1. International Shoe v.

State of Washington
SCOTUS - 1945 (326 U.S. 310)

Facts:

 International Shoe was a Delaware based corporation with a main office in St. Louis, MO. It had no
offices, made no contracts for sale, and did not keep any warehouses of goods in WA.
 International Shoe did have several salesmen employees who lived and sold merchandise for the
company in WA.
 The state of WA sued Shoe in WA court for unpaid contributions to the state's unemployment fund.
 Notice was served to a salesman for the company in WA and via registered mail to the corporation's
headquarters in MO.

Procedural History:

 Lower court found for WA.

 Shoe appealed and lost.
 Shoe appealed to SCOTUS and lost.

Issues:

 Can a state impose jurisdiction on a corporation not in the borders of the state?
 Can a corporation's activities in a state make it subject to the jurisdiction of that state?

Holding/Rule:

 If a party has "minimum contacts" in a state, that corporation is subject to the jurisdiction of that state
as long as it does not offend "traditional notions of fair play and substantial justice".
o Test for "minimum contacts" jurisdiction:
 Does the defendant come within the terms of the applicable long-arm statute?
 Does the defendant have "minimum contacts" with the forum state such that the
assertion of jurisdiction would not violate the Due Process Clause?
 Has the defendant "purposely availed" itself of the privilege of conducting
activities in the forum state, thereby invoking the benefits and protections of
the state's laws?
 Does the lawsuit arise out of or related to the defendant's purposeful contacts
with the forum or, if it does not, are the defendant's forum contacts so
extensive that no such relationship is necessary?
 Would the exercise of jurisdiction be unfair and unreasonable, taking into account
the interests of the defendant, the forum state, the plaintiff, and other states that may
have an interest in the matter?

Reasoning:

 The corporation enjoyed the protection and benefits from its activities in a state; thus, it must be
subject to the jurisdiction of that state.
 "To the extent that a corporation exercises the privilege of conducting activities within a state, it
enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise
 to obligations; and, so far as those obligations arise out of or are connected with the activities within
the state, a procedure which requires the corporation to respond to a suit brought to enforce them can,
in most instances, hardly be said to be undue. "

Dissent:

 Black disagreed with the vagueness of the "fair play" clause.

Notes:

 Minimum contacts is not a quantitative measure, but qualitative in nature.

 Contact quality can be measured in terms of its relation to the subject of the lawsuit.
 Matrix in minimum contacts
o Continuous and related - jurisdiction
o Noncontinuous but related - tough jurisdiction
o Continuous but unrelated - tough jurisdiction
o Noncontinuous and unrelated - no jurisdiction
 2. Shaffer v. Heitner
Posted on September 10, 2012 | Civil Procedure | Tags: Civil Procedure Case Brief

FACTS
Heitner, a nonresident of Delaware, owns one share of stock in Greyhound Corp, which has its principal
place of business in Phoenix. Heitner files shareholder’s derivative suit in Delaware against Greyhound
Lines Inc., and Greyhound Corp, and 28 present or former officers or directors of one or the other
corporations. He files order of sequestration of Delaware property of individual defendants. Defendants
are non-residents, but H sues for stock, rights, debts, or credits due or accrued. 82,000 shares were
seized as a result, by placing “stop transfers.” All 28 notified by certified mail.

PROCEDURAL HISTORY
ourt of Chancery rejected defendant’s arguments. Court argues that sequestration is used to compel
personal appearance of a nonresident defendant. If the defendant enters a general appearance,
sequested property is released.

Delaware Supreme Court affirms.

ISSUE
Can a plaintiff assert quasi-in-rem jurisdiction over a D’s property that is unrelated to the suit and causes
violates “traditional notions of fair play and substantial justice.”

HOLDING
No. Now apply International Shoe Test.

ANALYSIS
“Traditional notions of fair play and substantial justice” that govern a state’s power to adjudicate in
personam should also govern its power to adjudicate personal rights to property located in the state.
Property cannot be subjected to a court’s judgment unless reasonable and appropriate efforts have been
made to give the property owners actual notice of the action. “In order to justify an exercise of jurisdiction
in rem, the basis for jurisdiction must be sufficient to justify exercising “jurisdiction over the interests of
persons in a thing.” The standard for determining whether an exercise of jurisdiction over the interests of
persons is consistent with the Due Process clause is the minimum-contacts standard elucidated in
International Shoe.

Delaware defendants’ property is not the subject of litigation, nor the underlying cause of action related to
the property. Therefore, the contacts are not sufficient to support jurisdiction.
 3. Perkins v. Benguiet Consolidated Mining Co.
Brief Fact Summary. A Philippine Island mining company’s production is halted due to
occupation of the islands by the Japanese. The President conducts business from his
home in Ohio.

Synopsis of Rule of Law. Federal due process is not violated in either taking or
declining jurisdiction of a foreign corporation when the foreign corporation’s supervision
of a business is carried on continuously and systematically within a state.

Facts. The company’s mining properties were in the Philippine Islands. During the
occupation of the Islands by the Japanese operations were halted and the president
returned to his home in Ohio. He maintained an office where he conducted his affairs
and conducted business of the company and its employees (drew salary checks,
maintaining bank accounts, hosting Directors’ meetings, supervising policies to
rehabilitate the properties in the Philippines etc.).

Issue. At the constitutional level, the fairness to the corporation, and whether as a
matter of federal due process, the business done in Ohio by the respondent mining
company was sufficiently substantial and of such a nature as to permit Ohio to entertain
a cause of action against a foreign corporation, where the cause of action arose from
activities entirely distinct from its activities in Ohio.

Held. Under these particular circumstances it would not violate federal due process for
Ohio to either take or decline jurisdiction of the corporation. Vacated and remanded.

Dissent. Justice Minton and The Chief Justice dissented on the grounds that the U.S.
Supreme Court was essentially issuing an advisory opinion to the Ohio Supreme Court.

Concurrence

Discussion. Although no mining properties were located in Ohio, the operations and
supervision of the company and wartime activities being directed by the president in the
State of Ohio are enough not to violate federal due process.
 4. World Wide Volkswagen Corp v. Woodson

Brief Fact Summary. A family that purchased a car in New York sued the auto
manufacturer and retailer after they became involved in an accident in Oklahoma while
driving to Arizona.
Synopsis of Rule of Law. A consumer’s unilateral act of bringing the defendant’s
product into the forum state is not a sufficient basis for exercising personal jurisdiction
over the defendant.

Facts. Harry and Kay Robinson purchased an Audi automobile from Seaway
Volkswagen, Inc. in New York State in 1976. The following year they left New York to
move to Arizona. While they were driving through Oklahoma, another car struck them,
causing a fire which burned Kay Robinson and two of her children. The Robinsons
brought a products liability suit in Oklahoma claiming that their injuries resulted from
defective design and placement for the Audi’s gas tank and fuel system. The Robinsons
joined as defendants the auto manufacturer, Audi, its importer, Volkswagen of America,
Inc., its regional distributor, World Wide Volkswagen Corporation, and its retail dealer,
Seaway. The court found that World Wide was incorporated and had its business office
in New York. It distributed Vehicles, under Contract with Volkswagen, to retail dealers in
New York, Connecticut, and New Jersey. Seaway is a retail dealer whose place of
business is in New York. There was no evidence that either World-Wide or Seaway did
any business in Oklahoma, shipped or sold any products in that state, had an agent to
receive process there, or advertised in Oklahoma. Seaway and World-Wide made
special apperances for the purpose of opposing jurisdiction in Oklahoma. The
Oklahoma court denied their motion and this appeal followed, whereby the Supreme
Court of the United States granted Seaway and World-Wide a writ of certiorari.

