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5. Torts and Crimes
b. Modern Theories on Foreign Tort Liability
SAUDI ARABIAN AIRLINES vs CA 1998 | Quisumbing Petitioners:
Saudi Arabian Airline Respondents: Court of Appeals, Milagros P.
Morada and Hon. Rodolfo Ortiz, in his capacity as Presiding Judge
of Branch 89 of RTC of Quezon City SUMMARY: Respondent Morado sued
petitioner for damages, when the latter subjected her to
humiliating and degrading treatment by allowing her to be
prosecuted for a case when she herself was really the victim. The
Court ruled that the Philippine has jurisdiction and its law should
be applied, since it is the state with the most significant
relationship in the case at hand. FACTS:
1. Petitioner SAUDIA (Saudi Arabian Airlines) hired respondent
Morada as a flight attendant for its airlines based in Jeddah,
Saudi Arabia.
2. A fellow crew member, Al-Gazzawi attempted to rape respondent
while they were on a lay-over in Jakarta, Indonesia.
a. The Indonesian police arrested this crew member who was a
Saudi National.
3. When she returned to Jeddah, SAUDIA officers requested her to
return to Indonesia too negotiate Al-Gazzawis release. When she
returned there, she did not cooperate because she was afraid to
sign a blank piece of paper and a document written in the local
dialect because she did not understand it.
4. Plaintiff learned that the crew member who attempted to rape
her was relased quickly through the intercession of Saudi
authorities.
a. Just when plaintiff thought that the Jakarta incident was
already behind her, her superiors requested her to see Mr. Ali
Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia.
When she saw him, he brought her to the police station where the
police took her passport and questioned her about the Jakarta
incident. Miniewy simply stood by as the police put pressure on her
to make a statement dropping the case against Thamer and Allah. Not
until she agreed to do so did the police return her passport and
allowed her to catch the afternoon flight out of Jeddah.
5. Shortly afterwards, defendant SAUDIA summoned plaintiff to
report to Jeddah once again and see Miniewy on June 27, 1993 for
further investigation.
6. On July 3, 1993 a SAUDIA legal officer again escorted
plaintiff to the same court where the judge, to her astonishment
and shock, rendered a decision, translated to her in English,
sentencing her to five months imprisonment and to 286 lashes.
a. Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta.
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b. The court found plaintiff guilty of (1) adultery; (2) going
to a disco, dancing and listening to the music in violation of
Islamic laws; and (3) socializing with the male crew, in
contravention of Islamic tradition.
7. Because she was wrongfully convicted, the Prince of Makkah
dismissed the case against her and allowed her to leave Saudi
Arabia. Shortly before her return to Manila, she was terminated
from the service by SAUDIA, without her being informed of the
cause.
8. On November 23, 1993, Morada filed a Complaint for damages
against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country
manager.
ISSUES:
1.) Whether Philippines has jurisdiction? Yes. 2.) Whether
Philippine law on torts should apply? Yes.
HELD: Petition for Certiorari is dismissed. Case is remanded
back to RTC for further proceedings. 1.) The choice of forum of the
plaintiff (now private respondent) should be upheld.
Weighing the relative claims of the parties, the court a quo
found it best to hear the case in the Philippines. Had it refused
to take cognizance of the case, it would be forcing plaintiff
(private respondent now) to seek remedial action elsewhere, i.e. in
the Kingdom of Saudi Arabia where she no longer maintains
substantial connections.
Undeniably, petitioner SAUDIA has effectively submitted to the
trial court's jurisdiction by praying for the dismissal of the
Amended Complaint on grounds other than lack of jurisdiction.
o The records show that petitioner SAUDIA has filed several
motions 50 praying for the dismissal of Morada's Amended
Complaint.
o SAUDIA also filed an Answer In Ex Abundante Cautelam dated
February 20, 1995. What is very patent and explicit from the
motions filed, is that SAUDIA prayed for other reliefs under the
premises.
2.) Prescinding from this premise that the Philippines is the
situs of the tort complained of and the place "having the most
interest in the problem", we find, by way of recapitulation, that
the Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues
arising out of this case.
As to the choice of applicable law, we note that choice-of-law
problems seek to answer two important questions: (1) What legal
system should control a given situation where some of the
significant facts occurred in two or more states; and (2) to what
extent should the chosen legal system regulate the situation.
Our starting point of analysis here is not a legal relation, but
a factual situation, event, or operative fact. Note that one or
more circumstances may be present to serve as the possible test for
the determination of the applicable law. These "test factors" or
"points of contact" or "connecting factors" could be:
o the place where an act has been done, the locus actus, such as
the place where a contract has been made, a marriage celebrated, a
will signed or a tort committed. The lex loci actus is particularly
important in contracts and torts;
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Considering that the complaint in the court a quo is one
involving torts, the "connecting factor" or "point of contact"
could be the place or places where the tortious conduct or lex loci
actus occurred.
And applying the torts principle in a conflicts case, we find
that the Philippines could be said as a situs of the tort (the
place where the alleged tortious conduct took place).
o This is because it is in the Philippines where petitioner
allegedly deceived private respondent, a Filipina residing and
working here.
o For in our view what is important here is the place where the
over-all harm or the totality of the alleged injury to the person,
reputation, social standing and human rights of complainant, had
lodged, according to the plaintiff below (herein private
respondent). All told, it is not without basis to identify the
Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule
of lex loci delicti commissi, modern theories and rules on tort
liability have been advanced to offer fresh judicial approaches to
arrive at just results. In keeping abreast with the modern theories
on tort liability, we find here an occasion to apply the "State of
the most significant relationship" rule, which in our view should
be appropriate to apply now, given the factual context of this
case.
In applying said principle to determine the State which has the
most significant relationship, the following contacts are to be
taken into account and evaluated according to their relative
importance with respect to the particular issue: (a) the place
where the injury occurred; (b) the place where the conduct causing
the injury occurred; (c) the domicile, residence, nationality,
place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties
is centered.
As already discussed, there is basis for the claim that over-all
injury occurred and lodged in the Philippines. There is likewise no
question that private respondent is a resident Filipina national,
working with petitioner, a resident foreign corporation engaged
here in the business of international air carriage. Thus, the
"relationship" between the parties was centered here, although it
should be stressed that this suit is not based on mere labor law
violations. From the record, the claim that the Philippines has the
most significant contact with the matter in this dispute, raised by
private respondent as plaintiff below against defendant (herein
petitioner), in our view, has been properly established.
