3 Puyat Cvs. Zabarte
3 Puyat Cvs. Zabarte
3 Puyat Cvs. Zabarte
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* THIRD DIVISION.
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PANGANIBAN, J.:
The Case
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The Facts
The facts
4
of this case, as narrated by the Court of Appeals, are as
follows:
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‘8) The Superior Court for the State of California, County of Contra
Costa[,] did not properly acquire jurisdiction over the subject
matter of and over the persons involved in [C]ase #C21-00265.
‘9) The Judgment on Stipulations for Entry in Judgment in se #C21-
00265 dated December 12, 1991 was obtained without the
assistance of counsel for [petitioner] and without sufficient notice
to him and therefore, was rendered in clear violation of
[petitioner’s] constitutional rights to substantial and procedural due
process.
‘10) The Judgment on Stipulation for Entry in Judgment in Case #C21-
00265 dated December 12, 1991 was procured by means of fraud
or collusion or undue influence and/or based on a clear mistake of
fact and law.
‘11) The Judgment on Stipulation for Entry in Judgment in Case #C21-
00265 dated December 12, 1991 is contrary to the laws, public
policy and canons of morality obtaining in the Philippines and the
enforcement of such judgment in the Philippines would result in the
unjust enrichment of [respondent] at the expense of [petitioner] in
this case.
‘12) The Judgment on Stipulation for Entry in Judgment in Case #C21-
00265 dated December 12, 1991 is null and void and unenforceable
in the Philippines.
‘13) In the transaction, which is the subject matter in Case #C21-00265,
[petitioner] is not in any way liable, in fact and in law, to
[respondent] in this case, as contained in [petitioner’s] ‘Answer to
Complaint’ in Case #C21-00265 dated April 1, 1991, Annex ‘B’ of
[respondent’s] ‘Complaint’ dated December 6, 1993.
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‘2) [Petitioner] begs to disagree[;] in support hereof, [he] wishes to mention that in
his ‘Answer with Special and Affirmative Defenses’ dated March 16, 1994
[petitioner] has interposed that the ‘Judgment on Stipulations for Entry in Judgment’
is null and void, fraudulent, illegal and unenforceable, the same having been
obtained by means of fraud, collusion, undue influence and/or clear mistake of fact
and law. In addition, [he] has maintained that said ‘Judgment on Stipulations for
Entry in Judgment’ was obtained without the assistance of counsel for [petitioner]
and without sufficient notice to him and therefore, was rendered in violation of his
constitutional rights to substantial and procedural due process.’
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“On 6 April 1995, the court a quo issued an [O]rder granting [respondent’s]
[M]otion for [S[ummary [J]udgment [and] likewise granting [petitioner] ten
(10) days to submit opposing affidavits, after which the case would be
deemed submitted for resolution (Record, pp. 152-153). [Petitioner] filed a
[M]otion for [R]econsideration of the aforesaid [O]rder and [respondent]
filed [C]omment. On 30 June 1995, [petitioner] filed a [M]otion to
[D]ismiss on the ground of lack of jurisdiction over the subject matter of the
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“1. The amount of U.S. dollars $241,991.33, with the interest of legal
rate from October 18, 1991, or its peso equivalent, pursuant to the
[J]udgment of [S]tipulation for [E]ntry in [J]udgment dated
December 19, 1991;
“2. The amount of P30,000.00 as attorney’s fees;
“3. To pay the costs of suit.
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Affirming the trial court, the Court of Appeals held that petitioner
was estopped from assailing the judgment that had become final and
had, in fact, been partially executed. The CA also ruled that
summary judgment was proper, because petitioner had failed to
tender any genuine issue of fact and was merely maneuvering to
delay the full effects of the judgment.
8
Citing Ingenohl v. Olsen, the CA also rejected petitioner’s
argument that the RTC should have dismissed the action for the
enforcement of a foreign judgment, on the ground of forum non
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Issue
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First Question:
Summary Judgment
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13 Paz v. Court of Appeals, 181 SCRA 26, 30, January 11, 1990; Diman v. Lacalle,
299 SCRA 459, 476, November 27, 1998; and Mallilin, Jr. v. Castillo, G.R. No.
136803, p. 8, 333 SCRA 628, June 16, 2000.
