conflicts - outline 3

8/12/2019 Conflicts - Outline 3

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RAYRAY VS LEE Article 45

Rayray married Lee in 1952 in Pusan, Korea.Before the marriage, Lee was able to secure amarriage license which is a requirement inKorea prior to marrying. They lived together

until 1955. Rayray however later found out thatLee had previously lived with 2 Americans anda Korean. Lee answered by saying that it is notunusual in Korea for a woman to have morethan one partner and that it is legally permissivefor them to do so and that there is no legalimpediment to her marriage with Rayray.Eventually they pursued their separate ways.Rayray later filed before lower court of Manilafor an action to annul his marriage with Leebecause Lee‘s whereabouts cannot bedetermined and that his consent in marrying Lee

would have not been for the marriage had heknown prior that Lee had been living with othermen. His action for annulment had been dulypublished and summons were made known toLee but due to her absence Rayray moved tohave Lee be declared in default. The lower courtdenied Rayray‘s action stating that since themarriage was celebrated in Korea the courtcannot take cognizance of the case and that thefacts presented by Rayray is not sufficient todebunk his marriage with Lee.ISSUE: Whether or not Rayray‘s marriage withLee is null and void.HELD: The lower court erred in ruling thatPhilippine courts do not have jurisdiction overthe case. As far as marriage status is concerned,the nationality principle is controlling NOT lexloci celebracionis. The lower court is howevercorrect in ruling that Rayray‘s evidence is notsufficient to render his marriage with Lee nulland void. Rayray said that the police clearancesecured by Lee is meant to allow her to marryafter her subsequent cohabitation/s with theother men – which is considered bigamous inPhilippine law. The SC ruled that the police

clearance is wanting for it lacks the signature ofthe person who prepared it and there is nocompetent document to establish the identity ofthe same. Also, through Rayray himself, Leeaverred that it is ok in Korea for a personwho cohabited with other men before to marryanother man. This is an indication that Leeherself is aware that if it were a previousmarriage that is concerned then that could be a

legal impediment to any subsequent marriage.Rayray cannot be given credence in claimingthat his consent could have been otherwisealtered had he known all these facts prior to themarriage because he would lie to everyopportunity given him by the Court so as to suit

his case.

G.R. No. L-5897 April 23, 1954

KING MAU WU, plaintiff-appellee,vs.FRANCISCO SYCIP, defendant-appellant.

I.C. Monsod for appellant. J.A. Wolfson and P. P. Gallardo for appellee.

PADILLA, J.:

This is an action to collect P59,082.92, togetherwith lawful interests from 14 October 1947, thedate of the written demand for payment, andcosts. The claim arises out of a shipment of 1,000tons of coconut oil emulsion sold by theplaintiff, as agent of the defendant, to Jas.Maxwell Fassett, who in turn assigned it toFortrade Corporation. Under an agencyagreement set forth in a letter dated 7 November1946 in New York addressed to the defendantand accepted by the latter on the 22nd day of the

same month, the plaintiff was made theexclusive agent of the defendant in the sale ofcoconut oil and its derivatives outside thePhilippines and was to be paid 2 1/2 per cent onthe total actual sale price of sales obtainedthrough his efforts in addition thereto 50 percent of the difference between the authorizedsale price and the actual sale price.

After the trial where the depositions of theplaintiff and of Jas. Maxwell Fassett and severalletters in connection therewith were introduced

and the testimony of the defendant was heard,the Court rendered judgment as prayed for inthe complaint. A motion for reconsideration wasdenied. A motion for a new trial was filed,supported by the defendant's affidavit, based onnewly discovered evidence which consists of aduplicate original of a letter dated 16 October1946 covering the sale of 1,000 tons of coconutoil soap emulsion signed by Jas. Maxwell Fassett



assigned by the latter to the defendant; the letterof credit No. 20122 of the Chemical Bank &Trust Company in favor of Jas. Maxwell Fassettassigned by the latter to the defendant; and aletter dated 16 December 1946 by the FortradeCorporation to Jas. Maxwell Fassett accepted it

on 24 December 1946, all of which documents,according to the defendant, could not beproduced at the trial, despite the use ofreasonable diligence, and if produced theywould alter the result of the controversy. Themotion for new trial was denied. The defendantis appealing from said judgment.

Both parties agreed that the only transaction orsale made by the plaintiff, as agent of thedefendant, was that of 1,000 metric tons ofcoconut oil emulsion f.o.b. in Manila,

Philippines, to Jas. Maxwell Fassett, in whosefavor letter of credit No. 20112 of the ChemicalBank & Trust Company for a sum not to exceed$400,000 was established and who assigned toFortrade Corporation his fight to the 1,000metric tons of coconut oil emulsion and in thedefendant the letter of credit referred to for asum not to exceed $400,000.

The plaintiff claims that for that sale he isentitled under the agency contract dated 7November 1946 and accepted by the defendant

on 22 November of the same year to acommission of 2 1/2 per cent on the total actualsale price of 1,000 tons of coconut oil emulsion,part of which has been paid by the defendant,there being only a balance of $3,794.94 forcommission due and unpaid on the lastshipment of 379.494 tons and 50 per cent of thedifference between the authorized sale price of$350 per ton and the actual selling price of $400per ton, which amounts to $25,000 due andunpaid, and $746.52 for interest from 14 October1947, the date of the written demand.

