Conflict of Laws Cases 3

7/24/2019 Conflict of Laws Cases 3

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1. Boudard vs. Tait

DIAZ,J p:

Plaintifs appeal rom a judgment o the Court o First Instance oManila dismissing the case instituted by them, thereby overruling theircomplaint, and sentencing them to pay the costs. hey no! contend intheir brie that:

"I. he lo!er court erred in not admitting #$hibits %, #, F

and & to M'( o plaintifs.

"II. he lo!er court erred in declaring that it !asindispensable or the deendant to be served !ith summons in&anoi.

"III. he lo!er court erred in declaring that service bypublication, !ith personal notice by the French Consul in Manila,!as not su)cient.

"I*. he lo!er court erred in declaring that the Court o&anoi had no jurisdiction over the person o the deendant.

"*. he lo!er court erred in dismissing this case, instead osentencing the deendant to pay to the plaintifs the amounts

claimed in the complaint as adjudged by the Court o &anoi+ and"*I. he lo!er court erred in denying the motion or ne!

trial on the ground that the decision is contrary to the la! and theevidence."

rie-y stated, the pertinent acts o the case, that !e glean rom(the records, are as ollo!s: he appellant #milie #lmira enee oudard, inher capacity as !ido! o Marie heodore /erome oudard and as guardiano her coappellants, her children born during her marriage !ith thedeceased, obtained a judgment in their avor rom the civil division o theCourt o First Instance o &anoi, French Indo'China, on /une 01, (234, orthe sum o 45,555piastras, e6uivalent, according to the rate o e$changeat the time o the rendition o the judgment, to P78,257.11, Philippinecurrency, plus interest the amount or rate o !hich is not given. hejudgment !as rendered against 9te!art #ddie ait !ho had been declaredin deault or his ailure to appear at the trial beore said court.

ppellants; action, by virtue o !hich they obtained the oregoingjudgment, !as based on the act that Marie heodore /erome oudard, !ho!as an employee o 9te!art #ddie ait, !as


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"he undamental rule is that jurisdiction in personamovernonresidents, so as to sustain a money judgment, must be basedupon personal service !ithin the state !hich renders the judgment.Pennoyer vs. >ef, 27 ?. 9., 1(4+ 04 Ha!. ed., 787+ !ining vs. >e!/ersey, 0(( ?. 9., 1D+ 02 9. Ct., (4+ 73 Ha!. ed., 21+ Continental>ational an< o oston vs. hurber, (43 >. ., 84D+ 31 >. #., D0D.E

"he process o a court o one state cannot run into anotherand summon a party there domiciled to respond to proceedingsagainst him. &ess vs. Pa!losotice sent outside the state to anonresident is unavailing to give jurisdiction in an action againsthim personally or money recovery. Pennoyer vs. >ef, 27 ?. 9.,1(4 J04 Ha!. ed., 787B.E here must be actual service !ithin the9tate o notice upon him or upon some one authori@ed to acceptservice or him. oldey vs. Morning >e!s, (78 ?. 9., 7(D J(7 9. Ct.,772+ 32 Ha!. ed., 7(1B.E personal judgment rendered against anonresident, !ho has neither been served !ith process norappeared in the suit, is !ithout validity. Mc%onald vs. Mabee, 043?. 9., 25 J31 9. Ct.. 343+ 8( Ha!. ed., 85D+ H. . . (2(1F, 47DB.E hemere transaction o business in a state by nonresident naturalpersons does not imply consent to be bound by the process o itscourts. Fle$ner vs. Farson, 0;(D ?. 9., 0D2 J32 9. Ct., 21+ 83 Ha!.ed., 075B .E" Cited in 9o. (25, as interpreted in the case oIngenohl vs. Kalter #. Alsen G Co. 41 Phil. , (D2E:

"he efect o a judgment o any other tribunal o a oreigncountry, having jurisdiction to pronounce the judgment, is asollo!s:

"(. In case o a judgment against a speci=c thing, thejudgment is conclusive upon the title to the thing+

"0. In case o a judgment against a person, the judgment ispresumptive evidence o a right as bet!een the parties and theirsuccessors in interest by a subse6uent title+ but the judgment maybe repelled by evidence o a !ant o jurisdiction, !ant o notice tothe party, collusion, raud, or clear mista


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person believed to be authori@ed to receive court processes !as in Manilaand !ould be bac< on pril 04, (2D5.

An pril 04, (2D5, bailif returned to the deendant;s o)ce to serve thesummons. %r. %ino@o reused to accept the same claiming that he !as nolonger an employee o the deendant.

ter the t!o attempts o service !ere unsuccessul, the judge o the o


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9uch an argument does not persuade.

It is general rule that processes o the court cannot la!ully be served outsidethe territorial limits o the jurisdiction o the court rom !hich it issues$arter vs. $arter, 4( 9.#. 0d 730, 05(E and this is reard!ess of t%e residenceor citi&ens%ip o the party thus served "o'a(Ra%r, (02 >K 424, (75 Io!a7((, 37 HC, >9 020, m. Case (2(0 %8D5E. here must be actual service!ithin the proper territorial limits on deendant or someone authori@ed toaccept service or him. hus, a deendant, !hether a resident or not in theorum !here the action is =led, must be served !ith summons !ithin thatorum. cdasia

ut even assuming a distinction bet!een a resident deendant and non'resident deendant !ere to be adopted, such distinction applies only tonatural persons and not to corporations. his =nds support in the conceptthat "a corporation has no home or residence in the sense in !hich thoseterms are applied to natural persons" $!aude Neon )i%ts vs. P%i!.Advertisin $orp., 71 Phil. 851E. hus, as cited by the deendant'appellee inits brie:

"esidence is said to be an attribute o a natural person, and can bepredicated on an arti=cial being only by more or less imperect analogy.9trictly spea


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I the oreign corporation has designated an agent to receive summons, thedesignation is e$clusive, and service o summons is !ithout orce and givesthe court no jurisdiction unless made upon him.((

Khere the corporation has no such agent, service shall be made on thegovernment o)cial designated by la!, to !it: aE the InsuranceCommissioner, in the case o a oreign insurance company+ bE the9uperintendent o an


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can be no jurisdiction in a court o a territory to render a personal judgmentagainst anyone upon service made outside its limits !as applicable alio. (472, and Mars%a!! We!!s $o. vs. %enr1W. E!ser- $o., 48 Phil. 15, 18+ 3u $on En vs. Trinidad, 41 Phil. 3D7, 4((E Kethin< it !ould be entirely out o line !ith this policy should !e ma


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being ound and operating as corporations, hence, residin, in thecountry. cdasia

he same principle is recogni@ed in merican la!: that the "residence o acorporation, i it can be said to have a residence, is necessarily !here ite$ercises corporate unctions . . .+" that it is considered as d!elling "in theplace !here its business is done . . ." as being "located !here its ranchisesare e$ercised . . .," and as being "present !here it is engaged in theprosecution o the corporate enterprise+" that a "oreign corporation licensedto do business in a state is a resident o any country !here it maintains ano)ce or agent or transaction o its usual and customary business or venue

purposes+" and that the "necessary element in its signi=cation islocality o e$istence." JKords and Phrases, Permanent #d., vol. 31, pp. 324,4(0, 453B.

Inasmuch as 9&P !as admittedly doing business in /apan through its ourduly registered branches at the time the collection suit against it !as =led,then in the light o the processual presumption, 9&P may be deemed aresident o /apan, and, as such, !as amenable to the jurisdiction o the courtstherein and may be deemed to have assented to the said courts; la!ulmethods o serving process. 01

ccordingly, the e$traterritorial service o summons on it by the/apanese Court !as valid not only under the processual presumption but alsobecause o the presumption o regularity o perormance o o)cial duty.

Ke =nd >A&K#9;s claim or attorney;s ees, litigation e$penses, ande$emplary damages to be !ithout merit. Ke =nd no evidence that !ouldjustiy an a!ard or attorney;s ees and litigation e$penses under rticle005D o the Civil Code o the Philippines. >or is an a!ard or e$emplarydamages !arranted. ?nder rticle 0034 o the Civil Code, beorethe court may consider the 6uestion o !hether or not e$emplary damagesshould be a!arded, the plaintif must sho! that he is entitled to moral,temperate, or compensatory damages. here being no such proo presentedby >A&K#9, no e$emplary damages may be adjudged in its avor. cdasia

K#FA#, the instant petition is partly >#%, and the challengeddecision is FFIM#% insoar as it denied >A&K#9;s claims or attorney;s

ees, litigation e$penses, and e$emplary damages but #*#9#% insoar as itsustained the trial court;s dismissal o >A&K#9;s complaint in Civil Case>o. D3'(1831 o ranch 74 o the egional rial Court o Manila, and anotherin its stead is hereby rendered A%#I> private respondent C.F. 9&P GCAMP>, I>C. to pay to >A&K#9 the amounts adjudged in the oreignjudgment subject o said case, !ith interest thereon at the legal rate rom the=ling o the complaint therein until the said oreign judgment is ully satis=ed.

Costs against the private respondent.

9A A%##%.

