MHC AND MHICL vs. NLRC et al

G.R. No. 120077

October 13, 2000

FACTS: private respondent Santos was an overseas

worker employed as a printer at the Mazoon Printing

Press, Sultanate of Oman. Subsequently he was directly

hired by the Palace Hotel, Beijing, Peoples Republic of

China and later terminated due to retrenchment.

Petitioners are the Manila Hotel Corporation (MHC)

and the Manila Hotel International Company, Limited

(MHICL).

When the case was filed in 1990, MHC was still a

government-owned and controlled corporation duly

organized and existing under the laws of the Philippines.

MHICL is a corporation duly organized and existing under

the laws of Hong Kong. MHC is an incorporator of

MHICL, owning 50% of its capital stock.

By virtue of a management agreement with the Palace

Hotel, MHICL trained the personnel and staff of the

Palace Hotel at Beijing, China.

Now the facts.

During his employment with the Mazoon Printing Press,

respondent Santos received a letter from Mr. Shmidt,

General Manager, Palace Hotel, Beijing, China. Mr.

Schmidt informed respondent Santos that he was

recommended by one Buenio, a friend of his. Mr. Shmidt

offered respondent Santos the same position as printer,

but with a higher monthly salary and increased benefits.

Respondent Santos wrote to Mr. Shmidt and signified his

acceptance of the offer.

The Palace Hotel Manager, Mr. Henk mailed a ready to

sign employment contract to respondent Santos. Santos

resigned from the Mazoon Printing Press. Santos wrote

the Palace Hotel and acknowledged Mr. Henks letter.

The employment contract stated that his employment

would be for a period of two years. He then started to

work at the Palace Hotel.

Subsequently, respondent Santos signed an amended

employment agreement with the Palace Hotel. In the

contract, Mr. Shmidt represented the Palace Hotel. The

Vice President (Operations and Development) of

petitioner MHICL Cergueda signed the employment

agreement under the word noted.

After working in the Palace hotel for less than 1 year, the

Palace Hotel informed respondent Santos by letter

signed by Mr. Shmidt that his employment at the Palace

Hotel print shop would be terminated due to business

reverses brought about by the political upheaval in

China. The Palace Hotel terminated the employment of

Santos and paid all benefits due him, including his plane

fare back to the Philippines. Santos was repatriated to

the Philippines.

Santos filed a complaint for illegal dismissal with the

Arbitration Branch, NCR, NLRC. He prayed for an award

of AD, ED and AF for. The complaint named MHC, MHICL,

the Palace Hotel and Mr. Shmidt as respondents. The

Palace Hotel and Mr. Shmidt were not served with

summons and neither participated in the proceedings

before the LA.

The LA decided the case against petitioners. Petitioners

appealed to the NLRC, arguing that the POEA, not the

NLRC had jurisdiction over the case. The NLRC

promulgated a resolution, stating that the appealed

Decision be declared null and void for want of jurisdiction

Santos moved for reconsideration of the afore-quoted

resolution. He argued that the case was not cognizable

by the POEA as he was not an overseas contract worker.

The NLRC granted the motion and reversed itself. The

NLRC directed another LA to hear the case on the

question of whether private respondent was retrenched

or dismissed. The La found that Santos was illegally

dismissed from employment and recommended that he

be paid actual damages equivalent to his salaries for the

unexpired portion of his contract. The NLRC ruled in

favor of private respondent. Petitioners filed an MR

arguing that the LAs recommendation had no basis in

law and in fact, however it was denied. Hence, this

petition.

ISSUE: Is the NLRC a proper forum to decide this case?

HELD: petition granted; the orders and resolutions of the

NLRC are annulled.

NO

Forum Non-Conveniens

The NLRC was a seriously inconvenient forum.

We note that the main aspects of the case transpired in

two foreign jurisdictions and the case involves purely

foreign elements. The only link that the Philippines has

with the case is that Santos is a Filipino citizen. The

Palace Hotel and MHICL are foreign corporations. Not all

cases involving our citizens can be tried here.

The employment contract. Respondent Santos was

hired directly by the Palace Hotel, a foreign employer,

through correspondence sent to the Sultanate of Oman,

where respondent Santos was then employed. He was

hired without the intervention of the POEA or any

authorized recruitment agency of the government.

Under the rule of forum non conveniens, a Philippine

court or agency may assume jurisdiction over the case if

it chooses to do so provided: (1) that the Philippine court

is one to which the parties may conveniently resort to;

(2) that the Philippine court is in a position to make an

intelligent decision as to the law and the facts; and (3)

that the Philippine court has or is likely to have power to

enforce its decision. The conditions are unavailing in the

case at bar.

Not Convenient. We fail to see how the NLRC is a

convenient forum given that all the incidents of the case

from the time of recruitment, to employment to

dismissal occurred outside the Philippines. The

inconvenience is compounded by the fact that the proper

defendants, the Palace Hotel and MHICL are not

nationals of the Philippines. Neither .are they doing

business in the Philippines. Likewise, the main

witnesses, Mr. Shmidt and Mr. Henk are non-residents of

the Philippines.

No power to determine applicable law. Neither can an

intelligent decision be made as to the law governing the

employment contract as such was perfected in foreign

soil. This calls to fore the application of the principle of

lex loci contractus (the law of the place where the

contract was made).

The employment contract was not perfected in the

Philippines. Santos signified his acceptance by writing a

letter while he was in the Republic of Oman. This letter

was sent to the Palace Hotel in the Peoples Republic of

China.

