G.R. No. L-18164           January 23, 1967

WILLIAM F. GEMPERLE, plaintiff-appellant, vs.

HELEN SCHENKER and PAUL SCHENKER as her husband, defendants-appellees.

Appeal, taken by plaintiff, William F. Gemperle, from a decision of the Court of First Instance of Rizal dismissing this case for lack of jurisdiction over the person of defendant Paul Schenker and for want of cause of action against his wife and co-defendant, Helen Schenker said Paul Schenker "being in no position to be joined with her as party defendant, because he is beyond the reach of the magistracy of the Philippine courts."

The record shows that sometime in 1952, Paul Schenker-hereinafter referred to as Schenker — acting through his wife and attorney-in-fact, Helen Schenker — herein-after referred to as Mrs. Schenker — filed with the Court of First Instance of Rizal, a complaint — which was docketed as Civil Case No. Q-2796 thereof — against herein plaintiff William F. Gemperle, for the enforcement of Schenker's allegedly initial subscription to the shares of stock of the Philippines-Swiss Trading Co., Inc. and the exercise of his alleged pre-emptive rights to the then unissued original capital stock of said corporation and the increase thereof, as well as for an accounting and damages. Alleging that, in connection with said complaint, Mrs. Schenker had caused to be published some allegations thereof and other matters, which were impertinent, irrelevant and immaterial to said case No. Q-2796, aside from being false and derogatory to the reputation, good name and credit of Gemperle, "with the only purpose of attacking" his" honesty, integrity and reputation" and of bringing him "into public hatred, discredit, disrepute and contempt as a man and a businessman", Gemperle commenced the present action against the Schenkers for the recovery of P300,000 as damages, P30,000 as attorney's fees, and costs, in addition to praying for a judgment ordering Mrs. Schenker "to retract in writing the said defamatory expressions". In due course, thereafter, the lower court, rendered the decision above referred to. A reconsiderating thereof having been denied, Gemperle interposed the present appeal.

The first question for determination therein is whether or not the lower court had acquired jurisdiction over the person of Schenker. Admittedly, he, a Swiss citizen, residing in Zurich, Switzerland, has not been actually served with summons in the Philippines, although the summons address to him and Mrs. Schenker had been served personally upon her in the Philippines. It is urged by plaintiff that jurisdiction over the person of Schenker has been secured through voluntary appearance on his part, he not having made a special appearance to assail the jurisdiction over his person, and an answer having been filed in this case, stating that "the defendants, by counsel, answering the plaintiff's complaint, respectfully aver", which is allegedly a general appearance amounting to a submission to the jurisdiction of the court, confirmed, according to plaintiff, by a P225,000 counterclaim for damages set up in said answer; but this counterclaim was set up by Mrs. Schenker alone, not including her husband. Moreover, said answer contained several affirmative defenses, one of which was lack of jurisdiction over the person of Schenker, thus negating the alleged waiver of this defense. Nevertheless, We hold that the lower court had acquired jurisdiction over said defendant, through service of the summons addressed to him upon Mrs. Schenker, it appearing from said answer that she is the representative and attorney-in-fact of her husband aforementioned civil case No. Q-2796, which apparently was filed at her behest, in her aforementioned representative capacity. In other words, Mrs. Schenker had authority to sue, and had actually sued on behalf of her husband, so that she was, also, empowered to represent him in suits filed

against him, particularly in a case, like the of the one at bar, which is consequence of the action brought by her on his behalf.

Inasmuch as the alleged absence of a cause of action against Mrs. Schenker is premised upon the alleged lack of jurisdiction over the person of Schenker, which cannot be sustained, it follows that the conclusion drawn therefore from is, likewise, untenable.

Wherefore, the decision appealed from should be, is hereby, reversed, and the case remanded to the lower court for proceedings, with the costs of this instance defendants-appellees. It is so ordered.

G.R. No. L-32636             March 17, 1930

In the matter Estate of Edward Randolph Hix, deceased. A.W. FLUEMER, petitioner-appellant, 

vs.ANNIE COUSHING HIX, oppositor-appellee.

The special administrator of the estate of Edward Randolph Hix appeals from a decision of Judge of First Instance Tuason denying the probate of the document alleged to by the last will and testament of the deceased. Appellee is not authorized to carry on this appeal. We think, however, that the appellant, who appears to have been the moving party in these proceedings, was a "person interested in the allowance or disallowance of a will by a Court of First Instance," and so should be permitted to appeal to the Supreme Court from the disallowance of the will (Code of Civil Procedure, sec. 781, as amended; Villanueva vs. De Leon [1925], 42 Phil., 780).

It is theory of the petitioner that the alleged will was executed in Elkins, West Virginia, on November 3, 1925, by Hix who had his residence in that jurisdiction, and that the laws of West Verginia Code, Annotated, by Hogg, Charles E., vol. 2, 1914, p. 1690, and as certified to by the Director of the National Library. But this was far from a compliance with the law. The laws of a foreign jurisdiction do not prove themselves in our courts. the courts of the Philippine Islands are not authorized to take American Union. Such laws must be proved as facts. (In re Estate of Johnson [1918], 39 Phil., 156.) Here the requirements of the law were not met. There was no was printed or published under the authority of the State of West Virginia, as provided in section 300 of the Code of Civil Procedure. Nor was the extract from the law attested by the certificate of the officer having charge of the original, under the sale of the State of West Virginia, as provided in section 301 of the Code of Civil Procedure. No evidence was introduced to show that the extract from the laws of West Virginia was in force at the time the alleged will was executed.

In addition, the due execution of the will was not established. The only evidence on this point is to be found in the testimony of the petitioner. Aside from this, there was nothing to indicate that the will was acknowledged by the testator in the presence of two competent witnesses, of that these witnesses subscribed the will in the presence of the testator and of each other as the law of West Virginia seems to require. On the supposition that the witnesses to the will reside without the Philippine Islands, it would then the duty of the petitioner to prove execution by some other means (Code of Civil Procedure, sec. 633.)

It was also necessary for the petitioner to prove that the testator had his domicile in West Virginia and not establish this fact consisted of the recitals in the CATHY will and the testimony of the petitioner. Also in beginning administration proceedings orginally in the Philippine Islands, the petitioner violated his own theory by attempting to have the principal administration in the Philippine Islands.