BABCOCK vs JACKSON 12 NY2d 473 | May 9, 1963 | FULD, J. (Court
of Appeals of New York)| Digester: JM Arcilla Appellant: Georgia W.
Babcock Respondents: Mabel B. Jackson, as Executrix of William H.
Jackson, Deceased
SUMMARY:
Husband and wife Jackson from New York went on a car trip with a
friend Babcock to Ontario. While in Ontario they had a motor
vehicle accident. Babcock sued Jackson, the
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driver, claiming his negligence caused the car crash. This case
brought up a question of choice of law; if the law of the place of
residence of the accident victims (New York) be applied, or, should
the law of the place of the tort (Ontario) be applied. Under the
old conflict rules, the law of the place of the accident should
apply. However, Ontario had a law that prohibited passengers from
suing the driver.
The court rejected a traditional fixed method of determining
which law should apply, and instead, a process of weighing factors
such as relationship between the party, the decision to take the
trip, and connections to the locality. Thus, the Court held that
the parties did not have substantial connection with Ontario and so
it would be unfair to apply the law as the location was largely
fortuitous. The Court found that the jurisdiction with the most
connections was New York and so New York law should apply.
DOCTRINE:
In the most recent revision of the Conflict of Laws Restatement
in the field of torts, "The local law of the state which has the
most significant relationship with the occurrence and with the
parties determines their rights and liabilities in tort", and the
relative importance of the relationships or contacts of the
respective jurisdictions is to be evaluated in the light of "the
issues, the character of the tort and the relevant purposes of the
tort rules involved".
FACTS:
On September 16, 1960, Miss Georgia Babcock and Mr. and Mrs.
William Jackson, all residents of Rochester, left that city in Mr.
Jackson's automobile for a week-end trip to Canada. As Mr. Jackson
was driving in the Province of Ontario, he lost control of the car
and Miss Babcock was seriously injured when the car hit a stone
wall. She brought in New York an action against William Jackson,
alleging negligence on his part in operating his automobile.
At the time of the accident, there was in force in Ontario a
statute providing that "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 xxx the motor vehicle".
The defendant moved to dismiss the complaint on the ground that
the law of the place where the accident occurred governs and that
Ontario's guest statute bars recovery.
ISSUE: Which law should govern, Ontario or New York?
HELD: New York.
RATIO:
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. As applied to
torts, the theory ignores the interest
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which jurisdictions other than that where the tort occurred may
have in the resolution of particular issues.
In Auten v. Auten, the court applied what has been termed the
"center of gravity" or "grouping of contacts" theory of the
conflict of laws. "Under this theory," we declared in the Auten
case, "the courts, instead of regarding as conclusive the parties'
intention or the place of making or performance, lay emphasis
rather upon the law of the place 'which has the most significant
contacts with the matter in dispute'.
In Kilberg v. Northeast Airlines, this court declined to apply
the law of the place of the tort as respects the issue of the
quantum of the recovery in a death action arising out of an
airplane crash, where the decedent had been a New York resident and
his relationship with the defendant airline had originated in this
State.
The emphasis in Kilberg was plainly that the merely fortuitous
circumstance that the wrong and injury occurred in Massachusetts
did not give that State a controlling concern or interest in the
amount of the tort recovery as against the competing interest of
New York in providing its residents or users of transportation
facilities there originating with full compensation for wrongful
death. Although the Kilberg case did not expressly adopt the
"center of gravity" theory, its weighing of the contacts or
interests of the respective jurisdictions to determine their
bearing on the issue of the extent of the recovery is consistent
with that approach.
Other similar cases rejected the inexorable application of the
law of the place of the tort where that place has no reasonable or
relevant interest in the particular issue involved. And in each of
these cases the courts, after examining the particular
circumstances presented, applied the law of some jurisdiction other
than the place of the tort because it had a more compelling
interest in the application of its law to the legal issue
involved.
The "center of gravity" or "grouping of contacts" doctrine
adopted by this court in conflicts cases involving contracts
impresses us as likewise affording the appropriate approach for
accommodating the competing interests in tort cases with
multi-State contacts. Justice, fairness and "the best practical
result" may best be achieved by giving controlling effect to the
law of the jurisdiction which, because of its relationship or
contact with the occurrence or the parties, has the greatest
concern with the specific issue raised in the litigation. The merit
of such a rule is that "it gives to the place 'having the most
interest in the problem' paramount control over the legal issues
arising out of a particular factual context" and thereby allows the
forum to apply "the policy of the jurisdiction 'most intimately
concerned with the outcome of [the] particular litigation.' "
In the most recent revision of the Conflict of Laws Restatement
in the field of torts, "The local law of the state which has the
most significant relationship with the occurrence and with the
parties determines their rights and liabilities in tort", and the
relative importance of the relationships or contacts of the
respective jurisdictions is to be evaluated in the light of "the
issues, the character of the tort and the relevant purposes of the
tort rules involved".
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Comparison of the relative "contacts" and "interests" of New
York and Ontario in this litigation, vis-a-vis the issue here
presented, makes it clear that the concern of New York is
unquestionably the greater and more direct and that the interest of
Ontario is at best minimal. The present 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, garaged, licensed
and undoubtedly insured in New York, in the course of a week-end
journey which began and was to end there. In sharp contrast,
Ontario's sole relationship with the occurrence is the purely
adventitious circumstance that the accident occurred there.
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" and, quite
obviously, the fraudulent claims intended to be prevented by the
statute are those asserted against Ontario defendants and their
insurance carriers, not New York defendants and their insurance
carriers.
The issue here, however, is not whether the defendant offended
against a rule of the road prescribed by Ontario for motorists
generally or whether he violated some standard of conduct imposed
by that jurisdiction, but rather whether the plaintiff, because she
was a guest in the defendant's automobile, is barred from
recovering damages for a wrong concededly committed. 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.
VAN VOORHIS, J. (dissent)
Auten v. Auten dealt with contracts, the agreement was held to
be governed by the law of the country where it was mainly to be
performed, which had previously been the law, and the salient
expressions "center of gravity", "grouping of contacts", and
similar catchwords were employed as a shorthand reference to the
reconciliation of such rigid concepts in the conflict of laws as
the formulae making applicable the place where the contract was
signed or where it was to be performed rules which themselves were
occasionally in conflict with one another. In the course of the
opinion it was stated that "even if we were not to place our
emphasis on the law of the place with the most significant
contacts, but were instead simply to apply the rule that matters of
performance and breach are governed by the law of the place of
performance, the same result would follow". The decision in Auten
v. Auten rationalized and rendered more workable the existing law
of contracts. The name "grouping of contacts" was simply a label to
identify the rationalization of existing decisions on the conflict
of laws in contract cases which were technically inconsistent, in
some instances. The difference between the present case and Auten
v. Auten is that Auten did not materially change the law, but
sought to formulate what had previously been decided. The present
case makes substantial changes in the law of torts. The expressions
"center of gravity", "grouping of contacts," and "significant
contacts" are catchwords which were not employed to define and are
inadequate to define a principle of law, and were neither applied
to nor are they applicable in the realm of torts.
