PrIL digests

32
01 HEINE v. NEW YORK INSURANCE COMPANY Facts: - New York Life Insurance Company and the Guardian Insurance Company, both New York Corporations, were sued by German complainants for the recovery on some two hundred and forty life insurance policies made and issued by the defendants in Germany. - Defendants were incorporated in New York, but they have statutory agents in Oregon. Summons were served upon these agents. - Complainants argue that because the court has jurisdiction over the subject matter and the parties, it has no discretion but to proceed with the case, regardless of where the cause of action arose, or the law by which it is controlled, or the residence or convenience of the parties and witnesses, or the difficulty the court would encounter in attempting to interpret and enforce a foreign contract, or the interference with the other business of the court. Issue: W/N the Oregon court should take cognizance of the case? No Ratio: - To require the defendants to defend the actions in this district (Oregon) would impose upon them great and unnecessary inconvenience and expense, and probably compel them to produce here (three thousand miles from their home office) numerous records, books, and papers, all of which are in daily use by it in taking care of current business. - It would also result in delay, inconvenience, and expense to other litigants as the case would no doubt consume months of the time of the court. - As to the complaint’s argument, the court said that it is a matter resting in its discretion. It may retain jurisdiction, or it may, in the exercise of a sound discretion, decline to do so, as the circumstances suggest. The courts have repeatedly refused, in their discretion, to entertain jurisdiction of causes of action arising in a foreign jurisdiction, where both parties are non-residents of the forum.

description

Prof. Salo

Transcript of PrIL digests

Page 1: PrIL digests

01 HEINE v. NEW YORK INSURANCE COMPANY

Facts:- New York Life Insurance Company and the Guardian

Insurance Company, both New York Corporations, were sued by German complainants for the recovery on some two hundred and forty life insurance policies made and issued by the defendants in Germany.

- Defendants were incorporated in New York, but they have statutory agents in Oregon. Summons were served upon these agents.

- Complainants argue that because the court has jurisdiction over the subject matter and the parties, it has no discretion but to proceed with the case, regardless of where the cause of action arose, or the law by which it is controlled, or the residence or convenience of the parties and witnesses, or the difficulty the court would encounter in attempting to interpret and enforce a foreign contract, or the interference with the other business of the court.

Issue: W/N the Oregon court should take cognizance of the case? No

Ratio:- To require the defendants to defend the actions in this district

(Oregon) would impose upon them great and unnecessary inconvenience and expense, and probably compel them to produce here (three thousand miles from their home office) numerous records, books, and papers, all of which are in daily use by it in taking care of current business.

- It would also result in delay, inconvenience, and expense to other litigants as the case would no doubt consume months of the time of the court.

- As to the complaint’s argument, the court said that it is a matter resting in its discretion. It may retain jurisdiction, or it may, in the exercise of a sound discretion, decline to do so, as the circumstances suggest. The courts have repeatedly refused, in

their discretion, to entertain jurisdiction of causes of action arising in a foreign jurisdiction, where both parties are non-residents of the forum.

Page 2: PrIL digests

02 IN RE: UNION CARBIDE CORPORATION

Facts: Union Carbide India Limited (UCIL), incorporated under Indian Law in 1934, is 50.9% owned by a New York corporation named Union Carbide Corporation (UCC). UCIL is a manufacturer of pesticides. On 3 December 1984, the chemical plant of UCIL in Bhopal, India had a tragic disaster in the form of a leak of a highly toxic gas (Methyl isocyanate) used in the production of pesticides.

Unfortunately, the prevailing winds on 3 December 1984 was from Northwest to Southeast which forced the highly toxic gas to the overpopulated hutments adjacent to the chemical plant. Over 2,100 dead and over 200,000 injured. Livestocks and crops were also killed and damaged.

145 actions have been filed and joined at US District Court (Southern District of New York) on 6 February 1985. However, these cases were superseded by a consolidated complaint filed on 28 June 1985.

On 29 March 1985, the Indian Government enacted the Bhopal Gas Leak Disaster (Process of Claims) Act (Bhopal Act) stating that the Government of India has the exclusive right to represent Indian plaintiffs regarding this incident. On 8 April 1985, the Government of India filed a complaint in the US District Court (Southern District of New York). This involves around 487,000 claimants.

UCC filed a motion to dismiss the consolidated action on the grounds of forum non conveniens that the action should be transferred before the Union of India.

Forum non conveniensThe doctrine of forum non conveniens allows a court to decline jurisdiction, even when jurisdiction is authorized by a general venue statute.

Issue: WoN the case should be dismissed on the grounds of forum non conveniens?

Ruling: The consolidated case is dismissed on the grounds of forum non conveniens under the following conditions:1. UCC shall consent to submit to the jurisdiction of the courts of India, and shall continue to waive defenses based upon the statute of limitations;2. UCC shall agree to satisfy any judgment rendered against it by an Indian court, and if applicable, upheld by an appellate court in that country, where such judgment and affirmance comport with the minimal requirements of due process;3. UCC shall be subject to discovery under the model of the United States Federal Rules of Civil Procedure after appropriate demand by plaintiffs.

Ratio: Cited case: Piper Aircraft Co. v. Reyno

Piper teaches a straightforward formulation of the doctrine of forum non conveniens. A district court is advised to determine first whether the proposed alternative forum is "adequate."

