Second Set of Cases in Conflicts

[G.R. No. 124110.
April 20, 2001]
UNITED AIRLINES, INC., petitioner, vs. COURT OF

APPEALS, ANICETO FONTANILLA, in his
personal capacity and in behalf of his minor son
MYCHAL ANDREW FONTANILLA respondents.
DECISION
KAPUNAN, J.:
On March 1, 1989, private respondent Aniceto Fontanilla

purchased from petitioner United Airlines, through the
Philippine Travel Bureau in Manila, three (3) Visit the U.S.A.
tickets for himself, his wife and his minor son Mychal for the
following routes:
(a) San Francisco to Washington (15 April 1989);
(b) Washington to Chicago (25 April 1989);
(c) Chicago to Los Angeles (29 April 1989);
(d) Los Angeles to San Francisco (01 May 1989 for petitioners
wife and 05 May 1989 for petitioner and his son). [1]
All flights had been confirmed previously by United Airlines. [2]
The Fontanillas proceeded to the United States as planned,
where they used the first coupon from San Francisco to
Washington. On April 24, 1989, Aniceto Fontanilla bought two
(2) additional coupons each for himself, his wife and his son
from petitioner at its office in Washington Dulles
Airport. After paying the penalty for rewriting their tickets, the
Fontanillas were issued tickets with corresponding boarding
passes with the words CHECK-IN REQUIRED, for United
Airlines Flight No. 1108, set to leave from Los Angeles to San
Francisco at 10:30 a.m. on May 5, 1989.[3]
The cause of the non-boarding of the Fontanillas on United
Airlines Flight No. 1108 makes up the bone of contention of
this controversy.
Private respondents' version is as follows:
Aniceto Fontanilla and his son Mychal claim that on May
5, 1989, upon their arrival at the Los Angeles Airport for their
flight, they proceeded to United Airlines counter where they
were attended by an employee wearing a nameplate bearing
the name LINDA. Linda examined their tickets, punched
something into her computer and then told them that boarding
would be in fifteen minutes.[4]
When the flight was called, the Fontanillas proceeded to
the plane. To their surprise, the stewardess at the gate did not
allow them to board the plane, as they had no assigned seat
numbers.They were then directed to go back to the check-in
counter where Linda subsequently informed them that the
flight had been overbooked and asked them to wait. [5]
The Fontanillas tried to explain to Linda the special
circumstances of their visit. However, Linda told them in
arrogant manner, So what, I can not do anything about it.[6]
Subsequently, three other passengers with Caucasian

features were graciously allowed to board, after the Fontanillas
were told that the flight had been overbooked. [7]
The plane then took off with the Fontanillas baggage in
tow, leaving them behind.[8]
The Fontanillas then complained to Linda, who in turn
gave them an ugly stare and rudely uttered, Its not my fault. Its
the fault of the company. Just sit down and wait.[9] When Mr.
Fontanilla reminded Linda of the inconvenience being caused
to them, she bluntly retorted, Who do you think you are? You
lousy Flips are good for nothing beggars. You always ask for
American aid. After which she remarked Dont worry about
your baggage. Anyway there is nothing in there. What are you
doing here anyway? I will report you to immigration. You
Filipinos should go home.[10] Such rude statements were made
in front of other people in the airport causing the Fontanillas to
suffer shame, humiliation and embarrassment. The chastening
situation even caused the younger Fontanilla to break into
tears.[11]
noon that they were able to leave Los Angeles on United

Airlines Flight No. 803.
Petitioner United Airlines has a different version of what
occurred at the Los Angeles Airport on May 5, 1989.
According to United Airlines, the Fontanillas did not
initially go to the check-in counter to get their seat assignments
for UA Flight 1108. They instead proceeded to join the queue
boarding the aircraft without first securing their seat
assignments as required in their ticket and boarding
passes. Having no seat assignments, the stewardess at the door
of the plane instructed them to go to the check-in counter.
When the Fontanillas proceeded to the check-in counter, Linda
Allen, the United Airlines Customer Representative at the
counter informed them that the flight was overbooked.She
booked them on the next available flight and offered them
denied boarding compensation. Allen vehemently denies
uttering the derogatory and racist words attributed to her by the
Fontanillas.[14]
After some time, Linda, without any explanation, offered

the Fontanillas $50.00 each. She simply said Take it or leave
it. This, the Fontanillas declined.[12]
The incident prompted the Fontanillas to file Civil Case

No. 89-4268 for damages before the Regional Trial Court of
Makati. After trial on the merits, the trial court rendered a
decision, the dispositive portion of which reads as follows:
The Fontanillas then proceeded to the United Airlines

customer service counter to plead their case. The male
employee at the counter reacted by shouting that he was ready
for it and left without saying anything.[13]
WHEREFORE, judgment is rendered dismissing the

complaint. The counterclaim is likewise dismissed as it
appears that plaintiffs were not actuated by legal malice when
they filed the instant complaint.[15]
The Fontanillas were not booked on the next flight, which

departed for San Francisco at 11:00 a.m. It was only at 12:00
On appeal, the Court of Appeals ruled in favor of the

Fontanillas. The appellate court found that there was an
admission on the part of United Airlines that the Fontanillas

did in fact observe the check-in requirement. It ruled further
that even assuming there was a failure to observe the check-in
requirement, United Airlines failed to comply with the
procedure laid down in cases where a passenger is denied
boarding. The appellate court likewise gave credence to the
claim of Aniceto Fontanilla that the employees of United
Airlines were discourteous and arbitrary and, worse,
discriminatory. In light of such treatment, the Fontanillas were
entitled to moral damages. The dispositive portion of the
decision of the respondent Court of Appeals dated 29
September 1995, states as follows:
WHEREFORE, in view of the foregoing, judgment appealed
herefrom is hereby REVERSED and SET ASIDE, and a new
judgment is entered ordering defendant-appellee to pay
plaintiff-appellant the following:
RESPONDENT COURT OF APPEALS GRAVELY

ERRED IN RULING THAT THE TRIAL COURT WAS
WRONG IN FAILING TO CONSIDER THE ALLEGED
ADMISSION
THAT
PRIVATE
RESPONDENT
OBSERVED THE CHECK-IN REQUIREMENT.
II

ERRED IN RULING THAT PRIVATE RESPONDENTS
FAILURE TO CHECK-IN WILL NOT DEFEAT HIS
CLAIMS BECAUSE THE DENIED BOARDING
RULES WERE NOT COMPLIED WITH.
III

ERRED IN RULING THAT PRIVATE RESPONDENT IS
ENTITLED TO MORAL DAMAGES OF P200, 000.
a) P200,000.00 as moral damages;

IV
b) P200,000.00 as exemplary damages;

ENTITLED TO EXEMPLARY DAMAGES OF
P200,000.
c) P50, 000.00 as attorneys fees.

No pronouncement as to costs.
SO ORDERED.[16]
Petitioner United Airlines now comes to this Court raising
the following assignment of errors:
I

ENTITLED TO ATTORNEYS FEES OF P50, 000.[17]
On the first issue raised by the petitioner, the respondent

Court of Appeals ruled that when Rule 9, Section 1 of the
Rules of Court,[18] there was an implied admission in
petitioner's answer in the allegations in the complaint that
private respondent and his son observed the check-in
requirement at the Los Angeles Airport. Thus:
A perusal of the above pleadings filed before the trial court
disclosed that there exists a blatant admission on the part of the
defendant-appellee that the plaintiffs-appellants indeed
observed the check-in requirement at the Los Angeles Airport
on May 5, 1989. In view of defendant-appellees admission of
plaintiffs-appellants material averment in the complaint, We
find no reason why the trial court should rule against such
admission.[19]
We disagree with the above conclusion reached by
respondent Court of Appeals. Paragraph 7 of private
respondents' complaint states:
7. On May 5, 1989 at 9:45 a.m., plaintiff and his son checked
in at defendants designated counter at the airport in Los
Angeles for their scheduled flight to San Francisco on
defendants Flight No. 1108.[20]
Responding to the above allegations, petitioner averred in
paragraph 4 of its answer, thus:
4. Admits the allegation set forth in paragraph 7 of the
complaint except to deny that plaintiff and his son checked in
at 9:45 a.m., for lack of knowledge or information at this point
in time as to the truth thereof.[21]
The rule authorizing an answer that the defendant has no

knowledge or information sufficient to form a belief as to the
truth of an averment and giving such answer the effect of a
denial, does not apply where the fact as to which want of
knowledge is asserted is so plainly and necessarily within the
defendant's knowledge that his averment of ignorance must be
palpably untrue.[22]Whether or not private respondents checked
in at petitioner's designated counter at the airport at 9:45 a.m.
on May 5, 1989 must necessarily be within petitioner's
knowledge.
While there was no specific denial as to the fact of
compliance with the check-in requirement by private
respondents, petitioner presented evidence to support its
contention that there indeed was no compliance.
Private respondents then are said to have waived the rule
on admission. It not only presented evidence to support its
contention that there was compliance with the check-in
requirement, it even allowed petitioner to present rebuttal
evidence. In the case of Yu Chuck vs. "Kong Li Po," we ruled
that:
The object of the rule is to relieve a party of the trouble and
expense in proving in the first instance an alleged fact, the
existence or non-existence of which is necessarily within the
knowledge of the adverse party, and of the necessity (to his
opponents case) of establishing which such adverse party is
notified by his opponents pleadings.
The plaintiff may, of course, waive the rule and that is what
must be considered to have done (sic) by introducing evidence
as to the execution of the document and failing to object to the
defendants evidence in refutation; all this evidence is now

competent and the case must be decided thereupon. [23]
The determination of the other issues raised is dependent
on whether or not there was a breach of contract in bad faith
on the part of the petitioner in not allowing the Fontanillas to
board United Airlines Flight 1108.
It must be remembered that the general rule in civil cases
is that the party having the burden of proof of an essential fact
must produce a preponderance of evidence thereon.
[24]
Although the evidence adduced by the plaintiff is stronger
than that presented by the defendant, a judgment cannot be
entered in favor of the former, if his evidence is not sufficient
to sustain his cause of action.The plaintiff must rely on the
strength of his own evidence and not upon the weakness of the
defendants.[25] Proceeding from this, and considering the
contradictory findings of facts by the Regional Trial Court and
the Court of Appeals, the question before this Court is whether
or not private respondents were able to prove with adequate
evidence his allegations of breach of contract in bad faith.
We rule in the negative.
Time and again, the Court has pronounced that appellate
courts should not, unless for strong and cogent reasons, reverse
the findings of facts of trial courts. This is so because trial
judges are in a better position to examine real evidence and at
a vantage point to observe the actuation and the demeanor of
the witnesses.[26] While not the sole indicator of the credibility
of a witness, it is of such weight that it has been said to be the
touchstone of credibility.[27]
Aniceto Fontanillas assertion that upon arrival at the

airport at 9:45 a.m., he immediately proceeded to the check-in
counter, and that Linda Allen punched in something into the
computer is specious and not supported by the evidence on
record. In support of their allegations, private respondents
submitted a copy of the boarding pass. Explicitly printed on
the boarding pass are the words Check-In Required. Curiously,
the said pass did not indicate any seat number. If indeed the
Fontanillas checked in at the designated time as they claimed,
why then were they not assigned seat numbers? Absent any
showing that Linda was so motivated, we do not buy into
private respondents' claim that Linda intentionally deceived
him, and made him the laughing stock among the passengers.
[28]
Hence, as correctly observed by the trial court:
Plaintiffs fail to realize that their failure to check in, as
expressly required in their boarding passes, is the very reason
why they were not given their respective seat numbers, which
resulted in their being denied boarding. [29]
Neither do we agree with the conclusion reached by the
appellate court that private respondents' failure to comply with
the check-in requirement will not defeat his claim as the
denied boarding rules were not complied with. Notably, the
appellate court relied on the Code of Federal Regulation Part
on Oversales, which states:
250.6 Exceptions
compensation.
to
eligibility
for
denied
boarding
A passenger denied board involuntarily from an oversold flight

shall not be eligible for denied board compensation if:
(a) The passenger does not comply with the carriers contract of
carriage
or
tariff
provisions
regarding
ticketing,
reconfirmation, check-in, and acceptability for transformation.
The appellate court, however, erred in applying the laws of
the United States as, in the case at bar, Philippine law is the
applicable law. Although, the contract of carriage was to be
performed in the United States, the tickets were purchased
through petitioners agent in Manila. It is true that the tickets
were rewritten in Washington, D.C. However, such fact did not
change the nature of the original contract of carriage entered
into by the parties in Manila.
In the case of Zalamea vs. Court of Appeals,[30] this Court
applied the doctrine of lex loci contractus. According to the
doctrine, as a general rule, the law of the place where a
contract is made or entered into governs with respect to its
nature and validity, obligation and interpretation. This has been
said to be the rule even though the place where the contract
was made is different from the place where it is to be
performed, and particularly so, if the place of the making and
the place of performance are the same. Hence, the court should
apply the law of the place where the airline ticket was issued,
when the passengers are residents and nationals of the forum
and the ticket is issued in such State by the defendant airline.
The law of the forum on the subject matter is Economic
Regulations No. 7 as amended by Boarding Priority and
Denied Boarding Compensation of the Civil Aeronautics
Board, which provides that the check-in requirement be
complied with before a passenger may claim against a carrier
for being denied boarding:
SEC. 5. Amount of Denied Boarding Compensation Subject to

the exceptions provided hereinafter under Section 6, carriers
shall pay to passengers holding confirmed reserved space and
who have presented themselves at the proper place and
time and fully complied with the carriers check-in and
reconfirmation procedures and who are acceptable for
carriage under the Carriers tariffs but who have been denied
boarding for lack of space, a compensation at the rate of: xx
Private respondents' narration that they were subjected to
harsh and derogatory remarks seems incredulous. However,
this Court will not attempt to surmise what really
happened. Suffice to say, private respondent was not able to
prove his cause of action, for as the trial court correctly
observed:
xxx plaintiffs claim to have been discriminated against and
insulted in the presence of several people. Unfortunately,
plaintiffs limited their evidence to the testimony [of] Aniceto
Fontanilla, without any corroboration by the people who saw
or heard the discriminatory remarks and insults; while such
limited testimony could possibly be true, it does not enable the
Court to reach the conclusion that plaintiffs have, by a
preponderance of evidence, proven that they are entitled to
P1,650,000.00 damages from defendant.[31]
As to the award of moral and exemplary damages, we find
error in the award of such by the Court of Appeals. For the
plaintiff to be entitled to an award of moral damages arising
from a breach of contract of carriage, the carrier must have
acted with fraud or bad faith. The appellate court predicated its
award on our pronouncement in the case of Zalamea vs. Court

of Appeals, supra, where we stated:
Existing jurisprudence explicitly states that overbooking
amounts to bad faith, entitling passengers concerned to an
award of moral damages. In Alitalia Airways v. Court of
Appeals, where passengers with confirmed booking were
refused carriage on the last minute, this Court held that when
an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises,
and the passenger has every right to expect that he would fly
on that flight and on that date. If he does not, then the carrier
opens itself to a suit for breach of contract of carriage. Where
an airline had deliberately overbooked, it took the risk of
having to deprive some passengers of their seats in case all of
them would show up for check in. For the indignity and
inconvenience of being refused a confirmed seat on the last
minute, said passenger is entitled to moral damages. (Emphasis
supplied.)
However, the Courts ruling in said case should be read in
consonance with existing laws, particularly, Economic
Regulations No. 7, as amended, of the Civil Aeronautics
Board:
Sec 3. Scope. This regulation shall apply to every Philippine
and foreign air carrier with respect to its operation of flights or
portions of flights originating from or terminating at, or
serving a point within the territory of the Republic of the
Philippines insofar as it denies boarding to a passenger on a
flight, or portion of a flight inside or outside the Philippines,
for which he holds confirmed reserved space. Furthermore,
this Regulation is designed to cover only honest mistakes on

the part of the carriers and excludes deliberate and willful acts
of
non-accommodation. Provided,
however,
that
overbooking not exceeding 10% of the seating capacity of
the aircraft shall not be considered as a deliberate and
willful act of non-accommodation.
What this Court considers as bad faith is the willful and
deliberate overbooking on the part of the airline carrier. The
above-mentioned law clearly states that when the overbooking
does not exceed ten percent (10%), it is not considered as
deliberate and therefore does not amount to bad faith. While
there may have been overbooking in this case, private
respondents were not able to prove that the overbooking on
United Airlines Flight 1108 exceeded ten percent.
As earlier stated, the Court is of the opinion that the
private respondents were not able to prove that they were
subjected to coarse and harsh treatment by the ground crew of
United Airlines.Neither were they able to show that there was
bad faith on part of the carrier airline. Hence, the award of
moral and exemplary damages by the Court of Appeals is
improper. Corollarily, the award of attorney's fees is, likewise,
denied for lack of any legal and factual basis.
WHEREFORE, the petition is GRANTED. The decision
of the Court of Appeals in CA-G.R. CV No. 37044 is hereby
REVERSED and SET ASIDE. The decision of the Regional
Trial Court of Makati City in Civil Case No. 89-4268 dated
April 8, 1991 is hereby REINSTATED.
SO ORDERED.
G.R. No. L-104776 December 5, 1994

BIENVENIDO M. CADALIN, ROLANDO M. AMUL, DONATO B.
EVANGELISTA, and the rest of 1,767 NAMED-COMPLAINANTS, thru
and by their Attorney-in-fact, Atty. GERARDO A. DEL
MUNDO, petitioners,
vs.
PHILIPPINE
OVERSEAS
EMPLOYMENT
ADMINISTRATION'S
ADMINISTRATOR, NATIONAL LABOR RELATIONS COMMISSION,
BROWN & ROOT INTERNATIONAL, INC. AND/OR

INTERNATIONAL BUILDERS CORPORATION, respondents.
ASIA
G.R. Nos. 104911-14 December 5, 1994

BIENVENIDO
M.
CADALIN,
ET
AL., petitioners,
vs.
HON. NATIONAL LABOR RELATIONS COMMISSION, BROWN &
ROOT INTERNATIONAL, INC. and/or ASIA INTERNATIONAL
BUILDERS CORPORATION, respondents.
G.R. Nos. 105029-32 December 5, 1994
ASIA INTERNATIONAL BUILDER CORPORATION and BROWN &
ROOT
INTERNATIONAL,
INC., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, BIENVENIDO M.
CADALIN, ROLANDO M. AMUL, DONATO B. EVANGELISTA, ROMEO
PATAG, RIZALINO REYES, IGNACIO DE VERA, SOLOMON B.
REYES, JOSE M. ABAN, EMIGDIO N. ABARQUEZ, ANTONIO
ACUPAN, ROMEO ACUPAN, BENJAMIN ALEJANDRE, WILFREDO D.
ALIGADO, MARTIN AMISTAD, JR., ROLANDO B. AMUL, AMORSOLO
ANADING, ANTONIO T. ANGLO, VICENTE ARLITA, HERBERT AYO,
SILVERIO BALATAZO, ALFREDO BALOBO, FALCONERO BANAAG,
RAMON BARBOSA, FELIX BARCENA, FERNANDO BAS, MARIO
BATACLAN, ROBERTO S. BATICA, ENRICO BELEN, ARISTEO
BICOL, LARRY C. BICOL, PETRONILLO BISCOCHO, FELIX M.
BOBIER, DIONISIO BOBONGO, BAYANI S. BRACAMANTE, PABLITO
BUSTILLO, GUILLERMO CABEZAS, BIENVENIDO CADALIN,
RODOLFO CAGATAN, AMANTE CAILAO, IRENEO CANDOR, JOSE
CASTILLO,
MANUEL
CASTILLO,
REMAR
CASTROJERES,
REYNALDO CAYAS, ROMEO CECILIO, TEODULO CREUS, BAYANI
DAYRIT, RICARDO DAYRIT, ERNESTO T. DELA CRUZ, FRANCISCO
DE GUZMAN, ONOFRE DE RAMA, IGNACIO DE VERA, MODESTO
DIZON, REYNALDO DIZON, ANTONIO S. DOMINGUEZ, GILBERT
EBRADA, RICARDO EBRADA, ANTONIO EJERCITO, JR., EDUARTE
ERIDAO, ELADIO ESCOTOTO, JOHN ESGUERRA, EDUARDO
ESPIRITU, ERNESTO ESPIRITU, RODOLFO ESPIRITU, NESTOR M.
ESTEVA, BENJAMIN ESTRADA, VALERIO EVANGELISTA, OLIGARIO
FRANCISCO, JESUS GABAWAN, ROLANDO GARCIA, ANGEL
GUDA, PACITO HERNANDEZ, ANTONIO HILARIO, HENRY L. JACOB,
HONESTO
JARDINIANO,
ANTONIO
JOCSON,
GERARDO
LACSAMANA, EFREN U. LIRIO LORETO LONTOC, ISRAEL
LORENZO, ALEJANDRO LORINO, JOSE MABALAY, HERMIE
MARANAN, LEOVIGILDO MARCIAL, NOEL MARTINEZ, DANTE
MATREO, LUCIANO MELENDEZ, RENATO MELO, FRANCIS
MEDIODIA, JOSE C. MILANES, RAYMUNDO C. MILAY,
CRESENCIANO MIRANDA, ILDEFONSO C. MOLINA, ARMANDO B.
MONDEJAR RESURRECCION D. NAZARENO, JUAN OLINDO,
FRANCISCO R. OLIVARES, PEDRO ORBISTA, JR., RICARDO
ORDONEZ, ERNIE PANCHO, JOSE PANCHO, GORGONIO P.
PARALA, MODESTO PINPIN, JUANITO PAREA, ROMEO I. PATAG,
FRANCISCO PINPIN, LEONARDO POBLETE, JAIME POLLOS,
DOMINGO PONDALIS, EUGENIO RAMIREZ, LUCIEN M. RESPALL,
GAUDENCIO RETANAN, JR., TOMAS B. RETENER, ALVIN C. REYES,
RIZALINO REYES, SOLOMON B. REYES, VIRGILIO G. RICAZA,
RODELIO RIETA, JR., BENITO RIVERA, JR., BERNARDO J.
ROBILLOS, PABLO A. ROBLES, JOSE ROBLEZA, QUIRINO
RONQUILLO, AVELINO M. ROQUE, MENANDRO L. SABINO, PEDRO
SALGATAR, EDGARDO SALONGA, NUMERIANO SAN MATEO,
FELIZARDO DE LOS SANTOS, JR., GABRIEL SANTOS, JUANITO
SANTOS, PAQUITO SOLANTE, CONRADO A. SOLIS, JR., RODOLFO
SULTAN, ISAIAS TALACTAC, WILLIAM TARUC, MENANDRO
TEMPROSA, BIENVENIDO S. TOLENTINO, BENEDICTO TORRES,
MAXIMIANO TORRES, FRANCISCO G. TRIAS, SERGIO A.
URSOLINO, ROGELIO VALDEZ, LEGORIO E. VERGARA, DELFIN
VICTORIA,
GILBERT
VICTORIA,
HERNANE
VICTORIANO,
FRANCISCO VILLAFLORES, DOMINGO VILLAHERMOSA, ROLANDO
VILLALOBOS, ANTONIO VILLAUZ, DANILO VILLANUEVA, ROGELIO
VILLANUEVA,
ANGEL
VILLARBA,
JUANITO
VILLARINO,
FRANCISCO ZARA, ROGELIO AALAGOS, NICANOR B. ABAD,
ANDRES ABANES, REYNALDO ABANES, EDUARDO ABANTE, JOSE
ABARRO, JOSEFINO ABARRO, CELSO S. ABELANIO, HERMINIO
ABELLA, MIGUEL ABESTANO, RODRIGO G. ABUBO, JOSE B.
ABUSTAN, DANTE ACERES, REYNALDO S. ACOJIDO, LEOWILIN
ACTA, EUGENIO C. ACUEZA, EDUARDO ACUPAN, REYNALDO
ACUPAN, SOLANO ACUPAN, MANUEL P. ADANA, FLORENTINO R.
AGNE, QUITERIO R. AGUDO, MANUEL P. AGUINALDO, DANTE
AGUIRRE, HERMINIO AGUIRRE, GONZALO ALBERTO, JR.,
CONRADO ALCANTARA, LAMBERTO Q. ALCANTARA, MARIANITO
J. ALCANTARA, BENCIO ALDOVER, EULALIO V. ALEJANDRO,
BENJAMIN ALEJANDRO, EDUARDO L. ALEJANDRO, MAXIMINO
ALEJANDRO, ALBERTO ALMENAR, ARNALDO ALONZO, AMADO