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Attempts to make the law or public policy of New York State
prevail over the laws and policies of other States where citizens
of New York State are concerned are simply a form of
extraterritoriality which can be turned against us wherever actions
are brought in the courts of New York which involve citizens of
other States. Importing the principles of extraterritoriality into
the conflicts of laws between the States of the United States can
only make confusion worse confounded. If extraterritoriality is to
be the criterion, what would happen, for example, in case of an
automobile accident where some of the passengers came from or were
picked up in States or countries where causes of action against the
driver were prohibited, others where gross negligence needed to be
shown, some, perhaps, from States where contributory negligence and
others where comparative negligence prevailed?
c. Foreign Tort Claims
ASAHI METAL INDUSTRY vs SUPERIOR COURT OF CALI 480 U.S. 102
(1987)
FACTS: Petitioner manufactures tire valve assemblies in Japan
and sells them to several tire manufacturers, including Cheng Shin
Rubber Industrial Co. (Cheng Shin). The sales to Cheng Shin, which
amounted to at least 100,000 assemblies annually from 1978 to 1982,
took place in Taiwan, to which the assemblies were shipped from
Japan. Cheng Shin incorporates the assemblies into its finished
tires, which it sells throughout the world, including the United
States, where 20 percent of its sales take place in California.
Affidavits indicated that petitioner was aware that tires
incorporating its assemblies would end up in California, but, on
the other hand, that it never contemplated that its sales to Cheng
Shin in Taiwan would subject it to lawsuits in California.
Nevertheless, in 1979, a product liability suit was brought in
California Superior Court arising from a motorcycle accident
allegedly caused by defects in a tire manufactured by Cheng Shin,
which in turn filed a cross-complaint seeking indemnification from
petitioner. Although the main suit was eventually settled and
dismissed, the Superior Court denied petitioner's motion to quash
the summons issued against it. The State Court of Appeal then
ordered that the summons be quashed, but the State Supreme Court
reversed, finding that petitioner's intentional act of placing its
assemblies into the stream of commerce by delivering them to Cheng
Shin in Taiwan, coupled with its awareness that some of them would
eventually reach California, were sufficient to support state court
jurisdiction under the Due Process Clause.
ISSUE: Whether the mere awareness on the part of a foreign
defendant that the components it manufactured, sold, and delivered
outside the United States would reach the forum
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State in the stream of commerce constitutes "minimum contacts"
between the defendant and the forum State such that the exercise of
jurisdiction "does not offend traditional notions of fair play and
substantial justice. HELD:
The state court's exercise of personal jurisdiction over
petitioner would be unreasonable and unfair, in violation of the
Due Process Clause.
The lower court is reversed, case remanded.
DISCUSSION: (a) The burden imposed on petitioner by the exercise
of state court jurisdiction would be severe, since petitioner would
be required not only to traverse the distance between Japan and
California, but also to submit its dispute with Cheng Shin to a
foreign judicial system. Such unique burdens should have
significant weight in assessing the reasonableness of extending
personal jurisdiction over national borders.
(b) The interests of Cheng Shin and the forum State in the
exercise of jurisdiction over petitioner would be slight, and would
be insufficient to justify the heavy burdens placed on petitioner.
The only surviving question is whether a Japanese corporation
should indemnify a Taiwanese corporation on the bases of a sale
made in Taiwan and a shipment of goods from Japan to Taiwan. The
facts do not demonstrate that it would be more convenient for Cheng
Shin to litigate its claim in California, rather than in Taiwan or
Japan, while California's interests are diminished by Cheng Shin's
lack of a California residence and by the fact that the dispute is
primarily about indemnity, rather than the safety of consumers.
While the possibility of being sued in California might create an
additional deterrent to petitioner's manufacture of unsafe
assemblies, the same effect would result from pressures placed on
petitioner by Cheng Shin, whose California sales would subject it
to state tort law.
(c) The procedural and substantive policies of other nations
whose interests are affected by the forum State's assertion of
jurisdiction over an alien defendant must be taken into account,
and great care must be exercised when considering personal
jurisdiction in the international context. Although other nations'
interests will differ from case to case, those interests, as well
as the Federal Government's interest in its foreign relations
policies, will always be best served by a careful inquiry into the
reasonableness of the particular assertion of jurisdiction, and an
unwillingness to find an alien defendant's serious burdens
outweighed where, as here, the interests of the plaintiff and the
forum State are minimal.
Even assuming, arguendo, that petitioner was aware that some of
the assemblies it sold to Cheng Shin would be incorporated into
tires sold in California, the facts do not establish minimum
contacts sufficient to render the State's exercise of personal
jurisdiction consistent with fair play and substantial justice, as
required by the Due Process Clause. Since petitioner does not do
business, have an office, agents, employees, or property, or
advertise or solicit business in California, and since it did not
create, control, or employ the distribution system that brought its
assemblies to, or design them in anticipation of sales in,
California, it did not engage in any action to
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purposely avail itself of the California market. The
"substantial connection" between a defendant and the forum State
necessary for a finding of minimum contacts must derive from an
action purposely directed toward the forum State, and the mere
placement of a product into the stream of commerce is not such an
act, even if done with an awareness that the stream will sweep the
product into the forum State absent additional conduct indicating
an intent to serve the forum state market.
6. Corporations and other Juridical Entities
a. Corporations
i. Personal Law of a Corporation
M.E. GRAY vs INSULAR LUMBER COMPANY G.R. No. L-45144 | April 3,
1939. | Concepcion, J. Petitioner(s): M.E. Gray
(Plaintiff-Appellant). Respondent(s): Insular Lumber Company
(Defendant-Appellee). SUMMARY: Defendant Insular Lumber Company
(Insular) was and is a corporation organized and existing under the
laws of the State of New York, licensed to engage in business in
the Philippines, with offices in the City of Manila, in Fabrica,
Occidental Negros, in New York and in Philadelphia. M.E. Gray
contends that, in accordance with our Corporation Law, under which
Insular company was registered to do business in the Philippines,
plaintiff M.E. Gray, as stockholder, is entitled to inspect the
record of the transactions of Insular corporation (Sec. 51, Act No.
