cases

G.R. No. 138322

October 2, 2001

GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, vs. REDERICK A. RECIO, respondents. PANGANIBAN, J .:

 A divorce obtained abroad by an alien may be recognized in our jurisdiction, provided such decree is valid according to the national law of the foreigner. However, the divorce decree and the governing personal law of the alien spouse who obtained the divorce must be proven. Our courts do not take judicial notice of foreign laws and judgment; hence, like any other facts, both the divorce decree and the national law of the alien must be alleged and proven according to our law on evidence. The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to nullify the January 7, 1999 Decision1 and the March 24, 1999 Order of the Regional Trial Court of Cabanatuan City, Branch 28, in Civil Case No. 3026-AF. The assailed Decision disposed as follows: "WHEREFORE, this Court declares the marriage between Grace J. Garcia and Rederick A. Recio solemnized on January 12, 1994 at Cabanatuan City as dissolved and both parties can now remarry under existing and applicable laws to any and/or both parties." The assailed Order denied reconsideration of the above-quoted Decision. The Facts

Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian citizen, in Malabon, Rizal, on March 1, 1987. They lived together as husband and wife in Australia. On May 18, 1989, a decree of divorce, purportedly dissolving the marriage, was issued by an Australian family court. On June 26, 1992, respondent became an Australian citizen, as shown by a "Certificate of Australian Citizenship" issued by the Australian government. Petitioner – a Filipina – and respondent were married on January 12, 1994 in Our Lady of Perpetual Help Church in Cabanatuan City. In their application for a marriage license, respondent was declared as "single" and "Filipino." Starting October 22, 1995, petitioner and respondent lived separately without prior judicial dissolution of their marriage. While the two were still in Australia, their conjugal assets were divided on May 16, 1996, in accordance with their Statutory Declarations secured in Australia. On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of Marriage in the court a quo, on the ground of bigamy – respondent allegedly had a prior subsisting marriage at the time he married her on January 12, 1994. She claimed that she learned of respondent's marriage to Editha Samson only in November, 1997. In his Answer, respondent averred that, as far back as 1993, he had revealed to petitioner his prior marriage and  its  its subsequent dissolution. He contended that his first marriage to an Australian citizen had been validly dissolved by a divorce decree obtained in Australian in 1989; thus, he was legally capacitated to marry petitioner in 1994. 1âwphi1.nêt 

On July 7, 1998 – or about five years after the couple's wedding and while the suit for the declaration of nullity was pending – respondent was able to secure a divorce decree from a family court in Sydney, Australia because the "marriage ha[d] irretrievably broken down." Respondent prayed in his Answer that the Complained be dismissed on the ground that it stated no cause of action. The Office of the Solicitor General agreed with with respondent. The court marked and admitted the documentary evidence of both parties. After they submitted their respective memoranda, the case was submitted for resolution.

 Thereafter, the trial court rendered the assailed Decision and Order. Ruling of the Trial Court

The trial court declared the marriage dissolved on the ground that the divorce issued in Australia was valid and recognized in the Philippines. It deemed the marriage ended, but not on the basis of any defect in an essential element of the marriage; that is, respondent's alleged lack of legal capacity to remarry . Rather, it based its Decision on the divorce decree obtained by respondent. The Australian divorce had ended the marriage; thus, there was no more martial union to nullify or annual. Hence, this Petition. Issues

Petitioner submits the following issues for our consideration: "I The trial court gravely erred in finding that the divorce decree obtained in Australia by the respondent ipso facto terminated his first marriage to Editha Samson thereby capacitating him to contract a second marriage with the petitioner. "2 The failure of the respondent, who is now a naturalized Australian, to present a certificate of legal capacity to marry constitutes absence of a substantial requisite voiding the petitioner' marriage to the respondent. "3 The trial court seriously erred in the application of Art. 26 of the Family Code in this case. "4 The trial court patently and grievously erred in disregarding Arts. 11, 13, 21, 35, 40, 52 and 53 of the Family Code as the applicable provisions in this case. "5 The trial court gravely erred in pronouncing that the divorce gravely erred in pronouncing that the divorce decree obtained by the respondent in Australia ipso facto  capacitated the parties to remarry, without first securing a recognition of the judgment granting the divorce decree before our courts.‖ The Petition raises five issues, but for purposes of this Decision, we shall concentrate on two pivotal ones: (1) whether the divorce between respondent and Editha Samson was proven, and (2) whether respondent was proven to be legally capacitated to marry petitioner. Because of our ruling on these two, there is no more necessity to take up the rest. The Court's Ruling

The Petition is partly meritorious. First Issue: P r o v i n g t h e D i v o r c e B e t w e e n R e s p o n d e n t a n d E d i t h a S am am s o n  

 Thereafter, the trial court rendered the assailed Decision and Order. Ruling of the Trial Court

The trial court declared the marriage dissolved on the ground that the divorce issued in Australia was valid and recognized in the Philippines. It deemed the marriage ended, but not on the basis of any defect in an essential element of the marriage; that is, respondent's alleged lack of legal capacity to remarry . Rather, it based its Decision on the divorce decree obtained by respondent. The Australian divorce had ended the marriage; thus, there was no more martial union to nullify or annual. Hence, this Petition. Issues

Petitioner submits the following issues for our consideration: "I The trial court gravely erred in finding that the divorce decree obtained in Australia by the respondent ipso facto terminated his first marriage to Editha Samson thereby capacitating him to contract a second marriage with the petitioner. "2 The failure of the respondent, who is now a naturalized Australian, to present a certificate of legal capacity to marry constitutes absence of a substantial requisite voiding the petitioner' marriage to the respondent. "3 The trial court seriously erred in the application of Art. 26 of the Family Code in this case. "4 The trial court patently and grievously erred in disregarding Arts. 11, 13, 21, 35, 40, 52 and 53 of the Family Code as the applicable provisions in this case. "5 The trial court gravely erred in pronouncing that the divorce gravely erred in pronouncing that the divorce decree obtained by the respondent in Australia ipso facto  capacitated the parties to remarry, without first securing a recognition of the judgment granting the divorce decree before our courts.‖ The Petition raises five issues, but for purposes of this Decision, we shall concentrate on two pivotal ones: (1) whether the divorce between respondent and Editha Samson was proven, and (2) whether respondent was proven to be legally capacitated to marry petitioner. Because of our ruling on these two, there is no more necessity to take up the rest. The Court's Ruling

The Petition is partly meritorious. First Issue: P r o v i n g t h e D i v o r c e B e t w e e n R e s p o n d e n t a n d E d i t h a S am am s o n  

Petitioner assails the trial court's recognition of the divorce between respondent and Editha Samson. Citing Adong v. like any other foreign judgment, may be given Cheong Seng Gee, petitioner argues that the divorce decree, like recognition in this jurisdiction only upon proof of the existence of (1) the foreign law allowing absolute divorce and (2) the alleged divorce decree itself. She adds that respondent miserably failed to establish these elements. Petitioner adds that, based on the first paragraph of Article 26 of the Family Code, marriages solemnized abroad are governed by the law of the place where they were celebrated (the lex loci celebrationist ). ). In effect, the Code requires the presentation of the foreign law to show the conformity of the marriage in question to the legal requirements of the place where the marriage was performed.  At the outset, we lay the following basic legal principles as the take- off points for our discussion. Philippine law does not provide for absolute divorce; hence, our courts cannot grant it. A marriage between two Filipinos Filipinos cannot be dissolved even by a divorce obtained abroad, because of Articles 15 and 17 of the Civil Code. In mixed marriages involving a Filipino and a foreigner, Article 26 of the Family Code allows the former to contract a subsequent marriage in case the divorce is "validly obtained obtained abroad by the alien spouse capacitating capacitating him or her to remarry." A divorce obtained abroad by a couple, who are both aliens, may be recognized in the Philippines, provided it is consistent with their respective national laws.  A comparison between marriage and divorce, as far as pleading and proof are concerned, c an be made. Van Dorn v. Romillo Jr. decrees that "aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law." Therefore, before a foreign divorce decree can be recognized by our courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it. Presentation solely of the divorce decree is insufficient. Divorce as a Question of Fact 

Petitioner insists that before a divorce decree can be admitted in evidence, it must first comply with the registration requirements under Articles 11, 13 and 52 of the Family Code. These articles read as follows: "ART. 11. Where a marriage license is required, each of the contracting parties shall file separately a sworn application for such license with the proper local civil registrar which shall specify the following: xxx

xxx

xxx

"(5) If previously married, how, when and where the previous marriage was dissolved or annulled; xxx

xxx

xxx

"ART. 13. In case either of the contracting parties has been previously married, the applicant shall be required to furnish, instead of the birth of baptismal certificate required in the last preceding article, the death certificate of the deceased spouse or the judicial decree of annulment or declaration of nullity of his or her previous marriage. x x x. "ART. 52. The judgment of annulment or of absolute nullity of the marriage, the partition and distribution of the properties of the spouses, and the delivery of the children's presumptive legitimes shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall not affect their persons." Respondent, on the other hand, argues that the Australian divorce decree is a public document – a written official act of an Australian family court. Therefore, it requires no further proof of its authenticity and due execution. Respondent is getting ahead of himself. Before a foreign judgment is given presumptive evidentiary value, the document must first be presented and admitted in evidence. A divorce obtained abroad is proven by the divorce decree itself. Indeed the best evidence of a judgment is the judgment itself. The decree purports to be a written act or record of an act of an officially body or tribunal of a foreign country. Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having legal

custody of the document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office. The divorce decree between respondent and Editha Samson appears to be an authentic one issued by an Australian family court. However, appearance is not sufficient; compliance with the aforemetioned rules on evidence must be demonstrated. Fortunately for respondent's cause, when the divorce decree of May 18, 1989 was submitted in evidence, counsel for petitioner objected, not to its admissibility, but only to the fact that it had not been registered in the Local Civil Registry of Cabanatuan City. The trial court ruled that it was admissible, subject to petitioner's qualification. Hence, it was admitted in evidence and accorded weight by the judge. Indeed, petitioner's failure to object properly rendered the divorce decree admissible as a written act of the Family Court of Sydney, Australia. Compliance with the quoted articles (11, 13 and 52) of the Family Code is not necessary; respondent was no longer bound by Philippine personal laws after he acquired Australian citizenship in 1992. Naturalization is the legal act of adopting an alien and clothing him with the political and civil rights belonging to a citizen. Naturalized citizens, freed from the protective cloak of their former states, don the attires of their adoptive countries. By becoming an Australian, respondent severed his allegiance to the Philippines and the vinculum juris that had tied him to Philippine personal laws. B u r d e n o f P r o v i n g A u s t r a l i an L a w  

Respondent contends that the burden to prove Australian divorce law falls upon petitioner, because she is the party challenging the validity of a foreign judgment. He contends that petitioner was satisfied with the original of the divorce decree and was cognizant of the marital laws of Australia, because she had lived and worked in that country for quite a long time. Besides, the Australian divorce law is allegedly known by Philippine courts: thus, judges may take judicial notice of foreign laws in the exercise of sound discretion. We are not persuaded. The burden of proof lies with "the party who alleges the existence of a fact or thing necessary in the prosecution or defense of an action." In civil cases, plaintiffs have the burden of proving the material allegations of the complaint when those are denied by the answer; and defendants have the burden of proving the material allegations in their answer when they introduce new matters. Since the divorce was a defense raised by respondent, the burden of proving the pertinent Australian law validating it falls squarely upon him. It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign laws. Like any other facts, they must be alleged and proved. Australian marital laws are not among those matters that judges are supposed to know by reason of their judicial function. The power of judicial notice must be exercised with caution, and every reasonable doubt upon the subject should be resolved in the negative. Second Issue: R e s p o n d e n t ' s L e g a l C a p a c i ty t o R e m a r r y  

Petitioner contends that, in view of the insufficient proof of the divorce, respondent was legally incapacitated to marry her in 1994. Hence, she concludes that their marriage was void ab initio. Respondent replies that the Australian divorce decree, which was validly admitted in evidence, adequately established his legal capacity to marry under Australian law. Respondent's contention is untenable. In its strict legal sense, divorce means the legal dissolution of a lawful union for a cause arising after marriage. But divorces are of different types. The two basic ones are (1) absolute divorce or a vinculo matrimonii  and (2) limited divorce or a mensa et thoro. The first kind terminates the marriage, while the second suspends it and leaves the bond in full force. There is no showing in the case at bar which type of divorce was procured by respondent.

Respondent presented a decree nisi or an interlocutory decree – a conditional or provisional judgment of divorce. It is in effect the same as a separation from bed and board, although an absolute divorce may follow after the lapse of the prescribed period during which no reconciliation is effected. Even after the divorce becomes absolute, the court may under some foreign statutes and practices, still restrict remarriage. Under some other jurisdictions, remarriage may be limited by statute; thus, the guilty party in a divorce which was granted on the ground of adultery may be prohibited from remarrying again. The court may allow a remarriage only after proof of good behavior. On its face, the herein Australian divorce decree contains a restriction that reads: "1. A party to a marriage who marries again before this decree becomes absolute (unless the other party has died) commits the offence of bigamy." This quotation bolsters our contention that the divorce obtained by respondent may have been restricted. It did not absolutely establish his legal capacity to remarry according to his national law. Hence, we find no basis for the ruling of the trial court, which erroneously assumed that the Australian divorce ipso facto restored respondent's capacity to remarry despite the paucity of evidence on this matter. We also reject the claim of respondent that the divorce decree raises a disputable presumption or presumptive evidence as to his civil status based on Section 48, Rule 39 of the Rules of Court, for the simple reason that no proof has been presented on the legal effects of the divorce decree obtained under Australian laws. S i g n i f i c a n c e o f t h e C e r t i f i c at e o f L e g a l C a p a c i t y  

Petitioner argues that the certificate of legal capacity required by Article 21 of the Family Code was not submitted together with the application for a marriage license. According to her, its absence is proof that respondent did not have legal capacity to remarry. We clarify. To repeat, the legal capacity to contract marriage is determined by the national law of the party concerned. The certificate mentioned in Article 21 of the Family Code would have been sufficient to establish the legal capacity of respondent, had he duly presented it in court. A duly authenticated and admitted certificate is prima facie evidence of legal capacity to marry on the part of the alien applicant for a marriage license.  As it is, however, there is absolutely no evidence that proves respondent's legal capacity to marry pe titioner. A review of the records before this Court shows that only the following exhibits were presented before the lower court: (1) for petitioner: (a) Exhibit "A" – Complaint; (b) Exhibit "B" – Certificate of Marriage Between Rederick A. Recto (Filipino Australian) and Grace J. Garcia (Filipino) on January 12, 1994 in Cabanatuan City, Nueva Ecija; (c) Exhibit "C" – Certificate of Marriage Between Rederick A. Recio (Filipino) and Editha D. Samson (Australian) on March 1, 1987 in Malabon, Metro Manila; (d) Exhibit "D" – Office of the City Registrar of Cabanatuan City Certification that no information of annulment between Rederick A. Recto and Editha D. Samson was in its records; and (e) Exhibit "E" – Certificate of Australian Citizenship of Rederick A. Recto; (2) for respondent: (Exhibit "1" – Amended Answer; (b) Exhibit "S" – Family Law Act 1975 Decree Nisi of Dissolution of Marriage in the Family Court of Australia; (c) Exhibit "3" – Certificate of Australian Citizenship of Rederick A. Recto; (d) Exhibit "4" – Decree Nisi of Dissolution of Marriage in the Family Court of Australia Certificate; and Exhibit "5" – Statutory Declaration of the Legal Separation Between Rederick A. Recto and Grace J. Garcia Recio since October 22, 1995. Based on the above records, we cannot conclude that respondent, who was then a naturalized Australian citizen, was legally capacitated to marry petitioner on January 12, 1994. We agree with petitioner's contention that the court a quo erred in finding that the divorce decree ipso facto clothed respondent with the legal capacity to remarry without requiring him to adduce sufficient evidence to show the Australian personal law governing his status; or at the very least, to prove his legal capacity to contract the second marriage. Neither can we grant petitioner's prayer to declare her marriage to respondent null and void on the ground of bigamy.  After all, it may turn out that under Australian law, he was really capacitated to marry petitioner as a direct result of the divorce decree. Hence, we believe that the most judicious course is to remand this case to the trial court to receive evidence, if any, which show petitioner's legal capacity to marry petitioner. Failing in that, then the court a quo may declare a nullity of the parties' marriage on the ground of bigamy, there being already in evidence two existing

marriage certificates, which were both obtained in the Philippines, one in Malabon, Metro Manila dated March 1, 1987 and the other, in Cabanatuan City dated January 12, 1994. WHEREFORE, in the interest of orderly procedure and substantial justice, we REMAND  the case to the court a quo for the purpose of receiving evidence which conclusively show respondent's legal capacity to marry petitioner; and failing in that, of declaring the parties' marriage void on the ground of bigamy, as above discussed. No costs. SO ORDERED. Melo, Puno, Vitug, and Sandoval-Gutierrez, JJ., concur.