While the appeal pending submission in this court, the attorney for the appellant presented an unverified petition asking the court to accept as part of the evidence the documents attached to the petition. One of these documents discloses that a paper writing purporting to be the was presented for probate on June 8, 1929, to the clerk of Randolph Country, State of West Virginia, in vacation, and was duly proven by the oaths of Dana Wamsley and Joseph L. MAdden, the subscribing witnesses thereto , and ordered to be recorded and filed. It was shown by another document that, in vacation, on June 8, 1929, the clerk of court of Randolph Country, West Virginia, appointed Claude W. Maxwell as administrator, cum testamento annexo, of the estate of Edward Randolph Hix, deceased. In this connection, it is to be noted that the application for the probate of the will in the Philippines was filed on February 20, 1929, while the proceedings in West Virginia appear to have been initiated on June 8, 1929. These facts are strongly indicative of an intention to make the Philippines the principal administration and West Virginia the ancillary administration. However this may be, no attempt has been made to comply with Civil Procedure, for no hearing on the question of the allowance of a will said to have been proved and allowed in West Virginia has been requested. There is no showing that the deceased left any property at any place other than the Philippine Islands and no contention that he left any in West Virginia.

Reference has been made by the parties to a divorce purported to have been awarded Edward Randolph Hix from Annie Cousins Hix on October 8, 1925, in the State of West specific pronouncements on the validity or validity of this alleged divorce.

For all of the foregoing, the judgment appealed from will be affirmed, with the costs of this instance against the appellant.

G.R. No. L-12105             January 30, 1960

TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-appellee, 

vs.MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA

BOHANAN, oppositors-appellants.

Appeal against an order of the Court of First Instance of Manila, Hon. Ramon San Jose, presiding, dismissing the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward Bohanan to the project of partition submitted by the executor and approving the said project.

On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding, admitted to probate a last will and testament of C. O. Bohanan, executed by him on April 23, 1944 in Manila. In the said order, the court made the following findings:

According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of that state, or at least a citizen of California where some of his properties are located. This contention in untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely temporary, and he continued and remained to be a citizen of the United States and of the state of his pertinent residence to spend the rest of his days in that state. His permanent residence or domicile in the United States depended upon his personal intent or desire, and he selected Nevada as his homicide and therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or permanent residence for him. That is his exclusive personal right.

Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking the prescribed oath, it may enter upon the execution and performance of its trust. (pp. 26-27, R.O.A.).

It does not appear that the order granting probate was ever questions on appeal. The executor filed a project of partition dated January 24, 1956, making, in accordance with the provisions of the will, the following adjudications: (1) one-half of the residuary estate, to the Farmers and Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the benefit of testator's grandson Edward George Bohanan, which consists of several mining companies; (2) the other half of the residuary estate to the testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike. This consist in the same amount of cash and of shares of mining stock similar to those given to testator's grandson; (3) legacies of P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be paid in three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;

It will be seen from the above that out of the total estate (after deducting administration expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of

all shares of stock of several mining companies and to his brother and sister the same amount. To his children he gave a legacy of only P6,000 each, or a total of P12,000.

The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions disposing of the estate in the manner above indicated, claiming that they have been deprived of the legitimate that the laws of the form concede to them.

The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should be entitled to received. The will has not given her any share in the estate left by the testator. It is argued that it was error for the trial court to have recognized the Reno divorce secured by the testator from his Filipino wife Magdalena C. Bohanan, and that said divorce should be declared a nullity in this jurisdiction, citing the case of Querubin vs.Querubin, 87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852, Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to recognize the claim of the widow on the ground that the laws of Nevada, of which the deceased was a citizen, allow him to dispose of all of his properties without requiring him to leave any portion of his estate to his wife. Section 9905 of Nevada Compiled Laws of 1925 provides:

Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her estate, real and personal, the same being chargeable with the payment of the testator's debts.

Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the testator's estafa had already been passed upon adversely against her in an order dated June 19, 1955, (pp. 155-159, Vol II Records, Court of First Instance), which had become final, as Magdalena C. Bohanan does not appear to have appealed therefrom to question its validity. On December 16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 from the funds of the estate, chargeable against her share in the conjugal property, (See pp. 294-297, Vol. I, Record, Court of First Instance), and the court in its said error found that there exists no community property owned by the decedent and his former wife at the time the decree of divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact contained therein, i.e. that there was no community property acquired by the testator and Magdalena C. Bohanan during their converture.

Moreover, the court below had found that the testator and Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the court below had already found that there was no conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator.

The most important issue is the claim of the testator's children, Edward and Mary Lydia, who had received legacies in the amount of P6,000 each only, and, therefore, have not been given their shares in the estate which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator. Is the failure old the testator to give his children two-thirds of the estate left by him at the time of his death, in accordance with the laws of the forum valid?

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides that successional rights to personal property are to be earned by the national law of the person whose succession is in question. Says the law on this point:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the extent of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property and the country in which it is found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16, new Civil Code.)

In the proceedings for the probate of the will, it was found out and it was decided that the testator was a citizen of the State of Nevada because he had selected this as his domicile and his permanent residence. (See Decision dated April 24, 1950, supra). So the question at issue is whether the estementary dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will (Sec. 9905, Complied Nevada Laws of 1925, supra). It does not appear that at time of the hearing of the project of partition, the above-quoted provision was introduced in evidence, as it was the executor's duly to do. The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules, which are as follows:

SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. . . . (Rule 123).

We have, however, consulted the records of the case in the court below and we have found that during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws. was introduced in evidence by appellant's (herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II, and t.s.n. pp. 24-44, Records, Court of First Instance). Again said laws presented by the counsel for the executor and admitted by the Court as Exhibit "B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo (se Records, Court of First Instance, Vol. 1).

In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition.

As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be governed by the national law of the testator, and as it has been decided and it is not disputed that the national law of the testator is that of the State of Nevada, already indicated above, which allows a testator to dispose of all his property according to his will, as in the case at bar, the order of the court approving the project of partition made in accordance with the testamentary provisions, must be, as it is hereby affirmed, with costs against appellants.

Paras, Bengzon, C.J., Padilla, Bautista Angelo and Endencia, JJ., concur.

G.R. No. 162894             February 26, 2008

RAYTHEON INTERNATIONAL, INC., petitioner, vs.

STOCKTON W. ROUZIE, JR., respondent.

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure which seeks the reversal of the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil case filed by respondent against petitioner with the trial court.

As culled from the records of the case, the following antecedents appear:

Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows.3

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of employment contract.4 On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to pay respondent’s money claims.5 Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and dismissed respondent’s complaint on the ground of lack of jurisdiction.6 Respondent elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997. The Resolution became final and executory on 09 November 1998.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court (RTC) of Bauang, La Union. The Complaint,7 docketed as Civil Case No. 1192-BG, named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the labor case that BMSI verbally employed respondent to negotiate the sale of services in government projects and that respondent was not paid the commissions due him from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself had combined and functioned as one company.