The defendant, on the other hand, contends thatthe transaction for the sale of 1,000 metric tonsof coconut oil emulsion was not covered by theagency contract of 22 November 1946 because itwas agreed upon on 16 October 1946; that it wasan independent and separate transaction forwhich the plaintiff has been duly compensated.The contention is not borne out by the evidence.

The plaintiff and his witness depose that therewere several drafts of documents or letterprepared by Jas. Maxwell Fassett preparatory orleading to the execution of the agencyagreement of 7 November 1946, which wasaccepted by the defendant on 22 November

1946, and that the letter, on which the defendantbases his contention that the transaction on the1,000 metric tons of coconut oil emulsion wasnot covered by the agency agreement, was oneof those letters. That is believable. The letterupon which defendant relies for his defensedoes not stipulate on the commission to be paidto the plaintiff as agent, and yet if he paid theplaintiff a 2 1/2 per cent commission on the firstthree coconut oil emulsion shipments, there isno reason why he should not pay him the samecommission on the last shipment amounting to

$3,794.94. There can be no doubt that the sale of1,000 metric tons of coconut oil emulsion wasnot a separate and independent contract fromthat of the agency agreement on 7 Novemberand accepted on 22 November 1946 by thedefendant, because in a letter dated 2 January1947 addressed to the plaintiff, referring to thetransaction of 1,000 metric tons of coconut oilemulsion, the defendant says —

. . . I am doing everything possible tofulfill these 1,000 tons of emulsion, and

until such time that we completed thisorder I do not feel it very sensible on mypart to accept any more orders. I want toprove to Fortrade, yourself and otherpeople that we deliver our goods.Regarding your commission, it isunderstood to be 2 1/2 per cent of allprices quoted by me plus 50-50 on overprice. (Schedule B.)

In another letter dated 16 January 1957 to theplaintiff, speaking of the same transaction, thedefendant says —

As per our understanding when I was inthe States the overprice is subject to anyincrease in the cost of production. I amnot trying to make things difficult foryou and I shall give you your 2 1/2 percent commission plus our overpriceprovided you can give me substantial



order in order for me to amortize myloss on this first deal. Unless such couldbe arranged I shall remit to you for thepresent your commission uponcollection from the bank. (Schedule C.)

In a telegram sent by the defendant to theplaintiff the former says —

. . . Your money pending stopunderstand you authorized some localattorneys and my relatives to interveneyour behalf. (Schedule D.)

The defendant's claim that the agreement for thesale of the 1,000 metric tons of coconut oilemulsion was agreed upon in a document,referring to the letter of 16 October 1946, is again

disproved by his letter dated 2 December 1946to Fortrade Corporation where he says:

The purpose of this letter is to confirmin final form the oral agreement which wehave heretofore reached, as betweenourselves, during the course of variousconversations between us and ourrespective representatives upon thesubject matter of this letter.

It is understood that I am to sell to you,

and you are to purchase from me, 1,000tons of coconut oil soap emulsion at aprice of $400. per metric ton, i.e. 2,204.6pounds, F.O.B. shipboard, Manila, P.I.(Exhibit S, Special. Emphasis supplied.)

The contention that as the contract was executedin New York, the Court of First Instance ofManila has no jurisdiction over this case, iswithout merit, because a non-resident may sue aresident in the courts of this country1 where thedefendant may be summoned and his property

leviable upon execution in the case of afavorable, final and executory judgment. It is apersonal action for the collection of a sum ofmoney which the Courts of First Instance have jurisdiction to try and decide. There is noconflict of laws involved in the case, because it isonly a question of enforcing an obligationcreated by or arising from contract; and unless

the enforcement of the contract be against publicpolicy of the forum, it must be enforced.

The plaintiff is entitled to collect P7,589.88 forcommission and P50,000 for one-half of theoverprice, or a total of P57,589.88, lawful

interests thereon from the date of the filing ofthe complaint, and costs in both instances.

As thus modified the judgment appealed from isaffirmed, with costs against the appellant.

Paras, C.J., Pablo, Bengzon, Montemayor, Reyes, Jugo, Bautista Angelo, and Concepcion, JJ., concur.

Llorente vs CA

Facts: On February 22, 1937, Lorenzo and

petitioner Paula were married before a parish

priest in Nabua, Camarines Sur.

On November 30, 1943, Lorenzo was admitted

to United States citizenship and Certificate of

Naturalization No. 5579816 was issued in his

favor by the United States District Court,

Southern District of New York.

Upon the liberation of the Philippines by the

American Forces in 1945, Lorenzo was grantedan accrued leave by the U. S. Navy, to visit his

wife and he visited the Philippines. He

discovered that his wife Paula was pregnant and

was ―living in‖ and having an adulterous

relationship with his brother, Ceferino Llorente.

Lorenzo refused to forgive Paula and live with

her . He then returned to the United States and

on November 16, 1951 filed for divorce with the

Superior Court of the State of California in and

for the County ofSan Diego. Paula wasrepresented by counsel, John Riley, and actively

participated in the proceedings. On November

27, 1951, the Superior Court of the State of

California, for the County of San Diegofound all

factual allegations to be true and issued an

interlocutoryjudgment of divorce.



On December 4, 1952, the divorce decree became

final.

Lorenzo went back to the Philippines and on

January 16, 1958 married Alicia F. Llorente in

Manila.

From 1958 to 1985, Lorenzo and Alicia lived

together as husband and wife.Their twenty-five

(25) year union produced three children, Raul,

Luz and Beverly, all surnamed Llorente.

