 20, 1995. What is very patent and
explicit from the motions filed, is that SAUDIA prayed for
other reliefs under the premises. Undeniably, petitioner
SAUDIA has effectively submitted to the trial courts
jurisdiction by praying for the dismissal of the Amended
Complaint on grounds other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company,
Ltd.:[51]
We observe that the motion to dismiss filed on April 14, 1962,
aside from disputing the lower courts jurisdiction over
defendants person, prayed for dismissal of the complaint on
the ground that plaintiffs cause of action has prescribed. By
interposing such second ground in its motion to dismiss, Ker
and Co., Ltd. availed of an affirmative defense on the basis of
which it prayed the court to resolve controversy in its
favor. For the court to validly decide the said plea of
defendant Ker & Co., Ltd., it necessarily had to acquire
jurisdiction upon the latters person, who, being the proponent
of the affirmative defense, should be deemed to have
abandoned its special appearance and voluntarily submitted
itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that:
When the appearance is by motion for the purpose of
objecting to the jurisdiction of the court over the person, it
must be for the sole and separate purpose of objecting to the
jurisdiction of the court. If his motion is for any other purpose
than to object to the jurisdiction of the court over his person,
he thereby submits himself to the jurisdiction of the court.A
special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will
be held to be a general appearance, if the party in said motion
should, for example, ask for a dismissal of the action upon the
further ground that the court had no jurisdiction over the
subject matter.[52]
Clearly, petitioner had submitted to the jurisdiction of the
Regional Trial Court of Quezon City. Thus, we find that the
trial court has jurisdiction over the case and that its exercise
thereof, justified.
As to the choice of applicable law, we note that choice-of-law
problems seek to answer two important questions: (1) What
legal system should control a given situation where some of
the significant facts occurred in two or more states; and (2) to
what extent should the chosen legal system regulate the
situation.[53]
Several theories have been propounded in order to identify the
legal system that should ultimately control. Although ideally,
all choice-of-law theories should intrinsically advance both
notions of justice and predictability, they do not always do
so. The forum is then faced with the problem of deciding
which of these two important values should be stressed.[54]
Before a choice can be made, it is necessary for us to
determine under what category a certain set of facts or rules
fall. This process is known as characterization, or the doctrine
of qualification. It is the process of deciding whether or not
the facts relate to the kind of question specified in a conflicts
rule.[55] The purpose of characterization is to enable the
forum to select the proper law.[56]
Our starting point of analysis here is not a legal relation, but a
factual situation, event, or operative fact.[57] An essential
element of conflict rules is the indication of a test or
connecting factor or point of contact. Choice-of-law rules
invariably consist of a factual relationship (such as property
right, contract claim) and a connecting factor or point of
contact, such as the situsof the res, the place of celebration, the
place of performance, or the place of wrongdoing.[58]
Note that one or more circumstances may be present to serve
as the possible test for the determination of the applicable
law.[59] These test factors or points of contact or connecting
factors could be any of the following:
(1) The nationality of a person, his domicile, his residence, his
place of sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a
corporation;
(3) the situs of a thing, that is, the place where a thing is, or is
deemed to be situated. In particular, the lex situs is decisive
when real rights are involved;
(4) the place where an act has been done, the locus actus, such
as the place where a contract has been made, a marriage
celebrated, a will signed or a tort committed.The lex loci
actus is particularly important in contracts and torts;
(5) the place where an act is intended to come into effect, e.g.,
the place of performance of contractual duties, or the place
where a power of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that
should govern their agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are
instituted or done. The lex forithe law of the forumis
particularly important because, as we have seen earlier,
matters of procedure not going to the substance of the claim
involved are governed by it; and because the lex fori applies
whenever the content of the otherwise applicable foreign law
is excluded from application in a given case for the reason that
it falls under one of the exceptions to the applications of
foreign law; and
(8) the flag of a ship, which in many cases is decisive of
practically all legal relationships of the ship and of its master
or owner as such. It also covers contractual relationships
particularly contracts of affreightment.[60] (Underscoring
ours.)
After a careful study of the pleadings on record, including
allegations in the Amended Complaint deemed submitted for
purposes of the motion to dismiss, we are convinced that there
is reasonable basis for private respondents assertion that
although she was already working in Manila, petitioner
brought her to Jeddah on the pretense that she would merely
testify in an investigation of the charges she made against the
two SAUDIA crew members for the attack on her person
while they were in Jakarta. As it turned out, she was the one
made to face trial for very serious charges, including adultery
and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the
handing over or turning over of the person of private
respondent to Jeddah officials, petitioner may have acted
beyond its duties as employer. Petitioners purported act
contributed to and amplified or even proximately caused
additional humiliation, misery and suffering of private
respondent. Petitioner thereby allegedly facilitated the arrest,
detention and prosecution of private respondent under the
guise of petitioners authority as employer, taking advantage of
the trust, confidence and faith she reposed upon it. As
purportedly found by the Prince of Makkah, the alleged
conviction and imprisonment of private respondent was
wrongful. But these capped the injury or harm allegedly
inflicted upon her person and reputation, for which petitioner
could be liable as claimed, to provide compensation or redress
for the wrongs done, once duly proven.
Considering that the complaint in the court a quo is one
involving torts, the connecting factor or point of contact could
be the place or places where the tortious conduct or lex loci
