Hilton v. Guyot159 U.S. 113 (1895)

FACTS:Henry Hilton and William Libbey, under the firm name of A. T. Stewart & Co., carried on a general business as merchants in the cities of New York and Paris, and elsewhere, and maintained a regular store and place of business in Paris. During the same time Charles Fortin & Co. carried on the manufacture and sale of gloves in Paris, and the two firms had there large dealings in that business.

Controversies arose in the adjustment of accounts between them.

Five suits were brought by Fortin & Co. against Stewart & Co. for sums alleged to be due, and three suits by Stewart & Co. against Fortin & Co., in the tribunal of commerce of the department of the Seine, a judicial tribunal or court, organized and existing under the laws of France, sitting in Paris, and having jurisdiction of suits and controversies between merchants or traders growingout of commercial dealings between them.

Final judgment was rendered in favor of Fortin & Co. and it was allowed to recover from Stewart & Co. various sums, arising out of the dealings between them.

Appeals were taken by both parties from that judgment to the court of appeals of Paris, an appellate court of record, organized and existing under the laws of the republic of France, and having jurisdiction of appeals from the final judgments of the tribunal of commerce of the department of the Seine. Said court of appeal, by a final judgment, dismissed the appeal of the defendants, confirmed the judgment of the lower court in favor of the plaintiffs.

Gustave Bertin Guyot had been duly appointed by the tribunal of commerce of the department of the Seine official liquidator of the firm of Fortin& Co., with full powers, for the verification and realization of its property, both real and personal, and to collect and cause to be executed the judgments aforesaid.

Guyot brought an action for the recovery of the sum of money rendered by the French courtin the circuit court of the United States for the Southern district of New York, against Hilton and Libbey, citizens of the United States and of the state of New York.

The defendants, in their answer, admitted the proceedings and judgments in the French courts, and that they gave up their business in France before the judgment on appeal, and had no property within the jurisdiction of France out of which that judgment could be collected.The answer further alleged that pending that litigation the defendants discovered gross frauds in the accounts of Fortin & Co., that the arbitrator and the tribunal declined to compel Fortin & Co. to produce their books and papers for inspection, and that, if they had been produced, the judgment would not have been obtained against the defendants.

ISSUE: Whether or not a judgment of a foreign nation’s court has conclusive effect when brought to the court of another nation.

HELD:No law has any effect, of its own force, beyond the limits of the sovereignty from whichits authority is derived. The extent to which the law of one nation, as put in force within itsterritory, whether by executive order, by legislative act, or by judicial decree shall be allowed tooperate within the dominion of another nation depends upon the comity of nations.

Comity, in the legal sense, is neither a matter of absolute obligation, nor of mere courtesy and good will. It is a recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or other persons who are under the protection of its laws.

It is needless to enumerate the instances which, by the general practice of civilized countries, the laws of the one will, by the comity of nations, be recognized and executed in another, where the rights of individuals are concerned.The comity thus extended to other nations is no impeachment of sovereignty. It is the voluntary act of the nation by which it is offered, and is inadmissible when contrary to its policy, or prejudicial to its interests. But it contributes so largely to promote justice between individuals, and to produce a friendly intercourse between the sovereignty to which they belong, that courts of justice have continually acted upon it, as a part of the voluntary law of nations. It is not the comity of the courts, but the comity of the nation, which is administered and ascertained in the same way, and guided by the same reasoning, by which all other principles of municipal law are ascertained and guided.

Comity is reciprocal. Comity cannot be afforded to foreign judgments when the country did not reciprocate comity.Because France did not recognize final judgments of the United States, and would try such judgments anew, judgments given by France would be given the same treatment. Therefore, the comity of the United States did not require the court to give conclusive effect to the judgments of the courts of France. Defendants could be granted a new trial. Hence, the judgment was reversed and the cause was remanded for a new trial.

002 Saudi Arabian Airlines v. CA[G.R. NUMBER 122191; 8 October 1998]TOPIC:

PONENTE: Quisumbing, J.

AUTHOR: CARAG, J.R.QUICK FACTS: There was an attempted rape against private respondent, but she was forced by Petitioner to drop the case. She was also later tried in Saudi due to the incorrect explanation of Petitioner’s legal officer. Petitioner filed a complaint for damages based on the actions of Petitioner, which arose the conflicts case.