1459) and this right, which is recognized in the common law, has
not been altered by Section 77 of the Stock Corporation Law of New
York and can be enforced by mandamus. The lower court denied the
mandamus against Insular Lumber Company. The SC affirmed this. It
held that plaintiff M.E. Gray did not ask to have the stipulation
of facts altered or changed. Thus, he cannot now, for the first
time on appeal, raise the question that aside from the right
conferred upon him by Section 77 of the Stock Corporation Law of
New York, he is also entitled under the common law to examine and
inspect the books and records of the defendant corporation. Neither
can this right under the common law be granted the defendant in the
present case, since the same can only be granted at the discretion
of the court. The appellant has made no effort to prove or even
allege that the information he desired to obtain through the
examination and inspection of defendant's books was necessary to
protect his interests as stockholder of the corporation, or that it
was for a specific and honest purpose, and not to gratify
curiosity, nor for speculative or vexatious purposes. FACTS: 1. The
defendant Insular Lumber Company (Insular) was and is a
corporation:
organized and existing under the laws of the State of New York,
licensed to engage in business in the Philippines,
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with offices in the City of Manila, in Fabrica, Occidental
Negros, in New York and in Philadelphia.
2. The plaintiff M.E. Gray was and is the owner and possessor of
57 shares of the capital stock of the defendant corporation,
registered in his name in the books thereof.
3. The parties stipulated to the following facts: That M.E. Gray
does not own 3% of the total capital stock of the corporation,
nor
does he represent stockholders who own 3% of its capital; That
during the years 1932 and 1933, M.E. Gray asked the offices of
the
defendant in Manila and in Fabrica to permit him to examine the
books and records of the business of Insular, but he was not
allowed to do so;
That under the law of New York, the right of a stockholder to
examine the books and records of a corporation organized under the
laws of that State, have been, during the entire period material to
this action, only those provided in Section 77 of the Stock
Corporation Law.1
That neither M.E. Gray nor any other stockholder of Insular
corporation has asked its treasurer or any of its officers for a
statement of its affairs, as provided in the statutes of New York;
and
Neither did M.E. Gray ask to be allowed to examine any of the
statements prepared by Insular and existing in its files, as
provided by the statutes of New York.
4. In accordance with Section 77 of the Stock Corporation Law of
New York, which is conceded to be the law that governs the right of
a stockholder to examine the books and papers of a corporation, it
is fully settled that M.E. Gray not being a stockholder owning at
least 3% of the capital stock of the defendant corporation, has no
right to examine the books and records of the corporation nor to
require a statement of its affairs embracing a particular account
of its assets and liabilities.
5. However, M.E. Gray contends that, in accordance with our
Corporation Law, under which Insular company was registered to do
business in the Philippines, plaintiff M.E. Gray, as stockholder,
is entitled to inspect the record of the transactions of Insular
corporation (Sec. 51, Act No. 1459) and this right, which is
recognized in the common law, has not been altered by Section 77 of
the Stock Corporation Law of New York and can be enforced by
mandamus.
6. The lower court denied the mandamus against defendant Insular
and absolved it from the complaint.
ISSUE/s: W/N the plaintiff-appellant M.E. Gray is entitled, as
stockholder of the defendant-appellee Insular Lumber Company, to
inspect and examine the books records of the transactions of said
defendant. (NO.)
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1"Financial"
Statement" to" Stockholders:" Stockholders" owning" three" per"
centum" of" the" shares" of" any" corporation" other" than" a"
moneyed"corporation"may"make"a"written"request"to"the"treasurer"or"other"fiscal"officer"thereof"for"a"statement"of"its"affairs,"under"oath,"embracing"a"particular"account"of"all"
its"assets"and"liabilities,"and"the"treasurer"shall"make"such"statement"and"deliver"it"to"the"person"making"the"request"within"thirty"days"thereafter,"and"keep"on"file"in"the"office"of"the"corporation"for"twelve"months"thereafter"a"copy"of"such"statement,"which"shall"at"all"times"during"business"hours"be"exhibited"to"any"stockholders"demanding"an"examination"thereof;"but"the"treasurer"shall"not"be"required"to"deliver"more"than"one"such"statement"in"any"one"year."The"Supreme"Court,"or"any"justice"thereof,"may"upon"application,"for"good"cause"shown,"extend"
the" time" for" making" and" delivering" such" statement." For"
every" neglect" or" refusal" to" comply" with" the" provisions" of"
this" section"
the"corporation"shall"and"pay"to"the"person"making"such"request"the"sum"of"Fifty"Dollars,"and"the"further"sum"of"ten"dollars"for"every"twentyEfour"hours"thereafter"until"such"statement"shall"be"furnished."(S."C."L.,"sec."77.)"
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RATIO: Judgment of the lower court affirmed. The stipulation of
facts is finding upon both parties and cannot be altered by either
of
them. On the strength of this principle, plaintiff-appellant
M.E. Gray is bound to adhere to the
agreement made by him with the defendant corporation in
paragraph four of the stipulation of facts, to the effect that the
rights of a stockholder, under the law of New York, to examine the
books and records of a corporation organized under the laws of said
State, and during the entire period material to this action, are
only those provided in Section 77 Stock Corporation Law of New
York.
o Under this law, M.E. Gray has the right to be furnished by the
treasurer or other fiscal officer of the corporation with statement
of its affairs embracing a particular account of all its assets and
liabilities.
Inasmuch as plaintiff, either at the hearing or in his motion
for new trial, did not ask to have the stipulation of facts altered
or changed, he cannot now, for the first time on appeal, raise the
question that aside from the right conferred upon him by Section 77
of the Stock Corporation Law of New York, he also entitled under
the common law to examine and inspect the books and records of the
defendant corporation.
Neither can this right under the common law be granted the
defendant in the present case, since the same can only be granted
at the discretion of the court, under certain conditions, to
wit:
o (a) That the stockholder of a corporation in New York has the
right to inspect its books and records if it can be shown that he
seeks information for an honest purpose, or to protect his interest
as stockholder.
o (b) That said right to examine and inspect the books of the
corporation must be exercised in good faith, for a specific and
honest purpose, and not to gratify curiosity, or for speculative or
vexatious purposes.
o The appellant has made no effort to prove or even allege that
the information he desired to obtain through the examination and
inspection of defendant's books was necessary to protect his
interests as stockholder of the corporation, or that it was for a
specific and honest purpose, and not to gratify curiosity, nor for
speculative or vexatious purposes.
