Conflict of Laws Updated

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CONFLICT OF LAWS 2012-2013

Contents

A. PRELIMINARY CONSIDERATIONS............................................................................................................................ 5

THE HOME INSURANCE COMPANY v.EASTERN SHIPPING LINES.................................................................... 5

FIRST PHILIPPINE INTERNATIONAL BANK v.CA .................................................................................................. 6

MCGEE v.INTERNATIONAL INSURANCE CO.......................................................................................................... 7

VALMONTE v.ALCALA ................................................................................................................................................. 8

B. JURISDICTION ............................................................................................................................................................. 10

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v.ARABIAN AMERICAN OIL COMPANY................. 10

SMALL v.UNITED STATES ......................................................................................................................................... 12

CORAZON C. SIM v.NATIONAL LABOR RELATIONS COMMISSION and EQUITABLE PCI-BANK................. 13

MICROSOFT CORP. v.AT&T CORP. ........................................................................................................................... 15

BMW OF NORTH AMERICA, INC. v. GORE .............................................................................................................. 17

DOUGLAS SPECTOR, et al., PETITIONERS v. NORWEGIAN CRUISE LINE LTD................................................ 18

PENNOYER v.NEFF .................................................................................................................................................... 19

NORTHWEST ORIENT AIRLINES INC. v.COURT OF APPEALS ........................................................................... 20

ASIAVEST LIMITED vs. CA ......................................................................................................................................... 21

BANCO DO BRASIL vs. THE COURT OF APPEALS ................................................................................................. 22

REGNER vs. LOGARTA ............................................................................................................................................... 23

NM ROTHSCHILD AND SONS vs. LEPANTO ........................................................................................................... 23

INTERNATIONAL SHOE v.STATE OF WASHINGTON.......................................................................................... 24

SHAFFER v.HEITNER, 433 U.S. 186 (1977) [Marshall, J.] ............................................................................................. 25

KULKO v.CALIFORNIA SUPERIOR COURT, 436 U.S. 84 (1978) [Marshall, J.] .......................................................... 26

BURNHAM v.SUPERIOR COURT OF CAL., MARIN COUNTY, 495 U.S. 604 (1990) [Scalia, J.]................................ 28

WORLD-WIDE VOLKSWAGEN CORP. ET AL. v.WOODSON, DISTRICT JUDGE OF CREEK COUNTY,

OKLAHOMA, ET. AL. .................................................................................................................................................. 28

ASAHI METAL INDUSTRY CO., LTD. v.SUPERIOR COURT OF CALIFORNIA, SOLANO COUNTY (CHENG

SHIN RUBBER INDUSTRIAL CO., LTD., REAL PARTY IN INTEREST) ................................................................. 29

INSURANCE CORPORATION OF IRELAND, LTD. v.COMPAGNIE DES BAUXITES DE GUINEE.................. 30

VOLKSWAGENWERK AKTIENGESELLSCHAFT v. SCHLUNK, ADMINISTRATOR OF THE ESTATES OF

SCHLUNK ET AL. ......................................................................................................................................................... 31

SOCIETE NATIONALE INDUSTRIELLE AEROSPATIALE v.UNITED STATES DISTRICT COURT.................. 32

INTEL CORP. v.ADVANCED MICRO DEVICES, INC. ............................................................................................. 33

DULAY v. DULAY......................................................................................................................................................... 34

NAVIDA v.DIZON JR .................................................................................................................................................. 35

C. FORUM NON CONVENIENS ..................................................................................................................................... 36

GULF OIL CORP.,petitioner-defendant, v.GILBERT, respondent-plaintiff,.............................................................................. 36

PIPER AIRCRAFT CO.,petitioner, v.REYNO, respondent, ................................................................................................. 37

SINOCHEM INTERNATIONAL CO. LTD. v.MALAYSIA INTERNATIONAL SHIPPING..................................... 38

PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, AND ATHONA

HOLDINGS, N.V.,petitioners, v.THE HONORABLE COURT OF APPEALS, 1488, Inc., Drago Daic, Ventura O. Ducat,

Precioso R. Perlas, and William H. Craig, respondents. ......................................................................................................... 40

THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD.,petitioners, v.NATIONAL LABOR RELATIONS

COMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO G. SANTOS, respondents................................ 41


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UNIVERSITYOFSANTOTOMAS

Facultad de Derecho Civil

BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD.,petitioners, v.COURT OF

APPEALS, HON. MANUEL PADOLINA, EDUARDO LITONJUA, SR., and AURELIO K. LITONJUA,

JR., respondents. .................................................................................................................................................................. 42

CRESCENT PETROLEUM, LTD., Petitioner,v.M/V "LOK MAHESHWARI," THE SHIPPING CORPORATION OF

INDIA, and PORTSERV LIMITED and/or TRANSMAR SHIPPING, INC., Respondents............................................... 43

D. CHOICE, ASCERTAINMENT AND APPLICATION OF FOREIGN LAW.............................................................. 43

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., petitioners, v.MINORU

KITAMURA, respondent. ................................................................................................................................................... 43

NORSE-MANAGEMENT CO. v. NATIONAL SEAMEN BOARD ............................................................................. 44

EDI-STAFFBUILDERS INTERNATIONAL INC. v. NLRC ........................................................................................ 44

HEIRS OF DECEASED SPOUSES ARCILLA v. TEODORO ...................................................................................... 44

WILDVALLEY SHIPPING CO v. CA ........................................................................................................................... 44

DEUTSCHE GESELLSCHAFT FR TECHNISCHE ZUSAMMENARBEIT v.COURT OF APPEALS.................... 44

CADALIN v.POEAS ADMINISTRATOR.................................................................................................................... 46

HOME INSURANCE CO. v.DICK............................................................................................................................... 47

ALLSTATE INS. CO. v.HAGUE ................................................................................................................................... 49

PHILIPS PETROLEUM COMPANY, v.SHUTTS, et al. ................................................................................................. 50

SAUDI ARABIAN AIRLINES v. COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A.

ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City......................................... 52

E. NATIONALITY AND DOMICILE .............................................................................................................................. 54

JUAN GALLANOSA FRIVALDO v.COMMISSION ON ELECTIONS AND THE LEAGUE OF MUNICIPALITIES,SORSOGON CHAPTER, HEREIN REPRESENTED BY ITS PRESIDENT, SALVADOR NEE ESTUYE............... 54

ERNESTO S. MERCADO v.EDUARDO BARRIOS MANZANO and the COMMISSION ON ELECTIONS........... 56

CIRILO R. VALLESv.COMMISSION ON ELECTIONS and ROSALIND YBASCO LOPEZ.................................. 58

DJUMANTAN v. HON. ANDREA D. DOMINGO, COMMISSIONER OF THE BOARD OF IMMIGRATION,

HON. REGINO R. SANTIAGO and HON. JORGE V.SARMIENTO, COMMISSIONERS BUREAU OF

IMMIGRATION AND DEPORTATION ..................................................................................................................... 60

ANTONIO BENGSON III, v.HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and TEODORO C.

CRUZ ............................................................................................................................................................................. 61

TUAN ANH NGUYEN, et al. v. IMMIGRATION AND NATURALIZATION SERVICE........................................... 63

SCHNEIDER v.RUSK ................................................................................................................................................... 66

TROP v.DULLES ........................................................................................................................................................... 66

AASJS (ADVOCATES AND ADHERENTS OF SOCIAL JUSTICE FOR SCHOOL TEACHERS AND ALLIED

WORKERS) MEMBER - HECTOR GUMANGAN CALILUNG, Petitioner, v. THE HONORABLE SIMEON

DATUMANONG, in his official capacity as the Secretary of Justice,Respondent............................................................. 68

ATTY. ROMULO B. MACALINTAL,petitioner, vs. COMMISSION ON ELECTIONS, HON. ALBERTO ROMULO, in

his official capacity as Executive Secretary, and HON. EMILIA T. BONCODIN, Secretary of the Department of Budget

and Management, respondents. ............................................................................................................................................ 69

LOIDA NICOLAS-LEWIS, GREGORIO B. MACABENTA, ALEJANDRO A. ESCLAMADO, ARMANDO B.