In its Answer,8 petitioner alleged that contrary to respondent’s claim, it was a foreign corporation duly licensed to do business in the Philippines and denied entering into any arrangement with respondent or paying the latter any sum of money. Petitioner also denied combining with BMSI and RUST for the purpose of assuming the alleged obligation of the said companies.9 Petitioner also referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as "Special Sales Representative Agreement," the rights and obligations of the parties shall be governed by the laws of the State of Connecticut.10Petitioner sought the dismissal of the complaint on grounds of failure to state a

cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim.11

On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for Summary Judgment12 seeking the dismissal of the complaint on grounds of forum non conveniens and failure to state a cause of action. Respondent opposed the same. Pending the resolution of the omnibus motion, the deposition of Walter Browning was taken before the Philippine Consulate General in Chicago.13

In an Order14 dated 13 September 2000, the RTC denied petitioner’s omnibus motion. The trial court held that the factual allegations in the complaint, assuming the same to be admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle of forum non conveniens was inapplicable because the trial court could enforce judgment on petitioner, it being a foreign corporation licensed to do business in the Philippines.15

Petitioner filed a Motion for Reconsideration16 of the order, which motion was opposed by respondent.17 In an Order dated 31 July 2001,18 the trial court denied petitioner’s motion. Thus, it filed a Rule 65 Petition19 with the Court of Appeals praying for the issuance of a writ of certiorari and a writ of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting further proceedings.20

On 28 August 2003, the Court of Appeals rendered the assailed Decision21 denying the petition for certiorari for lack of merit. It also denied petitioner’s motion for reconsideration in the assailed Resolution issued on 10 March 2004.22

The appellate court held that although the trial court should not have confined itself to the allegations in the complaint and should have also considered evidence aliunde in resolving petitioner’s omnibus motion, it found the evidence presented by petitioner, that is, the deposition of Walter Browning, insufficient for purposes of determining whether the complaint failed to state a cause of action. The appellate court also stated that it could not rule one way or the other on the issue of whether the corporations, including petitioner, named as defendants in the case had indeed merged together based solely on the evidence presented by respondent. Thus, it held that the issue should be threshed out during trial.23 Moreover, the appellate court deferred to the discretion of the trial court when the latter decided not to desist from assuming jurisdiction on the ground of the inapplicability of the principle of forum non conveniens.

Hence, this petition raising the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST RAYTHEON INTERNATIONAL, INC.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.24

Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino Padua Law Office, counsel on record for respondent, manifested that the lawyer handling the case, Atty. Rogelio Karagdag, had severed relations with the law firm even before the filing of the instant petition and that it could no longer find the whereabouts of Atty. Karagdag or of

respondent despite diligent efforts. In a Resolution25 dated 20 November 2006, the Court resolved to dispense with the filing of a comment.

The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute – namely, the parties and witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines – that renders our local courts inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate the immediate application of the doctrine of forum non conveniens.

Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances27 where the Court held that the local judicial machinery was adequate to resolve controversies with a foreign element, the following requisites had to be proved: (1) that the Philippine Court is one to which the parties may conveniently resort; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine Court has or is likely to have the power to enforce its decision.28

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed.29

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law30 and by the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.31 Civil Case No. 1192-BG is an action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are within the jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary appearance in court.32

That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties.33The choice of law stipulation will become relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most "convenient" or available forum and the

parties are not precluded from seeking remedies elsewhere.34 Petitioner’s averments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the court’s desistance.35

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign elements. In the same manner, the Court defers to the sound discretion of the lower courts because their findings are binding on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action against petitioner. Failure to state a cause of action refers to the insufficiency of allegation in the pleading.36 As a general rule, the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded.37

The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. Petitioner contends that the deposition of Walter Browning rebutted this allegation. On this score, the resolution of the Court of Appeals is instructive, thus:

x x x Our examination of the deposition of Mr. Walter Browning as well as other documents produced in the hearing shows that these evidence aliunde are not quite sufficient for us to mete a ruling that the complaint fails to state a cause of action.

Annexes "A" to "E" by themselves are not substantial, convincing and conclusive proofs that Raytheon Engineers and Constructors, Inc. (REC) assumed the warranty obligations of defendant Rust International in the Makar Port Project in General Santos City, after Rust International ceased to exist after being absorbed by REC. Other documents already submitted in evidence are likewise meager to preponderantly conclude that Raytheon International, Inc., Rust International[,] Inc. and Brand Marine Service, Inc. have combined into one company, so much so that Raytheon International, Inc., the surviving company (if at all) may be held liable for the obligation of BMSI to respondent Rouzie for unpaid commissions. Neither these documents clearly speak otherwise.38

As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged together requires the presentation of further evidence, which only a full-blown trial on the merits can afford.

WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 67001 are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

G.R. No. 35694, 59 Phil. 293

ALLISON G. GIBBS, petitioner-appelle, 

vs.

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, oppositor-appellant. 

THE REGISTER OF DEEDS OF THE CITY OF MANILA, respondent-appellant.

This is an appeal from a final order of the Court of First Instance of Manila, requiring the register

of deeds of the City of Manila to cancel certificates of title Nos. 20880, 28336 and 28331,

covering lands located in the City of Manila, Philippine Islands, and issue in lieu thereof new

certificates of transfer of title in favor of Allison D. Gibbs without requiring him to present any

document showing that the succession tax due under Article XI of Chapter 40 of the

Administrative Code has been paid.

The said order of the court of March 10, 1931, recites that the parcels of land covered by said

certificates of title formerly belonged to the conjugal partnership of Allison D. Gibbs and Eva

Johnson Gibbs; that the latter died intestate in Palo Alto, California, on November 28, 1929; that

at the time of her death she and her husband were citizens of the State of California and

domiciled therein.

It appears further from said order that Allison D. Gibbs was appointed administrator of the state

of his said deceased wife in case No. 36795 in the same court, entitled "In the Matter of the

Intestate Estate of Eva Johnson Gibbs, Deceased"; that in said intestate proceedings, the said

Allison D. Gibbs, on September 22,1930, filed an ex parte petition in which he alleged "that the

parcels of land hereunder described belong to the conjugal partnership of your petitioner and his

wife, Eva Johnson Gibbs", describing in detail the three facts here involved; and further alleging

that his said wife, a citizen and resident of California, died on November 28,1929; that in

accordance with the law of California, the community property of spouses who are citizens of

California, upon the death of the wife previous to that of the husband, belongs absolutely to the

surviving husband without administration; that the conjugal partnership of Allison D. Gibbs and

Eva Johnson Gibbs, deceased, has no obligations or debts and no one will be prejudiced by

adjucating said parcels of land (and seventeen others not here involved) to be the absolute

property of the said Allison D. Gibbs as sole owner. The court granted said petition and on

September 22, 1930, entered a decree adjucating the said Allison D. Gibbs to be the sole and

absolute owner of said lands, applying section 1401 of the Civil Code of California. Gibbs

presented this decree to the register of deeds of Manila and demanded that the latter issue to

him a "transfer certificate of title".