actus occurred. And applying the torts principle in a conflicts
case, we find that the Philippines could be said as a situs of the
tort (the place where the alleged tortious conduct took
place). This is because it is in the Philippines where petitioner
allegedly deceived private respondent, a Filipina residing and
working here. According to her, she had honestly believed that
petitioner would, in the exercise of its rights and in the
performance of its duties, act with justice, give her her due and
observe honesty and good faith. Instead, petitioner failed to
protect her, she claimed. That certain acts or parts of the injury
allegedly occurred in another country is of no moment. For in
our view what is important here is the place where the over-all
harm or the fatality of the alleged injury to the person,
reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the
Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule
of lex loci delicti commissi, modern theories and rules on tort
liability[61] have been advanced to offer fresh judicial
approaches to arrive at just results. In keeping abreast with
the modern theories on tort liability, we find here an occasion
to apply the State of the most significant relationship rule,
which in our view should be appropriate to apply now, given
the factual context of this case.
In applying said principle to determine the State which has the
most significant relationship, the following contacts are to be
taken into account and evaluated according to their relative
importance with respect to the particular issue: (a) the place
where the injury occurred; (b) the place where the conduct
causing the injury occurred; (c) the domicile, residence,
nationality, place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any,
between the parties is centered.[62]
As already discussed, there is basis for the claim that over-all
injury occurred and lodged in the Philippines. There is
likewise no question that private respondent is a resident
Filipina national, working with petitioner, a resident foreign
corporation engaged here in the business of international air
carriage. Thus, the relationship between the parties was
centered here, although it should be stressed that this suit is
not based on mere labor law violations. From the record, the
claim that the Philippines has the most significant contact with
the matter in this dispute,[63] raised by private respondent as
plaintiff below against defendant (herein petitioner), in our
view, has been properly established.
Prescinding from this premise that the Philippines is
the situs of the tort complaint of and the place having the most
interest in the problem, we find, by way of recapitulation, that
the Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues
arising out of this case. Further, we hold that the respondent
Regional Trial Court has jurisdiction over the parties and the
subject matter of the complaint; the appropriate venue is in
Quezon City, which could properly apply Philippine
law. Moreover, we find untenable petitioners insistence that
[s]ince private respondent instituted this suit, she has the
burden of pleading and proving the applicable Saudi law on
the matter.[64] As aptly said by private respondent, she has no
obligation to plead and prove the law of the Kingdom of Saudi
Arabia since her cause of action is based on Articles 19 and 21
of the Civil Code of the Philippines. In her Amended
Complaint and subsequent pleadings she never alleged that
Saudi law should govern this case.[65] And as correctly held
by the respondent appellate court, considering that it was the
petitioner who was invoking the applicability of the law of
Saudi Arabia, thus the burden was on it [petitioner] to plead
and to establish what the law of Saudi Arabia is.[66]
Lastly, no error could be imputed to the respondent appellate
court in upholding the trial courts denial of defendants (herein
petitioners) motion to dismiss the case. Not only was
jurisdiction in order and venue properly laid, but appeal after
trial was obviously available, and the expeditious trial itself
indicated by the nature of the case at hand. Indubitably, the
Philippines is the state intimately concerned with the ultimate
outcome of the case below not just for the benefit of all the
litigants, but also for the vindication of the countrys system of
law and justice in a transnational setting. With these
guidelines in mind, the trial court must proceed to try and
adjudge the case in the light of relevant Philippine law, with
due consideration of the foreign element or elements
involved. Nothing said herein, of course, should be construed
as prejudging the results of the case in any manner
whatsoever.
WHEREFORE, the instant petition for certiorari is hereby
DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P.
Morada vs. Saudi Arabia Airlines is hereby REMANDED to
Regional Trial Court of Quezon City, Branch 89 for further
proceedings.
SO ORDERED.
G.R. No. 104235 November 18, 1993
SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA
ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD
AIRLINES, INC., respondents.
Sycip, Salazar, Hernandez, Gatmaitan for petitioners.
Quisumbing, Torres & Evangelista for private-respondent.
NOCON, J.:
Disgruntled over TransWorld Airlines, Inc.'s refusal to
accommodate them in TWA Flight 007 departing from New
York to Los Angeles on June 6, 1984 despite possession of
confirmed tickets, petitioners filed an action for damages
before the Regional Trial Court of Makati, Metro Manila,
Branch 145. Advocating petitioner's position, the trial court
categorically ruled that respondent TransWorld Airlines
(TWA) breached its contract of carriage with petitioners and
that said breach was "characterized by bad faith." On appeal,
however, the appellate court found that while there was a
breach of contract on respondent TWA's part, there was
neither fraud nor bad faith because under the Code of Federal
Regulations by the Civil Aeronautics Board of the United
States of America it is allowed to overbook flights.
The factual backdrop of the case is as follows:
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea,
and their daughter, Liana Zalamea, purchased three (3) airline
tickets from the Manila agent of respondent TransWorld
Airlines, Inc. for a flight to New York to Los Angeles on June
6, 1984. The tickets of petitioners-spouses were purchased at a
discount of 75% while that of their daughter was a full fare
ticket. All three tickets represented confirmed reservations.
While in New York, on June 4, 1984, petitioners received
notice of the reconfirmation of their reservations for said
flight. On the appointed date, however, petitioners checked in
at 10:00 a.m., an hour earlier than the scheduled flight at 11:00
a.m. but were placed on the wait-list because the number of
passengers who had checked in before them had already taken
all the seats available on the flight. Liana Zalamea appeared as