No power to determine the facts. Neither can the

NLRC determine the facts surrounding the alleged illegal

dismissal as all acts complained of took place in Beijing,

Peoples Republic of China. The NLRC was not in a

position to determine whether the Tiannamen Square

incident truly adversely affected operations of the Palace

Hotel as to justify Santos retrenchment.

Principle of effectiveness, no power to execute decision.

Even assuming that a proper decision could be

reached by the NLRC, such would not have any binding

effect against the employer, the Palace Hotel. The Palace

Hotel is a corporation incorporated under the laws of

China and was not even served with summons.

Jurisdiction over its person was not acquired.

This is not to say that Philippine courts and agencies have

no power to solve controversies involving foreign

employers. Neither are we saying that we do not have

power over an employment contract executed in a

foreign country. If Santos were an overseas contract

worker, a Philippine forum, specifically the POEA, not

the NLRC, would protect him. He is not an overseas

contract worker a fact which he admits with conviction.

__

Even assuming that the NLRC was the proper forum,

even on the merits, the NLRCs decision cannot be

sustained.

II. MHC Not Liable

Even if we assume two things: (1) that the NLRC had

jurisdiction over the case, and (2) that MHICL was liable

for Santos retrenchment, still MHC, as a separate and

distinct juridical entity cannot be held liable.

True, MHC is an incorporator of MHICL and owns 50% of

its capital stock. However, this is not enough to pierce

the veil of corporate fiction between MHICL and MHC. In

Traders Royal Bank v. CA, we held that the mere

ownership by a single stockholder or by another

corporation of all or nearly all of the capital stock of a

corporation is not of itself a sufficient reason for

disregarding the fiction of separate corporate

personalities.

It is basic that a corporation has a personality separate

and distinct from those composing it as well as from that

of any other legal entity to which it may be related. Clear

and convincing evidence is needed to pierce the veil of

corporate fiction. In this case, we find no evidence to

show that MHICL and MHC are one and the same entity.

III. MHICL not Liable

Santos predicates MHICLs liability on the fact that MHICL

signed his employment contract with the Palace Hotel.

This fact fails to persuade us.

First, we note that the Vice President (Operations and

Development) of MHICL, Cergueda signed the

employment contract as a mere witness. He merely

signed under the word noted.

When one notes a contract, one is not expressing his

agreement or approval, as a party would. In Sichangco v.

Board of Commissioners of Immigration, the Court

recognized that the term noted means that the person

so noting has merely taken cognizance of the existence

of an act or declaration, without exercising a judicious

deliberation or rendering a decision on the matter.

Second, and more importantly, there was no existing

employer-employee relationship between Santos and

MHICL. In determining the existence of an employer-

employee relationship, the following elements are

considered:

(1) the selection and engagement of the employee;

(2) the payment of wages;

(3) the power to dismiss; and

(4) the power to control employees conduct.

MHICL did not have and did not exercise any of the

aforementioned powers. It did not select respondent

Santos as an employee for the Palace Hotel. He was

referred to the Palace Hotel by his friend, Buenio. MHICL

did not engage respondent Santos to work. The terms of

employment were negotiated and finalized through

correspondence between Santos, Mr. Schmidt and Mr.

Henk, who were officers and representatives of the

Palace Hotel and not MHICL. Neither did Santos adduce

any proof that MHICL had the power to control his

conduct. Finally, it was the Palace Hotel, through Mr.

Schmidt and not MHICL that terminated respondent

Santos services.

Likewise, there is no evidence to show that the Palace

Hotel and MHICL are one and the same entity. The fact

that the Palace Hotel is a member of the Manila Hotel

Group is not enough to pierce the corporate veil

between MHICL and the Palace Hotel.

Considering that the NLRC was forum non-conveniens

and considering further that no employer-employee

relationship existed between MHICL, MHC and Santos,

the LA clearly had no jurisdiction over respondents claim

in the NLRC case. In all the cases under the exclusive and

original jurisdiction of the LA, an employer-employee

relationship is an indispensable jurisdictional

requirement.

COMMUNICATION MATERIALS AND DESIGN, INC et

al vs.CA et al.

G.R. No. 102223

August 22, 1996

FACTS: Petitioners COMMUNICATION MATERIALS AND

DESIGN, INC., (CMDI) and ASPAC MULTI-TRADE INC.,

(ASPAC) are both domestic corporations.. Private

Respondents ITEC, INC. and/or ITEC, INTERNATIONAL,

INC. (ITEC) are corporations duly organized and existing

under the laws of the State of Alabama, USA. There is no

dispute that ITEC is a foreign corporation not licensed to

do business in the Philippines.

ITEC entered into a contract with ASPAC referred to as

Representative Agreement. Pursuant to the contract,

ITEC engaged ASPAC as its exclusive representative in

the Philippines for the sale of ITECs products, in

consideration of which, ASPAC was paid a stipulated

commission. Through a License Agreement entered

into by the same parties later on, ASPAC was able to

incorporate and use the name ITEC in its own name.

Thus , ASPAC Multi-Trade, Inc. became legally and

publicly known as ASPAC-ITEC (Philippines).

One year into the second term of the parties

Representative Agreement, ITEC decided to terminate

the same, because petitioner ASPAC allegedly violated its

contractual commitment as stipulated in their

agreements. ITEC charges the petitioners and another

Philippine Corporation, DIGITAL BASE

COMMUNICATIONS, INC. (DIGITAL), the President of

which is likewise petitioner Aguirre, of using knowledge

and information of ITECs products specifications to

develop their own line of equipment and product

support, which are similar, if not identical to ITECs own,

and offering them to ITECs former customer.