Section 1547 of Article XI of Chapter 40 of the Administrative Code provides in part that:

Registers of deeds shall not register in the registry of property any document transferring real

property or real rights therein or any chattel mortgage, by way of gifts mortis causa, legacy or

inheritance, unless the payment of the tax fixed in this article and actually due thereon shall be

shown. And they shall immediately notify the Collector of Internal Revenue or the corresponding

provincial treasurer of the non payment of the tax discovered by them. . . .

Acting upon the authority of said section, the register of deeds of the City of Manila, declined to

accept as binding said decree of court of September 22,1930, and refused to register the

transfer of title of the said conjugal property to Allison D. Gibbs, on the ground that the

corresponding inheritance tax had not been paid. Thereupon, under date of December 26,

1930, Allison D. Gibbs filed in the said court a petition for an order requiring the said register of

deeds "to issue the corresponding titles" to the petitioner without requiring previous payment of

any inheritance tax. After due hearing of the parties, the court reaffirmed said order of

September 22, 1930, and entered the order of March 10, 1931, which is under review on this

appeal.

On January 3, 1933, this court remanded the case to the court of origin for new trial upon

additional evidence in regard to the pertinent law of California in force at the time of the death of

Mrs. Gibbs, also authorizing the introduction of evidence with reference to the dates of the

acquisition of the property involved in this suit and with reference to the California law in force at

the time of such acquisition. The case is now before us with the supplementary evidence.

For the purposes of this case, we shall consider the following facts as established by the

evidence or the admissions of the parties: Allison D. Gibbs has been continuously, since the

year 1902, a citizen of the State of California and domiciled therein; that he and Eva Johnson

Gibbs were married at Columbus, Ohio, in July 1906; that there was no antenuptial marriage

contract between the parties; that during the existence of said marriage the spouses acquired

the following lands, among others, in the Philippine Islands, as conjugal property:

1. A parcel of land in the City of Manila represented by transfer certificate of title No. 20880,

dated March 16, 1920, and registered in the name of "Allison D. Gibbs casado con Eva Johnson

Gibbs".

2. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28336,

dated May 14, 1927, in which it is certified "that spouses Allison D. Gibbs and Eva Johnson

Gibbs are the owners in fee simple" of the land therein described.

3. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28331,

dated April 6, 1927, which it states "that Allison D. Gibbs married to Eva Johnson Gibbs" is the

owner of the land described therein; that said Eva Johnson Gibbs died intestate on November

28, 1929, living surviving her her husband, the appellee, and two sons, Allison J. Gibbs , now

age 25 and Finley J. Gibbs, now aged 22, as her sole heirs of law.

Article XI of Chapter 40 of the Administrative Code entitled "Tax on inheritances, legacies and

other acquisitions mortis causa" provides in section 1536 that "Every transmission by virtue of

inheritance ... of real property ... shall be subject to the following tax." It results that the question

for determination in this case is as follows: Was Eva Johnson Gibbs at the time of her death the

owner of a descendible interest in the Philippine lands above-mentioned?

The appellee contends that the law of California should determine the nature and extent of the

title, if any, that vested in Eva Johnson Gibbs under the three certificates of title Nos. 20880,

28336 and 28331 above referred to, citing article 9 of the Civil Code. But that, even if the nature

and extent of her title under said certificates be governed by the law of the Philippine Islands,

the laws of California govern the succession to such title, citing the second paragraph of article

10 of the Civil Code.

Article 9 of the Civil Code is as follows:

The laws relating to family rights and duties, or to the status, condition, and legal capacity of

persons, are binding upon Spaniards even though they reside in a foreign country." It is argued

that the conjugal right of the California wife in community real estate in the Philippine Islands is

a personal right and must, therefore, be settled by the law governing her personal status, that is,

the law of California. But our attention has not been called to any law of California that

incapacitates a married woman from acquiring or holding land in a foreign jurisdiction in

accordance with the lex rei sitae. There is not the slightest doubt that a California married

woman can acquire title to land in a common law jurisdiction like the State of Illinois or the

District of Columbia, subject to the common-law estate by the courtesy which would vest in her

husband. Nor is there any doubt that if a California husband acquired land in such a jurisdiction

his wife would be vested with the common law right of dower, the prerequisite conditions

obtaining. Article 9 of the Civil Code treats of purely personal relations and status and capacity

for juristic acts, the rules relating to property, both personal and real, being governed by article

10 of the Civil Code. Furthermore, article 9, by its very terms, is applicable only to "Spaniards"

(now, by construction, to citizens of the Philippine Islands).

The Organic Act of the Philippine Islands (Act of Congress, August 29, 1916, known as the

"Jones Law") as regards the determination of private rights, grants practical autonomy to the

Government of the Philippine Islands. This Government, therefore, may apply the principles and

rules of private international law (conflicts of laws) on the same footing as an organized territory

or state of the United States. We should, therefore, resort to the law of California, the nationality

and domicile of Mrs. Gibbs, to ascertain the norm which would be applied here as law were

there any question as to her status.

But the appellant's chief argument and the sole basis of the lower court's decision rests upon

the second paragraph of article 10 of the Civil Code which is as follows:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well

as to the amount of the successional rights and the intrinsic validity of their provisions, shall be

regulated by the national law of the person whose succession is in question, whatever may be

the nature of the property or the country in which it may be situated.

In construing the above language we are met at the outset with some difficulty by the

expression "the national law of the person whose succession is in question", by reason of the

rather anomalous political status of the Philippine Islands. (Cf. Manresa, vol. 1, Codigo Civil, pp.

103, 104.) We encountered no difficulty in applying article 10 in the case of a citizen of Turkey.

(Miciano vs. Brimo, 50 Phil., 867.) Having regard to the practical autonomy of the Philippine

Islands, as above stated, we have concluded that if article 10 is applicable and the estate in

question is that of a deceased American citizen, the succession shall be regulated in

accordance with the norms of the State of his domicile in the United States. (Cf.  Babcock

Templeton vs. Rider Babcock, 52 Phil., 130, 137; In re Estate of Johnson, 39 Phil., 156, 166.)

The trial court found that under the law of California, upon the death of the wife, the entire

community property without administration belongs to the surviving husband; that he is the

absolute owner of all the community property from the moment of the death of his wife, not by

virtue of succession or by virtue of her death, but by virtue of the fact that when the death of the

wife precedes that of the husband he acquires the community property, not as an heir or as the

beneficiary of his deceased wife, but because she never had more than an inchoate interest or

expentancy which is extinguished upon her death. Quoting the case of Estate of Klumpke (167

Cal., 415, 419), the court said: "The decisions under this section (1401 Civil Code of California)

are uniform to the effect that the husband does not take the community property upon the death

of the wife by succession, but that he holds it all from the moment of her death as though

required by himself. ... It never belonged to the estate of the deceased wife."

The argument of the appellee apparently leads to this dilemma: If he takes nothing by

succession from his deceased wife, how can the second paragraph of article 10 be invoked?

