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G.R. No.

L-35694 December 23, 1933

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.

Office of the Solicitor-General Hilado for appellants.


Allison D. Gibbs in his own behalf.

BUTTE, J.:

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:law phil.net

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.

Avancea, C. J., Malcolm, Villa-Real, Abad Santos, Hull, and Vickers, JJ., concur.
Street, J., dissents.

Grant v. McAuliffe , 41 Cal.2d 859


[Sac. No. 6416. In Bank. Dec. 23, 1953.]
WILLIAM R. GRANT, Appellant, v. FRANK H. McAULIFFE, as Administrator, etc., Respondent.
[Sac. No. 6417. In Bank. Dec. 23, 1953]
RUSSELL M. MANCHESTER, Appellant, v. FRANK H. McAULIFFE, as Administrator, etc.,
Respondent.
[Sac. No. 6418. In Bank. Dec. 23, 1953.]
DOYLE O. JENSEN, Appellant, v. FRANK H. McAULIFFE, as Administrator, etc., Respondent.
COUNSEL
J. Oscar Goldstein, P. M. Barceloux, Burton J. Goldstein and Goldstein, Barceloux &
Goldstein for Appellants.
Honey & Mayall and John J. Hurley for Respondent.
OPINION
TRAYNOR, J.
On December 17, 1949, plaintiffs W. R. Grant and R. M. Manchester were riding west on
United States Highway 66 in an automobile owned and driven by plaintiff D. O. Jensen.
Defendant's decedent, W. W. Pullen, was driving his automobile east on the same highway.
The two automobiles collided at a point approximately 15 miles east of Flagstaff, Arizona.
Jensen's automobile was badly damaged, and Jensen, Grant, and Manchester suffered
personal injuries. Nineteen days later, on January 5, 1950, Pullen died as a result of injuries
received in the collision. Defendant McAuliffe was appointed administrator of his estate
and letters testamentary were issued by the Superior Court of Plumas County. All three
plaintiffs, as well as Pullen, were residents of California at the time of the collision. After
the appointment of defendant, each plaintiff presented his claim for damages. Defendant
rejected all three claims, and on December 14, 1950, each plaintiff filed an action against
the estate of Pullen to recover damages for the injuries caused by the alleged negligence of
the decedent. Defendant filed a general demurrer and a motion to abate each of the
complaints. The trial court entered an order granting the motion in each case. Each plaintiff
has appealed. The appeals are [41 Cal.2d 862] based on the same ground and have
therefore been consolidated.
The basic question is whether plaintiffs' causes of action against Pullen survived his death
and are maintainable against his estate. The statutes of this state provide that causes of
action for negligent torts survive the death of the tort feasor and can be maintained against
the administrator or executor of his estate. (Civ. Code, 956; Code Civ. Proc., 385; Prob.
Code, 573, 574.) Defendant contends, however, that the survival of a cause of action is
a matter of substantive law, and that the courts of this state must apply the law of Arizona
governing survival of causes of action. There is no provision for survival of causes of action
in the statutes of Arizona, although there is a provision that in the event of the death of a
party to a pending proceeding his personal representative can be substituted as a party to
the action (Arizona Code, 1939, 21-534), if the cause of action survives. (Arizona Code,
1939, 21-530.) The Supreme Court of Arizona has held that if a tort action has not been
commenced before the death of the tort feasor a plea in abatement must be sustained.
(McClure v. Johnson, 50 Ariz. 76, 82 [69 P.2d 573]. See, also, McLellan v. Automobile Ins.
Co. of Hartford, Conn., 80 F.2d 344.)
[1] Thus, the answer to the question whether the causes of action against Pullen survived
and are maintainable against his estate depends on whether Arizona or California law
applies. In actions on torts occurring abroad, the courts of this state determine the
substantive matters inherent in the cause of action by adopting as their own the law of the
place where the tortious acts occurred, unless it is contrary to the public policy of this
state. (Loranger v. Nadeau, 215 Cal. 362 [10 P.2d 63, 84 A.L.R. 1264].) [2] "[N]o court can
enforce any law but that of its own sovereign, and, when a suitor comes to a jurisdiction
foreign to the place of the tort, he can only invoke an obligation recognized by that
sovereign. A foreign sovereign under civilized law imposes an obligation of its own as
nearly homologous as possible to that arising in the place where the tort occurs." (Learned
Hand, J., in Guinness v. Miller, 291 F. 769, 770.) [3] But the forum does not adopt as its
own the procedural law of the place where the tortious acts occur. It must, therefore, be
determined whether survival of causes of action is procedural or substantive for conflict of
laws purposes. [41 Cal.2d 863]
This question is one of first impression in this state. The precedents in other jurisdictions
are conflicting. In many cases it has been held that the survival of a cause of action is a
matter of substance and that the law of the place where the tortious acts occurred must be
applied to determine the question. (Burg v. Knox, 334 Mo. 329, 335-338 [67 S.W.2d 96];
Chubbuck v. Holloway, 182 Minn. 225, 227-230 [234 N.W. 314, 868], followed in Kerston
v. Johnson, 185 Minn. 591, 593 [242 N.W. 329]; Davis v. New York & N.E. R. Co., 143 Mass.
301, 305-306 [9 N.E. 815]; Hyde v. Wabash, St. L. & Pac. Ry. Co., 61 Iowa 441, 444 [16
N.W. 351, 47 Am.St.Rep. 820] [but see Gordon v. Chicago, R. I. & P. Ry. Co., 154 Iowa 449,
451 [134 N.W. 1057, Ann.Cas. 1915B 113]]; Mexican Cent. Ry. Co. v. Goodman, 20
Tex.Civ.App. 109, 110 [48 S.W. 778] [but see Texas & Pac. Ry. Co. v. Richards, 68 Tex.
375, 378 [4 S.W. 627]]; Needham v. Grand Trunk Ry. Co., 38 Vt. 294, 307-311; Ormsby v.
Chase, 290 U.S. 387, 388 [54 S.Ct. 211, 78 L.Ed. 378], followed in McIntosh v. General
Chem. Defense Corp., 67 F.Supp. 63, 64, Woollen v. Lorenz, 98 F.2d 261, 262 [68 App.D.C.
389], Gray v. Blight, 112 F.2d 696, 697-698, and Muir v. Kessinger, 45 F.Supp. 116, 117;
Orr v. Ahern, 107 Conn. 174, 178-180 [139 A. 691]; Potter v. First Nat. Bank, 107 N.J.Eq.
72, 74-75 [151 A. 546], followed in Friedman v. Greenberg, 110 N.J.L. 462, 464-466 [166
A. 119], and Rathgeber v. Sommerhalder, 112 N.J.L. 546, 548-549 [171 A. 835]; Summer v.
Brown, 312 Pa. 124, 127 [167 A. 315].) The Restatement of the Conflict of Laws, section
390, is in accord. It should be noted, however, that the majority of the foregoing cases
were decided after drafts of the Restatement were first circulated in 1929. Before that time,
it appears that the weight of authority was that survival of causes of action is procedural
and governed by the domestic law of the forum. (Austin v. Pittsburg, C., C., & St. L. Ry. Co.,
122 Ky. 304, 309-310 [91 S.W. 742]; Baltimore & Ohio R. Co. v. Joy, 173 U.S. 226, 231 [19
S.Ct. 387, 43 L.Ed. 677]; Clough v. Gardiner, 111 Misc. 244, 248-249 [182 N.Y.S. 803];
Herzog v. Stern, 264 N.Y. 379, 383-384 [191 N.E. 23], followed in Demuth v. Griffin, 253
App.Div. 399, 401 [2 N.Y.S.2d 2], Domres v. Storms, 236 App.Div. 630 [260 N.Y.S. 335],
Silverman v. Rappaport, 165 Misc. 543, 545-546 [300 N.Y.S. 76], Taynton v. Vollmer, 242
App.Div. 854 [275 N.Y.S. 284]; Gordon v. Chicago, R. I. & P. Ry. Co., 154 Iowa 449, 451
[134 N.W. 1057]; In re Vilas' Estate, 166 Ore. 115, 123-124 [110 P.2d 940]; Martin v.
Baltimore & Ohio R. Co., 151 U.S. 673, [41 Cal.2d 864] 692-693 [14 S.Ct. 533, 38 L.Ed.
311]; Martin v. Wabash R. Co., 142 F. 650, 651 [73 C.C.A. 646, 6 Ann.Cas. 582]; Page v.
United Fruit Co., 3 F.2d 747, 754; Matter of Killough, 148 Misc. 73, 85-89 [265 N.Y.S.
301]; Texas & Pac. Ry. Co. v. Richards, 68 Tex. 375, 378 [4 S.W. 627]. See, also, Barker v.
Ladd, Fed.Cas. 990 [3 Sawy. 44]; Gaskins v. Bonfils, 4 F.Supp. 547, 551; Luster v.
Martin, 58 F.2d 537, 539-540; Portland Gold Mining Co. v. Stratton's Independence, Ltd.,
196 F. 714, 716-717; Whitten v. Bennett, 77 F. 271, 273; Winslow v. Domestic Engineering
Co., 20 F.Supp. 578, 579.) Many of the cases, decided both before and after the
Restatement, holding that survival is substantive and must be determined by the law of the
place where the tortious acts occurred, confused the problems involved in survival of
causes of action with those involved in causes of action for wrongful death. (See, for
example, the precedents on which the courts relied in Hyde v. Wabash, St. L. & Pac. Ry. Co.,
supra, 61 Iowa 441; Orr v. Ahern, supra, 107 Conn. 174; and Ormsby v. Chase, supra, 290
U.S. 387.) The problems are not analogous. (See Schumacher, "Rights of Action Under
Death and Survival Statutes," 23 Mich.L.Rev. 114, 116-117, 124-125.) [4] A cause of action
for wrongful death is statutory. It is a new cause of action vested in the widow or next of
kin, and arises on the death of the injured person. Before his death, the injured person
himself has a separate and distinct cause of action and, if it survives, the same cause of
action can be enforced by the personal representative of the deceased against the tort
feasor. [5] The survival statutes do not create a new cause of action, as do the wrongful
death statutes. (Needham v. Grand Trunk Ry. Co., supra, 38 Vt. 294, 303-306; Austin v.
Pittsburg, C., C., & St. L. Ry. Co., supra, 122 Ky. 304, 308-310; Martin v. Baltimore & Ohio
R. Co., supra, 151 U.S. 673, 696, 698, 701; Patton v. Brady, 184 U.S. 608, 612-615 [22
S.Ct. 493, 46 L.Ed. 713]; Spring v. Webb, 227 F. 481, 484-485; 1 C.J.S., p. 211;
Schumacher, supra, 23 Mich.L.Rev. 114, 124- 125. The English courts have reached the
same result in construing similar statutes: Davies v. Powell Dufferin Assoc. Collieries, Ltd.,
[1942] A.C. 601, 610-616; Rose v. Ford, [1937] A.C. 826, 852, 855-856. See, also,
Bradshaw v. Lancashire and Yorkshire Ry. Co., [1875] 10 C.P. 189, 192-193.) They merely
prevent the abatement of the cause of action of the injured person, and provide for its
enforcement by or against the personal representative of the deceased. [6] They are
analogous to statutes of limitation, which [41 Cal.2d 865] are procedural for conflict of
laws purposes and are governed by the domestic law of the forum. (Biewend v. Biewend, 17
Cal.2d 108, 114 [109 P.2d 701, 132 A.L.R. 1264].) [7] Thus, a cause of action arising in
another state, by the laws of which an action cannot be maintained thereon because of
lapse of time, can be enforced in California by a citizen of this state, if he has held the
cause of action from the time it accrued. (Code Civ. Proc., 361; Stewart v. Spaulding, 72
Cal. 264, 266 [13 P. 661]. See, also, Biewend v. Biewend, supra,; and Western Coal &
Mining Co. v. Jones, 27 Cal.2d 819, 828 [167 P. 719, 164 A.L.R. 685].)
Defendant contends, however, that the characterization of survival of causes of action as
substantive or procedural is foreclosed by Cort v. Steen, 36 Cal.2d 437, 442 [224 P.2d
723], where it was held that the California survival statutes were substantive and therefore
did not apply retroactively. The problem in the present proceeding, however, is not
whether the survival statutes apply retroactively, but whether they are substantive or
procedural for purposes of conflict of laws. [8] " 'Substance' and 'procedure' ... are not legal
concepts of invariable content" (Black Diamond Steamship Corp. v. Stewart & Sons, 336 U.S.
386, 397 [69 S.Ct. 622, 93 L.Ed. 754]. See, also, Guaranty Trust Co. v. York, 326 U.S. 99,
109 [65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231]; Sampson v. Channell, 110 F.2d 754,
756, 758; Estate of Caravas, 40 Cal.2d 33, 41-42 [250 P.2d 593]; W. W. Cook, The Logical
and Legal Bases of the Conflict of Laws (1942), c. 6: "Substance and Procedure"), and a
statute or other rule of law will be characterized as substantive or procedural according to
the nature of the problem for which a characterization must be made.
[9] Defendant also contends that a distinction must be drawn between survival of causes of
action and revival of actions, and that the former are substantive but the latter procedural.
On the basis of this distinction, defendant concludes that many of the cases cited above as
holding that survival is procedural and is governed by the domestic law of the forum do
not support this position, since they involved problems of "revival" rather than "survival."
The distinction urged by defendant is not a valid one. Most of the statutes involved in the
cases cited provided for the "revival" of a pending proceeding by or against the personal
representative of a party thereto should he die while the action is still [41 Cal.2d 866]
pending. But in most "revival" statutes, substitution of a personal representative in place of
a deceased party is expressly conditioned on the survival of the cause of action itself. fn.
1 [10] If the cause of action dies with the tort feasor, a pending proceeding must be
abated. A personal representative cannot be substituted in the place of a deceased party
unless the cause of action is still subsisting. In cases where this substitution has occurred,
the courts have looked to the domestic law of the forum to determine whether the cause of
action survives as well as to determine whether the personal representative can be
substituted as a party to the action. (Gordon v. Chicago, R. I. & P. Ry. Co., supra, 154 Iowa
449, 451; Martin v. Baltimore & Ohio R. Co., supra, 151 U.S. 673, 692; Martin v. Wabash R.
Co., supra, 142 F. 650, 651; Baltimore & Ohio R. Co. v. Joy, supra, 173 U.S. 226, 231.)
Defendant's contention would require the courts to look to their local statutes to determine
"revival" and to the law of the place where the tort occurred to determine "survival," but we
have found no case in which this procedure was followed.
Since we find no compelling weight of authority for either alternative, we are free to make a
choice on the merits. [11] We have concluded that survival of causes of action should be
governed by the law of the forum. [12] Survival is not an essential part of the cause of
action itself but relates to the procedures available for the enforcement of the legal claim
for damages. Basically the question is one of the administration of decedents' estates,
which is a purely local proceeding. The problem here is whether the causes of action that
these plaintiffs had against Pullen before his death survive as liabilities of his estate.
Section 573 of the Probate Code provides that "all actions founded ... upon any liability for
physical injury, death or injury to property, may be maintained by or against executors and
administrators in all cases in which the cause of action ... is one which would not abate
upon the death of their respective testators or intestates. ..." Civil Code, section 956,
provides that [41 Cal.2d 867] "A thing in action arising out of a wrong which results in
physical injury to the person ... shall not abate by reason of the death of the wrongdoer ...,"
and causes of action for damage to property are maintainable against executors and
administrators under section 574 of the Probate Code. (See Hunt v. Authier, 28 Cal.2d 288,
292-296 [169 P.2d 913, 171 A.L.R. 1379]; Cort v. Steen, supra, 36 Cal.2d 437, 439-440.)
Decedent's estate is located in this state, and letters of administration were issued to
defendant by the courts of this state. [13] The responsibilities of defendant, as
administrator of Pullen's estate, for injuries inflicted by Pullen before his death are
governed by the laws of this state. This approach has been followed in a number of well-
reasoned cases. (Matter of Killough, supra, 148 Misc. 73, 85-89; Herzog v. Stern, supra,
264 N.Y. 379; In re Vilas' Estate, supra, 166 Ore. 115; Martin v. Baltimore & Ohio R. Co.,
supra, 151 U.S. 673; Whitten v. Bennett, supra, 77 F. 271, 273.) It retains control of the
administration of estates by the local Legislature and avoids the problems involved in
determining the administrator's amenability to suit under the laws of other states. [14] The
common law doctrine actio personalis moritur cum persona had its origin in a penal
concept of tort liability. (See Prosser, Law of Torts 950-951; Pollock, The Law of Torts
(10th ed.) 64, 68.) Today, tort liabilities of the sort involved in these actions are regarded
as compensatory. [15] When, as in the present case, all of the parties were residents of this
state, and the estate of the deceased tort feasor is being administered in this state,
plaintiff's right to prosecute their causes of action is governed by the laws of this state
relating to administration of estates.
The orders granting defendant's motions to abate are reversed, and the causes remanded
for further proceedings.
Gibson, C.J., Shenk, J., and Carter, J., concurred.
SCHAUER, J.
I dissent. In Cort v. Steen (1950), 36 Cal.2d 437, 442 [224 P.2d 723], this court held that
under the doctrine of nonsurvivability the abatement of an action by the death of the
injured person through the tort feasor's act or otherwise, or by the death of the tort feasor,
abates the wrong as well; that the effect of a survival statute is to create a right or cause of
action rather than to either continue an existing right or revive or extend a remedy
theretofore accrued [41 Cal.2d 868] for the redress of an existing wrong; and that
consequently a survival statute enacted after death of the tort feasor did not apply to the
tort or cause of action involved. And more recently, in Estate of Arbulich (1953), ante, pp.
86, 88-89 [257 P.2d 433], we recognized the rule that the burden of proof provisions of
the Probate Code sections (259 et seq) dealing with reciprocal inheritance rights are not
merely procedural in nature, but, rather, are substantive statutes regulating succession,
and that consequently such rights are to be determined by the law as it existed on the date
of decedent's death. (See, also, Estate of Giordano (1948), 85 Cal.App.2d 588, 592, 594
[193 P.2d 771].)
Irreconcilably inconsistent with the cases cited in the preceding paragraph, the majority
now hold that "Survival is not an essential part of the cause of action itself but relates to
the procedures available for the enforcement of the legal claim for damages. Basically the
question is one of the administration of decedents' estates, which is a purely local
proceeding." If the above stated holding is to prevail, then for the sake of the law's integrity
and clarity, and in fairness to lower courts and to counsel, the cited cases should be
expressly overruled. But even more regrettable than the failure to either follow or
unequivocally overrule the cited cases is the character of the "rule" which is now
promulgated: the majority assert that henceforth "a statute or other rule of law will be
characterized as substantive or procedural according to the nature of the problem for
which a characterization must be made," thus suggesting that the court will no longer be
bound to consistent enforcement or uniform application of "a statute or other rule of law"
but will instead apply one "rule" or another as the untrammeled whimsy of the majority
may from time to time dictate, "according to the nature of the problem" as they view it in a
given case. This concept of the majority strikes deeply at what has been our proud boast
that ours was a government of laws rather than of men.
Although any administration of an estate in the courts of this state is local in a procedural
sense, the rights and claims both in favor of and against such an estate are substantive in
nature, and vest irrevocably at the date of death. (Estate of Patterson (1909), 155 Cal. 626,
634 [102 P. 941, 132 Am.St.Rep. 116, 18 Ann.Cas. 625, 26 L.R.A.N.S. 654].) Since this
court has clearly held that a right or cause of action created by a survival statute is likewise
substantive, rather than procedural, we should hold, if we would follow the law, [41 Cal.2d
869] that the trial court properly granted defendant's motions to abate.
Spence, J., concurred.
EDMONDS, J.
I concur in the conclusion that the order granting the defendant's motion to abate should
be affirmed.
FN 1. For example, Code Civ. Proc., 385: "An action or proceeding does not abate by the
death, or any disability of a party ... if the cause of action survive or continue." (Italics
added.) See also 28 U.S.C.A., Rule 25(a)(1) [leg. hist., U.S.Rev.Stat., 955 (1874); Judiciary
Act of 1789, 31]: "If a party dies and the claim is not thereby extinguished, the court ...
may order substitution ..." of the personal representative. (Italics added.) The exact
language of Rule 25(a)(1) is repeated in Arizona Code, 1939, 21-530.