the No. 13 on the wait-list while the two other Zalameas were
listed as "No. 34, showing a party of two." Out of the 42
names on the wait list, the first 22 names were eventually
allowed to board the flight to Los Angeles, including
petitioner Cesar Zalamea. The two others, on the other hand,
at No. 34, being ranked lower than 22, were not able to fly. As
it were, those holding full-fare tickets were given first priority
among the wait-listed passengers. Mr. Zalamea, who was
holding the full-fare ticket of his daughter, was allowed to
board the plane; while his wife and daughter, who presented
the discounted tickets were denied boarding. According to Mr.
Zalamea, it was only later when he discovered the he was
holding his daughter's full-fare ticket.
Even in the next TWA flight to Los Angeles Mrs. Zalamea
and her daughter, could not be accommodated because it was
also fully booked. Thus, they were constrained to book in
another flight and purchased two tickets from American
Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners filed an action
for damages based on breach of contract of air carriage before
the Regional Trial Court of Makati, Metro Manila, Branch
145. As aforesaid, the lower court ruled in favor of petitioners
in its decision 1 dated January 9, 1989 the dispositive portion
of which states as follows:
WHEREFORE, judgment is hereby rendered ordering the
defendant to pay plaintiffs the following amounts:
(1) US $918.00, or its peso equivalent at the time of payment
representing the price of the tickets bought by Suthira and
Liana Zalamea from American Airlines, to enable them to fly
to Los Angeles from New York City;
(2) US $159.49, or its peso equivalent at the time of payment,
representing the price of Suthira Zalamea's ticket for TWA
Flight 007;
(3) Eight Thousand Nine Hundred Thirty-Four Pesos and Fifty
Centavos (P8,934.50, Philippine Currency, representing the
price of Liana Zalamea's ticket for TWA Flight 007,
(4) Two Hundred Fifty Thousand Pesos (P250,000.00),
Philippine Currency, as moral damages for all the plaintiffs'
(5) One Hundred Thousand Pesos (P100,000.00), Philippine
Currency, as and for attorney's fees; and
(6) The costs of suit.
SO ORDERED. 2
On appeal, the respondent Court of Appeals held that moral
damages are recoverable in a damage suit predicated upon a
breach of contract of carriage only where there is fraud or bad
faith. Since it is a matter of record that overbooking of flights
is a common and accepted practice of airlines in the United
States and is specifically allowed under the Code of Federal
Regulations by the Civil Aeronautics Board, no fraud nor bad
faith could be imputed on respondent TransWorld Airlines.
Moreover, while respondent TWA was remiss in not
informing petitioners that the flight was overbooked and that
even a person with a confirmed reservation may be denied
accommodation on an overbooked flight, nevertheless it ruled
that such omission or negligence cannot under the
circumstances be considered to be so gross as to amount to
bad faith.
Finally, it also held that there was no bad faith in placing
petitioners in the wait-list along with forty-eight (48) other
passengers where full-fare first class tickets were given
priority over discounted tickets.
The dispositive portion of the decision of respondent Court of
Appeals3 dated October 25, 1991 states as follows:
WHEREFORE, in view of all the foregoing, the decision
under review is hereby MODIFIED in that the award of moral
and exemplary damages to the plaintiffs is eliminated, and the
defendant-appellant is hereby ordered to pay the plaintiff the
following amounts:
(1) US$159.49, or its peso equivalent at the time of the
payment, representing the price of Suthira Zalamea's ticket for
TWA Flight 007;
(2) US$159.49, or its peso equivalent at the time of the
payment, representing the price of Cesar Zalamea's ticket for
TWA Flight 007;
(3) P50,000.00 as and for attorney's fees.
(4) The costs of suit.
SO ORDERED.4
Not satisfied with the decision, petitioners raised the case on
petition for review on certiorari and alleged the following
errors committed by the respondent Court of Appeals, to wit:
I.
. . . IN HOLDING THAT THERE WAS NO FRAUD OR
BAD FAITH ON THE PART OF RESPONDENT TWA
BECAUSE IT HAS A RIGHT TO OVERBOOK FLIGHTS.
II.
. . . IN ELIMINATING THE AWARD OF EXEMPLARY
DAMAGES.
III.
. . . IN NOT ORDERING THE REFUND OF LIANA
ZALAMEA'S TWA TICKET AND PAYMENT FOR THE
AMERICAN AIRLINES
TICKETS.5
That there was fraud or bad faith on the part of respondent
airline when it did not allow petitioners to board their flight
for Los Angeles in spite of confirmed tickets cannot be
disputed. The U.S. law or regulation allegedly authorizing
overbooking has never been proved. Foreign laws do not
prove themselves nor can the courts take judicial notice of
them. Like any other fact, they must be alleged and
proved.6 Written law may be evidenced by an official
publication thereof or by a copy attested by the officer having
the legal custody of the record, or by his deputy, and
accompanied with a certificate that such officer has custody.
The certificate may be made by a secretary of an embassy or
legation, consul general, consul, vice-consul, or consular agent
or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept,
and authenticated by the seal of his office.7
Respondent TWA relied solely on the statement of Ms.
Gwendolyn Lather, its customer service agent, in her
deposition dated January 27, 1986 that the Code of Federal
Regulations of the Civil Aeronautics Board allows
overbooking. Aside from said statement, no official
publication of said code was presented as evidence. Thus,
respondent court's finding that overbooking is specifically
allowed by the US Code of Federal Regulations has no basis
in fact.
Even if the claimed U.S. Code of Federal Regulations does
exist, the same is not applicable to the case at bar in
accordance with the principle of lex loci contractus which
require that the law of the place where the airline ticket was
issued should be applied by the court where the passengers are
residents and nationals of the forum and the ticket is issued in
such State by the defendant airline.8 Since the tickets were
sold and issued in the Philippines, the applicable law in this
case would be Philippine law.
Existing jurisprudence explicitly states that overbooking
amounts to bad faith, entitling the passengers concerned to an
award of moral damages. In Alitalia Airways v. Court of
Appeals,9 where passengers with confirmed bookings were
refused carriage on the last minute, this Court held that when
an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises,
and the passenger has every right to expect that he would fly
on that flight and on that date. If he does not, then the carrier
opens itself to a suit for breach of contract of carriage. Where
an airline had deliberately overbooked, it took the risk of
having to deprive some passengers of their seats in case all of
them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last
