Conflicts of Law Full text cases (Batch 1)
G.R. No. 122191 October 8, 1998
SAUDI ARABIAN AIRLINES, petitioner,
vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON.
RODOLFO A. ORTIZ, in his capacity as Presiding Judge of
Branch 89, Regional Trial Court of Quezon City, respondents.
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of Court
seeks to annul and set aside the Resolution1dated September 27, 1995
and the Decision2 dated April 10, 1996 of the Court of Appeals 3 in CA-
G.R. SP No. 36533,4 and the Orders5 dated August 29, 1994 6 and
February 2, 19957 that were issued by the trial court in Civil Case No.
Q-93-18394.8
The pertinent antecedent facts which gave rise to the instant petition,
as stated in the questioned Decision9, are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight
Attendant for its airlines based in Jeddah, Saudi Arabia. . . .
On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff
went to a disco dance with fellow crew members Thamer Al-Gazzawi
and Allah Al-Gazzawi, both Saudi nationals. Because it was almost
morning when they returned to their hotels, they agreed to have
breakfast together at the room of Thamer. When they were in te (sic)
room, Allah left on some pretext. Shortly after he did, Thamer
attempted to rape plaintiff. Fortunately, a roomboy and several security
personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi,
the latter as an accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA
officials interrogated her about the Jakarta incident. They then
requested her to go back to Jakarta to help arrange the release of
Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and
base manager Baharini negotiated with the police for the immediate
release of the detained crew members but did not succeed because
plaintiff refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to understand
the local dialect. She also declined to sign a blank paper and a
document written in the local dialect. Eventually, SAUDIA allowed
plaintiff to return to Jeddah but barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDI (sic). In September 1990, defendant
SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors requested her to see Mr.
Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi
Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and allowed
her to catch the afternoon flight out of Jeddah.
One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia,
a few minutes before the departure of her flight to Manila, plaintiff
was not allowed to board the plane and instead ordered to take a later
flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of
SAUDIA. When she did, a certain Khalid of the SAUDIA office
brought her to a Saudi court where she was asked to sign a document
written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993. Plaintiff then
returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report
to Jeddah once again and see Miniewy on June 27, 1993 for further
investigation. Plaintiff did so after receiving assurance from
SAUDIA's Manila manager, Aslam Saleemi, that the investigation was
routinary and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi
court on June 27, 1993. Nothing happened then but on June 28, 1993,
a Saudi judge interrogated plaintiff through an interpreter about the
Jakarta incident. After one hour of interrogation, they let her go. At the
airport, however, just as her plane was about to take off, a SAUDIA
officer told her that the airline had forbidden her to take flight. At the
Inflight Service Office where she was told to go, the secretary of Mr.
Yahya Saddick took away her passport and told her to remain in
Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the
same court where the judge, to her astonishment and shock, rendered a
decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the
Saudi court had tried her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff guilty of (1) adultery;
(2) going to a disco, dancing and listening to the music in violation of
Islamic laws; and (3) socializing with the male crew, in contravention
of Islamic tradition. 10
Facing conviction, private respondent sought the help of her employer,
petitioner SAUDIA. Unfortunately, she was denied any assistance. She
then asked the Philippine Embassy in Jeddah to help her while her case
is on appeal. Meanwhile, to pay for her upkeep, she worked on the
domestic flight of SAUDIA, while Thamer and Allah continued to
serve in the international
flights. 11
Because she was wrongfully convicted, the Prince of Makkah
dismissed the case against her and allowed her to leave Saudi Arabia.
Shortly before her return to Manila, 12 she was terminated from the
service by SAUDIA, without her being informed of the cause.
On November 23, 1993, Morada filed a Complaint 13 for damages
against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country
manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To
Dismiss 14 which raised the following grounds, to wit: (1) that the
Complaint states no cause of action against Saudia; (2) that defendant
Al-Balawi is not a real party in interest; (3) that the claim or demand
set forth in the Complaint has been waived, abandoned or otherwise
extinguished; and (4) that the trial court has no jurisdiction to try the
case.
On February 10, 1994, Morada filed her Opposition (To Motion to
Dismiss) 15. Saudia filed a reply 16 thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-
Balawi was dropped as party defendant. On August 11, 1994, Saudia
filed its Manifestation and Motion to Dismiss Amended Complaint 18.
The trial court issued an Order 19 dated August 29, 1994 denying the
Motion to Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judge 20 denying the Motion to Dismiss,
SAUDIA filed on September 20, 1994, its Motion for
Reconsideration 21 of the Order dated August 29, 1994. It alleged that
the trial court has no jurisdiction to hear and try the case on the basis
of Article 21 of the Civil Code, since the proper law applicable is the
law of the Kingdom of Saudi Arabia. On October 14, 1994, Morada
filed her Opposition 22(To Defendant's Motion for Reconsideration).
In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA
alleged that since its Motion for Reconsideration raised lack of
jurisdiction as its cause of action, the Omnibus Motion Rule does not
apply, even if that ground is raised for the first time on appeal.
Additionally, SAUDIA alleged that the Philippines does not have any
substantial interest in the prosecution of the instant case, and hence,
without jurisdiction to adjudicate the same.
Respondent Judge subsequently issued another Order 24 dated February
2, 1995, denying SAUDIA's Motion for Reconsideration. The
pertinent portion of the assailed Order reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian
Airlines filed, thru counsel, on September 20, 1994, and the
Opposition thereto of the plaintiff filed, thru counsel, on October 14,
1994, as well as the Reply therewith of defendant Saudi Arabian
Airlines filed, thru counsel, on October 24, 1994, considering that a
perusal of the plaintiffs Amended Complaint, which is one for the
recovery of actual, moral and exemplary damages plus attorney's fees,
upon the basis of the applicable Philippine law, Article 21 of the New
Civil Code of the Philippines, is, clearly, within the jurisdiction of this
Court as regards the subject matter, and there being nothing new of
substance which might cause the reversal or modification of the order
sought to be reconsidered, the motion for reconsideration of the
defendant, is DENIED.
SO ORDERED. 25
Consequently, on February 20, 1995, SAUDIA filed its Petition
for Certiorari and Prohibition with Prayer for Issuance of Writ of
Preliminary Injunction and/or Temporary Restraining Order 26 with the
Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with
Temporary Restraining Order 27 dated February 23, 1995, prohibiting
the respondent Judge from further conducting any proceeding, unless
otherwise directed, in the interim.
In another Resolution 28 promulgated on September 27, 1995, now
assailed, the appellate court denied SAUDIA's Petition for the
Issuance of a Writ of Preliminary Injunction dated February 18, 1995,
to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction is
hereby DENIED, after considering the Answer, with Prayer to Deny
1
Conflicts of Law Full text cases (Batch 1)
Writ of Preliminary Injunction (Rollo, p. 135) the Reply and
Rejoinder, it appearing that herein petitioner is not clearly entitled
thereto (Unciano Paramedical College, et. Al., v. Court of Appeals,
et. Al., 100335, April 7, 1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the
instant Petition 29 for Review with Prayer for Temporary Restraining
Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent
Court of Appeals rendered the Decision 30dated April 10, 1996, now
also assailed. It ruled that the Philippines is an appropriate forum
considering that the Amended Complaint's basis for recovery of
damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court. It further held that certiorari is not
the proper remedy in a denial of a Motion to Dismiss, inasmuch as the
petitioner should have proceeded to trial, and in case of an adverse
ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review
with Prayer for Temporary Restraining Order 31 dated April 30, 1996,
given due course by this Court. After both parties submitted their
Memoranda, 32 the instant case is now deemed submitted for decision.
Petitioner SAUDIA raised the following issues:
I 38
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-
18394 based on Article 21 of the New Civil Code since the proper law
applicable is the law of the Kingdom of Saudi Arabia inasmuch as this
case involves what is known in private international law as a "conflicts
problem". Otherwise, the Republic of the Philippines will sit in
judgment of the acts done by another sovereign state which is
abhorred.
II
Leave of court before filing a supplemental pleading is not a
jurisdictional requirement. Besides, the matter as to absence of leave
of court is now moot and academic when this Honorable Court
required the respondents to comment on petitioner's April 30, 1996
Supplemental Petition For Review With Prayer For A Temporary
Restraining Order Within Ten (10) Days From Notice Thereof. Further,
the Revised Rules of Court should be construed with liberality
pursuant to Section 2, Rule 1 thereof.
III
Petitioner received on April 22, 1996 the April 10, 1996 decision in
CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon.
Rodolfo A. Ortiz, et al." and filed its April 30, 1996 Supplemental
Petition For Review With Prayer For A Temporary Restraining Order
on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary
period as provided for under Section 1, Rule 45 of the Revised Rules
of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has not
yet become final and executory and this Honorable Court can take
cognizance of this case. 33
From the foregoing factual and procedural antecedents, the following
issues emerge for our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON
CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO.
Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI
ARABIAN AIRLINES".
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN
RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD
GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must
be settled at the outset. It maintains that private respondent's claim for
alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It
alleges that the existence of a foreign element qualifies the instant case
for the application of the law of the Kingdom of Saudi Arabia, by
virtue of the lex loci delicti commissi rule. 34
On the other hand, private respondent contends that since her
Amended Complaint is based on Articles 19 35 and 21 36 of the Civil
Code, then the instant case is properly a matter of domestic law. 37
Under the factual antecedents obtaining in this case, there is no dispute
that the interplay of events occurred in two states, the Philippines and
Saudi Arabia.
As stated by private respondent in her Amended Complaint dated
June 23, 1994:
2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign
airlines corporation doing business in the Philippines. It may be served
with summons and other court processes at Travel Wide Associated
Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero St.,
Salcedo Village, Makati, Metro Manila.
xxx xxx xxx
6. Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and
Allah after two weeks of detention. Eventually, they were again put in
service by defendant SAUDIA. In September 1990, defendant
SAUDIA transferred plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta
incident was already behind her, her superiors reauested her to see
MR. Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi
Arabia. When she saw him, he brought her to the police station where
the police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her to
make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and allowed
her to catch the afternoon flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi
Arabia, a few minutes before the departure of her flight to Manila,
plaintiff was not allowed to board the plane and instead ordered to take
a later flight to Jeddah to see Mr. Meniewy, the Chief Legal Officer of
SAUDIA. When she did, a certain Khalid of the SAUDIA office
brought her to a Saudi court where she was asked to sigh a document
written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a
notice to her to appear before the court on June 27, 1993. Plaintiff then
returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report
to Jeddah once again and see Miniewy on June 27, 1993 for further
investigation. Plaintiff did so after receiving assurance from
SAUDIA's Manila manger, Aslam Saleemi, that the investigation was
routinary and that it posed no danger to her.
10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same
Saudi court on June 27, 1993. Nothing happened then but on June 28,
1993, a Saudi judge interrogated plaintiff through an interpreter about
the Jakarta incident. After one hour of interrogation, they let her go. At
the airport, however, just as her plane was about to take off, a
SAUDIA officer told her that the airline had forbidden her to take that
flight. At the Inflight Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her passport and told her to
remain in Jeddah, at the crew quarters, until further orders.
11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to
the same court where the judge, to her astonishment and shock,
rendered a decision, translated to her in English, sentencing her to five
months imprisonment and to 286 lashes. Only then did she realize that
the Saudi court had tried her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff guilty of (1) adultery;
(2) going to a disco, dancing, and listening to the music in violation of
Islamic laws; (3) socializing with the male crew, in contravention of
Islamic tradition.