LWV CONSTRUCTION G.R. No. 172342


CORPORATION,
Present:
Petitioner,

QUISUMBING, J., Chairperson,

CARPIO MORALES,

CHICO-NAZARIO,
- versus -
LEONARDO-DE CASTRO, and

BRION, JJ.

MARCELO B. DUPO, Promulgated:

Respondent. July 13, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
QUISUMBING, J.:

Petitioner LWV Construction Corporation appeals the


[1]
Decision dated December 6, 2005 of the Court of Appeals in CA-G.R. SP No.
76843 and its Resolution[2] 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 respondents 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 managements 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:


xxxx

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.)

xxxx

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 complaint[7] 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:
xxxx

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.)

xxxx

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 Payevery 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 13[10] 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. Respondents 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 attorneys fees
of P64,856.27 or a total of P713,418.96.[13]

The Labor Arbiter ruled that respondents seven-year employment with


MMG had sufficiently oriented him on the benefits given to workers; that
petitioner was unable to convincingly refute respondents claim that MMG offered
him longevity pay before he went on vacation on May 1, 1999; and that
respondents 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 Arbiters 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 petitioners
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
respondents contract ended.

Petitioner insists that prescription barred respondents 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
respondents 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 Arbiters
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 respondents 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
months pay for each of the first five years and one months 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 respondents 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. Respondents position paper mentioned how his long service award or
longevity pay is computed: half-months pay per year of service and one-months
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
respondents severance pay of SR2,786 was his service award under Article 87.

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

Service Award = SR2,786.04

Respondents service award for the sixth contract is equivalent only to half-
months pay plus the proportionate amount for the additional nine days of service
he rendered after one year. Respondents 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 respondents 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, respondents claim that his monthly compensation is
SR10,248.92[26] 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 respondents 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 respondents 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.
xxxx

In Cadalin v. POEAs 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. POEAs 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. 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.

xxxx

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 forums 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]

xxxx

Thus, in our considered view, respondents 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 respondents 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.
G.R. No. L-104776 December 5, 1994

BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, and the rest of


1,767 NAMED-COMPLAINANTS, thru and by their Attorney-in-fact, Atty. GERARDO A. DEL
MUNDO, petitioners,
vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION'S ADMINISTRATOR, NATIONAL
LABOR RELATIONS COMMISSION, BROWN & ROOT INTERNATIONAL, INC. AND/OR ASIA
INTERNATIONAL BUILDERS CORPORATION, respondents.

G.R. Nos. 104911-14 December 5, 1994

BIENVENIDO M. CADALIN, ET AL., petitioners,


vs.
HON. NATIONAL LABOR RELATIONS COMMISSION, BROWN & ROOT INTERNATIONAL, INC.
and/or ASIA INTERNATIONAL BUILDERS CORPORATION, respondents.