ALORIA, CAMILO ALVAREZ, MANUEL C. ALVAREZ, BENJAMIN R.
AMBROCIO, CARLOS AMORES, BERNARD P. ANCHETA, TIMOTEO
O. ANCHETA, JEOFREY ANI, ELINO P. ANTILLON, ARMANDRO B.
ANTIPONO, LARRY T. ANTONIO, ANTONIO APILADO, ARTURO P.
APILADO, FRANCISCO APOLINARIO, BARTOLOME M. AQUINO,
ISIDRO AQUINO, PASTOR AQUINO, ROSENDO M. AQUINO,
ROBERTO ARANGORIN, BENJAMIN O. ARATEA, ARTURO V.
ARAULLO, PRUDENCIO ARAULLO, ALEXANDER ARCAIRA,
FRANCISCO ARCIAGA, JOSE AREVALO, JUANTO AREVALO,
RAMON AREVALO, RODOLFO AREVALO, EULALIO ARGUELLES,
WILFREDO P. ARICA, JOSE M. ADESILLO, ANTONIO ASUNCION,
ARTEMIO M. ASUNCION, EDGARDO ASUNCION, REXY M.
ASUNCION, VICENTE AURELIO, ANGEL AUSTRIA, RICARDO P.
AVERILLA, JR., VIRGILIO AVILA, BARTOLOME AXALAN, ALFREDO
BABILONIA, FELIMON BACAL, JOSE L. BACANI, ROMULO R.
BALBIERAN,
VICENTE
BALBIERAN,
RODOLFO
BALITBIT,
TEODORO Y. BALOBO, DANILO O. BARBA, BERNARDO BARRO,
JUAN A. BASILAN, CEFERINO BATITIS, VIVENCIO C. BAUAN,
GAUDENCIO S. BAUTISTA, LEONARDO BAUTISTA, JOSE D.
BAUTISTA, ROSTICO BAUTISTA, RUPERTO B. BAUTISTA,
TEODORO S. BAUTISTA, VIRGILIO BAUTISTA, JESUS R. BAYA,
WINIEFREDO BAYACAL, WINIEFREDO BEBIT, BEN G. BELIR, ERIC
B. BELTRAN, EMELIANO BENALES, JR., RAUL BENITEZ,
PERFECTO BENSAN, IRENEO BERGONIO, ISABELO BERMUDEZ,
ROLANDO I. BERMUDEZ, DANILO BERON, BENJAMIN BERSAMIN,
ANGELITO BICOL, ANSELMO BICOL, CELESTINO BICOL, JR.,
FRANCISCO BICOL, ROGELIO BICOL, ROMULO L. BICOL,
ROGELIO BILLIONES, TEOFILO N. BITO, FERNANDO BLANCO,
AUGUSTO BONDOC, DOMINGO BONDOC, PEPE S. BOOC, JAMES
R. BORJA, WILFREDO BRACEROS, ANGELES C. BRECINO,
EURECLYDON G. BRIONES, AMADO BRUGE, PABLITO BUDILLO,
ARCHIMEDES
BUENAVENTURA,
BASILIO
BUENAVENTURA,
GUILLERMO
BUENCONSEJO,
ALEXANDER
BUSTAMANTE,
VIRGILIO BUTIONG, JR., HONESTO P. CABALLA, DELFIN
CABALLERO, BENEDICTO CABANIGAN, MOISES CABATAY,
HERMANELI CABRERA, PEDRO CAGATAN, JOVEN C. CAGAYAT,
ROGELIO L. CALAGOS, REYNALDO V. CALDEJON, OSCAR C.
CALDERON, NESTOR D. CALLEJA, RENATO R. CALMA, NELSON T.
CAMACHO, SANTOS T. CAMACHO, ROBERTO CAMANA,
FLORANTE C. CAMANAG EDGARDO M. CANDA, SEVERINO
CANTOS, EPIFANIO A. CAPONPON, ELIAS D. CARILLO, JR.,

ARMANDO CARREON, MENANDRO M. CASTAEDA, BENIGNO A.
CASTILLO, CORNELIO L. CASTILLO, JOSEPH B. CASTILLO,
ANSELMO CASTILLO, JOAQUIN CASTILLO, PABLO L. CASTILLO,
ROMEO P. CASTILLO, SESINANDO CATIBOG, DANILO CASTRO,
PRUDENCIO A. CASTRO, RAMO CASTRO, JR., ROMEO A. DE
CASTRO, JAIME B. CATLI, DURANA D. CEFERINO, RODOLFO B.
CELIS, HERMINIGILDO CEREZO, VICTORIANO CELESTINO,
BENJAMIN CHAN, ANTONIO C. CHUA, VIVENCIO B. CIABAL,
RODRIGO CLARETE, AUGUSTO COLOMA, TURIANO CONCEPCION,
TERESITO CONSTANTINO, ARMANDO CORALES, RENATO C.
CORCUERA, APOLINAR CORONADO, ABELARDO CORONEL,
FELIX CORONEL, JR., LEONARDO CORPUZ, JESUS M. CORRALES,
CESAR CORTEMPRATO, FRANCISCO O. CORVERA, FRANCISCO
COSTALES, SR., CELEDONIO CREDITO, ALBERTO A. CREUS,
ANACLETO V. CRUZ, DOMINGO DELA CRUZ, AMELIANO DELA
CRUZ, JR., PANCHITO CRUZ, REYNALDO B. DELA CRUZ,
ROBERTO P. CRUZ, TEODORO S. CRUZ, ZOSIMO DELA CRUZ,
DIONISIO A. CUARESMA, FELIMON CUIZON, FERMIN DAGONDON,
RICHARD
DAGUINSIN,
CRISANTO
A.
DATAY,
NICASIO
DANTINGUINOO, JOSE DATOON, EDUARDO DAVID, ENRICO T.
DAVID, FAVIO DAVID, VICTORIANO S. DAVID, EDGARDO N.
DAYACAP, JOSELITO T. DELOSO, CELERINO DE GUZMAN,
ROMULO DE GUZMAN, LIBERATO DE GUZMAN, JOSE DE LEON,
JOSELITO L. DE LUMBAN, NAPOLEON S. DE LUNA, RICARDO DE
RAMA, GENEROSO DEL ROSARIO, ALBERTO DELA CRUZ, JOSE
DELA CRUZ, LEONARDO DELOS REYES, ERNESTO F. DIATA,
EDUARDO A. DIAZ, FELIX DIAZ, MELCHOR DIAZ, NICANOR S. DIAZ,
GERARDO C. DIGA, CLEMENTE DIMATULAC, ROLANDO DIONISIO,
PHILIPP G. DISMAYA, BENJAMIN DOCTOLERO, ALBERTO STO.
DOMINGO, BENJAMIN E. DOZA, BENJAMIN DUPA, DANILO C.
DURAN, GREGORIO D. DURAN, RENATO A. EDUARTE,
GODOFREDO E. EISMA, ARDON B. ELLO, UBED B. ELLO,
JOSEFINO ENANO, REYNALDO ENCARNACION, EDGARDO
ENGUANCIO, ELIAS EQUIPANO, FELIZARDO ESCARMOSA,
MIGUEL ESCARMOSA, ARMANDO ESCOBAR, ROMEO T. ESCUYOS,
ANGELITO ESPIRITU, EDUARDO S. ESPIRITU, REYNALDO
ESPIRITU, ROLANDO ESPIRITU, JULIAN ESPREGANTE, IGMIDIO
ESTANISLAO, ERNESTO M. ESTEBAN, MELANIO R. ESTRO,
ERNESTO M. ESTEVA, CONRADO ESTUAR, CLYDE ESTUYE,
ELISEO FAJARDO, PORFIRIO FALQUEZA, WILFREDO P. FAUSTINO,
EMILIO E. FERNANDEZ, ARTEMIO FERRER, MISAEL M.

FIGURACION, ARMANDO F. FLORES, BENJAMIN FLORES,
EDGARDO C. FLORES, BUENAVENTURA FRANCISCO, MANUEL S.
FRANCISCO, ROLANDO FRANCISCO, VALERIANO FRANCISCO,
RODOLFO GABAWAN, ESMERALDO GAHUTAN, CESAR C.
GALANG, SANTIAGO N. GALOSO, GABRIEL GAMBOA, BERNARDO
GANDAMON, JUAN GANZON, ANDRES GARCIA, JR., ARMANDO M.
GARCIA, EUGENIO GARCIA, MARCELO L. GARCIA, PATRICIO L.
GARCIA, JR., PONCIANO G. GARCIA, PONCIANO G. GARCIA, JR.,
RAFAEL P. GARCIA, ROBERTO S. GARCIA, OSIAS G. GAROFIL,
RAYMUNDO C. GARON, ROLANDO G. GATELA, AVELINO GAYETA,
RAYMUNDO GERON, PLACIDO GONZALES, RUPERTO H.
GONZALES, ROGELIO D. GUANIO, MARTIN V. GUERRERO, JR.,
ALEXIS GUNO, RICARDO L. GUNO, FRANCISCO GUPIT, DENNIS J.
GUTIERREZ, IGNACIO B. GUTIERREZ, ANGELITO DE GUZMAN, JR.,
CESAR H. HABANA, RAUL G. HERNANDEZ, REYNALDO
HERNANDEZ, JOVENIANO D. HILADO, JUSTO HILAPO, ROSTITO
HINAHON, FELICISIMO HINGADA, EDUARDO HIPOLITO, RAUL L.
IGNACIO, MANUEL L. ILAGAN, RENATO L. ILAGAN, CONRADO A.
INSIONG, GRACIANO G. ISLA, ARNEL L. JACOB, OSCAR J.
JAPITENGA, CIRILO HICBAN, MAXIMIANO HONRADES, GENEROSO
IGNACIO, FELIPE ILAGAN, EXPEDITO N. JACOB, MARIO JASMIN,
BIENVENIDO JAVIER, ROMEO M. JAVIER, PRIMO DE JESUS,
REYNALDO DE JESUS, CARLOS A. JIMENEZ, DANILO E. JIMENEZ,
PEDRO C. JOAQUIN, FELIPE W. JOCSON, FELINO M. JOCSON,
PEDRO N. JOCSON, VALENTINO S. JOCSON, PEDRO B. JOLOYA,
ESTEBAN P. JOSE, JR., RAUL JOSE, RICARDO SAN JOSE,
GERTRUDO KABIGTING, EDUARDO S. KOLIMLIM, SR., LAURO J.
LABAY, EMMANUEL C. LABELLA, EDGARDO B. LACERONA, JOSE
B. LACSON, MARIO J. LADINES, RUFINO LAGAC, RODRIGO
LAGANAPAN, EFREN M. LAMADRID, GUADENCIO LATANAN,
VIRGILIO LATAYAN, EMILIANO LATOJA, WENCESLAO LAUREL,
ALFREDO LAXAMANA, DANIEL R. LAZARO, ANTONIO C. LEANO,
ARTURO S. LEGASPI, BENITO DE LEMOS, JR., PEDRO G. DE LEON,
MANOLITO C. LILOC, GERARDO LIMUACO, ERNESTO S. LISING,
RENATO LISING, WILFREDO S. LISING, CRISPULO LONTOC,
PEDRO M. LOPERA, ROGELIO LOPERA, CARLITO M. LOPEZ,
CLODY LOPEZ, GARLITO LOPEZ, GEORGE F. LOPEZ, VIRGILIO M.
LOPEZ, BERNARDITO G. LOREJA, DOMINGO B. LORICO, DOMINGO
LOYOLA, DANTE LUAGE, ANTONIO M. LUALHATI, EMMANUEL
LUALHATI, JR., LEONIDEZ C. LUALHATI, SEBASTIAN LUALHATI,
FRANCISCO LUBAT, ARMANDO LUCERO, JOSELITO L. DE

LUMBAN, THOMAS VICENTE O. LUNA, NOLI MACALADLAD,
ALFREDO MACALINO, RICARDO MACALINO, ARTURO V.
MACARAIG, ERNESTO V. MACARAIG, RODOLFO V. MACARAIG,
BENJAMIN MACATANGAY, HERMOGENES MACATANGAY, RODEL
MACATANGAY,
ROMULO
MACATANGAY,
OSIAS
Q.
MADLANGBAYAN, NICOLAS P. MADRID, EDELBERTO G. MAGAT,
EFREN C. MAGBANUA, BENJAMIN MAGBUHAT, ALFREDO C.
MAGCALENG, ANTONIO MAGNAYE, ALFONSO MAGPANTAY,
RICARDO C. MAGPANTAY, SIMEON M. MAGPANTAY, ARMANDO M.
MAGSINO, MACARIO S. MAGSINO, ANTONIO MAGTIBAY, VICTOR V.
MAGTIBAY, GERONIMO MAHILUM, MANUEL MALONZO, RICARDO
MAMADIS, RODOLFO MANA, BERNARDO A. MANALILI, MANUEL
MANALILI, ANGELO MANALO, AGUILES L. MANALO, LEOPOLDO
MANGAHAS, BAYANI MANIGBAS, ROLANDO C. MANIMTIM, DANIEL
MANONSON, ERNESTO F. MANUEL, EDUARDO MANZANO,
RICARDO N. MAPA, RAMON MAPILE, ROBERTO C. MARANA,
NEMESIO MARASIGAN, WENCESLAO MARASIGAN, LEONARDO
MARCELO, HENRY F. MARIANO, JOEL MARIDABLE, SANTOS E.
MARINO, NARCISO A. MARQUEZ, RICARDO MARTINEZ, DIEGO
MASICAMPO,
AURELIO
MATABERDE,
RENATO
MATILLA,
VICTORIANO MATILLA, VIRGILIO MEDEL, LOLITO M. MELECIO,
BENIGNO MELENDEZ, RENER J. MEMIJE, REYNALDO F. MEMIJE,
RODEL MEMIJE, AVELINO MENDOZA, JR., CLARO MENDOZA,
TIMOTEO MENDOZA, GREGORIO MERCADO, ERNANI DELA
MERCED, RICARDO MERCENA, NEMESIO METRELLO, RODEL
MEMIJE, GASPAR MINIMO, BENJAMIN MIRANDA, FELIXBERTO D.
MISA, CLAUDIO A. MODESTO, JR., OSCAR MONDEDO, GENEROSO
MONTON, RENATO MORADA, RICARDO MORADA, RODOLFO
MORADA, ROLANDO M. MORALES, FEDERICO M. MORENO,
VICTORINO A. MORTEL, JR., ESPIRITU A. MUNOZ, IGNACIO
MUNOZ, ILDEFONSO MUNOZ, ROGELIO MUNOZ, ERNESTO
NAPALAN, MARCELO A. NARCIZO, REYNALDO NATALIA,
FERNANDO C. NAVARETTE, PACIFICO D. NAVARRO, FLORANTE
NAZARENO, RIZAL B. NAZARIO, JOSUE NEGRITE, ALFREDO
NEPUMUCENO, HERBERT G. NG, FLORENCIO NICOLAS, ERNESTO
C. NINON, AVELINO NUQUI, NEMESIO D. OBA, DANILO OCAMPO,
EDGARDO OCAMPO, RODRIGO E. OCAMPO, ANTONIO B.
OCCIANO, REYNALDO P. OCSON, BENJAMIN ODESA, ANGEL
OLASO, FRANCISCO OLIGARIO, ZOSIMO OLIMBO, BENJAMIN V.
ORALLO, ROMEO S. ORIGINES, DANILO R. ORTANEZ, WILFREDO
OSIAS, VIRGILIO PA-A, DAVID PAALAN, JESUS N. PACHECO,

ALFONSO L. PADILLA, DANILO PAGSANJAN, NUMERIANO
PAGSISIHAN, RICARDO T. PAGUIO, EMILIO PAKINGAN, LEANDRO
PALABRICA, QUINCIANO PALO, JOSE PAMATIAN, GONZALO PAN,
PORFIRIO PAN, BIENVENIDO PANGAN, ERNESTO PANGAN,
FRANCISCO V. PASIA, EDILBERTO PASIMIO, JR., JOSE V. PASION,
ANGELITO M. PENA, DIONISIO PENDRAS, HERMINIO PERALTA,
REYNALDO M. PERALTA, ANTONIO PEREZ, ANTOLIANO E. PEREZ,
JUAN PEREZ, LEON PEREZ, ROMEO E. PEREZ, ROMULO PEREZ,
WILLIAM PEREZ, FERNANDO G. PERINO, FLORENTINO DEL PILAR,
DELMAR F. PINEDA, SALVADOR PINEDA, ELIZALDE PINPIN,
WILFREDO PINPIN, ARTURO POBLETE, DOMINADOR R. PRIELA,
BUENAVENTURA PRUDENTE, CARMELITO PRUDENTE, DANTE
PUEYO, REYNALDO Q. PUEYO, RODOLFO O. PULIDO, ALEJANDRO
PUNIO, FEDERICO QUIMAN, ALFREDO L. QUINTO, ROMEO
QUINTOS, EDUARDO W. RACABO, RICARDO C. DE RAMA,
RICARDO L. DE RAMA, ROLANDO DE RAMA, FERNANDO A.
RAMIREZ, LITO S. RAMIREZ, RICARDO G. RAMIREZ, RODOLFO V.
RAMIREZ, ALBERTO RAMOS, ANSELMO C. RAMOS, TOBIAS
RAMOS, WILLARFREDO RAYMUNDO, REYNALDO RAQUEDAN,
MANUEL F. RAVELAS, WILFREDO D. RAYMUNDO, ERNESTO E.
RECOLASO, ALBERTO REDAZA, ARTHUR REJUSO, TORIBIO M.
RELLAMA, JAIME RELLOSA, EUGENIO A. REMOQUILLO,
GERARDO RENTOZA, REDENTOR C. REY, ALFREDO S. REYES,
AMABLE S. REYES, BENEDICTO R. REYES, GREGORIO B. REYES,
JOSE A. REYES, JOSE C. REYES, ROMULO M. REYES, SERGIO
REYES, ERNESTO F. RICO, FERNANDO M. RICO, EMMANUEL
RIETA, RICARDO RIETA, LEO B. ROBLES, RUBEN ROBLES,
RODOLFO ROBLEZA, RODRIGO ROBLEZA, EDUARDO ROCABO,
ANTONIO R. RODRIGUEZ, BERNARDO RODRIGUEZ, ELIGIO
RODRIGUEZ, ALMONTE ROMEO, ELIAS RONQUILLO, ELISE
RONQUILLO, LUIS VAL B. RONQUILLO, REYNOSO P. RONQUILLO,
RODOLFO RONQUILLO, ANGEL ROSALES, RAMON ROSALES,
ALBERTO DEL ROSARIO, GENEROSO DEL ROSARIO, TEODORICO
DEL ROSARIO, VIRGILIO L. ROSARIO, CARLITO SALVADOR, JOSE
SAMPARADA, ERNESTO SAN PEDRO, ADRIANO V. SANCHA,
GERONIMO M. SANCHA, ARTEMIO B. SANCHEZ, NICASIO
SANCHEZ, APOLONIO P. SANTIAGO, JOSELITO S. SANTIAGO,
SERGIO SANTIAGO, EDILBERTO C. SANTOS, EFREN S. SANTOS,
RENATO D. SANTOS, MIGUEL SAPUYOT, ALEX S. SERQUINA,
DOMINADOR P. SERRA, ROMEO SIDRO, AMADO M. SILANG,
FAUSTINO D. SILANG, RODOLFO B. DE SILOS, ANICETO G. SILVA,

EDGARDO M. SILVA, ROLANDO C. SILVERTO, ARTHUR B.
SIMBAHON, DOMINGO SOLANO, JOSELITO C. SOLANTE, CARLITO
SOLIS, CONRADO SOLIS, III, EDGARDO SOLIS, ERNESTO SOLIS,
ISAGANI M. SOLIS, EDUARDO L. SOTTO, ERNESTO G. STA. MARIA,
VICENTE G. STELLA, FELIMON SUPANG, PETER TANGUINOO,
MAXIMINO TALIBSAO, FELICISMO P. TALUSIK, FERMIN TARUC, JR.,
LEVY S. TEMPLO, RODOLFO S. TIAMSON, LEONILO TIPOSO,
ARNEL TOLENTINO, MARIO M. TOLENTINO, FELIPE TORRALBA,
JOVITO V. TORRES, LEONARDO DE TORRES, GAVINO U. TUAZON,
AUGUSTO B. TUNGUIA, FRANCISCO UMALI, SIMPLICIO UNIDA,
WILFREDO V. UNTALAN, ANTONIO VALDERAMA, RAMON
VALDERAMA, NILO VALENCIANO, EDGARDO C. VASQUEZ,
ELPIDIO VELASQUEZ, NESTOR DE VERA, WILFREDO D. VERA,
BIENVENIDO VERGARA, ALFREDO VERGARA, RAMON R.
VERZOSA, FELICITO P. VICMUNDO, ALFREDO VICTORIANO,
TEOFILO P. VIDALLO, SABINO N. VIERNEZ, JESUS J. VILLA, JOVEN
VILLABLANCO,
EDGARDO
G.
VILLAFLORES,
CEFERINO
VILLAGERA, ALEX VILLAHERMOZA, DANILO A. VILLANUEVA,
ELITO VILLANUEVA, LEONARDO M. VILLANUEVA, MANUEL R.
VILLANUEVA, NEPTHALI VILLAR, JOSE V. VILLAREAL, FELICISIMO
VILLARINO,
RAFAEL
VILLAROMAN,
CARLOS
VILLENA,
FERDINAND VIVO, ROBERTO YABUT, VICENTE YNGENTE, AND
ORO C. ZUNIGA, respondents.
Gerardo A. Del Mundo and Associates for petitioners.
Romulo, Mabanta, Sayoc, Buenaventura, De los Angeles Law Offices for
BRII/AIBC.
Florante M. De Castro for private respondents in 105029-32.
QUIASON, J.:
The petition in G.R. No. 104776, entitled "Bienvenido M. Cadalin, et. al. v.
Philippine Overseas Employment Administration's Administrator, et. al.,"
was filed under Rule 65 of the Revised Rules of Court:
(1) to modify the Resolution dated September 2, 1991 of

the National Labor Relations Commission (NLRC) in
POEA
Cases
Nos.
L-84-06-555, L-85-10-777, L-85-10-779 and L-86-05-460;
(2) to render a new decision: (i) declaring private
respondents as in default; (ii) declaring the said labor
cases as a class suit; (iii) ordering Asia International
Builders Corporation (AIBC) and Brown and Root
International Inc. (BRII) to pay the claims of the 1,767
claimants in said labor cases; (iv) declaring Atty. Florante
M. de Castro guilty of forum-shopping; and (v) dismissing
POEA Case No. L-86-05-460; and
(3) to reverse the Resolution dated March 24, 1992 of
NLRC, denying the motion for reconsideration of its
Resolution dated September 2, 1991 (Rollo, pp. 8-288).
(1) to reverse the Resolution dated September 2, 1991 of

NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L85-10-779
and
L-86-05-460, insofar as it granted the claims of 149
claimants; and
NLRC insofar as it denied the motions for reconsideration
of AIBC and BRII (Rollo, pp. 2-59; 61-230).
The Resolution dated September 2, 1991 of NLRC, which modified the
decision of POEA in four labor cases: (1) awarded monetary benefits only
to 149 claimants and (2) directed Labor Arbiter Fatima J. Franco to
conduct hearings and to receive evidence on the claims dismissed by the
POEA for lack of substantial evidence or proof of employment.
Consolidation of Cases
The petition in G.R. Nos. 104911-14, entitled "Bienvenido M. Cadalin, et.