12. Because SAUDIA refused to lend her a hand in the case, plaintiff
sought the help of the Philippines Embassy in Jeddah. The latter
helped her pursue an appeal from the decision of the court. To pay for
her upkeep, she worked on the domestic flights of defendant SAUDIA
while, ironically, Thamer and Allah freely served the international
flights. 39
Where the factual antecedents satisfactorily establish the existence of a
foreign element, we agree with petitioner that the problem herein
could present a "conflicts" case.
A factual situation that cuts across territorial lines and is affected by
the diverse laws of two or more states is said to contain a "foreign
element". The presence of a foreign element is inevitable since social
and economic affairs of individuals and associations are rarely
confined to the geographic limits of their birth or conception. 40
The forms in which this foreign element may appear are many. 41 The
foreign element may simply consist in the fact that one of the parties to
a contract is an alien or has a foreign domicile, or that a contract
between nationals of one State involves properties situated in another
State. In other cases, the foreign element may assume a complex
form. 42
In the instant case, the foreign element consisted in the fact that private
respondent Morada is a resident Philippine national, and that petitioner
SAUDIA is a resident foreign corporation. Also, by virtue of the
employment of Morada with the petitioner Saudia as a flight
stewardess, events did transpire during her many occasions of travel
across national borders, particularly from Manila, Philippines to
Jeddah, Saudi Arabia, and vice versa, that caused a "conflicts"
situation to arise.
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Conflicts of Law Full text cases (Batch 1)
We thus find private respondent's assertion that the case is purely
domestic, imprecise. A conflicts problem presents itself here, and the
question of jurisdiction 43 confronts the court a quo.
After a careful study of the private respondent's Amended
Complaint, 44 and the Comment thereon, we note that she aptly
predicated her cause of action on Articles 19 and 21 of the New Civil
Code.
On one hand, Article 19 of the New Civil Code provides:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice give everyone his due and
observe honesty and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals, 45 this
Court held that:
The aforecited provisions on human relations were intended to expand
the concept of torts in this jurisdiction by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for
human foresight to specifically provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21
gives flesh to its provisions. Thus, we agree with private respondent's
assertion that violations of Articles 19 and 21 are actionable, with
judicially enforceable remedies in the municipal forum.
Based on the allegations 46 in the Amended Complaint, read in the light
of the Rules of Court on jurisdiction 47 we find that the Regional Trial
Court (RTC) of Quezon City possesses jurisdiction over the subject
matter of the suit. 48 Its authority to try and hear the case is provided
for under Section 1 of Republic Act No. 7691, to wit:
Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as
the "Judiciary Reorganization Act of 1980", is hereby amended to read
as follows:
Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall
exercise exclusive jurisdiction:
xxx xxx xxx
(8) In all other cases in which demand, exclusive of interest, damages
of whatever kind, attorney's fees, litigation expenses, and cots or the
value of the property in controversy exceeds One hundred thousand
pesos (P100,000.00) or, in such other cases in Metro Manila, where the
demand, exclusive of the above-mentioned items exceeds Two
hundred Thousand pesos (P200,000.00). (Emphasis ours)
xxx xxx xxx
And following Section 2 (b), Rule 4 of the Revised Rules of Court —
the venue, Quezon City, is appropriate:
Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial
Court]
(a) xxx xxx xxx
(b) Personal actions. — All other actions may be commenced and tried
where the defendant or any of the defendants resides or may be found,
or where the plaintiff or any of the plaintiff resides, at the election of
the plaintiff.
Pragmatic considerations, including the convenience of the parties,
also weigh heavily in favor of the RTC Quezon City assuming
jurisdiction. Paramount is the private interest of the litigant.
Enforceability of a judgment if one is obtained is quite obvious.
Relative advantages and obstacles to a fair trial are equally important.
Plaintiff may not, by choice of an inconvenient forum, "vex", "harass",
or "oppress" the defendant, e.g. by inflicting upon him needless
expense or disturbance. But unless the balance is strongly in favor of
the defendant, the plaintiffs choice of forum should rarely be
disturbed. 49
Weighing the relative claims of the parties, the court a quo found it
best to hear the case in the Philippines. Had it refused to take
cognizance of the case, it would be forcing plaintiff (private
respondent now) to seek remedial action elsewhere, i.e. in the
Kingdom of Saudi Arabia where she no longer maintains substantial
connections. That would have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary
difficulties and inconvenience have been shown by either of the
parties. The choice of forum of the plaintiff (now private respondent)
should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of
the parties herein. By filing her Complaint and Amended Complaint
with the trial court, private respondent has voluntary submitted herself
to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several
motions 50 praying for the dismissal of Morada's Amended Complaint.
SAUDIA also filed an Answer In Ex Abundante Cautelam dated
February 20, 1995. What is very patent and explicit from the motions
filed, is that SAUDIA prayed for other reliefs under the premises.
Undeniably, petitioner SAUDIA has effectively submitted to the trial
court's jurisdiction by praying for the dismissal of the Amended
Complaint on grounds other than lack of jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.: 51
We observe that the motion to dismiss filed on April 14, 1962, aside
from disputing the lower court's jurisdiction over defendant's person,
prayed for dismissal of the complaint on the ground that plaintiff's
cause of action has prescribed. By interposing such second ground in
its motion to dismiss, Ker and Co., Ltd. availed of an affirmative
defense on the basis of which it prayed the court to resolve controversy
in its favor. For the court to validly decide the said plea of defendant
Ker & Co., Ltd., it necessarily had to acquire jurisdiction upon the
latter's person, who, being the proponent of the affirmative defense,
should be deemed to have abandoned its special appearance and
voluntarily submitted itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that;
When the appearance is by motion for the purpose of objecting to the
jurisdiction of the court over the person, it must be for the sole and
separate purpose of objecting to the jurisdiction of the court. If his
motion is for any other purpose than to object to the jurisdiction of the
court over his person, he thereby submits himself to the jurisdiction of
the court. A special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will be held to
be a general appearance, if the party in said motion should, for
example, ask for a dismissal of the action upon the further ground that
the court had no jurisdiction over the subject matter. 52
Clearly, petitioner had submitted to the jurisdiction of the Regional
Trial Court of Quezon City. Thus, we find that the trial court has
jurisdiction over the case and that its exercise thereof, justified.
As to the choice of applicable law, we note that choice-of-law
problems seek to answer two important questions: (1) What legal
system should control a given situation where some of the significant
facts occurred in two or more states; and (2) to what extent should the
chosen legal system regulate the situation. 53
Several theories have been propounded in order to identify the legal
system that should ultimately control. Although ideally, all choice-of-
law theories should intrinsically advance both notions of justice and
predictability, they do not always do so. The forum is then faced with
the problem of deciding which of these two important values should be
stressed. 54
Before a choice can be made, it is necessary for us to determine under
what category a certain set of facts or rules fall. This process is known
as "characterization", or the "doctrine of qualification". It is the
"process of deciding whether or not the facts relate to the kind of
question specified in a conflicts rule." 55The purpose of
"characterization" is to enable the forum to select the proper law. 56
Our starting point of analysis here is not a legal relation, but a factual
situation, event, or operative fact. 57An essential element of conflict
rules is the indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a factual
relationship (such as property right, contract claim) and a connecting
factor or point of contact, such as the situs of the res, the place of
celebration, the place of performance, or the place of wrongdoing. 58
Note that one or more circumstances may be present to serve as the
possible test for the determination of the applicable law. 59 These "test
factors" or "points of contact" or "connecting factors" could be any of
the following:
(1) The nationality of a person, his domicile, his residence, his place of
sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed
to be situated. In particular, the lex situs is decisive when real rights
are involved;
(4) the place where an act has been done, the locus actus, such as the
place where a contract has been made, a marriage celebrated, a will
signed or a tort committed. The lex loci actus is particularly important
in contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the
place of performance of contractual duties, or the place where a power
of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should
govern their agreement, thelex loci intentionis;
3
Conflicts of Law Full text cases (Batch 1)
(7) the place where judicial or administrative proceedings are
instituted or done. The lex fori — the law of the forum — is
particularly important because, as we have seen earlier, matters of
"procedure" not going to the substance of the claim involved are
governed by it; and because the lex fori applies whenever the content
of the otherwise applicable foreign law is excluded from application in
a given case for the reason that it falls under one of the exceptions to
the applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all
legal relationships of the ship and of its master or owner as such. It
also covers contractual relationships particularly contracts of
affreightment. 60 (Emphasis ours.)
After a careful study of the pleadings on record, including allegations
in the Amended Complaint deemed admitted for purposes of the
motion to dismiss, we are convinced that there is reasonable basis for
private respondent's assertion that although she was already working in
Manila, petitioner brought her to Jeddah on the pretense that she would
merely testify in an investigation of the charges she made against the
two SAUDIA crew members for the attack on her person while they
were in Jakarta. As it turned out, she was the one made to face trial for
very serious charges, including adultery and violation of Islamic laws
and tradition.
There is likewise logical basis on record for the claim that the
"handing over" or "turning over" of the person of private respondent to
Jeddah officials, petitioner may have acted beyond its duties as
employer. Petitioner's purported act contributed to and amplified or
even proximately caused additional humiliation, misery and suffering
of private respondent. Petitioner thereby allegedly facilitated the arrest,
detention and prosecution of private respondent under the guise of
petitioner's authority as employer, taking advantage of the trust,
confidence and faith she reposed upon it. As purportedly found by the
Prince of Makkah, the alleged conviction and imprisonment of private
respondent was wrongful. But these capped the injury or harm
allegedly inflicted upon her person and reputation, for which petitioner
could be liable as claimed, to provide compensation or redress for the
wrongs done, once duly proven.
Considering that the complaint in the court a quo is one involving
torts, the "connecting factor" or "point of contact" could be the place
or places where the tortious conduct or lex loci actus occurred. And
applying the torts principle in a conflicts case, we find that the
Philippines could be said as a situs of the tort (the place where the
alleged tortious conduct took place). This is because it is in the
Philippines where petitioner allegedly deceived private respondent, a
Filipina residing and working here. According to her, she had honestly
believed that petitioner would, in the exercise of its rights and in the
performance of its duties, "act with justice, give her due and observe
honesty and good faith." Instead, petitioner failed to protect her, she
claimed. That certain acts or parts of the injury allegedly occurred in
another country is of no moment. For in our view what is important
here is the place where the over-all harm or the totality of the alleged
injury to the person, reputation, social standing and human rights of
complainant, had lodged, according to the plaintiff below (herein
private respondent). All told, it is not without basis to identify the
Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex
loci delicti commissi, modern theories and rules on tort liability 61 have
been advanced to offer fresh judicial approaches to arrive at just construed as prejudging the results of the case in any manner
results. In keeping abreast with the modern theories on tort liability, whatsoever.
we find here an occasion to apply the "State of the most significant
relationship" rule, which in our view should be appropriate to apply WHEREFORE, the instant petition for certiorari is hereby
now, given the factual context of this case. DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P.
Morada vs. Saudi Arabia Airlines" is hereby REMANDED to Regional
In applying said principle to determine the State which has the most Trial Court of Quezon City, Branch 89 for further proceedings.
significant relationship, the following contacts are to be taken into
account and evaluated according to their relative importance with SO ORDERED.
respect to the particular issue: (a) the place where the injury occurred;
(b) the place where the conduct causing the injury occurred; (c) the
domicile, residence, nationality, place of incorporation and place of
business of the parties, and (d) the place where the relationship, if any,
between the parties is centered. 62
As already discussed, there is basis for the claim that over-all injury
occurred and lodged in the Philippines. There is likewise no question
that private respondent is a resident Filipina national, working with
petitioner, a resident foreign corporation engaged here in the business
of international air carriage. Thus, the "relationship" between the
parties was centered here, although it should be stressed that this suit is
not based on mere labor law violations. From the record, the claim that
the Philippines has the most significant contact with the matter in this
dispute, 63 raised by private respondent as plaintiff below against
defendant (herein petitioner), in our view, has been properly
established.