3. Nagarull vs. Binal!agan"Isa!ela

DIZON,J p:

ppeal ta *I#K AF HH FA#AI>, judgment is hereby rendered inavor o the plaintif, 9oorajmull >agarmull, ordering thedeendant, inalbagan'Isabela 9ugar Co., Inc. to pay said plaintif thesum o (D,780 rupees and D annas, !ith reservation or the plaintif

to prove its e6uivalent in Philippine pesos on the date o the =ling othe complaint, plus the costs o suit."

he parties submitted to the trial court the ollo!ing stipulation o acts:

"(. ?nder Contract N4315 dated May 8, (242, plaintif, a oreigncorporation !ith o)ces at >o. D %alhousie 96uare #astE Calcutta,India, agreed to sell to deendant, a domestic corporation !ith o)cesat the Chronicle uilding, duana 9treet, Manila, (,155,555 pieces o&essian bags at 08.05 per (55 bags, C.I.F. Iloilo. 9hipment o thesebags !as to be made in e6ual installments o 407,555 pcs. or 407bales (,555 pcs. to a baleE during each o the months o /uly, ugust,9eptember and Actober, (242. copy o this contract mar


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latter that under their agreement, any alteration in e$port duty !asto be or the buyer;s account. Copy o plaintif;s letter is attachedhereto as nne$ ;#;+

"1. An Actober 07, (242, deendant, in compliance !ith plaintif;sre6uest, increased the amount o its letter o credit by (5,2D8.07 tocover the increase in e$port duty on 407 bales scheduled under thecontract or the shipment in Actober, (242. copy o deendant;sletter marovember (1, (243, plaintif !rote deendant a letterreiterating its claim or 4,555.55 corresponding to the increasede$port ta$es on the (74 bales delivered to deendant rom thedeaulted shipments or the months o /uly, ugust and 9eptember,(242. copy o said letter is attached hereto as nne$ ;&;+

"(5. An February 8, (27(, deendant received noti=cation rom theengal Chamber o Commerce, ribunal o rbitration in Calcutta,India, advising it that on %ecember 0D, (275, plaintif applied to saidribunal or arbitration regarding their claim. he ribunal re6uestedthe deendant to send them its version o the case. his, deendantdid on March (, (27(, thru the then overnment Corporate Counsel,ormer /ustice Pompeyo %ia@. copy o the letter o authority isattached as nne$ ;I;+

"((. he case !as heard by the ribunal o rbitration on /uly 7, (27(.&aving previously re6uested the 9ecretary o Foreign fairs orssistance, deendant !as represented at the hearing by thePhilippine Consulate eneral in Calcutta, India, by Consul /oseMoreno. copy o the authority, consisting o the letter oovernment Corporate Counsel Pompeyo %ia@, dated March (, (27(,and (st Indorsement thereon, dated March 0, (27(, are attachedhereto as nne$es ;/; and ;/'(;+

"(0. s presented to the ribunal o rbitration, the !hole caserevolved on the 6uestion o !hether or not deendant is liable to theplaintif or the payment o increased e$port ta$es imposed by theIndian overnment on the shipments o jute sac;+

"(1. hereater, no communication !as received by deendant romplaintif or its la!yers regarding their claim until /une, (272, !hen thepresent complaint !as =led.

"FI>HH, parties thru their respective counsel, state that much asthey have endeavored to agree on all matters o act, they haveailed to do so on certain points. It is, thereore respectully prayed othis &onorable Court that parties be allo!ed to present evidence onthe disputed acts."

hereater the parties submitted additional evidence pursuant to thereservation they made in the above stipulation.

he appeal !as elevated to the Court o ppeals but the latter, by itsresolution o /anuary 01, (284, elevated it to this Court because theadditional documents and oral evidence presented by the parties did notraise any actual issue, and said court urther ound that "the three assignederrors 6uoted above all pose 6uestions o la!."

s may be gathered rom the pleadings and the acts stipulated, the actionbelo! !as or the enorcement o a oreign judgment: the decision renderedby the ribunal o rbitration o the engal Chamber o Commerce inCalcutta, India, as a)rmed by the &igh Court o /udicature o Calcutta. heappealed decision provides or its enorcement subject to the right reservedto appellee to present evidence on the e6uivalent in Philippine currency othe amount adjudged in Indian currency. he record does not disclose any

D


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evidence presented or that purpose subse6uent to the rendition ojudgment.

o secure a reversal o the appealed decision appellant claims that the lo!ercourt committed the ollo!ing errors:

"I

HAK# CA? ##% I> &AH%I> & PHI>IFF'PP#HH##, FA#I> CAPAIA> >A HIC#>9#% A >9C ?9I>#99 I>

P&IHIPPI>#9, &9 I& A 9?# I> P&IHIPPI># CA?9.II

HAK# CA? ##% K> I FIH#% A CA>9I%# PHI>IFF'PP#HH##;9 %#F?H, >% I>9#% #HI#% 9AH#H A> K%AF #>H C&M# AF CAMM#C# I?>H AFIIA>.

III

HAK# CA? ##% K> I H% & PHI>IFF'PP#HH##K9 >A ?IH AF HC."

he main issue to be resolved is !hether or not the decision o the ribunal o

rbitration o the engal Chamber o Commerce, as a)rmed by the &ighCourt o /udicature o Calcutta, is enorceable in the Philippines.

For the purpose o this decision Ke shall assume that appellee O contrary toappellant;s contention O has the right to sue in Philippine courts and that, asar as the instant case is concerned, it is not guilty o laches. hisnot!ithstanding, Ke are constrained to reverse the appealed decision uponthe ground that it is based upon a clear mista


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#. $hil Aluinu %heels& In'. vs. $A()I Enter*rises

D E C I ( I O N

VIT+),J p:

An 5( /une (21D, F9I #nterprises Incorporated "F9I"E, a corporationorgani@ed and e$isting under and by virtue o the la!s o the 9tate oCaliornia, ?nited 9tates o merica, entered into a distributorshiparrangement !ith Philippine luminum Kheels, Incorporated "PKI"E, aPhilippine corporation, and FratelliPedrini9are@@o 9.P.. "FP9"E, an Italiancorporation. he agreement provided or the purchase, importation anddistributorship in the ?nited 9tates o aluminum !heels manuactured byPKI. Pursuant to the contract, PKI shipped to F9I a total o eightthousand =ve hundred ninety our D,724E !heels, !ith an FA value o?90(8,444.35 at the time o shipment, the =rst batch arriving in t!ocontainers and the second in three containers. hereabouts, F9I paid PKIthe FA value o the !heels. ?nortunately, F9I later ound the shipmentto be deective and in non'compliance !ith stated re6uirements, vi&+

". contrary to the terms o the %istributorship greement and inviolation o ?.9. la!, the country o origin the PhilippinesE !as notstamped on the !heels+

". the !heels did not have !eight load limits stamped on them asre6uired to avoid mounting on e$cessively heavy vehicles, resultingin ris< o damage or bodily injury to consumers arising rom possibleshattering o the !heels+

"C many o the !heels did not have an indication as to !hich modelso automobile they !ould =t+

"%. many o the !heels did not =t the model automobiles or !hichthey !ere purportedly designed+

"#. some o the !heels did not =t any model automobile in use in the?nited 9tates+

"F. most o the bo$es in !hich the !heels !ere pac


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lease JoB your present !arehouse, perhaps you can arrange totranser to another !arehouse and storage charges transer thereon!ill be or our account. Ke hope you understand our position. hedelay and the revised schedules !ere caused by circumstancestotally beyond our control."3

An 0( pril (2D5, again through a tele$ message, PKI inormed F9I that it!as impossible to open a letter o credit on or beore pril (2D5 but assuredthat it !ould do its best to comply !ith the suggested schedule opayments.#In its tele$ reply o 02 pril (2D5, F9I insisted that PKIshould meet the terms o the proposed schedule o payments, speci=cally its

undertainety'hree %ollars and 9i$ty'9even Cents 81,123.81E plus bE !ohousand, >ine &undred Forty and 55N(55 %ollars 0,425.55E, pluscE interest at an annual rate e6ual to the prime rate o Croc


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9ettlement greement by 9ellers, F9I shall have the right to applyimmediately to the Court or entry o /udgment pursuant to the9tipulation or /udgment in the ull amount thereo, less credit or anypayments made by 9ellers pursuant to this 9upplemental 9ettlementgreement. F9I shall have the right thereater to enorce the/udgment against PKI and FP9 in the ?nited 9tates and in any othercountry !here assets o FP9 or PKI may be located, and FP9 andPKI hereby !aive all deenses in any such country to e$ecution orenorcement o the /udgment by F9I. 9peci=cally, FP9 and PKIeach consent to the jurisdiction o the Italian and Philippine courts inany action brought by F9I to see< a judgment in those countries

based upon a /udgment against FP9 or PKI in the ction." /

In accordance !ith the aorementioned paragraph 3.7 o the agreement, theparties made the ollo!ing stipulation beore the Caliornia court:

"he undersigned parties hereto, having entered into a 9upplemental9ettlement greement in this action,

"I I9 # 9IP?H#% by and bet!een plaintif F9I#nterprises, Inc. ;F9I;E and deendants Philippine luminumKheels, Inc., ;PKI;E, and each o them, that judgment may beentered in avor o plaintif F9I and against PKI, in the amount o!o &undred #ighty hree housand Four &undred #ighty nd5(N(55ths %ollars 0D3,4D5.5(E.

"Plaintif F9I shall also be entitled to its costs o suit, and toreasonable attorneys; ees as determined by the Court added to theabove judgment amount." 0

he oregoing supplemental settlement agreement, as !ell as the motionor the entry o judgment, !as e$ecuted by F9I president #lena uhol@erand PKI counsel Mr. homas eady.

PKI, again, proved to be remiss in its obligation under the supplementalsettlement agreement. Khile it opened the =rst HC on (2 /une (2D50it,ho!ever, only paid on it nine 2E months ater, or on 05 March (2D( 0 !henthe letters o credit by then !ere supposed to have all been already posted.his lapse, not!ithstanding, F9I promptly shipped to PKI the =rstcontainer o !heels. gain, despite the delay incurred by PKI on the secondHC, F9I readily delivered the second container. Hater, PKI totally deaultedin opening and paying the third and the ourth HCs, scheduled to be openedon or beore, respectively,5( 9eptember (2D5 and 5( >ovember (2D50andeach to be paid ninety 25E days ater the date o the bill o lading under theHC. s so e$pressed in their a)davits, F9I counsel Fran< Ler and F9Ipresident #lena uhol@er !ere more inclined to believe that PKl;s ailure topay !as due not to any restriction by the Central an< or any other causethan its inability to pay. hese doubts !ere based on the tele$ message oPKI president omeo ojas !ho attached a copy o a communication romthe Central an< notiying PKI o the ban


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had based its judgment !ere a nullity or having been entered into by Mr.homas eady, counsel or PKI, !ithout the latter;s authori@ation.

F9I appealed the decision o the trial court to the Court o ppeals. In adecision, 13dated 35 /uly (221, the appellate court reversed the decision othe trial court and ordered the ull enorcement o the Caliornia judgment.