Issue. Whether an Oklahoma court may exercise in personam jurisdiction over a non-
resident automobile retailer and its wholesale distributor in a products liability suit, when
the defendants’ only connection with Oklahoma is the fact that an auto sold in New York
to New York residents became involved in an accident in Oklahoma?

Held. No. The Supreme Court reversed the Oklahoma court’s ruling. Forseeability of
being asked to defend a suit in a particular forum is not a sufficient benchmark for
personal jurisdiction under the Due Process Clause. Instead, it is the defendant’s
conduct and connection with the forum state that determines whether it is reasonable
for a defendant to be haled into court. Because Seaway and World-Wide had no
contacts, ties or relations with the state of Oklahoma, jurisdiction would violate the Due
Process Clause.

Dissent. Justice Brennan dissented. He found that the court’s over-reliance on contacts
between the defendant and the state obscures whether being subject to a suit there
would actually cause any inconvenience to the defendant. Additionally, he found that
because the interest in having the suit in Oklahoma was strong, given that the plaintiffs
were hospitalized there and key witnesses resided there, jurisdiction should have been
granted. A dissenting opinion by Justice Marshal, joined by Justice Blackmun, was
omitted by the casebook editors.

Discussion. The court’s reasoning for not extending jurisdiction is that the two
purposes of the minimum contacts requirement, i.e. protecting defendants against the
burden of litigating in a distant forum and ensuring that State courts do not reach
beyond the limits established by the federal system, would not be served if jurisdiction
were granted. Specifically, the court relied on the fact that Seaway and World-Wide
carry on no activity whatsoever in Oklahoma, perform no services there, and avail
themselves of none of the privileges and benefits of Oklahoma law. The court will look
not to whether it was foreseeable to the defendant that he could be sued in a given
state, but whether a suit there is reasonable given the defendant’s ties and relations
with the state.
 5. Asahi Metal Industry Co. v. Superior Court

Brief Fact Summary. A person injured in a motorcycle accident sued the manufacturer
of the motorcycle’s tire, who then filed a cross-complaint against the manufacturer of
one part of the tire.
Synopsis of Rule of Law. The substantial connection between the Defendant and the
forum state necessary for a finding of minimum contacts must come about by an action
of the Defendant purposefully directed toward the forum state.

Facts. Gary Zurcher was severely injured and his wife was killed after he lost control of
his Honda motorcycle and collided with a tractor in Solano County, California. Zurcher
filed a products liability in California state court, alleging that the motorcycle tire, tube
and sealant were defective. Zucher’s complaint named Cheng Shin Rubber Industrial,
Co., Ltd., the Taiwanese manufacturer of the tube. Cheng Shin then filed a cross-
complaint against Asahi Metal Industry Co., Ltd., the manufacturer of the tube’s valve
assembly. Asahi is a Japanese corporation that manufactures tire valve assemblies in
Japan and sells them to Cheng Shin and others for use as components in finished tire
tubes. Approximately 20 percent of Cheng Shin’s sales in the United States are in
California. A manager of Cheng Shin submitted an affidavit alleging that Asahi was
aware that parts were sold in the U.S. The president of Asahi submitted an affidavit
alleging that Asahi never contemplated that they could be subject to suit in California
through its sales of tire valves to Cheng Shin in Taiwan. Asahi moved to dismiss the suit
against it for want of jurisdiction. California court denied the motion and the Supreme
Court of the United States granted a writ of certiorari.

Issue. Whether the mere awareness of the part of a foreign Defendant that the
components it manufactured, sold, and delivered outside the United States would reach
the forum state in the stream of commerce constitutes sufficient minimum contacts
rendering jurisdiction appropriate.

Held. No. The Supreme Court of the United States reversed the Supreme Court of
California’s ruling upholding jurisdiction. Due Process requires more than that the
Defendant was aware of its product’s entry into the forum state through the stream of
commerce in order for the state to exercise jurisdiction over the Defendant. The
substantial connection between the Defendant and the forum state necessary for a
finding of minimum contacts must come about by an action of the Defendant
purposefully directed toward the forum state. The placement of a product in the stream
of commerce, without more, is not an act of the Defendant purposefully directed toward
the forum state. Concurrence. Justice Brennan concurred, in which he was joined by
Justices White, Marshall, and Blackmun. Justice Brennan disagreed with the stream of
commerce theory, as well as the court’s conclusion that Asahi did not purposely avail
itself of the California market. However, despite finding sufficient minimum contacts,
Justice Brennan still found jurisdiction improper because fair play and substantial justice
would not be achieved. Justice Stevens also concurred, in which he was joined by
Justices White and Blackmun. Specifically, he found that minimum contacts are not
always necessary for a state court to invoke jurisdiction.

Discussion. In analyzing whether jurisdiction would offend traditional notions of fair

play and substantial justice, the court noted that the burden on the Defendant to defend
the suit would be severe. Moreover, the court noticed that California’s interest in the suit
is slight, since the Plaintiff is not a California resident.
 6. Pennhurst State School & Hospital v. Halderman

Brief Fact Summary. The Respondents, Halderman and others (Respondents), filed
suit against the Petitioners, the Pennhust State School and Hospital and its officials
(Petitioners), charging conditions at the hospital violate class member’s rights. The
Petitioners argued before the Supreme Court of the United States (Supreme Court) that
the Eleventh Amendment of the United States Constitution (Constitution) prohibited the
District Court from ordering state official to conform their conduct to state law.

Synopsis of Rule of Law. A federal court’s grant of relief against state officials on the
basis of state law, whether, prospective or retroactive directly interferes with the
principles of federalism that underlie the Eleventh Amendment of the Constitution.

Facts. This case is before the Supreme Court for a second time to determine whether a
federal court can grant relief against state officials based on state law. The case
concerns the condition of care at Petitioners’ institution for the mentally retarded. The
Respondents’ amended complaint charged that the Petitioners violated class member’s
rights under (i) the Eighth and Fourteenth Amendments of the Constitution, (ii)
Section:504 of the Rehabilitation Act of 1973, (iii) the Developmentally Disabled
Assistance and Bill of Rights Act and (iv) the Pennsylvania Mental Health and Mental
Retardation Act of 1966. The Court of Appeals for the Third Circuit decided that the
Respondents had a right to rehabilitation in the least restrictive environment, based
solely on the bill of rights provision in the Developmentally Disabled Assistance and Bill
of Rights Act. The Supreme Court of the United States (Supreme Court) reversed the
judgment of the Court of Appeals finding that the Developmentally Dis
abled Assistance and Bill of Rights Act did not create any substantive rights and
remanded the case back to the Court of Appeals to determine if the remedial order
could be supported by any of the Respondents’ other arguments. The Court of Appeals
concluded that state law supported its prior judgment and also rejected the Petitioners’
argument that the Eleventh Amendment barred the federal court from considering the
pendent state law claim. The case goes before the Supreme Court to consider the
Petitioners’ position.