Digest by: Shelan Teh
ii. Exceptions to the Rule of Incorporation Test
PEDRO PALTING v. SAN JOSE PETROLEUM INC. G.R. No. L-14441 / 17
December 1966 Barrera FACTS: SAN JOSE PETROLEUM (PETROLEUM) is a
corporation organized and existing in the Republic of Panama.
PETROLEUM filed with SEC a sworn registration statement, for the
registration and licensing for sale in the Philippines of Voting
Trust Certificates
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representing 2 million shares of its capital stock of a par
value of $0.35 a share, at P1.00 per share.2
It was alleged that the proceeds of the sale thereof will be
used exclusively to finance the operations of domestic corporation
San Jose Oil Company (OIL) which has 14 petroleum exploration
concessions, located in various provinces.
Express condition:Every purchaser shall not receive a stock
certificate, but a registered or bearer-voting-trust certificate
from the voting trustees named therein.
PedroPalting, et al. (alleged prospective investors in the
shares of PETROLEUM) filed an opposition to registration and
licensing of the securities on the following grounds:
The tie-up between the issuer, PETROLEUM, a Panamanian
corporation and OIL, a domestic corporation, violates the
Constitution of the Philippines, the Corporation Law and the
Petroleum Act of 1949
The issuer PETROLEUM has not been licensed to transact business
in the Philippines
The sale of the shares of the issuer is fraudulent, and works or
tends to work a fraud upon Philippine purchasers; and
The issuer PETROLEUM as an enterprise, as well as its business,
is based upon unsound business principles.
PETROLEUM argued:
Since the order of Registration/Licensing took effect 30 days
from September 3, 1958, and since no stay order has been issued by
the Supreme Court, PETROLEUMs shares became registered and licensed
under the law as of October 3, 1958. Consequently, it is asserted,
the present appeal has become academic.
It was a "business enterprise" enjoying parity rights under the
Ordinance appended to the Constitution, which parity right, with
respect to mineral resources in the Philippines, may be exercised,
pursuant to the Laurel-Langley Agreement, only through the medium
of a corporation organized under the laws of the Philippines.
It refused the contention that the Corporation Law was being
violated, by alleging that Section 13 thereof applies only to
foreign corporations doing business in the Philippines, and
registrant was not doing business here. The mere fact that it was a
holding company of SAN JOSE OIL and that registrant undertook the
financing of and giving technical assistance to said corporation
did not constitute transaction of business in the Philippines.
Registrant also denied that the offering for sale in the
Philippines of its shares of capital stock was fraudulent or would
work or tend to work fraud on the investors.
SEC issued orders allowing the registration of the said
securities and licensing their sale.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!2
Later, PETROLEUM filed an amended statement: from 2 million to 5
million; offering price reduced from $1.00 to $0.70; par value went
down from $0.35 to $0.01.
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ISSUES AND HOLDING
1. WON prospective investor Palting has personality to file the
petition for review of the SEC orders. YES
2. WON the issue is already moot and academic. NO 3. WON the
tie-up between PETROLEUM (foreign) and OIL (domestic mining
corporation) is violative of the laws, which inhibit a mining
corporation from acquiring an interest in another mining
corporation. YES
4. WON the sale of securities is fraudulent, or would work or
tend to work fraud to purchasers of securities in PH. YES
RULING ISSUE #1 Our Securities Act in Section 7(c) thereof,
requires the publication and notice of the registration statement.
Any person (who may not be "aggrieved" or "interested" within the
legal acceptation of the word) is allowed or permitted to file an
opposition to the registration of securities for sale in the
Philippines. This is in consonance with the generally accepted
principle that Blue Sky Laws are enacted to protect investors and
prospective purchasers and to prevent fraud and preclude the sale
of securities which are in fact worthless or worth substantially
less than the asking price. Under the New Rules of Court, such a
party can appeal from a final order, ruling or decision of the SEC.
ISSUE #2 The fact is that because of the authority to sell, the
securities are still being traded in the open market. Consequently
the issue is much alive as to whether PETROLEUMs securities should
continue to be the subject of sale. The real and ultimate
controversy here would actually call for the construction of the
constitutional provisions governing the disposition, utilization,
exploitation and development of our natural resources. ISSUE #3
VERY IMPORTANT: OIL is a domestic mining corporation, 90% of the
outstanding capital stock of which is owned by PETROLEUM, a foreign
(Panamanian) corporation, the majority interest of which is owned
by OIL INVESTMENTS, Inc., another foreign (Panamanian) company.
This latter corporation in turn is wholly (100%) owned by PANTEPEC
OIL COMPANY, C.A., and PANCOASTAL PETROLEUM COMPANY, C.A., both
organized and existing under the laws of Venezuela. In the two
lists of stockholders, there is no indication of the citizenship of
these stockholders, or of the total number of authorized stocks of
each corporation, for the purpose of determining the corresponding
percentage of these listed stockholders in relation to the
respective capital stock of said corporation. (At this point, the
case cited the provisions of the Philippine Constitution (Art.
XIII, Sec. 1), the 1946 Ordinance Appended to the Constitution, and
the Laurel-Langley Agreement embodied in Republic Act No.
1355.)
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Re-stated, the privilege to utilize, exploit, and develop the
natural resources of this country was granted, by Article XIII of
the Constitution, to Filipino citizens or to corporations or
associations 60% of the capital of which is owned by such citizens.
With the Parity Amendment to the Constitution, the same right was
extended to citizens of the United States and business enterprises
owned or controlled directly or indirectly, by citizens of the
United States. The right was granted to 2 types of persons: natural
persons (Filipino or American citizens) and juridical persons
(corporations 60% of which capital is owned by Filipinos and
business enterprises owned or controlled directly or indirectly, by
citizens of the United States). In American law, "citizen" has been
defined as "one who, under the constitution and laws of the United
States, has a right to vote for representatives in congress and
other public officers, and who is qualified to fill offices in the
gift of the people. A citizen is: one of the sovereign people;
constituent member of the sovereignty, synonymous with the people;
a member of the civil state entitled to all its privileges. Is
PETROLEUM, an American business enterprise entitled to parity
rights in the Philippines? NO!