G.R. No. 142820. June 20, 2003]

WOLFGANG O. ROEHR, p e t i t i o n e r   , v s . MARIA CARMEN D. RODRIGUEZ, HON. JUDGE JOSEFINA GUEVARA-SALONGA, Presiding Judge of Makati RTC, Branch 149 , r e s p o n d e n t s   . DECISION QUISUMBING, J .:

 At the core of the present controversy are issues of (a) grave abuse of discretion allegedly committed by public respondent and (b) lack of jurisdiction of the regional trial court, in matters that spring from a divorce decree obtained abroad by petitioner. In this special civil action for certiorari, petitioner assails (a) the order dated September 30, 1999 of public respondent Judge Josefina Guevara-Salonga, Presiding Judge of Makati Regional Trial Court, Branch 149, in Civil Case No. 96-1389 for declaration of nullity of marriage, and (b) the order dated March 31, 2000 denying his motion for reconsideration. The assailed orders partially set aside the trial court‘s order dismissing Civil Case No. 96-1389, for the purpose of resolving issues relating to the property settlement of the spouses and the custody of their children. Petitioner Wolfgang O. Roehr, a German citizen and resident of Germany, married private respondent Carmen Rodriguez, a Filipina, on December 11, 1980 in Hamburg, Germany. Their marriage was subsequently ratified on February 14, 1981 in Tayasan, Negros Oriental. Out of their union were born Carolynne and Alexandra Kristine on November 18, 1981 and October 25, 1987, respectively. On August 28, 1996, private respondent filed a petition for declaration of nullity of marriage before the Regional Trial Court (RTC) of Makati City. On February 6, 1997, petitioner filed a motion to dismiss, but it was denied by the trial court in its order dated May 28, 1997. On June 5, 1997, petitioner filed a motion for reconsideration, but was also denied in an order dated August 13, 1997. On September 5, 1997, petitioner filed a petition for certiorari with the Court of Appeals. On November 27, 1998, the appellate court denied

the petition and remanded the case to the RTC. Meanwhile, petitioner obtained a decree of divorce from the Court of First Instance of Hamburg-Blankenese, promulgated on December 16, 1997. The decree provides in part: [T]he Court of First Instance, Hamburg-Blankenese, Branch 513, has ruled through Judge van Buiren of the Court of First Instance on the basis of the oral proceedings held on 4 Nov. 1997: The marriage of the Parties contracted on 11 December 1980 before the Civil Registrar of Hamburg-Altona is hereby dissolved. The parental custody for the children Carolynne Roehr, born 18 November 1981  Alexandra Kristine Roehr, born on 25 October 1987 is granted to the father. The litigation expenses shall be assumed by the Parties.

In view of said decree, petitioner filed a Second Motion to Dismiss on May 20, 1999 on the ground that the trial court had no jurisdiction over the subject matter of the action or suit as a decree of divorce had already been promulgated dissolving the marriage of petitioner and private respondent. On July 14, 1999, Judge Guevara-Salonga issued an order granting petitioner‘s motion to dismiss. Private respondent filed a Motion for Partial Reconsideration, with a prayer that the case proceed for the purpose of determining the issues of custody of children and the distribution of the properties between petitioner and private respondent. On August 18, 1999, an Opposition to the Motion for Partial Reconsideration was filed by the petitioner on the ground that there is nothing to be done anymore in the instant case as the marital tie between petitioner Wolfgang Roehr and respondent Ma. Carmen D. Rodriguez had already been severed by the decree of divorce promulgated by the Court of First Instance of Hamburg, Germany on December 16, 1997 and in view of the fact that said decree of divorce had already been recognized by the RTC in its order of July 14, 1999, through the implementation of the mandate of Article 26 of the Family Code, endowing the petitioner with the capacity to remarry under the Philippine law. On September 30, 1999, respondent judge issued the assailed order partially setting aside her order dated July 14, 1999 for the purpose of tackling the issues of property relations of the spouses as well as support and custody of their children. The pertinent portion of said order provides:  Acting on the Motion for Partial Reconsideration of the Order dated July 14, 1999 filed by petitioner thru counsel which was opposed by respondent and considering that the second paragraph of Article 26 of the Family Code was included as an amendment thru Executive Order 227, to avoid the absurd situation of a Filipino as being still married to his or her alien spouse though the latter is no longer married to the Filipino spouse because he/she had obtained a divorce abroad which is recognized by his/her

national law, and considering further the effects of the termination of the marriage under Article 43 in relation to Article 50 and 52 of the same Code, which include the dissolution of the property relations of the spouses, and the support and custody of their children, the Order dismissing this case is partially set aside with respect to these matters which may be ventilated in this Court. SO ORDERED ( Emphasis supplied.)

Petitioner filed a timely motion for reconsideration on October 19, 1999, which was denied by respondent judge in an order dated March 31, 2000. Petitioner ascribes lack of jurisdiction of the trial court and grave abuse of discretion on the part of respondent judge. He cites as grounds for his petition the following: 1.

PARTIALLY SETTING ASIDE THE ORDER DATED JULY 14, 1999 DISMISSING THE INSTANT CASE IS NOT ALLOWED BY 1997 RULES OF CIVIL PROCEDURE.

2.

RESPONDENT MARIA CARMEN RODRIGUEZ BY HER MOTION FOR PARTIAL RECONSIDERATION HAD RECOGNIZED AND ADMITTED THE DIVORCE DECISION OBTAINED BY HER EX-HUSBAND IN HAMBURG, GERMANY.

3. 3. THERE IS NOTHING LEFT TO BE TACKLED BY THE HONORABLE COURT AS THERE ARE NO CONJUGAL ASSETS ALLEGED IN THE PETITION FOR ANNULMENT OF MARRIAGE AND IN THE DIVORCE PETITION, AND THE CUSTODY OF THE CHILDREN HAD ALREADY BEEN  AWARDED TO PETITIONER WOLFGANG ROEHR.

Pertinent in this case before us are the following issues: 1. Whether or not respondent judge gravely abused her discretion in issuing her order dated September 30, 1999, which partially modified her order dated July 14, 1999; and 2. Whether or not respondent judge gravely abused her discretion when she assumed and retained jurisdiction over the present case despite the fact that petitioner has already obtained a divorce decree from a German court. On the first issue, petitioner asserts that the assailed order of respondent judge is completely inconsistent with her previous order and is contrary to Section 3, Rule 16, Rules of Civil Procedure, which provides: Sec. 3. Resolution of motion - After the hearing, the court may dismiss the action or claim, deny the motion, or order the amendment of the pleading. The court shall not defer the resolution of the motion for the reason that the ground relied upon is not indubitable. In every case, the resolution shall state clearly and distinctly the reasons therefor. (Emphasis supplied.)

Petitioner avers that a court‘s action on a motion is limited to dismissing the action or claim, denying the motion, or ordering the amendment of the pleading.

Private respondent, on her part, argues that the RTC can validly reconsider its order

dated July 14, 1999 because it had not yet attained finality, given the timely filing of respondent‘s motion for reconsideration. Pertinent to this issue is Section 3 in relation to Section 7, Rule 37 of the 1997 Rules of Civil Procedure, which provides: Sec. 3.  Action upon motion for new trial or reconsideration. —The trial court may set aside the judgment or final order and grant a new trial, upon such terms as may be  just, or may deny the motion. If the court finds that excessive damages have been awarded or that the judgment or final order is contrary to the evidence or law, it may amend such judgment or final order accordingly . Sec. 7. Partial new trial or reconsideration .—If the grounds for a motion under this Rule appear to the court to affect the issues as to only a part, or less than all of the matters in controversy, or only one, or less than all, of the parties to it, the court may order a new trial or grant reconsideration as to such issues if severable without interfering with the judgment or final order upon the rest. (Emphasis supplied.)

It is clear from the foregoing rules that a judge can order a partial reconsideration of a case that has not yet attained finality. Considering that private respondent filed a motion for reconsideration within the reglementary period, the trial court's decision of July 14, 1999 can still be modified. Moreover, in Sañado v. Court of Appeals, we held that the court could modify or alter a judgment even after the same has become executory whenever circumstances transpire rendering its decision unjust and inequitable, as where certain facts and circumstances justifying or requiring such modification or alteration transpired after the judgment has become final and executory and when it becomes imperative in the higher interest of justice or when supervening events warrant it. In our view, there are even more compelling reasons to do so when, as in this case, judgment has not yet attained finality.  Anent the second issue, petitioner claims that respondent judge committed grave abuse of discretion when she partially set aside her order dated July 14, 1999, despite the fact that petitioner has already obtained a divorce decree from the Court of First Instance of Hamburg, Germany. In Garcia v. Recio, Van Dorn v. Romillo, Jr., and Llorente v. Court of Appeals , we consistently held that a divorce obtained abroad by an alien may be recognized in our  jurisdiction, provided such decree is valid according to the national law of the foreigner. Relevant to the present case is Pilapil v. Ibay-Somera , where this Court specifically recognized the validity of a divorce obtained by a German citizen in his country, the Federal Republic of Germany. We held in Pilapil   that a foreign divorce and its legal effects may be recognized in the Philippines insofar as respondent is concerned in view of the nationality principle in our civil law on the status of persons. In this case, the divorce decree issued by the German court dated December 16, 1997 has not been challenged by either of the parties. In fact, save for the issue of parental custody, even the trial court recognized said decree to be valid and binding, thereby endowing private respondent the capacity to remarry. Thus, the present controversy mainly relates to the award of the custody of their two children, Carolynne and Alexandra Kristine, to petitioner.

 As a general rule, divorce decrees obtained by foreigners in other countries are recognizable in our jurisdiction, but the legal effects thereof, e.g. on custody, care and support of the children, must still be determined by our courts. Before our courts can give the effect of res judicata  to a foreign judgment, such as the award of custody to petitioner by the German court, it must be shown that the parties opposed to the  judgment had been given ample opportunity to do so on grounds allowed under Rule 39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997 Rules of Civil Procedure), to wit: SEC. 50. Effect of foreign judgments . - The effect of a judgment of a tribunal of a foreign country, having jurisdiction to pronounce the judgment is as follows: (a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing; (b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title; but the judgment may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

It is essential that there should be an opportunity to challenge the foreign judgment, in order for the court in this jurisdiction to properly determine its efficacy. In this  jurisdiction, our Rules of Court clearly provide that with respect to actions in personam, as distinguished from actions in rem, a foreign judgment merely constitutes  prima facie evidence of the justness of the claim of a party and, as such, is subject to proof to the contrary. In the present case, it cannot be said that private respondent was given the opportunity to challenge the judgment of the German court so that there is basis for declaring that judgment as res judicata  with regard to the rights of petitioner to have parental custody of their two children. The proceedings in the German court were summary. As to what was the extent of private respondent‘s participation in the proceedings in the German court, the records remain unclear. The divorce decree itself states that neither has she commented on the proceedings nor has she given her opinion to the Social Services Office. Unlike petitioner who was represented by two lawyers, private respondent had no counsel to assist her in said proceedings. More importantly, the divorce judgment was issued to petitioner by virtue of the German Civil Code provision to the effect that when a couple lived separately for three years, the marriage is deemed irrefutably dissolved. The decree did not touch on the issue as to who the offending spouse was. Absent any finding that private respondent is unfit to obtain custody of the children, the trial court was correct in setting the issue for hearing to determine the issue of parental custody, care, support and education mindful of the best interests of the children. This is in consonance with the provision in the Child and Youth Welfare Code that the child‘s welfare is always the paramount consideration in all questions concerning his care and custody. On the matter of property relations, petitioner asserts that public respondent exceeded the bounds of her jurisdiction when she claimed cognizance of the issue concerning property relations between petitioner and private respondent. Private respondent herself has admitted in Par. 14 of her petition for declaration of nullity of

marriage dated August 26, 1996 filed with the RTC of Makati, subject of this case, that: ―[p]etitioner and respondent have not acquired any conjugal or community property nor have they incurred any debts during their marriage.‖  Herein petitioner did not contest this averment. Basic is the rule that a court shall grant relief warranted by the allegations and the proof. Given the factual admission by the parties in their pleadings that there is no property to be accounted for, respondent judge has no basis to assert  jurisdiction in this case to resolve a matter no longer deemed in controversy. In sum, we find that respondent judge may proceed to determine the issue regarding the custody of the two children born of the union between petitioner and private respondent. Private respondent erred, however, in claiming cognizance to settle the matter of property relations of the parties, which is not at issue. WHEREFORE, the orders of the Regional Trial Court of Makati, Branch 149, issued

on September 30, 1999 and March 31, 2000 are AFFIRMED with MODIFICATION. We hereby declare that the trial court has jurisdiction over the issue between the parties as to who has parental custody, including the care, support and education of the children, namely Carolynne and Alexandra Kristine Roehr. Let the records of this case be remanded promptly to the trial court for continuation of appropriate proceedings. No pronouncement as to costs. SO ORDERED.

G.R. No. 124371. November 23, 2000]

PAULA T. LLORENTE, p e t i t i o n e r , v s . COURT OF APPEALS and ALICIA F. LLORENTE, r e s p o n d e n t s . DECISION PARDO, J .:

The Case

The case raises a conflict of laws issue. What is before us is an appeal from the decision of the Court of Appeals modifying that of the Regional Trial Court, Camarines Sur, Branch 35, Iriga City i  declaring respondent Alicia F. Llorente (herinafter referred to as ―Alicia‖), as co -owners of whatever property she and the deceased Lorenzo N. Llorente (hereinafter referred to as ―Lorenzo‖) may have acquired during the twenty -five (25) years that they lived together as husband and wife.

The Facts

The deceased Lorenzo N. Llorente was an enlisted serviceman of the United States Navy from March 10, 1927 to September 30, 1957. On February 22, 1937, Lorenzo and petitioner Paula Llorente (hereinafter referred to as ―Paula‖) were married before a parish priest, Roman Catholic Church, in Nabua, Camarines Sur. Before the outbreak of the Pacific War, Lorenzo departed for the United States and Paula stayed in the conjugal home in barrio Antipolo, 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 granted an 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. On December 4, 1945, Paula gave birth to a boy registered in the Office of the Registrar of Nabua as ―Crisologo Llorente,‖ with the certificate stating that the child was not legitimate and the line for the father‘s name was left blank. Lorenzo refused to forgive Paula and live with her. In fact, on February 2, 1946, the couple drew a written agreement to the effect that (1) all the family allowances allotted by the United States Navy as part of Lorenzo‘s salary and all other obli gations for Paula‘s daily maintenance and support would be suspended; (2) they would dissolve their marital union in accordance with judicial proceedings; (3) they would make a separate agreement regarding their conjugal property acquired during their marital life; and (4) Lorenzo would not prosecute Paula for her adulterous act since she voluntarily admitted her fault and agreed to separate from Lorenzo peacefully. The agreement was signed by both Lorenzo and Paula and was witnessed by Paula‘s father and stepmother. The agreement was notarized by Notary Public Pedro Osabel. Lorenzo 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 of San Diego. Paula was represented 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 Diego found all factual allegations to be true and issued an interlocutory judgment of divorce. On December 4, 1952, the divorce decree became final. In the meantime, Lorenzo returned to the Philippines. On January 16, 1958, Lorenzo married Alicia F. Llorente in Manila. Apparently,  Alicia had no knowledge of the first marriage even if they resided in the same town as Paula, who did not oppose the marriage or cohabitation.

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 the will, Lorenzo bequeathed all his property to Alicia and their three children, to wit: ―(1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my residential house

and lot, located at San Francisco, Nabua, Camarines Sur, Philippines, including ALL the personal properties and other movables or belongings that may be found or existing therein; ―(2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my children, Raul F.

Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, all my real properties whatsoever and wheresoever located, specifically my real properties located at Barangay Aro Aldao, Nabua, Camarines Sur; Barangay Paloyon, Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua, Camarines Sur; and Barangay Paloyon, Sitio Nalilidong, Nabua, Camarines Sur; ―(3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and unto my children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, my real properties located in Quezon City Philippines, and covered by Transfer Certificate of Title No. 188652; and my lands in Antipolo, Rizal, Philippines, covered by Transfer Certificate of Title Nos. 124196 and 165188, both of the Registry of Deeds of the province of Rizal, Philippines; ―(4) That their respective shares in the above-mentioned properties, whether real or

personal properties, shall not be disposed of, ceded, sold and conveyed to any other persons, but could only be sold, ceded, conveyed and disposed of by and among themselves; ―(5) I desig nate my wife ALICIA R. FORTUNO to be the sole executor of this my Last Will

and Testament, and in her default or incapacity of the latter to act, any of my children in the order of age, if of age; ―(6) I hereby direct that the executor named herein or her lawful substitute should served

(sic ) without bond; ―(7) I hereby revoke any and all my other wills, codicils, or testamentary dispositions

heretofore executed, signed, or published, by me; ―(8) It is my final wish and desire that if I die, no relatives of mine in any degree in the Llorente‘s Side should ever bother and disturb in any manner whatsoever my wife Alicia R.

Fortunato and my children with respect to any real or personal properties I gave and bequeathed respectively to each one of them by virtue of this Last Will and Testament.‖

On December 14, 1983, Lorenzo filed with the Regional Trial Court, Iriga, Camarines Sur, a petition for the probate and allowance of his last will and testament wherein Lorenzo moved that Alicia be appointed Special Administratrix of his estate. On January 18, 1984, the trial court denied the motion for the reason that the testator Lorenzo was still alive. On January 24, 1984, finding that the will was duly executed, the trial court admitted the will to probate.