&ence this appeal.

enerally, in the absence o a special compact, no sovereign is bound to give

efect !ithin its dominion to a judgment rendered by a tribunal o anothercountry+1#ho!ever, the rules o comity, utility and convenience o nationshave established a usage among civili@ed states by !hich =nal judgments ooreign courts o competent jurisdiction are reciprocally respected andrendered e)cacious under certain conditions that may vary in diferentcountries.1,

In this jurisdiction, a valid judgment rendered by a oreign tribunal may berecogni@ed insoar as the immediate parties and the underlying cause oaction are concerned so long as it is convincingly sho!n that there has beenan opportunity or a ull and air hearing beore a court o competentjurisdiction+ that trial upon regular proceedings has been conducted,ollo!ing due citation or voluntary appearance o the deendant and under asystem o jurisprudence li


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international comity that a court o another jurisdiction should rerain, as amatter o propriety and airness, rom so assuming the po!er o passingjudgment on the correctness o the application o la! and the evaluation othe acts o the judgment issued by another tribunal. 21

Fraud, to hinder the enorcement !ithin this jurisdiction o a oreignjudgment, must be e$trinsic, i.e., raud based on acts not controverted orresolved in the case !here judgment is rendered, 22or that !hich !ould goto the jurisdiction o the court or !ould deprive the party against !homjudgment is rendered a chance to deend the action to !hich he has ameritorious case or deense. In =ne, intrinsic raud, that is, raud !hich goesto the very e$istence o the cause o action O such as raud in obtaining theconsent to a contract O is deemed already adjudged, and it, thereore,cannot militate against the recognition or enorcement o the oreignjudgment. 23

#ven !hile the ?9 judgment !as against both FP9 and PKI, F9I had everyright to see< enorcement o the judgment solely against PKI or, or thatmatter, only against FP9. F9I, in its complaint, e$plained:

"(1. here e$ists, and at all times relevant herein there e$isted, aunity o interest and o!nership bet!een deendant PKI anddeendant FP9, in that they are o!ned and controlled by the sameshareholders and managers, such that any individuality andseparateness bet!een these deendants has ceased, i it ever

e$isted, and deendant FP9 is the alter ego o deendant PKI. het!o entities are used interchangeably by their shareholders andmanagers, and plaintif has ound it impossible to ascertain !ith!hich entity it is dealing at any one time. dherence to the =ction oseparate e$istence o these deendant corporations !ould permit anabuse o the corporate privilege and !ould promote injustice againstthis plaintif because assets can easily be shited bet!een the t!ocompanies thereby rustrating plaintif;s attempts to collect on anyjudgment rendered by this Court."2#

Paragraph (4 o the 9upplemental 9ettlement greement =$ed the liabilityo PKI and FP9 to be "joint and several" or solidary. he enorcement othe judgment against PKI alone !ould not, o course, preclude it rompursuing and recovering !hatever contributory liability FP9 might have

pursuant to their o!n agreement.

PKI !ould argue that it !as incumbent upon F9I to =rst return the secondand the third containers o deective !heels beore it could be re6uired toreturn to F9I the purchase price thereor,2,relying on their originalagreement the "ransaction"E. 2-?nortunately, PKI deaulted on itscovenants thereunder that thereby occasioned the subse6uent e$ecution othe supplemental settlement agreement. his time the parties agreed, underparagraph 3.4eE2thereo, that any urther deault by PKI !ould releaseF9I rom any obligation to maintain, store or deliver the rejected !heels.he supplemental settlement agreement evidently superseded, at the veryleast on this point, the previous arrangements made by the parties.

PKI cannot, by this petition or revie!, see< reuge over a business dealing

and decision gone a!ry. >either do the courts unction to relieve a party rom

the efects o an un!ise or unavorable contract reely entered into. s has soaptly been e$plained by the appellate court, the over'all picture might,indeed, appear to be onerous to PKI but it should bear emphasis that thesettlement !hich has become the basis or the oreign judgment has notbeen the start o a business venture but the end o a ailed one, and eachparty, naturally, has had to negotiate rom either position o strength or!eao costs.

9A A%##%.

,. Taag vs. Benguet Consolidated

E4NANDO,J p:

(4


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Conronted by an obstinate and adamant reusal o the domiciliaryadministrator, the County rust Company o >e! ore! or


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dies intestate o!ning property in the country o his domicile as !ell as in aoreign country, administration is had in both countries. hat !hich is grantedin the jurisdiction o decedent;s last domicile is termed the principaladministration, !hile any other administration is termed the ancillaryadministration. he reason or the latter is because a grant o administrationdoes not e/ proprioviorehave any efect beyond the limits o the country in!hich it is granted. &ence, an administrator appointed in a oreign state hasno authority in the JPhilippinesB. he ancillary administration is proper,!henever a person dies, leaving in a country other than that o his lastdomicile, property to be administered in the nature o assets o the deceasedliable or his individual debts or to be distributed among his heirs."

It !ould ollo! then that the authority o the probate court to re6uire thatancillary administrator;s right to "the stoc< certi=cates covering the 33,550shares ..standing in her name in the boo


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estate in the jural order that a court must not only ta


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hat is all then that this case presents. It is obvious !hy the appeal cannotsucceed. It is al!ays easy to conjure e$treme and even oppressivepossibilities. hat is not decisive. It does not settle the issue. Khat carries!eight and conviction is the result arrived at, the just solution obtained,grounded in the soundest o legal doctrines and distinguished by itscorrespondence !ith !hat a sense o realism re6uires. For through theappealed order, the imperative re6uirement o justice according to la! issatis=ed and national dignity and honor maintained.

K#FA#, the appealed order o the &onorable rsenio 9antos, the /udgeo the Court o First Instance, dated May (D, (284, is a)rmed. Kith costsagainst oppositor'appellant enguet Consolidated, Inc.

-. Oil Natural )as Coission vs. CA

;A4TINEZ,J p:

his proceeding involves the enorcement o a oreign judgment rendered bythe Civil /udge o %ehra %un, India in avor o thepetitioner, AIH >% >?H 9CAMMI99IA> and against the privaterespondent, PCIFIC C#M#> CAMP>, I>CAPA#%. HHphil

he petitioner is a oreign corporation o!ned and controlled by theovernment o India !hile the private respondent is a private corporationduly organi@ed and e$isting under the la!s o the Philippines. he presentcon-ict bet!een the petitioner and the private respondent has its roots in acontract entered into by and bet!een both parties on February 08, (2D3!hereby the private respondent undertoo< to supply the petitioner FA?&A?9>% # &?>%#% 4,355E metric tonso oil !ell cement. Inconsideration thereor, the petitioner bound itsel to pay the private

respondent the amount o FA? &?>%#% 9#*#>'9#*#> &A?9>%# &?>%#% ?.9. %AHH9 411,355.55E by opening an irrevocable,divisible, and con=rmed letter o credit in avor o the latter. he oil !ellcement !as loaded on board the ship M* 9??> >* at theport o 9urigao City, Philippines or delivery at ombay and Calcutta, India.&o!ever, due to a dispute bet!een the shipo!ner and the privaterespondent, the cargo !as held up in angot!ithstanding the act that the private respondent hadalready received payment and despite several demands made by thepetitioner, the private respondent ailed to deliver the oil !ell cement.hereater, negotiations ensued bet!een the parties and they agreed thatthe private respondent !ill replace the entire 4,355 metric tons o oil !ellcement !ith Class "" cement cost ree at the petitioner;s designated port.

&o!ever, upon inspection, the Class "" cement did not conorm to the

petitioner;s speci=cations. he petitioner then inormed the privaterespondent that it !as reerring its claim to an arbitrator pursuant to Clause(8 o their contract !hich stipulates:

"#$cept !here other!ise provided in the supply orderNcontract all6uestions and disputes, relating to the meaning o the speci=cationdesigns, dra!ings and instructions herein beore mentioned and as to6uality o !or. Malhotra, resolved thedispute in petitioner;s avor setting orth the arbitral a!ard as ollo!s:

">AK #FA# ater considering all acts o the case, theevidence, oral and documentarys sicE adduced by the claimant andcareully e$amining the various !ritten statements, submissions,letters, tele$es, etc. sent by the respondent, and the oral argumentsaddressed by the counsel or the claimants, I, >.>. Malhotra, 9olerbitrator, appointed under clause (8 o the supply order dated08.0.(2D3, according to !hich the parties, i.e.MN9 Ail and >atural as Commission and the Paci=c Cement Co., Inc.can reer the dispute to the sole arbitration under the provision o therbitration ct. (245, do hereby a!ard and direct as ollo!s:O

"he espondent !ill pay the ollo!ing to the claimant:O

(D


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(. mount received by the espondent

against the letter o credit >o. ((N(2

dated 0D.0.(2D3 ?9 411,355.55

0. e'imbursement o e$penditure incurred

by the claimant on the inspection team;s

visit to Philippines in ugust (2D7 ?9 3,DD(.55

3. H. C. #stablishment charges incurred

by the claimant ?9 (,070.D0

4. Hoss o interest sufered by claimant

rom 0(.8.D3 to 03.1.DD ?9 4(1,(82.27

SSSSSSSSSSSSSSS

otal amount o a!ard ?9 D22,853.11

SSSSSSSSSSSSSSS

"In addition to the above, the respondent !ould also be liable to payto the claimant the interest at the rate o 8 on the above among,

!ith efect rom 04.1.(2DD up to the actual date o payment by theespondent in ull settlement o the claim as a!arded or thedate o the decree, !hichever is earlier.

"I determine the cost at s, 15,555N'e6uivalent to ?97,555 to!ardsthe e$penses on rbitration, legal e$penses, stamps duly incurred bythe claimant. he cost !ill be shared by the parties in e6ualproportion.

"Pronounced at %ehra %un to'day, the 03rd o /uly (2DD." 2

o enable the petitioner to e$ecute the above a!ard in its avor, it =led aPetition beore the Court o the Civil /udge in %ehra %un, India hereinaterreerred to as the oreign court or brevityE, praying that the decision o the

arbitrator be made "the ule o Court" in India. he oreign court issuednotices to the private respondent or =ling objections to the petition. heprivate respondent complied and sent its objections dated /anuary (8,(2D2. 9ubse6uently, the said courtdirected the private respondent to paythe =ling ees in order that the latter;s objections could be givenconsideration. Instead o paying the re6uired =ling ees, the privaterespondent sent the ollo!ing communication addressed to the Civil/udge o %ehra %un:

"he Civil /udge

%ehra %un ?.P.E India

e: Misc. Case >o. 7 o (2D2

MN9 Paci=c Cement Co.,

Inc. vs. A>C Case

9ir:

(. Ke received your letter dated 0D pril (2D2 only last (D May (2D2.

0. Please inorm us ho! much is the court ee to be paid. our letterdid not mention the amount to be paid.

3. Lindly give us (7 days rom receipt o your letter advising us ho!much to pay to comply !ith the same.

han< you or your o. 7 on 1.0.25, thereore, a!ard should be made"ule o the Court.