The complaint was filed with the RTC-Makati by ITEC,

INC. Defendants filed a MTD the complaint on the

following grounds: (1) That plaintiff has no legal capacity

to sue as it is a foreign corporation doing business in the

Philippines without the required BOI authority and SEC

license, and (2) that plaintiff is simply engaged in forum

shopping which justifies the application against it of the

principle of forum non conveniens. The MTD was

denied.

Petitioners elevated the case to the respondent CA on a

Petition for Certiorari and Prohibition under Rule 65 of

the Revised ROC. It was dismissed as well. MR denied,

hence this Petition for Review on Certiorari under Rule

45.

ISSUE:

1. Did the Philippine court acquire jurisdiction over the

person of the petitioner corp, despite allegations of lack

of capacity to sue because of non-registration?

2. Can the Philippine court give due course to the suit or

dismiss it, on the principle of forum non convenience?

HELD: petition dismissed.

1. YES; We are persuaded to conclude that ITEC had been

engaged in or doing business in the Philippines for

some time now. This is the inevitable result after a

scrutiny of the different contracts and agreements

entered into by ITEC with its various business contacts in

the country. Its arrangements, with these entities

indicate convincingly that ITEC is actively engaging in

business in the country.

A foreign corporation doing business in the Philippines

may sue in Philippine Courts although not authorized to

do business here against a Philippine citizen or entity

who had contracted with and benefited by said

corporation. To put it in another way, a party is estopped

to challenge the personality of a corporation after having

acknowledged the same by entering into a contract with

it. And the doctrine of estoppel to deny corporate

existence applies to a foreign as well as to domestic

corporations. One who has dealt with a corporation of

foreign origin as a corporate entity is estopped to deny

its corporate existence and capacity.

In Antam Consolidated Inc. vs. CA et al. we expressed our

chagrin over this commonly used scheme of defaulting

local companies which are being sued by unlicensed

foreign companies not engaged in business in the

Philippines to invoke the lack of capacity to sue of such

foreign companies. Obviously, the same ploy is resorted

to by ASPAC to prevent the injunctive action filed by ITEC

to enjoin petitioner from using knowledge possibly

acquired in violation of fiduciary arrangements between

the parties.

2. YES; Petitioners insistence on the dismissal of this

action due to the application, or non application, of the

private international law rule of forum non conveniens

defies well-settled rules of fair play. According to

petitioner, the Philippine Court has no venue to apply its

discretion whether to give cognizance or not to the

present action, because it has not acquired jurisdiction

over the person of the plaintiff in the case, the latter

allegedly having no personality to sue before Philippine

Courts. This argument is misplaced because the court has

already acquired jurisdiction over the plaintiff in the suit,

by virtue of his filing the original complaint. And as we

have already observed, petitioner is not at liberty to

question plaintiffs standing to sue, having already

acceded to the same by virtue of its entry into the

Representative Agreement referred to earlier.

Thus, having acquired jurisdiction, it is now for the

Philippine Court, based on the facts of the case, whether

to give due course to the suit or dismiss it, on the

principle of forum non convenience. Hence, the

Philippine Court may refuse to assume jurisdiction in

spite of its having acquired jurisdiction. Conversely, the

court may assume jurisdiction over the case if it chooses

to do so; provided, that the following requisites are met:

1) That the Philippine Court is one to which the parties

may conveniently resort to;

2) That the Philippine Court is in a position to make an

intelligent decision as to the law and the facts; and,

3) That the Philippine Court has or is likely to have power

to enforce its decision.

The aforesaid requirements having been met, and in

view of the courts disposition to give due course to the

questioned action, the matter of the present forum not

being the most convenient as a ground for the suits

dismissal, deserves scant consideration.

PHILSEC INVESTMENT et al vs.CA et al

G.R. No. 103493

June 19, 1997

FACTS: Private respondent Ducat obtained separate

loans from petitioners Ayala International Finance

Limited (AYALA) and Philsec Investment Corp (PHILSEC),

secured by shares of stock owned by Ducat.

In order to facilitate the payment of the loans, private

respondent 1488, Inc., through its president, private

respondent Daic, assumed Ducats obligation under an

Agreement, whereby 1488, Inc. executed a Warranty

Deed with Vendors Lien by which it sold to petitioner

Athona Holdings, N.V. (ATHONA) a parcel of land in

Texas, U.S.A., while PHILSEC and AYALA extended a loan

to ATHONA as initial payment of the purchase price. The

balance was to be paid by means of a promissory note

executed by ATHONA in favor of 1488, Inc. Subsequently,

upon their receipt of the money from 1488, Inc., PHILSEC

and AYALA released Ducat from his indebtedness and

delivered to 1488, Inc. all the shares of stock in their

possession belonging to Ducat.

As ATHONA failed to pay the interest on the balance, the

entire amount covered by the note became due and

demandable. Accordingly, private respondent 1488, Inc.

sued petitioners PHILSEC, AYALA, and ATHONA in the

United States for payment of the balance and for

damages for breach of contract and for fraud allegedly

perpetrated by petitioners in misrepresenting the

marketability of the shares of stock delivered to 1488,

Inc. under the Agreement.

While the Civil Case was pending in the United States,

petitioners filed a complaint For Sum of Money with

Damages and Writ of Preliminary Attachment against

private respondents in the RTC Makati. The complaint

reiterated the allegation of petitioners in their respective

counterclaims in the Civil Action in the United States

District Court of Southern Texas that private respondents

committed fraud by selling the property at a price 400

percent more than its true value.