HEREDIA, REUBEN S. SEGURITAN, ERIC LACHICA FURBEYRE, TERESITA A. CRUZ, JOSEFINA OPENA

DISTERHOFT, MERCEDES V.OPENA, CORNELIO R. NATIVIDAD, EVELYN D. NATIVIDAD, Petitioners -

versus - COMMISSION ON ELECTIONS, ................................................................................................................... 72

EUSEBIO EUGENIO K. LOPEZ, petitioner, -versus- COMELEC and Tessie Villanueva, respondents......................... 73

F. MARRIAGE, DIVORCE AND OTHER ENCOUNTERS ............................................................................................ 74


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ALICE REYES VAN DORN, petitioner, v.HON. MANUEL V.ROMILLO, JR., as Presiding Judge of Branch CX,

Regional Trial Court of the National Capital Region Pasay City and RICHARD UPTON respondents............................. 74

FE D. QUITA,petitioner, v.COURT OF APPEALS and BLANDINA DANDAN, respondents.......................................... 74

REPUBLIC OF THE PHILIPPINES v.CRASUS IYOY................................................................................................ 75

REPUBLIC OF THE PHILIPPINES v.CIPRIANO ORBECIDO III ............................................................................ 76

GERBERT CORPUZ v.DAISYLYN TIROL STO. TOMAS and The SOLICITOR GENERAL................................... 77

MEROPE ENRIQUEZ VDA. DE CATALAN v.LOUELLA CATALAN-LEE............................................................ 79

IMELDA MANALAYSAY PILAPIL, petitioner, v.HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge

of the Regional Trial Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the City Fiscal of Manila;

and ERICH EKKEHARD GEILING, respondents ........................................................................................................ 80

GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, v.REDERICK A. RECIO, respondent.................. 81

ELMAR O. PEREZ, Petitioner, v.COURT OF APPEALS, Fifth Division, TRISTAN A. CATINDIG and LILY

GOMEZ-CATINDIG, Respondents ............................................................................................................................... 82

WILLIAMS V NORTH CAROLINA (1942) ................................................................................................................... 83

WILLIAMS v. NORTH CAROLINA.............................................................................................................................. 84

CHEESMAN v. IAC ....................................................................................................................................................... 84

MULLER v. MULLER.................................................................................................................................................... 84

HULST v. PR BUILDERS, INC. ..................................................................................................................................... 84

G. CONTRACTS ................................................................................................................................................................ 84

THE BREMEN v.ZAPATA OFF-SHORE CO. ............................................................................................................. 84

PAKISTAN INTERNATIONAL AIRLINES CORPORATION v.HON. BLAS F. OPLE............................................ 85

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA/AMERICAN INTERNATIONAL

UNDERWRITER (PHIL.) INC. v.STOLT-NIELSEN PHILIPPINES, INC.................................................................. 86

SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA v.HONORABLE COURT OF APPEALS and

TRANSWORLD AIRLINES, INC. ................................................................................................................................. 87

PHILIPPINE AIRLINES, INC.v.COURT OF APPEALS AND GILDA C. MEJIA...................................................... 88

EDNA DIAGO LHUILLIERv.BRITISH AIRWAYS ..................................................................................................... 89

UNITED AIRLINESv.WILLIE J. UY............................................................................................................................ 91

H. TORTS ........................................................................................................................................................................... 92

JOSE FRANCISCO SOSAv.HUMBERTO ALVAREZ-MACHAIN, et al./UNITED STATES v.HUMBERTO

ALVAREZ-MACHAIN .................................................................................................................................................. 92

I. CORPORATIONS .......................................................................................................................................................... 94

ERIKS PTE. LTD.,petitioner, v.COURT OF APPEALS and DELFIN F. ENRIQUEZ, JR., respondents............................ 94

HUTCHISON PORTS PHILIPPINES LIMITED,petitioner, v. SUBIC BAY METROPOLITAN AUTHORITY,

INTERNATIONAL CONTAINER TERMINAL SERVICES INC., ROYAL PORT SERVICES INC. and the

EXECUTIVE SECRETARY,respondents. .......................................................................................................................... 96

MR HOLDINGS, LTD.,petitioner, v.SHERIFF CARLOS P. BAJAR, SHERIFF FERDINAND M. JANDUSAY,

SOLIDBANK CORPORATION, AND MARCOPPER MINING CORPORATION, respondents................................... 97

STEELCASE, INC.,petitioner,v.DESIGN INTERNATIONAL SELECTIONS, INC., respondent.................................... 98

J. PROPERTY RIGHTS AND INTERNATIONAL COMMERCE ................................................................................. 101

LAUREL v. GARCIA ................................................................................................................................................... 101

TANADA v. ANGARA ................................................................................................................................................ 101


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MIRPURI v. CA ............................................................................................................................................................ 101

K. DEATH, SUCCESSION AND ADMINISTRATION ................................................................................................. 101

VDA. DE PEREZ v. TOLETE ..................................................................................................................................... 101

REPUBLIC v. VILLARAMA, JR................................................................................................................................... 101

ANCHETA v. GUERSEY-DALAYGON ..................................................................................................................... 101

L. FOREIGN JUDGMENTS............................................................................................................................................ 101

PHILIPPINE INTERNATIONAL SHIPPING CORP v. CA ....................................................................................... 101

OIL AND NATURAL GAS COMMISSION v. CA ...................................................................................................... 101

PACIFIC ASIA OVERSEAS SHIPPING CORPORATION,petitionerv NATIONAL LABOR COMMISSION AND

TEODORO RANCES, respondents................................................................................................................................. 101

FAUNTLEROY v. LUM ............................................................................................................................................... 102

MILWAUKEE COUNTY, appelant v.M. E. WHITE CO., appellee .............................................................................. 103

D.H. OVERMYER CO. INC, OF OHIO ET AL. , petitionerv.FRICK CO. CERTITORARI TO THE COURT OF

APPELAS OF OHIO, LUCAS COUNTY,private respondent........................................................................................... 104

PHILIPPINE ALUMINUM WHEETS v. FASGI ENTERPRISE ................................................................................ 105

ASIAVEST MERCHANT BANKERS (M) BERHAD,petitioner, v.COURT OF APPEALS and PHILIPPINE

NATIONAL CONSTRUCTION CORPORATION,respondents. [G.R. No. 110263. July 20, 2001]................................ 105

IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE TERRITORY OF GUAM OF ATTY. LEON G.

MAQUERA [B.M. No. 793. July 30, 2004] .................................................................................................................... 107

ZOILO ANTONIO VELEZ v. ATTY. LEONARD S. DE VERA............................................................................. 109

PRISCILLA C. MIJARES, LORETTA ANN P. ROSALES, HILDA B. NARCISO, SR. MARIANI DIMARANAN,SFIC, and JOEL C. LAMANGAN in their behalf and on behalf of the Class Plaintiffs in Class Action No. MDL 840,

United States District Court of Hawaii, Petitioner, v.HON. SANTIAGO JAVIER RANADA, in his capacity as Presiding

Judge of Branch 137, Regional Trial Court, Makati City, and the ESTATE OF FERDINAND E. MARCOS, through its

court appointed legal representatives in Class Action MDL 840, United States District Court of Hawaii, namely: Imelda R.