Can the appellee be heard to say that there is a legal succession under the law of the Philippine

Islands and no legal succession under the law of California? It seems clear that the second

paragraph of article 10 applies only when a legal or testamentary succession has taken place in

the Philippines and in accordance with the law of the Philippine Islands; and the foreign law is

consulted only in regard to the order of succession or the extent of the successional rights; in

other words, the second paragraph of article 10 can be invoked only when the deceased was

vested with a descendible interest in property within the jurisdiction of the Philippine Islands.

In the case of Clarke vs. Clarke (178 U. S., 186, 191; 44 Law ed., 1028, 1031), the court said:

It is principle firmly established that to the law of the state in which the land is situated we must

look for the rules which govern its descent, alienation, and transfer, and for the effect and

construction of wills and other conveyances. (United States vs. Crosby, 7 Cranch, 115; 3 L. ed.,

287; Clark vs. Graham, 6 Wheat., 577; 5 L. ed., 334; McGoon vs. Scales, 9 Wall., 23; 19 L. ed.,

545; Brine vs. Hartford F. Ins. Co., 96 U. S., 627; 24 L. ed., 858.)" (See also Estate of Lloyd,

175 Cal., 704, 705.) This fundamental principle is stated in the first paragraph of article 10 of our

Civil Code as follows: "Personal property is subject to the laws of the nation of the owner

thereof; real property to the laws of the country in which it is situated.

It is stated in 5 Cal. Jur., 478:

In accord with the rule that real property is subject to the lex rei sitae, the respective rights of

husband and wife in such property, in the absence of an antenuptial contract, are determined by

the law of the place where the property is situated, irrespective of the domicile of the parties or

to the place where the marriage was celebrated. (See also Saul vs. His Creditors, 5 Martin [N.

S.], 569; 16 Am. Dec., 212 [La.]; Heidenheimer vs. Loring, 26 S. W., 99 [Texas].)

Under this broad principle, the nature and extent of the title which vested in Mrs. Gibbs at the

time of the acquisition of the community lands here in question must be determined in

accordance with the lex rei sitae.

It is admitted that the Philippine lands here in question were acquired as community property of

the conjugal partnership of the appellee and his wife. Under the law of the Philippine Islands,

she was vested of a title equal to that of her husband. Article 1407 of the Civil Code provides:

All the property of the spouses shall be deemed partnership property in the absence of proof

that it belongs exclusively to the husband or to the wife. Article 1395 provides:

"The conjugal partnership shall be governed by the rules of law applicable to the contract of

partnership in all matters in which such rules do not conflict with the express provisions of this

chapter." Article 1414 provides that "the husband may dispose by will of his half only of the

property of the conjugal partnership." Article 1426 provides that upon dissolution of the conjugal

partnership and after inventory and liquidation, "the net remainder of the partnership property

shall be divided share and share alike between the husband and wife, or their respective heirs."

Under the provisions of the Civil Code and the jurisprudence prevailing here, the wife, upon the

acquisition of any conjugal property, becomes immediately vested with an interest and title

therein equal to that of her husband, subject to the power of management and disposition which

the law vests in the husband. Immediately upon her death, if there are no obligations of the

decedent, as is true in the present case, her share in the conjugal property is transmitted to her

heirs by succession. (Articles 657, 659, 661, Civil Code; cf. also Coronel vs. Ona, 33 Phil., 456,

469.)

It results that the wife of the appellee was, by the law of the Philippine Islands, vested of a

descendible interest, equal to that of her husband, in the Philippine lands covered by certificates

of title Nos. 20880, 28336 and 28331, from the date of their acquisition to the date of her death.

That appellee himself believed that his wife was vested of such a title and interest in manifest

from the second of said certificates, No. 28336, dated May 14, 1927, introduced by him in

evidence, in which it is certified that "the spouses Allison D. Gibbs and Eva Johnson Gibbs are

the owners in fee simple of the conjugal lands therein described."

The descendible interest of Eva Johnson Gibbs in the lands aforesaid was transmitted to her

heirs by virtue of inheritance and this transmission plainly falls within the language of section

1536 of Article XI of Chapter 40 of the Administrative Code which levies a tax on inheritances.

(Cf. Re Estate of Majot, 199 N. Y., 29; 92 N. E., 402; 29 L. R. A. [N. S.], 780.) It is unnecessary

in this proceeding to determine the "order of succession" or the "extent of the successional

rights" (article 10, Civil Code, supra) which would be regulated by section 1386 of the Civil Code

of California which was in effect at the time of the death of Mrs. Gibbs.

The record does not show what the proper amount of the inheritance tax in this case would be

nor that the appellee (petitioner below) in any way challenged the power of the Government to

levy an inheritance tax or the validity of the statute under which the register of deeds refused to

issue a certificate of transfer reciting that the appellee is the exclusive owner of the Philippine

lands included in the three certificates of title here involved.

The judgment of the court below of March 10, 1931, is reversed with directions to dismiss the

petition, without special pronouncement as to the costs.

G.R. No. 172342               July 13, 2009

LWV CONSTRUCTION CORPORATION, Petitioner, vs.

MARCELO B. DUPO, Respondent.

Petitioner LWV Construction Corporation appeals the Decision1 dated December 6, 2005 of the Court of Appeals in CA-G.R. SP No. 76843 and its Resolution2 dated April 12, 2006, denying the motion for reconsideration. The Court of Appeals had ruled that under Article 87 of the Saudi Labor and Workmen Law (Saudi Labor Law), respondent Marcelo Dupo is entitled to a service award or longevity pay amounting to US$12,640.33.

The antecedent facts are as follows:

Petitioner, a domestic corporation which recruits Filipino workers, hired respondent as Civil Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil Group/Establishment (MMG). On February 26, 1992, respondent signed his first overseas employment contract, renewable after one year. It was renewed five times on the following dates: May 10, 1993, November 16, 1994, January 22, 1996, April 14, 1997, and March 26, 1998. All were fixed-period contracts for one year. The sixth and last contract stated that respondent’s employment starts upon reporting to work and ends when he leaves the work site. Respondent left Saudi Arabia on April 30, 1999 and arrived in the Philippines on May 1, 1999.

On May 28, 1999, respondent informed MMG, through the petitioner, that he needs to extend his vacation because his son was hospitalized. He also sought a promotion with salary adjustment.3 In reply, MMG informed respondent that his promotion is subject to management’s review; that his services are still needed; that he was issued a plane ticket for his return flight to Saudi Arabia on May 31, 1999; and that his decision regarding his employment must be made within seven days, otherwise, MMG "will be compelled to cancel [his] slot."4

On July 6, 1999, respondent resigned. In his letter to MMG, he also stated:

x x x x

I am aware that I still have to do a final settlement with the company and hope that during my more than seven (7) [years] services, as the Saudi Law stated, I am entitled for a long service award.5 (Emphasis supplied.)

x x x x

According to respondent, when he followed up his claim for long service award on December 7, 2000, petitioner informed him that MMG did not respond.6

On December 11, 2000, respondent filed a complaint7 for payment of service award against petitioner before the National Labor Relations Commission (NLRC), Regional Arbitration Branch, Cordillera Administrative Region, Baguio City. In support of his claim, respondent averred in his position paper that:

x x x x

Under the Law of Saudi Arabia, an employee who rendered at least five (5) years in a company within the jurisdiction of Saudi Arabia, is entitled to the so-called long service award which is known to others as longevity pay of at least one half month pay for every year of service. In excess of five years an employee is entitled to one month pay for every year of service. In both cases inclusive of all benefits and allowances.