On March 13, 1981, Lorenzo executed a Last

Will and Testament. The will was notarized by

Notary Public Salvador M. Occiano, duly signed

by Lorenzo with attesting witnesses Francisco

Hugo, Francisco Neibres and Tito Trajano. In thewill, Lorenzo bequeathed all his property to

Alicia and their three children.

On December 14, 1983, Lorenzo filed with the

Regional Trial Court, Iriga, Camarines Sur, a

petition for the probate and allowance of hislast

will and testament wherein Lorenzo moved that

Alicia be appointed Special Administratrix of his

estate.

On January 24, 1984, finding that the will was

duly executed, the trial court admitted the will

to probate but before the proceedings could be

terminated , Lorenzo died.

Paula filed with the same court a petition for

letters of administration over Lorenzo‘s estate in

her favor contending that she was

Lorenzo‘ssurviving spouse, that such properties

were acquired during their marriage and that

Lorenzo‘s will would encroach her legitime.

Alicia filed in the testate proceeding , a petition

for the issuance of letters testamentary.

On October 14, 1985, without terminating the

testate proceedings, the trial court gave due

course to Paula‘s petition.

The Regional Trial Court found that the divorce

decree granted to the late Lorenzo Llorente is

void and inapplicable in the Philippines,

therefore the marriage he contracted with Alicia

Fortunato on January 16, 1958 at Manila islikewise void. This being so the petition of Alicia

F. Llorente for the issuance of letters

testamentary is denied. Likewise, she is not

entitled to receive any share from the estate even

if the will especially said so her relationship

with Lorenzo having gained the status of

paramour which is under Art. 739 (1).

―Petitioner, Paula Llorente is appointed legal

administrator of the estate of the deceased,

Lorenzo Llorente.Issue: Who are entitled to inherit from the late

Lorenzo N. Llorente?

Held: The trial court held that the will was

intrinsically invalid since it contained

dispositions in favor of Alice, who in the trial

court‘s opinion was a mere paramour. The trial

court threw the will out, leaving Alice, and her

two children, Raul and Luz, with nothing.

The Court of Appeals also disregarded the will.

It declared Alice entitled to one half (1/2) of

whatever property she and Lorenzo acquired

during their cohabitation, applying Article 144

of the Civil Code of the Philippines.

The hasty application of Philippine law and the

complete disregard of the will, already probated

as duly executed in accordance with the

formalities of Philippine law, is fatal, especially

in light of the factual and legal circumstanceshere obtaining.

Lorenzo N. Llorente became an American

citizen long before and at the time of: (1) his

divorce from Paula; (2) marriage to Alicia; (3)

execution of his will; and (4) death, is duly

established, admitted and undisputed.



Thus, as a rule, issues arising from these

incidents are necessarily governed by foreign

law. ―

Art. 16. Real property as well as personalproperty is subject to the law of the country

where it is situated.

―However, intestate and testamentary

succession, 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 thecountry wherein said property may be found.‖

But the hasty disregard of both the RTC and CA

of Lorenzo‘s Will by calling to the fore the

RENVOI doctrine, claiming that American law

follows domiciliary rule is unjustified. There is

no such thing as American law for the whole

nation of the US, for the country comprises of a

group of States, each State having its own

applicable law, enforceable only within that

state.

As to the validity of the foreign divorce ,

jurisprudence reiterates that once it is proven

that an individual is no longer a Filipino, thus

an alien, when he obtains a divorce abroad, its

effects shall be recognized in the Philippines.

The Supreme Court held that the divorce

obtained by Lorenzo H. Llorente from his first

wife Paula was valid and recognized in this jurisdiction as a matter of comity.

Now, the effects of this divorce (as to the

succession to the estate of the decedent) are

matters best left to the determination of the trial

court.

Whether the will is intrinsically valid and who

shall inherit from Lorenzo are issues best proved

by foreign law which must be pleaded and

proved. Whether the will was executed in

accordance with the formalities required is

answered by referring to Philippine law. In fact,the will was duly probated.

The decision of the CA is set aside and that of

the RTC is reversed. Court REMANDS the cases

to the court of origin for determination of the

intrinsic validity of Lorenzo N. Llorente‘s will

and determination of the parties‘ successional

rights allowing proof of foreign law with

instructions that the trial court shall proceed

with all deliberate dispatch to settle the estate of

the deceased within the framework of the Rulesof Court.

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 toreceive 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 toManila 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 theDefendant. 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 thePhilippine 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 bythe 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.

hilippine Export and Foreign Loan GuaranteeCorporation v V.P. Eusebio Construction Inc.Facts:

1. The State Organization of Buildings (SOB),Ministry of Housing and Construction,Baghdad, Iraq awarded the construction of theInstitute of Physical Therapy-MedicalRehabilitation Center in Iraq to Ayjal Tradingand Contracting Company for a total contractprice of about $18M.

2. Spouses Santos, in behalf of 3-Plex



International, Inc., a local contractor engaged inconstruction business, entered into a jointventure agreement with Ayjal wherein theformer undertook the execution of the entire aproject, while the latter would be entitled to acommission of 4%.

3. 3-Plex not accredited by the PhilippineOverseas Construction Board (POCB) assignedand transferred all its rights and interests toVPECI.

4. The SOB required the contractors to submit aperformance bond representing 5% of the totalcontract price, an advance payment bondrepresenting 10% of the advance payment to bereleased upon signing of the contract. To complywith these requirements 3-Plex and VPECI

applied for a guarantee with Philguarantee, agovernment financial institution empowered toissue guarantees for qualified Filipinocontractors.