Prescinding from this premise that the Philippines is the situs of the
tort complained of and the place "having the most interest in the
problem", we find, by way of recapitulation, that the Philippine law on
tort liability should have paramount application to and control in the
resolution of the legal issues arising out of this case. Further, we hold
that the respondent Regional Trial Court has jurisdiction over the
parties and the subject matter of the complaint; the appropriate venue
is in Quezon City, which could properly apply Philippine law.
Moreover, we find untenable petitioner's insistence that "[s]ince
private respondent instituted this suit, she has the burden of pleading
and proving the applicable Saudi law on the matter." 64As aptly said by
private respondent, she has "no obligation to plead and prove the law
of the Kingdom of Saudi Arabia since her cause of action is based on
Articles 19 and 21" of the Civil Code of the Philippines. In her
Amended Complaint and subsequent pleadings, she never alleged that
Saudi law should govern this case. 65 And as correctly held by the
respondent appellate court, "considering that it was the petitioner who
was invoking the applicability of the law of Saudi Arabia, then the
burden was on it [petitioner] to plead and to establish what the law of
Saudi Arabia is". 66
Lastly, no error could be imputed to the respondent appellate court in
upholding the trial court's denial of defendant's (herein petitioner's)
motion to dismiss the case. Not only was jurisdiction in order and
venue properly laid, but appeal after trial was obviously available, and
expeditious trial itself indicated by the nature of the case at hand.
Indubitably, the Philippines is the state intimately concerned with the
ultimate outcome of the case below, not just for the benefit of all the
litigants, but also for the vindication of the country's system of law and
justice in a transnational setting. With these guidelines in mind, the
trial court must proceed to try and adjudge the case in the light of
relevant Philippine law, with due consideration of the foreign element
or elements involved. Nothing said herein, of course, should be
4
Conflicts of Law Full text cases (Batch 1)
United States Supreme Court
NORTHERN PAC. R. CO. v. BABCOCK, (1894)
No. 328
Argued: Decided: May 26, 1894
This was an action by Albert L. Babcock, as administrator of Hugh M.
Munro, deceased, against the Northern Pacific Railroad Company, for
damages for the death of said Munro. The jury found a verdict for
plaintiff, and judgment was entered thereon. Defendant brought error.
The plaintiff below, who was the administrator of the estate of Hugh
M. Munro, sued in the district court of the fourth judicial district of
Minnesota to recover $25,000 damages for the killing of Munro on the
10th day of January, 1888, at or near a station known as Gray Cliff, on
the Northern Pacific Railway, in the territory of Montana. The
complaint contained the following allegations: [154 U.S. 190,
191] 'That on the said 10th day of January, 1888, the said Hugh M.
Munro, now deceased, was in the employ of the said defendant
corporation, within the territory of Montana, in the capacity of
locomotive engineer, for hire and reward by the said defendant paid,
and that the duty of running a locomotive engine upon said defendant's
line of railway within said territory was by said defendant assigned to
said Hugh M. Munro on the said 10th day of January, 1888, and the
defendant directed and ordered the said Hugh M. Munro to run a
certain locomotive engine, the property of said defendant, known as
engine 'No. 161,' over and upon its said railway in said territory; that
prior to and at the time the said orders were so presented to said Munro
there had been, and then was, a severe snowstorm in progress, and
defendant's line of railway over and upon which said Munro was so
ordered to run said engine was covered with drifting snow theretofore
accumulated thereon, and then fast accumulating, notwithstanding
which the said defendant corporation did willfully, improperly,
negligently, and carelessly refuse and neglect to send a snow plow
ahead of said engine No. 161 to clear the snow and ice from said
defendant's said track, which had accumulated and was accumulating
thereon by reason of said storm, so as to render the passage of said
engine No. 161 safe and proper.
'That there was attached to the forward part of said engine No. 161 a
certain attachment known as a 'pilot plow,' an appliance constructed
thereon for the purpose of clearing the railway of snow and ice
accumulated thereon, and render safe the passage of the engine to
which said plow was attached over and upon said railway of
defendant.
'That on the said 10th day of January, 1888, the said defendant
corporation knowingly, willfully, negligently, and carelessly allowed to
be and remain upon said engine No. 161, attached thereto as aforesaid,
a certain pilot plow, the iron braces, bolts, and rods of which were
broken, imperfect, and insufficient, by reason of which condition the
said plow was loose and insufficiently secured to the pilot of said
engine, allowing the said pilot to raise up and ride over
obstructing [154 U.S. 190, 192] snow and ice instead of cutting
through the same, as was the intention of its construction, rendering
the running of said engine upon said railway dangerous; and that the
said defendant well knew of the broken, defective, and dangerous
condition of said engine No. 161 at the time the said Hugh M. Munro
was so ordered to run the same upon and over said railway,
notwithstanding which the said defendant corporation did negligently
and carelessly furnish to said Hugh M. Munro said engine, with the
said broken and imperfect pilot plow attached thereto, to run over and
upon its said line of railway.
'That while said Hugh M. Munro was running said engine in
performance of his duty as such engineer, and pursuant to the orders of
said defendant corporation, and before daylight on said 10th day of
January, 1888, near Gray Cliff, in said territory of Montana, the said
engine struck an accumulation of snow and ice which said defendant
had carelessly and negligently allowed to accumulate upon its said
railway track, and the pilot plow of said engine, by reason of its
broken, loose, and imperfect condition aforesaid, did ride upon said
accumulation of snow and ice, thereby derailing said engine, and
throwing the same from said railway track, whereby the said Hugh M.
Munro was instantly killed.
'That the law of the territory of Montana governing actions for
recovery of damages for causing death was on the 10th day of January,
1888, and now is, sections 13 and 14 of title 2 of said chapter 1 of the
first division of Code of Civil Procedure of the territory of Montana;
which said sections of said law of said territory are in the words and
figures following, viz.:
"Sec. 13. A father, or, in case of his death or desertion of his family, the
mother, may maintain an action for the injury or death of a child, or a
guardian for the injury or death of his ward.
"Sec. 14. Where the death of a person not being a minor is caused by
the wrongful act or neglect of another, his heirs or personal
representatives may maintain an action for [154 U.S. 190,
193] damages against the person causing the death, or if such person
be employed by another person who is responsible for his action, then
also against such other person. In every action under this and the
preceding section such damages may be given as under all the
circumstances of the case may be just."
The case was removed to the circuit court of the United States for the
district of Minnesota, where an answer was filed by the defendant,
denying the averments of the complaint, and alleging that the death of
Munro was caused solely by his negligence and carelessness, and not
by the negligence of the defendant or any of its servants or employes.
There was a verdict and judgment below in favor of the plaintiff for $
10,000. To review that judgment this writ of error is sued out. The
errors assigned are as follows:
'First. The court erred in charging the jury as follows: 'Did it fail to
discharge any duty which the law imposed upon it for the safety of its
employe, the plaintiff's intestate? If it did, and if such negligence was
the cause of the death of the engineer, Munro, then the plaintiff is
entitled to recover.'
'Second. The court erred further in charging the jury as follows: 'The
charge in this complaint is that this death was caused by the derailment
of the engine, which took place because the plow was out of repair as
described, or, at least, that the defendant had not used reasonable care
in clearing its track; and that when the engineer, in that condition,
arrived at this cut, two miles from Gray Cliff, the snow had
accumulated to such an extent that the engine was thereby derailed;
and that it was this negligence which caused the death.'
'Third. The court erred further in charging the jury as follows: 'Many
states have different laws. The law in this state until recently was that
only $5,000 could be given in a case of death. It has lately been
increased to $10,000.'
'Fourth. The court erred further in charging the jury as follows: 'If you
believe from all the evidence in the case that the plaintiff is entitled to
recovery, then it is for you to determine what compensation you will
give for the death of the plaintiff's intestate. The law of Montana limits
it to such an amount as you think would be proper under all
circum- [154 U.S. 190, 194] stances of the case, and that is the law
which will govern in this case.'
'Fifth. The court erred further in refusing to give to the jury the
following request tendered by defendant's counsel: 'You, the jury, are
instructed to find a verdict for the defendant.'
'Sixth. The court erred further in refusing to give to the jury the
following request, tendered by defendant's counsel: 'The laws of
Minnesota limit the amount of damages to be recovered in this case to
five thousand dollars.'
'Seventh. The court erred further in refusing to give to the jury the
following request, tendered by defendant's counsel: 'The court instructs
the jury that, unless they find that it was customary for defendant
company to send a snow plow in advance of the trains running east
from Livingston during storms of this character, and that unless,
further, the accident occurred by reason of the negligent and careless
failure of the defendant to send such snow plow in advance, they will
find for the defendant.'
'Eighth. The court erred further in refusing to give to the jury the
following request, tendered by defendant's counsel: 'The court instructs
the jury that, unless they find that the defendant carelessly and
negligently furnished to the deceased engineer a plow attached to his
engine, the iron bolts and rods of which were broken, imperfect, and
insufficient, and that by reason of which condition the said plow was
loose and insufficiently secured to the pilot of said engine, and that
when the said engine struck the snow at the cut, as testified to, the pilot
plow of said engine, by reason of its said broken, loose, and imperfect
condition, did ride upon the accumulated snow and ice at said cut, and
that thereby the said engine was thrown from the track, the jury will
find for the defendant."
...
James McNaught, A. H. Garland, and H. J. May, for plaintiff in error.
R. C. Benton, for defendant in error.
[154 U.S. 190, 196]
Mr. Justice WHITE, after stating the case, delivered the opinion of the
court.
For convenience, we shall consider the various assignments of error
without regard to their numerical order.
The third, fourth, and sixth assignments involve the same question,
and may be decided upon together.
The plaintiff's intestate was an engineer in the employ of the defendant
corporation in the territory of Montana, and the accident by which he
lost his life occurred there. The law of the territory of Montana at the
time provided as follows:
5
Conflicts of Law Full text cases (Batch 1)
'Where the death of a person not being a minor is caused by the
wrongful act or neglect of another his heirs or personal representatives
may maintain an action for damages against the person causing the
death, or if such person be employed by another person who is
responsible for his action, then also [154 U.S. 190, 197] against such
other person. In every action under this and the preceding section such
damages may be given as under all the circumstances of the case may
be just.' Code Civ. Proc. Mont. div. 1, tit. 2, c. 1, 14.
Under the law of Minnesota, when the death occurred, the limit of
recovery in case of death was $5,000, but at the time of the trial of the
case in the court below this limit had been increased to $10,000 by
amendment of the Minnesota statutes.
The question which those assignments of errors present is, was the
amount of damage to be controlled by the law of the place of
employment and where the accident occurred, or by the law of the
forum in which the suit was pending? In the case of Herrick v. Railway
Co., reported in 31 Minn. 11, 16 N. W. 413, which involved the
question of whether the courts of Minnesota would enforce and apply
to a suit in that state, for a cause of action originating in Iowa, a law of
the state of Iowa making railroad corporations liable for damages
sustained by its employes in consequence of the neglect of fellow
servants, the court said:
'The statute of another state has, of course, no extraterritorial force, but
rights acquired under it will always, in comity, be enforced, if not
against the public policy of the laws of the former. In such cases the
law of the place where the right was acquired, or the liability was
incurred, will govern as to the right of action; while all that pertains
merely to the remedy will be controlled by the law of the state where
the action is brought. And we think the principle is the same whether
the right of action be ex contractu or ex delicto.