This benefit was offered to complainant before he went on vacation, hence, this was engrained in his mind. He reconstructed the computation of his long service award or longevity pay and he arrived at the following computation exactly the same with the amount he was previously offered [which is US$12,640.33].8 (Emphasis supplied.)

x x x x

Respondent said that he did not grab the offer for he intended to return after his vacation.

For its part, petitioner offered payment and prescription as defenses. Petitioner maintained that MMG "pays its workers their Service Award or Severance Pay every conclusion of their Labor Contracts pursuant to Article 87 of the [Saudi Labor Law]." Under Article 87, "payment of the award is at the end or termination of the Labor Contract concluded for a specific period." Based on the payroll,9 respondent was already paid his service award or severance pay for his latest (sixth) employment contract.

Petitioner added that under Article 1310 of the Saudi Labor Law, the action to enforce payment of the service award must be filed within one year from the termination of a labor contract for a specific period. Respondent’s six contracts ended when he left Saudi Arabia on the following dates: April 15, 1993, June 8, 1994, December 18, 1995, March 21, 1997, March 16, 1998 and April 30, 1999. Petitioner concluded that the one-year prescriptive period had lapsed because respondent filed his complaint on December 11, 2000 or one year and seven months after his sixth contract ended.11

In his June 18, 2001 Decision,12 the Labor Arbiter ordered petitioner to pay respondent longevity pay of US$12,640.33 or P648,562.69 and attorney’s fees of P64,856.27 or a total of P713,418.96.13

The Labor Arbiter ruled that respondent’s seven-year employment with MMG had sufficiently oriented him on the benefits given to workers; that petitioner was unable to convincingly refute respondent’s claim that MMG offered him longevity pay before he went on vacation on May 1, 1999; and that respondent’s claim was not barred by prescription since his claim on July 6, 1999, made a month after his cause of action accrued, interrupted the prescriptive period under the Saudi Labor Law until his claim was categorically denied.

Petitioner appealed. However, the NLRC dismissed the appeal and affirmed the Labor Arbiter’s decision.14 The NLRC ruled that respondent is entitled to longevity pay which is different from severance pay.

Aggrieved, petitioner brought the case to the Court of Appeals through a petition for certiorari under Rule 65 of the Rules of Court. The Court of Appeals denied the petition and affirmed the NLRC. The Court of Appeals ruled that service award is the same as longevity pay, and that the severance pay received by respondent cannot be equated with service award. The dispositive portion of the Court of Appeals decision reads:

WHEREFORE, finding no grave abuse of discretion amounting to lack or in (sic) excess of jurisdiction on the part of public respondent NLRC, the petition is denied. The NLRC decision dated November 29, 2002 as well as and (sic) its January 31, 2003 Resolution are hereby AFFIRMED in toto.

SO ORDERED.15

After its motion for reconsideration was denied, petitioner filed the instant petition raising the following issues:

I.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING NO GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION ON THE PART OF PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION.

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE SERVICE AWARD OF THE RESPONDENT [HAS] NOT PRESCRIBED WHEN HIS COMPLAINT WAS FILED ON DECEMBER 11, 2000.

III.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN APPLYING IN THE CASE AT BAR [ARTICLE 1155 OF THE CIVIL CODE].

IV.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN APPLYING ARTICLE NO. 7 OF THE SAUDI LABOR AND WORKMEN LAW TO SUPPORT ITS FINDING THAT THE BASIS OF THE SERVICE AWARD IS LONGEVITY [PAY] OR LENGTH OF SERVICE RENDERED BY AN EMPLOYEE.16

Essentially, the issue is whether the Court of Appeals erred in ruling that respondent is entitled to a service award or longevity pay of US$12,640.33 under the provisions of the Saudi Labor Law. Related to this issue are petitioner’s defenses of payment and prescription.

Petitioner points out that the Labor Arbiter awarded longevity pay although the Saudi Labor Law grants no such benefit, and the NLRC confused longevity pay and service award. Petitioner maintains that the benefit granted by Article 87 of the Saudi Labor Law is service award which was already paid by MMG each time respondent’s contract ended.

Petitioner insists that prescription barred respondent’s claim for service award as the complaint was filed one year and seven months after the sixth contract ended. Petitioner alleges that the Court of Appeals erred in ruling that respondent’s July 6, 1999 claim interrupted the running of the prescriptive period. Such ruling is contrary to Article 13 of the Saudi Labor Law which provides that no case or claim relating to any of the rights provided for under said law shall be heard after the lapse of 12 months from the date of the termination of the contract.

Respondent counters that he is entitled to longevity pay under the provisions of the Saudi Labor Law and quotes extensively the decision of the Court of Appeals. He points out that petitioner has not refuted the Labor Arbiter’s finding that MMG offered him longevity pay of US$12,640.33 before his one-month vacation in the Philippines in 1999. Thus, he "submits that such offer indeed exists" as he sees no reason for MMG to offer the benefit if no law grants it.

After a careful study of the case, we are constrained to reverse the Court of Appeals. We find that respondent’s service award under Article 87 of the Saudi Labor Law has already been paid. Our computation will show that the severance pay received by respondent was his service award.

Article 87 clearly grants a service award. It reads:

Article 87

Where the term of a labor contract concluded for a specified period comes to an end or where the employer cancels a contract of unspecified period, the employer shall pay to the workman an award for the period of his service to be computed on the basis of half a month’s pay for each of the first five years and one month’s pay for each of the subsequent years. The last rate of pay shall be taken as basis for the computation of the award. For fractions of a year, the workman shall be entitled to an award which is proportionate to his service period during that year. Furthermore, the workman shall be entitled to the service award provided for at the beginning of this article in the following cases:

A. If he is called to military service.

B. If a workman resigns because of marriage or childbirth.

C. If the workman is leaving the work as a result of a force majeure beyond his control.17 (Emphasis supplied.)

Respondent, however, has called the benefit other names such as long service award and longevity pay. On the other hand, petitioner claimed that the service award is the same as severance pay. Notably, the Labor Arbiter was unable to specify any law to support his award of longevity pay.18 He anchored the award on his finding that respondent’s allegations were more credible because his seven-year employment at MMG had sufficiently oriented him on the benefits given to workers. To the NLRC, respondent is entitled to service award or longevity pay under Article 87 and that longevity pay is different from severance pay. The Court of Appeals agreed.