1. Preliminary Considerations"At the outset of any forum non conveniens inquiry, the court must determine whether there exists an alternative forum."

a. Innovation in the Indian Judicial SystemIndian Legal System is a common law system from the British which makes it friendly to the US Legal System in terms of appellate structure, the rule of stare decisis, the role of the judiciary as "guardian of [India's] democratic structure and protector of citizens' rights."

b. Endemic Delays in the Indian Judicial SystemHowever, American Courts suffer delays too. Moreover, Bhopal Tragedy legislation will not be treated in an ordinary fashion. The Bhopal Act permits the cases to be treated "speedily, effectively, equitably and to the best advantage of the claimants."

c. Procedural and Practical Capacity of Indian CourtsPlaintiffs contend that the Indian legal system lacks the wherewithal to allow it "to deal effectively and expeditiously" with the issues raised in this lawsuit.

i. Limited capacity of Indian Bar

Page 3: PrIL digests

ii. Attorney General of India will handle the claimants

iii. The substantive tort law of India is not sufficiently developed to accommodate the Bhopal claims

iv. India lacks certain procedural devices which are essential to the adjudication of complex cases, the absence of which prevent India from providing an adequate alternative forum

2. Private Interest Concernsa. Sources of Proof

UCC argues that virtually all of the evidence which will be relevant at a trial in this case is located in India.

b. Access to WitnessesMost witnesses whose testimony would relate to questions of causation and liability are in India. Engineers from UCIL and Humphreys and Glasgow and other subcontractors, of whom there are hundreds, are located in India. Shift employees from the possibly malfunctioning units, safety monitoring personnel, those responsible for training, safety auditing, procurement, compliance with regulations and other operations might be required to testify. More than likely, many of these potential witnesses do not speak English, and would require translators.

c. Possibility of ViewPlaintiff argues that a viewing of the plant and hutments would probably not be of utmost importance in determining liability, and this consideration is not afforded great weight on this motion.

3. Public Interest Concernsa. Administrative Difficulties

As is evident from the discussion thus far, the mere size of the Bhopal case, with its multitude of witnesses and documents to be transported and translated, obviously creates administrative problems.

b. The Interests of India and USPlaintiffs, and especially amicus curiae emphasize this point of argument in opposition to the motion to

dismiss. Concerned with the asserted possibility of developing a "double-standard" of liability for multinational corporations, plaintiffs urge that American courts should administer justice to the victims of the Bhopal disaster as they would to potential American victims of industrial accidents.

The Court concludes that the public interest of India in this litigation far outweighs the public interest of the United States. This litigation offers a developing nation the opportunity to vindicate the suffering of its own people within the framework of a legitimate legal system. This interest is of paramount importance.

c. The Applicable LawThe lex loci delicti analysis used in other jurisdictions indicates that the law of the state where the tort occurred should be applied. The place in which the tort occurred was, to a very great extent, India. Other states apply the "most significant relationship" test, or "weight of contacts" test, which evaluate in which state most of the events constituting the tort occurred. The contacts with India with respect to all phases of plant construction, operation, malfunction and subsequent injuries are greater in number than those with the United States.

Page 4: PrIL digests

03 FIRST PHILIPPINE INTERNATIONAL BANK v. CA

Facts: 1. First Philippine is a bank under conservatorship. Mercurio

Rivera is its Manager of the Property Management Department. Ejecito is an assignee of the original plaintiffs Demetria and Janolo.

2. This is a case of specific performance with damages against the bank, its Manager Rivera and Acting Conservator Encarnacion. The basis of the suit was that the transaction had with the bank resulted in a perfected contract of sale.

3. The issue regarding the sale arose because according to the bank there was no perfected contract of sale and that River who transacted with Demetria and Janolo had no authority to bind the bank.

4. The sale was perfected after a series of letter exchanges and meetings between Demetria and Janolo as buyers and Rivera as the representative of the Bank, as sellers. Initially, the buyers, in a letter offered to buy the properties of the bank in Laguna for 3.5M.

5. The bank refused the offer but made a counter offer of 5.5M. The buyers initially refused the 5.5M counter-offer, but after another meeting with Rivera and the bank’s VP, Demetria and Janolo wrote Rivera informing him of his acceptance of the 5.5M offer.

6. Thereafter, the conservator of the bank was replaced by defendant Encarnacion.

7. Because the buyers never heard again from the bank, they began sending demand letters to have the sale consummated. They also sent checks for the amount of 5.5M. But to no avail. Hence the case at the RTC was filed on May 16, 1988.

8. On March 14, 1991, Henry Co, a majority stockholder of the bank, filed a motion to intervene alleging that he had substantial interest to resist the complaint. The RTC denied the motion because of the trial had already been concluded. Eventually, the RTC ruled in favor of Ejercito (first case).

9. On July 19, 1991 while the case was pending before the CA, Henry Co filed a derivative suit (second case) with the RTC of Makati to declare any perfected sale of the property as

unenforceable and to stop Ejercito from enforcing or implementing the sale.

10. Meanwhile the CA affirmed the ruling of the RTC in the first case.

11. During the appeal at the SC, Ejercito prayed for the dismissal of the petition on the ground of forum-shopping.

ISSUE (TOPICAL): Was there forum-shopping on the part of the bank? Yes. The filing of two apparently different actions but with the same objective constitutes forum shopping. RATIO:

Where a litigant (or one representing the same interest or person) sues the same party against whom another action or actions for the alleged violation of the same right and the enforcement of the same relief is/are still pending, the defense of litis pendencia in one case is a bar to the others; and, a final judgment in one would constitute res judicata and thus would cause the dismissal of the rest. In either case, forum shopping could be cited by the other party as a ground to ask for summary dismissal of the twoi (or more) complaints or petitions, and for the imposition of the other sanctions, which are direct contempt of court, criminal prosecution, and disciplinary action against the erring lawyer.

Applying the foregoing principles in the present case and comparing it with the Second Case, it is obvious that there exist identity of parties or interests represented, identity of rights or causes and identity of reliefs sought.