"OR#ER

!ard dated 03.1.DD, Paper >o. 3N'( is made ule o the Court. Anthe basis o conditions o a!ard decree is passed. !ard Paper >o.3N'( shall be a part o the decree. he plaintif shall also be entitledto get rom deendant ?9D22,853.11 ?9 #ight Ha


20/80

the rule prohibiting oreign corporations transacting business in thePhilippines !ithout a license rom maintaining a suit in Philippine courtsadmits o an e$ception, that is, !hen the oreign corporation is suing on anisolated transaction as in this case. ,nent the issue o the su)ciency o thepetitioner;s cause o action, ho!ever, the C ound the reerral o thedispute bet!een the parties to the arbitrator under Clause (8 o theircontract erroneous. ccording to the C,

"JaB perusal o the above'6uoted clause Clause (8E readily sho!sthat the matter covered by its terms is limited to "HH T?#9IA>9>% %I9P?#9, #HI> A M#>I> AF 9P#CIFICIA>,%#9I>9, %KI>9 >% I>9?CIA>9 #I> #FA#M#>IA>#% and as to the T?HI AF KALM>9&IP AF I#M9A%##% or as to any other 6uestions, claim, right or thing!hatsoever, but 6uali=ed to ;I> > K I9I> A #HI> A 9?PPH A%#NCA>C, %#9I>, %KI>, 9P#CIFICIA>,etc.,; repeating the enumeration in the opening sentence o theclause.

"he court is inclined to go along !ith the observation o thedeendant that the breach, consisting o the non'delivery o thepurchased materials, should have been properly litigated beorea court o la!, pursuant to Clause >o. (7 o the ContractN9upplyArder, herein 6uoted, to !it:

;/?I9%ICIA>ll 6uestions, disputes and diferences, arising under out o or inconnection !ith this supply order, shall be subject to the #UCH?9I*#/?I9%ICIA> AF CA?, !ithin the local limits o !hosejurisdiction and the place rom !hich this supply order is situated.;"-

he C characteri@ed the erroneous submission o the dispute to thearbitrator as a "mista%#> CA? AF PP#H9 *#H ##% I> FFIMI> HAK# CA?;9 A%# AF %I9MI99H 9I>C#:

. >A>'%#HI*# AF CA K9 M# PAP#HCA>IVH# PA*I9IA>9 AF CH?9# (8 AF CA>C+

. /?%M#> AF CI*IH CA? AF %#&%?>, I>%I K9 >FFIMIA> AF FC?H >% H#H FI>%I>9 AF IA >% #FA# #>FAC#H# I> &I9 /?I9%ICIA>+

C. #*I%#>C# M?9 # #C#I*#% A #P#H #FF#C AF P#9?MPI*# I& ?>%# FA#I> /?%M#>." 1

he threshold issue is !hether or not the arbitrator had jurisdiction over thedispute bet!een the petitioner and the private respondent under Clause(8 o the contract. o reiterate, Clause (8 provides as ollo!s:

"#$cept !here other!ise provided in the supply orderNcontract all6uestions and disputes, relating to the meaning o the speci=cationdesigns, dra!ings and instructions herein beore mentioned and as to6uality o !or


21/80

petitioner has mis6uoted the said phrase, shre!dly inserting a commabet!een the !ords "supply orderNcontract" and "design" !here none actuallye$ists. n accurate reproduction o the phrase reads, ". . . or as to any other6uestion, claim, right or thing !hatsoever, in any !ay arising out o orrelating to the supp!1 order;contract desin0 dra'in0 speci6cation0instruction or t%ese conditions. . ." he absence o a comma bet!een the!ords "supply orderNcontract" and "design" indicates that the ormer cannotbe ta


22/80

admits o e$ceptions as maybe provided else!here in the supplyorderNcontract. Ke believe that the correct interpretation to give efect toboth stipulations in the contract is or Clause (8 to be con=ned to all claimsor disputes arising rom or relating to the design, dra!ing, instructions,speci=cations or 6ualityo the materials o the supply orderNcontract, and orClause (7 to cover all other claims or disputes.

he petitioner then asseverates that granting, or the sao.3N'( shall be a part o the decree". his is a categorical decoration that theoreign courtadopted the =ndings o acts and la! o the arbitrator ascontained in the latters !ard Paper. !ard Paper >o. 3N'(, contains ane$haustive discussion o the respective claims and deenses o the parties,and the arbitrator;s evaluation o the same. Inasmuch as the oregoing isdeemed to have been incorporated into the oreign court;s judgment theappellate court !as in error !hen it described the latter to be a "simplisticdecision containing literally, only the dispositive portion".2,

he constitutional mandate that no decision shall be rendered byany court !ithout e$pressing therein clearly and distinctly the acts and thela! on !hich it is based does not preclude the validity o "memorandumdecisions" !hich adopt by reerence the =ndings o act andconclusions o la! contained in the decisions o inerior tribunals.In ,rancisco v. Perms+u!02-this Court held that the ollo!ing memorandumdecision o the egional rial Court o Ma


23/80

t%erefore0 We %ere21 adopt 21 'a1 of reference0 t%e 6ndinsof factsand conc!usions of t%e court a spread in its decision0 as intera!part of t%is Our decision."20#mphasis suppliedE

&ence, even in this jurisdiction, incorporation by reerence is allo!ed i onlyto avoid the cumbersome reproduction o the decision o the lo!er courts,or portions thereo, in the decision o the higher court.3his isparticularly true !hen the decision sought to be incorporated is a lengthyand thorough discussion o the acts and conclusions arrived at, as in thiscase, !here !ard Paper >o. 3N'( consists o eighteen (DE single spacedpages.

Furthermore, the recognition to be accorded a oreign judgment is notnecessarily afected by the act that the procedure in the courts o thecountry in !hich such judgment !as rendered difers rom that o thecourts o the country in !hich the judgment is relied on. 31his Court hasheld that matters o remedy and procedure are governed by the !e/forior theinternal la! o the orum. 32hus, i under the procedural rules o theCivil Court o %ehra %un, India, a valid judgment may be rendered byadopting the arbitrators =ndings, then the same must be accorded respect. Inthe same vein, i the procedure in the oreign court mandates that anArdero the Court becomes =nal and e$ecutory upon ailure to pay thenecessary doc


24/80

C#M#> CAMP>, I>C. to pay to petitioner the amounts adjudged in theoreign judgment subject o said case.

9A A%##%. HHjur

. Asiawest ;er'hant Ban6ers vs. CA& 3-1 (C4A #/0 =21>

DE?EON& 54.& J.@

eore us is a petition or revie! on certiorari o the %ecision (o the Court o

ppeals dated May (2,(223 in C'.. C >o. 37D1( a)rming the%ecision0dated Actober (4,(22( o the egional rial Court o Pasig, MetroManila, ranch (8D in Civil Case >o. 7838D !hich dismissed the complaint opetitioner siavest Merchant anational Construction Corporation.@'p%[email protected]

he petitioner siavest Merchant anational Construction Corporation is a corporation duly incorporated ande$isting under Philippine la!s.

It appears that sometime in (2D3, petitioner initiated a suit or collectionagainst private respondent, then

he 0nd %eendant having entered appearance herein and the Court havingunder Arder (4, rule 3 ordered that judgment as hereinater provided beentered or the Plaintifs against the 0nd %eendant.

I I9 &I9 % %/?%#% that the 0nd deendant do pay the Plaintifs thesum o 7, (5D,025.03 inggit Five million one hundred and eight thousandt!o hundred and ninety and 9en t!enty'threeE together !ith interest at therate o (0 per annum on

iE the sum o 0,7D8,D88.2( rom the 0nd day o March (2D3to the date o payment+ and

iiE the sum o 0,70(,403.30 rom the (( thday o March (2D3to the date o payment+ and 375.55 inggit hree &undredand FityE costs.

%ated the (3th day o 9eptember, (2D7.

9enior ssistant egistrar, &igh Court, Luala Humpur

his /udgment is =led by Messrs. 9o.4, Heboh Pasar, esar, Luala Humpur, 9olicitors or the Plaintifs

abovenamed. *PNAngND((24.1ND3E

4

An the same day, 9eptember (3, (2D7, the &igh Court o Malaya issued anArder directing the private respondent also designated therein as the "0nd%eendant"E to pay petitioner interest on the sums covered by the said/udgment, thus:

9?I >A. C83D o (2D3

et!een

siavest Merchant an


25/80

A%#

?pon the application o siavest Merchant an% ?PA> #%I>the 9ummons in Chambers dated the (8thday o ugust, (2D4 and the )davit o Hee Foong Mee a)rmed on the (4thday o ugust (2D4 both =led herein >% ?PA> I> Mr. . homas oCounsel or the Plaintifs and Mr. Lha! Chay ee o Counsel or the 0nd%eendant abovenamed on the 08th day o %ecember (2D4 I K9A%##% that the Plaintifs be at liberty to sign =nal judgment against the0nd %eendant or the sum o 7,(5D,025.03 >% I K9 A%##% that the0nd %eendant do pay the Plaintifs the costs o suit at 375.55>% I K9F? A%##% that the plaintifs be at liberty to apply or payment o

interest >% upon the application o the Plaintifs or payment o interestcoming on or hearing on the (st day o ugust in the presence o Mr.Palpanaban %evarajoo o Counsel or the Plaintifs and Mr. Lha! Chay ee oCounsel or the 0nd %eendant above'named >% ?PA> I> Counsel asaoresaid CA>9#> I K9 A%##% that the 0nd %eendant do pay thePlaintifs interest at a rate to be assessed >% the same coming on orassessment this day in the presence o Mr. Palpanaban %evarajoo o Counselor the Plaintifs and Mr. Lha! Chay ee o Counsel or the 0nd %eendant>% ?PA> I> Counsel as aoresaid CA>9#> I I9 A%##% thatthe 0nd %eendant do pay the Plaintifs interest at the rate o (0 per annumon:

iE the sum o 0,7D8,D88.2( rom the 0nd day o March (2D3 to thedate o payment+ and

iiE the sum A 0,70(,403.30 rom the ((th day o March (2D3 to thedate o Payment.

%ated the (3th day o 9eptember,(2D7.

9enior ssistant egistrar, &igh Court, Luala Humpur.7

Follo!ingunsuccessul attempts8to secure payment rom private respondentunder the judgment, petitioner initiated on 9eptember 7, (2DD the complaintbeore egional rial Court o Pasig, Metro Manila, to enorce the judgment othe &igh Court o Malaya.1

Private respondent sought the dismissalo the case via a Motion to%ismiss=led on Actober 7, (2DD, contending that the alleged judgment othe &ighCourt o Malaya shouldbe denied recognition or enorcement sinceon in ace, it is tainted !ith !ant o jurisdiction, !ant o notice to privaterespondent, collusion andNor raud, and there is a clear mista &AH%I> & MH9I>CA? %I% >A CT?I# P#9A>H /?I9%ICIA> A*# P>CC,>AKI&9>%I> & aE FA#I> CA? &% 9#*#%

9?MMA>9 A> P>CC I9 MH9l AFFIC#, >% bE P>CC I9#HFPP##% CA?>9#H I> C9# #FA# & CA?.

