cases in conflicts of law

7/24/2019 cases in Conflicts of Law

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[G.R. No. 103493. June 19, 1997.]

PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, and ATHONA HOLDINGS,N.V., Petitioners, v. THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO DAIC, VENTURA O. DUCAT,

PRECIOSO R. PERLAS and WILLIAM H. CRAIG, Respondents.

D E C I S I O NMENDOZA,J.

This case presents for determination the conclusiveness of a foreign judgment upon the rights of the parties under thesame cause of action asserted in a case in our local court. Petitioners brought this case in the Regional Trial Court ofMakati, Branch 56, which, in view of the pendency at the time of the foreign action, dismissed Civil Case No. 16563 onthe ground of litis pendentia, in addition to forum non conveniens. On appeal, the Court of Appeals affirmed. Hencethis petition for review on certiorari.

The facts are as follows:chanrob1es virtual 1aw library

On January 15, 1983, private respondent Ventura O Ducat obtained separate loans from petitioners AyalaInternational Finance Limited (hereafter called AYALA) 1 and Philsec Investment Corporation (hereafter calledPHILSEC) in the sum of US$2,500,000.00 secured by shares of stock owned by Ducat with a market value ofP14,088,995.00. In order to facilitate the payment of the loans, private respondent 1488, Inc., through its president,private respondent Drago Daic, assumed Ducats obligation under an Agreement , dated January 27, 1983, whereby

1488, Inc. executed a Warranty Deed with Vendors Lien by which it sold to petitioner Athona Holdings, N.V.(hereafter called ATHONA) a parcel of land in Harris County, Texas, U.S.A. for US$2,807,209.02, while PHILSEC andAYALA extended a loan to ATHONA in the amount of US$2,500,000.00 as initial payment of the purchase price. Thebalance of US$307,209.02 was to be paid by means of a promissory note executed by ATHONA in favor of 1488, Inc.Subsequently, upon their receipt of the US$2,500,000.00 from 1488, Inc., PHILSEC and AYALA released Ducat fromhis indebtedness and delivered to 1488, Inc. all the shares of stock in their possession belonging to Ducat.

As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount covered by the notebecame due and demandable. Accordingly, on October 17, 1985, private respondent 1488, Inc. sued petitionersPHILSEC, AYALA and ATHONA in the United States for payment of the balance of US$307,209.02 and for damages forbreach of contract and for fraud allegedly perpetrated by petitioners in misrepresenting the marketability of the sharesof stock delivered to 1488, Inc. under the Agreement. Originally instituted in the United States District Court of Texas,165th Judicial District, where it was docketed as Case No. 85-57746, the venue of the action was later transferred tothe United States District Court for the Southern District of Texas, where 1488, Inc. filed an amended complaint,

reiterating its allegations in the original complaint. ATHONA filed an answer with counterclaim, impleading privaterespondents herein as counterdefendants, for allegedly conspiring in selling the property at a price over its marketvalue. Private respondent Perlas, who had allegedly appraised the property, was later dropped as counterdefendant.ATHONA sought the recovery of damages and excess payment allegedly made to 1488, Inc. and, in the alternative,the rescission of sale of the property. For their part, PHILSEC and AYALA filed a motion to dismiss on the ground oflack of jurisdiction over their person, but, as their motion was denied, they later filed a joint answer with counterclaimagainst private respondents and Edgardo V. Guevarra, PHILSECs own former president, for the rescission of the saleon the ground that the property had been over-valued. On March 13, 1990, the United States District Court for theSouthern District of Texas dismissed the counterclaim against Edgardo V. Guevarra on the ground that it was"frivolous and [was] brought against him simply to humiliate and embarrass him." For this reason, the U.S. courtimposed so-called Rule 11 sanctions on PHILSEC and AYALA and ordered them to pay damages to Guevarra.

On April 10, 1987, while Civil Case No. H-86-440 was pending in the United States, petitioners filed a complaint "ForSum of Money with Damages and Writ of Preliminary Attachment" against private respondents in the Regional Trial

Court of Makati, where it was docketed as Civil Case No. 16563. The complaint reiterated the allegation of petitionersin their respective counterclaims in Civil Action No. H-86-440 of the United States District Court of Southern Texasthat private respondents committed fraud by selling the property at a price 400 percent more than its true value ofUS$800,000.00. Petitioners claimed that, as a result of private respondents fraudulent misrepresentations, ATHONA,PHILSEC and AYALA were induced to enter into the Agreement and to purchase the Houston property. Petitionersprayed that private respondents be ordered to return to ATHONA the excess payment of US$1,700,000.00 and to paydamages. On April 20, 1987, the trial court issued a writ of preliminary attachment against the real and personalproperties of private respondents. 2

Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis pendentia, vis-a-vis CivilAction No. H-86-440 filed by 1488, Inc. and Daic in the U.S., (2) forum non conveniens, and (3) failure of petitionersPHILSEC and BPI-IFL to state a cause of action. Ducat contended that the alleged overpricing of the propertyprejudiced only petitioner ATHONA, as buyer, but not PHILSEC and BPI-IFL which were not parties to the sale and


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whose only participation was to extend financial accommodation to ATHONA under a separate loan agreement. On theother hand, private respondents 1488, Inc. and its president Daic filed a joint "Special Appearance and QualifiedMotion to Dismiss," contending that the action being in personam, extraterritorial service of summons by publicationwas ineffectual and did not vest the court with jurisdiction over 1488, Inc., which is a non-resident foreigncorporation, and Daic, who is a non-resident alien.

On January 26, 1988, the trial court granted Ducats motion to dismiss, stating that "the evidentiary requirements ofthe controversy may be more suitably tried before the forum of the litis pendentia in the U.S., under the principle inprivate international law of forum non conveniens," even as it noted that Ducat was not a party in the U.S. case.

A separate hearing was held with regard to 1488, Inc. and Daics motion to dismiss. On March 9, 1988, the trial court3 granted the motion to dismiss filed by 1488, Inc. and Daic on the ground of litis pendentia considering that

the "main factual element" of the cause of action in this case which is the validity of the sale of real property in theUnited States between defendant 1488 and plaintiff ATHONA is the subject matter of the pending case in the UnitedStates District Court which, under the doctrine of forum non conveniens, is the better (if not exclusive) forum tolitigate matters needed to determine the assessment and/or fluctuations of the fair market value of real estatesituated in Houston, Texas, U.S.A. from the date of the transaction in 1983 up to the present and verily, . . .(emphasis by trial court)

The trial court also held itself without jurisdiction over 1488, Inc. and Daic because they were non-residents and theaction was not an action in rem or quasi in rem, so that extraterritorial service of summons was ineffective. The trialcourt subsequently lifted the writ of attachment it had earlier issued against the shares of stocks of 1488, Inc. andDaic.

Petitioners appealed to the Court of Appeals, arguing that the trial court erred in applying the principle of litispendentia and forum non conveniens and in ruling that it had no jurisdiction over the defendants, despite the previousattachment of shares of stocks belonging to 1488, Inc. and Daic.

On January 6, 1992, the Court of Appeals 4 affirmed the dismissal of Civil Case No. 16563 against Ducat, 1488, Inc.,and Daic on the ground of litis pendentia, thus:chanrob1es virtual 1aw library

The plaintiffs in the U.S. court are 1488 Inc. and/or Drago Daic, while the defendants are Philsec, the AyalaInternational Finance Ltd. (BPI-IFLs former name) and the Athona Holdings, NV. The case at bar involves the sameparties. The transaction sued upon by the parties, in both cases is the Warranty Deed executed by and betweenAthona Holdings and 1488 Inc. In the U.S. case, breach of contract and the promissory notes are sued upon by 1488Inc., which likewise alleges fraud employed by herein appellants, on the marketability of Ducats securities given inexchange for the Texas property. The recovery of a sum of money and damages, for fraud purportedly committed by

appellees, in overpricing the Texas land, constitute the action before the Philippine court, which likewise stems fromthe same Warranty Deed.

The Court of Appeals also held that Civil Case No. 16563 was an action in personam for the recovery of a sum ofmoney for alleged tortious acts, so that service of summons by publication did not vest the trial court with jurisdictionover 1488, Inc. and Drago Daic. The dismissal of Civil Case No. 16563 on the ground of forum non conveniens waslikewise affirmed by the Court of Appeals on the ground that the case can be better tried and decided by the U.S.court:chanrob1es virtual 1aw library

The U.S. case and the case at bar arose from only one main transaction, and involve foreign elements, to wit: 1) theproperty subject matter of the sale is situated in Texas, U.S.A.; 2) the seller, 1488 Inc. is a non-resident foreigncorporation; 3) although the buyer, Athona Holdings, a foreign corporation which does not claim to be doing businessin the Philippines, is wholly owned by Philsec, a domestic corporation, Athona Holdings is also owned by BPI-IFL, alsoa foreign corporation; 4) the Warranty Deed was executed in Texas, U.S.A.

In their present appeal, petitioners contend that:chanrob1es virtual 1aw library

1. THE DOCTRINE OF PENDENCY OF ANOTHER ACTION BETWEEN THE SAME PARTIES FOR THE SAME CAUSE (LITISPENDENTIA) RELIED UPON BY THE COURT OF APPEALS IN AFFIRMING THE TRIAL COURTS DISMISSAL OF THE CIVILACTION IS NOT APPLICABLE.