The original complaint in the court a quo which gave rise to the instant petition was filed by the buyer (herein private respondent and his predecessors-in-interest) against the seller (herein petitioners) to enforce the alleged perfected sale of real estate. On the other hand, the complaint in the Second Case seeks to declare such purported sale involving the same real property as unenforceable as against the Bank, which is the petitioner herein. In other words, in the Second Case, the majority stockholders, in representation of the Bank, are seeking to accomplish what the Bank itself failed to do in the original case in the trial court. In brief, the objective or the relief being sought, though

Page 5: PrIL digests

worded differently, is the same, namely, to enable the petitioner Bank to escape from the obligation to sell the property to respondent. The filing by a party of two apparently different actions, but with the same objective, constituted forum shopping.

Related to the topic:

Before making a ruling on the issue, Justice Panganiban first historicized the origin of the doctrine of forum-shopping.

Forum-shopping originated as a concept in private international law, where non-resident litigants are given the option to choose the forum or place wherein to bring their suit for various reasons or excuses, including to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. To combat these less than honorable excuses, the principle of forum non conveniens was developed whereby a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most convenient or available forum and the parties are not precluded from seeking remedies elsewhere.

In this light, Blacks Law Dictionary says that forum-shopping occurs when a party attempts to have his action tried in a particular court or jurisdiction where he feels he will receive the most favorable judgment or verdict. Hence, according to Words and Phrases, a litigant is open to the charge of forum shopping whenever he chooses a forum with slight connection to factual circumstances surrounding his suit, and litigants should be encouraged to attempt to settle their differences without imposing undue expense and vexatious situations on the courts.

In the Philippines, forum-shopping has acquired a connotation encompassing not only a choice of venues, as it was originally understood in conflicts of laws, but also to a choice of remedies. In either of these situations (choice of venue or choice of remedy), the litigant actually shops for a forum of his action. This was the original concept of the term forum shopping.

Eventually, however, in the Philippines, instead of actually making a choice of the forum of their actions, litigants, through the encouragement of their lawyers, file their actions in all available courts, or invoke all relevant remedies simultaneously. This practice

had not only resulted in conflicting adjudications among different courts and consequent confusion inimical to an orderly administration of justice. It had created extreme inconvenience to some of the parties to the action. Thus, forum-shopping had acquired a different concept - which is unethical professional legal practice. And this necessitated or had given rise to the formulation of rules and canons discouraging or altogether prohibiting the practice. What therefore originally started both in conflicts of laws and in our domestic law as a legitimate device for solving problems has been abused and misused to assure scheming litigants of dubious reliefs.

OTHER ISSUES:

1. WON the contract of sale was perfected. YES. The requisites of a perfected contract is met. The object was the properties in Laguna. The prize was certain – 5.5M. The bank intended to sell the property.

2. WON Rivera had authority to transact with the buyers. YES. He was clothed with apparent or implied authority to act for the bank in the matter of selling its acquired assets.

3. WON the contract is enforceable. YES. Although the contract was not reduced in writing as required by law, the letters the parties exchanged constitute sufficient memoranda since they include the names of the parties, the terms and conditions of the contract, the price and description of the property as the object of the contract.

4. May Conservator Encarnacion revoke the contract? NO. Violation of non-impairment clause. The only revocation a conservator can do is that of void, voidable or unenforceable contracts.

Page 6: PrIL digests

04 THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD. vs. NLRC1

PARDO, J. G.R. No. 120077. October 13, 2000

Facts: Private respondent Marcelo Santos was an overseas worker

employed as a printer at the Mazoon Printing Press, Sultanate of Oman.

During his employment with the Mazoon Printing Press in the Sultanate of Oman, respondent Santos received a letter dated May 2, 1988 from Mr. Gerhard R. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr. Schmidt informed respondent Santos that he was recommended by one Nestor Buenio, a friend of his.

Mr. Shmidt offered respondent Santos the same position as printer, but with a higher monthly salary and increased benefits. The position was slated to open on October 1, 1988.

On May 19, 1988, the Palace Hotel Manager, Mr. Hans J. Henk mailed a ready to sign employment contract to respondent Santos. Santos then wrote the Palace Hotel and acknowledged Mr. Henk's letter. Respondent Santos enclosed four (4) signed copies of the employment contract (dated June 4, 1988). He notified them that he was going to arrive in Manila during the first week of July 1988 and would go to China on November 1988

After landing in China, he signed an amended "employment agreement" with the Palace Hotel, effective November 5, 1988.

1 Petitioners are the Manila Hotel Corporation (MHC) and the Manila Hotel International Co., Limited (MHICL).When the case was filed in 1990, MHC was still a government-owned and controlled corporation duly organized and existing under the laws of the Philippines.MHICL is a corporation duly organized and existing under the laws of Hong Kong. MHC is an "incorporator" of MHICL, owning 50% of its capital stock.By virtue of a "management agreement" with the Palace Hotel (Wang Fu Company Limited), MHICL trained the personnel and staff of the Palace Hotel at Beijing, China.

In the contract, Mr. Shmidt represented the Palace Hotel. The Vice President (Operations and Development) of petitioner MHICL Miguel D. Cergueda signed the employment agreement under the word "noted".

The employment contract of June 4, 1988 stated that his employment would commence September 1, 1988 for a period of two years. It provided for a monthly salary of nine hundred dollars (US$900.00) net of taxes, payable fourteen (14) times a year.

On August 10, 1989, the Palace Hotel informed respondent Santos by letter signed by Mr. Shmidt that his employment at the Palace Hotel print shop would be terminated due to business reverses brought about by the political upheaval in China (Tiannamen Square incidents).