FACTS: (chronological order)

1. Petitioner, Saudi Arabian Airlines (SAUDIA), hired respondent Milagros Morada as a Flight Attendant for its airlines. While on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals.

2. It was already morning when they returned to their hotels, and the three agreed to eat breakfast in the room of Thamer. Allah left on some pre-text, and shortly thereafter, Thamer attempted to rape Ms. Morada. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.

3. SAUDIA negotiated with the police for the immediate release of the detained crew members but did not succeed because Respondent Morada refused to cooperate. Morada learned later on that hrough the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDIA

4. Two years after the incident, Respondent Morada’s superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah.

5. The sudden meetings with Mr. Miniewy repeated two other times, both resulting in Ms. Morada being brought to a Saudi Court. The first was to sign a notice for her to appear in court, which she did not understand as it was written in Arabic. The second was the scheduled court appearance, wherein she was interrogated by a Saudi judge through an interpreter. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight. At the Inflight Service Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders.

6. Once again, a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition

7. Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights

8. Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without her being informed of the cause. Morada filed a complaint for damages against SAUDIA.

9. SAUDIA filed a motion to dismiss which was denied. SAUDIA filed a motion for reconsideration citing lack of jurisdiction, but the trial court denied the motion again. SAUDIA then filed a petition for certiorari, but it was again found by the Court of Appeals that the trial court had jurisdiction to try the case, since the case filed was based on Articles 19 and 21 of the Civil Code.

10. Petitioner SAUDIA claims before the Supreme Court a conflict of laws that must be settled at the outset. It maintains that private respondent's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule

ISSUE(S): (1) W/N the trial court has jurisdiction over the case

a. If yes, W/N the laws of the Philippines should applyHELD: Yes, Trial Court had jurisdiction, and it is the laws of the Philippines that should apply.RATIO:

1. A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a "foreign element". The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a "conflicts" case.

2. The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex form

3. In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner Saudia as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a "conflicts" situation to arise.

4. We thus find private respondent's assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here.

5. Sec. 1 and 2 of RA 7691 states: a. Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of

1980", is hereby amended to read as follows: i. Sec. 19.Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive jurisdiction:

xxx xxx xxx (8) In all other cases in which demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and cots or the value of the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the above-mentioned items exceeds Two hundred Thousand pesos (P200,000.00). (Emphasis ours)

b. Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court](a) xxx xxx xxx(b) Personal actions. — All other actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff resides, at the election of the plaintiff.

6. Based on these provisions, the Court found the RTC of Quezon having jurisdiction over the subject matter of the case, as well as being the proper veue.

7. Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed.

8. Weighing the relative claims of the parties, the court a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental unfairness to her.

9. Moreso, both Petitioner and Private Respondent submitted themselves under the jurisdiction of the trial court. The Petitioner has filed several motions praying for the dismissal of Morada's Amended Complaint. SAUDIA also filed an Answer In Ex Abundante Cautelam. What is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial court's jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.

10. The case of De Midgely vs. Ferandos, held that: When the appearance is by motion for the purpose of objecting to the jurisdiction of the court over the person, it must be for the sole and separate purpose of objecting to the jurisdiction of the court. If his motion is for any other purpose than to object to the jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of the court

11. Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City. Thus, we find that the trial court has jurisdiction over the case and that its exercise thereof, justified.

Substantive Issue:12. As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1)

What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation

13. Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as "characterization", or the "doctrine of qualification". It is the "process of deciding whether or

not the facts relate to the kind of question specified in a conflicts rule."14. Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. An essential

element of conflict rules is the indication of a "test" or "connecting factor" or "point of contact". Choice-of-law rules invariably consist of a factual relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing.

15. Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. These "test factors" or "points of contact" or "connecting factors" could be any of the following:

a. (1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;b. (2) the seat of a legal or juridical person, such as a corporation;c. (3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex

situs is decisive when real rights are involved;d. (4) the place where an act has been done, the locus actus, such as the place where a contract has been

made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts;

e. (5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised;

f. (6) the intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis;

g. (7) the place where judicial or administrative proceedings are instituted or done. The lex fori — the law of the forum — is particularly important because, as we have seen earlier, matters of "procedure" not going to the substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and

h. (8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.