G.R. Nos. 105029-32 December 5, 1994

ASIA INTERNATIONAL BUILDER CORPORATION and BROWN & ROOT INTERNATIONAL,


INC., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, BIENVENIDO M. CADALIN, ROLANDO M.
AMUL, DONATO B. EVANGELISTA, ROMEO PATAG, RIZALINO REYES, IGNACIO DE VERA,
SOLOMON B. REYES, JOSE M. ABAN, EMIGDIO N. ABARQUEZ, ANTONIO ACUPAN, ROMEO
ACUPAN, BENJAMIN ALEJANDRE, WILFREDO D. ALIGADO, MARTIN AMISTAD, JR.,
ROLANDO B. AMUL, AMORSOLO ANADING, ANTONIO T. ANGLO, VICENTE ARLITA,
HERBERT AYO, SILVERIO BALATAZO, ALFREDO BALOBO, FALCONERO BANAAG, RAMON
BARBOSA, FELIX BARCENA, FERNANDO BAS, MARIO BATACLAN, ROBERTO S. BATICA,
ENRICO BELEN, ARISTEO BICOL, LARRY C. BICOL, PETRONILLO BISCOCHO, FELIX M.
BOBIER, DIONISIO BOBONGO, BAYANI S. BRACAMANTE, PABLITO BUSTILLO, GUILLERMO
CABEZAS, BIENVENIDO CADALIN, RODOLFO CAGATAN, AMANTE CAILAO, IRENEO
CANDOR, JOSE CASTILLO, MANUEL CASTILLO, REMAR CASTROJERES, REYNALDO
CAYAS, ROMEO CECILIO, TEODULO CREUS, BAYANI DAYRIT, RICARDO DAYRIT, ERNESTO
T. DELA CRUZ, FRANCISCO DE GUZMAN, ONOFRE DE RAMA, IGNACIO DE VERA,
MODESTO DIZON, REYNALDO DIZON, ANTONIO S. DOMINGUEZ, GILBERT EBRADA,
RICARDO EBRADA, ANTONIO EJERCITO, JR., EDUARTE ERIDAO, ELADIO ESCOTOTO,
JOHN ESGUERRA, EDUARDO ESPIRITU, ERNESTO ESPIRITU, RODOLFO ESPIRITU,
NESTOR M. ESTEVA, BENJAMIN ESTRADA, VALERIO EVANGELISTA, OLIGARIO
FRANCISCO, JESUS GABAWAN, ROLANDO GARCIA, ANGEL GUDA, PACITO HERNANDEZ,
ANTONIO HILARIO, HENRY L. JACOB, HONESTO JARDINIANO, ANTONIO JOCSON,
GERARDO LACSAMANA, EFREN U. LIRIO LORETO LONTOC, ISRAEL LORENZO,
ALEJANDRO LORINO, JOSE MABALAY, HERMIE MARANAN, LEOVIGILDO MARCIAL, NOEL
MARTINEZ, DANTE MATREO, LUCIANO MELENDEZ, RENATO MELO, FRANCIS MEDIODIA,
JOSE C. MILANES, RAYMUNDO C. MILAY, CRESENCIANO MIRANDA, ILDEFONSO C.
MOLINA, ARMANDO B. MONDEJAR RESURRECCION D. NAZARENO, JUAN OLINDO,
FRANCISCO R. OLIVARES, PEDRO ORBISTA, JR., RICARDO ORDONEZ, ERNIE PANCHO,
JOSE PANCHO, GORGONIO P. PARALA, MODESTO PINPIN, JUANITO PAREA, ROMEO I.
PATAG, FRANCISCO PINPIN, LEONARDO POBLETE, JAIME POLLOS, DOMINGO PONDALIS,
EUGENIO RAMIREZ, LUCIEN M. RESPALL, GAUDENCIO RETANAN, JR., TOMAS B.
RETENER, ALVIN C. REYES, RIZALINO REYES, SOLOMON B. REYES, VIRGILIO G. RICAZA,
RODELIO RIETA, JR., BENITO RIVERA, JR., BERNARDO J. ROBILLOS, PABLO A. ROBLES,
JOSE ROBLEZA, QUIRINO RONQUILLO, AVELINO M. ROQUE, MENANDRO L. SABINO,
PEDRO SALGATAR, EDGARDO SALONGA, NUMERIANO SAN MATEO, FELIZARDO DE LOS
SANTOS, JR., GABRIEL SANTOS, JUANITO SANTOS, PAQUITO SOLANTE, CONRADO A.
SOLIS, JR., RODOLFO SULTAN, ISAIAS TALACTAC, WILLIAM TARUC, MENANDRO
TEMPROSA, BIENVENIDO S. TOLENTINO, BENEDICTO TORRES, MAXIMIANO TORRES,
FRANCISCO G. TRIAS, SERGIO A. URSOLINO, ROGELIO VALDEZ, LEGORIO E. VERGARA,
DELFIN VICTORIA, GILBERT VICTORIA, HERNANE VICTORIANO, FRANCISCO
VILLAFLORES, DOMINGO VILLAHERMOSA, ROLANDO VILLALOBOS, ANTONIO VILLAUZ,
DANILO VILLANUEVA, ROGELIO VILLANUEVA, ANGEL VILLARBA, JUANITO VILLARINO,
FRANCISCO ZARA, ROGELIO AALAGOS, NICANOR B. ABAD, ANDRES ABANES, REYNALDO
ABANES, EDUARDO ABANTE, JOSE ABARRO, JOSEFINO ABARRO, CELSO S. ABELANIO,
HERMINIO ABELLA, MIGUEL ABESTANO, RODRIGO G. ABUBO, JOSE B. ABUSTAN, DANTE
ACERES, REYNALDO S. ACOJIDO, LEOWILIN ACTA, EUGENIO C. ACUEZA, EDUARDO
ACUPAN, REYNALDO ACUPAN, SOLANO ACUPAN, MANUEL P. ADANA, FLORENTINO R.
AGNE, QUITERIO R. AGUDO, MANUEL P. AGUINALDO, DANTE AGUIRRE, HERMINIO
AGUIRRE, GONZALO ALBERTO, JR., CONRADO ALCANTARA, LAMBERTO Q. ALCANTARA,
MARIANITO J. ALCANTARA, BENCIO ALDOVER, EULALIO V. ALEJANDRO, BENJAMIN
ALEJANDRO, EDUARDO L. ALEJANDRO, MAXIMINO ALEJANDRO, ALBERTO ALMENAR,
ARNALDO ALONZO, AMADO ALORIA, CAMILO ALVAREZ, MANUEL C. ALVAREZ, BENJAMIN
R. AMBROCIO, CARLOS AMORES, BERNARD P. ANCHETA, TIMOTEO O. ANCHETA,
JEOFREY ANI, ELINO P. ANTILLON, ARMANDRO B. ANTIPONO, LARRY T. ANTONIO,
ANTONIO APILADO, ARTURO P. APILADO, FRANCISCO APOLINARIO, BARTOLOME M.
AQUINO, ISIDRO AQUINO, PASTOR AQUINO, ROSENDO M. AQUINO, ROBERTO
ARANGORIN, BENJAMIN O. ARATEA, ARTURO V. ARAULLO, PRUDENCIO ARAULLO,
ALEXANDER ARCAIRA, FRANCISCO ARCIAGA, JOSE AREVALO, JUANTO AREVALO,
RAMON AREVALO, RODOLFO AREVALO, EULALIO ARGUELLES, WILFREDO P. ARICA,
JOSE M. ADESILLO, ANTONIO ASUNCION, ARTEMIO M. ASUNCION, EDGARDO ASUNCION,
REXY M. ASUNCION, VICENTE AURELIO, ANGEL AUSTRIA, RICARDO P. AVERILLA, JR.,
VIRGILIO AVILA, BARTOLOME AXALAN, ALFREDO BABILONIA, FELIMON BACAL, JOSE L.
BACANI, ROMULO R. BALBIERAN, VICENTE BALBIERAN, RODOLFO BALITBIT, TEODORO
Y. BALOBO, DANILO O. BARBA, BERNARDO BARRO, JUAN A. BASILAN, CEFERINO
BATITIS, VIVENCIO C. BAUAN, GAUDENCIO S. BAUTISTA, LEONARDO BAUTISTA, JOSE D.
BAUTISTA, ROSTICO BAUTISTA, RUPERTO B. BAUTISTA, TEODORO S. BAUTISTA,
VIRGILIO BAUTISTA, JESUS R. BAYA, WINIEFREDO BAYACAL, WINIEFREDO BEBIT, BEN G.
BELIR, ERIC B. BELTRAN, EMELIANO BENALES, JR., RAUL BENITEZ, PERFECTO BENSAN,
IRENEO BERGONIO, ISABELO BERMUDEZ, ROLANDO I. BERMUDEZ, DANILO BERON,
BENJAMIN BERSAMIN, ANGELITO BICOL, ANSELMO BICOL, CELESTINO BICOL, JR.,
FRANCISCO BICOL, ROGELIO BICOL, ROMULO L. BICOL, ROGELIO BILLIONES, TEOFILO N.
BITO, FERNANDO BLANCO, AUGUSTO BONDOC, DOMINGO BONDOC, PEPE S. BOOC,
JAMES R. BORJA, WILFREDO BRACEROS, ANGELES C. BRECINO, EURECLYDON G.
BRIONES, AMADO BRUGE, PABLITO BUDILLO, ARCHIMEDES BUENAVENTURA, BASILIO
BUENAVENTURA, GUILLERMO BUENCONSEJO, ALEXANDER BUSTAMANTE, VIRGILIO
BUTIONG, JR., HONESTO P. CABALLA, DELFIN CABALLERO, BENEDICTO CABANIGAN,
MOISES CABATAY, HERMANELI CABRERA, PEDRO CAGATAN, JOVEN C. CAGAYAT,
ROGELIO L. CALAGOS, REYNALDO V. CALDEJON, OSCAR C. CALDERON, NESTOR D.
CALLEJA, RENATO R. CALMA, NELSON T. CAMACHO, SANTOS T. CAMACHO, ROBERTO
CAMANA, FLORANTE C. CAMANAG EDGARDO M. CANDA, SEVERINO CANTOS, EPIFANIO
A. CAPONPON, ELIAS D. CARILLO, JR., ARMANDO CARREON, MENANDRO M. CASTAEDA,
BENIGNO A. CASTILLO, CORNELIO L. CASTILLO, JOSEPH B. CASTILLO, ANSELMO
CASTILLO, JOAQUIN CASTILLO, PABLO L. CASTILLO, ROMEO P. CASTILLO, SESINANDO
CATIBOG, DANILO CASTRO, PRUDENCIO A. CASTRO, RAMO CASTRO, JR., ROMEO A. DE
CASTRO, JAIME B. CATLI, DURANA D. CEFERINO, RODOLFO B. CELIS, HERMINIGILDO
CEREZO, VICTORIANO CELESTINO, BENJAMIN CHAN, ANTONIO C. CHUA, VIVENCIO B.
CIABAL, RODRIGO CLARETE, AUGUSTO COLOMA, TURIANO CONCEPCION, TERESITO
CONSTANTINO, ARMANDO CORALES, RENATO C. CORCUERA, APOLINAR CORONADO,
ABELARDO CORONEL, FELIX CORONEL, JR., LEONARDO CORPUZ, JESUS M. CORRALES,
CESAR CORTEMPRATO, FRANCISCO O. CORVERA, FRANCISCO COSTALES, SR.,
CELEDONIO CREDITO, ALBERTO A. CREUS, ANACLETO V. CRUZ, DOMINGO DELA CRUZ,
AMELIANO DELA CRUZ, JR., PANCHITO CRUZ, REYNALDO B. DELA CRUZ, ROBERTO P.
CRUZ, TEODORO S. CRUZ, ZOSIMO DELA CRUZ, DIONISIO A. CUARESMA, FELIMON
CUIZON, FERMIN DAGONDON, RICHARD DAGUINSIN, CRISANTO A. DATAY, NICASIO
DANTINGUINOO, JOSE DATOON, EDUARDO DAVID, ENRICO T. DAVID, FAVIO DAVID,
VICTORIANO S. DAVID, EDGARDO N. DAYACAP, JOSELITO T. DELOSO, CELERINO DE
GUZMAN, ROMULO DE GUZMAN, LIBERATO DE GUZMAN, JOSE DE LEON, JOSELITO L. DE
LUMBAN, NAPOLEON S. DE LUNA, RICARDO DE RAMA, GENEROSO DEL ROSARIO,
ALBERTO DELA CRUZ, JOSE DELA CRUZ, LEONARDO DELOS REYES, ERNESTO F. DIATA,
EDUARDO A. DIAZ, FELIX DIAZ, MELCHOR DIAZ, NICANOR S. DIAZ, GERARDO C. DIGA,
CLEMENTE DIMATULAC, ROLANDO DIONISIO, PHILIPP G. DISMAYA, BENJAMIN
DOCTOLERO, ALBERTO STO. DOMINGO, BENJAMIN E. DOZA, BENJAMIN DUPA, DANILO C.
DURAN, GREGORIO D. DURAN, RENATO A. EDUARTE, GODOFREDO E. EISMA, ARDON B.
ELLO, UBED B. ELLO, JOSEFINO ENANO, REYNALDO ENCARNACION, EDGARDO
ENGUANCIO, ELIAS EQUIPANO, FELIZARDO ESCARMOSA, MIGUEL ESCARMOSA,
ARMANDO ESCOBAR, ROMEO T. ESCUYOS, ANGELITO ESPIRITU, EDUARDO S. ESPIRITU,
REYNALDO ESPIRITU, ROLANDO ESPIRITU, JULIAN ESPREGANTE, IGMIDIO ESTANISLAO,
ERNESTO M. ESTEBAN, MELANIO R. ESTRO, ERNESTO M. ESTEVA, CONRADO ESTUAR,
CLYDE ESTUYE, ELISEO FAJARDO, PORFIRIO FALQUEZA, WILFREDO P. FAUSTINO,
EMILIO E. FERNANDEZ, ARTEMIO FERRER, MISAEL M. FIGURACION, ARMANDO F. FLORES,
BENJAMIN FLORES, EDGARDO C. FLORES, BUENAVENTURA FRANCISCO, MANUEL S.
FRANCISCO, ROLANDO FRANCISCO, VALERIANO FRANCISCO, RODOLFO GABAWAN,
ESMERALDO GAHUTAN, CESAR C. GALANG, SANTIAGO N. GALOSO, GABRIEL GAMBOA,
BERNARDO GANDAMON, JUAN GANZON, ANDRES GARCIA, JR., ARMANDO M. GARCIA,
EUGENIO GARCIA, MARCELO L. GARCIA, PATRICIO L. GARCIA, JR., PONCIANO G. GARCIA,
PONCIANO G. GARCIA, JR., RAFAEL P. GARCIA, ROBERTO S. GARCIA, OSIAS G. GAROFIL,
RAYMUNDO C. GARON, ROLANDO G. GATELA, AVELINO GAYETA, RAYMUNDO GERON,
PLACIDO GONZALES, RUPERTO H. GONZALES, ROGELIO D. GUANIO, MARTIN V.
GUERRERO, JR., ALEXIS GUNO, RICARDO L. GUNO, FRANCISCO GUPIT, DENNIS J.
GUTIERREZ, IGNACIO B. GUTIERREZ, ANGELITO DE GUZMAN, JR., CESAR H. HABANA,
RAUL G. HERNANDEZ, REYNALDO HERNANDEZ, JOVENIANO D. HILADO, JUSTO HILAPO,
ROSTITO HINAHON, FELICISIMO HINGADA, EDUARDO HIPOLITO, RAUL L. IGNACIO,
MANUEL L. ILAGAN, RENATO L. ILAGAN, CONRADO A. INSIONG, GRACIANO G. ISLA,
ARNEL L. JACOB, OSCAR J. JAPITENGA, CIRILO HICBAN, MAXIMIANO HONRADES,
GENEROSO IGNACIO, FELIPE ILAGAN, EXPEDITO N. JACOB, MARIO JASMIN, BIENVENIDO
JAVIER, ROMEO M. JAVIER, PRIMO DE JESUS, REYNALDO DE JESUS, CARLOS A.
JIMENEZ, DANILO E. JIMENEZ, PEDRO C. JOAQUIN, FELIPE W. JOCSON, FELINO M.
JOCSON, PEDRO N. JOCSON, VALENTINO S. JOCSON, PEDRO B. JOLOYA, ESTEBAN P.
JOSE, JR., RAUL JOSE, RICARDO SAN JOSE, GERTRUDO KABIGTING, EDUARDO S.
KOLIMLIM, SR., LAURO J. LABAY, EMMANUEL C. LABELLA, EDGARDO B. LACERONA,
JOSE B. LACSON, MARIO J. LADINES, RUFINO LAGAC, RODRIGO LAGANAPAN, EFREN M.
LAMADRID, GUADENCIO LATANAN, VIRGILIO LATAYAN, EMILIANO LATOJA, WENCESLAO
LAUREL, ALFREDO LAXAMANA, DANIEL R. LAZARO, ANTONIO C. LEANO, ARTURO S.
LEGASPI, BENITO DE LEMOS, JR., PEDRO G. DE LEON, MANOLITO C. LILOC, GERARDO
LIMUACO, ERNESTO S. LISING, RENATO LISING, WILFREDO S. LISING, CRISPULO LONTOC,
PEDRO M. LOPERA, ROGELIO LOPERA, CARLITO M. LOPEZ, CLODY LOPEZ, GARLITO
LOPEZ, GEORGE F. LOPEZ, VIRGILIO M. LOPEZ, BERNARDITO G. LOREJA, DOMINGO B.
LORICO, DOMINGO LOYOLA, DANTE LUAGE, ANTONIO M. LUALHATI, EMMANUEL
LUALHATI, JR., LEONIDEZ C. LUALHATI, SEBASTIAN LUALHATI, FRANCISCO LUBAT,
ARMANDO LUCERO, JOSELITO L. DE LUMBAN, THOMAS VICENTE O. LUNA, NOLI
MACALADLAD, ALFREDO MACALINO, RICARDO MACALINO, ARTURO V. MACARAIG,
ERNESTO V. MACARAIG, RODOLFO V. MACARAIG, BENJAMIN MACATANGAY,
HERMOGENES MACATANGAY, RODEL MACATANGAY, ROMULO MACATANGAY, OSIAS Q.
MADLANGBAYAN, NICOLAS P. MADRID, EDELBERTO G. MAGAT, EFREN C. MAGBANUA,
BENJAMIN MAGBUHAT, ALFREDO C. MAGCALENG, ANTONIO MAGNAYE, ALFONSO
MAGPANTAY, RICARDO C. MAGPANTAY, SIMEON M. MAGPANTAY, ARMANDO M.
MAGSINO, MACARIO S. MAGSINO, ANTONIO MAGTIBAY, VICTOR V. MAGTIBAY, GERONIMO
MAHILUM, MANUEL MALONZO, RICARDO MAMADIS, RODOLFO MANA, BERNARDO A.
MANALILI, MANUEL MANALILI, ANGELO MANALO, AGUILES L. MANALO, LEOPOLDO
MANGAHAS, BAYANI MANIGBAS, ROLANDO C. MANIMTIM, DANIEL MANONSON, ERNESTO
F. MANUEL, EDUARDO MANZANO, RICARDO N. MAPA, RAMON MAPILE, ROBERTO C.
MARANA, NEMESIO MARASIGAN, WENCESLAO MARASIGAN, LEONARDO MARCELO,
HENRY F. MARIANO, JOEL MARIDABLE, SANTOS E. MARINO, NARCISO A. MARQUEZ,
RICARDO MARTINEZ, DIEGO MASICAMPO, AURELIO MATABERDE, RENATO MATILLA,
VICTORIANO MATILLA, VIRGILIO MEDEL, LOLITO M. MELECIO, BENIGNO MELENDEZ,
RENER J. MEMIJE, REYNALDO F. MEMIJE, RODEL MEMIJE, AVELINO MENDOZA, JR.,
CLARO MENDOZA, TIMOTEO MENDOZA, GREGORIO MERCADO, ERNANI DELA MERCED,
RICARDO MERCENA, NEMESIO METRELLO, RODEL MEMIJE, GASPAR MINIMO, BENJAMIN
MIRANDA, FELIXBERTO D. MISA, CLAUDIO A. MODESTO, JR., OSCAR MONDEDO,
GENEROSO MONTON, RENATO MORADA, RICARDO MORADA, RODOLFO MORADA,
ROLANDO M. MORALES, FEDERICO M. MORENO, VICTORINO A. MORTEL, JR., ESPIRITU A.
MUNOZ, IGNACIO MUNOZ, ILDEFONSO MUNOZ, ROGELIO MUNOZ, ERNESTO NAPALAN,
MARCELO A. NARCIZO, REYNALDO NATALIA, FERNANDO C. NAVARETTE, PACIFICO D.
NAVARRO, FLORANTE NAZARENO, RIZAL B. NAZARIO, JOSUE NEGRITE, ALFREDO
NEPUMUCENO, HERBERT G. NG, FLORENCIO NICOLAS, ERNESTO C. NINON, AVELINO
NUQUI, NEMESIO D. OBA, DANILO OCAMPO, EDGARDO OCAMPO, RODRIGO E. OCAMPO,
ANTONIO B. OCCIANO, REYNALDO P. OCSON, BENJAMIN ODESA, ANGEL OLASO,
FRANCISCO OLIGARIO, ZOSIMO OLIMBO, BENJAMIN V. ORALLO, ROMEO S. ORIGINES,
DANILO R. ORTANEZ, WILFREDO OSIAS, VIRGILIO PA-A, DAVID PAALAN, JESUS N.
PACHECO, ALFONSO L. PADILLA, DANILO PAGSANJAN, NUMERIANO PAGSISIHAN,
RICARDO T. PAGUIO, EMILIO PAKINGAN, LEANDRO PALABRICA, QUINCIANO PALO, JOSE
PAMATIAN, GONZALO PAN, PORFIRIO PAN, BIENVENIDO PANGAN, ERNESTO PANGAN,
FRANCISCO V. PASIA, EDILBERTO PASIMIO, JR., JOSE V. PASION, ANGELITO M. PENA,
DIONISIO PENDRAS, HERMINIO PERALTA, REYNALDO M. PERALTA, ANTONIO PEREZ,
ANTOLIANO E. PEREZ, JUAN PEREZ, LEON PEREZ, ROMEO E. PEREZ, ROMULO PEREZ,
WILLIAM PEREZ, FERNANDO G. PERINO, FLORENTINO DEL PILAR, DELMAR F. PINEDA,
SALVADOR PINEDA, ELIZALDE PINPIN, WILFREDO PINPIN, ARTURO POBLETE,
DOMINADOR R. PRIELA, BUENAVENTURA PRUDENTE, CARMELITO PRUDENTE, DANTE
PUEYO, REYNALDO Q. PUEYO, RODOLFO O. PULIDO, ALEJANDRO PUNIO, FEDERICO
QUIMAN, ALFREDO L. QUINTO, ROMEO QUINTOS, EDUARDO W. RACABO, RICARDO C. DE
RAMA, RICARDO L. DE RAMA, ROLANDO DE RAMA, FERNANDO A. RAMIREZ, LITO S.
RAMIREZ, RICARDO G. RAMIREZ, RODOLFO V. RAMIREZ, ALBERTO RAMOS, ANSELMO C.
RAMOS, TOBIAS RAMOS, WILLARFREDO RAYMUNDO, REYNALDO RAQUEDAN, MANUEL F.
RAVELAS, WILFREDO D. RAYMUNDO, ERNESTO E. RECOLASO, ALBERTO REDAZA,
ARTHUR REJUSO, TORIBIO M. RELLAMA, JAIME RELLOSA, EUGENIO A. REMOQUILLO,
GERARDO RENTOZA, REDENTOR C. REY, ALFREDO S. REYES, AMABLE S. REYES,
BENEDICTO R. REYES, GREGORIO B. REYES, JOSE A. REYES, JOSE C. REYES, ROMULO M.
REYES, SERGIO REYES, ERNESTO F. RICO, FERNANDO M. RICO, EMMANUEL RIETA,
RICARDO RIETA, LEO B. ROBLES, RUBEN ROBLES, RODOLFO ROBLEZA, RODRIGO
ROBLEZA, EDUARDO ROCABO, ANTONIO R. RODRIGUEZ, BERNARDO RODRIGUEZ, ELIGIO
RODRIGUEZ, ALMONTE ROMEO, ELIAS RONQUILLO, ELISE RONQUILLO, LUIS VAL B.
RONQUILLO, REYNOSO P. RONQUILLO, RODOLFO RONQUILLO, ANGEL ROSALES, RAMON
ROSALES, ALBERTO DEL ROSARIO, GENEROSO DEL ROSARIO, TEODORICO DEL
ROSARIO, VIRGILIO L. ROSARIO, CARLITO SALVADOR, JOSE SAMPARADA, ERNESTO SAN
PEDRO, ADRIANO V. SANCHA, GERONIMO M. SANCHA, ARTEMIO B. SANCHEZ, NICASIO
SANCHEZ, APOLONIO P. SANTIAGO, JOSELITO S. SANTIAGO, SERGIO SANTIAGO,
EDILBERTO C. SANTOS, EFREN S. SANTOS, RENATO D. SANTOS, MIGUEL SAPUYOT, ALEX
S. SERQUINA, DOMINADOR P. SERRA, ROMEO SIDRO, AMADO M. SILANG, FAUSTINO D.
SILANG, RODOLFO B. DE SILOS, ANICETO G. SILVA, EDGARDO M. SILVA, ROLANDO C.
SILVERTO, ARTHUR B. SIMBAHON, DOMINGO SOLANO, JOSELITO C. SOLANTE, CARLITO
SOLIS, CONRADO SOLIS, III, EDGARDO SOLIS, ERNESTO SOLIS, ISAGANI M. SOLIS,
EDUARDO L. SOTTO, ERNESTO G. STA. MARIA, VICENTE G. STELLA, FELIMON SUPANG,
PETER TANGUINOO, MAXIMINO TALIBSAO, FELICISMO P. TALUSIK, FERMIN TARUC, JR.,
LEVY S. TEMPLO, RODOLFO S. TIAMSON, LEONILO TIPOSO, ARNEL TOLENTINO, MARIO M.
TOLENTINO, FELIPE TORRALBA, JOVITO V. TORRES, LEONARDO DE TORRES, GAVINO U.
TUAZON, AUGUSTO B. TUNGUIA, FRANCISCO UMALI, SIMPLICIO UNIDA, WILFREDO V.
UNTALAN, ANTONIO VALDERAMA, RAMON VALDERAMA, NILO VALENCIANO, EDGARDO C.
VASQUEZ, ELPIDIO VELASQUEZ, NESTOR DE VERA, WILFREDO D. VERA, BIENVENIDO
VERGARA, ALFREDO VERGARA, RAMON R. VERZOSA, FELICITO P. VICMUNDO, ALFREDO
VICTORIANO, TEOFILO P. VIDALLO, SABINO N. VIERNEZ, JESUS J. VILLA, JOVEN
VILLABLANCO, EDGARDO G. VILLAFLORES, CEFERINO VILLAGERA, ALEX
VILLAHERMOZA, DANILO A. VILLANUEVA, ELITO VILLANUEVA, LEONARDO M.
VILLANUEVA, MANUEL R. VILLANUEVA, NEPTHALI VILLAR, JOSE V. VILLAREAL,
FELICISIMO VILLARINO, RAFAEL VILLAROMAN, CARLOS VILLENA, FERDINAND VIVO,
ROBERTO YABUT, VICENTE YNGENTE, AND ORO C. ZUNIGA, respondents.