On February 20, 1990, respondent Santos filed a complaint for illegal dismissal and named MHC, MHICL, the Palace Hotel and Mr. Shmidt as respondents. (He probably sued MHC because it was the one who trained him). The Palace Hotel and Mr. Shmidt were not served with summons and neither participated in the proceedings before the Labor Arbiter

LA ruled in favor of Santos. NLRC affirmed the LA decision. Hence the appeal of the petitioners. Petitioners question the jurisdiction of NLRC to hear this case.

Issues: 1.) W/N NLRC had jurisdiction over the case. NO.2.) W/N MHC and MHICL are liable. NO.

Ratio:

1. Under the principle of Forum Non-Conveniens, the NLRC was a seriously inconvenient forum.

The main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the Philippines has with the case is that respondent Santos is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations. Not all cases involving our citizens can be tried here.

Page 7: PrIL digests

The employment contract. — Respondent Santos was hired directly by the Palace Hotel, a foreign employer, through correspondence sent to the Sultanate of Oman, where respondent Santos was then employed. He was hired without the intervention of the POEA or any authorized recruitment agency of the government.

Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it chooses to do so provided: (1) that the Philippine court is one to which the parties may conveniently resort to; (2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine court has or is likely to have power to enforce its decision.

The conditions are unavailing in the case at bar:

Not Convenient. — We fail to see how the NLRC is a convenient forum given that all the incidents of the case — from the time of recruitment, to employment to dismissal occurred outside the Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines. Neither are they "doing business in the Philippines." Likewise, the main witnesses, Mr. Shmidt and Mr. Henk are non-residents of the Philippines.

No power to determine applicable law. — Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made).

The employment contract was not perfected in the Philippines. Respondent Santos signified his acceptance by writing a letter while he was in the Republic of Oman. This letter was sent to the Palace Hotel in the People's Republic of China.

No power to determine the facts. — Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts

complained of took place in Beijing, People's Republic of China. The NLRC was not in a position to determine whether the Tiannamen Square incident truly adversely affected operations of the Palace Hotel as to justify respondent Santos' retrenchment.

Principle of effectiveness, no power to execute decision. — Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect against the employer, the Palace Hotel. The Palace Hotel is a corporation incorporated under the laws of China and was not even served with summons. Jurisdiction over its person was not acquired.

2.)MHC’s liability

Although MHC is an incorporator of MHICL and owns fifty percent (50%) of its capital stock. However, this is not enough to pierce the veil of corporate fiction between MHICL and MHC. Our jurisprudence tells us that mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate corporate personalities.

MHICL’s liability

Respondent Santos predicates MHICL's liability on the fact that MHICL "signed" his employment contract with the Palace Hotel. This fact fails to persuade us. The Vice President (Operations and Development) of MHICL, Miguel D. Cergueda signed the employment contract as a mere witness. He merely signed under the word "noted".

Mr. Cergueda merely signed the "witnessing part" of the document. As opposed to a party to a contract, a witness is simply one who, "being present, personally sees or perceives a thing; a beholder, a spectator, or eyewitness." One who "notes" something just makes a "brief written statement" a memorandum or observation.

Page 8: PrIL digests

There was no employer-employee relationship between MHICL and Santos. It did not select respondent Santos as an employee for the Palace Hotel. He was referred to the Palace Hotel by his friend, Nestor Buenio. MHICL did not engage respondent Santos to work. The terms of employment were negotiated and finalized through correspondence between respondent Santos, Mr. Schmidt and Mr. Henk, who were officers and representatives of the Palace Hotel and not MHICL. Neither did respondent Santos adduce any proof that MHICL had the power to control his conduct. Finally, it was the Palace Hotel, through Mr. Schmidt and not MHICL that terminated respondent Santos' services.

Page 9: PrIL digests

05 HASEGAWA v. KITAMURAGR No. 149177 / 23 Nov 2007 / J. Nachura FACTS

Nippon Engineering Consultants Co., a Japanese consultancy firm providing technical and management support in the infrastructure projects of foreign governments, entered into an Independent Contractor Arrangement with the respondent Minoru Kitamura, a Japanese national who was a permanent Philippine resident.

Nippon assigned Kitamura as project manager for the Southern Tagalog Access Road (STAR) project following a contract with the Phililppine government.

When STAR was nearing completion, DPWH engaged Nippon for engineering and construction supervision of the Bongabon-Baler Road Improvement Project. Respondent was named as project manager in an appendix to his contract.

Nippon's general manager for its International Division, petitioner Kazuhiro Hasegawa, informed respondent that his contract will not be renewed anymore, and his services would only be engaged up to the substantial completion of the STAR project in March 2000.

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 and refused to renegotiate the renewal of the ICA.

Procedure Respondent filed a complaint for specific performance and

damages with the RTC at Lipa. Petitioners moved to dismiss the complaint for lack of jurisdiction, asserting that the claim can only be heard in Japanese courts following the principles of lex loci celebrationis and lex contractus.

RTC DENIED MTD, on the ground that matters connected with the performance of contracts are regulated by the law at the place of performance.

Petitioner filed certiorari with the CA. CA DISMISSED the petition for lack of statement of material dates and insufficient verification and certification against forum shopping. Petitioners filed a second certiorari, raising the same issues, which was

denied on the ground that lex loci celebrationis was not applicable because the validity of the written agreement was not put into issue in the pleadings.

Rule 45 to the SC of the CA decision.ISSUE / HELD

W/N the subject matter jurisdiction of Philipppine 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. NO. Petition for review denied.