On June 11, 1985, before the proceedings could be terminated, Lorenzo died. On September 4, 1985, Paula filed with the same court a petition for letters of administration over Lorenzo‘s estate in her favor. Paula contended (1) that she was Lorenzo‘s surviving spou se, (2) that the various property were acquired during their marriage, (3) that Lorenzo‘s will disposed of all his property in favor of Alicia and her children, encroaching on her legitime and 1/2 share in the conjugal property. On December 13, 1985, Alicia filed in the testate proceeding (Sp. Proc. No. IR-755), 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 in Sp. Proc. No. IR -888. On November 6, 13 and 20, 1985, the order was published in the newspaper ―Bicol Star ‖. On May 18, 1987, the Regional Trial Court issued a joint decision, thus: ―Wherefore, considering that this court has so 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 is likewise 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). ―On the other hand, the court finds the petition of Paula Titular Llorente, meritorious, and so

declares the intrinsic disposition of the will of Lorenzo Llorente dated March 13, 1981 as void and declares her entitled as conjugal partner and entitled to one-half of their conjugal properties, and as primary compulsory heir, Paula T. Llorente is also entitled to one-third of the estate and then one-third should go to the illegitimate children, Raul, Luz and Beverly, all surname ( sic ) Llorente, for them to partition in equal shares and also entitled to the remaining free portion in equal shares. ―Petitioner, Paula Llorente is appointed legal administrator of the estate of the deceased,

Lorenzo Llorente. As such let the corresponding letters of administration issue in her favor upon her filing a bond in the amount ( sic ) of P100,000.00 conditioned for her to make a return to the court within three (3) months a true and complete inventory of all goods, chattels, rights, and credits, and estate which shall at any time come to her possession or to the possession of any other person for her, and from the proceeds to pay and discharge all debts, legacies and charges on the same, or such dividends thereon as shall be decreed or required by this court; to render a true and just account of her administration to the court within one (1) year, and at any other time when required by the court and to perform all orders of this court by her to be performed. ―On the other matters prayed for in respective petitions for want of evidence could not be

granted. ―SO ORDERED.‖

In time, Alicia filed with the trial court a motion for reconsideration of the aforequoted decision. On September 14, 1987, the trial court denied Alicia‘s motion for reconsideration but

modified its earlier decision, stating that Raul and Luz Llorente are not children ―legitimate or otherwise‖ of Lorenzo since they were not legally adopted by him .  Amending its decision of May 18, 1987, the trial court declared Beverly Llorente as the only illegitimate child of Lorenzo, entitling her to one-third (1/3) of the estate and onethird (1/3) of the free portion of the estate. On September 28, 1987, respondent appealed to the Court of Appeals. On July 31, 1995, the Court of Appeals promulgated its decision, affirming with modification the decision of the trial court in this wise: ―WHEREFORE, the decision appealed from is hereby AFFIRMED with the MODIFICATION that Alicia is declared as co-owner of whatever properties she and the deceased may have acquired during the twenty-five (25) years of cohabitation. ―SO ORDERED.‖

On August 25, 1995, petitioner filed with the Court of Appeals a motion for reconsideration of the decision. On March 21, 1996, the Court of Appeals, denied the motion for lack of merit. Hence, this petition.

The Issue

Stripping the petition of its legalese and sorting through the various arguments raised, the issue is simple. Who are entitled to inherit from the late Lorenzo N. Llorente? We do not agree with the decision of the Court of Appeals. We remand the case to the trial court for ruling on the intrinsic validity of the will of the deceased.

The Applicable Law

The fact that the late 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. The Civil Code clearly provides: ―Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are b i n d i n g u p o n c i t i z e n s o f t h e Ph i l i p p i n e s  , even though living abroad. ―Art. 16. Real property as well as personal property is subject to the law of the country where it is situated.

―However, intestate and testam entary succession, both with respect to the order of

succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, s h a l l b e r e g u l a t ed b y t h e n at i o n a l l a w o f t h e p e r s o n w h o s e s u c c e s s i o n i s , whatever may be the nature of the property and regardless of the country under consideration  wherein said property may be found.‖ ( emphasis ours )

True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. While the substance of the foreign law was pleaded, the Court of Appeals did not admit the foreign law. The Court of Appeals and the trial court called to the fore the renvoi  doctrine, where the case was ―referred back‖ to the law of the decedent‘s domicile, in this case, Philippine law. We note that while the trial court stated that the law of New York was not sufficiently proven, in the same breath it made the categorical, albeit equally unproven statement that ―American law follows the ‗domiciliary theory‘ hence, Philippine law applies when determining the validity of Lorenzo‘s will . First, there is no such thing as one American law. The "national law" indicated in

 Article 16 of the Civil Code cannot possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the United States. Each State of the union has its own law applicable to its citizens and in force only within the State. It can therefore refer to no other than the law of the State of which the decedent was a resident. Second, there is no showing that the application of the renvoi doctrine is called for or required by New York State law. 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, e s p e c i a ll y i n l i g h t o f t h e f a c t u a l a n d l e g a l c i r c u m s t a n c e s h e r e o b t a i n i n g  .

Validity of the Foreign Divorce

In Van Dorn v. Romillo, Jr , we held that owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the policy against absolute divorces, the same being considered contrary to our concept of public policy and morality. In the same case, the Court ruled that aliens may obtain divorces abroad, provided they are valid according to their national law.

Citing this landmark case, the Court held in Quita v. Court of Appeals , that once proven that respondent was no longer a Filipino citizen when he obtained the divorce from petitioner, the ruling in Van Dorn  would become applicable and petitioner could ―very well lose her right to inherit‖ from him. In Pilapil v. Ibay-Somera , we recognized the divorce obtained by the respondent in his country, the Federal Republic of Germany. There, we stated that divorce and its legal effects may be recognized in the Philippines insofar as respondent is concerned in view of the nationality principle in our civil law on the status of persons. For failing to apply these doctrines, the decision of the Court of Appeals must be reversed. We hold 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.

Validity of the Will

The Civil Code provides: ―Art. 17. The f o r m s an d s o l e m n i t i e s   of contracts, wills, and other public instruments shall be governed by the laws of t h e c o u n t r y i n w h i c h t h e y a r e ex e c u t e d  . ―When the acts referred to are executed before the diplomatic or consular officials of the

Republic of the Philippines in a foreign country, the solemnities established by Philippine laws shall be observed in their execution.‖ ( underscoring ours )

The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly shown in the will he executed. We do not wish to frustrate his wishes, since he was a foreigner, not covered by our laws on ―family rights and duties, status, condition and legal capacity.‖ 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.  As a guide however, the trial court should note that whatever public policy or good customs may be involved in our system of legitimes, Congress did not intend to extend the same to the succession of foreign nationals. Congress specifically left the amount of successional rights to the decedent's national law. Having thus ruled, we find it unnecessary to pass upon the other issues raised.

The Fallo WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in

CA-G. R. SP No. 17446 promulgated on July 31, 1995 is SET ASIDE. In lieu thereof, the Court REVERSES the decision of the Regional Trial Court and RECOGNIZES as VALID the decree of divorce granted in favor of the deceased Lorenzo N. Llorente by the Superior Court of the State of California in and for the County of San Diego, made final on December 4, 1952. Further, the 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 Rules of Court. No costs. SO ORDERED.

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD.,

G.R. No. 149177

Present:

Petitioners,

- versus -

YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO,  NACHURA, and REYES, JJ. Promulgated:

MINORU KITAMURA,

 November 23, 2007

Respondent.

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

DECISION NACHURA, J .:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decisionof the Court of Appeals (CA)

in CA-G.R. SP No. 60827, and the July 25, 2001 Resolution 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, entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines. The agreement provides that respondent was to extend professional services to Nippon for a year starting on April 1, 1999. 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. 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.

Respondent was named as the project manager in the contract's Appendix 3.1. 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. 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.

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

respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with the Regional Trial Court of Lipa City.

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 pretermination of respondent's ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus.

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.

On June 29, 2000, the RTC, invoking our ruling in  Insular Government v.  Frank that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance, The

trial 3[17]

reconsideration,

court

subsequently

1[15]

  denied the motion to dismiss.

denied

petitioners'

motion

2[16]

for

 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

4[18]

 No. 60205].

  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.

5[19]

  An Entry of Judgment 6[20]

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

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period, a  second  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. 7[21]

60827.

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001 Decision

8[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 9[23]

 solutionis.

Petitioners' motion for reconsideration was subsequently denied by the CA 10[24]

in the assailed July 25, 2001 Resolution.

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review on Certiorari

11[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 12[26] DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.

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 CAG.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.

13[27]

 The same holds true in the CA's dismissal of the

said case due to defects in the formal requirement of verification

14[28]

  and in the

other requirement in Rule 46 of the Rules of Court on the statement of the material

15[29]

dates.

  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 16[30]

 prescribed period

 in Section 4, Rule 65 of the said Rules.

17[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 18[32]

same parties, on the same subject matter and theory.

 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 dismissed on procedural grounds,

19[33]

that the first had already been

  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.

20[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 21[35]

Authorization

  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 22[36]

review.

  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.

23[37]

  Given that

 petitioners herein sufficiently explained their misgivings on this point and appended to their Reply

24[38]

25[39]

 an updated Authorization

 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 26[40]

 board.

 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 27[41]

 pursuant to  Loquias v. Office of the Ombudsman.

 Substantial compliance will

not suffice in a matter that demands strict observance of the Rules.

28[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.

29[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 wellestablished rule that an order denying a motion to dismiss is interlocutory, and cannot be the subject of the 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.

30[44]

  While there are

31[45]

recognized exceptions to this rule,

 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

32[46]

  following the [state of the] most significant

relationship rule in Private International Law.

33[47]

The Court notes that petitioners adopted an additional but different theory 34[48]

when they elevated the case to the appellate court. In the Motion to Dismiss

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 35[49]

the principles of lex loci celebrationis  and lex contractus.

  While not

abandoning this stance in their petition before the appellate court, petitioners on 36[50]

certiorari significantly invoked the defense of  forum non conveniens.

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 37[51]

rule.

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 in Philippine Ports Authority v. City 38[52]

of Iloilo.

  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 39[53]

court apply? and (3) Where can the resulting judgment be enforced?

Analytically, jurisdiction and choice of law are two distinct concepts.

40[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.

41[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 42[56]

of that state have jurisdiction to enter a judgment.

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 43[57]

the litigation.

  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 44[58]

 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.

45[59]

To succeed in its motion for the dismissal

of an action for lack of jurisdiction over the subject matter of the claim,

46[60]

  the

movant must show that the court or tribunal cannot act on the matter submitted to it 47[61]

 because no law grants it the power to adjudicate the claims.

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.

48[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”

49[63]

50[64]

or the law of the place where a contract is made.

 The doctrine of lex contractus

or lex loci contractus means the “law of the place where a contract is executed or to be performed.”

51[65]

  It controls the nature, construction, and validity of the

52[66]

contract

 and it may pertain to the law voluntarily agreed upon by the parties or

the law intended by them either expressly or implicitly.

53[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.

54[68]

 This rule

takes into account several contacts and evaluates them according to their relative 55[69]

importance with respect to the particular issue to be resolved.

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 56[70]

law.

  They determine which state's law is to be applied in resolving the

substantive issues of a conflicts problem. 57[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 58[72]

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 59[73]

 proved.

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.

60[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 61[75]

sovereigns.

62[76]

 Neither can the other ground raised, forum non conveniens,

 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.

63[77]

Second, whether a suit should be entertained or

dismissed on the basis of the said doctrine depends largely upon the facts of the 64[78]

 particular case and is addressed to the sound discretion of the trial court.

 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 65[79]

 principle is more properly considered a matter of defense.

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.

SO ORDERED G.R. No. 122191 October 8, 1998 SAUDI ARABIAN AIRLINES, petitioner,

vs. COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City, respondents.

QUISUMBING, J.:

This petition for  certiorari   certiorari  pursuant  pursuant to Rule 45 of the Rules of Court seeks to annul and set aside the Resolution  1 dated September 27, 1995 and the Decision  2 dated April 10, 1996 of the Court of  Appeals 3 in CA-G.R. SP No. 36533,  4 and the Orders 5 dated August 29, 1994 6 and February 2, 1995  7 that were issued by the trial court in Civil Case No. Q-93-18394.  8 The pertinent antecedent facts which gave rise to the instant petition, as stated in the questioned Decision 9, are as follows: On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. . . . On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al-Gazzawi and Allah AlGazzawi, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in te ( sic ) room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice. When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDI ( sic ). ). In September 1990, defendant SAUDIA transferred plaintiff to Manila.

On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah. One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. investigatio n. Plaintiff did so after receiving assurance from SAUDIA's Manila manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight. At the Inflight Service Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition. 10 Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the international flights. 11 Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila, 12 she was terminated from the service by SAUDIA, without her being informed of the cause.

On November 23, 1993, Morada filed a Complaint Balawi ("Al-Balawi"), its country manager.

13

 for damages against SAUDIA, and Khaled Al-

On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss 14 which raised the following grounds, to wit: (1) that the Complaint states no cause of action against Saudia; (2) that defendant  Al-Balawi is not not a real party party in interest; interest; (3) that the claim or demand demand set forth forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no jurisdiction to try the case. On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) thereto on March 3, 1994.

15

. Saudia filed a reply

16

On June 23, 1994, Morada filed an Amended Complaint 17 wherein Al-Balawi was dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to Dismiss Amended Complaint 18. The trial court issued an Order 19 dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by Saudia. From the Order of respondent Judge 20 denying the Motion to Dismiss, SAUDIA filed on September 20, 1994, its Motion for Reconsideration 21 of the Order dated August 29, 1994. It alleged that the trial court has no jurisdiction to hear and try the case on the basis of Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 14, 1994, Morada filed her Opposition 22 (To Defendant's Motion for Reconsideration). In the Reply 23 filed with the trial court on October 24, 1994, SAUDIA alleged that since its Motion for Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the same. Respondent Judge subsequently issued another Order 24 dated February 2, 1995, denying SAUDIA's Motion for Reconsideration. The pertinent portion of the assailed Order reads as follows:  Acting on the the Motion for Reconsideration Reconsideration of defendant defendant Saudi Saudi Arabian Arabian Airlines filed, thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which is one for the recovery of actual, moral and exemplary damages plus attorney's fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be reconsidered, the motion for reconsideration of the defendant, is DENIED. SO ORDERED. 25 Consequently, on February 20, 1995, SAUDIA filed its Petition for  Certiorari  and  and Prohibition with Prayer for Issuance of W rit of Preliminary Injunction and/or Temporary Restraining Order 26 with the Court of Appeals.

Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order 27 dated February 23, 1995, prohibiting the respondent Judge from further conducting any proceeding, unless otherwise directed, in the interim. In another Resolution 28 promulgated on September 27, 1995, now assailed, the appellate court denied SAUDIA's Petition for the Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit: The Petition for the Issuance of a W rit of Preliminary Injunction is hereby DENIED, after considering the Answer, with Prayer to Deny Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder, it appearing that herein petitioner is not clearly entitled thereto ( Unciano Paramedical College, et . Al ., v. Court of Appeals, et . Al ., 100335, April 7, 1993, Second Division). SO ORDERED. On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition Prayer for Temporary Restraining Order dated October 13, 1995.

29

 for Review with

However, during the pendency of the instant Petition, respondent Court of Appeals rendered the Decision 30 dated April 10, 1996, now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaint's basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held that  certiorari  is not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal. On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining Order 31 dated April 30, 1996, given due course by this Court. After both parties submitted their Memoranda, 32 the instant case is now deemed submitted for decision. Petitioner SAUDIA raised the following issues: I The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article 21 of the New Civil Code since the proper law applicable is the law of the Kingdom of Saudi Arabia inasmuch as this case involves what is known in private international law as a "conflicts problem". Otherwise, the Republic of the Philippines will sit in judgment of the acts done by another sovereign state which is abhorred. II Leave of court before filing a supplemental pleading is not a jurisdictional requirement. Besides, the matter as to absence of leave of court is now moot and academic when this Honorable Court required the respondents to comment on petitioner's April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining Order Within Ten (10) Days From Notice Thereof. Further, the Revised Rules of Court should be construed with liberality pursuant to Section 2, Rule 1 thereof.

III Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al ." and filed its April 30, 1996 Supplemental Petition For Review With Prayer For  A Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period as provided for under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has not yet become final and executory and this Honorable Court can take cognizance of this case. 33 From the foregoing factual and procedural antecedents, the following issues emerge for our resolution: I. WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES". II. WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD GOVERN. Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondent's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of the  lex loci delicti commissi  rule. 34 On the other hand, private respondent contends that since her Amended Complaint is based on  Articles 19 35 and 21 36 of the Civil Code, then the instant case is properly a matter of domestic law. Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia.  As stated by private respondent in her Amended Complaint 38 dated June 23, 1994: 2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation doing business in the Philippines. It may be served with summons and other court processes at Travel Wide Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro Manila. xxx xxx xxx 6. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by

37

defendant SAUDIA. In September 1990, defendant SAUDIA transferred  plaintiff to Manila. 7. On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors reauested her to see MR. Ali Meniewy, Chief Legal Officer of SAUDIA in Jeddah, Saudi Arabia . When she saw him,

he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah. 8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Meniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sigh a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila . 9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIA's Manila manger, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her .