16. Private respondent’s claim can be considered that of tort against SAUDIA since she claims that the "handing over" or "turning over" of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioner's purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of private respondent under the guise of petitioner's authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven.

17. Considering that the complaint in the court a quo is one involving torts, the "connecting factor" or "point of contact" could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here.

18. This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, "act with justice, give her due and observe honesty and good faith." Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort.

19. As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the "relationship" between the parties was centered here

CASE LAW/ DOCTRINE: Considering that the complaint in the court a quo is one involving torts, the "connecting factor" or "point of contact" could be the place or places where the tortious conduct or lex loci actus occurred

DISSENTING/CONCURRING OPINION(S):

LWV Construction vs. DupoFacts1. LWV Construction Corporation is a domestic corporation which recruits Filipino workers. It hired Marcelo B. Dupo as Civil Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil Group/ Establishment (MMG)

2. 26 February 1992- Dupo signed his first overseas employment contract, renewable after 1 yr. It was renewed 5 times on 10 May 1993, 16 November 1994, 22 January 1996, 14 April 1997 and 26 March 1998. All of these were fixed period contracts for 1 yr. The 6th and last contract stated that Dupo's employment starts upon reporting to work and ends upon leaving the work site. Dupo left Saudi Arabia on 30 April 1999 and arrived on PH on 1 May 1999.

3. 28 May 1999- Dupo informed MMG that he needs to extend his vacation because his son was hospitalized. He also sought promotion with salary adjustment. MMG informed Dupo that his promotion is subject to management's review; his services still needed and he was issued a plane ticket to return to Saudi Arabia on 31 May 1999. His decision regarding his employment must be made within 7 days otherwise MMG " will be compelled to cancel his slot."

4. 6 July 1999- Dupo resigned and stated in his letter that he is entitled for a long service award since he stayed with the company for more than 5 yrs; 7yrs to be exact. This is stated under Saudi Arabia Law.

5. 7 December 2000- Dupo followed up his claim for long service award, MMG did not respond.

6. 11 December 2000- Dupo filed complaint for payment of service award against MMG before NLRC. LWV offered payment and prescription as defenses. It claimed that MMg pays workers Service Award on Severance Pay every conclusion of their Labor Contracts pursuant to Article 87 of Saudi Labor Law. It also added that Article 13 of the Saudi Labor Law to enforce payment of service award must be filed within 1 yr from the termination of a labor contract for a specific period. Dupo filed his complaint 1yr 7mo after his 6th contract ended.

7. 18 June 2001- Labor Arbiter ordered LWV to pay Dupo longevity pay and attorney's fees. LWV appealed; NLRC dismissed. LWV appealed to CA; CA affirmed NLRC decision. MR denied as well.

Issue/HeldWhether or not CA erred in ruling that Dupo is entitled to service or longevity pay under the Saudi Labor Law.

Yes. Petition granted. CA decision reversed.

Article 87 grants a service reward or severance pay every conclusion of their labor contracts.

Service reward is the same as severance pay and longevity pay in this case and therefore, Dupo already received it, as presented in his position paper. His long service award or longevity pay has the same formula stated in Article 87, i.e. 1/2 pay per year of service + 1 month pay per year after 5 years of service.

Article 72 of Saudi Labor Law also states that Labor Contract concluded for a specified period shall terminate upon expiry of its term. If both parties continue to enforce the contract, thereafter, it shall be considered renewed for an unspecified period.

Regarding Dupo's claim that he was offered US$ 12,640.33 as longevity pay before he returned to PH on 1 May 1999, he was not candid on this since this was only engrained in his mind and he only recomputed this as stated in his resignation letter. His monthly compensation wad SR 5438/ mo not SR 10248.92/ mo. With this, lower courts had failed to examine this part.

As to prescription period, Art 291 of PH labor Court will apply not Article 13 of Saudi Labor Law. However this is already moot and academic.

HASEGAWA v. KITAMURAG.R. No. 149177. November 23, 2007TOPIC:PONENTE:Nachura, J.