2. THE PRINCIPLE OF FORUM NON CONVENIENS ALSO RELIED UPON BY THE COURT OF APPEALS IN AFFIRMING THEDISMISSAL BY THE TRIAL COURT OF THE CIVIL ACTION IS LIKEWISE NOT APPLICABLE.

3. AS A COROLLARY TO THE FIRST TWO GROUNDS, THE COURT OF APPEALS ERRED IN NOT HOLDING THATPHILIPPINE PUBLIC POLICY REQUIRED THE ASSUMPTION, NOT THE RELINQUISHMENT, BY THE TRIAL COURT OF ITSRIGHTFUL JURISDICTION IN THE CIVIL ACTION FOR THERE IS EVERY REASON TO PROTECT AND VINDICATE


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PETITIONERS RIGHTS FOR TORTIOUS OR WRONGFUL ACTS OR CONDUCT PRIVATE RESPONDENTS (WHO AREMOSTLY NON-RESIDENT ALIENS) INFLICTED UPON THEM HERE IN THE PHILIPPINES.

We will deal with these contentions in the order in which they are made.

First. It is important to note in connection with the first point that while the present case was pending in the Court ofAppeals, the United States District Court for the Southern District of Texas rendered judgment 5 in the case before it.The judgment, which was in favor of private respondents, was affirmed on appeal by the Circuit Court of Appeals. 6Thus, the principal issue to be resolved in this case is whether Civil Case No. 16536 is barred by the judgment of theU.S. court.

Private respondents contend that for a foreign judgment to be pleaded as res judicata, a judgment admitting theforeign decision is not necessary. On the other hand, petitioners argue that the foreign judgment cannot be given theeffect of res judicata without giving them an opportunity to impeach it on grounds stated in Rule 39, 50 of the Rulesof Court, to wit: "want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law orfact."cralaw virtua1aw library

Petitioners contention is meritorious. While this court has given the effect of res judicata to foreign judgments inseveral cases, 7 it was after the parties opposed to the judgment had been given ample opportunity to repel them ongrounds allowed under the law. 8 It is not necessary for this purpose to initiate a separate action or proceeding forenforcement of the foreign judgment. What is essential is that there is opportunity to challenge the foreign judgment,in order for the court to properly determine its efficacy. This is because in this jurisdiction, with respect to actions inpersonam, 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. 9 Rule 39, 50 provides:chanrob1es

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SEC. 50. Effect of foreign judgments. The effect of a judgment of a tribunal of a foreign country, having jurisdictionto pronounce the judgment is as follows:chanrob1es virtual 1aw library

(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 partiesand 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.

Thus, in the case of General Corporation of the Philippines v. Union Insurance Society of Canton, Ltd., 10 whichprivate respondents invoke for claiming conclusive effect for the foreign judgment in their favor, the foreign judgmentwas considered res judicata because this Court found "from the evidence as well as from appellants own pleadings"

11 that the foreign court did not make a "clear mistake of law or fact" or that its judgment was void for want ofjurisdiction or because of fraud or collusion by the defendants. Trial had been previously held in the lower court andonly afterward was a decision rendered, declaring the judgment of the Supreme Court of the State of Washington tohave the effect of res judicata in the case before the lower court. In the same vein, in Philippine InternationalShipping Corp. v. Court of Appeals, 12 this court held that the foreign judgment was valid and enforceable in thePhilippines there being no showing that it was vitiated by want of notice to the party, collusion, fraud or clear mistakeof law or fact. The prima facie presumption under the Rule had not been rebutted.

In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the judgment of the U.S.court as basis for declaring it res judicata or conclusive of the rights of private respondents. The proceedings in thetrial court were summary. Neither the trial court nor the appellate court was even furnished copies of the pleadings inthe U.S. court or apprised of the evidence presented thereat, to assure a proper determination of whether the issuesthen being litigated in the U.S. court were exactly the issues raised in this case such that the judgment that might berendered would constitute res judicata. As the trial court stated in its disputed order dated March 9, 1988.

On the plaintiffs claim in its Opposition that the causes of action of this case and the pending case in the UnitedStates are not identical, precisely the Order of January 26, 1988 never found that the causes of action of this case andthe case pending before the USA Court, were identical. (emphasis added)

It was error therefore for the Court of Appeals to summarily rule that petitioners action is barred by the principle ofres judicata. Petitioners in fact questioned the jurisdiction of the U.S. court over their persons, but their claim wasbrushed aside by both the trial court and the Court of Appeals. 13

Moreover, the Court notes that on April 22, 1992, 1488, Inc. and Daic filed a petition for the enforcement of judgmentin the Regional Trial Court of Makati, where it was docketed as Civil Case No. 92-1070 and assigned to Branch 134,although the proceedings were suspended because of the pendency of this case. To sustain the appellate courts rulingthat the foreign judgment constitutes res judicata and is a bar to the claim of petitioners would effectively preclude


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petitioners from repelling the judgment in the case for enforcement. An absurdity could then arise: a foreign judgmentis not subject to challenge by the plaintiff against whom it is invoked, if it is pleaded to resist a claim as in this case,but it may be opposed by the defendant if the foreign judgment is sought to be enforced against him in a separateproceeding. This is plainly untenable. It has been held therefore that:chanrob1es virtual 1aw library

[A] foreign judgment may not be enforced if it is not recognized in the jurisdiction where affirmative relief is beingsought. Hence, in the interest of justice, the complaint should be considered as a petition for the recognition of theHongkong judgment under Section 50 (b), Rule 39 of the Rules of Court in order that the defendant, privaterespondent herein, may present evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of fact andlaw, if applicable. 14

Accordingly, to insure the orderly administration of justice, this case and Civil Case No. 92-1070 should beconsolidated. 15 After all, the two have been filed in the Regional Trial Court of Makati, albeit in different salas, thiscase being assigned to Branch 56 (Judge Fernando V. Gorospe), while Civil Case No. 92-1070 is pending in Branch134 of Judge Ignacio Capulong. In such proceedings, petitioners should have the burden of impeaching the foreign

judgment and only in the event they succeed in doing so may they proceed with their action against privaterespondents.

Second. Nor is the trial courts refusal to take cognizance of the case justifiable under the principle of forum nonconveniens. First, a motion to dismiss is limited to the grounds under Rule 16, 1, which does not include forum nonconveniens. 16 The propriety of dismissing a case based on this principle requires a factual determination, hence, it ismore properly considered a matter of defense. Second, while it is within the discretion of the trial court to abstainfrom assuming jurisdiction on this ground, it should do so only after "vital facts are established, to determine whetherspecial circumstances" require the courts desistance. 17

In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings filed by privaterespondents in connection with the motion to dismiss. It failed to consider that one of the plaintiffs (PHILSEC) is adomestic corporation and one of the defendants (Ventura Ducat) is a Filipino, and that it was the extinguishment ofthe latters debt which was the object of the transaction under litigation. The trial court arbitrarily dismissed the caseeven after finding that Ducat was not a party in the U.S. case.

Third. It was error we think for the Court of Appeals and the trial court to hold that jurisdiction over 1488, Inc. andDaic could not be obtained because this is an action in personam and summons were served by extraterritorialservice. Rule 14, 17 on extraterritorial service provides that service of summons on a non-resident defendant may beeffected out of the Philippines by leave of Court where, among others, "the property of the defendant has beenattached within the Philippines." 18 It is not disputed that the properties, real and personal, of the privaterespondents had been attached prior to service of summons under the Order of the trial court dated April 20, 1987.19

Fourth. As for the temporary restraining order issued by the Court on June 29, 1994, to suspend the proceedings inCivil Case No. 92-1445 filed by Edgardo V. Guevarra to enforce so-called Rule 11 sanctions imposed on the petitionersby the U.S. court, the Court finds that the judgment sought to be enforced is severable from the main judgment underconsideration in Civil Case No. 16563. The separability of Guevarras claim is not only admitted by petitioners, 20 itappears from the pleadings that petitioners only belatedly impleaded Guevarra as defendant in Civil Case No. 16563.21 Hence, the TRO should be lifted and Civil Case No. 92-1445 allowed to proceed.chanroblesvirtuallawlibrary

WHEREFORE, the decision of the Court of Appeals is REVERSED and Civil Case No. 16563 is REMANDED to theRegional Trial Court of Makati for consolidation with Civil Case No. 92-1070 and for further proceedings in accordancewith this decision. The temporary restraining order issued on June 29, 1994 is hereby LIFTED.


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[G.R. No. L-24170. December 16, 1968.]

ILLUH ASAALI, HATIB ABDURASID, INGKOH BANTALA, BASOK INGKIN, and MOHAMMAD BANTALA,Petitioners, v. THE COMMISSIONER OF CUSTOMS, Respondent.

SYLLABUS

1. COURTS; COURT OF TAX APPEALS; APPEAL FROM DECISIONS THEREOF TO SUPREME COURT; FINDINGS OF FACT

BY SUBSTANTIAL EVIDENCE, BINDING There is no plausible reason not to accept in its entirety the conclusionreached by the Court of Tax Appeals. Nor even if the persuasive element therein were not so overwhelming, could wealter the decisive facts as found by it. For it is now beyond question that its finding, if supported by substantialevidence, binds us, only questions of law being for us to resolve. Where the issue raised belongs to the formercategory, we lack the power to review.