II

CA? AF PP#H9 ##% I> %#>I> #CA>IIA> >%#>FAC#M#> A 9ICE MH9I> CA? /?%M#>.

enerally, in the absence o a special compact, no sovereign is bound to giveefect !ithin its dominion to a judgment rendered by a tribunal o anothercountry+(3ho!ever, the rules o comity, utility and convenience o nationshave established a usage among civili@ed states by !hich =nal judgments ooreign courts o competent jurisdiction are reciprocally respected andrendered e)cacious under certain conditions that may vary in diferentcountries.(4

In this jurisdiction, a valid judgment rendered by a oreign tribunal may berecogni@ed insoar as the immediate parties and the underlying cause oaction are concerned so long as it is convincingly sho!n that there has beenan opportunity or a ull and air hearing beore a court o competentjurisdiction+ that the trial upon regular proceedings has been conducted,ollo!ing due citation or voluntary appearance o the deendant and under asystem o jurisprudence li


26/80

In the instant case, petitioner su)ciently established the e$istence o themoney judgment o the &igh Court o Malaya by the evidence it ofered.*inaya< Prabha


27/80

he oregoing reasons or grounds relied upon by private respondent inpreventing enorcement and recognition o the Malaysian judgment primarilyreer to matters o remedy and procedure taeedless to stress, therecognition to be accorded a oreign judgment is not necessarily afected bythe act that the procedure in the courts o the country in !hich suchjudgment !as rendered difers rom that o the courts o the country in !hichthe judgment is relied on.40?ltimately, matters o remedy and procedure suchas those relating to the service o summons or court process upon thedeendant, the authority o counsel to appear and represent a deendant andthe ormal re6uirements in a decision are governed by the !e/ forior the

internal la! o the orum,

43

i.e.0 the la! o Malaysia in this case.In this case, it is the procedural la! o Malaysia !here the judgment !asrendered that determines the validity o the service o court process onprivate respondent as !ell as other matters raised by it. s to !hat theMalaysian procedural la! is, remains a 6uestion o act, not o la!. It may notbe tao. 37D1( sustaining the %ecisiondated Actober (4, (22( in Civil Case >o. 7838D o the egional rial Court oPasig, ranch (8D denying the enorcement o the /udgment dated9eptember (3, (2D7 o the &igh Court o Malaya in Luala Humpuris 4EVE4(EDand (ET A(IDE, and another in its stead is herebyrenderedO4DE4IN)private respondent Philippine >ational ConstructionCorporation to pay petitioner siavest Merchant an


28/80

/. %ang ?a!oratories vs. ;endo9a& 1,- (C4A ## =10/>

$A4A(& J.:

his is a petition or Certiorari, Prohibition and mandamus !ith PreliminaryInjunction, seeo. 1(D3 o the egional rial Court, Ma


29/80

and to issue a temporary restraining order enjoining respondent /udge romurther proceeding !ith Civil Case >o. 1(D3 ollo, pp. (3D'(32E.

An Actober 3(, (2D7, private respondents submitted their comment ollo,pp. (41'(1DE. In the resolution o /anuary (3, (2D8, the Court resolved to givedue course to the petition ollo, p. (D1'E. In the resolution o February 7,(2D8, the Court granted petitioner;s motion to admit reply to comment andnoted aoresaid reply. Petitioner submitted its brie on 9eptember (7, (2D8ollo, p. 08DE+ the respondents, on >ovember (7, (2D8 ollo, p. 010E.

Petitioner assigns the ollo!ing errors:

I.

#9PA>%#> /?%# M#>%AV C#% KI&A? A I> #UC#99 AF/?I9%ICIA> A KI& *# ?9# AF %I9C#IA> MA?>I> A HCLAF /?I9%ICIA> I> ?HI> & P#IIA># &% *AH?>IH 9?MI#%A /?I9%ICIA> AF CA? #HAK.

II

#9PA>%#> /?%# M#>%AV C#% KI&A? A I> #UC#99 AF/?I9%ICIA> A KI& *# ?9# AF %I9C#IA> MA?>I> A HCLAF /?I9%ICIA> I> ?HI> & CCHK C> 9#*# 9?MMA>9 A>P#IIA># #U'#IAIHH.

III

#9PA>%#> /?%# M#>%AV C#% KI&A? A I> #UC#99 AF

/?I9%ICIA> A KI& *# ?9# AF %I9C#IA> MA?>I> A HCLAF /?I9%ICIA> I> >A &AH%I> & # K9 IMPAP# 9#*IC# AF9?MMA>9 A> P#IIA>#.

he petition is devoid o merit.

he only issue in this case is !hether or not respondent Court has ac6uiredjurisdiction over the person o the petitioner, a oreign corporation.

In its Motion to %ismiss, petitioner interposed that the court has nojurisdiction over its person primarily because it is a ?nited 9tates corporation!ith principal address at Ane Industrial venue, Ho!ell, Massachusetts,?.9.., is not domiciled in the Philippines, does not have any o)ce or place obusiness in the Philippines, is not licensed to engage and is not engaging inbusiness here. #UU# upon !hom summons !as served on behal o this

deendant is a local company entirely separate and distinct rom and is notthe representative o the deendant ollo, pp. 71'85E.

Petitioner;s contention is untenable. he issue is not novel in our jurisdiction.

here are three 3E modes o efecting service o summons upon privateoreign corporations as provided or in 9ection (4, ule 1 o the ules oCourt, to !it: (E by serving upon the agent designated in accordance !ithla! to accept service o summons+ 0E i there is no resident agent, by serviceon the government o)cial designated by la! to that o)ce+ and 3E byserving on any o)cer or agent o said corporation !ithin the Philippines Far#ast Int;l. Import and #$port Corp. v. >an represents that its o)ce in the Philippines is #UU#,

!hile the letterhead o #UU# and its invoices sho! that it is K>;srepresentative. ollo, p. 87E. Moreover, in its eply to Apposition to Motion to%ismiss, K> itsel admitted that it deals e$clusively !ith #UU# in thesale o its products in the Philippines ollo, pp. 12 and (74E.

In any event, as previously stated, private respondent moved urther, e/a2undante caute!a, or leave to efect e$traterritorial service o summons onpetitioner K>. Private respondent presented to the Court documentaryevidence proving that the deendant Kang has properties in the Philippinesconsisting o trademar designated aael #. #vangelists o 83D Philippine an


30/80

Indeed it has been held that "!here a single act or transaction o a oreigncorporation is not merely incidental or casual but is o such character asdistinctly to indicate a purpose to do other business in the 9tate, such actconstitutes doing business !ithin the meaning o statutes prescribing theconditions under !hich a oreign corporation may be served !ith summonsFar #ast Int;l. Import and #$port Corp. v. >anan9I%##%, the petition is %I9MI99#% or lac< o merit, !ithcosts against the petitioner. he temporary restraining order is hereby !iftedimmediate!1.

9A A%##%.

0. 4oal Crown International vs. N?4C

CO4TE(& J.:

35

Petitioner oyal Cro!n Internationale see


31/80

Petitioner oyal Cro!n Internationale seeational Habor elations Commission >HCE !hich a)rmed a decision othe Philippine Averseas #mployment dministration PA#E holding it liableto pay, jointly and severally !ith Vamel'urbag #ngineering and rchitecturalConsultant VM#HE, private respondent *irgilio P. >acionales; salary andvacation pay corresponding to the une$pired portion o his employmentcontract !ith VM#H.

In (2D3, petitioner, a duly licensed private employment agency, recruitedand deployed private respondent or employment !ith VM#H as anarchitectural dratsman in 9audi rabia. An May 07, (2D3, a serviceagreement !as e$ecuted by private respondent and VM#H !hereby the

ormer !as to receive per month a salary o ?9755.55 plus ?9(55.55 asallo!ance or a period o one (E year commencing rom the date o hisarrival in 9audi rabia. Private respondent departed or 9audi rabia on /une0D,(2D3.

An February (3, (2D4, VM#H terminated the employment o privaterespondent on the ground that his perormance !as belo! par. For three 3Esuccessive days thereater, he !as detained at his 6uarters and !as notallo!ed to report to !or< until his e$it papers !ere ready. An February (8,(2D4, he !as made to board a plane bound or the Philippines.

Private respondent then =led on pril 03, (2D4 a complaint or illegaltermination against petitioner and VM#H !ith the PA#, doco. HE D4'54'45(.

ased on a =nding that petitioner and VM#H ailed to establish that privaterespondent !as terminated or just and valid cause, the Kor% 9IU &?>%#% FA ?9 %AHH9?90,845.55E or its e6uivalent in Philippine currency at thetime o payment, representing the salaries corresponding to

the une$pired portion o complainant;s contract+0. 9IU &?>%#% ?9 %AHH9 ?9 855.55E less partialpayment o FI*# &?>%#% FIF'#I& 9?%I IH9977DE, or its e6uivalent in Philippine currency at the time oactual payment, representing the unpaid balance ocomplainant;s vacation pay+

3. # &?>%#% FIF ?9 %AHH9 ?9375.55E or itse6uivalent in Philippine currency at the time o actualpayment representing reimbursement o salary deductionsor return travel und+

4. en percent (5E o the above'stated amounts, as and orattorney;s ees.

Complainant;s claim or legal and transportation e$pensesare hereby %I9MI99#% or lac< o merit.

9A A%##%.

JPA# %ecision, p. 7+ ollo, p. 34.B

An /uly (D, (2D8, petitioner =led thru its ne! counsel a motion orreconsideration !hich !as treated as an appeal to the >HC by the PA#.Petitioner alleged that the PA# erred in holding it solidarity liable orVM#H;s violation o private respondent;s service agreement even i it !asnot a party to the agreement.

In a resolution promulgated on %ecember ((, (2D8, the >HC a)rmed thePA# decision, holding that, as a duly licensed private employment agency,petitioner is jointly and severally liable !ith its oreign principal VM#H or allclaims and liabilities !hich may arise in connection !ith the implementationo the employment contract or service agreement J>HC %ecision, pp. 3'4+ollo, pp. 08'01B.