Gerardo A. Del Mundo and Associates for petitioners.

Romulo, Mabanta, Sayoc, Buenaventura, De los Angeles Law Offices for BRII/AIBC.

Florante M. De Castro for private respondents in 105029-32.

QUIASON, J.:

The petition in G.R. No. 104776, entitled "Bienvenido M. Cadalin, et. al. v. Philippine Overseas
Employment Administration's Administrator, et. al.," was filed under Rule 65 of the Revised Rules of
Court:
(1) to modify the Resolution dated September 2, 1991 of the National Labor
Relations Commission (NLRC) in POEA Cases Nos.
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-460; (2) to render a new
decision: (i) declaring private respondents as in default; (ii) declaring the said labor
cases as a class suit; (iii) ordering Asia International Builders Corporation (AIBC) and
Brown and Root International Inc. (BRII) to pay the claims of the 1,767 claimants in
said labor cases; (iv) declaring Atty. Florante M. de Castro guilty of forum-shopping;
and (v) dismissing POEA Case No. L-86-05-460; and

(3) to reverse the Resolution dated March 24, 1992 of NLRC, denying the motion for
reconsideration of its Resolution dated September 2, 1991 (Rollo, pp. 8-288).

The petition in G.R. Nos. 104911-14, entitled "Bienvenido M. Cadalin, et. al., v. Hon. National Labor
Relations Commission, et. al.," was filed under Rule 65 of the Revised Rules of Court:

(1) to reverse the Resolution dated September 2, 1991 of NLRC in POEA Cases
Nos. L-84-06-555, L-85-10-777, L-85-10-799 and
L-86-05-460 insofar as it: (i) applied the three-year prescriptive period under the
Labor Code of the Philippines instead of the ten-year prescriptive period under the
Civil Code of the Philippines; and (ii) denied the
"three-hour daily average" formula in the computation of petitioners' overtime pay;
and

(2) to reverse the Resolution dated March 24, 1992 of NLRC, denying the motion for
reconsideration of its Resolution dated September 2, 1991 (Rollo, pp. 8-25; 26-220).

The petition in G.R. Nos. 105029-32, entitled "Asia International Builders Corporation, et. al., v.
National Labor Relations Commission, et. al." was filed under Rule 65 of the Revised Rules of Court:

(1) to reverse the Resolution dated September 2, 1991 of NLRC in POEA Cases
Nos. L-84-06-555, L-85-10-777, L-85-10-779 and
L-86-05-460, insofar as it granted the claims of 149 claimants; and

(2) to reverse the Resolution dated March 21, 1992 of NLRC insofar as it denied the
motions for reconsideration of AIBC and BRII (Rollo, pp. 2-59; 61-230).

The Resolution dated September 2, 1991 of NLRC, which modified the decision of POEA in four
labor cases: (1) awarded monetary benefits only to 149 claimants and (2) directed Labor Arbiter
Fatima J. Franco to conduct hearings and to receive evidence on the claims dismissed by the POEA
for lack of substantial evidence or proof of employment.

Consolidation of Cases

G.R. Nos. 104776 and 105029-32 were originally raffled to the Third Division while G.R. Nos.
104911-14 were raffled to the Second Division. In the Resolution dated July 26, 1993, the Second
Division referred G.R. Nos. 104911-14 to the Third Division (G.R. Nos. 104911-14, Rollo, p. 895).

In the Resolution dated September 29, 1993, the Third Division granted the motion filed in G.R. Nos.
104911-14 for the consolidation of said cases with G.R. Nos. 104776 and 105029-32, which were
assigned to the First Division (G.R. Nos. 104911-14, Rollo, pp. 986-1,107; G.R. Nos. 105029-
30, Rollo, pp. 369-377, 426-432). In the Resolution dated October 27, 1993, the First Division
granted the motion to consolidate G.R. Nos. 104911-14 with G.R. No. 104776 (G.R. Nos. 104911-
14, Rollo, p. 1109; G.R. Nos. 105029-32, Rollo, p. 1562).

On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. Evangelista, in their own
behalf and on behalf of 728 other overseas contract workers (OCWs) instituted a class suit by filing
an "Amended Complaint" with the Philippine Overseas Employment Administration (POEA) for
money claims arising from their recruitment by AIBC and employment by BRII (POEA Case No. L-
84-06-555). The claimants were represented by Atty. Gerardo del Mundo.

BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction;
while AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy
Filipino workers for overseas employment on behalf of its foreign principals.

The amended complaint principally sought the payment of the unexpired portion of the employment
contracts, which was terminated prematurely, and secondarily, the payment of the interest of the
earnings of the Travel and Reserved Fund, interest on all the unpaid benefits; area wage and salary
differential pay; fringe benefits; refund of SSS and premium not remitted to the SSS; refund of
withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the
suspension of the license of AIBC and the accreditation of BRII (G.R. No. 104776, Rollo, pp. 13-14).

At the hearing on June 25, 1984, AIBC was furnished a copy of the complaint and was given,
together with BRII, up to July 5, 1984 to file its answer.

On July 3, 1984, POEA Administrator, upon motion of AIBC and BRII, ordered the claimants to file a
bill of particulars within ten days from receipt of the order and the movants to file their answers within
ten days from receipt of the bill of particulars. The POEA Administrator also scheduled a pre-trial
conference on July 25, 1984.

On July 13, 1984, the claimants submitted their "Compliance and Manifestation." On July 23, 1984,
AIBC filed a "Motion to Strike Out of the Records", the "Complaint" and the "Compliance and
Manifestation." On July 25, 1984, the claimants filed their "Rejoinder and Comments," averring,
among other matters, the failure of AIBC and BRII to file their answers and to attend the pre-trial
conference on July 25, 1984. The claimants alleged that AIBC and BRII had waived their right to
present evidence and had defaulted by failing to file their answers and to attend the pre-trial
conference.

On October 2, 1984, the POEA Administrator denied the "Motion to Strike Out of the Records" filed
by AIBC but required the claimants to correct the deficiencies in the complaint pointed out in the
order.

On October 10, 1984, claimants asked for time within which to comply with the Order of October 2,
1984 and filed an "Urgent Manifestation," praying that the POEA Administrator direct the parties to
submit simultaneously their position papers, after which the case should be deemed submitted for
decision. On the same day, Atty. Florante de Castro filed another complaint for the same money
claims and benefits in behalf of several claimants, some of whom were also claimants in POEA
Case No. L-84-06-555 (POEA Case No. 85-10-779).

On October 19, 1984, claimants filed their "Compliance" with the Order dated October 2, 1984 and
an "Urgent Manifestation," praying that the POEA direct the parties to submit simultaneously their
position papers after which the case would be deemed submitted for decision. On the same day,
AIBC asked for time to file its comment on the "Compliance" and "Urgent Manifestation" of
claimants. On November 6, 1984, it filed a second motion for extension of time to file the comment.

On November 8, 1984, the POEA Administrator informed AIBC that its motion for extension of time
was granted.

On November 14, 1984, claimants filed an opposition to the motions for extension of time and asked
that AIBC and BRII be declared in default for failure to file their answers.

On November 20, 1984, AIBC and BRII filed a "Comment" praying, among other reliefs, that
claimants should be ordered to amend their complaint.

On December 27, 1984, the POEA Administrator issued an order directing AIBC and BRII to file their
answers within ten days from receipt of the order.

On February 27, 1985, AIBC and BRII appealed to NLRC seeking the reversal of the said order of
the POEA Administrator. Claimants opposed the appeal, claiming that it was dilatory and praying
that AIBC and BRII be declared in default.

On April 2, 1985, the original claimants filed an "Amended Complaint and/or Position Paper" dated
March 24, 1985, adding new demands: namely, the payment of overtime pay, extra night work pay,
annual leave differential pay, leave indemnity pay, retirement and savings benefits and their share of
forfeitures (G.R. No. 104776, Rollo, pp. 14-16). On April 15, 1985, the POEA Administrator directed
AIBC to file its answer to the amended complaint (G.R. No. 104776, Rollo, p. 20).

On May 28, 1985, claimants filed an "Urgent Motion for Summary Judgment." On the same day, the
POEA issued an order directing AIBC and BRII to file their answers to the "Amended Complaint,"
otherwise, they would be deemed to have waived their right to present evidence and the case would
be resolved on the basis of complainant's evidence.

On June 5, 1985, AIBC countered with a "Motion to Dismiss as Improper Class Suit and Motion for
Bill of Particulars Re: Amended Complaint dated March 24, 1985." Claimants opposed the motions.

On September 4, 1985, the POEA Administrator reiterated his directive to AIBC and BRII to file their
answers in POEA Case No. L-84-06-555.

On September 18, 1985, AIBC filed its second appeal to the NLRC, together with a petition for the
issuance of a writ of injunction. On September 19, 1985, NLRC enjoined the POEA Administrator
from hearing the labor cases and suspended the period for the filing of the answers of AIBC and
BRII.

On September 19, 1985, claimants asked the POEA Administrator to include additional claimants in
the case and to investigate alleged wrongdoings of BRII, AIBC and their respective lawyers.

On October 10, 1985, Romeo Patag and two co-claimants filed a complaint (POEA Case No. L-85-
10-777) against AIBC and BRII with the POEA, demanding monetary claims similar to those subject
of POEA Case No. L-84-06-555. In the same month, Solomon Reyes also filed his own complaint
(POEA Case No. L-85-10-779) against AIBC and BRII.
On October 17, 1985, the law firm of Florante M. de Castro & Associates asked for the substitution
of the original counsel of record and the cancellation of the special powers of attorney given the
original counsel.

On December 12, 1985, Atty. Del Mundo filed in NLRC a notice of the claim to enforce attorney's
lien.

On May 29, 1986, Atty. De Castro filed a complaint for money claims (POEA Case No. 86-05-460) in
behalf of 11 claimants including Bienvenido Cadalin, a claimant in POEA Case No. 84-06-555.

On December 12, 1986, the NLRC dismissed the two appeals filed on February 27, 1985 and
September 18, 1985 by AIBC and BRII.

In narrating the proceedings of the labor cases before the POEA Administrator, it is not amiss to
mention that two cases were filed in the Supreme Court by the claimants, namely G.R. No. 72132
on September 26, 1985 and Administrative Case No. 2858 on March 18, 1986. On May 13, 1987,
the Supreme Court issued a resolution in Administrative Case No. 2858 directing the POEA
Administrator to resolve the issues raised in the motions and oppositions filed in POEA Cases Nos.
L-84-06-555 and L-86-05-460 and to decide the labor cases with deliberate dispatch.

AIBC also filed a petition in the Supreme Court (G.R. No. 78489), questioning the Order dated
September 4, 1985 of the POEA Administrator. Said order required BRII and AIBC to answer the
amended complaint in POEA Case No. L-84-06-555. In a resolution dated November 9, 1987, we
dismissed the petition by informing AIBC that all its technical objections may properly be resolved in
the hearings before the POEA.

Complaints were also filed before the Ombudsman. The first was filed on September 22, 1988 by
claimant Hermie Arguelles and 18 co-claimants against the POEA Administrator and several NLRC
Commissioners. The Ombudsman merely referred the complaint to the Secretary of Labor and
Employment with a request for the early disposition of POEA Case No. L-84-06-555. The second
was filed on April 28, 1989 by claimants Emigdio P. Bautista and Rolando R. Lobeta charging AIBC
and BRII for violation of labor and social legislations. The third was filed by Jose R. Santos,
Maximino N. Talibsao and Amado B. Bruce denouncing AIBC and BRII of violations of labor laws.

On January 13, 1987, AIBC filed a motion for reconsideration of the NLRC Resolution dated
December 12, 1986.