2. TAXATION; SEIZURE AND FORFEITURE OF VESSELS AND CARGO FOR SMUGGLING; JURISDICTION OF THECOMMISSIONER OF CUSTOMS IN RELATION THERETO From the apprehension and seizure of the vessel in questionon the high seas beyond the territorial waters of the Philippines, the absence of jurisdiction of Commissioner ofCustoms is predicated. Such contention of petitioners-appellants is without merit. It is unquestioned that all vesselsseized are of Philippine registry. The Revised Penal Code leaves no doubt as to its applicability and enforceability notonly within the Philippines, its interior waters and maritime zone, but also outside of its jurisdiction against thosecommitting offense while on a Philippine ship . . . . The principle of law that sustains the validity of such a provisionequally supplies a firm foundation for the seizure of the five sailing vessels found thereafter to have violated the

applicable provisions of the Revised Administrative Code.

3. ID.; ID.; ID.; EXPIRATION OF R.A. 650 DID NOT DIVEST THE COMMISSIONER OF CUSTOMS OF JURISDICTION Despite the expiration of Republic Act 650 the Commissioner of Customs retained his jurisdiction over the case andcould continue to take cognizance thereof until its final determination, for the main question brought in by the appealfrom the decision of the Collector of Customs was the legality or illegality of the decision of the Collector of Customsand that question could not have been abated by the mere expiration of R.A. No. 650. We firmly believe that theexpiration of R.A. 650 could not have produced the effect: (1) of declaring legal the importation of the cottoncounterpanes which were illegally imported, and (2) of declaring the seizure and forfeiture ordered by the Collector ofCustoms illegal or null and void; in other words, it could not have the effect of annulling or setting aside the decisionof the Collector of Customs which was rendered while the law was in force and which should stand until it is revokedby the appellate tribunal.

4. CONSTITUTIONAL LAW; BILL OF RIGHTS; SEIZURE IN INSTANT CASE DOES NOT CONSTITUTE DENIAL OF DUE

PROCESS There could be no denial of due process. There was nothing arbitrary about the manner in which suchseizure and forfeiture were effected. The right to a hearing of petitioners-appellants was respected. They could nothave been unaware of what they were doing. It would be an affront to reason if under the circumstances they couldbe allowed to raise in all seriousness a due process question. Such a conditional guaranty, basic and fundamental,certainly should not be allowed to lend itself as an instrument for escaping a liability arising from ones own nefariousacts.

D E C I S I O N

FERNANDO,J.

The policy relentlessly adhered to and unhesitatingly pursued to minimize, if not to do away entirely, with the evil andcorruption that smuggling brings in its wake would be frustrated and set at naught if the action taken by respondentCommissioner of Customs in this case, as affirmed by the Court of Tax Appeals, were to be set aside and this appealfrom the decision of the latter were to succeed. Fortunately, the controlling principles of law do not call for a contraryconclusion. It cannot be otherwise if the legitimate authority vested in the government were not to be reduced tofutility and impotence in the face of an admittedly serious malady, that at times has assumed epidemic proportions.

The principal question raised by petitioners, owners of five sailing vessels and the cargo loaded therein declaredforfeited by respondent Commissioner of Customs for smuggling, is the validity of their interception and seizure bycustoms officials on high seas, the contention being raised that importation had not yet begun and that the seizurewas affected outside our territorial waters.

Why such a plea could not be given the least credence without doing violence to common sense and placing the law in


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disrepute would be apparent from a statement of the case and the findings of facts as set forth in the decision nowunder review, of the Court of Tax Appeals, dated November 19, 1964, the opinion being penned by the late AssociateJudge Augusto M. Luciano.

His opinion starts thus: "This is an appeal from the decision of the Acting Commissioner of Customs in Customs CaseNo. 113, dated September 26,1961, (Jolo Seizure Identification Cases Nos. 38, 39, 40, 41, & 42) decreeing theforfeiture of five (5) sailing vessels (kumpits) named Iroc-Iroc, Lahat-lahat, LiberalWing 111, Sulu AreaCommand, and Business, with their respective cargoes of blue seal cigarettes and rattan chairs, for violation ofSection 1363(a) of the Revised Administrative Code and Section 20 of Republic Act No. 426 in relation with Section1363(f) of The Revised Administrative Code." 1

The facts according to the above opinion "are not controverted." Thus: "It appears that on September 10, 1950, atabout noon time, a customs patrol team on board Patrol Boat ST-23 intercepted the five (5) sailing vessels in questionon the high seas, between British North Borneo and Sulu while they were heading towards Tawi-tawi, Sulu. Afterordering the vessels to stop, the customs officers boarded and found on board, 181 cases of Herald cigarettes, 9cases ofCamel cigarettes, and some pieces of rattan chairs. The sailing vessels are all of Philippine registry, ownedand manned by Filipino residents of Sulu, and of less than thirty (30) tons burden. They came from Sandakan, BritishNorth Borneo, but did not possess any permit from the Commissioner of Customs to engage in the importation ofmerchandise into any Port of the Sulu sea, as required by Section 1363(a) of the Revised Administrative Code. Theircargoes were not covered by the required import license under Republic Act No. 426, otherwise known as the ImportControl Law. 2

Respondent Commissioner of Customs, as noted at the outset, affirmed the decision rendered by the Collector ofCustoms of Jolo, who found cause for forfeiture under the law of the vessels and the cargo contained therein. He was,

as also already made known, sustained by the Court of Tax Appeals. Hence this petition for review.

The first two errors assigned by petitioners would impugn the jurisdiction of the Bureau of Customs to institute seizureproceedings and thereafter to declare the forfeiture of the vessels in question and their cargo. They would justify theirstand thus:" In the light of the fact that the vessels involved with the articles laden therein were apprehended andseized on the high seas, beyond the territorial waters of the Philippines, the said vessels could not have touched anyplace or port in the Philippines, whether a port or place of entry or not, consequently, the said vessels could not havebeen engaged in the importation of the articles laden therein into any Philippine port or place, whether a port or placeof entry or not, to have incurred the liability of forfeiture under Section 1363(a) of the Revised Administrative Code."3

Such a contention was advanced by petitioners before the Court of Tax Appeals. It met the repudiation that itdeserved. Thus: "We perfectly see the point of the petitioners but considering the circumstances surrounding theapprehension of the vessels in question, we believe that Section 1363(a) of the Revised Administrative Code should

be apprehended to the case at bar. It has been established that the five vessels came from Sandakan, British NorthBorneo, a foreign port, and when intercepted, all of them were heading towards Tawi- tawi, a domestic port within theSulu sea. Laden with foreign manufactured cigarettes, they did not possess the import license required by theRepublic Act No. 426, nor did they carry a permit from the Commissioner of Customs to engage in importation intoany port in the Sulu sea. Their course announced loudly their intention not merely to skirt along the territorialboundary of the Philippines but to come within our limits and land somewhere in Tawi-tawi towards which their prowswere pointed. As a matter of fact, they were about to cross our aquatic boundary but for the intervention of a customspatrol which, from all appearances, was more than eager to accomplish its mission." 4 The sense of realism and thevigorous language employed by the late Judge Luciano in rejecting such a plea deserve to be quoted. Thus: "Toentertain even for a moment the thought that these vessels were probably not bound for a Philippine port would betoo much a concession even for a simpleton or a perennial optimist. It is quite irrational for Filipino sailors manningfive Philippines vessels to sneak out of the Philippines and go to British North Borneo, and come a long way backladen with highly taxable goods only to turn about upon reaching the brink of our territorial waters and head foranother foreign port." 5

1. We find no plausible reason not to accept in its entirety such a conclusion reached by the Court of Tax Appeals.Nor, even if the persuasive element in the above view were not so overwhelming, could we alter the decisive facts asfound by it. For it is now beyond question that its finding, if supported by substantial evidence, binds us, onlyquestions of law being for us to resolve. Where the issue raised belongs to the former category, we lack the power ofreview. 6

Moreover, for understandable reasons, we feel extreme reluctance to substitute our own discretion for that of theCourt of Tax Appeals in its appreciation of the relevant facts and its appraisal of their significance. As we had occasionto state in a relatively recent decision: "Nor as a matter of principle is it advisable for this Court to set aside theconclusion reached by an agency such as the Court of Tax Appeals which is, by the very nature of its function,dedicated exclusively to the study and consideration of tax problems and has necessarily developed an expertise onthe subject .,. there has been an abuse or improvident exercise of its authority." 7


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2. We thus could rest our decision affirming that of the Court of Tax Appeals on the above consideration. It might notbe amiss however to devote some degree of attention to the legal points raised in the above two assignment oferrors, discussed jointly by petitioners- appellants, alleging the absence of jurisdiction, the deprivation of propertywithout due process of law and the abatement of liability consequent upon the repeal of Republic Act No. 426. Not oneof the principles of law relied upon suffices to call for reversal of the action taken by the respondent Commissioner ofCustoms, even if the facts presented a situation less conclusive against the pretension of Petitioners-Appellants.

From the apprehension and seizure of the vessels in question on the high seas beyond the territorial waters of thePhilippines, the absence of jurisdiction of Commissioner of Customs is predicated. Such contention of petitioners-

appellants is without merit.