al., v. Hon. National Labor Relations Commission, et. al.," was filed under
Rule 65 of the Revised Rules of Court:
(1) to reverse the Resolution dated September 2, 1991 of
NLRC in POEA Cases Nos. L-84-06-555, L-85-10-777, L85-10-799
and
L-86-05-460 insofar as it: (i) applied the three-year
prescriptive period under the Labor Code of the
Philippines instead of the ten-year prescriptive period
under the Civil Code of the Philippines; and (ii) denied the
"three-hour daily average" formula in the computation of
petitioners' overtime pay; and
NLRC, denying the motion for reconsideration of its
Resolution dated September 2, 1991 (Rollo, pp. 8-25; 26220).
The petition in G.R. Nos. 105029-32, entitled "Asia International Builders
Corporation, et. al., v. National Labor Relations Commission, et. al." was
filed under Rule 65 of the Revised Rules of Court:
G.R. Nos. 104776 and 105029-32 were originally raffled to the Third
Division while G.R. Nos. 104911-14 were raffled to the Second Division.
In the Resolution dated July 26, 1993, the Second Division referred G.R.
Nos. 104911-14 to the Third Division (G.R. Nos. 104911-14, Rollo, p.
895).
In the Resolution dated September 29, 1993, the Third Division granted
the motion filed in G.R. Nos. 104911-14 for the consolidation of said
cases with G.R. Nos. 104776 and 105029-32, which were assigned to
the First Division (G.R. Nos. 104911-14, Rollo, pp. 986-1,107; G.R. Nos.
105029-30, Rollo, pp. 369-377, 426-432). In the Resolution dated
October 27, 1993, the First Division granted the motion to consolidate
G.R. Nos. 104911-14 with G.R. No. 104776 (G.R. Nos. 104911-14, Rollo,
p. 1109; G.R. Nos. 105029-32, Rollo, p. 1562).
I
On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato
B. Evangelista, in their own behalf and on behalf of 728 other overseas
contract workers (OCWs) instituted a class suit by filing an "Amended
Complaint" with the Philippine Overseas Employment Administration
(POEA) for money claims arising from their recruitment by AIBC and
employment by BRII (POEA Case No. L-84-06-555). The claimants were

represented by Atty. Gerardo del Mundo.
BRII is a foreign corporation with headquarters in Houston, Texas, and is
engaged in construction; while AIBC is a domestic corporation licensed
as a service contractor to recruit, mobilize and deploy Filipino workers for
overseas employment on behalf of its foreign principals.
The amended complaint principally sought the payment of the unexpired
portion of the employment contracts, which was terminated prematurely,
and secondarily, the payment of the interest of the earnings of the Travel
and Reserved Fund, interest on all the unpaid benefits; area wage and
salary differential pay; fringe benefits; refund of SSS and premium not
remitted to the SSS; refund of withholding tax not remitted to the BIR;
penalties for committing prohibited practices; as well as the suspension
of the license of AIBC and the accreditation of BRII (G.R. No.
104776, Rollo, pp. 13-14).
At the hearing on June 25, 1984, AIBC was furnished a copy of the
complaint and was given, together with BRII, up to July 5, 1984 to file its
answer.
On July 3, 1984, POEA Administrator, upon motion of AIBC and BRII,
ordered the claimants to file a bill of particulars within ten days from
receipt of the order and the movants to file their answers within ten days
from receipt of the bill of particulars. The POEA Administrator also
scheduled a pre-trial conference on July 25, 1984.
On July 13, 1984, the claimants submitted their "Compliance and
Manifestation." On July 23, 1984, AIBC filed a "Motion to Strike Out of the
Records", the "Complaint" and the "Compliance and Manifestation." On
July 25, 1984, the claimants filed their "Rejoinder and Comments,"
averring, among other matters, the failure of AIBC and BRII to file their
answers and to attend the pre-trial conference on July 25, 1984. The
claimants alleged that AIBC and BRII had waived their right to present
evidence and had defaulted by failing to file their answers and to attend
the pre-trial conference.
On October 2, 1984, the POEA Administrator denied the "Motion to Strike
Out of the Records" filed by AIBC but required the claimants to correct
the deficiencies in the complaint pointed out in the order.
On October 10, 1984, claimants asked for time within which to comply
with the Order of October 2, 1984 and filed an "Urgent Manifestation,"
praying that the POEA Administrator direct the parties to submit
simultaneously their position papers, after which the case should be
deemed submitted for decision. On the same day, Atty. Florante de
Castro filed another complaint for the same money claims and benefits in
behalf of several claimants, some of whom were also claimants in POEA
Case No. L-84-06-555 (POEA Case No. 85-10-779).
On October 19, 1984, claimants filed their "Compliance" with the Order
dated October 2, 1984 and an "Urgent Manifestation," praying that the
POEA direct the parties to submit simultaneously their position papers
after which the case would be deemed submitted for decision. On the
same day, AIBC asked for time to file its comment on the "Compliance"
and "Urgent Manifestation" of claimants. On November 6, 1984, it filed a
second motion for extension of time to file the comment.
On November 8, 1984, the POEA Administrator informed AIBC that its
motion for extension of time was granted.
On November 14, 1984, claimants filed an opposition to the motions for
extension of time and asked that AIBC and BRII be declared in default for
failure to file their answers.
On November 20, 1984, AIBC and BRII filed a "Comment" praying,
among other reliefs, that claimants should be ordered to amend their
complaint.
On December 27, 1984, the POEA Administrator issued an order
directing AIBC and BRII to file their answers within ten days from receipt
of the order.
On February 27, 1985, AIBC and BRII appealed to NLRC seeking the
reversal of the said order of the POEA Administrator. Claimants opposed
the appeal, claiming that it was dilatory and praying that AIBC and BRII
be declared in default.
On April 2, 1985, the original claimants filed an "Amended Complaint
and/or Position Paper" dated March 24, 1985, adding new demands:
namely, the payment of overtime pay, extra night work pay, annual leave
differential pay, leave indemnity pay, retirement and savings benefits and
their share of forfeitures (G.R. No. 104776, Rollo, pp. 14-16). On April 15,
1985, the POEA Administrator directed AIBC to file its answer to the
amended complaint (G.R. No. 104776, Rollo, p. 20).
On May 28, 1985, claimants filed an "Urgent Motion for Summary
Judgment." On the same day, the POEA issued an order directing AIBC
and BRII to file their answers to the "Amended Complaint," otherwise,
they would be deemed to have waived their right to present evidence and
the case would be resolved on the basis of complainant's evidence.
On June 5, 1985, AIBC countered with a "Motion to Dismiss as Improper
Class Suit and Motion for Bill of Particulars Re: Amended Complaint
dated March 24, 1985." Claimants opposed the motions.
On September 4, 1985, the POEA Administrator reiterated his directive to
AIBC and BRII to file their answers in POEA Case No. L-84-06-555.
On September 18, 1985, AIBC filed its second appeal to the NLRC,
together with a petition for the issuance of a writ of injunction. On
September 19, 1985, NLRC enjoined the POEA Administrator from
hearing the labor cases and suspended the period for the filing of the
answers of AIBC and BRII.
On September 19, 1985, claimants asked the POEA Administrator to
include additional claimants in the case and to investigate alleged
wrongdoings of BRII, AIBC and their respective lawyers.
On October 10, 1985, Romeo Patag and two co-claimants filed a
complaint (POEA Case No. L-85-10-777) against AIBC and BRII with the
POEA, demanding monetary claims similar to those subject of POEA
Case No. L-84-06-555. In the same month, Solomon Reyes also filed his
own complaint (POEA Case No. L-85-10-779) against AIBC and BRII.
On October 17, 1985, the law firm of Florante M. de Castro & Associates
asked for the substitution of the original counsel of record and the
cancellation of the special powers of attorney given the original counsel.
On December 12, 1985, Atty. Del Mundo filed in NLRC a notice of the
claim to enforce attorney's lien.
On May 29, 1986, Atty. De Castro filed a complaint for money claims
(POEA Case No. 86-05-460) in behalf of 11 claimants including
Bienvenido Cadalin, a claimant in POEA Case No. 84-06-555.
On December 12, 1986, the NLRC dismissed the two appeals filed on
February 27, 1985 and September 18, 1985 by AIBC and BRII.
In narrating the proceedings of the labor cases before the POEA
Administrator, it is not amiss to mention that two cases were filed in the
Supreme Court by the claimants, namely G.R. No. 72132 on
September 26, 1985 and Administrative Case No. 2858 on March 18,
1986. On May 13, 1987, the Supreme Court issued a resolution in
Administrative Case No. 2858 directing the POEA Administrator to
resolve the issues raised in the motions and oppositions filed in POEA
Cases Nos. L-84-06-555 and L-86-05-460 and to decide the labor cases
with deliberate dispatch.
AIBC also filed a petition in the Supreme Court (G.R. No. 78489),
questioning the Order dated September 4, 1985 of the POEA
Administrator. Said order required BRII and AIBC to answer the amended
complaint in POEA Case No. L-84-06-555. In a resolution dated
November 9, 1987, we dismissed the petition by informing AIBC that all
its technical objections may properly be resolved in the hearings before
the POEA.
Complaints were also filed before the Ombudsman. The first was filed on
September 22, 1988 by claimant Hermie Arguelles and 18 co-claimants
against the POEA Administrator and several NLRC Commissioners. The
Ombudsman merely referred the complaint to the Secretary of Labor and
Employment with a request for the early disposition of POEA Case No. L84-06-555. The second was filed on April 28, 1989 by claimants Emigdio
P. Bautista and Rolando R. Lobeta charging AIBC and BRII for violation
of labor and social legislations. The third was filed by Jose R. Santos,
Maximino N. Talibsao and Amado B. Bruce denouncing AIBC and BRII of
violations of labor laws.
On January 13, 1987, AIBC filed a motion for reconsideration of the
NLRC Resolution dated December 12, 1986.
On January 14, 1987, AIBC reiterated before the POEA Administrator its
motion for suspension of the period for filing an answer or motion for
extension of time to file the same until the resolution of its motion for
reconsideration of the order of the NLRC dismissing the two appeals. On
April 28, 1987, NLRC en banc denied the motion for reconsideration.
At the hearing on June 19, 1987, AIBC submitted its answer to the
complaint. At the same hearing, the parties were given a period of 15
days from said date within which to submit their respective position
papers. On June 24, 1987 claimants filed their "Urgent Motion to Strike
Out Answer," alleging that the answer was filed out of time. On June 29,
1987, claimants filed their "Supplement to Urgent Manifestational Motion"
to comply with the POEA Order of June 19, 1987. On February 24, 1988,
AIBC and BRII submitted their position paper. On March 4, 1988,
claimants filed their "Ex-Parte Motion to Expunge from the Records" the
position paper of AIBC and BRII, claiming that it was filed out of time.
On September 1, 1988, the claimants represented by Atty. De Castro filed
their memorandum in POEA Case No. L-86-05-460. On September 6,
1988, AIBC and BRII submitted their Supplemental Memorandum. On
September 12, 1988, BRII filed its "Reply to Complainant's
Memorandum." On October 26, 1988, claimants submitted their "ExParte Manifestational Motion and Counter-Supplemental Motion,"
together with 446 individual contracts of employments and service
records. On October 27, 1988, AIBC and BRII filed a "Consolidated
Reply."
On April 5, 1989, AIBC and BRII submitted to NLRC their "Manifestation,"

stating among other matters that there were only 728 named claimants.
On April 20, 1989, the claimants filed their "Counter-Manifestation,"
alleging that there were 1,767 of them.
On July 27, 1989, claimants filed their "Urgent Motion for Execution" of
the Decision dated January 30, 1989 on the grounds that BRII had failed
to appeal on time and AIBC had not posted the supersedeas bond in the
amount of $824,652.44.
On December 23, 1989, claimants filed another motion to resolve the
labor cases.
On August 21, 1990, claimants filed their "Manifestational Motion,"
praying that all the 1,767 claimants be awarded their monetary claims for
failure of private respondents to file their answers within the reglamentary
period required by law.
On September 2, 1991, NLRC promulgated its Resolution, disposing as
follows:
WHEREFORE, premises considered, the Decision of the
POEA in these consolidated cases is modified to the
extent and in accordance with the following dispositions:
On January 30, 1989, the POEA Administrator rendered his decision in

POEA Case No. L-84-06-555 and the other consolidated cases, which
awarded the amount of $824,652.44 in favor of only 324 complainants.
1. The claims of the 94 complainants

identified and listed in Annex "A" hereof
are dismissed for having prescribed;
On February 10, 1989, claimants submitted their "Appeal Memorandum

For Partial Appeal" from the decision of the POEA. On the same day,
AIBC also filed its motion for reconsideration and/or appeal in addition to
the "Notice of Appeal" filed earlier on February 6, 1989 by another
counsel for AIBC.
2. Respondents AIBC and Brown & Root

are hereby ordered, jointly and severally,
to pay the 149 complainants, identified
and listed in Annex "B" hereof, the peso
equivalent, at the time of payment, of the
total amount in US dollars indicated
opposite their respective names;
On February 17, 1989, claimants filed their "Answer to Appeal," praying

for the dismissal of the appeal of AIBC and BRII.
On March 15, 1989, claimants filed their "Supplement to Complainants'
Appeal Memorandum," together with their "newly discovered evidence"
consisting of payroll records.
3. The awards given by the POEA to the

19 complainants classified and listed in
Annex "C" hereof, who appear to have
worked elsewhere than in Bahrain are

hereby set aside.
for certiorari with the Supreme Court (G.R. Nos. 120741-44). The petition
was dismissed in a resolution dated January 27, 1992.
4. All claims other than those indicated in

Annex "B", including those for overtime
work and favorably granted by the POEA,
are hereby dismissed for lack of
substantial evidence in support thereof or
are beyond the competence of this
Commission to pass upon.
Three motions for reconsideration of the September 2, 1991 Resolution

of the NLRC were filed. The first, by the claimants represented by Atty.
Del Mundo; the second, by the claimants represented by Atty. De Castro;
and the third, by AIBC and BRII.
In addition, this Commission, in the exercise of its powers

and authority under Article 218(c) of the Labor Code, as
amended by R.A. 6715, hereby directs Labor Arbiter
Fatima J. Franco of this Commission to summon parties,
conduct hearings and receive evidence, as expeditiously
as possible, and thereafter submit a written report to this
Commission (First Division) of the proceedings taken,
regarding the claims of the following:
Hence, these petitions filed by the claimants represented by Atty. Del

Mundo (G.R. No. 104776), the claimants represented by Atty. De Castro
(G.R. Nos. 104911-14) and by AIBC and BRII (G.R. Nos. 105029-32).
(a) complainants identified and listed in

Annex "D" attached and made an integral
part of this Resolution, whose claims were
dismissed by the POEA for lack of proof of
employment
in
Bahrain
(these
complainants numbering 683, are listed in
pages 13 to 23 of the decision of POEA,
subject of the appeals) and,
(b) complainants identified and listed in
Annex "E" attached and made an integral
part of this Resolution, whose awards
decreed by the POEA, to Our mind, are
not supported by substantial evidence"
(G.R. No. 104776; Rollo, pp. 113-115;
G.R. Nos. 104911-14, pp. 85-87; G.R.
Nos. 105029-31, pp. 120-122).
On November 27, 1991, claimant Amado S. Tolentino and 12
co-claimants, who were former clients of Atty. Del Mundo, filed a petition
In its Resolution dated March 24, 1992, NLRC denied all the motions for
reconsideration.
II
Compromise Agreements
Before this Court, the claimants represented by Atty. De Castro and AIBC
and BRII have submitted, from time to time, compromise agreements for
our approval and jointly moved for the dismissal of their respective
petitions insofar as the claimants-parties to the compromise agreements
were concerned (See Annex A for list of claimants who signed
quitclaims).
Thus the following manifestations that the parties had arrived at a
compromise agreement and the corresponding motions for the approval
of the agreements were filed by the parties and approved by the Court:
1) Joint Manifestation and Motion involving claimant
Emigdio Abarquez and 47 co-claimants dated September
2, 1992 (G.R. Nos. 104911-14, Rollo, pp. 263-406; G.R.
Nos.
105029-32, Rollo,
pp.
470-615);
2) Joint Manifestation and Motion involving petitioner
Bienvenido Cadalin and 82 co-petitioners dated
September 3, 1992 (G.R. No. 104776, Rollo, pp. 364507);
3) Joint Manifestation and Motion involving claimant Jose

M. Aban and 36 co-claimants dated September 17, 1992
(G.R. Nos. 105029-32, Rollo, pp. 613-722; G.R. No.
104776, Rollo, pp. 518-626; G.R. Nos. 104911-14, Rollo,
pp. 407-516);
Nos. 104911-14, Rollo, pp.

104776, Rollo, pp. 1066-1183);

Dante C. Aceres and 37 co-claimants dated September 8,
1993 (G.R. No. 104776, Rollo, pp. 1257-1375; G.R. Nos.
104911-14, Rollo, pp. 987-1105; G.R. Nos. 10502932, Rollo, pp. 1280-1397);

Valerio A. Evangelista and 4 co-claimants dated March
10, 1993 (G.R. Nos. 104911-14, Rollo, pp. 731-746; G.R.
No. 104776, Rollo, pp. 1815-1829);
7) Joint Manifestation and Motion involving claimants
Palconeri Banaag and 5 co-claimants dated March 17,
104911-14, Rollo, pp. 655-675);
10) Joint Manifestation and Motion involving petitioner

Quiterio R. Agudo and 36 co-claimants dated June 14,
1993 (G.R. Nos. 105029-32, Rollo, pp. 974-1190; G.R.
No.

Ricardo C. Dayrit and 2 co-claimants dated September 7,
1993
(G.R.
Nos.
105029-32, Rollo,
pp.
1266-1278;
G.R.
No.
104776, Rollo, pp. 1243-1254; G.R. Nos. 10491114, Rollo, pp. 972-984);

Dionisio Bobongo and 6 co-claimants dated January 15,
104911-14, Rollo, pp. 629-652);
9) Joint Manifestation and Motion involving Valerio

Evangelista and 3 co-claimants dated May 10, 1993 (G.R.
No. 104776, Rollo, pp. 1815-1829);
G.R.

Arnaldo J. Alonzo and 19 co-claimants dated July 22,
105029-32, Rollo, pp. 1193-1256; G.R. Nos. 10491114, Rollo, pp. 896-959);

Antonio T. Anglo and 17 co-claimants dated October 14,
1992
(G.R.
Nos.
105029-32, Rollo, pp. 778-843; G.R. No. 104776, Rollo,
pp. 650-713; G.R. Nos. 104911-14, Rollo, pp. 530-590);

Benjamin Ambrosio and 15 other co-claimants dated May
4, 1993 (G.R. Nos. 105029-32, Rollo, pp. 906-956; G.R.
Nos. 104911-14, Rollo, pp. 679-729; G.R. No.
104776, Rollo, pp. 1773-1814);
748-864;
14) Joint Manifestation and Motion involving Vivencio V.

Abella and 27 co-claimants dated January 10, 1994 (G.R.
Nos. 105029-32, Rollo, Vol. II);
15) Joint Manifestation and Motion involving Domingo B.
Solano and six co-claimants dated August 25, 1994 (G.R.
Nos. 105029-32; G.R. No. 104776; G.R. Nos. 10491114).
III
The facts as found by the NLRC are as follows:
We have taken painstaking efforts to sift over the more
than fifty volumes now comprising the records of these
cases. From the records, it appears that the
complainants-appellants allege that they were recruited
by respondent-appellant AIBC for its accredited foreign
principal, Brown & Root, on various dates from 1975 to

1983. They were all deployed at various projects
undertaken by Brown & Root in several countries in the
Middle East, such as Saudi Arabia, Libya, United Arab
Emirates and Bahrain, as well as in Southeast Asia, in
Indonesia and Malaysia.
Having been officially processed as overseas contract
workers by the Philippine Government, all the individual
complainants signed standard overseas employment
contracts (Records, Vols. 25-32. Hereafter, reference to
the records would be sparingly made, considering their
chaotic arrangement) with AIBC before their departure
from the Philippines. These overseas employment
contracts invariably contained the following relevant terms
and conditions.
PART B
(1)
Employment
Position
(Code) :
(2) Company Employment Status
(3) Date of Employment to
(4) Basic Working Hours Per Week

(5) Basic Working Hours Per Month
(6)
Basic
Hourly
Rate
(7) Overtime Rate Per Hour
(8)
Projected
Period
(Subject to C(1) of this [sic])
Months
Job Completion
Classification
:
Commence on :
:
:
:
:
of
Service
:
and/or
xxx xxx xxx

3. HOURS OF WORK AND COMPENSATION
a) The Employee is employed at the hourly rate and

overtime rate as set out in Part B of this Document.
b) The hours of work shall be those set forth by the
Employer, and Employer may, at his sole option, change
or adjust such hours as maybe deemed necessary from
time to time.
4. TERMINATION
a) Notwithstanding any other terms and conditions of this
agreement, the Employer may, at his sole discretion,
terminate employee's service with cause, under this
agreement at any time. If the Employer terminates the
services of the Employee under this Agreement because
of the completion or termination, or suspension of the
work on which the Employee's services were being
utilized, or because of a reduction in force due to a
decrease in scope of such work, or by change in the type
of construction of such work. The Employer will be
responsible for his return transportation to his country of
origin. Normally on the most expeditious air route,
economy class accommodation.
xxx xxx xxx
10. VACATION/SICK LEAVE BENEFITS
a) After one (1) year of continuous service and/or
satisfactory completion of contract, employee shall be
entitled to 12-days vacation leave with pay. This shall be
computed at the basic wage rate. Fractions of a year's
service will be computed on a pro-rata basis.
b) Sick leave of 15-days shall be granted to the employee
for every year of service for non-work connected injuries
or illness. If the employee failed to avail of such leave
benefits, the same shall be forfeited at the end of the year
in which said sick leave is granted.
11. BONUS
A bonus of 20% (for offshore work) of gross income will
be accrued and payable only upon satisfactory
completion of this contract.
. . . an employer may require

worker, with his consent, to work on
weekly day of rest if circumstances
require and in respect of which
additional sum equivalent to 150% of
normal wage shall be paid to him. . . .
a
his
so
an
his
12. OFFDAY PAY

The seventh day of the week shall be observed as a day
of rest with 8 hours regular pay. If work is performed on
this day, all hours work shall be paid at the premium rate.
However, this offday pay provision is applicable only
when the laws of the Host Country require payments for
rest day.
In the State of Bahrain, where some of the individual
complainants were deployed, His Majesty Isa Bin Salman
Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23
on June 16, 1976, otherwise known as the Labour Law for
the Private Sector (Records, Vol. 18). This decree took
effect on August 16, 1976. Some of the provisions of Amiri
Decree No. 23 that are relevant to the claims of the
complainants-appellants are as follows (italics supplied
only for emphasis):
Art. 79: . . . A worker shall receive
payment for each extra hour equivalent to
his wage entitlement increased by a
minimum
of
twenty-five per
centum thereof for hours worked during
the day; and by a minimum of fifty per
centum thereof for hours worked during
the night which shall be deemed to being
from seven o'clock in the evening until
seven o'clock in the morning. . . .
Art. 80: Friday shall be deemed to be a
weekly day of rest on full pay.
Art. 81: . . . When conditions of work

require the worker to work on any official
holiday, he shall be paid an additional
sum equivalent to 150% of his normal
wage.
Art. 84: Every worker who has completed
one year's continuous service with his
employer shall be entitled to leave on full
pay for a period of not less than 21 days
for each year increased to a period not
less than 28 days after five continuous
years of service.
A worker shall be entitled to such leave
upon a quantum meruit in respect of the
proportion of his service in that year.
Art. 107: A contract of employment made
for a period of indefinite duration may be
terminated by either party thereto after
giving the other party thirty days' prior
notice before such termination, in writing,
in respect of monthly paid workers and
fifteen days' notice in respect of other
workers. The party terminating a contract
without giving the required notice shall
pay to the other party compensation
equivalent to the amount of wages
payable to the worker for the period of
such notice or the unexpired portion
thereof.
Art. 111: . . . the employer concerned shall

pay to such worker, upon termination of
employment, a leaving indemnity for the
period of his employment calculated on
the basis of fifteen days' wages for each
year of the first three years of service and
of one month's wages for each year of
service thereafter. Such worker shall be
entitled to payment of leaving indemnity
upon a quantum meruit in proportion to
the period of his service completed within
a year.
All the individual complainants-appellants
have already been repatriated to the
Philippines at the time of the filing of these
cases (R.R. No. 104776, Rollo, pp. 5965).
IV
The issues raised before and resolved by the NLRC were:
First: Whether or not complainants are entitled to the
benefits provided by Amiri Decree No. 23 of Bahrain;
(a) Whether or not the complainants who
have worked in Bahrain are entitled to the
above-mentioned benefits.
(b) Whether or not Art. 44 of the same
Decree (allegedly prescribing a more
favorable treatment of alien employees)
bars complainants from enjoying its
benefits.
Second: Assuming that Amiri Decree No. 23 of Bahrain
is applicable in these cases, whether or not complainants'
claim for the benefits provided therein have prescribed.
Third: Whether or not the instant cases qualify as a

class suit.
Fourth: Whether or not the proceedings conducted by
the POEA, as well as the decision that is the subject of
these appeals, conformed with the requirements of due
process;
(a) Whether or not the respondentappellant was denied its right to due
process;
(b) Whether or not the admission of
evidence by the POEA after these cases
were submitted for decision was valid;
(c) Whether or not the POEA acquired
jurisdiction
over
Brown
&
Root
International, Inc.;
(d) Whether or not the judgment awards
are supported by substantial evidence;
(e) Whether or not the awards based on
the averages and formula presented by
the
complainants-appellants
are
supported by substantial evidence;
(f) Whether or not the POEA awarded
sums beyond what the complainantsappellants prayed for; and, if so, whether
or not these awards are valid.
Fifth: Whether or not the POEA erred in holding
respondents AIBC and Brown & Root jointly are severally
liable for the judgment awards despite the alleged finding
that the former was the employer of the complainants;
(a) Whether or not the POEA has acquired
jurisdiction over Brown & Root;
(b) Whether or not the undisputed fact that