5. But what SOB required was a guarantee fromthe Rafidain Bank of Baghdad so Rafidain Bankissued a performance bond in favor of SOB onthe condition that another foreign bank (not PhilGuarantee) would issue the counter-guarantee.Hence, Al Ahli Bank of Kuwait was chosen toprovide the counter guarantee.

6.Afterwards, SOB and the joint venture ofVPECI and Ayjal executed the service contract.Under the contract, the joint venture wouldsupply manpower and materials, SOB wouldrefund 25% of the project cost in Iraqi Dinar and75% in US dollars at an exchange rate of 1 Dinarto $3.37.

7.The project was not completed. Upon seeingthe impossibility of meeting the deadline, the joint venture worked for the renewal orextension (12x) of the performance bond up to

December 1986.

8. In October 1986, Al Ahli Bank sent a telex calldemanding full payment of its performancebond counter-guarantee. Upon receipt, VPECIrequested Iraq Trade and EconomicDevelopment Minister Fadhi Hussein to recallthe telex for being in contravention of its mutualagreement that the penalty will be held in

abeyance until completion of the project. It alsowrote SOB protesting the telex since the Iraqigovernment lacks foreign exchange to payVPECI and the non-compliance with the 75%billings in US dollars.

9. Philguarantee received another telex from AlAhli stating that it already paid to RafidainBank. The Central Bank authorized theremittance to Al Ahli Bank representing the fullpayment of the performance counter-guaranteefor VPECI's project in Iraq.

10. Philguarantee sent letters to respondentsdemanding the full payment of the surety bond.Respondents failed to pay so petitioner filed acivil case for collection of sum of money.

11. Trial Court ruling: Dismissed. Philguaranteehad no valid cause of action against therespondents. The joint venture incurred nodelay in the execution of the project consideringthat SOB's violations of the contract renderedimpossible the performance of its undertaking.

12. CA: Affirmed.

Issue:What law should be applied in determiningwhether or not contractor (joint venture) hasdefaulted?

Held:The question of whether there is a breach of theagreement which includes default pertains tothe INTRINSIC validity of the contract.

No conflicts rule on essential validity ofcontracts is expressly provided for in our laws.The rule followed by most legal systems is thatthe intrinsic validity of a contract must begoverned by lex contractus (proper law of thecontract). This may be the law voluntarily

agreed upon by the parties (lex loci voluntatis)or the law intended by them either expressly orimplicitly (lex loci intentionis). The law selectedmay be implied from factors such as substantialconnection with the transaction, or thenationality or domicile of the parties. Philippinecourts adopt this: to allow the parties to selectthe law applicable to their contract, SUBJECT tothe limitation that it is not against the law,



morals, public policy of the forum and that thechosen law must bear a substantive relationshipto the transaction.

In the case, the service contract between SOBand VPECI contains no express choice of law.

The laws of Iraq bear substantial connection tothe transaction and one of the parties is the Iraqigovernment. The place of performance is also inIraq. Hence, the issue of whether VPECIdefaulted may be determined by the laws ofIraq.

BUT! Since foreign law was not properlypleaded or proved, processual presumption willapply.

According to Art 1169 of the Civil Code: In

reciprocal obligations, neither party incurs indelay if the other party does not comply or is notready to comply in a proper manner what isincumbent upon him.

As found by the lower courts: the delay or non-completion of the project was caused by factorsnot imputable to the Joint Venture, it was ratherdue to the persistent violations of SOB,particularly it's failure to pay 75% of theaccomplished work in US dollars. Hence, the joint venture does not incur in delay if the otherparty(SOB) fails to perform the obligationincumbent upon him.

G.R. No. 71604 August 11, 1989

JOSE B. ATIENZA, petitioner,vs.PHILIMARE SHIPPING AND EQUIPMENTSUPPLY, TRANS OCEAN LINER (Pte) LTD.,PHILIPPINE OVERSEAS EMPLOYMENTADMINISTRATION and NATIONAL LABORRELATIONS COMMISSION,

respondents.

Linsangan Law Office for petitioner.

Prudencio Cruz for private respondents.

CRUZ, J.:

The facts of this case are not disputed. Even thelegal issues are simple and are soon resolved.

Joseph B. Atienza was engaged by PhilimareShipping and Equipment Supply, as agent forTrans Ocean Liner Pte. Ltd. of Germany, based

on Singapore, to work as Third Mate on boardthe MV Tibati for the stipulated compensation ofUS$850.00 a month from January 20, 1981 to January 20, 1982. 1 The, Crew Agreement signedby the parties on January 3, 1981, provided forinsurance benefits "as per NSB StandardFormat" and was validated and approved by theNational Seamen Board on January 14,1981. 2

On May 12, 1981, Atienza died as a result of anaccident which befell him while working on thevessel in Bombay, India. 3 In due time, his father,

the herein petitioner, filed a claim for deathbenefits computed at the rate of 36 months timesthe seaman's monthly salary plus ten per centthereof in accordance with the Workmen'sCompensation Law of Singapore, for a total of$30,600.00. The, private respondents, whileadmitting liability, contended that this waslimited to only P40,000.00 under Section D(1) ofthe NSB Standard Format.