Marcos and Ferdinand Marcos, Jr., Respondents. [April 12, 2005] 111

KOREA TECHNOLOGIES CO., LTD., Petitioner, v.HON.ALBERTO A. LERMA, in his capacity as Presiding Judge

of Branch 256 of Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING

CORPORATION,Respondents. 114


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A. PRELIMINARY CONSIDERATIONS

THE HOME INSURANCE COMPANY v.EASTERN SHIPPING LINES

The Home Insurance Company v.Nedlloyd Lijnen; Columbian Philippines Inc

Questioned in these consolidated petitions for review on certiorari are the decisions of the Court of First Instance

of Manila, Branch XVII, dismissing the complaints in Civil case no. 71983 and in Civil case no. 71694, on the

ground that plaintiff therein, now appellant, had failed to prove its capacity to sue.

L-34382

On Jan 13, 1967, S. Kaijita& Co., on behalf of Atlas Consolidated Mining & Development Corporation, shipped the

on board the SS Eastern Jupiter from Osaka, Japan, coils of black Hot rolled Copper white rods. The saidVESSEL is owned and operated by defendant EASTERN SHIPPING LINES (CARRIER). Phelps Dodge Copper

Products Corporation of the Philippines was the COSIGNEE. The Shipment was insured under plaintiff HOME

INSURANCE COMPANY. Upon arrival, it was discovered that the shipment was in bad order. For the loss and

damages, HOME INSURANCE paid the consignee under its insurance policy. HOME INSURANCE made

demands for payment against the CARRIER but Eastern Shipping Lines refused to pay.

L-34383

On Dec. 22, 1966, Hansa Transport Kontor shipped 30 packages of service parts of farm equipment on board the

VESSEL, SS NEDER RIJN, owned by defendant Columbian Philippines Inc, (CARRIER). International Harvester

Macleod Inc was the consignee. The shipment was insured by HOME INSURANCE COMPANY. The consignee

received the 29 packages with 9 pages in bad order. For the short delivery of 1 pacjage and missing items in 5 other

packages, HOME INSURANCE paid the CONSIGNEE under its Insurance Cargo Policy. Demands were madeon defendants CARRIER and CONSIGNEE for reimbursement but they failed and refused to pay the same.

In both casesm petitioner-appellant made the following averment regarding its capacity to sue:

The plaintiff is a foreign insurance company duly authorized to do business in the Philippines through its agent,

Victor H. Bello.

In L-34382, Eastern Shipping Lines alleged in its answer that Home insurance company has no capacity to sue for

lack of knowledge or information sufficient to form a belief as to the truth thereof.

In L-34383, N.V. Nedlloyd Linjen, Columbian Philippines denied Home Insurances capacity to sue for lack ofknowledge or information sufficient to form a belief as to the truth thereof.

The trial court dismissed Home Insurances complaints in the two cases on the same ground that it failed to proveits capacity to sue. It reasoned as follows:

A suing foreign corporation, like plaintiff, has to plead affirmatively and prove either that the transactionupon which it bases its complaint is an isolated one, or that it is licensed to transact business in this country, failing

which, it will be deemed that it has no valid cause of action... IT has to be held that plaintiff is doing business in the

Philippines. Consequently, it must have a license under Sec. 68 of the Corporation Law before it can be allowed to

sue

ISSUE:Whether plaintiff Home Insurance Company has capacity to sue

HELD:Petitioner was, telling the truth when it averred in its complaints that it was a foreign insurance company

duly authorized to business in the Philippines through its agent Mr. Victor Bello. However, the insurance contracts

which formed the basis of these cases were executed, the petitioner had not yet secured the necessary licenses and

authority.


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To repeat, the objective of the law was to subject the foreign corporation to the jurisdiction of our courts. The

Corporation law must be given a reasonable, not an unduly harsh, interpretation which does not hamper the

development of trade relations and which fosters friendly commercial intercourse among countries.

There is no question that the contracts are enforceable. The requirement of registration affects only the remedy.

The prohibition against doing business without first securing a license is now given a penal sanction which is alsoapplicable to other violations of the Corporation Code under the general provisions of Sec 144 of the Code.

Our ruling that the lack of capacity at the time of the execution of contracts were cured by the subsequent

registrations is also strengthened by the procedural aspects of these cases. We find general denials inadequate to

attack foreign corporations lack of capacity to sue in the light of positive averment that it is authorized to do so.

At the very least, the private respondents should have stated particulars in their answers upon which a specific

denial of the petitioners capacity to sue could have been based or which could have supported its denial for lack ofknowledge.

Wherefore, petitions are hereby granted.

oOo

FIRST PHILIPPINE INTERNATIONAL BANK v.CA

Producer Bank of the Philippines acquired six parcels of land with a total area of 101 hectares located at Don Jose,

Sta. Rosa, Laguna. The property used to be owned by BYME Investment and Development Corporation which had

them mortgaged with the bank as collateral fora loan. The original plaintiffs, Demetrio Demetria and Jose O.

Janolo, wanted to purchase the property and thus initiated negotiations with Mercurio Rivera, the manager of

Producers Bank, for that purpose.

Defendant bank, through defendant Rivera, acknowledged receipt of the negotiation letter and stated, in its

communication of December 2, 1987 that said letter has been referred x xx to the office of our Conservator forproper disposition. However, no response came from the Acting Conse rvator. endants through ActingConservator Encarnacion repudiated the authority of defendant Rivera and claimed that his dealings with the

plaintiffs, particularly his counter-offer of P5.5 Million are unauthorized or illegal.

Plaintiffs filed a suit for specific performance with damages against the bank, its Manager Rivera and Acting

Conservator Encarnacion. The basis of the suit was that the transaction had with the bank resulted in a perfected

contract of sale. The defendants took the position that there was no such perfected sale because the defendant

Rivera is not authorized to sell the property, and that there was no meeting of the minds as to the price.

On July 11, 1992, during the pendency of the proceedings in the Court of Appeals, Henry Co and several other

stockholders of the Bank, through counsel Angara Abello Concepcion Regala and Cruz, filed an action (hereafter,

the Second Case) -purportedly a derivative suit - with the Regional Trial Court of Makati, Branch 134, docketedas Civil Case No. 92-1606, against Encarnacion, Demetria and Janolo to declare any perfected sale of the propertyas unenforceable and to stop Ejercito from enforcing or implementing the sale.

ISSUE:Whether there was forum shopping on the part of Petitioner Bank

RULING:We rule for private respondent

To begin with, forum-shopping originated as a concept in private international law,[12]where non-residentlitigants are given the option to choose the forum or place wherein to bring their suit for various reasons or excuses,including to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or toselect a more friendly venue. To combat these less than honorable excuses, the principle offorum non convenienswasdeveloped whereby a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not themost convenient or available forum and the parties are no t precluded from seeking remedies elsewhere.
http://sc.judiciary.gov.ph/jurisprudence/1996/jan1996/115849.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/1996/jan1996/115849.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/1996/jan1996/115849.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/1996/jan1996/115849.htm#_edn12


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In this light, Blacks Law Dictionary[13]says that forum-shopping occurs when a party attempts to have hisaction tried in a particular court or jurisdiction where he feels he will receive the most favorable judgment orverdict. Hence, according to Words and Phrases,[14]a litigant is open to the charge of forum shopping wheneverhe chooses a forum with slight connection to factual circumstances surrounding his suit, and litigants should beencouraged to attempt to settle their differences without imposing undue expense and vexatious situations on thecourts.

In the Philippines, forum-shopping has acquired a connotation encompassing not only a choice of venues, as itwas originally understood in conflicts of laws, but also to a choice of remedies. As to the first (choice of venues),the Rules of Court, for example, allow a plaintiff to commence personal actions where the defendant or any of thedefendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of theplaintiff (Rule 4, Sec. 2 [b]). As to remedies, aggrieved parties, for example, are given a choice of pursuing civilliabilities independently of the criminal, arising from the same set of facts. A passenger of a public utility vehicleinvolved in a vehicular accident may sue on culpa contractual, culpa aquiliana or culpa criminal - each remedy beingavailable independently of the others - although he cannot recover more than once.