'The defendant admits the general rule to be as thus stated, but
contends that, as to statutory actions like the present, it is subject to the
qualification that, to sustain the action, the law of the forum and the
law of the place where the right of action accrued must concur in
holding that the act done gives a right of action. We admit that some
text writers-notably, Rorer on Interstate Law-seem to lay [154 U.S.
190, 198] down this rule, but the authorities cited generally fail to
sustain it.
...
'But it by no means follows that, because the statute of one state differs
from the law of another state, therefore it would be held contrary to the
policy of the laws of the latter state. Every day our courts are enforcing
rights under foreign contracts where the lex loci contractus and the lex
fori are altogether different, and yet we construe these contracts and
enforce rights under them according to their force and effect under the
laws of the state where made. To justify a court in refusing to enforce a
right of action which accrued under the law of another state because
against the policy of our laws, it must appear that it is against good
morals or natural justice, or that, for some other such reason, the
enforcement of it would be prejudicial to the general interests of our
own citizens. If the state of Iowa sees fit to impose this obligation
upon those operating railroads within her bounds, and to make it a
condition of the employment of those who enter their service, we see
nothing in such a law repugnant either to good morals or natural
justice, or prejudicial to the interests of our own citizens.'
This opinion of the supreme court of Minnesota is in accord with the
rule announced by Chief Justice Marshall in The Antelope, 10 Wheat.
66. In referring to that case in Railroad Co. v. Cox, 145 U.S. 593 , 12
Sup. Ct. 905, the court said: 'The courts of no country execute the
penal laws of another. But we have held that that rule cannot be
invoked as applied to a statute of this kind, which merely authorizes a
civil action to recover damages for a civil injury.' The rule thus
enunciated had been adopted in previous cases, and has since been
approved by this court. Smith v. Condry, 1 How. 28; The China, 7
Wall. 53, 64; Dennick v. Railroad Co., 103 U.S. 11 ; The Scotland, 105
U.S. 24 , 29; Huntington v. Attrill, 146 U.S. 670 , 13 Sup. Ct. 224.
Indeed, in Railroad Co. v. Cox, supra, Mr. Chief Justice Fuller,
speaking for the court, said: 'The question, however, is one of general
law, and we regard it as settled in Dennick v. Railroad Co.' [154 U.S.
190, 199] The contract of employment was made in Montana, and the
accident occurred in that state, while the suit was brought in
Minnesota. We think there was no error in holding that the right to
recover was governed by the lex loci, and not by the lex fori.
The fifth error assigned is the refusal to instruct the jury to find a
verdict for the defendant.
The evidence tended to show that Munro was an engineer in the
employ of the railroad company at the town of Livingston; that, as
such engineer, he was driving engine No. 161 some time in the latter
part of December; that while driving the engine he discovered that an
appliance known as the 'pilot plow,' which was attached to the engine,
was out of order, and in a dangerous condition. The purpose of such a
plow is to push the snow from the track; and, if not properly braced, as
stated by one of the witnesses, it is likely to 'rise up, and ride over the
drift, instead of going through it, and the natural result would be to
throw the engine trucks from the tracks.' After Munro discovered that
the plow was defective, he called the attention of the foreman of the
shop and master mechanic to its condition. On or about the 2d of
January, Munro was taken sick, and did not pursue his occupation until
January 9th, when he reported for duty. At about 12 o'clock that night,
while a severe snowstorm was raging, Munro was sent for, by
messenger, to take out a passenger train. The train was delayed in
getting away from Livingston, and left that place about 2 o'clock in the
morning, drawn by engine No. 161, with Munro in charge as engineer.
At a place called Gray Cliff, the engine, in passing through a cut,
capsized, and Munro was killed.
There was no conflict of evidence as to the fact that the plow was
defective some two weeks before the accident, when Munro so stated
to the foreman and master mechanic, but there was a conflict upon the
question whether or not it had been subsequently repaired. Testimony
was adduced by the plaintiff tending to show that the necessary repairs
had not been made, and that at midnight on the 9th, when the engineer
was called upon to take charge of the engine, the con- [154 U.S. 190,
200] dition of the plow was quite as defective as it had been some
two weeks before, when the engineer had made his report of its
condition to the foreman. On the other hand the defendant offered
testimony which tended to show that the repairs had been made. It was
proven that at the time Munro was called upon to take charge of the
engine, on the night of the 9th, the roundhouse was so full of steam
that the engine could not have been critically examined by him. The
presence of this steam was due to the fact that there was no heating
apparatus in the roundhouse, and, therefore, steam was allowed to
escape therein, in order to prevent the engines from freezing. There
was some evidence that the effect of the defective pilot plow would be
to throw the train from the track whenever the engine struck an
accumulation of snow which had been in any way impacted, the
resistance of the snow having the effect of pushing the defective plow
up, and thus derailing the engine. On the other hand, there was other
evidence that such a result could not have followed from the defect in
the plow.
Under this condition of proof it is clear that the instruction was
rightfully refused. The obligation of the employer to furnish to his
employe sound implements is established. Hough v. Railroad Co., 100
U.S. 213 , 218; Railway Co. v. Snyder, 152 U.S. 684 , 14 Sup. Ct. 756.
And the fact that the engineer, when called upon at midnight on the 9th
to perform duty, took the engine out under the conditions surrounding
it in the roundhouse, implies no assumption by him of the risk of
defective machinery. The proof showed, or tended to show, that
notification by the engineer to the foreman and master mechanic of the
existence of the defect was given some 10 or 12 days before the
accident, and that at the time there was an impression created in
Munro's mind that it was to be remedied. It also shows that work of
this character was usually done in the shops at Livingston, over which
the foreman presided, and in which the engine lay when the notice was
given. From the time of the notice up to the time when the engineer
was called upon to use the engine he was not on duty, but was absent
on sick leave. As the employe had [154 U.S. 190, 201] given notice
of the defect to the proper officer whose duty it was to make the
repairs, and the impression had been conveyed to him that these would
be made, he had a right to assume that they had been made, and to act
upon that assumption. The mere fact of his taking the engine out at
midnight, under the circumstances, did not of itself, unsupported by
other proof, imply an assumption by him of the risk resulting from the
dangerous and defective condition of the attachment to the engine.
Hough v. Railroad Co., 100 U.S. 225 .
The first assignment of error is, we think, without merit. The language
of the charge complained of is: 'Did it [the defendant company] fail to
discharge any duty which the law imposed upon it for the safety of its
employe, the plaintiff's intestate? If it did, and if such negligence was
the cause of the death of the engineer, Munro, then the plaintiff is
entitled to recover.' Separated from the context this general language
might have misled, but, when considered in proper connection with the
rest of the instruction given, it could not have done so.
The eighth error assigned was to a refusal of the court to give the
following charge: 'The court instructs the jury that, unless they find
that the defendant carelessly and negligently furnished to the deceased
engineer a plow attached to his engine, the iron bolts and rods of
which were broken, imperfect, and insufficient, and that by reason of
which condition the said plow was loose and insufficiently secured to
the pilot of said engine, and that when the said engine struck the snow
at the cut, as testified to, the pilot plow of said engine, by reason of its
said broken, loose, and imperfect condition, did ride upon the
accumulated snow and ice at said cut, and that thereby the said engine
was thrown from the track, the jury will find for the defendant.' The
charge which the court gave was substantially as requested, and
correctly stated the law. It was as follows: 'The court instructs you that,
unless you find that the defendant negligently and carelessly furnished
to the deceased engineer a plow attached to his engine, the iron bolts
and rods of which were broken, [154 U.S. 190, 202] imperfect, and
insufficient, and by reason of said imperfect condition, when the
engine struck the snow at the cut, as testified to, the engine and tender
were derailed by reason thereof, which caused the accident in question,
6
Conflicts of Law Full text cases (Batch 1)
then the defendant would be entitled to a verdict. The claim is that the
snow had accumulated to such an extent in that cut that when the
engine struck it, the plow being in the condition in which it was, it was
unable to clear the track, the accumulation of snow being so great, and
that, as described by some witnesses, it rode up, and threw the engine
off the track, from the fact that the front trucks of the engine could not
ride over it. I instruct you that, unless the cause of this derailment and
the throwing over of the engine was the imperfect condition of this
plow,- that it could not clear the cut from the snow which had
accumulated there, but the engine was thrown over, and thereby death
ensued,-unless this is found to be true to the satisfaction of the jury, the
defendant would be entitled to a verdict.' We can see no material
variance between the charge requested and the charge which was
given.
The seventh error assigned is to the refusal of the court to instruct the
jury 'that, unless they find that it was customary for defendant
company to send a snow plow in advance of the trains running east
from Livingston during storms of this character, and that unless,
further, the accident occurred by reason of the negligent and careless
failure of the defendant to send such snow plow in advance, they will
find for the defendant.' This instruction was, of course, justly refused,
because it implied that the defendant was entitled to a verdict, unless,
contrary to its custom, it had not sent a snow plow in advance of the
train, without reference to the defective condition of the pilot plow,
which was the cause of action upon which the plaintiff relied. Indeed,
although the complaint charged negligence on the part of the defendant
in failing to send a snow plow ahead of the train, the action, as stated
in the complaint, was predicated upon the defect in the machinery, or
pilot plow; the failure to send the snow plow being alleged as a mere
incident, or remote cause of damage. And this distinction was
elucidated [154 U.S. 190, 203] with great clearness in the charge of
the court. It nowhere indicated that there could be any liability on the
part of the defendant arising from the failure to send a snow plow
ahead of the train, as a distinct and substantive cause of action. It
referred to the failure to send a snow plow ahead of the train merely as
the reason why it was necessary to have the pilot plow attached to the
engine. The court said: 'The charge in this complaint is that this death
was caused by the derailment of the engine, which took place because
the plow was out of repair as described, or, at least, that the defendant
had not used reasonable care in clearing its tracks, and that when the
engineer, with the engine in that condition, arrived at this cut, two
miles from Grey Cliff, the snow had accumulated to such an extent
that the engine was thereby derailed, and that it was this negligence on
the part of the defendant that caused the death.' In other words,
throughout the whole charge, the court instructed the jury that the
liability, if any, must result from the defective condition of the
machinery or pilot plow of the engine; and where it referred to the
failure to send a snow plow ahead of the train as an act of negligence,
treated it as negligence giving rise only remotely, and not proximately,
to the injury; the proximate cause being the defective machinery, and
the remote, the accumulation of snow, which rendered the use of the
engine unsafe because of the defect in the pilot plow attached thereto.
Judgment affirmed.
G.R. No. 92013 July 25, 1990
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust,
RAUL MANGLAPUS, as Secretary of Foreign Affairs, and
CATALINO MACARAIG, as Executive Secretary, respondents.
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner,
vs.
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS
PRIVATIZATION TRUST CHAIRMAN RAMON T. GARCIA,
AMBASSADOR RAMON DEL ROSARIO, et al., as members of
the PRINCIPAL AND BIDDING COMMITTEES ON THE
UTILIZATION/DISPOSITION PETITION OF PHILIPPINE
GOVERNMENT PROPERTIES IN JAPAN, respondents.
Arturo M. Tolentino for petitioner in 92013.