On November 6, 1984, the Philippine OverseasEmployment Administration sustained the

private respondent and held that the applicablelaw was Philippine law. 4 On appeal, thedecision was affirmed by the National LaborRelations Commission except that it increasedthe award to P75,000.00 pursuant to NSBMemorandum Circular No. 71, Series of 1981. 5

In the petition before us, we are asked to reversethe public respondent on the ground thatSingaporean law should have been applied inline with our ruling in Norse Management Co. v.National Seamen Board, 6 where the foreign law

was held controlling because it provided forgreater benefits for the claimant. For their part,the private respondents question the applicationof NSB Memorandum Circular No. 71, Series of1981, which they say became effective after theseaman's death. 7

On the first issue, our ruling is that Norse is notapplicable to the present petition. The, reason is



that in that case, it was specifically stipulated bythe parties in the Crew Agreement that"compensation shall be paid to employee inaccordance with and subject to the limitations ofthe Workmen's Compensation Act of thePhilippines or the Workmen's Insurance Law of

the registry of the vessel, whichever isgreater. 8 That was why the higher benefitsprescribed by the foreign law were awarded. Bycontrast, no such stipulation appears in theCrew Agreement now under consideration.Instead, it is clearly stated therein that theinsurance benefits shall be "as per NSB StandardFormat," in the event "of death of the seamanduring the term of his contract, over and abovethe benefits for which the PhilippineGovernment is liable under Philippine law. 9

The petitioner argues that the Standard Formatprescribed only the minimum benefits and doesnot preclude the parties from stipulating forhigher compensation. That may be true enough.But the point is that the parties in this case didnot provide for such higher benefits as theparties did in the Norse case. There was nostipulation in the Crew Agreement of January 3,1981, that the employee would be entitled towhichever greater insurance benefits wereoffered by either Philippine law or the foreignlaw; on the contrary, it was plainly provided

that insurance benefits would be determinedaccording to the NSB Standard Format then inforce. The consequence is that the petitionercannot now claim a higher award than thecompensation prescribed in the said format.

As We said in Bagong Filipinas OverseasCorporation v. NLRC : 10

We hold that the shipboardemployment contract iscontrolling in this case. Thecontract provides that thebeneficiaries of the seaman areentitled to P20,000.00 over andabove the benefits' for which thePhilippine Government is liableunder Philippine Law.

Hongkong law on workmen'scompensation is not the

applicable law. The, caseof Norse Management Co. v.National Seaman Board, G.R. No.54204, September 30, 1982, 117SCRA 486 cannot be a precedentbecause it was expressly

stipulated in the employmentcontract in that case that theworkmen's compensationpayable to the employee shouldbe in accordance withPhilippine Law or theWorkmen's Insurance Law ofthe country where the vessel isregistered "whichever isgreater."

The next issue involves the effectivity of NSB

Memorandum Circular No. 71, which appears tohave been retroactively applied by the NLRC inincreasing the compensation from P40,000.00The amended award was based by the POEA onNSB Memorandum Circular No. 46, whichbecame effective in 1979. 11 The NLRC,apparently laboring under the belief thatMemorandum Circular No. 71 was alreadyeffective at the time of the seaman's death onMay 12, 1981, increased the death benefits toP75,000.00 as provided thereunder. The fact,though, is that the new rule became effective

only in December 1981, as certified by the POEAitself, 12 or seven months after Atienza's fatalaccident.

On the petitioner's claim that the award shouldbe adjusted in view of the decrease in thepurchasing power of the Philippine peso, itsuffices to cite the following relevant ruling ofthe Court in Sta. Rita and Well Run Maritime SALtd. v. NLRC : 13

Regarding the third contentionof the petitioners, the recordsshow that when Sta. Rita diedon September 14, 1981, NSBMemorandum Circular No. 46(Series of 1979) was theapplicable law. Pursuant to thiscircular, in case of a seaman'sdeath during the terms of hiscontract, the company shall pay



his beneficiaries the amount ofP30,000.00. On November 18,1981 or more than one monthafter Sta. Rita's death theadministrative regulations wereamended to increase death

compensation for seamen toP50,000.00, effective December1, 1981.

Considering that the applicablelaw governing deathcompensation for seamen at thetime of Sta. Rita's death wasMemorandum Circular No. 46,Series of 1979, the petitioner'sliability should be limited toP30,000.00. Moreover, if

manning agents or shippingcorporations secure employer'sinsurance to cover theirliabilities for death, totaldisability and sickness ofofficers and ratings on boardforeign going vessels, the extentof the coverage is based on theapplicable law at the time. Itwould be unjust to compel themto pay benefits based on a lawnot yet in effect at the time the

contingency occurs.

WHEREFORE, the decision of the NLRC dated15 July 1985 is SET ASIDE and that of the POEAis REINSTATED, without any pronouncementas to costs. It is so ordered.

Narvasa, (Chairperson), Gancayco, Griñ;o-Aquinoand Medialdea, JJ., concur.

NORSE MANAGEMENT CO. (PTE) andPACIFIC SEAMEN SERVICES, INC.,

petitioners,

vs.

NATIONAL SEAMEN BOARD, HON.

CRESCENCIO M. SIDDAYAO, OSCAR M.

TORRES, REBENE C. CARRERA and

RESTITUTA C. ABORDO, respondents.

Facts:

Napoleon B. Abordo, the deceased husband of

private respondent Restituta C. Abordo, was the

Second Engineer of M.T. "Cherry Earl" when hedied from an apoplectic stroke in the course of

his employment with petitioner NORSE

MANAGEMENT COMPANY (PTE). The M.T.