14 Diman v. Alumbres, supra; Army & Navy Club of Manila, Inc. v. Court of
Appeals, 271 SCRA 36, 49, April 8, 1997; Northwest Airlines, Inc. v. Court of
Appeals, 284 SCRA 408, 417, January 20, 1998.
15 Order dated April 6, 1995 of Judge Danilo B. Pine; rollo, pp. 60-61.
16 Annex “L”; rollo, pp. 89-91.
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diction over the subject matter of and over the persons involved in
Case No. C21-00265,” and that would render the judgment therein
null and void. In this light, petitioner’s contention that he was not
allowed to present evidence to substantiate his claims is clearly
untenable.
For summary judgment to be valid, Rule 34, Section 3 of the
Rules of Court, requires (a) that there must be no genuine issue as to
any material fact, except for the amount of damages; and (b) that the
party presenting the motion for summary
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judgment must be entitled
to a judgment as a matter of law. As mentioned earlier, petitioner
admitted that a foreign judgment had been rendered against him and
in favor of respondent, and that he had paid $5,000 to the latter in
partial compliance therewith. Hence, respondent, as the party
presenting the Motion for Summary Judgment, was shown to be
entitled to the judgment.
The CA made short shrift of the first requirement. To show that
petitioner had raised no genuine issue, it relied instead on the finality
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Jurisdiction
Petitioner alleges that jurisdiction over Case No. C21-00265, which
involved partnership interest, was vested in the Securities and
Exchange Commission, not in the Superior Court of California,
County of Contra Costa.
We disagree. In the absence of proof of California law on the
jurisdiction of courts, we presume that such law, if any, is similar to
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18 Asiavest Limited v. Court of Appeals, 296 SCRA 539, 552, September 25, 1998.
19 Par. 3, Complaint (Annex “B”); rollo, p. 38.
20 Par. 3, Complaint dated December 6, 1993; rollo, p. 38.
21 SEC. 5. In addition to the regulatory and adjudicative functions of the Securities
and Exchange Commission over corporations, partnerships and other forms of
associations registered with it as expressly granted under existing laws and decrees, it
shall have original and exclusive jurisdiction to hear and decide cases involving:
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(a) Devices or schemes employed by, or any acts of, the board of directors,
business associates, its officers or partners, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, members of associations or
organizations registered with the Commission.
(b) Controversies arising out of intra-corporate or partnership relations, between
and among stockholders, members, or associates; between any or all of them
and the corporation, partnership or association of which they are
stockholders, members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it concerns
their individual franchise or right to exist as such entity.
(c) Controversies in the election or appointments of directors, trustees, officers
or managers of such corporations, partnerships or associations.
(d) Petitions of corporations, partnerships or associations to be declared in the
state of suspension of payments in cases where the corporation, partnership
or association possesses sufficient property to cover all its debts but foresees
the impossibility of meeting them when they respectively fall due or in cases
where the corporation, partnership or association has no sufficient assets to
cover its liabilities, but is under the man
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foreign court did not really have jurisdiction over the case, as
petitioner claims, it would have been very easy for him to show this.
Since jurisdiction is determined by the allegations in a complaint, he
only had to submit a copy of the complaint filed with the foreign
court. Clearly, this issue did not warrant trial.
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I asked the Judge for time to secure another counsel but I was practically
discouraged from engaging one as the Judge was insistent that I settle the
case at once with the [respondentl. Being a foreigner and not a lawyer at that
I did not know what to do. I felt helpless and the Judge and [respondent’s]
lawyer were the ones telling me what to do. Under ordinary circumstances,
their directives should have been taken with a grain of salt especially so
[since respondent’s] counsel, who was telling me what to do, had an interest
adverse to mine. But [because] time constraints and undue influence exerted
by the Judge and [respondent’s] counsel on me disturbed and seriously
affected my freedom to act according to my best judgment and belief. In
point of fact, the terms of the set-
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tlement were practically imposed on me by the Judge seconded all the time
by [respondent’s] counsel. I was then helpless as I had no counsel to assist
me and the collusion between the Judge and [respondent’s] counsel was
becoming more evident by the way I was treated in the Superior Court of
[t]he State of California. I signed the ‘Judgment on Stipulation for Entry in
Judgment’ without any lawyer assisting 22me at the time and without being
fully aware of its terms and stipulations.”