Issue. Whether a federal court has jurisdiction to award injunctive relief against state
officials on the basis of state law?

Held. Federal Courts lack jurisdiction to enjoin Petitioners’ actions on the basis of state
law. Reversed and remanded.
Dissent. The majority decision goes against established precedence by the Supreme
Court, stating a federal court can award injunctive relief on the basis of state law. This
new pronouncement will require federal courts to decide federal constitutional questions
despite the availability of state-law grounds for decision.

Discussion. The Eleventh Amendment of the Constitution prohibits a state from being
sued in federal courts by her own citizens, as well as by citizens of another state. The
Eleventh Amendment bars a suit against state officials when the state is a real,
substantial party in interest. An exception to the rule against suing state officials is when
the suit is challenging the constitutionality of state official’s actions. When bringing suit
in a federal court for a state official’s actions based on violation of federal law, a court
can impose an injunction that governs the official’s future conduct, but may not award
retroactive monetary relief. It is not the jurisdiction of federal courts to award relief
against a state official based on state law.
 7. Republic of Philippines v.Pimentel

Facts of the case

The case arises from competing claims to more than $30 million, the rewards of an investment
former Philippine President Ferdinand Marcos made with Merrill Lynch and subsequently
misappropriated. A Philippine agency charged with recovering the funds, several Marcos family
creditors, and human rights victims who had already secured a judgment against Marcos' estate
each laid claim to the money, prompting Merrill Lynch to file an interpleader action to settle all
of the claims in one case. The Philippine government, acting in concert with the recovery
agency, claimed that it had sovereign immunity from suit and, because it was an indispensable
party to the suit under Federal Rule of Civil Procedure 19(b), justice required that the case be
stayed and brought before a special Philippine court established to return such misappropriated
funds to the public treasury. However, the district court continued to adjudicate the case,
eventually awarding the assets to the creditors.

The Ninth Circuit upheld the award, noting that the government's claim was barred by the
applicable Philippine statute of limitations. The Ninth Circuit further held that the "equity and
good conscience" requirements of Federal Rule of Civil Procedure 19(b) did not require the
Philippine government's participation in the case. In its petition for certiorari, the Philippine
government argued that the award of assets undermined the comity principles of the Foreign
Sovereign Immunities Act and violated Federal Rule of Civil Procedure 19(b) by not including
the government as an indispensable party.

Question
Did the U.S. Court of Appeals for the Ninth Circuit err in approving the award of assets to
creditors of former Philippine President Ferdinand Marcos when the Philippine government,
claiming rightful ownership of the assets, excluded itself from the proceedings based on
sovereign immunity?

Conclusion
Yes it did. The Court's opinion was unanimous in finding that the Philippine government was a
required party to the case under Rule 19(b). Such a required party must be joined to the suit if it
is "feasible," and the Court ruled that the government's inclusion was feasible in this case. The
Court sent the case back to the district court with instructions to dismiss the interpleader action.
Justice Anthony Kennedy delivered the opinion of the Court in which Justices John Paul
Stevens and David Souter concurred in part and dissented in part.
 8. PHILSEC VS. CA
FACTS: Private respondent Ducat obtained separate loans from petitioners Ayala
International Finance Limited (AYALA) and Philsec Investment Corp (PHILSEC),
secured by shares of stock owned by Ducat.
In order to facilitate the payment of the loans, private respondent 1488, Inc., through
its president, private respondent Daic, assumed Ducat’s obligation under an
Agreement, whereby 1488, Inc. executed a Warranty Deed with Vendor’s Lien by
which it sold to petitioner Athona Holdings, N.V. (ATHONA) a parcel of land in
Texas, U.S.A., while PHILSEC and AYALA extended a loan to ATHONA as initial
payment of the purchase price. The balance was to be paid by means of a promissory
note executed by ATHONA in favor of 1488, Inc. Subsequently, upon their receipt of
the money from 1488, Inc., PHILSEC and AYALA released Ducat from his
indebtedness and delivered to 1488, Inc. all the shares of stock in their possession
belonging to Ducat.

As ATHONA failed to pay the interest on the balance, the entire amount covered by
the note became due and demandable. Accordingly, private respondent 1488, Inc.
sued petitioners PHILSEC, AYALA, and ATHONA in the United States for payment
of the balance and for damages for breach of contract and for fraud allegedly
perpetrated by petitioners in misrepresenting the marketability of the shares of stock
delivered to 1488, Inc. under the Agreement.

While the Civil Case was pending in the United States, petitioners filed a complaint
“For Sum of Money with Damages and Writ of Preliminary Attachment” against
private respondents in the RTC Makati. The complaint reiterated the allegation of
petitioners in their respective counterclaims in the Civil Action in the United States
District Court of Southern Texas that private respondents committed fraud by selling
the property at a price 400 percent more than its true value.
Ducat moved to dismiss the Civil Case in the RTC-Makati on the grounds of (1) litis
pendentia, vis-a-vis the Civil Action in the U.S., (2) forum non conveniens, and (3)
failure of petitioners PHILSEC and BPI-IFL to state a cause of action.

The trial court granted Ducat’s MTD, stating that “the evidentiary requirements of the
controversy may be more suitably tried before the forum of the litis pendentia in the
U.S., under the principle in private international law of forum non conveniens,” even
as it noted that Ducat was not a party in the U.S. case.

Petitioners appealed to the CA, arguing that the trial court erred in applying the
principle of litis pendentia and forum non conveniens.

The CA affirmed the dismissal of Civil Case against Ducat, 1488, Inc., and Daic on
the ground of litis pendentia.

ISSUE: is the Civil Case in the RTC-Makati barred by the judgment of the U.S.
court?
HELD: CA reversed. Case remanded to RTC-Makati
NO
While this Court has given the effect of res judicata to foreign judgments in several
cases, it was after the parties opposed to the judgment had been given ample
opportunity to repel them on grounds allowed under the law. This is because in this
jurisdiction, with respect to actions in personam, as distinguished from actions in rem,
a foreign judgment merely constitutes prima facie evidence of the justness of the
claim of a party and, as such, is subject to proof to the contrary. Rule 39, §50
provides:

Sec. 50. Effect of foreign judgments. — The effect of a judgment of a tribunal of a

foreign country, having jurisdiction to pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the
title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive evidence of a
right as between the parties and their successors in interest by a subsequent title; but
the judgment may be repelled by evidence of a want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact.

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

Second. Nor is the trial court’s refusal to take cognizance of the case justifiable under
the principle of forum non conveniens:

First, a MTD is limited to the grounds under Rule 16, sec.1, which does not include
forum non conveniens. The propriety of dismissing a case based on this principle
requires a factual determination, hence, it is more properly considered a matter of
defense.
Second, while it is within the discretion of the trial court to abstain from assuming
jurisdiction on this ground, it should do so only after “vital facts are established, to
determine whether special circumstances” require the court’s desistance.
 9. HONGKONG AND SHANGHAI BANKING CORPORATION (HSBC) vs.
SHERMAN et al

FACTS: It appears that sometime in 1981, Eastern Book Supply Service PTE,
Ltd. (COMPANY), a company incorporated in Singapore applied with and was
granted by HSBC Singapore branch an overdraft facility in the maximum
amount of Singapore dollars 200,000 with interest at 3% over HSBC prime
rate, payable monthly, on amounts due under said overdraft facility.
As a security for the repayment by the COMPANY of sums advanced by HSBC
to it through the aforesaid overdraft facility, in 1982, both private respondents
and a certain Lowe, all of whom were directors of the COMPANY at such time,
executed a Joint and Several Guarantee in favor of HSBC whereby private
respondents and Lowe agreed to pay, jointly and severally, on demand all
sums owed by the COMPANY to petitioner BANK under the aforestated
overdraft facility.