"Cherry Earl" is a vessel of Singaporean

Registry. In her complaint for compensation

benefits filed before the National Seamen Board,

private respondent alleged that the amount of

compensation due her from petitioners should

be based on the law where the vessel is

registered. Petitioners contend that the law of

Singapore should not be applied in this casebecause the National Seamen Board cannot take

judicial notice of the Workmen's Insurance Law

of Singapore instead must be based on Board‘s

Memeorandum Circular No. 25. Ministry of

Labor and Employment ordered the petitioner

to pay jointly and severally the private

respondent. Petitioner appealed to the Ministry

of Labor but same decision. Hence, this petition.

Issue:

Whether or not the law of Singapore ought to be

applied in this case.

Held:

The SC denied the petition. It has always been

the policy of this Board, as enunciated in a long

line of cases, that in cases of valid claims for

benefits on account of injury or death while in

the course of employment, the law of thecountry in which the vessel is registered shall be

considered. In Section 5(B) of the Employment

Agreement between petitioner and respondent‘s

husband states that In the event of illness or

injury to Employee arising out of and in the

course of his employment and not due to his

own willful misconduct, EMPLOYER will



provide employee with free medical attention. If

such illness or injury incapacitates the

EMPLOYEE to the extent the EMPLOYEE's

services must be terminated as determined by a

qualified physician designated by the

EMPLOYER and provided such illness or injurywas not due in part or whole to his willful act,

neglect or misconduct compensation shall be

paid to employee in accordance with and subject

to the limitations of the Workmen's

Compensation Act of the Republic of the

Philippines or the Workmen's Insurance Law of

registry of the vessel whichever is greater.

Finally, Article IV of the Labor Code provides

that "all doubts in the implementation and

interpretation of the provisions of this code,

including its implementing rules and resolved infavor of labor.

avida v Dizon

Facts:Beginning 1993, a number of personal injurysuits were filed in different Texas state courts bycitizens of twelve foreign countries, includingthe Philippines. The thousands of plaintiffssought damages for injuries they allegedlysustained from their exposure to

dibromochloropropane (DBCP), a chemical usedto kill nematodes (worms), while working onfarms in 23 foreign countries. The cases wereeventually transferred to, and consolidated in,the Federal District Court for the SouthernDistrict of Texas, Houston Division. Thedefendants in the consolidated cases prayed forthe dismissal of all the actions under thedoctrine of forum non conveniens.

In a Memorandum Order, the Federal DistrictCourt conditionally granted the defendants‘

motion to dismiss provided the defendants:

(1) participated in expedited discovery in theUnited States

(2) either waived or accepted service of processand waived any other jurisdictional defense inany action commenced by a plaintiff in theseactions in his home country or the country in

which his injury occurred.

(3) waived any limitations-based defense thathas matured since the commencement of theseactions in the courts of Texas;

(4) stipulated that any discovery conductedduring the pendency of these actions may beused in any foreign proceeding to the sameextent as if it had been conducted in proceedingsinitiated there; and

(5) submitted an agreement binding them tosatisfy any final judgment rendered in favor ofplaintiffs by a foreign court.

In the event that the highest court of any foreigncountry finally affirms the dismissal for lack of

jurisdiction of an action commenced by aplaintiff in these actions in his home country orthe country in which he was injured, thatplaintiff may return to this court and, uponproper motion, the court will resume jurisdiction over the action as if the case hadnever been dismissed for.

Case 1 (125078) and 2 (125598):

336 plaintiffs from General Santos City filed a Joint Complaint in the RTC of General SantosCity. Named as defendants therein were: ShellOil Co. (SHELL); Dow Chemical Co. (DOW);Occidental Chemical Corp. (OCCIDENTAL);Dole Food Co., Inc., Dole Fresh Fruit Co.,Standard Fruit Co., Standard Fruit andSteamship Co. (hereinafter collectively referredto as DOLE); Chiquita Brands, Inc. and ChiquitaBrands International, Inc. (CHIQUITA); DelMonte Fresh Produce N.A. and Del MonteTropical Fruit Co. (hereinafter collectivelyreferred to as DEL MONTE); Dead Sea BromineCo., Ltd.; Ameribrom, Inc.; BromineCompounds, Ltd.; and Amvac Chemical Corp.

(The aforementioned defendants are hereinaftercollectively referred to as defendant companies.)

NAVIDA, et al., prayed for the payment ofdamages in view of the illnesses and injuries tothe reproductive systems which they allegedlysuffered because of their exposure to DBCP.They claimed, among others, that they wereexposed to this chemical during the early 1970‘s



up to the early 1980‘s when they used the samein the banana plantations where they worked at;and/or when they resided within theagricultural area where such chemical was used.NAVIDA, et al., claimed that their illnesses andinjuries were due to the fault or negligence of

each of the defendant companies in that theyproduced, sold and/or otherwise put into thestream of commerce DBCP-containing products.According to NAVIDA, et al., they were allowedto be exposed to the said products, which thedefendant companies knew, or ought to haveknown, were highly injurious to the former‘shealth and well-being.

Without resolving the motions filed by theparties, the RTC of General Santos City issuedan Order dismissing the complaint. First, the

trial court determined that it did not have jurisdiction to hear the case because thesubstance of the cause of action as stated in thecomplaint against the defendant foreigncompanies cites activity on their part which tookplace abroad and had occurred outside andbeyond the territorial domain of the Philippines.These acts of defendants cited in the complaintincluded the manufacture of pesticides, theirpackaging in containers, their distributionthrough sale or other disposition, resulting intheir becoming part of the stream of commerce.The subject matter stated in the complaint andwhich is uniquely particular to the present case,consisted of activity or course of conductengaged in by foreign defendants outsidePhilippine territory, hence, outside and beyondthe jurisdiction of Philippine Courts, includingthe present Regional Trial Court.