RATIOProcedural (may not be relevant)

1. The first decision of the CA dismissing the Rule 65 petition due to procedural defects was not a dismissal with prejudice and thus petitioner can refile (which they did). However, the petition for review with the SC had no proper authorization for Hasegawa to file it, with the authorization only encompassing the petition filed in the CA.

2. The verification and certification were issued only by NIppon's president and CEO, not the Board of Directors, which makes it a fatal to Nippon's case. Hasegawa verified and certified the petition only for his behalf, and not for Nippon. The rule on substantial compliance does not apply (old rule).

Substantive (relevant)3. There was a change in theory between the original motion to

dismiss in the RTC, the Rule 65 in the CA and the Rule 45 in the SC.

a. In the original MTD, petitioners' argument is the applicable law would be Japanese law following the principles of lex loci celebrationis and lex contractus.

b. In the CA, petitioners raised the defense of forum non conveniens,

c. In the SC, petitioners raised that local courts have no substantial relationship to the parties following the state of most significant relationship in Private International Law.

4. There are three phases in resolving conflict of laws problems: (1) jurisdiciton, (2) choice of law and (3) recognition and enforcement of judgment.

Page 10: PrIL digests

5. Jurisdiction and choice of law are distinct concepts. The question whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment.

6. Only jurisdiction is at issue here. In assailing the trial court's jurisdiction in this case, the petitioners are actually referring to subject matter jurisdiction. Since jurisdiction is conferred by law, the movant in an MTD must show that the court cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims.

7. In this case petitioners do not claim that the TC is not properly vested by law with jurisdiction to hear the controversy. What they raise as grounds to question are the principles of:

a. lex loci celebrationis - law of the place where a contract is made.

b. lex contractus - law of the place where a contract is executed or to be performed

c. "state of the most significant relationship" rule - to ascertain what law to apply, the court should determine which state has the most substantial connection to the occurrence and the parties.

8. All of the above refer to the choice of law, and not jurisdiction.9. Further, petitioners have not pointed out any conflict between

Japanese and Philippine laws. Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules.

10. Neither can the other ground raised, forum non conveniens, be used to deprive the trial court of jurisdiction. It is not included in Sec. 1 Rule 16 (motions to dismiss) as a ground. Second, whether a suit can be entertained or dismissed on the basis of the said doctrine is a matter addressed to the judgment of the trial court, which here decided to assume jurisdiction. The propriety of dismissing a case on this principle requires a factual determination hence this principle is more properly considered a matter of defense.

Page 11: PrIL digests

06 FLEUMER v. HIX

G.R. No. L-32636             March 17, 1930In the matter Estate of Edward Randolph Hix, deceased. A.W. FLUEMER, petitioner-appellant, vs. ANNIE COUSHING HIX, oppositor-appellee.FACTS: Fleumer, the special administrator of Hix, presented the latter's will

for probate in the Philippines. According to Fleumer the said will was executed was executed in

Elkins, West Virginia, in 1925, by Hix who had his residence in that jurisdiction

Fleumer alleges that under W. Virginia law, will is duly executed. TO PROVE W. Virginia law, Fleumer submitted a copy of Section 3868 of Act 1882 as found in West Virginia Code + Certified by the Director of National Library.

Judge of First Instance Tuason denied the probate of the document alleged to by the last will and testament of the deceased.

ISSUE: whether the will should be denied probate - yesHHELD:

The laws of a foreign jurisdiction do not prove themselves in our courts. Such laws must be proved as fact. Here the requirements of the law were not met. There was no was printed or published under the authority of the State of West Virginia, as provided in sec. 300 of the Code of Civil Procedure. Nor was the extract from the law attested by the certificate of the officer having charge of the original, under the sale of the State of West Virginia, as provided in sec. 301 of the Code of Civil Procedure. No evidence was introduced to show that the extract from the laws of West Virginia was in force at the time the alleged will was executed.

In addition, the due execution of the will was not established. The only evidence on this point is to be found in the testimony of the petitioner. Aside from this, there was nothing to indicate that the will was acknowledged by the testator in the presence of two competent witnesses, of that these witnesses subscribed the will in the presence of the testator and of each other as the law of West Virginia seems to require.

It was also necessary for the petitioner to prove that the testator had his domicile in West Virginia and not establish this fact consisted of the recitals in the will and the testimony of the petitioner.

Page 12: PrIL digests

07 PHILIPPINE TRUST CO. v. BOHANAN

G.R. No. L-12105             January 30, 1960TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-appellee, vs.MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA BOHANAN, oppositors-appellants.LABRADOR, J.:

Facts: April 23, 1944, C.O. Bohanan executed his last will. On April

24, 1950, the CFI admitted the will to probate. The CFI held that the will was in accordance with the laws of Nevada, to which Bohanan was a citizen. The court named Phil Trust Co. as the executor.

On Jan 24, 1956, Phil Trust executed a project of partition. The total estate, after deducting admin expenses, is P211,640 in cash. Of this amount, 90k was given to C.O’s grandson, Edward George, and one-half of all shares of stock of several mining companies to his siblings, F.L. Bohanan and Mrs. M. B. Galbraith, share and share alike. To his children, Edward Gilbert and Mary Lydia, he gave a legacy of only P6,000 each, or a total of P12,000.

The wife, Magadalena, and her two children question the validity of the testamentary provisions, claiming that they have been deprived of their legitime.

Issue: WON Phil. Laws, which provide for legitimes, is applicable, or

the Nevada Laws?Held:Apply Nevada law. The Nevada law does not provide for legitimes, hence, project of partition is affirmed.WRT wife

No right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and because of the divorce, there was no conjugal property to speak of, hence she can no longer claim any portion of the estate left by the testator.