The Joint and Several Guarantee provides, inter alia, that:

This guarantee and all rights, obligations and liabilities arising hereunder
shall be construed and determined under and may be enforced in accordance
with the laws of the Republic of Singapore. We hereby agree that the Courts of
Singapore shall have jurisdiction over all disputes arising under this
guarantee. …

The COMPANY failed to pay its obligation. Thus, HSBC demanded payment
and inasmuch as the private respondents still failed to pay, HSBC filed A
complaint for collection of a sum of money against private respondents
Sherman and Reloj before RTC of Quezon City.
Private respondents filed an MTD on the ground of lack of jurisdiction over
the subject matter. The trial court denied the motion. They then filed before
the respondent IAC a petition for prohibition with preliminary injunction
and/or prayer for a restraining order. The IAC rendered a decision enjoining
the RTC Quezon City from taking further cognizance of the case and to dismiss
the same for filing with the proper court of Singapore which is the proper
forum. MR denied, hence this petition.

ISSUE: Do Philippine courts have jurisdiction over the suit, vis-a-vis the
Guarantee stipulation regarding jurisdiction?
HELD: YES
One basic principle underlies all rules of jurisdiction in International Law: a
State does not have jurisdiction in the absence of some reasonable basis for
exercising it, whether the proceedings are in rem quasi in rem or in personam.
To be reasonable, the jurisdiction must be based on some minimum contacts
that will not offend traditional notions of fair play and substantial justice
The defense of private respondents that the complaint should have been filed
in Singapore is based merely on technicality. They did not even claim, much
less prove, that the filing of the action here will cause them any unnecessary
trouble, damage, or expense. On the other hand, there is no showing that
petitioner BANK filed the action here just to harass private respondents.
 10. Saudi Arabian Airlines vs Court of Appeals

Milagros Morada was working as a stewardess for Saudia Arabian Airlines. In 1990, while
she and some co-workers were in a lay-over in Jakarta, Indonesia, an Arab co-worker tried
to rape her in a hotel room. Fortunately, a roomboy heard her cry for help and two of her
Arab co-workers were arrested and detained in Indonesia. Later, Saudia Airlines re-
assigned her to work in their Manila office. While working in Manila, Saudia Airlines advised
her to meet with a Saudia Airlines officer in Saudi. She did but to her surprise, she was
brought to a Saudi court where she was interrogated and eventually sentenced to 5 months
imprisonment and 289 lashes; she allegedly violated Muslim customs by partying with
males. The Prince of Makkah got wind of her conviction and the Prince determined that she
was wrongfully convicted hence the Prince absolved her and sent her back to the
Philippines. Saudia Airlines later on dismissed Morada. Morada then sued Saudia Airlines
for damages under Article 19 and 21 of the Civil Code. Saudia Airlines filed a motion to
dismiss on the ground that the RTC has no jurisdiction over the case because the
applicable law should be the law of Saudi Arabia. Saudia Airlines also prayed for other
reliefs under the premises.
ISSUE: Whether or not Saudia Airlines’ contention is correct.
HELD: No. Firstly, the RTC has acquired jurisdiction over Saudia Airlines when the latter
filed a motion to dismiss with petition for other reliefs. The asking for other reliefs effectively
asked the court to make a determination of Saudia Airlines’s rights hence a submission to
the court’s jurisdiction.
Secondly, the RTC has acquired jurisdiction over the case because as alleged in the
complaint of Morada, she is bringing the suit for damages under the provisions of our Civil
Law and not of the Arabian Law. Morada then has the right to file it in the QC RTC because
under the Rules of Court, a plaintiff may elect whether to file an action in personam (case at
bar) in the place where she resides or where the defendant resides. Obviously, it is well
within her right to file the case here because if she’ll file it in Saudi Arabia, it will be very
disadvantageous for her (and of course, again, Philippine Civil Law is the law invoked).
Thirdly, one important test factor to determine where to file a case, if there is a foreign
element involved, is the so called “locus actus” or where an act has been done. In the case
at bar, Morada was already working in Manila when she was summoned by her superior to
go to Saudi Arabia to meet with a Saudia Airlines officer. She was not informed that she
was going to appear in a court trial. Clearly, she was defrauded into appearing before a
court trial which led to her wrongful conviction. The act of defrauding, which is tortuous, was
committed in Manila and this led to her humiliation, misery, and suffering. And applying the
torts principle in a conflicts case, the SC finds that the Philippines could be said as a situs of
the tort (the place where the alleged tortious conduct took place).
 11. Gemperle vs. Schenker; summons

Facts:

This case was the result of William Gemperle’s retaliatory act when respondent spouses
Paul and Helen Schenker filed a case against him for the enforcement of Schenker's allegedly initial
subscription to the shares of stock of the Philippines-Swiss Trading Co., Inc. and the exercise of his
alleged pre-emptive rights to the then unissued original capital stock of said corporation and the
increase thereof, as well as for an accounting and damages. Petitioner alleged that the said
complaint tainted his name as a businessman. He then filed a complaint for damages and prays for
the retraction of statements made by Helen Schenker.

Summons was personally served to Helen Schenker but not to Paul Schenker. Helen then
filed an answer with a counterclaim, but Paul Schenker filed a motion to dismiss arguing that the
court never acquired jurisdiction over his person since admittedly, he is a Swiss citizen, residing in
Zurich, Switzerland, and has not been actually served with summons in the Philippines.

Issue:

Whether or not the court acquired jurisdiction over the person of Paul Schenker.

Ruling:

Yes, although as a rule, when the defendant is a non-resident and in an accion in

personam, jurisdiction over the person of the defendant can be acquired only through voluntary
appearance or personal service of summons. But this case is an exception to the said rule. The
Supreme ratiocinated:

“We hold that the lower court had acquired jurisdiction over said defendant, through service of the
summons addressed to him upon Mrs. Schenker, it appearing from said answer that she is the
representative and attorney-in-fact of her husband aforementioned civil case No. Q-2796, which
apparently was filed at her behest, in her aforementioned representative capacity. In other words,
Mrs. Schenker had authority to sue, and had actually sued on behalf of her husband, so that she
was, also, empowered to represent him in suits filed against him, particularly in a case, like the of
the one at bar, which is consequence of the action brought by her on his behalf.”