An March 35, (2D1, the >HC denied or lac< o merit petitioner;s motion orreconsideration.

&ence, petitioner =led the present petition captioned as "Petition or evie!".

t this point, it is not amiss to note that the =ling o a "Petition or evie!"under ule 47 o the ules o Court is not the proper means by !hich >HCdecisions are appealed to the 9upreme Court. It is only through a petition

or certiorariunder ule 87 that >HC decisions may be revie!ed andnulli=ed on the grounds o lac< o jurisdiction or grave abuse o discretionamounting to lac< or e$cess o jurisdiction. >evertheless, in the interest ojustice, this Court opted to treat the instant petition as i it !ere a petitionor certiorari. hus, ater the =ling o respondents; comments, petitioner;sjoint reply thereto, and respondents; rejoinders, the Court resolved toconsider the issues joined and the case submitted or decision.

he case at bar involves t!o principal issues, to !it:

I. Khether or not petitioner as a private employment agencymay be held jointly and severally liable !ith the oreign'based employer or any claim !hich may arise in connection!ith the implementation o the employment contracts o theemployees recruited and deployed abroad+

II. Khether or not su)cient evidence !as presented bypetitioner to establish the termination o private respondent;semployment or just and valid cause.

I.

Petitioner contends that there is no provision in the Habor Code, or theomnibus rules implementing the same, !hich either provides or the "third'party liability" o an employment agency or recruiting entity or violations oan employment agreement perormed abroad, or designates it as the agento the oreign'based employer or purposes o enorcing against the latterclaims arising out o an employment agreement. hereore, petitionerconcludes, it cannot be held jointly and severally liable !ith VM#H orviolations, i any, o private respondent;s service agreement.

3(

Petitioner;s conclusion is erroneous Petitioner conveniently overloo


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Petitioner s conclusion is erroneous. Petitioner conveniently overlooo.( o nne$ "&" o Petition+ ollo. p. 43B.

Considering the oregoing, the Court holds that the >HC committed no graveabuse o discretion amounting to lac< or e$cess o jurisdiction in declaringpetitioner jointly and severally liable !ith its oreign principal VM#H or allclaims !hich have arisen in connection !ith the implementation o privaterespondent;s employment contract.

II.

Petitioner asserts that the >HC ailed to consider the over!helming evidenceit had presented beore the PA# !hich establishes the act that privaterespondent !as terminated or just and valid cause in accordance !ith hisservice agreement !ith VM#H.

his assertion is !ithout merit. he >HC upheld the PA# =nding thatpetitioner;s evidence !as insu)cient to prove termination rom employmentor just and valid cause. nd a careul study o the evidence thus arpresented by petitioner reveals to this Court that there is legal basis orpublic respondent;s conclusion.

It must be borne in mind that the basic principle in termination cases is thatthe burden o proo rests upon the employer to sho! that the dismissal is orjust and valid cause, and ailure to do so !ould necessarily mean that thedismissal !as not justi=ed and, thereore, !as illegal JPolymedic eneral&ospital v. >HC, .. >o. 84(25, /anuary 3(, (2D7,(34 9C 405+ and alsorticle 011 o the Habor CodeB. nd !here the termination cases involve aFilipino !or


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employment agency or recruitment entity !hich recruited the !or


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>eedless to say, the la!s o 9audi rabia !hich !ere, incidentally, neitherpleaded nor proved by petitioner, have absolutely no bearing !hatsoever tothe case at bar.

he Court holds, thereore, that the >HC committed no grave abuse odiscretion amounting to lac< or e$cess o jurisdiction in upholding the PA#;s=nding o insu)ciency o evidence to prove termination or just and validcause.

K#FA#, the Court esolved to %I9MI99 the instant petition.

9A A%##%.

1. ?onger isher );B vs. CA

;E?ENCIO"E44E4A& J.:

he actual bac !as =ve years rene!able automatically or=ve years each time unless one party gives due notice o termination to theother.

bE P&IHCM could manuacture the PA%?C9 locally !ith ra! materialsrom sources other than HI>>#, but in such case %MK !ill have to be paid7 o D5 o P&IHCM;s !holesale prices.

cE ter termination o the ##M#>, P&IHCM !ill be entitled, or =veyears, to (5 royalty on sales o PA%?C9 in the Philippines hereinater tobe reerred to as the AH CH?9#E.

dE A!! !ea! sett!ements 'it%in t%e compass of t%is AREEMENT s%a!! fa!!under t%e 5urisdiction of P%i!ippine courts.:

It appears that, subse6uently, the %MK interests !ere ac6uired by HI>>#G FI9 M& HI>># or brevityE. An other hand, HI>># !as asubsidiary o

##C&M A?P H%. !hich, through ##C&M PA%?C9 I>#>IA>H##C&M, or brevityE, had opened an o)ce in this country at ?nit , Padillauilding, #merald venue, Pasig, Metro Manila, under the supervision ormanagership o one named >>#. HI>># and ##C&M can be deemedto constitute a single personality. 9ubse6uent reerence to HI>># !illinclude reerence to %MK and ##C&M.

he ##M#> !as automatically rene!ed once, or up to February 0D,(213, and =nally terminated on ugust 3(, (211. he events relative to thetermination !ere as ollo!s:

eore February 0D, (213, the parties agreed to e$tend the ##M#> upto February 0D, (217. I it is not terminated by prior notice si$ months beoreFebruary 0D, (217, as it !as not, it !ould be e$tended or a urther t!o yearsup to February 0D, (211.

y letter dated February 07, (211, through the la! =rm o A@aeta omulo, %eHeon, Mabanta, uenaventura, 9ayoc and %e los ngeles the Ha! Firm, orbrevityE P&IHCM !as advised that HI>># !as interested in continuingbusiness relationship !ith P&IHCM and !ill be interested in negotiating a

ne! contract and that, prior to the signing o a ne! contract, HI>># !asproposing that the old contract be e$tended by mutual agreement or aperiod o si$ 8E calendar months beginning March (, (211 to e$pireautomatically on ugust 3(, (211 i no contract is entered into. he proposal!as accepted by P&IHCM, and no ne! contract having been signed byugust 3(, (211, the ##M#> terminated on that date,

An /uly 05, (212, P&IHCM presented a claim to HI>># or P(,577,555.55under the AH CH?9#. he claim !as discussed bet!een P&IHCM and>># o ##C&M !ith the intervention o the Ha! Firm. >o settlementhaving been arrived at, P&IHCM, on ugust 8, (2D5, =led a complaintagainst ##C&M alone in Civil Case >o. 3D5D8 o the then Court o FirstInstance o i@al. he summons issued could not be served on ##C&M, the9herif having reported that ##C&M !as neither a company registered in

the Philippines, nor resident at the given address o ?nit , Padilla uilding,#merald venue, Pasig, Metro Manila.

P&IHCM then =led an amended complaint, this time ma># and##C&M as the deendants, and pleading that summons could be served onthe Ha! Firm as an agent o the deendants. he Ha! Firm submitted aspecial appearance in the case on 2e%a!f of )"NNER, and, also on 2e%a!f of)"NNER, moved or dismissal on the grounds aE that HI>># !as not aoreign corporation doing business in the Philippines and hence could not besued locally, and, bE that HI>># could not be served !ith summonsthrough the Ha! Firm. It !ill thus be noted that t!o issues !ere being raised.he =rst !as !hether or not HI>># !as doing business in the Philippines+and the second !as !hether or not HI>># could be validly summonedthrough the Ha! Firm as its agent. he rial Court denied the Motion to

34

%ismiss assuming that HI>># could be sued in this jurisdiction and principle o liberal construction o the rules to promote just determination o


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%ismiss, assuming that HI>># could be sued in this jurisdiction, andholding that HI>># can be served !ith summons through the Ha! Firm.

HI>># !ent on certiorari to the Intermediate ppellate Court !here itreiterated the plea that summons could not be validly served on it throughthe Ha! Firm+ and it also re6uested that a hearing be held, conormably tothe provisions o 9ection 23E o atas Pambansa lg. (02, on the 6uestion o!hether or not HI>># !as doing business in this country.

he ppellate Court held that summons served through the Ha! Firm !asvalid on the strength oJo%n!o Tradin $o. vs. ,!ores DD Phil. 14( J(27(BE+and it urther ruled that receiving evidence on !hether or not HI>># !asdoing business in the Philippines could not be justi=ed under the cited atasPambansa lg. (02.

Considering the Comment, eply, ejoinder and 9urrejoinder submitted bythe parties, !e resolved to give due course, !ithout re6uiring the submittal omemoranda.

he ppellate Court acted correctly in denying the re6uest or an evidentiaryhearing. #vidence necessary in regards to actual issues raised in casesalling !ithin the ppellate Court;s original and appellate jurisdictioncontemplates "incidental" acts !hich !ere not touched upon, or ully heardby the trial or respondent Court. he la! could not have intended that theppellate Court !ould hold an original and ull trial o a main actual issue ina case, !hich properly pertains to rial Courts.

It is our vie! that evidence as to !hether HI>># !as doing business in thePhilippines, even beore the rial Court, is no longer necessary in vie! o theact that P&IHCM and HI>># !ere contractees in the ##M#> andthe claim o P&IHCM is based on the AH CH?9# o that ##M#>.Khether HI>># is or is not doing business in the Philippines !ill not matterbecause the parties had e$pressly stipulated in the ##M#> that allcontroversies based on the ##M#> "shall all under the jurisdiction oPhilippine courts". In other !ords, there !as a covenant on venue to theefect that HI>># can be sued by P&IHCM beore Philippine Courts inregards to a controversy related to the ##M#>.

case should not be dismissed simply because an original summons !as!rongully served. It should be di)cult to conceive, or e$ample, that !hen adeendant personally appears beore a Court complaining that he had not

been validly summoned, that the case =led against him should be dismissed.n a!ias summons can be actually served on said deendant.

For the e$peditious determination o this controversy, thereore, in vie! othe insu)ciency o evidence that HI>># is doing business in thePhilippines, !hich is a sine qua non re6uirement under the provision o9ection (4, ule (4 1o the ules beore service o process can be efectedupon a oreign corporation and jurisdiction over the same may be ac6uired, itis best that a!ias summonson HI>># be issued, in this case under theprovisions o 9ection (1, ule (4, 2in relation to ule 4 o the ules o Court,!hich recogni@es the principle that venue can be agreed upon by the parties.I a local plaintif and a oreign corporation have agreed on Philippine venue,summons by publication can be made on the oreign corporation under the

principle o liberal construction o the rules to promote just determination oactions.