minute, said passenger is entitled to an award of moral
damages.
Similarly, in Korean Airlines Co., Ltd. v. Court of
Appeals, 10 where private respondent was not allowed to
board the plane because her seat had already been given to
another passenger even before the allowable period for
passengers to check in had lapsed despite the fact that she had
a confirmed ticket and she had arrived on time, this Court held
that petitioner airline acted in bad faith in violating private
respondent's rights under their contract of carriage and is
therefore liable for the injuries she has sustained as a result.
In fact, existing jurisprudence abounds with rulings where the
breach of contract of carriage amounts to bad faith. In Pan
American World Airways, Inc. v. Intermediate Appellate
Court, 11 where a would-be passenger had the necessary
ticket, baggage claim and clearance from immigration all
clearly and unmistakably showing that she was, in fact,
included in the passenger manifest of said flight, and yet was
denied accommodation in said flight, this Court did not
hesitate to affirm the lower court's finding awarding her
damages.
A contract to transport passengers is quite different in kind
and degree from any other contractual relation. So ruled this
Court in Zulueta v. Pan American World Airways,
Inc. 12 This is so, for a contract of carriage generates a
relation attended with public duty — a duty to provide public
service and convenience to its passengers which must be
paramount to self-interest or enrichment. Thus, it was also
held that the switch of planes from Lockheed 1011 to a
smaller Boeing 707 because there were only 138 confirmed
economy class passengers who could very well be
accommodated in the smaller planes, thereby sacrificing the
comfort of its first class passengers for the sake of economy,
amounts to bad faith. Such inattention and lack of care for the
interest of its passengers who are entitled to its utmost
consideration entitles the passenger to an award of moral
damages. 13
Even on the assumption that overbooking is allowed,
respondent TWA is still guilty of bad faith in not informing its
passengers beforehand that it could breach the contract of
carriage even if they have confirmed tickets if there was
overbooking. Respondent TWA should have incorporated
stipulations on overbooking on the tickets issued or to
properly inform its passengers about these policies so that the
latter would be prepared for such eventuality or would have
the choice to ride with another airline.
Respondent TWA contends that Exhibit I, the detached flight
coupon upon which were written the name of the passenger
and the points of origin and destination, contained such a
notice. An examination of Exhibit I does not bear this out. At
any rate, said exhibit was not offered for the purpose of
showing the existence of a notice of overbooking but to show
that Exhibit I was used for flight 007 in first class of June 11,
1984 from New York to Los Angeles.
Moreover, respondent TWA was also guilty of not informing
its passengers of its alleged policy of giving less priority to
discounted tickets. While the petitioners had checked in at the
same time, and held confirmed tickets, yet, only one of them
was allowed to board the plane ten minutes before departure
time because the full-fare ticket he was holding was given
priority over discounted tickets. The other two petitioners
were left behind.
It is respondent TWA's position that the practice of
overbooking and the airline system of boarding priorities are
reasonable policies, which when implemented do not amount
to bad faith. But the issue raised in this case is not the
reasonableness of said policies but whether or not said policies
were incorporated or deemed written on petitioners' contracts
of carriage. Respondent TWA failed to show that there are
provisions to that effect. Neither did it present any argument
of substance to show that petitioners were duly apprised of the
overbooked condition of the flight or that there is a hierarchy
of boarding priorities in booking passengers. It is evident that
petitioners had the right to rely upon the assurance of
respondent TWA, thru its agent in Manila, then in New York,
that their tickets represented confirmed seats without any
qualification. The failure of respondent TWA to so inform
them when it could easily have done so thereby enabling
respondent to hold on to them as passengers up to the last
minute amounts to bad faith. Evidently, respondent TWA
placed its self-interest over the rights of petitioners under their
contracts of carriage. Such conscious disregard of petitioners'
rights makes respondent TWA liable for moral damages. To
deter breach of contracts by respondent TWA in similar
fashion in the future, we adjudge respondent TWA liable for
exemplary damages, as well.
Petitioners also assail the respondent court's decision not to
require the refund of Liana Zalamea's ticket because the ticket
was used by her father. On this score, we uphold the
respondent court. Petitioners had not shown with certainty that
the act of respondent TWA in allowing Mr. Zalamea to use the
ticket of her daughter was due to inadvertence or deliberate
act. Petitioners had also failed to establish that they did not
accede to said agreement. The logical conclusion, therefore, is
that both petitioners and respondent TWA agreed, albeit
impliedly, to the course of action taken.
The respondent court erred, however, in not ordering the
refund of the American Airlines tickets purchased and used by
petitioners Suthira and Liana. The evidence shows that
petitioners Suthira and Liana were constrained to take the
American Airlines flight to Los Angeles not because they
"opted not to use their TWA tickets on another TWA flight"
but because respondent TWA could not accommodate them
either on the next TWA flight which was also fully
booked. 14 The purchase of the American Airlines tickets by
petitioners Suthira and Liana was the consequence of
respondent TWA's unjustifiable breach of its contracts of
carriage with petitioners. In accordance with Article 2201,
New Civil Code, respondent TWA should, therefore, be
responsible for all damages which may be reasonably
attributed to the non-performance of its obligation. In the
previously cited case of Alitalia Airways v. Court of
Appeals, 15 this Court explicitly held that a passenger is
entitled to be reimbursed for the cost of the tickets he had to
buy for a flight to another airline. Thus, instead of simply
being refunded for the cost of the unused TWA tickets,
petitioners should be awarded the actual cost of their flight
from New York to Los Angeles. On this score, we differ from
the trial court's ruling which ordered not only the
reimbursement of the American Airlines tickets but also the
refund of the unused TWA tickets. To require both prestations
would have enabled petitioners to fly from New York to Los
Angeles without any fare being paid.