10. In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take that flight. At the Inflight Service Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders. 11. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing, and listening to the music in violation of Islamic laws; (3) socializing with the male crew, in contravention of Islamic tradition. 12. Because SAUDIA refused to lend her a hand in the case, plaintiff sought the help of the Philippines Embassy in Jeddah . The latter helped her pursue an appeal from the decision of the court. To pay for her upkeep, she worked on the domestic flights of defendant SAUDIA while, ironically, Thamer and  Allah freely served the international flights. 39

Where the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a "conflicts" case.  A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is said to contain a "foreign element". The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception. 40 The forms in which this foreign element may appear are many. 41 The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other cases, the foreign element may assume a complex form. 42 In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the petitioner Saudia as a flight stewardess, events did transpire during her many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a "conflicts" situation to arise. We thus find private respondent's assertion that the case is purely domestic, imprecise. A  conflicts problem presents itself here, and the question of jurisdiction 43 confronts the court  a quo.  After a careful study of the private respondent's Amended Complaint, 44 and the Comment thereon, we note that she aptly predicated her cause of action on Articles 19 and 21 of the New Civil Code. On one hand, Article 19 of the New Civil Code provides:  Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice give everyone his due and observe honesty and good faith. On the other hand, Article 21 of the New Civil Code provides:  Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages. Thus, in Philippine National Bank (PNB) vs. Court of Appeals , 45 this Court held that: The aforecited provisions on human relations were intended to expand the concept of torts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically provide in the statutes.  Although Article 19 merely declares a principle of law, Article 21 gives flesh to its provisions. Thus, we agree with private respondent's assertion that violations of Articles 19 and 21 are actionable, with  judicially enforceable remedies in the municipal forum. Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of Court on  jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City possesses jurisdiction over

the subject matter of the suit. 48 Its authority to try and hear the case is provided for under Section 1 of Republic Act No. 7691, to wit: Sec. 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows: Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive jurisdiction: xxx xxx xxx (8) In all other cases in which demand, exclusive of interest, damages of whatever kind , attorney's fees, litigation expenses, and cots or the value of the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the above-mentioned items exceeds Two hundred Thousand pesos (P200,000.00). (Emphasis ours) xxx xxx xxx  And following Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City, is appropriate: Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court] (a) xxx xxx xxx (b) Personal actions. — All other actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff resides, at the election of the plaintiff. Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally important. Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or "oppress" the defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. 49 Weighing the relative claims of the parties, the court  a quo found it best to hear the case in the Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private respondent now) to seek remedial action elsewhere,  i.e. in the Kingdom of Saudi Arabia where she no longer maintains substantial connections. That would have caused a fundamental unfairness to her. Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience have been shown by either of the parties. The choice of forum of the plaintiff (now private respondent) should be upheld.

Similarly, the trial court also possesses jurisdiction over the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private respondent has voluntary submitted herself to the jurisdiction of the court. The records show that petitioner SAUDIA has filed several motions 50 praying for the dismissal of Morada's Amended Complaint. SAUDIA also filed an Answer In  Ex Abundante Cautelam dated February 20, 1995. What is very patent and explicit from the motions filed, is that SAUDIA prayed for other reliefs under the premises. Undeniably, petitioner SAUDIA has effectively submitted to the trial court's jurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lack of jurisdiction.  As held by this Court in Republic vs. Ker and Company, Ltd .: 51 We observe that the motion to dismiss filed on April 14, 1962, aside from disputing the lower court's jurisdiction over defendant's person, prayed for dismissal of the complaint on the ground that plaintiff's cause of action has prescribed. By interposing such second ground in its motion to dismiss, Ker and Co., Ltd. availed of an affirmative defense on the basis of which it prayed the court to resolve controversy in its favor. For the court to validly decide the said plea of defendant Ker & Co., Ltd., it necessarily had to acquire  jurisdiction upon the latter's person, who, being the proponent of the affirmative defense, should be deemed to have abandoned its special appearance and voluntarily submitted itself to the jurisdiction of the court. Similarly, the case of  De Midgely vs. Ferandos, held that; When the appearance is by motion for the purpose of objecting to the  jurisdiction of the court over the person, it must be for the sole and separate purpose of objecting to the jurisdiction of the court. If his motion is for any other purpose than to object to the jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of the court. A special appearance by motion made for the purpose of objecting to the jurisdiction of the court over the person will be held to be a general appearance, if the party in said motion should, for example, ask for a dismissal of the action upon the further ground that the court had no jurisdiction over the subject matter. 52 Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon City. Thus, we find that the trial court has jurisdiction over the case and that its exercise thereof, justified.  As to the choice of applicable law, we note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the chosen legal system regulate the situation. 53 Several theories have been propounded in order to identify the legal system that should ultimately control. Although ideally, all choice-of-law theories should intrinsically advance both notions of  justice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important values should be stressed. 54 Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is known as "characterization", or the "doctrine of qualification". It

is the "process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule." 55 The purpose of "characterization" is to enable the forum to select the proper law.

56

Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact. 57 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. 58 Note that one or more circumstances may be present to serve as the possible test for the determination of the applicable law. 59 These "test factors" or "points of contact" or "connecting factors" could be any of the following: (1) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin; (2) the seat of a legal or juridical person, such as a corporation; (3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the  lex situs is decisive when real rights are involved; (4) the place where an act has been done, the locus actus, such as the place where a contract has been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in contracts and torts;

(5) the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercised; (6) the intention of the contracting parties as to the law that should govern their agreement, the  lex loci intentionis; (7) the place where judicial or administrative proceedings are instituted or done. The  lex fori — the law of the forum — is particularly important because, as we have seen earlier, matters of "procedure" not going to the substance of the claim involved are governed by it; and because the  lex fori  applies whenever the content of the otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under one of the exceptions to the applications of foreign law; and (8) the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment. 60 (Emphasis ours.)

 After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed admitted for purposes of the motion to dismiss, we are convinced that there is reasonable basis for private respondent's assertion that although she was already working in Manila, petitioner brought her to Jeddah on the pretense that she would merely testify in an investigation of the charges she made against the two SAUDIA crew members for the attack on her person while they

were in Jakarta. As it turned out, she was the one made to face trial for very serious charges, including adultery and violation of Islamic laws and tradition. There is likewise logical basis on record for the claim that the "handing over" or "turning over" of the person of private respondent to Jeddah officials, petitioner may have acted beyond its duties as employer. Petitioner's purported act contributed to and amplified or even proximately caused additional humiliation, misery and suffering of private respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution of private respondent under the guise of petitioner's authority as employer, taking advantage of the trust, confidence and faith she reposed upon it. As purportedly found by the Prince of Makkah, the alleged conviction and imprisonment of private respondent was wrongful. But these capped the injury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to provide compensation or redress for the wrongs done, once duly proven. Considering that the complaint in the court  a quo is one involving torts, the "connecting factor" or "point of contact" could be the place or places where the tortious conduct or  lex loci actus occurred.  And applying the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its duties, "act with justice, give her due and observe honesty and good faith." Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is important here is the place where the over-all harm or the totality of the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort. Moreover, with the widespread criticism of the traditional rule of  lex loci delicti commissi , modern theories and rules on tort liability 61 have been advanced to offer fresh judicial approaches to arrive at  just results. In keeping abreast with the modern theories on tort liability, we find here an occasion to apply the "State of the most significant relationship" rule, which in our view should be appropriate to apply now, given the factual context of this case. In applying said principle to determine the State which has the m ost significant relationship, the following contacts are to be taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. 62  As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines. There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the "relationship" between the parties was centered here, although it should be stressed that this suit is not based on mere labor law violations. From the record, the claim that the Philippines has the most significant contact with the matter in this dispute, 63 raised by private respondent as plaintiff below against defendant (herein petitioner), in our view, has been properly established. Prescinding from this premise that the Philippines is the situs of the tort complained of and the place "having the most interest in the problem", we find, by way of recapitulation, that the Philippine law on

tort liability should have paramount application to and control in the resolution of the legal issues arising out of this case. Further, we hold that the respondent Regional Trial Court has jurisdiction over the parties and the subject matter of the complaint; the appropriate venue is in Quezon City, which could properly apply Philippine law. Moreover, we find untenable petitioner's insistence that "[s]ince private respondent instituted this suit, she has the burden of pleading and proving the applicable Saudi law on the matter." 64 As aptly said by private respondent, she has "no obligation to plead and prove the law of the Kingdom of Saudi Arabia since her cause of action is based on  Articles 19 and 21" of the Civil Code of the Philippines. In her Amended Complaint and subsequent pleadings, she never alleged that Saudi law should govern this case. 65 And as correctly held by the respondent appellate court, "considering that it was the petitioner who was invoking the applicability of the law of Saudi Arabia, then the burden was on it [petitioner] to plead and to establish what the law of Saudi Arabia is". 66 Lastly, no error could be imputed to the respondent appellate court in upholding the trial court's denial of defendant's (herein petitioner's) motion to dismiss the case. Not only was jurisdiction in order and venue properly laid, but appeal after trial was obviously available, and expeditious trial itself indicated by the nature of the case at hand. Indubitably, the Philippines is the state intimately concerned with the ultimate outcome of the case below, not just for the benefit of all the litigants, but also for the vindication of the country's system of law and justice in a transnational setting. With these guidelines in mind, the trial court must proceed to try and adjudge the case in the light of relevant Philippine law, with due consideration of the foreign element or elements involved. Nothing said herein, of course, should be construed as prejudging the results of the case in any manner whatsoever. WHEREFORE, the instant petition for  certiorari  is hereby DISMISSED. Civil Case No. Q-93-18394 entitled "Milagros P. Morada vs. Saudi Arabia Airlines" is hereby REMANDED to Regional Trial Court of Quezon City, Branch 89 for further proceedings. SO ORDERED. Davide, Jr., Bellosillo, Vitug and Panganiban, JJ., concur. G.R. No. L-22595

November 1, 1927

Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator,   petitioner-appellee,

vs. ANDRE BRIMO, opponent-appellant. Ross, Lawrence and Selph for appellant. Camus and Delgado for appellee.

ROMUALDEZ, J .: 

The partition of the estate left by the deceased Joseph G. Brimo is in question in this case. The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the brothers of the deceased, opposed it. The court, however, approved it. The errors which the oppositor-appellant assigns are:

(1) The approval of said scheme of partition; (2) denial of his participation in the inheritance; (3) the denial of the motion for reconsideration of the order approving the partition; (4) the approval of the purchase made by the Pietro Lana of the deceased's business and the deed of transfer of said business; and (5) the declaration that the Turkish laws are impertinent to this cause, and the failure not to postpone the approval of the scheme of partition and the delivery of the deceased's business to Pietro Lanza until the receipt of the depositions requested in reference to the Turkish laws. The appellant's opposition is based on the fact that the partition in question puts into effect the provisions of Joseph G. Brimo's will which are not in accordance with the laws of his Turkish nationality, for which reason they are void as being in violation or article 10 of the Civil Code which, among other things, provides the following: Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the amount of the successional rights and the intrinsic validity of their provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be the nature of the property or the country in which it may be situated. But the fact is that the oppositor did not prove that said testimentary dispositions are not in accordance with the Turkish laws, inasmuch as he did not present any evidence showing what the Turkish laws are on the matter, and in the absence of evidence on such laws, they are presumed to be the same as those of the Philippines. (Lim and Lim vs. Collector of Customs, 36 Phil., 472.) It has not been proved in these proceedings what the Turkish laws are. He, himself, acknowledges it when he desires to be given an opportunity to present evidence on this point; so much so that he assigns as an error of the court in not having deferred the approval of the scheme of partition until the receipt of certain testimony requested regarding the Turkish laws on the matter. The refusal to give the oppositor another opportunity to prove such laws does not constitute an error. It is discretionary with the trial court, and, taking into consideration that the oppositor was granted ample opportunity to introduce competent evidence, we find no abuse of discretion on the part of the court in this particular. There is, therefore, no evidence in the record that the national law of the testator Joseph G. Brimo was violated in the testamentary dispositions in question which, not being contrary to our laws in force, must be complied with and executed. lawphil.net 

Therefore, the approval of the scheme of partition in this respect was not erroneous. In regard to the first assignment of error which deals with the exclusion of the herein appellant as a legatee, inasmuch as he is one of the persons designated as such in will, it must be taken into consideration that such exclusion is based on the last part of the second clause of the will, which says: Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship having been conferred upon me by conquest and not by free choice, nor by nationality and, on the other hand, having resided for a considerable length of time in the Philippine Islands where I succeeded in acquiring all of the property that I now possess, it is my wish that the distribution of my property and everything in connection with this, my will, be made and disposed of in accordance with the laws in force in the Philippine islands, requesting all of my relatives to respect this wish, otherwise, I annul and cancel beforehand whatever disposition found in this will favorable to the person or persons who fail to comply with this request.

The institution of legatees in this will is conditional, and the condition is that the instituted legatees must respect the testator's will to distribute his property, not in accordance with the laws of his nationality, but in accordance with the laws of the Philippines. If this condition as it is expressed were legal and valid, any legatee who fails to comply with it, as the herein oppositor who, by his attitude in these proceedings has not respected the will of the testator, as expressed, is prevented from receiving his legacy. The fact is, however, that the said condition is void, being contrary to law, for article 792 of the civil Code provides the following: Impossible conditions and those contrary to law or good morals shall be considered as not imposed and shall not prejudice the heir or legatee in any manner whatsoever, even should the testator otherwise provide.  And said condition is contrary to law because it expressly ignores the testator's national law when, according to article 10 of the civil Code above quoted, such national law of the testator is the one to govern his testamentary dispositions. Said condition then, in the light of the legal provisions above cited, is considered unwritten, and the institution of legatees in said will is unconditional and consequently valid and effective even as to the herein oppositor. It results from all this that the second clause of the will regarding the law which shall govern it, and to the condition imposed upon the legatees, is null and void, being contrary to law.  All of the remaining clauses of said will with all their dispositions and requests are perfectly valid and effective it not appearing that said clauses are contrary to the testator's national law. Therefore, the orders appealed from are modified and it is directed that the distribution of this estate be made in such a manner as to include the herein appellant Andre Brimo as one of the legatees, and the scheme of partition submitted by the judicial administrator is approved in all other respects, without any pronouncement as to costs. So ordered. Street, Malcolm, Avanceña, Villamor and Ostrand, JJ., concur. G.R. No. L-23678

June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased. PEOPLE'S BANK and TRUST COMPANY,  executor. MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS,   oppositors-appellants,

vs. EDWARD A. BELLIS, ET AL., heirs-appellees. Vicente R. Macasaet and Jose D. Villena for oppositors appellants. Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al. Quijano and Arroyo for heirs-appellees W. S. Bellis, et al. J. R. Balonkita for appellee People's Bank & Trust Company. Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J .: 

This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First Instance of Manila dated April 30, 1964, approving the project of partition filed by the executor in Civil Case No. 37089 therein. 1äwphï1.ñët 

The facts of the case are as follows:  Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By his first wife, Mary E. Mallen, whom he divorced, he had five legitimate children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis  Allsman; by his second wife, Violet Kennedy, who survived him, he had three legitimate children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate children:  Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis. On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that after all taxes, obligations, and expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner: (a) $240,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two items have been satisfied, the remainder shall go to his seven surviving children by his first and second wives, namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, W alter S. Bellis, and Dorothy E. Bellis, in equal shares. 1äwphï1.ñët 

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A. His will was admitted to probate in the Court of First Instance of Manila on September 15, 1958. The People's Bank and Trust Company, as executor of the will, paid all the bequests therein including the amount of $240,000.00 in the form of shares of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts totalling P40,000.00 each in satisfaction of their respective legacies, or a total of P120,000.00, which it released from time to time according as the lower court approved and allowed the various motions or petitions filed by the latter three requesting partial advances on account of their respective legacies. On January 8, 1964, preparatory to closing its administration, the executor submitted and filed its "Executor's Final Account, Report of Administration and Project of Partition" wherein it reported, inter alia, the satisfaction of the legacy of Mary E. Mallen by the delivery to her of shares of stock amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In the project of partition, the executor — pursuant to the "Twelfth" clause of the testator's Last Will and Testament — divided the residuary estate into seven equal portions for the benefit of the testator's seven legitimate children by his first and second marriages. On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions to the project of partition on the ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased.  Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is evidenced by the registry receipt submitted on April 27, 1964 by the executor. 1

 After the parties filed their respective memoranda and other pertinent pleadings, the lower court, on  April 30, 1964, issued an order overruling the oppositions and approving the executor's final account, report and administration and project of partition. Relying upon Art. 16 of the Civil Code, it applied the national law of the decedent, which in this case is Texas law, which did not provide for legitimes. Their respective motions for reconsideration having been denied by the lower court on June 11, 1964, oppositors-appellants appealed to this Court to raise the issue of which law must apply — Texas law or Philippine law. In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent where the decedent is a national of one country, and a domicile of another. In the present case, it is not disputed that the decedent was both a national of Texas and a domicile thereof at the time of his death.2 So that even assuming Texas has a conflict of law rule providing that the domiciliary system (law of the domicile) should govern, the same would not result in a reference back (renvoi) to Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling for the application of the law of the place where the properties are situated, renvoi would arise, since the properties here involved are found in the Philippines. In the absence, however, of proof as to the conflict of law rule of Texas, it should not be presumed different from ours. 3 Appellants' position is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even mentioned it in their arguments. Rather, they argue that their case falls under the circumstances mentioned in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.  Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in intestate or testamentary successions, with regard to four items: (a) the order of succession; (b) the amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the capacity to succeed. They provide that —  ART. 16. Real property as well as personal property is subject to the law of the country where it is situated. However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may he the nature of the property and regardless of the country wherein said property may be found.  ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.  Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that — Prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct. Precisely, Congress deleted the phrase, "notwithstanding the provisions of this and the next preceding article" when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while reproducing without substantial change the second paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must have been their purpose to make the second paragraph of Art.