CCA%I>H, the judgment under revie! o the Intermediate ppellateCourt hird 9pecial Cases %ivisionE is hereby upheld insoar as it sustainedthe Arders, dated ugust 04, (2D( and %ecember (D, (2D(, o the then Courto First Instance o i@al, ranch UI, Pasig, denying petitioner;s Motion to%ismiss and the subse6uent Motion or econsideration, albeit on groundsdiferent rom those relied upon by the Intermediate ppellate Court. heno! egional rial Court, to !hich the case belo! has been assigned, ishereby directed to allo! private respondent Philippine Chemical Haboratories,Inc., to apply or the issuance o a!ias summons on petitioner Hingner and

Fischer M& by publication under the provisions o 9ection (1, ule (4 inrelation to ule 4 o the ules o Court, and ater issues have been joined, toproceed to trial and judgment accordingly.

>o pronouncement as to costs.

9A A%##%.

11. (audi Ara!ian Airlines vs. CA

+I(+;BIN)& J.:

his petition orcertioraripursuant to ule 47 o the ules o Court see


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An pril 01, (225, !hile on a lay over in /a


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An /une 03, (224, Morada =led an mended Complaint !herein l ala!i!as dropped as party deendant. An ugust ((, (224, 9audia =led itsManiestation and Motion to %ismiss mended Complaint 1/.

he trial court issued an Arder 10dated ugust 02, (224 denying the Motionto %ismiss mended Complaint =led by 9audia.

From the Arder o respondent /udge 2denying the Motion to %ismiss, 9?%I=led on 9eptember 05, (224, its Motion or econsideration 21o the Arderdated ugust 02, (224. It alleged that the trial court has no jurisdiction tohear and try the case on the basis o rticle 0( o the Civil Code, since theproper la! applicable is the la! o the Lingdom o 9audi rabia. An Actober(4, (224, Morada =led her Apposition 22o %eendant;s Motion oreconsiderationE.

In the eply 23=led !ith the trial court on Actober 04, (224, 9?%I allegedthat since its Motion or econsideration raised lac< o jurisdiction as itscause o action, the Amnibus Motion ule does not apply, even i that groundis raised or the =rst time on appeal. dditionally, 9?%I alleged that thePhilippines does not have any substantial interest in the prosecution o theinstant case, and hence, !ithout jurisdiction to adjudicate the same.

espondent /udge subse6uently issued another Arder 2#dated February 0,(227, denying 9?%I;s Motion or econsideration. he pertinent portion othe assailed Arder reads as ollo!s:

cting on the Motion or econsideration o deendant 9audi

rabian irlines =led, thru counsel, on 9eptember 05, (224,and the Apposition thereto o the plaintif =led, thru counsel,on Actober (4, (224, as !ell as the eply there!ith odeendant 9audi rabian irlines =led, thru counsel, onActober 04, (224, considering that a perusal o the plaintifsmended Complaint, !hich is one or the recovery o actual,moral and e$emplary damages plus attorney;s ees, upon thebasis o the applicable Philippine la!, rticle 0( o the >e!Civil Code o the Philippines, is, clearly, !ithin the jurisdictiono this Court as regards the subject matter, and there beingnothing ne! o substance !hich might cause the reversal ormodi=cation o the order sought to be reconsidered, themotion or reconsideration o the deendant, is %#>I#%.

9A A%##%.2,

Conse6uently, on February 05, (227, 9?%I =led its Petitionor$ertiorariand Prohibition !ith Prayer or Issuance o Krit o PreliminaryInjunction andNor emporary estraining Arder 2-!ith the Court o ppeals.

espondent Court o ppeals promulgated a esolution !ith emporaryestraining Arder 2dated February 03, (227, prohibiting the respondent/udge rom urther conducting any proceeding, unless other!ise directed, inthe interim.

In another esolution 2/promulgated on 9eptember 01, (227, no! assailed,the appellate court denied 9?%I;s Petition or the Issuance o a Krit oPreliminary Injunction dated February (D, (227, to !it:

he Petition or the Issuance o a Krit o PreliminaryInjunction is hereby %#>I#%, ater considering the ns!er,!ith Prayer to %eny Krit o Preliminary Injunction Ro!!o, p.(37E the eply and ejoinder, it appearing that hereinpetitioner is not clearly entitled thereto 8nciano Paramedica!$o!!ee0 et.A!., v. $ourt of Appea!s0 et.A!., @GG==0 Apri! >0@II=0 Second #ivisionE.

9A A%##%.

An Actober 05, (227, 9?%I =led !ith this &onorable Court the instantPetition 20or evie! !ith Prayer or emporary estraining Arder datedActober (3, (227.

&o!ever, during the pendency o the instant Petition, respondent Court oppeals rendered the %ecision 3dated pril (5, (228, no! also assailed. Itruled that the Philippines is an appropriate orum considering that themended Complaint;s basis or recovery o damages is rticle 0( o the CivilCode, and thus, clearly !ithin the jurisdiction o respondent Court. It urtherheld thatcertiorariis not the proper remedy in a denial o a Motion to%ismiss, inasmuch as the petitioner should have proceeded to trial, and incase o an adverse ruling, =nd recourse in an appeal.

An May 1, (228, 9?%I =led its 9upplemental Petition or evie! !ithPrayer or emporary estraining Arder31dated pril 35, (228, given duecourse by this Court. ter both parties submitted their Memoranda, 32theinstant case is no! deemed submitted or decision.

Petitioner 9?%I raised the ollo!ing issues:

I

he trial court has no jurisdiction to hear and try Civil Case>o. T'23'(D324 based on rticle 0( o the >e! Civil Codesince the proper la! applicable is the la! o the Lingdom o9audi rabia inasmuch as this case involves !hat is otice hereo. Further, the evised ules oCourt should be construed !ith liberality pursuant to 9ection0, ule ( thereo.

III

Petitioner received on pril 00, (228 the pril (5, (228decision in C'.. 9P >A. 38733 entitled "9audi rabianirlines v. &on. odolo . Arti@, et a!." and =led its pril 35,

31

(228 9upplemental Petition For evie! Kith Prayer For 1. On Januar1 @0 @II


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pp yemporary estraining Arder on May 1, (228 at (5:02 a.m. or!ithin the (7'day reglementary period as provided or under9ection (, ule 47 o the evised ules o Court. hereore,the decision in C'.. 9P >A. 38733 has not yet become=nal and e$ecutory and this &onorable Court can ta%#> PP#HH# CA? ##% I>&AH%I> & #IA>H IH CA? AF T?#VA>CI &9 /?I9%ICIA> A >% CI*IH C9# >A. T'23'(D324 #>IH#% "MIHA9 P. MA% *. 9?%II> IHI>#9".

II.

K #9PA>%#> PP#HH# CA? ##% I> ?HI>& I> &I9 C9# P&IHIPPI># HK 9&A?H% A*#>.

Petitioner 9?%I claims that beore us is a con-ict o la!s that must besettled at the outset. It maintains that private respondent;s claim or allegedabuse o rights occurred in the Lingdom o 9audi rabia. It alleges that thee$istence o a oreign element 6uali=es the instant case or the application o

the la! o the Lingdom o 9audi rabia, by virtue o the !e/ !oci de!icticommissirule. 3#

An the other hand, private respondent contends that since her mendedComplaint is based on rticles (2 3,and 0( 3-o the Civil Code, then theinstant case is properly a matter o domestic la!. 3

?nder the actual antecedents obtaining in this case, there is no dispute thatthe interplay o events occurred in t!o states, the Philippines and 9audirabia.

s stated by private respondent in her mended Complaint 3/dated /une 03,(224:

0. %eendant 9?%I I> IHI>#9 or 9?%I is a oreign

airlines corporation doing business in the Philippines. It maybe served !ith summons and other court processes at ravelKide ssociated 9ales Phils.E. Inc., 3rd Floor, Cougaruilding, ((4 *alero 9t., 9alcedo *illage, Maothing happened thenbut on /une 0D, (223, a 9audi judge interrogated plaintifthrough an interpreter about the /a


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p!ainti4 sou%t t%e %e!p of t%e P%i!ippines Em2ass1 in Jedda%.he latter helped her pursue an appeal rom the decision othe court. o pay or her upe! Civil Code provides:

rt. (2. #very person must, in the e$ercise o his rights and in

the perormance o his duties, act !ith justice give everyonehis due and observe honesty and good aith.

An the other hand, rticle 0( o the >e! Civil Code provides:

rt. 0(. ny person !ho !illully causes loss or injury toanother in a manner that is contrary to morals, good customsor public policy shall compensate the latter or damages.

hus, in P%i!ippine Nationa! Ban+ PNBC vs. $ourt of Appea!s, #,this Court heldthat:

he aorecited provisions on human relations !ere intendedto e$pand the concept o torts in this jurisdiction by grantingade6uate legal remedy or the untold number o moral

g p g p yprovide in the statutes.

lthough rticle (2 merely declares a principle o la!, rticle 0( gives -eshto its provisions. hus, !e agree !ith private respondent;s assertion thatviolations o rticles (2 and 0( are actionable, !ith judicially enorceableremedies in the municipal orum.

ased on the allegations #-in the mended Complaint, read in the light o theules o Court on jurisdiction #!e =nd that the egional rial Court CE oTue@on City possesses jurisdiction over the subject matter o the suit. #/Itsauthority to try and hear the case is provided or under 9ection ( o epublicct >o. 182(, to !it:

9ec. (. 9ection (2 o atas Pambansa lg. (02, other!iseo! egional rialCourtB

aE $$$ $$$ $$$

bE Personal actions. O ll other actions may be commencedand tried !here the deendant or any o the deendantsresides or may be ound, or !here the plaintif or any o theplaintif resides, at the election o the plaintif.