Considering that Article 87 expressly grants a service award, why is it correct to agree with respondent that service award is the same as longevity pay, and wrong to agree with petitioner that service award is the same as severance pay? And why would it be correct to say that service award is severance pay, and wrong to call service award as longevity pay?

We found the answer in the pleadings and evidence presented. Respondent’s position paper mentioned how his long service award or longevity pay is computed: half-month’s pay per year of service and one-month’s pay per year after five years of service. Article 87 has the same formula to compute the service award.

The payroll submitted by petitioner showed that respondent received severance pay of SR2,786 for his sixth employment contract covering the period April 21, 1998 to April 29, 1999. 19 The computation below shows that respondent’s severance pay of SR2,786 was his service award under Article 87.

Service Award = ½ (SR5,438)20 + (9 days/365 days)21 x ½ (SR5,438)

Service Award = SR2,786.04

Respondent’s service award for the sixth contract is equivalent only to half-month’s pay plus the proportionate amount for the additional nine days of service he rendered after one year. Respondent’s employment contracts expressly stated that his employment ended upon his departure from work. Each year he departed from work and successively new contracts were executed before he reported for work anew. His service was not cumulative. Pertinently, in Brent School, Inc. v. Zamora,22 we said that "a fixed term is an essential and natural appurtenance" of overseas employment contracts,23 as in this case. We also said in that case that under American law, "[w]here a contract specifies the period of its duration, it terminates on the expiration of such period. A contract of employment for a definite period terminates by its own terms at the end of such period."24 As it is, Article 72 of the Saudi Labor Law is also of similar import. It reads:

A labor contract concluded for a specified period shall terminate upon the expiry of its term. If both parties continue to enforce the contract, thereafter, it shall be considered renewed for an unspecified period.25

Regarding respondent’s claim that he was offered US$12,640.33 as longevity pay before he returned to the Philippines on May 1, 1999, we find that he was not candid on this particular point. His categorical assertion about the offer being "engrained in his mind" such that he "reconstructed the computation … and arrived at the … computation exactly the same with the amount he was previously offered" is not only beyond belief. Such assertion is also a stark departure from his July 6, 1999 letter to MMG where he could only express his hope that he was entitled to a long service award and where he never mentioned the supposed previous offer. Moreover, respondent’s claim that his monthly compensation is SR10,248.9226 is belied by the payroll which shows that he receives SR5,438 per month.

We therefore emphasize that such payroll should have prompted the lower tribunals to examine closely respondent’s computation of his supposed longevity pay before adopting that computation as their own.

On the matter of prescription, however, we cannot agree with petitioner that respondent’s action has prescribed under Article 13 of the Saudi Labor Law. What applies is Article 291 of our Labor Code which reads:

ART. 291. Money claims. — All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

x x x x

In Cadalin v. POEA’s Administrator,27 we held that Article 291 covers all money claims from employer-employee relationship and is broader in scope than claims arising from a specific law. It is not limited to money claims recoverable under the Labor Code, but applies also to claims of overseas contract workers.28 The following ruling in Cadalin v. POEA’s Administrator is instructive:

First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law.

Article 156 of the Amiri Decree No. 23 of 1976 provides:

"A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the date of the expiry of the contract" x x x.

As a general rule, a foreign procedural law will not be applied in the forum.1avvphi1 Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]).

A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on the characterization given such a law.

x x x x

However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a "borrowing statute." Said statute has the practical effect of treating the foreign statute of limitation as one of substance (Goodrich, Conflict of Laws, 152-153 [1938]). A "borrowing statute" directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of "borrowing statutes," one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides:

"If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippine Islands."

Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedure as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine Conflict of Laws, 104 [7th ed.]).

In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil Procedure] cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of [Article] 156 of the Amiri Decree No. 23 of 1976.

The courts of the forum will not enforce any foreign claim obnoxious to the forum’s public policy x x x. To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor.29

x x x x

Thus, in our considered view, respondent’s complaint was filed well within the three-year prescriptive period under Article 291 of our Labor Code. This point, however, has already been mooted by our finding that respondent’s service award had been paid, albeit the payroll termed such payment as severance pay.

WHEREFORE, the petition is GRANTED. The assailed Decision dated December 6, 2005 and Resolution dated April 12, 2006, of the Court of Appeals in CA-G.R. SP No. 76843, as well as the Decision dated June 18, 2001 of the Labor Arbiter in NLRC Case No. RAB-CAR-12-0649-00 and the Decision dated November 29, 2002 and Resolution dated January 31, 2003 of the NLRC in NLRC CA No. 028994-01 (NLRC RAB-CAR-12-0649-00) are REVERSED and SET ASIDE. The Complaint of respondent is hereby DISMISSED.

No pronouncement as to costs.

SO ORDERED.

G.R. No. L-12105             January 30, 1960

TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-appellee, 

vs.MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA

BOHANAN, oppositors-appellants.

Appeal against an order of the Court of First Instance of Manila, Hon. Ramon San Jose, presiding, dismissing the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward Bohanan to the project of partition submitted by the executor and approving the said project.

On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding, admitted to probate a last will and testament of C. O. Bohanan, executed by him on April 23, 1944 in Manila. In the said order, the court made the following findings:

According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of that state, or at least a citizen of California where some of his properties are located. This contention in untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely temporary, and he continued and remained to be a citizen of the United States and of the state of his pertinent residence to spend the rest of his days in that state. His permanent residence

or domicile in the United States depended upon his personal intent or desire, and he selected Nevada as his homicide and therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or permanent residence for him. That is his exclusive personal right.

Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking the prescribed oath, it may enter upon the execution and performance of its trust. (pp. 26-27, R.O.A.).

It does not appear that the order granting probate was ever questions on appeal. The executor filed a project of partition dated January 24, 1956, making, in accordance with the provisions of the will, the following adjudications: (1) one-half of the residuary estate, to the Farmers and Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the benefit of testator's grandson Edward George Bohanan, which consists of several mining companies; (2) the other half of the residuary estate to the testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike. This consist in the same amount of cash and of shares of mining stock similar to those given to testator's grandson; (3) legacies of P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be paid in three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;

It will be seen from the above that out of the total estate (after deducting administration expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of all shares of stock of several mining companies and to his brother and sister the same amount. To his children he gave a legacy of only P6,000 each, or a total of P12,000.

The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions disposing of the estate in the manner above indicated, claiming that they have been deprived of the legitimate that the laws of the form concede to them.