Briefly, in an accion in personam where the defendant is a non-resident, substituted service of

summons does not apply. However, by way of exception, substituted service of summons may be
effected, if the following requisites are present:

1. The summons is served to the spouse of the defendant

2. The spouse must be residing in the Philippines

3. The spouse is appointed as attorney-in-fact of the spouse defendant in a previous case

involving the non-resident spouse.
 12. BELEN V. CHAVEZ, G.R. NO 175334 (2008)

FACTS: Spouses Pacleb (private respondents) filed an action for the enforcement of a
foreign judgment against spouses Belen (petitioners). The complaint alleged that the
Pacleb secured a judgment by default rendered by Judge John W. Green of the
Superior Court of the State of California, which ordered the spouses Belen to pay
$56,204.69 representing loan repayment and share in the profits plus interest and costs
of suit. The summons was served on the Belen’s address in Laguna, as was alleged in
the complaint, and received by Marcelo M. Belen.
1. Spouses Belen filed an answer alleging that they were actually residents of
California and that their liability had already been extinguished via a release
abstract judgment issued in the collection case abroad.
2. For failure to attend the pre-trial conference, the RTC ordered the ex parte
presentation of evidence for Pacleb.
3. Belen subsequently filed a Motion to Dismiss citing the judgment of dismissal
issued by the Superior Court of California; however the MTD was dismissed for
failure to submit a copy of the judgment of dismissal
4. Spouses Pacleb, for their part, filed for the amendment of the complaint, stating
that they withdrew the complaint (in California) because of the prohibitive cost
of litigation.
5. For failure of spouses Belen to appear in the rescheduled pre-trial conference,
RTC declared Belen in default and allowed the presentation of ex parte
evidence. In the meantime, the counsel (Alcantara) of petitioners died without
the RTC being informed of such fact. The RTC ruled against Belen and ordered
them to pay Pacleb
6. A copy of the decision was sent to Atty. Alcantara but was returned with the
notation “addressee deceased.” A copy of the same was then sent to the last
known address of spouses Belen in Laguna. Atty. Culvera, the new counsel of
spouses Belen, filed a motion to quash the Writ of Execution as well as a notice of
appeal. The RTC denied the same.
7. Petitioners filed a petition for review on certiorari (Rule 65) alleging that CA
committed grave abuse of discretion in denying petitioners’ motion to quash the
writ of execution and notice of appeal despite sufficient legal bases in support
thereof.

ISSUE: WON the RTC acquired jurisdiction over the persons of petitioners through either
the proper service of summons or the appearance of Atty. Alcantara on behalf of
petitioners

HELD: Yes. Courts acquire jurisdiction over the plaintiffs upon the filing of the
complaint. On the other hand, jurisdiction over the defendants in a civil case is
acquired either through the service of summons upon them or through their voluntary
appearance in court and their submission to its authority. As a rule, if defendants have
not been summoned, the court acquires no jurisdiction over their person, and a
judgment rendered against them is null and void. To be bound by a decision, a party
should first be subject to the court’s jurisdiction.
In an action in personam, jurisdiction over the person of the defendant is necessary for
the court to validly try and decide the case. Jurisdiction over the person of a resident
defendant who does not voluntarily appear in court can be acquired by personal
service of summons as provided under Sec 7, Rule 14 ROC. If he cannot be personally
served with summons within a reasonable time, substituted service may be made in
accordance with Sec 8 of said Rule. If he is temporarily out of the country, any of the
following modes of service may be resorted to: (1) substituted service set forth in Sec 8;
(2) personal service outside the country, with leave of court; (3) service by publication,
also with leave of court; or (4) any other manner the court may deem sufficient.

In an action in personam wherein the defendant is a non-resident who does not

voluntarily submit himself to the authority of the court, personal service of summons
within the state is essential to the acquisition of jurisdiction over her person. This method
of service is possible if such defendant is physically present in the country. If he isnot
found therein, the court cannot acquire jurisdiction over his person and therefore
cannot validly try and decide the case against him. An exception was laid down
in Gemperle v. Schenker wherein a non-resident was served with summons through his
wife, who was a resident of the Philippines and who was his representative and
attorney-in-fact in a prior civil case filed by him; moreover, the second case was a
mere offshoot of the first case.

CAB: the records of the case reveal that spouses Belen were permanent residents of
California. It has been consistently maintained that they were not physically resent in
the Philippines. Therefore, the service of summons in the petitioners’ address in Laguna
was defective and did not serve to vest in court jurisdiction over their person.
Nevertheless, the CA correctly concluded that the appearance of Atty. Alcantara and
his filing of numerous pleadings were sufficient to vest such jurisdiction. By supplying the
court with various documents that could only have been supplied by spouses Belen,
implied authorization could be gleaned from such. In sum, there was voluntary
submission to the jurisdiction of the RTC.

The running of the fifteen-day period for appeal did not commence upon the service of
the RTC decision at the address on record of Atty. Alcantara or at the Laguna address.
It is deemed served on petitioners only upon its receipt by Atty. Culvera on 29
December 2003. Therefore, the filing of the Notice of Appeal on 06 January 2004 is
within the reglementary period and should be given due course.
 13.PERKINS VS. ROXAS
FACTS:
July 5, 1938, respondent Eugene Perkins filed a complaint in the CFI- Manila against
the Benguet Consolidated Mining Company for the recovery of a sum consisting of
dividends which have been declared and made payable on shares of stock registered in
his name, payment of which was being withheld by the company, and for the
recognition of his right to the control and disposal of said shares to the exclusion of all
others. The company alleged, by way of defense that the withholding of plaintiff’s
right to the disposal and control of the shares was due to certain demands made with
respect to said shares by the petitioner Idonah Perkins, and by one Engelhard.
Eugene Perkins included in his modified complaint as parties defendants petitioner,
Idonah Perkins, and Engelhard. Eugene Perkins prayed that petitioner Idonah Perkins
and H. Engelhard be adjudged without interest in the shares of stock in question and
excluded from any claim they assert thereon. Summons by publication were served
upon the nonresident defendants Idonah Perkins and Engelhard. Engelhard filed his
answer. Petitioner filed her answer with a crosscomplaint in which she sets up a
judgment allegedly obtained by her against respondent Eugene Perkins, from the SC
of the State of New York, wherein it is declared that she is the sole legal owner and
entitled to the possession and control of the shares of stock in question with all the
cash dividends declared thereon by the Benguet Consolidated Mining Company.

Idonah Perkins filed a demurrer thereto on the ground that “the court has no
jurisdiction of the subject of the action,” because the alleged judgment of the SC of
the State of New York is res judicata. Petitioner’s demurrer was overruled, thus this
petition.

ISSUE:
WON in view of the alleged judgment entered in favor of the petitioner by the SC of
New York and which is claimed by her to be res judicata on all questions raised by the
respondent, Eugene Perkins, the local court has jurisdiction over the subject matter of
the action.
RULING:
By jurisdiction over the subject matter is meant the nature of the cause of action and
of the relief sought, and this is conferred by the sovereign authority which organizes
the court, and is to be sought for in general nature of its powers, or in authority
specially conferred. In the present case, the amended complaint filed by the
respondent, Eugene Perkins alleged calls for the adjudication of title to certain shares
of stock of the Benguet Consolidated Mining Company and the granting of
affirmative reliefs, which fall within the general jurisdiction of the CFI- Manila.
Similarly CFI- Manila is empowered to adjudicate the several demands contained in
petitioner’s crosscomplaint.
Idonah Perkins in her crosscomplaint brought suit against Eugene Perkins and the
Benguet Consolidated Mining Company upon the alleged judgment of the SC of the
State of New York and asked the court below to render judgment enforcing that New
York judgment, and to issue execution thereon. This is a form of action recognized by
section 309 of the Code of Civil Procedure (now section 47, Rule 39, Rules of Court)
and which falls within the general jurisdiction of the CFI- Manila, to adjudicate, settle
and determine.