Applying the foregoing principles in the case before us and comparing it with the Second Case, it is obviousthat there exist identity of parties or interests represented, identity of rights or causes and identity of reliefs sought.

Very simply stated, the original complaint in the court a quowhich gave rise to the instant petition was filed bythe buyer (herein private respondent and his predecessors-in-interest) against the seller (herein petitioners) toenforce the alleged perfected sale of real estate. On the other hand, the complaint[21]in the Second Case seeks todeclare such purported sale involving the same real property as unenforceable as against the Bank, which is thepetitioner herein. In other words, in the Second Case, the majority stockholders, in representation of the Bank, areseeking to accomplish what the Bank itself failed to do in the original case in the trial court. In brief, the objective orthe relief being sought, though worded differently, is the same, namely, to enable the petitioner Bank to escape fromthe obligation to sell the property to respondent.

oOo

MCGEE v.INTERNATIONAL INSURANCE CO.

In 1944, Lowell Franklin, a resident of California, bought a life insurance policy from an Arizona corporation,

naming petitioner as beneficiary. Later, respondent, a Texas corporation, agreed to assume the insurance obligations

of the Arizona corporation, and mailed a reinsurance certificate to petitioner's son in California, offering to insure

him in accordance with his policy.

In 1950, Franklin died. His mother, the beneficiary, notified the insurance company of his death. Respondent

refused to pay, claiming that Franklin committed suicide. McGee obtained judgment against the insurance company

in California state court and attempted to enforce it in Texas. Texas state court refused to enforce the California

judgment holding it was void under the 14thamendment (lack of jurisdiction).

ISSUE:Whether the insurance company , a non-resident corporation, is subject to jurisdiction in a state where it

never had any office or agent, merely because it was a party to contract with a resident of the state

RULING:Turning to this case we think it apparent that the Due Process Clause did not preclude the California

court from entering a judgment binding on respondent. It is sufficient for purposes of due process that the suit was

based on a contract which had substantial connection with that State. Cf. Hess v.Pawloski,274 U.S. 352 ;Henry L.

Doherty & Co. v.Goodman,294 U.S. 623 ; Pennoyer v. Neff,95 U.S. 714, 735 .2The contract was delivered in

California, the premiums were mailed from there and the insured was a resident of that State when he died. It

cannot be denied that California has a manifest interest in providing effective means of redress for its residents

when their insurers refuse to pay claims. These residents would be at a severe disadvantage if they were forced to

follow the insurance company to a distant State in order to hold it legally accountable. When claims were small or

moderate individual claimants frequently could not afford the cost of bringing an action in a foreign forum - thus in

effect making the company judgment proof. Often the crucial witnesses - as here on the company's defense of

suicide - will be found in the insured's locality. [355 U.S. 220, 224] Of course there may be inconvenience to the

insurer if it is held amenable to suit in California where it had this contract but certainly nothing which amounts to a

denial of due process. Cf. Travelers Health Assn. v.Virginia ex rel. State Corporation Comm'n,339 U.S. 643 .There
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is no contention that respondent did not have adequate notice of the suit or sufficient time to prepare its defenses

and appear.

The California statute became law in 1949, after respondent had entered into the agreement with Franklin to assume

Empire Mutual's obligation to him. Respondent contends that application of the statute to this existing contract

improperly impairs the obligation of the contract. We believe that contention is devoid of merit. The statute wasremedial, in the purest sense of that term, and neither enlarged nor impaired respondent's substantive rights or

obligations under the contract. It did nothing more than to provide petitioner with a California forum to enforce

whatever substantive rights she might have against respondent. At the same time respondent was given a reasonable

time to appear and defend on the merits after being notified of the suit. Under such circumstances it had no vested

right not to be sued in California. Cf. Bernheimer v.Converse,206 U.S. 516 ;National Surety Co. v.Architectural

Decorating Co.,226 U.S. 276 ;Funkhouser v.J. B. Preston Co.,290 U.S. 163 .

oOo

VALMONTE v.ALCALA

The spouses Alfredo Valmonte alleged that they are the unregistered owners of Apartment no.1411 located in Paco,

Manila. Since the petitioners were migrating to the United States, they offered the apartment for lease to respondent

Clarita Alcala. The lease contract was consummated by the Alcalas payment of two months rental. Alcalassubsequent failure to pay the agreen rentals made Valmonte to file a complaint for unlawful detainer against Alcala.

Since the Valmontes are already US residents at that time, they signed the required Verification/Certification of

non-forum shoppin of their complaint before the notary public in the state of Washington, such was authenticated

by the Philippine Consulate General in San Francisco.

Alcala contended that the Valmontes have no cause of action against her, that she was already the rightful owner of

the apartment but virtue of the sale between her and the Valmontes, as evidenced by the Memorandum of

Agreement.

MTC ruled in favor of the petitioners. RTC reversed.

The petitioners responded to the reversal by filing a petition for review. On the same date, they also formally

manifested with the CA that- to comply with the verification adn certification requirements of the Rules of Court-

they were in the meantime submitting a photostatic copy of the Verification/certification, as the original was still in

the Philippine Consulate in San Francisco for authentication. They promised to submit the original as soon as the

consulate completed the authentication process.

The CA denied the petition. The CA reasoned that the petitioners could not have actually read and understood the

petition or attested to the truth of the contents thereof because at the time they executed the verification, the

petition was still inexistent. The verification was said to be executed on March 17, 2005 and the petition was dated

March 31, 2005.

ISSUE:Whether or not the variance between the dates of verification/certification that the Valmontes executed

abroad and the CA Petition conclude that they did not read the petition before it was filed in Court

RULING:Generally, a pleading is not required to be verified unless required by law or by the Rules of Court. One

such requirement is found in Section 1 of Rule 42 which requires a party appealing from a decision of the RTC

rendered in the exercise of its appellate jurisdiction to file averified petition for reviewwith the CA.

Verification, when required, is intended to secure an assurance that the allegations of a pleading are true and correct;

are not speculative or merely imagined; and have been made in good faith. To achieve this purpose, the verification

of a pleading is made through an affidavit or sworn statement confirming that the affiant has read the pleading

whose allegations are true and correct of the affiant's personal knowledge or based on authentic records.

Apparently, the CA concluded that no real verification, as above required, had been undertaken since the CA
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Petition was dated March 31, 2005 while the Verification/Certification carried an earlier date - March 17, 2005; the

petition "was still inexistent"when the Verification/Certification was executed.

We find this conclusion erroneous for the following reasons:

First, the variance in dates does not necessarily contradict the categorical declaration made by petitioners in their

affidavit that they read and understood the contentsof the pleading. The petitioners' claim in this regard is that they

read a copy of the CA Petition through an electronic mail (e-mail) sent to them by their lawyers. We find this claim,

under the circumstances more fully discussed below, to be a reasonable explanation of why a variance in dates

existed. We should not lose sight of the reality that pleadings are prepared and signed by the counsel at the

instructions of the client; the latter merely provides the supporting facts of the pleading and, as needed, verifies that

the allegations are true and correct. In short, the pleading and the verification are prepared separately and a variance

in their dates is a matter that may satisfactorily be explained. To demand the litigants to read the very same

documentthat is to be filed before the courts is too rigorous a requirement; what the Rules require is for a party to

read the contentsof a pleading without any specific requirement on the form or manner in which the reading is to be

done. That a client may read the contents of a pleading without seeing the same pleading to be actually filed with the

courtis, in these days of e-mailsand other technological advances in communication, not an explanation that is hard

to believe. Apparently in this case, counsel sent a copy of the draft petition by e-mailand finalized it as soon as it

was approved by the petitioners. The latter, on the other hand, complied with their end not only by approving the

terms of the petition, but also by sending a copy of their sworn statement (as yet unauthenticated) in order to file

the petition soonest, thereby complying with the required timeliness for the filing of the petition. To our mind,

beyond the manner of these exchanges, what is important is that efforts were made to satisfy the objective of the

Rule - to ensure good faith and veracity in the allegations of a pleading - thereby allowing the courts to act on the

case with reasonable certainty that the petitioners' real positions have been pleaded.