Ducat moved to dismiss the Civil Case in the RTC-Makati

on the grounds of (1) litis pendentia, vis-a-vis the Civil

Action in the U.S., (2) forum non conveniens, and (3)

failure of petitioners PHILSEC and BPI-IFL to state a cause

of action.

The trial court granted Ducats MTD, stating that the

evidentiary requirements of the controversy may be

more suitably tried before the forum of the litis

pendentia in the U.S., under the principle in private

international law of forum non conveniens, even as it

noted that Ducat was not a party in the U.S. case.

Petitioners appealed to the CA, arguing that the trial

court erred in applying the principle of litis pendentia

and forum non conveniens.

The CA affirmed the dismissal of Civil Case against Ducat,

1488, Inc., and Daic on the ground of litis pendentia.

ISSUE: is the Civil Case in the RTC-Makati barred by the

judgment of the U.S. court?

HELD: CA reversed. Case remanded to RTC-Makati

NO

While this Court has given the effect of res judicata to

foreign judgments in several cases, it was after the

parties opposed to the judgment had been given ample

opportunity to repel them on grounds allowed under the

law. This is because in this jurisdiction, with respect to

actions in personam, as distinguished from actions in

rem, a foreign judgment merely constitutes prima facie

evidence of the justness of the claim of a party and, as

such, is subject to proof to the contrary. Rule 39, 50

provides:

Sec. 50. Effect of foreign judgments. The effect of a

judgment of a tribunal of a foreign country, having

jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the

judgment is conclusive upon the title to the thing;

(b) In case of a judgment against a person, the judgment

is presumptive evidence of a right as between the parties

and their successors in interest by a subsequent title; but

the judgment may be repelled by evidence of a want of

jurisdiction, want of notice to the party, collusion, fraud,

or clear mistake of law or fact.

In the case at bar, it cannot be said that petitioners were

given the opportunity to challenge the judgment of the

U.S. court as basis for declaring it res judicata or

conclusive of the rights of private respondents. The

proceedings in the trial court were summary. Neither the

trial court nor the appellate court was even furnished

copies of the pleadings in the U.S. court or apprised of

the evidence presented thereat, to assure a proper

determination of whether the issues then being litigated

in the U.S. court were exactly the issues raised in this

case such that the judgment that might be rendered

would constitute res judicata.

Second. Nor is the trial courts refusal to take cognizance

of the case justifiable under the principle of forum non

conveniens:

First, a MTD is limited to the grounds under Rule 16,

sec.1, which does not include forum non conveniens. The

propriety of dismissing a case based on this principle

requires a factual determination, hence, it is more

properly considered a matter of defense.

Second, while it is within the discretion of the trial court

to abstain from assuming jurisdiction on this ground, it

should do so only after vital facts are established, to

determine whether special circumstances require the

courts desistance.

HONGKONG AND SHANGHAI BANKING CORPORATION

(HSBC) vs. SHERMAN et al

G.R. No. 72494

August 11, 1989

FACTS: It appears that sometime in 1981, Eastern Book

Supply Service PTE, Ltd. (COMPANY), a company

incorporated in Singapore applied with and was granted

by HSBC Singapore branch an overdraft facility in the

maximum amount of Singapore dollars 200,000 with

interest at 3% over HSBC prime rate, payable monthly,

on amounts due under said overdraft facility.

As a security for the repayment by the COMPANY of

sums advanced by HSBC to it through the aforesaid

overdraft facility, in 1982, both private respondents and

a certain Lowe, all of whom were directors of the

COMPANY at such time, executed a Joint and Several

Guarantee in favor of HSBC 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.

The COMPANY failed to pay its obligation. Thus, HSBC

demanded payment and inasmuch as the private

respondents still failed to pay, HSBC filed A complaint for

collection of a sum of money against private respondents

Sherman and Reloj before RTC of Quezon City.

Private respondents filed an MTD on the ground of lack

of jurisdiction over the subject matter. The trial court

denied the motion. They then filed before the

respondent IAC a petition for prohibition with

preliminary injunction and/or prayer for a restraining

order. The IAC rendered a decision enjoining the RTC

Quezon City 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. MR denied,

hence this petition.

ISSUE: Do Philippine courts have jurisdiction over the

suit, vis-a-vis the Guarantee stipulation regarding

jurisdiction?

HELD: YES

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

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 Neville Y. Lamis Ents., et al. v. Lagamon,

etc., 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, ROC, 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 latters 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

NOTES:

The respondent IAC likewise ruled that:

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

conveniens depends largely upon the facts of the

particular case and is addressed to the sound discretion

of the trial court. Thus, the IAC should not have relied on

such principle.

AZNAR vs. GARCIA

G.R. No. L-16749

January 31, 1963

FACTS: EDWARD Christensen died testate. The estate

was distributed by Executioner Aznar according to the

will, which provides that: Php 3,600 be given to HELEN

Christensen as her legacy, and the rest of his estate to his

daughter LUCY Christensen, as pronounced by CFI Davao.

Opposition to the approval of the project of partition was

filed by Helen, insofar as it deprives her of her legitime as

an acknowledged natural child, she having been declared

by Us an acknowledged natural child of the deceased

Edward in an earlier case.

As to his citizenship, we find that the citizenship that he

acquired in California when he resided in Sacramento

from 1904 to 1913, was never lost by his stay in the

Philippines, and the deceased appears to have

considered himself as a citizen of California by the fact

that when he executed his will he declared that he was a

citizen of that State; so that he appears never to have

intended to abandon his California citizenship by

acquiring another. But at the time of his death, he was

domiciled in the Philippines.

ISSUE: what law on succession should apply, the

Philippine law or the California law?