AUTHOR:JadeNOTES: (if applicable)

Petition for review on certiorari under Rule 45

FACTS: 30 March 1999 – Nippon Engineering Consultants Co., Ltd. (Nippon) is a Japanese consultancy firm providing

technical and management support in infrastructure projects of foreign governments. Nippon entered into an Independent Contractor Agreement (ICA) with Minoru Kitamura, a Japanese national

permanently residing in the Philippines. The agreement provides that Kitamura was to extend professional services to Nippon for a year starting on 1 April

1999. Nippon assigned Kitamura to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the

Philippines, following Nippon’s consultancy contract with the Philippine Government. When the STAR Project was almost complete, DPWH engaged Nippon on 28 January 2000 for the detailed

engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project. Kitamura was named as the project manager in the contract’s appendix. 28 February 2000 – Kazuhiro Hasegawa, Nippon’s general manager for International Division, informed Kitamura that

Nippon had no more intention of automatically renewing his contract and that his services would be engaged by the company only up to the substantial completion of the STAR Project on 31 March 2000, in time for his contract’s expiration.

Threatened with impending unemployment, Kitamura requested a negotiation conference through his lawyer and demanded to be assigned to the BBRI Project.

Nippon insisted that his contract was for a fixed term and it had already expired. Nippon also refused to negotiate for the renewal of his contract.

Because there was no positive response from Nippon and Hasegawa, Kitamura initiated a civil case for specific performance and damages with the RTC of Lipa City (1 June 2000).

Hasegawa and Nippon contended that the contract had been perfected in Japan and executed by and between Japanese nationals. They moved to dismiss Kitamura’s complaint for lack of jurisdiction. They asserted that Kitamura’s complaint could only be heard in the proper courts of Japan, following the principles of lex loci celebrationis and lexcontractus.

20 June 2000 – DPWH approved Nippon’s request for the replacement of Kitamura by a certain Kotake in the BBRI Project.

29 June 2000 – the RTC denied the motion to dismiss and subsequently denied the motion for reconsideration. The RTC invoked the ruling in Insular Govt. v. Frank – matters connected with the performance of contracts are regulated by the law prevailing at the place of performance.

14 August 2000 - Hasegawa and Nippon filed a Petition for Certiorari under Rule 65 with the CA

23 August 2000 – the CA dismissed the petition for lack of statement of material dates and for insufficient verification and certification against forum shopping.

20 September 2000 – the CA issued an Entry of Judgment Hasegawa and Nippon filed with the CA on 19 September 2000 a 2 nd petition for certiorari under Rule 65, which

substantially raised the same issues as those in the 1st. This time, the petition already stated the material dates and attached the proper verification and certification.

18 April 2001 – the CA rendered a decision. It did not find grave abuse of discretion in the RTC’s denial of the motion to dismiss. The CA ruled that the principle of lex loci celebrationis was not applicable because the pleadings did not raise the validity of the written agreement as an issue. It declared that the RTC was correct in applying the principle of lex loci solutionis.

CA also denied petitioners’ motion for reconsideration.

ISSUE(S):

Whether or not the subject matter jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lexcontractus, the "state of the most significant relationship rule," or forum non conveniens.

HELDThe RTC is vested by law with the power to entertain and hear the civil case filed by respondent; the grounds raised by petitioners to assail jurisdiction are inappropriate.

The trial and appellate courts correctly denied the petitioners’ motion to dismiss. Petition for review on certiorari is dismissed.RATIO:

Procedural Issue – The CA dismissed the 1st because of the petition’s defective certification of non-forum shopping, verification and statement of

material dates. The dismissal being without prejudice, petitioners can re-file the petition or file a 2 nd petition attaching thereto the appropriate verification and certification and stating the material dates within the prescribed period. The dismissal of a case without prejudice signifies the absence of a decision on the merits and does not bar another action involving the same parties, on the same subject matter and theory. It has no res judicata effect. An omission in the certificate of non-forum shopping about any event that will not constitute res judicata and litispendentia, as in the present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils sought to be prevented by the said certificate are no longer present.