The court found that C.O. and Magdalena were married on Jan 1909, the divorce was granted in 1922 and in 1925, Magdalena married Carl Aaron and this marriage was subsisting at the time of C.O’s death.

Magdalena’s right to Bohanan’s estate had been passed upon adversely against her in the 1955 order, which became final considering no appeal was made by Magdalena. This order pertains to the 1953 motion to withdraw P20k from the estate, filed by Magdalena, chargeable against her share in the conjugal property. The court held that there was no conjugal property to speak of by virtue of the divorce decree.

WRT children What does the Phil Law provide?

o The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides that successional rights to personal property are to be governed by the national law of the person whose succession is in question. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16, new Civil Code.)

What is the national law of the decedent?o In the proceedings for the probate of the will, it was

found out and it was decided that the testator was a citizen of the State of Nevada because he had selected this as his domicile and his permanent residence.

What does the national law provide?o The laws of Nevada allow a testator to dispose of all his

properties by will (Sec. 9905, Complied Nevada Laws of 1925, Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her estate, real and personal, the same being chargeable with the payment of the testator's debts.).

But the court can’t just take judicial notice of foreign laws. It must be introduced in evidence first.

o The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules:

Page 13: PrIL digests

o SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. . . . (Rule 123).

Was it introduced in evidence? o Not introduced at the hearing of the project of partition.

But the Nevada provision was introduced in evidence by Phil Trust during the 1950 probate and by Magdalena during the hearing of her motion to withdraw funds. The children, as other appellants, do not dispute the said Nevada law.

o “Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition.”

Page 14: PrIL digests

08 ELSERCE A. GRAY v. FRANK M. GRAYSupreme Court of New Hampshire Carroll.; September 4, 1934. Facts: The parties are husband and wife, and residents of New

Hampshire. While they were travelling from New Hampshire to Maine, an accident occurred causing injuries to the wife. The accident happened in Maine.

Elcerse (wife) filed an action in New Hampshire for damages arising out of personal injuries allegedly cause by the husband.

Frank (husband) filed a special plea that "Under the laws of said state of Maine, the plaintiff being the wife of said defendant is barred from maintaining this action." The plaintiff's demurrer to this plea was overruled.

Issue: Can the wife recover damages in New Hampshire for tortious act allegedly committed by the husband in Maine, another state? No. Using the lex loci principle, the wife has no cause of action against her husband according to the law of Maine.

Held:If there is no ground of action in the sovereignty where the tort is alleged to have occurred, there is none anywhere. If there is a conflict between the lex loci and the lex fori, the former governs in torts the same as in contracts, in respect to the legal effect and incidents of acts. . . . Therefore, whatever would be a defence to this action if it had been brought in the state of Maine is a defence here, although it would not be if the cause of action had arisen in this state. (Beacham v. Portsmouth Bridge)

Plaintiff: would like to distinguish the present case upon the ground that the act complained of was a delict, in the sense that it was not made innocent by Maine law; and the only reason a recovery could not be had in Maine is the spousal relation of the parties (because Maine law prohibits spouses to sue one another). Since they are residents of New Hampshire (where no prohibition exists), the suit for acts done in Maine may be brought into New Hampshire and maintained there.

Court: The argument fails to distinguish between status and the incidents which local law attaches to the status. The parties are husband and wife. That status they took with them into Maine. But the incidents of that status are those prescribed by the law of the place where transactions take place (or where the accident occurred).

In Lee v. Chamberlin (a guest passenger case), the guest passenger in an automobile remains such after crossing the state line. But his recovery in New Hampshire for injuries caused by his host's ordinary negligence depends upon which side of the state line the accident occurred. If it happened in another state, there could be no recovery, even though the parties are residents here and the suit is in this jurisdiction.

The defendant's act is a delict by the lex loci. It would have been actionable if committed here; and, as to persons in general, it is actionable there. But because of the particular relation of the parties, the law there (in Maine) is that there is no cause of action in the special instance. The plaintiff fails here because there is no cause of action at the place where the acts complained of were done. An examination of the Maine law shows that the theory behind the rule (prohibiting spouse to sue the other spouse) is not merely that there is a prohibition of suit, but that the acts complained of do not give rise to any cause of action. There has been no breach of legal duty.

Much objection has been made, both by some recent writers and in argument here, against any theory of vested right or obligation. If such theory were based upon the idea that a sovereignty is under legal compulsion to recognize the foreign cause of action, there might be force in the argument. No one denies that the parties may have vested rights, or obligations, in the jurisdiction where the transaction occurred. But because another sovereignty adopts the rule that it will enforce the right or deny recovery as the event would be according to the lex loci, it by no means follows that it is the law of the forum that such course is obligatory upon such sovereignty.

Local conduct should be governed by local law. Rules of conduct have no force to regulate acts done outside the jurisdiction which made the rules, save as their operation is enforced by control over parties found

Page 15: PrIL digests

within the jurisdiction. In the great majority of cases complaints of conduct are adjusted in the jurisdiction where the conduct took place. It is desirable that the remedy be the same, wherever the action is brought. Foreign law is enforced here because it is our law (New Hampshire law) that the foreign law shall govern the transactions in question. The other view, that to some indefinite degree our law should govern the foreign transaction, would export our law into foreign territory. The law is territorial, conceived of spatially as governing within the jurisdiction, and creating there rights and obligations which will be respected and enforced elsewhere.