HELD: WHEREFORE, the decision appealed from is hereby

reversed and the case returned to the lower court with

instructions that the partition be made as the Philippine

law on succession provides.

The law that governs the validity of his testamentary

dispositions is defined in Article 16 of the Civil Code of

the Philippines, which is as follows:

ART. 16. Real property as well as personal property is

subject to the law of the country where it is situated.

However, intestate and testamentary successions, both

with respect to the order of succession and to the

amount of successional rights and to the intrinsic validity

of testamentary provisions, shall be regulated by the

national law of the person whose succession is under

consideration, whatever may be the nature of the

property and regardless of the country where said

property may be found.

The application of this article in the case at bar requires

the determination of the meaning of the term national

law is used therein.

The next question is: What is the law in California

governing the disposition of personal property?

The decision of CFI Davao, sustains the contention of the

executor-appellee that under the California Probate

Code, a testator may dispose of his property by will in the

form and manner he desires. But HELEN invokes the

provisions of Article 946 of the Civil Code of California,

which is as follows:

If there is no law to the contrary, in the place where

personal property is situated, it is deemed to follow the

person of its owner, and is governed by the law of his

domicile.

It is argued on executors behalf that as the deceased

Christensen was a citizen of the State of California, the

internal law thereof, which is that given in the Kaufman

case, should govern the determination of the validity of

the testamentary provisions of Christensens will, such

law being in force in the State of California of which

Christensen was a citizen. Appellant, on the other hand,

insists that Article 946 should be applicable, and in

accordance therewith and following the doctrine of the

renvoi, the question of the validity of the testamentary

provision in question should be referred back to the law

of the decedents domicile, which is the Philippines.

We note that Article 946 of the California Civil Code is its

conflict of laws rule, while the rule applied in In re

Kaufman, its internal law. If the law on succ ession and

the conflict of laws rules of California are to be enforced

jointly, each in its own intended and appropriate sphere,

the principle cited In re Kaufman should apply to citizens

living in the State, but Article 946 should apply to such of

its citizens as are not domiciled in California but in other

jurisdictions. The rule laid down of resorting to the law of

the domicile in the determination of matters with foreign

element involved is in accord with the general principle

of American law that the domiciliary law should govern in

most matters or rights which follow the person of the

owner.

Appellees argue that what Article 16 of the Civil Code of

the Philippines pointed out as the national law is the

internal law of California. But as above explained the

laws of California have prescribed two sets of laws for its

citizens, one for residents therein and another for those

domiciled in other jurisdictions.

It is argued on appellees (Aznar and LUCY) behalf that

the clause if there is no law to the contrary in the place

where the property is situated in Sec. 946 of the

California Civil Code refers to Article 16 of the Civil Code

of the Philippines and that the law to the contrary in the

Philippines is the provision in said Article 16 that the

national law of the deceased should govern. This

contention can not be sustained.

As explained in the various authorities cited above, the

national law mentioned in Article 16 of our Civil Code is

the law on conflict of laws in the California Civil Code,

i.e., Article 946, which authorizes the reference or return

of the question to the law of the testators domicile. The

conflict of laws rule in California, Article 946, Civil Code,

precisely refers back the case, when a decedent is not

domiciled in California, to the law of his domicile, the

Philippines in the case at bar. The court of the domicile

can not and should not refer the case back to California;

such action would leave the issue incapable of

determination because the case will then be like a

football, tossed back and forth between the two states,

between the country of which the decedent was a citizen

and the country of his domicile. The Philippine court

must apply its own law as directed in the conflict of laws

rule of the state of the decedent, if the question has to

be decided, especially as the application of the internal

law of California provides no legitime for children while

the Philippine law, Arts. 887(4) and 894, Civil Code of the

Philippines, makes natural children legally acknowledged

forced heirs of the parent recognizing them.

We therefore find that as the domicile of the deceased

Edward, a citizen of California, is the Philippines, the

validity of the provisions of his will depriving his

acknowledged natural child, the appellant HELEN, should

be governed by the Philippine Law, the domicile,

pursuant to Art. 946 of the Civil Code of California, not by

the internal law of California..

NOTES: There is no single American law governing the

validity of testamentary provisions in the United States,

each state of the Union having its own private law

applicable to its citizens only and in force only within the

state. The national law indicated in Article 16 of the

Civil Code above quoted can not, therefore, possibly

mean or apply to any general American law. So it can

refer to no other than the private law of the State of

California.

INGENOHL vs. OLSEN AND COMPANY, INC

G.R. No. L-22288

January 12, 1925

FACTS: In 1919, the acting Alien Property Custodian of

the United States, by virtue of the Trading with the

Enemy Act as amended, required and caused to be

conveyed to him the property and business then

belonging to the company known as Syndicat Oriente,

formed under the laws of Belgium, of which the plaintiff

was the gestor, and an enemy as defined in said Act.

The primary purpose of the proceeding was to seize, sell

and convey any and all of the property owned and held

by the company within the jurisdiction of the United

States, as a war measure, upon the ground that they

were alien enemies of the United States.

During the public sale, defendant corporation was the

highest bidder. The said Alien Property Custodian of the

United States having thereafter accepted said bid and

received from the defendant corporation in cash the

amount of said bid, did execute in favor of the defendant

corporation a deed of conveyance. The defendant paid in

good faith, and took over the property and assets of the

company, including its trade-marks and trade names and

its business as a going concern

After obtaining the proceeds from the sale, the plaintiff

in violation of the conveyance, wrongfully instituted an

action in the Supreme Court of Hongkong against the

defendant in which the plaintiff claimed to be the sole

owner of the trade-marks for the exports of the business.