It is not owned or controlled directly by citizens of the United
States, because it is owned and controlled by a corporation, the
OIL INVESTMENTS, another foreign (Panamanian) corporation.
Neither can it be said that it is indirectly owned and
controlled by American citizens through the OIL INVESTMENTS, for
this latter corporation is in turn owned and controlled, not by
citizens of the United States, but still by two foreign
(Venezuelan) corporations, the PANTEPEC OIL COMPANY and PANCOASTAL
PETROLEUM.
Although it is claimed that these two last corporations are
owned and controlled respectively by 12,373 and 9,979 stockholders
residing in the different American states, there is no showing in
the certification furnished by respondent that the stockholders of
PANCOASTAL or those of them holding the controlling stock, are
citizens of the United States.
Granting that these individual stockholders are American
citizens, it is necessary to establish that the different states of
which they are citizens, allow Filipino citizens to engage in the
exploitation, etc. of the natural resources of these states.
Respondent has presented no proof to this effect.
Even if the requirements mentioned are satisfied, nevertheless
to hold that the set-up comes within the purview of the Parity
Amendment regarding business enterprises indirectly owned or
controlled by citizens of the United States, is to unduly stretch
and strain the language and intent of the law. For, to what extent
must the word "indirectly" be carried? Must we trace the ownership
or control of these various corporations ad infinitum for the
purpose of determining whether the American
ownership-control-requirement is satisfied?
ISSUE #4
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Looking at the provisions, the directors and officers of the
company can do anything, short of actual fraud, with the affairs of
the corporation even to benefit themselves directly or other
persons or entities in which they are interested, and with immunity
because of the advance condonation or relief from responsibility by
reason of such acts. This and the other provision which authorizes
the election of non-stockholders as directors, completely
disassociate the stockholders from the government and management of
the business in which they have invested. Dispositive: MTD appeal
is DENIED; SEC orders allowing registration of securities and
licensing their sale is SET ASIDE; Case REMANDED to SEC FILIPINAS
COMPANIA DE SEGURAS vs CHRISTERN A corporation borrows its
citizenship from the citizenship of majority of its
stockholders, regardless of the country under whose laws it was
organized and created.
FACTS: Christern Huenefeld Corporation bought a fire insurance
policy from Filipinas Compania de Seguros to cover merchandise
contained in a building. During the Japanese military occupation,
this same merchandise and the building were burned, so Huenefeld
filed a claim under the policy. Filipinas Compania refused to pay,
alleging that the policy had ceased to be in force when the US
declared war against Germany. Filipinas Compania contended that
Huenefeld, although organized and created under Philippine laws, is
a German subject, and hence, a public enemy, since majority of its
stockholders are Germans. On the other hand, FilipinasCompania is
under American jurisdiction. However, the Director of Bureau of
Financing, Philippine Executive Commission ordered Filipinas
Compania to pay, soFilipinas Compania did pay. The case at bar is
about the recovery of that sum paid. ISSUES: W/N Christern
Huenefeld is a German subject because majority of its
stockholders
are under German jurisdiction, despite the fact that it was
organized and created under Philippine laws
If so, W/N the fire insurance policy is enforceable against an
enemy state HELD: The Court of Appeals ruled that a private
corporation is a citizen of the country or state by and under the
laws of which it was created or organized. It rejected the theory
that nationality of a private corporation is determined by the
character or citizenship of its controlling stockholders.
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But the Supreme Court held that Christern Huenefeld is an enemy
corporation since majority of its stockholders are German subjects.
The two American cases relied up by the Court of Appeals have lost
their force in view of a newer case where the control test was
adopted. The Philippine Insurance Law provides that anyone, except
a public enemy, may be insured. It stands to reason that an
insurance policy ceases to be allowable as soon as the insured
becomes a public enemy. Since Christern Huenefeld became a public
enemy on Dec. 10, 1941, then the policy has ceased to be enforcible
and therefore Huenefeld is not entitled to indemnity. However,
elementary rules of justice require that the premium paid from Dec.
11, 1941 should be returned. Thus, Filipinas Compania is allowed to
recover the sum paid but only its equivalent in actual Philippine
currency, minus the premium that Huenefeld paid after Dec. 11. iii.
Domicile or residence of Foreign Corporation STATE INVESTMENT HOUSE
INC vs CITIBANK G.R. No. 79926-27, Oct. 17, 1991 FACTS:
Consolidated Mines, Inc. (CMI) obtained loans from Citibank, Bank
of America and HSBC, all foreign corporations but with branches in
the Philippines. Meanwhile, State Investment House, Inc. (SIHI) and
State Financing Center, Inc. (SFCI), also creditors of CMI, filed
collection suits against the latter with writs of preliminary
attachment. Subsequently, the three banks jointly filed with the
court a petition for involuntary insolvency of CMI. SHI and SFCI
opposed the petition on the ground that the petitioners are not
resident creditors in contemplation of the Insolvency Law. ISSUE:
Whether or not a foreign corporation with a branch in the
Philippines and doing business therein can be considered a resident
HELD: Foreign corporations duly licensed to do business in the
Philippines are considered residents of the Philippines, as the
word is understood in Sec. 20 of the Insolvency Law, authorizing at
least three resident creditors of the Philippines to file a
petition to declare a corporation insolvent. The Tax Code declares
that the term resident foreign corporation applies to foreign
corporation engaged in trade or business within the Philippines as
distinguished from a non-resident foreign corporation which is not
engaged in trade or business within the Philippines. The Offshore
Banking Law sates that: Branches, subsidiaries, affiliates,
extension offices or any other units of corporation or juridical
person organized under the laws of any foreign country
operating
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in the Philippines shall be considered residents of the
Philippines. The General Banking Act places branches and agencies
in the Philippines of foreign banks in the category as commercial
banks, rural banks, stock savings and loan association making no
distinction between the former ad the latter in so far as the terms
banking institutions and banks are used in said Act.
IV. RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENT AND ARBITRAL
AWARDS
Section 24. Proof of official record. The record of public
documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested 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. If the office in which the record is
kept is in foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general, consul, vice
consul, or consular agent or by any officer in the foreign service
of the Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his office. (25a)
Section 48. Effect of foreign judgments or final orders. The effect
of a judgment or final order of a tribunal of a foreign country,
having jurisdiction to render the judgment or final order is as
follows: (a) In case of a judgment or final order upon a specific
thing, the judgment or final order, is conclusive upon the title to
the thing, and (b) In case of a judgment or final order against a
person, the judgment or final order is presumptive evidence of a
right as between the parties and their successors in interest by a
subsequent title. In either case, the judgment or final order 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.