Kitamura assailed the validity of the authorization given to Hasegawa to verify and certify on behalf of Nippon. It is true that the authorization attached to the 2nd petition for certiorari and to the instant petition for review is limited in scope because its wordings indicate that Hasegawa’s authority was to sign for and act on behalf of Nippon only in the petition filed with the CA. However, the Court liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a subsequent fulfillment of the requirements have been made. Petitioners explained their misgivings sufficiently and appended to their Reply an updated authorization for Hasegawa on behalf of Nippon in the instant petition and the Court found it as sufficient compliance with the Rules. However, the defect in the verification and certification cannot be treated liberally. Though there was an updated authorization for Hasegawa, it was only issued by Nippon’s president and CEO and not by the company’s board of directors. Corporate powers are exercised by the board of directors, thus no person, not even its officers, can bind the corporation, in the absence of authority from the board. Considering that Hasegawa verified and certified the petition only on his behalf and not on behalf of Nippon, the petition has to be denied (Loquias v. Office of the Ombudsman).

Petitioners incorrectly filed a Rule 65 petition to question the RTC’s denial of their motion to dismiss, which is interlocutory and

cannot be the subject of the extraordinary petition for certiorari or mandamus. The correct recourse is to file an answer and to interpose as defenses the objections raised in the motion, proceed to trial, an in case of an adverse decision, to elevate the entire case by appeal in due course.

Substantive Issue – Petitioners asserted that the RTC of Lipa City is an inconvenient forum and questioned its jurisdiction to hear and

resolved the case filed by Kitamura. The subject ICA of the case was entered into and perfected in Tokyo, Japan by Japanese nationals, and written wholly in Japanese language, thus the local courts have no substantial relationship to the parties following the state of the most significant relationship rule in Private International Law.

Petitioners adopted an additional but different theory when they raised the case to the CA. In the motion to dismiss filed with the RTC, they merely argued that the applicable law which will determine the validity of Kitamura’s claim is the law of Japan, following the principles of lex loci celebrationis and lexcontractus. The petition for certiorari invoked the defense of forum non conveniens. In this petition for review, they dropped their other arguments and maintained the forum non conveniens defense, and introduced their new argument that the applicable principle is the state of the most significant relationship ship. Note: the Court did not deny the petition on the basis of the change in theory but this part is only to point out petitioners’ inconstancy in their arguments.

The judicial resolution of conflicts problems, 3 consecutive phases and questions are involved:o Jurisdiction – Where can or should litigation be initiated? Jurisdiction considers whether it is fair to cause

a defendant to travel to this state; the power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law.

o Choice of law – Which law will the court apply? Choice of law asks the question whether the application of a substantive law which will determine the merits of the case is fair to both parties.

o Recognition and enforcement of judgments – Where can the resulting judgment be enforced? While jurisdiction and the choice of the lexfori will often coincide, the “minimum contacts” for one do not always

provide the necessary “significant contacts” for the other. The question of whether the law of a state can be applied to a transaction is different from the question of whether

the courts of that state have jurisdiction to enter a judgment. The issue of this case is only the 1st phase – Jurisdiction. For a court to validly exercise its power to adjudicate a

controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the subject of the litigation. In assailing the trial court's jurisdiction, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes the court. It is given only by law and in the manner prescribed by law. It is further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. To succeed in its motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim, the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims.

Petitioners’ motion to dismiss do not claims that the trial court is not properly vested by the law with jurisdiction to hear the case. The civil case filed by Kitamura – action for specific performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City. Petitioners raised as grounds to question the RTC’s jurisdiction over the subject matter are the principles of lex loci celebrationis and lexcontractus and the state of the most significant relationship rule – and petitioners’ invocation of such grounds was unsound.

Lex loci celebrationis relates to the "law of the place of the ceremony” or the law of the place where a contract is made.

The doctrine of lexcontractus or lex loci contractusmeans the "law of the place where a contract is executed or to be performed."It controls the nature, construction, and validity of the contractand it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly.

Under the "state of the most significant relationship rule," to ascertain what state law to apply to a dispute, the court

should determine which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties. This rule takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved.

The 3 principles raised a grounds to question the trial court’s jurisdiction over the subject matter of the case are principles/rules proper for the 2nd phase – the choice of law. They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem. As the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for.

Invocation of the choice-of-law rules was premature. It only exposed the fact that they have not yet pointed out any conflict between the laws of Japan and of the Philippines. Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules.Also, when the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence of such law must be pleaded and proved.

When a conflicts case involving a foreign element is brought before a court or administrative agency, there are 3 alternatives open to the court or administrative agency in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into account or apply the law of some other State or States.