Second, the RTC of General Santos Cityadjudged that NAVIDA, et al., were coerced intosubmitting their case to the Philippine courts,merely to comply with the U.S. District Court‘sOrder and in order to keep open to the plaintiffs

the opportunity to return to the U.S. DistrictCourt.

Third, the trial court ascribed little significanceto the voluntary appearance of the defendantcompanies. Defendants have appointed theiragents authorized to accept service ofsummons/processes in the Philippines pursuantto the agreement in the U.S. court that

defendants will voluntarily submit to the jurisdiction of this court. While it is true that thiscourt acquires jurisdiction over persons of thedefendants through their voluntary appearance,it appears that such voluntary appearance of thedefendants in this case is conditional. Thus in

the ―Defendants‘ Amended AgreementRegarding Conditions of Dismissal for ForumNon Conveniens‖ filed with the U.S. DistrictCourt, defendants declared that ―(t)he authorityof each designated representative to acceptservice of process will become effective uponfinal dismissal of these actions by the Court‖.The decision of the U.S. District Courtdismissing the case is not yet final and executorysince both the plaintiffs and defendantsappealed therefrom. Consequently, since theauthority of the agent of the defendants in the

Philippines is conditioned on the finaladjudication of the case pending with the U.S.courts, the acquisition of jurisdiction by thiscourt over the persons of the defendants is alsoconditional.

Fourth, the RTC of General Santos City ruledthat the act of NAVIDA, et al., of filing the casein the Philippine courts violated the rules onforum shopping and litis pendencia. This courtfrowns upon the fact that the parties herein areboth vigorously pursuing their appeal of thedecision of the U.S. District court dismissing thecase filed thereat. To allow the parties to litigatein this court when they are actively pursuing thesame cases in another forum, violates the rule on‗forum shopping‘ so abhorred in this jurisdiction. Moreover, the filing of the case inthe U.S. courts divested this court of its own jurisdiction. This court takes note that the U.S.District Court did not decline jurisdiction overthe cause of action. The case was dismissed onthe ground of forum non conveniens, which isreally a matter of venue. By taking cognizance ofthe case, the U.S. District Court has, in essence,

concurrent jurisdiction with this court over thesubject matter of this case. It is settled that initialacquisition of jurisdiction divests another of itsown jurisdiction.

Case 3 (126654), 4 (127856), 5(128398)

Another joint complaint for damages againstSHELL, DOW, OCCIDENTAL, DOLE, DEL



MONTE, and CHIQUITA was filed beforeBranch 16 of the RTC of Davao City by 155plaintiffs from Davao City. They alleged that asworkers in the banana plantation and/or asresidents near the said plantation, they weremade to use and/or were exposed to

nematocides, which contained the chemicalDBCP. According to ABELLA, et al., suchexposure resulted in ―serious and permanentinjuries to their health, including, but notlimited to, sterility and severe injuries to theirreproductive capacities.‖

The RTC of Davao City, however, junked CivilCases. The Court however is constrained todismiss the case at bar not solely on the basis ofthe above but because it shares the opinion oflegal experts given in the interview made by the

Inquirer in its Special report ―Pesticide CauseMass Sterility,‖ Former Justice SecretaryDemetrio Demetria in a May 1995 opinion said:The Philippines should be an inconvenientforum to file this kind of damage suit againstforeign companies since the causes of actionalleged in the petition do not exist underPhilippine laws. There has been no decided casein Philippine Jurisprudence awarding to thoseadversely affected by DBCP. This means there isno available evidence which will prove anddisprove the relation between sterility andDBCP.

Eventually, the cases reached the SC!

Present case:

The main contention of the petitioners statesthat the allegedly tortious acts and/or omissionsof defendant companies occurred withinPhilippine territory. Said fact allegedlyconstitutes reasonable basis for our courts toassume jurisdiction over the case.

DOLE similarly maintains that the actsattributed to defendant companies constitute aquasi-delict, which falls under Article 2176 ofthe Civil Code. DOLE also argues that if indeedthere is no positive law defining the alleged actsof defendant companies as actionable wrong,Article 9 of the Civil Code dictates that a judgemay not refuse to render a decision on theground of insufficiency of the law. The court

may still resolve the case, applying the customsof the place and, in the absence thereof, thegeneral principles of law.

CHIQUITA (another petitioner) argues that thecourts a quo had jurisdiction over the subject

matter of the cases filed before them.CHIQUITA avers that the pertinent matter is theplace of the alleged exposure to DBCP, not theplace of manufacture, packaging, distribution,sale, etc., of the said chemical. This is inconsonance with the lex loci delicti commisitheory in determining the situs of a tort, whichstates that the law of the place where the allegedwrong was committed will govern the action.CHIQUITA and the other defendant companiesalso submitted themselves to the jurisdiction ofthe RTC by making voluntary appearances and

seeking for affirmative reliefs during the courseof the proceedings.

Issue:Whether or not the RTCs have jurisdiction overthe subject matter in these cases.

Held: Yes.

1. The rule is settled that jurisdiction over thesubject matter of a case is conferred by law andis determined by the allegations in thecomplaint and the character of the relief sought,irrespective of whether the plaintiffs are entitledto all or some of the claims asserted therein.Once vested by law, on a particular court orbody, the jurisdiction over the subject matter ornature of the action cannot be dislodged byanybody other than by the legislature throughthe enactment of a law.