(50a) PERKINS vs BENGUET CONSOLIDATED MINING
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Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952)
was a United States Supreme Court case which held that an Ohio
state court could exercise general personal jurisdiction over a
foreign corporation on the basis of that company's "continuous and
systematic" contacts with the state of Ohio.[1] Benguet
Consolidated Mining Co. was aPhilippine mining corporation, owned
by American John W. Hausermann, that temporarily stopped its mining
operations and relocated its president to Ohio during the World War
IIJapanese occupation of the Philippines. The Court held that the
president's use of his office in Ohio to carry on continuous
business activities during this period allowed Ohio to properly
assert general jurisdiction over his company. The Supreme Court
case consolidated the two original suits into one. One suit had
been brought by the petitioner Ms. Perkins for approximately
$68,400 in dividends that she alleged were due her as a
stockholder. The second suit was for $2,500,000 damages claimed as
a result of the company's failure to issue to her certificates for
120,000 shares of its stock. The trial court had sustained a motion
to quash the summons in each case because the defendant was a
foreign corporation and, as such, the Court did not have personal
jurisdiction over it. Neither its corporate headquarters nor its
principal place of business were in Ohio, and it had not applied
for the required license to transact business in Ohio nor appointed
an agent for service of process in state. Additionally, the claims
Ms. Perkins sued upon did not arise from anything the defendant did
in the state of Ohio. The Ohio State Supreme Court affirmed the
decision and the plaintiff appeal to the U.S. Supreme Court. The
Supreme Court reversed on the basis of the defendant president's
"continuous and systematic supervision of the necessarily limited
wartime activities of the company" [1] in Ohio. It was thus not a
violation of the Fourteenth Amendment due process clause for Ohio
to assertgeneral jurisdiction over the company on the plaintiff's
claim, even though the claim arose from activities conducted
outside the forum state and entirely distinct from those activities
conducted inside the forum state. The judgment of the Supreme Court
of Ohio was vacated and the cause of action remanded for further
proceedings consistent with the opinion. This is a notable United
States civil procedure case in the area of general jurisdiction. It
represents one of the rare instances in which a state's exercise of
general (as opposed to specific) personal jurisdiction over a
non-resident will be deemed to comport with the requirements of due
process, due to the non-resident's extensive activities within the
state. GODARD vs. GRAY Plaintiffs Godar are Frenchmen sued the
defendants, who are Englishmen, on a charter
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party made atSunderland, which charter party contained the
following clause: "Penalty for non-performance of this
agreement,estimated amount of freight." The French Court below,
treating this clause as fixing the amount of liquidated dam-ages,
gave judgment against the defendants for the amount of freight on
two voyages. On appeal, the superior Courtreduced the amount to the
estimated freight of one voyage, giving as their reason that the
charter party itself and thetribunal proceeds to observe that the
amount thus decreed was after all more than sufficient to cover all
the plaintiffs'loss. All parties in France seem to have taken the
word for granted in the charter party which is to be understood
intheir natural meaning, However in English law is accurately
expressed that passage been brought to the notice of the French
tribunal,it would have known that in an English charter party, as
is there stated, "Such a clause is not the absolute limit of
damages on either side; the party may, if he thinks fit, ground his
action upon the other clauses or covenants, andmay, in such action,
recover damages beyond the amount of the penalty, if in justice
they shall be found to exceed it.On the other hand, if the party
sue on such a penal clause, he cannot, in effect, recover more than
the damageactually sustained." But it was not brought to the notice
of the French tribunal that according to the interpretation putby
the English law on such a contract, a penal clause of this sort was
in fact idle and inoperative. If it had been, theywould, probably,
have interpreted the English contract made in England according to
the English construction. ISSUE: whether this is a bar to the
action brought in England to enforce that judgment.HELD:"It is not
an admitted principle of the law of nations that a State is bound
to enforce within its territories the judgment of a foreign
tribunal. Several of the continental nations (including France) do
not enforce the judgments of other countries, unless where there
are reciprocal treaties to that effect.However in England and in
those States which are governed by the common Iaw, such judgments
are enforced,not by virtue of any treaty, nor by virtue of any
statute, but upon a principle very well stated by Parke, B., in
Williamsv. Jones (13 M. & W. 628; 14 L.J. Exch. 145): "Where a
Court of competent jurisdiction has adjudicated a certain sum to be
due from one person to another, alegal obligation aribes to pay the
sum, on which an action of debt to enforce the judgment may be
maintained. It is inthis way that the judgments of foreign and
colonial Courts are supported and enforced." A judgment in personam
of a foreign court of competent jurisdiction cannot be questioned
by the parties on themerits when recognition or enforcement of the
judgment is sought in England, notwithstanding that it may have
beenwrong either in fact or law. This derived from the mode of
pleading an action on a foreign judgment in debt, and notmerely as
evidence of the obligation to pay the underlying liability.
NORTHWEST ORIENT AIRLINES vs CA
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FACTS: Northwest Airlines (Northwest) and C.F. Sharp &
Company (C.F.), through its Japan
branch, entered into an International Passenger Sales Agency
Agreement, whereby the Northwest authorized the C.F. to sell its
air transportation tickets
March 25, 1980: Unable to remit the proceeds of the ticket
sales, Northwest sued C.F. in Tokyo, Japan, for collection of the
unremitted proceeds of the ticket sales, with claim for damages
April 11, 1980: writ of summons was issued by the 36th Civil
Department, Tokyo District Court of Japan
The attempt to serve the summons was unsuccessful because Mr.
Dinozo was in Manila and would be back on April 24, 1980
April 24, 1980: Mr. Dinozo returned to C.F. Office to serve the
summons but he refused to receive claiming that he no longer an
employee
After the 2 attempts of service were unsuccessful, Supreme Court
of Japan sent the summons together with the other legal documents
to the Ministry of Foreign Affairs of Japan> Japanese Embassy in
Manila>Ministry (now Department) of Foreign Affairs of the
Philippines>Executive Judge of the Court of First Instance (now
Regional Trial Court) of Manila who ordered Deputy Sheriff Rolando
Balingit>C.F. Main Office
August 28, 1980: C.F. received from Deputy Sheriff Rolando
Balingit the writ of summons but failed to appear at the scheduled
hearing.