The petitioner expresses the fear that the respondent judge may render judgment
“annulling the final, subsisting, valid judgment rendered and entered in this
petitioner’s favor by the courts of the State of New York, which decision is res
judicata on all the questions constituting the subject matter of civil case” and argues
on the assumption that the respondent judge is without jurisdiction to take cognizance
of the cause. Whether or not the respondent judge in the course of the proceedings
will give validity and efficacy to the New York judgment set up by the petitioner in
her cross-complaint is a question that goes to the merits of the controversy and relates
to the rights of the parties as between each other, and not to the jurisdiction or power
of the court. The test of jurisdiction is whether or not the tribunal has power to enter
upon the inquiry, not whether its conclusion in the course of it is right or wrong. If its
decision is erroneous, its judgment can be reversed on appeal; but its determination of
the question, which the petitioner here anticipates and seeks to prevent, is the exercise
by that court and the rightful exercise of its jurisdiction.

Petition denied
 14. Adong v. Cheong Seng Gee
Facts:

Cheong Boo, a native of China died in Zamboanga, Philippine Islands on August 5, 1919 and left
property worth nearly P100,000 which is now being claimed by two parties - (1) Cheong Seng Gee who
alleged that he was a legitimate child by marriage contracted by Cheong Boo with Tan Bit in China in
1985, and (2) Mora Adong who alleged that she had been lawfully married to Cheong Boo in 1896 in
Basilan, Philippine Islands and had two daughters with the deceased namely Payang and Rosalia. The
conflicting claims to Cheong Boo’s estate were ventilated in the lower court that ruled that Cheong Seng
Gee failed to sufficiently establish the Chinese marriage through a mere letter testifying that Cheong Boo
and Tan Bit married each other but that because Cheong Seng Gee had been admitted to the Philippine
Islands as the son of the deceased, he should share in the estate as a natural child. With reference to the
allegations of Mora Adong and her daughters, the trial court reached the conclusion that the
marriage between Adong and Cheong Boo had been adequately proved but that under the laws of
thePhilippine Islands it could not be held to be a lawful marriage and thus the daughter Payang and
Rosalia would inherit as natural children. The lower court believes that Mohammedan marriages are not
valid under the Philippine Island’s laws this as an Imam as a solemnizing officer and under Quaranic
laws.

ISSUES:

1. Whether or not the Chinese marriage between Cheong Boo and Tan Dit is valid.

2. Whether or not the Mohammedan marriage between Cheong Boo and Mora Adong is valid

HELD:

The Supreme Court found the (1) Chinese marriage not proved and Chinaman Cheong Seng Gee
has only the rights of a natural child while (2) it found the Mohammedan marriage to be proved and to be
valid, thus giving to the widow Mora Adong and the legitimate children Payang and Rosalia the rights
accruing to them under the law. The Supreme Court held that marriage in this jurisdiction is not only a
civil contract but it is a new relation, an instruction in the maintenance of which the public is deeply
interested. The presumption as to marriage is that every intendment of the law leans toward legalizing
matrimony. Persons dwelling together inapparent matrimony are presumed, in the absence of counter-
presumption or evidence special to the case, to be in fact married. The reason is that such is the common
order of society, and if the parties were not what they thus hold themselves out as being, they would be
living in the constant violation of decency of the law. As to retroactive force, marriage laws is in the nature
of a curative provision intended to safeguard society by legalizing prior marriages. Public policy should
aid acts intended to validate marriages and should retard acts intended to invalidate marriages. This as
for public policy, the courts can properly incline the scales of their decision in favor of that solution
which will most effectively promote the public policy. That is the true construction which will best
carry legislative intention into effect. Sec. IV of the Marriage law provides that “all marriages contracted
outside the islands, which would be valid by the laws of the country in which the same were contracted,
are valid in these islands. To establish a valid foreign marriage pursuant to this comity provision, it is first
necessary to prove before the courts of the Islands the existence of the foreign law as a question of fact,
and it is then necessary to prove the alleged foreign marriage by convincing evidence. A Philippine
marriage followed by23 years of uninterrupted marital life, should not be impugned and discredited, after
the death of the husband through an alleged prior Chinese marriage, “save upon proof so clear, strong and
unequivocal as to produce a moral conviction of the existence of such impediment.” A marriage alleged to
have been contracted in China and proven mainly by a so-called matrimonial letter held not to be valid in
the Philippines.
 15. RAYTHEON V. ROUZIE (2008)
FACTS:
Sometime in 1990, Brand Marine Services, Inc., a corporation duly organized and existing under
the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr.,
an American citizen, entered into a contract whereby BMSI hired respondent as its representative to
negotiate the sale of services in several government projects in the Philippines for an agreed
remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract
with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt.
Pinatubo eruption and mudflows.

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations
Commission, a suit against BMSI and Rust International, Inc., Rodney C. Gilbert and Walter G. Browning
for alleged nonpayment of commissions, illegal termination and breach of employment contract.
On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages
before the Regional Trial Court of Bauang, La Union. The Complaint named as defendants herein
petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the
earlier labor case.
Petitioner also referred to the NLRC decision which disclosed that per the written agreement
between respondent and BMSI and RUST, denominated as “Special Sales Representative Agreement,”
the rights and obligations of the parties shall be governed by the laws of the State of Connecticut.
Petitioner sought the dismissal of the complaint on grounds of failure to state a cause of action and forum
non conveniens and prayed for damages by way of compulsory counterclaim.
Petitioner asserts that the written contract between respondent and BMSI included a valid choice of
law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also
mentions the presence of foreign elements in the dispute – namely, the parties and witnesses involved
are American corporations and citizens and the evidence to be presented is located outside the
Philippines – that renders our local courts inconvenient forums.
ISSUE:
WHETHER OR NOT THE COMPLAINT BE DISMISSED ON THE GROUND OF FORUM NON
CONVENIENS?
RULING:
On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine
court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can
proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a
foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent
(as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of
petitioner (as party defendant) was acquired by its voluntary appearance in court.
That the subject contract included a stipulation that the same shall be governed by the lawsof the
State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that
matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct
concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law
asks the further question whether the application of a substantive law which will determine the merits of
the case is fair to both parties.The choice of law stipulation will become relevant only when the
substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the
trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse
impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are
not precluded from seeking remedies elsewhere. Petitioner’s averments of the foreign elements in the
instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and
the parties involved.
 Moreover, the propriety of dismissing a case based on the principle of forum non
conveniens requires a factual determination; hence, it is more properly considered as a matter of
defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this
ground, it should do so only after vital facts are established, to determine whether special circumstances
require the court’s desistance.
 16. Manila Hotel Corporation vs National Labor
Relations Commission

In May 1988, Marcelo Santos was an overseas worker in Oman. In June 1988, he was
recruited by Palace Hotel in Beijing, China. Due to higher pay and benefits, Santos agreed
to the hotel’s job offer and so he started working there in November 1988. The employment
contract between him and Palace Hotel was however without the intervention of the
Philippine Overseas Employment Administration (POEA). In August 1989, Palace Hotel
notified Santos that he will be laid off due to business reverses. In September 1989, he was
officially terminated.