The Supreme Court of Hongkong ruled in favor of the

plaintiff, allegedly through misrepresentation, ordering

defendant to pay the former for costs and AF. The Court

ruled that the deed of conveyance limited the sale of the

business to the trademarks within the Philippines,

implying that the plaintiff is still entitled to the sell the

cigars under the same trademarks through exporting,

which accounts to 95% of the total sales of the company.

(This means that the plaintiff paid the cash equivalent of

the whole of the business but only entitled to 5% of the

such, the sales within the Philippines)- UNFAIR TALAGA!

The CFI rendered judgment for the plaintiff for the full

amount of his claim, with interest, from which the

defendant appeals. Defendant company alleges that

when he purchased the property and business, all

trademarks are included; that the subject of the sale is

not only those trademarks for sales within the

Philippines.

ISSUE: Should the judgment rendered by the Hongkong

court be enforced by Philippine courts?

HELD: NO; we do not hesitate to say that the judgment

rendered in the Hongkong court was a clear mistake of

both law and fact, and that it ought not to be enforced in

the Philippine Islands.

The business of the plaintiff is almost exclusively an

export business, and that the transfer of the goodwill

thereof necessarily carried with it the transfer of said

export business and of the trade-marks and trade names

which could not be disconnected therefrom

- It is conceded that the Hongkong court had

jurisdiction and that the defendant appeared in the

action and contested the case on its merits. Hence, there

was no collusion. Neither is it claimed that there was any

fraud, but it is vigorously contended that the Hongkong

judgment was a clear mistake of both law and fact.

Exclusive of the provisions of section 311 of the Code of

Civil Procedure, it is very doubtful whether it could be

sustained upon the ground of comity or the Law of

Nations. As between allied nations and under the law of

comity, their mutual policy should be to sustain and

enforce the spirit and intention with which the seizure

and sale of any property of an alien enemy was made

rather than to minimize, destroy or defeat them.

We are construing a deed of conveyance from the United

States to the defendant. The primary purpose of the

whole proceeding was to seize and convey all of the

property of the plaintiff or his company within the

jurisdiction of the United States, including trade names

and trade-marks as those of an alien enemy. To now give

the defendant the use and benefit of only 5 per cent of

such trade names and trade-marks, and to permit the

plaintiff to have and retain the other 95 per cent to his

own use and benefit after he has ratified and confirmed

the sale, would impugn the honor and good name of the

United States in the whole proceeding and defeat the

very purpose for which it seized and sold the property of

an alien enemy, to wipe Ingenohl and his company out of

existence and put them out of business in so far as the

United States had the power to do so

Be that as it may, this court is bound be section 311 of

the Code of Civil Procedure. That law was enacted by the

Legislature of the Philippine Islands, and as to the

Philippine Islands, it is the law of the land. In the absence

of that statute, no matter how wrongful the judgment of

the Hongkong court may be, there would be strong

reasons for holding that it should be enforced by this

court.

PILAPIL vs. HON IBAY-SOMERA, VICTOR AND GEILING

G.R. No. 80116

June 30, 1989

FACTS: Petitioner Imelda Pilapil, a Filipino citizen, and

private respondent Erich Geiling, a German national,

were married in Germany. After about three and a half

years of marriage, such connubial disharmony

eventuated in Geiling initiating a divorce proceeding

against Pilapil in Germany. The Local Court, Federal

Republic of Germany, promulgated a decree of divorce

on the ground of failure of marriage of the spouses.

More than five months after the issuance of the divorce

decree, Geiling filed two complaints for adultery before

the City Fiscal of Manila alleging in one that, while still

married to said Geiling, Pilapil had an affair with a

certain William Chia. The Assistant Fiscal, after the

corresponding investigation, recommended the dismissal

of the cases on the ground of insufficiency of evidence.

However, upon review, the respondent city fiscal Victor

approved a resolution directing the filing of 2 complaint

for adultery against the petitioner. The case entitled PP

Philippines vs. Pilapil and Chia was assigned to the court

presided by the respondent judge Ibay-Somera.

A motion to quash was filed in the same case which was

denied by the respondent. Pilapil filed this special civil

action for certiorari and prohibition, with a prayer for a

TRO, seeking the annulment of the order of the lower

court denying her motion to quash.

As cogently argued by Pilapil, Article 344 of the RPC thus

presupposes that the marital relationship is still

subsisting at the time of the institution of the criminal

action for adultery.

ISSUE: Did Geiling have legal capacity at the time of the

filing of the complaint for adultery, considering that it

was done after obtaining a divorce decree?

HELD: WHEREFORE, the questioned order denying

petitioners MTQ is SET ASIDE and another one entered

DISMISSING the complaint for lack of jurisdiction. The

TRO issued in this case is hereby made permanent.

NO

Under Article 344 of the RPC, the crime of adultery

cannot be prosecuted except upon a sworn written

complaint filed by the offended spouse. It has long since

been established, with unwavering consistency, that

compliance with this rule is a jurisdictional, and not

merely a formal, requirement.

Corollary to such exclusive grant of power to the

offended spouse to institute the action, it necessarily

follows that such initiator must have the status, capacity

or legal representation to do so at the time of the filing

of the criminal action. This is a logical consequence since

the raison detre of said provision of law would be absent

where the supposed offended party had ceased to be the

spouse of the alleged offender at the time of the filing of

the criminal case.

Stated differently, the inquiry would be whether it is

necessary in the commencement of a criminal action for

adultery that the marital bonds between the

complainant and the accused be unsevered and existing

at the time of the institution of the action by the former

against the latter.