The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should be entitled to received. The will has not given her any share in the estate left by the testator. It is argued that it was error for the trial court to have recognized the Reno divorce secured by the testator from his Filipino wife Magdalena C. Bohanan, and that said divorce should be declared a nullity in this jurisdiction, citing the case of Querubin vs.Querubin, 87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852, Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to recognize the claim of the widow on the ground that the laws of Nevada, of which the deceased was a citizen, allow him to dispose of all of his properties without requiring him to leave any portion of his estate to his wife. Section 9905 of Nevada Compiled Laws of 1925 provides:

Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her estate, real and personal, the same being chargeable with the payment of the testator's debts.

Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the testator's estafa had already been passed upon adversely against her in an order dated June 19, 1955, (pp. 155-159, Vol II Records, Court of First Instance), which had become final, as Magdalena C. Bohanan does not appear to have appealed therefrom to question its validity. On December 16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 from the funds of the estate, chargeable against her share in the conjugal property, (See pp. 294-297, Vol. I, Record, Court of First Instance), and the court in its said error found that there exists no community property owned by the decedent and his former wife at the time the decree of divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact contained therein, i.e. that there was no community property acquired by the testator and Magdalena C. Bohanan during their converture.

Moreover, the court below had found that the testator and Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the court below had already found that there was no conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator.

The most important issue is the claim of the testator's children, Edward and Mary Lydia, who had received legacies in the amount of P6,000 each only, and, therefore, have not been given their shares in the estate which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator. Is the failure old the testator to give his children two-thirds of the estate left by him at the time of his death, in accordance with the laws of the forum valid?

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides that successional rights to personal property are to be earned by the national law of the person whose succession is in question. Says the law on this point:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the extent of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property and the country in which it is found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16, new Civil Code.)

In the proceedings for the probate of the will, it was found out and it was decided that the testator was a citizen of the State of Nevada because he had selected this as his domicile and his permanent residence. (See Decision dated April 24, 1950, supra). So the question at issue is whether the estementary dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will (Sec. 9905, Complied Nevada Laws of 1925, supra). It does not appear that at time of the hearing of the project of partition, the above-quoted provision was introduced in evidence, as it was the executor's duly to do. The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules, which are as follows:

SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a

copy tested by the officer having the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. . . . (Rule 123).

We have, however, consulted the records of the case in the court below and we have found that during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws. was introduced in evidence by appellant's (herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II, and t.s.n. pp. 24-44, Records, Court of First Instance). Again said laws presented by the counsel for the executor and admitted by the Court as Exhibit "B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo (se Records, Court of First Instance, Vol. 1).

In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition.

As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be governed by the national law of the testator, and as it has been decided and it is not disputed that the national law of the testator is that of the State of Nevada, already indicated above, which allows a testator to dispose of all his property according to his will, as in the case at bar, the order of the court approving the project of partition made in accordance with the testamentary provisions, must be, as it is hereby affirmed, with costs against appellants.

56 SCRA 266 – Civil Law – Preliminary Title – Application of Laws – Nationality Principle

In November 1952, Linnie Jane Hodges, an American citizen from Texas made a will. In May

1957, while she was domiciled here in the Philippines (Iloilo City), she died.

In her will, she left all her estate in favor of her husband, Charles Newton Hodges. Linnie

however also stated in her will that should her husband later die, said estate shall be turned

over to her brother and sister.

In December 1962, Charles died (it appears he was also domiciled here). Atty. Leon Gellada,

the lawyer of Charles filed a motion before the probate court (there was an ongoing probate on

the will of Linnie) so that a certain Avelina Magno may be appointed as the administratrix of the

estate. Magno was the trusted employee of the Hodges when they were alive. Atty. Gellada

manifested that Charles himself left a will but the same was in an iron trunk in Charles’ office.

Hence, in the meantime, he’d like to have Magno appointed as administratrix. Judge Venicio

Escolin approved the motion.

Later, Charles’ will was found and so a new petition for probate was filed for the said will. Since

said will basically covers the same estate, Magno, as admininistratrix of Linnie’s estate opposed

the said petition. Eventually, the probate of Charles’ will was granted. Eventually still, the

Philippine Commercial and Industrial Bank was appointed as administrator. But Magno refused

to turn over the estate.

Magno contended that in her will, Linnie wanted Charles to turn over the property to Linnie’s

brother and sister and since that is her will, the same must be respected. Magno also contended

that Linnie was a Texan at the time of her death (an alien testator); that under Article 16 of the

Civil Code, successional rights are governed by Linnie’s national law; that under Texas law,

Linnie’s will shall be respected regardless of the presence of legitimes (Charles’ share in the

estate).

PCIB argued that the law of Texas refers the matter back to Philippine laws because Linnie was

domiciled outside Texas at the time of her death (applying the renvoi doctrine).

ISSUE: Whether or not Texas Law should apply.

HELD: The Supreme Court remanded the case back to the lower court. Both parties failed to

adduce proof as to the law of Texas. The Supreme Court held that for what the Texas law is on

the matter, is a question of fact to be resolved by the evidence that would be presented in the

probate court. The Supreme Court however emphasized that Texas law at the time of

Linnie’s death is the law applicable (and not said law at any other time). NOTE: Dynamics of

law.

AZNAR vs GARCIA 7 SCRA 95

Facts:

                Edward S. Christensen, though born in New York, migrated to California where he

resided and consequently was considered a California Citizen for a period of nine years to 1913.

He came to the Philippines where he became a domiciliary until the time of his death. However,

during the entire period of his residence in this country, he had always considered himself as a

citizen of California.

                In his will, executed on March 5, 1951, he instituted an acknowledged natural

daughter, Maria Lucy Christensen as his only heir but left a legacy of some money in favor of

Helen Christensen Garcia who, in a decision rendered by the Supreme Court had been

declared as an acknowledged natural daughter of his. Counsel of Helen claims that under Art.

16 (2) of the civil code, California law should be applied, the matter is returned back to the law

of domicile, that Philippine law is ultimately applicable, that the share of Helen must be

increased in view of successional rights of illegitimate children under Philippine laws. On the

other hand, counsel for daughter Maria , in as much that it is clear under Art, 16 (2) of the  Mew

Civil Code, the national of the deceased must apply, our courts must apply internal law of

California on the matter. Under California law, there are no compulsory heirs and consequently

a testator should dispose any property possessed by him in absolute dominion.

 

Issue:

                Whether Philippine Law or California Law should apply.

 

Held:

                The Supreme Court deciding to grant more successional rights to Helen Christensen

Garcia said in effect that there be two rules in California on the matter.

1.       The conflict rule which should apply to Californian’s outside the California, and

2.       The internal Law which should apply to California domiciles in califronia.

The California conflict rule, found on Art. 946 of the California Civil code States that “if

there is no law to the contrary in the place where personal property is situated, it is deemed to

follow the decree of its owner and is governed by the law of the domicile.”

Christensen being domiciled outside california, the law of his domicile, the Philippines is

ought to be followed.

Wherefore, the decision appealed is reversed and case is remanded to the lower court

with instructions that partition be made as that of the Philippine law provides.