AIBC was a licensed construction
contractor precludes a finding that Brown
& Root is liable for complainants claims.
Sixth: Whether or not the POEA Administrator's failure
to hold respondents in default constitutes a reversible
error.
Seventh: Whether or not the POEA Administrator erred
in dismissing the following claims:
a. Unexpired portion of contract;
b. Interest earnings of Travel and Reserve
Fund;
c. Retirement and Savings Plan benefits;
d. War Zone bonus or premium pay of at
least 100% of basic pay;
e. Area Differential Pay;
f. Accrued interests on all the unpaid
benefits;
g. Salary differential pay;
h. Wage differential pay;
i. Refund of SSS premiums not remitted to
SSS;
j. Refund of withholding tax not remitted to
BIR;
k. Fringe benefits under B & R's "A
Summary of Employee Benefits" (Annex
"Q" of Amended Complaint);
l. Moral and exemplary damages;

m. Attorney's fees of at least ten percent
of the judgment award;
n. Other reliefs, like suspending and/or
cancelling the license to recruit of AIBC
and the accreditation of B & R issued by
POEA;
o. Penalty for violations of Article 34
(prohibited practices), not excluding
reportorial requirements thereof.
Eighth: Whether or not the POEA Administrator erred
in not dismissing POEA Case No. (L) 86-65-460 on the
ground of multiplicity of suits (G.R. Nos. 104911-14, Rollo,
pp. 25-29, 51-55).
Anent the first issue, NLRC set aside Section 1, Rule 129 of the 1989
Revised Rules on Evidence governing the pleading and proof of a foreign
law and admitted in evidence a simple copy of the Bahrain's Amiri Decree
No. 23 of 1976 (Labour Law for the Private Sector). NLRC invoked Article
221 of the Labor Code of the Philippines, vesting on the Commission
ample discretion to use every and all reasonable means to ascertain the
facts in each case without regard to the technicalities of law or procedure.
NLRC agreed with the POEA Administrator that the Amiri Decree No. 23,
being more favorable and beneficial to the workers, should form part of
the overseas employment contract of the complainants.
NLRC, however, held that the Amiri Decree No. 23 applied only to the
claimants, who worked in Bahrain, and set aside awards of the POEA
Administrator in favor of the claimants, who worked elsewhere.
On the second issue, NLRC ruled that the prescriptive period for the filing
of the claims of the complainants was three years, as provided in Article
291 of the Labor Code of the Philippines, and not ten years as provided
in Article 1144 of the Civil Code of the Philippines nor one year as
provided in the Amiri Decree No. 23 of 1976.
On the third issue, NLRC agreed with the POEA Administrator that the
labor cases cannot be treated as a class suit for the simple reason that
not all the complainants worked in Bahrain and therefore, the subject
matter of the action, the claims arising from the Bahrain law, is not of
common or general interest to all the complainants.
nonetheless, the basis for granting said damages was not

established;
(4) that the claims for salaries corresponding to the
unexpired portion of their contract may be allowed if filed
within the three-year prescriptive period;
On the fourth issue, NLRC found at least three infractions of the cardinal
rules of administrative due process: namely, (1) the failure of the POEA
Administrator to consider the evidence presented by AIBC and BRII; (2)
some findings of fact were not supported by substantial evidence; and (3)
some of the evidence upon which the decision was based were not
disclosed to AIBC and BRII during the hearing.
On the fifth issue, NLRC sustained the ruling of the POEA Administrator
that BRII and AIBC are solidarily liable for the claims of the complainants
and held that BRII was the actual employer of the complainants, or at the
very least, the indirect employer, with AIBC as the labor contractor.
NLRC also held that jurisdiction over BRII was acquired by the POEA
Administrator through the summons served on AIBC, its local agent.
On the sixth issue, NLRC held that the POEA Administrator was correct
in denying the Motion to Declare AIBC in default.
(5) that the allegation that complainants were prematurely

repatriated prior to the expiration of their overseas
contract was not established; and
(6) that the POEA Administrator has no jurisdiction over
the complaint for the suspension or cancellation of the
AIBC's recruitment license and the cancellation of the
accreditation of BRII.
NLRC passed sub silencio the last issue, the claim that POEA Case No.
(L) 86-65-460 should have been dismissed on the ground that the
claimants in said case were also claimants in POEA Case No. (L) 84-06555. Instead of dismissing POEA Case No. (L) 86-65-460, the POEA just
resolved the corresponding claims in POEA Case No. (L) 84-06-555. In
other words, the POEA did not pass upon the same claims twice.
V
On the seventh issue, which involved other money claims not based on
the Amiri Decree No. 23, NLRC ruled:
the claims for refund of the SSS premiums and refund of
withholding taxes and the claimants should file their
claims for said refund with the appropriate government
agencies;
(2) the claimants failed to establish that they are entitled
to the claims which are not based on the overseas
employment contracts nor the Amiri Decree No. 23 of
1976;
claims for moral and exemplary damages and
G.R. No. 104776

Claimants in G.R. No. 104776 based their petition for certiorari on the
following grounds:
(1) that they were deprived by NLRC and the POEA of
their right to a speedy disposition of their cases as
guaranteed by Section 16, Article III of the 1987
Constitution. The POEA Administrator allowed private
respondents to file their answers in two years (on June
19, 1987) after the filing of the original complaint (on April
2, 1985) and NLRC, in total disregard of its own rules,
affirmed the action of the POEA Administrator;
(2) that NLRC and the POEA Administrator should have

declared AIBC and BRII in default and should have
rendered summary judgment on the basis of the
pleadings and evidence submitted by claimants;
(3) the NLRC and POEA Administrator erred in not
holding that the labor cases filed by AIBC and BRII cannot
be considered a class suit;
(4) that the prescriptive period for the filing of the claims is
ten years; and
(5) that NLRC and the POEA Administrator should have
dismissed POEA Case No. L-86-05-460, the case filed by
Atty. Florante de Castro (Rollo, pp. 31-40).
for pure money claims. Each claimant demanded

separate claims peculiar only to himself and depending
upon the particular circumstances obtaining in his case;
(4) that the prescriptive period for filing the claims is that
prescribed by Article 291 of the Labor Code of the
Philippines (three years) and not the one prescribed by
Article 1144 of the Civil Code of the Philippines (ten
years); and
(5) that they are not concerned with the issue of whether
POEA Case No. L-86-05-460 should be dismissed, this
being a private quarrel between the two labor lawyers
(Rollo, pp. 292-305).
Attorney's Lien
AIBC and BRII, commenting on the petition in G.R. No. 104776, argued:
(1) that they were not responsible for the delay in the
disposition of the labor cases, considering the great
difficulty of getting all the records of the more than 1,500
claimants, the piece-meal filing of the complaints and the
addition of hundreds of new claimants by petitioners;
(2) that considering the number of complaints and
claimants, it was impossible to prepare the answers within
the ten-day period provided in the NLRC Rules, that when
the motion to declare AIBC in default was filed on July 19,
1987, said party had already filed its answer, and that
considering the staggering amount of the claims (more
than US$50,000,000.00) and the complicated issues
raised by the parties, the ten-day rule to answer was not
fair and reasonable;
(3) that the claimants failed to refute NLRC's finding that
there was no common or general interest in the subject
matter of the controversy which was the applicability of
the Amiri Decree No. 23. Likewise, the nature of the
claims varied, some being based on salaries pertaining to
the unexpired portion of the contracts while others being
On November 12, 1992, Atty. Gerardo A. del Mundo moved to strike out
the joint manifestations and motions of AIBC and BRII dated September
2 and 11, 1992, claiming that all the claimants who entered into the
compromise agreements subject of said manifestations and motions
were his clients and that Atty. Florante M. de Castro had no right to
represent them in said agreements. He also claimed that the claimants
were paid less than the award given them by NLRC; that Atty. De Castro
collected additional attorney's fees on top of the 25% which he was
entitled to receive; and that the consent of the claimants to the
compromise agreements and quitclaims were procured by fraud (G.R.
No. 104776, Rollo, pp. 838-810). In the Resolution dated November 23,
1992, the Court denied the motion to strike out the Joint Manifestations
and Motions dated September 2 and 11, 1992 (G.R. Nos. 10491114, Rollo, pp. 608-609).
On December 14, 1992, Atty. Del Mundo filed a "Notice and Claim to
Enforce Attorney's Lien," alleging that the claimants who entered into
compromise agreements with AIBC and BRII with the assistance of Atty.
De Castro, had all signed a retainer agreement with his law firm (G.R.
No. 104776, Rollo, pp. 623-624; 838-1535).
Contempt of Court
On February 18, 1993, an omnibus motion was filed by Atty. Del Mundo
to cite Atty. De Castro and Atty. Katz Tierra for contempt of court and for
violation of Canons 1, 15 and 16 of the Code of Professional
Responsibility. The said lawyers allegedly misled this Court, by making it
appear that the claimants who entered into the compromise agreements
were represented by Atty. De Castro, when in fact they were represented
by Atty. Del Mundo (G.R. No. 104776, Rollo, pp. 1560-1614).
On September 23, 1994, Atty. Del Mundo reiterated his charges against
Atty. De Castro for unethical practices and moved for the voiding of the
quitclaims submitted by some of the claimants.
G.R. Nos. 104911-14
In G.R. Nos. 105029-32, BRII and AIBC claim that NLRC gravely abused
its discretion when it: (1) enforced the provisions of the Amiri Decree No.
23 of 1976 and not the terms of the employment contracts; (2) granted
claims for holiday, overtime and leave indemnity pay and other benefits,
on evidence admitted in contravention of petitioner's constitutional right to
due process; and (3) ordered the POEA Administrator to hold new
hearings for the 683 claimants whose claims had been dismissed for lack
of proof by the POEA Administrator or NLRC itself. Lastly, they allege that
assuming that the Amiri Decree No. 23 of 1976 was applicable, NLRC
erred when it did not apply the one-year prescription provided in said law
(Rollo, pp. 29-30).
VI
The claimants in G.R. Nos. 104911-14 based their petition

for certiorari on the grounds that NLRC gravely abused its discretion
when it: (1) applied the three-year prescriptive period under the Labor
Code of the Philippines; and (2) it denied the claimant's formula based on
an average overtime pay of three hours a day (Rollo, pp. 18-22).
G.R. No. 104776; G.R. Nos. 104911-14; G.R. Nos. 105029-32
The claimants argue that said method was proposed by BRII itself during
the negotiation for an amicable settlement of their money claims in
Bahrain as shown in the Memorandum dated April 16, 1983 of the
Ministry of Labor of Bahrain (Rollo, pp. 21-22).
To the POEA Administrator, the prescriptive period was ten years,

applying Article 1144 of the Civil Code of the Philippines. NLRC believed
otherwise, fixing the prescriptive period at three years as provided in
Article 291 of the Labor Code of the Philippines.
BRII and AIBC, in their Comment, reiterated their contention in G.R. No.
104776 that the prescriptive period in the Labor Code of the Philippines,
a special law, prevails over that provided in the Civil Code of the
Philippines, a general law.
The claimants in G.R. No. 104776 and G.R. Nos. 104911-14, invoking
different grounds, insisted that NLRC erred in ruling that the prescriptive
period applicable to the claims was three years, instead of ten years, as
found by the POEA Administrator.
As to the memorandum of the Ministry of Labor of Bahrain on the method

of computing the overtime pay, BRII and AIBC claimed that they were not
bound by what appeared therein, because such memorandum was
proposed by a subordinate Bahrain official and there was no showing that
it was approved by the Bahrain Minister of Labor. Likewise, they claimed
that the averaging method was discussed in the course of the negotiation
for the amicable settlement of the dispute and any offer made by a party
therein could not be used as an admission by him (Rollo, pp. 228-236).
The Solicitor General expressed his personal view that the prescriptive
period was one year as prescribed by the Amiri Decree No. 23 of 1976
but he deferred to the ruling of NLRC that Article 291 of the Labor Code
of the Philippines was the operative law.
G.R. Nos. 105029-32
All the petitions raise the common issue of prescription although they
disagreed as to the time that should be embraced within the prescriptive
period.
The POEA Administrator held the view that:

These money claims (under Article 291 of the Labor
Code) refer to those arising from the employer's violation
of the employee's right as provided by the Labor Code.
In the instant case, what the respondents violated are not

the rights of the workers as provided by the Labor Code,
but the provisions of the Amiri Decree No. 23 issued in
Bahrain, which ipso factoamended the worker's contracts
of employment. Respondents consciously failed to
conform to these provisions which specifically provide for
the increase of the worker's rate. It was only after June
30, 1983, four months after the brown builders brought a
suit against B & R in Bahrain for this same claim, when
respondent
AIBC's
contracts
have
undergone
amendments in Bahrain for the new hires/renewals
(Respondent's Exhibit 7).
Hence, premises considered, the applicable law of
prescription to this instant case is Article 1144 of the Civil
Code of the Philippines, which provides:
Art. 1144. The following actions may be
brought within ten years from the time the
cause of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
Thus, herein money claims of the complainants against
the respondents shall prescribe in ten years from August
16, 1976. Inasmuch as all claims were filed within the tenyear prescriptive period, no claim suffered the infirmity of
being prescribed (G.R. No. 104776, Rollo, 89-90).
In overruling the POEA Administrator, and holding that the prescriptive
period is three years as provided in Article 291 of the Labor Code of the
Philippines, the NLRC argued as follows:
The Labor Code provides that "all money claims arising
from employer-employee relations . . . shall be filed within
three years from the time the cause of action accrued;
otherwise they shall be forever barred" (Art. 291, Labor
Code, as amended). This three-year prescriptive period
shall be the one applied here and which should be

reckoned from the date of repatriation of each individual
complainant, considering the fact that the case is having
(sic) filed in this country. We do not agree with the POEA
Administrator that this three-year prescriptive period
applies only to money claims specifically recoverable
under the Philippine Labor Code. Article 291 gives no
such indication. Likewise, We can not consider
complainants' cause/s of action to have accrued from a
violation of their employment contracts. There was no
violation; the claims arise from the benefits of the law of
the country where they worked. (G.R. No. 104776, Rollo,
pp.
90-91).
Anent the applicability of the one-year prescriptive period as provided by
the Amiri Decree No. 23 of 1976, NLRC opined that the applicability of
said law was one of characterization, i.e., whether to characterize the
foreign law on prescription or statute of limitation as "substantive" or
"procedural." NLRC cited the decision in Bournias v. Atlantic Maritime
Company (220 F. 2d. 152, 2d Cir. [1955], where the issue was the
applicability of the Panama Labor Code in a case filed in the State of
New York for claims arising from said Code. In said case, the claims
would have prescribed under the Panamanian Law but not under the
Statute of Limitations of New York. The U.S. Circuit Court of Appeals held
that the Panamanian Law was procedural as it was not "specifically
intended to be substantive," hence, the prescriptive period provided in the
law of the forum should apply. The Court observed:
. . . And where, as here, we are dealing with a statute of
limitations of a foreign country, and it is not clear on the
face of the statute that its purpose was to limit the
enforceability, outside as well as within the foreign country
concerned, of the substantive rights to which the statute
pertains, we think that as a yardstick for determining
whether that was the purpose this test is the most
satisfactory one. It does not lead American courts into the
necessity of examining into the unfamiliar peculiarities
and refinements of different foreign legal systems. . .
The court further noted:
xxx xxx xxx

Applying that test here it appears to us that the libelant is
entitled to succeed, for the respondents have failed to
satisfy us that the Panamanian period of limitation in
question was specifically aimed against the particular
rights which the libelant seeks to enforce. The Panama
Labor Code is a statute having broad objectives, viz: "The
present Code regulates the relations between capital and
labor, placing them on a basis of social justice, so that,
without injuring any of the parties, there may be
guaranteed for labor the necessary conditions for a
normal life and to capital an equitable return to its
investment." In pursuance of these objectives the Code
gives laborers various rights against their employers.
Article 623 establishes the period of limitation for all such
rights, except certain ones which are enumerated in
Article 621. And there is nothing in the record to indicate
that the Panamanian legislature gave special
consideration to the impact of Article 623 upon the
particular rights sought to be enforced here, as
distinguished from the other rights to which that Article is
also applicable. Were we confronted with the question of
whether the limitation period of Article 621 (which carves
out particular rights to be governed by a shorter limitation
period) is to be regarded as "substantive" or "procedural"
under the rule of "specifity" we might have a different
case; but here on the surface of things we appear to be
dealing with a "broad," and not a "specific," statute of
limitations
(G.R.
No.
104776, Rollo,
pp.
92-94).
Claimants in G.R. Nos. 104911-14 are of the view that Article 291 of the
Labor Code of the Philippines, which was applied by NLRC, refers only to
claims "arising from the employer's violation of the employee's right as
provided by the Labor Code." They assert that their claims are based on
the violation of their employment contracts, as amended by the Amiri
Decree No. 23 of 1976 and therefore the claims may be brought within
ten years as provided by Article 1144 of the Civil Code of the Philippines
(Rollo,
G.R.
Nos.
104911-14,
pp.
18-21). To bolster their contention, they cite PALEA v. Philippine Airlines,

Inc., 70 SCRA 244 (1976).
AIBC and BRII, insisting that the actions on the claims have prescribed
under the Amiri Decree No. 23 of 1976, argue that there is in force in the
Philippines a "borrowing law," which is Section 48 of the Code of Civil
Procedure and that where such kind of law exists, it takes precedence
over the common-law conflicts rule (G.R. No. 104776, Rollo, pp. 45-46).
First to be determined is whether it is the Bahrain law on prescription of
action based on the Amiri Decree No. 23 of 1976 or a Philippine law on
prescription that shall be the governing law.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not
be actionable after the lapse of one year from the date of
the expiry of the contract. (G.R. Nos. 105029-31, Rollo, p.
226).
As a general rule, a foreign procedural law will not be applied in the
forum. Procedural matters, such as service of process, joinder of actions,
period and requisites for appeal, and so forth, are governed by the laws
of the forum. This is true even if the action is based upon a foreign
substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga,
Private International Law, 131 [1979]).
A law on prescription of actions is sui generis in Conflict of Laws in the
sense that it may be viewed either as procedural or substantive,
depending on the characterization given such a law.
Thus in Bournias v. Atlantic Maritime Company, supra, the American court
applied the statute of limitations of New York, instead of the Panamanian
law, after finding that there was no showing that the Panamanian law on
prescription was intended to be substantive. Being considered merely a
procedural law even in Panama, it has to give way to the law of the forum
on prescription of actions.
However, the characterization of a statute into a procedural or
substantive law becomes irrelevant when the country of the forum has a
"borrowing statute." Said statute has the practical effect of treating the
foreign statute of limitation as one of substance (Goodrich, Conflict of
Laws 152-153 [1938]). A "borrowing statute" directs the state of the forum
to apply the foreign statute of limitations to the pending claims based on
a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds
of "borrowing statutes," one form provides that an action barred by the
laws of the place where it accrued, will not be enforced in the forum even
though the local statute has not run against it (Goodrich and Scoles,
Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil
Procedure is of this kind. Said Section provides:
If by the laws of the state or country where the cause of
action arose, the action is barred, it is also barred in the
Philippines Islands.
Section 48 has not been repealed or amended by the Civil Code of the
Philippines. Article 2270 of said Code repealed only those provisions of
the Code of Civil Procedures as to which were inconsistent with it. There
is no provision in the Civil Code of the Philippines, which is inconsistent
with or contradictory to Section 48 of the Code of Civil Procedure (Paras,
Philippine Conflict of Laws 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48 cannot be
enforced ex proprio vigore insofar as it ordains the application in this
jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum will not enforce any foreign claim obnoxious to
the forum's public policy (Canadian Northern Railway Co. v. Eggen, 252
U.S. 553, 40 S. Ct. 402, 64 L. ed. 713 [1920]). To enforce the one-year
prescriptive period of the Amiri Decree No. 23 of 1976 as regards the
claims in question would contravene the public policy on the protection to
labor.
In the Declaration of Principles and State Policies, the 1987 Constitution
emphasized that:
The state shall promote social justice in all phases of
national development. (Sec. 10).
The state affirms labor as a primary social economic

force. It shall protect the rights of workers and promote
their welfare (Sec. 18).
In article XIII on Social Justice and Human Rights, the 1987 Constitution
provides:
Sec. 3. The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities
for all.
Having determined that the applicable law on prescription is the
Philippine law, the next question is whether the prescriptive period
governing the filing of the claims is three years, as provided by the Labor
Code or ten years, as provided by the Civil Code of the Philippines.
The claimants are of the view that the applicable provision is Article 1144
of the Civil Code of the Philippines, which provides:
The following actions must be brought within ten years
from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
NLRC, on the other hand, believes that the applicable provision is Article
291 of the Labor Code of the Philippines, which in pertinent part provides:
Money claims-all money claims arising from employeremployee relations accruing during the effectivity of this
Code shall be filed within three (3) years from the time the
cause of action accrued, otherwise they shall be forever
barred.
xxx xxx xxx
The case of Philippine Air Lines Employees Association v. Philippine Air

Lines, Inc., 70 SCRA 244 (1976) invoked by the claimants in G.R. Nos.
104911-14 is inapplicable to the cases at bench (Rollo, p. 21). The said
case involved the correct computation of overtime pay as provided in the
collective bargaining agreements and not the Eight-Hour Labor Law.
As noted by the Court: "That is precisely why petitioners did not make
any reference as to the computation for overtime work under the EightHour Labor Law (Secs. 3 and 4, CA No. 494) and instead insisted that
work computation provided in the collective bargaining agreements
between the parties be observed. Since the claim for pay differentials is
primarily anchored on the written contracts between the litigants, the tenyear prescriptive period provided by Art. 1144(1) of the New Civil Code
should govern."
employer-employee relations, which is broader in scope than claims

arising from a specific law or from the collective bargaining agreement.
The contention of the POEA Administrator, that the three-year
prescriptive period under Article 291 of the Labor Code of the Philippines
applies only to money claims specifically recoverable under said Code,
does not find support in the plain language of the provision. Neither is the
contention of the claimants in G.R. Nos. 104911-14 that said Article refers
only to claims "arising from the employer's violation of the employee's
right," as provided by the Labor Code supported by the facial reading of
the provision.
VII
G.R. No. 104776
Section 7-a of the Eight-Hour Labor Law (CA No. 444 as amended by
R.A. No. 19933) provides:
Any action to enforce any cause of action under this Act
shall be commenced within three years after the cause of
action accrued otherwise such action shall be forever
barred, . . . .
A. As to the first two grounds for the petition in G.R. No. 104776,
claimants aver: (1) that while their complaints were filed on June 6, 1984
with POEA, the case was decided only on January 30, 1989, a clear
denial of their right to a speedy disposition of the case; and (2) that NLRC
and the POEA Administrator should have declared AIBC and BRII in
default
(Rollo,
pp.
31-35).
The court further explained:

The three-year prescriptive period fixed in the Eight-Hour
Labor Law (CA No. 444 as amended) will apply, if the
claim for differentials for overtime work is solely based on
said law, and not on a collective bargaining agreement or
any other contract. In the instant case, the claim for
overtime compensation is not so much because of
Commonwealth Act No. 444, as amended but because
the claim is demandable right of the employees, by
reason of the above-mentioned collective bargaining
agreement.
Section 7-a of the Eight-Hour Labor Law provides the prescriptive period
for filing "actions to enforce any cause of action under said law." On the
other hand, Article 291 of the Labor Code of the Philippines provides the
prescriptive period for filing "money claims arising from employeremployee relations." The claims in the cases at bench all arose from the
Claimants invoke a new provision incorporated in the 1987 Constitution,

which provides:
Sec. 16. All persons shall have the right to a speedy
disposition of their cases before all judicial, quasi-judicial,
or administrative bodies.
It is true that the constitutional right to "a speedy disposition of cases" is
not limited to the accused in criminal proceedings but extends to all
parties in all cases, including civil and administrative cases, and in all
proceedings, including judicial and quasi-judicial hearings. Hence, under
the Constitution, any party to a case may demand expeditious action on
all officials who are tasked with the administration of justice.
However, as held in Caballero v. Alfonso, Jr., 153 SCRA 153 (1987),
"speedy disposition of cases" is a relative term. Just like the constitutional
guarantee of "speedy trial" accorded to the accused in all criminal

proceedings, "speedy disposition of cases" is a flexible concept. It is
consistent with delays and depends upon the circumstances of each
case. What the Constitution prohibits are unreasonable, arbitrary and
oppressive delays which render rights nugatory.
The cases at bench are not of the run-of-the-mill variety, such that their
final disposition in the administrative level after seven years from their
inception, cannot be said to be attended by unreasonable, arbitrary and
oppressive delays as to violate the constitutional rights to a speedy
disposition of the cases of complainants.
Caballero laid down the factors that may be taken into consideration in
determining whether or not the right to a "speedy disposition of cases"
has been violated, thus:
The amended complaint filed on June 6, 1984 involved a total of 1,767

claimants. Said complaint had undergone several amendments, the first
being on April 3, 1985.
In the determination of whether or not the right to a