The court’s power to hear cases and controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding rights provided by foreign sovereigns.

Forum non conveniens cannot be used to deprive the trial court of its jurisdiction. It is not a proper basis for a motion to dismiss as it is not included as ground per Rule 16 of the Rules of Court. Also, whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. In this case, the RTC decided to assume jurisdiction. Lastly, the propriety of dismissing a case based on this principle requires a factual determination. this principle is more properly considered a matter of defense.

CASE LAW/ DOCTRINE:

Loquias v. Office of the Ombudsman - Substantial compliance will not suffice in a matter that demands strict observance of the Rules.While technical rules of procedure are designed not to frustrate the ends of justice, nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court dockets.DISSENTING/CONCURRING OPINION(S):

HASEGAWA v. KITAMURA

 Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the

April 18, 2001 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001

Resolution[2] denying the motion for reconsideration thereof.

 

          On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese

consultancy firm providing technical and management support in the infrastructure projects of foreign

governments,[3] entered into an Independent Contractor Agreement (ICA) with respondent Minoru

Kitamura, a Japanese national permanently residing in the Philippines. [4] The agreement provides that

respondent was to extend professional services to Nippon for a year starting on April 1, 1999.[5]  Nippon then assigned respondent to work as the project manager of the Southern Tagalog Access Road

(STAR) Project in the Philippines, following the company's consultancy contract with the Philippine

Government.[6]

 

          When the STAR Project was near completion, the Department of Public Works and Highways

(DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed

engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project.[7] Respondent was named as the project manager in the contract's Appendix 3.1.[8]

 

          On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its

International Division, informed respondent that the company had no more intention of automatically

renewing his ICA. His services would be engaged by the company only up to the substantial completion

of the STAR Project on March 31, 2000, just in time for the ICA's expiry.[9]

 

          Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation

conference and demanded that he be assigned to the BBRI project. Nippon insisted that respondent’s

contract was for a fixed term that had already expired, and refused to negotiate for the renewal of

the ICA.[10]

 

          As he was not able to generate a positive response from the petitioners, respondent consequently

initiated on June 1, 2000Civil Case No. 00-0264 for specific performance and damages with

the Regional Trial Court of Lipa City.[11]

 

          For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and

between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that

the claim for improper pre-termination of respondent's ICA could only be heard and ventilated in the

proper courts of Japan following the principles of lex loci celebrationisand lex contractus.[12]

 

          In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of

Kitamura by a certain Y. Kotake as project manager of the BBRI Project.[13]

 

          On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank[14] that matters

connected with the performance of contracts are regulated by the law prevailing at the place of

performance,[15] denied the motion to dismiss.[16]   The trial court subsequently denied petitioners' motion

for reconsideration,[17] prompting them to file with the appellate court, on August 14, 2000,

their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].[18] On August 23,

2000, the CA resolved to dismiss the petition on procedural grounds—for lack of statement of material

dates and for insufficient verification and certification against forum shopping. [19] An Entry of Judgment

was later issued by the appellate court on September 20, 2000.[20]

 

          Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within

the reglementary period, asecond Petition for Certiorari under Rule 65 already stating therein the

material dates and attaching thereto the proper verification and certification. This second petition, which

substantially raised the same issues as those in the first, was docketed as CA-G.R. SP No.60827.[21] 

 

          Ruling on the merits of the second petition, the appellate court rendered the assailed April 18,

2001 Decision[22] finding no grave abuse of discretion in the trial court's denial of the motion to dismiss.

The CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the case,

because nowhere in the pleadings was the validity of the written agreement put in issue. The CA thus

declared that the trial court was correct in applying instead the principle of lex loci solutionis.[23]

 

          Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25,

2001 Resolution.[24]

 

          Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant

Petition for Review onCertiorari[25] imputing the following errors to the appellate court:

 A.        THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT

SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN. B.         THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.[26]

  

          The pivotal question that this Court is called upon to resolve is whether the subject matter

jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts

executed outside the country by foreign nationals may be assailed on the principles of  lex loci

celebrationis, lex contractus, the “state of the most significant relationship rule,” or forum non

conveniens.

 

          However, before ruling on this issue, we must first dispose of the procedural matters raised by the

respondent.