On January 14, 1987, AIBC reiterated before the POEA Administrator its motion for suspension of
the period for filing an answer or motion for extension of time to file the same until the resolution of
its motion for reconsideration of the order of the NLRC dismissing the two appeals. On April 28,
1987, NLRC en banc denied the motion for reconsideration.

At the hearing on June 19, 1987, AIBC submitted its answer to the complaint. At the same hearing,
the parties were given a period of 15 days from said date within which to submit their respective
position papers. On June 24, 1987 claimants filed their "Urgent Motion to Strike Out Answer,"
alleging that the answer was filed out of time. On June 29, 1987, claimants filed their "Supplement to
Urgent Manifestational Motion" to comply with the POEA Order of June 19, 1987. On February 24,
1988, AIBC and BRII submitted their position paper. On March 4, 1988, claimants filed their "Ex-
Parte Motion to Expunge from the Records" the position paper of AIBC and BRII, claiming that it was
filed out of time.
On September 1, 1988, the claimants represented by Atty. De Castro filed their memorandum in
POEA Case No. L-86-05-460. On September 6, 1988, AIBC and BRII submitted their Supplemental
Memorandum. On September 12, 1988, BRII filed its "Reply to Complainant's Memorandum." On
October 26, 1988, claimants submitted their "Ex-Parte Manifestational Motion and Counter-
Supplemental Motion," together with 446 individual contracts of employments and service records.
On October 27, 1988, AIBC and BRII filed a "Consolidated Reply."

On January 30, 1989, the POEA Administrator rendered his decision in POEA Case No. L-84-06-
555 and the other consolidated cases, which awarded the amount of $824,652.44 in favor of only
324 complainants.

On February 10, 1989, claimants submitted their "Appeal Memorandum For Partial Appeal" from the
decision of the POEA. On the same day, AIBC also filed its motion for reconsideration and/or appeal
in addition to the "Notice of Appeal" filed earlier on February 6, 1989 by another counsel for AIBC.

On February 17, 1989, claimants filed their "Answer to Appeal," praying for the dismissal of the
appeal of AIBC and BRII.

On March 15, 1989, claimants filed their "Supplement to Complainants' Appeal Memorandum,"
together with their "newly discovered evidence" consisting of payroll records.

On April 5, 1989, AIBC and BRII submitted to NLRC their "Manifestation," stating among other
matters that there were only 728 named claimants. On April 20, 1989, the claimants filed their
"Counter-Manifestation," alleging that there were 1,767 of them.

On July 27, 1989, claimants filed their "Urgent Motion for Execution" of the Decision dated January
30, 1989 on the grounds that BRII had failed to appeal on time and AIBC had not posted the
supersedeas bond in the amount of $824,652.44.

On December 23, 1989, claimants filed another motion to resolve the labor cases.

On August 21, 1990, claimants filed their "Manifestational Motion," praying that all the 1,767
claimants be awarded their monetary claims for failure of private respondents to file their answers
within the reglamentary period required by law.

On September 2, 1991, NLRC promulgated its Resolution, disposing as follows:

WHEREFORE, premises considered, the Decision of the POEA in these


consolidated cases is modified to the extent and in accordance with the following
dispositions:

1. The claims of the 94 complainants identified and listed in Annex


"A" hereof are dismissed for having prescribed;

2. Respondents AIBC and Brown & Root are hereby ordered, jointly
and severally, to pay the 149 complainants, identified and listed in
Annex "B" hereof, the peso equivalent, at the time of payment, of the
total amount in US dollars indicated opposite their respective names;
3. The awards given by the POEA to the 19 complainants classified
and listed in Annex "C" hereof, who appear to have worked
elsewhere than in Bahrain are hereby set aside.

4. All claims other than those indicated in Annex "B", including those
for overtime work and favorably granted by the POEA, are hereby
dismissed for lack of substantial evidence in support thereof or are
beyond the competence of this Commission to pass upon.

In addition, this Commission, in the exercise of its powers and authority under Article
218(c) of the Labor Code, as amended by R.A. 6715, hereby directs Labor Arbiter
Fatima J. Franco of this Commission to summon parties, conduct hearings and
receive evidence, as expeditiously as possible, and thereafter submit a written report
to this Commission (First Division) of the proceedings taken, regarding the claims of
the following:

(a) complainants identified and listed in Annex "D" attached and


made an integral part of this Resolution, whose claims were
dismissed by the POEA for lack of proof of employment in Bahrain
(these complainants numbering 683, are listed in pages 13 to 23 of
the decision of POEA, subject of the appeals) and,

(b) complainants identified and listed in Annex "E" attached and


made an integral part of this Resolution, whose awards decreed by
the POEA, to Our mind, are not supported by substantial evidence"
(G.R. No. 104776; Rollo, pp. 113-115; G.R. Nos. 104911-14, pp. 85-
87; G.R. Nos. 105029-31, pp. 120-122).

On November 27, 1991, claimant Amado S. Tolentino and 12


co-claimants, who were former clients of Atty. Del Mundo, filed a petition for certiorari with the
Supreme Court (G.R. Nos. 120741-44). The petition was dismissed in a resolution dated January 27,
1992.

Three motions for reconsideration of the September 2, 1991 Resolution of the NLRC were filed. The
first, by the claimants represented by Atty. Del Mundo; the second, by the claimants represented by
Atty. De Castro; and the third, by AIBC and BRII.

In its Resolution dated March 24, 1992, NLRC denied all the motions for reconsideration.

Hence, these petitions filed by the claimants represented by Atty. Del Mundo (G.R. No. 104776), the
claimants represented by Atty. De Castro (G.R. Nos. 104911-14) and by AIBC and BRII (G.R. Nos.
105029-32).

II

Compromise Agreements

Before this Court, the claimants represented by Atty. De Castro and AIBC and BRII have submitted,
from time to time, compromise agreements for our approval and jointly moved for the dismissal of
their respective petitions insofar as the claimants-parties to the compromise agreements were
concerned (See Annex A for list of claimants who signed quitclaims).
Thus the following manifestations that the parties had arrived at a compromise agreement and the
corresponding motions for the approval of the agreements were filed by the parties and approved by
the Court:

1) Joint Manifestation and Motion involving claimant Emigdio Abarquez and 47 co-
claimants dated September 2, 1992 (G.R. Nos. 104911-14, Rollo, pp. 263-406; G.R.
Nos. 105029-32, Rollo, pp.
470-615);

2) Joint Manifestation and Motion involving petitioner Bienvenido Cadalin and 82 co-
petitioners dated September 3, 1992 (G.R. No. 104776, Rollo, pp. 364-507);

3) Joint Manifestation and Motion involving claimant Jose


M. Aban and 36 co-claimants dated September 17, 1992 (G.R. Nos. 105029-
32, Rollo, pp. 613-722; G.R. No. 104776, Rollo, pp. 518-626; G.R. Nos. 104911-
14, Rollo, pp. 407-516);

4) Joint Manifestation and Motion involving claimant Antonio T. Anglo and 17 co-
claimants dated October 14, 1992 (G.R. Nos.
105029-32, Rollo, pp. 778-843; G.R. No. 104776, Rollo, pp. 650-713; G.R. Nos.
104911-14, Rollo, pp. 530-590);

5) Joint Manifestation and Motion involving claimant Dionisio Bobongo and 6 co-
claimants dated January 15, 1993 (G.R. No. 104776, Rollo, pp. 813-836; G.R. Nos.
104911-14, Rollo, pp. 629-652);

6) Joint Manifestation and Motion involving claimant Valerio A. Evangelista and 4 co-
claimants dated March 10, 1993 (G.R. Nos. 104911-14, Rollo, pp. 731-746; G.R. No.
104776, Rollo, pp. 1815-1829);

7) Joint Manifestation and Motion involving claimants Palconeri Banaag and 5 co-
claimants dated March 17, 1993 (G.R. No. 104776, Rollo, pp. 1657-1703; G.R. Nos.
104911-14, Rollo, pp. 655-675);

8) Joint Manifestation and Motion involving claimant Benjamin Ambrosio and 15


other co-claimants dated May 4, 1993 (G.R. Nos. 105029-32, Rollo, pp. 906-956;
G.R. Nos. 104911-14, Rollo, pp. 679-729; G.R. No. 104776, Rollo, pp. 1773-1814);

9) Joint Manifestation and Motion involving Valerio Evangelista and 3 co-claimants


dated May 10, 1993 (G.R. No. 104776, Rollo, pp. 1815-1829);

10) Joint Manifestation and Motion involving petitioner Quiterio R. Agudo and 36 co-
claimants dated June 14, 1993 (G.R. Nos. 105029-32, Rollo, pp. 974-1190; G.R.
Nos. 104911-14, Rollo, pp. 748-864; G.R. No. 104776, Rollo, pp. 1066-1183);

11) Joint Manifestation and Motion involving claimant Arnaldo J. Alonzo and 19 co-
claimants dated July 22, 1993 (G.R. No. 104776, Rollo, pp. 1173-1235; G.R. Nos.
105029-32, Rollo, pp. 1193-1256; G.R. Nos. 104911-14, Rollo, pp. 896-959);

12) Joint Manifestation and Motion involving claimant Ricardo C. Dayrit and 2 co-
claimants dated September 7, 1993 (G.R. Nos.
105029-32, Rollo, pp. 1266-1278; G.R. No. 104776, Rollo, pp. 1243-1254; G.R. Nos.
104911-14, Rollo, pp. 972-984);

13) Joint Manifestation and Motion involving claimant Dante C. Aceres and 37 co-
claimants dated September 8, 1993 (G.R. No. 104776, Rollo, pp. 1257-1375; G.R.
Nos. 104911-14, Rollo, pp. 987-1105; G.R. Nos. 105029-32, Rollo, pp. 1280-1397);

14) Joint Manifestation and Motion involving Vivencio V. Abella and 27 co-claimants
dated January 10, 1994 (G.R. Nos. 105029-32, Rollo, Vol. II);

15) Joint Manifestation and Motion involving Domingo B. Solano and six co-claimants
dated August 25, 1994 (G.R. Nos. 105029-32; G.R. No. 104776; G.R. Nos. 104911-
14).

III

The facts as found by the NLRC are as follows:

We have taken painstaking efforts to sift over the more than fifty volumes now
comprising the records of these cases. From the records, it appears that the
complainants-appellants allege that they were recruited by respondent-appellant
AIBC for its accredited foreign principal, Brown & Root, on various dates from 1975
to 1983. They were all deployed at various projects undertaken by Brown & Root in
several countries in the Middle East, such as Saudi Arabia, Libya, United Arab
Emirates and Bahrain, as well as in Southeast Asia, in Indonesia and Malaysia.

Having been officially processed as overseas contract workers by the Philippine


Government, all the individual complainants signed standard overseas employment
contracts (Records, Vols. 25-32. Hereafter, reference to the records would be
sparingly made, considering their chaotic arrangement) with AIBC before their
departure from the Philippines. These overseas employment contracts invariably
contained the following relevant terms and conditions.

PART B

(1) Employment Position Classification :


(Code) :

(2) Company Employment Status :


(3) Date of Employment to Commence on :
(4) Basic Working Hours Per Week :
(5) Basic Working Hours Per Month :
(6) Basic Hourly Rate :
(7) Overtime Rate Per Hour :
(8) Projected Period of Service
(Subject to C(1) of this [sic]) :
Months and/or
Job Completion

xxx xxx xxx


3. HOURS OF WORK AND COMPENSATION

a) The Employee is employed at the hourly rate and overtime rate as set out in Part
B of this Document.

b) The hours of work shall be those set forth by the Employer, and Employer may, at
his sole option, change or adjust such hours as maybe deemed necessary from time
to time.

4. TERMINATION

a) Notwithstanding any other terms and conditions of this agreement, the Employer
may, at his sole discretion, terminate employee's service with cause, under this
agreement at any time. If the Employer terminates the services of the Employee
under this Agreement because of the completion or termination, or suspension of the
work on which the Employee's services were being utilized, or because of a
reduction in force due to a decrease in scope of such work, or by change in the type
of construction of such work. The Employer will be responsible for his return
transportation to his country of origin. Normally on the most expeditious air route,
economy class accommodation.

xxx xxx xxx

10. VACATION/SICK LEAVE BENEFITS

a) After one (1) year of continuous service and/or satisfactory completion of contract,
employee shall be entitled to 12-days vacation leave with pay. This shall be
computed at the basic wage rate. Fractions of a year's service will be computed on
a pro-rata basis.

b) Sick leave of 15-days shall be granted to the employee for every year of service
for non-work connected injuries or illness. If the employee failed to avail of such
leave benefits, the same shall be forfeited at the end of the year in which said sick
leave is granted.

11. BONUS

A bonus of 20% (for offshore work) of gross income will be accrued and payable only
upon satisfactory completion of this contract.

12. OFFDAY PAY

The seventh day of the week shall be observed as a day of rest with 8 hours regular
pay. If work is performed on this day, all hours work shall be paid at the premium
rate. However, this offday pay provision is applicable only when the laws of the Host
Country require payments for rest day.

In the State of Bahrain, where some of the individual complainants were deployed,
His Majesty Isa Bin Salman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23
on June 16, 1976, otherwise known as the Labour Law for the Private Sector
(Records, Vol. 18). This decree took effect on August 16, 1976. Some of the
provisions of Amiri Decree No. 23 that are relevant to the claims of the complainants-
appellants are as follows (italics supplied only for emphasis):

Art. 79: . . . A worker shall receive payment for each extra hour
equivalent to his wage entitlement increased by a minimum of twenty-
five per centum thereof for hours worked during the day; and by a
minimum of fifty per centum thereof for hours worked during the
night which shall be deemed to being from seven o'clock in the
evening until seven o'clock in the morning. . . .

Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.

. . . an employer may require a worker, with his consent, to work on


his weekly day of rest if circumstances so require and in respect of
which an additional sum equivalent to 150% of his normal wage shall
be paid to him. . . .

Art. 81: . . . When conditions of work require the worker to work on


any official holiday, he shall be paid an additional sum equivalent to
150% of his normal wage.

Art. 84: Every worker who has completed one year's continuous
service with his employer shall be entitled to leave on full pay for a
period of not less than 21 days for each year increased to a period
not less than 28 days after five continuous years of service.

A worker shall be entitled to such leave upon a quantum meruit in


respect of the proportion of his service in that year.

Art. 107: A contract of employment made for a period of indefinite


duration may be terminated by either party thereto after giving the
other party thirty days' prior notice before such termination, in writing,
in respect of monthly paid workers and fifteen days' notice in respect
of other workers. The party terminating a contract without giving the
required notice shall pay to the other party compensation equivalent
to the amount of wages payable to the worker for the period of such
notice or the unexpired portion thereof.

Art. 111: . . . the employer concerned shall pay to such worker, upon
termination of employment, a leaving indemnity for the period of his
employment calculated on the basis of fifteen days' wages for each
year of the first three years of service and of one month's wages for
each year of service thereafter. Such worker shall be entitled to
payment of leaving indemnity upon a quantum meruit in proportion to
the period of his service completed within a year.

All the individual complainants-appellants have already been


repatriated to the Philippines at the time of the filing of these cases
(R.R. No. 104776, Rollo, pp. 59-65).

IV
The issues raised before and resolved by the NLRC were:

First: Whether or not complainants are entitled to the benefits provided by Amiri
Decree No. 23 of Bahrain;

(a) Whether or not the complainants who have worked in Bahrain are
entitled to the above-mentioned benefits.

(b) Whether or not Art. 44 of the same Decree (allegedly prescribing


a more favorable treatment of alien employees) bars complainants
from enjoying its benefits.

