Kemuel Louie Dumayas

JD-III

PHILSEC INVESTMENT et al vs.CA et al

G. R. No. 103493 June 19, 1997
Mendoza, J.:

FACTS:

Ducat, a private respondent, got two loans from the petitioners Ayala International
Finance Limited (AYALA) and Philsec Investment Corp (PHILSEC) with the use of stock
Ducat possessed. Private respondent 1488, Inc., via its president, private respondent
Daic, took on Ducat's duty under an Agreement in order to assist the repayment of
the loans. As a result, 1488, Inc. issued a Warranty Deed with Vendor's Lien through
which it conveyed to petitioner Athona Holdings, N.V. (ATHONA) purchased a piece
of property in Texas, United States of America, with a loan from PHILSEC and AYALA
serving as the down payment. The promissory note signed by ATHONA in favor of
1488, Inc. was to be used to pay the remaining debt. PHILSEC and AYALA then freed
Ducat from his obligation after receiving payment from 1488, Inc. They also gave all
of Ducat's stock that was in their control to that company.

As ATHONA failed to pay the interest on the balance, the entire amount covered by
the note became due and demandable. Accordingly, private respondent 1488, Inc.
sued petitioners PHILSEC, AYALA, and ATHONA in the United States for payment of
the balance and for damages for breach of contract and for fraud allegedly
perpetrated by petitioners in misrepresenting the marketability of the shares of
stock delivered to 1488, Inc. under the Agreement. Petitioners filed a "For Sum of
Money with Damages and Writ of Preliminary Attachment" complaint before the
RTC Makati against private defendants while the civil case was still proceeding in the
United States. In the complaint, the petitioners' assertion that the respondents
committed fraud by selling the property for 400% more than its actual worth was
repeated from their separate counterclaims in the civil action filed in the United
States District Court for the Southern District of Texas.

Ducat moved to dismiss the Civil Case in the RTC-Makati on the grounds of (1) litis
pendentia, vis-a-vis the Civil Action in the U.S., (2) forum non conveniens, and (3)
failure of petitioners PHILSEC and BPI-IFL to state a cause of action. The trial court
granted Ducat’s MTD, stating that “the evidentiary requirements of the controversy
may be more suitably tried before the forum of the litis pendentia in the U.S., under
the principle in private international law of forum non conveniens,” even as it noted
that Ducat was not a party in the U.S. case.

Petitioners appealed to the CA, arguing that the trial court erred in applying the
principle of litis pendentia and forum non conveniens. The CA affirmed the dismissal
of Civil Case against Ducat, 1488, Inc., and Daic on the ground of litis pendentia.
ISSUE:

Whether or not the Civil Case in the RTC-Makati barred by the judgment of the U.S.
court.

RULING:

No. While this Court has given the effect of res judicata to foreign judgments in
several cases, it was after the parties opposed to the judgment had been given
ample opportunity to repel them on grounds allowed under the law. This is because
in this jurisdiction, with respect to actions in personam, as distinguished from actions
in rem, a foreign judgment merely constitutes prima facie evidence of the justness of
the claim of a party and, as such, is subject to proof to the contrary.
 RAYTHEON INTERNATIONAL, INC v. STOCKTON W. ROUZIE, JR
G.R. No. 162894 February 26, 2008
TINGA, J.:

FACTS:

Brand Marine Services, Inc. (BMSI), a corporation duly organized & existing under
the laws of Connecticut, &Stockton Rouzie, Jr., an American citizen, entered into a
contract. BMSI hired Rouzie as its representative to negotiate the sale of services in
several government projects in the Philippines for an agreed remuneration of 10% of
the gross receipts. Rouzie secured a service contract w/ the Rep. of Phil. on behalf of
BMSI for the dredging of rivers affected by the Mt.Pinatubo eruption & mudflows.
Rouzie filed before the NLRC a suit against BMSI and Rust International (Rust) for
alleged nonpayment of commissions, illegal termination, & breach of employment
contract. The Labor Arbiter ordered BMSI & Rust to pay Rouzie’s money claims.
Upon appeal, the NLRC reversed & dismissed Rouzie’s complaint on the ground of
lack of jurisdiction.