The award to petitioners of attorney's fees is also justified

under Article 2208(2) of the Civil Code which allows recovery
when the defendant's act or omission has compelled plaintiff
to litigate or to incur expenses to protect his interest. However,
the award for moral damages and exemplary damages by the
trial court is excessive in the light of the fact that only Suthira
and Liana Zalamea were actually "bumped off." An award of
P50,000.00 moral damages and another P50,000.00 exemplary
damages would suffice under the circumstances obtaining in
the instant case.

WHEREFORE, the petition is hereby GRANTED and the

decision of the respondent Court of Appeals is hereby
MODIFIED to the extent of adjudging respondent TransWorld
Airlines to pay damages to petitioners in the following
amounts, to wit:

(1) US$918.00 or its peso equivalent at the time of payment

representing the price of the tickets bought by Suthira and
Liana Zalamea from American Airlines, to enable them to fly
to Los Angeles from New York City;

(2) P50,000.00 as moral damages;

(3) P50,000.00 as exemplary damages;

(4) P50,000.00 as attorney's fees; and

(5) Costs of suit.

SO ORDERED.
[G.R. No. 110263. July 20, 2001]
ASIAVEST MERCHANT BANKERS (M)
BERHAD, petitioner, vs. COURT OF APPEALS and
PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION, respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the
Decision[1] of the Court of Appeals dated May 19, 1993 in
CA-G.R. CV No. 35871 affirming the Decision[2] dated
October 14, 1991 of the Regional Trial Court of Pasig, Metro
Manila, Branch 168 in Civil Case No. 56368 which dismissed
the complaint of petitioner Asiavest Merchant Bankers (M)
Berhad for the enforcement of the money judgment of the
High Court of Malaya in Kuala Lumpur against private
respondent Philippine National Construction Corporation.
The petitioner Asiavest Merchant Bankers (M) Berhad is a
corporation organized under the laws of Malaysia while
private respondent Philippine National Construction
Corporation is a corporation duly incorporated and existing
under Philippine laws.
It appears that sometime in 1983, petitioner initiated a suit for
collection against private respondent, then known as
Construction and Development Corporation of the Philippines,
before the High Court of Malaya in Kuala Lumpur entitled
Asiavest Merchant Bankers (M) Berhad v. Asiavest CDCP
Sdn. Bhd. and Construction and Development Corporation of
the Philippines.[3]
Petitioner sought to recover the indemnity of the performance
bond it had put up in favor of private respondent to guarantee
the completion of the Felda Project and the non-payment of
the loan it extended to Asiavest-CDCP Sdn. Bhd. for the
completion of Paloh Hanai and Kuantan By-Pass Project.
On September 13, 1985, the High Court of Malaya
(Commercial Division) rendered judgment in favor of the
petitioner and against the private respondent which is also
designated therein as the 2ndDefendant. The judgment reads
in full:
SUIT NO. C638 of 1983
Between
Asiavest Merchant Bankers (M) Berhad Plaintiffs
And
1. Asiavest-CDCP Sdn. Bhd.
2. Construction & Development
Corporation of the Philippines Defendant
JUDGMENT
The 2nd Defendant having entered appearance herein and the
Court having under Order 14, rule 3 ordered that judgment as
hereinafter provided be entered for the Plaintiffs against the
2nd Defendant.
IT IS THIS DAY ADJUDGED that the 2nd defendant do pay
the Plaintiffs the sum of $5,108,290.23 (Ringgit Five million
one hundred and eight thousand two hundred and ninety and
Sen twenty-three) together with interest at the rate of 12% per
annum on: -
(i) the sum of $2,586,866.91 from the 2nd day of March 1983
to the date of payment; and
(ii) the sum of $2,521,423.32 from the 11th day of March
1983 to the date of payment; and $350.00 (Ringgit Three
Hundred and Fifty) costs.
Dated the 13th day of September, 1985.
Senior Assistant Registrar,
High Court, Kuala Lumpur
This Judgment is filed by Messrs. Skrine & Co., 3rd Floor,
Straits Trading Building, No. 4, Leboh Pasar, Besar, Kuala
Lumpur, Solicitors for the Plaintiffs abovenamed.
(VP/Ong/81194.7/83)[4]
On the same day, September 13, 1985, the High Court of
Malaya issued an Order directing the private respondent (also
designated therein as the 2nd Defendant) to pay petitioner
interest on the sums covered by the said Judgment, thus:
SUIT NO. C638 OF 1983
Between
Asiavest Merchant Bankers (M) Berhad Plaintiffs
And
1. Asiavest-CDCP Sdn. Bhd.
2. Construction & Development
Corporation of the Philippines Defendants
BEFORE THE SENIOR ASSISTANT REGISTRAR
CIK SUSILA S. PARAM
THIS 13th DAY OF SEPTEMBER, 1985 IN CHAMBERS
ORDER
Upon the application of Asiavest Merchant Bankers (M)
Berhad, the Plaintiffs in this action AND UPON READING
the Summons in Chambers dated the 16th day of August, 1984
and the Affidavit of Lee Foong Mee affirmed on the 14th day
of August 1984 both filed herein AND UPON HEARING Mr.
T. Thomas of Counsel for the Plaintiffs and Mr. Khaw Chay
Tee of Counsel for the 2nd Defendant abovenamed on the
26th day of December 1984 IT WAS ORDERED that the
Plaintiffs be at liberty to sign final judgment against the 2nd
Defendant for the sum of $5,108.290.23 AND IT WAS
ORDEREDthat the 2nd Defendant do pay the Plaintiffs the
costs of suit at $350.00 AND IT WAS FURTHER
ORDERED that the plaintiffs be at liberty to apply for
payment of interest AND upon the application of the Plaintiffs
for payment of interest coming on for hearing on the 1st day
of August in the presence of Mr. Palpanaban Devarajoo of
Counsel for the Plaintiffs and Mr. Khaw Chay Tee of Counsel
for the 2ndDefendant above-named AND UPON HEARING
Counsel as aforesaid BY CONSENT IT WAS ORDERED that
the 2nd Defendant do pay the Plaintiffs interest at a rate to be
assessed AND the same coming on for assessment this day in
the presence of Mr. Palpanaban Devarajoo of Counsel for the
Plaintiffs and Mr. Khaw Chay Tee of Counsel for the
2nd Defendant AND UPON HEARING Counsel as
aforesaid BY CONSENT IT IS ORDERED that the
2nd Defendant do pay the Plaintiffs interest at the rate of 12%
per annum on:
(i) the sum of $2,586,866.91 from the 2nd day of March 1983
to the date of payment; and
(ii) the sum of $2,521,423.32 from the 11th day of March
1983 to the date of Payment.
Dated the 13th day of September, 1985.
Senior Assistant Registrar,
High Court, Kuala Lumpur.[5]
Following unsuccessful attempts[6] to secure payment from
private respondent under the judgment, petitioner initiated on
September 5, 1988 the complaint before Regional Trial Court
of Pasig, Metro Manila, to enforce the judgment of the High
Court of Malaya.[7]
Private respondent sought the dismissal of the case via a
Motion to Dismiss filed on October 5, 1988, contending that
the alleged judgment of the High Court of Malaya should be
denied recognition or enforcement since on its face, it is
tainted with want of jurisdiction, want of notice to private
respondent, collusion and/or fraud, and there is a clear mistake
of law or fact.[8] Dismissal was, however, denied by the trial
court considering that the grounds relied upon are not the
proper grounds in a motion to dismiss under Rule 16 of the
Revised Rules of Court.[9]
On May 22, 1989, private respondent filed its Answer with