Pragmatic considerations, including the convenience o the parties, also!eigh heavily in avor o the C Tue@on City assuming jurisdiction.Paramount is the private interest o the litigant. #norceability o a judgmenti one is obtained is 6uite obvious. elative advantages and obstacles to a airtrial are e6ually important. Plaintif may not, by choice o an inconvenientorum, "ve$", "harass", or "oppress" the deendant, e.. by in-icting upon himneedless e$pense or disturbance. ut unless the balance is strongly in avoro the deendant, the plaintifs choice o orum should rarely be disturbed. #0

32

Keighing the relative claims o the parties, the court a quoound it best to Clearly, petitioner had submitted to the jurisdiction o the egional rial Court


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hear the case in the Philippines. &ad it reused to ta


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instituted or done. he!e/ fori O the la! o the orum O isparticularly important because, as !e have seen earlier,matters o "procedure" not going to the substance o theclaim involved are governed by it+ and because the!e/foriapplies !henever the content o the other!ise applicableoreign la! is e$cluded rom application in a given case orthe reason that it alls under one o the e$ceptions to theapplications o oreign la!+ and

DE the -ag o a ship, !hich in many cases is decisive opractically all legal relationships o the ship and o its master

or o!ner as such. It also covers contractual relationshipsparticularly contracts o afreightment. -#mphasis ours.E

ter a careul study o the pleadings on record, including allegations in themended Complaint deemed admitted or purposes o the motion to dismiss,!e are convinced that there is reasonable basis or private respondent;sassertion that although she !as already !or


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just or the bene=t o all the litigants, but also or the vindication o thecountry;s system o la! and justice in a transnational setting. Kith theseguidelines in mind, the trial court must proceed to try and adjudge the casein the light o relevant Philippine la!, !ith due consideration o the oreignelement or elements involved. >othing said herein, o course, should beconstrued as prejudging the results o the case in any manner !hatsoever.

K#FA#, the instant petition orcertiorariis hereby %I9MI99#%. CivilCase >o. T'23'(D324 entitled "Milagros P. Morada vs. 9audi rabia irlines" ishereby #M>%#% to egional rial Court o Tue@on City, ranch D2 orurther proceedings.

9A A%##%.

12.$* vs. %ong Cheng

4O;+A?DEZ& J.:In this appeal the ttorney'eneral urges the revocation o the order o theCourt o First Instance o Manila, sustaining the demurrer presented by thedeendant to the inormation that initiated this case and in !hich theappellee is accused o having illegally smo


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prevent it.

&ence in ?nited 9tates vs.Hoo< Cha! (D Phil., 713E, this court held that:

lthough the mere possession o an article o prohibited use in thePhilippine Islands, aboard a oreign vessel in transit in any local port,does not, as a general rule, constitute a crime triable by the courts othe Islands, such vessels being considered as an e$tension o its o!nnationality, the same rule does not apply !hen the article, the use o!hich is prohibited in the Islands, is landed rom the vessels uponPhilippine soil+ in such a case an open violation o the la!s o the landis committed !ith respect to !hich, as it is a violation o the penal

la! in orce at the place o the commission o the crime, no courtother than that established in the said place has jurisdiction o theofense, in the absence o an agreement under an internationaltreaty.

s to !hether the ?nited 9tates has ever consented by treaty or other!ise torenouncing such jurisdiction or a part thereo, !e =nd nothing to this efect soar as #ngland is concerned, to !hich nation the ship !here the crime in6uestion !as committed belongs. esides, in his !or< "reaties, Conventions,etc.," volume (, page 807, Malloy says the ollo!ing:

here shall be bet!een the territories o the ?nited 9tates omerica, and all the territories o &is ritanic Majesty in #urope, areciprocal liberty o commerce. he inhabitants o the t!o countries,

respectively, shall have liberty reely and securely to come !ith theirships and cargoes to all such places, ports and rivers, in theterritories aoresaid, to !hich other oreigners are permitted to come,to enter into the same, and to remain and reside in any parts o thesaid territories, respectively+ also to hire and occupy houses and!arehouses or the purposes o their commerce+ and, generally, themerchants and traders o each nation respectively shall enjoy themost complete protection and security or their commerce, butsubject al!ays to the la!s and statutes o the t!o countries,respectively. rt. (, Commerce and >avigation Convention.E

Ke have seen that the mere possession o opium aboard a oreign vessel intransit !as held by this court not triable by or courts, because it being theprimary object o our Apium Ha! to protect the inhabitants o the Philippines

against the disastrous efects entailed by the use o this drug, its merepossession in such a ship, !ithout being used in our territory, does not beingabout in the said territory those efects that our statute contemplatesavoiding. &ence such a mere possession is not considered a disturbance othe public order.

ut to smo


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section ( o ct >o. 77, as amended by section ( o ct >o. 017, and rom thejudgment entered thereon appealed to this court, !here under properassignments o error he contends: (E that the complaint does not state actssu)cient to coner jurisdiction upon the court+ 0E that under the evidencethe trial court !as !ithout jurisdiction to hear and determine the case+ 3Ethat ct >o. 77 as amended is in violation o certain provisions o theConstitution o the ?nited 9tates, and void as applied to the acts o thiscase+ and 4E that the evidence is insu)cient to support the conviction.

he inormation alleges:

hat on and or many months prior to the 0d day o %ecember, (25D,

the said &. >. ull !as then and there master o a steam sailingvessel . ull, !hile master o said vessel,as aoresaid, on or about the 0d day o %ecember, (25D, did then andthere !illully, unla!ully, and !rongly carry, transport, and bring intothe port and city o Manila, aboard said vessel, rom the port ompieng, Formosa, si$ hundred and seventy'seven 811E head ocattle and carabaos, !ithout providing suitable means or securingsaid animals !hile in transit, so as to avoid cruelty and unnecessarysufering to the said animals, in this, to !it, that the said &. >. ull,master, as aoresaid, did then and there ail to provide stalls or said

animals so in transit and suitable means or trying and securing saidanimals in a proper manner, and did then and there cause some osaid animals to be tied by means o rings passed through their noses,and allo! and permit others to be transported loose in the hold andon the dec< o said vessel !ithout being tied or secured in stalls, andall !ithout bedding+ that by reason o the aoresaid neglect andailure o the accused to provide suitable means or securing saidanimals !hile so in transit, the noses o some o said animals !erecruelly torn, and many o said animals !ere tossed about upon thedeco. 017 o thePhilippine Commission.

9ection ( o ct >o. 77, !hich !ent into efect /anuary (, (25(, provides thatO

he o!ners or masters o steam, sailing, or other vessels, carrying ortransporting cattle, sheep, s!ine, or other animals, rom one port inthe Philippine Islands to another, or rom any oreign port to any port!ithin the Philippine Islands, shall carry !ith them, upon the vesselscarrying such animals, su)cient orage and resh !ater to provide orthe suitable sustenance o such animals during the ordinary periodoccupied by the vessel in passage rom the port o shipment to theport o debar


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ofenses or crime committed on the high seas or !ithin the territorial !aterso any other country, but !hen she came !ithin 3 miles o a line dra!n romthe headlines !hich embrace the entrance to Manila ay, she !as !ithinterritorial !aters, and a ne! set o principles became applicable. Kheaton,Int. Ha! %ana ed.E, p. 077, note (57+ on=ls, He %roit Int., sec 425 et seq.+Hatour, Ha Mer er., ch. (.E he ship and her cre! !ere then subject to thejurisdiction o the territorial sovereign subject through the proper politicalagency. his ofense !as committed !ithin territorial !aters. From the line!hich determines these !aters the Standardmust have traveled at least 07miles beore she came to anchor. %uring that part o her voyage the violationo the statue continued, and as ar as the jurisdiction o the court is

concerned, it is immaterial that the same conditions may have e$isted !hilethe vessel !as on the high seas. he ofense, assuming that it originated atthe port o departure in Formosa, !as a continuing one, and every elementnecessary to constitute it e$isted during the voyage across the territorial!aters. he completed orbidden act !as done !ithin merican !aters, andthe court thereore had jurisdiction over the subject'matter o the ofense andthe person o the ofender.

he ofense then !as thus committed !ithin the territorial jurisdiction o thecourt, but the objection to the jurisdiction raises the urther 6uestion !hetherthat jurisdiction is restricted by the act o the nationality o the ship. #very.#very state has complete control and jurisdiction over its territorial !aters.ccording to strict legal right, even public vessels may not enter the ports oa riendly po!er !ithout permission, but it is no! conceded that in theabsence o a prohibition such ports are considered as open to the public shipo all riendly po!ers. he e$emption o such vessels rom local jurisdiction!hile !ithin such !aters !as not established until !ithin comparativelyrecent times. In (124, ttorney'eneral radord, and in (128 ttorney'eneral Hee, rendered opinions to the efect that "the la!s o nations investthe commander o a oreign ship o !ar !ith no e$emption rom thejurisdiction o the country into !hich he comes." (, Ap. ?.9. ttys. en., 48,D1.E his theory !as also supported by Hord 9to!ell in an opinion given byhim to the ritish overnment as late as (D05. In the leading case o the9chooner E/c%ane vs. McFadden 1 Cranch ?.9.E, ((8, (44E, Chie /usticeMarshall said that the implied license under !hich such vessels enter ariendly port may reasonably be construed as "containing e$emption rom thejurisdiction o the sovereign !ithin !hose territory she claims the rights o

hospitality." he principle !as accepted by the eneva rbitration ribunal,!hich announced that "the priviledge o e$territoriality accorded to vessels o!ar has been admitted in the la! o nations+ not as an absolute right, butsolely as a proceeding ounded on the principle o courtesy and mutualdeerence bet!een nations."0 Moore, Int. Ha! %ig., secs. 070 and 074+ &all, Int. Ha!, sec. 77+ aylor, Int.Ha!, sec. 078+ Artolan, %ip de la Mer, 0. C.U.E

9uch vessels are thereore permitted during times o peace to come and goreely. Hocal o)cial e$ercise but little control over their actions, and ofensescommitted by their cre! are justiciable by their o!n o)cers acting under thela!s to !hich they primarily o!e allegiance. his limitation upon the generalprinciple o territorial sovereignty is based entirely upon comity andconvenience, and =nds its justi=cation in the act that e$perience sho!s that

are essential to the health, order, and !ell'being o the port. ut comity andconvenience does not re6uire the e$tension o the same degree o e$emptionto merchant vessels. here are t!o !ell'de=ned theories as to e$tent o theimmunities ordinarily granted to them, ccording to the French theory andpractice, matters happening on board a merchant ship !hich do not concernthe tran6uillity o the port or persons oreign to the cre!, are justiciable onlyby the court o the country to !hich the vessel belongs. he French courtsthereore claim e$clusive jurisdiction over crimes committed on board Frenchmerchant vessels in oreign ports by one member o the cre! againstanother. 9ee on=ls, He %roit Int. 6uat. ed.E, secs. 804'80D+ Martens, He%roit Int., tome 0, pp. 33D, 332+ Artolan, %ip. de la Mer, tit. (, p. 020+ Masse,

%roit Int., tome 0, p. 83.E 9uch jurisdiction has never been admitted or claimby reat ritain as a right, alth

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Conflict of Laws Cases 3