 

          Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has

already barred the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally raising

the same issues as those in the first one) and the instant petition for review thereof.

 

          We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's

defective certification of non-forum shopping, it was a dismissal without prejudice. [27] The same holds

true in the CA's dismissal of the said case due to defects in the formal requirement of verification [28] and

in the other requirement in Rule 46 of the Rules of Court on the statement of the material dates. [29] The

dismissal being without prejudice, petitioners can re-file the petition, or file a second petition attaching

thereto the appropriate verification and certification—as they, in fact did—and stating therein the material

dates, within the prescribed period[30] in Section 4, Rule 65 of the said Rules.[31]

 

          The dismissal of a case without prejudice signifies the absence of a decision on the merits and

leaves the parties free to litigate the matter in a subsequent action as though the dismissed action had not

been commenced. In other words, the termination of a case not on the merits does not bar another action

involving the same parties, on the same subject matter and theory.[32]

 

          Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even

if petitioners still indicated in the verification and certification of the second certiorari petition  that the

first had already been dismissed on procedural grounds, [33] petitioners are no longer required by the Rules

to indicate in their certification of non-forum shopping in the instant petition for review of the second

certiorari petition, the status of the aforesaid first petition before the CA. In any case, an omission in the

certificate of non-forum shopping about any event that will not

constitute res judicata and litis pendentia, as in the present case, is not a fatal defect.  It will not warrant

the dismissal and nullification of the entire proceedings, considering that the evils sought to be prevented

by the said certificate are no longer present.[34]

 

          The Court also finds no merit in respondent's contention that petitioner Hasegawa is only

authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the

instant petition. True, the Authorization[35] dated September 4, 2000, which is attached to the

second certiorari petition and which is also attached to the instant petition for review, is limited in scope

—its wordings indicate that Hasegawa is given the authority to sign for and act on behalf of the company

only in the petition filed with the appellate court, and that authority cannot extend to the instant petition

for review.[36] In a plethora of cases, however, this Court has liberally applied the Rules or even suspended

its application whenever a satisfactory explanation and a subsequent fulfillment of the requirements have

been made.[37] Given that petitioners herein sufficiently explained their misgivings on this point and

appended to their Reply[38] an updated Authorization[39] for Hasegawa to act on behalf of the company in

the instant petition, the Court finds the same as sufficient compliance with the Rules.

 

          However, the Court cannot extend the same liberal treatment to the defect in the verification and

certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act

on behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent

August 17, 2001 Authorization were issued only by Nippon's president and chief executive officer, not by

the company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by

the board of directors; thus, no person, not even its officers, can bind the corporation, in the absence of

authority from the board.[40] Considering that Hasegawa verified and certified the petition only on his

behalf and not on behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office

of the Ombudsman.[41] Substantial compliance will not suffice in a matter that demands strict observance

of the Rules.[42] While technical rules of procedure are designed not to frustrate the ends of justice,

nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent

the clogging of court dockets.[43]

 

          Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition  to question the

trial court's denial of their motion to dismiss. It is a well-established rule that an order denying

a motion to dismiss is interlocutory,

and cannot be the subject ofthe extraordinary petition for certiorari or mandamus.  The appropriate

recourse is to file an answer and to interpose as defenses the objections raised in the motion, to proceed to

trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course. [44] While there

are recognized exceptions to this rule,[45] petitioners' case does not fall among them.

 

          This brings us to the discussion of the substantive issue of the case.

 

          Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to

hear and resolve the civil case for specific performance and damages filed by the respondent.

The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals,

and written wholly in the Japanese language. Thus, petitioners posit that local courts have no substantial

relationship to the parties[46] following the [state of the] most significant relationship rule in Private

International Law.[47]

 

          The Court notes that petitioners adopted an additional but different theory when they elevated the

case to the appellate court. In the Motion to Dismiss[48] filed with the trial court, petitioners never

contended that the RTC is an inconvenient forum. They merely argued that the applicable law which will

determine the validity or invalidity of respondent's claim is that of Japan, following the principles of lex

loci celebrationis and lex contractus.[49] While not abandoning this stance in their petition before the

appellate court, petitioners on certiorari significantly invoked the defense of forum non conveniens.[50] On

petition for review before this Court, petitioners dropped their other arguments, maintained the forum non

conveniens defense, and introduced their new argument that the applicable principle is the [state of the]

most significant relationship rule.[51]

 

          Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in

theory, as explained inPhilippine Ports Authority v. City of Iloilo.[52] We only pointed out petitioners'

inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws principles.