Compulsory Counterclaim[10] and therein raised the grounds
it brought up in its motion to dismiss. In its Reply[11] filed on
June 8, 1989, the petitioner contended that the High Court of
Malaya acquired jurisdiction over the person of private
respondent by its voluntary submission to the courts
jurisdiction through its appointed counsel, Mr. Khay Chay
Tee. Furthermore, private respondents counsel waived any and
all objections to the High Courts jurisdiction in a pleading
filed before the court.
In due time, the trial court rendered its Decision dated October
14, 1991 dismissing petitioners complaint. Petitioner
interposed an appeal with the Court of Appeals, but the
appellate court dismissed the same and affirmed the decision
of the trial court in a Decision dated May 19, 1993.
Hence, the instant petition which is anchored on two (2)
assigned errors,[12] to wit:
I
THE COURT OF APPEALS ERRED IN HOLDING THAT
THE MALAYSIAN COURT DID NOT ACQUIRE
PERSONAL JURISDICTION OVER PNCC,
NOTWITHSTANDING THAT (a) THE FOREIGN COURT
HAD SERVED SUMMONS ON PNCC AT ITS MALAYSIA
OFFICE, AND (b) PNCC ITSELF APPEARED BY
COUNSEL IN THE CASE BEFORE THAT COURT.
II
THE COURT OF APPEALS ERRED IN DENYING
RECOGNITION AND ENFORCEMENT TO (SIC) THE
MALAYSIAN COURT JUDGMENT.
Generally, in the absence of a special compact, no sovereign is
bound to give effect within its dominion to a judgment
rendered by a tribunal of another country;[13] however, the
rules of comity, utility and convenience of nations have
established a usage among civilized states by which final
judgments of foreign courts of competent jurisdiction are
reciprocally respected and rendered efficacious under certain
conditions that may vary in different countries.[14]
In this jurisdiction, a valid judgment rendered by a foreign
tribunal may be recognized insofar as the immediate parties
and the underlying cause of action are concerned so long as it
is convincingly shown that there has been an opportunity for a
full and fair hearing before a court of competent jurisdiction;
that the trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the
defendant and under a system of jurisprudence likely to secure
an impartial administration of justice; and that there is nothing
to indicate either a prejudice in court and in the system of laws
under which it is sitting or fraud in procuring the
judgment.[15]
A foreign judgment is presumed to be valid and binding in the
country from which it comes, until a contrary showing, on the
basis of a presumption of regularity of proceedings and the
giving of due notice in the foreign forum. Under Section
50(b),[16] Rule 39 of the Revised Rules of Court, which was
the governing law at the time the instant case was decided by
the trial court and respondent appellate court, a judgment,
against a person, of a tribunal of a foreign country having
jurisdiction to pronounce the same is presumptive evidence of
a right as between the parties and their successors in interest
by a subsequent title. The judgment may, however, be assailed
by evidence of want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact. In
addition, under Section 3(n), Rule 131 of the Revised Rules of
Court, a court, whether in the Philippines or elsewhere, enjoys
the presumption that it was acting in the lawful exercise of its
jurisdiction. Hence, once the authenticity of the foreign
judgment is proved, the party attacking a foreign judgment, is
tasked with the burden of overcoming its presumptive validity.
In the instant case, petitioner sufficiently established the
existence of the money judgment of the High Court of Malaya
by the evidence it offered. Vinayak Prabhakar Pradhan,
presented as petitioners sole witness, testified to the effect that
he is in active practice of the law profession in
Malaysia;[17] that he was connected with Skrine and
Company as Legal Assistant up to 1981;[18] that private
respondent, then known as Construction and Development
Corporation of the Philippines, was sued by his client,
Asiavest Merchant Bankers (M) Berhad, in Kuala
Lumpur;[19] that the writ of summons were served on March
17, 1983 at the registered office of private respondent and on
March 21, 1983 on Cora S. Deala, a financial planning officer
of private respondent for Southeast Asia operations;[20] that
upon the filing of the case, Messrs. Allen and Gledhill,
Advocates and Solicitors, with address at 24th Floor, UMBC
Building, Jalan Sulaiman, Kuala Lumpur, entered their
conditional appearance for private respondent questioning the
regularity of the service of the writ of summons but
subsequently withdrew the same when it realized that the writ
was properly served;[21] that because private respondent
failed to file a statement of defense within two (2) weeks,
petitioner filed an application for summary judgment and
submitted affidavits and documentary evidence in support of
its claim;[22] that the matter was then heard before the High
Court of Kuala Lumpur in a series of dates where private
respondent was represented by counsel;[23] and that the end
result of all these proceedings is the judgment sought to be
enforced.
In addition to the said testimonial evidence, petitioner offered
the following documentary evidence:
(a) A certified and authenticated copy of the Judgment
promulgated by the Malaysian High Court dated September
13, 1985 directing private respondent to pay petitioner the sum
of $5,108,290.23 Malaysian Ringgit plus interests from March
1983 until fully paid;[24]
(b) A certified and authenticated copy of the Order dated
September 13, 1985 issued by the Malaysian High Court in
Civil Suit No. C638 of 1983;[25]
(c) Computation of principal and interest due as of January 31,
1990 on the amount adjudged payable to petitioner by private
respondent;[26]
(d) Letter and Statement of Account of petitioners counsel in
Malaysia indicating the costs for prosecuting and
implementing the Malaysian High Courts Judgment;[27]
(e) Letters between petitioners Malaysian counsel, Skrine and
Co., and its local counsel, Sycip Salazar Law Offices, relative
to institution of the action in the Philippines;[28]
(f) Billing Memorandum of Sycip Salazar Law Offices dated
January 2, 1990 showing attorneys fees paid by and due from
petitioner;[29]
(g) Statement of Claim, Writ of Summons and Affidavit of
Service of such writ in petitioners suit against private
respondent before the Malaysian High Court;[30]
(h) Memorandum of Conditional Appearance dated March 28,
1983 filed by counsel for private respondent with the
Malaysian High Court;[31]
(i) Summons in Chambers and Affidavit of Khaw Chay Tee,
counsel for private respondent, submitted during the
proceedings before the Malaysian High Court;[32]
(j) Record of the Courts Proceedings in Civil Case No. C638
of 1983;[33]
(k) Petitioners verified Application for Summary Judgment
dated August 14, 1984;[34] and
(l) Letter dated November 6, 1985 from petitioners Malaysian
counsel to private respondents counsel in Malaysia.[35]
Having thus proven, through the foregoing evidence, the
existence and authenticity of the foreign judgment, said
foreign judgment enjoys presumptive validity and the burden
then fell upon the party who disputes its validity, herein
private respondent, to prove otherwise.