"speedy trial" has been violated, certain factors may be
considered and balanced against each other. These are
length of delay, reason for the delay, assertion of the right
or failure to assert it, and prejudice caused by the delay.
The same factors may also be considered in answering
judicial inquiry whether or not a person officially charged
with the administration of justice has violated the speedy
disposition of cases.
The claimants were hired on various dates from 1975 to 1983. They were
deployed in different areas, one group in and the other groups outside of,
Bahrain. The monetary claims totalling more than US$65 million
according to Atty. Del Mundo, included:
Likewise, in Gonzales v. Sandiganbayan, 199 SCRA 298, (1991), we

held:
It must be here emphasized that the right to a speedy
disposition of a case, like the right to speedy trial, is
deemed violated only when the proceeding is attended by
vexatious, capricious, and oppressive delays; or when
unjustified postponements of the trial are asked for and
secured, or when without cause or justified motive a long
period of time is allowed to elapse without the party
having his case tried.
Since July 25, 1984 or a month after AIBC and BRII were served with a
copy of the amended complaint, claimants had been asking that AIBC
and BRII be declared in default for failure to file their answers within the
ten-day period provided in Section 1, Rule III of Book VI of the Rules and
Regulations of the POEA. At that time, there was a pending motion of
AIBC and BRII to strike out of the records the amended complaint and
the "Compliance" of claimants to the order of the POEA, requiring them to
submit a bill of particulars.
1. Unexpired portion of contract;

2. Interest earnings of Travel and Fund;
3. Retirement and Savings Plan benefit;
4. War Zone bonus or premium pay of at least 100% of
basic pay;
5. Area Differential pay;
6. Accrued Interest of all the unpaid benefits;
7. Salary differential pay;
8. Wage Differential pay;
9. Refund of SSS premiums not remitted to Social
Security System;
10. Refund of Withholding Tax not remitted to Bureau of
Internal Revenue (B.I.R.);
11. Fringe Benefits under Brown & Root's "A Summary of

Employees Benefits consisting of 43 pages (Annex "Q" of
Amended Complaint);
12. Moral and Exemplary Damages;
13. Attorney's fees of at least ten percent of amounts;
14. Other reliefs, like suspending and/or cancelling the
license to recruit of AIBC and issued by the POEA; and
15. Penalty for violation of Article 34 (Prohibited practices)
not excluding reportorial requirements thereof (NLRC
Resolution, September 2, 1991, pp. 18-19; G.R. No.
104776, Rollo, pp. 73-74).
Inasmuch as the complaint did not allege with sufficient definiteness and
clarity of some facts, the claimants were ordered to comply with the
motion of AIBC for a bill of particulars. When claimants filed their
"Compliance and Manifestation," AIBC moved to strike out the complaint
from the records for failure of claimants to submit a proper bill of
particulars. While the POEA Administrator denied the motion to strike out
the complaint, he ordered the claimants "to correct the deficiencies"
pointed out by AIBC.
Before an intelligent answer could be filed in response to the complaint,
the records of employment of the more than 1,700 claimants had to be
retrieved from various countries in the Middle East. Some of the records
dated as far back as 1975.
The hearings on the merits of the claims before the POEA Administrator
were interrupted several times by the various appeals, first to NLRC and
then to the Supreme Court.
Aside from the inclusion of additional claimants, two new cases were filed
against AIBC and BRII on October 10, 1985 (POEA Cases Nos.
L-85-10-777 and L-85-10-779). Another complaint was filed on May 29,
1986 (POEA Case No. L-86-05-460). NLRC, in exasperation, noted that
the exact number of claimants had never been completely established
(Resolution, Sept. 2, 1991, G.R. No. 104776, Rollo, p. 57). All the three
new cases were consolidated with POEA Case No. L-84-06-555.
NLRC blamed the parties and their lawyers for the delay in terminating
the proceedings, thus:
These cases could have been spared the long and
arduous route towards resolution had the parties and their
counsel been more interested in pursuing the truth and
the merits of the claims rather than exhibiting a fanatical
reliance on technicalities. Parties and counsel have made
these cases a litigation of emotion. The intransigence of
parties and counsel is remarkable. As late as last month,
this Commission made a last and final attempt to bring
the counsel of all the parties (this Commission issued a
special order directing respondent Brown & Root's
resident agent/s to appear) to come to a more conciliatory
stance.
Even
this
failed
(Rollo,
p. 58).
The squabble between the lawyers of claimants added to the delay in the
disposition of the cases, to the lament of NLRC, which complained:
It is very evident from the records that the protagonists in
these consolidated cases appear to be not only the
individual complainants, on the one hand, and AIBC and
Brown & Root, on the other hand. The two lawyers for the
complainants, Atty. Gerardo Del Mundo and Atty. Florante
De Castro, have yet to settle the right of representation,
each one persistently claiming to appear in behalf of most
of the complainants. As a result, there are two appeals by
the complainants. Attempts by this Commission to resolve
counsels' conflicting claims of their respective authority to
represent the complainants prove futile. The bickerings by
these two counsels are reflected in their pleadings. In the
charges and countercharges of falsification of documents
and signatures, and in the disbarment proceedings by
one against the other. All these have, to a large extent,
abetted in confounding the issues raised in these cases,
jumble the presentation of evidence, and even derailed
the prospects of an amicable settlement. It would not be
far-fetched to imagine that both counsel, unwittingly,

perhaps, painted a rainbow for the complainants, with the
proverbial pot of gold at its end containing more than
US$100 million, the aggregate of the claims in these
cases. It is, likewise, not improbable that their misplaced
zeal and exuberance caused them to throw all caution to
the wind in the matter of elementary rules of procedure
and evidence (Rollo, pp. 58-59).
Adding to the confusion in the proceedings before NLRC, is the listing of
some of the complainants in both petitions filed by the two lawyers. As
noted by NLRC, "the problem created by this situation is that if one of the
two petitions is dismissed, then the parties and the public respondents
would not know which claim of which petitioner was dismissed and which
was not."
B. Claimants insist that all their claims could properly be consolidated in a
"class suit" because "all the named complainants have similar money
claims and similar rights sought irrespective of whether they worked in
Bahrain, United Arab Emirates or in Abu Dhabi, Libya or in any part of the
Middle East" (Rollo, pp. 35-38).
A class suit is proper where the subject matter of the controversy is one
of common or general interest to many and the parties are so numerous
that it is impracticable to bring them all before the court (Revised Rules of
Court, Rule 3, Sec. 12).
While all the claims are for benefits granted under the Bahrain Law, many
of the claimants worked outside Bahrain. Some of the claimants were
deployed in Indonesia and Malaysia under different terms and conditions
of employment.
NLRC and the POEA Administrator are correct in their stance that
inasmuch as the first requirement of a class suit is not present (common
or general interest based on the Amiri Decree of the State of Bahrain), it
is only logical that only those who worked in Bahrain shall be entitled to
file their claims in a class suit.
While there are common defendants (AIBC and BRII) and the nature of
the claims is the same (for employee's benefits), there is no common
question of law or fact. While some claims are based on the Amiri Law of
Bahrain, many of the claimants never worked in that country, but were
deployed elsewhere. Thus, each claimant is interested only in his own
demand and not in the claims of the other employees of defendants. The
named claimants have a special or particular interest in specific benefits
completely different from the benefits in which the other named claimants
and those included as members of a "class" are claiming (Berses v.
Villanueva, 25 Phil. 473 [1913]). It appears that each claimant is only
interested in collecting his own claims. A claimants has no concern in
protecting the interests of the other claimants as shown by the fact, that
hundreds of them have abandoned their co-claimants and have entered
into separate compromise settlements of their respective claims. A
principle basic to the concept of "class suit" is that plaintiffs brought on
the record must fairly represent and protect the interests of the others
(Dimayuga v. Court of Industrial Relations, 101 Phil. 590 [1957]). For this
matter, the claimants who worked in Bahrain can not be allowed to sue in
a class suit in a judicial proceeding. The most that can be accorded to
them under the Rules of Court is to be allowed to join as plaintiffs in one
complaint (Revised Rules of Court, Rule 3, Sec. 6).
The Court is extra-cautious in allowing class suits because they are the
exceptions to the condition sine qua non, requiring the joinder of all
indispensable parties.
In an improperly instituted class suit, there would be no problem
decision secured is favorable to the plaintiffs. The problem arises
the decision is adverse to them, in which case the others who
impleaded by their self-appointed representatives, would surely
denial of due process.
if the
when
were
claim
C. The claimants in G.R. No. 104776 also urged that the POEA
Administrator and NLRC should have declared Atty. Florante De Castro
guilty of "forum shopping, ambulance chasing activities, falsification,
duplicity and other unprofessional activities" and his appearances as
counsel for some of the claimants as illegal (Rollo, pp. 38-40).
The Anti-Forum Shopping Rule (Revised Circular No. 28-91) is intended
to put a stop to the practice of some parties of filing multiple petitions and
complaints involving the same issues, with the result that the courts or
agencies have to resolve the same issues. Said Rule, however, applies
only to petitions filed with the Supreme Court and the Court of Appeals. It
is entitled "Additional Requirements For Petitions Filed with the Supreme
Court and the Court of Appeals To Prevent Forum Shopping or Multiple

Filing of Petitioners and Complainants." The first sentence of the circular
expressly states that said circular applies to an governs the filing of
petitions in the Supreme Court and the Court of Appeals.
While Administrative Circular No. 04-94 extended the application of the
anti-forum shopping rule to the lower courts and administrative agencies,
said circular took effect only on April 1, 1994.
POEA and NLRC could not have entertained the complaint for unethical
conduct against Atty. De Castro because NLRC and POEA have no
jurisdiction to investigate charges of unethical conduct of lawyers.
Attorney's Lien
The "Notice and Claim to Enforce Attorney's Lien" dated December 14,
1992 was filed by Atty. Gerardo A. Del Mundo to protect his claim for
attorney's fees for legal services rendered in favor of the claimants (G.R.
No. 104776, Rollo, pp. 841-844).
A statement of a claim for a charging lien shall be filed with the court or
administrative agency which renders and executes the money judgment
secured by the lawyer for his clients. The lawyer shall cause written
notice thereof to be delivered to his clients and to the adverse party
(Revised Rules of Court, Rule 138, Sec. 37). The statement of the claim
for the charging lien of Atty. Del Mundo should have been filed with the
administrative agency that rendered and executed the judgment.
Bahrain and therefore it is in estoppel to disclaim said offer (Rollo, pp. 2122).
Claimants presented a Memorandum of the Ministry of Labor of Bahrain
dated April 16, 1983, which in pertinent part states:
After the perusal of the memorandum of the Vice
President and the Area Manager, Middle East, of Brown &
Root Co. and the Summary of the compensation offered
by the Company to the employees in respect of the
difference of pay of the wages of the overtime and the
difference of vacation leave and the perusal of the
documents attached thereto i.e., minutes of the meetings
between the Representative of the employees and the
management of the Company, the complaint filed by the
employees on 14/2/83 where they have claimed as
hereinabove stated, sample of the Service Contract
executed between one of the employees and the
company through its agent in (sic) Philippines, Asia
International Builders Corporation where it has been
provided for 48 hours of work per week and an annual
leave of 12 days and an overtime wage of 1 & 1/4 of the
normal hourly wage.
xxx xxx xxx
The Company in its computation reached the following
averages:
Contempt of Court
The complaint of Atty. Gerardo A. Del Mundo to cite Atty. Florante De
Castro and Atty. Katz Tierra for violation of the Code of Professional
Responsibility should be filed in a separate and appropriate proceeding.
G.R. No. 104911-14
Claimants charge NLRC with grave abuse of discretion in not accepting
their formula of "Three Hours Average Daily Overtime" in computing the
overtime payments. They claim that it was BRII itself which proposed the
formula during the negotiations for the settlement of their claims in
A. 1. The average duration of the actual service of the

employee is 35 months for the Philippino (sic)
employees . . . .
2. The average wage per hour for the Philippino (sic)
employee is US$2.69 . . . .
3. The average hours for the overtime is 3 hours plus in
all public holidays and weekends.
4. Payment of US$8.72 per months (sic) of service as

compensation for the difference of the wages of
the overtime done for each Philippino (sic) employee . . .
(Rollo, p.22).
BRII and AIBC countered: (1) that the Memorandum was not prepared by
them but by a subordinate official in the Bahrain Department of Labor; (2)
that there was no showing that the Bahrain Minister of Labor had
approved said memorandum; and (3) that the offer was made in the
course of the negotiation for an amicable settlement of the claims and
therefore it was not admissible in evidence to prove that anything is due
to the claimants.
While said document was presented to the POEA without observing the
rule on presenting official documents of a foreign government as provided
in Section 24, Rule 132 of the 1989 Revised Rules on Evidence, it can be
admitted in evidence in proceedings before an administrative body. The
opposing parties have a copy of the said memorandum, and they could
easily verify its authenticity and accuracy.
The admissibility of the offer of compromise made by BRII as contained
in the memorandum is another matter. Under Section 27, Rule 130 of the
1989 Revised Rules on Evidence, an offer to settle a claim is not an
admission that anything is due.
Said Rule provides:
Offer of compromise not admissible. In civil cases, an
offer of compromise is not an admission of any liability,
and is not admissible in evidence against the offeror.
This Rule is not only a rule of procedure to avoid the cluttering of the
record with unwanted evidence but a statement of public policy. There is
great public interest in having the protagonists settle their differences
amicable before these ripen into litigation. Every effort must be taken to
encourage them to arrive at a settlement. The submission of offers and
counter-offers in the negotiation table is a step in the right direction. But
to bind a party to his offers, as what claimants would make this Court do,
would defeat the salutary purpose of the Rule.
G.R. Nos. 105029-32

A. NLRC applied the Amiri Decree No. 23 of 1976, which provides for
greater benefits than those stipulated in the overseas-employment
contracts of the claimants. It was of the belief that "where the laws of the
host country are more favorable and beneficial to the workers, then the
laws of the host country shall form part of the overseas employment
contract." It quoted with approval the observation of the POEA
Administrator that ". . . in labor proceedings, all doubts in the
implementation of the provisions of the Labor Code and its implementing
regulations shall be resolved in favor of labor" (Rollo, pp. 90-94).
AIBC and BRII claim that NLRC acted capriciously and whimsically when
it refused to enforce the overseas-employment contracts, which became
the law of the parties. They contend that the principle that a law is
deemed to be a part of a contract applies only to provisions of Philippine
law in relation to contracts executed in the Philippines.
The overseas-employment contracts, which were prepared by AIBC and
BRII themselves, provided that the laws of the host country became
applicable to said contracts if they offer terms and conditions more
favorable that those stipulated therein. It was stipulated in said contracts
that:
The Employee agrees that while in the employ of the
Employer, he will not engage in any other business or
occupation, nor seek employment with anyone other than
the Employer; that he shall devote his entire time and
attention and his best energies, and abilities to the
performance of such duties as may be assigned to him by
the Employer; that he shall at all times be subject to the
direction and control of the Employer; and that the
benefits provided to Employee hereunder are substituted
for and in lieu of all other benefits provided by any
applicable law, provided of course, that total remuneration
and benefits do not fall below that of the host country
regulation or custom, it being understood that should
applicable laws establish that fringe benefits, or other
such benefits additional to the compensation herein
agreed cannot be waived, Employee agrees that such
compensation will be adjusted downward so that the total
compensation hereunder, plus the non-waivable benefits

shall be equivalent to the compensation herein agreed
(Rollo, pp. 352-353).
The overseas-employment contracts could have been drafted more
felicitously. While a part thereof provides that the compensation to the
employee may be "adjusted downward so that the total computation
(thereunder) plus the non-waivable benefits shall be equivalent to the
compensation" therein agreed, another part of the same provision
categorically states "that total remuneration and benefits do not fall below
that of the host country regulation and custom."
Any ambiguity in the overseas-employment contracts should be
interpreted against AIBC and BRII, the parties that drafted it (Eastern
Shipping Lines, Inc. v. Margarine-Verkaufs-Union, 93 SCRA 257 [1979]).
Article 1377 of the Civil Code of the Philippines provides:
The interpretation of obscure words or stipulations in a
contract shall not favor the party who caused the
obscurity.
Said rule of interpretation is applicable to contracts of adhesion where
there is already a prepared form containing the stipulations of the
employment contract and the employees merely "take it or leave it." The
presumption is that there was an imposition by one party against the
other and that the employees signed the contracts out of necessity that
reduced their bargaining power (Fieldmen's Insurance Co., Inc. v.
Songco, 25 SCRA 70 [1968]).
Applying the said legal precepts, we read the overseas-employment
contracts in question as adopting the provisions of the Amiri Decree No.
23 of 1976 as part and parcel thereof.
The parties to a contract may select the law by which it is to be governed
(Cheshire, Private International Law, 187 [7th ed.]). In such a case, the
foreign law is adopted as a "system" to regulate the relations of the
parties, including questions of their capacity to enter into the contract, the
formalities to be observed by them, matters of performance, and so forth
(16
150-161).
Am
Jur
2d,
Instead of adopting the entire mass of the foreign law, the parties may
just agree that specific provisions of a foreign statute shall be deemed
incorporated into their contract "as a set of terms." By such reference to
the provisions of the foreign law, the contract does not become a foreign
contract to be governed by the foreign law. The said law does not operate
as a statute but as a set of contractual terms deemed written in the
contract (Anton, Private International Law, 197 [1967]; Dicey and Morris,
The Conflict of Laws, 702-703, [8th ed.]).
A basic policy of contract is to protect the expectation of the parties
(Reese, Choice of Law in Torts and Contracts, 16 Columbia Journal of
Transnational Law 1, 21 [1977]). Such party expectation is protected by
giving effect to the parties' own choice of the applicable law (Fricke v.
Isbrandtsen Co., Inc., 151 F. Supp. 465, 467 [1957]). The choice of law
must, however, bear some relationship to the parties or their transaction
(Scoles and Hayes, Conflict of Law 644-647 [1982]). There is no question
that the contracts sought to be enforced by claimants have a direct
connection with the Bahrain law because the services were rendered in
that country.
In Norse Management Co. (PTE) v. National Seamen Board, 117 SCRA
486 (1982), the "Employment Agreement," between Norse Management
Co. and the late husband of the private respondent, expressly provided
that in the event of illness or injury to the employee arising out of and in
the course of his employment and not due to his own misconduct,
"compensation shall be paid to employee in accordance with and subject
to the limitation of the Workmen's Compensation Act of the Republic of
the Philippines or the Worker's Insurance Act of registry of the vessel,
whichever is greater." Since the laws of Singapore, the place of registry
of the vessel in which the late husband of private respondent served at
the time of his death, granted a better compensation package, we applied
said foreign law in preference to the terms of the contract.
The case of Bagong Filipinas Overseas Corporation v. National Labor
Relations Commission, 135 SCRA 278 (1985), relied upon by AIBC and
BRII is inapposite to the facts of the cases at bench. The issue in that
case was whether the amount of the death compensation of a Filipino
seaman should be determined under the shipboard employment contract
executed in the Philippines or the Hongkong law. Holding that the

shipboard employment contract was controlling, the court differentiated
said case from Norse Management Co. in that in the latter case there
was an express stipulation in the employment contract that the foreign
law would be applicable if it afforded greater compensation.
In deciding to resolve the validity of certain claims on the basis of the

evidence of both parties submitted before the POEA Administrator and
NLRC, the latter considered that it was not expedient to remand the
cases to the POEA Administrator for that would only prolong the already
protracted legal controversies.
B. AIBC and BRII claim that they were denied by NLRC of their right to
due process when said administrative agency granted Friday-pay
differential, holiday-pay differential, annual-leave differential and leave
indemnity pay to the claimants listed in Annex B of the Resolution. At first,
NLRC reversed the resolution of the POEA Administrator granting these
benefits on a finding that the POEA Administrator failed to consider the
evidence presented by AIBC and BRII, that some findings of fact of the
POEA Administrator were not supported by the evidence, and that some
of the evidence were not disclosed to AIBC and BRII (Rollo, pp. 35-36;
106-107). But instead of remanding the case to the POEA Administrator
for a new hearing, which means further delay in the termination of the
case, NLRC decided to pass upon the validity of the claims itself. It is this
procedure that AIBC and BRII complain of as being irregular and a
"reversible error."
Even the Supreme Court has decided appealed cases on the merits
instead of remanding them to the trial court for the reception of evidence,
where the same can be readily determined from the uncontroverted facts
on record (Development Bank of the Philippines v. Intermediate Appellate
Court, 190 SCRA 653 [1990]; Pagdonsalan v. National Labor Relations
Commission, 127 SCRA 463 [1984]).
They pointed out that NLRC took into consideration evidence submitted
on appeal, the same evidence which NLRC found to have been
"unilaterally submitted by the claimants and not disclosed to the adverse
parties" (Rollo, pp. 37-39).
NLRC based its ruling on Article 218(c) of the Labor Code of the
Philippines, which empowers it "[to] conduct investigation for the
determination of a question, matter or controversy, within its
jurisdiction, . . . ."
NLRC noted that so many pieces of evidentiary matters were submitted

to the POEA administrator by the claimants after the cases were deemed
submitted for resolution and which were taken cognizance of by the
POEA Administrator in resolving the cases. While AIBC and BRII had no
opportunity to refute said evidence of the claimants before the POEA
Administrator, they had all the opportunity to rebut said evidence and to
present
their
counter-evidence before NLRC. As a matter of fact, AIBC and BRII
themselves were able to present before NLRC additional evidence which
they failed to present before the POEA Administrator.
It is the posture of AIBC and BRII that NLRC has no authority under
Article 218(c) to remand a case involving claims which had already been
dismissed because such provision contemplates only situations where
there is still a question or controversy to be resolved (Rollo, pp. 41-42).
Under Article 221 of the Labor Code of the Philippines, NLRC is enjoined
to "use every and all reasonable means to ascertain the facts in each
case speedily and objectively and without regard to technicalities of law
or procedure, all in the interest of due process."
C. AIBC and BRII charge NLRC with grave abuse of discretion when it
ordered the POEA Administrator to hold new hearings for 683 claimants
listed in Annex D of the Resolution dated September 2, 1991 whose
claims had been denied by the POEA Administrator "for lack of proof" and
for 69 claimants listed in Annex E of the same Resolution, whose claims
had been found by NLRC itself as not "supported by evidence" (Rollo, pp.
41-45).
A principle well embedded in Administrative Law is that the technical

rules of procedure and evidence do not apply to the proceedings
conducted by administrative agencies (First Asian Transport & Shipping
Agency, Inc. v. Ople, 142 SCRA 542 [1986]; Asiaworld Publishing House,
Inc. v. Ople, 152 SCRA 219 [1987]). This principle is enshrined in Article
221 of the Labor Code of the Philippines and is now the bedrock of
proceedings before NLRC.
Notwithstanding the non-applicability of technical rules of procedure and
evidence in administrative proceedings, there are cardinal rules which
must be observed by the hearing officers in order to comply with the due
process requirements of the Constitution. These cardinal rules are
collated in Ang Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940).
VIII
The three petitions were filed under Rule 65 of the Revised Rules of
Court on the grounds that NLRC had committed grave abuse of
discretion amounting to lack of jurisdiction in issuing the questioned
orders. We find no such abuse of discretion.
WHEREFORE, all the three petitions are DISMISSED.
SO ORDERED.
G.R. No. 61594 September 28, 1990

PAKISTAN INTERNATIONAL AIRLINES CORPORATION, petitioner,
vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON.
VICENTE LEOGARDO, JR., in his capacity as Deputy Minister;
ETHELYNNE
B.
FARRALES
MAMASIG, respondents.
and
MARIA
MOONYEEN
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for petitioner.