As to the renvoi argument:It is urged that renvoi (in a suit by a non-resident upon a cause arising locally his capacity to sue will be determined by looking to the law of his domicil rather than to the local law) should be recognized; the whole theory of applying the lex loci is unsound and should therefore be abandoned, and actions for foreign torts should be decided according to local law (meaning: since the case is brought in New Hampshire by New Hampshire spouses, the case must be decided according to New Hampshire law despite the fact that the accident occurred in Maine). One answer to this is that the rule that the lex loci shall apply is so firmly established that it should be followed, unless very grave defects therein call for reform. We see no such defects. Also, if the principle of renvoi was open for consideration, the plaintiff would fail for lack of proof that the doctrine prevails in Maine.

Page 16: PrIL digests

09 ALABAMA GREAT SOUTHERN R.R. v. CARROL

Page 17: PrIL digests

10 AUTEN v. AUTEN (Fuld, J.,1954, Court of Appeals of the State of New York)

Quick summary and doctrine: Husband leaves behind wife and 2 children in England and remarries in NY. Wife goes to NY, obtains a separation agreement with terms for support. Wife goes back to England. However, husband reneges on agreement. Wife sues in English court. No result. Sues in NY court. Dismissed because of defense that English suit repudiated the agreement which contained a waiver of action in all jurisdictions. Held: Deviate from generally accepted rules (lex loci contractus and lex loci solutionis) and apply Center of Gravity or Grouping of Contacts theory. English law governs because England has the most significant contacts: British subjects, wife and kids live in England, British currency in agreement, etc. NY's role is only as place of payment. Suit in NY court reinstated.

Facts:

Harold and Marguerite Auten married in England with 2 kids from 1917-1931. Harold deserted them and went to New York, obtained an Mexican divorce, and “married” another woman. Marguerite went to NY and attempted to settle. They made a “separation agreement.” Harold would give support every month (50pounds) and that neither should sue “in any action relating to their separation” and that the wife should not “cause any complaint to be lodged against the husband in any jurisdiction by reason of said alleged divorce or remarriage”. Marguerite went back to England.

Harold failed to live up to the agreement but made a few payments. Marguerite filed petition for separation in an English court, charging Harold with adultery. Harold was served summons in NY. Counsel advised that it was the only method by which she could collect money from Harold (only for enforcement of agreement, not repudiation of the agreement). Case never went to trial (but did order support pendente lite).

Harold still didn't pay. So Marguerite went back to NY and filed suit there for a total of $26,564 based on the separation agreement.

Harold admitted agreement but one of his defenses (in a motion to dismiss) was that the suit in England effectively repudiated the agreement. NY lower court agreed with husband and dismissed the case. Appellate court affirmed (but permitted Marguerite to assert any cause of action before the English suit in an amended complaint). So Marguerite appeals to Court of Appeals of the State of NYCA.

Issue: Choice between NY and English law.

Held.

NYCA – English Law is controlling.

Generally accepted rule is for issues of execution of a contract, it is the law of the place where it was made that governs. For issues of performance, the law of the place of performance.

But not strict rule. Modern methods in choosing law now rationalize the results achieved by the courts in decided cases.

The “Center of Gravity” or “Grouping of Contacts” theory deviates from general rules and chooses the law of the place which has the most significant contacts or “having the most interest” with the matter in dispute. Also gives effect to the probable intention of the parties.

In this case, English law governs when the theory is applied because it is the state with the most significant contacts (agreement is between two British subjects, married in England, children there, lived there for 14 years, wife and children continued to live there). Agreement also states that payment is in English currency, that first payment be made immediately before she sailed back to England, that husband may visit the children if he goes to England. The state of NY only serves as the place where payment is to be made (to a trustee in NY for the account of Marguerite and her children).

The probable intention of the parties is for English law to govern since the wife is a stranger to NY so she couldn't have intended for NY law to govern. The husband is also still a British subject.

Page 18: PrIL digests

Reversed. Complaint reinstated.

Page 19: PrIL digests

11 HAAG v. BARNES

(1961)

FACTS: An illegitimate child was born to Norman Barnes (Illinois lawyer) and Dorothy Haag (New York legal secretary). Haag traveled to Chicago, Illinois prior to the child’s birth, where Barnes promised to shoulder her hospital expenses. They then entered into a support agreement in Chicago providing that Barnes would pay $275/mo until the child reached 16 y/o in exchange for his release from any other obligation. The agreement contained a choice-of-law clause in favor of Illinois law which upheld such agreements if the sum was at least $800. Meanwhile, NY law gave no binding effect to agreements by parents of an illegitimate child unless it was judicially approved.

Haag and the child returned to NY and filed an action for support. Barnes interposed the Illinois agreement as bar to the instant proceeding.

ISSUES & RULING1) WON Illinois law applies

YES. Under traditional conflicts rule: The agreement’s choice-of-law clause and the fact that it was drawn and signed by complainant Haag in Illinois are conclusive factors resulting in application of Illinois law.

But even if the clause and place of execution are not given conclusive effect, they are nevertheless to be given heavy weight in determining which jurisdiction has the most significant contacts with the matter in dispute. These factors plus other significant contacts point to Illinois law. Among the other Illinois contacts are:

a) Both parties are designated in the agreement as being of Chicago, Illinois

b) Defendant Barnes’s place of business has always been in Illinois

c) Child was born in Illinoisd) Agents (except for a third alternate) and attorneys who

drew the agreement are Illinois residents

e) All contributions for support have always been made from Chicago

In contrast, NY contacts are of far less weight and significant:

a) Child and mother presently live in NYb) Part of the “liaison” (sexual affair) took place in NY

When these contacts are measured against the parties’ clearly expressed intention (choice-of-law clause) and the more numerous and more substantial Illinois contacts, it cannot be denied that the “center of gravity” of this agreement is Illinois and that, absent compelling public policy to the contrary, Illinois law should apply.