January 29, 1981: Tokyo Court rendered judgment ordering the
C.F. to pay 83,158,195 Yen and damages for delay at the rate of 6%
per annum from August 28, 1980 up to and until payment is
completed
March 24, 1981: C.F. received from Deputy Sheriff Balingit copy
of the judgment. C.F. did not appeal so it became final and
executory
May 20, 1983: Northwest filed a suit for enforcement of the
judgment a RTC July 16, 1983: C.F. averred that the Japanese Court
sought to be enforced is null and
void and unenforceable in this jurisdiction having been rendered
without due and proper notice and/or with collusion or fraud and/or
upon a clear mistake of law and fact. The foreign judgment in the
Japanese Court sought in this action is null and void for want of
jurisdiction over the person of the defendant considering that this
is an action in personam. The process of the Court in Japan sent to
the Philippines which is outside Japanese jurisdiction cannot
confer jurisdiction over the defendant in the case before the
Japanese Court of the case at bar
CA sustained RTC: Court agrees that if the C.F. in a foreign
court is a resident in the court of that foreign court such court
could acquire jurisdiction over the person of C.F. but it must be
served in the territorial jurisdiction of the foreign court
ISSUE: W/N the Japanese Court has jurisdiction over C.F. HELD:
YES. instant petition is partly GRANTED, and the challenged
decision is AFFIRMED insofar as it denied NORTHWEST's claims for
attorneys fees, litigation expenses, and exemplary damages
Consequently, the party attacking (C.F.) a foreign judgment has the
burden of
overcoming the presumption of its validity Accordingly, the
presumption of validity and regularity of the service of summons
and
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the decision thereafter rendered by the Japanese court must
stand. Applying it, the Japanese law on the matter is presumed to
be similar with
thePhilippine law on service of summons on a private foreign
corporation doing business in the Philippines. Section 14, Rule 14
of the Rules of Court provides that if the defendant is a foreign
corporation doing business in the Philippines, service may be
made:
(1) on its resident agent designated in accordance with law for
that purpose, or, (2) if there is no such resident agent, on the
government official designated by
law to that effect; or (3) on any of its officers or agents
within the Philippines. If the foreign corporation has designated
an agent to receive summons, the
designation is exclusive, and service of summons is without
force and gives the court no jurisdiction unless made upon him.
Where the corporation has no such agent, service shall be made
on the government official designated by law, to wit:
(a) the Insurance Commissioner in the case of a foreign
insurance company
(b) the Superintendent of Banks, in the case of a foreign
banking corporation
(c) the Securities and Exchange Commission, in the case of other
foreign corporations duly licensed to do business in the
Philippines. Whenever service of process is so made, the government
office or official served shall transmit by mail a copy of the
summons or other legal proccess to the corporation at itshome or
principal office. The sending of such copy is a necessary part of
the service.
The service on the proper government official under Section 14,
Rule 14 of the Rules of Court, in relation to Section 128 of the
Corporation Code
Our laws and jurisprudence indicate a purpose to assimilate
foreign corporations, duly licensed to do business here, to the
status of domestic corporations
We think it would be entirely out of line with this policy
should we make a discrimination against a foreign corporation, like
the petitioner, and subject its property to the harsh writ of
seizure by attachment when it has complied not only with every
requirement of law made specially of foreign corporations, but in
addition with every requirement of law made of domestic
corporations
In as much as SHARP was admittedly doing business in Japan
through its four duly registered branches at the time the
collection suit against it was filed, then in the light of the
processual presumption, SHARP may be deemed a resident of Japan,
and, as such, was amenable to the jurisdiction of the courts
therein and may be deemed to have assented to the said courts'
lawful methods of serving process.
Accordingly, the extraterritorial service of summons on it by
the Japanese Court was valid not only under the processual
presumption but also because of the presumption of regularity of
performance of official duty.
BOUDARD vs TAIT FACTS:
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Emilie Boudard, as widow of Marie Theodore Boudard and as
guardian of her children born during their marriage obtained a
judgment in their favor from CFI Hanoi, French Indo-China for the
sum of 40,000 piastras plus interest. The judgment was against
Stewart Tait who had been declared in default for his failure to
appear at the trial before court. Theodore Boudard, who was an
employee of Stewart Tait, was killed in Hanoi by other employees of
Tait, although "outside of the fulfillment of a duty", according to
the English translation of a certified copy of the French decision.
The dismissal of the complaint was based principally on the lack of
jurisdiction of the CFI Hanoi to render judgment. It was found that
the Tait was not a resident of, nor domiciled in that country.
Also, the evidence adduced at the trial proves that neither Tait
nor his agent or employees were ever in Hanoi and that Theodore had
never, at any time, been his employee. ISSUE: 1. Whether or not
court erred in admitting evidence for judicial foreign records (in
this case, it was the Hanoi decision). 2. Whether or not the court
erred in declaring that it was indispensable for Tait to be served
with summons in Hanoi. 3. Whether or not the decision of CFI Hanoi
was already conclusive. HELD: 1. Yes, Boudard failed to show that
the proceedings against Tait in CFI Hanoi were in accordance with
the laws of France then in force. Further, Boudard failed to show
that they are certified copies of judicial records. They argue that
the papers are the original documents and that the French consul in
the Philippines has confirmed this fact. This is not sufficient to
authorize a deviation from the rule established by law. The best
evidence of a foreign judicial proceeding is a certified copy with
all the formalities required. 2. No. French law regarding summons
states that: those who have no known residence in France shall be
served summons in the place of their present residence; if the
place is unknown, writ shall be placed at the main door of the hall
of the court where the complaint is filed. In the case, it was
shown that summons were delivered in Manila to J.M. Shotwell, a
representative or agent of Churchill and Tait, Inc. which is an
entity entirely different from Tait. Also, evidence shows that Tait
was not in Hanoi during the time the complaint was filed by
Boudard. The rule is that judicial proceedings in a foreign
country,regarding payment of money, are only effective against a
party if summons is duly served on him within such foreign country
before the proceedings.
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3. No. The decision cannot be conclusive to such an extent that
it cannot be contested. It merely constitutes prima facie evidence
of the justness of Boudard's claim and admits proof to the
contrary. The effect of a judgment of any tribunal of a foreign
country is: - In case of judgment against a specific thing, the
judgment is conclusive upon the title to the thing. - In case of
judgment against a person, the judgment is presumptive evidence of
a right as between the parties and their successors-in-interest by
a subsequent title, but the judgment may be repelled by evidence
of: -> want of jurisdiction -> want of notice to the party
-> collusion -> fraud -> clear mistake of law or fact
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