Ledesma, Saludo & Associates for private respondents.
FELICIANO, J.:
On 2 December 1978, petitioner Pakistan International Airlines
Corporation ("PIA"), a foreign corporation licensed to do business in the
Philippines, executed in Manila two (2) separate contracts of
employment, one with private respondent Ethelynne B. Farrales and the
other with private respondent Ma. M.C. Mamasig. 1 The contracts, which
became effective on 9 January 1979, provided in pertinent portion as follows:
5. DURATION OF EMPLOYMENT AND PENALTY
This agreement is for a period of three (3) years, but can
be extended by the mutual consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided,
PIA reserves the right to terminate this agreement at any
time by giving the EMPLOYEE notice in writing in
advance one month before the intended termination or in
lieu thereof, by paying the EMPLOYEE wages equivalent
to one month's salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under

and by the laws of Pakistan, and only the Courts of
Karachi, Pakistan shall have the jurisdiction to consider
any matter arising out of or under this agreement.
Respondents then commenced training in Pakistan. After their training
period, they began discharging their job functions as flight attendants,
with base station in Manila and flying assignments to different parts of the
Middle East and Europe.
On 2 August 1980, roughly one (1) year and four (4) months prior to the
expiration of the contracts of employment, PIA through Mr. Oscar
Benares, counsel for and official of the local branch of PIA, sent separate
letters both dated 1 August 1980 to private respondents Farrales and
Mamasig advising both that their services as flight stewardesses would
be terminated "effective 1 September 1980, conformably to clause 6 (b)
of the employment agreement [they had) executed with [PIA]." 2
On 9 September 1980, private respondents Farrales and Mamasig jointly
instituted a complaint, docketed as NCR-STF-95151-80, for illegal
dismissal and non-payment of company benefits and bonuses, against
PIA with the then Ministry of Labor and Employment ("MOLE"). After
several unfruitful attempts at conciliation, the MOLE hearing officer Atty.
Jose M. Pascual ordered the parties to submit their position papers and
evidence supporting their respective positions. The PIA submitted its
position paper, 3 but no evidence, and there claimed that both private
respondents were habitual absentees; that both were in the habit of bringing
in from abroad sizeable quantities of "personal effects"; and that PIA
personnel at the Manila International Airport had been discreetly warned by
customs officials to advise private respondents to discontinue that practice.
PIA further claimed that the services of both private respondents were
terminated pursuant to the provisions of the employment contract.
In his Order dated 22 January 1981, Regional Director Francisco L.
Estrella ordered the reinstatement of private respondents with full
backwages or, in the alternative, the payment to them of the amounts
equivalent to their salaries for the remainder of the fixed three-year
period of their employment contracts; the payment to private respondent
Mamasig of an amount equivalent to the value of a round trip ticket
Manila-USA Manila; and payment of a bonus to each of the private
respondents equivalent to their one-month salary. 4 The Order stated that
private respondents had attained the status of regular employees after they
had rendered more than a year of continued service; that the stipulation
limiting the period of the employment contract to three (3) years was null and
void as violative of the provisions of the Labor Code and its implementing
rules and regulations on regular and casual employment; and that the
dismissal, having been carried out without the requisite clearance from the
MOLE, was illegal and entitled private respondents to reinstatement with full
backwages.
On appeal, in an Order dated 12 August 1982, Hon. Vicente Leogardo,

Jr., Deputy Minister, MOLE, adopted the findings of fact and conclusions
of the Regional Director and affirmed the latter's award save for the
portion thereof giving PIA the option, in lieu of reinstatement, "to pay each
of the complainants [private respondents] their salaries corresponding to
the unexpired portion of the contract[s] [of employment] . . .". 5
In the instant Petition for Certiorari, petitioner PIA assails the award of the
Regional Director and the Order of the Deputy Minister as having been
rendered without jurisdiction; for having been rendered without support in
the evidence of record since, allegedly, no hearing was conducted by the
hearing officer, Atty. Jose M. Pascual; and for having been issued in
disregard and in violation of petitioner's rights under the employment
contracts with private respondents.
1. Petitioner's first contention is that the Regional Director, MOLE, had no
jurisdiction over the subject matter of the complaint initiated by private
respondents for illegal dismissal, jurisdiction over the same being lodged
in the Arbitration Branch of the National Labor Relations Commission
("NLRC") It appears to us beyond dispute, however, that both at the time
the complaint was initiated in September 1980 and at the time the Orders
assailed were rendered on January 1981 (by Regional Director Francisco
L. Estrella) and August 1982 (by Deputy Minister Vicente Leogardo, Jr.),
the Regional Director had jurisdiction over termination cases.
Art. 278 of the Labor Code, as it then existed, forbade the termination of
the services of employees with at least one (1) year of service without
prior clearance from the Department of Labor and Employment:
Art. 278. Miscellaneous Provisions . . .
(b) With or without a collective agreement, no employer

may shut down his establishment or dismiss or terminate
the employment of employees with at least one year of
service during the last two (2) years, whether such
service is continuous or broken, without prior written
authority issued in accordance with such rules and
regulations as the Secretary may promulgate . . .
(emphasis supplied)
Rule XIV, Book No. 5 of the Rules and Regulations Implementing
the Labor Code, made clear that in case of a termination without
the necessary clearance, the Regional Director was authorized to
order the reinstatement of the employee concerned and the
payment of backwages; necessarily, therefore, the Regional
Director must have been given jurisdiction over such termination
cases:
Sec. 2. Shutdown or dismissal without clearance. Any
shutdown or dismissal without prior clearance shall be
conclusively presumed to be termination of employment
without a just cause. The Regional Director shall, in such
case order the immediate reinstatement of the employee
and the payment of his wages from the time of the
shutdown or dismissal until the time of reinstatement.
(emphasis supplied)
Policy Instruction No. 14 issued by the Secretary of Labor, dated
23 April 1976, was similarly very explicit about the jurisdiction of
the Regional Director over termination of employment cases:
Under PD 850, termination cases with or without CBA
are now placed under the original jurisdiction of the
Regional Director. Preventive suspension cases, now
made cognizable for the first time, are also placed under
the Regional Director. Before PD 850, termination cases
where there was a CBA were under the jurisdiction of the
grievance machinery and voluntary arbitration, while
termination cases where there was no CBA were under
the jurisdiction of the Conciliation Section.
In more details, the major innovations introduced by PD

850 and its implementing rules and regulations with
respect to termination and preventive suspension cases
are:
1. The Regional Director is now required to rule on every
application for clearance, whether there is opposition or
not, within ten days from receipt thereof.
xxx xxx xxx
(Emphasis supplied)
2. The second contention of petitioner PIA is that, even if the Regional
Director had jurisdiction, still his order was null and void because it had
been issued in violation of petitioner's right to procedural due
process . 6 This claim, however, cannot be given serious consideration.
Petitioner was ordered by the Regional Director to submit not only its position
paper but also such evidence in its favor as it might have. Petitioner opted to
rely solely upon its position paper; we must assume it had no evidence to
sustain its assertions. Thus, even if no formal or oral hearing was conducted,
petitioner had ample opportunity to explain its side. Moreover, petitioner PIA
was able to appeal his case to the Ministry of Labor and Employment. 7
There is another reason why petitioner's claim of denial of due process
must be rejected. At the time the complaint was filed by private
respondents on 21 September 1980 and at the time the Regional Director
issued his questioned order on 22 January 1981, applicable regulation,
as noted above, specified that a "dismissal without prior clearance shall
be conclusively presumed to be termination of employment without a
cause", and the Regional Director was required in such case to" order the
immediate reinstatement of the employee and the payment of his wages
from the time of the shutdown or dismiss until . . . reinstatement." In other
words, under the then applicable rule, the Regional Director did not even
have to require submission of position papers by the parties in view of the
conclusive (juris et de jure) character of the presumption created by such
applicable law and regulation. In Cebu Institute of Technology v. Minister
of Labor and Employment, 8 the Court pointed out that "under Rule 14,
Section 2, of the Implementing Rules and Regulations, the termination of [an
employee] which was without previous clearance from the Ministry of Labor
is conclusively presumed to be without [just] cause . . . [a presumption which]

cannot be overturned by any contrary proof however strong."
3. In its third contention, petitioner PIA invokes paragraphs 5 and 6 of its

contract of employment with private respondents Farrales and Mamasig,
arguing that its relationship with them was governed by the provisions of
its contract rather than by the general provisions of the Labor Code. 9
Paragraph 5 of that contract set a term of three (3) years for that
relationship, extendible by agreement between the parties; while
paragraph 6 provided that, notwithstanding any other provision in the
Contract, PIA had the right to terminate the employment agreement at
any time by giving one-month's notice to the employee or, in lieu of such
notice, one-months salary.
A contract freely entered into should, of course, be respected, as PIA
argues, since a contract is the law between the parties. 10 The principle of
party autonomy in contracts is not, however, an absolute principle. The rule
in Article 1306, of our Civil Code is that the contracting parties may establish
such stipulations as they may deem convenient, "providedthey are not
contrary to law, morals, good customs, public order or public policy." Thus,
counter-balancing the principle of autonomy of contracting parties is the
equally general rule that provisions of applicable law, especially provisions
relating to matters affected with public policy, are deemed written into the
contract. 11 Put a little differently, the governing principle is that parties may
not contract away applicable provisions of law especially peremptory
provisions dealing with matters heavily impressed with public interest. The
law relating to labor and employment is clearly such an area and parties are
not at liberty to insulate themselves and their relationships from the impact of
labor laws and regulations by simply contracting with each other. It is thus
necessary to appraise the contractual provisions invoked by petitioner PIA in
terms of their consistency with applicable Philippine law and regulations.
As noted earlier, both the Labor Arbiter and the Deputy Minister, MOLE,
in effect held that paragraph 5 of that employment contract was
inconsistent with Articles 280 and 281 of the Labor Code as they existed
at the time the contract of employment was entered into, and hence
refused to give effect to said paragraph 5. These Articles read as follows:
Art. 280. Security of Tenure. In cases of regular
employment, the employer shall not terminate the
services of an employee except for a just cause or when

authorized by this Title An employee who is unjustly
dismissed from work shall be entitled to reinstatement
without loss of seniority rights and to his backwages
computed from the time his compensation was withheld
from him up to the time his reinstatement.
Art. 281. Regular and Casual Employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed
is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: provided, that, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered as regular employee with respect to the
activity in which he is employed and his employment shall
continue while such actually exists. (Emphasis supplied)
In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., 12 the Court had
occasion to examine in detail the question of whether employment for a fixed
term has been outlawed under the above quoted provisions of the Labor
Code. After an extensive examination of the history and development of
Articles 280 and 281, the Court reached the conclusion that a contract
providing for employment with a fixed period was not necessarily unlawful:
There can of course be no quarrel with the proposition
that where from the circumstances it is apparent that
periods have been imposed to preclude acquisition of
tenurial security by the employee, they should be struck
down or disregarded as contrary to public policy, morals,
etc. But where no such intent to circumvent the law is

shown, or stated otherwise, where the reason for the law
does not exist e.g. where it is indeed the employee
himself who insists upon a period or where the nature of
the engagement is such that, without being seasonal or
for a specific project, a definite date of termination is
a sine qua non would an agreement fixing a period be
essentially evil or illicit, therefore anathema Would such
an agreement come within the scope of Article 280 which
admittedly was enacted "to prevent the circumvention of
the right of the employee to be secured in . . . (his)
employment?"
As it is evident from even only the three examples already
given that Article 280 of the Labor Code, under a narrow
and literal interpretation, not only fails to exhaust the
gamut of employment contracts to which the lack of a
fixed period would be an anomaly, but would also appear
to restrict, without reasonable distinctions, the right of an
employee to freely stipulate with his employer the
duration of his engagement, it logically follows that such a
literal interpretation should be eschewed or avoided. The
law must be given reasonable interpretation, to preclude
absurdity in its application. Outlawing the whole concept
of term employment and subverting to boot the principle
of freedom of contract to remedy the evil of employers"
using it as a means to prevent their employees from
obtaining security of tenure is like cutting off the nose to
spite the face or, more relevantly, curing a headache by
lopping off the head.
xxx xxx xxx
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present
Article 280 of the Labor Code clearly appears to have
been, as already observed, to prevent circumvention of
the employee's right to be secure in his tenure, the clause
in said article indiscriminately and completely ruling out all
written or oral agreements conflicting with the concept of
regular employment as defined therein should be
construed to refer to the substantive evil that the Code

itself has singled out: agreements entered into precisely
to circumvent security of tenure. It should have no
application to instances where a fixed period of
employment was agreed upon knowingly and voluntarily
by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal
terms with no moral dominance whatever being exercised
by the former over the latter. Unless thus limited in its
purview, the law would be made to apply to purposes
other than those explicitly stated by its framers; it thus
becomes pointless and arbitrary, unjust in its effects and
apt to lead to absurd and unintended consequences.
(emphasis supplied)
It is apparent from Brent School that the critical consideration is
the presence or absence of a substantial indication that the
period specified in an employment agreement was designed to
circumvent the security of tenure of regular employees which is
provided for in Articles 280 and 281 of the Labor Code. This
indication must ordinarily rest upon some aspect of the
agreement other than the mere specification of a fixed term of the
ernployment agreement, or upon evidence aliunde of the intent to
evade.
Examining the provisions of paragraphs 5 and 6 of the employment
agreement between petitioner PIA and private respondents, we consider
that those provisions must be read together and when so read, the fixed
period of three (3) years specified in paragraph 5 will be seen to have
been effectively neutralized by the provisions of paragraph 6 of that
agreement. Paragraph 6 in effect took back from the employee the fixed
three (3)-year period ostensibly granted by paragraph 5 by rendering
such period in effect a facultative one at the option of the employer PIA.
For petitioner PIA claims to be authorized to shorten that term, at any
time and for any cause satisfactory to itself, to a one-month period, or
even less by simply paying the employee a month's salary. Because the
net effect of paragraphs 5 and 6 of the agreement here involved is to
render the employment of private respondents Farrales and Mamasig
basically employment at the pleasure of petitioner PIA, the Court

considers that paragraphs 5 and 6 were intended to prevent any security
of tenure from accruing in favor of private respondents even during the
limited period of three (3) years, 13 and thus to escape completely the thrust
of Articles 280 and 281 of the Labor Code.
Petitioner PIA cannot take refuge in paragraph 10 of its employment
agreement which specifies, firstly, the law of Pakistan as the applicable
law of the agreement and, secondly, lays the venue for settlement of any
dispute arising out of or in connection with the agreement "only [in] courts
of Karachi Pakistan". The first clause of paragraph 10 cannot be invoked
to prevent the application of Philippine labor laws and regulations to the
subject matter of this case, i.e., the employer-employee relationship
between petitioner PIA and private respondents. We have already
pointed out that the relationship is much affected with public interest and
that the otherwise applicable Philippine laws and regulations cannot be
rendered illusory by the parties agreeing upon some other law to govern
their relationship. Neither may petitioner invoke the second clause of
paragraph 10, specifying the Karachi courts as the sole venue for the
settlement of dispute; between the contracting parties. Even a cursory
scrutiny of the relevant circumstances of this case will show the multiple
and substantive contacts between Philippine law and Philippine courts,
on the one hand, and the relationship between the parties, upon the
other: the contract was not only executed in the Philippines, it was also
performed here, at least partially; private respondents are Philippine
citizens and respondents, while petitioner, although a foreign corporation,
is licensed to do business (and actually doing business) and hence
resident in the Philippines; lastly, private respondents were based in the
Philippines in between their assigned flights to the Middle East and
Europe. All the above contacts point to the Philippine courts and
administrative agencies as a proper forum for the resolution of
contractual disputes between the parties. Under these circumstances,
paragraph 10 of the employment agreement cannot be given effect so as
to oust Philippine agencies and courts of the jurisdiction vested upon
them by Philippine law. Finally, and in any event, the petitioner PIA did
not undertake to plead and prove the contents of Pakistan law on the
matter; it must therefore be presumed that the applicable provisions of
the law of Pakistan are the same as the applicable provisions of
Philippine law. 14
We conclude that private respondents Farrales and Mamasig were

illegally dismissed and that public respondent Deputy Minister, MOLE,
had not committed any grave abuse of discretion nor any act without or in
excess of jurisdiction in ordering their reinstatement with backwages.
Private respondents are entitled to three (3) years backwages without
qualification or deduction. Should their reinstatement to their former or
other substantially equivalent positions not be feasible in view of the
length of time which has gone by since their services were unlawfully
terminated, petitioner should be required to pay separation pay to private
respondents amounting to one (1) month's salary for every year of
service rendered by them, including the three (3) years service putatively
rendered.
appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
ACCORDINGLY, the Petition for certiorari is hereby DISMISSED for lack

of merit, and the Order dated 12 August 1982 of public respondent is
hereby AFFIRMED, except that (1) private respondents are entitled to
three (3) years backwages, without deduction or qualification; and (2)
should reinstatement of private respondents to their former positions or to
substantially equivalent positions not be feasible, then petitioner shall, in
lieu thereof, pay to private respondents separation pay amounting to one
(1)-month's salary for every year of service actually rendered by them
and for the three (3) years putative service by private respondents. The
Temporary Restraining Order issued on 13 September 1982 is hereby
LIFTED. Costs against petitioner.
This is a direct appeal to Us, upon a question purely of law, from an order
of the Court of First Instance of Manila dated April 30, 1964, approving
the project of partition filed by the executor in Civil Case No. 37089
therein.
SO ORDERED.
G.R. No. L-23678
June 6, 1967
TESTATE
ESTATE
OF
AMOS
G.
BELLIS,
deceased.
PEOPLE'S
BANK
and
TRUST
COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.

Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et
al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
1wph1.t
The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of
the United States." By his first wife, Mary E. Mallen, whom he divorced,
he had five legitimate children: Edward A. Bellis, George Bellis (who predeceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna
Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he
had three legitimate children: Edwin G. Bellis, Walter S. Bellis and
Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis,
Jr., Maria Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in
which he directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be divided, in
trust, in the following order and manner: (a) $240,000.00 to his first wife,
Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each
and (c) after the foregoing two items have been satisfied, the remainder
shall go to his seven surviving children by his first and second wives,
namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna
Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in
equal shares.
1wph1.t
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San

Antonio, Texas, U.S.A. His will was admitted to probate in the Court of
First Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all
the bequests therein including the amount of $240,000.00 in the form of
shares of stock to Mary E. Mallen and to the three (3) illegitimate
children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis,
various amounts totalling P40,000.00 each in satisfaction of their
respective legacies, or a total of P120,000.00, which it released from time
to time according as the lower court approved and allowed the various
motions or petitions filed by the latter three requesting partial advances
on account of their respective legacies.
On January 8, 1964, preparatory to closing its administration, the
executor submitted and filed its "Executor's Final Account, Report of
Administration and Project of Partition" wherein it reported, inter alia, the
satisfaction of the legacy of Mary E. Mallen by the delivery to her of
shares of stock amounting to $240,000.00, and the legacies of Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in the amount of
P40,000.00 each or a total of P120,000.00. In the project of partition, the
executor pursuant to the "Twelfth" clause of the testator's Last Will and
Testament divided the residuary estate into seven equal portions for
the benefit of the testator's seven legitimate children by his first and
second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed
their respective oppositions to the project of partition on the ground that
they were deprived of their legitimes as illegitimate children and,
therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of
service of which is evidenced by the registry receipt submitted on April
27, 1964 by the executor.1
After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order overruling
the oppositions and approving the executor's final account, report and
administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is
Texas law, which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the

lower court on June 11, 1964, oppositors-appellants appealed to this
Court to raise the issue of which law must apply Texas law or
Philippine law.
In this regard, the parties do not submit the case on, nor even discuss,
the doctrine of renvoi, applied by this Court in Aznar v. Christensen
Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent
where the decedent is a national of one country, and a domicile of
another. In the present case, it is not disputed that the decedent was both
a national of Texas and a domicile thereof at the time of his death. 2 So
that even assuming Texas has a conflict of law rule providing that the
domiciliary system (law of the domicile) should govern, the same would
not result in a reference back (renvoi) to Philippine law, but would still
refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the
situs theory (lex rei sitae) calling for the application of the law of the place
where the properties are situated, renvoi would arise, since the properties
here involved are found in the Philippines. In the absence, however, of
proof as to the conflict of law rule of Texas, it should not be presumed
different from ours.3 Appellants' position is therefore not rested on the
doctrine of renvoi. As stated, they never invoked nor even mentioned it in
their arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in relation to
Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions,
with regard to four items: (a) the order of succession; (b) the amount of
successional rights; (e) the intrinsic validity of the provisions of the will;
and (d) the capacity to succeed. They provide that
ART. 16. Real property as well as personal property is subject to
the law of the country where it is situated.
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may he the
nature of the property and regardless of the country wherein said
property may be found.
ART. 1039. Capacity to succeed is governed by the law of the

nation of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the
Civil Code, stating that
Prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted.
This is not correct. Precisely, Congress deleted the phrase,
"notwithstanding the provisions of this and the next preceding article"
when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new
Civil Code, while reproducing without substantial change the second
paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must
have been their purpose to make the second paragraph of Art. 16 a
specific provision in itself which must be applied in testate and intestate
succession. As further indication of this legislative intent, Congress added
a new provision, under Art. 1039, which decrees that capacity to succeed
is to be governed by the national law of the decedent.
It is therefore evident that whatever public policy or good customs may
be involved in our System of legitimes, Congress has not intended to
extend the same to the succession of foreign nationals. For it has
specifically chosen to leave, inter alia, the amount of successional rights,
to the decedent's national law. Specific provisions must prevail over
general ones.
Appellants would also point out that the decedent executed two wills
one to govern his Texas estate and the other his Philippine estate
arguing from this that he intended Philippine law to govern his Philippine
estate. Assuming that such was the decedent's intention in executing a
separate Philippine will, it would not alter the law, for as this Court ruled
in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to
the effect that his properties shall be distributed in accordance with
Philippine law and not with his national law, is illegal and void, for his
national law cannot be ignored in regard to those matters that Article 10
now Article 16 of the Civil Code states said national law should
govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no
forced heirs or legitimes. Accordingly, since the intrinsic validity of the
provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be
applied to the testacy of Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with
costs against appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,
Sanchez and Castro, JJ., concur.
G.R. No. 104235 November 18, 1993

SPOUSES
CESAR
&
SUTHIRA
ZALAMEA
and
LIANA
ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES,
INC., respondents.
Sycip, Salazar, Hernandez, Gatmaitan for petitioners.
Quisumbing, Torres & Evangelista for private-respondent.
NOCON, J.:
Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate them
in TWA Flight 007 departing from New York to Los Angeles on June 6,
1984 despite possession of confirmed tickets, petitioners filed an action
for damages before the Regional Trial Court of Makati, Metro Manila,
Branch 145. Advocating petitioner's position, the trial court categorically
ruled that respondent TransWorld Airlines (TWA) breached its contract of
carriage with petitioners and that said breach was "characterized by bad
faith." On appeal, however, the appellate court found that while there was
a breach of contract on respondent TWA's part, there was neither fraud
nor bad faith because under the Code of Federal Regulations by the Civil
Aeronautics Board of the United States of America it is allowed to
overbook flights.
The factual backdrop of the case is as follows:
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their
daughter, Liana Zalamea, purchased three (3) airline tickets from the
Manila agent of respondent TransWorld Airlines, Inc. for a flight to New
York to Los Angeles on June 6, 1984. The tickets of petitioners-spouses
were purchased at a discount of 75% while that of their daughter was a
full fare ticket. All three tickets represented confirmed reservations.
Upon their arrival in the Philippines, petitioners filed an action for

damages based on breach of contract of air carriage before the Regional
Trial Court of Makati, Metro Manila, Branch 145. As aforesaid, the lower
court ruled in favor of petitioners in its decision 1 dated January 9, 1989 the
dispositive portion of which states as follows:
WHEREFORE, judgment is hereby rendered ordering the
defendant to pay plaintiffs the following amounts:
(1) US $918.00, or its peso equivalent at the time of
payment representing the price of the tickets bought by
Suthira and Liana Zalamea from American Airlines, to
enable them to fly to Los Angeles from New York City;
(2) US $159.49, or its peso equivalent at the time of
payment, representing the price of Suthira Zalamea's
ticket for TWA Flight 007;
While in New York, on June 4, 1984, petitioners received notice of the

reconfirmation of their reservations for said flight. On the appointed date,
however, petitioners checked in at 10:00 a.m., an hour earlier than the
scheduled flight at 11:00 a.m. but were placed on the wait-list because
the number of passengers who had checked in before them had already
taken all the seats available on the flight. Liana Zalamea appeared as the
No. 13 on the wait-list while the two other Zalameas were listed as "No.
34, showing a party of two." Out of the 42 names on the wait list, the first
22 names were eventually allowed to board the flight to Los Angeles,
including petitioner Cesar Zalamea. The two others, on the other hand, at
No. 34, being ranked lower than 22, were not able to fly. As it were, those
holding full-fare tickets were given first priority among the wait-listed
passengers. Mr. Zalamea, who was holding the full-fare ticket of his
daughter, was allowed to board the plane; while his wife and daughter,
who presented the discounted tickets were denied boarding. According to
Mr. Zalamea, it was only later when he discovered the he was holding his
daughter's full-fare ticket.
SO ORDERED. 2
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her
daughter, could not be accommodated because it was also fully booked.
Thus, they were constrained to book in another flight and purchased two
tickets from American Airlines at a cost of Nine Hundred Eighteen
($918.00) Dollars.
On appeal, the respondent Court of Appeals held that moral damages are
recoverable in a damage suit predicated upon a breach of contract of
carriage only where there is fraud or bad faith. Since it is a matter of
record that overbooking of flights is a common and accepted practice of
airlines in the United States and is specifically allowed under the Code of
(3) Eight Thousand Nine Hundred Thirty-Four Pesos and