Rouzie filed an action for damages before the RTC of La Union (where he was a
resident) against Raytheon International. He reiterated that he was not paid the
commissions due him from the Pinatubo dredging project w/c hesecured on behalf
of BMSI. The complaint also averred that BMSI, RUST and Raytheon had combined &
functioned as 1 company. RAYTHEON SOUGHT THE DISMISSAL OF THE COMPLAINT
ON THE GROUNDS OF FAILURE TO STATE ACAUSE OF ACTION & FORUM NON
CONVENIENS & PRAYED FOR DAMAGES BY WAY OF COMPULSORY COUNTERCLAIM.
THE RTC DENIED RAYTHEON’S MOTION. THE CA AFFIRMED.

Raytheon’s contention: The written contract between Rouzie & BMSI included a valid
choice of law clause, that is, that the contract shall be governed by the laws of the
State of Connecticut. It also mentions the presence of foreign elements in the
dispute, namely that the parties & witnesses involved are American corporations &
citizens & the evidence to be presented is located outside the Philippines, that
renders our local courts inconvenient forums. The foreign elements of the dispute
necessitate the immediate application of the doctrine of forum non conveniens.

ISSUES:

A. ) Whether or not the RTC had jurisdiction.

B. ) Whether or not the complaint should be dismissed on the ground of forum non
conveniens.

RULING:

A. ) Yes. On the matter of jurisdiction over a conflicts-of-laws problem where the

case is filed in a Philippine court and where the court has jurisdiction over the
subject matter, the parties and the res, it may or can proceed to try the case even if
the rules of conflict-of-laws or the convenience of the parties point to a foreign
forum. This is an exercise of sovereign prerogative of the country where the case is
filed.

B. ) NO. UNDER THE DOCTRINE OF FORUM NON CONVENIENS, A COURT, IN

CONFLICTS-OF-LAWS CASES, MAY REFUSE IMPOSITIONS ON ITS JURISDICTION
WHERE IT IS NOT THE MOST “CONVENIENT” OR AVAILABLE FORUM AND THE
PARTIES ARE NOT PRECLUDED FROM SEEKING REMEDIES ELSEWHERE. Raytheon’s
averments of the foreign elements are not sufficient to oust the RTC of its
jurisdiction over the case and the parties involved.
 THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD. v. NLRC
G.R. No. 12007 October 13, 2000
PARDO, J.:

FACTS:

Marcelo Santos was a overseas worker in Oman in May 1988. He was hired by Beijing,
China's Palace Hotel in June 1988. Santos accepted the job offer from the hotel
because of the greater income and perks, and he began working there in November
1988. The Philippine Overseas Employment Administration did not however become
involved in the employment agreement between him and Palace Hotel (POEA).
Santos was informed by Palace Hotel in August 1989 that he will be let off as a result
of a downturn in business. His employment was formally ended in September 1989.

In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was
impleaded but no summons were served upon it. MHC is a government owned and
controlled corporation. It owns 50% of MHIL, a foreign corporation (Hong Kong).
MHIL manages the affair of the Palace Hotel. The labor arbiter who handled the case
ruled in favor of Santos. The National Labor Relations Commission (NLRC) affirmed
the labor arbiter.

ISSUE:

Whether or not the NLRC has jurisdiction over the case.

RULING:

No. The NLRC is a very inconvenient forum for the following reasons:
1. The only link that the Philippines has in this case is the fact that Santos is a
Filipino;
2. However, the Palace Hotel and MHIL are foreign corporations – MHC cannot be
held liable because it merely owns 50% of MHIL, it has no direct business in the
affairs of the Palace Hotel. The veil of corporate fiction can’t be pierced because it
was not shown that MHC is directly managing the affairs of MHIL. Hence, they are
separate entities.
3. Santos’ contract with the Palace Hotel was not entered into in the Philippines;
4. Santos’ contract was entered into without the intervention of the POEA (had
POEA intervened, NLRC still does not have jurisdiction because it will be the POEA
which will hear the case);
5. MHIL and the Palace Hotel are not doing business in the Philippines; their
agents/officers are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts
pertaining to the case. It is not competent to determine the facts because the acts
complained of happened outside our jurisdiction. It cannot determine which law is
applicable. And in case a judgment is rendered, it cannot be enforced against the
Palace Hotel (in the first place, it was not served any summons).
The Supreme Court emphasized that under the rule of forum non conveniens, a
Philippine court or agency may assume jurisdiction over the case if it chooses to do
so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent decision as to the
law and the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.
None of the above conditions are apparent in the case at bar.
BANK OF AMERICA, NT and SA v. AMERICAN REALTY CORPORATION and COURT OF
APPEALS
G.R. No. 133876 December 29, 1999
BUENA, J.:

FACTS:

The Bank of America granted a loan to a corporation secured by a real estate

mortgage by the respondent. Upon the loan maturity, the corporation debtor failed
to pay and the petitioner bank filed 4 collection cases in the foreign courts (England
and Hong Kong) against the corporation debtors. At the same time it also filed an
extrajudicial foreclosure in the office of the Provincial Sheriff of Bulacan, Philippines
on the real estate mortgage and said was sold in a public auction. The respondent
files action for damages against petitioner due to the act of foreclosing the real
estate mortgage extrajudicially despite the pending civil suits before the foreign
courts to collect the principal loan. Petitioner contends that the respondent is not
made a party on the collection case before the foreign courts for being a third party
mortgagor and such actions were filed in foreign courts and thus decisions rendered
on such courts are not enforceable in the Philippines unless a separate action is filed
in the Phils to enforce such judgment and that under the English law which is the law
governing in the principal agreement, the mortgagee does not lose its security
interest by filing a civil action for sum of money. The court rendered judgment in
favor of defendants declaring that the filing of civil suit on collection of a sum of
money in foreign courts constitutes a waiver on the security of the mortgages.

ISSUE:

Whether or not the petitioner’s act of filing a collection suit against the principal
debtors before foreign courts constitutes a waiver of the remedy of foreclosure.

RULING:

The court held that Section 4 Rule 2 of the 1997 Rules on Civil Procedure provides
that “if two or more suits are instituted on the basis of the same cause of action, the
filing of one or a judgment upon the merits in any one is available as a ground for the
dismissal of the others.” A mortgagor creditor may pursue two remedies either to
institute against the mortgage debtor a personal action for collection of money or
foreclosure of a mortgage but cannot avail of both remedies. In Phil. jurisdiction
these remedies are alternative and not cumulative. Thus, choosing one remedy is a
bar to avail of the other remedy. Plaintiff cannot split up a single cause of action by
filing both remedies as expressly prohibited by the rules on civil procedure.

On the contention of the petitioner that the English law should apply to the principal
agreements that states that the mortgagee does not lose its security interest by
simply filing civil actions for sums of money, the court held that a foreign law must
be properly pleaded and proved as fact. If not pleaded, the court will presume that
the foreign law is the same as our local or domestic or internal law. This is the
DOCTRINE OF PROCESSUAL PRESUMPTION.

Granting however that the English law is applicable in the Phil. court, such law is
contrary to sound and established public policy of the forum which proscribes the
splitting of a single cause of action, thus still cannot be applied by the court in the
case.

It is proper that Philippine law should be upheld since it is the country upon which
the case is filed. Therefore the filing of a collection case by the petitioner in foreign
courts is a waiver for the remedy of foreclosure of real estate mortgage.
 Yao Kee vs. Sy Gonzales
G.R. No. L-55960 November 24, 1988
Cortes, J.:

FACTS:

Sy Kiat is a Chinese national who died on January 17, 1977 in Caloocan City where he
was then residing, leaving behind real and personal properties here in the Philippines
worth about P300,000. Aida Sy-Gonzales et al filed a petition for the grant of letters
of administration and alleged that (a) they are the children of the deceased with
Asuncion Gillego; (b) to their knowledge Sy Mat died intestate; (c) they do not
recognize Sy Kiat's marriage to Yao Kee nor the filiation of her children to him. The
petition was opposed by Yao Kee et al who alleged that she is the lawful wife of Sy
Kiat whom he married on January 19, 1931 in China and the other oppositors are the
legitimate children of the deceased with Yao Kee. Probate court ruled that Sy Kiat
was legally married to Yao Kee and the other oppositors were legitimate children of
Sy Mat. On appeal, CA simply modified probate court’s judgment and stated that
Aida Sy-Gonzales et al are natural children of Sy Mat. They filed a motion for
reconsideration but was denied.

ISSUE:

Whether or not Sy Kiat’s marriage to Yao Kee in accordance with Chinese Law and
Custom conclusive.