Second: Assuming that Amiri Decree No. 23 of Bahrain is applicable in these


cases, whether or not complainants' claim for the benefits provided therein have
prescribed.

Third: Whether or not the instant cases qualify as a class suit.

Fourth: Whether or not the proceedings conducted by the POEA, as well as the
decision that is the subject of these appeals, conformed with the requirements of due
process;

(a) Whether or not the respondent-appellant was denied its right to


due process;

(b) Whether or not the admission of evidence by the POEA after


these cases were submitted for decision was valid;

(c) Whether or not the POEA acquired jurisdiction over Brown & Root
International, Inc.;

(d) Whether or not the judgment awards are supported by substantial


evidence;

(e) Whether or not the awards based on the averages and formula
presented by the complainants-appellants are supported by
substantial evidence;

(f) Whether or not the POEA awarded sums beyond what the
complainants-appellants prayed for; and, if so, whether or not these
awards are valid.

Fifth: Whether or not the POEA erred in holding respondents AIBC and Brown &
Root jointly are severally liable for the judgment awards despite the alleged finding
that the former was the employer of the complainants;

(a) Whether or not the POEA has acquired jurisdiction over Brown &
Root;
(b) Whether or not the undisputed fact that AIBC was a licensed
construction contractor precludes a finding that Brown & Root is liable
for complainants claims.

Sixth: Whether or not the POEA Administrator's failure to hold respondents in


default constitutes a reversible error.

Seventh: Whether or not the POEA Administrator erred in dismissing the following
claims:

a. Unexpired portion of contract;

b. Interest earnings of Travel and Reserve Fund;

c. Retirement and Savings Plan benefits;

d. War Zone bonus or premium pay of at least 100% of basic pay;

e. Area Differential Pay;

f. Accrued interests on all the unpaid benefits;

g. Salary differential pay;

h. Wage differential pay;

i. Refund of SSS premiums not remitted to SSS;

j. Refund of withholding tax not remitted to BIR;

k. Fringe benefits under B & R's "A Summary of Employee Benefits"


(Annex "Q" of Amended Complaint);

l. Moral and exemplary damages;

m. Attorney's fees of at least ten percent of the judgment award;

n. Other reliefs, like suspending and/or cancelling the license to


recruit of AIBC and the accreditation of B & R issued by POEA;

o. Penalty for violations of Article 34 (prohibited practices), not


excluding reportorial requirements thereof.

Eighth: Whether or not the POEA Administrator erred in not dismissing POEA
Case No. (L) 86-65-460 on the ground of multiplicity of suits (G.R. Nos. 104911-
14, Rollo, pp. 25-29, 51-55).

Anent the first issue, NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence
governing the pleading and proof of a foreign law and admitted in evidence a simple copy of the
Bahrain's Amiri Decree No. 23 of 1976 (Labour Law for the Private Sector). NLRC invoked Article
221 of the Labor Code of the Philippines, vesting on the Commission ample discretion to use every
and all reasonable means to ascertain the facts in each case without regard to the technicalities of
law or procedure. NLRC agreed with the POEA Administrator that the Amiri Decree No. 23, being
more favorable and beneficial to the workers, should form part of the overseas employment contract
of the complainants.

NLRC, however, held that the Amiri Decree No. 23 applied only to the claimants, who worked in
Bahrain, and set aside awards of the POEA Administrator in favor of the claimants, who worked
elsewhere.

On the second issue, NLRC ruled that the prescriptive period for the filing of the claims of the
complainants was three years, as provided in Article 291 of the Labor Code of the Philippines, and
not ten years as provided in Article 1144 of the Civil Code of the Philippines nor one year as
provided in the Amiri Decree No. 23 of 1976.

On the third issue, NLRC agreed with the POEA Administrator that the labor cases cannot be treated
as a class suit for the simple reason that not all the complainants worked in Bahrain and therefore,
the subject matter of the action, the claims arising from the Bahrain law, is not of common or general
interest to all the complainants.

On the fourth issue, NLRC found at least three infractions of the cardinal rules of administrative due
process: namely, (1) the failure of the POEA Administrator to consider the evidence presented by
AIBC and BRII; (2) some findings of fact were not supported by substantial evidence; and (3) some
of the evidence upon which the decision was based were not disclosed to AIBC and BRII during the
hearing.

On the fifth issue, NLRC sustained the ruling of the POEA Administrator that BRII and AIBC are
solidarily liable for the claims of the complainants and held that BRII was the actual employer of the
complainants, or at the very least, the indirect employer, with AIBC as the labor contractor.

NLRC also held that jurisdiction over BRII was acquired by the POEA Administrator through the
summons served on AIBC, its local agent.

On the sixth issue, NLRC held that the POEA Administrator was correct in denying the Motion to
Declare AIBC in default.

On the seventh issue, which involved other money claims not based on the Amiri Decree No. 23,
NLRC ruled:

(1) that the POEA Administrator has no jurisdiction over the claims for refund of the
SSS premiums and refund of withholding taxes and the claimants should file their
claims for said refund with the appropriate government agencies;

(2) the claimants failed to establish that they are entitled to the claims which are not
based on the overseas employment contracts nor the Amiri Decree No. 23 of 1976;

(3) that the POEA Administrator has no jurisdiction over claims for moral and
exemplary damages and nonetheless, the basis for granting said damages was not
established;
(4) that the claims for salaries corresponding to the unexpired portion of their contract
may be allowed if filed within the three-year prescriptive period;

(5) that the allegation that complainants were prematurely repatriated prior to the
expiration of their overseas contract was not established; and

(6) that the POEA Administrator has no jurisdiction over the complaint for the
suspension or cancellation of the AIBC's recruitment license and the cancellation of
the accreditation of BRII.

NLRC passed sub silencio the last issue, the claim that POEA Case No. (L) 86-65-460 should have
been dismissed on the ground that the claimants in said case were also claimants in POEA Case
No. (L) 84-06-555. Instead of dismissing POEA Case No. (L) 86-65-460, the POEA just resolved the
corresponding claims in POEA Case No. (L) 84-06-555. In other words, the POEA did not pass upon
the same claims twice.

G.R. No. 104776

Claimants in G.R. No. 104776 based their petition for certiorari on the following grounds:

(1) that they were deprived by NLRC and the POEA of their right to a speedy
disposition of their cases as guaranteed by Section 16, Article III of the 1987
Constitution. The POEA Administrator allowed private respondents to file their
answers in two years (on June 19, 1987) after the filing of the original complaint (on
April 2, 1985) and NLRC, in total disregard of its own rules, affirmed the action of the
POEA Administrator;

(2) that NLRC and the POEA Administrator should have declared AIBC and BRII in
default and should have rendered summary judgment on the basis of the pleadings
and evidence submitted by claimants;

(3) the NLRC and POEA Administrator erred in not holding that the labor cases filed
by AIBC and BRII cannot be considered a class suit;

(4) that the prescriptive period for the filing of the claims is ten years; and

(5) that NLRC and the POEA Administrator should have dismissed POEA Case No.
L-86-05-460, the case filed by Atty. Florante de Castro (Rollo, pp. 31-40).

AIBC and BRII, commenting on the petition in G.R. No. 104776, argued:

(1) that they were not responsible for the delay in the disposition of the labor cases,
considering the great difficulty of getting all the records of the more than 1,500
claimants, the piece-meal filing of the complaints and the addition of hundreds of new
claimants by petitioners;

(2) that considering the number of complaints and claimants, it was impossible to
prepare the answers within the ten-day period provided in the NLRC Rules, that
when the motion to declare AIBC in default was filed on July 19, 1987, said party had
already filed its answer, and that considering the staggering amount of the claims
(more than US$50,000,000.00) and the complicated issues raised by the parties, the
ten-day rule to answer was not fair and reasonable;

(3) that the claimants failed to refute NLRC's finding that


there was no common or general interest in the subject matter of the controversy
which was the applicability of the Amiri Decree No. 23. Likewise, the nature of the
claims varied, some being based on salaries pertaining to the unexpired portion of
the contracts while others being for pure money claims. Each claimant demanded
separate claims peculiar only to himself and depending upon the particular
circumstances obtaining in his case;

(4) that the prescriptive period for filing the claims is that prescribed by Article 291 of
the Labor Code of the Philippines (three years) and not the one prescribed by Article
1144 of the Civil Code of the Philippines (ten years); and

(5) that they are not concerned with the issue of whether POEA Case No. L-86-05-
460 should be dismissed, this being a private quarrel between the two labor lawyers
(Rollo, pp. 292-305).

Attorney's Lien

On November 12, 1992, Atty. Gerardo A. del Mundo moved to strike out the joint manifestations and
motions of AIBC and BRII dated September 2 and 11, 1992, claiming that all the claimants who
entered into the compromise agreements subject of said manifestations and motions were his clients
and that Atty. Florante M. de Castro had no right to represent them in said agreements. He also
claimed that the claimants were paid less than the award given them by NLRC; that Atty. De Castro
collected additional attorney's fees on top of the 25% which he was entitled to receive; and that the
consent of the claimants to the compromise agreements and quitclaims were procured by fraud
(G.R. No. 104776, Rollo, pp. 838-810). In the Resolution dated November 23, 1992, the Court
denied the motion to strike out the Joint Manifestations and Motions dated September 2 and 11,
1992 (G.R. Nos. 104911-14, Rollo, pp. 608-609).

On December 14, 1992, Atty. Del Mundo filed a "Notice and Claim to Enforce Attorney's Lien,"
alleging that the claimants who entered into compromise agreements with AIBC and BRII with the
assistance of Atty. De Castro, had all signed a retainer agreement with his law firm (G.R. No.
104776, Rollo, pp. 623-624; 838-1535).

Contempt of Court

On February 18, 1993, an omnibus motion was filed by Atty. Del Mundo to cite Atty. De Castro and
Atty. Katz Tierra for contempt of court and for violation of Canons 1, 15 and 16 of the Code of
Professional Responsibility. The said lawyers allegedly misled this Court, by making it appear that
the claimants who entered into the compromise agreements were represented by Atty. De Castro,
when in fact they were represented by Atty. Del Mundo (G.R. No. 104776, Rollo, pp. 1560-1614).

On September 23, 1994, Atty. Del Mundo reiterated his charges against Atty. De Castro for unethical
practices and moved for the voiding of the quitclaims submitted by some of the claimants.

G.R. Nos. 104911-14


The claimants in G.R. Nos. 104911-14 based their petition for certiorari on the grounds that NLRC
gravely abused its discretion when it: (1) applied the three-year prescriptive period under the Labor
Code of the Philippines; and (2) it denied the claimant's formula based on an average overtime pay
of three hours a day (Rollo, pp. 18-22).

The claimants argue that said method was proposed by BRII itself during the negotiation for an
amicable settlement of their money claims in Bahrain as shown in the Memorandum dated April 16,
1983 of the Ministry of Labor of Bahrain (Rollo, pp. 21-22).

BRII and AIBC, in their Comment, reiterated their contention in G.R. No. 104776 that the prescriptive
period in the Labor Code of the Philippines, a special law, prevails over that provided in the Civil
Code of the Philippines, a general law.

As to the memorandum of the Ministry of Labor of Bahrain on the method of computing the overtime
pay, BRII and AIBC claimed that they were not bound by what appeared therein, because such
memorandum was proposed by a subordinate Bahrain official and there was no showing that it was
approved by the Bahrain Minister of Labor. Likewise, they claimed that the averaging method was
discussed in the course of the negotiation for the amicable settlement of the dispute and any offer
made by a party therein could not be used as an admission by him (Rollo, pp. 228-236).

G.R. Nos. 105029-32

In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC gravely abused its discretion when it: (1)
enforced the provisions of the Amiri Decree No. 23 of 1976 and not the terms of the employment
contracts; (2) granted claims for holiday, overtime and leave indemnity pay and other benefits, on
evidence admitted in contravention of petitioner's constitutional right to due process; and (3) ordered
the POEA Administrator to hold new hearings for the 683 claimants whose claims had been
dismissed for lack of proof by the POEA Administrator or NLRC itself. Lastly, they allege that
assuming that the Amiri Decree No. 23 of 1976 was applicable, NLRC erred when it did not apply
the one-year prescription provided in said law (Rollo, pp. 29-30).

VI

G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos. 105029-32

All the petitions raise the common issue of prescription although they disagreed as to the time that
should be embraced within the prescriptive period.

To the POEA Administrator, the prescriptive period was ten years, applying Article 1144 of the Civil
Code of the Philippines. NLRC believed otherwise, fixing the prescriptive period at three years as
provided in Article 291 of the Labor Code of the Philippines.

The claimants in G.R. No. 104776 and G.R. Nos. 104911-14, invoking different grounds, insisted
that NLRC erred in ruling that the prescriptive period applicable to the claims was three years,
instead of ten years, as found by the POEA Administrator.

The Solicitor General expressed his personal view that the prescriptive period was one year as
prescribed by the Amiri Decree No. 23 of 1976 but he deferred to the ruling of NLRC that Article 291
of the Labor Code of the Philippines was the operative law.

The POEA Administrator held the view that:


These money claims (under Article 291 of the Labor Code) refer to those arising from
the employer's violation of the employee's right as provided by the Labor Code.

In the instant case, what the respondents violated are not the rights of the workers as
provided by the Labor Code, but the provisions of the Amiri Decree No. 23 issued in
Bahrain, which ipso facto amended the worker's contracts of employment.
Respondents consciously failed to conform to these provisions which specifically
provide for the increase of the worker's rate. It was only after June 30, 1983, four
months after the brown builders brought a suit against B & R in Bahrain for this same
claim, when respondent AIBC's contracts have undergone amendments in Bahrain
for the new hires/renewals (Respondent's Exhibit 7).

Hence, premises considered, the applicable law of prescription to this instant case is
Article 1144 of the Civil Code of the Philippines, which provides:

Art. 1144. The following actions may be brought within ten years from
the time the cause of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

Thus, herein money claims of the complainants against the respondents shall
prescribe in ten years from August 16, 1976. Inasmuch as all claims were filed within
the ten-year prescriptive period, no claim suffered the infirmity of being prescribed
(G.R. No. 104776, Rollo, 89-90).

In overruling the POEA Administrator, and holding that the prescriptive period is three years as
provided in Article 291 of the Labor Code of the Philippines, the NLRC argued as follows:

The Labor Code provides that "all money claims arising from employer-employee
relations . . . shall be filed within three years from the time the cause of action
accrued; otherwise they shall be forever barred" (Art. 291, Labor Code, as
amended). This three-year prescriptive period shall be the one applied here and
which should be reckoned from the date of repatriation of each individual
complainant, considering the fact that the case is having (sic) filed in this country. We
do not agree with the POEA Administrator that this three-year prescriptive period
applies only to money claims specifically recoverable under the Philippine Labor
Code. Article 291 gives no such indication. Likewise, We can not consider
complainants' cause/s of action to have accrued from a violation of their employment
contracts. There was no violation; the claims arise from the benefits of the law of the
country where they worked. (G.R. No. 104776, Rollo, pp.
90-91).