16 a specific provision in itself which must be applied in testate and intestate succession. As further indication of this legislative intent, Congress added a new provision, under Art. 1039, which decrees that capacity to succeed is to be governed by the national law of the decedent. It is therefore evident that whatever public policy or good customs may be involved in our System of legitimes, Congress has not intended to extend the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to the decedent's national law. Specific provisions must prevail over general ones.  Appellants would also point out that the decedent executed two wills — one to govern his Texas estate and the other his Philippine estate — arguing from this that he intended Philippine law to govern his Philippine estate. Assuming that such was the decedent's intention in executing a separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to the effect that his properties shall be distributed in accordance with Philippine law and not with his national law, is illegal and void, for his national law cannot be ignored in regard to those matters that Article 10 — now Article 16 — of the Civil Code states said national law should govern. The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of the provision of the will and the amount of successional rights are to be determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis. Wherefore, the order of the probate court is hereby affirmed in toto, with costs against appellants. So ordered. Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur. G.R. No. L-16749

January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED. ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased,  Executor and

Heir-appellees, vs. HELEN CHRISTENSEN GARCIA,   oppositor-appellant. M. R. Sotelo for executor and heir-appellees. Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant. LABRADOR, J .: 

This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, dated September 14, 1949, approving among things the final accounts of the executor, directing the executor to reimburse Maria Lucy Christensen the amount of P3,600 paid by her to Helen Christensen Garcia as her legacy, and declaring Maria Lucy Christensen entitled to the residue of the property to be enjoyed during her lifetime, and in case of death without issue, one-half of said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in accordance with the provisions of the will of the testator Edward E. Christensen. The will was executed in Manila on March 5, 1951 and contains the following provisions:

3. I declare ... that I have but ONE (1) child, named MARIA LUCY CHRISTENSEN (now Mrs. Bernard Daney), who was born in the Philippines about twenty-eight years ago, and who is now residing at No. 665 Rodger Young Village, Los Angeles, California, U.S.A. 4. I further declare that I now have no living ascendants, and no descendants except my above named daughter, MARIA LUCY CHRISTENSEN DANEY. xxx

xxx

xxx

7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now married to Eduardo Garcia, about eighteen years of age and who, notwithstanding the fact that she was baptized Christensen, is not in any way related to me, nor has she been at any time adopted by me, and who, from all information I have now resides in Egpit, Digos, Davao, Philippines, the sum of THREE THOUSAND SIX HUNDRED PESOS (P3,600.00), Philippine Currency the same to be deposited in trust for the said Maria Helen Christensen with the Davao Branch of the Philippine National Bank, and paid to her at the rate of One Hundred Pesos (P100.00), Philippine Currency per month until the principal thereof as well as any interest which may have accrued thereon, is exhausted.. xxx

xxx

xxx

12. I hereby give, devise and bequeath, unto my well-beloved daughter, the said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing as aforesaid at No. 665 Rodger Young Village, Los Angeles, California, U.S.A., all the income from the rest, remainder, and residue of my property and estate, real, personal and/or mixed, of whatsoever kind or character, and wheresoever situated, of which I may be possessed at my death and which may have come to me from any source whatsoever, during her lifetime: .... It is in accordance with the above-quoted provisions that the executor in his final account and project of partition ratified the payment of only P3,600 to Helen Christensen Garcia and proposed that the residue of the estate be transferred to his daughter, Maria Lucy Christensen. Opposition to the approval of the project of partition was filed by Helen Christensen Garcia, insofar as it deprives her (Helen) of her legitime as an acknowledged natural child, she having been declared by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the deceased Edward E. Christensen. The legal grounds of opposition are (a) that the distribution should be governed by the laws of the Philippines, and (b) that said order of distribution is contrary thereto insofar as it denies to Helen Christensen, one of two acknowledged natural children, one-half of the estate in full ownership. In amplification of the above grounds it was alleged that the law that should govern the estate of the deceased Christensen should not be the internal law of California alone, but the entire law thereof because several foreign elements are involved, that the forum is the Philippines and even if the case were decided in California, Section 946 of the California Civil Code, which requires that the domicile of the decedent should apply, should be applicable. It was also alleged that Maria Helen Christensen having been declared an acknowledged natural child of the decedent, she is deemed for all purposes legitimate from the time of her birth. The court below ruled that as Edward E. Christensen was a citizen of the United States and of the State of California at the time of his death, the successional rights and intrinsic validity of the provisions in his will are to be governed by the law of California, in accordance with which a testator has the right to dispose of his property in the way he desires, because the right of absolute dominion over his property is sacred and inviolable (In re McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor

Maria Helen Christensen, through counsel, filed various motions for reconsideration, but these were denied. Hence, this appeal. The most important assignments of error are as follows: I THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER JUST SHARE IN THE INHERITANCE. II THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES CALLING FOR THE  APPLICATION OF INTERNAL LAW. III THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE DISTRIBUTION OF THE ESTATE OF THE DECEASED EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES. IV THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS. V THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE IN FULL OWNERSHIP. There is no question that Edward E. Christensen was a citizen of the United States and of the State of California at the time of his death. But there is also no question that at the time of his death he was domiciled in the Philippines, as witness the following facts admitted by the executor himself in appellee's brief: In the proceedings for admission of the will to probate, the facts of record show that the deceased Edward E. Christensen was born on November 29, 1875 in New York City, N.Y., U.S.A.; his first arrival in the Philippines, as an appointed school teacher, was on July 1, 1901, on board the U.S. Army Transport "Sheridan" with Port of Embarkation as the City of San Francisco, in the State of California, U.S.A. He stayed in the Philippines until 1904. In December, 1904, Mr. Christensen returned to the United States and stayed there for the following nine years until 1913, during which time he resided in, and was teaching school in Sacramento, California.

Mr. Christensen's next arrival in the Philippines was in July of the year 1913. However, in 1928, he again departed the Philippines for the United States and came back here the following year, 1929. Some nine years later, in 1938, he again returned to his own country, and came back to the Philippines the following year, 1939. Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët 

Being an American citizen, Mr. Christensen was interned by the Japanese Military Forces in the Philippines during World War II. Upon liberation, in April 1945, he left for the United States but returned to the Philippines in December, 1945. Appellees Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, 1953.) In April, 1951, Edward E. Christensen returned once more to California shortly after the making of his last will and testament (now in question herein) which he executed at his lawyers' offices in Manila on March 5, 1951. He died at the St. Luke's Hospital in the City of Manila on April 30, 1953. (pp. 2-3) In arriving at the conclusion that the domicile of the deceased is the Philippines, we are persuaded by the fact that he was born in New York, migrated to California and resided there for nine years, and since he came to the Philippines in 1913 he returned to California very rarely and only for short visits (perhaps to relatives), and considering that he appears never to have owned or acquired a home or properties in that state, which would indicate that he would ultimately abandon the Philippines and make home in the State of California. Sec. 16. Residence is a term used with many shades of meaning from mere temporary presence to the most permanent abode. Generally, however, it is used to denote something more than mere physical presence. (Goodrich on Conflict of Laws, p. 29)  As to his citizenship, however, We find that the citizenship that he acquired in California when he resided in Sacramento, California from 1904 to 1913, was never lost by his stay in the Philippines, for the latter was a territory of the United States (not a state) until 1946 and the deceased appears to have considered himself as a citizen of California by the fact that when he executed his will in 1951 he declared that he was a citizen of that State; so that he appears never to have intended to abandon his California citizenship by acquiring another. This conclusion is in accordance with the following principle expounded by Goodrich in his Conflict of Laws. The terms "'residence" and "domicile" might well be taken to mean the same thing, a place of permanent abode. But domicile, as has been shown, has acquired a technical meaning. Thus one may be domiciled in a place where he has never been. And he may reside in a place where he has no domicile. The man with two homes, between which he divides his time, certainly resides in each one, while living in it. But if he went on business which would require his presence for several weeks or months, he might properly be said to have sufficient connection with the place to be called a resident. It is clear, however, that, if he treated his settlement as continuing only for the particular business in hand, not giving up his former "home," he could not be a domiciled New Yorker. Acquisition of a domicile of choice requires the exercise of intention as well as physical presence. "Residence simply requires bodily presence of an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile." Residence, however, is a term used with many shades of meaning, from the merest temporary presence to the most

permanent abode, and it is not safe to insist that any one use et the only proper one. (Goodrich, p. 29) The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows:  ART. 16. Real property as well as personal property is subject to the law of the country where it is situated. However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found. The application of this article in the case at bar requires the determination of the meaning of the term "national law"  is used therein. There is no single American law governing the validity of testamentary provisions in the United States, each state of the Union having its own private law applicable to its citizens only and in force only within the state. The "national law" indicated in Article 16 of the Civil Code above quoted can not, therefore, possibly mean or apply to any general American law. So it can refer to no other than the private law of the State of California. The next question is: What is the law in California governing the disposition of personal property? The decision of the court below, sustains the contention of the executor-appellee that under the California Probate Code, a testator may dispose of his property by will in the form and manner he desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant invokes the provisions of Article 946 of the Civil Code of California, which is as follows: If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile. The existence of this provision is alleged in appellant's opposition and is not denied. We have checked it in the California Civil Code and it is there. Appellee, on the other hand, relies on the case cited in the decision and testified to by a witness. (Only the case of Kaufman is correctly cited.) It is argued on executor's behalf that as the deceased Christensen was a citizen of the State of California, the internal law thereof, which is that given in the abovecited case, should govern the determination of the validity of the testamentary provisions of Christensen's will, such law being in force in the State of California of which Christensen was a citizen. Appellant, on the other hand, insists that Article 946 should be applicable, and in accordance therewith and following the doctrine of the renvoi , the question of the validity of the testamentary provision in question should be referred back to the law of the decedent's domicile, which is the Philippines. The theory of doctrine of renvoi  has been defined by various authors, thus: The problem has been stated in this way: "When the Conflict of Laws rule of the forum refers a jural matter to a foreign law for decision, is the reference to the purely internal rules of law of the foreign system; i.e., to the totality of the foreign law minus its Conflict of Laws rules?"

On logic, the solution is not an easy one. The Michigan court chose to accept the renvoi, that is, applied the Conflict of Laws rule of Illinois which referred the matter back to Michigan law. But once having determined the the Conflict of Laws principle is the rule looked to, it is difficult to see why the reference back should not have been to Michigan Conflict of Laws. This would have resulted in the "endless chain of references" which has so often been criticized be legal writers. The opponents of the renvoi would have looked merely to the internal law of Illinois, thus rejecting the renvoi or the reference back. Yet there seems no compelling logical reason why the original reference should be the internal law rather than to the Conflict of Laws rule. It is true that such a solution avoids going on a merry-go-round, but those who have accepted the renvoi theory avoid this inextricabilis circulas by getting off at the second reference and at that point applying internal law. Perhaps the opponents of the renvoi  are a bit more consistent for they look always to internal law as the rule of reference. Strangely enough, both the advocates for and the objectors to the renvoi  plead that greater uniformity will result from adoption of their respective views. And still more strange is the fact that the only way to achieve uniformity in this choice-of-law problem is if in the dispute the two states whose laws form the legal basis of the litigation disagree as to whether the renvoi  should be accepted. If both reject, or both accept the doctrine, the result of the litigation will vary with the choice of the forum. In the case stated above, had the Michigan court rejected the renvoi , judgment would have been against the woman; if the suit had been brought in the Illinois courts, and they too rejected the renvoi , judgment would be for the woman. The same result would happen, though the courts would switch with respect to which would hold liability, if both courts accepted the renvoi . The Restatement accepts the renvoi  theory in two instances: where the title to land is in question, and where the validity of a decree of divorce is challenged. In these cases the Conflict of Laws rule of the situs of the land, or the domicile of the parties in the divorce case, is applied by the forum, but any further reference goes only to the internal law. Thus, a person's title to land, recognized by the situs, will be recognized by every court; and every divorce, valid by the domicile of the parties, will be valid everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.) X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving movable property in Massachusetts, England, and France. The question arises as to how this property is to be distributed among X's next of kin.  Assume (1) that this question arises in a Massachusetts court. There the rule of the conflict of laws as to intestate succession to movables calls for an application of the law of the deceased's last domicile. Since by hypothesis X's last domicile was France, the natural thing for the Massachusetts court to do would be to turn to French statute of distributions, or whatever corresponds thereto in French law, and decree a distribution accordingly. An examination of French law, however, would show that if a French court were called upon to determine how this property should be distributed, it would refer the distribution to the national law of the deceased, thus applying the Massachusetts statute of distributions. So on the surface of things the Massachusetts court has open to it alternative course of action: (a) either to apply the French law is to intestate succession, or (b) to resolve itself into a French court and apply the Massachusetts statute of distributions, on the assumption that this is what a French court would do. If it accepts the so-called renvoi  doctrine, it will follow the latter course, thus applying its own law. This is one type of renvoi . A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back

again to the law of the forum. This is renvoi in the narrower sense. The German term for this  judicial process is 'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523-571.)  After a decision has been arrived at that a foreign law is to be resorted to as governing a particular case, the further question may arise: Are the rules as to the conflict of laws contained in such foreign law also to be resorted to? This is a question which, while it has been considered by the courts in but a few instances, has been the subject of frequent discussion by textwriters and essayists; and the doctrine involved has been descriptively designated by them as the "Renvoyer" to send back, or the "Ruchversweisung", or the "Weiterverweisung", since an affirmative answer to the question postulated and the operation of the adoption of the foreign law in toto would in many cases result in returning the main controversy to be decided according to the law of the forum. ... (16 C.J.S. 872.)  Another theory, known as the "doctrine of renvoi ", has been advanced. The theory of the doctrine of renvoi  is that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum. The doctrine of the renvoi  has generally been repudiated by the American authorities. (2 Am. Jur. 296) The scope of the theory of renvoi  has also been defined and the reasons for its application in a country explained by Prof. Lorenzen in an article in the Yale Law Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of the article are quoted herein below: The recognition of the renvoi  theory implies that the rules of the conflict of laws are to be understood as incorporating not only the ordinary or internal law of the foreign state or country, but its rules of the conflict of laws as well. According to this theory 'the law of a country' means the whole of its law. xxx

xxx

xxx

Von Bar presented his views at the meeting of the Institute of International Law, at Neuchatel, in 1900, in the form of the following theses: (1) Every court shall observe the law of its country as regards the application of foreign laws. (2) Provided that no express provision to the contrary exists, the court shall respect: (a) The provisions of a foreign law which disclaims the right to bind its nationals abroad as regards their personal statute, and desires that said personal statute shall be determined by the law of the domicile, or even by the law of the place where the act in question occurred. (b) The decision of two or more foreign systems of law, provided it be certain that one of them is necessarily competent, which agree in attributing the determination of a question to the same system of law. xxx

xxx

xxx

If, for example, the English law directs its judge to distribute the personal estate of an Englishman who has died domiciled in Belgium in accordance with the law of his domicile, he

must first inquire whether the law of Belgium would distribute personal property upon death in accordance with the law of domicile, and if he finds that the Belgian law would make the distribution in accordance with the law of nationality — that is the English law — he must accept this reference back to his own law. We note that Article 946 of the California Civil Code is its conflict of laws rule, while the rule applied in In re Kaufman, Supra, its internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the principle cited In re Kaufman should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The rule laid down of resorting to the law of the domicile in the determination of matters with foreign element involved is in accord with the general principle of American law that the domiciliary law should govern in most matters or rights which follow the person of the owner. When a man dies leaving personal property in one or more states, and leaves a will directing the manner of distribution of the property, the law of the state where he was domiciled at the time of his death will be looked to in deciding legal questions about the will, almost as completely as the law of situs is consulted in questions about the devise of land. It is logical that, since the domiciliary rules control devolution of the personal estate in case of intestate succession, the same rules should determine the validity of an attempted testamentary dispostion of the property. Here, also, it is not that the domiciliary has effect beyond the borders of the domiciliary state. The rules of the domicile are recognized as controlling by the Conflict of Laws rules at the situs property, and the reason for the recognition as in the case of intestate succession, is the general convenience of the doctrine. The New York court has said on the point: 'The general principle that a dispostiton of a personal property, valid at the domicile of the owner, is valid anywhere, is one of the universal application. It had its origin in that international comity which was one of the first fruits of civilization, and it this age, when business intercourse and the process of accumulating property take but little notice of boundary lines, the practical wisdom and justice of the rule is more apparent than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)  Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as the national law  is the internal law of California. But as above explained the laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other  jurisdictions. Reason demands that We should enforce the California internal law prescribed for its citizens residing therein, and enforce the conflict of laws rules for the citizens domiciled abroad. If we must enforce the law of California as in comity we are bound to go, as so declared in Article 16 of our Civil Code, then we must enforce the law of California in accordance with the express mandate thereof and as above explained, i.e., apply the internal law for residents therein, and its conflict-oflaws rule for those domiciled abroad. It is argued on appellees' behalf that the clause "if there is no law to the contrary in the place where the property is situated" in Sec. 946 of the California Civil Code refers to Article 16 of the Civil Code of the Philippines and that the law to the contrary in the Philippines is the provision in said Article 16 that the national law  of the deceased should govern. This contention can not be sustained. As explained in the various authorities cited above the national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, the Philippines in the case at bar. The court of the domicile can not and should not refer the case back to California; such action would leave the issue incapable of determination because the case will then be like a football, tossed back and forth between the two states, between the country of which the decedent was a citizen and the country of his domicile. The

Philippine court must apply its own law as directed in the conflict of laws rule of the state of the decedent, if the question has to be decided, especially as the application of the internal law of California provides no legitime for children while the Philippine law, Arts. 887(4) and 894, Civil Code of the Philippines, makes natural children legally acknowledged forced heirs of the parent recognizing them. The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.) cited by appellees to support the decision can not possibly apply in the case at bar, for two important reasons, i.e., the subject in each case does not appear to be a citizen of a state in the United States but with domicile in the Philippines, and it does not appear in each case that there exists in the state of which the subject is a citizen, a law similar to or identical with  Art. 946 of the California Civil Code. We therefore find that as the domicile of the deceased Christensen, a citizen of California, is the Philippines, the validity of the provisions of his will depriving his acknowledged natural child, the appellant, should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of California, not by the internal law of California.. WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower court with instructions that the partition be made as the Philippine law on succession provides. Judgment reversed, with costs against appellees. Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur. Bengzon, C.J., took no part. G.R. No. 159507

April 19, 2006

ANICETO G. SALUDO, JR., Petitioner, vs. AMERICAN EXPRESS INTERNATIONAL, INC., and/or IAN T. FISH and DOMINIC MASCRINAS, Respondents.