Private respondent failed to sufficiently discharge the burden
that fell upon it to prove by clear and convincing evidence the
grounds which it relied upon to prevent enforcement of the
Malaysian High Court judgment, namely, (a) that jurisdiction
was not acquired by the Malaysian Court over the person of
private respondent due to alleged improper service of
summons upon private respondent and the alleged lack of
authority of its counsel to appear and represent private
respondent in the suit; (b) the foreign judgment is allegedly
tainted by evident collusion, fraud and clear mistake of fact or
law; and (c) not only were the requisites for enforcement or
recognition allegedly not complied with but also that the
Malaysian judgment is allegedly contrary to the Constitutional
prescription that the every decision must state the facts and
law on which it is based.[36]
Private respondent relied solely on the testimony of its two (2)
witnesses, namely, Mr. Alfredo N. Calupitan, an accountant of
private respondent, and Virginia Abelardo, Executive
Secretary and a member of the staff of the Corporate
Secretariat Section of the Corporate Legal Division, of private
respondent, both of whom failed to shed light and amplify its
defense or claim for non-enforcement of the foreign judgment
against it.
Mr. Calupitans testimony centered on the following: that from
January to December 1982 he was assigned in Malaysia as
Project Comptroller of the Pahang Project Package A and B
for road construction under the joint venture of private
respondent and Asiavest Holdings;[37] that under the joint
venture, Asiavest Holdings would handle the financial aspect
of the project, which is fifty-one percent (51%) while private
respondent would handle the technical aspect of the project, or
forty-nine percent (49%);[38] and, that Cora Deala was not
authorized to receive summons for and in behalf of the private
respondent.[39]Ms. Abelardos testimony, on the other hand,
focused on the following: that there was no board resolution
authorizing Allen and Gledhill to admit all the claims of
petitioner in the suit brought before the High Court of
Malaya,[40] though on cross-examination she admitted that
Allen and Gledhill were the retained lawyers of private
respondent in Malaysia.[41]
The foregoing reasons or grounds relied upon by private
respondent in preventing enforcement and recognition of the
Malaysian judgment primarily refer to matters of remedy and
procedure taken by the Malaysian High Court relative to the
suit for collection initiated by petitioner. Needless to stress,
the recognition to be accorded a foreign judgment is not
necessarily affected by the fact that the procedure in the courts
of the country in which such judgment was rendered differs
from that of the courts of the country in which the judgment is
relied on.[42] Ultimately, matters of remedy and procedure
such as those relating to the service of summons or court
process upon the defendant, the authority of counsel to appear
and represent a defendant and the formal requirements in a
decision are governed by the lex fori or the internal law of the
forum,[43] i.e., the law of Malaysia in this case.
In this case, it is the procedural law of Malaysia where the
judgment was rendered that determines the validity of the
service of court process on private respondent as well as other
matters raised by it. As to what the Malaysian procedural law
is, remains a question of fact, not of law. It may not be taken
judicial notice of and must be pleaded and proved like any
other fact. Sections 24 and 25 of Rule 132 of the Revised
Rules of Court provide that it may be evidenced by an official
publication or by a duly attested or authenticated copy
thereof. It was then incumbent upon private respondent to
present evidence as to what that Malaysian procedural law is
and to show that under it, the assailed service of summons
upon a financial officer of a corporation, as alleged by it, is
invalid. It did not. Accordingly, the presumption of validity
and regularity of service of summons and the decision
thereafter rendered by the High Court of Malaya must
stand.[44]
On the matter of alleged lack of authority of the law firm of
Allen and Gledhill to represent private respondent, not only
did the private respondents witnesses admit that the said law
firm of Allen and Gledhill were its counsels in its transactions
in Malaysia,[45] but of greater significance is the fact that
petitioner offered in evidence relevant Malaysian
jurisprudence[46] to the effect that (a) it is not necessary under
Malaysian law for counsel appearing before the Malaysian
High Court to submit a special power of attorney authorizing
him to represent a client before said court, (b) that counsel
appearing before the Malaysian High Court has full authority
to compromise the suit, and (c) that counsel appearing before
the Malaysian High Court need not comply with certain pre-
requisites as required under Philippine law to appear and
compromise judgments on behalf of their clients before said
court.[47]
Furthermore, there is no basis for or truth to the appellate
courts conclusion that the conditional appearance of private
respondents counsel who was allegedly not authorized to
appear and represent, cannot be considered as voluntary
submission to the jurisdiction of the High Court of Malaya,
inasmuch as said conditional appearance was not premised on
the alleged lack of authority of said counsel but the
conditional appearance was entered to question the regularity
of the service of the writ of summons. Such conditional
appearance was in fact subsequently withdrawn when counsel
realized that the writ was properly served.[48]
On the ground that collusion, fraud and clear mistake of fact
and law tainted the judgment of the High Court of Malaya, no
clear evidence of the same was adduced or shown. The facts
which the trial court found intriguing amounted to mere
conjectures and specious observations. The trial courts finding Asiavest Merchant Bankers (M) Berhad the amounts adjudged
on the absence of judgment against Asiavest-CDCP Sdn. Bhd. in the said foreign Judgment, subject of the said case.
is contradicted by evidence on record that recovery was also
sought against Asiavest-CDCP Sdn. Bhd. but the same was Costs against the private respondent.
found insolvent.[49] Furthermore, even when the foreign
SO ORDERED.
judgment is based on the drafts prepared by counsel for the
successful party, such is not per se indicative of collusion or
fraud. Fraud to hinder the enforcement within the jurisdiction
of a foreign judgment must be extrinsic, i.e., fraud based on
facts not controverted or resolved in the case where judgment
is rendered,[50] or that which would go to the jurisdiction of
the court or would deprive the party against whom judgment is
rendered a chance to defend the action to which he has a
meritorious defense.[51] Intrinsic fraud is one which goes to
the very existence of the cause of action is deemed already
adjudged, and it, therefore, cannot militate against the
recognition or enforcement of the foreign
judgment.[52] Evidence is wanting on the alleged extrinsic
fraud. Hence, such unsubstantiated allegation cannot give rise
to liability therein.