It is unquestioned that all vessels seized are of Philippine registry. The Revised Penal Code leaves no doubt as to itsapplicability and enforceability not only within the Philippines, its interior waters and maritime zone, but also outsideof its jurisdiction against those committing offense while on a Philippine ship . . . 8 The principle of law that sustainsthe validity of such a provision equally supplies a firm foundation for the seizure of the five sailing vessels foundthereafter to have violated the applicable provisions of the Revised Administrative Code. 9

Moreover, it is a well settled doctrine of International Law that goes back to Chief Justice Marshal ls opinion in Churchv. Hubbart, 10 an 1804 decision, that a state has the right to protect itself and its revenues, a right not limited to itsown territory but extending to the high seas. In the language of Chief Justice Marshall: "The authority of a nationwithin its own territory is absolute and exclusive. The seizure of a vessel within the range of its cannon by a foreignforce is an invasion of that territory, and is a hostile act which it is its duty to repel. But its power to secure itself frominjury may certainly be exercised beyond the limits of its territory."cralaw virtua1aw library

The question asked in the brief of petitioners-appellants as to whether the seizure of the vessels in question and thecargoes on the high seas and thus beyond the territorial waters of the Philippines was legal must be answered in theaffirmative.

4. The next question raised is the alleged denial of due process arising from such forfeiture and seizure. The argumenton the alleged lack of validity of the action taken by the Commissioner of Customs is made to rest on the fact that thealleged offense imputed to petitioners-appellants is a violation of Section 1363(a) and not Section 1363(f). The title ofSection 1363 is clear. "Property subject to forfeiture under customs laws." The first subsection thereof, (a), coversany vessel including cargo unlawfully engaged in the importation of merchandise except a port of entry. Subsection (f)speaks of any merchandise of any prohibited importation, the importation of which is effected or attempted contraryto law and all other merchandise which in the opinion of the Collector of Customs have been used are or wereintended to be used as instrument in the importation or exportation of the former.

From the above recital of the legal provisions relied upon, it would appear most clearly that the due process questionraised is insubstantial. Certainly, the facts on which the seizure was based were not unknown to petitioners-appellants. On those facts the liability of the vessels and merchandise under the above terms of the statute wouldappear to be undeniable. The action taken then by the Commissioner of Customs was in accordance with law.

How could there be a denial of due process? There was nothing arbitrary about the manner in which such seizure andforfeiture were effected. The right to a hearing of petitioners-appellants was respected. They could not have beenunaware of what they were doing. It would be an affront to reason if under the above circumstances they could beallowed to raise in all seriousness a due process question. Such a constitutional guaranty, basic and fundamental,certainly should not be allowed to lend itself as an instrument for escaping a liability arising from ones own nefariousacts.

5. Petitioners-appellants would further assail the validity of the action taken by the respondent Commissioner ofCustoms by the plea that the repeal of Republic Act No. 426 abated whatever liability could have been incurred

thereunder. This argument raised before the Court of Tax Appeals was correctly held devoid of any persuasive force.The decision under review cited our opinion in Golay-Buchel & Cie v. Commissioner of Customs 11 to the effect thatthe expiration of the Import Control Law "did not produce the effect of declaring legal the importation of goods whichwere illegally imported and the seizure and forfeiture thereof as ordered by the Collector of Customs illegal or null andvoid."cralaw virtua1aw library

Roxas v. Sayoc 12 announced that principle earlier. Thus: "Herein, we are concerned with the effect of the expirationof a law, not with the abrogation of a law, and we hold the view that once the Commissioner of Customs has acquired

jurisdiction over the case, the mere expiration of Republic Act No. 650 will not divest him of his jurisdiction thereonduly acquired while said law was still in force. In other words, we believe that despite the expiration of Republic ActNo. 650 the Commissioner of Customs retained his jurisdiction over the case and could continue to take cognizancethereof until its final determination, for the main question brought in by the appeal from the decision of the Collectorof Customs was the legality or illegality of the decision of the Collector of Customs, and that question could not have


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been abated by the mere expiration of Republic Act No. 650. We firmly believe that the expiration of Republic Act No.650 could not have produced the effect (1) of declaring legal the importation of the cotton counterpanes which wereillegally imported, and (2) of declaring the seizure and forfeiture ordered by the Collector of Customs illegal or nulland void; in other words, it could not have the effect of annulling or setting aside the decision of the Collector ofCustoms which was rendered while the law was in force and which should stand until it is revoked by the appellatetribunal."cralaw virtua1aw library

As late as 1965, in Bombay Dept. Store v. Commissioner of Customs, 13 we had occasion to reaffirm the doctrine inthe above two decisions, the present Chief Justice, speaking for the Court, stating that such expiration of the period ofeffectivity of Republic Act No. 650 "did not have the effect of depriving the Commissioner of Customs of the

jurisdiction, acquired by him prior thereto, to act on cases of forfeiture pending before him, which are in the nature ofproceedings in rem. . . ."cralaw virtua1aw library

It is thus most evident that the Court of Tax Appeals had not in any wise refused to adhere faithfully to controllinglegal principles when it sustained the action taken by respondent Commissioner of Customs. It would be a reproachand a reflection on the law if on the facts as they had been shown to exist, the seizure and forfeiture of the vesselsand cargo in question were to be characterized as outside the legal competence of our government and violative ofthe constitutional rights of petitioners-appellants. Fortunately, as had been made clear above, that would be anundeserved reflection and an unwarranted reproach. The vigor of the war against smuggling must not be hamperedby a misreading of international law concepts and a misplaced reliance on a constitutional guaranty that has not inany wise been infringed.

WHEREFORE, the decision of respondent Court of Tax Appeals of November 19, 1964, is affirmed. With costs againstPetitioners-Appellants.


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December 16, 1910

G.R. No. 5887THE UNITED STATES,plaintiff-appellee, vs. LOOK CHAW (alias LUK CHIU),defendant-appellant.

ARELLANO, C. J.:

The first complaint filed against the defendant, in the Court of First Instance of Cebu, stated that he "carried, kept,possessed and had in his possession and control, 96 kilogrammes of opium," and that "he had been surprised in the

act of selling 1,000 pesos worth prepared opium."

The defense presented a demurrer based on two grounds, the second of which was the more than one crime wascharged in the complaint. The demurrer was sustained, as the court found that the complaint contained two charges,one, for the unlawful possession of opium, and the other, for the unlawful sale of opium, and, consequence of thatruling, it ordered that the fiscal should separated one charge from the other and file a complaint for each violation;this, the fiscal did, and this cause concerns only the unlawful possession of opium. It is registered as No. 375, in theCourt of First Instance of Cebu, and as No. 5887 on the general docket of this court.

The facts of the case are contained in the following finding of the trial court:

The evidence, it says, shows that between 11 and 12 o'clock a. m. on the present month (stated as August 19, 1909),several persons, among them Messrs. Jacks and Milliron, chief of the department of the port of Cebu and internal-

revenue agent of Cebu, respectively, went abroad the steamship Erroll to inspect and search its cargo, and found, firstin a cabin near the saloon, one sack (Exhibit A) and afterwards in the hold, another sack (Exhibit B). The sack referredto as Exhibit A contained 49 cans of opium, and the other, Exhibit B, the larger sack, also contained several cans ofthe same substance. The hold, in which the sack mentioned in Exhibit B was found, was under the defendant'scontrol, who moreover, freely and of his own will and accord admitted that this sack, as well as the other referred toin Exhibit B and found in the cabin, belonged to him. The said defendant also stated, freely and voluntarily, that hehad bought these sacks of opium, in Hongkong with the intention of selling them as contraband in Mexico or VeraCruz, and that, as his hold had already been searched several times for opium, he ordered two other Chinamen tokeep the sack. Exhibit A.

It is to be taken into account that the two sacks of opium, designated as Exhibits A and B, properly constitutethe corpus delicti. Moreover, another lot of four cans of opium, marked, as Exhibit C, was the subject matter ofinvestigation at the trial, and with respect to which the chief of the department of the port of Cebu testified that theywere found in the part of the ship where the firemen habitually sleep, and that they were delivered to the first officer

of the ship to be returned to the said firemen after the vessel should have left the Philippines, because the firemenand crew of foreign vessels, pursuant to the instructions he had from the Manila custom-house, were permitted toretain certain amounts of opium, always provided it should not be taken shore.

And, finally, another can of opium, marked "Exhibit D," is also corpus delicti and important as evidence in this cause.With regard to this the internal-revenue agent testified as follows:

FISCAL. What is it?

WITNESS. It is a can opium which was bought from the defendant by a secret-service agent and taken to the office ofthe governor to prove that the accused had opium in his possession to sell.

On motion by the defense, the court ruled that this answer might be stricken out "because it refers to a sale." But,

with respect to this answer, the chief of the department of customs had already given this testimony, to wit:

FISCAL. Who asked you to search the vessel?

WITNESS. The internal-revenue agent came to my office and said that a party brought him a sample of opium andthat the same party knew that there was more opium on board the steamer, and the agent asked that the vessel besearched.

The defense moved that this testimony be rejected, on the ground of its being hearsay evidence, and the court onlyordered that the part thereof "that there was more opium, on board the vessel" be stricken out.