Anent the applicability of the one-year prescriptive period as provided by the Amiri Decree No. 23 of
1976, NLRC opined that the applicability of said law was one of characterization, i.e., whether to
characterize the foreign law on prescription or statute of limitation as "substantive" or "procedural."
NLRC cited the decision in Bournias v. Atlantic Maritime Company (220 F. 2d. 152, 2d Cir. [1955],
where the issue was the applicability of the Panama Labor Code in a case filed in the State of New
York for claims arising from said Code. In said case, the claims would have prescribed under the
Panamanian Law but not under the Statute of Limitations of New York. The U.S. Circuit Court of
Appeals held that the Panamanian Law was procedural as it was not "specifically intended to be
substantive," hence, the prescriptive period provided in the law of the forum should apply. The Court
observed:

. . . And where, as here, we are dealing with a statute of limitations of a foreign


country, and it is not clear on the face of the statute that its purpose was to limit the
enforceability, outside as well as within the foreign country concerned, of the
substantive rights to which the statute pertains, we think that as a yardstick for
determining whether that was the purpose this test is the most satisfactory one. It
does not lead American courts into the necessity of examining into the unfamiliar
peculiarities and refinements of different foreign legal systems. . .

The court further noted:

xxx xxx xxx

Applying that test here it appears to us that the libelant is entitled to succeed, for the
respondents have failed to satisfy us that the Panamanian period of limitation in
question was specifically aimed against the particular rights which the libelant seeks
to enforce. The Panama Labor Code is a statute having broad objectives, viz: "The
present Code regulates the relations between capital and labor, placing them on a
basis of social justice, so that, without injuring any of the parties, there may be
guaranteed for labor the necessary conditions for a normal life and to capital an
equitable return to its investment." In pursuance of these objectives the Code gives
laborers various rights against their employers. Article 623 establishes the period of
limitation for all such rights, except certain ones which are enumerated in Article 621.
And there is nothing in the record to indicate that the Panamanian legislature gave
special consideration to the impact of Article 623 upon the particular rights sought to
be enforced here, as distinguished from the other rights to which that Article is also
applicable. Were we confronted with the question of whether the limitation period of
Article 621 (which carves out particular rights to be governed by a shorter limitation
period) is to be regarded as "substantive" or "procedural" under the rule of "specifity"
we might have a different case; but here on the surface of things we appear to be
dealing with a "broad," and not a "specific," statute of limitations (G.R. No.
104776, Rollo, pp.
92-94).

Claimants in G.R. Nos. 104911-14 are of the view that Article 291 of the Labor Code of the
Philippines, which was applied by NLRC, refers only to claims "arising from the employer's violation
of the employee's right as provided by the Labor Code." They assert that their claims are based on
the violation of their employment contracts, as amended by the Amiri Decree No. 23 of 1976 and
therefore the claims may be brought within ten years as provided by Article 1144 of the Civil Code of
the Philippines (Rollo, G.R. Nos. 104911-14, pp.
18-21). To bolster their contention, they cite PALEA v. Philippine Airlines, Inc., 70 SCRA 244 (1976).

AIBC and BRII, insisting that the actions on the claims have prescribed under the Amiri Decree No.
23 of 1976, argue that there is in force in the Philippines a "borrowing law," which is Section 48 of
the Code of Civil Procedure and that where such kind of law exists, it takes precedence over the
common-law conflicts rule (G.R. No. 104776, Rollo, pp. 45-46).

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. (G.R. Nos. 105029-31, Rollo,
p. 226).

As a general rule, a foreign procedural law will not be applied in the forum. 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.

Thus in Bournias v. Atlantic Maritime Company, supra, the American court applied the statute of
limitations of New York, instead of the Panamanian law, after finding that there was no showing that
the Panamanian law on prescription was intended to be substantive. Being considered merely a
procedural law even in Panama, it has to give way to the law of the forum on prescription of actions.

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 Philippines 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 Procedures 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 cannot be enforced ex proprio
vigore insofar as it ordains the application in this jurisdiction of Section 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
(Canadian Northern Railway Co. v. Eggen, 252 U.S. 553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). 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.

In the Declaration of Principles and State Policies, the 1987 Constitution emphasized that:

The state shall promote social justice in all phases of national development. (Sec.
10).
The state affirms labor as a primary social economic force. It shall protect the rights
of workers and promote their welfare (Sec. 18).

In article XIII on Social Justice and Human Rights, the 1987 Constitution provides:

Sec. 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
opportunities for all.

Having determined that the applicable law on prescription is the Philippine law, the next question is
whether the prescriptive period governing the filing of the claims is three years, as provided by the
Labor Code or ten years, as provided by the Civil Code of the Philippines.

The claimants are of the view that the applicable provision is Article 1144 of the Civil Code of the
Philippines, which provides:

The following actions must be brought within ten years from the time the right of
action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

NLRC, on the other hand, believes that the applicable provision is Article 291 of the Labor Code of
the Philippines, which in pertinent part provides:

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.

xxx xxx xxx

The case of Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 70 SCRA 244
(1976) invoked by the claimants in G.R. Nos. 104911-14 is inapplicable to the cases at bench (Rollo,
p. 21). The said case involved the correct computation of overtime pay as provided in the collective
bargaining agreements and not the Eight-Hour Labor Law.

As noted by the Court: "That is precisely why petitioners did not make any reference as to the
computation for overtime work under the Eight-Hour Labor Law (Secs. 3 and 4, CA No. 494) and
instead insisted that work computation provided in the collective bargaining agreements between the
parties be observed. Since the claim for pay differentials is primarily anchored on the written
contracts between the litigants, the ten-year prescriptive period provided by Art. 1144(1) of the New
Civil Code should govern."

Section 7-a of the Eight-Hour Labor Law (CA No. 444 as amended by R.A. No. 19933) provides:

Any action to enforce any cause of action under this Act shall be commenced within
three years after the cause of action accrued otherwise such action shall be forever
barred, . . . .
The court further explained:

The three-year prescriptive period fixed in the Eight-Hour Labor Law (CA No. 444 as
amended) will apply, if the claim for differentials for overtime work is solely based on
said law, and not on a collective bargaining agreement or any other contract. In the
instant case, the claim for overtime compensation is not so much because of
Commonwealth Act No. 444, as amended but because the claim is demandable right
of the employees, by reason of the above-mentioned collective bargaining
agreement.

Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for filing "actions to enforce
any cause of action under said law." On the other hand, Article 291 of the Labor Code of the
Philippines provides the prescriptive period for filing "money claims arising from employer-employee
relations." The claims in the cases at bench all arose from the employer-employee relations, which is
broader in scope than claims arising from a specific law or from the collective bargaining agreement.

The contention of the POEA Administrator, that the three-year prescriptive period under Article 291
of the Labor Code of the Philippines applies only to money claims specifically recoverable under said
Code, does not find support in the plain language of the provision. Neither is the contention of the
claimants in G.R. Nos. 104911-14 that said Article refers only to claims "arising from the employer's
violation of the employee's right," as provided by the Labor Code supported by the facial reading of
the provision.

VII

G.R. No. 104776

A. As to the first two grounds for the petition in G.R. No. 104776, claimants aver: (1) that while their
complaints were filed on June 6, 1984 with POEA, the case was decided only on January 30, 1989,
a clear denial of their right to a speedy disposition of the case; and (2) that NLRC and the POEA
Administrator should have declared AIBC and BRII in default (Rollo, pp.
31-35).

Claimants invoke a new provision incorporated in the 1987 Constitution, which provides:

Sec. 16. All persons shall have the right to a speedy disposition of their cases before
all judicial, quasi-judicial, or administrative bodies.

It is true that the constitutional right to "a speedy disposition of cases" is not limited to the accused in
criminal proceedings but extends to all parties in all cases, including civil and administrative cases,
and in all proceedings, including judicial and quasi-judicial hearings. Hence, under the Constitution,
any party to a case may demand expeditious action on all officials who are tasked with the
administration of justice.

However, as held in Caballero v. Alfonso, Jr., 153 SCRA 153 (1987), "speedy disposition of cases" is
a relative term. Just like the constitutional guarantee of "speedy trial" accorded to the accused in all
criminal proceedings, "speedy disposition of cases" is a flexible concept. It is consistent with delays
and depends upon the circumstances of each case. What the Constitution prohibits are
unreasonable, arbitrary and oppressive delays which render rights nugatory.
Caballero laid down the factors that may be taken into consideration in determining whether or not
the right to a "speedy disposition of cases" has been violated, thus:

In the determination of whether or not the right to a "speedy trial" has been violated,
certain factors may be considered and balanced against each other. These are
length of delay, reason for the delay, assertion of the right or failure to assert it, and
prejudice caused by the delay. The same factors may also be considered in
answering judicial inquiry whether or not a person officially charged with the
administration of justice has violated the speedy disposition of cases.

Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298, (1991), we held:

It must be here emphasized that the right to a speedy disposition of a case, like the
right to speedy trial, is deemed violated only when the proceeding is attended by
vexatious, capricious, and oppressive delays; or when unjustified postponements of
the trial are asked for and secured, or when without cause or justified motive a long
period of time is allowed to elapse without the party having his case tried.

Since July 25, 1984 or a month after AIBC and BRII were served with a copy of the amended
complaint, claimants had been asking that AIBC and BRII be declared in default for failure to file
their answers within the ten-day period provided in Section 1, Rule III of Book VI of the Rules and
Regulations of the POEA. At that time, there was a pending motion of AIBC and BRII to strike out of
the records the amended complaint and the "Compliance" of claimants to the order of the POEA,
requiring them to submit a bill of particulars.

The cases at bench are not of the run-of-the-mill variety, such that their final disposition in the
administrative level after seven years from their inception, cannot be said to be attended by
unreasonable, arbitrary and oppressive delays as to violate the constitutional rights to a speedy
disposition of the cases of complainants.

The amended complaint filed on June 6, 1984 involved a total of 1,767 claimants. Said complaint
had undergone several amendments, the first being on April 3, 1985.

The claimants were hired on various dates from 1975 to 1983. They were deployed in different
areas, one group in and the other groups outside of, Bahrain. The monetary claims totalling more
than US$65 million according to Atty. Del Mundo, included:

1. Unexpired portion of contract;

2. Interest earnings of Travel and Fund;

3. Retirement and Savings Plan benefit;

4. War Zone bonus or premium pay of at least 100% of basic pay;

5. Area Differential pay;

6. Accrued Interest of all the unpaid benefits;

7. Salary differential pay;


8. Wage Differential pay;

9. Refund of SSS premiums not remitted to Social Security System;

10. Refund of Withholding Tax not remitted to Bureau of Internal Revenue (B.I.R.);

11. Fringe Benefits under Brown & Root's "A Summary of Employees Benefits
consisting of 43 pages (Annex "Q" of Amended Complaint);

12. Moral and Exemplary Damages;

13. Attorney's fees of at least ten percent of amounts;

14. Other reliefs, like suspending and/or cancelling the license to recruit of AIBC and
issued by the POEA; and

15. Penalty for violation of Article 34 (Prohibited practices) not excluding reportorial
requirements thereof (NLRC Resolution, September 2, 1991, pp. 18-19; G.R. No.
104776, Rollo, pp. 73-74).

Inasmuch as the complaint did not allege with sufficient definiteness and clarity of some facts, the
claimants were ordered to comply with the motion of AIBC for a bill of particulars. When claimants
filed their "Compliance and Manifestation," AIBC moved to strike out the complaint from the records
for failure of claimants to submit a proper bill of particulars. While the POEA Administrator denied the
motion to strike out the complaint, he ordered the claimants "to correct the deficiencies" pointed out
by AIBC.

Before an intelligent answer could be filed in response to the complaint, the records of employment
of the more than 1,700 claimants had to be retrieved from various countries in the Middle East.
Some of the records dated as far back as 1975.

The hearings on the merits of the claims before the POEA Administrator were interrupted several
times by the various appeals, first to NLRC and then to the Supreme Court.

Aside from the inclusion of additional claimants, two new cases were filed against AIBC and BRII on
October 10, 1985 (POEA Cases Nos.
L-85-10-777 and L-85-10-779). Another complaint was filed on May 29, 1986 (POEA Case No. L-86-
05-460). NLRC, in exasperation, noted that the exact number of claimants had never been
completely established (Resolution, Sept. 2, 1991, G.R. No. 104776, Rollo, p. 57). All the three new
cases were consolidated with POEA Case No. L-84-06-555.

NLRC blamed the parties and their lawyers for the delay in terminating the proceedings, thus:

These cases could have been spared the long and arduous route towards resolution
had the parties and their counsel been more interested in pursuing the truth and the
merits of the claims rather than exhibiting a fanatical reliance on technicalities.
Parties and counsel have made these cases a litigation of emotion. The
intransigence of parties and counsel is remarkable. As late as last month, this
Commission made a last and final attempt to bring the counsel of all the parties (this
Commission issued a special order directing respondent Brown & Root's resident
agent/s to appear) to come to a more conciliatory stance. Even this failed (Rollo,
p. 58).

The squabble between the lawyers of claimants added to the delay in the disposition of the cases, to
the lament of NLRC, which complained:

It is very evident from the records that the protagonists in these consolidated cases
appear to be not only the individual complainants, on the one hand, and AIBC and
Brown & Root, on the other hand. The two lawyers for the complainants, Atty.
Gerardo Del Mundo and Atty. Florante De Castro, have yet to settle the right of
representation, each one persistently claiming to appear in behalf of most of the
complainants. As a result, there are two appeals by the complainants. Attempts by
this Commission to resolve counsels' conflicting claims of their respective authority to
represent the complainants prove futile. The bickerings by these two counsels are
reflected in their pleadings. In the charges and countercharges of falsification of
documents and signatures, and in the disbarment proceedings by one against the
other. All these have, to a large extent, abetted in confounding the issues raised in
these cases, jumble the presentation of evidence, and even derailed the prospects of
an amicable settlement. It would not be far-fetched to imagine that both counsel,
unwittingly, perhaps, painted a rainbow for the complainants, with the proverbial pot
of gold at its end containing more than US$100 million, the aggregate of the claims in
these cases. It is, likewise, not improbable that their misplaced zeal and exuberance
caused them to throw all caution to the wind in the matter of elementary rules of
procedure and evidence (Rollo, pp. 58-59).

Adding to the confusion in the proceedings before NLRC, is the listing of some of the complainants
in both petitions filed by the two lawyers. As noted by NLRC, "the problem created by this situation is
that if one of the two petitions is dismissed, then the parties and the public respondents would not
know which claim of which petitioner was dismissed and which was not."

B. Claimants insist that all their claims could properly be consolidated in a "class suit" because "all
the named complainants have similar money claims and similar rights sought irrespective of whether
they worked in Bahrain, United Arab Emirates or in Abu Dhabi, Libya or in any part of the Middle
East" (Rollo, pp. 35-38).

A class suit is proper where the subject matter of the controversy is one of common or general
interest to many and the parties are so numerous that it is impracticable to bring them all before the
court (Revised Rules of Court, Rule 3, Sec. 12).

While all the claims are for benefits granted under the Bahrain Law, many of the claimants worked
outside Bahrain. Some of the claimants were deployed in Indonesia and Malaysia under different
terms and conditions of employment.

NLRC and the POEA Administrator are correct in their stance that inasmuch as the first requirement
of a class suit is not present (common or general interest based on the Amiri Decree of the State of
Bahrain), it is only logical that only those who worked in Bahrain shall be entitled to file their claims in
a class suit.

While there are common defendants (AIBC and BRII) and the nature of the claims is the same (for
employee's benefits), there is no common question of law or fact. While some claims are based on
the Amiri Law of Bahrain, many of the claimants never worked in that country, but were deployed
elsewhere. Thus, each claimant is interested only in his own demand and not in the claims of the
other employees of defendants. The named claimants have a special or particular interest in specific
benefits completely different from the benefits in which the other named claimants and those
included as members of a "class" are claiming (Berses v. Villanueva, 25 Phil. 473 [1913]). It appears
that each claimant is only interested in collecting his own claims. A claimants has no concern in
protecting the interests of the other claimants as shown by the fact, that hundreds of them have
abandoned their co-claimants and have entered into separate compromise settlements of their
respective claims. A principle basic to the concept of "class suit" is that plaintiffs brought on the
record must fairly represent and protect the interests of the others (Dimayuga v. Court of Industrial
Relations, 101 Phil. 590 [1957]). For this matter, the claimants who worked in Bahrain can not be
allowed to sue in a class suit in a judicial proceeding. The most that can be accorded to them under
the Rules of Court is to be allowed to join as plaintiffs in one complaint (Revised Rules of Court, Rule
3, Sec. 6).