At the time of the filing of the complaints, the jurisdiction of the RTC in civil cases under BatasPambansa Blg. 129, as amended by Republic ActNo. 7691, was:

In all other cases in which the demand,exclusive of interest, damages of whatever kind,attorney‘s fees, litigation expenses, and costs orthe value of the property in controversy exceedsOne hundred thousand pesos (P100,000.00) or,in such other cases in Metro Manila, where thedemand, exclusive of the abovementioned itemsexceeds Two hundred thousand pesos



(P200,000.00).

Supreme Court Administrative Circular No. 09-94, states:The exclusion of the term ―damages of whateverkind‖ in determining the jurisdictional amount

under Section 19 (8) and Section 33 (1) of B.P.Blg. 129, as amended by R.A. No. 7691, appliesto cases where the damages are merelyincidental to or a consequence of the main causeof action. However, in cases where the claim fordamages is the main cause of action, or one ofthe causes of action, the amount of such claimshall be considered in determining the jurisdiction of the court.

It is clear that the claim for damages is the maincause of action and that the total amount sought

in the complaints is approximately P2.7 millionfor each of the plaintiff claimants. The RTCsunmistakably have jurisdiction over the casesfiled in General Santos City and Davao City.

2. The jurisdiction of the court cannot be madeto depend upon the defenses set up in theanswer or upon the motion to dismiss, forotherwise, the question of jurisdiction wouldalmost entirely depend upon the defendants.What determines the jurisdiction of the court isthe nature of the action pleaded as appearingfrom the allegations in the complaint. Theaverments therein and the character of the reliefsought are the ones to be consulted.

Clearly then, the acts and/or omissionsattributed to the defendant companies constitutea quasi-delict which is the basis for the claim fordamages filed by NAVIDA, et al., and ABELLA,et al., with individual claims of approximatelyP2.7 million for each plaintiff claimant, whichobviously falls within the purview of the civilaction jurisdiction of the RTCs.

3. It is, therefore, error on the part of the courts aquo when they dismissed the cases on theground of lack of jurisdiction on the mistakenassumption that the cause of action narrated byNAVIDA, et al., and ABELLA, et al., took placeabroad and had occurred outside and beyondthe territorial boundaries of the Philippines, i.e.,―the manufacture of the pesticides, theirpackaging in containers, their distribution

through sale or other disposition, resulting intheir becoming part of the stream of commerce,‖and, hence, outside the jurisdiction of the RTCs.

Certainly, the cases below are not criminal caseswhere territoriality, or the situs of the act

complained of, would be determinative of jurisdiction and venue for trial of cases. Inpersonal civil actions, such as claims forpayment of damages, the Rules of Court allowthe action to be commenced and tried in theappropriate court, where any of the plaintiffs ordefendants resides, or in the case of a non-resident defendant, where he may be found, atthe election of the plaintiff.

In a very real sense, most of the evidencerequired to prove the claims of NAVIDA, et al.,

and ABELLA, et al., are available only in thePhilippines. First, plaintiff claimants are allresidents of the Philippines, either in GeneralSantos City or in Davao City. Second, thespecific areas where they were allegedlyexposed to the chemical DBCP are within theterritorial jurisdiction of the courts a quowherein NAVIDA, et al., and ABELLA, et al.,initially filed their claims for damages. Third,the testimonial and documentary evidence fromimportant witnesses, such as doctors, co-workers, family members and other members ofthe community, would be easier to gather in thePhilippines.

----Re: Jurisdiction over the person

The RTC of General Santos City and the RTC ofDavao City validly acquired jurisdiction overthe persons of all the defendant companies. Allparties voluntarily, unconditionally andknowingly appeared and submitted themselvesto the jurisdiction of the courts a quo. All thedefendant companies submitted themselves to

the jurisdiction of the courts a quo by makingseveral voluntary appearances, by praying forvarious affirmative reliefs, and by activelyparticipating during the course of theproceedings below.

In line herewith, this Court, in Meat PackingCorporation of the Philippines v.Sandiganbayan, held that jurisdiction over the



person of the defendant in civil cases is acquiredeither by his voluntary appearance in court andhis submission to its authority or by service ofsummons. Furthermore, the active participationof a party in the proceedings is tantamount to aninvocation of the court‘s jurisdiction and a

willingness to abide by the resolution of thecase, and will bar said party from later onimpugning the court or body‘s jurisdiction.

--- Jurisdiction v Exercise of Jurisdiction

It may also be pertinently stressed that―jurisdiction‖ is different from the ―exercise of

jurisdiction.‖ Jurisdiction refers to the authorityto decide a case, not the orders or the decisionrendered therein. Accordingly, where a court

has jurisdiction over the persons of thedefendants and the subject matter, as in the caseof the courts a quo, the decision on all questionsarising therefrom is but an exercise of such jurisdiction. Any error that the court maycommit in the exercise of its jurisdiction ismerely an error of judgment, which does notaffect its authority to decide the case, much lessdivest the court of the jurisdiction over the case.

----Re: Bad faith in filing cases to procure adismissal and to allow petitioners to return tothe forum of their choice.

This Court finds such argument much toospeculative to deserve any merit.

It must be remembered that this Court does notrule on allegations that are unsupported byevidence on record. This Court does not rule onallegations which are manifestly conjectural, asthese may not exist at all. This Court deals withfacts, not fancies; on realities, not appearances.

* We REMAND the records of this case to therespective Regional Trial Courts of origin forfurther and appropriate proceedings in line withthe ruling herein that said courts have jurisdiction over the subject matter of theamended complaints.

conflicts - outline 3

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