GUTIERREZ, JR., J.:
These are two petitions for prohibition seeking to enjoin respondents,
their representatives and agents from proceeding with the bidding for
the sale of the 3,179 square meters of land at 306 Roppongi, 5-Chome
Minato-ku Tokyo, Japan scheduled on February 21, 1990. We granted
the prayer for a temporary restraining order effective February 20,
1990. One of the petitioners (in G.R. No. 92047) likewise prayes for a
writ of mandamus to compel the respondents to fully disclose to the
public the basis of their decision to push through with the sale of the
Roppongi property inspire of strong public opposition and to explain
the proceedings which effectively prevent the participation of Filipino
citizens and entities in the bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were
heard by the Court on March 13, 1990. After G.R. No. 92047, Ojeda v.
Secretary Macaraig, et al. was filed, the respondents were required to
file a comment by the Court's resolution dated February 22, 1990. The
two petitions were consolidated on March 27, 1990 when the
memoranda of the parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the
respondents filed a motion for an extension of thirty (30) days to file
comment in G.R. No. 92047, followed by a second motion for an
extension of another thirty (30) days which we granted on May 8,
1990, a third motion for extension of time granted on May 24, 1990
and a fourth motion for extension of time which we granted on June 5,
1990 but calling the attention of the respondents to the length of time
the petitions have been pending. After the comment was filed, the
petitioner in G.R. No. 92047 asked for thirty (30) days to file a reply.
We noted his motion and resolved to decide the two (2) cases.
I all throughout the lease period and thereafter. However, the
The subject property in this case is one of the four (4) properties in
Japan acquired by the Philippine government under the Reparations
Agreement entered into with Japan on May 9, 1956, the other lots
being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku,
Tokyo which has an area of approximately 2,489.96 square meters,
and is at present the site of the Philippine Embassy Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an
area of around 764.72 square meters and categorized as a commercial
lot now being used as a warehouse and parking lot for the consulate
staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho,
Shinohara, Nada-ku, Kobe, a residential lot which is now vacant.
The properties and the capital goods and services procured from the
Japanese government for national development projects are part of the
indemnification to the Filipino people for their losses in life and
property and their suffering during World War II.
The Reparations Agreement provides that reparations valued at $550
million would be payable in twenty (20) years in accordance with
annual schedules of procurements to be fixed by the Philippine and
Japanese governments (Article 2, Reparations Agreement). Rep. Act
No. 1789, the Reparations Law, prescribes the national policy on
procurement and utilization of reparations and development loans. The
procurements are divided into those for use by the government
sector and those for private parties in projects as the then National
Economic Council shall determine. Those intended for the private
sector shall be made available by sale to Filipino citizens or to one
hundred (100%) percent Filipino-owned entities in national
development projects.
The Roppongi property was acquired from the Japanese government
under the Second Year Schedule and listed under the heading
"Government Sector", through Reparations Contract No. 300 dated
June 27, 1958. The Roppongi property consists of the land and
building "for the Chancery of the Philippine Embassy" (Annex M-D to
Memorandum for Petitioner, p. 503). As intended, it became the site of
the Philippine Embassy until the latter was transferred to Nampeidai
on July 22, 1976 when the Roppongi building needed major repairs.
Due to the failure of our government to provide necessary funds, the
Roppongi property has remained undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former
Philippine Ambassador to Japan, Carlos J. Valdez, to make the
property the subject of a lease agreement with a Japanese firm -
Kajima Corporation — which shall construct two (2) buildings in
Roppongi and one (1) building in Nampeidai and renovate the present
Philippine Chancery in Nampeidai. The consideration of the
construction would be the lease to the foreign corporation of one (1) of
the buildings to be constructed in Roppongi and the two (2) buildings
in Nampeidai. The other building in Roppongi shall then be used as
the Philippine Embassy Chancery. At the end of the lease period, all
the three leased buildings shall be occupied and used by the Philippine
government. No change of ownership or title shall occur. (See Annex
"B" to Reply to Comment) The Philippine government retains the title
government has not acted favorably on this proposal which is pending
approval and ratification between the parties. Instead, on August 11,
1986, President Aquino created a committee to study the
disposition/utilization of Philippine government properties in Tokyo
and Kobe, Japan through Administrative Order No. 3, followed by
Administrative Orders Numbered 3-A, B, C and D.
7
Conflicts of Law Full text cases (Batch 1)
On July 25, 1987, the President issued Executive Order No. 296
entitling non-Filipino citizens or entities to avail of separations' capital
goods and services in the event of sale, lease or disposition. The four
properties in Japan including the Roppongi were specifically
mentioned in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the
government has been pushing, with great vigor, its decision to sell the
reparations properties starting with the Roppongi lot. The property has
twice been set for bidding at a minimum floor price of $225 million.
The first bidding was a failure since only one bidder qualified. The
second one, after postponements, has not yet materialized. The last
scheduled bidding on February 21, 1990 was restrained by his Court.
Later, the rules on bidding were changed such that the $225 million
floor price became merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct issues.
The petitioner in G.R. No. 92013 objects to the alienation of the
Roppongi property to anyone while the petitioner in G.R. No. 92047
adds as a principal objection the alleged unjustified bias of the
Philippine government in favor of selling the property to non-Filipino
citizens and entities. These petitions have been consolidated and are
resolved at the same time for the objective is the same - to stop the sale
of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated by
the Philippine Government?; and
(2) Does the Chief Executive, her officers and agents, have the
authority and jurisdiction, to sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning
the authority of the government to alienate the Roppongi property
assails the constitutionality of Executive Order No. 296 in making the
property available for sale to non-Filipino citizens and entities. He also
questions the bidding procedures of the Committee on the Utilization
or Disposition of Philippine Government Properties in Japan for being
discriminatory against Filipino citizens and Filipino-owned entities by
denying them the right to be informed about the bidding requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property
and the related lots were acquired as part of the reparations from the
Japanese government for diplomatic and consular use by the
Philippine government. Vice-President Laurel states that the Roppongi
property is classified as one of public dominion, and not of private
ownership under Article 420 of the Civil Code (See infra).
The petitioner submits that the Roppongi property comes under
"property intended for public service" in paragraph 2 of the above
provision. He states that being one of public dominion, no ownership
by any one can attach to it, not even by the State. The Roppongi and
related properties were acquired for "sites for chancery, diplomatic,
and consular quarters, buildings and other improvements" (Second
Year Reparations Schedule). The petitioner states that they continue to
be intended for a necessary service. They are held by the State in
anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it
cannot be appropriated, is outside the commerce of man, or to put it in
more simple terms, it cannot be alienated nor be the subject matter of
contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]).
Noting the non-use of the Roppongi property at the moment, the
petitioner avers that the same remains property of public dominion so
long as the government has not used it for other purposes nor adopted
any measure constituting a removal of its original purpose or use.
The respondents, for their part, refute the petitioner's contention by
saying that the subject property is not governed by our Civil Code but
by the laws of Japan where the property is located. They rely upon the
rule of lex situs which is used in determining the applicable law
regarding the acquisition, transfer and devolution of the title to a
property. They also invoke Opinion No. 21, Series of 1988, dated
January 27, 1988 of the Secretary of Justice which used the lex situs in
explaining the inapplicability of Philippine law regarding a property
situated in Japan.
The respondents add that even assuming for the sake of argument that
the Civil Code is applicable, the Roppongi property has ceased to
become property of public dominion. It has become patrimonial
property because it has not been used for public service or for
diplomatic purposes for over thirteen (13) years now (Citing Article
422, Civil Code) and because the intention by the Executive
Department and the Congress to convert it to private use has been
manifested by overt acts, such as, among others: (1) the transfer of the
Philippine Embassy to Nampeidai (2) the issuance of administrative
orders for the possibility of alienating the four government properties
in Japan; (3) the issuance of Executive Order No. 296; (4) the
enactment by the Congress of Rep. Act No. 6657 [the Comprehensive
Agrarian Reform Law] on June 10, 1988 which contains a provision
stating that funds may be taken from the sale of Philippine properties
in foreign countries; (5) the holding of the public bidding of the
Roppongi property but which failed; (6) the deferment by the Senate in
Resolution No. 55 of the bidding to a future date; thus an
acknowledgment by the Senate of the government's intention to
remove the Roppongi property from the public service purpose; and
(7) the resolution of this Court dismissing the petition in Ojeda v.
Bidding Committee, et al., G.R. No. 87478 which sought to enjoin the
second bidding of the Roppongi property scheduled on March 30,
1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule
on the constitutionality of Executive Order No. 296. He had earlier
filed a petition in G.R. No. 87478 which the Court dismissed on
August 1, 1989. He now avers that the executive order contravenes the
constitutional mandate to conserve and develop the national patrimony
stated in the Preamble of the 1987 Constitution. It also allegedly
violates:
(1) The reservation of the ownership and acquisition of alienable lands
of the public domain to Filipino citizens. (Sections 2 and 3, Article
XII, Constitution; Sections 22 and 23 of Commonwealth Act
141).i•t•c-aüsl
(2) The preference for Filipino citizens in the grant of rights, privileges
and concessions covering the national economy and patrimony
(Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair
competition and trade practices;
(4) The guarantee of the right of the people to information on all
matters of public concern (Section 7, Article III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or entities
not wholly owned by Filipino citizens of capital goods received by the
Philippines under the Reparations Act (Sections 2 and 12 of Rep. Act
No. 1789); and
(6) The declaration of the state policy of full public disclosure of all
transactions involving public interest (Section 28, Article III,
Constitution).
Petitioner Ojeda warns that the use of public funds in the execution of
an unconstitutional executive order is a misapplication of public funds
He states that since the details of the bidding for the Roppongi
property were never publicly disclosed until February 15, 1990 (or a
few days before the scheduled bidding), the bidding guidelines are
available only in Tokyo, and the accomplishment of requirements and
the selection of qualified bidders should be done in Tokyo, interested
Filipino citizens or entities owned by them did not have the chance to
comply with Purchase Offer Requirements on the Roppongi. Worse,
the Roppongi shall be sold for a minimum price of $225 million from
which price capital gains tax under Japanese law of about 50 to 70% of
the floor price would still be deducted.
IV
The petitioners and respondents in both cases do not dispute the fact
that the Roppongi site and the three related properties were through
reparations agreements, that these were assigned to the government
sector and that the Roppongi property itself was specifically
designated under the Reparations Agreement to house the Philippine
Embassy.
The nature of the Roppongi lot as property for public service is
expressly spelled out. It is dictated by the terms of the Reparations
Agreement and the corresponding contract of procurement which bind
both the Philippine government and the Japanese government.
There can be no doubt that it is of public dominion unless it is
convincingly shown that the property has become patrimonial. This,
the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the
commerce of man. It cannot be alienated. Its ownership is a special
collective ownership for general use and enjoyment, an application to
the satisfaction of collective needs, and resides in the social group. The
purpose is not to serve the State as a juridical person, but the citizens;
it is intended for the common and public welfare and cannot be the
object of appropration. (Taken from 3 Manresa, 66-69; cited in
Tolentino, Commentaries on the Civil Code of the Philippines, 1963
Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion or of private
ownership.
ART. 420. The following things are property of public dominion
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks shores
roadsteads, and others of similar character;
8
Conflicts of Law Full text cases (Batch 1)
(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the
national wealth.
ART. 421. All other property of the State, which is not of the character
stated in the preceding article, is patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of
Article 420 of the Civil Code as property belonging to the State and
intended for some public service.
Has the intention of the government regarding the use of the property
been changed because the lot has been Idle for some years? Has it
become patrimonial?
The fact that the Roppongi site has not been used for a long time for
actual Embassy service does not automatically convert it to
patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene
Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part
of the public domain, not available for private appropriation or
ownership until there is a formal declaration on the part of the
government to withdraw it from being such (Ignacio v. Director of
Lands, 108 Phil. 335 [1960]).