Fifty Centavos (P8,934.50, Philippine Currency,
representing the price of Liana Zalamea's ticket for TWA
Flight 007,
(4) Two Hundred Fifty Thousand Pesos (P250,000.00),
Philippine Currency, as moral damages for all the
plaintiffs'
(5) One Hundred Thousand Pesos (P100,000.00),
Philippine Currency, as and for attorney's fees; and
(6) The costs of suit.
Federal Regulations by the Civil Aeronautics Board, no fraud nor bad

faith could be imputed on respondent TransWorld Airlines.
Moreover, while respondent TWA was remiss in not informing petitioners
that the flight was overbooked and that even a person with a confirmed
reservation may be denied accommodation on an overbooked flight,
nevertheless it ruled that such omission or negligence cannot under the
circumstances be considered to be so gross as to amount to bad faith.
Finally, it also held that there was no bad faith in placing petitioners in the
wait-list along with forty-eight (48) other passengers where full-fare first
class tickets were given priority over discounted tickets.
The dispositive portion of the decision of respondent Court of
Appeals 3 dated October 25, 1991 states as follows:
WHEREFORE, in view of all the foregoing, the decision
under review is hereby MODIFIED in that the award of
moral and exemplary damages to the plaintiffs is
eliminated, and the defendant-appellant is hereby ordered
to pay the plaintiff the following amounts:
(1) US$159.49, or its peso equivalent at the time of the
payment, representing the price of Suthira Zalamea's
ticket for TWA Flight 007;
(2) US$159.49, or its peso equivalent at the time of the
payment, representing the price of Cesar Zalamea's ticket
for TWA Flight 007;
(3) P50,000.00 as and for attorney's fees.
(4) The costs of suit.
SO ORDERED. 4
Not satisfied with the decision, petitioners raised the case on petition for
review on certiorari and alleged the following errors committed by the
respondent Court of Appeals, to wit:
I.
. . . IN HOLDING THAT THERE WAS NO FRAUD OR
BAD FAITH ON THE PART OF RESPONDENT TWA
BECAUSE IT HAS A RIGHT TO OVERBOOK FLIGHTS.
II.
. . . IN ELIMINATING THE AWARD OF EXEMPLARY
DAMAGES.
III.
. . . IN NOT ORDERING THE REFUND OF LIANA
ZALAMEA'S TWA TICKET AND PAYMENT FOR THE
AMERICAN
AIRLINES
TICKETS. 5
That there was fraud or bad faith on the part of respondent airline when it
did not allow petitioners to board their flight for Los Angeles in spite of
confirmed tickets cannot be disputed. The U.S. law or regulation allegedly
authorizing overbooking has never been proved. Foreign laws do not
prove themselves nor can the courts take judicial notice of them. Like any
other fact, they must be alleged and proved. 6 Written law 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 with a certificate that such officer has custody. The certificate
may be made by a secretary of an 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. 7
Respondent TWA relied solely on the statement of Ms. Gwendolyn
Lather, its customer service agent, in her deposition dated January 27,
1986 that the Code of Federal Regulations of the Civil Aeronautics Board
allows overbooking. Aside from said statement, no official publication of
said code was presented as evidence. Thus, respondent court's finding
that overbooking is specifically allowed by the US Code of Federal
Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the
same is not applicable to the case at bar in accordance with the principle
of lex loci contractus which require that the law of the place where the
airline ticket was issued should be applied by the court where the
passengers are residents and nationals of the forum and the ticket is
issued in such State by the defendant airline. 8 Since the tickets were sold
and issued in the Philippines, the applicable law in this case would be
Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad
faith, entitling the passengers concerned to an award of moral damages.
In Alitalia Airways v. Court of Appeals, 9 where passengers with confirmed
bookings were refused carriage on the last minute, this Court held that when
an airline issues a ticket to a passenger confirmed on a particular flight, on a
certain date, a contract of carriage arises, and the passenger has every right
to expect that he would fly on that flight and on that date. If he does not, then
the carrier opens itself to a suit for breach of contract of carriage. Where an
airline had deliberately overbooked, it took the risk of having to deprive some
passengers of their seats in case all of them would show up for the check in.
For the indignity and inconvenience of being refused a confirmed seat on the
last minute, said passenger is entitled to an award of moral damages.
Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where private
respondent was not allowed to board the plane because her seat had already
been given to another passenger even before the allowable period for
passengers to check in had lapsed despite the fact that she had a confirmed
ticket and she had arrived on time, this Court held that petitioner airline acted
in bad faith in violating private respondent's rights under their contract of
carriage and is therefore liable for the injuries she has sustained as a result.
In fact, existing jurisprudence abounds with rulings where the breach of
contract of carriage amounts to bad faith. In Pan American World
Airways, Inc. v. Intermediate Appellate Court, 11 where a would-be
passenger had the necessary ticket, baggage claim and clearance from
immigration all clearly and unmistakably showing that she was, in fact,
included in the passenger manifest of said flight, and yet was denied
accommodation in said flight, this Court did not hesitate to affirm the lower
court's finding awarding her damages.
A contract to transport passengers is quite different in kind and degree
from any other contractual relation. So ruled this Court in Zulueta v. Pan
American World Airways, Inc. 12 This is so, for a contract of carriage
generates a relation attended with public duty a duty to provide public

service and convenience to its passengers which must be paramount to selfinterest or enrichment. Thus, it was also held that the switch of planes from
Lockheed 1011 to a smaller Boeing 707 because there were only 138
confirmed economy class passengers who could very well be accommodated
in the smaller planes, thereby sacrificing the comfort of its first class
passengers for the sake of economy, amounts to bad faith. Such inattention
and lack of care for the interest of its passengers who are entitled to its
utmost consideration entitles the passenger to an award of moral damages. 13
Even on the assumption that overbooking is allowed, respondent TWA is

still guilty of bad faith in not informing its passengers beforehand that it
could breach the contract of carriage even if they have confirmed tickets
if there was overbooking. Respondent TWA should have incorporated
stipulations on overbooking on the tickets issued or to properly inform its
passengers about these policies so that the latter would be prepared for
such eventuality or would have the choice to ride with another airline.
Respondent TWA contends that Exhibit I, the detached flight coupon
upon which were written the name of the passenger and the points of
origin and destination, contained such a notice. An examination of Exhibit
I does not bear this out. At any rate, said exhibit was not offered for the
purpose of showing the existence of a notice of overbooking but to show
that Exhibit I was used for flight 007 in first class of June 11, 1984 from
New York to Los Angeles.
Moreover, respondent TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority to discounted
tickets. While the petitioners had checked in at the same time, and held
confirmed tickets, yet, only one of them was allowed to board the plane
ten minutes before departure time because the full-fare ticket he was
holding was given priority over discounted tickets. The other two
petitioners were left behind.
It is respondent TWA's position that the practice of overbooking and the
airline system of boarding priorities are reasonable policies, which when
implemented do not amount to bad faith. But the issue raised in this case
is not the reasonableness of said policies but whether or not said policies
were incorporated or deemed written on petitioners' contracts of carriage.
Respondent TWA failed to show that there are provisions to that effect.
Neither did it present any argument of substance to show that petitioners
were duly apprised of the overbooked condition of the flight or that there
is a hierarchy of boarding priorities in booking passengers. It is evident
that petitioners had the right to rely upon the assurance of respondent
TWA, thru its agent in Manila, then in New York, that their tickets
represented confirmed seats without any qualification. The failure of
respondent TWA to so inform them when it could easily have done so
thereby enabling respondent to hold on to them as passengers up to the
last minute amounts to bad faith. Evidently, respondent TWA placed its
self-interest over the rights of petitioners under their contracts of carriage.
Such conscious disregard of petitioners' rights makes respondent TWA
liable for moral damages. To deter breach of contracts by respondent
TWA in similar fashion in the future, we adjudge respondent TWA liable
for exemplary damages, as well.
Petitioners also assail the respondent court's decision not to require the
refund of Liana Zalamea's ticket because the ticket was used by her
father. On this score, we uphold the respondent court. Petitioners had not
shown with certainty that the act of respondent TWA in allowing Mr.
Zalamea to use the ticket of her daughter was due to inadvertence or
deliberate act. Petitioners had also failed to establish that they did not
accede to said agreement. The logical conclusion, therefore, is that both
petitioners and respondent TWA agreed, albeit impliedly, to the course of
action taken.
The respondent court erred, however, in not ordering the refund of the
American Airlines tickets purchased and used by petitioners Suthira and
Liana. The evidence shows that petitioners Suthira and Liana were
constrained to take the American Airlines flight to Los Angeles not
because they "opted not to use their TWA tickets on another TWA flight"
but because respondent TWA could not accommodate them either on the
next TWA flight which was also fully booked. 14 The purchase of the
American Airlines tickets by petitioners Suthira and Liana was the
consequence of respondent TWA's unjustifiable breach of its contracts of
carriage with petitioners. In accordance with Article 2201, New Civil Code,
respondent TWA should, therefore, be responsible for all damages which
may be reasonably attributed to the non-performance of its obligation. In the
previously cited case of Alitalia Airways v. Court of Appeals, 15 this Court
explicitly held that a passenger is entitled to be reimbursed for the cost of the
tickets he had to buy for a flight to another airline. Thus, instead of simply
being refunded for the cost of the unused TWA tickets, petitioners should be
awarded the actual cost of their flight from New York to Los Angeles. On this
score, we differ from the trial court's ruling which ordered not only the
reimbursement of the American Airlines tickets but also the refund of the
unused TWA tickets. To require both prestations would have enabled
petitioners to fly from New York to Los Angeles without any fare being paid.
The award to petitioners of attorney's fees is also justified under Article

2208(2) of the Civil Code which allows recovery when the defendant's act
or omission has compelled plaintiff to litigate or to incur expenses to
protect his interest. However, the award for moral damages and
exemplary damages by the trial court is excessive in the light of the fact
that only Suthira and Liana Zalamea were actually "bumped off." An
award of P50,000.00 moral damages and another P50,000.00 exemplary
damages would suffice under the circumstances obtaining in the instant
case.
WHEREFORE, the petition is hereby GRANTED and the decision of the
respondent Court of Appeals is hereby MODIFIED to the extent of
adjudging respondent TransWorld Airlines to pay damages to petitioners
in the following amounts, to wit:
(1) US$918.00 or its peso equivalent at the time of payment representing
the price of the tickets bought by Suthira and Liana Zalamea from
American Airlines, to enable them to fly to Los Angeles from New York
City;
(2) P50,000.00 as moral damages;
(3) P50,000.00 as exemplary damages;
(4) P50,000.00 as attorney's fees; and
(5) Costs of suit.
SO ORDERED.
Branch 28, in Civil Case No. 3026AF. The assailed Decision disposed
as follows:
WHEREFORE, this Court declares the marriage between

Grace J. Garcia and Rederick A. Recio solemnized on January
12, 1994 at Cabanatuan City as dissolved and both parties can
now remarry under existing and applicable laws to any and/or
both parties.[3]
[G.R. No. 138322. October 2, 2001]
The assailed Order denied reconsideration of the above-quoted

Decision.
The Facts
GRACE J. GARCIA, a.k.a. GRACE J. GARCIARECIO, petitioner,

vs.
REDERICK
A.
RECIO, respondent.
DECISION
PANGANIBAN, J.:
A divorce obtained abroad by an alien may be recognized in our

jurisdiction, provided such decree is valid according to the national
law of the foreigner. However, the divorce decree and the governing
personal law of the alien spouse who obtained the divorce must be
proven. Our courts do not take judicial notice of foreign laws and
judgments; hence, like any other facts, both the divorce decree and the
national law of the alien must be alleged and proven according to our
law on evidence.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of
Court, seeking to nullify the January 7, 1999 Decision [1] and the March
24, 1999 Order[2] of the Regional Trial Court of Cabanatuan City,
Rederick A. Recio, a Filipino, was married to Editha Samson, an

Australian citizen, in Malabon, Rizal, on March 1, 1987.[4] They lived
together as husband and wife in Australia. On May 18, 1989, [5] a
decree of divorce, purportedly dissolving the marriage, was issued by
an Australian family court.
On June 26, 1992, respondent became an Australian citizen, as
shown by a Certificate of Australian Citizenship issued by the
Australian government.[6] Petitioner -- a Filipina -- and respondent
were married on January 12, 1994 in Our Lady of Perpetual Help
Church in Cabanatuan City.[7] In their application for a marriage
license, respondent was declared as single and Filipino.[8]
Starting October 22, 1995, petitioner and respondent lived
separately without prior judicial dissolution of their marriage. While
the two were still in Australia, their conjugal assets were divided on
May 16, 1996, in accordance with their Statutory Declarations secured
in Australia.[9]
On March 3, 1998, petitioner filed a Complaint for Declaration of
Nullity of Marriage[10] in the court a quo, on the ground of bigamy -respondent allegedly had a prior subsisting marriage at the time he
married her on January 12, 1994. She claimed that she learned of
respondents marriage to Editha Samson only in November, 1997.
In his Answer, respondent averred that, as far back as 1993, he had

revealed to petitioner his prior marriage and its subsequent dissolution.
[11]
He contended that his first marriage to an Australian citizen had
been validly dissolved by a divorce decree obtained in Australia in
1989;[12] thus, he was legally capacitated to marry petitioner in 1994.
On July 7, 1998 -- or about five years after the couples wedding
and while the suit for the declaration of nullity was pending -respondent was able to secure a divorce decree from a family court in
Sydney, Australia because the marriage ha[d] irretrievably broken
down.[13]
Respondent prayed in his Answer that the Complaint be dismissed
on the ground that it stated no cause of action. [14] The Office of the
Solicitor General agreed with respondent.[15] The court marked and
admitted the documentary evidence of both parties. [16] After they
submitted their respective memoranda, the case was submitted for
resolution.[17]
Thereafter, the trial court rendered the assailed Decision and
Order.
Ruling of the Trial Court
The trial court declared the marriage dissolved on the ground that
the divorce issued in Australia was valid and recognized in the
Philippines. It deemed the marriage ended, but not on the basis of any
defect in an essential element of the marriage; that is, respondents
alleged lack of legal capacity to remarry. Rather, it based its Decision
on the divorce decree obtained by respondent. The Australian divorce
had ended the marriage; thus, there was no more marital union to
nullify or annul.
Hence, this Petition.[18]
Issues
Petitioner submits the following issues for our consideration:

1
The trial court gravely erred in finding that the divorce decree
obtained in Australia by the respondent ipso facto terminated
his first marriage to Editha Samson thereby capacitating him to
contract a second marriage with the petitioner.
2
The failure of the respondent, who is now a naturalized

Australian, to present a certificate of legal capacity to marry
constitutes absence of a substantial requisite voiding the
petitioners marriage to the respondent
3
The trial court seriously erred in the application of Art. 26 of

the Family Code in this case.
4
The trial court patently and grievously erred in disregarding

Arts. 11, 13, 21, 35, 40, 52 and 53 of the Family Code as the
applicable provisions in this case.
5
The trial court gravely erred in pronouncing that the divorce

decree obtained by the respondent in Australia ipso
facto capacitated the parties to remarry, without first securing a
recognition of the judgment granting the divorce decree before
our courts.[19]
The Petition raises five issues, but for purposes of this Decision,
we shall concentrate on two pivotal ones: (1) whether the divorce
between respondent and Editha Samson was proven, and (2) whether
respondent was proven to be legally capacitated to marry

petitioner. Because of our ruling on these two, there is no more
necessity to take up the rest.
The Courts Ruling
The Petition is partly meritorious.
First Issue:
Proving the Divorce Between Respondent and Editha Samson
Petitioner assails the trial courts recognition of the divorce
between respondent and Editha Samson. Citing Adong v. Cheong Seng
Gee,[20] petitioner argues that the divorce decree, like any other foreign
judgment, may be given recognition in this jurisdiction only upon
proof of the existence of (1) the foreign law allowing absolute divorce
and (2) the alleged divorce decree itself. She adds that respondent
miserably failed to establish these elements.
Petitioner adds that, based on the first paragraph of Article 26 of
the Family Code, marriages solemnized abroad are governed by the
law of the place where they were celebrated (the lex loci
celebrationis). In effect, the Code requires the presentation of the
foreign law to show the conformity of the marriage in question to the
legal requirements of the place where the marriage was performed.
At the outset, we lay the following basic legal principles as the
take-off points for our discussion. Philippine law does not provide for
absolute divorce; hence, our courts cannot grant it.[21] A marriage
between two Filipinos cannot be dissolved even by a divorce obtained
abroad, because of Articles 15[22] and 17[23] of the Civil Code.[24] In
mixed marriages involving a Filipino and a foreigner, Article 26 [25] of
the Family Code allows the former to contract a subsequent marriage
in case the divorce is validly obtained abroad by the alien spouse
capacitating him or her to remarry.[26] A divorce obtained abroad by a
couple, who are both aliens, may be recognized in the Philippines,

provided it is consistent with their respective national laws.[27]
A comparison between marriage and divorce, as far as pleading
and proof are concerned, can be made. Van Dorn v. Romillo
Jr. decrees that aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to
their national law.[28] Therefore, before a foreign divorce decree can be
recognized by our courts, the party pleading it must prove the divorce
as a fact and demonstrate its conformity to the foreign law allowing it.
[29]
Presentation solely of the divorce decree is insufficient.
Divorce as a Question of Fact

Petitioner insists that before a divorce decree can be admitted in
evidence, it must first comply with the registration requirements under
Articles 11, 13 and 52 of the Family Code. These articles read as
follows:
ART. 11. Where a marriage license is required, each of the

contracting parties shall file separately a sworn application for
such license with the proper local civil registrar which shall
specify the following:
xxxxxxxxx
(5) If previously married, how, when and where the previous

marriage was dissolved or annulled;
xxxxxxxxx
ART. 13. In case either of the contracting parties has been

previously married, the applicant shall be required to
ART. 13. In case either of the contracting parties has been
previously married, the applicant shall be required to furnish,
instead of the birth or baptismal certificate required in the last
preceding article, the death certificate of the deceased spouse
or the judicial decree of the absolute divorce, or the judicial

decree of annulment or declaration of nullity of his or her
previous marriage. x x x.
ART. 52. The judgment of annulment or of absolute nullity of
the marriage, the partition and distribution of the properties of
the spouses, and the delivery of the childrens presumptive
legitimes shall be recorded in the appropriate civil registry and
registries of property; otherwise, the same shall not affect their
persons.
Respondent, on the other hand, argues that the Australian divorce
decree is a public document -- a written official act of an Australian
family court. Therefore, it requires no further proof of its authenticity
and due execution.
Respondent is getting ahead of himself. Before a foreign judgment
is given presumptive evidentiary value, the document must first be
presented and admitted in evidence.[30] A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best evidence of a
judgment is the judgment itself.[31] The decree purports to be a written
act or record of an act of an official body or tribunal of a foreign
country.[32]
Under Sections 24 and 25 of Rule 132, on the other hand, a
writing or document may be proven as a public or official record of a
foreign country by either (1) an official publication or (2) a copy
thereof attested[33] by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must
be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the
foreign country in which the record is kept and (b) authenticated by the
seal of his office. [34]
The divorce decree between respondent and Editha Samson
appears to be an authentic one issued by an Australian family court.
[35]
However, appearance is not sufficient; compliance with the
aforementioned rules on evidence must be demonstrated.
Fortunately for respondents cause, when the divorce decree of

May 18, 1989 was submitted in evidence, counsel for petitioner
objected, not to its admissibility, but only to the fact that it had not
been registered in the Local Civil Registry of Cabanatuan City.[36] The
trial court ruled that it was admissible, subject to petitioners
qualification.[37] Hence, it was admitted in evidence and accorded
weight by the judge. Indeed, petitioners failure to object properly
rendered the divorce decree admissible as a written act of the Family
Court of Sydney, Australia.[38]
Compliance with the quoted articles (11, 13 and 52) of the Family
Code is not necessary; respondent was no longer bound by Philippine
personal laws after he acquired Australian citizenship in 1992.
[39]
Naturalization is the legal act of adopting an alien and clothing him
with the political and civil rights belonging to a citizen. [40] Naturalized
citizens, freed from the protective cloak of their former states, don the
attires of their adoptive countries. By becoming an Australian,
respondent severed his allegiance to the Philippines and the vinculum
juris that had tied him to Philippine personal laws.
Burden of Proving Australian Law

Respondent contends that the burden to prove Australian divorce
law falls upon petitioner, because she is the party challenging the
validity of a foreign judgment. He contends that petitioner was
satisfied with the original of the divorce decree and was cognizant of
the marital laws of Australia, because she had lived and worked in that
country for quite a long time. Besides, the Australian divorce law is
allegedly known by Philippine courts; thus, judges may take judicial
notice of foreign laws in the exercise of sound discretion.
We are not persuaded. The burden of proof lies with the party who
alleges the existence of a fact or thing necessary in the prosecution or
defense of an action.[41] In civil cases, plaintiffs have the burden of
proving the material allegations of the complaint when those are
denied by the answer; and defendants have the burden of proving the
material allegations in their answer when they introduce new matters.
[42]
Since the divorce was a defense raised by respondent, the burden of
proving the pertinent Australian law validating it falls squarely upon
him.
It is well-settled in our jurisdiction that our courts cannot take

judicial notice of foreign laws.[43] Like any other facts, they must be
alleged and proved. Australian marital laws are not among those
matters that judges are supposed to know by reason of their judicial
function.[44] The power of judicial notice must be exercised with
caution, and every reasonable doubt upon the subject should be
resolved in the negative.
Second Issue: Respondents Legal Capacity to Remarry
Petitioner contends that, in view of the insufficient proof of the
divorce, respondent was legally incapacitated to marry her in
1994. Hence, she concludes that their marriage was void ab initio.
Respondent replies that the Australian divorce decree, which was
validly admitted in evidence, adequately established his legal capacity
to marry under Australian law.
Respondents contention is untenable. In its strict legal
sense, divorce means the legal dissolution of a lawful union for a cause
arising after marriage. But divorces are of different types. The two
basic ones are (1) absolute divorce or a vinculo matrimonii and (2)
limited divorce or a mensa et thoro. The first kind terminates the
marriage, while the second suspends it and leaves the bond in full
force.[45] There is no showing in the case at bar which type of divorce
was procured by respondent.
Respondent presented a decree nisi or an interlocutory decree -- a
conditional or provisional judgment of divorce. It is in effect the same
as a separation from bed and board, although an absolute divorce may
follow after the lapse of the prescribed period during which no
reconciliation is effected.[46]
Even after the divorce becomes absolute, the court may under
some foreign statutes and practices, still restrict remarriage. Under
some other jurisdictions, remarriage may be limited by statute; thus,
the guilty party in a divorce which was granted on the ground of
adultery may be prohibited from marrying again. The court may allow
a remarriage only after proof of good behavior.[47]
On its face, the herein Australian divorce decree contains a

restriction that reads:
1. A party to a marriage who marries again before this decree
becomes absolute (unless the other party has died) commits the
offence of bigamy.[48]
This quotation bolsters our contention that the divorce obtained by

respondent may have been restricted. It did not absolutely establish his
legal capacity to remarry according to his national law. Hence, we find
no basis for the ruling of the trial court, which erroneously assumed
that the Australian divorce ipso facto restored respondents capacity to
remarry despite the paucity of evidence on this matter.
We also reject the claim of respondent that the divorce decree
raises a disputable presumption or presumptive evidence as to his civil
status based on Section 48, Rule 39[49] of the Rules of Court, for the
simple reason that no proof has been presented on the legal effects of
the divorce decree obtained under Australian laws.
Significance of the Certificate of Legal Capacity

Petitioner argues that the certificate of legal capacity required by
Article 21 of the Family Code was not submitted together with the
application for a marriage license. According to her, its absence is
proof that respondent did not have legal capacity to remarry.
We clarify. To repeat, the legal capacity to contract marriage is
determined by the national law of the party concerned. The certificate
mentioned in Article 21 of the Family Code would have been
sufficient to establish the legal capacity of respondent, had he duly
presented it in court. A duly authenticated and admitted certificate is
prima facie evidence of legal capacity to marry on the part of the alien
applicant for a marriage license.[50]
As it is, however, there is absolutely no evidence that proves
respondents legal capacity to marry petitioner. A review of the records
before this Court shows that only the following exhibits were
presented before the lower court: (1) for petitioner: (a) Exhibit A
Complaint;[51] (b) Exhibit B Certificate of Marriage Between Rederick
A. Recio (Filipino-Australian) and Grace J. Garcia (Filipino) on
January 12, 1994 in Cabanatuan City, Nueva Ecija;[52] (c) Exhibit C
Certificate of Marriage Between Rederick A. Recio (Filipino) and

Editha D. Samson (Australian) on March 1, 1987 in Malabon, Metro
Manila;[53] (d) Exhibit D Office of the City Registrar of Cabanatuan
City Certification that no information of annulment between Rederick
A. Recio and Editha D. Samson was in its records; [54] and (e) Exhibit E
Certificate of Australian Citizenship of Rederick A. Recio; [55] (2) for
respondent: (a) Exhibit 1 -- Amended Answer; [56] (b) Exhibit 2 Family
Law Act 1975 Decree Nisi of Dissolution of Marriage in the Family
Court of Australia;[57] (c) Exhibit 3 Certificate of Australian Citizenship
of Rederick A. Recio;[58] (d) Exhibit 4 Decree Nisi of Dissolution of
Marriage in the Family Court of Australia Certificate; [59] and Exhibit 5
-- Statutory Declaration of the Legal Separation Between Rederick A.
Recio and Grace J. Garcia Recio since October 22, 1995.[60]
Based on the above records, we cannot conclude that respondent,
who was then a naturalized Australian citizen, was legally capacitated
to marry petitioner on January 12, 1994. We agree with petitioners
contention that the court a quo erred in finding that the divorce decree
ipso facto clothed respondent with the legal capacity to remarry
without requiring him to adduce sufficient evidence to show the
Australian personal law governing his status; or at the very least, to
prove his legal capacity to contract the second marriage.
Neither can we grant petitioners prayer to declare her marriage to
respondent null and void on the ground of bigamy. After all, it may
turn out that under Australian law, he was really capacitated to marry
petitioner as a direct result of the divorce decree. Hence, we believe
that the most judicious course is to remand this case to the trial court to
receive evidence, if any, which show petitioners legal capacity to
marry petitioner. Failing in that, then the court a quo may declare a
nullity of the parties marriage on the ground of bigamy, there being
already in evidence two existing marriage certificates, which were
both obtained in the Philippines, one in Malabon, Metro Manila dated
March 1, 1987 and the other, in Cabanatuan City dated January 12,
1994.
WHEREFORE, in the interest of orderly procedure and
substantial justice, we REMAND the case to the court a quo for the
purpose of receiving evidence which conclusively show respondents
legal capacity to marry petitioner; and failing in that, of declaring the
parties marriage void on the ground of bigamy, as above discussed. No

costs.
SO ORDERED.
The petitioner Asiavest Merchant Bankers (M) Berhad is a

corporation organized under the laws of Malaysia while
private respondent Philippine National Construction
Corporation is a corporation duly incorporated and existing
under Philippine laws.
It appears that sometime in 1983, petitioner initiated a suit
for collection against private respondent, then known as
Construction and Development Corporation of the Philippines,
before the High Court of Malaya in Kuala Lumpur entitled
Asiavest Merchant Bankers (M) Berhad v. Asiavest CDCP
Sdn. Bhd. and Construction and Development Corporation of
the Philippines.[3]
[G.R. No. 110263. July 20, 2001]
ASIAVEST
MERCHANT
BANKERS
(M)
BERHAD, petitioner, vs. COURT OF APPEALS
and PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION, respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the

Decision[1] of the Court of Appeals dated May 19, 1993 in CAG.R. CV No. 35871 affirming the Decision [2] dated October 14,
1991 of the Regional Trial Court of Pasig, Metro Manila,
Branch 168 in Civil Case No. 56368 which dismissed the
complaint of petitioner Asiavest Merchant Bankers (M)
Berhad for the enforcement of the money judgment of the
High Court of Malaya in Kuala Lumpur against private
respondent Philippine National Construction Corporation.
Petitioner sought to recover the indemnity of the

performance bond it had put up in favor of private respondent
to guarantee the completion of the Felda Project and the nonpayment of the loan it extended to Asiavest-CDCP Sdn. Bhd.
for the completion of Paloh Hanai and Kuantan By-Pass
Project.
On September 13, 1985, the High Court of Malaya
(Commercial Division) rendered judgment in favor of the
petitioner and against the private respondent which is also
designated therein as the 2 nd Defendant. The judgment reads in
full:
SUIT NO. C638 of 1983
Between
Asiavest Merchant Bankers (M) Berhad Plaintiffs
And
1. Asiavest-CDCP Sdn. Bhd.
2. Construction & Development
Corporation of the Philippines Defendant
JUDGMENT
The 2nd Defendant having entered appearance herein and the
Court having under Order 14, rule 3 ordered that judgment as
hereinafter provided be entered for the Plaintiffs against the
2ndDefendant.
IT IS THIS DAY ADJUDGED that the 2nd defendant do pay
the Plaintiffs the sum of $5,108,290.23 (Ringgit Five million
one hundred and eight thousand two hundred and ninety and
Sen twenty-three) together with interest at the rate of 12% per
annum on: (i) the sum of $2,586,866.91 from the 2 nd day of March 1983 to the
date of payment; and
(ii) the sum of $2,521,423.32 from the 11th day of March 1983 to
the date of payment; and $350.00 (Ringgit Three Hundred and
Fifty) costs.
Dated the 13th day of September, 1985.