DECISION CALLEJO, SR., J .: 

Before the Court is the Petition for Review on Certiorari filed by Aniceto G. Saludo, Jr. seeking to reverse and set 1 aside the Decision dated May 22, 2003 of the Court of Appeals in CA-G.R. SP No. 69553. The assailed decision directed the Regional Trial Court (RTC) of Maasin City, Southern Leyte, Branch 25 thereof, to vacate and set aside its 2 Orders dated September 10, 2001 and January 2, 2002 in Civil Case No. R-3172, and enjoined the presiding judge thereof from conducting further proceedings in said case, except to dismiss the complaint filed therewith on ground of improper venue. The petition also seeks to reverse and set aside the appellate court's Resolution dated August 14, 2003 denying the motion for reconsideration of the assailed decision. The factual and procedural antecedents are as follows:  Aniceto G. Saludo, Jr. filed a complaint for damages against the American E xpress International, Inc. (AMEX) and/or its officers Ian T. Fish, Vice-President and Country Manager, and Dominic Mascrinas, Head of Operations, with the RTC of Maasin City, Southern Leyte. The case was raffled to Branch 25 of the said court. The complaint alleged, inter alia, that plaintiff (herein petitioner Saludo) "is a Filipino citizen, of legal age, and a member of the House of Representatives and a resident of Ichon, Macrohon, Southern Leyte, Philippines." On the other hand, defendant (herein respondent AMEX, Inc.) "is a corporation doing business in the Philippines and

engaged in providing credit and other credit facilities and allied services with office address at 4th floor, ACE Building, Rada Street, Legaspi Village, Makati City." The other defendants (herein respondents Fish and Mascrinas) are officers of respondent AMEX, and may be served with summons and other court processes at their office address. The complaint's cause of action stemmed from the alleged wrongful dishonor of petitioner Saludo's AMEX credit card and the supplementary card issued to his daughter. The first dishonor happened when petitioner Saludo's daughter used her supplementary credit card to pay her purchases in the United States some time in April 2000. The second dishonor occurred when petitioner Saludo used his principal credit card to pay his account at the Hotel Okawa in Tokyo, Japan while he was there with other delegates from the Philippines to attend the Congressional Recognition in honor of Mr. Hiroshi Tanaka. The dishonor of these AMEX credit cards were allegedly unjustified as they resulted from respondents' unilateral act of suspending petitioner Saludo's account for his failure to pay its balance covering the period of March 2000. Petitioner Saludo denied having received the corresponding statement of account. Further, he was allegedly wrongfully charged for late payment in June 2000. Subsequently, his credit card and its supplementary cards were canceled by respondents on July 20, 2000. Petitioner Saludo claimed that he suffered great inconvenience, wounded feelings, mental anguish, embarrassment, humiliation and besmirched political and professional standing as a result of respondents' acts which were committed in gross and evident bad faith, and in wanton, reckless and oppressive manner. He thus prayed that respondents be adjudged to pay him, jointly and severally, actual, moral and exemplary damages, and attorney's fees. In their answer, respondents specifically denied the allegations in the complaint. Further, they raised the affirmative defenses of lack of cause of action and improper venue. On the latter, respondents averred that the complaint should be dismissed on the ground that venue was improperly laid because none of the parties was a resident of Leyte. They alleged that respondents were not residents of Southern Leyte. Moreover, notwithstanding the claim in his complaint, petitioner Saludo was not allegedly a resident thereof as evidenced by the fact that his community tax certificate, which was presented when he executed the complaint's verification and certification of non-forum shopping, was issued at Pasay City. To buttress their contention, respondents pointed out that petitioner Saludo's complaint was prepared in Pasay City and signed by a lawyer of the said city. Respondents prayed for the dismissal of the complaint a quo. Thereafter, respondents filed an Opposition to Ex-Parte Motion (to Set Case for Pre-Trial) and Motion for Preliminary Hearing (on Affirmative Defense of Improper Venue) to which petitioner Saludo filed his Comments and/or Objections to the Affirmative Defense of Improper Venue. He asserted that any allegation refuting his residency in Southern Leyte was baseless and unfounded considering that he was the congressman of the lone district thereof at the time of the filing of his complaint. He urged the court a quo to take judicial notice of this particular fact. As a member of Congress, he possessed all the qualifications prescribed by the Constitution including that of being a resident of his district. He was also a member of the Integrated Bar of the Philippines-Southern Leyte Chapter, and has been such ever since his admission to the Bar. His community tax certificate was issued at Pasay City only because he has an office thereat and the office messenger obtained the same in the said city. In any event, the community tax certificate is not determinative of one's residence. In the Order dated September 10, 2001, the court a quo denied the affirmative defenses interposed by respondents. It found the allegations of the complaint sufficient to constitute a cause of action against respondents. The court a quo likewise denied respondents' affirmative defense that venue was improperly laid. It reasoned, thus: x x x [T]he fact alone that the plaintiff at the time he filed the complaint was and still is, the incumbent Congressman of the Lone District of Southern Leyte with residence at Ichon, Macrohon, Southern Leyte, is enough to dispell any and all doubts about his actual residence. As a high-ranking government official of the province, his residence there can be taken judicial notice of. As such his personal, actual and physical habitation or his actual residence or place of abode can never be in some other place but in Ichon, Macrohon, Southern Leyte. It is correctly stated by the plaintiff, citing the case of Core v. Core, 100 Phil. 321 that, "residence, for purposes of fixing venue of an action, is synonymous with domicile. This is defined as the permanent home, the place to which, whenever absent for business or pleasure, one intends to return, and depends on the facts and circumstances, in the sense that they disclose intent. A person can have but one domicile at a time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. Venue could be at place of his residence. (Masa v. 3 Mison, 200 SCRA 715 [1991])

Respondents sought the reconsideration thereof but the court a quo denied the same in the Order dated January 2, 2002. They then filed with the appellate court a petition for certiorari and prohibition alleging grave abuse of discretion on the part of the presiding judge of the court a quo in issuing the September 10, 2001 and January 2, 2002 Orders. Upon respondents' posting of a bond, the appellate court issued on March 14, 2002 a temporary restraining order which enjoined the presiding judge of the court a quo from conducting further proceedings in Civil Case No. R-3172. On May 22, 2003, the appellate court rendered the assailed decision granting respondents' petition for certiorari as it found that venue was improperly laid. It directed the court a quo to vacate and set aside its Orders dated September 10, 2001 and January 2, 2002, and enjoined the presiding judge thereof from further proceeding in the case, except to dismiss the complaint. The appellate court explained that the action filed by petitioner Saludo against respondents is governed by Section 2, Rule 4 of the Rules of Court. The said rule on venue of personal actions basically provides that personal actions may be commenced and tried where plaintiff or any of the principal plaintiffs resides, or where defendant or any of the principal defendants resides, at the election of plaintiff. Venue was improperly laid in the court a quo, according to the appellate court, because not one of the parties was a resident of Southern Leyte. Specifically, it declared that petitioner Saludo was not a resident thereof. The appellate court pronounced that, for purposes of venue, the residence of a person is his personal, actual or physical habitation, or his actual residence or place of abode, which may not necessarily be his legal residence or domicile provided he 4 resides therein with continuity and consistency. 5

The appellate court quoted the following discussion in Koh v. Court of Appeals where the Court distinguished the terms "residence" and "domicile" in this wise: x x x [T]he term domicile is not exactly synonymous in legal contemplation with the term residence, for it is [an] established principle in Conflict of Laws that domicile refers to the relatively more permanent abode of a person while residence applies to a temporary stay of a person in a given place. In fact, this distinction is very well emphasized in those cases where the Domiciliary Theory must necessarily supplant the Nationality Theory in cases involving stateless persons. xxxx "There is a difference between domicile and residence. Residence is used to indicate a place of abode, whether permanent or temporary; domicile denotes a fixed permanent residence to which when absent, one has the intention of returning. A man may have a residence in one place and a domicile in another. Residence is not domicile, but domicile is residence coupled with intention to remain for an unlimited time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. His place of residence generally is his place of domicile, but is not by any means, necessarily so since no length of residence without intention of 6 remaining will constitute domicile." (Italicized for emphasis) In holding that petitioner Saludo is not a resident of Maasin City, Southern Leyte, the appellate court referred to his community tax certificate, as indicated in his complaint's verification and certification of non-forum shopping, which was issued at Pasay City. Similarly, it referred to the same community tax certificate, as indicated in his complaint for 7 deportation filed against respondents Fish and Mascrinas. Under Republic Act No. 7160, the community tax certificate shall be paid in the place of residence of the individual, or in the place where the principal office of the 8  juridical entity is located. It also pointed out that petitioner Saludo's law office, which was also representing him in the present case, is in Pasay City. The foregoing circumstances were considered by the appellate court as judicial admissions of petitioner Saludo which are conclusive upon him and no longer required proof. The appellate court chided the court a quo for stating that as incumbent congressman of the lone district of Southern Leyte, judicial notice could be taken of the fact of petitioner Saludo's residence thereat. No evidence had yet been adduced that petitioner Saludo was then the congressman of Southern Leyte and actual resident of Ichon, Macrohon of the said province. The appellate court held that, based on his complaint, petitioner Saludo was actually residing in Pasay City. It faulted him for filing his complaint with the court a quo when the said venue is inconvenient to the parties to the case. It opined that under the rules, the possible choices of venue are Pasay City or Makati City, or any place in the National Capital Judicial Region, at the option of petitioner Saludo.

It stressed that while the choice of venue is given to plaintiff, said choice is not left to his caprice and cannot deprive a 9 defendant of the rights conferred upon him by the Rules of Court. Further, fundamental in the law governing venue of actions that the situs for bringing real and personal civil actions is fixed by the rules to attain the greatest possible convenience to the party litigants by taking into consideration the maximum accessibility to them - i.e., to both plaintiff 10 and defendant, not only to one or the other - of the courts of justice. The appellate court concluded that the court a quo should have given due course to respondents' affirmative defense of improper venue in order to avoid any suspicion that petitioner Saludo's motive in filing his complaint with the court a quo was only to vex and unduly inconvenience respondents or even to wield influence in the outcome of the case, petitioner Saludo being a powerful and influential figure in the said province. The latter circumstance could be 11 regarded as a "specie of forum shopping" akin to that in Investors Finance Corp. v. Ebarle where the Court mentioned that the filing of the civil action before the court in Pagadian City "was a specie of forum shopping" considering that plaintiff therein was an influential person in the locality. The decretal portion of the assailed Decision dated May 22, 2003 of the appellate court reads: UPON THE VIEW WE TAKE OF THIS CASE, THUS, the challenged orders must be, as they hereby are, VACATED and SET ASIDE and the respondent judge, or any one acting in his place or stead, is instructed and enjoined to desist from further proceeding in the case, except to dismiss it. The temporary restraining order earlier issued is hereby converted into a writ of preliminary injunction, upon the posting this time by petitioners [herein respondents], within five (5) days from receipt of this decision, of a bond in the amount of Five Million Pesos (P5,000,000.00), to answer for all damages that private respondent [herein petitioner] may sustain by reason of the issuance of such injunction should the Court finally decide that petitioners are not entitled thereto. Private respondent, if he so minded, may refile his case for damages before the Regional Trial Court of Makati City or Pasay City, or any of the Regional Trial Courts of the National Capital Judicial Region. Without costs. SO ORDERED.

12

Petitioner Saludo sought the reconsideration of the said decision but the appellate court, in the Resolution dated  August 14, 2003, denied his motion for reconsideration. Hence, he filed the instant petition for review with the Cour t alleging that: The Court of Appeals, (Special Fourth Division), in promulgating the afore-mentioned Decision and Resolution, has decided a question of substance in a way probably not in accord with law or with applicable decisions of this Honorable Court. (a) the Court of Appeals erred in not taking judicial notice of the undisputed fact that herein petitioner is the incumbent congressman of the lone district of Southern Leyte and as such, he is a residence (sic) of said district; (b) the Court of Appeals erred in dismissing the complaint on the basis of improper venue due to the alleged  judicial admission of herein petitioner; (c) the Court of Appeals in dismissing the complaint ignored applicable decisions of this Honorable Court; and 1avvphil.net 

(d) the Court of Appeals erred in deciding that herein petitioner violated the rules on venue, and even speculated that herein petitioner's motive in filing the complaint in Maasin City was only to vex the 13 respondents. In gist, the sole substantive issue for the Court's resolution is whether the appellate court committed reversible error in holding that venue was improperly laid in the court a quo in Civil Case No. R-3172 because not one of the parties, including petitioner Saludo, as plaintiff therein, was a resident of Southern Leyte at the time of filing of the complaint. The petition is meritorious. Petitioner Saludo's complaint for damages against respondents before the court a quo is a personal action. As such, it is governed by Section 2, Rule 4 of the Rules of Courts which reads:

SEC. 2. Venue of personal actions. - All other actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a nonresident defendant where he may be found, at the election of the plaintiff. The choice of venue for personal actions cognizable by the RTC is given to plaintiff but not to plaintiff's caprice 14 because the matter is regulated by the Rules of Court. The rule on venue, like other procedural rules, is designed to insure a just and orderly administration of justice, or the impartial and evenhanded determination of every action and 15 proceeding. The option of plaintiff in personal actions cognizable by the RTC is either the place where defendant resides or may be found, or the place where plaintiff resides. If plaintiff opts for the latter, he is limited to that place.16 Following this rule, petitioner Saludo, as plaintiff, had opted to file his complaint with the court a quo which is in Maasin City, Southern Leyte. He alleged in his complaint that he was a member of the House of Representatives and a resident of Ichon, Macrohon, Southern Leyte to comply with the residency requirement of the rule. However, the appellate court, adopting respondents' theory, made the finding that petitioner Saludo was not a resident of Southern Leyte at the time of the filing of his complaint. It hinged the said finding mainly on the fact that petitioner Saludo's community tax certificate, indicated in his complaint's verification and certification of non-forum shopping, was issued at Pasay City. That his law office is in Pasay City was also taken by the appellate court as negating petitioner Saludo's claim of residence in Southern Leyte. The appellate court committed reversible error in finding that petitioner Saludo was not a resident of Southern Leyte at the time of the filing of his complaint, and consequently holding that venue was improperly laid in the court a quo. 17 In Dangwa Transportation Co., Inc. v. Sarmiento, the Court had the occasion to explain at length the meaning of the term "resides" for purposes of venue, thus: In Koh v. Court of Appeals, we explained that the term "resides" as employed in the rule on venue on personal actions filed with the courts of first instance means the place of abode, whether permanent or temporary, of the plaintiff or the defendant, as distinguished from "domicile" which denotes a fixed permanent residence to which, when absent, one has the intention of returning. "It is fundamental in the law governing venue of actions (Rule 4 of the Rules of Court) that the situs for bringing real and personal civil actions are fixed by the rules to attain the greatest convenience possible to the parties-litigants by taking into consideration the maximum accessibility to them of the courts of justice. It is, likewise, undeniable that the term domicile is not exactly synonymous in legal contemplation with the term residence, for it is an established principle in Conflict of Laws that domicile refers to the relatively more permanent abode of a person while residence applies to a temporary stay of a person in a given place. In fact, this distinction is very well emphasized in those cases where the Domiciliary Theory must necessarily supplant the Nationality Theory in cases involving stateless persons. "This Court held in the case of Uytengsu v. Republic, 50 O.G. 4781, October, 1954, reversing its previous stand in Larena v. Ferrer, 61 Phil. 36, and Nuval v. Guray, 52 Phil. 645, that 'There is a difference between domicile and residence. Residence is used to indicate a place of abode, whether permanent or temporary; domicile denotes a fixed permanent residence to which when absent, one has the intention of returning. A man may have a residence in one place and a domicile in another. Residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. His place of residence generally is his place of domicile, but is not by any means, necessarily so since no length of residence without intention of remaining will constitute domicile.' (Italicized for emphasis) "We note that the law on venue in Courts of First Instance (Section 2, of Rule 4, Rules of Court) in referring to the parties utilizes the words 'resides or may be found,' and not 'is domiciled,' thus: 'Sec. 2(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 plaintiffs resides, at the election of the plaintiff.' (Italicized for emphasis)