Second,the "circumstances" we mentioned above refer to the petitioners' unique situation as parties residing overseas

who are litigating locally through their local counsel. While these overseas litigants are not excused from complying

with our Rules such as the strict observance of the periods for appeal and the verification requirement, we must

take into account the attendant realities brought into play because they are suing from overseas or vialong distance

communications with their counsel. In the verification requirement, there are added formalities required for the

acceptance in the Philippines of statements sworn overseas before foreign notaries; we require their authentication

by our consulates. This is a process whose completion time may vary depending, among others, on various factors

such as the location of the requesting party from the consulate; the peculiarities of foreign laws on notaries; the

volume of transactions in a consulate, noting particularly the time of year when the authentication is requested; and

the mode of sending the authenticated documents to the Philippines. Apparently compelled by one or a

combination of these reasons, the petitioners in fact manifested when they filed their petition (on March 31, 2005)

that they were submitting a photostatic copy of the Verification/Certification executed in Washington on March 17,

2005 since the original was still with the Philippine Consulate in San Francisco for authentication. We take judicial

notice that the petitioners' request for authentication coincided with the observance of the Holy Week - a traditional

period of prayer and holidays in the Philippines, for the Philippines' foreign embassies and consulates, and even for

Filipinos overseas. We find it significant that, conformably with their Manifestation, the petitioners' counsel filed

on April 8, 2005 the duly sworn and authenticated Verification as soon as counsel received it. Under these

circumstances, there is every reason for an equitable and relaxed application of the rules to the petitioners' situation.

Third,we discern utmost good faith on the part of the petitioners when they filed their Manifestation about their

problem, intent, and plan of compliance with the verification requirement. They in fact stated early on through this

Manifestation that their verification had been executed on March 17, 2005 in Washington, that is, at a date much

earlier than the filing of their petition and manifestation. Unfortunately, the CA failed to note the variance in dates

at the earliest opportunity; thus, the CA dismissed the petition on some other ground, only to hark back later on to


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the variance in dates in their reconsideration of the earlier dismissal. Given this good faith and the early disclosure,

it was basically unfair for the CA - who had earlier overlooked the variance in dates - to subsequently make this

ground the basis of yet another dismissal of the petition. The CA - after overlooking the variance in dates at the first

opportunity - should have at least asked for the petitioners' explanation on why the variance should not be an

additional ground for the dismissal of the petition, instead of reflecting in their order on reconsideration that it

could have granted the motion for reconsideration based on attachments already made, but there existed anotherreason - the variance in dates - for maintaining the dismissal of the petition.

Fourth,we note that most of the material allegations set forth by petitioners in their CA Petition are already in their

complaint for unlawful detainer filed before the MTC on April 26, 2002. Attached to the complaint was a

Verification/Certification dated March 18, 2002 (authenticated by the Philippine Consulate in San Francisco on

March 27, 2002) in which petitioners declared under oath that they had caused the preparation of the complaint

through their lawyers and had read and understood the allegations of the complaint. The material facts alleged in

the CA Petition are likewise stated in the records of the case, as part of the findings of facts made by the MTC and

the RTC. Verification as to the truth of these facts in the petition for review before the CA was, therefore, strictly a redundancy; itsfiling remained a necessity only because the Rules on the filing of a petition for review before the CA require it. This consideration

could have led to a more equitable treatment of the petitioners' failure to strictly comply with the Rules, additionally

justified by the fact that the failure to comply with the rules on verification is a formal rather than a jurisdictional defect.

In sum, we find sufficient justification to rule - under the circumstances of this case - that the CA committed a

reversible error when it dismissed the petition for failure to strictly follow the verification requirements. Stated

otherwise, we do not consider the variance between the dates as fatal to the petitioners' case because the variance

did not necessarily lead to the conclusion that no verification was made, or that the verification was false. More

importantly, the variance totally lost significance after the petitioners sent from the US and submitted to the CA therequired Verification/Certification in compliance with their previously manifested intent. As this Court noted in a

case where compliance with a certificate of non-forum shopping was at issue, the fact that the Rules require strict

compliance merely underscores its mandatory nature; it cannot be dispensed with or its requirements altogether

disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable

circumstances, as we find in this case

oOo

B. JURISDICTION

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v.ARABIAN AMERICAN OIL COMPANY499 U.S. 244 Nos. 89-1838, 89-1845 Decided March 26, 1991 U.S. Supreme Court

We assume that Congress legislates against the backdrop of the presumption against extraterritoriality. Therefore, unless there is "the

affirmative intention of the Congress clearly expressed," we must presume it "is primarily concerned with domestic conditions."

Petitioner Boureslan (Boureslan) is a naturalized United States citizen who was born in Lebanon. The respondents

are two Delaware corporations, Arabian. American Oil Company (Aramco), and its subsidiary, Aramco Service

Company (ASC). Aramco's principal place of business is Dhahran, Saudi Arabia, and it is licensed to do business in

Texas. ASC's principal place of business is Houston, Texas.

Boureslan was hired by ASC as a cost engineer in Houston. A year later, he was transferred, at his request, to workfor Aramco in Saudi Arabia. Boureslan remained with Aramco in Saudi Arabia until he was discharged in 1984.

After filing a charge of discrimination with the Equal Employment Opportunity Commission (EEOC), he instituted

this suit in the United States District Court for the Southern District of Texas against Aramco and ASC. He sought

relief under both state law and Title VII which prohibits various discriminatory employment practices based on an

individual's race, color, religion, sex, or national origin. of the Civil Rights Act of 1964 on the ground that he was

harassed and ultimately discharged by respondents on account of his race, religion, and national origin.


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Respondents filed a motion for summary judgment on the ground that the District Court lacked subject matter

jurisdiction over Boureslan's claim because the protections of Title VII do not extend to United States citizens

employed abroad by American employers. The District Court agreed, and dismissed Boureslan's Title VII claim; it

also dismissed his state law claims for lack of pendent jurisdiction, and entered final judgment in favor of

respondents. Both Boureslan and the EEOC petitioned for certiorari. The Court granted both petitions for

certiorari to resolve this important issue of statutory interpretation. Both parties concede, as they must, thatCongress has the authority to enforce its laws beyond the territorial boundaries of the United States. Boureslan and

the EEOC contend that the language of Title VII evinces a clearly expressed intent on behalf of Congress to

legislate extraterritorially. They rely principally on two provisions of the statute. First, petitioners argue that the

statute's definitions of the jurisdictional terms "employer" and "commerce" are sufficiently broad to include U.S.

firms that employ American citizens overseas. Second, they maintain that the statute's "alien exemption" clause, 42

U.S.C. 2000e-1, necessarily implies that Congress intended to protect American citizens from employment

discrimination abroad.

ISSUE:whether Title VII which prohibits various discriminatory employment practices based on an individual's

race, color, religion, sex, or national origin. of the Civil Rights Act of 1964 applies extraterritorially to regulate theemployment practices of United States employers who employ United States citizens abroad.

HELD:Petition DENIED

Title VII does not apply extraterritorially to regulate the employment practices of United States firms that employ

American citizens abroad. EEOC' evidence, while not totally lacking in probative value, falls short of demonstrating

the clearly expressed affirmative congressional intent that is required to overcome the well-established presumption

against statutory extraterritoriality. Pp. 499 U. S. 249-259.