In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was
impleaded but no summons were served upon it. MHC is a government owned and
controlled corporation. It owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL
manages the affair of the Palace Hotel. The labor arbiter who handled the case ruled in
favor of Santos. The National Labor Relations Commission (NLRC) affirmed the labor
arbiter.

ISSUE: Whether or not the NLRC has jurisdiction over the case.

HELD: No. The NLRC is a very inconvenient forum for the following reasons:

1. The only link that the Philippines has in this case is the fact that Santos is a Filipino;

2. However, the Palace Hotel and MHIL are foreign corporations – MHC cannot be held liable
because it merely owns 50% of MHIL, it has no direct business in the affairs of the Palace
Hotel. The veil of corporate fiction can’t be pierced because it was not shown that MHC is
directly managing the affairs of MHIL. Hence, they are separate entities.

3. Santos’ contract with the Palace Hotel was not entered into in the Philippines;

4. Santos’ contract was entered into without the intervention of the POEA (had POEA
intervened, NLRC still does not have jurisdiction because it will be the POEA which will hear
the case);

5. MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers
are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining
to the case. It is not competent to determine the facts because the acts complained of
happened outside our jurisdiction. It cannot determine which law is applicable. And in case
a judgment is rendered, it cannot be enforced against the Palace Hotel (in the first place, it
was not served any summons).

The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case if it chooses to do so provided:

(1) that the Philippine court is one to which the parties may conveniently resort to;

(2) that the Philippine court is in a position to make an intelligent decision as to the law and
the facts; and

(3) that the Philippine court has or is likely to have power to enforce its decision.

None of the above conditions are apparent in the case at bar.

 17. Augusto Santos III vs Northwest
Orient Airlines
Augusto Benedicto Santos III is a minor represented by his dad. In October 1986, he bought
a round trip ticket from Northwest Orient Airlines (NOA) in San Francisco. His flight would
be from San Francisco to Manila via Tokyo and back to San Francisco. His scheduled flight
was in December. A day before his departure he checked with NOA and NOA said he made
no reservation and that he bought no ticket. The next year, due to the incident, he sued
NOA for damages. He sued NOA in Manila. NOA argued that Philippine courts have no
jurisdiction over the matter pursuant to Article 28(1) of the Warsaw Convention, which
provides that complaints against international carriers can only be instituted in:
1. the court of the domicile of the carrier (NOA’s domicile is in the USA);
2. the court of its principal place of business (which is San Francisco, USA);
3. the court where it has a place of business through which the contract had been made
(ticket was purchased in San Francisco so that’s where the contract was made);
4. the court of the place of destination (Santos bought a round trip ticket which final
destination is San Francisco).
The lower court ruled in favor of NOA. Santos III averred that Philippine courts have
jurisdiction over the case and he questioned the constitutionality of Article 28 (1) of the
Warsaw Convention.
ISSUE: Whether or not Philippine courts have jurisdiction over the matter to conduct
judicial review.
HELD: No. The Supreme Court ruled that they cannot rule over the matter for the SC is
bound by the provisions of the Warsaw Convention which was ratified by the Senate. Until &
unless there would be amendment to the Warsaw Convention, the only remedy for Santos
III is to sue in any of the place indicated in the Convention such as in San Francisco, USA.
The SC cannot rule upon the constitutionality of Article 28(1) of the Warsaw Convention. In
the first place, it is a treaty which was a joint act by the legislative and the executive. The
presumption is that it was first carefully studied and determined to be constitutional before it
was adopted and given the force of law in this country. In this case, Santos was not able to
offer any compelling argument to overcome the presumption.
 18. El Banco Espanol-Filipino vs. Vicente Palanca
G.R.

* JURISDICTION, HOW ACQUIRED: Jurisdiction over the property which is the subject of the litigation
may result either from a seizure of the property under legal process, whereby it is brought into the actual
custody of the law, or it may result from the institution of legal proceedings wherein, under special
provisions of law, the power of the court over the property is recognized and made effective.
* The action to foreclose a mortgage is said to be a proceeding quasi in rem, by which is expressed the
idea that while it is not strictly speaking an action in rem yet it partakes of that nature and is substantially
such.
* DUE PROCESS IN FORECLOSURE PROCEEDINGS: Property is always assumed to be in the
possession of its owner, in person or by agent; and he may be safely held, under certain conditions, to be
affected with knowledge that proceedings have been instituted for its condemnation and sale.

FACTS:

Engracio Palanca Tanquinyeng y Limquingco mortgaged various parcels of real property in Manila to El
Banco Espanol-Filipino. Afterwards, Engracio returned to China and there he died on January 29, 1810
without returning again to the Philippines. The mortgagor then instituted foreclosure proceeding but since
defendant is a non-resident, it was necessary to give notice by publication. The Clerk of Court was also
directed to send copy of the summons to the defendant’s last known address, which is in Amoy, China. It
is not shown whether the Clerk complied with this requirement. Nevertheless, after publication in a
newspaper of the City of Manila, the cause proceeded and judgment by default was rendered. The
decision was likewise published and afterwards sale by public auction was held with the bank as the
highest bidder. On August 7, 1908, this sale was confirmed by the court. However, about seven years
after the confirmation of this sale, a motion was made by Vicente Palanca, as administrator of the estate
of the original defendant, wherein the applicant requested the court to set aside the order of default and
the judgment, and to vacate all the proceedings subsequent thereto. The basis of this application was that
the order of default and the judgment rendered thereon were void because the court had never acquired
jurisdiction over the defendant or over the subject of the action.

ISSUE:

* Whether or not the lower court acquired jurisdiction over the defendant and the subject matter of the
action
* Whether or not due process of law was observed

RULING:

On Jurisdiction

The word “jurisdiction” is used in several different, though related, senses since it may have reference (1)
to the authority of the court to entertain a particular kind of action or to administer a particular kind of
relief, or it may refer to the power of the court over the parties, or (2) over the property which is the
subject to the litigation.

The sovereign authority which organizes a court determines the nature and extent of its powers in general
and thus fixes its competency or jurisdiction with reference to the actions which it may entertain and the
relief it may grant.

How Jurisdiction is Acquired

Jurisdiction over the person is acquired by the voluntary appearance of a party in court and his
submission to its authority, or it is acquired by the coercive power of legal process exerted over the
person.

Jurisdiction over the property which is the subject of the litigation may result either from a seizure of the
property under legal process, whereby it is brought into the actual custody of the law, or it may result from
the institution of legal proceedings wherein, under special provisions of law, the power of the court over
the property is recognized and made effective. In the latter case the property, though at all times within
the potential power of the court, may never be taken into actual custody at all. An illustration of the
jurisdiction acquired by actual seizure is found in attachment proceedings, where the property is seized at
the beginning of the action, or some subsequent stage of its progress, and held to abide the final event of
the litigation. An illustration of what we term potential jurisdiction over the res, is found in the proceeding
to register the title of land under our system for the registration of land. Here the court, without taking
actual physical control over the property assumes, at the instance of some person claiming to be owner,
to exercise a jurisdiction in rem over the property and to adjudicate the title in favor of the petitioner
against all the world.