In this case, even looking only at the financial provision ($275/mo), the welfare of the child is fully protected. The public policy of the State is satisfied. Illinois law applies.

2) WON the Illinois agreement bars the proceeding YES. Under Illinois law, the agreement bars the present action for support.

Page 20: PrIL digests

12 BABCOCK v. JACKSON

Georgia Babcock v. Mabel Jackson / 12 N.Y. 2d 473 / May 9, 1963 / J. Fuld

FACTS On September 16, 1960, Georgia Babcock and her friends, Mr.

and Mrs. William Jackson, all residents of Rochester, New York, left the city in the Jacksons’ car for a weekend trip to Canada. As they were driving in Ontario, Canada, William lost control of his car and crashed it on a stone wall along the highway. As a result, Georgia was seriously injured. Upon her return to NY, she filled an action against William, alleging negligence on his part in driving his car.

At the time of the accident, the Highway Traffic Act of Ontario was in force in Ontario that provided: "the owner or driver of a motor vehicle, other than a vehicle operated in the business of carrying passengers for compensation, is not liable for any loss or damage resulting from bodily injury to, or the death of any person being carried in *** the motor vehicle".

Even though there was no “guest statute” that barred recovery of

damages under New York’s law on torts (as referred to in cited cases such as Higgins v. Mason and Nelson v. Nygren), the Jacksons moved to dismiss the complaint on the ground that the law of the place (lex loci delicti) where the accident occurred governs and that Ontario's “guest statute” bars recovery.

Trial Court (Special Term) – dismissed the complaint, agreeing with the Jacksons

Appellate Division – affirmed dismissal without opinion. Lex loci delicti principle governs the case.

ISSUE / HELD WON the applicable “choice of law” rule may be used in

consideration of other factors which may be relevant to the

purposes served by the enforcement/denial of the remedy asked for? NO.

RATIOSubstantive (relevant)The traditional “choice of law” rule states that the substantive rights and liabilities arising out of a tortious occurrence are determinable by the law of the place of the tort. It had its conceptual foundation in the vested rights doctrine, namely, that a right to recover for a foreign tort owes its creation to the law of the jurisdiction where the injury occurred and depends for its existence and extent solely on such law. However, the vested rights doctrine has long since been discredited because it fails to take account of underlying policy considerations in evaluating the significance to be ascribed to the circumstance that an act had a foreign situs in determining the rights and liabilities which arise out of that act. According to the decision, the problem with the vested rights theory was that it “affects [decisions to] concrete cases upon generalities which do not state the practical considerations involved”. As applied to torts, the vested rights doctrine ignores the reasons and interests of the jurisdiction applying a statute for the resolution of particular issues. As a result, there was an increased criticism of its application by commentators, as well as abandonment or modification of its use by judicial bodies.

The Court cited Auten v. Auten as an example of the abandonment of the traditional rules, with its application of the “center of gravity” or “grouping of contacts” theory of the conflict of laws. In the Auten case, the Court put emphasis on the law of the place which has the “most significant contacts with the matter in dispute". Such theory was also (implicitly) used in the case of Kilberg v. Northeast Airlines where the Court weighed the interests of the different jurisdictions involved to determine their bearing on the issue of the extent of recovery for the injured parties.

Using the “grouping of contacts” theory in the case, the Court pointed out that the concern of New York is unquestionably the greater and more direct versus Ontario’s minimal interest. The cause of action involves injuries sustained by a New York guest as the result of the negligence of a New York host in the operation of an automobile,

Page 21: PrIL digests

garaged, licensed and insured in New York, in the course of a week-end journey. In sharp contrast, Ontario's sole relationship with the occurrence is the purely fortuitous circumstance that the accident occurred there.

However, the Court here noted that the issue in the case was not whether the defendant committed an offense against an Ontario road law for motorists generally or whether he violated some standard of conduct imposed by Ontario. Rather, the issue was whether the plaintiff is barred from recovering damages for a wrong concededly committed while she was a guest in the Jacksons’ automobile. As to that issue, it is New York, the place where the parties resided, where their guest-host relationship arose and where the trip began and was to end, rather than Ontario, the place of the fortuitous occurrence of the accident, which has the dominant contacts and the superior claim for application of its law.

Although the rightness or wrongness of William’s conduct may depend upon the law of the particular jurisdiction through which the automobile passes, the rights and liabilities of the parties which stem from their guest-host relationship should remain constant and not vary and shift as the automobile proceeds from place to place. Such a result accords with "the interests of the host in procuring liability insurance adequate under the applicable law, and the interests of his insurer in reasonable calculability of the premium."

The Court also took into consideration the fact that New York's policy of requiring a tort-feasor to compensate his guest for injuries caused by his negligence cannot be contested, as State Legislature had repeatedly refused to enact statutes limiting or barring recovery for cases of similar import to Georgia’s (wherein she received injuries as a guest travelling with the tortfeasor). On the other hand, Ontario has no conceivable interest in denying a remedy to a New York guest against his New York host for injuries suffered in Ontario by reason of conduct which was tortious under Ontario law. The object of Ontario's guest statute, it has been said, is "to prevent the fraudulent assertion of claims by passengers, in collusion with the drivers, against insurance companies". Obviously, the “fraudulent claims” intended to be prevented by the statute are not availing in the case of Georgia, who is

claiming not against defendants from Ontario or their insurance companies, but against defendants from New York and their insurance companies.

The Court concludes therefore, that where the issue involves standards of conduct, it is more than likely that it is the law of the place of the tort which will be controlling but the disposition of other issues must turn, as does the issue of the standard of conduct itself, on the law of the jurisdiction which has the strongest interest in the resolution of the particular issue presented.

Page 22: PrIL digests

i