RULING:

The Supreme Court ruled that evidence may prove the fact if marriage between Sy
Kiat and Yao Kee is valid, but it is not sufficient to establish the validity of said
marriage in accordance with Chinese law and custom. A custom must be proved as a
fact according to the rules of evidence and that a local custom as a source of right
cannot be considered by a court of justice unless such custom is properly established
by competent evidence. In the case at bar, petitioners did not present any
competent evidence relative to the law of China on marriage. In the absence of
proof of the Chinese law on marriage, it should be presumed that it is the same as
that of the Philippines. The Supreme Court affirmed (all of them were acknowledged
as natural children, hence given equal rights) the decision of the Court of Appeals.
 Recto vs Harden
H. R. No. L-22174 July 21, 1967
Bengzon, J.P., J.:

Facts:

Recto was hired by American wife to represent her in RP case for protection of her
interest in the conjugal property, vs. American husband, in conjunction with the
divorce proceeding she's going to file in US. They won in TC, but on appeal, American
H & W agreed to settle. Recto now wants to collect fees for services, but as defense,
Harden spouses argues that the contract's object was unlawful (Divorce not allowed
in RP) so it is invalid, thus, Recto cannot enforce it against them. Court ruled for
Recto.

Issue:

Whether or not Recto could enforce the agreement?

Ruling/Held:

Yes, the contract has a lawful object: it is to protect the interests of Mrs. Harden in
the conjugal partnership during the pendency of a divorce suit and not to secure
divorce to facilitate or promote procurement of divorce Divorce can be granted to
the Sps Harden, they being nationals of country whose laws allow divorce (following
the nationality principle in determining the status and dissolution of the marriage)
 PIONEER CONCRETE PHILIPPINES, INC. ET.AL v. ANTONIO D. TODARO
G.R. No. 154830 June 8, 2007
AUSTRIA-MARTINEZ, J.:

FACTS:

Australian ready-mix concrete manufacturer Pioneer International Limited (PIL)

founded petitioner PCPI in this case to conduct business in the Philippines.
Respondent Todaro was approached by PIL if he was available to join them in their
aim to start factory operations in the nation, and he responded in the affirmative.
Following that, PIL and Todaro reached a deal in which the former agreed to hire the
latter as a consultant for two to three months, following which he would be hired as
the manager of concrete operations should PIL chose to make an investment in the
Philippines. PIL began operations but declined to honor its promise to retain Todaro
on a long-term basis. Respondent thus filed a complaint for sum of money and
damages against petitioner. Petitioner meanwhile contends that the case should fall
with the NLRC as the damages arose from an alleged breach of employment contract.
Both the trial court and CA ruled in favor of respondent.

ISSUE:

Whether or not there is employer-employee relationship between PIL and

respondent.

RULING:

No. In the present case, no employer-employee relationship exists between

petitioners and respondent. In fact, in his complaint, private respondent is not
seeking any relief under the Labor Code, but seeks payment of damages on account
of petitioners’ alleged breach of their obligation under their agreement to employ
him. It is settled that an action for breach of contractual obligation is intrinsically a
civil dispute. In the alternative, respondent seeks redress on the basis of the
provisions of Articles 19 and 21 of the Civil Code. Hence, it is clear that the present
action is within the realm of civil law, and jurisdiction over it belongs to the regular
courts.

This Court has consistently held that where no employer-employee relationship

exists between the parties and no issue is involved which may be resolved by
reference to the Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction.
 BERNABE L. NAVIDA, ET. AL. v. HON. TEODORO A. DIZON, JR.
G.R. No. 125078 May 30, 2011
LEONARDO-DE CASTRO, J.:

FACTS:

Before the Court are consolidated Petitions for Review on Certiorari under Rule 45 of
the Rules of Court, which arose out of two civil cases that were filed in different
courts but whose factual background and issues are closely intertwined.

The petitions in G.R. Nos. 125078[1] and 125598[2] both assail the Order[3] dated
May 20, 1996 of the Regional Trial Court (RTC) of General Santos City, Branch 37, in
Civil Case No. 5617. The... said Order decreed the dismissal of the case in view of the
perceived lack of jurisdiction of the RTC over the subject matter of the complaint.
The petition in G.R. No. 125598 also challenges the Orders dated June 4, 1996[4] and
July 9, 1996,[5] which held that the RTC of General Santos City no longer had
jurisdiction to proceed with Civil Case No. 5617.

On the other hand, the petitions in G.R. Nos. 126654,[6] 127856,[7] and 128398[8]
seek the reversal of the Order[9] dated October 1, 1996 of the RTC of Davao City,
Branch 16, in Civil Case No. 24,251-96, which also dismissed the case on the ground
of lack of jurisdiction.

ISSUE:

Whether or not THE TRIAL COURT HAS JURISDICTION OVER THE SUBJECT MATTER OF
THE CASE.

RULING:

Yes. SEC. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive
original jurisdiction:... x x x x

(8) In all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorney's 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)