(a) EEOC argue unpersuasively that Title VII's "broad jurisdictional language" -- which extends the Act's

protections to commerce "between a State and any place outside thereof" -- evinces a clear intent to legislateextraterritorially. The language relied on is ambiguous, does not speak directly to the question presented here, and

constitutes boilerplate language found in any number of congressional Acts, none of which have been held to apply

overseas. EEOC' argument also finds no support in this Court's decisions, which have repeatedly held that even

statutes containing broad language in their definitions of "commerce" that expressly refer to "foreign commerce" do

not apply abroad.

(b) EEOC also argue unpersuasively that Title VII's "alien exemption" clause -- which renders the statute

inapplicable "to an employer with respect to the employment of aliens outside any State" -- clearly manifests the

necessary congressional intent to cover employers of United States citizens working abroad. If EEOC were correct,

there would be no statutory basis for distinguishing between American employers and foreign employers. Absentclearer evidence of congressional intent, this Court is unwilling to ascribe to Congress a policy which would raise

difficult international law issues by imposing this country's employment discrimination regime upon foreign

corporations operating in foreign commerce. This conclusion is fortified by other factors suggesting a purely

domestic focus, including Title VII's failure even to mention foreign nations or proceedings, despite a number of

provisions indicating a concern that the sovereignty and laws of States not be unduly interfered with, and the Act's

failure to provide any mechanisms for its overseas enforcement. It is also reasonable to conclude that, had Congress

intended Title VII to apply overseas, it would have addressed the subject of conflicts with foreign laws and

procedures, as it did in amending the Age Discrimination in Employment Act of 1967 (ADEA) to apply abroad.

(c) Petitioners' contention that this Court should defer to the EEOC's position that Title VII applies abroad is

rejected. The EEOC's interpretation does not fare well under the deference standards set forth in General Electric

Co. v.Gilbert, 429 U. S. 125, 429 U. S. 140-146, since the interpretation has been neither contemporaneous with

Title VII's enactment nor consistent with an earlier contrary position enunciated by the EEOC closer to the date

the statute came into law, since the EEOC offers no basis in its experience for the change, and since the

interpretation lacks support in the statute's plain language. Although this Court does not wholly discount the

interpretation, it is of insufficient weight, even when considered in combination with petitioners' other arguments,

to overcome the presumption against extraterritorial application.


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(d) Congress' awareness of the need to make a clear statement that a statute applies overseas is amply demonstrated

by the numerous occasions on which it has legislated extraterritoriality, including its amendment of the ADEA.

Congress may similarly amend Title VII, and, in doing so, will be able to calibrate its provisions in a way that this

Court cannot.

We assume that Congress legislates against the backdrop of the presumption against extraterritoriality.Therefore, unless there is "the affirmative intention of the Congress clearly expressed," we must presume

it "is primarily concerned with domestic conditions."

Petitioners also contend that we should defer to the EEOC's consistently held position that Title VII applies

abroad. We conclude that petitioners' evidence, while not totally lacking in probative value, falls short of

demonstrating the affirmative congressional intent required to extend the protections of the Title VII

beyond our territorial borders.

oOo

SMALL v.UNITED STATESSUPREME COURT OF THE UNITED STATES April 26, 2005

Petitioner Small was convicted in a Japanese Court of trying to smuggle firearms and ammunition into that country.

He served five years in prison and then returned to the United States, where he bought a gun. Federal authorities

subsequently charged Small under 18 U.S.C. 922(g)(1), which forbids any person convicted in any court of acrime punishable by imprisonment for a term exceeding one year to possess any firearm. Small pleadedguilty while reserving the right to challenge his conviction on the ground that his earlier conviction, being foreign,

fell outside 922(g)(1)s scope. The Federal District Court and the Third Circuit rejected this argument.

ISSUE:Whether the phrase "convicted in any court" does not involve foreign convictions.

HELD:Petition GRANTED

Section 922(g)(1)s phrase convicted in any court encompasses only domestic, not foreign, convictions.

(a) In considering the scope of the phrase convicted in any court it is appropriate to assume that Congress haddomestic concerns in mind. This assumption is similar to the legal presumption that Congress ordinarily intends its

statutes to have domestic, not extraterritorial, application. The phrase convicted in any court describes onenecessary portion of the gun possession activity that is prohibited as a matter of domestic law. Moreover, becauseforeign convictions may include convictions for conduct that domestic laws would permit, e.g., for engaging in

economic conduct that our society might encourage, convictions from a legal system that are inconsistent with

American understanding of fairness, and convictions for conduct that domestic law punishes far less severely, thekey statutory phrase convicted in any court of, a crime punishable by imprisonment for a term exceeding one yearsomewhat less reliably identifies dangerous individuals for the purposes of U.S. law where foreign convictions,

rather than domestic convictions, are at issue. In addition, it is difficult to read the statute as asking judges or

prosecutors to refine its definitional distinctions where foreign convictions are at issue. To somehow weed out

inappropriate foreign convictions that meet the statutory definition is not consistent with the statutes language; it isnot easy for those not versed in foreign laws to accomplish; and it would leave those previously convicted in a

foreign court (say of economic crimes) uncertain about their legal obligations. These considerations provide a

convincing basis for applying the ordinary assumption about the reach of domestically oriented statutes here. Thus,

the Court assumes a congressional intent that the phrase convicted in any court applies do mestically, notextraterritorially, unless the statutory language, context, history, or purpose shows the contrary. Pp. 25.

(b) There is no convincing indication to the contrary here. The statutes language suggests no intent to reachbeyond domestic convictions. To the contrary, if read to include foreign convictions, the statutes language createsanomalies. For example, in creating an exception allowing gun possession despite a conviction for an antitrust or

business regulatory crime, 921(a)(20)(A) speaks of Federal or State antitrust or regulatory offenses. If the phraseconvicted in any court generally refers only to domestic convictions, this language causes no problem. But if


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the phrase includes foreign convictions, the words Federal or State prevent the exception from applying where aforeignantitrust or regulatory conviction is at issue. Such illustrative examples suggest that Congress did not

consider whether the generic phrase convicted in any court applies to foreign convictions. Moreover, the statuteslegislative history indicates no intent to reach beyond domestic convictions. Although the statutory purpose of

keeping guns from those likely to become a threat to society does offer some support for reading 922(g)(1) to

include foreign convictions, the likelihood that Congress, at best, paid no attention to the matter is reinforced by theempirical fact that, according to the Government, since 1968, there have fewer than a dozen instances in which

such a foreign conviction has served as a predicate for a felon-in-possession prosecution.

oOo

CORAZON C. SIM v.NATIONAL LABOR RELATIONS COMMISSION and EQUITABLE PCI-BANKG.R. No. 157376 2 October 2007 THIRD DIVISION AUSTRIA-MARTINEZ

It was wrong for the Labor Arbiter to rule that "labor relations system in the Philippines has no extra-territorial jurisdiction."

Under these provisions, it is clear that labor arbiters have original and exclusive jurisdiction over claims arising from employer-employeerelations, including termination disputes involving all workers, among whom are overseas Filipino workers.

Corazon Sim (Sim) filed a case for illegal dismissal with the Labor Arbiter, alleging that she was initially employed

by Equitable PCI-Bank (Equitable PCI) in 1990 as Italian Remittance Marketing Consultant to the Frankfurt

Representative Office. Eventually, she was promoted to Manager position, until September 1999, when she received

a letter from Remegio David -- the Senior Officer, European Head of PCIBank, and Managing Director of PCIB-

Europe -- informing her that she was being dismissed due to loss of trust and confidence based on alleged

mismanagement and misappropriation of funds.