"Applying the foregoing observation to the present case, We are fully convinced that private respondent Coloma's protestations of domicile in San Nicolas, Ilocos Norte, based on his manifested intention to return there after the retirement of his wife from government service to justify his bringing of an action for damages against petitioner in the C.F.I. of Ilocos Norte, is entirely of no moment since what is of paramount importance is where he actually resided or where he may be found at the time he brought the action, to comply substantially with the requirements of Sec. 2(b) of Rule 4, Rules of Court, on venue of personal actions." (Koh v. Court of Appeals, supra, pp. 304-305.) The same construction of the word "resides" as used in Section 1, Rule 73, of the Revised Rules of Court, was enunciated in Fule v. Court of Appeals, et al. (G.R. No. L-40502) and Fule v. Hon. Ernani C. Paño, et al. (G.R. No. L42670), decided on November 29, 1976. Thus, this Court, in the aforecited cases, stated: "2. But, the far-ranging question is this: What does the term 'resides' mean? Does it refer to the actual residence or domicile of the decedent at the time of his death? We lay down the doctrinal rule that the term 'resides' connotes ex vi termini 'actual residence' as distinguished from 'legal residence or domicile.' This term 'resides,' like the terms 'residing' and 'residence' is elastic and should be interpreted in the light of the object or purposes of the statute or rule in which it is employed. In the application of venue statutes and rules - Section 1, Rule 73 of the Revised Rules of Court is of such nature - residence rather than domicile is the significant factor. Even where the statute uses the word 'domicile' still it is construed as meaning residence and not domicile in the technical sense. Some cases make a distinction between the terms 'residence' and 'domicile' but as generally used in statutes fixing venue, the terms are synonymous, and convey the same meaning as the term 'inhabitant.' In other words, 'resides' should be viewed or understood in its popular sense, meaning, the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile. No particular length of time of residence is required though; however, the 18 residence must be more than temporary." There is no dispute that petitioner Saludo was the congressman or the representative of the lone district of Southern Leyte at the time of filing of his complaint with the court a quo. Even the appellate court admits this fact as it states that "it may be conceded that private respondent ever so often travels to Maasin City, Southern Leyte, because he is 19 its representative in the lower house."  As a member of the House of Representatives, petitioner Saludo was correctly deemed by the court a quo as possessing the requirements for the said position,20 including that he was then a resident of the district which he was representing, i.e., Southern Leyte. Significantly, for purposes of election law, the term "residence" is synonymous with "domicile," thus: x x x [T]he Court held that "domicile" and "residence" are synonymous. The term "residence," as used in the election law, imports not only an intention to reside in a fixed place but also personal presence in that place, coupled with conduct indicative of such intention. "Domicile" denotes a fixed permanent residence to which when absent for 21 business or pleasure, or for like reasons, one intends to return. x x x It can be readily gleaned that the definition of "residence" for purposes of election law is more stringent in that it is equated with the term "domicile." Hence, for the said purpose, the term "residence" imports "not only an intention to 22 reside in a fixed place but also personal presence in that place, coupled with conduct indicative of such intention." When parsed, therefore, the term "residence" requires two elements: (1) intention to reside in the particular place; and (2) personal or physical presence in that place, coupled with conduct indicative of such intention. As the Court elucidated, "the place where a party actually or constructively has a permanent home, where he, no matter where he may be found at any given time, eventually intends to return and remain, i.e., his domicile, is that to which the 23 Constitution refers when it speaks of residence for the purposes of election law." On the other hand, for purposes of venue, the less technical definition of "residence" is adopted. Thus, it is understood to mean as "the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it 24 one's domicile."

Since petitioner Saludo, as congressman or the lone representative of the district of Southern Leyte, had his residence (or domicile) therein as the term is construed in relation to election laws, necessarily, he is also deemed to have had his residence therein for purposes of venue for filing personal actions. Put in another manner, Southern Leyte, as the domicile of petitioner Saludo, was also his residence, as the term is understood in its popular sense. This is because "residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited time." 25

26

Reliance by the appellate court on Koh v. Court of Appeals is misplaced. Contrary to its holding, the facts of the present case are not similar to the facts therein. In Koh, the complaint was filed with the Court of First Instance in San Nicolas, Ilocos Norte by plaintiff who admitted that he was a resident of Kamias, Quezon City. Save for the fact that he grew up in San Nicolas, Ilocos Norte and that he manifested the intent to return there after retirement, plaintiff therein had not established that he was actually a resident therein at the time of the filing of his complaint. Neither did he establish that he had his domicile therein because although he manifested the intent to go back there after retirement, the element of personal presence in that place was lacking. To reiterate, domicile or residence, as the terms are taken as synonyms, imports "not only an intention to reside in a fixed place but also personal presence in 27 that place, coupled with conduct indicative of such intention." In contrast, petitioner Saludo was the congressman or representative of Southern Leyte at the time of filing of his complaint with the court a quo. Absent any evidence to the contrary, he is deemed to possess the qualifications for the said position, including that he was a resident therein. And following the definition of the term "residence" for purposes of election law, petitioner Saludo not only had the intention to reside in Southern Leyte, but he also had personal presence therein, coupled with conduct indicative of such intention. The latter element, or his bodily presence as an inhabitant in Southern Leyte, was sufficient for petitioner Saludo to be considered a resident therein for purposes of venue. The following ratiocination of the court a quo is apt: Residence in civil law is a material fact, referring to the physical presence of a person in a place. A person can have two or more residences, such as a country residence and a city residence. (Quetulio v. Ruiz, S.C. Off. Gaz. 156, Commentaries and Jurisprudence in Civil Law, Vol. 1, page 211, Tolentino). Residence is acquired by living in a place; on the other hand, domicile can exist without actually living in the place. The important thing for domicile is that, once residence has been established in one place, there be an intention to stay there permanently, even if residence is also established in some other place. Thus, if a person lives with his family habitually in Quezon City, he would have his domicile in Quezon City. If he also has a house for vacation purposes in the City of Baguio, and another house in connection with his business in the City of Manila, he would have residence in all three places (Tolentino, Commentaries and Jurisprudence on Civil Law, Vol. 1, Page 212, 1990 Edition) so that one[']s legal residence or domicile can also be his actual, personal or physical residence or habitation or place of abode if he stays there with intention to stay there permanently. In the instant case, since plaintiff has a house in Makati City for the purpose of exercising his profession or doing business and also a house in Ichon, Macrohon, Southern Leyte, for doing business and/or for election or political purposes where he also lives or stays physically, personally and actually then he can have residences in these two places. Because it would then be preposterous to acknowledge and recognize plaintiff Aniceto G. Saludo, Jr. as congressman of Southern Leyte without also recognizing him as actually, personally and physically residing thereat, 28 when such residence is required by law. The fact then that petitioner Saludo's community tax certificate was issued at Pasay City is of no moment because granting arguendo that he could be considered a resident therein, the same does not preclude his having a residence in Southern Leyte for purposes of venue. A man can have but one domicile for one and the same purpose at any 29 time, but he may have numerous places of residence. That petitioner Saludo was the congressman or representative of the lone district of Southern Leyte at the time of the filing of his complaint was admitted as a fact by the court a quo. In this connection, it consequently held that, as such, petitioner Saludo's residence in Southern Leyte, the district he was the representing, could be taken judicial notice of. The court a quo cannot be faulted for doing so because courts are allowed "to take judicial notice of matters which are of public knowledge, or are capable of unquestionable demonstration, or ought to be known to judges because of 30 their judicial functions." Courts are likewise bound to take judicial notice, without the introduction of evidence, of the 31 law in force in the Philippines, including its Constitution.

The concept of "facts of common knowledge" in the context of judicial notice has been explained as those facts that are "so commonly known in the community as to make it unprofitable to require proof, and so certainly known to as to 32 make it indisputable among reasonable men." Moreover, "though usually facts of 'common knowledge' will be generally known throughout the country, it is sufficient as a basis for judicial notice that they be known in the local 33 community where the trial court sits." Certainly, the fact of petitioner Saludo being the duly elected representative of Southern Leyte at the time could be properly taken judicial notice of by the court a quo, the same being a matter of common knowledge in the community where it sits. Further, petitioner Saludo's residence in Southern Leyte could likewise be properly taken judicial notice of by the court a quo. It is bound to know that, under the Constitution, one of the qualifications of a congressman or representative to the House of Representatives is having a residence in the district in which he shall be elected. In fine, petitioner Saludo's act of filing his complaint with the court a quo cannot be characterized as a "specie of forum-shopping" or capricious on his part because, under the rules, as plaintiff, he is precisely given this option. Finally, respondents' claim that the instant petition for review was not properly verified by petitioner Saludo deserves scant consideration. Section 4, Rule 7 of the Rules of Court reads: Sec. 4. Verification. - Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit.  A pleading is verified by an affidavit that the affiant h as read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records.  A pleading required to be verified which contains a verification based on "information and belief," or upon "knowledge, information and belief," or lacks proper verification, shall be treated as an unsigned pleading. Petitioner Saludo's verification and certification of non-forum shopping states that he has "read the contents thereof [referring to the petition] and the same are true and correct of my own personal knowledge and belief and on the basis of the records at hand." The same clearly constitutes substantial compliance with the above requirements of the Rules of Court. WHEREFORE, premises considered, the petition is GRANTED. The Decision dated May 22, 2003 and Resolution dated August 14, 2003 of the Court of Appeals in CA-G.R. SP No. 69553 are REVERSED and SET ASIDE. The Orders dated September 10, 2001 and January 2, 2002 of the Regional Trial Court of Maasin City, Southern Leyte, Branch 25 thereof, in Civil Case No. R-3172 are REINSTATED. SO ORDERED. G.R. No. 158589

June 27, 2006

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE TABAC REUNIES, S.A., (now known as PHILIP MORRIS PRODUCTS S.A.), Petitioners, vs. FORTUNE TOBACCO CORPORATION, Respondent.

DECISION GARCIA, J .: 

Via this petition for review under Rule 45 of the Rules of Court, herein petitioners Philip Morris, Inc., Benson & Hedges (Canada) Inc., and Fabriques de Tabac Reunies, S.A. (now Philip Morris Products S.A.) seek the reversal and setting aside of the following issuances of the Court of Appeals (CA) in CA-G.R. CV No. 66619, to wit:

1

1. Decision dated January 21, 2003 affirming an earlier decision of the Regional Trial Court of Pasig City, Branch 166, in its Civil Case No. 47374, which dismissed the complaint for trademark infringement and damages thereat commenced by the petitioners against respondent Fortune Tobacco Corporation; and 2

2. Resolution dated May 30, 2003 denying petitioners‘ motion for reconsideration. Petitioner Philip Morris, Inc., a corporation organized under the laws of the State of Virginia, United States of  America, is, per Certificate of Registration No. 18723 issued on April 26, 1 973 by the Philippine Patents Office (PPO), the registered owner of the trademark "MARK VII" for cigarettes. Similarly, petitioner Benson & Hedges (Canada), Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the trademark "MARK TEN" for cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as can be seen in Trademark Certificate of Registration No. 19053, another subsidiary of Philip Morris, Inc., the Swiss company Fabriques de Tabac Reunies, S.A., is the assignee of the trademark "LARK," which was originally registered in 1964 by Ligget and Myers Tobacco Company. On the other hand, respondent Fortune Tobacco Corporation, a company organized in the Philippines, manufactures and sells cigarettes using the trademark "MARK." The legal dispute between the parties started when the herein petitioners, on the claim that an infringement of their respective trademarks had been committed, filed, on August 18, 1982, a Complaint for Infringement of Trademark and Damages against respondent Fortune Tobacco Corporation, docketed as Civil Case No. 47374 of the Regional Trial Court of Pasig, Branch 166. The decision under review summarized what happened next, as follows: In the Complaint xxx with prayer for the issuance of a preliminary injunction, [petitioners] alleged that they are foreign corporations not doing business in the Philippines and are suing on an isolated transaction. xxx they averred that the countries in which they are domiciled grant xxx to corporate or juristic persons of the Philippines the privilege to bring action for infringement, xxx without need of a license to do business in those countries. [Petitioners] likewise manifested [being registered owners of the trademark "MARK VII" and "MARK TEN" for cigarettes as evidenced by the corresponding certificates of registration and an applicant for the registration of the trademark "LARK MILDS"]. xxx. [Petitioners] claimed that they have registered the aforementioned trademarks in their respective countries of origin and that, by virtue of the long and extensive usage of the same, these trademarks have already gained international fame and acceptance. Imputing bad faith on the part of the [respondent], petitioners claimed that the [respondent], without any previous consent from any of the [petitioners], manufactured and sold cigarettes bearing the identical and/or confusingly similar trademark "MARK" xxx Accordingly, they argued that [respondent‘s] use of the trademark "MARK" in its cigarette products have caused and is likely to cause confusion or mistake, or would deceive purchasers and the public in general into buying these products under the impression and mistaken belief that they are buying [petitioners‘] products. Invoking the provisions of the Paris Convention for the Protection of Industrial and Intellectual Property (Paris Convention, for brevity), to which the Philippines is a signatory xxx, [petitioners] pointed out that upon the request of an interested party, a country of the Union may prohibit the use of a trademark which constitutes a reproduction, imitation, or translation of a mark already belonging to a person entitled to the benefits of the said Convention. They likewise argued that, in accordance with Section 21-A in relation to Section 23 of Republic Act 166, as amended, they are entitled to relief in the form of damages xxx [and] the issuance of a writ of preliminary injunction which should be made permanent to enjoin perpetually the [respondent] from violating [petitioners‘] right to the exclusive use of their aforementioned trademarks. [Respondent] filed its Answer xxx denying [petitioners‘] material allegations and xxx averred [among other things] xxx that "MARK" is a common word, which cannot particularly identify a product to be the product of the [petitioners] xxx xxx

xxx

xxx.

lawphil.net 

Meanwhile, after the [respondent] filed its Opposition (Records, Vo. I, p. 26), the matter of the [petitioners‘] prayer for the issuance of a writ of preliminary injunction was negatively resolved by the court in an Order xxx dated March 28, 1973. [The incidental issue of the propriety of an injunction would eventually be elevated to the CA and would finally be resolved by the Supreme Court in its Decision dated July 16, 1993 in G.R. No. 91332]. xxx. xxx

xxx

xxx

 After the termination of the trial on the merits xxx trial court rendered its Decision xxx dated November 3, 1999 dismissing the complaint and counterclaim after making a finding that the [respondent] did not commit trademark infringement against the [petitioners]. Resolving first the issue of whether or not [petitioners] have capacity to institute the instant action, the trial court opined that [petitioners‘] failure to  present evidence to support their allegation that their respective countries indeed grant Philippine corporations reciprocal or similar privileges by law xxx justifies the dismissal of the complaint xxx. It added that the testimonies of [petitioners‘] wit nesses xxx essentially declared that [petitioners] are in fact doing business in the Philippines, but [petitioners] failed to establish that they are doing so in accordance with the legal requirement of first securing a license. Hence, the court declared that [petitioners] are barred from maintaining any action in Philippine courts pursuant to Section 133 of the Corporation Code. The issue of whether o r not there was in fringement of the [petitioners‘] trademarks by the [respondent] was likewise answered xxx in the negative. It expounded that "in order for a name, symbol or device to constitute a trademark, it must, either by itself or by association, point distinctly to the origin or ownership of the article to which it is applied and be of such nature as to permit an exclusive appropriation by one person". Applying such principle to the instant case, the trial court was of the opinion that the words "MARK", "TEN", "LARK" and the Roman Numerals "VII", either alone or in combination of each other do not by themselves or by association point distinctly to the origin or ownership of the cigarettes to which they refer, such that the buying public could not be deceived into believing that [respondent‘s] "MARK" cigarettes originated either from the USA, Canada, or Switzerland.

Emphasizing that the test in an infringement case is the likelihood of confusion or deception, the trial court stated that the general rule is that an infringement exists if the resemblance is so close that it deceives or is likely to deceive a customer exercising ordinary caution in his dealings and induces him to purchase the goods of one manufacturer in the belief that they are those of another. xxx. The trial court ruled that the [petitioners] failed to pass these tests as it neither presented witnesses or purchasers attesting that they have bought [respondent‘s] product believing that they bought [petitioners‘] "MARK VII", "MARK TEN" or "LARK", and have also failed to introduce in evidence a specific magazine or periodical circulated locally, which promotes and popularizes their products in the Philippines. It, moreover, elucidated that the words consisting of the trademarks allegedly infringed by [respondent] failed to show that they have acquired a secondary meaning as to identify them as [ petitioners‘] products. Hence, the court ruled that the [petitioners] cannot avail themselves of the doctrine of secondary meaning.  As to the issue of damages, the trial court deemed it just not to award any to either party stating that, since t he [petitioners] filed the action in the belief that they were aggrieved by what they perceived to be an infringement of 3 their trademark, no wrongful act or omission can be attributed to them. xxx. (Words in brackets supplied) Maintaining to have the standing to sue in the local forum and that respondent has committed trademark infringement, petitioners went on appeal to the CA whereat their appellate recourse was docketed as CA-G.R. CV No. 66619. Eventually, the CA, in its Decision dated January 21, 2003, while ruling for petitioners on the matter of their legal capacity to sue in this country for trademark infringement, nevertheless affirmed the trial court‘s decision on t he underlying issue of respondent‘s liability for infringement as it found that: xxx the appellants‘ [petitioners‘] trademarks, i.e., "MARK VII", "MARK TEN" and "LARK", do not qualify as well -known marks entitled to protection even without the benefit of actual use in the local market and that the similarities in the trademarks in question are insufficient as to cause deception or confusion tantamount to infringement. Consequently, 4 as regards the third issue, there is likewise no basis for the award of damages prayed for by the appellants herein. (Word in bracket supplied)

With their motion for reconsideration having been denied by the CA in its equally challenged Resolution of May 30, 2003, petitioners are now with this Court via this petition for review essentially raising the following issues: (1) whether or not petitioners, as Philippine registrants of trademarks, are entitled to enforce trademark rights in this country; and (2) whether or not respondent has committed trademark infringement against petitioners by its use of the mark "MARK" for its cigarettes, hence liable for damages. 5

In its Comment, respondent, aside from asserting the correctness of the CA‘s finding on its liability for trademark infringement and damages, also puts in issue the propriety of the petition as it allegedly raises questions of fact. The petition is bereft of merit.