In the terminology of American law the action to foreclose a mortgage is said to be a proceeding quasi in
rem, by which is expressed the idea that while it is not strictly speaking an action in rem yet it partakes of
that nature and is substantially such. The expression "action in rem" is, in its narrow application, used
only with reference to certain proceedings in courts of admiralty wherein the property alone is treated as
responsible for the claim or obligation upon which the proceedings are based. The action quasi rem
differs from the true action in rem in the circumstance that in the former an individual is named as
defendant, and the purpose of the proceeding is to subject his interest therein to the obligation or lien
burdening the property. All proceedings having for their sole object the sale or other disposition of the
property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in a general
way thus designated. The judgment entered in these proceedings is conclusive only between the parties.

It is true that in proceedings of this character, if the defendant for whom publication is made appears, the
action becomes as to him a personal action and is conducted as such. This, however, does not affect the
proposition that where the defendant fails to appear the action is quasi in rem; and it should therefore be
considered with reference to the principles governing actions in rem.
 19. KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO.,
LTD., Petitioners,

vs.

MINORU KITAMURA, Respondent.

FACTS:

On March 1999, Nippon Engineering Consultants Co., Ltd, a Japanese firm, was
contracted by the Department of Public Works and Highways (DPWH) to supervise the
construction of the Southern Tagalog Access Road. In April 1999, Nippon entered into
an independent contractor agreement (ICA) with Minoru Kitamura for the latter to head
the said project. The ICA was entered into in Japan and is effective for a period of 1
year (so until April 2000). In January 2000, DPWH awarded the Bongabon-Baler Road
project to Nippon. Nippon subsequently assigned Kitamura to head the road project. But
in February 2000, Kazuhiro Hasegawa, the general manager of Nippon informed
Kitamura that they were pre-terminating his contract. Kitamura sought Nippon to
reconsider but Nippon refused to negotiate. Kitamura then filed a complaint for specific
performance and damages against Nippon in the RTC of Lipa.

Hasegawa filed a motion to dismiss on the ground that the contract was entered
in Japan; hence, applying the principle of lex loci celebracionis, cases arising from the
contract should be cognizable only by Japanese courts. The trial court denied the
motion. Eventually, Nippon filed a petition for certiorari with the Supreme Court.

Hasegawa, on appeal significantly changed its theory, this time invoking forum
non conveniens; that the RTC is an inconvenient forum because the parties are
Japanese nationals who entered into a contract in Japan. Kitamura, on the other hand,
invokes the trial court’s ruling which states that matters connected with the performance
of contracts are regulated by the law prevailing at the place of performance. Since the
obligations in the ICA are executed in the Philippines, courts here have jurisdiction.

ISSUE:

Should the complaint against Nippon be dismissed?

HELD:

No.

The trial court did the proper thing in taking cognizance of it.

In the first place, the case filed by Kitamura is a complaint for specific
performance and damages. Such case is incapable of pecuniary estimation; such cases
are within the jurisdiction of the regional trial court.
 Hasegawa filed his motion to dismiss on the ground of forum non conveniens.
However, such ground is not one of those provided for by the Rules as a ground for
dismissing a civil case.

The Supreme Court also emphasized that the contention that Japanese laws should
apply is premature. In conflicts cases, there are three phases and each next phase
commences when one is settled, to wit:

1. Jurisdiction – Where should litigation be initiated? Court must have jurisdiction

over the subject matter, the parties, the issues, the property, and the res. Also
considered, whether it is fair to cause a defendant to travel to this state; choice of
law asks further question whether the application of a substantive law which will
determine the merits of the case is fair to both parties.

2. Choice of Law – Which law will the court apply? Once a local court takes
cognizance, it does not mean that the local laws must automatically apply. The
court must determine which substantive law when applied to the merits will be
fair to both parties.

3. Recognition and Enforcement of Judgment – Where can the resulting

judgment be enforced?

This case is not yet in the second phase because upon the RTC’s taking cognizance
of the case, Hasegawa immediately filed a motion to dismiss, which was denied. He
filed a motion for reconsideration, which was also denied. Then he bypassed the proper
procedure by immediately filing a petition for certiorari. The question of which law
should be applied should have been settled in the trial court had Hasegawa not
improperly appealed the interlocutory order denying his motion for reconsideration.
 20. Lim vs. Collector 36 Phil 472

FACTS:
 The real question raised on this appeal is whether the Insular Collector of Customs denied
entry into the Philippine Islands two children aged 8 and 14 years, respectively, under and by
authority of the Chinese Immigration, Laws, it appearing that the children arrived at the Port
of Manila accompanied by and in the custody of their mother, a Filipino woman;
 The children were born in China, out of lawful wedlock; and that their father was Chinese.

ISSUE:
Whether or not the Insular Collector of Customs may lawfully deny entry into the
Philippines to the 2 children?

RULING
 The Court by analogous reasoning to that upon which the Supreme Court of the United
States held that the wives and minor children of chinese merchants domiciled in the united
states may enter that country without certificates, these children must be held to be entitled
to enter the philippine islands with their mother, for the purpose of taking up their residence
here with her, it appearing that she is natural guardian, entitled to their custody and charged
with their maintenance and education. (U. S. vs.Gue Lim, 176 U. S. 459.)
 SC is not aware of any chinese law which differentiates the status of infant children, born out
of lawful wedlock, from that of similar children under the laws in force in the philippine
islands.
 SC ASSUMES THAT IN CHINA AS WELL AS IN THE PHILIPPINE ISLANDS SUCH CHILDREN
HAVE THE RIGHT TO LOOK TO THEIR MOTHER FOR THEIR MAINTENANCE AND
EDUCATION, AND THAT SHE IS ENTITLED TO THEIR CUSTODY AND CONTROL IN
FULFILLING THE OBLIGATIONS TOWARDS THEM WHICH ARE IMPOSED UPON HER, NOT
ONLY BY THE NATURAL IMPULSES OF LOVE AND AFFECTION, BUT ALSO BY THE EXPRESS
MANDATE OF THE LAW.
 SC OPINED THATCHINESE IMMIGRATION LAWS SHOULD NOT BE CONSTRUED SO AS TO
EXCLUDE INFANT CHILDREN OF A FILIPINO MOTHER, BORN OUT OF LAWFUL WEDLOCK,
SEEKING ENTRANCE TO THE PHILIPPINE ISLANDS FOR THE PURPOSE OF TAKING UP THEIR
RESIDENCE WITH HER IN HER NATIVE LAND.
 We conclude, therefore, that, IT APPEARING THAT THE RESPONDENT COLLECTOR OF
CUSTOMS IS DETAINING THE PETITIONERS UNDER AN ERRONEOUS CONSTRUCTION OF
THE IMMIGRATION LAWS, AND IT APPEARING FROM THE FACTS DISCLOSED BY THE
ADMINISTRATIVE PROCEEDINGS THAT THESE CHILDREN ARE ENTITLED TO ADMISSION
INTO THE PHILIPPINE ISLANDS, THE ORDER ENTERED IN THE COURT BELOW SHOULD BE
REVERSED, AND IN LIEU THEREOF AN ORDER SHOULD BE ENTERED DIRECTING THE
DISCHARGE OF THESE CHILDREN FROM THE CUSTODY OF THE INSULAR COLLECTOR OF
CUSTOMS, WITH THE COSTS IN BOTH INSTANCES, DE OFFICIO.