Equitable PCI denied any employer-employee relationship between them, and sought the dismissal of the

complaint. The Labor Arbiter rendered its Decision dismissing the case for want of jurisdiction and/or lack ofmerit.1 According to the Labor Arbiter that:

at this juncture that the labor relations system in the Philippines has no extra-territorial jurisdiction. It is limited to the relationship

between labor and capital within the Philippines. Since complainant was hired and assigned in a foreign land, although by a Philippine

Corporation, it follows that the law that govern their relationship is the law of the place where the employment was executed and her place

of work or assignment. On this premise, the Italian law allegedly provides severance pay which was applied and extended to herein

complainant.

As can be gleaned from the foregoing, a further elucidation on the matter would be an exercise in futility. On

appeal, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's Decision and dismissed

petitioner's appeal for lack of merit. Hence, this case should be dismissed for want of jurisdiction.

ISSUE:Whether the NLRC has no jurisidiction over the complainant who was hired and assigned in a foreign land.


Assuming for the sake of argument that this Office has jurisdiction over this case, still, this Office is inclined to rule

in favor of the respondent.

Complainant, as General Manager is an employee whom the respondent company reposed its trust and confidence.

In other words, she held a position of trust. It is well-settled doctrine that the basic premise for dismissal on the

ground of loss of confidence is that the employee concerned holds a position of trust and confidence. (NationalSugar Refineries Corporation v.NLRC, 286 SCRA 478.)

Sim does not deny having withdrawn the amount of P3,000,000.00 lire from the bank's account. What Sim submits

is that she used said amount for the Radio Pilipinas sa Roma radio program of the company. Equitable PCI,

however, countered that at the time she withdrew said amount, the radio program was already off the air. Equitable

PCI is a managerial employee. Thus, loss of trust and confidence is a valid ground for her dismissal. The mere


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existence of a basis for believing that a managerial employee has breached the trust of the employer would suffice

for his/her dismissal.

[w]hen an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence,

she gives up some of the rigid guaranties available to ordinary workers. Infractions which if committed by others

would be overlooked or condoned or penalties mitigated may be visited with more severe disciplinary action. Acompany's resort to acts of self-defense would be more easily justified.

The Court notes, however, a palpable error in the Labor Arbiter's disposition of the case, which was affirmed by the

NLRC, with regard to the issue on jurisdiction. It was wrong for the Labor Arbiter to rule that "labor relations

system in the Philippines has no extra-territorial jurisdiction."

Article 217 of the Labor Code provides for the jurisdiction of the Labor Arbiter and the National Labor Relations

Commission, viz.:

ART. 217. Jurisdiction of Labor Arbiters and the Commission.(a) Except as otherwise provided under this Code the Labor

Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submissionof the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases

involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work

and other terms and conditions of employment;

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

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

lockouts; and

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from

employer-employee relations, including those of persons in domestic or household service, involving an amount of exceeding

five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

(b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

Moreover, Section 10 of Republic Act (R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of

1995,18 provides:

SECTION 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of theNational Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide,

within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee

relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims

for actual, moral, exemplary and other forms of damages.

Also, Section 62 of the Omnibus Rules and Regulations Implementing R.A. No. 804219 provides that the Labor

Arbiters of the NLRC shall have the original and exclusive jurisdiction to hear and decide all claims arising out of

employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas

deployment including claims for actual, moral, exemplary and other forms of damages, subject to the rules and

procedures of the NLRC.

Under these provisions, it is clear that labor arbiters have original and exclusive jurisdiction over claims arising from

employer-employee relations, including termination disputes involving all workers, among whom are overseas

Filipino workers.

In Philippine National Bank v.Cabansag, the Court pronounced:


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x x x Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and

social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the

basic public policy of the State to afford protection to labor, promote full employment, ensure equal work

opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. For the

State assures the basic rights of all workers to self-organization, collective bargaining, security of tenure, and just

and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section 18, Article II andSection 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil

Code which states that laws "which have for their object public order, public policy and good customs shall not be

rendered ineffective by laws or judgments promulgated, or by determination or conventions agreed upon in a

foreign country."21(Emphasis supplied)

oOo

MICROSOFT CORP. v.AT&T CORP.Decided April 30, 2007

This case concerns the applicability of 271(f) to computer software first sent from the United States to a foreignmanufacturer on a master disk, or by electronic transmission, then copied by the foreign recipient for installation on

computers made and sold abroad.

AT&T holds a patent on a computer used to digitally encode and compress recorded speech. Microsofts Windowsoperating system has the potential to infringe that patent because Windows incorporates software code that, when

installed, enables a computer to process speech in the manner claimed by the patent. Microsoft sells Windows to

foreign manufacturers who install the software onto the computers they sell. Microsoft sends each manufacturer a

master version of Windows, either on a disk or via encrypted electronic transmission, which the manufacturer uses

to generate copies. Those copies, not the master version sent by Microsoft, are installed on the foreign

manufacturers computers. The foreign-made computers are then sold to users abroad.

AT&T filed an infringement suit charging Microsoft with liability for the foreign installations of Windows. By

sending Windows to foreign manufacturers, AT&T contended, Microsoft supplie[d] from the United States,for combination abroad, components of AT&Ts patented speech-processing computer, and, accordingly, wasliable under 271(f). Microsoft responded that unincorporated software, because it is intangible information, cannot

be typed a component of an invention under 271(f). Microsoft also urged that the foreign -generated copies ofWindows actually installed abroad were not supplie[d] from the United States. Rejecting these responses, theDistrict Court held Microsoft liable under 271(f), and a divided Federal Circuit panel affirmed.

ISSUE:Whether no infringement occurs when a patented product is made and sold in another country.


Because Microsoft does not export from the United States the copies of Windows installed on the foreign-made

computers in question, Microsoft does not suppl[y] from the United States components of thosecomputers, and therefore is not liable under 271(f) as currently written.

(a) A copy of Windows, not Windows in the abstract, qualifies as a component under 271(f). Section 271(f)attaches liability to the supply abroad of the components of a patented invention, where such components areuncombined in whole or in part, in such manner as to actively induce the combination of such components.271(f)(1) (emphasis added).

The provision thus applies only to such components as are combined to form the patented invention at issuehere, AT&Ts speech-processing computer. Until expressed as a computer-readable copy, e.g., on a CD-ROM,Windowsindeed any software detached from an activating mediumremains uncombinable. It cannot beinserted into a CD-ROM drive or downloaded from the Internet; it cannot be installed or executed on a computer.

Abstract software code is an idea without physical embodiment, and as such, it does not match 271(f)scategorization: components amenable to combination.


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Windows abstracted from a tangible copy no doubt is informationa detailed set of instructionsand thus mightbe compared to a blueprint (or anything else containing design information). A blueprint may contain precise

instructions for the construction and combination of the components of a patented device, but it is not itself a

combinable component.

The fact that it is easy to encode softwares instructions onto a computer-readable medium does not counsel adifferent answer. The copy-producing step is what renders software a usable, combinable part of a computer; easyor not, the extra step is essential. Moreover, many tools may be used easily and inexpensively to generate the parts

of a device. Those tools are not, however, components of the devices in which the parts are incorporated, at leastnot under any ordinary understanding of the term component. Congress might have included within 271(f)scompass, for example, not only a patented inventions combinable components, but also information,instructions, or tools from which those components readily may be generated. It did not.

(b) Microsoft did not suppl[y] from the United States the foreign -made copies of Windows installed on thecomputers here involved. Under a conventional reading of 271(f)s text, those copies were supplie[d] fromoutside the United States. The Federal Circuit majority concluded, however, that for software components, the act

of copying is subsumed in the act of supplying. A master sent abroad, the majority observed, differs not at all from

exact copies, generated easily, inexpensively, and swiftly from the master. Hence, sending a single copy of software

abroad with the intent that it be replicated invokes 271(f) liability for the foreign-made copies.

He further observed that the only true difference between software components and physical components of other

patented inventions is that copies of software are easier to make and transport.