In the present case, the fact that private respondent

obtained a valid divorce in his country, the Federal

Republic of Germany, is admitted. Said divorce and its

legal effects may be recognized in the Philippines insofar

as private respondent is concerned in view of the

nationality principle in our civil law on the matter of

status of persons Under the same considerations and

rationale, private respondent, being no longer the

husband of petitioner, had no legal standing to

commence the adultery case under the imposture that

he was the offended spouse at the time he filed suit.

BENGSON vs. HRET and CRUZ

G.R. No. 142840

May 7, 2001

FACTS: The citizenship of respondent Cruz is at issue in

this case, in view of the constitutional requirement that

no person shall be a Member of the House of

Representatives unless he is a natural-born citizen.

Cruz was a natural-born citizen of the Philippines. He was

born in Tarlac in 1960 of Filipino parents. In 1985,

however, Cruz enlisted in the US Marine Corps and

without the consent of the Republic of the Philippines,

took an oath of allegiance to the USA. As a Consequence,

he lost his Filipino citizenship for under CA No. 63 [(An

Act Providing for the Ways in Which Philippine

Citizenship May Be Lost or Reacquired (1936)] section

1(4), a Filipino citizen may lose his citizenship by, among

other, rendering service to or accepting commission in

the armed forces of a foreign country.

Whatever doubt that remained regarding his loss of

Philippine citizenship was erased by his naturalization as

a U.S. citizen in 1990, in connection with his service in

the U.S. Marine Corps.

In 1994, Cruz reacquired his Philippine citizenship

through repatriation under RA 2630 [(An Act Providing

for Reacquisition of Philippine Citizenship by Persons

Who Lost Such Citizenship by Rendering Service To, or

Accepting Commission In, the Armed Forces of the

United States (1960)]. He ran for and was elected as the

Representative of the 2nd District of Pangasinan in the

1998 elections. He won over petitioner Bengson who was

then running for reelection.

Subsequently, petitioner filed a case for Quo Warranto

Ad Cautelam with respondent HRET claiming that Cruz

was not qualified to become a member of the HOR since

he is not a natural-born citizen as required under Article

VI, section 6 of the Constitution.

HRET rendered its decision dismissing the petition for

quo warranto and declaring Cruz the duly elected

Representative in the said election.

ISSUE: WON Cruz, a natural-born Filipino who became an

American citizen, can still be considered a natural-born

Filipino upon his reacquisition of Philippine citizenship.

HELD: petition dismissed

YES

Filipino citizens who have lost their citizenship may

however reacquire the same in the manner provided by

law. C.A. No. 63 enumerates the 3 modes by which

Philippine citizenship may be reacquired by a former

citizen:

1. by naturalization,

2. by repatriation, and

3. by direct act of Congress.

**

Repatriation may be had under various statutes by those

who lost their citizenship due to:

1. desertion of the armed forces;

2. services in the armed forces of the allied forces in

World War II;

3. service in the Armed Forces of the United States at any

other time,

4. marriage of a Filipino woman to an alien; and

5. political economic necessity

Repatriation results in the recovery of the original

nationality This means that a naturalized Filipino who

lost his citizenship will be restored to his prior status as a

naturalized Filipino citizen. On the other hand, if he was

originally a natural-born citizen before he lost his

Philippine citizenship, he will be restored to his former

status as a natural-born Filipino.

R.A. No. 2630 provides:

Sec 1. Any person who had lost his Philippine citizenship

by rendering service to, or accepting commission in, the

Armed Forces of the United States, or after separation

from the Armed Forces of the United States, acquired

United States citizenship, may reacquire Philippine

citizenship by taking an oath of allegiance to the Republic

of the Philippines and registering the same with Local

Civil Registry in the place where he resides or last resided

in the Philippines. The said oath of allegiance shall

contain a renunciation of any other citizenship.

Having thus taken the required oath of allegiance to the

Republic and having registered the same in the Civil

Registry of Magantarem, Pangasinan in accordance with

the aforecited provision, Cruz is deemed to have

recovered his original status as a natural-born citizen, a

status which he acquired at birth as the son of a Filipino

father. It bears stressing that the act of repatriation

allows him to recover, or return to, his original status

before he lost his Philippine citizenship.

VAN DORN vs. HON. ROMILLO and RICHARD UPTON

G.R. No. L-68470

October 8, 1985

FACTS: Petitioner Alice Van Dorn is a citizen of the

Philippines while private respondent Richard Upton is a

citizen of the USA. They were married in Hongkong in

1972 and begot two children. The parties were divorced

in Nevada, USA in 1982. Alice has then re-married also in

Nevada, this time to Theodore Van Dorn.

In 1983, Richard filed suit against Alice in the RTC-Pasay,

stating that Alices business in Ermita, Manila is conjugal

property of the parties, and asking that Alice be ordered

to render an accounting of that business, and that

Richard be declared with right to manage the conjugal

property.

Alice moved to dismiss the case on the ground that the

cause of action is barred by previous judgment in the

divorce proceedings before the Nevada Court wherein

respondent had acknowledged that he and petitioner

had no community property as of June 11, 1982.

The Court below (presiding judge: Judge Romillo) denied

the MTD in the mentioned case on the ground that the

property involved is located in the Philippines so that the

Divorce Decree has no bearing in the case. The denial is

now the subject of this certiorari proceeding.

ISSUE: What is the effect of the foreign divorce on the

parties and their alleged conjugal property in the

Philippines?