Dealing first with the procedural matter interposed by respondent, we find that the petition raises both questions of fact and law contrary to the prescription against raising factual questions in a petition for review on certiorari filed before the Court. A question of law exists when the doubt or difference arises as to what the law is on a certain state 6 of facts; there is a question of fact when the doubt or difference arises as to the truth or falsity of alleged facts. 7

Indeed, the Court is not the proper venue to consider factual issues as it is not a trier of facts. Unless the factual findings of the appellate court are mistaken, absurd, speculative, conflicting, tainted with grave abuse of discretion, or 8 contrary to the findings culled by the court of origin, we will not disturb them. It is petitioners‘ posture, however, that their contentions should

be treated as purely legal since they are assailing erroneous conclusions deduced from a set of undisputed facts. Concededly, when the facts are undisputed, the question of whether or not the conclusion drawn therefrom by the CA 9 is correct is one of law. But, even if we consider and accept as pure questions of law the issues raised in this petition, still, the Court is not inclined to disturb the conclusions reached by the appellate court, the established rule 10 being that all doubts shall be resolved in favor of the correctness of such conclusions. Be that as it may, we shall deal with the issues tendered and determine whether the CA ruled in accordance with law and established jurisprudence in arriving at its assailed decision.  A "trademark" is any distinctive word, name, symbol, emblem, sign, or device, o r any combination thereof adopted and used by a manufacturer or merchant on his goods to identify and distinguish them from those manufactured, 11 sold, or dealt in by others. Inarguably, a trademark deserves protection. For, as Mr. Justice Frankfurter observed in 12 Mishawaka Mfg. Co. v. Kresge Co.: The protection of trademarks is the law‘s recognition of the psychological function of symbols. If it is true that we live by symbols, it is no less true that we purchase goods by them. A trade-mark is a merchandising short-cut which induces a purchaser to select what he wants, or what he has been led to believe what he wants. The owner of a mark exploits this human propensity by making every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the means employed, the aim is the same - to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-mark owner has something of value. If another poaches upon the commercial magnetism of the symbol he has created, the owner can obtain legal redress.

It is thus understandable for petitioners to invoke in this recourse their entitlement to enforce trademark rights in this country, specifically, the right to sue for trademark infringement in Philippine courts and be accorded protection against unauthorized use of their Philippine-registered trademarks. In support of their contention respecting their right of action, petitioners assert that, as corporate nationals of membercountries of the Paris Union, they can sue before Philippine courts for infringement of trademarks, or for unfair competition, without need of obtaining registration or a license to do business in the Philippines, and without necessity of actually doing business in the Philippines. To petitioners, these grievance right and mechanism are accorded not only by Section 21-A of Republic Act (R.A.) No. 166, as amended, or the Trademark Law, but also by  Article 2 of the Paris Convention for the Protection of Industrial Property, otherwise known as the Paris Convention. In any event, petitioners point out that there is actual use of their trademarks in the Philippines as evidenced by the certificates of registration of their trademarks. The marks "MARK TEN" and "LARK" were registered on the basis of 13 14 actual use in accordance with Sections 2-A and 5(a) of R.A. No. 166, as amended, providing for a 2-month preregistration use in local commerce and trade while the registration of "MARK VII" was on the basis of registration in the foreign country of origin pursuant to Section 37 of the same law wherein it is explicitly provided that prior use in 15 commerce need not be alleged. Besides, petitioners argue that their not doing business in the Philippines, if that be the case, does not mean that cigarettes bearing their trademarks are not available and sold locally. Citing Converse Rubber Corporation v. 16 Universal Rubber Products, Inc., petitioners state that such availability and sale may be effected through the acts of importers and distributors.

Finally, petitioners would press on their entitlement to protection even in the absence of actual use of trademarks in the country in view of the Philippines‘ adherence to the Trade Related Aspects of Intellectual Proper ty Rights or the TRIPS Agreement and the enactment of R.A. No. 8293, or the Intellectual Property Code (hereinafter the "IP Code"), both of which provide that the fame of a trademark may be acquired through promotion or advertising with no explicit requirement of actual use in local trade or commerce. Before discussing petitioners‘ claimed entitlement to enforce trademark rights in the Philippines, it must be emphasized that their standing to sue in Philippine courts had been recognized, and rightly so, by the CA. It ought to be pointed out, however, that the appellate court qualified its holding with a statement, following G.R. No. 91332, 17 entitled Philip Morris, Inc., et al. v. The Court of Appeals and Fortune Tobacco Corporation, that such right to sue does not necessarily mean protection of their registered marks in the absence of actual use in the Philippines.

Thus clarified, what petitioners now harp about is their entitlement to protection on the strength of registration of their trademarks in the Philippines.  As we ruled in G.R. No. 91332,

18

supra, so it must be here.

 Admittedly, the registration of a trademark gives the registrant, such as petitioners, advantages denied nonregistrants or ordinary users, like respondent. But while petitioners enjoy the statutory presumptions arising from such 19 registration, i.e., as to the validity of the registration, ownership and the exclusive right to use the registered marks, they may not successfully sue on the basis alone of their respective certificates of registration of trademarks. For, petitioners are still foreign corporations. As such, they ought, as a condition to availment of the rights and privileges vis-à-vis their trademarks in this country, to show proof that, on top of Philippine registration, their country grants substantially similar rights and privileges to Filipino citizens pursuant to Section 21-A20 of R.A. No. 166. 21

In Leviton Industries v. Salvador , the Court further held that the aforementioned reciprocity requirement is a condition sine qua non to filing a suit by a foreign corporation which, unless alleged in the complaint, would justify dismissal thereof, a mere allegation that the suit is being pursued under Section 21-A of R.A. No. 166 not being 22 sufficient. In a subsequent case, however, the Court held that where the complainant is a national of a Paris Convention- adhering country, its allegation that it is suing under said Section 21-A would suffice, because the reciprocal agreement between the two countries is embodied and supplied by the Paris Convention which, being 23 considered part of Philippine municipal laws, can be taken judicial notice of in infringement suits.  As well, the fact that their respective home count ries, namely, the United States, Switzerland and Canada, are, together with the Philippines, members of the Paris Union does not automatically entitle petitioners to the protection of their trademarks in this country absent actual use of the marks in local commerce and trade. 24

True, the Philippines‘ adherence to the Paris Convention effectively obligates the country to honor and enforce its 25 provisions as regards the protection of industrial property of foreign nationals in this country. However, any 26 protection accorded has to be made subject to the limitations of Philippine laws. Hence, despite Article 2 of the Paris Convention which substantially provides that (1) nationals of member-countries shall have in this country rights specially provided by the Convention as are consistent with Philippine laws, and enjoy the privileges that Philippine laws now grant or may hereafter grant to its nationals, and (2) while no domicile requirement in the country where protection is claimed shall be required of persons entitled to the benefits of the Union for the enjoyment of any 27 industrial property rights, foreign nationals must still observe and comply with the conditions imposed by Philippine law on its nationals. 28

29

Considering that R.A. No. 166, as amended, specifically Sections 2 and 2-A thereof, mandates actual use of the marks and/or emblems in local commerce and trade before they may be registered and ownership thereof acquired, the petitioners cannot, therefore, dispense with the element of actual use. Their being nationals of member-countries of the Paris Union does not alter the legal situation. 30

In Emerald Garment Mfg. Corporation v. Court of Appeals, the Court reiterated its rulings in Sterling Products 31 International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, Kabushi Kaisha Isetan v. Intermediate Appellate Court,32 and Philip Morris v. Court of Appeals and Fortune Tobacco Corporation33 on the importance of actual commercial use of a trademark in the Philippines notwithstanding the Paris Convention:

The provisions of the 1965 Paris Convention … relied upon by private respondent and Sec. 21 -A of the Trademark Law were sufficiently expounded upon and qualified in the recent case of Philip Morris, Inc., et. al. vs. Court of  Appeals: xxx

xxx

xxx

Following universal acquiescence and comity, our municipal law on trademarks regarding the requirements of actual use in the Philippines must subordinate an international agreement inasmuch as the apparent clash is being decided by a municipal tribunal. Xxx. Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of International Law are given a standing equal, not superior, to national legislative enactments. xxx

xxx

xxx

In other words, (a foreign corporation) may have the capacity to sue for infringement … but the question of whether they have an exclusive right over their symbol as to justify issuance of the controversial writ will depend on actual use of their trademarks in the Philippines in line with Sections 2 and 2-A of the same law. It is thus incongruous for petitioners to claim that when a foreign corporation not licensed to do business in the Philippines files a complaint for infringement, the entity need not be actually using its trademark in commerce in the Philippines. Such a foreign corporation may have the personality to file a suit for infringement but it may not necessarily be entitled to protection due to absence of actual use of the emblem in the local market. Contrary to what petitioners suggest, the registration of trademark cannot be deemed conclusive as to the actual use of such trademark in local commerce. As it were, registration does not confer upon the registrant an absolute right to the registered mark. The certificate of registration merely constitutes prima facie evidence that the registrant is the 34 owner of the registered mark. Evidence of non-usage of the mark rebuts the presumption of trademark ownership, 35 as what happened here when petitioners no less admitted not doing business in this country. Most importantly, we stress that registration in the Philippines of trademarks does not ipso facto convey an absolute right or exclusive ownership thereof. To borrow from Shangri-La International Hotel Management, Ltd. v. 36 Development Group of Companies, Inc. trademark is a creation of use and, therefore, actual use is a pre-requisite to exclusive ownership; registration is only an administrative confirmation of the existence of the right of ownership of 37 the mark, but does not perfect such right; actual use thereof is the perfecting ingredient. 38

Petitioners‘ reliance on Converse Rubber Corporation is quite misplaced, that case being cast in a different factual milieu. There, we ruled that a foreign owner of a Philippine trademark, albeit not licensed to do, and not so engaged in, business in the Philippines, may actually earn reputation or goodwill for its goods in the country. But unlike in the instant case, evidence of actual sales of Converse rubber shoes, such as sales invoices, receipts and the testimony of a legitimate trader, was presented in Converse.

This Court also finds the IP Code and the TRIPS Agreement to be inapplicable, the infringement complaint herein having been filed in August 1982 and tried under the aegis of R.A. No. 166, as amended. The IP Code, however, took 39 effect only on January 1, 1998 without a provision as to its retroactivity. In the same vein, the TRIPS Agreement was inexistent when the suit for infringement was filed, the Philippines having adhered thereto only on December 16, 1994. With the foregoing perspective, it may be stated right off that the registration of a trademark unaccompanied by actual use thereof in the country accords the registrant only the standing to sue for infringement in Philippine courts. Entitlement to protection of such trademark in the country is entirely a different matter. This brings us to the principal issue of infringement. Section 22 of R.A. No. 166, as amended, defines what constitutes trademark infringement, as follows: Sec. 22. Infringement, what constitutes. – Any person who shall use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or tradename in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to

cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy of color ably imitate any such mark or tradename and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business, or services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided. Petitioners would insist on their thesis of infringement since respondent‘s mark "MARK" for cigarettes is confusingly or deceptively similar with their duly registered "MARK VII," "MARK TEN" and "LARK" marks likewise for cigarettes. To them, the word "MARK" would likely cause confusion in the trade, or deceive purchasers, particularly as to the source or origin of respondent‘s cigarettes. 40

The "likelihood of confusion" is the gravamen of trademark infringement. But likelihood of confusion is a relative concept, the particular, and sometimes peculiar, circumstances of each case being determinative of its existence. Thus, in trademark infringement cases, more than in other kinds of litigation, precedents must be evaluated in the 41 light of each particular case. In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the dominancy test and 42 43 the holistic test. The dominancy test sets sight on the similarity of the prevalent features of the competing trademarks that might cause confusion and deception, thus constitutes infringement. Under this norm, the question at issue turns on whether the use of the marks involved would be likely to cause confusion or mistake in the mind of the 44 public or deceive purchasers. 45

In contrast, the holistic test entails a consideration of the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. Upon consideration of the foregoing in the light of the peculiarity of this case, we rule against the likelihood of confusion resulting in infringement arising from the respondent‘s use of the trademark "MARK" for its particular cigarette product. For one, as rightly concluded by the CA after comparing the trademarks involved in their entirety as they appear on 46 the products, the striking dissimilarities are significant enough to warn any purchaser that one is different from the other. Indeed, although the perceived offending word "MARK" is itself prominent in petitioners‘ trademarks "MARK VII" and "MARK TEN," the entire marking system should be considered as a whole and not dissected, because a discerning eye would focus not only on the predominant word but also on the other features appearing in the labels. Only then would such discerning observer draw his conclusion whether one mark would be confusingly similar to the 47 other and whether or not sufficient differences existed between the marks. This said, the CA then, in finding that respondent‘s goods cannot be mistaken as any of the three cigarette brands of  the petitioners, correctly relied on the holistic test.

But, even if the dominancy test were to be used, as urged by the petitioners, but bearing in mind that a trademark serves as a tool to point out distinctly the origin or ownership of the goods to which it is affixed,48 the likelihood of confusion tantamount to infringement appears to be farfetched. The reason for the origin and/or ownership angle is that unless the words or devices do so point out the origin or ownership, the person who first adopted them cannot be 49 injured by any appropriation or imitation of them by others, nor can the public be deceived. Since the word "MARK," be it alone or in combination with the word "TEN" and the Roman numeral "VII," does not point to the origin or ownership of the cigarettes to which they apply, the local buying public could not possibly be confused or deceived that respondent‘s "MARK" is the product of petitioners and/or originated from the U.S.A., Canada or Switzerland. And lest it be overlooked, no actual commercial use of petitioners‘ marks in local commerce was proven. There can thus be no occasion for the public in this country, unfamiliar in the first place with p etitioners‘ marks, to be confused. For another, a comparison of the trademarks as they appear on the goods is just one of the appreciable 50 circumstances in determining likelihood of confusion. Del Monte Corp. v. CA dealt with another, where we instructed to give due regard to the "ordinary purchaser," thus:

The question is not whether the two articles are distinguishable by their label when set side by side but whether the general confusion made by the article upon the eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result in his confounding it with the original. As observed in several cases, the general impression of the ordinary purchaser, buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods is the touchstone. When we spoke of an "ordinary purchaser," the reference was not to the "completely unwary customer" but to the 51 "ordinarily intelligent buyer" considering the type of product involved. It cannot be over-emphasized that the products involved are addicting cigarettes purchased mainly by those who are already predisposed to a certain brand. Accordingly, the ordinary buyer thereof would be all too familiar with his brand and discriminating as well. We, thus, concur with the CA when it held, citing a definition found in Dy Buncio v. Tan 52 Tiao Bok, that the "ordinary purchaser" in this case means "one accustomed to buy, and therefore to some extent familiar with, the goods in question." Pressing on with their contention respecting the commission of trademark infringement, petitioners finally point to Section 22 of R.A. No. 166, as amended. As argued, actual use of trademarks in local commerce is, under said section, not a requisite before an aggrieved trademark owner can restrain the use of his trademark upon goods manufactured or dealt in by another, it being sufficient that he had registered the trademark or trade-name with the IP Office. In fine, petitioners submit that respondent is liable for infringement, having manufactured and sold cigarettes with the trademark "MARK" which, as it were, are identical and/or confusingly similar with their duly registered trademarks "MARK VII," "MARK TEN" and "LARK". This Court is not persuaded. 53

In Mighty Corporation v. E & J Gallo Winery, the Court held that the following constitute the elements of trademark 54 infringement in accordance not only with Section 22 of R.A. No. 166, as amended, but also Sections 2, 2-A, 9-A and 20 thereof: (a) a trademark actually used in commerce in the Philippines and registered in the principal register of the Philippine Patent Office, (b) is used by another person in connection with the sale, offering for sale, or advertising of any goods, business or services or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or such trademark is reproduced, counterfeited, copied or colorably imitated by another person and such reproduction, counterfeit, copy or colorable imitation is applied to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services as to likely cause confusion or mistake or to deceive purchasers, (c) the trademark is used for identical or similar goods, and (d) such act is done without the consent of the trademark registrant or assignee.

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 As already found herein, while petitioners have registered the trademarks "MARK VII," "MARK TEN" and "LARK" for cigarettes in the Philippines, prior actual commercial use thereof had not been proven. In fact, petitioners‘ judicial admission of not doing business in this country effectively belies any pretension to the contrary. Likewise, we note that petitioners even failed to support their claim that their respective marks are well-known and/or have acquired goodwill in the Philippines so as to be entitled to protection even without actual use in this country in accordance with Article 6bis55 of the Paris Convention. As correctly found by the CA, affirming that of the trial court: xxx the records are bereft of evidence to establish that the appellants‘ [petitioners‘] products are indeed well -known in the Philippines, either through actual sale of the product or through different forms of advertising. This finding is supported by the fact that appellants admit in their Complaint that they are not doing business in the Philippines, hence, admitting that their products are not being sold in the local market. We likewise see no cogent reason to disturb the trial court‘s finding that the appellants failed to establish that their products are widely known by local purchasers as "(n)o specific magazine or periodical published in the Philippines, or in other countries but circulated