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The defense, to abbreviate proceedings, admitted that the receptacles mentioned as Exhibits A, B, and C, containedopium and were found on board the steamship Erroll, a vessel of English nationality, and that it was true that thedefendant stated that these sacks of opium were his and that he had them in his possession.

According to the testimony of the internal-revenue agent, the defendant stated to him, in the presence of theprovincial fiscal, of a Chinese interpreter (who afterwards was not needed, because the defendant spoke English), thewarden of the jail, and four guards, that the opium seized in the vessel had been bought by him in Hongkong, at threepesos for each round can and five pesos for each one of the others, for the purpose of selling it, as contraband, inMexico and Puerto de Vera Cruz; that on the 15th the vessel arrived at Cebu, and on the same day he sold opium;that he had tried to sell opium for P16 a can; that he had a contract to sell an amount of the value of about P500;

that the opium found in the room of the other two Chinamen prosecuted in another cause, was his, and that he hadleft it in their stateroom to avoid its being found in his room, which had already been searched many times; and that,according to the defendant, the contents of the large sack was 80 cans of opium, and of the small one, 49, and thetotal number, 129.

It was established that the steamship Erroll was of English nationality, that it came from Hongkong, and that it wasbound for Mexico, via the call ports of Manila and Cebu.

The defense moved for a dismissal of the case, on the grounds that the court had no jurisdiction to try the same andthe facts concerned therein did not constitute a crime. The fiscal, at the conclusion of his argument, asked that themaximum penalty of the law be imposed upon the defendant, in view of the considerable amount of opium seized. Thecourt ruled that it did not lack jurisdiction, inasmuch as the crime had been committed within its district, on the wharfof Cebu.

The court sentenced the defendant to five years' imprisonment, to pay a fine of P10,000, with additional subsidiaryimprisonment in case of insolvency, though not to exceed one third of the principal penalty, and to the payment of thecosts. It further ordered the confiscation, in favor of the Insular Government, of the exhibits presented in the case,and that, in the event of an appeal being taken or a bond given, or when the sentenced should have been served, thedefendant be not released from custody, but turned over to the customs authorities for the purpose of the fulfillmentof the existing laws on immigration.

From this judgment, the defendant appealed to this court.

The appeal having been heard, together with the allegations made therein by the parties, it is found: That, althoughthe mere possession of a thing of prohibited use in these Islands, aboard a foreign vessel in transit, in any of theirports, does not, as a general rule, constitute a crime triable by the courts of this country, on account of such vessel

being considered as an extension of its own nationality, the same rule does not apply when the article, whose use isprohibited within the Philippine Islands, in the present case a can of opium, is landed from the vessel upon Philippinesoil, thus committing an open violation of the laws of the land, with respect to which, as it is a violation of the penallaw in force at the place of the commission of the crime, only the court established in that said place itself hadcompetent jurisdiction, in the absence of an agreement under an international treaty.

It is also found: That, even admitting that the quantity of the drug seized, the subject matter of the present case, wasconsiderable, it does not appear that, on such account, the two penalties fixed by the law on the subject, should beimposed in the maximum degree.

Therefore, reducing the imprisonment and the fine imposed to six months and P1,000, respectively, we affirm in allother respects the judgment appealed from, with the costs of this instance against the appellant. So ordered.


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G.R. No. L-18924 October 19, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS,plaintiff-appellant,vs.WONG CHENG (alias WONG CHUN),defendant-appellee.

ROMUALDEZ,J.:

In this appeal the Attorney-General urges the revocation of the order of the Court of First Instance of Manila,

sustaining the demurrer presented by the defendant to the information that initiated this case and in which theappellee is accused of having illegally smoked opium, aboard the merchant vessel Changsaof English nationality whilesaid vessel was anchored in Manila Bay two and a half miles from the shores of the city.

The demurrer alleged lack of jurisdiction on the part of the lower court, which so held and dismissed the case.

The question that presents itself for our consideration is whether such ruling is erroneous or not; and it will or will notbe erroneous according as said court has or has no jurisdiction over said offense.

The point at issue is whether the courts of the Philippines have jurisdiction over crime, like the one herein involved,committed aboard merchant vessels anchored in our jurisdiction waters. 1awph!l.net

There are two fundamental rules on this particular matter in connection with International Law; to wit, the French

rule, according to which crimes committed aboard a foreign merchant vessels should not be prosecuted in the courtsof the country within whose territorial jurisdiction they were committed, unless their commission affects the peace andsecurity of the territory; and the English rule, based on the territorial principle and followed in the United States,according to which, crimes perpetrated under such circumstances are in general triable in the courts of the countrywithin territory they were committed. Of this two rules, it is the last one that obtains in this jurisdiction, because atpresent the theories and jurisprudence prevailing in the United States on this matter are authority in the Philippineswhich is now a territory of the United States.

In the cases of The Schooner Exchange vs. M'Faddon and Others(7 Cranch [U. S.], 116), Chief Justice Marshall said:

. . . When merchant vessels enter for the purposes of trade, it would be obviously inconvenient and dangerousto society, and would subject the laws to continual infraction, and the government to degradation, if suchindividuals or merchants did not owe temporary and local allegiance, and were not amenable to the

jurisdiction of the country. . . .

In United States vs.Bull (15 Phil., 7), this court held:

. . . No court of the Philippine Islands had jurisdiction over an offense or crime committed on the high seas orwithin the territorial waters of any other country, but when she came within three miles of a line drawn fromthe headlands, which embrace the entrance to Manila Bay, she was within territorial waters, and a new set ofprinciples became applicable. (Wheaton, International Law [Dana ed.], p. 255, note 105; Bonfils, Le Droit Int.,secs. 490 et seq.; Latour, La Mer Ter., ch. 1.) The ship and her crew were then subject to the jurisdiction ofthe territorial sovereign subject to such limitations as have been conceded by that sovereignty through theproper political agency. . . .

It is true that in certain cases the comity of nations is observed, as in Mali and Wildenhus vs. Keeper of the CommonJail(120 U.., 1), wherein it was said that:

. . . The principle which governs the whole matter is this: Disorder which disturb only the peace of the ship orthose on board are to be dealt with exclusively by the sovereignty of the home of the ship, but those whichdisturb the public peace may be suppressed, and, if need be, the offenders punished by the proper authoritiesof the local jurisdiction. It may not be easy at all times to determine which of the two jurisdictions a particularact of disorder belongs. Much will undoubtedly depend on the attending circumstances of the particular case,but all must concede that felonious homicide is a subject for the local jurisdiction, and that if the properauthorities are proceeding with the case in the regular way the consul has no right to interfere to prevent it.

Hence in United States vs.Look Chaw (18 Phil., 573), this court held that:


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Although the mere possession of an article of prohibited use in the Philippine Islands, aboard a foreign vesselin transit in any local port, does not, as a general rule, constitute a crime triable by the courts of the Islands,such vessels being considered as an extension of its own nationality, the same rule does not apply when thearticle, the use of which is prohibited in the Islands, is landed from the vessels upon Philippine soil; in such acase an open violation of the laws of the land is committed with respect to which, as it is a violation of thepenal law in force at the place of the commission of the crime, no court other than that established in the saidplace has jurisdiction of the offense, in the absence of an agreement under an international treaty.

As to whether the United States has ever consented by treaty or otherwise to renouncing such jurisdiction or a partthereof, we find nothing to this effect so far as England is concerned, to which nation the ship where the crime in

question was committed belongs. Besides, in his work "Treaties, Conventions, etc.," volume 1, page 625, Malloy saysthe following:

There shall be between the territories of the United States of America, and all the territories of His BritanicMajesty in Europe, a reciprocal liberty of commerce. The inhabitants of the two countries, respectively, shallhave liberty freely and securely to come with their ships and cargoes to all such places, ports and rivers, inthe territories aforesaid, to which other foreigners are permitted to come, to enter into the same, and toremain and reside in any parts of the said territories, respectively; also to hire and occupy houses andwarehouses for the purposes of their commerce; and, generally, the merchants and traders of each nationrespectively shall enjoy the most complete protection and security for their commerce, but subject always tothe laws and statutes of the two countries, respectively. (Art. 1, Commerce and Navigation Convention.)

We have seen that the mere possession of opium aboard a foreign vessel in transit was held by this court not triable

by or courts, because it being the primary object of our Opium Law to protect the inhabitants of the Philippinesagainst the disastrous effects entailed by the use of this drug, its mere possession in such a ship, without being usedin our territory, does not being about in the said territory those effects that our statute contemplates avoiding. Hencesuch a mere possession is not considered a disturbance of the public order.

But to smoke opium within our territorial limits, even though aboard a foreign merchant ship, is certainly a breach ofthe public order here established, because it causes such drug to produce its pernicious effects within our territory. Itseriously contravenes the purpose that our Legislature has in mind in enacting the aforesaid repressive statute.Moreover, as the Attorney-General aptly observes:

. . . The idea of a person smoking opium securely on board a foreign vessel at anchor in the port of Manila inopen defiance of the local authorities, who are impotent to lay hands on him, is simply subversive of publicorder. It requires no unusual stretch of the imagination to conceive that a foreign ship may come into the portof Manila and allow or solicit Chinese residents to smoke opium on board.

The order appealed from is revoked and the cause ordered remanded to the court of origin for further proceedings inaccordance with law, without special findings as to costs. So ordered.