The manifestation of petitioner that the judge and the counsel for the
opposing party had pressured him would gain credibility only if he
had not been given sufficient time
23
to engage the services of a new
lawyer. Respondent’s Affidavit dated May 23, 1994, clarified,
however, that petitioner had sufficient time, but he failed to retain a
counsel. Having dismissed his lawyer as early as June 19, 1991,
petitioner directly handled his own defense and negotiated a
settlement with respondent and his counsel in December 1991.
Respondent also stated that petitioner, ignoring the judge’s reminder
of the importance of having a lawyer, argued that “he would be the
one to settle the case and pay” anyway. Eventually, the Compromise
Agreement was presented in court and signed before Judge Ellen
James on January 3, 1992. Hence, petitioner’s rights to counsel and
to due process were not violated.
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Unjust Enrichment
Petitioner avers that the Compromise Agreement violated the norm
against unjust enrichment because the judge made him shoulder all
the liabilities in the case, even if there were two other defendants,
G.S.P. & Sons, Inc. and the Genesis Group.
We cannot exonerate petitioner from his obligation under the
foreign judgment, even if there are other defendants who are not
being held liable together with him. First, the foreign judgment itself
does not mention these other defendants, their participation or their
liability to respondent. Second, petitioner’s undated Opposing
Affidavit states: “[A]lthough myself and these entities were initially
represented by Atty. Lawrence L. Severson of the Law
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24 Rollo, p. 250.
25 Power Commercial & Industrial Corporation v. Court of Appeals, 274 SCRA
597, 612-613, June 20, 1997.
26 Petitioner’s Affidavit was filed together with his Second Motion for
Reconsideration on September 23, 1999. Rollo, pp. 92-102.
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Second Question:
Forum Non Conveniens
Petitioner argues that the RTC should have refused to entertain the
Complaint for enforcement of the foreign judgment on the principle
of forum non conveniens. He claims that the trial court had no
jurisdiction, because the case involved partnership interest, and there
was difficulty in ascertaining the applicable law in California. All
the aspects of the transaction took place in a foreign country, and
respondent is not even Filipino.
We disagree. Under the principle of forum non conveniens, even
if the exercise of jurisdiction is authorized by law, courts may
nonetheless refuse to entertain a case for any of the following
practical reasons:
“1) The belief that the matter can be better tried and decided elsewhere,
either because the main aspects of the case transpired in a foreign
jurisdiction or the material witnesses have their residence there;
The belief that the non-resident plaintiff sought the forum[,] a practice
known as forum shopping[,] merely to secure procedural advantages or to
convey or harass the defendant;
The unwillingness to extend local judicial facilities to non-residents or
aliens when the docket may already be overcrowded;
The inadequacy of the local judicial machinery for effectuating the right
sought to be maintained: and 27
The difficulty of ascertaining foreign law.”
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(a) In case of a judgment or final order upon a specific thing, the judgment or
final order is conclusive upon the title to the thing; and
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(b) In case of a judgment or final order against a person, the judgment or final
order is presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title. In either case, the judgment or
final order may be repealed by evidence of a want of jurisdiction, want of
notice to the party, collusion, fraud, or clear mistake of law or fact.”
30 Oil & Natural Gas Commission v. Court of Appeals, 293 SCRA 26, 47-48, July
23, 1998. Section 5 (n) of Rule 131 provides: “SEC. 5. Disputable presumptions.—
The following presumptions are satisfactory if uncontradicted, but may be
contradicted and overcome by other evidence:
xxx xxx xxx
“(n) That a court, or judge acting as such, whether in the Philippines or elsewhere,
was acting in the lawful exercise of his jurisdiction;
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xxx xxx x x x.
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