Under 271(f)s text, the very components supplied from the United States, and not foreign -made copies thereof,trigger liability when combined abroad to form the patented invention at issue. While copying software abroad is

indeed easy and inexpensive, the same can be said of other items, such as keys copied from a master. Section 271(f)

contains no instruction to gauge when duplication is easy and cheap enough to deem a copy in fact made abroadnevertheless supplie[d] from the United States. The absence of anything addressing copying in the statutorytext weighs against a judicial determination that replication abroad of a master dispatched from the United States

supplies the foreign-made copies from this country.

(c) Any doubt that Microsofts conduct falls outside 271(f)s compass would be resolved by the presumptionagainst extraterritoriality. Foreign conduct is generally the domain of foreign law, and in the patent area, that law

may embody different policy judgments about the relative rights of inventors, competitors, and the public. Applied

here, the presumption tugs strongly against construing 271(f) to encompass as a component not only a physicalcopy of software, but also softwares intangible code, and to render supplie[d] from the United States not only

exported copies of software, but also duplicates made abroad. Foreign law alone, not United States law, currentlygoverns the manufacture and sale of components of patented inventions in foreign countries. If AT&T desires to

prevent copying abroad, its remedy lies in obtaining and enforcing foreign patents.

(d) While reading 271(f) to exclude from coverage foreign-made copies of software may create a loophole infavor of software makers, the Court is not persuaded that dynamic judicial interpretation of 271(f) is in order; the

loophole is properly left for Congress to consider, and to cl ose if it finds such action warranted. Section 271(f)was a direct response to a gap in U. S. patent law revealed by Deepsouth Packing Co. v.Laitram Corp., 406 U. S.

518, where the items exported were kits containing all the physical, readily assemblable parts of a machine (not an

intangible set of instructions), and those parts themselves (not foreign-made copies of them) would be combined

abroad by foreign buyers. Having attended to that gap, Congress did not address other arguable gaps, such as the

loophole AT&T describes.

Given the expanded extraterritorial thrust AT&Ts reading of 271(f) entails, the patent -protective determinationAT&T seeks must be left to Congress. Cf. Sony Corp. of America v.Universal City Studios, Inc., 464 U. S. 417, 431.

Congress is doubtless aware of the ease with which electronic media such as software can be copied, and has not

left the matter untouched. See the Digital Millennium Copyright Act, 17 U. S. C. 1201 et seq. If patent law is to be


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adjusted better to account for the realities of software distribution, the alteration should be made after focused

legislative consideration, not by the Judiciary forecasting Congress likely disposition.

oOo

BMW OF NORTH AMERICA, INC. v. GORE

517 US 559 (1996)

JUSTICE STEVENS

FACTS:

Respondent Gore purchased a new BMW automobile from an authorized Alabama dealer, he discovered that the

car had been repainted. He brought this suit for compensatory and punitive damages against petitioner, the

American distributor of BMW's, alleging, inter alia, that the failure to disclose the repainting constituted fraud under

Alabama law. At trial, BMW acknowledged that it followed a nationwide policy of not advising its dealers, and

hence their customers, of pre delivery damage to new cars when the cost of repair did not exceed 3 percent of the

car's suggested retail price. Gore's vehicle fell into that category. The jury returned a verdict finding BMW liable forcompensatory damages of $4,000, and assessing $4 million in punitive damages. The trial judge denied BMW's post-

trial motion to set aside the punitive damages award, holding, among other things, that the award was not "grossly

excessive" and thus did not violate the Due Process Clause of the Fourteenth Amendment. The Alabama Supreme

Court agreed, but reduced the award to $2 million on the ground that, in computing the amount, the jury had

improperly multiplied Gore's compensatory damages by the number of similar sales in all States, not just those in

Alabama.

ISSUE:

Whether the $2 M punitive damages award to Gore exceed the constitutional limit.

HELD:

The $2 million punitive damages award is grossly excessive and therefore exceeds the constitutional limit.

Because such an award violates due process only when it can fairly be categorized as "grossly excessive" in relation

to the State's legitimate interests in punishing unlawful conduct and deterring its repetition, the federal excessiveness

inquiry appropriately begins with an identification of the state interests that such an award is designed to serve.

Principles of state sovereignty and comity forbid a State to enact policies for the entire Nation, or to impose its own

policy choice on neighboring States. Accordingly, the economic penalties that a State inflicts on those who

transgress its laws, whether the penalties are legislatively authorized fines or judicially imposed punitive damages,must be supported by the State's interest in protecting its own consumers and economy, rather than those of other

States or the entire Nation. Gore's award must therefore be analyzed in the light of conduct that occurred solely

within Alabama, with consideration being given only to the interests of Alabama consumers.

Three guideposts, each of which indicates that BMW did not receive adequate notice of the magnitude of the

sanction that Alabama might impose, lead to the conclusion that the $2 million award is grossly excessive:

1. The harm BMW inflicted on Gore was purely economic; the presale repainting had no effect on the car'sperformance, safety features, or appearance; and BMW's conduct evinced no indifference to or reckless

disregard for the health and safety of others. Gore's contention that BMW's nondisclosure was particularly

reprehensible because it formed part of a nationwide pattern of tortious conduct is rejected, because acorporate executive could reasonably have interpreted the relevant state statutes as establishing safe harbors

for nondisclosure of presumptively minor repairs, and because there is no evidence either that BMW acted

in bad faith when it sought to establish the appropriate line between minor damage and damage requiring

disclosure to purchasers, or that it persisted in its course of conduct after it had been adjudged unlawful.

Finally, there is no evidence that BMW engaged in deliberate false statements, acts of affirmative

misconduct, or concealment of evidence of improper motive.


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2. Gores $2 million award is 500 times the amount of his actual harm as determined by the jury, and there isno suggestion that he or any other BMW purchaser was threatened with any additional potential harm by

BMW's nondisclosure policy. Although it is not possible to draw a mathematical bright line between the

constitutionally acceptable and the constitutionally unacceptable that would fit every case, the ratio here is

clearly outside the acceptable range.

3. $2 million is substantially greater than Alabama's applicable $2,000 fine and the penalties imposed in otherStates for similar malfeasance, and because none of the pertinent statutes or interpretive decisions would

have put an out-of-state distributor on notice that it might be subject to a multimillion dollar sanction.

Moreover, in the absence of a BMW history of noncompliance with known statutory requirements, there is

no basis for assuming that a more modest sanction would not have been sufficient.

oOo

DOUGLAS SPECTOR, et al., PETITIONERS v. NORWEGIAN CRUISE LINE LTDJustice Kennedy

FACTS:

Respondent NCL is a cruise line operating foreign flag ships departing from, and returning to, United States ports.The petitioners, disabled individuals and their companions who purchased tickets for round-trip NCL cruises fromHouston, sued NCL under Title III of the Americans with Disabilities Act of 1990 (ADA), which prohibitsdiscrimination based on disability in places of "public accommodation, and in "specified public transportationservices," and requires covered entities to make "reasonable modifications in policies, practices, or procedures" toaccommodate disabled persons, and to remove "architectural barriers, and communication barriers that arestructural in nature" where such removal is "readily achievable. Though holding Title III generally applicable, theDistrict Court found that the petitioners' claims regarding physical barriers to access could not go forward becausethe federal agencies charged with promulgating ADA architectural and structural guidelines had not done so forcruise ships. The court therefore dismissed the barrier-removal claims, but denied NCL's motion to dismiss thepetitioners' other claims. The Fifth Circuit held that Title III does not apply to foreign-flag cruise ships in U.S.waters because of a presumption that absent a clear indication of congressional intent, general statutes do not applyto foreign-flag ships. Emphasizing that Title III does not contain a specific provision mandating its application tosuch vessels, the court sustained the dismissal of the petitioners' barrier-removal claims and reversed on theirremaining claims.

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