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[G.R. No. 120135. March 31, 2003.]

BANK OF AMERICA NT&SA, BANK OF AMERICA INTERNATIONAL, LTD., Petitioners, v. COURT OF APPEALS,HON. MANUEL PADOLINA, EDUARDO LITONJUA, SR., and AURELIO K. LITONJUA, JR., Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ,J.

This is a petition for review on certiorariunder Rule 45 of the Rules of Court assailing the November 29, 1994 decisionof the Court of Appeals 1 and the April 28, 1995 resolution denying petitioners motion for reconsideration.

The factual background of the case is as follows:chanrob1es virtual 1aw library

On May 10, 1993, Eduardo K. Litonjua, Sr. and Aurelio J. Litonjua (Litonjuas, for brevity) filed a Complaint 2 beforethe Regional Trial Court of Pasig against the Bank of America NT&SA and Bank of America International, Ltd.(defendant banks for brevity) alleging that: they were engaged in the shipping business; they owned two vessels:Don Aurelio and El Champion, through their wholly-owned corporations; they deposited their revenues from saidbusiness together with other funds with the branches of said banks in the United Kingdom and Hongkong up to 1979;with their business doing well, the defendant banks induced them to increase the number of their ships in operation,offering them easy loans to acquire said vessels; 3 thereafter, the defendant banks acquired, through their(Litonjuas) corporations as the borrowers: (a) El Carrier 4; (b) El General 5; (c) El Challenger 6; and (d) El Conqueror

7; the vessels were registered in the names of their corporations; the operation and the funds derived therefrom wereplaced under the complete and exclusive control and disposition of the petitioners; 8 and the possession of the vesselswas also placed by defendant banks in the hands of persons selected and designated by them (defendant banks). 9

The Litonjuas claimed that defendant banks as trustees did not fully render an account of all the income derived fromthe operation of the vessels as well as of the proceeds of the subsequent foreclosure sale; 10 because of the breach oftheir fiduciary duties and/or negligence of the petitioners and/or the persons designated by them in the operation ofprivate respondents six vessels, the revenues derived from the operation of all the vessels declined drastically; theloans acquired for the purchase of the four additional vessels then matured and remained unpaid, promptingdefendant banks to have all the six vessels, including the two vessels originally owned by the private respondents,foreclosed and sold at public auction to answer for the obligations incurred for and in behalf of the operation of thevessels; they (Litonjuas) lost sizeable amounts of their own personal funds equivalent to ten percent (10%) of theacquisition cost of the four vessels and were left with the unpaid balance of their loans with defendant banks. 11 TheLitonjuas prayed for the accounting of the revenues derived in the operation of the six vessels and of the proceeds of

the sale thereof at the foreclosure proceedings instituted by petitioners; damages for breach of trust; exemplarydamages and attorneys fees. 12

Defendant banks filed a Motion to Dismiss on grounds of forum non conveniens and lack of cause of action againstthem. 13

On December 3, 1993, the trial court issued an Order denying the Motion to Dismiss, thus:jgc:chanrobles.com.ph

"WHEREFORE, and in view of the foregoing consideration, the Motion to Dismiss is hereby DENIED. The defendant istherefore, given a period of ten (10) days to file its Answer to the complaint.

"SO ORDERED." 14

Instead of filing an answer the defendant banks went to the Court of Appeals on a "Petition for Review on Certiorari"

15 which was aptly treated by the appellate court as a petition for certiorari. They assailed the above-quoted order aswell as the subsequent denial of their Motion for Reconsideration. 16 The appellate court dismissed the petition anddenied petitioners Motion for Reconsideration. 17

Hence, herein petition anchored on the following grounds:jgc:chanrobles.com.ph

"1. RESPONDENT COURT OF APPEALS FAILED TO CONSIDER THE FACT THAT THE SEPARATE PERSONALITIES OF THEPRIVATE RESPONDENTS (MERE STOCKHOLDERS) AND THE FOREIGN CORPORATIONS (THE REAL BORROWERS)CLEARLY SUPPORT, BEYOND ANY DOUBT, THE PROPOSITION THAT THE PRIVATE RESPONDENTS HAVE NOPERSONALITIES TO SUE.

"2. THE RESPONDENT COURT OF APPEALS FAILED TO REALIZE THAT WHILE THE PRINCIPLE OF FORUM NONCONVENIENS IS NOT MANDATORY, THERE ARE, HOWEVER, SOME GUIDELINES TO FOLLOW IN DETERMINING


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WHETHER THE CHOICE OF FORUM SHOULD BE DISTURBED. UNDER THE CIRCUMSTANCES SURROUNDING THEINSTANT CASE, DISMISSAL OF THE COMPLAINT ON THE GROUND OF FORUM NON-CONVENIENS IS MOREAPPROPRIATE AND PROPER.

"3. THE PRINCIPLE OF RES JUDICATA IS NOT LIMITED TO FINAL JUDGMENT IN THE PHILIPPINES. IN FACT, THEPENDENCY OF FOREIGN ACTION MAY BE THE LEGAL BASIS FOR THE DISMISSAL OF THE COMPLAINT FILED BY THEPRIVATE RESPONDENT. COROLLARY TO THIS, THE RESPONDENT COURT OF APPEALS FAILED TO CONSIDER THEFACT THAT PRIVATE RESPONDENTS ARE GUILTY OF FORUM SHOPPING." 18

As to the first assigned error: Petitioners argue that the borrowers and the registered owners of the vessels are the

foreign corporations and not private respondents Litonjuas who are mere stockholders; and that the revenues derivedfrom the operations of all the vessels are deposited in the accounts of the corporations. Hence, petitioners maintainthat these foreign corporations are the legal entities that have the personalities to sue and not herein privaterespondents; that private respondents, being mere shareholders, have no claim on the vessels as owners since theymerely have an inchoate right to whatever may remain upon the dissolution of the said foreign corporations and afterall creditors have been fully paid and satisfied; 19 and that while private respondents may have allegedly spentamounts equal to 10% of the acquisition costs of the vessels in question, their 10% however represents theirinvestments as stockholders in the foreign corporations. 20

Anent the second assigned error, petitioners posit that while the application of the principle of forum non conveniensis discretionary on the part of the Court, said discretion is limited by the guidelines pertaining to the private as well aspublic interest factors in determining whether plaintiffs choice of forum should be disturbed, as elucidated in Gulf OilCorp. v. Gilbert 21 and Piper Aircraft Co. v. Reyno, 22 to wit:jgc:chanrobles.com.ph

"Private interest factors include: (a) the relative ease of access to sources of proof; (b) the availability of compulsoryprocess for the attendance of unwilling witnesses; (c) the cost of obtaining attendance of willing witnesses; or (d) allother practical problems that make trial of a case easy, expeditious and inexpensive. Public interest factors include:(a) the administrative difficulties flowing from court congestion; (b) the local interest in having localized controversiesdecided at home; (c) the avoidance of unnecessary problems in conflict of laws or in the application of foreign law; or(d) the unfairness of burdening citizens in an unrelated forum with jury duty." 23

In support of their claim that the local court is not the proper forum, petitioners allege thefollowing:jgc:chanrobles.com.ph

"i) The Bank of America Branches involved, as clearly mentioned in the Complaint, are based in Hongkong andEngland. As such, the evidence and the witnesses are not readily available in the Philippines;

"ii) The loan transactions were obtained, perfected, performed, consummated and partially paid outside the

Philippines;

"iii) The monies were advanced outside the Philippines. Furthermore, the mortgaged vessels were part of an offshorefleet, not based in the Philippines;

"iv) All the loans involved were granted to the Private Respondents foreign CORPORATIONS;

"v) The Restructuring Agreements were ALL governed by the laws of England;

"vi) The subsequent sales of the mortgaged vessels and the application of the sales proceeds occurred and transpiredoutside the Philippines, and the deliveries of the sold mortgaged vessels were likewise made outside the Philippines;

"vii) The revenues of the vessels and the proceeds of the sales of these vessels were ALL deposited to the Accounts ofthe foreign CORPORATIONS abroad; and

"viii) Bank of America International Ltd. is not licensed nor engaged in trade or business in the Philippines." 24

Petitioners argue further that the loan agreements, security documentation and all subsequent restructuringagreements uniformly, unconditionally and expressly provided that they will be governed by the laws of England; 25that Philippine Courts would then have to apply English law in resolving whatever issues may be presented to it in theevent it recognizes and accepts herein case; that it would then be imposing a significant and unnecessary expenseand burden not only upon the parties to the transaction but also to the local court. Petitioners insist that theinconvenience and difficulty of applying English law with respect to a wholly foreign transaction in a case pending inthe Philippines may be avoided by its dismissal on the ground of forum non conveniens. 26

Finally, petitioners claim that private respondents have already waived their alleged causes of action in the case at barfor their refusal to contest the foreign civil cases earlier filed by the petitioners against them in Hongkong and


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England, to wit:jgc:chanrobles.com.ph

"1.) Civil action in England in its High Court of Justice, Queens Bench Division Commercial Court (1992-Folio No.2098) against (a) LIBERIAN TRANSPORT NAVIGATION, SA.; (b) ESHLEY COMPANIA NAVIERA SA., (c) ELCHALLENGER SA; (d) ESPRIONA SHIPPING CO. SA; (e) PACIFIC NAVIGATORS CORP. SA; (f) EDDIE NAVIGATIONCORP. SA; (g) EDUARDO K. LITONJUA & (h) AURELIO K. LITONJUA.