The respondents enumerate various pronouncements by concerned
public officials insinuating a change of intention. We emphasize,
however, that an abandonment of the intention to use the Roppongi
property for public service and to make it patrimonial property under
Article 422 of the Civil Code must be definiteAbandonment cannot be
inferred from the non-use alone specially if the non-use was
attributable not to the government's own deliberate and indubitable
will but to a lack of financial support to repair and improve the
property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368
[1988]). Abandonment must be a certain and positive act based on
correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not
relinquishment of the Roppongi property's original purpose. Even the
failure by the government to repair the building in Roppongi is not
abandonment since as earlier stated, there simply was a shortage of
government funds. The recent Administrative Orders authorizing a
study of the status and conditions of government properties in Japan
were merely directives for investigation but did not in any way signify
a clear intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority to
sell", does not have a provision in its text expressly authorizing the
sale of the four properties procured from Japan for the government
sector. The executive order does not declare that the properties lost
their public character. It merely intends to make the
properties available to foreigners and not to Filipinos alone in case of
a sale, lease or other disposition. It merely eliminates the restriction
under Rep. Act No. 1789 that reparations goods may be sold only to
Filipino citizens and one hundred (100%) percent Filipino-owned
entities. The text of Executive Order No. 296 provides:
Section 1. The provisions of Republic Act No. 1789, as amended, and
of other laws to the contrary notwithstanding, the above-mentioned
properties can be made available for sale, lease or any other manner of
disposition to non-Filipino citizens or to entities owned by non-
Filipino citizens.
Executive Order No. 296 is based on the wrong premise or assumption
that the Roppongi and the three other properties were earlier converted
into alienable real properties. As earlier stated, Rep. Act No. 1789
differentiates the procurements for the government sector and the
private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private
sector properties can be sold to end-users who must be Filipinos or
entities owned by Filipinos. It is this nationality provision which was
amended by Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides
as one of the sources of funds for its implementation, the proceeds of
the disposition of the properties of the Government in foreign
countries, did not withdraw the Roppongi property from being
classified as one of public dominion when it mentions Philippine
properties abroad. Section 63 (c) refers to properties which are
alienable and not to those reserved for public use or service. Rep Act
No. 6657, therefore, does not authorize the Executive Department to
sell the Roppongi property. It merely enumerates possible sources of
future funding to augment (as and when needed) the Agrarian Reform
Fund created under Executive Order No. 299. Obviously any property
outside of the commerce of man cannot be tapped as a source of funds.
The respondents try to get around the public dominion character of the
Roppongi property by insisting that Japanese law and not our Civil
Code should apply.
It is exceedingly strange why our top government officials, of all
people, should be the ones to insist that in the sale of extremely
valuable government property, Japanese law and not Philippine law
should prevail. The Japanese law - its coverage and effects, when
enacted, and exceptions to its provision — is not presented to the
Court It is simply asserted that the lex loci rei sitae or Japanese law
should apply without stating what that law provides. It is a ed on faith
that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no
conflict of law situation exists. A conflict of law situation arises only
when: (1) There is a dispute over the title or ownership of an
immovable, such that the capacity to take and transfer immovables, the
formalities of conveyance, the essential validity and effect of the
transfer, or the interpretation and effect of a conveyance, are to be
determined (See Salonga, Private International Law, 1981 ed., pp.
377-383); and (2) A foreign law on land ownership and its conveyance
is asserted to conflict with a domestic law on the same matters. Hence,
the need to determine which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title. There
is no question that the property belongs to the Philippines. The issue is
the authority of the respondent officials to validly dispose of property
belonging to the State. And the validity of the procedures adopted to
effect its sale. This is governed by Philippine Law. The rule of lex
situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on
the relevance of the lex situs rule is misplaced. The opinion does not
tackle the alienability of the real properties procured through
reparations nor the existence in what body of the authority to sell
them. In discussing who are capable of acquiring the lots, the
Secretary merely explains that it is the foreign law which should
determine who can acquire the properties so that the constitutional
limitation on acquisition of lands of the public domain to Filipino
citizens and entities wholly owned by Filipinos is inapplicable. We see
no point in belaboring whether or not this opinion is correct. Why
should we discuss who can acquire the Roppongi lot when there is no
showing that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of
the recommendation by the investigating committee to sell the
Roppongi property was premature or, at the very least, conditioned on
a valid change in the public character of the Roppongi property.
Moreover, the approval does not have the force and effect of law since
the President already lost her legislative powers. The Congress had
already convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi
property is no longer of public dominion, there is another obstacle to
its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides
Section 79 (f ) Conveyances and contracts to which the Government is
a party. — In cases in which the Government of the Republic of the
Philippines is a party to any deed or other instrument conveying the
title to real estate or to any other property the value of which is in
excess of one hundred thousand pesos, the respective Department
Secretary shall prepare the necessary papers which, together with the
proper recommendations, shall be submitted to the Congress of the
Philippines for approval by the same. Such deed, instrument, or
contract shall be executed and signed by the President of the
Philippines on behalf of the Government of the Philippines unless the
Government of the Philippines unless the authority therefor be
expressly vested by law in another officer. (Emphasis supplied)
The requirement has been retained in Section 48, Book I of the
Administrative Code of 1987 (Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real Property. — Whenever
real property of the Government is authorized by law to be
conveyed, the deed of conveyance shall be executed in behalf of the
government by the following:
(1) For property belonging to and titled in the name of the Republic of
the Philippines, by the President, unless the authority therefor is
expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled
in the name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
It is not for the President to convey valuable real property of the
government on his or her own sole will. Any such conveyance must be
authorized and approved by a law enacted by the Congress. It requires
executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for the
deferment of the sale of the Roppongi property does not withdraw the
property from public domain much less authorize its sale. It is a mere
resolution; it is not a formal declaration abandoning the public
character of the Roppongi property. In fact, the Senate Committee on
Foreign Relations is conducting hearings on Senate Resolution No.
9
Conflicts of Law Full text cases (Batch 1)
734 which raises serious policy considerations and calls for a fact-
finding investigation of the circumstances behind the decision to sell
the Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al.,
supra, did not pass upon the constitutionality of Executive Order No.
296. Contrary to respondents' assertion, we did not uphold the
authority of the President to sell the Roppongi property. The Court
stated that the constitutionality of the executive order was not the real
issue and that resolving the constitutional question was "neither
necessary nor finally determinative of the case." The Court noted that
"[W]hat petitioner ultimately questions is the use of the proceeds of
the disposition of the Roppongi property." In emphasizing that "the
decision of the Executive to dispose of the Roppongi property to
finance the CARP ... cannot be questioned" in view of Section 63 (c)
of Rep. Act No. 6657, the Court did not acknowledge the fact that the
property became alienable nor did it indicate that the President was
authorized to dispose of the Roppongi property. The resolution should
be read to mean that in case the Roppongi property is re-classified to
be patrimonial and alienable by authority of law, the proceeds of a sale
may be used for national economic development projects including the
CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us
question the proposed 1990 sale of the Roppongi property. We are
resolving the issues raised in these petitions, not the issues raised in
1989.
Having declared a need for a law or formal declaration to withdraw the
Roppongi property from public domain to make it alienable and a need
for legislative authority to allow the sale of the property, we see no
compelling reason to tackle the constitutional issues raised by
petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions
unless these questions are properly raised in appropriate cases and
their resolution is necessary for the determination of the case (People
v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a
constitutional question although properly presented by the record if the
case can be disposed of on some other ground such as the application
of a statute or general law (Siler v. Louisville and Nashville R. Co.,
213 U.S. 175, [1909], Railroad Commission v. Pullman Co., 312 U.S.
496 [1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property
should not be sold:
The Roppongi property is not just like any piece of property. It was
given to the Filipino people in reparation for the lives and blood of
Filipinos who died and suffered during the Japanese military
occupation, for the suffering of widows and orphans who lost their
loved ones and kindred, for the homes and other properties lost by
countless Filipinos during the war. The Tokyo properties are a
monument to the bravery and sacrifice of the Filipino people in the
face of an invader; like the monuments of Rizal, Quezon, and other
Filipino heroes, we do not expect economic or financial benefits from
them. But who would think of selling these monuments? Filipino
honor and national dignity dictate that we keep our properties in Japan
as memorials to the countless Filipinos who died and suffered. Even if
we should become paupers we should not think of selling them. For it
would be as if we sold the lives and blood and tears of our
countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese
government in atonement for its past belligerence for the valiant
sacrifice of life and limb and for deaths, physical dislocation and
economic devastation the whole Filipino people endured in World War
II.
It is for what it stands for, and for what it could never bring back to
life, that its significance today remains undimmed, inspire of the lapse
of 45 years since the war ended, inspire of the passage of 32 years
since the property passed on to the Philippine government.
Roppongi is a reminder that cannot — should not — be dissipated ...
(Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so much
because of the inflated prices fetched by real property in Tokyo but
more so because of its symbolic value to all Filipinos — veterans and
civilians alike. Whether or not the Roppongi and related properties
will eventually be sold is a policy determination where both the
President and Congress must concur. Considering the properties'
importance and value, the laws on conversion and disposition of
property of public dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are
GRANTED. A writ of prohibition is issued enjoining the respondents
from proceeding with the sale of the Roppongi property in Tokyo,
Japan. The February 20, 1990 Temporary Restraining Order is made
PERMANENT.
SO ORDERED.
G.R. No. 72494 August 11, 1989
HONGKONG AND SHANGHAI BANKING
CORPORATION, petitioner,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE
INTERMEDIATE APPELLATE COURT, respondents.
Quiason, Makalintal, Barot & Torres for petitioner.
Alejandro, Aranzaso & Associates for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the
Intermediate Appellate Court (now Court of Appeals) dated August 2,
1985, which reversed the order of the Regional Trial Court dated
February 28,1985 denying the Motion to Dismiss filed by private
respondents Jack Robert Sherman and Deodato Reloj.
A complaint for collection of a sum of money (pp. 49-52, Rollo) was
filed by petitioner Hongkong and Shanghai Banking Corporation
(hereinafter referred to as petitioner BANK) against private
respondents Jack Robert Sherman and Deodato Reloj, docketed as
Civil Case No. Q-42850 before the Regional Trial Court of Quezon
City, Branch 84.
It appears that sometime in 1981, Eastern Book Supply Service PTE,
Ltd. (hereinafter referred to as COMPANY), a company incorporated
in Singapore applied with, and was granted by, the Singapore branch
of petitioner BANK an overdraft facility in the maximum amount of
Singapore dollars 200,000.00 (which amount was subsequently
increased to Singapore dollars 375,000.00) with interest at 3% over
petitioner BANK prime rate, payable monthly, on amounts due under
said overdraft facility; as a security for the repayment by the
COMPANY of sums advanced by petitioner BANK to it through the
aforesaid overdraft facility, on October 7, 1982, both private
respondents and a certain Robin de Clive Lowe, all of whom were
directors of the COMPANY at such time, executed a Joint and Several
Guarantee (p. 53, Rollo) in favor of petitioner BANK whereby private
respondents and Lowe agreed to pay, jointly and severally, on demand
all sums owed by the COMPANY to petitioner BANK under the
aforestated overdraft facility.
The Joint and Several Guarantee provides, inter alia, that:
This guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of Singapore. We
hereby agree that the Courts of Singapore shall have jurisdiction over
all disputes arising under this guarantee. ... (p. 33-A, Rollo).
The COMPANY failed to pay its obligation. Thus, petitioner BANK
demanded payment of the obligation from private respondents,
conformably with the provisions of the Joint and Several Guarantee.