 

          To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved:

jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to these phases

are the following questions: (1) Where can or should litigation be initiated? (2) Which law will the court

apply? and (3) Where can the resulting judgment be enforced?[53]

 

          Analytically, jurisdiction and choice of law are two distinct concepts. [54] Jurisdiction considers

whether it is fair to cause a defendant to travel to this state; choice of law asks the further question

whether the application of a substantive law which will determine the merits of the case is fair to both

parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to

apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the “minimum

contacts” for one do not always provide the necessary “significant contacts” for the other. [55] The question

of whether the law of a state can be applied to a transaction is different from the question of whether the

courts of that state have jurisdiction to enter a judgment.[56]

 

          In this case, only the first phase is at issue—jurisdiction. Jurisdiction, however, has various aspects.

For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the

plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of

the case and, in cases involving property, over the res or the thing which is the subject of the litigation.

[57] In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter

jurisdiction.

 

                Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority

which establishes and organizes the court. It is given only by law and in the manner prescribed by law.

[58] It is further determined by the allegations of the complaint irrespective of whether the plaintiff is

entitled to all or some of the claims asserted therein.[59] To succeed in its motion for the dismissal of an

action for lack of jurisdiction over the subject matter of the claim, [60] the movant must show that the court

or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the

claims.[61]

 

                In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not

properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-

0264 for specific performance and damages is one not capable of pecuniary estimation and is properly

cognizable by the RTC of Lipa City.[62] What they rather raise  as grounds to question subject matter

jurisdiction are the principles of lex loci celebrationis and lex contractus, and the “state of the most

significant relationship rule.”

 

          The Court finds the invocation of these grounds unsound.

 

          Lex loci celebrationis relates to the “law of the place of the ceremony” [63] or the law of the place

where a contract is made.[64] The doctrine of lex contractus  or lex loci contractus means the “law of the

place where a contract is executed or to be performed.” [65] It controls the nature, construction, and validity

of the contract[66] and it may pertain to the law voluntarily agreed upon by the parties or the law intended

by them either expressly or implicitly.[67] Under the “state of the most significant relationship rule,” to

ascertain what state law to apply to a dispute, the court should determine which state has the most

substantial connection to the occurrence and the parties. In a case involving a contract, the court should

consider where the contract was made, was negotiated, was to be performed, and the domicile, place of

business, or place of incorporation of the parties.[68] This rule takes into account several contacts and

evaluates them according to their relative importance with respect to the particular issue to be resolved. [69]

 

          Since these three principles in conflict of laws make reference to the law applicable to a dispute,

they are rules proper for the second phase, the choice of law. [70] They determine which state's law is to be

applied in resolving the substantive issues of a conflicts problem.[71] Necessarily, as the only issue in this

case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for.

 

          Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they

have not yet pointed out any conflict between the laws of Japan and ours. Before determining which law

should apply, first there should exist a conflict of laws situation requiring the application of the conflict of

laws rules.[72] Also, when the law of a foreign country is invoked to provide the proper rules for the

solution of a case, the existence of such law must be pleaded and proved.[73]

 

          It should be noted that when a conflicts case, one involving a foreign element, is brought before a

court or administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss

the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume

jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case

and take into account or apply the law of some other State or States. [74] The court’s power to hear cases

and controversies is derived from the Constitution and the laws. While it may choose to recognize laws of

foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal

agreements, even in matters regarding rights provided by foreign sovereigns.[75]

Neither can the other ground raised, forum non conveniens,[76] be used to deprive the trial court of

its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of

the Rules of Court does not include it as a ground.[77] Second, whether a suit should be entertained or

dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is

addressed to the sound discretion of the trial court.[78] In this case, the RTC decided to assume jurisdiction.

Third, the propriety of dismissing a case based on this principle requires a factual determination; hence,

this conflicts principle is more properly considered a matter of defense.[79]

 

          Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case

filed by respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the

trial and appellate courts correctly denied the petitioners’ motion to dismiss.

         

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.