HELD: Petition is granted, and respondent Judge is

hereby ordered to dismiss the Complaint

For the resolution of this case, it is not necessary to

determine whether the property relations between Alice

and Richard, after their marriage, were upon absolute or

relative community property, upon complete separation

of property, or upon any other regime. The pivotal fact in

this case is the Nevada divorce of the parties.

The Nevada District Court, which decreed the divorce,

had obtained jurisdiction over petitioner who appeared

in person before the Court during the trial of the case. It

also obtained jurisdiction over private respondent who

authorized his attorneys in the divorce case to agree to

the divorce on the ground of incompatibility in the

understanding that there were neither community

property nor community obligations.

As explicitly stated in the Power of Attorney he executed

in favor of the law firm of KARP & GRAD LTD. to

represent him in the divorce proceedings:

xxx xxx xxx

You are hereby authorized to accept service of

Summons, to file an Answer, appear on my behalf and do

all things necessary and proper to represent me, without

further contesting, subject to the following:

1. That my spouse seeks a divorce on the ground of

incompatibility.

2. That there is no community of property to be

adjudicated by the Court.

3. That there are no community obligations to be

adjudicated by the court.

xxx xxx xxx

There can be no question as to the validity of that

Nevada divorce in any of the States of the United States.

The decree is binding on private respondent as an

American citizen. What he is contending in this case is

that the divorce is not valid and binding in this

jurisdiction, the same being contrary to local law and

public policy.

It is true that owing to the nationality principle embodied

in Article 15 of the Civil Code, only Philippine nationals

are covered by the policy against absolute divorces the

same being considered contrary to our concept of public

police and morality. However, aliens may obtain divorces

abroad, which may be recognized in the Philippines,

provided they are valid according to their national law. In

this case, the divorce in Nevada released private

respondent from the marriage from the standards of

American law, under which divorce dissolves the

marriage.

Thus, pursuant to his national law, private respondent is

no longer the husband of petitioner. He would have no

standing to sue in the case below as petitioners husband

entitled to exercise control over conjugal assets. As he is

bound by the Decision of his own countrys Court, which

validly exercised jurisdiction over him, and whose

decision he does not repudiate, he is estopped by his

own representation before said Court from asserting his

right over the alleged conjugal property.

THE GOVT OF THE PHILIPPINE ISLANDS vs. FRANK

G. R. No. 2935

March 23, 1909

FACTS: In 1903, in the city of Chicago, Illinois, Frank

entered into a contract for a period of 2 years with the

Plaintiff, by which Frank was to receive a salary as a

stenographer in the service of the said Plaintiff, and in

addition thereto was to be paid in advance the expenses

incurred in traveling from the said city of Chicago to

Manila, and one-half salary during said period of travel.

Said contract contained a provision that in case of a

violation of its terms on the part of Frank, he should

become liable to the Plaintiff for the amount expended

by the Government by way of expenses incurred in

traveling from Chicago to Manila and the one-half salary

paid during such period.

Frank entered upon the performance of his contract and

was paid half-salary from the date until the date of his

arrival in the Philippine Islands.

Thereafter, Frank left the service of the Plaintiff and

refused to make a further compliance with the terms of

the contract.

The Plaintiff commenced an action in the CFI-Manila to

recover from Frank the sum of money, which amount the

Plaintiff claimed had been paid to Frank as expenses

incurred in traveling from Chicago to Manila, and as half-

salary for the period consumed in travel.

It was expressly agreed between the parties to said

contract that Laws No. 80 and No. 224 should constitute

a part of said contract.

The Defendant filed a general denial and a special

defense, alleging in his special defense that

(1) the Government of the Philippine Islands had

amended Laws No. 80 and No. 224 and had thereby

materially altered the said contract, and also that

(2) he was a minor at the time the contract was entered

into and was therefore not responsible under the law.

the lower court rendered a judgment against Frank and

in favor of the Plaintiff for the sum of 265. 90 dollars

ISSUE:

1. Did the amendment of the laws altered the tenor of

the contract entered into between Plaintiff and

Defendant?

2. Can the defendant allege minority/infancy?

HELD: the judgment of the lower court is affirmed

1. NO; It may be said that the mere fact that the

legislative department of the Government of the

Philippine Islands had amended said Acts No. 80 and No.

224 by Acts No. 643 and No. 1040 did not have the effect

of changing the terms of the contract made between the

Plaintiff and the Defendant. The legislative department

of the Government is expressly prohibited by section 5 of

the Act of Congress of 1902 from altering or changing the

terms of a contract. The right which the Defendant had

acquired by virtue of Acts No. 80 and No. 224 had not

been changed in any respect by the fact that said laws

had been amended. These acts, constituting the terms of

the contract, still constituted a part of said contract and

were enforceable in favor of the Defendant.

2. NO; The Defendant alleged in his special defense that

he was a minor and therefore the contract could not be

enforced against him. The record discloses that, at the

time the contract was entered into in the State of Illinois,

he was an adult under the laws of that State and had full

authority to contract. Frank claims that, by reason of the

fact that, under that laws of the Philippine Islands at the

time the contract was made, made persons in said

Islands did not reach their majority until they had

attained the age of 23 years, he was not liable under said

contract, contending that the laws of the Philippine

Islands governed.

It is not disputed upon the contrary the fact is

admitted that at the time and place of the making of

the contract in question the Defendant had full capacity

to make the same. No rule is better settled in law than

that matters bearing upon the execution, interpretation

and validity of a contract are determined b the law of the

place where the contract is made. Matters connected

with its performance are regulated by the law prevailing

at the place of performance. Matters respecting a

remedy, such as the bringing of suit, admissibility of

evidence, and statutes of limitations, depend upon the

law of the place where the suit is brought.