Inasmuch as the private respondents still failed to pay, petitioner
BANK filed the above-mentioned complaint.
On December 14,1984, private respondents filed a motion to dismiss
(pp 54-56, Rollo) which was opposed by petitioner BANK (pp. 58-
62, Rollo). Acting on the motion, the trial court issued an order dated
February 28, 1985 (pp, 64-65, Rollo), which read as follows:
In a Motion to Dismiss filed on December 14, 1984, the defendants
seek the dismissal of the complaint on two grounds, namely:
1. That the court has no jurisdiction over the subject matter of the
complaint; and
2. That the court has no jurisdiction over the persons of the defendants.
In the light of the Opposition thereto filed by plaintiff, the Court finds
no merit in the motion. "On the first ground, defendants claim that by
virtue of the provision in the Guarantee (the actionable document)
which reads —
This guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of Singapore. We
hereby agree that the courts in Singapore shall have jurisdiction over
all disputes arising under this guarantee,
the Court has no jurisdiction over the subject matter of the case. The
Court finds and concludes otherwise. There is nothing in the
Guarantee which says that the courts of Singapore shall have
jurisdiction to the exclusion of the courts of other countries or nations.
Also, it has long been established in law and jurisprudence that
jurisdiction of courts is fixed by law; it cannot be conferred by the
will, submission or consent of the parties.
10
Conflicts of Law Full text cases (Batch 1)
On the second ground, it is asserted that defendant Robert' , Sherman
is not a citizen nor a resident of the Philippines. This argument holds
no water. Jurisdiction over the persons of defendants is acquired by
service of summons and copy of the complaint on them. There has
been a valid service of summons on both defendants and in fact the
same is admitted when said defendants filed a 'Motion for Extension of
Time to File Responsive Pleading on December 5, 1984.
WHEREFORE, the Motion to Dismiss is hereby DENIED.
SO ORDERED.
A motion for reconsideration of the said order was filed by private
respondents which was, however, denied (p. 66,Rollo).
Private respondents then filed before the respondent Intermediate
Appellate Court (now Court of Appeals) a petition for prohibition with
preliminary injunction and/or prayer for a restraining order (pp. 39-
48, Rollo). On August 2, 1985, the respondent Court rendered a
decision (p. 37, Rollo), the dispositive portion of which reads:
WHEREFORE, the petition for prohibition with preliminary injuction
is hereby GRANTED. The respondent Court is enjoined from taking
further cognizance of the case and to dismiss the same for filing with
the proper court of Singapore which is the proper forum. No costs.
SO ORDERED.
The motion for reconsideration was denied (p. 38, Rollo), hence, the
present petition.
The main issue is whether or not Philippine courts have jurisdiction
over the suit.
The controversy stems from the interpretation of a provision in the
Joint and Several Guarantee, to wit:
(14) This guarantee and all rights, obligations and liabilites arising
hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of Singapore. We
hereby agree that the Courts in Singapore shall have jurisdiction over
all disputes arising under this guarantee. ... (p. 53-A, Rollo)
In rendering the decision in favor of private respondents, the Court of
Appeals made, the following observations (pp. 35-36, Rollo):
There are significant aspects of the case to which our attention is
invited. The loan was obtained by Eastern Book Service PTE, Ltd., a
company incorporated in Singapore. The loan was granted by
the Singapore Branch of Hongkong and Shanghai Banking
Corporation. The Joint and Several Guarantee was also concluded
in Singapore. The loan was in Singaporean dollars and the repayment
thereof also in the same currency. The transaction, to say the least,
took place in Singporean setting in which the law of that country is the
measure by which that relationship of the parties will be governed.
xxx xxx xxx
Contrary to the position taken by respondents, the guarantee agreement
compliance that any litigation will be before the courts of Singapore
and that the rights and obligations of the parties shall be construed and
determined in accordance with the laws of the Republic of Singapore.
A closer examination of paragraph 14 of the Guarantee Agreement
upon which the motion to dismiss is based, employs in clear and
unmistakeable (sic) terms the word 'shall' which under statutory
construction is mandatory.
Thus it was ruled that:
... the word 'shall' is imperative, operating to impose a duty which may
be enforced (Dizon vs. Encarnacion, 9 SCRA 714).lâwphî1.ñèt
There is nothing more imperative and restrictive than what the
agreement categorically commands that 'all rights, obligations, and
liabilities arising hereunder shall be construed and determined under
and may be enforced in accordance with the laws of the Republic of
Singapore.'
While it is true that "the transaction took place in Singaporean setting"
and that the Joint and Several Guarantee contains a choice-of-forum
clause, the very essence of due process dictates that the stipulation that
"[t]his guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of Singapore. We
hereby agree that the Courts in Singapore shall have jurisdiction over
all disputes arising under this guarantee" be liberally construed. One
basic principle underlies all rules of jurisdiction in International Law: a
State does not have jurisdiction in the absence of some reasonable
basis for exercising it, whether the proceedings are in rem quasi in
rem or in personam. To be reasonable, the jurisdiction must be based
on some minimum contacts that will not offend traditional notions of
fair play and substantial justice (J. Salonga, Private International Law,
1981, p. 46). Indeed, as pointed-out by petitioner BANK at the outset,
the instant case presents a very odd situation. In the ordinary habits of
life, anyone would be disinclined to litigate before a foreign tribunal,
with more reason as a defendant. However, in this case, private
respondents are Philippine residents (a fact which was not disputed by
them) who would rather face a complaint against them before a foreign
court and in the process incur considerable expenses, not to mention
inconvenience, than to have a Philippine court try and resolve the case.
Private respondents' stance is hardly comprehensible, unless their
ultimate intent is to evade, or at least delay, the payment of a just
obligation.
The defense of private respondents that the complaint should have
been filed in Singapore is based merely on technicality. They did not
even claim, much less prove, that the filing of the action here will
cause them any unnecessary trouble, damage, or expense. On the other
hand, there is no showing that petitioner BANK filed the action here
just to harass private respondents.
In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033,
October 31, 1969, 30 SCRA 187, it was ruled:
... An accurate reading, however, of the stipulation, 'The parties agree
to sue and be sued in the Courts of Manila,' does not preclude the
filing of suits in the residence of plaintiff or defendant. The plain
meaning is that the parties merely consented to be sued in Manila.
Qualifying or restrictive words which would indicate that Manila and
Manila alone is the venue are totally absent therefrom. We cannot read
into that clause that plaintiff and defendant bound themselves to file
suits with respect to the last two transactions in question only or
exclusively in Manila. For, that agreement did not change or transfer
venue. It simply is permissive. The parties solely agreed to add the
courts of Manila as tribunals to which they may resort. They did not
waive their right to pursue remedy in the courts specifically mentioned
in Section 2(b) of Rule 4. Renuntiatio non praesumitur.
This ruling was reiterated in the case of Neville Y. Lamis Ents., et al. v.
Lagamon, etc., et al., G.R. No. 57250, October 30, 1981, 108 SCRA
740, where the stipulation was "[i]n case of litigation, jurisdiction shall
be vested in the Court of Davao City." We held:
Anent the claim that Davao City had been stipulated as the venue,
suffice it to say that a stipulation as to venue does not preclude the
filing of suits in the residence of plaintiff or defendant under Section 2
(b), Rule 4, Rules of Court, in the absence of qualifying or restrictive
words in the agreement which would indicate that the place named is
the only venue agreed upon by the parties.
Applying the foregoing to the case at bar, the parties did not thereby
stipulate that only the courts of Singapore, to the exclusion of all the
rest, has jurisdiction. Neither did the clause in question operate to
divest Philippine courts of jurisdiction. In International Law,
jurisdiction is often defined as the light of a State to exercise authority
over persons and things within its boundaries subject to certain
exceptions. Thus, a State does not assume jurisdiction over travelling
sovereigns, ambassadors and diplomatic representatives of other
States, and foreign military units stationed in or marching through
State territory with the permission of the latter's authorities. This
authority, which finds its source in the concept of sovereignty, is
exclusive within and throughout the domain of the State. A State is
competent to take hold of any judicial matter it sees fit by making its
courts and agencies assume jurisdiction over all kinds of cases brought
before them (J. Salonga, Private International Law, 1981, pp. 37-
38).lâwphî1.ñèt
As regards the issue on improper venue, petitioner BANK avers that
the objection to improper venue has been waived. However, We agree
with the ruling of the respondent Court that:
While in the main, the motion to dismiss fails to categorically use with
exactitude the words 'improper venue' it can be perceived from the
general thrust and context of the motion that what is meant is improper
venue, The use of the word 'jurisdiction' was merely an attempt to
copy-cat the same word employed in the guarantee agreement but
conveys the concept of venue. Brushing aside all technicalities, it
would appear that jurisdiction was used loosely as to be synonymous
with venue. It is in this spirit that this Court must view the motion to
dismiss. ... (p. 35, Rollo).
At any rate, this issue is now of no moment because We hold that
venue here was properly laid for the same reasons discussed above.
The respondent Court likewise ruled that (pp. 36-37, Rollo):
... In a conflict problem, a court will simply refuse to entertain the case
if it is not authorized by law to exercise jurisdiction. And even if it is
so authorized, it may still refuse to entertain the case by applying the
principle of forum non conveniens. ...
However, whether a suit should be entertained or dismissed on the
basis of the principle of forum non conveniensdepends largely upon
the facts of the particular case and is addressed to the sound discretion
of the trial court (J. Salonga, Private International Law, 1981, p.
49).lâwphî1.ñèt Thus, the respondent Court should not have relied on
such principle.
11
Conflicts of Law Full text cases (Batch 1)
Although the Joint and Several Guarantee prepared by petitioner
BANK is a contract of adhesion and that consequently, it cannot be
permitted to take a stand contrary to the stipulations of the contract,
substantial bases exist for petitioner Bank's choice of forum, as
discussed earlier.
Lastly, private respondents allege that neither the petitioner based at
Hongkong nor its Philippine branch is involved in the transaction sued
upon. This is a vain attempt on their part to further thwart the
proceedings below inasmuch as well-known is the rule that a
defendant cannot plead any defense that has not been interposed in the
court below.
ACCORDINGLY, the decision of the respondent Court is hereby
REVERSED and the decision of the Regional Trial Court is
REINSTATED, with costs against private respondents. This decision is
immediately executory.
SO ORDERED.
G.R. No. 128845 June 1, 2000
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS
(ISAE), petitioner,
vs.
HON. LEONARDO A. QUISUMBING in his capacity as the
Secretary of Labor and Employment; HON. CRESENCIANO B.
TRAJANO in his capacity as the Acting Secretary of Labor and
Employment; DR. BRIAN MACCAULEY in his capacity as the
Superintendent of International School-Manila; and
INTERNATIONAL SCHOOL, INC., respondents.
KAPUNAN, J.:
Receiving salaries less than their counterparts hired abroad, the local-
hires of private respondent School, mostly Filipinos, cry
discrimination. We agree. That the local-hires are paid more than their
colleagues in other schools is, of course, beside the point. The point is
that employees should be given equal pay for work of equal value.
That is a principle long honored in this jurisdiction. That is a principle
that rests on fundamental notions of justice. That is the principle we
uphold today.1âwphi1.nêt
Private respondent International School, Inc. (the School, for short),
pursuant to Presidential Decree 732, is a domestic educational
institution established primarily for dependents of foreign diplomatic
personnel and other temporary residents. 1 To enable the School to
continue carrying out its educational program and improve its standard
of instruction, Section 2(c) of the same decree authorizes the School to
employ its own teaching and management personnel selected by it
either locally or abroad, from Philippine or other nationalities, such
personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have been or
will be enacted for the protection of employees.