Senior Assistant Registrar,
High Court, Kuala Lumpur
This Judgment is filed by Messrs. Skrine & Co., 3 rd Floor,

Straits Trading Building, No. 4, Leboh Pasar, Besar, Kuala
Lumpur, Solicitors for the Plaintiffs abovenamed.
(VP/Ong/81194.7/83)[4]
On the same day, September 13, 1985, the High Court of
Malaya issued an Order directing the private respondent (also
designated therein as the 2nd Defendant) to pay petitioner
interest on the sums covered by the said Judgment, thus:
SUIT NO. C638 OF 1983
Between
Asiavest Merchant Bankers (M) Berhad Plaintiffs
And
1. Asiavest-CDCP Sdn. Bhd.
2. Construction & Development
Corporation of the Philippines Defendants
BEFORE THE SENIOR ASSISTANT REGISTRAR
CIK SUSILA S. PARAM
THIS 13th DAY OF SEPTEMBER, 1985 IN CHAMBERS
ORDER
Upon the application of Asiavest Merchant Bankers (M)
Berhad, the Plaintiffs in this action AND UPON READING
the Summons in Chambers dated the 16 th day of August, 1984

and the Affidavit of Lee Foong Mee affirmed on the 14 th day
of August 1984 both filed herein AND UPON HEARING Mr.
T. Thomas of Counsel for the Plaintiffs and Mr. Khaw Chay
Tee of Counsel for the 2nd Defendant abovenamed on the
26th day of December 1984 IT WAS ORDERED that the
Plaintiffs be at liberty to sign final judgment against the 2nd
Defendant for the sum of $5,108.290.23 AND IT WAS
ORDERED that the 2nd Defendant do pay the Plaintiffs the
costs of suit at $350.00 AND IT WAS FURTHER
ORDERED that the plaintiffs be at liberty to apply for
payment of interest AND upon the application of the Plaintiffs
for payment of interest coming on for hearing on the 1s t day of
August in the presence of Mr. Palpanaban Devarajoo of
Counsel for the Plaintiffs and Mr. Khaw Chay Tee of Counsel
for the 2nd Defendant above-named AND UPON HEARING
Counsel as aforesaid BY CONSENT IT WAS ORDERED that
the 2nd Defendant do pay the Plaintiffs interest at a rate to be
assessed AND the same coming on for assessment this day in
the presence of Mr. Palpanaban Devarajoo of Counsel for the
Plaintiffs and Mr. Khaw Chay Tee of Counsel for the
2nd Defendant AND UPON HEARING Counsel as
aforesaid BY
CONSENT IT IS ORDERED that
the
2nd Defendant do pay the Plaintiffs interest at the rate of 12%
per annum on:
(i) the sum of $2,586,866.91 from the 2 nd day of March 1983 to the
date of payment; and
(ii) the sum of $2,521,423.32 from the 11th day of March 1983 to
the date of Payment.
Dated the 13th day of September, 1985.
Senior Assistant Registrar,

High Court, Kuala Lumpur.[5]
Following unsuccessful attempts[6] to secure payment from
private respondent under the judgment, petitioner initiated on
September 5, 1988 the complaint before Regional Trial Court
of Pasig, Metro Manila, to enforce the judgment of the High
Court of Malaya.[7]
Private respondent sought the dismissal of the case via a
Motion to Dismiss filed on October 5, 1988, contending that
the alleged judgment of the High Court of Malaya should be
denied recognition or enforcement since on its face, it is
tainted with want of jurisdiction, want of notice to private
respondent, collusion and/or fraud, and there is a clear mistake
of law or fact.[8]Dismissal was, however, denied by the trial
court considering that the grounds relied upon are not the
proper grounds in a motion to dismiss under Rule 16 of the
Revised Rules of Court.[9]
On May 22, 1989, private respondent filed its Answer with
Compulsory Counterclaim[10] and therein raised the grounds it
brought up in its motion to dismiss. In its Reply [11] filed on June
8, 1989, the petitioner contended that the High Court of
Malaya acquired jurisdiction over the person of private
respondent by its voluntary submission to the courts
jurisdiction through its appointed counsel, Mr. Khay Chay
Tee. Furthermore, private respondents counsel waived any and
all objections to the High Courts jurisdiction in a pleading filed
before the court.
In due time, the trial court rendered its Decision dated

October 14, 1991 dismissing petitioners complaint. Petitioner
interposed an appeal with the Court of Appeals, but the
appellate court dismissed the same and affirmed the decision
of the trial court in a Decision dated May 19, 1993.
Hence, the instant petition which is anchored on two (2)
assigned errors,[12] to wit:
I
THE COURT OF APPEALS ERRED IN HOLDING

THAT THE MALAYSIAN COURT DID NOT ACQUIRE
PERSONAL
JURISDICTION
OVER
PNCC,
NOTWITHSTANDING THAT (a) THE FOREIGN
COURT HAD SERVED SUMMONS ON PNCC AT ITS
MALAYSIA OFFICE, AND (b) PNCC ITSELF
APPEARED BY COUNSEL IN THE CASE BEFORE
THAT COURT.
II
THE COURT OF APPEALS ERRED IN DENYING

RECOGNITION AND ENFORCEMENT TO (SIC) THE
MALAYSIAN COURT JUDGMENT.
Generally, in the absence of a special compact, no

sovereign is bound to give effect within its dominion to a
judgment rendered by a tribunal of another country;
[13]
however, the rules of comity, utility and convenience of
nations have established a usage among civilized states by
which final judgments of foreign courts of competent
jurisdiction are reciprocally respected and rendered efficacious
under certain conditions that may vary in different countries. [14]
In this jurisdiction, a valid judgment rendered by a foreign
tribunal may be recognized insofar as the immediate parties
and the underlying cause of action are concerned so long as it
is convincingly shown that there has been an opportunity for a
full and fair hearing before a court of competent jurisdiction;
that the trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the
defendant and under a system of jurisprudence likely to secure
an impartial administration of justice; and that there is nothing
to indicate either a prejudice in court and in the system of laws
under which it is sitting or fraud in procuring the judgment. [15]
A foreign judgment is presumed to be valid and binding in
the country from which it comes, until a contrary showing, on
the basis of a presumption of regularity of proceedings and the
giving of due notice in the foreign forum. Under Section 50(b),
[16]
Rule 39 of the Revised Rules of Court, which was the
governing law at the time the instant case was decided by the
trial court and respondent appellate court, a judgment, against
a person, of a tribunal of a foreign country having jurisdiction
to pronounce the same is presumptive evidence of a right as
between the parties and their successors in interest by a
subsequent title. The judgment may, however, be assailed by
evidence of want of jurisdiction, want of notice to the party,

collusion, fraud, or clear mistake of law or fact. In addition,
under Section 3(n), Rule 131 of the Revised Rules of Court, a
court, whether in the Philippines or elsewhere, enjoys the
presumption that it was acting in the lawful exercise of its
jurisdiction. Hence, once the authenticity of the foreign
judgment is proved, the party attacking a foreign judgment, is
tasked with the burden of overcoming its presumptive validity.
of its claim;[22] that the matter was then heard before the High
Court of Kuala Lumpur in a series of dates where private
respondent was represented by counsel; [23] and that the end
result of all these proceedings is the judgment sought to be
enforced.
In the instant case, petitioner sufficiently established the

existence of the money judgment of the High Court of Malaya
by the evidence it offered. Vinayak Prabhakar Pradhan,
presented as petitioners sole witness, testified to the effect that
he is in active practice of the law profession in Malaysia; [17] that
he was connected with Skrine and Company as Legal Assistant
up to 1981;[18]that private respondent, then known as
Construction and Development Corporation of the Philippines,
was sued by his client, Asiavest Merchant Bankers (M)
Berhad, in Kuala Lumpur;[19] that the writ of summons were
served on March 17, 1983 at the registered office of private
respondent and on March 21, 1983 on Cora S. Deala, a
financial planning officer of private respondent for Southeast
Asia operations;[20] that upon the filing of the case, Messrs.
Allen and Gledhill, Advocates and Solicitors, with address at
24th Floor, UMBC Building, Jalan Sulaiman, Kuala Lumpur,
entered their conditional appearance for private respondent
questioning the regularity of the service of the writ of
summons but subsequently withdrew the same when it realized
that the writ was properly served; [21] that because private
respondent failed to file a statement of defense within two (2)
weeks, petitioner filed an application for summary judgment
and submitted affidavits and documentary evidence in support
(a) A certified and authenticated copy of the Judgment promulgated

by the Malaysian High Court dated September 13, 1985
directing private respondent to pay petitioner the sum of
$5,108,290.23 Malaysian Ringgit plus interests from March
1983 until fully paid;[24]
In addition to the said testimonial evidence, petitioner

offered the following documentary evidence:
(b) A certified and authenticated copy of the Order dated September

13, 1985 issued by the Malaysian High Court in Civil Suit No.
C638 of 1983;[25]
(c) Computation of principal and interest due as of January 31,
1990 on the amount adjudged payable to petitioner by private
respondent;[26]
(d) Letter and Statement of Account of petitioners counsel in
Malaysia indicating the costs for prosecuting and implementing
the Malaysian High Courts Judgment;[27]
(e) Letters between petitioners Malaysian counsel, Skrine and Co.,
and its local counsel, Sycip Salazar Law Offices, relative to
institution of the action in the Philippines;[28]
(f) Billing Memorandum of Sycip Salazar Law Offices dated
January 2, 1990 showing attorneys fees paid by and due from
petitioner;[29]
(g) Statement of Claim, Writ of Summons and Affidavit of Service

of such writ in petitioners suit against private respondent before
the Malaysian High Court;[30]
(h) Memorandum of Conditional Appearance dated March 28, 1983
filed by counsel for private respondent with the Malaysian High
Court;[31]
(i) Summons in Chambers and Affidavit of Khaw Chay Tee,
counsel for private respondent, submitted during the
proceedings before the Malaysian High Court;[32]
(j) Record of the Courts Proceedings in Civil Case No. C638 of
1983;[33]
(k) Petitioners verified Application for Summary Judgment dated
August 14, 1984;[34] and
(l) Letter dated November 6, 1985 from petitioners Malaysian
counsel to private respondents counsel in Malaysia.[35]
Having thus proven, through the foregoing evidence, the

existence and authenticity of the foreign judgment, said
foreign judgment enjoys presumptive validity and the burden
then fell upon the party who disputes its validity, herein private
respondent, to prove otherwise.
Private respondent failed to sufficiently discharge the
burden that fell upon it to prove by clear and convincing
evidence the grounds which it relied upon to prevent
enforcement of the Malaysian High Court judgment, namely,
(a) that jurisdiction was not acquired by the Malaysian Court
over the person of private respondent due to alleged improper
service of summons upon private respondent and the alleged
lack of authority of its counsel to appear and represent private
respondent in the suit; (b) the foreign judgment is allegedly
tainted by evident collusion, fraud and clear mistake of fact or

law; and (c) not only were the requisites for enforcement or
recognition allegedly not complied with but also that the
Malaysian judgment is allegedly contrary to the Constitutional
prescription that the every decision must state the facts and law
on which it is based.[36]
Private respondent relied solely on the testimony of its two
(2) witnesses, namely, Mr. Alfredo N. Calupitan, an accountant
of private respondent, and Virginia Abelardo, Executive
Secretary and a member of the staff of the Corporate
Secretariat Section of the Corporate Legal Division, of private
respondent, both of whom failed to shed light and amplify its
defense or claim for non-enforcement of the foreign judgment
against it.
Mr. Calupitans testimony centered on the following: that
from January to December 1982 he was assigned in Malaysia
as Project Comptroller of the Pahang Project Package A and B
for road construction under the joint venture of private
respondent and Asiavest Holdings;[37] that under the joint
venture, Asiavest Holdings would handle the financial aspect
of the project, which is fifty-one percent (51%) while private
respondent would handle the technical aspect of the project, or
forty-nine percent (49%);[38] and, that Cora Deala was not
authorized to receive summons for and in behalf of the private
respondent.[39] Ms. Abelardos testimony, on the other hand,
focused on the following: that there was no board resolution
authorizing Allen and Gledhill to admit all the claims of
petitioner in the suit brought before the High Court of Malaya,
[40]
though on cross-examination she admitted that Allen and
Gledhill were the retained lawyers of private respondent in

Malaysia.[41]
The foregoing reasons or grounds relied upon by private
respondent in preventing enforcement and recognition of the
Malaysian judgment primarily refer to matters of remedy and
procedure taken by the Malaysian High Court relative to the
suit for collection initiated by petitioner. Needless to stress, the
recognition to be accorded a foreign judgment is not
necessarily affected by the fact that the procedure in the courts
of the country in which such judgment was rendered differs
from that of the courts of the country in which the judgment is
relied on.[42] Ultimately, matters of remedy and procedure such
as those relating to the service of summons or court process
upon the defendant, the authority of counsel to appear and
represent a defendant and the formal requirements in a
decision are governed by the lex fori or the internal law of the
forum,[43] i.e., the law of Malaysia in this case.
In this case, it is the procedural law of Malaysia where the
judgment was rendered that determines the validity of the
service of court process on private respondent as well as other
matters raised by it. As to what the Malaysian procedural law
is, remains a question of fact, not of law. It may not be taken
judicial notice of and must be pleaded and proved like any
other fact. Sections 24 and 25 of Rule 132 of the Revised
Rules of Court provide that it may be evidenced by an official
publication or by a duly attested or authenticated copy
thereof. It was then incumbent upon private respondent to
present evidence as to what that Malaysian procedural law is
and to show that under it, the assailed service of summons
upon a financial officer of a corporation, as alleged by it, is
invalid. It did not. Accordingly, the presumption of validity

and regularity of service of summons and the decision
thereafter rendered by the High Court of Malaya must stand. [44]
On the matter of alleged lack of authority of the law firm
of Allen and Gledhill to represent private respondent, not only
did the private respondents witnesses admit that the said law
firm of Allen and Gledhill were its counsels in its transactions
in Malaysia,[45] but of greater significance is the fact that
petitioner offered in evidence relevant Malaysian
jurisprudence[46] to the effect that (a) it is not necessary under
Malaysian law for counsel appearing before the Malaysian
High Court to submit a special power of attorney authorizing
him to represent a client before said court, (b) that counsel
appearing before the Malaysian High Court has full authority
to compromise the suit, and (c) that counsel appearing before
the Malaysian High Court need not comply with certain prerequisites as required under Philippine law to appear and
compromise judgments on behalf of their clients before said
court.[47]
Furthermore, there is no basis for or truth to the appellate
courts conclusion that the conditional appearance of private
respondents counsel who was allegedly not authorized to
appear and represent, cannot be considered as voluntary
submission to the jurisdiction of the High Court of Malaya,
inasmuch as said conditional appearance was not premised on
the alleged lack of authority of said counsel but the conditional
appearance was entered to question the regularity of the
service of the writ of summons. Such conditional appearance
was in fact subsequently withdrawn when counsel realized that
the writ was properly served.[48]
On the ground that collusion, fraud and clear mistake of

fact and law tainted the judgment of the High Court of Malaya,
no clear evidence of the same was adduced or shown. The
facts which the trial court found intriguing amounted to mere
conjectures and specious observations. The trial courts finding
on the absence of judgment against Asiavest-CDCP Sdn. Bhd.
is contradicted by evidence on record that recovery was also
sought against Asiavest-CDCP Sdn. Bhd. but the same was
found insolvent.[49] Furthermore, even when the foreign
judgment is based on the drafts prepared by counsel for the
successful party, such is not per se indicative of collusion or
fraud. Fraud to hinder the enforcement within the jurisdiction
of a foreign judgment must be extrinsic, i.e., fraud based on
facts not controverted or resolved in the case where judgment
is rendered,[50] or that which would go to the jurisdiction of the
court or would deprive the party against whom judgment is
rendered a chance to defend the action to which he has a
meritorious defense.[51] Intrinsic fraud is one which goes to the
very existence of the cause of action is deemed already
adjudged, and it, therefore, cannot militate against the
recognition or enforcement of the foreign judgment.
[52]
Evidence is wanting on the alleged extrinsic fraud. Hence,
such unsubstantiated allegation cannot give rise to liability
therein.
Lastly, there is no merit to the argument that the foreign
judgment is not enforceable in view of the absence of any
statement of facts and law upon which the award in favor of
the petitioner was based. As aforestated, the lex fori or the
internal law of the forum governs matters of remedy and
procedure.[53] Considering that under the procedural rules of the
High Court of Malaya, a valid judgment may be rendered even
without stating in the judgment every fact and law upon which
the judgment is based, then the same must be accorded respect
and the courts in this jurisdiction cannot invalidate the
judgment of the foreign court simply because our rules provide
otherwise.
All in all, private respondent had the ultimate duty to
demonstrate the alleged invalidity of such foreign judgment,
being the party challenging the judgment rendered by the High
Court of Malaya. But instead of doing so, private respondent
merely argued, to which the trial court agreed, that the burden
lay upon petitioner to prove the validity of the money
judgment. Such is clearly erroneous and would render
meaningless the presumption of validity accorded a foreign
judgment were the party seeking to enforce it be required to
first establish its validity.[54]
WHEREFORE, the instant petition is GRANTED. The
Decision of the Court of Appeals dated May 19, 1993 in CAG.R. CV No. 35871 sustaining the Decision dated October 14,
1991 in Civil Case No. 56368 of the Regional Trial Court of
Pasig, Branch 168 denying the enforcement of the Judgment
dated September 13, 1985 of the High Court of Malaya in
Kuala Lumpur is REVERSED and SET ASIDE, and another in
its stead is hereby rendered ORDERING private respondent
Philippine National Construction Corporation to pay petitioner
Asiavest Merchant Bankers (M) Berhad the amounts adjudged
in the said foreign Judgment, subject of the said case.
Costs against the private respondent.
SO ORDERED.

Second Set of Cases in Conflicts

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Second Set of Cases in Conflicts

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[G.R. No. 124110.

April 20, 2001]

UNITED AIRLINES, INC., petitioner, vs. COURT OF

On March 1, 1989, private respondent Aniceto Fontanilla

Subsequently, three other passengers with Caucasian

noon that they were able to leave Los Angeles on United

After some time, Linda, without any explanation, offered

The incident prompted the Fontanillas to file Civil Case

The Fontanillas then proceeded to the United Airlines

WHEREFORE, judgment is rendered dismissing the

The Fontanillas were not booked on the next flight, which

On appeal, the Court of Appeals ruled in favor of the

admission on the part of United Airlines that the Fontanillas

RESPONDENT COURT OF APPEALS GRAVELY

RESPONDENT COURT OF APPEALS GRAVELY

RESPONDENT COURT OF APPEALS GRAVELY

a) P200,000.00 as moral damages;

b) P200,000.00 as exemplary damages;

RESPONDENT COURT OF APPEALS GRAVELY

c) P50, 000.00 as attorneys fees.

RESPONDENT COURT OF APPEALS GRAVELY

On the first issue raised by the petitioner, the respondent

The rule authorizing an answer that the defendant has no

defendants evidence in refutation; all this evidence is now

Aniceto Fontanillas assertion that upon arrival at the

A passenger denied board involuntarily from an oversold flight

SEC. 5. Amount of Denied Boarding Compensation Subject to

award on our pronouncement in the case of Zalamea vs. Court

this Regulation is designed to cover only honest mistakes on

G.R. No. L-104776 December 5, 1994

BROWN & ROOT INTERNATIONAL, INC. AND/OR

G.R. Nos. 104911-14 December 5, 1994

ALEJANDRO, ALBERTO ALMENAR, ARNALDO ALONZO, AMADO

CANTOS, EPIFANIO A. CAPONPON, ELIAS D. CARILLO, JR.,

EMILIO E. FERNANDEZ, ARTEMIO FERRER, MISAEL M.

FRANCISCO LUBAT, ARMANDO LUCERO, JOSELITO L. DE

OSIAS, VIRGILIO PA-A, DAVID PAALAN, JESUS N. PACHECO,

FAUSTINO D. SILANG, RODOLFO B. DE SILOS, ANICETO G. SILVA,

(1) to modify the Resolution dated September 2, 1991 of

(1) to reverse the Resolution dated September 2, 1991 of

The petition in G.R. Nos. 104911-14, entitled "Bienvenido M. Cadalin, et.

employment by BRII (POEA Case No. L-84-06-555). The claimants were

On April 5, 1989, AIBC and BRII submitted to NLRC their "Manifestation,"

On January 30, 1989, the POEA Administrator rendered his decision in

1. The claims of the 94 complainants

On February 10, 1989, claimants submitted their "Appeal Memorandum

2. Respondents AIBC and Brown & Root

On February 17, 1989, claimants filed their "Answer to Appeal," praying

3. The awards given by the POEA to the

worked elsewhere than in Bahrain are

4. All claims other than those indicated in

Three motions for reconsideration of the September 2, 1991 Resolution

In addition, this Commission, in the exercise of its powers

Hence, these petitions filed by the claimants represented by Atty. Del

(a) complainants identified and listed in

3) Joint Manifestation and Motion involving claimant Jose

Nos. 104911-14, Rollo, pp.

13) Joint Manifestation and Motion involving claimant

6) Joint Manifestation and Motion involving claimant

10) Joint Manifestation and Motion involving petitioner

12) Joint Manifestation and Motion involving claimant

5) Joint Manifestation and Motion involving claimant

9) Joint Manifestation and Motion involving Valerio