Lastly, there is no merit to the argument that the foreign

judgment is not enforceable in view of the absence of any
statement of facts and law upon which the award in favor of
the petitioner was based. As aforestated, the lex fori or the
internal law of the forum governs matters of remedy and
procedure.[53] Considering that under the procedural rules of
the High Court of Malaya, a valid judgment may be rendered
even without stating in the judgment every fact and law upon
which the judgment is based, then the same must be accorded
respect and the courts in this jurisdiction cannot invalidate the
judgment of the foreign court simply because our rules
provide otherwise.

All in all, private respondent had the ultimate duty to

demonstrate the alleged invalidity of such foreign judgment,
being the party challenging the judgment rendered by the High
Court of Malaya. But instead of doing so, private respondent
merely argued, to which the trial court agreed, that the burden
lay upon petitioner to prove the validity of the money
judgment. Such is clearly erroneous and would render
meaningless the presumption of validity accorded a foreign
judgment were the party seeking to enforce it be required to
first establish its validity.[54]

WHEREFORE, the instant petition is GRANTED. The

Decision of the Court of Appeals dated May 19, 1993 in CA-
G.R. CV No. 35871 sustaining the Decision dated October 14,
1991 in Civil Case No. 56368 of the Regional Trial Court of
Pasig, Branch 168 denying the enforcement of the Judgment
dated September 13, 1985 of the High Court of Malaya in
Kuala Lumpur is REVERSED and SET ASIDE, and another
in its stead is hereby rendered ORDERING private respondent
Philippine National Construction Corporation to pay petitioner