"2.) Civil action in England in its High Court of Justice, Queens Bench Division, Commercial Court (1992-Folio No.2245) against (a) EL CHALLENGER S.A., (b) ESPRIONA SHIPPING COMPANY S.A., (c) EDUARDO KATIPUNANLITONJUA and (d) AURELIO KATIPUNAN LITONJUA.

"3.) Civil action in the Supreme Court of Hongkong High Court (Action No. 4039 of 1992), against (a) ESHLEYCOMPANIA NAVIERA S.A., (b) EL CHALLENGER S.A., (c) ESPRIONA SHIPPING COMPANY S.A., (d) PACIFICNAVIGATORS CORPORATION (e) EDDIE NAVIGATION CORPORATION S.A., (f) LITONJUA CHARTERING (EDYSHIP)CO., INC., (g) AURELIO KATIPUNAN LITONJUA, JR., and (h) EDUARDO KATIPUNAN LITONJUA.

"4.) A civil action in the Supreme Court of Hong Kong High Court (Action No. 4040 of 1992); against (a) ESHLEYCOMPANIA NAVIERA S.A., (b) EL CHALLENGER S.A., (c) ESPRIONA SHIPPING COMPANY S.A., (d) PACIFICNAVIGATORS CORPORATION (e) EDDIE NAVIGATION CORPORATION S.A., (f) LITONJUA CHARTERING (EDYSHIP)CO., INC., (g) AURELIO KATIPUNAN LITONJUA, JR., and (h) EDUARDO KATIPUNAN LITONJUA."cralaw virtua1awlibrary

and that private respondents alleged cause of action is already barred by the pendency of another action or by litispendentia as shown above. 27

On the other hand, private respondents contend that certain material facts and pleadings are omitted and/ormisrepresented in the present petition for certiorari; that the prefatory statement failed to state that part of thesecurity of the foreign loans were mortgages on a 39-hectare piece of real estate located in the Philippines; 28 thatwhile the complaint was filed only by the stockholders of the corporate borrowers, the latter are wholly-owned by theprivate respondents who are Filipinos and therefore under Philippine laws, aside from the said corporate borrowersbeing but their alter-egos, they have interests of their own in the vessels. 29 Private respondents also argue that thedismissal by the Court of Appeals of the petition for certiorariwas justified because there was neither allegation norany showing whatsoever by the petitioners that they had no appeal, nor any plain, speedy, and adequate remedy inthe ordinary course of law from the Order of the trial judge denying their Motion to Dismiss; that the remedy availableto the petitioners after their Motion to Dismiss was denied was to file an Answer to the complaint; 30 that as upheldby the Court of Appeals, the decision of the trial court in not applying the principle of forum non conveniens is in thelawful exercise of its discretion. 31 Finally, private respondents aver that the statement of petitioners that the doctrineof res judicata also applies to foreign judgment is merely an opinion advanced by them and not based on a categorical

ruling of this Court; 32 and that herein private respondents did not actually participate in the proceedings in theforeign courts. 33

We deny the petition for lack of merit.

It is a well-settled rule that the order denying the motion to dismiss cannot be the subject of petition for certiorari.Petitioners should have filed an answer to the complaint, proceed to trial and await judgment before making anappeal. As repeatedly held by this Court:jgc:chanrobles.com.ph

"An order denying a motion to dismiss is interlocutory and cannot be the subject of the extraordinary petition forcertiorarior mandamus. The remedy of the aggrieved party is to file an answer and to interpose as defenses theobjections raised in his motion to dismiss, proceed to trial, and in case of an adverse decision, to elevate the entirecase by appeal in due course. . . . Under certain situations, recourse to certiorarior mandamus is consideredappropriate, i.e., (a) when the trial court issued the order without or in excess of jurisdiction; (b) where there is

patent grave abuse of discretion by the trial court; or (c) appeal would not prove to be a speedy and adequateremedy as when an appeal would not promptly relieve a defendant from the injurious effects of the patently mistakenorder maintaining the plaintiffs baseless action and compelling the defendant needlessly to go through a protractedtrial and clogging the court dockets by another futile case." 34

Records show that the trial court acted within its jurisdiction when it issued the assailed Order denying petitionersmotion to dismiss. Does the denial of the motion to dismiss constitute a patent grave abuse of discretion? Wouldappeal, under the circumstances, not prove to be a speedy and adequate remedy? We will resolve said questions inconjunction with the issues raised by the parties.

First issue. Did the trial court commit grave abuse of discretion in refusing to dismiss the complaint on the ground thatplaintiffs have no cause of action against defendants since plaintiffs are merely stockholders of the corporations whichare the registered owners of the vessels and the borrowers of petitioners?


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No. Petitioners argument that private respondents, being mere stockholders of the foreign corporations, have nopersonalities to sue, and therefore, the complaint should be dismissed, is untenable. A case is dismissible for lack ofpersonality to sue upon proof that the plaintiff is not the real party-in-interest. Lack of personality to sue can be usedas a ground for a Motion to Dismiss based on the fact that the complaint, on the face thereof, evidently states nocause of action. 35 In San Lorenzo Village Association, Inc. v. Court of Appeals, 36 this Court clarified that a complaintstates a cause of action where it contains three essential elements of a cause of action, namely: (1) the legal right ofthe plaintiff, (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation ofsaid legal right. If these elements are absent, the complaint becomes vulnerable to a motion to dismiss on the groundof failure to state a cause of action. 37 To emphasize, it is not the lack or absence of cause of action that is a ground

for dismissal of the complaint but rather the fact that the complaint states no cause of action. 38 "Failure to state acause of action" refers to the insufficiency of allegation in the pleading, unlike "lack of cause of action" which refers tothe insufficiency of factual basis for the action. "Failure to state a cause of action" may be raised at the earliest stagesof an action through a motion to dismiss the complaint, while "lack of cause of action" may be raised any time afterthe questions of fact have been resolved on the basis of stipulations, admissions or evidence presented. 39

In the case at bar, the complaint contains the three elements of a cause of action. It alleges that: (1) plaintiffs, hereinprivate respondents, have the right to demand for an accounting from defendants (herein petitioners), as trustees byreason of the fiduciary relationship that was created between the parties involving the vessels in question; (2)petitioners have the obligation, as trustees, to render such an accounting; and (3) petitioners failed to do thesame.chanrob1es virtua1 1aw 1ibrary

Petitioners insist that they do not have any obligation to the private respondents as they are mere stockholders of thecorporation; that the corporate entities have juridical personalities separate and distinct from those of the private

respondents. Private respondents maintain that the corporations are wholly owned by them and prior to theincorporation of such entities, they were clients of petitioners which induced them to acquire loans from saidpetitioners to invest on the additional ships.

We agree with private respondents. As held in the San Lorenzo case, 40

". . . assuming that the allegation of facts constituting plaintiffs cause of action is not as clear and categorical aswould otherwise be desired, any uncertainty thereby arising should be so resolved as to enable a full inquiry into themerits of the action."cralaw virtua1aw library

As this Court has explained in the San Lorenzo case, such a course, would preclude multiplicity of suits which the lawabhors, and conduce to the definitive determination and termination of the dispute. To do otherwise, that is, to abortthe action on account of the alleged fatal flaws of the complaint would obviously be indecisive and would not end thecontroversy, since the institution of another action upon a revised complaint would not be foreclosed. 41

Second Issue. Should the complaint be dismissed on the ground of forum non-conveniens?

No. The doctrine of forum non-conveniens, literally meaning the forum is inconvenient, emerged in privateinternational law to deter the practice of global forum shopping, 42 that is to prevent non-resident litigants fromchoosing the forum or place wherein to bring their suit for malicious reasons, such as to secure proceduraladvantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue.Under this doctrine, a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not themost "convenient" or available forum and the parties are not precluded from seeking remedies elsewhere. 43

Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of theparticular case and is addressed to the sound discretion of the trial court. 44 In the case of Communication Materialsand Design, Inc. v. Court of Appeals, 45 this Court held that." . . [a] Philippine Court may assume jurisdiction over thecase if it chooses to do so; provided, that the following requisites are met: (1) that the Philippine Court is one to

which the parties may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligentdecision as to the law and the facts; and, (3) that the Philippine Court has or is likely to have power to enforce itsdecision." 46 Evidently, all these requisites are present in the instant case.

Moreover, this Court enunciated in Philsec. Investment Corporation v. Court of Appeals, 47 that the doctrine of forumnon conveniens should not be used as a ground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Courtdoes not include said doctrine as a ground. This Court further ruled that while it is within the discretion of the trialcourt to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, todetermine whether special circumstances require the courts desistance; and that the propriety of dismissing a casebased on this principle of forum non conveniens requires a factual determination, hence it is more properly considereda matter of defense. 48

Third issue. Are private respondents guilty of forum shopping because of the pendency of foreign action? chanrob1es


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virtua1 1aw 1ibrary

No. Forum shopping exists where the elements of litis pendentia are present and where a final judgment in one casewill amount to res judicata in the other. 49 Parenthetically, for litis pendentia to be a ground for the dismissal of anaction there must be: (a) identity of the parties or at least such as to represent the same interest in both actions; (b)identity of rights asserted and relief prayed for, the relief being founded on the same acts; and (c) the identity in thetwo cases should be such that the judgment which may be rendered in one would, regardless of which party issuccessful, amount to res judicata in the other. 50

In case at bar, not all the requirements for litis pendentia are present. While there may be identity of parties,

notwithstanding the presence of other respondents, 51 as well as the reversal in positions of plaintiffs and defendants52 , still the other requirements necessary for litis pendentia were not shown by petitioner. It merely mentioned thatcivil cases were filed in Hongkong and England without however showing the identity of rights asserted and the reliefssought for as well as the presence of the elements of res judicata should one of the cases be adjudged.