The Court is extra-cautious in allowing class suits because they are the exceptions to the
condition sine qua non, requiring the joinder of all indispensable parties.

In an improperly instituted class suit, there would be no problem if the decision secured is favorable
to the plaintiffs. The problem arises when the decision is adverse to them, in which case the others
who were impleaded by their self-appointed representatives, would surely claim denial of due
process.

C. The claimants in G.R. No. 104776 also urged that the POEA Administrator and NLRC should
have declared Atty. Florante De Castro guilty of "forum shopping, ambulance chasing activities,
falsification, duplicity and other unprofessional activities" and his appearances as counsel for some
of the claimants as illegal (Rollo, pp. 38-40).

The Anti-Forum Shopping Rule (Revised Circular No. 28-91) is intended to put a stop to the practice
of some parties of filing multiple petitions and complaints involving the same issues, with the result
that the courts or agencies have to resolve the same issues. Said Rule, however, applies only to
petitions filed with the Supreme Court and the Court of Appeals. It is entitled "Additional
Requirements For Petitions Filed with the Supreme Court and the Court of Appeals To Prevent
Forum Shopping or Multiple Filing of Petitioners and Complainants." The first sentence of the circular
expressly states that said circular applies to an governs the filing of petitions in the Supreme Court
and the Court of Appeals.

While Administrative Circular No. 04-94 extended the application of the anti-forum shopping rule to
the lower courts and administrative agencies, said circular took effect only on April 1, 1994.

POEA and NLRC could not have entertained the complaint for unethical conduct against Atty. De
Castro because NLRC and POEA have no jurisdiction to investigate charges of unethical conduct of
lawyers.

Attorney's Lien

The "Notice and Claim to Enforce Attorney's Lien" dated December 14, 1992 was filed by Atty.
Gerardo A. Del Mundo to protect his claim for attorney's fees for legal services rendered in favor of
the claimants (G.R. No. 104776, Rollo, pp. 841-844).

A statement of a claim for a charging lien shall be filed with the court or administrative agency which
renders and executes the money judgment secured by the lawyer for his clients. The lawyer shall
cause written notice thereof to be delivered to his clients and to the adverse party (Revised Rules of
Court, Rule 138, Sec. 37). The statement of the claim for the charging lien of Atty. Del Mundo should
have been filed with the administrative agency that rendered and executed the judgment.

Contempt of Court

The complaint of Atty. Gerardo A. Del Mundo to cite Atty. Florante De Castro and Atty. Katz Tierra
for violation of the Code of Professional Responsibility should be filed in a separate and appropriate
proceeding.

G.R. No. 104911-14

Claimants charge NLRC with grave abuse of discretion in not accepting their formula of "Three
Hours Average Daily Overtime" in computing the overtime payments. They claim that it was BRII
itself which proposed the formula during the negotiations for the settlement of their claims in Bahrain
and therefore it is in estoppel to disclaim said offer (Rollo, pp. 21-22).

Claimants presented a Memorandum of the Ministry of Labor of Bahrain dated April 16, 1983, which
in pertinent part states:

After the perusal of the memorandum of the Vice President and the Area Manager,
Middle East, of Brown & Root Co. and the Summary of the compensation offered by
the Company to the employees in respect of the difference of pay of the wages of the
overtime and the difference of vacation leave and the perusal of the documents
attached thereto i.e., minutes of the meetings between the Representative of the
employees and the management of the Company, the complaint filed by the
employees on 14/2/83 where they have claimed as hereinabove stated, sample of
the Service Contract executed between one of the employees and the company
through its agent in (sic) Philippines, Asia International Builders Corporation where it
has been provided for 48 hours of work per week and an annual leave of 12 days
and an overtime wage of 1 & 1/4 of the normal hourly wage.

xxx xxx xxx

The Company in its computation reached the following averages:

A. 1. The average duration of the actual service of the employee is 35 months for the
Philippino (sic) employees . . . .

2. The average wage per hour for the Philippino (sic) employee is US$2.69 . . . .

3. The average hours for the overtime is 3 hours plus in all public holidays and
weekends.

4. Payment of US$8.72 per months (sic) of service as compensation for the


difference of the wages of the overtime done for each Philippino (sic) employee . . .
(Rollo, p.22).

BRII and AIBC countered: (1) that the Memorandum was not prepared by them but by a subordinate
official in the Bahrain Department of Labor; (2) that there was no showing that the Bahrain Minister
of Labor had approved said memorandum; and (3) that the offer was made in the course of the
negotiation for an amicable settlement of the claims and therefore it was not admissible in evidence
to prove that anything is due to the claimants.

While said document was presented to the POEA without observing the rule on presenting official
documents of a foreign government as provided in Section 24, Rule 132 of the 1989 Revised Rules
on Evidence, it can be admitted in evidence in proceedings before an administrative body. The
opposing parties have a copy of the said memorandum, and they could easily verify its authenticity
and accuracy.

The admissibility of the offer of compromise made by BRII as contained in the memorandum is
another matter. Under Section 27, Rule 130 of the 1989 Revised Rules on Evidence, an offer to
settle a claim is not an admission that anything is due.

Said Rule provides:

Offer of compromise not admissible. In civil cases, an offer of compromise is not


an admission of any liability, and is not admissible in evidence against the offeror.

This Rule is not only a rule of procedure to avoid the cluttering of the record with unwanted evidence
but a statement of public policy. There is great public interest in having the protagonists settle their
differences amicable before these ripen into litigation. Every effort must be taken to encourage them
to arrive at a settlement. The submission of offers and counter-offers in the negotiation table is a
step in the right direction. But to bind a party to his offers, as what claimants would make this Court
do, would defeat the salutary purpose of the Rule.

G.R. Nos. 105029-32

A. NLRC applied the Amiri Decree No. 23 of 1976, which provides for greater benefits than those
stipulated in the overseas-employment contracts of the claimants. It was of the belief that "where the
laws of the host country are more favorable and beneficial to the workers, then the laws of the host
country shall form part of the overseas employment contract." It quoted with approval the
observation of the POEA Administrator that ". . . in labor proceedings, all doubts in the
implementation of the provisions of the Labor Code and its implementing regulations shall be
resolved in favor of labor" (Rollo, pp. 90-94).

AIBC and BRII claim that NLRC acted capriciously and whimsically when it refused to enforce the
overseas-employment contracts, which became the law of the parties. They contend that the
principle that a law is deemed to be a part of a contract applies only to provisions of Philippine law in
relation to contracts executed in the Philippines.

The overseas-employment contracts, which were prepared by AIBC and BRII themselves, provided
that the laws of the host country became applicable to said contracts if they offer terms and
conditions more favorable that those stipulated therein. It was stipulated in said contracts that:

The Employee agrees that while in the employ of the Employer, he will not engage in
any other business or occupation, nor seek employment with anyone other than the
Employer; that he shall devote his entire time and attention and his best energies,
and abilities to the performance of such duties as may be assigned to him by the
Employer; that he shall at all times be subject to the direction and control of the
Employer; and that the benefits provided to Employee hereunder are substituted for
and in lieu of all other benefits provided by any applicable law, provided of course,
that total remuneration and benefits do not fall below that of the host country
regulation or custom, it being understood that should applicable laws establish that
fringe benefits, or other such benefits additional to the compensation herein agreed
cannot be waived, Employee agrees that such compensation will be adjusted
downward so that the total compensation hereunder, plus the non-waivable benefits
shall be equivalent to the compensation herein agreed (Rollo, pp. 352-353).

The overseas-employment contracts could have been drafted more felicitously. While a part thereof
provides that the compensation to the employee may be "adjusted downward so that the total
computation (thereunder) plus the non-waivable benefits shall be equivalent to the compensation"
therein agreed, another part of the same provision categorically states "that total remuneration and
benefits do not fall below that of the host country regulation and custom."

Any ambiguity in the overseas-employment contracts should be interpreted against AIBC and BRII,
the parties that drafted it (Eastern Shipping Lines, Inc. v. Margarine-Verkaufs-Union, 93 SCRA 257
[1979]).

Article 1377 of the Civil Code of the Philippines provides:

The interpretation of obscure words or stipulations in a contract shall not favor the
party who caused the obscurity.

Said rule of interpretation is applicable to contracts of adhesion where there is already a prepared
form containing the stipulations of the employment contract and the employees merely "take it or
leave it." The presumption is that there was an imposition by one party against the other and that the
employees signed the contracts out of necessity that reduced their bargaining power (Fieldmen's
Insurance Co., Inc. v. Songco, 25 SCRA 70 [1968]).

Applying the said legal precepts, we read the overseas-employment contracts in question as
adopting the provisions of the Amiri Decree No. 23 of 1976 as part and parcel thereof.

The parties to a contract may select the law by which it is to be governed (Cheshire, Private
International Law, 187 [7th ed.]). In such a case, the foreign law is adopted as a "system" to regulate
the relations of the parties, including questions of their capacity to enter into the contract, the
formalities to be observed by them, matters of performance, and so forth (16 Am Jur 2d,
150-161).

Instead of adopting the entire mass of the foreign law, the parties may just agree that specific
provisions of a foreign statute shall be deemed incorporated into their contract "as a set of terms." By
such reference to the provisions of the foreign law, the contract does not become a foreign contract
to be governed by the foreign law. The said law does not operate as a statute but as a set of
contractual terms deemed written in the contract (Anton, Private International Law, 197 [1967]; Dicey
and Morris, The Conflict of Laws, 702-703, [8th ed.]).

A basic policy of contract is to protect the expectation of the parties (Reese, Choice of Law in Torts
and Contracts, 16 Columbia Journal of Transnational Law 1, 21 [1977]). Such party expectation is
protected by giving effect to the parties' own choice of the applicable law (Fricke v. Isbrandtsen Co.,
Inc., 151 F. Supp. 465, 467 [1957]). The choice of law must, however, bear some relationship to the
parties or their transaction (Scoles and Hayes, Conflict of Law 644-647 [1982]). There is no question
that the contracts sought to be enforced by claimants have a direct connection with the Bahrain law
because the services were rendered in that country.
In Norse Management Co. (PTE) v. National Seamen Board, 117 SCRA 486 (1982), the
"Employment Agreement," between Norse Management Co. and the late husband of the private
respondent, expressly provided that in the event of illness or injury to the employee arising out of
and in the course of his employment and not due to his own misconduct, "compensation shall be
paid to employee in accordance with and subject to the limitation of the Workmen's Compensation
Act of the Republic of the Philippines or the Worker's Insurance Act of registry of the vessel,
whichever is greater." Since the laws of Singapore, the place of registry of the vessel in which the
late husband of private respondent served at the time of his death, granted a better compensation
package, we applied said foreign law in preference to the terms of the contract.

The case of Bagong Filipinas Overseas Corporation v. National Labor Relations Commission, 135
SCRA 278 (1985), relied upon by AIBC and BRII is inapposite to the facts of the cases at bench.
The issue in that case was whether the amount of the death compensation of a Filipino seaman
should be determined under the shipboard employment contract executed in the Philippines or the
Hongkong law. Holding that the shipboard employment contract was controlling, the court
differentiated said case from Norse Management Co. in that in the latter case there was an express
stipulation in the employment contract that the foreign law would be applicable if it afforded greater
compensation.

B. AIBC and BRII claim that they were denied by NLRC of their right to due process when said
administrative agency granted Friday-pay differential, holiday-pay differential, annual-leave
differential and leave indemnity pay to the claimants listed in Annex B of the Resolution. At first,
NLRC reversed the resolution of the POEA Administrator granting these benefits on a finding that
the POEA Administrator failed to consider the evidence presented by AIBC and BRII, that some
findings of fact of the POEA Administrator were not supported by the evidence, and that some of the
evidence were not disclosed to AIBC and BRII (Rollo, pp. 35-36; 106-107). But instead of remanding
the case to the POEA Administrator for a new hearing, which means further delay in the termination
of the case, NLRC decided to pass upon the validity of the claims itself. It is this procedure that AIBC
and BRII complain of as being irregular and a "reversible error."

They pointed out that NLRC took into consideration evidence submitted on appeal, the same
evidence which NLRC found to have been "unilaterally submitted by the claimants and not disclosed
to the adverse parties" (Rollo, pp. 37-39).

NLRC noted that so many pieces of evidentiary matters were submitted to the POEA administrator
by the claimants after the cases were deemed submitted for resolution and which were taken
cognizance of by the POEA Administrator in resolving the cases. While AIBC and BRII had no
opportunity to refute said evidence of the claimants before the POEA Administrator, they had all the
opportunity to rebut said evidence and to present their
counter-evidence before NLRC. As a matter of fact, AIBC and BRII themselves were able to present
before NLRC additional evidence which they failed to present before the POEA Administrator.

Under Article 221 of the Labor Code of the Philippines, NLRC is enjoined to "use every and all
reasonable means to ascertain the facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due process."

In deciding to resolve the validity of certain claims on the basis of the evidence of both parties
submitted before the POEA Administrator and NLRC, the latter considered that it was not expedient
to remand the cases to the POEA Administrator for that would only prolong the already protracted
legal controversies.
Even the Supreme Court has decided appealed cases on the merits instead of remanding them to
the trial court for the reception of evidence, where the same can be readily determined from the
uncontroverted facts on record (Development Bank of the Philippines v. Intermediate Appellate
Court, 190 SCRA 653 [1990]; Pagdonsalan v. National Labor Relations Commission, 127 SCRA 463
[1984]).

C. AIBC and BRII charge NLRC with grave abuse of discretion when it ordered the POEA
Administrator to hold new hearings for 683 claimants listed in Annex D of the Resolution dated
September 2, 1991 whose claims had been denied by the POEA Administrator "for lack of proof" and
for 69 claimants listed in Annex E of the same Resolution, whose claims had been found by NLRC
itself as not "supported by evidence" (Rollo, pp. 41-45).

NLRC based its ruling on Article 218(c) of the Labor Code of the Philippines, which empowers it "[to]
conduct investigation for the determination of a question, matter or controversy, within its jurisdiction,
. . . ."

It is the posture of AIBC and BRII that NLRC has no authority under Article 218(c) to remand a case
involving claims which had already been dismissed because such provision contemplates only
situations where there is still a question or controversy to be resolved (Rollo, pp. 41-42).

A principle well embedded in Administrative Law is that the technical rules of procedure and
evidence do not apply to the proceedings conducted by administrative agencies (First Asian
Transport & Shipping Agency, Inc. v. Ople, 142 SCRA 542 [1986]; Asiaworld Publishing House, Inc.
v. Ople, 152 SCRA 219 [1987]). This principle is enshrined in Article 221 of the Labor Code of the
Philippines and is now the bedrock of proceedings before NLRC.

Notwithstanding the non-applicability of technical rules of procedure and evidence in administrative


proceedings, there are cardinal rules which must be observed by the hearing officers in order to
comply with the due process requirements of the Constitution. These cardinal rules are collated
in Ang Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940).

VIII

The three petitions were filed under Rule 65 of the Revised Rules of Court on the grounds that
NLRC had committed grave abuse of discretion amounting to lack of jurisdiction in issuing the
questioned orders. We find no such abuse of discretion.

WHEREFORE, all the three petitions are DISMISSED.

SO ORDERED.