Accordingly, the School hires both foreign and local teachers as
members of its faculty, classifying the same into two: (1) foreign-hires
and (2) local-hires. The School employs four tests to determine
whether a faculty member should be classified as a foreign-hire or a
local hire:
a. What is one's domicile?
b. Where is one's home economy?
c. To which country does one owe economic allegiance?
d. Was the individual hired abroad specifically to work in the School
and was the School responsible for bringing that individual to the
Philippines?2
Should the answer to any of these queries point to the Philippines, the
faculty member is classified as a local hire; otherwise, he or she is
deemed a foreign-hire.
The School grants foreign-hires certain benefits not accorded local-
hires.1avvphi1 These include housing, transportation, shipping costs,
taxes, and home leave travel allowance. Foreign-hires are also paid a
salary rate twenty-five percent (25%) more than local-hires. The
School justifies the difference on two "significant economic
disadvantages" foreign-hires have to endure, namely: (a) the
"dislocation factor" and (b) limited tenure. The School explains:
A foreign-hire would necessarily have to uproot himself from his home
country, leave his family and friends, and take the risk of deviating
from a promising career path — all for the purpose of pursuing his
profession as an educator, but this time in a foreign land. The new
foreign hire is faced with economic realities: decent abode for oneself
and/or for one's family, effective means of transportation, allowance
for the education of one's children, adequate insurance against illness
and death, and of course the primary benefit of a basic
salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with
the same economic reality after his term: that he will eventually and
inevitably return to his home country where he will have to confront
the uncertainty of obtaining suitable employment after along period in
a foreign land.
The compensation scheme is simply the School's adaptive measure to
remain competitive on an international level in terms of attracting
competent professionals in the field of international education. 3
When negotiations for a new collective bargaining agreement were
held on June 1995, petitioner International School Alliance of
Educators, "a legitimate labor union and the collective bargaining
representative of all faculty members"4 of the School, contested the
difference in salary rates between foreign and local-hires. This issue,
as well as the question of whether foreign-hires should be included in
the appropriate bargaining unit, eventually caused a deadlock between
the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of
the National Conciliation and Mediation Board to bring the parties to a
compromise prompted the Department of Labor and Employment
(DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the
DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order
resolving the parity and representation issues in favor of the School.
Then DOLE Secretary Leonardo A. Quisumbing subsequently denied
petitioner's motion for reconsideration in an Order dated March 19,
1997. Petitioner now seeks relief in this Court.
Petitioner claims that the point-of-hire classification employed by the
School is discriminatory to Filipinos and that the grant of higher
salaries to foreign-hires constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty
members, numbering 38 in all, with nationalities other than Filipino,
who have been hired locally and classified as local hires. 5 The Acting
Secretary of Labor found that these non-Filipino local-hires received
the same benefits as the Filipino local-hires.
The compensation package given to local-hires has been shown to
apply to all, regardless of race. Truth to tell, there are foreigners who
have been hired locally and who are paid equally as Filipino local
hires.6
The Acting secretary upheld the point-of-hire classification for the
distinction in salary rates:
The Principle "equal pay for equal work" does not find applications in
the present case. The international character of the School requires the
12
Conflicts of Law Full text cases (Batch 1)
hiring of foreign personnel to deal with different nationalities and
different cultures, among the student population.
We also take cognizance of the existence of a system of salaries and
benefits accorded to foreign hired personnel which system is
universally recognized. We agree that certain amenities have to be
provided to these people in order to entice them to render their services
in the Philippines and in the process remain competitive in the
international market.
Furthermore, we took note of the fact that foreign hires have limited
contract of employment unlike the local hires who enjoy security of
tenure. To apply parity therefore, in wages and other benefits would
also require parity in other terms and conditions of employment which
include the employment which include the employment contract.
A perusal of the parties' 1992-1995 CBA points us to the conditions
and provisions for salary and professional compensation wherein the
parties agree as follows:
All members of the bargaining unit shall be compensated only in
accordance with Appendix C hereof provided that the Superintendent
of the School has the discretion to recruit and hire expatriate teachers
from abroad, under terms and conditions that are consistent with
accepted international practice.
Appendix C of said CBA further provides:
The new salary schedule is deemed at equity with the Overseas
Recruited Staff (OSRS) salary schedule. The 25% differential is
reflective of the agreed value of system displacement and contracted
status of the OSRS as differentiated from the tenured status of Locally
Recruited Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition of
the difference in the status of two types of employees, hence, the
difference in their salaries.
The Union cannot also invoke the equal protection clause to justify its
claim of parity. It is an established principle of constitutional law that
the guarantee of equal protection of the laws is not violated by
legislation or private covenants based on reasonable classification. A
classification is reasonable if it is based on substantial distinctions and
apply to all members of the same class. Verily, there is a substantial
distinction between foreign hires and local hires, the former enjoying
only a limited tenure, having no amenities of their own in the
Philippines and have to be given a good compensation package in
order to attract them to join the teaching faculty of the School.7
We cannot agree.
That public policy abhors inequality and discrimination is beyond
contention. Our Constitution and laws reflect the policy against these
evils. The Constitution8 in the Article on Social Justice and Human
Rights exhorts Congress to "give highest priority to the enactment of
measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities." The very
broad Article 19 of the Civil Code requires every person, "in the
exercise of his rights and in the performance of his duties, [to] act with
justice, give everyone his due, and observe honesty and good faith.
International law, which springs from general principles of
law,9 likewise proscribes discrimination. General principles of law
include principles of equity, 10 i.e., the general principles of fairness
and justice, based on the test of what is reasonable. 11 The Universal
Declaration of Human Rights, 12 the International Covenant on
Economic, Social, and Cultural Rights, 13 the International Convention
on the Elimination of All Forms of Racial Discrimination, 14 the
Convention against Discrimination in Education, 15 the Convention
(No. 111) Concerning Discrimination in Respect of Employment and
Occupation 16 — all embody the general principle against
discrimination, the very antithesis of fairness and justice. The
Philippines, through its Constitution, has incorporated this principle as
part of its national laws.
In the workplace, where the relations between capital and labor are
often skewed in favor of capital, inequality and discrimination by the
employer are all the more reprehensible.
The Constitution 17 specifically provides that labor is entitled to
"humane conditions of work." These conditions are not restricted to
the physical workplace — the factory, the office or the field — but
include as well the manner by which employers treat their employees.
The Constitution 18 also directs the State to promote "equality of
employment opportunities for all." Similarly, the Labor
Code 19 provides that the State shall "ensure equal work opportunities
regardless of sex, race or creed." It would be an affront to both the
spirit and letter of these provisions if the State, in spite of its
primordial obligation to promote and ensure equal employment
opportunities, closes its eyes to unequal and discriminatory terms and
conditions of employment. 20
Discrimination, particularly in terms of wages, is frowned upon by the
Labor Code. Article 135, for example, prohibits and penalizes 21 the
payment of lesser compensation to a female employee as against a
male employee for work of equal value. Article 248 declares it an
unfair labor practice for an employer to discriminate in regard to
wages in order to encourage or discourage membership in any labor
organization.
Notably, the International Covenant on Economic, Social, and Cultural
Rights, supra, in Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of
everyone to the enjoyment of just and favourable conditions of work,
which ensure, in particular:
a. Remuneration which provides all workers, as a minimum, with:
(i) Fair wages and equal remuneration for work of equal value without
distinction of any kind, in particular women being guaranteed
conditions of work not inferior to those enjoyed by men, with equal
pay for equal work;
xxx xxx xxx
The foregoing provisions impregnably institutionalize in this
jurisdiction the long honored legal truism of "equal pay for equal
work." Persons who work with substantially equal qualifications, skill,
effort and responsibility, under similar conditions, should be paid
similar salaries. 22 This rule applies to the School, its "international
character" notwithstanding.
The School contends that petitioner has not adduced evidence that
local-hires perform work equal to that of foreign-hires. 23 The Court
finds this argument a little cavalier. If an employer accords employees
the same position and rank, the presumption is that these employees
perform equal work. This presumption is borne by logic and human
experience. If the employer pays one employee less than the rest, it is
not for that employee to explain why he receives less or why the others
receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain
why the employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is
no evidence here that foreign-hires perform 25% more efficiently or
effectively than the local-hires. Both groups have similar functions and
responsibilities, which they perform under similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave
their domicile to rationalize the distinction in salary rates without
violating the principle of equal work for equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or
recompense for services performed." Similarly, the Philippine Legal
Encyclopedia states that "salary" is the "[c]onsideration paid at regular
intervals for the rendering of services." In Songco v. National Labor
Relations Commission, 24 we said that:
"salary" means a recompense or consideration made to a person for his
pains or industry in another man's business. Whether it be derived
from "salarium," or more fancifully from "sal," the pay of the Roman
soldier, it carries with it the fundamental idea of compensation for
services rendered. (Emphasis supplied.)
While we recognize the need of the School to attract foreign-hires,
salaries should not be used as an enticement to the prejudice of local-
hires. The local-hires perform the same services as foreign-hires and
they ought to be paid the same salaries as the latter. For the same
reason, the "dislocation factor" and the foreign-hires' limited tenure
also cannot serve as valid bases for the distinction in salary rates. The
dislocation factor and limited tenure affecting foreign-hires are
adequately compensated by certain benefits accorded them which are
not enjoyed by local-hires, such as housing, transportation, shipping
costs, taxes and home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and
promote their welfare," 25 "to afford labor full protection." 26 The State,
therefore, has the right and duty to regulate the relations between labor
and capital. 27These relations are not merely contractual but are so
impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common
good. 28 Should such contracts contain stipulations that are contrary to
public policy, courts will not hesitate to strike down these stipulations.
In this case, we find the point-of-hire classification employed by
respondent School to justify the distinction in the salary rates of
foreign-hires and local hires to be an invalid classification. There is no
reasonable distinction between the services rendered by foreign-hires
and local-hires. The practice of the School of according higher salaries
to foreign-hires contravenes public policy and, certainly, does not
deserve the sympathy of this Court.1avvphi1
We agree, however, that foreign-hires do not belong to the same
bargaining unit as the local-hires.
A bargaining unit is "a group of employees of a given employer,
comprised of all or less than all of the entire body of employees,
13
Conflicts of Law Full text cases (Batch 1)

consistent with equity to the employer, indicate to be the best suited to

serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law." 29 The factors in determining the
appropriate collective bargaining unit are (1) the will of the employees
(Globe Doctrine); (2) affinity and unity of the employees' interest,
such as substantial similarity of work and duties, or similarity of
compensation and working conditions (Substantial Mutual Interests
Rule); (3) prior collective bargaining history; and (4) similarity of
employment status. 30 The basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their collective
bargaining rights. 31
It does not appear that foreign-hires have indicated their intention to be
grouped together with local-hires for purposes of collective
bargaining. The collective bargaining history in the School also shows
that these groups were always treated separately. Foreign-hires have
limited tenure; local-hires enjoy security of tenure. Although foreign-
hires perform similar functions under the same working conditions as
the local-hires, foreign-hires are accorded certain benefits not granted
to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to
their status as foreign-hires, and justify the exclusion of the former
from the latter. To include foreign-hires in a bargaining unit with local-
hires would not assure either group the exercise of their respective
collective bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is
hereby GRANTED IN PART. The Orders of the Secretary of Labor
and Employment dated June 10, 1996 and March 19, 1997, are hereby
REVERSED and SET ASIDE insofar as they uphold the practice of
respondent School of according foreign-hires higher salaries than
local-hires.
SO ORDERED.

14