As the Court of Appeals aptly observed:chanrob1es virtual 1aw library

. . . [T]he petitioners, by simply enumerating the civil actions instituted abroad involving the parties herein . . ., failedto provide this Court with relevant and clear specifications that would show the presence of the above-quotedelements or requisites for res judicata. While it is true that the petitioners in their motion for reconsideration (CARollo, p. 72), after enumerating the various civil actions instituted abroad, did aver that "Copies of the foreign

judgments are hereto attached and made integral parts hereof as Annexes B, C, D and E", they failed, wittinglyor inadvertently, to include a single foreign judgment in their pleadings submitted to this Court as annexes to theirpetition. How then could We have been expected to rule on this issue even if We were to hold that foreign judgments

could be the basis for the application of the aforementioned principle of res judicata? 53

Consequently, both courts correctly denied the dismissal of herein subject complaint.

WHEREFORE, the petition is DENIED for lack of merit.

Costs against petitioners.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.


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[G.R. No. 120077. October 13, 2000.]

THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD., Petitioners, v. NATIONAL LABOR RELATIONSCOMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO G. SANTOS, Respondents.

D E C I S I O N

PARDO,J.

The case before the Court is a petition for certiorari1 to annul the following orders of the National Labor RelationsCommission (hereinafter referred to as "NLRC") for having been issued without or with excess jurisdiction and withgrave abuse of discretion: 2

(1) Order of May 31, 1993. 3 Reversing and setting aside its earlier resolution of August 28, 1992. 4 The questionedorder declared that the NLRC, not the Philippine Overseas Employment Administration (hereinafter referred to as"POEA"), had jurisdiction over private respondents complaint;

(2) Decision of December 15, 1994. 5 Directing petitioners to jointly and severally pay private respondent twelvethousand and six hundred dollars (US$ 12,600.00) representing salaries for the unexpired portion of his contract;three thousand six hundred dollars (US$3,600.00) as extra four months salary for the two (2) year period of hiscontract, three thousand six hundred dollars (US$3,600.00) as "14th month pay" or a total of nineteen thousand andeight hundred dollars (US$19,800.00) or its peso equivalent and attorneys fees amounting to ten percent (10%) of

the total award; and

(3) Order of March 30, 1995. 6 Denying the motion for reconsideration of the petitioners.chanrob1es virtua1 1aw1ibrary

In May, 1988, private respondent Marcelo Santos (hereinafter referred to as "Santos") was an overseas workeremployed as a printer at the Mazoon Printing Press, Sultanate of Oman. Subsequently, in June 1988, he was directlyhired by the Palace Hotel, Beijing, Peoples Republic of China and later terminated due to retrenchment.

Petitioners are the Manila Hotel Corporation (hereinafter referred to as "MHC") and the Manila Hotel InternationalCompany, Limited (hereinafter referred to as "MHICL").

When the case was filed in 1990, MHC was still a government-owned and controlled corporation duly organized andexisting under the laws of the Philippines.

MHICL is a corporation duly organized and existing under the laws of Hong Kong. 7 MHC is an "incorporator" ofMHICL, owning 50% of its capital stock. 8

By virtue of a "management agreement" 9 with the Palace Hotel (Wang Fu Company Limited), MHICL 10 trained thepersonnel and staff of the Palace Hotel at Beijing, China.

Now the facts.

During his employment with the Mazoon Printing Press in the Sultanate of Oman, respondent Santos received a letterdated May 2, 1988 from Mr. Gerhard R. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr. Schmidt informedrespondent 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. 11

On May 8, 1988, respondent Santos wrote to Mr. Shmidt and signified his acceptance of the offer.

On May 19, 1988, the Palace Hotel Manager, Mr. Hans J. Henk mailed a ready to sign employment contract torespondent Santos. Mr. Henk advised respondent Santos that if the contract was acceptable, to return the same to Mr.Henk in Manila, together with his passport and two additional pictures for his visa to China.chanrob1es virtua1 1aw1ibrary

On May 30, 1988, respondent Santos resigned from the Mazoon Printing Press, effective June 30, 1988, under thepretext that he was needed at home to help with the familys piggery and poultry business.

On June 4, 1988, respondent Santos wrote the Palace Hotel and acknowledged Mr. Henks letter. Respondent Santos


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enclosed four (4) signed copies of the employment contract (dated June 4, 1988) and notified them that he was goingto arrive in Manila during the first week of July 1988.

The employment contract of June 4, 1988 stated that his employment would commence September 1, 1988 for aperiod of two years. 12 It provided for a monthly salary of nine hundred dollars (US$900.00) net of taxes, payablefourteen (14) times a year. 13

On June 30, 1988, respondent Santos was deemed resigned from the Mazoon Printing Press.

On July 1, 1988, respondent Santos arrived in Manila.

On November 5, 1988, respondent Santos left for Beijing, China. He started to work at the Palace Hotel. 14

Subsequently, respondent Santos signed an amended "employment agreement" with the Palace Hotel, effectiveNovember 5, 1988. In the contract, Mr. Shmidt represented the Palace Hotel. The Vice President (Operations andDevelopment) of petitioner MHICL Miguel D. Cergueda signed the employment agreement under the word "noted" .

From June 8 to 29, 1989, respondent Santos was in the Philippines on vacation leave. He returned to China andreassumed his post on July 17, 1989.chanrob1es virtua1 1aw 1ibrary

On July 22, 1989, Mr. Shmidts Executive Secretary, a certain Joanna suggested in a handwritten note thatrespondent Santos be given one (1) month notice of his release from employment.

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 thepolitical upheaval in China. 15 We quote the letter: 16

"After the unfortunate happenings in China and especially Beijing (referring to Tiannamen Square incidents), ourbusiness has been severely affected. To reduce expenses, we will not open/operate printshop for the time being.

"We sincerely regret that a decision like this has to be made, but rest assured this does in no way reflect your pastperformance which we found up to our expectations."cralaw virtua1aw library

"Should a turnaround in the business happen, we will contact you directly and give you priority on futureassignment."cralaw virtua1aw library

On September 5, 1989, the Palace Hotel terminated the employment of respondent Santos and paid all benefits duehim, including his plane fare back to the Philippines.

On October 3, 1989, respondent Santos was repatriated to the Philippines.

On October 24, 1989, respondent Santos, through his lawyer, Atty. Ednave wrote Mr. Shmidt, demanding fullcompensation pursuant to the employment agreement.

On November 11, 1989, Mr. Shmidt replied, to wit: 17

His service with the Palace Hotel, Beijing was not abruptly terminated but we followed the one-month notice clauseand Mr. Santos received all benefits due him.

"For your information the Print Shop at the Palace Hotel is still not operational and with a low business outlook,retrenchment in various departments of the hotel is going on which is a normal management practice to control costs.

"When going through the latest performance ratings, please also be advised that his performance was below averageand a Chinese National who is doing his job now shows a better approach.

"In closing, when Mr. Santos received the letter of notice, he hardly showed up for work but still enjoyed freeaccommodation/laundry/meals up to the day of his departure."cralaw virtua1aw library

On February 20, 1990, respondent Santos filed a complaint for illegal dismissal with the Arbitration Branch, NationalCapital Region, National Labor Relations Commission (NLRC). He prayed for an award of nineteen thousand ninehundred and twenty three dollars (US$19,923.00) as actual damages, forty thousand pesos (P40,000.00) asexemplary damages and attorneys fees equivalent to 20% of the damages prayed for. The complaint named MHC,MHICL, the Palace Hotel and Mr. Shmidt as respondents.chanrob1es virtua1 1aw 1ibrary

The Palace Hotel and Mr. Shmidt were not served with summons and neither participated in the proceedings before


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the Labor Arbiter. 18

On June 27, 1991, Labor Arbiter Ceferina J. Diosana, decided the case against petitioners, thus: 19

"WHEREFORE, judgment is hereby rendered:jgc:chanrobles.com.ph

"1. directing all the respondents to pay complainant jointly and severally;

"a) $20,820 US dollars or its equivalent in Philippine currency as unearned salaries;

"b) P50,000.00 as moral damages;

"c) P40,000.00 as exemplary damages; and

"d) Ten (10) percent of the total award as attorneys fees.

"SO ORDERED."cralaw virtua1aw library

On July 23, 1991, petitioners appealed to the NLRC, arguing that the POEA, not the NLRC had jurisdiction over thecase.

On August 28, 1992, the NLRC promulgated a resolution, stating: 20

"WHEREFORE, let the appealed Decision be, as it is hereby, declared null and void for want of jurisdictio

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